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Loan Servicing
 6 Months Ended
Jun. 30, 2025
Transfers and Servicing [Abstract]  
Loan Servicing
4.
Loan Servicing

Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of such loans were $30.1 million and $31.3 million at June 30, 2025 and December 31, 2024, respectively. Substantially all of these loans were originated by the Company and sold to third parties on a non-recourse basis with servicing rights retained. These retained servicing rights are recorded as a servicing asset and are initially recorded at fair value (see Note 15, Fair Values of Assets and Liabilities, for more information). Changes to the balance of mortgage servicing rights are recorded in loan servicing fee income in the Company’s consolidated statements of (loss) income.

The Company’s mortgage servicing activities include: collecting principal, interest and escrow payments from borrowers; making tax and insurance payments on behalf of borrowers; monitoring delinquencies and executing foreclosure proceedings; and accounting for and remitting principal and interest payments to investors. Loan servicing income, including late and ancillary fees, was $8,000 and $13,000 for the three months ended June 30, 2025 and 2024, respectively, and $14,000 and $24,000 for the six months ended June 30, 2025 and 2024, respectively. The Company's residential mortgage investor loan servicing portfolio is primarily comprised of fixed rate loans concentrated in the Company’s market areas.

The following summarizes activity in mortgage servicing rights for the three and six months ended June 30, 2025 and 2024:

(Dollars in thousands)

 

2025

 

 

2024

 

Balance, March 31,

 

$

292

 

 

$

329

 

Additions

 

 

—

 

 

 

—

 

Payoffs

 

 

(2

)

 

 

(6

)

Change in fair value due to change in assumptions

 

 

(10

)

 

 

(2

)

Balance, June 30,

 

$

280

 

 

$

321

 

 

 

 

 

 

 

 

Balance, January 1,

 

$

305

 

 

$

339

 

Additions

 

 

3

 

 

 

—

 

Payoffs

 

 

(6

)

 

 

(7

)

Change in fair value due to change in assumptions

 

 

(22

)

 

 

(11

)

Balance, June 30,

 

$

280

 

 

$

321