XML 74 R27.htm IDEA: XBRL DOCUMENT v2.4.0.6
Mortgage Banking Activities (Tables)
3 Months Ended
Mar. 31, 2012
Mortgage Banking Activities [Abstract]  
Components of Residential Mortgage Loans Held For Sale
The unpaid principal balance of residential mortgage loans held for sale, notional amounts of derivative contracts related to residential mortgage loan commitments and forward contract sales and their related fair values included in Mortgage loans held for sale in the Consolidated Balance Sheets were (in thousands):

   
March 31, 2012
  
December 31, 2011
  
March 31, 2011
 
   
Unpaid Principal Balance/
Notional
  
Fair
 Value
  
Unpaid Principal Balance/
Notional
  
Fair
Value
  
Unpaid
Principal
 Balance/
Notional
  
Fair
Value
 
                    
Residential mortgage loans held for sale
 $230,241  $237,741  $177,319  $184,816  $120,939  $124,182 
Residential mortgage loan commitments
  302,303   8,907   189,770   6,597   158,946   3,495 
Forward sales contracts
  520,165   391   349,447   (3,288)  262,977   (558)
       $247,039      $188,125      $127,119 

No residential mortgage loans held for sale were 90 days or more past due or considered impaired as of March 31, 2012, December 31, 2011 or March 31, 2011. No credit losses were recognized on residential mortgage loans held for sale for the three months ended March 31, 2012 and 2011.

Mortgage banking revenue was as follows (in thousands):

   
Three months ended
 
   
March 31, 2012
  
March 31, 2011
 
Originating and marketing revenue:
      
Residential mortgages loan held for sale
 $17,092  $13,336 
Residential mortgage loan commitments
  2,310   1,244 
Forward sales contracts
  3,679   (7,051)
Total originating and marketing revenue
  23,081   7,529 
Servicing revenue
  9,997   9,827 
Total mortgage banking revenue
 $33,078  $17,356 

Summary of Mortgage Servicing Rights
The following represents a summary of mortgage servicing rights (Dollars in thousands):

   
March 31,
2012
  
Dec. 31,
2011
  
March 31,
2011
 
Number of residential mortgage loans serviced for others
  95,944   95,841   96,256 
Outstanding principal balance of residential mortgage loans serviced for others
 $11,378,806  $11,300,986  $11,202,626 
Weighted average interest rate
  5.09%  5.19%  5.40%
Remaining term (in months)
  289   290   294 

Activity in Capitalized Mortgage Servicing Rights
Activity in capitalized mortgage servicing rights during the three months ended March 31, 2012 is as follows (in thousands):

   
Purchased
  
Originated
  
Total
 
Balance at December 31, 2011
 $18,903  $67,880  $86,783 
Additions, net
     8,372   8,372 
Change in fair value due to loan runoff
  (1,010)  (3,134)  (4,144)
Change in fair value due to market changes
  3,311   3,816   7,127 
Balance at March 31, 2012
 $21,204  $76,934  $98,138 

Activity in capitalized mortgage servicing rights during the three months ended March 31, 2011 is as follows (in thousands):

   
Purchased
  
Originated
  
Total
 
Balance at December 31, 2010
 $37,900  $77,823  $115,723 
Additions, net
     4,969   4,969 
Change in fair value due to loan runoff
  (1,333)  (2,143)  (3,476)
Change in fair value due to market changes
  1,776   1,353   3,129 
Balance at March 31, 2011
 $38,343  $82,002  $120,345 

Changes in the fair value of mortgage servicing rights are included in Other operating expense in the Consolidated Statements of Earnings. Changes in fair value due to loan runoff are included in Mortgage banking costs. Changes in fair value due to market changes are reported separately. Changes in fair value due to market changes during the period relate to assets held at the reporting date.

There is no active market for trading in mortgage servicing rights after origination. Fair value is determined by discounting the projected net cash flows. Significant assumptions, considered significant unobservable inputs, used to determine fair value are:

   
March 31, 2012
  
December 31, 2011
  
March 31, 2011
 
Discount rate – risk-free rate plus a market premium
  10.33%  10.34%  10.36%
Prepayment rate – based upon loan interest rate, original term and loan type
  10.01% - 45.98%  10.88% - 49.68%  6.69% - 39.69%
Loan servicing costs – annually per loan based upon loan type
 $55 - $105  $55 - $105  $55 - $105 
Escrow earnings rate – indexed to rates paid on deposit accounts with comparable average life
  1.28%  1.21%  2.43%

Stratification of Loan Servicing Portfolio
Stratification of the mortgage loan servicing portfolio, outstanding principal of loans serviced for others and weighted average prepayment rate by interest rate at March 31, 2012 follows (in thousands):

   
< 4.50%
   4.50% - 5.49%  5.50% - 6.49% 
> 6.49%
  
Total
                  
Fair value
 $27,456  $50,561  $16,586  $3,535  $98,138 
 
Outstanding principal of loans serviced for others
 $2,760,780  $4,977,754  $2,602,343  $1,037,929  $11,378,806 
 
Weighted average prepayment rate1
  10.01%  12.54%  29.20%  45.98%  18.79%
1
Annual prepayment estimates based upon loan interest rate, original term and loan type
 
Aging Status of Mortgage Loans Serviced For Others
The aging status of our mortgage loans serviced for others by investor at March 31, 2012 (in thousands):

      
Past Due
    
   
Current
  
30 to 59
Days
  
60 to 89 Days
  
90 Days or More
  
Total
 
FHLMC
 $5,147,454  $40,600  $13,421  $49,144  $5,250,619 
FNMA
  1,730,185   19,654   5,789   22,987   1,778,615 
GNMA
  3,687,899   109,478   24,522   25,117   3,847,016 
Other
  479,161   8,553   3,131   11,711   502,556 
Total
 $11,044,699  $178,285  $46,863  $108,959  $11,378,806 

Activity in Allowance for Losses On Loans Sold With Recourse
The activity in the allowance for losses on loans sold with recourse included in Other liabilities in the Consolidated Balance Sheets is summarized as follows (in thousands):

   
Three Months ended
March 31,
 
   
2012
  
2011
 
Beginning balance
 $18,683  $16,667 
Provision for recourse losses
  1,672   794 
Loans charged off, net
  (1,704)  (974)
Ending balance
 $18,651  $16,487