Mortgage Servicing Rights

9 Months Ended

Sep. 30, 2026

Mortgage Servicing Rights

Mortgage Servicing Rights

7. Mortgage Servicing Rights

The following tables present the changes in fair value of the Company’s MSR asset and other information related to the serviced portfolio (dollars in thousands).


	Three Months Ended September 30,						Nine Months Ended September 30,
	2026			2025			2026			2025
Balance, beginning of period	$	22,755		$	7,887		$	17,491		$	5,723
Additions		2,518			5,087			8,293			8,201
Sales		(65)			—			(113)			—
Changes in fair value:
Due to changes in model inputs or assumptions ⁽¹⁾		3,628			(604)			3,972			(1,368)
Due to customer payoffs		(741)			(97)			(1,548)			(283)
Balance, end of period	$	28,095		$	12,273		$	28,095		$	12,273

							September 30,			December 31,
							2026			2025
Mortgage loans serviced for others ⁽²⁾							$	1,467,936		$	1,145,063
MSR asset as a percentage of serviced mortgage loans								1.91	%		1.53	%

(1)	Primarily represents normal customer payments, the impact of changes in interest rates, changes in discount rates and prepayment speed assumptions, and the refinement of other MSR model assumptions.

(2)

Represents unpaid principal balance of mortgage loans serviced for others.

The key assumptions used in measuring the fair value of the Company’s MSR asset were as follows.


		September 30,			December 31,
		2026			2025
Weighted average constant prepayment rate		10.48	%		14.68	%
Weighted average discount rate		11.56	%		11.45	%
Weighted average life (in years)		7.6			5.8

A sensitivity analysis of the fair value of the Company’s MSR asset to certain key assumptions is presented in the following table (in thousands).


		September 30,			December 31,
		2026			2025
Constant prepayment rate:
Impact of 10% adverse change		$	(1,123)		$	(899)
Impact of 20% adverse change			(2,162)			(1,714)
Discount rate:
Impact of 10% adverse change			(1,256)			(651)
Impact of 20% adverse change			(2,402)			(1,253)

This sensitivity analysis presents the effect of hypothetical changes in key assumptions on the fair value of the MSR asset. The effect of such hypothetical change in assumptions generally cannot be extrapolated because the relationship of the change in one key assumption to the change in the fair value of the MSR asset is not linear. In addition, in the analysis, the impact of an adverse change in one key assumption is calculated independent of any impact on other assumptions. In reality, changes in one assumption may change another assumption.

Contractually specified servicing fees, late fees and ancillary fees earned of $1.9 million and $0.7 million during the three months ended September 30, 2026 and 2025, respectively, and $5.2 million and $2.3 million during the nine months ended September 30, 2026 and 2025, respectively, were included in net gains from sale of loans and other mortgage production income within the consolidated statements of operations.