þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Virginia (State or other jurisdiction of incorporation or organization) | 23-2453088 (I.R.S. Employer Identification No.) | |
75 State Street, Boston, Massachusetts (Address of principal executive offices) | 02109 (Zip Code) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
Class | Outstanding at October 31, 2012 | |
Common Stock (no par value) | 520,307,043 shares |
• | the strength of the United States economy in general and the strength of the regional and local economies in which SHUSA conducts operations, which may affect, among other things, the level of non-performing assets, charge-offs, and provision for credit losses; |
• | the ability of certain European member countries to continue to service their debt and the risk that a weakened European economy could negatively affect U.S.-based financial institutions, counterparties with which SHUSA does business and the stability of the global financial markets; |
• | the effects of policies of the Federal Deposit Insurance Corporation and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; |
• | inflation, interest rate, market and monetary fluctuations, which may, among other things, reduce interest margins, impact funding sources and affect the ability to originate and distribute financial products in the primary and secondary markets; |
• | adverse movements and volatility in debt and equity capital markets; |
• | adverse changes in the securities markets, including those related to the financial condition of significant issuers in SHUSA's investment portfolio; |
• | changes in asset quality; |
• | revenue enhancement initiatives that may not be successful in the marketplace or may result in unintended costs; |
• | changing market conditions that may force management to alter the implementation or continuation of cost savings or revenue enhancement strategies; |
• | SHUSA's ability to timely develop competitive new products and services in a changing environment and the acceptance of such products and services by customers; |
• | the willingness of customers to substitute competitors' products and services for ours; |
• | the ability of SHUSA and its third-party vendors to convert and maintain SHUSA's data processing and related systems on a timely and acceptable basis and within projected cost estimates; |
• | the impact of changes in financial services policies, laws and regulations, including laws, regulations and policies concerning taxes, banking, capital, liquidity, proper accounting treatment, securities and insurance, the applications and interpretations thereof by regulatory bodies and the impact of changes in and interpretation of generally accepted accounting principles in the United States; |
• | the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in July 2010 which is a significant development for the industry. The full impact of this legislation to SHUSA and the industry will be unknown until the rule-making processes mandated by the legislation are complete, although the impact will involve higher compliance costs which have and will negatively affect SHUSA's revenue and earnings; |
• | additional legislation and regulations or taxes, levies or other charges that may be enacted or promulgated in the future, the form of which legislation or regulation or the degree to which management would need to modify SHUSA's businesses or operations to comply with such legislation or regulation management is unable to predict; |
• | the cost and other effects of the consent order issued by the Office of the Comptroller of the Currency to Sovereign Bank requiring the Bank to take certain steps to improve its mortgage servicing and foreclosures practices, as is further described in Part I; |
• | technological changes; |
• | competitors of SHUSA that may have greater financial resources and develop products and technology that enable those competitors to compete more successfully than SHUSA; |
• | changes in consumer spending and savings habits; |
• | acts of terrorism or domestic or foreign military conflicts; and acts of God, including natural disasters; |
• | regulatory or judicial proceedings; |
• | the impact of Hurricane Sandy; |
• | the outcome of ongoing tax audits by federal, state and local income tax authorities that may require additional taxes be paid by SHUSA as compared to what has been accrued or paid as of period end; and |
• | SHUSA's success in managing the risks involved in the foregoing. |
Page | |
Ex-31.1 Certification | |
Ex-31.2 Certification | |
Ex-32.1 Certification | |
Ex-32.2 Certification | |
EX-101 INSTANCE DOCUMENT | |
EX-101 SCHEMA DOCUMENT | |
EX-101 CALCULATION LINKBASE DOCUMENT | |
EX-101 LABELS LINKBASE DOCUMENT | |
EX-101 PRESENTATION LINKBASE DOCUMENT | |
EX-101 DEFINITION LINKBASE DOCUMENT |
Item 1. | Consolidated Financial Statements |
September 30, 2012 | December 31, 2011 | ||||||
(in thousands) | |||||||
ASSETS | |||||||
Cash and amounts due from depository institutions | $ | 3,351,074 | $ | 2,623,963 | |||
Investment securities: | |||||||
Available-for-sale at fair value | 17,249,522 | 15,578,576 | |||||
Other investments | 1,028,537 | 555,370 | |||||
Loans held for investment | 52,192,302 | 51,307,380 | |||||
Allowance for loan losses | (980,121 | ) | (1,083,492 | ) | |||
Net loans held for investment | 51,212,181 | 50,223,888 | |||||
Loans held for sale at fair value | 772,088 | 352,471 | |||||
Premises and equipment (1) | 723,497 | 669,143 | |||||
Accrued interest receivable | 214,130 | 209,010 | |||||
Equity method investments | 2,916,047 | 2,884,008 | |||||
Goodwill | 3,431,481 | 3,431,481 | |||||
Core deposit intangibles and other intangibles, net | 70,227 | 99,171 | |||||
Bank owned life insurance | 1,591,763 | 1,560,675 | |||||
Restricted cash | 393,866 | 36,660 | |||||
Other assets (2) | 2,156,196 | 2,340,783 | |||||
TOTAL ASSETS | $ | 85,110,609 | $ | 80,565,199 | |||
LIABILITIES | |||||||
Total deposits and other customer accounts | 50,222,004 | 47,797,515 | |||||
Borrowings and other debt obligations | 19,189,050 | 18,278,433 | |||||
Advance payments by borrowers for taxes and insurance | 191,827 | 150,397 | |||||
Other liabilities | 2,371,406 | 1,742,691 | |||||
TOTAL LIABILITIES | 71,974,287 | 67,969,036 | |||||
STOCKHOLDER’S EQUITY | |||||||
Preferred stock (no par value; $25,000 liquidation preference; 7,500,000 shares authorized; 8,000 shares outstanding at September 30, 2012 and at December 31, 2011) | 195,445 | 195,445 | |||||
Common stock (no par value; 800,000,000 shares authorized; 520,307,043 shares issued at September 30, 2012 and at December 31, 2011) | 12,212,743 | 12,213,484 | |||||
Accumulated other comprehensive income/(loss) | 63,778 | (46,718 | ) | ||||
Retained earnings | 664,356 | 233,952 | |||||
TOTAL STOCKHOLDER’S EQUITY | 13,136,322 | 12,596,163 | |||||
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY | $ | 85,110,609 | $ | 80,565,199 |
Three-Month Period Ended September 30, | Nine-Month Period Ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(in thousands) | ||||||||||||||||
INTEREST INCOME: | ||||||||||||||||
Interest on loans | $ | 535,840 | $ | 1,174,559 | $ | 1,624,358 | $ | 3,576,430 | ||||||||
Interest-earning deposits | 1,724 | 1,655 | 4,301 | 5,051 | ||||||||||||
Investment securities: | ||||||||||||||||
Available-for-sale | 91,599 | 101,904 | 281,506 | 316,528 | ||||||||||||
Other investments | 5,824 | 15 | 15,813 | 114 | ||||||||||||
TOTAL INTEREST INCOME | 634,987 | 1,278,133 | 1,925,978 | 3,898,123 | ||||||||||||
INTEREST EXPENSE: | ||||||||||||||||
Deposits and customer accounts | 58,986 | 65,066 | 175,479 | 187,837 | ||||||||||||
Borrowings and other debt obligations | 157,683 | 258,499 | 477,664 | 823,564 | ||||||||||||
TOTAL INTEREST EXPENSE | 216,669 | 323,565 | 653,143 | 1,011,401 | ||||||||||||
NET INTEREST INCOME | 418,318 | 954,568 | 1,272,835 | 2,886,722 | ||||||||||||
Provision for credit losses | 71,000 | 368,713 | 281,800 | 949,629 | ||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 347,318 | 585,855 | 991,035 | 1,937,093 | ||||||||||||
NON-INTEREST INCOME: | ||||||||||||||||
Consumer fees | 59,621 | 160,368 | 182,546 | 498,181 | ||||||||||||
Commercial fees | 44,655 | 43,877 | 134,384 | 130,195 | ||||||||||||
Mortgage banking income, net | 14,936 | (25,943 | ) | 51,984 | (13,714 | ) | ||||||||||
Income/(expense) from equity method investments | 106,427 | (3,376 | ) | 370,325 | (9,444 | ) | ||||||||||
Bank owned life insurance | 13,701 | 15,541 | 44,643 | 42,858 | ||||||||||||
Miscellaneous income | 10,294 | 2,631 | 34,611 | 19,318 | ||||||||||||
TOTAL FEES AND OTHER INCOME | 249,634 | 193,098 | 818,493 | 667,394 | ||||||||||||
Total other-than-temporary impairment (“OTTI”) losses | — | (4,180 | ) | — | (38,446 | ) | ||||||||||
Portion of OTTI recognized in other comprehensive income before taxes | — | 4,180 | — | 38,121 | ||||||||||||
OTTI recognized in earnings | — | — | — | (325 | ) | |||||||||||
Net gain/(loss) on sale of investment securities | (151 | ) | 41,943 | 76,381 | 124,192 | |||||||||||
Net gain/(loss) on investment securities recognized in earnings | (151 | ) | 41,943 | 76,381 | 123,867 | |||||||||||
TOTAL NON-INTEREST INCOME | 249,483 | 235,041 | 894,874 | 791,261 | ||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES: | ||||||||||||||||
Compensation and benefits | 162,581 | 203,993 | 486,559 | 599,358 | ||||||||||||
Occupancy and equipment expenses | 82,915 | 89,061 | 243,072 | 254,497 | ||||||||||||
Technology expense | 29,019 | 30,194 | 83,146 | 91,938 | ||||||||||||
Outside services | 20,693 | 35,668 | 72,955 | 104,049 | ||||||||||||
Marketing expense | 7,628 | 9,426 | 22,254 | 26,739 | ||||||||||||
Loan expense | 20,147 | 48,182 | 64,809 | 165,951 | ||||||||||||
Other administrative expenses | 32,503 | 38,070 | 116,629 | 117,500 | ||||||||||||
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES | 355,486 | 454,594 | 1,089,424 | 1,360,032 | ||||||||||||
OTHER EXPENSES: | ||||||||||||||||
Amortization of intangibles | 8,871 | 13,138 | 28,944 | 43,041 | ||||||||||||
Deposit insurance premiums | 22,859 | 18,551 | 66,823 | 66,279 | ||||||||||||
Loss on debt extinguishment | 195 | 23,570 | 6,834 | 29,712 | ||||||||||||
PIERS litigation accrual | 258,480 | — | 258,480 | — | ||||||||||||
TOTAL OTHER EXPENSES | 290,405 | 55,259 | 361,081 | 139,032 | ||||||||||||
INCOME/(LOSS) BEFORE INCOME TAXES | (49,090 | ) | 311,043 | 435,404 | 1,229,290 | |||||||||||
Income tax provision/(benefit) | (77,730 | ) | 104,707 | (5,950 | ) | 426,840 | ||||||||||
NET INCOME INCLUDING NONCONTROLLING INTEREST | 28,640 | 206,336 | 441,354 | 802,450 | ||||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | — | 13,503 | — | 52,550 | ||||||||||||
NET INCOME ATTRIBUTABLE TO SHUSA | 28,640 | 192,833 | 441,354 | 749,900 | ||||||||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX | ||||||||||||||||
Net unrealized gains/(losses) on cash flow hedge derivative financial instruments | 6,006 | (39,660 | ) | 17,223 | (59,433 | ) | ||||||||||
Net unrealized gains recognized on investment securities | 72,404 | 101,270 | 91,580 | 151,749 | ||||||||||||
Amortization of defined benefit plans | 565 | 316 | 1,693 | 1,027 | ||||||||||||
TOTAL OTHER COMPREHENSIVE INCOME | 78,975 | 61,926 | 110,496 | 93,343 | ||||||||||||
COMPREHENSIVE INCOME | 107,615 | 268,262 | 551,850 | 895,793 | ||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | — | 13,503 | — | 52,550 | ||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO SHUSA | $ | 107,615 | $ | 254,759 | $ | 551,850 | $ | 843,243 |
Common Shares Outstanding | Preferred Stock | Common Stock | Warrants | Accumulated Other Comprehensive Income/(Loss) | Retained Earnings (Deficit) | Noncontrolling Interest | Total Stock- holder’s Equity | |||||||||||||||||||||||
Balance, December 31, 2010 | 517,107 | $ | 195,445 | $ | 11,117,328 | $ | 285,435 | $ | (234,190 | ) | $ | (128,984 | ) | $ | 25,636 | $ | 11,260,670 | |||||||||||||
Comprehensive income | — | — | — | — | 93,343 | 749,900 | 52,550 | 895,793 | ||||||||||||||||||||||
Stock issued in connection with employee benefit and incentive compensation plans | — | — | 679 | — | — | — | — | 679 | ||||||||||||||||||||||
Dividend to noncontrolling interest | — | — | — | — | — | — | (39,552 | ) | (39,552 | ) | ||||||||||||||||||||
Dividends paid on preferred stock | — | — | — | — | — | (10,950 | ) | — | (10,950 | ) | ||||||||||||||||||||
Balance, September 30, 2011 | 517,107 | $ | 195,445 | $ | 11,118,007 | $ | 285,435 | $ | (140,847 | ) | $ | 609,966 | $ | 38,634 | $ | 12,106,640 |
Common Shares Outstanding | Preferred Stock | Common Stock | Accumulated Other Comprehensive Income/(Loss) | Retained Earnings (Deficit) | Total Stockholder’s Equity | |||||||||||||||||
Balance, December 31, 2011 | 520,307 | $ | 195,445 | $ | 12,213,484 | $ | (46,718 | ) | $ | 233,952 | $ | 12,596,163 | ||||||||||
Comprehensive income | — | — | — | 110,496 | 441,354 | 551,850 | ||||||||||||||||
Stock issued in connection with employee benefit and incentive compensation plans | — | — | (741 | ) | — | — | (741 | ) | ||||||||||||||
Dividends paid on preferred stock | — | — | — | — | (10,950 | ) | (10,950 | ) | ||||||||||||||
Balance, September 30, 2012 | 520,307 | $ | 195,445 | $ | 12,212,743 | $ | 63,778 | $ | 664,356 | $ | 13,136,322 |
Nine-Month Period Ended September 30, | |||||||
2012 | 2011 | ||||||
(in thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income including noncontrolling interest | $ | 441,354 | $ | 802,450 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for credit losses | 281,800 | 949,629 | |||||
Deferred taxes | (36,248 | ) | 79,477 | ||||
Depreciation and amortization | 105,405 | 153,434 | |||||
Net amortization/accretion of investment securities and loan premiums and discounts | 88,675 | 37,110 | |||||
Net gain on sale of loans | (20,932 | ) | (13,050 | ) | |||
Net gain on sale of investment securities | (76,381 | ) | (124,192 | ) | |||
OTTI recognized in earnings | — | 325 | |||||
Loss on debt extinguishments | 6,834 | 29,712 | |||||
Net (gain)/loss on real estate owned and premises and equipment | (541 | ) | 8,296 | ||||
Stock-based compensation | (741 | ) | 2,885 | ||||
Remittance to Santander for stock-based compensation | — | (2,206 | ) | ||||
Equity earnings from equity method investments | (370,325 | ) | 9,444 | ||||
Dividends from equity method investments | 308,590 | — | |||||
Origination of loans held for sale, net of repayments | (2,916,586 | ) | (828,333 | ) | |||
Proceeds from sales of loans held for sale | 2,582,762 | 850,627 | |||||
Net change in: | |||||||
Accrued interest receivable | (5,120 | ) | 40,618 | ||||
Other assets and bank owned life insurance | 125,023 | (217,388 | ) | ||||
Other liabilities | 680,657 | 141,996 | |||||
Other | (25,430 | ) | (6,269 | ) | |||
Net cash provided by operating activities | 1,168,796 | 1,914,565 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Proceeds from sales of available-for-sale investment securities | $ | 2,942,125 | $ | 4,946,458 | |||
Proceeds from prepayments and maturities of available-for-sale investment securities | 2,599,195 | 2,585,805 | |||||
Purchases of available-for-sale investment securities | (6,611,652 | ) | (7,023,632 | ) | |||
Net change in other investments | (473,167 | ) | 89,342 | ||||
Net change in restricted cash | (357,206 | ) | 96,458 | ||||
Proceeds from sales of loans held for investment | 218,314 | 651 | |||||
Purchase of loans held for investment | (1,516,237 | ) | (2,657,786 | ) | |||
Net change in loans other than purchases and sales | (535,328 | ) | 419,918 | ||||
Proceeds from sales of real estate owned and premises and equipment | 68,395 | 67,477 | |||||
Purchases of premises and equipment | (132,362 | ) | (135,888 | ) | |||
Net cash used in investing activities | (3,797,923 | ) | (1,611,197 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Net change in deposits and other customer accounts | $ | 2,424,489 | $ | 4,690,275 | |||
Net change in wholesale borrowings | 1,767,031 | (1,798,779 | ) | ||||
Net proceeds from senior notes, subordinated notes and credit facility | 914,905 | 9,268,672 | |||||
Repayments of borrowings and other debt obligations | (1,780,667 | ) | (10,941,971 | ) | |||
Net change in advance payments by borrowers for taxes and insurance | 41,430 | 33,368 | |||||
Cash dividends paid to preferred stockholders | (10,950 | ) | (10,950 | ) | |||
Cash dividends paid to noncontrolling interest | — | (65,328 | ) | ||||
Net cash provided by financing activities | 3,356,238 | 1,175,287 | |||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 727,111 | 1,478,655 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 2,623,963 | 1,705,895 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 3,351,074 | $ | 3,184,550 | |||
SUPPLEMENTAL DISCLOSURE | |||||||
Net income taxes (received) / paid | $ | (21,145 | ) | $ | 1,265,192 | ||
Interest paid | $ | 370,585 | $ | 1,036,357 | |||
NON-CASH TRANSACTIONS | |||||||
Foreclosed real estate | $ | 40,796 | $ | 87,553 | |||
Other repossessed assets | $ | — | $ | 1,229,160 | |||
Receipt of available for sale mortgage backed securities in exchange for mortgage loans held for sale | $ | 459,453 | $ | 649,676 | |||
Dividends declared to noncontrolling interest | $ | — | $ | 8,224 |
September 30, 2012 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Loss | Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
Investment securities: | |||||||||||||||
U.S. Treasury and government agency securities | $ | 8,997 | $ | 1 | $ | — | $ | 8,998 | |||||||
Debentures of FHLB, FNMA, and FHLMC | 19,625 | 375 | — | 20,000 | |||||||||||
Corporate debt securities | 2,317,580 | 64,108 | (4,154 | ) | 2,377,534 | ||||||||||
Asset-backed securities | 1,896,668 | 10,638 | (13,111 | ) | 1,894,195 | ||||||||||
Equity securities | 5,050 | 54 | — | 5,104 | |||||||||||
State and municipal securities | 1,637,604 | 83,198 | (223 | ) | 1,720,579 | ||||||||||
Mortgage-backed securities: | |||||||||||||||
U.S. government agencies | 6,598,355 | 82,450 | (4,613 | ) | 6,676,192 | ||||||||||
FHLMC and FNMA debt securities | 4,466,027 | 85,261 | (4,583 | ) | 4,546,705 | ||||||||||
Non-agency securities | 215 | — | — | 215 | |||||||||||
Total investment securities available-for-sale | $ | 16,950,121 | $ | 326,085 | $ | (26,684 | ) | $ | 17,249,522 |
December 31, 2011 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Loss | Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
Investment securities: | |||||||||||||||
U.S. Treasury and government agency securities | $ | 44,070 | $ | 20 | $ | — | $ | 44,090 | |||||||
Debentures of FHLB, FNMA, and FHLMC | 19,482 | 518 | — | 20,000 | |||||||||||
Corporate debt securities | 2,070,255 | 16,249 | (36,984 | ) | 2,049,520 | ||||||||||
Asset-backed securities | 2,639,397 | 8,191 | (7,298 | ) | 2,640,290 | ||||||||||
State and municipal securities | 1,735,465 | 53,013 | (3,700 | ) | 1,784,778 | ||||||||||
Mortgage-backed securities: | |||||||||||||||
U.S. government agencies | 3,904,933 | 50,049 | (4,022 | ) | 3,950,960 | ||||||||||
FHLMC and FNMA debt securities | 5,012,584 | 77,822 | (1,760 | ) | 5,088,646 | ||||||||||
Non-agency securities | 290 | 2 | — | 292 | |||||||||||
Total investment securities available-for-sale | $ | 15,426,476 | $ | 205,864 | $ | (53,764 | ) | $ | 15,578,576 |
Amortized Cost | Fair Value | ||||||
(in thousands) | |||||||
Due within one year | $ | 958,524 | $ | 963,038 | |||
Due after 1 within 5 years | 1,950,417 | 2,007,330 | |||||
Due after 5 within 10 years | 717,340 | 713,794 | |||||
Due after 10 years/ no maturity | 13,323,840 | 13,565,360 | |||||
Total | $ | 16,950,121 | $ | 17,249,522 |
At September 30, 2012 | |||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Corporate debt securities | $ | 171,766 | $ | (2,104 | ) | $ | 73,998 | $ | (2,050 | ) | $ | 245,764 | $ | (4,154 | ) | ||||||||
Asset-backed securities | 395,896 | (12,446 | ) | 133,357 | (665 | ) | 529,253 | (13,111 | ) | ||||||||||||||
State and municipal securities | 31,391 | (223 | ) | — | — | 31,391 | (223 | ) | |||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
U.S. government agencies | 985,934 | (4,613 | ) | — | — | 985,934 | (4,613 | ) | |||||||||||||||
FHLMC and FNMA debt securities | 311,776 | (4,583 | ) | — | — | 311,776 | (4,583 | ) | |||||||||||||||
Total investment securities available-for-sale | $ | 1,896,763 | $ | (23,969 | ) | $ | 207,355 | $ | (2,715 | ) | $ | 2,104,118 | $ | (26,684 | ) |
At December 31, 2011 | |||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Corporate debt securities | $ | 1,129,751 | $ | (23,499 | ) | $ | 108,931 | $ | (13,485 | ) | $ | 1,238,682 | $ | (36,984 | ) | ||||||||
Asset-backed securities | 602,183 | (2,754 | ) | 219,016 | (4,544 | ) | 821,199 | (7,298 | ) | ||||||||||||||
State and municipal securities | 26,910 | (204 | ) | 191,597 | (3,496 | ) | 218,507 | (3,700 | ) | ||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
U.S. government agencies | 856,687 | (4,022 | ) | — | — | 856,687 | (4,022 | ) | |||||||||||||||
FHLMC and FNMA debt securities | 590,740 | (1,667 | ) | 6,847 | (93 | ) | 597,587 | (1,760 | ) | ||||||||||||||
Total investment securities available-for-sale | $ | 3,206,271 | $ | (32,146 | ) | $ | 526,391 | $ | (21,618 | ) | $ | 3,732,662 | $ | (53,764 | ) |
Nine-Month Period Ended September 30, 2011 | |||
Cumulative credit loss recognized on non-agency securities at the beginning of the period | $ | 210,919 | |
Cumulative reduction as of the beginning of the period for accretion into interest income for the expected increase in cash flow on certain non-agency securities | (9,631 | ) | |
Current period accretion into interest income for the expected increase in cash flow on certain non-agency securities | (7,903 | ) | |
Additions for amount related to credit loss for which an other-than-temporary impairment was not previously recognized | — | ||
Reductions for securities sold during the period | (68,442 | ) | |
Additional increases to credit losses for previously recognized other-than-temporary impairment charges when the entity does not intend to sell the security | 325 | ||
Net cumulative credit loss recognized on non-agency securities as of the end of the period | 125,268 | ||
Reductions for increases in cash flows expected to be collected and recognized over the remaining life of securities | (28,586 | ) | |
Projected ending balance of the amount related to credit losses on debt securities at the end of the period for which a portion of an other-than-temporary impairment was recognized in other comprehensive income | $ | 96,682 |
Three-Month Period Ended September 30, | Nine-Month Period Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(in thousands) | |||||||||||||||
Proceeds from the sales of investment securities | $ | 27,260 | $ | 1,238,856 | $ | 2,942,125 | $ | 4,946,458 | |||||||
Gross realized gains | $ | 8 | $ | 41,958 | 77,470 | 124,345 | |||||||||
Gross realized losses | (159 | ) | (15 | ) | (1,089 | ) | (153 | ) | |||||||
Net realized gains | $ | (151 | ) | $ | 41,943 | $ | 76,381 | $ | 124,192 |
September 30, 2012 | December 31, 2011 | ||||||||||||
Amount | Percent | Amount | Percent | ||||||||||
(dollars in thousands) | |||||||||||||
Commercial loans held for investment: | |||||||||||||
Commercial real estate loans | $ | 10,182,326 | 19.5 | % | $ | 10,553,174 | 20.6 | % | |||||
Commercial and industrial loans | 13,003,139 | 24.9 | % | 11,084,292 | 21.6 | % | |||||||
Multi-family loans | 7,346,562 | 14.1 | % | 7,100,620 | 13.8 | % | |||||||
Other | 1,525,399 | 2.9 | % | 1,151,107 | 2.2 | % | |||||||
Total commercial loans held for investment | 32,057,426 | 61.4 | % | 29,889,193 | 58.2 | % | |||||||
Consumer loans secured by real estate: | |||||||||||||
Residential mortgages | 10,831,236 | 20.8 | % | 11,285,550 | 22.0 | % | |||||||
Home equity loans and lines of credit | 6,738,623 | 12.9 | % | 6,868,939 | 13.4 | % | |||||||
Total consumer loans secured by real estate | 17,569,859 | 33.7 | % | 18,154,489 | 35.4 | % | |||||||
Consumer loans not secured by real estate | |||||||||||||
Auto loans | 386,492 | 0.7 | % | 958,345 | 1.9 | % | |||||||
Other | 2,178,525 | 4.2 | % | 2,305,353 | 4.5 | % | |||||||
Total consumer loans | 20,134,876 | 38.6 | % | 21,418,187 | 41.8 | % | |||||||
Total loans held for investment (1) | $ | 52,192,302 | 100.0 | % | $ | 51,307,380 | 100.0 | % | |||||
Total loans held for investment: | |||||||||||||
Fixed rate | $ | 24,644,028 | 47.2 | % | $ | 26,280,371 | 51.2 | % | |||||
Variable rate | 27,548,274 | 52.8 | % | 25,027,009 | 48.8 | % | |||||||
Total loans held for investment (1) | $ | 52,192,302 | 100.0 | % | $ | 51,307,380 | 100.0 | % |
(1) | Total loans held for investment includes deferred loan origination costs, net of deferred loan fees and unamortized purchase premiums, net of discounts as well as purchase accounting adjustments. These items resulted in a net increase in loan balances of $86.5 million and $106.0 million as of September 30, 2012 and December 31, 2011, respectively. |
Three-Month Period Ended September 30, | Nine-Month Period Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(in thousands) | |||||||||||||||
Allowance for loan losses, beginning of period | $ | 1,055,501 | $ | 2,226,973 | $ | 1,083,492 | $ | 2,197,450 | |||||||
Allowance recorded as part of loans transferred from Santander | 413 | — | 3,754 | — | |||||||||||
Charge-offs: | |||||||||||||||
Commercial | 78,897 | 109,970 | 263,005 | 365,649 | |||||||||||
Consumer secured by real estate | 51,802 | 142,245 | 125,876 | 210,310 | |||||||||||
Consumer not secured by real estate(2) | 39,765 | 217,612 | 89,185 | 570,367 | |||||||||||
Total charge-offs | 170,464 | 469,827 | 478,066 | 1,146,326 | |||||||||||
Recoveries: | |||||||||||||||
Commercial | 11,421 | 14,698 | 31,979 | 34,409 | |||||||||||
Consumer secured by real estate | 1,503 | 2,830 | 5,858 | 5,241 | |||||||||||
Consumer not secured by real estate(2) | 10,747 | 58,673 | 29,819 | 201,879 | |||||||||||
Total recoveries | 23,671 | 76,201 | 67,656 | 241,529 | |||||||||||
Charge-offs, net of recoveries | 146,793 | 393,626 | 410,410 | 904,797 | |||||||||||
Provision for loan losses (1)(2) | 71,000 | 351,955 | 303,285 | 892,649 | |||||||||||
Allowance for loan losses, end of period | $ | 980,121 | $ | 2,185,302 | $ | 980,121 | $ | 2,185,302 | |||||||
Reserve for unfunded lending commitments, beginning of period | $ | 235,000 | $ | 340,843 | $ | 256,485 | $ | 300,621 | |||||||
(Release of)/ provision for unfunded lending commitments (1) | — | 16,758 | (21,485 | ) | 56,980 | ||||||||||
Reserve for unfunded lending commitments, end of period | $ | 235,000 | $ | 357,601 | $ | 235,000 | $ | 357,601 | |||||||
Total allowance for credit losses, end of period | $ | 1,215,121 | $ | 2,542,903 | $ | 1,215,121 | $ | 2,542,903 |
(1) | The Company defines the provision for credit losses on the Consolidated Statement of Comprehensive Income as the sum of the total provision for loan losses and provision for unfunded lending commitments. |
(2) | On December 31, 2011, the Company deconsolidated SCUSA as a result of certain agreements with investors entered into during the fourth quarter of 2011. See further discussion on the SCUSA Transaction in Note 1. The activity in the three-month and nine-month periods of 2012 does not include SCUSA activity. |
September 30, 2012 | December 31, 2011 | ||||||
(in thousands) | |||||||
Non-accrual loans: | |||||||
Commercial: | |||||||
Commercial real estate | $ | 303,335 | $ | 459,692 | |||
Commercial and industrial | 117,495 | 213,617 | |||||
Multi-family | 64,911 | 126,738 | |||||
Total commercial loans | 485,741 | 800,047 | |||||
Consumer: | |||||||
Residential mortgages | 519,931 | 438,461 | |||||
Consumer loans secured by real estate | 163,477 | 108,075 | |||||
Consumer loans not secured by real estate | 18,536 | 12,883 | |||||
Total consumer loans | 701,944 | 559,419 | |||||
Total non-accrual loans | 1,187,685 | 1,359,466 | |||||
Other real estate owned | 82,209 | 103,026 | |||||
Other repossessed assets | 4,255 | 5,671 | |||||
Total other real estate owned and other repossessed assets | 86,464 | 108,697 | |||||
Total non-performing assets | $ | 1,274,149 | $ | 1,468,163 |
September 30, 2012 | December 31, 2011 | ||||||
(in thousands) | |||||||
Impaired loans with a related allowance | $ | 1,005,098 | $ | 1,118,591 | |||
Impaired loans without a related allowance | 320,651 | 269,677 | |||||
Total impaired loans | $ | 1,325,749 | $ | 1,388,268 | |||
Allowance for loan losses reserved for impaired loans | $ | 258,432 | $ | 252,556 |
Contractual Receivable Amount | Nonaccretable Yield | Accretable Premium/(Yield) | Carrying Amount | |||||||||||||
(in thousands) | ||||||||||||||||
Balance, beginning of period December 31, 2010 | $ | 9,147,004 | $ | (966,463 | ) | $ | 210,459 | $ | 8,391,000 | |||||||
Customer repayments | (2,824,211 | ) | — | — | (2,824,211 | ) | ||||||||||
Charge-offs | (252,132 | ) | 252,132 | — | — | |||||||||||
Accretion of loan discount | — | — | (121,177 | ) | (121,177 | ) | ||||||||||
Transfers between nonaccretable and accretable yield | — | (5,431 | ) | 5,431 | — | |||||||||||
Settlement adjustments | 10,288 | (2,279 | ) | (262 | ) | 7,747 | ||||||||||
Balance, end of period September 30, 2011 | $ | 6,080,949 | $ | (722,041 | ) | $ | 94,451 | $ | 5,453,359 |
Credit Quality Classification(2) | ||||||||||||||||||||||||
Major Loan Classifications(1) September 30, 2012 | Corporate Banking | Continuing Care Retirement Communities | Middle Market Commercial Real Estate | Santander Real Estate Capital | Remaining Commercial | Total | ||||||||||||||||||
Commercial loans held for investment: | ||||||||||||||||||||||||
Commercial real estate | $ | 4,128,846 | $ | 268,137 | $ | 3,234,454 | $ | 2,550,889 | $ | — | $ | 10,182,326 | ||||||||||||
Commercial and industrial loans | 12,691,616 | 22,727 | 236,688 | 42,217 | 9,891 | 13,003,139 | ||||||||||||||||||
Multi-family loans | 224,618 | — | 236,432 | 6,885,512 | — | 7,346,562 | ||||||||||||||||||
Other | 559,337 | — | — | — | 966,062 | 1,525,399 | ||||||||||||||||||
Total commercial loans held for investment | $ | 17,604,417 | $ | 290,864 | $ | 3,707,574 | $ | 9,478,618 | $ | 975,953 | $ | 32,057,426 |
(1) | These loans represent the Company's loan categories based on the United States Securities and Exchange Commission's Regulation S-X article 9. |
(2) | These loans represent the Company's loan classes used to determine its allowance for loan and lease losses in accordance with ASU 2010-20. |
Credit Quality Classification(2) | ||||||||||||||||||||||||||||
Major Loan Classifications(1) September 30, 2012 | Home Mortgages(3) | Self-originated home equity | Indirect Auto | Indirect Purchased | Credit Cards | Remaining Consumer | Total | |||||||||||||||||||||
Consumer loans secured by real estate: | ||||||||||||||||||||||||||||
Residential mortgages | $ | 10,831,077 | $ | — | $ | — | $ | — | $ | — | $ | 159 | $ | 10,831,236 | ||||||||||||||
Home equity loans and lines of credit | — | 6,415,144 | — | — | — | 323,479 | 6,738,623 | |||||||||||||||||||||
Total consumer loans secured by real estate | 10,831,077 | 6,415,144 | — | — | — | 323,638 | 17,569,859 | |||||||||||||||||||||
Consumer loans not secured by real estate: | ||||||||||||||||||||||||||||
Auto loans | — | — | 338,396 | — | — | 48,096 | 386,492 | |||||||||||||||||||||
Other | — | — | — | 1,550,207 | 195,551 | 432,767 | 2,178,525 | |||||||||||||||||||||
Total consumer loans held for investment | $ | 10,831,077 | $ | 6,415,144 | $ | 338,396 | $ | 1,550,207 | $ | 195,551 | $ | 804,501 | $ | 20,134,876 |
(1) | These loans represent the Company's loan categories based on the United States Securities and Exchange Commission's Regulation S-X article 9. |
(2) | These loans represent the Company's loan classes used to determine its allowance for loan and lease losses in accordance with ASU 2010-20. |
(3) | Home mortgages exclude $772.1 million of loans held for sale. |
Credit Quality Classification(2) | ||||||||||||||||||||||||
Major Loan Classifications(1) December 31, 2011 | Corporate Banking | Continuing Care Retirement Communities | Middle Market Commercial Real Estate | Santander Real Estate Capital | Remaining Commercial | Total | ||||||||||||||||||
Commercial loans held for investment: | ||||||||||||||||||||||||
Commercial real estate | $ | 4,033,988 | $ | 175,444 | $ | 3,117,523 | $ | 2,839,714 | $ | 386,505 | $ | 10,553,174 | ||||||||||||
Commercial and industrial loans | 10,696,040 | 54,501 | 289,103 | 27,591 | 17,057 | 11,084,292 | ||||||||||||||||||
Multi-family loans | 222,269 | — | 447,694 | 6,430,657 | — | 7,100,620 | ||||||||||||||||||
Other | 292,063 | — | — | — | 859,044 | 1,151,107 | ||||||||||||||||||
Total commercial loans held for investment | $ | 15,244,360 | $ | 229,945 | $ | 3,854,320 | $ | 9,297,962 | $ | 1,262,606 | $ | 29,889,193 |
(1) | These loans represent the Company's loan categories based on the United States Securities and Exchange Commission's Regulation S-X article 9. |
(2) | These loans represent the Company's loan classes used to determine its allowance for loan and lease losses in accordance with ASU 2010-20. |
Credit Quality Classification(2) | ||||||||||||||||||||||||||||
Major Loan Classifications(1) December 31, 2011 | Home Mortgages(3) | Self-originated home equity | Indirect Auto | Indirect Purchased | Credit Cards | Remaining Consumer | Total | |||||||||||||||||||||
Consumer loans secured by real estate: | ||||||||||||||||||||||||||||
Residential mortgages | $ | 11,284,106 | $ | — | $ | — | $ | — | $ | — | $ | 1,444 | $ | 11,285,550 | ||||||||||||||
Home equity loans and lines of credit | — | 6,504,482 | — | — | — | 364,457 | 6,868,939 | |||||||||||||||||||||
Total consumer loans secured by real estate | 11,284,106 | 6,504,482 | — | — | — | 365,901 | 18,154,489 | |||||||||||||||||||||
Consumer loans not secured by real estate: | ||||||||||||||||||||||||||||
Auto loans | — | — | 761,590 | — | — | 196,755 | 958,345 | |||||||||||||||||||||
Other | — | — | — | 1,832,298 | 187,995 | 285,060 | 2,305,353 | |||||||||||||||||||||
Total consumer loans held for investment | $ | 11,284,106 | $ | 6,504,482 | $ | 761,590 | $ | 1,832,298 | $ | 187,995 | $ | 847,716 | $ | 21,418,187 |
(1) | These loans represent the Company's loan categories based on the United States Securities and Exchange Commission's Regulation S-X article 9. |
(2) | These loans represent the Company's loan classes used to determine its allowance for loan and lease losses in accordance with ASU 2010-20. |
(3) | Home mortgages exclude $352.5 million of loans held for sale. |
Three-Month Period Ended September 30, 2012 | |||||||||||||||
Commercial | Consumer | Unallocated | Total | ||||||||||||
Allowance for loan losses, beginning of period | $ | 656,883 | $ | 357,543 | $ | 41,075 | $ | 1,055,501 | |||||||
Allowance recorded as part of loans transferred from Santander | 413 | — | — | 413 | |||||||||||
Provision for loan losses | (1,457 | ) | 109,808 | (37,351 | ) | 71,000 | |||||||||
Charge-offs | (78,897 | ) | (91,567 | ) | — | (170,464 | ) | ||||||||
Recoveries | 11,421 | 12,250 | — | 23,671 | |||||||||||
Charge-offs, net of recoveries | (67,476 | ) | (79,317 | ) | — | (146,793 | ) | ||||||||
Allowance for loan losses, end of period | $ | 588,363 | $ | 388,034 | $ | 3,724 | $ | 980,121 | |||||||
Nine-Month Period Ended September 30, 2012 | |||||||||||||||
Commercial | Consumer | Unallocated | Total | ||||||||||||
Allowance for loan losses, beginning of period | $ | 766,865 | $ | 292,816 | $ | 23,811 | $ | 1,083,492 | |||||||
Allowance recorded as part of loans transferred from Santander | 3,754 | — | — | 3,754 | |||||||||||
Provision for loan losses | 48,770 | 274,602 | (20,087 | ) | 303,285 | ||||||||||
Charge-offs | (263,005 | ) | (215,061 | ) | — | (478,066 | ) | ||||||||
Recoveries | 31,979 | 35,677 | — | 67,656 | |||||||||||
Charge-offs, net of recoveries | (231,026 | ) | (179,384 | ) | — | (410,410 | ) | ||||||||
Allowance for loan losses, end of period | $ | 588,363 | $ | 388,034 | $ | 3,724 | $ | 980,121 | |||||||
Ending balance, individually evaluated for impairment | $ | 108,663 | $ | 149,769 | $ | — | $ | 258,432 | |||||||
Ending balance, collectively evaluated for impairment | 479,700 | 238,265 | 3,724 | 721,689 | |||||||||||
Financing receivables: | |||||||||||||||
Ending balance | $ | 32,057,426 | $ | 20,906,964 | $ | — | $ | 52,964,390 | |||||||
Ending balance, evaluated at fair value | — | 772,088 | — | 772,088 | |||||||||||
Ending balance, individually evaluated for impairment | 578,473 | 747,276 | — | 1,325,749 | |||||||||||
Ending balance, collectively evaluated for impairment | 31,478,953 | 19,387,600 | — | 50,866,553 |
Three-Month Period Ended September 30, 2011 | |||||||||||||||
Commercial | Consumer | Unallocated | Total | ||||||||||||
Allowance for loan losses, beginning of period | $ | 846,060 | $ | 1,348,101 | $ | 32,812 | $ | 2,226,973 | |||||||
Provision for loan losses | 113,486 | 268,902 | (30,433 | ) | 351,955 | ||||||||||
Charge-offs | (109,970 | ) | (359,857 | ) | — | (469,827 | ) | ||||||||
Recoveries | 14,698 | 61,503 | — | 76,201 | |||||||||||
Charge-offs, net of recoveries | (95,272 | ) | (298,354 | ) | — | (393,626 | ) | ||||||||
Allowance for loan losses, end of period | $ | 864,274 | $ | 1,318,649 | $ | 2,379 | $ | 2,185,302 | |||||||
Nine-Month Period Ended September 30, 2011 | |||||||||||||||
Commercial | Consumer | Unallocated | Total | ||||||||||||
Allowance for loan losses, beginning of period | $ | 905,786 | $ | 1,275,982 | $ | 15,682 | $ | 2,197,450 | |||||||
Provision for loan losses | 289,728 | 616,224 | (13,303 | ) | 892,649 | ||||||||||
Charge-offs | (365,649 | ) | (780,677 | ) | — | (1,146,326 | ) | ||||||||
Recoveries | 34,409 | 207,120 | — | 241,529 | |||||||||||
Charge-offs, net of recoveries | (331,240 | ) | (573,557 | ) | — | (904,797 | ) | ||||||||
Allowance for loan losses, end of period | $ | 864,274 | $ | 1,318,649 | $ | 2,379 | $ | 2,185,302 | |||||||
Ending balance, individually evaluated for impairment | 303,378 | 58,355 | — | 361,733 | |||||||||||
Ending balance, collectively evaluated for impairment | 560,896 | 1,090,462 | 2,379 | 1,653,737 | |||||||||||
Purchased impaired loans | — | 169,832 | — | 169,832 | |||||||||||
Financing receivables: | |||||||||||||||
Ending balance | $ | 29,246,025 | $ | 36,521,690 | $ | — | $ | 65,767,715 | |||||||
Ending balance, evaluated at fair value | — | 141,096 | — | 141,096 | |||||||||||
Ending balance, individually evaluated for impairment | 933,776 | 680,875 | — | 1,614,651 | |||||||||||
Ending balance, collectively evaluated for impairment | 28,312,249 | 30,300,231 | — | 58,612,480 | |||||||||||
Purchased impaired loans | — | 5,399,488 | — | 5,399,488 |
September 30, 2012 | December 31, 2011 | ||||||
(in thousands) | |||||||
Non-accrual loans: | |||||||
Commercial: | |||||||
Corporate banking | $ | 216,459 | $ | 304,309 | |||
Middle market commercial real estate | 90,842 | 167,446 | |||||
Continuing care retirement communities | 99,129 | 198,131 | |||||
Santander real estate capital | 77,404 | 127,537 | |||||
Remaining commercial | 1,907 | 2,624 | |||||
Total commercial loans | 485,741 | 800,047 | |||||
Consumer: | |||||||
Home mortgages | 519,931 | 438,461 | |||||
Self-originated home equity | 109,934 | 64,481 | |||||
Indirect auto | 5,085 | 3,062 | |||||
Indirect purchased | 4,923 | 2,005 | |||||
Remaining consumer | 62,071 | 51,410 | |||||
Total consumer loans | 701,944 | 559,419 | |||||
Total non-accrual loans | $ | 1,187,685 | $ | 1,359,466 |
30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days (2) | Total Past Due | Current | Total Financing Receivables (1) | Recorded Investment > 90 Days and Accruing | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Corporate banking | $ | 39,845 | $ | 15,661 | $ | 114,210 | $ | 169,716 | $ | 17,434,701 | $ | 17,604,417 | $ | — | |||||||||||||
Middle market commercial real estate | 14,415 | 962 | 42,297 | 57,674 | 3,649,900 | 3,707,574 | — | ||||||||||||||||||||
Continuing care retirement communities | — | — | 53,287 | 53,287 | 237,577 | 290,864 | — | ||||||||||||||||||||
Santander real estate capital | 21,125 | 5,541 | 38,202 | 64,868 | 9,413,750 | 9,478,618 | — | ||||||||||||||||||||
Remaining commercial | 2,084 | 125 | 1,387 | 3,596 | 972,357 | 975,953 | — | ||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Home mortgages | 198,782 | 91,817 | 451,692 | 742,291 | 10,860,874 | 11,603,165 | — | ||||||||||||||||||||
Self-originated home equity | 40,380 | 20,646 | 74,988 | 136,014 | 6,279,130 | 6,415,144 | — | ||||||||||||||||||||
Indirect auto | 25,950 | 6,642 | 2,170 | 34,762 | 303,634 | 338,396 | — | ||||||||||||||||||||
Indirect purchased | 10,108 | 3,576 | 3,392 | 17,076 | 1,533,131 | 1,550,207 | — | ||||||||||||||||||||
Credit cards | 1,549 | 1,229 | 2,994 | 5,772 | 189,779 | 195,551 | 2,993 | ||||||||||||||||||||
Remaining consumer | 16,617 | 11,696 | 54,735 | 83,048 | 721,453 | 804,501 | — | ||||||||||||||||||||
Total | $ | 370,855 | $ | 157,895 | $ | 839,354 | $ | 1,368,104 | $ | 51,596,286 | $ | 52,964,390 | $ | 2,993 |
30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days (2) | Total Past Due | Current | Total Financing Receivables (1) | Recorded Investment > 90 Days and Accruing | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Corporate banking | $ | 38,347 | $ | 36,498 | $ | 180,017 | $ | 254,862 | $ | 14,989,498 | $ | 15,244,360 | $ | 1,211 | |||||||||||||
Middle market commercial real estate | 14,862 | 16,508 | 79,160 | 110,530 | 3,743,790 | 3,854,320 | — | ||||||||||||||||||||
Continuing care retirement communities | 4,632 | 2,812 | 6,491 | 13,935 | 216,010 | 229,945 | — | ||||||||||||||||||||
Santander real estate capital | 8,383 | 24,214 | 89,885 | 122,482 | 9,175,480 | 9,297,962 | — | ||||||||||||||||||||
Remaining commercial | 2,568 | 13,765 | 132,741 | 149,074 | 1,113,532 | 1,262,606 | — | ||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Home mortgages | 224,957 | 110,007 | 438,461 | 773,425 | 10,863,152 | 11,636,577 | — | ||||||||||||||||||||
Self-originated home equity | 22,026 | 13,272 | 64,482 | 99,780 | 6,404,702 | 6,504,482 | — | ||||||||||||||||||||
Indirect auto | 43,386 | 10,624 | 3,062 | 57,072 | 704,518 | 761,590 | — | ||||||||||||||||||||
Indirect purchased | 11,101 | 4,683 | 2,005 | 17,789 | 1,814,509 | 1,832,298 | — | ||||||||||||||||||||
Credit cards | 1,867 | 1,491 | 3,697 | 7,055 | 180,940 | 187,995 | 3,697 | ||||||||||||||||||||
Remaining consumer | 26,879 | 12,881 | 51,410 | 91,170 | 756,546 | 847,716 | — | ||||||||||||||||||||
Total | $ | 399,008 | $ | 246,755 | $ | 1,051,411 | $ | 1,697,174 | $ | 49,962,677 | $ | 51,659,851 | $ | 4,908 |
(1) | Financing receivables include loans held for sale. |
(2) | Financing receivables greater than 90 days past due include TDRs for which six consecutive payments have not been received. |
September 30, 2012 | Recorded Investment | Unpaid Principal Balance | Related Specific Reserves | Average Recorded Investment | ||||||||||||
(in thousands) | ||||||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial: | ||||||||||||||||
Corporate banking | $ | 57,991 | $ | 83,144 | $ | — | $ | 50,315 | ||||||||
Middle market commercial real estate | 68,404 | 69,821 | — | 75,254 | ||||||||||||
Continuing care retirement communities | 45,033 | 45,033 | — | 45,965 | ||||||||||||
Santander real estate capital | 20,226 | 21,234 | — | 21,975 | ||||||||||||
Remaining commercial | 9,835 | 9,835 | — | 13,446 | ||||||||||||
Consumer: | ||||||||||||||||
Home mortgages | 68,141 | 76,703 | — | 34,071 | ||||||||||||
Self-originated home equity | 38,364 | 47,922 | — | 38,343 | ||||||||||||
Indirect auto | 2,956 | 7,390 | — | 1,478 | ||||||||||||
Indirect purchased | 1,633 | 3,629 | — | 817 | ||||||||||||
Remaining consumer | 8,068 | 13,794 | — | 13,502 | ||||||||||||
With an allowance recorded: | ||||||||||||||||
Commercial: | ||||||||||||||||
Corporate banking | 132,868 | 145,210 | 51,927 | 168,149 | ||||||||||||
Middle market commercial real estate | 88,829 | 107,726 | 15,437 | 110,472 | ||||||||||||
Continuing care retirement communities | 72,156 | 128,886 | 17,076 | 120,855 | ||||||||||||
Santander real estate capital | 83,131 | 98,187 | 24,223 | 100,117 | ||||||||||||
Remaining commercial | — | — | — | 979 | ||||||||||||
Consumer: | ||||||||||||||||
Home mortgages | 559,218 | 601,782 | 138,359 | 526,825 | ||||||||||||
Self-originated home equity | 42,627 | 46,885 | 4,452 | 21,314 | ||||||||||||
Indirect auto | — | — | ||||||||||||||
Credit cards | 6,190 | 6,190 | 2,692 | 3,095 | ||||||||||||
Remaining consumer | 20,079 | 22,154 | 4,266 | 10,040 | ||||||||||||
Total: | ||||||||||||||||
Commercial | $ | 578,473 | $ | 709,076 | $ | 108,663 | $ | 707,527 | ||||||||
Consumer | 747,276 | 826,449 | 149,769 | 649,485 | ||||||||||||
Total | $ | 1,325,749 | $ | 1,535,525 | $ | 258,432 | $ | 1,357,012 |
December 31, 2011 | Recorded Investment | Unpaid Principal Balance | Related Specific Reserves | Average Recorded Investment | ||||||||||||
(in thousands) | ||||||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial: | ||||||||||||||||
Corporate banking | $ | 42,639 | $ | 55,673 | $ | — | $ | 88,397 | ||||||||
Middle market commercial real estate | 82,104 | 102,788 | — | 72,053 | ||||||||||||
Continuing care retirement communities | 46,897 | 63,210 | — | 23,940 | ||||||||||||
Santander real estate capital | 23,723 | 24,731 | — | 29,164 | ||||||||||||
Remaining commercial | 17,057 | 17,057 | — | 8,529 | ||||||||||||
Consumer: | ||||||||||||||||
Home mortgages | — | — | — | 33,879 | ||||||||||||
Self-originated home equity | 38,322 | 38,699 | — | 19,161 | ||||||||||||
Remaining consumer | 18,935 | 19,684 | — | 9,468 | ||||||||||||
With an allowance recorded: | ||||||||||||||||
Commercial: | ||||||||||||||||
Corporate banking | 203,430 | 260,620 | 100,551 | 195,363 | ||||||||||||
Middle market commercial real estate | 132,115 | 169,361 | 27,473 | 194,877 | ||||||||||||
Continuing care retirement communities | 169,554 | 270,470 | 60,632 | 136,819 | ||||||||||||
Santander real estate capital | 117,103 | 125,114 | 28,494 | 106,843 | ||||||||||||
Remaining commercial | 1,958 | 2,553 | 715 | 13,978 | ||||||||||||
Consumer: | ||||||||||||||||
Home mortgages | 494,431 | 507,898 | 34,691 | 519,754 | ||||||||||||
Indirect auto | — | — | — | 101,222 | ||||||||||||
Total: | ||||||||||||||||
Commercial | $ | 836,580 | $ | 1,091,577 | $ | 217,865 | $ | 869,963 | ||||||||
Consumer | 551,688 | 566,281 | 34,691 | 683,484 | ||||||||||||
Total | $ | 1,388,268 | $ | 1,657,858 | $ | 252,556 | $ | 1,553,447 |
September 30, 2012 | Corporate banking | Middle market commercial real estate | Continuing care retirement communities | Santander real estate capital | Remaining commercial | Total | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Regulatory Rating: | ||||||||||||||||||||||||
Pass | $ | 16,510,399 | $ | 2,753,337 | $ | 73,932 | $ | 8,825,535 | $ | 939,440 | $ | 29,102,643 | ||||||||||||
Special Mention | 440,760 | 553,125 | 29,922 | 458,480 | 16,036 | 1,498,323 | ||||||||||||||||||
Substandard | 564,100 | 358,325 | 108,361 | 143,291 | 20,477 | 1,194,554 | ||||||||||||||||||
Doubtful | 89,158 | 42,787 | 78,649 | 51,312 | — | 261,906 | ||||||||||||||||||
Total commercial loans | $ | 17,604,417 | $ | 3,707,574 | $ | 290,864 | $ | 9,478,618 | $ | 975,953 | $ | 32,057,426 |
December 31, 2011 | Corporate banking | Middle market commercial real estate | Continuing care retirement communities | Santander real estate capital | Remaining commercial | Total | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Regulatory Rating: | ||||||||||||||||||||||||
Pass | $ | 13,907,745 | $ | 2,625,160 | $ | 186,914 | $ | 8,750,869 | $ | 921,325 | $ | 26,392,013 | ||||||||||||
Special Mention | 531,205 | 639,258 | 29,480 | 284,757 | 38,293 | 1,522,993 | ||||||||||||||||||
Substandard | 690,303 | 485,994 | 10,460 | 228,210 | 104,802 | 1,519,769 | ||||||||||||||||||
Doubtful | 115,107 | 103,908 | 3,091 | 34,126 | 198,186 | 454,418 | ||||||||||||||||||
Total commercial loans | $ | 15,244,360 | $ | 3,854,320 | $ | 229,945 | $ | 9,297,962 | $ | 1,262,606 | $ | 29,889,193 |
September 30, 2012 | Home mortgages | Self-originated home equity | Indirect auto | Indirect purchased | Credit cards | Remaining consumer | Total(1) | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Performing | $ | 11,083,234 | $ | 6,305,210 | $ | 333,311 | $ | 1,545,284 | $ | 195,551 | $ | 742,430 | $ | 20,205,020 | ||||||||||||||
Non-performing | 519,931 | 109,934 | 5,085 | 4,923 | — | 62,071 | 701,944 | |||||||||||||||||||||
Total consumer loans | $ | 11,603,165 | $ | 6,415,144 | $ | 338,396 | $ | 1,550,207 | $ | 195,551 | $ | 804,501 | $ | 20,906,964 |
December 31, 2011 | Home mortgages | Self-originated home equity | Indirect auto | Indirect purchased | Credit cards | Remaining consumer | Total(1) | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Performing | $ | 11,198,116 | $ | 6,440,001 | $ | 758,528 | $ | 1,830,293 | $ | 187,995 | $ | 796,306 | $ | 21,211,239 | ||||||||||||||
Non-performing | 438,461 | 64,481 | 3,062 | 2,005 | — | 51,410 | 559,419 | |||||||||||||||||||||
Total consumer loans | $ | 11,636,577 | $ | 6,504,482 | $ | 761,590 | $ | 1,832,298 | $ | 187,995 | $ | 847,716 | $ | 21,770,658 |
(1) | Financing receivables include loans held for sale. |
September 30, 2012 | |||||||||||||||||||||
Credit Score Range(2) | Remaining Consumer Balance | Percent | Indirect Auto Balance | Percent | Credit Cards Balance | Percent | |||||||||||||||
<620 | 135,672 | 16.9 | % | 154,767 | 45.8 | % | 12,646 | 6.47 | % | ||||||||||||
620-639 | 30,629 | 3.8 | % | 16,356 | 4.8 | % | 6,240 | 3.19 | % | ||||||||||||
640-659 | 36,059 | 4.5 | % | 17,302 | 5.1 | % | 9,415 | 4.81 | % | ||||||||||||
660-679 | 45,121 | 5.6 | % | 18,216 | 5.4 | % | 15,422 | 7.89 | % | ||||||||||||
680-699 | 43,228 | 5.4 | % | 17,999 | 5.3 | % | 23,158 | 11.84 | % | ||||||||||||
700-719 | 47,856 | 5.9 | % | 16,817 | 5.0 | % | 29,591 | 15.14 | % | ||||||||||||
720-739 | 41,967 | 5.2 | % | 14,623 | 4.3 | % | 27,615 | 14.12 | % | ||||||||||||
740-759 | 36,674 | 4.6 | % | 13,682 | 4.0 | % | 23,275 | 11.90 | % | ||||||||||||
760-779 | 31,347 | 3.9 | % | 11,778 | 3.5 | % | 18,159 | 9.29 | % | ||||||||||||
780-799 | 29,258 | 3.6 | % | 10,817 | 3.2 | % | 14,636 | 7.48 | % | ||||||||||||
>=800 | 91,203 | 11.3 | % | 40,557 | 12.0 | % | 14,766 | 7.55 | % | ||||||||||||
N/A(1) | 235,487 | 29.3 | % | 5,482 | 1.6 | % | 628 | 0.32 | % | ||||||||||||
Total | $ | 804,501 | 100 | % | $ | 338,396 | 100 | % | $ | 195,551 | 100 | % |
(1) | Consists primarily of non-strategic auto loans in run-off serviced by third parties. Loans serviced by third parties do not receive refreshed FICO scores. |
(2) | Credit scores updated quarterly. |
December 31, 2011 | |||||||||||||||||||||
Credit Score Range(2) | Remaining Consumer Balance | Percent | Indirect Auto Balance | Percent | Credit Cards Balance | Percent | |||||||||||||||
<620 | 140,686 | 16.6 | % | 277,364 | 36.5 | % | 14,402 | 7.66 | % | ||||||||||||
620-639 | 28,332 | 3.3 | % | 39,038 | 5.1 | % | 6,164 | 3.28 | % | ||||||||||||
640-659 | 35,883 | 4.2 | % | 44,907 | 5.9 | % | 9,579 | 5.10 | % | ||||||||||||
660-679 | 43,116 | 5.1 | % | 50,038 | 6.6 | % | 13,736 | 7.31 | % | ||||||||||||
680-699 | 41,162 | 4.9 | % | 53,306 | 7.0 | % | 20,761 | 11.04 | % | ||||||||||||
700-719 | 44,027 | 5.2 | % | 52,563 | 6.9 | % | 27,080 | 14.39 | % | ||||||||||||
720-739 | 41,299 | 4.9 | % | 47,204 | 6.2 | % | 26,162 | 13.92 | % | ||||||||||||
740-759 | 37,264 | 4.4 | % | 42,170 | 5.5 | % | 22,806 | 12.13 | % | ||||||||||||
760-779 | 28,486 | 3.4 | % | 39,565 | 5.2 | % | 17,288 | 9.20 | % | ||||||||||||
780-799 | 26,229 | 3.1 | % | 35,756 | 4.7 | % | 14,186 | 7.55 | % | ||||||||||||
>=800 | 97,039 | 11.4 | % | 62,776 | 8.2 | % | 15,449 | 8.22 | % | ||||||||||||
N/A(1) | 284,193 | 33.5 | % | 16,903 | 2.2 | % | 382 | 0.20 | % | ||||||||||||
Total | $ | 847,716 | 100 | % | $ | 761,590 | 100 | % | $ | 187,995 | 100 | % |
(1) | Consists primarily of non-strategic auto loans in run-off serviced by third parties. Loans serviced by third parties do not receive refreshed FICO scores. |
(2) | Credit scores updated quarterly. |
September 30, 2012 | ||||||||||||||
Home mortgages | Self-originated home equity | |||||||||||||
CLTV Range(1) | UPB | Percent | UPB | Percent | ||||||||||
($ in thousands) | ||||||||||||||
<=80% | $ | 7,766,161 | 67.0 | % | $ | 3,925,435 | 61.2 | % | ||||||
80.01 - 90% | 1,037,650 | 8.9 | % | 1,027,860 | 16.0 | % | ||||||||
90.01 - 100% | 747,613 | 6.4 | % | 442,045 | 6.9 | % | ||||||||
100.01 - 120% | 618,267 | 5.3 | % | 504,586 | 7.9 | % | ||||||||
120.01 - 140% | 262,275 | 2.3 | % | 207,762 | 3.2 | % | ||||||||
>140% | 282,993 | 2.4 | % | 183,337 | 2.9 | % | ||||||||
N/A | 888,206 | 7.7 | % | 124,119 | 1.9 | % | ||||||||
Total(2) | $ | 11,603,165 | 100 | % | $ | 6,415,144 | 100 | % |
December 31, 2011 | ||||||||||||||
Home mortgages | Self-originated home equity | |||||||||||||
CLTV Range(1) | UPB | Percent | UPB | Percent | ||||||||||
($ in thousands) | ||||||||||||||
<=80% | $ | 7,241,182 | 62.3 | % | $ | 3,861,018 | 59.3 | % | ||||||
80.01 - 90% | 1,332,186 | 11.4 | % | 1,038,291 | 16.0 | % | ||||||||
90.01 - 100% | 803,886 | 6.9 | % | 473,404 | 7.3 | % | ||||||||
100.01 - 120% | 745,799 | 6.4 | % | 556,595 | 8.6 | % | ||||||||
120.01 - 140% | 309,192 | 2.7 | % | 227,117 | 3.5 | % | ||||||||
>140% | 325,965 | 2.8 | % | 196,176 | 3.0 | % | ||||||||
N/A | 878,367 | 7.5 | % | 151,881 | 2.3 | % | ||||||||
Total(2) | $ | 11,636,577 | 100.0 | % | $ | 6,504,482 | 100 | % |
(1) | CTLV is inclusive of senior lien balances and updated as deemed necessary. |
(2) | Financing receivables includes loans held for sale. |
September 30, 2012 | December 31, 2011 | ||||||
(in thousands) | |||||||
Performing | $ | 609,087 | $ | 527,646 | |||
Non-performing | 405,180 | 217,255 | |||||
Total | $ | 1,014,267 | $ | 744,901 |
Three-Month Period Ended September 30, 2012 | ||||||||||
Number of Contracts | Pre-Modification Outstanding Recorded Investment (1) | Post-Modification Outstanding Recorded Investment (2) | ||||||||
Commercial: | ||||||||||
Middle market commercial real estate | 10 | $ | 30,137 | $ | 29,457 | |||||
Continuing care retirement communities | — | — | — | |||||||
Santander real estate capital | 1 | 5,640 | 5,515 | |||||||
Remaining commercial | — | — | — | |||||||
Consumer: | ||||||||||
Home mortgages(3) | 759 | 103,106 | 100,272 | |||||||
Self-originated home equity | 1,072 | 60,478 | 47,306 | |||||||
Indirect auto | 1,588 | 7,904 | 2,956 | |||||||
Indirect purchased | 306 | $ | 6,916 | $ | 3,013 | |||||
Remaining consumer | 480 | $ | 731 | $ | 52 | |||||
Total | 4,216 | $ | 214,912 | $ | 188,571 |
Nine-Month Period Ended September 30, 2012 | ||||||||||
Number of Contracts | Pre-Modification Outstanding Recorded Investment (1) | Post-Modification Outstanding Recorded Investment (2) | ||||||||
Commercial: | ||||||||||
Middle market commercial real estate | 13 | $ | 66,833 | $ | 65,560 | |||||
Continuing care retirement communities | 2 | 33,664 | 21,423 | |||||||
Santander real estate capital | 2 | 11,079 | 10,954 | |||||||
Remaining commercial | 7 | 43,845 | 50,971 | |||||||
Consumer: | ||||||||||
Home mortgages (3) | 1,064 | 172,871 | 169,711 | |||||||
Self-originated home equity | 1,157 | 66,732 | 55,692 | |||||||
Indirect auto | 1,588 | 7,904 | 2,956 | |||||||
Indirect purchased | 306 | 6,916 | 3,013 | |||||||
Remaining consumer | 480 | 731 | 52 | |||||||
Total | 4,619 | $ | 410,575 | $ | 380,332 |
(1) | Pre-modification outstanding recorded investment amount is the month-end balance prior to the month the modification occurred. Dollars in thousands. |
(2) | Post-modification outstanding recorded investment amount is the month-end balance for the month that the modification occurred. Dollars in thousands. |
(3) | The Post-modification outstanding recorded investment amounts for home mortgages exclude interest reserves. |
Three-Month Period Ended September 30, 2012 | ||||||
Number of Contracts | Recorded Investment (1) | |||||
Consumer: | ||||||
Home mortgages | 4 | $ | 724 | |||
Self-originated home equity | 2 | 117 | ||||
Total | 6 | $ | 841 |
Nine-Month Period Ended September 30, 2012 | ||||||
Number of Contracts | Recorded Investment (1) | |||||
Consumer: | ||||||
Home mortgages | 5 | $ | 864 | |||
Self-originated home equity | 3 | 164 | ||||
Total | 8 | $ | 1,028 |
(1) | The recorded investment represents the period-end balance at September 30, 2012. Dollars in thousands. |
Maximum Exposure | ||||||||||||||||||||
Carrying | Carrying | Investment | ||||||||||||||||||
Amount of | Amount of | in | ||||||||||||||||||
September 30, 2012 | Assets(1) | Liabilities(1) | Equity | Commitments | Total | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Low income housing partnerships | $ | 65,890 | $ | — | $ | 65,890 | $ | — | $ | 65,890 | ||||||||||
New market partnerships | 46,727 | — | 46,727 | 154 | 46,881 | |||||||||||||||
Total | $ | 112,617 | $ | — | $ | 112,617 | $ | 154 | $ | 112,771 | ||||||||||
Maximum Exposure | ||||||||||||||||||||
Carrying | Carrying | Investment | ||||||||||||||||||
Amount of | Amount of | in | ||||||||||||||||||
December 31, 2011 | Assets(1) | Liabilities(1) | Equity | Commitments | Total | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Low income housing partnerships | $ | 88,600 | $ | — | $ | 88,600 | $ | — | $ | 88,600 | ||||||||||
New market partnerships | 67,802 | — | 67,802 | 167 | 67,969 | |||||||||||||||
Total | $ | 156,402 | $ | — | $ | 156,402 | $ | 167 | $ | 156,569 | ||||||||||
Retail Banking | Specialized Business Group | Corporate | Global Banking | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Goodwill at December 31, 2011 | $ | 2,259,179 | $ | — | $ | 1,172,302 | — | $ | 3,431,481 | |||||||||||
Purchase accounting adjustments/Impairment | — | — | — | — | — | |||||||||||||||
Goodwill at September 30, 2012 | $ | 2,259,179 | $ | — | $ | 1,172,302 | $ | — | $ | 3,431,481 |
September 30, 2012 | December 31, 2011 | ||||||||||||||
Net Carrying Amount | Accumulated Amortization | Net Carrying Amount | Accumulated Amortization | ||||||||||||
(in thousands) | |||||||||||||||
Core deposit intangibles | $ | 53,568 | $ | 185,532 | $ | 79,389 | $ | 159,711 | |||||||
Purchased credit card relationships (“PCCR”) | 7,707 | 6,498 | 9,636 | 4,568 | |||||||||||
Operating lease agreements | 8,952 | 6,752 | 10,146 | 5,558 | |||||||||||
Total | $ | 70,227 | $ | 198,782 | $ | 99,171 | $ | 169,837 |
Nine-Month Period Ended September 30, | |||||||
2012 | 2011 | ||||||
(in thousands) | |||||||
Gross book balance at beginning of period | $ | 161,291 | $ | 173,549 | |||
Write-off of reserves | (70,040 | ) | — | ||||
Mortgage servicing assets recognized | 31,616 | 17,926 | |||||
Amortization and permanent impairment | — | (26,659 | ) | ||||
Change in fair value | (44,772 | ) | — | ||||
Gross balance at end of period | 78,095 | 164,816 | |||||
Valuation allowance | — | (70,040 | ) | ||||
Book balance at end of period | $ | 78,095 | $ | 94,776 |
Nine-Month Period Ended September 30, | |||||||
2012 | 2011 | ||||||
(in thousands) | |||||||
Balance at beginning of period | $ | 70,040 | $ | 27,525 | |||
Write-off of reserves | (70,040 | ) | — | ||||
Net change in valuation allowance for mortgage servicing rights | — | 42,515 | |||||
Balance at end of period | $ | — | $ | 70,040 |
Notional Amount | Asset | Liability | Receive Rate | Pay Rate | WeightedAverage Life (Years) | ||||||||||||||
(in thousands) | |||||||||||||||||||
September 30, 2012 | |||||||||||||||||||
Fair value hedges: | |||||||||||||||||||
Cross-currency swaps | $ | 79,765 | $ | 12,951 | $ | 10,946 | 3.42 | % | 3.41 | % | 4 | ||||||||
Cash flow hedges: | |||||||||||||||||||
Pay fixed — receive floating interest rate swaps | 3,902,738 | 636 | 139,915 | 0.43 | % | 2.47 | % | 2.2 | |||||||||||
Total | $ | 3,982,503 | $ | 13,587 | $ | 150,861 | 0.49 | % | 2.48 | % | 2.2 | ||||||||
December 31, 2011 | |||||||||||||||||||
Fair Value hedges: | |||||||||||||||||||
Cross-currency swaps | $ | 33,367 | $ | 3,888 | $ | 3,346 | 3.93 | % | 3.90 | % | 4.8 | ||||||||
Cash flow hedges: | |||||||||||||||||||
Pay fixed — receive floating interest rate swaps | 3,900,000 | — | 158,174 | 0.46 | % | 2.68 | % | 2.2 | |||||||||||
Total | $ | 3,933,367 | $ | 3,888 | $ | 161,520 | 0.49 | % | 2.69 | % | 2.3 |
Asset derivatives Fair value | Liability derivatives Fair value | ||||||||||||||
September 30, 2012 | December 31, 2011 | September 30, 2012 | December 31, 2011 | ||||||||||||
(in thousands) | |||||||||||||||
Mortgage banking derivatives: | |||||||||||||||
Forward commitments to sell loans | $ | — | $ | — | $ | 27,976 | $ | 8,574 | |||||||
Interest rate lock commitments | 39,054 | 7,323 | — | — | |||||||||||
Total mortgage banking risk management | 39,054 | 7,323 | 27,976 | 8,574 | |||||||||||
Customer related derivatives: | |||||||||||||||
Swaps receive fixed | 396,837 | 357,062 | — | 95 | |||||||||||
Swaps pay fixed | 218 | 126 | 395,343 | 379,423 | |||||||||||
Cross currency swaps | 348 | — | 279 | — | |||||||||||
Other | 2,489 | 4,161 | 2,376 | 4,014 | |||||||||||
Total customer related derivatives | 399,892 | 361,349 | 397,998 | 383,532 | |||||||||||
Other derivative activities: | |||||||||||||||
VISA total return swap | — | — | 669 | 5,460 | |||||||||||
Foreign exchange contracts | 12,289 | 11,950 | 11,732 | 11,930 | |||||||||||
Mortgage servicing right hedges | 652 | — | 182 | — | |||||||||||
Other | 11,670 | 12,098 | 11,461 | 12,375 | |||||||||||
Total | $ | 463,557 | $ | 392,720 | $ | 450,018 | $ | 421,871 |
Three-Month Period Ended | ||||
Derivative Activity | September 30, 2012 | September 30, 2011 | ||
Fair value hedges: | ||||
Cross-currency swaps | Decrease in other income of $0.1 million. | No effect on income | ||
Cash flow hedges: | ||||
Pay fixed-receive variable interest rate swaps | Decrease in net interest income of $19.6 million. | Decrease in net interest income of $44.3 million. | ||
Other derivative activities: | ||||
Forward commitments to sell loans | Decrease in mortgage banking revenues of $16.5 million. | Decrease in mortgage banking revenues of $7.9 million. | ||
Interest rate lock commitments | Increase in mortgage banking revenues of $26.1 million. | Increase in mortgage banking revenues of $8.4 million. | ||
Customer related derivatives | Increase in miscellaneous other income of $3.2 million. | Increase in miscellaneous other income of $4.5 million. | ||
Total return swap associated with sale of Visa, Inc. Class B shares | Increase in other non-interest income of $0.9 million | Increase in other non-interest income of $0.1 million. | ||
Foreign exchange | Increase in commercial banking fees of $0.5 million. | Decrease in commercial banking fees of $5.8 million. | ||
Other | Increase to net interest income of $0.3 million and increase to miscellaneous other income of $0.4 million. | Increase to net interest income of $3.6 million. |
Nine-Month Period Ended | ||||
Derivative Activity | September 30, 2012 | September 30, 2011 | ||
Fair value hedges: | ||||
Cross-currency swaps | Increase in other income of $2 thousand. | No effect on income | ||
Cash flow hedges: | ||||
Pay fixed-receive variable interest rate swaps | Decrease in net interest income of $62.2 million. | Decrease in net interest income of $143.9 million. | ||
Other derivative activities: | ||||
Forward commitments to sell loans | Decrease in mortgage banking revenues of $19.4 million. | Decrease in mortgage banking revenues of $11.4 million. | ||
Interest rate lock commitments | Increase in mortgage banking revenues of $31.7 million. | Increase in mortgage banking revenues of $9.2 million. | ||
Customer related derivatives | Increase in miscellaneous other income of $24.1 million. | Increase in miscellaneous other income of $11.6 million. | ||
Total return swap associated with sale of Visa, Inc. Class B shares | Increase in other non-interest income of $4.8 million. | Increase in other non-interest income of $1.2 million. | ||
Foreign exchange | Increase in commercial banking fees of $0.5 million. | Decrease in commercial banking fees of $4.0 million. | ||
Other | Decrease to net interest income of $97 thousand and increase to miscellaneous other income of $1.1 million. | Increase to net interest income of $10.5 million. |
Total Other Comprehensive Income | Total Accumulated Other Comprehensive Income/(Loss) | ||||||||||||||||||||||
For the Three-Month Period Ended September 30, 2012 | June 30, 2012 | September 30, 2012 | |||||||||||||||||||||
Pretax Activity | Tax Effect | Net Activity | Beginning Balance | Net Activity | Ending Balance | ||||||||||||||||||
Change in accumulated gains/(losses) on cash flow hedge derivative financial instruments | $ | (11,603 | ) | $ | 3,979 | $ | (7,624 | ) | |||||||||||||||
Reclassification adjustment for net losses on cash flow hedge derivative financial instruments | 20,969 | (7,339 | ) | 13,630 | |||||||||||||||||||
Net unrealized gains/(losses) on cash flow hedge derivative financial instruments | 9,366 | (3,360 | ) | 6,006 | $ | (96,779 | ) | $ | 6,006 | $ | (90,773 | ) | |||||||||||
Change in unrealized gains on investment securities available-for-sale | 117,888 | (45,582 | ) | 72,306 | |||||||||||||||||||
Reclassification adjustment for net gains included in net income | 151 | (53 | ) | 98 | |||||||||||||||||||
Net unrealized gains on investment securities available-for-sale | 118,039 | (45,635 | ) | 72,404 | 106,929 | 72,404 | 179,333 | ||||||||||||||||
Amortization of defined benefit plans | 929 | (364 | ) | 565 | (25,347 | ) | 565 | (24,782 | ) | ||||||||||||||
Total, September 30, 2012 | $ | 128,334 | $ | (49,359 | ) | $ | 78,975 | $ | (15,197 | ) | $ | 78,975 | $ | 63,778 |
Total Other Comprehensive Income | Total Accumulated Other Comprehensive Income/(Loss) | ||||||||||||||||||||||
For the Nine-Month Period Ended September 30, 2012 | December 31, 2011 | September 30, 2012 | |||||||||||||||||||||
Pretax Activity | Tax Effect | Net Activity | Beginning Balance | Net Activity | Ending Balance | ||||||||||||||||||
Change in accumulated gains/(losses) on cash flow hedge derivative financial instruments | $ | (40,398 | ) | $ | 13,377 | $ | (27,021 | ) | |||||||||||||||
Reclassification adjustment for net losses on cash flow hedge derivative financial instruments | 68,069 | (23,825 | ) | 44,244 | |||||||||||||||||||
Net unrealized gains/(losses) on cash flow hedge derivative financial instruments | 27,671 | (10,448 | ) | 17,223 | $ | (107,996 | ) | $ | 17,223 | $ | (90,773 | ) | |||||||||||
Change in unrealized gains/(losses) on investment securities available-for-sale | 224,737 | (83,511 | ) | 141,226 | |||||||||||||||||||
Reclassification adjustment for net gains included in net income | (76,381 | ) | 26,735 | (49,646 | ) | ||||||||||||||||||
Net unrealized gains on investment securities available-for-sale | 148,356 | (56,776 | ) | 91,580 | 87,753 | 91,580 | 179,333 | ||||||||||||||||
Amortization of defined benefit plans | 2,788 | (1,095 | ) | 1,693 | (26,475 | ) | 1,693 | (24,782 | ) | ||||||||||||||
Total, September 30, 2012 | $ | 178,815 | $ | (68,319 | ) | $ | 110,496 | $ | (46,718 | ) | $ | 110,496 | $ | 63,778 |
Total Other Comprehensive Income | Total Accumulated Other Comprehensive Income/(Loss) | ||||||||||||||||||||||
For the Three-Month Period Ended September 30, 2011 | June 30, 2011 | September 30, 2011 | |||||||||||||||||||||
Pretax Activity | Tax Effect | Net Activity | Beginning Balance | Net Activity | Ending Balance | ||||||||||||||||||
Change in accumulated gains/(losses) on cash flow hedge derivative financial instruments | $ | (62,333 | ) | $ | 24,268 | $ | (38,065 | ) | |||||||||||||||
Reclassification adjustment for net losses on cash flow hedge derivative financial instruments | (2,628 | ) | 1,033 | (1,595 | ) | ||||||||||||||||||
Net unrealized gains/(losses) on cash flow hedge derivative financial instruments | (64,961 | ) | 25,301 | (39,660 | ) | $ | (144,713 | ) | $ | (39,660 | ) | $ | (184,373 | ) | |||||||||
Change in unrealized gains/(losses) on investment securities available-for-sale | 126,130 | (50,319 | ) | 75,811 | |||||||||||||||||||
Reclassification adjustment for net gains included in net income | 41,943 | (16,484 | ) | 25,459 | |||||||||||||||||||
Net unrealized gains/(losses) on investment securities available-for-sale | 168,073 | (66,803 | ) | 101,270 | (42,296 | ) | 101,270 | 58,974 | |||||||||||||||
Amortization of defined benefit plans | 520 | (204 | ) | 316 | (15,764 | ) | 316 | (15,448 | ) | ||||||||||||||
Total, September 30, 2011 | $ | 103,632 | $ | (41,706 | ) | $ | 61,926 | $ | (202,773 | ) | $ | 61,926 | $ | (140,847 | ) |
Total Other Comprehensive Income | Total Accumulated Other Comprehensive Income/(Loss) | ||||||||||||||||||||||
For the Nine-Month Period Ended September 30, 2011 | December 31, 2010 | September 30, 2011 | |||||||||||||||||||||
Pretax Activity | Tax Effect | Net Activity | Beginning Balance | Net Activity | Ending Balance | ||||||||||||||||||
Change in accumulated gains/(losses) on cash flow hedge derivative financial instruments | $ | (86,861 | ) | $ | 33,970 | $ | (52,891 | ) | |||||||||||||||
Reclassification adjustment for net losses on cash flow hedge derivative financial instruments | (10,238 | ) | 3,696 | (6,542 | ) | ||||||||||||||||||
Net unrealized gains/(losses) on cash flow hedge derivative financial instruments | (97,099 | ) | 37,666 | (59,433 | ) | $ | (124,940 | ) | $ | (59,433 | ) | $ | (184,373 | ) | |||||||||
Change in unrealized gains/(losses) on investment securities available-for-sale | 128,483 | (51,263 | ) | 77,220 | |||||||||||||||||||
Reclassification adjustment for net gains included in net income | 123,867 | (49,338 | ) | 74,529 | |||||||||||||||||||
Net unrealized gains/(losses) on investment securities available-for-sale | 252,350 | (100,601 | ) | 151,749 | (92,775 | ) | 151,749 | 58,974 | |||||||||||||||
Amortization of defined benefit plans | 1,686 | (659 | ) | 1,027 | (16,475 | ) | 1,027 | (15,448 | ) | ||||||||||||||
Total, September 30, 2011 | $ | 156,937 | $ | (63,594 | ) | $ | 93,343 | $ | (234,190 | ) | $ | 93,343 | $ | (140,847 | ) |
Other Commitments | Contract or notional amount | Less than 1 year | Over 1 yr to 3 yrs | Over 3 yrs to 5 yrs | Over 5 yrs | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Commitments to extend credit | $ | 22,953,045 | $ | 8,540,281 | $ | 3,920,051 | $ | 8,353,780 | $ | 2,138,933 | ||||||||||
Standby letters of credit | 2,422,963 | 1,666,973 | 476,512 | 204,191 | 75,287 | |||||||||||||||
Loans sold with recourse | 197,765 | 37,359 | 39,835 | 38,242 | 82,329 | |||||||||||||||
Forward buy commitments | 597,884 | 560,925 | 36,959 | — | — | |||||||||||||||
Total commitments | $ | 26,171,657 | $ | 10,805,538 | $ | 4,473,357 | $ | 8,596,213 | $ | 2,296,549 |
Three-Month Period Ended September 30, 2012 | Nine-Month Period Ended September 30, 2012 | |||||||
Beginning Balance | $ | 19,336 | $ | 12,273 | ||||
Provision | 30,200 | 43,973 | ||||||
Recoveries | — | 436 | ||||||
Charge-offs | (4,529 | ) | (11,675 | ) | ||||
Ending Balance | $ | 45,007 | $ | 45,007 |
• | retained an independent consultant to conduct a review of certain foreclosure actions or proceedings for loans serviced by the Bank; |
• | strengthened coordination with its borrowers by providing them with a single point of contact to avoid borrower confusion and ensure effective communication in connection with any foreclosure, loss mitigation or loan modification activities; |
• | improved processes and controls to ensure that foreclosures are not pursued once a mortgage has been approved for modification, unless repayments under the modified loan are not made; |
• | enhanced controls and oversight over the activities of third-party vendors, including external legal counsel and Mortgage Electronic Registration Systems, Inc. ("MERS"); |
• | strengthened its compliance programs to ensure mortgage-servicing and foreclosure operations comply with all applicable legal requirements and supervisory guidance , and assure appropriate policies and procedures staffing, training oversight, and quality control of those processes; |
• | improved its management information systems for foreclosure, loss mitigation and loan modification activities that ensure timely delivery of complete and accurate information to facilitate effective decision-making. |
• | centralized governance and management for the originations, servicing and collections in the mortgage business |
• | Nw Services Co., a Santander affiliate doing business as Aquanima, is under contract with the Bank to provide procurement services, with fees paid in the three-month and nine-month periods ended September 30, 2012 in the amounts of $0.9 million and $2.8 million, compared to $0.9 million and $2.6 million for the corresponding periods in 2011. |
• | Geoban, S.A., a Santander affiliate, is under contract with the Bank to provide services in connection with debit card disputes and claims support, and consumer and mortgage loan set-up and review, with fees paid in the three-month and nine-month periods ended September 30, 2012 in the amounts of $1.9 million and $15.0 million, compared to $6.5 million and $7.3 million for the corresponding periods in 2011. |
• | Ingenieria De Software Bancario S.L., a Santander affiliate, is under contract with the Bank to provide information technology development, support and administration, with fees paid in the three-month and nine-month periods ended September 30, 2012 in the amounts of $27.6 million and $97.9 million, compared to $25.8 million and $82.7 million for the corresponding periods in 2011. |
• | Produban Servicios Informaticos Generales S.L., a Santander affiliate, is under contract with the Bank to provide professional services, and administration and support of information technology production systems, telecommunications and internal/external applications, with fees paid in the three-month and nine-month periods ended September 30, 2012 in the amounts of $25.0 million and $76.3 million, compared to $23.2 million and $62.7 million for the corresponding periods in 2011. |
• | Santander Back-Offices Globales Mayoristas S.A., a Santander affiliate, is under contract with the Bank to provide logistical support for Sovereign Bank’s derivative and hedging transactions and programs. In the three-month and nine-month periods ended September 30, 2012, fees in the amounts of $0.1 million and $0.3 million were paid to Santander Back-Offices Globales Mayoristas S.A. with respect to this agreement, compared to fees in the amounts of $0.1 million and $0.3 million for the corresponding periods in 2011. |
• | Santander Global Facilities (“SGF”), a Santander affiliate, is under contract with the Bank to provide (i) administration and management of employee benefits and payroll functions for the Bank and other affiliates, including employee benefits and payroll processing services provided by third party vendors through sponsorship by SGF, and (ii) property management and related services. In the three-month and nine-month periods ended September 30, 2012, fees in the amounts of $2.3 million and $7.1 million were paid to SGF with respect to this agreement, compared to $2.8 million and $8.0 million for the corresponding periods in 2011. |
• | Level 1 - Assets or liabilities for which the identical item is traded on an active exchange, such as publicly-traded instruments or futures contracts. |
• | Level 2 - Assets and liabilities valued based on observable market data for similar instruments. |
• | Level 3 - Assets or liabilities for which significant valuation assumptions are not readily observable in the market; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require. |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance at September 30, 2012 | ||||||||||||
(in thousands) | |||||||||||||||
Financial assets: | |||||||||||||||
US Treasury and government agency securities | $ | — | $ | 8,998 | $ | — | $ | 8,998 | |||||||
Debentures of FHLB, FNMA and FHLMC | — | 20,000 | — | 20,000 | |||||||||||
Corporate debt | — | 2,377,534 | — | 2,377,534 | |||||||||||
Asset-backed securities | — | 1,098,788 | 795,407 | 1,894,195 | |||||||||||
Equity Securities | 5,104 | — | — | 5,104 | |||||||||||
State and municipal securities | — | 1,720,579 | — | 1,720,579 | |||||||||||
Mortgage backed securities | — | 11,223,112 | — | 11,223,112 | |||||||||||
Total investment securities available-for-sale | 5,104 | 16,449,011 | 795,407 | 17,249,522 | |||||||||||
Loans held for sale | — | 772,088 | — | 772,088 | |||||||||||
Mortgage servicing rights | — | — | 78,095 | 78,095 | |||||||||||
Derivatives: | |||||||||||||||
Fair value | — | 12,951 | — | 12,951 | |||||||||||
Cash Flow | — | 636 | — | 636 | |||||||||||
Mortgage banking interest rate lock commitments | — | — | 39,054 | 39,054 | |||||||||||
Customer related | — | 399,892 | — | 399,892 | |||||||||||
Foreign exchange | — | 12,289 | — | 12,289 | |||||||||||
Mortgage servicing rights | — | 652 | — | 652 | |||||||||||
Other | — | 11,591 | 79 | 11,670 | |||||||||||
Total financial assets | $ | 5,104 | $ | 17,659,110 | $ | 912,635 | $ | 18,576,849 | |||||||
Financial liabilities: | |||||||||||||||
Derivatives: | |||||||||||||||
Fair value | $ | — | $ | 10,946 | $ | — | $ | 10,946 | |||||||
Cash flow | — | 139,915 | — | 139,915 | |||||||||||
Mortgage banking interest rate lock commitments | — | 27,976 | — | 27,976 | |||||||||||
Customer related | — | 397,998 | — | 397,998 | |||||||||||
Total return swap | — | — | 669 | 669 | |||||||||||
Foreign exchange | — | 11,732 | — | 11,732 | |||||||||||
Mortgage servicing rights | — | 182 | — | 182 | |||||||||||
Other | — | 11,245 | 216 | 11,461 | |||||||||||
Total financial liabilities | $ | — | $ | 599,994 | $ | 885 | $ | 600,879 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance at December 31, 2011 | ||||||||||||
(in thousands) | |||||||||||||||
Financial assets: | |||||||||||||||
US Treasury and government agency securities | $ | — | $ | 44,090 | $ | — | $ | 44,090 | |||||||
Debentures of FHLB, FNMA and FHLMC | — | 20,000 | — | 20,000 | |||||||||||
Corporate debt | — | 2,049,520 | — | 2,049,520 | |||||||||||
Asset-backed securities | — | 2,587,993 | 52,297 | 2,640,290 | |||||||||||
State and municipal securities | — | 1,784,778 | — | 1,784,778 | |||||||||||
Mortgage backed securities | — | 9,039,880 | 18 | 9,039,898 | |||||||||||
Total investment securities available-for-sale | — | 15,526,261 | 52,315 | 15,578,576 | |||||||||||
Loans held for sale | — | 352,471 | — | 352,471 | |||||||||||
Derivatives: | |||||||||||||||
Fair value | — | 3,888 | — | 3,888 | |||||||||||
Mortgage banking interest rate lock commitments | — | — | 7,323 | 7,323 | |||||||||||
Customer related | — | 361,349 | — | 361,349 | |||||||||||
Foreign exchange | — | 11,950 | — | 11,950 | |||||||||||
Other | — | 12,098 | — | 12,098 | |||||||||||
Total financial assets | $ | — | $ | 16,268,017 | $ | 59,638 | $ | 16,327,655 | |||||||
Financial liabilities: | |||||||||||||||
Derivatives: | |||||||||||||||
Fair value | $ | — | $ | 3,346 | $ | — | $ | 3,346 | |||||||
Cash flow | — | 158,174 | — | 158,174 | |||||||||||
Mortgage banking interest rate lock commitments | — | 8,574 | — | 8,574 | |||||||||||
Customer related | — | 383,532 | — | 383,532 | |||||||||||
Total return swap | — | — | 5,460 | 5,460 | |||||||||||
Foreign exchange | — | 11,930 | — | 11,930 | |||||||||||
Other | — | 11,655 | 720 | 12,375 | |||||||||||
Total financial liabilities | $ | — | $ | 577,211 | $ | 6,180 | $ | 583,391 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value at September 30, 2012 | ||||||||||||
(in thousands) | |||||||||||||||
September 30, 2012 | |||||||||||||||
Impaired loans held for investment (1) | $ | — | $ | 407,549 | $ | 111,601 | $ | 519,150 | |||||||
Foreclosed assets (2) | — | 31,657 | — | 31,657 | |||||||||||
Mortgage servicing rights (3) | — | — | — | — | |||||||||||
December 31, 2011 | |||||||||||||||
Impaired loans held for investment (1) | $ | — | $ | 1,388,268 | $ | — | $ | 1,388,268 | |||||||
Foreclosed assets (2) | — | 74,031 | — | 74,031 | |||||||||||
Mortgage servicing rights | — | — | 91,686 | 91,686 |
(1) | Represents recorded investment of loans for which the Company periodically records nonrecurring adjustments of collateral-dependent loans measured for impairment when establishing the allowance for loan losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan. Appraisals are generally obtained to support the fair value of the collateral and incorporate measures such as recent sales prices for comparable properties. In cases where the carrying value exceeds the fair value of the collateral less cost to sell, an impairment charge is recognized. |
(2) | Assets taken in foreclosure of defaulted loans are primarily comprised of commercial and residential real property and are generally measured at the lower of cost or fair value less costs to sell. The fair value of the real property is generally determined using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. |
(3) | As of January 1, 2012, the Company elected to account for its existing portfolio of residential mortgage loan servicing rights (MSRs) at fair value. The Company's multi-family mortgage loan servicing rights were fully amortized at September 30, 2012. |
Comprehensive Income Location | Three-Month Period Ended September 30, | Nine-Month Period Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Impaired loans held for investment | Provision for credit losses | $ | 29,680 | $ | 79,413 | $ | 66,558 | $ | 56,140 | |||||||
Foreclosed assets | Other administrative expense | (1,786 | ) | (7,203 | ) | (4,859 | ) | (13,205 | ) | |||||||
Mortgage servicing rights | Mortgage banking income | — | (39,687 | ) | 88 | (37,789 | ) | |||||||||
$ | 27,894 | $ | 32,523 | $ | 61,787 | $ | 5,146 |
Three-Month Period Ended September 30, 2012 | |||||||||||||||
Investments Available-for-Sale | Mortgage Servicing Rights | Derivatives | Total | ||||||||||||
Balance, June 30, 2012 | $ | 749,693 | $ | 95,536 | $ | 11,291 | $ | 856,520 | |||||||
Gains/(losses) in other comprehensive income | 1,114 | — | — | 1,114 | |||||||||||
Gains/(losses) in earnings | — | (25,614 | ) | 26,957 | 1,343 | ||||||||||
Purchases | 44,974 | — | — | 44,974 | |||||||||||
Issuances | — | 8,173 | — | 8,173 | |||||||||||
Sales | — | — | — | — | |||||||||||
Settlements(1) | (374 | ) | — | — | (374 | ) | |||||||||
Amortization | — | — | — | — | |||||||||||
Transfers into/out of level 3 | — | — | — | — | |||||||||||
Balance, September 30, 2012 | $ | 795,407 | $ | 78,095 | $ | 38,248 | $ | 911,750 | |||||||
Changes in unrealized gains (losses) included in earnings related to balances still held at September 30, 2012 | $ | — | $ | (25,614 | ) | $ | 847 | $ | (24,767 | ) |
Nine-Month Period Ended September 30, 2012 | |||||||||||||||
Investments Available-for-Sale | Mortgage Servicing Rights | Derivatives | Total | ||||||||||||
Balance, December 31, 2011 | $ | 52,315 | $ | 91,686 | $ | 1,143 | $ | 145,144 | |||||||
Gains/(losses) in other comprehensive income | (5,169 | ) | — | — | (5,169 | ) | |||||||||
Gains/(losses) in earnings | (50 | ) | (44,684 | ) | 37,105 | (7,629 | ) | ||||||||
Purchases | 192,974 | — | 192,974 | ||||||||||||
Issuances | — | 31,616 | — | 31,616 | |||||||||||
Sales | (20,000 | ) | — | — | (20,000 | ) | |||||||||
Settlements(1) | (1,123 | ) | — | — | (1,123 | ) | |||||||||
Amortization | — | (523 | ) | — | (523 | ) | |||||||||
Transfers into/out of level 3 | 576,460 | — | — | 576,460 | |||||||||||
Balance, September 30, 2012 | $ | 795,407 | $ | 78,095 | $ | 38,248 | $ | 911,750 | |||||||
Changes in unrealized gains (losses) included in earnings related to balances still held at September 30, 2012 | $ | — | $ | (44,772 | ) | $ | 5,374 | $ | (39,398 | ) |
Three-Month Period Ended September 30, 2011 | |||||||||||||||
Investments Available-for-Sale | Mortgage Servicing Rights | Derivatives | Total | ||||||||||||
Balance, June 30, 2011 | $ | 1,117,472 | $ | 140,597 | $ | (1,558 | ) | $ | 1,256,511 | ||||||
Gains/(losses) in other comprehensive income | 36,677 | — | — | 36,677 | |||||||||||
Gains/(losses) in earnings | — | (39,687 | ) | 8,549 | (31,138 | ) | |||||||||
Purchases | — | — | — | — | |||||||||||
Issuances | — | 4,443 | — | 4,443 | |||||||||||
Sales | — | — | — | — | |||||||||||
Settlements(1) | (73,131 | ) | — | — | (73,131 | ) | |||||||||
Amortization | — | (9,676 | ) | — | (9,676 | ) | |||||||||
Transfers into/out of level 3 | — | — | — | — | |||||||||||
Balance, September 30, 2011 | $ | 1,081,018 | $ | 95,677 | $ | 6,991 | $ | 1,183,686 | |||||||
Changes in unrealized gains (losses) included in earnings related to balances still held at September 30, 2011 | $ | — | $ | (39,687 | ) | $ | 139 | $ | (39,548 | ) |
Nine-Month Period Ended September 30, 2011 | |||||||||||||||
Investments Available-for-Sale | Mortgage Servicing Rights | Derivatives | Total | ||||||||||||
Balance, December 31, 2010 | $ | 1,511,847 | $ | 146,028 | $ | (7,951 | ) | $ | 1,649,924 | ||||||
Gains/(losses) in other comprehensive income | 33,702 | — | (216 | ) | 33,486 | ||||||||||
Gains/(losses) in earnings | 9,843 | (37,789 | ) | 11,454 | (16,492 | ) | |||||||||
Purchases | — | — | — | — | |||||||||||
Issuances | — | 17,926 | — | 17,926 | |||||||||||
Sales | (180,611 | ) | — | — | (180,611 | ) | |||||||||
Settlements(1) | (293,763 | ) | — | 3,704 | (290,059 | ) | |||||||||
Amortization | — | (30,488 | ) | — | (30,488 | ) | |||||||||
Transfers into/out of level 3 | — | — | — | — | |||||||||||
Balance, September 30, 2011 | $ | 1,081,018 | $ | 95,677 | $ | 6,991 | $ | 1,183,686 | |||||||
Changes in unrealized gains (losses) included in earnings related to balances still held at September 30, 2011 | $ | — | $ | (37,789 | ) | $ | 2,280 | $ | (35,509 | ) |
(1) | Settlements include prepayments, paydowns and maturities. |
• | A 10% and 20% increase in the CPR speed would decrease the fair value of the residential servicing asset by $5.3 million and $10.0 million, respectively, at September 30, 2012. |
• | A 10% and 20% increase in the discount rate would decrease the fair value of the residential servicing asset by $2.1 million and $4.1 million, respectively, at September 30, 2012. |
Fair Value at September 30, 2012 | Valuation Technique | Unobservable Inputs | Range (Weighted Average) | |||||||
Financial assets: | ||||||||||
Asset-backed securities | ||||||||||
Collateralized loan obligations | $ | 752,358 | Discounted Cash Flow | Offered quotes | 99.44%-101.15% (100.31%) | |||||
Sale-lease back securities | 43,049 | Consensus Pricing (1) | Offered quotes | Single Security (109.07%) | ||||||
795,407 | ||||||||||
Mortgage servicing rights | 78,095 | Discounted Cash Flow | Prepayment rate (CPR) | 0.13%-51.04% (22.53%) | ||||||
Discount Rate | 10.00 | % | ||||||||
Mortgage banking interest rate lock commitments | 39,054 | Discounted Cash Flow | Pull through percentage | 74.24 | % | |||||
MSR value (2) | 0.625%-0.95% (0.878%) | |||||||||
Total Assets | 912,556 | |||||||||
Financial liabilities: | ||||||||||
Total return swap | 669 | Discounted Cash Flow | Timing of litigation settlement | 12 months | ||||||
$ | 669 |
September 30, 2012 | December 31, 2011 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
Financial assets: | |||||||||||||||
Cash and amounts due from depository institutions | $ | 3,351,074 | $ | 3,351,074 | $ | 2,623,963 | $ | 2,623,963 | |||||||
Available-for-sale investment securities | 17,249,522 | 17,249,522 | 15,578,576 | 15,578,576 | |||||||||||
Other investments | 1,028,537 | 1,028,537 | 555,370 | 555,370 | |||||||||||
Loans held for investment, net | 51,212,181 | 51,118,709 | 50,223,888 | 49,286,606 | |||||||||||
Loans held for sale | 772,088 | 772,088 | 352,471 | 352,471 | |||||||||||
Restricted Cash | 393,866 | 393,866 | 36,660 | 36,660 | |||||||||||
Mortgage servicing rights | 78,095 | 78,095 | 91,686 | 99,556 | |||||||||||
Derivatives: | |||||||||||||||
Fair value | 12,289 | 12,289 | 3,888 | 3,888 | |||||||||||
Cash flow | 636 | 636 | — | — | |||||||||||
Mortgage banking | 39,054 | 39,054 | 7,323 | 7,323 | |||||||||||
Customer related | 399,892 | 399,892 | 361,349 | 361,349 | |||||||||||
Foreign exchange | 12,289 | 12,289 | 11,950 | 11,950 | |||||||||||
Mortgage servicing rights | 652 | 652 | — | — | |||||||||||
Other | 11,670 | 11,670 | 12,098 | 12,098 | |||||||||||
Financial liabilities: | |||||||||||||||
Deposits | 50,222,004 | 50,345,677 | 47,797,515 | 47,330,243 | |||||||||||
Borrowings and other debt obligations | 19,189,050 | 20,629,904 | 18,278,433 | 19,372,350 | |||||||||||
Derivatives: | |||||||||||||||
Fair value | 10,946 | 10,946 | 3,346 | 3,346 | |||||||||||
Cash flow | 139,915 | 139,915 | 158,174 | 158,174 | |||||||||||
Mortgage banking | 27,976 | 27,976 | 8,574 | 8,574 | |||||||||||
Customer related | 397,998 | 397,998 | 383,532 | 383,532 | |||||||||||
Total return swap | 669 | 669 | 5,460 | 5,460 | |||||||||||
Foreign exchange | 11,732 | 11,732 | 11,930 | 11,930 | |||||||||||
Mortgage serving rights | 182 | 182 | — | — | |||||||||||
Other | 11,461 | 11,461 | 12,385 | 12,385 |
• | The Retail banking segment is primarily comprised of the branch locations and the residential mortgage business. The branches offer a wide range of products and services to customers and each attracts deposits by offering a variety of deposit instruments including demand and interest bearing demand deposit accounts, money market and savings accounts, certificates of deposits and retirement savings products. The branches also offer consumer loans such as home equity loans and lines of credit. The Retail banking segment also includes business banking loans and small business loans to individuals. |
• | The Corporate banking segment provides the majority of the Company’s commercial lending platforms such as commercial real estate loans, multi-family loans, commercial and industrial loans and the Company’s related commercial deposits. |
• | The Global Banking segment includes businesses with large corporate domestic and foreign clients. |
• | The Specialized Business segment is primarily comprised of non-strategic lending groups which include indirect automobile, aviation and continuing care retirement communities. |
• | The Other category includes investment portfolio activity, intangibles and certain unallocated corporate income and expenses. |
• | SCUSA is a specialized consumer finance company engaged in the purchase, securitization and servicing of retail installment contracts originated by automobile dealers and direct origination of retail installment contracts over the internet. As a result of the SCUSA Transaction (see further discussion in Note 1), SCUSA is now accounted for as an equity method investment. As of September 30, 2012, the Company owned approximately 65% of SCUSA. The Company's investment balance in SCUSA as of September 30, 2012 was $2.7 billion. |
Three-Month Period Ended September 30, | Nine-Month Period Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(in thousands) | |||||||||||||||
Net interest income | $ | 649,134 | $ | 541,175 | $ | 1,869,474 | $ | 1,623,286 | |||||||
Net interest income after provision for credit losses | 463,259 | 302,662 | 1,209,272 | 1,114,770 | |||||||||||
Income before taxes | 353,820 | 250,129 | 983,970 | 969,053 | |||||||||||
Net income | 212,559 | 158,852 | 611,704 | 618,230 | |||||||||||
Total assets | $ | 18,826,462 | $ | 15,083,692 | $ | 18,826,462 | $ | 15,083,692 |
For the Three-Month Period Ended | Global Banking | Specialized Business | ||||||||||||||||||||||||||
September 30, 2012 | Retail (3) | Corporate | Other (2) | Equity method investment in SCUSA | Total | |||||||||||||||||||||||
Net interest income | $ | 197,191 | $ | 109,404 | $ | 25,863 | $ | 9,946 | $ | 75,914 | $ | — | $ | 418,318 | ||||||||||||||
Total non-interest income | 87,352 | 23,741 | 8,563 | 2,979 | 14,011 | 112,837 | 249,483 | |||||||||||||||||||||
(Release) / provision for credit losses | 79,923 | (11,445 | ) | (7,748 | ) | (34,293 | ) | 44,563 | — | 71,000 | ||||||||||||||||||
Total expenses | 221,952 | 29,942 | 6,030 | 6,394 | 381,573 | — | 645,891 | |||||||||||||||||||||
Income/(loss) before income taxes | (17,332 | ) | 114,648 | 36,144 | 40,824 | (336,211 | ) | 112,837 | (49,090 | ) | ||||||||||||||||||
Intersegment revenue/(expense) (1) | (19,743 | ) | (105,174 | ) | (14,489 | ) | (11,708 | ) | 151,114 | — | — | |||||||||||||||||
Total average assets | $ | 24,951,284 | $ | 21,668,962 | $ | 5,952,358 | $ | 1,376,638 | $ | 29,690,336 | $ | — | $ | 83,639,578 |
For the Nine-Month Period Ended | Global Banking | Specialized Business | ||||||||||||||||||||||||||
September 30, 2012 | Retail | Corporate | Other (2) | Equity method investment in SCUSA | Total | |||||||||||||||||||||||
Net interest income | $ | 611,703 | $ | 328,668 | $ | 73,238 | $ | 31,167 | $ | 228,059 | $ | — | $ | 1,272,835 | ||||||||||||||
Total non-interest income | 313,639 | 58,549 | 33,414 | 11,172 | 91,524 | 386,576 | 894,874 | |||||||||||||||||||||
(Release) / provision for credit losses | 216,480 | (787 | ) | 14,159 | (49,188 | ) | 101,136 | — | 281,800 | |||||||||||||||||||
Total expenses | 661,125 | 92,319 | 27,391 | 19,846 | 649,824 | — | 1,450,505 | |||||||||||||||||||||
Income/(loss) before income taxes | 47,737 | 295,685 | 65,102 | 71,681 | (431,377 | ) | 386,576 | 435,404 | ||||||||||||||||||||
Intersegment revenue/(expense) (1) | (62,577 | ) | (315,107 | ) | (34,998 | ) | (43,500 | ) | 456,182 | — | — | |||||||||||||||||
Total average assets | $ | 25,234,098 | $ | 21,323,418 | $ | 5,436,831 | $ | 1,595,392 | $ | 29,145,285 | $ | — | $ | 82,735,024 |
For the Three-Month Period Ended | Global Banking | Specialized Business | ||||||||||||||||||||||||||
September 30, 2011 | Retail | Corporate | Other (2) | SCUSA | Total | |||||||||||||||||||||||
Net interest income | $ | 199,478 | $ | 101,566 | $ | 11,560 | $ | 13,571 | $ | 87,218 | $ | 541,175 | $ | 954,568 | ||||||||||||||
Total non-interest income | 79,155 | 18,914 | 5,793 | 4,017 | 47,094 | 80,068 | 235,041 | |||||||||||||||||||||
Provision for credit losses | 29,006 | 66,872 | 4,745 | 25,152 | 4,425 | 238,513 | 368,713 | |||||||||||||||||||||
Total expenses | 210,913 | 26,314 | 3,550 | 7,248 | 129,227 | 132,601 | 509,853 | |||||||||||||||||||||
Income/(loss) before income taxes | 38,714 | 27,294 | 9,058 | (14,812 | ) | 660 | 250,129 | 311,043 | ||||||||||||||||||||
Intersegment revenue/(expense) (1) | (33,351 | ) | (115,852 | ) | (4,562 | ) | (23,555 | ) | 177,320 | — | — | |||||||||||||||||
Total average assets | $ | 24,879,706 | $ | 20,591,698 | $ | 3,543,617 | $ | 2,366,472 | $ | 24,741,738 | $ | 15,329,488 | $ | 91,452,719 |
For the Nine-Month Period Ended | Global Banking | Specialized Business | ||||||||||||||||||||||||||
September 30, 2011 | Retail | Corporate | Other (2) | SCUSA | Total | |||||||||||||||||||||||
Net interest income | $ | 630,518 | $ | 303,428 | $ | 32,084 | $ | 49,022 | $ | 248,384 | $ | 1,623,286 | $ | 2,886,722 | ||||||||||||||
Total non-interest income | 317,166 | 59,434 | 20,236 | 13,130 | 108,178 | 273,117 | 791,261 | |||||||||||||||||||||
Provision for credit losses | 173,458 | 166,127 | 12,845 | 92,257 | (3,574 | ) | 508,516 | 949,629 | ||||||||||||||||||||
Total expenses | 615,344 | 80,830 | 8,543 | 21,111 | 354,402 | 418,834 | 1,499,064 | |||||||||||||||||||||
Income/(loss) before income taxes | 158,882 | 115,905 | 30,932 | (51,216 | ) | 5,734 | 969,053 | 1,229,290 | ||||||||||||||||||||
Intersegment revenue/(expense) (1) | (66,285 | ) | (360,074 | ) | (13,129 | ) | (81,284 | ) | 520,772 | — | — | |||||||||||||||||
Total average assets | $ | 24,638,742 | $ | 20,673,895 | $ | 3,251,930 | $ | 2,718,630 | $ | 24,812,356 | $ | 15,829,825 | $ | 91,925,378 |
(1) | Intersegment revenue/(expense) represents charges or credits for funds used or provided by each of the segments and are included in net interest income. |
(2) | The Other category includes earnings from the investment portfolio, interest expense on the Bank’s borrowings and other debt obligations, amortization of intangible assets and certain unallocated corporate income and indirect expenses. |
(3) | Income/(loss) before income taxes for the three-month period ended reflects the impact of two main items, Chapter 7 bankruptcy loans described in Note 4 and GSE reserves that have been fully allocated to the Retail reportable segment. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | Retail Banking efforts are focused on increasing market share in the existing primary service area, cross-selling to existing and new customers, and reducing dependence on third-party service providers. Significant initiatives in Retail Banking include transforming the retail banking platform and subsequent implementation of more robust product applications and MIS, enhancing the online, ATM, and call center platforms, introducing mobile banking and enhanced functionality in the existing electronic banking platform, and developing the capability to issue and service credit cards directly. |
• | Growing Corporate Banking is a key priority for the Bank. Management plans to take a measured and gradual approach to building a strong franchise. Significant Corporate Banking initiatives include strengthening the Large Corporate unit as a competitive provider for large corporate customers, balancing penetration of different Corporate Banking units within the Bank's footprint in New England, Metropolitan New York, and the Mid-Atlantic region and upgrading the technology platform and operational capabilities. |
• | Management's priority in GBM is to grow the business by developing relationships in the U.S. with global companies through a sector specific approach with a differentiated product offering. This will include different types of financing, hedging and transactional services with the objective of improving the existing cross-selling and increasing revenue per client. GBM also expects to grow as a product provider to the Large Corporate and Middle Market client segments served by the Bank. |
• | Integrating information technology and operations systems by building a reliable and sales-oriented technology infrastructure to drive efficiency across all areas of the Bank. This allows leverage of the Company's access to Santander's factories, technology expertise and cost management approach as appropriate to minimize costs while maintaining quality of service. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | retained an independent consultant to conduct a review of certain foreclosure actions or proceedings for loans serviced by the Bank; |
• | strengthened coordination with its borrowers by providing them with a single point of contact to avoid borrower confusion and ensure effective communication in connection with any foreclosure, loss mitigation or loan modification activities; |
• | improved processes and controls to ensure that foreclosures are not pursued once a mortgage has been approved for modification, unless repayments under the modified loan are not made; |
• | enhanced controls and oversight over the activities of third-party vendors, including external legal counsel and Mortgage Electronic Registration Systems, Inc. ("MERS"); |
• | strengthened its compliance programs to ensure mortgage-servicing and foreclosure operations comply with all applicable legal requirements and supervisory guidance, and assure appropriate policies and procedures staffing, training oversight, and quality control of those processes; |
• | improved its management information systems for foreclosure, loss mitigation and loan modification activities that ensure timely delivery of complete and accurate information to facilitate effective decision-making; |
• | centralized governance and management for the originations, servicing and collections in the mortgage business. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Country | Covered Bonds | Financial Institution Bonds | Non-Financial Institutions Bonds | Government Institution Bonds | Total | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Germany | $ | — | $ | — | $ | 37,000 | $ | — | $ | 37,000 | ||||||||||
Spain | 92,395 | — | 121,160 | 74,750 | 288,305 | |||||||||||||||
Switzerland | 102,000 | 94,010 | — | — | 196,010 | |||||||||||||||
Great Britain | 53,548 | 142,235 | 95,065 | — | 290,848 | |||||||||||||||
Netherlands | 99,350 | 71,700 | 5,000 | — | 176,050 | |||||||||||||||
Sweden | 78,372 | — | — | — | 78,372 | |||||||||||||||
France | — | 98,400 | 30,000 | — | 128,400 | |||||||||||||||
Greece | — | — | — | — | — | |||||||||||||||
Ireland | — | — | — | — | — | |||||||||||||||
Italy | — | — | 69,768 | — | 69,768 | |||||||||||||||
Portugal | — | — | 74,300 | — | 74,300 | |||||||||||||||
$ | 425,665 | $ | 406,345 | $ | 432,293 | $ | 74,750 | $ | 1,339,053 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
SOVEREIGN | SHUSA | SANTANDER | SPAIN | ||||||||
Moody's | S&P | Moody's | S&P | Moody's | S&P | Moody's | S&P | ||||
LT Senior Debt | Baa1 | BBB+ | Baa2 | BBB+ | Baa2 | A- | Baa3 | BBB+ | |||
ST Deposits | P-2 | A-2 | P-2 | A-2 | P-2 | A-2 | P-3 | A-2 | |||
Outlook | Stable | Negative | Negative | Negative | Negative | Negative | Negative | Negative |
▪ | On October 10, 2012 S&P lowered the ratings of Spain by 2 notches (from BBB+/A-2 to BBB-/A-3). |
▪ | On October 16, 2012 S&P lowered Santander's ratings by 2 notches (from A-/A-2 to BBB/A-2). |
▪ | On October 16, 2012 S&P lowered SHUSA and Sovereign Bank's ratings by 1 notch (from BBB+/A-2 to BBB/A-2). S&P did not change SHUSA or Sovereign's Stand Alone Credit Profile (SACP) rating. |
▪ | On October 17, 2012 Moody's completed its review of Spain and left Spain's ratings affirmed at Baa3/P-3 with a negative outlook. |
▪ | On October 26, 2012 Moody's affirmed its ratings on Santander. |
▪ | On October 26, 2012, Moody's affirmed SHUSA and Sovereign's ratings. In addition, Sovereign's Outlook was returned to Stable. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three-Month Period Ended | ||||||||||||||||
September 30, 2011 | September 30, 2012 | |||||||||||||||
SHUSA as reported(1) | Proforma adjustments(2) | Unaudited Pro-forma Balance(3) | SHUSA as reported(4) | |||||||||||||
(in thousands) | ||||||||||||||||
Net interest income | $ | 954,568 | $ | (541,175 | ) | $ | 413,393 | $ | 418,318 | |||||||
Provision for credit losses | (368,713 | ) | 238,513 | (130,200 | ) | (71,000 | ) | |||||||||
Total non-interest income | 235,041 | 33,393 | 268,434 | 249,483 | ||||||||||||
General and administrative expenses | (454,594 | ) | 121,358 | (333,236 | ) | (355,486 | ) | |||||||||
Other expenses | (55,259 | ) | 1,035 | (54,224 | ) | (290,405 | ) | |||||||||
Income before income taxes | 311,043 | (146,876 | ) | 164,167 | (49,090 | ) | ||||||||||
Income tax provision | (104,707 | ) | 66,871 | (37,836 | ) | 77,730 | ||||||||||
Net income | $ | 206,336 | $ | (80,005 | ) | $ | 126,331 | $ | 28,640 |
Nine-Month Period Ended | ||||||||||||||||
September 30, 2011 | September 30, 2012 | |||||||||||||||
SHUSA as reported(1) | Proforma adjustments(2) | Unaudited Pro-forma Balance(3) | SHUSA as reported(4) | |||||||||||||
(in thousands) | ||||||||||||||||
Net interest income | $ | 2,886,722 | $ | (1,623,286 | ) | $ | 1,263,436 | $ | 1,272,835 | |||||||
Provision for credit losses | (949,629 | ) | 508,516 | (441,113 | ) | (281,800 | ) | |||||||||
Total non-interest income | 791,261 | 150,843 | 942,104 | 894,874 | ||||||||||||
General and administrative expenses | (1,360,032 | ) | 393,480 | (966,552 | ) | (1,089,424 | ) | |||||||||
Other expenses | (139,032 | ) | 3,244 | (135,788 | ) | (361,081 | ) | |||||||||
Income before income taxes | 1,229,290 | (567,203 | ) | 662,087 | 435,404 | |||||||||||
Income tax provision | (426,840 | ) | 303,361 | (123,479 | ) | 5,950 | ||||||||||
Net income | $ | 802,450 | $ | (263,842 | ) | $ | 538,608 | $ | 441,354 |
(1) | Amounts represent historical financial information from our Quarterly Report on Form 10-Q for the three-month and nine-month periods ended September 30, 2011. |
(2) | Reflects the deconsolidation of SCUSA and adjustments relating to normal recurring intercompany transactions between SHUSA and SCUSA, which as a result of the deconsolidation would no longer be eliminated. |
(3) | Amounts represent a non-GAAP financial measure and is presented to assist in the evaluation of SHUSA's results. |
(4) | Amounts represent financial information from the Consolidated Statement of Comprehensive Income as reported in this Quarterly Report on Form 10-Q |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
CONSOLIDATED AVERAGE BALANCE SHEET / TAX EQUIVALENT NET INTEREST MARGIN ANALYSIS | |||||||||||||||||||||
THREE-MONTH PERIODS ENDED SEPTEMBER 30, 2012 AND 2011 | |||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||
Average Balance | Tax Equivalent Interest | Yield/ Rate | Average Balance | Tax Equivalent Interest | Yield/ Rate | ||||||||||||||||
(in thousands) | |||||||||||||||||||||
EARNING ASSETS | |||||||||||||||||||||
INVESTMENTS AND INTEREST EARNING DEPOSITS | $ | 19,897,868 | $ | 107,971 | 2.17 | % | $ | 16,788,635 | $ | 112,481 | 2.68 | % | |||||||||
LOANS(1): | |||||||||||||||||||||
Commercial loans | 24,496,395 | 225,125 | 3.66 | % | 21,988,017 | 214,849 | 3.88 | % | |||||||||||||
Multi-family | 7,227,934 | 86,571 | 4.77 | % | 6,987,085 | 89,075 | 5.07 | % | |||||||||||||
Consumer loans: | |||||||||||||||||||||
Residential mortgages | 11,559,676 | 119,087 | 4.12 | % | 11,524,543 | 128,533 | 4.46 | % | |||||||||||||
Home equity loans and lines of credit | 6,774,919 | 64,094 | 3.76 | % | 6,910,035 | 67,081 | 3.85 | % | |||||||||||||
Total consumer loans secured by real estate | 18,334,595 | 183,181 | 3.99 | % | 18,434,578 | 195,614 | 4.23 | % | |||||||||||||
Auto loans | 452,038 | 8,164 | 7.19 | % | 15,541,333 | 622,373 | 15.89 | % | |||||||||||||
Other | 2,225,169 | 36,188 | 6.47 | % | 2,597,994 | 55,212 | 8.43 | % | |||||||||||||
Total consumer | 21,011,802 | 227,533 | 4.32 | % | 36,573,905 | 873,199 | 9.48 | % | |||||||||||||
Total loans | 52,736,131 | 539,229 | 4.08 | % | 65,549,007 | 1,177,123 | 7.13 | % | |||||||||||||
Allowance for loan losses | (1,044,043 | ) | — | — | (2,257,567 | ) | — | — | |||||||||||||
NET LOANS | 51,692,088 | 539,229 | 4.16 | % | 63,291,440 | 1,177,123 | 7.39 | % | |||||||||||||
TOTAL EARNING ASSETS | 71,589,956 | 647,200 | 3.60 | % | 80,080,075 | 1,289,604 | 6.40 | % | |||||||||||||
Other assets | 12,049,622 | 11,372,644 | |||||||||||||||||||
TOTAL ASSETS | $ | 83,639,578 | $ | 91,452,719 | |||||||||||||||||
INTEREST BEARING FUNDING LIABILITIES | |||||||||||||||||||||
Deposits and other customer related accounts: | |||||||||||||||||||||
Interest bearing demand deposits | $ | 8,781,998 | $ | 3,150 | 0.14 | % | $ | 9,072,820 | $ | 4,796 | 0.21 | % | |||||||||
Savings | 3,830,519 | 1,354 | 0.14 | % | 3,505,864 | 1,141 | 0.13 | % | |||||||||||||
Money market | 15,944,508 | 20,585 | 0.51 | % | 16,725,966 | 25,868 | 0.61 | % | |||||||||||||
Certificates of deposit | 12,241,295 | 33,898 | 1.10 | % | 10,414,319 | 33,263 | 1.27 | % | |||||||||||||
TOTAL INTEREST BEARING DEPOSITS | 40,798,320 | 58,987 | 0.58 | % | 39,718,969 | 65,068 | 0.65 | % | |||||||||||||
BORROWED FUNDS: | |||||||||||||||||||||
FHLB advances | 12,754,412 | 93,518 | 2.92 | % | 9,512,703 | 101,653 | 4.25 | % | |||||||||||||
Federal funds and repurchase agreements | 3,067,762 | 3,167 | 0.41 | % | 1,257,397 | 551 | 0.17 | % | |||||||||||||
Other borrowings | 3,568,343 | 60,996 | 6.80 | % | 18,933,471 | 156,295 | 3.28 | % | |||||||||||||
TOTAL BORROWED FUNDS | 19,390,517 | 157,681 | 3.24 | % | 29,703,571 | 258,499 | 3.46 | % | |||||||||||||
TOTAL INTEREST BEARING FUNDING LIABILITIES | 60,188,837 | 216,668 | 1.44 | % | 69,422,540 | 323,567 | 1.85 | % | |||||||||||||
Noninterest bearing demand deposits | 8,300,228 | 7,743,408 | |||||||||||||||||||
Other liabilities | 1,921,929 | 2,265,465 | |||||||||||||||||||
TOTAL LIABILITIES | 70,410,994 | 79,431,413 | |||||||||||||||||||
STOCKHOLDER’S EQUITY | 13,228,584 | 12,021,306 | |||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY | $ | 83,639,578 | $ | 91,452,719 | |||||||||||||||||
TAXABLE EQUIVALENT NET INTEREST INCOME | $ | 430,532 | $ | 966,037 | |||||||||||||||||
NET INTEREST SPREAD (2) | 2.17 | % | 4.55 | % | |||||||||||||||||
NET INTEREST MARGIN (3) | 2.40 | % | 4.79 | % |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
CONSOLIDATED AVERAGE BALANCE SHEET / TAX EQUIVALENT NET INTEREST MARGIN ANALYSIS | |||||||||||||||||||||
NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2012 AND 2011 | |||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||
Average Balance | Tax Equivalent Interest | Yield/ Rate | Average Balance | Tax Equivalent Interest | Yield/ Rate | ||||||||||||||||
(in thousands) | |||||||||||||||||||||
EARNING ASSETS | |||||||||||||||||||||
INVESTMENTS AND INTEREST-EARNING DEPOSITS | $ | 19,328,780 | $ | 328,362 | 2.27 | % | $ | 16,621,823 | $ | 348,747 | 2.80 | % | |||||||||
LOANS(1): | |||||||||||||||||||||
Commercial loans | 23,847,913 | 664,219 | 3.72 | % | 22,134,069 | 671,249 | 4.05 | % | |||||||||||||
Multi-family | 7,166,710 | 266,063 | 4.96 | % | 6,916,730 | 264,644 | 5.11 | % | |||||||||||||
Consumer loans: | |||||||||||||||||||||
Residential mortgages | 11,600,432 | 365,166 | 4.20 | % | 11,524,692 | 391,959 | 4.53 | % | |||||||||||||
Home equity loans and lines of credit | 6,808,715 | 191,221 | 3.75 | % | 6,939,197 | 201,374 | 3.88 | % | |||||||||||||
Total consumer loans secured by real estate | 18,409,147 | 556,387 | 4.03 | % | 18,463,889 | 593,333 | 4.29 | % | |||||||||||||
Auto loans | 657,841 | 34,418 | 6.99 | % | 16,289,524 | 1,897,248 | 15.57 | % | |||||||||||||
Other | 2,239,097 | 113,508 | 6.77 | % | 2,310,747 | 157,988 | 9.14 | % | |||||||||||||
Total consumer | 21,306,085 | 704,313 | 4.41 | % | 37,064,160 | 2,648,569 | 9.55 | % | |||||||||||||
Total loans | 52,320,708 | 1,634,595 | 4.17 | % | 66,114,959 | 3,584,462 | 7.25 | % | |||||||||||||
Allowance for loan losses | (1,066,567 | ) | — | — | % | (2,230,302 | ) | — | — | % | |||||||||||
NET LOANS | 51,254,141 | 1,634,595 | 4.26 | % | 63,884,657 | 3,584,462 | 7.50 | % | |||||||||||||
TOTAL EARNING ASSETS | 70,582,921 | 1,962,957 | 3.71 | % | 80,506,480 | 3,933,209 | 6.53 | % | |||||||||||||
Other assets | 12,152,103 | 11,418,898 | |||||||||||||||||||
TOTAL ASSETS | 82,735,024 | 91,925,378 | |||||||||||||||||||
INTEREST BEARING FUNDING LIABILITIES | |||||||||||||||||||||
Deposits and other customer related accounts: | |||||||||||||||||||||
Interest bearing demand deposits | $ | 9,103,372 | $ | 10,627 | 0.16 | % | $ | 9,305,758 | $ | 14,820 | 0.21 | % | |||||||||
Savings | 3,744,590 | 4,296 | 0.15 | % | 3,508,192 | 3,333 | 0.13 | % | |||||||||||||
Money market | 16,552,774 | 62,738 | 0.51 | % | 15,614,015 | 74,984 | 0.64 | % | |||||||||||||
CDs | 11,719,351 | 97,820 | 1.11 | % | 10,556,842 | 94,700 | 1.20 | % | |||||||||||||
TOTAL INTEREST BEARING DEPOSITS | 41,120,087 | 175,481 | 0.57 | % | 38,984,807 | 187,837 | 0.64 | % | |||||||||||||
BORROWED FUNDS: | |||||||||||||||||||||
FHLB advances | 11,475,290 | 281,085 | 3.27 | % | 9,973,027 | 322,621 | 4.32 | % | |||||||||||||
Federal funds and repurchase agreements | 3,358,254 | 8,819 | 0.35 | % | 2,021,096 | 5,498 | 0.36 | % | |||||||||||||
Other borrowings | 3,750,590 | 187,759 | 6.69 | % | 19,045,975 | 495,445 | 3.48 | % | |||||||||||||
TOTAL BORROWED FUNDS | 18,584,134 | 477,663 | 3.43 | % | 31,040,098 | 823,564 | 3.54 | % | |||||||||||||
TOTAL INTEREST BEARING FUNDING LIABILITIES | 59,704,221 | 653,144 | 1.46 | % | 70,024,905 | 1,011,401 | 1.93 | % |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Noninterest bearing demand deposits | 8,036,589 | 7,506,397 | |||||||||||||||||||
Other liabilities | 1,987,019 | 2,638,985 | |||||||||||||||||||
TOTAL LIABILITIES | 69,727,829 | 80,170,287 | |||||||||||||||||||
STOCKHOLDER’S EQUITY | 13,007,195 | 11,755,091 | |||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY | $ | 82,735,024 | $ | 91,925,378 | |||||||||||||||||
TAX EQUIVALENT BASIS INTEREST INCOME | 1,309,813 | 2,921,808 | |||||||||||||||||||
NET INTEREST SPREAD (2) | 2.24 | % | 4.62 | % | |||||||||||||||||
NET INTEREST MARGIN (3) | 2.48 | % | 4.85 | % |
(1) | Interest on loans includes amortization of premiums and discounts on purchased loans and amortization of deferred loan fees, net of origination costs. Average loan balances includes non-accrual loans and loans held for sale. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three-Month Period Ended September 30, | Nine-Month Period Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(in thousands) | |||||||||||||||
Allowance for loan losses, beginning of period | $ | 1,055,501 | $ | 2,226,973 | $ | 1,083,492 | $ | 2,197,450 | |||||||
Allowance recorded as part of loans transferred from Santander | 413 | — | 3,754 | — | |||||||||||
Charge-offs: | |||||||||||||||
Commercial | 78,897 | 109,970 | 263,005 | 365,649 | |||||||||||
Consumer secured by real estate | 51,802 | 142,245 | 125,876 | 210,310 | |||||||||||
Consumer not secured by real estate | 39,765 | 217,612 | 89,185 | 570,367 | |||||||||||
Total charge-offs | 170,464 | 469,827 | 478,066 | 1,146,326 | |||||||||||
Recoveries: | |||||||||||||||
Commercial | 11,421 | 14,698 | 31,979 | 34,409 | |||||||||||
Consumer secured by real estate | 1,503 | 2,830 | 5,858 | 5,241 | |||||||||||
Consumer not secured by real estate | 10,747 | 58,673 | 29,819 | 201,879 | |||||||||||
Total recoveries | 23,671 | 76,201 | 67,656 | 241,529 | |||||||||||
Charge-offs, net of recoveries | 146,793 | 393,626 | 410,410 | 904,797 | |||||||||||
Provision for loan losses (1) | 71,000 | 351,955 | 303,285 | 892,649 | |||||||||||
Allowance for loan losses, end of period | $ | 980,121 | $ | 2,185,302 | $ | 980,121 | $ | 2,185,302 | |||||||
Reserve for unfunded lending commitments, beginning of period | $ | 235,000 | $ | 340,843 | $ | 256,485 | $ | 300,621 | |||||||
Provision for unfunded lending commitments (1) | — | 16,758 | (21,485 | ) | 56,980 | ||||||||||
Reserve for unfunded lending commitments, end of period | $ | 235,000 | $ | 357,601 | $ | 235,000 | $ | 357,601 | |||||||
Total allowance for credit losses, end of period | $ | 1,215,121 | $ | 2,542,903 | $ | 1,215,121 | $ | 2,542,903 |
(1) | The provision for credit losses on the Consolidated Statement of Comprehensive Income is the sum of the total provision for loan losses and provision for unfunded lending commitments. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three-Month Period Ended September 30, | Nine-Month Period Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(in thousands) | |||||||||||||||
Mortgage servicing fees | $ | 11,428 | $ | 13,137 | $ | 39,478 | $ | 38,894 | |||||||
Sales of mortgage loans and related securities | $ | (7,577 | ) | $ | 6,955 | $ | 17,288 | $ | 13,029 | ||||||
Net losses from changes in fair value | (25,614 | ) | — | (44,772 | ) | — | |||||||||
Net gains on hedging activities | 31,799 | 3,808 | 37,760 | 4,042 | |||||||||||
Amortization of mortgage servicing rights | — | (9,677 | ) | (523 | ) | (30,488 | ) | ||||||||
Residential mortgage servicing rights impairments | — | (39,664 | ) | — | (42,515 | ) | |||||||||
Charges related to multi-family loans sold with recourse | 4,900 | (479 | ) | 2,665 | (1,402 | ) | |||||||||
Multi-family mortgage servicing rights recoveries | — | (23 | ) | 88 | 4,726 | ||||||||||
Total mortgage banking income, net | $ | 14,936 | $ | (25,943 | ) | $ | 51,984 | $ | (13,714 | ) |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
September 30, 2012 | December 31, 2011 | ||||||
(in thousands) | |||||||
Non-accrual loans: | |||||||
Commercial: | |||||||
Commercial real estate | $ | 303,335 | $ | 459,692 | |||
Commercial and industrial | 117,495 | 213,617 | |||||
Multi-family | 64,911 | 126,738 | |||||
Total commercial loans | 485,741 | 800,047 | |||||
Consumer: | |||||||
Residential mortgages | 519,931 | 438,461 | |||||
Consumer loans secured by real estate | 163,477 | 108,075 | |||||
Consumer not secured by real estate | 18,536 | 12,883 | |||||
Total consumer loans | 701,944 | 559,419 | |||||
Total non-accrual loans | 1,187,685 | 1,359,466 | |||||
Other real estate owned | 82,209 | 103,026 | |||||
Other repossessed assets | 4,255 | 5,671 | |||||
Total other real estate owned and other repossessed assets | 86,464 | 108,697 | |||||
Total non-performing assets | $ | 1,274,149 | $ | 1,468,163 | |||
Past due 90 days or more as to interest or principal and accruing interest | $ | 2,993 | $ | 1,211 | |||
Annualized net loan charge-offs to average loans (2) | 1.05 | % | 1.92 | % | |||
Non-performing assets as a percentage of total assets | 1.50 | % | 1.83 | % | |||
Non-performing loans as a percentage of total loans | 2.24 | % | 2.63 | % | |||
Non-performing assets as a percentage of total loans, real estate owned and repossessed assets | 2.40 | % | 2.84 | % | |||
Allowance for credit losses as a percentage of total non-performing assets (1) | 95.4 | % | 91.3 | % | |||
Allowance for credit losses as a percentage of total non-performing loans (1) | 102.3 | % | 98.6 | % |
(1) | Allowance for credit losses is comprised of the allowance for loan losses and the reserve for unfunded commitments, which is included in other liabilities. |
(2) | Annualized net loan charge-offs to average loans is calculated as annualized net loan charge-off divided by the average loan balance for the nine-month period ended September 30, 2012. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
September 30, 2012 | December 31, 2011 | ||||||
(in thousands) | |||||||
Performing | |||||||
Commercial | $ | 153,986 | $ | 102,934 | |||
Residential mortgage | 404,346 | 385,863 | |||||
Other consumer | 50,755 | 38,849 | |||||
Total performing | 609,087 | 527,646 | |||||
Non-performing | |||||||
Commercial | 112,833 | 93,420 | |||||
Residential mortgage | 223,013 | 105,476 | |||||
Other consumer | 69,334 | 18,359 | |||||
Total non-performing | 405,180 | 217,255 | |||||
Total | $ | 1,014,267 | $ | 744,901 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
September 30, 2012 | December 31, 2011 | ||||||||||||
Amount | % of Loans to Total Loans | Amount | % of Loans to Total Loans | ||||||||||
(in thousands) | |||||||||||||
Allocated allowance: | |||||||||||||
Commercial loans | $ | 588,363 | 61 | % | $ | 766,865 | 58 | % | |||||
Consumer loans | 388,034 | 39 | % | 292,816 | 42 | % | |||||||
Unallocated allowance | 3,724 | n/a | 23,811 | n/a | |||||||||
Total allowance for loan losses | $ | 980,121 | 100 | % | $ | 1,083,492 | 100 | % | |||||
Reserve for unfunded lending commitments | 235,000 | 256,485 | |||||||||||
Total allowance for credit losses | $ | 1,215,121 | $ | 1,339,977 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
September 30, 2012 | December 31, 2011 | ||||||||||||||
Balance | Percent of total deposits | Balance | Percent | ||||||||||||
(dollars in thousands) | |||||||||||||||
Interest-bearing demand deposits | $ | 9,160,334 | 18.2 | % | $ | 9,345,803 | 19.6 | % | |||||||
Noninterest-bearing demand deposits | 8,411,621 | 16.7 | 7,822,892 | 16.4 | |||||||||||
Savings | 3,796,647 | 7.6 | 3,495,902 | 7.3 | |||||||||||
Money market | 16,259,544 | 32.4 | 17,237,730 | 36.1 | |||||||||||
Certificates of deposit | 12,593,858 | 25.1 | 9,895,188 | 20.6 | |||||||||||
Total Deposits | $ | 50,222,004 | 100.0 | % | $ | 47,797,515 | 100.0 | % |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
September 30, 2012 | December 31, 2011 | ||||||||||||
Balance | Effective Rate | Balance | Effective Rate | ||||||||||
(dollars in thousands) | |||||||||||||
Sovereign Bank borrowings and other debt obligations: | |||||||||||||
Overnight federal funds purchased(1) | $ | 110,000 | 0.16 | % | $ | 1,166,000 | 0.08 | % | |||||
Federal Home Loan Bank (FHLB) advances, maturing through August 2018 | 13,028,736 | 2.78 | 11,076,773 | 3.40 | |||||||||
Securities sold under repurchase agreements(1) | 1,937,175 | 0.42 | 1,030,300 | 0.38 | |||||||||
REIT preferred, due May 2020 | 150,066 | 13.92 | 148,966 | 14.08 | |||||||||
2.75% senior notes, due January 2012 | — | — | 1,349,920 | 3.92 | |||||||||
5.125% subordinated debentures, due March 2013 | 253,792 | 5.16 | 260,277 | 5.21 | |||||||||
8.750% subordinated debentures, due May 2018 | 496,864 | 8.81 | 496,554 | 8.81 | |||||||||
Term loan, due February 2019(2) | 156,350 | 4.38 | — | — | |||||||||
Total Sovereign Bank borrowings and other debt obligations | $ | 16,132,983 | 2.82 | % | $ | 15,528,790 | 3.30 | % |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
September 30, 2012 | December 31, 2011 | ||||||||||||
Balance | Effective Rate | Balance | Effective Rate | ||||||||||
(dollars in thousands) | |||||||||||||
Holding company borrowings and other debt obligations: | |||||||||||||
Commercial paper(1) | $ | 999 | 0.55 | % | $ | 18,082 | 0.87 | % | |||||
Subordinated notes, due March 2020 | 754,429 | 5.96 | 753,072 | 5.96 | |||||||||
2.50% senior notes, due June 2012 | — | — | 249,786 | 3.73 | |||||||||
4.625% senior notes, due April 2016 | 474,279 | 4.64 | 496,761 | 4.66 | |||||||||
3.00% senior notes, due September 2015 | 597,418 | 3.28 | — | — | |||||||||
Junior subordinate debentures - Capital Trust IV, due March 2034 (2) | 800,000 | 13.61 | 800,000 | 7.41 | |||||||||
Common securities - Capital Trust IV | 24,742 | 4.38 | 24,742 | 7.41 | |||||||||
Junior subordinate debentures - Capital Trust VI, due June 2036 (3) | 239,560 | 7.91 | 242,560 | 7.91 | |||||||||
Common securities - Capital Trust VI | 10,000 | 7.91 | 10,000 | 7.91 | |||||||||
Junior subordinate debentures - Capital Trust IX, due July 2036 | 150,000 | 2.21 | 150,000 | 2.15 | |||||||||
Common securities - Capital Trust IX | 4,640 | 2.21 | 4,640 | 2.15 | |||||||||
Total holding company borrowings and other debt obligations | $ | 3,056,067 | 7.19 | % | $ | 2,749,643 | 5.89 | % |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Sovereign Bank | |||||||||
September 30, 2012 | Well-capitalized Requirement | Minimum Requirement | |||||||
Tier 1 leverage capital ratio | 10.52 | % | 5.00 | % | 4.00 | % | |||
Tier 1 risk-based capital ratio | 12.84 | % | 6.00 | % | 4.00 | % | |||
Total risk-based capital ratio | 14.89 | % | 10.00 | % | 8.00 | % | |||
Tier 1 common capital ratio(1) | 12.84 | % | n/a | n/a |
SHUSA | |||||||
September 30, 2012 | |||||||
Tier 1 leverage capital ratio | 10.96 | % | |||||
Tier 1 risk-based capital ratio | 13.26 | % | |||||
Total risk-based capital ratio | 15.75 | % | |||||
Tier 1 common capital ratio(1) | 12.36 | % |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Payments Due by Period | |||||||||||||||||||
Total | Less than 1 year | Over 1 yr to 3 yrs | Over 3 yrs to 5 yrs | Over 5 yrs | |||||||||||||||
(in thousands) | |||||||||||||||||||
FHLB advances (1) | $ | 14,205,052 | $ | 4,332,024 | $ | 6,238,912 | $ | 2,698,240 | $ | 935,876 | |||||||||
Federal funds purchased (1) | 110,000 | 110,000 | — | — | — | ||||||||||||||
Commercial paper and repurchase agreements | 1,939,213 | 1,939,213 | — | — | — | ||||||||||||||
Other debt obligations (1) (2) | 3,598,740 | 421,305 | 1,651,136 | 657,529 | 868,770 | ||||||||||||||
Junior subordinated debentures due to capital trust entities (1) (2) | 1,919,065 | 236,279 | 161,532 | 391,357 | 1,129,897 | ||||||||||||||
Certificates of deposit (1) | 12,806,438 | 8,810,493 | 2,661,077 | 1,332,424 | 2,444 | ||||||||||||||
Investment partnership commitments (3) | 154 | 74 | 26 | 26 | 28 | ||||||||||||||
Operating leases(4) | 651,839 | 103,871 | 180,337 | 143,036 | 224,595 | ||||||||||||||
Total contractual cash obligations | $ | 35,230,501 | $ | 15,953,259 | $ | 10,893,020 | $ | 5,222,612 | $ | 3,161,610 |
(1) | Includes interest on both fixed and variable rate obligations. The interest associated with variable rate obligations is based upon interest rates in effect at September 30, 2012. The contractual amounts to be paid on variable rate obligations are affected by changes in market interest rates. Future changes in market interest rates could materially affect the contractual amounts to be paid. |
(2) | Includes all carrying value adjustments, such as unamortized premiums or discounts and hedge basis adjustments. |
(3) | The commitments to fund investment partnerships represent future cash outlays for the construction and development of properties for low-income housing, and historic tax credit projects. The timing and amounts of these commitments are projected based upon the financing arrangements provided in each project’s partnership or operating agreement, and could change due to variances in the construction schedule, project revisions, or the cancellation of the project. |
(4) | Does not include future expected sublease income. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
If interest rates changed in parallel by the amounts below at September 30, 2012 | The following estimated percentage increase/(decrease) to net interest income would result | ||
Up 100 basis points | 6.61 | % | |
Up 200 basis points | 11.10 | % | |
Down 100 basis points | (6.10 | )% |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
The following estimated percentage increase/(decrease) to MVE would result | ||||||||
If interest rates changed in parallel by | September 30, 2012 | December 31, 2011 | ||||||
Base | $ | 10,754 | $ | 8,777 | ||||
Up 200 basis points | (3.33 | )% | (5.91 | )% | ||||
Up 100 basis points | (0.31 | )% | (1.85 | )% |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
Item 1 | — Legal Proceedings |
Item 1A | — Risk Factors |
• | Liquidity is Essential to the Company's Businesses, and the Company Relies on External Sources, Including Government Agencies to Finance a Significant Portion of its Operations |
Item 2 | — Unregistered Sales of Equity Securities and Use of Proceeds. |
Item 3 | — Defaults upon Senior Securities |
Item 4 | — Mine Safety Disclosures |
Item 5 | — Other Information |
Item 6 | — Exhibits |
(3.1 | ) | Amended and Restated Articles of Incorporation of Santander Holdings USA, Inc. (Incorporated by reference to Exhibit 3.1 to Santander Holdings USA, Inc.’s Current Report on Form 8-K filed January 30, 2009) (Commission File Number 333-172807) |
(3.2 | ) | Articles of Amendment to the Articles of Incorporation of Santander Holdings USA, Inc. (Incorporated by reference to Exhibit 3.1 to Santander Holdings USA, Inc.'s Current Report on Form 8-K filed March 27, 2009) (Commission File Number 333-172807) |
(3.3 | ) | Articles of Amendment to the Articles of Incorporation of Santander Holdings USA, Inc. (Incorporated by reference to Exhibit 3.1 to Santander Holdings USA, Inc.’s Current Report on Form 8-K filed February 5, 2010) (Commission File Number 333-172807) |
(3.4 | ) | Articles of Amendment to the Articles of Incorporation of Santander Holdings USA, Inc. (Incorporated by reference to Exhibit 3.2 to Santander Holdings USA, Inc.’s Current Report on Form 8-K filed June 21, 2011) (Commission File Number 333-172807) |
(3.5 | ) | Amended and Restated Bylaws of Santander Holdings USA, Inc. (Incorporated by reference to Exhibit 3.1 of Santander Holdings USA, Inc.’s Current Report on Form 8-K filed June 21, 2011) (Commission File Number 333-172807) |
(4.1 | ) | Santander Holdings USA, Inc. has certain debt obligations outstanding. None of the instruments evidencing such debt authorizes an amount of securities in excess of 10% of the total assets of Santander Holdings USA, Inc. and its subsidiaries on a consolidated basis; therefore, copies of such instruments are not included as exhibits to this Quarterly Report on Form 10-Q. Santander Holdings USA, Inc. agrees to furnish copies to the SEC on request. |
(31.1 | ) | Chief Executive Officer certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
(31.2 | ) | Chief Financial Officer certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
(32.1 | ) | Chief Executive Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
(32.2 | ) | Chief Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
SANTANDER HOLDINGS USA, INC. (Registrant) | |||
Date: | November 9, 2012 | /s/ Jorge Morán | |
Jorge Morán | |||
President and Chief Executive Officer (Authorized Officer) | |||
Date: | November 9, 2012 | /s/ Guillermo Sabater | |
Guillermo Sabater | |||
Chief Financial Officer and Executive Vice President (Principal Financial Officer) | |||
(3.1 | ) | Amended and Restated Articles of Incorporation of Santander Holdings USA, Inc. (Incorporated by reference to Exhibit 3.1 to Santander Holdings USA, Inc.’s Current Report on Form 8-K filed January 30, 2009) (Commission File Number 333-172807) |
(3.2 | ) | Articles of Amendment to the Articles of Incorporation of Santander Holdings USA, Inc. (Incorporated by reference to Exhibit 3.1 to Santander Holdings USA, Inc. Current Report on Form 8-K filed March 27, 2009) (Commission File Number 333-172807) |
(3.3 | ) | Articles of Amendment to the Articles of Incorporation of Santander Holdings USA, Inc. (Incorporated by reference to Exhibit 3.1 to Santander Holdings USA, Inc.’s Current Report on Form 8-K filed February 5, 2010) (Commission File Number 333-172807) |
(3.4 | ) | Articles of Amendment to the Articles of Incorporation of Santander Holdings USA, Inc. (Incorporated by reference to Exhibit 3.2 to Santander Holdings USA, Inc.’s Current Report on Form 8-K filed June 21, 2011) (Commission File Number 333-172807) |
(3.5 | ) | Amended and Restated Bylaws of Santander Holdings USA, Inc. (Incorporated by reference to Exhibit 3.1 of Santander Holdings USA, Inc.’s Current Report on Form 8-K filed June 21, 2011) (Commission File Number 333-172807) |
(4.1 | ) | Santander Holdings USA, Inc. has certain debt obligations outstanding. None of the instruments evidencing such debt authorizes an amount of securities in excess of 10% of the total assets of Santander Holdings USA, Inc. and its subsidiaries on a consolidated basis; therefore, copies of such instruments are not included as exhibits to this Quarterly Report on Form 10-Q. Santander Holdings USA, Inc. agrees to furnish copies to the SEC on request. |
(31.1 | ) | Chief Executive Officer certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
(31.2 | ) | Chief Financial Officer certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
(32.1 | ) | Chief Executive Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
(32.2 | ) | Chief Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
1. | I have reviewed this quarterly report on Form 10-Q of Santander Holdings USA, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Jorge Morán |
Name: Jorge Morán |
Title: President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Santander Holdings USA, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
s/ Guillermo Sabater |
Name: Guillermo Sabater |
Title: Chief Financial Officer and Executive Vice President |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all in material respects, the financial condition and results of operations of the Company. |
/s/ Jorge Morán |
Name: Jorge Morán |
Title: President and Chief Executive Officer |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
s/ Guillermo Sabater |
Name: Guillermo Sabater |
Title: Chief Financial Officer and Executive Vice President |
Goodwill and Other Intangible Assets (Goodwill) (Details) (USD $)
In Thousands, unless otherwise specified |
9 Months Ended | |
---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
|
|
Goodwill [Line Items] | ||
Goodwill | $ 3,431,481 | $ 3,431,481 |
Goodwill Purchase Accounting Adjustments/Impairments | 0 | |
Retail banking [Member]
|
||
Goodwill [Line Items] | ||
Goodwill | 2,259,179 | 2,259,179 |
Goodwill Purchase Accounting Adjustments/Impairments | 0 | |
Specialized Business [Member]
|
||
Goodwill [Line Items] | ||
Goodwill | 0 | 0 |
Goodwill Purchase Accounting Adjustments/Impairments | 0 | |
Corporate banking [Member]
|
||
Goodwill [Line Items] | ||
Goodwill | 1,172,302 | 1,172,302 |
Goodwill Purchase Accounting Adjustments/Impairments | 0 | |
Global Banking [Member]
|
||
Goodwill [Line Items] | ||
Goodwill | 0 | 0 |
Goodwill Purchase Accounting Adjustments/Impairments | $ 0 |
Fair Value (Fair Value Measurments, Non-recurring) (Details) (USD $)
|
3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2012
Nonrecurring [Member]
|
Sep. 30, 2011
Nonrecurring [Member]
|
Sep. 30, 2012
Nonrecurring [Member]
|
Sep. 30, 2011
Nonrecurring [Member]
|
Sep. 30, 2012
Nonrecurring [Member]
Impaired loans held for investment [Member]
Provision for credit losses [Member]
|
Sep. 30, 2011
Nonrecurring [Member]
Impaired loans held for investment [Member]
Provision for credit losses [Member]
|
Sep. 30, 2012
Nonrecurring [Member]
Impaired loans held for investment [Member]
Provision for credit losses [Member]
|
Sep. 30, 2011
Nonrecurring [Member]
Impaired loans held for investment [Member]
Provision for credit losses [Member]
|
Sep. 30, 2012
Nonrecurring [Member]
Foreclosed assets [Member]
Other administrative expense [Member]
|
Sep. 30, 2011
Nonrecurring [Member]
Foreclosed assets [Member]
Other administrative expense [Member]
|
Sep. 30, 2012
Nonrecurring [Member]
Foreclosed assets [Member]
Other administrative expense [Member]
|
Sep. 30, 2011
Nonrecurring [Member]
Foreclosed assets [Member]
Other administrative expense [Member]
|
Sep. 30, 2012
Nonrecurring [Member]
Mortgage servicing rights [Member]
Mortgage banking income [Member]
|
Sep. 30, 2011
Nonrecurring [Member]
Mortgage servicing rights [Member]
Mortgage banking income [Member]
|
Sep. 30, 2012
Nonrecurring [Member]
Mortgage servicing rights [Member]
Mortgage banking income [Member]
|
Sep. 30, 2011
Nonrecurring [Member]
Mortgage servicing rights [Member]
Mortgage banking income [Member]
|
Sep. 30, 2012
Nonrecurring [Member]
Quoted prices in active markets for identical assets (Level 1) [Member]
|
Dec. 31, 2011
Nonrecurring [Member]
Quoted prices in active markets for identical assets (Level 1) [Member]
|
Sep. 30, 2012
Nonrecurring [Member]
Significant other observable inputs (Level 2) [Member]
|
Dec. 31, 2011
Nonrecurring [Member]
Significant other observable inputs (Level 2) [Member]
|
Sep. 30, 2012
Nonrecurring [Member]
Significant unobservable inputs (Level 3) [Member]
|
Dec. 31, 2011
Nonrecurring [Member]
Significant unobservable inputs (Level 3) [Member]
|
Sep. 30, 2012
Nonrecurring [Member]
Fair value [Member]
|
Dec. 31, 2011
Nonrecurring [Member]
Fair value [Member]
|
|||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||
Impaired loans held for investment | $ 0 | [1] | $ 0 | [1] | $ 407,549,000 | [1] | $ 1,388,268,000 | [1] | $ 111,601,000 | [1] | $ 0 | [1] | $ 519,150,000 | [1] | $ 1,388,268,000 | [1] | |||||||||||||||||||||||
Foreclosed assets | 0 | [2] | 0 | [2] | 31,657,000 | [2] | 74,031,000 | [2] | 0 | [2] | 0 | [2] | 31,657,000 | [2] | 74,031,000 | [2] | |||||||||||||||||||||||
Mortgage servicing rights | 78,095,000 | 0 | [3] | 0 | [3] | 0 | [3] | 0 | [3] | 0 | [3] | 91,686,000 | [3] | 0 | [3] | 91,686,000 | [3] | ||||||||||||||||||||||
Fair value adjustment | $ 27,894,000 | $ 32,523,000 | $ 61,787,000 | $ 5,146,000 | $ 29,680,000 | $ 79,413,000 | $ 66,558,000 | $ 56,140,000 | $ (1,786,000) | $ (7,203,000) | $ (4,859,000) | $ (13,205,000) | $ 0 | $ (39,687,000) | $ 88,000 | $ (37,789,000) | |||||||||||||||||||||||
|
Goodwill and Other Intangible Assets (Finite-lived Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Dec. 31, 2011
|
|
Finite-lived Intangible Assets [Line Items] | |||||
Net carrying amount | $ 70,227 | $ 70,227 | $ 99,171 | ||
Accumulated amortization | 198,782 | 198,782 | 169,837 | ||
Amortization expense | 8,871 | 13,138 | 28,944 | 43,041 | |
Core deposit intangibles [Member]
|
|||||
Finite-lived Intangible Assets [Line Items] | |||||
Net carrying amount | 53,568 | 53,568 | 79,389 | ||
Accumulated amortization | 185,532 | 185,532 | 159,711 | ||
Purchased credit card relationships [Member]
|
|||||
Finite-lived Intangible Assets [Line Items] | |||||
Net carrying amount | 7,707 | 7,707 | 9,636 | ||
Accumulated amortization | 6,498 | 6,498 | 4,568 | ||
Operating lease agreements [Member]
|
|||||
Finite-lived Intangible Assets [Line Items] | |||||
Net carrying amount | 8,952 | 8,952 | 10,146 | ||
Accumulated amortization | $ 6,752 | $ 6,752 | $ 5,558 |
Business Segment Information (Segment Reporting Information) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net interest income | $ 418,318 | $ 954,568 | $ 1,272,835 | $ 2,886,722 | ||||||||
Total non-interest income | 249,483 | 235,041 | 894,874 | 791,261 | ||||||||
(Release)/provision for credit losses | 71,000 | 368,713 | 281,800 | 949,629 | ||||||||
Total expenses | 645,891 | 509,853 | 1,450,505 | 1,499,064 | ||||||||
Income/(loss) before income taxes | (49,090) | 311,043 | 435,404 | 1,229,290 | ||||||||
Intersegment revenue/(expense) | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | ||||
Total average assets | 83,639,578 | 91,452,719 | 82,735,024 | 91,925,378 | ||||||||
Retail [Member]
|
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net interest income | 197,191 | 199,478 | 611,703 | 630,518 | ||||||||
Total non-interest income | 87,352 | 79,155 | 313,639 | 317,166 | ||||||||
(Release)/provision for credit losses | 79,923 | 29,006 | 216,480 | 173,458 | ||||||||
Total expenses | 221,952 | 210,913 | 661,125 | 615,344 | ||||||||
Income/(loss) before income taxes | (17,332) | 38,714 | 47,737 | 158,882 | ||||||||
Intersegment revenue/(expense) | (19,743) | [1] | (33,351) | [1] | (62,577) | [1] | (66,285) | [1] | ||||
Total average assets | 24,951,284 | 24,879,706 | 25,234,098 | 24,638,742 | ||||||||
Corporate [Member]
|
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net interest income | 109,404 | 101,566 | 328,668 | 303,428 | ||||||||
Total non-interest income | 23,741 | 18,914 | 58,549 | 59,434 | ||||||||
(Release)/provision for credit losses | (11,445) | 66,872 | (787) | 166,127 | ||||||||
Total expenses | 29,942 | 26,314 | 92,319 | 80,830 | ||||||||
Income/(loss) before income taxes | 114,648 | 27,294 | 295,685 | 115,905 | ||||||||
Intersegment revenue/(expense) | (105,174) | [1] | (115,852) | [1] | (315,107) | [1] | (360,074) | [1] | ||||
Total average assets | 21,668,962 | 20,591,698 | 21,323,418 | 20,673,895 | ||||||||
Global Banking [Member]
|
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net interest income | 25,863 | 11,560 | 73,238 | 32,084 | ||||||||
Total non-interest income | 8,563 | 5,793 | 33,414 | 20,236 | ||||||||
(Release)/provision for credit losses | (7,748) | 4,745 | 14,159 | 12,845 | ||||||||
Total expenses | 6,030 | 3,550 | 27,391 | 8,543 | ||||||||
Income/(loss) before income taxes | 36,144 | 9,058 | 65,102 | 30,932 | ||||||||
Intersegment revenue/(expense) | (14,489) | [1] | (4,562) | [1] | (34,998) | [1] | (13,129) | [1] | ||||
Total average assets | 5,952,358 | 3,543,617 | 5,436,831 | 3,251,930 | ||||||||
Specialized Business [Member]
|
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net interest income | 9,946 | 13,571 | 31,167 | 49,022 | ||||||||
Total non-interest income | 2,979 | 4,017 | 11,172 | 13,130 | ||||||||
(Release)/provision for credit losses | (34,293) | 25,152 | (49,188) | 92,257 | ||||||||
Total expenses | 6,394 | 7,248 | 19,846 | 21,111 | ||||||||
Income/(loss) before income taxes | 40,824 | (14,812) | 71,681 | (51,216) | ||||||||
Intersegment revenue/(expense) | (11,708) | [1] | (23,555) | [1] | (43,500) | [1] | (81,284) | [1] | ||||
Total average assets | 1,376,638 | 2,366,472 | 1,595,392 | 2,718,630 | ||||||||
Other [Member]
|
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net interest income | 75,914 | [2] | 87,218 | [2] | 228,059 | [2] | 248,384 | [2] | ||||
Total non-interest income | 14,011 | [2] | 47,094 | [2] | 91,524 | [2] | 108,178 | [2] | ||||
(Release)/provision for credit losses | 44,563 | [2] | 4,425 | [2] | 101,136 | [2] | (3,574) | [2] | ||||
Total expenses | 381,573 | 129,227 | [2] | 649,824 | [2] | 354,402 | [2] | |||||
Income/(loss) before income taxes | (336,211) | [2] | 660 | [2] | (431,377) | [2] | 5,734 | [2] | ||||
Intersegment revenue/(expense) | 151,114 | [1],[2] | 177,320 | [1],[2] | 456,182 | [1],[2] | 520,772 | [1],[2] | ||||
Total average assets | 29,690,336 | [2] | 24,741,738 | [2] | 29,145,285 | [2] | 24,812,356 | [2] | ||||
SCUSA [Member]
|
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net interest income | 0 | 541,175 | 0 | 1,623,286 | ||||||||
Total non-interest income | 112,837 | 80,068 | 386,576 | 273,117 | ||||||||
(Release)/provision for credit losses | 0 | 238,513 | 0 | 508,516 | ||||||||
Total expenses | 0 | 132,601 | 0 | 418,834 | ||||||||
Income/(loss) before income taxes | 112,837 | 250,129 | 386,576 | 969,053 | ||||||||
Intersegment revenue/(expense) | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | ||||
Total average assets | $ 0 | $ 15,329,488 | $ 0 | $ 15,829,825 | ||||||||
|
Basis of Presentation and Accounting Policies (Details) (USD $)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Dec. 31, 2011
|
|
Accounting Policies [Abstract] | ||||
Prior period reclassification adjustment | $ 3,400,000 | $ 9,400,000 | ||
Capital raised | $ 1,160,000,000 | |||
Ownership percentage | 65.00% |
Fair Value (Sensitivity Analysis of Fair Value, Mortgage Servicing Rights) (Details) (Mortgage servicing rights [Member], USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Mar. 31, 2012
|
---|---|---|
Mortgage servicing rights [Member]
|
||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Sensitivity analysis of fair value, impact of 10 percent adverse change in prepayment speed | $ (5.3) | |
Sensitivity analysis of fair value, impact of 20 percent adverse change in prepayment speed | (10.0) | |
Sensitivity analysis of fair value, impact of 10 percent adverse change in discount rate | (2.1) | |
Sensitivity analysis of fair value, impact of 20 percent adverse change in discount rate | $ (4.1) |
Mortgage Servicing Rights (Valuation Allowance Activity) (Details) (Residential mortgages [Member], USD $)
In Thousands, unless otherwise specified |
9 Months Ended | |
---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Residential mortgages [Member]
|
||
Valuation Allowance for Impairment of Servicing Assets [Roll Forward] | ||
Balance at beginning of period | $ 70,040 | $ 27,525 |
Write-off of reserves | (70,040) | 0 |
Net change in valuation allowance for mortgage servicing rights | 0 | 42,515 |
Balance of end of period | $ 0 | $ 70,040 |
Fair Value (Fair Value Option Disclosures) (Details) (USD $)
|
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2012
|
Sep. 30, 2012
|
|
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Mortgage servicing rights | $ 78,095,000 | $ 78,095,000 |
Residential mortgages [Member]
|
||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Mortgage servicing rights | 78,095,000 | 78,095,000 |
Changes in fair value, gain (loss) | (25,600,000) | (44,800,000) |
Loans held for sale [Member]
|
||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Loans held for sale | 772,088,000 | 772,088,000 |
Loans held for sale, contractual principal amount | 734,200,000 | 734,200,000 |
Loans held for sale, difference in fair value and principal balance | 37,900,000 | 37,900,000 |
Mortgage servicing rights [Member] | Residential mortgages [Member]
|
||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Mortgage servicing rights | 78,095,000 | 78,095,000 |
Mortgage servicing rights [Member] | Mortgage banking income [Member] | Residential mortgages [Member]
|
||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Changes in fair value, gain (loss) | $ (44,800,000) |
Business Segment Information (Equity Method Investment, SCUSA) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
|
Sep. 30, 2012
SCUSA [Member]
|
Sep. 30, 2011
SCUSA [Member]
|
Sep. 30, 2012
SCUSA [Member]
|
Sep. 30, 2011
SCUSA [Member]
|
|
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 65.00% | |||||
Investment balance | $ 2,916,047 | $ 2,884,008 | $ 2,700,000 | $ 2,700,000 | ||
Equity Method Investment, Summarized Financial Information [Abstract] | ||||||
Interest income | 649,134 | 541,175 | 1,869,474 | 1,623,286 | ||
Net interest income after provision for credit losses | 463,259 | 302,662 | 1,209,272 | 1,114,770 | ||
Income before taxes | 353,820 | 250,129 | 983,970 | 969,053 | ||
Net income | 212,559 | 158,852 | 611,704 | 618,230 | ||
Total assets | $ 18,826,462 | $ 15,083,692 | $ 18,826,462 | $ 15,083,692 |
Fair Value (Reconciliation of Assets and Liabilities Using Level 3 Inputs) (Details) (Level 3 [Member], USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Mar. 31, 2012
|
Mar. 31, 2011
|
|||||||
Fair Value, Assets, Unobservable Input Reconciliation [Roll Forward] | ||||||||||||
Balance, beginning of period | $ 145,144 | $ 1,649,924 | $ 856,520 | $ 1,256,511 | ||||||||
Gains (losses) in other comprehensive income | 1,114 | 36,677 | (5,169) | 33,486 | ||||||||
Gains (losses) in earnings | 1,343 | (31,138) | (7,629) | (16,492) | ||||||||
Purchases | 44,974 | 0 | 192,974 | 0 | ||||||||
Issuances | 8,173 | 4,443 | 31,616 | 17,926 | ||||||||
Sales | 0 | 0 | (20,000) | (180,611) | ||||||||
Settlements | (374) | [1] | (73,131) | [1] | (1,123) | [1] | (290,059) | [1] | ||||
Amortization | 0 | (9,676) | (523) | (30,488) | ||||||||
Transfers into/out of level 3 | 0 | 0 | 576,460 | 0 | ||||||||
Balance, end of period | 911,750 | 1,183,686 | 911,750 | 1,183,686 | 856,520 | 1,256,511 | ||||||
Changes in unrealized gains (losses) included in earnings related to balances still held at end of period | (24,767) | (39,548) | (39,398) | (35,509) | ||||||||
Mortgage servicing rights [Member]
|
||||||||||||
Fair Value, Assets, Unobservable Input Reconciliation [Roll Forward] | ||||||||||||
Changes in unrealized gains (losses) included in earnings related to balances still held at end of period | (25,614) | |||||||||||
Recurring [Member] | Investments available-for-sale [Member]
|
||||||||||||
Fair Value, Assets, Unobservable Input Reconciliation [Roll Forward] | ||||||||||||
Balance, beginning of period | 52,315 | 1,511,847 | 749,693 | 1,117,472 | ||||||||
Gains (losses) in other comprehensive income | 1,114 | 36,677 | (5,169) | 33,702 | ||||||||
Gains (losses) in earnings | 0 | 0 | (50) | 9,843 | ||||||||
Purchases | 44,974 | 0 | 192,974 | 0 | ||||||||
Issuances | 0 | 0 | 0 | 0 | ||||||||
Sales | 0 | 0 | (20,000) | (180,611) | ||||||||
Settlements | (374) | [1] | (73,131) | [1] | (1,123) | [1] | (293,763) | [1] | ||||
Amortization | 0 | 0 | 0 | 0 | ||||||||
Transfers into/out of level 3 | 0 | 0 | 576,460 | 0 | ||||||||
Balance, end of period | 795,407 | 1,081,018 | 795,407 | 1,081,018 | 749,693 | 1,117,472 | ||||||
Changes in unrealized gains (losses) included in earnings related to balances still held at end of period | 0 | 0 | 0 | 0 | ||||||||
Recurring [Member] | Mortgage servicing rights [Member]
|
||||||||||||
Fair Value, Assets, Unobservable Input Reconciliation [Roll Forward] | ||||||||||||
Balance, beginning of period | 91,686 | 146,028 | 95,536 | 140,597 | ||||||||
Gains (losses) in other comprehensive income | 0 | 0 | 0 | 0 | ||||||||
Gains (losses) in earnings | (25,614) | (39,687) | (44,684) | (37,789) | ||||||||
Purchases | 0 | 0 | 0 | |||||||||
Issuances | 8,173 | 4,443 | 31,616 | 17,926 | ||||||||
Sales | 0 | 0 | 0 | 0 | ||||||||
Settlements | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | ||||
Amortization | 0 | (9,676) | (523) | (30,488) | ||||||||
Transfers into/out of level 3 | 0 | 0 | 0 | 0 | ||||||||
Balance, end of period | 78,095 | 95,677 | 78,095 | 95,677 | 95,536 | 140,597 | ||||||
Changes in unrealized gains (losses) included in earnings related to balances still held at end of period | (39,687) | (44,772) | (37,789) | |||||||||
Recurring [Member] | Derivatives [Member]
|
||||||||||||
Fair Value, Assets, Unobservable Input Reconciliation [Roll Forward] | ||||||||||||
Balance, beginning of period | 1,143 | (7,951) | 11,291 | (1,558) | ||||||||
Gains (losses) in other comprehensive income | 0 | 0 | 0 | (216) | ||||||||
Gains (losses) in earnings | 26,957 | 8,549 | 37,105 | 11,454 | ||||||||
Purchases | 0 | 0 | 0 | 0 | ||||||||
Issuances | 0 | 0 | 0 | 0 | ||||||||
Sales | 0 | 0 | 0 | 0 | ||||||||
Settlements | 0 | [1] | 0 | [1] | 0 | [1] | 3,704 | [1] | ||||
Amortization | 0 | 0 | 0 | 0 | ||||||||
Transfers into/out of level 3 | 0 | 0 | 0 | 0 | ||||||||
Balance, end of period | 38,248 | 6,991 | 38,248 | 6,991 | 11,291 | (1,558) | ||||||
Changes in unrealized gains (losses) included in earnings related to balances still held at end of period | $ 847 | $ 139 | $ 5,374 | $ 2,280 | ||||||||
|
Variable Interest Entities (Tables)
|
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Sep. 30, 2012
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Variable Interest Entity, Not Primary Beneficiary, Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | The following tables provide a summary of the assets and liabilities included in the Company's unaudited Consolidated Financial Statements, as well as the components of its maximum exposure to losses, associated with its interests related to unconsolidated VIEs for which the Company holds an interest, but is not the primary beneficiary, to the VIE at September 30, 2012, and December 31, 2011:
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Loans (Financing Receivables by Credit Score) (Details) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
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Dec. 31, 2011
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Sep. 30, 2011
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Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | $ 52,964,390 | [1] | $ 51,659,851 | [1] | $ 65,767,715 | ||||||
Consumer [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 20,906,964 | [2] | 21,770,658 | [2] | 36,521,690 | ||||||
Consumer [Member] | Remaining consumer [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 804,501 | [1] | 847,716 | [1] | |||||||
Percentage of total remaining consumer loans | 100.00% | [1] | 100.00% | ||||||||
Consumer [Member] | Remaining consumer [Member] | FICO score less than 620 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 135,672 | 140,686 | |||||||||
Percentage of total remaining consumer loans | 16.90% | 16.60% | |||||||||
Consumer [Member] | Remaining consumer [Member] | FICO score of 620 to 639 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 30,629 | 28,332 | |||||||||
Percentage of total remaining consumer loans | 3.80% | 3.30% | |||||||||
Consumer [Member] | Remaining consumer [Member] | FICO score of 640 to 659 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 36,059 | 35,883 | |||||||||
Percentage of total remaining consumer loans | 4.50% | 4.20% | |||||||||
Consumer [Member] | Remaining consumer [Member] | FICO score of 660 to 679 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 45,121 | 43,116 | |||||||||
Percentage of total remaining consumer loans | 5.60% | 5.10% | |||||||||
Consumer [Member] | Remaining consumer [Member] | FICO score of 680 to 699 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 43,228 | 41,162 | |||||||||
Percentage of total remaining consumer loans | 5.40% | 4.90% | |||||||||
Consumer [Member] | Remaining consumer [Member] | FICO score of 700 to 719 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 47,856 | 44,027 | |||||||||
Percentage of total remaining consumer loans | 5.90% | 5.20% | |||||||||
Consumer [Member] | Remaining consumer [Member] | FICO score of 720 to 739 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 41,967 | 41,299 | |||||||||
Percentage of total remaining consumer loans | 5.20% | 4.90% | |||||||||
Consumer [Member] | Remaining consumer [Member] | FICO score of 740 to 759 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 36,674 | 37,264 | |||||||||
Percentage of total remaining consumer loans | 4.60% | 4.40% | |||||||||
Consumer [Member] | Remaining consumer [Member] | FICO score of 760 to 779 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 31,347 | 28,486 | |||||||||
Percentage of total remaining consumer loans | 3.90% | 3.40% | |||||||||
Consumer [Member] | Remaining consumer [Member] | FICO score of 780 to 799 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 29,258 | 26,229 | |||||||||
Percentage of total remaining consumer loans | 3.60% | 3.10% | |||||||||
Consumer [Member] | Remaining consumer [Member] | FICO score equal to or greater than 800 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 91,203 | 97,039 | |||||||||
Percentage of total remaining consumer loans | 11.30% | 11.40% | |||||||||
Consumer [Member] | Remaining consumer [Member] | FICO score not refreshed [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 235,487 | 284,193 | [3] | ||||||||
Percentage of total remaining consumer loans | 29.30% | 33.50% | [3] | ||||||||
Consumer [Member] | Indirect auto [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 338,396 | [1] | 761,590 | [1] | |||||||
Percentage of total indirect auto loans | 100.00% | [1] | 100.00% | ||||||||
Consumer [Member] | Indirect auto [Member] | FICO score less than 620 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 154,767 | 277,364 | |||||||||
Percentage of total indirect auto loans | 45.80% | 36.50% | |||||||||
Consumer [Member] | Indirect auto [Member] | FICO score of 620 to 639 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 16,356 | 39,038 | |||||||||
Percentage of total indirect auto loans | 4.80% | 5.10% | |||||||||
Consumer [Member] | Indirect auto [Member] | FICO score of 640 to 659 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 17,302 | 44,907 | |||||||||
Percentage of total indirect auto loans | 5.10% | 5.90% | |||||||||
Consumer [Member] | Indirect auto [Member] | FICO score of 660 to 679 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 18,216 | 50,038 | |||||||||
Percentage of total indirect auto loans | 5.40% | 6.60% | |||||||||
Consumer [Member] | Indirect auto [Member] | FICO score of 680 to 699 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 17,999 | 53,306 | |||||||||
Percentage of total indirect auto loans | 5.30% | 7.00% | |||||||||
Consumer [Member] | Indirect auto [Member] | FICO score of 700 to 719 [Member]
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Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 16,817 | 52,563 | |||||||||
Percentage of total indirect auto loans | 5.00% | 6.90% | |||||||||
Consumer [Member] | Indirect auto [Member] | FICO score of 720 to 739 [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 14,623 | 47,204 | |||||||||
Percentage of total indirect auto loans | 4.30% | 6.20% | |||||||||
Consumer [Member] | Indirect auto [Member] | FICO score of 740 to 759 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 13,682 | 42,170 | |||||||||
Percentage of total indirect auto loans | 4.00% | 5.50% | |||||||||
Consumer [Member] | Indirect auto [Member] | FICO score of 760 to 779 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 11,778 | 39,565 | |||||||||
Percentage of total indirect auto loans | 3.50% | 5.20% | |||||||||
Consumer [Member] | Indirect auto [Member] | FICO score of 780 to 799 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 10,817 | 35,756 | |||||||||
Percentage of total indirect auto loans | 3.20% | 4.70% | |||||||||
Consumer [Member] | Indirect auto [Member] | FICO score equal to or greater than 800 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 40,557 | 62,776 | |||||||||
Percentage of total indirect auto loans | 12.00% | 8.20% | |||||||||
Consumer [Member] | Indirect auto [Member] | FICO score not refreshed [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 5,482 | 16,903 | [3] | ||||||||
Percentage of total indirect auto loans | 1.60% | 2.20% | [3] | ||||||||
Consumer [Member] | Credit cards [Member]
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|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 195,551 | [1] | 187,995 | [1] | |||||||
Percentage of total credit card loans | 100.00% | [1] | 100.00% | ||||||||
Consumer [Member] | Credit cards [Member] | FICO score less than 620 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 12,646 | 14,402 | |||||||||
Percentage of total credit card loans | 6.47% | 7.66% | |||||||||
Consumer [Member] | Credit cards [Member] | FICO score of 620 to 639 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 6,240 | 6,164 | |||||||||
Percentage of total credit card loans | 3.19% | 3.28% | |||||||||
Consumer [Member] | Credit cards [Member] | FICO score of 640 to 659 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 9,415 | 9,579 | |||||||||
Percentage of total credit card loans | 4.81% | 5.10% | |||||||||
Consumer [Member] | Credit cards [Member] | FICO score of 660 to 679 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 15,422 | 13,736 | |||||||||
Percentage of total credit card loans | 7.89% | 7.31% | |||||||||
Consumer [Member] | Credit cards [Member] | FICO score of 680 to 699 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 23,158 | 20,761 | |||||||||
Percentage of total credit card loans | 11.84% | 11.04% | |||||||||
Consumer [Member] | Credit cards [Member] | FICO score of 700 to 719 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 29,591 | 27,080 | |||||||||
Percentage of total credit card loans | 15.14% | 14.39% | |||||||||
Consumer [Member] | Credit cards [Member] | FICO score of 720 to 739 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 27,615 | 26,162 | |||||||||
Percentage of total credit card loans | 14.12% | 13.92% | |||||||||
Consumer [Member] | Credit cards [Member] | FICO score of 740 to 759 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 23,275 | 22,806 | |||||||||
Percentage of total credit card loans | 11.90% | 12.13% | |||||||||
Consumer [Member] | Credit cards [Member] | FICO score of 760 to 779 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 18,159 | 17,288 | |||||||||
Percentage of total credit card loans | 9.29% | 9.20% | |||||||||
Consumer [Member] | Credit cards [Member] | FICO score of 780 to 799 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 14,636 | 14,186 | |||||||||
Percentage of total credit card loans | 7.48% | 7.55% | |||||||||
Consumer [Member] | Credit cards [Member] | FICO score equal to or greater than 800 [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | 14,766 | 15,449 | |||||||||
Percentage of total credit card loans | 7.55% | 8.22% | |||||||||
Consumer [Member] | Credit cards [Member] | FICO score not refreshed [Member]
|
|||||||||||
Loans Receivable [Line Items] | |||||||||||
Financing receivable, including receivable held-for-sale | $ 628 | $ 382 | [3] | ||||||||
Percentage of total credit card loans | 0.32% | 0.20% | [3] | ||||||||
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(Loans by Type) (Details) (USD $)
|
Sep. 30, 2012
|
Dec. 31, 2011
|
||||
---|---|---|---|---|---|---|
Loans Receivable [Line Items] | ||||||
Loans held for investment | $ 52,192,302,000 | [1] | $ 51,307,380,000 | [1] | ||
Loans held for investment with fixed rate of interest | 24,644,028,000 | 26,280,371,000 | ||||
Loans held for investment with variable rate of interest | 27,548,274,000 | 25,027,009,000 | ||||
Loans held for investment with fixed rate of interest, percent of total loans | 47.20% | 51.20% | ||||
Loans held for investment with variable rate of interest, percent of total loans | 52.80% | 48.80% | ||||
Loans held for investment, percent of total loans | 100.00% | 100.00% | ||||
Loans held for investment, deferred income | 86,500,000 | 106,000,000 | ||||
Commercial [Member]
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||||||
Loans Receivable [Line Items] | ||||||
Loans held for investment | 32,057,426,000 | 29,889,193,000 | ||||
Loans held for investment, percent of total loans | 61.40% | 58.20% | ||||
Commercial [Member] | Commercial real estate loans [Member]
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||||||
Loans Receivable [Line Items] | ||||||
Loans held for investment | 10,182,326,000 | 10,553,174,000 | ||||
Loans held for investment, percent of total loans | 19.50% | 20.60% | ||||
Commercial [Member] | Commercial and industrial loans [Member]
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||||||
Loans Receivable [Line Items] | ||||||
Loans held for investment | 13,003,139,000 | 11,084,292,000 | ||||
Loans held for investment, percent of total loans | 24.90% | 21.60% | ||||
Commercial [Member] | Multi-family loans [Member]
|
||||||
Loans Receivable [Line Items] | ||||||
Loans held for investment | 7,346,562,000 | 7,100,620,000 | ||||
Loans held for investment, percent of total loans | 14.10% | 13.80% | ||||
Commercial [Member] | Remaining commercial [Member]
|
||||||
Loans Receivable [Line Items] | ||||||
Loans held for investment | 1,525,399,000 | 1,151,107,000 | ||||
Loans held for investment, percent of total loans | 2.90% | 2.20% | ||||
Consumer [Member]
|
||||||
Loans Receivable [Line Items] | ||||||
Loans held for investment | 20,134,876,000 | 21,418,187,000 | ||||
Loans held for investment, percent of total loans | 38.60% | 41.80% | ||||
Consumer loans secured by real estate [Member]
|
||||||
Loans Receivable [Line Items] | ||||||
Loans held for investment | 17,569,859,000 | 18,154,489,000 | ||||
Loans held for investment, percent of total loans | 33.70% | 35.40% | ||||
Consumer loans secured by real estate [Member] | Residential mortgages [Member]
|
||||||
Loans Receivable [Line Items] | ||||||
Loans held for investment | 10,831,236,000 | 11,285,550,000 | ||||
Loans held for investment, percent of total loans | 20.80% | 22.00% | ||||
Consumer loans secured by real estate [Member] | Home equity loans and lines of credit [Member]
|
||||||
Loans Receivable [Line Items] | ||||||
Loans held for investment | 6,738,623,000 | 6,868,939,000 | ||||
Loans held for investment, percent of total loans | 12.90% | 13.40% | ||||
Consumer loans not secured by real estate [Member] | Auto loans [Member]
|
||||||
Loans Receivable [Line Items] | ||||||
Loans held for investment | 386,492,000 | 958,345,000 | ||||
Loans held for investment, percent of total loans | 0.70% | 1.90% | ||||
Consumer loans not secured by real estate [Member] | Other consumer loans [Member]
|
||||||
Loans Receivable [Line Items] | ||||||
Loans held for investment | $ 2,178,525,000 | $ 2,305,353,000 | ||||
Loans held for investment, percent of total loans | 4.20% | 4.50% | ||||
|
Fair Value (Fair Value of Financial Intruments) (Details) (USD $)
|
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash | $ 393,866,000 | $ 36,660,000 |
Federal Home Loan Banks stock, par value | $ 100 | |
Financial Instruments, Financial Assets [Abstract] | ||
Mortgage servicing rights | 78,095,000 | |
Carrying value [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Cash and amounts due from depository institutions | 3,351,074,000 | 2,623,963,000 |
Available-for-sale investment securities | 17,249,522,000 | 15,578,576,000 |
Other investments | 1,028,537,000 | 555,370,000 |
Loans held for investment, net | 51,212,181,000 | 50,223,888,000 |
Loans held for sale | 772,088,000 | 352,471,000 |
Restricted cash, fair value disclosure | 393,866,000 | 36,660,000 |
Mortgage servicing rights | 78,095,000 | 91,686,000 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Deposits | 50,222,004,000 | 47,797,515,000 |
Borrowings and other debt obligations | 19,189,050,000 | 18,278,433,000 |
Carrying value [Member] | Total return swap [Member]
|
||
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 669,000 | 5,460,000 |
Carrying value [Member] | Mortgage banking [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 39,054,000 | 7,323,000 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 27,976,000 | 8,574,000 |
Carrying value [Member] | Customer related [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 399,892,000 | 361,349,000 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 397,998,000 | 383,532,000 |
Carrying value [Member] | Foreign exchange [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 12,289,000 | 11,950,000 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 11,732,000 | 11,930,000 |
Carrying value [Member] | Mortgage Servicing Rights Derivative Contract [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 652,000 | 0 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 182,000 | 0 |
Carrying value [Member] | Other [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 11,670,000 | 12,098,000 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 11,461,000 | 12,385,000 |
Carrying value [Member] | Fair value [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 12,289,000 | 3,888,000 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 10,946,000 | 3,346,000 |
Carrying value [Member] | Cash flow [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 636,000 | 0 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 139,915,000 | 158,174,000 |
Fair value [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Cash and amounts due from depository institutions | 3,351,074,000 | 2,623,963,000 |
Available-for-sale investment securities | 17,249,522,000 | 15,578,576,000 |
Other investments | 1,028,537,000 | 555,370,000 |
Loans held for investment, net | 51,118,709,000 | 49,286,606,000 |
Loans held for sale | 772,088,000 | 352,471,000 |
Restricted cash, fair value disclosure | 393,866,000 | 36,660,000 |
Mortgage servicing rights | 78,095,000 | 99,556,000 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Deposits | 50,345,677,000 | 47,330,243,000 |
Borrowings and other debt obligations | 20,629,904,000 | 19,372,350,000 |
Fair value [Member] | Total return swap [Member]
|
||
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 669,000 | 5,460,000 |
Fair value [Member] | Mortgage banking [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 39,054,000 | 7,323,000 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 27,976,000 | 8,574,000 |
Fair value [Member] | Customer related [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 399,892,000 | 361,349,000 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 397,998,000 | 383,532,000 |
Fair value [Member] | Foreign exchange [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 12,289,000 | 11,950,000 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 11,732,000 | 11,930,000 |
Fair value [Member] | Mortgage Servicing Rights Derivative Contract [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 652,000 | 0 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 182,000 | 0 |
Fair value [Member] | Other [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 11,670,000 | 12,098,000 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 11,461,000 | 12,385,000 |
Fair value [Member] | Fair value [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 12,289,000 | 3,888,000 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | 10,946,000 | 3,346,000 |
Fair value [Member] | Cash flow [Member]
|
||
Financial Instruments, Financial Assets [Abstract] | ||
Derivative assets | 636,000 | 0 |
Financial Instruments, Financial Liabilities [Abstract] | ||
Derivative liabilities | $ 139,915,000 | $ 158,174,000 |
Investment Securities (Contractual Maturity) (Details) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Available-for-sale Securities, Contractual Maturities, Amortized Cost [Abstract] | ||
Due within one year | $ 958,524 | |
Due after 1 within 5 years | 1,950,417 | |
Due after 5 within 10 years | 717,340 | |
Due after 10 years/ no maturity | 13,323,840 | |
Amortized cost | 16,950,121 | 15,426,476 |
Available-for-sale Securities, Contractual Maturities, Fair Value [Abstract] | ||
Due within one year | 963,038 | |
Due after 1 within 5 years | 2,007,330 | |
Due after 5 within 10 years | 713,794 | |
Due after 10 years/ no maturity | 13,565,360 | |
Fair value | $ 17,249,522 | $ 15,578,576 |
Loans (Troubled Debt Restructuring Activity) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
Contracts
|
Sep. 30, 2012
Contracts
|
Dec. 31, 2011
|
|||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Increase in non-accrual loans due to Chapter 7 bankruptcy | $ 111,600 | ||||||||||||
Increase in troubled debt restructuring loans due to Chapter 7 bankruptcy | 119,163 | ||||||||||||
Troubled debt restructurings | 1,014,267 | 1,014,267 | 744,901 | ||||||||||
Trouble debt restructurings, number of contracts | 4,216 | 4,619 | |||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 214,912 | [1] | 410,575 | [1] | |||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 188,571 | [2] | 380,332 | [2] | |||||||||
ALLL Charge-off due to Chapter 7 bankruptcy guidance | 30,300 | ||||||||||||
Middle market commercial real estate [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 13 | ||||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 66,833 | [1] | |||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 65,560 | [2] | |||||||||||
Continuing care retirement communities [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 2 | ||||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 33,664 | [1] | |||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 21,423 | [2] | |||||||||||
Santander real estate capital [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 2 | ||||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 11,079 | [1] | |||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 10,954 | [2] | |||||||||||
Remaining commercial [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 7 | ||||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 43,845 | [1] | |||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 50,971 | [2] | |||||||||||
Remaining consumer [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 480 | 480 | |||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 731 | 731 | [1] | ||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 52 | 52 | [2] | ||||||||||
Indirect purchased [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 306 | 306 | |||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 6,916 | 6,916 | [1] | ||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 3,013 | 3,013 | [2] | ||||||||||
Home mortgages [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 1,064 | ||||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 172,871 | [1] | |||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 169,711 | [2],[3] | |||||||||||
Self-originated home equity [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 1,157 | ||||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 66,732 | [1] | |||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 55,692 | [2] | |||||||||||
Indirect auto [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 1,588 | 1,588 | |||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 7,904 | 7,904 | [1] | ||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 2,956 | 2,956 | [2] | ||||||||||
Performing [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Troubled debt restructurings | 609,087 | 609,087 | 527,646 | ||||||||||
Nonperforming [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Troubled debt restructurings | 405,180 | 405,180 | 217,255 | ||||||||||
Commercial [Member] | Middle market commercial real estate [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 10 | ||||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 30,137 | [1] | |||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 29,457 | [2] | |||||||||||
Commercial [Member] | Continuing care retirement communities [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 0 | ||||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 0 | [1] | |||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 0 | [2] | |||||||||||
Commercial [Member] | Santander real estate capital [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 1 | ||||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 5,640 | [1] | |||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 5,515 | [2] | |||||||||||
Commercial [Member] | Remaining commercial [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 0 | ||||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 0 | [1] | |||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 0 | [2] | |||||||||||
Consumer [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, subsequent default, number of contracts | 6 | 8 | |||||||||||
Trouble debt restructurings, subsequent default, recorded investment | 841 | [4] | 1,028 | [4] | |||||||||
Consumer [Member] | Home mortgages [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 759 | ||||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 103,106 | [1] | |||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 100,272 | [2],[3] | |||||||||||
Trouble debt restructurings, subsequent default, number of contracts | 4 | 5 | |||||||||||
Trouble debt restructurings, subsequent default, recorded investment | 724 | [4] | 864 | [4] | |||||||||
Consumer [Member] | Self-originated home equity [Member]
|
|||||||||||||
Financing Receivable, Modifications [Line Items] | |||||||||||||
Trouble debt restructurings, number of contracts | 1,072 | ||||||||||||
Trouble debt restructurings, pre-modification outstanding recorded investment | 60,478 | [1] | |||||||||||
Trouble debt restructurings, post-modification outstanding recorded investment | 47,306 | [2] | |||||||||||
Trouble debt restructurings, subsequent default, number of contracts | 2 | 3 | |||||||||||
Trouble debt restructurings, subsequent default, recorded investment | $ 117 | [4] | $ 164 | [4] | |||||||||
|
Commitments and Contingencies (Narrative) (Details) (USD $)
|
3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 40 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Jan. 31, 2012
|
Sep. 30, 2012
Trust PIERS [Member]
|
Dec. 31, 2011
Trust PIERS [Member]
|
Sep. 30, 2012
Trust PIERS [Member]
|
Jun. 01, 2012
Trust PIERS [Member]
|
Sep. 12, 2012
Trust PIERS [Member]
|
Sep. 30, 2012
Fabrikant & Sons Bankruptcy Adversary Proceeding [Member]
|
Oct. 31, 2007
Fabrikant & Sons Bankruptcy Adversary Proceeding [Member]
|
|
Loss Contingencies [Line Items] | |||||||||||||
Loss contingency, maximum possible loss | $ 60,000,000 | $ 60,000,000 | |||||||||||
Trust PIERS price per security | $ 50 | $ 50 | $ 50 | ||||||||||
Litigation settlement, reset rate | 13.61% | ||||||||||||
Damages awarded, value | 305,600,000 | ||||||||||||
Legal fees | 3,200,000 | ||||||||||||
Accrued interest on unpaid legal fees | 100,000 | 100,000 | |||||||||||
Interest accrual rate on unpaid legal fees | 6.00% | 6.00% | |||||||||||
PIERS litigation accrual | (258,480,000) | 0 | (258,480,000) | 0 | 344,200,000 | (258,480,000) | |||||||
Estimated litigation liability | 70,800,000 | ||||||||||||
Litigation settlement, rate | 7.41% | ||||||||||||
Litigation settlement, expense | 273,400,000 | ||||||||||||
Contracts receivable, claims and uncertain amounts | 22,000,000 | ||||||||||||
Liability for claims and claims adjustment expense | 9,800,000 | ||||||||||||
Liability for unpaid claims and claims adjustment expense, gross | 33,000,000 | ||||||||||||
Number of residential mortgages serviced | 148,000 | 148,000 | |||||||||||
residential mortgages serviced, in process of foreclosure | 3,300 | 3,300 | |||||||||||
Number of loans serviced by others, in the process of foreclosure | 250 | 250 | |||||||||||
Average number of residential mortgage and home equity foreclosures initiated monthly for loans serviced by the Bank and third parties | 200 | 225 | |||||||||||
Consent order, number of mortgage servicers | 14 | 14 | |||||||||||
Consent order, costs | 33,000,000 | 24,700,000 | 33,000,000 | ||||||||||
Consent order, total costs | 37,100,000 | ||||||||||||
Consent order, estimated annual operational and legal fees | 7,000,000 | 7,000,000 | |||||||||||
Compensatory fees, prior year end | $ 674,000 | $ 196,000 |
Derivatives (Income Statement Effect) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Other income [Member] | Cross currency swaps [Member] | Fair value [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings | $ (100) | $ 0 | $ 2 | $ 0 |
Net interest income [Member] | Pay fixed - receive floating Interest rate swaps [Member] | Cash flow [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings | (19,600) | (44,300) | (62,200) | (143,900) |
Net interest income [Member] | Other [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings | 300 | 3,600 | (97) | 10,500 |
Mortgage banking income [Member] | Forward commitments to sell loans [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings | (16,500) | (7,900) | (19,400) | (11,400) |
Mortgage banking income [Member] | Mortgage banking interest rate lock commitments [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings | 26,100 | 8,400 | 31,700 | 9,200 |
Miscellaneous other income [Member] | Customer related derivatives [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings | 3,200 | 4,500 | 24,100 | 11,600 |
Miscellaneous other income [Member] | Other [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings | 400 | 1,100 | ||
Other noninterest income [Member] | Total return swap [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings | 900 | 100 | 4,800 | 1,200 |
Commercial banking income [Member] | Foreign exchange [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings | $ 500 | $ (5,800) | $ 500 | $ 4,000 |
Loans (Past Due) (Details) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
30-59 days past due | $ 370,855 | $ 399,008 | |||||||||
68-89 days past due | 157,895 | 246,755 | |||||||||
Greater than 90 days | 839,354 | 1,051,411 | |||||||||
Total past due | 1,368,104 | 1,697,174 | |||||||||
Current | 51,596,286 | 49,962,677 | |||||||||
Total financing receivables | 52,964,390 | [1] | 51,659,851 | [1] | 65,767,715 | ||||||
Recorded investment greater than 90 days and accruing | 2,993 | 4,908 | |||||||||
Non-accrual loans | 1,187,685 | 1,359,466 | |||||||||
Commercial [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
Total financing receivables | 32,057,426 | 29,246,025 | |||||||||
Non-accrual loans | 485,741 | 800,047 | |||||||||
Commercial [Member] | Corporate banking [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
30-59 days past due | 39,845 | 38,347 | |||||||||
68-89 days past due | 15,661 | 36,498 | |||||||||
Greater than 90 days | 114,210 | 180,017 | |||||||||
Total past due | 169,716 | 254,862 | |||||||||
Current | 17,434,701 | 14,989,498 | |||||||||
Total financing receivables | 17,604,417 | [1] | 15,244,360 | [1] | |||||||
Recorded investment greater than 90 days and accruing | 0 | 1,211 | |||||||||
Non-accrual loans | 216,459 | 304,309 | |||||||||
Commercial [Member] | Middle market commercial real estate [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
30-59 days past due | 14,415 | 14,862 | |||||||||
68-89 days past due | 962 | 16,508 | |||||||||
Greater than 90 days | 42,297 | 79,160 | |||||||||
Total past due | 57,674 | 110,530 | |||||||||
Current | 3,649,900 | 3,743,790 | |||||||||
Total financing receivables | 3,707,574 | [1] | 3,854,320 | [1] | |||||||
Recorded investment greater than 90 days and accruing | 0 | 0 | |||||||||
Non-accrual loans | 90,842 | 167,446 | |||||||||
Commercial [Member] | Continuing care retirement communities [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
30-59 days past due | 0 | 4,632 | |||||||||
68-89 days past due | 0 | 2,812 | |||||||||
Greater than 90 days | 53,287 | 6,491 | |||||||||
Total past due | 53,287 | 13,935 | |||||||||
Current | 237,577 | 216,010 | |||||||||
Total financing receivables | 290,864 | [1] | 229,945 | [1] | |||||||
Recorded investment greater than 90 days and accruing | 0 | 0 | |||||||||
Non-accrual loans | 99,129 | 198,131 | |||||||||
Commercial [Member] | Santander real estate capital [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
30-59 days past due | 21,125 | 8,383 | |||||||||
68-89 days past due | 5,541 | 24,214 | |||||||||
Greater than 90 days | 38,202 | 89,885 | |||||||||
Total past due | 64,868 | 122,482 | |||||||||
Current | 9,413,750 | 9,175,480 | |||||||||
Total financing receivables | 9,478,618 | [1] | 9,297,962 | [1] | |||||||
Recorded investment greater than 90 days and accruing | 0 | 0 | |||||||||
Non-accrual loans | 77,404 | 127,537 | |||||||||
Commercial [Member] | Remaining commercial [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
30-59 days past due | 2,084 | 2,568 | |||||||||
68-89 days past due | 125 | 13,765 | |||||||||
Greater than 90 days | 1,387 | 132,741 | |||||||||
Total past due | 3,596 | 149,074 | |||||||||
Current | 972,357 | 1,113,532 | |||||||||
Total financing receivables | 975,953 | [1] | 1,262,606 | [1] | |||||||
Recorded investment greater than 90 days and accruing | 0 | 0 | |||||||||
Non-accrual loans | 1,907 | 2,624 | |||||||||
Consumer [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
Total financing receivables | 20,906,964 | [2] | 21,770,658 | [2] | 36,521,690 | ||||||
Non-accrual loans | 701,944 | 559,419 | |||||||||
Consumer [Member] | Home mortgages [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
30-59 days past due | 198,782 | 224,957 | |||||||||
68-89 days past due | 91,817 | 110,007 | |||||||||
Greater than 90 days | 451,692 | 438,461 | |||||||||
Total past due | 742,291 | 773,425 | |||||||||
Current | 10,860,874 | 10,863,152 | |||||||||
Total financing receivables | 11,603,165 | [1],[3] | 11,636,577 | [1],[3] | |||||||
Recorded investment greater than 90 days and accruing | 0 | 0 | |||||||||
Non-accrual loans | 519,931 | 438,461 | |||||||||
Consumer [Member] | Self-originated home equity [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
30-59 days past due | 40,380 | 22,026 | |||||||||
68-89 days past due | 20,646 | 13,272 | |||||||||
Greater than 90 days | 74,988 | 64,482 | |||||||||
Total past due | 136,014 | 99,780 | |||||||||
Current | 6,279,130 | 6,404,702 | |||||||||
Total financing receivables | 6,415,144 | [1],[3] | 6,504,482 | [1],[3] | |||||||
Recorded investment greater than 90 days and accruing | 0 | 0 | |||||||||
Non-accrual loans | 109,934 | 64,481 | |||||||||
Consumer [Member] | Indirect auto [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
30-59 days past due | 25,950 | 43,386 | |||||||||
68-89 days past due | 6,642 | 10,624 | |||||||||
Greater than 90 days | 2,170 | 3,062 | |||||||||
Total past due | 34,762 | 57,072 | |||||||||
Current | 303,634 | 704,518 | |||||||||
Total financing receivables | 338,396 | [1] | 761,590 | [1] | |||||||
Recorded investment greater than 90 days and accruing | 0 | 0 | |||||||||
Non-accrual loans | 5,085 | 3,062 | |||||||||
Consumer [Member] | Indirect purchased [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
30-59 days past due | 10,108 | 11,101 | |||||||||
68-89 days past due | 3,576 | 4,683 | |||||||||
Greater than 90 days | 3,392 | 2,005 | |||||||||
Total past due | 17,076 | 17,789 | |||||||||
Current | 1,533,131 | 1,814,509 | |||||||||
Total financing receivables | 1,550,207 | [1] | 1,832,298 | [1] | |||||||
Recorded investment greater than 90 days and accruing | 0 | 0 | |||||||||
Non-accrual loans | 4,923 | 2,005 | |||||||||
Consumer [Member] | Credit cards [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
30-59 days past due | 1,549 | 1,867 | |||||||||
68-89 days past due | 1,229 | 1,491 | |||||||||
Greater than 90 days | 2,994 | 3,697 | |||||||||
Total past due | 5,772 | 7,055 | |||||||||
Current | 189,779 | 180,940 | |||||||||
Total financing receivables | 195,551 | [1] | 187,995 | [1] | |||||||
Recorded investment greater than 90 days and accruing | 2,993 | 3,697 | |||||||||
Consumer [Member] | Remaining consumer [Member]
|
|||||||||||
Financing Receivable, Recorded Investments, Past Due [Line Items] | |||||||||||
30-59 days past due | 16,617 | 26,879 | |||||||||
68-89 days past due | 11,696 | 12,881 | |||||||||
Greater than 90 days | 54,735 | 51,410 | |||||||||
Total past due | 83,048 | 91,170 | |||||||||
Current | 721,453 | 756,546 | |||||||||
Total financing receivables | 804,501 | [1] | 847,716 | [1] | |||||||
Recorded investment greater than 90 days and accruing | 0 | 0 | |||||||||
Non-accrual loans | $ 62,071 | $ 51,410 | |||||||||
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Investment Securities
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | INVESTMENT SECURITIES The following tables present the composition and fair value of investment securities available-for-sale at the dates indicated:
As of September 30, 2012 and December 31, 2011, the Company had investment securities available-for-sale with an estimated fair value of $6.4 billion and $3.6 billion, respectively, pledged as collateral which was made up of the following: $2.0 billion and $1.9 billion, respectively, were pledged to secure public fund deposits, $4.0 billion and $1.3 billion, respectively, were pledged at various brokers to secure repurchase agreements as well as support hedging relationships and $439.6 million and $431.4 million, respectively, were pledged to secure the Bank's customer overnight sweep product. In May 2012, the Company sold $918.7 million of Federal Home Loan Mortgage Corporation (“FHLMC”) and Federal National Mortgage Association (“FNMA”) mortgage-backed debt securities for a gain of $40.0 million. The Company used the specific identification method to determine the cost of the securities sold and the gain recognized. (3) INVESTMENT SECURITIES (continued) The state and municipal bond portfolio consists of general obligation bonds of states, cities, counties and school districts. The portfolio has a weighted average underlying credit risk rating of AA. The largest geographic concentrations of the state and local municipal bonds are in California, Texas and Florida which represented 18%, 16%, 16%, respectively, of the total portfolio. No other state comprised more than 10% of the total portfolio. Contractual maturities of the Company’s investment securities available-for-sale at September 30, 2012 are as follows:
Actual maturities may differ from contractual maturities when there is a right to call or prepay obligations with or without call or prepayment penalties. The following tables disclose the aggregate amount of unrealized losses as of September 30, 2012 and December 31, 2011 on securities in the Company’s investment portfolio classified according to the amount of time that those securities have been in a continuous loss position:
(3) INVESTMENT SECURITIES (continued)
The Company continuously evaluates its investment strategies in light of changes in the regulatory environment that could have an impact on capital and liquidity. Based on this evaluation, it is reasonably possible the Company may elect to pursue other strategies relative to its remaining investment securities portfolio. Management evaluates all securities for other-than-temporary impairment on at least a quarterly basis. During the securities level assessments, consideration is given to (1) the intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value, (2) the financial condition and near-term prospects of the issuer, and (3) the ability to collect the future expected cash flows. Key assumptions utilized to forecast expected cash flows include loss severity, expected cumulative loss percentage, cumulative loss percentage to date, weighted average FICO and weighted average LTV, or rating/scoring, as applicable. Management has concluded that the unrealized losses on its investment securities (which totaled 54 individual securities at September 30, 2012) are temporary in nature since (1) they are not related to the underlying credit quality of the issuers, (2) the principal and interest on these securities are from investment grade issuers, (3) the Company does not intend to sell these investments and (4) it is more likely than not that the Company will not be required to sell the investments before recovery of the amortized cost basis, which may be maturity. There were no investments with unrealized losses that were deemed to be other than temporary in nature. In November 2011, the Company sold the majority of its non-agency mortgage backed securities portfolio. Prior to the sale, the Company held investments in these non-agency mortgage backed securities for which the Company did not expect to collect the entire scheduled principal. (3) INVESTMENT SECURITIES (continued) The following table displays changes in credit losses for those non-agency mortgage backed securities recognized in earnings for the nine-month period ended September 30, 2011.
For the nine-month period ended September 30, 2012, the Company had no credit losses on investment securities. Proceeds from sales of investment securities and the realized gross gains and losses from those sales are as follows:
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Borrowings and Other Debt Obligations (Details) (USD $)
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0 Months Ended | 1 Months Ended | ||
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Jun. 01, 2012
Santander [Member]
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Jun. 01, 2012
Term loan [Member]
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Jun. 30, 2012
2.5% senior unsecured notes [Member]
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Sep. 24, 2012
2.5% senior unsecured notes [Member]
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Debt Instrument [Line Items] | ||||
Face amount | $ 160,000,000 | $ 600,000,000 | ||
Stated rate | 2.50% | 3.00% | ||
Term | 7 years | |||
Repayments of related party debt | 154,900,000 | |||
Debt issuance cost | 5,700,000 | |||
Effective rate | 4.38% | |||
Repayments of long-term debt | $ 250,000,000 |