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Note 5 - Mortgage Operations | 6 Months Ended
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Jun. 30, 2026
Notes to Financial Statements |
Transfers and Servicing of Financial Assets [Text Block] | 5. MORTGAGE OPERATIONS Transfers and servicing of financial assets and extinguishments of liabilities are accounted for and reported based on consistent application of a financial-components approach that focuses on control. Transfers of financial assets that are sales are distinguished from transfers that are secured borrowings. Retained servicing rights on loans sold are measured by allocating the previous carrying amount of the transferred assets between the loans sold and retained interest, if any, based on their relative fair value at the date of transfer. Fair values are estimated using discounted cash flows based on a current market interest rate. The Company recognizes a gain and a related asset for the fair value of the rights to service loans for others when loans are sold. The Company sold a substantial portion of its portfolio of conforming long-term residential mortgage loans originated during the six months ended June 30, 2026 for cash proceeds equal to the fair value of the loans. The Company serviced real estate mortgage loans for others totaling $155,568,000 and $162,644,000 at June 30, 2026 and December 31, 2025, respectively. The recorded value of mortgage servicing rights is amortized in proportion to, and over the period of, estimated net servicing revenues. The Company assesses capitalized mortgage servicing rights for impairment based upon the fair value of those rights at each reporting date. For purposes of measuring impairment, the rights are stratified based upon the product type, term and interest rates. Fair value is determined by discounting estimated net future cash flows from mortgage servicing activities using discount rates that approximate current market rates and estimated prepayment rates, among other assumptions. The amount of impairment recognized, if any, is the amount by which the capitalized mortgage servicing rights for a stratum exceeds their fair value. Impairment, if any, is recognized through a valuation allowance for each individual stratum. Changes in the carrying amount of mortgage servicing rights are reported in earnings under loan servicing income on the condensed consolidated statements of income. Key assumptions used in measuring the fair value of mortgage servicing rights as of June 30, 2026 and December 31, 2025 were as follows:
|  | June 30, 2026 |  |  | December 31, 2025 |
Constant prepayment rate |  |  | 6.44 | % |  |  | 7.53 | %
Discount rate |  |  | 9.51 | % |  |  | 9.50 | %
Weighted average life (years) |  |  | 7.55 |  |  |  | 7.24 |
The following table summarizes the changes to the Company’s mortgage servicing rights assets as of the periods presented. Mortgage servicing rights are included in Interest Receivable and Other Assets on the condensed consolidated balance sheets.
(in thousands) |  | March 31, 2026 |  |  | Additions |  |  | Reductions |  |  | June 30, 2026 |
Mortgage servicing rights |  | $ | 1,126 |  |  | $ | 15 |  |  | $ | (40 | ) |  | $ | 1,101 |
Valuation allowance |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Mortgage servicing rights, net of valuation allowance |  | $ | 1,126 |  |  | $ | 15 |  |  | $ | (40 | ) |  | $ | 1,101 |
(in thousands) |  | December 31, 2025 |  |  | Additions |  |  | Reductions |  |  | June 30, 2026 |
Mortgage servicing rights |  | $ | 1,159 |  |  | $ | 28 |  |  | $ | (86 | ) |  | $ | 1,101 |
Valuation allowance |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Mortgage servicing rights, net of valuation allowance |  | $ | 1,159 |  |  | $ | 28 |  |  | $ | (86 | ) |  | $ | 1,101 |
At June 30, 2026 and December 31, 2025, the estimated fair market value of the Company’s mortgage servicing rights assets was $1,840,000 and $1,748,000, respectively. The change in fair value of mortgage servicing rights during 2026 was primarily due to a decrease in prepayment speeds. The Company received contractually specified servicing fees of $98,000 and $108,000 for the three months ended June 30, 2026 and June 30, 2025, respectively. The Company received contractually specified servicing fees of $200,000 and $217,000 for the six months ended June 30, 2026 and June 30, 2025, respectively. Loan servicing income on the condensed consolidated statements of income includes contractually specified servicing fees, mortgage servicing rights additions, amortization and changes in the valuation allowance.

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- Definition The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 860 -SubTopic 20 -Name Accounting Standards Codification -Section 55 -Paragraph 108 -Publisher FASB -URI 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