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MORTGAGE BANKING OPERATIONS (Tables) | 9 Months Ended
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Sep. 30, 2025
Mortgage Banking [Abstract] |
Mortgage Loans on Real Estate, by Loan | LHFS consisted of the following:
(in thousands) | September 30, 2025 |  | December 31, 2024
Single family | $21,397 |  | $543
CRE, multifamily and SBA | 33,588 |  | —
Total | $54,985 |  | $543
Loans sold consisted of the following for the periods indicated:
| Quarter Ended September 30, |  | Nine Months Ended September 30,
(in thousands) | 2025 |  | 2024 |  | 2025 |  | 2024
Single family | $35,925 |  | $342 |  | $39,234 |  | $4,029
CRE, multifamily and SBA | 7,100 |  | — |  | 7,100 |  | —
Total | $43,025 |  | $342 |  | $46,334 |  | $4,029
For loan and lease receivables sold for the quarters and nine months ended September 30, 2025 and 2024, there were no loans sold as part of securitizations.
Net Gain on Loan Origination and Sale Activity | Gain on loan origination and sale activities, including the effects of derivative risk management instruments, consisted of the following:
| Quarter Ended September 30, |  | Nine Months Ended September 30,
(in thousands) | 2025 |  | 2024 |  | 2025 |  | 2024
Single family (1) | $213 |  | $— |  | $213 |  | $42
CRE, multifamily and SBA (1) | 446 |  | — |  | 446 |  | —
Total | $659 |  | $— |  | $659 |  | $42
(1)Gain on loan origination and sale activities is included in other noninterest income in the consolidated income statements.
Company's Portfolio of Loans Serviced for Others | 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 and Freddie Mac. The unpaid principal balance of loans serviced for others is as follows:
(in thousands) | September 30, 2025 |  | December 31, 2024
Single family | $4,453,004 |  | $196,895
CRE, multifamily and SBA | 1,886,746 |  | 11,092
Total | $6,339,750 |  | $207,987
Mortgage Repurchase Losses | The following is a summary of changes in the Company’s liability for estimated single-family mortgage repurchase losses:
| Quarter Ended September 30, | Nine Months Ended September 30,
(in thousands) | 2025 |  | 2025
Balance, beginning of period | $— |  | $—
Reserve liability acquired (1) | 734 |  | 734
Additions, net of adjustments (2) | 4 |  | 4
Balance, end of period | $738 |  | $738
(1)Represents the reserve liability acquired from the Merger on September 2, 2025. (2)Includes additions for new loan sales and changes in estimated probable future repurchase losses on previously sol d loa ns.
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:
| Quarter Ended September 30, |  | Nine Months Ended September 30,
(in thousands) | 2025 |  | 2024 |  | 2025 |  | 2024
Servicing income, net: |  |  |  |  |  |  |
Servicing fees and other | $1,873 |  | $202 |  | $2,218 |  | $786
Changes in fair value of single family MSRs - other (1) | (618) |  | — |  | (618) |  | —
Amortization of multifamily and SBA MSRs | (585) |  | — |  | (585) |  | —
Total | 670 |  | 202 |  | 1,015 |  | 786
Risk management, single family MSRs: |  |  |  |  |  |  |
Changes in fair value of MSRs due to assumptions (2) | (167) |  | — |  | (167) |  | —
Net gain from economic hedging (3) | 177 |  | — |  | 177 |  | —
Total | 10 |  | — |  | 10 |  | —
Loan servicing income | $680 |  | $202 |  | $1,025 |  | $786
(1)Represents changes due to collection/realization of expected cash flows and curta ilmen ts. (2)Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates. (3)Comprised of net gains on derivatives used as economic hedges of single family MSRs, and net gains on U.S. Treasury notes trading securities used for hedging purposes.
Changes in Single Family MSRs Measured at Fair Value | The changes in single family MSRs measured at fair value are as follows:
| Quarter Ended September 30, |  | Nine Months Ended September 30,
(in thousands) | 2025 |  | 2025
Beginning balance | $— |  | $—
Additions: |  |  |
MSRs acquired (1) | 60,166 |  | 60,166
Originations | 155 |  | 155
Net additions | 60,321 |  | 60,321
Changes in fair value: |  |  |
Changes in fair value assumptions (2) | (167) |  | (167)
Other (3) | (618) |  | (618)
Ending balance | $59,536 |  | $59,536
(1)Represents MSRs acquired from the Merger on September 2, 2025. (2)Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates (3)Represents changes due to collection/realization of expected cash flows and curtailments.
Key Economic Assumptions Used in Measuring Initial FV of Capitalized Single Family MSRs | Key e conomic assumptions used in measuring the initial fair value of capitalized single family MSRs w ere as fol lows:
| Quarter Ended September 30, |  | Nine Months Ended September 30,
(rates per annum) (1) | 2025 |  | 2025
Constant prepayment rate (CPR) (2) | 16.47% |  | 16.47%
Discount rate | 8.73% |  | 8.73%
(1)Based on a weighted average. (2)Represents an expected lifetime average CPR used in the model.
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:
| September 30, 2025
(rates per annum) | Range of Inputs |  | Average (1)
CPRs (2) | 5.05% - 11.95% |  | 6.89%
Discount Rates | 8.66% - 16.23% |  | 8.99%
(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) | September 30, 2025
Fair value of single family MSRs | $59,536
Expected weighted-average life (in years) | 8.19
CPR |
Impact on fair value of 25 basis points adverse change in interest rates | $(980)
Impact on fair value of 50 basis points adverse change in interest rates | $(1,989)
Discount rate |
Impact on fair value of 100 basis points increase | $(2,585)
Impact on fair value of 200 basis points increase | $(5,050)
Changes in Multifamily MSRs Measured at the Lower of Amortized Cost or Fair Value | The changes in multifamily and SBA MSRs measured at the lower of amortized cost or fair value were a s follow s:
| Quarter Ended September 30, |  | Nine Months Ended September 30,
(in thousands) | 2025 |  | 2025
Beginning balance | $— |  | $—
MSRs acquired (1) | 29,538 |  | 29,538
Originations | 106 |  | 106
Amortization | (585) |  | (585)
Ending balance | $29,059 |  | $29,059
(1)Represents MSRs acquired from the Merger on September 2, 2025. The fair value of multifamily and SBA MSRs was $29.2 million at September 30, 2025. Key economic assumptions used in measuring the initial fair value of capitalized multifamily MSRs were as follows:
| Quarter Ended September 30, |  | Nine Months Ended September 30,
(rates per annum) (1) | 2025 |  | 2025
Discount rate | 13.00% |  | 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.
| September 30, 2025
| Range of Inputs |  | Average (1)
Discount Rates | 13.00% - 15.00% |  | 13.00%
(1) Weighted averages of all the inputs within the range.

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