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Servicing Rights
 12 Months Ended
Dec. 31, 2021
Transfers and Servicing [Abstract]  
Servicing Rights Servicing Rights
Mortgage servicing rights
    The following table details the activity in the Company's MSR for the year indicated:
(In Thousands)202120202019
Balance, beginning of period$11,218 $11,920 $10,821 
Additions for new MSR capitalized6,088 4,824 3,707 
Changes in fair value:
  Due to changes in model inputs of assumptions (1)
(1,181)(2,701)(1,313)
  Other (2)
(2,401)(2,825)(1,295)
Carrying value, December 31$13,724 $11,218 $11,920 

(1) Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.
(2) Represents changes due to collection/realization of expected cash flows over time.

    The following table details information related to our serviced mortgage loan portfolio as of the dates indicated:
(In Thousands)December 31, 2021December 31, 2020
Balance of mortgage loans serviced for others$772,764 $683,117 
MSR as a percentage of serviced loans1.78 %1.64 %

    The Company recognized servicing fees of $2.9 million, $2.7 million, and $2.4 million during 2021, 2020, and 2019, respectively, which includes contractually specified servicing fees and ancillary fees which are included in "Mortgage banking income" as a component of other noninterest income in the Company's Consolidated Statements of Income.

    The following table outlines the key assumptions used in measuring the fair value of mortgage servicing rights as of December 31, 2021 and 2020:
20212020
Average constant prepayment rate11.80 %13.05 %
Average discount rate8.00 %7.75 %
    Key economic assumptions and the sensitivity of the current fair value for mortgage servicing rights to immediate adverse changes in those assumptions at December 31, 2021 and 2020 were as follows:
(In Thousands)December 31, 2021December 31, 2020
Aggregate portfolio principal balance$772,764 $683,117 
Weighted average rate of note3.31 %3.62 %
December 31, 2021Base1.0% Adverse Rate Change2.0% Adverse Rate Change
Conditional prepayment rate11.80 %23.59 %34.57 %
Discount rate8.00 %7.00 %6.00 %
Fair value MSR$13,724 $9,612 $7,256 
Percentage of MSR1.78 %1.24 %0.94 %
December 31, 2020
Conditional prepayment rate13.05 %26.11 %38.97 %
Discount rate7.75 %6.75 %5.75 %
Fair value MSR$11,218 $7,455 $5,404 
Percentage of MSR1.64 %1.09 %0.79 %

    The above tables show the sensitivity to market rate changes for the par rate coupon for a conventional one-to-four family Alaska Housing Finance Corporation/FNMA/FHLMC serviced home loan. The above tables reference a 100 basis point and 200 basis point decrease in discount rates.

    These sensitivities are hypothetical and should be used with caution as the tables above demonstrate the Company’s methodology for estimating the fair value of MSR is highly sensitive to changes in key assumptions. For example, actual prepayment experience may differ and any difference may have a material effect on MSR fair value. Changes in fair value resulting from changes in assumptions generally cannot be extrapolated because the relationship of the change in the assumption to the change in fair value may not be linear. Also, in these tables, the effects of a variation in a particular assumption on the fair value of the MSR is calculated without changing any other assumption; in reality, changes in one factor may be associated with changes in another (for example, decreases in market interest rates may provide an incentive to refinance; however, this may also indicate a slowing economy and an increase in the unemployment rate, which reduces the number of borrowers who qualify for refinancing), which may magnify or counteract the sensitivities. Thus, any measurement of MSR fair value is limited by the conditions existing and assumptions made at a particular point in time. Those assumptions may not be appropriate if they are applied to a different point in time.

Commercial servicing rights
    Commercial servicing right assets ("CSRs") have a carrying value of $1.1 million and $1.3 million at December 31, 2021 and 2020, respectively, and total commercial loans serviced for others were $259.8 million and $274.6 million at December 31, 2021 and 2020, respectively. Key assumptions used in measuring the fair value of CSRs as of December 31, 2021 and 2020 include a conditional prepayment rate of 16.08% and 9.66% and a discount rate of 9.94% and 9.46%, respectively.