Transfers of Financial Assets

12 Months Ended

Dec. 31, 2022

Transfers and Servicing [Abstract]

Transfers of Financial Assets

Transfers and Servicing of Financial Assets

The Company 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 residential mortgage loans sold are included in Mortgage banking activities on the accompanying Consolidated Statements of Income.

The following table summarizes information related to mortgage banking activities:

	Years ended December 31,
(In thousands)	2022		2021		2020
Net gain on sale	$	580	$	5,192	$	15,305
Origination fees	219		1,440		3,230
Fair value adjustments	(94)		(413)		(240)
Mortgage banking activities	$	705	$	6,219	$	18,295
Proceeds from sale	$	36,335	$	247,634	$	486,341
Loans sold with servicing rights retained	32,056		237,834		464,736

Under certain circumstances, the Company may decide to sell loans that were not originated or otherwise acquired with the intent to sell. During the years ended December 31, 2022, 2021, and 2020, the Company sold loans not originated for sale for proceeds of $679.7 million, $82.2 million, and $9.2 million, respectively, which resulted in net gains on sale of $3.3 million, $3.9 million, and $0.3 million, respectively.

In addition, the Company may retain servicing rights on its residential mortgage loans sold in the normal course of business. At both December 31, 2022, and 2021, the aggregate principal balance of residential mortgage loans serviced for others totaled $2.0 billion. Mortgage servicing rights 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 rights 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 rights:

	Years ended December 31,
(In thousands)	2022		2021		2020
Balance, beginning of period	$	9,237	$	13,422	$	17,484
Acquired from Sterling	859		—		—
Additions	289		2,053		4,373
Amortization (1)	(870)		(5,593)		(6,562)
Adjustment to valuation allowance	—		(645)		(1,873)
Balance, end of period	$	9,515	$	9,237	$	13,422

(1)During the year ended December 31, 2022, the Company implemented a change in the method of amortization applied to its mortgage servicing rights to better reflect the pattern of consumption, where estimated future cash flows are now assessed at the individual loan level as opposed to on a pooled basis.

Loan servicing fees, net of mortgage servicing rights amortization, were $5.9 million, $1.7 million, and $1.5 million for the years ended December 31, 2022, 2021, and 2020, respectively, and are included in Loan and lease related fees on the accompanying Consolidated Statements of Income. Information regarding loans held for sale and mortgage servicing rights can be found within Note 18: Fair Value Measurements.