LOAN SALES AND SECURITIZATIONS (Tables)
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3 Months Ended |
Mar. 31, 2016 |
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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, 2016 and 2015:
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Three months ended
March 31, |
(dollar amounts in thousands) |
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2016 |
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2015 |
SBA loans sold with servicing retained |
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$ |
45,889 |
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$ |
42,401 |
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Pretax gains resulting from above loan sales (1) |
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3,521 |
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3,574 |
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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, 2016 and 2015:
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Three months ended
March 31, |
(dollar amounts in thousands) |
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2016 |
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2015 |
Residential mortgage loans sold with servicing retained |
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$ |
632,466 |
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$ |
630,683 |
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Pretax gains resulting from above loan sales (1) |
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14,113 |
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14,862 |
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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, 2016 and 2015:
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Fair Value Method: |
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Three months ended
March 31, |
(dollar amounts in thousands) |
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2016 |
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2015 |
Fair value, beginning of period |
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$ |
17,585 |
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$ |
22,786 |
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Change in fair value during the period due to: |
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Time decay (1) |
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(273 |
) |
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(339 |
) |
Payoffs (2) |
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(504 |
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(818 |
) |
Changes in valuation inputs or assumptions (3) |
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(1,989 |
) |
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(1,174 |
) |
Fair value, end of period: |
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$ |
14,819 |
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$ |
20,455 |
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Weighted-average life (years) |
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5.2 |
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4.7 |
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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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2016 |
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2015 |
Carrying value, beginning of period |
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$ |
143,133 |
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$ |
132,813 |
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New servicing assets created |
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6,109 |
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6,454 |
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Servicing assets acquired |
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— |
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— |
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Impairment (charge) / recovery |
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(16,340 |
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(7,990 |
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Amortization and other |
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(5,627 |
) |
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(5,823 |
) |
Carrying value, end of period |
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$ |
127,275 |
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$ |
125,454 |
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Fair value, end of period |
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$ |
127,516 |
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$ |
125,691 |
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Weighted-average life (years) |
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6.5 |
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5.7 |
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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, 2016 and 2015, 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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2016 |
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2015 |
Carrying value, beginning of period |
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$ |
19,747 |
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$ |
18,536 |
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New servicing assets created |
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1,511 |
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1,457 |
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Amortization and other |
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(1,733 |
) |
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(2,046 |
) |
Carrying value, end of period |
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$ |
19,525 |
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$ |
17,947 |
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Fair value, end of period |
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$ |
23,048 |
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$ |
19,436 |
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Weighted-average life (years) |
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3.3 |
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3.3 |
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Changes in the carrying value of automobile loan servicing rights for the three-month periods ended March 31, 2016 and 2015, 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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2016 |
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2015 |
Carrying value, beginning of period |
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$ |
8,771 |
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$ |
6,898 |
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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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(1,742 |
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(1,835 |
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Carrying value, end of period |
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$ |
7,029 |
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$ |
5,063 |
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Fair value, end of period |
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$ |
7,250 |
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$ |
5,155 |
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Weighted-average life (years) |
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3.3 |
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2.4 |
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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 March 31, 2016 and December 31, 2015 follows:
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March 31, 2016 |
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December 31, 2015 |
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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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$ |
(319 |
) |
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$ |
(632 |
) |
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7.60 |
% |
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$ |
(313 |
) |
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$ |
(622 |
) |
Discount rate |
15.00 |
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(618 |
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(1,210 |
) |
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15.00 |
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(610 |
) |
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(1,194 |
) |
For MSRs under the fair value method, a summary of key assumptions and the sensitivity of the MSR value at March 31, 2016 and December 31, 2015, to changes in these assumptions follows:
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March 31, 2016 |
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December 31, 2015 |
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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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12.30 |
% |
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$ |
(628 |
) |
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$ |
(1,212 |
) |
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14.70 |
% |
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$ |
(864 |
) |
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$ |
(1,653 |
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Spread over forward interest rate swap rates |
549 bps |
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(483 |
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(935 |
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539 bps |
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(559 |
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(1,083 |
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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, 2016 and December 31, 2015, to changes in these assumptions follows:
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March 31, 2016 |
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December 31, 2015 |
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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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9.60 |
% |
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$ |
(4,207 |
) |
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$ |
(8,140 |
) |
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11.10 |
% |
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$ |
(5,543 |
) |
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$ |
(10,648 |
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Spread over forward interest rate swap rates |
1,206 bps |
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(3,800 |
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(7,370 |
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875 bps |
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(4,662 |
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(9,017 |
) |
A summary of key assumptions and the sensitivity of the automobile loan servicing rights value to changes in these assumptions at March 31, 2016 and December 31, 2015 follows:
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March 31, 2016 |
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December 31, 2015 |
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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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18.56 |
% |
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$ |
(450 |
) |
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$ |
(730 |
) |
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18.36 |
% |
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$ |
(500 |
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$ |
(895 |
) |
Spread over forward interest rate swap rates |
500 bps |
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(6 |
) |
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(12 |
) |
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500 bps |
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(10 |
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(19 |
) |
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