They have reduced selling originated Residential loans to the GSEs and instead retained them on the balance sheet to offset all the deleveraging in the other segments. It's that simple."
Spin - Thanks for the information but I disagree -it's not that simple.
1. Vs. the start of 2010, bbt has not been running down the balance of loans held for sale. It's about the same at about $2.0 billion.
2. Bbt has runoff about $800 million or 21% of alt-a and subprime residential loans from their mortgage portfolio over the last year and has still been growing their portfolio while loans held for sale have remained flat vs. start of 2010.
3. The data you provided on the loan amounts does not factor in the $1.9 billion (principal amount) of loans moved to loans held for sale at 9/30/10. I think they took a 45% mark originally so the book amount is $1.1 billion. Big # which materially impacts the data you provided.
"The data you provided on the loan amounts does not factor in the $1.9 billion (principal amount) of loans moved to loans held for sale at 9/30/10. "
Yes, the data I provided excluded HFS for the first 3 examples and the last example included it.
"End of period loans inc ADC, inc covered and inc HFS Q1 - 104,887 Q4 - 107,264 down 2377 / 8.86% annualized. "
There is probably one contorted example in the 9 combinations of including and excluding HFS/ADC/Covered that King could use to make it look like the loan balance is increasing.
"Spin - Thanks for the information but I disagree -it's not that simple."
Yes it is that simple - From the 10-k
"A majority of the mortgage loans originated were sold in the secondary market during 2010. During the third quarter of 2010, management made the decision to retain a portion of its 10 to 15 year fixed- and variable-rate production."