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MORTGAGE BANKING OPERATIONS | 3 Months Ended
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Mar. 31, 2026
Mortgage Banking [Abstract] |
MORTGAGE BANKING OPERATIONS | MORTGAGE BANKING OPERATIONS LHFS consisted of the following:
(in thousands) | March 31, 2026 |  | December 31, 2025
Single family | $ | 4,692 |  |  | $ | 5,967 |
Total | $ | 4,692 |  |  | $ | 5,967 |
Loans sold consisted of the following for the periods indicated:
| Quarter Ended March 31, |  |
(in thousands) | 2026 |  | 2025 |  |  |  |
Single family | $ | 32,230 |  |  | $ | 1,637 |  |  |  |  |
Multifamily and other | 29,228 |  |  | — |  |  |  |  |
Total | $ | 61,458 |  |  | $ | 1,637 |  |  |  |  |
For the quarter ended March 31, 2026 and 2025, there were no loans sold as part of securitizations. 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) | 2026 |  | 2025 |  |  |  |
Single family (1) | $ | 827 |  |  | $ | 7 |  |  |  |  |
Multifamily and other (1) | 316 |  |  | — |  |  |  |  |
Total | $ | 1,143 |  |  | $ | 7 |  |  |  |  |
(1)Gain on loan origination and sale activities is included in other noninterest income in the consolidated income statements. 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) | March 31, 2026 |  | December 31, 2025
Single family | $ | 4,288,185 |  |  | $ | 4,370,577 |
CRE, multifamily and SBA | 1,892,012 |  |  | 1,866,799 |
Total | $ | 6,180,197 |  |  | $ | 6,237,376 |
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) | 2026 |  | 2025 |  |  |  |
Balance, beginning of period | $ | 708 |  |  | $ | — |  |  |  |  |
Additions, net of adjustments (1) | (32) |  |  | — |  |  |  |  |
Realized (losses) recoveries, net (2) | (2) |  |  | — |  |  |  |  |
Balance, end of period | $ | 674 |  |  | $ | — |  |  |  |  |
(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 $1.1 million and $1.2 million were recorded in interest receivable and other assets as of March 31, 2026 and December 31, 2025, 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 within assets as interest receivable and other assets and within liabilities as interest payable and other liabilities. At March 31, 2026 and December 31, 2025, there were no delinquent or defaulted mortgage loans currently in Ginnie Mae pools that the Company has recognized on its consolidated balance sheets. Revenue from mortgage servicing, including the effects of derivative risk management instruments, consisted of the following:
| Quarter Ended March 31, |  |
(in thousands) | 2026 |  | 2025 |  |  |  |
Servicing income, net: |  |  |  |  |  |  |
Servicing fees and other | $ | 5,191 |  |  | $ | 177 |  |  |  |  |
Changes in fair value of single family MSRs - other (1) | (1,442) |  |  | — |  |  |  |  |
Amortization of multifamily and SBA MSRs | (1,638) |  |  | — |  |  |  |  |
Total | 2,111 |  |  | 177 |  |  |  |  |
Risk management, single family MSRs: |  |  |  |  |  |  |
Changes in fair value of MSRs due to assumptions (2) | 702 |  |  | — |  |  |  |  |
Net gain from economic hedging (3) | (886) |  |  | — |  |  |  |  |
Total | (184) |  |  | — |  |  |  |  |
Loan servicing income | $ | 1,927 |  |  | $ | 177 |  |  |  |  |
(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)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. Single Family MSRs Balances and activity for single family MSRs are reported beginning on the Merger date of September 2, 2025, therefore there were no balances or activity for the quarter ended March 31, 2025. The changes in single family MSRs measured at fair value are as follows:
| Quarter Ended March 31, |  |
(in thousands) | 2026 |  | 2025 |  |  |  |
Beginning balance | $ | 58,095 |  |  | $ | — |  |  |  |  |
Additions: |  |  |  |  |  |  |
Originations | 275 |  |  | — |  |  |  |  |
Changes in fair value: |  |  |  |  |  |  |
Changes in fair value assumptions (1) | 702 |  |  | — |  |  |  |  |
Other (2) | (1,442) |  |  | — |  |  |  |  |
Ending balance | $ | 57,630 |  |  | $ | — |  |  |  |  |
(1)Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates. (2)Represents changes due to collection/realization of expected cash flows and curtailments. 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) | 2026 |  | 2025 |  |  |  |
Constant prepayment rate (CPR) (2) | 12.13 | % |  | n/a |  |  |  |
Discount rate (3) | 8.81 | % |  | n/a |  |  |  |
(1)Based on a weighted average. (2)Represents an expected lifetime average CPR used in the model. (3)Based on market observations. For the fair value of single family MSRs as of March 31, 2026 and December 31, 2025, we use a discounted cash flow valuation technique which utilizes CPRs and discount rates as significant unobservable inputs as noted in the table below:
| March 31, 2026 |  | December 31, 2025
(rates per annum) | Range of Inputs |  | Average (1) |  | Range of Inputs |  | Average (1)
CPRs (2) | 5.05% - 12.50% |  | 6.66 | % |  | 5.07% - 12.14% |  | 6.96 | %
Discount Rates (3) | 8.77% - 16.56% |  | 9.11 | % |  | 8.65% - 16.05% |  | 8.97 | %
(1) Weighted average rates for sales during the period for sales of loans with similar characteristics. (2) Represents the expected lifetime average CPR used in the model. (3) Based on market observations. To compute hypothetical sensitivities of the fair 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) | March 31, 2026 |  |
Fair value of single family MSRs | $ | 57,630 |  |  |
Expected weighted-average life (in years) | 8.15 |  |
CPR shock |  |  |
Impact on fair value of 10% increase in CPR | $ | (1,521) |  |  |
Impact on fair value of 20% increase in CPR | $ | (2,999) |  |  |
Discount rate shock |  |  |
Impact on fair value of 100 basis points increase | $ | (2,479) |  |  |
Impact on fair value of 200 basis points increase | $ | (4,848) |  |  |
Multifamily and SBA MSRs Balances and activity for multifamily and SBA MSRs are reported beginning on the Merger date of September 2, 2025, therefore there were no balances or activity for the quarter ended March 31, 2025. 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) | 2026 |  | 2025 |  |  |  |
Beginning balance | $ | 27,737 |  |  | $ | — |  |  |  |  |
Originations | 271 |  |  | — |  |  |  |  |
Amortization | (1,638) |  |  | — |  |  |  |  |
Ending balance | $ | 26,370 |  |  | $ | — |  |  |  |  |
The fair value of multifamily and SBA MSRs was $27.3 million and $28.3 million at March 31, 2026 and December 31, 2025, respectively. 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) | 2026 |  | 2025 |  |  |  |
Discount rate | 13.00 | % |  | n/a |  |  |  |
(1) Weighted averages of all the inputs within the range. 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.
| March 31, 2026 |  | December 31, 2025
| Range of Inputs |  | Average (1) |  | Range of Inputs |  | Average (1)
Discount rates | 13.00% - 15.00% |  | 13.07 | % |  | 13.00% - 15.00% |  | 13.07 | %
(1) Weighted averages of all the inputs within the range.

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