v3.25.2
SBA Servicing Asset, Net
 6 Months Ended
Jun. 30, 2025
Transfers and Servicing [Abstract]  
SBA Servicing Asset, Net SBA Servicing Asset, Net
The Company periodically sells the guaranteed portions of SBA loans and retains rights to service the loans. Loans serviced for others are not included in the accompanying balance sheets. The unpaid principal balances of SBA loans serviced for others was $233.6 million and $218.4 million at June 30, 2025 and December 31, 2024, respectively.
The following table summarizes SBA servicing asset, net activity for the periods indicated:
Three Months Ended
June 30,		Six Months Ended
June 30,
($ in thousands)2025202420252024
Balance at beginning of period$3,331 $4,072 $3,273 $4,231 
Additions to servicing asset440 — 755 — 
Amortization of servicing asset(249)(711)(586)(1,068)
Change in valuation allowance
(295)328 (215)526 
Balance at end of period$3,227 $3,689 $3,227 $3,689 
SBA servicing asset, fair value$3,227 $3,689 $3,227 $3,689 
Activity in the valuation allowance for the SBA servicing asset was as follows for the periods indicated:
Three Months Ended
June 30,		Six Months Ended
June 30,
($ in thousands)2025202420252024
Balance at beginning of period$(1,206)$(1,953)$(1,286)$(2,151)
Impairment(295)— (295)— 
Recovery— 328 80 526 
Balance at end of period$(1,501)$(1,625)$(1,501)$(1,625)
The fair market value of the SBA servicing asset as of June 30, 2025 and December 31, 2024, was $3.2 million and $3.3 million, respectively. Recovery or impairment adjustments to servicing rights are mainly due to market-based assumptions associated with discounted cash flows, loan prepayment speeds, and changes in interest rates. A significant change in these assumptions could result in a significant change in the SBA servicing asset carrying amount.
The Company assumed a weighted average prepayment rate of 20.4%, weighted average term of 3.31 years, and a weighted average discount rate of 15.2% at June 30, 2025.
The Company assumed a weighted average prepayment rate of 21.1%, weighted average term of 3.30 years, and a weighted average discount rate of 12.1% at December 31, 2024.