v3.25.2
LOAN SERVICING RIGHTS
12 Months Ended
Dec. 31, 2024
Transfers and Servicing [Abstract]  
LOAN SERVICING RIGHTS LOAN SERVICING RIGHTS
A summary of loan servicing rights at December 31, 2024 and December 31, 2023 is as follows:
December 31, 2024December 31, 2023
(dollars in thousands)Serviced LoansCarrying ValueServiced LoansCarrying Value
Commercial FHA$1,904,843 $17,053 $2,084,961 $19,273 
SBA42,152 451 42,685 549 
Residential197,161 338 225,067 431 
Total$2,144,156 $17,842 $2,352,713 $20,253 
Commercial FHA Mortgage Loan Servicing
The fair value of commercial FHA loan servicing rights is determined using key assumptions, representing both general economic and other published information, including the assumed earnings rates related to escrow and replacement reserves, and the weighted average characteristics of the commercial portfolio, including the prepayment rate and discount rate. The prepayment rate considered many factors as appropriate, including lockouts, balloons, prepayment penalties, interest rate ranges, delinquencies, and geographic location. The discount rate was based on an average pre-tax internal rate of return utilized by market participants in pricing the servicing portfolio. Significant increases or decreases in any one of these assumptions would result in a significantly lower or higher fair value measurement. The weighted average prepayment rate and weighted average discount rate was 10.00% and 8.18% at December 31, 2024.
Changes in our commercial FHA loan servicing rights for the years ended December 31, 2024, 2023 and 2022 are summarized as follows:
Years Ended December 31,
(dollars in thousands)202420232022
Loan servicing rights:
Balance, beginning of period$19,273 $— $27,386 
Servicing rights transferred from (to) held for sale— 20,473 (23,995)
Amortization(2,220)(1,200)(1,907)
Refinancing fee received from third party— — (221)
Permanent impairment— — (1,263)
Balance, end of period$17,053 $19,273 $— 
Fair value:
At beginning of period$32,469 $— $28,368 
At end of period25,916 32,469 —