SERVICING RIGHTS

9 Months Ended

Sep. 30, 2015

At September 30, 2015 and December 31, 2014, the Company serviced mortgage loans for others totaling $1.44 billion and $1.37 billion, respectively, and serviced United States Small Business Administration (“SBA”) loans for others totaling $93.6 million and $114.4 million, respectively.

The fair value of mortgage servicing rights at September 30, 2015 and December 31, 2014 was determined using a weighted average discount rate of 8.78% and 9.17%, respectively, and a weighted average conditional prepayment rate (“CPR”) of 11.86% and 12.70%, respectively. The fair value of SBA servicing rights at September 30, 2015 and December 31, 2014 was determined using a weighted average discount rate of 12.59% and 11.80%, respectively, and a weighted average CPR of 6.45% and 6.33%, respectively.

Changes in mortgage and SBA servicing rights for the three and nine months ended September 30, 2015 and 2014 were as follows:



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(dollars in thousands)	2015			2014		2015		2014
Balance, beginning of period	$	19,041		18,784		18,013		18,854
Originated servicing rights	873			770		2,865		1,802
Purchased servicing rights	36			53		112		84
Change in fair value resulting from changes in valuation inputs or assumptions used in valuation model ⁽¹⁾	(498		)	231		85		273
Other changes in fair value ⁽²⁾	(1,404		)	(732	)	(3,027	)	(1,907	)
Balance, end of period	$	18,048		19,106		18,048		19,106

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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.

- 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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