Loan Servicing

12 Months Ended

Dec. 31, 2011

Loan Servicing

Note 13: Loan Servicing

Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of these loans consist of the following:

	2011		2010		2009
Loans serviced for
Freddie Mac	$	368,518	$	418,003	$	431,815
Fannie Mae		44,948		1,363		1,589
FHLB		16,241		20,375		27,012
Other investors		1,926		1,874		2,282
	$	431,633	$	441,615	$	462,698

The aggregate fair value of capitalized mortgage servicing rights is based on comparable market values and expected cash flows, with impairment assessed based on portfolio characteristics including product type and interest rates. The approximate fair value of mortgage servicing rights at December 31, 2011 was $2,626,000. The amount of servicing fees collected during 2011, 2010 and 2009 totaled approximately $1,080,000, $955,000 and $1,116,000.

	2011			2010			2009
Mortgage-servicing rights
Balances, January 1	$	3,674		$	3,984		$	3,276
Servicing rights capitalized		430			682			1,579
Amortization of servicing rights		(1,003	)		(992	)		(871	)
		3,101			3,674			3,984
Valuation allowance		(475	)		(325	)		(500	)
Balances, December 31	$	2,626		$	3,349		$	3,484

The fair value of servicing rights subsequently measured using the amortization method was as follows:

	2011		2010
Mortgage-servicing rights
Fair value, beginning of period	$	3,350	$	3,510
Fair value, end of period		2,626		3,350

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

	2011			2010			2009
Balance, beginning of year	$	325		$	500		$	500
Additions		355			—			—
Reductions		(205	)		(175	)		—
Balance, end of year	$	475		$	325		$	500