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SBA Loan Servicing Activities
 9 Months Ended
Sep. 30, 2021
Transfers and Servicing [Abstract]  
SBA Loan Servicing Activities SBA LOAN SERVICING ACTIVITIES
At September 30, 2021 and December 31, 2020, the principal balance of SBA loans, excluding PPP loans, retained by the Company was $314,015 and $253,330, respectively, of which $184,119 and $110,196 represented the guaranteed portion of the loans. Loans serviced for others are not included in the accompanying Consolidated Balance Sheets. The unpaid principal balances of SBA loans serviced for others requiring recognition of a servicing asset were $443,764 and $524,910 at September 30, 2021 and December 31, 2020, respectively.
Activity for SBA loan servicing rights for the three and nine months ended September 30, 2021 and 2020 follows:
Three Months EndedNine Months Ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020
Beginning of period
$6,614 $10,034 $8,160 $11,280 
Additions
100 — 100 530 
Amortization
(781)(865)(2,327)(2,641)
End of period
$5,933 $9,169 $5,933 $9,169 
The fair value of SBA loan servicing rights was $7,615 and $9,709 at September 30, 2021 and December 31, 2020, respectively. Fair value was determined using a weighted average discount rate of 12.12% and a weighted average
prepayment speed of 10.52% at September 30, 2021. Fair value was determined using a weighted average discount rate of 11.75% and a weighted average prepayment speed of 10.34% at December 31, 2020. The SBA loan servicing rights are amortized over the life of a loan on a loan-by-loan basis.
The following table presents the components of net gain (loss) on sale of SBA loans, excluding sale of PPP loans, for the three and nine months ended September 30, 2021 and 2020:
Three Months EndedNine Months Ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020
Gain on sale of guaranteed SBA loans
$— $— $— $2,087 
Loss on sale of unguaranteed SBA loans(406)— (406)— 
Costs recognized on sale of SBA loans
(51)— (51)(885)
Fair value of servicing rights created
100 — 100 530 
Gain on sale of SBA loans, net
$(357)$— $(357)$1,732 
The Company also sold PPP loans, servicing released, for a net gain of $19 and $13,817 for the three and nine months ended September 30, 2021.