Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 01, 2024 | |
Document Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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 Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 43,354,718 | |
Entity Central Index Key | 0001629019 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
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 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Cash and due from banks | $ 17,924 | $ 15,592 |
Interest-earning demand accounts | 490,831 | 568,830 |
Cash and cash equivalents | 508,755 | 584,422 |
Securities purchased under agreements to resell | 3,329 | 3,349 |
Mortgage loans in process of securitization | 142,629 | 110,599 |
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 1,061,288 | 1,113,687 |
Securities held to maturity ($1,176,178 and $1,203,535 at fair value, respectively) | 1,175,167 | 1,204,217 |
Federal Home Loan Bank (FHLB) stock | 64,215 | 48,578 |
Loans held for sale (includes $84,513 and $86,663 at fair value, respectively) | 3,503,131 | 3,144,756 |
Loans receivable, net of allowance for credit losses on loans of $75,712 and $71,752, respectively | 10,690,513 | 10,127,801 |
Premises and equipment, net | 42,450 | 42,342 |
Servicing rights | 172,200 | 158,457 |
Interest receivable | 90,303 | 91,346 |
Goodwill | 8,014 | 15,845 |
Intangible assets, net | 149 | 742 |
Other assets and receivables | 360,433 | 306,375 |
Total assets | 17,822,576 | 16,952,516 |
Deposits | ||
Noninterest-bearing | 319,872 | 520,070 |
Interest-bearing | 13,655,789 | 13,541,390 |
Total deposits | 13,975,661 | 14,061,460 |
Borrowings | 1,835,985 | 964,127 |
Deferred and current tax liabilities, net | 43,935 | 19,923 |
Other liabilities | 190,527 | 205,922 |
Total liabilities | 16,046,108 | 15,251,432 |
Commitments and Contingencies | ||
Shareholders' Equity | ||
Common stock, without par value Authorized - 75,000,000 shares Issued and outstanding - 43,354,718 shares at March 31, 2024 and 43,242,928 shares at December 31, 2023 | 139,950 | 140,365 |
Retained earnings | 1,138,083 | 1,063,599 |
Accumulated other comprehensive loss | (1,173) | (2,488) |
Total shareholders' equity | 1,776,468 | 1,701,084 |
Total liabilities and shareholders' equity | 17,822,576 | 16,952,516 |
7% Series A Preferred Stock | ||
Shareholders' Equity | ||
Preferred stock | 50,221 | 50,221 |
6% Series B Preferred Stock | ||
Shareholders' Equity | ||
Preferred stock | 120,844 | 120,844 |
6% Series C Preferred Stock | ||
Shareholders' Equity | ||
Preferred stock | 191,084 | 191,084 |
8.25% Series D Preferred Stock | ||
Shareholders' Equity | ||
Preferred stock | $ 137,459 | $ 137,459 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Securities available for sale | $ 700,640 | $ 722,497 |
Securities held to maturity, fair value | 1,176,178 | 1,203,535 |
Loans held for sale at fair value | 84,513 | 86,663 |
Net of allowance for credit losses on loans | $ 75,712 | $ 71,752 |
Stockholders' Equity: | ||
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 43,354,718 | 43,242,928 |
Common stock, shares outstanding | 43,354,718 | 43,242,928 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
7% Series A Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, dividend rate (as a percent) | 7% | 7% |
Preferred stock liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred stock, shares authorized | 3,500,000 | 3,500,000 |
Preferred stock, shares issued | 2,081,800 | 2,081,800 |
Preferred stock, shares outstanding | 2,081,800 | 2,081,800 |
6% Series B Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, dividend rate (as a percent) | 6% | 6% |
Preferred stock liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 125,000 | 125,000 |
Preferred stock, shares issued | 125,000 | 125,000 |
Preferred stock, shares outstanding | 125,000 | 125,000 |
Depositary shares | 5,000,000 | 5,000,000 |
6% Series C Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, dividend rate (as a percent) | 6% | 6% |
Preferred stock liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 200,000 | 200,000 |
Preferred stock, shares issued | 196,181 | 196,181 |
Preferred stock, shares outstanding | 196,181 | 196,181 |
Depositary shares | 7,847,233 | 7,847,233 |
8.25% Series D Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, dividend rate (as a percent) | 8.25% | 8.25% |
Preferred stock liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 300,000 | 300,000 |
Preferred stock, shares issued | 142,500 | 142,500 |
Preferred stock, shares outstanding | 142,500 | 142,500 |
Depositary shares | 5,700,000 | 5,700,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Interest Income | ||
Loans | $ 271,998,000 | $ 189,450,000 |
Mortgage loans in process of securitization | 1,720,000 | 1,648,000 |
Investment securities: | ||
Available for sale | 14,388,000 | 2,266,000 |
Held to maturity | 20,522,000 | 15,754,000 |
Federal Home Loan Bank stock | 844,000 | 427,000 |
Other | 4,701,000 | 1,749,000 |
Total interest income | 314,173,000 | 211,294,000 |
Interest Expense | ||
Deposits | 171,022,000 | 104,442,000 |
Borrowed funds | 16,095,000 | 6,159,000 |
Total interest expense | 187,117,000 | 110,601,000 |
Net Interest Income | 127,056,000 | 100,693,000 |
Provision for credit losses | 4,726,000 | 6,867,000 |
Net Interest Income After Provision for Credit Losses | 122,330,000 | 93,826,000 |
Noninterest Income | ||
Gain on sale of loans | 9,356,000 | 6,733,000 |
Loan servicing fees, net | 19,402,000 | 2,360,000 |
Mortgage warehouse fees | 982,000 | 1,028,000 |
Loss on sale of investments available for sale (includes $(108) and $0, respectively, related to accumulated other comprehensive loss reclassifications) | (108,000) | |
Syndication and asset management fees | 5,303,000 | 1,212,000 |
Other income | 5,939,000 | 2,931,000 |
Total noninterest income | 40,874,000 | 14,264,000 |
Noninterest Expense | ||
Salaries and employee benefits | 29,596,000 | 22,146,000 |
Loan expenses | 956,000 | 804,000 |
Occupancy and equipment | 2,237,000 | 2,232,000 |
Professional fees | 4,099,000 | 2,269,000 |
Deposit insurance expense | 5,125,000 | 2,178,000 |
Technology expense | 1,854,000 | 1,577,000 |
Other expense | 5,045,000 | 3,566,000 |
Total noninterest expense | 48,912,000 | 34,772,000 |
Income Before Income Taxes | 114,292,000 | 73,318,000 |
Provision for income taxes (includes $26 and $0, respectively, related to income tax benefit for reclassification items) | 27,238,000 | 18,363,000 |
Net Income | 87,054,000 | 54,955,000 |
Dividends on preferred stock | (8,667,000) | (8,667,000) |
Net income allocated to common shareholders | $ 78,387,000 | $ 46,288,000 |
Basic Earnings Per Share (in dollars per share) | $ 1.81 | $ 1.07 |
Diluted Earnings Per Share (in dollars per share) | $ 1.80 | $ 1.07 |
Weighted-Average Shares Outstanding | ||
Basic (in shares) | 43,305,985 | 43,179,604 |
Diluted (in shares) | 43,466,647 | 43,290,779 |
Consolidated Statements of Inco
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Condensed Consolidated Statements of Income (Unaudited) | ||
Reclassifications included in gains on sale of investment available for sale | $ (108) | $ 0 |
Provision for income taxes related to income tax expense for reclassification items | $ 26 | $ 0 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) | ||
Net Income | $ 87,054 | $ 54,955 |
Other Comprehensive Income: | ||
Net unrealized gain on investment securities available for sale, net of tax expense of $(384) and $(934), respectively | 1,233 | 2,792 |
Add: Reclassification adjustment for losses included in net income, net of tax benefit of $26 and $0, respectively | 82 | |
Other comprehensive income (loss) for the period | 1,315 | 2,792 |
Comprehensive Income | $ 88,369 | $ 57,747 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) | ||
Net of tax (expense)/ benefits on net change in unrealized gains/(losses) on investment securities available for sale | $ (384) | $ (934) |
Net of tax expense on reclassification adjustment for gains include in net income | $ 26 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common stock | Preferred stock 7% Series A Preferred Stock | Preferred stock 6% Series B Preferred Stock | Preferred stock 6% Series C Preferred Stock | Preferred stock 8.25% Series D Preferred Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance beginning of period at Dec. 31, 2022 | $ 137,781 | $ 832,871 | $ (10,521) | |||||
Balance beginning of period (in shares) at Dec. 31, 2022 | 43,113,127 | |||||||
Consolidated Statements of Shareholders' Equity | ||||||||
Net Income | 54,955 | $ 54,955 | ||||||
Dividends on 7% Series A preferred stock, $1.75 per share, annually | (910) | |||||||
Dividends on 6% Series B preferred stock, $60.00 per share, annually | (1,875) | |||||||
Dividends on 6% Series C preferred stock, $60.00 per share, annually | (2,943) | |||||||
Dividends on 8.25% Series D preferred stock, $82.50 per share, annually | (2,939) | |||||||
Dividends on common stock, $0.33 per share, annually in 2024 and $0.32 per share, annually in 2023 | (3,459) | |||||||
Other comprehensive income (loss) | 2,792 | 2,792 | ||||||
Distribution to employee stock ownership plan | $ 810 | |||||||
Distribution to employee stock ownership plan (in shares) | 33,293 | |||||||
Shares issued for stock compensation plans, net of taxes withheld to satisfy tax obligations | $ (486) | |||||||
Shares issued for stock compensation plans, net of taxes withheld to satisfy tax obligations (in shares) | 87,198 | |||||||
Balance end of period at Mar. 31, 2023 | $ 138,105 | $ 50,221 | $ 120,844 | $ 191,084 | $ 137,459 | 875,700 | (7,729) | 1,505,684 |
Balance end of period (in shares) at Mar. 31, 2023 | 43,233,618 | 2,081,800 | 125,000 | 196,181 | 142,500 | |||
Balance beginning of period at Dec. 31, 2023 | $ 140,365 | 1,063,599 | (2,488) | 1,701,084 | ||||
Balance beginning of period (in shares) at Dec. 31, 2023 | 43,242,928 | |||||||
Consolidated Statements of Shareholders' Equity | ||||||||
Net Income | 87,054 | 87,054 | ||||||
Dividends on 7% Series A preferred stock, $1.75 per share, annually | (910) | |||||||
Dividends on 6% Series B preferred stock, $60.00 per share, annually | (1,875) | |||||||
Dividends on 6% Series C preferred stock, $60.00 per share, annually | (2,943) | |||||||
Dividends on 8.25% Series D preferred stock, $82.50 per share, annually | (2,939) | |||||||
Dividends on common stock, $0.33 per share, annually in 2024 and $0.32 per share, annually in 2023 | (3,903) | |||||||
Other comprehensive income (loss) | 1,315 | 1,315 | ||||||
Distribution to employee stock ownership plan | $ 997 | |||||||
Distribution to employee stock ownership plan (in shares) | 23,414 | |||||||
Shares issued for stock compensation plans, net of taxes withheld to satisfy tax obligations | $ (1,412) | |||||||
Shares issued for stock compensation plans, net of taxes withheld to satisfy tax obligations (in shares) | 88,376 | |||||||
Balance end of period at Mar. 31, 2024 | $ 139,950 | $ 50,221 | $ 120,844 | $ 191,084 | $ 137,459 | $ 1,138,083 | $ (1,173) | $ 1,776,468 |
Balance end of period (in shares) at Mar. 31, 2024 | 43,354,718 | 2,081,800 | 125,000 | 196,181 | 142,500 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Dividends on common stock per share | $ 0.36 | $ 0.32 |
7% Series A Preferred Stock | ||
Preferred stock, dividend rate (as a percent) | 7% | |
7% Series A Preferred Stock | Preferred stock | ||
Preferred stock, dividend rate (as a percent) | 7% | 7% |
Dividends on preferred stock per share | $ 1.75 | $ 1.75 |
6% Series B Preferred Stock | ||
Preferred stock, dividend rate (as a percent) | 6% | |
6% Series B Preferred Stock | Preferred stock | ||
Preferred stock, dividend rate (as a percent) | 6% | 6% |
Dividends on preferred stock per share | $ 60 | $ 60 |
6% Series C Preferred Stock | ||
Preferred stock, dividend rate (as a percent) | 6% | |
6% Series C Preferred Stock | Preferred stock | ||
Preferred stock, dividend rate (as a percent) | 6% | 6% |
Dividends on preferred stock per share | $ 60 | $ 60 |
8.25% Series D Preferred Stock | ||
Preferred stock, dividend rate (as a percent) | 8.25% | |
8.25% Series D Preferred Stock | Preferred stock | ||
Preferred stock, dividend rate (as a percent) | 8.25% | 8.25% |
Dividends on preferred stock per share | $ 82.50 | $ 82.50 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities: | ||
Net income | $ 87,054,000 | $ 54,955,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 725,000 | 686,000 |
Provision for credit losses | 4,726,000 | 6,867,000 |
Gain on sale of securities | 108,000 | |
Gain on sale of loans | (9,356,000) | (6,733,000) |
Proceeds from sales of loans | 4,694,759,000 | 3,356,860,000 |
Loans and participations originated and purchased for sale | (5,078,607,000) | (3,674,484,000) |
Proceeds from sale of low-income housing tax credits | 25,861,000 | 8,670,000 |
Purchases of low-income housing tax credits for sale | (21,113,000) | (7,932,000) |
Change in servicing rights for paydowns and fair value adjustments | (11,577,000) | 4,554,000 |
Net change in: | ||
Mortgage loans in process of securitization | (32,030,000) | (42,880,000) |
Other assets and receivables | (58,186,000) | (8,116,000) |
Other liabilities | 14,595,000 | 7,607,000 |
Other | (731,000) | (1,587,000) |
Net cash used in operating activities | (383,772,000) | (301,533,000) |
Investing activities: | ||
Net change in securities purchased under agreements to resell | 20,000 | 26,000 |
Purchases of securities available for sale | (193,957,000) | (353,249,000) |
Purchases of securities held to maturity | (1,540,000) | |
Proceeds from the sale of securities available for sale | 9,983,000 | 0 |
Proceeds from calls, maturities and paydowns of securities available for sale | 231,585,000 | 832,000 |
Proceeds from calls, maturities and paydowns of securities held to maturity | 29,050,000 | 15,783,000 |
Purchases of loans | (27,727,000) | (98,791,000) |
Net change in loans receivable | (552,568,000) | (678,522,000) |
Proceeds from loans held for sale previously classified as loans receivable | 1,600,000 | |
Purchase of FHLB stock | (16,031,000) | |
Proceeds from sale of FHLB stock | 394,000 | |
Purchases of premises and equipment | (2,306,000) | (1,041,000) |
Purchase of limited partnership interests | (4,157,000) | (4,580,000) |
Net cash paid on sale of branches | (171,319,000) | |
Other investing activities | 414,000 | 906,000 |
Net cash used in investing activities | (695,019,000) | (1,120,176,000) |
Financing activities: | ||
Net change in deposits | 144,036,000 | 1,273,886,000 |
Proceeds from borrowings | 26,751,878,000 | 22,335,000,000 |
Repayment of borrowings | (25,871,971,000) | (22,185,180,000) |
Proceeds from credit linked notes | 153,546,000 | |
Payment of credit linked notes | (8,249,000) | |
Dividends | (12,570,000) | (12,126,000) |
Other financing activities | 5,000 | |
Net cash provided by financing activities | 1,003,124,000 | 1,565,131,000 |
Net Change in Cash and Cash Equivalents | (75,667,000) | 143,422,000 |
Cash and Cash Equivalents, Beginning of Period | 584,422,000 | 226,164,000 |
Cash and Cash Equivalents, End of Period | 508,755,000 | 369,586,000 |
Supplemental Cash Flows Information: | ||
Interest paid | 178,751,000 | 101,381,000 |
Income taxes paid, net of refunds | 783,000 | 966,000 |
Change in ROU assets due to lease renegotiation | (1,349,000) | |
Transfer of loans from loans held for sale to loans receivable | 31,350,000 | $ 377,460,000 |
Transfer of loans from loans receivable to loans held for sale | $ 1,600,000 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2024 | |
Basis of Presentation | |
Basis of Presentation | Note 1: Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Merchants Bancorp, a registered bank holding company (the “Company”) and its wholly owned subsidiaries, Merchants Bank of Indiana (“Merchants Bank”), Farmers-Merchants Bank of Illinois (“FMBI”) (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”. The accompanying unaudited condensed consolidated balance sheet of the Company as of December 31, 2023, which has been derived from audited financial statements, and unaudited condensed consolidated financial statements of the Company as of March 31, 2024 and for the three months ended March 31, 2024 and 2023, were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company as of and for the year ended December 31, 2023 in its Annual Report on Form 10-K. Reference is made to the accounting policies of the Company described in the Notes to the Financial Statements contained in the Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of the unaudited financial statements have been included to present fairly the financial position as of March 31, 2024 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 The unaudited condensed consolidated financial statements as of and for the period ended March 31, 2024 and 2023 include results from the Company, and its wholly owned subsidiaries, Merchants Bank, FMBI (until its branches were sold and its bank charter merged into Merchants Bank on January 26, 2024) and MAM. Also included are Merchants Bank’s primary operating subsidiaries, MCC, MCS and MCI, as well as all direct and indirectly owned subsidiaries owned by Merchants Bancorp. During 2022, Merchants Foundation, Inc., a nonprofit corporation, was incorporated and its results are consolidated with the Company’s consolidated financial statements in all periods presented. 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 (“ASU”) 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 March 31, 2024 and 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 5: Variable Interest Entities (VIEs) All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses on loans, servicing rights and fair values of financial instruments. Significant Accounting Policies The significant accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. Restricted Cash 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. The balance of the notes as of March 31, 2024 was $115.6 million. As of March 31, 2024, there was $39.2 million in restricted cash. Also see Note 11: Borrowings. |
Investment Securities
Investment Securities | 3 Months Ended |
Mar. 31, 2024 | |
Investment Securities | |
Investment Securities | Note 2: Investment Securities The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities available for sale and held to maturity were as follows: March 31, 2024 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities available for sale: Treasury notes $ 109,146 $ 15 $ 58 $ 109,103 Federal agencies 240,000 — 1,499 238,501 Mortgage-backed - Government Agency ("Agency") (2) - multi-family 13,044 — — 13,044 Mortgage-backed - Non-Agency residential - fair value option (1) 472,192 — — 472,192 Mortgage-backed - Agency - residential - fair value option (1) 228,448 — — 228,448 Total securities available for sale $ 1,062,830 $ 15 $ 1,557 $ 1,061,288 Securities held to maturity: Mortgage-backed - Non-Agency - multi-family $ 710,024 $ — $ 419 $ 709,605 Mortgage-backed - Non-Agency - residential 453,167 2,385 87 455,465 Mortgage-backed - Agency 11,976 — 868 11,108 Total securities held to maturity $ 1,175,167 $ 2,385 $ 1,374 $ 1,176,178 (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 Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”), and Government National Mortgage Association (“Ginnie Mae”). December 31, 2023 Gross Gross Amortized Unrealized Unrealized Fair Cost 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 (1) 485,500 — — 485,500 Mortgage-backed - Agency - residential - fair value option (1) 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 Ginnie Mae. Accrued interest on securities available for sale totaled $5.1 million at March 31, 2024 and $6.7 million at December 31, 2023, and is excluded from the estimate of credit losses. Accrued interest on securities held to maturity totaled $5.6 million at March 31, 2024 and $5.8 million at December 31, 2023, and is excluded from the estimate of credit losses. The amortized cost and fair value of available for sale securities at March 31, 2024 and 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. March 31, 2024 December 31, 2023 Amortized Fair Amortized Fair Cost Value Cost Value Securities available for sale: (In thousands) Within one year $ 209,146 $ 207,796 $ 308,474 $ 305,406 After one through five years 140,000 139,808 71,518 71,317 349,146 347,604 379,992 376,723 Mortgage-backed - Agency 13,044 13,044 14,465 14,467 Mortgage-backed - Non-Agency residential - fair value option 472,192 472,192 485,500 485,500 Mortgage-backed - Agency - residential - fair value option 228,448 228,448 236,997 236,997 $ 1,062,830 $ 1,061,288 $ 1,116,954 $ 1,113,687 Securities held to maturity: Mortgage-backed - Non-Agency - multi-family $ 710,024 $ 709,605 $ 719,662 $ 719,247 Mortgage-backed - Non-Agency - residential 453,167 455,465 472,539 473,094 Mortgage-backed - Agency 11,976 11,108 12,016 11,194 $ 1,175,167 $ 1,176,178 $ 1,204,217 $ 1,203,535 During the three months ended March 31, 2024, the Company recognized a net loss of $108,000 from sales of securities available for sale. The $108,000 net loss consisted of $10,000 in gains and $118,000 of losses. During the three months ended March 31, 2023, 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 allowance for credit losses (“ACL”) has not been recorded, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2024 and December 31, 2023: March 31, 2024 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 $ 3,092 $ 1 $ 26,938 $ 57 $ 30,030 $ 58 Federal agencies 139,808 192 98,693 1,307 238,501 1,499 $ 142,900 $ 193 $ 125,631 $ 1,364 $ 268,531 $ 1,557 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 Allowance for Credit Losses (ACL) For available for sale securities 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 noncredit related factors. Any impairment that is not credit-related is recognized in accumulated other comprehensive income (loss), net of tax. Credit-related impairment is recognized as an ACL for available for sale securities on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings. Accrued interest receivable is excluded from the estimate of credit losses. Both the ACL and the adjustment to net income may be reversed if conditions change. However, if the Company expects, or is required, to sell an impaired available for sale security before recovering its amortized cost basis, the entire impairment amount would be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis. Because the security’s amortized cost basis is adjusted to fair value, there is no ACL in this situation. In evaluating 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 March 31, 2024 and December 31, 2023. 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 | 3 Months Ended |
Mar. 31, 2024 | |
Mortgage Loans in Process of Securitization. | |
Mortgage Loans in Process of Securitization | Note 3: Mortgage Loans in Process of Securitization Mortgage loans in process of securitization are recorded at fair value with changes in fair value recorded in earnings. These include multi-family rental real estate loan originations to be sold as Ginnie Mae mortgage-backed securities, and Fannie Mae and Freddie Mac participation certificates, all of which are pending settlements under firm investor commitments to purchase the securities, typically occurring within 30 days. The fair value increases recorded in earnings for mortgage loans in process of securitization totaled |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses on Loans | 3 Months Ended |
Mar. 31, 2024 | |
Loans and Allowance for Credit Losses on Loans | |
Loans and Allowance for Credit Losses on Loans | Note 4: Loans and Allowance for Credit Losses on Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding principal balances adjusted for unearned income, charge-offs, the ACL-Loans, any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans. For loans at amortized cost, interest income is accrued based on the unpaid principal balance. The Company has made a policy election to exclude accrued interest from the amortized cost basis of loans and reports accrued interest separately from the related loan balance in the unaudited condensed consolidated balance sheets. Accrued interest on loans totaled $60.2 million and $60.4 million at March 31, 2024 and December 31, 2023, 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 through secured financing. The warehousing arrangement is secured by the underlying mortgages and a combination of deposits, personal guarantees and advance rates. The Company typically holds the collateral until it is sent under a bailee arrangement instructing the investor to send proceeds to the Company. Typical investors are large financial institutions or government agencies. Interest earned from the time of funding to the time of sale is recognized as interest income as accrued. Warehouse fees are accrued as noninterest income. Loan Portfolio Summary Loans receivable at March 31, 2024 and December 31, 2023 include: March 31, December 31, 2024 2023 (In thousands) Mortgage warehouse repurchase agreements $ 1,142,994 $ 752,468 Residential real estate (1) 1,321,300 1,324,305 Multi-family financing 4,096,606 4,006,160 Healthcare financing 2,464,685 2,356,689 Commercial and commercial real estate (2)(3) 1,666,751 1,643,081 Agricultural production and real estate 65,977 103,150 Consumer and margin loans 7,912 13,700 10,766,225 10,199,553 Less: ACL-Loans 75,712 71,752 Loans Receivable $ 10,690,513 $ 10,127,801 (1) Includes $1.2 billion and $1.2 billion of All-in-One© first-lien home equity lines of credit at March 31, 2024 and December 31, 2023, respectively. (2) Includes $1.1 billion and $1.1 billion of revolving lines of credit collateralized primarily by single-family mortgage servicing rights as of March 31, 2024 and December 31, 2023, respectively. (3) Includes only $6.8 million and $8.4 million of non-owner occupied commercial real estate as of March 31, 2024 and December 31, 202 3, 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 mortgage company 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 companies 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): The Company specializes in originating multi-family financing that can be market rate or affordable. The portfolio includes loans for construction, acquisition, refinance, or permanent financing. Loans are typically secured by real estate mortgages, assignment of Low-Income Housing Tax Credits (“LIHTC”), and/or equity interest in the underlying properties. All loans are assessed and reviewed at a minimum based on borrower strength/experience, historical property performance, market trends, projected financial performance with regards to intended strategy, and source of repayment. Independent third-party reports are used to ensure legal conformity and support valuations of the assets. Exit strategies and sources of repayment are provided through the secondary market via governmental programs, strategic refinances, LIHTC equity installments, and cashflow from the properties. Repayment of these loans depends on the successful operation of a business or property and the borrower’s cash flows. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economy in the related market area. These loans are well-collateralized and underwritten to agency guidelines. Loans included in this segment typically carry a base rate of 30-day SOFR, that adjusts on a monthly basis, and a margin. The Company strategically focuses on loan classes that are government backed or can be sold in the secondary market. Healthcare Financing (HC FIN): The healthcare financing portfolio includes customized loan products for independent living, assisted living, memory care and skilled nursing projects. A variety of loan products are available to accommodate rehabilitation, acquisition, and refinancing of healthcare properties. Credit risk in these loans are primarily driven by local demographics and the expertise of the operators of the facilities. Repayment of these loans may include permanent loans, sales of developed property or an interim loan commitment from the Company until permanent agency-eligible financing is obtained, as well as successful operation of a business or property and the borrower’s cash flows. These loans are well-collateralized and underwritten to agency guidelines. Loans included in this segment typically carry a base rate of 30-day SOFR, that adjusts on a monthly basis, and a margin. The Company strategically focuses on loan classes that are government backed or can be sold in the secondary market. 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 that are assessed for fair value quarterly at the Company’s request. 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”), three-year ARM or five-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 five years. Consumer and Margin Loans (CON & MAR): Consumer loans are those loans secured by household assets. Margin loans are those loans secured by marketable securities. The term and maximum amount for these loans are determined by considering the purpose of the loan, the margin (advance percentage against value) in all collateral, the primary source of repayment, and the borrower’s other related cash flow. ACL-Loans The 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 included in 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 three months ended March 31, 2024. 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 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 ACL-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. The following table presents, by loan portfolio segment, the activity in the ACL-Loans for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, 2024 MTG WHRA RES RE MF FIN HC FIN CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) ACL-Loans Balance, beginning of period $ 2,070 $ 7,323 $ 26,874 $ 22,454 $ 12,243 $ 619 $ 169 $ 71,752 FMBI's ACL for loans sold — (55) (186) (2) (92) (246) (12) (593) Provision for credit losses 952 (363) 1,976 2,135 763 77 (63) 5,477 Loans charged to the allowance — — — — (925) — — (925) Recoveries of loans previously charged-off — — — — 1 — — 1 Balance, end of period $ 3,022 $ 6,905 $ 28,664 $ 24,587 $ 11,990 $ 450 $ 94 $ 75,712 For the Three Months Ended March 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 415 349 3,070 1,871 2,149 (22) (15) 7,817 Loans charged to the allowance — — — — — — — — Recoveries of loans previously charged-off — — — — 7 — — 7 Balance, end of period $ 1,664 $ 7,378 $ 19,851 $ 11,753 $ 10,482 $ 543 $ 167 $ 51,838 The Company recorded a total provision for credit losses of $4.7 million for the three months ended March 31, 2024. The $4.7 million total provision for credit losses consisted of $4.9 million for the ACL-Loans as shown above and $(0.2) million for the ACL-Off-Balance Sheet Credit Exposures (“OBCE’s”). The $4.9 million total provision for ACL-Loans reflected an elimination of $593,000 from the sale of FMBI branches in January 2024. The Company recorded a total provision for credit losses of $6.9 million for the three months ended March 31, 2023. The $6.9 million total provision for credit losses consisted of $7.8 million for the ACL-Loans as shown above and $(0.9) million for the ACL-OBCE’s. The following table presents, by loan portfolio segment, the activity in the ACL-Loans for the twelve months ended December 31, 2023: 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 below table presents the amortized cost basis and ACL-Loans allocated for collateral dependent loans, which are individually evaluated to determine expected credit losses as of March 31, 2024 and December 31, 2023: March 31, 2024 Real Estate Accounts Receivable / Equipment Other Total ACL-Loans Allocation (In thousands) RES RE $ 1,272 $ — $ — $ 1,272 $ 8 MF FIN 53,200 — — 53,200 581 HC FIN 63,283 — — 63,283 5,652 CML & CRE 168 2,628 2,657 5,453 1,780 AG & AGRE 147 — — 147 1 CON & MAR — — — — — Total collateral dependent loans $ 118,070 $ 2,628 $ 2,657 $ 123,355 $ 8,022 There were no significant changes to the types of collateral securing the Company’s collateral dependent loans compared to December 31, 2023. 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 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 Management Committee, 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 since December 31, 2023: Pass Special Mention 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 tables present the credit risk profile of the Company’s loan portfolio based on internal risk rating category as of March 31, 2024 and December 31, 2023: March 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans TOTAL (In thousands) MTG WHRA Pass $ — $ — $ — $ — $ — $ — $ 1,142,994 $ 1,142,994 Total $ — $ — $ — $ — $ — $ — $ 1,142,994 $ 1,142,994 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — RES RE Pass $ 1,780 $ 32,353 $ 9,793 $ 6,175 $ 21,315 $ 7,400 $ 1,240,994 $ 1,319,810 Special Mention — — — — — 218 — 218 Substandard — — — — — — 1,272 1,272 Total $ 1,780 $ 32,353 $ 9,793 $ 6,175 $ 21,315 $ 7,618 $ 1,242,266 $ 1,321,300 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — MF FIN Pass $ 298,730 $ 957,019 $ 734,071 $ 114,353 $ 9,070 $ 34,587 $ 1,731,470 $ 3,879,300 Special Mention 8,000 96,900 28,559 8,400 — 1,470 20,777 164,106 Substandard — 11,667 28,360 6,534 — — 6,639 53,200 Total $ 306,730 $ 1,065,586 $ 790,990 $ 129,287 $ 9,070 $ 36,057 $ 1,758,886 $ 4,096,606 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — HC FIN Pass $ 258,604 $ 626,388 $ 936,880 $ 98,815 $ — $ 14,459 $ 398,904 $ 2,334,050 Special Mention 24,319 20,900 9,502 — — — 12,631 67,352 Substandard — 25,600 — 28,783 — — 8,900 63,283 Total $ 282,923 $ 672,888 $ 946,382 $ 127,598 $ — $ 14,459 $ 420,435 $ 2,464,685 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — CML & CRE Pass $ 4,469 $ 54,002 $ 116,479 $ 71,824 $ 19,203 $ 34,169 $ 1,360,706 $ 1,660,852 Special Mention — — — 289 157 — — 446 Substandard — — 92 776 850 60 3,675 5,453 Total $ 4,469 $ 54,002 $ 116,571 $ 72,889 $ 20,210 $ 34,229 $ 1,364,381 $ 1,666,751 Charge-offs $ — $ — $ — $ 925 $ — $ — $ — $ 925 AG & AGRE Pass $ 7,833 $ 7,875 $ 5,103 $ 2,722 $ 8,566 $ 15,515 $ 18,216 $ 65,830 Substandard — — — — — 147 — 147 Total $ 7,833 $ 7,875 $ 5,103 $ 2,722 $ 8,566 $ 15,662 $ 18,216 $ 65,977 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — CON & MAR Pass $ — $ 109 $ 28 $ 25 $ 2 $ 4,268 $ 3,480 $ 7,912 Total $ — $ 109 $ 28 $ 25 $ 2 $ 4,268 $ 3,480 $ 7,912 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Total Pass $ 571,416 $ 1,677,746 $ 1,802,354 $ 293,914 $ 58,156 $ 110,398 $ 5,896,764 $ 10,410,748 Total Special Mention $ 32,319 $ 117,800 $ 38,061 $ 8,689 $ 157 $ 1,688 $ 33,408 $ 232,122 Total Substandard $ — $ 37,267 $ 28,452 $ 36,093 $ 850 $ 207 $ 20,486 $ 123,355 Total Doubtful $ — $ — $ — $ — $ — $ — $ — $ — Total Loans $ 603,735 $ 1,832,813 $ 1,868,867 $ 338,696 $ 59,163 $ 112,293 $ 5,950,658 $ 10,766,225 Total Charge-offs $ — $ — $ — $ 925 $ — $ — $ — $ 925 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 March 31, 2024 or December 31, 2023. Delinquent Loans The following tables present the Company’s loan portfolio aging analysis of the recorded investment in loans as of March 31, 2024 and December 31, 2023. March 31, 2024 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHRA $ — $ — $ — $ — $ 1,142,994 $ 1,142,994 RES RE 4,588 682 218 5,488 1,315,812 1,321,300 MF FIN 24,870 — 78,910 103,780 3,992,826 4,096,606 HC FIN — 25,600 48,733 74,333 2,390,352 2,464,685 CML & CRE 1,922 — 3,006 4,928 1,661,823 1,666,751 AG & AGRE 44 10 159 213 65,764 65,977 CON & MAR — — — — 7,912 7,912 $ 31,424 $ 26,292 $ 131,026 $ 188,742 $ 10,577,483 $ 10,766,225 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 The above tables do not include two delinquent loans that were classified as held for sale at March 31, 2024, totaling $30.2 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 three months ended as of March 31, 2024 and 2023, respectively, was immaterial. The following table presents the Company’s nonaccrual loans and loans past due 90 days or more and still accruing at March 31, 2024 and December 31, 2023. March 31, December 31, 2024 2023 Total Loans > Total Loans > 90 Days & 90 Days & Nonaccrual Accruing Nonaccrual Accruing (In thousands) RES RE $ 760 $ 218 $ 1,486 $ 894 MF FIN 46,248 32,662 39,608 — HC FIN 28,783 19,950 28,783 7,216 CML & CRE 2,866 140 3,820 43 AG & AGRE 147 12 147 — CON & MAR — — 3 15 $ 78,804 $ 52,982 $ 73,847 $ 8,168 The Company did not have any nonperforming loans without an estimated ACL at March 31, 2024. Modifications to Borrowers Experiencing Financial Difficulty There were no new loans modified for borrowers experiencing financial difficulty during the three months ended March 31, 2024. 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 Company did not have loans modified in the last twelve months that were delinquent as of March 31, 2024. Foreclosures There were no residential loans in the process of foreclosure as of March 31, 2024 and December 31, 2023. Loans Purchased The Company purchased $27.7 million and $98.8 million of loans during the three months ended March 31, 2024 and 2023, respectively. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2024 | |
Variable Interest Entities. | |
Variable Interest Entities | Note 5: Variable Interest Entities 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 March 31, 2024 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 is considered as part of this ongoing assessment. The table below reflects the assets and liabilities of the VIEs as well as our maximum exposure to loss in connection with VIEs at March 31, 2024 and December 31, 2023. The Investments Bridge loans Securities Maximum Liabilities Assets in VIEs to VIEs for VIEs Exposure to Loss for VIEs ($ in thousands) March 31, 2024 Low-income housing tax credit investments $ 96,675 $ 136,197 $ — $ 232,872 $ 32,171 Debt funds 33,997 305,998 — 339,995 2,752 Off-balance-sheet REMIC trusts — — 1,163,191 1,163,191 — Total Unconsolidated VIEs $ 130,672 $ 442,195 $ 1,163,191 $ 1,736,058 $ 34,923 December 31, 2023 Low-income housing tax credit investments $ 118,741 $ 232,407 $ — $ 351,148 $ 35,099 Debt funds 33,221 86,416 — 119,637 2,752 Off-balance-sheet REMIC trusts — — 1,192,201 1,192,201 — Total Unconsolidated VIEs $ 151,962 $ 318,823 $ 1,192,201 $ 1,662,986 $ 37,851 |
Regulatory Matters
Regulatory Matters | 3 Months Ended |
Mar. 31, 2024 | |
Regulatory Matters | |
Regulatory Matters | Note 6: Regulatory Matters The Company, Merchants Bank and FMBI (prior to the January 26, 2024 sale of its branches and 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 and Merchants Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and Merchants Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and Merchants Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, and other factors. Furthermore, the Company’s and Merchants Bank’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 and Merchants Bank to maintain minimum amounts and ratios (set forth in the table below). Management believes, as of March 31, 2024 and December 31, 2023, that the Company and Merchants Bank met all capital adequacy requirements. As of March 31, 2024 and December 31, 2023, 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 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 or Merchants Bank’s category. FMBI was subject to these same requirements and guidelines prior to the sale of its branches and the merger of its remaining charter into Merchants Bank in January 2024. As of December 31, 2023, FMBI met all capital adequacy requirements (as set forth in the table below). The FDIC categorized FMBI as well capitalized at that time and there are no conditions or events since that notification that management believes would have changed that 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) March 31, 2024 Total capital (1) Company $ 1,858,348 11.7 % $ 1,662,302 10.5 % $ — N/A % Merchants Bank 1,801,020 11.4 % 1,660,561 10.5 % 1,581,487 10.0 Tier I capital (1) Company 1,768,553 11.2 % 1,345,673 8.5 % — N/A % Merchants Bank 1,711,225 10.8 % 1,344,264 8.5 % 1,265,189 8.0 Common Equity Tier I capital (1) Company 1,268,945 8.0 % 1,108,202 7.0 % — N/A % Merchants Bank 1,711,225 10.8 % 1,107,041 7.0 % 1,027,966 6.5 Tier I capital (1) Company 1,768,553 10.5 % 839,199 5.0 % — N/A % Merchants Bank 1,711,225 10.2 % 837,560 5.0 % 837,560 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, 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. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | Note 7: Derivative Financial Instruments The Company uses non-hedging, 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. The Company also entered into interest rate floor contracts with two warehouse loan customers to minimize interest rate risk. All changes in the fair market value of these options and floors have been included in other noninterest income. Credit Risk Management In March 2024, the Company entered into a contract as the buyer of credit protection through the credit derivative market. A credit default swap was purchased to manage credit risk associated with specific multifamily mortgage loans. Under the terms of the contract, the Company will be compensated for certain credit-related losses on a pool of multifamily mortgage loans. The protection seller has posted aggregate collateral of $76.1 million related to their obligations under the contract. There was no value associated with the credit default swap as of March 31, 2024, as there was no consideration provided to the seller. All changes in the fair market value of this instrument will be 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 unaudited condensed consolidated statements of income. The fair value of derivative instruments with a positive fair value are reported in other assets in the unaudited condensed consolidated balance sheets while derivative instruments with a negative fair value are reported in other liabilities in the unaudited condensed 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 March 31, 2024 and December 31, 2023. This table excludes the fair market value adjustment on loans associated with these derivatives. Notional Fair Value Amount Balance Sheet Location Asset Liability March 31, 2024 (In thousands) (In thousands) Interest rate lock commitments $ 31,888 Other assets/liabilities $ 174 $ 22 Forward contracts 33,375 Other assets/liabilities 9 110 Interest rate swaps 57,531 Other assets/liabilities 3,985 — Put options 734,130 Other assets 33,490 — Interest rate floors 1,229,918 Other assets 8,910 — Credit derivatives 76,092 Other liabilities — — $ 46,568 $ 132 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 The following table summarizes the periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income for the three months ended March 31, 2024 and 2023. Three Months Ended March 31, 2024 2023 (In thousands) Derivative gain (loss) included in gain on sale of loans: Interest rate lock commitments $ 16 $ 209 Forward contracts (includes pair-off settlements) 94 (96) Interest rates swaps 1,375 (1,336) Net gain (loss) $ 1,485 $ (1,223) Derivative gain (loss) included in other income: Put options 7,613 — Interest rate floors 2,334 — Net gain (loss) $ 9,947 $ — 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 swap arrangements. 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 offsetting 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 material 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 unaudited condensed consolidated balance sheets as follows: Notional Fair Value Amount Balance Sheet Location Asset Liability (In thousands) (In thousands) March 31, 2024 $ 657,572 Other assets/liabilities $ 15,259 $ 15,259 December 31, 2023 $ 607,169 Other assets/liabilities $ 12,426 $ 12,426 The gross gains and losses on these derivative assets and liabilities were recorded in other noninterest income and other noninterest expense in the unaudited condensed consolidated statements of income as follows: Three Months Ended March 31, 2024 2023 (In thousands) Gross swap gains $ 2,833 $ 580 Gross swap losses 2,833 580 Net swap gains (losses) $ — $ — The Company pledged $0 in collateral to secure its obligations under swap contracts at both March 31, 2024 and December 31, 2023. |
Disclosures about Fair Value of
Disclosures about Fair Value of Assets and Liabilities | 3 Months Ended |
Mar. 31, 2024 | |
Disclosures about Fair Value of Assets and Liabilities | |
Disclosures about Fair Value of Assets and Liabilities | Note 8: Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 Recurring Measurements The following tables present the fair value measurements of assets and liabilities recognized in the accompanying unaudited condensed consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2024 and December 31, 2023: Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Fair Assets Inputs Inputs Assets Value (Level 1) (Level 2) (Level 3) (In thousands) March 31, 2024 Mortgage loans in process of securitization $ 142,629 $ — $ 142,629 $ — Securities available for sale: Treasury notes 109,103 109,103 — — Federal agencies 238,501 — 238,501 — Mortgage-backed - Agency 13,044 — 13,044 — Mortgage-backed - Non-agency residential - fair value option 472,192 — — 472,192 Mortgage-backed - Agency - fair value option 228,448 — 228,448 — Loans held for sale 84,513 — 84,513 — Servicing rights 172,200 — — 172,200 Derivative assets: Interest rate lock commitments 174 — — 174 Forward contracts 9 — 9 — Interest rate swaps 3,985 — 3,985 — Interest rate swaps (back-to-back) 15,259 — 15,259 — Put options 33,490 — 10,514 22,976 Interest rate floors 8,910 — — 8,910 Derivative liabilities: Interest rate lock commitments 22 — — 22 Forward contracts 110 — 110 — Interest rate swaps (back-to-back) 15,259 — 15,259 — 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 — 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 unaudited condensed consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the three months ended March 31, 2024 and the year ended December 31, 2023. 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 certain interest rate floors is linked to securities available for sale that are accounted for using the fair value option. Other interest rate floors are linked to loans with warehouse customers. 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 by a third party. Credit Default Swap – The fair value of the credit default swap is linked to the value of its underlying mortgage loans. The Company estimates the fair value based on estimated discounted cash flows that are derived from inputs that are not readily observable and, thus, are classified as Level 3 on the hierarchy. These valuations are estimated by a third party. The fair value of the credit default swap was equal to the transaction price of zero at inception on March 27, 2024. The Company will subsequently measure the fair value of the credit default swap each reporting period. Level 3 Reconciliation The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying balance sheets using significant unobservable (Level 3) inputs: Three Months Ended March 31, 2024 2023 (In thousands) Servicing rights Balance, beginning of period $ 158,457 $ 146,248 Additions Originated servicing 2,166 2,173 Subtractions Paydowns (2,387) (1,698) Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model 13,964 (2,856) Balance, end of period $ 172,200 $ 143,867 Available for sale securities - Mortgage-backed - Non-Agency residential - fair value option Balance, beginning of period $ 485,500 $ — Paydowns (8,986) — Changes in fair value (4,322) — Balance, end of period $ 472,192 $ — Derivative Assets - put options Balance, beginning of period $ 18,654 $ — Changes in fair value 4,322 — Balance, end of period $ 22,976 $ — Derivative Assets - interest rate floors Balance, beginning of period $ 6,576 $ — Changes in fair value 2,334 — Balance, end of period $ 8,910 $ — Derivative Assets - interest rate lock commitments Balance, beginning of period $ 140 $ 28 Changes in fair value 34 190 Balance, end of period $ 174 $ 218 Derivative Liabilities - interest rate lock commitments Balance, beginning of period $ 4 $ 23 Changes in fair value 18 (19) Balance, end of period $ 22 $ 4 Nonrecurring Measurements The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2024 and December 31, 2023. Fair Value Measurements Using Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable Fair Identical Assets Inputs Inputs Assets Value (Level 1) (Level 2) (Level 3) (In thousands) March 31, 2024 Collateral dependent loans $ 420 $ — $ — $ 420 December 31, 2023 Collateral dependent loans $ 47,026 $ — $ — $ 47,026 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 unaudited condensed consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Collateral Dependent Loans, Net of ACL-Loans The estimated fair value of collateral dependent loans is based on the appraised fair value of the collateral, less estimated cost to sell. Collateral dependent loans are classified within Level 3 of the fair value hierarchy. The Company considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral dependent and subsequently as deemed necessary by the Chief Credit Officer’s (“CCO”) office. Appraisals and evaluations are reviewed for accuracy and consistency by the CCO’s office. Appraisers are selected from the list of approved appraisers maintained by management. The appraised values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. These discounts and estimates are developed by the CCO’s office by comparison to historical results. Unobservable (Level 3) Inputs: The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than goodwill. Valuation Weighted Fair Value Technique Unobservable Inputs Range Average (In thousands) At March 31, 2024: Available for sale securities - Mortgage-backed - Non-Agency residential - fair value option $ 472,192 Discounted cash flow Market credit spread 2% 2% Collateral dependent loans $ 420 Market comparable properties Marketability discount 24% - 27% 26% Servicing rights - Multi-family $ 135,314 Discounted cash flow Discount rate 8% - 13% 9% Constant prepayment rate 0% - 73% 7% Servicing rights - Single-family $ 31,898 Discounted cash flow Discount rate 10% - 11% 10% Constant prepayment rate 6% - 15% 7% Servicing rights - SBA $ 4,988 Discounted cash flow Discount rate 16% 16% Constant prepayment rate 3% - 14% 9% Derivative assets: Interest rate lock commitments $ 174 Discounted cash flow Loan closing rates 50% - 99% 82% Put options $ 22,976 Intrinsic option value Market credit spread 2% 2% Interest rate floors $ 8,910 Discounted cash flow Discount rate 6%-8% 7% Derivative liabilities - interest rate lock commitments $ 22 Discounted cash flow Loan closing rates 50% - 99% 82% 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% 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, Loans, and Related Derivative 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 interest rate floor derivatives associated with certain securities available for sale and loans 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 March 31, 2024 and December 31, 2023. Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Fair Assets Inputs Inputs Assets Value Value (Level 1) (Level 2) (Level 3) (In thousands) March 31, 2024 Financial assets: Cash and cash equivalents $ 508,755 $ 508,755 $ 508,755 $ — $ — Securities purchased under agreements to resell 3,329 3,329 — 3,329 — Securities held to maturity 1,175,167 1,176,178 — 466,573 709,605 FHLB stock 64,215 64,215 — 64,215 — Loans held for sale 3,418,618 3,418,618 — 3,418,618 — Loans receivable, net 10,690,513 10,646,477 — — 10,646,477 Interest receivable 90,303 90,303 — 90,303 — Financial liabilities: Deposits 13,975,661 13,973,624 8,018,126 5,955,498 — Short-term subordinated debt 64,922 64,922 — 64,922 — FHLB advances 1,426,299 1,425,888 — 1,425,888 — Other borrowing 232,934 232,934 — 232,934 — Credit linked notes 111,830 111,828 — 111,828 — Interest payable 51,790 51,790 — 51,790 — 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 — |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases. | |
Leases | Note 9: Leases The Company has operating leases for various locations with terms ranging from one The Company has operating lease right-of-use assets of $8.2 million and $10.1 million as of March 31, 2024 and December 31, 2023, respectively, and operating lease right-of-use liabilities of $9.4 million and $11.3 million as of March 31, 2024 and December 31, 2023, respectively. Unaudited condensed consolidated balance sheet, income statement and cash flow detail regarding operating leases follows: March 31, 2024 December 31, 2023 Balance Sheet (In thousands) (In thousands) Operating lease right-of-of use asset (in other assets) $ 8,211 $ 10,060 Operating lease liability (in other liabilities) 9,386 11,251 Weighted average remaining lease term (years) 4.8 6.0 Weighted average discount rate 3.19% 2.89% Maturities of lease liabilities: One year or less $ 2,359 $ 2,441 Year two 2,073 2,064 Year three 1,951 2,100 Year four 1,805 2,046 Year five 1,123 1,438 Thereafter 824 2,128 Total future minimum lease payments 10,135 12,217 Less: imputed interest 749 966 Total $ 9,386 $ 11,251 Three Months Ended Three Months Ended March 31, 2024 March 31, 2023 Income Statement (In thousands) (In thousands) Components of lease expense: Operating lease cost (in occupancy and equipment expense) $ 604 $ 583 Three Months Ended Three Months Ended March 31, 2024 March 31, 2023 Cash Flow Statement (In thousands) (In thousands) Supplemental cash flow information: Operating cash flows from operating leases $ 594 $ 426 |
Deposits
Deposits | 3 Months Ended |
Mar. 31, 2024 | |
Deposits | |
Deposits | Note 10: Deposits Deposits were comprised of the following at March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 (In thousands) Noninterest-bearing deposits Demand deposits $ 319,872 $ 520,070 Total noninterest-bearing deposits 319,872 520,070 Interest-bearing deposits Demand deposits $ 4,680,405 $ 5,381,067 Savings deposits 3,017,849 2,992,921 Certificates of deposit 5,957,535 5,167,402 Total interest-bearing deposits 13,655,789 13,541,390 Total deposits $ 13,975,661 $ 14,061,460 Maturities for certificates of deposit are as follows: March 31, 2024 (In thousands) Due within one year $ 5,865,446 Due in one year to two years 76,281 Due in two years to three years 15,808 Due in three years to four years — Due in four years to five years — Due in five years to six years — $ 5,957,535 Brokered deposit amounts at March 31, 2024 and December 31, 2023, were as follows: March 31, December 31, 2024 2023 (In thousands) Brokered certificates of deposit $ 5,351,397 $ 4,465,825 Brokered savings deposits 1,338 589 Brokered deposit on demand accounts 400,159 1,504,230 $ 5,752,894 $ 5,970,644 |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2024 | |
Borrowings | |
Borrowings | Note 11: Borrowings Borrowings were comprised of the following at March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 (In thousands) Federal Reserve discount window borrowings $ 50,000 $ — Short-term subordinated debt 64,922 64,922 FHLB advances 1,426,299 771,392 American Financial Exchange borrowing 175,000 — Credit linked notes, net of debt discount 111,830 119,879 Other borrowings 7,934 7,934 Total borrowings $ 1,835,985 $ 964,127 On March 22, 2024, the Company entered into a new variable rate debt agreement with the FHLB for an advance that has put and call options attached to it. The balance of the advance was $500.0 million as of March 31, 2024, and matures on June 20, 2024. The variable interest rate is based on the Federal Funds effective rate, plus 10 basis points, which was 5.43% as of March 31, 2024. The FHLB has an option to cancel the agreement 60 days after the initial execution date and the Company has an option to cancel the agreement at any time, with one day’s notice. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share | |
Earnings Per Share | Note 12: Earnings Per Share Earnings per share were computed as follows: Three Month Periods Ended March 31, 2024 2023 Weighted- Per Weighted- Per Net Average Share Net Average Share Income Shares Amount Income Shares Amount (In thousands, except share data) Net income $ 87,054 $ 54,955 Dividends on preferred stock (8,667) (8,667) Net income allocated to common shareholders $ 78,387 $ 46,288 Basic earnings per share 43,305,985 $ 1.81 43,179,604 $ 1.07 Effect of dilutive securities-restricted stock awards 160,662 111,175 Diluted earnings per share 43,466,647 $ 1.80 43,290,779 $ 1.07 |
Share-Based Payment Plans
Share-Based Payment Plans | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Plans | |
Share-Based Payment Plans | Note 13: Share-Based Payment Plans Equity-based incentive awards for Company officers are currently issued pursuant to the 2017 Equity Incentive Plan (the “2017 Incentive Plan”). The Company issued During 2018, the Compensation Committee of the Board of Directors approved a plan for non-executive directors to receive a portion of their annual retainer fees in the form of shares of common stock. In November 2023, the Board of Directors amended the plan for nonexecutive directors to receive a portion of their annual fees, issued quarterly, in the form of restricted common stock equal to $70,000 per member, rounded up to the nearest whole share, to be effective as of January 1, 2024. Accordingly, there were 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 $287,000 and $267,000 for the three months ended March 31, 2024 and 2023, respectively. The Company contributed 23,414 shares and 33,293 shares to the ESOP for the three months ended March 31, 2024 and 2023, respectively. |
Preferred Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2024 | |
Preferred Stock. | |
Preferred Stock | Note 14: Preferred Stock Public Offerings of Preferred Stock: Series A The Company redeemed all outstanding shares of the Series A Preferred Stock on April 1, 2024 at a price equal to the liquidation preference of $25.00 per share, using cash on hand. As of the redemption date, the Series A Preferred Stock did not have any accrued but unpaid dividends. 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 th 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. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2024 | |
Segment Information | |
Segment Information | Note 15: Segment Information The Company’s business segments are defined as Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The reportable business segments are consistent with the internal reporting and evaluation of the principal lines of business of the Company. The Multi-family Mortgage Banking segment originates and services government sponsored mortgages for multi-family and healthcare facilities. It is also a fully integrated syndicator of low-income housing tax credit and debt funds. The Mortgage Warehousing segment funds agency eligible residential loans from the date of origination or purchase, until the date of sale in the secondary market, as well as commercial loans to non-depository financial institutions. The Banking segment provides a wide range of financial products and services to consumers and businesses, including retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and Small Business Administration (“SBA”) lending. 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 three months ended March 31, 2024 and 2023. Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total Three Months Ended March 31, 2024 (In thousands) Interest income $ 1,746 $ 84,901 $ 224,288 $ 3,238 $ 314,173 Interest expense 20 56,140 131,723 (766) 187,117 Net interest income 1,726 28,761 92,565 4,004 127,056 Provision for credit losses — 940 3,786 — 4,726 Net interest income after provision for credit losses 1,726 27,821 88,779 4,004 122,330 Noninterest income 40,467 3,317 429 (3,339) 40,874 Noninterest expense 19,571 4,798 15,578 8,965 48,912 Income (loss) before income taxes 22,622 26,340 73,630 (8,300) 114,292 Income taxes 6,013 6,150 17,205 (2,130) 27,238 Net income (loss) $ 16,609 $ 20,190 $ 56,425 $ (6,170) $ 87,054 Total assets $ 416,454 $ 5,369,299 $ 11,760,028 $ 276,795 $ 17,822,576 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total Three Months Ended March 31, 2023 (In thousands) Interest income $ 1,106 $ 42,318 $ 166,726 $ 1,144 $ 211,294 Interest expense — 27,794 84,526 (1,719) 110,601 Net interest income 1,106 14,524 82,200 2,863 100,693 Provision for credit losses — 1,364 5,503 — 6,867 Net interest income after provision for credit losses 1,106 13,160 76,697 2,863 93,826 Noninterest income 16,597 1,033 (1,189) (2,177) 14,264 Noninterest expense 14,631 2,755 10,170 7,216 34,772 Income (loss) before income taxes 3,072 11,438 65,338 (6,530) 73,318 Income taxes 1,106 2,797 16,031 (1,571) 18,363 Net income (loss) $ 1,966 $ 8,641 $ 49,307 $ (4,959) $ 54,955 Total assets $ 341,487 $ 3,318,491 $ 10,430,293 $ 150,695 $ 14,240,966 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2024 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Note 16: 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. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events | |
Subsequent Events | Note 17: Subsequent Events The Company redeemed all outstanding shares of the Series A Preferred Stock on April 1, 2024 at a price equal to the liquidation preference of $25.00 per share, or $52 million, using cash on hand. As of March 31, 2024, the cash to redeem the shares was delivered to the Company’s transfer agent, resulting in a prepaid asset reported in other assets. As of the redemption date the Series A Preferred Stock did not have any accrued, but unpaid dividends. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Basis of Presentation | |
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 The unaudited condensed consolidated financial statements as of and for the period ended March 31, 2024 and 2023 include results from the Company, and its wholly owned subsidiaries, Merchants Bank, FMBI (until its branches were sold and its bank charter merged into Merchants Bank on January 26, 2024) and MAM. Also included are Merchants Bank’s primary operating subsidiaries, MCC, MCS and MCI, as well as all direct and indirectly owned subsidiaries owned by Merchants Bancorp. During 2022, Merchants Foundation, Inc., a nonprofit corporation, was incorporated and its results are consolidated with the Company’s consolidated financial statements in all periods presented. 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 (“ASU”) 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 March 31, 2024 and 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 5: Variable Interest Entities (VIEs) All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses on loans, servicing rights and fair values of financial instruments. |
Significant Accounting Policies | Significant Accounting Policies The significant accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. |
Restricted Cash | Restricted Cash 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. The balance of the notes as of March 31, 2024 was $115.6 million. As of March 31, 2024, there was $39.2 million in restricted cash. Also see Note 11: Borrowings. |
Investment Securities (Tables)
Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Investment Securities | |
Schedule of amortized cost and approximate fair values, together with gross unrealized gains and losses | March 31, 2024 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities available for sale: Treasury notes $ 109,146 $ 15 $ 58 $ 109,103 Federal agencies 240,000 — 1,499 238,501 Mortgage-backed - Government Agency ("Agency") (2) - multi-family 13,044 — — 13,044 Mortgage-backed - Non-Agency residential - fair value option (1) 472,192 — — 472,192 Mortgage-backed - Agency - residential - fair value option (1) 228,448 — — 228,448 Total securities available for sale $ 1,062,830 $ 15 $ 1,557 $ 1,061,288 Securities held to maturity: Mortgage-backed - Non-Agency - multi-family $ 710,024 $ — $ 419 $ 709,605 Mortgage-backed - Non-Agency - residential 453,167 2,385 87 455,465 Mortgage-backed - Agency 11,976 — 868 11,108 Total securities held to maturity $ 1,175,167 $ 2,385 $ 1,374 $ 1,176,178 (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 Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”), and Government National Mortgage Association (“Ginnie Mae”). December 31, 2023 Gross Gross Amortized Unrealized Unrealized Fair Cost 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 (1) 485,500 — — 485,500 Mortgage-backed - Agency - residential - fair value option (1) 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 Ginnie Mae. |
Schedule of amortized cost and fair value of available-for-sale securities and held to maturity securities by contractual maturity | March 31, 2024 December 31, 2023 Amortized Fair Amortized Fair Cost Value Cost Value Securities available for sale: (In thousands) Within one year $ 209,146 $ 207,796 $ 308,474 $ 305,406 After one through five years 140,000 139,808 71,518 71,317 349,146 347,604 379,992 376,723 Mortgage-backed - Agency 13,044 13,044 14,465 14,467 Mortgage-backed - Non-Agency residential - fair value option 472,192 472,192 485,500 485,500 Mortgage-backed - Agency - residential - fair value option 228,448 228,448 236,997 236,997 $ 1,062,830 $ 1,061,288 $ 1,116,954 $ 1,113,687 Securities held to maturity: Mortgage-backed - Non-Agency - multi-family $ 710,024 $ 709,605 $ 719,662 $ 719,247 Mortgage-backed - Non-Agency - residential 453,167 455,465 472,539 473,094 Mortgage-backed - Agency 11,976 11,108 12,016 11,194 $ 1,175,167 $ 1,176,178 $ 1,204,217 $ 1,203,535 |
Schedule of gross unrealized losses and fair value of investments with unrealized losses have been in continuous | March 31, 2024 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 $ 3,092 $ 1 $ 26,938 $ 57 $ 30,030 $ 58 Federal agencies 139,808 192 98,693 1,307 238,501 1,499 $ 142,900 $ 193 $ 125,631 $ 1,364 $ 268,531 $ 1,557 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 |
Loans and Allowance for Credi_2
Loans and Allowance for Credit Losses on Loans (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Loans and Allowance for Credit Losses on Loans | |
Summary of loans | March 31, December 31, 2024 2023 (In thousands) Mortgage warehouse repurchase agreements $ 1,142,994 $ 752,468 Residential real estate (1) 1,321,300 1,324,305 Multi-family financing 4,096,606 4,006,160 Healthcare financing 2,464,685 2,356,689 Commercial and commercial real estate (2)(3) 1,666,751 1,643,081 Agricultural production and real estate 65,977 103,150 Consumer and margin loans 7,912 13,700 10,766,225 10,199,553 Less: ACL-Loans 75,712 71,752 Loans Receivable $ 10,690,513 $ 10,127,801 (1) Includes $1.2 billion and $1.2 billion of All-in-One© first-lien home equity lines of credit at March 31, 2024 and December 31, 2023, respectively. (2) Includes $1.1 billion and $1.1 billion of revolving lines of credit collateralized primarily by single-family mortgage servicing rights as of March 31, 2024 and December 31, 2023, respectively. (3) Includes only $6.8 million and $8.4 million of non-owner occupied commercial real estate as of March 31, 2024 and December 31, 202 3, respectively. |
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 |
Summary of the activity in the ACL-Loans by portfolio segment | For the Three Months Ended March 31, 2024 MTG WHRA RES RE MF FIN HC FIN CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) ACL-Loans Balance, beginning of period $ 2,070 $ 7,323 $ 26,874 $ 22,454 $ 12,243 $ 619 $ 169 $ 71,752 FMBI's ACL for loans sold — (55) (186) (2) (92) (246) (12) (593) Provision for credit losses 952 (363) 1,976 2,135 763 77 (63) 5,477 Loans charged to the allowance — — — — (925) — — (925) Recoveries of loans previously charged-off — — — — 1 — — 1 Balance, end of period $ 3,022 $ 6,905 $ 28,664 $ 24,587 $ 11,990 $ 450 $ 94 $ 75,712 For the Three Months Ended March 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 415 349 3,070 1,871 2,149 (22) (15) 7,817 Loans charged to the allowance — — — — — — — — Recoveries of loans previously charged-off — — — — 7 — — 7 Balance, end of period $ 1,664 $ 7,378 $ 19,851 $ 11,753 $ 10,482 $ 543 $ 167 $ 51,838 |
Summary of activity in the allowance for loans losses by loan portfolio | 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 |
Schedule of amortized cost basis and ACL-Loans allocated for collateral dependent loans | March 31, 2024 Real Estate Accounts Receivable / Equipment Other Total ACL-Loans Allocation (In thousands) RES RE $ 1,272 $ — $ — $ 1,272 $ 8 MF FIN 53,200 — — 53,200 581 HC FIN 63,283 — — 63,283 5,652 CML & CRE 168 2,628 2,657 5,453 1,780 AG & AGRE 147 — — 147 1 CON & MAR — — — — — Total collateral dependent loans $ 118,070 $ 2,628 $ 2,657 $ 123,355 $ 8,022 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 |
Schedule of credit risk profile of loan portfolio | March 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans TOTAL (In thousands) MTG WHRA Pass $ — $ — $ — $ — $ — $ — $ 1,142,994 $ 1,142,994 Total $ — $ — $ — $ — $ — $ — $ 1,142,994 $ 1,142,994 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — RES RE Pass $ 1,780 $ 32,353 $ 9,793 $ 6,175 $ 21,315 $ 7,400 $ 1,240,994 $ 1,319,810 Special Mention — — — — — 218 — 218 Substandard — — — — — — 1,272 1,272 Total $ 1,780 $ 32,353 $ 9,793 $ 6,175 $ 21,315 $ 7,618 $ 1,242,266 $ 1,321,300 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — MF FIN Pass $ 298,730 $ 957,019 $ 734,071 $ 114,353 $ 9,070 $ 34,587 $ 1,731,470 $ 3,879,300 Special Mention 8,000 96,900 28,559 8,400 — 1,470 20,777 164,106 Substandard — 11,667 28,360 6,534 — — 6,639 53,200 Total $ 306,730 $ 1,065,586 $ 790,990 $ 129,287 $ 9,070 $ 36,057 $ 1,758,886 $ 4,096,606 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — HC FIN Pass $ 258,604 $ 626,388 $ 936,880 $ 98,815 $ — $ 14,459 $ 398,904 $ 2,334,050 Special Mention 24,319 20,900 9,502 — — — 12,631 67,352 Substandard — 25,600 — 28,783 — — 8,900 63,283 Total $ 282,923 $ 672,888 $ 946,382 $ 127,598 $ — $ 14,459 $ 420,435 $ 2,464,685 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — CML & CRE Pass $ 4,469 $ 54,002 $ 116,479 $ 71,824 $ 19,203 $ 34,169 $ 1,360,706 $ 1,660,852 Special Mention — — — 289 157 — — 446 Substandard — — 92 776 850 60 3,675 5,453 Total $ 4,469 $ 54,002 $ 116,571 $ 72,889 $ 20,210 $ 34,229 $ 1,364,381 $ 1,666,751 Charge-offs $ — $ — $ — $ 925 $ — $ — $ — $ 925 AG & AGRE Pass $ 7,833 $ 7,875 $ 5,103 $ 2,722 $ 8,566 $ 15,515 $ 18,216 $ 65,830 Substandard — — — — — 147 — 147 Total $ 7,833 $ 7,875 $ 5,103 $ 2,722 $ 8,566 $ 15,662 $ 18,216 $ 65,977 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — CON & MAR Pass $ — $ 109 $ 28 $ 25 $ 2 $ 4,268 $ 3,480 $ 7,912 Total $ — $ 109 $ 28 $ 25 $ 2 $ 4,268 $ 3,480 $ 7,912 Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Total Pass $ 571,416 $ 1,677,746 $ 1,802,354 $ 293,914 $ 58,156 $ 110,398 $ 5,896,764 $ 10,410,748 Total Special Mention $ 32,319 $ 117,800 $ 38,061 $ 8,689 $ 157 $ 1,688 $ 33,408 $ 232,122 Total Substandard $ — $ 37,267 $ 28,452 $ 36,093 $ 850 $ 207 $ 20,486 $ 123,355 Total Doubtful $ — $ — $ — $ — $ — $ — $ — $ — Total Loans $ 603,735 $ 1,832,813 $ 1,868,867 $ 338,696 $ 59,163 $ 112,293 $ 5,950,658 $ 10,766,225 Total Charge-offs $ — $ — $ — $ 925 $ — $ — $ — $ 925 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 |
Schedule of aging analysis of the recorded investment in loans | March 31, 2024 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHRA $ — $ — $ — $ — $ 1,142,994 $ 1,142,994 RES RE 4,588 682 218 5,488 1,315,812 1,321,300 MF FIN 24,870 — 78,910 103,780 3,992,826 4,096,606 HC FIN — 25,600 48,733 74,333 2,390,352 2,464,685 CML & CRE 1,922 — 3,006 4,928 1,661,823 1,666,751 AG & AGRE 44 10 159 213 65,764 65,977 CON & MAR — — — — 7,912 7,912 $ 31,424 $ 26,292 $ 131,026 $ 188,742 $ 10,577,483 $ 10,766,225 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 |
Schedule of nonaccrual loans and loans past due 90 days or more and still accruing | March 31, December 31, 2024 2023 Total Loans > Total Loans > 90 Days & 90 Days & Nonaccrual Accruing Nonaccrual Accruing (In thousands) RES RE $ 760 $ 218 $ 1,486 $ 894 MF FIN 46,248 32,662 39,608 — HC FIN 28,783 19,950 28,783 7,216 CML & CRE 2,866 140 3,820 43 AG & AGRE 147 12 147 — CON & MAR — — 3 15 $ 78,804 $ 52,982 $ 73,847 $ 8,168 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Variable Interest Entities. | |
Schedule of assets and liabilities of the VIEs as well as maximum exposure to loss in connection with VIEs | Investments Bridge loans Securities Maximum Liabilities Assets in VIEs to VIEs for VIEs Exposure to Loss for VIEs ($ in thousands) March 31, 2024 Low-income housing tax credit investments $ 96,675 $ 136,197 $ — $ 232,872 $ 32,171 Debt funds 33,997 305,998 — 339,995 2,752 Off-balance-sheet REMIC trusts — — 1,163,191 1,163,191 — Total Unconsolidated VIEs $ 130,672 $ 442,195 $ 1,163,191 $ 1,736,058 $ 34,923 December 31, 2023 Low-income housing tax credit investments $ 118,741 $ 232,407 $ — $ 351,148 $ 35,099 Debt funds 33,221 86,416 — 119,637 2,752 Off-balance-sheet REMIC trusts — — 1,192,201 1,192,201 — Total Unconsolidated VIEs $ 151,962 $ 318,823 $ 1,192,201 $ 1,662,986 $ 37,851 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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) March 31, 2024 Total capital (1) Company $ 1,858,348 11.7 % $ 1,662,302 10.5 % $ — N/A % Merchants Bank 1,801,020 11.4 % 1,660,561 10.5 % 1,581,487 10.0 Tier I capital (1) Company 1,768,553 11.2 % 1,345,673 8.5 % — N/A % Merchants Bank 1,711,225 10.8 % 1,344,264 8.5 % 1,265,189 8.0 Common Equity Tier I capital (1) Company 1,268,945 8.0 % 1,108,202 7.0 % — N/A % Merchants Bank 1,711,225 10.8 % 1,107,041 7.0 % 1,027,966 6.5 Tier I capital (1) Company 1,768,553 10.5 % 839,199 5.0 % — N/A % Merchants Bank 1,711,225 10.2 % 837,560 5.0 % 837,560 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, 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. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Financial Instruments | |
Summary of notional amount and fair value of derivative assets and liabilities | Notional Fair Value Amount Balance Sheet Location Asset Liability March 31, 2024 (In thousands) (In thousands) Interest rate lock commitments $ 31,888 Other assets/liabilities $ 174 $ 22 Forward contracts 33,375 Other assets/liabilities 9 110 Interest rate swaps 57,531 Other assets/liabilities 3,985 — Put options 734,130 Other assets 33,490 — Interest rate floors 1,229,918 Other assets 8,910 — Credit derivatives 76,092 Other liabilities — — $ 46,568 $ 132 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 |
Summarizes the periodic changes in the fair value of the derivative financial instruments on the consolidated statements of income | Three Months Ended March 31, 2024 2023 (In thousands) Derivative gain (loss) included in gain on sale of loans: Interest rate lock commitments $ 16 $ 209 Forward contracts (includes pair-off settlements) 94 (96) Interest rates swaps 1,375 (1,336) Net gain (loss) $ 1,485 $ (1,223) Derivative gain (loss) included in other income: Put options 7,613 — Interest rate floors 2,334 — Net gain (loss) $ 9,947 $ — |
Interest rate swaps | |
Derivative Financial Instruments | |
Summary of notional amount and fair value of derivative assets and liabilities | Notional Fair Value Amount Balance Sheet Location Asset Liability (In thousands) (In thousands) March 31, 2024 $ 657,572 Other assets/liabilities $ 15,259 $ 15,259 December 31, 2023 $ 607,169 Other assets/liabilities $ 12,426 $ 12,426 |
Summarizes the periodic changes in the fair value of the derivative financial instruments on the consolidated statements of income | Three Months Ended March 31, 2024 2023 (In thousands) Gross swap gains $ 2,833 $ 580 Gross swap losses 2,833 580 Net swap gains (losses) $ — $ — |
Disclosures about Fair Value _2
Disclosures about Fair Value of Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Disclosures about Fair Value of Assets and Liabilities | |
Schedule of fair value measurement of assets measured at fair value on recurring basis | Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Fair Assets Inputs Inputs Assets Value (Level 1) (Level 2) (Level 3) (In thousands) March 31, 2024 Mortgage loans in process of securitization $ 142,629 $ — $ 142,629 $ — Securities available for sale: Treasury notes 109,103 109,103 — — Federal agencies 238,501 — 238,501 — Mortgage-backed - Agency 13,044 — 13,044 — Mortgage-backed - Non-agency residential - fair value option 472,192 — — 472,192 Mortgage-backed - Agency - fair value option 228,448 — 228,448 — Loans held for sale 84,513 — 84,513 — Servicing rights 172,200 — — 172,200 Derivative assets: Interest rate lock commitments 174 — — 174 Forward contracts 9 — 9 — Interest rate swaps 3,985 — 3,985 — Interest rate swaps (back-to-back) 15,259 — 15,259 — Put options 33,490 — 10,514 22,976 Interest rate floors 8,910 — — 8,910 Derivative liabilities: Interest rate lock commitments 22 — — 22 Forward contracts 110 — 110 — Interest rate swaps (back-to-back) 15,259 — 15,259 — 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 — |
Schedule of Level 3 reconciliation of recurring fair value measurements | Three Months Ended March 31, 2024 2023 (In thousands) Servicing rights Balance, beginning of period $ 158,457 $ 146,248 Additions Originated servicing 2,166 2,173 Subtractions Paydowns (2,387) (1,698) Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model 13,964 (2,856) Balance, end of period $ 172,200 $ 143,867 Available for sale securities - Mortgage-backed - Non-Agency residential - fair value option Balance, beginning of period $ 485,500 $ — Paydowns (8,986) — Changes in fair value (4,322) — Balance, end of period $ 472,192 $ — Derivative Assets - put options Balance, beginning of period $ 18,654 $ — Changes in fair value 4,322 — Balance, end of period $ 22,976 $ — Derivative Assets - interest rate floors Balance, beginning of period $ 6,576 $ — Changes in fair value 2,334 — Balance, end of period $ 8,910 $ — Derivative Assets - interest rate lock commitments Balance, beginning of period $ 140 $ 28 Changes in fair value 34 190 Balance, end of period $ 174 $ 218 Derivative Liabilities - interest rate lock commitments Balance, beginning of period $ 4 $ 23 Changes in fair value 18 (19) Balance, end of period $ 22 $ 4 |
Schedule of fair value measurement of assets and liabilities measured at fair value on nonrecurring basis | Fair Value Measurements Using Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable Fair Identical Assets Inputs Inputs Assets Value (Level 1) (Level 2) (Level 3) (In thousands) March 31, 2024 Collateral dependent loans $ 420 $ — $ — $ 420 December 31, 2023 Collateral dependent loans $ 47,026 $ — $ — $ 47,026 |
Schedule of quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than goodwill | Valuation Weighted Fair Value Technique Unobservable Inputs Range Average (In thousands) At March 31, 2024: Available for sale securities - Mortgage-backed - Non-Agency residential - fair value option $ 472,192 Discounted cash flow Market credit spread 2% 2% Collateral dependent loans $ 420 Market comparable properties Marketability discount 24% - 27% 26% Servicing rights - Multi-family $ 135,314 Discounted cash flow Discount rate 8% - 13% 9% Constant prepayment rate 0% - 73% 7% Servicing rights - Single-family $ 31,898 Discounted cash flow Discount rate 10% - 11% 10% Constant prepayment rate 6% - 15% 7% Servicing rights - SBA $ 4,988 Discounted cash flow Discount rate 16% 16% Constant prepayment rate 3% - 14% 9% Derivative assets: Interest rate lock commitments $ 174 Discounted cash flow Loan closing rates 50% - 99% 82% Put options $ 22,976 Intrinsic option value Market credit spread 2% 2% Interest rate floors $ 8,910 Discounted cash flow Discount rate 6%-8% 7% Derivative liabilities - interest rate lock commitments $ 22 Discounted cash flow Loan closing rates 50% - 99% 82% 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% |
Schedule of carrying amount and estimated fair value of financial instruments | Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Fair Assets Inputs Inputs Assets Value Value (Level 1) (Level 2) (Level 3) (In thousands) March 31, 2024 Financial assets: Cash and cash equivalents $ 508,755 $ 508,755 $ 508,755 $ — $ — Securities purchased under agreements to resell 3,329 3,329 — 3,329 — Securities held to maturity 1,175,167 1,176,178 — 466,573 709,605 FHLB stock 64,215 64,215 — 64,215 — Loans held for sale 3,418,618 3,418,618 — 3,418,618 — Loans receivable, net 10,690,513 10,646,477 — — 10,646,477 Interest receivable 90,303 90,303 — 90,303 — Financial liabilities: Deposits 13,975,661 13,973,624 8,018,126 5,955,498 — Short-term subordinated debt 64,922 64,922 — 64,922 — FHLB advances 1,426,299 1,425,888 — 1,425,888 — Other borrowing 232,934 232,934 — 232,934 — Credit linked notes 111,830 111,828 — 111,828 — Interest payable 51,790 51,790 — 51,790 — 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 — |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases. | |
Schedule of balance sheet, income statement and cash flow detail regarding operating leases | March 31, 2024 December 31, 2023 Balance Sheet (In thousands) (In thousands) Operating lease right-of-of use asset (in other assets) $ 8,211 $ 10,060 Operating lease liability (in other liabilities) 9,386 11,251 Weighted average remaining lease term (years) 4.8 6.0 Weighted average discount rate 3.19% 2.89% Maturities of lease liabilities: One year or less $ 2,359 $ 2,441 Year two 2,073 2,064 Year three 1,951 2,100 Year four 1,805 2,046 Year five 1,123 1,438 Thereafter 824 2,128 Total future minimum lease payments 10,135 12,217 Less: imputed interest 749 966 Total $ 9,386 $ 11,251 Three Months Ended Three Months Ended March 31, 2024 March 31, 2023 Income Statement (In thousands) (In thousands) Components of lease expense: Operating lease cost (in occupancy and equipment expense) $ 604 $ 583 Three Months Ended Three Months Ended March 31, 2024 March 31, 2023 Cash Flow Statement (In thousands) (In thousands) Supplemental cash flow information: Operating cash flows from operating leases $ 594 $ 426 |
Deposits (Tables)
Deposits (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Deposits | |
Schedule of deposits | March 31, December 31, 2024 2023 (In thousands) Noninterest-bearing deposits Demand deposits $ 319,872 $ 520,070 Total noninterest-bearing deposits 319,872 520,070 Interest-bearing deposits Demand deposits $ 4,680,405 $ 5,381,067 Savings deposits 3,017,849 2,992,921 Certificates of deposit 5,957,535 5,167,402 Total interest-bearing deposits 13,655,789 13,541,390 Total deposits $ 13,975,661 $ 14,061,460 |
Schedule of maturities of time deposits | March 31, 2024 (In thousands) Due within one year $ 5,865,446 Due in one year to two years 76,281 Due in two years to three years 15,808 Due in three years to four years — Due in four years to five years — Due in five years to six years — $ 5,957,535 |
Schedule of brokered deposit amounts | March 31, December 31, 2024 2023 (In thousands) Brokered certificates of deposit $ 5,351,397 $ 4,465,825 Brokered savings deposits 1,338 589 Brokered deposit on demand accounts 400,159 1,504,230 $ 5,752,894 $ 5,970,644 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Borrowings | |
Schedule of borrowings | March 31, December 31, 2024 2023 (In thousands) Federal Reserve discount window borrowings $ 50,000 $ — Short-term subordinated debt 64,922 64,922 FHLB advances 1,426,299 771,392 American Financial Exchange borrowing 175,000 — Credit linked notes, net of debt discount 111,830 119,879 Other borrowings 7,934 7,934 Total borrowings $ 1,835,985 $ 964,127 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share | |
Schedule of computation of earnings per share | Three Month Periods Ended March 31, 2024 2023 Weighted- Per Weighted- Per Net Average Share Net Average Share Income Shares Amount Income Shares Amount (In thousands, except share data) Net income $ 87,054 $ 54,955 Dividends on preferred stock (8,667) (8,667) Net income allocated to common shareholders $ 78,387 $ 46,288 Basic earnings per share 43,305,985 $ 1.81 43,179,604 $ 1.07 Effect of dilutive securities-restricted stock awards 160,662 111,175 Diluted earnings per share 43,466,647 $ 1.80 43,290,779 $ 1.07 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Information | |
Schedule of business segment financial information | Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total Three Months Ended March 31, 2024 (In thousands) Interest income $ 1,746 $ 84,901 $ 224,288 $ 3,238 $ 314,173 Interest expense 20 56,140 131,723 (766) 187,117 Net interest income 1,726 28,761 92,565 4,004 127,056 Provision for credit losses — 940 3,786 — 4,726 Net interest income after provision for credit losses 1,726 27,821 88,779 4,004 122,330 Noninterest income 40,467 3,317 429 (3,339) 40,874 Noninterest expense 19,571 4,798 15,578 8,965 48,912 Income (loss) before income taxes 22,622 26,340 73,630 (8,300) 114,292 Income taxes 6,013 6,150 17,205 (2,130) 27,238 Net income (loss) $ 16,609 $ 20,190 $ 56,425 $ (6,170) $ 87,054 Total assets $ 416,454 $ 5,369,299 $ 11,760,028 $ 276,795 $ 17,822,576 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total Three Months Ended March 31, 2023 (In thousands) Interest income $ 1,106 $ 42,318 $ 166,726 $ 1,144 $ 211,294 Interest expense — 27,794 84,526 (1,719) 110,601 Net interest income 1,106 14,524 82,200 2,863 100,693 Provision for credit losses — 1,364 5,503 — 6,867 Net interest income after provision for credit losses 1,106 13,160 76,697 2,863 93,826 Noninterest income 16,597 1,033 (1,189) (2,177) 14,264 Noninterest expense 14,631 2,755 10,170 7,216 34,772 Income (loss) before income taxes 3,072 11,438 65,338 (6,530) 73,318 Income taxes 1,106 2,797 16,031 (1,571) 18,363 Net income (loss) $ 1,966 $ 8,641 $ 49,307 $ (4,959) $ 54,955 Total assets $ 341,487 $ 3,318,491 $ 10,430,293 $ 150,695 $ 14,240,966 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) | 3 Months Ended | |
Jan. 26, 2024 | Mar. 31, 2024 | |
Restricted cash | $ 39,200,000 | |
Credit linked notes | ||
Notes issued | 115,600,000 | |
Farmers Merchants Bank Of Illinois Branches | Disposed by sale | ||
Assets | $ 60,800,000 | |
Net Gain | 715,000 | |
Extinguishment Of Goodwill | 7,800,000 | |
Extinguishment Of Intangibles | 500,000 | |
Liabilities | 230,600,000 | |
Farmers-Merchants Bank of Illinois branch locations in Paxton, Melvin, and Piper City, Illinois | Bank of Pontiac | ||
Deposit premium | $ 10,100,000 | |
Farmers-Merchants Bank of Illinois branch locations in Paxton, Melvin, and Piper City, Illinois | Disposed by sale | Bank of Pontiac | ||
Deposits | 164,800,000 | |
Loans | 19,200,000 | |
Farmers-Merchants Bank of Illinois branch located in Joy, Illinois | Disposed by sale | CBI Bank & Trust | ||
Deposits | 65,100,000 | |
Loans | $ 28,600,000 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost to Approximate Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Available for sale securities: | ||
Amortized Cost | $ 1,062,830 | $ 1,116,954 |
Gross Unrealized Gains | 15 | 50 |
Gross Unrealized Losses | 1,557 | 3,317 |
Fair Value | 1,061,288 | 1,113,687 |
Accrued interest on securities available for sale | 5,100 | 6,700 |
Held to maturity securities: | ||
Amortized Cost | 1,175,167 | 1,204,217 |
Gross Unrealized Gains | 2,385 | 973 |
Gross Unrealized Losses | 1,374 | 1,655 |
Fair Value | 1,176,178 | 1,203,535 |
Accrued interest on securities held to maturity | 5,600 | 5,800 |
Treasury notes | ||
Available for sale securities: | ||
Amortized Cost | 109,146 | 129,261 |
Gross Unrealized Gains | 15 | 45 |
Gross Unrealized Losses | 58 | 338 |
Fair Value | 109,103 | 128,968 |
Federal agencies | ||
Available for sale securities: | ||
Amortized Cost | 240,000 | 250,731 |
Gross Unrealized Losses | 1,499 | 2,976 |
Fair Value | 238,501 | 247,755 |
Mortgage-backed - Agency | ||
Held to maturity securities: | ||
Amortized Cost | 11,976 | 12,016 |
Gross Unrealized Losses | 868 | 822 |
Fair Value | 11,108 | 11,194 |
Mortgage-backed - Government Agency ("Agency") | ||
Available for sale securities: | ||
Amortized Cost | 13,044 | 14,465 |
Gross Unrealized Gains | 5 | |
Gross Unrealized Losses | 3 | |
Fair Value | 13,044 | 14,467 |
Mortgage-backed - Agency - fair value option | ||
Available for sale securities: | ||
Amortized Cost | 228,448 | 236,997 |
Fair Value | 228,448 | 236,997 |
Mortgage-backed - Non-Agency multi-family | ||
Held to maturity securities: | ||
Amortized Cost | 710,024 | 719,662 |
Gross Unrealized Losses | 419 | 415 |
Fair Value | 709,605 | 719,247 |
Mortgage-backed - Non-Agency residential | ||
Available for sale securities: | ||
Amortized Cost | 472,192 | 485,500 |
Fair Value | 472,192 | 485,500 |
Held to maturity securities: | ||
Amortized Cost | 453,167 | 472,539 |
Gross Unrealized Gains | 2,385 | 973 |
Gross Unrealized Losses | 87 | 418 |
Fair Value | $ 455,465 | $ 473,094 |
Investment Securities - Contrac
Investment Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Available for Sale Securities, Amortized Cost | ||
Within one year | $ 209,146 | $ 308,474 |
After one through five years | 140,000 | 71,518 |
Total, single maturity date | 349,146 | 379,992 |
Total | 1,062,830 | 1,116,954 |
Available for Sale Securities, Fair Value | ||
Within one year | 207,796 | 305,406 |
After one through five years | 139,808 | 71,317 |
Total, single maturity date | 347,604 | 376,723 |
Total | 1,061,288 | 1,113,687 |
Held to Maturity Securities, Amortized Cost | ||
Amortized Cost | 1,175,167 | 1,204,217 |
Held to Maturity Securities, Fair Value | ||
Fair Value | 1,176,178 | 1,203,535 |
Mortgage-backed - Agency | ||
Held to Maturity Securities, Amortized Cost | ||
Amortized Cost | 11,976 | 12,016 |
Held to Maturity Securities, Fair Value | ||
Fair Value | 11,108 | 11,194 |
Mortgage-backed - Government Agency ("Agency") | ||
Available for Sale Securities, Amortized Cost | ||
Without single maturity date | 13,044 | 14,465 |
Total | 13,044 | 14,465 |
Available for Sale Securities, Fair Value | ||
Without single maturity date | 13,044 | 14,467 |
Total | 13,044 | 14,467 |
Mortgage-backed - Agency - fair value option | ||
Available for Sale Securities, Amortized Cost | ||
Without single maturity date | 228,448 | 236,997 |
Total | 228,448 | 236,997 |
Available for Sale Securities, Fair Value | ||
Without single maturity date | 228,448 | 236,997 |
Total | 228,448 | 236,997 |
Mortgage-backed - Non-Agency multi-family | ||
Held to Maturity Securities, Amortized Cost | ||
Amortized Cost | 710,024 | 719,662 |
Held to Maturity Securities, Fair Value | ||
Fair Value | 709,605 | 719,247 |
Mortgage-backed - Non-Agency residential | ||
Available for Sale Securities, Amortized Cost | ||
Without single maturity date | 472,192 | 485,500 |
Total | 472,192 | 485,500 |
Available for Sale Securities, Fair Value | ||
Without single maturity date | 472,192 | 485,500 |
Total | 472,192 | 485,500 |
Held to Maturity Securities, Amortized Cost | ||
Amortized Cost | 453,167 | 472,539 |
Held to Maturity Securities, Fair Value | ||
Fair Value | $ 455,465 | $ 473,094 |
Investment Securities - Sale of
Investment Securities - Sale of securities (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Investment Securities | ||
Proceeds from the sale of securities available for sale | $ 9,983,000 | $ 0 |
Net gain on sale of securities available for sale | (108,000) | |
Losses on sale of securities available for sale | 10,000 | |
Gain on sale of securities available for sale | $ 118,000 |
Investment Securities - Continu
Investment Securities - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | $ 142,900 | $ 63,957 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 125,631 | 199,479 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 268,531 | 263,436 |
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 | 193 | 196 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | 1,364 | 3,121 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 1,557 | 3,317 |
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 | 3,092 | 3,052 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 26,938 | 32,080 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 30,030 | 35,132 |
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 | 6 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | 57 | 332 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 58 | 338 |
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 | 139,808 | 60,541 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 98,693 | 167,213 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 238,501 | 227,754 |
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 | 192 | 189 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | 1,307 | 2,787 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | $ 1,499 | 2,976 |
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 | |
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 | |
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 | |
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 |
Mortgage Loans in Process of _2
Mortgage Loans in Process of Securitization (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Mortgage Loans in Process of Securitization | ||
Positive (negative) fair market adjustment, mortgage loans in process of securitization | $ 0.7 | $ 4 |
Loans and Allowance for Credi_3
Loans and Allowance for Credit Losses on Loans - Summary of Loans By Classification (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Loans and Allowance for Credit Losses on Loans | ||||
Loans | $ 10,766,225 | $ 10,199,553 | ||
ACL-Loans | 75,712 | 71,752 | $ 51,838 | $ 44,014 |
Loans receivable | 10,690,513 | 10,127,801 | ||
Accrued interest on loans, excluded from amortized cost of loans | 60,200 | 60,400 | ||
Mortgage warehouse lines of credit | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 1,142,994 | 752,468 | ||
ACL-Loans | 3,022 | 2,070 | 1,664 | 1,249 |
Residential real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 1,321,300 | 1,324,305 | ||
ACL-Loans | 6,905 | 7,323 | 7,378 | 7,029 |
Residential real estate | Home equity line of credit | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 1,200,000 | 1,200,000 | ||
Healthcare financing | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 2,464,685 | 2,356,689 | ||
ACL-Loans | 24,587 | 22,454 | 11,753 | 9,882 |
Multi-family financing | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 4,096,606 | 4,006,160 | ||
ACL-Loans | 28,664 | 26,874 | 19,851 | 16,781 |
Commercial and commercial real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 1,666,751 | 1,643,081 | ||
ACL-Loans | 11,990 | 12,243 | 10,482 | 8,326 |
Revolving lines of credit collateralized primarily by mortgage servicing rights | 1,100,000 | 1,100,000 | ||
Commercial and commercial real estate | Non-owner occupied commercial real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | $ 6,800 | 8,400 | ||
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 | $ 65,977 | 103,150 | ||
ACL-Loans | 450 | 619 | 543 | 565 |
Consumer and margin loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Loans | 7,912 | 13,700 | ||
ACL-Loans | $ 94 | $ 169 | $ 167 | $ 182 |
Loans and Allowance for Credi_4
Loans and Allowance for Credit Losses on Loans - Allowance For Credit-Loan Losses (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Allowance for credit losses | ||||
Balance, beginning of period | $ 71,752,000 | $ 71,752,000 | $ 44,014,000 | $ 44,014,000 |
Provision for loan losses | 4,900,000 | 7,800,000 | ||
FMBI's ACL for loans sold | (593,000) | (593,000) | ||
Provision for credit losses | 5,477,000 | 7,817,000 | 37,488,000 | |
Loans charged to the allowance | (925,000) | (9,791,000) | ||
Recoveries of loans previously charged-off | 1,000 | 7,000 | 41,000 | |
Balance, end of period | 75,712,000 | 51,838,000 | 71,752,000 | |
ACL Loans | ||||
Provision for credit losses | 4,726,000 | 6,867,000 | ||
Provision for credit losses, ACL Loans | 4,900,000 | 7,800,000 | ||
Provision for credit losses, ACL-OBCE's | (200,000) | (900,000) | ||
Elimination of FMBI's ACL for loans sold | 593,000 | 593,000 | ||
Mortgage warehouse lines of credit | ||||
Allowance for credit losses | ||||
Balance, beginning of period | 2,070,000 | 2,070,000 | 1,249,000 | 1,249,000 |
Provision for credit losses | 952,000 | 415,000 | 821,000 | |
Balance, end of period | 3,022,000 | 1,664,000 | 2,070,000 | |
Residential real estate | ||||
Allowance for credit losses | ||||
Balance, beginning of period | 7,323,000 | 7,323,000 | 7,029,000 | 7,029,000 |
FMBI's ACL for loans sold | (55,000) | |||
Provision for credit losses | (363,000) | 349,000 | 328,000 | |
Loans charged to the allowance | (34,000) | |||
Balance, end of period | 6,905,000 | 7,378,000 | 7,323,000 | |
ACL Loans | ||||
Elimination of FMBI's ACL for loans sold | 55,000 | |||
Multi-family financing | ||||
Allowance for credit losses | ||||
Balance, beginning of period | 26,874,000 | 26,874,000 | 16,781,000 | 16,781,000 |
FMBI's ACL for loans sold | (186,000) | |||
Provision for credit losses | 1,976,000 | 3,070,000 | 18,493,000 | |
Loans charged to the allowance | (8,400,000) | |||
Balance, end of period | 28,664,000 | 19,851,000 | 26,874,000 | |
ACL Loans | ||||
Elimination of FMBI's ACL for loans sold | 186,000 | |||
Healthcare financing | ||||
Allowance for credit losses | ||||
Balance, beginning of period | 22,454,000 | 22,454,000 | 9,882,000 | 9,882,000 |
FMBI's ACL for loans sold | (2,000) | |||
Provision for credit losses | 2,135,000 | 1,871,000 | 12,572,000 | |
Balance, end of period | 24,587,000 | 11,753,000 | 22,454,000 | |
ACL Loans | ||||
Elimination of FMBI's ACL for loans sold | 2,000 | |||
Commercial and commercial real estate | ||||
Allowance for credit losses | ||||
Balance, beginning of period | 12,243,000 | 12,243,000 | 8,326,000 | 8,326,000 |
FMBI's ACL for loans sold | (92,000) | |||
Provision for credit losses | 763,000 | 2,149,000 | 5,232,000 | |
Loans charged to the allowance | (925,000) | (1,356,000) | ||
Recoveries of loans previously charged-off | 1,000 | 7,000 | 41,000 | |
Balance, end of period | 11,990,000 | 10,482,000 | 12,243,000 | |
ACL Loans | ||||
Elimination of FMBI's ACL for loans sold | 92,000 | |||
Agricultural production and real estate | ||||
Allowance for credit losses | ||||
Balance, beginning of period | 619,000 | 619,000 | 565,000 | 565,000 |
FMBI's ACL for loans sold | (246,000) | |||
Provision for credit losses | 77,000 | (22,000) | 54,000 | |
Balance, end of period | 450,000 | 543,000 | 619,000 | |
ACL Loans | ||||
Elimination of FMBI's ACL for loans sold | 246,000 | |||
Consumer and margin loans | ||||
Allowance for credit losses | ||||
Balance, beginning of period | $ 169,000 | 169,000 | 182,000 | 182,000 |
FMBI's ACL for loans sold | (12,000) | |||
Provision for credit losses | (63,000) | (15,000) | (12,000) | |
Loans charged to the allowance | (1,000) | |||
Balance, end of period | 94,000 | $ 167,000 | $ 169,000 | |
ACL Loans | ||||
Elimination of FMBI's ACL for loans sold | $ 12,000 |
Loans and Allowance for Credi_5
Loans and Allowance for Credit Losses on Loans - Amortized cost basis and ACL (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | $ 10,766,225 | $ 10,199,553 | ||
ACL-Loans | 75,712 | 71,752 | $ 51,838 | $ 44,014 |
Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 123,355 | 128,627 | ||
ACL-Loans | 8,022 | 7,964 | ||
Real Estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 118,070 | 122,334 | ||
Accounts Receivable Or Equipment | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 2,628 | 3,603 | ||
Other Collateralized Assets | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 2,657 | 2,690 | ||
Residential real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 1,321,300 | 1,324,305 | ||
ACL-Loans | 6,905 | 7,323 | 7,378 | 7,029 |
Residential real estate | Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 1,272 | 1,560 | ||
ACL-Loans | 8 | 21 | ||
Residential real estate | Real Estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 1,272 | 1,557 | ||
Residential real estate | Other Collateralized Assets | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 3 | |||
Multi-family financing | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 4,096,606 | 4,006,160 | ||
ACL-Loans | 28,664 | 26,874 | 19,851 | 16,781 |
Multi-family financing | Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 53,200 | 46,575 | ||
ACL-Loans | 581 | 521 | ||
Multi-family financing | Real Estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 53,200 | 46,575 | ||
Healthcare financing | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 2,464,685 | 2,356,689 | ||
ACL-Loans | 24,587 | 22,454 | 11,753 | 9,882 |
Healthcare financing | Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 63,283 | 73,909 | ||
ACL-Loans | 5,652 | 6,289 | ||
Healthcare financing | Real Estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 63,283 | 73,909 | ||
Commercial and commercial real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 1,666,751 | 1,643,081 | ||
ACL-Loans | 11,990 | 12,243 | 10,482 | 8,326 |
Commercial and commercial real estate | Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 5,453 | 6,433 | ||
ACL-Loans | 1,780 | 1,132 | ||
Commercial and commercial real estate | Real Estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 168 | 146 | ||
Commercial and commercial real estate | Accounts Receivable Or Equipment | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 2,628 | 3,603 | ||
Commercial and commercial real estate | Other Collateralized Assets | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 2,657 | 2,684 | ||
Agricultural production and real estate | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 65,977 | 103,150 | ||
ACL-Loans | 450 | 619 | 543 | 565 |
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 | 7,912 | 13,700 | ||
ACL-Loans | $ 94 | 169 | $ 167 | $ 182 |
Consumer and margin loans | Collateral Dependent Loans | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | 3 | |||
Consumer and margin loans | Other Collateralized Assets | ||||
Loans and Allowance for Credit Losses on Loans | ||||
Amortized Cost Basis | $ 3 |
Loans and Allowance for Credi_6
Loans and Allowance for Credit Losses on Loans - Credit Risk Profile of Loan Portfolio (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Credit risk profile of portfolio | ||
2023 | $ 603,735 | $ 2,115,132 |
2022 | 1,832,813 | 1,954,111 |
2021 | 1,868,867 | 454,876 |
2020 | 338,696 | 136,666 |
2019 | 59,163 | 74,113 |
Prior | 112,293 | 58,347 |
Revolving Loans | 5,950,658 | 5,406,308 |
Loans | 10,766,225 | 10,199,553 |
Net Charge-Offs | ||
2022 | 8,896 | |
2021 | 274 | |
2020 | 925 | 586 |
Prior | 22 | |
Revolving Loans | 13 | |
Net Charge-Offs | 925 | 9,791 |
Pass | ||
Credit risk profile of portfolio | ||
2023 | 571,416 | 1,947,008 |
2022 | 1,677,746 | 1,902,347 |
2021 | 1,802,354 | 409,166 |
2020 | 293,914 | 135,601 |
2019 | 58,156 | 73,977 |
Prior | 110,398 | 55,806 |
Revolving Loans | 5,896,764 | 5,355,754 |
Loans | 10,410,748 | 9,879,659 |
Special Mention | ||
Credit risk profile of portfolio | ||
2023 | 32,319 | 130,842 |
2022 | 117,800 | 12,709 |
2021 | 38,061 | 8,692 |
2020 | 8,689 | 187 |
2019 | 157 | 74 |
Prior | 1,688 | 2,053 |
Revolving Loans | 33,408 | 36,710 |
Loans | 232,122 | 191,267 |
Substandard | ||
Credit risk profile of portfolio | ||
2023 | 37,282 | |
2022 | 37,267 | 39,055 |
2021 | 28,452 | 37,018 |
2020 | 36,093 | 878 |
2019 | 850 | 62 |
Prior | 207 | 438 |
Revolving Loans | 20,486 | 13,844 |
Loans | 123,355 | 128,577 |
Doubtful | ||
Credit risk profile of portfolio | ||
Prior | 50 | |
Loans | 50 | |
Mortgage warehouse lines of credit | ||
Credit risk profile of portfolio | ||
Revolving Loans | 1,142,994 | 752,468 |
Loans | 1,142,994 | 752,468 |
Mortgage warehouse lines of credit | Pass | ||
Credit risk profile of portfolio | ||
Revolving Loans | 1,142,994 | 752,468 |
Loans | 1,142,994 | 752,468 |
Residential real estate | ||
Credit risk profile of portfolio | ||
2023 | 1,780 | 31,011 |
2022 | 32,353 | 10,086 |
2021 | 9,793 | 6,573 |
2020 | 6,175 | 22,725 |
2019 | 21,315 | 3,357 |
Prior | 7,618 | 10,120 |
Revolving Loans | 1,242,266 | 1,240,433 |
Loans | 1,321,300 | 1,324,305 |
Net Charge-Offs | ||
Prior | 21 | |
Revolving Loans | 13 | |
Net Charge-Offs | 34 | |
Residential real estate | Pass | ||
Credit risk profile of portfolio | ||
2023 | 1,780 | 31,011 |
2022 | 32,353 | 10,086 |
2021 | 9,793 | 6,573 |
2020 | 6,175 | 22,725 |
2019 | 21,315 | 3,298 |
Prior | 7,400 | 9,340 |
Revolving Loans | 1,240,994 | 1,239,161 |
Loans | 1,319,810 | 1,322,194 |
Residential real estate | Special Mention | ||
Credit risk profile of portfolio | ||
2019 | 59 | |
Prior | 218 | 492 |
Loans | 218 | 551 |
Residential real estate | Substandard | ||
Credit risk profile of portfolio | ||
Prior | 288 | |
Revolving Loans | 1,272 | 1,272 |
Loans | 1,272 | 1,560 |
Multi-family financing | ||
Credit risk profile of portfolio | ||
2023 | 306,730 | 1,201,353 |
2022 | 1,065,586 | 793,997 |
2021 | 790,990 | 223,277 |
2020 | 129,287 | 77,340 |
2019 | 9,070 | 29,764 |
Prior | 36,057 | 9,932 |
Revolving Loans | 1,758,886 | 1,670,497 |
Loans | 4,096,606 | 4,006,160 |
Net Charge-Offs | ||
2022 | 8,400 | |
Net Charge-Offs | 8,400 | |
Multi-family financing | Pass | ||
Credit risk profile of portfolio | ||
2023 | 298,730 | 1,094,698 |
2022 | 957,019 | 762,448 |
2021 | 734,071 | 208,343 |
2020 | 114,353 | 77,340 |
2019 | 9,070 | 29,764 |
Prior | 34,587 | 8,455 |
Revolving Loans | 1,731,470 | 1,646,445 |
Loans | 3,879,300 | 3,827,493 |
Multi-family financing | Special Mention | ||
Credit risk profile of portfolio | ||
2023 | 8,000 | 94,973 |
2022 | 96,900 | 3,189 |
2021 | 28,559 | 8,400 |
2020 | 8,400 | |
Prior | 1,470 | 1,477 |
Revolving Loans | 20,777 | 24,052 |
Loans | 164,106 | 132,091 |
Multi-family financing | Substandard | ||
Credit risk profile of portfolio | ||
2023 | 11,682 | |
2022 | 11,667 | 28,360 |
2021 | 28,360 | 6,534 |
2020 | 6,534 | |
Revolving Loans | 6,639 | |
Loans | 53,200 | 46,576 |
Healthcare financing | ||
Credit risk profile of portfolio | ||
2023 | 282,923 | 814,060 |
2022 | 672,888 | 1,016,418 |
2021 | 946,382 | 138,980 |
2020 | 127,598 | |
2019 | 14,563 | |
Prior | 14,459 | |
Revolving Loans | 420,435 | 372,668 |
Loans | 2,464,685 | 2,356,689 |
Healthcare financing | Pass | ||
Credit risk profile of portfolio | ||
2023 | 258,604 | 752,591 |
2022 | 626,388 | 996,273 |
2021 | 936,880 | 110,197 |
2020 | 98,815 | |
2019 | 14,563 | |
Prior | 14,459 | |
Revolving Loans | 398,904 | 351,110 |
Loans | 2,334,050 | 2,224,734 |
Healthcare financing | Special Mention | ||
Credit risk profile of portfolio | ||
2023 | 24,319 | 35,869 |
2022 | 20,900 | 9,520 |
2021 | 9,502 | |
Revolving Loans | 12,631 | 12,658 |
Loans | 67,352 | 58,047 |
Healthcare financing | Substandard | ||
Credit risk profile of portfolio | ||
2023 | 25,600 | |
2022 | 25,600 | 10,625 |
2021 | 28,783 | |
2020 | 28,783 | |
Revolving Loans | 8,900 | 8,900 |
Loans | 63,283 | 73,908 |
Commercial and commercial real estate | ||
Credit risk profile of portfolio | ||
2023 | 4,469 | 51,110 |
2022 | 54,002 | 119,456 |
2021 | 116,571 | 79,309 |
2020 | 72,889 | 22,204 |
2019 | 20,210 | 21,150 |
Prior | 34,229 | 17,200 |
Revolving Loans | 1,364,381 | 1,332,652 |
Loans | 1,666,751 | 1,643,081 |
Net Charge-Offs | ||
2022 | 496 | |
2021 | 274 | |
2020 | 925 | 586 |
Net Charge-Offs | 925 | 1,356 |
Commercial and commercial real estate | Pass | ||
Credit risk profile of portfolio | ||
2023 | 4,469 | 51,110 |
2022 | 54,002 | 119,386 |
2021 | 116,479 | 77,316 |
2020 | 71,824 | 21,154 |
2019 | 19,203 | 21,088 |
Prior | 34,169 | 17,066 |
Revolving Loans | 1,360,706 | 1,328,980 |
Loans | 1,660,852 | 1,636,100 |
Commercial and commercial real estate | Special Mention | ||
Credit risk profile of portfolio | ||
2021 | 292 | |
2020 | 289 | 172 |
2019 | 157 | |
Prior | 84 | |
Loans | 446 | 548 |
Commercial and commercial real estate | Substandard | ||
Credit risk profile of portfolio | ||
2022 | 70 | |
2021 | 92 | 1,701 |
2020 | 776 | 878 |
2019 | 850 | 62 |
Prior | 60 | |
Revolving Loans | 3,675 | 3,672 |
Loans | 5,453 | 6,383 |
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 | 7,833 | 16,850 |
2022 | 7,875 | 9,825 |
2021 | 5,103 | 6,490 |
2020 | 2,722 | 14,267 |
2019 | 8,566 | 5,237 |
Prior | 15,662 | 16,753 |
Revolving Loans | 18,216 | 33,728 |
Loans | 65,977 | 103,150 |
Agricultural production and real estate | Pass | ||
Credit risk profile of portfolio | ||
2023 | 7,833 | 16,850 |
2022 | 7,875 | 9,825 |
2021 | 5,103 | 6,490 |
2020 | 2,722 | 14,267 |
2019 | 8,566 | 5,237 |
Prior | 15,515 | 16,606 |
Revolving Loans | 18,216 | 33,728 |
Loans | 65,830 | 103,003 |
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 | |
2022 | 109 | 4,329 |
2021 | 28 | 247 |
2020 | 25 | 130 |
2019 | 2 | 42 |
Prior | 4,268 | 4,342 |
Revolving Loans | 3,480 | 3,862 |
Loans | 7,912 | 13,700 |
Net Charge-Offs | ||
Prior | 1 | |
Net Charge-Offs | 1 | |
Consumer and margin loans | Pass | ||
Credit risk profile of portfolio | ||
2023 | 748 | |
2022 | 109 | 4,329 |
2021 | 28 | 247 |
2020 | 25 | 115 |
2019 | 2 | 27 |
Prior | 4,268 | 4,339 |
Revolving Loans | 3,480 | 3,862 |
Loans | $ 7,912 | 13,667 |
Consumer and margin loans | Special Mention | ||
Credit risk profile of portfolio | ||
2020 | 15 | |
2019 | 15 | |
Loans | 30 | |
Consumer and margin loans | Substandard | ||
Credit risk profile of portfolio | ||
Prior | 3 | |
Loans | $ 3 |
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 | Mar. 31, 2024 USD ($) loan | Dec. 31, 2023 USD ($) |
Aging analysis of loan portfolio | ||
Loans | $ 10,766,225 | $ 10,199,553 |
Number of delinquent loans classified as held for sale | loan | 2 | |
Loan as held for sale | $ 30,200 | |
Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 188,742 | 183,529 |
30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 31,424 | 42,975 |
60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 26,292 | 58,737 |
Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 131,026 | 81,817 |
Current. | ||
Aging analysis of loan portfolio | ||
Loans | 10,577,483 | 10,016,024 |
Mortgage warehouse lines of credit | ||
Aging analysis of loan portfolio | ||
Loans | 1,142,994 | 752,468 |
Mortgage warehouse lines of credit | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 1,142,994 | 752,468 |
Residential real estate | ||
Aging analysis of loan portfolio | ||
Loans | 1,321,300 | 1,324,305 |
Residential real estate | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 5,488 | 6,936 |
Residential real estate | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 4,588 | 4,557 |
Residential real estate | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 682 | |
Residential real estate | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 218 | 2,379 |
Residential real estate | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 1,315,812 | 1,317,369 |
Healthcare financing | ||
Aging analysis of loan portfolio | ||
Loans | 2,464,685 | 2,356,689 |
Healthcare financing | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 74,333 | 83,274 |
Healthcare financing | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 25,600 | 47,275 |
Healthcare financing | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 48,733 | 35,999 |
Healthcare financing | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 2,390,352 | 2,273,415 |
Multi-family financing | ||
Aging analysis of loan portfolio | ||
Loans | 4,096,606 | 4,006,160 |
Multi-family financing | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 103,780 | 88,882 |
Multi-family financing | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 24,870 | 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 | 78,910 | 39,609 |
Multi-family financing | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 3,992,826 | 3,917,278 |
Commercial and commercial real estate | ||
Aging analysis of loan portfolio | ||
Loans | 1,666,751 | 1,643,081 |
Commercial and commercial real estate | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 4,928 | 4,230 |
Commercial and commercial real estate | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 1,922 | 172 |
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 | 3,006 | 3,665 |
Commercial and commercial real estate | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 1,661,823 | 1,638,851 |
Agricultural production and real estate | ||
Aging analysis of loan portfolio | ||
Loans | 65,977 | 103,150 |
Agricultural production and real estate | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 213 | 185 |
Agricultural production and real estate | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 44 | 27 |
Agricultural production and real estate | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 10 | 11 |
Agricultural production and real estate | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 159 | 147 |
Agricultural production and real estate | Current. | ||
Aging analysis of loan portfolio | ||
Loans | 65,764 | 102,965 |
Consumer and margin loans | ||
Aging analysis of loan portfolio | ||
Loans | 7,912 | 13,700 |
Consumer and margin loans | Total Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 22 | |
Consumer and margin loans | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 1 | |
Consumer and margin loans | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Loans | 3 | |
Consumer and margin loans | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Loans | 18 | |
Consumer and margin loans | Current. | ||
Aging analysis of loan portfolio | ||
Loans | $ 7,912 | $ 13,678 |
Loans and Allowance for Credi_8
Loans and Allowance for Credit Losses on Loans - Non Accrual Loans and Loans Past Due 90 Days Or More and Still Accruing (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Loan portfolio past due loans | ||
Nonaccrual | $ 78,804 | $ 73,847 |
Total Loans Greater than 90 Days & Accruing | 52,982 | 8,168 |
Residential real estate | ||
Loan portfolio past due loans | ||
Nonaccrual | 760 | 1,486 |
Total Loans Greater than 90 Days & Accruing | 218 | 894 |
Multi-family financing | ||
Loan portfolio past due loans | ||
Nonaccrual | 46,248 | 39,608 |
Total Loans Greater than 90 Days & Accruing | 32,662 | |
Healthcare financing | ||
Loan portfolio past due loans | ||
Nonaccrual | 28,783 | 28,783 |
Total Loans Greater than 90 Days & Accruing | 19,950 | 7,216 |
Commercial and commercial real estate | ||
Loan portfolio past due loans | ||
Nonaccrual | 2,866 | 3,820 |
Total Loans Greater than 90 Days & Accruing | 140 | 43 |
Agricultural production and real estate | ||
Loan portfolio past due loans | ||
Nonaccrual | 147 | 147 |
Total Loans Greater than 90 Days & Accruing | $ 12 | |
Consumer and margin loans | ||
Loan portfolio past due loans | ||
Nonaccrual | 3 | |
Total Loans Greater than 90 Days & Accruing | $ 15 |
Loans and Allowance for Credi_9
Loans and Allowance for Credit Losses on Loans - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 USD ($) loan | Mar. 31, 2023 USD ($) | Dec. 31, 2023 loan | |
Loans and Allowance for Credit Losses on Loans | |||
Number of loans modified for borrowers | 0 | ||
Purchase of loans | $ | $ 27,727 | $ 98,791 | |
Residential real estate | |||
Loans and Allowance for Credit Losses on Loans | |||
Number of loans in the process of foreclosure | 0 | 0 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Variable Interest Entities | ||
Liabilities for VIEs | $ 16,046,108 | $ 15,251,432 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entities | ||
Investments in VIEs | 130,672 | 151,962 |
Bridge loans to VIEs | 442,195 | 318,823 |
Securities for VIEs | 1,163,191 | 1,192,201 |
Maximum Exposure to Loss | 1,736,058 | 1,662,986 |
Liabilities for VIEs | 34,923 | 37,851 |
Low-income housing tax credit investments | Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entities | ||
Investments in VIEs | 96,675 | 118,741 |
Bridge loans to VIEs | 136,197 | 232,407 |
Maximum Exposure to Loss | 232,872 | 351,148 |
Liabilities for VIEs | 32,171 | 35,099 |
Debt funds | Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entities | ||
Investments in VIEs | 33,997 | 33,221 |
Bridge loans to VIEs | 305,998 | 86,416 |
Maximum Exposure to Loss | 339,995 | 119,637 |
Liabilities for VIEs | 2,752 | 2,752 |
Off-balance-sheet REMIC trusts | Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entities | ||
Securities for VIEs | 1,163,191 | 1,192,201 |
Maximum Exposure to Loss | $ 1,163,191 | $ 1,192,201 |
Regulatory Matters (Details)
Regulatory Matters (Details) $ in Thousands | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Company | ||
Total Capital (to risk-weighted assets) | ||
Total Capital (to risk-weighted assets), Actual, Amount | $ 1,858,348 | $ 1,772,195 |
Total Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.117 | 0.116 |
Total Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 1,662,302 | $ 1,598,260 |
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 | $ 1,768,553 | $ 1,686,202 |
Tier I Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.112 | 0.111 |
Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 1,345,673 | $ 1,293,830 |
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 | $ 1,268,945 | $ 1,186,594 |
Common Equity Tier I Capital (to risk weighted assets), Ratio (as a percent) | 0.080 | 0.078 |
Common Equity Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 1,108,202 | $ 1,065,507 |
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 | $ 1,768,553 | $ 1,686,202 |
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) | 0.105 | 0.101 |
Tier 1 Capital (to average assets), Minimum Amount Required to be Well Capitalized with Basel III Buffer, Amount | $ 839,199 | $ 832,706 |
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 | $ 1,801,020 | $ 1,724,505 |
Total Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.114 | 0.115 |
Total Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 1,660,561 | $ 1,577,434 |
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 | $ 1,581,487 | $ 1,502,318 |
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 | $ 1,711,225 | $ 1,639,171 |
Tier I Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.108 | 0.109 |
Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 1,344,264 | $ 1,276,970 |
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 | $ 1,265,189 | $ 1,201,854 |
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 | $ 1,711,225 | $ 1,639,171 |
Common Equity Tier I Capital (to risk weighted assets), Ratio (as a percent) | 0.108 | 0.109 |
Common Equity Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 1,107,041 | $ 1,051,623 |
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 | $ 1,027,966 | $ 976,507 |
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 | $ 1,711,225 | $ 1,639,171 |
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) | 0.102 | 0.101 |
Tier 1 Capital (to average assets), Minimum Amount Required to be Well Capitalized with Basel III Buffer, Amount | $ 837,560 | $ 815,191 |
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 | $ 837,560 | $ 815,191 |
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 | |
Total Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.211 | |
Total Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 20,209 | |
Total Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.105 | |
Total Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Amount | $ 19,247 | |
Total Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.100 | |
Tier I Capital (to risk-weighted assets) | ||
Tier I Capital, (to risk-weighted assets), Actual, Amount | $ 39,953 | |
Tier I Capital (to risk weighted assets), Actual, Ratio (as a percent) | 0.208 | |
Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 16,360 | |
Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.085 | |
Tier I Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Amount | $ 15,398 | |
Tier I Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.080 | |
Common Equity Tier I Capital (to risk-weighted assets) | ||
Common Equity Tier I Capital (to risk weighted assets), Actual, Amount | $ 39,953 | |
Common Equity Tier I Capital (to risk weighted assets), Ratio (as a percent) | 0.208 | |
Common Equity Tier I Capital (to risk weighted assets), Minimum Amount to be Well Capitalized with Basel III Buffer, Amount | $ 13,473 | |
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 | |
Common Equity Tier I Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Amount | $ 12,511 | |
Common Equity Tier I Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.065 | |
Tier 1 Capital (to average assets) | ||
Tier 1 Capital (to average assets), Actual, Amount | $ 39,953 | |
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) | 0.115 | |
Tier 1 Capital (to average assets), Minimum Amount Required to be Well Capitalized with Basel III Buffer, Amount | $ 17,391 | |
Tier 1 Capital (to average assets), Minimum Amount Required to be Well Capitalized with Basel III Buffer, Ratio (as a percent) | 0.050 | |
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Amount | $ 17,391 | |
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 0.050 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2024 USD ($) customer | Mar. 31, 2024 USD ($) customer | Mar. 31, 2023 USD ($) | Mar. 27, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Derivative Financial Instruments | |||||
Number of warehouse loan customers | customer | 2 | 2 | |||
Derivative assets, fair value | $ 0 | ||||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||||
Net swap gains (losses) | $ 9,947 | ||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Noninterest Income, Other | Noninterest Income, Other | |||
Pledged in collateral | $ 0 | $ 0 | $ 0 | ||
Derivative assets | |||||
Derivative Financial Instruments | |||||
Derivative assets, fair value | 46,568 | 46,568 | 35,207 | ||
Derivative liabilities | |||||
Derivative Financial Instruments | |||||
Derivative liabilities, fair value | 132 | 132 | 395 | ||
Derivative | |||||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||||
Net swap gains (losses) | $ 1,485 | $ (1,223) | |||
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 | |||
Interest rate lock commitments | |||||
Derivative Financial Instruments | |||||
Notional amount | 31,888 | $ 31,888 | 16,526 | ||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||||
Net swap gains (losses) | 16 | $ 209 | |||
Interest rate lock commitments | Derivative assets | |||||
Derivative Financial Instruments | |||||
Derivative assets, fair value | 174 | 174 | 140 | ||
Interest rate lock commitments | Derivative liabilities | |||||
Derivative Financial Instruments | |||||
Derivative liabilities, fair value | 22 | 22 | 4 | ||
Forward contracts | |||||
Derivative Financial Instruments | |||||
Notional amount | 33,375 | 33,375 | 25,500 | ||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||||
Net swap gains (losses) | 94 | (96) | |||
Forward contracts | Derivative assets | |||||
Derivative Financial Instruments | |||||
Derivative assets, fair value | 9 | 9 | 4 | ||
Forward contracts | Derivative liabilities | |||||
Derivative Financial Instruments | |||||
Derivative liabilities, fair value | 110 | 110 | 391 | ||
Interest rate swaps | |||||
Derivative Financial Instruments | |||||
Notional amount | 57,531 | 57,531 | 57,540 | ||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||||
Net swap gains (losses) | 1,375 | (1,336) | |||
Interest rate swaps | Derivative assets | |||||
Derivative Financial Instruments | |||||
Derivative assets, fair value | 3,985 | 3,985 | 2,610 | ||
Interest rate swaps (back-to-back) | |||||
Derivative Financial Instruments | |||||
Notional amount | 657,572 | 657,572 | 607,169 | ||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||||
Gross swap gains | 2,833 | 580 | |||
Gross swap losses | 2,833 | $ 580 | |||
Interest rate swaps (back-to-back) | Derivative assets | |||||
Derivative Financial Instruments | |||||
Derivative assets, fair value | 15,259 | 15,259 | 12,426 | ||
Interest rate swaps (back-to-back) | Derivative liabilities | |||||
Derivative Financial Instruments | |||||
Derivative liabilities, fair value | 15,259 | 15,259 | 12,426 | ||
Put Option | |||||
Derivative Financial Instruments | |||||
Notional amount | 734,130 | 734,130 | 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) | 7,613 | ||||
Put Option | Derivative assets | |||||
Derivative Financial Instruments | |||||
Derivative assets, fair value | 33,490 | 33,490 | 25,877 | ||
Interest Rate Floor | |||||
Derivative Financial Instruments | |||||
Notional amount | 1,229,918 | 1,229,918 | 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) | 2,334 | ||||
Interest Rate Floor | Derivative assets | |||||
Derivative Financial Instruments | |||||
Derivative assets, fair value | 8,910 | 8,910 | $ 6,576 | ||
Credit derivatives | |||||
Derivative Financial Instruments | |||||
Notional amount | 76,092 | $ 76,092 | |||
Credit Default Swap | Multifamily mortgage loans | |||||
Derivative Financial Instruments | |||||
Aggregate collateral obligation | $ 76,100 |
Disclosures about Fair Value _3
Disclosures about Fair Value of Assets and Liabilities - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Mar. 27, 2024 | Dec. 31, 2023 |
Disclosures about Fair Value of Assets and Liabilities | |||
Mortgage loans in process of securitization | $ 142,629 | $ 110,599 | |
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 1,061,288 | 1,113,687 | |
Loans held for sale | 84,513 | 86,663 | |
Servicing rights | 172,200 | 158,457 | |
Derivative assets | $ 0 | ||
Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Mortgage loans in process of securitization | 142,629 | 110,599 | |
Loans held for sale | 84,513 | 86,663 | |
Servicing rights | 172,200 | 158,457 | |
Recurring | Interest rate lock commitments | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 174 | 140 | |
Derivative liabilities | 22 | 4 | |
Recurring | Forward contracts | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 9 | 4 | |
Derivative liabilities | 110 | 391 | |
Recurring | Interest rate swaps | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 3,985 | 2,610 | |
Recurring | Interest rate swaps (back-to-back) | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 15,259 | 12,426 | |
Derivative liabilities | 15,259 | 12,426 | |
Recurring | Put Option | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 33,490 | 25,877 | |
Recurring | Interest Rate Floor | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 8,910 | 6,576 | |
Level 2 | Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Mortgage loans in process of securitization | 142,629 | 110,599 | |
Loans held for sale | 84,513 | 86,663 | |
Level 2 | Recurring | Forward contracts | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 9 | 4 | |
Derivative liabilities | 110 | 391 | |
Level 2 | Recurring | Interest rate swaps | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 3,985 | 2,610 | |
Level 2 | Recurring | Interest rate swaps (back-to-back) | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 15,259 | 12,426 | |
Derivative liabilities | 15,259 | 12,426 | |
Level 2 | Recurring | Put Option | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 10,514 | 7,223 | |
Level 3 | Interest rate lock commitments | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 174 | 140 | |
Derivative liabilities | 22 | 4 | |
Level 3 | Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Servicing rights | 172,200 | 158,457 | |
Level 3 | Recurring | Interest rate lock commitments | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 174 | 140 | |
Derivative liabilities | 22 | 4 | |
Level 3 | Recurring | Put Option | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 22,976 | 18,654 | |
Level 3 | Recurring | Interest Rate Floor | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Derivative assets | 8,910 | 6,576 | |
Treasury notes | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 109,103 | 128,968 | |
Treasury notes | Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 109,103 | 128,968 | |
Treasury notes | Level 1 | Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 109,103 | 128,968 | |
Federal agencies | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 238,501 | 247,755 | |
Federal agencies | Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 238,501 | 247,755 | |
Federal agencies | Level 2 | Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 238,501 | 247,755 | |
Mortgage-backed - Government Agency ("Agency") | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 13,044 | 14,467 | |
Mortgage-backed - Government Agency ("Agency") | Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 13,044 | 14,467 | |
Mortgage-backed - Government Agency ("Agency") | Level 2 | Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 13,044 | 14,467 | |
Mortgage-backed - Non-Agency residential | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 472,192 | 485,500 | |
Mortgage-backed - Non-Agency residential | Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 472,192 | 485,500 | |
Mortgage-backed - Non-Agency residential | Level 3 | Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 472,192 | 485,500 | |
Mortgage-backed - Agency - fair value option | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 228,448 | 236,997 | |
Mortgage-backed - Agency - fair value option | Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | 228,448 | 236,997 | |
Mortgage-backed - Agency - fair value option | Level 2 | Recurring | |||
Disclosures about Fair Value of Assets and Liabilities | |||
Securities available for sale ($700,640 and $722,497 utilizing fair value option, respectively) | $ 228,448 | $ 236,997 |
Disclosures about Fair Value _4
Disclosures about Fair Value of Assets and Liabilities - Reconciliation of Unobservable Inputs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Put Option | ||
Reconciliation of significant unobservable inputs, assets: | ||
Balance, beginning of period | $ 18,654 | |
Subtractions | ||
Changes in fair value | $ 4,322 | |
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 | $ 22,976 | |
Interest Rate Floor | ||
Reconciliation of significant unobservable inputs, assets: | ||
Balance, beginning of period | 6,576 | |
Subtractions | ||
Changes in fair value | 2,334 | |
Balance, end of period | 8,910 | |
Derivative Liabilities - interest rate lock commitments | Interest rate lock commitments | ||
Reconciliation of significant unobservable inputs, liabilities: | ||
Balance, beginning of period | 4 | $ 23 |
Change in fair value | $ 18 | $ (19) |
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. |
Balance, end of period | $ 22 | $ 4 |
Servicing rights. | ||
Reconciliation of significant unobservable inputs, assets: | ||
Balance, beginning of period | 158,457 | 146,248 |
Additions | ||
Originated servicing | 2,166 | 2,173 |
Subtractions | ||
Paydowns | (2,387) | (1,698) |
Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model | 13,964 | (2,856) |
Balance, end of period | 172,200 | 143,867 |
Available for sale securities | ||
Reconciliation of significant unobservable inputs, assets: | ||
Balance, beginning of period | 485,500 | |
Subtractions | ||
Paydowns | (8,986) | |
Changes in fair value | (4,322) | |
Balance, end of period | 472,192 | |
Derivative Assets - interest rate lock commitments | Interest rate lock commitments | ||
Reconciliation of significant unobservable inputs, assets: | ||
Balance, beginning of period | 140 | 28 |
Subtractions | ||
Gains (losses) included in other noninterest income | $ (34) | $ (190) |
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. |
Balance, end of period | $ 174 | $ 218 |
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 | Mar. 31, 2024 | Dec. 31, 2023 |
Disclosures about Fair Value of Assets and Liabilities | ||
Collateral-dependent loans | $ 420 | $ 47,026 |
Level 3 | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Collateral-dependent loans | $ 420 | $ 47,026 |
Disclosures about Fair Value _6
Disclosures about Fair Value of Assets and Liabilities - Quantitative Information about Unobservable Inputs (Details) $ in Thousands | Mar. 31, 2024 USD ($) | Mar. 27, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Quantitative information about unobservable inputs | |||
Servicing rights | $ 172,200 | $ 158,457 | |
Derivative assets | $ 0 | ||
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | |||
Quantitative information about unobservable inputs | |||
Servicing rights | $ 4,988 | $ 5,280 | |
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 | 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 | 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 | 0.09 | |
Level 3 | Servicing rights | Single Family | |||
Quantitative information about unobservable inputs | |||
Servicing rights | $ 31,898 | $ 30,959 | |
Level 3 | Servicing rights | Single Family | Discount Rate | Minimum | |||
Quantitative information about unobservable inputs | |||
Servicing asset, measurement input | 0.10 | 0.10 | |
Level 3 | Servicing rights | Single Family | Discount Rate | Maximum | |||
Quantitative information about unobservable inputs | |||
Servicing asset, measurement input | 0.11 | 0.11 | |
Level 3 | Servicing rights | Single Family | Discount Rate | Weighted average | |||
Quantitative information about unobservable inputs | |||
Servicing asset, measurement input | 0.10 | 0.10 | |
Level 3 | Servicing rights | Single Family | Constant Prepayment Rate | Minimum | |||
Quantitative information about unobservable inputs | |||
Servicing asset, measurement input | 0.06 | 0.06 | |
Level 3 | Servicing rights | Single Family | Constant Prepayment Rate | Maximum | |||
Quantitative information about unobservable inputs | |||
Servicing asset, measurement input | 0.15 | 0.16 | |
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 | $ 135,314 | $ 122,218 | |
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 | 0.73 | 0.50 | |
Level 3 | Servicing rights | Multi-family | Constant Prepayment Rate | Weighted average | |||
Quantitative information about unobservable inputs | |||
Servicing asset, measurement input | 0.07 | 0.07 | |
Level 3 | Collateral-dependent impaired loans | |||
Quantitative information about unobservable inputs | |||
Collateral-dependent loans | $ 420 | $ 47,026 | |
Level 3 | Collateral-dependent impaired loans | Minimum | |||
Quantitative information about unobservable inputs | |||
Marketability discount (as a percent) | 0.24 | 0 | |
Level 3 | Collateral-dependent impaired loans | Maximum | |||
Quantitative information about unobservable inputs | |||
Marketability discount (as a percent) | 0.27 | 1 | |
Level 3 | Collateral-dependent impaired loans | Weighted average | |||
Quantitative information about unobservable inputs | |||
Marketability discount (as a percent) | 0.26 | 0.02 | |
Level 3 | Available for sale securities | Measurement Input, Credit Spread | |||
Quantitative information about unobservable inputs | |||
Mortgage-backed - Non-agency residential- fair value option | $ 472,192 | $ 485,500 | |
Mortgage-backed - Non-agency residential- fair value option (as a percent) | 0.02 | 0.02 | |
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) | 0.02 | 0.02 | |
Level 3 | Interest rate lock commitments | |||
Quantitative information about unobservable inputs | |||
Derivative assets | $ 174 | $ 140 | |
Derivative liabilities | $ 22 | $ 4 | |
Level 3 | Interest rate lock commitments | Measurement Input, Maturity | Minimum | |||
Quantitative information about unobservable inputs | |||
Derivative assets, (as a percent) | 0.50 | 0.45 | |
Derivative liabilities (as a percent) | 0.50 | 0.45 | |
Level 3 | Interest rate lock commitments | Measurement Input, Maturity | Maximum | |||
Quantitative information about unobservable inputs | |||
Derivative assets, (as a percent) | 0.99 | 0.99 | |
Derivative liabilities (as a percent) | 0.99 | 0.99 | |
Level 3 | Interest rate lock commitments | Measurement Input, Maturity | Weighted average | |||
Quantitative information about unobservable inputs | |||
Derivative assets, (as a percent) | 0.82 | 0.78 | |
Derivative liabilities (as a percent) | 0.82 | 0.78 | |
Level 3 | Put Option | Measurement Input, Credit Spread | |||
Quantitative information about unobservable inputs | |||
Derivative assets | $ 22,976 | $ 18,654 | |
Derivative assets, (as a percent) | 0.02 | 0.02 | |
Level 3 | Put Option | Measurement Input, Credit Spread | Weighted average | |||
Quantitative information about unobservable inputs | |||
Derivative assets, (as a percent) | 0.02 | 0.02 | |
Level 3 | Interest Rate Floor | Discount Rate | |||
Quantitative information about unobservable inputs | |||
Derivative assets | $ 8,910 | $ 6,576 | |
Level 3 | Interest Rate Floor | Discount Rate | Minimum | |||
Quantitative information about unobservable inputs | |||
Derivative assets, (as a percent) | 0.06 | 0.06 | |
Level 3 | Interest Rate Floor | Discount Rate | Maximum | |||
Quantitative information about unobservable inputs | |||
Derivative assets, (as a percent) | 0.08 | 0.07 | |
Level 3 | Interest Rate Floor | Discount Rate | Weighted average | |||
Quantitative information about unobservable inputs | |||
Derivative assets, (as a percent) | 0.07 | 0.07 |
Disclosures about Fair Value _7
Disclosures about Fair Value of Assets and Liabilities - Carrying Value and Estimated Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Financial assets: | ||
Securities held to maturity | $ 1,176,178 | $ 1,203,535 |
Loans held for sale | 84,513 | 86,663 |
Carrying value per balance sheet | ||
Financial assets: | ||
Cash and cash equivalents | 508,755 | 584,422 |
Securities purchased under agreements to resell | 3,329 | 3,349 |
Securities held to maturity | 1,175,167 | 1,204,217 |
FHLB stock | 64,215 | 48,578 |
Loans held for sale | 3,418,618 | 3,058,093 |
Loans receivable, net | 10,690,513 | 10,127,801 |
Interest receivable | 90,303 | 91,346 |
Financial liabilities: | ||
Deposits | 13,975,661 | 14,061,460 |
Short-term subordinated debt | 64,922 | 64,922 |
FHLB advances | 1,426,299 | 771,392 |
Other borrowing | 232,934 | 7,934 |
Credit linked notes | 111,830 | 119,879 |
Interest payable | 51,790 | 43,423 |
Estimated fair value | ||
Financial assets: | ||
Cash and cash equivalents | 508,755 | 584,422 |
Securities purchased under agreements to resell | 3,329 | 3,349 |
Securities held to maturity | 1,176,178 | 1,203,535 |
FHLB stock | 64,215 | 48,578 |
Loans held for sale | 3,418,618 | 3,058,093 |
Loans receivable, net | 10,646,477 | 10,088,468 |
Interest receivable | 90,303 | 91,346 |
Financial liabilities: | ||
Deposits | 13,973,624 | 14,062,457 |
Short-term subordinated debt | 64,922 | 64,922 |
FHLB advances | 1,425,888 | 771,029 |
Other borrowing | 232,934 | 7,934 |
Credit linked notes | 111,828 | 119,878 |
Interest payable | 51,790 | 43,423 |
Level 1 | Estimated fair value | ||
Financial assets: | ||
Cash and cash equivalents | 508,755 | 584,422 |
Financial liabilities: | ||
Deposits | 8,018,126 | 8,894,058 |
Level 2 | Estimated fair value | ||
Financial assets: | ||
Securities purchased under agreements to resell | 3,329 | 3,349 |
Securities held to maturity | 466,573 | 484,288 |
FHLB stock | 64,215 | 48,578 |
Loans held for sale | 3,418,618 | 3,058,093 |
Interest receivable | 90,303 | 91,346 |
Financial liabilities: | ||
Deposits | 5,955,498 | 5,168,399 |
Short-term subordinated debt | 64,922 | 64,922 |
FHLB advances | 1,425,888 | 771,029 |
Other borrowing | 232,934 | 7,934 |
Credit linked notes | 111,828 | 119,878 |
Interest payable | 51,790 | 43,423 |
Level 3 | Estimated fair value | ||
Financial assets: | ||
Securities held to maturity | 709,605 | 719,247 |
Loans receivable, net | $ 10,646,477 | $ 10,088,468 |
Leases - Other (Details)
Leases - Other (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Leases | ||
Operating lease right-of-use assets | $ 8,211 | $ 10,060 |
Operating lease liabilities | $ 9,386 | $ 11,251 |
Maximum | ||
Leases | ||
Lease period | 7 years | |
Minimum | ||
Leases | ||
Lease period | 1 year |
Leases - Balance sheet, Income
Leases - Balance sheet, Income Statement and Cash Flow Detail Regarding Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Leases. | |||
Operating lease right-of-of use asset (in other assets) | $ 8,211 | $ 10,060 | |
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) | $ 9,386 | $ 11,251 | |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. | Other Liabilities. | |
Weighted average remaining lease term (years) | 4 years 9 months 18 days | 6 years | |
Weighted average discount rate | 3.19% | 2.89% | |
Maturities of lease liabilities: | |||
One year or less | $ 2,359 | $ 2,441 | |
Year two | 2,073 | 2,064 | |
Year three | 1,951 | 2,100 | |
Year four | 1,805 | 2,046 | |
Year five | 1,123 | 1,438 | |
Thereafter | 824 | 2,128 | |
Total future minimum lease payments | 10,135 | 12,217 | |
Less: imputed interest | 749 | 966 | |
Total | 9,386 | $ 11,251 | |
Components of lease expense: | |||
Operating lease cost (in occupancy and equipment expense) | 604 | $ 583 | |
Operating cash flows from operating leases | $ 594 | $ 426 |
Deposits - Components (Details)
Deposits - Components (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Noninterest-bearing deposits | ||
Total noninterest-bearing deposits | $ 319,872 | $ 520,070 |
Interest-bearing deposits | ||
Demand deposits | 4,680,405 | 5,381,067 |
Savings deposits | 3,017,849 | 2,992,921 |
Certificates of deposit | 5,957,535 | 5,167,402 |
Total interest-bearing deposits | 13,655,789 | 13,541,390 |
Total deposits | $ 13,975,661 | $ 14,061,460 |
Deposits - Maturities of deposi
Deposits - Maturities of deposits (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Deposits | ||
Due within one year | $ 5,865,446 | |
Due in one year to two years | 76,281 | |
Due in two years to three years | 15,808 | |
Total time deposits | $ 5,957,535 | $ 5,167,402 |
Deposits - Brokered deposits (D
Deposits - Brokered deposits (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Deposits | ||
Brokered certificates of deposit | $ 5,351,397 | $ 4,465,825 |
Brokered savings deposits | 1,338 | 589 |
Brokered deposit on demand accounts | 400,159 | 1,504,230 |
Total brokered deposits | $ 5,752,894 | $ 5,970,644 |
Borrowings - Components (Detail
Borrowings - Components (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Borrowings | ||
Other borrowings | $ 7,934 | $ 7,934 |
Borrowings | 1,835,985 | 964,127 |
Federal Reserve discount window borrowings | ||
Borrowings | ||
Borrowings | 50,000 | |
Short-term subordinated debt | ||
Borrowings | ||
Borrowings | 64,922 | 64,922 |
FHLB advances | ||
Borrowings | ||
Borrowings | 1,426,299 | 771,392 |
American Financial Exchange borrowing | ||
Borrowings | ||
Borrowings | 175,000 | |
Credit linked notes, net of debt discount | ||
Borrowings | ||
Borrowings | $ 111,830 | $ 119,879 |
Borrowings - Other (Details)
Borrowings - Other (Details) - FHLB Advances - USD ($) $ in Millions | 3 Months Ended | |
Mar. 22, 2024 | Mar. 31, 2024 | |
Borrowings | ||
Outstanding balance | $ 500 | |
Basis spread on variable rate (as a percent) | 0.10% | |
FHLB advances interest rate | 5.43% | |
FHLB has an option to cancel the agreement | 60 days | |
Number of days prior notice required for cancellation of debt agreement. | 1 day |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Net Income | ||
Net Income | $ 87,054 | $ 54,955 |
Dividends on preferred stock | (8,667) | (8,667) |
Net income allocated to common shareholders | $ 78,387 | $ 46,288 |
Weighted-Average Shares | ||
Weighted average shares - Basic | 43,305,985 | 43,179,604 |
Effect of dilutive securities-restricted stock awards | 160,662 | 111,175 |
Weighted average shares - diluted | 43,466,647 | 43,290,779 |
Per Share Amount | ||
Basic earnings per share | $ 1.81 | $ 1.07 |
Diluted earnings per share | $ 1.80 | $ 1.07 |
Share-Based Payment Plans - Inc
Share-Based Payment Plans - Incentive Plan (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Nov. 30, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Non executive directors | |||
Plan disclosures | |||
Value of shares available for issuance for compensation related to annual fees | $ 70,000 | ||
Shares issued | 3,164 | 2,863 | |
2017 Plan | |||
Plan disclosures | |||
Shares issued | 85,212 | 84,335 |
Share-Based Payment Plans - ESO
Share-Based Payment Plans - ESOP (Details) - ESOP - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Employee Stock Ownership Plan | ||
Expense recognized for the contribution to the plan | $ 287,000 | $ 267,000 |
Shares contributed to the plan | 23,414 | 33,293 |
Preferred Stock (Details)
Preferred Stock (Details) | 3 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2022 USD ($) shares | Sep. 27, 2022 USD ($) $ / shares shares | Mar. 23, 2021 USD ($) $ / shares shares | Aug. 19, 2019 USD ($) $ / shares shares | Apr. 12, 2019 USD ($) shares | Mar. 28, 2019 USD ($) $ / shares shares | Mar. 31, 2024 $ / shares | Dec. 31, 2023 $ / shares | Feb. 28, 2024 $ / shares | |
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 | |||||||||
Preferred stock, dividend rate (as a percent) | 6% | 6% | |||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | |||||||
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 | |||||||||
Depositary shares issued (in shares) | shares | 5,200,000 | ||||||||
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 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Segment Information | |||
Interest income | $ 314,173 | $ 211,294 | |
Interest expense | 187,117 | 110,601 | |
Net Interest Income | 127,056 | 100,693 | |
Provision for credit losses | 4,726 | 6,867 | |
Net Interest Income After Provision for Credit Losses | 122,330 | 93,826 | |
Noninterest income | 40,874 | 14,264 | |
Noninterest expense | 48,912 | 34,772 | |
Income Before Income Taxes | 114,292 | 73,318 | |
Income taxes | 27,238 | 18,363 | |
Net Income | 87,054 | 54,955 | |
Total assets | 17,822,576 | 14,240,966 | $ 16,952,516 |
Other | |||
Segment Information | |||
Interest income | 3,238 | 1,144 | |
Interest expense | (766) | (1,719) | |
Net Interest Income | 4,004 | 2,863 | |
Net Interest Income After Provision for Credit Losses | 4,004 | 2,863 | |
Noninterest income | (3,339) | (2,177) | |
Noninterest expense | 8,965 | 7,216 | |
Income Before Income Taxes | (8,300) | (6,530) | |
Income taxes | (2,130) | (1,571) | |
Net Income | (6,170) | (4,959) | |
Total assets | 276,795 | 150,695 | |
Multi-family Mortgage Banking | Operating Segments | |||
Segment Information | |||
Interest income | 1,746 | 1,106 | |
Interest expense | 20 | ||
Net Interest Income | 1,726 | 1,106 | |
Net Interest Income After Provision for Credit Losses | 1,726 | 1,106 | |
Noninterest income | 40,467 | 16,597 | |
Noninterest expense | 19,571 | 14,631 | |
Income Before Income Taxes | 22,622 | 3,072 | |
Income taxes | 6,013 | 1,106 | |
Net Income | 16,609 | 1,966 | |
Total assets | 416,454 | 341,487 | |
Mortgage Warehousing | Operating Segments | |||
Segment Information | |||
Interest income | 84,901 | 42,318 | |
Interest expense | 56,140 | 27,794 | |
Net Interest Income | 28,761 | 14,524 | |
Provision for credit losses | 940 | 1,364 | |
Net Interest Income After Provision for Credit Losses | 27,821 | 13,160 | |
Noninterest income | 3,317 | 1,033 | |
Noninterest expense | 4,798 | 2,755 | |
Income Before Income Taxes | 26,340 | 11,438 | |
Income taxes | 6,150 | 2,797 | |
Net Income | 20,190 | 8,641 | |
Total assets | 5,369,299 | 3,318,491 | |
Banking | Operating Segments | |||
Segment Information | |||
Interest income | 224,288 | 166,726 | |
Interest expense | 131,723 | 84,526 | |
Net Interest Income | 92,565 | 82,200 | |
Provision for credit losses | 3,786 | 5,503 | |
Net Interest Income After Provision for Credit Losses | 88,779 | 76,697 | |
Noninterest income | 429 | (1,189) | |
Noninterest expense | 15,578 | 10,170 | |
Income Before Income Taxes | 73,630 | 65,338 | |
Income taxes | 17,205 | 16,031 | |
Net Income | 56,425 | 49,307 | |
Total assets | $ 11,760,028 | $ 10,430,293 |
Subsequent Events (Details)
Subsequent Events (Details) - 7% Series A Preferred Stock - USD ($) $ / shares in Units, $ in Millions | Apr. 01, 2024 | Mar. 31, 2024 | Feb. 28, 2024 | Dec. 31, 2023 |
Subsequent events | ||||
Preferred stock liquidation preference (in dollars per share) | $ 25 | $ 25 | $ 25 | |
Subsequent event | ||||
Subsequent events | ||||
Preferred stock liquidation preference (in dollars per share) | $ 25 | |||
Preferred stock liquidation preference value | $ 52 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 87,054 | $ 54,955 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
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 |