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Mortgage Banking
 9 Months Ended
Sep. 30, 2025
Mortgage Banking [Abstract]  
Mortgage Banking
Note 7 — Mortgage Banking
The following table presents the Company’s revenue from mortgage banking operations:
(Dollars in thousands)Three Months Ended September 30,Nine Months Ended September 30,
Mortgage banking revenue
2025202420252024
Origination$62 $151 $334 $421 
Gain on sale of loans held for sale810 1,535 3,273 3,836 
Servicing— 3 — 738 
Total gross mortgage revenue872 1,689 3,607 4,995 
MSR asset valuation adjustments, net— — — 450 
Gain on sale of MSR asset— — — 410 
Mortgage HFS and pipeline fair value adjustment(146)(536)(597)53 
MSR asset hedge impact— — — (479)
Mortgage banking revenue$726 $1,153 $3,010 $5,429 
Mortgage Servicing Rights
Activity in the MSR asset was as follows:
Nine Months Ended September 30,
(Dollars in thousands)20252024
Balance at beginning of period$— $15,637 
Settlement of sale of MSR asset— (16,087)
Valuation adjustment, net of amortization— 450 
Balance at end of period$— $— 
The Company sold substantially all of its MSR asset and recorded a $410,000 gain on the sale during the nine months ended September 30, 2024. There were no MSR assets recognized or recorded during the nine months ended September 30, 2025, and the Company is no longer retaining servicing on sold loans.
Prior to the sale of the Company’s MSR asset, the Company received annual servicing fee income approximating 0.25% of the outstanding balance of the underlying loans. In connection with the Company's activities as a servicer of mortgage loans, the investors and the securitization trusts have no recourse to the Company’s assets for failure of debtors to pay when due.
The Company is potentially subject to losses on loans previously sold due to loan foreclosures. The Company has obligations to either repurchase the outstanding principal balance of a loan or make the purchaser whole for the economic benefits of a loan if it is determined that the loan sold violated representations or warranties made by the Company and/or the borrower at the time of the sale, which the Company refers to as mortgage loan putback expenses. Such representations and warranties typically include those made regarding loans that had missing or insufficient file documentation and/or loans obtained through fraud by borrowers or other third parties. Putback claims may be made until the loan is paid in full. When a putback claim is received, the Company evaluates the claim and takes appropriate actions based on the nature of the claim. The Company is required by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to provide a response to putback claims within 60 days of the date of receipt.
At both September 30, 2025, and December 31, 2024, the reserve for mortgage loan putback expenses totaled $103,000. There is inherent uncertainty in reasonably estimating the requirement for reserves against future mortgage loan putback expenses. Future putback expenses depend on many subjective factors, including the review procedures of the purchasers and the potential refinance activity on loans sold with servicing released and the subsequent consequences under the representations and warranties.