Loan Servicing

9 Months Ended

Sep. 30, 2022

Payments for (Proceeds from) Mortgage Servicing Rights [Abstract]

Loans serviced for others are not included in the accompanying condensed consolidated balance sheets. The unpaid principal balances of loans serviced for others totaled approximately $1.6 billion and $1.5 billion at September 30, 2022 and December 31, 2021.

The aggregate fair value and carrying value of capitalized mortgage servicing rights was approximately $18.7 million and $15.2 million at September 30, 2022 and December 31, 2021, respectively. Comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value. For purposes of measuring impairment, risk characteristics including product type, investor type and interest rates, were used to stratify the originated mortgage servicing rights.


	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2022		2021		2022		2021
Mortgage servicing rights
Balance, beginning of period	$	18,761	$	17,791	$	17,780	$	17,644
Servicing rights capitalized	567		1,048		2,942		3,209
Amortization of servicing rights	(624)		(946)		(2,018)		(2,960)
Balance, end of period	18,704		17,893		18,704		17,893
Impairment allowance
Balance, beginning of period	—		(3,329)		(2,594)		(5,172)
Additions	—		—		—		—
Reductions	—		299		2,594		2,142
Balance, end of period	—		(3,030)		—		(3,030)
Mortgage servicing rights, net	$	18,704	$	14,863	$	18,704	$	14,863

The Bank reduced impairment by approximately $299,000 for the three months ended September 30, 2021, $2.6 million for the nine months ended September 30, 2022 and $2.1 million for the nine months ended September 30, 2021.