Mortgage Servicing Rights

12 Months Ended

Dec. 31, 2024

Mortgage Servicing Rights

Mortgage Servicing Rights

Note 5: Mortgage Servicing Rights

Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balance of mortgage loans serviced for others totaled approximately $69,080,000 and $61,959,000 at December 31, 2024, and 2023, respectively. Custodial escrow balances maintained in connection with serviced loans were approximately $380,539 on December 31, 2024 and $122,927 on December 31, 2023, respectively.

The following is a summary of changes in the balance of mortgage servicing rights for the years ended December 31, 2024, and 2023:

	December 31, 2024		December 31, 2023
Beginning balance	$	321,928	$	309,210
Capitalized mortgage servicing rights		78,905		68,897
Recovery of (provision for) allowance		10,947		(11,496)
Amortization		(66,384)		(44,683)
Ending balance	$	345,396	$	321,928

The carrying value of mortgage servicing rights is included within accrued interest receivable and other assets on the accompanying consolidated balance sheets. Mortgage servicing rights are evaluated for impairment at least annually. The fair value of mortgage servicing rights was $621,313 and $582,981 at December 31, 2024 and 2023, respectively. Fair value at December 31, 2024 was determined using discount rates ranging from 9.67% to 11.67%, prepayment

speeds ranging from 6.1% to 29.8%, depending on the stratification of the specific mortgage servicing rights and an average default rate of 0.25%. Fair value at December 31, 2023 was determined using discount rates ranging from 9.33% to 11.33%, prepayment speeds ranging from 6.0% to 25.1%, depending on the stratification of the specific right and an average default rate of 0.25%.