XML 29 R16.htm IDEA: XBRL DOCUMENT v3.24.0.1
Mortgage Servicing Rights
 12 Months Ended
Dec. 31, 2023
Transfers and Servicing of Financial Assets [Abstract]  
Mortgage Servicing Rights Mortgage Servicing Rights
The unpaid principal balance of residential mortgage loans serviced for third parties was $806.05 million at December 31, 2023, compared to $848.96 million at December 31, 2022, and $883.90 million at December 31, 2021.
Amortization expense on MSRs is expected to total $0.57 million, $0.49 million, $0.42 million, $0.36 million, and $0.30 million in 2024, 2025, 2026, 2027, and 2028, respectively. Projected amortization excludes the impact of future asset additions or disposals.
The following table shows changes in the carrying value of MSRs and the associated valuation allowance.
(Dollars in thousands)20232022
Mortgage servicing rights:  
Balance at beginning of year$4,137 $4,671 
Additions378 753 
Amortization(845)(1,287)
Sales— — 
Carrying value before valuation allowance at end of year3,670 4,137 
Valuation allowance:  
Balance at beginning of year— — 
Impairment recoveries— — 
Balance at end of year$— $— 
Net carrying value of mortgage servicing rights at end of year$3,670 $4,137 
Fair value of mortgage servicing rights at end of year$8,151 $8,007 
At December 31, 2023, the fair value of MSRs exceeded the carrying value reported on the Consolidated Statements of Financial Condition by $4.48 million. This difference represents increases in the fair value of certain MSRs that could not be recorded above cost basis.
Funds held in trust at 1st Source for the payment of principal, interest, taxes and insurance premiums applicable to mortgage loans being serviced for others, were approximately $8.07 million and $8.57 million at December 31, 2023 and December 31, 2022, respectively. Mortgage loan contractual servicing fees, including late fees and ancillary income, were $2.54 million, $2.79 million, and $3.17 million for 2023, 2022, and 2021, respectively. Mortgage loan contractual servicing fees are included in Mortgage Banking Income on the Consolidated Statements of Income.