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Mortgage Operations
 12 Months Ended
Dec. 31, 2020
Mortgage Operations [Abstract]  
Mortgage Operations
(5)
Mortgage Operations

The Company recognizes a gain or loss and a related asset for the fair value of the rights to service loans for others when loans are sold. The Company sold substantially its entire portfolio of conforming long-term residential mortgage loans originated during the year ended December 31, 2020 for cash proceeds equal to the fair value of the loans. At December 31, 2020 and 2019, the Company serviced real estate mortgage loans for others totaling $206,208 and $208,862, respectively.

The recorded value of mortgage servicing rights is amortized in proportion to, and over the period of, estimated net servicing revenues. The Company assesses capitalized mortgage servicing rights for impairment based upon the fair value of those rights at each reporting date. For purposes of measuring impairment, the rights are stratified based upon the product type, term and interest rates. Fair value is determined by discounting estimated net future cash flows from mortgage servicing activities using discount rates that approximate current market rates and estimated prepayment rates, among other assumptions. The amount of impairment recognized, if any, is the amount by which the capitalized mortgage servicing rights for a stratum exceeds their fair value. Impairment, if any, is recognized through a valuation allowance for each individual stratum. Changes in the carrying amount of mortgage servicing rights are reported in earnings under other operating income on the consolidated statements of income.

The following table summarizes the activity related to the Company’s mortgage servicing rights assets for the years ended December 31, 2020, 2019 and 2018. Mortgage servicing rights are included in Interest Receivable and Other Assets on the consolidated balance sheets.

  
December 31,
2019
    
Additions
    
Reductions
    
December 31,
2020
  
Mortgage servicing rights
  
$
1,481
    
$
575
    
$
(428
)
  
$
1,628
  
Valuation allowance
    
—
      
(386
)
    
—
      
(386
)
Mortgage servicing rights, net of valuation allowance
  
$
1,481
    
$
189
    
$
(428
)
  
$
1,242
  

 
December 31,
2018
    
Additions
    
Reductions
    
December 31,
2019
  
Mortgage servicing rights
  
$
1,579
    
$
198
    
$
(296
)
  
$
1,481
  
Valuation allowance
    
—
      
—
      
—
      
—
  
Mortgage servicing rights, net of valuation allowance
  
$
1,579
    
$
198
    
$
(296
)
  
$
1,481
  

 
December 31,
2017
    
Additions
    
Reductions
    
December 31,
2018
  
Mortgage servicing rights
  
$
1,712
    
$
141
    
$
(274
)
  
$
1,579
  
Valuation allowance
    
—
      
—
      
—
      
—
  
Mortgage servicing rights, net of valuation allowance
  
$
1,712
    
$
141
    
$
(274
)
  
$
1,579
  

At December 31, 2020 and December 31, 2019, the estimated fair market value of the Company's mortgage servicing rights asset was $1,242 and $1,631, respectively. The changes in fair value of mortgage servicing rights during 2020 was primarily due to changes in prepayment speeds. The changes in fair value of mortgage servicing rights during 2019 was primarily due to changes in prepayment speeds and principal balances.

The Company received contractually specified servicing fees of $528, $523, and $549 for the years ended December 31, 2020, 2019, and 2018, respectively. Contractually specified servicing fees are included in Other Income on the consolidated statements of income.