MORTGAGE BANKING ACTIVITIES (Tables)

9 Months Ended

Sep. 30, 2018

The principal balances of mortgage loans serviced for others are as follows:

	September 30, 2018		December 31, 2017
	(Dollars in thousands)
Mortgage loan portfolios serviced for:
FHLMC	$	1,007,223	$	1,003,441
FNMA		326,200		242,444
Private investor		16,404		23,404

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

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2018			2017			2018			2017
	(Dollars in thousands)
Balance, beginning of period	$	6,942		$	6,161		$	6,681		$	6,070
Originations		928			793			2,231			1,819
Amortized to expense		(477	)		(491	)		(1,519	)		(1,426	)
Balance, end of period		7,393			6,463			7,393			6,463
Less valuation allowance		(26	)		(15	)		(26	)		(15	)
Net balance	$	7,367		$	6,448		$	7,367		$	6,448

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

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2018			2017			2018			2017
	(Dollars in thousands)
Balance, beginning of period	$	(20	)	$	(5	)	$	(9	)	$	—
Impairment charges		(6	)		(10	)		(26	)		(15	)
Recoveries		—			—			9			—
Balance, end of period	$	(26	)	$	(15	)	$	(26	)	$	(15	)

Key economic assumptions in measuring the value of mortgage servicing rights at September 30, 2018, and December 31, 2017, were as follows:

	September 30, 2018	December 31, 2017
Weighted average prepayment rate	136 PSA	181 PSA
Weighted average life (in years)	7.55	6.35
Weighted average discount rate	11.00%	9.00%