SERVICING RIGHTS

9 Months Ended

Sep. 30, 2014

Mortgage Banking Activities. At September 30, 2014 and December 31, 2013, the Company serviced mortgage loans for others totaling $1.35 billion and $1.33 billion, respectively. Changes in mortgage servicing rights for the three and nine months ended September 30, 2014 and 2013 were as follows:



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(dollars in thousands)	2014			2013		2014		2013
Balance, beginning of period	$	14,103		12,341		14,211		9,152
Originated mortgage servicing rights	770			942		1,802		3,059
Purchased mortgage servicing rights	53			—		84		—
Change in fair value resulting from changes in valuation inputs or assumptions used in valuation model ⁽¹⁾	124			1,160		(185	)	3,467
Other changes in fair value ⁽²⁾	(432		)	(593	)	(1,294	)	(1,828	)
Balance, end of period	$	14,618		13,850		14,618		13,850

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(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, 2014 and December 31, 2013, the Company serviced United States Small Business Administration (SBA) loans for others totaling $119.8 million and $139.1 million, respectively. Changes in SBA servicing rights for the three and nine months ended September 30, 2014 and 2013 were as follows:



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(dollars in thousands)	2014			2013		2014		2013
Balance, beginning of period	$	4,681		5,192		4,643		5,640
Originated SBA servicing rights	—			—		—		—
Change in fair value resulting from changes in valuation inputs or assumptions used in valuation model ⁽¹⁾	107			(127	)	458		(163	)
Other changes in fair value ⁽²⁾	(300		)	(157	)	(613	)	(569	)
Balance, end of period	$	4,488		4,908		4,488		4,908

____________________


(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.

- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

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