MORTGAGE SERVICING RIGHTS

12 Months Ended

Dec. 31, 2025

MSRs

MORTGAGE SERVICING RIGHTS

MORTGAGE SERVICING RIGHTS

NOTE 3—MORTGAGE SERVICING RIGHTS

The fair value of MSRs was $1.4 billion as of both December 31, 2025 and 2024. The Company uses a discounted static cash flow valuation approach, and the key economic assumptions are the discount rate and placement fee rate. See the following sensitivities showing the changes in fair value related to changes in these key economic assumptions:

MSR Key Economic Assumptions Sensitivities (in millions)	Decrease in Fair Value
Discount Rate
100 basis point increase	$	39.4
200 basis point increase		76.1
Placement Fee Rate
50 basis point decrease	$	49.7
100 basis point decrease		99.5

These sensitivities are hypothetical and should be used with caution. These estimates do not include interplay among assumptions and are estimated as a portfolio rather than individual assets.

Activity related to capitalized MSRs (net of accumulated amortization) for the years ended December 31, 2025 and 2024 follows:

	For the year ended December 31,
Roll Forward of MSRs (in thousands)	2025		2024
Beginning balance	$	852,399	$	907,415
Additions, following the sale of loan		178,136		156,984
Amortization		(210,536)		(203,600)
Pre-payments and write-offs		(11,854)		(8,400)
Ending balance	$	808,145	$	852,399

The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s MSRs as of December 31, 2025 and 2024:

Components of MSRs (in thousands)	December 31, 2025		December 31, 2024
Gross value	$	1,824,350	$	1,808,295
Accumulated amortization		(1,016,205)		(955,896)
Net carrying value	$	808,145	$	852,399

The expected amortization of MSRs held in the Consolidated Balance Sheet as of December 31, 2025 is shown in the table below. Actual amortization may vary from these estimates.

	Expected
	Amortization
Year Ending December 31, (in thousands)
2026	$	199,489
2027		178,400
2028		147,206
2029		107,607
2030		69,735
Thereafter		105,708
Total	$	808,145

The Company recorded write-offs of MSRs related to loans that were repaid prior to the expected maturity and loans that defaulted. These write-offs are included as a component of the MSR roll forward shown above and as a component of Amortization and depreciation in the Consolidated Statements of Income. Prepayment fees totaling $9.1 million, $3.5 million, and $3.5 million were earned for 2025, 2024, and 2023, respectively, and are included as a component of Other revenues in the Consolidated Statements of Income. Placement fees totaling $114.5 million, $137.6 million, and $127.4 million were earned for the years ended December 31, 2025, 2024, and 2023, respectively, and are included as a component of Placement fees and other interest income in the Consolidated Statements of Income. All other ancillary servicing fees were insignificant for the periods presented.

Management reviews the MSRs for temporary impairment quarterly by comparing the aggregate carrying value of the MSR portfolio to the aggregate estimated fair value of the portfolio. Additionally, MSRs related to Fannie Mae loans where the Company has risk-sharing obligations are assessed for permanent impairment on an asset-by-asset basis in conjunction with the Company’s assessment of the allowance for risk-sharing obligations. Except for defaulted or prepaid loans, no temporary or permanent impairment was recognized for the years ended December 31, 2025, 2024, and 2023.

As of December 31, 2025, the weighted-average remaining life of the aggregate MSR portfolio was 5.7 years.