Intangible Assets and Servicing

12 Months Ended

Dec. 31, 2011

Intangible Assets and Servicing

Intangible Assets and Servicing

Note 7 – Intangible Assets and Servicing

Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage loans serviced for others were $77,077,000 and $79,334,000 at December 31, 2011 and 2010, respectively.

The following table reflects the activity of mortgage servicing rights for the periods indicated:

Year ended December 31,	2011			2010
Balance at beginning of year	$	504		$	519
Mortgage servicing rights capitalized		100			89
Mortgage servicing rights amortized		(114	)		(98	)
Fair market value adjustments		-			(6	)
Balance at end of year	$	490		$	504

The balance of these mortgage servicing rights are included in other assets at December 31, 2011 and 2010. The fair value of these rights was $542,000 and $620,000, respectively. The fair value of servicing rights was determined using discount rates ranging from 9.0% to 11.0% for 2011 and 9% for 2010.

The annual estimated amortization expense of intangible assets for each of the five succeeding fiscal years is as follows:

2012	$	115
2013		89
2014		68
2015		52
2016		40