Mortgage Operations

12 Months Ended

Dec. 31, 2024

Mortgage Operations [Abstract]

Mortgage Operations

(4) 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 and servicing is retained.  The Company sold a substantial portion of its portfolio of conforming long-term residential mortgage loans originated during the year ended December 31, 2024 on a servicing retained basis, for cash proceeds equal to the fair value of the loans. At December 31, 2024 and 2023, the Company serviced real estate mortgage loans for others totaling $174,464 and $184,288, 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, 2024 and 2023. Mortgage servicing rights are included in Interest Receivable and Other Assets on the Consolidated Balance Sheets.

	December 31, 2023		Additions		Reductions			December 31, 2024
Mortgage servicing rights	$	1,482	$	38	$	(208	)	$	1,312
Valuation allowance		—		—		—			—
Mortgage servicing rights, net of valuation allowance	$	1,482	$	38	$	(208	)	$	1,312

	December 31, 2022		Additions		Reductions			December 31, 2023
Mortgage servicing rights	$	1,650	$	67	$	(235	)	$	1,482
Valuation allowance		—		—		—			—
Mortgage servicing rights, net of valuation allowance	$	1,650	$	67	$	(235	)	$	1,482

At December 31, 2024 and December 31, 2023, the estimated fair market value of the Company’s mortgage servicing rights asset was $1,910 and $2,094, respectively. The changes in fair value of mortgage servicing rights during 2024 and 2023 were primarily due to amortization and increase in estimated prepayment speeds.

The Company received contractually specified servicing fees of $450 and $473 for the years ended December 31, 2024 and 2023, respectively. Contractually specified servicing fees are included in Other Income on the Consolidated Statements of Income.