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MORTGAGE BANKING OPERATIONS
 3 Months Ended
Mar. 31, 2025
Mortgage Banking [Abstract]  
MORTGAGE BANKING OPERATIONS MORTGAGE BANKING OPERATIONS:
LHFS consisted of the following:
 
(in thousands)At March 31, 2025At December 31, 2024
Single family$21,912 $20,312 
CRE, multifamily and SBA12,822 — 
Total$34,734 $20,312 

Loans sold consisted of the following for the periods indicated: 
Quarter Ended March 31,
(in thousands)20252024
Single family$82,397 $70,379 
CRE, multifamily and SBA54,195 8,196 
Total$136,592 $78,575 
Gain on loan origination and sale activities, including the effects of derivative risk management instruments, consisted of the following: 
 Quarter Ended March 31,
(in thousands)20252024
Single family$2,283 $1,986 
CRE, multifamily and SBA933 320 
Total$3,216 $2,306 

The Company's portfolio of loans serviced for others is primarily comprised of loans held in U.S. government and agency MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae. The unpaid principal balance of loans serviced for others is as follows:

(in thousands)At March 31, 2025At December 31, 2024
Single family $5,141,876 $5,179,373 
CRE, multifamily and SBA 1,924,895 1,918,172 
Total$7,066,771 $7,097,545 


The following is a summary of changes in the Company's liability for estimated single-family mortgage repurchase losses:

 Quarter Ended March 31,
(in thousands)20252024
Balance, beginning of period$1,032 $1,481 
Additions, net of adjustments (1)
(103)(128)
Realized (losses) recoveries, net (2)
70 (36)
Balance, end of period$999 $1,317 
(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.

The Company has agreements with certain investors to advance scheduled principal and interest amounts on delinquent loans. Advances are also made to fund the foreclosure and collection costs of delinquent loans prior to the recovery of reimbursable amounts from investors or borrowers. Advances of $1.5 million and $1.6 million were recorded in other assets as of March 31, 2025 and December 31, 2024, respectively.

When the Company has the unilateral right to repurchase Ginnie Mae pool loans it has previously sold (generally loans that are more than 90 days past due), the Company records the balance of the loans as other assets and other liabilities. At March 31, 2025 and December 31, 2024, delinquent or defaulted mortgage loans currently in Ginnie Mae pools that the Company has recognized on its consolidated balance sheets totaled $6.8 million and $5.1 million, respectively.
Revenue from mortgage servicing, including the effects of derivative risk management instruments, consisted of the following:
 Quarter Ended March 31,
(in thousands)20252024
Servicing income, net:
Servicing fees and other$6,507 $6,354 
Amortization of single family MSRs (1)
(1,582)(1,428)
Amortization of multifamily and SBA MSRs(1,354)(1,402)
Total
3,571 3,524 
Risk management, single family MSRs:
Changes in fair value of MSRs due to assumptions (2)
271 618 
Net gain (loss) from economic hedging (3)
1,016 (1,110)
Total
1,287 (492)
               Loan servicing income $4,858 $3,032 
(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.
(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 $0.4 million and $0.3 million for quarters ended March 31, 2025 and 2024, respectively.

The changes in single family MSRs measured at fair value are as follows:
Quarter Ended March 31,
(in thousands)20252024
Beginning balance$72,901 $74,249 
Additions and amortization:
Originations
695 617 
Purchases
— — 
Amortization (1)
(1,582)(1,428)
Net additions and amortization
(887)(811)
Changes in fair value assumptions (2)
271 618 
Ending balance$72,285 $74,056 
(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 the initial fair value of capitalized single family MSRs were as follows: 

Quarter Ended March 31,
(rates per annum) (1)
20252024
Constant prepayment rate ("CPR") (2)
17.96 %19.30 %
Discount rate 10.14 %10.18 %
(1) Based on a weighted average.
(2) Represents an expected lifetime average CPR used in the model.
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 March 31, 2025At December 31, 2024
Range of Inputs
Average (1)
Range of Inputs
Average (1)
CPRs (2)
5.80% - 14.00%
6.77 %
6.00% - 13.50%
6.60 %
Discount Rates
10.00% - 16.00%
10.27 %
10.00% - 17.00%
11.00 %
(1) Weighted averages of all the inputs within the range.
(2) Represents the expected lifetime average CPR used in the model.

To compute hypothetical sensitivities of the value of our single family MSRs to immediate adverse changes in key assumptions, we computed the impact of changes to CPRs and in discount rates as outlined below:

(dollars in thousands)At March 31, 2025
Fair value of single family MSR$72,285 
Expected weighted-average life (in years)8.31
CPR
Impact on fair value of 25 basis points adverse change in interest rates$(1,015)
Impact on fair value of 50 basis points adverse change in interest rates$(2,122)
Discount rate
Impact on fair value of 100 basis points increase$(2,827)
Impact on fair value of 200 basis points increase$(5,628)

The changes in multifamily and SBA MSRs measured at the lower of amortized cost or fair value were as follows: 

Quarter Ended March 31,
(in thousands)20252024
Beginning balance$26,565 $29,987 
Originations463 278 
Amortization(1,354)(1,402)
Ending balance$25,674 $28,863 

Key economic assumptions used in measuring the initial fair value of capitalized multifamily MSRs were as follows:
 
Quarter Ended March 31,
(rates per annum) (1)
20252024
Discount rate13.10 %13.00 %
(1)Based on a weighted average.
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. Multifamily DUS loans typically contain yield maintenance features that significantly reduce loan prepayments, resulting in a CPR of zero for valuation purposes.

At March 31, 2025At December 31, 2024
Range of Inputs
Average (1)
Range of Inputs
Average (1)
Discount Rates
13.00% - 15.00%
13.10 %
13.00% - 15.00%
13.10 %
(1) Weighted averages of all the inputs within the range.