Mortgage Banking Activities (Tables)

9 Months Ended

Sep. 30, 2013

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Principal Balance of Mortgage Servicing Rights

Mortgage loans serviced for others are not reported as assets. The principal balances of these loans are as follows:

	September 30, 2013		December 31, 2012
Mortgage loan portfolios serviced for:
FHLMC	$	830,295	$	817,108
FNMA		291,015		316,142

Capitalized Mortgage Servicing Rights

Activity for capitalized mortgage servicing rights, included in other assets, was as follows:

	Nine Months Ended September 30, 2013			Nine Months Ended September 30, 2012
	(Dollars in thousands)
Balance, beginning of year	$	5,506		$	6,375
Originations		2,228			1,738
Amortized to expense		(1,712	)		(1,923	)
Balance, end of period		6,022			6,190
Less valuation allowance		(4	)		(2,016	)
Net balance	$	6,018		$	4,174

Valuation Allowance for Mortgage Servicing Rights

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

	Nine Months Ended September 30, 2013			Nine Months Ended September 30, 2012
	(Dollars in thousands)
Balance, beginning of year	$	(680	)	$	(1,785	)
Impairment charges		—			(1,179	)
Recoveries		676			948
Balance, end of period	$	(4	)	$	(2,016	)

Key Economic Assumptions in Measuring Value of Mortgage Servicing Rights

Key economic assumptions in measuring the value of mortgage servicing rights at September 30, 2013, and December 31, 2012, were as follows:

	September 30, 2013			December 31, 2012
Weighted average prepayment rate		232 PSA			401 PSA
Weighted average life (in years)		3.99			3.93
Weighted average discount rate		8.00	%		8.00	%