Mortgage Servicing Rights

Accounting for MSRs is based on the amortization method. Under this method, servicing assets are amortized in proportion to and over the period of net servicing income. Income generated as the result of the capitalization of new servicing assets is reported as net gain on sale of loans and the amortization of servicing assets is reported as a reduction to loan servicing income in the consolidated statements of operations. Ancillary income is recorded in other non-interest income.

Information regarding the Company’s MSRs is as follows:



	Year Ended December 31, 2015			Year Ended December 31, 2014
	(Dollars in thousands)
Balance at beginning of period	$	20,685		$	23,041
Additions	2,952			1,442
Amortization	(4,010		)	(3,798		)
Balance at end of period	19,627			20,685
Valuation allowance at end of period	(685		)	(1,281		)
Balance at end of period, net	$	18,942		$	19,404
Fair value at end of the period	$	19,252		$	19,590
Key assumptions:
Weighted average discount rate	11.35		%	11.45		%
Weighted average prepayment speed	11.31		%	10.01		%

The projections of amortization expense for mortgage servicing rights set forth below are based on asset balances as of December 31, 2015 and an assumed amortization rate of 17.4% per year. Future amortization expense may be significantly different depending upon changes in the mortgage servicing portfolio, mortgage interest rates and market conditions.



	MSR Amortization
	(In thousands)
Year Ended December 31, 2015	$	4,010
Estimate for the year ended December 31,
2016	$	3,406
2017	2,813
2018	2,323
2019	1,918
2020	1,584
Thereafter	7,583
Total	$	19,627

The unpaid principal balance of mortgage loans serviced for others is not included in the consolidated balance sheets. The unpaid principal of mortgage loans serviced for others was approximately $2.28 billion and $2.47 billion at December 31, 2015 and 2014, respectively.