MORTGAGE BANKING ACTIVITIES |
12 Months Ended |
|---|---|
Dec. 31, 2022 | |
| Mortgage Banking Activities [Abstract] | |
| Mortgage Banking Activities |
Note 4
MORTGAGE BANKING ACTIVITIES
The Company’s mortgage
residential loan pipeline price risk, utilization of warehouse lines to fund
residential mortgage 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
rate residential mortgage loans may be held for investment.
secondary 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.
including collateral requirements, which are generally accepted by
interest rate fluctuations and is partially managed through forward sales of residential
TBAs) or mandatory delivery commitments with investors.
The unpaid principal balance of residential mortgage loans held for sale,
residential mortgage loan commitments and forward contract sales and their related
(As Restated)
December 31, 2022
December 31, 2021
Unpaid Principal
Unpaid Principal
(Dollars in Thousands)
Balance/Notional
Fair Value
Balance/Notional
Fair Value
Residential Mortgage Loans Held for Sale
$
26,274
$
26,909
$
50,773
$
52,532
Residential Mortgage Loan Commitments
(1)
36,535
819
51,883
1,258
Forward Sales Contracts
(2)
15,500
187
48,000
(7)
$
27,915
$
53,783
(1)
Recorded in other assets at fair value
(2)
Recorded in other assets and (other liabilities)
At December 31, 2022, the Company had $
0.6
0.1
million of loans were on nonaccrual status.
0.2
held for sale 30-89 days past due and no loans were on nonaccrual status.
Mortgage banking revenues for the year ended December 31, was as follows:
(Dollars in Thousands)
(As Restated)
2022
2021
2020
Net realized gain on sales of mortgage loans
$
5,565
$
49,355
$
59,709
Net change in unrealized gain on mortgage loans held for sale
(1,164)
(2,410)
2,926
Net change in the fair value of mortgage loan commitments
(439)
(3,567)
2,625
Net change in the fair value of forward sales contracts
192
900
284
Pair-Offs on net settlement of forward
4,956
2,956
(9,602)
Mortgage servicing rights additions
565
1,416
3,448
Net origination fees
2,234
3,775
3,954
Total mortgage banking
$
11,909
$
52,425
$
63,344
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)
(Dollars in Thousands)
2022
2021
Number of residential mortgage loans serviced for others
1,769
2,106
Outstanding principal balance of residential mortgage loans serviced
$
410,740
$
532,967
Weighted average
3.62%
3.59%
Remaining contractual term (in months)
298
317
Conforming conventional loans serviced by the Company are sold to the
non-recourse basis, whereby foreclosure losses are generally the responsibility
loans serviced by the Company are secured through the GNMA, whereby
Housing Administration or partially guaranteed against loss by
servicing portfolio balance consisted of the following loan types: FNMA
60.2
%), GNMA (
0.1
%), and private investor (
39.7
%).
FNMA and private investor loans are structured as actual/actual payment remittance
The Company had $
0.3
2.0
the Company at December 31, 2022 and 2021, respectively.
has been recorded in other assets and other liabilities, respectively,
the years ended December 31, 2022 and 2021, respectively,
1.7
2.8
delinquent or defaulted mortgage loans with the intention to modify their
Activity in the capitalized mortgage servicing rights for the year ended
(As Restated)
(Dollars in Thousands)
2022
2021
2020
Beginning balance
$
3,774
$
3,452
$
910
Additions due to loans sold with servicing retained
565
1,416
3,448
Deletions and amortization
(1,291)
(1,344)
(656)
Valuation
-
250
(250)
Sale of Servicing Rights
(1)
(449)
-
-
Ending balance
$
2,599
$
3,774
$
3,452
(1)
The Company sold an MSR portfolio with an unpaid principal balance of $
50
0.6
0.2
The Company did
no
t record any permanent impairment losses on mortgage servicing rights for the
2022
The key unobservable inputs used in determining the fair value of the Company’s
as follows:
2022
2021
Minimum
Maximum
Minimum
Maximum
Discount rates
9.50%
12.00%
11.00%
15.00%
Annual prepayment speeds
12.33%
20.23%
11.98%
23.79%
Cost of servicing (per loan)
$
85
95
$
60
73
Changes in residential mortgage interest rates directly affect
servicing rights.
rates, estimated loan curtailment, anticipated defaults, and other relevant
was
13.42
% at December 31, 2022 and
15.85
% at December 31, 2021.
Warehouse
The Company has the following warehouse lines of credit and master repurchase
December 31, 2022.
Amounts
(Dollars in Thousands)
Outstanding
$
75
1.00%
to plus
1.00%
, with a floor rate of
3.25%
.
0.5
$
9,577
$
75
December 2022
.
2.25%
to
3.25%
.
40,575
$
50,152
Warehouse
$
29.0
as collateral under the above warehouse lines of credit and master repurchase agreements.
covenants which include certain financial requirements, including
assets and maximum debt to net worth ratio, as defined in the agreements.
debt covenants at December 31, 2022.
The Company intends to renew the warehouse lines of credit and master repurchase
The Company has extended a $
50
are eliminated in the Company’s consolidated
on the Consolidated Statement of Financial Condition.
2021 was $
22.9
14.8
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