NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS (Tables)

12 Months Ended

Dec. 31, 2021

Transfers and Servicing [Abstract]

Changes in Servicing Assets [Table Text Block]

The changes in MSRs are shown below for the indicated periods:

Year Ended December 31, 

2021

2020

2019

(In thousands)

Balance at beginning of year

$

33,071

$

26,762

$

27,428

Purchases of servicing assets

(1)

-

7,781

-

Capitalization of servicing assets

5,194

4,864

4,039

Amortization

(7,215)

(5,777)

(4,592)

Temporary impairment recoveries (charges), net

124

(206)

(43)

Other

(2)

(188)

(353)

(70)

Balance at end of year

$

30,986

$

33,071

$

26,762

(1)

Represents MSRs acquired in the BSPR acquisition.

(2)

Amount represents adjustments related to the repurchase of loans serviced for others, including MSRs related to loans previously serviced for BSPR

and eliminated as part of the acquisition in the third quarter of 2020.

Changes in Impairment Allowance [Table Text Block]

Changes in the impairment allowance were as follows for the indicated periods:

Year Ended December 31,

2021

2020

2019

(In thousands)

Balance at beginning of year

$

202

$

73

$

30

Temporary impairment charges

-

301

78

OTTI of servicing assets

-

(77)

-

Recoveries

(124)

(95)

(35)

 Balance at end of year

$

78

$

202

$

73

Components of Net Servicing Income [Table Text Block]

The components of net servicing income, included as part of mortgage banking activities in the consolidated

statements of income, are shown below for the indicated periods:

Year Ended December 31,

2021

2020

2019

(In thousands)

Servicing fees

$

12,176

$

9,268

$

8,522

Late charges and prepayment penalties

697

570

610

Adjustment for loans repurchased

(188)

(353)

(70)

Other 

(1)

-

(15)

 Servicing income, gross

12,684

9,485

9,047

Amortization and impairment of servicing assets

(7,091)

(5,983)

(4,635)

 Servicing income, net

$

5,593

$

3,502

$

4,412

Key Economic Assumptions Used in Determining Fair Value at Time of Sale of Loans [Table Text Block]

The Corporation’s MSRs are subject to prepayment and interest rate risks. Key economic assumptions used in

determining the fair value at the time of sale of the related mortgages for the indicated periods ranged as follows:

Maximum

Minimum

Year Ended December 31, 2021

Constant prepayment rate:

 Government-guaranteed mortgage loans

6.4

%

6.3

%

 Conventional conforming mortgage loans

6.8

%

6.6

%

 Conventional non-conforming mortgage loans

8.6

%

8.2

%

Discount rate:

 Government-guaranteed mortgage loans

12.0

%

12.0

%

 Conventional conforming mortgage loans

10.0

%

10.0

%

 Conventional non-conforming mortgage loans

13.7

%

13.5

%

Year Ended December 31, 2020

Constant prepayment rate:

 Government-guaranteed mortgage loans

6.5

%

6.2

%

 Conventional conforming mortgage loans

7.2

%

6.9

%

 Conventional non-conforming mortgage loans

9.2

%

8.6

%

Discount rate:

 Government-guaranteed mortgage loans

12.0

%

12.0

%

 Conventional conforming mortgage loans

10.0

%

10.0

%

 Conventional non-conforming mortgage loans

14.3

%

13.7

%

Year Ended December 31, 2019

Constant prepayment rate:

 Government-guaranteed mortgage loans

6.4

%

6.2

%

 Conventional conforming mortgage loans

6.9

%

6.7

%

 Conventional non-conforming mortgage loans

9.3

%

8.9

%

Discount rate:

 Government-guaranteed mortgage loans

12.0

%

12.0

%

 Conventional conforming mortgage loans

10.0

%

10.0

%

 Conventional non-conforming mortgage loans

14.3

%

14.3

%

Weighted-Averages of Key Economic Assumptions in Valuation Model [Table Text Block]

The weighted-averages of the key economic assumptions that the Corporation used in its valuation model and the sensitivity of the

current fair value to immediate

10

% and

20

% adverse changes in those assumptions for mortgage loans as of December 31, 2021 and

2020 were as follows:

December 31,

December 31,

2021

2020

(In thousands)

Carrying amount of servicing assets

$

30,986

$

33,071

Fair value

$

42,132

$

40,294

Weighted-average expected life (in years)

7.96

7.86

Constant prepayment rate (weighted-average annual rate)

6.55

%

6.73

%

 Decrease in fair value due to 10% adverse change

$

1,027

$

1,006

 Decrease in fair value due to 20% adverse change

$

2,011

$

1,970

Discount rate (weighted-average annual rate)

11.17

%

11.20

%

 Decrease in fair value due to 10% adverse change

$

1,852

$

1,772

 Decrease in fair value due to 20% adverse change

$

3,561

$

3,409