Annual report [Section 13 and 15(d), not S-K Item 405]

Servicing Assets

v3.25.4
Servicing Assets
 12 Months Ended
Dec. 31, 2025
Transfers and Servicing [Abstract]  
Servicing Assets

Note 4 — Servicing Assets

The changes in servicing assets for the years ended December 31, 2025 and 2024 were as follows:

 

 

 

As of December 31,

 

 

 

2025

 

 

2024

 

 

 

(in thousands)

 

Balance at beginning of period

 

$

6,457

 

 

$

7,070

 

Additions related to sale of loans

 

 

2,531

 

 

 

2,136

 

Amortization

 

 

(2,475

)

 

 

(2,749

)

Change in valuation allowance

 

 

(54

)

 

 

—

 

Balance at end of period

 

$

6,459

 

 

$

6,457

 

 

During the years ended December 31, 2025 and 2024, we serviced loans sold to unaffiliated, non-government sponsored parties in the amount of $615.9 million and $560.1 million, respectively. These loans are maintained off-balance sheet and are not included in the loans balance. As of December 31, 2025 and 2024, all of the loans serviced were SBA loans, except for $62.5 million and $37.0 million, respectively, of residential mortgage loans.

The Company recorded servicing fee income of $5.3 million, $5.4 million, and $5.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. Servicing fee income, net of amortization of servicing assets and liabilities, is included in other operating income in the consolidated statements of income. Amortization expense was $2.5 million, $2.7 million, and $2.5 million for the years ended December 31, 2025, 2024, and 2023, respectively.

As of December 31, 2025, the Bank's servicing assets had a fair value of $8.5 million, which was determined using discount rates ranging from 9.67% to 18.85% and prepayment speeds ranging from 20.19% to 27.99%, depending on the stratification of the specific servicing right. As of December 31, 2024, the Bank's servicing assets had a fair value of $7.9 million, which was determined using discount rates ranging from 10.81% to 27.26% and prepayment speeds ranging from 21.20% to 15.44%, depending on the stratification of the specific servicing right.