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LOANS AND LEASES RECEIVABLE, NET | 12 Months Ended
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Sep. 30, 2019
Loans and Leases Receivable Disclosure [Abstract] |
LOANS AND LEASES RECEIVABLE, NET | LOANS AND LEASES RECEIVABLE, NET Loans and Leases Loan and lease tables have been conformed to be consistent with the Company's updated categorization of its lending portfolio between National Lending and Community Banking. Fiscal year-end loans and leases receivable were as follows:
(Dollars in Thousands) | September 30, 2019 |  | September 30, 2018
National Lending |  |  |
Asset based lending | $ | 688,520 |  |  | $ | 477,917 |
Factoring | 296,507 |  |  | 284,221 |
Lease financing | 381,602 |  |  | 265,315 |
Insurance premium finance | 361,105 |  |  | 337,877 |
SBA/USDA | 88,831 |  |  | 59,374 |
Other commercial finance | 99,665 |  |  | 85,145 |
Commercial finance | 1,916,230 |  |  | 1,509,849 |
Consumer credit products | 106,794 |  |  | 80,605 |
Other consumer finance | 161,404 |  |  | 189,756 |
Consumer finance(1) | 268,198 |  |  | 270,361 |
Tax services | 2,240 |  |  | 1,073 |
Warehouse finance(1) | 262,924 |  |  | 65,000 |
Total National Lending | 2,449,592 |  |  | 1,846,283 |
Community Banking |  |  |
Commercial real estate and operating | 883,932 |  |  | 790,890 |
Consumer one-to-four family real estate and other | 259,425 |  |  | 247,318 |
Agricultural real estate and operating | 58,464 |  |  | 60,498 |
Total Community Banking | 1,201,821 |  |  | 1,098,706 |
Total loans and leases | 3,651,413 |  |  | 2,944,989 |
Net deferred loan origination fees (costs) | 7,434 |  |  | (250 | )
Total gross loans and leases | 3,658,847 |  |  | 2,944,739 |
Allowance for loan and lease losses | (29,149 | ) |  | (13,040 | )
Total loans and leases, net(2) | $ | 3,629,698 |  |  | $ | 2,931,699 |
(1) Warehouse finance loans are presented in their own line. Previously, these balances were included with consumer finance loans. Prior period balances have also been adjusted to reflect this change. (2) As of September 30, 2019, the remaining balance of acquired loans and leases from the Crestmark Acquisition was $312.5 million and the remaining balances of the credit and interest rate mark discounts related to the acquired loans and leases held for investment were $5.6 million and $2.6 million, respectively, while the remaining balance of the interest rate mark premium related to the acquired loans held for sale was $0.7 million. On August 1, 2018, the Company acquired loans and leases from the Crestmark Acquisition totaling $1.06 billion and recorded related credit and interest rate mark discounts of $12.3 million and $6.0 million, respectively. During the fiscal year ended September 30, 2019, the Company transferred $100.0 million of consumer credit product loans to held for sale and originated $171.3 million of SBA/USDA and consumer credit product loans as held for sale. The Company sold held for sale loans resulting in proceeds of $125.4 million and gains on sale of $5.1 million during the fiscal year ended September 30, 2019. The Company sold held for sale loans resulting in proceeds of $17.6 million and gains on sale of $0.4 million during the fiscal year ended September 30, 2018. Loans purchased and sold by portfolio segment, including participation interests, for the fiscal years ended September 30, 2019 and 2018 were as follows:
| Fiscal Year Ended
(Dollars in Thousands) | September 30, 2019 |  | September 30, 2018
Loans Purchased |  |  |
Loans held for sale | $ | 15,443 |  |  | $ | — |
Loans held for investment: |  |  |
Total National Lending | 235,918 |  |  | 137,751 |
Total Community Banking | 26,704 |  |  | 27,919 |
Total purchases | 278,065 |  |  | 165,670 |
Loans Sold |  |  |
Loans held for sale | 121,071 |  |  | 17,621 |
Loans held for investment: |  |  |
Total Community Banking | 13,069 |  |  | 22,611 |
Total sales | $ | 134,140 |  |  | $ | 40,232 |
The net investment in direct financing and sales-type leases was comprised of the following as of September 30, 2019 and September 30, 2018.
| September 30, 2019 |  | September 30, 2018
(Dollars in Thousands) |  |  |
Minimum lease payments receivable | $ | 430,391 |  |  | $ | 301,835 |
Estimated residual value of leased equipment | 13,352 |  |  | 12,406 |
Unamortized initial direct costs | 6,026 |  |  | 1,806 |
Premium on acquired leases | — |  |  | 26 |
Unearned income | (62,088 | ) |  | (48,949 | )
Net investment in direct financing and sales-type leases | $ | 387,681 |  |  | $ | 267,124 |
Future minimum lease payments receivable on noncancelable direct financing and sales-type leases were as follows as of September 30, 2019.
| As of September 30, 2019
(Dollars in thousands) |
2020 | $ | 146,067 |
2021 | 124,702 |
2022 | 85,081 |
2023 | 50,625 |
2024 | 21,007 |
2025 and thereafter | 2,909 |
Total | $ | 430,391 |
The Company did not record any contingent rental income from sales-type and direct financing leases in the fiscal year ended September 30, 2019. Annual activity in the allowance for loan and lease losses was as follows:
Fiscal Year Ended September 30, | 2019 |  | 2018 |  | 2017
(Dollars in Thousands) |  |  |  |  |
Beginning balance | $ | 13,040 |  |  | $ | 7,534 |  |  | $ | 5,635 |
Provision for loan and lease losses | 55,650 |  |  | 29,433 |  |  | 10,589 |
Recoveries | 3,313 |  |  | 2,037 |  |  | 307 |
Charge offs | (42,854 | ) |  | (25,964 | ) |  | (8,997 | )
Ending balance | $ | 29,149 |  |  | $ | 13,040 |  |  | $ | 7,534 |
Activity in the allowance for loan and lease losses and balances of loans and leases by portfolio segment for the fiscal years ended September 30, 2019 and 2018 were as follows:
Allowance for loan and lease losses: | Beginning balance |  | Provision (recovery) for loan and lease losses |  | Charge-offs |  | Recoveries |  | Ending balance
Fiscal Year Ended September 30, 2019 |  |  |  |  |  |  |  |  |
National Lending | (Dollars in Thousands)
Asset based lending | $ | 107 |  |  | $ | 8,663 |  |  | $ | (2,486 | ) |  | $ | 159 |  |  | $ | 6,443 |
Factoring | 64 |  |  | 5,849 |  |  | (2,725 | ) |  | 73 |  |  | 3,261 |
Lease financing | 59 |  |  | 4,009 |  |  | (3,473 | ) |  | 2,207 |  |  | 2,802 |
Insurance premium finance | 1,031 |  |  | 2,361 |  |  | (2,689 | ) |  | 321 |  |  | 1,024 |
SBA/USDA | 13 |  |  | 370 |  |  | — |  |  | — |  |  | 383 |
Other commercial finance | 28 |  |  | 655 |  |  | — |  |  | — |  |  | 683 |
Commercial finance | 1,302 |  |  | 21,907 |  |  | (11,373 | ) |  | 2,760 |  |  | 14,596 |
Consumer credit products | 785 |  |  | 259 |  |  | — |  |  | — |  |  | 1,044 |
Other consumer finance | 2,820 |  |  | 8,563 |  |  | (6,346 | ) |  | 81 |  |  | 5,118 |
Consumer finance | 3,605 |  |  | 8,822 |  |  | (6,346 | ) |  | 81 |  |  | 6,162 |
Tax services | — |  |  | 24,873 |  |  | (25,095 | ) |  | 222 |  |  | — |
Warehouse finance | 65 |  |  | 198 |  |  | — |  |  | — |  |  | 263 |
Total National Lending | 4,972 |  |  | 55,800 |  |  | (42,814 | ) |  | 3,063 |  |  | 21,021 |
Community Banking |  |  |  |  |  |  |  |  |
Commercial real estate and operating | 6,220 |  |  | (12 | ) |  | — |  |  | — |  |  | 6,208 |
Consumer one-to-four family real estate and other | 632 |  |  | 461 |  |  | (40 | ) |  | — |  |  | 1,053 |
Agricultural real estate and operating | 1,216 |  |  | (599 | ) |  | — |  |  | 250 |  |  | 867 |
Total Community Banking | 8,068 |  |  | (150 | ) |  | (40 | ) |  | 250 |  |  | 8,128 |
Total | $ | 13,040 |  |  | $ | 55,650 |  |  | $ | (42,854 | ) |  | $ | 3,313 |  |  | $ | 29,149 |
Allowance for loan and lease losses: | Beginning balance |  | Provision (recovery) for loan and lease losses |  | Charge-offs |  | Recoveries |  | Ending balance
Fiscal Year Ended September 30, 2018 |  |  |  |  |  |  |  |  |
National Lending | (Dollars in Thousands)
Asset based lending | $ | — |  |  | $ | (249 | ) |  | $ | — |  |  | $ | 356 |  |  | $ | 107 |
Factoring | — |  |  | 434 |  |  | (821 | ) |  | 451 |  |  | 64 |
Lease financing | — |  |  | 147 |  |  | (135 | ) |  | 47 |  |  | 59 |
Insurance premium finance | 796 |  |  | 998 |  |  | (1,078 | ) |  | 315 |  |  | 1,031 |
SBA/USDA | — |  |  | 622 |  |  | (609 | ) |  | — |  |  | 13 |
Other commercial finance | 4 |  |  | 24 |  |  | — |  |  | — |  |  | 28 |
Commercial finance | 800 |  |  | 1,976 |  |  | (2,643 | ) |  | 1,169 |  |  | 1,302 |
Consumer credit products | — |  |  | 785 |  |  | — |  |  | — |  |  | 785 |
Other consumer finance | — |  |  | 4,263 |  |  | (1,443 | ) |  | — |  |  | 2,820 |
Consumer finance | — |  |  | 5,048 |  |  | (1,443 | ) |  | — |  |  | 3,605 |
Tax services | 5 |  |  | 21,344 |  |  | (21,802 | ) |  | 453 |  |  | — |
Warehouse finance | — |  |  | 65 |  |  | — |  |  | — |  |  | 65 |
Total National Lending | 805 |  |  | 28,433 |  |  | (25,888 | ) |  | 1,622 |  |  | 4,972 |
Community Banking |  |  |  |  |  |  |  |  |
Commercial real estate and operating | 2,820 |  |  | 3,400 |  |  | — |  |  | — |  |  | 6,220 |
Consumer one-to-four family real estate and other | 809 |  |  | (104 | ) |  | (76 | ) |  | 3 |  |  | 632 |
Agricultural real estate and operating | 2,574 |  |  | (1,769 | ) |  | — |  |  | 411 |  |  | 1,216 |
Total Community Banking | 6,203 |  |  | 1,527 |  |  | (76 | ) |  | 414 |  |  | 8,068 |
Unallocated | 527 |  |  | (527 | ) |  | — |  |  | — |  |  | — |
Total | $ | 7,534 |  |  | $ | 29,433 |  |  | $ | (25,964 | ) |  | $ | 2,037 |  |  | $ | 13,040 |
The following tables provide details regarding the allowance for loan and lease losses and balances by type of allowance as of September 30, 2019 and 2018.
| Allowance |  | Loans and Leases
Recorded Investment | Ending balance: individually evaluated for impairment |  | Ending balance: collectively evaluated for impairment |  | Total |  | Ending balance: individually evaluated for impairment |  | Ending balance: collectively evaluated for impairment |  | Total
Fiscal Year Ended September 30, 2019 |  |  |  |  |  |  |  |  |  |  |
National Lending | (Dollars in Thousands)
Asset based lending | $ | 443 |  |  | $ | 6,000 |  |  | $ | 6,443 |  |  | $ | 16,727 |  |  | $ | 671,793 |  |  | $ | 688,520 |
Factoring | 1,262 |  |  | 1,999 |  |  | 3,261 |  |  | 3,824 |  |  | 292,683 |  |  | 296,507 |
Lease financing | 119 |  |  | 2,683 |  |  | 2,802 |  |  | 4,432 |  |  | 377,170 |  |  | 381,602 |
Insurance premium finance | — |  |  | 1,024 |  |  | 1,024 |  |  | — |  |  | 361,105 |  |  | 361,105 |
SBA/USDA | 51 |  |  | 332 |  |  | 383 |  |  | 3,841 |  |  | 84,990 |  |  | 88,831 |
Other commercial finance | — |  |  | 683 |  |  | 683 |  |  | — |  |  | 99,665 |  |  | 99,665 |
Commercial finance | 1,875 |  |  | 12,721 |  |  | 14,596 |  |  | 28,824 |  |  | 1,887,406 |  |  | 1,916,230 |
Consumer credit products | — |  |  | 1,044 |  |  | 1,044 |  |  | — |  |  | 106,794 |  |  | 106,794 |
Other consumer finance | — |  |  | 5,118 |  |  | 5,118 |  |  | 1,472 |  |  | 159,932 |  |  | 161,404 |
Consumer finance | — |  |  | 6,162 |  |  | 6,162 |  |  | 1,472 |  |  | 266,726 |  |  | 268,198 |
Tax services | — |  |  | — |  |  | — |  |  | — |  |  | 2,240 |  |  | 2,240 |
Warehouse finance | — |  |  | 263 |  |  | 263 |  |  | — |  |  | 262,924 |  |  | 262,924 |
Total National Lending | 1,875 |  |  | 19,146 |  |  | 21,021 |  |  | 30,296 |  |  | 2,419,296 |  |  | 2,449,592 |
Community Banking |  |  |  |  |  |  |  |  |  |  |
Commercial real estate and operating | — |  |  | 6,208 |  |  | 6,208 |  |  | 258 |  |  | 883,674 |  |  | 883,932 |
Consumer one-to-four family real estate and other | — |  |  | 1,053 |  |  | 1,053 |  |  | 100 |  |  | 259,325 |  |  | 259,425 |
Agricultural real estate and operating | — |  |  | 867 |  |  | 867 |  |  | 2,985 |  |  | 55,479 |  |  | 58,464 |
Total Community Banking | — |  |  | 8,128 |  |  | 8,128 |  |  | 3,343 |  |  | 1,198,478 |  |  | 1,201,821 |
Total | $ | 1,875 |  |  | $ | 27,274 |  |  | $ | 29,149 |  |  | $ | 33,639 |  |  | $ | 3,617,774 |  |  | $ | 3,651,413 |
| Allowance |  | Loans and Leases
Recorded Investment | Ending balance: individually evaluated for impairment(1) |  | Ending balance: collectively evaluated for impairment(1) |  | Total |  | Ending balance: individually evaluated for impairment |  | Ending balance: collectively evaluated for impairment |  | Total
Fiscal Year Ended September 30, 2018 |  |  |  |  |  |  |  |  |  |  |
National Lending | (Dollars in Thousands)
Asset based lending | $ | — |  |  | $ | 107 |  |  | $ | 107 |  |  | $ | 1,404 |  |  | $ | 476,513 |  |  | $ | 477,917 |
Factoring | — |  |  | 64 |  |  | 64 |  |  | 3,331 |  |  | 280,890 |  |  | 284,221 |
Lease financing | — |  |  | 59 |  |  | 59 |  |  | 8,877 |  |  | 256,438 |  |  | 265,315 |
Insurance premium finance | — |  |  | 1,031 |  |  | 1,031 |  |  | — |  |  | 337,877 |  |  | 337,877 |
SBA/USDA | — |  |  | 13 |  |  | 13 |  |  | — |  |  | 59,374 |  |  | 59,374 |
Other commercial finance | — |  |  | 28 |  |  | 28 |  |  | — |  |  | 85,145 |  |  | 85,145 |
Commercial finance | — |  |  | 1,302 |  |  | 1,302 |  |  | 13,612 |  |  | 1,496,237 |  |  | 1,509,849 |
Consumer credit products | — |  |  | 785 |  |  | 785 |  |  | — |  |  | 80,605 |  |  | 80,605 |
Other consumer finance | — |  |  | 2,820 |  |  | 2,820 |  |  | — |  |  | 189,756 |  |  | 189,756 |
Consumer finance | — |  |  | 3,605 |  |  | 3,605 |  |  | — |  |  | 270,361 |  |  | 270,361 |
Tax services | — |  |  | — |  |  | — |  |  | — |  |  | 1,073 |  |  | 1,073 |
Warehouse finance | — |  |  | 65 |  |  | 65 |  |  | — |  |  | 65,000 |  |  | 65,000 |
Total National Lending | — |  |  | 4,972 |  |  | 4,972 |  |  | 13,612 |  |  | 1,832,671 |  |  | 1,846,283 |
Community Banking |  |  |  |  |  |  |  |  |  |  |
Commercial real estate and operating | — |  |  | 6,220 |  |  | 6,220 |  |  | 451 |  |  | 790,439 |  |  | 790,890 |
Consumer one-to-four family real estate and other | — |  |  | 632 |  |  | 632 |  |  | 94 |  |  | 247,224 |  |  | 247,318 |
Agricultural real estate and operating | — |  |  | 1,216 |  |  | 1,216 |  |  | 1,454 |  |  | 59,044 |  |  | 60,498 |
Total Community Banking | — |  |  | 8,068 |  |  | 8,068 |  |  | 1,999 |  |  | 1,096,707 |  |  | 1,098,706 |
Total | $ | — |  |  | $ | 13,040 |  |  | $ | 13,040 |  |  | $ | 15,611 |  |  | $ | 2,929,378 |  |  | $ | 2,944,989 |
(1) Balances have been restated from what was previously reported as of September 30, 2018 on the Company's Annual Report on Form 10-K for its fiscal year ended September 30, 2018. The asset classification of loans and leases at September 30, 2019, and 2018, were as follows:
Asset Classification | Pass |  | Watch |  | Special Mention |  | Substandard |  | Doubtful |  | Total
Fiscal Year Ended September 30, 2019 |  |  |  |  |  |  |  |  |  |  |
National Lending | (Dollars in Thousands)
Asset based lending | $ | 581,803 |  |  | $ | — |  |  | $ | 89,990 |  |  | $ | 16,183 |  |  | $ | 544 |  |  | $ | 688,520 |
Factoring | 256,048 |  |  | — |  |  | 36,635 |  |  | 3,824 |  |  | — |  |  | 296,507 |
Lease financing | 367,791 |  |  | — |  |  | 9,379 |  |  | 4,432 |  |  | — |  |  | 381,602 |
Insurance premium finance | 361,105 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 361,105 |
SBA/USDA | 76,609 |  |  | — |  |  | 8,381 |  |  | 3,841 |  |  | — |  |  | 88,831 |
Other commercial finance | 99,057 |  |  | — |  |  | 608 |  |  | — |  |  | — |  |  | 99,665 |
Commercial finance | 1,742,413 |  |  | — |  |  | 144,993 |  |  | 28,280 |  |  | 544 |  |  | 1,916,230 |
Consumer credit products | 106,794 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 106,794 |
Other consumer finance | 161,404 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 161,404 |
Consumer finance | 268,198 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 268,198 |
Tax services | 2,240 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,240 |
Warehouse finance | 262,924 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 262,924 |
Total National Lending | 2,275,775 |  |  | — |  |  | 144,993 |  |  | 28,280 |  |  | 544 |  |  | 2,449,592 |
Community Banking |  |  |  |  |  |  |  |  |  |  |
Commercial real estate and operating | 875,933 |  |  | 1,494 |  |  | 2,884 |  |  | 3,621 |  |  | — |  |  | 883,932 |
Consumer one-to-four family real estate and other | 257,575 |  |  | 946 |  |  | 708 |  |  | 196 |  |  | — |  |  | 259,425 |
Agricultural real estate and operating | 39,409 |  |  | 4,631 |  |  | 5,876 |  |  | 8,548 |  |  | — |  |  | 58,464 |
Total Community Banking | 1,172,917 |  |  | 7,071 |  |  | 9,468 |  |  | 12,365 |  |  | — |  |  | 1,201,821 |
Total loans and leases | $ | 3,448,692 |  |  | $ | 7,071 |  |  | $ | 154,461 |  |  | $ | 40,645 |  |  | $ | 544 |  |  | $ | 3,651,413 |
Asset Classification | Pass |  | Watch |  | Special Mention |  | Substandard |  | Total
Fiscal Year Ended September 30, 2018 |  |  |  |  |  |  |  |  |
National Lending | (Dollars in Thousands)
Asset based lending | $ | 418,635 |  |  | $ | — |  |  | $ | 57,877 |  |  | $ | 1,405 |  |  | $ | 477,917 |
Factoring | 248,246 |  |  | — |  |  | 32,644 |  |  | 3,331 |  |  | 284,221 |
Lease financing | 252,487 |  |  | — |  |  | 3,951 |  |  | 8,877 |  |  | 265,315 |
Insurance premium finance | 336,296 |  |  | — |  |  | 1,581 |  |  | — |  |  | 337,877 |
SBA/USDA | 39,093 |  |  | — |  |  | 20,281 |  |  | — |  |  | 59,374 |
Other commercial finance | 85,145 |  |  | — |  |  | — |  |  | — |  |  | 85,145 |
Commercial finance | 1,379,902 |  |  | — |  |  | 116,334 |  |  | 13,613 |  |  | 1,509,849 |
Consumer credit products | 80,605 |  |  | — |  |  | — |  |  | — |  |  | 80,605 |
Other consumer finance | 189,756 |  |  | — |  |  | — |  |  | — |  |  | 189,756 |
Consumer finance | 270,361 |  |  | — |  |  | — |  |  | — |  |  | 270,361 |
Tax services | 1,073 |  |  | — |  |  | — |  |  | — |  |  | 1,073 |
Warehouse finance | 65,000 |  |  |  |  |  |  |  |  | 65,000 |
Total National Lending | 1,716,336 |  |  | — |  |  | 116,334 |  |  | 13,613 |  |  | 1,846,283 |
Community Banking |  |  |  |  |  |  |  |  |
Commercial real estate and operating | 778,445 |  |  | 12,251 |  |  | 194 |  |  | — |  |  | 790,890 |
Consumer one-to-four family real estate and other | 246,463 |  |  | 537 |  |  | 239 |  |  | 79 |  |  | 247,318 |
Agricultural real estate and operating | 42,292 |  |  | 2,447 |  |  | 4,872 |  |  | 10,887 |  |  | 60,498 |
Total Community Banking | 1,067,200 |  |  | 15,235 |  |  | 5,305 |  |  | 10,966 |  |  | 1,098,706 |
Total loans and leases | $ | 2,783,536 |  |  | $ | 15,235 |  |  | $ | 121,639 |  |  | $ | 24,579 |  |  | $ | 2,944,989 |
Federal regulations provide for the classification of loans and other assets such as debt and equity securities considered by the Bank's regulator, the OCC, to be of lesser quality as “substandard,” “doubtful” or “loss.” The loan classification and risk rating definitions are as follows: Pass- A pass asset is of sufficient quality in terms of repayment, collateral and management to preclude a special mention or an adverse rating. Watch- A watch asset is generally a credit performing well under current terms and conditions but with identifiable weakness meriting additional scrutiny and corrective measures. Watch is not a regulatory classification but can be used to designate assets that are exhibiting one or more weaknesses that deserve management’s attention. These assets are of better quality than special mention assets. Special Mention- Special mention assets are a credit with potential weaknesses deserving management’s close attention and, if left uncorrected, may result in deterioration of the repayment prospects for the asset. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Special mention is a temporary status with aggressive credit management required to garner adequate progress and move to watch or higher. The adverse classifications are as follows: Substandard- A substandard asset is inadequately protected by the net worth and/or repayment ability or by a weak collateral position. Assets so classified will have well-defined weaknesses creating a distinct possibility the Bank will sustain some loss if the weaknesses are not corrected. Loss potential does not have to exist for an asset to be classified as substandard. Doubtful- A doubtful asset has weaknesses similar to those classified substandard, with the degree of weakness causing the likely loss of some principal in any reasonable collection effort. Due to pending factors, the asset’s classification as loss is not yet appropriate. Loss- A loss asset is considered uncollectible and of such little value that the asset’s continuance on the Bank’s balance sheet is no longer warranted. This classification does not necessarily mean an asset has no recovery or salvage value leaving room for future collection efforts. Loans and leases, or portions thereof, are charged off when collection of principal becomes doubtful. Generally, this is associated with a delay or shortfall in payments of 210 days or more for commercial insurance premium finance, 180 days or more for the purchased student loan portfolios, 120 days or more for consumer credit products and leases, and 90 days or more for community banking loans and commercial finance loans. Action is taken to charge off ERO loans if such loans have not been collected by the end of June and taxpayer advance loans if such loans have not been collected by the end of the calendar year. Non-accrual loans and troubled debt restructurings are generally considered impaired. Past due loans and leases at September 30, 2019 and 2018 were as follows:
Past Due Loans and Leases | Accruing and Non-accruing Loans and Leases |  | Non-performing Loans and Leases
Fiscal Year Ended September 30, 2019 | 30-59 Days Past Due |  | 60-89 Days Past Due |  | > 89 Days Past Due |  | Total Past Due |  | Current |  | Total Loans and Leases Receivable |  | > 89 Days Past Due and Accruing |  | Non-accrual balance |  | Total
(Dollars in Thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans held for sale | $ | 1,122 |  |  | $ | 755 |  |  | $ | 964 |  |  | $ | 2,841 |  |  | $ | 145,936 |  |  | $ | 148,777 |  |  | $ | 964 |  |  | $ | — |  |  | $ | 964 |
National Lending |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset based lending | 109 |  |  | 243 |  |  | 11,771 |  |  | 12,123 |  |  | 676,397 |  |  | 688,520 |  |  | 482 |  |  | 11,332 |  |  | 11,814 |
Factoring | — |  |  | — |  |  | — |  |  | — |  |  | 296,507 |  |  | 296,507 |  |  | — |  |  | 1,669 |  |  | 1,669 |
Lease financing | 3,213 |  |  | 1,801 |  |  | 4,063 |  |  | 9,077 |  |  | 372,525 |  |  | 381,602 |  |  | 3,289 |  |  | 1,122 |  |  | 4,411 |
Insurance premium finance | 1,999 |  |  | 2,881 |  |  | 3,807 |  |  | 8,687 |  |  | 352,418 |  |  | 361,105 |  |  | 3,807 |  |  | — |  |  | 3,807 |
SBA/USDA | 83 |  |  | — |  |  | 255 |  |  | 338 |  |  | 88,493 |  |  | 88,831 |  |  | — |  |  | 255 |  |  | 255 |
Other commercial finance | — |  |  | — |  |  | — |  |  | — |  |  | 99,665 |  |  | 99,665 |  |  | — |  |  | — |  |  | — |
Commercial finance | 5,404 |  |  | 4,925 |  |  | 19,896 |  |  | 30,225 |  |  | 1,886,005 |  |  | 1,916,230 |  |  | 7,578 |  |  | 14,378 |  |  | 21,956 |
Consumer credit products | 627 |  |  | 557 |  |  | 239 |  |  | 1,423 |  |  | 105,371 |  |  | 106,794 |  |  | 239 |  |  | — |  |  | 239 |
Other consumer finance | 932 |  |  | 1,005 |  |  | 1,078 |  |  | 3,015 |  |  | 158,389 |  |  | 161,404 |  |  | 1,078 |  |  | — |  |  | 1,078 |
Consumer finance | 1,559 |  |  | 1,562 |  |  | 1,317 |  |  | 4,438 |  |  | 263,760 |  |  | 268,198 |  |  | 1,317 |  |  | — |  |  | 1,317 |
Tax services | — |  |  | — |  |  | 2,240 |  |  | 2,240 |  |  | — |  |  | 2,240 |  |  | 2,240 |  |  | — |  |  | 2,240 |
Warehouse finance | — |  |  | — |  |  | — |  |  | — |  |  | 262,924 |  |  | 262,924 |  |  | — |  |  | — |  |  | — |
Total National Lending | 6,963 |  |  | 6,487 |  |  | 23,453 |  |  | 36,903 |  |  | 2,412,689 |  |  | 2,449,592 |  |  | 11,135 |  |  | 14,378 |  |  | 25,513 |
Community Banking |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate and operating | 565 |  |  | — |  |  | — |  |  | 565 |  |  | 883,367 |  |  | 883,932 |  |  | — |  |  | — |  |  | — |
Consumer one-to-four family real estate and other | 458 |  |  | — |  |  | 9 |  |  | 467 |  |  | 258,958 |  |  | 259,425 |  |  | — |  |  | 44 |  |  | 44 |
Agricultural real estate and operating | 49 |  |  | — |  |  | — |  |  | 49 |  |  | 58,415 |  |  | 58,464 |  |  | — |  |  | — |  |  | — |
Total Community Banking | 1,072 |  |  | — |  |  | 9 |  |  | 1,081 |  |  | 1,200,740 |  |  | 1,201,821 |  |  | — |  |  | 44 |  |  | 44 |
Total loans and leases held for investment | 8,035 |  |  | 6,487 |  |  | 23,462 |  |  | 37,984 |  |  | 3,613,429 |  |  | 3,651,413 |  |  | 11,135 |  |  | 14,422 |  |  | 25,557 |
Total loans and leases | $ | 9,157 |  |  | $ | 7,242 |  |  | $ | 24,426 |  |  | $ | 40,825 |  |  | $ | 3,759,365 |  |  | $ | 3,800,190 |  |  | $ | 12,099 |  |  | $ | 14,422 |  |  | $ | 26,521 |
Past Due Loans and Leases | Accruing and Non-accruing Loans and Leases |  | Non-performing Loans and Leases
Fiscal Year Ended September 30, 2018 | 30-59 Days Past Due |  | 60-89 Days Past Due |  | > 89 Days Past Due |  | Total Past Due |  | Current |  | Total Loans and Leases Receivable |  | > 89 Days Past Due and Accruing |  | Non-accrual balance |  | Total
(Dollars in Thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
National Lending |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset based lending | 1,235 |  |  | 2,151 |  |  | 94 |  |  | 3,480 |  |  | 474,437 |  |  | 477,917 |  |  | 94 |  |  | — |  |  | 94 |
Factoring | — |  |  | — |  |  | — |  |  | — |  |  | 284,221 |  |  | 284,221 |  |  | — |  |  | — |  |  | — |
Lease financing | 16,542 |  |  | 532 |  |  | 2,921 |  |  | 19,995 |  |  | 245,320 |  |  | 265,315 |  |  | 726 |  |  | 2,864 |  |  | 3,590 |
Insurance premium finance | 1,864 |  |  | 1,019 |  |  | 2,981 |  |  | 5,864 |  |  | 332,013 |  |  | 337,877 |  |  | 2,981 |  |  | — |  |  | 2,981 |
SBA/USDA | 1,067 |  |  | — |  |  | — |  |  | 1,067 |  |  | 58,307 |  |  | 59,374 |  |  | — |  |  | — |  |  | — |
Other commercial finance | — |  |  | — |  |  | — |  |  | — |  |  | 85,145 |  |  | 85,145 |  |  | — |  |  | — |  |  | — |
Commercial finance | 20,708 |  |  | 3,702 |  |  | 5,996 |  |  | 30,406 |  |  | 1,479,443 |  |  | 1,509,849 |  |  | 3,801 |  |  | 2,864 |  |  | 6,665 |
Consumer credit products | 532 |  |  | 284 |  |  | 147 |  |  | 963 |  |  | 79,642 |  |  | 80,605 |  |  | 147 |  |  | — |  |  | 147 |
Other consumer finance | 2,677 |  |  | 1,311 |  |  | 2,237 |  |  | 6,225 |  |  | 183,531 |  |  | 189,756 |  |  | 2,237 |  |  | — |  |  | 2,237 |
Consumer finance | 3,209 |  |  | 1,595 |  |  | 2,384 |  |  | 7,188 |  |  | 263,173 |  |  | 270,361 |  |  | 2,384 |  |  | — |  |  | 2,384 |
Tax services | — |  |  | — |  |  | 1,073 |  |  | 1,073 |  |  | — |  |  | 1,073 |  |  | 1,073 |  |  | — |  |  | 1,073 |
Warehouse finance | — |  |  | — |  |  | — |  |  | — |  |  | 65,000 |  |  | 65,000 |  |  | — |  |  | — |  |  | — |
Total National Lending | 23,917 |  |  | 5,297 |  |  | 9,453 |  |  | 38,667 |  |  | 1,807,616 |  |  | 1,846,283 |  |  | 7,258 |  |  | 2,864 |  |  | 10,122 |
Community Banking |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate and operating | — |  |  | — |  |  | — |  |  | — |  |  | 790,890 |  |  | 790,890 |  |  | — |  |  | — |  |  | — |
Consumer one-to-four family real estate and other | 105 |  |  | — |  |  | 79 |  |  | 184 |  |  | 247,134 |  |  | 247,318 |  |  | 79 |  |  | — |  |  | 79 |
Agricultural real estate and operating | — |  |  | — |  |  | — |  |  | — |  |  | 60,498 |  |  | 60,498 |  |  | — |  |  | — |  |  | — |
Total Community Banking | 105 |  |  | — |  |  | 79 |  |  | 184 |  |  | 1,098,522 |  |  | 1,098,706 |  |  | 79 |  |  | — |  |  | 79 |
Total loans and leases held for investment | $ | 24,022 |  |  | $ | 5,297 |  |  | $ | 9,532 |  |  | $ | 38,851 |  |  | $ | 2,906,138 |  |  | $ | 2,944,989 |  |  | $ | 7,337 |  |  | $ | 2,864 |  |  | $ | 10,201 |
Non-accruing loans and leases were $14.4 million and $2.9 million at September 30, 2019 and 2018, respectively. There were $12.1 million and $7.3 million in accruing loans and leases delinquent 90 days or more at September 30, 2019 and 2018, respectively. For the fiscal year ended September 30, 2019, gross interest income, which would have been recorded had the non-accruing loans and leases been current in accordance with their original terms, was insignificant, none of which was included in interest income. Certain loans and leases 89 days or more past due as to interest or principal continue to accrue because they are (1) well-secured and in the process of collection or (2) one-to-four family real estate loans or consumer loans exempt under regulatory rules from being classified as non-accrual until later delinquency, usually 120 days past due. When analysis of borrower operating results and financial condition indicates that underlying cash flows of the borrower’s business are not adequate to meet its debt service requirements, the loan is evaluated for impairment. Often, this is associated with a delay or shortfall in scheduled payments, as described above. Impaired loans and leases at September 30, 2019 and 2018 were as follows:
September 30, 2019 | Recorded Balance |  | Unpaid Principal Balance |  | Specific Allowance
Loans and leases without a specific valuation allowance |  |  |  |  |
National Lending | (Dollars in Thousands)
Asset based lending | $ | 12,187 |  |  | $ | 13,487 |  |  | $ | — |
Factoring | 1,563 |  |  | 2,638 |  |  | — |
Lease financing | 1,897 |  |  | 1,897 |  |  | — |
SBA/USDA | 2,595 |  |  | 2,595 |  |  | — |
Commercial finance | 18,242 |  |  | 20,617 |  |  | — |
Other consumer finance | 1,472 |  |  | 1,539 |  |  | — |
Consumer finance | 1,472 |  |  | 1,539 |  |  | — |
Total National Lending | 19,714 |  |  | 22,156 |  |  | — |
Community Banking |  |  |  |  |
Commercial real estate and operating | 258 |  |  | 258 |  |  | — |
Consumer one-to-four family real estate and other | 100 |  |  | 100 |  |  | — |
Agricultural real estate and operating | 2,985 |  |  | 2,985 |  |  | — |
Total Community Banking | 3,343 |  |  | 3,343 |  |  | — |
Total | $ | 23,057 |  |  | $ | 25,499 |  |  | $ | — |
Loans and leases with a specific valuation allowance |  |  |  |  |
National Lending |  |  |  |  |
Asset based lending | $ | 4,540 |  |  | $ | 4,567 |  |  | $ | 443 |
Factoring | 2,261 |  |  | 3,601 |  |  | 1,262 |
Lease financing | 2,535 |  |  | 2,535 |  |  | 119 |
SBA/USDA | 1,246 |  |  | 1,246 |  |  | 51 |
Commercial finance | 10,582 |  |  | 11,949 |  |  | 1,875 |
Total National Lending | 10,582 |  |  | 11,949 |  |  | 1,875 |
Total | $ | 10,582 |  |  | $ | 11,949 |  |  | $ | 1,875 |
September 30, 2018(1) | Recorded Balance |  | Unpaid Principal Balance |  | Specific Allowance
Loans and leases without a specific valuation allowance |
National Lending | (Dollars in Thousands)
Asset based lending | $ | 1,404 |  |  | $ | 1,404 |  |  | $ | — |
Factoring | 3,331 |  |  | 3,911 |  |  | — |
Lease financing | 8,877 |  |  | 8,877 |  |  | — |
Commercial finance | 13,612 |  |  | 14,192 |  |  | — |
Total National Lending | 13,612 |  |  | 14,192 |  |  | — |
Community Banking |  |  |  |  |
Commercial real estate and operating | 405 |  |  | 405 |  |  | — |
Consumer one-to-four family real estate and other | 140 |  |  | 140 |  |  | — |
Agricultural real estate and operating | 1,454 |  |  | 1,454 |  |  | — |
Total Community Banking | 1,999 |  |  | 1,999 |  |  | — |
Total | $ | 15,611 |  |  | $ | 16,191 |  |  | $ | — |
(1) Balances have been restated from what was previously reported as of September 30, 2018 on the Company's Annual Report on Form 10-K for its fiscal year ended September 30, 2018. There were no loans and leases with a specific valuation allowance at September 30, 2018. The following table provides the average recorded investment in impaired loans and leases for the fiscal years ended September 30, 2019 and 2018.
Fiscal Year Ended September 30, | 2019 |  | 2018
(Dollars in thousands) | Average Recorded Investment |  | Recognized Interest Income |  | Average Recorded Investment |  | Recognized Interest Income
National Lending |  |  |  |  |  |  |
Asset based lending | $ | 5,742 |  |  | $ | 344 |  |  | $ | 117 |  |  | $ | — |
Factoring | 4,751 |  |  | 5 |  |  | 277 |  |  | — |
Lease financing | 5,037 |  |  | 17 |  |  | 740 |  |  | — |
SBA/USDA | 639 |  |  | — |  |  | — |  |  | — |
Commercial finance | 16,169 |  |  | 366 |  |  | 1,134 |  |  | $ | — |
Other consumer finance | 1,207 |  |  | 67 |  |  | — |  |  | — |
Consumer finance | 1,207 |  |  | 67 |  |  | — |  |  | — |
Total National Lending | 17,376 |  |  | 433 |  |  | 1,134 |  |  | — |
Community Banking |  |  |  |  |  |  |
Commercial real estate and operating | 269 |  |  | 14 |  |  | 673 |  |  | 19 |
Consumer one-to-four family real estate and other | 172 |  |  | 6 |  |  | 226 |  |  | 14 |
Agricultural real estate and operating | 1,483 |  |  | 107 |  |  | 1,652 |  |  | 127 |
Total Community Banking | 1,924 |  |  | 127 |  |  | 2,551 |  |  | 160 |
Total loans and leases | $ | 19,300 |  |  | $ | 560 |  |  | $ | 3,685 |  |  | $ | 160 |
The Company’s troubled debt restructurings ("TDRs") typically involve forgiving a portion of interest or principal on existing loans, making loans at a rate materially less than current market rates, or extending the term of the loan. There were $2.9 million of National Lending loans and leases and $2.5 million of Community Banking loans that were modified in a TDR during the fiscal year ended September 30, 2019, all of which were modified to extend the term of the loan. There were $4.7 million of Community Banking loans that were modified in a TDR during the fiscal year ended September 30, 2018. During the fiscal year ended September 30, 2019, the Company had $0.9 million of Community Banking loans and $0.2 million of National Lending loans that were modified in a TDR within the previous 12 months and for which there was a payment default. During the fiscal year ended September 30, 2018, the Company had $0.1 million of Community Banking loans and no National Lending loans or leases that were modified in a TDR within the previous 12 months and for which there was a payment default. TDR net charge-offs and the impact of TDRs on the Company's allowance for loan and lease losses were insignificant during the fiscal years ended September 30, 2019 and September 30, 2018. At September 30, 2019, foreclosed and repossessed assets totaled $29.5 million, compared to $31.6 million at September 30, 2018. At September 30, 2019, the Company had established a valuation allowance of $0.1 million for foreclosed and repossessed assets. The Company did not have a valuation allowance established for any foreclosed and repossessed assets at September 30, 2018. There were no impairments on any foreclosed and repossessed assets or loans in the process of foreclosure at September 30, 2019 and none at September 30, 2018. On November 14, 2019, the Company disposed of assets related to a previously disclosed agricultural relationship that were held in other real estate owned. The Company expects to incur a pre-tax net loss of approximately $4.3 million in the quarter ended December 31, 2019 related to the disposition of these assets.

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