Loans Held for Sale and Loan Servicing

12 Months Ended

Dec. 31, 2019

Transfers and Servicing [Abstract]

Transfers and Servicing of Financial Assets [Text Block]

Loans Held for Sale and Loan Servicing

At December 31, 2019 and 2018, loans held for sale consisted of conventional residential mortgages originated for subsequent sale, with an estimated fair value in excess of their carrying value. Therefore, no valuation reserve was necessary for loans held for sale as of the balance sheet dates.

Commercial and residential mortgage loans serviced for others are not included in the accompanying balance sheets. The unpaid principal balance of commercial and residential mortgage loans serviced for others was $579.9 million and $534.2 million at December 31, 2019 and 2018, respectively.

Loans sold consisted of the following during the years ended December 31:

	2019				2018
	Loans Sold		Net Gains on Sale		Loans Sold		Net Gains on Sale
	(Dollars in thousands)
Residential loans	$	157,952	$	2,867	$	116,710	$	1,847
Commercial loans	315		28		—		—
Total	$	158,267	$	2,895	$	116,710	$	1,847

There were no obligations to repurchase loans for any amount at December 31, 2019, but there were contractual risk sharing commitments on certain sold loans totaling $705 thousand as of such date.

The Company generally retains the servicing rights on loans sold. At December 31, 2019 and 2018, the unamortized balance of servicing rights on loans sold with servicing retained was $1.7 million and is included in Other assets. The estimated fair value of these servicing rights was in excess of their carrying value at December 31, 2019 and 2018, and therefore no impairment reserve was necessary. The net capitalization and amortization of MSRs is included in Other income.

The following table presents the capitalization and amortization of loan servicing rights:

	For The Years Ended December 31,
	2019		2018
	(Dollars in thousands)
Capitalization of servicing rights	$	862	$	697
Amortization of servicing rights	812		720
Net capitalization (amortization) of servicing rights	$	50	$	(23	)