MORTGAGE OPERATIONS (Tables)

9 Months Ended

Sep. 30, 2013

Schedule of assumptions used to estimate fair value of mortgage servicing rights

Key assumptions used in measuring the fair value of MSR as of September 30, 2013 were as follows:

	September 30, 2013

Constant prepayment rate		11.27	%
Discount rate		10.06	%
Weighted average life (years)		6.37

Schedule of mortgage servicing rights assets

The following table summarizes the Company’s mortgage servicing rights assets as of September 30, 2013 and December 31, 2012. Mortgage servicing rights are included in Interest Receivable and Other Assets in the consolidated balance sheets.

	(in thousands)
	December 31, 2012			Additions		Reductions			September 30, 2013

Mortgage servicing rights	$	1,760		$	543	$	(339	)	$	1,964
Valuation allowance		(536	)		—		536			—
Mortgage servicing rights, net of valuation allowance	$	1,224		$	543	$	197		$	1,964

- Definition

Tabular disclosure of all information related to the key inputs and assumptions (including, at a minimum, but not limited to, and if applicable, quantitative information about discount rates, expected prepayments including the expected weighted-average life of prepayable financial assets, and anticipated credit losses) used in measuring the fair value of assets or liabilities that relate to the transferor's continuing involvement with transferred financial assets, as of the balance sheet date.

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- Definition

Tabular disclosure of the activity in the balance of servicing assets subsequently measured at amortized value (including a description of where changes in carrying value are reported in the statement of income for each period for which results of operations are presented), including but not limited to, the following: beginning and ending balances, additions (through purchases of servicing assets and servicing assets that result from transfers of financial assets), disposals, amortization, application of valuation allowances, other-than-temporary impairments, and other changes that affect the balance along with a description of those changes.

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