Discontinued operations

OMHHF historically was engaged in the business of originating and servicing FHA-insured multifamily and healthcare facility loans and securitizing these loans into GNMA mortgage backed securities. OMHHF offered mortgage services to developers of commercial properties including apartments, elderly housing and nursing homes that satisfy FHA criteria. OMHHF maintained a mortgage servicing portfolio for which it provided a full array of services, including the collection of mortgage payments from mortgagors which were passed on to the mortgage holders, construction loan management and asset management.

The Company owns an 83.68% controlling interest in OMHHF. The 16.32% noncontrolling interest belongs to one related party who was the President and Chief Executive Officer of OMHHF.

On June 2, 2016, OMHHF entered into a definitive agreement to sell OMHHF's entire portfolio of permanent mortgage loans (consisting of over 480 permanent loans insured by the U.S. Department of Housing and Urban Development), including the associated mortgage servicing rights. On June 20, 2016, OMHHF completed the transaction for cash consideration of approximately $45.0 million. An amount equal to $1.4 million was withheld from the purchase price until such time as one loan in the mortgage loan portfolio becomes current or is modified. The Company recorded a net gain of $14.9 million related to this transaction which was included in discontinued operations in the condensed consolidated statement of operations during the second quarter of 2016. During the second quarter of 2016, OMHHF also sold its business pipeline of mortgage loans for approximately $1.5 million. During the third quarter of 2016, the Company recognized the $1.4 million that was withheld from the purchase price of the permanent mortgage loans as a result of the loan being modified as a gain. Also, OMHHF sold its construction loan portfolio and the associated mortgage servicing rights for approximately $3.8 million.

OMHHF made dividend distributions to the noncontrolling interest in the amounts of $1.6 million and $2.4 million during the three and nine month periods ended September 30, 2017, respectively.

The Company determined that the sale of the assets of OMHHF met the criteria to be classified within discontinued operations, and the results of OMHHF are reported as discontinued operations in the condensed consolidated statement of operations.

The following is a summary of revenue and expenses of OMHHF for the three and nine months ended September 30, 2017 and 2016:



(Expressed in thousands)
	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2017		2016			2017		2016
REVENUE
Interest	$	2	$	112		$	7	$	921
Principal transactions, net	—		(2,380		)	—		(9,008		)
Gain on sale of assets	—		—			—		14,916
Other ⁽¹⁾	783		4,073			1,887		16,631
Total revenue	785		1,805			1,894		23,460
EXPENSES
Compensation and related expenses	1		573			18		4,225
Communications and technology	8		40			20		201
Occupancy and equipment costs	—		37			—		399
Interest	7		28			7		408
Other	—		239			15		2,630
Total expenses	16		917			60		7,863
Income before income taxes	$	769	$	888		$	1,834	$	15,597
Income attributable to noncontrolling interest before income taxes	$	126	$	145		$	299	$	2,545


(1)	Other revenue for the three and nine months ended September 30, 2017 was primarily due to an earn-out from the sale of OMHHF's pipeline business in 2016.

The following is a summary of cash flows of OMHHF for the nine months ended September 30, 2017 and 2016:



(Expressed in thousands)
	For the Nine Months Ended September 30,
	2017			2016
Cash provided by (used in) operating activities	$	4,789		$	(4,143	)
Cash provided by investing activities	—			47,562
Cash used in financing activities ⁽¹⁾⁽²⁾	(20,035		)	(35,358		)
Net (decrease) increase in cash and cash equivalents	$	(15,246	)	$	8,061


(1)	Includes cash dividends paid to its parent (E.A. Viner International Co.) and noncontrolling interest of $12.6 million and $2.4 million, respectively, for the nine months ended September 30, 2017.


(2)	Includes $5.0 million paid to its parent due to redemption of its outstanding preferred stock for the nine months ended September 30, 2017.