Mortgage Servicing Rights ("MSRs")

3 Months Ended

Mar. 31, 2017

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. Mortgage Servicing Rights (“MSRs”), included in other assets in the condensed consolidated financial statements as of March 31, 2017 and December 31, 2016, 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, 2017 and December 31, 2016 was $2.4 million and $2.3 million, respectively. There was no valuation allowance at March 31, 2017 or December 31, 2016.

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



	Three months ended March 31,
	2017			2016
Balance at beginning of period	$	2,348		$	2,186
Additions	242			128
Amortization	(167		)	(163		)
Balances at end of period	$	2,423		$	2,151

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



	Three months ended March 31,
	2017			2016
Origination and processing fees	$	103		$	58
Gain on sales of loans, net	986			439
Servicing fees	225			161
Amortization	(167		)	(163		)
Mortgage banking income, net	$	1,147		$	495

- 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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