Loan Servicing

9 Months Ended

Sep. 30, 2021

Payments for (Proceeds from) Mortgage Servicing Rights [Abstract]

Loan Servicing

Loan Servicing

Loans serviced for others are not included in the accompanying condensed consolidated balance sheets. The unpaid principal balances of loans serviced for others totaled approximately $1.5 billion and $1.5 billion at September 30, 2021 and December 31, 2020.

The aggregate fair value of capitalized mortgage servicing rights was approximately $14.9 million and $12.5 million at September 30, 2021 and December 31, 2020, compared to the carrying values of $14.9 million and $12.5 million at September 30, 2021 and December 31, 2020, respectively. Comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value. For purposes of measuring impairment, risk characteristics including product type, investor type and interest rates, were used to stratify the originated mortgage servicing rights.

	September 30,		December 31,
	2021		2020
Mortgage servicing rights
Balance, beginning of period	$	17,644	$	15,046
Servicing rights capitalized	3,209		5,530
Amortization of servicing rights	(2,960)		(2,932)
Balance, end of period	17,893		17,644
Impairment allowance
Balance, beginning of period	(5,172)		(719)
Additions	—		(5,106)
Reductions	2,142		653
Balance, end of period	(3,030)		(5,172)
Mortgage servicing rights, net	$	14,863	$	12,472

The Bank reduced impairment by approximately $2.1 million for the nine months ended September 30, 2021. The Bank recorded additional impairment of approximately $4.5 million for the year ended December 31, 2020.