XML 35 R25.htm IDEA: XBRL DOCUMENT v3.7.0.1
Mortgage Servicing Rights (Tables)
 6 Months Ended
Jun. 30, 2017
Transfers and Servicing of Financial Assets [Abstract]  
Analysis of mortgage servicing rights accounted for under the fair value measurement method
For the three and six months ended June 30, 2017 and 2016, the change in the carrying value of the Company’s mortgage servicing rights accounted for under the fair value measurement method was as follows:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
(dollars in thousands)
2017

 
2016

 
2017

 
2016

Balance at Beginning of Period
$
1,586

 
$
1,910

 
$
1,655

 
$
1,970

Change in Fair Value:
 

 
 

 
 

 
 

Due to Payoffs
(38
)
 
(91
)
 
(107
)
 
(151
)
Total Changes in Fair Value of Mortgage Servicing Rights
(38
)
 
(91
)
 
(107
)
 
(151
)
Balance at End of Period
$
1,548

 
$
1,819

 
$
1,548

 
$
1,819
Analysis of mortgage servicing rights accounted for under the amortization method
For the three and six months ended June 30, 2017 and 2016, the change in the carrying value of the Company’s mortgage servicing rights accounted for under the amortization method, net of valuation allowance, was as follows:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
(dollars in thousands)
2017

 
2016

 
2017

 
2016

Balance at Beginning of Period
$
22,705

 
$
20,753

 
$
22,008

 
$
21,032

Servicing Rights that Resulted From Asset Transfers
961

 
329

 
2,276

 
771

Amortization
(690
)
 
(677
)
 
(1,308
)
 
(1,313
)
Valuation Allowance Provision
(53
)
 
(2,593
)
 
(53
)
 
(2,678
)
Balance at End of Period
$
22,923

 
$
17,812


$
22,923


$
17,812

 
 
 
 
 
 
 
 
Valuation Allowance:
 
 
 
 
 
 
 
Balance at Beginning of Period
$
—

 
$
(106
)
 
$
—

 
$
(21
)
Valuation Allowance Provision
(53
)
 
(2,593
)
 
(53
)
 
(2,678
)
Balance at End of Period
$
(53
)
 
$
(2,699
)

$
(53
)

$
(2,699
)
 
 
 
 
 
 
 
 
Fair Value of Mortgage Servicing Rights Accounted for
 Under the Amortization Method
 

 
 

 
 

 
 

Beginning of Period
$
25,946

 
$
20,841

 
$
25,148

 
$
24,804

End of Period
$
25,479

 
$
17,812

 
$
25,479

 
$
17,812
Schedule of key data and assumptions used in estimating the fair value of mortgage servicing rights
The key data and assumptions used in estimating the fair value of the Company’s mortgage servicing rights as of June 30, 2017 and December 31, 2016 were as follows:
 
June 30,
2017

 
December 31, 2016

Weighted-Average Constant Prepayment Rate 1
8.60
%
 
8.13
%
Weighted-Average Life (in years)
7.20

 
7.43

Weighted-Average Note Rate
4.07
%
 
4.10
%
Weighted-Average Discount Rate 2
8.87
%
 
9.33
%
1 
Represents annualized loan repayment rate assumption.
2 
Derived from multiple interest rate scenarios that incorporate a spread to a market yield curve and market volatilities.
Schedule of sensitivity analysis of the fair value of mortgage servicing rights
A sensitivity analysis of the Company’s fair value of mortgage servicing rights to changes in certain key assumptions as of June 30, 2017 and December 31, 2016 is presented in the following table.
(dollars in thousands)
June 30,
2017

 
December 31,
2016

Constant Prepayment Rate
 

 
 

Decrease in fair value from 25 basis points (“bps”) adverse change
$
(317
)
 
$
(321
)
Decrease in fair value from 50 bps adverse change
(628
)
 
(636
)
Discount Rate
 

 
 

Decrease in fair value from 25 bps adverse change
(285
)
 
(288
)
Decrease in fair value from 50 bps adverse change
(565
)
 
(570
)