XML 90 R13.htm IDEA: XBRL DOCUMENT v2.4.0.6
Servicing
 12 Months Ended
Dec. 31, 2012
Servicing [Abstract]  
Servicing

Note 6—Servicing

Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of loans serviced for others were $280 and $273 million at December 31, 2012 and 2011, respectively.

The balance of capitalized servicing rights included in other assets at December 31, 2012 and 2011, was $2.1. The capitalized addition of servicing rights is included in net gain on sale of loans on the consolidated statement of income. The capitalized additions are as shown in the table following.

The fair market value of the capitalized servicing rights as of December 31, 2012 and 2011 was $2.4 million and $2.8 million, respectively. The valuations were completed by stratifying the loans into like groups based on loan type and term. Impairment was measured by estimating the fair value of each stratum, taking into consideration an estimated level of prepayment based upon current market conditions. An average constant prepayment rate of 18.9 and 12.6 were utilized for 2012 and 2011, respectively. All stratums showed positive values compared to carrying value using a discount yield of 7.75% for 2012 and for 2011.

The following summarizes mortgage servicing rights capitalized and amortized during each year:

 

                 
    (In Thousands)  
    2012     2011  

Beginning Year

   $ 2,071     $ 2,178  

Capitalized Additions

     760       391  

Amortization

     (768 )      (498 ) 

Valuation Allowance

     —         —    
   

 

 

    

 

 

  

End of Year

   $ 2,063     $ 2,071