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Mortgage Servicing Rights ("MSRs") | 12 Months Ended
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Dec. 31, 2022
Disclosures Pertaining to Servicing Assets and Servicing Liabilities [Abstract] |
Mortgage Servicing Rights ("MSRs") | Mortgage Servicing Rights (“MSRs”) Following is a summary of the changes in the carrying value of MSRs, accounted for at fair value, for the years ended December 31, 2022, 2021 and 2020:
|  | December 31, |  | December 31, |  | December 31,
(In thousands) |  | 2022 |  | 2021 |  | 2020
Fair value at beginning of year |  | $ | 147,571 |  |  | $ | 92,081 |  |  | $ | 85,638 |
Additions from loans sold with servicing retained |  | 46,221 |  |  | 72,754 |  |  | 71,077 |
Estimate of changes in fair value due to: |  |  |  |  |  |
Early buyout options (“EBO”) exercised |  | (176) |  |  | (749) |  |  | (1,291) |
Payoffs and paydowns |  | (23,455) |  |  | (34,788) |  |  | (32,579) |
Changes in valuation inputs or assumptions |  | 60,064 |  |  | 18,273 |  |  | (30,764) |
Fair value at end of year |  | $ | 230,225 |  |  | $ | 147,571 |  |  | $ | 92,081 |
Unpaid principal balance of mortgage loans serviced for others |  | $ | 14,052,596 |  |  | $ | 13,126,254 |  |  | $ | 10,833,135 |
The Company recognizes MSR assets upon the sale of residential real estate loans to external third parties when it retains the obligation to service the loans and the servicing fee is more than adequate compensation. The initial recognition of MSR assets from loans sold with servicing retained and subsequent changes in fair value of all MSRs are recognized in mortgage banking revenue. MSRs are subject to changes in value from actual and expected prepayment of the underlying loans. The estimation of fair value related to MSRs is partly impacted by the Company exercising its EBO on eligible loans previously sold to the Government National Mortgage Association (“GNMA”). Under such optional repurchase program, financial institutions acting as servicers are allowed to buy back from the securitized loan pool individual delinquent mortgage loans meeting certain criteria for which the institution was the original transferor of such loans. At the option of the servicer and without prior authorization from GNMA, the servicer may repurchase such delinquent loans for an amount equal to the remaining principal balance of the loan. At the time of such repurchase, any MSR value related to such loans is derecognized. The MSR asset fair value is determined by using a discounted cash flow model that incorporates the objective characteristics of the portfolio as well as subjective valuation parameters that purchasers of servicing would apply to such portfolios sold into the secondary market. The subjective factors include loan prepayment speeds, discount rates, servicing costs and other economic factors. The Company uses a third party to assist in the valuation of MSRs. Periodically the Company will purchase options for the right to purchase securities not currently held within the banks’ investment portfolios or enter into interest rate swaps in which the Company elects to not designate such derivatives as hedging instruments. These option and swap transactions are designed primarily to economically hedge a portion of the fair value adjustments related to the Company’s MSRs. The gain or loss associated with these derivative contracts is included in mortgage banking revenue. For more information regarding these hedges outstanding as of December 31, 2022, see Note (21) “Derivative Financial Instruments” in Item 8 of this report. There were no such options or swaps outstanding as of December 31, 2021.

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- Definition The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 860 -SubTopic 30 -Section 50 -Paragraph 1A -Subparagraph (c)(3) -URI 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