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SALE OF BUSINESS UNIT (DISCONTINUED OPERATIONS) (Tables)
 9 Months Ended
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