NOTE 7 – LOAN SERVICING

Mortgage loans serviced for others are not reported as assets. The principal balances of these loans at year-end were as follows:


	2013		2012

Mortgage loans serviced for Freddie Mac	$	8,243	$	10,433

Custodial escrow balances maintained in connection with serviced loans were $166 and $199 at year-end 2013 and 2012.

Activity for mortgage servicing rights and the related valuation allowance follows:


	2013		2012		2011

Servicing rights, net of valuation allowance:
Beginning of year	$	29	$	37		57
Additions		-		-		-
Amortized to expense		(9)		(9)		(23)
Change in valuation allowance		-		1		3
End of year		20		29		37

Valuation allowance:
Beginning of year		1		2		5
Additions expensed		-		-		-
Reductions credited to operations		-		(1)		(3)
End of year	$	1	$	1	$	2