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Loan Servicing

12 Months Ended

Dec. 31, 2020

NOTE 9 Loan Servicing

Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of loans serviced for others totaled $445.5 million and $541.9 million at December 31, 2020 and 2019, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and collection and foreclosure processing. Loan servicing income is recorded on an accrual basis and includes servicing fees from investors and certain charges collected from borrowers, such as late payment fees, and is net of fair value adjustments to capitalized mortgage servicing rights.

The following table summarizes the Company’s activity related to servicing rights for the years ended December 31, 2020, 2019, and 2018:


	Year ended
	December 31,
(dollars in thousands)	2020		2019		2018
Balance, beginning of period	$	3,845	$	4,623	$	4,686
Additions		178		342		534
Amortization		(922)		(987)		(669)
(Impairment)/Recovery		(1,114)		(133)		72
Balance, end of period	$	1,987	$	3,845	$	4,623

The amount of loan servicing obligations included in other liabilities was $0 as of December 31, 2020 and 2019.

The following is a summary of key data and assumptions used in the valuation of servicing rights as of December 31, 2020 and 2019. Increases or decreases in any one of these assumptions would result in lower or higher fair value measurements.


	December 31,			December 31,
(dollars in thousands)	2020			2019
Fair value of servicing rights	$	1,987		$	3,845
Weighted-average remaining term, years		20.1			20.1
Prepayment speeds		17.7	%		11.8	%
Discount rate		9.0	%		9.4	%