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Mortgage Banking and Servicing Rights (Tables)
 12 Months Ended
Dec. 31, 2016
Mortgage Banking and Servicing Rights [Abstract]  
Components of Mortgage Banking Income
The following table presents the components of mortgage banking income:

(in thousands)
Year Ended December 31
 
2016
  
2015
  
2014
 
Net gain on sale of loans held for sale
 
$
1,831
  
$
1,978
  
$
1,468
 
Net loan servicing income (expense)
            
Servicing fees
  
1,239
   
1,197
   
1,129
 
Late fees
  
78
   
88
   
112
 
Ancillary fees
  
322
   
212
   
149
 
Fair value adjustments
  
(324
)
  
(289
)
  
(830
)
Net loan servicing income
  
1,315
   
1,208
   
560
 
Mortgage banking income
 
$
3,146
  
$
3,186
  
$
2,028
 
Activity for Capitalized Mortgage Servicing Rights Using Fair Value Method
Activity for capitalized mortgage servicing rights using the fair value method is as follows:

(in thousands)
 
2016
  
2015
  
2014
 
Fair value of MSRs, beginning of period
 
$
3,236
  
$
2,968
  
$
3,424
 
New servicing assets created
  
521
   
557
   
374
 
Change in fair value during the period due to:
            
Time decay (1)
  
(175
)
  
(168
)
  
(162
)
Payoffs (2)
  
(313
)
  
(247
)
  
(202
)
Changes in valuation inputs or assumptions (3)
  
164
   
126
   
(466
)
Fair value of MSRs, end of period
 
$
3,433
  
$
3,236
  
$
2,968
 

(1)
Represents decrease in value due to regularly scheduled loan principal payments and partial loan paydowns.
(2)
Represents decrease in value due to loans that paid off during the period.
(3)
Represents change in value resulting from market-driven changes in interest rates.