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MORTGAGE SERVICING RIGHTS
 9 Months Ended
Sep. 30, 2020
Transfers and Servicing [Abstract]  
MORTGAGE SERVICING RIGHTS MORTGAGE SERVICING RIGHTSServicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors, and conducting foreclosure proceedings. Loan servicing income is recorded on the accrual basis and includes servicing fees from investors and certain charges collected from borrowers. Mortgage loans serviced for others are not reported as assets. The principal
balances of these loans are as follows:
(Dollars in thousands)September 30,
2020		December 31,
2019
Mortgage loans serviced for:
Federal Home Loan Mortgage Corporation ("Freddie Mac")$274,331 $379,339 
Other financial institutions106,733 134,140 
Total mortgage loans serviced for others$381,064 $513,479 
Custodial account balances maintained in connection with serviced loans totaled $7.2 million and $8.0 million at September 30, 2020 and December 31, 2019, respectively.
The Company measures servicing rights at fair value at each reporting date and reports changes in the fair value of servicing assets in earnings in the period in which the changes occur. Fair value is based on a valuation model that calculates the present value of estimated future net servicing income. Activities for mortgage servicing rights are as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in thousands)2020201920202019
Beginning balance$2,028 $3,172 $2,657 $3,463 
Additions— — — 155 
Disposals— — — — 
Change in fair value due to changes in assumptions— — — — 
Other changes in fair value(178)(206)(807)(652)
Ending balance$1,850 $2,966 $1,850 $2,966 
Fair value as of September 30, 2020 was determined using a discount rate of 10%, prepayment speeds ranging from 9.3% to 64.6%, depending on the stratification of the specific right, and a weighted average default rate of 5%. The weighted average prepayment speed at September 30, 2020 was 33.1%. Fair value as of December 31, 2019 was determined using a discount rate of 10%, prepayment speeds ranging from 6.0% to 58.7%, depending on the stratification of the specific right, and a weighted average default rate of 5%. The weighted average prepayment speed at December 31, 2019 was 22.8%.