FDIC loss share (expense) income |
Note 33 – FDIC loss share income (expense) The caption of FDIC loss-share income (expense) in the consolidated statements of operations consists of the following major categories: | | | Quarters ended September 30, | | | Nine months ended September 30, | (In thousands) | | 2015 | | | 2014 | | | 2015 | | | 2014 | Amortization of loss-share indemnification asset | $ | (3,931) | | $ | (42,524) | | $ | (62,312) | | $ | (163,565) | Reversal of accelerated amortization in prior periods | | - | | | 15,046 | | | - | | | 15,046 | 80% mirror accounting on credit impairment losses (reversal)[1] | | (183) | | | 9,863 | | | 15,710 | | | 35,325 | 80% mirror accounting on reimbursable expenses | | 6,276 | | | 15,545 | | | 70,551 | | | 39,375 | 80% mirror accounting on recoveries on covered assets, including | | | | | | | | | | | | | rental income on OREOs, subject to reimbursement to the FDIC | | - | | | (2,633) | | | (7,822) | | | (10,582) | Change in true-up payment obligation | | (1,058) | | | 1,078 | | | 6,778 | | | 1,040 | Other | | 103 | | | (1,239) | | | 1,516 | | | (970) | Total FDIC loss-share income (expense) | $ | 1,207 | | $ | (4,864) | | $ | 24,421 | | $ | (84,331) | [1] Reductions in expected cash flows for ASC 310-30 loans, which may impact the provision for loan losses, may consider reductions in both principal and interest cash flow expectations. The amount covered under the FDIC loss-sharing agreements for interest not collected from borrowers is limited under the agreements (approximately 90 days); accordingly, these amounts are not subject fully to the 80% mirror accounting. |
The negative amortization of the FDIC’s Indemnification Asset for the nine months ended September 30, 2015 includes a $10.9 million expense related to losses incurred by the corporation that were not claimed to the FDIC before the expiration of the loss-share portion of the agreement on June 30, 2015, and that are not subject to the ongoing arbitrations.
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