OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS

At December 31, 2013, intangible assets consisted primarily of CDI, which are amounts recorded in business combinations or deposit purchase transactions related to the value of transaction-related deposits and the value of the customer relationships associated with the deposits.

The Company amortizes CDI over their estimated useful life and reviews them at least annually for events or circumstances that could impact their recoverability. The CDI assets shown in the table below represent the value ascribed to the long-term deposit relationships acquired in three separate bank acquisitions during 2007 and a single branch acquisition in 2013. These intangible assets are being amortized using an accelerated method over estimated useful lives of three to eight years. The CDI assets are not estimated to have a significant residual value. Intangible assets are amortized over their useful lives and are also reviewed for impairment.

The following table summarizes the changes in the Company’s core deposit intangibles and other intangibles for the years ended December 31, 2011, 2012 and 2013 (in thousands):



	CDI			Other			Total
Balance, December 31, 2010	$	8,598		$	11		$	8,609
Amortization	(2,276		)	(2		)	(2,278		)
Balance, December 31, 2011	6,322			9			6,331
Amortization	(2,092		)	(9		)	(2,101		)
Balance, December 31, 2012	4,230			—			4,230
Additions through acquisition	160			—			160
Amortization	(1,941		)	—			(1,941		)
Balance, December 31, 2013	$	2,449		$	—		$	2,449

Estimated amortization expense in future years with respect to existing intangibles as of December 31, 2013 (in thousands):



Year Ended	CDI
December 31, 2014	$	1,800
December 31, 2015	640
December 31, 2016	9
Net carrying amount	$	2,449

Mortgage servicing rights are reported in other assets. Mortgage servicing rights are initially reported at fair value and are amortized in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Mortgage servicing rights are subsequently evaluated for impairment based upon the fair value of the rights compared to the amortized cost (remaining unamortized initial fair value). If the fair value is less than the amortized cost, a valuation allowance is created through an impairment charge to servicing fee income. However, if the fair value is greater than the amortized cost, the amount above the amortized cost is not recognized in the carrying value. In 2013, the Company recorded a recovery of $1.3 million in previously recognized impairment charges against mortgage servicing rights. In 2012, the Company recorded $400,000 in impairment charges against mortgage servicing rights. In 2011, the Company did not record any impairment charges or recoveries. Loans serviced for others totaled $1.216 billion and $1.031 billion at December 31, 2013 and 2012, respectively. Custodial accounts maintained in connection with this servicing totaled $5.7 million and $5.0 million at December 31, 2013 and 2012, respectively.

An analysis of the mortgage servicing rights for the years ended December 31, 2013, 2012 and 2011 is presented below (in thousands):



	Years Ended December 31
	2013			2012			2011
Balance, beginning of the year	$	6,244		$	5,584		$	5,441
Amounts capitalized	2,913			3,662			1,928
Amortization ⁽¹⁾	(2,371		)	(2,602		)	(1,785		)
Valuation adjustments in the period	1,300			(400		)	—
Balance, end of the year ⁽²⁾	$	8,086		$	6,244		$	5,584


⁽¹⁾	Amortization of mortgage servicing rights is recorded as a reduction of loan servicing income and any unamortized balance is fully written off if the loan repays in full.


⁽²⁾	Balances as of December 31, 2012 and 2011 are net of valuation allowances of $1.3 million and $900,000, respectively.