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Loan Servicing
 6 Months Ended
Jun. 30, 2019
Transfers and Servicing of Financial Assets [Abstract]  
Loan Servicing Loan Servicing
 
Park serviced sold mortgage loans of $1.39 billion at both December 31, 2018 and June 30, 2019 and $1.38 billion at June 30, 2018. At June 30, 2019, $2.4 million of the sold mortgage loans were sold with recourse, compared to $2.5 million at December 31, 2018 and $2.6 million at June 30, 2018. Management closely monitors the delinquency rates on the mortgage loans sold with recourse. At June 30, 2019 and December 31, 2018, management had established reserves of $27,000 and $60,000, respectively, to account for expected losses on loan repurchases.
 
When Park sells mortgage loans with servicing rights retained, these servicing rights are initially recorded at fair value. Park selected the “amortization method” as permissible within U.S. GAAP, whereby the servicing rights capitalized are amortized in proportion to and over the period of estimated future servicing income with respect to the underlying loan. At the end of each reporting period, the carrying value of MSRs is assessed for impairment with a comparison to fair value. MSRs are carried at the lower of their amortized cost or fair value. The amortization of MSRs is included within other service income in the consolidated condensed statements of income.

Activity for MSRs and the related valuation allowance follows:
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
(In thousands)
 
2019
 
2018
 
2019
 
2018
Mortgage servicing rights:
 
 
 
 
 
 
 
 
Carrying amount, net, beginning of period
 
$
10,082

 
$
9,969

 
$
10,178

 
$
9,688

Additions
 
479

 
448

 
741

 
776

Amortization
 
(425
)
 
(417
)
 
(726
)
 
(769
)
Changes in valuation allowance
 
(32
)
 
77

 
(89
)
 
382

Carrying amount, net, end of period
 
$
10,104

 
$
10,077

 
$
10,104

 
$
10,077

 
 
 
 
 
 
 
 
 
Valuation allowance:
 
 
 
 
 
 
 
 
Beginning of period
 
$
289

 
$
325

 
$
232

 
$
630

Changes in valuation allowance
 
32

 
(77
)
 
89

 
(382
)
End of period
 
$
321

 
$
248

 
$
321

 
$
248


 
Servicing fees included in other service income were $0.9 million for each of the three months ended June 30, 2019 and 2018 and were $1.8 million for each of the six months ended June 30, 2019 and 2018.