Other Intangible Assets

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Other Intangible Assets

OTHER INTANGIBLE ASSETS

The following table shows the net carrying value of the Corporation's other intangible assets:

	December 31,
	2012		2011
	(In thousands)
Other intangible assets:
Core deposit intangible assets	$	11,910	$	7,879
Mortgage servicing rights (MSRs)	3,478		3,593
Total other intangible assets	$	15,388	$	11,472

Core Deposit Intangible Assets

The following table sets forth the carrying amount, accumulated amortization and amortization expense of core deposit intangible assets that are amortizable and arose from business combinations or other acquisitions:

	December 31,
	2012		2011
	(In thousands)
Gross original amount	$	18,659	$	26,468
Accumulated amortization	6,749		18,589
Carrying amount	$	11,910	$	7,879
Amortization expense for the year ended December 31	$	1,569	$	1,527

In conjunction with the acquisition of branches in 2012, the Corporation recorded $5.6 million in core deposit intangible assets. There were no additions of core deposit intangible assets during 2011.

The estimated future amortization expense on core deposit intangible assets for the years ending after December 31, 2012 is as follows: 2013 - $1.9 million; 2014 - $1.8 million; 2015 - $1.7 million; 2016 - $1.5 million; 2017 - $1.2 million; 2018 and thereafter - $3.8 million.

Mortgage Servicing Rights (MSRs)

The following shows the net carrying value and fair value of MSRs and the total loans that the Corporation is servicing for others:

	December 31,
	2012		2011
	(In thousands)
Net carrying value of MSRs	$	3,478	$	3,593
Fair value of MSRs	$	4,716	$	4,757
Loans serviced for others that have servicing rights capitalized	$	906,314	$	902,812

The fair value of MSRs was estimated by calculating the present value of estimated future net servicing cash flows, taking into consideration expected prepayment rates, discount rates, servicing costs and other economic factors that are based on current market conditions. The prepayment rates and the discount rate are the most significant factors affecting valuation of the MSRs. Increases in mortgage loan prepayments reduce estimated future net servicing cash flows because the life of the underlying loan is reduced. Expected loan prepayment rates are validated by a third-party model. At December 31, 2012, the weighted average coupon rate of the the Corporation's servicing portfolio was 4.57% and the discount rate was 8.5%. At December 31, 2011, the weighted average coupon rate of the Corporation's servicing portfolio was 5.01% and the discount rate was 8.5%.

There was no MSR impairment valuation allowance recorded at December 31, 2012 and 2011, as the estimated fair value of MSRs exceeded the recorded book value.

The following shows activity for capitalized MSRs for the last three years:

	Years Ended December 31,
	2012			2011			2010
	(In thousands)
Balance at beginning of year	$	3,593		$	3,782		$	3,077
Acquired in OAK acquisition	—			—			691
Additions	2,285			1,566			1,918
Amortization	(2,400		)	(1,755		)	(1,904		)
Balance at end of year	$	3,478		$	3,593		$	3,782