DIVESTITURES

3 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

On November 20, 2019, the Company announced that MetaBank entered into a definitive agreement with Central Bank, a state-chartered bank headquartered in Storm Lake, Iowa, for the sale of the Community Bank division, which is a component of the Company's Corporate segment. See Note 16. Segment Reporting for additional information on the Company's reporting segments. The sale would include substantially all of the Community Bank's deposits, branch locations, fixed assets and employees and a portion of the Community Bank’s loan portfolio. In connection with MetaBank's entry into the agreement with Central Bank, the Company reclassified the assets and liabilities to be sold to Central Bank as held for sale. The remaining Community Bank loans not proposed to be sold to Central Bank would be retained by the Company under a servicing agreement with Central Bank. The closing of the transaction is subject to the satisfaction or waiver of certain conditions, the receipt of third party and regulatory approval and satisfaction of customary closing conditions. The transaction is expected to close in the 2020 fiscal second quarter.

The Company has summarized the Community Bank division results at, and for the three months ended, December 31, 2019 below.



(Dollars in Thousands)	Community Bank Sold⁽¹⁾			Community Bank Retained⁽²⁾			Total Community Bank
At December 31, 2019
Loans and leases, net	$	250,383		$	934,491		$	1,184,874
Other assets	8,932			51,143			60,075
Deposits	288,975			1,394			290,369
Other liabilities	3,518			778			4,296

Three Months Ended December 31, 2019
Net interest income	$	987		$	9,596		$	10,583
Provision for loan and lease losses	(1,750		)	—			(1,750		)
Noninterest income	290			(3,507		)	(3,217		)
Noninterest expense	1,878			2,684			4,562
Income before income tax expense	$	1,149		$	3,405		$	4,554

⁽¹⁾ Reflects balances to be included in the transaction with Central Bank and classified as held for sale at December 31, 2019. Consolidated Statements of Operations balances reflect the activity on the assets and liabilities included in the sale subsequent to the held-for-sale classification date, or announcement date, November 20, 2019, through the period ended December 31, 2019.

⁽²⁾ Reflects balances excluded from the transaction with Central Bank and related Consolidated Statements of Operations activity for the period ended December 31, 2019.

The Company recognized $1.9 million in non-recurring income and $0.2 million in non-recurring expense during the three months ended December 31, 2019 related to the reclassification of certain Community Bank assets and liabilities to held for sale and is reflected in the Company's provision for loan and leases losses, noninterest income, and noninterest expense on the Company's Condensed Consolidated Statement of Operations. The Company also recognized $0.3 million in compensation and benefits expense and $0.6 million in legal and consulting expenses in the three months ended December 31, 2019 related to Community Bank transaction.