x |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
For
the quarterly period ended June 30, 2011
|
|
or
|
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
For
the transition period from: _____________________to
_____________________
|
Ocwen
Financial Corporation
|
(Exact
name of registrant as specified in its
charter)
|
Florida
|
65-0039856
|
|
(State
or other jurisdiction
|
(I.R.S.
Employer
|
|
of
incorporation or organization)
|
Identification
No.)
|
2002 Summit Boulevard,
6th
Floor, Atlanta,
Georgia 30319
|
(Address
of principal executive offices) (Zip Code)
|
(561)
682-8000
|
(Registrant’s
telephone number, including area code)
|
Large
accelerated filer
|
x |
Accelerated
filer
|
o | |
Non-accelerated
filer
|
o
(Do not check if a smaller reporting
company)
|
Smaller
reporting company
|
o |
●
|
our
sources of liquidity; our ability to fund and
recover advances, repay borrowings, and comply with
debt covenants; and the adequacy of financial
resources;
|
|
●
|
servicing
portfolio characteristics, including prepayment
speeds, float balances, delinquency and advances
rates;
|
|
●
|
our
ability to grow or otherwise adapt our business,
including the availability of new servicing
opportunities and joint ventures;
|
|
●
|
our
ability to reduce our cost structure;
|
|
●
|
our
ability to successfully modify delinquent loans,
manage foreclosures and sell foreclosed
properties;
|
|
●
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our
reserves, valuations, provisions and anticipated
realization on assets;
|
|
●
|
our
ability to effectively manage our exposure to
interest rate changes and foreign exchange
fluctuations;
|
|
●
|
our
credit and servicer ratings and other actions from
various rating agencies;
|
|
●
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uncertainty
related to general economic and market conditions,
delinquency rates, home prices and real-estate
owned disposition timelines;
|
|
●
|
uncertainty
related to the actions of loan owners, including
mortgage-backed securities investors, regarding
loan putbacks or legal actions;
|
|
●
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uncertainty
related to the processes for judicial and
non-judicial foreclosure proceedings, including
potential additional costs or delays or moratoria
in the future or claims pertaining to past
practices;
|
|
●
|
uncertainty
related to litigation or dispute resolution and
inquiries from government agencies into past
servicing and foreclosure practices; and
|
|
●
|
uncertainty
related to legislation, regulations, regulatory
agency actions, government programs and policies,
industry initiatives and evolving best servicing
practices.
|
June
30,
2011 |
December
31,
2010 |
|||||||
Assets
|
||||||||
Cash
|
$ | 104,167 | $ | 127,796 | ||||
Restricted
cash – for securitization investors
|
1,507 | 727 | ||||||
Loans
held for resale, at lower of cost or fair
value
|
23,193 | 25,803 | ||||||
Advances
|
167,261 | 184,833 | ||||||
Match
funded advances
|
1,421,636 | 1,924,052 | ||||||
Loans,
net – restricted for securitization
investors
|
62,344 | 67,340 | ||||||
Mortgage
servicing rights
|
175,591 | 193,985 | ||||||
Receivables,
net
|
53,066 | 69,518 | ||||||
Deferred
tax assets, net
|
139,086 | 138,716 | ||||||
Goodwill
|
12,810 | 12,810 | ||||||
Premises
and equipment, net
|
4,578 | 5,475 | ||||||
Investments
in unconsolidated entities
|
12,611 | 12,072 | ||||||
Other
assets
|
110,899 | 158,282 | ||||||
Total
assets
|
$ | 2,288,749 | $ | 2,921,409 | ||||
Liabilities
and Equity
|
||||||||
Liabilities
|
||||||||
Match
funded liabilities
|
$ | 1,041,998 | $ | 1,482,529 | ||||
Secured
borrowings – owed to securitization
investors
|
58,696 | 62,705 | ||||||
Lines
of credit and other secured borrowings
|
41,458 | 246,073 | ||||||
Servicer
liabilities
|
2,065 | 2,492 | ||||||
Debt
securities
|
82,554 | 82,554 | ||||||
Other
liabilities
|
106,152 | 140,239 | ||||||
Total
liabilities
|
1,332,923 | 2,016,592 | ||||||
Commitments
and Contingencies (Note 22)
|
||||||||
Equity
|
||||||||
Ocwen
Financial Corporation stockholders’
equity
|
||||||||
Common
stock, $.01 par value; 200,000,000 shares
authorized; 100,948,647 and 100,726,947 shares
issued and outstanding at June 30, 2011 and
December 31, 2010, respectively
|
1,009 | 1,007 | ||||||
Additional
paid-in capital
|
469,541 | 467,500 | ||||||
Retained
earnings
|
493,908 | 445,456 | ||||||
Accumulated
other comprehensive loss, net of income
taxes
|
(8,883 | ) | (9,392 | ) | ||||
Total
Ocwen Financial Corporation stockholders’
equity
|
955,575 | 904,571 | ||||||
Non-controlling
interest in subsidiaries
|
251 | 246 | ||||||
Total
equity
|
955,826 | 904,817 | ||||||
Total
liabilities and equity
|
$ | 2,288,749 | $ | 2,921,409 |
For
the periods ended June 30,
|
Three
months
|
Six
months
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenue
|
||||||||||||||||
Servicing
and subservicing fees
|
$ | 95,837 | $ | 65,936 | $ | 198,342 | $ | 132,416 | ||||||||
Process
management fees
|
9,140 | 8,315 | 16,936 | 16,221 | ||||||||||||
Other
revenues
|
860 | 1,702 | 1,565 | 2,902 | ||||||||||||
Total
revenue
|
105,837 | 75,953 | 216,843 | 151,539 | ||||||||||||
Operating
expenses
|
||||||||||||||||
Compensation
and benefits
|
15,253 | 13,089 | 30,040 | 25,866 | ||||||||||||
Amortization
of mortgage servicing rights
|
9,926 | 7,854 | 18,849 | 14,229 | ||||||||||||
Servicing
and origination
|
1,301 | 2,458 | 3,223 | 3,049 | ||||||||||||
Technology
and communications
|
6,373 | 6,191 | 13,245 | 11,855 | ||||||||||||
Professional
services
|
3,270 | 9,134 | 5,654 | 12,389 | ||||||||||||
Occupancy
and equipment
|
4,153 | 3,870 | 8,283 | 8,316 | ||||||||||||
Other
operating expenses
|
1,978 | 2,062 | 4,159 | 4,131 | ||||||||||||
Total
operating expenses
|
42,254 | 44,658 | 83,453 | 79,835 | ||||||||||||
Income
from operations
|
63,583 | 31,295 | 133,390 | 71,704 | ||||||||||||
Other
income (expense)
|
||||||||||||||||
Interest
income
|
2,289 | 1,900 | 4,458 | 5,545 | ||||||||||||
Interest
expense
|
(21,813 | ) | (13,359 | ) | (59,356 | ) | (25,830 | ) | ||||||||
Loss
on trading securities
|
— | (1,710 | ) | — | (945 | ) | ||||||||||
Loss
on loans held for resale, net
|
(1,616 | ) | (1,049 | ) | (2,520 | ) | (2,087 | ) | ||||||||
Equity
in (loss) earnings of unconsolidated
entities
|
(680 | ) | 343 | (550 | ) | 1,078 | ||||||||||
Other,
net
|
(727 | ) | (4,158 | ) | 103 | (4,758 | ) | |||||||||
Other
expense, net
|
(22,547 | ) | (18,033 | ) | (57,865 | ) | (26,997 | ) | ||||||||
Income
before income taxes
|
41,036 | 13,262 | 75,525 | 44,707 | ||||||||||||
Income
tax expense (benefit)
|
14,653 | (2,777 | ) | 27,078 | 7,797 | |||||||||||
Net
income
|
26,383 | 16,039 | 48,447 | 36,910 | ||||||||||||
Net
loss (income) attributable to non-controlling
interest in subsidiaries
|
(5 | ) | (1 | ) | 5 | (12 | ) | |||||||||
Net
income attributable to Ocwen Financial Corporation
|
$ | 26,378 | $ | 16,038 | $ | 48,452 | $ | 36,898 | ||||||||
Earnings
per share attributable to Ocwen
Financial Corporation
|
||||||||||||||||
Basic
|
$ | 0.26 | $ | 0.16 | $ | 0.48 | $ | 0.37 | ||||||||
Diluted
|
$ | 0.25 | $ | 0.15 | $ | 0.45 | $ | 0.35 | ||||||||
Weighted
average common shares outstanding
|
||||||||||||||||
Basic
|
100,943,402 | 100,168,953 | 100,853,424 | 100,072,950 | ||||||||||||
Diluted
|
108,110,588 | 107,728,092 | 107,944,681 | 107,526,786 |
For
the periods ended June 30,
|
Three
months
|
Six
months
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net
income
|
$ | 26,383 | $ | 16,039 | $ | 48,447 | $ | 36,910 | ||||||||
Other
comprehensive income (loss), net of income
taxes:
|
||||||||||||||||
Unrealized
foreign currency translation income (loss ) arising
during the period (1)
|
6 | (14 | ) | 26 | (84 | ) | ||||||||||
Change
in deferred loss on cash flow hedges arising during
the period (2)
|
(2,177 | ) | (7,403 | ) | (232 | ) | (7,403 | ) | ||||||||
Reclassification
adjustment for losses on cash flow hedges included
in net income (3)
|
567 | 20 | 722 | 20 | ||||||||||||
Net
change in deferred loss on cash flow hedges
|
(1,610 | ) | (7,383 | ) | 490 | (7,383 | ) | |||||||||
Other
(4)
|
2 | — | 3 | — | ||||||||||||
Total
other comprehensive income (loss), net of income
taxes
|
(1,602 | ) | (7,397 | ) | 519 | (7,467 | ) | |||||||||
Comprehensive
income
|
24,781 | 8,642 | 48,966 | 29,443 | ||||||||||||
Comprehensive
loss attributable to non-controlling
interests
|
(5 | ) | 4 | (5 | ) | 12 | ||||||||||
Comprehensive
income attributable to Ocwen Financial
Corporation
|
$ | 24,776 | $ | 8,646 | $ | 48,961 | $ | 29,455 |
(1)
|
Net
of income tax (expense) benefit of $4 and $5 for
the three months ended June 30, 2011 and 2010,
respectively, and $(9) and $35 for the six months
ended June 30, 2011 and 2010, respectively.
|
(2)
|
Net
of income tax benefit of $1,231 and $4,348 for the
three months ended June 30, 2011 and 2010,
respectively, and $158 and $4,348 for the six
months ended June 30, 2011 and 2010,
respectively.
|
(3)
|
Net
of income tax expense of $321 and $12 for the three
months ended June 30, 2011 and 2010, respectively,
and $409 and $12 for the six months ended June 30,
2011 and 2010, respectively.
|
(4)
|
Net
of income tax expense of $1 for the six months
ended June 30, 2011.
|
OCN
Shareholders
|
||||||||||||||||||||||||||||
Common
Stock
|
Additional
Paid-in
|
Retained
|
Accumulated
Other
Comprehensive
Loss,
|
Non-controlling
Interest in
|
||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Net
of Taxes
|
Subsidiaries
|
Total
|
||||||||||||||||||||||
Balance
at December 31, 2010
|
100,726,947 | $ | 1,007 | $ | 467,500 | $ | 445,456 | $ | (9,392 | ) | $ | 246 | $ | 904,817 | ||||||||||||||
Net
income (loss)
|
— | — | — | 48,452 | — | (5 | ) | 48,447 | ||||||||||||||||||||
Exercise
of common stock options
|
210,336 | 2 | 577 | — | — | — | 579 | |||||||||||||||||||||
Equity-based
compensation
|
11,364 | — | 1,464 | — | — | — | 1,464 | |||||||||||||||||||||
Other
comprehensive income, net of income taxes
|
— | — | — | — | 509 | 10 | 519 | |||||||||||||||||||||
Balance
at June 30, 2011
|
100,948,647 | $ | 1,009 | $ | 469,541 | $ | 493,908 | $ | (8,883 | ) | $ | 251 | $ | 955,826 |
OCN
Shareholders
|
||||||||||||||||||||||||||||
Common
Stock
|
Additional
Paid-in
|
Retained
|
Accumulated
Other
Comprehensive
Loss,
|
Non-controlling
Interest in
|
||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Net
of Taxes
|
Subsidiaries
|
Total
|
||||||||||||||||||||||
Balance
at December 31, 2009
|
99,956,833 | $ | 1,000 | $ | 459,542 | $ | 405,198 | $ | (129 | ) | $ | 252 | $ | 865,863 | ||||||||||||||
Adoption
of ASC 810 (FASB Statement No. 167), net of
tax
|
— | — | — | 2,274 | — | — | 2,274 | |||||||||||||||||||||
Net
income
|
— | — | — | 36,898 | — | 12 | 36,910 | |||||||||||||||||||||
Exercise
of common stock options
|
217,775 | 2 | 1,023 | — | — | — | 1,025 | |||||||||||||||||||||
Issuance
of common stock awards to employees
|
9,865 | — | — | — | — | — | — | |||||||||||||||||||||
Equity-based
compensation
|
7,654 | — | 1,325 | — | — | — | 1,325 | |||||||||||||||||||||
Other
comprehensive loss, net of income taxes
|
— | — | — | — | (7,443 | ) | (24 | ) | (7,467 | ) | ||||||||||||||||||
Balance
at June 30, 2010
|
100,192,127 | $ | 1,002 | $ | 461,890 | $ | 444,370 | $ | (7,572 | ) | $ | 240 | $ | 899,930 |
For
the six months ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Cash
flows from operating activities
|
||||||||
Net
income
|
$ | 48,447 | $ | 36,910 | ||||
Adjustments
to reconcile net income to net cash provided by
operating activities
|
||||||||
Amortization
of mortgage servicing rights
|
18,849 | 14,229 | ||||||
Amortization
of debt discount
|
7,343 | 2,104 | ||||||
Amortization
of debt issuance costs – senior secured term
loan
|
8,604 | — | ||||||
Depreciation
|
887 | 741 | ||||||
Write-off
of investment in commercial real estate
property
|
— | 3,000 | ||||||
Reversal
of valuation allowance on mortgage servicing
assets
|
(701 | ) | (101 | ) | ||||
Loss
on trading securities
|
— | 945 | ||||||
Loss
on loans held for resale, net
|
2,520 | 2,087 | ||||||
Equity
in loss (earnings) of unconsolidated
entities
|
550 | (1,078 | ) | |||||
Gain
on extinguishment of debt
|
(1,246 | ) | (152 | ) | ||||
(Increase)
decrease in deferred tax assets, net
|
(631 | ) | 12,838 | |||||
Net
cash provided by trading activities
|
— | 168,453 | ||||||
Net
cash provided by loans held for resale
activities
|
519 | 849 | ||||||
Changes
in assets and liabilities:
|
||||||||
Decrease
in advances and match funded advances
|
518,493 | 153,997 | ||||||
Decrease
in receivables and other assets, net
|
53,675 | 11,983 | ||||||
Decrease
in servicer liabilities
|
(427 | ) | (36,702 | ) | ||||
Decrease
in other liabilities
|
(32,334 | ) | (13,282 | ) | ||||
Other,
net
|
5,836 | 3,974 | ||||||
Net
cash provided by operating activities
|
630,384 | 360,795 | ||||||
Cash
flows from investing activities
|
||||||||
Purchase
of mortgage servicing rights
|
— | (23,425 | ) | |||||
Acquisition
of advances and other assets in connection with the
purchase of mortgage servicing rights
|
— | (528,882 | ) | |||||
Distributions
of capital from unconsolidated entities –
Ocwen Structured Investments, LLC, Ocwen
Nonperforming Loans, LLC and Ocwen REO, LLC
|
1,639 | 2,146 | ||||||
Investment
in unconsolidated entity – Correspondent One
S.A.
|
(3,025 | ) | — | |||||
Additions
to premises and equipment
|
(571 | ) | (2,202 | ) | ||||
Proceeds
from sales of real estate
|
648 | 2,046 | ||||||
(Increase)
decrease in restricted cash – for
securitization investors
|
(780 | ) | 743 | |||||
Principal
payments received on loans – restricted for
securitization investors
|
3,512 | 2,223 | ||||||
Net
cash provided (used) by investing activities
|
1,423 | (547,351 | ) | |||||
Cash
flows from financing activities
|
||||||||
(Repayment
of) proceeds from match funded liabilities
|
(440,531 | ) | 369,481 | |||||
Repayment
of secured borrowings – owed to
securitization investors
|
(4,009 | ) | (4,852 | ) | ||||
Proceeds
from lines of credit and other secured
borrowings
|
— | 96,657 | ||||||
Repayment
of lines of credit and other secured
borrowings
|
(210,712 | ) | (53,904 | ) | ||||
Repayment
of investment line
|
— | (156,968 | ) | |||||
Repurchase
of debt securities
|
— | (11,659 | ) | |||||
Exercise
of common stock options
|
836 | 935 | ||||||
Other
|
(1,020 | ) | (667 | ) | ||||
Net
cash (used) provided by financing activities
|
(655,436 | ) | 239,023 | |||||
Net
(decrease) increase in cash
|
(23,629 | ) | 52,467 | |||||
Cash
at beginning of period
|
127,796 | 90,919 | ||||||
Cash
at end of period
|
$ | 104,167 | $ | 143,386 |
1.
|
as
the servicer we have the right to direct the
activities that most significantly impact the
economic performance of the trusts through our
ability to manage the delinquent assets of the
trusts, and
|
|
2.
|
as
holder of all or a portion of the residual tranches
of the securities issued by the trust, we have the
obligation to absorb losses of the trusts, to the
extent of the value of our investment, and the
right to receive benefits from the trust, both of
which could potentially be significant to the
trusts.
|
For
the periods ended June 30,
|
Three
months
|
Six
months
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Total
servicing and subservicing fee revenues
|
$ | 727 | $ | 923 | $ | 1,570 | $ | 1,874 |
As
of
|
||||||||
June
30,
2011
|
December
31,
2010 |
|||||||
Total
servicing advances
|
$ | 14,497 | $ | 16,886 | ||||
Total
mortgage servicing rights at amortized cost
|
1,246 | 1,330 |
June
30,
2011
|
December
31,
2010 |
|||||||
Match
funded advances
|
$ | 1,421,636 | $ | 1,924,052 | ||||
Other
assets
|
67,684 | 103,448 | ||||||
Total
assets
|
$ | 1,489,320 | $ | 2,027,500 | ||||
Match
funded liabilities
|
$ | 1,041,998 | $ | 1,482,529 | ||||
Due
to affiliates (1)
|
363,172 | 262,900 | ||||||
Other
liabilities
|
1,816 | 2,890 | ||||||
Total
liabilities
|
$ | 1,406,986 | $ | 1,748,319 |
(1)
|
Amounts
are payable to Ocwen and its consolidated
affiliates and eliminated in consolidation.
|
NOTE
2
|
RECENT
ACCOUNTING PRONOUNCEMENTS
|
NOTE
3
|
PENDING
ACQUISITION
|
NOTE
4
|
FAIR
VALUE OF FINANCIAL INSTRUMENTS
|
June
30, 2011
|
December
31, 2010
|
|||||||||||||||
Carrying
Value
|
Fair
Value
|
Carrying
Value
|
Fair
Value
|
|||||||||||||
Financial
assets:
|
||||||||||||||||
Loans
held for resale
|
$ | 23,193 | $ | 23,193 | $ | 25,803 | $ | 25,803 | ||||||||
Loans,
net – restricted for securitization
investors
|
62,344 | 59,642 | 67,340 | 64,795 | ||||||||||||
Advances
|
1,588,897 | 1,588,897 | 2,108,885 | 2,108,885 | ||||||||||||
Receivables,
net
|
53,066 | 53,066 | 69,518 | 69,518 | ||||||||||||
Financial
liabilities:
|
||||||||||||||||
Match
funded liabilities
|
$ | 1,041,998 | $ | 1,045,433 | $ | 1,482,529 | $ | 1,486,476 | ||||||||
Lines
of credit and other secured borrowings
|
41,458 | 42,437 | 246,073 | 252,722 | ||||||||||||
Secured
borrowings – owed to securitization
investors
|
58,696 | 57,133 | 62,705 | 62,105 | ||||||||||||
Servicer
liabilities
|
2,065 | 2,065 | 2,492 | 2,492 | ||||||||||||
Debt
securities
|
82,554 | 87,733 | 82,554 | 75,325 | ||||||||||||
Derivative
financial instruments, net
|
$ | (15,787 | ) | $ | (15,787 | ) | $ | (15,351 | ) | $ | (15,351 | ) |
Level
1:
|
Quoted
prices in active markets for identical assets or
liabilities.
|
|
Level
2:
|
Inputs
other than quoted prices that are observable for
the asset or liability, either directly or
indirectly, for substantially the full term of the
financial instrument.
|
|
Level
3:
|
Unobservable
inputs for the asset or liability.
|
Carrying
value
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||
At
June 30, 2011:
|
||||||||||||||
Measured
at fair value on a recurring basis:
|
||||||||||||||
Derivative
financial instruments, net (1)
|
$ | (15,787 | ) | — | — | $ | (15,787 | ) | ||||||
Measured
at fair value on a non-recurring basis:
|
||||||||||||||
Loans
held for resale (2)
|
23,193 | — | — | 23,193 | ||||||||||
Mortgage
servicing rights (3)
|
725 | — | — | 725 | ||||||||||
At
December 31, 2010:
|
||||||||||||||
Measured
at fair value on a recurring basis:
|
||||||||||||||
Derivative
financial instruments, net (1)
|
$ | (15,351 | ) | — | — | $ | (15,351 | ) | ||||||
Measured
at fair value on a non-recurring basis:
|
||||||||||||||
Loans
held for resale (2)
|
25,803 | — | — | 25,803 | ||||||||||
Mortgage
servicing rights (3)
|
334 | — | — | 334 |
(1)
|
The
derivative financial instruments are not
exchange-traded and therefore quoted market prices
or other observable inputs are not available. Fair
value is based on estimates provided by third-party
pricing sources. See Note 15 for additional
information on our derivative financial
instruments.
|
(2)
|
Loans
held for resale are reported at the lower of cost
or fair value. The fair value of loans for which we
do not have a firm commitment to sell is based upon
a discounted cash flow analysis with the expected
future cash flows discounted at a rate commensurate
with the risk of the estimated cash flows.
Significant assumptions include collateral and loan
characteristics, prevailing market conditions and
the creditworthiness of the borrower. All loans
held for resale were measured at fair value because
the cost exceeded the estimated fair value. At June
30, 2011 and December 31, 2010, the carrying value
of loans held for resale is net of a valuation
allowance of $14,680 and $14,611, respectively.
Current market illiquidity has reduced the
availability of observable pricing data.
Consequently, we classify loans within Level 3 of
the fair value hierarchy.
|
(3)
|
Balances
represent the carrying value of the impaired
stratum of MSRs, net of a valuation allowance of
$2,163 and $2,864 at June 30, 2011 and December 31,
2010, respectively. The estimated fair value
exceeded amortized cost for all other strata. See
Note 8 for additional information on MSRs,
including significant assumptions used in their
valuation.
|
Derivative
Financial Instruments
|
||||||||
For
the periods ended June 30, 2011:
|
Three
months
|
Six
months
|
||||||
Beginning
balance
|
$ | (12,397 | ) | $ | (15,351 | ) | ||
Purchases,
issuances, sales and settlements:
|
||||||||
Purchases
|
— | — | ||||||
Issuances
|
— | — | ||||||
Sales
|
— | — | ||||||
Settlements
|
25 | 71 | ||||||
25 | 71 | |||||||
Total
realized and unrealized gains and (losses)
(1):
|
||||||||
Included
in Other, net
|
(895 | ) | (1,248 | ) | ||||
Included
in Other comprehensive income (loss)
|
(2,520 | ) | 741 | |||||
(3,415 | ) | (507 | ) | |||||
Transfers
in and / or out of Level 3
|
— | — | ||||||
Ending
balance
|
$ | (15,787 | ) | $ | (15,787 | ) |
Trading
Securities
|
||||||||||||||||
Three
months ended June 30, 2010:
|
Derivative
Financial Instruments |
Auction
Rate
Securities |
Subordinates
and Residuals |
Total
|
||||||||||||
Beginning
balance
|
$ | (480 | ) | $ | 125,036 | $ | 59 | $ | 124,615 | |||||||
Purchases,
issuances, sales and settlements:
|
||||||||||||||||
Purchases
|
— | — | — | — | ||||||||||||
Issuances
|
— | — | — | — | ||||||||||||
Sales
|
— | (45,260 | ) | — | (45,260 | ) | ||||||||||
Settlements
|
76 | — | — | 76 | ||||||||||||
76 | (45,260 | ) | — | (45,184 | ) | |||||||||||
Total
realized and unrealized gains and (losses) (1)
(2):
|
||||||||||||||||
Included
in Loss on trading securities
|
— | (1,703 | ) | (7 | ) | (1,710 | ) | |||||||||
Included
in Other, net
|
(155 | ) | — | — | (155 | ) | ||||||||||
Included
in Other comprehensive income (loss)
|
(11,719 | ) | — | — | (11,719 | ) | ||||||||||
(11,874 | ) | (1,703 | ) | (7 | ) | (13,584 | ) | |||||||||
Transfers
in and / or out of Level 3
|
— | — | — | — | ||||||||||||
Ending
balance
|
$ | (12,278 | ) | $ | 78,073 | $ | 52 | $ | 65,847 |
Trading
Securities
|
||||||||||||||||
Six
months ended June 30, 2010:
|
Derivative
Financial Instruments |
Auction
Rate
Securities |
Subordinates
and Residuals |
Total
|
||||||||||||
Beginning
balance
|
$ | (45 | ) | $ | 247,464 | $ | 59 | $ | 247,478 | |||||||
Purchases,
issuances, sales and settlements:
|
||||||||||||||||
Purchases
|
— | — | — | — | ||||||||||||
Issuances
|
— | — | — | — | ||||||||||||
Sales
|
— | (75,108 | ) | — | (75,108 | ) | ||||||||||
Settlements
|
76 | (93,345 | ) | — | (93,269 | ) | ||||||||||
76 | (168,453 | ) | — | (168,377 | ) | |||||||||||
Total
realized and unrealized gains and (losses) (1)
(2):
|
||||||||||||||||
Included
in Loss on trading securities
|
— | (938 | ) | (7 | ) | (945 | ) | |||||||||
Included
in Other, net
|
(590 | ) | — | — | (590 | ) | ||||||||||
Included
in Other comprehensive income (loss)
|
(11,719 | ) | — | — | (11,719 | ) | ||||||||||
(12,309 | ) | (938 | ) | (7 | ) | (13,254 | ) | |||||||||
Transfers
in and / or out of Level 3
|
— | — | — | — | ||||||||||||
Ending
balance
|
$ | (12,278 | ) | $ | 78,073 | $ | 52 | $ | 65,847 |
(1)
|
Total
net losses attributable to derivative financial
instruments for the three and six months ended June
30, 2011 include losses of $3,415 and $289,
respectively, on derivatives held at June 30, 2011.
Net losses attributable to derivative financial
instruments for the three and six months ended June
30, 2010 were comprised exclusively of losses on
derivatives held at June 30, 2010.
|
(2)
|
Total
net losses on trading securities for the three and
six months ended June 30, 2010 include unrealized
gains (losses) of $(53) and $559, respectively, on
auction rate securities held at June 30,
2010.
|
NOTE
5
|
ADVANCES
|
June
30,
2011
|
December
31,
2010
|
|||||||
Servicing:
|
||||||||
Principal
and interest
|
$ | 73,570 | $ | 82,060 | ||||
Taxes
and insurance
|
53,604 |