LOAN SERVICING RIGHTS (Tables)

9 Months Ended

Sep. 30, 2021

Transfers and Servicing [Abstract]

Schedule of Carrying Value of Loan Servicing Rights Assets

The carrying value of the loan servicing rights assets is shown in the table below:

(dollars in thousands)	September 30, 2021		December 31, 2020
Loan Servicing Rights
Residential mortgage	$	188,506	$	130,630
SBA	5,833		5,839
Indirect automobile	—		73
Total loan servicing rights	$	194,339	$	136,542

The table below is an analysis of the activity in the Company’s MSRs and valuation allowance:

(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
Residential mortgage servicing rights	2021		2020		2021		2020
Beginning carrying value, net	$	191,675	$	91,381	$	130,630	$	94,902
Additions	6,195		30,376		71,439		65,735
Amortization	(7,967)		(6,231)		(22,648)		(16,084)
Recoveries/(impairment)	(1,397)		(1,130)		9,085		(30,157)
Ending carrying value, net	$	188,506	$	114,396	$	188,506	$	114,396

(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
Residential mortgage servicing valuation allowance	2021		2020		2021		2020
Beginning balance	$	28,925	$	29,131	$	39,407	$	104
Additions	1,397		1,130		1,397		30,157
Recoveries	—		—		(10,482)		—
Ending balance	$	30,322	$	30,261	$	30,322	$	30,261

The table below is an analysis of the activity in the Company’s SBA loan servicing rights and valuation allowance:

(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
SBA servicing rights	2021		2020		2021		2020
Beginning carrying value, net	$	6,123	$	5,241	$	5,839	$	7,886
Additions	265		499		736		974
Purchase accounting adjustment	—		—		—		(1,214)
Amortization	(555)		(396)		(1,647)		(1,175)
Recoveries/(impairment)	—		718		905		(409)
Ending carrying value, net	$	5,833	$	6,062	$	5,833	$	6,062

(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
SBA servicing valuation allowance	2021		2020		2021		2020
Beginning balance	$	—	$	1,268	$	905	$	141
Additions	—		—		—		409
Recoveries	—		(718)		(905)		—
Ending balance	$	—	$	550	$	—	$	550

The Company is not actively originating or selling indirect automobile loans.

(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
Indirect automobile servicing rights	2021		2020		2021		2020
Beginning carrying value, net	$	—	$	162	$	73	$	247
Amortization	—		(45)		(73)		(130)
Ending carrying value, net	$	—	$	117	$	—	$	117

Schedule of Sensitivity of Fair Value to Adverse Changes in Model Inputs and/or Assumptions

The key metrics and the sensitivity of the fair value to adverse changes in model inputs and/or assumptions are summarized below:

(dollars in thousands)	September 30, 2021			December 31, 2020
Residential mortgage servicing rights
Unpaid principal balance of loans serviced for others	$	15,994,406		$	13,764,529
Composition of residential loans serviced for others:
FHLMC	21.86		%	21.55		%
FNMA	60.05		%	61.75		%
GNMA	18.09		%	16.70		%
Total	100.00		%	100.00		%
Weighted average term (months)	341			340
Weighted average age (months)	20			20
Modeled prepayment speed	12.46		%	18.82		%
Decline in fair value due to a 10% adverse change	(8,334)			(7,154)
Decline in fair value due to a 20% adverse change	(16,035)			(13,664)
Weighted average discount rate	8.77		%	9.50		%
Decline in fair value due to a 10% adverse change	(6,503)			(4,304)
Decline in fair value due to a 20% adverse change	(12,565)			(8,321)

(dollars in thousands)	September 30, 2021			December 31, 2020
SBA servicing rights
Unpaid principal balance of loans serviced for others	$	418,377		$	351,325
Weighted average life (in years)	3.60			3.46
Modeled prepayment speed	18.10		%	19.14		%
Decline in fair value due to a 10% adverse change	(318)			(335)
Decline in fair value due to a 20% adverse change	(606)			(636)
Weighted average discount rate	10.62		%	9.55		%
Decline in fair value due to a 100 basis point adverse change	(153)			(151)
Decline in fair value due to a 200 basis point adverse change	(299)			(295)