Note 5: Mortgage Banking and Servicing Rights

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balance of mortgage loans serviced for others approximated $899.7 million and $772.5 million at December 31, 2016 and 2015, respectively. Contractually specified servicing fees of approximately $2.1 million and $1.8 million were included in mortgage loan servicing fees in the income statement for the years ended December 31, 2016 and 2015, respectively.

The following table summarizes mortgage servicing rights capitalized and related amortization, along with activity in the related valuation allowance:

($ in thousands)	2016			2015

Carrying amount, beginning of year	$	7,152		$	5,704
Mortgage servicing rights capitalized during the year		2,542			2,214
Mortgage servicing rights amortization during the year		(1,340	)		(882	)
Net change in valuation allowance		68			116
Carrying amount, end of year	$	8,422		$	7,152

Valuation allowance:
Beginning of year	$	296		$	412
Reduction		(68	)		(116	)

End of year	$	228		$	296

Fair Value, beginning of period	$	7,760		$	6,358
Fair Value, end of period	$	9,656		$	7,760