Intangible Assets

3 Months Ended

Mar. 31, 2014

(5) Intangible Assets

Core Deposit Intangible Asset

Core deposit intangible assets in the amount of $4.8 million were fully amortized as of December 31, 2013. Changes in the net carrying amount of core deposit intangible assets for the three months March 31, 2013 is as follows:

	Three Months Ended
(in thousands)	March 31, 2013
Balance at beginning of period	$	135
Additions	0
Amortization	(101		)
Balance at end of period	$	34

Mortgage Servicing Rights

At March 31, 2014 and December 31, 2013, the Company serviced mortgage loans for others totaling $319.3 million and $322.5 million, respectively. Mortgage loan servicing fees, reported as non-interest income, earned on loans sold were $223,000 and $217,000 for the three months ended March 31, 2014 and 2013, respectively.

The table below presents changes in mortgage servicing rights (MSRs) for the three months ended March 31, 2014 and 2013.

	Three Months Ended March 31,
(in thousands)	2014			2013
Balance at beginning of period	$	3,036		$	2,549
Originated mortgage servicing rights	50			197
Changes in fair value:
Due to change in model inputs and assumptions (1)	106			153
Other changes in fair value (2)	(152		)	(210		)
Balance at end of period	$	3,040		$	2,689

(1) The change in fair value resulting from changes in valuation inputs or assumptions used in the valuation model reflects the change in discount rates and prepayment speed assumptions primarily due to changes in interest rates.

(2) Other changes in fair value reflect changes due to customer payments and passage of time.

The following key data and assumptions were used in estimating the fair value of the Company’s MSRs as of the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014		2013
Weighted average constant prepayment rate	9.07	%	17.63	%
Weighted average note rate	4.01	%	4.12	%
Weighted average discount rate	9.08	%	8.03	%
Weighted average expected life (in years)	6.20		4.10

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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