MORTGAGE BANKING ACTIVITIES |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Mortgage Banking Activities [Abstract] | |
| Mortgage Banking Activities |
NOTE 4 – MORTGAGE BANKING ACTIVITIES
The Company’s mortgage
loan pipeline price risk, utilization of warehouse lines to fund secondary
servicing.
Residential Mortgage Loan Production
The Company originates, markets, and services conventional and government
conforming fixed rate residential mortgage loans are held for sale in the secondary
residential mortgage loans may be held for investment.
market prices are the primary drivers of origination revenue.
Residential mortgage loan commitments are generally outstanding for 30
commitment to originate a residential mortgage loan to when the closed
commitments are subject to both credit and price risk.
collateral requirements, which are generally accepted by the secondary
fluctuations and is partially managed through forward sales of residential mortgage
securities, or TBAs) or mandatory delivery commitments with investors.
The unpaid principal balance of residential mortgage loans held for sale, notional
mortgage loan commitments and forward contract sales and their related fair values
(As Restated)
(As Restated)
March 31, 2023
December 31, 2022
Unpaid Principal
Unpaid Principal
(Dollars in Thousands)
Balance/Notional
Fair Value
Balance/Notional
Fair Value
Residential Mortgage Loans Held for Sale
$
28,204
$
28,475
$
26,274
$
26,909
Residential Mortgage Loan Commitments ("IRLCs")
(1)
51,984
1,346
36,535
819
Forward Sales Contracts
(2)
34,000
(216)
15,500
187
$
29,605
$
27,915
(1)
Recorded in other assets at fair value
(2)
Recorded in other liabilities and other assets at fair value
At March 31, 2023, the Company had $
0.3
0.3
loans were on nonaccrual status. At December 31, 2022, the Company had
0.6
89 days past due and $
0.1
Mortgage banking revenue was as follows:
(As Restated)
Three Months Ended March 31,
(Dollars in Thousands)
2023
2022
Net realized gains on sales of mortgage loans
$
1,194
$
2,140
Net change in unrealized gain on mortgage loans held for sale
457
(900)
Net change in the fair value of mortgage loan commitments (IRLCs)
527
(141)
Net change in the fair value of forward sales contracts
(402)
857
Pair-Offs on net settlement of forward sales contracts
(1)
2,255
Mortgage servicing rights additions
191
4
Net origination fees
905
(160)
Total mortgage banking
$
2,871
$
4,055
Residential Mortgage Servicing
The Company may retain the right to service residential mortgage loans
others is the primary driver of servicing revenue.
The following represents a summary of mortgage servicing rights.
(As Restated)
(As Restated)
(Dollars in Thousands)
March 31, 2023
December 31, 2022
Number of residential mortgage loans serviced for others
1,806
1,769
Outstanding principal balance of residential mortgage loans serviced
$
418,150
$
410,740
Weighted average
3.95%
3.62%
Remaining contractual term (in months)
304
298
Conforming conventional loans serviced by the Company are sold to Federal
recourse basis, whereby foreclosure losses are generally
serviced by the Company are secured through the Government National
insured against loss by the Federal Housing Administration or partially guaranteed
March 31, 2023, the servicing portfolio balance consisted of the following
86.9
%), GNMA (
0.5
%), and private
investor (
12.6
%).
The Company had
no
0.3
December 31, 2022, respectively.
and other liabilities, respectively,
and March 31, 2022, the Company repurchased $
0.9
0.4
When delinquent residential loans are repurchased, the Company has the
GNMA pools.
Activity in the capitalized mortgage servicing rights was as follows:
(As Restated)
Three Months Ended March 31,
(Dollars in Thousands)
2023
2022
Beginning balance
$
2,599
$
3,774
Additions due to loans sold with servicing retained
191
4
Deletions and amortization
(99)
(368)
Sale of servicing rights
101
-
Ending balance
$
2,792
$
3,410
At March 31, 2023, we recorded the sale of $
334
pending FNMA approval.
2.3
1.38
million were recorded as a secured borrowing in Other Liabilities within the Consolidated
Subsequent to March 31, 2023, FNMA approval was obtained.
The Company did
no
t record any permanent impairment losses on mortgage servicing rights for the
2023 or 2022.
The key unobservable inputs used in determining the fair value of the Company’s
(As Restated)
(As Restated)
March 31, 2023
December 31, 2022
Minimum
Maximum
Minimum
Maximum
Discount rates
9.51%
12.00%
9.50%
12.00%
Annual prepayment speeds
13.45%
21.56%
12.33%
20.23%
Cost of servicing (per loan)
$
85
$
95
$
85
$
95
Changes in residential mortgage interest rates directly affect
servicing rights.
estimated loan curtailment, anticipated defaults, and other relevant factors.
18.60
% at March 31, 2023 and
13.42
% at December 31, 2022.
Warehouse
The Company has the following warehouse lines of credit and master repurchase
March 31, 2023.
Amounts
(Dollars in Thousands)
Outstanding
$
75
2.00%
3.00%
, with a floor rate of
3.25%
.
0.5
8,309
$
60
December 2023
.
2.25%
,
to
3.25%
.
13,864
Total Warehouse
$
22,173
Warehouse
50.2
million. At March 31, 2023, the Company had residential mortgage
pledged as collateral under the above warehouse lines of credit and master repurchase
covenants which include certain financial requirements, including
assets, and maximum debt to net worth ratio, as defined in the agreements.
covenants at March 31, 2023.
The Company has extended a $
50
51
% owned subsidiary entity.
transactions under this line of credit are eliminated in the Company’s
total short term borrowings noted on the Consolidated Statement of
31, 2023 and December 31, 2022 was $
32.8
22.9
|