MORTGAGE BANKING ACTIVITIES (Tables)

9 Months Ended

Sep. 30, 2016

MORTGAGE BANKING ACTIVITIES

Activity for Mortgage Loans Held for Sale, at fair value

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2016		2015		2016		2015
Balance, beginning of period	$	12,280	$	10,277	$	4,083	$	6,388
Origination of mortgage loans held for sale		58,820		32,018		154,607		128,026
Transferred from held for investment to held for sale		71,201		—		71,201		—
Proceeds from the sale of mortgage loans held for sale		(136,946)		(34,605)		(227,096)		(129,077)
Net gain on sale of mortgage loans held for sale		3,087		836		5,647		3,189
Balance, end of period	$	8,442	$	8,526	$	8,442	$	8,526

Components of Mortgage Banking Income

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2016		2015		2016		2015
Net gain realized on sale of mortgage loans held for sale	$	1,754	$	926	$	3,861	$	3,024
Net gain realized on sale of mortgage loans transferred from held for investment to held for sale during the period		1,129		—		1,129		—
Net change in fair value recognized on loans held for sale		57		10		155		107
Net change in fair value recognized on rate lock commitments		69		(37)		604		89
Net change in fair value recognized on forward contracts		78		(63)		(102)		(31)
Net gain recognized		3,087		836		5,647		3,189
Loan servicing income		511		477		1,455		1,417
Amortization of mortgage servicing rights		(517)		(341)		(1,200)		(1,057)
Net servicing income recognized		(6)		136		255		360
Total Mortgage Banking income	$	3,081	$	972	$	5,902	$	3,549

Activity for capitalized mortgage servicing rights

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2016		2015		2016		2015
Balance, beginning of period	$	4,998	$	4,971	$	4,912	$	4,813
Additions		857		338		1,626		1,212
Amortized to expense		(517)		(341)		(1,200)		(1,057)
Balance, end of period	$	5,338	$	4,968	$	5,338	$	4,968

Other information relating to mortgage servicing rights

(dollars in thousands)	September 30, 2016		December 31, 2015
Fair value of mortgage servicing rights portfolio	$	6,868	$	7,242
Monthly prepayment rate of unpaid principal balance*		108% - 456%		105% - 369%
Discount rate		12%		10%
Weighted average default rate		1.50%		1.50%
Weighted average life in years		5.56		6.38

* Rates are applied to individual tranches with similar characteristics.

Schedule of notional amounts and fair values of mortgage loans held for sale at fair value and mortgage banking derivatives

	September 30, 2016				December 31, 2015
	Notional				Notional
(in thousands)	Amount		Fair Value		Amount		Fair Value
Included in Mortgage loans held for sale:
Mortgage loans held for sale, at fair value	$	8,197	$	8,442	$	3,993	$	4,083
Included in other assets:
Rate lock loan commitments	$	39,683	$	910	$	21,580	$	306
Included in other liabilities:
Mandatory forward contracts	$	40,056	$	130	$	19,232	$	25