v3.25.1
Servicing Assets
 3 Months Ended
Mar. 31, 2025
Transfers and Servicing [Abstract]  
Servicing Assets Servicing Assets
Loans serviced for others are not included in the accompanying Unaudited Condensed Consolidated Balance Sheets. The unpaid principal balance of loans serviced for others requiring recognition of a servicing asset was $3.57 billion and $3.46 billion at March 31, 2025 and December 31, 2024, respectively. The unpaid principal balance for all loans serviced for others was $4.95 billion and $4.72 billion at March 31, 2025 and December 31, 2024, respectively.
The following table summarizes the activity pertaining to servicing rights measured at fair value:
Three Months Ended
March 31,
20252024
Balance at beginning of period$55,788 $48,186 
Additions, net5,624 3,520 
Fair value changes:
Due to changes in valuation inputs or assumptions(1,095)221 
Decay due to increases in principal paydowns or runoff(3,633)(2,965)
Balance at end of period$56,684 $48,962 
See Note 9. Fair Value of Financial Instruments for further details about servicing assets measured at fair value.
The fair value of servicing rights was determined using a weighted average discount rate of 13.5% on March 31, 2025 and 14.5% on March 31, 2024. The fair value of servicing rights was determined using a weighted average prepayment speed of 16.0% on March 31, 2025 and 15.7% on March 31, 2024, with the actual rate depending on the stratification of the specific right. Changes to fair value are reported in loan servicing asset revaluation within the Unaudited Condensed Consolidated Statements of Income.
The table below reflects the sensitivity of the current fair value of servicing assets to immediate adverse changes in the above key assumptions with all other assumptions remaining static:
As of March. 31, 2025As of December. 31, 2024
Fair value of servicing rights$56,684$55,788
Incremental Increase (Decrease) in ValueIncremental Increase (Decrease) in Value
Prepayment Speed
20% increase($3,390)($3,459)
10% increase(1,699)(1,785)
Discount Rate
200 basis point increase(2,469)(2,603)
100 basis point increase(1,209)(1,331)
The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption on the fair value of the servicing rights is calculated without changing any other assumption. Changes in one factor may result in changes in another.
As of March 31, 2025 and 2024, the Company had servicing assets related to conventional commercial loans carried at amortized cost of $227 thousand