The Company sells certain residential mortgage loans and SBA loans to third parties. All such transfers are accounted for as sales and the continuing involvement in the loans sold is limited to certain servicing responsibilities. The Company has also acquired portfolios of residential mortgage, SBA and indirect automobile loans serviced for others. Loan servicing rights are initially recorded at fair value and subsequently recorded at the lower of cost or fair value and are amortized over the remaining service life of the loans, with consideration given to prepayment assumptions. Loan servicing rights are recorded in other assets on the consolidated balance sheets. The carrying value of the loan servicing rights assets is shown in the table below:


(dollars in thousands)	June 30, 2020		December 31, 2019
Loan Servicing Rights
Residential mortgage	$	91,381	$	94,902
SBA	5,241		7,886
Indirect automobile	162		247
Total loan servicing rights	$	96,784	$	103,035

The Company sells certain first-lien residential mortgage loans to third party investors, primarily Federal National Mortgage Association (“FNMA”), Government National Mortgage Association (“GNMA”), and Federal Home Loan Mortgage Corporation (“FHLMC”). The Company retains the related mortgage servicing rights (“MSRs”) and receives servicing fees on certain of these loans. The net gain on loan sales, MSRs amortization and recoveries/impairment, and ongoing servicing fees on the portfolio of loans serviced for others are recorded in the consolidated statements of income and comprehensive income as part of mortgage banking activity.

During the three- and six-months ended June 30, 2020, the Company recorded servicing fee income of $6.9 million and $13.1 million, respectively. During the three- and six-months ended June 30, 2019, the Company recorded servicing fee income of $949,000 and $1.8 million, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.


	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	2020		2019		2020		2019
Residential mortgage servicing rights
Beginning carrying value, net	$	85,922	$	12,104	$	94,902	$	11,814
Additions	19,298		1,007		35,359		1,699
Amortization	(5,687)		(466)		(9,853)		(868)
Impairment	(8,152)		(1,460)		(29,027)		(1,460)
Ending carrying value, net	$	91,381	$	11,185	$	91,381	$	11,185


	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	2020		2019		2020		2019
Residential mortgage servicing impairment
Beginning balance	$	20,979	$	—	$	104	$	—
Additions	8,152		1,460		29,027		1,460

Ending balance	$	29,131	$	1,460	$	29,131	$	1,460


(dollars in thousands)	June 30, 2020			December 31, 2019
Residential mortgage servicing rights
Unpaid principal balance of loans serviced for others	$	10,266,233		$	8,469,600
Composition of residential loans serviced for others:
FHLMC	21.24		%	25.87		%
FNMA	64.77		%	65.35		%
GNMA	13.99		%	8.78		%
Total	100.00		%	100.00		%
Weighted average term (months)	341			341
Weighted average age (months)	28			33
Modeled prepayment speed	20.21		%	14.41		%
Decline in fair value due to a 10% adverse change	(5,255)			(4,455)
Decline in fair value due to a 20% adverse change	(9,945)			(8,520)
Weighted average discount rate	9.64		%	9.49		%
Decline in fair value due to a 10% adverse change	(2,936)			(3,557)
Decline in fair value due to a 20% adverse change	(5,686)			(6,810)

All sales of SBA loans, consisting of the guaranteed portion, are executed on a servicing retained basis. These loans, which are partially guaranteed by the SBA, are generally secured by business property such as real estate, inventory, equipment and accounts receivable. The net gain on SBA loan sales, amortization and impairment/recoveries of servicing rights, and ongoing servicing fees are recorded in the consolidated statements of income and comprehensive income as part of other noninterest income.

During the three- and six-months ended June 30, 2020, the Company recorded servicing fee income of $1.0 million and $2.1 million, respectively. During the three- and six-months ended June 30, 2019, the Company recorded servicing fee income of $520,000 and $1.1 million, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.


	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	2020		2019		2020		2019
SBA servicing rights
Beginning carrying value, net	$	5,394	$	3,042	$	7,886	$	3,012
Additions	100		170		475		429
Purchase accounting adjustment	—		—		(1,214)		—
Amortization	(416)		(102)		(779)		(331)
(Impairment)/recovery	163		—		(1,127)		—
Ending carrying value, net	$	5,241	$	3,110	$	5,241	$	3,110


	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	2020		2019		2020		2019
SBA servicing impairment
Beginning balance	$	1,431	$	—	$	141	$	—
Additions	—		—		1,127		—
Recoveries	(163)		—		—		—
Ending balance	$	1,268	$	—	$	1,268	$	—


(dollars in thousands)	June 30, 2020			December 31, 2019
SBA servicing rights
Unpaid principal balance of loans serviced for others	$	335,416		$	339,247
Weighted average life (in years)	3.37			3.81
Modeled prepayment speed	19.87		%	17.86		%
Decline in fair value due to a 10% adverse change	(306)			(299)
Decline in fair value due to a 20% adverse change	(581)			(570)
Weighted average discount rate	10.91		%	11.47		%
Decline in fair value due to a 100 basis point adverse change	(130)			(144)
Decline in fair value due to a 200 basis point adverse change	(254)			(280)

The Company acquired a portfolio of indirect automobile loans serviced for others. These loans, or portions of loans, were sold on a servicing retained basis. Amortization and impairment/recoveries of servicing rights, and ongoing servicing fees are recorded in the consolidated statements of income and comprehensive income as part of other noninterest income. The Company is not actively originating or selling indirect automobile loans.


	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	2020		2019		2020		2019
Indirect automobile servicing rights
Beginning carrying value, net	$	204	$	—	$	247	$	—

Amortization	(42)		—		(85)		—

Ending carrying value, net	$	162	$	—	$	162	$	—

During the three- and six-months ended June 30, 2020, the Company recorded servicing fee income of $518,000 and $1.2 million, respectively. The Company did not record any servicing fee income for the three- and six-months ended June 30, 2019. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.