NOTE 6 – SERVICING RIGHTS

Mortgage Banking Activities. At September 30, 2011 and December 31, 2010, First Bank serviced mortgage loans for others totaling $1.27 billion. Changes in mortgage servicing rights for the three and nine months ended September 30, 2011 and 2010 were as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2011			2010		2011		2010
	(dollars expressed in thousands)
Balance, beginning of period	$	11,739		11,443		12,150		12,130
Originated mortgage servicing rights		617		1,262		2,230		2,721
Change in fair value resulting from changes in valuation inputs or
assumptions used in valuation model (1)		(3,497	)	(2,443	)	(4,572	)	(3,465	)
Other changes in fair value (2)		(470	)	(858	)	(1,419	)	(1,982	)
Balance, end of period	$	8,389		9,404		8,389		9,404
____________________

(1)	The change in fair value resulting from changes in valuation inputs or assumptions used in valuation model primarily reflects the change in discount rates and prepayment speed assumptions, primarily due to changes in interest rates.
(2)	Other changes in fair value reflect changes due to the collection/realization of expected cash flows over time.

Other Servicing Activities. At September 30, 2011 and December 31, 2010, First Bank serviced United States Small Business Administration (SBA) loans for others totaling $182.8 million and $200.4 million, respectively. Changes in SBA servicing rights for the three and nine months ended September 30, 2011 and 2010 were as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2011			2010		2011		2010
	(dollars expressed in thousands)
Balance, beginning of period	$	7,087		7,823		7,432		8,478
Originated SBA servicing rights		—		—		—		63
Change in fair value resulting from changes in valuation inputs or
assumptions used in valuation model (1)		107		100		333		524
Other changes in fair value (2)		(510	)	(174	)	(1,081	)	(1,316	)
Balance, end of period	$	6,684		7,749		6,684		7,749
____________________

(1)	The change in fair value resulting from changes in valuation inputs or assumptions used in valuation model primarily reflects the change in discount rates and prepayment speed assumptions, primarily due to changes in interest rates.
(2)	Other changes in fair value reflect changes due to the collection/realization of expected cash flows over time.