9.	Mortgage Banking

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

	Three Months Ended March 31,
	2018		2017
	(In Thousands)
Gain from sale of mortgage loans	$	1,080	$	1,083
Mortgage loans servicing revenue (expense):
Mortgage loans servicing revenue		944		934
Amortization of mortgage servicing rights		(319)		(312)
Mortgage servicing rights valuation adjustments		37		33
		662		655

Net revenue from sale and servicing of mortgage loans	$	1,742	$	1,738

The unpaid principal balance of residential mortgage loans serviced for third parties was $1.39 billion at March 31, 2018, and $1.39 billion at December 31, 2017.

Activity for capitalized mortgage servicing rights and the related valuation allowance follows for the three months ended March 31, 2018 and 2017:

	March 31, 2018		March 31, 2017
	(In Thousands)
Mortgage servicing assets:
Balance at beginning of period	$	10,240	$	10,117
Loans sold, servicing retained		324		356
Amortization		(319)		(312)
Carrying value before valuation allowance at end of period		10,245		10,161

Valuation allowance:
Balance at beginning of period		(432)		(522)
Impairment (expense) recovery		37		33
Balance at end of period		(395)		(489)
Net carrying value of MSRs at end of period	$	9,850	$	9,672
Fair value of MSRs at end of period	$	10,280	$	10,013

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 has established an accrual for secondary market buy-back activity. A liability of $43,000 was accrued at both March 31, 2018, and December 31, 2017, respectively. There was no accrual recorded in the first quarter 2018 while a credit was recognized related to the accrual of $28,000 in the first quarter 2017. The activity in the first quarters of 2018 and 2017 was due to no actual losses being recorded.