Mortgage Servicing Rights

Loans serviced for Freddie Mac are not included in the accompanying consolidated balance sheets. The principal amounts of those loans at September 30, 2014, 2013 and 2012 were $327,594,000, $325,726,000 and $304,872,000, respectively.

The following is an analysis of the changes in MSRs for the years ended September 30, 2014, 2013 and 2012 (dollars in thousands):



	2014			2013			2012
Balance, beginning of year	$	2,266		$	2,011		$	2,108
Additions	387			728			698
Amortization	(969		)	(948		)	(805		)
Valuation allowance	—			—			(216		)
Recovery of valuation allowance	—			475			226

Balance, end of year	$	1,684		$	2,266		$	2,011

At September 30, 2014, 2013 and 2012, the estimated fair value of MSRs totaled $3,204,000, $3,129,000 and $2,011,000, respectively. The MSRs' fair values for 2014, 2013 and 2012 were estimated using discounted cash flow analyses with average discount rates of 10.04%, 10.04% and 10.07%, respectively, and average prepayment speed factors of 164, 177 and

330, respectively. At September 30, 2014 and 2013 there were no valuation allowances on MSRs. At September 30, 2012 there was a valuation allowance on MSRs of $475,000.