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Note 11 - Investment in Mortgage Servicing Rights

9 Months Ended

Sep. 30, 2013

Transfers and Servicing [Abstract]

Transfers and Servicing of Financial Assets [Text Block]

(11) Investment in Mortgage Servicing Rights

A summary of mortgage servicing rights activity is as follows:

(Dollars in thousands)		Nine Months ended September 30, 2013				Twelve Months ended December 31, 2012				Nine Months ended September 30, 2012
Mortgage servicing rights:
Balance, beginning of period		$	1,732				1,485				1,485
Originations			500				979				643
Amortization			(463	)			(732	)			(548	)
Balance, end of period		$	1,769				1,732				1,580
Fair value of mortgage servicing rights		$	2,919				2,126				2,047

All of the loans being serviced are single family loans serviced for the Federal National Mortgage Association (FNMA) under the mortgage-backed security program or the individual loan sale program. The following is a summary of the risk characteristics of the loans being serviced at September 30, 2013.

(Dollars in thousands)		Loan Principal Balance				Weighted Average Interest Rate				Weighted Average Remaining Term (months)				Number of Loans
Original term 30 year fixed rate		$	205,321				4.37	%			303				1,756
Original term 15 year fixed rate			122,007				3.44	%			146				1,381
Adjustable rate			206				3.85	%			323				5

The gross carrying amount of mortgage servicing rights and the associated accumulated amortization at September 30, 2013 and 2012 is presented in the table below.

		September 30, 2013
(Dollars in thousands)		Gross Carrying Amount				Accumulated Amortization				Unamortized Mortgage Servicing Rights
Mortgage servicing rights		$	2,585				(816	)			1,769
Total		$	2,585				(816	)			1,769

		September 30, 2012
(Dollars in thousands)		Gross Carrying Amount				Accumulated Amortization				Unamortized Mortgage Servicing Rights
Mortgage servicing rights		$	2,244				(664	)			1,580
Total		$	2,244				(664	)			1,580

Amortization expense for mortgage servicing rights was $463,000 and $548,000 respectively, for the nine-month periods ended September 30, 2013 and 2012. The following table indicates the estimated future amortization expense for mortgage servicing rights:

(Dollars in thousands)		Mortgage Servicing Rights
Year ended December 31,
2013		$	106
2014			416
2015			395
2016			346
2017			254
2018 and beyond			252
Total		$	1,769

Projections of amortization are based on existing asset balances and the existing interest rate environment as of September 30, 2013. The Company's actual experiences may be significantly different depending upon changes in mortgage interest rates and other market conditions.

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

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