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Servicing Rights (Tables)
 12 Months Ended
Dec. 31, 2018
Transfers and Servicing [Abstract]  
Schedule of changes in the balances of servicing assets and servicing liabilities
Changes in the balances of servicing assets and servicing liabilities are as follows for the years indicated (in thousands):
 
2018
 
2017
 
2016
Servicing rights for SBA/USDA loans, beginning of period
$
7,740

 
$
5,752

 
$
3,712

Additions:
 
 
 
 
 
Acquired servicing rights(1)
(354
)
 
419

 
—

Originated servicing rights capitalized upon sale of loans
2,573

 
2,737

 
2,723

Subtractions:
 
 
 
 
 
Disposals
(810
)
 
(621
)
 
(393
)
Changes in fair value:
 
 
 
 
 
Due to change in inputs or assumptions used in the valuation model
(1,639
)
 
(547
)
 
(290
)
Servicing rights for SBA/USDA loans, end of period
$
7,510

 
$
7,740

 
$
5,752

 (1) Includes measurement period adjustments further discussed in Note 3.
Schedule of key characteristics, inputs, and economic assumptions used to estimate the fair value of SBA Servicing Asset
A summary of the key characteristics, inputs, and economic assumptions used to estimate the fair value of the servicing asset for SBA/USDA loans and the sensitivity of the fair values to immediate adverse changes in those assumptions are shown in the table below as of the dates indicated (in thousands):
 
 
December 31,
 
 
 
2018
 
2017
 
 
Fair value of retained servicing assets
$
7,510

 
$
7,740

 
 
Prepayment rate assumption
12.07
%
 
8.31
%
 
 
10% adverse change
$
(267
)
 
$
(236
)
 
 
20% adverse change
$
(515
)
 
$
(460
)
 
 
Discount rate
14.5
%
 
12.5
%
 
 
100 bps adverse change
$
(196
)
 
$
(262
)
 
 
200 bps adverse change
$
(381
)
 
$
(507
)
 
 
Weighted-average life (years)
5.0

 
6.3

 
 
Weighted-average gross margin
1.94
%
 
1.85
%
 
Schedule of changes in residential mortgage servicing rights
The following table summarizes the changes in residential mortgage servicing rights for the years indicated (in thousands).
 
 
Fair value
 
Amortized cost
 
2018
 
2017
 
2016
Residential mortgage servicing rights, beginning of period
$
8,262

 
$
4,372

 
$
3,370

Additions:
 
 
 
 
 
Originated servicing rights capitalized upon sale of loans
4,587

 
3,602

 
2,124

Subtractions:
 
 
 
 
 
Disposals
(537
)
 
(328
)
 
—

Amortization
 
 


 
(1,117
)
Impairment
—

 
—

 
(5
)
Changes in fair value:
 
 
 
 
 
Initial election to carry at fair value on January 1, 2017
—

 
698

 
—

Due to change in inputs or assumptions used in the valuation
(435
)
 
(82
)
 
—

Residential mortgage servicing rights, end of period
$
11,877

 
$
8,262

 
$
4,372
Schedule of valuation allowance for impairment of the residential mortgage servicing rights portfolio
The following table summarizes the activity in the valuation allowance for impairment of the residential mortgage servicing rights portfolio for the years indicated (in thousands).
 
 
2016
 
 
Valuation allowance, beginning of period
$
10

 
 
Additions charged to operations, net
5

 
 
Valuation allowance, end of period
$
15

 
Schedule of characteristics, inputs, and economic assumptions used to estimatefair value of servicing asset for residential mortgage loans sensitivity of adverse changes
A summary of the key characteristics, inputs, and economic assumptions used to estimate the fair value of the servicing asset for residential mortgage loans and the sensitivity of the fair values to immediate adverse changes in those assumptions are shown in the table below as of the dates indicated (in thousands):
 
 
December 31,
 
 
 
2018
 
2017
 
 
Fair value of retained servicing assets
$
11,877

 
$
8,262

 
 
Prepayment rate assumption
10.6
%
 
9.5
%
 
 
10% adverse change
$
(466
)
 
$
(303
)
 
 
20% adverse change
$
(898
)
 
$
(587
)
 
 
Discount rate
10.0
%
 
10.0
%
 
 
100 bps adverse change
$
(448
)
 
$
(317
)
 
 
200 bps adverse change
$
(863
)
 
$
(610
)