MORTGAGE SERVICING RIGHTS

9 Months Ended

Sep. 30, 2024

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 September 30, 2024 and December 31, 2023. 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 as of September 30, 2024 would be a decrease in the fair value of $43.1 million to the MSRs outstanding as of September 30, 2024.

The impact of a 200-basis point increase in the discount rate as of September 30, 2024 would be a decrease in the fair value of $83.2 million to the MSRs outstanding as of September 30, 2024.

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, 2024 and 2023 follows:

	For the three months ended				For the nine months ended
	September 30,				September 30,
Roll Forward of MSRs (in thousands)	2024		2023		2024		2023
Beginning balance	$	850,831	$	932,131	$	907,415	$	975,226
Additions, following the sale of loan		39,806		42,495		87,388		104,644
Amortization		(50,871)		(50,276)		(151,897)		(149,185)
Pre-payments and write-offs		(2,870)		(2,604)		(6,010)		(8,939)
Ending balance	$	836,896	$	921,746	$	836,896	$	921,746

The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s MSRs as of September 30, 2024 and December 31, 2023:

Components of MSRs (in thousands)	September 30, 2024		December 31, 2023
Gross value	$	1,771,026	$	1,733,844
Accumulated amortization		(934,130)		(826,429)
Net carrying value	$	836,896	$	907,415

The expected amortization of MSRs shown in the Condensed Consolidated Balance Sheet as of September 30, 2024 is shown in the table below. Actual amortization may vary from these estimates.

	Expected
(in thousands)	Amortization
Three Months Ending December 31,
2024	$	49,924
Year Ending December 31,
2025	$	184,542
2026		159,434
2027		137,779
2028		108,028
2029		80,845
Thereafter		116,344
Total	$	836,896