v3.26.1
Servicing Rights
 6 Months Ended
Jun. 30, 2026
Transfers and Servicing [Abstract]  
Servicing Rights Note 8. Servicing Rights
The Company performs servicing activities for third parties, which primarily include collecting principal, interest and
other payments from borrowers, remitting the corresponding payments to investors and monitoring delinquencies. The
Company’s servicing fees are specified by pooling and servicing agreements.
The table below presents information about servicing rights at amortized cost.
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2026
2025
2026
2025
SBA
Beginning net carrying amount
$39,971
$43,289
$41,056
$39,227
Additions
1,771
2,229
3,183
7,092
Amortization
(1,706)
(1,946)
(3,470)
(3,580)
Recovery (impairment)
(1,219)
(4,379)
(1,952)
(3,546)
Ending net carrying amount
$38,817
$39,193
$38,817
$39,193
Multi-family
Beginning net carrying amount
60,008
65,559
61,331
67,996
Additions
1,945
2,114
3,618
2,686
Amortization
(2,926)
(3,046)
(5,922)
(6,055)
Ending net carrying amount
$59,027
$64,627
$59,027
$64,627
USDA
Beginning net carrying amount
20,767
16,486
20,620
16,465
Additions
791
2,420
1,261
3,109
Amortization
(819)
(645)
(1,609)
(1,332)
Recovery
(3,746)
(1,857)
(3,279)
(1,838)
Ending net carrying amount
$16,993
$16,404
$16,993
$16,404
Small business loans
Beginning net carrying amount
2,941
4,480
3,272
4,752
Additions
476
580
916
1,124
Amortization
(622)
(762)
(1,283)
(1,551)
Impairment
(169)
(239)
(279)
(266)
Ending net carrying amount
$2,626
$4,059
$2,626
$4,059
Total servicing rights
$117,463
$124,283
$117,463
$124,283
The Company’s servicing rights are carried at amortized cost and evaluated quarterly for impairment. The Company
estimates the fair value of these servicing rights by using a combination of internal models and data provided by third-
party valuation experts. The assumptions used in the Company’s internal models include forward prepayment rates,
forward default rates, discount rates, and servicing expenses.
The Company’s models calculate the present value of expected future cash flows utilizing assumptions that it believes
are used by market participants. Forward prepayment rates, forward default rates and discount rates are derived from
historical experiences adjusted for prevailing market conditions. Components of the estimated future cash flows include
servicing fees, late fees, other ancillary fees and cost of servicing.
The table below presents additional information about servicing rights at amortized cost.
As of June 30, 2026
As of December 31, 2025
(in thousands)
UPB
Carrying Value
UPB
Carrying Value
SBA
$1,886,796
$38,817
$1,916,211
$41,056
Multi-family
6,166,547
59,027
6,318,735
61,331
USDA
601,222
16,993
699,779
20,620
Small business loans
385,059
2,626
419,016
3,272
Total
$9,039,624
$117,463
$9,353,741
$126,279
The table below presents significant assumptions used in the estimated valuation of servicing rights at amortized cost.
June 30, 2026
December 31, 2025
Range of input values
Weighted Average
Range of input values
Weighted Average
SBA
Forward prepayment rate
3.1%
-
21.7%
10.1%
6.0%
-
21.6%
9.8%
Forward default rate
0.0%
-
2.7%
1.1%
0.0%
-
3.8%
1.3%
Discount rate
7.4%
-
20.5%
12.0%
7.4%
-
19.0%
11.9%
Servicing expense
0.4%
-
0.4%
0.4%
0.4%
-
0.4%
0.4%
Multi-family
Forward prepayment rate
0.0%
-
7.6%
2.4%
0.0%
-
7.6%
7.3%
Forward default rate
0.0%
-
0.2%
0.1%
0.0%
-
0.2%
0.1%
Discount rate
5.2%
-
5.2%
5.2%
5.2%
-
5.2%
5.2%
Servicing expense
0.0%
-
0.7%
0.1%
0.0%
-
0.8%
0.1%
USDA
Forward prepayment rate
6.4%
-
18.8%
13.6%
5.5%
-
16.9%
12.1%
Discount rate
3.2%
-
4.4%
4.3%
4.9%
-
6.0%
5.8%
Servicing expense
0.1%
-
0.3%
0.2%
0.1%
-
0.3%
0.2%
Small business loans
Discount rate
6.0%
-
6.0%
6.0%
6.0%
-
6.0%
6.0%
Servicing expense
0.5%
-
0.5%
0.5%
0.5%
-
0.5%
0.5%
Assumptions can change between and at each reporting period as market conditions and projected interest rates change.
The table below presents the possible impact of 10% and 20% adverse changes to key assumptions on servicing rights.
(in thousands)
June 30, 2026
December 31, 2025
SBA
Forward prepayment rate
Impact of 10% adverse change
$(1,168)
$(1,228)
Impact of 20% adverse change
$(2,269)
$(2,390)
Forward default rate
Impact of 10% adverse change
$(170)
$(199)
Impact of 20% adverse change
$(340)
$(396)
Discount rate
Impact of 10% adverse change
$(1,260)
$(1,356)
Impact of 20% adverse change
$(2,419)
$(2,621)
Servicing expense
Impact of 10% adverse change
$(2,579)
$(2,697)
Impact of 20% adverse change
$(5,158)
$(5,394)
Multi-family
Forward prepayment rate
Impact of 10% adverse change
$(434)
$(470)
Impact of 20% adverse change
$(854)
$(923)
Forward default rate
Impact of 10% adverse change
$(26)
$(28)
Impact of 20% adverse change
$(51)
$(56)
Discount rate
Impact of 10% adverse change
$(1,757)
$(1,852)
Impact of 20% adverse change
$(3,442)
$(3,625)
Servicing expense
Impact of 10% adverse change
$(2,311)
$(2,422)
Impact of 20% adverse change
$(4,622)
$(4,845)
USDA
Forward prepayment rate
Impact of 10% adverse change
$(1,005)
$(1,066)
Impact of 20% adverse change
$(1,915)
$(2,040)
Discount rate
Impact of 10% adverse change
$(330)
$(526)
Impact of 20% adverse change
$(647)
$(1,027)
Servicing expense
Impact of 10% adverse change
$(672)
$(797)
Impact of 20% adverse change
$(1,343)
$(1,593)
Small business loans
Discount rate
Impact of 10% adverse change
$(8)
$(15)
Impact of 20% adverse change
$(16)
$(29)
Servicing expense
Impact of 10% adverse change
$(273)
$(280)
Impact of 20% adverse change
$(547)
$(560)
The table below presents estimated future amortization expense for servicing rights.
(in thousands)
June 30, 2026
2026
$11,546
2027
20,263
2028
16,868
2029
14,658
2030
12,811
Thereafter
41,317
Total
$117,463