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Loan Servicing
 6 Months Ended
Jun. 30, 2012
Transfers and Servicing of Financial Assets [Abstract]  
Loan Servicing
Loan Servicing
 
Park serviced sold mortgage loans of $1.3 billion at June 30, 2012, compared to $1.35 billion at December 31, 2011 and $1.42 billion at June 30, 2011. At June 30, 2012, $20.3 million of the sold mortgage loans were sold with recourse compared to $32.2 million at June 30, 2011. Management closely monitors the delinquency rates on the mortgage loans sold with recourse. At June 30, 2012, management determined that no liability was deemed necessary for these loans.
 
When Park sells mortgage loans with servicing rights retained, servicing rights are initially recorded at fair value. Park selected the “amortization method” as permissible within GAAP, whereby the servicing rights capitalized are amortized in proportion to and over the period of estimated future servicing income of the underlying loan. At the end of each reporting period, the carrying value of mortgage servicing rights (“MSRs”) is assessed for impairment with a comparison to fair value. MSRs are carried at the lower of their amortized cost or fair value.
 
Activity for MSRs and the related valuation allowance follows:
 
 
 
Three months ended June 30,
 
Six months ended June 30,
(in thousands)
 
2012
 
2011
 
2012
 
2011
Mortgage servicing rights:
 
 

 
 
 
 
 
 
Carrying amount, net, beginning of period
 
$
8,975

 
$
10,365

 
$
9,301

 
$
10,488

Additions
 
697

 
309

 
1,259

 
638

Amortization
 
(817
)
 
(415
)
 
(1,705
)
 
(935
)
Changes in valuation allowance
 
(46
)
 
—

 
(46
)
 
68

 
 
 
 
 
 
 
 
 
Carrying amount, net, end of period
 
$
8,809

 
$
10,259

 
$
8,809

 
$
10,259

 
 
 
 
 
 
 
 
 
Valuation allowance:
 
 

 
 
 
 
 
 
Beginning of period
 
$
1,021

 
$
680

 
$
1,021

 
$
748

Changes in valuation allowance
 
46

 
—

 
46

 
(68
)
End of period
 
$
1,067

 
$
680

 
$
1,067

 
$
680


 
Servicing fees included in other service income were $1.0 million and $2.2 million for the three and six months ended June 30, 2012. For the three and six months ended June 30, 2011, servicing fees included in other service income were $1.4 million and $2.8 million.