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Transfers of Financial Assets
 3 Months Ended
Mar. 31, 2020
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. Residential mortgage origination fees, adjustments for changes in fair value, and gain or loss on loans sold are included as mortgage banking activities in the consolidated statement 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 loan repurchase requests received by the Company for which management evaluates 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 loan repurchase requests for which the Company has not yet been notified. 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 consolidated income statement.
The following table provides a summary of activity in the reserve for loan repurchases:
 Three months ended March 31,
(In thousands)20202019
Beginning balance$508  $674  
Provision charged to expense22  7  
Recoveries (repurchased loans and settlements charged off)103  (5) 
Ending balance$633  $676  
The following table provides information for mortgage banking activities:
 Three months ended March 31,
(In thousands)20202019
Residential mortgage loans held for sale:
Proceeds from sale$75,594  $20,613  
Loans sold with servicing rights retained72,091  17,348  
Net gain on sale2,519  158  
Ancillary fees401  261  
Fair value option adjustment(27) 345  
Additionally, loans not originated for sale were sold approximately at carrying value for cash proceeds of $0.4 million for certain commercial loans for the three months ended March 31, 2020, and $4.0 million for certain residential loans for the three months ended March 31, 2019.
The Company services residential mortgage loans for other entities totaling $2.4 billion at both March 31, 2020 and December 31, 2019.
The following table presents the changes in carrying value for mortgage servicing assets:
Three months ended March 31,
(In thousands)20202019
Beginning balance$17,484  $21,215  
Additions1,189  462  
Amortization(1,707) (1,892) 
Valuation allowance(575) —  
Ending balance$16,391  $19,785  
Loan servicing fees, net of mortgage servicing rights amortization, were $0.5 million and $0.4 million for the three months ended March 31, 2020 and 2019, respectively, and are included as a component of loan related fees in the consolidated statement of income.
Refer to Note 14: Fair Value Measurements for additional information on loans held for sale and mortgage servicing assets.