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SALE OF BUSINESS UNIT (DISCONTINUED OPERATIONS) (Tables) | 9 Months Ended
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Sep. 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 September 30, |  | Nine Months Ended September 30, |  | Total Net Gain on Disposal After Completion of Sale
($ in thousands) |  | 2018 |  | 2017 |  | 2018 |  | 2017 |
Proceeds from the transaction |  | $ | — |  |  | $ | (14 | ) |  | $ | — |  |  | $ | 63,054 |  |  | $ | 63,054 |
Compensation expense related to the transaction |  | — |  |  | — |  |  | 1,003 |  |  | (3,500 | ) |  | (2,497 | )
Other transaction costs |  | — |  |  | 225 |  |  | 272 |  |  | (3,478 | ) |  | (3,159 | )
Net cash proceeds |  | — |  |  | 211 |  |  | 1,275 |  |  | 56,076 |  |  | 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 |  | $ | — |  |  | $ | 211 |  |  | $ | 1,275 |  |  | $ | 13,749 |  |  | $ | 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) |  | September 30, 2018 |  | December 31, 2017
ASSETS |  |  |  |
Loans held-for-sale, carried at fair value (1) (2) |  | $ | 20,290 |  |  | $ | 38,696 |
Other assets |  | — |  |  | 204 |
Assets of discontinued operations |  | $ | 20,290 |  |  | $ | 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 September 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 $9.3 million and $24.1 million of non-performing loans at September 30, 2018 and December 31, 2017.
Statements of Operations of Discontinued Operations
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
($ in thousands) |  | 2018 |  | 2017 |  | 2018 |  | 2017
Interest income |  |  |  |  |  |  |  |
Loans, including fees |  | $ | 130 |  |  | $ | 917 |  |  | $ | 505 |  |  | $ | 6,979 |
Total interest income |  | 130 |  |  | 917 |  |  | 505 |  |  | 6,979 |
Noninterest income |  |  |  |  |  |  |  |
Net gain on disposal |  | — |  |  | 211 |  |  | 1,275 |  |  | 13,749 |
Loan servicing income |  | — |  |  | — |  |  | — |  |  | 1,551 |
Net revenue from mortgage banking activities |  | 108 |  |  | 13 |  |  | 396 |  |  | 43,083 |
All other income |  | 786 |  |  | 238 |  |  | 2,200 |  |  | 990 |
Total noninterest income |  | 894 |  |  | 462 |  |  | 3,871 |  |  | 59,373 |
Noninterest expense |  |  |  |  |  |  |  |
Salaries and employee benefits |  | 5 |  |  | 416 |  |  | 20 |  |  | 38,384 |
Occupancy and equipment |  | — |  |  | 359 |  |  | — |  |  | 3,754 |
Professional fees |  | — |  |  | 270 |  |  | — |  |  | 2,462 |
Outside Service Fees |  | — |  |  | 567 |  |  | — |  |  | 6,180 |
Data processing |  | — |  |  | 141 |  |  | — |  |  | 668 |
Advertising |  | — |  |  | 75 |  |  | — |  |  | 1,357 |
Restructuring expense |  | — |  |  | 279 |  |  | — |  |  | 3,794 |
All other expenses |  | 95 |  |  | 1,230 |  |  | 107 |  |  | 3,354 |
Total noninterest expense |  | 100 |  |  | 3,337 |  |  | 127 |  |  | 59,953 |
Income (loss) from discontinued operations before income taxes |  | 924 |  |  | (1,958 | ) |  | 4,249 |  |  | 6,399 |
Income tax expense (benefit) |  | 256 |  |  | (799 | ) |  | 1,171 |  |  | 2,614 |
Income (loss) from discontinued operations |  | $ | 668 |  |  | $ | (1,159 | ) |  | $ | 3,078 |  |  | $ | 3,785 |
Statements of Cash Flows of Discontinued Operations
|  | Nine Months Ended September 30,
($ in thousands) |  | 2018 |  | 2017
Net cash provided by operating activities |  | $ | 13,869 |  |  | $ | 348,648 |
Net cash provided by investing activities |  | — |  |  | 56,076 |
Net cash provided by discontinued operations |  | $ | 13,869 |  |  | $ | 404,724 |

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