Mortgage Servicing Rights

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

The Corporation has originated mortgage servicing rights which are included in other intangible assets on the consolidated balance sheets. Mortgage servicing rights are amortized in proportion to, and over the period of, estimated net servicing income on a basis similar to the interest method and an accelerated amortization method for loan payoffs. Mortgage servicing rights are subject to impairment testing on a quarterly basis. The aggregate fair value of these rights was $6.8 million and $6.9 million at March 31, 2015 and December 31, 2014, respectively. The fair value of mortgage servicing rights was determined using a discount rate of 10.0% at March 31, 2015, and December 31, 2014.

Changes in the mortgage servicing rights balance are summarized as follows:



	Three Months Ended March 31,
(Dollars in thousands)	2015			2014
Beginning of period	$	5,509		$	5,519
Servicing rights capitalized	382			123
Amortization of servicing rights	(368		)	(243		)
Changes in valuation allowance	—			7
End of period	$	5,523		$	5,406
Mortgage loans serviced for others	$	809,342		$	753,561

Activity in the valuation allowance for mortgage servicing rights was as follows:



	Three Months Ended March 31,
(Dollars in thousands)	2015		2014
Valuation allowance, beginning of period	$	—	$	(250	)
Additions	—		—
Reductions	—		7
Direct write-downs	—		—
Valuation allowance, end of period	$	—	$	(243	)

The estimated amortization expense of mortgage servicing rights for the remainder of 2015 and the succeeding fiscal years is as follows:



Year	(Dollars in thousands)	Amount
Remainder of 2015		$	718
2016		847
2017		709
2018		590
2019		489
Thereafter		2,170