MORTGAGE SERVICING RIGHTS

9 Months Ended

Sep. 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 September 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 September 30, 2022 would be a decrease in the fair value of $40.6 million to the MSRs outstanding as of September 30, 2022.

The impact of a 200-basis point increase in the discount rate at September 30, 2022 would be a decrease in the fair value of $78.6 million to the MSRs outstanding as of September 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 nine months ended September 30, 2022 and 2021 follows:

	For the three months ended				For the nine months ended
	September 30,				September 30,
Roll Forward of MSRs (in thousands)	2022		2021		2022		2021
Beginning balance	$	978,745	$	915,519	$	953,845	$	862,813
Additions, following the sale of loan		45,454		70,095		182,753		224,035
Amortization		(47,391)		(44,402)		(140,846)		(130,868)
Pre-payments and write-offs		(9,038)		(11,387)		(27,982)		(26,155)
Ending balance	$	967,770	$	929,825	$	967,770	$	929,825

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

Components of MSRs (in thousands)	September 30, 2022		December 31, 2021
Gross value	$	1,622,213	$	1,548,870
Accumulated amortization		(654,443)		(595,025)
Net carrying value	$	967,770	$	953,845

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

	Expected
(in thousands)	Amortization
Three Months Ending December 31,
2022	$	46,639
Year Ending December 31,
2023	$	180,469
2024		163,771
2025		141,014
2026		119,503
2027		101,362
Thereafter		215,012
Total	$	967,770