MORTGAGE SERVICING RIGHTS

3 Months Ended

Mar. 31, 2012

Mortgage Servicing Rights

MORTGAGE SERVICING RIGHTS

NOTE 4 - MORTGAGE SERVICING RIGHTS

Loans serviced for others are not included in the Consolidated Balance Sheets. The balance of loans serviced for others and the fair value of mortgage servicing rights are as follows:

March 31, (in thousands)	2012		2011
Residential mortgage loans serviced for others	$	125,086	$	101,636
Fair value of mortgage servicing rights		754		948

Changes in mortgage servicing rights are as follows:

	Three months
Periods ended March 31, (in thousands)	2012			2011
Loan Servicing Rights
Balance, beginning of period	$	772		$	683
Originated		177			77
Amortization (1)		(77	)		(59	)
Balance, end of period		872			701
Valuation Allowance
Balance, beginning of period		(22	)		(10	)
(Increase) decrease in impairment reserve (1)		(92	)		2
Balance, end of period		(114	)		(8	)
Loan servicing rights, net	$	758		$	693

(1) Amortization expense and changes in the impairment reserve are recorded in loan servicing fee income.