Note 14: 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:



	2014		2013
Loans serviced for
Freddie Mac	$	295,589	$	303,313
Fannie Mae		16,024		20,881
FHLB		12,963		10,958
Other investors		1,670		1,811
	$	326,246	$	336,963

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 amount of servicing fees collected during 2014, 2013 and 2012 totaled approximately $832,000, $896,000, and $986,000.



	2014		2013		2012
Mortgage-servicing rights
Balances, January 1	$	1,858	$	2,396	$	3,101
Servicing rights capitalized		278		464		294
Amortization of servicing rights		(719)		(1,002)		(999)
		1,417		1,858		2,396
Valuation allowance		-		-		(665)
	$	1,417	$	1,858	$	1,731

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



	2014		2013		2012
Mortgage-servicing rights
Fair value, beginning of period	$	2,106	$	1,731	$	2,626
Fair value, end of period		2,048		2,106		1,731

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



	2014		2013		2012
Balance, beginning of year	$	-	$	665	$	475
Additions		-		-		190
Reductions		-		(665)		-
Balance, end of year	$	-	$	-	$	665