Company: WTFCN
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001015328-25-000207
Chunk: 44

Company: WINTRUST FINANCIAL CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 1
Chunk 44
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 Mortgage Servicing Rights (“MSRs”)

The following is a summary of the changes in the carrying value of MSRs, accounted for at fair value, for the periods indicated:Three Months EndedNine Months EndedSeptember 30,September 30,September 30,September 30,(In thousands)2025202420252024Fair value at beginning of the period$193,061 $204,610 $203,788 $192,456 Additions from loans sold with servicing retained5,829 6,357 16,834 19,959 Estimate of changes in fair value due to:Payoffs, paydowns and repurchases(5,604)(7,328)(15,856)(17,248)Changes in valuation inputs or assumptions(2,348)(17,331)(13,828)(8,859)Fair value at end of the period$190,938 $186,308 $190,938 $186,308 Unpaid principal balance of mortgage loans serviced for others$12,524,131 $12,253,361 The Company recognizes MSR assets upon the sale of residential real estate loans to external third parties when it retains the obligation to service the loans and the servicing fee is more than adequate compensation. MSRs are included in other assets in the Consolidated Statements of Condition. The initial recognition of MSR assets from loans sold with servicing retained and subsequent changes in fair value of all MSRs are recognized in mortgage banking revenue. MSRs are subject to changes in value from actual and expected prepayment of the underlying loans. The estimation of fair value related to MSRs is partly impacted by the Company exercising its early buyout options (“EBO”) on eligible loans previously sold to the Government National Mortgage Association (“GNMA”). Under such optional repurchase program, financial institutions acting as servicers are allowed to buy back from the securitized loan pool individual delinquent mortgage loans meeting certain criteria for which the institution was the original transferor of such loans. At the option of the servicer and without prior authorization from GNMA, the servicer may repurchase such delinquent loans for an amount equal to the remaining principal balance of the loan. At the time of such repurchase, any MSR value related to such loans is derecognized.The MSR asset fair value is determined by using a discounted cash flow model that incorporates the objective characteristics of the portfolio as well as subjective valuation parameters that purchasers of servicing would apply to such portfolios sold into