7. MORTGAGE SERVICING ACTIVITIES AND MORTGAGE BANKING INCOME

At December 31, 2015, 2014 and 2013, the Bank was servicing loans for others having principal balances outstanding of approximately $23,109, $24,253, and $247,263, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors, paying taxes and insurance and processing foreclosure. In connection with loans serviced for others, the Bank held borrowers' escrow balances of approximately $272 and $295 at December 31, 2015 and 2014, respectively.

There are no restrictions on the Company's consolidated assets or liabilities related to loans sold with servicing rights retained. Upon sale of these loans, the Company recorded an MSR, and has elected to account for the MSR under the "amortization method" prescribed under GAAP. The aggregate MSR balance was $239 at December 31, 2015, $351 at December 31, 2014 and $628 at December 31, 2013.

Net mortgage banking income presented in the consolidated statements of operations was comprised of the following items:

	Year Ended December 31,
	2015		2014		2013
Gain on the sale of loans originated for sale	$	-	$	27	$	13
Credit to reduce the liability for the First Loss Position		-		1,040		305
Mortgage banking fees		183		158		155
Net mortgage banking income	$	183	$	1,225	$	473