Mortgage Servicing Rights

12 Months Ended

Dec. 31, 2024

Transfers and Servicing of Financial Assets [Abstract]

Mortgage Servicing Rights

Mortgage servicing rights

Changes in the Company’s mortgage servicing rights were as follows for the years ended December 31, 2024, 2023, and 2022:

	Years Ended December 31,
	2024		2023		2022
Carrying value at beginning of period	$	164,249	$	168,365	$	115,512
Capitalization	4,984		7,192		20,809
Change in fair value:
Due to payoffs/paydowns	(13,693)		(12,327)		(16,012)
Due to change in valuation inputs or assumptions	6,498		1,019		48,056
Carrying value at end of period	$	162,038	$	164,249	$	168,365

The following table summarizes servicing income and expense, which are included in mortgage banking income and other noninterest expense, respectively, in the consolidated statements of income for the years ended December 31, 2024, 2023, and 2022: 

	Years Ended December 31,
	2024		2023		2022
Servicing income	$	29,212	$	30,263	$	30,763
Change in fair value of mortgage servicing rights	(7,195)		(11,308)		32,044
Change in fair value of derivative hedging instruments	(9,083)		(4,918)		(42,143)
Servicing income	12,934		14,037		20,664
Servicing expenses	7,642		8,093		10,259
Net servicing income	$	5,292	$	5,944	$	10,405

Data and key economic assumptions, as well as the valuation's sensitivity to interest rate fluctuations, related to the Company’s mortgage servicing rights as of December 31, 2024 and 2023 are as follows: 

	December 31,
	2024			2023
Unpaid principal balance of mortgage loans sold and serviced for others	$	10,235,048		$	10,762,906
Weighted-average prepayment speed (CPR)	6.04		%	6.19		%
Estimated impact on fair value of a 10% increase	$	(4,213)		$	(4,616)
Estimated impact on fair value of a 20% increase	$	(8,168)		$	(8,924)
Discount rate	10.18		%	9.62		%
Estimated impact on fair value of a 100 bp increase	$	(7,515)		$	(7,637)
Estimated impact on fair value of a 200 bp increase	$	(14,397)		$	(14,624)
Weighted-average coupon interest rate	3.59		%	3.47		%
Weighted-average servicing fee (basis points)	27			27
Weighted-average remaining maturity (in months)	336			334

The sensitivity calculations above are hypothetical changes and should not be considered to be predictive of future performance. Changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of an adverse variation in a particular assumption on the fair value of the mortgage servicing rights calculated without changing any other assumption, while in reality changes in one factor may result in changes in another, which may either magnify or counteract the effect of the change. The derivative instruments utilized by the Company, which were not included in the above sensitivities, would serve to offset the estimated impacts to fair value included in the table above. See Note 15, “Derivatives” for additional information on these derivative instruments.

As of December 31, 2024 and 2023, the Company held mortgage escrow deposits totaling $68,995 and $63,591, respectively, related to loans sold with servicing retained.