Mortgage Banking Derivatives

12 Months Ended

Dec. 31, 2018

Note 17: Mortgage Banking Derivatives

Commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives. It is the Company’s practice to sell mortgage-backed securities (“MBS”) contracts for the future delivery to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. These contracts are also derivatives and collectively with the forward commitments for the future delivery of mortgage loans are considered forward contracts. These mortgage banking derivatives are not designated in hedge relationships using the accepted accounting for derivative instruments and hedging activities at December 31:


	2018		2017
Forward contracts:
Notional amount	$	9,315	$	16,500
Fair value		(50)		3

Rate lock commitments:
Notional amount	$	8,815	$	10,478
Fair value		209		235

Fair values were estimated based on changes in mortgage interest rates from the date of the commitments. The Company sold $133.9 million in loans to investors receiving proceeds of $137.6 million and resulting in a gain on sale of $3.8 million for the year ended December 31, 2018. Sales to investors included $93.9 million, or 69.4%, to FNMA and $14.8 million, or 11.0%,to FHLMC for the year ended December 31, 2018. No other individual investor was sold more than 10% of the total loans sold.