LOAN SALES AND SECURITIZATIONS (Tables)
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9 Months Ended |
Sep. 30, 2015 |
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| Transfers and Servicing [Abstract] |
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| Summarizes activity relating to loans securitized sold with servicing retained |
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2015 |
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2014 |
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2015 |
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2014 |
Automobile loans securitized with servicing retained |
$ |
— |
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$ |
— |
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$ |
750,000 |
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$ |
— |
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Pretax gains resulting from above loan sales (1) |
— |
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— |
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5,333 |
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— |
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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, 2015 and 2014:
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2015 |
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2014 |
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2015 |
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2014 |
Residential mortgage loans sold with servicing retained |
$ |
920,974 |
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$ |
654,747 |
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$ |
2,490,070 |
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$ |
1,703,056 |
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Pretax gains resulting from above loan sales (1) |
22,529 |
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16,781 |
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64,103 |
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43,853 |
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(1) |
Recorded in mortgage banking income. |
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2015 |
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2014 |
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2015 |
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2014 |
SBA loans sold with servicing retained |
$ |
49,216 |
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$ |
63,470 |
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$ |
145,150 |
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$ |
149,571 |
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Pretax gains resulting from above loan sales (1) |
3,712 |
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7,432 |
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11,981 |
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17,204 |
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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, 2015 and 2014:
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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) |
2015 |
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2014 |
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2015 |
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2014 |
Fair value, beginning of period |
$ |
20,681 |
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$ |
26,747 |
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$ |
22,786 |
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$ |
34,236 |
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Change in fair value during the period due to: |
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Time decay (1) |
(324 |
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(467 |
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(996 |
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(1,848 |
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Payoffs (2) |
(651 |
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(1,343 |
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(2,465 |
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(4,869 |
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Changes in valuation inputs or assumptions (3) |
(1,641 |
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501 |
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(1,260 |
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(2,081 |
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Fair value, end of period: |
$ |
18,065 |
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$ |
25,438 |
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$ |
18,065 |
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$ |
25,438 |
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Weighted-average life (years) |
4.9 |
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5.2 |
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4.9 |
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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: |
Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2015 |
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2014 |
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2015 |
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2014 |
Carrying value, beginning of period |
$ |
143,127 |
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$ |
133,113 |
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$ |
132,813 |
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$ |
128,064 |
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New servicing assets created |
9,918 |
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7,173 |
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26,710 |
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17,802 |
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Servicing assets acquired |
— |
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— |
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— |
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3,505 |
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Impairment (charge) / recovery |
(12,472 |
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487 |
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(7,492 |
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(1,573 |
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Amortization and other |
(5,106 |
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(4,311 |
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(16,564 |
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(11,336 |
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Carrying value, end of period |
$ |
135,467 |
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$ |
136,462 |
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$ |
135,467 |
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$ |
136,462 |
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Fair value, end of period |
$ |
135,499 |
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$ |
141,976 |
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$ |
135,499 |
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$ |
141,976 |
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Weighted-average life (years) |
6.0 |
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6.7 |
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6.0 |
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6.7 |
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2015 |
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2014 |
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2015 |
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2014 |
Carrying value, beginning of period |
$ |
18,272 |
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$ |
17,192 |
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$ |
18,536 |
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$ |
16,865 |
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New servicing assets created |
1,684 |
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2,181 |
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4,980 |
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5,042 |
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Amortization and other |
(1,594 |
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(1,458 |
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(5,154 |
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(3,992 |
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Carrying value, end of period |
$ |
18,362 |
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$ |
17,915 |
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$ |
18,362 |
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$ |
17,915 |
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Fair value, end of period |
$ |
20,906 |
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$ |
17,915 |
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$ |
20,906 |
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$ |
17,915 |
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Weighted-average life (years) |
3.3 |
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3.5 |
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3.3 |
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3.5 |
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| Summary of key assumptions and the sensitivity of the servicing rights value to changes in the assumptions |
For MSRs under the fair value method, a summary of key assumptions and the sensitivity of the MSR value at September 30, 2015 and December 31, 2014, to changes in these assumptions follows:
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September 30, 2015 |
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December 31, 2014 |
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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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14.30 |
% |
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$ |
(880 |
) |
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$ |
(1,688 |
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15.60 |
% |
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$ |
(1,176 |
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$ |
(2,248 |
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Spread over forward interest rate swap rates |
599 bps |
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(566 |
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(1,097 |
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546 bps |
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(699 |
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(1,355 |
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For MSRs under the amortization method, a summary of key assumptions and the sensitivity of the MSR value at September 30, 2015 and December 31, 2014, to changes in these assumptions follows:
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September 30, 2015 |
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December 31, 2014 |
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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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11.20 |
% |
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$ |
(5,300 |
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$ |
(10,187 |
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11.40 |
% |
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$ |
(5,289 |
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$ |
(10,164 |
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Spread over forward interest rate swap rates |
971 bps |
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(4,291 |
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(8,303 |
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856 bps |
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(4,343 |
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(8,403 |
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September 30, 2015 |
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December 31, 2014 |
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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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15.90 |
% |
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$ |
(374 |
) |
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$ |
(672 |
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14.62 |
% |
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$ |
(305 |
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$ |
(496 |
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Spread over forward interest rate swap rates |
500 bps |
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(8 |
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(16 |
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500 bps |
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(2 |
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(4 |
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September 30, 2015 |
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December 31, 2014 |
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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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7.80 |
% |
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$ |
(299 |
) |
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$ |
(593 |
) |
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5.60 |
% |
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$ |
(211 |
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$ |
(419 |
) |
Discount rate |
1,500 |
bps |
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(559 |
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(1,096 |
) |
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1,500 bps |
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(563 |
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(1,102 |
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