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DISCONTINUED OPERATIONS | 12 Months Ended
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Dec. 31, 2021
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS: On March 31, 2019, the Board adopted a Resolution of Exit or Disposal of HLC Based Mortgage Banking Operations to sell or abandon the assets and related personnel associated with those operations. The assets that were sold or abandoned largely represented the Company's former Mortgage Banking segment, the activities of which related to originating, servicing, underwriting, funding and selling single family residential mortgage loans. The Company determined that the above actions constituted commitment to a plan of exit or disposal of certain long-lived assets (through sale or abandonment) and termination of employees. Further, the Company determined that the shift from a large-scale HLC based originator and servicer to a branch-focused product offering represented a strategic shift. As a result, the HLC-related mortgage banking operations are reported separately from the continuing operations as discontinued operations. In addition, the former Mortgage Banking operating segment and reporting unit were eliminated. This has resulted in a recast of the financial statements in 2019 and prior. In the first quarter of 2019, the Company successfully closed and settled two sales of the rights to service $14.3 billion in total unpaid principal balance of single family mortgage loans serviced for Fannie Mae, Freddie Mac and Ginnie Mae. These sales resulted in a $0.9 million pre-tax loss from discontinued operations during 2019. In June 2019 the Company completed the sale of the HLC based mortgage originations business assets and transfer of personnel to Homebridge Financial Services, Inc. ("Homebridge"). This sale included 47 stand-alone HLCs and the transfer of certain related mortgage personnel. These HLCs, along with certain other mortgage banking related assets and liabilities are classified as discontinued operations in the accompanying consolidated balance sheets and consolidated income statements. HLCs that were not sold were closed during the second quarter of 2019. Certain bank location-based components of the Company's former Mortgage Banking segment, including MSRs on certain mortgage loans that were not part of the sales and right-of-use assets and lease liabilities where we did not obtain full landlord release have been classified as continuing operations. In November 2019, we sold our ownership interest in WMS LLC at our basis. These discontinued operations activities were concluded by December 31, 2019. Consequently, we ceased discontinued operations accounting effective January 1, 2020. The following table summarizes the calculation of the net gain (loss) on disposal of discontinued operations for 2019:
(in thousands) |  |
Proceeds from asset sales |  | $ | 186,692 |
Book value of assets sold |  | 181,243 |
Gain on assets sold |  | 5,449 |
Transaction costs |  | 8,770 |
Compensation expense related to the transactions |  | 4,636 |
Facility and IT related costs |  | 13,660 |
Total costs |  | 27,066 |
Net loss on disposal |  | $ | (21,617) |
The carrying amount of major classes of assets and liabilities related to discontinued operations consisted of the following at December 31, 2019:
(in thousands) |  |  |
Assets of discontinued operations |  |  |
LHFS at fair value |  |  | $ | 26,123 |
Other assets |  |  | 2,505 |
Total |  |  | $ | 28,628 |
Liabilities of discontinued operations |  |  |
Account payable and other liabilities |  |  | $ | 2,603 |
Income Statement of Discontinued Operations for 2019:
(in thousands) |  |
Net interest income |  | $ | 5,858 |
Noninterest income |  | 63,713 |
Noninterest expense |  | 97,856 |
Loss before income taxes |  | (28,285) |
Income tax (benefit) expense |  | (5,077) |
Loss from discontinued operations |  | $ | (23,208) |
Cash Flows from Discontinued Operations for 2019:
(in thousands) |  |  |
Net cash provided by operating activities |  | $ | 238,212 |  |
Net cash provided by investing activities |  | 185,458 |  |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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