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MORTGAGE BANKING OPERATIONS (Tables) | 12 Months Ended
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Dec. 31, 2023
Mortgage Banking [Abstract] |
Schedule of loans held for sale and sold | LHFS consisted of the following:
| At December 31,
(in thousands) | 2023 |  | 2022
Single family | $ | 12,849 |  |  | $ | 14,075 |
CRE, multifamily and SBA | 6,788 |  |  | 3,252 |
Total | $ | 19,637 |  |  | $ | 17,327 |
Loans sold consisted of the following for the periods indicated:
| Years Ended December 31,
(in thousands) | 2023 |  | 2022 |  | 2021
Single family | $ | 335,751 |  |  | $ | 693,348 |  |  | $ | 2,046,811 |
CRE, multifamily and SBA | 26,839 |  |  | 145,622 |  |  | 773,378 |
Total | $ | 362,590 |  |  | $ | 838,970 |  |  | $ | 2,820,189 |
Net gain on mortgage loan origination and sale activity | Gain on loan origination and sale activities, including the effects of derivative risk management instruments, consisted of the following:
| Years Ended December 31,
(in thousands) | 2023 |  | 2022 |  | 2021
Single family | $ | 8,500 |  |  | $ | 13,054 |  |  | $ | 66,850 |
CRE, multifamily and SBA | 846 |  |  | 4,647 |  |  | 25,468 |
Total | $ | 9,346 |  |  | $ | 17,701 |  |  | $ | 92,318 |
Company's portfolio of loans serviced for others | The unpaid principal balance of loans serviced for others is as follows:
| At December 31,
(in thousands) | 2023 |  | 2022
Single family | $ | 5,316,304 |  |  | $ | 5,436,899 |
CRE, multifamily and SBA | 1,900,039 |  |  | 1,938,484 |
Total | $ | 7,216,343 |  |  | $ | 7,375,383 |
Schedule of mortgage repurchase losses | The following is a summary of changes in the Company's mortgage repurchase liability for single family loans sold on a servicing-retained and servicing-released basis included in accounts payable and other liabilities on the consolidated balance sheet for the periods indicated:
| Years Ended December 31,
(in thousands) | 2023 |  | 2022 |
Balance, beginning of period | $ | 2,232 |  |  | $ | 1,312 |  |
Additions, net of adjustments (1) | (330) |  |  | 1,629 |  |
Realized losses (2) | (421) |  |  | (709) |  |
Balance, end of period | $ | 1,481 |  |  | $ | 2,232 |  |
(1)Includes additions for new loan sales and changes in estimated probable future repurchase losses on previously sold loans. (2)Includes principal losses and accrued interest on repurchased loans, "make-whole" settlements, settlements with claimants and certain related expenses.
Revenue from mortgage servicing, including the effects of derivative risk management instruments | Revenue from mortgage servicing, including the effects of derivative risk management instruments, consisted of the following:
| Years Ended December 31,
(in thousands) | 2023 |  | 2022 |  | 2021
Servicing income, net: |  |  |  |  |
Servicing fees and other | $ | 26,134 |  |  | $ | 32,082 |  |  | $ | 35,342 |
Amortization of single family MSRs (1) | (6,378) |  |  | (9,951) |  |  | (19,669) |
Amortization of multifamily and SBA MSRs | (5,778) |  |  | (7,692) |  |  | (7,581) |
Total | 13,978 |  |  | 14,439 |  |  | 8,092 |
Risk management, single family MSRs: |  |  |  |  |
Changes in fair value of MSRs due to assumptions (2) | 414 |  |  | 16,739 |  |  | 7,379 |
Net gain (loss) from economic hedging (3) | (1,744) |  |  | (18,790) |  |  | (8,238) |
Total | (1,330) |  |  | (2,051) |  |  | (859) |
Loan servicing income | $ | 12,648 |  |  | $ | 12,388 |  |  | $ | 7,233 |
(1)Represents changes due to collection/realization of expected cash flows and curtailments. (2)Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily reflected by changes in mortgage interest rates. (3)The interest income from US Treasury notes securities used for hedging purposes, which is included in interest income on the consolidated income statements, was $1.4 million and $0.6 million in 2023 and 2022, respectively.
Changes in single family MSRs measured at fair value | The changes in single family MSRs measured at fair value are as follows:
| Years Ended December 31,
(in thousands) | 2023 |  | 2022 |  | 2021
Beginning balance | $ | 76,617 |  |  | $ | 61,584 |  |  | $ | 49,966 |
Additions and amortization: |  |  |  |  |
Originations | 3,136 |  |  | 8,245 |  |  | 23,908 |
Purchases | 460 |  |  | — |  |  | — |
Amortization (1) | (6,378) |  |  | (9,951) |  |  | (19,669) |
Net additions and amortization | (2,782) |  |  | (1,706) |  |  | 4,239 |
Changes in fair value assumptions (2) | 414 |  |  | 16,739 |  |  | 7,379 |
Ending balance | $ | 74,249 |  |  | $ | 76,617 |  |  | $ | 61,584 |
(1)Represents changes due to collection/realization of expected cash flows and curtailments. (2)Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates.
Key economic assumptions used in measuring initial FV of capitalized single family MSRs | Key economic assumptions used in measuring the initial fair value of capitalized single family MSRs were as follows:
| Years Ended December 31,
(rates per annum) (1) | 2023 |  | 2022 |  | 2021
Constant prepayment rate ("CPR") (2) | 14.89 | % |  | 10.91 | % |  | 8.84 | %
Discount rate | 11.99 | % |  | 9.35 | % |  | 8.23 | %
(1)Based on a weighted average. (2)Represents the expected lifetime average CPR used in the model. Key economic assumptions used in measuring the initial fair value of capitalized multifamily MSRs were as follows:
| Years Ended December 31,
(rates per annum) (1) | 2023 |  | 2022 |  | 2021
Discount rate | 13.00 | % |  | 13.00 | % |  | 13.00 | %
(1)Based on a weighted average. (2)Represents the expected lifetime average CPR used in the model.
Schedule of sensitivity analysis of fair value, transferor's interests in transferred financial assets | For single family MSRs, we use a discounted cash flow valuation technique which utilizes CPRs and discount rates as significant unobservable inputs as noted in the table below:
| At December 31, 2023 |  | At December 31, 2022
| Range of Inputs |  | Average (1) |  | Range of Inputs |  | Average (1)
CPRs | 6.80% - 32.50% |  | 7.00 | % |  | 6.01%- 11.10% |  | 8.19 | %
Discount Rates | 10.00% - 17.00% |  | 10.00 | % |  | 9.74% -16.88% |  | 10.66 | %
(1) Weighted averages of all the inputs within the range. To compute hypothetical sensitivities of the value of our single MSRs to immediate adverse changes in key assumptions, we computed the impact of changes in CPRs and in discount rates as outlined below:
(dollars in thousands) | At December 31, 2023
Fair value of single family MSRs | $ | 74,249 |
Expected weighted-average life (in years) | 8.23
CPR |
Impact on fair value of 25 basis points adverse change in interest rates | $ | (668) |
Impact on fair value of 50 basis points adverse change in interest rates | $ | (1,518) |
Discount rate |
Impact on fair value of 100 basis points increase | $ | (1,587) |
Impact on fair value of 200 basis points increase | $ | (4,138) |
For multifamily MSRs, we use a discounted cash flow valuation technique which utilizes CPRs and discount rates as significant unobservable inputs as noted in the table below:
| At December 31, 2023 |  | At December 31, 2022
| Range of Inputs |  | Average (1) |  | Range of Inputs |  | Average (1)
Discount Rates | 13.00% - 13.00% |  | 13.00 | % |  | 13.00% - 13.00% |  | 13.00 | %
(1) Weighted averages of all the inputs within the range.
Changes in multifamily MSRs measured at the lower of amortized cost or fair value | The changes in multifamily and SBA MSRs measured at LOCOM or fair value were as follows:
| Years Ended December 31,
(in thousands) | 2023 |  | 2022 |  | 2021
Beginning balance | $ | 35,256 |  |  | $ | 39,415 |  |  | $ | 35,774 |
Origination | 509 |  |  | 3,533 |  |  | 11,222 |
Amortization | (5,778) |  |  | (7,692) |  |  | (7,581) |
Ending balance | $ | 29,987 |  |  | $ | 35,256 |  |  | $ | 39,415 |
Projected amortization expense for the gross carrying value of multifamily MSRs | Projected amortization expense for the gross carrying value of multifamily and SBA MSRs is estimated as follows:
(in thousands) | At December 31, 2023
2024 | $ | 5,318 |
2025 | 5,080 |
2026 | 4,598 |
2027 | 3,880 |
2028 | 3,425 |
2029 and thereafter | 7,686 |
Carrying value of multifamily and SBA MSRs | $ | 29,987 |

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