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 Core 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 11 “Mortgage Banking Activities” of this section of the filing.

Consumer Loans Held for Sale, at Fair Value

During the first 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				Nine Months Ended
	September 30,				September 30,
(in thousands)	2017		2016		2017		2016

Balance, beginning of period	$	3,235	$	6,826	$	2,198	$	—
Origination of consumer loans held for sale		15,066		20,057		46,847		33,714
Proceeds from the sale of consumer loans held for sale		(15,115)		(25,397)		(45,988)		(32,355)
Net gain on sale of consumer loans held for sale		182		205		311		332
Balance, end of period	$	3,368	$	1,691	$	3,368	$	1,691

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

RCS originates for sale its line-of-credit product, credit card product and its health care receivables product. The Bank sells 90% of the line-of-credit and credit card balances within two business days of loan origination and retains a 10% interest. Hospital receivables originated for sale are based on a predetermined pool subject to defined criteria. 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. 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				Nine Months Ended
	September 30,				September 30,
(in thousands)	2017		2016		2017		2016

Balance, beginning of period	$	2,464	$	1,122	$	1,310	$	514
Origination of consumer loans held for sale		164,815		99,346		407,997		214,716
Proceeds from the sale of consumer loans held for sale		(162,947)		(100,099)		(407,181)		(215,573)
Net gain on sale of consumer loans held for sale		1,352		724		3,558		1,436
Balance, end of period	$	5,684	$	1,093	$	5,684	$	1,093