LOAN SALES AND SECURITIZATIONS (Tables)
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3 Months Ended |
Mar. 31, 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 periods ended March 31, 2017 and 2016:
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Three months ended
March 31, |
(dollar amounts in thousands) |
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2017 |
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2016 |
SBA loans sold with servicing retained |
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$ |
77,672 |
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$ |
45,889 |
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Pretax gains resulting from above loan sales (1) |
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5,818 |
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3,521 |
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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 periods ended March 31, 2017 and 2016:
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Three months ended
March 31, |
(dollar amounts in thousands) |
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2017 |
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2016 |
Residential mortgage loans sold with servicing retained |
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$ |
845,415 |
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$ |
632,466 |
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Pretax gains resulting from above loan sales (1) |
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22,190 |
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14,113 |
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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 periods ended March 31, 2017 and 2016:
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Fair Value Method: |
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Three months ended
March 31, |
(dollar amounts in thousands) |
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2017 |
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2016 |
Fair value, beginning of period |
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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) |
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(231 |
) |
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(273 |
) |
Payoffs (2) |
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(364 |
) |
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(504 |
) |
Changes in valuation inputs or assumptions (3) |
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155 |
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(1,989 |
) |
Fair value, end of period: |
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$ |
13,307 |
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$ |
14,819 |
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Weighted-average life (years) |
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5.6 |
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5.2 |
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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 |
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Amortization Method: |
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Three months ended
March 31, |
(dollar amounts in thousands) |
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2017 |
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2016 |
Carrying value, beginning of period |
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$ |
172,466 |
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$ |
143,133 |
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New servicing assets created |
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9,635 |
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6,109 |
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Impairment (charge) / recovery |
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1,800 |
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(16,340 |
) |
Amortization and other |
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(6,089 |
) |
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(5,627 |
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Carrying value, end of period |
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$ |
177,812 |
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$ |
127,275 |
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Fair value, end of period |
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$ |
178,581 |
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$ |
127,516 |
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Weighted-average life (years) |
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7.1 |
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6.5 |
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Changes in the carrying value of automobile loan servicing rights for the three-month periods ended March 31, 2017 and 2016, and the fair value at the end of each period were as follows:
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Three months ended
March 31, |
(dollar amounts in thousands) |
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2017 |
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2016 |
Carrying value, beginning of period |
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$ |
18,285 |
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$ |
8,771 |
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New servicing assets created |
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— |
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— |
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Amortization and other |
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(3,126 |
) |
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(1,742 |
) |
Carrying value, end of period |
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$ |
15,159 |
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$ |
7,029 |
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Fair value, end of period |
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$ |
15,278 |
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$ |
7,250 |
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Weighted-average life (years) |
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4.0 |
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3.3 |
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The following tables summarize the changes in the carrying value of the servicing asset for the three-month periods ended March 31, 2017 and 2016, and the fair value at the end of each period were as follows:
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Three months ended
March 31, |
(dollar amounts in thousands) |
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2017 |
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2016 |
Carrying value, beginning of period |
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$ |
21,080 |
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$ |
19,747 |
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New servicing assets created |
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1,475 |
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1,511 |
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Amortization and other |
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(1,156 |
) |
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(1,733 |
) |
Carrying value, end of period |
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$ |
21,399 |
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$ |
19,525 |
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Fair value, end of period |
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$ |
25,857 |
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$ |
23,048 |
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Weighted-average life (years) |
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3.3 |
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3.3 |
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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 automobile loan servicing rights value to changes in these assumptions at March 31, 2017 and December 31, 2016 follows:
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March 31, 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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19.95 |
% |
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$ |
(877 |
) |
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$ |
(1,695 |
) |
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19.98 |
% |
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$ |
(1,047 |
) |
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$ |
(2,026 |
) |
Spread over forward interest rate swap rates |
500 bps |
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(22 |
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(45 |
) |
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500 bps |
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(26 |
) |
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(53 |
) |
For MSRs under the fair value method, a summary of key assumptions and the sensitivity of the MSR value at March 31, 2017 and December 31, 2016, to changes in these assumptions follows:
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March 31, 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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11.90 |
% |
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$ |
(522 |
) |
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$ |
(1,007 |
) |
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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 |
839 bps |
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(411 |
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(798 |
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536 bps |
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(454 |
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(879 |
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For MSRs under the amortization method, a summary of key assumptions and the sensitivity of the MSR value at March 31, 2017 and December 31, 2016, to changes in these assumptions follows:
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March 31, 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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8.10 |
% |
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$ |
(4,756 |
) |
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$ |
(9,242 |
) |
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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 |
1,064 bps |
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(5,518 |
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(10,692 |
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1,173 bps |
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(5,259 |
) |
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(10,195 |
) |
A summary of key assumptions and the sensitivity of the SBA loan servicing rights value to changes in these assumptions at March 31, 2017 and December 31, 2016 follows:
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March 31, 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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7.40 |
% |
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$ |
(346 |
) |
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$ |
(687 |
) |
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7.40 |
% |
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$ |
(324 |
) |
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$ |
(644 |
) |
Discount rate |
15.00 |
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(696 |
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(1,363 |
) |
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15.00 |
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(1,270 |
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(1,870 |
) |
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