XML 40 R28.htm IDEA: XBRL DOCUMENT v3.8.0.1
Loans (Tables)
 9 Months Ended
Sep. 30, 2017
Receivables [Abstract]  
Schedule Of Finance Receivables By Product
Loans, excluding those reflected as discontinued operations, consist of the following:
Loans by Product (dollars in millions)
 
 
 
 
 
September 30,
2017
 
December 31,
2016
Commercial loans
$
20,346.6

 
$
20,117.8

Direct financing leases and leveraged leases
2,746.0

 
2,852.9

Total commercial
23,092.6

 
22,970.7

Consumer loans
5,412.7

 
6,565.2

Total loans
28,505.3

 
29,535.9

Loans held for sale(1)
1,056.6

 
635.8

Loans and held for sale loans(1)
$
29,561.9

 
$
30,171.7

(1) 
Loans held for sale includes loans primarily related to portfolios in Commercial Banking, Consumer Banking and the China portfolio in NSP. As discussed in subsequent tables, since the Company manages the credit risk and collections of loans held for sale consistently with its loans held for investment, the aggregate amount is presented in this table.
Schedule Of Finance Receivables By Segment, Based On Obligor Location
The following table presents loans, excluding loans held for sale, by segment, based on obligor location:
Loans (dollars in millions)
 
 
 
 
 
September 30, 2017
 
December 31, 2016
 
Domestic
 
Foreign
 
Total
 
Domestic
 
Foreign
 
Total
Commercial Banking
$
20,778.5

 
$
1,914.1

 
$
22,692.6

 
$
20,440.7

 
$
2,121.6

 
$
22,562.3

Consumer Banking(1)
5,812.7

 
—

 
5,812.7

 
6,973.6

 
—

 
6,973.6

Total
$
26,591.2

 
$
1,914.1

 
$
28,505.3

 
$
27,414.3

 
$
2,121.6

 
$
29,535.9

(1) 
The Consumer Banking segment includes certain commercial loans, primarily consisting of a portfolio of Small Business Administration (SBA) loans. These loans are excluded from the Consumer loan balance and included in the Commercial loan balances in the tables throughout this note.
Components Of Net Investment In Finance Receivables
The following table presents selected components of the net investment in loans:
Components of Net Investment in Loans (dollars in millions)
 
 
 
 
 
September 30,
2017
 
December 31,
2016
Unearned income
$
(792.9
)
 
$
(727.1
)
Unamortized premiums / (discounts)
(4.1
)
 
(31.0
)
Accretable yield on Purchased Credit-Impaired (“PCI”) loans
(1,116.9
)
 
(1,261.4
)
Net unamortized deferred costs and (fees)(1)
64.6

 
55.8

(1) 
Balance relates to the Commercial Banking segment.
Finance And Held-For-Sale Receivables - By Risk Rating
The following table summarizes commercial loans by the risk ratings that bank regulatory agencies utilize to classify credit exposure and which are consistent with indicators the Company monitors. The consumer loan risk profiles are different from commercial loans, and use loan-to-value (“LTV”) ratios in rating the credit quality, and therefore are presented separately below.

Commercial Loans and Held for Sale Loans — Risk Rating by Class / Segment (dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
 
Grade:
Pass
 
Special
Mention
 
Classified-
accruing
 
Classified-
non-accrual
 
PCI Loans
 
Total
September 30, 2017
 

 
 

 
 

 
 

 
 

 
 

Commercial Banking
 

 
   
 
   
 
   
 
   
 
   
Commercial Finance
$
7,696.3

 
$
494.7

 
$
1,000.5

 
$
192.5

 
$
12.4

 
$
9,396.4

Real Estate Finance
5,205.0

 
137.0

 
165.8

 
2.8

 
53.4

 
5,564.0

Business Capital
7,129.3

 
305.0

 
251.1

 
45.2

 
—

 
7,730.6

Rail
101.0

 
1.5

 
2.0

 
—

 
—

 
104.5

Total Commercial Banking
20,131.6

 
938.2

 
1,419.4

 
240.5

 
65.8

 
22,795.5

Consumer Banking
 

 
   
 
   
 
   
 
   
 
   
Other Consumer Banking
373.4

 
4.6

 
19.7

 
—

 
2.3

 
400.0

Total Consumer Banking
373.4

 
4.6

 
19.7

 
—

 
2.3

 
400.0

Non- Strategic Portfolios
55.1

 
16.6

 
11.3

 
4.8

 
—

 
87.8

Total
$
20,560.1

 
$
959.4

 
$
1,450.4

 
$
245.3

 
$
68.1

 
$
23,283.3

December 31, 2016
 

 
 

 
 

 
 

 
 

 
 

Commercial Banking
 

 
   
 
   
 
   
 
   
 
   
Commercial Finance
$
8,184.7

 
$
677.6

 
$
1,181.7

 
$
188.8

 
$
42.7

 
$
10,275.5

Real Estate Finance
5,191.4

 
168.7

 
115.6

 
20.4

 
70.5

 
5,566.6

Business Capital
6,238.7

 
422.0

 
271.7

 
41.7

 
—

 
6,974.1

Rail
88.7

 
14.1

 
0.9

 
—

 
—

 
103.7

Total Commercial Banking
19,703.5

 
1,282.4

 
1,569.9

 
250.9

 
113.2

 
22,919.9

Consumer Banking
 

 
   
 
   
 
   
 
   
 
   
Other Consumer Banking
374.9

 
8.3

 
22.4

 
—

 
2.8

 
408.4

Total Consumer Banking
374.9

 
8.3

 
22.4

 
—

 
2.8

 
408.4

Non- Strategic Portfolios
143.7

 
36.9

 
19.1

 
10.3

 
—

 
210.0

Total
$
20,222.1

 
$
1,327.6

 
$
1,611.4

 
$
261.2

 
$
116.0

 
$
23,538.3
Schedule Of Consumer Loan LTV Distributions
The table below summarizes the Consumer loan LTV distribution and the covered loan balances as of September 30, 2017 and December 31, 2016.
Consumer Loan LTV Distribution (dollars in millions)
 
 
 
 
 
 
 
Single Family Residential
 
Reverse Mortgage(2)
 
 
 
Covered Loans
 
Non-covered Loans
 
Total
Single
Family
Residential
 
Covered
Loans
Non-PCI
 
Non-covered Loans
 
Total
Reverse
Mortgages
 
Total
Consumer
Loans
LTV Range
Non-PCI
 
PCI
 
Non-PCI
 
PCI
 
 
 
Non-PCI
 
PCI
 
 
September 30, 2017
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Greater than 125%
$
2.7

 
$
186.7

 
$
8.3

 
$
—

 
$
197.7

 
$
—

 
$
—

 
$
—

 
$
—

 
$
197.7

101% – 125%
6.6

 
323.0

 
6.3

 
—

 
335.9

 
—

 
—

 
—

 
—

 
335.9

80% – 100%
104.8

 
585.0

 
60.2

 
—

 
750.0

 
—

 
—

 
—

 
—

 
750.0

Less than 80%
1,374.7

 
876.1

 
1,870.0

 
7.5

 
4,128.3

 
—

 
—

 
—

 
—

 
4,128.3

Not Applicable(1)
—

 
—

 
0.8

 
—

 
0.8

 
—

 
—

 
—

 
—

 
0.8

Total
$
1,488.8

 
$
1,970.8

 
$
1,945.6

 
$
7.5

 
$
5,412.7

 
$
—

 
$
—

 
$
—

 
$
—

 
$
5,412.7

December 31, 2016
 

 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
Greater than 125%
$
2.2

 
$
261.4

 
$
12.3

 
$
—

 
$
275.9

 
$
0.6

 
$
8.8

 
$
33.8

 
$
43.2

 
$
319.1

101% – 125%
4.7

 
443.7

 
13.6

 
—

 
462.0

 
1.2

 
12.7

 
7.9

 
21.8

 
483.8

80% – 100%
226.6

 
588.1

 
40.5

 
—

 
855.2

 
24.0

 
42.3

 
7.5

 
73.8

 
929.0

Less than 80%
1,515.6

 
872.4

 
1,713.1

 
9.2

 
4,110.3

 
405.4

 
304.9

 
9.8

 
720.1

 
4,830.4

Not Applicable(1)
—

 
—

 
2.9

 
—

 
2.9

 
—

 
—

 
—

 
—

 
2.9

Total
$
1,749.1

 
$
2,165.6

 
$
1,782.4

 
$
9.2

 
$
5,706.3

 
$
431.2

 
$
368.7

 
$
59.0

 
$
858.9

 
$
6,565.2

(1) 
Certain Consumer Loans do not have LTV’s, including the Credit Card portfolio.
(2) 
The reverse mortgage loans transferred to AHFS are excluded in the table and have a total carrying value of $862.1 million, of which $412.4 million are covered.
Finance And Held For Sale Receivables - Delinquency Status
The table that follows presents portfolio delinquency status, regardless of accrual/non-accrual classification:
Past Due Finance and Held for Sale Loans (dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
Past Due
 
 
 
 
 
 
 
 
 
30–59 Days
Past Due
 
60–89 Days
Past Due
 
90 Days or
Greater
 
Total
Past Due
 
Current(1)
 
PCI Loans(2)
 
Total
September 30, 2017
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial Banking
   
 
   
 
   
 
   
 
   
 
   
 
   
Commercial Finance
$
—

 
$
9.4

 
$
62.5

 
$
71.9

 
$
9,312.1

 
$
12.4

 
$
9,396.4

Real Estate Finance
0.2

 
—

 
2.6

 
2.8

 
5,507.8

 
53.4

 
5,564.0

Business Capital
126.0

 
32.4

 
21.6

 
180.0

 
7,550.6

 
—

 
7,730.6

Rail
0.7

 
0.3

 
1.0

 
2.0

 
102.5

 
—

 
104.5

Total Commercial Banking
126.9

 
42.1

 
87.7

 
256.7

 
22,473.0

 
65.8

 
22,795.5

Consumer Banking
 

 
   
 
   
 
   
 
   
 
   
 
   
Legacy Consumer Mortgages
30.2

 
5.1

 
31.5

 
66.8

 
2,320.1

 
1,978.3

 
4,365.2

Other Consumer Banking
3.3

 
—

 
0.4

 
3.7

 
2,307.4

 
2.3

 
2,313.4

Total Consumer Banking
33.5

 
5.1

 
31.9

 
70.5

 
4,627.5

 
1,980.6

 
6,678.6

Non-Strategic Portfolios
—

 
—

 
3.7

 
3.7

 
84.1

 
—

 
87.8

Total
$
160.4

 
$
47.2

 
$
123.3

 
$
330.9

 
$
27,184.6

 
$
2,046.4

 
$
29,561.9

December 31, 2016
 

 
   
 
   
 
   
 
   
 
   
 
   
Commercial Banking
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial Finance
$
21.4

 
$
—

 
$
17.6

 
$
39.0

 
$
10,193.8

 
$
42.7

 
$
10,275.5

Real Estate Finance
0.1

 
—

 
—

 
0.1

 
5,496.0

 
70.5

 
5,566.6

Business Capital
143.6

 
42.4

 
16.3

 
202.3

 
6,771.8

 
—

 
6,974.1

Rail
5.9

 
0.6

 
2.3

 
8.8

 
94.9

 
—

 
103.7

Total Commercial Banking
171.0

 
43.0

 
36.2

 
250.2

 
22,556.5

 
113.2

 
22,919.9

Consumer Banking
Legacy Consumer Mortgages
22.6

 
6.1

 
36.6

 
65.3

 
2,563.6

 
2,233.8

 
4,862.7

Other Consumer Banking
7.4

 
4.9

 
0.6

 
12.9

 
2,163.4

 
2.8

 
2,179.1

Total Consumer Banking
30.0

 
11.0

 
37.2

 
78.2

 
4,727.0

 
2,236.6

 
7,041.8

Non-Strategic Portfolios
3.0

 
1.1

 
7.0

 
11.1

 
198.9

 
—

 
210.0

Total
$
204.0

 
$
55.1

 
$
80.4

 
$
339.5

 
$
27,482.4

 
$
2,349.8

 
$
30,171.7

(1) 
Due to their nature, reverse mortgage loans are included in Current, as they do not have contractual payments due at a specified time.
(2) 
PCI loans are written down at acquisition to their fair value using an estimate of cash flows deemed to be collectible. Accordingly, such loans are no longer classified as past due or non-accrual even though they may be contractually past due as we expect to fully collect the new carrying values.
Finance Receivables On Non-accrual Status
The following table sets forth non-accrual loans, assets received in satisfaction of loans (OREO and repossessed assets) and loans 90 days or more past due and still accruing.
Loans on Non-Accrual Status (dollars in millions)(1)
 
 
 
 
 
September 30, 2017
 
December 31, 2016
 
Held for
Investment
 
Held for
Sale
 
Total
 
Held for
Investment
 
Held for
Sale
 
Total
Commercial Banking
 

 
 

 
 

 
 

 
 

 
 

Commercial Finance
$
185.3

 
$
7.2

 
$
192.5

 
$
156.7

 
$
32.1

 
$
188.8

Real Estate Finance
2.8

 
—

 
2.8

 
20.4

 
—

 
20.4

Business Capital
45.2

 
—

 
45.2

 
41.7

 
—

 
41.7

Total Commercial Banking
233.3

 
7.2

 
240.5

 
218.8

 
32.1

 
250.9

Consumer Banking
 

 
   
 
   
 
   
 
   
 
   
Legacy Consumer Mortgages
18.9

 
—

 
18.9

 
17.3

 
—

 
17.3

Other Consumer Banking
0.4

 
—

 
0.4

 
0.1

 
—

 
0.1

Total Consumer Banking
19.3

 
—

 
19.3

 
17.4

 
—

 
17.4

Non-Strategic Portfolios
—

 
4.8

 
4.8

 
—

 
10.3

 
10.3

Total
$
252.6

 
$
12.0

 
$
264.6

 
$
236.2

 
$
42.4

 
$
278.6

Repossessed assets and OREO
 

 
 

 
64.2

 
 

 
 

 
72.7

Total non-performing assets
 

 
 

 
$
328.8

 
 

 
 

 
$
351.3

Commercial loans past due 90 days or more accruing
 
 

 
$
17.3

 
 

 
 

 
$
7.2

Consumer loans past due 90 days or more accruing
 
 

 
18.1

 
 

 
 

 
24.8

Total Accruing loans past due 90 days or more
 
 

 
$
35.4

 
 

 
 

 
$
32.0

(1) 
Factored receivables within our Business Capital division do not accrue interest and therefore are not considered within non-accrual loan balances; however factored receivables are considered for credit provisioning purposes.
Schedule Of Loans In Process Of Foreclosure
The table below summarizes the residential mortgage loans in the process of foreclosure and OREO:
Loans in Process of Foreclosure (dollars in millions) (1)
 
 
 
 
 
September 30,
2017
 
December 31,
2016
PCI
$
137.3

 
$
201.7

Non-PCI
144.9

 
106.3

Loans in process of foreclosure
$
282.2

 
$
308.0

OREO
$
61.7

 
$
69.9



(1)
As of September 30, 2017, the table included $127.5 million of reverse mortgage loans in the process of foreclosure that were transferred from AHFI to AHFS and $25.2 million of reverse mortgage OREO.
Impaired Loans
The following table contains information about impaired loans and the related allowance for loan losses by class, exclusive of loans that were identified as impaired at the date of the OneWest Transaction (the “Acquisition Date”) for which the Company is applying the income recognition and disclosure guidance in ASC 310-30 (Loans and Debt Securities Acquired with Deteriorated Credit Quality), which are disclosed further below in this note. Impaired loans exclude PCI loans.


Impaired Loans (dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Recorded Investment(3)
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Quarter Ended September 30, 2017
 
Quarter Ended September 30, 2016
 
Nine Months Ended September 30, 2017
 
Nine Months Ended September 30, 2016
September 30, 2017
 

 
 

 
 

 
 

 
 

 
 
 
 
With no related allowance recorded:
 

 
   
 
   
 
   
 
   
 
 
 
 
Commercial Banking
 

 
 

 
 

 
 

 
 

 
 
 
 
Commercial Finance
$
58.4

 
$
70.3

 
$
—

 
$
64.5

 
$
33.9

 
$
61.9

 
$
23.4

Business Capital
3.3

 
4.0

 
—

 
3.4

 
5.5

 
4.2

 
6.2

Real Estate Finance
—

 
—

 
—

 
0.3

 
0.8

 
0.5

 
1.5

With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Commercial Banking
 

 
   
 
   
 
   
 
   
 
 
 
 
Commercial Finance
174.2

 
176.9

 
32.9

 
154.8

 
138.2

 
146.8

 
129.4

Business Capital
7.5

 
7.5

 
2.3

 
13.1

 
5.9

 
15.1

 
8.6

Real Estate Finance
2.8

 
2.8

 
0.4

 
2.8

 
3.1

 
6.3

 
2.4

Total Impaired Loans(1)
246.2

 
261.5

 
35.6

 
238.9

 
187.4

 
234.8

 
171.5

Total Loans Impaired at Acquisition Date(2)
2,046.4

 
3,004.3

 
20.8

 
2,125.5

 
2,449.2

 
2,220.7

 
2,536.5

Total
$
2,292.6

 
$
3,265.8

 
$
56.4

 
$
2,364.4

 
$
2,636.6

 
$
2,455.5

 
$
2,708.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average Recorded Investment (3)
 
 
 
 
 
 
December 31, 2016
 

 
 

 
 

 
 

 
 

 
 
 
 
With no related allowance recorded:
 

 
   
 
   
 
   
 
   
 
 
 
 
Commercial Banking
 

 
 

 
 

 
 

 
 

 
 
 
 
Commercial Finance
$
54.3

 
$
72.2

 
$
—

 
$
29.5

 
 

 
 
 
 
Business Capital
0.5

 
1.8

 
—

 
5.1

 
 

 
 
 
 
Real Estate Finance
0.7

 
0.7

 
—

 
1.3

 
 

 
 
 
 
With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Commercial Banking
 

 
   
 
   
 
   
 
   
 
 
 
 
Commercial Finance
143.0

 
146.2

 
25.5

 
132.1

 
 

 
 
 
 
Business Capital
6.6

 
6.6

 
4.2

 
8.2

 
 

 
 
 
 
Real Estate Finance
16.7

 
16.8

 
4.0

 
5.2

 
 

 
 
 
 
Total Impaired Loans(1)
221.8

 
244.3

 
33.7

 
181.4

 
 

 
 
 
 
Total Loans Impaired at Acquisition Date(2)
2,349.8

 
3,440.7

 
13.6

 
2,504.4

 
 

 
 
 
 
Total
$
2,571.6

 
$
3,685.0

 
$
47.3

 
$
2,685.8

 
 

 
 
 
 
(1) 
Interest income recorded for the three and nine months ended September 30, 2017 while the loans were impaired was $1.7 million of which none was recognized using the cash-basis method of accounting. Interest income recorded for the year ended December 31, 2016 while the loans were impaired was $1.6 million, of which $0.6 million was interest recognized using the cash-basis method of accounting.
(2) 
Details of finance loans that were identified as impaired at the Acquisition Date are presented under Loans Acquired with Deteriorated Credit Quality.
(3) 
Average recorded investment for the quarters and nine months ended September 30, 2017, September 30, 2016 and year ended December 31, 2016.
Purchased Credit Impaired Loans With Deteriorated Credit Quality
Purchased Credit Impaired Loans (dollars in millions)
 
 
 
 
 
 
September 30, 2017
Unpaid
Principal
Balance
 
Carrying
Value
 
Allowance
for Loan
Losses
Commercial Banking
 

 
 

 
 

Commercial Finance
$
33.8

 
$
12.4

 
$
2.4

Real Estate Finance
72.9

 
53.4

 
6.9

Consumer Banking
 

 
   
 
   
Other Consumer Banking
3.0

 
2.3

 
—

Legacy Consumer Mortgages
2,894.6

 
1,978.3

 
11.5

 
$
3,004.3

 
$
2,046.4

 
$
20.8

December 31, 2016
   
 
   
 
   
Commercial Banking
 

 
 

 
 

Commercial Finance
$
70.0

 
$
42.7

 
$
2.4

Real Estate Finance
108.1

 
70.5

 
4.9

Consumer Banking
 

 
   
 
   
Other Consumer Banking
3.7

 
2.8

 
—

Legacy Consumer Mortgages
3,258.9

 
2,233.8

 
6.3

 
$
3,440.7

 
$
2,349.8

 
$
13.6
Summary Of Commercial PCI Loans
The following table summarizes the carrying value of commercial PCI loans within Commercial Banking, which are monitored for credit quality based on internal risk classifications. See previous table Consumer Loan LTV Distributions for credit quality metrics on consumer PCI loans.
 
September 30, 2017
 
December 31, 2016
(dollars in millions)
Non-
criticized
 
Criticized
 
Total
 
Non-
criticized
 
Criticized
 
Total
Commercial Finance
$
—

 
$
12.4

 
$
12.4

 
$
5.4

 
$
37.3

 
$
42.7

Real Estate Finance
25.9

 
27.5

 
53.4

 
35.6

 
34.9

 
70.5

Total
$
25.9

 
$
39.9

 
$
65.8

 
$
41.0

 
$
72.2

 
$
113.2
Schedule Of Changes To The Accretable Yield For PCI Loans
Changes in the accretable yield for PCI loans are summarized below for the quarters ended September 30, 2017 and 2016.
Change in Accretable Yield (dollars in millions)
 
September 30, 2017
(dollars in millions)
Quarter Ended
Nine months ended
Balance, beginning of period
$
1,176.0

$
1,261.4

Accretion into interest income
(50.5
)
(156.8
)
Reclassification from non-accretable difference
3.6

37.3

Disposals and Other
(12.2
)
(25.0
)
Balance at September 30, 2017
$
1,116.9

$
1,116.9

 
September 30, 2016
 
Quarter Ended
Nine months ended
Balance, beginning of period
$
1,277.3

$
1,299.1

Accretion into interest income
(51.7
)
(155.2
)
Reclassification from non-accretable difference
35.8

146.2

Disposals and Other
(5.4
)
(34.1
)
Balance at September 30, 2016
$
1,256.0

$
1,256.0
Estimated Future Advances To Reverse Mortgages
As of September 30, 2017, the Company’s estimated future advances to reverse mortgagors are as follows:
Future Advances (dollars in millions)
 
 
Year Ending:
 
2017
$
4.4

2018
11.8

2019
9.8

2020
8.0

2021
6.6

Years 2022 – 2026
18.1

Years 2027 – 2031
5.6

Years 2032 – 2036
1.4

Thereafter
0.3

Total (1),(2)
$
66.0

(1) 
This table does not take into consideration cash inflows including payments from mortgagors or payoffs based on contractual terms.
(2) 
This table includes the reverse mortgages supported by the Company as a result of the IndyMac loss-share agreements with the FDIC. As of September 30, 2017, the Company is responsible for funding up to a remaining $65 million of the total amount.