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Mortgage Servicing Rights (Tables)
 3 Months Ended
Mar. 31, 2016
Mortgage Servicing Rights [Abstract]  
Mortgage servicing rights

Our portfolio of residential mortgage loans serviced for third parties was $2.20 billion and $2.15 billion as of March 31, 2016 and December 31, 2015, respectively.  These loans were originated by BancShares and sold to third parties on a non-recourse basis with servicing rights retained.  These retained servicing rights are recorded as a servicing asset on the Consolidated Balance Sheets and are initially recorded at fair value.

The activity of the servicing asset for the three months ended March 31, 2016 and 2015 is presented in the following table:
 
Three months ended March 31
(Dollars in thousands)
2016
 
2015
Beginning balance
$
19,351

 
$
16,688

Servicing rights originated
977

 
662

Amortization
(1,268
)
 
(852
)
Valuation allowance provision
(1,874
)
 
(62
)
Ending balance
$
17,186

 
$
16,436
Mortgage servicing rights valuation allowance
The following table presents the activity in the servicing asset valuation allowance for the three months ended March 31, 2016 and 2015:
 
Three months ended March 31
(Dollars in thousands)
2016
 
2015
Beginning balance
$
95

 
$
850

Valuation allowance provision
1,874

 
62

Ending balance
$
1,969

 
$
912
Mortgage servicing rights economic assumptions
Valuation of mortgage servicing rights is performed using a pooling methodology. Similar loans are pooled together and evaluated on a discounted earnings basis to determine the present value of future earnings. Key economic assumptions used to value mortgage servicing rights as of March 31, 2016 and December 31, 2015 were as follows:
 
March 31, 2016
 
December 31, 2015
Discount rate - conventional fixed loans
8.77
%
 
9.31
%
Discount rate - all loans excluding conventional fixed loans
9.77
%
 
10.31
%
Weighted average constant prepayment rate
13.32
%
 
11.01
%
Weighted average cost to service a loan
$
62.75

 
$
56.61