XML 23 R12.htm IDEA: XBRL DOCUMENT v3.21.2
Transfers of Financial Assets
 6 Months Ended
Jun. 30, 2021
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 gains or losses on loans sold are included as mortgage banking activities on 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 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 accompanying Condensed Consolidated Statements of Income.
The following table provides a summary of activity in the reserve for loan repurchases:
 Three months ended June 30,Six months ended June 30,
(In thousands)2021202020212020
Beginning balance$770 $633 $747 $508 
Provision charged to expense20 27 43 49 
(Charge-offs/settlements) recoveries, net(8)(5)(8)98 
Ending balance$782 $655 $782 $655 
The following table provides information for mortgage banking activities:
 Three months ended June 30,Six months ended June 30,
(In thousands)2021202020212020
Residential mortgage loans held for sale:
Proceeds from sale$68,427 $94,574 $147,735 $170,168 
Loans sold with servicing rights retained66,087 89,687 141,778 161,778 
Net gain on sale1,351 2,824 3,460 5,343 
Ancillary fees377 824 918 1,225 
Fair value option adjustment(409)557 (417)530 
Additionally, certain commercial and consumer loans not originated for sale were sold for cash proceeds of $49.1 million for the six months ended June 30, 2021, resulting in a gain of $718 thousand, and $3.6 million for the six months ended June 30, 2020, resulting in a gain of $256 thousand.
The Company services residential mortgage loans for other entities totaling $2.2 billion at June 30, 2021 and $2.3 billion at December 31, 2020.
The following table presents the changes in carrying value for mortgage servicing assets:
Three months ended June 30,Six months ended June 30,
(In thousands)2021202020212020
Beginning balance$12,327 $16,391 $13,422 $17,484 
Additions616 779 1,202 1,968 
Amortization(1,442)(1,669)(2,932)(3,376)
Adjustment to valuation allowance— (575)(191)(1,150)
Ending balance$11,501 $14,926 $11,501 $14,926 
Loan servicing fees, net of mortgage servicing rights amortization, were $0.2 million and $0.3 million for the three months ended June 30, 2021 and 2020, respectively, and $0.6 million and $0.8 million for the six months ended June 30, 2021 and 2020, respectively, and are included within loan and lease related fees on the accompanying Condensed Consolidated Statements of Income.
Refer to Note 15: Fair Value Measurements for additional information on loans held for sale and mortgage servicing assets.