Note 5. Loan Servicing

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of these loans as of December 31, 2015 and 2014, were $317,047 and $332,075, respectively, and consist of one- to four-family residential real estate loans. These loans are serviced primarily for the Federal Home Loan Mortgage Corporation, Federal Home Loan Bank and Federal National Mortgage Association.

Custodial escrow balances maintained in connection with the foregoing loan servicing, and included in advances from borrowers for taxes and insurance, were $2,310 and $2,347 at December 31, 2015 and 2014, respectively.

Mortgage servicing rights are summarized as follows for the years ended December 31, 2015 and 2014:

	2015			2014

Balance at beginning of year, net	$	1,886		$	1,952
Mortgage servicing rights capitalized		343			258
Amortization expense		(351	)		(324	)

Valuation provision		(15	)		-
Balance at end of year, net	$	1,863		$	1,886

The estimated fair value of mortgage servicing rights was $2,293 and $2,578 at December 31, 2015 and 2014, respectively. At December 31, 2015 and 2014, the valuation allowance was $0 and $15, respectively.

The following table indicates the estimated future amortization expense for mortgage servicing rights. The estimated amortization expense is based on existing asset balances. The timing of amortization expense actually recognized in future periods may differ significantly depending upon prepayment speeds affected by economic conditions, mortgage interest rates, and other matters.

Years Ending December 31,

2016	$	368
2017		330
2018		294
2019		258
2020		224
Thereafter		389
	$	1,863