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SERVICING RIGHTS
 12 Months Ended
Dec. 31, 2015
Transfers and Servicing [Abstract]  
SERVICING RIGHTS
SERVICING RIGHTS
The Company retains mortgage servicing rights (MSRs) from certain of its sales of residential mortgage loans. MSRs on residential mortgage loans are reported at fair value. Income earned by the Company on its MSRs is derived primarily from contractually specified mortgage servicing fees and late fees, net of curtailment costs and third party subservicing costs. The Company retains servicing rights in connection with its SBA loan operations, which are measured using the amortization method.
Income from servicing rights was $3.0 million, $4.2 million and $2.0 million for the years ended December 31, 2015, 2014, and 2013, respectively. The Company recognized (losses) gains on the fair values of servicing rights of $(8.8) million, $(1.6) million and $298 thousand for the years ended December 31, 2015, 2014, and 2013, respectively. These decreases were partially offset by increases in servicing fees. The Company recognized servicing fees of $11.7 million, $5.8 million, and $1.8 million for the years ended December 31, 2015, 2014, and 2013, respectively. The decrease in fair value of servicing rights was due to generally lower interest rates and the increase in servicing fees was due to the increase in unpaid principal balance of loans sold with servicing retained. These amounts are reported in Loan Servicing Income on the Consolidated Statements of Operations. The following table presents a composition of servicing rights as of the dates indicated:
 
December 31,
 
2015
 
2014
 
(In thousands)
Mortgage servicing rights, at fair value
$
49,939

 
$
19,082

SBA servicing rights, at cost
788

 
484

Total
$
50,727

 
$
19,566


Mortgage loans sold with servicing retained are not reported as assets and are subserviced by a third party vendor. The unpaid principal balance of these loans at December 31, 2015 and 2014 was $4.77 billion and $1.92 billion, respectively. Custodial escrow balances maintained in connection with serviced loans were $21.1 million and $8.3 million at December 31, 2015 and 2014, respectively.
Mortgage Servicing Rights
The following table presents the key characteristics, inputs and economic assumptions used to estimate the Level 3 fair value of the MSRs as of the dates indicated:
 
December 31,
 
2015
 
2014
 
($ in thousands)
Fair value of retained MSRs
$
49,939

 
$
13,135

Discount rate
9.75
%
 
10.09
%
Constant prepayment rate
11.81
%
 
13.22
%
Weighted-average life (in years)
6.48

 
5.80

At December 31, 2014, $5.9 million of the mortgage servicing rights was valued based on a market bid that settled subsequent to year end, which was included as Level 3 fair value of MSRs.
The following table presents activity in the MSRs for the periods indicated:
 
Year Ended December 31,
2015
 
2014
 
2013
 
(In thousands)
Balance at beginning of year
$
19,082

 
$
13,535

 
$
1,739

Additions
45,263

 
26,399

 
11,463

Changes in fair value resulting from valuation inputs or assumptions
(3,568
)
 
(233
)
 
1,360

Sales of servicing rights
(5,862
)
 
(17,773
)
 
—

Other—loans paid off
(4,976
)
 
(2,846
)
 
(1,027
)
Balance at end of year
$
49,939

 
$
19,082

 
$
13,535


SBA Servicing Rights
The Company used a discount rate of 7.50 percent to calculate the present value of cash flows and an estimated prepayment speed based on prepayment data available. Discount rates and prepayment speeds are reviewed quarterly and adjusted as appropriate. The following table presents activity in the SBA servicing rights for the periods indicated:
 
Year Ended December 31,
2015
 
2014
 
2013
 
(In thousands)
Balance at beginning of year
$
484

 
$
348

 
$
539

Additions
597

 
261

 
32

Amortization, including prepayments
(71
)
 
(83
)
 
(223
)
Impairment
(222
)
 
(42
)
 
—

Balance at end of year
$
788

 
$
484

 
$
348