Intangible Assets

6 Months Ended

Jun. 30, 2016

(5)

Intangible Assets

Mortgage Servicing Rights

At June 30, 2016, the Company was servicing approximately $304.7 million of loans sold to the secondary market compared to $312.1 million at December 31, 2015, and $312.6 million at June 30, 2015. Mortgage loan servicing fees, reported as non-interest income, earned on loans sold were $211,000 and $421,000 for the three and six months ended June 30, 2016, respectively, compared to $228,000 and $442,000 for the three and six months ended June 30, 2015, 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)	2016			2015			2016			2015
Balance at beginning of period	$	2,745		$	2,662		$	2,847		$	2,762
Originated mortgage servicing rights		63			107			117			227
Changes in fair value:
Due to change in model inputs and assumptions (1)		(142	)		128			(145	)		87
Other changes in fair value (2)		(155	)		(170	)		(308	)		(349	)
Balance at end of period	$	2,511		$	2,727		$	2,511		$	2,727

(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, 2016 and 2015:

	Six Months Ended June 30,
	2016			2015
Weighted average constant prepayment rate		12.16	%		10.66	%
Weighted average note rate		3.90	%		3.92	%
Weighted average discount rate		9.19	%		9.34	%
Weighted average expected life (in years)		5.10			5.70

- 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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