Loan Servicing Rights

12 Months Ended

Sep. 30, 2024

The Company services one- to four-family mortgage loans for Freddie Mac and also provides servicing for secondary market purchasers of the guaranteed portion of SBA loans; such loans are not included in the accompanying consolidated balance sheets. The principal amount of loans serviced for Freddie Mac at September 30, 2024, 2023 and 2022 was $369,077,000, $384,619,000 and $406,727,000, respectively. The guaranteed principal amount of SBA loans serviced for others at September 30, 2024, 2023 and 2022 was $1,482,000, $1,882,000 and $3,560,000, respectively.

The following is an analysis of the changes in Freddie Mac loan servicing rights for the years ended September 30, 2024, 2023 and 2022 (dollars in thousands):


	2024		2023		2022
Balance, beginning of year	$	2,124	$	3,020	$	3,438
Additions	142		113		578
Amortization	(894)		(1,009)		(1,115)
Valuation recovery	—		—		119
Balance, end of year	$	1,372	$	2,124	$	3,020

At September 30, 2024, 2023 and 2022, the estimated fair value of Freddie Mac servicing rights totaled $4,655,000, $5,469,000 and $5,547,000, respectively. The Freddie Mac servicing rights' fair values at September 30, 2024, 2023 and 2022 were estimated using discounted cash flow analyses with average discount rates of 10.00%, 9.50% and 9.50%, and average conditional prepayment rates of 7.03%, 6.23% and 6.31%, respectively. At September 30, 2024, 2023 and 2022, there was no valuation allowance.

At September 30, 2024 there were no SBA servicing rights and as of September 30, 2023, and 2022, the servicing rights were insignificant. There was no valuation allowance on SBA servicing rights at September 30, 2024, 2023 and 2022.