Loan Servicing

12 Months Ended

Dec. 31, 2021

Payments for (Proceeds from) Mortgage Servicing Rights [Abstract]

Loan Servicing

Loan Servicing

Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of loans serviced for others totaled approximately $1.540 billion and $1.527 billion at December 31, 2021 and 2020.

The aggregate fair value of capitalized mortgage servicing rights was approximately $15.2 million, $12.4 million and $14.4 million at December 31, 2021, 2020 and 2019, compared to the carrying values of $15.2 million, $12.5 million and $14.3 million, respectively. The fair value of capitalized mortgage servicing rights was approximately $13.9 million on January 1, 2019. Comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value. For purposes of measuring impairment, risk characteristics including product type, investor type and interest rates, were used to stratify the originated mortgage servicing rights. Mortgage servicing rights are included in other assets on the balance sheets as of December 31, 2021 and 2020.

	December 31 2021		December 31 2020		December 31 2019
Mortgage servicing rights
Balances, January 1	$	17,644	$	15,046	$	12,876
Servicing rights capitalized	4,209		5,530		3,547
Amortization of servicing rights	(4,073)		(2,932)		(1,377)
Balances, December 31	17,780		17,644		15,046
Impairment allowance
Balances, January 1	(5,172)		(719)		(527)
Additions	—		(5,106)		(234)
Reductions	2,578		653		42
Balances, December 31	(2,594)		(5,172)		(719)
Mortgage servicing rights, net	$	15,186	$	12,472	$	14,327

During 2021 the Bank recorded a recovery of impairment of approximately $2.6 million. During 2020 and 2019 the Bank recorded additional impairment of approximately $4.5 million and $192,000, respectively.