Mortgage Servicing Rights ("MSRs")

6 Months Ended

Jun. 30, 2018

Disclosures Pertaining to Servicing Assets and Servicing Liabilities [Abstract]

Mortgage Servicing Rights (MSRs)

Mortgage Servicing Rights (“MSRs”)

The following is a summary of the changes in the carrying value of MSRs, accounted for at fair value, for the periods indicated:

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
(Dollars in thousands)	2018			2017			2018			2017
Balance at beginning of the period	$	54,572		$	21,596		$	33,676		$	19,103
Additions from loans sold with servicing retained	7,889			5,448			12,048			8,214
Additions from acquisitions	—			—			13,806			—
Estimate of changes in fair value due to:
Payoffs and paydowns	(1,364		)	(562		)	(2,566		)	(991		)
Changes in valuation inputs or assumptions	2,097			825			6,230			981
Fair value at end of the period	$	63,194		$	27,307		$	63,194		$	27,307
Unpaid principal balance of mortgage loans serviced for others	$	5,228,699		$	2,303,435

The Company recognizes MSR assets upon the sale of residential real estate loans to external third parties when it retains the obligation to service the loans and the servicing fee is more than adequate compensation. The initial recognition of MSR assets from loans sold with servicing retained and subsequent changes in fair value of all MSRs are recognized in mortgage banking revenue. MSRs are subject to changes in value from actual and expected prepayment of the underlying loans. The Company does not specifically hedge the value of its MSRs.

Fair values are determined by using a discounted cash flow model that incorporates the objective characteristics of the portfolio as well as subjective valuation parameters that purchasers of servicing would apply to such portfolios sold into the secondary market. The subjective factors include loan prepayment speeds, discount rates, servicing costs and other economic factors. The Company uses a third party to assist in the valuation of MSRs.