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Mortgage Banking
 12 Months Ended
Dec. 31, 2014
Mortgage Banking [Abstract]  
Mortgage Banking

Note 4 – Mortgage Banking

 

Activity in secondary market loans during the year was as follows:

 

(Dollars in thousands)      
    2014    2013    2012 
Loans originated for resale, net of principal payments  $29,850   $42,906   $44,889 
Proceeds from loan sales   29,561    45,204    45,622 
Net gains on sales of loans held for sale   1,023    1,566    1,634 
Loan servicing fees, net of amortization   166    167    131 

 

Loans serviced for others are not reported as assets in the accompanying consolidated balance sheets. The unpaid principal balances of these loans were $91.4 million and $98.3 million at December 31, 2014 and 2013, respectively. The Bank maintains custodial escrow balances in connection with these serviced loans; however, such escrows were immaterial at December 31, 2014 and 2013.

 

Activity for loan servicing rights (included in other assets) was as follows:

 

(Dollars in thousands)         
    2014    2013    2012 
Balance, beginning of year  $544   $473   $318 
Capitalized   73    211    289 
Amortization   (128)   (140)   (134)
Balance, end of year  $490   $544   $473 

 

The fair value of loan servicing rights was $942,000 and $958,000 as of December 31, 2014 and 2013, respectively. Consequently, a valuation allowance was not necessary at year-end 2014 or 2013. The fair value of servicing rights at December 31, 2014 was determined using a discount rate of 6.20% and prepayment speeds ranging from 7% to 13%. The fair value of servicing rights at December 31, 2013 was determined using a discount rate of 8.18% and prepayment speeds ranging from 7% to 23%.