XML 24 R15.htm IDEA: XBRL DOCUMENT v3.23.3
Servicing Asset
 9 Months Ended
Sep. 30, 2023
Transfers and Servicing [Abstract]  
Servicing Asset Servicing Asset
Activity for the servicing asset and the related changes in fair value for the three and nine months ended September 2023 and 2022 are shown in the table below.

Three Months Ended
(in thousands)September 30, 2023September 30, 2022
Balance, beginning of period$8,251 $5,345 
  Additions:
     Originated and purchased servicing1,585 783 
  Subtractions
     Paydowns:(408)(279)
     Changes in fair value due to changes in valuation inputs or assumptions used in
      the valuation model 		151 (54)
      Loan servicing asset revaluation$(257)$(333)
Balance, end of period$9,579 $5,795 
Nine Months Ended
(in thousands)September 30, 2023September 30, 2022
Balance, beginning of period$6,255 $4,702 
  Additions:
     Originated and purchased servicing3,994 2,193 
  Subtractions
     Paydowns:(1,275)(888)
     Changes in fair value due to changes in valuation inputs or assumptions used in
      the valuation model		605 (212)
      Loan servicing asset revaluation$(670)$(1,100)
Balance, end of period$9,579 $5,795 


Loans serviced for others are not included in the condensed consolidated balance sheets. The unpaid principal balances of these loans serviced for others as of September 30, 2023 and December 31, 2022 are shown in the table below.
(in thousands)September 30, 2023December 31, 2022
Loan portfolios serviced for:
   SBA guaranteed loans$464,753 $318,194 
     Total$464,753 $318,194 

Loan servicing revenue totaled $1.1 million and $2.7 million for the three and nine months ended September 30, 2023, respectively, and $0.7 million and $1.9 million for the three and nine months ended September 30, 2022, respectively. Loan servicing asset revaluation, which represents the change in fair value of the servicing asset, resulted in a $0.3 million and $0.7 million downward valuation for the three and nine months ended September 30, 2023, respectively, and a $0.3 million and $1.1 million downward valuation for the three and nine months ended September 30, 2022, respectively.

The fair value of servicing rights is highly sensitive to changes in underlying assumptions. Though fluctuations in prepayment speeds and changes in secondary market premiums generally have the most substantial impact on the fair value of servicing rights, other influencing factors include changing economic conditions, changes to the discount rate assumption and the weighted average life of the servicing portfolio. Measurement of fair value is limited to the conditions existing and the assumptions used as of a particular point in time; however, those assumptions may change over time. Refer to Note 11 - Fair Value of Financial Instruments for further details.