Note 6 - Mortgage Servicing Rights

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Transfers and Servicing of Financial Assets [Text Block]

6) Mortgage Servicing Rights

The following table presents the activity related to the Company’s mortgage servicing rights included in prepaid and other assets on the consolidated statement of financial condition:

	Year ended December 31,
	2022			2021
	(In Thousands)
Mortgage servicing rights at beginning of the year	$	1,555		$	5,977
Additions		2,461			5,788
Amortization		(579	)		(1,789	)
Sales		-			(8,444	)
Mortgage servicing rights at end of the year		3,437			1,532
Valuation allowance recovered during the year		7			23
Mortgage servicing rights at the end of the year, net	$	3,444		$	1,555

During the year ended December 31, 2022, on a consolidated basis, $2.55 billion in residential loans were originated for sale, which excludes the loans originated from Waterstone Mortgage Corporation and purchased by WaterStone Bank. During the same period, sales of loans held for sale totaled $2.81 billion, generating mortgage banking income of $99.6 million. The unpaid principal balance of loans serviced for others was $409.6 million and $204.8 million at December 31, 2022 and  December 31, 2021 respectively. Loans serviced for others are not reflected in the consolidated statements of financial condition.

The fair value of mortgage servicing rights was $5.0 million at December 31, 2022 and $1.8 million at December 31, 2021.

During the year ended December 31, 2022, no mortgage servicing rights were sold. During the year ended December 31, 2021, the Company sold mortgage servicing rights related to $1.24 billion in loans receivable and with a book value of $8.4 million for $12.4 million resulting in a gain on sale of $4.0 million.

The following table shows the estimated future amortization expense for mortgage servicing rights at December 31, 2022 for the years ending  December 31 periods as indicated:

	(In Thousands)
2023	$	626
2024		564
2025		501
2026		438
2027		376
Thereafter		939
Total	$	3,444