Mortgage Servicing Rights

9 Months Ended

Sep. 30, 2012

Mortgage Servicing Rights [Abstract]

Note 7 – Mortgage Servicing Rights

The following table presents the changes in the Company’s mortgage servicing rights (“MSR”) for the three and nine months ended September 30, 2012 and 2011:


(in thousands)
	Three months ended				Nine months ended
	September 30,				September 30,
	2012		2011		2012		2011
Balance, beginning of period	$	22,513	$	16,350	$	18,184	$	14,454
Additions for new mortgage servicing rights capitalized		5,642		1,693		11,923		4,100
Changes in fair value:
Due to changes in model inputs or assumptions⁽¹⁾		(2,770)		(590)		(3,833)		(564)
Other⁽²⁾		(896)		(841)		(1,785)		(1,378)
Balance, end of period	$	24,489	$	16,612	$	24,489	$	16,612

(1)	Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.

(2)	Represents changes due to collection/realization of expected cash flows over time.

Information related to our serviced loan portfolio as of September 30, 2012 and December 31, 2011 was as follows:


(dollars in thousands)
	September 30, 2012		December 31, 2011
Balance of loans serviced for others	$	2,814,102	$	2,009,849
MSR as a percentage of serviced loans		0.87%		0.90%

The amount of contractually specified servicing fees, late fees and ancillary fees earned, recorded in mortgage banking revenue on the Condensed Consolidated Statements of Income, was $1.7 million and $4.6 million for the three and nine months ended September 30, 2012, as compared to $1.2 million and $3.5 million for the three and nine months ended September 30, 2011.

Key assumptions used in measuring the fair value of MSR as of September 30, 2012 and December 31, 2011 are as follows:


	September 30, 2012	December 31, 2011
Constant prepayment rate	20.59%	20.39%
Discount rate	8.60%	8.60%
Weighted average life (years)	4.7	4.5