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LOANS HELD FOR SALE

9 Months Ended

Sep. 30, 2025

3. 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 Traditional 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 HFS under the Footnote titled “Mortgage Banking Activities.”

Consumer Loans Held for Sale, at Fair Value

Through RCS, the Bank offers RCS installment loans with terms ranging from 12 to 60 months to borrowers in multiple states. Balances originated under this RCS installment loan program are carried as HFS on the Bank’s balance sheet, with the intent to sell to a third-party, who is an affiliate of the Bank’s third-party service provider, generally within 16 days following origination. Loans originated under the RCS installment loan program are carried at fair value under a fair-value option, with the portfolio marked to market monthly.

Activity for consumer loans HFS and carried at fair value follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2025		2024		2025		2024

Balance, beginning of period	$	8,312	$	8,341	$	5,443	$	7,914
Origination of consumer loans held for sale		40,388		43,268		123,200		120,668
Proceeds from the sale of consumer loans held for sale		(42,095)		(46,704)		(123,995)		(125,795)
Net gain on sale of consumer loans held for sale		1,839		1,175		3,796		3,293
Balance, end of period	$	8,444	$	6,080	$	8,444	$	6,080

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

RCS originates for sale 90% or 95% of the balances from its LOC products and 100% for some of its healthcare receivables products. Ordinary gains or losses on the sale of these RCS products are reported as a component of “Program fees.”

During the first quarter of 2025, Management reached an agreement to sell $5 million of consumer credit cards, and as a result, these balances were re-designated from held for investment to HFS as of March 31, 2025 with the sale finalized during the second quarter of 2025.

Activity for consumer loans HFS 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)	2025		2024		2025		2024

Balance, beginning of period	$	19,640	$	23,860	$	18,632	$	16,094
Origination of consumer loans held for sale		231,330		307,145		736,296		820,233
Transferred from held for investment to held for sale		—		—		4,977		—
Proceeds from the sale of consumer loans held for sale		(236,813)		(314,206)		(750,891)		(824,454)
Net gain on sale of consumer loans held for sale		2,267		3,002		7,410		7,928
Balance, end of period	$	16,424	$	19,801	$	16,424	$	19,801