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Mortgage Servicing Rights (Tables)
6 Months Ended
Jun. 30, 2024
Transfers and Servicing of Financial Assets [Abstract]  
Summary of Carrying Value Under the Fair Value Measurement Method

For the three and six months ended June 30, 2024 and June 30, 2023, the change in the carrying value of the Company’s mortgage servicing rights accounted for under the fair value measurement method was as follows:

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

(dollars in thousands)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Balance at Beginning of Period

 

$

674

 

 

$

707

 

 

$

678

 

 

$

717

 

Change in Fair Value Due to Payoffs

 

 

(6

)

 

 

(12

)

 

 

(10

)

 

 

(22

)

Balance at End of Period

 

$

668

 

 

$

695

 

 

$

668

 

 

$

695

 

Summary of Carrying Value Under the Amortization Method

For the three and six months ended June 30, 2024 and 2023, the change in the carrying value of the Company’s mortgage servicing rights accounted for under the amortization method was as follows:

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

(dollars in thousands)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Balance at Beginning of Period

 

$

19,748

 

 

$

21,395

 

 

$

20,201

 

 

$

21,902

 

Servicing Rights that Resulted From Asset Transfers

 

 

63

 

 

 

110

 

 

 

158

 

 

 

176

 

Amortization

 

 

(525

)

 

 

(574

)

 

 

(1,073

)

 

 

(1,147

)

Balance at End of Period

 

$

19,286

 

 

$

20,931

 

 

$

19,286

 

 

$

20,931

 

Fair Value of Mortgage Servicing Rights Accounted for
   Under the Amortization Method

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of Period

 

$

25,649

 

 

$

26,456

 

 

$

26,173

 

 

$

27,323

 

End of Period

 

$

25,326

 

 

$

26,327

 

 

$

25,326

 

 

$

26,327

 

Schedule of Key Data and Assumptions Used in Estimating the Fair Value

The key data and assumptions used in estimating the fair value of the Company’s mortgage servicing rights as of June 30, 2024 and December 31, 2023, were as follows:

 

 

June 30,
2024

 

 

December 31,
2023

 

Weighted-Average Constant Prepayment Rate 1

 

 

4.06

%

 

 

4.06

%

Weighted-Average Life (in years)

 

 

9.34

 

 

 

9.44

 

Weighted-Average Note Rate

 

 

3.70

%

 

 

3.67

%

Weighted-Average Discount Rate 2

 

 

9.94

%

 

 

9.48

%

 

1 Represents annualized loan prepayment rate assumption.

2 Derived from multiple interest rate scenarios that incorporate a spread to a market yield curve and market volatilities.

Schedule of Sensitivity Analysis of the Fair Value

A sensitivity analysis of the Company’s fair value of mortgage servicing rights to changes in certain key assumptions as of June 30, 2024 and December 31, 2023, is presented in the following table.

(dollars in thousands)

 

June 30,
2024

 

 

December 31,
2023

 

Constant Prepayment Rate

 

 

 

 

 

 

Decrease in fair value from 25 basis points (“bps”) adverse change

 

$

(312

)

 

$

(326

)

Decrease in fair value from 50 bps adverse change

 

 

(617

)

 

 

(645

)

Discount Rate

 

 

 

 

 

 

Decrease in fair value from 25 bps adverse change

 

 

(287

)

 

 

(303

)

Decrease in fair value from 50 bps adverse change

 

 

(568

)

 

 

(600

)