NOTE 6 - MORTGAGE SERVICING RIGHTS

12 Months Ended

Dec. 31, 2022

SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]

NOTE 6 - MORTGAGE SERVICING RIGHTS

NOTE 6 - MORTGAGE SERVICING RIGHTS

Mortgage servicing rights are accounted for using the amortization method under which the servicing rights are accounted for at the lower of amortized cost or fair value. The risks inherent in mortgage servicing rights, included in other assets, relate primarily to changes in prepayments that result form shifts in mortgage interest rates. The following summarizes the activity pertaining to capitalized mortgage servicing rights and the related valuation allowance:

December 31, (in thousands)		2022		2021
Residential mortgage loans serviced for others	$	133,100	$	140,623
Fair value of mortgage servicing rights		1,376		1,043

Changes in mortgage servicing rights are as follows:

Years ended December 31, (in thousands)		2022			2021			2020
Mortgage Servicing Rights
Balance, beginning of period	$	700		$	621		$	238
Originated		70			314			534
Amortization (1)		(140	)		(235	)		(151	)
Balance, end of period		630			700			621
Valuation Allowance
Balance, beginning of period		—			(9	)		—
Decrease (increase) in impairment reserve (1)		—			9			(9	)
Balance, end of period		—			—			(9	)
Mortgage servicing rights, net	$	630		$	700		$	612

(1) Amortization expense and changes in the impairment reserve are recorded in mortgage banking activities, net.

For the years ended December 31, 2022, 2021 and 2020, contractually specified mortgage servicing fee income amounted to $348 thousand, $354 thousand and $287 thousand, respectively and is classified within the mortgage banking activities, net in the accompanying consolidated statements of income.