Note 10 - Intangible Assets

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

(10) Intangible Assets

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

(Dollars in thousands)	Nine Months Ended September 30, 2021			Twelve Months Ended December 31, 2020			Nine Months Ended September 30, 2020
Balance, beginning of period	$	3,043			2,172			2,172
Originations		1,070			2,189			1,710
Amortization		(881	)		(1,318	)		(1,002	)
Balance, end of period	$	3,232			3,043			2,880
Fair value of mortgage servicing rights	$	4,292			3,378			2,956

All of the 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 September 30, 2021.

			Weighted			Weighted
	Loan		Average			Average
	Principal		Interest			Remaining		Number
(Dollars in thousands)	Balance		Rate			Term (months)		of Loans
Original term 30 year fixed rate	$	416,090		3.46	%		312		2,650
Original term 15 year fixed rate		118,843		2.88			142		1,068

Amortization expense for amortizing intangible assets was $0.9 million and $1.1 million for the nine month periods ended September 30, 2021 and 2020, respectively. The gross carrying amount of intangible assets and the associated accumulated amortization at September 30, 2021 and December 31, 2020 is presented in the following tables.

	September 30, 2021
	Gross
(Dollars in thousands)	Carrying Amount		Accumulated Amortization			Unamortized Amount
Mortgage servicing rights	$	5,775		(2,543	)		3,232
Core deposit intangible		574		(557	)		17
Goodwill		802		0			802
Total	$	7,151		(3,100	)		4,051

	December 31, 2020
	Gross
(Dollars in thousands)	Carrying Amount		Accumulated Amortization			Unamortized Amount
Mortgage servicing rights	$	5,691		(2,648	)		3,043
Core deposit intangible		574		(517	)		57
Goodwill		802		0			802
Total	$	7,067		(3,165	)		3,902

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 ending December 31,
2021	$	173		7		180
2022		666		10		676
2023		624		0		624
2024		585		0		585
2025		511		0		511
Thereafter		673		0		673
Total	$	3,232		17		3,249

No amortization expense relating to goodwill is recorded as GAAP does not allow goodwill to be amortized but requires 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 existing asset balances and the existing interest rate environment as of September 30, 2021. The Company's actual experiences may be significantly different depending upon changes in mortgage interest rates and other market conditions.