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SERVICING RIGHTS | 6 Months Ended
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Jun. 30, 2016
Transfers and Servicing [Abstract] |
SERVICING RIGHTS | SERVICING RIGHTS The Company retains 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 (loss) from servicing rights was $(3.3) million and $2.0 million, respectively, for the three months ended June 30, 2016 and 2015, and $(8.6) million and $1.6 million, respectively, for the six months ended June 30, 2016 and 2015. The Company recognized losses on the fair value and runoff of servicing rights of $8.6 million and $666 thousand, respectively, for the three months ended June 30, 2016 and 2015, and $18.7 million and $3.1 million, respectively, for the six months ended June 30, 2016 and 2015. These decreases were partially offset by increases in servicing fees. The Company recognized servicing fees of $5.2 million and $2.7 million, respectively, for the three months ended June 30, 2016 and 2015, and $10.1 million and $4.7 million, respectively, for the six months ended June 30, 2016 and 2015. 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:
| June 30, 2016 |  | December 31, 2015
| (In thousands)
Mortgage servicing rights, at fair value | $ | 52,567 |  |  | $ | 49,939 |
SBA servicing rights, at cost | 1,083 |  |  | 788 |
Total | $ | 53,650 |  |  | $ | 50,727 |
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 June 30, 2016 and December 31, 2015 was $6.32 billion and $4.77 billion, respectively. Custodial escrow balances maintained in connection with serviced loans were $36.6 million and $21.1 million at June 30, 2016 and December 31, 2015, respectively. Mortgage Servicing Rights The following table presents the key characteristics, inputs and economic assumptions used to estimate the fair value of the MSRs as of the dates indicated:
| June 30, 2016 |  | December 31, 2015
| ($ in thousands)
Fair value of retained MSRs | $ | 52,567 |  |  | $ | 49,939 |
Discount rate | 10.29 | % |  | 9.75 | %
Constant prepayment rate | 17.01 | % |  | 11.81 | %
Weighted-average life | 5.19 years |  |  | 6.48 years |
The following table presents activity in the MSRs for the periods indicated:
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
| (In thousands)
Balance at beginning of period | $ | 48,370 |  |  | $ | 21,165 |  |  | $ | 49,939 |  |  | $ | 19,082 |
Additions | 12,766 |  |  | 13,699 |  |  | 21,348 |  |  | 23,891 |
Changes in fair value resulting from valuation inputs or assumptions | (5,831 | ) |  | 1,538 |  |  | (14,032 | ) |  | 1,010 |
Sales of servicing rights | — |  |  | — |  |  | (3 | ) |  | (5,862 | )
Other | (2,738 | ) |  | (2,204 | ) |  | (4,685 | ) |  | (3,923 | )
Balance at end of period | $ | 52,567 |  |  | $ | 34,198 |  |  | $ | 52,567 |  |  | $ | 34,198 |
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:
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
| (In thousands)
Balance at beginning of period | $ | 1,036 |  |  | $ | 664 |  |  | $ | 788 |  |  | $ | 484 |
Additions | 91 |  |  | 144 |  |  | 383 |  |  | 339 |
Amortization, including prepayments | (44 | ) |  | (64 | ) |  | (88 | ) |  | (79 | )
Balance at end of period | $ | 1,083 |  |  | $ | 744 |  |  | $ | 1,083 |  |  | $ | 744 |

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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=64830801&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=68078379&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=68078379&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=68078379&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=65883692&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=64830801&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=65883692&loc=SL6226443-111709 + Details
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