LOAN SALES AND SECURITIZATIONS (Tables)
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9 Months Ended |
Sep. 30, 2017 |
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| Transfers and Servicing [Abstract] |
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| Summarizes activity relating to loans securitized sold with servicing retained |
The following table summarizes activity relating to SBA loans sold with servicing retained for the three-month and nine-month periods ended September 30, 2017 and 2016.
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2017 |
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2016 |
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2017 |
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2016 |
SBA loans sold with servicing retained |
$ |
107,259 |
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$ |
62,803 |
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$ |
272,635 |
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$ |
167,321 |
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Pretax gains resulting from above loan sales (1) |
8,508 |
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4,679 |
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21,435 |
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12,862 |
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(1) |
Recorded in gain on sale of loans. |
The following table summarizes activity relating to residential mortgage loans sold with servicing retained for the three-month and nine-month periods ended September 30, 2017 and 2016.
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2017 |
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2016 |
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2017 |
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2016 |
Residential mortgage loans sold with servicing retained |
$ |
1,178,955 |
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$ |
1,204,547 |
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$ |
2,824,707 |
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$ |
2,552,602 |
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Pretax gains resulting from above loan sales (1) |
26,880 |
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32,073 |
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66,014 |
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64,804 |
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(1) |
Recorded in mortgage banking income. |
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| Summarizes activity relating to loans sold with servicing retained using the fair value method |
The following tables summarize the changes in MSRs recorded using either the fair value method or the amortization method for the three-month and nine-month periods ended September 30, 2017 and 2016.
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Fair Value Method: |
Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2017 |
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2016 |
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2017 |
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2016 |
Fair value, beginning of period |
$ |
12,528 |
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$ |
13,105 |
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$ |
13,747 |
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$ |
17,585 |
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Change in fair value during the period due to: |
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Time decay (1) |
(202 |
) |
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(217 |
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(649 |
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(734 |
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Payoffs (2) |
(295 |
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(423 |
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(876 |
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(1,392 |
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Changes in valuation inputs or assumptions (3) |
(278 |
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(37 |
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(469 |
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(3,031 |
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Fair value, end of period: |
$ |
11,753 |
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$ |
12,428 |
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$ |
11,753 |
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$ |
12,428 |
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Weighted-average life (years) |
5.5 |
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5.1 |
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5.5 |
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5.1 |
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(1) |
Represents decrease in value due to passage of time, including the impact from both regularly scheduled loan principal payments and partial loan paydowns. |
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(2) |
Represents decrease in value associated with loans that paid off during the period. |
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(3) |
Represents change in value resulting primarily from market-driven changes in interest rates and prepayment speeds. |
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| Summarizes activity relating to loans sold with servicing retained using the amortization method |
Changes in the carrying value of automobile loan servicing rights for the three-month and nine-month periods ended September 30, 2017 and 2016, and the fair value at the end of each period were as shown in the table below.
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2017 |
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2016 |
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2017 |
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2016 |
Carrying value, beginning of period |
$ |
12,524 |
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$ |
5,458 |
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$ |
18,285 |
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$ |
8,771 |
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Amortization and other |
(2,338 |
) |
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(1,087 |
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(8,099 |
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(4,400 |
) |
Carrying value, end of period |
$ |
10,186 |
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$ |
4,371 |
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$ |
10,186 |
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$ |
4,371 |
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Fair value, end of period |
$ |
10,398 |
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$ |
4,366 |
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$ |
10,398 |
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$ |
4,366 |
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Weighted-average contractual life (years) |
3.7 |
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3.2 |
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3.7 |
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3.2 |
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The following tables summarize the changes in the carrying value of the servicing asset for the three-month and nine-month periods ended September 30, 2017 and 2016. The fair value at the end of each period is shown in the table below.
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2017 |
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2016 |
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2017 |
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2016 |
Carrying value, beginning of period |
$ |
23,113 |
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$ |
19,612 |
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$ |
21,080 |
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$ |
19,747 |
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New servicing assets created |
3,591 |
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1,879 |
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9,187 |
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5,259 |
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Amortization and other |
(1,923 |
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(1,745 |
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(5,486 |
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(5,260 |
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Carrying value, end of period |
$ |
24,781 |
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$ |
19,746 |
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$ |
24,781 |
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$ |
19,746 |
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Fair value, end of period |
$ |
28,822 |
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$ |
24,065 |
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$ |
28,822 |
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$ |
24,065 |
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Weighted-average life (years) |
3.3 |
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3.3 |
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3.3 |
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3.3 |
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Amortization Method: |
Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2017 |
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2016 |
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2017 |
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2016 |
Carrying value, beginning of period |
$ |
176,491 |
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$ |
121,292 |
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$ |
172,466 |
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$ |
143,133 |
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New servicing assets created |
12,841 |
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12,434 |
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30,694 |
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25,820 |
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Servicing assets acquired |
— |
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15,317 |
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— |
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15,317 |
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Impairment (charge) / recovery |
688 |
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2,543 |
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(318 |
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(21,093 |
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Amortization and other |
(6,995 |
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(7,194 |
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(19,817 |
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(18,785 |
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Carrying value, end of period |
$ |
183,025 |
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$ |
144,392 |
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$ |
183,025 |
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$ |
144,392 |
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Fair value, end of period |
$ |
183,583 |
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$ |
144,623 |
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$ |
183,583 |
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$ |
144,623 |
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Weighted-average life (years) |
7.0 |
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6.1 |
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7.0 |
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6.1 |
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| Summary of key assumptions and the sensitivity of the servicing rights value to changes in the assumptions |
A summary of key assumptions and the sensitivity of the SBA loan servicing rights value to changes in these assumptions at September 30, 2017 and December 31, 2016 is shown in the table below.
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September 30, 2017 |
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December 31, 2016 |
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Decline in fair value due to |
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Decline in fair value due to |
(dollar amounts in thousands) |
Actual |
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10%
adverse
change
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20%
adverse
change
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Actual |
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10%
adverse
change
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20%
adverse
change
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Constant prepayment rate (annualized)
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7.50 |
% |
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$ |
(385 |
) |
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$ |
(764 |
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7.40 |
% |
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$ |
(324 |
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$ |
(644 |
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Discount rate |
15.00 |
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(774 |
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(1,516 |
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15.00 |
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(1,270 |
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(1,870 |
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A summary of key assumptions and the sensitivity of the automobile loan servicing rights value to changes in these assumptions at September 30, 2017 and December 31, 2016 is shown in the table below.
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September 30, 2017 |
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December 31, 2016 |
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Decline in fair value due to |
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Decline in fair value due to |
(dollar amounts in thousands) |
Actual |
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10%
adverse
change |
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20%
adverse
change |
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Actual |
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10%
adverse
change |
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20%
adverse
change |
Constant prepayment rate (annualized)
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23.66 |
% |
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$ |
(586 |
) |
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$ |
(1,112 |
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19.98 |
% |
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$ |
(1,047 |
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$ |
(2,026 |
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Spread over forward interest rate swap rates |
500 |
bps |
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(14 |
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(27 |
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500 |
bps |
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(26 |
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(53 |
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For MSRs under the fair value method, a summary of key assumptions and the sensitivity of the MSR value at September 30, 2017 and December 31, 2016, to changes in these assumptions is shown in the table below.
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September 30, 2017 |
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December 31, 2016 |
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Decline in fair value due to |
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Decline in fair value due to |
(dollar amounts in thousands) |
Actual |
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10%
adverse
change
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20%
adverse
change
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Actual |
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10%
adverse
change
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20%
adverse
change
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Constant prepayment rate (annualized)
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12.10 |
% |
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$ |
(472 |
) |
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$ |
(910 |
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10.90 |
% |
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$ |
(501 |
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$ |
(970 |
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Spread over forward interest rate swap rates |
813 |
bps |
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(436 |
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(823 |
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536 |
bps |
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(454 |
) |
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(879 |
) |
For MSRs under the amortization method, a summary of key assumptions and the sensitivity of the MSR value at September 30, 2017 and December 31, 2016, to changes in these assumptions is shown in the table below.
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September 30, 2017 |
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December 31, 2016 |
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Decline in fair value due to |
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Decline in fair value due to |
(dollar amounts in thousands) |
Actual |
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10%
adverse
change |
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20%
adverse
change |
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Actual |
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10%
adverse
change |
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20%
adverse
change |
Constant prepayment rate (annualized)
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8.40 |
% |
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$ |
(5,172 |
) |
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$ |
(10,038 |
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7.80 |
% |
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$ |
(4,510 |
) |
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$ |
(8,763 |
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Spread over forward interest rate swap rates |
1,041 |
bps |
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(6,866 |
) |
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(12,934 |
) |
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1,173 |
bps |
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(5,259 |
) |
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(10,195 |
) |
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