Note 17 - Mortgage Banking Activities

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Mortgage Loans on Real Estate, by Loan Disclosure [Text Block]

17.

MORTGAGE BANKING ACTIVITIES

Mortgage loans serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balances of mortgage loans serviced for others were

$371,956,972

and

$297,493,516

at

December

31,

2016

and

2015,

respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and foreclosure processing. Loan servicing income is recorded on the accrual basis and includes servicing fees from investors and certain charges collected from borrowers, such as late payment fees.

At

December

31,

2016

and

2015,

mortgage servicing rights reported in the consolidated statements of financial condition, net of amortization, were

$2,148,905

and

$1,265,589,

respectively. During the year ended

December

31,

2016,

the Bank purchased approximately

$778,000

MSRs of

452

high-quality Freddie Mac and Fannie Mae loans with an unpaid principal balance of

$84.6

million. Excluding the purchased MSRs, during the years ended

December

31,

2016

and

2015,

the Bank recorded additional MSRs of

$391,499

and

$315,122,

respectively, as a result of sales of loans. Amortization of MSRs during the years ended

December

31,

2016

and

2015

aggregated

$286,575

and

$227,648,

respectively. The fair value of recognized MSRs amounted to approximately

$3,128,000

and

$2,301,000

as of

December

31,

2016

and

2015,

respectively. The Bank's significant assumptions used to estimate their fair value include weighted average life, prepayment speeds, and expected costs to transfer servicing to a

third

party.