3.LOANS HELD FOR SALE

The following table provides the fair value and contractual principal balance outstanding of loans held for sale accounted for under the fair value option:


	March 31,		December 31,
	2020		2019
	(in thousands)

Loans held for sale, fair value	$	118,316	$	110,552
Loans held for sale, contractual principal outstanding		113,513		107,472
Fair value less unpaid principal balance	$	4,803	$	3,080

The Company has elected the fair value option for mortgage loans held for sale to better match changes in fair value of the loans with changes in the fair value of the forward sale commitment contracts used to economically hedge them. Changes in fair value of mortgage loans held for sale accounted for under the fair value option election amounted to an increase of $1.7 million in the three months ended March 31, 2020, compared to a decrease of $290,000 in the three months ended March 31, 2019. These amounts are offset in earnings by the changes in fair value of forward sale commitments. The changes in fair value are reported as a component of mortgage banking income in the Unaudited Consolidated Statements of Income.

At March 31, 2020 and December 31, 2019, there were no loans held for sale that were greater than ninety days past due.