MORTGAGE BANKING ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2015

MORTGAGE BANKING ACTIVITIES

Activity for Mortgage Loans Held for Sale

Years Ended December 31,  (in thousands)	2015		2014		2013
Balance, beginning of year	$	6,388	$	3,506	$	10,614
Origination of mortgage loans held for sale		160,989		82,457		291,155
Proceeds from the sale of mortgage loans held for sale		(167,209)		(82,015)		(305,242)
Net gain on sale of mortgage loans held for sale		3,915		2,440		6,979
Balance, end of year	$	4,083	$	6,388	$	3,506

Components of Mortgage Banking Income

Years Ended December 31,  (in thousands)	2015		2014		2013
Net gain realized on sale of mortgage loans held for sale	$	3,882	$	2,278	$	8,258
Net change in fair value recognized on loans held for sale		(33)		34		(488)
Net change in fair value recognized on rate lock commitments		57		173		(756)
Net change in fair value recognized on forward contracts		9		(45)		(35)
Net gain recognized		3,915		2,440		6,979
Loan servicing income		1,896		1,752		2,107
Amortization of mortgage servicing rights		(1,400)		(1,330)		(2,173)
Change in mortgage servicing rights valuation allowance		—		—		345
Net servicing income recognized		496		422		279
Total Mortgage Banking income	$	4,411	$	2,862	$	7,258

Activity for capitalized mortgage servicing rights

Years Ended December 31,  (in thousands)	2015		2014		2013
Balance, beginning of year	$	4,813	$	5,409	$	4,777
Additions		1,499		734		2,460
Amortized to expense		(1,400)		(1,330)		(2,173)
Change in valuation allowance		—		—		345
Balance, end of year	$	4,912	$	4,813	$	5,409

Valuation Allowance For Capitalized Mortgage Servicing Rights

Years Ended December 31, (in thousands)	2015		2014		2013
Balance, beginning of year	$	—	$	—	$	(345)
Additions		—		—		—
Reductions credited to operations		—		—		345
Balance, end of year	$	—	$	—	$	—

Other information relating to mortgage servicing rights

December 31,  (dollars in thousands)	2015		2014
Fair value of mortgage servicing rights portfolio	$	7,242	$	6,651
Monthly prepayment rate of unpaid principal balance*		105% - 369%		95% - 462%
Discount rate		10%		10%
Weighted average default rate		1.50%		1.50%
Weighted average life in years		6.38		5.70

* Rates are applied to individual tranches with similar characteristics.

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

Year	(in thousands)
2016	$	938
2017		933
2018		922
2019		832
2020		570
2021		487
2022		230
Total	$	4,912

Schedule of notional amounts and fair values of mortgage banking derivatives

	2015				2014
December 31,  (in thousands)	Amount		Fair Value		Amount		Fair Value
Included in Mortgage loans held for sale:
Mortgage loans held for sale	$	3,993	$	4,083	$	6,265	$	6,388
Included in other assets:
Rate lock loan commitments	$	21,580	$	306	$	12,866	$	250
Included in other liabilities:
Mandatory forward contracts	$	19,232	$	25	$	13,181	$	33