NOTE

Intangible Assets

The Company’s intangible assets consist of core deposit intangibles, goodwill, and mortgage servicing rights. A summary of mortgage servicing rights activity for

2019

and

2018

is as follows:

(Dollars in thousands)	201 9			2018
Mortgage servicing rights, net:
Balance, beginning of year	$	1,855			1,724
Originations		1,097			682
Amortization		(780	)		(551	)
Balance, end of year		2,172			1,855
Fair value of mortgage servicing rights	$	3,390			3,901

All of the single family loans sold where the Company continues to service the loans are serviced for FNMA under the individual loan sale program. The following is a summary of the risk characteristics of the loans being serviced for FNMA at

December 31, 2019:

(Dollars in thousands)	Loan Principal Balance		Weighted Average Interest Rate			Weighted Average Remaining Term (months)		Number of Loans
Original term:
30 year fixed rate	$	333,300		4.10	%		309		2,445
15 year fixed rate		93,869		3.21			131		940
Adjustable rate		45		4.63			257		2

The gross carrying amount of intangible assets and the associated accumulated amortization at

December 31, 2019

and

2018

are presented in the following table. Amortization expense for intangible assets was

$0.9

million for the year ended

December 31, 2019,

and

$0.7

million for the years ended

December 31, 2018

and

2017.

	Gross					Unamortized
	Carrying		Accumulated			Intangible
(Dollars in thousands)	Amount		Amortization			Assets
December 31, 20 1 9
Mortgage servicing rights	$	4,968		(2,796	)		2,172
Core deposit intangible s		574		(418	)		156
Goodwill		802		0			802
Total	$	6,344		(3,214	)		3,130

December 31, 2018
Mortgage servicing rights	$	4,526		(2,671	)		1,855
Core deposit intangibles		574		(319	)		255
Goodwill		802		0			802
Total	$	5,902		(2,990	)		2,912

The following table indicates the estimated future amortization expense for amortizing intangible assets:

(Dollars in thousands)	Mortgage Servicing Rights		Core Deposit Intangible		Total Amortizing Intangible Assets
Year ended December 31,
2020	$	505		99		604
2021		455		47		502
2022		402		10		412
2023		330		0		330
2024		251		0		251
Thereafter		229		0		229
	$	2,172		156		2,328

amortization expense relating to goodwill is recorded as generally accepted accounting principles do

not

allow goodwill to be amortized, but require that it be tested for impairment at least annually, or sooner, if there are indications that impairment

may

exist.

Projections of amortization are based on asset balances and the interest rate environment that existed at

December 31, 2019.

The Company’s actual experience

may

be significantly different depending upon changes in mortgage interest rates and other market conditions.