XML 45 R12.htm IDEA: XBRL DOCUMENT v3.20.2
DIVESTITURES
 12 Months Ended
Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract]  
DIVESTITURES DIVESTITURES
On the Closing Date, the Company sold the Bank's Community Bank division, a component of the Company's Corporate segment, to Central Bank, a state-chartered bank headquartered in Storm Lake, Iowa. The sale included all of the Community Bank division's deposits, branch locations, fixed assets and employees and a portion of the Community Bank division’s loan portfolio. The Company has summarized the results of the transaction below.

(Dollars in Thousands)Fair Value at
February 29, 2020
Cash and cash equivalents$2,504 
Loans268,584 
Premises, furniture and equipment4,945 
Other assets1,250 
Total assets$277,283 
Deposits$290,493 
Other liabilities1,720 
Total liabilities$292,213 
Net assets$(14,930)
Purchase price4,345 
Gain on sale$19,275 

The $19.3 million gain on sale (before tax) was recognized within noninterest income on the Company's Consolidated Statements of Operations for the fiscal year ended September 30, 2020. In addition to what's reflected above, the Company also recognized $0.6 million, $0.2 million, $0.8 million, and $0.3 million in legal, IT, consulting, and nonrecurring compensation expenses related to the sale of the Community Bank division, respectively.

The Company entered a servicing agreement with Central Bank for the retained Community Bank loan portfolio that became effective on the Closing Date. The Company recognized $3.5 million in servicing fee expense during the fiscal year ended September 30, 2020.

On August 4, 2020 and September 17, 2020, the Company sold an additional $58.6 million and $76.4 million, respectively, of the retained Community Bank portfolio to Central Bank. The sales did not result in any material gain to the Company. As of September 30, 2020, the Company had $130.1 million of community bank loans classified as held for sale and expects to sell those loans during the first quarter of fiscal year 2021. See Note 5. Loans and Leases, Net, and Note 26. Subsequent Events, for additional information.
The Company has summarized the Community Bank division results for the three months and fiscal year ended September 30, 2020 below.

(Dollars in Thousands)
Community Bank Sold(1)
Community Bank Retained(2)
Total Community Bank
Three Months Ended September 30, 2020
Net interest income$— $9,045 $9,045 
(Reversal) Provision for loan and lease losses(2,470)4,370 1,900 
Noninterest income— 5 5 
Noninterest expense327 2,646 2,973 
Net income (loss) before income tax expense$2,143 $2,034 $4,177 
Fiscal Year Ended September 30, 2020
Net interest income$2,512 $34,393 $36,905 
(Reversal) Provision for loan and lease losses(4,711)18,891 14,180 
Noninterest income19,694 (3,468)16,226 
Noninterest expense5,282 7,759 13,041 
Net income (loss) before income tax expense$21,635 $4,275 $25,910 
(1) Reflects the activity of the assets and liabilities included in the disposal of the Community Bank division through September 30, 2020.
(2) Reflects the activity of the retained Community Bank loan portfolio as of September 30, 2020.