4. 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 operations, while consumer loans originated for sale are originated and sold through the RCS division of the Company’s RPG segment.

Mortgage Loans Held for Sale, at Fair Value

See additional detail regarding mortgage loans originated for sale, at fair value under Footnote 11 “Mortgage Banking Activities” of this section of the filing.

Consumer Loans Held for Sale, at Fair Value

During the second quarter of 2016, RCS initiated an installment loan program, in which the Company sells 100% of the receivables approximately 21 days after origination. The Company carries these loans at fair value, with the loans marked to market on a monthly basis and changes in 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				Six Months Ended
	June 30,				June 30,
(in thousands)	2017		2016		2017		2016

Balance, beginning of period	$	3,679	$	415	$	2,198	$	—
Origination of consumer loans held for sale		19,542		13,242		31,781		13,657
Proceeds from the sale of consumer loans held for sale		(20,089)		(6,958)		(30,872)		(6,958)
Net gain on sale of consumer loans held for sale		103		127		128		127
Balance, end of period	$	3,235	$	6,826	$	3,235	$	6,826

Consumer Loans Held for Sale, at 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 generated through these products within two business 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 and carried at the lower of cost or fair value. Any 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				Six Months Ended
	June 30,				June 30,
(in thousands)	2017		2016		2017		2016

Balance, beginning of period	$	1,420	$	566	$	1,310	$	514
Origination of consumer loans held for sale		128,496		71,717		243,182		115,370
Proceeds from the sale of consumer loans held for sale		(128,576)		(71,441)		(244,234)		(115,474)
Net gain on sale of consumer loans held for sale		1,124		280		2,206		712
Balance, end of period	$	2,464	$	1,122	$	2,464	$	1,122