Transfers of Financial Assets

12 Months Ended

Dec. 31, 2021

Transfers and Servicing [Abstract]

Transfers of Financial Assets

Transfers and Servicing of Financial Assets

Webster originates and sells residential mortgage loans in the normal course of business, primarily to government-sponsored entities through established programs and securitizations. Residential mortgage origination fees, adjustments for changes in fair value, and any gain or loss recognized on loans sold are included in mortgage banking activities on the accompanying Consolidated Statements of Income.

The following table provides information related to mortgage banking activities:

	Years ended December 31,
(In thousands)	2021		2020		2019
Proceeds from sale	$	247,634	$	486,341	$	216,239
Loans sold with servicing rights retained	237,834		464,736		199,114
Net gain on sale	$	5,192	$	15,305	$	4,031
Ancillary fees	1,440		3,230		1,614
Fair value option adjustment	(413)		(240)		470

Under certain circumstances, Webster may decide to sell loans that were not originated with the intent to sell. During the years ended December 31, 2021, 2020, and 2019, the Company sold commercial and consumer loans not originated for sale for cash proceeds of $82.2 million, $9.2 million, and $20.9 million, respectively, which resulted in net gains on sale of $3.9 million, $0.3 million, and $0.7 million, respectively.

In addition, Webster may retain servicing rights on its residential mortgage loans sold in the normal course of business. At December 31, 2021 and 2020, the aggregate principal balance of residential mortgage loans serviced for others totaled $2.0 billion and $2.3 billion, respectively. Mortgage servicing assets are held at the lower of cost, net of accumulated amortization, or fair market value, and are included in accrued interest receivable and other assets on the accompanying Consolidated Balance Sheets. The Company assesses mortgage servicing assets for impairment each quarter and establishes or adjusts the valuation allowance to the extent that amortized cost exceeds the estimated fair market value.

The following table presents the change in the carrying amount for mortgage servicing assets:

	Years ended December 31,
(In thousands)	2021		2020		2019
Beginning balance	$	13,422	$	17,484	$	21,215
Additions	2,053		4,373		3,587
Amortization	(5,593)		(6,562)		(7,318)
Adjustment to valuation allowance	(645)		(1,873)		—
Ending balance	$	9,237	$	13,422	$	17,484

Loan servicing fees, net of mortgage servicing assets amortization and adjustments to the valuation allowance, were $1.7 million, $1.5 million, and $1.9 million for the years ended December 31, 2021, 2020, and 2019, respectively, and are included in loan and lease related fees on the accompanying Consolidated Statements of Income. Information regarding the fair value of loans held for sale and mortgage servicing assets can be found within Note 18: Fair Value Measurements.