Mortgage Servicing Rights

12 Months Ended

Dec. 31, 2016

The following table details the activity in the Company's mortgage servicing rights ("MSR") for the year indicated:



(In thousands)	2016			2015

Balance, beginning of period		$1,654			$1,010
Additions for new MSR capitalized	3,029			802
Changes in fair value:
Due to changes in model inputs of assumptions ⁽¹⁾	(214		)	29
Other ⁽²⁾	(312		)	(187		)
Carrying value, December 31		$4,157			$1,654

⁽¹⁾Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.

⁽²⁾Represents changes due to collection/realization of expected cash flows over time.

The following table details information related to our serviced mortgage loan portfolio as of December 31, 2016 and 2015:

The Company recognized servicing fees of $675,000, $261,000 and $203,000 during 2016, 2015 and 2014, respectively, as a component of other noninterest income in the Company's Consolidated Statements of Income.

The following table outlines the key assumptions used in measuring the fair value of mortgage servicing rights as of December 31, 2016 and 2015:



	2016		2015

Constant prepayment rate	11.58	%	10.54	%
Discount rate	9.25	%	9.10	%

At December 31, 2016 and 2015, the Company serviced $456.4 million and $263.0 million of commercial and mortgage loans, respectively, which had been sold to various investors without recourse. At December 31, 2016 and 2015, the Company held $2.7 million and $1.4 million, respectively, in trust for these loans for the payment of such items as taxes, insurance, and maintenance costs.

- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

+ References + Details

(In thousands)

December 31, 2016

December 31, 2015

Balance of loans serviced for others

MSR as a percentage of serviced loans