Mortgage Banking

3 Months Ended

Mar. 31, 2022

9. Mortgage Banking

Net revenues from the sales and servicing of mortgage loans consisted of the following:


	Three Months Ended March 31,
	2022			2021
	(In Thousands)
Mortgage banking gain, net	$	2,543		$	5,640
Mortgage loans servicing revenue (expense):
Mortgage loans servicing revenue		1,879			1,917
Amortization of mortgage servicing rights		(1,403	)		(2,344	)
Mortgage servicing rights valuation adjustments		1,233			5,320
		1,709			4,893

Net revenue from sale and servicing of mortgage loans	$	4,252		$	10,533

The unpaid principal balance of residential mortgage loans serviced for third parties was $2.94 billion at March 31, 2022, and December 31, 2021.

Activity for capitalized mortgage servicing rights and the related valuation allowance follows for the three months ended March 31, 2022 and 2021:


	Three Months Ended March 31,
	2022			2021
	(In Thousands)
Mortgage servicing assets:
Balance at beginning of period	$	22,244		$	21,666
Loans sold, servicing retained		1,348			2,374
Amortization		(1,403	)		(2,344	)
Carrying value before valuation allowance at end of period		22,189			21,696

Valuation allowance:
Balance at beginning of period		(2,707	)		(8,513	)
Impairment recovery (charges)		1,233			5,320
Balance at end of period		(1,474	)		(3,193	)
Net carrying value of MSRs at end of period	$	20,715		$	18,503
Fair value of MSRs at end of period	$	25,996		$	18,695

Amortization of mortgage servicing rights is computed based on payments and payoffs of the related mortgage loans serviced. Estimates of future amortization expense are not easily estimable.

The Company had no accrual for secondary market buy-back activity at March 31, 2022 or December 31, 2021 based on management’s estimate of potential losses from this activity. There was no expense or credit recognized in the three months ended March 31, 2022.