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 $1,084.7 million and $994.9 million at December 31, 2018 and 2017, respectively. Contractually specified servicing fees of approximately $2.6 million and $2.4 million were included in mortgage loan servicing fees in the income statement for the years ended December 31, 2018 and 2017, respectively.

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

($ in thousands)	2018			2017

Carrying amount, beginning of year	$	9,907		$	8,422
Mortgage servicing rights capitalized during the year		2,749			2,540
Mortgage servicing rights amortization during the year		(1,230	)		(1,132	)
Net change in valuation allowance		(61	)		77
Carrying amount, end of year	$	11,365		$	9,907

Valuation allowance:
Beginning of year	$	151		$	228
Increase (reduction)		61			(77	)
End of year	$	212		$	151

Fair value, beginning of period	$	11,338		$	9,656
Fair value, end of period	$	12,672		$	11,338