Edgar Filing: EverBank Financial Corp

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



	ý	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2016.



	o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to

EverBank Financial Corp

(Exact name of registrant as specified in its charter)



Delaware	001-35533	52-2024090
(State of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

501 Riverside Ave., Jacksonville, FL		32202
(Address of principal executive offices)		(Zip Code)

904-281-6000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



	Large accelerated filer ý		Accelerated filer o
	Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No ý

As of October 24, 2016, there were 125,444,711 shares of common stock outstanding.

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EverBank Financial Corp

Form 10-Q

Index



Part I - Financial Information

Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015	3
	Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2016 and 2015	4
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2016 and 2015	5
	Condensed Consolidated Statements of Shareholders' Equity for the Nine Months Ended September 30, 2016 and 2015	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015	7
	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	83

Item 4.	Controls and Procedures	83

Part II - Other Information

Item 1.	Legal Proceedings	84

Item 1A.	Risk Factors	85

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	86

Item 3.	Default Upon Senior Securities	86

Item 4.	Mine Safety Disclosures	86

Item 5.	Other Information	86

Item 6.	Exhibits	86

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Part I. Financial Information

Item 1. Financial Statements (unaudited)

EverBank Financial Corp and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited)

(Dollars in thousands, except per share data)



	September 30, 2016			December 31, 2015
Assets
Cash and due from banks	$	54,380		$	55,300
Interest-bearing deposits in banks	534,284			527,151
Total cash and cash equivalents	588,664			582,451
Investment securities:
Available for sale, at fair value	486,902			555,019
Held to maturity (fair value of $105,862 and $105,448 as of September 30, 2016 and December 31, 2015, respectively)	100,928			103,746
Other investments	294,710			265,431
Total investment securities	882,540			924,196
Loans held for sale (includes $1,815,113 and $1,307,741 carried at fair value as of September 30, 2016 and December 31, 2015, respectively)	2,112,855			1,509,268
Loans and leases held for investment:
Loans and leases held for investment, net of unearned income	23,932,724			22,227,492
Allowance for loan and lease losses	(90,170		)	(78,137		)
Total loans and leases held for investment, net	23,842,554			22,149,355
Mortgage servicing rights (MSR), net	249,106			335,280
Premises and equipment, net	46,525			51,599
Other assets	980,801			1,048,877
Total Assets	$	28,703,045		$	26,601,026
Liabilities
Deposits:
Noninterest-bearing	$	2,071,154		$	1,141,357
Interest-bearing	17,572,194			17,100,685
Total deposits	19,643,348			18,242,042
Other borrowings	6,487,000			5,877,000
Trust preferred securities and subordinated notes payable	360,179			276,170
Accounts payable and accrued liabilities	316,962			337,493
Total Liabilities	26,807,489			24,732,705
Commitments and Contingencies (Note 14)
Shareholders’ Equity
Series A 6.75% Non-Cumulative Perpetual Preferred Stock, $0.01 par value (liquidation preference of $25,000 per share; 10,000,000 shares authorized; 6,000 issued and outstanding at September 30, 2016 and December 31, 2015)	150,000			150,000
Common Stock, $0.01 par value (500,000,000 shares authorized; 125,437,973 and 125,020,843 issued and outstanding at September 30, 2016 and December 31, 2015, respectively)	1,254			1,250
Additional paid-in capital	882,386			874,806
Retained earnings	962,749			906,278
Accumulated other comprehensive income (loss) (AOCI)	(100,833		)	(64,013		)
Total Shareholders’ Equity	1,895,556			1,868,321
Total Liabilities and Shareholders’ Equity	$	28,703,045		$	26,601,026

See notes to unaudited condensed consolidated financial statements.

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EverBank Financial Corp and Subsidiaries

Condensed Consolidated Statements of Income (unaudited)

(Dollars in thousands, except per share data)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Interest Income
Interest and fees on loans and leases	$	249,601		$	215,881		$	716,828		$	621,077
Interest and dividends on investment securities	6,719			7,520			21,088			22,989
Other interest income	568			226			1,349			545
Total Interest Income	256,888			223,627			739,265			644,611
Interest Expense
Deposits	39,272			31,921			117,440			91,904
Other borrowings	27,981			22,866			80,969			59,404
Total Interest Expense	67,253			54,787			198,409			151,308
Net Interest Income	189,635			168,840			540,856			493,303
Provision for Loan and Lease Losses	12,070			11,131			27,001			28,063
Net Interest Income after Provision for Loan and Lease Losses	177,565			157,709			513,855			465,240
Noninterest Income
Loan servicing fee income	23,637			27,157			69,892			90,858
Amortization of mortgage servicing rights	(19,176		)	(16,760		)	(50,457		)	(56,065		)
Recovery (impairment) of mortgage servicing rights	(23,170		)	(4,450		)	(82,584		)	(32,075		)
Net loan servicing income (loss)	(18,709		)	5,947			(63,149		)	2,718
Gain on sale of loans	43,101			18,037			103,825			101,248
Loan production revenue	7,231			5,861			19,220			17,443
Deposit fee income	2,059			3,844			7,114			10,946
Other lease income	3,919			3,714			11,602			9,876
Other	5,733			3,792			13,643			15,299
Total Noninterest Income	43,334			41,195			92,255			157,530
Noninterest Expense
Salaries, commissions and other employee benefits expense	94,052			89,369			280,614			277,124
Equipment expense	15,833			15,576			47,802			46,879
Occupancy expense	6,298			6,679			19,828			19,691
General and administrative expense	45,582			39,882			118,791			141,822
Total Noninterest Expense	161,765			151,506			467,035			485,516
Income before Provision for Income Taxes	59,134			47,398			139,075			137,254
Provision for Income Taxes	22,003			17,815			52,465			51,874
Net Income	$	37,131		$	29,583		$	86,610		$	85,380
Less: Net Income Allocated to Preferred Stock	(2,532		)	(2,532		)	(7,594		)	(7,594		)
Net Income Allocated to Common Shareholders	$	34,599		$	27,051		$	79,016		$	77,786
Basic Earnings Per Common Share	$	0.28		$	0.22		$	0.63		$	0.63
Diluted Earnings Per Common Share	$	0.27		$	0.21		$	0.62		$	0.61
Dividends Declared Per Common Share	$	0.06		$	0.06		$	0.18		$	0.14

See notes to unaudited condensed consolidated financial statements.

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EverBank Financial Corp and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (unaudited)

(Dollars in thousands)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net Income	$	37,131		$	29,583		$	86,610		$	85,380
Unrealized Gains (Losses) on Debt Securities
Net unrealized gains (losses) due to changes in fair value	2,667			(995		)	2,500			(3,090		)
Reclassification of unrealized losses (gains) to noninterest income	52			(568		)	149			(637		)
Tax effect	(1,033		)	594			(1,007		)	1,417
Change in unrealized gains (losses) on debt securities	1,686			(969		)	1,642			(2,310		)
Interest Rate Swaps
Net unrealized gains (losses) due to changes in fair value	6,135			(41,292		)	(73,863		)	(20,449		)
Reclassification of net unrealized losses to interest expense	3,889			4,050			11,823			12,693
Tax effect	(3,810		)	14,154			23,578			2,947
Change in interest rate swaps	6,214			(23,088		)	(38,462		)	(4,809		)
Other Comprehensive Income (Loss)	7,900			(24,057		)	(36,820		)	(7,119		)
Comprehensive Income (Loss)	$	45,031		$	5,526		$	49,790		$	78,261

See notes to unaudited condensed consolidated financial statements.

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EverBank Financial Corp and Subsidiaries

Condensed Consolidated Statements of Shareholders' Equity (unaudited)

(Dollars in thousands)



	Shareholders’ Equity
	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax			Total Equity
Balance, January 1, 2016	$	150,000	$	1,250	$	874,806	$	906,278		$	(64,013	)	$	1,868,321
Net income	—		—		—		86,610			—			86,610
Other comprehensive income (loss)	—		—		—		—			(36,820		)	(36,820		)
Issuance of common stock	—		4		1,795		—			—			1,799
Share-based grants (including income tax benefits)	—		—		5,785		—			—			5,785
Cash dividends on common stock	—		—		—		(22,545		)	—			(22,545		)
Cash dividends on preferred stock	—		—		—		(7,594		)	—			(7,594		)
Balance, September 30, 2016	$	150,000	$	1,254	$	882,386	$	962,749		$	(100,833	)	$	1,895,556

Balance, January 1, 2015	$	150,000	$	1,237	$	851,158	$	810,796		$	(65,597	)	$	1,747,594
Net income	—		—		—		85,380			—			85,380
Other comprehensive income (loss)	—		—		—		—			(7,119		)	(7,119		)
Issuance of common stock	—		13		13,150		—			—			13,163
Share-based grants (including income tax benefits)	—		—		8,867		—			—			8,867
Cash dividends on common stock	—		—		—		(17,422		)	—			(17,422		)
Cash dividends on preferred stock	—		—		—		(7,594		)	—			(7,594		)
Balance, September 30, 2015	$	150,000	$	1,250	$	873,175	$	871,160		$	(72,716	)	$	1,822,869

See notes to unaudited condensed consolidated financial statements.

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EverBank Financial Corp and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

(Dollars in thousands)



	Nine Months Ended September 30,
	2016			2015
Operating Activities
Net income	$	86,610		$	85,380
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization of premiums and deferred origination costs	54,646			41,313
Depreciation and amortization of tangible and intangible assets	19,510			20,411
Reclassification of net loss on settlement of interest rate swaps	11,823			12,693
Amortization and impairment of mortgage servicing rights, net of recoveries	133,041			88,140
Deferred income taxes (benefit)	(25,340		)	(1,859		)
Provision for loan and lease losses	27,001			28,063
Loss on other real estate owned (OREO)	901			3,171
Share-based compensation expense	5,749			5,916
Payments for settlement of forward interest rate swaps	(1,478		)	—
Other operating activities	145			(760		)
Changes in operating assets and liabilities:
Loans held for sale, including proceeds from sales and repayments	(465,865		)	(330,844		)
Other assets	95,896			150,169
Accounts payable and accrued liabilities	(29,937		)	(29,569		)
Net cash provided by (used in) operating activities	(87,298		)	72,224
Investing Activities
Investment securities available for sale:
Purchases	(71,106		)	(29,772		)
Proceeds from sales	2,358			48,527
Proceeds from prepayments and maturities	137,873			179,846
Investment securities held to maturity:
Purchases	(6,566		)	(11,947		)
Proceeds from prepayments and maturities	8,951			14,541
Purchases of other investments	(457,469		)	(429,764		)
Proceeds from sales of other investments	428,190			385,540
Net change in loans and leases held for investment	(2,986,089		)	(4,226,475		)
Purchases of premises and equipment, including equipment under operating leases	(22,255		)	(15,476		)
Proceeds related to sale or settlement of other real estate owned	13,775			10,933
Proceeds from insured foreclosure claims	964,795			688,772
Proceeds from sale of mortgage servicing rights	971			35,938
Other investing activities	21,362			733
Net cash provided by (used in) investing activities	(1,965,210		)	(3,348,604		)
Financing Activities
Net increase (decrease) in nonmaturity deposits	748,850			1,072,756
Net increase (decrease) in time deposits	642,967			979,752
Net change in short-term Federal Home Loan Bank (FHLB) advances	(525,000		)	(1,000		)
Proceeds from long-term FHLB advances	1,800,000			1,600,000
Repayments of long-term FHLB advances	(665,000		)	(306,000		)
Repurchase of trust preferred securities	(3,522		)	—
Proceeds from issuance of subordinated notes payable, net of issuance costs	88,731			172,286
Proceeds from issuance of common stock	2,534			13,163
Dividends paid	(30,140		)	(25,016		)
Other financing activities	(699		)	2,951
Net cash provided by (used in) financing activities	2,058,721			3,508,892
Net change in cash and cash equivalents	6,213			232,512
Cash and cash equivalents at beginning of period	582,451			366,664
Cash and cash equivalents at end of period	$	588,664		$	599,176

See Note 1 and Note 4 for disclosures related to supplemental noncash information.

See notes to unaudited condensed consolidated financial statements.

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EverBank Financial Corp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(Dollars in thousands, except per share data)

1. Organization and Basis of Presentation

a) Organization — EverBank Financial Corp (the Company) is a savings and loan holding company with two direct operating subsidiaries, EverBank (EB) and EverBank Funding, LLC (EBF). EB is a federally chartered thrift institution with its home office located in Jacksonville, Florida. EB's direct banking services are offered nationwide. In addition, EB operates financial centers in Florida and commercial and consumer lending centers across the United States. EB (a) accepts deposits from the general public; (b) originates, purchases, services,

sells and securitizes residential real estate mortgage loans, home equity loans, commercial real estate loans and commercial loans and

leases; and (c) offers full-service securities brokerage and investment advisory services.

EB’s subsidiaries are:

•AMC Holding, Inc., the parent of CustomerOne Financial Network, Inc.;

•Tygris Commercial Finance Group, Inc., the parent of EverBank Commercial Finance, Inc.;

•EverInsurance, Inc.;

•Elite Lender Services, Inc.;

•EverBank Wealth Management, Inc.; and

•Business Property Lending, Inc.

EBF facilitates the pooling and securitization of mortgage loans for issuance into the secondary market.

b) Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information or footnotes necessary for a complete presentation of the Company's financial position, results of operations, comprehensive income, and cash flows in conformity with GAAP. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes to the financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for acquired companies are included from their respective dates of acquisition. In management’s opinion, all adjustments (which include normal recurring adjustments) necessary to present fairly the Company's financial position, results of operations, comprehensive income, and changes in cash flows have been made.

GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Material estimates relate to the Company’s allowance for loan and lease losses, loans and leases acquired with evidence of credit deterioration, contingent liabilities, and the fair values of investment securities, loans held for sale, MSR and derivative instruments. Because of the inherent uncertainties associated with any estimation process and future changes in market and economic conditions, it is possible that actual results could differ significantly from those estimates.

c) Supplemental Cash Flow Information - Noncash investing activities are presented in the following table:



	Nine Months Ended September 30,
	2016		2015
Supplemental Schedules of Noncash Activities:
Loans transferred to foreclosure claims	$	979,714	$	826,295

See Note 4 for disclosures relating to noncash activities relating to loan transfers.

2. Recent Accounting Pronouncements

Credit Losses - In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments, which eliminates the probable initial recognition threshold for credit losses requiring, instead, that all financial assets (or group of financial assets) measured at amortized cost be presented at the net amount expected to be collected inclusive of the entity’s current estimate of all lifetime expected credit losses. The ASU also applies to certain off-balance-sheet credit exposures such as unfunded commitments and non-derivative financial guarantees. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) in order to present the net carrying value at the amount expected to be collected on the financial asset. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The income statement under this ASU will reflect the initial recognition of current expected credit losses for newly recognized assets, as well as any increases or decreases of expected credit losses that have occurred during the period. ASU 2016-13 retains many currently-existing disclosures related to the credit quality of an entity’s assets and the related allowance for credit losses amended to reflect the change to an expected credit loss methodology, as well as enhanced disclosures to provide information to users at a more disaggregated level. Upon adoption, ASU 2016-13 provides for a modified retrospective transition by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is effective, except for debt securities for which an other-than-temporary impairment has previously been recognized. For these debt securities, a prospective transition is provided in order to maintain the same amortized cost prior to and subsequent to the effective date of the ASU. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods with early adoption permitted for fiscal years beginning after

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December 15, 2018, and interim periods within those annual periods. The Company is currently evaluating the pending adoption of ASU 2016-13 and its impact on the Company's consolidated financial statements.

Share-Based Payment - In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718)-Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 eliminates equity treatment for tax benefits or deficiencies that result from differences between the compensation cost recognized for GAAP purposes and the related tax deduction at settlement or expiration with such changes recognized in income tax expense and excludes excess tax benefits and tax deficiencies from the calculation of assumed proceeds for earnings per share purposes since such amounts are recognized in the income statement, which will result in greater volatility in earnings per share. In addition, ASU 2016-09 simplifies the statements of cash flows by eliminating the bifurcation of excess tax benefits from operating activities to financing activities. Upon adoption, ASU 2016-09 provides for a tiered transition approach whereby amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements and forfeitures should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods with early adoption permitted. The Company is currently evaluating the pending adoption of ASU 2016-09 and its impact on the Company's consolidated financial statements.

Leases - In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which amends the existing standards for lease accounting effectively bringing most leases onto the balance sheets of the related lessees by requiring them to recognize a right-of-use asset and a corresponding lease liability, while leaving lessor accounting largely unchanged with only targeted changes incorporated into the update. ASU 2016-02 includes extensive qualitative and quantitative disclosure requirements intended to provide greater insight into the nature of an entity’s leasing activities. Upon adoption, ASU 2016-02 must be adopted using a modified retrospective transition by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted with certain practical expedients provided. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods with early adoption permitted. The Company is currently evaluating the pending adoption of ASU 2016-02 and its impact on the Company's consolidated financial statements.

Recognition and Measurement - In January 2016, the FASB issued ASU 2016-01, Financial Instruments (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities, which (1) requires equity investments that do not result in consolidation and are not accounted for under the equity method to be measured at fair value with changes recognized through net income; (2) simplifies the impairment assessment of equity investments without readily determinable fair values by allowing a qualitative assessment similar to those performed on long-lived assets, goodwill or intangibles to be utilized at each reporting period; (3) eliminates the use of the entry price method requiring all preparers to utilize the exit price notion consistent with Topic 820, Fair Value Measurement in disclosing the fair value of financial instruments measured at amortized cost; (4) requires separate disclosure within OCI of changes in the fair value of liabilities due to instrument-specific credit risk when the fair value option has been elected; and (5) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. Upon adoption, ASU 2016-01 provides for a cumulative-effect adjustment to retained earnings except for the impacts of amendments 2 and 3 above, which are prospective in nature. ASU 2016-01 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods with early adoption allowable only for amendment 4 above. The Company is currently evaluating the pending adoption of ASU 2016-01 and its impact on the Company's consolidated financial statements.

Consolidation - In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis, which (1) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIE) or voting interest entities; (2) eliminates the presumption that a general partner should consolidate a limited partnership; (3) affects the consolidation analysis of reporting entities involved with VIEs that have fee arrangements and related party relationships; and (4) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. ASU 2015-02 was effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods with early adoption permitted. The adoption of ASU 2015-02 did not have a material impact on the Company's consolidated financial statements.

Hybrid Financial Instruments - In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815) -

Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or Equity, which will

eliminate diversity in practice associated with the accounting for hybrid financial instruments issued in the form of a share. ASU 2014-16 clarifies

that no single term or feature, stated or implied, would necessarily determine the economic characteristics and risks of the host contract in

determining whether it is more akin to debt or equity. Although an individual term or feature may weigh more heavily in the evaluation, the final

determination must be made based on all economic characteristics and risks of the entire hybrid financial instrument. Once the nature of the host contract is determined, any embedded features considered to be derivatives would be evaluated for bifurcation from the host contract. ASU

2014-16 was effective for annual reporting periods beginning on or after December 15, 2015, and interim periods within those annual periods. The Company notes that its Series A Preferred Shares were determined upon issuance to be more akin to equity with no embedded features having been determined to be derivatives. As such, the adoption of ASU 2014-16 did not have a material impact on the Company’s

consolidated financial statements.

Revenue from Contracts with Customers - In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Subtopic 606), which supersedes the guidance in former Accounting Standards Codification (ASC) 605, Revenue Recognition. ASU 2014-09 clarifies the principles for recognizing revenue in order to improve comparability of revenue recognition practices across entities and industries with certain scope exceptions including financial instruments, leases, and guarantees. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. To satisfy this objective, ASU 2014-09 provides guidance intended to assist in the identification of contracts with customers and separate performance obligations within those contracts, the determination and allocation of the transaction price to those identified performance obligations and the recognition of revenue when a performance obligation has been satisfied. ASU 2014-09 also implements enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash

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flows from contracts with customers. The effective date of ASU 2014-09 has been deferred by one year from its original effective date through the August 2015 issuance of ASU 2015-14 and thus is effective for annual reporting periods beginning on or after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Upon adoption, ASU 2014-09 provides for transition through either a full retrospective approach requiring the restatement of all presented prior periods or a modified retrospective approach, which allows the new recognition standard to be applied to only those contracts that are not completed at the date of transition. If the modified retrospective approach is adopted, a cumulative-effect adjustment to retained earnings is performed with additional disclosures required including the amount by which each line item is affected by the transition as compared to the guidance in effect before adoption and an explanation of the reasons for significant changes in these amounts. The Company is currently evaluating the pending adoption of ASU 2014-09 and its impact on its consolidated financial statements and has not yet identified which transition method will be applied upon adoption.

3. Investment Securities

The amortized cost, gross unrealized gains, gross unrealized losses, fair value and carrying amount of investment securities were as follows as of September 30, 2016 and December 31, 2015:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Carrying Amount
September 30, 2016
Available for sale:
Residential collateralized mortgage obligations (CMO) securities - nonagency	$	456,210	$	2,667	$	5,423	$	453,454	$	453,454
U.S. Treasury securities	31,833		—		—		31,833		31,833
Asset-backed securities (ABS)	1,460		—		252		1,208		1,208
Other	230		177		—		407		407
Total available for sale securities	$	489,733	$	2,844	$	5,675	$	486,902	$	486,902
Held to maturity:
Residential CMO securities - agency	$	6,781	$	177	$	—	$	6,958	$	6,781
Residential mortgage-backed securities (MBS) - agency	94,147		4,814		57		98,904		94,147
Total held to maturity securities	$	100,928	$	4,991	$	57	$	105,862	$	100,928
December 31, 2015
Available for sale:
Residential CMO securities - nonagency	$	558,621	$	1,728	$	7,091	$	553,258	$	553,258
ABS	1,632		—		280		1,352		1,352
Other	248		161		—		409		409
Total available for sale securities	$	560,501	$	1,889	$	7,371	$	555,019	$	555,019
Held to maturity:
Residential CMO securities - agency	$	13,065	$	269	$	—	$	13,334	$	13,065
Residential MBS - agency	90,681		1,973		540		92,114		90,681
Total held to maturity securities	$	103,746	$	2,242	$	540	$	105,448	$	103,746

At September 30, 2016 and December 31, 2015, investment securities with a carrying value of $129,947 and $145,904, respectively, were pledged to secure other borrowings and for other purposes as required or permitted by law.

For the three and nine months ended September 30, 2016, no gross gains and $52 in gross losses were realized on available for sale investments. For the three and nine months ended September 30, 2015, there were $568 and $637, respectively, of gross gains realized on available for sale investments, with no gross losses having been realized. The cost of investments sold is calculated using the specific identification method.

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The gross unrealized losses and fair value of the Company’s investments with unrealized losses, aggregated by investment category and the length of time individual securities have been in a continuous unrealized loss position, at September 30, 2016 and December 31, 2015 were as follows:



	Less Than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2016
Debt securities:
Residential CMO securities - nonagency	$	40,109	$	179	$	193,669	$	5,244	$	233,778	$	5,423
Residential MBS - agency	12,804		55		934		2		13,738		57
ABS	—		—		1,208		252		1,208		252
Total debt securities	$	52,913	$	234	$	195,811	$	5,498	$	248,724	$	5,732
December 31, 2015
Debt securities:
Residential CMO securities - nonagency	$	173,705	$	1,003	$	221,180	$	6,088	$	394,885	$	7,091
Residential MBS - agency	28,514		313		9,171		227		37,685		540
ABS	—		—		1,352		280		1,352		280
Total debt securities	$	202,219	$	1,316	$	231,703	$	6,595	$	433,922	$	7,911

The Company had unrealized losses at September 30, 2016 and December 31, 2015 on residential nonagency CMO securities, residential agency MBS, and ABS. These unrealized losses are primarily attributable to weak market conditions. Based on the nature of the impairment, these unrealized losses are considered temporary. The Company does not intend to sell nor is it more likely than not that it will be required to sell these investments before their anticipated recoveries.

At September 30, 2016, the Company had 61 debt securities in an unrealized loss position. A total of 17 securities were in an unrealized loss position for less than 12 months. These 17 securities consisted of 15 residential nonagency CMO securities and two residential agency MBS. The remaining 44 debt securities were in an unrealized loss position for 12 months or longer. These 44 securities consisted of 40 residential nonagency CMO securities, three ABS, and one residential agency MBS. Of the $5,732 in unrealized losses, $3,277 relate to debt securities that are rated investment grade with the remainder representing securities for which the Company believes it has both the intent and ability to hold to recovery.

At December 31, 2015, the Company had 72 debt securities in an unrealized loss position. A total of 30 were in an unrealized loss position for less than 12 months. These 30 securities consisted of 20 residential nonagency CMO securities and 10 residential agency MBS. The remaining 42 debt securities were in an unrealized loss position for 12 months or longer. These 42 securities consisted of three ABS, two residential agency MBS and 37 residential nonagency CMO securities. Of the $7,911 in unrealized losses, $5,298 relate to debt securities that are rated investment grade with the remainder representing securities for which the Company believes it has both the intent and ability to hold to recovery.

When certain triggers indicate the likelihood of an other-than-temporary impairment (OTTI) or the qualitative evaluation performed cannot support the expectation of recovering the entire amortized cost basis of an investment, the Company performs cash flow analyses that project prepayments, default rates and loss severities on the collateral supporting each security. If the net present value of the investment is less than the amortized cost, the difference is recognized in earnings as a credit-related impairment, while the remaining difference between the fair value and the amortized cost is recognized in AOCI.

There was no credit-related OTTI recognized for the three months ended September 30, 2016. During the nine months ended September 30, 2016, the Company recognized credit-related OTTI of $97 on available for sale nonagency residential CMO securities. These credit-related OTTI losses represented additional declines in fair value on a security that was deemed OTTI at December 31, 2015. During the three and nine months ended September 30, 2015, the Company recognized no credit-related OTTI related to available for sale or held to maturity securities. There were no non-credit related OTTI losses recognized on available for sale securities or held to maturity securities for the three and nine months ended September 30, 2016 or 2015.

During the three and nine months ended September 30, 2016 and 2015, interest and dividend income on investment securities was comprised of the following:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Interest income on available for sale securities	$	3,128	$	4,279	$	10,294	$	14,066
Interest income on held to maturity securities	702		755		2,165		2,347
Other interest and dividend income	2,889		2,486		8,629		6,576
	$	6,719	$	7,520	$	21,088	$	22,989

All investment interest income recognized by the Company during the three and nine months ended September 30, 2016 and 2015 was fully taxable.

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4. Loans Held for Sale

Loans held for sale as of September 30, 2016 and December 31, 2015, consisted of the following:



	September 30, 2016		December 31, 2015
Mortgage warehouse (carried at fair value)	$	947,921	$	624,726
Other residential (carried at fair value)	867,192		683,015
Total loans held for sale carried at fair value	1,815,113		1,307,741
Other residential	206,774		22,774
Commercial and commercial real estate	90,968		178,753
Total loans held for sale carried at lower of cost or market	297,742		201,527
Total loans held for sale	$	2,112,855	$	1,509,268

The Company has elected the fair value option for loans it originates with the intent to market and sell in the secondary market either through third party sales or securitizations. Mortgage warehouse loans are largely comprised of agency deliverable products that the Company typically sells within three months subsequent to origination. The Company economically hedges the mortgage warehouse portfolio with forward purchase and sales commitments designed to protect against potential changes in fair value. Due to the short duration that these loans are present on the balance sheet and in part due to the burden of complying with the requirement of hedge accounting, the Company has elected fair value accounting on this portfolio of loans. The Company has also elected the fair value option for originated fixed-rate jumbo loans due to the short duration that these loans are present on the balance sheet. Electing to use fair value accounting allows a better offset of the changes in the fair value of the loans and the derivative instruments used to economically hedge these loans without the burden of complying with the requirements of hedge accounting. The Company has not elected the fair value option for other residential mortgage and commercial and commercial real estate loans as the majority of these loans were transferred from the held for investment portfolio and are expected to be sold within a short period subsequent to transfer. These loans are carried at the lower of cost or market value.

Other residential loans held at the lower of cost or market value represent government insured pool buyouts that have re-performed and are now eligible to be re-securitized or sold to third parties and other residential mortgage loans for which the Company has changed its intent and has made a decision to sell the loans and as such transferred the loans to held for sale. A majority of these other residential mortgage loans consist of jumbo preferred adjustable rate mortgage (ARM) loans. Commercial and commercial real estate loans represent multi-family loans which the Company is actively marketing to sell. As the Company no longer has the intent to hold these loans for the foreseeable future, the loans were transferred to held for sale. Residential loans, commercial and commercial real estate loans and equipment financing receivables are transferred to the held for sale portfolio when the Company has entered into a commitment to sell a specific portion of its held for investment portfolio or when the Company has a formal marketing strategy and intends to sell a certain loan product.

In conjunction with the sale of loans and leases, the Company may be exposed to limited liability related to recourse agreements and repurchase agreements made to its insurers and purchasers, which are included in commitments and contingencies in Note 14. Commitments and contingencies include amounts related to loans sold that the Company may be required to repurchase, or otherwise indemnify or reimburse the investor or insurer for losses incurred, due to a breach with respect to Government Sponsored Enterprises (GSE) purchasers or a material breach with respect to non-GSE purchasers, of contractual representations and warranties. Refer to Note 14 for the maximum exposure to loss for material breach of contractual representations and warranties.

The following is a summary of cash flows related to transfers accounted for as sales for the three and nine months ended September 30, 2016 and 2015:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Proceeds received from residential agency securitizations	$	1,269,059	$	1,240,727	$	3,114,627	$	3,416,119

Proceeds received from nonsecuritization sales - residential	830,865		610,080		3,499,048		2,258,236
Proceeds received from nonsecuritization sales - commercial and commercial real estate	48,219		61,388		453,658		164,667
Proceeds received from nonsecuritization sales - equipment financing receivables	45,902		3,312		169,479		43,441
Proceeds received from nonsecuritization sales	$	924,986	$	674,780	$	4,122,185	$	2,466,344

Repurchased loans from residential agency sales and securitizations	$	580	$	2,212	$	4,737	$	4,733
Repurchased loans from residential nonagency sales	2,991		2,420		5,626		7,797
Repurchased loans from commercial sales and securitizations ⁽¹⁾	—		—		74,987		105,651


(1)	Represents loans that were voluntarily repurchased out of the Business Lending Trusts through a clean-up call. Of those loans repurchased during the nine months ended September 30, 2016, all were subsequently sold to third parties by September 30, 2016. Of those loans repurchased in 2015, all were subsequently sold to third parties during the nine months ended September 30, 2015.

In connection with these transfers, the Company recorded servicing assets in the amount of $17,175 and $48,141 for the three and nine months ended September 30, 2016 and $17,287 and $46,110 for the three and nine months ended September 30, 2015. All servicing assets are initially recorded at fair value using a Level 3 measurement technique. Refer to Note 7 for information relating to servicing activities and MSR and Note 13 for a description of the valuation process. The gains and losses on the transfers which qualified as sales are recorded in

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the condensed consolidated statements of income in gain on sale of loans, which includes the gain or loss on sale, change in fair value related to fair value option loans, and the change in fair value related to offsetting hedging positions.

The following is a summary of transfers of loans from held for investment to held for sale and transfers of loans from held for sale to held for investment for the three and nine months ended September 30, 2016 and 2015.



	Three Months Ended September 30,				Nine Months Ended September 30,
Loans Transferred from Held for Investment (LHFI) to Held for Sale (LHFS)	2016		2015		2016		2015
Residential mortgages	$	396,982	$	89,849	$	1,261,072	$	799,570
Government insured pool buyouts	479,142		218,413		1,380,678		704,085
Commercial and commercial real estate	47,002		348,875		317,863		348,875
Equipment financing receivables	44,098		3,130		161,830		40,320
Total transfers from LHFI to LHFS	$	967,224	$	660,267	$	3,121,443	$	1,892,850

Loans Transferred from LHFS to LHFI
Residential mortgages	$	61,717	$	1,706	$	87,872	$	195,760
Government insured pool buyouts	205		—		205		—
Commercial and commercial real estate	—		—		28,753		—
Total transfers from LHFS to LHFI	$	61,922	$	1,706	$	116,830	$	195,760

Loans and leases are transferred from LHFI to LHFS when the Company no longer has the intent to hold the loans and leases for the foreseeable future. Loans and leases are transferred from LHFS to LHFI when the Company determines that it intends to hold the loans and leases for the foreseeable future and no longer has the intent to sell such loans and leases. Loan transfers from LHFS to LHFI and transfers from LHFI to LHFS represent noncash activities within the operating and investing sections of the statement of cash flows.

5. Loans and Leases Held for Investment, Net

Loans and leases held for investment as of September 30, 2016 and December 31, 2015 are comprised of the following:



	September 30, 2016			December 31, 2015
Residential mortgages	$	11,792,741		$	11,717,122
Commercial and commercial real estate	8,454,393			7,607,676
Equipment financing receivables	2,512,435			2,400,909
Home equity lines and other	1,173,155			501,785
Total loans and leases held for investment, net of unearned income	23,932,724			22,227,492
Allowance for loan and lease losses	(90,170		)	(78,137		)
Total loans and leases held for investment, net	$	23,842,554		$	22,149,355

As of September 30, 2016 and December 31, 2015, the carrying values presented above include net purchased loan and lease discounts and net deferred loan and lease origination costs as follows:



	September 30, 2016		December 31, 2015
Net purchased loan and lease discounts	$	82,560	$	45,770
Net deferred loan and lease origination costs	125,346		123,255

During the nine months ended September 30, 2016 and 2015, unpaid principal balance (UPB) for significant third-party purchases of loans that impacted the Company's LHFI portfolio are as follows:



	September 30, 2016		September 30, 2015
Residential mortgages⁽¹⁾	$	3,637,376	$	2,138,426
Commercial credit facilities	308,718		521,026
Home equity lines of credit	256,926		—

⁽¹⁾ Included in this amount are government insured pool buyouts.

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Acquired Credit Impaired (ACI) Loans and Leases — At acquisition, the Company estimates the fair value of acquired loans and leases by segregating the portfolio into pools with similar risk characteristics. Fair value estimates for acquired loans and leases require estimates of the amounts and timing of expected future principal, interest and other cash flows. For each pool, the Company uses certain loan and lease information, including outstanding principal balance, probability of default and the estimated loss in the event of default to estimate the expected future cash flows for each loan and lease pool.

Acquisition date details of loans and leases acquired with evidence of credit deterioration during the nine months ended September 30, 2016 and 2015 are as follows:



	September 30, 2016		September 30, 2015
Contractual payments receivable for acquired loans and leases at acquisition	$	5,919,935	$	3,319,606
Expected cash flows for acquired loans and leases at acquisition	3,719,586		2,152,753
Basis in acquired loans and leases at acquisition	3,492,752		1,986,531

Information pertaining to the ACI portfolio as of September 30, 2016 and December 31, 2015 is as follows:



	Residential		Commercial and Commercial Real Estate		Total
September 30, 2016
Carrying value, net of allowance	$	4,454,094	$	67,908	$	4,522,002
Outstanding unpaid principal balance	4,533,401		72,670		4,606,071
Allowance for loan and lease losses, beginning of period	7,031		346		7,377
Allowance for loan and lease losses, end of period	5,795		—		5,795
December 31, 2015
Carrying value, net of allowance	$	3,449,385	$	110,984	$	3,560,369
Outstanding unpaid principal balance	3,503,138		117,051		3,620,189
Allowance for loan and lease losses, beginning of year	5,974		2,042		8,016
Allowance for loan and lease losses, end of year	7,031		346		7,377

The Company recorded reductions of provision for loan loss of $1,585 and $253 for the ACI portfolio for the nine months ended September 30, 2016 and 2015, respectively. The adjustments to provision are the result of changes in expected cash flows on ACI loans.

The following is a summary of the accretable yield activity for the ACI loans during the nine months ended September 30, 2016 and 2015:



	Residential			Commercial and Commercial Real Estate			Total
September 30, 2016
Balance, beginning of period	$	252,841		$	43,690		$	296,531
Additions	226,834			—			226,834
Accretion	(149,326		)	(5,436		)	(154,762		)
Reclassifications to (from) accretable yield	(11,735		)	(3,457		)	(15,192		)
Transfer from loans held for investment to loans held for sale	—			(3,304		)	(3,304		)
Balance, end of period	$	318,614		$	31,493		$	350,107
September 30, 2015
Balance, beginning of period	$	240,650		$	61,256		$	301,906
Additions	166,222			—			166,222
Accretion	(97,781		)	(8,986		)	(106,767		)
Reclassifications to (from) accretable yield	(83,712		)	(6,022		)	(89,734		)
Balance, end of period	$	225,379		$	46,248		$	271,627

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6. Allowance for Loan and Lease Losses

Changes in the allowance for loan and lease losses for the three and nine months ended September 30, 2016 and 2015 are as follows:



Three Months Ended September 30, 2016	Residential Mortgages			Commercial and Commercial Real Estate			Equipment Financing Receivables			Home Equity Lines and Other			Total
Balance, beginning of period	$	25,787		$	37,444		$	15,191		$	5,828		$	84,250
Provision for loan and lease losses	1,816			2,627			6,355			1,272			12,070
Charge-offs	(2,290		)	(79		)	(4,006		)	(505		)	(6,880		)
Recoveries	57			133			488			52			730
Balance, end of period	$	25,370		$	40,125		$	18,028		$	6,647		$	90,170
Three Months Ended September 30, 2015
Balance, beginning of period	$	24,385		$	26,942		$	10,391		$	4,373		$	66,091
Provision for loan and lease losses	4,142			5,279			2,761			(1,051		)	11,131
Charge-offs	(2,630		)	(406		)	(2,703		)	(353		)	(6,092		)
Recoveries	91			4			602			70			767
Balance, end of period	$	25,988		$	31,819		$	11,051		$	3,039		$	71,897




Nine Months Ended September 30, 2016	Residential Mortgages			Commercial and Commercial Real Estate			Equipment Financing Receivables			Home Equity Lines and Other			Total
Balance, beginning of period	$	26,951		$	34,875		$	12,187		$	4,124		$	78,137
Provision for loan and lease losses	4,169			5,184			14,327			3,321			27,001
Charge-offs	(6,311		)	(147		)	(10,505		)	(1,000		)	(17,963		)
Recoveries	561			213			2,019			202			2,995
Balance, end of period	$	25,370		$	40,125		$	18,028		$	6,647		$	90,170
Nine Months Ended September 30, 2015
Balance, beginning of period	$	25,098		$	23,095		$	8,649		$	4,004		$	60,846
Provision for loan and lease losses	8,304			10,924			9,071			(236		)	28,063
Charge-offs	(7,616		)	(2,424		)	(8,172		)	(979		)	(19,191		)
Recoveries	202			224			1,503			250			2,179
Balance, end of period	$	25,988		$	31,819		$	11,051		$	3,039		$	71,897

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The following tables provide a breakdown of the allowance for loan and lease losses and the recorded investment in loans and leases based on the method for determining the allowance as of September 30, 2016 and December 31, 2015:



September 30, 2016	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		ACI Loans		Total
Allowance for Loan and Lease Losses
Residential mortgages	$	2,202	$	17,373	$	5,795	$	25,370
Commercial and commercial real estate	12,970		27,155		—		40,125
Equipment financing receivables	1,450		16,578		—		18,028
Home equity lines and other	—		6,647		—		6,647
Total allowance for loan and lease losses	$	16,622	$	67,753	$	5,795	$	90,170
Loans and Leases Held for Investment at Recorded Investment
Residential mortgages	$	18,112	$	7,314,740	$	4,459,889	$	11,792,741
Commercial and commercial real estate	110,356		8,276,129		67,908		8,454,393
Equipment financing receivables	19,550		2,492,885		—		2,512,435
Home equity lines and other	—		1,173,155		—		1,173,155
Total loans and leases held for investment	$	148,018	$	19,256,909	$	4,527,797	$	23,932,724

December 31, 2015	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		ACI Loans		Total
Allowance for Loan and Lease Losses
Residential mortgages	$	2,206	$	17,714	$	7,031	$	26,951
Commercial and commercial real estate	7,743		26,786		346		34,875
Equipment financing receivables	91		12,096		—		12,187
Home equity lines and other	—		4,124		—		4,124
Total allowance for loan and lease losses	$	10,040	$	60,720	$	7,377	$	78,137
Loans and Leases Held for Investment at Recorded Investment
Residential mortgages	$	18,185	$	8,242,521	$	3,456,416	$	11,717,122
Commercial and commercial real estate	81,304		7,415,042		111,330		7,607,676
Equipment financing receivables	4,393		2,396,516		—		2,400,909
Home equity lines and other	—		501,785		—		501,785
Total loans and leases held for investment	$	103,882	$	18,555,864	$	3,567,746	$	22,227,492

The Company uses a risk grading matrix to monitor credit quality for commercial and commercial real estate loans. Risk grades are continuously monitored and updated by credit administration personnel based on current information and events. The Company monitors the credit quality of all other loan types based on performing status.

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The following tables present the recorded investment for loans and leases by credit quality indicator as of September 30, 2016 and December 31, 2015:



			Non-performing
	Performing		Accrual		Nonaccrual		Total
September 30, 2016
Residential mortgages:
Residential ⁽¹⁾	$	6,620,153	$	—	$	33,373	$	6,653,526
Government insured pool buyouts ^{(2) (3)}	4,897,262		241,953		—		5,139,215
Equipment financing receivables	2,474,758		—		37,677		2,512,435
Home equity lines and other	1,166,414		—		6,741		1,173,155
Total	$	15,158,587	$	241,953	$	77,791	$	15,478,331

	Pass		Special Mention		Substandard		Doubtful		Total
September 30, 2016
Commercial and commercial real estate:
Commercial real estate	$	3,510,002	$	13,824	$	125,268	$	—	$	3,649,094
Mortgage warehouse finance	3,076,511		—		—		—		3,076,511
Lender finance	1,495,585		—		—		—		1,495,585
Other commercial finance	213,908		19,295		—		—		233,203
Total commercial and commercial real estate	$	8,296,006	$	33,119	$	125,268	$	—	$	8,454,393

			Non-performing
	Performing		Accrual		Nonaccrual		Total
December 31, 2015
Residential mortgages:
Residential ⁽¹⁾	$	7,469,855	$	—	$	31,912	$	7,501,767
Government insured pool buyouts ^{(2) (3)}	3,873,603		341,752		—		4,215,355
Equipment financing receivables	2,383,502		—		17,407		2,400,909
Home equity lines and other	498,446		—		3,339		501,785
Total	$	14,225,406	$	341,752	$	52,658	$	14,619,816



	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2015
Commercial and commercial real estate:
Commercial real estate	$	3,609,808	$	23,070	$	111,134	$	—	$	3,744,012
Mortgage warehouse finance	2,372,731		—		—		—		2,372,731
Lender finance	1,280,423		—		—		—		1,280,423
Other commercial finance	208,763		—		1,747		—		210,510
Total commercial and commercial real estate	$	7,471,725	$	23,070	$	112,881	$	—	$	7,607,676


(1)	For the periods ended September 30, 2016 and December 31, 2015, performing residential mortgages included $3,823 and $5,148, respectively, of ACI loans 90 days or greater past due and still accruing.


(2)	For the periods ended September 30, 2016 and December 31, 2015, performing government insur