Note 2 – Sale of Subsidiary

Avon-Dixon Agency Sale

On December 31, 2018, the Company completed the sale of the specific assets and activities related to its insurance agency, Avon-Dixon Agency, LLC (“Avon-Dixon”) to Avon-Dixon, an Alera Group Agency, LLC (“Alera”). Also, on this date the Company discontinued the operations of its premium finance company, Mubell Finance, LLC (“Mubell”). Together, Avon-Dixon and Mubell companies are referred to as the “Insurance Subsidiaries”. The Insurance Subsidiaries represented the Company’s insurance products and services segment, the activities of which related to originating, servicing and underwriting retail insurance policies. Assets sold to Alera included various intangible assets and a 40% interest in segregated portfolio of Eastern Re. LTD., a specialty reinsurance company. Mubell, along with certain other assets and liabilities that will be sold or settled separately within one year, is classified as discontinued operations in the accompanying Consolidated Balance Sheets and Consolidated Statements of Income.

The specific assets acquired by Alera include, among other things, the insurance origination offices, insurance expirations, workforce and system procedures, trade names and goodwill. Alera has assumed certain obligations and liabilities of the Company under the acquired leases, and with respect to the employment of transferred employees. The Company received a $25.2 million cash payment, upon the closing of the transaction.

The following table summarizes the calculation of the net gain on disposal of discontinued operations.


($ in thousands)	Year Ended December 31, 2018
Proceeds from the transaction	$	29,276
Compensation expense related to the transaction		2,588
Broker fees		935
Other transaction costs		594
Net cash proceeds		25,159
Net assets sold		(12,423)
Net gain on disposal	$	12,736

The following tables present the financial information of discontinued operations as of the dates and for the periods indicated:


	September 30,		December 31,
($ in thousands)	2019		2018
ASSETS

Goodwill	$	—	$	8
Other assets		—		625
Assets of discontinued operations	$	—	$	633

LIABILITIES

Accrued expenses and other liabilities	$	—	$	3,323
Liabilities of discontinued operations	$	—	$	3,323


	For Three Months Ended				For Nine Months Ended
	September 30,				September 30,
($ in thousands)	2019		2018		2019		2018
Noninterest income
Insurance agency commissions	$	—	$	2,170	$	—	$	7,015
All other income		—		76		15		264
Total noninterest income		—		2,246		15		7,279
Noninterest expense
Salaries and wages		—		1,307		28		3,836
Employee benefits		—		288		7		953
Occupancy expense		—		121		14		330
Furniture and equipment		—		38		1		98
Amortization of intangible assets		—		12		—		35
Legal and professional fees		2		20		73		54
Other noninterest expenses		8		191		5		656
Total noninterest expense		10		1,977		128		5,962
(Loss) income from discontinued operations before income taxes		(10)		269		(113)		1,317
Income tax (benefit) expense		(2)		71		(27)		324
(Loss) income from discontinued operations	$	(8)	$	198	$	(86)	$	993