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


(Dollars in thousands)
	2023		2022		2021
Loans originated for resale, net of principal payments	$	56,085	$	71,829	$	197,387
Proceeds from loan sales	$	57,342	$	77,681	$	205,398
Net gains on sales of loans held for sale	$	1,954	$	2,343	$	6,776
Loan servicing fees, net of amortization	$	211	$	175	$	(163	)

Net gains on sales of loans held for sale include capitalization of loan servicing rights. Loans serviced for others are not reported as assets in the accompanying consolidated balance sheets. The unpaid principal balances of these loans were $495.7 million and $488.6 million at December 31, 2023 and 2022, respectively. The Bank maintains custodial escrow balances in connection with these serviced loans; however, such escrows were immaterial at December 31, 2023 and 2022.

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


(Dollars in thousands)
	2023			2022			2021
Balance, beginning of year	$	4,322		$	4,667		$	3,967
Capitalized		820			1,007			1,961
Amortization		(1,308	)		(1,352	)		(1,635	)
Market valuation allowance change		-			-			374
Balance, end of year	$	3,834		$	4,322		$	4,667

The fair value of loan servicing rights was $5.6 million, $5.9 million and $5.5 million as of December 31, 2023, 2022 and 2021, respectively. Valuation allowances of $0 were recorded at December 31, 2023, 2022 and December 31, 2021. The fair value of the Bank’s servicing rights at December 31, 2023 was determined using a discount rate of 9.5%-10.5% and prepayment speeds ranging from 5.7% to 7.5%. The fair value of the Bank’s servicing rights at December 31, 2022 was determined using a discount rate of 8.00% and prepayment speeds ranging from 5.2% to 6.7%. The fair value of the Bank’s servicing rights at December 31, 2021 was determined using a discount rate of 8.00% and prepayment speeds ranging from 5% to 27%.