Subsequent Events

3 Months Ended

Mar. 31, 2019

Subsequent to March 31, 2019, we became aware that one of our commercial borrowers was unexpectedly ceasing their reverse mortgage origination business. The following table presents our credit exposure to this borrower.



	March 31, 2019		May 10, 2019
	(Dollars in millions)
Amount outstanding
Collateralized C&I loan	$	69	$	69
Outstanding warehouse line, collateralized by agency mortgage loans	6		13
Total	$	75	$	82

The commercial loan is collateralized by certain interest-only GNMA securities, held by a third party custodian. A recent independent valuation conducted by us indicates that this collateral has a fair value between $35 and $40 million. While it is too early to determine the extent of the loss we may have on this loan, we plan to pursue all available sources of collection including other assets of the company, a personal guarantee and other legal remedies to minimize our credit exposure related to this loan. We will determine and record the appropriate carrying value during the second quarter of 2019.

We expect to be fully repaid on the outstanding warehouse line and no further draws on this line can be made.