NOTE 14 — MORTGAGE BANKING AND LOAN SERVICING

Net revenues from mortgage banking activity consisted of the following:

 

Loans serviced for others are not included in the accompanying consolidated balance sheets. Loan servicing fee income was $2,653,  $2,415, and $2,065 for 2016, 2015, and 2014. The unpaid principal balances of loans serviced for others totaled $1,115,246 and $924,836 at December 31, 2016 and 2015. Custodial escrow balances maintained in connection with serviced loans were $16,609 and $12,766 at year end 2016 and 2015. Mortgage servicing rights are included in other assets on the consolidated balance sheets. The weighted average amortization period is 7.14 years. The fair value of capitalized mortgage servicing assets is based on comparable market values and expected cash flows, with impairment assessed based on portfolio characteristics including product type and interest rates. The carrying value of capitalized mortgage servicing rights was $7,410 and $6,120 at year end 2016 and 2015. Fair value at year‑end 2016 was determined using a discount rate of 14%, and prepayment speeds ranging from 104% to 272%, depending on the stratification of the specific right. Fair value at year‑end 2015 was determined using a discount rate of 10%, and prepayment speeds ranging from 105% to 369%, depending on the stratification of the specific right. The notional amount of interest rate lock commitments to make 1‑4 family residential mortgage loans intended to be sold on the secondary market totaled $38.7 million and $30.0 million at December 31, 2016 and 2015, respectively. The estimated fair value of these commitments totaled $648 and $700 at December 31, 2016 and 2015, respectively, and is included in other assets on the consolidated balance sheet.