The Company performed a strategic evaluation of its businesses in the third quarter of 2014 and decided to discontinue its Philadelphia commercial lending operations to focus on its specialty finance lending. The loans which constitute the commercial loan portfolio are in the process of disposition including transfers to other financial institutions. As such, financial results of the commercial lending operations are presented as separate from continuing operations on the consolidated statements of operations and assets of the commercial lending operations to be disposed of are presented as assets held-for-sale on the consolidated balance sheets.

The following table presents financial results of the commercial lending business included in net loss from discontinued operations for the three and nine months ended September 30, 2021 and 2020 (in thousands):



	For the three months ended September 30,				For the nine months ended September 30,
	2021		2020		2021		2020
Interest income	$	754	$	890	$	2,388	$	3,259
Interest expense		—		—		—		—
Net interest income		754		890		2,388		3,259

Non-interest income		48		4		51		18
Non-interest expense		715		2,565		2,115		5,997

Income (loss) before taxes		87		(1,671)		324		(2,720)
Income tax expense (benefit)		21		(1,794)		76		(2,058)
Net income (loss)	$	66	$	123	$	248	$	(662)

The following table presents assets held-for-sale from discontinued operations at September 30, 2021 and December 31, 2020 (in thousands):


	September 30,		December 31,
	2021		2020
Loans, net	$	69,435	$	91,316
Other real estate owned		18,469		22,334
Total assets	$	87,904	$	113,650

Non-interest expense for the respective three and nine month periods ended September 30, 2021 reflected $384,000 and $1.5 million of recoveries of prior losses on loans. For the respective three and nine month periods ended September 30, 2020 non-interest expense included loan fair value and realized losses of $1.4 million and $2.3 million. Also in non-interest expense are expenses and losses related to other real estate owned of $745,000 and $2.3 million for the three and nine month periods ended September 30, 2021 and $2.1 million and $3.8 million for the three and nine month periods ended September 30, 2020, respectively. Discontinued operations loans are recorded at the lower of their cost or fair value. Fair value is determined using a discontinued cash flow analysis where projections of cash flows are developed in consideration of internal loan review analysis and default/prepayment assumptions for smaller pools of loans. These credit and collateral related assumptions are subject to uncertainty. The results of discontinued operations do not include any future severance payments. Of the approximately $1.1 billion in book value of loans in that portfolio as of the September 30, 2014 date of discontinuance of operations, $87.9 million of loans and other real estate owned remain in assets held-for-sale on the September 30, 2021 consolidated balance sheet as a result of loan sales, principal paydowns and fair value charges as of September 30, 2021. The Company is attempting to dispose of those remaining loans and other real estate owned.