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MORTGAGE SERVICING RIGHTS
 9 Months Ended
Sep. 30, 2023
MORTGAGE SERVICING RIGHTS  
MORTGAGE SERVICING RIGHTS

NOTE 6 – MORTGAGE SERVICING RIGHTS

Loans serviced for others are not included in the accompanying consolidated balance sheets. MSRs are recognized as separate assets when loans sold in the secondary market are sold with servicing retained. The Company utilizes a third-party consulting firm to determine an accurate assessment of the MSRs fair value. The third-party firm collects relevant data points from numerous sources. Some of these data points relate directly to the pricing level or relative value of the mortgage servicing while other data points relate to the assumptions used to derive fair value. In addition, the valuation evaluates specific collateral types, and current and historical performance of the collateral in question. The valuation process focuses on the non-distressed secondary servicing market, common industry practices and current regulatory standards. The primary determinants of the fair value of MSRs are servicing fee percentage, ancillary income, expected loan life or prepayment speeds, discount rates, costs to service, delinquency rates, foreclosure losses and recourse obligations. The valuation data also contains interest rate shock analyses for monitoring fair value changes in differing interest rate environments.

Following is an analysis of activity in the MSR asset:

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Nine Months Ended

    

Year Ended

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September 30, 2023

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December 31, 2022

Fair value at beginning of period

​

$

9,582

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$

5,016

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​

​

​

​

​

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Servicing asset additions

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654

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771

Loan payments and payoffs

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(1,225)

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(918)

Changes in valuation inputs and assumptions used in the valuation model

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1,031

​

 

3,012

Amount recognized through earnings

​

​

460

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​

2,865

MSR asset acquired

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3,691

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1,701

Fair value at end of period

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$

13,733

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$

9,582

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​

​

​

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Unpaid principal balance of loans serviced for others

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$

1,183,257

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$

866,941

Mortgage servicing rights as a percent of loans serviced for others

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1.16

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1.11

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The primary economic assumptions utilized by the Company in measuring the value of MSRs were constant prepayment speeds of 7.7 and 7.9 months as of September 30, 2023 and December 31, 2022 and discount rates of 10.19% and 10.21% as of each of those periods, respectively.