CHFC 2017 Annual Report

Expected and actual loan prepayment speeds are the most significant factors driving the fair value of loan servicing rights. The following table presents assumptions utilized in determining the fair value of loan servicing rights as of December 31, 2017 and 2016. Mortgage As of December 31, 2017 Prepayment speed 0.00 - 38.8% Weighted average ("WA") discount rate 10.1% Cost to service/per year $ 66 WAAncillary income/per year $ 31 WA float range 1.6% As of December 31, 2016 Prepayment speed 0.00 - 99.8% WA discount rate 10.1 % Cost to service/per year $65-$90 Ancillary income/per year $ 28 WA float range 1.0 % The Corporation realized total loan servicing fee income of $18.2 million, $8.7 million and $5.4 million for the years ended December 31, 2017, 2016 and 2015, respectively, recorded as a component of "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income. Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2017 130 Note 10: Other Intangible Assets The following table shows the net carrying value of the Corporation's other intangible assets. December 31, (Dollars in thousands) 2017 2016 Core deposit intangible assets $ 34,259 $ 40,211 Non-compete intangible assets 12 — Total other intangible assets $ 34,271 $ 40,211 Core Deposit Intangible Assets The Corporation recorded core deposit intangible assets associated with each of its acquisitions. Core deposit intangible assets are amortized on an accelerated basis over their estimated useful lives and have an estimated remaining weighted-average useful life of 7.5 years as of December 31, 2017. The following table sets forth the carrying amount and accumulated amortization of core deposit intangible assets that are amortizable and arose from business combinations or other acquisitions: December 31, (Dollars in thousands) 2017 2016 Gross carrying amount $ 59,143 $ 59,143 Accumulated amortization 24,884 18,932 Net carrying amount $ 34,259 $ 40,211 Amortization expense recognized on core deposit intangible assets was $6.0 million, $5.2 million and $4.1 million for the years ended December 31, 2017, 2016 and 2015, respectively.