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Loan Servicing Rights (Tables)
 12 Months Ended
Dec. 31, 2017
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 and the related fair value changes:
(Dollars in thousands)
 
Commercial
Real Estate
 
Mortgage
 
Total
For the year ended December 31, 2017
 
 
 
 
 
 
Fair value, beginning of period
 
$
344

 
$
47,741

 
$
48,085

Transfers in based on new accounting policy election
 
—

 
15,891

 
15,891

Additions from loans sold with servicing retained
 
188

 
8,557

 
8,745

Changes in fair value due to:
 
 
 
 
 


Reductions from pay-offs, pay downs and run-off
 
(105
)
 
(2,400
)
 
(2,505
)
Changes in estimates of fair value (1)
 
—

 
(6,375
)
 
(6,375
)
Fair value, end of period
 
$
427

 
$
63,414

 
$
63,841

Principal balance of loans serviced
 
$
40,316

 
$
7,068,431

 
$
7,108,747

For the year ended December 31, 2016
 
 

 
 

 
 

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-offs, pay downs and run-off
 
(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 under the fair value measurement method
 
$
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. Included
in "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income.
Net carrying value, fair value of mortgage servicing rights and loans Corporation servicing for others
The following shows the net carrying value and fair value of LSRs and the total loans that the Corporation serviced for others accounted for at the lower of cost or fair value for the years ended December 31, 2016 and 2015:        
 
 
Years Ended 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
Activity for LSRs accounted for at the lower of cost or fair value and the related valuation allowance for the years ended December 31, 2016 and 2015 are as follows:
 
 
Years Ended December 31,
(Dollars in thousands)
 
2016
 
2015
Balance at beginning of period
 
$
11,122

 
$
12,217

Acquired through acquisitions
 
—

 
1,284

Additions
 
3,303

 
1,476

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

Balance at end of period
 
$
10,230

 
$
11,122
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, 2017 and 2016.
 
 
Mortgage
As of December 31, 2017
 
 

Prepayment speed
 
0.00 - 38.8%

Weighted average ("WA") discount rate
 
10.1
%
Cost to service/per year
 
$
66

WA Ancillary income/per year
 
$
31

WA float range
 
1.6
%
As of December 31, 2016
 
 

Prepayment speed
 
0.00 - 99.8%

WA discount rate
 
10.1
%
Cost to service/per year
 
$65-$90

Ancillary income/per year
 
$
28

WA float range
 
1.0
%