Note 7 - Servicing Rights on Sold Loans |
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Transfers and Servicing of Financial Assets [Text Block] |
Note 7 - Servicing Rights on Sold Loans
Mortgage loans serviced for FHLB, Fannie Mae, and Freddie Mac are not included in the accompanying consolidated balance sheets. Selected commercial loan balances have also been sold in whole or in part to various participants, including the Main Street Lending Program, with servicing retained by First Fed and are not included in the accompanying consolidated balance sheets. The unpaid principal balances of serviced loans, primarily mortgage loans, were $366.1 million and $418.7 million at December 31, 2023 and 2022, respectively.
Loan servicing rights for the periods shown are as follows:
The key economic assumptions used in determining the fair value of loan servicing rights for the periods shown are as follows:
The fair values of loan servicing rights were approximately $3.8 million and $3.9 million at December 31, 2023 and 2022, respectively. See Note 15 Fair Value Measurement for additional information.
The following represents servicing and late fees earned in connection with loan servicing rights and is included in the accompanying consolidated financial statements as a component of noninterest income for the periods shown:
The following table represents the hypothetical effect on the fair value of the Company's loan servicing rights using unfavorable shock analyses of certain key valuation assumptions as of December 31, 2023 and 2022. This analysis is presented for hypothetical purposes only. As the amounts indicate, changes in fair value based on changes in assumptions generally cannot be extrapolated because the relationship of the change in assumptions to the change in fair value may not be linear.
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