Quarterly report pursuant to Section 13 or 15(d)

Servicing Assets and Liabilities

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Servicing Assets and Liabilities
 6 Months Ended
Jun. 30, 2018
Transfers and Servicing [Abstract]  
Servicing Assets and Liabilities
Servicing Assets and Liabilities

The changes in servicing assets and liabilities for the three months ended June 30, 2018 and 2017 were as follows:

 
2018
 
2017
 
(in thousands)
Servicing assets:
 
 
 
Balance at beginning of period
$
9,867

 
$
10,609

Addition related to sale of SBA loans
406

 
752

Amortization
(1,018
)
 
(881
)
Balance at end of period
$
9,255

 
$
10,480

 
 
 
 
Servicing liabilities:
 
 
 
Balance at beginning of period
$
2,022

 
$
2,776

Amortization
(185
)
 
(223
)
Balance at end of period
$
1,837

 
$
2,553



The changes in servicing assets and liabilities for the six months ended June 30, 2018 and 2017 were as follows:

 
2018
 
2017
 
(in thousands)
Servicing assets:
 
 
 
Balance at beginning of period
$
10,218

 
$
10,564

Addition related to sale of SBA loans
841

 
1,194

Amortization
(1,804
)
 
(1,608
)
Reversal of allowance
—

 
330

Balance at end of period
$
9,255

 
$
10,480

 
 
 
 
Servicing liabilities:
 
 
 
Balance at beginning of period
$
2,217

 
$
3,143

Amortization
(380
)
 
(523
)
Reversal of allowance
—

 
(67
)
Balance at end of period
$
1,837

 
$
2,553



At June 30, 2018 and December 31, 2017, we serviced loans sold to unaffiliated parties in the amounts of $457.9 million and $476.5 million, respectively. These represented loans that have been sold for which the Bank continues to provide servicing. These loans are maintained off-balance sheet and are not included in the loans receivable balance. All of the loans serviced were SBA loans.

The Company recorded servicing fee income of $1.2 million for each of the three month periods ended June 30, 2018 and 2017. The Company recorded servicing fee income of $2.4 million for each of the six month periods ended June 30, 2018 and 2017. Servicing fee income, net of the amortization of servicing assets and liabilities, is included in other operating income in the consolidated statements of income. Net amortization expense was $833,000 and $658,000 for the three months ended June 30, 2018 and 2017, respectively, and $1.4 million and $1.1 million for the six months ended June 30, 2018 and 2017, respectively.