MORTGAGE SERVICING RIGHTS

6 Months Ended

Jun. 30, 2022

MSRs

Mortgage Servicing Rights

Mortgage Servicing Rights

NOTE 3—MORTGAGE SERVICING RIGHTS

The fair value of the mortgage servicing rights (“MSRs”) was $1.3 billion as of both June 30, 2022 and December 31, 2021. The Company uses a discounted static cash flow valuation approach, and the key economic assumption is the discount rate. For example, see the following sensitivities related to the discount rate:

The impact of a 100-basis point increase in the discount rate at June 30, 2022 would be a decrease in the fair value of $40.6 million to the MSRs outstanding as of June 30, 2022.

The impact of a 200-basis point increase in the discount rate at June 30, 2022 would be a decrease in the fair value of $78.6 million to the MSRs outstanding as of June 30, 2022.

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 MSRs for the three and six months ended June 30, 2022 and 2021 follows:

	For the three months ended				For the six months ended
	June 30,				June 30,
Roll Forward of MSRs (in thousands)	2022		2021		2022		2021
Beginning balance	$	976,554	$	909,884	$	953,845	$	862,813
Additions, following the sale of loan		60,445		57,300		137,299		153,940
Amortization		(47,098)		(43,914)		(93,455)		(86,466)
Pre-payments and write-offs		(11,156)		(7,751)		(18,944)		(14,768)
Ending balance	$	978,745	$	915,519	$	978,745	$	915,519

The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s MSRs as of June 30, 2022 and December 31, 2021:

Components of MSRs (in thousands)	June 30, 2022		December 31, 2021
Gross value	$	1,617,975	$	1,548,870
Accumulated amortization		(639,230)		(595,025)
Net carrying value	$	978,745	$	953,845

The expected amortization of MSRs shown in the Condensed Consolidated Balance Sheet as of June 30, 2022 is shown in the table below. Actual amortization may vary from these estimates.

	Expected
(in thousands)	Amortization
Six Months Ending December 31,
2022	$	92,455
Year Ending December 31,
2023	$	177,502
2024		159,556
2025		136,593
2026		115,353
2027		97,384
Thereafter		199,902
Total	$	978,745