Loan Servicing

3 Months Ended

Mar. 31, 2022

Transfers And Servicing [Abstract]

Loan Servicing

6. LOAN SERVICING

Mortgage loans serviced for others are not included in the accompanying unaudited consolidated balance sheets. The unpaid principal balances of residential mortgage loans serviced for others were $1.95 billion and $1.98 billion at March 31, 2022 and December 31, 2021, respectively. In connection with these serviced loans, we maintained $16.5 million and $16.6 million of custodial escrow balances at March 31, 2022 and December 31, 2021, respectively.

The following table summarizes the activity relating to mortgage servicing rights (“MSRs”) for the three months ended March 31, 2022 and 2021 (in thousands):

	March 31, 2022			March 31, 2021
Mortgage servicing rights:
Balance at beginning of year	$	18,173		$	15,372
Additions through originations		377			2,786
Amortization		(749	)		(840	)
Balance at end of period	$	17,801		$	17,318
Valuation allowance:
Balance at beginning of year	$	2,558		$	2,995
Provision (recovery)		(135	)		(421	)
Balance at end of period	$	2,423		$	2,574
Amortized cost, net	$	15,378		$	14,744
Fair value	$	16,055		$	15,362

During the three months ended March 31, 2022 the Company decreased the valuation allowance for its MSRs by $135,000. During the three months ended March 31, 2021, the Company decreased the valuation allowance for its MSRs by $421,000. Such adjustments to the valuation allowance were due primarily to changes in fair value caused by the impact of changes in interest rates on expected loan prepayments.