MORTGAGE BANKING ACTIVITIES (Tables)

9 Months Ended

Sep. 30, 2018

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)	2018		2017		2018		2017
Balance, beginning of period	$	12,653	$	6,057	$	5,761	$	11,662
Origination of mortgage loans held for sale		49,149		43,489		133,273		119,265
Proceeds from the sale of mortgage loans held for sale		(55,063)		(46,428)		(134,157)		(130,065)
Net gain on sale of mortgage loans held for sale		1,123		965		2,985		3,221
Balance, end of period	$	7,862	$	4,083	$	7,862	$	4,083

Components of Mortgage Banking Income

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2018		2017		2018		2017
Net gain realized on sale of mortgage loans held for sale	$	1,093	$	1,161	$	2,791	$	3,275
Net change in fair value recognized on loans held for sale		(110)		(102)		33		9
Net change in fair value recognized on rate lock loan commitments		(84)		(98)		38		185
Net change in fair value recognized on forward contracts		224		4		123		(248)
Net gain recognized		1,123		965		2,985		3,221
Loan servicing income		598		527		1,803		1,590
Amortization of mortgage servicing rights		(361)		(390)		(1,092)		(1,104)
Net servicing income recognized		237		137		711		486
Total Mortgage Banking income	$	1,360	$	1,102	$	3,696	$	3,707

Activity for capitalized mortgage servicing rights

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2018		2017		2018		2017
Balance, beginning of period	$	4,915	$	5,158	$	5,044	$	5,180
Additions		372		360		974		1,052
Amortized to expense		(361)		(390)		(1,092)		(1,104)
Balance, end of period	$	4,926	$	5,128	$	4,926	$	5,128

Other information relating to mortgage servicing rights

(in thousands)	September 30, 2018			December 31, 2017
Fair value of mortgage servicing rights portfolio	$	9,666		$	7,984
Monthly weighted average prepayment rate of unpaid principal balance*		167	%		200	%
Discount rate		10	%		10	%
Weighted average default rate		4	%		3.75	%
Weighted average life in years		6.15			5.49

* 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, 2018				December 31, 2017
	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	$	7,736	$	7,862	$	5,668	$	5,761
Included in other assets:
Rate lock loan commitments	$	21,225	$	348	$	14,696	$	310
Mandatory forward contracts		22,989		113		—		—
Included in other liabilities:
Mandatory forward contracts	$	—	$	—	$	17,159	$	9