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Transfers of Financial Assets
 9 Months Ended
Sep. 30, 2017
Transfers and Servicing [Abstract]  
Transfers of Financial Assets Transfers of Financial Assets
The Company sells financial assets in the normal course of business, primarily residential mortgage loans sold to government-sponsored enterprises through established programs and securitizations. The gain or loss on residential mortgage loans sold and the related origination fee income, and the fair value adjustment to loans held-for-sale are included as mortgage banking activities in the accompanying Condensed Consolidated Statements of Income.
The Company may be required to repurchase a loan in the event of certain breaches of the representations and warranties, or in the event of default of the borrower within 90 days of sale, as provided for in the sale agreements. A reserve for loan repurchases provides for estimated losses pertaining to the potential repurchase of loans associated with the Company’s mortgage banking activities. The reserve reflects management’s evaluation of the identity of the counterparty, the vintage of the loans sold, the amount of open repurchase requests, specific loss estimates for each open request, the current level of loan losses in similar vintages held in the residential loan portfolio, and estimated recoveries on the underlying collateral. The reserve also reflects management’s expectation of losses from repurchase requests for which the Company has not yet been notified, as the performance of loans sold and the quality of the servicing provided by the acquirer also may impact the reserve. The provision recorded at the time of the loan sale is netted from the gain or loss recorded in mortgage banking activities, while any incremental provision, post loan sale, is recorded in other non-interest expense in the accompanying Condensed Consolidated Statements of Income.
The following table provides a summary of activity in the reserve for loan repurchases:
 
Three months ended September 30,
 
Nine months ended September 30,
(In thousands)
2017
 
2016
 
2017
 
2016
Beginning balance
$
843

 
$
992

 
$
790

 
$
1,192

Provision (benefit) charged to expense
25

 
37

 
78

 
(64
)
Repurchased loans and settlements charged off
(18
)
 
—

 
(18
)
 
(99
)
Ending balance
$
850

 
$
1,029

 
$
850

 
$
1,029


The following table provides information for mortgage banking activities:
 
Three months ended September 30,
 
Nine months ended September 30,
(In thousands)
2017
 
2016
 
2017
 
2016
Residential mortgage loans held for sale:
 
 
 
 
 
 
 
Proceeds from sale
$
88,691

 
$
128,268

 
$
262,029

 
$
298,840

Loans sold with servicing rights retained
79,690

 
115,822

 
239,357

 
273,827

 
 
 
 
 
 
 
 
Net gain on sale
1,979

 
3,324

 
4,356

 
6,749

Ancillary fees
682

 
1,046

 
2,091

 
2,485

Fair value option adjustment
(240
)
 
(48
)
 
1,591

 
2,101


The Company has retained servicing rights on residential mortgage loans totaling $2.6 billion at both September 30, 2017 and December 31, 2016.
The following table presents the changes in carrying value for mortgage servicing assets:
 
Three months ended September 30,
 
Nine months ended September 30,
(In thousands)
2017
 
2016
 
2017
 
2016
Beginning balance
$
24,708

 
$
21,946

 
$
24,466

 
$
20,698

Additions
2,576

 
3,338

 
7,063

 
8,198

Amortization
(2,144
)
 
(1,900
)
 
(6,389
)
 
(5,512
)
Ending balance
$
25,140

 
$
23,384

 
$
25,140

 
$
23,384


Loan servicing fees, net of mortgage servicing rights amortization, were $0.2 million and $0.3 million for the three months ended September 30, 2017 and 2016, respectively, and $0.6 million and $0.9 million for the nine months ended September 30, 2017 and 2016, respectively, and are included as a component of loan related fees in the accompanying Condensed Consolidated Statements of Income.
See Note 13: Fair Value Measurements for a further discussion on the fair value of loans held for sale and mortgage servicing assets. Additionally, loans not originated for sale were sold approximately at carrying value, for cash proceeds of $7.4 million for certain residential loans and $20.8 million for certain commercial loans for the nine months ended September 30, 2017 and 2016, respectively.