LOAN SERVICING

12 Months Ended

Dec. 31, 2019

NOTE 5 - LOAN SERVICING

Loans serviced for others are not reported as assets. The principal balances of these loans at December 31, 2019 and 2018 are as follows:


	2019		2018
Loan portfolios serviced for:
Federal Home Loan Mortgage Corporation	$	488,790	$	492,761
Federal National Mortgage Association	10,221		—
Other	3,504		3,689

Custodial escrow balances maintained in connection with serviced loans were $2,423 and $2,588 at year-end 2019 and 2018.

The related loan servicing rights activity for the years ended December 31, 2019, 2018 and 2017 were as follows:


	2019		2018		2017
Servicing rights:
Beginning of year	$	3,403	$	3,620	$	3,621
Additions	1,132		650		933
Amortized to expense	(1,289)		(867)		(934)
End of year	$	3,246	$	3,403	$	3,620

The components of net loan servicing fees for the years ended December 31, 2019, 2018 and 2017 were as follows:


	2019		2018		2017
Loan servicing fees, net:
Loan servicing fees	$	1,261	$	1,308	$	1,270
Amortization of loan servicing fees	(1,289)		(867)		(934)
Total	$	(28)	$	441	$	336

The fair value of servicing rights was estimated by management to be approximately $3,922 at December 31, 2019. Fair value for 2019 was determined using a weighted average discount rate of 9.5% and a weighted average prepayment speed of 16.8%. At December 31, 2018, the fair value of servicing rights was estimated by management to be approximately $4,836. Fair value for 2018 was determined a using weighted average discount rate of 9.5% and a weighted average prepayment speed of 11.9%.