Note 7 - Intangible Assets and Loan Servicing

12 Months Ended

Dec. 31, 2014

Disclosure Text Block [Abstract]

Intangible Assets Disclosure [Text Block]

Note 7 – Intangible Assets and Loan 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 $79,572,000 and $81,750,000 at December 31, 2014 and 2013, respectively.

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

Year ended December 31,	2014			2013
Balance at beginning of year	$	519		$	448
Mortgage servicing rights capitalized		48			126
Mortgage servicing rights amortized		(71	)		(92	)
Fair market value adjustments		8			37
Balance at end of year	$	504		$	519

The balance of these mortgage servicing rights are included in other assets at December 31, 2014 and 2013 and the fair value of these rights was $601,000 and $643,000, respectively. The fair value of servicing rights was determined using discount rates ranging from 10% to 12% for both 2014 and 2013.

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

2015	$	92
2016		76
2017		63
2018		52
2019		43

On November 26, 2014, QNB transferred its former internet domain name to a third party and recorded a gain of $1,000,000, as disclosed in a Form 8-K filing dated December 2, 2014. As a result of the purchase of an additional domain name, QNB recorded the purchase price of $8,000 as an intangible asset in other assets in 2014. This asset has no amortization expense as it has an indefinite life.