v3.26.1
Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
Derivative instruments are used as part of the overall strategy to manage exposure to, or to hedge, interest rate risks related to the Pipeline and the MSR portfolio. The Company economically hedges the Pipeline separately from the MSR portfolio primarily using third-party derivative instruments. Such derivative instruments utilized by the Company include IRLCs, LPCs, Forward commitments, and Treasury futures. The Company’s derivative instruments are not designated as accounting hedging instruments, and therefore, changes in fair value are recorded in current period Net income (loss). Changes in the fair value of IRLCs, LPCs, and Pipeline hedges are recognized in Gain on sale of loans, net on the Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). Changes in the fair value of all derivative instruments economically hedging the MSR portfolio are recorded in Change in fair value of MSRs, net on the Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). The cash flows related to IRLCs, LPCs, and Pipeline hedges are included within the Gain on sale of loans excluding fair value of originated MSRs, net and the cash flows related to MSR hedges are included within Other operating activities, both in the Condensed Consolidated Statements of Cash Flows.

The gains (losses) recognized by the Company on all derivative activity, including IRLCs, LPCs, Pipeline hedges and MSR hedges were as follows:

Statements of Income (Loss) LineThree Months Ended June 30,Six Months Ended June 30,
Derivative activity2026202520262025
IRLCs, LPCs and Pipeline hedgesGain on sale of loans, net$(18)$7 $291 $57 
MSR hedgesChange in fair value of MSRs, net$(48)$45 $(207)$47 

Refer to Note 3, Fair Value Measurements, for additional information on the fair value of derivative financial instruments.
Notional and Fair Value

The notional and fair values of derivative financial instruments were as follows:
Notional ValueDerivative AssetDerivative Liability
Balance at June 30, 2026:
Assets:
IRLCs, net of loan funding probability (1)
$11,761 $345 $— 
LPCs, net of loan funding probability
1,082 5 — 
Forward commitments
13,877 100 — 
Treasury futures
6,641 40 — 
Total Derivative assets$33,361 $490 $— 
Liabilities:
LPCs, net of loan funding probability$967 $— $3 
Forward commitments
17,416 — 81 
Treasury futures
671 — 1 
Total Derivative liabilities$19,054 $— $85 
Balance at December 31, 2025:
Assets:
IRLCs, net of loan funding probability (1)
$9,611 $294 $— 
LPCs, net of loan funding probability
690 4 — 
Forward commitments
16,073 62 — 
Treasury futures
12 — — 
Total Derivative assets$26,386 $360 $— 
Liabilities:
LPCs, net of loan funding probability$287 $— $1 
Forward commitments
19,446 — 98 
Treasury futures
5,252 — 46 
Total Derivative liabilities$24,985 $— $145 
(1)    See Note 11, Commitments and Contingencies for further discussion of IRLC.

As of June 30, 2026, the Company held $101 and $31 in collateral deposits and collateral obligations on derivative instruments, respectively. As of December 31, 2025, the Company held $238 and $30 in collateral deposits and collateral obligations on derivative instruments, respectively. Collateral deposits and collateral obligations are held within Other assets and Accounts payable and other liabilities on our Condensed Consolidated Balance Sheets, respectively.

Counterparty Credit Risk

There were no material changes to the Company’s counterparty credit risk management policies, as described in the 2025 Form 10-K, during the three and six months ended June 30, 2026, and no credit losses were incurred due to counterparty nonperformance.