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Loan Servicing
 12 Months Ended
Dec. 31, 2023
Transfers and Servicing [Abstract]  
Loan Servicing

NOTE 6 – LOAN SERVICING

The Company has retained servicing rights to mortgage loans sold to both the Federal Home Loan Mortgage Corporation (FHLMC) and the Federal Home Loan Bank (FHLB) of Pittsburgh. Mortgage loans serviced for others are not reported as assets. The principal balances of these loans at year-end are as follows:

 

 

2023

 

 

2022

 

Mortgage loan portfolios serviced for:

 

 

 

 

 

 

FHLMC

 

$

544,140

 

 

$

532,868

 

FHLB Pittsburgh

 

 

28,405

 

 

 

0

 

    Ending balance

 

$

572,545

 

 

$

532,868

 

 

Custodial escrow balances maintained in connection with serviced loans were $4.8 million at December 31, 2023 and $4.4 million at December 31, 2022.

Mortgage servicing rights are recorded on the balance sheets as other assets. Activity for mortgage servicing rights for years ended December 31, 2023, 2022 and 2021 are as follows:

 

 

2023

 

 

2022

 

 

2021

 

Servicing rights:

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

3,331

 

 

$

3,403

 

 

$

3,198

 

Additions

 

 

588

 

 

 

960

 

 

 

1,556

 

Acquired in merger

 

 

305

 

 

 

0

 

 

 

0

 

Amortization to expense

 

 

(735

)

 

 

(1,015

)

 

 

(1,351

)

Total servicing rights before valuation allowance

 

$

3,489

 

 

$

3,348

 

 

$

3,403

 

Change in valuation allowance

 

 

(37

)

 

 

(17

)

 

 

0

 

Ending balance

 

$

3,452

 

 

$

3,331

 

 

$

3,403

 

 

Fair value at year end 2023 was determined using discount rates ranging from 9% to 11% and prepayment speeds ranging from 100 PSA to 418 PSA (Public Securities Association Standard Prepayment Model), depending on the stratification of the specific mortgage servicing right. Fair value at year end 2022 was determined using discount rates ranging from 9% to 11% and prepayment speeds ranging from 105 PSA to 326 PSA, depending on the stratification of the specific mortgage servicing right.