Mortgage Servicing Rights ("MSRs")

3 Months Ended

Mar. 31, 2016

Mortgage Servicing Rights (“MSRs”)

The Bank sells a predominant share of the fixed rate mortgage loans it originates into the secondary market while retaining servicing of such loans. MSRs included in other assets in the condensed consolidated financial statements as of March 31, 2016 and December 31, 2015 are accounted for at the lower of origination value less accumulated amortization or current fair value. The net carrying value of MSRs at March 31, 2016 and December 31, 2015 was $2.2 million. There was no valuation allowance at March 31, 2016 or December 31, 2015.

The following table presents activity in MSRs for the periods shown (dollars in thousands):



	Three months ended March 31,
	2016			2015
Balance at beginning of period	$	2,186		$	2,248
Additions	128			226
Amortization	(163		)	(187		)
Change in valuation allowance	—			—
Balances at end of period	$	2,151		$	2,287

Mortgage banking income, net, consisted of the following for the periods shown (dollars in thousands):



	Three months ended March 31,
	2016			2015
Origination and processing fees	$	58		$	258
Gain on sales of mortgage loans, net	439			552
MSR valuation allowance	—			—
Servicing fees	161			165
Amortization	(163		)	(187		)
Mortgage banking income, net	$	495		$	788

- 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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