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SERVICING RIGHTS | 12 Months Ended
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Dec. 31, 2015
Transfers and Servicing [Abstract] |
SERVICING RIGHTS | SERVICING RIGHTS The Company retains mortgage servicing rights (MSRs) from certain of its sales of residential mortgage loans. MSRs on residential mortgage loans are reported at fair value. Income earned by the Company on its MSRs is derived primarily from contractually specified mortgage servicing fees and late fees, net of curtailment costs and third party subservicing costs. The Company retains servicing rights in connection with its SBA loan operations, which are measured using the amortization method. Income from servicing rights was $3.0 million, $4.2 million and $2.0 million for the years ended December 31, 2015, 2014, and 2013, respectively. The Company recognized (losses) gains on the fair values of servicing rights of $(8.8) million, $(1.6) million and $298 thousand for the years ended December 31, 2015, 2014, and 2013, respectively. These decreases were partially offset by increases in servicing fees. The Company recognized servicing fees of $11.7 million, $5.8 million, and $1.8 million for the years ended December 31, 2015, 2014, and 2013, respectively. The decrease in fair value of servicing rights was due to generally lower interest rates and the increase in servicing fees was due to the increase in unpaid principal balance of loans sold with servicing retained. These amounts are reported in Loan Servicing Income on the Consolidated Statements of Operations. The following table presents a composition of servicing rights as of the dates indicated:
| December 31,
| 2015 |  | 2014
| (In thousands)
Mortgage servicing rights, at fair value | $ | 49,939 |  |  | $ | 19,082 |
SBA servicing rights, at cost | 788 |  |  | 484 |
Total | $ | 50,727 |  |  | $ | 19,566 |
Mortgage loans sold with servicing retained are not reported as assets and are subserviced by a third party vendor. The unpaid principal balance of these loans at December 31, 2015 and 2014 was $4.77 billion and $1.92 billion, respectively. Custodial escrow balances maintained in connection with serviced loans were $21.1 million and $8.3 million at December 31, 2015 and 2014, respectively. Mortgage Servicing Rights The following table presents the key characteristics, inputs and economic assumptions used to estimate the Level 3 fair value of the MSRs as of the dates indicated:
| December 31,
| 2015 |  | 2014
| ($ in thousands)
Fair value of retained MSRs | $ | 49,939 |  |  | $ | 13,135 |
Discount rate | 9.75 | % |  | 10.09 | %
Constant prepayment rate | 11.81 | % |  | 13.22 | %
Weighted-average life (in years) | 6.48 |  |  | 5.80 |
At December 31, 2014, $5.9 million of the mortgage servicing rights was valued based on a market bid that settled subsequent to year end, which was included as Level 3 fair value of MSRs. The following table presents activity in the MSRs for the periods indicated:
| Year Ended December 31,
2015 |  | 2014 |  | 2013
| (In thousands)
Balance at beginning of year | $ | 19,082 |  |  | $ | 13,535 |  |  | $ | 1,739 |
Additions | 45,263 |  |  | 26,399 |  |  | 11,463 |
Changes in fair value resulting from valuation inputs or assumptions | (3,568 | ) |  | (233 | ) |  | 1,360 |
Sales of servicing rights | (5,862 | ) |  | (17,773 | ) |  | — |
Other—loans paid off | (4,976 | ) |  | (2,846 | ) |  | (1,027 | )
Balance at end of year | $ | 49,939 |  |  | $ | 19,082 |  |  | $ | 13,535 |
SBA Servicing Rights The Company used a discount rate of 7.50 percent to calculate the present value of cash flows and an estimated prepayment speed based on prepayment data available. Discount rates and prepayment speeds are reviewed quarterly and adjusted as appropriate. The following table presents activity in the SBA servicing rights for the periods indicated:
| Year Ended December 31,
2015 |  | 2014 |  | 2013
| (In thousands)
Balance at beginning of year | $ | 484 |  |  | $ | 348 |  |  | $ | 539 |
Additions | 597 |  |  | 261 |  |  | 32 |
Amortization, including prepayments | (71 | ) |  | (83 | ) |  | (223 | )
Impairment | (222 | ) |  | (42 | ) |  | — |
Balance at end of year | $ | 788 |  |  | $ | 484 |  |  | $ | 348 |

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- 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 Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 860 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51814546&loc=d3e107207-111719 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 860 -SubTopic 50 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=56950315&loc=d3e122596-111746 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 860 -SubTopic 50 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=56950315&loc=d3e122739-111746 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 860 -SubTopic 50 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=56950315&loc=d3e122625-111746 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 860 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7519067&loc=SL6226446-111709 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 860 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=51814546&loc=d3e107314-111719 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 860 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7519067&loc=SL6226443-111709 + Details
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