Note 5. Loan Servicing

The unpaid principal balances of loans serviced by the Company for the benefit of others are not included in the accompanying Consolidated Balance Sheets. These unpaid principal balances were $1.34 billion and $1.31 billion as of December 31, 2012 and 2011, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and collection and foreclosure processing. Loan servicing income is recorded on the accrual basis and includes servicing fees from investors and certain charges collected from borrowers, such as late payment fees, and is net of amortization of capitalized mortgage servicing rights.

The balance of capitalized servicing rights included in other assets at December 31, 2012 and 2011, was $5.3 million and $5.5 million, respectively. The fair values of these servicing rights were $8.6 million and $8.4 million, respectively, at December 31, 2012 and 2011. The following summarizes mortgage servicing rights capitalized and amortized:

	For the Years Ended December 31,
	2012		2011		2010
	(dollars in thousands)

Mortgage servicing rights capitalized	$	2,794	$	2,741	$	3,537
Mortgage servicing rights amortized	$	2,972	$	2,530	$	2,478