Mortgage Servicing Rights (Tables)

9 Months Ended

Sep. 30, 2021

Transfers And Servicing Of Financial Assets [Abstract]

Summary of Carrying Value Under the Fair Value Measurement Method

For the three and nine months ended September 30, 2021, and September 30, 2020, 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 September 30,						Nine Months Ended September 30,
(dollars in thousands)	2021			2020			2021			2020
Balance at Beginning of Period	$	875		$	1,068		$	958		$	1,126
Change in Fair Value Due to Payoffs:		(49	)		(50	)		(132	)		(108	)
Balance at End of Period	$	826		$	1,018		$	826		$	1,018

Summary of Carrying Value Under the Amortization Method

For the three and nine months ended September 30, 2021, and September 30, 2020, 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 September 30,						Nine Months Ended September 30,
(dollars in thousands)	2021			2020			2021			2020
Balance at Beginning of Period	$	20,598		$	21,836		$	18,694		$	23,896
Servicing Rights that Resulted From Asset Transfers		1,082			872			4,022			3,042
Amortization		(1,069	)		(1,271	)		(3,228	)		(3,684	)
Valuation Allowance Recovery (Provision)		662			(568	)		1,785			(2,385	)
Balance at End of Period	$	21,273		$	20,869		$	21,273		$	20,869
Valuation Allowance:
Balance at Beginning of Period	$	(2,769	)	$	(1,817	)	$	(3,892	)	$	—
Valuation Allowance Recovery (Provision)		662			(568	)		1,785			(2,385	)
Balance at End of Period	$	(2,107	)	$	(2,385	)	$	(2,107	)	$	(2,385	)
Fair Value of Mortgage Servicing Rights Accounted for    Under the Amortization Method
Beginning of Period	$	20,598		$	21,836		$	18,694		$	25,714
End of Period	$	21,273		$	20,870		$	21,273		$	20,870

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 September 30, 2021, and December 31, 2020, were as follows:

	September 30, 2021			December 31, 2020
Weighted-Average Constant Prepayment Rate 1		11.50	%		14.42	%
Weighted-Average Life (in years)		6.00			4.99
Weighted-Average Note Rate		3.67	%		3.87	%
Weighted-Average Discount Rate 2		6.67	%		5.81	%

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 September 30, 2021, and December 31, 2020, is presented in the following table.

(dollars in thousands)	September 30, 2021			December 31, 2020
Constant Prepayment Rate
Decrease in fair value from 25 basis points (“bps”) adverse change	$	(246	)	$	(203	)
Decrease in fair value from 50 bps adverse change		(487	)		(401	)
Discount Rate
Decrease in fair value from 25 bps adverse change		(223	)		(184	)
Decrease in fair value from 50 bps adverse change		(441	)		(365	)