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MORTGAGE SERVICING RIGHTS
 12 Months Ended
Dec. 31, 2025
Goodwill and Intangible Assets Disclosure [Abstract]  
MORTGAGE SERVICING RIGHTS
7. MORTGAGE SERVICING RIGHTS

Mortgage servicing rights ("MSRs") are recognized when loans are sold to third-parties with servicing retained, and are classified and pooled into buckets of homogeneous characteristics. The Company measures its mortgage servicing rights using the amortization method, amortizing MSRs proportionally over the period of expected net servicing income. Mortgage loans serviced for others are not reported on the Company's consolidated balance sheets. The following table presents mortgage loans serviced for others by investor, which totaled $1.17 billion and $1.18 billion as of December 31, 2025 and 2024, respectively.

(Dollars in thousands)20252024
Mortgage loan portfolio serviced for:
Federal National Mortgage Association$741,186 $720,070 
Federal Home Loan Mortgage Corporation429,933 457,228 
Federal Home Loan Bank303 444 
Total loans services for others$1,171,422 $1,177,742 
The following table presents changes in our mortgage servicing rights for the periods presented:
(Dollars in thousands)Mortgage
Servicing
Rights
Balance as of December 31, 2023$8,696 
Additions553 
Amortization(776)
Balance as of December 31, 20248,473 
Additions1,042 
Amortization(843)
Balance as of December 31, 2025$8,672 

The gross carrying value, accumulated amortization, and net carrying value related to our mortgage servicing rights as of December 31, 2025 and 2024 are presented below:

 December 31, 2025December 31, 2024
(Dollars in thousands)Gross
Carrying
Value		Accumulated
Amortization		Net
Carrying
Value		Gross
Carrying
Value		Accumulated
Amortization		Net
Carrying
Value
Mortgage servicing rights$71,335 $(62,663)$8,672 $70,293 $(61,820)$8,473 
 
Based on our mortgage servicing rights held as of December 31, 2025, estimated amortization expense for the next five succeeding fiscal years and all years thereafter are as follows:

(Dollars in thousands)
Year Ending December 31:
2026$1,086 
20271,019 
2028888 
2029773 
2030664 
Thereafter4,242 
Total$8,672 

Income from new MSRs totaled $1.0 million, $0.6 million, and $0.3 million in 2025, 2024 and 2023, respectively, and are reported within mortgage banking income.

Amortization of the servicing rights is reported within mortgage banking income in the Company's consolidated statements of income. Ancillary income is recorded in other operating income.

MSRs are initially recorded at fair value determined by a discounted cash flow model prepared by a third-party service provider using market-based assumptions at origination. Key assumptions include mortgage prepayment speeds, discount rates, servicing income, and costs. These assumptions are inherently subjective, require management judgment, and are updated each reporting period to reflect current market conditions, evolving market trends, and loan product types.

MSRs are classified as Level 3 assets in the fair value hierarchy due to the use of significant unobservable inputs. The Company’s valuation techniques rely on discounted cash flow models reflecting expected cash flows, prepayment behavior, and cost structures. Changes in prepayment speeds, often driven by interest rates, home prices, and borrower behavior, can materially impact MSR fair values. Lower interest rates generally increase prepayments and reduce MSR value, while higher rates slow prepayments and may increase MSR value.

Fair value measurements and related assumptions are reviewed periodically and validated against available market data and third-party valuations. The Company performs an impairment assessment of its MSR whenever events or changes in circumstances indicate the MSR's carrying value may not be recoverable. The Company noted no impairment or triggering events related to its MSR as of December 31, 2025 and 2024.
The following table presents the fair market value and key assumptions used in determining the fair market value of mortgage servicing rights as of the dates presented:

 Year Ended December 31,
(Dollars in thousands)20252024
Fair market value, beginning of period$12,387 $12,185 
Fair market value, end of period11,301 12,387 
Weighted-average discount rate9.5 %9.5 %
Weighted-average prepayment speed assumption12.3 %10.2 %