Note 5 - Loan Servicing

12 Months Ended

Dec. 31, 2013

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 5 – LOAN SERVICING

Loans held for sale at year end are as follows:

(In Thousands of Dollars)
	2013		2012
Loans held for sale	$	401	$	2,921
Less: Allowance to adjust to lower of cost or market		0		0
Loans held for sale, net	$	401	$	2,921

Mortgage loans serviced for others are not reported as assets. The principal balances of these loans at year end are as follows:

(In Thousands of Dollars)
	2013		2012
Mortgage loan portfolios serviced for:
Freddie Mac	$	607,410	$	605,000
Fannie Mae	$	0	$	1,140
Federal Home Loan Bank	$	1,834	$	2,094

Custodial escrow balances maintained in connection with serviced loans were $1,476,000 and $1,433,000 at year end 2013 and 2012.

Activity for capitalized mortgage servicing rights, included in other assets on the Consolidated Balance Sheet, was as follows:

(In Thousands of Dollars)
	2013			2012			2011
Servicing rights:
Beginning of year	$	4,993		$	4,596		$	4,603
Additions		1,715			2,512			1,505
Amortized to expense		(1,779	)		(2,115	)		(1,512	)
End of year	$	4,929		$	4,993		$	4,596

Management has determined that no valuation allowance was necessary at December 31, 2013, 2012, or 2011.

The fair value of mortgage servicing rights was $7,475,000 and $5,494,000 at year end 2013 and 2012. Fair value at the end of 2013 was determined using a discount rate of 7.691%, a weighted average constant prepayment rate of 14.07%, depending on the stratification of the specific right, and a weighted average delinquency rate of 0.90%. At the end of 2012, fair value was determined using a discount rate of 7.018%, a weighted average constant prepayment rate of 17.01%, depending on the stratification of the specific right, and a weighted average delinquency rate of 1.01%

The weighted average amortization period is 3.1 years as of December 31, 2013. Estimated amortization expense for each of the next five years is:

(In Thousands of Dollars)
2014	$	1,263
2015		1,041
2016		873
2017		722
2018		580
Thereafter		450