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Loan Servicing Rights (Tables)
 12 Months Ended
Dec. 31, 2016
Transfers and Servicing [Abstract]  
Schedule of activity for loan servicing rights and the related fair value changes
The following table represents the activity for LSRs accounted for under the fair value method and the related fair value changes:
 
 
For the year ended December 31, 2016
(Dollars in thousands)
 
Commercial
Real Estate
 
Mortgage
 
Total
Fair value, beginning of period
 
$
—

 
$
—

 
$
—

Acquired in Talmer Bancorp, Inc. merger
 
365

 
42,097

 
42,462

Additions from loans sold with servicing retained
 
—

 
1,030

 
1,030

Changes in fair value due to:
 
 
 
 
 
 
Reductions from pay downs
 
(17
)
 
(502
)
 
(519
)
Changes in estimates of fair value (1)
 
(4
)
 
5,116

 
5,112

Fair value, end of period
 
$
344

 
$
47,741

 
$
48,085

Principal balance of loans serviced for others that have servicing capitalized
 
$
64,756

 
$
5,235,415

 
$
5,300,171

 
(1) Represents estimated LSR value change resulting primarily from market-driven changes in interest rates and prepayments.
Net carrying value, fair value of mortgage servicing rights and loans Corporation servicing for others
The Corporation continues to account for all other LSRs using the amortization method. The following shows the net carrying value and fair value of LSRs and the total loans that the Corporation is servicing for others accounted for under the amortization method:
 
 
December 31,
(Dollars in thousands)
 
2016
 
2015
Net carrying value of LSRs
 
$
10,230

 
$
11,122

Fair value of LSRs
 
$
15,891

 
$
15,542

Valuation allowance
 
$
8

 
$
—

Loans serviced for others that have servicing rights capitalized
 
$
2,074,057

 
$
2,082,899
Activity for capitalized loan servicing rights
The following table shows the activity for capitalized LSRs accounted for under the amortization method:
 
 
Years Ended December 31,
(Dollars in thousands)
 
2016
 
2015
 
2014
Balance at beginning of period
 
$
11,122

 
$
12,217

 
$
3,423

Acquired through acquisitions
 
—

 
1,284

 
9,235

Additions
 
3,303

 
1,476

 
1,075

Amortization
 
(4,187
)
 
(4,055
)
 
(1,316
)
Change in valuation allowance
 
(8
)
 
200

 
(200
)
Balance at end of period
 
$
10,230

 
$
11,122

 
$
12,217
Schedule of assumptions included in loan servicing rights
Expected and actual loan prepayment speeds are the most significant factors driving the fair value of loan servicing rights. The following table presents assumptions utilized in determining the fair value of loan servicing rights as of December 31, 2016 and 2015.
 
 
Commercial
Real Estate
 
Mortgage
As of December 31, 2016
 
 

 
 

Prepayment speed
 
0.00 - 22.47%

 
0.00 - 99.75%

Weighted average (“WA”) discount rate
 
16.46
%
 
10.09
%
Cost to service/per year
 
$467-$500

 
$65-$90

WA Ancillary income/per year
 
N/A

 
$
28

WA float range
 
0.53
%
 
1.01
%
As of December 31, 2015
 
 

 
 

Prepayment speed
 
N/A

 
6.96 - 17.65%

WA discount rate
 
N/A

 
10.04
%
Cost to service/per year
 
N/A

 
$70-$85

Ancillary income/per year
 
N/A

 
$
20

WA float range
 
N/A

 
1.72
%