Note 10 – Loan Servicing

Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of loans serviced for others totaled approximately $1,164.3 million and $1,035.5 million at December 31, 2015 and 2014.

The aggregate fair value of capitalized mortgage servicing rights was approximately $10.8 million, $10.5 million, and $9.9 million at December 31, 2015, 2014 and 2013, compared to the carrying values of $8.9 million, $7.6 million and $7.0 million, respectively. The fair value of capitalized mortgage servicing rights was approximately $6.6 million on January 1, 2013. Comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value. For purposes of measuring impairment, risk characteristics including product type, investor type and interest rates, were used to stratify the originated mortgage servicing rights.


	December 31 2015			December 31 2014			December 31 2013
Mortgage servicing rights
Balances, January 1	$	7,980		$	7,428		$	6,169
Servicing rights capitalized		2,974			2,280			2,535
Amortization of servicing rights		(1,683	)		(1,728	)		(1,276	)

Balances, December 31		9,271			7,980			7,428

Impairment allowance
Balances, January 1		(338	)		(389	)		(1,024	)
Additions		(130	)		(95	)		(54	)
Reductions		71			146			689

Balances, December 31		(397	)		(338	)		(389	)

Mortgage servicing rights, net	$	8,874		$	7,642		$	7,039

During 2015, 2014 and 2013, the Bank recorded recovery and additional (impairment) of approximately $(59,000), $51,000 and $635,000, respectively.