3. LOANS HELD FOR SALE

In the ordinary course of business, the Bank originates for sale mortgage loans and consumer loans. Mortgage loans originated for sale are primarily originated and sold into the secondary market through the Bank’s Mortgage Banking segment, while consumer loans originated for sale are originated and sold through the RCS segment.

Mortgage Loans Held for Sale, at Fair Value

See additional detail regarding mortgage loans originated for sale, at fair value under Footnote 10 “Mortgage Banking Activities” of this section of the filing.

Consumer Loans Held for Sale, at Fair Value

RCS maintains an installment loan program where the Company sells 100% of the loans approximately 21 days after origination. The Company carries these loans at fair value, with the loans marked to market on a monthly basis, with changes in their fair value reported as a component of “Program fees.”

Activity for consumer loans held for sale and carried at fair value was as follows:


	Three Months Ended
	March 31,
(in thousands)	2018		2017

Balance, beginning of period	$	2,677	$	2,198
Origination of consumer loans held for sale		10,439		12,238
Proceeds from the sale of consumer loans held for sale		(10,760)		(10,783)
Net gain on sale of consumer loans held for sale		63		26
Balance, end of period	$	2,419	$	3,679

Consumer Loans Held for Sale, at the Lower of Cost or Fair Value

RCS originates for sale its line-of-credit product and its credit card product. The Bank sells 90% of the balances maintained through these products within two days of loan origination and retains a 10% interest. The line-of-credit product represents the substantial majority of activity in consumer loans held for sale carried at the lower of cost or fair value. Gains or losses on the sale of RCS products are reported as a component of “Program fees.”

Activity for consumer loans held for sale and carried at the lower of cost or market value was as follows:


	Three Months Ended
	March 31,
(in thousands)	2018		2017

Balance, beginning of period	$	8,551	$	1,310
Origination of consumer loans held for sale		154,057		114,686
Proceeds from the sale of consumer loans held for sale		(156,802)		(115,658)
Net gain on sale of consumer loans held for sale		1,574		1,082
Balance, end of period	$	7,380	$	1,420