DIVESTITURES

6 Months Ended

Mar. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

On February 29, 2020 (the "Closing Date"), the Company sold MetaBank'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's deposits, branch locations, fixed assets and employees and a portion of the Community Bank’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
Loans	268,584
Premises, furniture and equipment	4,945
Other assets	1,250
Total assets	$	277,283

Deposits	$	290,493
Borrowings	—
Other liabilities	1,720
Total liabilities	$	292,213

Net assets	$	(14,930)
Purchase price	4,345
Gain on sale	$	19,275

The $19.3 million gain on sale (before tax) was recognized within noninterest income on the Company's Condensed Consolidated Statement of Operations for the three and six months ended March 31, 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 $0.3 million in servicing fee expense during the six months ended March 31, 2020.

The Company has summarized the Community Bank division results for the three and six months ended March 31, 2020 below.


(Dollars in Thousands)	Community Bank Sold⁽¹⁾		Community Bank Retained⁽²⁾		Total Community Bank
Three Months Ended March 31, 2020
Net interest income	$	1,525	$	7,797	$	9,322
Provision for loan and lease losses	—		6,974		6,974
Noninterest income	19,403		23		19,426
Noninterest expense	3,039		866		3,905
Income before income tax expense	$	17,889	$	(20)	$	17,869
Six Months Ended March 31, 2020
Net interest income	$	2,512	$	17,393	$	19,905
Provision for loan and lease losses	(1,750)		6,974		5,224
Noninterest income	19,694		(3,484)		16,210
Noninterest expense	4,916		3,551		8,467
Income before income tax expense	$	19,040	$	3,384	$	22,424

⁽¹⁾ Reflects the activity of the assets and liabilities included in the transaction with Central Bank through the Closing Date, including gain.

⁽²⁾ Reflects the activity of the retained Community Bank loan portfolio excluded from the transaction with Central Bank.