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Mortgage Banking
 6 Months Ended
Jun. 30, 2018
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,
 
 
 
2018
 
 
2017
 
 
2018
 
 
2017
 
 
 
(In Thousands)
 
Gain from sale of mortgage loans
 
$
1,383
 
 
$
1,293
 
 
$
2,464
 
 
$
2,377
 
Mortgage loans servicing revenue (expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage loans servicing revenue
 
 
933
 
 
 
924
 
 
 
1,877
 
 
 
1,858
 
Amortization of mortgage servicing rights
 
 
(350
)
 
 
(403
)
 
 
(669
)
 
 
(715
)
Mortgage servicing rights valuation adjustments
 
 
47
 
 
 
16
 
 
 
83
 
 
 
48
 
 
 
 
630
 
 
 
537
 
 
 
1,291
 
 
 
1,191
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue from sale and servicing of mortgage loans
 
$
2,013
 
 
$
1,830
 
 
$
3,755
 
 
$
3,568
 
 
The unpaid principal balance of residential mortgage loans serviced for third parties was $1.39 billion at June 30, 2018 and December 31, 2017.
 
Activity for capitalized mortgage servicing rights and the related valuation allowance follows for the three and six months ended June 30, 2018 and 2017:
 
 
 
Three Months Ended
June 30,
 
 
Six Months Ended
June 30,
 
 
 
2018
 
 
2017
 
 
2018
 
 
2017
 
 
 
(In Thousands)
 
Mortgage servicing assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
10,245
 
 
$
10,161
 
 
$
10,240
 
 
$
10,117
 
Loans sold, servicing retained
 
 
402
 
 
 
396
 
 
 
726
 
 
 
752
 
Amortization
 
 
(350
)
 
 
(403
)
 
 
(669
)
 
 
(715
)
Carrying value before valuation allowance at end of period
 
 
10,297
 
 
 
10,154
 
 
 
10,297
 
 
 
10,154
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Valuation allowance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
 
(396
)
 
 
(490
)
 
 
(432
)
 
 
(522
)
Impairment recovery (charges)
 
 
47
 
 
 
16
 
 
 
83
 
 
 
48
 
Balance at end of period
 
 
(349
)
 
 
(474
)
 
 
(349
)
 
 
(474
)
Net carrying value of MSRs at end of period
 
$
9,948
 
 
$
9,680
 
 
$
9,948
 
 
$
9,680
 
Fair value of MSRs at end of period
 
$
10,488
 
 
$
9,813
 
 
$
10,488
 
 
$
9,813
 
 
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 June 30, 2018, and December 31, 2017, respectively. There was no expense or credit recognized related to the accrual in the three and six months ended June 30, 2018, while a credit of $28,000 was
recognized in the three months ended June 30, 2017 and $31,000 recognized for the six months
ended June 30, 2017.