NYCB 2017 Annual Report

69 The following table presents the extent to which changes in interest rates and changes in the volume of interest- earning assets and interest-bearing liabilities affected our interest income and interest expense during the periods indicated. Information is provided in each category with respect to (i) the changes attributable to changes in volume (changes in volume multiplied by prior rate); (ii) the changes attributable to changes in rate (changes in rate multiplied by prior volume); and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate. Rate/Volume Analysis Year Ended Year Ended December 31, 2017 December 31, 2016 Compared to Year Ended Compared to Year Ended December 31, 2016 December 31, 2015 Increase/(Decrease) Increase/(Decrease) Due to Due to (in thousands) Volume Rate Net Volume Rate Net INTEREST-EARNING ASSETS: Mortgage and other loans, net $ (25,239) $ (29,544) $ (54,783) $ 92,003 $ (61,445) $ 30,558 Securities and money market investments 12,369 (50,216) (37,847) (121,091) 73,818 (47,273) Total (12,870) (79,760) (92,630) (29,088) 12,373 (16,715) INTEREST-BEARING LIABILITIES: Interest-bearing checking and money market accounts $ (2,388) $ 39,202 $ 36,814 $ 2,478 $ 13,221 $ 15,699 Savings accounts (4,109) 574 (3,535) (9,847) (8,947) (18,794) Certificates of deposit 15,141 10,339 25,480 13,379 590 13,969 Borrowed funds (13,498) 19,488 5,990 (16,766) (890,130) (906,896) Total (4,854) 69,603 64,749 (10,756) (885,266) (896,022) Change in net interest income $ (8,016) $(149,363) $(157,379) $ (18,332) $ 897,639 $ 879,307 Provision for (Recoveries of) Loan Losses Provision for (Recovery of) Losses on Non-Covered Loans The provision for losses on non-covered loans, like the recovery of non-covered loan losses, is based on the methodology used by management in calculating the allowance for losses on such loans. Reflecting this methodology, which is discussed in detail und er “Critical Accounting Policies” earlier in this report. For the twelve months ended December 31, 2017, the Company reported a $60.9 million provision for losses on non-covered loans as compared to $11.9 million for the twelve months ended December 31, 2016. The year-over-year increase was related to the aforementioned taxi medallion-related charge-offs during the third quarter of 2017. Reflecting the 2017 provision and twelve-month net charge-offs of $61.2 million, the allowance for losses on non-covered loans of $158.0 million was relatively unchanged at the end of this December compared to $158.3 million at the prior year-end. Recovery of Losses on Covered Loans For full-year 2017, the Company recovered $23.7 million on certain pools of acquired loans covered by FDIC loss-sharing agreements, as compared to $7.7 million for full-year 2016. The recoveries recorded in the respective years were largely offset by FDIC indemnification expense of $19.0 million and $6.2 million recorded in “Non - interest income .” On July 28, 2017, the Company completed the sale of its covered loans to an affiliate of Cerberus. Accordingly, at December 31, 2017, the Company no longer had any covered loans and related FDIC loss share receivable on its balance sheet. For additional information about our methodologies for recording recoveries of, and provisions for, loan losses, see the discussion of the respective loan loss allowances under “Critical Accounting Policies” and the discussion of “Asset Quality” that appear earlier in this report. Non-Interest Income We generate non-interest income through a variety of sources, including — among others — fee income (in the form of retail deposit fees and charges on loans); income from our investment in BOLI; gains on sales of securities;