Note 4 - Originated Mortgage Servicing Rights

3 Months Ended

Jun. 30, 2011

Originated Mortgage Servicing Rights [Text Block]

NOTE 4 -- ORIGINATED MORTGAGE SERVICING RIGHTS

                Mortgage servicing rights, which are included in other assets on the Condensed Consolidated Balance Sheets, are accounted for on an individual loan-by-loan basis.  Accordingly, amortization is recorded in proportion to the amount of principal payment received on loans serviced.  The mortgage servicing rights are subject to periodic impairment testing.  Changes in the carrying value of capitalized mortgage servicing rights are summarized as follows:

(in thousands)
Balance, January 1, 2011	$	3,385
Servicing rights capitalized		246
Amortization of servicing rights		(211	)
Valuation adjustment		-
Balance, June 30, 2011	$	3,420

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

(in thousands)
Balance, January 1, 2011	$	295
Additions		-
Reductions		-
Balance, June 30, 2011	$	295

The following table shows the future estimated amortization expense for mortgage servicing rights based on existing balances as of June 30, 2011.  The Corporation’s actual amortization expense in any given period may be significantly different from the estimated amounts displayed, depending on the amount of additional mortgage servicing rights, changes in mortgage interest rates, estimated prepayment speeds and market conditions.

Estimated Amortization Expense:

	Amount (in thousands)
For the six months ended December 31, 2011	$	174
For the year ending December 31, 2012		361
For the year ending December 31, 2013		339
For the year ending December 31, 2014		318
For the year ending December 31, 2015		298
For the year ending December 31, 2016		279
Thereafter		1,651

The Corporation services loans for others with unpaid principal balances at June 30, 2011 and December 31, 2010 of approximately $398.9 million and $395.0 million, respectively.