DEPOSITS |
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Sep. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEPOSITS | DEPOSITS Deposits are summarized as follows:
Mortgage Warehouse Deposits The Company's mortgage warehouse business is more than self-funded due to the noninterest bearing servicing deposits of its clients. The balance of such deposits was $2,639,810,000 and $668,288,000 at September 30, 2026 and December 31, 2025, respectively. Given their legal form, these deposits are classified as noninterest-bearing demand deposits on the Company's balance sheets. Despite their classification, many of these deposits are not truly free of cost as the Company compensates its clients for these balances in the form of an earnings interest rebate rather than deposit interest. As a result, such noninterest bearing deposits first decrease the Company's loan yield before increasing its deposit rates. Some clients hold significantly higher deposit balances than loan balances. As a result, in some cases, the Company has recently been paying out more in rebates than it earns in interest on a given client’s loans. In those cases, the Company records excess rebate as deposit interest expense. Whether recorded as interest expense or an offset to interest income, the effect on net interest income and net income is the same: these are profitable funds as they displace more expensive wholesale funding and can be invested risk-free above their cost. During the three months ended September 30, 2026 and 2025, deposit interest expense recognized on these deposits was $15,710,000 and $0, respectively. During the nine months ended September 30, 2026 and 2025, deposit interest expense recognized on these deposits was $28,052,000 and $0, respectively.
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