Mortgage Banking Activities

9 Months Ended

Sep. 30, 2016

The Company’s residential real estate lending business originates mortgage loans for customers and sells a majority of the originated loans into the secondary market. The Company hedges its mortgage banking pipeline by entering into forward contracts for the future delivery of mortgage loans to third party investors and entering into interest rate lock commitments with potential borrowers to fund specific mortgage loans that will be sold into the secondary market. To facilitate the hedging of the loans, the Company has elected the fair value option for loans originated and intended for sale in the secondary market under mandatory pricing agreements. Changes in the fair value of loans held-for-sale, interest rate lock commitments and forward contracts are recorded in the mortgage banking activities line item within noninterest income. Refer to Note 11 for further information on derivative financial instruments.

During the three months ended September 30, 2016 and 2015, the Company originated mortgage loans held-for-sale of $180.1 million and $108.4 million, respectively, and sold $195.7 million and $112.9 million of mortgage loans, respectively, into the secondary market. During the nine months ended September 30, 2016 and 2015, the Company originated mortgage loans held-for-sale of $439.2 million and $386.4 million, respectively, and sold $452.2 million and $400.0 million of mortgage loans, respectively, into the secondary market.

The following table provides the components of income from mortgage banking activities for the three and nine months ended September 30, 2016 and 2015.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016		2015
Gain on loans sold	$	3,980		$	2,050		$	8,476	$	6,895
Gain (loss) resulting from the change in fair value of loans held-for-sale	(426		)	349			560		(143		)
Gain (loss) resulting from the change in fair value of derivatives	888			(304		)	955		443
Net revenue from mortgage banking activities	$	4,442		$	2,095		$	9,991	$	7,195