Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 05, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Walker & Dunlop, Inc. | ' |
Entity Central Index Key | '0001497770 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 34,878,568 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Cash and cash equivalents | $60,968 | $65,027 |
Restricted cash | 7,035 | 7,130 |
Pledged securities, at fair value | 45,449 | 33,481 |
Loans held for sale, at fair value | 365,210 | 1,101,561 |
Loans held for investment | 118,864 | 9,468 |
Servicing fees and other receivables, net | 26,638 | 40,933 |
Derivative assets | 13,357 | 21,258 |
Mortgage servicing rights | 344,899 | 315,524 |
Goodwill | 60,212 | 59,735 |
Intangible assets | 1,828 | 4,644 |
Other assets | 23,256 | 29,872 |
Total assets | 1,067,716 | 1,688,633 |
Liabilities | ' | ' |
Accounts payable and other liabilities | 124,940 | 122,798 |
Performance deposits from borrowers | 7,995 | 9,503 |
Derivative liabilities | 8,444 | 867 |
Guaranty obligation, net of accumulated amortization | 22,762 | 21,155 |
Allowance for risk-sharing obligations | 8,461 | 15,670 |
Warehouse notes payable | 429,944 | 1,084,539 |
Notes payable | 74,700 | 80,925 |
Total liabilities | 677,246 | 1,335,457 |
Stockholders’ equity: | ' | ' |
Preferred shares, Authorized 50,000,000, none issued. | ' | ' |
Common stock, $0.01 par value. Authorized 200,000,000; issued and outstanding 33,905,552 shares in 2013 and 33,567,730 shares in 2012. | 339 | 336 |
Additional paid-in capital | 243,790 | 236,823 |
Retained earnings | 146,341 | 116,017 |
Total stockholders’ equity | 390,470 | 353,176 |
Commitments and contingencies | ' | ' |
Total liabilities and stockholders’ equity | $1,067,716 | $1,688,633 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement - Condensed Consolidated Balance Sheets (Parenthetical) [Line Items] | ' | ' |
Preferred shares, authorized | 50,000,000 | 50,000,000 |
Preferred shares, issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, Authorized | 200,000,000 | 200,000,000 |
Common stock, issued | 33,905,552 | 33,567,730 |
Common stock, outstanding | 33,905,552 | 33,567,730 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues | ' | ' | ' | ' |
Gains from mortgage banking activities | $45,278 | $53,400 | $151,285 | $107,136 |
Servicing fees | 22,954 | 13,307 | 66,465 | 32,513 |
Net warehouse interest income | 1,783 | 1,248 | 5,166 | 3,259 |
Escrow earnings and other interest income | 1,037 | 708 | 2,895 | 1,772 |
Other | 2,598 | 1,463 | 7,758 | 6,568 |
Total revenues | 73,650 | 70,126 | 233,569 | 151,248 |
Expenses | ' | ' | ' | ' |
Personnel | 31,091 | 32,173 | 96,682 | 61,177 |
Amortization and depreciation | 19,441 | 9,629 | 54,425 | 23,596 |
Amortization of intangible assets | 1,072 | 7,371 | 2,816 | 7,406 |
Provision for risk-sharing obligations | -155 | -848 | 997 | 1,126 |
Interest expense on corporate debt | 854 | 388 | 2,692 | 719 |
Other operating expenses | 8,643 | 9,635 | 27,121 | 20,843 |
Total expenses | 60,946 | 58,348 | 184,733 | 114,867 |
Income from operations | 12,704 | 11,778 | 48,836 | 36,381 |
Income tax expense | 4,649 | 4,680 | 18,512 | 14,152 |
Net income | $8,055 | $7,098 | $30,324 | $22,229 |
Basic earnings per share | $0.24 | $0.28 | $0.90 | $0.97 |
Diluted earnings per share | $0.23 | $0.28 | $0.88 | $0.96 |
Basic weighted average shares outstanding | 33,859,453 | 25,091,153 | 33,710,837 | 22,881,795 |
Diluted weighted average shares outstanding | 34,382,975 | 25,443,601 | 34,315,514 | 23,101,832 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net income | $30,324 | $22,229 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' |
Gains attributable to fair value of future servicing rights, net of guaranty obligation | -70,616 | -52,091 |
Gains attributable to fair value of premium and origination fees | 11,535 | -10,000 |
Provision for risk-sharing obligations | 997 | 1,126 |
Amortization and depreciation | 57,241 | 31,002 |
Originations of loans held for sale | -4,342,343 | -2,594,190 |
Sales of loans to third parties | 5,072,536 | 1,691,226 |
Amortization of deferred loan fees and costs | -67 | -58 |
Origination fees received from loans held for investment | 591 | ' |
Stock compensation | 6,846 | 3,384 |
Tax (benefit) expense from vesting of equity awards | -1,253 | 7 |
Cash paid to settle risk-sharing obligations | -4,935 | -2,030 |
Cash allowance received from landlord | ' | 1,301 |
Cash received from sale of assets acquired | ' | 2,244 |
Changes in: | ' | ' |
Restricted cash and pledged securities | -11,873 | -3,291 |
Servicing fees and other receivables | 11,109 | 498 |
Derivative fair value adjustments | ' | 299 |
Other assets | 9,394 | -5,545 |
Accounts payable and other liabilities | -16,927 | 9,850 |
Performance deposits from borrowers | -1,508 | 1,763 |
Net cash provided by (used in) operating activities | 751,051 | -902,276 |
Cash flows from investing activities: | ' | ' |
Capital expenditures | -4,339 | -4,668 |
Acquisition of CWCapital LLC, net of cash acquired and other assets | ' | -208,109 |
Originations of loans held for investment | -131,620 | -16,368 |
Principal collected on loans held for investment | 21,700 | ' |
Net cash used in investing activities | -114,259 | -229,145 |
Cash flows from financing activities: | ' | ' |
(Repayments) borrowings of short-term warehouse notes payable, net | -729,964 | 939,295 |
Borrowings of interim warehouse notes payable | 92,281 | 12,375 |
Repayments of interim warehouse notes payable | -16,912 | ' |
Borrowings of notes payable | ' | 83,000 |
Repayments of notes payable | -6,225 | -23,869 |
Secured borrowings | 19,845 | ' |
Debt issuance costs | ' | -1,108 |
Proceeds from issuance of common stock | 1,189 | 150,698 |
Repurchase of common stock | -2,318 | -167 |
Tax benefit (expense) from vesting of equity awards | 1,253 | -7 |
Net cash (used in) provided by financing activities | -640,851 | 1,160,217 |
Net (decrease) increase in cash and cash equivalents | -4,059 | 28,796 |
Cash and cash equivalents at beginning of period | 65,027 | 53,817 |
Cash and cash equivalents at end of period | 60,968 | 82,613 |
Supplemental Disclosure of Cash Flow Information: | ' | ' |
Cash paid to third parties for interest | 11,317 | 4,296 |
Cash paid for taxes | $647 | $8,256 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Organization and Basis of Presentation | ' |
NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION | |
These financial statements represent the condensed consolidated financial position and results of operations of Walker & Dunlop, Inc. and its subsidiaries. Unless the context otherwise requires, references to “we,” “us,” “our,” “Walker & Dunlop” and the “Company” mean the Walker & Dunlop consolidated companies. The statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Because the accompanying condensed consolidated financial statements do not include all of the information and footnotes required by GAAP, they should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (“2012 Form 10-K”). In the opinion of management, all adjustments (consisting only of normal recurring accruals except as otherwise noted herein) considered necessary for a fair presentation of the results for the Company in the interim periods presented have been included. Results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013, or thereafter. | |
Walker & Dunlop is one of the leading commercial real estate finance companies in the United States, with a primary focus on multifamily lending. The Company originates, sells and services a range of multifamily and other commercial real estate financing products. The Company’s clients are owners and developers of commercial real estate across the country. The Company originates and sells loans pursuant to the programs of the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac,” and together with Fannie Mae, the government-sponsored enterprises, or the “GSEs”), the Government National Mortgage Association (“Ginnie Mae”) and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”), with which Walker & Dunlop has long-established relationships. The Company retains servicing rights and asset management responsibilities on nearly all loans that it sells to the GSEs and HUD. Walker & Dunlop is approved as a Fannie Mae Delegated Underwriting and Servicing (“DUS”TM) lender nationally, a Freddie Mac Program Plus lender in 22 states and the District of Columbia, a HUD Multifamily Accelerated Processing (“MAP”) lender nationally, a HUD Section 232 LEAN lender nationally, and a Ginnie Mae issuer. The Company also brokers and services loans for a number of life insurance companies and other institutional investors, in which cases it does not fund the loan but rather acts as a loan broker. Additionally, through our subsidiary entities, we provide institutional advisory, asset management, and investment management services specializing in debt, structured debt, and equity financing for commercial real estate. | |
The Company has an interim loan program offering floating-rate loans with original principal balances of generally up to $30.0 million, for terms of up to two years, to experienced borrowers seeking to acquire or reposition multifamily properties that do not currently qualify for permanent financing (the “Program”). The Company underwrites all loans originated through the Program using similar underwriting standards used to underwrite loans it originates and sells. During the time they are outstanding, the Company assumes the full risk of loss on the loans. In addition, the Company services and asset-manages loans originated through the Program, with the ultimate goal of providing permanent financing on the properties. These loans are classified as held for investment on the Company’s balance sheet during such time that they are outstanding. $109.9 million of the loans outstanding as of September 30, 2013 were originated in 2013, and all of the loans outstanding as of September 30, 2013 were originated within the past 18 months. As of September 30, 2013, none of the loans under the Program is delinquent. Additionally, we have not incurred a loss on any loans originated under the Program. | |
On September 4, 2012, the Company closed its acquisition of CWCapital, LLC (“CWCapital”), at which time the total consideration transferred was valued at approximately $231.1 million, consisting of $80.0 million in cash and the Company’s issuance in a private placement to CW Financial Services, LLC (“CW Financial”) of approximately 11.6 million shares of common stock valued at approximately $151.1 million (the “Acquisition”). Upon closing of the Acquisition, CWCapital became an indirect wholly owned subsidiary of the Company and was renamed Walker & Dunlop Capital, LLC. By virtue of the Company’s ownership of CWCapital, the Company also acquired a 50% ownership in ARA Finance LLC, a joint venture with ARA Finco LLC, one of the largest investment sales brokers in the United States, in which ARA Finco LLC owns the remaining 50% of ARA Finance LLC. The Company does not have the ability to direct the activities of ARA Finance LLC; therefore, the Company accounts for its investment in ARA Finance LLC under the equity method of accounting. | |
The results of operations for the three and nine months ended September 30, 2013 reflect the impact of the Acquisition, which materially affects the comparability to the prior year. | |
During the third quarter of 2013, the Company launched a large loan bridge program (the “Bridge Program”). Similar to the Program, the Bridge Program offers floating-rate loans to experienced borrowers seeking to acquire or reposition multifamily properties that do not currently qualify for permanent financing but are good candidates for future permanent financing. The Bridge Program is offered for loans of $30.0 million or more and for terms of up to three years. As of September 30, 2013, there have been no loans originated under the Bridge Program. | |
The Bridge Program was established through a partnership with third-party investors. The loans in the Bridge Program are approved for funding by unanimous consent of the limited partners, funded by the partnership, and underwritten by the Company pursuant to service agreements. The Company accounts for its five-percent ownership interest as an equity-method investment. The operations of the Bridge Program were immaterial for the three and nine months ended September 30, 2013. | |
In the third quarter of 2013, the Company transferred a participating interest in a financial asset to a third party. The Company accounted for the transfer as a secured borrowing. The entire financial asset is presented as loans held for investment, and the secured borrowing of $19.8 million is included within the Accounts payable and other liabilities line item in the Condensed Consolidated Balance Sheets. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||||||||
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||
Principles of Consolidation—The condensed consolidated financial statements include the accounts of the Company and all of its consolidated entities. All material intercompany transactions have been eliminated. The Company has evaluated all subsequent events. | ||||||||||||||||||||
Use of Estimates—The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, including guaranty obligations, capitalized mortgage servicing rights, derivative instruments and hedging relationships, and the disclosure of contingent assets and liabilities. Actual results may vary from these estimates. | ||||||||||||||||||||
Comprehensive Income—For the three and nine months ended September 30, 2013 and 2012, comprehensive income equaled net income; therefore, a separate statement of comprehensive income is not included in the accompanying condensed consolidated financial statements. | ||||||||||||||||||||
Loans Held for Investment—Loans held for investment are interim loans originated by the Company through the Program. The loans are carried at their unpaid principal balances adjusted for net unamortized loan fees and costs, and net of any allowance for loan losses. Interest income is accrued based on the actual coupon rate and is recognized as revenue when earned and deemed collectible. | ||||||||||||||||||||
The Company uses the interest method to determine an effective yield to amortize the loan fees and costs on real estate loans held for investment. All loans held for investment are floating-rate loans; therefore, the Company uses the initial coupon interest rate of the loans (without regard to future changes in the underlying indices) and anticipated principal payments, if any, to determine periodic amortization. | ||||||||||||||||||||
The Company will reclassify loans held-for-investment as loans held-for-sale if it determines that the loans will be sold or transferred to third parties. | ||||||||||||||||||||
The Company monitors the financial condition of the borrower and the financial trends of the underlying property for each of its loans held for investment to assess the credit quality of the loan. None of the loans held for investment was delinquent as of September 30, 2013 or December 31, 2012. Additionally, we have not experienced any losses or delinquencies of 15 days or more related to these loans since the inception of the Program. No allowance for loan losses related to these loans was recorded as of September 30, 2013 or December 31, 2012. | ||||||||||||||||||||
Net Warehouse Interest Income—The Company presents warehouse interest income net of warehouse interest expense. Warehouse interest income is the interest earned from loans that are held for sale and those held for investment. Substantially all loans that are held for sale are financed with matched borrowings under our warehouse facilities incurred to fund a specific loan held for sale. Additionally, a substantial portion of loans held for investment is match funded. Warehouse interest expense is incurred on borrowings used to fund loans solely while they are held for sale or for investment. Warehouse interest income and expense are earned or incurred on loans held for sale after a loan is closed and before a loan is sold. Warehouse interest income and expense are earned or incurred on loans held for investment after a loan is closed and before a loan is repaid. | ||||||||||||||||||||
Included in net warehouse interest income for the three and nine months ended September 30, 2013 and 2012 are the following components (in thousands): | ||||||||||||||||||||
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Warehouse interest income | $ | 4,877 | $ | 4,169 | $ | 15,083 | $ | 9,722 | ||||||||||||
Warehouse interest expense | (3,094 | ) | (2,921 | ) | (9,917 | ) | (6,463 | ) | ||||||||||||
Net warehouse interest income | $ | 1,783 | $ | 1,248 | $ | 5,166 | $ | 3,259 | ||||||||||||
Recently Issued Accounting Pronouncements—There were no accounting pronouncements issued during the third quarter of 2013 that have the potential to impact the Company. All other recently issued accounting pronouncements and their expected impact to the Company have been disclosed previously. | ||||||||||||||||||||
There have been no material changes to the accounting policies discussed in Note 2 of the Company’s 2012 Form 10-K. | ||||||||||||||||||||
The Company has made certain immaterial reclassifications to prior-year balances to conform to current-year presentation. |
Acquisition_of_CWCapital_Llc
Acquisition of CWCapital Llc | 9 Months Ended |
Sep. 30, 2013 | |
Acquisition of CWCapital LLC | ' |
NOTE 3—ACQUISITION OF CWCAPITAL LLC | |
On September 4, 2012 (“the Acquisition Date”), the Company closed its acquisition of CWCapital, at which time the total consideration transferred was valued at approximately $231.1 million, consisting of $80.0 million in cash and the Company’s issuance in a private placement to CW Financial of approximately 11.6 million shares of common stock valued at approximately $151.1 million. Upon closing of the Acquisition, CWCapital became an indirect wholly owned subsidiary of the Company and was renamed Walker & Dunlop Capital, LLC. | |
The Company recorded the fair value of the assets acquired and liabilities assumed as of the Acquisition Date. The Company also included CWCapital’s results of operations and cash flows in its financial statements from the Acquisition Date forward. | |
The fair value of consideration transferred was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the Acquisition Date, with the remaining unallocated amount recognized as goodwill. | |
The recognized goodwill of $60.2 million, all of which is tax deductible over 15 years, is attributed to the value of the assembled workforce, the broader scale of operations of the combined company’s national platform, and the long-term expected synergies associated with the combination. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 9 Months Ended | |||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | ' | |||||||||||||||||||||||||||||||||||||
NOTE 4—GOODWILL AND OTHER INTANGIBLE ASSETS | ||||||||||||||||||||||||||||||||||||||
The following summarizes the changes in the carrying amount of the Company’s goodwill for the nine months ended September 30, 2013 (in thousands): | ||||||||||||||||||||||||||||||||||||||
For the nine months ended, | ||||||||||||||||||||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 59,735 | ||||||||||||||||||||||||||||||||||||
Goodwill related to the Acquisition | — | |||||||||||||||||||||||||||||||||||||
Retrospective adjustments | 477 | |||||||||||||||||||||||||||||||||||||
Impairment | — | |||||||||||||||||||||||||||||||||||||
Ending balance | $ | 60,212 | ||||||||||||||||||||||||||||||||||||
The Company provisionally allocated the purchase price to the assets acquired, separately identifiable intangible assets, and liabilities assumed related to the Acquisition based on their estimated Acquisition Date fair values. A change to the provisional amounts recorded for assets acquired, identifiable intangible assets, and liabilities assumed during the measurement period affects the amount of the purchase price allocated to goodwill. Such changes to the purchase price allocation during the measurement period are recorded as retrospective adjustments to the consolidated financial statements. During the nine months ended September 30, 2013, the Company identified immaterial adjustments to certain of the provisional amounts recorded as shown in the table above. The adjustments were recorded based on information obtained subsequent to the Acquisition Date that related to information that existed as of the Acquisition Date. The Company recorded no retrospective adjustments or impairment during the three months ended September 30, 2013. | ||||||||||||||||||||||||||||||||||||||
The Company completed the accounting for the Acquisition as the Company obtained all of the information it was seeking about facts and circumstances that existed as of the Acquisition Date. | ||||||||||||||||||||||||||||||||||||||
The following summarizes the Company’s other intangible assets, including those related to the Acquisition (in thousands): | ||||||||||||||||||||||||||||||||||||||
As of September 30, 2013 | As of December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Gross carrying | Accumulated | Net carrying | Gross carrying | Accumulated | Net carrying | |||||||||||||||||||||||||||||||||
value | amortization | value | value | amortization | value | |||||||||||||||||||||||||||||||||
Mortgage pipeline intangible asset | $ | 18,700 | $ | (17,945 | ) | $ | 755 | $ | 18,700 | $ | (15,182 | ) | $ | 3,518 | ||||||||||||||||||||||||
Acquired mortgage servicing rights | 124,629 | (28,716 | ) | 95,913 | 124,629 | (8,503 | ) | 116,126 | ||||||||||||||||||||||||||||||
Originated mortgage servicing rights | 344,556 | (95,570 | ) | 248,986 | 277,328 | (77,930 | ) | 199,398 | ||||||||||||||||||||||||||||||
Total | $ | 487,885 | $ | (142,231 | ) | $ | 345,654 | $ | 420,657 | $ | (101,615 | ) | $ | 319,042 | ||||||||||||||||||||||||
The Company expects to amortize the remaining net carrying value of the mortgage pipeline intangible asset within the next nine months. However, the timing of the actual amortization may vary from this estimate. The expected amortization of Mortgage Servicing Rights (MSRs), which includes the MSRs acquired from CWCapital shown above, is disclosed in Note 6. |
Gains_from_Mortgage_Banking_Ac
Gains from Mortgage Banking Activities | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||
Gains from Mortgage Banking Activities | ' | |||||||||||||||||||||||
NOTE 5—GAINS FROM MORTGAGE BANKING ACTIVITIES | ||||||||||||||||||||||||
The gains from mortgage banking activities consisted of the following activity for the three and nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||||||||||||||||||
For the three months ended | For the nine months ended | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Contractual loan origination related fees, net | $ | 23,816 | $ | 27,674 | $ | 80,669 | $ | 55,045 | ||||||||||||||||
Fair value of expected future cash flows from servicing recognized at commitment | 22,671 | 27,237 | 74,488 | 55,404 | ||||||||||||||||||||
Fair value of expected guaranty obligation | (1,209 | ) | (1,511 | ) | (3,872 | ) | (3,313 | ) | ||||||||||||||||
Total gains from mortgage banking activities | $ | 45,278 | $ | 53,400 | $ | 151,285 | $ | 107,136 | ||||||||||||||||
The origination fees shown in the table above are net of co-broker fees of $4.9 million and $5.2 million for the three months ended September 30, 2013 and 2012, respectively, and $16.8 million and $13.6 million for the nine months ended September 30, 2013 and 2012, respectively. |
Mortgage_Servicing_Rights
Mortgage Servicing Rights | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Mortgage Servicing Rights | ' | |||||||||||||||||||
NOTE 6—MORTGAGE SERVICING RIGHTS | ||||||||||||||||||||
MSRs represent the fair value of the servicing rights retained by the Company for mortgage loans originated and sold. The capitalized amount is equal to the estimated fair value of the expected net cash flows associated with the servicing rights. The following describes the key assumptions used in calculating each loan’s MSR: | ||||||||||||||||||||
Discount rate—Depending upon loan type, the discount rate used is management’s best estimate of market discount rates. The rates used for loans originated were 10% to 15% for each of the periods presented. | ||||||||||||||||||||
Estimated Life—The estimated life of the MSRs is derived based upon the stated yield maintenance and/or prepayment protection term of the underlying loan and may be reduced by 6 to 12 months based upon the expiration of various types of prepayment penalty and/or lockout provisions prior to that stated maturity date. | ||||||||||||||||||||
Servicing Cost—The estimated future cost to service the loan for the estimated life of the MSR is subtracted from the estimated future cash flows. | ||||||||||||||||||||
The fair value of the MSRs was $400.0 million and $350.5 million at September 30, 2013 and December 31, 2012, respectively. The Company uses a discounted static cash flow valuation approach and the key economic assumption is the discount rate. For example, see the following sensitivities: | ||||||||||||||||||||
The impact of a 100 basis point increase in the discount rate at September 30, 2013, is a decrease in the fair value of $13.2 million. | ||||||||||||||||||||
The impact of a 200 basis point increase in the discount rate at September 30, 2013, is a decrease in the fair value of $25.4 million. | ||||||||||||||||||||
Activity related to capitalized MSRs for the three and nine months ended September 30, 2013 and 2012 was as follows (in thousands): | ||||||||||||||||||||
For the three months ended | For the nine months ended | |||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Beginning balance | $ | 341,770 | $ | 149,533 | $ | 315,524 | $ | 137,079 | ||||||||||||
Additions, following the sale of loan | 22,991 | 24,585 | 85,286 | 51,449 | ||||||||||||||||
Additions, CWCapital acquisition | — | 130,543 | — | 130,543 | ||||||||||||||||
Amortization | (16,201 | ) | (9,228 | ) | (47,144 | ) | (22,279 | ) | ||||||||||||
Pre-payments and write-offs | (3,661 | ) | (729 | ) | (8,767 | ) | (2,088 | ) | ||||||||||||
Ending balance | $ | 344,899 | $ | 294,704 | $ | 344,899 | $ | 294,704 | ||||||||||||
The expected amortization of MSR balances recorded as of September 30, 2013 is shown in the table below (in thousands). Actual amortization may vary from these estimates. | ||||||||||||||||||||
Three Months Ending December 31, | Originated MSRs | Acquired MSRs | Total MSRs | |||||||||||||||||
Amortization | Amortization | Amortization | ||||||||||||||||||
2013 | $ | 11,266 | $ | 4,872 | $ | 16,138 | ||||||||||||||
Year Ending December 31, | ||||||||||||||||||||
2014 | 42,958 | 18,726 | 61,684 | |||||||||||||||||
2015 | 37,721 | 17,316 | 55,037 | |||||||||||||||||
2016 | 34,556 | 16,026 | 50,582 | |||||||||||||||||
2017 | 31,443 | 14,117 | 45,560 | |||||||||||||||||
2018 | 27,122 | 10,226 | 37,348 | |||||||||||||||||
Thereafter | 63,920 | 14,630 | 78,550 | |||||||||||||||||
Total | $ | 248,986 | $ | 95,913 | $ | 344,899 | ||||||||||||||
Guaranty_Obligation_and_Allowa
Guaranty Obligation and Allowance for Risk-Sharing Obligations | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Guaranty Obligation and Allowance for Risk-Sharing Obligations | ' | ||||||||||||||||||||||
NOTE 7—GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS | |||||||||||||||||||||||
When a loan is sold under the Fannie Mae DUS program, the Company typically agrees to guarantee a portion of the ultimate loss incurred on the loan should the borrower fail to perform. The compensation for this risk is a component of the servicing fee on the loan. No guaranty is provided for loans sold under the Freddie Mac or HUD loan programs. | |||||||||||||||||||||||
A summary of our guaranty obligation for the three and nine months ended September 30, 2013 and 2012 is as follows (in thousands): | |||||||||||||||||||||||
For the three months ended | For the nine months ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Beginning balance | $ | 22,735 | $ | 10,746 | $ | 21,155 | $ | 9,921 | |||||||||||||||
Guaranty obligation recognized, following the sale of loan | 1,010 | 1,778 | 4,436 | 3,565 | |||||||||||||||||||
Guaranty obligation recognized, | — | 8,254 | — | 8,254 | |||||||||||||||||||
CWCapital acquisition | |||||||||||||||||||||||
Amortization of guaranty obligation | (983 | ) | (664 | ) | (2,829 | ) | (1,626 | ) | |||||||||||||||
Ending balance | $ | 22,762 | $ | 20,114 | $ | 22,762 | $ | 20,114 | |||||||||||||||
The Company evaluates the allowance for risk-sharing obligations by monitoring the performance of each loan for triggering events or conditions that may signal a potential default. In situations where payment under the guaranty is probable and estimable on a specific loan, the Company records an additional liability for the estimated allowance for risk-sharing through a charge to the provision for risk-sharing obligations in the income statement, along with a write-off of the loan-specific MSR. The amount of the provision reflects our assessment of the likelihood of payment by the borrower, the estimated disposition value of the underlying collateral and the level of risk-sharing. Historically, the loss recognition occurs at or before the loan becoming 60 days delinquent. | |||||||||||||||||||||||
A summary of our allowance for risk-sharing obligations for the three and nine months ended September 30, 2013 and 2012 is as follows (in thousands): | |||||||||||||||||||||||
For the three months ended | For the nine months ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Beginning balance | $ | 12,322 | $ | 13,629 | $ | 15,670 | $ | 14,917 | |||||||||||||||
Provision for risk sharing obligations | (155 | ) | (848 | ) | 997 | 1,126 | |||||||||||||||||
Allowance for risk-sharing obligations, | — | 4,063 | — | 4,063 | |||||||||||||||||||
CWCapital acquisition | |||||||||||||||||||||||
Write-offs (1) | (3,706 | ) | — | (8,206 | ) | (3,262 | ) | ||||||||||||||||
Ending balance | $ | 8,461 | $ | 16,844 | $ | 8,461 | $ | 16,844 | |||||||||||||||
(1) Represents the write-off of the allowance for risk-sharing obligations upon final settlement of the loss sharing amount with Fannie Mae. | |||||||||||||||||||||||
As of September 30, 2013, the maximum quantifiable contingent liability associated with the Company’s guarantees under the Fannie Mae DUS agreement was $3.6 billion. The maximum quantifiable contingent liability is not representative of the actual loss the Company would incur. The Company would be liable for this amount only if all of the loans it services for Fannie Mae, for which the Company retains some risk of loss, were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement. |
Servicing
Servicing | 9 Months Ended |
Sep. 30, 2013 | |
Servicing | ' |
NOTE 8—SERVICING | |
The total unpaid principal balance of loans the Company was servicing for various institutional investors was $38.7 billion as of September 30, 2013 compared to $33.9 billion as of September 30, 2012. |
Warehouse_Notes_Payable
Warehouse Notes Payable | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Warehouse Notes Payable | ' | ||||||||||||
NOTE 9—WAREHOUSE NOTES PAYABLE | |||||||||||||
The maximum borrowing amounts and outstanding balances under the warehouse notes payable as of September 30, 2013 were as follows (in thousands): | |||||||||||||
Facility | Maximum | Outstanding | Interest rate | ||||||||||
Amount | Balance | ||||||||||||
Committed warehouse facility #1 | $ | 575,000 | $ | 170,301 | Average 30-day LIBOR plus 1.50% | ||||||||
Committed warehouse facility #2 | 650,000 | 101,932 | Average 30-day LIBOR plus 1.50% | ||||||||||
Committed warehouse facility #3 | 57,400 | 40,945 | Average 30-day LIBOR plus 2.00% | ||||||||||
Committed warehouse facility #4 | 60,000 | 41,549 | Average 30-day LIBOR plus 2.50% | ||||||||||
Fannie Mae Repurchase agreement, | 500,000 | 75,217 | Average 30-day LIBOR plus 1.15% | ||||||||||
uncommitted line and open maturity | |||||||||||||
Total | $ | 1,842,400 | $ | 429,944 | |||||||||
On April 12, 2013, the Company executed an amendment to the warehousing agreement related to warehouse facility #1, reducing the interest rate under the line to 30-day LIBOR plus 165 basis points. On June 13, 2013, the Company executed an amendment to the warehousing agreement related to warehouse facility #1, reducing the interest rate under the line to 30-day LIBOR plus 150 basis points effective June 1, 2013. On August 30, 2013, the Company executed an amendment to the warehousing agreement related to warehouse facility #1, extending the maturity date of the warehouse line from September 3, 2013 to September 2, 2014. No other material modifications were made to the agreement. | |||||||||||||
On April 2, 2013, the Company executed an amendment to the warehouse agreement related to warehouse facility #2, reducing the interest rate under the line to 30-day LIBOR plus 150 basis points. No other material modifications were made to the agreement. On June 25, 2013 the Company executed an amendment to and restatement of the warehouse agreement related to warehouse facility #2. The amendment and restatement, among other things, increased the borrowing capacity to $650.0 million from $450.0 million and extended the maturity date from September 3, 2013 to June 24, 2014. | |||||||||||||
On July 19, 2013, the Company executed an amendment to the warehouse agreement related to warehouse facility #3, extending the maturity date from July 21, 2013 to September 19, 2013. On August 19, 2013, the Company executed an amendment to the warehouse agreement related to warehouse facility #3, extending the maturity date from September 19, 2013 to September 21, 2014. Additionally, the committed amount was increased from $35.0 million to $57.4 million. The interest rate for advances made on or after July 21, 2013 was reduced from 30-day LIBOR plus 250 basis points to 30-day LIBOR plus 200 basis points. No other material modifications were made to the agreement. | |||||||||||||
On September 24, 2013, the Company executed an amendment to the warehousing agreement related to warehouse facility #4. Among other things, the amendment extended the maturity date of the warehouse line from October 4, 2013 to December 4, 2013 and increased the commitment amount from $50.0 million to $60.0 million. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||||||||||||||||||||||||||
NOTE 10—FAIR VALUE MEASUREMENTS | |||||||||||||||||||||||||||||||||||||||||||||||
The Company uses valuation techniques that are consistent with the market approach, the income approach and/or the cost approach to measure assets and liabilities that are measured at fair value. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, accounting standards establish a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: | |||||||||||||||||||||||||||||||||||||||||||||||
Level 1—Financial assets and liabilities whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. | |||||||||||||||||||||||||||||||||||||||||||||||
Level 2—Financial assets and liabilities whose values are based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. | |||||||||||||||||||||||||||||||||||||||||||||||
Level 3—Financial assets and liabilities whose values are based on inputs that are both unobservable and significant to the overall valuation. | |||||||||||||||||||||||||||||||||||||||||||||||
The Company’s MSRs are measured at fair value on a nonrecurring basis. That is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The Company’s MSRs do not trade in an active, open market with readily observable prices. While sales of MSRs do occur, precise terms and conditions vary with each transaction and are not readily available. Accordingly, the estimated fair value of MSRs was developed using discounted cash flow models that calculate the present value of estimated future net servicing income. The model considers contractually specified servicing fees, prepayment assumptions, delinquency rates, late charges, other ancillary revenue, costs to service and other economic factors. The Company reassesses and periodically adjusts the underlying inputs and assumptions used in the model to reflect observable market conditions and assumptions that a market participant would consider in valuing an MSR asset. MSRs are carried at the lower of amortized cost or estimated fair value. | |||||||||||||||||||||||||||||||||||||||||||||||
A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s assets and liabilities carried at fair value: | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative instruments—The derivative positions consist of interest rate lock commitments and forward sale agreements. These instruments are valued using a discounted cash flow model developed based on changes in the U.S. Treasury rate and other observable market data. The value was determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company and are classified within Level 3 of the valuation hierarchy. | |||||||||||||||||||||||||||||||||||||||||||||||
Loans held for sale—The loans held for sale are reported at fair value. The Company determines the fair value of the loans held for sale using discounted cash flow models that incorporate quoted observable prices from market participants. Therefore, the Company classifies these loans held for sale as Level 2. | |||||||||||||||||||||||||||||||||||||||||||||||
Pledged securities—The pledged securities are valued using quoted market prices from recent trades. Therefore, the Company classifies pledged securities as Level 1. | |||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2013, and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy used to measure fair value (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
Quoted Prices in | Significant | Significant | Balance as of | ||||||||||||||||||||||||||||||||||||||||||||
Active Markets | Other | Other | Period End | ||||||||||||||||||||||||||||||||||||||||||||
For Identical | Observable | Unobservable | |||||||||||||||||||||||||||||||||||||||||||||
Assets | Inputs | Inputs | |||||||||||||||||||||||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||||||
Loans held for sale | $ | — | $ | 365,210 | $ | — | $ | 365,210 | |||||||||||||||||||||||||||||||||||||||
Pledged securities | 45,449 | — | — | 45,449 | |||||||||||||||||||||||||||||||||||||||||||
Derivative assets | — | — | 13,357 | 13,357 | |||||||||||||||||||||||||||||||||||||||||||
Total | $ | 45,449 | $ | 365,210 | $ | 13,357 | $ | 424,016 | |||||||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 8,444 | $ | 8,444 | |||||||||||||||||||||||||||||||||||||||
Total | $ | — | $ | — | $ | 8,444 | $ | 8,444 | |||||||||||||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||||||
Loans held for sale | $ | — | $ | 1,101,561 | $ | — | $ | 1,101,561 | |||||||||||||||||||||||||||||||||||||||
Pledged securities | 33,481 | — | — | 33,481 | |||||||||||||||||||||||||||||||||||||||||||
Derivative assets | — | — | 21,258 | 21,258 | |||||||||||||||||||||||||||||||||||||||||||
Total | $ | 33,481 | $ | 1,101,561 | $ | 21,258 | $ | 1,156,300 | |||||||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 867 | $ | 867 | |||||||||||||||||||||||||||||||||||||||
Total | $ | — | $ | — | $ | 867 | $ | 867 | |||||||||||||||||||||||||||||||||||||||
There were no transfers between any of the levels within the fair value hierarchy during the nine months ended September 30, 2013 and 2012. | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative instruments (Level 3) are outstanding for short periods of time (generally less than 60 days) and are not outstanding for more than one period. | |||||||||||||||||||||||||||||||||||||||||||||||
A roll forward of derivative instruments which require valuations based upon significant unobservable inputs, is presented below for the three and nine months ended September 30, 2013 and 2012 (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||||||
Using Significant | |||||||||||||||||||||||||||||||||||||||||||||||
Unobservable Inputs: | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||||||
Derivative assets and liabilities, net | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 34,336 | $ | 7,602 | $ | 20,391 | $ | 5,415 | |||||||||||||||||||||||||||||||||||||||
Settlements | (74,701 | ) | (40,897 | ) | (166,763 | ) | (92,446 | ) | |||||||||||||||||||||||||||||||||||||||
Realized gains recorded in earnings (1) | 40,365 | 33,295 | 146,372 | 87,031 | |||||||||||||||||||||||||||||||||||||||||||
Unrealized gains recorded in earnings (1) | 4,913 | 20,105 | 4,913 | 20,105 | |||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 4,913 | $ | 20,105 | $ | 4,913 | $ | 20,105 | |||||||||||||||||||||||||||||||||||||||
(1) Realized and unrealized gains from derivatives are recognized in the Gains from mortgage banking activities line item in the Condensed Consolidated Statements of Income. | |||||||||||||||||||||||||||||||||||||||||||||||
The following table presents information about significant unobservable inputs used in the measurement of the fair value of the Company’s Level 3 assets and liabilities (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
Quantitative Information about Level 3 Measurements | |||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Valuation | Unobservable | Input Value (1) | ||||||||||||||||||||||||||||||||||||||||||||
Technique | Input (1) | ||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets | $ | 13,357 | Discounted cash flow | Counterparty credit risk | — | ||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | 8,444 | Discounted cash flow | Counterparty credit risk | — | |||||||||||||||||||||||||||||||||||||||||||
(1) Significant increases (decreases) in this input may lead to significantly lower (higher) fair value measurements. | |||||||||||||||||||||||||||||||||||||||||||||||
The carrying amounts and the fair values of the Company’s financial instruments as of September 30, 2013, and December 31, 2012, are presented below (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||||||||||||||||||||||||||||||||
Amount | Value | Amount | Value | ||||||||||||||||||||||||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 60,968 | $ | 60,968 | $ | 65,027 | $ | 65,027 | |||||||||||||||||||||||||||||||||||||||
Restricted cash | 7,035 | 7,035 | 7,130 | 7,130 | |||||||||||||||||||||||||||||||||||||||||||
Pledged securities | 45,449 | 45,449 | 33,481 | 33,481 | |||||||||||||||||||||||||||||||||||||||||||
Loans held for sale | 365,210 | 365,210 | 1,101,561 | 1,101,561 | |||||||||||||||||||||||||||||||||||||||||||
Loans held for investment | 118,864 | 119,420 | 9,468 | 9,500 | |||||||||||||||||||||||||||||||||||||||||||
Derivative assets | 13,357 | 13,357 | 21,258 | 21,258 | |||||||||||||||||||||||||||||||||||||||||||
Total financial assets | $ | 610,883 | $ | 611,439 | $ | 1,237,925 | $ | 1,237,957 | |||||||||||||||||||||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | 8,444 | $ | 8,444 | $ | 867 | $ | 867 | |||||||||||||||||||||||||||||||||||||||
Warehouse notes payable | 429,944 | 429,944 | 1,084,539 | 1,084,539 | |||||||||||||||||||||||||||||||||||||||||||
Notes payable | 74,700 | 74,700 | 80,925 | 80,925 | |||||||||||||||||||||||||||||||||||||||||||
Total financial liabilities | $ | 513,088 | $ | 513,088 | $ | 1,166,331 | $ | 1,166,331 | |||||||||||||||||||||||||||||||||||||||
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: | |||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents and restricted cash—The carrying amounts, at face value or cost plus accrued interest, approximate fair value because of the short maturity of these instruments (Level 1). | |||||||||||||||||||||||||||||||||||||||||||||||
Pledged securities—Consist of highly liquid investments in commercial paper of AAA rated entities and investments in money market accounts invested in government securities. Investments typically have maturities of 90 days or less, and are valued using quoted market prices from recent trades. | |||||||||||||||||||||||||||||||||||||||||||||||
Loans held for sale—Consist of originated loans that are generally transferred or sold within 60 days from the date that a mortgage loan is funded, and are valued using discounted cash flow models that incorporate observable prices from market participants. | |||||||||||||||||||||||||||||||||||||||||||||||
Loans held for investment—Consist of originated interim loans which the Company expects to hold for investment for periods of up to two years, and are valued using discounted cash flow models that incorporate observable prices from market participants (Level 2). | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative instruments—Consist of interest rate lock commitments and forward sale agreements. These instruments are valued using discounted cash flow models developed based on changes in the U.S. Treasury rate and other observable market data. The value is determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company. | |||||||||||||||||||||||||||||||||||||||||||||||
Warehouse notes payable—Consist of borrowings outstanding under warehouse line agreements. The borrowing rates on the warehouse lines are based upon average 30-day LIBOR plus an applicable margin. The carrying amounts approximate fair value because of the short maturity of these instruments (Level 2). | |||||||||||||||||||||||||||||||||||||||||||||||
Notes payable—Consist of borrowings outstanding under term note agreements. The borrowing rates on the notes payable are based upon average 30-day LIBOR plus an applicable margin. The Company estimates the fair value by discounting the future cash flows of each instrument at market rates (Level 2). | |||||||||||||||||||||||||||||||||||||||||||||||
Fair value of derivative instruments and loans held for sale—In the normal course of business, the Company enters into contractual commitments to originate (purchase) and sell multifamily mortgage loans at fixed prices with fixed expiration dates. The commitments become effective when the borrowers “lock-in” a specified interest rate within time frames established by the Company. All mortgagors are evaluated for creditworthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the “lock-in” of rates by the borrower and the sale date of the loan to an investor. | |||||||||||||||||||||||||||||||||||||||||||||||
To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, the Company’s policy is to enter into a sale commitment with the investor simultaneously with the rate lock commitment with the borrower. The sale contract with the investor locks in an interest rate and price for the sale of the loan. The terms of the contract with the investor and the rate lock with the borrower are matched in substantially all respects, with the objective of eliminating interest rate risk to the extent practical. Sale commitments with the investors have an expiration date that is longer than our related commitments to the borrower to allow, among other things, for the closing of the loan and processing of paperwork to deliver the loan into the sale commitment. | |||||||||||||||||||||||||||||||||||||||||||||||
Both the rate lock commitments to borrowers and the forward sale contracts to buyers are undesignated derivatives and, accordingly, are marked to fair value through the gains on mortgage banking activities line item in the Condensed Consolidated Statements of Income. The fair value of the Company’s rate lock commitments to borrowers and loans held for sale and the related input levels includes, as applicable: | |||||||||||||||||||||||||||||||||||||||||||||||
the assumed gain/loss of the expected resultant loan sale to the buyer; | |||||||||||||||||||||||||||||||||||||||||||||||
the expected net cash flows associated with servicing the loan (Level 2); | |||||||||||||||||||||||||||||||||||||||||||||||
the effects of interest rate movements between the date of the rate lock and the balance sheet date (Level 2); and | |||||||||||||||||||||||||||||||||||||||||||||||
the nonperformance risk of both the counterparty and the Company (Level 3). | |||||||||||||||||||||||||||||||||||||||||||||||
The fair value of the Company’s forward sales contracts to investors considers effects of interest rate movements between the trade date and the balance sheet date (Level 2). The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value. | |||||||||||||||||||||||||||||||||||||||||||||||
The assumed gain/loss considers the amount that the Company has discounted the price to the borrower from par for competitive reasons, if at all, and the expected net cash flows from servicing to be received upon securitization of the loan. The fair value of the expected net cash flows associated with servicing the loan is calculated pursuant to the valuation techniques described previously for mortgage servicing rights. | |||||||||||||||||||||||||||||||||||||||||||||||
To calculate the effects of interest rate movements, the Company uses applicable published U.S. Treasury prices, and multiplies the price movement between the rate lock date and the balance sheet date by the notional loan commitment amount. | |||||||||||||||||||||||||||||||||||||||||||||||
The fair value of the Company’s forward sales contracts to investors considers the market price movement of the same type of security between the trade date and the balance sheet date (Level 2). The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value. | |||||||||||||||||||||||||||||||||||||||||||||||
The fair value of the Company’s interest rate lock commitments and forward sales contracts is adjusted to reflect the risk that the agreement will not be fulfilled. The Company’s exposure to nonperformance in rate lock and forward sale contracts is represented by the contractual amount of those instruments. Given the credit quality of our counterparties, the short duration of interest rate lock commitments and forward sale contracts, and the Company’s historical experience with the agreements, the risk of nonperformance by the Company’s counterparties is not significant. | |||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Adjustment Components | Balance Sheet Location | ||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Notional or | Assumed | Interest Rate | Total | Derivative | Derivative | Fair Value | ||||||||||||||||||||||||||||||||||||||||
Principal | Gain | Movement | Fair Value | Assets | Liabilities | Adjustment | |||||||||||||||||||||||||||||||||||||||||
Amount | on Sale | Effect | Adjustment | To Loans | |||||||||||||||||||||||||||||||||||||||||||
Held for Sale | |||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||
Rate lock commitments | $ | 273,122 | $ | 8,996 | $ | 3,850 | $ | 12,846 | $ | 12,846 | $ | — | $ | — | |||||||||||||||||||||||||||||||||
Forward sale contracts | 620,638 | — | (7,860 | ) | (7,860 | ) | 511 | (8,444 | ) | — | |||||||||||||||||||||||||||||||||||||
Loans held for sale | 347,516 | 13,684 | 4,010 | 17,694 | — | — | 17,694 | ||||||||||||||||||||||||||||||||||||||||
Total | $ | 22,680 | $ | — | $ | 22,680 | $ | 13,357 | $ | (8,444 | ) | $ | 17,694 | ||||||||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||
Rate lock commitments | $ | 302,373 | $ | 11,953 | $ | (1,194 | ) | $ | 10,759 | $ | 10,759 | $ | — | $ | — | ||||||||||||||||||||||||||||||||
Forward sale contracts | 1,380,235 | — | 9,756 | 9,756 | 10,499 | (867 | ) | — | |||||||||||||||||||||||||||||||||||||||
Loans held for sale | 1,077,862 | 32,261 | (8,562 | ) | 23,699 | — | — | 23,699 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 44,214 | $ | — | $ | 44,214 | $ | 21,258 | $ | (867 | ) | $ | 23,699 | ||||||||||||||||||||||||||||||||||
Litigation_Commitments_and_Con
Litigation, Commitments, and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Litigation, Commitments, and Contingencies | ' |
NOTE 11—LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Fannie Mae DUS Related Commitments—Commitments for the origination and subsequent sale and delivery of loans to Fannie Mae represent those mortgage loan transactions where the borrower has locked an interest rate and scheduled closing and the Company has entered into a mandatory delivery commitment to sell the loan to Fannie Mae. As discussed in Note 10, the Company accounts for these commitments as derivatives recorded at fair value. | |
The Company is generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program (the DUS risk-sharing obligations). The Company is required to secure this obligation by assigning restricted cash balances and securities to Fannie Mae. On March 29, 2013, Fannie Mae announced changes to the DUS Capital Standards that are retroactive to January 1, 2013. These changes were as follows: | |
Restricted liquidity requirements for Tier 1 loans were increased from 90 basis points to 110 basis points. The increased reserve requirement must be met immediately. The Company has an insignificant number of Tier 1 loans in its portfolio; therefore, the incremental restrictive liquidity requirement did not have a material impact on the Company’s operations during 2013, and the Company does not expect it to have a material impact on future operations; | |
Restricted liquidity requirements for existing Tier 2 loans were increased from 60 basis points to 75 basis points. The restricted liquidity requirement on new Tier 2 loans will continue to be funded over a 48 month period that begins upon delivery of the loan to Fannie Mae. The restricted liquidity requirement on existing Tier 2 mortgage loans will increase gradually by three basis points per quarter for eight quarters through December 31, 2014. | |
Restricted liquidity held as collateral in the form of US Treasuries experienced a collateral reduction increasing from 0% to 3%, the discount on US Federal Agency Securities increased from 3% to 4%, and the discount on money market funds holding US Treasuries increased from 0% to 5%. As of September 30, 2013, the Company held all of its restricted liquidity in money market funds holding US Treasuries. | |
The Company is in compliance with the September 30, 2013 collateral requirements as outlined above. As of September 30, 2013, reserve requirements for the September 30, 2013 DUS loan portfolio will require the Company to fund $42.0 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio. Fannie Mae will reassess the DUS Capital Standards on or before June 30, 2014. The Company generates sufficient cash flow from its operations to meet these capital standards and does not expect these changes to have a material impact on its future operations; however, future changes to collateral requirements may adversely impact the Company’s available cash. | |
Under the provisions of the DUS agreement, the Company must also maintain a certain level of liquid assets referred to as the operational and unrestricted portions of the required reserves each year. These requirements were satisfied by the Company as of September 30, 2013. | |
Fannie Mae has established benchmark standards for capital adequacy, and reserves the right to terminate the Company’s servicing authority for all or some of the portfolio if at any time it determines that the Company’s financial condition is not adequate to support its obligation under the DUS agreement. The Company is required to maintain acceptable net worth as defined in the agreement, and the Company satisfied the requirements as of September 30, 2013. The net worth requirement is derived primarily from unpaid balances on Fannie Mae loans and the level of risk-sharing. At September 30, 2013, the net worth requirement was $89.8 million and the Company’s net worth was $229.5 million, as defined. As of September 30, 2013, the Company was required to maintain at least $16.9 million of liquid assets to meet our operational liquidity requirements, as defined in the agreements, for Fannie Mae, Freddie Mac, HUD and Ginnie Mae. As of September 30, 2013, the Company had operational liquidity of $69.3 million. | |
Litigation—Capital Funding litigation— On February 17, 2010, Capital Funding Group, Inc. (“Capital Funding”) filed a lawsuit in the Circuit Court for Montgomery County, Maryland against Walker & Dunlop, LLC, our wholly owned subsidiary, for alleged breach of contract, unjust enrichment and unfair competition arising out of an alleged agreement that Capital Funding had with Column Guaranteed, LLC (“Column”) to refinance a large portfolio of senior healthcare facilities located throughout the United States (the “Golden Living Facilities”). Capital Funding alleges that a contract existed between it and Column (and its affiliates) whereby Capital Funding allegedly had the right to perform the HUD refinancing for the Golden Living Facilities and according to which Capital Funding provided certain alleged proprietary information to Column and its affiliates relating to the acquisition of the Golden Living Facilities on a confidential basis. Capital Funding further alleges that Walker & Dunlop, LLC, as the alleged successor by merger to Column, is bound by Column’s alleged agreement with Capital Funding, and breached the agreement by taking for itself the opportunity to perform the HUD refinancing for the Golden Living Facilities. | |
Capital Funding further claims that Column and its affiliates and Walker & Dunlop, LLC breached the contract, were unjustly enriched, and committed unfair competition by using Capital Funding’s alleged proprietary information for certain allegedly unauthorized purposes. Capital Funding also asserts a separate unfair competition claim against Walker & Dunlop, LLC in which it alleges that Walker & Dunlop, LLC is improperly “taking credit” on its website for certain work actually performed by Capital Funding. Capital Funding seeks damages in excess of $30 million on each of the three claims asserted against all defendants, and an unspecified amount of damages on the separate claim for unfair competition against Walker & Dunlop, LLC. Capital Funding also seeks injunctive relief in connection with its unjust enrichment and unfair competition claims. | |
Pursuant to an agreement, dated January 30, 2009 (the “Column Transaction Agreement”), among Column, Walker & Dunlop, LLC, W&D, Inc. and Green Park, Column generally agreed to indemnify Walker & Dunlop, LLC against liability arising from Column’s conduct prior to Column’s transfer of the assets to Walker & Dunlop, LLC. However, pursuant to the Column Transaction Agreement, Column’s indemnification obligation arises only after Column receives a claim notice following the resolution of the litigation that specifies the amount of Walker & Dunlop, LLC’s claim. | |
To provide for greater certainty regarding Column’s indemnification obligations before the resolution of this litigation and to cap our total loss exposure, the Company secured a further agreement from Column in November 2010 confirming that it will indemnify the Company for any liabilities that arise as a result of this litigation. As part of this further indemnification agreement, in the event Column is required to pay the Company for any liabilities under the Capital Funding litigation that it otherwise would not have been obligated to pay under the Column Transaction Agreement, the Company will indemnify Column for an amount up to $3.0 million. Also as part of this further indemnification agreement, William Walker, our Chairman, President and Chief Executive Officer, and Mallory Walker, former Chairman and current stockholder, in their individual capacities, agreed that if Column is required to indemnify the Company under this agreement and otherwise would not have been obligated to pay such amounts under the Column Transaction Agreement, Messrs. William Walker and Mallory Walker will pay any such amounts in excess of $3.0 million but equal to or less than $6.0 million. As a result of this agreement, the Company will have no liability or other obligation for any damage amounts in excess of $3.0 million arising out of this litigation. Although Column has assumed defense of the case for all defendants, and is paying applicable counsel fees, as a result of the indemnification claim procedures described above, the Company could be required to bear the significant costs of the litigation and any adverse judgment unless and until the Company is able to prevail on our indemnification claim. The Company believes that it will fully prevail on its indemnification claims against Column, and that the Company ultimately will incur no material loss as a result of this litigation, although there can be no assurance that this will be the case. Accordingly, we have not recorded a loss contingency for this litigation. | |
On July 19, 2011, the Circuit Court for Montgomery County, Maryland issued an order granting the defendants’ motion to dismiss the case without prejudice. After the initial case was dismissed without prejudice, Capital Funding filed an amended complaint. In November 2011, the Circuit Court for Montgomery County, Maryland rejected the Company’s motion to dismiss the amended complaint. Capital Funding filed a Second Amended Complaint that did not alter the claims at issue but revised their alleged damages. Defendants moved for summary judgment on all claims, including two counts of breach of contract, two counts of promissory estoppel, two counts of unjust enrichment, and two counts of unfair competition. On April 30, 2013, the Court issued an Opinion and Order which granted the motion as to the promissory estoppel counts and one count of unjust enrichment. The court denied the motion as to all remaining claims. | |
A two-week jury trial was held in July 2013. In the course of the trial, all but two of Capital Funding’s claims were dismissed. The jury awarded Capital Funding (i) a $1.75 million judgment against defendants on Capital Funding’s breach of contract claim and (ii) a $10.4 million judgment against Credit Suisse Securities (USA) LLC (“Credit Suisse”), Column’s parent, on Capital Funding’s unjust enrichment claim. Because the two claims cover the same facts, Capital Funding agreed it can only collect on one of the judgments, and it has elected to collect only the $10.4 million judgment against Credit Suisse. Therefore, the Company would have no exposure. Final judgment has been entered, and briefing on defendants’ post judgment motion to reduce or set aside the judgment has been completed. We expect the Court will schedule a hearing on the post judgment motion in the coming weeks. The judgment will remain subject to possible appeal. The Company believes that Column’s indemnification fully covers the judgment. | |
The Company cannot predict the outcome of any pending litigation and may be subject to consequences that could include fines, penalties and other costs, and our reputation and business may be impacted. The Company’s management believes that any liability that could be imposed on the Company in connection with the disposition of any pending lawsuits would not have a material adverse effect on our business, results of operations, liquidity or financial condition. | |
In the normal course of business, the Company may be party to various claims and litigation, none of which the Company believes is material. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||
Earnings Per Share | ' | |||||||||||||||||||||||||
NOTE 12—EARNINGS PER SHARE | ||||||||||||||||||||||||||
The following weighted average shares and share equivalents are used to calculate basic and diluted earnings per share for the three and nine months ended September 30, 2013 and 2012: | ||||||||||||||||||||||||||
For the three months ended | For the nine months ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||
Weighted average number of shares outstanding used to calculate basic earnings per share | 33,859,453 | 25,091,153 | 33,710,837 | 22,881,795 | ||||||||||||||||||||||
Dilutive securities | ||||||||||||||||||||||||||
Unvested restricted shares | 523,522 | 352,448 | 604,677 | 220,037 | ||||||||||||||||||||||
Weighted average number of shares and share equivalents outstanding used to calculate diluted earnings per share | 34,382,975 | 25,443,601 | 34,315,514 | 23,101,832 | ||||||||||||||||||||||
The assumed proceeds under the treasury method used for calculating the dilutive impact of restricted stock awards includes the unrecognized compensation costs and excess tax benefits associated with the awards. Average options issued under the 2010 Equity Incentive Plan to purchase 63,667 and 161,788 shares of common stock were outstanding during the three months ended September 30, 2013 and 2012, respectively, but were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive. During the three months ended September 30, 2013 and 2012, 0 and 161,788 average restricted shares were outstanding, respectively, but were not included in the computation of dilutive earnings per share because the effect would have been anti-dilutive. | ||||||||||||||||||||||||||
Average options issued under the 2010 Equity Incentive Plan to purchase 87,886 and 161,788 shares of common stock were outstanding during the nine months ended September 30, 2013 and 2012, respectively, but were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive. During the nine months ended September 30, 2013 and 2012, 0 and 161,788 average restricted shares were outstanding, respectively, but were not included in the computation of dilutive earnings per share because the effect would have been anti-dilutive. |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||||||||||||||||||
NOTE 13—STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||
A summary of changes in stockholders’ equity is presented below (dollars in thousands): | |||||||||||||||||||||||||||||||||
Common Stock | Additional | Retained | Total | ||||||||||||||||||||||||||||||
Paid-In | Earnings | Stockholders’ | |||||||||||||||||||||||||||||||
Capital | Equity | ||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||
Balances at December 31, 2012 | 33,567,730 | $ | 336 | $ | 236,823 | $ | 116,017 | $ | 353,176 | ||||||||||||||||||||||||
Net income | — | — | — | 30,324 | 30,324 | ||||||||||||||||||||||||||||
Issuance of common shares in connection with equity incentive plans | 466,792 | 3 | 1,186 | — | 1,189 | ||||||||||||||||||||||||||||
Repurchase and retirement of common stock | (128,970 | ) | — | (2,318 | ) | — | (2,318 | ) | |||||||||||||||||||||||||
Stock-based compensation | — | — | 6,846 | — | 6,846 | ||||||||||||||||||||||||||||
Tax benefit from vesting of restricted shares | — | — | 1,253 | — | 1,253 | ||||||||||||||||||||||||||||
Balances at September 30, 2013 | 33,905,552 | $ | 339 | $ | 243,790 | $ | 146,341 | $ | 390,470 | ||||||||||||||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Principles of Consolidation | ' | |||||||||||||||||||
Principles of Consolidation—The condensed consolidated financial statements include the accounts of the Company and all of its consolidated entities. All material intercompany transactions have been eliminated. The Company has evaluated all subsequent events. | ||||||||||||||||||||
Use of Estimates | ' | |||||||||||||||||||
Use of Estimates—The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, including guaranty obligations, capitalized mortgage servicing rights, derivative instruments and hedging relationships, and the disclosure of contingent assets and liabilities. Actual results may vary from these estimates. | ||||||||||||||||||||
Comprehensive Income | ' | |||||||||||||||||||
Comprehensive Income—For the three and nine months ended September 30, 2013 and 2012, comprehensive income equaled net income; therefore, a separate statement of comprehensive income is not included in the accompanying condensed consolidated financial statements. | ||||||||||||||||||||
Loans Held for Investment | ' | |||||||||||||||||||
Loans Held for Investment—Loans held for investment are interim loans originated by the Company through the Program. The loans are carried at their unpaid principal balances adjusted for net unamortized loan fees and costs, and net of any allowance for loan losses. Interest income is accrued based on the actual coupon rate and is recognized as revenue when earned and deemed collectible. | ||||||||||||||||||||
The Company uses the interest method to determine an effective yield to amortize the loan fees and costs on real estate loans held for investment. All loans held for investment are floating-rate loans; therefore, the Company uses the initial coupon interest rate of the loans (without regard to future changes in the underlying indices) and anticipated principal payments, if any, to determine periodic amortization. | ||||||||||||||||||||
The Company will reclassify loans held-for-investment as loans held-for-sale if it determines that the loans will be sold or transferred to third parties. | ||||||||||||||||||||
The Company monitors the financial condition of the borrower and the financial trends of the underlying property for each of its loans held for investment to assess the credit quality of the loan. None of the loans held for investment was delinquent as of September 30, 2013 or December 31, 2012. Additionally, we have not experienced any losses or delinquencies of 15 days or more related to these loans since the inception of the Program. No allowance for loan losses related to these loans was recorded as of September 30, 2013 or December 31, 2012. | ||||||||||||||||||||
Net Warehouse Interest Income | ' | |||||||||||||||||||
Net Warehouse Interest Income—The Company presents warehouse interest income net of warehouse interest expense. Warehouse interest income is the interest earned from loans that are held for sale and those held for investment. Substantially all loans that are held for sale are financed with matched borrowings under our warehouse facilities incurred to fund a specific loan held for sale. Additionally, a substantial portion of loans held for investment is match funded. Warehouse interest expense is incurred on borrowings used to fund loans solely while they are held for sale or for investment. Warehouse interest income and expense are earned or incurred on loans held for sale after a loan is closed and before a loan is sold. Warehouse interest income and expense are earned or incurred on loans held for investment after a loan is closed and before a loan is repaid. | ||||||||||||||||||||
Included in net warehouse interest income for the three and nine months ended September 30, 2013 and 2012 are the following components (in thousands): | ||||||||||||||||||||
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Warehouse interest income | $ | 4,877 | $ | 4,169 | $ | 15,083 | $ | 9,722 | ||||||||||||
Warehouse interest expense | (3,094 | ) | (2,921 | ) | (9,917 | ) | (6,463 | ) | ||||||||||||
Net warehouse interest income | $ | 1,783 | $ | 1,248 | $ | 5,166 | $ | 3,259 | ||||||||||||
Recently Issued Accounting Pronouncements | ' | |||||||||||||||||||
Recently Issued Accounting Pronouncements—There were no accounting pronouncements issued during the third quarter of 2013 that have the potential to impact the Company. All other recently issued accounting pronouncements and their expected impact to the Company have been disclosed previously. | ||||||||||||||||||||
There have been no material changes to the accounting policies discussed in Note 2 of the Company’s 2012 Form 10-K. | ||||||||||||||||||||
The Company has made certain immaterial reclassifications to prior-year balances to conform to current-year presentation. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Schedule of Net Warehouse Interest Income | ' | |||||||||||||||||||
Included in net warehouse interest income for the three and nine months ended September 30, 2013 and 2012 are the following components (in thousands): | ||||||||||||||||||||
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Warehouse interest income | $ | 4,877 | $ | 4,169 | $ | 15,083 | $ | 9,722 | ||||||||||||
Warehouse interest expense | (3,094 | ) | (2,921 | ) | (9,917 | ) | (6,463 | ) | ||||||||||||
Net warehouse interest income | $ | 1,783 | $ | 1,248 | $ | 5,166 | $ | 3,259 | ||||||||||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill Activity | ' | |||||||||||||||||||||||||||||||||||||
The following summarizes the changes in the carrying amount of the Company’s goodwill for the nine months ended September 30, 2013 (in thousands): | ||||||||||||||||||||||||||||||||||||||
For the nine months ended, | ||||||||||||||||||||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 59,735 | ||||||||||||||||||||||||||||||||||||
Goodwill related to the Acquisition | — | |||||||||||||||||||||||||||||||||||||
Retrospective adjustments | 477 | |||||||||||||||||||||||||||||||||||||
Impairment | — | |||||||||||||||||||||||||||||||||||||
Ending balance | $ | 60,212 | ||||||||||||||||||||||||||||||||||||
Schedule of other intangible assets | ' | |||||||||||||||||||||||||||||||||||||
The following summarizes the Company’s other intangible assets, including those related to the Acquisition (in thousands): | ||||||||||||||||||||||||||||||||||||||
As of September 30, 2013 | As of December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Gross carrying | Accumulated | Net carrying | Gross carrying | Accumulated | Net carrying | |||||||||||||||||||||||||||||||||
value | amortization | value | value | amortization | value | |||||||||||||||||||||||||||||||||
Mortgage pipeline intangible asset | $ | 18,700 | $ | (17,945 | ) | $ | 755 | $ | 18,700 | $ | (15,182 | ) | $ | 3,518 | ||||||||||||||||||||||||
Acquired mortgage servicing rights | 124,629 | (28,716 | ) | 95,913 | 124,629 | (8,503 | ) | 116,126 | ||||||||||||||||||||||||||||||
Originated mortgage servicing rights | 344,556 | (95,570 | ) | 248,986 | 277,328 | (77,930 | ) | 199,398 | ||||||||||||||||||||||||||||||
Total | $ | 487,885 | $ | (142,231 | ) | $ | 345,654 | $ | 420,657 | $ | (101,615 | ) | $ | 319,042 | ||||||||||||||||||||||||
Gains_from_Mortgage_Banking_Ac1
Gains from Mortgage Banking Activities (Tables) | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||
Schedule of Gains from Mortgage Banking Activities | ' | |||||||||||||||||||||||
The gains from mortgage banking activities consisted of the following activity for the three and nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||||||||||||||||||
For the three months ended | For the nine months ended | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Contractual loan origination related fees, net | $ | 23,816 | $ | 27,674 | $ | 80,669 | $ | 55,045 | ||||||||||||||||
Fair value of expected future cash flows from servicing recognized at commitment | 22,671 | 27,237 | 74,488 | 55,404 | ||||||||||||||||||||
Fair value of expected guaranty obligation | (1,209 | ) | (1,511 | ) | (3,872 | ) | (3,313 | ) | ||||||||||||||||
Total gains from mortgage banking activities | $ | 45,278 | $ | 53,400 | $ | 151,285 | $ | 107,136 | ||||||||||||||||
Mortgage_Servicing_Rights_Tabl
Mortgage Servicing Rights (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Schedule of Activity Related to Capitalized MSRs | ' | |||||||||||||||||||
Activity related to capitalized MSRs for the three and nine months ended September 30, 2013 and 2012 was as follows (in thousands): | ||||||||||||||||||||
For the three months ended | For the nine months ended | |||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Beginning balance | $ | 341,770 | $ | 149,533 | $ | 315,524 | $ | 137,079 | ||||||||||||
Additions, following the sale of loan | 22,991 | 24,585 | 85,286 | 51,449 | ||||||||||||||||
Additions, CWCapital acquisition | — | 130,543 | — | 130,543 | ||||||||||||||||
Amortization | (16,201 | ) | (9,228 | ) | (47,144 | ) | (22,279 | ) | ||||||||||||
Pre-payments and write-offs | (3,661 | ) | (729 | ) | (8,767 | ) | (2,088 | ) | ||||||||||||
Ending balance | $ | 344,899 | $ | 294,704 | $ | 344,899 | $ | 294,704 | ||||||||||||
Schedule of Expected Amortization of MSR | ' | |||||||||||||||||||
The expected amortization of MSR balances recorded as of September 30, 2013 is shown in the table below (in thousands). Actual amortization may vary from these estimates. | ||||||||||||||||||||
Three Months Ending December 31, | Originated MSRs | Acquired MSRs | Total MSRs | |||||||||||||||||
Amortization | Amortization | Amortization | ||||||||||||||||||
2013 | $ | 11,266 | $ | 4,872 | $ | 16,138 | ||||||||||||||
Year Ending December 31, | ||||||||||||||||||||
2014 | 42,958 | 18,726 | 61,684 | |||||||||||||||||
2015 | 37,721 | 17,316 | 55,037 | |||||||||||||||||
2016 | 34,556 | 16,026 | 50,582 | |||||||||||||||||
2017 | 31,443 | 14,117 | 45,560 | |||||||||||||||||
2018 | 27,122 | 10,226 | 37,348 | |||||||||||||||||
Thereafter | 63,920 | 14,630 | 78,550 | |||||||||||||||||
Total | $ | 248,986 | $ | 95,913 | $ | 344,899 | ||||||||||||||
Guaranty_Obligation_and_Allowa1
Guaranty Obligation and Allowance for Risk-Sharing Obligations (Tables) | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Summary of Guarantee Obligation | ' | ||||||||||||||||||||||
A summary of our guaranty obligation for the three and nine months ended September 30, 2013 and 2012 is as follows (in thousands): | |||||||||||||||||||||||
For the three months ended | For the nine months ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Beginning balance | $ | 22,735 | $ | 10,746 | $ | 21,155 | $ | 9,921 | |||||||||||||||
Guaranty obligation recognized, following the sale of loan | 1,010 | 1,778 | 4,436 | 3,565 | |||||||||||||||||||
Guaranty obligation recognized, | — | 8,254 | — | 8,254 | |||||||||||||||||||
CWCapital acquisition | |||||||||||||||||||||||
Amortization of guaranty obligation | (983 | ) | (664 | ) | (2,829 | ) | (1,626 | ) | |||||||||||||||
Ending balance | $ | 22,762 | $ | 20,114 | $ | 22,762 | $ | 20,114 | |||||||||||||||
Summary of Allowance for Risk-Sharing Obligations | ' | ||||||||||||||||||||||
A summary of our allowance for risk-sharing obligations for the three and nine months ended September 30, 2013 and 2012 is as follows (in thousands): | |||||||||||||||||||||||
For the three months ended | For the nine months ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Beginning balance | $ | 12,322 | $ | 13,629 | $ | 15,670 | $ | 14,917 | |||||||||||||||
Provision for risk sharing obligations | (155 | ) | (848 | ) | 997 | 1,126 | |||||||||||||||||
Allowance for risk-sharing obligations, | — | 4,063 | — | 4,063 | |||||||||||||||||||
CWCapital acquisition | |||||||||||||||||||||||
Write-offs (1) | (3,706 | ) | — | (8,206 | ) | (3,262 | ) | ||||||||||||||||
Ending balance | $ | 8,461 | $ | 16,844 | $ | 8,461 | $ | 16,844 | |||||||||||||||
Warehouse_Notes_Payable_Tables
Warehouse Notes Payable (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Schedule of Maximum Borrowing Amounts and Outstanding Balances Under the Warehouse Notes payable | ' | ||||||||||||
The maximum borrowing amounts and outstanding balances under the warehouse notes payable as of September 30, 2013 were as follows (in thousands): | |||||||||||||
Facility | Maximum | Outstanding | Interest rate | ||||||||||
Amount | Balance | ||||||||||||
Committed warehouse facility #1 | $ | 575,000 | $ | 170,301 | Average 30-day LIBOR plus 1.50% | ||||||||
Committed warehouse facility #2 | 650,000 | 101,932 | Average 30-day LIBOR plus 1.50% | ||||||||||
Committed warehouse facility #3 | 57,400 | 40,945 | Average 30-day LIBOR plus 2.00% | ||||||||||
Committed warehouse facility #4 | 60,000 | 41,549 | Average 30-day LIBOR plus 2.50% | ||||||||||
Fannie Mae Repurchase agreement, | 500,000 | 75,217 | Average 30-day LIBOR plus 1.15% | ||||||||||
uncommitted line and open maturity | |||||||||||||
Total | $ | 1,842,400 | $ | 429,944 | |||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||
Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis | ' | ||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2013, and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy used to measure fair value (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
Quoted Prices in | Significant | Significant | Balance as of | ||||||||||||||||||||||||||||||||||||||||||||
Active Markets | Other | Other | Period End | ||||||||||||||||||||||||||||||||||||||||||||
For Identical | Observable | Unobservable | |||||||||||||||||||||||||||||||||||||||||||||
Assets | Inputs | Inputs | |||||||||||||||||||||||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||||||
Loans held for sale | $ | — | $ | 365,210 | $ | — | $ | 365,210 | |||||||||||||||||||||||||||||||||||||||
Pledged securities | 45,449 | — | — | 45,449 | |||||||||||||||||||||||||||||||||||||||||||
Derivative assets | — | — | 13,357 | 13,357 | |||||||||||||||||||||||||||||||||||||||||||
Total | $ | 45,449 | $ | 365,210 | $ | 13,357 | $ | 424,016 | |||||||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 8,444 | $ | 8,444 | |||||||||||||||||||||||||||||||||||||||
Total | $ | — | $ | — | $ | 8,444 | $ | 8,444 | |||||||||||||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||||||
Loans held for sale | $ | — | $ | 1,101,561 | $ | — | $ | 1,101,561 | |||||||||||||||||||||||||||||||||||||||
Pledged securities | 33,481 | — | — | 33,481 | |||||||||||||||||||||||||||||||||||||||||||
Derivative assets | — | — | 21,258 | 21,258 | |||||||||||||||||||||||||||||||||||||||||||
Total | $ | 33,481 | $ | 1,101,561 | $ | 21,258 | $ | 1,156,300 | |||||||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 867 | $ | 867 | |||||||||||||||||||||||||||||||||||||||
Total | $ | — | $ | — | $ | 867 | $ | 867 | |||||||||||||||||||||||||||||||||||||||
Schedule of Roll Forward of Derivative Instruments Which Require Valuations Based upon Significant Unobservable Inputs | ' | ||||||||||||||||||||||||||||||||||||||||||||||
A roll forward of derivative instruments which require valuations based upon significant unobservable inputs, is presented below for the three and nine months ended September 30, 2013 and 2012 (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||||||
Using Significant | |||||||||||||||||||||||||||||||||||||||||||||||
Unobservable Inputs: | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||||||
Derivative assets and liabilities, net | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 34,336 | $ | 7,602 | $ | 20,391 | $ | 5,415 | |||||||||||||||||||||||||||||||||||||||
Settlements | (74,701 | ) | (40,897 | ) | (166,763 | ) | (92,446 | ) | |||||||||||||||||||||||||||||||||||||||
Realized gains recorded in earnings (1) | 40,365 | 33,295 | 146,372 | 87,031 | |||||||||||||||||||||||||||||||||||||||||||
Unrealized gains recorded in earnings (1) | 4,913 | 20,105 | 4,913 | 20,105 | |||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 4,913 | $ | 20,105 | $ | 4,913 | $ | 20,105 | |||||||||||||||||||||||||||||||||||||||
(1) Realized and unrealized gains from derivatives are recognized in the Gains from mortgage banking activities line item in the Condensed Consolidated Statements of Income. | |||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Significant Unobservable Inputs Used in the Measurement of the Fair Value of Level 3 Assets and Liabilities | ' | ||||||||||||||||||||||||||||||||||||||||||||||
The following table presents information about significant unobservable inputs used in the measurement of the fair value of the Company’s Level 3 assets and liabilities (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
Quantitative Information about Level 3 Measurements | |||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Valuation | Unobservable | Input Value (1) | ||||||||||||||||||||||||||||||||||||||||||||
Technique | Input (1) | ||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets | $ | 13,357 | Discounted cash flow | Counterparty credit risk | — | ||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | 8,444 | Discounted cash flow | Counterparty credit risk | — | |||||||||||||||||||||||||||||||||||||||||||
(1) Significant increases (decreases) in this input may lead to significantly lower (higher) fair value measurements. | |||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Amounts and the Fair Values of the Company's Financial Instruments | ' | ||||||||||||||||||||||||||||||||||||||||||||||
The carrying amounts and the fair values of the Company’s financial instruments as of September 30, 2013, and December 31, 2012, are presented below (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||||||||||||||||||||||||||||||||
Amount | Value | Amount | Value | ||||||||||||||||||||||||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 60,968 | $ | 60,968 | $ | 65,027 | $ | 65,027 | |||||||||||||||||||||||||||||||||||||||
Restricted cash | 7,035 | 7,035 | 7,130 | 7,130 | |||||||||||||||||||||||||||||||||||||||||||
Pledged securities | 45,449 | 45,449 | 33,481 | 33,481 | |||||||||||||||||||||||||||||||||||||||||||
Loans held for sale | 365,210 | 365,210 | 1,101,561 | 1,101,561 | |||||||||||||||||||||||||||||||||||||||||||
Loans held for investment | 118,864 | 119,420 | 9,468 | 9,500 | |||||||||||||||||||||||||||||||||||||||||||
Derivative assets | 13,357 | 13,357 | 21,258 | 21,258 | |||||||||||||||||||||||||||||||||||||||||||
Total financial assets | $ | 610,883 | $ | 611,439 | $ | 1,237,925 | $ | 1,237,957 | |||||||||||||||||||||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | 8,444 | $ | 8,444 | $ | 867 | $ | 867 | |||||||||||||||||||||||||||||||||||||||
Warehouse notes payable | 429,944 | 429,944 | 1,084,539 | 1,084,539 | |||||||||||||||||||||||||||||||||||||||||||
Notes payable | 74,700 | 74,700 | 80,925 | 80,925 | |||||||||||||||||||||||||||||||||||||||||||
Total financial liabilities | $ | 513,088 | $ | 513,088 | $ | 1,166,331 | $ | 1,166,331 | |||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Derivative Instruments and Loans Held for Sale | ' | ||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Adjustment Components | Balance Sheet Location | ||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Notional or | Assumed | Interest Rate | Total | Derivative | Derivative | Fair Value | ||||||||||||||||||||||||||||||||||||||||
Principal | Gain | Movement | Fair Value | Assets | Liabilities | Adjustment | |||||||||||||||||||||||||||||||||||||||||
Amount | on Sale | Effect | Adjustment | To Loans | |||||||||||||||||||||||||||||||||||||||||||
Held for Sale | |||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||
Rate lock commitments | $ | 273,122 | $ | 8,996 | $ | 3,850 | $ | 12,846 | $ | 12,846 | $ | — | $ | — | |||||||||||||||||||||||||||||||||
Forward sale contracts | 620,638 | — | (7,860 | ) | (7,860 | ) | 511 | (8,444 | ) | — | |||||||||||||||||||||||||||||||||||||
Loans held for sale | 347,516 | 13,684 | 4,010 | 17,694 | — | — | 17,694 | ||||||||||||||||||||||||||||||||||||||||
Total | $ | 22,680 | $ | — | $ | 22,680 | $ | 13,357 | $ | (8,444 | ) | $ | 17,694 | ||||||||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||
Rate lock commitments | $ | 302,373 | $ | 11,953 | $ | (1,194 | ) | $ | 10,759 | $ | 10,759 | $ | — | $ | — | ||||||||||||||||||||||||||||||||
Forward sale contracts | 1,380,235 | — | 9,756 | 9,756 | 10,499 | (867 | ) | — | |||||||||||||||||||||||||||||||||||||||
Loans held for sale | 1,077,862 | 32,261 | (8,562 | ) | 23,699 | — | — | 23,699 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 44,214 | $ | — | $ | 44,214 | $ | 21,258 | $ | (867 | ) | $ | 23,699 | ||||||||||||||||||||||||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||
Schedule of Weighted Average Shares and Share Equivalents that are Used to Calculate Basic and Diluted Earnings Per Share | ' | |||||||||||||||||||||||||
The following weighted average shares and share equivalents are used to calculate basic and diluted earnings per share for the three and nine months ended September 30, 2013 and 2012: | ||||||||||||||||||||||||||
For the three months ended | For the nine months ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||
Weighted average number of shares outstanding used to calculate basic earnings per share | 33,859,453 | 25,091,153 | 33,710,837 | 22,881,795 | ||||||||||||||||||||||
Dilutive securities | ||||||||||||||||||||||||||
Unvested restricted shares | 523,522 | 352,448 | 604,677 | 220,037 | ||||||||||||||||||||||
Weighted average number of shares and share equivalents outstanding used to calculate diluted earnings per share | 34,382,975 | 25,443,601 | 34,315,514 | 23,101,832 | ||||||||||||||||||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||
Summary of Changes in Stockholders' Equity | ' | ||||||||||||||||||||||||||||||||
A summary of changes in stockholders’ equity is presented below (dollars in thousands): | |||||||||||||||||||||||||||||||||
Common Stock | Additional | Retained | Total | ||||||||||||||||||||||||||||||
Paid-In | Earnings | Stockholders’ | |||||||||||||||||||||||||||||||
Capital | Equity | ||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||
Balances at December 31, 2012 | 33,567,730 | $ | 336 | $ | 236,823 | $ | 116,017 | $ | 353,176 | ||||||||||||||||||||||||
Net income | — | — | — | 30,324 | 30,324 | ||||||||||||||||||||||||||||
Issuance of common shares in connection with equity incentive plans | 466,792 | 3 | 1,186 | — | 1,189 | ||||||||||||||||||||||||||||
Repurchase and retirement of common stock | (128,970 | ) | — | (2,318 | ) | — | (2,318 | ) | |||||||||||||||||||||||||
Stock-based compensation | — | — | 6,846 | — | 6,846 | ||||||||||||||||||||||||||||
Tax benefit from vesting of restricted shares | — | — | 1,253 | — | 1,253 | ||||||||||||||||||||||||||||
Balances at September 30, 2013 | 33,905,552 | $ | 339 | $ | 243,790 | $ | 146,341 | $ | 390,470 | ||||||||||||||||||||||||
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation (Details) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | ||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 04, 2012 | Sep. 04, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 04, 2012 |
state | ARA Finance LLC | CW Capital LLC | Maximum | Minimum | Interim loan program | Bridge Loan | Bridge Loan | ARA Finco LLC | |
Maximum | Maximum | ARA Finance LLC | |||||||
ORGANIZATION AND BASIS OF PRESENTATION | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of states in which the entity is approved as a Freddie Mac Program Plus lender | 22 | ' | ' | ' | ' | ' | ' | ' | ' |
Loan term (in years) | ' | ' | ' | ' | ' | '2 years | ' | '3 years | ' |
Interim loans principal balances | ' | ' | ' | $30 | ' | ' | ' | ' | ' |
Loans originated during the period | 109.9 | ' | ' | ' | ' | ' | ' | ' | ' |
Origination of all loans outstanding | ' | ' | ' | '18 months | ' | ' | ' | ' | ' |
Loan for bridge program | ' | ' | ' | ' | 30 | ' | ' | ' | ' |
Percentage of ownership | ' | 50.00% | ' | ' | ' | ' | 5.00% | ' | ' |
Secured Borrowings | 19.8 | ' | ' | ' | ' | ' | ' | ' | ' |
ACQUISITION OF CWCAPITAL LLC | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total consideration transferred | ' | ' | 231.1 | ' | ' | ' | ' | ' | ' |
Purchase consideration paid in cash | ' | ' | 80 | ' | ' | ' | ' | ' | ' |
Shares issuable under purchase consideration | ' | ' | 11.6 | ' | ' | ' | ' | ' | ' |
Purchase consideration paid through the issuance of shares | ' | ' | $151.10 | ' | ' | ' | ' | ' | ' |
Percentage of ownership | ' | 50.00% | ' | ' | ' | ' | 5.00% | ' | ' |
Percentage of ownership by joint venture | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net warehouse interest income | ' | ' | ' | ' |
Warehouse interest income | $4,877 | $4,169 | $15,083 | $9,722 |
Warehouse interest expense | -3,094 | -2,921 | -9,917 | -6,463 |
Net warehouse interest income | $1,783 | $1,248 | $5,166 | $3,259 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Additional Information (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Summary of Significant Accounting Policies | ' | ' |
Allowance for loan losses related to loans held for investment | $0 | $0 |
Acquisition_of_CWCapital_LLC_A
Acquisition of CWCapital LLC - Additional Information (Details) (CW Capital LLC, USD $) | 0 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 04, 2012 | Sep. 30, 2013 |
CW Capital LLC | ' | ' |
ACQUISITION OF CWCAPITAL LLC | ' | ' |
Total consideration transferred | $231.10 | ' |
Purchase consideration paid in cash | 80 | ' |
Shares issuable under purchase consideration | 11.6 | ' |
Purchase consideration paid through the issuance of shares | 151.1 | ' |
Goodwill | $60.20 | ' |
Expected tax deductible term for goodwill | ' | '15 years |
Recovered_Sheet1
Goodwill And Other Intangible Assets - Schedule of Goodwill Activity (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Goodwill activity | ' |
Beginning balance | $59,735 |
Goodwill related to the Acquisition | ' |
Retrospective adjustments | 477 |
Impairment | ' |
Ending balance | $60,212 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Details1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Acquired Finite Lived Intangible Assets [Line Items] | ' | ' |
Gross carrying value | $487,885 | $420,657 |
Accumulated amortization | -142,231 | -101,615 |
Net carrying value | 345,654 | 319,042 |
Mortgage pipeline intangible asset | ' | ' |
Acquired Finite Lived Intangible Assets [Line Items] | ' | ' |
Gross carrying value | 18,700 | 18,700 |
Accumulated amortization | -17,945 | -15,182 |
Net carrying value | 755 | 3,518 |
Acquired Mortgage Servicing Rights | ' | ' |
Acquired Finite Lived Intangible Assets [Line Items] | ' | ' |
Gross carrying value | 124,629 | 124,629 |
Accumulated amortization | -28,716 | -8,503 |
Net carrying value | 95,913 | 116,126 |
Originated Mortgage Servicing Rights | ' | ' |
Acquired Finite Lived Intangible Assets [Line Items] | ' | ' |
Gross carrying value | 344,556 | 277,328 |
Accumulated amortization | -95,570 | -77,930 |
Net carrying value | $248,986 | $199,398 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets - Additional Information (Mortgage pipeline intangible asset, Maximum) | 9 Months Ended |
Sep. 30, 2013 | |
Mortgage pipeline intangible asset | Maximum | ' |
Acquired Finite Lived Intangible Assets [Line Items] | ' |
Weighted average remaining lives | '9 months |
Gains_from_Mortgage_Banking_Ac2
Gains from Mortgage Banking Activities (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Gains from Mortgage Banking Activities | ' | ' | ' | ' |
Contractual loan origination related fees, net | $23,816 | $27,674 | $80,669 | $55,045 |
Fair value of expected future cash flows from servicing recognized at commitment | 22,671 | 27,237 | 74,488 | 55,404 |
Fair value of expected guaranty obligation | -1,209 | -1,511 | -3,872 | -3,313 |
Total gains from mortgage banking activities | $45,278 | $53,400 | $151,285 | $107,136 |
Gains_from_Mortgage_Banking_Ac3
Gains from Mortgage Banking Activities - Additional Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Gains from Mortgage Banking Activities | ' | ' | ' | ' |
Co-broker fees from mortgage banking activities | $4.90 | $5.20 | $16.80 | $13.60 |
Mortgage_Servicing_Rights_Deta
Mortgage Servicing Rights (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Activity related to capitalized MSRs | ' | ' | ' | ' |
Beginning balance | $341,770 | $149,533 | $315,524 | $137,079 |
Additions, following the sale of loan | 22,991 | 24,585 | 85,286 | 51,449 |
Additions, CWCapital acquisition | ' | 130,543 | ' | 130,543 |
Amortization | -16,201 | -9,228 | -47,144 | -22,279 |
Pre-payments and write-offs | -3,661 | -729 | -8,767 | -2,088 |
Ending balance | $344,899 | $294,704 | $344,899 | $294,704 |
Mortgage_Servicing_Rights_Deta1
Mortgage Servicing Rights (Details 2) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||||
Amortization of Mortgage Servicing Rights | ' | ' | ' | ' | ' | ' |
Three Months Ending December 31, 2013 | $16,138 | ' | ' | ' | ' | ' |
Year ending December 31, 2014 | 61,684 | ' | ' | ' | ' | ' |
Year ending December 31, 2015 | 55,037 | ' | ' | ' | ' | ' |
Year ending December 31, 2016 | 50,582 | ' | ' | ' | ' | ' |
Year ending December 31, 2017 | 45,560 | ' | ' | ' | ' | ' |
Year ending December 31, 2018 | 37,348 | ' | ' | ' | ' | ' |
Thereafter | 78,550 | ' | ' | ' | ' | ' |
Net carrying value | 344,899 | 341,770 | 315,524 | 294,704 | 149,533 | 137,079 |
Originated MSRs | ' | ' | ' | ' | ' | ' |
Amortization of Mortgage Servicing Rights | ' | ' | ' | ' | ' | ' |
Three Months Ending December 31, 2013 | 11,266 | ' | ' | ' | ' | ' |
Year ending December 31, 2014 | 42,958 | ' | ' | ' | ' | ' |
Year ending December 31, 2015 | 37,721 | ' | ' | ' | ' | ' |
Year ending December 31, 2016 | 34,556 | ' | ' | ' | ' | ' |
Year ending December 31, 2017 | 31,443 | ' | ' | ' | ' | ' |
Year ending December 31, 2018 | 27,122 | ' | ' | ' | ' | ' |
Thereafter | 63,920 | ' | ' | ' | ' | ' |
Net carrying value | 248,986 | ' | ' | ' | ' | ' |
Acquired MSRs | ' | ' | ' | ' | ' | ' |
Amortization of Mortgage Servicing Rights | ' | ' | ' | ' | ' | ' |
Three Months Ending December 31, 2013 | 4,872 | ' | ' | ' | ' | ' |
Year ending December 31, 2014 | 18,726 | ' | ' | ' | ' | ' |
Year ending December 31, 2015 | 17,316 | ' | ' | ' | ' | ' |
Year ending December 31, 2016 | 16,026 | ' | ' | ' | ' | ' |
Year ending December 31, 2017 | 14,117 | ' | ' | ' | ' | ' |
Year ending December 31, 2018 | 10,226 | ' | ' | ' | ' | ' |
Thereafter | 14,630 | ' | ' | ' | ' | ' |
Net carrying value | $95,913 | ' | ' | ' | ' | ' |
Mortgage_Servicing_Rights_Addi
Mortgage Servicing Rights - Additional Information (USD $) | 9 Months Ended | 9 Months Ended | ||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Minimum | Minimum | Maximum | Maximum | |||
Servicing Assets At Amortized Value [Line Items] | ' | ' | ' | ' | ' | ' |
Discount rate used for loans originated (as a percent) | ' | ' | 10.00% | 10.00% | 15.00% | 15.00% |
Reduction in estimated life | ' | ' | '6 months | ' | '12 months | ' |
Fair value of the MSRs | $400 | $350.50 | ' | ' | ' | ' |
Sensitivity Analysis of Fair Value, example 1, impact of percent adverse change in discount rate, percent | 0.01 | ' | ' | ' | ' | ' |
Decrease in fair value as a result of 100 basis point increase in discount rate | 13.2 | ' | ' | ' | ' | ' |
Sensitivity Analysis of Fair Value, example 2, impact of percent adverse change in discount rate, percent | 0.02 | ' | ' | ' | ' | ' |
Decrease in fair value as a result of 200 basis point increase in discount rate | $25.40 | ' | ' | ' | ' | ' |
Guaranty_Obligation_and_Allowa2
Guaranty Obligation and Allowance for Risk-Sharing Obligations (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Summary of guarantee obligation | ' | ' | ' | ' |
Beginning balance | $22,735 | $10,746 | $21,155 | $9,921 |
Guaranty obligation recognized, following the sale of loan | 1,010 | 1,778 | 4,436 | 3,565 |
Guaranty obligation recognized, CWCapital acquisition | ' | 8,254 | ' | 8,254 |
Amortization of guaranty obligation | -983 | -664 | -2,829 | -1,626 |
Ending balance | $22,762 | $20,114 | $22,762 | $20,114 |
Guaranty_Obligation_and_Allowa3
Guaranty Obligation and Allowance for Risk-Sharing Obligations (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | |||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |||
Allowance for risk-sharing for the contingent portion of the guaranty obligation | ' | ' | ' | ' | |||
Beginning balance | $12,322 | $13,629 | $15,670 | $14,917 | |||
Provision for risk-sharing obligations | -155 | -848 | 997 | 1,126 | |||
Allowance for risk-sharing obligations, CWCapital acquisition | ' | 4,063 | ' | 4,063 | |||
Write-offs | -3,706 | [1] | ' | -8,206 | [1] | -3,262 | [1] |
Ending balance | $8,461 | $16,844 | $8,461 | $16,844 | |||
[1] | Represents the write-off of the allowance for risk-sharing obligations upon final settlement of the loss sharing amount with Fannie Mae. |
Guaranty_Obligation_and_Allowa4
Guaranty Obligation and Allowance for Risk-Sharing Obligations - Additional Information (USD $) | 9 Months Ended |
In Billions, unless otherwise specified | Sep. 30, 2013 |
Maximum delinquency period of loans at which initial loss recognition occurs | '60 days |
Maximum quantifiable contingent liability associated with guarantees | $3.60 |
Servicing_Details
Servicing (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
In Billions, unless otherwise specified | ||
Servicing | ' | ' |
Unpaid principal balance | $38.70 | $33.90 |
Warehouse_Notes_Payable_Detail
Warehouse Notes Payable (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Apr. 12, 2013 | Sep. 30, 2013 | Apr. 02, 2013 | Sep. 30, 2013 | Sep. 03, 2013 | Jun. 24, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 19, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | Committed warehouse facility #1 | Committed warehouse facility #1 | Committed warehouse facility #2 | Committed warehouse facility #2 | Committed warehouse facility #2 | Committed warehouse facility #2 | Committed warehouse facility #3 | Committed warehouse facility #3 | Committed warehouse facility #3 | Committed warehouse facility #4 | Fannie Mae Repurchase agreement, uncommitted line and open maturity | Warehouse notes payable | ||
Line Of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum Amount | ' | ' | ' | $575,000 | ' | $650,000 | $650,000 | $450,000 | ' | $57,400 | $35,000 | $60,000 | $500,000 | $1,842,400 |
Outstanding Balance | $429,944 | $1,084,539 | ' | $170,301 | ' | $101,932 | ' | ' | ' | $40,945 | ' | $41,549 | $75,217 | $429,944 |
Reference rate for variable interest on the line of credit | ' | ' | '30-day LIBOR | '30-day LIBOR | '30-day LIBOR | '30-day LIBOR | ' | ' | '30-day LIBOR | '30-day LIBOR | ' | '30-day LIBOR | '30-day LIBOR | ' |
Basis points added to reference rate (as a percent) | ' | ' | 1.65% | 1.50% | 1.50% | 1.50% | ' | ' | 2.50% | 2.00% | ' | 2.50% | 1.15% | ' |
Warehouse_Notes_Payable_Additi
Warehouse Notes Payable - Additional Information (USD $) | 0 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 6 Months Ended | 9 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Apr. 12, 2013 | Sep. 30, 2013 | Apr. 02, 2013 | Sep. 30, 2013 | Sep. 03, 2013 | Jun. 24, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 19, 2013 | Sep. 30, 2013 | Oct. 04, 2013 |
Committed warehouse facility #1 | Committed warehouse facility #1 | Committed warehouse facility #2 | Committed warehouse facility #2 | Committed warehouse facility #2 | Committed warehouse facility #2 | Committed warehouse facility #3 | Committed warehouse facility #3 | Committed warehouse facility #3 | Committed warehouse facility #4 | Committed warehouse facility #4 | |
Subsequent Event | |||||||||||
Line Of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reference rate for variable interest on the line of credit | '30-day LIBOR | '30-day LIBOR | '30-day LIBOR | '30-day LIBOR | ' | ' | '30-day LIBOR | '30-day LIBOR | ' | '30-day LIBOR | ' |
Basis points added to reference rate (as a percent) | 1.65% | 1.50% | 1.50% | 1.50% | ' | ' | 2.50% | 2.00% | ' | 2.50% | ' |
Maximum Amount | ' | $575,000 | ' | $650,000 | $650,000 | $450,000 | ' | $57,400 | $35,000 | $60,000 | $50,000 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Pledged securities | $45,449 | $33,481 |
Derivative assets | 13,357 | 21,258 |
Liabilities | ' | ' |
Derivative liabilities | 8,444 | 867 |
Quoted Prices in Active Markets For Identical Assets (Level 1) | Recurring basis | ' | ' |
Assets | ' | ' |
Pledged securities | 45,449 | 33,481 |
Total | 45,449 | 33,481 |
Significant Other Observable Inputs (Level 2) | Recurring basis | ' | ' |
Assets | ' | ' |
Loans held for sale | 365,210 | 1,101,561 |
Total | 365,210 | 1,101,561 |
Significant Other Unobservable Inputs (Level 3) | Recurring basis | ' | ' |
Assets | ' | ' |
Derivative assets | 13,357 | 21,258 |
Total | 13,357 | 21,258 |
Liabilities | ' | ' |
Derivative liabilities | 8,444 | 867 |
Total | 8,444 | 867 |
Balance as of Period End | Recurring basis | ' | ' |
Assets | ' | ' |
Loans held for sale | 365,210 | 1,101,561 |
Pledged securities | 45,449 | 33,481 |
Derivative assets | 13,357 | 21,258 |
Total | 424,016 | 1,156,300 |
Liabilities | ' | ' |
Derivative liabilities | 8,444 | 867 |
Total | $8,444 | $867 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Derivative assets and liabilities, net | ' | ' | ' | ' | ||||
Beginning balance | $34,336 | $7,602 | $20,391 | $5,415 | ||||
Settlements | -74,701 | -40,897 | -166,763 | -92,446 | ||||
Realized gains recorded in earnings | 40,365 | [1] | 33,295 | [1] | 146,372 | [1] | 87,031 | [1] |
Unrealized gains recorded in earnings | 4,913 | [1] | 20,105 | [1] | 4,913 | [1] | 20,105 | [1] |
Ending balance | $4,913 | $20,105 | $4,913 | $20,105 | ||||
[1] | Realized and unrealized gains from derivatives are recognized in the Gains from mortgage banking activities line item in the Condensed Consolidated Statements of Income |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details 3) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ' | ' |
Derivative assets | $13,357 | $21,258 |
Derivative liabilities | 8,444 | 867 |
Significant Other Unobservable Inputs (Level 3) | Derivative liabilities | Discounted cash flow | ' | ' |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ' | ' |
Derivative liabilities | 8,444 | ' |
Significant Other Unobservable Inputs (Level 3) | Derivative assets | Discounted cash flow | ' | ' |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ' | ' |
Derivative assets | $13,357 | ' |
Fair_Value_Measurements_Detail3
Fair Value Measurements (Details 4) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Financial Assets: | ' | ' | ' | ' |
Cash and cash equivalents | $60,968 | $65,027 | $82,613 | $53,817 |
Restricted cash | 7,035 | 7,130 | ' | ' |
Pledged securities | 45,449 | 33,481 | ' | ' |
Loans held for investment | 118,864 | 9,468 | ' | ' |
Derivative assets | 13,357 | 21,258 | ' | ' |
Financial Liabilities: | ' | ' | ' | ' |
Derivative liabilities | 8,444 | 867 | ' | ' |
Warehouse notes payable | 429,944 | 1,084,539 | ' | ' |
Notes payable | 74,700 | 80,925 | ' | ' |
Carrying Amount | ' | ' | ' | ' |
Financial Assets: | ' | ' | ' | ' |
Cash and cash equivalents | 60,968 | 65,027 | ' | ' |
Restricted cash | 7,035 | 7,130 | ' | ' |
Pledged securities | 45,449 | 33,481 | ' | ' |
Loans held for sale | 365,210 | 1,101,561 | ' | ' |
Loans held for investment | 118,864 | 9,468 | ' | ' |
Derivative assets | 13,357 | 21,258 | ' | ' |
Total financial assets | 610,883 | 1,237,925 | ' | ' |
Financial Liabilities: | ' | ' | ' | ' |
Derivative liabilities | 8,444 | 867 | ' | ' |
Warehouse notes payable | 429,944 | 1,084,539 | ' | ' |
Notes payable | 74,700 | 80,925 | ' | ' |
Total financial liabilities | 513,088 | 1,166,331 | ' | ' |
Fair Value | ' | ' | ' | ' |
Financial Assets: | ' | ' | ' | ' |
Cash and cash equivalents | 60,968 | 65,027 | ' | ' |
Restricted cash | 7,035 | 7,130 | ' | ' |
Pledged securities | 45,449 | 33,481 | ' | ' |
Loans held for sale | 365,210 | 1,101,561 | ' | ' |
Loans held for investment | 119,420 | 9,500 | ' | ' |
Derivative assets | 13,357 | 21,258 | ' | ' |
Total financial assets | 611,439 | 1,237,957 | ' | ' |
Financial Liabilities: | ' | ' | ' | ' |
Derivative liabilities | 8,444 | 867 | ' | ' |
Warehouse notes payable | 429,944 | 1,084,539 | ' | ' |
Notes payable | 74,700 | 80,925 | ' | ' |
Total financial liabilities | $513,088 | $1,166,331 | ' | ' |
Fair_Value_Measurements_Detail4
Fair Value Measurements (Details 5) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Fair Value Adjustment Components | ' | ' |
Assumed Gain on Sale | $22,680 | $44,214 |
Total Fair Value Adjustment | 22,680 | 44,214 |
Balance Sheet Location | ' | ' |
Derivative assets | 13,357 | 21,258 |
Derivative Liabilities | -8,444 | -867 |
Fair Value Adjustment To Loans Held for Sale | 17,694 | 23,699 |
Loans held for sale | ' | ' |
Fair Value Adjustment Components | ' | ' |
Notional or Principal Amount | 347,516 | 1,077,862 |
Assumed Gain on Sale | 13,684 | 32,261 |
Interest Rate Movement Effect | 4,010 | -8,562 |
Total Fair Value Adjustment | 17,694 | 23,699 |
Balance Sheet Location | ' | ' |
Fair Value Adjustment To Loans Held for Sale | 17,694 | 23,699 |
Rate lock commitments | ' | ' |
Fair Value Adjustment Components | ' | ' |
Notional or Principal Amount | 273,122 | 302,373 |
Assumed Gain on Sale | 8,996 | 11,953 |
Interest Rate Movement Effect | 3,850 | -1,194 |
Total Fair Value Adjustment | 12,846 | 10,759 |
Balance Sheet Location | ' | ' |
Derivative assets | 12,846 | 10,759 |
Forward sale contracts | ' | ' |
Fair Value Adjustment Components | ' | ' |
Notional or Principal Amount | 620,638 | 1,380,235 |
Interest Rate Movement Effect | -7,860 | 9,756 |
Total Fair Value Adjustment | -7,860 | 9,756 |
Balance Sheet Location | ' | ' |
Derivative assets | 511 | 10,499 |
Derivative Liabilities | ($8,444) | ($867) |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
period | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Period of originated loans within which they are transferred or sold | '60 days | ' |
Maximum term of interim loans | '2 years | ' |
Amount of transfers between any of the levels within the fair value hierarchy | $0 | $0 |
Higher maturity term | '60 days | ' |
Maximum number of period for which derivative is outstanding | 1 | ' |
Maximum | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Term of maturity of investments | '90 days | ' |
Litigation_Commitments_and_Con1
Litigation, Commitments, and Contingencies (Details) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | ||||||
In Millions, unless otherwise specified | Apr. 30, 2013 | Jul. 31, 2013 | Nov. 30, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Jul. 31, 2013 | Jul. 31, 2013 |
Capital Funding litigation | Capital Funding litigation | Capital Funding litigation | Capital Funding litigation | Capital Funding litigation | Capital Funding litigation | DUS risk-sharing obligations | DUS risk-sharing obligations | DUS risk-sharing obligations | DUS risk-sharing obligations | DUS risk-sharing obligations | DUS risk-sharing obligations | DUS risk-sharing obligations | DUS risk-sharing obligations | DUS risk-sharing obligations | DUS risk-sharing obligations | DUS risk-sharing obligations | DUS risk-sharing obligations | All defendants | Credit Suisse | |
item | item | item | item | Minimum | Maximum | Fannie Mae DUS program | Fannie Mae DUS program | Fannie Mae DUS program | Fannie Mae DUS program | Fannie Mae DUS program | Fannie Mae DUS program | Fannie Mae DUS program | Fannie Mae DUS program | Fannie Mae DUS program | Fannie Mae DUS program | Fannie Mae DUS program | Fannie Mae DUS program | Capital Funding litigation | Capital Funding litigation | |
US Treasuries | US Treasuries | US Federal Agency Securities | US Federal Agency Securities | Money market funds holding US Treasuries | Money market funds holding US Treasuries | Tier 1 loans | Tier 1 loans | New Tier 2 loans | New Tier 2 loans | Tier Two Mortgage Loans Existing | ||||||||||
item | ||||||||||||||||||||
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Collateral requirements percentage (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.90% | 1.10% | 0.60% | 0.75% | ' | ' | ' |
Period of funding for collateral requirement | ' | ' | ' | ' | ' | ' | '48 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | '48 months | ' | ' | ' |
Collateral requirements percentage by lender, quarterly increase | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.03% | ' | ' |
Number of quarters for the funding of the increased collateral requirement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | ' |
Restricted liquidity collateral reduction percentage | ' | ' | ' | ' | ' | ' | ' | 0.00% | 3.00% | 3.00% | 4.00% | 0.00% | 5.00% | ' | ' | ' | ' | ' | ' | ' |
Amount of additional capital required to be funded over the next 48 months | ' | ' | ' | ' | ' | ' | $42 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net worth requirement | ' | ' | ' | ' | ' | ' | 89.8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net worth | ' | ' | ' | ' | ' | ' | 229.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum liquid assets to be maintained to meet operational liquidity requirements | ' | ' | ' | ' | ' | ' | 16.9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operational liquidity | ' | ' | ' | ' | ' | ' | 69.3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of damages sought by plaintiff | ' | ' | ' | ' | 30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of claims asserted against all defendants | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount up to which the entity will be indemnifying Column | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount agreed to be paid by William Walker and Mallory Walker to Column | ' | ' | ' | ' | 3 | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Counts of breach of contract filed for summary judgment by defendants | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Counts of promissory estoppel filed for summary judgment by defendants | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Counts of unjust enrichment filed for summary judgment by defendants | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Counts of unfair competition filed for summary judgment by defendants | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Counts of unjust enrichment for which court issued Opinion and Order which granted the motion | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of jury trial | ' | '14 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of claims not dismissed | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount awarded by jury to Capital Funding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.75 | $10.40 |
Earnings_Per_Share_Details
Earnings Per Share (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
EARNINGS PER SHARE | ' | ' | ' | ' |
Weighted average number of shares outstanding used to calculate basic earnings per share | 33,859,453 | 25,091,153 | 33,710,837 | 22,881,795 |
Dilutive securities | ' | ' | ' | ' |
Unvested restricted shares | 523,522 | 352,448 | 604,677 | 220,037 |
Weighted average number of shares and share equivalents outstanding used to calculate diluted earnings per share | 34,382,975 | 25,443,601 | 34,315,514 | 23,101,832 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Stock Options | ' | ' | ' | ' |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Shares outstanding excluded from computation of earnings per share | 63,667 | 161,788 | 87,886 | 161,788 |
Restricted Shares | ' | ' | ' | ' |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Shares outstanding excluded from computation of earnings per share | 0 | 161,788 | 0 | 161,788 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Changes in stockholders' equity | ' | ' | ' | ' |
Balances at the beginning of the period (in shares) | ' | ' | 33,567,730 | ' |
Balances at the beginning of the period | ' | ' | $353,176 | ' |
Net income | 8,055 | 7,098 | 30,324 | 22,229 |
Issuance of common shares in connection with equity incentive plans | ' | ' | 1,189 | ' |
Repurchase and retirement of common stock | ' | ' | -2,318 | ' |
Stock-based compensation | ' | ' | 6,846 | ' |
Tax benefit from vesting of restricted shares | ' | ' | 1,253 | ' |
Balances at the end of the period (in shares) | 33,905,552 | ' | 33,905,552 | ' |
Balances at the end of the period | 390,470 | ' | 390,470 | ' |
Common Stock | ' | ' | ' | ' |
Changes in stockholders' equity | ' | ' | ' | ' |
Balances at the beginning of the period (in shares) | ' | ' | 33,567,730 | ' |
Balances at the beginning of the period | ' | ' | 336 | ' |
Issuance of common shares in connection with equity incentive plans (in shares) | ' | ' | 466,792 | ' |
Issuance of common shares in connection with equity incentive plans | ' | ' | 3 | ' |
Repurchase and retirement of common stock (in shares) | ' | ' | -128,970 | ' |
Balances at the end of the period (in shares) | 33,905,552 | ' | 33,905,552 | ' |
Balances at the end of the period | 339 | ' | 339 | ' |
Additional Paid-In Capital | ' | ' | ' | ' |
Changes in stockholders' equity | ' | ' | ' | ' |
Balances at the beginning of the period | ' | ' | 236,823 | ' |
Issuance of common shares in connection with equity incentive plans | ' | ' | 1,186 | ' |
Repurchase and retirement of common stock | ' | ' | -2,318 | ' |
Stock-based compensation | ' | ' | 6,846 | ' |
Tax benefit from vesting of restricted shares | ' | ' | 1,253 | ' |
Balances at the end of the period | 243,790 | ' | 243,790 | ' |
Retained Earnings | ' | ' | ' | ' |
Changes in stockholders' equity | ' | ' | ' | ' |
Balances at the beginning of the period | ' | ' | 116,017 | ' |
Net income | ' | ' | 30,324 | ' |
Balances at the end of the period | $146,341 | ' | $146,341 | ' |