Note F - Servicing –

In 2019 and 2018, the Bank recognized a gain of $153,000 and $52,000, respectively, on loans sold to the Federal Home Loan Mortgage Corporation under their seller/servicer program; gross proceeds were $10,935,000 and $3,524,000, respectively.

Mortgage loans serviced for others are not included in the accompanying balance sheets. The risks inherent in mortgage servicing assets relate primarily to changes in prepayments that result from shifts in mortgage interest rates. The unpaid principal balances of mortgage loans serviced for others were $48,615,000 and $41,873,000 at December 31, 2019 and 2018, respectively. In connection with the foregoing mortgage loans serviced, custodial escrow balances (net) in the amount of $464,000 and $483,000 at December 31, 2019 and 2018, respectively, were maintained in non-interest bearing accounts.

The following table represents the change in mortgage servicing rights as of December 31, 2019 and 2018.


(Dollars in thousands)	2019		2018

Beginning Balance	$	373	$	348
Additions		132		55
Amortization		(49)		(30)

Ending Balance	$	456	$	373