Loan Servicing (Tables)

12 Months Ended

Dec. 31, 2021

Mortgage Servicing Rights

Servicing Assets at Fair Value [Line Items]

Servicing Asset at Amortized Cost

The unpaid principal balance of mortgage loans serviced for others is listed below:

TABLE 7.1

December 31	2021		2020
(in millions)
Mortgage loans sold with servicing retained	$	4,855	$	4,653

The following table summarizes activity relating to mortgage loans sold with servicing retained:

TABLE 7.2

Year Ended December 31	2021		2020		2019
(in millions)
Mortgage loans sold with servicing retained	$	1,762	$	1,636	$	1,381
Pretax net gains resulting from above loan sales (1)	43		70		32
Mortgage servicing fees (1)	12		12		11

(1) Recorded in mortgage banking operations on the Consolidated Statements of Income.

Following is a summary of activity relating to MSRs:

TABLE 7.3

Year Ended December 31	2021		2020		2019
(in millions)
Balance at beginning of period	$	35.6	$	42.6	$	36.8
Additions	19.2		16.0		14.3
Payoffs and curtailments	(12.8)		(14.8)		(5.0)
(Impairment charge) / recovery	4.8		(5.8)		(1.0)
Amortization	(2.4)		(2.4)		(2.5)
Balance at end of period	$	44.4	$	35.6	$	42.6
Fair value, beginning of period	$	35.6	$	45.2	$	41.1
Fair value, end of period	46.0		35.6		45.2

Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement

Following is a summary of the sensitivity of the fair value of MSRs to changes in key assumptions:

TABLE 7.4

December 31	2021			2020
(dollars in millions)
Weighted average life (months)	76.6			66.6
Constant prepayment rate (annualized)	11.2		%	13.4		%
Discount rate	9.5		%	9.5		%
Effect on fair value due to change in interest rates:
+0.25%	$	3		$	2
+0.50%	5			4
-0.25%	(3)			(2)
-0.50%	(7)			(3)

SBA-Guaranteed Loan Servicing

Servicing Assets at Fair Value [Line Items]

Servicing Asset at Amortized Cost

The unpaid principal balance of SBA-guaranteed loans serviced for investors was as follows:

TABLE 7.5

December 31	2021		2020
(in millions)
SBA loans sold to investors with servicing retained	$	230	$	217

The following table summarizes activity relating to SBA loans sold with servicing retained:

TABLE 7.6

Year Ended December 31	2021		2020		2019
(in millions)
SBA loans sold with servicing retained	$	64	$	33	$	23
Pretax gains resulting from above loan sales (1)	8		3		2
SBA servicing fees (1)	2		2		2

(1) Recorded in other non-interest income on the Consolidated Statements of Income.

Following is a summary of the activity in SBA servicing rights:

TABLE 7.7

Year Ended December 31	2021		2020		2019
(in millions)
Balance at beginning of period	$	3	$	3	$	4
Additions	1		1		—
Payoffs, curtailments and amortization	(1)		(1)		(1)
Balance at end of period	$	3	$	3	$	3
Fair value, beginning of period	$	3	$	3	$	4
Fair value, end of period	3		3		3

Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement

Following is a summary of key assumptions and the sensitivity of the SBA servicing rights to changes in these assumptions. The declines in fair values were immaterial in the scenarios presented.

TABLE 7.8

December 31	2021			2020
(dollars in millions)
Weighted average life (months)	42			38
Constant prepayment rate	14.8		%	17.8		%
Discount rate	12.1			13.2
Decline in fair value due to change in interest rates:
1% adverse change	$	(0.1)		$	(0.1)
2% adverse change	(0.2)			(0.1)
Decline in fair value due to change in constant prepayment rates:
10% adverse change	(0.1)			(0.1)
20% adverse change	(0.2)			(0.1)