MORTGAGE BANKING ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2017

MORTGAGE BANKING ACTIVITIES

Activity for Mortgage Loans Held for Sale, at fair value

Years Ended December 31, (in thousands)	2017		2016		2015
Balance, beginning of period	$	11,662	$	4,083	$	6,388
Origination of mortgage loans held for sale		160,091		216,812		160,989
Transferred from held for investment to held for sale		—		71,201		—
Proceeds from the sale of mortgage loans held for sale		(169,969)		(287,090)		(167,209)
Net gain on sale of mortgage loans held for sale		3,977		6,656		3,915
Balance, end of period	$	5,761	$	11,662	$	4,083

Components of Mortgage Banking Income

Years Ended December 31, (in thousands)	2017		2016		2015
Net gain realized on sale of mortgage loans held for sale	$	4,180	$	5,478	$	3,882
Net gain realized on sale of mortgage loans transferred from held for investment to held for sale		—		1,129		—
Net change in fair value recognized on loans held for sale		(1)		4		(33)
Net change in fair value recognized on rate lock loan commitments		11		(8)		57
Net change in fair value recognized on forward contracts		(213)		53		9
Net gain recognized		3,977		6,656		3,915
Loan servicing income		2,169		1,983		1,896
Amortization of mortgage servicing rights		(1,504)		(1,757)		(1,400)
Net servicing income recognized		665		226		496
Total Mortgage Banking income	$	4,642	$	6,882	$	4,411

Activity for capitalized mortgage servicing rights

Years Ended December 31, (in thousands)	2017		2016		2015
Balance, beginning of period	$	5,180	$	4,912	$	4,813
Additions		1,368		2,025		1,499
Amortized to expense		(1,504)		(1,757)		(1,400)
Balance, end of period	$	5,044	$	5,180	$	4,912

Other information relating to mortgage servicing rights

December 31, (dollars in thousands)	2017			2016
Fair value of mortgage servicing rights portfolio	$	7,984		$	7,478
Monthly weighted average prepayment rate of unpaid principal balance*		200	%		158	%
Discount rate		10.00	%		13	%
Weighted average default rate		3.75	%		1.50	%
Weighted average life in years		5.49			6.75

* Rates are applied to individual tranches with similar characteristics.

Schedule of estimated future amortization expense of the MSR portfolio (net of the impairment charge)

Year	(in thousands)
2018	$	1,034
2019		1,005
2020		970
2021		901
2022		591
2023		529
2024		14
Total	$	5,044

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

	2017				2016
	Notional				Notional
December 31, (in thousands)	Amount		Fair Value		Amount		Fair Value
Included in Mortgage loans held for sale:
Mortgage loans held for sale, at fair value	$	5,668	$	5,761	$	11,568	$	11,662
Included in other assets:
Rate lock loan commitments	$	14,696	$	310	$	19,521	$	299
Mandatory forward contracts		—		—		25,618		204
Included in other liabilities:
Mandatory forward contracts	$	17,159	$	9	$	—	$	—