Note 8 - Intangible Assets

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

NOTE 8 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 2023 and 2022 is as follows:

(Dollars in thousands)	2023			2022
Mortgage servicing rights, net:
Balance, beginning of year	$	2,986			3,280
Originations		555			615
Amortization		(832	)		(909	)
Balance, end of year	$	2,709			2,986
Fair value of mortgage servicing rights	$	6,539			6,344

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, 2023:

(Dollars in thousands)	Loan Principal Balance		Weighted Average Interest Rate			Weighted Average Remaining Term (months)		Number of Loans
Original term:
15 year fixed rate	$	92,569		2.92	%		127		948
30 year fixed rate		441,889		3.87			303		2,721

The gross carrying amount of intangible assets and the associated accumulated amortization at December 31, 2023 and 2022 are presented in the following table. Amortization expense for intangible assets was $0.8 million and $0.9 million for the years ended December 31, 2023 and 2022, respectively. The gross carrying amount of intangible assets and the associated accumulated amortization at December 31, 2023 and 2022 is presented in the following table.

	Gross					Unamortized
	Carrying		Accumulated			Intangible
(Dollars in thousands)	Amount		Amortization			Assets
December 31, 2023
Mortgage servicing rights	$	6,226		(3,517	)		2,709
Goodwill		802		0			802
Total	$	7,028		(3,517	)		3,511
December 31, 2022
Mortgage servicing rights	$	5,995		(3,009	)		2,986
Core deposit intangible		574		(574	)		0
Goodwill		802		0			802
Total	$	7,371		(3,583	)		3,788

The following table indicates the estimated future amortization expense for mortgage servicing rights:

(Dollars in thousands)	Mortgage Servicing Rights
Year ended December 31,
2024	$	726
2025		658
2026		565
2027		396
2028		218
Thereafter		146
Total	$	2,709

Projections of amortization are based on asset balances and the interest rate environment that existed at December 31, 2023. The Company’s actual experience may be significantly different depending upon changes in mortgage interest rates and other market conditions.

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 an impairment may exist. Goodwill was tested for impairment at December 31, 2023 and the Company determined that it was not permanently impaired and no write down was required.