Quarterly report pursuant to Section 13 or 15(d)

Federal Home Loan Bank Advances (Notes)

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Federal Home Loan Bank Advances (Notes)
 9 Months Ended
Sep. 30, 2015
Advances from Federal Home Loan Banks [Abstract]  
Federal Home Loan Bank Advances, Disclosure [Text Block]
Federal Home Loan Bank of Des Moines Advances
The Company’s wholly owned subsidiary, TH Insurance Holdings Company LLC, or TH Insurance, is a member of the FHLB. As a member of the FHLB, TH Insurance has access to a variety of products and services offered by the FHLB, including secured advances. As of September 30, 2015 and December 31, 2014, TH Insurance had $3.7 billion and $2.5 billion in outstanding secured advances with a weighted average borrowing rate of 0.38% and 0.34%, respectively, and had an additional $290.0 million of available uncommitted capacity for borrowings as of September 30, 2015. As of December 31, 2014, TH Insurance had no additional uncommitted capacity to borrow. To the extent TH Insurance has uncommitted capacity, it may be adjusted at the sole discretion of the FHLB.
The ability to borrow from the FHLB is subject to the Company’s continued creditworthiness, pledging of sufficient eligible collateral to secure advances, and compliance with certain agreements with the FHLB. Each advance requires approval by the FHLB and is secured by collateral in accordance with the FHLB’s credit and collateral guidelines, as may be revised from time to time by the FHLB. Eligible collateral may include conventional 1-4 family residential mortgage loans, commercial real estate loans, Agency RMBS and certain non-Agency RMBS with a rating of A and above.
At September 30, 2015 and December 31, 2014, FHLB advances had the following remaining maturities:
(in thousands)
September 30,
2015
 
December 31,
2014
≤ 1 year
$
—

 
$
33,738

> 1 and ≤ 3 years
651,238

 
651,238

> 3 and ≤ 5 years
815,024

 
815,024

> 5 and ≤ 10 years
—

 
—

> 10 years
2,243,738

 
1,000,000

Total
$
3,710,000

 
$
2,500,000


The following table summarizes assets at carrying values that are pledged or restricted as collateral for the future payment obligations of FHLB advances:
(in thousands)
September 30,
2015
 
December 31,
2014
Available-for-sale securities, at fair value
$
2,867,105

 
$
2,284,532

Residential mortgage loans held-for-sale, at fair value
693,298

 
397,656

Net economic interests in consolidated securitization trusts (1)
556,458

 
80,732

Total
$
4,116,861

 
$
2,762,920

____________________
(1)
Includes the retained interests from the Company’s on-balance sheet securitizations, which are eliminated in consolidation in accordance with U.S. GAAP.

The FHLB retains the right to mark the underlying collateral for FHLB advances to fair value. A reduction in the value of pledged assets would require the Company to provide additional collateral. In addition, as a condition to membership in the FHLB, the Company is required to purchase and hold a certain amount of FHLB stock, which is based, in part, upon the outstanding principal balance of advances from the FHLB. At September 30, 2015 and December 31, 2014, the Company had stock in the FHLB totaling $153.7 million and $100.0 million, respectively, which is included in other assets on the condensed consolidated balance sheets. FHLB stock is considered a non-marketable, long-term investment, is carried at cost and is subject to recoverability testing under applicable accounting standards. This stock can only be redeemed or sold at its par value, and only to the FHLB. Accordingly, when evaluating FHLB stock for impairment, the Company considers the ultimate recoverability of the par value rather than recognizing temporary declines in value. As of September 30, 2015 and December 31, 2014, the Company had not recognized an impairment charge related to its FHLB stock.