Regions Bank 2008 Annual Report Download - page 128

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credit supporting these conduit transactions of zero and $41.5 million at December 31, 2008 and 2007,
respectively. No gains or losses were recognized on commercial loans sold to third-party conduits nor was any
retained interest recorded due to the relatively short life of the commercial loans sold into the conduits.
Also during 2008, Regions exercised a clean-up call on an indirect auto loan conduit that had approximately
$3.2 million in securitized loans as of December 31, 2007.
The following table summarizes amounts recognized in the consolidated financial statements related to
securitization transactions for the years ended December 31:
2008 2007 2006
(In thousands )
Proceeds from securitizations ..................... $41,505 $423,230 $47,557
Net gains ...................................... — 2,178 —
Servicing fees received ........................... 1,079 3,130 4,229
Other cash (outflows) inflows ..................... (88) (183) 336
An analysis of mortgage servicing rights for the years ended December 31 is presented below:
2008 2007
(In thousands)
Balance at beginning of year .............................. $368,654 $416,217
Amounts capitalized ..................................... 58,632 56,931
Sale of servicing assets .................................. (71,172) (25,577)
Amortization .......................................... (75,430) (78,917)
280,684 368,654
Valuation allowance ..................................... (119,794) (47,346)
Balance at end of year ................................... $160,890 $321,308
The changes in the valuation allowance for mortgage servicing assets were as follows for the years ended
December 31:
2008 2007
(In thousands)
Balance at beginning of year ................................ $ 47,346 $41,346
Release of impairment—sale of MSRs ........................ (12,552) —
Impairment of mortgage servicing rights ...................... 85,000 6,000
Balance at end of year ..................................... $119,794 $47,346
Data and assumptions used in the fair value calculation related to mortgage servicing rights for the years
ended December 31 are as follows:
2008 2007
Weighted-average prepayment speeds ............................. 597 393
Weighted-average discount rate .................................. 10.30% 9.80%
Weighted-average coupon interest rate ............................. 6.13% 6.18%
Weighted-average remaining maturity (months) ..................... 279 278
Weighted-average servicing fee (basis points) ....................... 28.80 30.96
The estimated fair values of capitalized mortgage servicing rights were $160.9 million and $321.3 million at
December 31, 2008 and 2007, respectively. In 2008, 2007 and 2006, Regions’ amortization of mortgage
servicing rights was $75.4 million, $78.9 million and $70.6 million, respectively.
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