Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 01, 2023 | |
Document Information | ||
Entity Registrant Name | MERCHANTS BANCORP | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38258 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | IN | |
Entity Tax Identification Number | 20-5747400 | |
Entity Address, Address Line One | 410 Monon Blvd. | |
Entity Address, City or Town | Carmel | |
Entity Address, State or Province | IN | |
Entity Address, Postal Zip Code | 46032 | |
City Area Code | 317 | |
Local Phone Number | 569-7420 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 43,233,618 | |
Entity Central Index Key | 0001629019 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Common Stock. | ||
Document Information | ||
Title of 12(b) Security | Common Stock, without par value | |
Trading Symbol | MBIN | |
Security Exchange Name | NASDAQ | |
Series A Preferred Stock | ||
Document Information | ||
Title of 12(b) Security | Series A Preferred Stock, without par value | |
Trading Symbol | MBINP | |
Security Exchange Name | NASDAQ | |
Series B Preferred Stock | ||
Document Information | ||
Title of 12(b) Security | Depositary Shares, each representing a 1/40th interest in a share of Series B Preferred Stock, without par value | |
Trading Symbol | MBINO | |
Security Exchange Name | NASDAQ | |
Series C Preferred Stock | ||
Document Information | ||
Title of 12(b) Security | Depositary Shares, each representing a 1/40th interest in a share of Series C Preferred Stock, without par value | |
Trading Symbol | MBINN | |
Security Exchange Name | NASDAQ | |
Series D Preferred Stock | ||
Document Information | ||
Title of 12(b) Security | Depositary Shares, each representing a 1/40th interest in a share of Series D Preferred Stock, without par value | |
Trading Symbol | MBINM | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and due from banks | $ 19,002 | $ 22,170 |
Interest-earning demand accounts | 350,584 | 203,994 |
Cash and cash equivalents | 369,586 | 226,164 |
Securities purchased under agreements to resell | 3,438 | 3,464 |
Mortgage loans in process of securitization | 197,074 | 154,194 |
Securities available for sale | 679,518 | 323,337 |
Securities held to maturity (includes $1,106,582 and $1,118,966 at fair value, respectively) | 1,104,835 | 1,119,078 |
Federal Home Loan Bank (FHLB) stock | 39,130 | 39,130 |
Loans held for sale (includes $85,516 and $82,192 at fair value, respectively) | 2,855,250 | 2,910,576 |
Loans receivable, net of allowance for credit losses on loans of $51,838 and $44,014, respectively | 8,575,210 | 7,426,858 |
Premises and equipment, net | 35,793 | 35,438 |
Servicing rights | 143,867 | 146,248 |
Interest receivable | 64,282 | 56,262 |
Goodwill | 15,845 | 15,845 |
Intangible assets, net | 1,068 | 1,186 |
Other assets and receivables | 156,070 | 157,447 |
Total assets | 14,240,966 | 12,615,227 |
Deposits | ||
Noninterest-bearing | 313,733 | 326,875 |
Interest-bearing | 11,031,498 | 9,744,470 |
Total deposits | 11,345,231 | 10,071,345 |
Borrowings | 1,233,762 | 930,392 |
Deferred and current tax liabilities, net | 32,827 | 19,613 |
Other liabilities | 123,462 | 134,138 |
Total liabilities | 12,735,282 | 11,155,488 |
Commitments and Contingencies | ||
Shareholders' Equity | ||
Common stock, without par value Authorized - 75,000,000 shares Issued and outstanding - 43,233,618 shares at March 31, 2023 and 43,113,127 shares at December 31, 2022 | 138,105 | 137,781 |
Retained earnings | 875,700 | 832,871 |
Accumulated other comprehensive loss | (7,729) | (10,521) |
Total shareholders' equity | 1,505,684 | 1,459,739 |
Total liabilities and shareholders' equity | 14,240,966 | 12,615,227 |
7% Series A Preferred Stock | ||
Shareholders' Equity | ||
Preferred stock | 50,221 | 50,221 |
6% Series B Preferred Stock | ||
Shareholders' Equity | ||
Preferred stock | 120,844 | 120,844 |
6% Series C Preferred Stock | ||
Shareholders' Equity | ||
Preferred stock | 191,084 | 191,084 |
8.25% Series D Preferred Stock | ||
Shareholders' Equity | ||
Preferred stock | $ 137,459 | $ 137,459 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Held to maturity securities, fair value | $ 1,106,582 | $ 1,118,966 |
Loans held for sale at fair value | 85,516 | 82,192 |
Allowance for credit losses on loans | $ 51,838 | $ 44,014 |
Stockholders' Equity: | ||
Common stock, without par value (in dollars per share) | ||
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 43,233,618 | 43,113,127 |
Common stock, shares outstanding | 43,233,618 | 43,113,127 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
7% Series A Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, dividend rate (as a percent) | 7% | 7% |
Preferred stock liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred stock, shares authorized | 3,500,000 | 3,500,000 |
Preferred stock, shares issued | 2,081,800 | 2,081,800 |
Preferred stock, shares outstanding | 2,081,800 | 2,081,800 |
6% Series B Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, dividend rate (as a percent) | 6% | 6% |
Preferred stock liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 125,000 | 125,000 |
Preferred stock, shares issued | 125,000 | 125,000 |
Preferred stock, shares outstanding | 125,000 | 125,000 |
Depositary shares | 5,000,000 | 5,000,000 |
6% Series C Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, dividend rate (as a percent) | 6% | 6% |
Preferred stock liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 200,000 | 200,000 |
Preferred stock, shares issued | 196,181 | 196,181 |
Preferred stock, shares outstanding | 196,181 | 196,181 |
Depositary shares | 7,847,233 | 7,847,233 |
8.25% Series D Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, dividend rate (as a percent) | 8.25% | 8.25% |
Preferred stock liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 300,000 | 300,000 |
Preferred stock, shares issued | 142,500 | 142,500 |
Preferred stock, shares outstanding | 142,500 | 142,500 |
Depositary shares | 5,700,000 | 5,700,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Interest Income | ||
Loans | $ 189,450 | $ 72,196 |
Mortgage loans in process of securitization | 1,648 | 2,245 |
Investment securities: | ||
Available for sale - taxable | 2,266 | 701 |
Held to maturity | 15,754 | |
Federal Home Loan Bank stock | 427 | 269 |
Other | 1,749 | 601 |
Total interest income | 211,294 | 76,012 |
Interest Expense | ||
Deposits | 104,442 | 8,813 |
Borrowed funds | 6,159 | 1,474 |
Total interest expense | 110,601 | 10,287 |
Net Interest Income | 100,693 | 65,725 |
Provision for credit losses | 6,867 | 2,451 |
Net Interest Income After Provision for Credit Losses | 93,826 | 63,274 |
Noninterest Income | ||
Gain on sale of loans | 6,733 | 17,965 |
Loan servicing fees, net | 2,360 | 9,731 |
Mortgage warehouse fees | 1,028 | 1,858 |
Syndication and asset management fees | 1,212 | 614 |
Other income | 2,931 | 4,429 |
Total noninterest income | 14,264 | 34,597 |
Noninterest Expense | ||
Salaries and employee benefits | 22,146 | 21,293 |
Loan expenses | 804 | 1,211 |
Occupancy and equipment | 2,232 | 1,814 |
Professional fees | 2,269 | 1,303 |
Deposit insurance expense | 2,178 | 759 |
Technology expense | 1,577 | 1,236 |
Other expense | 3,566 | 3,417 |
Total noninterest expense | 34,772 | 31,033 |
Income Before Income Taxes | 73,318 | 66,838 |
Provision for income taxes | 18,363 | 16,696 |
Net Income | 54,955 | 50,142 |
Dividends on preferred stock | (8,667) | (5,728) |
Net Income Allocated to Common Shareholders | $ 46,288 | $ 44,414 |
Basic Earnings Per Share | $ 1.07 | $ 1.03 |
Diluted Earnings Per Share | $ 1.07 | $ 1.02 |
Weighted-Average Shares Outstanding | ||
Basic (in Shares) | 43,179,604 | 43,190,066 |
Diluted (in Shares) | 43,290,779 | 43,360,034 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Condensed Consolidated Statements of Comprehensive Income | ||
Net Income | $ 54,955 | $ 50,142 |
Other Comprehensive Income (Loss): | ||
Net change in unrealized gain/(losses) on investment securities available for sale, net of tax (expense)/benefits of $(934) and $1,650, respectively | 2,792 | (4,850) |
Other comprehensive income (loss) for the period | 2,792 | (4,850) |
Comprehensive Income | $ 57,747 | $ 45,292 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Condensed Consolidated Statements of Comprehensive Income | ||
Tax (expense)/ benefits on net change in unrealized gains/(losses) on investment securities available for sale | $ (934) | $ 1,650 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Shareholders' Equity - USD ($) $ in Thousands | Common stock | Preferred stock 7% Series A Preferred Stock | Preferred stock 6% Series B Preferred Stock | Preferred stock 6% Series C Preferred Stock | Preferred stock 8.25% Series D Preferred Stock | Retained Earnings 7% Series A Preferred Stock | Retained Earnings 6% Series B Preferred Stock | Retained Earnings 6% Series C Preferred Stock | Retained Earnings 8.25% Series D Preferred Stock | Retained Earnings Impact from adoption of ASU | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at beginning of the period (ASU 2016-13) at Dec. 31, 2021 | $ (3,648) | ||||||||||||
Balance at beginning of the period (ASU 2016-02) at Dec. 31, 2021 | $ (110) | ||||||||||||
Balance at beginning of the period at Dec. 31, 2021 | $ 137,565 | $ 50,221 | $ 120,844 | $ 191,084 | $ 657,149 | $ (1,454) | |||||||
Balance at beginning of the period (in shares) at Dec. 31, 2021 | 43,180,079 | 2,081,800 | 125,000 | 196,181 | |||||||||
Consolidated Statements of Shareholders' Equity | |||||||||||||
Net income | 50,142 | $ 50,142 | |||||||||||
Dividends on 7% preferred stock, annually | $ (910) | ||||||||||||
Dividends on 6% preferred stock, annually | $ (1,875) | $ (2,943) | |||||||||||
Dividends on common stock, annually | (3,029) | ||||||||||||
Other comprehensive loss | (4,850) | (4,850) | |||||||||||
Cash paid in lieu of fractional shares for stock split | $ (1) | ||||||||||||
Cash paid in lieu of fractional shares for stock split (in shares) | (29) | ||||||||||||
Distribution to employee stock ownership plan | $ 653 | ||||||||||||
Distribution to employee stock ownership plan (in shares) | 20,709 | ||||||||||||
Shares issued for stock compensation plans, net of taxes withheld to satisfy tax obligations | $ (335) | ||||||||||||
Shares issued for stock compensation plans, net of taxes withheld to satisfy tax obligations (in shares) | 67,017 | ||||||||||||
Balance at end of the period at Mar. 31, 2022 | $ 137,882 | $ 50,221 | $ 120,844 | $ 191,084 | 694,776 | (6,304) | 1,188,503 | ||||||
Balance at end of the period (in shares) at Mar. 31, 2022 | 43,267,776 | 2,081,800 | 125,000 | 196,181 | |||||||||
Balance at beginning of the period at Dec. 31, 2022 | $ 137,781 | $ 50,221 | $ 120,844 | $ 191,084 | 832,871 | (10,521) | 1,459,739 | ||||||
Balance at beginning of the period (in shares) at Dec. 31, 2022 | 43,113,127 | 2,081,800 | 125,000 | 196,181 | |||||||||
Consolidated Statements of Shareholders' Equity | |||||||||||||
Net income | 54,955 | 54,955 | |||||||||||
Dividends on 7% preferred stock, annually | $ (910) | ||||||||||||
Dividends on 6% preferred stock, annually | $ (1,875) | $ (2,943) | |||||||||||
Dividends 8.25 Percent Series D Preferred Stock | $ (2,939) | ||||||||||||
Dividends on common stock, annually | (3,459) | ||||||||||||
Other comprehensive loss | 2,792 | 2,792 | |||||||||||
Distribution to employee stock ownership plan | $ 810 | ||||||||||||
Distribution to employee stock ownership plan (in shares) | 33,293 | ||||||||||||
Shares issued for stock compensation plans, net of taxes withheld to satisfy tax obligations | $ (486) | ||||||||||||
Shares issued for stock compensation plans, net of taxes withheld to satisfy tax obligations (in shares) | 87,198 | ||||||||||||
Balance at end of the period at Mar. 31, 2023 | $ 138,105 | $ 50,221 | $ 120,844 | $ 191,084 | $ 137,459 | $ 875,700 | $ (7,729) | $ 1,505,684 | |||||
Balance at end of the period (in shares) at Mar. 31, 2023 | 43,233,618 | 2,081,800 | 125,000 | 196,181 | 142,500 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Dividends on common stock per share | $ 0.32 | $ 0.28 | |
7% Series A Preferred Stock | |||
Preferred stock, dividend rate (as a percent) | 7% | 7% | |
7% Series A Preferred Stock | Preferred stock | |||
Preferred stock, dividend rate (as a percent) | 7% | 7% | |
Dividends on preferred stock per share | $ 1.75 | $ 1.75 | |
6% Series B Preferred Stock | |||
Preferred stock, dividend rate (as a percent) | 6% | 6% | |
6% Series B Preferred Stock | Preferred stock | |||
Preferred stock, dividend rate (as a percent) | 6% | 6% | |
Dividends on preferred stock per share | $ 60 | $ 60 | |
6% Series C Preferred Stock | |||
Preferred stock, dividend rate (as a percent) | 6% | 6% | |
6% Series C Preferred Stock | Preferred stock | |||
Preferred stock, dividend rate (as a percent) | 6% | 6% | |
Dividends on preferred stock per share | $ 60 | $ 60 | |
8.25% Series D Preferred Stock | |||
Preferred stock, dividend rate (as a percent) | 8.25% | 8.25% | |
8.25% Series D Preferred Stock | Preferred stock | |||
Preferred stock, dividend rate (as a percent) | 8.25% | 8.25% | |
Dividends on preferred stock per share | $ 82.50 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Operating activities: | |||
Net income | $ 54,955 | $ 50,142 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 686 | 591 | |
Provision for credit losses | 6,867 | 2,451 | |
Gain on sale of loans | (6,733) | (17,965) | |
Proceeds from sales of loans | 3,356,860 | 8,214,273 | |
Loans and participations originated and purchased for sale | (3,674,484) | (7,178,991) | |
Purchases of low-income housing tax credits for sale | (7,932) | (6,651) | |
Proceeds from sale of low-income housing tax credits | 8,670 | ||
Change in servicing rights for paydowns and fair value adjustments | 4,554 | (4,896) | |
Net change in: | |||
Mortgage loans in process of securitization | (42,880) | 244,959 | |
Other assets and receivables | (8,116) | (15,325) | |
Other liabilities | 7,607 | 8,030 | |
Other | (1,587) | (988) | |
Net cash (used in) provided by operating activities | (301,533) | 1,295,630 | |
Investing activities: | |||
Net change in securities purchased under agreements to resell | 26 | 1,090 | |
Purchases of securities available for sale | (353,249) | (20,002) | |
Purchases of securities held to maturity | (1,540) | ||
Proceeds from calls, maturities and paydowns of securities available for sale | 832 | 9,302 | |
Proceeds from calls, maturities and paydowns of securities held to maturity | 15,783 | ||
Purchases of loans | (98,791) | (40,672) | $ (40,700) |
Net change in loans receivable | (678,522) | (187,323) | |
Proceeds from sale of FHLB stock | 784 | ||
Purchases of premises and equipment | (1,041) | (3,939) | |
Purchase of servicing rights | (2,057) | ||
Purchase of limited partnership interests | (4,580) | (6,577) | |
Other investing activities | 906 | 2,245 | |
Net cash used in investing activities | (1,120,176) | (247,149) | |
Financing activities: | |||
Net change in deposits | 1,273,886 | (1,506,792) | |
Proceeds from borrowings | 22,335,000 | 626,000 | |
Repayment of borrowings | (22,185,180) | (780,025) | |
Proceeds from credit linked notes | 153,546 | ||
Dividends | (12,126) | (8,757) | |
Other financing activities | 5 | ||
Net cash provided by (used in) financing activities | 1,565,131 | (1,669,574) | |
Net Change in Cash and Cash Equivalents | 143,422 | (621,093) | |
Cash and Cash Equivalents, Beginning of Period | 226,164 | 1,032,614 | 1,032,614 |
Cash and Cash Equivalents, End of Period | 369,586 | 411,521 | $ 226,164 |
Supplemental Cash Flows Information: | |||
Interest paid | 101,381 | 10,228 | |
Income taxes paid, net of refunds | 966 | $ (497) | |
Transfer of loans from loans receivable to loans held for sale | $ 377,460 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Basis of Presentation | |
Basis of Presentation | Note 1: Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Merchants Bancorp, a registered bank holding company (the “Company”) and its wholly owned subsidiaries, Merchants Bank of Indiana (“Merchants Bank”), Farmers-Merchants Bank of Illinois (“FMBI”) and Merchants Asset Management, LLC (“MAM”). Merchants Bank’s primary operating subsidiaries include Merchants Capital Corp. (“MCC”), Merchants Capital Servicing, LLC (“MCS”) and Merchants Capital Investments, LLC (“MCI”). All direct and indirectly owned subsidiaries owned by Merchants Bancorp are collectively referred to as the “Company”. The accompanying unaudited condensed consolidated balance sheet of the Company as of December 31, 2022, which has been derived from audited financial statements, and unaudited condensed consolidated financial statements of the Company as of March 31, 2023 and for the three months ended March 31, 2023 and 2022, were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company as of and for the year ended December 31, 2022 in its Annual Report on Form 10-K. Reference is made to the accounting policies of the Company described in the Notes to the Financial Statements contained in the Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of the unaudited financial statements have been included to present fairly the financial position as of March 31, 2023 Principles of Consolidation The unaudited condensed consolidated financial statements as of and for the period ended March 31, 2023 and 2022 include results from the Company, and its wholly owned subsidiaries, Merchants Bank, FMBI and MAM. Also included are Merchants Bank’s primary operating subsidiaries, MCC, MCS and MCI, as well as all direct and indirectly owned subsidiaries owned by Merchants Bancorp. In addition, when the Company makes an equity investment in or has a relationship with an entity for which it holds a variable interest, it is evaluated for consolidation requirements under Accounting Standards Update of Topic 810. Accordingly, the entity is assessed for potential consolidation under the variable interest entity (“VIE”) model and would only consolidate those entities for which it is a primary beneficiary. A primary beneficiary is defined as the party that has both the power to direct the activities that most significantly impact the entity, and an interest that could be significant to the entity. To determine if an interest could be significant to the entity, both qualitative and quantitative factors regarding the nature, size and form of the Company’s involvement with the entity are evaluated. Alternatively, under the voting interest model, it would only consolidate those entities for which it has a controlling interest. Because the variable interest investments held by the Company as of March 31, 2023 are not deemed to be primary beneficiaries or controlling interests, the entities are not consolidated and the equity method or proportional method of accounting has been applied. The Company will analyze whether its entities are the primary beneficiary on an ongoing basis. Changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment. See Note 5: Variable Interest Entities (VIEs) All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses on loans, servicing rights and fair values of financial instruments. Significant Accounting Policies The significant accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. On January 1, 2022, the Company adopted FASB Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL"). The Company revised certain accounting policies and implemented certain accounting policy elections, related to the adoption of CECL, which are described below. All adjustments, which are of a normal recurring nature and are, in the opinion of management, necessary for a fair statement of the results for the periods reported, have been included in the accompanying Condensed Consolidated Financial Statements. CECL replaces the previous "allowance for loan and lease losses" model for measuring credit losses, which encompassed allowances for current known and inherent losses within the portfolio, with an "expected loss" model for measuring credit losses, which encompasses allowances for losses expected to be incurred over the life of the included assets. The new CECL model requires the measurement of all expected credit losses for financial assets measured at amortized cost and certain off-balance sheet credit exposures (“OBCEs”) based on historical experiences, current conditions, and reasonable and supportable forecasts. CECL also requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as credit quality and underwriting standards of an organization's portfolio. In addition, CECL includes certain changes to the accounting for investment securities available for sale depending on whether management intends to sell the securities or believes that it is more likely than not they will be required to sell. As of the adoption date on January 1, 2022, the Company recorded a $3.6 million decrease, net of taxes, to retained earnings for the cumulative effect of adopting CECL. The transition adjustment included a $0.3 million increase to retained earnings related to allowance for credit losses on loans (“ACL-Loans”) and a $5.2 million decrease to retained earnings related to allowance for OBCEs (“ACL-OBCEs”). The following table summarizes the impact of the adoption of CECL on the Company’s balance sheet as of January 1, 2022. ACL-Loans Note 4: Loans and Allowance for credit losses on loans ACL-OBCEs life of the commitment. The likelihood and expected amount of funding are based on historical utilization rates. The amount of the allowance represents management’s best estimate of expected credit losses on commitments expected to be funded over the contractual life of the commitment. The ACL–OBCEs is adjusted through the income statement as a component of provision for credit loss. Restricted Cash Included in cash equivalents is an account restricted as collateral for the potential risk of loss on $158.1 million of senior credit linked notes issued by the Company in March 2023. As of March 31, 2023, there was $20.5 million in restricted cash. Also see Note 11: Borrowings. Reclassifications Certain reclassifications may have been made to the 2022 financial statements to conform to the financial statement presentation as of and for the three months ended March 31, 2023. These reclassifications had no effect on net income. |
Investment Securities
Investment Securities | 3 Months Ended |
Mar. 31, 2023 | |
Investment Securities | |
Investment Securities | Note 2: Investment Securities The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities available for sale and held to maturity were as follows: March 31, 2023 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities available for sale: Treasury notes $ 175,766 $ 52 $ 719 $ 175,099 Federal agencies 299,990 — 9,659 290,331 Mortgage-backed - Government-sponsored entity (GSE) 214,086 6 4 214,088 Total securities available for sale $ 689,842 $ 58 $ 10,382 $ 679,518 Securities held to maturity: Mortgage-backed - Non-GSE multi-family $ 867,072 $ — $ 285 $ 866,787 Mortgage-backed - Non-GSE residential 236,225 2,088 — 238,313 Mortgage-backed - Government - sponsored entity (GSE) 1,538 — 56 1,482 Total securities held to maturity $ 1,104,835 $ 2,088 $ 341 $ 1,106,582 December 31, 2022 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities available for sale: Treasury notes $ 37,234 $ 1 $ 955 $ 36,280 Federal agencies 284,986 — 13,096 271,890 Mortgage-backed - Government-sponsored entity (GSE) 15,167 7 7 15,167 Total securities available for sale $ 337,387 $ 8 $ 14,058 $ 323,337 Securities held to maturity: Mortgage-backed - Non-GSE multi-family $ 871,772 $ 12 $ — $ 871,784 Mortgage-backed - Non-GSE residential 247,306 — 124 247,182 Total securities held to maturity $ 1,119,078 $ 12 $ 124 $ 1,118,966 At March 31, 2023 and December 31, 2022, GSE mortgage-backed securities included in the tables above are primarily backed by multi-family loans. The tables above for March 31, 2023 and December 31, 2022 primarily include securities held to maturity that were purchased following the September 2022 loan sale and securitization transactions. Accrued interest on securities available for sale totaled $1.5 million at March 31, 2023 and $0.5 million at December 31, 2022, respectively, and is excluded from the estimate of credit losses. Accrued interest on securities held to maturity totaled $4.4 million at March 31, 2023 and $4.3 million at December 31, 2022, respectively, and is excluded from the estimate of credit losses. The amortized cost and fair value of available for sale securities at March 31, 2023 and December 31, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. March 31, 2023 December 31, 2022 Amortized Fair Amortized Fair Cost Value Cost Value Securities available for sale: (In thousands) Within one year $ 341,569 $ 336,159 $ 118,984 $ 115,386 After one through five years 134,187 129,271 203,236 192,784 475,756 465,430 322,220 308,170 Mortgage-backed - Government-sponsored entity (GSE) 214,086 214,088 15,167 15,167 $ 689,842 $ 679,518 $ 337,387 $ 323,337 Securities held to maturity: Mortgage-backed - Non-GSE multi-family $ 867,072 $ 866,787 $ 871,772 $ 871,784 Mortgage-backed - Non-GSE residential 236,225 238,313 — — Mortgage-backed - Government - sponsored entity (GSE) 1,538 1,482 247,306 247,182 $ 1,104,835 $ 1,106,582 $ 1,119,078 $ 1,118,966 During the three months ended March 31, 2023 and 2022, no securities available for sale were sold. The following tables show the Company’s gross unrealized losses and fair value of the Company’s investment securities with unrealized losses for which an ACL has not been recorded, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2023 and December 31, 2022: March 31, 2023 12 Months or Less than 12 Months Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) Securities available for sale: Treasury notes $ 29,757 $ 588 $ 5,862 $ 131 $ 35,619 $ 719 Federal agencies 14,947 53 275,385 9,606 290,332 9,659 Mortgage-backed - Government-sponsored entity (GSE) 74 2 200 2 274 4 $ 44,778 $ 643 $ 281,447 $ 9,739 $ 326,225 $ 10,382 Securities held to maturity: Mortgage-backed - Non-GSE multi-family $ 866,787 $ 285 $ — $ — $ 866,787 $ 285 Mortgage-backed - Government - sponsored entity (GSE) 1,482 56 — — 1,482 56 $ 868,269 $ 341 $ — $ — $ 868,269 $ 341 December 31, 2022 12 Months or Less than 12 Months Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) Securities available for sale: Treasury notes $ 29,560 $ 762 $ 5,798 $ 193 $ 35,358 $ 955 Federal agencies 19,276 724 252,613 12,372 271,889 13,096 Mortgage-backed - Government-sponsored entity (GSE) 709 7 — — 709 7 $ 49,545 $ 1,493 $ 258,411 $ 12,565 $ 307,956 $ 14,058 Securities held to maturity: Mortgage-backed - Non-GSE residential 247,182 124 — — 247,182 124 $ 247,182 $ 124 $ — $ — $ 247,182 $ 124 Allowance for Credit Losses For securities available for sale with an unrealized loss position, the Company evaluates the securities to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or non-credit related factors. Any impairment that is not credit-related is recognized in AOCI, net of tax. Credit-related impairment is recognized as an ACL for securities available for sale on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings. Accrued interest receivable is excluded from the estimate of credit losses. Both the ACL and the adjustment to net income may be reversed if conditions change. However, if the Company expects, or is required, to sell an impaired available for sale security before recovering its amortized cost basis, the entire impairment amount would be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis. Because the security’s amortized cost basis is adjusted to fair value, there is no ACL in this situation. In evaluating securities available for sale in unrealized loss positions for impairment and the criteria regarding its intent or requirement to sell such securities, the Company considers the extent to which fair value is less than amortized cost, whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuers’ financial condition, among other factors. Unrealized losses on the Company’s investment securities portfolio have not been recognized as an expense because the securities are of high credit quality, and the decline in fair values is attributable to changes in the prevailing interest rate environment since the purchase date. Fair value is expected to recover as securities reach maturity and/or the interest rate environment returns to conditions similar to when these securities were purchased. There were no credit related factors underlying unrealized losses on available for sale debt securities at March 31, 2023 and December 31, 2022. Securities held to maturity are comprised of non-GSE mortgage-backed securities secured by multi-family or single-family properties, and GSE mortgage-backed securities secured by multi-family properties. The GSE security is a Government National Mortgage Association (“Ginnie Mae”) mortgage-backed security and backed by the full faith and credit of the U.S. government. Accordingly, no allowance for credit losses has been recorded for this security. The non-GSE securities were purchased under securitization arrangements where a credit loss component was purchased by third party investors. These securities were evaluated for credit losses over and above the credit loss percentage sold under the arrangements, and the Company does not anticipate any such losses. Additional qualitative factors are evaluated, including the timeliness of principal and interest payments under the contractual terms of the securities. Accordingly, no allowance for credit losses has been recorded for the non-GSE securities |
Mortgage Loans in Process of Se
Mortgage Loans in Process of Securitization | 3 Months Ended |
Mar. 31, 2023 | |
Mortgage Loans in Process of Securitization. | |
Mortgage Loans in Process of Securitization | Note 3: Mortgage Loans in Process of Securitization Mortgage loans in process of securitization are recorded at fair value with changes in fair value recorded in earnings. These include multi-family rental real estate loan originations to be sold as Ginnie Mae mortgage-backed securities and Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”) participation certificates, all of which are pending settlements with firm investor commitments to purchase the securities, typically occurring within 30 days. The fair value increases recorded in earnings for mortgage loans in process of securitization totaled |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses on Loans | 3 Months Ended |
Mar. 31, 2023 | |
Loans and Allowance for Credit Losses on Loans | |
Loans and Allowance for Credit Losses on Loans | Note 4: Loans and Allowance for Credit Losses on Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding principal balances adjusted for unearned income, charge-offs, the ACL-Loans, any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans. For loans at amortized cost, interest income is accrued based on the unpaid principal balance. The Company has made a policy election to exclude accrued interest from the amortized cost basis of loans and reports accrued interest separately from the related loan balance in the consolidated balance sheets. Accrued interest on loans totaled $42.6 million and $35.0 million at March 31, 2023 and December 31, 2022, respectively. The Company also elected not to measure an allowance for credit losses for accrued interest receivables. The accrual of interest on loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Past-due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest collected on these loans is applied to the principal balance until the loan can be returned to an accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. For all loan portfolio segments, the Company promptly charges off loans, or portions thereof, when available information confirms that specific loans are uncollectable based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. When cash payments for accrued interest are received on nonaccrual loans in each loan class, the Company records a reduction in principle on the balance of the loan. For loan modifications, interest income is recognized on an accrual basis at the renegotiated rate if the loan is in compliance with the modified terms. The Company offers warehouse loans or credit to fund mortgage loans held for sale from closing until sale to an investor. Under a warehousing arrangement the Company funds a mortgage loan as secured financing. The warehousing arrangement is secured by the underlying mortgages and a combination of deposits, personal guarantees and advance rates. The Company typically holds the collateral until it is sent under a bailee arrangement instructing the investor to send proceeds to the Company. Typical investors are large financial institutions or government agencies. Interest earned from the time of funding to the time of sale is recognized as interest income as accrued. Fees earned agreements are recognized when collected as noninterest income. Loan Portfolio Summary Loans receivable at March 31, 2023 and December 31, 2022 include: March 31, December 31, 2023 2022 (In thousands) Mortgage warehouse lines of credit $ 604,445 $ 464,785 Residential real estate 1,215,252 1,178,401 Multi-family financing 3,566,530 3,135,535 Healthcare financing 1,941,204 1,604,341 Commercial and commercial real estate (1)(2) 1,194,320 978,661 Agricultural production and real estate 89,516 95,651 Consumer and margin loans 15,781 13,498 8,627,048 7,470,872 Less: ACL-Loans 51,838 44,014 Loans Receivable $ 8,575,210 $ 7,426,858 (1) Includes $672.9 million and $497.0 million of revolving lines of credit collateralized primarily by single-family mortgage servicing rights as of March 31, 2023 and December 31, 2022, respectively. (2) Includes only $9.1 million of non-owner occupied commercial real estate as of March 31, 2023 and included only $12.8 million as of December 31, 2022. Risk characteristics applicable to each segment of the loan portfolio are described as follows. Mortgage Warehouse Lines of Credit (MTG WHLOC): Under its warehouse program, the Company provides warehouse financing arrangements to approved mortgage companies for the origination and sale of residential mortgage loans and to a lesser extent multi-family loans. Agency eligible, governmental and jumbo residential mortgage loans that are secured by mortgages placed on existing one-to-four family dwellings may be originated or purchased and placed on each mortgage warehouse line. As a secured repurchase agreement, collateral pledged to the Company secures each individual mortgage until the lender sells the loan in the secondary market. A traditional secured warehouse line of credit typically carries a base interest rate of the Federal Reserve’s Secured Overnight Financing Rate (“SOFR”), or mortgage note rate and a margin. Risk is evident if there is a change in the fair value of mortgage loans originated by mortgage bankers in warehouse, the sale of which is the expected source of repayment of the borrowings under a warehouse line of credit. However, the warehouse customers are required to hedge the change in value of these loans to mitigate the risk. Residential Real Estate Loans (RES RE): Real estate loans are secured by owner-occupied 1- 4 family residences. Repayment of residential real estate loans is primarily dependent on the personal income and credit rating of the borrowers. First-lien HELOC mortgages included in this segment typically carry a base rate of 30-day LIBOR or the One-Year Constant Maturity Treasury (“CMT”), plus a margin. Multi-Family Financing (MF FIN): Healthcare Financing (HC FIN): The healthcare financing portfolio includes customized loan products for independent living, assisted living, memory care and skilled nursing projects. A variety of loan products are available to accommodate rehabilitation, acquisition, and refinancing of healthcare properties. Credit risk in these loans are primarily driven by local demographics and the expertise of the operators of the facilities. Repayment of these loans may include permanent loans, sales of developed property or an interim loan commitment from the Company until permanent agency-eligible financing is obtained, as well as successful operation of a business or property and the borrower’s cash flows. Loans included in this segment typically carry a base rate of SOFR that adjusts on a monthly basis and a margin. Commercial Lending and Commercial Real Estate Loans (CML & CRE): The commercial lending and commercial real estate portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions, as well as loans to commercial customers to finance land and improvements. It also includes loans collateralized by servicing rights and loan sale proceeds of mortgage warehouse customers. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations. Small Business Administration (“SBA”) loans are included in this category. Less than Agricultural Production and Real Estate Loans (AG & AGRE): Agricultural production loans are generally comprised of seasonal operating lines of credit to grain farmers to plant and harvest corn and soybeans and term loans to fund the purchase of equipment. The Company also offers long term financing to purchase agricultural real estate. Specific underwriting standards have been established for agricultural-related loans including the establishment of projections for each operating year based on industry-developed estimates of farm input costs and expected commodity yields and prices. Operating lines are typically written for one year and secured by the crop and other farm assets as considered necessary. The Company is approved to sell agricultural loans in the secondary market through the Federal Agricultural Mortgage Corporation and uses this relationship to manage interest rate risk within the portfolio. Agricultural real estate loans included in this segment are typically structured with a one-year ARM, 3-year ARM or 5-year ARM CMT and a margin. Agriculture production, livestock, and equipment loans are structured with variable rates that are indexed to prime or fixed for terms not exceeding 5 years. Consumer and Margin Loans (CON & MAR): Consumer loans are those loans secured by household assets. Margin loans are those loans secured by marketable securities. The term and maximum amount for these loans are determined by considering the purpose of the loan, the margin (advance percentage against value) in all collateral, the primary source of repayment, and the borrower’s other related cash flow. ACL-Loans The Company adopted CECL on January 1, 2022. CECL replaces the previous “Allowance for Loan and Lease Losses” standard for measuring credit losses. Upon adoption of CECL, the difference in the two measurements was recorded in the ACL-Loans and retained earnings. The ACL-Loans is the Company’s estimate of expected credit losses. Loans receivable is presented net of the allowance to reflect the principal balance expected to be collected over the contractual term of the loans. This life of loan allowance is established through a provision for credit losses charged to net interest income as loans are recorded in the financial statements. The provision for a reporting period also reflects increases or decreases in the allowance related to changes in credit loss expectations. Actual credit losses are charged against the allowance when management believes the uncollectibility of a loan balance, or a portion thereof, is confirmed. Subsequent recoveries, if any, are credited to the allowance. The ACL-Loans is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans considering relevant available information from internal and external sources, including historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. The allowance also incorporates reasonable and supportable forecasts. There have been no changes to the credit quality components used to assess risk during the year ended December 31, 2022. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The level of the ACL is believed to be adequate to absorb innate expected future losses in the loan portfolio as of the measurement date. The ACL-Loans consists of individually evaluated loans and pooled loan components. The Company’s primary portfolio segmentation is by credit risk grade. Loans risk graded substandard and worse are individually evaluated for expected credit losses. For individually evaluated loans that are collateral dependent, an allowance is established when the fair value of the collateral, the loan’s obtainable market price, or the present value of expected future cash flows discounted at the loan’s effective interest rate, is lower than the carrying value of that loan. A loan is considered to be collateral dependent when repayment is expected to be provided substantially through the operation or the sale of the collateral. To calculate the allowance for expected credit losses on loans risk graded pass through special mention, the portfolio is segmented by loans with similar risk characteristics. Loan Portfolio Segment ACL-Loans Methodology Mortgage warehouse lines of credit Remaining Life Method Residential real estate Discounted Cash Flow Multi-family financing Discounted Cash Flow Healthcare financing Discounted Cash Flow Commercial and commercial real estate Discounted Cash Flow Agricultural production and real estate Remaining Life Method Consumer and margin loans Remaining Life Method Loan characteristics used in determining the segmentation include the underlying collateral, type or purpose of the loan, and expected credit loss patterns. The estimation of expected credit losses for each segment is primarily based on historical credit loss experience. Given the Company’s modest historical credit loss experience, peer and industry data was incorporated into the measurement. Expected life of loan credit losses are quantified using discounted cash flows and remaining life methodologies. Model results are supplemented by qualitative adjustments for risk factors relevant in assessing the expected credit losses within the portfolio segments. These adjustments may increase or decrease the estimate of expected credit losses based upon the assessed level of risk for each qualitative factor. The models utilized and the applicable qualitative adjustments require assumptions and management judgment that can be subjective in nature. The above measurement approach is also used to estimate the expected credit losses associated with unfunded loan commitments, which also incorporates expected utilization rates. The following table presents, by loan portfolio segment, the activity in the ACL-Loans for the three months ended March 31, 2023 and 2022: For the Three Months Ended March 31, 2023 MTG WHLOC RES RE MF FIN HC FIN CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) ACL-Loans Balance, beginning of period $ 1,249 $ 7,029 $ 16,781 $ 9,882 $ 8,326 $ 565 $ 182 $ 44,014 Provision for credit losses 415 349 3,070 1,871 2,149 (22) (15) 7,817 Loans charged to the allowance — — — — — — — — Recoveries of loans previously charged off — — — — 7 — — 7 Balance, end of period $ 1,664 $ 7,378 $ 19,851 $ 11,753 $ 10,482 $ 543 $ 167 $ 51,838 For the Three Months Ended March 31, 2022 MTG WHLOC RES RE MF FIN HC FIN CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) ACL-Loans Balance, beginning of period $ 1,955 $ 4,170 $ 14,084 $ 4,461 $ 5,879 $ 657 $ 138 $ 31,344 Impact of adopting CECL 41 275 520 139 (1,277) (18) 21 (299) Provision for credit losses (55) 102 527 1,018 431 (42) — 1,981 Loans charged to the allowance — — — — (931) — — (931) Recoveries of loans previously charged off — — — — — — 7 7 Balance, end of period $ 1,941 $ 4,547 $ 15,131 $ 5,618 $ 4,102 $ 597 $ 166 $ 32,102 The Company recorded a total provision for credit losses of $6.9 million for the three months ended March 31, 2023. The $6.9 million total provision for credit losses consisted of $7.8 million for the ACL-Loans as shown above and $(0.9) million for the ACL-OBCE’s. The Company recorded a total provision for credit losses of $2.5 million for the three months ended March 31, 2022. The $2.5 million total provision for credit losses consisted of $2.0 million for the ACL-Loans as shown above and $0.5 million for the ACL-OBCE’s. The following table presents the allowance for loan losses and the recorded investment in loans and impairment method as of December 31, 2022: December 31, 2022 MTG WHLOC RES RE MF FIN HC FIN CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) ACL-Loans Balance, beginning of period $ 1,955 $ 4,170 $ 14,084 $ 4,461 $ 5,879 $ 657 $ 138 $ 31,344 Impact of adopting CECL 41 275 520 139 (1,277) (18) 21 (299) Provision for credit losses (747) 2,588 2,177 5,282 4,216 (74) 31 13,473 Loans charged to the allowance — (4) — — (1,238) — (15) (1,257) Recoveries of loans previously charged off — — — — 746 — 7 753 Balance, end of period $ 1,249 $ 7,029 $ 16,781 $ 9,882 $ 8,326 $ 565 $ 182 $ 44,014 The below table presents the amortized cost basis and ACL-Loans allocated for collateral dependent loans, which are individually evaluated to determine expected credit losses: March 31, 2023 Real Estate Accounts Receivable / Equipment Other Total ACL-Loans Allocation (In thousands) RES RE $ 231 $ — $ 9 $ 240 $ 38 MF FIN 36,760 — — 36,760 184 HC FIN 21,783 — — 21,783 132 CML & CRE — 4,986 1,493 6,479 1,381 AG & AGRE 147 — — 147 1 CON & MAR — — 5 5 — Total collateral dependent loans $ 58,921 $ 4,986 $ 1,507 $ 65,414 $ 1,736 There have been no significant changes to the types of collateral securing the Company’s collateral dependent loans compared to March 31, 2022. Internal Risk Categories In adherence with policy, the Company uses the following internal risk grading categories and definitions for loans: Pass Special Mention (Watch) – This is a loan that is sound and collectable but contains potential risk. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard Doubtful The following tables present the credit risk profile of the Company’s loan portfolio based on internal risk rating category as of March 31, 2023 and December 31, 2022: As of March 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans TOTAL (In thousands) MTG WHLOC Pass $ — $ — $ — $ — $ — $ — $ 604,445 $ 604,445 Total $ — $ — $ — $ — $ — $ — $ 604,445 $ 604,445 RES RE Pass 3,207 13,097 8,339 24,856 3,475 12,867 1,148,709 1,214,550 Special Mention (Watch) — — — — 60 402 — 462 Substandard — — — — — 240 — 240 Total $ 3,207 $ 13,097 $ 8,339 $ 24,856 $ 3,535 $ 13,509 $ 1,148,709 $ 1,215,252 MF FIN Pass 382,298 1,221,448 494,235 156,813 32,201 11,347 1,159,249 3,457,591 Special Mention (Watch) — 32,807 16,379 8,000 — — 14,993 72,179 Substandard — 36,760 — — — — — 36,760 Total $ 382,298 $ 1,291,015 $ 510,614 $ 164,813 $ 32,201 $ 11,347 $ 1,174,242 $ 3,566,530 HC FIN Pass 93,837 1,176,484 265,032 79,805 13,682 — 207,521 1,836,361 Special Mention (Watch) 22,709 22,437 29,014 — — — 8,900 83,060 Substandard — — 21,783 — — — — 21,783 Total $ 116,546 $ 1,198,921 $ 315,829 $ 79,805 $ 13,682 $ — $ 216,421 $ 1,941,204 CML & CRE Pass 23,150 130,905 85,065 22,411 22,109 19,553 881,494 1,184,687 Special Mention (Watch) 17 41 473 1,103 116 323 1,081 3,154 Substandard — 496 2,057 586 70 632 2,638 6,479 Total $ 23,167 $ 131,442 $ 87,595 $ 24,100 $ 22,295 $ 20,508 $ 885,213 $ 1,194,320 AG & AGRE Pass 4,439 11,116 7,163 15,049 5,675 20,352 24,124 87,918 Special Mention (Watch) — 14 54 462 344 551 26 1,451 Substandard — — — — — 147 — 147 Total $ 4,439 $ 11,130 $ 7,217 $ 15,511 $ 6,019 $ 21,050 $ 24,150 $ 89,516 CON & MAR Pass 137 4,570 403 220 62 4,502 5,861 15,755 Special Mention (Watch) — — — 19 — 2 — 21 Substandard — — — — — 5 — 5 Total $ 137 $ 4,570 $ 403 $ 239 $ 62 $ 4,509 $ 5,861 $ 15,781 Total Pass $ 507,068 $ 2,557,620 $ 860,237 $ 299,154 $ 77,204 $ 68,621 $ 4,031,403 $ 8,401,307 Total Special Mention (Watch) $ 22,726 $ 55,299 $ 45,920 $ 9,584 $ 520 $ 1,278 $ 25,000 $ 160,327 Total Substandard $ — $ 37,256 $ 23,840 $ 586 $ 70 $ 1,024 $ 2,638 $ 65,414 Total Loans $ 529,794 $ 2,650,175 $ 929,997 $ 309,324 $ 77,794 $ 70,923 $ 4,059,041 $ 8,627,048 Total Charge offs $ — $ — $ — $ — $ — $ — $ — $ — December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Loans TOTAL (In thousands) MTG WHLOC Pass $ — $ — $ — $ — $ — $ — $ 464,785 $ 464,785 Total $ — $ — $ — $ — $ — $ — $ 464,785 $ 464,785 RES RE Pass 13,344 8,192 24,708 3,498 1,722 11,166 1,114,705 1,177,335 Special Mention (Watch) — — — 61 — 668 91 820 Substandard — — — — 74 172 — 246 Total $ 13,344 $ 8,192 $ 24,708 $ 3,559 $ 1,796 $ 12,006 $ 1,114,796 $ 1,178,401 MF FIN Pass 1,212,008 544,823 200,829 32,349 4,416 7,229 1,042,024 3,043,678 Special Mention (Watch) 32,919 — 8,000 — — — 14,178 55,097 Substandard 36,760 — — — — — — 36,760 Total $ 1,281,687 $ 544,823 $ 208,829 $ 32,349 $ 4,416 $ 7,229 $ 1,056,202 $ 3,135,535 HC FIN Pass 987,676 301,103 78,792 13,770 — — 123,888 1,505,229 Special Mention (Watch) 52,022 25,307 — — — — — 77,329 Substandard — 21,783 — — — — — 21,783 Total $ 1,039,698 $ 348,193 $ 78,792 $ 13,770 $ — $ — $ 123,888 $ 1,604,341 CML & CRE Pass 123,757 86,282 23,803 24,730 12,335 8,765 690,114 969,786 Special Mention (Watch) 43 164 963 119 99 228 1,376 2,992 Substandard — 2,017 591 72 — 666 2,537 5,883 Total $ 123,800 $ 88,463 $ 25,357 $ 24,921 $ 12,434 $ 9,659 $ 694,027 $ 978,661 AG & AGRE Pass 12,112 7,485 15,660 5,808 3,137 20,176 29,566 93,944 Special Mention (Watch) 14 55 462 421 163 389 56 1,560 Substandard — — — — — 147 — 147 Total $ 12,126 $ 7,540 $ 16,122 $ 6,229 $ 3,300 $ 20,712 $ 29,622 $ 95,651 CON & MAR Pass 4,673 463 307 101 4,589 9 3,328 13,470 Special Mention (Watch) — — 20 — — 2 — 22 Substandard — — — — — 6 — 6 Total $ 4,673 $ 463 $ 327 $ 101 $ 4,589 $ 17 $ 3,328 $ 13,498 Total Pass $ 2,353,570 $ 948,348 $ 344,099 $ 80,256 $ 26,199 $ 47,345 $ 3,468,410 $ 7,268,227 Total Special Mention (Watch) $ 84,998 $ 25,526 $ 9,445 $ 601 $ 262 $ 1,287 $ 15,701 $ 137,820 Total Substandard $ 36,760 $ 23,800 $ 591 $ 72 $ 74 $ 991 $ 2,537 $ 64,825 Total Loans $ 2,475,328 $ 997,674 $ 354,135 $ 80,929 $ 26,535 $ 49,623 $ 3,486,648 $ 7,470,872 The Company did not have any material revolving loans converted to term loans at March 31, 2023 or December 31, 2022. The Company evaluates the loan risk grading system definitions and ACL-Loans methodology on an ongoing basis. No significant changes were made to either during the past year. Delinquent Loans The following tables present the Company’s loan portfolio aging analysis of the recorded investment in loans as of March 31, 2023 and December 31, 2022. March 31, 2023 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHLOC $ — $ — $ — $ — $ 604,445 $ 604,445 RES RE 2,573 2,409 918 5,900 1,209,352 1,215,252 MF FIN — 12,975 36,760 49,735 3,516,795 3,566,530 HC FIN — — 21,783 21,783 1,919,421 1,941,204 CML & CRE 209 495 3,778 4,482 1,189,838 1,194,320 AG & AGRE 236 43 1,242 1,521 87,995 89,516 CON & MAR 47 1 22 70 15,711 15,781 $ 3,065 $ 15,923 $ 64,503 $ 83,491 $ 8,543,557 $ 8,627,048 December 31, 2022 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHLOC $ — $ — $ — $ — $ 464,785 $ 464,785 RES RE 4,053 152 272 4,477 1,173,924 1,178,401 MF FIN — — — — 3,135,535 3,135,535 HC FIN — — 21,783 21,783 1,582,558 1,604,341 CML & CRE 4,759 — 3,778 8,537 970,124 978,661 AG & AGRE 4,903 — — 4,903 90,748 95,651 CON & MAR 6 24 22 52 13,446 13,498 $ 13,721 $ 176 $ 25,855 $ 39,752 $ 7,431,120 $ 7,470,872 Nonperforming Loans Nonaccrual loans, including modified loans that have not met the six-month minimum performance criterion, are reported as nonperforming loans. For all loan classes, it is the Company’s policy to have any restructured loans which are on nonaccrual status prior to being restructured remain on nonaccrual status until three months of satisfactory borrower performance, at which time management would consider its return to accrual status. A loan is generally classified as nonaccrual when the Company believes that receipt of principal and interest is doubtful under the terms of the loan agreement. Generally, this is at 90 or more days past due. The amount of interest income recognized on nonaccrual financial assets during the year ended March 31, 2023 was immaterial. The following table presents the Company’s nonaccrual loans and loans past due 90 days or more and still accruing at March 31, 2023 and December 31, 2022. March 31, December 31, 2023 2022 Total Loans > Total Loans > 90 Days & 90 Days & Nonaccrual Accruing Nonaccrual Accruing (In thousands) RES RE $ 240 $ 741 $ 245 $ 96 MF FIN 36,760 — — — HC FIN 21,783 — 21,783 — CML & CRE 4,357 — 4,390 — AG & AGRE 147 1,242 147 — CON & MAR 5 17 6 16 $ 63,292 $ 2,000 $ 26,571 $ 112 The Company did not have any nonperforming loans without an estimated ACL at March 31, 2023. On January 1, 2023, the Company adopted FASB Accounting Standards Update (ASU) No. 2022-02, Financial Instruments – Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures. The Company adopted the prospective approach for this new guidance. During the three months ended March 31, 2023, there was one customer experiencing financial difficulty that was modified from the original contractual terms to a delayed payment schedule. The following table presents the Company’s modified loans during the three months ended March 31, 2023. For the Three Months Ended March 31, 2023 Principal Forgiveness Payment Delay Term Extension Interest Rate Reduction Combination Term Extension and Principal Forgiveness Combination Term Extension Interest Rate Reduction Total Class of Financing Receivable (In thousands) Commercial and commercial real estate $ — $ 4,357 $ — $ — $ — $ — — % Total $ — $ 4,357 $ — $ — $ — $ — — % residential loans in the process of foreclosure as of March 31, 2023 and December 31, 2022. Loans Purchased The Company purchased $98.8 million and $40.7 million of loans during the three months ended March 31, 2023 and 2022, respectively. |
Variable Interest Entities (VIE
Variable Interest Entities (VIEs) | 3 Months Ended |
Mar. 31, 2023 | |
Variable Interest Entities (VIEs). | |
Variable Interest Entities (VIEs) | Note 5: Variable Interest Entities (VIEs) A VIE is a corporation, partnership, limited liability company, or any other legal structure used to conduct activities or hold assets generally that either: • Does not have equity investors with voting rights that can directly or indirectly make decisions about the entity’s activities through those voting rights or similar rights; or • Has equity investors that do not provide sufficient equity for the entity to finance its activities without additional subordinated financial support. The Company has invested in single-family, multi-family, and healthcare debt financing entities, as well as low-income housing syndicated funds that are deemed to be VIEs. The Company has also deemed as a VIE, a real estate mortgage investment conduit (“REMIC”) trust that was established in conjunction with the September 2022 multi-family loan sale and securitization transaction. Accordingly, the entities were assessed for potential consolidation under the VIE model that requires primary beneficiaries to consolidate the entity’s results. A primary beneficiary is defined as the party that has both the power to direct the activities that most significantly impact the entity, and an interest that could be significant to the entity. To determine if an interest could be significant to the entity, both qualitative and quantitative factors regarding the nature, size and form of involvement with the entity are evaluated. At March 31, 2023 the Company determined it was not the primary beneficiary of its VIEs primarily because the Company did not have the obligation to absorb losses or the rights to receive benefits from the VIE that could potentially be significant to the VIE. Evaluation and assessment of VIEs for consolidation is performed on an ongoing basis by management. Any changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment. The Company’s maximum exposure to loss associated with its VIEs consists of the capital invested plus any unfunded equity commitments. These investments are recorded in other assets and other liabilities on the consolidated balance sheets. The table below reflects the size of the VIEs as well as the maximum exposure to loss in connection with these investments at March 31, 2023 and December 31, 2022. Total Total Maximum Assets ($ in thousands) Assets Liabilities Exposure to Loss (In thousands) March 31, 2023 Unconsolidated VIEs $ 60,466 $ 25,207 $ 60,466 December 31, 2022 Unconsolidated VIEs $ 52,125 $ 25,564 $ 52,125 |
Regulatory Matters
Regulatory Matters | 3 Months Ended |
Mar. 31, 2023 | |
Regulatory Matters | |
Regulatory Matters | Note 6: Regulatory Matters The Company, Merchants Bank, and FMBI are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by federal and state banking regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company, Merchants Bank, and FMBI must meet specific capital guidelines that involve quantitative measures of the Company’s, Merchants Bank’s, and FMBI’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s, Merchants Bank’s, and FMBI’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, and other factors. Furthermore, the Company’s, Merchants Bank’s, and FMBI’s regulators could require adjustments to regulatory capital not reflected in these financial statements. Quantitative measures established by regulation to ensure capital adequacy require the Company, Merchants Bank, and FMBI to maintain minimum amounts and ratios (set forth in the table below). Management believes, as of March 31, 2023 and December 31, 2022, that the Company, Merchants Bank, and FMBI met all capital adequacy requirements to which they were subject. As of March 31, 2023 and December 31, 2022, the most recent notifications from the Federal Reserve categorized the Company as well capitalized and most recent notifications from the FDIC categorized Merchants Bank and FMBI as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Company’s, Merchants Bank’s, or FMBI’s category. The Company’s, Merchants Bank’s, and FMBI’s actual capital amounts and ratios are presented in the following tables. Minimum Minimum Amount Required Amount To Be for Adequately Well Actual Capitalized (1) Capitalized (1) Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) March 31, 2023 Total capital (1) Company $ 1,558,187 12.4 % $ 1,006,425 8.0 % $ — N/A % Merchants Bank 1,488,469 12.1 % 986,980 8.0 % 1,233,725 10.0 FMBI 36,044 11.4 % 25,309 8.0 % 31,636 10.0 % Tier I capital (1) Company 1,495,800 11.9 % 754,818 6.0 % — N/A % Merchants Bank 1,426,815 11.6 % 740,235 6.0 % 986,980 8.0 FMBI 35,311 11.2 % 18,981 6.0 % 25,309 8.0 % Common Equity Tier I capital (1) Company 996,192 7.9 % 566,114 4.5 % — N/A % Merchants Bank 1,426,815 11.6 % 555,176 4.5 % 801,921 6.5 FMBI 35,311 11.2 % 14,236 4.5 % 20,563 6.5 % Tier I capital (1) Company 1,495,800 11.6 % 514,725 4.0 % — N/A % Merchants Bank 1,426,815 11.3 % 503,987 4.0 % 629,983 5.0 FMBI 35,311 10.6 % 13,347 4.0 % 16,684 5.0 % (1) As defined by regulatory agencies. Minimum Minimum Amount Required Amount To Be for Adequately Well Actual Capitalized (1) Capitalized (1) Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2022 Total capital (1) Company $ 1,507,968 12.2 % $ 992,883 8.0 % $ — N/A % Merchants Bank 1,427,738 11.7 % 975,853 8.0 % 1,219,817 10.0 % FMBI 34,769 11.3 % 24,703 8.0 % 30,878 10.0 % Tier I capital (1) Company 1,452,456 11.7 % 744,662 6.0 % — N/A % Merchants Bank 1,372,941 11.3 % 731,890 6.0 % 975,853 8.0 % FMBI 34,054 11.0 % 18,527 6.0 % 24,703 8.0 % Common Equity Tier I capital (1) Company 952,848 7.7 % 558,497 4.5 % — N/A % Merchants Bank 1,372,941 11.3 % 548,917 4.5 % 792,881 6.5 % FMBI 34,054 11.0 % 13,895 4.5 % 20,071 6.5 % Tier I capital (1) Company 1,452,456 11.7 % 497,604 4.0 % — N/A % Merchants Bank 1,372,941 11.3 % 487,511 4.0 % 609,389 5.0 % FMBI 34,054 10.7 % 12,702 4.0 % 15,878 5.0 % (1) As defined by regulatory agencies. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | Note 7: Derivative Financial Instruments The Company uses derivative financial instruments to help manage exposure to interest rate risk and the effects that changes in interest rates may have on net income and the fair value of assets and liabilities. Forward Sales Commitments, Interest Rate Lock Commitments, and Interest Rate Swaps The Company enters into forward contracts for the future delivery of mortgage loans to third party investors and enters into interest rate lock commitments with potential borrowers to fund specific mortgage loans that will be sold into the secondary market. The forward contracts are entered into in order to economically hedge the effect of changes in interest rates resulting from the Company’s commitment to fund the loans. Interest rate swaps are also used by the Company to reduce the risk that significant increases in interest rates may have on the value of certain fixed rate loans held for sale and the respective loan payments received from borrowers. All changes in the fair market value of these interest rate swaps and associated loans held for sale have been included in gain on sale of loans. Any difference between the fixed and floating interest rate components of these transactions have been included in interest income. All of these items are considered derivatives, but are not designated as accounting hedges, and are recorded at fair value with changes in fair value reflected in noninterest income on the condensed consolidated statements of income. The fair value of derivative instruments with a positive fair value are reported in other assets in the condensed consolidated balance sheets while derivative instruments with a negative fair value are reported in other liabilities in the condensed consolidated balance sheets. The following table presents the notional amount and fair value of interest rate locks, forward contracts, and interest rate swaps utilized by the Company at March 31, 2023 and December 31, 2022. This table excludes the fair market value adjustment on loans associated with these derivatives. Notional Fair Value Amount Balance Sheet Location Asset Liability March 31, 2023 (In thousands) (In thousands) Interest rate lock commitments $ 32,018 Other assets/liabilities $ 218 $ 4 Forward contracts $ 29,317 Other assets/liabilities 2 235 Interest rate swaps $ 57,566 Other assets/liabilities 1,694 — $ 1,914 $ 239 Notional Fair Value Amount Balance Sheet Location Asset Liability December 31, 2022 (In thousands) (In thousands) Interest rate lock commitments $ 8,759 Other assets/liabilities $ 28 $ 23 Forward contracts $ 13,096 Other assets/liabilities 46 52 Interest rate swaps $ 57,574 Other assets/liabilities 3,030 — $ 3,104 $ 75 Fair values of these derivative financial instruments were estimated using changes in mortgage interest rates from the date the Company entered into the interest rate lock commitment and the balance sheet date. The following table summarizes the periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income for the three months ended March 31, 2023 and 2022. Three Months Ended March 31, 2023 2022 (In thousands) Derivative gain (loss) included in other income: Interest rate lock commitments $ 209 $ (882) Forward contracts (includes pair-off settlements) (96) 3,150 Net derivative gains (loss) $ 113 $ 2,268 Gain (loss) included in gain on sale of loans: Interest rates swaps - change in fair value (1,336) — Loans held for sale - change in fair value 1,560 — Net gain (loss) $ 224 $ — Derivatives on Behalf of Customers The Company offers derivative contracts to some customers in connection with their risk management needs. These derivatives include back-to-back interest rate swaps. The Company manages the risk associated with these contracts by entering into an equal and offsetting derivative with a third-party dealer. These derivatives generally work together as an economic interest rate hedge, but the Company does not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred, typically resulting in no net earnings impact. The fair values of derivative assets and liabilities related to derivatives for customers with back-to-back interest rate swaps were recorded in the consolidated balance sheets as follows: Notional Fair Value Amount Balance Sheet Location Asset Liability (In thousands) (In thousands) March 31, 2023 $ 77,354 Other assets/liabilities $ 2,461 $ 2,461 December 31, 2022 $ 77,495 Other assets/liabilities $ 3,041 $ 3,041 The gross gains and losses on these derivative assets and liabilities were recorded in other noninterest income and other noninterest expense in the condensed consolidated statements of income as follows: Three Months Ended March 31, 2023 2022 (In thousands) Gross swap gains $ 580 $ 496 Gross swap losses 580 496 Net swap gains (losses) $ — $ — The Company pledged $0 in collateral to secure its obligations under swap contracts at both March 31, 2023 and December 31, 2022. |
Disclosures about Fair Value of
Disclosures about Fair Value of Assets and Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Disclosures about Fair Value of Assets and Liabilities | |
Disclosures about Fair Value of Assets and Liabilities | Note 8: Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 Recurring Measurements The following tables present the fair value measurements of assets and liabilities recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2023 and December 31, 2022: Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Fair Assets Inputs Inputs Assets Value (Level 1) (Level 2) (Level 3) (In thousands) March 31, 2023 Mortgage loans in process of securitization $ 197,074 $ — $ 197,074 $ — Securities available for sale: Treasury notes 175,099 175,099 — — Federal agencies 290,331 — 290,331 — Mortgage-backed - Government-sponsored entity (GSE) 214,088 — 214,088 — Loans held for sale 85,516 — 85,516 — Servicing rights 143,867 — — 143,867 Derivative assets - interest rate lock commitments 218 — — 218 Derivative assets - forward contracts 2 — 2 — Derivative assets - interest rate swaps 1,694 — 1,694 — Derivative assets - interest rate swaps (back-to-back) 2,461 — 2,461 — Derivative liabilities - interest rate lock commitments 4 — — 4 Derivative liabilities - forward contracts 235 — 235 — Derivative liabilities - interest rate swaps (back-to-back) 2,461 — 2,461 — December 31, 2022 Mortgage loans in process of securitization $ 154,194 $ — $ 154,194 $ — Securities available for sale: Treasury notes 36,280 36,280 — — Federal agencies 271,890 — 271,890 — Mortgage-backed - Government-sponsored entity (GSE) 15,167 — 15,167 — Loans held for sale 82,192 — 82,192 — Servicing rights 146,248 — — 146,248 Derivative assets - interest rate lock commitments 28 — — 28 Derivative assets - forward contracts 46 — 46 — Derivative assets - interest rate swaps 3,030 — 3,030 — Derivative assets - interest rate swaps (back-to-back) 3,041 — 3,041 — Derivative liabilities - interest rate lock commitments 23 — — 23 Derivative liabilities - forward contracts 52 — 52 — Derivative liabilities - interest rate swaps (back-to-back) 3,041 — 3,041 — Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the three months ended March 31, 2023 and the year ended December 31, 2022. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Mortgage Loans in Process of Securitization and Securities Available for Sale Where quoted market prices are available in an active market, securities such as U.S. Treasuries are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy including federal agencies, mortgage-backed securities, municipal securities and Federal Housing Administration participation certificates. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Loans Held for Sale Certain loans held for sale at fair value are saleable into the secondary mortgage markets and their fair values are estimated using observable quoted market or contracted prices, or market price equivalents, which would be used by other market participants. These saleable loans are considered Level 2. Servicing Rights Servicing rights do not trade in an active, open market with readily observable prices. Accordingly, fair value is estimated using discounted cash flow models having significant inputs of discount rate, prepayment speed, cost of servicing, interest rates, and default rate. Due to the nature of the valuation inputs, servicing rights are classified within Level 3 of the hierarchy. The Chief Financial Officer’s (“CFO”) office contracts with a pricing specialist to generate fair value estimates on a quarterly basis. The CFO’s office challenges the reasonableness of the assumptions used and reviews the methodology to ensure the estimated fair value complies with accounting standards generally accepted in the United States. Derivative Financial Instruments The Company estimates the fair value of interest rate lock commitments based on the value of the underlying mortgage loan, quoted mortgage-backed security prices, estimates of the fair value of the servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the interest rate lock commitment, net of expenses. With respect to its interest rate lock commitments, management determined that a Level 3 classification was most appropriate based on the various significant unobservable inputs utilized in estimating the fair value of its interest rate lock commitments. The Company estimates the fair value of forward sales commitments based on market quotes of mortgage-backed security prices for securities similar to the ones used, which are considered Level 2. The fair value of interest rate swaps is based on prices that are obtained from a third-party that uses observable market inputs, thereby supporting a Level 2 classification. Changes in fair value of the Company’s derivative financial instruments are recognized through noninterest income and/or noninterest expense on its condensed consolidated statement of income. Level 3 Reconciliation The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying balance sheets using significant unobservable (Level 3) inputs: Three Months Ended March 31, 2023 2022 (In thousands) Servicing rights Balance, beginning of period $ 146,248 $ 110,348 Additions Originated servicing 2,173 5,792 Subtractions Paydowns (1,698) (2,749) Sales of servicing — — Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model (2,856) 7,645 Balance, end of period $ 143,867 $ 121,036 Derivative Assets - interest rate lock commitments Balance, beginning of period $ 28 $ 264 Changes in fair value 190 (152) Balance, end of period $ 218 $ 112 Derivative Liabilities - interest rate lock commitments Balance, beginning of period $ 23 $ 41 Changes in fair value (19) 730 Balance, end of period $ 4 $ 771 Nonrecurring Measurements The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2023 and December 31, 2022. Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Fair Assets Inputs Inputs Assets Value (Level 1) (Level 2) (Level 3) (In thousands) March 31, 2023 Impaired loans (collateral-dependent) $ — $ — $ — $ — December 31, 2022 Impaired loans (collateral-dependent) $ 4,465 $ — $ — $ 4,465 Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheet, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Collateral Dependent Loans, Net of ACL-Loans The estimated fair value of collateral dependent loans is based on the appraised fair value of the collateral, less estimated cost to sell. Collateral dependent loans are classified within Level 3 of the fair value hierarchy. The Company considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral dependent and subsequently as deemed necessary by the Chief Credit Officer’s (“CCO”) office. Appraisals and evaluations are reviewed for accuracy and consistency by the CCO’s office. Appraisers are selected from the list of approved appraisers maintained by management. The appraised values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. These discounts and estimates are developed by the CCO’s office by comparison to historical results. Unobservable (Level 3) Inputs: The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than goodwill. Valuation Weighted Fair Value Technique Unobservable Inputs Range Average (In thousands) At March 31, 2023: Servicing rights - Multi-family $ 109,706 Discounted cash flow Discount rate 8% - 13% 9% Constant prepayment rate 0 - 39% 8% Servicing rights - Single-family $ 29,078 Discounted cash flow Discount rate 9% - 10% 9% Constant prepayment rate 7% - 10% 7% Servicing rights - SBA $ 5,083 Discounted cash flow Discount rate 16% 16% Constant prepayment rate 3% - 12% 8% Derivative assets - interest rate lock commitments $ 218 Discounted cash flow Loan closing rates 51% - 99% 75% Derivative liabilities - interest rate lock commitments $ 4 Discounted cash flow Loan closing rates 51% - 99% 75% At December 31, 2022: Collateral dependent loans $ 4,465 Market comparable properties Marketability discount 4% - 54% 5% Servicing rights - Multi-family $ 111,690 Discounted cash flow Discount rate 8% - 13% 9% Constant prepayment rate 0 - 39% 8% Servicing rights - Single-family $ 29,926 Discounted cash flow Discount rate 9% - 10% 9% Constant prepayment rate 7% - 10% 7% Servicing rights - SBA $ 4,632 Discounted cash flow Discount rate 16% 16% Constant prepayment rate 3% - 12% 8% Derivative assets - interest rate lock commitments $ 28 Discounted cash flow Loan closing rates 60% - 87% 77% Derivative liabilities - interest rate lock commitments $ 23 Discounted cash flow Loan closing rates 60% - 87% 77% Sensitivity of Significant Unobservable Inputs The following is a discussion of the sensitivity of significant unobservable inputs, the interrelationships between those inputs and other unobservable inputs used in recurring fair value measurement, and of how those inputs might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement. Servicing Rights The significant unobservable inputs used in the fair value measurement of the Company’s servicing rights are discount rates and constant prepayment rates. These two inputs can drive a significant amount of a market participant’s valuation of servicing rights. Significant increases (decreases) in the discount rate or assumed constant prepayment rates used to value servicing rights would decrease (increase) the value derived. Fair Value of Financial Instruments The following table presents the carrying amount and estimated fair values of the Company’s financial instruments not carried at fair value and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2023 and December 31, 2022. Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Fair Assets Inputs Inputs Assets Value Value (Level 1) (Level 2) (Level 3) (In thousands) March 31, 2023 Financial assets: Cash and cash equivalents $ 369,586 $ 369,586 $ 369,586 $ — $ — Securities purchased under agreements to resell 3,438 3,438 — 3,438 — Securities held to maturity 1,104,835 1,106,582 — 239,795 866,787 FHLB stock 39,130 39,130 — 39,130 — Loans held for sale 2,769,734 2,769,734 — 2,769,734 — Loans receivable, net 8,575,210 8,553,015 — — 8,553,015 Interest receivable 64,282 64,282 — 64,282 — Financial liabilities: Deposits 11,345,231 11,343,744 7,208,222 4,135,522 — Short-term subordinated debt 21,000 21,000 — 21,000 — FHLB advances 859,211 858,957 — 858,957 — Other borrowing 200,000 200,000 — 200,000 — Credit linked notes 153,551 154,520 — 154,520 — Interest payable 32,605 32,605 — 32,605 — December 31, 2022 Financial assets: Cash and cash equivalents $ 226,164 $ 226,164 $ 226,164 $ — $ — Securities purchased under agreements to resell 3,464 3,464 — 3,464 — Securities held to maturity 1,119,078 1,118,966 — 247,182 871,784 FHLB stock 39,130 39,130 — 39,130 — Loans held for sale 2,828,384 2,828,384 — 2,828,384 — Loans receivable, net 7,426,858 7,431,731 — — 7,431,731 Interest receivable 56,262 56,262 — 56,262 — Financial liabilities: Deposits 10,071,345 10,064,941 7,082,056 2,982,885 — Short-term subordinated debt 21,000 21,000 — 21,000 — FHLB advances 859,392 858,984 — 858,984 — Other borrowing 50,000 50,000 — 50,000 — Interest payable 23,384 23,384 — 23,384 — |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases. | |
Leases | Note 9: Leases The Company has operating leases for various locations with terms ranging from one The Company has operating lease right-of-use assets of $10.5 million as of March 31, 2023 and operating lease right-of-use liabilities of $11.6 million as of March 31, 2023. Balance sheet, income statement and cash flow detail regarding operating leases follows: March 31, 2023 December 31, 2022 Balance Sheet (In thousands) (In thousands) Operating lease right-of-of use asset (in other assets) $ 10,483 $ 10,969 Operating lease liability (in other liabilities) 11,644 11,992 Weighted average remaining lease term (years) 6.3 6.5 Weighted average discount rate 2.68% 2.65% Maturities of lease liabilities: One year or less $ 1,731 $ 2,181 Year two 2,345 2,321 Year three 1,881 1,881 Year four 1,911 1,911 Year five 1,853 1,853 Thereafter 2,902 2,902 Total future minimum lease payments 12,623 13,049 Less: imputed interest 979 1,057 Total $ 11,644 $ 11,992 Three Months Ended Three Months Ended March 31, 2023 March 31, 2022 Income Statement (In thousands) (In thousands) Components of lease expense: Operating lease cost (in occupancy and equipment expense) $ 583 $ 367 Three Months Ended Three Months Ended March 31, 2023 March 31, 2022 Cash Flow Statement (In thousands) (In thousands) Supplemental cash flow information: Operating cash flows from operating leases $ 426 $ 283 |
Deposits
Deposits | 3 Months Ended |
Mar. 31, 2023 | |
Deposits | |
Deposits | Note 10: Deposits Deposits were comprised of the following at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2023 2022 (In thousands) Noninterest-bearing deposits Demand deposits $ 313,733 $ 326,875 Total noninterest-bearing deposits 313,733 326,875 Interest-bearing deposits Demand deposits $ 3,843,282 $ 3,720,363 Savings deposits 3,051,207 3,034,818 Certificates of deposit 4,137,009 2,989,289 Total interest-bearing deposits 11,031,498 9,744,470 Total deposits $ 11,345,231 $ 10,071,345 Maturities for certificates of deposit are as follows: March 31, 2023 (In thousands) Due within one year $ 4,004,937 Due in one year to two years 90,668 Due in two years to three years 39,683 Due in three years to four years 1,114 Due in four years to five years 585 Due in five years to six years 22 $ 4,137,009 Brokered deposit amounts at March 31, 2023 and December 31, 2022, were as follows: March 31, December 31, 2023 2022 (In thousands) Brokered certificates of deposit $ 3,679,084 $ 2,681,198 Brokered savings deposits 51,076 81,532 Brokered deposit on demand accounts — 13 $ 3,730,160 $ 2,762,743 |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2023 | |
Borrowings | |
Borrowings | Note 11: Borrowings Borrowings were comprised of the following at March 31, 2023 and December 31, 2022: March 31, December 31, 2023 2022 (In thousands) Federal Reserve discount window borrowings $ 200,000 $ 20,000 Short-term subordinated debt 21,000 21,000 FHLB advances 859,211 859,392 American Financial Exchange borrowing — 30,000 Credit linked notes 153,551 — Total borrowings $ 1,233,762 $ 930,392 On March 30, 2023, Merchants Bank of Indiana issued and sold $158.1 million senior credit linked notes, due May 26, 2028. The net proceeds of the offering were approximately $153.5 million. The repayment of principal on the notes is linked to an approximately $1.1 billion reference pool of loans originated under the Bank’s healthcare commercial real estate lending program, but the notes are not secured by the loans. The notes provide periodic payments of interest in addition to payment of principal over the life of the note and these values are tied to the performance of the loans. Therefore, the notes effectively transfer credit risk in excess of the first 1% of losses on the reference pool of loans. The reduction in risk weighted assets provides additional balance sheet capacity and benefits capital ratios for additional growth in the existing loan pipeline. The Company will maintain the ACL associated with the loans in the reference pool on the Company’s balance sheet. The notes accrue interest at a rate equal to SOFR plus 15.50% and interest pays monthly. As of March 31, 2023, the effective interest rate was 21.5% . However, the interest earned on the collateral account maintained by the Company for the transaction had an effective rate of The notes are secured by a restricted collateral account which the Company is required to maintain with a third-party financial institution. The collateral account maintains an amount equal to at least the initial aggregate unpaid principal of the notes. As of March 31, 2023, the account included $20.5 million of restricted cash and $137.6 million of short-term Treasury securities. These are reported as cash equivalents and securities available for sale in the consolidated balance sheets. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share | |
Earnings Per Share | Note 12: Earnings Per Share Earnings per share were computed as follows: Three Month Periods Ended March 31, 2023 2022 Weighted- Per Weighted- Per Net Average Share Net Average Share Income Shares Amount Income Shares Amount (In thousands) (In thousands) Net income $ 54,955 $ 50,142 Dividends on preferred stock (8,667) (5,728) Net income allocated to common shareholders $ 46,288 $ 44,414 Basic earnings per share 43,179,604 $ 1.07 43,190,066 $ 1.03 Effect of dilutive securities-restricted stock awards 111,175 169,968 Diluted earnings per share 43,290,779 $ 1.07 43,360,034 $ 1.02 |
Share-Based Payment Plans
Share-Based Payment Plans | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Plans | |
Share-Based Payment Plans | Note 13: Share-Based Payment Plans Equity-based incentive awards for Company officers are currently issued pursuant to the 2017 Equity Incentive Plan (the “2017 Incentive Plan”). During the three months ended March 31, 2023 and March 31, 2022, the Company issued During 2018, the Compensation Committee of the Board of Directors approved a plan for non-executive directors to receive a portion of their annual retainer fees in the form of shares of common stock equal to $10,000, rounded up to the nearest whole share. In January 2021, the Board of Directors amended the plan for nonexecutive directors to receive a portion of their annual fees, issued quarterly, in the form of restricted common stock equal to $50,000 per member, rounded up to the nearest whole share, to be effective after the Company’s annual meeting of shareholders held in May 2021. Accordingly, there were 2,863 and 2,055 shares, issued to non-executive directors during the three months ended March 31, 2023 and March 31, 2022, respectively. The Company established an employee stock ownership plan (“ESOP”) effective as of January 1, 2020 to provide certain benefits for all employees who meet certain requirements. Expense recognized for the contribution to the ESOP totaled $810,000 and $653,000 for the three months ended March 31, 2023 and March 31, 2022, respectively. The Company contributed 33,293 shares and 20,709 shares to the ESOP for the three months ended March 31, 2023 and March 31, 2022, respectively. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Information | |
Segment Information | Note 14: Segment Information The Company’s business segments are defined as Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The reportable business segments are consistent with the internal reporting and evaluation of the principal lines of business of the Company. The Multi-family Mortgage Banking segment originates and services government sponsored mortgages for multi-family and healthcare facilities. It is also a fully integrated syndicator of low-income housing tax credit and debt funds. The Mortgage Warehousing segment funds agency eligible residential loans from the date of origination or purchase, until the date of sale in the secondary market, as well as commercial loans to non-depository financial institutions. The Banking segment provides a wide range of financial products and services to consumers and businesses, including retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and Small Business Administration (“SBA”) lending. Other includes general and administrative expenses that provide services to all segments; internal funds transfer pricing offsets resulting from allocations to/from the other segments; and certain elimination entries and investments in qualified affordable housing limited partnerships. All operations are domestic. The tables below present selected business segment financial information for the three months ended March 31, 2023 and 2022. Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total Three Months Ended March 31, 2023 (In thousands) Interest income $ 1,106 $ 42,318 $ 166,726 $ 1,144 $ 211,294 Interest expense — 27,794 84,526 (1,719) 110,601 Net interest income 1,106 14,524 82,200 2,863 100,693 Provision for credit losses — 1,364 5,503 — 6,867 Net interest income after provision for credit losses 1,106 13,160 76,697 2,863 93,826 Noninterest income 16,597 1,033 (1,189) (2,177) 14,264 Noninterest expense 14,631 2,755 10,170 7,216 34,772 Income (loss) before income taxes 3,072 11,438 65,338 (6,530) 73,318 Income taxes 1,106 2,797 16,031 (1,571) 18,363 Net income (loss) $ 1,966 $ 8,641 $ 49,307 $ (4,959) $ 54,955 Total assets $ 341,487 $ 3,318,491 $ 10,430,293 $ 150,695 $ 14,240,966 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total Three Months Ended March 31, 2022 (In thousands) Interest income $ 257 $ 20,329 $ 53,725 $ 1,701 $ 76,012 Interest expense — 2,021 8,517 (251) 10,287 Net interest income 257 18,308 45,208 1,952 65,725 Provision for credit losses — (207) 2,658 — 2,451 Net interest income after provision for credit losses 257 18,515 42,550 1,952 63,274 Noninterest income 32,186 1,860 2,189 (1,638) 34,597 Noninterest expense 16,531 2,926 6,574 5,002 31,033 Income (loss) before income taxes 15,912 17,449 38,165 (4,688) 66,838 Income taxes 4,420 4,290 9,401 (1,415) 16,696 Net income (loss) $ 11,492 $ 13,159 $ 28,764 $ (3,273) $ 50,142 Total assets $ 293,286 $ 2,863,907 $ 6,409,943 $ 83,456 $ 9,650,592 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2023 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Note 15: Recent Accounting Pronouncements The Company continually monitors potential accounting pronouncement and SEC release changes. The following pronouncements and releases have been deemed to have the most applicability to the Company’s financial statements: FASB ASU 2022-02 - Financial Instruments — Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures In February 2022, the FASB issued an ASU update to eliminate the recognition and measurement guidance on troubled debt restructurings for creditors that have adopted CECL and require enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. The new guidance also requires public business entities to present current-period gross write-offs (on a current year-to-date basis for interim-period disclosures) by year of origination in their vintage disclosures. These changes would be applied on a prospective basis. Disclosure would not be required to prior period comparative periods. The updates in ASU 2022-02 are effective for interim and annual periods beginning after December 15, 2022. The Company adopted this new guidance as of January 1, 2023, but does not expect it to have a material impact on the Company’s financial position or results of operations. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events | |
Subsequent Events | Note 16: Subsequent Events No material events were noted. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Basis of Presentation | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements include the accounts of Merchants Bancorp, a registered bank holding company (the “Company”) and its wholly owned subsidiaries, Merchants Bank of Indiana (“Merchants Bank”), Farmers-Merchants Bank of Illinois (“FMBI”) and Merchants Asset Management, LLC (“MAM”). Merchants Bank’s primary operating subsidiaries include Merchants Capital Corp. (“MCC”), Merchants Capital Servicing, LLC (“MCS”) and Merchants Capital Investments, LLC (“MCI”). All direct and indirectly owned subsidiaries owned by Merchants Bancorp are collectively referred to as the “Company”. The accompanying unaudited condensed consolidated balance sheet of the Company as of December 31, 2022, which has been derived from audited financial statements, and unaudited condensed consolidated financial statements of the Company as of March 31, 2023 and for the three months ended March 31, 2023 and 2022, were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company as of and for the year ended December 31, 2022 in its Annual Report on Form 10-K. Reference is made to the accounting policies of the Company described in the Notes to the Financial Statements contained in the Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of the unaudited financial statements have been included to present fairly the financial position as of March 31, 2023 |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements as of and for the period ended March 31, 2023 and 2022 include results from the Company, and its wholly owned subsidiaries, Merchants Bank, FMBI and MAM. Also included are Merchants Bank’s primary operating subsidiaries, MCC, MCS and MCI, as well as all direct and indirectly owned subsidiaries owned by Merchants Bancorp. In addition, when the Company makes an equity investment in or has a relationship with an entity for which it holds a variable interest, it is evaluated for consolidation requirements under Accounting Standards Update of Topic 810. Accordingly, the entity is assessed for potential consolidation under the variable interest entity (“VIE”) model and would only consolidate those entities for which it is a primary beneficiary. A primary beneficiary is defined as the party that has both the power to direct the activities that most significantly impact the entity, and an interest that could be significant to the entity. To determine if an interest could be significant to the entity, both qualitative and quantitative factors regarding the nature, size and form of the Company’s involvement with the entity are evaluated. Alternatively, under the voting interest model, it would only consolidate those entities for which it has a controlling interest. Because the variable interest investments held by the Company as of March 31, 2023 are not deemed to be primary beneficiaries or controlling interests, the entities are not consolidated and the equity method or proportional method of accounting has been applied. The Company will analyze whether its entities are the primary beneficiary on an ongoing basis. Changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment. See Note 5: Variable Interest Entities (VIEs) All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses on loans, servicing rights and fair values of financial instruments. |
Significant Accounting Policies | Significant Accounting Policies The significant accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. On January 1, 2022, the Company adopted FASB Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL"). The Company revised certain accounting policies and implemented certain accounting policy elections, related to the adoption of CECL, which are described below. All adjustments, which are of a normal recurring nature and are, in the opinion of management, necessary for a fair statement of the results for the periods reported, have been included in the accompanying Condensed Consolidated Financial Statements. CECL replaces the previous "allowance for loan and lease losses" model for measuring credit losses, which encompassed allowances for current known and inherent losses within the portfolio, with an "expected loss" model for measuring credit losses, which encompasses allowances for losses expected to be incurred over the life of the included assets. The new CECL model requires the measurement of all expected credit losses for financial assets measured at amortized cost and certain off-balance sheet credit exposures (“OBCEs”) based on historical experiences, current conditions, and reasonable and supportable forecasts. CECL also requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as credit quality and underwriting standards of an organization's portfolio. In addition, CECL includes certain changes to the accounting for investment securities available for sale depending on whether management intends to sell the securities or believes that it is more likely than not they will be required to sell. As of the adoption date on January 1, 2022, the Company recorded a $3.6 million decrease, net of taxes, to retained earnings for the cumulative effect of adopting CECL. The transition adjustment included a $0.3 million increase to retained earnings related to allowance for credit losses on loans (“ACL-Loans”) and a $5.2 million decrease to retained earnings related to allowance for OBCEs (“ACL-OBCEs”). The following table summarizes the impact of the adoption of CECL on the Company’s balance sheet as of January 1, 2022. ACL-Loans Note 4: Loans and Allowance for credit losses on loans ACL-OBCEs life of the commitment. The likelihood and expected amount of funding are based on historical utilization rates. The amount of the allowance represents management’s best estimate of expected credit losses on commitments expected to be funded over the contractual life of the commitment. The ACL–OBCEs is adjusted through the income statement as a component of provision for credit loss. |
Restricted Cash | Restricted Cash Included in cash equivalents is an account restricted as collateral for the potential risk of loss on $158.1 million of senior credit linked notes issued by the Company in March 2023. As of March 31, 2023, there was $20.5 million in restricted cash. Also see Note 11: Borrowings. |
Reclassifications | Reclassifications Certain reclassifications may have been made to the 2022 financial statements to conform to the financial statement presentation as of and for the three months ended March 31, 2023. These reclassifications had no effect on net income. |
Investment Securities (Tables)
Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investment Securities | |
Schedule of amortized cost and approximate fair values, together with gross unrealized gains and losses | March 31, 2023 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities available for sale: Treasury notes $ 175,766 $ 52 $ 719 $ 175,099 Federal agencies 299,990 — 9,659 290,331 Mortgage-backed - Government-sponsored entity (GSE) 214,086 6 4 214,088 Total securities available for sale $ 689,842 $ 58 $ 10,382 $ 679,518 Securities held to maturity: Mortgage-backed - Non-GSE multi-family $ 867,072 $ — $ 285 $ 866,787 Mortgage-backed - Non-GSE residential 236,225 2,088 — 238,313 Mortgage-backed - Government - sponsored entity (GSE) 1,538 — 56 1,482 Total securities held to maturity $ 1,104,835 $ 2,088 $ 341 $ 1,106,582 December 31, 2022 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities available for sale: Treasury notes $ 37,234 $ 1 $ 955 $ 36,280 Federal agencies 284,986 — 13,096 271,890 Mortgage-backed - Government-sponsored entity (GSE) 15,167 7 7 15,167 Total securities available for sale $ 337,387 $ 8 $ 14,058 $ 323,337 Securities held to maturity: Mortgage-backed - Non-GSE multi-family $ 871,772 $ 12 $ — $ 871,784 Mortgage-backed - Non-GSE residential 247,306 — 124 247,182 Total securities held to maturity $ 1,119,078 $ 12 $ 124 $ 1,118,966 |
Schedule of amortized cost and fair value of available-for-sale securities and held to maturity securities by contractual maturity | March 31, 2023 December 31, 2022 Amortized Fair Amortized Fair Cost Value Cost Value Securities available for sale: (In thousands) Within one year $ 341,569 $ 336,159 $ 118,984 $ 115,386 After one through five years 134,187 129,271 203,236 192,784 475,756 465,430 322,220 308,170 Mortgage-backed - Government-sponsored entity (GSE) 214,086 214,088 15,167 15,167 $ 689,842 $ 679,518 $ 337,387 $ 323,337 Securities held to maturity: Mortgage-backed - Non-GSE multi-family $ 867,072 $ 866,787 $ 871,772 $ 871,784 Mortgage-backed - Non-GSE residential 236,225 238,313 — — Mortgage-backed - Government - sponsored entity (GSE) 1,538 1,482 247,306 247,182 $ 1,104,835 $ 1,106,582 $ 1,119,078 $ 1,118,966 |
Schedule of gross unrealized losses and fair value of investments with unrealized losses have been in continuous | March 31, 2023 12 Months or Less than 12 Months Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) Securities available for sale: Treasury notes $ 29,757 $ 588 $ 5,862 $ 131 $ 35,619 $ 719 Federal agencies 14,947 53 275,385 9,606 290,332 9,659 Mortgage-backed - Government-sponsored entity (GSE) 74 2 200 2 274 4 $ 44,778 $ 643 $ 281,447 $ 9,739 $ 326,225 $ 10,382 Securities held to maturity: Mortgage-backed - Non-GSE multi-family $ 866,787 $ 285 $ — $ — $ 866,787 $ 285 Mortgage-backed - Government - sponsored entity (GSE) 1,482 56 — — 1,482 56 $ 868,269 $ 341 $ — $ — $ 868,269 $ 341 December 31, 2022 12 Months or Less than 12 Months Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) Securities available for sale: Treasury notes $ 29,560 $ 762 $ 5,798 $ 193 $ 35,358 $ 955 Federal agencies 19,276 724 252,613 12,372 271,889 13,096 Mortgage-backed - Government-sponsored entity (GSE) 709 7 — — 709 7 $ 49,545 $ 1,493 $ 258,411 $ 12,565 $ 307,956 $ 14,058 Securities held to maturity: Mortgage-backed - Non-GSE residential 247,182 124 — — 247,182 124 $ 247,182 $ 124 $ — $ — $ 247,182 $ 124 |
Loans and Allowance for Credi_2
Loans and Allowance for Credit Losses on Loans (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Loans and Allowance for Credit Losses on Loans | |
Summary of loans | March 31, December 31, 2023 2022 (In thousands) Mortgage warehouse lines of credit $ 604,445 $ 464,785 Residential real estate 1,215,252 1,178,401 Multi-family financing 3,566,530 3,135,535 Healthcare financing 1,941,204 1,604,341 Commercial and commercial real estate (1)(2) 1,194,320 978,661 Agricultural production and real estate 89,516 95,651 Consumer and margin loans 15,781 13,498 8,627,048 7,470,872 Less: ACL-Loans 51,838 44,014 Loans Receivable $ 8,575,210 $ 7,426,858 (1) Includes $672.9 million and $497.0 million of revolving lines of credit collateralized primarily by single-family mortgage servicing rights as of March 31, 2023 and December 31, 2022, respectively. (2) Includes only $9.1 million of non-owner occupied commercial real estate as of March 31, 2023 and included only $12.8 million as of December 31, 2022. |
Schedule of allowance for credit loss on loan methodology by loan portfolio segment | Loan Portfolio Segment ACL-Loans Methodology Mortgage warehouse lines of credit Remaining Life Method Residential real estate Discounted Cash Flow Multi-family financing Discounted Cash Flow Healthcare financing Discounted Cash Flow Commercial and commercial real estate Discounted Cash Flow Agricultural production and real estate Remaining Life Method Consumer and margin loans Remaining Life Method |
Summary of the activity in the ACL-Loans by portfolio segment | For the Three Months Ended March 31, 2023 MTG WHLOC RES RE MF FIN HC FIN CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) ACL-Loans Balance, beginning of period $ 1,249 $ 7,029 $ 16,781 $ 9,882 $ 8,326 $ 565 $ 182 $ 44,014 Provision for credit losses 415 349 3,070 1,871 2,149 (22) (15) 7,817 Loans charged to the allowance — — — — — — — — Recoveries of loans previously charged off — — — — 7 — — 7 Balance, end of period $ 1,664 $ 7,378 $ 19,851 $ 11,753 $ 10,482 $ 543 $ 167 $ 51,838 For the Three Months Ended March 31, 2022 MTG WHLOC RES RE MF FIN HC FIN CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) ACL-Loans Balance, beginning of period $ 1,955 $ 4,170 $ 14,084 $ 4,461 $ 5,879 $ 657 $ 138 $ 31,344 Impact of adopting CECL 41 275 520 139 (1,277) (18) 21 (299) Provision for credit losses (55) 102 527 1,018 431 (42) — 1,981 Loans charged to the allowance — — — — (931) — — (931) Recoveries of loans previously charged off — — — — — — 7 7 Balance, end of period $ 1,941 $ 4,547 $ 15,131 $ 5,618 $ 4,102 $ 597 $ 166 $ 32,102 |
Summary of activity in the allowance for loans and recorded investment by loan portfolio | December 31, 2022 MTG WHLOC RES RE MF FIN HC FIN CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) ACL-Loans Balance, beginning of period $ 1,955 $ 4,170 $ 14,084 $ 4,461 $ 5,879 $ 657 $ 138 $ 31,344 Impact of adopting CECL 41 275 520 139 (1,277) (18) 21 (299) Provision for credit losses (747) 2,588 2,177 5,282 4,216 (74) 31 13,473 Loans charged to the allowance — (4) — — (1,238) — (15) (1,257) Recoveries of loans previously charged off — — — — 746 — 7 753 Balance, end of period $ 1,249 $ 7,029 $ 16,781 $ 9,882 $ 8,326 $ 565 $ 182 $ 44,014 |
Schedule of allowance for credit loss allocated to collateral dependent loans | The below table presents the amortized cost basis and ACL-Loans allocated for collateral dependent loans, which are individually evaluated to determine expected credit losses: March 31, 2023 Real Estate Accounts Receivable / Equipment Other Total ACL-Loans Allocation (In thousands) RES RE $ 231 $ — $ 9 $ 240 $ 38 MF FIN 36,760 — — 36,760 184 HC FIN 21,783 — — 21,783 132 CML & CRE — 4,986 1,493 6,479 1,381 AG & AGRE 147 — — 147 1 CON & MAR — — 5 5 — Total collateral dependent loans $ 58,921 $ 4,986 $ 1,507 $ 65,414 $ 1,736 |
Schedule of credit risk profile of loan portfolio | The following tables present the credit risk profile of the Company’s loan portfolio based on internal risk rating category as of March 31, 2023 and December 31, 2022: As of March 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans TOTAL (In thousands) MTG WHLOC Pass $ — $ — $ — $ — $ — $ — $ 604,445 $ 604,445 Total $ — $ — $ — $ — $ — $ — $ 604,445 $ 604,445 RES RE Pass 3,207 13,097 8,339 24,856 3,475 12,867 1,148,709 1,214,550 Special Mention (Watch) — — — — 60 402 — 462 Substandard — — — — — 240 — 240 Total $ 3,207 $ 13,097 $ 8,339 $ 24,856 $ 3,535 $ 13,509 $ 1,148,709 $ 1,215,252 MF FIN Pass 382,298 1,221,448 494,235 156,813 32,201 11,347 1,159,249 3,457,591 Special Mention (Watch) — 32,807 16,379 8,000 — — 14,993 72,179 Substandard — 36,760 — — — — — 36,760 Total $ 382,298 $ 1,291,015 $ 510,614 $ 164,813 $ 32,201 $ 11,347 $ 1,174,242 $ 3,566,530 HC FIN Pass 93,837 1,176,484 265,032 79,805 13,682 — 207,521 1,836,361 Special Mention (Watch) 22,709 22,437 29,014 — — — 8,900 83,060 Substandard — — 21,783 — — — — 21,783 Total $ 116,546 $ 1,198,921 $ 315,829 $ 79,805 $ 13,682 $ — $ 216,421 $ 1,941,204 CML & CRE Pass 23,150 130,905 85,065 22,411 22,109 19,553 881,494 1,184,687 Special Mention (Watch) 17 41 473 1,103 116 323 1,081 3,154 Substandard — 496 2,057 586 70 632 2,638 6,479 Total $ 23,167 $ 131,442 $ 87,595 $ 24,100 $ 22,295 $ 20,508 $ 885,213 $ 1,194,320 AG & AGRE Pass 4,439 11,116 7,163 15,049 5,675 20,352 24,124 87,918 Special Mention (Watch) — 14 54 462 344 551 26 1,451 Substandard — — — — — 147 — 147 Total $ 4,439 $ 11,130 $ 7,217 $ 15,511 $ 6,019 $ 21,050 $ 24,150 $ 89,516 CON & MAR Pass 137 4,570 403 220 62 4,502 5,861 15,755 Special Mention (Watch) — — — 19 — 2 — 21 Substandard — — — — — 5 — 5 Total $ 137 $ 4,570 $ 403 $ 239 $ 62 $ 4,509 $ 5,861 $ 15,781 Total Pass $ 507,068 $ 2,557,620 $ 860,237 $ 299,154 $ 77,204 $ 68,621 $ 4,031,403 $ 8,401,307 Total Special Mention (Watch) $ 22,726 $ 55,299 $ 45,920 $ 9,584 $ 520 $ 1,278 $ 25,000 $ 160,327 Total Substandard $ — $ 37,256 $ 23,840 $ 586 $ 70 $ 1,024 $ 2,638 $ 65,414 Total Loans $ 529,794 $ 2,650,175 $ 929,997 $ 309,324 $ 77,794 $ 70,923 $ 4,059,041 $ 8,627,048 Total Charge offs $ — $ — $ — $ — $ — $ — $ — $ — December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Loans TOTAL (In thousands) MTG WHLOC Pass $ — $ — $ — $ — $ — $ — $ 464,785 $ 464,785 Total $ — $ — $ — $ — $ — $ — $ 464,785 $ 464,785 RES RE Pass 13,344 8,192 24,708 3,498 1,722 11,166 1,114,705 1,177,335 Special Mention (Watch) — — — 61 — 668 91 820 Substandard — — — — 74 172 — 246 Total $ 13,344 $ 8,192 $ 24,708 $ 3,559 $ 1,796 $ 12,006 $ 1,114,796 $ 1,178,401 MF FIN Pass 1,212,008 544,823 200,829 32,349 4,416 7,229 1,042,024 3,043,678 Special Mention (Watch) 32,919 — 8,000 — — — 14,178 55,097 Substandard 36,760 — — — — — — 36,760 Total $ 1,281,687 $ 544,823 $ 208,829 $ 32,349 $ 4,416 $ 7,229 $ 1,056,202 $ 3,135,535 HC FIN Pass 987,676 301,103 78,792 13,770 — — 123,888 1,505,229 Special Mention (Watch) 52,022 25,307 — — — — — 77,329 Substandard — 21,783 — — — — — 21,783 Total $ 1,039,698 $ 348,193 $ 78,792 $ 13,770 $ — $ — $ 123,888 $ 1,604,341 CML & CRE Pass 123,757 86,282 23,803 24,730 12,335 8,765 690,114 969,786 Special Mention (Watch) 43 164 963 119 99 228 1,376 2,992 Substandard — 2,017 591 72 — 666 2,537 5,883 Total $ 123,800 $ 88,463 $ 25,357 $ 24,921 $ 12,434 $ 9,659 $ 694,027 $ 978,661 AG & AGRE Pass 12,112 7,485 15,660 5,808 3,137 20,176 29,566 93,944 Special Mention (Watch) 14 55 462 421 163 389 56 1,560 Substandard — — — — — 147 — 147 Total $ 12,126 $ 7,540 $ 16,122 $ 6,229 $ 3,300 $ 20,712 $ 29,622 $ 95,651 CON & MAR Pass 4,673 463 307 101 4,589 9 3,328 13,470 Special Mention (Watch) — — 20 — — 2 — 22 Substandard — — — — — 6 — 6 Total $ 4,673 $ 463 $ 327 $ 101 $ 4,589 $ 17 $ 3,328 $ 13,498 Total Pass $ 2,353,570 $ 948,348 $ 344,099 $ 80,256 $ 26,199 $ 47,345 $ 3,468,410 $ 7,268,227 Total Special Mention (Watch) $ 84,998 $ 25,526 $ 9,445 $ 601 $ 262 $ 1,287 $ 15,701 $ 137,820 Total Substandard $ 36,760 $ 23,800 $ 591 $ 72 $ 74 $ 991 $ 2,537 $ 64,825 Total Loans $ 2,475,328 $ 997,674 $ 354,135 $ 80,929 $ 26,535 $ 49,623 $ 3,486,648 $ 7,470,872 |
Schedule of aging analysis of the recorded investment in loans | March 31, 2023 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHLOC $ — $ — $ — $ — $ 604,445 $ 604,445 RES RE 2,573 2,409 918 5,900 1,209,352 1,215,252 MF FIN — 12,975 36,760 49,735 3,516,795 3,566,530 HC FIN — — 21,783 21,783 1,919,421 1,941,204 CML & CRE 209 495 3,778 4,482 1,189,838 1,194,320 AG & AGRE 236 43 1,242 1,521 87,995 89,516 CON & MAR 47 1 22 70 15,711 15,781 $ 3,065 $ 15,923 $ 64,503 $ 83,491 $ 8,543,557 $ 8,627,048 December 31, 2022 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHLOC $ — $ — $ — $ — $ 464,785 $ 464,785 RES RE 4,053 152 272 4,477 1,173,924 1,178,401 MF FIN — — — — 3,135,535 3,135,535 HC FIN — — 21,783 21,783 1,582,558 1,604,341 CML & CRE 4,759 — 3,778 8,537 970,124 978,661 AG & AGRE 4,903 — — 4,903 90,748 95,651 CON & MAR 6 24 22 52 13,446 13,498 $ 13,721 $ 176 $ 25,855 $ 39,752 $ 7,431,120 $ 7,470,872 |
Schedule of nonaccrual loans and loans past due 90 days or more and still accruing | March 31, December 31, 2023 2022 Total Loans > Total Loans > 90 Days & 90 Days & Nonaccrual Accruing Nonaccrual Accruing (In thousands) RES RE $ 240 $ 741 $ 245 $ 96 MF FIN 36,760 — — — HC FIN 21,783 — 21,783 — CML & CRE 4,357 — 4,390 — AG & AGRE 147 1,242 147 — CON & MAR 5 17 6 16 $ 63,292 $ 2,000 $ 26,571 $ 112 |
Schedule of Company's modified loans | For the Three Months Ended March 31, 2023 Principal Forgiveness Payment Delay Term Extension Interest Rate Reduction Combination Term Extension and Principal Forgiveness Combination Term Extension Interest Rate Reduction Total Class of Financing Receivable (In thousands) Commercial and commercial real estate $ — $ 4,357 $ — $ — $ — $ — — % Total $ — $ 4,357 $ — $ — $ — $ — — % |
Variable Interest Entities (V_2
Variable Interest Entities (VIEs) (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Variable Interest Entities (VIEs). | |
Schedule reflects the size of VIEs as well as maximum exposure to loss in connection with investments | Total Total Maximum Assets ($ in thousands) Assets Liabilities Exposure to Loss (In thousands) March 31, 2023 Unconsolidated VIEs $ 60,466 $ 25,207 $ 60,466 December 31, 2022 Unconsolidated VIEs $ 52,125 $ 25,564 $ 52,125 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Regulatory Matters | |
Summary of bank's actual capital amounts and ratios | Minimum Minimum Amount Required Amount To Be for Adequately Well Actual Capitalized (1) Capitalized (1) Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) March 31, 2023 Total capital (1) Company $ 1,558,187 12.4 % $ 1,006,425 8.0 % $ — N/A % Merchants Bank 1,488,469 12.1 % 986,980 8.0 % 1,233,725 10.0 FMBI 36,044 11.4 % 25,309 8.0 % 31,636 10.0 % Tier I capital (1) Company 1,495,800 11.9 % 754,818 6.0 % — N/A % Merchants Bank 1,426,815 11.6 % 740,235 6.0 % 986,980 8.0 FMBI 35,311 11.2 % 18,981 6.0 % 25,309 8.0 % Common Equity Tier I capital (1) Company 996,192 7.9 % 566,114 4.5 % — N/A % Merchants Bank 1,426,815 11.6 % 555,176 4.5 % 801,921 6.5 FMBI 35,311 11.2 % 14,236 4.5 % 20,563 6.5 % Tier I capital (1) Company 1,495,800 11.6 % 514,725 4.0 % — N/A % Merchants Bank 1,426,815 11.3 % 503,987 4.0 % 629,983 5.0 FMBI 35,311 10.6 % 13,347 4.0 % 16,684 5.0 % (1) As defined by regulatory agencies. Minimum Minimum Amount Required Amount To Be for Adequately Well Actual Capitalized (1) Capitalized (1) Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2022 Total capital (1) Company $ 1,507,968 12.2 % $ 992,883 8.0 % $ — N/A % Merchants Bank 1,427,738 11.7 % 975,853 8.0 % 1,219,817 10.0 % FMBI 34,769 11.3 % 24,703 8.0 % 30,878 10.0 % Tier I capital (1) Company 1,452,456 11.7 % 744,662 6.0 % — N/A % Merchants Bank 1,372,941 11.3 % 731,890 6.0 % 975,853 8.0 % FMBI 34,054 11.0 % 18,527 6.0 % 24,703 8.0 % Common Equity Tier I capital (1) Company 952,848 7.7 % 558,497 4.5 % — N/A % Merchants Bank 1,372,941 11.3 % 548,917 4.5 % 792,881 6.5 % FMBI 34,054 11.0 % 13,895 4.5 % 20,071 6.5 % Tier I capital (1) Company 1,452,456 11.7 % 497,604 4.0 % — N/A % Merchants Bank 1,372,941 11.3 % 487,511 4.0 % 609,389 5.0 % FMBI 34,054 10.7 % 12,702 4.0 % 15,878 5.0 % (1) As defined by regulatory agencies. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Financial Instruments | |
Summary of notional amount and fair value of derivative assets and liabilities | Notional Fair Value Amount Balance Sheet Location Asset Liability March 31, 2023 (In thousands) (In thousands) Interest rate lock commitments $ 32,018 Other assets/liabilities $ 218 $ 4 Forward contracts $ 29,317 Other assets/liabilities 2 235 Interest rate swaps $ 57,566 Other assets/liabilities 1,694 — $ 1,914 $ 239 Notional Fair Value Amount Balance Sheet Location Asset Liability December 31, 2022 (In thousands) (In thousands) Interest rate lock commitments $ 8,759 Other assets/liabilities $ 28 $ 23 Forward contracts $ 13,096 Other assets/liabilities 46 52 Interest rate swaps $ 57,574 Other assets/liabilities 3,030 — $ 3,104 $ 75 |
Summarizes the periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | Three Months Ended March 31, 2023 2022 (In thousands) Derivative gain (loss) included in other income: Interest rate lock commitments $ 209 $ (882) Forward contracts (includes pair-off settlements) (96) 3,150 Net derivative gains (loss) $ 113 $ 2,268 Gain (loss) included in gain on sale of loans: Interest rates swaps - change in fair value (1,336) — Loans held for sale - change in fair value 1,560 — Net gain (loss) $ 224 $ — |
Interest rate swaps | |
Derivative Financial Instruments | |
Summary of notional amount and fair value of derivative assets and liabilities | Notional Fair Value Amount Balance Sheet Location Asset Liability (In thousands) (In thousands) March 31, 2023 $ 77,354 Other assets/liabilities $ 2,461 $ 2,461 December 31, 2022 $ 77,495 Other assets/liabilities $ 3,041 $ 3,041 |
Summarizes the periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | Three Months Ended March 31, 2023 2022 (In thousands) Gross swap gains $ 580 $ 496 Gross swap losses 580 496 Net swap gains (losses) $ — $ — |
Disclosures about Fair Value _2
Disclosures about Fair Value of Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Disclosures about Fair Value of Assets and Liabilities | |
Schedule of fair value measurement of assets measured at fair value on recurring basis | Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Fair Assets Inputs Inputs Assets Value (Level 1) (Level 2) (Level 3) (In thousands) March 31, 2023 Mortgage loans in process of securitization $ 197,074 $ — $ 197,074 $ — Securities available for sale: Treasury notes 175,099 175,099 — — Federal agencies 290,331 — 290,331 — Mortgage-backed - Government-sponsored entity (GSE) 214,088 — 214,088 — Loans held for sale 85,516 — 85,516 — Servicing rights 143,867 — — 143,867 Derivative assets - interest rate lock commitments 218 — — 218 Derivative assets - forward contracts 2 — 2 — Derivative assets - interest rate swaps 1,694 — 1,694 — Derivative assets - interest rate swaps (back-to-back) 2,461 — 2,461 — Derivative liabilities - interest rate lock commitments 4 — — 4 Derivative liabilities - forward contracts 235 — 235 — Derivative liabilities - interest rate swaps (back-to-back) 2,461 — 2,461 — December 31, 2022 Mortgage loans in process of securitization $ 154,194 $ — $ 154,194 $ — Securities available for sale: Treasury notes 36,280 36,280 — — Federal agencies 271,890 — 271,890 — Mortgage-backed - Government-sponsored entity (GSE) 15,167 — 15,167 — Loans held for sale 82,192 — 82,192 — Servicing rights 146,248 — — 146,248 Derivative assets - interest rate lock commitments 28 — — 28 Derivative assets - forward contracts 46 — 46 — Derivative assets - interest rate swaps 3,030 — 3,030 — Derivative assets - interest rate swaps (back-to-back) 3,041 — 3,041 — Derivative liabilities - interest rate lock commitments 23 — — 23 Derivative liabilities - forward contracts 52 — 52 — Derivative liabilities - interest rate swaps (back-to-back) 3,041 — 3,041 — |
Schedule of Level 3 reconciliation of recurring fair value measurements | Three Months Ended March 31, 2023 2022 (In thousands) Servicing rights Balance, beginning of period $ 146,248 $ 110,348 Additions Originated servicing 2,173 5,792 Subtractions Paydowns (1,698) (2,749) Sales of servicing — — Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model (2,856) 7,645 Balance, end of period $ 143,867 $ 121,036 Derivative Assets - interest rate lock commitments Balance, beginning of period $ 28 $ 264 Changes in fair value 190 (152) Balance, end of period $ 218 $ 112 Derivative Liabilities - interest rate lock commitments Balance, beginning of period $ 23 $ 41 Changes in fair value (19) 730 Balance, end of period $ 4 $ 771 |
Schedule of fair value measurement of assets and liabilities measured at fair value on nonrecurring basis | Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Fair Assets Inputs Inputs Assets Value (Level 1) (Level 2) (Level 3) (In thousands) March 31, 2023 Impaired loans (collateral-dependent) $ — $ — $ — $ — December 31, 2022 Impaired loans (collateral-dependent) $ 4,465 $ — $ — $ 4,465 |
Schedule of quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than goodwill | Valuation Weighted Fair Value Technique Unobservable Inputs Range Average (In thousands) At March 31, 2023: Servicing rights - Multi-family $ 109,706 Discounted cash flow Discount rate 8% - 13% 9% Constant prepayment rate 0 - 39% 8% Servicing rights - Single-family $ 29,078 Discounted cash flow Discount rate 9% - 10% 9% Constant prepayment rate 7% - 10% 7% Servicing rights - SBA $ 5,083 Discounted cash flow Discount rate 16% 16% Constant prepayment rate 3% - 12% 8% Derivative assets - interest rate lock commitments $ 218 Discounted cash flow Loan closing rates 51% - 99% 75% Derivative liabilities - interest rate lock commitments $ 4 Discounted cash flow Loan closing rates 51% - 99% 75% At December 31, 2022: Collateral dependent loans $ 4,465 Market comparable properties Marketability discount 4% - 54% 5% Servicing rights - Multi-family $ 111,690 Discounted cash flow Discount rate 8% - 13% 9% Constant prepayment rate 0 - 39% 8% Servicing rights - Single-family $ 29,926 Discounted cash flow Discount rate 9% - 10% 9% Constant prepayment rate 7% - 10% 7% Servicing rights - SBA $ 4,632 Discounted cash flow Discount rate 16% 16% Constant prepayment rate 3% - 12% 8% Derivative assets - interest rate lock commitments $ 28 Discounted cash flow Loan closing rates 60% - 87% 77% Derivative liabilities - interest rate lock commitments $ 23 Discounted cash flow Loan closing rates 60% - 87% 77% |
Schedule of carrying amount and estimated fair value of financial instruments | Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Fair Assets Inputs Inputs Assets Value Value (Level 1) (Level 2) (Level 3) (In thousands) March 31, 2023 Financial assets: Cash and cash equivalents $ 369,586 $ 369,586 $ 369,586 $ — $ — Securities purchased under agreements to resell 3,438 3,438 — 3,438 — Securities held to maturity 1,104,835 1,106,582 — 239,795 866,787 FHLB stock 39,130 39,130 — 39,130 — Loans held for sale 2,769,734 2,769,734 — 2,769,734 — Loans receivable, net 8,575,210 8,553,015 — — 8,553,015 Interest receivable 64,282 64,282 — 64,282 — Financial liabilities: Deposits 11,345,231 11,343,744 7,208,222 4,135,522 — Short-term subordinated debt 21,000 21,000 — 21,000 — FHLB advances 859,211 858,957 — 858,957 — Other borrowing 200,000 200,000 — 200,000 — Credit linked notes 153,551 154,520 — 154,520 — Interest payable 32,605 32,605 — 32,605 — December 31, 2022 Financial assets: Cash and cash equivalents $ 226,164 $ 226,164 $ 226,164 $ — $ — Securities purchased under agreements to resell 3,464 3,464 — 3,464 — Securities held to maturity 1,119,078 1,118,966 — 247,182 871,784 FHLB stock 39,130 39,130 — 39,130 — Loans held for sale 2,828,384 2,828,384 — 2,828,384 — Loans receivable, net 7,426,858 7,431,731 — — 7,431,731 Interest receivable 56,262 56,262 — 56,262 — Financial liabilities: Deposits 10,071,345 10,064,941 7,082,056 2,982,885 — Short-term subordinated debt 21,000 21,000 — 21,000 — FHLB advances 859,392 858,984 — 858,984 — Other borrowing 50,000 50,000 — 50,000 — Interest payable 23,384 23,384 — 23,384 — |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases. | |
Schedule of balance sheet, income statement and cash flow detail regarding operating leases | March 31, 2023 December 31, 2022 Balance Sheet (In thousands) (In thousands) Operating lease right-of-of use asset (in other assets) $ 10,483 $ 10,969 Operating lease liability (in other liabilities) 11,644 11,992 Weighted average remaining lease term (years) 6.3 6.5 Weighted average discount rate 2.68% 2.65% Maturities of lease liabilities: One year or less $ 1,731 $ 2,181 Year two 2,345 2,321 Year three 1,881 1,881 Year four 1,911 1,911 Year five 1,853 1,853 Thereafter 2,902 2,902 Total future minimum lease payments 12,623 13,049 Less: imputed interest 979 1,057 Total $ 11,644 $ 11,992 Three Months Ended Three Months Ended March 31, 2023 March 31, 2022 Income Statement (In thousands) (In thousands) Components of lease expense: Operating lease cost (in occupancy and equipment expense) $ 583 $ 367 Three Months Ended Three Months Ended March 31, 2023 March 31, 2022 Cash Flow Statement (In thousands) (In thousands) Supplemental cash flow information: Operating cash flows from operating leases $ 426 $ 283 |
Deposits (Tables)
Deposits (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Deposits | |
Schedule of deposits | March 31, 2023 December 31, 2023 2022 (In thousands) Noninterest-bearing deposits Demand deposits $ 313,733 $ 326,875 Total noninterest-bearing deposits 313,733 326,875 Interest-bearing deposits Demand deposits $ 3,843,282 $ 3,720,363 Savings deposits 3,051,207 3,034,818 Certificates of deposit 4,137,009 2,989,289 Total interest-bearing deposits 11,031,498 9,744,470 Total deposits $ 11,345,231 $ 10,071,345 |
Schedule of maturities of time deposits | March 31, 2023 (In thousands) Due within one year $ 4,004,937 Due in one year to two years 90,668 Due in two years to three years 39,683 Due in three years to four years 1,114 Due in four years to five years 585 Due in five years to six years 22 $ 4,137,009 |
Schedule of brokered deposit amounts | March 31, December 31, 2023 2022 (In thousands) Brokered certificates of deposit $ 3,679,084 $ 2,681,198 Brokered savings deposits 51,076 81,532 Brokered deposit on demand accounts — 13 $ 3,730,160 $ 2,762,743 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Borrowings | |
Schedule of borrowings | Borrowings were comprised of the following at March 31, 2023 and December 31, 2022: March 31, December 31, 2023 2022 (In thousands) Federal Reserve discount window borrowings $ 200,000 $ 20,000 Short-term subordinated debt 21,000 21,000 FHLB advances 859,211 859,392 American Financial Exchange borrowing — 30,000 Credit linked notes 153,551 — Total borrowings $ 1,233,762 $ 930,392 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share | |
Schedule of computation of earnings per share | Three Month Periods Ended March 31, 2023 2022 Weighted- Per Weighted- Per Net Average Share Net Average Share Income Shares Amount Income Shares Amount (In thousands) (In thousands) Net income $ 54,955 $ 50,142 Dividends on preferred stock (8,667) (5,728) Net income allocated to common shareholders $ 46,288 $ 44,414 Basic earnings per share 43,179,604 $ 1.07 43,190,066 $ 1.03 Effect of dilutive securities-restricted stock awards 111,175 169,968 Diluted earnings per share 43,290,779 $ 1.07 43,360,034 $ 1.02 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Information | |
Schedule of business segment financial information | Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total Three Months Ended March 31, 2023 (In thousands) Interest income $ 1,106 $ 42,318 $ 166,726 $ 1,144 $ 211,294 Interest expense — 27,794 84,526 (1,719) 110,601 Net interest income 1,106 14,524 82,200 2,863 100,693 Provision for credit losses — 1,364 5,503 — 6,867 Net interest income after provision for credit losses 1,106 13,160 76,697 2,863 93,826 Noninterest income 16,597 1,033 (1,189) (2,177) 14,264 Noninterest expense 14,631 2,755 10,170 7,216 34,772 Income (loss) before income taxes 3,072 11,438 65,338 (6,530) 73,318 Income taxes 1,106 2,797 16,031 (1,571) 18,363 Net income (loss) $ 1,966 $ 8,641 $ 49,307 $ (4,959) $ 54,955 Total assets $ 341,487 $ 3,318,491 $ 10,430,293 $ 150,695 $ 14,240,966 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total Three Months Ended March 31, 2022 (In thousands) Interest income $ 257 $ 20,329 $ 53,725 $ 1,701 $ 76,012 Interest expense — 2,021 8,517 (251) 10,287 Net interest income 257 18,308 45,208 1,952 65,725 Provision for credit losses — (207) 2,658 — 2,451 Net interest income after provision for credit losses 257 18,515 42,550 1,952 63,274 Noninterest income 32,186 1,860 2,189 (1,638) 34,597 Noninterest expense 16,531 2,926 6,574 5,002 31,033 Income (loss) before income taxes 15,912 17,449 38,165 (4,688) 66,838 Income taxes 4,420 4,290 9,401 (1,415) 16,696 Net income (loss) $ 11,492 $ 13,159 $ 28,764 $ (3,273) $ 50,142 Total assets $ 293,286 $ 2,863,907 $ 6,409,943 $ 83,456 $ 9,650,592 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 30, 2023 | Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
Allowance for loan losses | $ 31,344 | ||||
Retained earnings, net of tax | $ 875,700 | $ 832,871 | |||
Credit linked notes | |||||
Notes issued | 158,100 | $ 158,100 | |||
Restricted Cash | Credit linked notes | |||||
Debt Instrument, Collateral Amount | $ 20,500 | ||||
Impact from adoption of ASU | ASU 2016-13 | |||||
Allowance for loan losses | $ (300) | ||||
ACL - OBCEs (in Other Liabilities) | 5,200 | ||||
Retained earnings, net of tax | $ (3,600) |
Investment Securities - Amortiz
Investment Securities - Amortized Cost to Approximate Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Available for sale securities: | ||
Amortized Cost | $ 689,842 | $ 337,387 |
Gross Unrealized Gains | 58 | 8 |
Gross Unrealized Losses | 10,382 | 14,058 |
Fair Value | 679,518 | 323,337 |
Accrued interest on securities available for sale | 1,500 | 500 |
Accrued interest on securities held to maturity | 4,400 | 4,300 |
Held to maturity securities: | ||
Amortized Cost | 1,104,835 | 1,119,078 |
Gross Unrealized Gains | 2,088 | 12 |
Gross Unrealized Losses | 341 | 124 |
Fair Value | 1,106,582 | 1,118,966 |
Treasury notes | ||
Available for sale securities: | ||
Amortized Cost | 175,766 | 37,234 |
Gross Unrealized Gains | 52 | 1 |
Gross Unrealized Losses | 719 | 955 |
Fair Value | 175,099 | 36,280 |
Federal agencies | ||
Available for sale securities: | ||
Amortized Cost | 299,990 | 284,986 |
Gross Unrealized Losses | 9,659 | 13,096 |
Fair Value | 290,331 | 271,890 |
Mortgage-backed - Government-sponsored entity (GSE) | ||
Available for sale securities: | ||
Amortized Cost | 214,086 | 15,167 |
Gross Unrealized Gains | 6 | 7 |
Gross Unrealized Losses | 4 | 7 |
Fair Value | 214,088 | 15,167 |
Held to maturity securities: | ||
Amortized Cost | 1,538 | 247,306 |
Gross Unrealized Losses | 56 | |
Fair Value | 1,482 | 247,182 |
Mortgage-backed - Non-GSE multi-family | ||
Held to maturity securities: | ||
Amortized Cost | 867,072 | 871,772 |
Gross Unrealized Gains | 12 | |
Gross Unrealized Losses | 285 | |
Fair Value | 866,787 | 871,784 |
Mortgage-backed - Non-GSE residential | ||
Held to maturity securities: | ||
Amortized Cost | 236,225 | 247,306 |
Gross Unrealized Gains | 2,088 | |
Gross Unrealized Losses | 124 | |
Fair Value | $ 238,313 | $ 247,182 |
Investment Securities - Contrac
Investment Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Available for Sale Securities, Amortized Cost | ||
Within one year | $ 341,569 | $ 118,984 |
After one through five years | 134,187 | 203,236 |
Total, single maturity date | 475,756 | 322,220 |
Total | 689,842 | 337,387 |
Available for Sale Securities, Fair Value | ||
Within one year | 336,159 | 115,386 |
After one through five years | 129,271 | 192,784 |
Total, single maturity date | 465,430 | 308,170 |
Total | 679,518 | 323,337 |
Held to Maturity Securities, Amortized Cost | ||
Total | 1,104,835 | 1,119,078 |
Held to Maturity Securities, Fair Value | ||
Total | 1,106,582 | 1,118,966 |
Held to maturity securities: | ||
Amortized Cost | 1,104,835 | 1,119,078 |
Fair Value | 1,106,582 | 1,118,966 |
Mortgage-backed - Government-sponsored entity (GSE) | ||
Available for Sale Securities, Amortized Cost | ||
Without single maturity date | 214,086 | 15,167 |
Total | 214,086 | 15,167 |
Available for Sale Securities, Fair Value | ||
Without single maturity date | 214,088 | 15,167 |
Total | 214,088 | 15,167 |
Held to Maturity Securities, Amortized Cost | ||
Total | 1,538 | 247,306 |
Held to Maturity Securities, Fair Value | ||
Total | 1,482 | 247,182 |
Held to maturity securities: | ||
Amortized Cost | 1,538 | 247,306 |
Fair Value | 1,482 | 247,182 |
Mortgage-backed - Non-GSE multi-family | ||
Held to Maturity Securities, Amortized Cost | ||
Total | 867,072 | 871,772 |
Held to Maturity Securities, Fair Value | ||
Total | 866,787 | 871,784 |
Held to maturity securities: | ||
Amortized Cost | 867,072 | 871,772 |
Fair Value | 866,787 | 871,784 |
Mortgage-backed - Non-GSE residential | ||
Held to Maturity Securities, Amortized Cost | ||
Total | 236,225 | 247,306 |
Held to Maturity Securities, Fair Value | ||
Total | 238,313 | 247,182 |
Held to maturity securities: | ||
Amortized Cost | 236,225 | 247,306 |
Fair Value | $ 238,313 | $ 247,182 |
Investment Securities - Sale of
Investment Securities - Sale of securities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Investment Securities | ||
Proceeds from the sale of securities available for sale | $ 0 | $ 0 |
Investment Securities - Continu
Investment Securities - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | $ 44,778 | $ 49,545 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 281,447 | 258,411 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 326,225 | 307,956 |
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value | ||
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 868,269 | 247,182 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value, Total | 868,269 | 247,182 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | 643 | 1,493 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | 9,739 | 12,565 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 10,382 | 14,058 |
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | 341 | 124 |
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 341 | 124 |
Treasury notes | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 29,757 | 29,560 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 5,862 | 5,798 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 35,619 | 35,358 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | 588 | 762 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | 131 | 193 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 719 | 955 |
Federal agencies | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 14,947 | 19,276 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 275,385 | 252,613 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 290,332 | 271,889 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | 53 | 724 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | 9,606 | 12,372 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 9,659 | 13,096 |
Mortgage-backed - Government-sponsored entity (GSE) | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 74 | 709 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 200 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 274 | 709 |
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value | ||
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 1,482 | 247,182 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value, Total | 1,482 | 247,182 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | 2 | 7 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | 2 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 4 | 7 |
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | 56 | 124 |
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 56 | $ 124 |
Mortgage-backed - Non-GSE residential | ||
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value | ||
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 866,787 | |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value, Total | 866,787 | |
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | 285 | |
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | $ 285 |
Mortgage Loans in Process of _2
Mortgage Loans in Process of Securitization (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Mortgage Loans in Process of Securitization | ||
Unrealized gains included in mortgage loans | $ 4 | $ 2.8 |
Loans and Allowance for Credi_3
Loans and Allowance for Credit Losses on Loans - Summary of Loans By Classification (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | |
Loans and Allowance for Loan Losses | |||
Loans | $ 8,627,048 | $ 7,470,872 | |
Less: ACL-Loans | 51,838 | 44,014 | $ 32,102 |
Loans receivable | 8,575,210 | 7,426,858 | |
Accrued interest on loans, excluded from amortized cost of loans | 42,600 | 35,000 | |
Mortgage warehouse lines of credit | |||
Loans and Allowance for Loan Losses | |||
Loans | 604,445 | 464,785 | |
Less: ACL-Loans | 1,664 | 1,249 | 1,941 |
Residential real estate | |||
Loans and Allowance for Loan Losses | |||
Loans | 1,215,252 | 1,178,401 | |
Less: ACL-Loans | 7,378 | 7,029 | 4,547 |
Healthcare financing | |||
Loans and Allowance for Loan Losses | |||
Loans | 1,941,204 | 1,604,341 | |
Less: ACL-Loans | 11,753 | 9,882 | 5,618 |
Multi-family financing | |||
Loans and Allowance for Loan Losses | |||
Loans | 3,566,530 | 3,135,535 | |
Less: ACL-Loans | 19,851 | 16,781 | 15,131 |
Commercial and commercial real estate | |||
Loans and Allowance for Loan Losses | |||
Loans | 1,194,320 | 978,661 | |
Less: ACL-Loans | 10,482 | 8,326 | 4,102 |
Mortgage servicing rights collateralized | 672,900 | 497,000 | |
Commercial and commercial real estate | Non-owner occupied commercial real estate | |||
Loans and Allowance for Loan Losses | |||
Loans | $ 9,100 | 12,800 | |
Commercial and commercial real estate | Non-owner occupied commercial real estate | Minimum | |||
Loans and Allowance for Loan Losses | |||
Percentage of loans to be forgiven | 1 | ||
Agricultural production and real estate | |||
Loans and Allowance for Loan Losses | |||
Loans | $ 89,516 | 95,651 | |
Less: ACL-Loans | 543 | 565 | 597 |
Consumer and margin loans | |||
Loans and Allowance for Loan Losses | |||
Loans | 15,781 | 13,498 | |
Less: ACL-Loans | $ 167 | $ 182 | $ 166 |
Loans and Allowance for Credi_4
Loans and Allowance for Credit Losses on Loans - Allowance For Credit-Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Allowance for credit losses | |||
Balance, beginning of period | $ 44,014 | ||
Provision for credit losses | 7,817 | $ 1,981 | |
Loans charged to the allowance | (931) | $ (1,257) | |
Recoveries of loans previously charged off | 7 | 7 | 753 |
Balance, end of period | 51,838 | 32,102 | 44,014 |
Allowance for loan losses | |||
Balance, beginning of period | 31,344 | 31,344 | |
Provision for credit losses | 13,473 | ||
ACL Loans | |||
Provision for credit losses | 6,867 | 2,451 | |
Provision for credit losses, ACL Loans | 7,817 | 1,981 | |
Provision for credit losses, ACL-OBCE's | (900) | 500 | |
ASU 2016-13 | Impact from adoption of ASU | |||
Allowance for credit losses | |||
Balance, beginning of period | (299) | (299) | |
Mortgage warehouse lines of credit | |||
Allowance for credit losses | |||
Balance, beginning of period | 1,249 | ||
Provision for credit losses | 415 | (55) | |
Balance, end of period | 1,664 | 1,941 | 1,249 |
Allowance for loan losses | |||
Balance, beginning of period | 1,955 | 1,955 | |
Provision for credit losses | (747) | ||
ACL Loans | |||
Provision for credit losses, ACL Loans | 415 | (55) | |
Mortgage warehouse lines of credit | ASU 2016-13 | Impact from adoption of ASU | |||
Allowance for credit losses | |||
Balance, beginning of period | 41 | 41 | |
Residential real estate | |||
Allowance for credit losses | |||
Balance, beginning of period | 7,029 | ||
Provision for credit losses | 349 | 102 | |
Loans charged to the allowance | (4) | ||
Balance, end of period | 7,378 | 4,547 | 7,029 |
Allowance for loan losses | |||
Balance, beginning of period | 4,170 | 4,170 | |
Provision for credit losses | 2,588 | ||
ACL Loans | |||
Provision for credit losses, ACL Loans | 349 | 102 | |
Residential real estate | ASU 2016-13 | Impact from adoption of ASU | |||
Allowance for credit losses | |||
Balance, beginning of period | 275 | 275 | |
Multi-family financing | |||
Allowance for credit losses | |||
Balance, beginning of period | 16,781 | ||
Provision for credit losses | 3,070 | 527 | |
Balance, end of period | 19,851 | 15,131 | 16,781 |
Allowance for loan losses | |||
Balance, beginning of period | 14,084 | 14,084 | |
Provision for credit losses | 2,177 | ||
ACL Loans | |||
Provision for credit losses, ACL Loans | 3,070 | 527 | |
Multi-family financing | ASU 2016-13 | Impact from adoption of ASU | |||
Allowance for credit losses | |||
Balance, beginning of period | 520 | 520 | |
Healthcare financing | |||
Allowance for credit losses | |||
Balance, beginning of period | 9,882 | ||
Provision for credit losses | 1,871 | 1,018 | |
Balance, end of period | 11,753 | 5,618 | 9,882 |
Allowance for loan losses | |||
Balance, beginning of period | 4,461 | 4,461 | |
Provision for credit losses | 5,282 | ||
ACL Loans | |||
Provision for credit losses, ACL Loans | 1,871 | 1,018 | |
Healthcare financing | ASU 2016-13 | Impact from adoption of ASU | |||
Allowance for credit losses | |||
Balance, beginning of period | 139 | 139 | |
Commercial and commercial real estate | |||
Allowance for credit losses | |||
Balance, beginning of period | 8,326 | ||
Provision for credit losses | 2,149 | 431 | |
Loans charged to the allowance | (931) | (1,238) | |
Recoveries of loans previously charged off | 7 | 746 | |
Balance, end of period | 10,482 | 4,102 | 8,326 |
Allowance for loan losses | |||
Balance, beginning of period | 5,879 | 5,879 | |
Provision for credit losses | 4,216 | ||
ACL Loans | |||
Provision for credit losses, ACL Loans | 2,149 | 431 | |
Commercial and commercial real estate | ASU 2016-13 | Impact from adoption of ASU | |||
Allowance for credit losses | |||
Balance, beginning of period | (1,277) | (1,277) | |
Agricultural production and real estate | |||
Allowance for credit losses | |||
Balance, beginning of period | 565 | ||
Provision for credit losses | (22) | (42) | |
Balance, end of period | 543 | 597 | 565 |
Allowance for loan losses | |||
Balance, beginning of period | 657 | 657 | |
Provision for credit losses | (74) | ||
ACL Loans | |||
Provision for credit losses, ACL Loans | (22) | (42) | |
Agricultural production and real estate | ASU 2016-13 | Impact from adoption of ASU | |||
Allowance for credit losses | |||
Balance, beginning of period | (18) | (18) | |
Consumer and margin loans | |||
Allowance for credit losses | |||
Balance, beginning of period | 182 | ||
Provision for credit losses | (15) | ||
Loans charged to the allowance | (15) | ||
Recoveries of loans previously charged off | 7 | 7 | |
Balance, end of period | 167 | 166 | 182 |
Allowance for loan losses | |||
Balance, beginning of period | 138 | 138 | |
Provision for credit losses | 31 | ||
ACL Loans | |||
Provision for credit losses, ACL Loans | $ (15) | ||
Consumer and margin loans | ASU 2016-13 | Impact from adoption of ASU | |||
Allowance for credit losses | |||
Balance, beginning of period | $ 21 | $ 21 |
Loans and Allowance for Credi_5
Loans and Allowance for Credit Losses on Loans - Amortized cost basis and ACL (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | $ 8,627,048 | $ 7,470,872 | |
Allowance for credit losses on loans | 51,838 | 44,014 | $ 32,102 |
Collateral Dependent Loans | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 65,414 | ||
Allowance for credit losses on loans | 1,736 | ||
Real Estate | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 58,921 | ||
Accounts Receivable Or Equipment | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 4,986 | ||
Other Collateralized Assets | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 1,507 | ||
Mortgage warehouse lines of credit | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 604,445 | 464,785 | |
Allowance for credit losses on loans | 1,664 | 1,249 | 1,941 |
Residential real estate | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 1,215,252 | 1,178,401 | |
Allowance for credit losses on loans | 7,378 | 7,029 | 4,547 |
Residential real estate | Collateral Dependent Loans | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 240 | ||
Allowance for credit losses on loans | 38 | ||
Residential real estate | Real Estate | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 231 | ||
Residential real estate | Other Collateralized Assets | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 9 | ||
Multi-family financing | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 3,566,530 | 3,135,535 | |
Allowance for credit losses on loans | 19,851 | 16,781 | 15,131 |
Multi-family financing | Collateral Dependent Loans | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 36,760 | ||
Allowance for credit losses on loans | 184 | ||
Multi-family financing | Real Estate | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 36,760 | ||
Healthcare financing | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 1,941,204 | 1,604,341 | |
Allowance for credit losses on loans | 11,753 | 9,882 | 5,618 |
Healthcare financing | Collateral Dependent Loans | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 21,783 | ||
Allowance for credit losses on loans | 132 | ||
Healthcare financing | Real Estate | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 21,783 | ||
Commercial and commercial real estate | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 1,194,320 | 978,661 | |
Allowance for credit losses on loans | 10,482 | 8,326 | 4,102 |
Commercial and commercial real estate | Collateral Dependent Loans | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 6,479 | ||
Allowance for credit losses on loans | 1,381 | ||
Commercial and commercial real estate | Accounts Receivable Or Equipment | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 4,986 | ||
Commercial and commercial real estate | Other Collateralized Assets | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 1,493 | ||
Agricultural production and real estate | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 89,516 | 95,651 | |
Allowance for credit losses on loans | 543 | 565 | 597 |
Agricultural production and real estate | Collateral Dependent Loans | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 147 | ||
Allowance for credit losses on loans | 1 | ||
Agricultural production and real estate | Real Estate | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 147 | ||
Consumer and margin loans | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 15,781 | 13,498 | |
Allowance for credit losses on loans | 167 | $ 182 | $ 166 |
Consumer and margin loans | Collateral Dependent Loans | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | 5 | ||
Consumer and margin loans | Other Collateralized Assets | |||
Loans and Allowance for Credit Losses on Loans | |||
Amortized Cost Basis | $ 5 |
Loans and Allowance for Credi_6
Loans and Allowance for Credit Losses on Loans - Credit Risk Profile of Loan Portfolio (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | |
Credit risk profile of portfolio | |||
2023 | $ 2,475,328 | $ 529,794 | |
2022 | 997,674 | 2,650,175 | |
2021 | 354,135 | 929,997 | |
2020 | 80,929 | 309,324 | |
2019 | 26,535 | 77,794 | |
Prior | 49,623 | 70,923 | |
Revolving Loans | 3,486,648 | 4,059,041 | |
Loans | 7,470,872 | 8,627,048 | |
Loans | $ 931 | 1,257 | |
Pass | |||
Credit risk profile of portfolio | |||
2023 | 2,353,570 | 507,068 | |
2022 | 948,348 | 2,557,620 | |
2021 | 344,099 | 860,237 | |
2020 | 80,256 | 299,154 | |
2019 | 26,199 | 77,204 | |
Prior | 47,345 | 68,621 | |
Revolving Loans | 3,468,410 | 4,031,403 | |
Loans | 7,268,227 | 8,401,307 | |
Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2023 | 84,998 | 22,726 | |
2022 | 25,526 | 55,299 | |
2021 | 9,445 | 45,920 | |
2020 | 601 | 9,584 | |
2019 | 262 | 520 | |
Prior | 1,287 | 1,278 | |
Revolving Loans | 15,701 | 25,000 | |
Loans | 137,820 | 160,327 | |
Substandard | |||
Credit risk profile of portfolio | |||
2023 | 36,760 | ||
2022 | 23,800 | 37,256 | |
2021 | 591 | 23,840 | |
2020 | 72 | 586 | |
2019 | 74 | 70 | |
Prior | 991 | 1,024 | |
Revolving Loans | 2,537 | 2,638 | |
Loans | 64,825 | 65,414 | |
Mortgage warehouse lines of credit | |||
Credit risk profile of portfolio | |||
Revolving Loans | 464,785 | 604,445 | |
Loans | 464,785 | 604,445 | |
Mortgage warehouse lines of credit | Pass | |||
Credit risk profile of portfolio | |||
Revolving Loans | 464,785 | 604,445 | |
Loans | 464,785 | 604,445 | |
Residential real estate | |||
Credit risk profile of portfolio | |||
2023 | 13,344 | 3,207 | |
2022 | 8,192 | 13,097 | |
2021 | 24,708 | 8,339 | |
2020 | 3,559 | 24,856 | |
2019 | 1,796 | 3,535 | |
Prior | 12,006 | 13,509 | |
Revolving Loans | 1,114,796 | 1,148,709 | |
Loans | 1,178,401 | 1,215,252 | |
Loans | 4 | ||
Residential real estate | Pass | |||
Credit risk profile of portfolio | |||
2023 | 13,344 | 3,207 | |
2022 | 8,192 | 13,097 | |
2021 | 24,708 | 8,339 | |
2020 | 3,498 | 24,856 | |
2019 | 1,722 | 3,475 | |
Prior | 11,166 | 12,867 | |
Revolving Loans | 1,114,705 | 1,148,709 | |
Loans | 1,177,335 | 1,214,550 | |
Residential real estate | Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2020 | 61 | ||
2019 | 60 | ||
Prior | 668 | 402 | |
Revolving Loans | 91 | ||
Loans | 820 | 462 | |
Residential real estate | Substandard | |||
Credit risk profile of portfolio | |||
2019 | 74 | ||
Prior | 172 | 240 | |
Loans | 246 | 240 | |
Multi-family financing | |||
Credit risk profile of portfolio | |||
2023 | 1,281,687 | 382,298 | |
2022 | 544,823 | 1,291,015 | |
2021 | 208,829 | 510,614 | |
2020 | 32,349 | 164,813 | |
2019 | 4,416 | 32,201 | |
Prior | 7,229 | 11,347 | |
Revolving Loans | 1,056,202 | 1,174,242 | |
Loans | 3,135,535 | 3,566,530 | |
Multi-family financing | Pass | |||
Credit risk profile of portfolio | |||
2023 | 1,212,008 | 382,298 | |
2022 | 544,823 | 1,221,448 | |
2021 | 200,829 | 494,235 | |
2020 | 32,349 | 156,813 | |
2019 | 4,416 | 32,201 | |
Prior | 7,229 | 11,347 | |
Revolving Loans | 1,042,024 | 1,159,249 | |
Loans | 3,043,678 | 3,457,591 | |
Multi-family financing | Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2023 | 32,919 | ||
2022 | 32,807 | ||
2021 | 8,000 | 16,379 | |
2020 | 8,000 | ||
Revolving Loans | 14,178 | 14,993 | |
Loans | 55,097 | 72,179 | |
Multi-family financing | Substandard | |||
Credit risk profile of portfolio | |||
2023 | 36,760 | ||
2022 | 36,760 | ||
Loans | 36,760 | 36,760 | |
Healthcare financing | |||
Credit risk profile of portfolio | |||
2023 | 1,039,698 | 116,546 | |
2022 | 348,193 | 1,198,921 | |
2021 | 78,792 | 315,829 | |
2020 | 13,770 | 79,805 | |
2019 | 13,682 | ||
Revolving Loans | 123,888 | 216,421 | |
Loans | 1,604,341 | 1,941,204 | |
Healthcare financing | Pass | |||
Credit risk profile of portfolio | |||
2023 | 987,676 | 93,837 | |
2022 | 301,103 | 1,176,484 | |
2021 | 78,792 | 265,032 | |
2020 | 13,770 | 79,805 | |
2019 | 13,682 | ||
Revolving Loans | 123,888 | 207,521 | |
Loans | 1,505,229 | 1,836,361 | |
Healthcare financing | Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2023 | 52,022 | 22,709 | |
2022 | 25,307 | 22,437 | |
2021 | 29,014 | ||
Revolving Loans | 8,900 | ||
Loans | 77,329 | 83,060 | |
Healthcare financing | Substandard | |||
Credit risk profile of portfolio | |||
2022 | 21,783 | ||
2021 | 21,783 | ||
Loans | 21,783 | 21,783 | |
Commercial and commercial real estate | |||
Credit risk profile of portfolio | |||
2023 | 123,800 | 23,167 | |
2022 | 88,463 | 131,442 | |
2021 | 25,357 | 87,595 | |
2020 | 24,921 | 24,100 | |
2019 | 12,434 | 22,295 | |
Prior | 9,659 | 20,508 | |
Revolving Loans | 694,027 | 885,213 | |
Loans | 978,661 | 1,194,320 | |
Loans | $ 931 | 1,238 | |
Commercial and commercial real estate | Pass | |||
Credit risk profile of portfolio | |||
2023 | 123,757 | 23,150 | |
2022 | 86,282 | 130,905 | |
2021 | 23,803 | 85,065 | |
2020 | 24,730 | 22,411 | |
2019 | 12,335 | 22,109 | |
Prior | 8,765 | 19,553 | |
Revolving Loans | 690,114 | 881,494 | |
Loans | 969,786 | 1,184,687 | |
Commercial and commercial real estate | Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2023 | 43 | 17 | |
2022 | 164 | 41 | |
2021 | 963 | 473 | |
2020 | 119 | 1,103 | |
2019 | 99 | 116 | |
Prior | 228 | 323 | |
Revolving Loans | 1,376 | 1,081 | |
Loans | 2,992 | 3,154 | |
Commercial and commercial real estate | Substandard | |||
Credit risk profile of portfolio | |||
2022 | 2,017 | 496 | |
2021 | 591 | 2,057 | |
2020 | 72 | 586 | |
2019 | 70 | ||
Prior | 666 | 632 | |
Revolving Loans | 2,537 | 2,638 | |
Loans | 5,883 | 6,479 | |
Agricultural production and real estate | |||
Credit risk profile of portfolio | |||
2023 | 12,126 | 4,439 | |
2022 | 7,540 | 11,130 | |
2021 | 16,122 | 7,217 | |
2020 | 6,229 | 15,511 | |
2019 | 3,300 | 6,019 | |
Prior | 20,712 | 21,050 | |
Revolving Loans | 29,622 | 24,150 | |
Loans | 95,651 | 89,516 | |
Agricultural production and real estate | Pass | |||
Credit risk profile of portfolio | |||
2023 | 12,112 | 4,439 | |
2022 | 7,485 | 11,116 | |
2021 | 15,660 | 7,163 | |
2020 | 5,808 | 15,049 | |
2019 | 3,137 | 5,675 | |
Prior | 20,176 | 20,352 | |
Revolving Loans | 29,566 | 24,124 | |
Loans | 93,944 | 87,918 | |
Agricultural production and real estate | Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2023 | 14 | ||
2022 | 55 | 14 | |
2021 | 462 | 54 | |
2020 | 421 | 462 | |
2019 | 163 | 344 | |
Prior | 389 | 551 | |
Revolving Loans | 56 | 26 | |
Loans | 1,560 | 1,451 | |
Agricultural production and real estate | Substandard | |||
Credit risk profile of portfolio | |||
Prior | 147 | 147 | |
Loans | 147 | 147 | |
Consumer and margin loans | |||
Credit risk profile of portfolio | |||
2023 | 4,673 | 137 | |
2022 | 463 | 4,570 | |
2021 | 327 | 403 | |
2020 | 101 | 239 | |
2019 | 4,589 | 62 | |
Prior | 17 | 4,509 | |
Revolving Loans | 3,328 | 5,861 | |
Loans | 13,498 | 15,781 | |
Loans | 15 | ||
Consumer and margin loans | Pass | |||
Credit risk profile of portfolio | |||
2023 | 4,673 | 137 | |
2022 | 463 | 4,570 | |
2021 | 307 | 403 | |
2020 | 101 | 220 | |
2019 | 4,589 | 62 | |
Prior | 9 | 4,502 | |
Revolving Loans | 3,328 | 5,861 | |
Loans | 13,470 | 15,755 | |
Consumer and margin loans | Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2021 | 20 | ||
2020 | 19 | ||
Prior | 2 | 2 | |
Loans | 22 | 21 | |
Consumer and margin loans | Substandard | |||
Credit risk profile of portfolio | |||
Prior | 6 | 5 | |
Loans | $ 6 | $ 5 |
Loans and Allowance for Credi_7
Loans and Allowance for Credit Losses on Loans - Aging Analysis Of The Recorded Investment In Loans (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Aging analysis of loan portfolio | ||
Loans | $ 8,627,048 | $ 7,470,872 |
Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 83,491 | 39,752 |
30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 3,065 | 13,721 |
60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 15,923 | 176 |
Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 64,503 | 25,855 |
Current. | ||
Aging analysis of loan portfolio | ||
Loans | 8,543,557 | 7,431,120 |
Mortgage warehouse lines of credit | ||
Aging analysis of loan portfolio | ||
Loans | 604,445 | 464,785 |
Mortgage warehouse lines of credit | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 604,445 | 464,785 |
Residential real estate | ||
Aging analysis of loan portfolio | ||
Loans | 1,215,252 | 1,178,401 |
Residential real estate | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 5,900 | 4,477 |
Residential real estate | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 2,573 | 4,053 |
Residential real estate | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 2,409 | 152 |
Residential real estate | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 918 | 272 |
Residential real estate | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 1,209,352 | 1,173,924 |
Healthcare financing | ||
Aging analysis of loan portfolio | ||
Loans | 1,941,204 | 1,604,341 |
Healthcare financing | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 21,783 | 21,783 |
Healthcare financing | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 21,783 | 21,783 |
Healthcare financing | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 1,919,421 | 1,582,558 |
Multi-family financing | ||
Aging analysis of loan portfolio | ||
Loans | 3,566,530 | 3,135,535 |
Multi-family financing | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 49,735 | |
Multi-family financing | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 12,975 | |
Multi-family financing | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 36,760 | |
Multi-family financing | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 3,516,795 | 3,135,535 |
Commercial and commercial real estate | ||
Aging analysis of loan portfolio | ||
Loans | 1,194,320 | 978,661 |
Commercial and commercial real estate | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 4,482 | 8,537 |
Commercial and commercial real estate | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 209 | 4,759 |
Commercial and commercial real estate | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 495 | |
Commercial and commercial real estate | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 3,778 | 3,778 |
Commercial and commercial real estate | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 1,189,838 | 970,124 |
Agricultural production and real estate | ||
Aging analysis of loan portfolio | ||
Loans | 89,516 | 95,651 |
Agricultural production and real estate | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 1,521 | 4,903 |
Agricultural production and real estate | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 236 | 4,903 |
Agricultural production and real estate | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 43 | |
Agricultural production and real estate | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 1,242 | |
Agricultural production and real estate | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 87,995 | 90,748 |
Consumer and margin loans | ||
Aging analysis of loan portfolio | ||
Loans | 15,781 | 13,498 |
Consumer and margin loans | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 70 | 52 |
Consumer and margin loans | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 47 | 6 |
Consumer and margin loans | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 1 | 24 |
Consumer and margin loans | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 22 | 22 |
Consumer and margin loans | Current. | ||
Aging analysis of loan portfolio | ||
Loans | $ 15,711 | $ 13,446 |
Loans and Allowance for Credi_8
Loans and Allowance for Credit Losses on Loans - Non Accrual Loans and Loans Past Due 90 Days Or More and Still Accruing (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Loan portfolio past due loans | ||
Nonaccrual | $ 63,292 | $ 26,571 |
Total Loans Greater than 90 Days & Accruing | 2,000 | 112 |
Residential real estate | ||
Loan portfolio past due loans | ||
Nonaccrual | 240 | 245 |
Total Loans Greater than 90 Days & Accruing | 741 | 96 |
Multi-family financing | ||
Loan portfolio past due loans | ||
Nonaccrual | 36,760 | |
Healthcare financing | ||
Loan portfolio past due loans | ||
Nonaccrual | 21,783 | 21,783 |
Commercial and commercial real estate | ||
Loan portfolio past due loans | ||
Nonaccrual | 4,357 | 4,390 |
Agricultural production and real estate | ||
Loan portfolio past due loans | ||
Nonaccrual | 147 | 147 |
Total Loans Greater than 90 Days & Accruing | 1,242 | |
Consumer and margin loans | ||
Loan portfolio past due loans | ||
Nonaccrual | 5 | 6 |
Total Loans Greater than 90 Days & Accruing | $ 17 | $ 16 |
Loans and Allowance for Credi_9
Loans and Allowance for Credit Losses on Loans - Modified loans (Details) - Payment Delay $ in Thousands | Mar. 31, 2023 USD ($) |
Loan portfolio past due loans | |
Modified loans | $ 4,357 |
Commercial and commercial real estate | |
Loan portfolio past due loans | |
Modified loans | $ 4,357 |
Loans and Allowance for Cred_10
Loans and Allowance for Credit Losses on Loans - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 15 Months Ended | ||
Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) item | Mar. 31, 2021 item | Dec. 31, 2022 USD ($) | Mar. 31, 2022 loan | |
Loans and Leases Receivable Disclosure [Line Items] | |||||
Net gain (loss) on sale of loans | $ 6,733 | $ 17,965 | |||
Purchases of available for sale securities | 353,249 | $ 20,002 | |||
Number of loans restructured defaulted | item | 0 | 0 | |||
Servicing rights | 143,867 | $ 146,248 | |||
Purchase of loans | 98,791 | $ 40,672 | $ 40,700 | ||
Payments to held to maturity security | 1,540 | ||||
Provision for credit losses | 7,817 | 1,981 | |||
Multi-family financing | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Provision for credit losses | 3,070 | 527 | |||
Residential real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Number of loans in the process of foreclosure | loan | 0 | ||||
Provision for credit losses | $ 349 | $ 102 |
Variable Interest Entities (V_3
Variable Interest Entities (VIEs) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Variable Interest Entities (VIEs) | |||
Total Assets | $ 14,240,966 | $ 12,615,227 | $ 9,650,592 |
Total Liabilities | 12,735,282 | 11,155,488 | |
Maximum Exposure to Loss | 867,100 | 871,800 | |
Single Family and Multi-Family Debt Financing Investments | Variable Interest Entity, Not Primary Beneficiary | |||
Variable Interest Entities (VIEs) | |||
Total Assets | 60,466 | 52,125 | |
Total Liabilities | 25,207 | 25,564 | |
Maximum Exposure to Loss | $ 60,466 | $ 52,125 |
Regulatory Matters (Details)
Regulatory Matters (Details) $ in Thousands | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Company | ||
Total Capital (to risk-weighted assets) | ||
Total Capital (to risk-weighted assets), Actual, Capital Amount | $ 1,558,187 | $ 1,507,968 |
Total Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.124 | 0.122 |
Total Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount | $ 1,006,425 | $ 992,883 |
Total Capital (to risk weighted assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent) | 0.080 | 0.080 |
Tier I Capital (to risk-weighted assets) | ||
Tier I Capital, (to risk-weighted assets), Actual, Capital Amount | $ 1,495,800 | $ 1,452,456 |
Tier I Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.119 | 0.117 |
Tier I Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount | $ 754,818 | $ 744,662 |
Tier I Capital (to risk weighted assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent) | 0.060 | 0.060 |
Common Equity Tier I Capital 1 (to risk-weighted assets) | ||
Common Equity Tier I Capital 1, Actual, Capital Amount | $ 996,192 | $ 952,848 |
Common Equity Tier I Capital 1 (to risk weighted assets), Ratio (as a percent) | 0.079 | 0.077 |
Common Equity Tier I Capital 1, Minimum Amount Required for Adequately Capitalized, Capital Amount | $ 566,114 | $ 558,497 |
Common Equity Tier I Capital 1 (to risk weighted assets, Minimum Amount Required for Adequately Capitalized, Ratio (as a percent) | 0.045 | 0.045 |
Tier 1 Capital (to average assets) | ||
Tier 1 Capital, Actual, Capital Amount | $ 1,495,800 | $ 1,452,456 |
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) | 0.116 | 0.117 |
Tier 1 Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount | $ 514,725 | $ 497,604 |
Tier 1 Capital (to average assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent) | 0.040 | 0.040 |
Merchants Bank | ||
Total Capital (to risk-weighted assets) | ||
Total Capital (to risk-weighted assets), Actual, Capital Amount | $ 1,488,469 | $ 1,427,738 |
Total Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.121 | 0.117 |
Total Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount | $ 986,980 | $ 975,853 |
Total Capital (to risk weighted assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent) | 0.080 | 0.080 |
Total capital, Minimum Amount To Be Well Capitalized, Capital Amount | $ 1,233,725 | $ 1,219,817 |
Total Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.100 | 0.100 |
Tier I Capital (to risk-weighted assets) | ||
Tier I Capital, (to risk-weighted assets), Actual, Capital Amount | $ 1,426,815 | $ 1,372,941 |
Tier I Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.116 | 0.113 |
Tier I Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount | $ 740,235 | $ 731,890 |
Tier I Capital (to risk weighted assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent) | 0.060 | 0.060 |
Tier I Capital, Minimum Amount To Be Well Capitalized, Capital Amount | $ 986,980 | $ 975,853 |
Tier I Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.080 | 0.080 |
Common Equity Tier I Capital 1 (to risk-weighted assets) | ||
Common Equity Tier I Capital 1, Actual, Capital Amount | $ 1,426,815 | $ 1,372,941 |
Common Equity Tier I Capital 1 (to risk weighted assets), Ratio (as a percent) | 0.116 | 0.113 |
Common Equity Tier I Capital 1, Minimum Amount Required for Adequately Capitalized, Capital Amount | $ 555,176 | $ 548,917 |
Common Equity Tier I Capital 1 (to risk weighted assets, Minimum Amount Required for Adequately Capitalized, Ratio (as a percent) | 0.045 | 0.045 |
Common Equity Tier I Capital 1, Minimum Amount To Be Well Capitalized, Capital Amount | $ 801,921 | $ 792,881 |
Common Equity Tier I Capital 1 (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.065 | 0.065 |
Tier 1 Capital (to average assets) | ||
Tier 1 Capital, Actual, Capital Amount | $ 1,426,815 | $ 1,372,941 |
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) | 0.113 | 0.113 |
Tier 1 Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount | $ 503,987 | $ 487,511 |
Tier 1 Capital (to average assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent) | 0.040 | 0.040 |
Tier 1 Capital, Minimum Amount To Be Well Capitalized, Capital Amount | $ 629,983 | $ 609,389 |
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.050 | 0.050 |
FMBI | ||
Total Capital (to risk-weighted assets) | ||
Total Capital (to risk-weighted assets), Actual, Capital Amount | $ 36,044 | $ 34,769 |
Total Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.114 | 0.113 |
Total Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount | $ 25,309 | $ 24,703 |
Total Capital (to risk weighted assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent) | 0.080 | 0.080 |
Total capital, Minimum Amount To Be Well Capitalized, Capital Amount | $ 31,636 | $ 30,878 |
Total Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.100 | 0.100 |
Tier I Capital (to risk-weighted assets) | ||
Tier I Capital, (to risk-weighted assets), Actual, Capital Amount | $ 35,311 | $ 34,054 |
Tier I Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.112 | 0.110 |
Tier I Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount | $ 18,981 | $ 18,527 |
Tier I Capital (to risk weighted assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent) | 0.060 | 0.060 |
Tier I Capital, Minimum Amount To Be Well Capitalized, Capital Amount | $ 25,309 | $ 24,703 |
Tier I Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.080 | 0.080 |
Common Equity Tier I Capital 1 (to risk-weighted assets) | ||
Common Equity Tier I Capital 1, Actual, Capital Amount | $ 35,311 | $ 34,054 |
Common Equity Tier I Capital 1 (to risk weighted assets), Ratio (as a percent) | 0.112 | 0.110 |
Common Equity Tier I Capital 1, Minimum Amount Required for Adequately Capitalized, Capital Amount | $ 14,236 | $ 13,895 |
Common Equity Tier I Capital 1 (to risk weighted assets, Minimum Amount Required for Adequately Capitalized, Ratio (as a percent) | 0.045 | 0.045 |
Common Equity Tier I Capital 1, Minimum Amount To Be Well Capitalized, Capital Amount | $ 20,563 | $ 20,071 |
Common Equity Tier I Capital 1 (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.065 | 0.065 |
Tier 1 Capital (to average assets) | ||
Tier 1 Capital, Actual, Capital Amount | $ 35,311 | $ 34,054 |
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) | 0.106 | 0.107 |
Tier 1 Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount | $ 13,347 | $ 12,702 |
Tier 1 Capital (to average assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent) | 0.040 | 0.040 |
Tier 1 Capital, Minimum Amount To Be Well Capitalized, Capital Amount | $ 16,684 | $ 15,878 |
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.050 | 0.050 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||
Net swap gains (losses) | $ 224 | ||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Sales of Loans, Net | Gain (Loss) on Sales of Loans, Net | |
Pledged in collateral | $ 0 | $ 0 | |
Derivative assets | |||
Derivative Financial Instruments | |||
Derivative assets, fair value | 1,914 | 3,104 | |
Derivative liabilities | |||
Derivative Financial Instruments | |||
Derivative liabilities, fair value | 239 | 75 | |
Derivative | |||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||
Net swap gains (losses) | $ 113 | $ 2,268 | |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Noninterest Income, Other | Noninterest Income, Other | |
Interest rate lock commitments | |||
Derivative Financial Instruments | |||
Notional amount | $ 32,018 | 8,759 | |
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||
Net swap gains (losses) | 209 | $ (882) | |
Interest rate lock commitments | Derivative assets | |||
Derivative Financial Instruments | |||
Derivative assets, fair value | 218 | 28 | |
Interest rate lock commitments | Derivative liabilities | |||
Derivative Financial Instruments | |||
Derivative liabilities, fair value | 4 | 23 | |
Forward contracts | |||
Derivative Financial Instruments | |||
Notional amount | 29,317 | 13,096 | |
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||
Net swap gains (losses) | (96) | 3,150 | |
Forward contracts | Derivative assets | |||
Derivative Financial Instruments | |||
Derivative assets, fair value | 2 | 46 | |
Forward contracts | Derivative liabilities | |||
Derivative Financial Instruments | |||
Derivative liabilities, fair value | 235 | 52 | |
Interest rate swaps | |||
Derivative Financial Instruments | |||
Notional amount | 57,566 | 57,574 | |
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||
Net swap gains (losses) | (1,336) | ||
Interest rate swaps | Derivative assets | |||
Derivative Financial Instruments | |||
Derivative assets, fair value | 1,694 | 3,030 | |
Interest rate swaps (back-to-back) | |||
Derivative Financial Instruments | |||
Notional amount | 77,354 | 77,495 | |
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||
Gross swap gains | 580 | 496 | |
Gross swap losses | 580 | $ 496 | |
Interest rate swaps (back-to-back) | Derivative assets | |||
Derivative Financial Instruments | |||
Derivative assets, fair value | 2,461 | 3,041 | |
Interest rate swaps (back-to-back) | Derivative liabilities | |||
Derivative Financial Instruments | |||
Derivative liabilities, fair value | 2,461 | $ 3,041 | |
Loans held for sale | |||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||
Net swap gains (losses) | $ 1,560 |
Disclosures about Fair Value _3
Disclosures about Fair Value of Assets and Liabilities - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Disclosures about Fair Value of Assets and Liabilities | ||
Mortgage loans in process of securitization | $ 197,074 | $ 154,194 |
Securities available for sale | 679,518 | 323,337 |
Loans held for sale | 85,516 | 82,192 |
Servicing rights | 143,867 | 146,248 |
Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Mortgage loans in process of securitization | 197,074 | 154,194 |
Loans held for sale | 85,516 | 82,192 |
Servicing rights | 143,867 | 146,248 |
Recurring | Interest rate lock commitments | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 218 | 28 |
Derivative liabilities | 4 | 23 |
Recurring | Forward contracts | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 2 | 46 |
Derivative liabilities | 235 | 52 |
Recurring | Interest rate swaps | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 1,694 | 3,030 |
Recurring | Interest rate swaps (back-to-back) | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 2,461 | 3,041 |
Derivative liabilities | 2,461 | 3,041 |
Level 2 | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Mortgage loans in process of securitization | 197,074 | 154,194 |
Loans held for sale | 85,516 | 82,192 |
Level 2 | Recurring | Forward contracts | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 2 | 46 |
Derivative liabilities | 235 | 52 |
Level 2 | Recurring | Interest rate swaps | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 1,694 | 3,030 |
Level 2 | Recurring | Interest rate swaps (back-to-back) | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 2,461 | 3,041 |
Derivative liabilities | 2,461 | 3,041 |
Level 3 | Interest rate lock commitments | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 218 | 28 |
Derivative liabilities | 4 | 23 |
Level 3 | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Servicing rights | 143,867 | 146,248 |
Level 3 | Recurring | Interest rate lock commitments | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 218 | 28 |
Derivative liabilities | 4 | 23 |
Treasury notes | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Securities available for sale | 175,099 | 36,280 |
Treasury notes | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Securities available for sale | 175,099 | 36,280 |
Treasury notes | Level 1 | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Securities available for sale | 175,099 | 36,280 |
Federal agencies | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Securities available for sale | 290,331 | 271,890 |
Federal agencies | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Securities available for sale | 290,331 | 271,890 |
Federal agencies | Level 2 | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Securities available for sale | 290,331 | 271,890 |
Mortgage-backed - Government-sponsored entity (GSE) | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Securities available for sale | 214,088 | 15,167 |
Mortgage-backed - Government-sponsored entity (GSE) | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Securities available for sale | 214,088 | 15,167 |
Mortgage-backed - Government-sponsored entity (GSE) | Level 2 | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Securities available for sale | $ 214,088 | $ 15,167 |
Disclosures about Fair Value _4
Disclosures about Fair Value of Assets and Liabilities - Reconciliation of Unobservable Inputs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative liabilities | Interest rate lock commitments | ||
Reconciliation of significant unobservable inputs, liabilities: | ||
Balance, beginning of period | $ 23 | $ 41 |
Changes in fair value | (19) | 730 |
Balance, end of period | 4 | 771 |
Servicing rights. | ||
Reconciliation of significant unobservable inputs, assets: | ||
Balance, beginning of period | 146,248 | 110,348 |
Additions | ||
Originated servicing | 2,173 | 5,792 |
Subtractions | ||
Paydowns | (1,698) | (2,749) |
Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model | (2,856) | 7,645 |
Balance, end of period | 143,867 | 121,036 |
Derivative assets | Interest rate lock commitments | ||
Reconciliation of significant unobservable inputs, assets: | ||
Balance, beginning of period | 28 | 264 |
Subtractions | ||
Changes in fair value | 190 | (152) |
Balance, end of period | $ 218 | $ 112 |
Disclosures about Fair Value _5
Disclosures about Fair Value of Assets and Liabilities - Assets and Liabilities Measured at Fair Value on Nonrecurring Basis (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Nonrecurring | |
Disclosures about Fair Value of Assets and Liabilities | |
Impaired loans (collateral-dependent) | $ 4,465 |
Level 3 | |
Disclosures about Fair Value of Assets and Liabilities | |
Impaired loans (collateral-dependent) | 4,465 |
Level 3 | Nonrecurring | |
Disclosures about Fair Value of Assets and Liabilities | |
Impaired loans (collateral-dependent) | $ 4,465 |
Disclosures about Fair Value _6
Disclosures about Fair Value of Assets and Liabilities - Quantitative Information about Unobservable Inputs (Details) $ in Thousands | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Quantitative information about unobservable inputs | ||
Servicing rights | $ 143,867 | $ 146,248 |
Level 3 | ||
Quantitative information about unobservable inputs | ||
Collateral-dependent impaired loans | 4,465 | |
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | ||
Quantitative information about unobservable inputs | ||
Servicing rights | $ 5,083 | $ 4,632 |
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | Discount Rate | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.16 | 0.16 |
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | Constant Prepayment Rate | Minimum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.03 | 0.03 |
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | Constant Prepayment Rate | Maximum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.12 | 0.12 |
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | Constant Prepayment Rate | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.08 | 0.08 |
Level 3 | Servicing rights | Single Family | ||
Quantitative information about unobservable inputs | ||
Servicing rights | $ 29,078 | $ 29,926 |
Level 3 | Servicing rights | Single Family | Discount Rate | Minimum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.09 | 0.09 |
Level 3 | Servicing rights | Single Family | Discount Rate | Maximum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.10 | 0.10 |
Level 3 | Servicing rights | Single Family | Discount Rate | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.09 | 0.09 |
Level 3 | Servicing rights | Single Family | Constant Prepayment Rate | Minimum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.07 | 0.07 |
Level 3 | Servicing rights | Single Family | Constant Prepayment Rate | Maximum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.10 | 0.10 |
Level 3 | Servicing rights | Single Family | Constant Prepayment Rate | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.07 | 0.07 |
Level 3 | Servicing rights | Multi-family | ||
Quantitative information about unobservable inputs | ||
Servicing rights | $ 109,706 | $ 111,690 |
Level 3 | Servicing rights | Multi-family | Discount Rate | Minimum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.08 | 0.08 |
Level 3 | Servicing rights | Multi-family | Discount Rate | Maximum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.13 | 0.13 |
Level 3 | Servicing rights | Multi-family | Discount Rate | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.09 | 0.09 |
Level 3 | Servicing rights | Multi-family | Constant Prepayment Rate | Minimum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0 | 0 |
Level 3 | Servicing rights | Multi-family | Constant Prepayment Rate | Maximum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.39 | 0.39 |
Level 3 | Servicing rights | Multi-family | Constant Prepayment Rate | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.08 | 0.08 |
Level 3 | Collateral-dependent impaired loans | Measurement Input, Maturity | Minimum | ||
Quantitative information about unobservable inputs | ||
Marketability discount (as a percent) | 0.04 | |
Level 3 | Collateral-dependent impaired loans | Measurement Input, Maturity | Maximum | ||
Quantitative information about unobservable inputs | ||
Marketability discount (as a percent) | 0.54 | |
Level 3 | Collateral-dependent impaired loans | Measurement Input, Maturity | Weighted average | ||
Quantitative information about unobservable inputs | ||
Marketability discount (as a percent) | 0.05 | |
Level 3 | Interest rate lock commitments | ||
Quantitative information about unobservable inputs | ||
Derivative assets | $ 218 | $ 28 |
Derivative liabilities | $ 4 | $ 23 |
Level 3 | Interest rate lock commitments | Measurement Input, Maturity | Minimum | ||
Quantitative information about unobservable inputs | ||
Loan closing rates (as a percent) | 0.51 | 0.60 |
Loan closing rates (as a percent) | 0.51 | 0.60 |
Level 3 | Interest rate lock commitments | Measurement Input, Maturity | Maximum | ||
Quantitative information about unobservable inputs | ||
Loan closing rates (as a percent) | 0.99 | 0.87 |
Loan closing rates (as a percent) | 0.99 | 0.87 |
Level 3 | Interest rate lock commitments | Measurement Input, Maturity | Weighted average | ||
Quantitative information about unobservable inputs | ||
Loan closing rates (as a percent) | 0.75 | 0.77 |
Loan closing rates (as a percent) | 0.75 | 0.77 |
Disclosures about Fair Value _7
Disclosures about Fair Value of Assets and Liabilities - Carrying Value and Estimated Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Financial assets: | ||
Held to maturity securities, fair value | $ 1,106,582 | $ 1,118,966 |
Loans held for sale | 85,516 | 82,192 |
Carrying value per balance sheet | ||
Financial assets: | ||
Cash and cash equivalents | 369,586 | 226,164 |
Securities purchased under agreements to resell | 3,438 | 3,464 |
Held to maturity securities, fair value | 1,104,835 | 1,119,078 |
FHLB stock | 39,130 | 39,130 |
Loans held for sale | 2,769,734 | 2,828,384 |
Loans receivable, net | 8,575,210 | 7,426,858 |
Interest receivable | 64,282 | 56,262 |
Financial liabilities: | ||
Deposits | 11,345,231 | 10,071,345 |
Short-term subordinated debt | 21,000 | 21,000 |
FHLB advances | 859,211 | 859,392 |
Other borrowing | 200,000 | 50,000 |
Credit linked notes | 153,551 | |
Interest payable | 32,605 | 23,384 |
Estimated fair value | ||
Financial assets: | ||
Cash and cash equivalents | 369,586 | 226,164 |
Securities purchased under agreements to resell | 3,438 | 3,464 |
Held to maturity securities, fair value | 1,106,582 | 1,118,966 |
FHLB stock | 39,130 | 39,130 |
Loans held for sale | 2,769,734 | 2,828,384 |
Loans receivable, net | 8,553,015 | 7,431,731 |
Interest receivable | 64,282 | 56,262 |
Financial liabilities: | ||
Deposits | 11,343,744 | 10,064,941 |
Short-term subordinated debt | 21,000 | 21,000 |
FHLB advances | 858,957 | 858,984 |
Other borrowing | 200,000 | 50,000 |
Credit linked notes | 154,520 | |
Interest payable | 32,605 | 23,384 |
Level 1 | Estimated fair value | ||
Financial assets: | ||
Cash and cash equivalents | 369,586 | 226,164 |
Financial liabilities: | ||
Deposits | 7,208,222 | 7,082,056 |
Level 2 | Estimated fair value | ||
Financial assets: | ||
Securities purchased under agreements to resell | 3,438 | 3,464 |
Held to maturity securities, fair value | 239,795 | 247,182 |
FHLB stock | 39,130 | 39,130 |
Loans held for sale | 2,769,734 | 2,828,384 |
Interest receivable | 64,282 | 56,262 |
Financial liabilities: | ||
Deposits | 4,135,522 | 2,982,885 |
Short-term subordinated debt | 21,000 | 21,000 |
FHLB advances | 858,957 | 858,984 |
Other borrowing | 200,000 | 50,000 |
Credit linked notes | 154,520 | |
Interest payable | 32,605 | 23,384 |
Level 3 | Estimated fair value | ||
Financial assets: | ||
Held to maturity securities, fair value | 866,787 | 871,784 |
Loans receivable, net | $ 8,553,015 | $ 7,431,731 |
Leases - Other (Details)
Leases - Other (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Leases | ||
Operating lease right-of-use assets | $ 10,483 | $ 10,969 |
Operating lease liabilities | $ 11,644 | $ 11,992 |
Maximum | ||
Leases | ||
Lease period | 11 years | |
Minimum | ||
Leases | ||
Lease period | 1 year |
Leases - Balance sheet, Income
Leases - Balance sheet, Income Statement and Cash Flow Detail Regarding Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Leases. | ||
Operating lease right-of-of use asset (in other assets) | $ 10,483 | $ 10,969 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets and Receivables | Other Assets and Receivables |
Operating lease liability (in other liabilities) | $ 11,644 | $ 11,992 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. | Other Liabilities. |
Weighted average remaining lease term (years) | 6 years 3 months 18 days | 6 years 6 months |
Weighted average discount rate | 2.68% | 2.65% |
Maturities of lease liabilities | ||
One year or less | $ 1,731 | $ 2,181 |
Year two | 2,345 | 2,321 |
Year three | 1,881 | 1,881 |
Year four | 1,911 | 1,911 |
Year five | 1,853 | 1,853 |
Thereafter | 2,902 | 2,902 |
Total future minimum lease payments | 12,623 | 13,049 |
Less: imputed interest | 979 | 1,057 |
Total | 11,644 | 11,992 |
Components of lease expense: | ||
Operating lease cost (in occupancy and equipment expense) | 583 | 367 |
Operating cash flows from operating leases | $ 426 | $ 283 |
Deposits - Components (Details)
Deposits - Components (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Noninterest-bearing deposits | ||
Total noninterest-bearing deposits | $ 313,733 | $ 326,875 |
Interest-bearing deposits | ||
Demand deposits | 3,843,282 | 3,720,363 |
Savings deposits | 3,051,207 | 3,034,818 |
Certificates of deposit | 4,137,009 | 2,989,289 |
Interest-bearing Deposit Liabilities | 11,031,498 | 9,744,470 |
Total deposits | $ 11,345,231 | $ 10,071,345 |
Deposits - Maturities of deposi
Deposits - Maturities of deposits (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Deposits | ||
Due within one year | $ 4,004,937 | |
Due in one year to two years | 90,668 | |
Due in two years to three years | 39,683 | |
Due in three years to four years | 1,114 | |
Due in four years to five years | 585 | |
Due in five years to six years | 22 | |
Total time deposits | $ 4,137,009 | $ 2,989,289 |
Deposits - Brokered deposits (D
Deposits - Brokered deposits (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Deposits | ||
Brokered certificates of deposit | $ 3,679,084 | $ 2,681,198 |
Brokered savings deposits | 51,076 | 81,532 |
Brokered deposit on demand accounts | 13 | |
Total brokered deposits | $ 3,730,160 | $ 2,762,743 |
Borrowings - Components (Detail
Borrowings - Components (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Borrowings | ||
Borrowings | $ 1,233,762 | $ 930,392 |
Federal Reserve discount window borrowings | ||
Borrowings | ||
Borrowings | 200,000 | 20,000 |
Short-Term Subordinated Debt | ||
Borrowings | ||
Borrowings | 21,000 | 21,000 |
FHLB Advances | ||
Borrowings | ||
Borrowings | 859,211 | 859,392 |
American Financial Exchange borrowing | ||
Borrowings | ||
Borrowings | $ 30,000 | |
Credit linked notes | ||
Borrowings | ||
Borrowings | $ 153,551 |
Borrowings - Other (Details)
Borrowings - Other (Details) - Credit linked notes - USD ($) $ in Millions | 3 Months Ended | |
Mar. 30, 2023 | Mar. 31, 2023 | |
Debt | ||
Notes issued | $ 158.1 | $ 158.1 |
Proceeds from notes and bonds payable issued | 153.5 | |
Principal repayment of notes | $ 1,100 | |
Variable interest rate, basis points spread over variable reference rate (as a percent) | 1% | |
Effective interest rate (as a percent) | 21.50% | |
Percentage of effective interest rate on restricted proceeds from transaction | 4.50% | |
Percentage of net effective interest rate on restricted proceeds from transaction | 17% | |
Restricted Cash | ||
Debt | ||
Debt instrument, Collateral amount | $ 20.5 | |
Short term Treasury Securities | ||
Debt | ||
Debt instrument, Collateral amount | $ 137.6 | |
SOFR | ||
Debt | ||
Effective interest rate (as a percent) | 15.50% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net Income | ||
Net income | $ 54,955 | $ 50,142 |
Dividends on preferred stock | (8,667) | (5,728) |
Net Income Allocated to Common Shareholders | $ 46,288 | $ 44,414 |
Weighted-Average Shares | ||
Weighted average shares - Basic | 43,179,604 | 43,190,066 |
Effect of dilutive securities-restricted stock awards | 111,175 | 169,968 |
Weighted average shares - diluted | 43,290,779 | 43,360,034 |
Per Share Amount | ||
Basic Earnings Per Share | $ 1.07 | $ 1.03 |
Diluted Earnings Per Share | $ 1.07 | $ 1.02 |
Share-Based Payment Plans - Inc
Share-Based Payment Plans - Incentive Plan (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2018 | |
Non executive directors | ||||
Plan disclosures | ||||
Shares issued | 2,863 | 2,055 | ||
Value of shares available for issuance for compensation related to annual fees | $ 50,000 | $ 10,000 | ||
2017 Plan | Restricted Stock | ||||
Plan disclosures | ||||
Shares issued | 84,335 | 64,962 |
Share-Based Payment Plans - ESO
Share-Based Payment Plans - ESOP (Details) - ESOP - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Employee Stock Ownership Plan | ||
Expense recognized for the contribution to the plan | $ 810,000 | $ 653,000 |
Shares contributed to the plan | 33,293 | 20,709 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Segment Information | |||
Interest income | $ 211,294 | $ 76,012 | |
Interest expense | 110,601 | 10,287 | |
Net Interest Income | 100,693 | 65,725 | |
Provision for credit losses | 6,867 | 2,451 | |
Net Interest Income After Provision for Credit Losses | 93,826 | 63,274 | |
Noninterest income | 14,264 | 34,597 | |
Noninterest expense | 34,772 | 31,033 | |
Income Before Income Taxes | 73,318 | 66,838 | |
Income taxes | 18,363 | 16,696 | |
Net Income | 54,955 | 50,142 | |
Total assets | 14,240,966 | 9,650,592 | $ 12,615,227 |
Other | |||
Segment Information | |||
Interest income | 1,144 | 1,701 | |
Interest expense | (1,719) | (251) | |
Net Interest Income | 2,863 | 1,952 | |
Net Interest Income After Provision for Credit Losses | 2,863 | 1,952 | |
Noninterest income | (2,177) | (1,638) | |
Noninterest expense | 7,216 | 5,002 | |
Income Before Income Taxes | (6,530) | (4,688) | |
Income taxes | (1,571) | (1,415) | |
Net Income | (4,959) | (3,273) | |
Total assets | 150,695 | 83,456 | |
Multifamily | Operating Segments | |||
Segment Information | |||
Interest income | 1,106 | 257 | |
Net Interest Income | 1,106 | 257 | |
Net Interest Income After Provision for Credit Losses | 1,106 | 257 | |
Noninterest income | 16,597 | 32,186 | |
Noninterest expense | 14,631 | 16,531 | |
Income Before Income Taxes | 3,072 | 15,912 | |
Income taxes | 1,106 | 4,420 | |
Net Income | 1,966 | 11,492 | |
Total assets | 341,487 | 293,286 | |
Mortgage Warehousing | Operating Segments | |||
Segment Information | |||
Interest income | 42,318 | 20,329 | |
Interest expense | 27,794 | 2,021 | |
Net Interest Income | 14,524 | 18,308 | |
Provision for credit losses | 1,364 | (207) | |
Net Interest Income After Provision for Credit Losses | 13,160 | 18,515 | |
Noninterest income | 1,033 | 1,860 | |
Noninterest expense | 2,755 | 2,926 | |
Income Before Income Taxes | 11,438 | 17,449 | |
Income taxes | 2,797 | 4,290 | |
Net Income | 8,641 | 13,159 | |
Total assets | 3,318,491 | 2,863,907 | |
Banking | Operating Segments | |||
Segment Information | |||
Interest income | 166,726 | 53,725 | |
Interest expense | 84,526 | 8,517 | |
Net Interest Income | 82,200 | 45,208 | |
Provision for credit losses | 5,503 | 2,658 | |
Net Interest Income After Provision for Credit Losses | 76,697 | 42,550 | |
Noninterest income | (1,189) | 2,189 | |
Noninterest expense | 10,170 | 6,574 | |
Income Before Income Taxes | 65,338 | 38,165 | |
Income taxes | 16,031 | 9,401 | |
Net Income | 49,307 | 28,764 | |
Total assets | $ 10,430,293 | $ 6,409,943 |