Loans and Allowance for Credit Losses on Loans (Tables)

9 Months Ended

Sep. 30, 2022

Loans and Allowance for Credit Losses on Loans

Summary of loans

	September 30,		December 31,
	2022		2021
	(In thousands)
Mortgage warehouse lines of credit	$	815,084	$	781,437
Residential real estate		1,030,075		843,101
Multi-family financing(1)		2,766,950		2,702,042
Healthcare financing(1)		1,429,675		826,157
Commercial and commercial real estate		810,731		520,199
Agricultural production and real estate		91,913		97,060
Consumer and margin loans		13,696		12,667
		6,958,124		5,782,663
Less:
ACL-Loans		38,996		31,344
Loans Receivable	$	6,919,128	$	5,751,319

(1) In 2022, the Company started presenting these two loan types on separate lines for reporting purposes.

Schedule of allowance for credit loss on loan methodology by loan portfolio segment

Loan Portfolio Segment	ACL-Loans Methodology
Ag loans	Remaining Life Method
Ag real estate loans	Remaining Life Method
Commercial loans	Discounted Cash Flow
Commercial real estate loans	Discounted Cash Flow
Consumer and margin loans	Remaining Life Method
HELOC loans	Discounted Cash Flow
Multi-family healthcare loans	Discounted Cash Flow
Multi-family non-management loans	Discounted Cash Flow
Multi-family construction loans	Discounted Cash Flow
Multi-family loans	Discounted Cash Flow
Residential real estate loans	Discounted Cash Flow
SBA commercial loans	Discounted Cash Flow
SBA real estate commercial loans	Discounted Cash Flow
Single-family warehouse lines of credit	Remaining Life Method

Summary of the activity in the ACL-Loans by portfolio segment

	For the Three Months Ended September 30, 2022
	MTG WHLOC		RES RE		MF FIN		HC FIN		CML & CRE		AG & AGRE		CON & MAR		TOTAL
	(In thousands)
ACL-Loans
Balance, beginning of period	$	2,422	$	4,910	$	16,364	$	7,936	$	5,195	$	551	$	96	$	37,474
Provision for credit losses		(230)		1,370		(2,365)		1,061		1,821		1		51		1,709
Loans charged to the allowance		—		(4)		—		—		(275)		—		—		(279)
Recoveries of loans previously charged off		—		—		—		—		92		—		—		92
Balance, end of period	$	2,192	$	6,276	$	13,999	$	8,997	$	6,833	$	552	$	147	$	38,996

	For the Nine Months Ended September 30, 2022
	MTG WHLOC		RES RE		MF FIN		HC FIN		CML & CRE		AG & AGRE		CON & MAR		TOTAL
	(In thousands)
ACL-Loans
Balance, beginning of period	$	1,955	$	4,170	$	14,084	$	4,461	$	5,879	$	657	$	138	$	31,344
Impact of adopting CECL		41		275		520		139		(1,277)		(18)		21		(299)
Provision for credit losses		196		1,835		(605)		4,397		2,726		(87)		(4)		8,458
Loans charged to the allowance		—		(4)		—		—		(1,238)		—		(15)		(1,257)
Recoveries of loans previously charged off		—		—		—		—		743		—		7		750
Balance, end of period	$	2,192	$	6,276	$	13,999	$	8,997	$	6,833	$	552	$	147	$	38,996

Summary of activity in the allowance for loan losses

	For the Three Months Ended September 30, 2021
	MTG WHLOC		RES RE		MF FIN		HC FIN		CML & CRE		AG & AGRE		CON & MAR		TOTAL
	(In thousands)
Allowance for loan losses
Balance, beginning of period	$	2,935	$	3,969	$	11,678	$	4,104	$	5,239	$	611	$	160	$	28,696
Provision for credit losses		(705)		105		1,105		324		296		(2)		(44)		1,079
Loans charged to the allowance		—		—		—		—		(650)		—		—		(650)
Recoveries of loans previously charged off		—		—		—		—		—		—		9		9
Balance, end of period	$	2,230	$	4,074	$	12,783	$	4,428	$	4,885	$	609	$	125	$	29,134

	For the Nine Months Ended September 30, 2021
	MTG WHLOC		RES RE		MF FIN		HC FIN		CML & CRE		AG & AGRE		CON & MAR		TOTAL
	(In thousands)
Allowance for loan losses
Balance, beginning of period	$	4,018	$	3,334	$	12,041	$	2,690	$	4,641	$	636	$	140	$	27,500
Provision for credit losses		(1,788)		742		742		1,738		1,046		(27)		(26)		2,427
Loans charged to the allowance		—		(2)		—		—		(802)		—		(6)		(810)
Recoveries of loans previously charged off		—		—		—		—		—		—		17		17
Balance, end of period	$	2,230	$	4,074	$	12,783	$	4,428	$	4,885	$	609	$	125	$	29,134

Summary of activity in the allowance for loans and recorded investment by loan portfolio

	December 31, 2021
	MTG WHLOC		RES RE		MF FIN		HC FIN		CML & CRE		AG & AGRE		CON & MAR		TOTAL
	(In thousands)
Allowance for loan losses
Balance, December 31, 2021	$	1,955	$	4,170	$	14,084	$	4,461	$	5,879	$	657	$	138	$	31,344
Ending balance: individually evaluated for impairment	$	—	$	16	$	—	$	—	$	867	$	—	$	7	$	890
Ending balance: collectively evaluated for impairment	$	1,955	$	4,154	$	14,084	$	4,461	$	5,012	$	657	$	131	$	30,454
Loans
Balance, December 31, 2021	$	781,437	$	843,101	$	2,702,042	$	826,157	$	520,199	$	97,060	$	12,667	$	5,782,663
Ending balance individually evaluated for impairment	$	—	$	419	$	36,760	$	—	$	6,055	$	158	$	13	$	43,405
Ending balance collectively evaluated for impairment	$	781,437	$	842,682	$	2,665,282	$	826,157	$	514,144	$	96,902	$	12,654	$	5,739,258

Schedule of allowance for credit loss allocated to collateral dependent loans

	September 30, 2022
	Real Estate		Accounts Receivable / Equipment		Other		Total		ACL-Loans Allocation
	(In thousands)
RES RE	$	196	$	—	$	6	$	202	$	22
MF FIN		36,760		—		—		36,760		167
CML & CRE		—		5,036		745		5,781		611
AG & AGRE		147		—		—		147		1
CON & MAR		—		—		3		3		—
Total collateral dependent loans	$	37,103	$	5,036	$	754	$	42,893	$	801

Schedule of credit risk profile of loan portfolio

	As of September 30, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Loans		TOTAL
	(In thousands)
MTG WHLOC
Acceptable and Above	$	—	$	—	$	—	$	—	$	—	$	—	$	815,084	$	815,084
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	815,084	$	815,084
RES RE
Acceptable and Above		12,903		7,999		24,802		3,534		730		10,696		968,275		1,028,939
Special Mention (Watch)		—		—		—		61		74		799		—		934
Substandard		—		—		—		—		—		202		—		202
Total	$	12,903	$	7,999	$	24,802	$	3,595	$	804	$	11,697	$	968,275	$	1,030,075
MF FIN
Acceptable and Above		714,724		742,079		245,382		46,557		7,631		7,287		928,462		2,692,122
Special Mention (Watch)		28,529		5,000		4,539		—		—		—		—		38,068
Substandard		36,760		—		—		—		—		—		—		36,760
Total	$	780,013	$	747,079	$	249,921	$	46,557	$	7,631	$	7,287	$	928,462	$	2,766,950
HC FIN
Acceptable and Above		710,459		310,464		183,047		13,860		—		—		112,288		1,330,118
Special Mention (Watch)		30,051		43,903		15,623		9,980		—		—		—		99,557
Total	$	740,510	$	354,367	$	198,670	$	23,840	$	—	$	—	$	112,288	$	1,429,675
CML & CRE
Acceptable and Above		75,569		87,709		28,353		54,185		12,855		9,111		534,600		802,382
Special Mention (Watch)		45		20		971		124		101		230		1,077		2,568
Substandard		—		1,779		604		75		—		671		2,652		5,781
Total	$	75,614	$	89,508	$	29,928	$	54,384	$	12,956	$	10,012	$	538,329	$	810,731
AG & AGRE
Acceptable and Above		9,782		7,716		15,990		6,010		3,255		20,803		26,608		90,164
Special Mention (Watch)		14		64		471		425		163		408		57		1,602
Substandard		—		—		—		—		—		147		—		147
Total	$	9,796	$	7,780	$	16,461	$	6,435	$	3,418	$	21,358	$	26,665	$	91,913
CON & MAR
Acceptable and Above		4,582		575		345		114		4,683		14		3,356		13,669
Special Mention (Watch)		—		—		21		—		—		3		—		24
Substandard		—		—		—		—		—		3		—		3
Total	$	4,582	$	575	$	366	$	114	$	4,683	$	20	$	3,356	$	13,696
Total Acceptable and Above	$	1,528,019	$	1,156,542	$	497,919	$	124,260	$	29,154	$	47,911	$	3,388,673	$	6,772,478
Total Special Mention (Watch)	$	58,639	$	48,987	$	21,625	$	10,590	$	338	$	1,440	$	1,134	$	142,753
Total Substandard	$	36,760	$	1,779	$	604	$	75	$	—	$	1,023	$	2,652	$	42,893
Total Loans	$	1,623,418	$	1,207,308	$	520,148	$	134,925	$	29,492	$	50,374	$	3,392,459	$	6,958,124

	December 31, 2021
	MTG WHLOC		RES RE		MF FIN		HC FIN		CML & CRE		AG & AGRE		CON & MAR		TOTAL
	(In thousands)
Special Mention (Watch)	$	—	$	946	$	27,155	$	66,406	$	2,483	$	3,820	$	21	$	100,831
Substandard		—		419		36,760		—		6,055		158		13		43,405
Acceptable and Above		781,437		841,736		2,638,127		759,751		511,661		93,082		12,633		5,638,427
Total	$	781,437	$	843,101	$	2,702,042	$	826,157	$	520,199	$	97,060	$	12,667	$	5,782,663

Schedule of aging analysis of the recorded investment in loans

	September 30, 2022
	30-59 Days		60-89 Days		Greater Than		Total				Total
	Past Due		Past Due		90 Days		Past Due		Current		Loans
	(In thousands)
MTG WHLOC	$	—	$	—	$	—	$	—	$	815,084	$	815,084
RES RE		627		109		125		861		1,029,214		1,030,075
MF FIN		—		—		—		—		2,766,950		2,766,950
HC FIN		—		—		21,783		21,783		1,407,892		1,429,675
CML & CRE		—		—		3,778		3,778		806,953		810,731
AG & AGRE		59		73		—		132		91,781		91,913
CON & MAR		90		—		5		95		13,601		13,696
	$	776	$	182	$	25,691	$	26,649	$	6,931,475	$	6,958,124

	December 31, 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	$	—	$	—	$	—	$	—	$	781,437	$	781,437
RES RE		1,252		287		186		1,725		841,376		843,101
MF FIN		—		—		—		—		2,702,042		2,702,042
HC FIN		—		—		—		—		826,157		826,157
CML & CRE		591		8		149		748		519,451		520,199
AG & AGRE		37		21		—		58		97,002		97,060
CON & MAR		43		5		40		88		12,579		12,667
	$	1,923	$	321	$	375	$	2,619	$	5,780,044	$	5,782,663

Schedule of components of impaired loans and specific valuation allowance

	December 31, 2021
	MTG WHLOC		RES RE		MF FIN		HC FIN		CML & CRE		AG & AGRE		CON & MAR		TOTAL
	(In thousands)
Impaired loans without a specific allowance:
Recorded investment	$	—	$	372	$	36,760	$	—	$	3,912	$	158	$	4	$	41,206
Unpaid principal balance		—		372		36,760		—		3,912		158		4		41,206
Impaired loans with a specific allowance:		—						—
Recorded investment		—		47		—		—		2,143		—		9		2,199
Unpaid principal balance		—		47		—		—		2,143		—		9		2,199
Specific allowance		—		16		—		—		867		—		7		890
Total impaired loans:
Recorded investment		—		419		36,760		—		6,055		158		13		43,405
Unpaid principal balance		—		419		36,760		—		6,055		158		13		43,405
Specific allowance		—		16		—		—		867		—		7		890

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

		For the Three Months Ended September 30, 2021
	MTG WHLOC		RES RE		MF FIN		HC FIN		CML & CRE		AG & AGRE		CON & MAR		TOTAL
Average recorded investment in impaired loans	$	—	$	595	$	9,190	$	—	$	6,731	$	158	$	6	$	16,680
Interest income recognized		—		30		—		—		82		—		—		112

		For the Nine Months Ended September 30, 2021
	MTG WHLOC		RES RE		MF RE		HC FIN		CML & CRE		AG & AGRE		CON & MAR		TOTAL
Average recorded investment in impaired loans	$	—	$	1,885	$	7,352	$	—	$	7,307	$	747	$	7	$	17,298
Interest income recognized		—		57		—		—		341		—		—		398

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

	September 30,				December 31,
	2022				2021
			Total Loans >				Total Loans >
			90 Days &				90 Days &
	Nonaccrual		Accruing		Nonaccrual		Accruing
	(In thousands)
RES RE	$	201	$	21	$	362	$	22
MF RE		21,783		—		—		—
CML & CRE		4,393		—		—		149
AG & AGRE		147		—		158		30
CON & MAR		3		2		4		36
	$	26,527	$	23	$	524	$	237