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Loan Servicing
 12 Months Ended
Dec. 31, 2019
Loan Servicing [Abstract]  
Loan Servicing

NOTE 6 - LOAN SERVICING

Mortgage and SBA loans serviced for others are not reported as assets.  The principal balances as of December 31, 2019 and 2018 are as follows:

 

(dollars in thousands)

 

2019

 

 

2018

 

Loans serviced for others:

 

 

 

 

 

 

 

 

Mortgage loans

 

$

1,683,298

 

 

$

1,586,499

 

SBA loans

 

 

170,849

 

 

 

184,664

 

Commercial real estate loans

 

 

4,216

 

 

 

2,838

 

 

Activity for servicing assets follows:

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

Mortgage

 

 

SBA

 

 

Mortgage

 

 

SBA

 

 

Mortgage

 

 

SBA

 

(dollars in thousands)

 

Loans

 

 

Loans

 

 

Loans

 

 

Loans

 

 

Loans

 

 

Loans

 

Servicing assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of period

 

$

12,858

 

 

$

4,512

 

 

$

1,540

 

 

$

4,417

 

 

$

1,002

 

 

$

2,702

 

Acquisitions

 

 

—

 

 

 

—

 

 

 

10,651

 

 

 

—

 

 

 

—

 

 

 

—

 

Additions

 

 

2,088

 

 

 

980

 

 

 

1,562

 

 

 

1,932

 

 

 

1,115

 

 

 

2,628

 

Disposals

 

 

(128

)

 

 

(708

)

 

 

(197

)

 

 

(1,177

)

 

 

(172

)

 

 

(367

)

Amortized to expense

 

 

(1,821

)

 

 

(698

)

 

 

(698

)

 

 

(660

)

 

 

(405

)

 

 

(546

)

End of period

 

$

12,997

 

 

$

4,086

 

 

$

12,858

 

 

$

4,512

 

 

$

1,540

 

 

$

4,417

 

 

The fair value of servicing assets for mortgage loans was $15.1 million and $15.3 million as of December 31, 2019 and 2018, respectively.  Fair value at December 31, 2019 was determined using a discount rate of 10.82%, prepayment speeds ranging from 7.27% to 20.15%, depending on the stratification of the specific right, and a weighted-average default rate of 0.11%. Fair value at December 31, 2018 was determined using a discount rate of 10.59%, prepayment speeds ranging from 8.26% to 16.82%, depending on the stratification of the specific right, and a weighted-average default rate of 0.20%.

 

The fair value of servicing assets for SBA loans was $5.6 million and $6.1 million as of December 31, 2019 and 2018, respectively.  Fair value at December 31, 2019 was determined using a discount rate of 8.50%, prepayment speeds ranging from 12.50% to 14.66%, depending on the stratification of the specific right, and a weighted-average default rate of 0.43%. Fair value at December 31, 2018 was determined using a discount rate of 8.50% and prepayment speeds ranging from 11.43% to 12.11%, depending on the stratification of the specific right and a weighted-average default rate of 0.52%.

Servicing fees net of servicing asset amortization totaled $3.4 million, $850,000, and $722,000 for the years ended December 31, 2019, 2018, and 2017, respectively.