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SALE OF BUSINESS UNIT (DISCONTINUED OPERATIONS) (Tables)
 3 Months Ended
Mar. 31, 2018
Discontinued Operations and Disposal Groups [Abstract]  
Schedule of disposal groups and discontinued operations
The following table summarizes the calculation of the net gain on disposal of discontinued operations:
 
 
Three Months Ended March 31,
 
Total Net Gain on Disposal After Completion of Sale
($ in thousands)
 
2018
 
2017
 
Proceeds from the transaction
 
$
—

 
$
63,332

 
$
63,054

Compensation expense related to the transaction
 
1,003

 
(4,000
)
 
(2,497
)
Other transaction costs
 
—

 
(3,703
)
 
(3,431
)
Net cash proceeds
 
1,003

 
55,629

 
57,126

Book value of certain assets sold
 
—

 
(2,455
)
 
(2,455
)
Book value of MSRs sold
 
—

 
(37,772
)
 
(37,772
)
Goodwill
 
—

 
(2,100
)
 
(2,100
)
Net gain on disposal
 
$
1,003

 
$
13,302

 
$
14,799

The Banc Home Loans division originated conforming SFR mortgage loans and sold these loans in the secondary market. The amount of net revenue on mortgage banking activities was a function of mortgage loans originated for sale and the fair values of these loans and related derivatives. Net revenue on mortgage banking activities included mark to market pricing adjustments on loan commitments and forward sales contracts, and initial capitalized value of MSRs.
The following tables present the financial information of discontinued operations as of the dates or for the periods indicated:
Statements of Financial Condition of Discontinued Operations
($ in thousands)
 
March 31, 2018
 
December 31, 2017
ASSETS
 
 
 
 
Loans held-for-sale, carried at fair value (1) (2)
 
$
29,888

 
$
38,696

Other assets
 
—

 
204

Assets of discontinued operations
 
$
29,888

 
$
38,900

LIABILITIES
 
 
 
 
Accrued expenses and other liabilities (1)
 
$
9

 
$
7,819

Liabilities of discontinued operations
 
$
9

 
$
7,819

(1)
Includes $0 and $7.1 million of loans sold to Government National Mortgage Association (GNMA), respectively, that were delinquent more than 90 days and subject to a repurchase option by the Company at March 31, 2018 and December 31, 2017. As such, the Company was deemed to have regained control over those previously transferred assets and has re-recognized them with an offsetting liability in Accrued Expenses and Other Liabilities in the Statements of Financial Condition of Discontinued Operations, as a secured borrowing. Because the Company intends to exercise its option to repurchase and sell them within one year, they have been classified as part of discontinued operations.
(2)
Includes $13.9 million and $24.1 million of non-performing loans at March 31, 2018 and December 31, 2017.
Statements of Operations of Discontinued Operations
 
 
Three Months Ended March 31,
($ in thousands)
 
2018
 
2017
Interest income
 
 
 
 
Loans, including fees
 
$
186

 
$
3,266

Total interest income
 
186

 
3,266

Noninterest income
 
 
 
 
Net gain on disposal
 
1,003

 
13,302

Loan servicing income
 
—

 
1,551

Net revenue on mortgage banking activities
 
232

 
29,434

All other income
 
635

 
514

Total noninterest income
 
1,870

 
44,801

Noninterest expense
 
 
 
 
Salaries and employee benefits
 
9

 
24,375

Occupancy and equipment
 
—

 
2,357

Professional fees
 
—

 
102

Outside Service Fees
 
—

 
2,364

Data processing
 
—

 
464

Advertising
 
—

 
833

Restructuring expense
 
—

 
3,218

All other expenses
 
3

 
1,006

Total noninterest expense
 
12

 
34,719

Income from discontinued operations before income taxes
 
2,044

 
13,348

Income tax expense
 
560

 
5,523

Income from discontinued operations
 
$
1,484

 
$
7,825

Statements of Cash Flows of Discontinued Operations
 
 
Three Months Ended March 31,
($ in thousands)
 
2018
 
2017
Net cash provided by (used in) operating activities
 
$
2,686

 
$
(10,111
)
Net cash provided by investing activities
 
—

 
55,629

Net cash provided by discontinued operations
 
$
2,686

 
$
45,518