MORTGAGE SERVICING RIGHTS

12 Months Ended

Dec. 31, 2011

Mortgage Servicing Rights

MORTGAGE SERVICING RIGHTS

NOTE 6 MORTGAGE SERVICING RIGHTS

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of residential mortgage loans serviced for FHLB and FNMA were $261,811 and $260,097 at December 31, 2011 and 2010, respectively. The following is a summary of changes in the balance of MSRs:

	Originated			Valuation
	MSR			Allowance			Total
Balance at January 1, 2009	$	980		($	195	)	$	785
Additions from originated servicing		825			0			825
Amortization charged to earnings		(576	)		0			(576	)
Change in valuation allowance credited to earnings		0			113			113
Balance at December 31, 2009		1,229			(82	)		1,147
Additions from originated servicing		550			0			550
Amortization charged to earnings		(476	)		0			(476	)
Change in valuation allowance charged to earnings		0			(121	)		(121	)
Balance at December 31, 2010		1,303			(203	)		1,100
Additions from originated servicing		419			0			419
Amortization charged to earnings		(436	)		0			(436	)
Change in valuation allowance credited to earnings		0			122			122
Balance at December 31, 2011	$	1,286		($	81	)	$	1,205

The table below summarizes the components of PSB’s mortgage banking income for the three years ended December 31.

	Years Ending December 31,
	2011			2010			2009
Cash gain on sale of mortgage loans	$	642		$	861		$	956
Originated mortgage servicing rights		419			550			825
Increase (decrease) in accrued mortgage rate lock commitments		3			51			(153	)
Gain on sale of mortgage loans		1,064			1,462			1,628
Mortgage servicing fee income		64 5			578			580
Foreclosure servicing credit losses		(38	)
FHLB credit enhancement fee income		16			29			105
Amortization of mortgage servicing rights		(436	)		(476	)		(576	)
Decrease (increase) in servicing right valuation allowance		122			(121	)		113
Loan servicing fee income, net		309			10			222
Mortgage banking income, net	$	1,373		$	1,472		$	1,850