Mortgage Servicing Rights

12 Months Ended

Dec. 31, 2023

Transfers and Servicing [Abstract]

Mortgage Servicing Rights

NOTE 6 — Mortgage Servicing Rights

Loans serviced for others are not included in the consolidated balance sheets. The unpaid principal balance of mortgage loans serviced for others totaled $282.2 million at December 31, 2023, and $304.3 million at December 31, 2022.

The following is a summary of changes in the balance of mortgage servicing rights for the periods indicated below:

	Year Ended December 31, 2023			Year Ended December 31, 2022
	(in thousands)
Mortgage servicing rights beginning balance	$	1,860		$	2,036
Additions		52			68
Amortization		(192	)		(244	)
Mortgage servicing rights ending balance	$	1,720		$	1,860
Fair value at beginning of period	$	3,376		$	2,477
Fair value at end of period	$	3,269		$	3,376

There was no valuation allowance as of December 31, 2023 or December 31, 2022. The Company did not sell any mortgage servicing rights during the years ended December 31, 2023 and 2022.

The estimated fair value of mortgage servicing rights was determined using a valuation model that calculates the present value of expected future servicing and ancillary income, net of expected servicing costs. The model incorporates various assumptions such as discount rates, prepayment speeds, and ancillary income and servicing costs. As of December 31, 2023, the model used discount rates ranging from 10.1% to 13.0% and prepayment speeds ranging from 6.9% to 34.4%, respectively, both of which were based on market data from independent organizations. As of December 31, 2022, the model used discount rates of 10.0% to 13.0% and prepayment speeds ranging from 7.0% to 33.9%.

The following table shows the estimated future amortization of mortgage servicing rights for the next five years. The projections of amortization expense are based on existing asset balances as of as of December 31, 2023. The actual amortization expense the Company recognizes in any given period may be significantly different depending on changes in interest rates, market conditions, and regulatory requirements.

Estimated future amortization as of December 31, 2023:	(in thousands)
2024	$	206
2025		190
2026		170
2027		149
2028		128
Thereafter		877
Total	$	1,720