Company: WTFCN
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001015328-25-000188
Chunk: 42

Company: WINTRUST FINANCIAL CORP
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 1
Chunk 42
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 30,June 30,June 30,(In thousands)2025202420252024Fair value at beginning of the period$196,307 $201,044 $203,788 $192,456 Additions from loans sold with servicing retained6,336 8,223 11,005 13,602 Estimate of changes in fair value due to:Payoffs, paydowns and repurchases(5,616)(5,534)(10,252)(9,920)Changes in valuation inputs or assumptions(3,966)877 (11,480)8,472 Fair value at end of the period$193,061 $204,610 $193,061 $204,610 Unpaid principal balance of mortgage loans serviced for others$12,470,924 $12,211,027 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 the secondary market. The subjective factors include loan prepayment speeds, discount rates, servicing costs and other economic factors. The Company uses a third party to assist in the valuation of MSRs. Periodically, the Company will purchase options for the