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Mortgage Banking and Servicing Rights (Tables)
 12 Months Ended
Dec. 31, 2014
Mortgage Banking and Servicing Rights [Abstract]  
Components of Mortgage Banking Income
The following table presents the components of mortgage banking income:

(in thousands)
Year Ended December 31
 
2014
  
2013
  
2012
 
Net gain on sale of loans held for sale
 
$
1,468
  
$
3,098
  
$
2,562
 
Net loan servicing income (expense)
            
Servicing fees
  
1,129
   
1,121
   
1,083
 
Late fees
  
112
   
98
   
83
 
Ancillary fees
  
149
   
368
   
382
 
Fair value adjustments
  
(830
)
  
206
   
(559
)
Net loan servicing income
  
560
   
1,793
   
989
 
Mortgage banking income
 
$
2,028
  
$
4,891
  
$
3,551
 
Activity for Capitalized Mortgage Servicing Rights Using Fair Value Method
Activity for capitalized mortgage servicing rights using the fair value method is as follows:

(in thousands)
 
2014
  
2013
  
2012
 
Fair value of MSRs, beginning of period
 
$
3,424
  
$
2,364
  
$
2,282
 
New servicing assets created
  
374
   
854
   
641
 
Change in fair value during the period due to:
            
Time decay (1)
  
(162
)
  
(159
)
  
(116
)
Payoffs (2)
  
(202
)
  
(423
)
  
(478
)
Changes in valuation inputs or assumptions (3)
  
(466
)
  
788
   
35
 
Fair value of MSRs, end of period
 
$
2,968
  
$
3,424
  
$
2,364
 

(1)
Represents decrease in value due to regularly scheduled loan principal payments and partial loan paydowns.
(2)
Represents decrease in value due to loans that paid off during the period.
(3)
Represents change in value resulting from market-driven changes in interest rates.