Transfers and Servicing of Financial Assets (Including Mortgage Banking Activity)

12 Months Ended

Dec. 31, 2014

Transfers and Servicing of Financial Assets (Including Mortgage Banking Activity)

NOTE 9 –TRANSFERS AND SERVICING OF FINANCIAL ASSETS (INCLUDING MORTGAGE BANKING ACTIVITY)

Commercial Banking Activity

The unpaid principal balances of loans serviced for others were $533.8 million and $345.0 million at December 31, 2014 and 2013, respectively. Custodial escrow balances maintained in connection with the foregoing portfolio of loans serviced for others, and included in demand deposits, were immaterial at December 31, 2014 and 2013.

Mortgage Banking Activity

IBERIABANK through its subsidiary, IMC, originates mortgage loans for sale into the secondary market. The loans originated primarily consist of residential first mortgages that conform to standards established by the GSEs, but can also consist of junior lien loans secured by residential property. These sales are primarily to private companies that are unaffiliated with the GSEs on a servicing released basis. Changes to the carrying amount of mortgage loans held for sale at December 31 are presented in the following table.


(Dollars in thousands)	2014			2013			2012
Balance at beginning of period	$	128,442		$	267,475		$	153,013
Originations and Purchases		1,675,538			2,116,460			2,432,367
Sales, net of gains		(1,657,409	)		(2,255,493	)		(2,317,905	)
Other		(6,499	)		—			—

Balance at end of period	$	140,072		$	128,442		$	267,475

The following table details the components of mortgage income for the years ended December 31:



(Dollars in thousands)	2014			2013			2012
Fair value changes of derivatives and mortgage loans held for sale:
Mortgage loans held for sale and derivatives	$	631		$	(4,822	)	$	6,772
Derivative settlements		(8,743	)		3,100			—
Gains on sales		59,156			65,393			70,811
Servicing and other income, net		753			526			470

	$	51,797		$	64,197		$	78,053

Mortgage Servicing Rights

Mortgage servicing rights are recorded at the lower of cost or market in “Other assets” on the consolidated balance sheets and are amortized over the remaining servicing life of the loans, with consideration given to prepayment assumptions. Mortgage servicing rights had the following carrying values as of December 31:


	2014							2013
	Gross		Accumulated			Net		Gross		Accumulated			Net
(Dollars in thousands)	Carrying Amount		Amortization			Carrying Amount		Carrying Amount		Amortization			Carrying Amount
Mortgage servicing rights	$	4,751	$	(1,253	)	$	3,498	$	2,146	$	(638	)	$	1,508

The related amortization expense of mortgage servicing rights is as follows:


(Dollars in thousands)	Amount
Aggregate amortization expense for the years ended December 31:
2012	$	225
2013		480
2014		759

Estimated amortization expense for the years ended December 31:
2015	$	1,550
2016		697
2017		531
2018		371
2019		230
2020 and thereafter		119

- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

+ References+ Details