Mortgage Banking Income

3 Months Ended

Mar. 31, 2022

19.	MORTGAGE BANKING INCOME

The components of gain on loan origination and sale activities and mortgage servicing fees for the three months ended March 31, 2022 and 2021 are as follows:

	For the Three Months Ended March 31,
	2022			2021
	(In thousands)
Gain on loan origination and sale activities, net
Gain on sale of mortgage loans and realized gain from derivative financial instruments, net	$	3,093		$	15,876
Net change in fair value of loans held for sale and portfolio loans accounted for at fair value		(1,559	)		(3,816	)
Capitalized residential mortgage loan servicing rights		377			2,797
Net change in fair value of derivative loan commitments and forward loan sale commitments		(647	)		(3,864	)
Gain on loan origination and sales activities, net	$	1,264		$	10,993

Mortgage servicing fees, net
Residential mortgage loan servicing fees	$	1,277		$	1,170
Amortization of residential mortgage loan servicing rights		(749	)		(812	)
Release (provision) to the valuation allowance of mortgage loan servicing rights		135			421
Sub-servicer expenses ⁽¹⁾		(315	)		—
Mortgage servicing fees, net	$	348		$	779
Total gain on loan origination and sales activities and mortgage servicing fees, net	$	1,612		$	11,772

(1)

Sub-servicer expenses were first incurred during the third quarter of 2021, due to the conversion of the Company’s mortgage loan servicing portfolio. Previously, all expenses related to servicing mortgage loans serviced for others were included in non-interest expenses.

- Definition

The entire disclosure for a mortgage banking entity related to capital requirements imposed by secondary market investors or state imposed regulatory mandates. The disclosure may include: (1) a description of the minimum net worth requirements related to (a) secondary market investors and (b) state-imposed regulatory mandates; (2) actual or possible material effects of noncompliance; (3) whether the entity is in compliance with the regulatory capital requirements, including (a) the entity's required and actual net worth amounts, (b) factors that may significantly affect adequacy of net worth such as potentially volatile components of capital, qualitative factors, or regulatory mandates; and (4) possible affects of noncompliance on amounts and disclosures in the notes to the financial statements. Servicers with net worth requirements from multiple sources may disclose (1) significant servicing covenants with secondary market investors with commonly defined servicing requirements (2) any other secondary market investor where violation of the requirement would have a significant adverse effect and (3) the most restrictive third party agreement, if not included above. The disclosure may also include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time.

+ References

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+ Details

Randolph Bancorp, Inc. 10-Q