Annual report pursuant to Section 13 and 15(d)

Federal Home Loan Bank of Des Moines Advances Federal Home Loan Bank of Des Moines Advances (Notes)

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Federal Home Loan Bank of Des Moines Advances Federal Home Loan Bank of Des Moines Advances (Notes)
 12 Months Ended
Dec. 31, 2014
Advances from Federal Home Loan Banks [Abstract]  
Federal Home Loan Bank Advances, Disclosure [Text Block]
Federal Home Loan Bank of Des Moines Advances
In December 2013, the Company’s wholly owned subsidiary, TH Insurance, was accepted for membership in 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 December 31, 2014, TH Insurance had $2.5 billion in outstanding secured advances with a weighted average borrowing rate of 0.3%, and no additional unused capacity to borrow. Subsequent to December 31, 2014, TH Insurance’s aggregate borrowing capacity was increased to $4.0 billion. To the extent TH Insurance has unused capacity, it may be adjusted at the sole discretion of the FHLB. As of December 31, 2013, TH Insurance had not requested any secured advances and had $1.0 billion of available uncommitted credit for borrowings.
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 non-Agency RMBS with an A rating and above.
At December 31, 2014 and December 31, 2013, FHLB advances had the following remaining maturities:
(in thousands)
December 31,
2014
 
December 31,
2013
≤ 1 year
$
33,738

 
$
—

> 1 and ≤ 3 years
651,238

 
—

> 3 and ≤ 5 years
815,024

 
—

> 5 and ≤ 10 years
—

 
—

> 10 years
1,000,000

 
—

Total
$
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)
December 31,
2014
 
December 31,
2013
Available-for-sale securities, at fair value
$
2,284,532

 
$
—

Mortgage loans held-for-sale, at fair value
397,656

 
—

Net economic interests in consolidated securitization trusts (1)
80,732

 


Total
$
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 December 31, 2014 and December 31, 2013, the Company had stock in the FHLB totaling $100.0 million and $10,000, respectively, which is included in other assets on the consolidated balance sheet. 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 December 31, 2014 and December 31, 2013, the Company had not recognized an impairment charge related to its FHLB stock.