Merchants Bancorp
For the period ended Sep 30, 2025. Filed Nov 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 7, 2025
MBIN$51.76-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0001558370-25-011041
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001104659-25-108470
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 204 previous paragraphs and 205 current paragraphs.
70 unchanged; 104 reworded; 22 added; 21 removed; 9 previous and 9 current paragraphs rearranged.
Tables are not compared: 42 previous and 39 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
Total Assets. Total assets of $19.4 billion at September 30, 2025 increased $548.9 million, or 3%, compared to $18.8 billion at December 31, 2024. The increase was due primarily to growth in loans held for sale and in the warehouse and multi-family loan portfolios, which were partially offset by lower balances in the residential loan portfolio. The warehouse portfolio is exclusively made up of loans to residential and multi-family mortgage bankers that are funding agency-eligible mortgages and commercial loans, which represent all of the Company’s loans to non-depository institutions.
Current report
Other Liabilities. Other Liabilities of$262.9 million increased $31.9 million, or 14%, compared to $231.0 million at December 31, 2024 largely due to increased funding commitments for equity investments and joint ventures.
Current report
Loans receivable classified as Substandard totaled $426.5 million at September 30, 2025, compared to $317.3 million as of December 31,2024 and $287.8 million at September 30, 2024.
Current report
The increase in non-performing loans was primarily attributable to one multi-family relationship that was partially offset by charge-offs. This relationship drove the increase in total delinquent loans.
Current report
General. Net income of $54.7 million for the three months ended September 30, 2025 decreased by $6.6 million, or 11%, compared to the three months ended September 30,2024, reflecting a $27.1 million, or 22%, decrease in net interest income after provision for credit losses, reflecting higher provision expenses. This decline was nearly offset by a $26.3 million, or 157%, increase in noninterest income, driven by growth in gains on loan sales and loan servicing fees. Results also reflected a $15.9 million, or 26%, increase in noninterest expense, largely attributable to higher salaries and employee benefits, and a $10.2 million, or 51%, decrease in the provision for income taxes, which reflect benefits from the utilization of tax credits and lower pre-tax income. Noninterest income included a positive fair market value adjustment of $2.1 million to servicing rights and a negative fair market value adjustment of $770,000 to derivatives, which compared to negative fair market value adjustments of $6.7 million to servicing rights and $7.7 million to derivatives, in the three months ended September 30, 2024.
Current report
Interest income of $11.9 million on securities available for sale for the three months ended September 30, 2025, decreased $3.0 million, or 20%, compared to $14.9 million for the three months ended September 30, 2024. The average balance of $923.6 million decreased $87.5 million, or 9%, compared to $1.0 billion for the three months ended
Current report
September 30, 2024. The average yield decreased 74 basis points, to 5.10% for the three months ended September 30, 2025, compared to 5.84% for the three months ended September 30, 2024.
Current report
Interest income of $8.1 million on interest-earning deposits, and other interest or dividends for the three months ended September 30, 2025, increased $0.4 million, or 5%, compared to $7.7 million for the three months ended September 30, 2024. The average balance of $556.9 million increased $72.2 million, or 15%, compared to $484.7 million for the three months ended September 30, 2024. The average yield decreased 56 basis points, to 5.74% for the three months ended September 30, 2025, compared to 6.30% for the three months ended September 30, 2024.
Current report
Interest expense on deposits of $139.7 million decreased $25.9 million, or 16%, for the three months ended September 30, 2025, compared to the three months ended September 30,2024.
Current report
Interest expense of $25.8 million on certificates of deposit for the three months ended September 30, 2025, decreased $43.4 million, or 63%, compared to $69.2 million for the three months ended September 30, 2024. The decrease reflected lower average balances at lower rates. The average balance of $2.2 billion for the three months ended September 30, 2025, decreased $2.8 billion or 56%, compared to $5.0 billion for the three months ended September 30, 2024. The average interest rate decreased 90 basis points, to 4.57%, for the three months ended September 30, 2025, compared to 5.47% for three months ended September 30, 2024.
Current report
Interest expense of $34.0 million on borrowings for the three months ended September 30, 2025, decreased $6.5 million, or 16%, compared to the three months ended September 30, 2024. The decrease was primarily due to lower average rates on lower average FHLB borrowings. The average interest rate decreased 95 basis points to 5.44% for the three months ended September 30, 2025, compared to 6.39% for the three months ended September 30, 2024.
Current report
after receiving new appraisals, and the ongoing investigation of borrowers involved in mortgage fraud or suspected fraud. The increases were also attributable to certain types of subordinated loans that the Company no longer offers to borrowers. The underperforming loans have been largely identified and evaluated for potential losses that have either been included in the provision for credit losses as specific reserves or charged off.
Current report
Noninterest income of $43.0 million for the three months ended September 30, 2025 increased $26.3 million, or 157%, compared to $16.7 million for the three months ended September 30, 2024. The increase was primarily due to a $9.5 million, or 629%, increase in loan servicing fees, a $7.9 million, or 47%, increase in gain on sale of loans, a $5.7 million, or 294%, increase in other income, and a $3.0 million, or 165%, increase in syndication and asset management fees.
Current report
Noninterest expense of $77.3 million for the three months ended September 30, 2025 increased $15.9 million, or 26%, compared to the three months ended September 30,2024. The increase was primarily due to a $8.9 million, or 25%, increase in salaries and employee benefits that primarily reflected higher commissions on higher production volume and noninterest income, as well as $2.0 million for expenses associated with the addition of production staff, which is expected to be accretive to earnings, while continuing to elevate production, gain on sale, and expenses in future quarters. Also contributing to the higher expenses during the quarter was a $3.8 million increase in other expenses primarily associated with taxes, insurance, property expenses, and legal fees for collateral preservation of nonperforming loans and a $2.1 million increase in credit risk transfer premium expense associated credit default swaps.
Current report
Interest income of $14.4 million on mortgage loans in process of securitization for the nine months ended September 30, 2025, increased $5.5 million, or 63%, compared to $8.8 million for the nine months ended September 30, 2024. The average balance of $350.3 million increased $123.1 million, or 54%, compared to the nine months ended September 30, 2024. The average yield increased 29 basis points, to 5.48% for the nine months ended September 30, 2025, compared to 5.19% for the nine months ended September 30, 2024. The increase in average balance was primarily due to higher origination volume of loans pending settlement for sale on the secondary market.
Current report
Interest income of $23.7 million on interest-earning deposits, and other interest or dividends for the nine months ended September 30, 2025, increased $4.3 million, or 22%, compared to $19.4 million for the nine months ended September 30, 2024. The average balance of interest-earning deposits and other increased $112.6 million, or 27%, to $535.9 million for the nine months ended September 30, 2025, from $423.3 million for the nine months ended September 30, 2024, and the average yield decreased 21 basis points, to 5.92%, for the nine months ended September 30, 2025, compared to 6.13% for the nine months ended September 30, 2024.
Current report
Loan servicing fees included a $1.6 million positive fair market value adjustment to servicing rights for the nine months ended September 30, 2025, compared to a $12.3 million positive fair market value adjustment to servicing rights for the nine months ended September 30, 2024.
Current report
Loan servicing fees included a $2.5 million positive fair market value adjustment to servicing rights for the three months ended September 30, 2025 compared to a $5.1 million negative fair market value adjustment for the three months ended September 30, 2024.
Current report
The Banking segment reported net income of $29.6 million for the three months ended September 30, 2025, decrease of $15.4 million, or 34%, compared to $45.0 million for the three months ended September 30,2024. The decrease in net income was primarily due to the increase in provision for credit losses.
Current report
The Banking segment reported net income of $91.2 million for the nine months ended September 30, 2025, a decrease of $62.6 million, or 41%, compared to $153.8 million for the nine months ended September 30, 2024. The decrease in net income was primarily due to the increase in provision for credit losses.
Current report
6% Series C Preferred Stock. 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.
Current report
8.25% Series D Preferred Stock. Dividends on the Series D Preferred Stock, to the extent declared by the Company’s board, are payable quarterly. The Company may redeem the Series D Preferred Stock, in whole or in part, at our option, on any dividend payment date on or after October 1, 2027, subject to the approval of the appropriate federal banking agency, at the liquidation preference, plus any declared and unpaid dividends (without regard to any undeclared dividends) to, but excluding, the date of redemption. If the Series D Preferred Stock remains outstanding on October 1, 2027, its dividend rate would reset to the 5-year Treasury rate, plus 4.34% and would remain at that level for an additional 5 years.
Removed paragraphs (21)
Previous report
Regulatory Developments Regarding the Bancorp and Bank
Previous report
Memorandum of Understanding. On June 30, 2025, the Bank entered into a confidential MOU with the FDIC and DFI. While the contents of the MOU are confidential under DFI and FDIC regulations, certain provisions, with the authorization of the DFI and FDIC, are summarized below. The MOU is an informal administrative agreement among the Bank, FDIC, and DFI pursuant to which the Bank has agreed to take various actions and enhance specific areas of the Bank’s operations. In particular, the Bank has agreed to maintain certain capital thresholds, manage asset concentrations, and implement certain plans regarding the Bank’s operations and strategy to mitigate risk of certain assets, which it has already implemented. As of the date of this report, and as of each of the periods ending March 31, 2025 and December 31, 2024, the Bank’s capital exceeded the levels agreed to in the MOU and the Bank was within the asset concentration limits agreed to in the MOU. The MOU will remain in effect until modified or terminated by the FDIC and DFI.
Previous report
Management does not expect the actions called for by these regulatory actions to have a material adverse impact on the Company’s financial performance or the Bank’s ongoing day-to-day operations, although they may have the effect of limiting or delaying the Company’s or the Bank’s ability or plans to expand.
Previous report
Total Assets. Total assets of $19.1 billion at June 30, 2025 increased $335.5 million, or 2%, compared to $18.8 billion at December 31, 2024. The increase was due primarily to growth in loans held for sale and in the warehouse and multi-family loan portfolios. Total loan balances grew by 2% even after two loan sales during the three months ended June 30, 2025 totaling over $685.4 million related to securitizations.
Previous report
Other Liabilities. Other Liabilities of$231.0 million at June 30, 2025 were essentially unchanged compared to December 31, 2024.
Previous report
During the three months ended June 30, 2025, after months of seeking legal remedies, the Company obtained additional access and information, such as through court appointed receivers, to assess the collateral supporting its challenged loans. The evaluation of this information contributed to an increase in loans classified as substandard, bringing the total to $417.7 million compared to $317.3 million as of December 31, 2024.
Previous report
General. Net income of $38.0 million for the three months ended June 30, 2025 decreased by $38.4 million, or 50%, compared to the three months ended June 30, 2024, reflecting a $43.1 million, or 432%, increase in provision for credit losses. The increase in provision for credit losses was primarily associated with estimated declines on multi-family property values, after receiving new appraisals, and the ongoing investigation of borrowers involved in mortgage fraud or suspected fraud. The decrease in net income also reflected a $27.0 million, or 54%, increase in noninterest expense that was partially offset by a $19.1 million, or 61%, increase in noninterest income, and an $11.9 million, or 52%, decrease in provision for income tax. Of the $38.4 million decrease in net income, $691,000, or $0.01 per diluted common share, was attributable to changes in valuation adjustments. Noninterest income included positive fair market value adjustments of $258,000 to servicing rights and $4.3 million to derivatives, which compared to positive fair market value adjustments of $5.1 million to servicing rights and $215,000 to derivatives, in the three months ended June 30,2024.
Previous report
Interest income of $12.1 million on securities available for sale for the three months ended June 30, 2025, decreased $2.7 million, or 18%, compared to $14.8 million for the three months ended June 30, 2024. The average balance of $955.2 million decreased $84.2 million, or 8%, compared to $1.0 billion for the three months ended
Previous report
June 30, 2024. The average yield decreased 64 basis points, to 5.08% for the three months ended June 30, 2025, compared to 5.72% for the three months ended June 30, 2024.
Previous report
Interest income of $23.2 million on securities held to maturity for the three months ended June 30, 2025, increased $3.4 million, or 17%, compared to $19.8 million for the three months ended June 30, 2024. The average balance of $1.6 billion increased $412.0 million, or 36%, compared to $1.2 billion for the three months ended June 30, 2024. The average yield decreased 95 basis points, to 5.91% for the three months ended June 30, 2025, compared to 6.86% for the three months ended June 30, 2024. The increase in average balances was primarily due to purchases of senior investment securities backed by residential and healthcare loans retained as part of credit risk transfer securitization transactions originated by the Company.
Previous report
Interest expense of $35.4 million on certificates of deposit for the three months ended June 30, 2025, decreased $52.9 million, or 60%, compared to $88.3 million for the three months ended June 30, 2024. The decrease reflected lower average balances at lower rates. The average balance of $3.1 billion for the three months ended June 30, 2025, decreased $3.4 billion or 53%, compared to $6.5 billion for the three months ended June 30, 2024. The average interest rate decreased 84 basis points to 4.59% for the three months ended June 30, 2025, compared to 5.43% for three months ended June 30, 2024.
Previous report
Interest expense of $44.3 million on borrowings for the three months ended June 30, 2025, increased $23.8 million, or 116%, compared to $20.5 million for the three months ended June 30, 2024. The increase was primarily due to higher average balances at lower rates of FHLB borrowings. There was a $2.4 billion, or 235%, increase in overall average borrowings to $3.5 billion at June 30, 2025, compared to $1.0 billion for the three months ended June 30, 2024. The average interest rate decreased 285 basis points to 5.15% for the three months ended June 30, 2025, compared to 8.00% for the three months ended June 30, 2024.
Previous report
Noninterest income of $50.5 million for the three months ended June 30, 2025 increased $19.1 million, or 61%, compared to $31.4 million for the three months ended June 30, 2024. The increase was primarily due to a $12.2 million, or 109%, increase in gain on sale of loans, a $6.5 million, or 200%, increase in syndication and asset management fees, and a $4.7 million, or 101%, increase in other income, partially offset by a $4.7 million, or 43%, decrease in loan servicing fees.
Previous report
Loan servicing fees included a $0.3 million positive fair market value adjustment to servicing rights for the three months ended June 30, 2025, compared to a $5.1 million positive fair market value adjustment to servicing rights for the three months ended June 30, 2024.
Previous report
months ended June 30, 2025, and the average yield decreased 37 basis points, to 5.15% for the for the six months ended June 30, 2025, compared to 5.52% for the six months ended June 30, 2024.
Previous report
Interest income of $15.7 million on interest-bearing deposits, and other for the six months ended June 30, 2025, increased $3.9 million, or 33%, compared to $11.8 million for the six months ended June 30, 2024. The average balance of interest-earning deposits and other increased $133.0 million, or 34%, to $525.3 million for the six months ended June 30, 2025, from $392.3 million for the six months ended June 30, 2024, and the average yield decreased 2 basis points, to 6.01%, for the six months ended June 30, 2025, compared to 6.03% for the six months ended June 30, 2024.
Previous report
Loan servicing fees included a $0.5 million negative fair market value adjustment to servicing rights for the six months ended June 30, 2025, compared to a $19.0 million positive fair market value adjustment to servicing rights for the six months ended June 30, 2024.
Previous report
Loan servicing fees included a $0.7 million positive fair market value adjustment to servicing rights for the three months ended June 30, 2025 compared to a $4.5 million positive fair market value adjustment for the three months ended June 30, 2024.
Previous report
The Banking segment reported net income of $14.6 million for the three months ended June 30, 2025, a decrease of $37.8 million, or 72%, compared to $52.4 million for the three months ended June 30,2024. The decrease in net income was primarily due to the increase in provision for credit losses, partially offset by an increase in gain on sale of loans.
Previous report
The Banking segment reported net income of $61.7 million for the six months ended June 30, 2025, a decrease of $47.1 million, or 43%, compared to $108.8 million for the six months ended June 30, 2024. The decrease in net income was primarily due to the increase in provision for credit losses.
Previous report
Our liquid assets and borrowing capacity significantly exceed our uninsured deposits. Uninsured deposits represent 24% of total Bank deposits. Our line of credit with the Federal Reserve Bank of Chicago, alone, could fund 106% of uninsured deposits. Since 2018, the Company has offered its customers an opportunity to insure balances in excess of $250,000 through our insured cash sweep program that extends FDIC protection up to $100 million. The balance of deposits in this program was $1.4 billion and $1.6 billion as of June 30, 2025 and December 31, 2024, respectively.
Reworded paragraphs (104)
Previous wording
Management’s discussion and analysis of the financial condition at June 30, 2025 and results of operations for the three and six months ended June 30, 2025 and 2024, is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto, appearing in Part I, Item 1 of this Form 10-Q.
Current wording
Management’s discussion and analysis of the financial condition at September 30, 2025 and results of operations for the three and nine months ended September 30, 2025 and 2024, is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto, appearing in Part I, Item 1 of this Form 10-Q.
Previous wording
Our business consists of funding low risk, multi-family, residential, and SBA loans meeting underwriting standards of government programs under an originate to sell model, and retaining adjustable-rate loans as held for investment to reduce interest rate risk. The gain on sale of these loans and servicing fees contribute to noninterest income. The funding source is primarily from mortgage custodial, municipal, retail, commercial, brokered deposits, and short-term borrowing. We believe that the combination of net interest income and noninterest income from the sale of low risk profile assets results in lower than industry charge-offs and a lower expense base, which serves to maximize net income and provide higher than industry shareholder return.
Current wording
Our business consists of funding low risk multi-family, residential, and SBA loans meeting underwriting standards of government programs under an originate to sell model, and retaining adjustable-rate loans as held for investment to reduce interest rate risk. The gain on sale of these loans and servicing fees contribute to noninterest income. The funding source is primarily from mortgage custodial, municipal, retail, commercial and brokered deposits, as well as short-term borrowing. We believe that the combination of net interest income and noninterest income from the sale of low risk profile assets results in lower than industry charge-offs and a lower expense base, which serves to maximize net income and provide higher than industry shareholder return.
Previous wording
As of June 30, 2025, we had approximately $19.1 billion in total assets, $12.7 billion in deposits and $2.2 billion in total shareholders’ equity. Total assets as of June 30, 2025 included $10.4 billion of loans receivable, net of ACL-Loans, and $4.1 billion of loans held for sale. There were also $1.5 billion in securities classified as held to maturity. We had $936.3 million in securities available for sale, the majority of which were acquired from a warehouse customer, and others are match funded with related custodial deposits or required to collateralize our credit-linked notes. There are some restrictions on the types of securities we hold, particularly for those that are funded by certain multi-family custodial deposits where we set the cost of deposits based on the yield of the related security. Additionally, we had $647.2 million of cash and cash equivalents, other assets of $495.3 million, which primarily related to low-income housing tax credits, and $402.4 million of mortgage loans in process of securitization that represent pre-sold multi-family rental real estate loan originations in primarily Ginnie Mae, Fannie Mae, and Freddie Mac mortgage-backed securities pending settlements that typically occur within 30 days. Servicing rights at June 30, 2025 were $193.0 million based on the fair value of the loan servicing, which primarily includes Ginnie Mae multi-family servicing rights with 10-year call protection.
Current wording
As of September 30, 2025, we had approximately $19.4 billion in total assets, $13.9 billion in deposits and $2.2 billion in total shareholders’ equity. Total assets as of September 30, 2025 included $10.5 billion of loans receivable, net of ACL-Loans, and $4.1 billion of loans held for sale. There were also $1.7 billion in securities classified as held to maturity. We had $885.1 million in securities available for sale, the majority of which were acquired from a warehouse customer, and others are match funded with related custodial deposits or required to collateralize our credit linked notes. There are some restrictions on the types of securities we hold, particularly for those that are funded by certain multi-family custodial deposits where we set the cost of deposits based on the yield of the related security. Additionally, we
Previous wording
Cash and Cash Equivalents. Cash and cash equivalents of $647.2 million at June 30, 2025 increased $170.6 million, or 36%, compared to $476.6 million at December 31, 2024. Included in cash equivalents was $43.8 million in restricted cash associated with senior credit linked notes described inNote 1: Basis of Presentation in this Form 10-Q andNote 1: Basis of Presentation andNote 10: Borrowingsand the Company’s 2024 Annual Report on Form 10–K*.*
Current wording
Cash and Cash Equivalents. Cash and cash equivalents of $598.0 million at September 30, 2025 increased $121.4 million, or 25%, compared to $476.6 million at December 31, 2024. Included in cash equivalents was $83.8 million in restricted cash associated with senior credit linked notes described inNote 1: Basis of Presentation in this Form 10-Q andNote 10: Borrowingsand the Company’s 2024 Annual Report on Form 10–K*.*
Previous wording
Mortgage Loans in Process of Securitization. Mortgage loans in process of securitization of $402.4 million at June 30, 2025 decreased $25.8 million, or 6%, compared to $428.2 million at December 31, 2024. These represent loans that our banking subsidiary, Merchants Bank, has originated or funded and are held in the loan portfolio pending settlement, as primarily Ginnie Mae, Fannie Mae, and Freddie Mac mortgage-backed securities with a firm investor commitment to purchase the securities.
Current wording
Mortgage Loans in Process of Securitization. Mortgage loans in process of securitization of $414.8 million at September 30, 2025 decreased $13.4 million, or 3%, compared to $428.2 million at December 31, 2024. These represent loans that our banking subsidiary, Merchants Bank, has originated or funded and are held in the loan portfolio pending settlement, primarily into Ginnie Mae, Fannie Mae, and Freddie Mac mortgage-backed securities with a firm investor commitment to purchase the securities.
Previous wording
Securities Available for Sale. Securities available for sale of $936.3 million at June 30, 2025 decreased $43.7 million, or 4%, compared to December 31, 2024. The decrease in securities available for sale was primarily due to
Current wording
Securities Available for Sale. Securities available for sale of $885.1 million at September 30, 2025 decreased $95.0 million, or 10%, compared to $980.1 million at December 31, 2024. The decrease in securities available for sale was primarily due to $642.8 million in calls, maturities, repayments and other adjustments, partially offset by purchases of $547.9 million during the period.
Previous wording
Included in securities available for sale were $603.0 million and $635.9 million of investments at June 30, 2025 and December 31, 2024, respectively, for which a fair value option was elected. Fair value option securities represent securities which the Company has elected to carry at fair value and are separately identified on the unaudited condensed consolidated balance sheets with changes in the fair value recognized in earnings as they occur.
Current wording
Included in securities available for sale were $591.4 million and $635.9 million of investments at September 30, 2025 and December 31, 2024, respectively, for which a fair value option was elected. Fair value option securities represent securities which the Company has elected to carry at fair value and are separately identified on the unaudited condensed consolidated balance sheets with changes in the fair value recognized in earnings as they occur.
Previous wording
As of June 30, 2025, AOCL of $0.2 million, related to securities available for sale, increased $0.1 million, or 86%, compared to accumulated losses of $0.1 million at December 31, 2024. The $0.2 million of AOCL as of June 30, 2025 represented less than 1% of total equity and 1% of total securities available for sale, reflecting our interest rate risk policy of maintaining short duration on assets and liabilities.
Current wording
As of September 30, 2025, AOCL of $0.2 million, related to securities available for sale, increased $0.1 million, or 59%, compared to accumulated losses of $0.1 million at December 31, 2024. The $0.2 million of AOCL as of September 30, 2025 represented 0.01% of total equity and 0.02% of total securities available for sale, reflecting our interest rate risk policy of maintaining short duration on assets and liabilities.
Previous wording
Securities Held to Maturity. Securities held to maturity of $1.5 billion at June 30, 2025 decreased $116.5 million, or 7%, compared to $1.7 billion at December 31, 2024. The decrease was due to repayments and amortization during the period.
Current wording
Securities Held to Maturity. Securities held to maturity of $1.7 billion at September 30, 2025 increased $5.9 million compared to December 31, 2024. The increase was due to purchases net of repayments and amortization during the period.
Previous wording
Loans Held for Sale. Loans held for sale of $4.1 billion at June 30, 2025 increased $334.3 million, or 9%, compared to $3.8 billion at December 31, 2024. The increase in loans held for sale was due primarily to an increase in warehouse participations, as we experienced higher volume. Loans held for sale are comprised primarily of single-family residential real estate loan participations that meet Fannie Mae, Freddie Mac, or Ginnie Mae eligibility. It also includes some multi-family loans that are expected to be sold or securitized in the future.
Current wording
Loans Held for Sale. Loans held for sale of $4.1 billion at September 30, 2025 increased $357.8 million, or 9%, compared to $3.8 billion at December 31, 2024. The increase in loans held for sale was due primarily to an increase in warehouse participations, as we experienced higher volume. Loans held for sale are comprised primarily of single-family residential real estate loan participations that meet Fannie Mae, Freddie Mac, or Ginnie Mae eligibility. It also includes some multi-family loans that are expected to be sold or securitized in the future.
Previous wording
Loans Receivable, Net. Loans receivable, net of ACL-Loans, of $10.4 billion at June 30, 2025, increased $78.1 million, or 1%, compared to December 31,2024. The increase in net loans was comprised primarily of:
Current wording
Loans Receivable, Net. Loans receivable, net of ACL-Loans, of $10.5 billion at September 30, 2025, increased $161.2 million, or 2%, compared to $10.4 billion at December 31,2024. The increase in net loans was comprised primarily of:
Previous wording
As of June 30, 2025, approximately 95% of total loans reprice within three months, which reduces the risk of market rate increases.
Current wording
As of September 30, 2025, approximately 96% of total loans reprice within three months, which reduces the risk of market rate increases.
Previous wording
ACL-Loans. The ACL-Loans of $91.8 million at June 30, 2025 increased $7.4 million, or 9%, compared to $84.4 million at December 31,2024. The increase compared to December 31, 2024 was driven by $64.0 million increase in provision expense that was partially offset by $56.6 million in charge-offs, primarily related to the multi-family portfolio. The increases in provision expenses and charge-offs were primarily associated with estimated declines on multi-family property values, after receiving new appraisals, and the ongoing investigation of borrowers involved in mortgage fraud or suspected fraud. The increases were also attributable to certain types of subordinated loans that the Company no longer offers to borrowers. These subordinated loans have been largely identified and evaluated for potential losses that have either been included in the provision for credit losses as specific reserves or charged off.
Current wording
ACL-Loans. The ACL-Loans of $93.3 million at September 30, 2025 increased $8.9 million, or 11%, compared to $84.4 million at December 31, 2024. The increase compared to December 31,2024 was driven by $95.0 million in provision expense that was partially offset by $86.1 million in charge-offs, primarily related to the multi-family portfolio. These changes were primarily associated with declines on multi-family property values, after receiving new appraisals, and the ongoing investigation of borrowers involved in mortgage fraud or suspected fraud. Additionally, the increases were attributable to certain types of subordinated loans that the Company no longer offers to borrowers. These underperforming loans have been largely identified and evaluated for potential losses that have either been included in the provision for credit losses as specific reserves or charged off.
Previous wording
Servicing Rights. Servicing rights of $193.0 million at June 30, 2025 increased $3.1 million, or 2%, compared to $189.9 million at December 31, 2024. During the six months ended June 30, 2025, originated and purchased servicing of $8.7 million was partially offset by paydowns of $5.1 million and a negative fair market value adjustment of $0.5 million. The $0.5 million negative fair market value adjustment reflected a positive fair market value adjustment of $1.2 million for multi-family mortgages and a negative fair market value adjustment of $1.7 million for single-family mortgages and SBA loans during the six months ended June 30, 2025.
Current wording
Servicing Rights. Servicing rights of $213.2 million at September 30, 2025 increased 12%, compared to December 31, 2024. The increase during the nine months ended September 30, 2025, was primarily due to originated and purchased servicing of $29.1 million and a positive fair market value adjustment of $1.6 million partially offset by paydowns of $7.5 million. The $1.6 million positive fair market value adjustment reflected a positive adjustment of $3.7 million for multi-family mortgages and a negative adjustment of $2.1 million for single-family mortgages and SBA loans during the nine months ended September 30, 2025.
Previous wording
Servicing rights are recognized in connection with salesof loans when we retain servicing of the sold loans. The servicing rights are recorded and carried at fair value. The fair value decrease recorded during the six months ended June 30, 2025 was driven by lower interest rates that impacted fair market value adjustments. The value of servicing rights generally increases in rising interest rate environments and declines in falling interest rate environments due to expected prepayments and is also influenced by earnings rates on escrow deposits.
Current wording
Servicing rights are recognized in connection with salesof loans when we retain servicing of the sold loans. The servicing rights are recorded and carried at fair value based on the expected future cash flows. The fair value increase recorded during the nine months ended September 30, 2025 was driven by higher escrow earnings rates in multi-family servicing, which was partially offset by lower interest rates that impacted single-family servicing. The value of servicing rights generally increases in rising interest rate environments and declines in falling interest rate environments due to expected prepayments.
Previous wording
Other Assets and Receivables. Other assets and receivables of $495.3 million at June 30, 2025 decreased $76.0 million, or 13%, compared to $571.3 million at December 31, 2024. The decrease was primarily due to a $125.0 million prepaid asset at December 31, 2024 that was released for the January 2, 2025 redemption of Series B Preferred Stock, partially offset by the increase in low income housing tax credits.
Current wording
Other Assets and Receivables. Other assets and receivables of $543.5 million at September 30, 2025 decreased $27.8 million, or 5%, compared to $571.3 million at December 31, 2024. The decrease was primarily due to a $125.0 million prepaid asset at December 31, 2024 that was released for the January 2, 2025 redemption of Series B Preferred Stock, partially offset by the increase in low income housing tax credits.
Previous wording
Deposits. Deposits of $12.7 billion at June 30, 2025 increased $766.9 million, or 6%, compared to $11.9 billion at December 31, 2024. The increase was primarily due to an increase of $2.1 billion in demand deposits and $260.7 million in savings deposits, partially offset by a decrease of $1.6 billion in certificates of deposit. As of June 30, 2025, approximately 83% of the total deposits reprice within three months.
Current wording
Deposits. Deposits of $13.9 billion at September 30, 2025 increased $2.0 billion, or 17%, compared to $11.9 billion at December 31, 2024. The increase was primarily due to an increase of $3.5 billion in demand deposits and $346.4 million in savings deposits, partially offset by a decrease of $1.9 billion in certificates of deposit. As of September 30, 2025, approximately 83% of the total deposits reprice within three months.
Previous wording
Core deposits increased by $2.0 billion, or 22%, to $11.4 billion at June 30, 2025 compared to $9.4 billion at December 31, 2024. Core deposits represented 90% of total deposits at June 30, 2025 compared to 79% of total deposits at December 31, 2024.
Current wording
Core deposits increased by $3.4 billion, or 36%, to $12.8 billion at September 30, 2025 compared to $9.4 billion at December 31, 2024. Core deposits represented 92% of total deposits at September 30, 2025 compared to 79% of total deposits at December 31, 2024. The increases were attributable primarily to growth in custodial deposits from warehouse customers as well as strategic initiatives focused on delivering innovative liquidity solutions in expanded markets.
Previous wording
We have decreased our use of brokered deposits by 50%, to $1.3 billion at June 30, 2025 compared to $2.5 billion at December 31, 2024. Brokered deposits represented 10% of total deposits at June 30, 2025 compared to 21% of total deposits at December 31, 2024. As of June 30, 2025, brokered certificates of deposit had a weighted average remaining duration of 48 days.
Current wording
We have decreased our use of brokered deposits by 55%, which totaled $1.1 billion at September 30, 2025 compared to $2.5 billion at December 31, 2024. Brokered deposits represented 8% of total deposits at September 30, 2025 compared to 21% of total deposits at December 31, 2024. As of September 30, 2025, brokered certificates of deposit had a weighted average remaining duration of 49 days.
Previous wording
Compared to December 31, 2024, interest-bearing deposits increased $690.3 million, or 6%, to $12.4 billion at June 30, 2025, and noninterest-bearing deposits increased $76.5 million, or 32%, to $315.5 million at June 30, 2025.
Current wording
Compared to December 31, 2024, interest-bearing deposits increased $1.9 billion, or 16%, to $13.5 billion at September 30, 2025, and noninterest-bearing deposits increased $160.8 million, or 67%, to $399.8 million at September 30, 2025.
Previous wording
Uninsured deposits totaled approximately $3.1 billion as of June 30, 2025, representing 24% of total Bank deposits. Since 2018, the Company has offered its customers an opportunity to insure balances in excess of $250,000 through our insured cash sweep program that extends FDIC protection up to $100 million. The balance of deposits in this program was $1.4 billion and $1.6 billion as of June 30, 2025 and December 31, 2024, respectively.
Current wording
$250,000 through our insured cash sweep program that extends FDIC protection up to $100 million. The balance of deposits in this program was $1.4 billion and $1.6 billion as of September 30, 2025 and December 31, 2024, respectively.
Previous wording
Borrowings. Borrowings of $4.0 billion at June 30, 2025 decreased $376.6 million, or 9%, compared to $4.4 billion at December 31, 2024. The decrease was primarily due to a reduction of $491.4 million in FHLB advances, partially offset by an increase of $125.0 million in the usage of the Federal Reserve’s discount window. The Company primarily utilizes borrowing facilities from the FHLB, the Federal Reserve’s discount window, and AFX, using the most cost-effective options available. SeeNote 10: Borrowings for further information.
Current wording
Borrowings. Borrowings of $2.9 billion at September 30, 2025 decreased $1.5 billion, or 34%, compared to $4.4 billion at December 31, 2024. The decrease was primarily due to a reduction of $1.4 billion in FHLB advances in addition to the increase in core deposits available. The Company primarily utilizes borrowing facilities from the FHLB, the Federal Reserve’s discount window, and AFX, using the most cost-effective options available. SeeNote 10: Borrowings for further information.
Previous wording
The Company continues to have significant borrowing capacity based on available collateral. As of June 30, 2025, unused lines of credit totaled $5.0 billion, compared to $4.3 billion at December 31, 2024. The Company’s ratio of total collateralized borrowing capacity to total assets remained at 46% from December 31, 2024 compared to June 30, 2025.
Current wording
The Company continues to have significant borrowing capacity based on available collateral. As of September 30, 2025, unused lines of credit totaled $5.9 billion, an increase of 37%, compared to $4.3 billion at December 31, 2024. The Company’s ratio of total collateralized borrowing capacity to total assets was 45% at September 30, 2025 compared to 46% at December 31, 2024.
Previous wording
Total Shareholders’ Equity. Total shareholders’ equity of $2.2 billion at June 30, 2025, decreased $58.7 million, or 3%, compared to December 31, 2024. The decrease resulted primarily from the redemption of 6% Series B Preferred Stock for $125.0 million and dividends paid on common and preferred shares of $29.7 million during the period, which were partially offset by net income of $96.2 million. SeeNote 14: Preferred Stockfor more details on the Series B redemption.* *
Current wording
Total Shareholders’ Equity. Total shareholders’ equity of $2.2 billion at September 30, 2025, decreased $17.9 million, or 1%, compared to December 31, 2024. The decrease resulted primarily from the redemption of 6% Series B Preferred Stock for $125.0 million and dividends paid on common and preferred shares of $44.6 million during the period, which were partially offset by net income of $150.9 million. SeeNote 14: Preferred Stockfor more details on the Series B redemption.* *
Previous wording
The allowance for credit losses on loans of $91.8 million, as of June 30, 2025, increased by $7.4 million, or 9%, compared to December 31, 2024. The $7.4 million increase compared to December 31, 2024 was driven by $64.0 million increase in provision expense that was partially offset by $56.6 million in loan charge-offs. The increases in provision expenses and charge-offs compared to the period was primarily associated with estimated declines on multi-family property values, after receiving new appraisals, and the ongoing investigation of borrowers involved in mortgage fraud or suspected fraud. The increases were also attributable to certain types of subordinated loans that the Company no longer offers to borrowers. These subordinated loans have been largely identified and evaluated for potential losses that have either been included in the provision for credit losses as specific reserves or charged off.
Current wording
The allowance for credit losses on loans of $93.3 million, as of September 30, 2025, increased by $8.9 million, or 11%, compared to $84.4 million as of December 31, 2024. The $8.9 million increase compared to December 31,2024 driven by $95.0 million in provision expense that was partially offset by $86.1 million in charge-offs, primarily related to the multi-family portfolio. These changes were primarily associated with declines on multi-family property values, after receiving new appraisals, and the ongoing investigation of borrowers involved in mortgage fraud or suspected fraud. Additionally, the increases were attributable to certain types of subordinated loans that the Company no longer offers to borrowers. These underperforming loans have been largely identified and evaluated for potential losses that have either been included in the provision for credit losses as specific reserves or charged off.
Previous wording
During the three months ended June 30, 2025 there were $46.1 million of charge-offs and no recoveries, compared to $3.5 million of charge-offs and $15,000 recoveries for the three months ended June 30, 2024.
Current wording
During the three months ended September 30, 2025 there were $29.5 million of charge-offs for nine relationships, primarily in the multi-family loan portfolio, and $23,000 in recoveries, compared to $2.1 million of charge-offs and $7,000 recoveries for the three months ended September 30, 2024.
Previous wording
For the six months ended June 30, 2025, there were $56.6 million of charge-offs and $28,000 of recoveries, compared to $4.4 million of charge-offs and $16,000 of recoveries for the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2025, there were $86.1 million of charge-offs and $51,000 of recoveries, compared to $6.4 million of charge-offs and $23,000 of recoveries for the nine months ended September 30, 2024.
Previous wording
Loans receivable classified as Special Mention totaled $171.5 million at June 30, 2025, compared to $380.0 million at December 31, 2024 and $244.0 million at June 30, 2024. These declines reinforce the view that the frequency of migration to criticized status has subsided.
Current wording
Loans receivable classified as Special Mention totaled $155.7 million at September 30, 2025, declined $224.3 million, or 59%, compared to $380.0 million at December 31, 2024 and declined by $195.7 million, or 56%, compared to $351.4 million at September 30, 2024. These declines reinforce the view that the frequency of migration to criticized status would subside, driven by favorable market conditions and the Company’s efforts with proactive portfolio management.
Previous wording
As of June 30, 2025, all substandard loans have been evaluated for credit losses and these loans have specific reserves of $30.8 million, of which $9.9 million was added during the three months ended June 30, 2025, net of charge-offs. The Company believes that its loan portfolio remains well collateralized.
Current wording
As of September 30, 2025, all Substandard loans have been evaluated for impairment and these loans have specific reserves of $31.1 million, of which $0.3 million was added during the three months ended September 30,2025, net of charge-offs. The Company believes that the remaining loans are well collateralized.
Previous wording
Total nonperforming loans (nonaccrual and greater than 90 days past due but still accruing) were $251.5 million, or 2.39%, of total loans receivable at June 30, 2025, compared to $279.7 million, or 2.68%, of total loans at December 31, 2024 and $143.5 million, or 1.30%, at June 30,2024. After six months of consecutive loan performance, the loans are placed back on accrual status.
Current wording
Total nonperforming loans (nonaccrual and greater than 90 days past due but still accruing) were $298.3 million, or 2.81%, of total loans receivable at September 30, 2025, compared to $279.7 million, or 2.68%, of total loans at December 31, 2024 and $210.9 million, or 2.04%, at September 30,2024. After six months of consecutive loan performance, the loans are placed back on accrual status.
Previous wording
Total loans receivable greater than 30 days past due were $279.0 million at June 30, 2025, $292.3 million at December 31, 2024, and $234.8 million at June 30,2024.
Current wording
Total loans receivable greater than 30 days past due were $324.6 million at September 30, 2025, $292.3 million at December 31, 2024, and $257.5 million at September 30,2024. Of the $324.6 million in delinquent loans, $45.7 million are partially protected under credit risk transfer transactions.
Previous wording
As a percentage of nonperforming loans, the ACL-Loans was 37% at June 30, 2025 compared to 30% at December 31, 2024 and 56% at June 30, 2024. The changes compared to both periods were primarily due to a decrease in nonperforming loans and an increase in ACL-Loans.
Current wording
As a percentage of nonperforming loans, the ACL-Loans was 31% at September 30, 2025 compared to 30% at December 31, 2024 and 40% at September 30, 2024. The change compared to September 30, 2024, was primarily due to an increase in nonperforming loans.
Previous wording
The Company has been making additional efforts to reduce its credit risk through loan sale and securitization activities since 2019. In March of 2023, as well as March and December of 2024, the Company strategically executed credit protection arrangements through a credit linked note and credit default swaps. The Company also upsized an existing credit default swap in June 2025 by $800.0 million. These credit protection arrangements totaled $3.7 billion in loans to reduce risk of losses, with incremental coverage ranging from 13-14% of the unpaid principal balances for each arrangement. Despite having credit protection on these loans, the Company also continues to carry an allowance for credit losses on loans held for investment. As of June 30, 2025, the balance of loans subject to credit protection arrangements was $2.8 billion, compared to $2.3 billion as of December 31, 2024. For additional information seeNote 11: Derivative Financial Instrumentsand the Company’s 2024 Annual Report on Form 10–K
Current wording
The Company has been making additional efforts to reduce its credit risk through loan sale and securitization activities since 2019. Since 2023, the Company has strategically executed several credit protection arrangements through a credit linked note and credit default swaps. At their inception, these credit protection arrangements addressed $4.2 billion in loans to reduce risk of losses, with coverage ranging from 13-15% of the unpaid principal balances for each arrangement. Despite having credit protection on these loans, the Company also continues to carry an allowance for credit losses on loans held for investment. As of September 30, 2025, the balance of loans subject to credit protection arrangements was $2.4 billion, compared to $2.3 billion as of December 31, 2024. For additional information seeNote 11: Derivative Financial Instrumentsand the Company’s 2024 Annual Report on Form 10–K
Previous wording
Net Interest Income. Net interest income of $128.7 million for the three months ended June 30, 2025 increased $0.6 million, compared with $128.1 million for the three months ended June 30, 2024. The increase reflected lower interest expense on deposits that was partially offset by lower interest income and higher interest expense on borrowings.
Current wording
Net Interest Income. Net interest income of $128.1 million for the three months ended September 30, 2025 decreased $4.8 million, compared with the three months ended September 30, 2024. The decrease reflected lower interest income partially offset by lower interest expense on deposits and borrowings.
Previous wording
The interest rate spread of 2.33% for the three months ended June 30, 2025 decreased 12 basis points compared to 2.45% for the three months ended June 30, 2024. Our net interest margin decreased 16 basis points, to 2.83% for the three months ended June 30, 2025 compared to 2.99% for the three months ended June 30,2024. The margin was negatively impacted by a significant shift in business mix, as highly profitable but lower-margin loans held for sale balances, consisting of primarily warehouse loans, grew by $622.7 million, or 18%, and warehouse repurchase agreements grew by $473.8 million, or 35%, while other higher-margin loans receivable balances contracted by a net of $964.1 million.
Current wording
The interest rate spread of 2.33% for the three months ended September 30, 2025 decreased 10 basis points compared to 2.43% for the three months ended September 30, 2024. Our net interest margin decreased 17 basis points, to 2.82% for the three months ended September 30, 2025 compared to 2.99% for the three months ended September 30,2024. The margin was negatively impacted by a significant shift in business mix, as highly profitable but lower-margin loans held for sale balances, consisting of primarily warehouse loans, grew by $321.1 million, or 8%, and warehouse repurchase agreements grew by $432.5 million, or 36%, while other higher-margin loans receivable balances, such as the healthcare financing portfolio, contracted by a net of $170.3 million.
Previous wording
Interest expense on deposits of $131.4 million decreased $48.3 million, or 27%, for the three months ended June 30, 2025, compared to $179.7 million for the three months ended June 30,2024. The decrease primarily reflected lower average balances at lower average rates on certificates of deposit.
Current wording
Interest Income. Interest income of $301.8 million for the three months ended September 30, 2025 decreased $37.1 million, or 11%, compared with $338.9 million for the three months ended September 30,2024. The decrease primarily reflected lower average yields on loans and loans held for sale, primarily in the warehouse portfolio.
Previous wording
Interest income of $255.6 million on loans and loans held for sale for the three months ended June 30, 2025, decreased $28.8 million, or 10%, compared to $284.4 million for the three months ended June 30, 2024. The average loan balance of $14.8 billion for the three months ended June 30, 2025 increased $479.0 million, or 3%, compared to $14.3 billion for the three months ended June 30, 2024. The average yield on loans and loans held for sale decreased 105 basis points, to 6.92% for the three months ended June 30, 2025, compared to 7.97% for the three months ended June 30, 2024.
Current wording
Interest income of $254.1 million on loans and loans held for sale for the three months ended September 30, 2025, decreased $36.2 million, or 12%, compared to $290.3 million for the three months ended September 30, 2024. The average loan balance of $14.7 billion for the three months ended September 30, 2025 increased $50.8 million compared to $14.6 billion for the three months ended September 30, 2024. The average yield on loans and loans held for sale decreased 103 basis points, to 6.88% for the three months ended September 30, 2025, compared to 7.91% for the three months ended September 30, 2024.
Previous wording
Interest income of $5.3 million on mortgage loans in process of securitization for the three months ended June 30, 2025, increased $2.3 million, or 74%, compared to $3.0 million for the three months ended June 30, 2024. The average balance of $376.9 million increased $142.2 million, or 61%, compared to $234.7 million for the three months ended June 30, 2024. The average yield increased 42 basis points, to 5.64% for the three months ended June 30, 2025, compared to 5.22% for the three months ended June 30, 2024. The increase in average balance was primarily due to a higher origination volume of loans pending settlement for sale on the secondary market.
Current wording
Interest income of $5.3 million on mortgage loans in process of securitization for the three months ended September 30, 2025, increased $1.2 million, or 31%, compared to $4.1 million for the three months ended September 30, 2024. The average balance of $395.4 million increased $87.0 million, or 28%, compared to $308.4 million for the three months ended September 30, 2024. The average yield increased 9 basis points, to 5.33% for the three months ended September 30, 2025, compared to 5.24% for the three months ended September 30, 2024. The increase in average balance was primarily due to a higher origination volume of loans pending settlement for sale on the secondary market.
Previous wording
Interest Expense. Total interest expense of $175.7 million for the three months ended June 30, 2025, decreased $24.5 million, or 12%, compared to $200.2 million for the three months ended June 30,2024. The decrease reflected lower average balances at lower average rates on certificates of deposit that were partially offset by higher average balances at lower average rates on borrowings.
Current wording
Interest Expense. Total interest expense of $173.7 million for the three months ended September 30, 2025, decreased $32.4 million, or 16%, compared to $206.1 million for the three months ended September 30,2024. The decrease reflected lower average balances at lower average rates on certificates of deposit, which were partially offset by higher average balances at lower average rates on interest-bearing checking accounts.
Previous wording
Interest expense of $60.8 million on interest-bearing checking accounts for the three months ended June 30, 2025, increased $2.7 million, or 5%, compared to $58.1 million for the three months ended June 30, 2024. The increase reflected higher average balances at lower rates. The average balance of $6.2 billion for the three months ended June 30, 2025, increased $1.2 billion, or 25%, compared to the three months ended June 30, 2024. The average interest rate decreased 78 basis points to 3.96% for the three months ended June 30, 2025, compared to 4.74% for three months ended June 30, 2024.
Current wording
Interest expense of $75.4 million on interest-bearing checking accounts for the three months ended September 30, 2025, increased $12.8 million, or 20%, compared to $62.6 million for the three months ended September 30, 2024. The increase reflected higher average balances at lower rates. The average balance of $7.5 billion for the three months ended September 30, 2025, increased $2.2 billion, or 41%, compared to $5.3 billion for the three months ended September 30, 2024. The average interest rate decreased 68 basis points to 4.02% for the three months ended September 30, 2025, compared to 4.70% for three months ended September 30, 2024.
Showing the first 40 of 104 pairs. Open the source sections for the rest.
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Current report — wording carried from elsewhere
September 30, 2025 compared to the same period in 2024, according to an estimate of industry volume by the Mortgage Bankers Association.
Current report — wording carried from elsewhere
had $598.0 million of cash and cash equivalents, other assets of $543.5 million, which primarily related to low-income housing tax credits, and $414.8 million of mortgage loans in process of securitization that represent pre-sold multi-family rental real estate loan originations in primarily Ginnie Mae, Fannie Mae, and Freddie Mac mortgage-backed securities pending settlements that typically occur within 30 days. Servicing rights at September 30, 2025 were $213.2 million based on the fair value of the loan servicing, which primarily includes Ginnie Mae multi-family servicing rights with 10-year call protection.
Current report — wording carried from elsewhere
Uninsured deposits totaled approximately $3.7 billion as of September 30, 2025, representing 27% of total Bank deposits. Since 2018, the Company has offered its customers an opportunity to insure balances in excess of
Current report — wording carried from elsewhere
Loan servicing fees included a $2.1 million positive fair market value adjustment to servicing rights for the three months ended September 30, 2025, compared to a $6.7 million negative fair market value adjustment to servicing rights for the three months ended September 30, 2024.
Current report — wording carried from elsewhere
The ACL-Loans was $93.3 million, or 0.88% of total loans, at September 30, 2025, compared to $84.4 million, or 0.81% of total loans, at December 31, 2024, and $84.5 million, or 0.82%, at September 30, 2024. The increase compared to December 31, 2024 was driven by a $95.0 million in provision expense, primarily related to the multi-family portfolio, which was offset by $86.1 million in charge-offs. The increase compared to September 30, 2024 was primarily related an increase in provision expense for loans in the multi-family portfolio, which were partially offset by charge-offs. Additional details are provided in the Asset Quality portion of theComparison of Financial Conditionat September 30, 2025 and December 31, 2024 and inNote 4: Loans and Allowance for Credit Losses on Loans.
Current report — wording carried from elsewhere
should be substantially equal and offsetting. For the nine months ended September 30, 2025 there was a $5.3 million positive fair value adjustment on the securities that were offset by a $5.3 million negative fair value adjustment on the put options, hence having no net gain or loss recognized. Also seeNote 2: Investment Securities, Note 11: Derivative Financial Instruments, andNote 12: Disclosures about Fair Value of Assets and Liabilities.
Current report — wording carried from elsewhere
of total securities available for sale, reflecting our interest rate risk policy of maintaining short duration on assets and liabilities.
Current report — wording carried from elsewhere
partially offset by net income of $150.9 million. SeeNote 14: Preferred Stock for more details on the Series B redemption.
Current report — wording carried from elsewhere
Quantitative measures established by regulation to ensure capital adequacy require the Company and Merchants Bank to maintain minimum amounts and ratios (set forth in the table above). Management believes, as of
Rearranged previous paragraphs (9)
Previous report — wording carried elsewhere
$391.8 million in calls, maturities, repayments and other adjustments, partially offset by purchases of $348.1 million during the period.
Previous report — wording carried elsewhere
Interest Income. Interest income of $591.6 million for the six months ended June 30, 2025 decreased $50.8 million, or 8%, compared to $642.4 million for the six months ended June 30,2024. This decrease was primarily attributable to lower average yields on higher average balances on loans and loans held for sale, partially offset by higher average balances at lower average yields on securities held to maturity.
Previous report — wording carried elsewhere
Noninterest expense of $139.0 million for the six months ended June 30, 2025 increased $39.7 million, or 40%, compared to $99.3 million for the six months ended June 30, 2024. The increase was due primarily to a due to a $22.0 million, or 38%, increase in salaries and employee benefits to support business growth, including $8.3 million for expenses associated with the addition of production staff, which is expected to continue to elevate production, gain on sale, and expenses in future quarters as well. A significant contributor to the increased expenses during the period was a $7.8 million rise in other expenses, primarily related to taxes, insurance, receiver expenses, and legal fees tied to preserving collateral for nonperforming loans. Additionally, noninterest expenses rose due to a $6.3 million increase in credit risk transfer premium expenses, stemming from credit default swaps executed in March and December 2024, and a swap upsize in June 2025. Deposit insurance expenses also grew by $3.7 million, or 34%, driven by a rise in underperforming assets and overall asset growth.
Previous report — wording carried elsewhere
business. The Banking segment has a well-diversified customer and borrower base and has experienced significant growth over the past three years.
Previous report — wording carried elsewhere
associated with the addition of production staff, who are expected to elevate production, gain on sale, and expenses in future quarters as well.
Previous report — wording carried elsewhere
that we will have sufficient funds available to meet our current loan origination commitments. Additionally, the Company’s business model is designed to continuously sell a significant portion of its loans, which provides flexibility in managing its liquidity.
Previous report — wording carried elsewhere
the liquidation preference, plus any declared and unpaid dividends (without regard to any undeclared dividends) to, but excluding, the date of redemption.
Previous report — wording carried elsewhere
under the MOU, if the Bank’s capital ratios fall below the minimums described above, the Bank may not pay dividends without the FDIC and DFI’s prior consent.
Previous report — wording carried elsewhere
We use two approaches to model interest rate risk: Net Interest Income at Risk (NII at Risk) and Economic Value of Equity (“EVE”). Under NII at Risk, net interest income is modeled utilizing various assumptions for assets,