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Mortgage Servicing Rights
 9 Months Ended
Sep. 30, 2017
Transfers and Servicing [Abstract]  
Mortgage Servicing Rights
Mortgage Servicing Rights

The following table summarizes the changes in mortgage servicing rights ("MSRs"), which are included in other assets on the consolidated balance sheets:
 
Three months ended September 30
 
Nine months ended September 30
 
2017
 
2016
 
2017
 
2016
 
(in thousands)
Amortized cost:
 
 
 
 
 
 
 
Balance at beginning of period
$
38,180

 
$
39,874

 
$
38,822

 
$
40,944

Originations of mortgage servicing rights
1,333

 
1,499

 
3,719

 
3,927

Amortization
(1,639
)
 
(2,064
)
 
(4,667
)
 
(5,562
)
Balance at end of period
$
37,874

 
$
39,309

 
$
37,874

 
$
39,309

 
 
 
 
 
 
 
 
Valuation allowance:
 
 
 
 
 
 
 
Balance at beginning of period
$
—

 
$
(1,721
)
 
$
(1,291
)
 
$
—

(Additions) reductions to valuation allowance
—

 
(1,280
)
 
1,291

 
(3,001
)
Balance at end of period
$
—

 
$
(3,001
)
 
$
—

 
$
(3,001
)
 
 
 
 
 
 
 
 
Net MSRs at end of period
$
37,874

 
$
36,308

 
$
37,874

 
$
36,308



MSRs represent the economic value of existing contractual rights to service mortgage loans that have been sold. Accordingly, actual and expected prepayments of the underlying mortgage loans can impact the value of MSRs. The Corporation accounts for MSRs at the lower of amortized cost or fair value.

The fair value of MSRs is estimated by discounting the estimated cash flows from servicing income, net of expense, over the expected life of the underlying loans at a discount rate commensurate with the risk associated with these assets. Expected life is based on the contractual terms of the loans, as adjusted for prepayment projections. Based on its fair value analysis, the Corporation determined that no adjustment to the valuation allowance was necessary for the three months ended September 30, 2017, while a reduction of $1.3 million was required for the nine months ended September 30, 2017. Additions to the valuation allowance of $1.3 million and $3.0 million were necessary for the three and nine months ended September 30, 2016, respectively. Additions and reductions to the valuation allowance are recorded as decreases and increases, respectively, to "mortgage banking income" on the consolidated statements of income.