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SALE OF BUSINESS UNIT (DISCONTINUED OPERATIONS) (Tables)
 6 Months Ended
Jun. 30, 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 June 30,
 
Six Months Ended June 30,
 
Total Net Gain on Disposal After Completion of Sale
($ in thousands)
 
2018
 
2017
 
2018
 
2017
 
Proceeds from the transaction
 
$
—

 
$
(264
)
 
$
—

 
$
63,068

 
$
63,054

Compensation expense related to the transaction
 
—

 
500

 
1,003

 
(3,500
)
 
(2,497
)
Other transaction costs
 
272

 
—

 
272

 
(3,703
)
 
(3,159
)
Net cash proceeds
 
272

 
236

 
1,275

 
55,865

 
57,398

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
 
$
272

 
$
236

 
$
1,275

 
$
13,538

 
$
15,071

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)
 
June 30, 2018
 
December 31, 2017
ASSETS
 
 
 
 
Loans held-for-sale, carried at fair value (1) (2)
 
$
26,415

 
$
38,696

Other assets
 
—

 
204

Assets of discontinued operations
 
$
26,415

 
$
38,900

LIABILITIES
 
 
 
 
Accrued expenses and other liabilities (1)
 
$
—

 
$
7,819

Liabilities of discontinued operations
 
$
—

 
$
7,819

(1)
Includes $0 and $7.1 million of loans sold to Government National Mortgage Association (GNMA) that were delinquent more than 90 days and subject to a repurchase option by the Company at June 30, 2018 and December 31, 2017, respectively. 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 $10.7 million and $24.1 million of non-performing loans at June 30, 2018 and December 31, 2017.

Statements of Operations of Discontinued Operations
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
($ in thousands)
 
2018
 
2017
 
2018
 
2017
Interest income
 
 
 
 
 
 
 
 
Loans, including fees
 
$
189

 
$
2,796

 
$
375

 
$
6,062

Total interest income
 
189

 
2,796

 
375

 
6,062

Noninterest income
 
 
 
 
 
 
 
 
Net gain on disposal
 
272

 
236

 
1,275

 
13,538

Loan servicing income
 
—

 
—

 
—

 
1,551

Net revenue on mortgage banking activities
 
56

 
13,636

 
288

 
43,070

All other income
 
779

 
238

 
1,414

 
752

Total noninterest income
 
1,107

 
14,110

 
2,977

 
58,911

Noninterest expense
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
6

 
13,593

 
15

 
37,968

Occupancy and equipment
 
—

 
1,038

 
—

 
3,395

Professional fees
 
—

 
2,090

 
—

 
2,192

Outside Service Fees
 
—

 
3,249

 
—

 
5,613

Data processing
 
—

 
63

 
—

 
527

Advertising
 
—

 
449

 
—

 
1,282

Restructuring expense
 
—

 
297

 
—

 
3,515

All other expenses
 
9

 
1,118

 
12

 
2,124

Total noninterest expense
 
15

 
21,897

 
27

 
56,616

Income (loss) from discontinued operations before income taxes
 
1,281

 
(4,991
)
 
3,325

 
8,357

Income tax expense
 
355

 
(2,110
)
 
915

 
3,413

Income (loss) from discontinued operations
 
$
926

 
$
(2,881
)
 
$
2,410

 
$
4,944

Statements of Cash Flows of Discontinued Operations
 
 
Six Months Ended June 30,
($ in thousands)
 
2018
 
2017
Net cash provided by operating activities
 
$
7,076

 
$
250,170

Net cash provided by investing activities
 
—

 
55,865

Net cash provided by discontinued operations
 
$
7,076

 
$
306,035