LOAN SALES AND SECURITIZATIONS (Tables)
|
12 Months Ended |
Dec. 31, 2015 |
|---|
| Transfers and Servicing [Abstract] |
|
| Schedule of activity relating to loans securitized sold with servicing rights |
The following table summarizes activity relating to residential mortgage loans sold with servicing retained for the years ended December 31, 2015, 2014, and 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
(dollar amounts in thousands) |
2015 |
|
2014 |
|
2013 |
Residential mortgage loans sold with servicing retained |
$ |
3,322,723 |
|
|
$ |
2,330,060 |
|
|
$ |
3,221,239 |
|
Pretax gains resulting from above loan sales (1) |
83,148 |
|
|
57,590 |
|
|
102,935 |
|
|
|
(1) |
Recorded in mortgage banking income. |
The following table summarizes activity relating to automobile loans sold and/or securitized with servicing retained for the years ended December 31, 2015, 2014, and 2013:
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
(dollar amounts in thousands) |
2015 |
|
2014 (1) |
|
2013 (1) |
Automobile loans securitized with servicing retained |
$ |
750,000 |
|
|
— |
|
|
— |
|
Pretax gains resulting from above loan sales (2) |
5,333 |
|
|
— |
|
|
— |
|
|
|
(1) |
Huntington did not sell or securitize any automobile loans in 2014 or 2013. |
|
|
(2) |
Recorded in gain on sale of loans |
The following table summarizes activity relating to SBA loans sold with servicing retained for the years ended December 31, 2015, 2014, and 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
(dollar amounts in thousands) |
2015 |
|
2014 |
|
2013 |
SBA loans sold with servicing retained |
$ |
232,848 |
|
|
$ |
214,760 |
|
|
$ |
178,874 |
|
Pretax gains resulting from above loan sales (1) |
18,626 |
|
|
24,579 |
|
|
19,556 |
|
|
|
(1) |
Recorded in gain on sale of loans. |
|
| Servicing asset at fair value |
The following tables summarize the changes in MSRs recorded using either the fair value method or the amortization method for the years ended December 31, 2015 and 2014:
Fair Value Method
|
|
|
|
|
|
|
|
|
(dollar amounts in thousands) |
2015 |
|
2014 |
Fair value, beginning of year |
$ |
22,786 |
|
|
$ |
34,236 |
|
Change in fair value during the period due to: |
|
|
|
Time decay (1) |
(1,295 |
) |
|
(2,232 |
) |
Payoffs (2) |
(3,031 |
) |
|
(5,814 |
) |
Changes in valuation inputs or assumptions (3) |
(875 |
) |
|
(3,404 |
) |
Fair value, end of year |
$ |
17,585 |
|
|
$ |
22,786 |
|
Weighted-average contractual life (years) |
4.6 |
|
|
4.6 |
|
|
|
(1) |
Represents decrease in value due to passage of time, including the impact from both regularly scheduled loan principal payments and partial loan paydowns. |
|
|
(2) |
Represents decrease in value associated with loans that paid off during the period. |
|
|
(3) |
Represents change in value resulting primarily from market-driven changes in interest rates and prepayment speeds. |
|
| Servicing asset at amortized cost |
Changes in the carrying value of automobile loan servicing rights for the years ended December 31, 2015, and 2014, and the fair value at the end of each period were as follows:
|
|
|
|
|
|
|
|
|
(dollar amounts in thousands) |
2015 |
|
2014 |
Carrying value, beginning of year |
$ |
6,898 |
|
|
$ |
17,672 |
|
New servicing assets created |
11,180 |
|
|
— |
|
Amortization and other |
(9,307 |
) |
|
(10,774 |
) |
Carrying value, end of year |
$ |
8,771 |
|
|
$ |
6,898 |
|
Fair value, end of year |
$ |
9,127 |
|
|
$ |
6,948 |
|
Weighted-average contractual life (years) |
3.2 |
|
|
2.6 |
|
Amortization Method
|
|
|
|
|
|
|
|
|
(dollar amounts in thousands) |
2015 |
|
2014 |
Carrying value, beginning of year |
$ |
132,812 |
|
|
$ |
128,064 |
|
New servicing assets created |
35,407 |
|
|
24,629 |
|
Servicing assets acquired |
— |
|
|
3,505 |
|
Impairment recovery (charge) |
(2,732 |
) |
|
(7,330 |
) |
Amortization and other |
(22,354 |
) |
|
(16,056 |
) |
Carrying value, end of year |
$ |
143,133 |
|
|
$ |
132,812 |
|
Fair value, end of year |
$ |
143,435 |
|
|
$ |
133,049 |
|
Weighted-average contractual life (years) |
5.9 |
|
|
5.9 |
|
The following tables summarize the changes in the carrying value of the servicing asset for the years ended December 31, 2015, and 2014:
|
|
|
|
|
|
|
|
|
(dollar amounts in thousands) |
2015 |
|
2014 |
Carrying value, beginning of year |
$ |
18,536 |
|
|
$ |
16,865 |
|
New servicing assets created |
8,012 |
|
|
7,269 |
|
Amortization and other |
(6,801 |
) |
|
(5,598 |
) |
Carrying value, end of year |
$ |
19,747 |
|
|
$ |
18,536 |
|
Fair value, end of year |
$ |
22,649 |
|
|
$ |
20,495 |
|
Weighted-average contractual life (years) |
3.3 |
|
|
3.5 |
|
|
| Summary of key assumptions and the sensitivity analysis of servicing rights |
For MSRs under the fair value method, a summary of key assumptions and the sensitivity of the MSR value to changes in these assumptions at December 31, 2015, and 2014 follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
December 31, 2014 |
|
|
|
Decline in fair value due to |
|
|
|
Decline in fair value due to |
(dollar amounts in thousands) |
Actual |
|
10%
adverse
change
|
|
20%
adverse
change
|
|
Actual |
|
10%
adverse
change
|
|
20%
adverse
change
|
Constant prepayment rate (annualized)
|
14.70 |
% |
|
$ |
(864 |
) |
|
$ |
(1,653 |
) |
|
15.60 |
% |
|
$ |
(1,176 |
) |
|
$ |
(2,248 |
) |
Spread over forward interest rate swap rates |
539 bps |
|
|
(559 |
) |
|
(1,083 |
) |
|
546 bps |
|
|
(699 |
) |
|
(1,355 |
) |
For MSRs under the amortization method, a summary of key assumptions and the sensitivity of the MSR value to changes in these assumptions at December 31, 2015, and 2014 follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
December 31, 2014 |
|
|
|
Decline in fair value due to |
|
|
|
Decline in fair value due to |
(dollar amounts in thousands) |
Actual |
|
10%
adverse
change
|
|
20%
adverse
change
|
|
Actual |
|
10%
adverse
change
|
|
20%
adverse
change
|
Constant prepayment rate (annualized)
|
11.10 |
% |
|
$ |
(5,543 |
) |
|
$ |
(10,648 |
) |
|
11.40 |
% |
|
$ |
(5,289 |
) |
|
$ |
(10,164 |
) |
Spread over forward interest rate swap rates |
875 bps |
|
|
(4,662 |
) |
|
(9,017 |
) |
|
856 bps |
|
|
(4,343 |
) |
|
(8,403 |
) |
A summary of key assumptions and the sensitivity of the SBA loan servicing rights value to changes in these assumptions at December 31, 2015, and 2014 follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
December 31, 2014 |
|
|
|
Decline in fair value due to |
|
|
|
Decline in fair value due to |
(dollar amounts in thousands) |
Actual |
|
10%
adverse
change
|
|
20%
adverse
change
|
|
Actual |
|
10%
adverse
change
|
|
20%
adverse
change
|
Constant prepayment rate (annualized)
|
7.60 |
% |
|
$ |
(313 |
) |
|
$ |
(622 |
) |
|
5.60 |
% |
|
$ |
(211 |
) |
|
$ |
(419 |
) |
Discount rate |
15.00 |
|
|
(610 |
) |
|
(1,194 |
) |
|
15.00 |
|
|
(563 |
) |
|
(1,102 |
) |
A summary of key assumptions and the sensitivity of the automobile loan servicing rights value to changes in these assumptions at December 31, 2015, and 2014 follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
December 31, 2014 |
|
|
|
Decline in fair value due to |
|
|
|
Decline in fair value due to |
(dollar amounts in thousands) |
Actual |
|
10%
adverse
change
|
|
20%
adverse
change
|
|
Actual |
|
10%
adverse
change
|
|
20%
adverse
change
|
Constant prepayment rate (annualized)
|
18.36 |
% |
|
$ |
(500 |
) |
|
$ |
(895 |
) |
|
14.62 |
% |
|
$ |
(305 |
) |
|
$ |
(496 |
) |
Spread over forward interest rate swap rates |
500 bps |
|
|
(10 |
) |
|
(19 |
) |
|
500 bps |
|
|
(2 |
) |
|
(4 |
) |
|