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Intangible Assets
6 Months Ended
Jun. 30, 2014
Intangible Assets  
Intangible Assets
(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 and six months June 30, 2013 are as follows:

 

    Three Months Ended     Six Months Ended  
(in thousands)   June 30, 2013     June 30, 2013  
Balance at beginning of period   $ 34     $ 135  
Additions     0       0  
Amortization     (34 )     (135 )
Balance at end of period   $ 0     $ 0  

 

Mortgage Servicing Rights

 

At June 30, 2014, the Company was servicing approximately $315.3 million of loans sold to the secondary market compared to $322.5 million at December 31, 2013, and $323.2 million at June 30, 2013. Mortgage loan servicing fees, reported as non-interest income, earned on loans sold were $223,000 and $446,000 for the three and six months ended June 30, 2014, respectively, compared to $243,000 and $459,000 for the three and six months ended June 30, 2013, respectively.

 

The table below presents changes in mortgage servicing rights (MSRs) for the periods indicated.

 

    Three Months Ended June 30,     Six Months Ended June 30,  
(in thousands)   2014     2013     2014     2013  
                         
Balance at beginning of period   $ 3,040     $ 2,689     $ 3,036     $ 2,549  
Originated mortgage servicing rights     72       163       122       361  
Changes in fair value:                                
Due to change in model inputs and assumptions (1)     (36 )     229       70       382  
Other changes in fair value (2)     (165 )     (208 )     (317 )     (419 )
Balance at end of period   $ 2,911     $ 2,873     $ 2,911     $ 2,873  

 

(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 six months ended June 30, 2014 and 2013:

 

    Six Months Ended June 30,  
    2014     2013  
Weighted average constant prepayment rate     9.69 %     16.02 %
Weighted average note rate     4.00 %     4.04 %
Weighted average discount rate     9.15 %     8.05 %
Weighted average expected life (in years)     6.00       4.30