MORTGAGE SERVICING RIGHTS

6 Months Ended

Jun. 30, 2023

MSRs

Mortgage Servicing Rights

MORTGAGE SERVICING RIGHTS

NOTE 3—MORTGAGE SERVICING RIGHTS

The fair value of the mortgage servicing rights (“MSRs”) was $1.4 billion as of both June 30, 2023 and December 31, 2022. 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, 2023 would be a decrease in the fair value of $42.4 million to the MSRs outstanding as of June 30, 2023.

The impact of a 200-basis point increase in the discount rate at June 30, 2023 would be a decrease in the fair value of $82.0 million to the MSRs outstanding as of June 30, 2023.

These sensitivities are hypothetical and should be used with caution, and these estimates do not include interplay among assumptions.

Activity related to MSRs for the three and six months ended June 30, 2023 and 2022 follows:

	For the three months ended				For the six months ended
	June 30,				June 30,
Roll Forward of MSRs (in thousands)	2023		2022		2023		2022
Beginning balance	$	946,406	$	976,554	$	975,226	$	953,845
Additions, following the sale of loan		38,119		60,445		62,149		137,299
Amortization		(49,467)		(47,098)		(98,909)		(93,455)
Pre-payments and write-offs		(2,927)		(11,156)		(6,335)		(18,944)
Ending balance	$	932,131	$	978,745	$	932,131	$	978,745

The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s MSRs as of June 30, 2023 and December 31, 2022:

Components of MSRs (in thousands)	June 30, 2023		December 31, 2022
Gross value	$	1,682,025	$	1,659,185
Accumulated amortization		(749,894)		(683,959)
Net carrying value	$	932,131	$	975,226

The expected amortization of MSRs shown in the Condensed Consolidated Balance Sheet as of June 30, 2023 is shown in the table below. Actual amortization may vary from these estimates.

	Expected
(in thousands)	Amortization
Six Months Ending December 31,
2023	$	96,807
Year Ending December 31,
2024	$	181,006
2025		158,432
2026		132,857
2027		112,750
2028		91,921
Thereafter		158,358
Total	$	932,131