| Schedule of Carrying Value of Loan Servicing Rights Assets |
The carrying value of the loan servicing rights assets is shown in the table below:
| | | | | | | | | | | | | (dollars in thousands) | June 30, 2025 | | December 31, 2024 | | Loan Servicing Rights | | | | | Residential mortgage | $ | 126,022 | | | $ | 112,514 | | | SBA | 2,786 | | | 2,926 | | | | | | | Total loan servicing rights | $ | 128,808 | | | $ | 115,440 | |
The table below is an analysis of the activity in the Company’s MSRs and valuation allowance:
| | | | | | | | | | | | | | | | | | | | | | | | | (dollars in thousands) | Three Months Ended June 30, | | Six Months Ended June 30, | | Residential mortgage servicing rights | 2025 | | 2024 | | 2025 | | 2024 | | Beginning carrying value, net | $ | 116,584 | | | $ | 171,968 | | | $ | 112,514 | | | $ | 171,915 | | | Additions | 12,791 | | | 7,421 | | | 20,108 | | | 12,877 | | | | | | | | | | | Amortization | (3,353) | | | (5,264) | | | (6,600) | | | (10,667) | | | | | | | | | | | Disposals | — | | | (28,819) | | | — | | | (28,819) | | | Ending carrying value, net | $ | 126,022 | | | $ | 145,306 | | | $ | 126,022 | | | $ | 145,306 | |
The table below is an analysis of the activity in the Company’s SBA loan servicing rights and valuation allowance:
| | | | | | | | | | | | | | | | | | | | | | | | | (dollars in thousands) | Three Months Ended June 30, | | Six Months Ended June 30, | | SBA servicing rights | 2025 | | 2024 | | 2025 | | 2024 | | Beginning carrying value, net | $ | 2,927 | | | $ | 2,301 | | | $ | 2,926 | | | $ | 2,737 | | | Additions | 129 | | | 57 | | | 286 | | | 76 | | | | | | | | | | | | | | | | | | | Amortization | (270) | | | (202) | | | (426) | | | (657) | | | | | | | | | | | Ending carrying value, net | $ | 2,786 | | | $ | 2,156 | | | $ | 2,786 | | | $ | 2,156 | | | | | | | | | | | | | | | | | |
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| Schedule of Sensitivity of Fair Value to Adverse Changes in Model Inputs and/or Assumptions |
The key metrics and the sensitivity of the fair value to adverse changes in model inputs and/or assumptions are summarized below:
| | | | | | | | | | | | | (dollars in thousands) | June 30, 2025 | | December 31, 2024 | | Residential mortgage servicing rights | | | | | Unpaid principal balance of loans serviced for others | $ | 9,784,564 | | | $ | 8,856,724 | | | Composition of residential loans serviced for others: | | | | | FHLMC | 25.48 | % | | 24.51 | % | | FNMA | 66.04 | % | | 68.42 | % | | GNMA | 8.48 | % | | 7.07 | % | | Total | 100.00 | % | | 100.00 | % | | Weighted average term (months) | 354 | | 353 | | Weighted average age (months) | 34 | | 33 | | Modeled prepayment speed | 8.10 | % | | 7.37 | % | | Decline in fair value due to a 10% adverse change | $ | (5,151) | | | $ | (2,474) | | | Decline in fair value due to a 20% adverse change | $ | (10,119) | | | $ | (5,227) | | | Weighted average discount rate | 9.31 | % | | 10.79 | % | | Decline in fair value due to a 10% adverse change | $ | (6,210) | | | $ | (3,283) | | | Decline in fair value due to a 20% adverse change | $ | (12,197) | | | $ | (7,379) | |
| | | | | | | | | | | | | (dollars in thousands) | June 30, 2025 | | December 31, 2024 | | SBA servicing rights | | | | | Unpaid principal balance of loans serviced for others | $ | 230,405 | | | $ | 235,793 | | | Weighted average life (in years) | 3.34 | | 3.18 | | Modeled prepayment speed | 17.26 | % | | 18.95 | % | | Decline in fair value due to a 10% adverse change | $ | (146) | | | $ | (192) | | | Decline in fair value due to a 20% adverse change | $ | (280) | | | $ | (366) | | | Weighted average discount rate | 14.09 | % | | 11.27 | % | | Decline in fair value due to a 100 basis point adverse change | $ | (73) | | | $ | (97) | | | Decline in fair value due to a 200 basis point adverse change | $ | (143) | | | $ | (190) | |
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