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Transfers of Financial Assets
 9 Months Ended
Sep. 30, 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 September 30,Nine months ended September 30,
(In thousands)2020201920202019
Beginning balance$655 $684 $508 $674 
Provision charged to expense50 19 99 1,839 
(Charge-offs/settlements, net) recoveries, net— (7)98 (1,817)
Ending balance$705 $696 $705 $696 
The following table provides information for mortgage banking activities:
 Three months ended September 30,Nine months ended September 30,
(In thousands)2020201920202019
Residential mortgage loans held for sale:
Proceeds from sale$172,579 $66,236 $342,747 $129,700 
Loans sold with servicing rights retained164,054 60,493 325,832 117,306 
Net gain on sale6,244 1,652 11,587 2,510 
Ancillary fees1,018 470 2,243 1,051 
Fair value option adjustment(175)11 355 268 
Additionally, loans not originated for sale were sold approximately at carrying value for cash proceeds of $6.4 million, resulting in a gain of approximately $295 thousand, for certain commercial loans for the nine months ended September 30, 2020, and $4.0 million for certain residential loans and $16.6 million, resulting in a gain of approximately $615 thousand, for certain commercial loans for the nine months ended September 30, 2019.
The Company services residential mortgage loans for other entities totaling $2.4 billion at both September 30, 2020 and December 31, 2019.
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)2020201920202019
Beginning balance$14,926 $18,712 $17,484 $21,215 
Additions1,301 966 3,269 2,219 
Amortization(1,616)(1,801)(4,992)(5,557)
Valuation allowance(203)— (1,353)— 
Ending balance$14,408 $17,877 $14,408 $17,877 
Loan servicing fees, net of mortgage servicing rights amortization, were $0.3 million and $0.5 million for the three months ended September 30, 2020, and $1.1 million and $1.4 million for the nine months ended September 30, 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.