(10)

Intangible Assets

The Company’s intangible assets consist of mortgage servicing rights, core deposit intangibles, and goodwill. A summary of mortgage servicing activity is as follows:

(Dollars in thousands)	Nine Months ended September 30, 2016			Twelve Months ended December 31, 2015			Nine Months ended September 30, 2015
Balance, beginning of period	$	1,499			1,507			1,507
Originations		475			547			366
Amortization		(437	)		(555	)		(427	)
Balance, end of period	$	1,537			1,499			1,446
Fair value of mortgage servicing rights	$	2,426			2,590			2,579

All of the loans being serviced were single family loans serviced for FNMA under the individual loan sale program. The following is a summary of the risk characteristics of the loans being serviced at September 30, 2016.

			Weighted			Weighted
	Loan		Average			Average
	Principal		Interest			Remaining		Number
(Dollars in thousands)	Balance		Rate			Term (months)		of Loans
Original term 30 year fixed rate	$	228,454		4.11	%		302		1,901
Original term 15 year fixed rate		107,652		3.15			139		1,154
Adjustable rate		57		2.75			296		2

The gross carrying amount of intangible assets and the associated accumulated amortization at September 30, 2016 is presented in the following table. No amortization expense relating to goodwill is recorded as generally accepted accounting principles do not allow goodwill to be amortized, but require that it be tested for impairment at least annually, or sooner, if there are indications that impairment may exist. Amortization expense for amortizing intangible assets was $0.5 million and $0.4 million for the nine months ended September 30, 2016 and 2015, respectively.

	September 30, 2016
	Gross
(Dollars in thousands)	Carrying Amount		Accumulated Amortization			Unamortized Amount
Mortgage servicing rights	$	3,851		(2,314	)		1,537
Core deposit intangible		574		(96	)		478
Goodwill		802		0			802
Total	$	5,227		(2,410	)		2,817

	September 30, 2015
	Gross
(Dollars in thousands)	Carrying Amount		Accumulated Amortization			Unamortized Amount
Mortgage servicing rights	$	3,736		(2,290	)		1,446
Core deposit intangible		420		(9	)		411
Total	$	4,156		(2,299	)		1,857

The following table indicates the estimated future amortization expense for amortizing intangible assets:

(Dollars in thousands)	Mortgage Servicing Rights		Core Deposit Intangible		Amortizing Intangible Assets
Year ended December 31,
2016	$	121		25		146
2017		408		99		507
2018		323		99		422
2019		268		99		367
2020		184		99		283
Thereafter		233		57		290
Total	$	1,537		478		2,015

Projections of amortization are based on existing asset balances and the existing interest rate environment as of September 30, 2016. The Company's actual experience may be significantly different depending upon changes in mortgage interest rates and other market conditions.