5. Secondary Market Mortgage Activities

The following summarizes secondary market mortgage activities for the years ended December 31, 2011, 2010, and 2009:


	2011		2010		2009

Loans originated for resale, net of principal pay downs	$	19,927	$	28,706	$	49,717
Proceeds from sales of loans held for sale		23,324		22,585		50,507
Net gains on sales of loans held for sale		638		688		931
Loan servicing fees		349		349		321

Total loans serviced for others was $109,006, $106,265, and $105,386 at December 31, 2011, 2010, and 2009, respectively.

The following summarizes activity for capitalized mortgage servicing rights for the years ended December 31, 2011, 2010, and 2009:


	2011			2010			2009
Balance, beginning of year	$	909		$	876		$	552
Additions		249			256			519
Amortization		(252	)		(223	)		(195	)

Balance, end of year	$	906		$	909		$	876

The fair value of mortgage servicing rights is based on market prices for comparable mortgage servicing contracts, when available, or alternatively based on a valuation model that calculates the present value of estimated future net servicing income. The fair value of mortgage servicing rights was $959, $1,010 , and $1,001 at December 31, 2011, 2010, and 2009, respectively. No valuation allowance is deemed necessary at December 31, 2011, 2010, or 2009. The fair value of interest rate lock commitments was not material at December 31, 2011, 2010, or 2009.