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Mortgage Servicing Rights, Net
 12 Months Ended
Dec. 31, 2023
Mortgage Servicing [Abstract]  
Transfers and Servicing of Financial Assets [Text Block]
NOTE 7: MORTGAGE SERVICING
 
RIGHTS, NET
 
MSRs are recognized
 
based on the
 
fair value of
 
the servicing rights
 
on the date
 
the corresponding mortgage
 
loans are sold.
 
An
 
estimate
 
of
 
the
 
Company’s
 
MSRs
 
is
 
determined
 
using
 
assumptions
 
that
 
market
 
participants
 
would
 
use
 
in
 
estimating
future net
 
servicing income,
 
including estimates
 
of prepayment
 
speeds, discount
 
rate, default
 
rates, cost
 
to service,
 
escrow
account earnings,
 
contractual servicing
 
fee income,
 
ancillary income,
 
and late
 
fees.
 
Subsequent to
 
the date
 
of transfer,
 
the
Company
 
has
 
elected
 
to
 
measure
 
its
 
MSRs
 
under
 
the
 
amortization
 
method.
 
Under
 
the
 
amortization
 
method,
 
MSRs
 
are
amortized in proportion
 
to, and over
 
the period of,
 
estimated net servicing
 
income. Servicing
 
fee income is
 
recorded net
 
of
related amortization expense and recognized in earnings as part of mortgage lending
 
income.
 
The Company has recorded MSRs related to loans sold without recourse
 
to Fannie Mae.
 
The Company generally sells
conforming, fixed-rate, closed-end, residential mortgages to Fannie Mae.
 
MSRs are included in other assets on the
accompanying consolidated balance sheets.
The Company evaluates MSRs for impairment on a quarterly basis.
 
Impairment is determined by stratifying MSRs into
groupings based on predominant risk characteristics, such as interest rate and loan type.
 
If, by individual stratum, the
carrying amount of the MSRs exceeds fair value, a valuation allowance is established.
 
The valuation allowance is adjusted
as the fair value changes.
 
Changes in the valuation allowance are recognized in earnings as a component
 
of mortgage
lending income.
The following table details the changes in amortized MSRs and the related valuation allowance for
 
the years ended
December 31, 2023 and 2022.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 31
(Dollars in thousands)
2023
2022
Beginning balance
$
1,151
1,309
Additions, net
38
111
Amortization expense
(197)
(269)
Ending balance
$
992
1,151
Valuation
 
allowance included in MSRs, net:
Beginning of period
$
—
—
End of period
—
—
Fair value of amortized MSRs:
Beginning of period
$
2,369
1,908
End of period
2,382
2,369
Data and assumptions used in the fair value calculation related to MSRs at December
 
31, 2023 and 2022, respectively,
 
are
presented below.
 
 
 
 
 
 
 
 
 
 
 
 
December 31
(Dollars in thousands)
2023
2022
Unpaid principal balance
$
216,648
234,349
Weighted average prepayment
 
speed (CPR)
6.0
%
7.6
Discount rate (annual percentage)
10.5
%
9.5
Weighted average coupon
 
interest rate
3.5
%
3.4
Weighted average remaining
 
maturity (months)
245
256
Weighted average servicing
 
fee (basis points)
25.0
25.0
At December 31, 2023, the weighted average amortization period
 
for MSRs was
7.5
 
years.
 
Estimated amortization expense
for each of the next five years is presented below.
 
 
 
 
 
 
 
 
(Dollars in thousands)
December 31, 2023
2024
$
126
2025
112
2026
100
2027
88
2028
78