Servicing Assets

3 Months Ended

Mar. 31, 2025

Servicing Asset [Abstract]

Servicing Assets

Servicing Assets

The Company recognizes the right to service SBA loans for others as servicing assets when the servicing income the Company receives is more than adequate compensation. Servicing assets are accounted for using the amortization method. Under this method, the Company amortizes the servicing assets over the period of the economic life of the assets arising from estimated net servicing revenue.

The Company periodically stratifies its servicing assets into groupings based on risk characteristics and assesses each group for impairment based on fair value. Based on the results of the impairment test, there was no valuation allowance for impairment as of March 31, 2025 and December 31, 2024.

The following table presents an analysis of the changes in activity for loan servicing assets during the three months ended March 31, 2025 and 2024:

	Three Months Ended March 31,
($ in thousands)	2025		2024
Beginning balance	$	10,834	$	11,741
Additions from loans sold with servicing retained	681		552
Amortized to expense	(667)		(888)
Ending balance	$	10,848	$	11,405

The fair value of the servicing assets was $16.2 million as of March 31, 2025, which was determined using discount rates ranging from 4.32% to 12.90% and prepayment speeds ranging from 11.49% to 13.60%, depending on the stratification of the specific assets.

The fair value of the servicing assets was $17.4 million as of March 31, 2024, which was determined using discount rates ranging from 3.75% to 12.70% and prepayment speeds ranging from 11.00% to 12.90% depending on the stratification of the specific assets.