Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 01, 2024 | Jun. 30, 2023 | |
Document Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-38258 | ||
Entity Registrant Name | MERCHANTS BANCORP | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 655.5 | ||
Entity Common Stock, Shares Outstanding | 43,331,304 | ||
Auditor Name | FORVIS, LLP | ||
Auditor Firm ID | 686 | ||
Auditor Location | Indianapolis, Indiana | ||
Entity Central Index Key | 0001629019 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
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 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and due from banks | $ 15,592 | $ 22,170 |
Interest-earning demand accounts | 568,830 | 203,994 |
Cash and cash equivalents | 584,422 | 226,164 |
Securities purchased under agreements to resell | 3,349 | 3,464 |
Mortgage loans in process of securitization | 110,599 | 154,194 |
Securities available for sale | 1,113,687 | 323,337 |
Securities held to maturity ($1,203,535 and $1,118,966 at fair value, respectively) | 1,204,217 | 1,119,078 |
Federal Home Loan Bank (FHLB) stock | 48,578 | 39,130 |
Loans held for sale (includes $86,663 and $82,192 at fair value, respectively) | 3,144,756 | 2,910,576 |
Loans receivable, net of allowance for credit losses on loans of $71,752 and $44,014, respectively | 10,127,801 | 7,426,858 |
Premises and equipment, net | 42,342 | 35,438 |
Servicing rights | 158,457 | 146,248 |
Interest receivable | 91,346 | 56,262 |
Goodwill | 15,845 | 15,845 |
Intangible assets, net | 742 | 1,186 |
Other assets and receivables | 306,375 | 157,447 |
Total assets | 16,952,516 | 12,615,227 |
Deposits | ||
Noninterest-bearing | 520,070 | 326,875 |
Interest-bearing | 13,541,390 | 9,744,470 |
Total deposits | 14,061,460 | 10,071,345 |
Borrowings | 964,127 | 930,392 |
Deferred tax liabilities | 19,923 | 19,613 |
Other liabilities | 205,922 | 134,138 |
Total liabilities | 15,251,432 | 11,155,488 |
Commitments and Contingencies | ||
Shareholders' Equity | ||
Common stock, without par value Authorized - 75,000,000 shares Issued and outstanding - 43,242,928 shares at December 31, 2023 and 43,113,127 shares at December 31, 2022 | 140,365 | 137,781 |
Preferred stock | ||
Retained earnings | 1,063,599 | 832,871 |
Accumulated other comprehensive loss | (2,488) | (10,521) |
Total shareholders' equity | 1,701,084 | 1,459,739 |
Total liabilities and shareholders' equity | 16,952,516 | 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 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Securities available for sale | $ 722,497 | $ 0 |
Securities held to maturity, fair value | 1,203,535 | 1,118,966 |
Loans held for sale at fair value | 86,663 | 82,192 |
Net of allowance for credit losses on loans | $ 71,752 | $ 44,014 |
Stockholders' Equity: | ||
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 43,242,928 | 43,113,127 |
Common stock, shares outstanding | 43,242,928 | 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 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Interest Income | |||
Loans | $ 959,714,000 | $ 451,973,000 | $ 293,830,000 |
Mortgage loans in process of securitization | 12,652,000 | 8,407,000 | 12,746,000 |
Investment securities: | |||
Available for sale - taxable | 21,621,000 | 2,807,000 | 3,309,000 |
Available for sale - tax exempt | 41,000 | ||
Held to maturity | 69,983,000 | 12,382,000 | |
Federal Home Loan Bank stock | 2,205,000 | 1,220,000 | 1,143,000 |
Other | 11,623,000 | 4,044,000 | 817,000 |
Total interest income | 1,077,798,000 | 480,833,000 | 311,886,000 |
Interest Expense | |||
Deposits | 577,210,000 | 149,645,000 | 28,256,000 |
Borrowed funds | 52,517,000 | 12,637,000 | 5,636,000 |
Total interest expense | 629,727,000 | 162,282,000 | 33,892,000 |
Net Interest Income | 448,071,000 | 318,551,000 | 277,994,000 |
Provision for credit losses | 40,231,000 | 17,295,000 | 5,012,000 |
Net Interest Income After Provision for Credit Losses | 407,840,000 | 301,256,000 | 272,982,000 |
Noninterest Income | |||
Gain on sale of loans | 48,183,000 | 64,150,000 | 111,185,000 |
Loan servicing fees, net | 26,198,000 | 30,198,000 | 16,373,000 |
Mortgage warehouse fees | 7,701,000 | 5,394,000 | 12,396,000 |
Gains on sale of investments available for sale (includes $0, $0 and $191, respectively, related to accumulated other comprehensive earnings reclassifications) | 191,000 | ||
Syndication and asset management fees | 12,355,000 | 9,493,000 | 6,507,000 |
Other income | 20,231,000 | 16,701,000 | 10,681,000 |
Total noninterest income | 114,668,000 | 125,936,000 | 157,333,000 |
Noninterest Expense | |||
Salaries and employee benefits | 108,181,000 | 89,085,000 | 85,727,000 |
Loan expenses | 3,409,000 | 4,703,000 | 7,657,000 |
Occupancy and equipment | 9,220,000 | 8,169,000 | 7,365,000 |
Professional fees | 12,704,000 | 9,065,000 | 5,427,000 |
Deposit insurance expense | 13,582,000 | 3,463,000 | 2,691,000 |
Technology expense | 6,515,000 | 5,282,000 | 4,200,000 |
Other expense | 20,990,000 | 16,283,000 | 12,318,000 |
Total noninterest expense | 174,601,000 | 136,050,000 | 125,385,000 |
Income Before Income Taxes | 347,907,000 | 291,142,000 | 304,930,000 |
Provision for income taxes (includes $0, $0 and $46, respectively, related to income tax expense for reclassification items) | 68,673,000 | 71,421,000 | 77,826,000 |
Net Income | 279,234,000 | 219,721,000 | 227,104,000 |
Dividends on preferred stock | (34,670,000) | (25,983,000) | (20,873,000) |
Net Income Allocated to Common Shareholders | $ 244,564,000 | $ 193,738,000 | $ 206,231,000 |
Basic Earnings Per Share (in dollars per share) | $ 5.66 | $ 4.49 | $ 4.78 |
Diluted Earnings Per Share (in dollars per share) | $ 5.64 | $ 4.47 | $ 4.76 |
Weighted-Average Shares Outstanding | |||
Basic (in shares) | 43,224,042 | 43,164,477 | 43,172,078 |
Diluted (in shares) | 43,345,799 | 43,316,904 | 43,325,303 |
Consolidated Statements of In_2
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Income | |||
Reclassifications included in gains on sale of investment available for sale | $ 0 | $ 0 | $ 191 |
Provision for income taxes related to income tax expense for reclassification items | $ 0 | $ 0 | $ 46 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Comprehensive Income | |||
Net Income | $ 279,234 | $ 219,721 | $ 227,104 |
Other Comprehensive Loss: | |||
Net change in unrealized gains/(losses) on investment securities available for sale, net of tax (expense)/benefits of $(2,750), $3,022 and $566, respectively | 8,033 | (9,067) | (1,683) |
Less: Reclassification adjustment for gains included in net income, net of tax expense of $0, $0 and $(46), respectively | 145 | ||
Other comprehensive income (loss) for the period | 8,033 | (9,067) | (1,828) |
Comprehensive Income | $ 287,267 | $ 210,654 | $ 225,276 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Comprehensive Income | |||
Net of tax (expense)/ benefits on net change in unrealized gains/(losses) on investment securities available for sale | $ (2,750) | $ 3,022 | $ 566 |
Net of tax expense on reclassification adjustment for gains include in net income | $ 0 | $ 0 | $ (46) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common stock | Preferred stock 8% Preferred Stock | Preferred stock 7% Series A Preferred Stock | Preferred stock 6% Series B Preferred Stock | Preferred stock 6% Series C Preferred Stock Public Offering | Preferred stock 6% Series C Preferred Stock Private Placement | Preferred stock 6% Series C Preferred Stock | Preferred stock 8.25% Series D Preferred Stock | Retained Earnings Impact from adoption of ASU | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance beginning of period at Dec. 31, 2020 | $ 135,857 | $ 41,581 | $ 461,744 | $ 374 | ||||||||
Balance beginning of period (in shares) at Dec. 31, 2020 | 43,120,625 | 41,625 | ||||||||||
Consolidated Statements of Shareholders' Equity | ||||||||||||
Net Income | 227,104 | $ 227,104 | ||||||||||
Issuance of 8.25% Series D preferred stock, net of $5.1 million in offering expenses | $ 144,926 | $ 46,158 | ||||||||||
Issuance of 8.25% Series D preferred stock, net of $5.1 million in offering expenses (in shares) | 150,000 | 46,181 | ||||||||||
Dividends on 8% preferred stock, annually | (833) | |||||||||||
Final dividend for redemption of 8% preferred stock | (139) | |||||||||||
Dividends on 7% Series A preferred stock, $1.75 per share, annually | (3,643) | |||||||||||
Dividends on 6% Series B preferred stock, $60.00 per share, annually | (7,500) | |||||||||||
Dividends on 6% Series C preferred stock, $60.00 per share, annually | (8,758) | |||||||||||
Dividends on common stock, $0.32 per share, annually in 2023 and $0.28 per share, annually in 2022 | (10,362) | |||||||||||
Deconsolidation of entities | (419) | |||||||||||
Other comprehensive income (loss) | (1,828) | (1,828) | ||||||||||
Redemption of 8% preferred stock | $ (41,581) | (45) | ||||||||||
Redemption of 8% preferred stock (in shares) | (41,625) | |||||||||||
Distribution to employee stock ownership plan | $ 537 | |||||||||||
Distribution to employee stock ownership plan (in shares) | 29,149 | |||||||||||
Shares issued for stock compensation plans, net of taxes withheld to satisfy tax obligations | $ 1,171 | |||||||||||
Shares issued for stock compensation plans, net of taxes withheld to satisfy tax obligations (in shares) | 30,305 | |||||||||||
Balance end of period at Dec. 31, 2021 | $ 137,565 | $ 50,221 | $ 120,844 | $ 191,084 | 657,149 | (1,454) | 1,155,409 | |||||
Balance end of period (in shares) at Dec. 31, 2021 | 43,180,079 | 2,081,800 | 125,000 | 196,181 | ||||||||
Consolidated Statements of Shareholders' Equity | ||||||||||||
Net Income | 219,721 | 219,721 | ||||||||||
Issuance of 8.25% Series D preferred stock, net of $5.1 million in offering expenses | $ 137,459 | |||||||||||
Issuance of 8.25% Series D preferred stock, net of $5.1 million in offering expenses (in shares) | 142,500 | |||||||||||
Dividends on 7% Series A preferred stock, $1.75 per share, annually | (3,643) | |||||||||||
Dividends on 6% Series B preferred stock, $60.00 per share, annually | (7,500) | |||||||||||
Dividends on 6% Series C preferred stock, $60.00 per share, annually | (11,772) | |||||||||||
Dividends on 8.25% Series D preferred stock, $82.50 per share, annually | (3,068) | |||||||||||
Dividends on preferred stock, annually | $ (1) | |||||||||||
Dividends on common stock, $0.32 per share, annually in 2023 and $0.28 per share, annually in 2022 | (12,084) | |||||||||||
Other comprehensive income (loss) | (9,067) | (9,067) | ||||||||||
Repurchase of common stock | $ (1,761) | (2,174) | ||||||||||
Repurchase of common stock (in shares) | (165,037) | |||||||||||
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 | $ 1,325 | |||||||||||
Shares issued for stock compensation plans, net of taxes withheld to satisfy tax obligations (in shares) | 77,405 | |||||||||||
Balance end of period (ASU 2016-13) at Dec. 31, 2022 | $ (3,648) | |||||||||||
Balance end of period (ASU 2016-02) at Dec. 31, 2022 | $ (110) | |||||||||||
Balance end of period at Dec. 31, 2022 | $ 137,781 | $ 50,221 | $ 120,844 | $ 191,084 | $ 137,459 | 832,871 | (10,521) | 1,459,739 | ||||
Balance end of period (in shares) at Dec. 31, 2022 | 43,113,127 | 2,081,800 | 125,000 | 196,181 | 142,500 | |||||||
Consolidated Statements of Shareholders' Equity | ||||||||||||
Net Income | 279,234 | 279,234 | ||||||||||
Dividends on 7% Series A preferred stock, $1.75 per share, annually | (3,643) | |||||||||||
Dividends on 6% Series B preferred stock, $60.00 per share, annually | (7,500) | |||||||||||
Dividends on 6% Series C preferred stock, $60.00 per share, annually | (11,771) | |||||||||||
Dividends on 8.25% Series D preferred stock, $82.50 per share, annually | (11,756) | |||||||||||
Dividends on common stock, $0.32 per share, annually in 2023 and $0.28 per share, annually in 2022 | (13,836) | |||||||||||
Other comprehensive income (loss) | 8,033 | $ 8,033 | ||||||||||
Repurchase of common stock (in shares) | 0 | |||||||||||
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 | $ 1,774 | |||||||||||
Shares issued for stock compensation plans, net of taxes withheld to satisfy tax obligations (in shares) | 96,508 | |||||||||||
Balance end of period at Dec. 31, 2023 | $ 140,365 | $ 50,221 | $ 120,844 | $ 191,084 | $ 137,459 | $ 1,063,599 | $ (2,488) | $ 1,701,084 | ||||
Balance end of period (in shares) at Dec. 31, 2023 | 43,242,928 | 2,081,800 | 125,000 | 196,181 | 142,500 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Dividends on common stock per share | $ 0.32 | $ 0.28 | $ 0.24 |
8% Preferred Stock | Preferred stock | |||
Preferred stock, dividend rate (as a percent) | 8% | 8% | 8% |
Dividends on preferred stock per share | $ 80 | $ 80 | $ 80 |
Final dividend for redemption of preferred stock per share | $ 3.33 | $ 3.33 | $ 3.33 |
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% | 7% |
Dividends on preferred stock per share | $ 1.75 | $ 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% | 6% |
Dividends on preferred stock per share | $ 60 | $ 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% | 6% |
Dividends on preferred stock per share | $ 60 | $ 60 | $ 60 |
6% Series C Preferred Stock | Public Offering | Preferred stock | |||
Offering expenses on issuance of stock | $ 5,100,000 | $ 5,100,000 | $ 5,100,000 |
6% Series C Preferred Stock | Private Placement | Preferred stock | |||
Preferred stock, dividend rate (as a percent) | 6% | 6% | 6% |
Offering expenses on issuance of stock | $ 23,000 | $ 23,000 | $ 23,000 |
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% | 8.25% |
Dividends on preferred stock per share | $ 82.50 | $ 82.50 | $ 82.50 |
8.25% Series D Preferred Stock | Public Offering | Preferred stock | |||
Offering expenses on issuance of stock | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities: | |||
Net income | $ 279,234,000 | $ 219,721,000 | $ 227,104,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 2,852,000 | 2,485,000 | 2,191,000 |
Provision for credit losses | 40,231,000 | 17,295,000 | 5,012,000 |
Deferred income tax, net | (2,442,000) | 4,731,000 | 5,310,000 |
Gain on sale of securities | (191,000) | ||
Gain on sale of loans | (48,183,000) | (64,150,000) | (111,185,000) |
Proceeds from sales of loans | 22,136,235,000 | 25,773,056,000 | 61,231,720,000 |
Loans and participations originated and purchased for sale | (22,713,037,000) | (25,342,944,000) | (61,182,161,000) |
Purchases of low-income housing tax credits for sale | (67,683,000) | (39,699,000) | (9,605,000) |
Proceeds from sale of low-income housing tax credits | 9,334,000 | 13,604,000 | 7,009,000 |
Change in servicing rights for paydowns and fair value adjustments | 3,059,000 | (8,776,000) | 4,296,000 |
Net change in: | |||
Mortgage loans in process of securitization | 43,595,000 | 415,045,000 | (230,506,000) |
Other assets and receivables | (85,181,000) | (37,264,000) | (6,616,000) |
Other liabilities | 41,516,000 | 20,778,000 | 3,823,000 |
Other | 4,068,000 | 1,892,000 | 4,583,000 |
Net cash (used in) provided by operating activities | (356,402,000) | 975,774,000 | (49,216,000) |
Investing activities: | |||
Net change in securities purchased under agreements to resell | 115,000 | 2,424,000 | 692,000 |
Purchases of securities available for sale | (1,291,874,000) | (51,197,000) | (221,191,000) |
Purchases of securities held to maturity | (293,268,000) | (1,252,793,000) | |
Proceeds from the sale of securities available for sale | 1,516,000 | 11,379,000 | 38,566,000 |
Proceeds from calls, maturities and paydowns of securities available for sale | 489,602,000 | 13,988,000 | 138,013,000 |
Proceeds from calls, maturities and paydowns of securities held to maturity | 208,129,000 | 133,715,000 | |
Purchases of loans | (358,462,000) | (551,091,000) | (369,148,000) |
Net change in loans receivable | (2,047,806,000) | (1,929,569,000) | (349,887,000) |
Proceeds from loans held for sale previously classified as loans receivable | 65,768,000 | 788,848,000 | 262,086,000 |
Purchase of FHLB stock | (9,448,000) | (10,326,000) | (3,932,000) |
Proceeds from sale of FHLB stock | 784,000 | 45,000,000 | |
Purchases of premises and equipment | (7,528,000) | (6,761,000) | (3,645,000) |
Purchases of servicing rights | (2,057,000) | ||
Proceeds from sale of servicing rights | 438,000 | ||
Purchase of limited partnership and LLC interests | (18,762,000) | (14,590,000) | (11,194,000) |
Cash paid in deconsolidation of subsidiary | (464,000) | ||
Other investing activities | 1,937,000 | 4,395,000 | 404,000 |
Net cash used in investing activities | (3,260,081,000) | (2,862,851,000) | (474,262,000) |
Financing activities: | |||
Net change in deposits | 3,990,115,000 | 1,088,732,000 | 1,572,442,000 |
Proceeds from borrowings | 95,570,319,000 | 65,777,538,000 | 31,471,236,000 |
Repayment of borrowings | (95,700,385,000) | (65,885,100,000) | (31,787,578,000) |
Proceeds from credit link note | 153,546,000 | ||
Repayment of credit link note | (34,270,000) | ||
Proceeds from notes payable | 64,922,000 | 4,000,000 | 2,040,000 |
Payments on notes payable | (21,000,000) | ||
Proceeds from issuance of preferred stock | 137,459,000 | 191,084,000 | |
Repurchase of preferred stock | (41,625,000) | ||
Repurchase of common stock | (3,935,333) | ||
Dividends | (48,506,000) | (38,067,000) | (31,235,000) |
Net cash provided by financing activities | 3,974,741,000 | 1,080,627,000 | 1,376,364,000 |
Net Change in Cash and Cash Equivalents | 358,258,000 | (806,450,000) | 852,886,000 |
Cash and Cash Equivalents, Beginning of Period | 226,164,000 | 1,032,614,000 | 179,728,000 |
Cash and Cash Equivalents, End of Period | 584,422,000 | 226,164,000 | 1,032,614,000 |
Additional Cash Flows Information: | |||
Interest paid | 609,689,000 | 140,365,000 | 33,900,000 |
Income taxes paid, net of refunds | 67,388,000 | 66,508,000 | 78,758,000 |
ROU assets obtained in exchange for new operating lease liabilities | 1,113,000 | 5,535,000 | |
Transfer of loans from loans held for sale to loans receivable | 377,460,000 | 16,771,000 | |
Transfer of loans from loans receivable to loans held for sale | $ 65,768,000 | $ 788,849,000 | 210,826,000 |
Payable for servicing rights | 2,057,000 | ||
Payable for limited partnership interests | $ 34,808,000 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Nature of Operations and Summary of Significant Accounting Policies | |
Nature of Operations and Summary of Significant Accounting Policies | Note 1: Nature of Operations and Summary of Significant Accounting Policies Nature of Operations The accompanying 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”) (whose branches were sold to unaffiliated third parties and its remaining charter collapsed into Merchants Bank on January 26, 2024), 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”. Merchants Bank operates under an Indiana state bank charter and provides full banking services. As a state bank and non-Federal Reserve member, it is subject to the regulation of the Indiana Department of Financial Institutions (“IDFI”) and the Federal Deposit Insurance Corporation (“FDIC”). The Company is further subject to regulations of the Board of Governors of the Federal Reserve System (“Federal Reserve”) governing bank holding companies. Merchants Bank operates from six locations in Indiana, including Lynn, Spartanburg, Richmond, Carmel and Indianapolis. Merchants Bank generates multi-family, commercial, mortgage and consumer loans and receives deposits from customers located primarily in Hamilton, Marion, Wayne, Randolph and surrounding counties in Indiana. Merchants Bank’s loans are generally secured by specific items of collateral including real property, consumer assets and business assets. Merchants Bank’s Mortgage Warehousing segment funds and participates in single-family and multi-family, agency eligible loans across the nation. Prior to the sale of its branches, and merger of its remaining charter into Merchants Bank, on January 26, 2024, FMBI operated under an Illinois state bank charter and provided full banking services. As a state bank and non-Federal Reserve member, it was subject to the regulation of the Illinois Department of Financial and Professional Regulation (“IDFPR”) and the FDIC. FMBI operated from four offices located in Joy, Paxton, Melvin, and Piper City, Illinois. MCC is primarily engaged in mortgage banking, specializing in lending for multi-family rental properties and healthcare facilities. It is a Federal Housing Authority (“FHA”) approved mortgagee and a Government National Mortgage Association (“Ginnie Mae”), Federal National Mortgage Association (“Fannie Mae”) Affordable, and Federal Home Loan Mortgage Corporation (“Freddie Mac”) issuer. It is also a fully integrated syndicator of low-income housing tax credit and debt funds. Sale of Farmers-Merchants Bank of Illinois branches On September 7, 2023, the Company entered into an agreement with Bank of Pontiac to sell its Farmers-Merchants Bank of Illinois branch locations in Paxton, Melvin, and Piper City, Illinois, and into an agreement with CBI Bank & Trust, to sell its Farmers-Merchants Bank of Illinois branch located in Joy, Illinois. This transaction enhances the Company’s ability to focus on its core business of single and multi-family mortgage lending and strategically aligns the branches with institutions that share a similar business model and allows them to provide additional products to their customers. On January 26, 2024, the transaction was completed after having met customary closing conditions, including regulatory approval. In addition to the branches, Bank of Pontiac acquired approximately $164.8 million in deposits and $19.2 million in loans, and CBI Bank & Trust acquired approximately $65.1 million in deposits and $28.6 million in loans. Principles of Consolidation During 2022, Merchants Foundation, Inc., a nonprofit corporation, was incorporated and its results are consolidated with the Company’s consolidated financial statements as of December 31, 2023 and 2022. 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 our 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. In May 2023, the Company acquired a variable interest in an investment for which it is the primary beneficiary of, and its results have been consolidated since the date of acquisition. Additionally, the Company has certain variable interest investments that it was deemed not to be a primary beneficiary of as of December 31, 2023. These VIEs are not consolidated and the equity or proportional method of accounting has been applied. The Company will analyze whether the primary beneficiary designation has changed through triggering events on a prospective basis. Changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment. See Note 12: Variable Interest Entities (VIEs) All significant intercompany accounts and transactions have been eliminated in consolidation. Deconsolidation Following the deconsolidation, the carrying value of assets and liabilities of these entities were removed from the consolidated balance sheet, and the continuing investments were recorded at fair value at the date of deconsolidation. The total amount deconsolidated from the balance sheet included net assets of approximately $10 million, consisting primarily of $66.6 million in loans receivable and $52.7 million in borrowings with Merchants Bank, that was previously eliminated in consolidation. The fair value of its continuing investments was approximately $10 million on the deconsolidation date and has been reported in Other Assets after deconsolidation. The estimated fair value was determined based on third-party evaluations of similar assets in the underlying business. The difference between the fair value of these deconsolidated entities and their carrying value was deemed to be immaterial, resulting in no gain or loss on deconsolidation. These continuing investments after deconsolidation are classified as variable interest entities, have not been consolidated, and are accounted for under the equity method of accounting. See Note 12: Variable Interest Entities (VIEs) 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 and fair values of servicing rights and financial instruments. Significant Accounting Policies Cash and Cash Equivalents The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents consist primarily of cash amounts due from depository institutions, interest-bearing deposits in other banks, money market accounts, and federal funds sold. For information on restricted cash see Note 2: Restriction on Cash and Due from Banks. At December 31, 2023, the Company’s cash accounts exceeded federally insured limits by approximately $564.5 million. Included in this amount is approximately $510.2 million with the Federal Reserve and $5.8 million with the Federal Home Loan Bank of Indianapolis (“FHLBI”), and $156,000 with the Federal Home Loan Bank of Chicago (“FHLBC”). At December 31, 2022, the Company’s cash accounts exceeded federally insured limits by approximately $208.4 million. Included in this amount is approximately $185.6 million with the Federal Reserve and $3.6 million with the FHLBI, and $150,000 with the FHLBC. Securities purchased under agreements to resell Securities purchased pursuant to a simultaneous agreement Reverse Repurchase Agreement (“RRA”) to resell the same securities at a specified price and date generally have maturity dates of 90 days or less and are carried at cost. Every 90 days the RRAs rollover. 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 Fannie Mae and Freddie Mac participation certificates, all of which are pending settlement with firm investor commitments to purchase the securities, typically occurring within 30 days. Investment Securities Securities held to maturity are carried at amortized cost when the Company has the positive intent and ability to hold to maturity. Securities not classified as held to maturity or trading are classified as “available for sale” and recorded at fair value. If no fair value option is elected, unrealized gains and losses are excluded from earnings and reported in other comprehensive income. For securities available for sale utilizing the fair value option, the Company periodically evaluates the securities for changes in fair value and changes are recognized in current period income. The securities are held with the intent that the gains or losses will offset changes in the fair value of other financial instruments. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Regular assessments are performed on securities available for sale to confirm there are no perceived credit losses that would require an allowance for credit losses to be established in accordance with FASB Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”). Securities held to maturity generally require an allowance for lifetime expected credit losses when the security is purchased. Management considers several factors when making such estimates, including issuer bond ratings, historical loss rates for given bond ratings, the financial condition of the issuer, and whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, among others. 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 accumulated other comprehensive losses (“AOCL”), 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. Prior to the adoption of CECL, unrealized losses on securities were evaluated to determine if there was any other-than-temporary impairment. These unrealized losses were not recognized into income because the Company had the intent and ability to hold the securities for the foreseeable future and the decline in fair value was primarily due to increased market rates. The fair value was expected to recover as the securities approached their maturity dates. Loans Held for Sale under Mortgage Banking Activities The Company uses participation agreements to fund mortgage loans held for sale from closing or purchase until sold to an investor. Under a participation agreement the Company elects to purchase a participation interest of up to 100% in individual loans. The Company shares proportionately in the interest income and the credit risk until the loan is sold to an investor. The Company holds the collateral until it is sent under a bailee arrangement to the investor. Typical investors are large financial institutions or government agencies. These loans are carried at the lower of cost or fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance and included in noninterest income. For all loans held for sale, interest earned from the time of funding to the time of sale is accrued and recognized as interest income. Gains and losses on loan sales are recorded in noninterest income. The gain on sale of loans in the income statement may include placement and origination fees, capitalized servicing rights, trading gains and losses and other related income or expense. 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 amortized at 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 $60.4 million and $35.0 million at December 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 principal 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 repurchase agreements 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 when accrued. Warehouse fees are accrued as noninterest income. 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 current 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 uncollectability 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, 2023. 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 segmenting loans with similar risk characteristics. Loans risk graded substandard and worse are individually evaluated for expected credit losses. For individually evaluated loans that are collateral dependent, the Company may use the fair value of the collateral, less estimated costs to sell, as a practical expedient as of the reporting date to determine the carrying amount of an asset and the allowance for credit losses, as applicable. 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 when the borrower is experiencing financial difficulty as of the reporting date. 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 repurchase agreements Remaining Life Method Residential real estate loans 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 included the underlying collateral, type or purpose of the loan, and expected credit loss patterns. The initial estimate of expected credit losses for each segment is based on historical credit loss experience and management’s judgement. 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 judgement 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. ACL-Off-Balance Sheet Credit Exposures (“OBCEs”) The allowance for credit losses on OBCEs is a liability account representing expected credit losses over the contractual period for which the Company is exposed to credit risk resulting from a contractual obligation to extend credit. No allowance is recognized if the Company has the unconditional right to cancel the obligation. OBCEs primarily consist of amounts available under outstanding lines of credit and letters of credit. For the period of exposure, the estimate of expected credit losses considers both the likelihood that funding will occur, and the amount expected to be funded over the estimated remaining life of the commitment or other off-balance sheet exposure. 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 allowance for OBCEs is adjusted through the income statement as a component of provision for credit loss. ACL-Guarantees The allowance for credit losses on guarantees (“ACL-Guarantees”) is a liability account representing expected credit losses over the contractual period for which the Company is exposed to credit risk resulting from a reimbursement and security agreement with Freddie Mac. This agreement was associated with the Company’s May 2022 securitization arrangement. The Company agreed to reimburse Freddie Mac for a first loss position in the underlying loan portfolio, not to exceed 12% of the unpaid principal amount of the loans comprising the securitization pool at settlement. An initial ACL – Guarantee of $1.2 million was established. For the period of exposure, the estimate of expected credit losses considers both the likelihood that losses will occur and the amount of losses over the estimated remaining life of the guarantee. The likelihood and expected losses are based on historical loan loss experience from peers, as well as from similar loans in our ACL-Loans, for each class of loans. The amount of the allowance represents management’s best estimate of expected credit losses over the contractual life of the commitment. The ACL - Guarantees is adjusted through the income statement as a component of provision for credit loss. Also see Note 5: Loans and Allowance for Credit Losses. Premises and Equipment Depreciable assets are stated at cost less accumulated depreciation. Depreciation is charged to expense using the straight-line method over the estimated useful lives of the assets. The estimated useful lives for premises and equipment are as follows: Buildings 7 to 40 years Leasehold improvements 2 to 11 years Software and intangible assets 5 to 10 years Furniture, fixtures, and equipment 3 to 15 years Vehicles 5 years Expenditures for property and equipment and for renewals or betterments that extend the originally estimated economic life of the assets are capitalized. Expenditures for maintenance and repairs are charged to expense. When an asset is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the results of operations. Leases one Federal Home Loan Bank Stock Federal Home Loan Bank (FHLB) stock is a required investment for institutions that are members of a FHLB. The required investment in the common stock is based on a predetermined formula, carried at cost and evaluated for impairment. Other Real Estate Owned Assets acquired through, or in lieu of, loan foreclosure are classified as other assets and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net income or expense from other real estate. Servicing Rights Servicing assets are recognized separately when rights are acquired through purchase or through sale of financial assets. Under the servicing assets and liabilities accounting guidance (ASC 860-50), servicing rights resulting from the sale or securitization of loans originated by the Company are initially measured at fair value at the date of transfer. The Company has elected to initially and subsequently measure the servicing rights for mortgage loans using the fair value method. Under the fair value method, the servicing rights are carried in the balance sheet at fair value and the changes in fair value are reported in earnings in the period in which the changes occur. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model is from an independent third party and it incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds, prepayment penalties, and default rates and losses. These variables change from quarter to quarter as market conditions and projected interest rates change, and any change in fair values is recorded to noninterest income. Servicing fee income is recorded when fees are earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income. The change in the fair value of the mortgage-servicing rights is netted against loan servicing fee income. Goodwill and Intangible Assets Goodwill is tested annually for impairment or more frequently if impairment indicators are present. If the implied fair value of goodwill is lower than its carrying amount, a goodwill impairment is indicated and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the financial statements. Intangible assets, which include licenses and trade names, are amortized over a period ranging from 84 to 120 months using a straight-line method of amortization. Customer list intangible assets are amortized over 21 months using a straight-line method of amortization. Also included are core deposit intangibles that are amortized over a 10 year period using the accelerated sum of the years digits method of amortization. On a periodic basis, the Company evaluates events and circumstances that may indicate a change in the recoverability of the carrying value. Investment in Low-Income Housing Tax Credit Limited Partnerships or Limited Liability Companies (“LLC”) The Company has elected to account for its investment in affordable housing tax credit limited partnerships or LLCs using the proportional amortization method described in FASB ASU 2014-01, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Low-Income Housing Tax Credit Projects (A Consensus of the FASB Emerging Issues Task Force)”, which was updated in March 2023 and released as FASB ASU 2023-02. Under the proportional amortization method, an investor amortizes the initial cost of the investment to income tax expense in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense. The investment in the limited partnerships or LLCs are included in other assets in the consolidated balance sheets. During the years ended December 31, 2023, 2022, and 2021, the Company sold some of these assets to funds in which it is a general partner and in some cases holds a minority interest in the limited partnership or LLC. Income Taxes The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. Uncertain tax positions are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment. With a few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2020. The Company recognizes interest and penalties, if any, as other noninterest expense. The Company files consolidated income tax returns with its subsidiaries. Earnings Per Share Basic earnings per share is the Company’s net income available to common shareholders, which represents net income less dividends paid or payable to preferred stock shareholders, if any, divided by the weighted-average number of common shares outstanding during each period. Diluted earnings per share is calculated in the same manner as basic earnings per share, but also reflects the issuance of additional common shares that would have been diluted if such shares had been outstanding, as well as any adjustment to income that would result from the assumed issuance. Share-based Comp |
Restriction on Cash and Due Fro
Restriction on Cash and Due From Banks | 12 Months Ended |
Dec. 31, 2023 | |
Restriction on Cash and Due From Banks | |
Restriction on Cash and Due From Banks | Note 2: Restriction on Cash and Due From Banks On March 26, 2020, the Federal Reserve reduced all banks’ reserve requirements to 0%. The effective reserve requirement has remained at 0% as of December 31, 2023 and 2022. Included in cash equivalents is an account restricted as collateral for the potential risk of loss on senior credit linked notes issued by the Company in March 2023. As of December 31, 2023, there was $36.4 million in restricted cash. Also see Note 14: Borrowings. |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2023 | |
Investment Securities | |
Investment Securities | Note 3: 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: December 31, 2023 Gross Gross Approximate Amortized Unrealized Unrealized Fair Cost (1) Gains Losses Value (In thousands) Securities available for sale: Treasury notes $ 129,261 $ 45 $ 338 $ 128,968 Federal agencies 250,731 — 2,976 247,755 Mortgage-backed - Government Agency ("Agency") (2) 14,465 5 3 14,467 Mortgage-backed - Non-Agency residential - fair value option 485,500 — — 485,500 Mortgage-backed - Agency - fair value option 236,997 — — 236,997 Total securities available for sale $ 1,116,954 $ 50 $ 3,317 $ 1,113,687 Securities held to maturity: Mortgage-backed - Non-Agency multi-family $ 719,662 $ — $ 415 $ 719,247 Mortgage-backed - Non-Agency residential 472,539 973 418 473,094 Mortgage-backed - Agency 12,016 — 822 11,194 Total securities held to maturity $ 1,204,217 $ 973 $ 1,655 $ 1,203,535 (1) For fair value option securities, the amortized cost reflects the carrying value, which is also equal to the fair value. (2) Agency includes government sponsored agencies, such as Fannie Mae, Freddie Mac, and Ginne Mae. December 31, 2022 Gross Gross Approximate 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 - Agency 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-Agency multi-family $ 871,772 $ 12 $ — $ 871,784 Mortgage-backed - Non-Agency residential 247,306 — 124 247,182 Total securities held to maturity $ 1,119,078 $ 12 $ 124 $ 1,118,966 At December 31, 2023 and 2022, agency mortgage-backed securities included in the tables above are primarily backed by multi-family and single-family loans. During 2023 the Company acquired both agency and non-agency mortgage-backed available for sale securities that are being carried utilizing the fair value option. Changes in the fair value are recognized in other income as they occur. These fair value option securities are included in the table above at December 31, 2023. Accrued interest on securities available for sale totaled $6.7 million at December 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 $5.8 million at December 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 securities available for sale and held to maturity at December 31, 2023, 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. December 31, 2023 Amortized Fair Cost (1) Value Securities available for sale: (In thousands) Within one year $ 308,474 $ 305,406 After one through five years 71,518 71,317 379,992 376,723 Mortgage-backed - Agency 14,465 14,467 Mortgage-backed - Non-Agency residential - fair value option 485,500 485,500 Mortgage-backed - Agency - fair value option 236,997 236,997 $ 1,116,954 $ 1,113,687 Securities held to maturity: Mortgage-backed - Non-Agency multi-family $ 719,662 $ 719,247 Mortgage-backed - Non-Agency residential 472,539 473,094 Mortgage-backed - Agency 12,016 11,194 $ 1,204,217 $ 1,203,535 (1) For fair value option securities, the amortized cost reflects the carrying value, which is also equal to the fair value. During the year ended December 31, 2023, proceeds from sales of securities available for sale were $1.5 million, and the net gain was inconsequential. During the year ended December 31, 2022, one of the mortgage-backed – non-agency multi-family securities available for sale was sold for $11.4 million resulting in no gain or loss. During the year ended December 31, 2021, proceeds from sales of securities available for sale were $38.6 million, and a net gain of $191,000 was recognized, consisting of $191,000 in gains and $0 of losses. The carrying value of securities pledged as collateral, to secure borrowings, public deposits and for other purposes, was $1.1 billion and $570.6 million at December 31, 2023 and 2022, respectively. Certain investments in securities available for sale are reported in the consolidated financial statements at an amount less than their historical cost. The total fair value of these investments at December 31, 2023 and 2022 was $263.4 million (28 positions) and $308.0 million (37 positions), respectively, which is approximately 24%, and 95%, respectively, of the Company’s available for sale investment portfolio. Certain investments in securities held to maturity are reported in the consolidated financial statements at amortized cost. The amortized cost of these investments that were reported at less than their fair value at December 31, 2023 and 2022 totaled $777.7 million (8 positions) and $247.2 million (2 positions), respectively, which is approximately 65% and 22%, respectively, of the Company’s held to maturity investment portfolio. 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 December 31, 2023 and 2022: December 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 $ 3,052 $ 6 $ 32,080 $ 332 $ 35,132 $ 338 Federal agencies 60,541 189 167,213 2,787 227,754 2,976 Mortgage-backed - Agency 364 1 186 2 550 3 $ 63,957 $ 196 $ 199,479 $ 3,121 $ 263,436 $ 3,317 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 - Agency 709 7 — — 709 7 $ 49,545 $ 1,493 $ 258,411 $ 12,565 $ 307,956 $ 14,058 Allowance for Credit Losses 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 available for sale securities 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 December 31, 2023 and 2022. Securities held to maturity are comprised of non-agency mortgage-backed securities secured by multi-family or single-family properties, and agency mortgage-backed securities secured by multi-family properties. The agency securities are Ginnie Mae mortgage-backed securities and backed by the full faith and credit of the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities. The non-agency 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-agency securities. |
Mortgage Loans in Process of Se
Mortgage Loans in Process of Securitization | 12 Months Ended |
Dec. 31, 2023 | |
Mortgage Loans in Process of Securitization. | |
Mortgage Loans in Process of Securitization | Note 4: 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 Fannie Mae and Freddie Mac participation certificates, all of which are pending settlement 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 $0.8 million and $0.3 million at December 31, 2023 and 2022, respectively. |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses on Loans | 12 Months Ended |
Dec. 31, 2023 | |
Loans and Allowance for Credit Losses on Loans | |
Loans and Allowance for Credit Losses on Loans | Note 5: Loans and Allowance for Credit Losses on Loans Loan Portfolio Summary Loans receivable at December 31, 2023 and 2022, include: December 31, December 31, 2023 2022 (In thousands) Mortgage warehouse repurchase agreements $ 752,468 $ 464,785 Residential real estate (1) 1,324,305 1,178,401 Multi-family financing 4,006,160 3,135,535 Healthcare financing 2,356,689 1,604,341 Commercial and commercial real estate (2)(3) 1,643,081 978,661 Agricultural production and real estate 103,150 95,651 Consumer and margin loans 13,700 13,498 10,199,553 7,470,872 Less: ACL - Loans 71,752 44,014 Loans Receivable $ 10,127,801 $ 7,426,858 (1) Includes $1.2 billion and $1.1 billion of All-in-One first-lien home equity lines of credit at December 31, 2023 and 2022, respectively. (2) Includes $1.1 billion and $497.0 million of revolving lines of credit collateralized primarily by mortgage servicing rights as of December 31, 2023 and 2022, respectively. (3) Includes only $8.4 million and $12.8 million of non-owner occupied commercial real estate as of December 31, 2023 and 2022, respectively. Risk characteristics applicable to each segment of the loan portfolio are described as follows. Mortgage Warehouse Repurchase Agreements (MTG WHRA): 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 facility 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 under a warehouse facility. However, the warehouse customers are required to hedge the change in value of these loans to mitigate the risk, typically through forward sales contracts. Residential Real Estate Loans (RES RE): Multi-Family Financing (MF FIN): Healthcare Financing (HC FIN): 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 lines of credit collateralized by servicing rights. 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 adjustable rate mortgage (“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. The following table presents, by loan portfolio segment, the activity in the ACL-Loans for the year ended December 31, 2023 and 2022: At or For the Year Ended December 31, 2023 MTG WHRA 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 821 328 18,493 12,572 5,232 54 (12) 37,488 Loans charged to the allowance — (34) (8,400) — (1,356) — (1) (9,791) Recoveries of loans previously charged off — — — — 41 — — 41 Balance, end of period $ 2,070 $ 7,323 $ 26,874 $ 22,454 $ 12,243 $ 619 $ 169 $ 71,752 The Company recorded a total provision for credit losses of $40.2 million for the year ended December 31, 2023. The $40.2 million provision for credit losses consisted of $37.5 million for the ACL-Loans as shown above and $2.7 million for the ACL-OBCEs. At or For the Year Ended December 31, 2022 MTG WHRA 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 Company recorded a total provision for credit losses of $17.3 million for the year ended December 31, 2022. The $17.3 million provision for credit losses consisted of $13.5 million for the ACL-Loans as shown above, $2.6 million for the ACL-OBCEs, and $1.2 million for the ACL-Guarantees, contingent reserve related to the Freddie Mac-sponsored Q-series securitization transaction. Prior to the adoption of CECL, the Company maintained an allowance for loan losses in accordance with the incurred loss model as disclosed in the Company’s 2021 Annual Report on Form 10-K. The following tables presents the allowance for loan losses as of December 31, 2021: For the Year Ended December 31, 2021 MTG WHRA RES RE MF FIN HC FIN CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of year $ 4,018 $ 3,334 $ 12,140 $ 2,591 $ 4,641 $ 636 $ 140 $ 27,500 Provision (credit) for loan losses (2,063) 838 1,944 1,870 2,422 21 (20) 5,012 Loans charged to the allowance — (2) — — (1,184) — (6) (1,192) Recoveries of loans previously charged off — — — — — — 24 24 Balance, end of year $ 1,955 $ 4,170 $ 14,084 $ 4,461 $ 5,879 $ 657 $ 138 $ 31,344 The below tables present the amortized cost basis and ACL-Loans allocated for collateral dependent loans, which are individually evaluated to determine expected credit losses as of December 31, 2023 and 2022: December 31, 2023 Real Estate Accounts Receivable / Equipment Other Total ACL-Loans Allocation (In thousands) RES RE $ 1,557 $ — $ 3 $ 1,560 $ 21 MF FIN 46,575 — — 46,575 521 HC FIN 73,909 — — 73,909 6,289 CML & CRE 146 3,603 2,684 6,433 1,132 AG & AGRE 147 — — 147 1 CON & MAR — — 3 3 — Total collateral dependent loans $ 122,334 $ 3,603 $ 2,690 $ 128,627 $ 7,964 December 31, 2022 Real Estate Accounts Receivable / Equipment Other Total ACL-Loans Allocation (In thousands) RES RE $ 237 $ — $ 9 $ 246 $ 31 MF FIN 36,760 — — 36,760 173 HC FIN 21,783 — — 21,783 134 CML & CRE — 4,917 966 5,883 842 AG & AGRE 147 — — 147 1 CON & MAR — — 6 6 — Total collateral dependent loans $ 58,927 $ 4,917 $ 981 $ 64,825 $ 1,181 Internal Risk Categories The Company evaluates the loan risk grading system definitions and ACL-Loans methodology on an ongoing basis. As of December 31, 2023, the Company created a newly defined special mention risk rating category to be consistent with industry practices. Loans with a Watch classification are now included in the Pass risk rating category as of December 31, 2023. This updated policy was approved by the Company’s Asset-Liability Committee (“ALCO”), to be effective as of December 31, 2023 on a prospective basis. In adherence with policy, the Company uses the following internal risk grading categories and definitions for loans as of December 31, 2023: Pass Special Mention – Loans classified as special mention have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special mention loans are not adversely classified and do not warrant adverse classification. Loans with questions or concerns regarding collateral, adverse market conditions impacting future performance, and declining financial trends would be considered for special mention. Substandard Doubtful The following table presents the credit risk profile of the Company’s loan portfolio based on internal risk rating categories as of December 31, 2023: December 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans TOTAL (In thousands) MTG WHRA Pass $ — $ — $ — $ — $ — $ — $ 752,468 $ 752,468 Total $ — $ — $ — $ — $ — $ — $ 752,468 $ 752,468 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — RES RE Pass 31,011 10,086 6,573 22,725 3,298 9,340 1,239,161 1,322,194 Special Mention — — — — 59 492 — 551 Substandard — — — — — 288 1,272 1,560 Total $ 31,011 $ 10,086 $ 6,573 $ 22,725 $ 3,357 $ 10,120 $ 1,240,433 $ 1,324,305 Charge-offs $ — $ — $ — $ — $ — $ 21 $ 13 $ 34 MF FIN Pass 1,094,698 762,448 208,343 77,340 29,764 8,455 1,646,445 3,827,493 Special Mention 94,973 3,189 8,400 — — 1,477 24,052 132,091 Substandard 11,682 28,360 6,534 — — — — 46,576 Total $ 1,201,353 $ 793,997 $ 223,277 $ 77,340 $ 29,764 $ 9,932 $ 1,670,497 $ 4,006,160 Charge-offs $ — $ 8,400 $ — $ — $ — $ — $ — $ 8,400 HC FIN Pass 752,591 996,273 110,197 — 14,563 — 351,110 2,224,734 Special Mention 35,869 9,520 — — — — 12,658 58,047 Substandard 25,600 10,625 28,783 — — — 8,900 73,908 Total $ 814,060 $ 1,016,418 $ 138,980 $ — $ 14,563 $ — $ 372,668 $ 2,356,689 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — CML & CRE Pass 51,110 119,386 77,316 21,154 21,088 17,066 1,328,980 1,636,100 Special Mention — — 292 172 — 84 — 548 Substandard — 70 1,701 878 62 — 3,672 6,383 Doubtful — — — — — 50 — 50 Total $ 51,110 $ 119,456 $ 79,309 $ 22,204 $ 21,150 $ 17,200 $ 1,332,652 $ 1,643,081 Charge-offs $ — $ 496 $ 274 $ 586 $ — $ — $ — $ 1,356 AG & AGRE Pass 16,850 9,825 6,490 14,267 5,237 16,606 33,728 103,003 Special Mention — — — — — — — — Substandard — — — — — 147 — 147 Total $ 16,850 $ 9,825 $ 6,490 $ 14,267 $ 5,237 $ 16,753 $ 33,728 $ 103,150 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — CON & MAR Pass 748 4,329 247 115 27 4,339 3,862 13,667 Special Mention — — — 15 15 — — 30 Substandard — — — — — 3 — 3 Total $ 748 $ 4,329 $ 247 $ 130 $ 42 $ 4,342 $ 3,862 $ 13,700 Charge-offs $ — $ — $ — $ — $ — $ 1 $ — $ 1 Total Pass $ 1,947,008 $ 1,902,347 $ 409,166 $ 135,601 $ 73,977 $ 55,806 $ 5,355,754 $ 9,879,659 Total Special Mention $ 130,842 $ 12,709 $ 8,692 $ 187 $ 74 $ 2,053 $ 36,710 $ 191,267 Total Substandard $ 37,282 $ 39,055 $ 37,018 $ 878 $ 62 $ 438 $ 13,844 $ 128,577 Total Doubtful $ — $ — $ — $ — $ — $ 50 $ — $ 50 Total Loans $ 2,115,132 $ 1,954,111 $ 454,876 $ 136,666 $ 74,113 $ 58,347 $ 5,406,308 $ 10,199,553 Total Charge-offs $ — $ 8,896 $ 274 $ 586 $ — $ 22 $ 13 $ 9,791 The Company did not have any material revolving loans converted to term loans at December 31, 2023. Prior to the updated policy described above, the Company used the following internal risk grading categories and definitions for loans as of December 31, 2022: 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 table presents the credit risk profile of the Company’s loan portfolio based on internal risk rating categories as of December 31, 2022: December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Loans TOTAL (In thousands) MTG WHRA 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 Delinquent Loans The following tables present the Company’s loan portfolio aging analysis of the recorded investment in loans as of December 31, 2023 and 2022. December 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 WHRA $ — $ — $ — $ — $ 752,468 $ 752,468 RES RE 4,557 — 2,379 6,936 1,317,369 1,324,305 MF FIN 38,218 11,055 39,609 88,882 3,917,278 4,006,160 HC FIN — 47,275 35,999 83,274 2,273,415 2,356,689 CML & CRE 172 393 3,665 4,230 1,638,851 1,643,081 AG & AGRE 27 11 147 185 102,965 103,150 CON & MAR 1 3 18 22 13,678 13,700 $ 42,975 $ 58,737 $ 81,817 $ 183,529 $ 10,016,024 $ 10,199,553 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 WHRA $ — $ — $ — $ — $ 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 The above tables do not include one delinquent loan that was classified as held for sale at December 31, 2023, totaling $16.5 million. Nonperforming Loans Nonaccrual loans, including modified loans to borrowers experiencing financial difficulty 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 modified loans which are on nonaccrual status prior to being modified remain on nonaccrual status until six 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. Most generally, this is at 90 or more days past due. The amount of interest income recognized on nonaccrual financial assets during the year ended December 31, 2023 was inconsequential. The following table presents the Company’s nonaccrual loans and loans past due 90 days or more and still accruing at December 31, 2023 and 2022. December 31, December 31, 2023 2022 Total Loans > Total Loans > 90 Days & 90 Days & Nonaccrual Accruing Nonaccrual Accruing (In thousands) RES RE $ 1,486 $ 894 $ 245 $ 96 MF FIN 39,608 — — — HC FIN 28,783 7,216 21,783 — CML & CRE 3,820 43 4,390 — AG & AGRE 147 — 147 — CON & MAR 3 15 6 16 $ 73,847 $ 8,168 $ 26,571 $ 112 The Company did not have any nonperforming loans without an estimated ACL at December 31, 2023. Modifications to Borrowers Experiencing Financial Difficulty The following table presents the amortized cost basis of loans at December 31, 2023 that were both experiencing financial difficulty and modified during the year ended December 31, 2023, by class and by type of modification. There were no new loans modified for borrowers experiencing financial difficulty during the year ended December 31, 2023. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below: December 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 $ — $ 3,553 $ — $ — $ — $ — N/M % Total $ — $ 3,553 $ — $ — $ — $ — N/M % The financial effects of the modifications in the table above include an increase in the weighted average term for commercial and commercial real estate loans of twelve months. As part of our ACL analysis, these loans were individually evaluated for impairment and no specific reserve was recorded. The Company has committed to lend no additional amounts to the borrowers included in the table above. The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified in the last twelve months: 30 - 59 Days 60 - 89 Days Greater Than Total Past Due Past Due 90 Days Past Due (In thousands) Commercial and commercial real estate $ — $ — $ 3,553 $ 3,553 Total $ — $ — $ 3,553 $ 3,553 Foreclosures There were no residential loans in process of foreclosures as of December 31, 2023 and 2022. Significant Loan Sales Freddie Mac Q Series Securitization – 2023 Activity Loan Sale and Securitization - 2022 Activity On September 22, 2022, the Company completed a private securitization by which a As part of the securitization transaction, the Company will be both Master Servicer and Special Servicer of the loans. As Master Servicer and Special Servicer, the Company will have obligations to collect and remit payments of principal and interest, manage payments of taxes and insurance, and otherwise administer the underlying loans. Beyond servicing the loans, the Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any material breach in representation. In connection with the securitization, the Company received proceeds and accrued interest on loans, net of the acquired securities, of $150.6 million. No allowance for credit losses was recognized in connection with purchase of the security, in accordance with ASC 326. However, the $4.0 million allowance for credit losses associated with the loans sold was released through the provision for credit losses. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $525,000 net loss on sale was recognized. The net loss on sale included a $5.4 million pricing loss and $4.9 million in transaction expenses partially offset by a $6.7 million positive impact of capitalizing servicing rights associated with this transaction and a $3.2 million recognition of net deferred fee income on loans sold. Freddie Mac Q Series Securitization - 2022 Activity May 2022 On May 5, 2022, the Company entered into an arrangement through a third-party trust and Freddie Mac, by which a $214.0 million portfolio of multi-family loans were sold to the trust and ultimately securitized through Freddie Mac and sold to investors. The Company did not purchase any of the securities. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $2.3 million net gain on sale was recognized, which included establishing a contingent and noncontingent reserve and servicing rights associated with this transaction. The Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any material breach in representation. In connection with the securitization, the Company also entered into a reimbursement agreement for a first loss position in the underlying loan portfolio, not to exceed 12% of the unpaid principal amount of the loans comprising the securitization pool at settlement, or approximately $25.7 million. A contingent reserve of $1.2 million for estimated losses was established with respect to the first loss obligation on May 5, 2022, which was included in provision for credit losses on the consolidated statement of income and other liabilities on the consolidated balance sheet. A noncontingent reserve of $2.5 million related to the Company’s reimbursement obligation was included in other liabilities on the consolidated balance sheet and offset through gain on sale in the consolidated statement of income. The Company was also required to hold collateral against the reimbursement agreement. Accordingly, $27.0 million of U.S. Treasury securities were acquired as part of the transaction. As part of the securitization transaction, the Company released all mortgage servicing obligations and rights to Freddie Mac, who was designated as the Master Servicer. Freddie Mac appointed the Company with sub-servicing obligations, which include obligations to collect and remit payments of principal and interest, manage payments of taxes and insurance, and otherwise administer the underlying loans. Accordingly, the Company recognized a November 2022 On November 3, 2022, the Company completed a $284.2 million securitization of 16 multi-family mortgage loans through a Freddie Mac-sponsored Q-Series transaction. The Company did not purchase any of the securities as part of this transaction. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $121,000 gain on sale was recognized, which included establishing servicing rights associated with this transaction. The Company was retained as the mortgage sub-servicer for Freddie Mac on the entire $284.2 million pool of loans. Beyond sub-servicing the loans, the Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any material breach in representation. In connection with the transaction a mortgage servicing right of $1.3 million was established. Loans Purchased The Company purchased $358.5 million and $551.1 million of loans during the years ended December 31, 2023 and 2022, respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | Note 6: 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. Internal Interest Rate Risk Management 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. The Company entered into a contract containing put options and interest rate floors on securities it acquired from a warehouse customer. These provide protection and prevent losses in value of certain available for sale securities. All changes in the fair market value of these options and floors associated with these securities have been included in other noninterest 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 consolidated statements of income. The fair value of derivative instruments with a positive fair value are reported in other assets in the consolidated balance sheets while derivative instruments with a negative fair value are reported in other liabilities in the consolidated balance sheets. The following table presents the notional amount and fair value of interest rate locks, forward contracts, interest rate swaps, put options and interest rate floors utilized by the Company at December 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 December 31, 2023 (In thousands) (In thousands) Interest rate lock commitments $ 16,526 Other assets/liabilities $ 140 $ 4 Forward contracts 25,500 Other assets/liabilities 4 391 Interest rate swaps 57,540 Other assets/liabilities 2,610 — Put options 748,374 Other assets 25,877 — Interest rate floors 748,374 Other assets 6,576 — $ 35,207 $ 395 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 The following table summarizes the periodic changes in the fair value of the derivative financial instruments on the consolidated statements of income for the years ended December 31, 2023, 2022, and 2021. Year Ended December 31, 2023 2022 2021 (In thousands) Derivative gain (loss) included in gain on sale of loans: Interest rate lock commitments $ 130 $ (218) $ (5,908) Forward contracts (includes pair-off settlements) 201 5,277 5,956 Interest rate swaps (420) 132 — Net gain (loss) (89) 5,191 48 Derivative gain (loss) included in other income: Put options 5,629 — — Interest rate floors 6,575 — — Net gain (loss) $ 12,204 $ — $ — 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) December 31, 2023 $ 607,169 Other assets/liabilities $ 12,426 $ 12,426 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 consolidated statements of income as follows: Year Ended December 31, 2023 2022 2021 (In thousands) Gross swap gains $ 9,385 $ 1,910 $ 2,039 Gross swap losses 9,385 1,910 2,039 Net swap gains (losses) $ — $ — $ — The Company pledged no collateral to secure its obligations under swap contracts at both December 31, 2023 and December 31, 2022. |
Loan Servicing
Loan Servicing | 12 Months Ended |
Dec. 31, 2023 | |
Loan Servicing | |
Loan Servicing | Note 7: Loan Servicing Mortgage and SBA loans serviced for others are not included in the accompanying consolidated balance sheets and include multi-family, single-family and SBA loans sold in the secondary market. The risks inherent in servicing assets relate primarily to changes in prepayments that result from shifts in interest rates. Call protection is in place on certain multi-family loans to deter from prepayments on a 10-year sliding scale. The Company’s total servicing portfolio, primarily managed in the Multi-family Mortgage Banking segment, had an unpaid principal balance of $26.0 billion and $21.9 billion as of December 31, 2023 and 2022, respectively. Included in the December 31, 2023 and 2022 amounts, respectively, were unpaid principal balances of loans serviced for others of $15.3 billion and $13.1 billion, an unpaid principal balance of loans sub-serviced for others of $2.1 billion and $1.9 billion, and other servicing balances of $721.1 million and $663.1 million. The Company also manages $7.9 billion and $6.2 billion of loans for customers that have loans on the balance sheet at December 31, 2023 and 2022, respectively. The servicing portfolio is primarily Ginnie Mae, Fannie Mae, and Freddie Mac loans and is a significant source of our noninterest income and deposits. The following summarizes the activity in servicing rights measured using the fair value method for the years ended December 31, 2023, 2022, and 2021: For the Year Ended December 31, 2023 2022 2021 (In thousands) Balance, beginning of period $ 146,248 $ 110,348 $ 82,604 Additions Purchased servicing 513 — 2,057 Originated servicing 14,755 27,124 30,421 Subtractions Paydowns (7,621) (10,985) (16,691) Sold servicing — — (438) Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model 4,562 19,761 12,395 Balance, end of period $ 158,457 $ 146,248 $ 110,348 Contractually specified servicing fees for retained, purchased and sub-serviced loans were $29.3 million, $21.4 million, and $20.7 million for the years ended December 31, 2023, 2022, and 2021, respectively. In connection with certain loan servicing and sub-servicing agreements, the Company is to reconcile the payments received monthly on these loans, for principal and interest, taxes, insurance, and replacement reserves. The funds are required to be maintained in separate trust accounts and not commingled with the Company’s general operating funds. At December 31, 2023 and 2022, the Company held restricted escrow funds for these loans at the Bank or other financial institution, amounting to $1.3 billion and $777.7 million, respectively. |
Goodwill and Intangibles
Goodwill and Intangibles | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangibles | |
Goodwill and Intangibles | Note 8: Goodwill and Intangibles Goodwill at December 31, 2023 remained unchanged compared to December 31, 2022. As of December 31, 2023, the Company’s market capitalization was above its book value, despite stock market volatility, rising interest rates and inflation concerns. Goodwill represents the amount by which the cost of an acquisition exceeded the fair value of net assets acquired. Goodwill is tested for impairment annually, or more frequently if events and circumstances exist that indicate a goodwill impairment test should be performed. Based upon management’s assessment and evaluation of goodwill at year-end, the likelihood that an impairment of the current carrying amount of goodwill has occurred is considered remote. 2023 2022 2021 Multifamily Banking Warehouse Total Multifamily Banking Warehouse Total Multifamily Banking Warehouse Total (In thousands) (In thousands) (In thousands) Balance, beginning of period $ 3,791 $ 8,353 $ 3,701 $ 15,845 $ 3,791 $ 8,353 $ 3,701 $ 15,845 $ 3,791 $ 8,353 $ 3,701 $ 15,845 Goodwill acquired during the period — — — — — — — — — — — — Post-acquisition adjustments — — — — — — — — — — — — Impairment losses — — — — — — — — — — — — Balance, end of period $ 3,791 $ 8,353 $ 3,701 $ 15,845 $ 3,791 $ 8,353 $ 3,701 $ 15,845 $ 3,791 $ 8,353 $ 3,701 $ 15,845 In conjunction with the acquisition of MCS on August 15, 2017, the Company recorded goodwill of $3.8 million in the Multi-family segment, after reflecting a purchase accounting adjustment of $412,000, related to contingent consideration for loans closed after the acquisition date, that increased goodwill during the year ended December 31, 2018. The Company also recorded intangible assets for licenses and trade names as summarized below. The licenses are being amortized over 84 months and trade names are being amortized over 120 months, both using the straight-line method. Amortization of these intangible assets was $218,000 for the years ended December 31, 2023, 2022, and 2021. In conjunction with the acquisition of FMBI on January 2, 2018, the Company recorded goodwill of $988,000 in the Banking segment during the year ended December 31, 2018. The Company also recorded intangible assets for core deposits, as summarized below. The core deposit intangibles are being amortized over 10 years using the accelerated sum of the years digits method. Amortization for these intangible assets was $38,000, $53,000 and $64,000 for the years ended December 31, 2023, 2022, and 2021, respectively. The assets associated with this goodwill and intangible assets were sold in January 2024 and were extinguished as of the transaction date. In conjunction with the acquisition of Farmers-Merchants National Bank of Paxton (“FMNBP”) on October 1, 2018, the Company recorded goodwill of $6.9 million in the Banking segment during the year ended December 31, 2018. A $333,000 purchase accounting adjustment, primarily related to the valuation of securities decreased goodwill during 2019. The Company also recorded intangible assets for core deposits, as summarized below. The core deposit intangibles are being amortized over 10 years using the accelerated sum of the years digits method. Amortization for these intangible assets was $188,000, $250,000 and $294,000 for the years ended December 31, 2023, 2022, and 2021, respectively. The assets associated with this goodwill and intangible assets were sold in January 2024 and were extinguished as of the transaction date. In conjunction with the acquisition of the assets of NattyMac, LLC on December 31, 2018, the Company recorded goodwill of $3.7 million in the Warehouse segment, after reflecting a $1.6 million transfer to intangible assets and a $271,000 purchase accounting adjustment related to contingent consideration that increased goodwill during 2019. Intangible assets of $1.6 million, related to customer lists, were recorded and amortized over 21 months using the straight-line method. Accumulated amortization of these intangible assets was $1.6 million and are fully amortized as of December 31, 2023, 2022, and 2021. 2023 2022 2021 Gross Gross Gross Carrying Accumulated Carrying Accumulated Carrying Accumulated Amount Amortization Total Amount Amortization Total Amount Amortization Total (In thousands) (In thousands) (In thousands) Licenses $ 1,370 $ (1,247) $ 123 $ 1,370 $ (1,052) $ 318 $ 1,370 $ (856) $ 514 Trade names 224 (143) 81 224 (120) 104 224 (98) 126 Customer list — — — — — — — — — Core deposit intangible 2,417 (1,879) 538 2,417 (1,653) 764 2,417 (1,350) 1,067 Total intangible Assets $ 4,011 $ (3,269) $ 742 $ 4,011 $ (2,825) $ 1,186 $ 4,011 $ (2,304) $ 1,707 Estimated amortization expense for future years is as follows (in thousands): Year ending December 31, 2024 $ 683 2025 23 2026 22 2027 14 2028 — Thereafter — Total $ 742 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Premises and Equipment | |
Premises and Equipment | Note 9: Premises and Equipment Major classifications of premises and equipment, stated at cost, are as follows: December 31, 2023 2022 (In thousands) Land $ 8,099 $ 3,696 Buildings 29,291 29,661 Building and remodeling in progress 2,489 — Leasehold improvements 352 310 Furniture, fixtures, equipment and software 13,321 10,500 Total cost 53,552 44,167 Accumulated depreciation (11,210) (8,729) Net premises and equipment $ 42,342 $ 35,438 The Company entered into a contract on September 15, 2023 for the construction of a new office building to expand its existing headquarters, which is expected to cost approximately $27.6 million and be completed by June 2025. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases. | |
Leases | Note 10: Leases The Company has operating leases for various locations with terms ranging from one The Company has operating lease right-of-use assets of $10.1 million and $11.0 million as of December 31, 2023 and 2022, respectively, and operating lease right-of-use liabilities of $11.3 million and $12.0 million as of December 31, 2023 and 2022, respectively. Balance sheet, income statement and cash flow detail regarding operating leases follows: December 31, 2023 December 31, 2022 Balance Sheet (In thousands) Operating lease right-of-of use asset (in other assets) $ 10,060 $ 10,969 Operating lease liability (in other liabilities) 11,251 11,992 Weighted average remaining lease term (years) 6.0 6.5 Weighted average discount rate 2.89% 2.65% Maturities of lease liabilities: One year or less 2,441 2,181 Year two 2,064 2,321 Year three 2,100 1,881 Year four 2,046 1,911 Year five 1,438 1,853 Thereafter 2,128 2,902 Total future minimum lease payments 12,217 13,049 Less: imputed interest 966 1,057 Total $ 11,251 $ 11,992 Year Ended Year Ended December 31, 2023 December 31, 2022 Income Statement (In thousands) (In thousands) Components of lease expense: Operating lease cost (in occupancy and equipment expense) $ 2,438 $ 2,033 Year Ended Year Ended December 31, 2023 December 31, 2022 Cash Flow Statement (In thousands) (In thousands) Supplemental cash flow information: Operating cash flows from operating leases $ 2,129 $ 1,461 |
Other Assets and Receivables
Other Assets and Receivables | 12 Months Ended |
Dec. 31, 2023 | |
Other Assets and Receivables. | |
Other Assets and Receivables | Note 11: Other Assets and Receivables The following items are included in other assets and receivables in the consolidated balance sheets. Investment in Low-Income Housing Tax Credit Limited Partnerships and LLCs The Company invests in low-income housing tax credit limited partnerships and LLCs. At December 31, 2023 and 2022, the balance of the investments for low-income housing tax credit limited partnerships and LLCs was $131.4 million and $73.0 million, respectively. The Company became a minority investor in several limited partnerships or LLCs of syndicated funds during 2023, 2022, and 2021 in which it is obligated to make additional investments over the next several years. There was an obligation of $61.4 million and $36.8 million reflected in the investment balances at December 31, 2023 and 2022, respectively. During the years ended December 31, 2023, 2022, and 2021 the Company recorded amortization expense of $7.9 million, $2.1 million, and $ 2.0 million, respectively. Expected tax credits related to these investments were $8.4 million for the 2023 tax year, $2.1 million for the 2022 tax year, and $2.0 million for the 2021 tax year. The Company expects to receive additional tax credits and other benefits in 2024 and will continue to amortize these investments based on the proportional amortization method. Joint Ventures The Company has investments in various joint ventures totaling $52.2 million and $37.5 million at December 31, 2023 and 2022, respectively. These investments are primarily made of up of investments in debt funds totaling $33.2 million and $29.8 million at December 31, 2023 and 2022, respectively. The Company was a primary beneficiary in only one of its joint venture investments, which was acquired in 2023 for $11.0 million. Results from the remaining entities have not been consolidated in any year and are accounted for under the equity method of accounting. The Company is obligated to make additional investments over the next several years. There was an obligation of $4.0 million and $3.5 million reflected in the investment balance at December 31, 2023 and 2022, respectively. See Note 12: Variable Interest Entities (VIEs) for additional information about VIE’s. Other items included in other assets and receivables on the consolidated balance sheets are disclosed elsewhere, or are not individually significant. |
Variable Interest Entities (VIE
Variable Interest Entities (VIEs) | 12 Months Ended |
Dec. 31, 2023 | |
Variable Interest Entities (VIEs). | |
Variable Interest Entities (VIEs) | Note 12: 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 also has deemed as VIEs, a REMIC trust that was established in conjunction with the September 2022 multi-family loan sale and securitization transaction, as well as a second REMIC trust that was established in December 2023 with a related party in conjunction with a loan sale and securitization. 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 December 31, 2023 the Company determined it was not the primary beneficiary for most 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 unconsolidated VIEs consists of the capital invested plus any unfunded equity commitments. These investments are recorded in other assets and other liabilities on our consolidated balance sheet. The table below reflects the size of the VIEs as well as our maximum exposure to loss in connection with VIEs at December 31, 2023 and 2022. The totals in the table do not include bridge loans. Please see Note 20: Related Party Transactions Total Total Maximum Assets ($ in thousands) Assets Liabilities Exposure to Loss (In thousands) December 31, 2023 Low-income housing credit investments $ 118,741 $ 35,099 $ 118,741 Debt funds 33,221 2,752 33,221 Total Unconsolidated VIEs $ 151,962 $ 37,851 $ 151,962 December 31, 2022 Low-income housing credit investments 22,310 22,043 22,310 Debt funds 29,815 3,521 29,815 Total Unconsolidated VIEs $ 52,125 $ 25,564 $ 52,125 In addition to the table above, the Company is also involved with a VIE in a REMIC trust that was established in September 2022 in conjunction with a loan sale and securitization. Although the trust is not recognized on the balance sheet, the maximum exposure to loss is the carrying value of the security acquired as part of the securitization transaction, which was $719.7 million and $871.8 million at December 31, 2023 and 2022, respectively. The Company is also involved with a VIE in a REMIC trust that was established in December 2023 with a related party in conjunction with a loan sale and securitization. Although the trust is not recognized on the balance sheet, the maximum exposure to loss is the carrying value of the security acquired as part of the securitization transaction, which was $472.5 million at December 31, 2023. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2023 | |
Deposits | |
Deposits | Note 13: Deposits Deposits were comprised of the following at and December 31, 2023 and 2022: December 31, 2023 2022 (In thousands) Noninterest-bearing deposits Demand deposits $ 520,070 $ 326,875 Total noninterest-bearing deposits 520,070 326,875 Interest-bearing deposits Demand deposits $ 5,381,067 $ 3,720,363 Savings deposits 2,992,921 3,034,818 Certificates of deposit 5,167,402 2,989,289 Total interest-bearing deposits 13,541,390 9,744,470 Total deposits $ 14,061,460 $ 10,071,345 Maturities for certificates of deposit are as follows: December 31, 2023 (In thousands) Due within one year $ 5,022,745 Due in one year to two years 143,286 Due in two years to three years 942 Due in three years to four years 429 Due in four years to five years — Due in five years to six years — $ 5,167,402 Certificates of deposit of $250,000 or more totaled $411.2 million at December 31, 2023 and $186.4 million at December 31, 2022. Brokered deposit amounts at December 31, 2023 and 2022, were as follows: December 31, 2023 2022 (In thousands) Brokered certificates of deposit $ 4,465,825 $ 2,681,198 Brokered savings deposits 589 81,532 Brokered deposit on demand accounts 1,504,230 13 $ 5,970,644 $ 2,762,743 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2023 | |
Borrowings | |
Borrowings | Note 14: Borrowings Borrowings were comprised of the following at December 31, 2023 and 2022: December 31, 2023 2022 (In thousands) Federal Reserve discount window borrowings $ — $ 20,000 Short-term subordinated debt 64,922 21,000 FHLB advances 771,392 859,392 American Financial Exchange borrowing — 30,000 Credit linked notes 119,879 — Other borrowings 7,934 — Total borrowings $ 964,127 $ 930,392 Federal Reserve Discount Window Borrowings Federal Reserve discount window borrowings are secured by the collateral value of commercial, agricultural, construction and 1-4 family residential real estate loans totaling $3.1 billion and $2.4 billion as of December 31, 2023 and 2022, respectively. This arrangement has a maximum borrowing limit of collateral pledged multiplied by an advance rate. Borrowing maturities can range from 24 hours to up to a term of 90 days. Life to date, all Company borrowings were for a 24-hour period. As of December 31, 2023 and 2022, the outstanding balance was $0 and $20.0 million, respectively. Short-Term Subordinated Debt The Company entered into a warehouse financing arrangement in April 24, 2018 and was revised in December 2023, whereby a customer agreed to invest up to $60.0 million in the Company’s subordinated debt. The subordinated debt balance as of December 31, 2023 and 2022 was $39.0 million and $21.0 million, respectively. As of December 31, 2023, interest on the debt is paid quarterly by the Company at a rate equal to SOFR, plus 300 basis points, plus additional interest equal to 50% of the earnings generated. There is also a guaranteed interest rate floor associated with these earnings. The agreement is automatically renewed annually on June 30 th Additionally, the Company entered into an additional warehouse financing agreement on April 14, 2023 and revised on July 20, 2023, whereby a customer agreed to invest up to $30 million in the Company’s subordinated debt. The subordinated debt balance as of December 31, 2023 and 2022 was $25.9 million and $0, respectively. As of December 31, 2023, interest on the debt is paid quarterly by the Company at a rate equal to SOFR, plus 300 basis points, plus additional interest equal to 50% of the earnings generated. The agreement is automatically renewed annually on June 30 th renewable date, of its desire not to continue the relationship. As of December 31, 2023, neither party had made a notification of its intent to cancel this arrangement. FHLB Advances FHLB advances are secured by the collateral value of mortgage loans totaling $3.4 billion and $2.8 billion at December 31, 2023 and 2022, respectively. In addition, securities available for sale, securities held to maturity, and securities purchased under agreements to resell with a carrying value of $971.3 million and $298.6 million were pledged as of December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, the outstanding balances were $771.4 million and $859.4 million, respectively. At December 31, 2023 the FHLB advances had interest rates ranging from 2.18% to 5.52%, and ranged from 1.62% to 4.9% at December 31, 2022. These rates were subject to restrictions or penalties in the event of prepayment. American Financial Exchange Borrowing The Company joined the American Financial Exchange (“AFX”) in January of 2021. During the year ended December 31, 2023, the Company utilized unsecured overnight lending arrangements to borrow from other AFX members through extensions of credit. At December 31, 2023 and 2022, members of the AFX offered a combined borrowing limit of $390.0 million and $500.0 million, respectively, but availability fluctuates daily. As of December 31, 2023, the outstanding balance was $0. As of December 31, 2022, the outstanding balance was $30.0 million with a rate of 4.60%. Rates are set daily by participating members and may vary by lending member. Credit Linked Notes On March 30, 2023, the Company 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 maintains 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 December 31, 2023, the effective interest rate was 20.9% and the balance, net of debt discount, of the notes was $119.9 million. 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 aggregate unpaid principal of the notes. As of December 31, 2023, the account included $36.4 million of restricted cash and $89.0 million in short-term Treasury securities. These are reported as cash equivalents and securities available for sale in the consolidated balance sheets. Other Borrowings On May 4, 2023, the Company entered into a debt agreement that ultimately funded from a Sponsor Improvement Contribution as part of a low-income tax credit syndication transaction. The debt balance as of December 31, 2023 and 2022 was $7.9 million and $0, respectively. As of December 31, 2023, interest on the debt is paid by the Company at a rate equal to 1%. The agreement has a maturity date of December 31, 2047. Maturities of borrowings were as follows at December 31, 2023: Short-Term FHLB Credit Linked Other Borrowings Subordinated Debt Advances Notes Borrowings Total Due within one year $ — $ 754,284 $ — $ — $ 754,284 Due in one year to two years 64,922 15,759 — — 80,681 Due in two years to three years — 260 — — 260 Due in three years to four years — 150 — — 150 Due in four years to five years — 59 119,879 — 119,938 Thereafter — 880 — 7,934 8,814 $ 64,922 $ 771,392 $ 119,879 $ 7,934 $ 964,127 At December 31, 2023, the Company had excess borrowing capacity of approximately $6.0 billion with the FHLB and the Federal Reserve discount window, based on available collateral. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | Note 15: Income Taxes The provision for income taxes includes these components for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, 2023 2022 2021 (In thousands) Income tax expense Current tax payable Federal $ 72,537 $ 51,306 $ 55,936 State (1,422) 15,384 16,580 Deferred tax payable Federal (503) 4,237 4,055 State (1,939) 494 1,255 Income tax expense $ 68,673 $ 71,421 $ 77,826 Effective tax rate 19.7 % 24.5 % 25.5 % A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax expense for the years ended December 31, 2023, 2022, and 2021, is shown below: Year Ended December 31, 2023 2022 2021 (In thousands) Computed at the statutory rate -21% $ 73,061 $ 61,140 $ 64,035 Increase/(decrease) resulting from State income taxes (2,655) 12,544 14,090 Tax Credits net of related amortization (467) 57 8 Other (1,266) (2,320) (307) Actual tax expense $ 68,673 $ 71,421 $ 77,826 The tax effects of temporary differences related to deferred taxes shown on the balance sheet were: December 31, 2023 2022 (In thousands) Deferred tax assets Allowance for credit losses on loans $ 20,572 $ 13,983 Unrealized loss on securities available for sale 779 3,530 Fair value adjustments on acquisitions — 51 Other 4,727 3,945 Total assets 26,078 21,509 Deferred tax liabilities Depreciation (2,779) (2,809) Intangible assets (385) (338) Servicing rights (37,290) (36,043) Limited partnership investments (2,018) (1,831) State tax receivable (1,711) — Derivative assets (1,573) — Other (245) (101) Total liabilities (46,001) (41,122) Net deferred tax liability $ (19,923) $ (19,613) |
Regulatory Matters
Regulatory Matters | 12 Months Ended |
Dec. 31, 2023 | |
Regulatory Matters | |
Regulatory Matters | Note 16: Regulatory Matters The Company, Merchants Bank, and FMBI (prior to the January 26, 2024 sale of its branches and the merger of its remaining charter into Merchants Bank) 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 December 31, 2023 and December 31, 2022, that the Company, Merchants Bank, and FMBI met all capital adequacy requirements. As of December 31, 2023 and December 31, 2022, the most recent notifications from the Board of Governors of the Federal Reserve System (“Federal Reserve”) categorized the Company as well capitalized and most recent notifications from the Federal Deposit Insurance Corporation (“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 Amount to be Well Minimum Amount Capitalized with To Be Well Actual Basel III Buffer (1) Capitalized (1) Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2023 Total capital (1) Company $ 1,772,195 11.6 % $ 1,598,260 10.5 % $ — N/A % Merchants Bank 1,724,505 11.5 % 1,577,434 10.5 % 1,502,318 10.0 % FMBI 40,613 21.1 % 20,209 10.5 % 19,247 10.0 % Tier I capital (1) Company 1,686,202 11.1 % 1,293,830 8.5 % — N/A % Merchants Bank 1,639,171 10.9 % 1,276,970 8.5 % 1,201,854 8.0 % FMBI 39,953 20.8 % 16,360 8.5 % 15,398 8.0 % Common Equity Tier I capital (1) Company 1,186,594 7.8 % 1,065,507 7.0 % — N/A % Merchants Bank 1,639,171 10.9 % 1,051,623 7.0 % 976,507 6.5 % FMBI 39,953 20.8 % 13,473 7.0 % 12,511 6.5 % Tier I capital (1) Company 1,686,202 10.1 % 832,706 5.0 % — N/A % Merchants Bank 1,639,171 10.1 % 815,191 5.0 % 815,191 5.0 % FMBI 39,953 11.5 % 17,391 5.0 % 17,391 5.0 % (1) As defined by regulatory agencies. Minimum Amount to be Well Minimum Amount Capitalized with To Be Well Actual Basel III Buffer (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 10.5 % $ — N/A % Merchants Bank 1,427,738 11.7 % 975,853 10.5 % 1,219,817 10.0 % FMBI 34,769 11.3 % 24,703 10.5 % 30,878 10.0 % Tier I capital (1) Company 1,452,456 11.7 % 744,662 8.5 % — N/A % Merchants Bank 1,372,941 11.3 % 731,890 8.5 % 975,853 8.0 % FMBI 34,054 11.0 % 18,527 8.5 % 24,703 8.0 % Common Equity Tier I capital (1) Company 952,848 7.7 % 558,497 7.0 % — N/A % Merchants Bank 1,372,941 11.3 % 548,917 7.0 % 792,881 6.5 % FMBI 34,054 11.0 % 13,895 7.0 % 20,071 6.5 % Tier I capital (1) Company 1,452,456 11.7 % 497,604 5.0 % — N/A % Merchants Bank 1,372,941 11.3 % 487,511 5.0 % 609,389 5.0 % FMBI 34,054 10.7 % 12,702 5.0 % 15,878 5.0 % (1) As defined by regulatory agencies. The Company’s principal source of funds for dividend payments to shareholders is dividends received from Merchants Bank and FMBI (prior to the January 26, 2024 sale of its branches and the merger of its remaining charter into Merchants Bank). Banking statutes and regulations limit the maximum amount of dividends that a bank may pay without requesting prior approval of regulatory agencies. Under Indiana law, Merchants Bank may not pay a dividend if such dividend would be greater than retained net income (as defined) for the current year plus those for the previous two years, subject to the capital requirements described above. Under Illinois law, FMBI may not pay dividends in an amount greater than its current net profits after deducting losses and bad debts out of undivided profits provided that its surplus equals or exceeds its capital. At December 31, 2023, the amount available, without prior regulatory approval, for dividends which could be paid by Merchants Bank to the Company was $601.4 million. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share | |
Earnings Per Share | Note 17: Earnings Per Share Earnings per share were computed as follows for years ended December 31, 2023, 2022, and 2021. Year Ended December 31, 2023 2022 2021 Weighted- Per Weighted- Per Weighted- Per Net Average Share Net Average Share Net Average Share Income Shares Amount Income Shares Amount Income Shares Amount (In thousands) (In thousands) (In thousands) Net income $ 279,234 $ 219,721 $ 227,104 Dividends on preferred stock (34,670) (25,983) (20,873) Net income allocated to common shareholders $ 244,564 $ 193,738 $ 206,231 Basic earnings per share 43,224,042 $ 5.66 43,164,477 $ 4.49 43,172,078 $ 4.78 Effect of dilutive securities—restricted stock awards 121,757 152,427 153,225 Diluted earnings per share 43,345,799 $ 5.64 43,316,904 $ 4.47 43,325,303 $ 4.76 |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2023 | |
Common Stock | |
Common Stock | Note 18: Common Stock Repurchase of Common Stock: During the year ended December 31, 2022, the Company repurchased 165,037 shares for $3.9 million at an average price of Year Ended Year Ended December 31, December 31, 2023 2022 Dollar value of shares repurchased $ — $ 3,935,333 Shares repurchased (1) — 165,037 Average price paid per share $ — $ 23.85 (1) On November 17, 2021, the Company announced an increase in authorization for its stock repurchase program, up to $75,000,000 of common stock, expiring December 31, 2023. On April 29, 2022, the Company entered into a Rule 10b5-1 plan (the “10b5-1 Plan”) with a broker for the repurchase of shares of its common stock commencing on May 3, 2022. The details of this repurchase plan were provided in the Form 8-K filed by the Company on May 24, 2022. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2023 | |
Preferred Stock | |
Preferred Stock | Note 19: Preferred Stock Public Offerings of Preferred Stock: Series A The Series A Preferred Stock have no voting rights with respect to matters that generally require the approval of our common shareholders. Dividends on the Series A Preferred Stock, to the extent declared by the Company’s board, are payable quarterly. per share. As of the redemption date the Series A Preferred Stock will not have any accrued but unpaid dividends. The Company will redeem the Series A Preferred Stock using cash on hand. Series B 1/40 th The Series B Preferred Stock have no voting rights with respect to matters that generally require the approval of our common shareholders. Dividends on the Series B Preferred Stock, to the extent declared by the Company’s board, are payable quarterly. The Company may redeem the Series B Preferred Stock, in whole or in part, at its option, on any dividend payment date on or after October 1, 2024, subject to the approval of the appropriate federal banking agency, at the liquidation preference, plus any declared and unpaid dividends (without regard to any undeclared dividends) to, but excluding, the date of redemption. Series C 1/40th The Series C Preferred Stock have no voting rights with respect to matters that generally require the approval of our common shareholders. Dividends on the Series C Preferred Stock, to the extent declared by the Company’s board, are payable quarterly. The Company may redeem the Series C Preferred Stock, in whole or in part, at its option, on any dividend payment date on or after April 1, 2026, subject to the approval of the appropriate federal banking agency, at the liquidation preference, plus any declared and unpaid dividends (without regard to any undeclared dividends) to, but excluding, the date of redemption. Series D 1/40 th option to purchase additional shares under the associated underwriting agreement, resulting in an additional $12.1 million in net proceeds, after deducting $0.4 million in underwriting discounts. The Series D Preferred Stock have no voting rights with respect to matters that generally require the approval of our common shareholders. Dividends on the Series D Preferred Stock, to the extent declared by the Company’s board, are payable quarterly. The Company may redeem the Series D Preferred Stock, in whole or in part, at its option, on any dividend payment date on or after October 1, 2027, subject to the approval of the appropriate federal banking agency, at the liquidation preference, plus any declared and unpaid dividends (without regard to any undeclared dividends) to, but excluding, the date of redemption. Private Placement Offerings of Preferred Stock: On April 15, 2021, all 41,625 shares of the Company’s 8% preferred stock were redeemed for $41.6 million, plus unpaid dividends of $139,000. On May 6, 2021 these 8% preferred shareholders participated in a private offering to replace their redeemed shares with Series C Preferred Stock. Accordingly, 46,181 shares (1,847,233 depositary shares) of Series C Preferred Stock were issued at a price of $25 per depositary share. The total capital raised from the private offering was $46.2 million, net of $23,000 in expenses. Repurchase of Preferred Stock: On April 15, 2021, all 41,625 shares of the 8% Preferred Stock were redeemed for $41.6 million, plus unpaid dividends of $139,000, as noted above. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions | |
Related Party Transactions | Note 20: Related Party Transactions The Company has entered into transactions with certain directors, executive officers, and their affiliates or associates (related parties). Such transactions were made in the ordinary course of business on substantially the same terms and conditions, including interest rates and collateral, as those prevailing at the same time for comparable transactions with other customers, and did not, in the opinion of management, involve more than normal credit risk or present other unfavorable features. Legal Services The Company retained a law firm of which a Board member of Merchants Bank is a partner. Services rendered are primarily related to documentation of current loan originations, and loan collections from Merchants Bank’s borrowers. Fees paid to the law firm, both directly and indirectly, totaled $9.4 million, $9.4 million, and $6.6 million for the years ended December 31, 2023, 2022 and 2021 respectively. Speaking Engagements The Company made payments to a Board member of Merchants Bank during 2023 for speaking engagements at corporate events. Fees paid to the Board member totaled $30,000 for the year ended December 31, 2023. Corporate Travel The Company made payments to a company that is owned by a Board member and executive of Merchants Bank. Payments were made for charter flights taken during 2023 as part of corporate travel expenses. Payments made to the company totaled $62,000 for the year ended December 31, 2023. Investments Investments in a Senior Housing and Healthcare Entity The Company holds a 30% ownership in an LLC that provides funding to the senior housing and healthcare sectors that is accounted for using the equity method of accounting. Transactions with this entity are included in the chart below. Investments in Low-Income Housing Tax Credit Syndications In 2020 the Company launched a low-income housing tax credit syndication business through one of its subsidiaries and serves as a general partner, limited partner, or managing member. This business is generally funded through capital investments from external investors and in some cases by Merchants Bank, in the form of limited partnership or managing member interests, and bridge loans. Merchants Bank also serves as a warehouse to fund certain low-income housing tax credit projects until they are sold into the syndicated funds. Due to the short time between purchase and sale, no gains or losses were recognized on the sales during 2023, 2022 or 2021. Transactions with these entities are included in the chart below. Investments in Debt Financing Entities The Company has invested in single-family, multi-family, and healthcare debt financing entities (debt funds) through its subsidiaries. This business is funded through capital investments from external investors and by the Company, in the form of limited partnership interests. During 2020, one of the debt funds was wholly owned by the Company. During 2021, this debt fund was deconsolidated see Note 1: Nature of Operations and Summary of Significant Accounting Policies The table below provides a summary of the transactions with related entities for which the Company holds an ownership investment. Additional information regarding these investments is provided in Note 12: Variable Interest Entities. Year Ended December 31, 2023 2022 2021 (In thousands) Investments in Senior Housing and Healthcare Entity Origination fees received from borrowers referred by the LLC $ 12,669 $ 24,830 $ 17,848 Fees paid to LLC for loans referred and originated (9,866) (17,145) (14,512) Servicing income received for loans referred by the LLC 561 417 69 Servicing income participation paid to LLC (281) (209) (34) Income from investment in LLC 1,612 4,129 1,369 Distributions received from LLC 993 3,795 405 Interest income paid to LLC for loans originated and referred by the LLC (3,587) (6,725) (4,522) Investments in LIHTC Syndications Interest income, financing (1) $ 16,592 $ 11,012 $ 8,030 Loans outstanding, net of participations sold, to syndicated funds 127,449 49,004 18,586 Investments in Debt Financing Entities Income from investments, servicing, interest income, and management of debt funds $ 29,992 $ 4,642 $ 1,139 Distributions received from debt funds 890 512 — Loans outstanding, net of participations sold, to debt funds 108,055 35,732 20,700 Loans sold to debt funds 102,336 884,247 273,914 Gains (losses) recognized on loans sold to debt funds (263) — — Carrying value, at year-end, of held-to-maturity securities purchased from debt funds 472,539 248,366 — (1) Financing fees, net of costs to originate, are deferred and recognized in income over the life of the loan. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2023 | |
Employee Benefits | |
Employee Benefits | Note 21: Employee Benefits The Company offers employees a 401(k) plan. Pursuant to the plan agreement, matching contributions equal to 100% of the employees’ elective deferrals which did not exceed 3% of the employees’ compensation were made. In 2022, the Company began providing contributions to employee 401(k) plans, regardless of their participation levels. Employees generally receive 3% of their salary, with some executives subject to certain limitations. Employer contributions to the plans were $1.9 million, $1.6 million, and $1.4 million for the years ended December 31, 2023, 2022, and 2021, 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 $1.0 million, $860,000 and $595,000 for the years ended December 31, 2023, 2022, and 2021, respectively. The Company contributed 33,293 shares, 20,709 shares, and 29,149 shares to the ESOP for the years ended December 31, 2023, 2022, and 2021, respectively. |
Share-Based Payment Plans
Share-Based Payment Plans | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Plans | |
Share-Based Payment Plans | Note 22: 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”). Additionally, the Compensation Committee of the Board of Directors approved a plan during 2018 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 non-executive directors to receive a portion of their annual fees, issued quarterly, in the form of restricted common stock equal to $50,000 per member, rounded up to the nearest whole share, to be effective after the Company’s annual meeting of shareholders held in May 2021. The following chart provides equity-based incentive awards and Board of Directors fees paid in shares for the years ending December 31, 2023, 2022, and 2021. Year Ended December 31, 2023 2022 2021 ($ in thousands) Equity-based incentive awards to Company officers: Shares issued 84,335 64,962 23,435 Expenses recognized $ 2,671 $ 1,870 $ 1,198 Unvested shares awarded 256,192 280,974 374,598 Unrecognized compensation costs $ 6,801 $ 5,817 $ 4,499 Equity-based retainer fees to non-executive Board of Directors: Shares issued 12,173 12,443 6,870 Expenses recognized $ 351 $ 325 $ 188 |
Disclosures about Fair Value of
Disclosures about Fair Value of Assets and Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Disclosures about Fair Value of Assets and Liabilities | |
Disclosures about Fair Value of Assets and Liabilities | Note 23: Disclosures About Fair Value of Assets and Liabilities 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 Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 Unobservable inputs supported by little or no market activity and are significant to the fair value of the assets or liabilities 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 December 31, 2023 and 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) December 31, 2023 Mortgage loans in process of securitization $ 110,599 $ — $ 110,599 $ — Securities available for sale: Treasury notes 128,968 128,968 — — Federal agencies 247,755 — 247,755 — Mortgage-backed - Agency 14,467 — 14,467 — Mortgage-backed - Non-agency residential - fair value option 485,500 — — 485,500 Mortgage-backed - Agency - fair value option 236,997 — 236,997 Loans held for sale 86,663 — 86,663 — Servicing rights 158,457 — — 158,457 Derivative assets: Interest rate lock commitments 140 — — 140 Forward contracts 4 — 4 — Interest rate swaps 2,610 — 2,610 — Interest rate swaps (back-to-back) 12,426 — 12,426 — Put options 25,877 — 7,223 18,654 Interest rate floors 6,576 — — 6,576 Derivative liabilities: Interest rate lock commitments 4 — — 4 Forward contracts 391 — 391 — Interest rate swaps (back-to-back) 12,426 — 12,426 — 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 - Agency 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 Forward contracts 46 — 46 — Interest rate swaps 3,030 — 3,030 — Interest rate swaps (back-to-back) 3,041 — 3,041 — Derivative liabilities: Interest rate lock commitments 23 — — 23 Forward contracts 52 — 52 — 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 years ended December 31, 2023 and 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, Securities Available for Sale, and Securities with a Fair Value Option Election 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 an independent 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 Interest rate lock commitments - 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. Forward sales 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. Interest rate swaps – The Company estimates the fair value of interest rate swaps based on prices that are obtained from a third party that uses observable market inputs, thereby supporting a Level 2 classification. Put options - The fair value of put options are linked to securities available for sale that are accounted for using the fair value option and are classified as either Level 2 or Level 3 on the hierarchy. The put options are classified as Level 2 or Level 3 in the hierarchy, depending upon the magnitude of observable inputs in the valuation of the securities. These valuations are estimated by a third party. Interest rate floors - The fair value of interest rate floors is linked to securities available for sale that are accounted for using the fair value option. The value of the interest rate floors is based on estimated discounted cash flows that are based on inputs that are not readily observable and, thus, are classified as Level 3 on the hierarchy. These valuations are estimated a third party. Changes in fair value of the Company’s derivative financial instruments are recognized through noninterest income and/or noninterest expenses on its 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: Year Ended December 31, 2023 2022 2021 (In thousands) Servicing rights Balance, beginning of period $ 146,248 $ 110,348 $ 82,604 Additions Purchased servicing 513 — 2,057 Originated servicing 14,755 27,124 30,421 Subtractions Paydowns (7,621) (10,985) (16,691) Sales of servicing — — (438) Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model 4,562 19,761 12,395 Balance, end of period $ 158,457 $ 146,248 $ 110,348 Available for sale securities - Mortgage-backed - Non-Agency residential - fair value option Balance, beginning of period $ — $ — $ — Purchased securities 483,906 — — Changes in fair value 1,594 — — Balance, end of period $ 485,500 $ — $ — Derivative Assets - put options Balance, beginning of period $ — $ — $ — Purchases 20,248 — — Changes in fair value (1,594) — — Balance, end of period $ 18,654 $ — $ — Derivative Assets - interest rate floors Balance, beginning of period $ — $ — $ — Purchases 6,576 — — Balance, end of period $ 6,576 $ — $ — Derivative Assets - interest rate lock commitments Balance, beginning of period $ 28 $ 264 $ 6,131 Changes in fair value 112 (236) (5,867) Balance, end of period $ 140 $ 28 $ 264 Derivative Liabilities - interest rate lock commitments Balance, beginning of period $ 23 $ 41 $ — Changes in fair value (19) (18) 41 Balance, end of period $ 4 23 $ 41 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 December 31, 2023 and 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) December 31, 2023 Impaired loans (collateral-dependent) $ 47,026 $ — $ — $ 47,026 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 December 31, 2023: Available for sale securities - Mortgage-backed - Non-Agency residential - fair value option $ 485,500 Discounted cash flow Market credit spread 2% 2% Collateral dependent loans $ 47,026 Market comparable properties Marketability discount 0% - 100% 2% Servicing rights - Multi-family $ 122,218 Discounted cash flow Discount rate 8% - 13% 9% Constant prepayment rate 0% - 50% 7% Servicing rights - Single-family $ 30,959 Discounted cash flow Discount rate 10% - 11% 10% Constant prepayment rate 6% - 16% 7% Servicing rights - SBA $ 5,280 Discounted cash flow Discount rate 16% 16% Constant prepayment rate 3% - 14% 9% Derivative assets: Interest rate lock commitments $ 140 Discounted cash flow Loan closing rates 45% - 99% 78% Put options $ 18,654 Intrinsic option value Market credit spread 2% 2% Interest rate floors $ 6,576 Discounted cash flow Discount rate 6%-7% 7% Derivative liabilities - interest rate lock commitments $ 4 Discounted cash flow Loan closing rates 45% - 99% 78% At December 31, 2022: Collateral-dependent impaired 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. Securities Available for Sale with a Fair Value Option Election and Related Derivate Financial Instruments The significant unobservable input used in the fair value measurement of certain securities available for sale and their related put options include market credit spreads that can be impacted by market conditions and drive a significant amount of a market participant’s valuation of the security and its related put option. The impact of changes to the unobservable inputs for the securities is mitigated by changes to the unobservable inputs for the put options, which are valued in opposite directions, so as to minimize the financial impact to the Company. The significant unobservable input used in the fair value measurement of the interest rate floor derivative associated with certain securities available for sale include the discount rate that can have a significant impact on the value of the derivative. Another variable that affects the floor value is the forward interest curve, which is observable, but changes with market conditions as interest rates and future interest rate expectations change. 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 December 31, 2023 and 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) December 31, 2023 Financial assets: Cash and cash equivalents $ 584,422 $ 584,422 $ 584,422 $ — $ — Securities purchased under agreements to resell 3,349 3,349 — 3,349 — Securities held to maturity 1,204,217 1,203,535 — 484,288 719,247 FHLB stock 48,578 48,578 — 48,578 — Loans held for sale 3,058,093 3,058,093 — 3,058,093 — Loans receivable, net 10,127,801 10,088,468 — — 10,088,468 Interest receivable 91,346 91,346 — 91,346 — Financial liabilities: Deposits 14,061,460 14,062,457 8,894,058 5,168,399 — Short-term subordinated debt 64,922 64,922 — 64,922 — FHLB advances 771,392 771,029 — 771,029 — Other borrowing 7,934 7,934 — 7,934 — Credit linked notes 119,879 119,878 — 119,878 — Interest payable 43,423 43,423 — 43,423 — 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 — |
Significant Estimates and Conce
Significant Estimates and Concentrations | 12 Months Ended |
Dec. 31, 2023 | |
Significant Estimates and Concentrations | |
Significant Estimates and Concentrations | Accounting principles generally accepted in the United States of America require disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Estimates related to the provision and allowance for credit losses are reflected in the notes regarding loans and the allowance for credit losses on loans ( Notes 1 and 5 Notes 1 and 7 Note 23 Note 25 Mortgage-backed Securities and Secondary Mortgage Market Programs The Company is involved in government programs for issuing mortgage-backed securities (MBS). The objective of these programs is to facilitate secondary market activities in order to provide funding for the multi-family mortgage market. The Company is subject to cancellation of secondary mortgage market programs, rapid increases in general interest rates, and competition associated with conventional mortgage programs. In addition, the Company could be responsible for covering shortfalls in amounts due to investors for delinquencies or foreclosures. No amounts have been reported in the consolidated financial statements since management believes that no near term financial losses will be incurred and these MBS programs will not be significantly affected by the controlling regulatory bodies. Liquidity In order to withstand rapidly changing market dynamics, the Company’s business model minimizes concentration risk by having significant sources of liquidity. It emphasizes the origination and investment in floating rate loans that adjust when market interest rates change and thereby minimize the interest rate risk inherent in fixed rate loans that lose value when rates rise, as they did during 2022 and most of 2023. The Company also conservatively matches the duration of assets and liabilities. Its most liquid assets are in cash, short-term investments, including interest-bearing demand deposits, mortgage loans in process of securitization, loans held for sale, and warehouse repurchase agreements included in loans receivable. Taken together with its unused borrowing capacity of $6.0 billion, these totaled $10.6 billion, or 62% of its $17.0 billion total assets at December 31, 2023. As of December 31, 2023, approximately 93% of Merchants’ loan portfolio reprices within 30 days. Major Customer The Company had no major customers whose business represented more than 10% of revenues during the years ended December 31, 2023, 2022, or 2021. |
Commitments, Credit Risk, and C
Commitments, Credit Risk, and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments, Credit Risk, and Contingencies | |
Commitments, Credit Risk, and Contingencies | Note 25: Commitments, Credit Risk, and Contingencies Financial Instruments Merchants offers certain financial instruments, including commitments with contracts that contain credit risk to the Company and others that are subject to certain performance criteria by the client and or cancellation by the Company. Such commitments were as follows at December 31, 2023 and 2022: December 31, 2023 2022 (In thousands) Commitments subject to credit risk: Commitments to extend credit $ 3,693,099 $ 3,293,847 Standby letters of credit 129,655 108,312 Unfunded warehouse repurchase agreements 135,819 146,932 Total commitments subject to credit risk $ 3,958,573 $ 3,549,091 Commitments subject to certain performance criteria and cancellation: Outstanding commitments to originate loans $ 692,582 $ 1,042,497 Unfunded construction draws 266,369 247,504 Unfunded warehouse repurchase agreements and other lines of credit 2,783,916 3,183,257 Total commitments subject to certain performance criteria and cancellation $ 3,742,867 $ 4,473,258 Included in the chart above are the following commitments that are subject to credit risk: Commitments to extend credit Standby letters of credit. Included in the chart above are the following commitments that are subject to certain performance criteria and can be denied by the Company: Outstanding commitments to originate loans. Unfunded construction draws. Through the Multi-family Mortgage Banking segment, the Company has made commitments to fund certain FHA insured construction loans that are drawn upon throughout the construction period. These commitments are subject to certain performance criteria and inspections throughout the project, and funding can be denied by the Company. As construction draws are disbursed, the amounts are securitized and sold to Ginnie Mae, and the Company continues to service the loans. Unfunded warehouse repurchase agreements and other lines of credit depository financial institution customers engaged in mortgage lending. Funds drawn on the warehouse repurchase agreements are used by the borrowers to fund the loans they originate. The customers’ loans must meet certain credit and underwriting criteria before the Company will fund the draw requests on the repurchase agreements, and the draw requests can be denied by the Company. The majority of the warehouse repurchase agreements are unconditionally cancellable by the Company. Allowance for credit losses – off-balance sheet credit exposures (ACL-OBCE). Risk-Sharing Arrangements As a Fannie Mae multifamily lender, Merchants assumes a limited portion of the risk of loss during the remaining term on each commercial mortgage loan that is sold to Fannie Mae. Under this loss sharing agreement, Merchants bears a risk of up to one-third of incurred losses resulting from borrower defaults. Accordingly, Merchants maintained a reserve liability for this risk-sharing obligation of $0.8 million at December 31, 2023 and $0.5 million at December 31, 2022. There have been no loans in default during the years ended December 31, 2023, 2022, or 2021. Repurchase Obligations Certain single-family loans sold to Fannie Mae or Freddie Mac may require the Company to repurchase loans if it is determined that the Company did not adhere to underwriting guidelines required by these government-sponsored entities. There was a reserve for potential obligations in other liabilities on the balance sheet for $1.0 million and $0.9 million at December 2023 and 2022, respectively. Indemnification Agreements As part of a Freddie Mac Q-Series Securitization transaction occurring in 2022, the Company established reserve liabilities in other liabilities on the balance sheet related to an indemnification agreement for potential loan losses. The Company established a reserve for contingent financial guarantees, which had a balance of $1.2 million for both December 31, 2023 and 2022. The Company also established a non-contingent stand-by reserve, which had a balance of $2.5 million for both December 31, 2023 and 2022. See Note 5: Loans and Allowance for Credit Losses on Loans Unconditional Investment Obligations The Company is contractually obligated to provide additional capital funding to certain investments in low-income housing tax credit limited partnerships and LLCs. There was an unfunded liability for these investments of $61.4 million and $36.8 million at December 31, 2023 and 2022, respectively. Additionally, the Company had an unfunded liability to invest in debt fund joint ventures for $4.0 million and $5.2 million at December 31, 2023 and 2022, respectively. Both liability accounts are recorded in other liabilities on balance sheet. See Note 11: Other Assets and Receivables Other The Company and its subsidiaries can be parties to various claims and proceedings arising in the normal course of business. Management, after consultation with legal counsel, believes that the liabilities, if any, arising from such proceedings and claims will not be material to the Company’s consolidated financial position or results of operations. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Information | |
Segment Information | Note 26: Segment Information Our 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. The Other segment includes general and administrative expenses that provide services to all segments; internal funds transfer pricing offsets resulting from allocations to/from the other segments, certain elimination entries and investments in qualified affordable housing limited partnerships or LLCs and certain debt funds. All operations are domestic. The tables below present selected business segment financial information for the years ended December 31, 2023, 2022, and 2021. Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Year Ended December 31, 2023 Interest income $ 5,718 $ 276,366 $ 789,399 $ 6,315 $ 1,077,798 Interest expense 52 184,486 451,952 (6,763) 629,727 Net interest income 5,666 91,880 337,447 13,078 448,071 Provision for credit losses — 2,782 37,449 — 40,231 Net interest income after provision for credit losses 5,666 89,098 299,998 13,078 407,840 Noninterest income 123,980 14,315 (12,527) (11,100) 114,668 Noninterest expense 83,862 14,003 42,811 33,925 174,601 Income (loss) before income taxes 45,784 89,410 244,660 (31,947) 347,907 Income taxes 9,311 15,885 50,262 (6,785) 68,673 Net income (loss) $ 36,473 $ 73,525 $ 194,398 $ (25,162) $ 279,234 Total assets $ 411,097 $ 4,522,175 $ 11,760,943 $ 258,301 $ 16,952,516 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Year Ended December 31, 2022 Interest income $ 2,239 $ 115,870 $ 354,482 $ 8,242 $ 480,833 Interest expense — 48,079 117,284 (3,081) 162,282 Net interest income 2,239 67,791 237,198 11,323 318,551 Provision for credit losses 1,153 37 16,105 — 17,295 Net interest income after provision for credit losses 1,086 67,754 221,093 11,323 301,256 Noninterest income 155,883 5,400 (26,177) (9,170) 125,936 Noninterest expense 82,213 10,420 18,303 25,114 136,050 Income (loss) before income taxes 74,756 62,734 176,613 (22,961) 291,142 Income taxes 20,114 14,130 42,392 (5,215) 71,421 Net income (loss) $ 54,642 $ 48,604 $ 134,221 $ (17,746) $ 219,721 Total assets $ 351,274 $ 2,519,810 $ 9,587,544 $ 156,599 $ 12,615,227 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Year Ended December 31, 2021 Interest income $ 957 $ 134,120 $ 171,465 $ 5,344 $ 311,886 Interest expense — 8,930 28,076 (3,114) 33,892 Net interest income 957 125,190 143,389 8,458 277,994 Provision for credit losses — (1,022) 6,034 — 5,012 Net interest income after provision for credit losses 957 126,212 137,355 8,458 272,982 Noninterest income 141,605 12,399 7,755 (4,426) 157,333 Noninterest expense 71,486 11,949 24,137 17,813 125,385 Income (loss) before income taxes 71,076 126,662 120,973 (13,781) 304,930 Income taxes 19,572 31,503 30,115 (3,364) 77,826 Net income (loss) $ 51,504 $ 95,159 $ 90,858 $ (10,417) $ 227,104 Total assets $ 296,129 $ 3,977,537 $ 6,929,565 $ 75,407 $ 11,278,638 |
Condensed Financial Information
Condensed Financial Information (Parent Company Only) | 12 Months Ended |
Dec. 31, 2023 | |
Condensed Financial Information (Parent Company Only) | |
Condensed Financial Information (Parent Company Only) | Note 27: Condensed Financial Information (Parent Company Only) Presented below is condensed financial information of the Company as to financial position as of December 31, 2023 and 2022, and results of operations and cash flows for the years ended December 31, 2023, 2022, and 2021: Condensed Balance Sheets December 31, 2023 2022 (In thousands) Assets Cash and cash equivalents $ 42,810 $ 41,725 Investment in joint ventures 30,225 27,490 Investment in subsidiaries 1,696,000 1,415,173 Other assets 197 217 Total assets $ 1,769,232 $ 1,484,605 Liabilities Short-term subordinated debt $ 64,922 $ 21,000 Unfunded commitments to joint ventures 2,752 3,521 Other liabilities 474 345 Total liabilities 68,148 24,866 Shareholders’ Equity 1,701,084 1,459,739 Total liabilities and shareholders’ equity $ 1,769,232 $ 1,484,605 Condensed Statements of Income and Comprehensive Income Year Ended December 31, 2023 2022 2021 (In thousands) Income Dividends and return of capital from subsidiaries $ 53,006 $ 39,775 $ 33,447 Other Income 3,488 2,523 509 Total income 56,494 42,298 33,956 Expenses Interest expense 4,323 4,333 3,797 Salaries and employee benefits 1,012 690 493 Professional fees 481 423 236 Other 898 829 627 Total expense 6,714 6,275 5,153 Income Before Income Tax and Equity in Undistributed Income of Subsidiaries 49,780 36,023 28,803 Income Tax Benefit (582) (698) (1,174) Income Before Equity in Undistributed Income of Subsidiaries 50,362 36,721 29,977 Equity in Undistributed Income of Subsidiaries 228,872 183,000 197,127 Net Income $ 279,234 $ 219,721 $ 227,104 Comprehensive Income $ 287,267 $ 210,654 $ 225,276 Condensed Statements of Cash Flows Year Ended December 31, 2023 2022 2021 (In thousands) Operating Activities Net income $ 279,234 $ 219,721 $ 227,104 Adjustments to reconcile net income to net cash used in operating activities (229,428) (181,263) (195,530) Net cash provided by operating activities 49,806 38,458 31,574 Investing Activities Contributed capital to subsidiaries (43,922) (110,000) (116,176) Purchase of limited partnership interests or LLC's (769) (8,746) (15,223) Other investing activity 554 — — Net cash used in investing activities (44,137) (118,746) (131,399) Financing Activities Net change in lines of credit and subordinated debt 43,922 4,000 2,040 Dividends paid (48,506) (38,067) (31,235) Proceeds from issuance of preferred stock — 137,459 191,084 Redemption of preferred stock — — (41,625) Repurchase of common stock — (3,935) — Net cash provided by (used in) financing activities (4,584) 99,457 120,264 Net Change in Cash and Due From Banks 1,085 19,169 20,439 Cash and Due From Banks at Beginning of Year 41,725 22,556 2,117 Cash and Due From Banks at End of Year $ 42,810 $ 41,725 $ 22,556 Additional Cash Flows Information: Payable for limited partnership interest or LLC's $ 2,752 $ 3,521 $ 10,350 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2023 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Note 28: 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 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the FASB issued an ASU update that will require public entities’ disclosures, on an annual and interim basis, to include additional details on reportable segments so financial statement users may better understand an entity’s overall performance and assist in assessing potential future cash flows. The new guidance will require public entities to present information regarding significant segment expenses that are regularly provided to the chief operating decision maker (CODM) as well as details regarding segment’s profit and loss. The updates in ASU 2023-07 are effective for annual periods beginning after December 15, 2023 and interim periods for years beginning after December 15, 2024. An entity shall apply the ASU retrospectively to financial statements for periods beginning after the effective date. The Company is continuing to evaluate the impact of adopting this new guidance but does not expect it to have a material impact on the Company’s financial position or results of operations. FASB ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the FASB issued an ASU update that will require public business entity’s disclosures to include a tabular tax rate reconciliation. The update will also require all public entities disclose income tax expense and taxes paid broken down by federal, state, and foreign with a disaggregation for jurisdictions that exceed 5% of income for taxes paid. The updates in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. An entity shall apply the ASU on a prospective basis to financial statements for annual periods beginning after the effective date. The Company is continuing to evaluate the impact of adopting this new guidance but does not expect it to have a material impact on the Company’s financial position or results of operations. |
Quarterly Condensed Financial I
Quarterly Condensed Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2023 | |
Quarterly Condensed Financial Information (Unaudited) | |
Quarterly Condensed Financial Information (Unaudited) | Note 29: Quarterly Condensed Financial Information (Unaudited) The following tables present the unaudited quarterly condensed financial information for the years ended December 31, 2023 and 2022: 2023 Quarter Ended (Dollars in thousands, except per share data) March 31 June 30 September 30 December 31 Interest income $ 211,294 $ 258,069 $ 296,676 $ 311,759 Interest expense 110,601 152,452 179,240 187,434 Net interest income 100,693 105,617 117,436 124,325 Provision for credit losses 6,867 22,603 4,014 6,747 Net interest income after provision for credit losses 93,826 83,014 113,422 117,578 Noninterest income 14,264 29,882 36,068 34,454 Noninterest expense 34,772 44,320 42,930 52,579 Income before income taxes 73,318 68,576 106,560 99,453 Income taxes 18,363 3,274 25,056 21,980 Net income 54,955 65,302 81,504 77,473 Less: preferred stock dividends 8,667 8,668 8,668 8,667 Net income allocated to common shareholders $ 46,288 $ 56,634 $ 72,836 $ 68,806 Per common share data: Basic earnings per common share $ 1.07 $ 1.31 $ 1.68 $ 1.59 Diluted earnings per common share $ 1.07 $ 1.31 $ 1.68 $ 1.58 2022 Quarter Ended (Dollars in thousands, except per share data) March 31 June 30 September 30 December 31 Interest income $ 76,012 $ 89,270 $ 134,112 $ 181,439 Interest expense 10,287 17,239 48,727 86,029 Net interest income 65,725 72,031 85,385 95,410 Provision for credit losses 2,451 6,212 2,225 6,407 Net interest income after provision for credit losses 63,274 65,819 83,160 89,003 Noninterest income 34,597 39,171 29,186 22,982 Noninterest expense 31,033 32,957 34,951 37,109 Income before income taxes 66,838 72,033 77,395 74,876 Income taxes 16,696 18,098 18,907 17,720 Net income 50,142 53,935 58,488 57,156 Less: preferred stock dividends 5,728 5,729 5,729 8,797 Net income allocated to common shareholders $ 44,414 $ 48,206 $ 52,759 $ 48,359 Per common share data: Basic earnings per common share $ 1.03 $ 1.12 $ 1.22 $ 1.12 Diluted earnings per common share $ 1.02 $ 1.11 $ 1.22 $ 1.12 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events | |
Subsequent Events | Note 30: Subsequent Events On January 26, 2024, the Company sold its Farmers-Merchants Bank of Illinois branches to Bank of Pontiac and CBI Bank &Trust and merged its banking charter into Merchants Bank. See Note 1: Nature of Operations and Summary of Significant Accounting Policies |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Nature of Operations and Summary of Significant Accounting Policies | |
Nature of Operations | Nature of Operations The accompanying 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”) (whose branches were sold to unaffiliated third parties and its remaining charter collapsed into Merchants Bank on January 26, 2024), 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”. Merchants Bank operates under an Indiana state bank charter and provides full banking services. As a state bank and non-Federal Reserve member, it is subject to the regulation of the Indiana Department of Financial Institutions (“IDFI”) and the Federal Deposit Insurance Corporation (“FDIC”). The Company is further subject to regulations of the Board of Governors of the Federal Reserve System (“Federal Reserve”) governing bank holding companies. Merchants Bank operates from six locations in Indiana, including Lynn, Spartanburg, Richmond, Carmel and Indianapolis. Merchants Bank generates multi-family, commercial, mortgage and consumer loans and receives deposits from customers located primarily in Hamilton, Marion, Wayne, Randolph and surrounding counties in Indiana. Merchants Bank’s loans are generally secured by specific items of collateral including real property, consumer assets and business assets. Merchants Bank’s Mortgage Warehousing segment funds and participates in single-family and multi-family, agency eligible loans across the nation. Prior to the sale of its branches, and merger of its remaining charter into Merchants Bank, on January 26, 2024, FMBI operated under an Illinois state bank charter and provided full banking services. As a state bank and non-Federal Reserve member, it was subject to the regulation of the Illinois Department of Financial and Professional Regulation (“IDFPR”) and the FDIC. FMBI operated from four offices located in Joy, Paxton, Melvin, and Piper City, Illinois. MCC is primarily engaged in mortgage banking, specializing in lending for multi-family rental properties and healthcare facilities. It is a Federal Housing Authority (“FHA”) approved mortgagee and a Government National Mortgage Association (“Ginnie Mae”), Federal National Mortgage Association (“Fannie Mae”) Affordable, and Federal Home Loan Mortgage Corporation (“Freddie Mac”) issuer. It is also a fully integrated syndicator of low-income housing tax credit and debt funds. |
Sale of Farmers-Merchants Bank of Illinois branches | Sale of Farmers-Merchants Bank of Illinois branches On September 7, 2023, the Company entered into an agreement with Bank of Pontiac to sell its Farmers-Merchants Bank of Illinois branch locations in Paxton, Melvin, and Piper City, Illinois, and into an agreement with CBI Bank & Trust, to sell its Farmers-Merchants Bank of Illinois branch located in Joy, Illinois. This transaction enhances the Company’s ability to focus on its core business of single and multi-family mortgage lending and strategically aligns the branches with institutions that share a similar business model and allows them to provide additional products to their customers. On January 26, 2024, the transaction was completed after having met customary closing conditions, including regulatory approval. In addition to the branches, Bank of Pontiac acquired approximately $164.8 million in deposits and $19.2 million in loans, and CBI Bank & Trust acquired approximately $65.1 million in deposits and $28.6 million in loans. |
Principles of Consolidation | Principles of Consolidation During 2022, Merchants Foundation, Inc., a nonprofit corporation, was incorporated and its results are consolidated with the Company’s consolidated financial statements as of December 31, 2023 and 2022. 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 our 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. In May 2023, the Company acquired a variable interest in an investment for which it is the primary beneficiary of, and its results have been consolidated since the date of acquisition. Additionally, the Company has certain variable interest investments that it was deemed not to be a primary beneficiary of as of December 31, 2023. These VIEs are not consolidated and the equity or proportional method of accounting has been applied. The Company will analyze whether the primary beneficiary designation has changed through triggering events on a prospective basis. Changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment. See Note 12: Variable Interest Entities (VIEs) All significant intercompany accounts and transactions have been eliminated in consolidation. |
Deconsolidation | Deconsolidation Following the deconsolidation, the carrying value of assets and liabilities of these entities were removed from the consolidated balance sheet, and the continuing investments were recorded at fair value at the date of deconsolidation. The total amount deconsolidated from the balance sheet included net assets of approximately $10 million, consisting primarily of $66.6 million in loans receivable and $52.7 million in borrowings with Merchants Bank, that was previously eliminated in consolidation. The fair value of its continuing investments was approximately $10 million on the deconsolidation date and has been reported in Other Assets after deconsolidation. The estimated fair value was determined based on third-party evaluations of similar assets in the underlying business. The difference between the fair value of these deconsolidated entities and their carrying value was deemed to be immaterial, resulting in no gain or loss on deconsolidation. These continuing investments after deconsolidation are classified as variable interest entities, have not been consolidated, and are accounted for under the equity method of accounting. See Note 12: Variable Interest Entities (VIEs) |
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 and fair values of servicing rights and financial instruments. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents consist primarily of cash amounts due from depository institutions, interest-bearing deposits in other banks, money market accounts, and federal funds sold. For information on restricted cash see Note 2: Restriction on Cash and Due from Banks. At December 31, 2023, the Company’s cash accounts exceeded federally insured limits by approximately $564.5 million. Included in this amount is approximately $510.2 million with the Federal Reserve and $5.8 million with the Federal Home Loan Bank of Indianapolis (“FHLBI”), and $156,000 with the Federal Home Loan Bank of Chicago (“FHLBC”). At December 31, 2022, the Company’s cash accounts exceeded federally insured limits by approximately $208.4 million. Included in this amount is approximately $185.6 million with the Federal Reserve and $3.6 million with the FHLBI, and $150,000 with the FHLBC. |
Securities purchased under agreements to resell | Securities purchased under agreements to resell Securities purchased pursuant to a simultaneous agreement Reverse Repurchase Agreement (“RRA”) to resell the same securities at a specified price and date generally have maturity dates of 90 days or less and are carried at cost. Every 90 days the RRAs rollover. |
Mortgage Loans In Process of Securitization | 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 Fannie Mae and Freddie Mac participation certificates, all of which are pending settlement with firm investor commitments to purchase the securities, typically occurring within 30 days. |
Investment Securities | Investment Securities Securities held to maturity are carried at amortized cost when the Company has the positive intent and ability to hold to maturity. Securities not classified as held to maturity or trading are classified as “available for sale” and recorded at fair value. If no fair value option is elected, unrealized gains and losses are excluded from earnings and reported in other comprehensive income. For securities available for sale utilizing the fair value option, the Company periodically evaluates the securities for changes in fair value and changes are recognized in current period income. The securities are held with the intent that the gains or losses will offset changes in the fair value of other financial instruments. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Regular assessments are performed on securities available for sale to confirm there are no perceived credit losses that would require an allowance for credit losses to be established in accordance with FASB Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”). Securities held to maturity generally require an allowance for lifetime expected credit losses when the security is purchased. Management considers several factors when making such estimates, including issuer bond ratings, historical loss rates for given bond ratings, the financial condition of the issuer, and whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, among others. 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 accumulated other comprehensive losses (“AOCL”), 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. Prior to the adoption of CECL, unrealized losses on securities were evaluated to determine if there was any other-than-temporary impairment. These unrealized losses were not recognized into income because the Company had the intent and ability to hold the securities for the foreseeable future and the decline in fair value was primarily due to increased market rates. The fair value was expected to recover as the securities approached their maturity dates. |
Loans Held for Sale under Mortgage Banking Activities | Loans Held for Sale under Mortgage Banking Activities The Company uses participation agreements to fund mortgage loans held for sale from closing or purchase until sold to an investor. Under a participation agreement the Company elects to purchase a participation interest of up to 100% in individual loans. The Company shares proportionately in the interest income and the credit risk until the loan is sold to an investor. The Company holds the collateral until it is sent under a bailee arrangement to the investor. Typical investors are large financial institutions or government agencies. These loans are carried at the lower of cost or fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance and included in noninterest income. For all loans held for sale, interest earned from the time of funding to the time of sale is accrued and recognized as interest income. Gains and losses on loan sales are recorded in noninterest income. The gain on sale of loans in the income statement may include placement and origination fees, capitalized servicing rights, trading gains and losses and other related income or expense. |
Loans | 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 amortized at 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 $60.4 million and $35.0 million at December 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 principal 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 repurchase agreements 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 when accrued. Warehouse fees are accrued as noninterest income. 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 current 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 uncollectability 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, 2023. 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 segmenting loans with similar risk characteristics. Loans risk graded substandard and worse are individually evaluated for expected credit losses. For individually evaluated loans that are collateral dependent, the Company may use the fair value of the collateral, less estimated costs to sell, as a practical expedient as of the reporting date to determine the carrying amount of an asset and the allowance for credit losses, as applicable. 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 when the borrower is experiencing financial difficulty as of the reporting date. 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 repurchase agreements Remaining Life Method Residential real estate loans 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 included the underlying collateral, type or purpose of the loan, and expected credit loss patterns. The initial estimate of expected credit losses for each segment is based on historical credit loss experience and management’s judgement. 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 judgement 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. ACL-Off-Balance Sheet Credit Exposures (“OBCEs”) The allowance for credit losses on OBCEs is a liability account representing expected credit losses over the contractual period for which the Company is exposed to credit risk resulting from a contractual obligation to extend credit. No allowance is recognized if the Company has the unconditional right to cancel the obligation. OBCEs primarily consist of amounts available under outstanding lines of credit and letters of credit. For the period of exposure, the estimate of expected credit losses considers both the likelihood that funding will occur, and the amount expected to be funded over the estimated remaining life of the commitment or other off-balance sheet exposure. 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 allowance for OBCEs is adjusted through the income statement as a component of provision for credit loss. ACL-Guarantees The allowance for credit losses on guarantees (“ACL-Guarantees”) is a liability account representing expected credit losses over the contractual period for which the Company is exposed to credit risk resulting from a reimbursement and security agreement with Freddie Mac. This agreement was associated with the Company’s May 2022 securitization arrangement. The Company agreed to reimburse Freddie Mac for a first loss position in the underlying loan portfolio, not to exceed 12% of the unpaid principal amount of the loans comprising the securitization pool at settlement. An initial ACL – Guarantee of $1.2 million was established. For the period of exposure, the estimate of expected credit losses considers both the likelihood that losses will occur and the amount of losses over the estimated remaining life of the guarantee. The likelihood and expected losses are based on historical loan loss experience from peers, as well as from similar loans in our ACL-Loans, for each class of loans. The amount of the allowance represents management’s best estimate of expected credit losses over the contractual life of the commitment. The ACL - Guarantees is adjusted through the income statement as a component of provision for credit loss. Also see Note 5: Loans and Allowance for Credit Losses. |
Premises and Equipment | Premises and Equipment Depreciable assets are stated at cost less accumulated depreciation. Depreciation is charged to expense using the straight-line method over the estimated useful lives of the assets. The estimated useful lives for premises and equipment are as follows: Buildings 7 to 40 years Leasehold improvements 2 to 11 years Software and intangible assets 5 to 10 years Furniture, fixtures, and equipment 3 to 15 years Vehicles 5 years Expenditures for property and equipment and for renewals or betterments that extend the originally estimated economic life of the assets are capitalized. Expenditures for maintenance and repairs are charged to expense. When an asset is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the results of operations. |
Leases | Leases one |
Federal Home Loan Bank Stock | Federal Home Loan Bank Stock Federal Home Loan Bank (FHLB) stock is a required investment for institutions that are members of a FHLB. The required investment in the common stock is based on a predetermined formula, carried at cost and evaluated for impairment. |
Other Real Estate Owned | Other Real Estate Owned Assets acquired through, or in lieu of, loan foreclosure are classified as other assets and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net income or expense from other real estate. |
Servicing Rights | Servicing Rights Servicing assets are recognized separately when rights are acquired through purchase or through sale of financial assets. Under the servicing assets and liabilities accounting guidance (ASC 860-50), servicing rights resulting from the sale or securitization of loans originated by the Company are initially measured at fair value at the date of transfer. The Company has elected to initially and subsequently measure the servicing rights for mortgage loans using the fair value method. Under the fair value method, the servicing rights are carried in the balance sheet at fair value and the changes in fair value are reported in earnings in the period in which the changes occur. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model is from an independent third party and it incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds, prepayment penalties, and default rates and losses. These variables change from quarter to quarter as market conditions and projected interest rates change, and any change in fair values is recorded to noninterest income. Servicing fee income is recorded when fees are earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income. The change in the fair value of the mortgage-servicing rights is netted against loan servicing fee income. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is tested annually for impairment or more frequently if impairment indicators are present. If the implied fair value of goodwill is lower than its carrying amount, a goodwill impairment is indicated and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the financial statements. Intangible assets, which include licenses and trade names, are amortized over a period ranging from 84 to 120 months using a straight-line method of amortization. Customer list intangible assets are amortized over 21 months using a straight-line method of amortization. Also included are core deposit intangibles that are amortized over a 10 year period using the accelerated sum of the years digits method of amortization. On a periodic basis, the Company evaluates events and circumstances that may indicate a change in the recoverability of the carrying value. |
Investment in Low-Income Housing Tax Credit Limited Partnerships | Investment in Low-Income Housing Tax Credit Limited Partnerships or Limited Liability Companies (“LLC”) The Company has elected to account for its investment in affordable housing tax credit limited partnerships or LLCs using the proportional amortization method described in FASB ASU 2014-01, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Low-Income Housing Tax Credit Projects (A Consensus of the FASB Emerging Issues Task Force)”, which was updated in March 2023 and released as FASB ASU 2023-02. Under the proportional amortization method, an investor amortizes the initial cost of the investment to income tax expense in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense. The investment in the limited partnerships or LLCs are included in other assets in the consolidated balance sheets. During the years ended December 31, 2023, 2022, and 2021, the Company sold some of these assets to funds in which it is a general partner and in some cases holds a minority interest in the limited partnership or LLC. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. Uncertain tax positions are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment. With a few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2020. The Company recognizes interest and penalties, if any, as other noninterest expense. The Company files consolidated income tax returns with its subsidiaries. |
Earnings Per Share | Earnings Per Share Basic earnings per share is the Company’s net income available to common shareholders, which represents net income less dividends paid or payable to preferred stock shareholders, if any, divided by the weighted-average number of common shares outstanding during each period. Diluted earnings per share is calculated in the same manner as basic earnings per share, but also reflects the issuance of additional common shares that would have been diluted if such shares had been outstanding, as well as any adjustment to income that would result from the assumed issuance. |
Share based Compensation Plan | Share-based Compensation Plans The Company has an equity incentive plan that provides for annual awards of shares to certain members of senior management based upon the Company’s performance and attainment of certain performance goals established by the Board of Directors. Share awards are valued at the estimated fair value on the date of the award and generally vest over three years. Compensation expense for the awards is recognized in the consolidated financial statements ratably over the vesting period. In 2018, the Compensation Committee of the Board of Directors also approved a plan for non-executive directors to receive a portion of their annual fees in the form of restricted common stock, which has been issued once per year, subsequent to the annual meeting of shareholders. This plan was amended to issue allocated shares on a quarterly basis, beginning after the Company’s 2021 annual meeting of shareholders. In 2020, the Company established an employee stock ownership plan (“ESOP”) to provide certain benefits for all employees who meet certain requirements. |
Revenue Recognition | Revenue Recognition The Company’s principal source of revenue is interest income from loans, investment securities and other financial instruments that are not within the scope of Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers”. The Company has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Income was not necessary. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers. The Company recognizes revenues as they are earned based on contractual terms, as transactions occur, or as services are provided and collectability is reasonably assured. Interest income on loans is accrued as earned using the interest method based on unpaid principal balances, except for interest on loans in nonaccrual status. Interest on loans in nonaccrual status is recorded as a reduction of loan principal when received. The Company also earns other noninterest income through a variety of financial and transaction services provided to corporate and consumer clients such as deposit service charges, debit card network fees, safe deposit box rental fees, LIHTC syndication, and asset management fees. Revenue is recorded for noninterest income based on the contractual terms for the service or transaction performed. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income and other comprehensive income (loss), net of applicable income taxes. Other comprehensive income (loss) and accumulated other comprehensive income consist of unrealized appreciation (depreciation) on available for sale investment securities and reclassification adjustments for investment gains/(losses) on the sale of available for sale investment securities. |
Derivative Financial Instruments | Derivative Financial Instruments The Company occasionally enters into derivative financial instruments as part of its interest rate risk management strategies. These derivative financial instruments consist primarily of interest rate locks, forward sale commitments, interest rate swaps, put options, and interest rate floor contracts. These derivative instruments are recorded on the Consolidated Balance Sheets, as either an asset or liability, at their fair value. Changes in fair value are recognized in noninterest income on the Consolidated Statements of Income. The Company also offers interest rate swaps to some customers through 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 are 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. |
Reclassifications | Reclassifications Certain reclassifications may have been made to the 2022 and 2021 financial statements to conform to the financial statement presentation as of and for the year ended December 31, 2023. These reclassifications had no effect on net income. |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Nature of Operations and Summary of Significant Accounting Policies | |
Schedule of allowance for credit loss on loan methodology by loan portfolio segment | Loan Portfolio Segment ACL-Loans Methodology Mortgage warehouse repurchase agreements Remaining Life Method Residential real estate loans 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 |
Schedule of estimated useful lives | Buildings 7 to 40 years Leasehold improvements 2 to 11 years Software and intangible assets 5 to 10 years Furniture, fixtures, and equipment 3 to 15 years Vehicles 5 years |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investment Securities | |
Schedule of amortized cost and approximate fair values, together with gross unrealized gains and losses | December 31, 2023 Gross Gross Approximate Amortized Unrealized Unrealized Fair Cost (1) Gains Losses Value (In thousands) Securities available for sale: Treasury notes $ 129,261 $ 45 $ 338 $ 128,968 Federal agencies 250,731 — 2,976 247,755 Mortgage-backed - Government Agency ("Agency") (2) 14,465 5 3 14,467 Mortgage-backed - Non-Agency residential - fair value option 485,500 — — 485,500 Mortgage-backed - Agency - fair value option 236,997 — — 236,997 Total securities available for sale $ 1,116,954 $ 50 $ 3,317 $ 1,113,687 Securities held to maturity: Mortgage-backed - Non-Agency multi-family $ 719,662 $ — $ 415 $ 719,247 Mortgage-backed - Non-Agency residential 472,539 973 418 473,094 Mortgage-backed - Agency 12,016 — 822 11,194 Total securities held to maturity $ 1,204,217 $ 973 $ 1,655 $ 1,203,535 (1) For fair value option securities, the amortized cost reflects the carrying value, which is also equal to the fair value. (2) Agency includes government sponsored agencies, such as Fannie Mae, Freddie Mac, and Ginne Mae. December 31, 2022 Gross Gross Approximate 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 - Agency 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-Agency multi-family $ 871,772 $ 12 $ — $ 871,784 Mortgage-backed - Non-Agency 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 | December 31, 2023 Amortized Fair Cost (1) Value Securities available for sale: (In thousands) Within one year $ 308,474 $ 305,406 After one through five years 71,518 71,317 379,992 376,723 Mortgage-backed - Agency 14,465 14,467 Mortgage-backed - Non-Agency residential - fair value option 485,500 485,500 Mortgage-backed - Agency - fair value option 236,997 236,997 $ 1,116,954 $ 1,113,687 Securities held to maturity: Mortgage-backed - Non-Agency multi-family $ 719,662 $ 719,247 Mortgage-backed - Non-Agency residential 472,539 473,094 Mortgage-backed - Agency 12,016 11,194 $ 1,204,217 $ 1,203,535 (1) For fair value option securities, the amortized cost reflects the carrying value, which is also equal to the fair value. |
Schedule of gross unrealized losses and fair value of investments with unrealized losses have been in continuous | December 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 $ 3,052 $ 6 $ 32,080 $ 332 $ 35,132 $ 338 Federal agencies 60,541 189 167,213 2,787 227,754 2,976 Mortgage-backed - Agency 364 1 186 2 550 3 $ 63,957 $ 196 $ 199,479 $ 3,121 $ 263,436 $ 3,317 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 - Agency 709 7 — — 709 7 $ 49,545 $ 1,493 $ 258,411 $ 12,565 $ 307,956 $ 14,058 |
Loans and Allowance for Credi_2
Loans and Allowance for Credit Losses on Loans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Loans and Allowance for Credit Losses on Loans | |
Summary of loans | December 31, December 31, 2023 2022 (In thousands) Mortgage warehouse repurchase agreements $ 752,468 $ 464,785 Residential real estate (1) 1,324,305 1,178,401 Multi-family financing 4,006,160 3,135,535 Healthcare financing 2,356,689 1,604,341 Commercial and commercial real estate (2)(3) 1,643,081 978,661 Agricultural production and real estate 103,150 95,651 Consumer and margin loans 13,700 13,498 10,199,553 7,470,872 Less: ACL - Loans 71,752 44,014 Loans Receivable $ 10,127,801 $ 7,426,858 (1) Includes $1.2 billion and $1.1 billion of All-in-One first-lien home equity lines of credit at December 31, 2023 and 2022, respectively. (2) Includes $1.1 billion and $497.0 million of revolving lines of credit collateralized primarily by mortgage servicing rights as of December 31, 2023 and 2022, respectively. (3) Includes only $8.4 million and $12.8 million of non-owner occupied commercial real estate as of December 31, 2023 and 2022, respectively. |
Summary of the activity in the ACL-Loans by portfolio segment | At or For the Year Ended December 31, 2023 MTG WHRA 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 821 328 18,493 12,572 5,232 54 (12) 37,488 Loans charged to the allowance — (34) (8,400) — (1,356) — (1) (9,791) Recoveries of loans previously charged off — — — — 41 — — 41 Balance, end of period $ 2,070 $ 7,323 $ 26,874 $ 22,454 $ 12,243 $ 619 $ 169 $ 71,752 At or For the Year Ended December 31, 2022 MTG WHRA 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 |
Summary of activity in the allowance for loans losses by loan portfolio | For the Year Ended December 31, 2021 MTG WHRA RES RE MF FIN HC FIN CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of year $ 4,018 $ 3,334 $ 12,140 $ 2,591 $ 4,641 $ 636 $ 140 $ 27,500 Provision (credit) for loan losses (2,063) 838 1,944 1,870 2,422 21 (20) 5,012 Loans charged to the allowance — (2) — — (1,184) — (6) (1,192) Recoveries of loans previously charged off — — — — — — 24 24 Balance, end of year $ 1,955 $ 4,170 $ 14,084 $ 4,461 $ 5,879 $ 657 $ 138 $ 31,344 |
Schedule of amortized cost basis and ACL-Loans allocated for collateral dependent loans | The below tables present the amortized cost basis and ACL-Loans allocated for collateral dependent loans, which are individually evaluated to determine expected credit losses as of December 31, 2023 and 2022: December 31, 2023 Real Estate Accounts Receivable / Equipment Other Total ACL-Loans Allocation (In thousands) RES RE $ 1,557 $ — $ 3 $ 1,560 $ 21 MF FIN 46,575 — — 46,575 521 HC FIN 73,909 — — 73,909 6,289 CML & CRE 146 3,603 2,684 6,433 1,132 AG & AGRE 147 — — 147 1 CON & MAR — — 3 3 — Total collateral dependent loans $ 122,334 $ 3,603 $ 2,690 $ 128,627 $ 7,964 December 31, 2022 Real Estate Accounts Receivable / Equipment Other Total ACL-Loans Allocation (In thousands) RES RE $ 237 $ — $ 9 $ 246 $ 31 MF FIN 36,760 — — 36,760 173 HC FIN 21,783 — — 21,783 134 CML & CRE — 4,917 966 5,883 842 AG & AGRE 147 — — 147 1 CON & MAR — — 6 6 — Total collateral dependent loans $ 58,927 $ 4,917 $ 981 $ 64,825 $ 1,181 |
Schedule of credit risk profile of loan portfolio | December 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans TOTAL (In thousands) MTG WHRA Pass $ — $ — $ — $ — $ — $ — $ 752,468 $ 752,468 Total $ — $ — $ — $ — $ — $ — $ 752,468 $ 752,468 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — RES RE Pass 31,011 10,086 6,573 22,725 3,298 9,340 1,239,161 1,322,194 Special Mention — — — — 59 492 — 551 Substandard — — — — — 288 1,272 1,560 Total $ 31,011 $ 10,086 $ 6,573 $ 22,725 $ 3,357 $ 10,120 $ 1,240,433 $ 1,324,305 Charge-offs $ — $ — $ — $ — $ — $ 21 $ 13 $ 34 MF FIN Pass 1,094,698 762,448 208,343 77,340 29,764 8,455 1,646,445 3,827,493 Special Mention 94,973 3,189 8,400 — — 1,477 24,052 132,091 Substandard 11,682 28,360 6,534 — — — — 46,576 Total $ 1,201,353 $ 793,997 $ 223,277 $ 77,340 $ 29,764 $ 9,932 $ 1,670,497 $ 4,006,160 Charge-offs $ — $ 8,400 $ — $ — $ — $ — $ — $ 8,400 HC FIN Pass 752,591 996,273 110,197 — 14,563 — 351,110 2,224,734 Special Mention 35,869 9,520 — — — — 12,658 58,047 Substandard 25,600 10,625 28,783 — — — 8,900 73,908 Total $ 814,060 $ 1,016,418 $ 138,980 $ — $ 14,563 $ — $ 372,668 $ 2,356,689 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — CML & CRE Pass 51,110 119,386 77,316 21,154 21,088 17,066 1,328,980 1,636,100 Special Mention — — 292 172 — 84 — 548 Substandard — 70 1,701 878 62 — 3,672 6,383 Doubtful — — — — — 50 — 50 Total $ 51,110 $ 119,456 $ 79,309 $ 22,204 $ 21,150 $ 17,200 $ 1,332,652 $ 1,643,081 Charge-offs $ — $ 496 $ 274 $ 586 $ — $ — $ — $ 1,356 AG & AGRE Pass 16,850 9,825 6,490 14,267 5,237 16,606 33,728 103,003 Special Mention — — — — — — — — Substandard — — — — — 147 — 147 Total $ 16,850 $ 9,825 $ 6,490 $ 14,267 $ 5,237 $ 16,753 $ 33,728 $ 103,150 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — CON & MAR Pass 748 4,329 247 115 27 4,339 3,862 13,667 Special Mention — — — 15 15 — — 30 Substandard — — — — — 3 — 3 Total $ 748 $ 4,329 $ 247 $ 130 $ 42 $ 4,342 $ 3,862 $ 13,700 Charge-offs $ — $ — $ — $ — $ — $ 1 $ — $ 1 Total Pass $ 1,947,008 $ 1,902,347 $ 409,166 $ 135,601 $ 73,977 $ 55,806 $ 5,355,754 $ 9,879,659 Total Special Mention $ 130,842 $ 12,709 $ 8,692 $ 187 $ 74 $ 2,053 $ 36,710 $ 191,267 Total Substandard $ 37,282 $ 39,055 $ 37,018 $ 878 $ 62 $ 438 $ 13,844 $ 128,577 Total Doubtful $ — $ — $ — $ — $ — $ 50 $ — $ 50 Total Loans $ 2,115,132 $ 1,954,111 $ 454,876 $ 136,666 $ 74,113 $ 58,347 $ 5,406,308 $ 10,199,553 Total Charge-offs $ — $ 8,896 $ 274 $ 586 $ — $ 22 $ 13 $ 9,791 December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Loans TOTAL (In thousands) MTG WHRA 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 | December 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 WHRA $ — $ — $ — $ — $ 752,468 $ 752,468 RES RE 4,557 — 2,379 6,936 1,317,369 1,324,305 MF FIN 38,218 11,055 39,609 88,882 3,917,278 4,006,160 HC FIN — 47,275 35,999 83,274 2,273,415 2,356,689 CML & CRE 172 393 3,665 4,230 1,638,851 1,643,081 AG & AGRE 27 11 147 185 102,965 103,150 CON & MAR 1 3 18 22 13,678 13,700 $ 42,975 $ 58,737 $ 81,817 $ 183,529 $ 10,016,024 $ 10,199,553 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 WHRA $ — $ — $ — $ — $ 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 | December 31, December 31, 2023 2022 Total Loans > Total Loans > 90 Days & 90 Days & Nonaccrual Accruing Nonaccrual Accruing (In thousands) RES RE $ 1,486 $ 894 $ 245 $ 96 MF FIN 39,608 — — — HC FIN 28,783 7,216 21,783 — CML & CRE 3,820 43 4,390 — AG & AGRE 147 — 147 — CON & MAR 3 15 6 16 $ 73,847 $ 8,168 $ 26,571 $ 112 |
Schedule of company's modified loans | December 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 $ — $ 3,553 $ — $ — $ — $ — N/M % Total $ — $ 3,553 $ — $ — $ — $ — N/M % 30 - 59 Days 60 - 89 Days Greater Than Total Past Due Past Due 90 Days Past Due (In thousands) Commercial and commercial real estate $ — $ — $ 3,553 $ 3,553 Total $ — $ — $ 3,553 $ 3,553 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 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 December 31, 2023 (In thousands) (In thousands) Interest rate lock commitments $ 16,526 Other assets/liabilities $ 140 $ 4 Forward contracts 25,500 Other assets/liabilities 4 391 Interest rate swaps 57,540 Other assets/liabilities 2,610 — Put options 748,374 Other assets 25,877 — Interest rate floors 748,374 Other assets 6,576 — $ 35,207 $ 395 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 consolidated statements of income | Year Ended December 31, 2023 2022 2021 (In thousands) Derivative gain (loss) included in gain on sale of loans: Interest rate lock commitments $ 130 $ (218) $ (5,908) Forward contracts (includes pair-off settlements) 201 5,277 5,956 Interest rate swaps (420) 132 — Net gain (loss) (89) 5,191 48 Derivative gain (loss) included in other income: Put options 5,629 — — Interest rate floors 6,575 — — Net gain (loss) $ 12,204 $ — $ — |
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) December 31, 2023 $ 607,169 Other assets/liabilities $ 12,426 $ 12,426 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 consolidated statements of income | Year Ended December 31, 2023 2022 2021 (In thousands) Gross swap gains $ 9,385 $ 1,910 $ 2,039 Gross swap losses 9,385 1,910 2,039 Net swap gains (losses) $ — $ — $ — |
Loan Servicing (Tables)
Loan Servicing (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Loan Servicing | |
Schedule of mortgage servicing rights measured using fair value method | For the Year Ended December 31, 2023 2022 2021 (In thousands) Balance, beginning of period $ 146,248 $ 110,348 $ 82,604 Additions Purchased servicing 513 — 2,057 Originated servicing 14,755 27,124 30,421 Subtractions Paydowns (7,621) (10,985) (16,691) Sold servicing — — (438) Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model 4,562 19,761 12,395 Balance, end of period $ 158,457 $ 146,248 $ 110,348 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangibles | |
Schedule of goodwill | 2023 2022 2021 Multifamily Banking Warehouse Total Multifamily Banking Warehouse Total Multifamily Banking Warehouse Total (In thousands) (In thousands) (In thousands) Balance, beginning of period $ 3,791 $ 8,353 $ 3,701 $ 15,845 $ 3,791 $ 8,353 $ 3,701 $ 15,845 $ 3,791 $ 8,353 $ 3,701 $ 15,845 Goodwill acquired during the period — — — — — — — — — — — — Post-acquisition adjustments — — — — — — — — — — — — Impairment losses — — — — — — — — — — — — Balance, end of period $ 3,791 $ 8,353 $ 3,701 $ 15,845 $ 3,791 $ 8,353 $ 3,701 $ 15,845 $ 3,791 $ 8,353 $ 3,701 $ 15,845 |
Schedule of intangible assets | 2023 2022 2021 Gross Gross Gross Carrying Accumulated Carrying Accumulated Carrying Accumulated Amount Amortization Total Amount Amortization Total Amount Amortization Total (In thousands) (In thousands) (In thousands) Licenses $ 1,370 $ (1,247) $ 123 $ 1,370 $ (1,052) $ 318 $ 1,370 $ (856) $ 514 Trade names 224 (143) 81 224 (120) 104 224 (98) 126 Customer list — — — — — — — — — Core deposit intangible 2,417 (1,879) 538 2,417 (1,653) 764 2,417 (1,350) 1,067 Total intangible Assets $ 4,011 $ (3,269) $ 742 $ 4,011 $ (2,825) $ 1,186 $ 4,011 $ (2,304) $ 1,707 |
Estimated amortization expense | Estimated amortization expense for future years is as follows (in thousands): Year ending December 31, 2024 $ 683 2025 23 2026 22 2027 14 2028 — Thereafter — Total $ 742 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Premises and Equipment | |
Schedule of premises and equipment stated at cost | December 31, 2023 2022 (In thousands) Land $ 8,099 $ 3,696 Buildings 29,291 29,661 Building and remodeling in progress 2,489 — Leasehold improvements 352 310 Furniture, fixtures, equipment and software 13,321 10,500 Total cost 53,552 44,167 Accumulated depreciation (11,210) (8,729) Net premises and equipment $ 42,342 $ 35,438 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases. | |
Schedule of balance sheet, income statement and cash flow detail regarding operating leases | December 31, 2023 December 31, 2022 Balance Sheet (In thousands) Operating lease right-of-of use asset (in other assets) $ 10,060 $ 10,969 Operating lease liability (in other liabilities) 11,251 11,992 Weighted average remaining lease term (years) 6.0 6.5 Weighted average discount rate 2.89% 2.65% Maturities of lease liabilities: One year or less 2,441 2,181 Year two 2,064 2,321 Year three 2,100 1,881 Year four 2,046 1,911 Year five 1,438 1,853 Thereafter 2,128 2,902 Total future minimum lease payments 12,217 13,049 Less: imputed interest 966 1,057 Total $ 11,251 $ 11,992 Year Ended Year Ended December 31, 2023 December 31, 2022 Income Statement (In thousands) (In thousands) Components of lease expense: Operating lease cost (in occupancy and equipment expense) $ 2,438 $ 2,033 Year Ended Year Ended December 31, 2023 December 31, 2022 Cash Flow Statement (In thousands) (In thousands) Supplemental cash flow information: Operating cash flows from operating leases $ 2,129 $ 1,461 |
Variable Interest Entities (V_2
Variable Interest Entities (VIEs) (Tables) | 12 Months Ended |
Dec. 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) December 31, 2023 Low-income housing credit investments $ 118,741 $ 35,099 $ 118,741 Debt funds 33,221 2,752 33,221 Total Unconsolidated VIEs $ 151,962 $ 37,851 $ 151,962 December 31, 2022 Low-income housing credit investments 22,310 22,043 22,310 Debt funds 29,815 3,521 29,815 Total Unconsolidated VIEs $ 52,125 $ 25,564 $ 52,125 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deposits | |
Schedule of deposits | December 31, 2023 2022 (In thousands) Noninterest-bearing deposits Demand deposits $ 520,070 $ 326,875 Total noninterest-bearing deposits 520,070 326,875 Interest-bearing deposits Demand deposits $ 5,381,067 $ 3,720,363 Savings deposits 2,992,921 3,034,818 Certificates of deposit 5,167,402 2,989,289 Total interest-bearing deposits 13,541,390 9,744,470 Total deposits $ 14,061,460 $ 10,071,345 |
Schedule of maturities of time deposits | December 31, 2023 (In thousands) Due within one year $ 5,022,745 Due in one year to two years 143,286 Due in two years to three years 942 Due in three years to four years 429 Due in four years to five years — Due in five years to six years — $ 5,167,402 |
Schedule of brokered deposit amounts | December 31, 2023 2022 (In thousands) Brokered certificates of deposit $ 4,465,825 $ 2,681,198 Brokered savings deposits 589 81,532 Brokered deposit on demand accounts 1,504,230 13 $ 5,970,644 $ 2,762,743 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Borrowings | |
Schedule of borrowings | December 31, 2023 2022 (In thousands) Federal Reserve discount window borrowings $ — $ 20,000 Short-term subordinated debt 64,922 21,000 FHLB advances 771,392 859,392 American Financial Exchange borrowing — 30,000 Credit linked notes 119,879 — Other borrowings 7,934 — Total borrowings $ 964,127 $ 930,392 |
Schedule of maturities of FHLB advances | Short-Term FHLB Credit Linked Other Borrowings Subordinated Debt Advances Notes Borrowings Total Due within one year $ — $ 754,284 $ — $ — $ 754,284 Due in one year to two years 64,922 15,759 — — 80,681 Due in two years to three years — 260 — — 260 Due in three years to four years — 150 — — 150 Due in four years to five years — 59 119,879 — 119,938 Thereafter — 880 — 7,934 8,814 $ 64,922 $ 771,392 $ 119,879 $ 7,934 $ 964,127 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Schedule of provision for income taxes includes components | Year Ended December 31, 2023 2022 2021 (In thousands) Income tax expense Current tax payable Federal $ 72,537 $ 51,306 $ 55,936 State (1,422) 15,384 16,580 Deferred tax payable Federal (503) 4,237 4,055 State (1,939) 494 1,255 Income tax expense $ 68,673 $ 71,421 $ 77,826 Effective tax rate 19.7 % 24.5 % 25.5 % |
Schedule of a reconciliation of statutory federal tax rate and effective tax rate | Year Ended December 31, 2023 2022 2021 (In thousands) Computed at the statutory rate -21% $ 73,061 $ 61,140 $ 64,035 Increase/(decrease) resulting from State income taxes (2,655) 12,544 14,090 Tax Credits net of related amortization (467) 57 8 Other (1,266) (2,320) (307) Actual tax expense $ 68,673 $ 71,421 $ 77,826 |
Schedule of tax effects of temporary differences related to deferred taxes | December 31, 2023 2022 (In thousands) Deferred tax assets Allowance for credit losses on loans $ 20,572 $ 13,983 Unrealized loss on securities available for sale 779 3,530 Fair value adjustments on acquisitions — 51 Other 4,727 3,945 Total assets 26,078 21,509 Deferred tax liabilities Depreciation (2,779) (2,809) Intangible assets (385) (338) Servicing rights (37,290) (36,043) Limited partnership investments (2,018) (1,831) State tax receivable (1,711) — Derivative assets (1,573) — Other (245) (101) Total liabilities (46,001) (41,122) Net deferred tax liability $ (19,923) $ (19,613) |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Regulatory Matters | |
Summary of bank's actual capital amounts and ratios | Minimum Amount to be Well Minimum Amount Capitalized with To Be Well Actual Basel III Buffer (1) Capitalized (1) Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2023 Total capital (1) Company $ 1,772,195 11.6 % $ 1,598,260 10.5 % $ — N/A % Merchants Bank 1,724,505 11.5 % 1,577,434 10.5 % 1,502,318 10.0 % FMBI 40,613 21.1 % 20,209 10.5 % 19,247 10.0 % Tier I capital (1) Company 1,686,202 11.1 % 1,293,830 8.5 % — N/A % Merchants Bank 1,639,171 10.9 % 1,276,970 8.5 % 1,201,854 8.0 % FMBI 39,953 20.8 % 16,360 8.5 % 15,398 8.0 % Common Equity Tier I capital (1) Company 1,186,594 7.8 % 1,065,507 7.0 % — N/A % Merchants Bank 1,639,171 10.9 % 1,051,623 7.0 % 976,507 6.5 % FMBI 39,953 20.8 % 13,473 7.0 % 12,511 6.5 % Tier I capital (1) Company 1,686,202 10.1 % 832,706 5.0 % — N/A % Merchants Bank 1,639,171 10.1 % 815,191 5.0 % 815,191 5.0 % FMBI 39,953 11.5 % 17,391 5.0 % 17,391 5.0 % (1) As defined by regulatory agencies. Minimum Amount to be Well Minimum Amount Capitalized with To Be Well Actual Basel III Buffer (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 10.5 % $ — N/A % Merchants Bank 1,427,738 11.7 % 975,853 10.5 % 1,219,817 10.0 % FMBI 34,769 11.3 % 24,703 10.5 % 30,878 10.0 % Tier I capital (1) Company 1,452,456 11.7 % 744,662 8.5 % — N/A % Merchants Bank 1,372,941 11.3 % 731,890 8.5 % 975,853 8.0 % FMBI 34,054 11.0 % 18,527 8.5 % 24,703 8.0 % Common Equity Tier I capital (1) Company 952,848 7.7 % 558,497 7.0 % — N/A % Merchants Bank 1,372,941 11.3 % 548,917 7.0 % 792,881 6.5 % FMBI 34,054 11.0 % 13,895 7.0 % 20,071 6.5 % Tier I capital (1) Company 1,452,456 11.7 % 497,604 5.0 % — N/A % Merchants Bank 1,372,941 11.3 % 487,511 5.0 % 609,389 5.0 % FMBI 34,054 10.7 % 12,702 5.0 % 15,878 5.0 % (1) As defined by regulatory agencies. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share | |
Schedule of computation of earnings per share | Year Ended December 31, 2023 2022 2021 Weighted- Per Weighted- Per Weighted- Per Net Average Share Net Average Share Net Average Share Income Shares Amount Income Shares Amount Income Shares Amount (In thousands) (In thousands) (In thousands) Net income $ 279,234 $ 219,721 $ 227,104 Dividends on preferred stock (34,670) (25,983) (20,873) Net income allocated to common shareholders $ 244,564 $ 193,738 $ 206,231 Basic earnings per share 43,224,042 $ 5.66 43,164,477 $ 4.49 43,172,078 $ 4.78 Effect of dilutive securities—restricted stock awards 121,757 152,427 153,225 Diluted earnings per share 43,345,799 $ 5.64 43,316,904 $ 4.47 43,325,303 $ 4.76 |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Common Stock | |
Schedule of repurchase activity on a cash basis | Year Ended Year Ended December 31, December 31, 2023 2022 Dollar value of shares repurchased $ — $ 3,935,333 Shares repurchased (1) — 165,037 Average price paid per share $ — $ 23.85 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions | |
Schedule of related party transactions | Year Ended December 31, 2023 2022 2021 (In thousands) Investments in Senior Housing and Healthcare Entity Origination fees received from borrowers referred by the LLC $ 12,669 $ 24,830 $ 17,848 Fees paid to LLC for loans referred and originated (9,866) (17,145) (14,512) Servicing income received for loans referred by the LLC 561 417 69 Servicing income participation paid to LLC (281) (209) (34) Income from investment in LLC 1,612 4,129 1,369 Distributions received from LLC 993 3,795 405 Interest income paid to LLC for loans originated and referred by the LLC (3,587) (6,725) (4,522) Investments in LIHTC Syndications Interest income, financing (1) $ 16,592 $ 11,012 $ 8,030 Loans outstanding, net of participations sold, to syndicated funds 127,449 49,004 18,586 Investments in Debt Financing Entities Income from investments, servicing, interest income, and management of debt funds $ 29,992 $ 4,642 $ 1,139 Distributions received from debt funds 890 512 — Loans outstanding, net of participations sold, to debt funds 108,055 35,732 20,700 Loans sold to debt funds 102,336 884,247 273,914 Gains (losses) recognized on loans sold to debt funds (263) — — Carrying value, at year-end, of held-to-maturity securities purchased from debt funds 472,539 248,366 — (1) Financing fees, net of costs to originate, are deferred and recognized in income over the life of the loan. |
Share-Based Payment Plans (Tabl
Share-Based Payment Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Plans | |
Schedule of equity-based incentive awards and Board of Directors fees paid in shares | Year Ended December 31, 2023 2022 2021 ($ in thousands) Equity-based incentive awards to Company officers: Shares issued 84,335 64,962 23,435 Expenses recognized $ 2,671 $ 1,870 $ 1,198 Unvested shares awarded 256,192 280,974 374,598 Unrecognized compensation costs $ 6,801 $ 5,817 $ 4,499 Equity-based retainer fees to non-executive Board of Directors: Shares issued 12,173 12,443 6,870 Expenses recognized $ 351 $ 325 $ 188 |
Disclosures about Fair Value _2
Disclosures about Fair Value of Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 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) December 31, 2023 Mortgage loans in process of securitization $ 110,599 $ — $ 110,599 $ — Securities available for sale: Treasury notes 128,968 128,968 — — Federal agencies 247,755 — 247,755 — Mortgage-backed - Agency 14,467 — 14,467 — Mortgage-backed - Non-agency residential - fair value option 485,500 — — 485,500 Mortgage-backed - Agency - fair value option 236,997 — 236,997 Loans held for sale 86,663 — 86,663 — Servicing rights 158,457 — — 158,457 Derivative assets: Interest rate lock commitments 140 — — 140 Forward contracts 4 — 4 — Interest rate swaps 2,610 — 2,610 — Interest rate swaps (back-to-back) 12,426 — 12,426 — Put options 25,877 — 7,223 18,654 Interest rate floors 6,576 — — 6,576 Derivative liabilities: Interest rate lock commitments 4 — — 4 Forward contracts 391 — 391 — Interest rate swaps (back-to-back) 12,426 — 12,426 — 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 - Agency 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 Forward contracts 46 — 46 — Interest rate swaps 3,030 — 3,030 — Interest rate swaps (back-to-back) 3,041 — 3,041 — Derivative liabilities: Interest rate lock commitments 23 — — 23 Forward contracts 52 — 52 — Interest rate swaps (back-to-back) 3,041 — 3,041 — |
Schedule of Level 3 reconciliation of recurring fair value measurements | Year Ended December 31, 2023 2022 2021 (In thousands) Servicing rights Balance, beginning of period $ 146,248 $ 110,348 $ 82,604 Additions Purchased servicing 513 — 2,057 Originated servicing 14,755 27,124 30,421 Subtractions Paydowns (7,621) (10,985) (16,691) Sales of servicing — — (438) Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model 4,562 19,761 12,395 Balance, end of period $ 158,457 $ 146,248 $ 110,348 Available for sale securities - Mortgage-backed - Non-Agency residential - fair value option Balance, beginning of period $ — $ — $ — Purchased securities 483,906 — — Changes in fair value 1,594 — — Balance, end of period $ 485,500 $ — $ — Derivative Assets - put options Balance, beginning of period $ — $ — $ — Purchases 20,248 — — Changes in fair value (1,594) — — Balance, end of period $ 18,654 $ — $ — Derivative Assets - interest rate floors Balance, beginning of period $ — $ — $ — Purchases 6,576 — — Balance, end of period $ 6,576 $ — $ — Derivative Assets - interest rate lock commitments Balance, beginning of period $ 28 $ 264 $ 6,131 Changes in fair value 112 (236) (5,867) Balance, end of period $ 140 $ 28 $ 264 Derivative Liabilities - interest rate lock commitments Balance, beginning of period $ 23 $ 41 $ — Changes in fair value (19) (18) 41 Balance, end of period $ 4 23 $ 41 |
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) December 31, 2023 Impaired loans (collateral-dependent) $ 47,026 $ — $ — $ 47,026 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 December 31, 2023: Available for sale securities - Mortgage-backed - Non-Agency residential - fair value option $ 485,500 Discounted cash flow Market credit spread 2% 2% Collateral dependent loans $ 47,026 Market comparable properties Marketability discount 0% - 100% 2% Servicing rights - Multi-family $ 122,218 Discounted cash flow Discount rate 8% - 13% 9% Constant prepayment rate 0% - 50% 7% Servicing rights - Single-family $ 30,959 Discounted cash flow Discount rate 10% - 11% 10% Constant prepayment rate 6% - 16% 7% Servicing rights - SBA $ 5,280 Discounted cash flow Discount rate 16% 16% Constant prepayment rate 3% - 14% 9% Derivative assets: Interest rate lock commitments $ 140 Discounted cash flow Loan closing rates 45% - 99% 78% Put options $ 18,654 Intrinsic option value Market credit spread 2% 2% Interest rate floors $ 6,576 Discounted cash flow Discount rate 6%-7% 7% Derivative liabilities - interest rate lock commitments $ 4 Discounted cash flow Loan closing rates 45% - 99% 78% At December 31, 2022: Collateral-dependent impaired 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) December 31, 2023 Financial assets: Cash and cash equivalents $ 584,422 $ 584,422 $ 584,422 $ — $ — Securities purchased under agreements to resell 3,349 3,349 — 3,349 — Securities held to maturity 1,204,217 1,203,535 — 484,288 719,247 FHLB stock 48,578 48,578 — 48,578 — Loans held for sale 3,058,093 3,058,093 — 3,058,093 — Loans receivable, net 10,127,801 10,088,468 — — 10,088,468 Interest receivable 91,346 91,346 — 91,346 — Financial liabilities: Deposits 14,061,460 14,062,457 8,894,058 5,168,399 — Short-term subordinated debt 64,922 64,922 — 64,922 — FHLB advances 771,392 771,029 — 771,029 — Other borrowing 7,934 7,934 — 7,934 — Credit linked notes 119,879 119,878 — 119,878 — Interest payable 43,423 43,423 — 43,423 — 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 — |
Commitments, Credit Risk, and_2
Commitments, Credit Risk, and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments, Credit Risk, and Contingencies | |
Schedule of business segment financial information | December 31, 2023 2022 (In thousands) Commitments subject to credit risk: Commitments to extend credit $ 3,693,099 $ 3,293,847 Standby letters of credit 129,655 108,312 Unfunded warehouse repurchase agreements 135,819 146,932 Total commitments subject to credit risk $ 3,958,573 $ 3,549,091 Commitments subject to certain performance criteria and cancellation: Outstanding commitments to originate loans $ 692,582 $ 1,042,497 Unfunded construction draws 266,369 247,504 Unfunded warehouse repurchase agreements and other lines of credit 2,783,916 3,183,257 Total commitments subject to certain performance criteria and cancellation $ 3,742,867 $ 4,473,258 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Information | |
Schedule of business segment financial information | Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Year Ended December 31, 2023 Interest income $ 5,718 $ 276,366 $ 789,399 $ 6,315 $ 1,077,798 Interest expense 52 184,486 451,952 (6,763) 629,727 Net interest income 5,666 91,880 337,447 13,078 448,071 Provision for credit losses — 2,782 37,449 — 40,231 Net interest income after provision for credit losses 5,666 89,098 299,998 13,078 407,840 Noninterest income 123,980 14,315 (12,527) (11,100) 114,668 Noninterest expense 83,862 14,003 42,811 33,925 174,601 Income (loss) before income taxes 45,784 89,410 244,660 (31,947) 347,907 Income taxes 9,311 15,885 50,262 (6,785) 68,673 Net income (loss) $ 36,473 $ 73,525 $ 194,398 $ (25,162) $ 279,234 Total assets $ 411,097 $ 4,522,175 $ 11,760,943 $ 258,301 $ 16,952,516 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Year Ended December 31, 2022 Interest income $ 2,239 $ 115,870 $ 354,482 $ 8,242 $ 480,833 Interest expense — 48,079 117,284 (3,081) 162,282 Net interest income 2,239 67,791 237,198 11,323 318,551 Provision for credit losses 1,153 37 16,105 — 17,295 Net interest income after provision for credit losses 1,086 67,754 221,093 11,323 301,256 Noninterest income 155,883 5,400 (26,177) (9,170) 125,936 Noninterest expense 82,213 10,420 18,303 25,114 136,050 Income (loss) before income taxes 74,756 62,734 176,613 (22,961) 291,142 Income taxes 20,114 14,130 42,392 (5,215) 71,421 Net income (loss) $ 54,642 $ 48,604 $ 134,221 $ (17,746) $ 219,721 Total assets $ 351,274 $ 2,519,810 $ 9,587,544 $ 156,599 $ 12,615,227 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Year Ended December 31, 2021 Interest income $ 957 $ 134,120 $ 171,465 $ 5,344 $ 311,886 Interest expense — 8,930 28,076 (3,114) 33,892 Net interest income 957 125,190 143,389 8,458 277,994 Provision for credit losses — (1,022) 6,034 — 5,012 Net interest income after provision for credit losses 957 126,212 137,355 8,458 272,982 Noninterest income 141,605 12,399 7,755 (4,426) 157,333 Noninterest expense 71,486 11,949 24,137 17,813 125,385 Income (loss) before income taxes 71,076 126,662 120,973 (13,781) 304,930 Income taxes 19,572 31,503 30,115 (3,364) 77,826 Net income (loss) $ 51,504 $ 95,159 $ 90,858 $ (10,417) $ 227,104 Total assets $ 296,129 $ 3,977,537 $ 6,929,565 $ 75,407 $ 11,278,638 |
Condensed Financial Informati_2
Condensed Financial Information (Parent Company Only) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Condensed Financial Information (Parent Company Only) | |
Summary of condensed balance sheets | December 31, 2023 2022 (In thousands) Assets Cash and cash equivalents $ 42,810 $ 41,725 Investment in joint ventures 30,225 27,490 Investment in subsidiaries 1,696,000 1,415,173 Other assets 197 217 Total assets $ 1,769,232 $ 1,484,605 Liabilities Short-term subordinated debt $ 64,922 $ 21,000 Unfunded commitments to joint ventures 2,752 3,521 Other liabilities 474 345 Total liabilities 68,148 24,866 Shareholders’ Equity 1,701,084 1,459,739 Total liabilities and shareholders’ equity $ 1,769,232 $ 1,484,605 |
Summary of condensed statements of income and comprehensive income | Year Ended December 31, 2023 2022 2021 (In thousands) Income Dividends and return of capital from subsidiaries $ 53,006 $ 39,775 $ 33,447 Other Income 3,488 2,523 509 Total income 56,494 42,298 33,956 Expenses Interest expense 4,323 4,333 3,797 Salaries and employee benefits 1,012 690 493 Professional fees 481 423 236 Other 898 829 627 Total expense 6,714 6,275 5,153 Income Before Income Tax and Equity in Undistributed Income of Subsidiaries 49,780 36,023 28,803 Income Tax Benefit (582) (698) (1,174) Income Before Equity in Undistributed Income of Subsidiaries 50,362 36,721 29,977 Equity in Undistributed Income of Subsidiaries 228,872 183,000 197,127 Net Income $ 279,234 $ 219,721 $ 227,104 Comprehensive Income $ 287,267 $ 210,654 $ 225,276 |
Summary of condensed statements of cash flows | Year Ended December 31, 2023 2022 2021 (In thousands) Operating Activities Net income $ 279,234 $ 219,721 $ 227,104 Adjustments to reconcile net income to net cash used in operating activities (229,428) (181,263) (195,530) Net cash provided by operating activities 49,806 38,458 31,574 Investing Activities Contributed capital to subsidiaries (43,922) (110,000) (116,176) Purchase of limited partnership interests or LLC's (769) (8,746) (15,223) Other investing activity 554 — — Net cash used in investing activities (44,137) (118,746) (131,399) Financing Activities Net change in lines of credit and subordinated debt 43,922 4,000 2,040 Dividends paid (48,506) (38,067) (31,235) Proceeds from issuance of preferred stock — 137,459 191,084 Redemption of preferred stock — — (41,625) Repurchase of common stock — (3,935) — Net cash provided by (used in) financing activities (4,584) 99,457 120,264 Net Change in Cash and Due From Banks 1,085 19,169 20,439 Cash and Due From Banks at Beginning of Year 41,725 22,556 2,117 Cash and Due From Banks at End of Year $ 42,810 $ 41,725 $ 22,556 Additional Cash Flows Information: Payable for limited partnership interest or LLC's $ 2,752 $ 3,521 $ 10,350 |
Quarterly Condensed Financial_2
Quarterly Condensed Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Quarterly Condensed Financial Information (Unaudited) | |
Schedule of quarterly condensed financial information (unaudited) | 2023 Quarter Ended (Dollars in thousands, except per share data) March 31 June 30 September 30 December 31 Interest income $ 211,294 $ 258,069 $ 296,676 $ 311,759 Interest expense 110,601 152,452 179,240 187,434 Net interest income 100,693 105,617 117,436 124,325 Provision for credit losses 6,867 22,603 4,014 6,747 Net interest income after provision for credit losses 93,826 83,014 113,422 117,578 Noninterest income 14,264 29,882 36,068 34,454 Noninterest expense 34,772 44,320 42,930 52,579 Income before income taxes 73,318 68,576 106,560 99,453 Income taxes 18,363 3,274 25,056 21,980 Net income 54,955 65,302 81,504 77,473 Less: preferred stock dividends 8,667 8,668 8,668 8,667 Net income allocated to common shareholders $ 46,288 $ 56,634 $ 72,836 $ 68,806 Per common share data: Basic earnings per common share $ 1.07 $ 1.31 $ 1.68 $ 1.59 Diluted earnings per common share $ 1.07 $ 1.31 $ 1.68 $ 1.58 2022 Quarter Ended (Dollars in thousands, except per share data) March 31 June 30 September 30 December 31 Interest income $ 76,012 $ 89,270 $ 134,112 $ 181,439 Interest expense 10,287 17,239 48,727 86,029 Net interest income 65,725 72,031 85,385 95,410 Provision for credit losses 2,451 6,212 2,225 6,407 Net interest income after provision for credit losses 63,274 65,819 83,160 89,003 Noninterest income 34,597 39,171 29,186 22,982 Noninterest expense 31,033 32,957 34,951 37,109 Income before income taxes 66,838 72,033 77,395 74,876 Income taxes 16,696 18,098 18,907 17,720 Net income 50,142 53,935 58,488 57,156 Less: preferred stock dividends 5,728 5,729 5,729 8,797 Net income allocated to common shareholders $ 44,414 $ 48,206 $ 52,759 $ 48,359 Per common share data: Basic earnings per common share $ 1.03 $ 1.12 $ 1.22 $ 1.12 Diluted earnings per common share $ 1.02 $ 1.11 $ 1.22 $ 1.12 |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies - Operations (Details) | 12 Months Ended |
Dec. 31, 2023 item | |
Merchants Bank | |
Nature of Operations and Principles of Consolidation | |
Number of locations of operation | 6 |
FMBI | |
Nature of Operations and Principles of Consolidation | |
Number of locations of operation | 4 |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies (Details) - USD ($) | Jan. 26, 2024 | Dec. 31, 2023 | Mar. 30, 2023 | Dec. 31, 2022 |
Retained earnings, net of tax | $ 1,063,599,000 | $ 832,871,000 | ||
Restricted cash | $ 36,400,000 | |||
Credit linked notes | ||||
Notes issued | $ 158,100,000 | |||
Farmers Merchants Bank Of Illinois Branches | Disposed by sale | Subsequent event | ||||
Assets | $ 50,800,000 | |||
Net gain | 703,000 | |||
Deposit premium | 10,100,000 | |||
Extinguishment Of Goodwill | 7,800,000 | |||
Extinguishment Of Intangibles | 500,000 | |||
Liabilities | 230,200,000 | |||
Farmers-Merchants Bank of Illinois branch locations in Paxton, Melvin, and Piper City, Illinois | Disposed by sale | Bank of Pontiac | Subsequent event | ||||
Deposits | 164,800,000 | |||
Loans | 19,200,000 | |||
Farmers-Merchants Bank of Illinois branch located in Joy, Illinois | Disposed by sale | CBI Bank & Trust | Subsequent event | ||||
Deposits | 65,100,000 | |||
Loans | $ 28,600,000 |
Nature of Operations and Summ_6
Nature of Operations and Summary of Significant Accounting Policies - Deconsolidation (Details) $ in Millions | Feb. 01, 2021 USD ($) |
Nature of Operations and Summary of Significant Accounting Policies | |
Net assets deconsolidated | $ 10 |
Loans receivable deconsolidated | 66.6 |
Borrowings deconsolidated | 52.7 |
Fair value of continuing investments after deconsolidation | 10 |
Gain or loss on deconsolidation | $ 0 |
Nature of Operations and Summ_7
Nature of Operations and Summary of Significant Accounting Policies - Cash, Cash Equivalents and Other (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents | ||
Cash accounts in excess of federally insured limits | $ 564,500,000 | $ 208,400,000 |
Cash accounts in excess of federally insured limits with Federal Reserve Bank | 510,200,000 | 185,600,000 |
Cash accounts in excess of federally insured limits with Federal Home Loan Bank of Indianapolis | 5,800,000 | 3,600,000 |
Cash accounts in excess of federally insured limits with Federal Home Loan Bank of Chicago | 156,000 | 150,000 |
Securities | ||
Securities held to maturity ($1,203,535 and $1,118,966 at fair value, respectively) | $ 1,204,217,000 | $ 1,119,078,000 |
Loans Held for Sale under Mortgage Banking Activities | ||
Maximum participation interest to be purchased in individual loans (as a percent) | 100% |
Nature of Operations and Summ_8
Nature of Operations and Summary of Significant Accounting Policies - Loans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | May 05, 2022 | |
Loans and Allowance for Credit Losses on Loans | |||
Accrued interest on loans, excluded from amortized cost of loans | $ 60.4 | $ 35 | |
Initial ACL - Guarantee | $ 1.2 | ||
Loan Sale and Freddie Mac Q Series Securitization | |||
Loans and Allowance for Credit Losses on Loans | |||
First loss position in loan portfolio, maximum securitization pool, percentage | 12% | 12% |
Nature of Operations and Summ_9
Nature of Operations and Summary of Significant Accounting Policies - Premises and Equipment (Details) | Dec. 31, 2023 |
Vehicles | |
Premises and Equipment | |
Estimated useful lives | 5 years |
Minimum | Buildings | |
Premises and Equipment | |
Estimated useful lives | 7 years |
Minimum | Leasehold improvements | |
Premises and Equipment | |
Estimated useful lives | 2 years |
Minimum | Software and intangible assets | |
Premises and Equipment | |
Estimated useful lives | 5 years |
Minimum | Furniture, fixtures and equipment | |
Premises and Equipment | |
Estimated useful lives | 3 years |
Maximum | Buildings | |
Premises and Equipment | |
Estimated useful lives | 40 years |
Maximum | Leasehold improvements | |
Premises and Equipment | |
Estimated useful lives | 11 years |
Maximum | Software and intangible assets | |
Premises and Equipment | |
Estimated useful lives | 10 years |
Maximum | Furniture, fixtures and equipment | |
Premises and Equipment | |
Estimated useful lives | 15 years |
Nature of Operations and Sum_10
Nature of Operations and Summary of Significant Accounting Policies - Leases (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Lessee operating lease, option to extend | true |
Minimum | |
Leases | |
Lease period | 1 year |
Maximum | |
Leases | |
Lease period | 11 years |
Nature of Operations and Sum_11
Nature of Operations and Summary of Significant Accounting Policies - Goodwill and Intangible Assets (Details) | Dec. 31, 2023 |
Customer list | |
Intangible assets | |
Amortization period | 21 months |
Core deposit intangible | |
Intangible assets | |
Amortization period | 10 years |
Minimum | Licenses and Trade Names | |
Intangible assets | |
Amortization period | 84 months |
Maximum | Licenses and Trade Names | |
Intangible assets | |
Amortization period | 120 months |
Nature of Operations and Sum_12
Nature of Operations and Summary of Significant Accounting Policies - Shared-based Compensation (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Share-based Compensation Plan | |
Share awards vesting period | 3 years |
Restriction on Cash and Due F_2
Restriction on Cash and Due From Banks (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 26, 2020 |
Restriction on Cash and Due From Banks | |||
Percentage of reserve required for restriction on cash and due from banks | 0% | 0% | 0% |
Restricted cash | $ 36.4 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost to Approximate Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Available for sale securities: | ||
Amortized Cost | $ 1,116,954 | $ 337,387 |
Gross Unrealized Gains | 50 | 8 |
Gross Unrealized Losses | 3,317 | 14,058 |
Fair Value | 1,113,687 | 323,337 |
Accrued interest on securities available for sale | 6,700 | 500 |
Accrued interest on securities held to maturity | 5,800 | 4,300 |
Held to maturity securities: | ||
Amortized Cost | 1,204,217 | 1,119,078 |
Gross Unrealized Gains | 973 | 12 |
Gross Unrealized Losses | 1,655 | 124 |
Fair Value | 1,203,535 | 1,118,966 |
Treasury notes | ||
Available for sale securities: | ||
Amortized Cost | 129,261 | 37,234 |
Gross Unrealized Gains | 45 | 1 |
Gross Unrealized Losses | 338 | 955 |
Fair Value | 128,968 | 36,280 |
Federal agencies | ||
Available for sale securities: | ||
Amortized Cost | 250,731 | 284,986 |
Gross Unrealized Losses | 2,976 | 13,096 |
Fair Value | 247,755 | 271,890 |
Mortgage-backed - Agency | ||
Available for sale securities: | ||
Amortized Cost | 15,167 | |
Gross Unrealized Gains | 7 | |
Gross Unrealized Losses | 7 | |
Fair Value | 15,167 | |
Held to maturity securities: | ||
Amortized Cost | 12,016 | |
Gross Unrealized Losses | 822 | |
Fair Value | 11,194 | |
Mortgage-backed - Government Agency ("Agency") | ||
Available for sale securities: | ||
Amortized Cost | 14,465 | |
Gross Unrealized Gains | 5 | |
Gross Unrealized Losses | 3 | |
Fair Value | 14,467 | |
Mortgage-backed - Agency - fair value option | ||
Available for sale securities: | ||
Amortized Cost | 236,997 | |
Fair Value | 236,997 | |
Mortgage-backed - Non-Agency multi-family | ||
Held to maturity securities: | ||
Amortized Cost | 719,662 | 871,772 |
Gross Unrealized Gains | 12 | |
Gross Unrealized Losses | 415 | |
Fair Value | 719,247 | 871,784 |
Mortgage-backed - Non-Agency residential | ||
Available for sale securities: | ||
Amortized Cost | 485,500 | |
Fair Value | 485,500 | |
Held to maturity securities: | ||
Amortized Cost | 472,539 | 247,306 |
Gross Unrealized Gains | 973 | |
Gross Unrealized Losses | 418 | 124 |
Fair Value | $ 473,094 | $ 247,182 |
Investment Securities - Contrac
Investment Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Available for Sale Securities, Amortized Cost | ||
Within one year | $ 308,474 | |
After one through five years | 71,518 | |
Total, single maturity date | 379,992 | |
Total | 1,116,954 | $ 337,387 |
Available for Sale Securities, Fair Value | ||
Within one year | 305,406 | |
After one through five years | 71,317 | |
Total, single maturity date | 376,723 | |
Total | 1,113,687 | 323,337 |
Held to Maturity Securities, Amortized Cost | ||
Total | 1,204,217 | 1,119,078 |
Held to Maturity Securities, Fair Value | ||
Total | 1,203,535 | 1,118,966 |
Mortgage-backed - Agency | ||
Available for Sale Securities, Amortized Cost | ||
Total | 15,167 | |
Available for Sale Securities, Fair Value | ||
Total | 15,167 | |
Held to Maturity Securities, Amortized Cost | ||
Total | 12,016 | |
Held to Maturity Securities, Fair Value | ||
Total | 11,194 | |
Mortgage-backed - Government Agency ("Agency") | ||
Available for Sale Securities, Amortized Cost | ||
Without single maturity date | 14,465 | |
Total | 14,465 | |
Available for Sale Securities, Fair Value | ||
Without single maturity date | 14,467 | |
Total | 14,467 | |
Mortgage-backed - Agency - fair value option | ||
Available for Sale Securities, Amortized Cost | ||
Without single maturity date | 236,997 | |
Total | 236,997 | |
Available for Sale Securities, Fair Value | ||
Without single maturity date | 236,997 | |
Total | 236,997 | |
Mortgage-backed - Non-Agency multi-family | ||
Held to Maturity Securities, Amortized Cost | ||
Total | 719,662 | 871,772 |
Held to Maturity Securities, Fair Value | ||
Total | 719,247 | 871,784 |
Mortgage-backed - Non-Agency residential | ||
Available for Sale Securities, Amortized Cost | ||
Without single maturity date | 485,500 | |
Total | 485,500 | |
Available for Sale Securities, Fair Value | ||
Without single maturity date | 485,500 | |
Total | 485,500 | |
Held to Maturity Securities, Amortized Cost | ||
Total | 472,539 | 247,306 |
Held to Maturity Securities, Fair Value | ||
Total | $ 473,094 | $ 247,182 |
Investment Securities - Sale of
Investment Securities - Sale of securities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Securities | |||
Proceeds from the sale of securities available for sale | $ 1,516,000 | $ 11,379,000 | $ 38,566,000 |
Net gain on sale of securities available for sale | 191,000 | ||
Gain loss recognized | 0 | $ 0 | |
Investment securities pledged as collateral | $ 1,100,000,000 | 570,600,000 | |
Mortgage-backed - Non-Agency multi-family | |||
Securities | |||
Proceeds from the sale of securities available for sale | $ 11,400,000 |
Investment Securities - Continu
Investment Securities - Continuous Unrealized Loss Position (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) position | Dec. 31, 2022 USD ($) position | |
Securities | ||
Percentage of AFS investment portfolio | 24% | 95% |
Percentage of HTM investment portfolio | 65% | 22% |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | $ 63,957 | $ 49,545 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 199,479 | 258,411 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | $ 263,436 | $ 307,956 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Number of Positions | position | 28 | 37 |
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value | ||
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value, Total | $ 777,700 | $ 247,200 |
Held-to-maturity Securities, Fair Value, Number of Positions | position | 8 | 2 |
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 | $ 196 | $ 1,493 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | 3,121 | 12,565 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 3,317 | 14,058 |
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 | 3,052 | 29,560 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 32,080 | 5,798 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 35,132 | 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 | 6 | 762 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | 332 | 193 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 338 | 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 | 60,541 | 19,276 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 167,213 | 252,613 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 227,754 | 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 | 189 | 724 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | 2,787 | 12,372 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 2,976 | 13,096 |
Mortgage-backed - Agency | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 364 | 709 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 186 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 550 | 709 |
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 | 1 | 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 | $ 3 | $ 7 |
Mortgage Loans in Process of _2
Mortgage Loans in Process of Securitization (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Mortgage Loans in Process of Securitization | ||
Positive (negative) fair market adjustment, mortgage loans in process of securitization | $ 0.8 | $ 0.3 |
Loans and Allowance for Credi_3
Loans and Allowance for Credit Losses on Loans - Summary of Loans By Classification (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Loans and Allowance for Credit Losses on Loans | ||||
Loans | $ 10,199,553 | $ 7,470,872 | ||
ACL-Loans | 71,752 | 44,014 | $ 31,344 | $ 27,500 |
Loans receivable | 10,127,801 | 7,426,858 | ||
Accrued interest on loans, excluded from amortized cost of loans | 60,400 | 35,000 | ||
Mortgage warehouse lines of credit | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 752,468 | 464,785 | ||
ACL-Loans | 2,070 | 1,249 | 1,955 | 4,018 |
Residential real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 1,324,305 | 1,178,401 | ||
ACL-Loans | 7,323 | 7,029 | 4,170 | 3,334 |
Residential real estate | Home equity line of credit | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 1,200,000 | 1,100,000 | ||
Healthcare financing | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 2,356,689 | 1,604,341 | ||
ACL-Loans | 22,454 | 9,882 | 4,461 | 2,591 |
Multi-family financing | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 4,006,160 | 3,135,535 | ||
ACL-Loans | 26,874 | 16,781 | 14,084 | 12,140 |
Commercial and commercial real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 1,643,081 | 978,661 | ||
ACL-Loans | 12,243 | 8,326 | 5,879 | 4,641 |
Revolving lines of credit collateralized primarily by mortgage servicing rights | 1,100,000 | 497,000 | ||
Commercial and commercial real estate | Non-owner occupied commercial real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | $ 8,400 | 12,800 | ||
Commercial and commercial real estate | Non-owner occupied commercial real estate | Minimum | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Percentage of loans to be forgiven | 1 | |||
Agricultural production and real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | $ 103,150 | 95,651 | ||
ACL-Loans | 619 | 565 | 657 | 636 |
Consumer and margin loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 13,700 | 13,498 | ||
ACL-Loans | $ 169 | $ 182 | $ 138 | $ 140 |
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 | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Allowance for credit losses | |||||||||||
Balance, beginning of period | $ 44,014 | $ 31,344 | $ 44,014 | $ 31,344 | $ 27,500 | ||||||
Provision for credit losses | 37,488 | 13,473 | 5,012 | ||||||||
Loans charged to the allowance | (9,791) | (1,257) | (1,192) | ||||||||
Recoveries of loans previously charged-off | 41 | 753 | 24 | ||||||||
Balance, end of period | $ 71,752 | $ 44,014 | 71,752 | 44,014 | 31,344 | ||||||
ACL Loans | |||||||||||
Provision for credit losses | 6,747 | $ 4,014 | $ 22,603 | 6,867 | 6,407 | $ 2,225 | $ 6,212 | 2,451 | 40,231 | 17,295 | 5,012 |
Provision for credit losses, ACL Loans | 37,500 | 13,500 | |||||||||
Provision for credit losses, ACL-OBCE's | 2,700 | 2,600 | |||||||||
Provision for credit losses, ACL-Guarantees | 1,200 | ||||||||||
ASU 2016-13 | Impact from adoption of ASU | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | (299) | (299) | |||||||||
Balance, end of period | (299) | (299) | |||||||||
Mortgage warehouse lines of credit | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | 1,249 | 1,955 | 1,249 | 1,955 | 4,018 | ||||||
Provision for credit losses | 821 | (747) | (2,063) | ||||||||
Balance, end of period | 2,070 | 1,249 | 2,070 | 1,249 | 1,955 | ||||||
Mortgage warehouse lines of credit | ASU 2016-13 | Impact from adoption of ASU | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | 41 | 41 | |||||||||
Balance, end of period | 41 | 41 | |||||||||
Residential real estate | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | 7,029 | 4,170 | 7,029 | 4,170 | 3,334 | ||||||
Provision for credit losses | 328 | 2,588 | 838 | ||||||||
Loans charged to the allowance | (34) | (4) | (2) | ||||||||
Balance, end of period | 7,323 | 7,029 | 7,323 | 7,029 | 4,170 | ||||||
Residential real estate | ASU 2016-13 | Impact from adoption of ASU | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | 275 | 275 | |||||||||
Balance, end of period | 275 | 275 | |||||||||
Multi-family financing | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | 16,781 | 14,084 | 16,781 | 14,084 | 12,140 | ||||||
Provision for credit losses | 18,493 | 2,177 | 1,944 | ||||||||
Loans charged to the allowance | (8,400) | ||||||||||
Balance, end of period | 26,874 | 16,781 | 26,874 | 16,781 | 14,084 | ||||||
Multi-family financing | ASU 2016-13 | Impact from adoption of ASU | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | 520 | 520 | |||||||||
Balance, end of period | 520 | 520 | |||||||||
Healthcare financing | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | 9,882 | 4,461 | 9,882 | 4,461 | 2,591 | ||||||
Provision for credit losses | 12,572 | 5,282 | 1,870 | ||||||||
Balance, end of period | 22,454 | 9,882 | 22,454 | 9,882 | 4,461 | ||||||
Healthcare financing | ASU 2016-13 | Impact from adoption of ASU | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | 139 | 139 | |||||||||
Balance, end of period | 139 | 139 | |||||||||
Commercial and commercial real estate | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | 8,326 | 5,879 | 8,326 | 5,879 | 4,641 | ||||||
Provision for credit losses | 5,232 | 4,216 | 2,422 | ||||||||
Loans charged to the allowance | (1,356) | (1,238) | (1,184) | ||||||||
Recoveries of loans previously charged-off | 41 | 746 | |||||||||
Balance, end of period | 12,243 | 8,326 | 12,243 | 8,326 | 5,879 | ||||||
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) | |||||||||
Balance, end of period | (1,277) | (1,277) | |||||||||
Agricultural production and real estate | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | 565 | 657 | 565 | 657 | 636 | ||||||
Provision for credit losses | 54 | (74) | 21 | ||||||||
Balance, end of period | 619 | 565 | 619 | 565 | 657 | ||||||
Agricultural production and real estate | ASU 2016-13 | Impact from adoption of ASU | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | (18) | (18) | |||||||||
Balance, end of period | (18) | (18) | |||||||||
Consumer and margin loans | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | 182 | $ 138 | 182 | 138 | 140 | ||||||
Provision for credit losses | (12) | 31 | (20) | ||||||||
Loans charged to the allowance | (1) | (15) | (6) | ||||||||
Recoveries of loans previously charged-off | 7 | 24 | |||||||||
Balance, end of period | $ 169 | 182 | 169 | 182 | $ 138 | ||||||
Consumer and margin loans | ASU 2016-13 | Impact from adoption of ASU | |||||||||||
Allowance for credit losses | |||||||||||
Balance, beginning of period | $ 21 | $ 21 | |||||||||
Balance, end 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 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | $ 10,199,553 | $ 7,470,872 | ||
ACL-Loans | 71,752 | 44,014 | $ 31,344 | $ 27,500 |
Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 128,627 | 64,825 | ||
ACL-Loans | 7,964 | 1,181 | ||
Real Estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 122,334 | 58,927 | ||
Accounts Receivable Or Equipment | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 3,603 | 4,917 | ||
Other Collateralized Assets | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 2,690 | 981 | ||
Mortgage warehouse lines of credit | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 752,468 | 464,785 | ||
ACL-Loans | 2,070 | 1,249 | 1,955 | 4,018 |
Residential real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 1,324,305 | 1,178,401 | ||
ACL-Loans | 7,323 | 7,029 | 4,170 | 3,334 |
Residential real estate | Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 1,560 | 246 | ||
ACL-Loans | 21 | 31 | ||
Residential real estate | Real Estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 1,557 | 237 | ||
Residential real estate | Other Collateralized Assets | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 3 | 9 | ||
Multi-family financing | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 4,006,160 | 3,135,535 | ||
ACL-Loans | 26,874 | 16,781 | 14,084 | 12,140 |
Multi-family financing | Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 46,575 | 36,760 | ||
ACL-Loans | 521 | 173 | ||
Multi-family financing | Real Estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 46,575 | 36,760 | ||
Healthcare financing | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 2,356,689 | 1,604,341 | ||
ACL-Loans | 22,454 | 9,882 | 4,461 | 2,591 |
Healthcare financing | Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 73,909 | 21,783 | ||
ACL-Loans | 6,289 | 134 | ||
Healthcare financing | Real Estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 73,909 | 21,783 | ||
Commercial and commercial real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 1,643,081 | 978,661 | ||
ACL-Loans | 12,243 | 8,326 | 5,879 | 4,641 |
Commercial and commercial real estate | Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 6,433 | 5,883 | ||
ACL-Loans | 1,132 | 842 | ||
Commercial and commercial real estate | Real Estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 146 | |||
Commercial and commercial real estate | Accounts Receivable Or Equipment | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 3,603 | 4,917 | ||
Commercial and commercial real estate | Other Collateralized Assets | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 2,684 | 966 | ||
Agricultural production and real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 103,150 | 95,651 | ||
ACL-Loans | 619 | 565 | 657 | 636 |
Agricultural production and real estate | Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 147 | 147 | ||
ACL-Loans | 1 | 1 | ||
Agricultural production and real estate | Real Estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 147 | 147 | ||
Consumer and margin loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 13,700 | 13,498 | ||
ACL-Loans | 169 | 182 | $ 138 | $ 140 |
Consumer and margin loans | Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 3 | 6 | ||
Consumer and margin loans | Other Collateralized Assets | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | $ 3 | $ 6 |
Loans and Allowance for Credi_6
Loans and Allowance for Credit Losses on Loans - Credit Risk Profile of Loan Portfolio (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Credit risk profile of portfolio | |||
2023 | $ 2,115,132 | $ 2,475,328 | |
2022 | 1,954,111 | 997,674 | |
2021 | 454,876 | 354,135 | |
2020 | 136,666 | 80,929 | |
2019 | 74,113 | 26,535 | |
Prior | 58,347 | 49,623 | |
Revolving Loans | 5,406,308 | 3,486,648 | |
Loans | 10,199,553 | 7,470,872 | |
Net Charge-Offs | |||
2022 | 8,896 | ||
2021 | 274 | ||
2020 | 586 | ||
Prior | 22 | ||
Revolving Loans | 13 | ||
Net Charge-Offs | 9,791 | 1,257 | $ 1,192 |
Pass | |||
Credit risk profile of portfolio | |||
2023 | 1,947,008 | 2,353,570 | |
2022 | 1,902,347 | 948,348 | |
2021 | 409,166 | 344,099 | |
2020 | 135,601 | 80,256 | |
2019 | 73,977 | 26,199 | |
Prior | 55,806 | 47,345 | |
Revolving Loans | 5,355,754 | 3,468,410 | |
Loans | 9,879,659 | 7,268,227 | |
Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2023 | 130,842 | 84,998 | |
2022 | 12,709 | 25,526 | |
2021 | 8,692 | 9,445 | |
2020 | 187 | 601 | |
2019 | 74 | 262 | |
Prior | 2,053 | 1,287 | |
Revolving Loans | 36,710 | 15,701 | |
Loans | 191,267 | 137,820 | |
Substandard | |||
Credit risk profile of portfolio | |||
2023 | 37,282 | 36,760 | |
2022 | 39,055 | 23,800 | |
2021 | 37,018 | 591 | |
2020 | 878 | 72 | |
2019 | 62 | 74 | |
Prior | 438 | 991 | |
Revolving Loans | 13,844 | 2,537 | |
Loans | 128,577 | 64,825 | |
Doubtful | |||
Credit risk profile of portfolio | |||
Prior | 50 | ||
Loans | 50 | ||
Mortgage warehouse lines of credit | |||
Credit risk profile of portfolio | |||
Revolving Loans | 752,468 | 464,785 | |
Loans | 752,468 | 464,785 | |
Mortgage warehouse lines of credit | Pass | |||
Credit risk profile of portfolio | |||
Revolving Loans | 752,468 | 464,785 | |
Loans | 752,468 | 464,785 | |
Residential real estate | |||
Credit risk profile of portfolio | |||
2023 | 31,011 | 13,344 | |
2022 | 10,086 | 8,192 | |
2021 | 6,573 | 24,708 | |
2020 | 22,725 | 3,559 | |
2019 | 3,357 | 1,796 | |
Prior | 10,120 | 12,006 | |
Revolving Loans | 1,240,433 | 1,114,796 | |
Loans | 1,324,305 | 1,178,401 | |
Net Charge-Offs | |||
Prior | 21 | ||
Revolving Loans | 13 | ||
Net Charge-Offs | 34 | 4 | 2 |
Residential real estate | Pass | |||
Credit risk profile of portfolio | |||
2023 | 31,011 | 13,344 | |
2022 | 10,086 | 8,192 | |
2021 | 6,573 | 24,708 | |
2020 | 22,725 | 3,498 | |
2019 | 3,298 | 1,722 | |
Prior | 9,340 | 11,166 | |
Revolving Loans | 1,239,161 | 1,114,705 | |
Loans | 1,322,194 | 1,177,335 | |
Residential real estate | Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2020 | 61 | ||
2019 | 59 | ||
Prior | 492 | 668 | |
Revolving Loans | 91 | ||
Loans | 551 | 820 | |
Residential real estate | Substandard | |||
Credit risk profile of portfolio | |||
2019 | 74 | ||
Prior | 288 | 172 | |
Revolving Loans | 1,272 | ||
Loans | 1,560 | 246 | |
Multi-family financing | |||
Credit risk profile of portfolio | |||
2023 | 1,201,353 | 1,281,687 | |
2022 | 793,997 | 544,823 | |
2021 | 223,277 | 208,829 | |
2020 | 77,340 | 32,349 | |
2019 | 29,764 | 4,416 | |
Prior | 9,932 | 7,229 | |
Revolving Loans | 1,670,497 | 1,056,202 | |
Loans | 4,006,160 | 3,135,535 | |
Net Charge-Offs | |||
2022 | 8,400 | ||
Net Charge-Offs | 8,400 | ||
Multi-family financing | Pass | |||
Credit risk profile of portfolio | |||
2023 | 1,094,698 | 1,212,008 | |
2022 | 762,448 | 544,823 | |
2021 | 208,343 | 200,829 | |
2020 | 77,340 | 32,349 | |
2019 | 29,764 | 4,416 | |
Prior | 8,455 | 7,229 | |
Revolving Loans | 1,646,445 | 1,042,024 | |
Loans | 3,827,493 | 3,043,678 | |
Multi-family financing | Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2023 | 94,973 | 32,919 | |
2022 | 3,189 | ||
2021 | 8,400 | 8,000 | |
Prior | 1,477 | ||
Revolving Loans | 24,052 | 14,178 | |
Loans | 132,091 | 55,097 | |
Multi-family financing | Substandard | |||
Credit risk profile of portfolio | |||
2023 | 11,682 | 36,760 | |
2022 | 28,360 | ||
2021 | 6,534 | ||
Loans | 46,576 | 36,760 | |
Healthcare financing | |||
Credit risk profile of portfolio | |||
2023 | 814,060 | 1,039,698 | |
2022 | 1,016,418 | 348,193 | |
2021 | 138,980 | 78,792 | |
2020 | 13,770 | ||
2019 | 14,563 | ||
Revolving Loans | 372,668 | 123,888 | |
Loans | 2,356,689 | 1,604,341 | |
Healthcare financing | Pass | |||
Credit risk profile of portfolio | |||
2023 | 752,591 | 987,676 | |
2022 | 996,273 | 301,103 | |
2021 | 110,197 | 78,792 | |
2020 | 13,770 | ||
2019 | 14,563 | ||
Revolving Loans | 351,110 | 123,888 | |
Loans | 2,224,734 | 1,505,229 | |
Healthcare financing | Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2023 | 35,869 | 52,022 | |
2022 | 9,520 | 25,307 | |
Revolving Loans | 12,658 | ||
Loans | 58,047 | 77,329 | |
Healthcare financing | Substandard | |||
Credit risk profile of portfolio | |||
2023 | 25,600 | ||
2022 | 10,625 | 21,783 | |
2021 | 28,783 | ||
Revolving Loans | 8,900 | ||
Loans | 73,908 | 21,783 | |
Commercial and commercial real estate | |||
Credit risk profile of portfolio | |||
2023 | 51,110 | 123,800 | |
2022 | 119,456 | 88,463 | |
2021 | 79,309 | 25,357 | |
2020 | 22,204 | 24,921 | |
2019 | 21,150 | 12,434 | |
Prior | 17,200 | 9,659 | |
Revolving Loans | 1,332,652 | 694,027 | |
Loans | 1,643,081 | 978,661 | |
Net Charge-Offs | |||
2022 | 496 | ||
2021 | 274 | ||
2020 | 586 | ||
Net Charge-Offs | 1,356 | 1,238 | 1,184 |
Commercial and commercial real estate | Pass | |||
Credit risk profile of portfolio | |||
2023 | 51,110 | 123,757 | |
2022 | 119,386 | 86,282 | |
2021 | 77,316 | 23,803 | |
2020 | 21,154 | 24,730 | |
2019 | 21,088 | 12,335 | |
Prior | 17,066 | 8,765 | |
Revolving Loans | 1,328,980 | 690,114 | |
Loans | 1,636,100 | 969,786 | |
Commercial and commercial real estate | Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2023 | 43 | ||
2022 | 164 | ||
2021 | 292 | 963 | |
2020 | 172 | 119 | |
2019 | 99 | ||
Prior | 84 | 228 | |
Revolving Loans | 1,376 | ||
Loans | 548 | 2,992 | |
Commercial and commercial real estate | Substandard | |||
Credit risk profile of portfolio | |||
2022 | 70 | 2,017 | |
2021 | 1,701 | 591 | |
2020 | 878 | 72 | |
2019 | 62 | ||
Prior | 666 | ||
Revolving Loans | 3,672 | 2,537 | |
Loans | 6,383 | 5,883 | |
Commercial and commercial real estate | Doubtful | |||
Credit risk profile of portfolio | |||
Prior | 50 | ||
Loans | 50 | ||
Agricultural production and real estate | |||
Credit risk profile of portfolio | |||
2023 | 16,850 | 12,126 | |
2022 | 9,825 | 7,540 | |
2021 | 6,490 | 16,122 | |
2020 | 14,267 | 6,229 | |
2019 | 5,237 | 3,300 | |
Prior | 16,753 | 20,712 | |
Revolving Loans | 33,728 | 29,622 | |
Loans | 103,150 | 95,651 | |
Agricultural production and real estate | Pass | |||
Credit risk profile of portfolio | |||
2023 | 16,850 | 12,112 | |
2022 | 9,825 | 7,485 | |
2021 | 6,490 | 15,660 | |
2020 | 14,267 | 5,808 | |
2019 | 5,237 | 3,137 | |
Prior | 16,606 | 20,176 | |
Revolving Loans | 33,728 | 29,566 | |
Loans | 103,003 | 93,944 | |
Agricultural production and real estate | Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2023 | 14 | ||
2022 | 55 | ||
2021 | 462 | ||
2020 | 421 | ||
2019 | 163 | ||
Prior | 389 | ||
Revolving Loans | 56 | ||
Loans | 1,560 | ||
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 | 748 | 4,673 | |
2022 | 4,329 | 463 | |
2021 | 247 | 327 | |
2020 | 130 | 101 | |
2019 | 42 | 4,589 | |
Prior | 4,342 | 17 | |
Revolving Loans | 3,862 | 3,328 | |
Loans | 13,700 | 13,498 | |
Net Charge-Offs | |||
Prior | 1 | ||
Net Charge-Offs | 1 | 15 | $ 6 |
Consumer and margin loans | Pass | |||
Credit risk profile of portfolio | |||
2023 | 748 | 4,673 | |
2022 | 4,329 | 463 | |
2021 | 247 | 307 | |
2020 | 115 | 101 | |
2019 | 27 | 4,589 | |
Prior | 4,339 | 9 | |
Revolving Loans | 3,862 | 3,328 | |
Loans | 13,667 | 13,470 | |
Consumer and margin loans | Special Mention (Watch) | |||
Credit risk profile of portfolio | |||
2021 | 20 | ||
2020 | 15 | ||
2019 | 15 | ||
Prior | 2 | ||
Loans | 30 | 22 | |
Consumer and margin loans | Substandard | |||
Credit risk profile of portfolio | |||
Prior | 3 | 6 | |
Loans | $ 3 | $ 6 |
Loans and Allowance for Credi_7
Loans and Allowance for Credit Losses on Loans - Aging Analysis Of The Recorded Investment In Loans (Details) $ in Thousands | Dec. 31, 2023 USD ($) loan | Dec. 31, 2022 USD ($) |
Aging analysis of loan portfolio | ||
Loans | $ 10,199,553 | $ 7,470,872 |
Number of delinquent loans classified as held for sale | loan | 1 | |
Loan as held for sale | $ 16,500 | |
Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 183,529 | 39,752 |
30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 42,975 | 13,721 |
60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 58,737 | 176 |
Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 81,817 | 25,855 |
Current. | ||
Aging analysis of loan portfolio | ||
Loans | 10,016,024 | 7,431,120 |
Mortgage warehouse lines of credit | ||
Aging analysis of loan portfolio | ||
Loans | 752,468 | 464,785 |
Mortgage warehouse lines of credit | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 752,468 | 464,785 |
Residential real estate | ||
Aging analysis of loan portfolio | ||
Loans | 1,324,305 | 1,178,401 |
Residential real estate | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 6,936 | 4,477 |
Residential real estate | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 4,557 | 4,053 |
Residential real estate | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 152 | |
Residential real estate | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 2,379 | 272 |
Residential real estate | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 1,317,369 | 1,173,924 |
Healthcare financing | ||
Aging analysis of loan portfolio | ||
Loans | 2,356,689 | 1,604,341 |
Healthcare financing | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 83,274 | 21,783 |
Healthcare financing | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 47,275 | |
Healthcare financing | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 35,999 | 21,783 |
Healthcare financing | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 2,273,415 | 1,582,558 |
Multi-family financing | ||
Aging analysis of loan portfolio | ||
Loans | 4,006,160 | 3,135,535 |
Multi-family financing | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 88,882 | |
Multi-family financing | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 38,218 | |
Multi-family financing | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 11,055 | |
Multi-family financing | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 39,609 | |
Multi-family financing | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 3,917,278 | 3,135,535 |
Commercial and commercial real estate | ||
Aging analysis of loan portfolio | ||
Loans | 1,643,081 | 978,661 |
Commercial and commercial real estate | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 4,230 | 8,537 |
Commercial and commercial real estate | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 172 | 4,759 |
Commercial and commercial real estate | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 393 | |
Commercial and commercial real estate | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 3,665 | 3,778 |
Commercial and commercial real estate | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 1,638,851 | 970,124 |
Agricultural production and real estate | ||
Aging analysis of loan portfolio | ||
Loans | 103,150 | 95,651 |
Agricultural production and real estate | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 185 | 4,903 |
Agricultural production and real estate | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 27 | 4,903 |
Agricultural production and real estate | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 11 | |
Agricultural production and real estate | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 147 | |
Agricultural production and real estate | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 102,965 | 90,748 |
Consumer and margin loans | ||
Aging analysis of loan portfolio | ||
Loans | 13,700 | 13,498 |
Consumer and margin loans | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 22 | 52 |
Consumer and margin loans | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 1 | 6 |
Consumer and margin loans | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 3 | 24 |
Consumer and margin loans | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 18 | 22 |
Consumer and margin loans | Current. | ||
Aging analysis of loan portfolio | ||
Loans | $ 13,678 | $ 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 | Dec. 31, 2023 | Dec. 31, 2022 |
Loan portfolio past due loans | ||
Nonaccrual | $ 73,847 | $ 26,571 |
Total Loans Greater than 90 Days & Accruing | 8,168 | 112 |
Residential real estate | ||
Loan portfolio past due loans | ||
Nonaccrual | 1,486 | 245 |
Total Loans Greater than 90 Days & Accruing | 894 | 96 |
Multi-family financing | ||
Loan portfolio past due loans | ||
Nonaccrual | 39,608 | |
Healthcare financing | ||
Loan portfolio past due loans | ||
Nonaccrual | 28,783 | 21,783 |
Total Loans Greater than 90 Days & Accruing | 7,216 | |
Commercial and commercial real estate | ||
Loan portfolio past due loans | ||
Nonaccrual | 3,820 | 4,390 |
Total Loans Greater than 90 Days & Accruing | 43 | |
Agricultural production and real estate | ||
Loan portfolio past due loans | ||
Nonaccrual | 147 | 147 |
Consumer and margin loans | ||
Loan portfolio past due loans | ||
Nonaccrual | 3 | 6 |
Total Loans Greater than 90 Days & Accruing | $ 15 | $ 16 |
Loans and Allowance for Credi_9
Loans and Allowance for Credit Losses on Loans - Modified loans (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) loan | |
Loan portfolio past due loans | |
Number of loans modified for borrowers | loan | 0 |
Total Past Due | |
Loan portfolio past due loans | |
Modified loans | $ 3,553 |
Greater Than 90 Days | |
Loan portfolio past due loans | |
Modified loans | 3,553 |
Payment Delay | |
Loan portfolio past due loans | |
Modified loans | $ 3,553 |
Commercial and commercial real estate | |
Loan portfolio past due loans | |
Weighted average term increase from modification | 12 months |
Commercial and commercial real estate | Total Past Due | |
Loan portfolio past due loans | |
Modified loans | $ 3,553 |
Commercial and commercial real estate | Greater Than 90 Days | |
Loan portfolio past due loans | |
Modified loans | 3,553 |
Commercial and commercial real estate | Payment Delay | |
Loan portfolio past due loans | |
Modified loans | $ 3,553 |
Loans and Allowance for Cred_10
Loans and Allowance for Credit Losses on Loans - Narrative (Details) | 12 Months Ended | |||||||
Aug. 31, 2023 USD ($) loan | Nov. 03, 2022 USD ($) loan | Sep. 22, 2022 USD ($) | May 05, 2022 USD ($) security | Dec. 31, 2023 USD ($) loan | Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Loans and Allowance for Credit Losses on Loans | ||||||||
Proceeds from sale of loans receivable | $ 65,768,000 | $ 788,848,000 | $ 262,086,000 | |||||
Purchase of loans | 358,462,000 | 551,091,000 | 369,148,000 | |||||
Gain on sale of loans | 48,183,000 | 64,150,000 | 111,185,000 | |||||
Payments to held to maturity security | 293,268,000 | 1,252,793,000 | ||||||
Servicing rights | 158,457,000 | 146,248,000 | 110,348,000 | $ 82,604,000 | ||||
Purchases of available for sale securities | $ 1,291,874,000 | 51,197,000 | $ 221,191,000 | |||||
Loan Sale and Freddie Mac Q Series Securitization | ||||||||
Loans and Allowance for Credit Losses on Loans | ||||||||
First loss position in loan portfolio, maximum securitization pool, percentage | 12% | 12% | ||||||
First loss position in loan portfolio, maximum securitization pool, amount | $ 25,700,000 | |||||||
First loss position in loan portfolio, reserves for losses | 1,200,000 | |||||||
Gain on sale of loans | $ 121,000 | 2,300,000 | ||||||
Servicing rights | 1,300,000 | 1,200,000 | ||||||
Loan Sale and Freddie Mac Q Series Securitization | Other liabilities | ||||||||
Loans and Allowance for Credit Losses on Loans | ||||||||
Non-contingent reserve | $ 2,500,000 | $ 2,500,000 | $ 2,500,000 | |||||
Loan Sale and Freddie Mac Q Series Securitization | Mortgage-backed Securities, Purchased from Freddie Mac | ||||||||
Loans and Allowance for Credit Losses on Loans | ||||||||
Number of securities purchased | security | 0 | |||||||
Loan Sale and Freddie Mac Q Series Securitization | US Treasury Securities. | ||||||||
Loans and Allowance for Credit Losses on Loans | ||||||||
Purchases of available for sale securities | $ 27,000,000 | |||||||
Multi-family and healthcare financing | Loan Sale and Freddie Mac Q Series Securitization | ||||||||
Loans and Allowance for Credit Losses on Loans | ||||||||
Amount of portfolio of loans sold in a securitization transaction | $ 303,600,000 | |||||||
Multi-family financing | Loan Sale and Freddie Mac Q Series Securitization | ||||||||
Loans and Allowance for Credit Losses on Loans | ||||||||
Amount of portfolio of loans sold in a securitization transaction | $ 303,600,000 | $ 284,200,000 | $ 214,000,000 | |||||
Number of loans securitized | loan | 11 | 16 | ||||||
Loss on sale of loans | $ 60,000 | |||||||
Mortgage servicing right established | $ 1,500,000 | |||||||
Multi-family financing | Loan Sale and Securitization | ||||||||
Loans and Allowance for Credit Losses on Loans | ||||||||
Amount of portfolio of loans sold in a securitization transaction | $ 1,200,000,000 | |||||||
Percentage of first loss position | 13.40% | |||||||
Proceeds and accrued interest on loans, net of the acquired securities | $ 150,600,000 | |||||||
Allowance for credit losses associated with loans sold released through the provision for credit losses | 4,000,000 | |||||||
Pricing loss | 5,400,000 | |||||||
Transaction expenses | 4,900,000 | |||||||
Capitalizing servicing rights | 6,700,000 | |||||||
Release of deferred fees on loans sold | 3,200,000 | |||||||
Gain on sale of loans | (525,000) | |||||||
Payments to held to maturity security | $ 1,000,000,000 | |||||||
Residential real estate | ||||||||
Loans and Allowance for Credit Losses on Loans | ||||||||
Number of loans in the process of foreclosure | loan | 0 | 0 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative Financial Instruments | |||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets and Receivables | Other Assets and Receivables | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. | Other Liabilities. | |
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||
Net swap gains (losses) | $ 12,204 | ||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Noninterest Income, Other | Noninterest Income, Other | Noninterest Income, Other |
Pledged in collateral | $ 0 | $ 0 | |
Derivative assets | |||
Derivative Financial Instruments | |||
Derivative assets, fair value | 35,207 | 3,104 | |
Derivative liabilities | |||
Derivative Financial Instruments | |||
Derivative liabilities, fair value | 395 | 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) | $ (89) | $ 5,191 | $ 48 |
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 | Gain (Loss) on Sales of Loans, Net |
Interest rate lock commitments | |||
Derivative Financial Instruments | |||
Notional amount | $ 16,526 | $ 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) | 130 | (218) | $ (5,908) |
Interest rate lock commitments | Derivative assets | |||
Derivative Financial Instruments | |||
Derivative assets, fair value | 140 | 28 | |
Interest rate lock commitments | Derivative liabilities | |||
Derivative Financial Instruments | |||
Derivative liabilities, fair value | 4 | 23 | |
Forward contracts | |||
Derivative Financial Instruments | |||
Notional amount | 25,500 | 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) | 201 | 5,277 | 5,956 |
Forward contracts | Derivative assets | |||
Derivative Financial Instruments | |||
Derivative assets, fair value | 4 | 46 | |
Forward contracts | Derivative liabilities | |||
Derivative Financial Instruments | |||
Derivative liabilities, fair value | 391 | 52 | |
Interest rate swaps | |||
Derivative Financial Instruments | |||
Notional amount | 57,540 | 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) | (420) | 132 | |
Interest rate swaps | Derivative assets | |||
Derivative Financial Instruments | |||
Derivative assets, fair value | 2,610 | 3,030 | |
Interest rate swaps (back-to-back) | |||
Derivative Financial Instruments | |||
Notional amount | 607,169 | 77,495 | |
Derivative assets, fair value | 12,426 | 3,041 | |
Derivative liabilities, fair value | 12,426 | 3,041 | |
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||
Gross swap gains | 9,385 | 1,910 | 2,039 |
Gross swap losses | 9,385 | $ 1,910 | $ 2,039 |
Put Option | |||
Derivative Financial Instruments | |||
Notional amount | 748,374 | ||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||
Net swap gains (losses) | 5,629 | ||
Put Option | Derivative assets | |||
Derivative Financial Instruments | |||
Derivative assets, fair value | 25,877 | ||
Interest Rate Floor | |||
Derivative Financial Instruments | |||
Notional amount | 748,374 | ||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||
Net swap gains (losses) | 6,575 | ||
Interest Rate Floor | Derivative assets | |||
Derivative Financial Instruments | |||
Derivative assets, fair value | $ 6,576 |
Loan Servicing (Details)
Loan Servicing (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Loan Servicing | |||
Balance, beginning of period | $ 146,248 | $ 110,348 | $ 82,604 |
Paydowns | (7,621) | (10,985) | (16,691) |
Sold servicing | (438) | ||
Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model | 4,562 | 19,761 | 12,395 |
Balance, end of period | 158,457 | 146,248 | 110,348 |
Revenue from specified servicing fee | 29,300 | 21,400 | 20,700 |
Escrow funds | 1,300,000 | 777,700 | |
Customer servicing loan | 7,900,000 | 6,200,000 | |
Purchased servicing | |||
Loan Servicing | |||
Additions | 513 | 2,057 | |
Originated servicing | |||
Loan Servicing | |||
Additions | $ 14,755 | 27,124 | $ 30,421 |
Mortgage Loans | |||
Loan Servicing | |||
Sliding scale to deter prepayments (in years) | 10 years | ||
Unpaid principal balances of mortgage and other loans serviced for others | $ 15,300,000 | 13,100,000 | |
Unpaid principal balances of loans subserviced for others | 2,100,000 | 1,900,000 | |
Unpaid principal balances of loans others servicing | 721,100 | 663,100 | |
Multi-family financing | Mortgage Loans | |||
Loan Servicing | |||
Unpaid principal balances of mortgage loan | $ 26,000,000 | $ 21,900,000 |
Goodwill and Intangibles - Good
Goodwill and Intangibles - Goodwill (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2019 | |
Changes in goodwill: | |||||
Balance, beginning of period | $ 15,845,000 | $ 15,845,000 | $ 15,845,000 | ||
Goodwill acquired during the period | |||||
Post-acquisition adjustments | |||||
Impairment losses | |||||
Balance, end of period | 15,845,000 | 15,845,000 | 15,845,000 | ||
NattyMac, LLC | |||||
Goodwill | |||||
Transfer to intangible assets | $ 1,600,000 | $ 1,600,000 | |||
Changes in goodwill: | |||||
Post-acquisition adjustments | $ 271,000 | ||||
Multi-family Mortgage Banking | |||||
Changes in goodwill: | |||||
Balance, beginning of period | 3,791,000 | 3,791,000 | 3,791,000 | ||
Goodwill acquired during the period | |||||
Post-acquisition adjustments | |||||
Impairment losses | |||||
Balance, end of period | 3,791,000 | 3,791,000 | 3,791,000 | ||
Banking | |||||
Changes in goodwill: | |||||
Balance, beginning of period | 8,353,000 | 8,353,000 | 8,353,000 | ||
Goodwill acquired during the period | |||||
Post-acquisition adjustments | |||||
Impairment losses | |||||
Balance, end of period | 8,353,000 | 8,353,000 | 8,353,000 | ||
Mortgage Warehousing | |||||
Changes in goodwill: | |||||
Balance, beginning of period | 3,701,000 | 3,701,000 | 3,701,000 | ||
Goodwill acquired during the period | |||||
Post-acquisition adjustments | |||||
Impairment losses | |||||
Balance, end of period | $ 3,701,000 | $ 3,701,000 | $ 3,701,000 | ||
Mortgage Warehousing | NattyMac, LLC | |||||
Changes in goodwill: | |||||
Goodwill acquired during the period | $ 3,700,000 |
Goodwill and Intangibles - Acqu
Goodwill and Intangibles - Acquisitions, Goodwill (Details) - USD ($) | 12 Months Ended | ||||||||
Dec. 31, 2018 | Oct. 01, 2018 | Jan. 02, 2018 | Aug. 15, 2017 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill | |||||||||
Goodwill acquired during the period | |||||||||
Post-acquisition adjustments | |||||||||
Multi-family Mortgage Banking | |||||||||
Goodwill | |||||||||
Goodwill acquired during the period | |||||||||
Post-acquisition adjustments | |||||||||
Banking | |||||||||
Goodwill | |||||||||
Goodwill acquired during the period | |||||||||
Post-acquisition adjustments | |||||||||
Mortgage Warehousing | |||||||||
Goodwill | |||||||||
Goodwill acquired during the period | |||||||||
Post-acquisition adjustments | |||||||||
NattyMac, LLC | |||||||||
Goodwill | |||||||||
Post-acquisition adjustments | $ 271,000 | ||||||||
Transfer to intangible assets | $ 1,600,000 | $ 1,600,000 | |||||||
NattyMac, LLC | Mortgage Warehousing | |||||||||
Goodwill | |||||||||
Goodwill acquired during the period | $ 3,700,000 | ||||||||
FMNBP | Banking | |||||||||
Goodwill | |||||||||
Goodwill acquired during the period | $ 6,900,000 | ||||||||
Post-acquisition adjustments | $ 333,000 | ||||||||
FMBI | Banking | |||||||||
Goodwill | |||||||||
Goodwill acquired during the period | $ 988,000 | ||||||||
MCS | Multi-family Mortgage Banking | |||||||||
Goodwill | |||||||||
Goodwill acquired during the period | $ 3,800,000 | ||||||||
Post-acquisition adjustments | $ 412,000 |
Goodwill and Intangibles - Inta
Goodwill and Intangibles - Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Summary | |||
Gross Carrying Amount | $ 4,011,000 | $ 4,011,000 | $ 4,011,000 |
Accumulated Amortization | (3,269,000) | (2,825,000) | (2,304,000) |
Total | $ 742,000 | 1,186,000 | 1,707,000 |
Licenses | |||
Intangible assets | |||
Amortization period | 84 months | ||
Summary | |||
Gross Carrying Amount | $ 1,370,000 | 1,370,000 | 1,370,000 |
Accumulated Amortization | (1,247,000) | (1,052,000) | (856,000) |
Total | $ 123,000 | 318,000 | 514,000 |
Trade names | |||
Intangible assets | |||
Amortization period | 120 months | ||
Summary | |||
Gross Carrying Amount | $ 224,000 | 224,000 | 224,000 |
Accumulated Amortization | (143,000) | (120,000) | (98,000) |
Total | $ 81,000 | 104,000 | 126,000 |
Customer list | |||
Intangible assets | |||
Amortization period | 21 months | ||
Core deposit intangible | |||
Intangible assets | |||
Amortization period | 10 years | ||
Summary | |||
Gross Carrying Amount | $ 2,417,000 | 2,417,000 | 2,417,000 |
Accumulated Amortization | (1,879,000) | (1,653,000) | (1,350,000) |
Total | $ 538,000 | 764,000 | 1,067,000 |
NattyMac, LLC | Customer list | |||
Intangible assets | |||
Amortization period | 21 months | ||
Summary | |||
Total | $ 1,600,000 | 1,600,000 | 1,600,000 |
FMNBP | Core deposit intangible | |||
Intangible assets | |||
Amortization period | 10 years | ||
Amortization of intangible assets | $ 188,000 | 250,000 | 294,000 |
FMBI | Core deposit intangible | |||
Intangible assets | |||
Amortization period | 10 years | ||
Amortization of intangible assets | $ 38,000 | 53,000 | 64,000 |
MCS | |||
Intangible assets | |||
Amortization of intangible assets | $ 218,000 | $ 218,000 | $ 218,000 |
Goodwill and Intangibles - Esti
Goodwill and Intangibles - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Estimated amortization expense | |||
2024 | $ 683 | ||
2025 | 23 | ||
2026 | 22 | ||
2027 | 14 | ||
Total | $ 742 | $ 1,186 | $ 1,707 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 15, 2023 | Dec. 31, 2022 |
Premises and Equipment | |||
Total cost | $ 53,552 | $ 44,167 | |
Accumulated depreciation | (11,210) | (8,729) | |
Net premises and equipment | 42,342 | 35,438 | |
Land | |||
Premises and Equipment | |||
Total cost | 8,099 | 3,696 | |
Buildings | |||
Premises and Equipment | |||
Total cost | 29,291 | 29,661 | |
Building and remodeling in progress | |||
Premises and Equipment | |||
Total cost | 2,489 | ||
Leasehold improvements | |||
Premises and Equipment | |||
Total cost | 352 | 310 | |
Furniture, fixtures, equipment and software | |||
Premises and Equipment | |||
Total cost | $ 13,321 | $ 10,500 | |
New office building | |||
Premises and Equipment | |||
Total cost | $ 27,600 |
Leases - Other (Details)
Leases - Other (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases | ||
Operating lease right-of-use assets | $ 10,060 | $ 10,969 |
Operating lease liabilities | $ 11,251 | $ 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 | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases. | ||
Operating lease right-of-of use asset (in other assets) | $ 10,060 | $ 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) | $ 11,251 | $ 11,992 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. | Other Liabilities. |
Weighted average remaining lease term (years) | 6 years | 6 years 6 months |
Weighted average discount rate | 2.89% | 2.65% |
Maturities of lease liabilities: | ||
One year or less | $ 2,441 | $ 2,181 |
Year two | 2,064 | 2,321 |
Year three | 2,100 | 1,881 |
Year four | 2,046 | 1,911 |
Year five | 1,438 | 1,853 |
Thereafter | 2,128 | 2,902 |
Total future minimum lease payments | 12,217 | 13,049 |
Less: imputed interest | 966 | 1,057 |
Total | 11,251 | 11,992 |
Components of lease expense: | ||
Operating lease cost (in occupancy and equipment expense) | 2,438 | 2,033 |
Operating cash flows from operating leases | $ 2,129 | $ 1,461 |
Other Assets and Receivables (D
Other Assets and Receivables (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Investment in Qualified Affordable Housing Limited Partnerships | |||
Investments for qualified affordable housing limited partnerships | $ 131.4 | $ 73 | |
Additional contribution on qualified affordable housing limited partnerships | 61.4 | 36.8 | |
Amortization expense | 7.9 | 2.1 | $ 2 |
Tax credit | 8.4 | 2.1 | $ 2 |
Joint Ventures | |||
Investments in debt funds | 33.2 | 29.8 | |
Joint venture investments | 11 | ||
Additional investment in joint ventures | 4 | 3.5 | |
Corporate Joint Venture | |||
Joint Ventures | |||
Investment in joint ventures | $ 52.2 | $ 37.5 |
Variable Interest Entities (V_3
Variable Interest Entities (VIEs) (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Variable Interest Entities (VIEs) | |||
Bridge loans to unrelated parties | $ 141,000 | ||
Total Assets | 16,952,516 | $ 12,615,227 | $ 11,278,638 |
Total Liabilities | 15,251,432 | 11,155,488 | |
Variable Interest Entity, Not Primary Beneficiary | |||
Variable Interest Entities (VIEs) | |||
Total Assets | 151,962 | 52,125 | |
Total Liabilities | 37,851 | 25,564 | |
Maximum Exposure to Loss | 151,962 | 52,125 | |
PRMI | |||
Variable Interest Entities (VIEs) | |||
Maximum Exposure to Loss | 472,500 | ||
REMIC trust | |||
Variable Interest Entities (VIEs) | |||
Maximum Exposure to Loss | 719,700 | 871,800 | |
Low-income housing credit investments | Variable Interest Entity, Not Primary Beneficiary | |||
Variable Interest Entities (VIEs) | |||
Total Assets | 118,741 | 22,310 | |
Total Liabilities | 35,099 | 22,043 | |
Maximum Exposure to Loss | 118,741 | 22,310 | |
Debt funds | Variable Interest Entity, Not Primary Beneficiary | |||
Variable Interest Entities (VIEs) | |||
Total Assets | 33,221 | 29,815 | |
Total Liabilities | 2,752 | 3,521 | |
Maximum Exposure to Loss | $ 33,221 | $ 29,815 |
Deposits - Components (Details)
Deposits - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Noninterest-bearing deposits | ||
Total noninterest-bearing deposits | $ 520,070 | $ 326,875 |
Interest-bearing deposits | ||
Demand deposits | 5,381,067 | 3,720,363 |
Savings deposits | 2,992,921 | 3,034,818 |
Certificates of deposit | 5,167,402 | 2,989,289 |
Total interest-bearing deposits | 13,541,390 | 9,744,470 |
Total deposits | $ 14,061,460 | $ 10,071,345 |
Deposits - Maturities of deposi
Deposits - Maturities of deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deposits | ||
Due within one year | $ 5,022,745 | |
Due in one year to two years | 143,286 | |
Due in two years to three years | 942 | |
Due in three years to four years | 429 | |
Total time deposits | 5,167,402 | $ 2,989,289 |
Certificates of deposit of 250,000 or more | $ 411,200 | $ 186,400 |
Deposits - Brokered deposits (D
Deposits - Brokered deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deposits | ||
Brokered certificates of deposit | $ 4,465,825 | $ 2,681,198 |
Brokered savings deposits | 589 | 81,532 |
Brokered deposit on demand accounts | 1,504,230 | 13 |
Total brokered deposits | $ 5,970,644 | $ 2,762,743 |
Borrowings - Components (Detail
Borrowings - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Borrowings | ||
Other borrowings | $ 7,934 | |
Borrowings | 964,127 | $ 930,392 |
Federal Reserve discount window borrowings | ||
Borrowings | ||
Borrowings | 20,000 | |
Short-term subordinated debt | ||
Borrowings | ||
Borrowings | 64,922 | 21,000 |
FHLB advances | ||
Borrowings | ||
Borrowings | 771,392 | 859,392 |
American Financial Exchange borrowing | ||
Borrowings | ||
Borrowings | 30,000 | |
Credit linked notes | ||
Borrowings | ||
Borrowings | 119,879 | |
Other Borrowings | ||
Borrowings | ||
Borrowings | $ 7,934 | $ 0 |
Borrowings - Other (Details)
Borrowings - Other (Details) $ in Thousands | 12 Months Ended | ||||
Mar. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) period D | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jul. 20, 2023 USD ($) | |
Borrowings | |||||
Amount outstanding | $ 964,127 | $ 930,392 | |||
Proceeds from borrowings | $ 95,570,319 | 65,777,538 | $ 31,471,236 | ||
Federal Reserve discount window borrowings | |||||
Borrowings | |||||
Maturity period, minimum (in hours) | period | 24 | ||||
Maturity period, maximum (in days) | D | 90 | ||||
Outstanding balance | $ 0 | 20,000 | |||
Amount outstanding | 20,000 | ||||
Short-Term Subordinated Debt | |||||
Borrowings | |||||
Amount outstanding | 64,922 | 21,000 | |||
Short-Term Subordinated Debt | Customer | |||||
Borrowings | |||||
Maximum investment by counterparty in Company's subordinated debt | 60,000 | ||||
Amount outstanding | $ 39,000 | 21,000 | |||
Additional interest as a percentage of earnings | 50% | ||||
Agreement renewal term | 2 years | ||||
Notice period of Non-renewal | 180 days | ||||
Short-Term Subordinated Debt | Customer | SOFR | |||||
Borrowings | |||||
Basis spread on variable rate (as a percent) | 3% | ||||
Additional Warehousing Financing Agreement, Subordinated Debt | Customer | |||||
Borrowings | |||||
Maximum investment by counterparty in Company's subordinated debt | $ 30,000 | ||||
Amount outstanding | $ 25,900 | 0 | |||
Additional interest as a percentage of earnings | 50% | ||||
Agreement renewal term | 2 years | ||||
Notice period of Non-renewal | 180 days | ||||
Additional Warehousing Financing Agreement, Subordinated Debt | Customer | SOFR | |||||
Borrowings | |||||
Basis spread on variable rate (as a percent) | 3% | ||||
FHLB Advances | |||||
Borrowings | |||||
Outstanding balance | $ 771,400 | 859,400 | |||
Amount outstanding | 771,392 | 859,392 | |||
Mortgage loans pledged as collateral | 3,400,000 | 2,800,000 | |||
Available for sale securities and securities purchased under agreements to resell pledged as collateral | $ 971,300 | $ 298,600 | |||
FHLB Advances | Minimum | |||||
Borrowings | |||||
FHLB advances interest rate | 2.18% | 1.62% | |||
FHLB Advances | Maximum | |||||
Borrowings | |||||
FHLB advances interest rate | 5.52% | 4.90% | |||
Credit linked notes | |||||
Borrowings | |||||
Amount outstanding | $ 119,879 | ||||
Notes issued | $ 158,100 | ||||
Proceeds from borrowings | 153,500 | ||||
Repayment of principal | $ 1,100,000 | ||||
Credit risk percentage | 1% | ||||
Effective interest rate (as a percent) | 20.90% | ||||
Credit linked notes | Restricted Cash | |||||
Borrowings | |||||
Debt instrument, collateral amount | $ 36,400 | ||||
Credit linked notes | Short term Treasury Securities | |||||
Borrowings | |||||
Debt instrument, collateral amount | $ 89,000 | ||||
Credit linked notes | SOFR | |||||
Borrowings | |||||
Basis spread on variable rate (as a percent) | 15.50% | ||||
Other Borrowings | |||||
Borrowings | |||||
Fixed rate (as a percent) | 1% | ||||
Amount outstanding | $ 7,934 | $ 0 | |||
Commercial, agricultural and construction loans | Federal Reserve discount window borrowings | |||||
Borrowings | |||||
Amount of borrowings secured | 3,100,000 | 2,400,000 | |||
American Financial Exchange, Extensions of Credit | |||||
Borrowings | |||||
Maximum borrowing capacity | 390,000 | 500,000 | |||
Outstanding balance | $ 0 | $ 30,000 | |||
Fixed rate (as a percent) | 4.60% |
Borrowings - Maturities of Borr
Borrowings - Maturities of Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Borrowings | ||
Excess borrowing capacity | $ 6,000,000 | |
Maturities of borrowings | ||
Due within one year | 754,284 | |
Due in one year to two years | 80,681 | |
Due in two years to three years | 260 | |
Due in three years to four years | 150 | |
Due in four years to five years | 119,938 | |
Thereafter | 8,814 | |
Total | 964,127 | $ 930,392 |
Federal Reserve discount window borrowings | ||
Borrowings | ||
Excess borrowing capacity | 6,000,000 | |
Maturities of borrowings | ||
Total | 20,000 | |
Short-Term Subordinated Debt | ||
Maturities of borrowings | ||
Due in one year to two years | 64,922 | |
Total | 64,922 | 21,000 |
FHLB Advances | ||
Maturities of borrowings | ||
Due within one year | 754,284 | |
Due in one year to two years | 15,759 | |
Due in two years to three years | 260 | |
Due in three years to four years | 150 | |
Due in four years to five years | 59 | |
Thereafter | 880 | |
Total | 771,392 | 859,392 |
Credit Linked Notes | ||
Maturities of borrowings | ||
Due in four years to five years | 119,879 | |
Total | 119,879 | |
Other Borrowings | ||
Maturities of borrowings | ||
Thereafter | 7,934 | |
Total | $ 7,934 | $ 0 |
Income Taxes - Components (Deta
Income Taxes - Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current tax payable | |||||||||||
Federal | $ 72,537 | $ 51,306 | $ 55,936 | ||||||||
State | (1,422) | 15,384 | 16,580 | ||||||||
Deferred tax payable | |||||||||||
Federal | (503) | 4,237 | 4,055 | ||||||||
State | (1,939) | 494 | 1,255 | ||||||||
Actual tax expense | $ 21,980 | $ 25,056 | $ 3,274 | $ 18,363 | $ 17,720 | $ 18,907 | $ 18,098 | $ 16,696 | $ 68,673 | $ 71,421 | $ 77,826 |
Effective tax rate | 19.70% | 24.50% | 25.50% |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | |||||||||||
Statutory tax rate (as a percent) | 21% | 21% | 21% | ||||||||
Computed at the statutory rate -21% | $ 73,061 | $ 61,140 | $ 64,035 | ||||||||
Increase resulting from | |||||||||||
State income taxes | (2,655) | 12,544 | 14,090 | ||||||||
Tax credits net of related amortization | (467) | 57 | 8 | ||||||||
Other | (1,266) | (2,320) | (307) | ||||||||
Actual tax expense | $ 21,980 | $ 25,056 | $ 3,274 | $ 18,363 | $ 17,720 | $ 18,907 | $ 18,098 | $ 16,696 | $ 68,673 | $ 71,421 | $ 77,826 |
Income Taxes - Temporary Differ
Income Taxes - Temporary Differences (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets | ||
Allowance for credit losses on loans | $ 20,572 | $ 13,983 |
Unrealized loss on securities available for sale | 779 | 3,530 |
Fair value adjustments on acquisitions | 51 | |
Other | 4,727 | 3,945 |
Total assets | 26,078 | 21,509 |
Deferred tax liabilities | ||
Depreciation | (2,779) | (2,809) |
Intangible assets | (385) | (338) |
Servicing rights | (37,290) | (36,043) |
Limited partnership investments | (2,018) | (1,831) |
State tax receivable | (1,711) | |
Derivative assets | (1,573) | |
Other | (245) | (101) |
Total liabilities | (46,001) | (41,122) |
Net deferred tax liability | $ (19,923) | $ (19,613) |
Regulatory Matters (Details)
Regulatory Matters (Details) $ in Thousands | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Tier 1 Capital (to average assets) | ||
Amount available without prior regulatory approval for dividends | $ 601,400 | |
Company | ||
Total Capital (to risk-weighted assets) | ||
Total Capital (to risk-weighted assets), Actual, Amount | $ 1,772,195 | $ 1,507,968 |
Total Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.116 | 0.122 |
Total Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 1,598,260 | $ 992,883 |
Total Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.105 | 0.105 |
Tier I Capital (to risk-weighted assets) | ||
Tier I Capital, (to risk-weighted assets), Actual, Amount | $ 1,686,202 | $ 1,452,456 |
Tier I Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.111 | 0.117 |
Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 1,293,830 | $ 744,662 |
Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.085 | 0.085 |
Common Equity Tier I Capital (to risk-weighted assets) | ||
Common Equity Tier I Capital (to risk weighted assets), Actual, Amount | $ 1,186,594 | $ 952,848 |
Common Equity Tier I Capital (to risk weighted assets), Ratio (as a percent) | 0.078 | 0.077 |
Common Equity Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 1,065,507 | $ 558,497 |
Common Equity Tier I Capital (to risk weighted assets, Minimum Amount Required to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.070 | 0.070 |
Tier 1 Capital (to average assets) | ||
Tier 1 Capital (to average assets), Actual, Amount | $ 1,686,202 | $ 1,452,456 |
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) | 0.101 | 0.117 |
Tier 1 Capital (to average assets), Minimum Amount Required to be Well Capitalized with Basel III Buffer, Amount | $ 832,706 | $ 497,604 |
Tier 1 Capital (to average assets), Minimum Amount Required to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.050 | 0.050 |
Merchants Bank | ||
Total Capital (to risk-weighted assets) | ||
Total Capital (to risk-weighted assets), Actual, Amount | $ 1,724,505 | $ 1,427,738 |
Total Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.115 | 0.117 |
Total Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 1,577,434 | $ 975,853 |
Total Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.105 | 0.105 |
Total Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Amount | $ 1,502,318 | $ 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, Amount | $ 1,639,171 | $ 1,372,941 |
Tier I Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.109 | 0.113 |
Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 1,276,970 | $ 731,890 |
Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.085 | 0.085 |
Tier I Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Amount | $ 1,201,854 | $ 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 (to risk-weighted assets) | ||
Common Equity Tier I Capital (to risk weighted assets), Actual, Amount | $ 1,639,171 | $ 1,372,941 |
Common Equity Tier I Capital (to risk weighted assets), Ratio (as a percent) | 0.109 | 0.113 |
Common Equity Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 1,051,623 | $ 548,917 |
Common Equity Tier I Capital (to risk weighted assets, Minimum Amount Required to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.070 | 0.070 |
Common Equity Tier I Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Amount | $ 976,507 | $ 792,881 |
Common Equity Tier I Capital (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 (to average assets), Actual, Amount | $ 1,639,171 | $ 1,372,941 |
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) | 0.101 | 0.113 |
Tier 1 Capital (to average assets), Minimum Amount Required to be Well Capitalized with Basel III Buffer, Amount | $ 815,191 | $ 487,511 |
Tier 1 Capital (to average assets), Minimum Amount Required to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.050 | 0.050 |
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Amount | $ 815,191 | $ 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, Amount | $ 40,613 | $ 34,769 |
Total Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.211 | 0.113 |
Total Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 20,209 | $ 24,703 |
Total Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.105 | 0.105 |
Total Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Amount | $ 19,247 | $ 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, Amount | $ 39,953 | $ 34,054 |
Tier I Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.208 | 0.110 |
Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 16,360 | $ 18,527 |
Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.085 | 0.085 |
Tier I Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Amount | $ 15,398 | $ 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 (to risk-weighted assets) | ||
Common Equity Tier I Capital (to risk weighted assets), Actual, Amount | $ 39,953 | $ 34,054 |
Common Equity Tier I Capital (to risk weighted assets), Ratio (as a percent) | 0.208 | 0.110 |
Common Equity Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 13,473 | $ 13,895 |
Common Equity Tier I Capital (to risk weighted assets, Minimum Amount Required to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.070 | 0.070 |
Common Equity Tier I Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Amount | $ 12,511 | $ 20,071 |
Common Equity Tier I Capital (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 (to average assets), Actual, Amount | $ 39,953 | $ 34,054 |
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) | 0.115 | 0.107 |
Tier 1 Capital (to average assets), Minimum Amount Required to be Well Capitalized with Basel III Buffer, Amount | $ 17,391 | $ 12,702 |
Tier 1 Capital (to average assets), Minimum Amount Required to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.050 | 0.050 |
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Amount | $ 17,391 | $ 15,878 |
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.050 | 0.050 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net Income | |||||||||||
Net Income | $ 77,473 | $ 81,504 | $ 65,302 | $ 54,955 | $ 57,156 | $ 58,488 | $ 53,935 | $ 50,142 | $ 279,234 | $ 219,721 | $ 227,104 |
Dividends on preferred stock | (8,667) | (8,668) | (8,668) | (8,667) | (8,797) | (5,729) | (5,729) | (5,728) | (34,670) | (25,983) | (20,873) |
Net Income Allocated to Common Shareholders | $ 68,806 | $ 72,836 | $ 56,634 | $ 46,288 | $ 48,359 | $ 52,759 | $ 48,206 | $ 44,414 | $ 244,564 | $ 193,738 | $ 206,231 |
Weighted-Average Shares | |||||||||||
Weighted average shares - Basic | 43,224,042 | 43,164,477 | 43,172,078 | ||||||||
Effect of dilutive securities-restricted stock awards | 121,757 | 152,427 | 153,225 | ||||||||
Weighted average shares - diluted | 43,345,799 | 43,316,904 | 43,325,303 | ||||||||
Per Share Amount | |||||||||||
Basic earnings per share | $ 1.59 | $ 1.68 | $ 1.31 | $ 1.07 | $ 1.12 | $ 1.22 | $ 1.12 | $ 1.03 | $ 5.66 | $ 4.49 | $ 4.78 |
Diluted earnings per share | $ 1.58 | $ 1.68 | $ 1.31 | $ 1.07 | $ 1.12 | $ 1.22 | $ 1.11 | $ 1.02 | $ 5.64 | $ 4.47 | $ 4.76 |
Common Stock (Details)
Common Stock (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Nov. 17, 2021 | |
Common Stock | |||
Dollar value of shares repurchased | $ 3,935,333 | ||
Shares repurchased(1) | 165,037 | ||
Average price paid per share | $ 23.85 | ||
Repurchase of common Stock (in shares) | 0 | ||
Repurchase program, Authorized Amount | $ 75,000,000 |
Preferred Stock (Details)
Preferred Stock (Details) | 12 Months Ended | |||||||||||
Sep. 30, 2022 USD ($) shares | Sep. 27, 2022 USD ($) $ / shares shares | May 06, 2021 USD ($) $ / shares shares | Apr. 15, 2021 USD ($) shares | Mar. 23, 2021 USD ($) $ / shares shares | Aug. 19, 2019 USD ($) $ / shares shares | Apr. 12, 2019 USD ($) shares | Mar. 28, 2019 USD ($) $ / shares shares | Dec. 31, 2023 $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) | Feb. 28, 2024 $ / shares | |
Public Offering of Preferred Stock | ||||||||||||
Net proceeds | $ 137,459,000 | $ 191,084,000 | ||||||||||
8% Preferred Stock | ||||||||||||
Public Offering of Preferred Stock | ||||||||||||
Redemption of 8% preferred stock (in shares) | shares | 41,625 | |||||||||||
Redemption of 8% preferred stock | $ 41,600,000 | |||||||||||
Preferred stock, dividend rate (as a percent) | 8% | 8% | ||||||||||
Final dividend for redemption of 8% preferred stock | $ 139,000 | |||||||||||
7% Series A Preferred Stock | ||||||||||||
Public Offering of Preferred Stock | ||||||||||||
Preferred stock, dividend rate (as a percent) | 7% | 7% | ||||||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 25 | $ 25 | $ 25 | |||||||||
7% Series A Preferred Stock | Public Offering | ||||||||||||
Public Offering of Preferred Stock | ||||||||||||
Shares issued (in shares) | shares | 81,800 | 2,000,000 | ||||||||||
Preferred stock, dividend rate (as a percent) | 7% | |||||||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 25 | |||||||||||
Aggregate gross offering proceeds for the shares issued | $ 50,000,000 | |||||||||||
Net proceeds | $ 2,000,000 | 48,300,000 | ||||||||||
Offering costs | $ 1,700,000 | |||||||||||
Underwriting discounts | $ 41,000 | |||||||||||
6% Series B Preferred Stock | ||||||||||||
Public Offering of Preferred Stock | ||||||||||||
Preferred stock, dividend rate (as a percent) | 6% | 6% | ||||||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | ||||||||||
6% Series B Preferred Stock | Public Offering | ||||||||||||
Public Offering of Preferred Stock | ||||||||||||
Depositary shares issued (in shares) | shares | 5,000,000 | |||||||||||
Depositary shares equivalent preferred stock interest per share | 0.025 | |||||||||||
Preferred stock, dividend rate (as a percent) | 6% | |||||||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 1,000 | |||||||||||
Depositary share, preferred stock liquidation preference (in dollars per share) | $ / shares | $ 25 | |||||||||||
Aggregate gross offering proceeds for the shares issued | $ 125,000,000 | |||||||||||
Net proceeds | 120,800,000 | |||||||||||
Underwriting discounts | $ 4,200,000 | |||||||||||
6% Series C Preferred Stock | ||||||||||||
Public Offering of Preferred Stock | ||||||||||||
Shares issued (in shares) | shares | 46,181 | |||||||||||
Depositary shares issued (in shares) | shares | 1,847,233 | |||||||||||
Depositary share price (in dollars per share) | $ / shares | $ 25 | |||||||||||
Preferred stock, dividend rate (as a percent) | 6% | 6% | ||||||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | ||||||||||
Net proceeds | $ 46,200,000 | |||||||||||
Offering costs | $ 23,000 | |||||||||||
6% Series C Preferred Stock | Public Offering | ||||||||||||
Public Offering of Preferred Stock | ||||||||||||
Depositary shares issued (in shares) | shares | 6,000,000 | |||||||||||
Depositary shares equivalent preferred stock interest per share | 0.025 | |||||||||||
Preferred stock, dividend rate (as a percent) | 6% | |||||||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 1,000 | |||||||||||
Depositary share, preferred stock liquidation preference (in dollars per share) | $ / shares | $ 25 | |||||||||||
Aggregate gross offering proceeds for the shares issued | $ 150,000,000 | |||||||||||
Net proceeds | 144,900,000 | |||||||||||
Underwriting discounts | $ 5,100,000 | |||||||||||
8.25% Series D Preferred Stock | ||||||||||||
Public Offering of Preferred Stock | ||||||||||||
Preferred stock, dividend rate (as a percent) | 8.25% | 8.25% | ||||||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | ||||||||||
8.25% Series D Preferred Stock | Public Offering | ||||||||||||
Public Offering of Preferred Stock | ||||||||||||
Shares issued (in shares) | shares | 5,200,000 | |||||||||||
Depositary shares equivalent preferred stock interest per share | 0.025 | |||||||||||
Preferred stock, dividend rate (as a percent) | 8.25% | |||||||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 1,000 | |||||||||||
Depositary share, preferred stock liquidation preference (in dollars per share) | $ / shares | $ 25 | |||||||||||
Aggregate gross offering proceeds for the shares issued | $ 130,000,000 | |||||||||||
Net proceeds | 125,400,000 | |||||||||||
Underwriting discounts | $ 4,600,000 | |||||||||||
Series D Preferred Stock | Public Offering | ||||||||||||
Public Offering of Preferred Stock | ||||||||||||
Shares issued (in shares) | shares | 500,000 | |||||||||||
Net proceeds | $ 12,100,000 | |||||||||||
Underwriting discounts | $ 400,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Limited Liability Company, Senior Housing and Healthcare Sectors | |||
Related Party Transactions | |||
Equity method investee, ownership percentage | 30% | ||
Board of Directors | |||
Related Party Transactions | |||
Legal fees | $ 9,400,000 | $ 9,400,000 | $ 6,600,000 |
Speaking engagement - fee | 30,000 | ||
Low Income Housing Tax Credit Syndication Business | |||
Related Party Transactions | |||
Gain (loss) on sales | 0 | $ 0 | $ 0 |
Board Member And Executive | |||
Related Party Transactions | |||
Payment for charter flights | $ 62,000 |
Related Party Transactions - In
Related Party Transactions - Investments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Servicing income | $ 26,198,000 | $ 30,198,000 | $ 16,373,000 |
Carrying value, at year-end, of held-to-maturity securities purchased from debt funds | 293,268,000 | 1,252,793,000 | |
Limited Liability Company, Senior Housing and Healthcare Sectors | Equity Method Investment, Nonconsolidated Investee, Other [Member] | |||
Related Party Transaction [Line Items] | |||
Origination fees received from borrowers referred by the LLC | 12,669,000 | 24,830,000 | 17,848,000 |
Fees paid to LLC for loans referred and originated | (9,866,000) | (17,145,000) | (14,512,000) |
Servicing income | 561,000 | 417,000 | 69,000 |
Servicing income participation paid to LLC | (281,000) | (209,000) | (34,000) |
Income from investment in LLC | 1,612,000 | 4,129,000 | 1,369,000 |
Distributions received from LLC and debt funds | 993,000 | 3,795,000 | 405,000 |
Interest income paid to LLC for loans originated and referred by the LLC | (3,587,000) | (6,725,000) | (4,522,000) |
Low Income Housing Tax Credit Syndication Business | |||
Related Party Transaction [Line Items] | |||
Gains (losses) recognized on loans sold to debt funds | 0 | 0 | 0 |
Low Income Housing Tax Credit Syndication Business | Capital Investment | |||
Related Party Transaction [Line Items] | |||
Interest income, financing (1) and other fees received from syndicated funds | 16,592,000 | 11,012,000 | 8,030,000 |
Loans outstanding, net of participations sold, to syndicated and debt funds | 127,449,000 | 49,004,000 | 18,586,000 |
Single Family and Multi-Family Debt Financing Investments | Capital Investment | |||
Related Party Transaction [Line Items] | |||
Distributions received from LLC and debt funds | 890,000 | 512,000 | |
Loans outstanding, net of participations sold, to syndicated and debt funds | 108,055,000 | 35,732,000 | 20,700,000 |
Income from investments, servicing, interest income, and management of debt funds | 29,992,000 | 4,642,000 | 1,139,000 |
Loans sold to debt funds | 102,336,000 | 884,247,000 | $ 273,914,000 |
Gains (losses) recognized on loans sold to debt funds | (263,000) | ||
Carrying value, at year-end, of held-to-maturity securities purchased from debt funds | $ 472,539,000 | $ 248,366,000 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee benefits | |||
Matching contribution equals to employees deferrals | 100% | ||
Matching contribution as a percentage of employees compensation | 3% | ||
Employer contributions to contribution plans | $ 1,900,000 | $ 1,600,000 | $ 1,400,000 |
Expense recognized for the contribution to ESOP | $ 1,000,000 | $ 860,000 | $ 595,000 |
Number of shares contributed to ESOP | 33,293 | 20,709 | 29,149 |
Maximum | |||
Employee benefits | |||
Matching contribution as a percentage of employees compensation | 3% |
Share-Based Payment Plans - Inc
Share-Based Payment Plans - Incentive Plan (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | |
Executive officers | |||||
Plan disclosures | |||||
Shares issued | 84,335 | 64,962 | 23,435 | ||
Expenses recognized | $ 2,671,000 | $ 1,870,000 | $ 1,198,000 | ||
Unvested shares awarded | 256,192 | 280,974 | 374,598 | ||
Unrecognized compensation costs | $ 6,801,000 | $ 5,817,000 | $ 4,499,000 | ||
Non executive directors | |||||
Plan disclosures | |||||
Value of shares available for issuance for compensation related to annual fees | $ 50,000 | $ 10,000 | |||
Shares issued | 12,173 | 12,443 | 6,870 | ||
Expenses recognized | $ 351,000 | $ 325,000 | $ 188,000 |
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 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosures about Fair Value of Assets and Liabilities | ||||
Mortgage loans in process of securitization | $ 110,599 | $ 154,194 | ||
Securities available for sale | 1,113,687 | 323,337 | ||
Loans held for sale | 86,663 | 82,192 | ||
Servicing rights | 158,457 | 146,248 | $ 110,348 | $ 82,604 |
Interest rate swaps (back-to-back) | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 12,426 | 3,041 | ||
Derivative liabilities | 12,426 | 3,041 | ||
Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Mortgage loans in process of securitization | 110,599 | 154,194 | ||
Loans held for sale | 86,663 | 82,192 | ||
Servicing rights | 158,457 | 146,248 | ||
Recurring | Interest rate lock commitments | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 140 | 28 | ||
Derivative liabilities | 4 | 23 | ||
Recurring | Forward contracts | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 4 | 46 | ||
Derivative liabilities | 391 | 52 | ||
Recurring | Interest rate swaps | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 2,610 | 3,030 | ||
Derivative liabilities | 12,426 | 3,041 | ||
Recurring | Interest rate swaps (back-to-back) | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 12,426 | 3,041 | ||
Recurring | Put Option | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 25,877 | |||
Recurring | Interest Rate Floor | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 6,576 | |||
Level 2 | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Mortgage loans in process of securitization | 110,599 | 154,194 | ||
Loans held for sale | 86,663 | 82,192 | ||
Level 2 | Recurring | Forward contracts | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 4 | 46 | ||
Derivative liabilities | 391 | 52 | ||
Level 2 | Recurring | Interest rate swaps | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 2,610 | 3,030 | ||
Derivative liabilities | 12,426 | 3,041 | ||
Level 2 | Recurring | Interest rate swaps (back-to-back) | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 12,426 | 3,041 | ||
Level 2 | Recurring | Put Option | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 7,223 | |||
Level 3 | Interest rate lock commitments | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 140 | 28 | ||
Derivative liabilities | 4 | 23 | ||
Level 3 | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Servicing rights | 158,457 | 146,248 | ||
Level 3 | Recurring | Interest rate lock commitments | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 140 | 28 | ||
Derivative liabilities | 4 | 23 | ||
Level 3 | Recurring | Put Option | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 18,654 | |||
Level 3 | Recurring | Interest Rate Floor | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Derivative assets | 6,576 | |||
Treasury notes | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 128,968 | 36,280 | ||
Treasury notes | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 128,968 | 36,280 | ||
Treasury notes | Level 1 | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 128,968 | 36,280 | ||
Federal agencies | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 247,755 | 271,890 | ||
Federal agencies | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 247,755 | 271,890 | ||
Federal agencies | Level 2 | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 247,755 | 271,890 | ||
Mortgage-backed - Agency | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 15,167 | |||
Mortgage-backed - Agency | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 15,167 | |||
Mortgage-backed - Agency | Level 2 | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | $ 15,167 | |||
Mortgage-backed - Government Agency ("Agency") | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 14,467 | |||
Mortgage-backed - Government Agency ("Agency") | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 14,467 | |||
Mortgage-backed - Government Agency ("Agency") | Level 2 | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 14,467 | |||
Mortgage-backed - Non-GSE | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 485,500 | |||
Mortgage-backed - Non-GSE | Level 3 | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 485,500 | |||
Mortgage-backed - Agency - fair value option | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 236,997 | |||
Mortgage-backed - Agency - fair value option | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | 236,997 | |||
Mortgage-backed - Agency - fair value option | Level 2 | Recurring | ||||
Disclosures about Fair Value of Assets and Liabilities | ||||
Securities available for sale | $ 236,997 |
Disclosures about Fair Value _4
Disclosures about Fair Value of Assets and Liabilities - Reconciliation of Unobservable Inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Put Option | |||
Additions | |||
Purchases | $ 20,248 | ||
Subtractions | |||
Changes in fair value | $ (1,594) | ||
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Still Held, Unrealized Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Noninterest Expense, Noninterest Income. | ||
Balance, end of period | $ 18,654 | ||
Interest Rate Floor | |||
Additions | |||
Purchases | 6,576 | ||
Subtractions | |||
Balance, end of period | 6,576 | ||
Derivative Liabilities - interest rate lock commitments | Interest rate lock commitments | |||
Reconciliation of significant unobservable inputs, liabilities: | |||
Balance, beginning of period | 23 | $ 41 | |
Change in fair value | $ (19) | $ (18) | $ 41 |
Fair Value, Liability, Recurring Basis, Still Held, Unrealized Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Noninterest Expense, Noninterest Income. | Noninterest Expense, Noninterest Income. | Noninterest Expense, Noninterest Income. |
Balance, end of period | $ 4 | $ 23 | $ 41 |
Available for sale securities | |||
Reconciliation of significant unobservable inputs, assets: | |||
Purchased securities | 483,906 | ||
Subtractions | |||
Changes in fair value | 1,594 | ||
Balance, end of period | 485,500 | ||
Derivative Assets - interest rate lock commitments | Interest rate lock commitments | |||
Reconciliation of significant unobservable inputs, assets: | |||
Balance, beginning of period | 28 | 264 | 6,131 |
Subtractions | |||
Changes in fair value | $ 112 | $ (236) | $ (5,867) |
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Still Held, Unrealized Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Noninterest Expense, Noninterest Income. | Noninterest Expense, Noninterest Income. | Noninterest Expense, Noninterest Income. |
Balance, end of period | $ 140 | $ 28 | $ 264 |
Servicing rights | |||
Reconciliation of significant unobservable inputs, assets: | |||
Balance, beginning of period | 146,248 | 110,348 | 82,604 |
Additions | |||
Purchased servicing | 513 | 2,057 | |
Originated servicing | 14,755 | 27,124 | 30,421 |
Subtractions | |||
Paydowns | (7,621) | (10,985) | (16,691) |
Sales of servicing | (438) | ||
Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model | 4,562 | 19,761 | 12,395 |
Balance, end of period | $ 158,457 | $ 146,248 | $ 110,348 |
Disclosures about Fair Value _5
Disclosures about Fair Value of Assets and Liabilities - Assets and Liabilities Measured at Fair Value on Nonrecurring Basis (Details) - Nonrecurring - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Disclosures about Fair Value of Assets and Liabilities | ||
Impaired loans (collateral-dependent) | $ 47,026 | $ 4,465 |
Level 3 | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Impaired loans (collateral-dependent) | $ 47,026 | $ 4,465 |
Disclosures about Fair Value _6
Disclosures about Fair Value of Assets and Liabilities - Quantitative Information about Unobservable Inputs (Details) $ in Thousands | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) |
Quantitative information about unobservable inputs | ||||
Servicing rights | $ 158,457 | $ 146,248 | $ 110,348 | $ 82,604 |
Collateral-dependent impaired loans | Minimum | ||||
Quantitative information about unobservable inputs | ||||
Marketability discount (as a percent) | 0.04 | |||
Collateral-dependent impaired loans | Maximum | ||||
Quantitative information about unobservable inputs | ||||
Marketability discount (as a percent) | 0.54 | |||
Level 3 | SBA | Constant Prepayment Rate | Minimum | ||||
Quantitative information about unobservable inputs | ||||
Servicing asset, measurement input | 0.03 | |||
Level 3 | SBA | Constant Prepayment Rate | Maximum | ||||
Quantitative information about unobservable inputs | ||||
Servicing asset, measurement input | 0.12 | |||
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | ||||
Quantitative information about unobservable inputs | ||||
Servicing rights | $ 5,280 | $ 4,632 | ||
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | Discount Rate | ||||
Quantitative information about unobservable inputs | ||||
Servicing asset, measurement input | 0.16 | 0.16 | ||
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 | |||
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | Constant Prepayment Rate | Maximum | ||||
Quantitative information about unobservable inputs | ||||
Servicing asset, measurement input | 0.14 | |||
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | Constant Prepayment Rate | Weighted average | ||||
Quantitative information about unobservable inputs | ||||
Servicing asset, measurement input | 0.09 | 0.08 | ||
Level 3 | Servicing rights | Single Family | ||||
Quantitative information about unobservable inputs | ||||
Servicing rights | $ 30,959 | $ 29,926 | ||
Level 3 | Servicing rights | Single Family | Discount Rate | ||||
Quantitative information about unobservable inputs | ||||
Loan closing rates (as a percent) | 0.10 | |||
Level 3 | Servicing rights | Single Family | Discount Rate | Minimum | ||||
Quantitative information about unobservable inputs | ||||
Servicing asset, measurement input | 0.10 | |||
Loan closing rates (as a percent) | 0.09 | |||
Level 3 | Servicing rights | Single Family | Discount Rate | Maximum | ||||
Quantitative information about unobservable inputs | ||||
Servicing asset, measurement input | 0.11 | |||
Level 3 | Servicing rights | Single Family | Discount Rate | Weighted average | ||||
Quantitative information about unobservable inputs | ||||
Servicing asset, measurement input | 0.10 | 0.09 | ||
Level 3 | Servicing rights | Single Family | Constant Prepayment Rate | Minimum | ||||
Quantitative information about unobservable inputs | ||||
Servicing asset, measurement input | 0.06 | 0.07 | ||
Level 3 | Servicing rights | Single Family | Constant Prepayment Rate | Maximum | ||||
Quantitative information about unobservable inputs | ||||
Servicing asset, measurement input | 0.16 | 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 | $ 122,218 | $ 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 | 0.50 | 0.39 | ||
Level 3 | Servicing rights | Multi-family | Constant Prepayment Rate | Weighted average | ||||
Quantitative information about unobservable inputs | ||||
Servicing asset, measurement input | 0.07 | 0.08 | ||
Level 3 | Collateral-dependent impaired loans | ||||
Quantitative information about unobservable inputs | ||||
Collateral-dependent impaired loans | $ 47,026 | $ 4,465 | ||
Level 3 | Collateral-dependent impaired loans | Minimum | ||||
Quantitative information about unobservable inputs | ||||
Marketability discount (as a percent) | 0 | |||
Level 3 | Collateral-dependent impaired loans | Maximum | ||||
Quantitative information about unobservable inputs | ||||
Marketability discount (as a percent) | 1 | |||
Level 3 | Collateral-dependent impaired loans | Weighted average | ||||
Quantitative information about unobservable inputs | ||||
Marketability discount (as a percent) | 0.02 | 0.05 | ||
Level 3 | Available for sale securities | Measurement Input, Credit Spread | ||||
Quantitative information about unobservable inputs | ||||
Mortgage-backed - Non-agency residential- fair value option | $ 485,500 | |||
Mortgage-backed - Non-agency residential- fair value option (as a percent) | 2 | |||
Level 3 | Available for sale securities | Measurement Input, Credit Spread | Weighted average | ||||
Quantitative information about unobservable inputs | ||||
Mortgage-backed - Non-agency residential- fair value option (as a percent) | 2 | |||
Level 3 | Interest rate lock commitments | ||||
Quantitative information about unobservable inputs | ||||
Derivative assets | $ 140 | $ 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) | 0.45 | 0.60 | ||
Loan closing rates (as a percent) | 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) | 0.78 | 0.77 | ||
Loan closing rates (as a percent) | 0.78 | |||
Level 3 | Put Option | Measurement Input, Credit Spread | ||||
Quantitative information about unobservable inputs | ||||
Derivative assets | $ 18,654 | |||
Loan closing rates (as a percent) | 2 | |||
Level 3 | Put Option | Measurement Input, Credit Spread | Weighted average | ||||
Quantitative information about unobservable inputs | ||||
Loan closing rates (as a percent) | 2 | |||
Level 3 | Interest Rate Floor | Measurement Input, Credit Spread | ||||
Quantitative information about unobservable inputs | ||||
Derivative assets | $ 6,576 | |||
Level 3 | Interest Rate Floor | Measurement Input, Credit Spread | Minimum | ||||
Quantitative information about unobservable inputs | ||||
Loan closing rates (as a percent) | 6 | |||
Level 3 | Interest Rate Floor | Measurement Input, Credit Spread | Maximum | ||||
Quantitative information about unobservable inputs | ||||
Loan closing rates (as a percent) | 7 | |||
Level 3 | Interest Rate Floor | Measurement Input, Credit Spread | Weighted average | ||||
Quantitative information about unobservable inputs | ||||
Loan closing rates (as a percent) | 7 |
Disclosures about Fair Value _7
Disclosures about Fair Value of Assets and Liabilities - Carrying Value and Estimated Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Financial assets: | ||
Securities held to maturity | $ 1,203,535 | $ 1,118,966 |
Loans held for sale | 86,663 | 82,192 |
Carrying value per balance sheet | ||
Financial assets: | ||
Cash and cash equivalents | 584,422 | 226,164 |
Securities purchased under agreements to resell | 3,349 | |
Securities purchased under agreements to resell | 3,464 | |
Securities held to maturity | 1,204,217 | 1,119,078 |
FHLB stock | 48,578 | 39,130 |
Loans held for sale | 3,058,093 | 2,828,384 |
Loans receivable, net | 10,127,801 | 7,426,858 |
Interest receivable | 91,346 | 56,262 |
Financial liabilities: | ||
Deposits | 14,061,460 | 10,071,345 |
Short-term subordinated debt | 64,922 | 21,000 |
FHLB advances | 771,392 | 859,392 |
Other borrowing | 7,934 | 50,000 |
Credit linked notes | 119,879 | |
Interest payable | 43,423 | 23,384 |
Estimated fair value | ||
Financial assets: | ||
Cash and cash equivalents | 584,422 | 226,164 |
Securities purchased under agreements to resell | 3,349 | |
Securities purchased under agreements to resell | 3,464 | |
Securities held to maturity | 1,203,535 | 1,118,966 |
FHLB stock | 48,578 | 39,130 |
Loans held for sale | 3,058,093 | 2,828,384 |
Loans receivable, net | 10,088,468 | 7,431,731 |
Interest receivable | 91,346 | 56,262 |
Financial liabilities: | ||
Deposits | 14,062,457 | 10,064,941 |
Short-term subordinated debt | 64,922 | 21,000 |
FHLB advances | 771,029 | 858,984 |
Other borrowing | 7,934 | 50,000 |
Credit linked notes | 119,878 | |
Interest payable | 43,423 | 23,384 |
Level 1 | Estimated fair value | ||
Financial assets: | ||
Cash and cash equivalents | 584,422 | 226,164 |
Financial liabilities: | ||
Deposits | 8,894,058 | 7,082,056 |
Level 2 | Estimated fair value | ||
Financial assets: | ||
Securities purchased under agreements to resell | 3,349 | |
Securities purchased under agreements to resell | 3,464 | |
Securities held to maturity | 484,288 | 247,182 |
FHLB stock | 48,578 | 39,130 |
Loans held for sale | 3,058,093 | 2,828,384 |
Interest receivable | 91,346 | 56,262 |
Financial liabilities: | ||
Deposits | 5,168,399 | 2,982,885 |
Short-term subordinated debt | 64,922 | 21,000 |
FHLB advances | 771,029 | 858,984 |
Other borrowing | 7,934 | 50,000 |
Credit linked notes | 119,878 | |
Interest payable | 43,423 | 23,384 |
Level 3 | Estimated fair value | ||
Financial assets: | ||
Securities held to maturity | 719,247 | 871,784 |
Loans receivable, net | $ 10,088,468 | $ 7,431,731 |
Significant Estimates and Con_2
Significant Estimates and Concentrations - Liquidity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Significant Estimates and Concentrations | |||
Excess borrowing capacity | $ 6,000,000 | ||
Total borrowing capacity | $ 10,600,000 | ||
Liquid assets and unused borrowing capacity expressed as a percentage of total assets | 62% | ||
Total assets | $ 16,952,516 | $ 12,615,227 | $ 11,278,638 |
Percentage of loan portfolio reprices within 30 Days | 93% |
Significant Estimates and Con_3
Significant Estimates and Concentrations - Major Customer (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | Customer concentration | Major Customer | |||
Major Customer | |||
Concentration risk (as a percent) | 10% | 10% | 10% |
Commitments, Credit Risk, and_3
Commitments, Credit Risk, and Contingencies - Financial Instrument (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Total commitments subject to credit risk | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instrument whose contract amount represents credit risk | $ 3,958,573 | $ 3,549,091 |
Total commitments subject to certain performance criteria and cancellation | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instrument whose contract amount represents credit risk | 3,742,867 | 4,473,258 |
Commitments to extend credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instrument whose contract amount represents credit risk | 3,693,099 | 3,293,847 |
Standby letters of credit issued by Merchants | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instrument whose contract amount represents credit risk | 129,655 | 108,312 |
Unfunded warehouse repurchase agreements | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instrument whose contract amount represents credit risk | 135,819 | 146,932 |
Outstanding commitments to originate loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instrument whose contract amount represents credit risk | 692,582 | 1,042,497 |
Unfunded construction draws | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instrument whose contract amount represents credit risk | 266,369 | 247,504 |
Unfunded warehouse repurchase agreements and other lines of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instrument whose contract amount represents credit risk | $ 2,783,916 | $ 3,183,257 |
Commitments, Credit Risk, and_4
Commitments, Credit Risk, and Contingencies - Other (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | May 05, 2022 | Dec. 31, 2021 |
Commitments and Credit Risk | ||||
Reserve liability | $ 800,000 | $ 500,000 | ||
Outstanding line of credit | 0 | 0 | $ 0 | |
Additional contribution on qualified affordable housing limited partnerships | 61,400,000 | 36,800,000 | ||
Other liabilities | ||||
Commitments and Credit Risk | ||||
Additional contribution on qualified affordable housing limited partnerships | 61,400,000 | 36,800,000 | ||
Unfunded liability to invest in debt fund joint ventures | 4,000,000 | 5,200,000 | ||
Loan Sale and Freddie Mac Q Series Securitization | Other liabilities | ||||
Commitments and Credit Risk | ||||
Non-contingent reserve | 2,500,000 | 2,500,000 | $ 2,500,000 | |
Loan Sale and Freddie Mac Q Series Securitization | Indemnification agreement | Other liabilities | ||||
Commitments and Credit Risk | ||||
Financial guarantees | 1,200,000 | 1,200,000 | ||
Fannie Mae or Freddie Mac | Other liabilities | ||||
Commitments and Credit Risk | ||||
Potential obligation for repurchase of loans | $ 1,000,000 | $ 900,000 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Information | |||||||||||
Interest income | $ 311,759 | $ 296,676 | $ 258,069 | $ 211,294 | $ 181,439 | $ 134,112 | $ 89,270 | $ 76,012 | $ 1,077,798 | $ 480,833 | $ 311,886 |
Interest expense | 187,434 | 179,240 | 152,452 | 110,601 | 86,029 | 48,727 | 17,239 | 10,287 | 629,727 | 162,282 | 33,892 |
Net Interest Income | 124,325 | 117,436 | 105,617 | 100,693 | 95,410 | 85,385 | 72,031 | 65,725 | 448,071 | 318,551 | 277,994 |
Provision for credit losses | 6,747 | 4,014 | 22,603 | 6,867 | 6,407 | 2,225 | 6,212 | 2,451 | 40,231 | 17,295 | 5,012 |
Net Interest Income After Provision for Credit Losses | 117,578 | 113,422 | 83,014 | 93,826 | 89,003 | 83,160 | 65,819 | 63,274 | 407,840 | 301,256 | 272,982 |
Noninterest income | 34,454 | 36,068 | 29,882 | 14,264 | 22,982 | 29,186 | 39,171 | 34,597 | 114,668 | 125,936 | 157,333 |
Noninterest expense | 52,579 | 42,930 | 44,320 | 34,772 | 37,109 | 34,951 | 32,957 | 31,033 | 174,601 | 136,050 | 125,385 |
Income Before Income Taxes | 99,453 | 106,560 | 68,576 | 73,318 | 74,876 | 77,395 | 72,033 | 66,838 | 347,907 | 291,142 | 304,930 |
Income taxes | 21,980 | 25,056 | 3,274 | 18,363 | 17,720 | 18,907 | 18,098 | 16,696 | 68,673 | 71,421 | 77,826 |
Net Income | 77,473 | $ 81,504 | $ 65,302 | $ 54,955 | 57,156 | $ 58,488 | $ 53,935 | $ 50,142 | 279,234 | 219,721 | 227,104 |
Total assets | 16,952,516 | 12,615,227 | 16,952,516 | 12,615,227 | 11,278,638 | ||||||
Other | |||||||||||
Segment Information | |||||||||||
Interest income | 6,315 | 8,242 | 5,344 | ||||||||
Interest expense | (6,763) | (3,081) | (3,114) | ||||||||
Net Interest Income | 13,078 | 11,323 | 8,458 | ||||||||
Net Interest Income After Provision for Credit Losses | 13,078 | 11,323 | 8,458 | ||||||||
Noninterest income | (11,100) | (9,170) | (4,426) | ||||||||
Noninterest expense | 33,925 | 25,114 | 17,813 | ||||||||
Income Before Income Taxes | (31,947) | (22,961) | (13,781) | ||||||||
Income taxes | (6,785) | (5,215) | (3,364) | ||||||||
Net Income | (25,162) | (17,746) | (10,417) | ||||||||
Total assets | 258,301 | 156,599 | 258,301 | 156,599 | 75,407 | ||||||
Multi-family Mortgage Banking | Operating Segments | |||||||||||
Segment Information | |||||||||||
Interest income | 5,718 | 2,239 | 957 | ||||||||
Interest expense | 52 | ||||||||||
Net Interest Income | 5,666 | 2,239 | 957 | ||||||||
Provision for credit losses | 1,153 | ||||||||||
Net Interest Income After Provision for Credit Losses | 5,666 | 1,086 | 957 | ||||||||
Noninterest income | 123,980 | 155,883 | 141,605 | ||||||||
Noninterest expense | 83,862 | 82,213 | 71,486 | ||||||||
Income Before Income Taxes | 45,784 | 74,756 | 71,076 | ||||||||
Income taxes | 9,311 | 20,114 | 19,572 | ||||||||
Net Income | 36,473 | 54,642 | 51,504 | ||||||||
Total assets | 411,097 | 351,274 | 411,097 | 351,274 | 296,129 | ||||||
Mortgage Warehousing | Operating Segments | |||||||||||
Segment Information | |||||||||||
Interest income | 276,366 | 115,870 | 134,120 | ||||||||
Interest expense | 184,486 | 48,079 | 8,930 | ||||||||
Net Interest Income | 91,880 | 67,791 | 125,190 | ||||||||
Provision for credit losses | 2,782 | 37 | (1,022) | ||||||||
Net Interest Income After Provision for Credit Losses | 89,098 | 67,754 | 126,212 | ||||||||
Noninterest income | 14,315 | 5,400 | 12,399 | ||||||||
Noninterest expense | 14,003 | 10,420 | 11,949 | ||||||||
Income Before Income Taxes | 89,410 | 62,734 | 126,662 | ||||||||
Income taxes | 15,885 | 14,130 | 31,503 | ||||||||
Net Income | 73,525 | 48,604 | 95,159 | ||||||||
Total assets | 4,522,175 | 2,519,810 | 4,522,175 | 2,519,810 | 3,977,537 | ||||||
Banking | Operating Segments | |||||||||||
Segment Information | |||||||||||
Interest income | 789,399 | 354,482 | 171,465 | ||||||||
Interest expense | 451,952 | 117,284 | 28,076 | ||||||||
Net Interest Income | 337,447 | 237,198 | 143,389 | ||||||||
Provision for credit losses | 37,449 | 16,105 | 6,034 | ||||||||
Net Interest Income After Provision for Credit Losses | 299,998 | 221,093 | 137,355 | ||||||||
Noninterest income | (12,527) | (26,177) | 7,755 | ||||||||
Noninterest expense | 42,811 | 18,303 | 24,137 | ||||||||
Income Before Income Taxes | 244,660 | 176,613 | 120,973 | ||||||||
Income taxes | 50,262 | 42,392 | 30,115 | ||||||||
Net Income | 194,398 | 134,221 | 90,858 | ||||||||
Total assets | $ 11,760,943 | $ 9,587,544 | $ 11,760,943 | $ 9,587,544 | $ 6,929,565 |
Condensed Financial Informati_3
Condensed Financial Information (Parent Company Only) - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | |||
Cash and cash equivalents | $ 15,592 | $ 22,170 | |
Total assets | 16,952,516 | 12,615,227 | $ 11,278,638 |
Liabilities | |||
Other liabilities | 205,922 | 134,138 | |
Total liabilities | 15,251,432 | 11,155,488 | |
Shareholders' Equity | 1,701,084 | 1,459,739 | $ 1,155,409 |
Total liabilities and shareholders' equity | 16,952,516 | 12,615,227 | |
Reportable Legal Entities | Company | |||
Assets | |||
Cash and cash equivalents | 42,810 | 41,725 | |
Investment in joint ventures | 30,225 | 27,490 | |
Investment in subsidiaries | 1,696,000 | 1,415,173 | |
Other assets | 197 | 217 | |
Total assets | 1,769,232 | 1,484,605 | |
Liabilities | |||
Short-term subordinated debt | 64,922 | 21,000 | |
Unfunded commitments to joint ventures | 2,752 | 3,521 | |
Other liabilities | 474 | 345 | |
Total liabilities | 68,148 | 24,866 | |
Shareholders' Equity | 1,701,084 | 1,459,739 | |
Total liabilities and shareholders' equity | $ 1,769,232 | $ 1,484,605 |
Condensed Financial Informati_4
Condensed Financial Information (Parent Company Only) - Condensed Statements of Income and Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Expenses | |||||||||||
Interest expense | $ 187,434 | $ 179,240 | $ 152,452 | $ 110,601 | $ 86,029 | $ 48,727 | $ 17,239 | $ 10,287 | $ 629,727 | $ 162,282 | $ 33,892 |
Salaries and employee benefits | 108,181 | 89,085 | 85,727 | ||||||||
Professional fees | 12,704 | 9,065 | 5,427 | ||||||||
Income taxes | 21,980 | 25,056 | 3,274 | 18,363 | 17,720 | 18,907 | 18,098 | 16,696 | 68,673 | 71,421 | 77,826 |
Net Income | $ 77,473 | $ 81,504 | $ 65,302 | $ 54,955 | $ 57,156 | $ 58,488 | $ 53,935 | $ 50,142 | 279,234 | 219,721 | 227,104 |
Comprehensive Income | 287,267 | 210,654 | 225,276 | ||||||||
Reportable Legal Entities | Company | |||||||||||
Income | |||||||||||
Dividends and return of capital from subsidiaries | 53,006 | 39,775 | 33,447 | ||||||||
Other Income | 3,488 | 2,523 | 509 | ||||||||
Total income | 56,494 | 42,298 | 33,956 | ||||||||
Expenses | |||||||||||
Interest expense | 4,323 | 4,333 | 3,797 | ||||||||
Salaries and employee benefits | 1,012 | 690 | 493 | ||||||||
Professional fees | 481 | 423 | 236 | ||||||||
Other | 898 | 829 | 627 | ||||||||
Total expense | 6,714 | 6,275 | 5,153 | ||||||||
Income Before Income Tax and Equity in Undistributed Income of Subsidiaries | 49,780 | 36,023 | 28,803 | ||||||||
Income taxes | (582) | (698) | (1,174) | ||||||||
Income Before Equity in Undistributed Income of Subsidiaries | 50,362 | 36,721 | 29,977 | ||||||||
Equity in Undistributed Income of Subsidiaries | 228,872 | 183,000 | 197,127 | ||||||||
Net Income | 279,234 | 219,721 | 227,104 | ||||||||
Comprehensive Income | $ 287,267 | $ 210,654 | $ 225,276 |
Condensed Financial Informati_5
Condensed Financial Information (Parent Company Only) - Condensed Statements of Cash Flows (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Activities | |||
Net income | $ 279,234,000 | $ 219,721,000 | $ 227,104,000 |
Net cash provided by operating activities | (356,402,000) | 975,774,000 | (49,216,000) |
Investing Activities | |||
Purchase of limited partnership interests or LLC's | (18,762,000) | (14,590,000) | (11,194,000) |
Other investing activity | 1,937,000 | 4,395,000 | 404,000 |
Net cash used in investing activities | (3,260,081,000) | (2,862,851,000) | (474,262,000) |
Financing Activities | |||
Dividends paid | (48,506,000) | (38,067,000) | (31,235,000) |
Proceeds from issuance of preferred stock | 137,459,000 | 191,084,000 | |
Repurchase of preferred stock | (41,625,000) | ||
Repurchase of common stock | (3,935,333) | ||
Net cash provided by financing activities | 3,974,741,000 | 1,080,627,000 | 1,376,364,000 |
Net Change in Cash and Due From Banks | 358,258,000 | (806,450,000) | 852,886,000 |
Reportable Legal Entities | Company | |||
Operating Activities | |||
Net income | 279,234,000 | 219,721,000 | 227,104,000 |
Adjustments to reconcile net income to net cash used in operating activities | (229,428,000) | (181,263,000) | (195,530,000) |
Net cash provided by operating activities | 49,806,000 | 38,458,000 | 31,574,000 |
Investing Activities | |||
Contributed capital to subsidiaries | (43,922,000) | (110,000,000) | (116,176,000) |
Purchase of limited partnership interests or LLC's | (769,000) | (8,746,000) | (15,223,000) |
Other investing activity | 554,000 | ||
Net cash used in investing activities | (44,137,000) | (118,746,000) | (131,399,000) |
Financing Activities | |||
Net change in lines of credit and subordinated debt | 43,922,000 | 4,000,000 | 2,040,000 |
Dividends paid | (48,506,000) | (38,067,000) | (31,235,000) |
Proceeds from issuance of preferred stock | 137,459,000 | 191,084,000 | |
Redemption of preferred stock | (41,625,000) | ||
Repurchase of common stock | (3,935,000) | ||
Net cash provided by financing activities | (4,584,000) | 99,457,000 | 120,264,000 |
Net Change in Cash and Due From Banks | 1,085,000 | 19,169,000 | 20,439,000 |
Cash and Cash Equivalents, Beginning of Period | 41,725,000 | 22,556,000 | 2,117,000 |
Cash and Cash Equivalents, End of Period | 42,810,000 | 41,725,000 | 22,556,000 |
Additional Cash Flows Information: | |||
Payable for limited partnership interest or LLC's | $ 2,752,000 | $ 3,521,000 | $ 10,350,000 |
Quarterly Condensed Financial_3
Quarterly Condensed Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Quarterly Condensed Financial Information (Unaudited) | |||||||||||
Interest income | $ 311,759 | $ 296,676 | $ 258,069 | $ 211,294 | $ 181,439 | $ 134,112 | $ 89,270 | $ 76,012 | $ 1,077,798 | $ 480,833 | $ 311,886 |
Interest expense | 187,434 | 179,240 | 152,452 | 110,601 | 86,029 | 48,727 | 17,239 | 10,287 | 629,727 | 162,282 | 33,892 |
Net Interest Income | 124,325 | 117,436 | 105,617 | 100,693 | 95,410 | 85,385 | 72,031 | 65,725 | 448,071 | 318,551 | 277,994 |
Provision for credit losses | 6,747 | 4,014 | 22,603 | 6,867 | 6,407 | 2,225 | 6,212 | 2,451 | 40,231 | 17,295 | 5,012 |
Net Interest Income After Provision for Credit Losses | 117,578 | 113,422 | 83,014 | 93,826 | 89,003 | 83,160 | 65,819 | 63,274 | 407,840 | 301,256 | 272,982 |
Noninterest income | 34,454 | 36,068 | 29,882 | 14,264 | 22,982 | 29,186 | 39,171 | 34,597 | 114,668 | 125,936 | 157,333 |
Noninterest expense | 52,579 | 42,930 | 44,320 | 34,772 | 37,109 | 34,951 | 32,957 | 31,033 | 174,601 | 136,050 | 125,385 |
Income Before Income Taxes | 99,453 | 106,560 | 68,576 | 73,318 | 74,876 | 77,395 | 72,033 | 66,838 | 347,907 | 291,142 | 304,930 |
Income taxes | 21,980 | 25,056 | 3,274 | 18,363 | 17,720 | 18,907 | 18,098 | 16,696 | 68,673 | 71,421 | 77,826 |
Net Income | 77,473 | 81,504 | 65,302 | 54,955 | 57,156 | 58,488 | 53,935 | 50,142 | 279,234 | 219,721 | 227,104 |
Less: preferred stock dividends | 8,667 | 8,668 | 8,668 | 8,667 | 8,797 | 5,729 | 5,729 | 5,728 | 34,670 | 25,983 | 20,873 |
Net Income Allocated to Common Shareholders | $ 68,806 | $ 72,836 | $ 56,634 | $ 46,288 | $ 48,359 | $ 52,759 | $ 48,206 | $ 44,414 | $ 244,564 | $ 193,738 | $ 206,231 |
Per common share data: | |||||||||||
Basic Earnings Per Share (in dollars per share) | $ 1.59 | $ 1.68 | $ 1.31 | $ 1.07 | $ 1.12 | $ 1.22 | $ 1.12 | $ 1.03 | $ 5.66 | $ 4.49 | $ 4.78 |
Diluted Earnings Per Share (in dollars per share) | $ 1.58 | $ 1.68 | $ 1.31 | $ 1.07 | $ 1.12 | $ 1.22 | $ 1.11 | $ 1.02 | $ 5.64 | $ 4.47 | $ 4.76 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||||||||||
Net Income (Loss) | $ 77,473 | $ 81,504 | $ 65,302 | $ 54,955 | $ 57,156 | $ 58,488 | $ 53,935 | $ 50,142 | $ 279,234 | $ 219,721 | $ 227,104 |
Insider Trading Arrangements
Insider Trading Arrangements | 12 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |