Mortgage Banking Activities

12 Months Ended

Dec. 31, 2019

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 IRLCs 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, IRLCs and forward contracts are recorded in the mortgage banking activities line item within noninterest income. Refer to Note 18 for further information on derivative financial instruments.

During the years ended December 31, 2019, 2018, and 2017, the Company originated mortgage loans held-for-sale of $627.6 million, $364.6 million, and $412.9 million, respectively, and received $601.2 million, $376.5 million, and $425.3 million from the sale of mortgage loans, respectively, into the secondary market. During 2019, the Company sold $100.5 million of residential mortgage loans that were originally held for investment. There were no comparable sales in 2018. During 2017, the Company sold $42.3 million of residential mortgage loans that were originally held for investment.

The following table provides the components of income from mortgage banking activities for the years ended December 31, 2019, 2018, and 2017.



	Year Ended December 31,
	2019		2018			2017
Gain on loans sold	$	10,275	$	6,102		$	7,775
Gain resulting from the change in fair value of loans held-for-sale	538		57			638
Gain (loss) resulting from the change in fair value of derivatives	728		(441		)	(577		)
Net revenue from mortgage banking activities	$	11,541	$	5,718		$	7,836