Mortgage Banking

6 Months Ended

Jun. 30, 2015

Mortgage Banking [Abstract]

Mortgage Banking [Text Block]

9. Mortgage Banking

Net revenues from the sales and servicing of mortgage loans consisted of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(In Thousands)				(In Thousands)
Gain from sale of mortgage loans	$	1,246	$	986	$	2,531	$	1,628
Mortgage loans servicing revenue (expense):
Mortgage loans servicing revenue		852		878		1,727		1,782
Amortization of mortgage servicing rights		(446)		(368)		(857)		(660)
Mortgage servicing rights valuation adjustments		141		44		167		37
		547		554		1,037		1,159
Net revenue from sale and servicing of mortgage loans	$	1,793	$	1,540	$	3,568	$	2,787

The unpaid principal balance of residential mortgage loans serviced for third parties was $1.34 billion at June 30, 2015 and $1.35 billion at December 31, 2014.

Activity for capitalized mortgage servicing rights and the related valuation allowance follows for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(In Thousands)				(In Thousands)
Mortgage servicing assets:
Balance at beginning of period	$	9,832	$	10,048	$	9,923	$	10,133
Loans sold, servicing retained		486		313		806		520
Amortization		(446)		(368)		(857)		(660)
Carrying value before valuation allowance at end of period		9,872		9,993		9,872		9,993
Valuation allowance:
Balance at beginning of period		(885)		(1,034)		(911)		(1,027)
Impairment recovery (charges)		141		44		167		37
Balance at end of period		(744)		(990)		(744)		(990)
Net carrying value of MSRs at end of period	$	9,128	$	9,003	$	9,128	$	9,003
Fair value of MSRs at end of period	$	9,574	$	9,584	$	9,574	$	9,584

Amortization of mortgage servicing rights is computed based on payments and payoffs of the related mortgage loans serviced. Estimates of future amortization expense are not easily estimable.

The Company established an accrual for secondary market buy-back losses that resulted in a reversal of $72,000 for the first six months of 2015 mainly due to no actual losses being recorded in 2015. In the first six months of 2014, the Company accrued $184,000 which was mostly offset by reversing $67,000 of accrued expenses related to the Freddie Mac post-foreclosure review that began in the third quarter of 2013 and was reversed in 2014 with no losses resulting.