Servicing Assets

3 Months Ended

Mar. 31, 2021

Transfers And Servicing [Abstract]

Servicing Assets

Note 6—Servicing Assets

Activity for servicing assets and the related changes in fair value for the three months ended March 31, 2021 and 2020 was as follows:

	Three Months Ended March 31,
	2021			2020
Beginning balance	$	22,042		$	19,471
Additions, net		1,603			1,393
Changes in fair value		(1,505	)		(3,064	)
Ending balance	$	22,140		$	17,800

Loans serviced for others are not included in the Consolidated Statements of Financial Condition. The unpaid principal balances of these loans serviced for others as of March 31, 2021 and December 31, 2020 were as follows:

	March 31,		December 31,
	2021		2020
Loan portfolios serviced for:
SBA guaranteed loans	$	1,422,478	$	1,395,713
USDA guaranteed loans		146,512		135,543
Total	$	1,568,990	$	1,531,256

Loan servicing revenue totaled $2.8 million for each of the three months ended March 31, 2021 and 2020, respectively. Loan servicing asset revaluation, which represents the changes in fair value of servicing assets, resulted in a downward valuation of $1.5 million and $3.1 million for three months ended March 31, 2021 and 2020, respectively.

The fair value of servicing rights is highly sensitive to changes in underlying assumptions. Changes in secondary market premiums and prepayment speed assumptions have the most significant impact on the fair value of servicing rights.

Generally, as interest rates rise on variable rate loans, loan prepayments increase due to an increase in refinance activity, which may result in a decrease in the fair value of servicing assets. Measurement of fair value is limited to the conditions existing and the assumptions used as of a particular point in time, and those assumptions may change over time. Refer to Note 15—Fair Value Measurement for further details.