MERCHANTS BANCORP, 10-Q filed on 8/9/2021
Quarterly Report
v3.21.2
Document and Entity Information - shares
 6 Months Ended
Jun. 30, 2021
Aug. 02, 2021
Document Information    
Entity Registrant Name MERCHANTS BANCORP  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2021  
Document Transition Report false  
Entity File Number 001-38258  
Amendment Flag false  
Entity Incorporation, State or Country Code IN  
Entity Tax Identification Number 20-5747400  
Entity Address, Address Line One 410 Monon Blvd  
Entity Address, City or Town Carmel  
Entity Address, State or Province IN  
Entity Address, Postal Zip Code 46032  
City Area Code 317  
Local Phone Number 569-7420  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   28,783,599
Entity Central Index Key 0001629019  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
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  
v3.21.2
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Jun. 30, 2021
Dec. 31, 2020
Assets    
Cash and due from banks $ 13,745 $ 10,063
Interest-earning demand accounts 388,304 169,665
Cash and cash equivalents 402,049 179,728
Securities purchased under agreements to resell 6,507 6,580
Mortgage loans in process of securitization 461,914 338,733
Available for sale securities 315,260 269,802
Federal Home Loan Bank (FHLB) stock 70,767 70,656
Loans held for sale (includes $26,623 and $40,044, respectively at fair value) 2,955,390 3,070,154
Loans receivable, net of allowance for loan losses of $28,696 and $27,500, respectively 5,444,227 5,507,926
Premises and equipment, net 31,384 29,761
Mortgage servicing rights 98,331 82,604
Interest receivable 22,068 21,770
Goodwill 15,845 15,845
Intangible assets, net 1,990 2,283
Other assets and receivables 55,800 49,533
Total assets 9,881,532 9,645,375
Deposits    
Noninterest-bearing 814,567 853,648
Interest-bearing 7,225,011 6,554,418
Total deposits 8,039,578 7,408,066
Borrowings 701,373 1,348,256
Deferred and current tax liabilities, net 18,819 20,405
Other liabilities 62,698 58,027
Total liabilities 8,822,468 8,834,754
Commitments and Contingencies
Shareholders' Equity    
Common stock, without par value Authorized - 50,000,000 shares Issued and outstanding - 28,783,599 shares at June 30, 2021 and 28,747,083 shares at December 31, 2020 136,836 135,857
Retained earnings 560,083 461,744
Accumulated other comprehensive income (4) 374
Total shareholders' equity 1,059,064 810,621
Total liabilities and shareholders' equity 9,881,532 9,645,375
8% Preferred Stock    
Shareholders' Equity    
Preferred stock   41,581
7% 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  
v3.21.2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
 6 Months Ended 12 Months Ended
Jun. 30, 2021
Dec. 31, 2020
Loans held for sale at fair value $ 26,623 $ 40,044
Allowance for loans losses $ 28,696 $ 27,500
Stockholders' Equity:    
Common stock, without par value (in dollars per share)
Common stock, shares authorized 50,000,000 50,000,000
Common stock, shares issued 28,783,599 28,747,083
Common stock, shares outstanding 28,783,599 28,747,083
Preferred stock, without par value (in dollars per share)
Preferred stock, shares authorized 5,000,000 5,000,000
8% Preferred Stock    
Stockholders' Equity:    
Preferred stock, dividend rate (as a percent) 8.00% 8.00%
Preferred stock liquidation preference (in dollars per share) $ 1,000 $ 1,000
Preferred stock, shares authorized 50,000 50,000
Preferred stock, shares issued 0 41,625
Preferred stock, shares outstanding 0 41,625
7% Preferred Stock    
Stockholders' Equity:    
Preferred stock, dividend rate (as a percent) 7.00% 7.00%
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) 6.00% 6.00%
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) 6.00%  
Preferred stock liquidation preference (in dollars per share) $ 1,000  
Preferred stock, shares authorized 250,000  
Preferred stock, shares issued 196,181  
Preferred stock, shares outstanding 196,181  
Depositary shares 7,847,233  
v3.21.2
Condensed Consolidated Statements of Income - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Interest Income        
Loans $ 68,276 $ 63,979 $ 143,793 $ 117,543
Mortgage loans in process of securitization 2,724 2,534 5,860 5,330
Investment securities:        
Available for sale - taxable 833 972 1,187 2,294
Available for sale - tax exempt 9 38 20 75
Federal Home Loan Bank stock 392 447 776 686
Other 204 234 351 2,693
Total interest income 72,438 68,204 151,987 128,621
Interest Expense        
Deposits 6,683 15,398 12,783 36,028
Borrowed funds 1,348 1,572 2,834 3,006
Total interest expense 8,031 16,970 15,617 39,034
Net Interest Income 64,407 51,234 136,370 89,587
Provision (credit) for loan losses (315) 1,745 1,348 4,743
Net Interest Income After Provision for Loan Losses 64,722 49,489 135,022 84,844
Noninterest Income        
Gain on sale of loans 25,122 17,084 53,742 38,250
Loan servicing fees, net 1,727 1,597 9,678 (4,227)
Mortgage warehouse fees 3,079 5,475 7,195 8,221
Other income 2,927 2,032 6,176 3,846
Total noninterest income 32,855 26,188 76,791 46,090
Noninterest Expense        
Salaries and employee benefits 18,869 11,828 40,143 26,068
Loan expenses 1,921 2,039 4,444 3,203
Occupancy and equipment 1,808 1,383 3,435 2,875
Professional fees 779 726 1,201 1,295
Deposit insurance expense 651 1,851 1,322 3,637
Technology expense 971 716 1,908 1,326
Other expense 3,184 1,739 5,814 4,171
Total noninterest expense 28,183 20,282 58,267 42,575
Income Before Income Taxes 69,394 55,395 153,546 88,359
Provision for income taxes 17,977 14,233 40,146 22,614
Net Income 51,417 41,162 113,400 65,745
Dividends on preferred stock (5,659) (3,619) (9,416) (7,237)
Net Income Allocated to Common Shareholders $ 45,758 $ 37,543 $ 103,984 $ 58,508
Basic Earnings Per Share $ 1.59 $ 1.31 $ 3.61 $ 2.04
Diluted Earnings Per Share $ 1.58 $ 1.31 $ 3.60 $ 2.03
Weighted-Average Shares Outstanding Basic (in Shares) 28,782,813 28,743,894 28,777,482 28,739,263
Weighted-Average Shares Outstanding Diluted (in Shares) 28,874,325 28,762,349 28,862,399 28,760,880
v3.21.2
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Condensed Consolidated Statements of Comprehensive Income        
Net Income $ 51,417 $ 41,162 $ 113,400 $ 65,745
Other Comprehensive Income (Loss):        
Net change in unrealized gains/(losses) on investment securities available for sale, net of tax (expense)/benefits of $87, $83, $130 and $(69), respectively (253) (218) (378) 250
Other comprehensive income (loss) for the period (253) (218) (378) 250
Comprehensive Income $ 51,164 $ 40,944 $ 113,022 $ 65,995
v3.21.2
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Condensed Consolidated Statements of Comprehensive Income        
Tax (expense)/benefits on net change in unrealized gains/(losses) on investment securities available for sale $ 87 $ 83 $ 130 $ (69)
v3.21.2
Condensed Consolidated Statements of Shareholders' Equity - USD ($)
$ in Thousands
Common Stock
Preferred Stock
8% Preferred Stock
Preferred Stock
7% Preferred Stock
Preferred Stock
6% Series B Preferred Stock
Preferred Stock
6% Series C Preferred Stock
Private Placement
Preferred Stock
6% Series C Preferred Stock
Retained Earnings
6% Series B Preferred Stock
Retained Earnings
6% Series C Preferred Stock
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Total
Condensed Consolidated Statements of Shareholders' Equity                      
Balance at end of the period $ 135,640 $ 41,581 $ 50,221           $ 304,984 $ 458  
Balance at end of the period (in shares) 28,706,438 41,625 2,081,800 125,000              
Net income                 65,745   $ 65,745
Shares issued for stock compensation plans, net of taxes $ 309                    
Shares issued for stock compensation plans, net of taxes (in shares) 39,176                    
Dividends on 8% preferred stock, annually                 (1,666)    
Dividends on 7% preferred stock, annually                 (1,821)    
Dividends on 6% preferred stock, annually             $ (3,750)        
Dividends on common stock, annually                 (4,597)    
Other comprehensive income (loss)                   250 250
Balance at end of the period $ 135,746 $ 41,581 $ 50,221 $ 120,844         323,651 926  
Balance at end of the period (in shares) 28,742,484 41,625 2,081,800 125,000              
Net income                 41,162   41,162
Shares issued for stock compensation plans, net of taxes $ 203                    
Shares issued for stock compensation plans, net of taxes (in shares) 3,130                    
Dividends on 8% preferred stock, annually                 (833)    
Dividends on 7% preferred stock, annually                 (911)    
Dividends on 6% preferred stock, annually             (1,875)        
Dividends on common stock, annually                 (2,299)    
Other comprehensive income (loss)                   (218) (218)
Balance at end of the period $ 135,949 $ 41,581 $ 50,221 $ 120,844         358,895 708 708,198
Balance at end of the period (in shares) 28,745,614 41,625 2,081,800 125,000              
Balance at end of the period $ 135,857 $ 41,581 $ 50,221 $ 120,844         461,744 374 810,621
Balance at end of the period (in shares) 28,747,083 41,625 2,081,800 125,000              
Net income                 113,400   113,400
Distribution to employee stock ownership plan $ 537                    
Distribution to employee stock ownership plan (in shares) 19,433                    
Shares issued for stock compensation plans, net of taxes $ 442                    
Shares issued for stock compensation plans, net of taxes (in shares) 17,083                    
Redemption of 8% preferred stock   $ (41,581)             (45)    
Redemption of 8% preferred stock (in shares)   (41,625)                  
Issuance of shares, net of offering expenses         $ 46,158 $ 144,926          
Issuance of shares, net of offering expenses (in shares)         46,181 150,000          
Dividends on 8% preferred stock, annually                 (833)    
Final dividend for redemption of 8% preferred stock                 (139)    
Dividends on 7% preferred stock, annually                 (1,821)    
Dividends on 6% preferred stock, annually             (3,750) $ (2,873)      
Dividends on common stock, annually                 (5,181)    
Deconsolidation of entities                 (419)    
Other comprehensive income (loss)                   (378) (378)
Balance at end of the period $ 136,474 $ 41,581 $ 50,221 $ 120,844   $ 144,925     516,961 249  
Balance at end of the period (in shares) 28,782,139 41,625 2,081,800 125,000   150,000          
Net income                 51,417   51,417
Shares issued for stock compensation plans, net of taxes $ 362                    
Shares issued for stock compensation plans, net of taxes (in shares) 1,460                    
Redemption of 8% preferred stock   $ (41,581)             (45)    
Redemption of 8% preferred stock (in shares)   (41,625)                  
Issuance of shares, net of offering expenses         $ 46,158 $ 1          
Issuance of shares, net of offering expenses (in shares)         46,181            
Dividends on 7% preferred stock, annually                 (911)    
Dividends on 6% preferred stock, annually             $ (1,875) $ (2,873)      
Dividends on common stock, annually                 (2,591)    
Other comprehensive income (loss)                   (253) (253)
Balance at end of the period $ 136,836   $ 50,221 $ 120,844   $ 191,084     $ 560,083 $ (4) $ 1,059,064
Balance at end of the period (in shares) 28,783,599   2,081,800 125,000   196,181          
v3.21.2
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Dividends on common stock per share $ 0.36 $ 0.32 $ 0.36 $ 0.32
8% Preferred Stock        
Preferred stock, dividend rate (as a percent)     8.00%  
8% Preferred Stock | Preferred Stock        
Preferred stock, dividend rate (as a percent) 8.00% 8.00% 8.00% 8.00%
Dividends on preferred stock per share $ 80.00 $ 80.00 $ 80.00 $ 80.00
Final dividend for redemption of preferred stock per share $ 3.33 $ 3.33 $ 3.33 $ 3.33
7% Preferred Stock        
Preferred stock, dividend rate (as a percent)     7.00%  
7% Preferred Stock | Preferred Stock        
Preferred stock, dividend rate (as a percent) 7.00% 7.00% 7.00% 7.00%
Dividends on preferred stock per share $ 1.75 $ 1.75 $ 1.75 $ 1.75
6% Series B Preferred Stock        
Preferred stock, dividend rate (as a percent)     6.00%  
6% Series B Preferred Stock | Preferred Stock        
Preferred stock, dividend rate (as a percent) 6.00% 6.00% 6.00% 6.00%
Dividends on preferred stock per share $ 60.00 $ 60.00 $ 60.00 $ 60.00
6% Series C Preferred Stock        
Preferred stock, dividend rate (as a percent)     6.00%  
6% Series C Preferred Stock | Preferred Stock        
Preferred stock, dividend rate (as a percent) 6.00% 6.00% 6.00% 6.00%
Dividends on preferred stock per share $ 60.00 $ 60.00 $ 60.00 $ 60.00
Offering expenses on issuance of stock     $ 5,100,000  
v3.21.2
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Operating activities:    
Net income $ 113,400 $ 65,745
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation 1,061 915
Provision for loan losses 1,348 4,743
Gain on sale of loans (53,742) (38,250)
Proceeds from sales of loans 30,088,479 33,261,044
Loans and participations originated and purchased for sale (29,764,386) (35,013,737)
Change in mortgage servicing rights for paydowns and fair value adjustments 543 9,442
Net change in:    
Mortgage loans in process of securitization (123,181) (248,897)
Other assets and receivables (4,072) (17,371)
Other liabilities 12,071 3,208
Other (906) 2,228
Net cash provided by (used in) operating activities 270,615 (1,970,930)
Investing activities:    
Net change in securities purchased under agreements to resell 73 72
Purchases of available for sale securities (130,204) (360,029)
Proceeds from the sale of available for sale securities 34,469 0
Proceeds from calls, maturities and paydowns of available for sale securities 49,444 390,328
Purchases of loans (250,678) (104,971)
Net change in loans receivable (126,810) (1,020,199)
Proceeds from sale of loans receivable 262,086  
Purchase of FHLB stock (111) (32,855)
Proceeds from sale of mortgage servicing rights 438  
Purchases of premises and equipment (2,686) (1,036)
Cash (paid) received in deconsolidation of subsidiary (464)  
Purchase of limited partnership interests and other tax credits (1,603) (1,314)
Other investing activities 366 (480)
Net cash (used in) investing activities (165,680) (1,130,484)
Financing activities:    
Net change in deposits 629,407 1,430,553
Proceeds from borrowings 20,406,224 11,275,355
Repayment of borrowings (21,053,107) (9,698,441)
Proceeds from notes payable   2,760
Proceeds from issuance of preferred stock 191,084  
Redemption of preferred stock (41,625)  
Payments of contingent consideration   (501)
Dividends (14,597) (11,834)
Net cash provided by financing activities 117,386 2,997,892
Net Change in Cash and Cash Equivalents 222,321 (103,522)
Cash and Cash Equivalents, Beginning of Period 179,728 506,709
Cash and Cash Equivalents, End of Period 402,049 403,187
Additional Cash Flows Information:    
Interest paid 14,622 44,840
Income taxes paid 41,667 $ 17,632
Transfer of loans from loans receivable to loans held for sale $ 166,688  
v3.21.2
Basis of Presentation
 6 Months Ended
Jun. 30, 2021
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”) and Farmers-Merchants Bank of Illinois (“FMBI”). Merchants Bank’s primary operating subsidiaries include Merchants Capital Corp. (‘MCC”) and Merchants Capital Servicing, LLC (“MCS”). 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, 2020, which has been derived from audited financial statements, and unaudited condensed consolidated financial statements of the Company as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020, were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company as of and for the year ended December 31, 2020 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 June 30, 2021 and the results of operations for the three and six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020. All interim amounts have not been audited and the results of operations for the three and six months ended June 30, 2021, herein are not necessarily indicative of the results of operations to be expected for the entire year.

Principles of Consolidation

The unaudited condensed consolidated financial statements as of and for the period ended June 30, 2021 and 2020 include results from the Company, and its wholly owned subsidiaries, Merchants Bank, and FMBI. Also included are Merchants Bank’s primary operating subsidiaries, MCC and MCS, as well as all 100% directly and indirectly owned subsidiaries owned by Merchants Bancorp.

Additionally, the unaudited condensed consolidated financial statements include consolidated results from certain entities primarily involved in single-family debt financing until January 30, 2021, while the Company was deemed to be 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. All significant intercompany accounts and transactions have been eliminated in consolidation.

On February 1, 2021, the Company’s debt fund entities were restructured in such a way that its ownership and participation was significantly reduced with the inclusion of additional, unrelated investors and the Company was no longer classified as a primary beneficiary.  Accordingly, results from these entities were no longer consolidated after this date, in accordance with the consolidation guidelines of the Accounting Standards Update of Topic 810. Following the deconsolidation, the carrying value of assets and liabilities of these entities were removed from the consolidated balance sheet, and the continuing investments were recorded at fair value at the date of deconsolidation. The total amount deconsolidated from the balance sheet included net assets of approximately $10 million, consisting primarily of $66.6 million in loans receivable, and $52.7 million in borrowings with Merchants Bank that was previously eliminated in consolidation.  The fair value of its continuing investments was approximately $10 million and has been reported in Other Assets after deconsolidation. The estimated fair value was determined based on third-party evaluations of similar assets in the underlying business. The difference between the fair value of these deconsolidated entities and their

carrying value was deemed to be immaterial, resulting in no gain or loss on deconsolidation. The maximum loss exposure that would be absorbed by the Company in the event that these unconsolidated investments were deemed worthless is approximately $10.0 million at June 30, 2021.  These continuing investments after deconsolidation are classified as variable interest entities, will not be consolidated, and are accounted for under the equity method of accounting. The Company will analyze whether its entities are the primary beneficiary on an ongoing basis. Changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment.

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 loan losses, loan servicing rights and fair values of financial instruments. The uncertainties related to the COVID-19 pandemic could cause significant changes to these estimates compared to what was known at the time these financial statements were prepared.

Reclassifications

​

Certain reclassifications may have been made to the 2020 financial statements to conform to the financial statement presentation as of and for the three and six months ended June 30, 2021. These reclassifications had no effect on net income.
v3.21.2
Securities Available For Sale
 6 Months Ended
Jun. 30, 2021
Securities Available For Sale  
Securities Available For Sale

Note 2:   Securities Available For Sale

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities were as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

​

​

​

​

Gross

​

Gross

​

​

​

​

Amortized

​

Unrealized

​

Unrealized

​

Fair

​

    

Cost

    

Gains

    

Losses

    

Value

​

​

(In thousands)

Available for sale securities:

 

​

  

 

​

  

 

​

  

 

​

  

Treasury notes

​

$

5,013

​

$

10

​

$

3

​

$

5,020

Federal agencies

​

 

254,962

​

 

13

​

 

412

​

 

254,563

Municipals

​

 

5,931

​

 

107

​

 

—

​

 

6,038

Mortgage-backed - Government-sponsored entity (GSE) - residential

​

 

49,383

​

 

256

​

 

—

​

 

49,639

Total available for sale securities

​

$

315,289

​

$

386

​

$

415

​

$

315,260

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

​

​

​

​

Gross

​

Gross

​

​

​

​

Amortized

​

Unrealized

​

Unrealized

​

Fair

​

    

Cost

    

Gains

    

Losses

    

Value

​

​

(In thousands)

Available for sale securities:

 

​

  

 

​

  

 

​

  

 

​

  

Treasury notes

​

$

6,535

​

$

24

​

$

—

​

$

6,559

Federal agencies

​

 

234,954

​

 

103

​

 

17

​

 

235,040

Municipals

​

 

5,935

​

 

90

​

 

—

​

 

6,025

Mortgage-backed - Government-sponsored entity (GSE) - residential

​

 

21,899

​

 

279

​

 

—

​

 

22,178

Total available for sale securities

​

$

269,323

​

$

496

​

$

17

​

$

269,802

​

Mortgage-backed securities in the table above for June 30, 2021 include securities purchased from Freddie Mac following the loan sale and securitization arrangement with Freddie Mac described in Note 4: Loans and Allowance for Loan Losses. These securities were valued at $28.4 million as of June 30, 2021.

The amortized cost and fair value of available for sale securities at June 30, 2021 and December 31, 2020, 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.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

December 31, 2020

​

​

Amortized

​

Fair

​

Amortized

​

Fair

​

    

Cost

    

Value

    

Cost

    

Value

Contractual Maturity

​

(In thousands)

Within one year

​

$

7,066

​

$

7,069

​

$

6,288

​

$

6,302

After one through five years

​

 

257,982

​

 

257,620

​

 

239,770

​

 

239,877

After five through ten years

​

 

513

​

 

553

​

 

515

​

 

549

After ten years

​

 

345

​

 

379

​

 

851

​

 

896

​

​

 

265,906

​

 

265,621

​

 

247,424

​

 

247,624

Mortgage-backed - Government-sponsored entity (GSE) - residential

​

 

49,383

​

 

49,639

​

 

21,899

​

 

22,178

​

​

$

315,289

​

$

315,260

​

$

269,323

​

$

269,802

​

During the three and six months ended June 30, 2021 proceeds from sales of $34.5 million securities available for sale were sold, and no gain or loss was recognized. During the three and six months ended June 30 2020, no securities available for sale were sold.

​

The following tables show the Company’s investments’ gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2021 and December 31, 2020:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

​

​

​

​

​

​

​

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)

Available for sale securities:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Treasury notes

​

$

1,996

​

$

3

​

$

—

​

$

—

​

$

1,996

​

$

3

Federal agencies

​

​

179,553

​

​

412

​

​

—

​

​

—

​

​

179,553

​

​

412

​

​

$

181,549

​

$

415

​

$

—

​

$

—

​

$

181,549

​

$

415

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

​

​

​

​

​

​

​

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)

Available for sale securities:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Federal agencies

​

$

69,939

​

$

17

​

$

—

​

$

—

​

$

69,939

​

$

17

​

Other-than-temporary Impairment

Unrealized losses on securities have not been recognized to income because the Company has the intent and ability to hold the securities for the foreseeable future, and the decline in fair value is primarily due to increased market interest rates. The fair value is expected to recover as the securities approach the maturity date.
v3.21.2
Mortgage Loans in Process of Securitization
 6 Months Ended
Jun. 30, 2021
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 Government National Mortgage Association (“Ginnie Mae”) mortgage backed securities and Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”) participation certificates, all of which are pending settlement with firm investor commitments to purchase the securities, typically occurring within 30 days. The fair value increases recorded in earnings for mortgage loans in process of securitization totaled $7.0 million and $3.6 million at June 30, 2021 and 2020, respectively.
v3.21.2
Loans and Allowance for Loan Losses
 6 Months Ended
Jun. 30, 2021
Loans and Allowance for Loan Losses  
Loans and Allowance for Loan Losses

Note 4:   Loans and Allowance for Loan Losses

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 allowance for loan losses, 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 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. For impaired loans that are considered to be solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

When cash payments for accrued interest are received on impaired loans in each loan class, the Company records the payment as interest income unless collection of the remaining recorded principal amount is doubtful, at which time

payments are used to reduce the principal balance of the loan. Troubled debt restructured loans recognize interest income on an accrual basis at the renegotiated rate if the loan is in compliance with the modified terms.

The Company offers warehouse loans or credit to fund mortgage loans held for sale from closing until sale to an investor. Under a warehousing arrangement the Company funds a mortgage loan as secured financing. The warehousing arrangement is secured by the underlying mortgages and a combination of deposits, personal guarantees and advance rates. The Company typically holds the collateral until it is sent under a bailee arrangement instructing the investor to send proceeds to the Company. Typical investors are large financial institutions or government agencies. Interest earned from the time of funding to the time of sale is recognized as interest income as accrued. Fees earned agreements are recognized when collected as noninterest income.

Loan Sale and Freddie Mac Q Series Securitization

On May 7, 2021, the Company entered into an arrangement through a third-party trust and Freddie Mac, by which a $262.0 million portfolio of multi-family loans were sold to the trust and ultimately securitized through Freddie Mac and sold to investors. The Company purchased two of the securities for a total of $28.7 million. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $676,000 net loss on sale was recognized, which included the impact of establishing a risk share allowance and mortgage servicing rights associated with this transaction.  

Beyond holding the two securities, the Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any material breach in representation.  In connection with the securitization and purchase of one of the securities, Merchants maintains a first loss position in the underlying loan portfolio not to exceed 10% of the unpaid principal amount of the loans comprising the securitization pool at settlement, or approximately $26.2 million.  Therefore, a reserve of $1.4 million for estimated losses was established with respect to the first loss obligation at May 7, 2021, which is included in other liabilities on the consolidated balance sheets.  These estimated losses are consistent with the amount in allowance for loan losses that was released when the loans were sold. If the Company sells one of the securities, this first loss obligation would be eliminated.

As part of the securitization transaction, Merchants released all mortgage servicing obligations and rights to Freddie Mac who was designated as the Master Servicer. As Master Servicer, Freddie Mac appointed the Company with sub-servicing obligations, which include obligations to collect and remit payments of principal and interest, manage payments of taxes and insurance, and otherwise administer the underlying loans. Accordingly, the company recognized a mortgage servicing asset of $730,000 on the sale date.

 Loan Portfolio Summary‌ 

Loans receivable at June 30, 2021 and December 31, 2020 include:

​

​

​

​

​

​

​

​

​

​

June 30, 

​

December 31, 

​

    

2021

    

2020

​

​

(In thousands)

​

​

​

​

​

​

​

Mortgage warehouse lines of credit

​

$

1,177,940

​

$

1,605,745

Residential real estate

​

 

806,325

​

 

678,848

Multi-family and healthcare financing

​

 

2,970,770

​

 

2,749,020

Commercial and commercial real estate

​

 

409,710

​

 

387,294

Agricultural production and real estate

​

 

92,786

​

 

101,268

Consumer and margin loans

​

 

15,392

​

 

13,251

​

​

 

5,472,923

​

 

5,535,426

Less

​

 

  

​

 

  

Allowance for loan losses

​

 

28,696

​

 

27,500

​

​

​

​

​

​

​

Loans Receivable

​

$

5,444,227

​

$

5,507,926

​

In response to the COVID-19 global pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) established the Paycheck Protection Program (“PPP”) to provide loans for eligible business/not-for-profits. These loans qualify for forgiveness when used for qualifying expenses during the appropriate period. Loans funded through the PPP are fully guaranteed by the U.S. government. Commercial and commercial real estate loans at June 30, 2021 and December 31, 2020 include PPP loans with principal balances of $53.6 million and $60.2 million, respectively, that had not yet been forgiven.

Risk characteristics applicable to each segment of the loan portfolio are described as follows.

Mortgage Warehouse Lines of Credit (MTG WHLOC): Under its warehouse program, the Company provides warehouse financing arrangements to approved mortgage companies for the origination and sale of residential mortgage loans and to a lesser extent multi-family loans. Agency eligible, governmental and jumbo residential mortgage loans that are secured by mortgages placed on existing one-to-four family dwellings may be originated or purchased and placed on each mortgage warehouse line.

As a secured repurchase agreement, collateral pledged to the Company secures each individual mortgage until the lender sells the loan in the secondary market. A traditional secured warehouse line of credit typically carries a base interest rate of 30-day LIBOR, or mortgage note rate plus or minus a margin.

Risk is evident if there is a change in the fair value of mortgage loans originated by mortgage bankers in warehouse, the sale of which is the expected source of repayment of the borrowings under a warehouse line of credit.

Residential Real Estate Loans (RES RE): Real estate loans are secured by owner-occupied 1-4 family residences. Repayment of residential real estate loans is primarily dependent on the personal income and credit rating of the borrowers. First-lien HELOC mortgages included in this segment typically carry a base rate of 30-day LIBOR, plus a margin.

Multi-Family and Healthcare Financing (MF RE): The Company engages in multi-family and healthcare financing, including construction loans, specializing in originating and servicing loans for multi-family rental and senior living properties. In addition, the Company originates loans secured by an assignment of federal income tax credits by partnerships invested in multi-family real estate projects. Construction and land loans are generally based upon estimates of costs and estimated value of the completed project and include independent appraisal reviews and a financial analysis of the developers and property owners. Sources of 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. These loans are considered to be higher risk than single-family real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic conditions and the availability of long-term financing. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economy in the Company’s market area. Repayment of these loans depends on the successful operation of a business or property and the borrower’s cash flows.

Commercial Lending and Commercial Real Estate Loans (CML & CRE): The commercial lending and commercial real estate portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions, as well as loans to commercial customers to finance land and improvements. It also includes loans collateralized by mortgage servicing rights and loan sale proceeds of mortgage warehouse customers. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations. PPP loans and Small Business Association (“SBA”) loans are included in this category.

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.

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.

Allowance for Loan Losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to net interest income. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of 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. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers non-impaired loans and is based on historical charge-off experience and expected loss from default derived from the Company’s internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by the fair value of the collateral if the loan is collateral dependent, the loan’s obtainable market price, or the present value of expected future cash flows discounted at the loan’s effective interest rate. For impaired loans where the Company utilizes discounted cash flows to determine the level of impairment, the Company includes the entire change in the present value of cash flows as a provision for loan loss.

Groups of loans with similar risk characteristics are collectively evaluated for impairment based on the group’s historical loss experience adjusted for changes in trends, conditions and other relevant factors that affect repayment of the loans. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower.

In the course of working with borrowers, the Company may choose to restructure the contractual terms of certain loans. In restructuring the loan, the Company attempts to work out an alternative payment schedule with the borrower in

order to optimize collectability of the loan. A troubled debt restructuring (“TDR”) occurs when, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status, and the restructuring of the loan may include the transfer of assets from the borrower to satisfy the debt, a modification of loan terms, or a combination of the two.

Nonaccrual loans, including TDRs that have not met the six-month minimum performance criterion, are reported as nonperforming loans. For all loan classes, it is the Company’s policy to have any restructured loans which are on nonaccrual status prior to being restructured remain on nonaccrual status until three months of satisfactory borrower performance, at which time management would consider its return to accrual status. A loan is generally classified as nonaccrual when the Company believes that receipt of principal and interest is doubtful under the terms of the loan agreement. Most generally, this is at 90 or more days past due.

With regard to determination of the amount of the allowance for credit losses, restructured loans are considered to be impaired. As a result, the determination of the amount of impaired loans for each loan portfolio segment within troubled debt restructurings is the same as detailed previously above.

The following tables present, by loan portfolio segment, the activity in the allowance for loan losses for the three and six months ended June 30, 2021 and 2020 and the recorded investment in loans and impairment method as of June 30, 2021:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At or For the Three Months Ended June 30, 2021

​

 

MTG WHLOC

 

RES RE

 

MF RE

 

CML & CRE

 

AG & AGRE

 

CON & MAR

 

TOTAL

​

​

(In thousands)

Allowance for loan losses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

3,321

​

$

3,600

 

$

17,136

​

$

4,264

​

$

632

​

$

138

​

$

29,091

Provision (credit) for loan losses

​

 

(386)

​

 

371

 

​

(1,354)

​

 

1,059

​

 

(21)

​

 

16

​

 

(315)

Loans charged to the allowance

​

 

—

​

 

(2)

 

​

—

​

 

(84)

​

 

—

​

 

—

​

 

(86)

Recoveries of loans previously charged off

​

 

—

​

 

—

 

​

—

​

 

—

​

 

—

​

 

6

​

 

6

Balance, end of period

​

$

2,935

​

$

3,969

​

$

15,782

​

$

5,239

​

$

611

​

$

160

​

$

28,696

Ending balance: individually evaluated for impairment

​

$

—

​

$

—

 

$

—

​

$

1,852

​

$

—

​

$

—

​

$

1,852

Ending balance: collectively evaluated for impairment

​

$

2,935

​

$

3,969

​

$

15,782

​

$

3,387

​

$

611

​

$

160

​

$

26,844

Loans

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Ending balance

​

$

1,177,940

​

$

806,325

​

$

2,970,770

​

$

409,710

​

$

92,786

​

$

15,392

​

$

5,472,923

Ending balance individually evaluated for impairment

​

$

—

​

$

629

​

$

—

​

$

6,592

​

$

158

​

$

6

​

$

7,385

Ending balance collectively evaluated for impairment

​

$

1,177,940

​

$

805,696

​

$

2,970,770

​

$

403,118

​

$

92,628

​

$

15,386

​

$

5,465,538

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Three Months Ended June 30, 2020

​

 

MTG WHLOC

 

RES RE

 

MF RE

 

CML & CRE

 

AG & AGRE

 

CON & MAR

 

TOTAL

​

​

(In thousands)

Allowance for loan losses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

2,709

​

$

2,062

 

$

7,694

​

$

5,662

​

$

561

​

$

195

​

$

18,883

Provision (credit) for loan losses

​

 

494

​

 

248

 

​

2,184

​

 

(1,188)

​

 

49

​

 

(42)

​

 

1,745

Loans charged to the allowance

​

 

—

​

 

—

 

​

—

​

 

(131)

​

 

—

​

 

—

​

 

(131)

Balance, end of period

​

$

3,203

​

$

2,310

​

$

9,878

​

$

4,343

​

$

610

​

$

153

​

$

20,497

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Six Months Ended June 30, 2021

​

  

MTG WHLOC

  

RES RE

  

MF RE

  

CML & CRE

  

AG & AGRE

  

CON & MAR

  

TOTAL

​

​

(In thousands)

Allowance for loan losses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

4,018

​

$

3,334

​

$

14,731

​

$

4,641

​

$

636

​

$

140

​

$

27,500

Provision for loan losses

​

 

(1,083)

​

​

637

​

​

1,051

​

​

750

​

​

(25)

​

​

18

​

​

1,348

Loans charged to the allowance

​

 

—

​

​

(2)

​

​

—

​

​

(152)

​

​

—

​

​

(6)

​

​

(160)

Recoveries of loans previously charged off

​

 

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

8

​

 

8

Balance, end of period

​

$

2,935

​

$

3,969

​

$

15,782

​

$

5,239

​

$

611

​

$

160

​

$

28,696

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Six Months Ended June 30, 2020

​

  

MTG WHLOC

  

RES RE

  

MF RE

  

CML & CRE

  

AG & AGRE

  

CON & MAR

  

TOTAL

​

​

(In thousands)

Allowance for loan losses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

1,913

​

$

2,042

​

$

7,018

​

$

4,173

​

$

523

​

$

173

​

$

15,842

Provision (credit) for loan losses

​

 

1,290

​

​

268

​

​

2,860

​

​

257

​

​

87

​

​

(19)

​

 

4,743

Loans charged to the allowance

​

 

—

​

​

—

​

​

—

​

​

(131)

​

​

—

​

​

(1)

​

 

(132)

Recoveries of loans previously charged off

​

 

—

​

​

—

​

​

—

​

​

44

​

​

—

​

​

—

​

 

44

Balance, end of period

​

$

3,203

​

$

2,310

​

$

9,878

​

$

4,343

​

$

610

​

$

153

​

$

20,497

​

The following table presents the allowance for loan losses and the recorded investment in loans and impairment method as of December 31, 2020:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

 

MTG WHLOC

 

RES RE

 

MF RE

 

CML & CRE

 

AG & AGRE

 

CON & MAR

 

TOTAL

​

​

(In thousands)

Allowance for loan losses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, December 31, 2020

​

$

4,018

​

$

3,334

​

$

14,731

​

$

4,641

​

$

636

​

$

140

​

$

27,500

Ending balance: individually evaluated for impairment

​

$

—

​

$

7

​

$

—

​

$

1,606

​

$

—

​

$

—

​

$

1,613

Ending balance: collectively evaluated for impairment

​

$

4,018

​

$

3,327

​

$

14,731

​

$

3,035

​

$

636

​

$

140

​

$

25,887

Loans

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Balance, December 31, 2020

​

$

1,605,745

​

$

678,848

​

$

2,749,020

​

$

387,294

​

$

101,268

​

$

13,251

​

$

5,535,426

Ending balance individually evaluated for impairment

​

$

—

​

$

2,761

​

$

—

​

$

9,591

​

$

2,100

​

$

12

​

$

14,464

Ending balance collectively evaluated for impairment

​

$

1,605,745

​

$

676,087

​

$

2,749,020

​

$

377,703

​

$

99,168

​

$

13,239

​

$

5,520,962

​

Internal Risk Categories

In adherence with policy, the Company uses the following internal risk grading categories and definitions for loans:

Average or above – Loans to borrowers of satisfactory financial strength or better. Earnings performance is consistent with primary and secondary sources of repayment that are well defined and adequate to retire the debt in a timely and orderly fashion. These businesses would generally exhibit satisfactory asset quality and liquidity with moderate leverage, average performance to their peer group and experienced management in key positions. These loans are disclosed as “Acceptable and Above” in the following table.

Acceptable – Loans to borrowers involving more than average risk and which contain certain characteristics that require some supervision and attention by the lender. Asset quality is acceptable, but debt capacity is modest and little excess liquidity is available. The borrower may be fully leveraged and unable to sustain major setbacks. Covenants are structured to ensure adequate protection. Borrower’s management may have limited experience and depth. This category includes loans which are highly leveraged due to regulatory constraints, as well as loans involving reasonable exceptions to policy. These loans are disclosed as “Acceptable and Above” in the following table.

Special Mention (Watch) – This is a loan that is sound and collectable but contains potential risk. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these

potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Special Mention (Watch) – COVID-19 Deferrals – This is a loan that is sound and collectable but contains potential risk because the borrower has requested to defer payments, typically for 90 days, in response to COVID-related hardships. Interest is still accruing on these loans and they were not more than 30 days late at the time the deferral was granted. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. This category includes only those loans that were not already in the Traditional Special Mention (Watch) or Substandard categories.

Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The following tables present the credit risk profile of the Company’s loan portfolio based on internal rating category and payment activity as of June 30, 2021 and December 31, 2020:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

    

MTG WHLOC

    

RES RE

    

MF RE

    

CML & CRE

    

AG & AGRE

    

CON & MAR

    

TOTAL

​

​

(In thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Special Mention (Watch)

​

$

—

​

$

821

​

$

143,906

​

$

2,342

​

$

1,932

​

$

5

​

$

149,006

Special Mention (Watch) - COVID-19 Deferrals

​

​

—

​

​

25

​

​

185

​

​

—

​

​

—

​

​

—

​

​

210

Substandard

​

 

—

​

​

629

​

​

—

​

​

6,592

​

​

158

​

​

6

​

​

7,385

Acceptable and Above

​

 

1,177,940

​

 

804,850

​

 

2,826,679

​

 

400,776

​

 

90,696

​

 

15,381

​

 

5,316,322

Total

​

$

1,177,940

​

$

806,325

​

$

2,970,770

​

$

409,710

​

$

92,786

​

$

15,392

​

$

5,472,923

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

    

MTG WHLOC

    

RES RE

    

MF RE

    

CML & CRE

    

AG & AGRE

    

CON & MAR

    

TOTAL

​

​

(In thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Special Mention (Watch)

​

$

222

​

$

853

​

$

145,050

​

$

2,620

​

$

4,160

​

$

34

​

$

152,939

Special Mention (Watch) - COVID-19 Deferrals

​

​

—

​

​

383

​

​

185

​

​

110

​

​

—

​

​

—

​

​

678

Substandard

​

 

—

​

 

2,761

​

 

—

​

 

9,591

​

 

2,100

​

 

12

​

 

14,464

Acceptable and Above

​

 

1,605,523

​

 

674,851

​

 

2,603,785

​

 

374,973

​

 

95,008

​

 

13,205

​

 

5,367,345

Total

​

$

1,605,745

​

$

678,848

​

$

2,749,020

​

$

387,294

​

$

101,268

​

$

13,251

​

$

5,535,426

​

​

The Company evaluates the loan risk grading system definitions and allowance for loan loss methodology on an ongoing basis. No significant changes were made to either during the past year.

Delinquent Loans

The following tables present the Company’s loan portfolio aging analysis of the recorded investment in loans as of June 30, 2021 and December 31, 2020. There were 4 loans totaling $37.0 million at June 30, 2021 that have been modified in accordance with the CARES Act and therefore not classified as delinquent.  These loans have been granted extended dates to make payments and no payments were due as of June 30, 2021.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

    

30-59 Days

    

60-89 Days

    

Greater Than

    

Total

    

​

​

    

Total

​

​

Past Due

​

Past Due

​

90 Days

​

Past Due

​

Current

​

Loans

​

​

(In thousands)

MTG WHLOC

​

$

—

​

$

—

​

$

—

​

$

—

​

$

1,177,940

​

$

1,177,940

RES RE

​

 

—

​

​

—

​

 

—

​

 

—

​

 

806,325

​

 

806,325

MF RE

​

 

151

​

​

157

​

 

197

​

 

505

​

 

2,970,265

​

 

2,970,770

CML & CRE

​

 

—

​

​

50

​

 

2,279

​

 

2,329

​

 

407,381

​

 

409,710

AG & AGRE

​

 

410

​

​

39

​

 

—

​

 

449

​

 

92,337

​

 

92,786

CON & MAR

​

 

4

​

​

—

​

 

6

​

 

10

​

 

15,382

​

 

15,392

​

​

$

565

​

$

246

​

$

2,482

​

$

3,293

​

$

5,469,630

​

$

5,472,923

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

    

30-59 Days

    

60-89 Days

    

Greater Than

    

Total

    

​

​

    

Total

​

​

Past Due

​

Past Due

​

90 Days

​

Past Due

​

Current

​

Loans

​

​

(In thousands)

MTG WHLOC

​

$

—

 

$

—

​

$

—

​

$

—

​

$

1,605,745

​

$

1,605,745

RES RE

​

 

364

 

​

80

​

 

630

​

 

1,074

​

 

677,774

​

 

678,848

MF RE

​

 

—

 

​

36,760

​

 

—

​

 

36,760

​

 

2,712,260

​

 

2,749,020

CML & CRE

​

 

608

 

​

76

​

 

3,582

​

 

4,266

​

 

383,028

​

 

387,294

AG & AGRE

​

 

3,769

 

​

—

​

 

1,934

​

 

5,703

​

 

95,565

​

 

101,268

CON & MAR

​

 

7

 

​

—

​

 

19

​

 

26

​

 

13,225

​

 

13,251

​

​

$

4,748

​

$

36,916

​

$

6,165

​

$

47,829

​

$

5,487,597

​

$

5,535,426

​

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in TDRs.

​

​

​

​

​

​

​

​

​

​

​

Impaired Loans

The following tables present impaired loans and specific valuation allowance information based on class level as of June 30, 2021 and December 31, 2020:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

    

MTG WHLOC

    

RES RE

    

MF RE

    

CML & CRE

    

AG & AGRE

    

CON & MAR

    

TOTAL

​

​

(In thousands)

Impaired loans without a specific allowance:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Recorded investment

​

$

—

​

$

629

​

$

—

​

$

933

​

$

158

​

$

6

​

$

1,726

Unpaid principal balance

​

 

—

​

 

629

​

 

—

​

 

933

​

 

158

​

 

6

​

 

1,726

Impaired loans with a specific allowance:

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Recorded investment

​

 

—

​

 

—

​

 

—

​

 

5,659

​

 

—

​

 

—

​

 

5,659

Unpaid principal balance

​

 

—

​

 

—

​

 

—

​

 

5,659

​

 

—

​

 

—

​

 

5,659

Specific allowance

​

 

—

​

 

—

​

 

—

​

 

1,852

​

 

—

​

 

—

​

 

1,852

Total impaired loans:

​

 

  

​

 

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Recorded investment

​

 

—

​

 

629

​

 

—

​

 

6,592

​

 

158

​

 

6

​

 

7,385

Unpaid principal balance

​

 

—

​

 

629

​

 

—

​

 

6,592

​

 

158

​

 

6

​

 

7,385

Specific allowance

​

 

—

​

 

—

​

 

—

​

 

1,852

​

 

—

​

 

—

​

 

1,852

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

    

MTG WHLOC

    

RES RE

    

MF RE

    

CML & CRE

    

AG & AGRE

    

CON & MAR

    

TOTAL

​

​

(In thousands)

Impaired loans without a specific allowance:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Recorded investment

​

$

—

​

$

2,704

​

$

—

​

$

3,319

​

$

2,100

​

$

7

​

$

8,130

Unpaid principal balance

​

 

—

​

 

2,704

​

 

—

​

 

3,319

​

 

2,100

​

 

7

​

 

8,130

Impaired loans with a specific allowance:

​

 

—

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Recorded investment

​

 

—

​

 

57

​

 

—

​

 

6,272

​

 

—

​

 

5

​

 

6,334

Unpaid principal balance

​

 

—

​

 

57

​

 

—

​

 

6,272

​

 

—

​

 

5

​

 

6,334

Specific allowance

​

 

—

​

 

7

​

 

—

​

 

1,606

​

 

—

​

 

—

​

 

1,613

Total impaired loans:

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Recorded investment

​

 

—

​

 

2,761

​

 

—

​

 

9,591

​

 

2,100

​

 

12

​

 

14,464

Unpaid principal balance

​

 

—

​

 

2,761

​

 

—

​

 

9,591

​

 

2,100

​

 

12

​

 

14,464

Specific allowance

​

 

—

​

 

7

​

 

—

​

 

1,606

​

 

—

​

 

—

​

 

1,613

​

​

The following tables present by portfolio class, information related to the average recorded investment and interest income recognized on impaired loans for the three and six month periods ended June 30, 2021 and 2020:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

MTG WHLOC

    

RES RE

    

MF RE

    

CML & CRE

    

AG & AGRE

    

CON & MAR

    

TOTAL

​

​

(In thousands)

Three Months Ended June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Average recorded investment in impaired loans

​

$

—

​

$

2,201

​

$

—

​

$

6,113

​

$

175

​

$

6

​

$

8,495

Interest income recognized

​

 

—

​

​

16

​

​

—

​

​

55

​

​

—

​

​

—

  

 

71

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Average recorded investment in impaired loans

​

$

171

​

$

2,916

​

$

—

​

$

9,229

​

$

2,092

​

$

17

​

$

14,425

Interest income recognized

​

​

—

​

​

19

​

​

—

​

​

94

​

​

—

​

​

—

​

​

113

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

MTG WHLOC

    

RES RE

    

MF RE

    

CML & CRE

    

AG & AGRE

    

CON & MAR

    

TOTAL

​

​

(In thousands)

Six Months Ended June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Average recorded investment in impaired loans

​

$

—

​

$

2,442

​

$

—

​

$

7,254

​

$

1,000

​

$

7

​

$

10,703

Interest income recognized

​

 

—

​

 

27

​

 

—

​

 

259

​

 

—

​

 

—

​

 

286

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Average recorded investment in impaired loans

​

$

197

​

$

2,875

​

$

—

​

$

9,231

​

$

1,195

​

$

18

​

$

13,516

Interest income recognized

​

​

—

​

​

35

​

​

—

​

​

215

​

​

—

​

​

1

​

​

251

​

​

Nonperforming Loans

The following table presents the Company’s nonaccrual loans and loans past due 90 days or more and still accruing at June 30, 2021 and December 31, 2020.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 

​

December 31, 

​

​

​

2021

​

2020

​

​

​

​

​

​

Total Loans >

​

​

​

​

Total Loans >

​

​

​

​

​

​

90 Days &

​

​

​

​

90 Days &

​

​

    

Nonaccrual

    

Accruing

    

Nonaccrual

    

Accruing

    

​

​

(In thousands)

RES RE

​

$

556

​

$

—

​

$

578

​

$

69

​

CML & CRE

​

 

1,880

​

​

399

​

 

2,052

​

​

1,240

​

AG & AGRE

​

 

158

​

 

—

​

 

181

​

 

2,181

​

CON & MAR

​

 

6

​

 

—

​

 

12

​

 

8

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

$

2,600

​

$

399

​

$

2,823

​

$

3,498

​

​

No troubled loans were restructured during the three or six months ended June 30, 2021 or 2020. No restructured loans defaulted during the three or six months ended June 30, 2021 or 2020. Loan modifications or forbearances related to the COVID-19 pandemic will generally not be considered TDRs.

​

The CARES Act included several provisions designed to help financial institutions like the Company in working with their customers. Section 4013 of the CARES Act, as extended, allows a financial institution to elect to suspend generally accepted accounting principles and regulatory determinations with respect to qualifying loan modifications related to COVID-19 that would otherwise be categorized as a TDR until January 1, 2022. The Company has taken advantage of this provision to extend certain payment modifications to loan customers in need. As of June 30, 2021, the Company has $37.0 million of outstanding loans that were modified during 2020 or 2021 under the CARES Act guidance, that remain on modified terms. The Company modified other loans under the guidance that have since returned to normal repayment status as of June 30, 2021.

​

There were no residential loans in process of foreclosure as of June 30, 2021 and 2020.

​
v3.21.2
Borrowings
 6 Months Ended
Jun. 30, 2021
Borrowings  
Borrowings

Note 5:   Borrowings

The Company joined the American Financial Exchange (“AFX”) in January of 2021. During the six months ended June 30, 2021, the Company utilized unsecured overnight lending arrangements to borrow from other AFX members through extensions of credit. At June 30, 2021, members of the AFX offered a combined borrowing limit of $325.0 million, but availability fluctuates daily. As of June 30, 2021, the outstanding balance was $25.0 million with a rate of 0.09%.  Rates are set daily by participating members and may vary by lending member.
v3.21.2
Regulatory Matters
 6 Months Ended
Jun. 30, 2021
Regulatory Matters  
Regulatory Matters

Note 6:   Regulatory Matters

The Company, Merchants Bank, and FMBI are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by federal and state banking regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company, Merchants Bank, and FMBI must meet specific capital guidelines that involve quantitative measures of the Company’s, Merchants Bank’s, and FMBI’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s, Merchants Bank’s, and FMBI’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, and other factors. Furthermore, the Company’s, Merchants Bank’s, and FMBI’s regulators could require adjustments to regulatory capital not reflected in these financial statements.

On November 13, 2019, the federal regulators finalized and adopted a regulatory capital rule establishing a new community bank leverage ratio (“CBLR”), which became effective on January 1, 2020. The intent of CBLR is to provide a simple alternative measure of capital adequacy for electing qualifying depository institutions and depository institution holding companies, as directed under the Economic Growth, Regulatory Relief, and Consumer Protection Act. Under CBLR, if a qualifying depository institution or depository institution holding company elects to use such measure, such institution or holding company will be considered well capitalized if its ratio of Tier 1 capital to average total consolidated assets (i.e., leverage ratio) exceeds a 9% threshold, subject to a limited two quarter grace period, during which the leverage ratio cannot go 100 basis points below the then applicable threshold, and will not be required to calculate and report risk-based capital ratios. Eligibility criteria to utilize CBLR includes the following:

●Total assets of less than $10 billion,
●Total trading assets plus liabilities of 5% or less of consolidated assets,
●Total off-balance sheet exposures of 25% or less of consolidated assets,
●Cannot be an advanced approaches banking organization, and
●Leverage ratio greater than 9%, or temporarily prescribed threshold established in response to COVID-19.

​

In April 2020, under the CARES Act, the 9% leverage ratio threshold was temporarily reduced to 8% in response to the COVID-19 pandemic. The threshold increased to 8.5% in 2021 and will return to 9% in 2022. The Company, Merchants Bank, and FMBI elected to begin using CBLR in the first quarter of 2020 and all intend to utilize this measure for the foreseeable future and thus will not calculate or report risk-based capital ratios.

On December 2, 2020 the Federal Deposit Insurance Corporation (“FDIC”) issued an interim final rule related to COVID-19 as it pertains to eligibility to utilize CBLR. The rule allows organizations with less than $10 billion in total assets as of December 31, 2019, to use the assets on that date to determine the applicability of various regulatory asset thresholds during 2020 and 2021.

Management believes, as of June 30, 2021 and December 31, 2020, that the Company, Merchants Bank, and FMBI met all the regulatory capital adequacy requirements with CBLR to be classified as well-capitalized, and management is not aware of any conditions or events since the most recent regulatory notification that would change the Company’s, Merchants Bank’s, or FMBI’s category.

As of June 30, 2021 and December 31, 2020, the most recent notifications from the Board of Governors of the Federal Reserve System (“Federal Reserve”) categorized the Company as well capitalized and most recent notifications from the Federal Deposit Insurance Corporation (“FDIC”) categorized Merchants Bank and FMBI as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Company’s, Merchants Bank’s, or FMBI’s category.

​

The Company’s, Merchants Bank’s, and FMBI’s actual capital amounts and ratios are presented in the following tables.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Minimum Amount

​

​

​

​

​

​

​

​

To Be Well

​

​

​

Actual

​

Capitalized(1)

​

​

    

Amount

    

Ratio

    

Amount

    

Ratio

    

​

​

(Dollars in thousands)

​

June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

CBLR (Tier 1) capital(1) (to average assets)

​

 

​

 

  

​

 

  

 

​

​

(i.e., CBLR - leverage ratio)

​

​

​

​

​

​

​

​

​

​

​

Company

​

$

1,041,631

 

10.9

%  

$

810,065

 

> 8.5

%  

Merchants Bank

​

​

1,001,502

 

10.8

%  

 

786,534

 

> 8.5

%  

FMBI

​

 

26,691

 

9.6

%  

 

23,613

 

> 8.5

%  

​

​

​

​

​

​

​

​

​

​

​

​

​

1
As defined by regulatory agencies.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Minimum Amount

​

​

​

​

​

​

​

​

To Be Well

​

​

​

Actual

​

Capitalized(1)

​

​

    

Amount

    

Ratio

    

Amount

    

Ratio

​

​

​

(Dollars in thousands)

​

December 31, 2020

​

​

​

​

​

​

​

​

​

​

​

CBLR (Tier 1) capital(1) (to average assets)

 

​

  

 

  

 

​

  

 

  

 

(i.e., CBLR - leverage ratio)

​

​

​

​

​

​

​

​

​

​

​

Company

​

$

792,456

 

8.6

%  

$

738,019

 

> 8

%  

Merchants Bank

​

 

781,221

 

8.7

%  

 

718,120

 

> 8

%  

FMBI

​

​

24,456

 

9.8

%  

 

19,979

 

> 8

%  

​

1As defined by regulatory agencies.

​

Failure to exceed the leverage ratio thresholds required under CBLR in the future, subject to any applicable grace period, would require the Company, Merchants Bank, and/or FMBI to return to the risk-based capital ratio thresholds previously utilized under the fully phased-in Basel III Capital Rules to determine capital adequacy.

v3.21.2
Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2021
Derivative Financial Instruments  
Derivative Financial Instruments

Note 7: Derivative Financial Instruments

​

The Company uses derivative financial instruments to help manage exposure to interest rate risk and the effects that changes in interest rates may have on net income and the fair value of assets and liabilities.

Forward Sales Commitments and Interest Rate Lock Commitments

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.

Each of these items are considered derivatives, but are not designated as accounting hedges, and are recorded at fair value with changes in fair value reflected in noninterest income on the condensed consolidated statements of income. The fair value of derivative instruments with a positive fair value are reported in other assets in the condensed consolidated balance sheets while derivative instruments with a negative fair value are reported in other liabilities in the condensed consolidated balance sheets.

The following table presents the notional amount and fair value of interest rate locks and forward contracts utilized by the Company at June 30, 2021 and December 31, 2020.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Notional

​

​

​

​

​

Fair Value

​

​

Amount

 

​

Balance Sheet Location

 

​

Asset

 

​

Liability

June 30, 2021

​

(In thousands)

​

​

​

​

​

(In thousands)

Interest rate lock commitments

$

105,076

​

​

Other assets/liabilities

​

$

487

​

$

54

Forward contracts

$

107,364

​

​

Other assets/liabilities

​

 

8

​

​

223

​

​

​

​

​

​

​

$

495

​

$

277

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Notional

​

​

​

​

​

Fair Value

​

​

Amount

 

​

Balance Sheet Location

 

​

Asset

 

​

Liability

December 31, 2020

​

(In thousands)

​

​

​

​

​

(In thousands)

Interest rate lock commitments

$

412,043

​

​

Other assets/liabilities

​

$

6,131

​

$

—

Forward contracts

$

304,024

​

​

Other assets/liabilities

​

 

—

​

​

2,682

​

​

​

​

​

​

​

$

6,131

​

$

2,682

​

Fair values of these derivative financial instruments were estimated using changes in mortgage interest rates from the date the Company entered into the interest rate lock commitment and the balance sheet date. The following table summarizes the periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income for the three and six months ended June 30, 2021 and 2020.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30, 

​

June 30, 

​

    

2021

    

2020

    

2021

    

2020

​

​

(In thousands)

​

​

(In thousands)

Interest rate lock commitments

​

$

1,046

​

$

3,743

​

$

(5,698)

​

$

5,556

Forward contracts (includes pair-off settlements)

​

​

(2,289)

​

​

(2,114)

​

 

6,107

​

​

(3,958)

Net derivative gains (loss)

​

$

(1,243)

​

$

1,629

​

$

409

​

$

1,598

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Derivatives on Behalf of Customers

The Company offers derivative contracts to some customers in connection with their risk management needs. These derivatives include interest rate swaps. The Company manages the risk associated with these contracts by entering into an equal and offsetting derivative with a third-party dealer. These derivatives generally work together as an economic interest rate hedge, but the Company does not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred, typically resulting in no net earnings impact. The fair values of derivative assets and liabilities related to derivatives for customers with interest rate swaps were recorded in the condensed consolidated balance sheets as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Notional

​

​

​

​

​

Fair Value

​

​

Amount

 

​

Balance Sheet Location

 

​

Asset

 

​

Liability

​

​

(In thousands)

​

​

​

​

​

(In thousands)

June 30, 2021

$

86,387

​

​

Other assets/liabilities

​

$

2,089

​

$

2,089

December 31, 2020

$

82,726

​

​

Other assets/liabilities

​

$

3,170

​

$

3,170

​

If there is a net gain or loss, the gross gains and losses on these derivative assets and liabilities are recorded in Other Noninterest income and Other Noninterest expense in the condensed consolidated statements of income.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30, 

​

June 30, 

​

    

2021

    

2020

    

2021

    

2020

​

​

(In thousands)

​

​

(In thousands)

Gross swap gains

​

$

195

​

$

634

​

$

1,081

​

$

3,337

Gross swap losses

​

​

(195)

​

​

(634)

​

 

(1,081)

​

​

(3,337)

Net swap gains (losses)

​

$

—

​

$

—

​

$

—

​

$

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

The Company pledged $3.9 million in collateral to secure its obligations under swap contracts at June 30, 2021 and December 31, 2020.
v3.21.2
Disclosures about Fair Value of Assets and Liabilities
 6 Months Ended
Jun. 30, 2021
Disclosures about Fair Value of Assets and Liabilities  
Disclosures about Fair Value of Assets and Liabilities

Note 8:   Disclosures about Fair Value of Assets and Liabilities

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

Level 1    Quoted prices in active markets for identical assets or liabilities

Level 2    Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3    Unobservable inputs supported by little or no market activity and are significant to the fair value of the assets or liabilities

Recurring Measurements

The following tables present the fair value measurements of assets and liabilities recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2021 and December 31, 2020:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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)

June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage loans in process of securitization

​

$

461,914

​

$

—

​

$

461,914

​

$

—

Available for sale securities:

​

 

  

​

 

  

​

 

  

​

 

  

Treasury notes

​

 

5,020

​

 

5,020

​

 

—

​

 

—

Federal agencies

​

 

254,563

​

 

—

​

 

254,563

​

 

—

Municipals

​

 

6,038

​

 

—

​

 

6,038

​

 

—

Mortgage-backed - Government-sponsored entity (GSE) - residential

​

 

49,639

​

 

—

​

 

49,639

​

 

—

Loans held for sale

​

 

26,623

​

 

—

​

 

26,623

​

 

—

Mortgage servicing rights

​

 

98,331

​

 

—

​

 

—

​

 

98,331

Derivative assets - interest rate lock commitments

​

 

487

​

 

—

​

 

—

​

 

487

Derivative assets - forward contracts

​

 

8

​

 

—

​

 

8

​

 

—

Derivative assets - interest rate swaps

​

 

2,089

​

 

—

​

 

2,089

​

 

—

Derivative liabilities - interest rate lock commitments

​

 

54

​

​

—

​

​

—

​

​

54

Derivative liabilities - forward contracts

​

 

223

​

​

—

​

​

223

​

​

—

Derivative liabilities - interest rate swaps

​

 

2,089

​

​

—

​

​

2,089

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

 

  

​

​

​

​

​

​

​

​

​

Mortgage loans in process of securitization

​

$

338,733

​

$

—

​

$

338,733

​

$

—

Available for sale securities:

​

 

  

​

 

  

​

 

  

​

 

  

Treasury notes

​

 

6,559

​

 

6,559

​

 

—

​

 

—

Federal agencies

​

 

235,040

​

 

—

​

 

235,040

​

 

—

Municipals

​

 

6,025

​

 

—

​

 

6,025

​

 

—

Mortgage-backed - Government-sponsored entity (GSE) - residential

​

 

22,178

​

 

—

​

 

22,178

​

 

—

Loans held for sale

​

 

40,044

​

 

—

​

 

40,044

​

 

—

Mortgage servicing rights

​

 

82,604

​

 

—

​

 

—

​

 

82,604

Derivative assets - interest rate lock commitments

​

 

6,131

​

 

—

​

 

—

​

 

6,131

Derivative asset - interest rate swap

​

​

3,170

​

​

—

​

​

3,170

​

​

—

Derivative liabilities - forward contracts

​

 

2,682

​

​

—

​

​

2,682

​

​

—

Derivative liabilities - interest rate swap

​

 

3,170

​

​

—

​

​

3,170

​

​

—

​

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the six months ended June 30, 2021 and the year ended December 31, 2020. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

Mortgage Loans in Process of Securitization and Available for Sale Securities

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.

Mortgage Servicing Rights

Mortgage 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, and default rate. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the hierarchy.

The Chief Financial Officer’s (CFO) office contracts with a pricing specialist to generate fair value estimates on a quarterly basis. The CFO’s office challenges the reasonableness of the assumptions used and reviews the methodology to ensure the estimated fair value complies with accounting standards generally accepted in the United States.

Derivative Financial Instruments

The Company estimates the fair value of interest rate lock commitments based on the value of the underlying mortgage loan, quoted mortgage backed security prices, estimates of the fair value of the mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the interest rate lock commitment, net of expenses. With respect to its interest rate lock commitments, management determined that a Level 3 classification was most appropriate based on the various significant unobservable inputs utilized in estimating the fair value of its interest rate lock commitments. The Company estimates the fair value of forward sales commitments based on market quotes of mortgage backed security prices for securities similar to the ones used, which are considered Level 2. The fair value of interest rate swaps is based on prices that are obtained from a third party that uses observable market inputs, thereby supporting a Level 2 classification. Changes in fair value of the Company’s derivative financial instruments are recognized through noninterest income and/or noninterest expenses on its condensed consolidated statement of income.

Level 3 Reconciliation

The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying balance sheets using significant unobservable (Level 3) inputs:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 

​

Six Months Ended June 30, 

​

    

2021

    

2020

    

2021

    

2020

​

​

(In thousands)

​

(In thousands)

Mortgage servicing rights

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

96,215

​

$

69,978

​

$

82,604

​

$

74,387

Additions

​

 

  

​

 

  

​

 

  

​

 

  

Originated and purchased servicing

​

 

6,527

​

 

4,015

​

 

16,708

​

 

7,944

Subtractions

​

 

  

​

 

  

​

 

  

​

 

  

Paydowns

​

 

(4,627)

​

 

(604)

​

 

(8,075)

​

 

(2,462)

Sales of servicing

​

​

(438)

​

​

​

​

​

(438)

​

​

​

Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model

​

 

654

​

 

(500)

​

 

7,532

​

 

(6,980)

Balance, end of period

​

$

98,331

​

$

72,889

​

$

98,331

​

$

72,889

​

​

​

​

​

​

​

​

​

​

​

​

​

Derivative Assets - interest rate lock commitments

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

467

​

$

2,079

​

$

6,131

​

$

186

Changes in fair value

​

 

20

​

 

3,663

​

 

(5,644)

​

 

5,556

Balance, end of period

​

$

487

​

$

5,742

​

$

487

​

$

5,742

​

​

​

​

​

​

​

​

​

​

​

​

​

Derivative Liabilities - interest rate lock commitments

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

1,080

​

$

80

​

$

—

​

$

—

Changes in fair value

​

 

(1,026)

​

 

(80)

​

 

54

​

 

—

Balance, end of period

​

$

54

​

$

—

​

$

54

​

$

—

​

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 June 30, 2021 and December 31, 2020.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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)

June 30, 2021

​

 

  

​

 

  

​

 

  

​

 

  

Impaired loans (collateral-dependent)

​

$

3,807

​

$

—

​

$

—

​

$

3,807

December 31, 2020

​

 

  

​

 

  

​

 

  

​

 

  

Impaired loans (collateral-dependent)

​

$

4,059

​

$

—

​

$

—

​

$

4,059

​

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheet, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

Collateral-Dependent Impaired Loans, Net of Allowance for Loan Losses

The estimated fair value of collateral-dependent impaired loans is based on the appraised fair value of the collateral, less estimated cost to sell. Collateral-dependent impaired 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 Company’s Chief Credit Officer’s (CCO) office. Appraisals 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 June 30, 2021:

 

​

  

 

  

​

​

​

​

 

​

Collateral-dependent impaired loans

​

$

3,807

 

Market comparable properties

 

Marketability discount

​

49%

 

49%

Mortgage servicing rights - Multi-family

​

$

78,097

 

Discounted cash flow

 

Discount rate

​

8% - 13%

 

9%

​

​

​

​

​

​

​

Constant prepayment rate

​

0% - 43%

 

3%

Mortgage servicing rights - Single-family

​

$

20,234

 

Discounted cash flow

 

Mortgage yield

​

9% - 10%

​

9%

​

​

​

​

​

​

​

Constant prepayment rate

​

11% - 14%

​

12%

Derivative assets - interest rate lock commitments

​

$

487

 

Discounted cash flow

 

Loan closing rates

​

63% - 99%

 

82%

Derivative liabilities - interest rate lock commitments

​

$

54

 

Discounted cash flow

 

Loan closing rates

​

63% - 99%

 

82%

​

​

​

​

​

​

​

​

​

​

​

​

At December 31, 2020:

​

 

  

 

  

​

​

​

​

 

​

Collateral-dependent impaired loans

​

$

4,059

 

Market comparable properties

 

Marketability discount

​

43%

 

43%

Mortgage servicing rights - Multi-family

​

$

73,569

 

Discounted cash flow

 

Discount rate

​

8% - 13%

 

9%

​

​

​

​

​

​

​

Constant prepayment rate

​

2% - 43%

 

4%

Mortgage servicing rights - Single-family

​

$

9,035

 

Discounted cash flow

 

Discount rate

​

11%

​

11%

​

​

​

​

​

​

​

Constant prepayment rate

​

8% - 35%

​

16%

Derivative assets - interest rate lock commitments

​

$

6,131

 

Discounted cash flow

 

Loan closing rates

​

55% - 99%

 

75%

​

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.

Mortgage Servicing Rights

The most significant unobservable inputs used in the fair value measurement of the Company’s mortgage servicing right are discount rates and constant prepayment rates. These two inputs can drive a significant amount of a market participant’s valuation of mortgage servicing rights. Significant increases (decreases) in the discount rate or assumed constant prepayment rates used to value mortgage 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 June 30, 2021 and December 31, 2020.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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)

June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial assets:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Cash and cash equivalents

​

$

402,049

​

$

402,049

​

$

402,049

​

$

—

​

$

—

Securities purchased under agreements to resell

​

 

6,507

​

 

6,507

​

 

—

​

 

6,507

​

 

—

FHLB stock

​

 

70,767

​

 

70,767

​

 

—

​

 

70,767

​

 

—

Loans held for sale

​

 

2,928,767

​

 

2,928,767

​

 

—

​

 

2,928,767

​

 

—

Loans, net

​

 

5,444,227

​

 

5,399,967

​

 

—

​

 

—

​

 

5,399,967

Interest receivable

​

 

22,068

​

 

22,068

​

 

—

​

 

22,068

​

 

—

Financial liabilities:

​

 

  

​

 

​

​

 

  

​

 

  

​

 

  

Deposits

​

 

8,039,578

​

 

8,041,139

​

 

7,508,693

​

 

532,446

​

 

—

Short-term subordinated debt

​

 

14,960

​

 

14,960

​

 

—

​

 

14,960

​

 

—

FHLB advances

​

 

607,003

​

 

607,124

​

 

—

​

 

607,124

​

 

—

Other borrowing

​

​

79,410

​

​

79,410

​

​

—

​

​

79,410

​

​

—

Interest payable

​

 

2,471

​

 

2,471

​

 

—

​

 

2,471

​

 

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Financial assets:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Cash and cash equivalents

​

$

179,728

​

$

179,728

​

$

179,728

​

$

—

​

$

—

Securities purchased under agreements to resell

​

 

6,580

​

 

6,580

​

 

—

​

 

6,580

​

 

—

FHLB stock

​

 

70,656

​

 

70,656

​

 

—

​

 

70,656

​

 

—

Loans held for sale

​

 

3,030,110

​

 

3,030,110

​

 

—

​

 

3,030,110

​

 

—

Loans, net

​

 

5,507,926

​

 

5,484,824

​

 

—

​

 

—

​

 

5,484,824

Interest receivable

​

 

21,770

​

 

21,770

​

 

—

​

 

21,770

​

 

—

Financial liabilities:

​

 

  

​

 

​

​

 

  

​

 

  

​

 

  

Deposits

​

 

7,408,066

​

 

7,410,759

​

 

7,051,413

​

 

359,346

​

 

—

Short-term subordinated debt

​

 

14,960

​

 

14,960

​

 

—

​

 

14,960

​

 

—

FHLB advances

​

 

1,221,071

​

 

1,221,870

​

 

—

​

 

1,221,870

​

 

—

Federal Reserve discount window/PPPLF advances

​

​

112,225

​

​

112,225

​

​

—

​

​

112,225

​

​

—

Interest payable

​

 

1,476

​

 

1,476

​

 

—

​

 

1,476

​

 

—

​
v3.21.2
Earnings Per Share
 6 Months Ended
Jun. 30, 2021
Earnings Per Share  
Earnings Per Share

Note 9:   Earnings Per Share

Earnings per share were computed as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Month Periods Ended June 30, 

​

​

2021

​

2020

​

​

​

​

​

Weighted-

​

Per 

​

​

​

​

Weighted-

​

Per 

​

​

Net

​

Average

​

Share

​

Net

​

Average

​

Share

​

    

Income

    

Shares

    

Amount

    

Income

    

Shares

    

Amount

​

​

(In thousands)

​

​

​

​

​

​

(In thousands)

​

​

​

​

​

Net income

​

$

51,417

 

  

 

​

  

​

$

41,162

 

  

 

​

  

Dividends on preferred stock

​

 

(5,659)

 

  

 

​

  

​

 

(3,619)

 

  

 

​

  

Net income allocated to common shareholders

​

$

45,758

 

  

 

​

  

​

$

37,543

 

  

 

​

  

Basic earnings per share

​

 

  

 

28,782,813

​

$

1.59

​

 

  

 

28,743,894

​

$

1.31

Effect of dilutive securities-restricted stock awards

​

 

  

 

91,512

​

 

  

​

 

  

 

18,455

​

 

  

Diluted earnings per share

​

 

  

 

28,874,325

​

$

1.58

​

 

  

 

28,762,349

​

$

1.31

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Month Periods Ended June 30, 

​

​

2021

​

2020

 

​

​

​

​

​

​

Weighted-

​

Per 

​

​

​

​

Weighted-

​

Per 

​

​

Net

​

Average

​

Share

​

Net

​

Average

​

Share

​

    

Income

    

Shares

    

Amount

    

Income

    

Shares

    

Amount

​

​

(In thousands)

​

​

​

​

​

​

(In thousands)

​

​

​

 

​

Net income

​

$

113,400

 

  

 

​

  

​

$

65,745

 

  

 

​

  

Dividends on preferred stock

​

 

(9,416)

 

  

 

​

  

​

 

(7,237)

 

  

 

​

  

Net income allocated to common shareholders

​

$

103,984

 

  

 

​

  

​

$

58,508

 

  

 

​

  

Basic earnings per share

​

 

  

 

28,777,482

​

$

3.61

​

 

  

 

28,739,263

​

$

2.04

Effect of dilutive securities-restricted stock awards

​

 

  

 

84,917

​

 

  

​

 

  

 

21,617

​

 

  

Diluted earnings per share

​

 

  

 

28,862,399

​

$

3.60

​

 

  

 

28,760,880

​

$

2.03

​
v3.21.2
Share-Based Payment Plans
 6 Months Ended
Jun. 30, 2021
Share-Based Payment Plans  
Share-Based Payment Plans

Note 10:   Share-Based Payment Plans

Equity-based incentive awards are currently issued pursuant to the 2017 Equity Incentive Plan (the “2017 Incentive Plan”). Prior to the adoption of the 2017 Incentive Plan, the equity awards issued historically consisted of restricted stock awards issued pursuant to the Incentive Plan for Merchants Bank Executive Officers (the “Prior Incentive Plan”). As of the effective date of the 2017 Equity Incentive Plan, no further awards will be granted under the Prior Incentive Plan. However, any previously outstanding incentive award granted under the Prior Incentive Plan remains subject to the terms of such plan until the time it is no longer outstanding. During the three months ended June 30, 2021 and 2020, the Company did not issue any shares pursuant to awards issued under these plans. During the six months ended June 30, 2021 and 2020, the Company issued 35,056 and 36,046 shares, respectively, pursuant to plans.

During 2018, the Compensation Committee of the Board of Directors approved a plan for non-executive directors to receive a portion of their annual retainer fees in the form of shares of common stock equal to $10,000, rounded up to the nearest whole share. In January 2021, the Board of Directors amended the plan for nonexecutive directors to receive a portion of their annual fees, issued quarterly, in the form of restricted common stock equal to $50,000 per member, rounded up to the nearest whole share, to be effective after the Company’s annual meeting of shareholders held in May 2021. There were 1,460 and 3,130 shares issued to non-executive directors during the three and six months ended June 30, 2021 and 2020, respectively.

v3.21.2
Segment Information
 6 Months Ended
Jun. 30, 2021
Segment Information  
Segment Information

Note 11:   Segment Information

Our Company’s business segments are defined as Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The reportable business segments are consistent with the internal reporting and evaluation of the principal lines of business of the Company. The Multi-family Mortgage Banking segment originates and services government sponsored mortgages for multi-family and healthcare facilities. The Mortgage Warehousing segment funds agency

eligible residential loans from the date of origination or purchase, until the date of sale in the secondary market, as well as commercial loans to non-depository financial institutions. The Banking segment provides a wide range of financial products and services to consumers and businesses, including retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and Small Business Administration (“SBA”) lending. Other includes general and administrative expenses that provide services to all segments; internal funds transfer pricing offsets resulting from allocations to/from the other segments, certain elimination entries and investments in qualified affordable housing limited partnerships. All operations are domestic.

The tables below present selected business segment financial information for the three and six months ended June 30, 2021 and 2020.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Multi-family

​

​

​

​

​

​

​

​

​

​

    

 

​

​

Mortgage 

​

Mortgage

​

​

​

​

​

​

​

​

 

​

    

Banking

    

Warehousing

    

Banking

    

Other

    

Total

​

​

(In thousands)

Three Months Ended June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

204

​

$

29,935

​

$

40,983

​

$

1,316

 

$

72,438

Interest expense

​

 

—

​

 

1,599

​

 

7,216

​

 

(784)

 

 

8,031

Net interest income

​

 

204

​

 

28,336

​

 

33,767

​

 

2,100

 

 

64,407

Provision for loan losses

​

 

—

​

 

(40)

​

 

(275)

​

 

—

 

 

(315)

Net interest income after provision for loan losses

​

 

204

​

 

28,376

​

 

34,042

​

 

2,100

 

 

64,722

Noninterest income

​

 

28,572

​

 

3,079

​

 

2,613

​

 

(1,409)

 

 

32,855

Noninterest expense

​

 

13,626

​

 

2,703

​

 

7,496

​

 

4,358

 

 

28,183

Income before income taxes

​

 

15,150

​

 

28,752

​

 

29,159

​

 

(3,667)

 

 

69,394

Income taxes

​

 

4,179

​

 

7,304

​

 

7,418

​

 

(924)

 

 

17,977

Net income (loss)

​

$

10,971

​

$

21,448

​

$

21,741

​

$

(2,743)

 

$

51,417

Total assets

​

$

238,165

​

$

4,265,162

​

$

5,328,684

​

$

49,521

 

$

9,881,532

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Multi-family

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Mortgage 

​

Mortgage

​

​

​

​

​

​

​

​

 

​

    

Banking

    

Warehousing

    

Banking

    

Other

    

Total

​

​

(In thousands)

Three Months Ended June 30, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

260

​

$

42,044

​

$

25,683

​

$

217

 

$

68,204

Interest expense

​

 

—

​

 

7,786

​

 

10,377

​

 

(1,193)

 

 

16,970

Net interest income

​

 

260

​

 

34,258

​

 

15,306

​

 

1,410

 

 

51,234

Provision for loan losses

​

 

—

​

 

(800)

​

 

2,545

​

 

—

 

 

1,745

Net interest income after provision for loan losses

​

 

260

​

 

35,058

​

 

12,761

​

 

1,410

 

 

49,489

Noninterest income

​

 

12,325

​

 

5,626

​

 

9,179

​

 

(942)

 

 

26,188

Noninterest expense

​

 

7,468

​

 

3,521

​

 

6,097

​

 

3,196

 

 

20,282

Income before income taxes

​

 

5,117

​

 

37,163

​

 

15,843

​

 

(2,728)

 

 

55,395

Income taxes

​

 

1,466

​

 

9,451

​

 

4,031

​

 

(715)

 

 

14,233

Net income (loss)

​

$

3,651

​

$

27,712

​

$

11,812

​

$

(2,013)

 

$

41,162

Total assets

​

$

182,072

​

$

5,575,169

​

$

3,639,638

​

$

42,521

 

$

9,439,400

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Multi-family

​

​

​

​

​

​

​

​

​

​

    

 

​

​

Mortgage 

​

Mortgage

​

​

​

​

​

​

​

​

 

​

    

Banking

    

Warehousing

    

Banking

    

Other

    

Total

​

​

(In thousands)

Six Months Ended June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

411

​

$

68,522

​

$

80,523

​

$

2,531

 

$

151,987

Interest expense

​

 

—

​

 

3,323

​

 

13,655

​

 

(1,361)

 

 

15,617

Net interest income

​

 

411

​

 

65,199

​

 

66,868

​

 

3,892

 

 

136,370

Provision for loan losses

​

 

—

​

 

(1,124)

​

 

2,472

​

 

—

 

 

1,348

Net interest income after provision for loan losses

​

 

411

​

 

66,323

​

 

64,396

​

 

3,892

 

 

135,022

Noninterest income

​

 

61,806

​

 

7,196

​

 

10,291

​

 

(2,502)

 

 

76,791

Noninterest expense

​

 

30,070

​

 

5,599

​

 

14,621

​

 

7,977

 

 

58,267

Income before income taxes

​

 

32,147

​

 

67,920

​

 

60,066

​

 

(6,587)

 

 

153,546

Income taxes

​

 

9,215

​

 

17,289

​

 

15,300

​

 

(1,658)

 

 

40,146

Net income

​

$

22,932

​

$

50,631

​

$

44,766

​

$

(4,929)

 

$

113,400

Total assets

​

$

238,165

​

$

4,265,162

​

$

5,328,684

​

$

49,521

 

$

9,881,532

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Multi-family

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Mortgage 

​

Mortgage

​

​

​

​

​

​

​

​

 

​

    

Banking

    

Warehousing

    

Banking

    

Other

    

​

Total

​

​

(In thousands)

Six Months Ended June 30, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

680

​

$

72,143

​

$

54,913

​

$

885

 

$

128,621

Interest expense

​

 

—

​

 

19,871

​

 

22,184

​

 

(3,021)

 

 

39,034

Net interest income

​

 

680

​

 

52,272

​

 

32,729

​

 

3,906

 

 

89,587

Provision for loan losses

​

 

—

​

 

380

​

 

4,363

​

 

—

 

 

4,743

Net interest income after provision for loan losses

​

 

680

​

 

51,892

​

 

28,366

​

 

3,906

 

 

84,844

Noninterest income

​

 

29,689

​

 

8,402

​

 

9,862

​

 

(1,863)

 

 

46,090

Noninterest expense

​

 

17,816

​

 

6,540

​

 

11,785

​

 

6,434

 

 

42,575

Income before income taxes

​

 

12,553

​

 

53,754

​

 

26,443

​

 

(4,391)

 

 

88,359

Income taxes

​

 

3,503

​

 

13,605

​

 

6,681

​

 

(1,175)

 

 

22,614

Net income

​

$

9,050

​

$

40,149

​

$

19,762

​

$

(3,216)

 

$

65,745

Total assets

​

$

182,072

​

$

5,575,169

​

$

3,639,638

​

$

42,521

 

$

9,439,400

​
v3.21.2
Preferred Stock Offerings
 6 Months Ended
Jun. 30, 2021
Preferred Stock Offerings  
Preferred Stock Offerings

Note 12:   Preferred Stock Offerings

Public Offerings of Preferred Stock:

​

On March 28, 2019, the Company issued 2,000,000 shares of 7.00% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock, without par value, and with a liquidation preference of $25.00 per share (the “Series A Preferred Stock”). The aggregate gross offering proceeds for the shares issued by the Company was $50.0 million, and after deducting underwriting discounts and commissions and offering expenses of approximately $1.7 million paid to third parties, the Company received total net proceeds of $48.3 million. On April 12, 2019, the Company issued an additional 81,800 shares of Series A Preferred Stock to the underwriters related to their exercise of an option to purchase additional shares under the associated underwriting agreement, resulting in an additional $2.0 million in net proceeds, after deducting $41,000 in underwriting discounts. The Series A Preferred Stock have no voting rights with respect to matters that generally require the approval of our common shareholders. Dividends on the Series A Preferred Stock, to the extent declared by the Company’s board, are payable quarterly. The Company may redeem the Series A Preferred Stock, in whole or in part, at its option, on any dividend payment date on or after April 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.

On August 19, 2019, the Company issued 5,000,000 depositary shares, each representing a 1/40th interest in a share of its 6.00% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock, without par value (the “Series B Preferred Stock”), and with a liquidation preference of $1,000.00 per share (equivalent to $25.00 per depositary share). The aggregate gross offering proceeds for the shares issued by the Company was $125.0 million, and after deducting underwriting discounts and commissions and offering expenses of approximately $4.2 million paid to third parties, the Company received total net proceeds of $120.8 million. 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 our 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.

On March 23, 2021, the Company issued 6,000,000 depositary shares, each representing a 1/40th interest in a share of its 6.00% Fixed-to-Floating Rate Series C Non-Cumulative Perpetual Preferred Stock, without par value (the “Series C Preferred Stock”), and with a liquidation preference of $1,000.00 per share (equivalent to $25.00 per depositary share). The aggregate gross offering proceeds for the shares issued by the Company was $150.0 million, and after deducting underwriting discounts and commissions and offering expenses of approximately $5.1 million paid to third parties, the Company received total net proceeds of $144.9 million. 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 our 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.

Private Placement Offerings of Preferred Stock

The Company previously issued a total of 41,625 shares of 8% Non-Cumulative, Perpetual Preferred Stock, without par value, with a liquidation preference of $1,000.00 per share (8% Preferred Stock”) in private placement offerings. The Company was able to redeem this Preferred Stock, in whole or in part, at its option, on any dividend payment date on or after December 31, 2020, 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.

On June 27, 2019 the Company issued an additional 874,000 shares of its 7.00% Series A Preferred Stock, without par value and with a liquidation preference of $25.00 per share, for aggregate proceeds of $21.85 million. No underwriter or placement agent was involved in this private placement and the Company did not pay any brokerage or underwriting fees or discounts in connection with the issuance of such shares. The shares were purchased primarily by related parties, including Michael Petrie, Chairman and Chief Executive Officer; Randall Rogers, Vice Chairman and a director and members of his family; Michael Dury, President of Merchants Capital; and other accredited investors.

On April 15, 2021, all 41,625 shares of the 8% Preferred Stock were redeemed for $41.6 million, plus unpaid dividends of $139,000. On May 6, 2021 the 8% Preferred Stock shareholders participated in a private offering to replace their redeemed shares with Series C Preferred Stock. Accordingly, 46,181 shares (1,847,233 depositary shares) of Series C Preferred Stock were issued at a price of $25 per depositary share. The total capital raised from the private offering was $46.2 million, net of $23,000 in expenses.

​

Repurchase/Redemption of Preferred Stock:

On September 23, 2019 the Company repurchased and subsequently retired 874,000 shares of its Series A Preferred Stock, for its liquidation preference of $25 per share, at an aggregate cost of $21.85 million. There were no brokerage fees in connection with the transaction.

​

On April 15, 2021, all 41,625 shares of the 8% Preferred Stock were redeemed for $41.6 million, plus unpaid dividends of $139,000.

​
v3.21.2
Recent Accounting Pronouncements
 6 Months Ended
Jun. 30, 2021
Recent Accounting Pronouncements  
Recent Accounting Pronouncements

Note 13:   Recent Accounting Pronouncements

The Company is an emerging growth company and as such will be subject to the effective dates noted for private companies if they differ from the effective dates noted for public companies.

FASB ASU 2016-02, Leases

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-02, “Leases.” Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:

●A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and
●A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, “Revenue from Contracts with Customers.” The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach.

As an emerging growth company, the amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2021, and for interim periods for years beginning after January 1, 2022. The Company is continuing to evaluate the impact of adopting this new guidance, but it does not expect the adoption to have a material impact on the Company’s financial position or results of operations.

FASB ASU 2016-13, Financial Instruments—Credit Losses

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses”, commonly referred to as “CECL”. The amendments in this ASU replace the incurred loss model with a methodology that reflects the “current expected credit losses” over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. ASU 2016-13 replaces the incurred loss impairment methodology with a new methodology that reflects expected credit losses over the lives of the loans and requires consideration of a broader range of information to form credit loss estimates. The ASU requires an organization to estimate all expected credit losses for financial assets measured at amortized cost, including loans and held-to-maturity debt securities, based on historical experience, current conditions, and reasonable and supportable forecasts. Additional disclosures are required.

As an emerging growth company, the amendments in ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Because the Company’s status as an emerging growth company is expected to expire on December 31, 2022, this standard will likely be implemented by December 31, 2022. The Company has established a cross-functional committee that has developed a project plan to review modeling data currently available and technology needed to ensure compliance with this standard. The committee has contracted with a vendor to assist in generating specific loan level details within our core systems, as well as compiling peer and industry data that would be useful in our modeling forecasts. The Company generally expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, and is progressing towards determining the magnitude of any such one-time adjustment or the overall impact of the new guidance on the Company’s consolidated financial statements. Management continues to recognize that the implementation of this ASU may increase the balance of the allowance for loan losses and is continuing to evaluate the potential impact on the Company’s financial position and results of operations.

FASB ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes  

​

In December 2019, the FASB issued ASU No. 2019-12. This ASU removes specific exceptions to the general principles in Topic 740 in GAAP. It eliminates the need for an organization to analyze whether the following apply in a given period: (1) exception to the incremental approach for intraperiod tax allocation; (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments; and (3) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. The ASU also improves financial statement preparers’ application of income tax-related guidance and simplifies GAAP for: (1) franchise taxes that are partially based on income; (2) transactions with a government that result in a step up in the tax basis of goodwill; (3) separate financial statements of legal entities that are not subject to tax; and (4) enacted changes in tax laws in interim periods.

​

As an emerging growth company, the amendments in this update become effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adopting the new guidance but does not expect it to have a material impact on the consolidated financial statements.

​

FASB ASU 2020-04 - Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

​

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary, optional guidance to ease the potential burden in accounting for, or recognizing the effects of, the transition away from the LIBOR or other interbank offered rate on financial reporting. To help with the transition to new reference rates, the ASU provides optional expedients and exceptions for applying GAAP to affected contract modifications and hedge accounting relationships. The main provisions include:

​

●A change in a contract’s reference interest rate would be accounted for as a continuation of that contract rather than as the creation of a new one for contracts, including loans, debt, leases, and other arrangements, that meet specific criteria.

​

●When updating its hedging strategies in response to reference rate reform, an entity would be allowed to preserve its hedge accounting.

​

Entities may apply this ASU as of the beginning of an interim period that includes the March 12, 2020 issuance date of the ASU, through December 31, 2022.  The Company is in the process of implementing a transition plan to identify and modify its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR. The Company believes the adoption of this guidance on activities subsequent to December 31, 2020 through December 31, 2022 would not have a material impact on the consolidated financial statements.
v3.21.2
Basis of Presentation (Policies)
 6 Months Ended
Jun. 30, 2021
Basis of Presentation  
Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Merchants Bancorp, a registered bank holding company (the “Company”) and its wholly owned subsidiaries, Merchants Bank of Indiana (“Merchants Bank”) and Farmers-Merchants Bank of Illinois (“FMBI”). Merchants Bank’s primary operating subsidiaries include Merchants Capital Corp. (‘MCC”) and Merchants Capital Servicing, LLC (“MCS”). 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, 2020, which has been derived from audited financial statements, and unaudited condensed consolidated financial statements of the Company as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020, were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company as of and for the year ended December 31, 2020 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 June 30, 2021 and the results of operations for the three and six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020. All interim amounts have not been audited and the results of operations for the three and six months ended June 30, 2021, herein are not necessarily indicative of the results of operations to be expected for the entire year.
Principles of Consolidation

Principles of Consolidation

The unaudited condensed consolidated financial statements as of and for the period ended June 30, 2021 and 2020 include results from the Company, and its wholly owned subsidiaries, Merchants Bank, and FMBI. Also included are Merchants Bank’s primary operating subsidiaries, MCC and MCS, as well as all 100% directly and indirectly owned subsidiaries owned by Merchants Bancorp.

Additionally, the unaudited condensed consolidated financial statements include consolidated results from certain entities primarily involved in single-family debt financing until January 30, 2021, while the Company was deemed to be 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. All significant intercompany accounts and transactions have been eliminated in consolidation.

On February 1, 2021, the Company’s debt fund entities were restructured in such a way that its ownership and participation was significantly reduced with the inclusion of additional, unrelated investors and the Company was no longer classified as a primary beneficiary.  Accordingly, results from these entities were no longer consolidated after this date, in accordance with the consolidation guidelines of the Accounting Standards Update of Topic 810. Following the deconsolidation, the carrying value of assets and liabilities of these entities were removed from the consolidated balance sheet, and the continuing investments were recorded at fair value at the date of deconsolidation. The total amount deconsolidated from the balance sheet included net assets of approximately $10 million, consisting primarily of $66.6 million in loans receivable, and $52.7 million in borrowings with Merchants Bank that was previously eliminated in consolidation.  The fair value of its continuing investments was approximately $10 million and has been reported in Other Assets after deconsolidation. The estimated fair value was determined based on third-party evaluations of similar assets in the underlying business. The difference between the fair value of these deconsolidated entities and their

carrying value was deemed to be immaterial, resulting in no gain or loss on deconsolidation. The maximum loss exposure that would be absorbed by the Company in the event that these unconsolidated investments were deemed worthless is approximately $10.0 million at June 30, 2021.  These continuing investments after deconsolidation are classified as variable interest entities, will not be consolidated, and are accounted for under the equity method of accounting. The Company will analyze whether its entities are the primary beneficiary on an ongoing basis. Changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment.
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.
Reclassifications

Reclassifications

​

Certain reclassifications may have been made to the 2020 financial statements to conform to the financial statement presentation as of and for the three and six months ended June 30, 2021. These reclassifications had no effect on net income.
v3.21.2
Securities Available For Sale (Tables)
 6 Months Ended
Jun. 30, 2021
Securities Available For Sale  
Schedule of amortized cost and approximate fair values, together with gross unrealized gains and losses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

​

​

​

​

Gross

​

Gross

​

​

​

​

Amortized

​

Unrealized

​

Unrealized

​

Fair

​

    

Cost

    

Gains

    

Losses

    

Value

​

​

(In thousands)

Available for sale securities:

 

​

  

 

​

  

 

​

  

 

​

  

Treasury notes

​

$

5,013

​

$

10

​

$

3

​

$

5,020

Federal agencies

​

 

254,962

​

 

13

​

 

412

​

 

254,563

Municipals

​

 

5,931

​

 

107

​

 

—

​

 

6,038

Mortgage-backed - Government-sponsored entity (GSE) - residential

​

 

49,383

​

 

256

​

 

—

​

 

49,639

Total available for sale securities

​

$

315,289

​

$

386

​

$

415

​

$

315,260

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

​

​

​

​

Gross

​

Gross

​

​

​

​

Amortized

​

Unrealized

​

Unrealized

​

Fair

​

    

Cost

    

Gains

    

Losses

    

Value

​

​

(In thousands)

Available for sale securities:

 

​

  

 

​

  

 

​

  

 

​

  

Treasury notes

​

$

6,535

​

$

24

​

$

—

​

$

6,559

Federal agencies

​

 

234,954

​

 

103

​

 

17

​

 

235,040

Municipals

​

 

5,935

​

 

90

​

 

—

​

 

6,025

Mortgage-backed - Government-sponsored entity (GSE) - residential

​

 

21,899

​

 

279

​

 

—

​

 

22,178

Total available for sale securities

​

$

269,323

​

$

496

​

$

17

​

$

269,802

​

Mortgage-backed securities in the table above for June 30, 2021 include securities purchased from Freddie Mac following the loan sale and securitization arrangement with Freddie Mac described in Note 4: Loans and Allowance for Loan Losses. These securities were valued at $28.4 million as of June 30, 2021.
Schedule of amortized cost and fair value of available-for-sale securities by contractual maturity

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

December 31, 2020

​

​

Amortized

​

Fair

​

Amortized

​

Fair

​

    

Cost

    

Value

    

Cost

    

Value

Contractual Maturity

​

(In thousands)

Within one year

​

$

7,066

​

$

7,069

​

$

6,288

​

$

6,302

After one through five years

​

 

257,982

​

 

257,620

​

 

239,770

​

 

239,877

After five through ten years

​

 

513

​

 

553

​

 

515

​

 

549

After ten years

​

 

345

​

 

379

​

 

851

​

 

896

​

​

 

265,906

​

 

265,621

​

 

247,424

​

 

247,624

Mortgage-backed - Government-sponsored entity (GSE) - residential

​

 

49,383

​

 

49,639

​

 

21,899

​

 

22,178

​

​

$

315,289

​

$

315,260

​

$

269,323

​

$

269,802
Schedule of gross unrealized losses and fair value of investments with unrealized losses have been in continuous

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

​

​

​

​

​

​

​

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)

Available for sale securities:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Treasury notes

​

$

1,996

​

$

3

​

$

—

​

$

—

​

$

1,996

​

$

3

Federal agencies

​

​

179,553

​

​

412

​

​

—

​

​

—

​

​

179,553

​

​

412

​

​

$

181,549

​

$

415

​

$

—

​

$

—

​

$

181,549

​

$

415

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

​

​

​

​

​

​

​

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)

Available for sale securities:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Federal agencies

​

$

69,939

​

$

17

​

$

—

​

$

—

​

$

69,939

​

$

17
v3.21.2
Loans and Allowance for Loan Losses (Tables)
 6 Months Ended
Jun. 30, 2021
Loans and Allowance for Loan Losses  
Summary of loans

​

​

​

​

​

​

​

​

​

​

June 30, 

​

December 31, 

​

    

2021

    

2020

​

​

(In thousands)

​

​

​

​

​

​

​

Mortgage warehouse lines of credit

​

$

1,177,940

​

$

1,605,745

Residential real estate

​

 

806,325

​

 

678,848

Multi-family and healthcare financing

​

 

2,970,770

​

 

2,749,020

Commercial and commercial real estate

​

 

409,710

​

 

387,294

Agricultural production and real estate

​

 

92,786

​

 

101,268

Consumer and margin loans

​

 

15,392

​

 

13,251

​

​

 

5,472,923

​

 

5,535,426

Less

​

 

  

​

 

  

Allowance for loan losses

​

 

28,696

​

 

27,500

​

​

​

​

​

​

​

Loans Receivable

​

$

5,444,227

​

$

5,507,926
Summary of activity in the allowance for loans and recorded investment by loan portfolio

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At or For the Three Months Ended June 30, 2021

​

 

MTG WHLOC

 

RES RE

 

MF RE

 

CML & CRE

 

AG & AGRE

 

CON & MAR

 

TOTAL

​

​

(In thousands)

Allowance for loan losses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

3,321

​

$

3,600

 

$

17,136

​

$

4,264

​

$

632

​

$

138

​

$

29,091

Provision (credit) for loan losses

​

 

(386)

​

 

371

 

​

(1,354)

​

 

1,059

​

 

(21)

​

 

16

​

 

(315)

Loans charged to the allowance

​

 

—

​

 

(2)

 

​

—

​

 

(84)

​

 

—

​

 

—

​

 

(86)

Recoveries of loans previously charged off

​

 

—

​

 

—

 

​

—

​

 

—

​

 

—

​

 

6

​

 

6

Balance, end of period

​

$

2,935

​

$

3,969

​

$

15,782

​

$

5,239

​

$

611

​

$

160

​

$

28,696

Ending balance: individually evaluated for impairment

​

$

—

​

$

—

 

$

—

​

$

1,852

​

$

—

​

$

—

​

$

1,852

Ending balance: collectively evaluated for impairment

​

$

2,935

​

$

3,969

​

$

15,782

​

$

3,387

​

$

611

​

$

160

​

$

26,844

Loans

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Ending balance

​

$

1,177,940

​

$

806,325

​

$

2,970,770

​

$

409,710

​

$

92,786

​

$

15,392

​

$

5,472,923

Ending balance individually evaluated for impairment

​

$

—

​

$

629

​

$

—

​

$

6,592

​

$

158

​

$

6

​

$

7,385

Ending balance collectively evaluated for impairment

​

$

1,177,940

​

$

805,696

​

$

2,970,770

​

$

403,118

​

$

92,628

​

$

15,386

​

$

5,465,538

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Three Months Ended June 30, 2020

​

 

MTG WHLOC

 

RES RE

 

MF RE

 

CML & CRE

 

AG & AGRE

 

CON & MAR

 

TOTAL

​

​

(In thousands)

Allowance for loan losses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

2,709

​

$

2,062

 

$

7,694

​

$

5,662

​

$

561

​

$

195

​

$

18,883

Provision (credit) for loan losses

​

 

494

​

 

248

 

​

2,184

​

 

(1,188)

​

 

49

​

 

(42)

​

 

1,745

Loans charged to the allowance

​

 

—

​

 

—

 

​

—

​

 

(131)

​

 

—

​

 

—

​

 

(131)

Balance, end of period

​

$

3,203

​

$

2,310

​

$

9,878

​

$

4,343

​

$

610

​

$

153

​

$

20,497

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Six Months Ended June 30, 2021

​

  

MTG WHLOC

  

RES RE

  

MF RE

  

CML & CRE

  

AG & AGRE

  

CON & MAR

  

TOTAL

​

​

(In thousands)

Allowance for loan losses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

4,018

​

$

3,334

​

$

14,731

​

$

4,641

​

$

636

​

$

140

​

$

27,500

Provision for loan losses

​

 

(1,083)

​

​

637

​

​

1,051

​

​

750

​

​

(25)

​

​

18

​

​

1,348

Loans charged to the allowance

​

 

—

​

​

(2)

​

​

—

​

​

(152)

​

​

—

​

​

(6)

​

​

(160)

Recoveries of loans previously charged off

​

 

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

8

​

 

8

Balance, end of period

​

$

2,935

​

$

3,969

​

$

15,782

​

$

5,239

​

$

611

​

$

160

​

$

28,696

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Six Months Ended June 30, 2020

​

  

MTG WHLOC

  

RES RE

  

MF RE

  

CML & CRE

  

AG & AGRE

  

CON & MAR

  

TOTAL

​

​

(In thousands)

Allowance for loan losses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

1,913

​

$

2,042

​

$

7,018

​

$

4,173

​

$

523

​

$

173

​

$

15,842

Provision (credit) for loan losses

​

 

1,290

​

​

268

​

​

2,860

​

​

257

​

​

87

​

​

(19)

​

 

4,743

Loans charged to the allowance

​

 

—

​

​

—

​

​

—

​

​

(131)

​

​

—

​

​

(1)

​

 

(132)

Recoveries of loans previously charged off

​

 

—

​

​

—

​

​

—

​

​

44

​

​

—

​

​

—

​

 

44

Balance, end of period

​

$

3,203

​

$

2,310

​

$

9,878

​

$

4,343

​

$

610

​

$

153

​

$

20,497

​
Summary of activity in the allowance for loan losses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

 

MTG WHLOC

 

RES RE

 

MF RE

 

CML & CRE

 

AG & AGRE

 

CON & MAR

 

TOTAL

​

​

(In thousands)

Allowance for loan losses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, December 31, 2020

​

$

4,018

​

$

3,334

​

$

14,731

​

$

4,641

​

$

636

​

$

140

​

$

27,500

Ending balance: individually evaluated for impairment

​

$

—

​

$

7

​

$

—

​

$

1,606

​

$

—

​

$

—

​

$

1,613

Ending balance: collectively evaluated for impairment

​

$

4,018

​

$

3,327

​

$

14,731

​

$

3,035

​

$

636

​

$

140

​

$

25,887

Loans

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Balance, December 31, 2020

​

$

1,605,745

​

$

678,848

​

$

2,749,020

​

$

387,294

​

$

101,268

​

$

13,251

​

$

5,535,426

Ending balance individually evaluated for impairment

​

$

—

​

$

2,761

​

$

—

​

$

9,591

​

$

2,100

​

$

12

​

$

14,464

Ending balance collectively evaluated for impairment

​

$

1,605,745

​

$

676,087

​

$

2,749,020

​

$

377,703

​

$

99,168

​

$

13,239

​

$

5,520,962
Schedule of credit risk profile of loan portfolio

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

    

MTG WHLOC

    

RES RE

    

MF RE

    

CML & CRE

    

AG & AGRE

    

CON & MAR

    

TOTAL

​

​

(In thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Special Mention (Watch)

​

$

—

​

$

821

​

$

143,906

​

$

2,342

​

$

1,932

​

$

5

​

$

149,006

Special Mention (Watch) - COVID-19 Deferrals

​

​

—

​

​

25

​

​

185

​

​

—

​

​

—

​

​

—

​

​

210

Substandard

​

 

—

​

​

629

​

​

—

​

​

6,592

​

​

158

​

​

6

​

​

7,385

Acceptable and Above

​

 

1,177,940

​

 

804,850

​

 

2,826,679

​

 

400,776

​

 

90,696

​

 

15,381

​

 

5,316,322

Total

​

$

1,177,940

​

$

806,325

​

$

2,970,770

​

$

409,710

​

$

92,786

​

$

15,392

​

$

5,472,923

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

    

MTG WHLOC

    

RES RE

    

MF RE

    

CML & CRE

    

AG & AGRE

    

CON & MAR

    

TOTAL

​

​

(In thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Special Mention (Watch)

​

$

222

​

$

853

​

$

145,050

​

$

2,620

​

$

4,160

​

$

34

​

$

152,939

Special Mention (Watch) - COVID-19 Deferrals

​

​

—

​

​

383

​

​

185

​

​

110

​

​

—

​

​

—

​

​

678

Substandard

​

 

—

​

 

2,761

​

 

—

​

 

9,591

​

 

2,100

​

 

12

​

 

14,464

Acceptable and Above

​

 

1,605,523

​

 

674,851

​

 

2,603,785

​

 

374,973

​

 

95,008

​

 

13,205

​

 

5,367,345

Total

​

$

1,605,745

​

$

678,848

​

$

2,749,020

​

$

387,294

​

$

101,268

​

$

13,251

​

$

5,535,426

​
Schedule of aging analysis of the recorded investment in loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

    

30-59 Days

    

60-89 Days

    

Greater Than

    

Total

    

​

​

    

Total

​

​

Past Due

​

Past Due

​

90 Days

​

Past Due

​

Current

​

Loans

​

​

(In thousands)

MTG WHLOC

​

$

—

​

$

—

​

$

—

​

$

—

​

$

1,177,940

​

$

1,177,940

RES RE

​

 

—

​

​

—

​

 

—

​

 

—

​

 

806,325

​

 

806,325

MF RE

​

 

151

​

​

157

​

 

197

​

 

505

​

 

2,970,265

​

 

2,970,770

CML & CRE

​

 

—

​

​

50

​

 

2,279

​

 

2,329

​

 

407,381

​

 

409,710

AG & AGRE

​

 

410

​

​

39

​

 

—

​

 

449

​

 

92,337

​

 

92,786

CON & MAR

​

 

4

​

​

—

​

 

6

​

 

10

​

 

15,382

​

 

15,392

​

​

$

565

​

$

246

​

$

2,482

​

$

3,293

​

$

5,469,630

​

$

5,472,923

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

    

30-59 Days

    

60-89 Days

    

Greater Than

    

Total

    

​

​

    

Total

​

​

Past Due

​

Past Due

​

90 Days

​

Past Due

​

Current

​

Loans

​

​

(In thousands)

MTG WHLOC

​

$

—

 

$

—

​

$

—

​

$

—

​

$

1,605,745

​

$

1,605,745

RES RE

​

 

364

 

​

80

​

 

630

​

 

1,074

​

 

677,774

​

 

678,848

MF RE

​

 

—

 

​

36,760

​

 

—

​

 

36,760

​

 

2,712,260

​

 

2,749,020

CML & CRE

​

 

608

 

​

76

​

 

3,582

​

 

4,266

​

 

383,028

​

 

387,294

AG & AGRE

​

 

3,769

 

​

—

​

 

1,934

​

 

5,703

​

 

95,565

​

 

101,268

CON & MAR

​

 

7

 

​

—

​

 

19

​

 

26

​

 

13,225

​

 

13,251

​

​

$

4,748

​

$

36,916

​

$

6,165

​

$

47,829

​

$

5,487,597

​

$

5,535,426

​
Schedule of components of impaired loans and specific valuation allowance

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

    

MTG WHLOC

    

RES RE

    

MF RE

    

CML & CRE

    

AG & AGRE

    

CON & MAR

    

TOTAL

​

​

(In thousands)

Impaired loans without a specific allowance:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Recorded investment

​

$

—

​

$

629

​

$

—

​

$

933

​

$

158

​

$

6

​

$

1,726

Unpaid principal balance

​

 

—

​

 

629

​

 

—

​

 

933

​

 

158

​

 

6

​

 

1,726

Impaired loans with a specific allowance:

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Recorded investment

​

 

—

​

 

—

​

 

—

​

 

5,659

​

 

—

​

 

—

​

 

5,659

Unpaid principal balance

​

 

—

​

 

—

​

 

—

​

 

5,659

​

 

—

​

 

—

​

 

5,659

Specific allowance

​

 

—

​

 

—

​

 

—

​

 

1,852

​

 

—

​

 

—

​

 

1,852

Total impaired loans:

​

 

  

​

 

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Recorded investment

​

 

—

​

 

629

​

 

—

​

 

6,592

​

 

158

​

 

6

​

 

7,385

Unpaid principal balance

​

 

—

​

 

629

​

 

—

​

 

6,592

​

 

158

​

 

6

​

 

7,385

Specific allowance

​

 

—

​

 

—

​

 

—

​

 

1,852

​

 

—

​

 

—

​

 

1,852

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

    

MTG WHLOC

    

RES RE

    

MF RE

    

CML & CRE

    

AG & AGRE

    

CON & MAR

    

TOTAL

​

​

(In thousands)

Impaired loans without a specific allowance:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Recorded investment

​

$

—

​

$

2,704

​

$

—

​

$

3,319

​

$

2,100

​

$

7

​

$

8,130

Unpaid principal balance

​

 

—

​

 

2,704

​

 

—

​

 

3,319

​

 

2,100

​

 

7

​

 

8,130

Impaired loans with a specific allowance:

​

 

—

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Recorded investment

​

 

—

​

 

57

​

 

—

​

 

6,272

​

 

—

​

 

5

​

 

6,334

Unpaid principal balance

​

 

—

​

 

57

​

 

—

​

 

6,272

​

 

—

​

 

5

​

 

6,334

Specific allowance

​

 

—

​

 

7

​

 

—

​

 

1,606

​

 

—

​

 

—

​

 

1,613

Total impaired loans:

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Recorded investment

​

 

—

​

 

2,761

​

 

—

​

 

9,591

​

 

2,100

​

 

12

​

 

14,464

Unpaid principal balance

​

 

—

​

 

2,761

​

 

—

​

 

9,591

​

 

2,100

​

 

12

​

 

14,464

Specific allowance

​

 

—

​

 

7

​

 

—

​

 

1,606

​

 

—

​

 

—

​

 

1,613

​

​
Schedule of average recorded investment and interest income recognized in impaired loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

MTG WHLOC

    

RES RE

    

MF RE

    

CML & CRE

    

AG & AGRE

    

CON & MAR

    

TOTAL

​

​

(In thousands)

Three Months Ended June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Average recorded investment in impaired loans

​

$

—

​

$

2,201

​

$

—

​

$

6,113

​

$

175

​

$

6

​

$

8,495

Interest income recognized

​

 

—

​

​

16

​

​

—

​

​

55

​

​

—

​

​

—

  

 

71

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Average recorded investment in impaired loans

​

$

171

​

$

2,916

​

$

—

​

$

9,229

​

$

2,092

​

$

17

​

$

14,425

Interest income recognized

​

​

—

​

​

19

​

​

—

​

​

94

​

​

—

​

​

—

​

​

113

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

MTG WHLOC

    

RES RE

    

MF RE

    

CML & CRE

    

AG & AGRE

    

CON & MAR

    

TOTAL

​

​

(In thousands)

Six Months Ended June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Average recorded investment in impaired loans

​

$

—

​

$

2,442

​

$

—

​

$

7,254

​

$

1,000

​

$

7

​

$

10,703

Interest income recognized

​

 

—

​

 

27

​

 

—

​

 

259

​

 

—

​

 

—

​

 

286

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Average recorded investment in impaired loans

​

$

197

​

$

2,875

​

$

—

​

$

9,231

​

$

1,195

​

$

18

​

$

13,516

Interest income recognized

​

​

—

​

​

35

​

​

—

​

​

215

​

​

—

​

​

1

​

​

251
Schedule of nonaccrual loans and loans past due 90 days or more and still accruing

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 

​

December 31, 

​

​

​

2021

​

2020

​

​

​

​

​

​

Total Loans >

​

​

​

​

Total Loans >

​

​

​

​

​

​

90 Days &

​

​

​

​

90 Days &

​

​

    

Nonaccrual

    

Accruing

    

Nonaccrual

    

Accruing

    

​

​

(In thousands)

RES RE

​

$

556

​

$

—

​

$

578

​

$

69

​

CML & CRE

​

 

1,880

​

​

399

​

 

2,052

​

​

1,240

​

AG & AGRE

​

 

158

​

 

—

​

 

181

​

 

2,181

​

CON & MAR

​

 

6

​

 

—

​

 

12

​

 

8

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

$

2,600

​

$

399

​

$

2,823

​

$

3,498

​
v3.21.2
Regulatory Matters (Tables)
 6 Months Ended
Jun. 30, 2021
Regulatory Matters  
Summary of bank's actual capital amounts and ratios

​

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

​

​

​

Actual

​

Capitalized(1)

​

​

    

Amount

    

Ratio

    

Amount

    

Ratio

    

​

​

(Dollars in thousands)

​

June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

CBLR (Tier 1) capital(1) (to average assets)

​

 

​

 

  

​

 

  

 

​

​

(i.e., CBLR - leverage ratio)

​

​

​

​

​

​

​

​

​

​

​

Company

​

$

1,041,631

 

10.9

%  

$

810,065

 

> 8.5

%  

Merchants Bank

​

​

1,001,502

 

10.8

%  

 

786,534

 

> 8.5

%  

FMBI

​

 

26,691

 

9.6

%  

 

23,613

 

> 8.5

%  

​

​

​

​

​

​

​

​

​

​

​

​

​

1
As defined by regulatory agencies.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Minimum Amount

​

​

​

​

​

​

​

​

To Be Well

​

​

​

Actual

​

Capitalized(1)

​

​

    

Amount

    

Ratio

    

Amount

    

Ratio

​

​

​

(Dollars in thousands)

​

December 31, 2020

​

​

​

​

​

​

​

​

​

​

​

CBLR (Tier 1) capital(1) (to average assets)

 

​

  

 

  

 

​

  

 

  

 

(i.e., CBLR - leverage ratio)

​

​

​

​

​

​

​

​

​

​

​

Company

​

$

792,456

 

8.6

%  

$

738,019

 

> 8

%  

Merchants Bank

​

 

781,221

 

8.7

%  

 

718,120

 

> 8

%  

FMBI

​

​

24,456

 

9.8

%  

 

19,979

 

> 8

%  

​

1As defined by regulatory agencies.

​
v3.21.2
Derivative Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2021
Derivative Financial Instruments  
Summary of notional amount and fair value of derivative assets and liabilities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Notional

​

​

​

​

​

Fair Value

​

​

Amount

 

​

Balance Sheet Location

 

​

Asset

 

​

Liability

June 30, 2021

​

(In thousands)

​

​

​

​

​

(In thousands)

Interest rate lock commitments

$

105,076

​

​

Other assets/liabilities

​

$

487

​

$

54

Forward contracts

$

107,364

​

​

Other assets/liabilities

​

 

8

​

​

223

​

​

​

​

​

​

​

$

495

​

$

277

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Notional

​

​

​

​

​

Fair Value

​

​

Amount

 

​

Balance Sheet Location

 

​

Asset

 

​

Liability

December 31, 2020

​

(In thousands)

​

​

​

​

​

(In thousands)

Interest rate lock commitments

$

412,043

​

​

Other assets/liabilities

​

$

6,131

​

$

—

Forward contracts

$

304,024

​

​

Other assets/liabilities

​

 

—

​

​

2,682

​

​

​

​

​

​

​

$

6,131

​

$

2,682
Summarizes the periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30, 

​

June 30, 

​

    

2021

    

2020

    

2021

    

2020

​

​

(In thousands)

​

​

(In thousands)

Interest rate lock commitments

​

$

1,046

​

$

3,743

​

$

(5,698)

​

$

5,556

Forward contracts (includes pair-off settlements)

​

​

(2,289)

​

​

(2,114)

​

 

6,107

​

​

(3,958)

Net derivative gains (loss)

​

$

(1,243)

​

$

1,629

​

$

409

​

$

1,598

​

​

​

​

​

​

​

​

​

​

​

​

​
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)

June 30, 2021

$

86,387

​

​

Other assets/liabilities

​

$

2,089

​

$

2,089

December 31, 2020

$

82,726

​

​

Other assets/liabilities

​

$

3,170

​

$

3,170
Summarizes the periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30, 

​

June 30, 

​

    

2021

    

2020

    

2021

    

2020

​

​

(In thousands)

​

​

(In thousands)

Gross swap gains

​

$

195

​

$

634

​

$

1,081

​

$

3,337

Gross swap losses

​

​

(195)

​

​

(634)

​

 

(1,081)

​

​

(3,337)

Net swap gains (losses)

​

$

—

​

$

—

​

$

—

​

$

—

​

​

​

​

​

​

​

​

​

​

​

​

​
v3.21.2
Disclosures about Fair Value of Assets and Liabilities (Tables)
 6 Months Ended
Jun. 30, 2021
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)

June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage loans in process of securitization

​

$

461,914

​

$

—

​

$

461,914

​

$

—

Available for sale securities:

​

 

  

​

 

  

​

 

  

​

 

  

Treasury notes

​

 

5,020

​

 

5,020

​

 

—

​

 

—

Federal agencies

​

 

254,563

​

 

—

​

 

254,563

​

 

—

Municipals

​

 

6,038

​

 

—

​

 

6,038

​

 

—

Mortgage-backed - Government-sponsored entity (GSE) - residential

​

 

49,639

​

 

—

​

 

49,639

​

 

—

Loans held for sale

​

 

26,623

​

 

—

​

 

26,623

​

 

—

Mortgage servicing rights

​

 

98,331

​

 

—

​

 

—

​

 

98,331

Derivative assets - interest rate lock commitments

​

 

487

​

 

—

​

 

—

​

 

487

Derivative assets - forward contracts

​

 

8

​

 

—

​

 

8

​

 

—

Derivative assets - interest rate swaps

​

 

2,089

​

 

—

​

 

2,089

​

 

—

Derivative liabilities - interest rate lock commitments

​

 

54

​

​

—

​

​

—

​

​

54

Derivative liabilities - forward contracts

​

 

223

​

​

—

​

​

223

​

​

—

Derivative liabilities - interest rate swaps

​

 

2,089

​

​

—

​

​

2,089

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

 

  

​

​

​

​

​

​

​

​

​

Mortgage loans in process of securitization

​

$

338,733

​

$

—

​

$

338,733

​

$

—

Available for sale securities:

​

 

  

​

 

  

​

 

  

​

 

  

Treasury notes

​

 

6,559

​

 

6,559

​

 

—

​

 

—

Federal agencies

​

 

235,040

​

 

—

​

 

235,040

​

 

—

Municipals

​

 

6,025

​

 

—

​

 

6,025

​

 

—

Mortgage-backed - Government-sponsored entity (GSE) - residential

​

 

22,178

​

 

—

​

 

22,178

​

 

—

Loans held for sale

​

 

40,044

​

 

—

​

 

40,044

​

 

—

Mortgage servicing rights

​

 

82,604

​

 

—

​

 

—

​

 

82,604

Derivative assets - interest rate lock commitments

​

 

6,131

​

 

—

​

 

—

​

 

6,131

Derivative asset - interest rate swap

​

​

3,170

​

​

—

​

​

3,170

​

​

—

Derivative liabilities - forward contracts

​

 

2,682

​

​

—

​

​

2,682

​

​

—

Derivative liabilities - interest rate swap

​

 

3,170

​

​

—

​

​

3,170

​

​

—
Schedule of Level 3 reconciliation of recurring fair value measurements

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 

​

Six Months Ended June 30, 

​

    

2021

    

2020

    

2021

    

2020

​

​

(In thousands)

​

(In thousands)

Mortgage servicing rights

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

96,215

​

$

69,978

​

$

82,604

​

$

74,387

Additions

​

 

  

​

 

  

​

 

  

​

 

  

Originated and purchased servicing

​

 

6,527

​

 

4,015

​

 

16,708

​

 

7,944

Subtractions

​

 

  

​

 

  

​

 

  

​

 

  

Paydowns

​

 

(4,627)

​

 

(604)

​

 

(8,075)

​

 

(2,462)

Sales of servicing

​

​

(438)

​

​

​

​

​

(438)

​

​

​

Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model

​

 

654

​

 

(500)

​

 

7,532

​

 

(6,980)

Balance, end of period

​

$

98,331

​

$

72,889

​

$

98,331

​

$

72,889

​

​

​

​

​

​

​

​

​

​

​

​

​

Derivative Assets - interest rate lock commitments

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

467

​

$

2,079

​

$

6,131

​

$

186

Changes in fair value

​

 

20

​

 

3,663

​

 

(5,644)

​

 

5,556

Balance, end of period

​

$

487

​

$

5,742

​

$

487

​

$

5,742

​

​

​

​

​

​

​

​

​

​

​

​

​

Derivative Liabilities - interest rate lock commitments

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

1,080

​

$

80

​

$

—

​

$

—

Changes in fair value

​

 

(1,026)

​

 

(80)

​

 

54

​

 

—

Balance, end of period

​

$

54

​

$

—

​

$

54

​

$

—
Schedule of fair value measurement of assets and liabilities measured at fair value on nonrecurring basis

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurements Using

​

​

​

​

​

Quoted Prices in

​

Significant

​

 

​

​

​

​

​

​

Active Markets 

​

Other

​

Significant

​

​

​

​

​

for Identical

​

Observable

​

Unobservable 

​

​

Fair

​

Assets

​

Inputs

​

Inputs

Assets

    

Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

​

​

(In thousands)

June 30, 2021

​

 

  

​

 

  

​

 

  

​

 

  

Impaired loans (collateral-dependent)

​

$

3,807

​

$

—

​

$

—

​

$

3,807

December 31, 2020

​

 

  

​

 

  

​

 

  

​

 

  

Impaired loans (collateral-dependent)

​

$

4,059

​

$

—

​

$

—

​

$

4,059
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 June 30, 2021:

 

​

  

 

  

​

​

​

​

 

​

Collateral-dependent impaired loans

​

$

3,807

 

Market comparable properties

 

Marketability discount

​

49%

 

49%

Mortgage servicing rights - Multi-family

​

$

78,097

 

Discounted cash flow

 

Discount rate

​

8% - 13%

 

9%

​

​

​

​

​

​

​

Constant prepayment rate

​

0% - 43%

 

3%

Mortgage servicing rights - Single-family

​

$

20,234

 

Discounted cash flow

 

Mortgage yield

​

9% - 10%

​

9%

​

​

​

​

​

​

​

Constant prepayment rate

​

11% - 14%

​

12%

Derivative assets - interest rate lock commitments

​

$

487

 

Discounted cash flow

 

Loan closing rates

​

63% - 99%

 

82%

Derivative liabilities - interest rate lock commitments

​

$

54

 

Discounted cash flow

 

Loan closing rates

​

63% - 99%

 

82%

​

​

​

​

​

​

​

​

​

​

​

​

At December 31, 2020:

​

 

  

 

  

​

​

​

​

 

​

Collateral-dependent impaired loans

​

$

4,059

 

Market comparable properties

 

Marketability discount

​

43%

 

43%

Mortgage servicing rights - Multi-family

​

$

73,569

 

Discounted cash flow

 

Discount rate

​

8% - 13%

 

9%

​

​

​

​

​

​

​

Constant prepayment rate

​

2% - 43%

 

4%

Mortgage servicing rights - Single-family

​

$

9,035

 

Discounted cash flow

 

Discount rate

​

11%

​

11%

​

​

​

​

​

​

​

Constant prepayment rate

​

8% - 35%

​

16%

Derivative assets - interest rate lock commitments

​

$

6,131

 

Discounted cash flow

 

Loan closing rates

​

55% - 99%

 

75%
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)

June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial assets:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Cash and cash equivalents

​

$

402,049

​

$

402,049

​

$

402,049

​

$

—

​

$

—

Securities purchased under agreements to resell

​

 

6,507

​

 

6,507

​

 

—

​

 

6,507

​

 

—

FHLB stock

​

 

70,767

​

 

70,767

​

 

—

​

 

70,767

​

 

—

Loans held for sale

​

 

2,928,767

​

 

2,928,767

​

 

—

​

 

2,928,767

​

 

—

Loans, net

​

 

5,444,227

​

 

5,399,967

​

 

—

​

 

—

​

 

5,399,967

Interest receivable

​

 

22,068

​

 

22,068

​

 

—

​

 

22,068

​

 

—

Financial liabilities:

​

 

  

​

 

​

​

 

  

​

 

  

​

 

  

Deposits

​

 

8,039,578

​

 

8,041,139

​

 

7,508,693

​

 

532,446

​

 

—

Short-term subordinated debt

​

 

14,960

​

 

14,960

​

 

—

​

 

14,960

​

 

—

FHLB advances

​

 

607,003

​

 

607,124

​

 

—

​

 

607,124

​

 

—

Other borrowing

​

​

79,410

​

​

79,410

​

​

—

​

​

79,410

​

​

—

Interest payable

​

 

2,471

​

 

2,471

​

 

—

​

 

2,471

​

 

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2020

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Financial assets:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Cash and cash equivalents

​

$

179,728

​

$

179,728

​

$

179,728

​

$

—

​

$

—

Securities purchased under agreements to resell

​

 

6,580

​

 

6,580

​

 

—

​

 

6,580

​

 

—

FHLB stock

​

 

70,656

​

 

70,656

​

 

—

​

 

70,656

​

 

—

Loans held for sale

​

 

3,030,110

​

 

3,030,110

​

 

—

​

 

3,030,110

​

 

—

Loans, net

​

 

5,507,926

​

 

5,484,824

​

 

—

​

 

—

​

 

5,484,824

Interest receivable

​

 

21,770

​

 

21,770

​

 

—

​

 

21,770

​

 

—

Financial liabilities:

​

 

  

​

 

​

​

 

  

​

 

  

​

 

  

Deposits

​

 

7,408,066

​

 

7,410,759

​

 

7,051,413

​

 

359,346

​

 

—

Short-term subordinated debt

​

 

14,960

​

 

14,960

​

 

—

​

 

14,960

​

 

—

FHLB advances

​

 

1,221,071

​

 

1,221,870

​

 

—

​

 

1,221,870

​

 

—

Federal Reserve discount window/PPPLF advances

​

​

112,225

​

​

112,225

​

​

—

​

​

112,225

​

​

—

Interest payable

​

 

1,476

​

 

1,476

​

 

—

​

 

1,476

​

 

—
v3.21.2
Earnings Per Share (Tables)
 6 Months Ended
Jun. 30, 2021
Earnings Per Share  
Schedule of computation of earnings per share

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Month Periods Ended June 30, 

​

​

2021

​

2020

​

​

​

​

​

Weighted-

​

Per 

​

​

​

​

Weighted-

​

Per 

​

​

Net

​

Average

​

Share

​

Net

​

Average

​

Share

​

    

Income

    

Shares

    

Amount

    

Income

    

Shares

    

Amount

​

​

(In thousands)

​

​

​

​

​

​

(In thousands)

​

​

​

​

​

Net income

​

$

51,417

 

  

 

​

  

​

$

41,162

 

  

 

​

  

Dividends on preferred stock

​

 

(5,659)

 

  

 

​

  

​

 

(3,619)

 

  

 

​

  

Net income allocated to common shareholders

​

$

45,758

 

  

 

​

  

​

$

37,543

 

  

 

​

  

Basic earnings per share

​

 

  

 

28,782,813

​

$

1.59

​

 

  

 

28,743,894

​

$

1.31

Effect of dilutive securities-restricted stock awards

​

 

  

 

91,512

​

 

  

​

 

  

 

18,455

​

 

  

Diluted earnings per share

​

 

  

 

28,874,325

​

$

1.58

​

 

  

 

28,762,349

​

$

1.31

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Month Periods Ended June 30, 

​

​

2021

​

2020

 

​

​

​

​

​

​

Weighted-

​

Per 

​

​

​

​

Weighted-

​

Per 

​

​

Net

​

Average

​

Share

​

Net

​

Average

​

Share

​

    

Income

    

Shares

    

Amount

    

Income

    

Shares

    

Amount

​

​

(In thousands)

​

​

​

​

​

​

(In thousands)

​

​

​

 

​

Net income

​

$

113,400

 

  

 

​

  

​

$

65,745

 

  

 

​

  

Dividends on preferred stock

​

 

(9,416)

 

  

 

​

  

​

 

(7,237)

 

  

 

​

  

Net income allocated to common shareholders

​

$

103,984

 

  

 

​

  

​

$

58,508

 

  

 

​

  

Basic earnings per share

​

 

  

 

28,777,482

​

$

3.61

​

 

  

 

28,739,263

​

$

2.04

Effect of dilutive securities-restricted stock awards

​

 

  

 

84,917

​

 

  

​

 

  

 

21,617

​

 

  

Diluted earnings per share

​

 

  

 

28,862,399

​

$

3.60

​

 

  

 

28,760,880

​

$

2.03
v3.21.2
Segment Information (Tables)
 6 Months Ended
Jun. 30, 2021
Segment Information  
Schedule of business segment financial information

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Multi-family

​

​

​

​

​

​

​

​

​

​

    

 

​

​

Mortgage 

​

Mortgage

​

​

​

​

​

​

​

​

 

​

    

Banking

    

Warehousing

    

Banking

    

Other

    

Total

​

​

(In thousands)

Three Months Ended June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

204

​

$

29,935

​

$

40,983

​

$

1,316

 

$

72,438

Interest expense

​

 

—

​

 

1,599

​

 

7,216

​

 

(784)

 

 

8,031

Net interest income

​

 

204

​

 

28,336

​

 

33,767

​

 

2,100

 

 

64,407

Provision for loan losses

​

 

—

​

 

(40)

​

 

(275)

​

 

—

 

 

(315)

Net interest income after provision for loan losses

​

 

204

​

 

28,376

​

 

34,042

​

 

2,100

 

 

64,722

Noninterest income

​

 

28,572

​

 

3,079

​

 

2,613

​

 

(1,409)

 

 

32,855

Noninterest expense

​

 

13,626

​

 

2,703

​

 

7,496

​

 

4,358

 

 

28,183

Income before income taxes

​

 

15,150

​

 

28,752

​

 

29,159

​

 

(3,667)

 

 

69,394

Income taxes

​

 

4,179

​

 

7,304

​

 

7,418

​

 

(924)

 

 

17,977

Net income (loss)

​

$

10,971

​

$

21,448

​

$

21,741

​

$

(2,743)

 

$

51,417

Total assets

​

$

238,165

​

$

4,265,162

​

$

5,328,684

​

$

49,521

 

$

9,881,532

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Multi-family

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Mortgage 

​

Mortgage

​

​

​

​

​

​

​

​

 

​

    

Banking

    

Warehousing

    

Banking

    

Other

    

Total

​

​

(In thousands)

Three Months Ended June 30, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

260

​

$

42,044

​

$

25,683

​

$

217

 

$

68,204

Interest expense

​

 

—

​

 

7,786

​

 

10,377

​

 

(1,193)

 

 

16,970

Net interest income

​

 

260

​

 

34,258

​

 

15,306

​

 

1,410

 

 

51,234

Provision for loan losses

​

 

—

​

 

(800)

​

 

2,545

​

 

—

 

 

1,745

Net interest income after provision for loan losses

​

 

260

​

 

35,058

​

 

12,761

​

 

1,410

 

 

49,489

Noninterest income

​

 

12,325

​

 

5,626

​

 

9,179

​

 

(942)

 

 

26,188

Noninterest expense

​

 

7,468

​

 

3,521

​

 

6,097

​

 

3,196

 

 

20,282

Income before income taxes

​

 

5,117

​

 

37,163

​

 

15,843

​

 

(2,728)

 

 

55,395

Income taxes

​

 

1,466

​

 

9,451

​

 

4,031

​

 

(715)

 

 

14,233

Net income (loss)

​

$

3,651

​

$

27,712

​

$

11,812

​

$

(2,013)

 

$

41,162

Total assets

​

$

182,072

​

$

5,575,169

​

$

3,639,638

​

$

42,521

 

$

9,439,400

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Multi-family

​

​

​

​

​

​

​

​

​

​

    

 

​

​

Mortgage 

​

Mortgage

​

​

​

​

​

​

​

​

 

​

    

Banking

    

Warehousing

    

Banking

    

Other

    

Total

​

​

(In thousands)

Six Months Ended June 30, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

411

​

$

68,522

​

$

80,523

​

$

2,531

 

$

151,987

Interest expense

​

 

—

​

 

3,323

​

 

13,655

​

 

(1,361)

 

 

15,617

Net interest income

​

 

411

​

 

65,199

​

 

66,868

​

 

3,892

 

 

136,370

Provision for loan losses

​

 

—

​

 

(1,124)

​

 

2,472

​

 

—

 

 

1,348

Net interest income after provision for loan losses

​

 

411

​

 

66,323

​

 

64,396

​

 

3,892

 

 

135,022

Noninterest income

​

 

61,806

​

 

7,196

​

 

10,291

​

 

(2,502)

 

 

76,791

Noninterest expense

​

 

30,070

​

 

5,599

​

 

14,621

​

 

7,977

 

 

58,267

Income before income taxes

​

 

32,147

​

 

67,920

​

 

60,066

​

 

(6,587)

 

 

153,546

Income taxes

​

 

9,215

​

 

17,289

​

 

15,300

​

 

(1,658)

 

 

40,146

Net income

​

$

22,932

​

$

50,631

​

$

44,766

​

$

(4,929)

 

$

113,400

Total assets

​

$

238,165

​

$

4,265,162

​

$

5,328,684

​

$

49,521

 

$

9,881,532

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Multi-family

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Mortgage 

​

Mortgage

​

​

​

​

​

​

​

​

 

​

    

Banking

    

Warehousing

    

Banking

    

Other

    

​

Total

​

​

(In thousands)

Six Months Ended June 30, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

680

​

$

72,143

​

$

54,913

​

$

885

 

$

128,621

Interest expense

​

 

—

​

 

19,871

​

 

22,184

​

 

(3,021)

 

 

39,034

Net interest income

​

 

680

​

 

52,272

​

 

32,729

​

 

3,906

 

 

89,587

Provision for loan losses

​

 

—

​

 

380

​

 

4,363

​

 

—

 

 

4,743

Net interest income after provision for loan losses

​

 

680

​

 

51,892

​

 

28,366

​

 

3,906

 

 

84,844

Noninterest income

​

 

29,689

​

 

8,402

​

 

9,862

​

 

(1,863)

 

 

46,090

Noninterest expense

​

 

17,816

​

 

6,540

​

 

11,785

​

 

6,434

 

 

42,575

Income before income taxes

​

 

12,553

​

 

53,754

​

 

26,443

​

 

(4,391)

 

 

88,359

Income taxes

​

 

3,503

​

 

13,605

​

 

6,681

​

 

(1,175)

 

 

22,614

Net income

​

$

9,050

​

$

40,149

​

$

19,762

​

$

(3,216)

 

$

65,745

Total assets

​

$

182,072

​

$

5,575,169

​

$

3,639,638

​

$

42,521

 

$

9,439,400
v3.21.2
Basis of Presentation - Principles of Consolidation (Details) - USD ($)
Feb. 01, 2021
Jun. 30, 2021
Net assets deconsolidated $ 10,000,000  
Loans receivable deconsolidated 66,600,000  
Borrowings deconsolidated 52,700,000  
Gain or loss on deconsolidation 0  
Maximum loss exposure   $ 10,000,000.0
Other assets, net    
Fair value of continuing investments after deconsolidation $ 10,000,000  
v3.21.2
Securities Available For Sale - Amortized Cost to Approximate Fair Value (Details) - USD ($)
$ in Thousands
 6 Months Ended
May 07, 2021
Jun. 30, 2021
Jun. 30, 2020
Dec. 31, 2020
Available-for-sale securities:        
Amortized Cost   $ 315,289   $ 269,323
Gross Unrealized Gains   386   496
Gross Unrealized Losses   415   17
Fair Value of available for sale securities   315,260   269,802
Purchases of available for sale securities   130,204 $ 360,029  
Treasury notes        
Available-for-sale securities:        
Amortized Cost   5,013   6,535
Gross Unrealized Gains   10   24
Gross Unrealized Losses   3    
Fair Value of available for sale securities   5,020   6,559
Federal agencies        
Available-for-sale securities:        
Amortized Cost   254,962   234,954
Gross Unrealized Gains   13   103
Gross Unrealized Losses   412   17
Fair Value of available for sale securities   254,563   235,040
Municipals        
Available-for-sale securities:        
Amortized Cost   5,931   5,935
Gross Unrealized Gains   107   90
Fair Value of available for sale securities   6,038   6,025
Mortgage-backed - Government-sponsored entity (GSE) - residential        
Available-for-sale securities:        
Amortized Cost   49,383   21,899
Gross Unrealized Gains   256   279
Fair Value of available for sale securities   49,639   $ 22,178
Mortgage-backed Securities, Purchased from Freddie Mac | Loan Sale and Freddie Mac Q Series Securitization        
Available-for-sale securities:        
Fair Value of available for sale securities   $ 28,400    
Purchases of available for sale securities $ 28,700      
v3.21.2
Securities Available For Sale - Contractual Maturities (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Dec. 31, 2020
Contractual Maturities, Amortized Cost    
Within one year $ 7,066 $ 6,288
After one through five years 257,982 239,770
After five through ten years 513 515
After ten years 345 851
Amortized Costs, Gross 265,906 247,424
Amortized Costs, Net 315,289 269,323
Contractual Maturities, Fair Value    
Within one year 7,069 6,302
After one through five years 257,620 239,877
After five through ten years 553 549
After ten years 379 896
Fair Value, Gross 265,621 247,624
Available-for-sale Securities, Debt Securities, Total 315,260 269,802
Mortgage-backed - Government-sponsored entity (GSE) - residential    
Contractual Maturities, Amortized Cost    
Amortized Costs, Mortgage-backed - Government-sponsored entity (GSE) - residential 49,383 21,899
Amortized Costs, Net 49,383 21,899
Contractual Maturities, Fair Value    
Fair Value, Mortgage-backed - Government-sponsored entity (GSE) - residential 49,639 22,178
Available-for-sale Securities, Debt Securities, Total $ 49,639 $ 22,178
v3.21.2
Securities Available For Sale - Sale of securities (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Securities Available For Sale        
Proceeds from the sale of available for sale securities $ 34,500 $ 0 $ 34,469 $ 0
Gain loss recognized $ 0   $ 0  
v3.21.2
Securities Available For Sale - Continuous Unrealized Loss Position (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Dec. 31, 2020
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value    
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months $ 181,549  
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total 181,549  
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 415  
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total 415  
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 1,996  
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total 1,996  
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 3  
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total 3  
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 179,553 $ 69,939
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total 179,553 69,939
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 412 17
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total $ 412 $ 17
v3.21.2
Mortgage Loans in Process of Securitization (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Mortgage Loans in Process of Securitization    
Unrealized gains included in mortgage loans $ 7.0 $ 3.6
v3.21.2
Loans and Allowance for Loan Losses - Narrative (Details)
 6 Months Ended
May 07, 2021
USD ($)
security
Jun. 30, 2021
USD ($)
Jun. 30, 2020
USD ($)
Dec. 31, 2020
USD ($)
Loans and Leases Receivable Disclosure [Line Items]        
Proceeds from sale of loans receivable   $ 262,086,000    
Purchases of available for sale securities   130,204,000 $ 360,029,000  
Mortgage servicing rights   $ 98,331,000   $ 82,604,000
Loan Sale and Freddie Mac Q Series Securitization        
Loans and Leases Receivable Disclosure [Line Items]        
Net loss on sale of loans $ 676,000      
First loss position in loan portfolio, maximum securitization pool, percentage 10.00%      
First loss position in loan portfolio, maximum securitization pool, amount $ 26,200,000      
First loss position in loan portfolio, reserves for losses 1,400,000      
Mortgage servicing rights $ 730,000      
Loan Sale and Freddie Mac Q Series Securitization | Mortgage-backed Securities, Purchased from Freddie Mac        
Loans and Leases Receivable Disclosure [Line Items]        
Number of securities purchased | security 2      
Purchases of available for sale securities $ 28,700,000      
Multi-family and healthcare financing | Loan Sale and Freddie Mac Q Series Securitization        
Loans and Leases Receivable Disclosure [Line Items]        
Proceeds from sale of loans receivable $ 262,000,000.0      
v3.21.2
Loans and Allowance for Loan Losses - Allowance For Loan Losses (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Dec. 31, 2020
Allowance for loan losses          
Balance, beginning of period $ 29,091 $ 18,883 $ 27,500 $ 15,842  
Provision (credit) for loan losses (315) 1,745 1,348 4,743  
Loans charged to the allowance (86) (131) (160) (132)  
Recoveries of loans previously charged off 6   8 44  
Balance, end of period 28,696 20,497 28,696 20,497  
Ending balance: individually evaluated for impairment 1,852   1,852   $ 1,613
Ending balance: collectively evaluated for impairment 26,844   26,844   25,887
Loans          
Ending balance 5,472,923   5,472,923   5,535,426
Ending balance individually evaluated for impairment 7,385   7,385   14,464
Ending balance: collectively evaluated for impairment 5,465,538   5,465,538   5,520,962
Mortgage warehouse lines of credit          
Allowance for loan losses          
Balance, beginning of period 3,321 2,709 4,018 1,913  
Provision (credit) for loan losses (386) 494 (1,083) 1,290  
Balance, end of period 2,935 3,203 2,935 3,203  
Ending balance: collectively evaluated for impairment 2,935   2,935   4,018
Loans          
Ending balance 1,177,940   1,177,940   1,605,745
Ending balance: collectively evaluated for impairment 1,177,940   1,177,940   1,605,745
Residential real estate          
Allowance for loan losses          
Balance, beginning of period 3,600 2,062 3,334 2,042  
Provision (credit) for loan losses 371 248 637 268  
Loans charged to the allowance (2)   (2)    
Balance, end of period 3,969 2,310 3,969 2,310  
Ending balance: individually evaluated for impairment         7
Ending balance: collectively evaluated for impairment 3,969   3,969   3,327
Loans          
Ending balance 806,325   806,325   678,848
Ending balance individually evaluated for impairment 629   629   2,761
Ending balance: collectively evaluated for impairment 805,696   805,696   676,087
Multi-family and healthcare financing          
Allowance for loan losses          
Balance, beginning of period 17,136 7,694 14,731 7,018  
Provision (credit) for loan losses (1,354) 2,184 1,051 2,860  
Balance, end of period 15,782 9,878 15,782 9,878  
Ending balance: collectively evaluated for impairment 15,782   15,782   14,731
Loans          
Ending balance 2,970,770   2,970,770   2,749,020
Ending balance: collectively evaluated for impairment 2,970,770   2,970,770   2,749,020
Commercial and commercial real estate          
Allowance for loan losses          
Balance, beginning of period 4,264 5,662 4,641 4,173  
Provision (credit) for loan losses 1,059 (1,188) 750 257  
Loans charged to the allowance (84) (131) (152) (131)  
Recoveries of loans previously charged off       44  
Balance, end of period 5,239 4,343 5,239 4,343  
Ending balance: individually evaluated for impairment 1,852   1,852   1,606
Ending balance: collectively evaluated for impairment 3,387   3,387   3,035
Loans          
Ending balance 409,710   409,710   387,294
Ending balance individually evaluated for impairment 6,592   6,592   9,591
Ending balance: collectively evaluated for impairment 403,118   403,118   377,703
Agricultural production and real estate          
Allowance for loan losses          
Balance, beginning of period 632 561 636 523  
Provision (credit) for loan losses (21) 49 (25) 87  
Balance, end of period 611 610 611 610  
Ending balance: collectively evaluated for impairment 611   611   636
Loans          
Ending balance 92,786   92,786   101,268
Ending balance individually evaluated for impairment 158   158   2,100
Ending balance: collectively evaluated for impairment 92,628   92,628   99,168
Consumer and margin loans          
Allowance for loan losses          
Balance, beginning of period 138 195 140 173  
Provision (credit) for loan losses 16 (42) 18 (19)  
Loans charged to the allowance     (6) (1)  
Recoveries of loans previously charged off 6   8    
Balance, end of period 160 $ 153 160 $ 153  
Ending balance: collectively evaluated for impairment 160   160   140
Loans          
Ending balance 15,392   15,392   13,251
Ending balance individually evaluated for impairment 6   6   12
Ending balance: collectively evaluated for impairment $ 15,386   $ 15,386   $ 13,239
v3.21.2
Loans and Allowance for Loan Losses - Credit Risk Profile of Loan Portfolio (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Dec. 31, 2020
Credit risk profile of portfolio    
Loans $ 5,472,923 $ 5,535,426
Special Mention (Watch)    
Credit risk profile of portfolio    
Loans 149,006 152,939
Substandard    
Credit risk profile of portfolio    
Loans 7,385 14,464
Acceptable and Above    
Credit risk profile of portfolio    
Loans 5,316,322 5,367,345
Covid 19 | Special Mention (Watch)    
Credit risk profile of portfolio    
Loans 210 678
Mortgage warehouse lines of credit    
Credit risk profile of portfolio    
Loans 1,177,940 1,605,745
Mortgage warehouse lines of credit | Special Mention (Watch)    
Credit risk profile of portfolio    
Loans   222
Mortgage warehouse lines of credit | Acceptable and Above    
Credit risk profile of portfolio    
Loans 1,177,940 1,605,523
Residential real estate    
Credit risk profile of portfolio    
Loans 806,325 678,848
Residential real estate | Special Mention (Watch)    
Credit risk profile of portfolio    
Loans 821 853
Residential real estate | Substandard    
Credit risk profile of portfolio    
Loans 629 2,761
Residential real estate | Acceptable and Above    
Credit risk profile of portfolio    
Loans 804,850 674,851
Residential real estate | Covid 19 | Special Mention (Watch)    
Credit risk profile of portfolio    
Loans 25 383
Multi-family and healthcare financing    
Credit risk profile of portfolio    
Loans 2,970,770 2,749,020
Multi-family and healthcare financing | Special Mention (Watch)    
Credit risk profile of portfolio    
Loans 143,906 145,050
Multi-family and healthcare financing | Acceptable and Above    
Credit risk profile of portfolio    
Loans 2,826,679 2,603,785
Multi-family and healthcare financing | Covid 19 | Special Mention (Watch)    
Credit risk profile of portfolio    
Loans 185 185
Commercial and commercial real estate    
Credit risk profile of portfolio    
Loans 409,710 387,294
Commercial and commercial real estate | Special Mention (Watch)    
Credit risk profile of portfolio    
Loans 2,342 2,620
Commercial and commercial real estate | Substandard    
Credit risk profile of portfolio    
Loans 6,592 9,591
Commercial and commercial real estate | Acceptable and Above    
Credit risk profile of portfolio    
Loans 400,776 374,973
Commercial and commercial real estate | Covid 19 | Special Mention (Watch)    
Credit risk profile of portfolio    
Loans   110
Agricultural production and real estate    
Credit risk profile of portfolio    
Loans 92,786 101,268
Agricultural production and real estate | Special Mention (Watch)    
Credit risk profile of portfolio    
Loans 1,932 4,160
Agricultural production and real estate | Substandard    
Credit risk profile of portfolio    
Loans 158 2,100
Agricultural production and real estate | Acceptable and Above    
Credit risk profile of portfolio    
Loans 90,696 95,008
Consumer and margin loans    
Credit risk profile of portfolio    
Loans 15,392 13,251
Consumer and margin loans | Special Mention (Watch)    
Credit risk profile of portfolio    
Loans 5 34
Consumer and margin loans | Substandard    
Credit risk profile of portfolio    
Loans 6 12
Consumer and margin loans | Acceptable and Above    
Credit risk profile of portfolio    
Loans $ 15,381 $ 13,205
v3.21.2
Loans and Allowance for Loan Losses - Aging Analysis Of The Recorded Investment In Loans (Details)
$ in Thousands
Jun. 30, 2021
USD ($)
loan
Dec. 31, 2020
USD ($)
Aging analysis of loan portfolio    
Past due loans $ 3,293 $ 47,829
Current loans 5,469,630 5,487,597
Loans and Leases Receivable, Net of Deferred Income, Total $ 5,472,923 5,535,426
Number of loans modified in accordance with CARES Act | loan 4  
Amount of outstanding loans modified in accordance with CARES Act $ 37,000  
Loans modified in accordance with CARES Act, payments due 0  
30-59 Days Past Due    
Aging analysis of loan portfolio    
Past due loans 565 4,748
60-89 Days Past Due    
Aging analysis of loan portfolio    
Past due loans 246 36,916
Greater Than 90 Days    
Aging analysis of loan portfolio    
Past due loans 2,482 6,165
Mortgage warehouse lines of credit    
Aging analysis of loan portfolio    
Current loans 1,177,940 1,605,745
Loans and Leases Receivable, Net of Deferred Income, Total 1,177,940 1,605,745
Residential real estate    
Aging analysis of loan portfolio    
Past due loans   1,074
Current loans 806,325 677,774
Loans and Leases Receivable, Net of Deferred Income, Total 806,325 678,848
Residential real estate | 30-59 Days Past Due    
Aging analysis of loan portfolio    
Past due loans   364
Residential real estate | 60-89 Days Past Due    
Aging analysis of loan portfolio    
Past due loans   80
Residential real estate | Greater Than 90 Days    
Aging analysis of loan portfolio    
Past due loans   630
Multi-family and healthcare financing    
Aging analysis of loan portfolio    
Past due loans 505 36,760
Current loans 2,970,265 2,712,260
Loans and Leases Receivable, Net of Deferred Income, Total 2,970,770 2,749,020
Multi-family and healthcare financing | 30-59 Days Past Due    
Aging analysis of loan portfolio    
Past due loans 151  
Multi-family and healthcare financing | 60-89 Days Past Due    
Aging analysis of loan portfolio    
Past due loans 157 36,760
Multi-family and healthcare financing | Greater Than 90 Days    
Aging analysis of loan portfolio    
Past due loans 197  
Commercial and commercial real estate    
Aging analysis of loan portfolio    
Past due loans 2,329 4,266
Current loans 407,381 383,028
Loans and Leases Receivable, Net of Deferred Income, Total 409,710 387,294
Commercial and commercial real estate | 30-59 Days Past Due    
Aging analysis of loan portfolio    
Past due loans   608
Commercial and commercial real estate | 60-89 Days Past Due    
Aging analysis of loan portfolio    
Past due loans 50 76
Commercial and commercial real estate | Greater Than 90 Days    
Aging analysis of loan portfolio    
Past due loans 2,279 3,582
Agricultural production and real estate    
Aging analysis of loan portfolio    
Past due loans 449 5,703
Current loans 92,337 95,565
Loans and Leases Receivable, Net of Deferred Income, Total 92,786 101,268
Agricultural production and real estate | 30-59 Days Past Due    
Aging analysis of loan portfolio    
Past due loans 410 3,769
Agricultural production and real estate | 60-89 Days Past Due    
Aging analysis of loan portfolio    
Past due loans 39  
Agricultural production and real estate | Greater Than 90 Days    
Aging analysis of loan portfolio    
Past due loans   1,934
Consumer and margin loans    
Aging analysis of loan portfolio    
Past due loans 10 26
Current loans 15,382 13,225
Loans and Leases Receivable, Net of Deferred Income, Total 15,392 13,251
Consumer and margin loans | 30-59 Days Past Due    
Aging analysis of loan portfolio    
Past due loans 4 7
Consumer and margin loans | Greater Than 90 Days    
Aging analysis of loan portfolio    
Past due loans $ 6 $ 19
v3.21.2
Loans and Allowance for Loan Losses - Impaired Loans and Specific Valuation Allowance (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Dec. 31, 2020
Impaired loans without a specific allowance:    
Recorded investment $ 1,726 $ 8,130
Unpaid principal balance 1,726 8,130
Impaired loans with a specific allowance:    
Recorded investment 5,659 6,334
Unpaid principal balance 5,659 6,334
Specific allowance 1,852 1,613
Total impaired loans:    
Recorded investments 7,385 14,464
Unpaid principal balance 7,385 14,464
Specific allowance 1,852 1,613
Residential real estate    
Impaired loans without a specific allowance:    
Recorded investment 629 2,704
Unpaid principal balance 629 2,704
Impaired loans with a specific allowance:    
Recorded investment   57
Unpaid principal balance   57
Specific allowance   7
Total impaired loans:    
Recorded investments 629 2,761
Unpaid principal balance 629 2,761
Specific allowance   7
Commercial and commercial real estate    
Impaired loans without a specific allowance:    
Recorded investment 933 3,319
Unpaid principal balance 933 3,319
Impaired loans with a specific allowance:    
Recorded investment 5,659 6,272
Unpaid principal balance 5,659 6,272
Specific allowance 1,852 1,606
Total impaired loans:    
Recorded investments 6,592 9,591
Unpaid principal balance 6,592 9,591
Specific allowance 1,852 1,606
Agricultural production and real estate    
Impaired loans without a specific allowance:    
Recorded investment 158 2,100
Unpaid principal balance 158 2,100
Total impaired loans:    
Recorded investments 158 2,100
Unpaid principal balance 158 2,100
Consumer and margin loans    
Impaired loans without a specific allowance:    
Recorded investment 6 7
Unpaid principal balance 6 7
Impaired loans with a specific allowance:    
Recorded investment   5
Unpaid principal balance   5
Total impaired loans:    
Recorded investments 6 12
Unpaid principal balance $ 6 $ 12
v3.21.2
Loans and Allowance for Loan Losses - Average Recorded Investment and Interest Income Recognized (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Impaired Loans        
Average recorded investment in impaired loans $ 8,495 $ 14,425 $ 10,703 $ 13,516
Interest income recognized 71   286 251
Interest income recognized   113    
Mortgage warehouse lines of credit        
Impaired Loans        
Average recorded investment in impaired loans   171   197
Residential real estate        
Impaired Loans        
Average recorded investment in impaired loans 2,201 2,916 2,442 2,875
Interest income recognized 16   27 35
Interest income recognized   19    
Commercial and commercial real estate        
Impaired Loans        
Average recorded investment in impaired loans 6,113 9,229 7,254 9,231
Interest income recognized 55   259 215
Interest income recognized   94    
Agricultural production and real estate        
Impaired Loans        
Average recorded investment in impaired loans 175 2,092 1,000 1,195
Consumer and margin loans        
Impaired Loans        
Average recorded investment in impaired loans $ 6 $ 17 $ 7 18
Interest income recognized       $ 1
v3.21.2
Loans and Allowance for Loan Losses - Non Accrual Loans and Loans Past Due 90 Days Or More and Still Accruing (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Dec. 31, 2020
Loan portfolio past due loans    
Nonaccrual $ 2,600 $ 2,823
Total Loans Greater than 90 Days & Accruing 399 3,498
Residential real estate    
Loan portfolio past due loans    
Nonaccrual 556 578
Total Loans Greater than 90 Days & Accruing   69
Commercial and commercial real estate    
Loan portfolio past due loans    
Nonaccrual 1,880 2,052
Total Loans Greater than 90 Days & Accruing 399 1,240
Agricultural production and real estate    
Loan portfolio past due loans    
Nonaccrual 158 181
Total Loans Greater than 90 Days & Accruing   2,181
Consumer and margin loans    
Loan portfolio past due loans    
Nonaccrual $ 6 12
Total Loans Greater than 90 Days & Accruing   $ 8
v3.21.2
Loans and Allowance for Loan Losses - Summary of Loans By Classification (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Mar. 31, 2021
Dec. 31, 2020
Jun. 30, 2020
Mar. 31, 2020
Dec. 31, 2019
Loans and Allowance for Loan Losses            
Loans $ 5,472,923   $ 5,535,426      
Allowance for loan losses 28,696 $ 29,091 27,500 $ 20,497 $ 18,883 $ 15,842
Loans and Leases Receivable, Net Amount, Total 5,444,227   5,507,926      
Mortgage warehouse lines of credit            
Loans and Allowance for Loan Losses            
Loans 1,177,940   1,605,745      
Allowance for loan losses 2,935 3,321 4,018 3,203 2,709 1,913
Residential real estate            
Loans and Allowance for Loan Losses            
Loans 806,325   678,848      
Allowance for loan losses 3,969 3,600 3,334 2,310 2,062 2,042
Multi-family and healthcare financing            
Loans and Allowance for Loan Losses            
Loans 2,970,770   2,749,020      
Allowance for loan losses 15,782 17,136 14,731 9,878 7,694 7,018
Commercial and commercial real estate            
Loans and Allowance for Loan Losses            
Loans 409,710   387,294      
Allowance for loan losses 5,239 4,264 4,641 4,343 5,662 4,173
Commercial and commercial real estate | Loans funded through PPP, CARES Act            
Loans and Allowance for Loan Losses            
Loans 53,600   60,200      
Agricultural production and real estate            
Loans and Allowance for Loan Losses            
Loans 92,786   101,268      
Allowance for loan losses 611 632 636 610 561 523
Consumer and margin loans            
Loans and Allowance for Loan Losses            
Loans 15,392   13,251      
Allowance for loan losses $ 160 $ 138 $ 140 $ 153 $ 195 $ 173
v3.21.2
Loans and Allowance for Loan Losses - Troubled Debt and Modifications (Details)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2021
USD ($)
loan
item
Jun. 30, 2020
loan
item
Jun. 30, 2021
USD ($)
loan
item
Jun. 30, 2020
item
loan
Troubled debt and modifications        
Number of troubled debt restructuring 0 0 0 0
Number of loans restructured defaulted | item 0 0 0 0
Amount of outstanding loans modified in accordance with CARES Act | $ $ 37.0   $ 37.0  
Residential real estate        
Troubled debt and modifications        
Number of loans in the process of foreclosure     0 0
v3.21.2
Borrowings - Other borrowings (Details) - American Financial Exchange, Extensions of Credit
$ in Millions
Jun. 30, 2021
USD ($)
Borrowings  
Maximum borrowing capacity $ 325.0
Outstanding balance $ 25.0
Fixed rate (as a percent) 0.09%
v3.21.2
Regulatory Matters (Details)
$ in Thousands
Jun. 30, 2021
USD ($)
Dec. 31, 2020
USD ($)
Company    
Tier 1 Capital (to average assets)    
Tier 1 Capital, Actual, Capital Amount $ 1,041,631 $ 792,456
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) 10.9 8.6
Tier 1 Capital, Minimum Amount To Be Well Capitalized, Capital Amount $ 810,065 $ 738,019
Company | Minimum    
Tier 1 Capital (to average assets)    
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) 8.5 8
Merchants Bank    
Tier 1 Capital (to average assets)    
Tier 1 Capital, Actual, Capital Amount $ 1,001,502 $ 781,221
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) 10.8 8.7
Tier 1 Capital, Minimum Amount To Be Well Capitalized, Capital Amount $ 786,534 $ 718,120
Merchants Bank | Minimum    
Tier 1 Capital (to average assets)    
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) 8.5 8
FMBI    
Tier 1 Capital (to average assets)    
Tier 1 Capital, Actual, Capital Amount $ 26,691 $ 24,456
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) 9.6 9.8
Tier 1 Capital, Minimum Amount To Be Well Capitalized, Capital Amount $ 23,613 $ 19,979
FMBI | Minimum    
Tier 1 Capital (to average assets)    
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) 8.5 8
v3.21.2
Derivative Financial Instruments (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Dec. 31, 2020
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income          
Net derivative gains (losses) $ (1,243) $ 1,629 $ 409 $ 1,598  
Pledged in collateral 3,900   3,900   $ 3,900
Derivative assets          
Derivative Financial Instruments          
Derivative assets, fair value 495   495   6,131
Derivative liabilities          
Derivative Financial Instruments          
Derivative liabilities, fair value 277   277   2,682
Interest Rate Lock Commitments          
Derivative Financial Instruments          
Notional amount 105,076   105,076   412,043
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income          
Net derivative gains (losses) 1,046 3,743 (5,698) 5,556  
Interest Rate Lock Commitments | Derivative assets          
Derivative Financial Instruments          
Derivative assets, fair value 487   487   6,131
Interest Rate Lock Commitments | Derivative liabilities          
Derivative Financial Instruments          
Derivative liabilities, fair value 54   54    
Forward Contracts          
Derivative Financial Instruments          
Notional amount 107,364   107,364   304,024
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income          
Net derivative gains (losses) (2,289) (2,114) 6,107 (3,958)  
Forward Contracts | Derivative assets          
Derivative Financial Instruments          
Derivative assets, fair value 8   8    
Forward Contracts | Derivative liabilities          
Derivative Financial Instruments          
Derivative liabilities, fair value 223   223   2,682
Interest rate swaps          
Derivative Financial Instruments          
Notional amount 86,387   86,387   82,726
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income          
Gross swap gains 195 634 1,081 3,337  
Gross swap losses (195) $ (634) (1,081) $ (3,337)  
Interest rate swaps | Derivative assets          
Derivative Financial Instruments          
Derivative assets, fair value 2,089   2,089   3,170
Interest rate swaps | Derivative liabilities          
Derivative Financial Instruments          
Derivative liabilities, fair value $ 2,089   $ 2,089   $ 3,170
v3.21.2
Disclosures about Fair Value of Assets and Liabilities - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Dec. 31, 2020
Disclosures about Fair Value of Assets and Liabilities    
Mortgage loans in process of securitization $ 461,914 $ 338,733
Available for sale securities 315,260 269,802
Loans held for sale 26,623 40,044
Mortgage servicing rights 98,331 82,604
Recurring    
Disclosures about Fair Value of Assets and Liabilities    
Mortgage loans in process of securitization 461,914 338,733
Loans held for sale 26,623 40,044
Mortgage servicing rights 98,331 82,604
Recurring | Interest Rate Lock Commitments    
Disclosures about Fair Value of Assets and Liabilities    
Derivative assets 487 6,131
Derivative liabilities 54  
Recurring | Forward Contracts    
Disclosures about Fair Value of Assets and Liabilities    
Derivative assets 8  
Derivative liabilities 223 2,682
Recurring | Interest rate swaps    
Disclosures about Fair Value of Assets and Liabilities    
Derivative assets 2,089 3,170
Derivative liabilities 2,089 3,170
Level 2 | Recurring    
Disclosures about Fair Value of Assets and Liabilities    
Mortgage loans in process of securitization 461,914 338,733
Loans held for sale 26,623 40,044
Level 2 | Recurring | Forward Contracts    
Disclosures about Fair Value of Assets and Liabilities    
Derivative assets 8  
Derivative liabilities 223 2,682
Level 2 | Recurring | Interest rate swaps    
Disclosures about Fair Value of Assets and Liabilities    
Derivative assets 2,089 3,170
Derivative liabilities 2,089 3,170
Level 3 | Interest Rate Lock Commitments    
Disclosures about Fair Value of Assets and Liabilities    
Derivative assets 487 6,131
Derivative liabilities 54  
Level 3 | Recurring    
Disclosures about Fair Value of Assets and Liabilities    
Mortgage servicing rights 98,331 82,604
Level 3 | Recurring | Interest Rate Lock Commitments    
Disclosures about Fair Value of Assets and Liabilities    
Derivative assets 487 6,131
Derivative liabilities 54  
Treasury notes    
Disclosures about Fair Value of Assets and Liabilities    
Available for sale securities 5,020 6,559
Treasury notes | Recurring    
Disclosures about Fair Value of Assets and Liabilities    
Available for sale securities 5,020 6,559
Treasury notes | Level 1 | Recurring    
Disclosures about Fair Value of Assets and Liabilities    
Available for sale securities 5,020 6,559
Federal agencies    
Disclosures about Fair Value of Assets and Liabilities    
Available for sale securities 254,563 235,040
Federal agencies | Recurring    
Disclosures about Fair Value of Assets and Liabilities    
Available for sale securities 254,563 235,040
Federal agencies | Level 2 | Recurring    
Disclosures about Fair Value of Assets and Liabilities    
Available for sale securities 254,563 235,040
Municipals | Recurring    
Disclosures about Fair Value of Assets and Liabilities    
Available for sale securities 6,038 6,025
Municipals | Level 2 | Recurring    
Disclosures about Fair Value of Assets and Liabilities    
Available for sale securities 6,038 6,025
Mortgage-backed - Government-sponsored entity (GSE) - residential    
Disclosures about Fair Value of Assets and Liabilities    
Available for sale securities 49,639 22,178
Mortgage-backed - Government-sponsored entity (GSE) - residential | Recurring    
Disclosures about Fair Value of Assets and Liabilities    
Available for sale securities 49,639 22,178
Mortgage-backed - Government-sponsored entity (GSE) - residential | Level 2 | Recurring    
Disclosures about Fair Value of Assets and Liabilities    
Available for sale securities $ 49,639 $ 22,178
v3.21.2
Disclosures about Fair Value of Assets and Liabilities - Reconciliation of Unobservable Inputs (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Subtractions        
Sales of servicing $ (438)   $ (438)  
Derivative liabilities | Interest Rate Lock Commitments        
Reconciliation of significant unobservable inputs, liabilities:        
Balance, beginning of period 1,080 $ 80    
Changes in fair value (1,026) (80) 54  
Balance, end of period 54   54  
Mortgage servicing rights.        
Reconciliation of significant unobservable inputs, assets:        
Balance, beginning of period 96,215 69,978 82,604 $ 74,387
Additions        
Originated and purchased servicing 6,527 4,015 16,708 7,944
Subtractions        
Paydowns (4,627) (604) (8,075) (2,462)
Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model 654 (500) 7,532 (6,980)
Balance, end of period 98,331 72,889 98,331 72,889
Derivative assets | Interest Rate Lock Commitments        
Reconciliation of significant unobservable inputs, assets:        
Balance, beginning of period 467 2,079 6,131 186
Subtractions        
Changes in fair value 20 3,663 (5,644) 5,556
Balance, end of period $ 487 $ 5,742 $ 487 $ 5,742
v3.21.2
Disclosures about Fair Value of Assets and Liabilities - Assets and Liabilities Measured at Fair Value on Nonrecurring Basis (Details) - Nonrecurring - USD ($)
$ in Thousands
Jun. 30, 2021
Dec. 31, 2020
Disclosures about Fair Value of Assets and Liabilities    
Impaired loans (collateral dependent) $ 3,807 $ 4,059
Level 3    
Disclosures about Fair Value of Assets and Liabilities    
Impaired loans (collateral dependent) $ 3,807 $ 4,059
v3.21.2
Disclosures about Fair Value of Assets and Liabilities - Quantitative Information about Unobservable Inputs (Details)
Jun. 30, 2021
USD ($)
Dec. 31, 2020
USD ($)
Quantitative information about unobservable inputs    
Mortgage servicing rights $ 98,331,000 $ 82,604,000
Level 3 | Mortgage servicing rights | Single Family    
Quantitative information about unobservable inputs    
Mortgage servicing rights $ 20,234,000 $ 9,035,000
Level 3 | Mortgage servicing rights | Single Family | Discount Rate    
Quantitative information about unobservable inputs    
Servicing asset, measurement input   0.11
Level 3 | Mortgage servicing rights | Single Family | Discount Rate | Weighted average    
Quantitative information about unobservable inputs    
Servicing asset, measurement input   0.11
Level 3 | Mortgage servicing rights | Single Family | Constant Prepayment Rate | Minimum    
Quantitative information about unobservable inputs    
Servicing asset, measurement input 0.11 0.08
Level 3 | Mortgage servicing rights | Single Family | Constant Prepayment Rate | Maximum    
Quantitative information about unobservable inputs    
Servicing asset, measurement input 0.14 0.35
Level 3 | Mortgage servicing rights | Single Family | Constant Prepayment Rate | Weighted average    
Quantitative information about unobservable inputs    
Servicing asset, measurement input 0.12  
Level 3 | Mortgage servicing rights | Single Family | Mortgage Yield | Minimum    
Quantitative information about unobservable inputs    
Servicing asset, measurement input 0.09  
Level 3 | Mortgage servicing rights | Single Family | Mortgage Yield | Maximum    
Quantitative information about unobservable inputs    
Servicing asset, measurement input 0.10  
Level 3 | Mortgage servicing rights | Single Family | Mortgage Yield | Weighted average    
Quantitative information about unobservable inputs    
Servicing asset, measurement input 0.09  
Level 3 | Mortgage servicing rights | Multi-family    
Quantitative information about unobservable inputs    
Mortgage servicing rights $ 78,097,000 $ 73,569,000
Level 3 | Mortgage servicing rights | Multi-family | Discount Rate | Minimum    
Quantitative information about unobservable inputs    
Servicing asset, measurement input 0.08 0.08
Level 3 | Mortgage servicing rights | Multi-family | Discount Rate | Maximum    
Quantitative information about unobservable inputs    
Servicing asset, measurement input 0.13 0.13
Level 3 | Mortgage servicing rights | Multi-family | Discount Rate | Weighted average    
Quantitative information about unobservable inputs    
Servicing asset, measurement input 0.09 0.09
Level 3 | Mortgage servicing rights | Multi-family | Constant Prepayment Rate | Minimum    
Quantitative information about unobservable inputs    
Servicing asset, measurement input 0 0.02
Level 3 | Mortgage servicing rights | Multi-family | Constant Prepayment Rate | Maximum    
Quantitative information about unobservable inputs    
Servicing asset, measurement input 0.43 0.43
Level 3 | Mortgage servicing rights | Multi-family | Constant Prepayment Rate | Weighted average    
Quantitative information about unobservable inputs    
Servicing asset, measurement input 0.03 0.04
Level 3 | Collateral-dependent impaired loans    
Quantitative information about unobservable inputs    
Collateral-dependent impaired loans $ 3,807,000 $ 4,059,000
Marketability discount (as a percent) 0.49 0.43
Level 3 | Collateral-dependent impaired loans | Minimum    
Quantitative information about unobservable inputs    
Marketability discount (as a percent)   0.43
Level 3 | Collateral-dependent impaired loans | Weighted average    
Quantitative information about unobservable inputs    
Marketability discount (as a percent) 0.49 0.43
Level 3 | Interest Rate Lock Commitments    
Quantitative information about unobservable inputs    
Derivative assets $ 487,000 $ 6,131,000
Derivative liabilities $ 54,000  
Level 3 | Interest Rate Lock Commitments | Measurement Input, Maturity | Minimum    
Quantitative information about unobservable inputs    
Loan closing rates (as a percent) 0.63 0.55
Loan closing rates (as a percent) 0.63  
Level 3 | Interest Rate Lock Commitments | Measurement Input, Maturity | Maximum    
Quantitative information about unobservable inputs    
Loan closing rates (as a percent) 0.99 0.99
Loan closing rates (as a percent) 0.99  
Level 3 | Interest Rate Lock Commitments | Measurement Input, Maturity | Weighted average    
Quantitative information about unobservable inputs    
Loan closing rates (as a percent) 0.82 0.75
Loan closing rates (as a percent) 0.82  
v3.21.2
Disclosures about Fair Value of Assets and Liabilities - Carrying Value and Estimated Fair Value (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Dec. 31, 2020
Financial assets:    
Loans held for sale $ 26,623 $ 40,044
Carrying Value    
Financial assets:    
Cash and cash equivalents 402,049 179,728
Securities purchased under agreements to resell 6,507 6,580
FHLB stock 70,767 70,656
Loans held for sale 2,928,767 3,030,110
Loans, net 5,444,227 5,507,926
Interest receivable 22,068 21,770
Financial liabilities:    
Deposits 8,039,578 7,408,066
Short-term subordinated debt 14,960 14,960
FHLB advances 607,003 1,221,071
Other borrowing 79,410  
Federal Reserve discount window/PPPLF advances   112,225
Interest payable 2,471 1,476
Fair Value    
Financial assets:    
Cash and cash equivalents 402,049 179,728
Securities purchased under agreements to resell 6,507 6,580
FHLB stock 70,767 70,656
Loans held for sale 2,928,767 3,030,110
Loans, net 5,399,967 5,484,824
Interest receivable 22,068 21,770
Financial liabilities:    
Deposits 8,041,139 7,410,759
Short-term subordinated debt 14,960 14,960
FHLB advances 607,124 1,221,870
Other borrowing 79,410  
Federal Reserve discount window/PPPLF advances   112,225
Interest payable 2,471 1,476
Level 1 | Fair Value    
Financial assets:    
Cash and cash equivalents 402,049 179,728
Financial liabilities:    
Deposits 7,508,693 7,051,413
Level 2 | Fair Value    
Financial assets:    
Securities purchased under agreements to resell 6,507 6,580
FHLB stock 70,767 70,656
Loans held for sale 2,928,767 3,030,110
Interest receivable 22,068 21,770
Financial liabilities:    
Deposits 532,446 359,346
Short-term subordinated debt 14,960 14,960
FHLB advances 607,124 1,221,870
Other borrowing 79,410  
Federal Reserve discount window/PPPLF advances   112,225
Interest payable 2,471 1,476
Level 3 | Fair Value    
Financial assets:    
Loans, net $ 5,399,967 $ 5,484,824
v3.21.2
Earnings Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Net Income        
Net income $ 51,417 $ 41,162 $ 113,400 $ 65,745
Dividends on preferred stock (5,659) (3,619) (9,416) (7,237)
Net Income Allocated to Common Shareholders $ 45,758 $ 37,543 $ 103,984 $ 58,508
Weighted-Average Shares        
Weighted average shares - Basic 28,782,813 28,743,894 28,777,482 28,739,263
Effect of dilutive securities-restricted stock awards 91,512 18,455 84,917 21,617
Weighted average shares - diluted 28,874,325 28,762,349 28,862,399 28,760,880
Per Share Amount        
Basic earnings per share $ 1.59 $ 1.31 $ 3.61 $ 2.04
Diluted earnings per share $ 1.58 $ 1.31 $ 3.60 $ 2.03
v3.21.2
Share-Based Payment Plans (Details) - USD ($)
 1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Jan. 31, 2021
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Dec. 31, 2018
Non executive directors            
Plan disclosures            
Shares issued   1,460 3,130 1,460 3,130  
Value of shares available for issuance for compensation related to annual fees $ 50,000         $ 10,000
2017 Plan | Restricted stock            
Plan disclosures            
Shares issued   0 0 35,056 36,046  
v3.21.2
Segment Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Dec. 31, 2020
Segment Information          
Interest income $ 72,438 $ 68,204 $ 151,987 $ 128,621  
Interest expense 8,031 16,970 15,617 39,034  
Net Interest Income 64,407 51,234 136,370 89,587  
Provision (credit) for loan losses (315) 1,745 1,348 4,743  
Net Interest Income After Provision for Loan Losses 64,722 49,489 135,022 84,844  
Noninterest income 32,855 26,188 76,791 46,090  
Noninterest expense 28,183 20,282 58,267 42,575  
Income Before Income Taxes 69,394 55,395 153,546 88,359  
Income taxes 17,977 14,233 40,146 22,614  
Net Income 51,417 41,162 113,400 65,745  
Total assets 9,881,532 9,439,400 9,881,532 9,439,400 $ 9,645,375
Other          
Segment Information          
Interest income 1,316 217 2,531 885  
Interest expense (784) (1,193) (1,361) (3,021)  
Net Interest Income 2,100 1,410 3,892 3,906  
Net Interest Income After Provision for Loan Losses 2,100 1,410 3,892 3,906  
Noninterest income (1,409) (942) (2,502) (1,863)  
Noninterest expense 4,358 3,196 7,977 6,434  
Income Before Income Taxes (3,667) (2,728) (6,587) (4,391)  
Income taxes (924) (715) (1,658) (1,175)  
Net Income (2,743) (2,013) (4,929) (3,216)  
Total assets 49,521 42,521 49,521 42,521  
Multifamily | Operating Segments          
Segment Information          
Interest income 204 260 411 680  
Net Interest Income 204 260 411 680  
Net Interest Income After Provision for Loan Losses 204 260 411 680  
Noninterest income 28,572 12,325 61,806 29,689  
Noninterest expense 13,626 7,468 30,070 17,816  
Income Before Income Taxes 15,150 5,117 32,147 12,553  
Income taxes 4,179 1,466 9,215 3,503  
Net Income 10,971 3,651 22,932 9,050  
Total assets 238,165 182,072 238,165 182,072  
Mortgage Warehousing | Operating Segments          
Segment Information          
Interest income 29,935 42,044 68,522 72,143  
Interest expense 1,599 7,786 3,323 19,871  
Net Interest Income 28,336 34,258 65,199 52,272  
Provision (credit) for loan losses (40) (800) (1,124) 380  
Net Interest Income After Provision for Loan Losses 28,376 35,058 66,323 51,892  
Noninterest income 3,079 5,626 7,196 8,402  
Noninterest expense 2,703 3,521 5,599 6,540  
Income Before Income Taxes 28,752 37,163 67,920 53,754  
Income taxes 7,304 9,451 17,289 13,605  
Net Income 21,448 27,712 50,631 40,149  
Total assets 4,265,162 5,575,169 4,265,162 5,575,169  
Banking | Operating Segments          
Segment Information          
Interest income 40,983 25,683 80,523 54,913  
Interest expense 7,216 10,377 13,655 22,184  
Net Interest Income 33,767 15,306 66,868 32,729  
Provision (credit) for loan losses (275) 2,545 2,472 4,363  
Net Interest Income After Provision for Loan Losses 34,042 12,761 64,396 28,366  
Noninterest income 2,613 9,179 10,291 9,862  
Noninterest expense 7,496 6,097 14,621 11,785  
Income Before Income Taxes 29,159 15,843 60,066 26,443  
Income taxes 7,418 4,031 15,300 6,681  
Net Income 21,741 11,812 44,766 19,762  
Total assets $ 5,328,684 $ 3,639,638 $ 5,328,684 $ 3,639,638  
v3.21.2
Preferred Stock Offerings (Details)
 3 Months Ended 6 Months Ended 12 Months Ended 24 Months Ended
May 06, 2021
USD ($)
$ / shares
shares
Apr. 15, 2021
USD ($)
shares
Mar. 23, 2021
USD ($)
$ / shares
shares
Sep. 23, 2019
USD ($)
$ / shares
shares
Aug. 19, 2019
USD ($)
$ / shares
shares
Jun. 27, 2019
USD ($)
$ / shares
shares
Apr. 12, 2019
USD ($)
shares
Mar. 28, 2019
USD ($)
$ / shares
shares
Jun. 30, 2021
USD ($)
$ / shares
shares
Jun. 30, 2020
Jun. 30, 2021
USD ($)
$ / shares
shares
Jun. 30, 2020
Dec. 31, 2020
$ / shares
Dec. 31, 2016
$ / shares
Dec. 31, 2015
$ / shares
Dec. 31, 2016
$ / shares
shares
Public Offering of Preferred Stock                                
Redemption of preferred stock                     $ 41,625,000          
Net proceeds                     $ 191,084,000          
8% Preferred Stock                                
Public Offering of Preferred Stock                                
Redemption of 8% preferred stock (in shares) | shares   41,625                            
Redemption of 8% preferred stock   $ 41,600,000                            
Preferred stock, dividend rate (as a percent)   8.00%                 8.00%   8.00%      
Preferred stock liquidation preference (in dollars per share) | $ / shares                 $ 1,000   $ 1,000   $ 1,000      
Final dividend for redemption of 8% preferred stock   $ 139,000                            
8% Preferred Stock | Private Placement                                
Public Offering of Preferred Stock                                
Shares issued (in shares) | shares                               41,625
Preferred stock, dividend rate (as a percent)                           8.00% 8.00%  
Preferred stock liquidation preference (in dollars per share) | $ / shares                           $ 1,000.00 $ 1,000.00 $ 1,000.00
7% Preferred Stock                                
Public Offering of Preferred Stock                                
Shares issued (in shares) | shares       874,000                        
Preferred stock, dividend rate (as a percent)                     7.00%   7.00%      
Preferred stock liquidation preference (in dollars per share) | $ / shares       $ 25         25   $ 25   $ 25      
Aggregate gross offering proceeds for the shares issued       $ 21,850,000                        
Brokerage fees       $ 0                        
7% 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)               7.00%                
Preferred stock liquidation preference (in dollars per share) | $ / shares               $ 25.00                
Aggregate gross offering proceeds for the shares issued               $ 50,000,000.0                
Net proceeds             $ 2,000,000.0 48,300,000                
Offering costs               $ 1,700,000                
Underwriting discounts             $ 41,000                  
7% Preferred Stock | Private Placement                                
Public Offering of Preferred Stock                                
Shares issued (in shares) | shares           874,000                    
Preferred stock, dividend rate (as a percent)           7.00%                    
Preferred stock liquidation preference (in dollars per share) | $ / shares           $ 25.00                    
Aggregate gross offering proceeds for the shares issued           $ 21,850,000                    
6% Series B Preferred Stock                                
Public Offering of Preferred Stock                                
Preferred stock, dividend rate (as a percent)                     6.00%   6.00%      
Preferred stock liquidation preference (in dollars per share) | $ / shares                 1,000   $ 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)         6.00%                      
Preferred stock liquidation preference (in dollars per share) | $ / shares         $ 1,000.00                      
Depositary share, preferred stock liquidation preference (in dollars per share) | $ / shares         $ 25.00                      
Aggregate gross offering proceeds for the shares issued         $ 125,000,000.0                      
Net proceeds         120,800,000                      
Offering costs         $ 4,200,000                      
6% Series C Preferred Stock                                
Public Offering of Preferred Stock                                
Shares issued (in shares) | shares 46,181                              
Depositary shares issued (in shares) | shares 1,847,233                              
Depositary share price (in dollars per share) | $ / shares $ 25                              
Preferred stock, dividend rate (as a percent)                     6.00%          
Preferred stock liquidation preference (in dollars per share) | $ / shares                 $ 1,000   $ 1,000          
Net proceeds $ 46,200,000                              
Offering costs $ 23,000                              
6% Series C Preferred Stock | Public Offering                                
Public Offering of Preferred Stock                                
Depositary shares issued (in shares) | shares     6,000,000                          
Depositary shares equivalent preferred stock interest per share     0.025                          
Preferred stock, dividend rate (as a percent)     6.00%                          
Preferred stock liquidation preference (in dollars per share) | $ / shares     $ 1,000.00                          
Depositary share, preferred stock liquidation preference (in dollars per share) | $ / shares     $ 25.00                          
Net proceeds     $ 144,900,000                          
Offering costs     150,000,000.0                          
Underwriting discounts     $ 5,100,000                          
Preferred Stock | 8% Preferred Stock                                
Public Offering of Preferred Stock                                
Redemption of 8% preferred stock (in shares) | shares                 (41,625)   (41,625)          
Redemption of 8% preferred stock                 $ (41,581,000)   $ (41,581,000)          
Preferred stock, dividend rate (as a percent)                 8.00% 8.00% 8.00% 8.00%        
Preferred Stock | 7% Preferred Stock                                
Public Offering of Preferred Stock                                
Preferred stock, dividend rate (as a percent)                 7.00% 7.00% 7.00% 7.00%        
Preferred Stock | 6% Series B Preferred Stock                                
Public Offering of Preferred Stock                                
Preferred stock, dividend rate (as a percent)                 6.00% 6.00% 6.00% 6.00%        
Preferred Stock | 6% Series C Preferred Stock                                
Public Offering of Preferred Stock                                
Shares issued (in shares) | shares                     150,000          
Preferred stock, dividend rate (as a percent)                 6.00% 6.00% 6.00% 6.00%        
Offering costs                     $ 5,100,000          
Preferred Stock | 6% Series C Preferred Stock | Private Placement                                
Public Offering of Preferred Stock                                
Shares issued (in shares) | shares                 46,181   46,181          
Preferred stock, dividend rate (as a percent)                     6.00%          
Offering costs                     $ 23,000