Quarterly report [Sections 13 or 15(d)]

Servicing Assets

v3.25.2
Servicing Assets
 6 Months Ended
Jun. 30, 2025
Transfers and Servicing [Abstract]  
Servicing Assets

Note 4 — Servicing Assets

The activity in servicing assets was as follows for the periods indicated:

 

 

 

Three Months Ended June 30,

 

 

 

2025

 

 

2024

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

6,422

 

 

$

6,890

 

Addition related to sale of loans

 

 

678

 

 

 

618

 

Amortization

 

 

(680

)

 

 

(672

)

Balance at end of period

 

$

6,420

 

 

$

6,836

 

 

 

 

Six Months Ended June 30,

 

 

 

2025

 

 

2024

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

6,457

 

 

$

7,070

 

Addition related to sale of loans

 

 

1,335

 

 

 

1,132

 

Amortization

 

 

(1,372

)

 

 

(1,366

)

Balance at end of period

 

$

6,420

 

 

$

6,836

 

 

At June 30, 2025 and December 31, 2024, we serviced loans sold to unaffiliated parties of $565.7 million and $560.1 million, respectively. These represented loans that were 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. At June 30, 2025, all the loans serviced, except for $33.4 million of residential mortgage loans, were SBA loans.

The Company recorded servicing fee income of $1.3 million and $1.4 million for the three months ended June 30, 2025 and 2024, respectively and $2.6 million and $2.7 million for the six months ended June 30, 2025 and 2024, respectively. Servicing fee income, net of the amortization of servicing assets, is included in other operating income in the consolidated statements of income. Amortization expense was $0.7 million for both the three months ended June 30, 2025 and 2024 and $1.4 million for both the six months ended June 30, 2025 and 2024.

The fair value of servicing rights was $8.1 million at June 30, 2025 and was determined using discount rates ranging from 11.2% to 18.7% and prepayment speeds ranging from 9.9% to 27.7%, depending on the stratification of the specific right. The fair value of servicing rights was $7.9 million at December 31, 2024 and was determined using discount rates ranging from 10.8% to 27.3% and prepayment speeds ranging from 15.4% to 21.2%, depending on the stratification of the specific right.