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NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS (Tables)
 12 Months Ended
Dec. 31, 2020
Transfers and Servicing [Abstract]  
Changes in Servicing Assets [Table Text Block]

 

The changes in MSRs are shown below for the indicated periods:

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

2020

 

2019

 

2018

 

(In thousands)

 

 

 

 

 

 

 

 

 

Balance at beginning of year

$

26,762

 

$

27,428

 

$

25,255

 

Purchases of servicing assets (1)

 

7,781

 

 

-

 

 

-

 

Capitalization of servicing assets

 

4,864

 

 

4,039

 

 

3,864

 

Amortization

 

(5,777)

 

 

(4,592)

 

 

(2,895)

 

Temporary impairment (charges) recoveries, net

 

(206)

 

 

(43)

 

 

1,289

 

Other (2)

 

(353)

 

 

(70)

 

 

(85)

 

Balance at end of year

$

33,071

 

$

26,762

 

$

27,428
Changes in Impairment Allowance [Table Text Block]

Changes in the impairment allowance were as follows for the indicated periods:

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

2020

 

2019

 

2018

(In thousands)

 

 

 

 

 

 

 

 

Balance at beginning of year

$

73

 

$

30

 

$

1,451

Temporary impairment charges

 

301

 

 

78

 

 

123

OTTI of servicing assets

 

(77)

 

 

-

 

 

(132)

Recoveries

 

(95)

 

 

(35)

 

 

(1,412)

Balance at end of year

$

202

 

$

73

 

$

30
Components of Net Servicing Income [Table Text Block]

The components of net servicing income, included as part of mortgage banking activities in the consolidated statements of income, are shown below for the indicated periods:

 

Year Ended December 31,

 

2020

 

2019

 

2018

(In thousands)

 

 

Servicing fees

$

9,268

 

$

8,522

 

$

8,704

Late charges and prepayment penalties

 

570

 

 

610

 

 

510

Adjustment for loans repurchased (1)

 

(353)

 

 

(70)

 

 

(85)

Other

 

-

 

 

(15)

 

 

(8)

Servicing income, gross

 

9,485

 

 

9,047

 

 

9,121

Amortization and impairment of servicing assets

 

(5,983)

 

 

(4,635)

 

 

(1,606)

Servicing income, net

$

3,502

 

$

4,412

 

$

7,515

 

 

 

 

 

 

 

 

 
Key Economic Assumptions Used in Determining Fair Value at Time of Sale of Loans [Table Text Block]

The Corporation’s MSRs are subject to prepayment and interest rate risks. Key economic assumptions used in determining the fair value at the time of sale of the related mortgages ranged as follows for the indicated periods:

 

 

 

 

 

 

 

 

 

 

 

 

 

Maximum

 

Minimum

 

 

 

 

Year Ended December 31, 2020

 

 

 

 

 

 

 

 

 

Constant prepayment rate:

 

 

 

 

 

 

 

 

 

Government-guaranteed mortgage loans

6.5

%

 

6.2

%

 

 

 

 

Conventional conforming mortgage loans

7.2

%

 

6.9

%

 

 

 

 

Conventional non-conforming mortgage loans

9.2

%

 

8.6

%

 

 

 

 

Discount rate:

 

 

 

 

 

 

 

 

 

Government-guaranteed mortgage loans

12.0

%

 

12.0

%

 

 

 

 

Conventional conforming mortgage loans

10.0

%

 

10.0

%

 

 

 

 

Conventional non-conforming mortgage loans

14.3

%

 

13.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2019

 

 

 

 

 

 

 

 

 

Constant prepayment rate:

 

 

 

 

 

 

 

 

 

Government-guaranteed mortgage loans

6.4

%

 

6.2

%

 

 

 

 

Conventional conforming mortgage loans

6.9

%

 

6.7

%

 

 

 

 

Conventional non-conforming mortgage loans

9.3

%

 

8.9

%

 

 

 

 

Discount rate:

 

 

 

 

 

 

 

 

 

Government-guaranteed mortgage loans

12.0

%

 

12.0

%

 

 

 

 

Conventional conforming mortgage loans

10.0

%

 

10.0

%

 

 

 

 

Conventional non-conforming mortgage loans

14.3

%

 

14.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2018

 

 

 

 

 

 

 

 

 

Constant prepayment rate:

 

 

 

 

 

 

 

 

 

Government-guaranteed mortgage loans

6.0

%

 

5.6

%

 

 

 

 

Conventional conforming mortgage loans

6.5

%

 

6.2

%

 

 

 

 

Conventional non-conforming mortgage loans

10.3

%

 

9.1

%

 

 

 

 

Discount rate:

 

 

 

 

 

 

 

 

 

Government-guaranteed mortgage loans

12.0

%

 

12.0

%

 

 

 

 

Conventional conforming mortgage loans

10.0

%

 

10.0

%

 

 

 

 

Conventional non-conforming mortgage loans

14.3

%

 

14.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Weighted-Averages of Key Economic Assumptions in Valuation Model [Table Text Block] The weighted-averages of the key economic assumptions that the Corporation used in its valuation model and the sensitivity of the current fair value to immediate 10% and 20% adverse changes in those assumptions for mortgage loans as of December 31, 2020 and 2019 were as follows:

 

December 31,

 

December 31,

 

2020

 

2019

(In thousands)

 

 

 

 

 

Carrying amount of servicing assets

$

33,071

 

 

$

26,762

 

Fair value

$

40,294

 

 

$

31,027

 

Weighted-average expected life (in years)

 

7.86

 

 

 

8.39

 

 

 

 

 

 

 

 

 

Constant prepayment rate (weighted-average annual rate)

 

6.73

%

 

 

6.45

%

Decrease in fair value due to 10% adverse change

$

1,006

 

 

$

748

 

Decrease in fair value due to 20% adverse change

$

1,970

 

 

$

1,464

 

 

 

 

 

 

 

 

 

Discount rate (weighted-average annual rate)

 

11.20

%

 

 

11.27

%

Decrease in fair value due to 10% adverse change

$

1,772

 

 

$

1,450

 

Decrease in fair value due to 20% adverse change

$

3,409

 

 

$

2,783