Mortgage Servicing Rights

9 Months Ended

Sep. 30, 2011

Mortgage Servicing Rights [Abstract]

Mortgage Servicing Rights

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, 2011 and 2010:

(in thousands)

	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Balance, beginning of period		$16,350		$12,895		$14,454		$12,625
Additions for new mortgage servicing rights capitalized		1,693		1,616		4,100		3,624
Acquired mortgage servicing rights		-		-		-		62
Changes in fair value:
Due to changes in model inputs or assumptions(1)		(590)		(890)		(564)		(761)
Other(2)		(841)		(167)		(1,378)		(2,096)
Balance, end of period		$16,612		$13,454		$16,612		$13,454

(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, 2011 and December 31, 2010 was as follows:

(dollars in thousands)

	September 30, 2011			December 31, 2010
Balance of loans serviced for others	$	1,848,220		$	1,603,414
MSR as a percentage of serviced loans		0.90	%		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 Operations, was $1.2 million and $3.5 million for the three and nine months ended September 30, 2011, as compared to $1.0 million and $2.8 million for the three and nine months ended September 30, 2010.

Key assumptions used in measuring the fair value of MSR as of September 30, 2011 and December 31, 2010 were as follows:

	September 30, 2011			December 31, 2010
Constant prepayment rate		18.13	%		18.54	%
Discount rate		8.60	%		8.62	%
Weighted average life (years)		4.8			4.5