LOAN SALES AND SECURITIZATIONS (Tables)
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6 Months Ended |
Jun. 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 six-month periods ended June 30, 2017 and 2016:
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Three Months Ended
June 30, |
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Six Months Ended
June 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 |
$ |
87,705 |
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$ |
58,629 |
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$ |
165,377 |
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$ |
104,518 |
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Pretax gains resulting from above loan sales (1) |
7,109 |
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4,662 |
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12,927 |
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8,183 |
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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 six-month periods ended June 30, 2017 and 2016:
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Three Months Ended
June 30, |
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Six Months Ended
June 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 |
$ |
798,399 |
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$ |
715,589 |
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$ |
1,645,752 |
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$ |
1,348,055 |
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Pretax gains resulting from above loan sales (1) |
16,943 |
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18,618 |
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39,133 |
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32,731 |
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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 six-month periods ended June 30, 2017 and 2016:
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Fair Value Method: |
Three Months Ended
June 30, |
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Six Months Ended
June 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 |
$ |
13,307 |
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$ |
14,819 |
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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) |
(217 |
) |
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(245 |
) |
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(448 |
) |
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(518 |
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Payoffs (2) |
(217 |
) |
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(465 |
) |
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(581 |
) |
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(969 |
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Changes in valuation inputs or assumptions (3) |
(345 |
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(1,004 |
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(190 |
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(2,993 |
) |
Fair value, end of period: |
$ |
12,528 |
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$ |
13,105 |
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$ |
12,528 |
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$ |
13,105 |
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Weighted-average life (years) |
5.7 |
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5.1 |
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5.7 |
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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 |
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Amortization Method: |
Three Months Ended
June 30, |
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Six Months Ended
June 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 |
$ |
177,812 |
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$ |
127,275 |
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$ |
172,466 |
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$ |
143,133 |
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New servicing assets created |
8,218 |
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7,277 |
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17,853 |
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13,386 |
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Impairment (charge) / recovery |
(2,806 |
) |
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(7,295 |
) |
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(1,007 |
) |
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(23,635 |
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Amortization and other |
(6,733 |
) |
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(5,965 |
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(12,821 |
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(11,592 |
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Carrying value, end of period |
$ |
176,491 |
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$ |
121,292 |
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$ |
176,491 |
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$ |
121,292 |
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Fair value, end of period |
$ |
177,138 |
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$ |
121,464 |
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$ |
177,138 |
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$ |
121,464 |
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Weighted-average life (years) |
7.1 |
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6.1 |
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7.1 |
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6.1 |
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Changes in the carrying value of automobile loan servicing rights for the three-month and six-month periods ended June 30, 2017 and 2016, and the fair value at the end of each period were as follows:
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Three Months Ended
June 30, |
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Six Months Ended
June 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 |
$ |
15,159 |
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$ |
7,029 |
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$ |
18,285 |
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$ |
8,771 |
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Amortization and other |
(2,635 |
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(1,571 |
) |
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(5,761 |
) |
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(3,313 |
) |
Carrying value, end of period |
$ |
12,524 |
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$ |
5,458 |
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$ |
12,524 |
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$ |
5,458 |
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Fair value, end of period |
$ |
12,571 |
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$ |
5,551 |
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$ |
12,571 |
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$ |
5,551 |
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Weighted-average contractual life (years) |
3.8 |
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3.0 |
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3.8 |
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3.0 |
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The following tables summarize the changes in the carrying value of the servicing asset for the three-month and six-month periods ended June 30, 2017 and 2016, and the fair value at the end of each period were as follows:
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Three Months Ended
June 30, |
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Six Months Ended
June 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 |
$ |
21,399 |
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$ |
19,526 |
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$ |
21,080 |
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$ |
19,747 |
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New servicing assets created |
4,121 |
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1,868 |
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5,596 |
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3,380 |
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Amortization and other |
(2,407 |
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(1,782 |
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(3,563 |
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(3,515 |
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Carrying value, end of period |
$ |
23,113 |
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$ |
19,612 |
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$ |
23,113 |
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$ |
19,612 |
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Fair value, end of period |
$ |
26,853 |
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$ |
23,823 |
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$ |
26,853 |
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$ |
23,823 |
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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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| 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 June 30, 2017 and December 31, 2016 follows:
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June 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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19.91 |
% |
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$ |
(688 |
) |
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$ |
(1,391 |
) |
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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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(17 |
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(34 |
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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 June 30, 2017 and December 31, 2016, to changes in these assumptions follows:
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June 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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11.40 |
% |
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$ |
(476 |
) |
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$ |
(919 |
) |
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10.90 |
% |
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$ |
(501 |
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$ |
(970 |
) |
Spread over forward interest rate swap rates |
876 bps |
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(463 |
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(874 |
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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 June 30, 2017 and December 31, 2016, to changes in these assumptions follows:
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June 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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8.20 |
% |
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$ |
(4,731 |
) |
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$ |
(9,191 |
) |
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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 |
1,084 bps |
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(6,566 |
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(12,374 |
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1,173 bps |
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(5,259 |
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(10,195 |
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A summary of key assumptions and the sensitivity of the SBA loan servicing rights value to changes in these assumptions at June 30, 2017 and December 31, 2016 follows:
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June 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)
|
7.50 |
% |
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$ |
(363 |
) |
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$ |
(721 |
) |
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7.40 |
% |
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$ |
(324 |
) |
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$ |
(644 |
) |
Discount rate |
15.00 |
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(721 |
) |
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(1,411 |
) |
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15.00 |
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(1,270 |
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(1,870 |
) |
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