MORTGAGE BANKING ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2013

MORTGAGE BANKING ACTIVITIES

Activity for Mortgage Loans Held for Sale

December 31, (in thousands)	2013			2012
Balance, beginning of year	$	10,614		$	4,392
Origination of mortgage loans held for sale	291,155			252,194
Proceeds from the sale of mortgage loans held for sale	(305,242		)	(255,670		)
Net gain on sale of mortgage loans held for sale	6,979			9,698
Balance, end of year	$	3,506		$	10,614

Components of Mortgage Banking Income

December 31, (in thousands)	2013			2012			2011
Net gain realized on sale of mortgage loans held for sale	$	8,258		$	8,796		$	3,877
Net change in fair value of recognized on loans held for sale	(488		)	421			201
Net change in fair value recognized on rate lock commitments	(756		)	342			383
Net change in fair value recognized on forward contracts	(35		)	139			(370		)
Net gain recognized	6,979			9,698			4,091
Loan servicing income	2,107			$	2,181		$	2,828
Amortization of mortgage servicing rights	(2,173		)	(3,290		)	(2,817		)
Change in mortgage servicing rights valuation allowance	345			(142		)	(203		)
Net servicing income recognized	279			(1,251		)	(192		)
Total Mortgage Banking income	$	7,258		$	8,447		$	3,899

Activity for capitalized mortgage servicing rights

December 31, (in thousands)	2013			2012			2011
Balance, beginning of year	$	4,777		$	6,087		$	7,800
Additions	2,460			2,122			1,307
Amortized to expense	(2,173		)	(3,290		)	(2,817		)
Change in valuation allowance	345			(142		)	(203		)
Balance, end of year	$	5,409		$	4,777		$	6,087

Valuation Allowance For Capitalized Mortgage Servicing Rights

December 31, (in thousands)	2013			2012			2011
Balance, beginning of year	$	(345	)	$	(203	)	$	—
Additions	—			(247		)	(203		)
Reductions credited to operations	345			105			—
Balance, end of year	$	—		$	(345	)	$	(203	)

Mortgage Servicing Rights

December 31, (dollars in thousands)	2013		2012
Fair value of mortgage servicing rights	$	7,337	$	5,446
Prepayment speed range	105% - 550%		112% - 550%
Discount rate	10%		9%
Weighted average default rate	1.50%		1.50%
Weighted average life in years	6.17		3.89

Schedule of estimated future amortization expense of the MSR portfolio (net of the impairment charge)

Year	(in thousands)
2014	$	1,008
2015	986
2016	967
2017	933
2018	710
2019	466
2020	339
Total	$	5,409

Schedule of notional amounts and fair values of mortgage banking derivatives

December 31, (in thousands)	2013				2012
	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in Mortgage loans held for sale:
Mortgage loans held for sale	$	3,417	$	3,506	$	10,037	$	10,614
Included in other assets:
Rate lock loan commitments	$	4,393	$	77	$	27,468	$	833
Mandatory forward contracts	5,571		12		36,675		47
Total included in other assets	$	9,964	$	89	$	64,143	$	880