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Mortgage Banking
 9 Months Ended
Sep. 30, 2020
Mortgage Banking [Abstract]  
Mortgage Banking

9.

Mortgage Banking

Net revenues from the sales and servicing of mortgage loans consisted of the following:

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(In Thousands)

 

Gain from sale of mortgage loans

 

$

13,781

 

 

$

2,596

 

 

$

30,213

 

 

$

5,672

 

Mortgage loans servicing revenue (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans servicing revenue

 

 

1,898

 

 

 

960

 

 

 

5,379

 

 

 

2,842

 

Amortization of mortgage servicing rights

 

 

(1,959

)

 

 

(579

)

 

 

(5,302

)

 

 

(1,256

)

Mortgage servicing rights valuation adjustments

 

 

(1,673

)

 

 

(155

)

 

 

(7,527

)

 

 

(458

)

 

 

 

(1,734

)

 

 

226

 

 

 

(7,450

)

 

 

1,128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue from sale and servicing of mortgage loans

 

$

12,047

 

 

$

2,822

 

 

$

22,763

 

 

$

6,800

 

 

The unpaid principal balance of residential mortgage loans serviced for third parties was $3.0 billion at September 30, 2020, and $1.46 billion at December 31, 2019.

Activity for capitalized mortgage servicing rights and the related valuation allowance follows for the three and nine months ended September 30, 2020 and 2019:

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(In Thousands)

 

Mortgage servicing assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

21,034

 

 

$

10,458

 

 

$

10,801

 

 

$

10,419

 

Loans sold, servicing retained

 

 

2,463

 

 

 

738

 

 

 

6,292

 

 

 

1,454

 

Mortgage servicing rights acquired

 

 

—

 

 

 

 

 

 

 

9,747

 

 

 

 

 

Amortization

 

 

(1,959

)

 

 

(579

)

 

 

(5,302

)

 

 

(1,256

)

Carrying value before valuation allowance at end of period

 

 

21,538

 

 

 

10,617

 

 

 

21,538

 

 

 

10,617

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Valuation allowance:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

(6,388

)

 

 

(603

)

 

 

(534

)

 

 

(300

)

Impairment recovery (charges)

 

 

(1,673

)

 

 

(155

)

 

 

(7,527

)

 

 

(458

)

Balance at end of period

 

 

(8,061

)

 

 

(758

)

 

 

(8,061

)

 

 

(758

)

Net carrying value of MSRs at end of period

 

$

13,477

 

 

$

9,859

 

 

$

13,477

 

 

$

9,859

 

Fair value of MSRs at end of period

 

$

13,477

 

 

$

9,859

 

 

$

13,477

 

 

$

9,859

 

 

Amortization of mortgage servicing rights is computed based on payments and payoffs of the related mortgage loans serviced. Estimates of future amortization expense are not easily estimable.

The Company has established an accrual for secondary market buy-back activity.  A liability of $43,000 was accrued at both September 30, 2020, and December 31, 2019, respectively.  There was no expense or credit recognized related to the accrual in the three and nine months ended September 30, 2020 or 2019.