MORTGAGE BANKING ACTIVITIES |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Mortgage Banking Activities [Abstract] | |
| Mortgage Banking Activities |
Note 4
MORTGAGE BANKING ACTIVITIES
The Company’s mortgage
contracts used to manage residential loan pipeline price risk, utilization
loan closings, and residential mortgage servicing.
CCHL activities for the period March 1, 2020 to December 31, 2020
period January 1, 2020 to March 1, 2020.
Residential Mortgage Loan Production
The Company originates, markets, and services conventional and
conforming fixed rate residential mortgage loans are held for sale in the
rate residential mortgage loans may be held for investment.
secondary market prices are the primary drivers of origination revenue.
Residential mortgage loan commitments are generally outstanding for 30
commitment to originate a residential mortgage loan to when the closed
commitments are subject to both credit and price risk.
including collateral requirements, which are generally accepted by
interest rate fluctuations and is partially managed through forward sales of
announced securities, or TBAs) or mandatory delivery commitments with
The unpaid principal balance of residential mortgage loans held for sale,
residential mortgage loan commitments and forward contract sales and their
December 31, 2021
December 31, 2020
Unpaid Principal
Unpaid Principal
(Dollars in Thousands)
Balance/Notional
Fair Value
Balance/Notional
Fair Value
Residential Mortgage Loans Held for Sale
$
50,733
$
52,532
$
109,831
$
114,039
Residential Mortgage Loan Commitments ("IRLCs")
(1)
51,883
1,258
147,494
4,825
Forward Sales Contracts
(2)
48,000
(7)
158,500
(907)
$
53,783
$
117,957
(1)
Recorded in other assets at fair value
(2)
Recorded in other liabilities at fair value
Residential mortgage loans held for sale that were 30-69 days outstanding
0.2
held for sale that were 90 days or more outstanding or on nonaccrual totaled $
0.6
Mortgage banking revenues for the year ended December 31, was as follows:
(Dollars in Thousands)
2021
2020
Net realized gains on sales of mortgage loans
$
49,355
$
59,709
Net change in unrealized gain on mortgage loans held for sale
(2,410)
2,926
Net change in the fair value of mortgage loan commitments (IRLCs)
(3,567)
2,625
Net change in the fair value of forward sales contracts
900
284
Pair-Offs on net settlement of forward
2,956
(9,602)
Mortgage servicing rights additions
1,416
3,448
Net origination fees
3,775
3,954
Total mortgage banking
$
52,425
$
63,344
Residential Mortgage Servicing
The Company may retain the right to service residential mortgage loans
others is the primary driver of servicing revenue.
The following represents a summary of mortgage servicing rights. (Dollars in Thousands)
2021
2020
Number of residential mortgage loans serviced for others
2,106
1,796
Outstanding principal balance of residential mortgage loans serviced
$
532,967
$
456,135
Weighted average
3.59%
3.64%
Remaining contractual term (in months)
317
321
Conforming conventional loans serviced by the Company are sold to FNMA on
are generally the responsibility of FNMA and not the Company.
through GNMA, whereby the Company is insured against loss by the Federal
against loss by the Veterans
loan types: FNMA (
60
%), GNMA (
9
%), and private investor (
31
%).
actual/actual payment remittance.
The Company had $
2.0
4.9
the Company at December 31, 2021 and 2020, respectively.
has been recorded in other assets and other liabilities, respectively,
the years ended December 31, 2021, the Company repurchased
2.8
with the intention to modify their terms and include the loans in new GNMA
no
t repurchase any of
these loans for the year ended December 31, 2020.
Activity in the capitalized mortgage servicing rights for the year ended
(Dollars in Thousands)
2021
2020
Beginning balance
$
3,452
$
910
Additions due to loans sold with servicing retained
1,416
3,448
Deletions and amortization
(1,344)
(656)
Valuation
250
(250)
Ending balance
$
3,774
$
3,452
The Company had
no
2020.
The key unobservable inputs used in determining the fair value of the Company’s
as follows:
2021
2020
Minimum
Maximum
Minimum
Maximum
Discount rates
11.00%
15.00%
11.00%
15.00%
Annual prepayment speeds
11.98%
23.79%
13.08%
23.64%
Cost of servicing (per loan)
$
60
73
$
90
110
Changes in residential mortgage interest rates directly affect
servicing rights.
rates, estimated loan curtailment, anticipated defaults, and other relevant
was
15.85
% at December 31, 2021 and
17.10
% at December 31, 2020.
Warehouse
The Company has the following warehouse lines of credit and master repurchase
December 31, 2021.
Amounts
(Dollars in Thousands)
Outstanding
$
75
1.00%
to plus
1.00%
, with a floor rate of
3.25%
.
0.5
$
11,607
$
75
November 2022
.
2.25%
to
3.25%
.
17,371
$
28,978
Warehouse
$
74.8
as collateral under the above warehouse lines of credit and master repurchase agreements.
covenants which include certain financial requirements, including
assets and maximum debt to net worth ratio, as defined in the agreements.
debt covenants at December 31, 2021.
The Company intends to renew the warehouse lines of credit and master repurchase
The Company has extended a $
50
51
% owned subsidiary entity.
transactions under this line of credit are eliminated in the Company’s
the total short term borrowings noted on the consolidated statement of
December 31, 2021 was $
14.8
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