RESIDENTIAL MORTGAGE LOAN SERVICING

6 Months Ended

Jun. 30, 2026

NOTE 6 – RESIDENTIAL MORTGAGE LOAN SERVICING

Residential mortgage loans serviced for others are not reported as assets. The outstanding principal of these loans at June 30, 2026 and December 31, 2025 was $463.5 million and $702.6 million, respectively.

Activity for mortgage loan servicing rights and the related valuation allowance are as follows:


(Dollars in thousands)		For the Three Months Ended June 30,						For the Six Months Ended June 30,
Mortgage loan servicing rights:		2026			2025			2026			2025
Beginning of period		$	1,484		$	1,476		$	1,660		$	1,409
Additions			—			309			—			537
Amortization expense			(176)			(137)			(352)			(255)
Valuation allowance			—			28			—			(15)
End of period, carrying value		$	1,308		$	1,676		$	1,308		$	1,676


(Dollars in thousands)		For the Three Months Ended June 30,						For the Six Months Ended June 30,
Valuation allowance:		2026			2025			2026			2025
Beginning balance		$			$	63		$	—		$	20
Additions expensed			—			—			—			43
Reductions credited to operations			—			(28)			—			(28)
Direct write-downs			—			—			—			—
Ending balance		$	—		$	35		$	—		$	35

The fair value of servicing rights was $5.6 million and $5.7 million at June 30, 2026 and December 31, 2025, respectively. Fair value at June 30, 2026 was determined by using a discount rate of 12.61%, prepayment speeds of 16.35%, and a weighted average default rate of 1.80%. Fair value at December 31, 2025 was determined by using a discount rate of 12.62%, prepayment speeds of 18.58%, and a weighted average default rate of 1.96%.