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Servicing Assets

12 Months Ended

Dec. 31, 2017

Transfers And Servicing [Abstract]

Servicing Assets

Note 7—Servicing Assets

As part of the Ridgestone acquisition, the Company acquired loan servicing assets. The Company did not hold any servicing assets until the acquisition on October 14, 2016.

Loans serviced for others are not included in the Consolidated Statements of Financial Condition. The unpaid principal balances of these loans serviced for others were as follows as December 31, 2017 and 2016:

		2017				2016
Loan portfolios serviced for:
SBA		$	1,021,143			$	911,803
USDA			91,758				106,125
Total		$	1,112,901			$	1,017,928

Activity for servicing assets and the related changes in fair value for the years ended December 31, 2017 and 2016 is as follows:

		2017				2016
Beginning balance		$	21,091			$	—
Acquired servicing assets at fair value			—			$	20,295
Additions, net			6,250				539
Changes in fair value			(5,941	)			257
Ending balance		$	21,400			$	21,091

Loan servicing income totaled $3.7 million and $1.9 million for the years ended December 31, 2017 and 2016, respectively. The Company had no servicing income for the year ended December 31, 2015.

The fair value of servicing rights is highly sensitive to changes in underlying assumptions. Changes in prepayment speed assumptions have the most significant impact on the fair value of servicing rights.

Generally, as interest rates rise on variable rate loans, loan prepayments increase due to an increase in refinance activity, which may result in a decrease in the fair value of servicing assets. Measurement of fair value is limited to the condition existing and the assumptions used as of a particular point in time, and those assumptions may change over time. Refer to Note 18—Fair Value Measurement for further details.

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- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-URI http://asc.fasb.org/topic&trid=2197590

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