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Servicing Assets
 12 Months Ended
Dec. 31, 2024
Transfers and Servicing [Abstract]  
Servicing Assets

Note 6—Servicing Assets

Activity for servicing assets and the related changes in fair value for the years ended December 31, 2024, 2023, and 2022 is as follows:

 

 

2024

 

 

2023

 

 

2022

 

Beginning balance

 

$

19,844

 

 

$

19,172

 

 

$

23,744

 

Additions, net

 

 

5,812

 

 

 

5,761

 

 

 

7,171

 

Changes in fair value

 

 

(6,704

)

 

 

(5,089

)

 

 

(11,743

)

Ending balance

 

$

18,952

 

 

$

19,844

 

 

$

19,172

 

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 of December 31, 2024 and 2023:

 

 

2024

 

 

2023

 

Loan portfolios serviced for:

 

 

 

 

 

 

SBA guaranteed loans

 

$

1,522,389

 

 

$

1,530,401

 

USDA guaranteed loans

 

 

190,503

 

 

 

197,942

 

Total

 

$

1,712,892

 

 

$

1,728,343

 

Loan servicing revenue totaled $12.9 million for the years ended December 31, 2024, and $13.5 million for the years ended December 31, 2023 and 2022.

Loan servicing asset revaluation, which represents the changes in fair value of servicing assets, totaled downward valuations of $6.7 million, $5.1 million, and $11.7 million for the years ended December 31, 2024, 2023, and 2022, respectively. Changes in the fair value of the loan servicing asset are reported on the Consolidated Statements of Operations.

The fair value of servicing rights is highly sensitive to changes in underlying assumptions. Changes in secondary market premiums and 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 conditions existing, and the assumptions used as of a particular point in time, and those assumptions may change over time. Refer to Note 17—Fair Value Measurement for further details.