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LOANS AND LEASES, NET | 9 Months Ended
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Jun. 30, 2020
Loans and Leases Receivable Disclosure [Abstract] |
LOANS AND LEASES, NET | LOANS AND LEASES, NET Loans and leases consist of the following:
(Dollars in Thousands) | June 30, 2020 |  | September 30, 2019
National Lending |  |  |
Term lending(1) | $ | 738,454 |  |  | $ | 641,742 |
Asset based lending(1) | 181,130 |  |  | 250,465 |
Factoring | 206,361 |  |  | 296,507 |
Lease financing(1) | 264,988 |  |  | 177,915 |
Insurance premium finance | 359,147 |  |  | 361,105 |
SBA/USDA | 308,611 |  |  | 88,831 |
Other commercial finance | 100,214 |  |  | 99,665 |
Commercial finance | 2,158,905 |  |  | 1,916,230 |
Consumer credit products | 102,808 |  |  | 106,794 |
Other consumer finance | 138,777 |  |  | 161,404 |
Consumer finance | 241,585 |  |  | 268,198 |
Tax services | 19,168 |  |  | 2,240 |
Warehouse finance | 277,614 |  |  | 262,924 |
Total National Lending | 2,697,272 |  |  | 2,449,592 |
Community Banking |  |  |
Commercial real estate and operating | 608,303 |  |  | 883,932 |
Consumer one-to-four family real estate and other | 166,479 |  |  | 259,425 |
Agricultural real estate and operating | 24,655 |  |  | 58,464 |
Total Community Banking | 799,437 |  |  | 1,201,821 |
Total loans and leases | 3,496,709 |  |  | 3,651,413 |
Net deferred loan origination fees (costs) | 5,937 |  |  | 7,434 |
Total gross loans and leases | 3,502,646 |  |  | 3,658,847 |
Allowance for loan and lease losses | (65,747) |  |  | (29,149) |
Total loans and leases, net(2) | $ | 3,436,899 |  |  | $ | 3,629,698 |
(1) The Company has updated the presentation of its loan and lease table beginning in the fiscal 2020 first quarter. The new presentation includes a new category called term lending. Certain balances previously included in the asset based lending and lease financing categories have been reclassified into the new term lending category during the fiscal 2020 first quarter. Prior period balances have been conformed to the new presentation. (2) As of June 30, 2020, the remaining balance of acquired loans and leases from the acquisition of Crestmark Bancorp, Inc. ("Crestmark") and its bank subsidiary, Crestmark Bank (the "Crestmark Acquisition") was $188.3 million and the remaining balances of the credit and interest rate mark discounts related to the acquired loans and leases held for investment were $3.4 million and $2.9 million, respectively. 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 nine months ended June 30, 2020, the Company transferred $325.1 million of Community Banking loans to held for sale. During the nine months ended June 30, 2019, the Company transferred $39.5 million of consumer credit product loans to held for sale. During the nine months ended June 30, 2020 and 2019, the Company originated $63.4 million and $104.1 million, respectively, of SBA/USDA and consumer credit product loans as held for sale. The Company sold held for sale loans resulting in proceeds of $440.5 million and gains on sale of $7.0 million during the nine months ended June 30, 2020. The Company sold held for sale loans resulting in proceeds of $95.7 million and gains on sale of $3.7 million during the nine months ended June 30, 2019. Loans purchased and sold by portfolio segment, including participation interests, for the three and nine months ended were as follows:
| Three Months Ended June 30, |  |  |  | Nine Months Ended June 30, |  |
(Dollars in Thousands) | 2020 |  | 2019 |  | 2020 |  | 2019
Loans Purchased |  |  |  |  |  |  |
Loans held for sale: |  |  |  |  |  |  |
Total National Lending | $ | — |  |  | $ | 6,703 |  |  | $ | — |  |  | $ | 12,643 |
Loans held for investment: |  |  |  |  |  |  |
Total National Lending | — |  |  | 72,737 |  |  | 103,888 |  |  | 198,328 |
Total Community Banking | 2,728 |  |  | 2,710 |  |  | 16,518 |  |  | 21,223 |
Total purchases | $ | 2,728 |  |  | $ | 82,150 |  |  | $ | 120,406 |  |  | $ | 232,194 |
Loans Sold |  |  |  |  |  |  |
Loans held for sale: |  |  |  |  |  |  |
Total National Lending | $ | 8,524 |  |  | $ | 57,661 |  |  | $ | 168,814 |  |  | $ | 92,565 |
Total Community Banking | — |  |  | — |  |  | 271,681 |  |  | — |
Loans held for investment: |  |  |  |  |  |  |
Total Community Banking | — |  |  | 2,212 |  |  | 3,099 |  |  | 13,069 |
Total sales | $ | 8,524 |  |  | $ | 59,873 |  |  | $ | 443,594 |  |  | $ | 105,634 |
Leasing Portfolio Effective October 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) and related ASUs on a modified retrospective basis, electing the practical expedients and optional transition method. As such, the following leasing disclosures include information at, or for the three and nine months ended, June 30, 2020. The net investment in direct financing and sales-type leases was comprised of the following:
(Dollars in Thousands) | June 30, 2020 |  | September 30, 2019
Carrying Amount | $ | 283,003 |  |  | $ | 191,733 |
Unguaranteed residual assets | 16,662 |  |  | 13,353 |
Unamortized initial direct costs | 1,967 |  |  | 1,790 |
Unearned income | (34,677) |  |  | (27,171) |
Total net investment in direct financing and sales-type leases | $ | 266,955 |  |  | $ | 179,705 |
The carrying amount of direct financing and sales-type leases subject to residual value guarantees was $9.0 million at June 30, 2020. The components of total lease income were as follows:
| June 30, 2020 |  |
(Dollars in Thousands) | Three Months Ended |  | Nine Months Ended
Interest income - loans and leases |  |  |
Interest income on net investments in direct financing and sales-type leases | $ | 4,496 |  |  | $ | 12,958 |
Leasing and equipment finance noninterest income |  |  |
Lease income from operating lease payments | 11,391 |  |  | 33,857 |
Profit (loss) recorded on commencement date on sales-type leases | 103 |  |  | 590 |
Other(1) | 554 |  |  | 3,135 |
Total leasing and equipment finance noninterest income | 12,048 |  |  | 37,582 |
Total lease income | $ | 16,544 |  |  | $ | 50,540 |
(1) Other leasing and equipment finance noninterest income consists of gains (losses) on sales of leased equipment, fees and service charges on leases and gains (losses) on sales of leases. Undiscounted future minimum lease payments receivable for direct financing and sales-type leases and a reconciliation to the carrying amount recorded were as follows:
(Dollars in Thousands) |
Remaining in 2020 | $ | 25,308 |
2021 | 95,008 |
2022 | 74,899 |
2023 | 49,197 |
2024 | 29,178 |
Thereafter | 9,413 |
Equipment under leases not yet commenced |
Total undiscounted future minimum lease payments receivable for direct financing and sales-type leases | 283,003 |
Third-party residual value guarantees | — |
Total carrying amount of direct financing and sales-type leases | $ | 283,003 |
The Company did not record any contingent rental income from direct financing and sales-type leases in the nine months ended June 30, 2020. During the Company's fiscal 2020 second quarter, the COVID-19 pandemic began impacting global and US markets and macroeconomic conditions, and continues to have an impact. Although the ultimate impact of the pandemic on the Company's loan and lease portfolio is difficult to predict, management performed an evaluation of the loan and lease portfolio in order to assess the impact on repayment sources and underlying collateral that could result in additional losses. The framework for the analysis was based on the Company's then-current allowance for loan and lease losses ("ALLL") methodology with additional considerations. From this impact assessment, additional reserve levels were estimated by increasing qualitative factors. The additional reserves were estimated for loans that were granted short-term payment deferrals related to financial stress stemming from the COVID-19 pandemic along with other loans within certain industries that were considered higher risk for credit loss (e.g. transportation, hospitality, travel, entertainment and retail). The Company continues to assess the impact to our customers and businesses as a result of COVID-19 and will refine our estimate as more information becomes available. Based on the Company's ongoing assessment of the COVID-19 pandemic, the Company recognized an additional provision for loan and lease losses of $9.4 million and $25.2 million during the three and nine months ended June 30, 2020, respectively. The Company will continue to assess the impact to their customers and businesses as a result of COVID-19 and refine their estimate as more information becomes available. Activity in the allowance for loan and lease losses and balances of loans and leases by portfolio segment for each of the three and nine months ended was as follows:
| Three Months Ended June 30, 2020 |  |  |  |  |  |  |  |
(Dollars in Thousands) | Beginning balance |  | Provision (recovery) for loan and lease losses |  | Charge-offs |  | Recoveries |  | Ending balance
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |
National Lending |  |  |  |  |  |  |  |  |
Term lending | $ | 11,647 |  |  | $ | 5,672 |  |  | $ | (2,831) |  |  | $ | 25 |  |  | $ | 14,513 |
Asset based lending | 2,826 |  |  | (953) |  |  | (42) |  |  | — |  |  | 1,831 |
Factoring | 4,444 |  |  | (1,997) |  |  | (140) |  |  | 362 |  |  | 2,669 |
Lease financing | 2,683 |  |  | 4,293 |  |  | (357) |  |  | 91 |  |  | 6,710 |
Insurance premium finance | 2,142 |  |  | 596 |  |  | (736) |  |  | 367 |  |  | 2,369 |
SBA/USDA | 1,558 |  |  | 716 |  |  | (1,134) |  |  | — |  |  | 1,140 |
Other commercial finance | 552 |  |  | (381) |  |  | — |  |  | — |  |  | 171 |
Commercial finance | 25,852 |  |  | 7,946 |  |  | (5,240) |  |  | 845 |  |  | 29,403 |
Consumer credit products | 1,082 |  |  | (111) |  |  | — |  |  | — |  |  | 971 |
Other consumer finance | 3,414 |  |  | 358 |  |  | (567) |  |  | 44 |  |  | 3,249 |
Consumer finance | 4,496 |  |  | 247 |  |  | (567) |  |  | 44 |  |  | 4,220 |
Tax services | 21,320 |  |  | (100) |  |  | (9,797) |  |  | 14 |  |  | 11,437 |
Warehouse finance | 334 |  |  | (56) |  |  | — |  |  | — |  |  | 278 |
Total National Lending | 52,002 |  |  | 8,037 |  |  | (15,604) |  |  | 903 |  |  | 45,338 |
Community Banking |  |  |  |  |  |  |  |  |
Commercial real estate and operating | 10,069 |  |  | 6,688 |  |  | — |  |  | — |  |  | 16,757 |
Consumer one-to-four family real estate and other | 2,350 |  |  | 586 |  |  | — |  |  | — |  |  | 2,936 |
Agricultural real estate and operating | 934 |  |  | (218) |  |  | — |  |  | — |  |  | 716 |
Total Community Banking | 13,353 |  |  | 7,056 |  |  | — |  |  | — |  |  | 20,409 |
Total | $ | 65,355 |  |  | $ | 15,093 |  |  | $ | (15,604) |  |  | $ | 903 |  |  | $ | 65,747 |
| Nine Months Ended June 30, 2020 |  |  |  |  |  |  |  |
(Dollars in Thousands) | Beginning balance |  | Provision (recovery) for loan and lease losses |  | Charge-offs |  | Recoveries |  | Ending balance
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |
National Lending |  |  |  |  |  |  |  |  |
Term lending | $ | 5,533 |  |  | $ | 14,753 |  |  | $ | (6,003) |  |  | $ | 230 |  |  | $ | 14,513 |
Asset based lending | 2,437 |  |  | (611) |  |  | (42) |  |  | 47 |  |  | 1,831 |
Factoring | 3,261 |  |  | (509) |  |  | (875) |  |  | 792 |  |  | 2,669 |
Lease financing | 1,275 |  |  | 5,841 |  |  | (725) |  |  | 319 |  |  | 6,710 |
Insurance premium finance | 1,024 |  |  | 2,671 |  |  | (1,809) |  |  | 483 |  |  | 2,369 |
SBA/USDA | 383 |  |  | 2,007 |  |  | (1,250) |  |  | — |  |  | 1,140 |
Other commercial finance | 683 |  |  | (512) |  |  | — |  |  | — |  |  | 171 |
Commercial finance | 14,596 |  |  | 23,640 |  |  | (10,704) |  |  | 1,871 |  |  | 29,403 |
Consumer credit products | 1,044 |  |  | (73) |  |  | — |  |  | — |  |  | 971 |
Other consumer finance | 5,118 |  |  | (474) |  |  | (2,208) |  |  | 813 |  |  | 3,249 |
Consumer finance | 6,162 |  |  | (547) |  |  | (2,208) |  |  | 813 |  |  | 4,220 |
Tax services | — |  |  | 20,407 |  |  | (9,797) |  |  | 827 |  |  | 11,437 |
Warehouse finance | 263 |  |  | 15 |  |  | — |  |  | — |  |  | 278 |
Total National Lending | 21,021 |  |  | 43,515 |  |  | (22,709) |  |  | 3,511 |  |  | 45,338 |
Community Banking |  |  |  |  |  |  |  |  |
Commercial real estate and operating | 6,208 |  |  | 10,549 |  |  | — |  |  | — |  |  | 16,757 |
Consumer one-to-four family real estate and other | 1,053 |  |  | 1,883 |  |  | — |  |  | — |  |  | 2,936 |
Agricultural real estate and operating | 867 |  |  | (151) |  |  | — |  |  | — |  |  | 716 |
Total Community Banking | 8,128 |  |  | 12,281 |  |  | — |  |  | — |  |  | 20,409 |
Total | $ | 29,149 |  |  | $ | 55,796 |  |  | $ | (22,709) |  |  | $ | 3,511 |  |  | $ | 65,747 |
| Three Months Ended June 30, 2019 |  |  |  |  |  |  |  |
(Dollars in Thousands) | Beginning balance |  | Provision (recovery) for loan and lease losses |  | Charge-offs |  | Recoveries |  | Ending balance
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |
National Lending |  |  |  |  |  |  |  |  |
Term lending | $ | 3,121 |  |  | $ | 2,564 |  |  | $ | (1,969) |  |  | $ | 45 |  |  | $ | 3,761 |
Asset based lending | 1,410 |  |  | 417 |  |  | (37) |  |  | 3 |  |  | 1,793 |
Factoring | 1,761 |  |  | 2,747 |  |  | (1,335) |  |  | 31 |  |  | 3,204 |
Lease financing | 933 |  |  | (309) |  |  | (110) |  |  | 158 |  |  | 672 |
Insurance premium finance | 919 |  |  | 201 |  |  | (275) |  |  | 171 |  |  | 1,016 |
SBA/USDA | 474 |  |  | 449 |  |  | — |  |  | — |  |  | 923 |
Other commercial finance | 525 |  |  | 432 |  |  | — |  |  | — |  |  | 957 |
Commercial finance | 9,143 |  |  | 6,501 |  |  | (3,726) |  |  | 408 |  |  | 12,326 |
Consumer credit products | 1,314 |  |  | 142 |  |  | — |  |  | — |  |  | 1,456 |
Other consumer finance | 5,130 |  |  | 1,890 |  |  | (1,398) |  |  | 28 |  |  | 5,650 |
Consumer finance | 6,444 |  |  | 2,032 |  |  | (1,398) |  |  | 28 |  |  | 7,106 |
Tax services | 24,102 |  |  | 914 |  |  | (9,627) |  |  | 36 |  |  | 15,425 |
Warehouse finance | 185 |  |  | 65 |  |  | — |  |  | — |  |  | 250 |
Total National Lending | 39,874 |  |  | 9,512 |  |  | (14,751) |  |  | 472 |  |  | 35,107 |
Community Banking |  |  |  |  |  |  |  |  |
Commercial real estate and operating | 6,673 |  |  | (249) |  |  | — |  |  | — |  |  | 6,424 |
Consumer one-to-four family real estate and other | 958 |  |  | (65) |  |  | — |  |  | — |  |  | 893 |
Agricultural real estate and operating | 1,167 |  |  | (86) |  |  | — |  |  | — |  |  | 1,081 |
Total Community Banking | 8,798 |  |  | (400) |  |  | — |  |  | — |  |  | 8,398 |
Total | $ | 48,672 |  |  | $ | 9,112 |  |  | $ | (14,751) |  |  | $ | 472 |  |  | $ | 43,505 |
| Nine Months Ended June 30, 2019 |  |  |  |  |  |  |  |
(Dollars in Thousands) | Beginning balance |  | Provision (recovery) for loan and lease losses |  | Charge-offs |  | Recoveries |  | Ending balance
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |
National Lending |  |  |  |  |  |  |  |  |
Term lending | $ | 89 |  |  | $ | 4,928 |  |  | $ | (2,751) |  |  | $ | 1,495 |  |  | $ | 3,761 |
Asset based lending | 47 |  |  | 1,775 |  |  | (37) |  |  | 8 |  |  | 1,793 |
Factoring | 64 |  |  | 5,769 |  |  | (2,711) |  |  | 82 |  |  | 3,204 |
Lease financing | 30 |  |  | 1,039 |  |  | (1,052) |  |  | 655 |  |  | 672 |
Insurance premium finance | 1,031 |  |  | 2,091 |  |  | (2,359) |  |  | 253 |  |  | 1,016 |
SBA/USDA | 13 |  |  | 910 |  |  | — |  |  | — |  |  | 923 |
Other commercial finance | 28 |  |  | 929 |  |  | — |  |  | — |  |  | 957 |
Commercial finance | 1,302 |  |  | 17,441 |  |  | (8,910) |  |  | 2,493 |  |  | 12,326 |
Consumer credit products | 785 |  |  | 671 |  |  | — |  |  | — |  |  | 1,456 |
Other consumer finance | 2,820 |  |  | 8,249 |  |  | (5,477) |  |  | 58 |  |  | 5,650 |
Consumer finance | 3,605 |  |  | 8,920 |  |  | (5,477) |  |  | 58 |  |  | 7,106 |
Tax services | — |  |  | 24,883 |  |  | (9,670) |  |  | 212 |  |  | 15,425 |
Warehouse finance | 65 |  |  | 185 |  |  | — |  |  | — |  |  | 250 |
Total National Lending | 4,972 |  |  | 51,429 |  |  | (24,057) |  |  | 2,763 |  |  | 35,107 |
Community Banking |  |  |  |  |  |  |  |  |
Commercial real estate and operating | 6,220 |  |  | 204 |  |  | — |  |  | — |  |  | 6,424 |
Consumer one-to-four family real estate and other | 632 |  |  | 281 |  |  | (20) |  |  | — |  |  | 893 |
Agricultural real estate and operating | 1,216 |  |  | (385) |  |  | — |  |  | 250 |  |  | 1,081 |
Total Community Banking | 8,068 |  |  | 100 |  |  | (20) |  |  | 250 |  |  | 8,398 |
Total | $ | 13,040 |  |  | $ | 51,529 |  |  | $ | (24,077) |  |  | $ | 3,013 |  |  | $ | 43,505 |
The following tables provide details regarding the allowance for loan and lease losses and balance by type of allowance:
| 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
As of June 30, 2020 | (Dollars in Thousands) |  |  |  |  |  |  |  |  |  |
National Lending |  |  |  |  |  |  |  |  |  |  |
Term lending | $ | 3,366 |  |  | $ | 11,147 |  |  | $ | 14,513 |  |  | $ | 31,467 |  |  | $ | 706,987 |  |  | $ | 738,454 |
Asset based lending | — |  |  | 1,831 |  |  | 1,831 |  |  | 2,805 |  |  | 178,325 |  |  | 181,130 |
Factoring | 189 |  |  | 2,480 |  |  | 2,669 |  |  | 2,165 |  |  | 204,196 |  |  | 206,361 |
Lease financing | 1,350 |  |  | 5,360 |  |  | 6,710 |  |  | 4,695 |  |  | 260,293 |  |  | 264,988 |
Insurance premium finance | — |  |  | 2,369 |  |  | 2,369 |  |  | — |  |  | 359,147 |  |  | 359,147 |
SBA/USDA | 241 |  |  | 899 |  |  | 1,140 |  |  | 2,380 |  |  | 306,231 |  |  | 308,611 |
Other commercial finance | — |  |  | 171 |  |  | 171 |  |  | — |  |  | 100,214 |  |  | 100,214 |
Commercial finance | 5,146 |  |  | 24,257 |  |  | 29,403 |  |  | 43,512 |  |  | 2,115,393 |  |  | 2,158,905 |
Consumer credit products | — |  |  | 971 |  |  | 971 |  |  | — |  |  | 102,808 |  |  | 102,808 |
Other consumer finance | — |  |  | 3,249 |  |  | 3,249 |  |  | 2,177 |  |  | 136,600 |  |  | 138,777 |
Consumer finance | — |  |  | 4,220 |  |  | 4,220 |  |  | 2,177 |  |  | 239,408 |  |  | 241,585 |
Tax services | — |  |  | 11,437 |  |  | 11,437 |  |  | — |  |  | 19,168 |  |  | 19,168 |
Warehouse finance | — |  |  | 278 |  |  | 278 |  |  | — |  |  | 277,614 |  |  | 277,614 |
Total National Lending | 5,146 |  |  | 40,192 |  |  | 45,338 |  |  | 45,689 |  |  | 2,651,583 |  |  | 2,697,272 |
Community Banking |  |  |  |  |  |  |  |  |  |  |
Commercial real estate and operating | 141 |  |  | 16,616 |  |  | 16,757 |  |  | 419 |  |  | 607,884 |  |  | 608,303 |
Consumer one-to-four family real estate and other | — |  |  | 2,936 |  |  | 2,936 |  |  | 177 |  |  | 166,302 |  |  | 166,479 |
Agricultural real estate and operating | — |  |  | 716 |  |  | 716 |  |  | 2,437 |  |  | 22,218 |  |  | 24,655 |
Total Community Banking | 141 |  |  | 20,268 |  |  | 20,409 |  |  | 3,033 |  |  | 796,404 |  |  | 799,437 |
Total | $ | 5,287 |  |  | $ | 60,460 |  |  | $ | 65,747 |  |  | $ | 48,722 |  |  | $ | 3,447,987 |  |  | $ | 3,496,709 |
| 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
As of September 30, 2019 | (Dollars in Thousands) |  |  |  |  |  |  |  |  |  |
National Lending |  |  |  |  |  |  |  |  |  |  |
Term lending | $ | 450 |  |  | $ | 5,083 |  |  | $ | 5,533 |  |  | $ | 19,568 |  |  | $ | 622,174 |  |  | $ | 641,742 |
Asset based lending | — |  |  | 2,437 |  |  | 2,437 |  |  | 378 |  |  | 250,087 |  |  | 250,465 |
Factoring | 1,262 |  |  | 1,999 |  |  | 3,261 |  |  | 3,824 |  |  | 292,683 |  |  | 296,507 |
Lease financing | 112 |  |  | 1,163 |  |  | 1,275 |  |  | 1,213 |  |  | 176,702 |  |  | 177,915 |
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 |
In response to the ongoing COVID-19 pandemic, the Company allowed modifications, such as payment deferrals and temporary forbearance, to credit-worthy borrowers who are experiencing temporary hardship due to the effects of COVID-19. Accordingly, if all payments were less than 30 days past due prior to the onset of the pandemic effects, the loan or lease will not be reported as past due during the deferral or forbearance period. As of June 30, 2020, the Company granted deferral payments on a total of $352.1 million of loan and lease balances due to performing borrowers experiencing temporary hardship from COVID-19. These modifications consisted solely of payment deferrals ranging from 30 days to six months. These modifications are in line with applicable regulatory guidelines and, therefore, they are not reported as troubled-debt restructurings. The Company elected to accrue and recognize interest income on these modifications during the payment deferral period. Federal regulations provide for the classification of loans and other assets such as debt and equity securities considered by the Bank's primary regulator, the Office of the Comptroller of the Currency (the “OCC”), to be of lesser quality as “substandard,” “doubtful” or “loss.” The loan and lease 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- A special mention asset is 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. General allowances represent loss allowances which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets. When assets are classified as “loss,” the Company is required either to establish a specific allowance for losses equal to 100% of that portion of the asset so classified or to charge-off such amount. The Company's determinations as to the classification of its assets and the amount of its valuation allowances are subject to review by its regulatory authorities, which may order the establishment of additional general or specific loss allowances. The Company recognizes that concentrations of credit may naturally occur and may take the form of a large volume of related loans and leases to an individual, a specific industry, or a geographic location. Credit concentration is a direct, indirect, or contingent obligation that has a common bond where the aggregate exposure equals or exceeds a certain percentage of the Company’s Tier 1 Capital plus the Allowance for Loan and Lease Losses. Beginning in the fiscal 2020 first quarter the Company implemented changes to the risk rating approach on certain commercial finance portfolios as part of a streamlining process to provide a more consistent risk rating approach across all of its lending portfolios. Based upon a study of the Company's special mention commercial finance loans and leases, the Company determined that approximately $117.0 million of those loans and leases should be rated as watch under the new approach. Prior to the fiscal 2020 first quarter, none of the Company's commercial finance loans and leases were rated as watch. Based on Meta's allowance methodology, these changes in risk ratings did not have a direct impact on the allowance for loan and lease losses. The aggregate balance of watch and special mention loans and leases within the commercial finance portfolio increased to $179.8 million at June 30, 2020, compared to $145.0 million at September 30, 2019. The Company has various portfolios of consumer finance and tax services loans that present unique risks. Due to the unique risks associated with these portfolios, the Company monitors other credit quality indicators in their evaluation of the appropriateness of the allowance for loan losses on these portfolios, and as such, these loans are not included in the asset classification table below, beginning in the fiscal 2020 first quarter. The September 30, 2019 asset classification table has been conformed to the current presentation. The outstanding balances of consumer finance loans and tax services loans were $241.6 million and $19.2 million at June 30, 2020, respectively, and $268.2 million and $2.2 million at September 30, 2019, respectively. The asset classifications of loans and leases were as follows:
Asset Classification | Pass |  | Watch |  | Special Mention |  | Substandard |  | Doubtful |  | Total
As of June 30, 2020 | (Dollars in Thousands) |  |  |  |  |  |  |  |  |  |
National Lending |  |  |  |  |  |  |  |  |  |  |
Term lending | $ | 656,198 |  |  | $ | 42,015 |  |  | $ | 8,774 |  |  | $ | 28,579 |  |  | $ | 2,888 |  |  | $ | 738,454 |
Asset based lending | 108,069 |  |  | 58,415 |  |  | 11,841 |  |  | 2,805 |  |  | — |  |  | 181,130 |
Factoring | 161,075 |  |  | 22,255 |  |  | 20,865 |  |  | 2,166 |  |  | — |  |  | 206,361 |
Lease financing | 257,540 |  |  | 1,875 |  |  | 879 |  |  | 4,553 |  |  | 141 |  |  | 264,988 |
Insurance premium finance | 356,821 |  |  | 1,305 |  |  | 402 |  |  | 125 |  |  | 494 |  |  | 359,147 |
SBA/USDA | 295,815 |  |  | 10,339 |  |  | 77 |  |  | 2,380 |  |  | — |  |  | 308,611 |
Other commercial finance | 99,495 |  |  | 719 |  |  | — |  |  | — |  |  | — |  |  | 100,214 |
Commercial finance | 1,935,013 |  |  | 136,923 |  |  | 42,838 |  |  | 40,608 |  |  | 3,523 |  |  | 2,158,905 |
Warehouse finance | 277,614 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 277,614 |
Total National Lending | 2,212,627 |  |  | 136,923 |  |  | 42,838 |  |  | 40,608 |  |  | 3,523 |  |  | 2,436,519 |
Community Banking |  |  |  |  |  |  |  |  |  |  |
Commercial real estate and operating | 599,144 |  |  | 698 |  |  | 4,019 |  |  | 3,862 |  |  | 580 |  |  | 608,303 |
Consumer one-to-four family real estate and other | 165,518 |  |  | 42 |  |  | 655 |  |  | 264 |  |  | — |  |  | 166,479 |
Agricultural real estate and operating | 11,946 |  |  | — |  |  | 4,909 |  |  | 7,800 |  |  | — |  |  | 24,655 |
Total Community Banking | 776,608 |  |  | 740 |  |  | 9,583 |  |  | 11,926 |  |  | 580 |  |  | 799,437 |
Total loans and leases | $ | 2,989,235 |  |  | $ | 137,663 |  |  | $ | 52,421 |  |  | $ | 52,534 |  |  | $ | 4,103 |  |  | $ | 3,235,956 |
Asset Classification | Pass |  | Watch |  | Special Mention |  | Substandard |  | Doubtful |  | Total
As of September 30, 2019 | (Dollars in Thousands) |  |  |  |  |  |  |  |  |  |
National Lending |  |  |  |  |  |  |  |  |  |  |
Term lending | $ | 585,382 |  |  | $ | — |  |  | $ | 36,792 |  |  | $ | 19,024 |  |  | $ | 544 |  |  | $ | 641,742 |
Asset based lending | 192,427 |  |  | — |  |  | 57,660 |  |  | 378 |  |  | — |  |  | 250,465 |
Factoring | 256,048 |  |  | — |  |  | 36,635 |  |  | 3,824 |  |  | — |  |  | 296,507 |
Lease financing | 171,785 |  |  | — |  |  | 4,917 |  |  | 1,213 |  |  | — |  |  | 177,915 |
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 |
Warehouse finance | 262,924 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 262,924 |
Total National Lending | 2,005,337 |  |  | — |  |  | 144,993 |  |  | 28,280 |  |  | 544 |  |  | 2,179,154 |
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 | $ | 3,178,254 |  |  | $ | 7,071 |  |  | $ | 154,461 |  |  | $ | 40,645 |  |  | $ | 544 |  |  | $ | 3,380,975 |
National Lending Commercial Finance The Company's commercial finance product lines include term lending, asset based lending, factoring, leasing, insurance premium finance, government guaranteed lending and other commercial finance products offered on a nationwide basis. Term Lending. Through its Crestmark division, the Bank originates a variety of collateralized conventional term loans and notes receivable, while terms range from three years to 25 years, the weighted average life is approximately 53 months. These term loans may be secured by equipment, recurring revenue streams, or real estate. Credit risk is managed through setting loan amounts appropriate for the collateral by utilizing information ranging from equipment cost, appraisals, valuations, or lending history. The Bank follows standardized loan policies and established and authorized credit limits and applies attentive portfolio management, which includes monitoring past dues, financial performance, financial covenants, and industry trends. As of June 30, 2020, 20% of the term lending portfolio exposure is concentrated in solar/alternative energy, most of which are construction projects that will convert to longer term government guaranteed facilities upon completion of the construction phase. Equipment Finance Agreements ("EFAs") and Installment Purchase Agreements ("IPAs") make up $299.1 million, or 41%, of the term lending total as of June 30, 2020. The remaining 39% are a variety of investment advisory loans and other more traditional term equipment and general purpose commercial loans. Asset Based Lending. Through its Crestmark division, the Bank provides asset based loans secured by short-term assets such as inventory, accounts receivable, and work-in-process. Asset based loans may also be secured by real estate and equipment. The primary sources of repayment are the operating income of the borrower, the collection of the receivables securing the loan, and/or the sale of the inventory securing the loan. Loans are typically revolving lines of credit with terms of one year to three years, whereby the Bank withholds a contingency reserve representing the difference between the amount advanced and the fair value of the invoice amount or other collateral value. Credit risk is managed through advance rates appropriate for the collateral (generally, advance rates on accounts receivable is 85% and inventory advance rates range from 40% to 50%), standardized loan policies, established and authorized credit limits, attentive portfolio management and the use of lock box agreements and similar arrangements that result in the Company receiving and controlling the debtors' cash receipts. As of June 30, 2020, approximately 50% of these loans were backed by accounts receivable. Factoring. Through its Crestmark division, the Bank provides factoring lending where clients provide detailed inventory, accounts receivable, and work-in-process reports for lending arrangements. The factoring clients are diversified as to industry and geography. With these loans, the Crestmark division withholds a contingency reserve, which is the difference between the fair value of the invoice amount or other collateral value and the amount advanced (generally, advance rates are 85% on accounts receivable). This reserve is withheld for nonpayment of factored receivables, service fees and other adjustments. Credit risk is managed through standardized advance policies, established and authorized credit limits, verification of receivables, attentive portfolio management and the use of lock box agreements and similar arrangements that result in the Company receiving and controlling the client's cash receipts. In addition, clients generally guarantee the payment of purchased accounts receivable. As of June 30, 2020, approximately 80% of these loans were backed by accounts receivable. Lease Financing. Through its Crestmark division, the Bank provides creative, flexible lease solutions for technology, capital equipment and select transportation assets like tractors and trailers. Direct financing leases and sales-type leases substantially transfer the benefits and risks of equipment ownership to the lessee. The lease may contain provisions that transfer ownership to the lessee at the end of the initial term, contain a bargain purchase option or allow for purchase of the equipment at fair market value. Residual values are estimated at the inception of the lease. Lease maturities are generally no greater than 84 months. The focus in this lease financing category is to support middle market companies by providing a variety of financing products to help them meet their business objectives. Insurance Premium Finance. Through its AFS/IBEX division the Bank provides, on a national basis, short-term, primarily collateralized financing to facilitate the commercial customers’ purchase of insurance for various forms of risk, otherwise known as insurance premium financing. This includes, but is not limited to, policies for commercial property, casualty and liability risk. Premiums are advanced either directly to the insurance carrier or through an intermediary/broker and repaid by the policyholder with interest during the policy term. The policyholder generally makes a 20% to 25% down payment to the insurance broker and finances the remainder over nine months to 10 months on average. The down payment is set such that if the policy is canceled, the unearned premium is typically sufficient to cover the loan balance and accrued interest and is returned by the insurer to the Bank on a pro rata basis. Over 99% of the portfolio finances policies provided by investment grade-rated insurance company partners. Small Business Administration ("SBA") and United States Department of Agriculture ("USDA"). The Bank originates loans through programs partially guaranteed by the SBA or USDA. These loans are made to small businesses and professionals with what the Bank believes are lower risk characteristics. Certain guaranteed portions of these loans are generally sold to the secondary market. Also see Note 3 to the Condensed Consolidated Financial Statements included in this quarterly report. As part of the SBA's coronavirus debt relief efforts, the SBA will pay six months of principal, interest, and any associated fees that borrowers owe for all current 7(a), 504, and Microloans in regular servicing status as well as new 7(a), 504, and Microloans disbursed prior to September 27, 2020. As of June 30, 2020, there were 145 loans with a retained outstanding balance of $48.4 million receiving six months principal and interest from the SBA. The Company is also participating in the PPP, which is being administered by the SBA. The Company expects that some portion of these loans will ultimately be forgiven by the SBA in accordance with the terms of the program. Loans funded through the PPP program are fully guaranteed by the U.S. government. As of June 30, 2020, the Company authorized 686 applications, totaling $215.5 million in PPP loan requests as part of the program. Other Commercial Finance. Included in this category of loans are the Company's healthcare receivables loan portfolio primarily comprised of loans to individuals for medical services received. The majority of these loans are guaranteed by the hospital providing the service to the debtor and this guarantee serves to reduce credit risk as the guarantors agree to repurchase severely delinquent loans. Credit risk is minimized on these loans based on the guarantor’s repurchase agreement. This loan category also includes commercial real estate loans to customers of the Crestmark division. Consumer Finance Consumer Credit Products. The Bank designs its credit program relationships with certain desired outcomes. Three high priority outcomes are liquidity, credit protection, and risk retention. The Bank believes the benefits of these outcomes not only support its goals but the goals of the credit program partner as well. The Bank designs its program credit protections in a manner so that the Bank earns a reasonable risk adjusted return, but is protected by certain layers of credit support, similar to what you would find in structured finance. The Bank will hold a sizable portion of the originated asset on its own balance sheet, but retains the flexibility to sell a portion of the originated asset to other interested parties, thereby supporting program liquidity. Through June 30, 2020, the Bank has launched two consumer credit programs. The loan products offered under these programs are generally closed-end installment loans with terms between 12 months and 84 months and revolving lines of credit with durations between six months and 60 months. Other Consumer Finance. The Bank's purchased student loan portfolios are seasoned, floating rate, private portfolios that are serviced by a third-party servicer. The portfolio purchased during the fiscal 2018 first quarter is indexed to one-month of the London Interbank Offered Rate ("LIBOR"), while the portfolio purchased in the fiscal 2017 first quarter is indexed to three-month LIBOR plus various margins. The Company received written notification on June 18, 2018 from ReliaMax Surety Company ("ReliaMax"), the company that provided insurance coverage for the student loan portfolios, which informed policy holders that the South Dakota Division of Insurance filed a petition to have ReliaMax declared insolvent and to adopt a plan of liquidation. An Order of Liquidation was entered on June 27, 2018 by the Sixth Circuit Court in Hughes County, South Dakota, declaring ReliaMax insolvent and appointing the South Dakota Division of Insurance as liquidator to adopt a plan of liquidation. The Company expects to ultimately recover a portion of the unearned premiums, though the Company can provide no assurance as to the timing and amount of any such recovery. Tax Services The Bank's tax services division provides short-term taxpayer advance loans. Taxpayers are underwritten to determine eligibility for these unsecured loans. Due to the nature of taxpayer advance loans, it typically takes no more than three e-file cycles (the period of time between scheduled IRS payments) from when the return is accepted by the IRS to collect from the borrower. In the event of default, the Bank has no recourse against the tax consumer. The Bank will charge off the balance of a taxpayer advance loan if there is a balance at the end of the calendar year, or when collection of principal becomes doubtful. Through its tax services division, the Bank provides short-term electronic return originator ("ERO") advance loans on a nationwide basis. These loans are typically utilized by tax preparers to purchase tax preparation software and to prepare tax office operations for the upcoming tax season. EROs go through an underwriting process to determine eligibility for the unsecured advances. ERO loans are not collateralized. Collection on ERO advances begins once the ERO begins to process refund transfers. Generally, the Bank will charge off the balance of an ERO advance loan if there is a balance at the end of June, or when collection of principal becomes doubtful. Warehouse Finance The Bank participates in several asset-backed warehouse lines of credit whereby the Bank is in a senior, secured position as the first out participant. These facilities are primarily collateralized by consumer receivables, with the Bank holding a senior collateral position enhanced by a subordinate party structure. Community Banking Effective on the Closing Date of the Community Bank division sale to Central Bank, the Company substantially ceased originating loans within its Community Banking loan portfolio. The Company entered a servicing agreement with Central Bank for the retained Community Bank loan portfolio that became effective on the Closing Date. See Note 4. Divestitures for further information related to the Community Banking lending portfolio. Commercial Real Estate and Operating The Company's commercial and multi-family real estate loans are secured primarily by apartment buildings, office buildings, and hotels. Commercial and multi-family real estate loans generally were underwritten with terms not exceeding 20 years, have loan-to-value ratios of up to 80% of the appraised value of the property securing the loan, and are typically secured by guarantees of the borrowers. As of June 30, 2020, multi-family real estate loan balances totaled $138.7 million, over 94% of which were located within the Community Bank division's footprint of South Dakota and Iowa. The average loan-to-value ratio on multi-family real estate loans at the time of the Company's most recently completed annual stress test analysis was approximately 69%. As of June 30, 2020, hospitality loan balances totaled $169.0 million, of which approximately 28% were located in the Community Bank division's footprint of South Dakota and Iowa, while the majority of the remaining balances were through developers headquartered in the Community Bank division footprint with properties located in Minnesota, North Dakota, Nebraska, Wisconsin, Kansas, Arizona, Colorado and California. Over 98% of the outstanding loan balances are flagged hotel relationships and a large majority of the loans have guarantors by individuals with a strong combined net worth. Based on the latest appraisals the Company has on file, the average loan-to-value ratio on hospitality loans was approximately 60%. Most of the Company's commercial operating loans were extended to finance local and regional businesses and include short-term loans to finance machinery and equipment purchases, inventory and accounts receivable. Commercial operating loans also may involve the extension of revolving credit for a combination of equipment acquisitions and working capital in expanding companies. The maximum term for loans extended on machinery and equipment is based on the projected useful life of such machinery and equipment. Generally, the maximum term on non-mortgage lines of credit is one year. Consumer One-to-Four Family Real Estate and Other The Company's one-to-four family residential mortgage loans have terms up to a maximum of 30 years and with loan-to-value ratios up to 100% of the lesser of the appraised value of the property securing the loan or the contract price. However, the vast majority of these loans were originated with loan-to-value ratios below 80%. The Company also has five year and ten year ARM loans. As of June 30, 2020, over 93% of the one-to-four family real estate loans were located within the Community Bank division's footprint of South Dakota and Iowa. The Company also has a variety of secured consumer loans, primarily made up of home equity and home improvement loans. Substantially all of the Company’s home equity loans and lines of credit are secured by second mortgages on principal residences. The Bank lent amounts which, together with all prior liens, may have been up to 90% of the appraised value of the property securing the loan. Home equity loans and lines of credit generally have maximum terms of five years. As of June 30, 2020, the outstanding balance in these secured consumer loans was less than $4.0 million and approximately 99% of those were located within the Community Bank division's footprint of South Dakota and Iowa. Agricultural Real Estate and Operating The Company's agricultural loans finance the purchase of farmland, livestock, farm machinery and equipment, seed, fertilizer, and other farm-related products. Agricultural operating loans are at either an adjustable- or fixed-rate of interest for up to a one year term or, in the case of livestock, are due upon sale. Agricultural real estate loans were frequently originated with adjustable rates of interest. Generally, such loans provide for a fixed rate of interest for the first five years to 10 years, after which the loan will balloon or the interest rate will adjust annually. These loans generally amortize over a period of 20 years to 25 years. Fixed-rate agricultural real estate loans typically have terms up to 10 years. Agricultural real estate loans are generally limited to 75% of the value of the property securing the loan. As of June 30, 2020, 70% of the agricultural loans were real estate loans while the remaining 30% were agricultural operating loans and approximately 91% of the total agricultural loans were located within the Community Bank division's footprint of South Dakota and Iowa. Past due loans and leases were as follows:
| Accruing and Nonaccruing Loans and Leases |  |  |  |  |  |  |  |  |  |  |  | Nonperforming Loans and Leases |  |  |  |
(Dollars in Thousands) | 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
As of June 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans held for sale | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 79,905 |  |  | $ | 79,905 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
National Lending |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Term lending | 7,371 |  |  | 6,957 |  |  | 16,965 |  |  | 31,293 |  |  | 707,161 |  |  | 738,454 |  |  | 2,578 |  |  | 16,524 |  |  | 19,102 |
Asset based lending | — |  |  | — |  |  | — |  |  | — |  |  | 181,130 |  |  | 181,130 |  |  | — |  |  | — |  |  | — |
Factoring | — |  |  | — |  |  | — |  |  | — |  |  | 206,361 |  |  | 206,361 |  |  | — |  |  | 733 |  |  | 733 |
Lease financing | 4,623 |  |  | 5,669 |  |  | 4,583 |  |  | 14,875 |  |  | 250,113 |  |  | 264,988 |  |  | 1,907 |  |  | 3,518 |  |  | 5,425 |
Insurance premium finance | 1,711 |  |  | 3,379 |  |  | 3,723 |  |  | 8,813 |  |  | 350,334 |  |  | 359,147 |  |  | 3,723 |  |  | — |  |  | 3,723 |
SBA/USDA | 160 |  |  | — |  |  | 1,879 |  |  | 2,039 |  |  | 306,572 |  |  | 308,611 |  |  | 427 |  |  | 1,510 |  |  | 1,937 |
Other commercial finance | — |  |  | — |  |  | — |  |  | — |  |  | 100,214 |  |  | 100,214 |  |  | — |  |  | — |  |  | — |
Commercial finance | 13,865 |  |  | 16,005 |  |  | 27,150 |  |  | 57,020 |  |  | 2,101,885 |  |  | 2,158,905 |  |  | 8,635 |  |  | 22,285 |  |  | 30,920 |
Consumer credit products | 506 |  |  | 412 |  |  | 337 |  |  | 1,255 |  |  | 101,553 |  |  | 102,808 |  |  | 337 |  |  | — |  |  | 337 |
Other consumer finance | 144 |  |  | 211 |  |  | 572 |  |  | 927 |  |  | 137,850 |  |  | 138,777 |  |  | 572 |  |  | — |  |  | 572 |
Consumer finance | 650 |  |  | 623 |  |  | 909 |  |  | 2,182 |  |  | 239,403 |  |  | 241,585 |  |  | 909 |  |  | — |  |  | 909 |
Tax services | — |  |  | 19,168 |  |  | — |  |  | 19,168 |  |  | — |  |  | 19,168 |  |  | — |  |  | — |  |  | — |
Warehouse finance | — |  |  | — |  |  | — |  |  | — |  |  | 277,614 |  |  | 277,614 |  |  | — |  |  | — |  |  | — |
Total National Lending | 14,515 |  |  | 35,796 |  |  | 28,059 |  |  | 78,370 |  |  | 2,618,902 |  |  | 2,697,272 |  |  | 9,544 |  |  | 22,285 |  |  | 31,829 |
Community Banking |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate and operating | 2,791 |  |  | 580 |  |  | 258 |  |  | 3,629 |  |  | 604,674 |  |  | 608,303 |  |  | 258 |  |  | 580 |  |  | 838 |
Consumer one-to-four family real estate and other | 863 |  |  | — |  |  | 121 |  |  | 984 |  |  | 165,495 |  |  | 166,479 |  |  | — |  |  | 121 |  |  | 121 |
Agricultural real estate and operating | 1,256 |  |  | 45 |  |  | 6,506 |  |  | 7,807 |  |  | 16,848 |  |  | 24,655 |  |  | 4,737 |  |  | 1,769 |  |  | 6,506 |
Total Community Banking | 4,910 |  |  | 625 |  |  | 6,885 |  |  | 12,420 |  |  | 787,017 |  |  | 799,437 |  |  | 4,995 |  |  | 2,470 |  |  | 7,465 |
Total loans and leases held for investment | 19,425 |  |  | 36,421 |  |  | 34,944 |  |  | 90,790 |  |  | 3,405,919 |  |  | 3,496,709 |  |  | 14,539 |  |  | 24,755 |  |  | 39,294 |
Total loans and leases | $ | 19,425 |  |  | $ | 36,421 |  |  | $ | 34,944 |  |  | $ | 90,790 |  |  | $ | 3,485,824 |  |  | $ | 3,576,614 |  |  | $ | 14,539 |  |  | $ | 24,755 |  |  | $ | 39,294 |
| Accruing and Nonaccruing Loans and Leases |  |  |  |  |  |  |  |  |  |  |  | Nonperforming Loans and Leases |  |  |  |
(Dollars in Thousands) | 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
As of September 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans held for sale | $ | 1,122 |  |  | $ | 755 |  |  | $ | 964 |  |  | $ | 2,841 |  |  | $ | 145,936 |  |  | $ | 148,777 |  |  | $ | 964 |  |  | $ | — |  |  | $ | 964 |
National Lending |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Term lending | 2,162 |  |  | 910 |  |  | 14,098 |  |  | 17,170 |  |  | 624,572 |  |  | 641,742 |  |  | 2,241 |  |  | 12,146 |  |  | 14,387 |
Asset based lending | — |  |  | — |  |  | — |  |  | — |  |  | 250,465 |  |  | 250,465 |  |  | — |  |  | — |  |  | — |
Factoring | — |  |  | — |  |  | — |  |  | — |  |  | 296,507 |  |  | 296,507 |  |  | — |  |  | 1,669 |  |  | 1,669 |
Lease financing | 1,160 |  |  | 1,134 |  |  | 1,736 |  |  | 4,030 |  |  | 173,885 |  |  | 177,915 |  |  | 1,530 |  |  | 308 |  |  | 1,838 |
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 |
Certain loans and leases 90 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 or lessee 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 or lease is evaluated for impairment. Often, this is associated with a delay or shortfall in scheduled payments, as described above. Impaired loans and leases were as follows:
As of June 30, 2020 | Recorded Balance |  | Unpaid Principal Balance |  | Specific Allowance
Loans and leases without a specific valuation allowance | (Dollars in Thousands) |  |  |  |
National Lending |  |  |  |  |
Term lending | $ | 17,442 |  |  | $ | 20,217 |  |  | $ | — |
Asset based lending | 2,805 |  |  | 2,805 |  |  | — |
Factoring | 1,282 |  |  | 2,357 |  |  | — |
Lease financing | 1,474 |  |  | 1,482 |  |  | — |
SBA/USDA | 870 |  |  | 870 |  |  | — |
Commercial finance | 23,873 |  |  | 27,731 |  |  | — |
Other consumer finance | 2,177 |  |  | 2,314 |  |  | — |
Consumer finance | 2,177 |  |  | 2,314 |  |  | — |
Total National Lending | 26,050 |  |  | 30,045 |  |  | — |
Community Banking |  |  |  |  |
Commercial real estate and operating | 259 |  |  | 259 |  |  | — |
Consumer one-to-four family real estate and other | 177 |  |  | 177 |  |  | — |
Agricultural real estate and operating | 2,437 |  |  | 2,437 |  |  | — |
Total Community Banking | 2,873 |  |  | 2,873 |  |  | — |
Total | $ | 28,923 |  |  | $ | 32,918 |  |  | $ | — |
Loans and leases with a specific valuation allowance |  |  |  |  |
National Lending |  |  |  |  |
Term lending | $ | 14,025 |  |  | $ | 14,037 |  |  | $ | 3,366 |
Factoring | 883 |  |  | 883 |  |  | 189 |
Lease financing | 3,221 |  |  | 3,221 |  |  | 1,350 |
SBA/USDA | 1,510 |  |  | 1,510 |  |  | 241 |
Commercial finance | 19,639 |  |  | 19,651 |  |  | 5,146 |
Total National Lending | 19,639 |  |  | 19,651 |  |  | 5,146 |
Community Banking |  |  |  |  |
Commercial real estate and operating | 160 |  |  | 160 |  |  | 141 |
Total Community Banking Loans | 160 |  |  | 160 |  |  | 141 |
Total | $ | 19,799 |  |  | $ | 19,811 |  |  | $ | 5,287 |
As of September 30, 2019 | Recorded Balance |  | Unpaid Principal Balance |  | Specific Allowance
Loans and leases without a specific valuation allowance | (Dollars in Thousands) |  |  |  |
National Lending |  |  |  |  |
Term lending | $ | 12,644 |  |  | $ | 13,944 |  |  | $ | — |
Asset based lending | 378 |  |  | 378 |  |  | — |
Factoring | 1,563 |  |  | 2,638 |  |  | — |
Lease financing | 1,062 |  |  | 1,062 |  |  | — |
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 |  |  |  |  |
Term lending | $ | 6,924 |  |  | $ | 6,951 |  |  | $ | 450 |
Factoring | 2,261 |  |  | 3,601 |  |  | 1,262 |
Lease financing | 151 |  |  | 151 |  |  | 112 |
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 |
The following table provides the average recorded investment in impaired loans and leases for the three and nine months ended:
| Three Months Ended June 30, |  |  |  |  |  |
| 2020 |  |  |  | 2019 |  |
(Dollars in Thousands) | Average Recorded Investment |  | Recognized Interest Income |  | Average Recorded Investment |  | Recognized Interest Income
National Lending |  |  |  |  |  |  |
Term lending | $ | 28,848 |  |  | $ | 121 |  |  | $ | 3,906 |  |  | $ | 88 |
Asset based lending | 935 |  |  | — |  |  | 2,777 |  |  | — |
Factoring | 4,715 |  |  | — |  |  | 6,621 |  |  | — |
Lease financing | 2,946 |  |  | 2 |  |  | 3,351 |  |  | — |
SBA/USDA | 3,162 |  |  | — |  |  | 425 |  |  | — |
Commercial finance | 40,606 |  |  | 123 |  |  | 17,080 |  |  | 88 |
Other consumer finance | 1,999 |  |  | 37 |  |  | 1,190 |  |  | 28 |
Consumer finance | 1,999 |  |  | 37 |  |  | 1,190 |  |  | 28 |
Total National Lending | 42,605 |  |  | 160 |  |  | 18,270 |  |  | 116 |
Community Banking |  |  |  |  |  |  |
Commercial real estate and operating | 405 |  |  | 1 |  |  | 106 |  |  | 5 |
Consumer one-to-four family real estate and other | 131 |  |  | — |  |  | 186 |  |  | 1 |
Agricultural real estate and operating | 2,437 |  |  | 10 |  |  | 1,226 |  |  | 28 |
Total Community Banking | 2,973 |  |  | 11 |  |  | 1,518 |  |  | 34 |
Total loans and leases | $ | 45,578 |  |  | $ | 171 |  |  | $ | 19,788 |  |  | $ | 150 |
| Nine Months Ended June 30, |  |  |  |  |  |
| 2020 |  |  |  | 2019 |  |
(Dollars in Thousands) | Average Recorded Investment |  | Recognized Interest Income |  | Average Recorded Investment |  | Recognized Interest Income
National Lending |  |  |  |  |  |  |
Term lending | $ | 24,946 |  |  | $ | 240 |  |  | $ | 4,667 |  |  | $ | 262 |
Asset based lending | 571 |  |  | — |  |  | 1,267 |  |  | — |
Factoring | 4,387 |  |  | — |  |  | 4,178 |  |  | 5 |
Lease financing | 2,929 |  |  | 14 |  |  | 3,070 |  |  | 17 |
SBA/USDA | 3,530 |  |  | — |  |  | 142 |  |  | — |
Commercial finance | 36,363 |  |  | 254 |  |  | 13,325 |  |  | 284 |
Other consumer finance | 1,775 |  |  | 111 |  |  | 1,215 |  |  | 38 |
Consumer finance | 1,775 |  |  | 111 |  |  | 1,215 |  |  | 38 |
Total National Lending | 38,138 |  |  | 365 |  |  | 14,540 |  |  | 322 |
Community Banking |  |  |  |  |  |  |
Commercial real estate and operating | 511 |  |  | 27 |  |  | 259 |  |  | 9 |
Consumer one-to-four family real estate and other | 101 |  |  | 9 |  |  | 154 |  |  | 3 |
Agricultural real estate and operating | 2,677 |  |  | (134) |  |  | 1,371 |  |  | 63 |
Total Community Banking | 3,289 |  |  | (98) |  |  | 1,784 |  |  | 75 |
Total loans and leases | $ | 41,427 |  |  | $ | 267 |  |  | $ | 16,324 |  |  | $ | 397 |
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 $1.4 million of national lending loans that were modified in a TDR during the three months ended June 30, 2020, all of which were modified to extend the term of the loan, and no community banking loans. There were $0.7 million community banking loans and $0.1 million of national lending loans and leases that were modified in a TDR during the three months ended June 30, 2019. During the nine months ended June 30, 2020, there were $5.5 million of national lending loans and $0.6 million of community bank loans that were modified in a TDR, all of which were modified to extend the term of the loan. There were $1.7 million of national lending loans and leases and $0.7 million of community banking loans that were modified in a TDR during the nine months ended June 30, 2019. During the nine months ended June 30, 2020, the Company had $3.3 million of community banking loans and $1.3 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 nine months ended June 30, 2019, the Company had $0.9 million of community banking loans and no national lending loans 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 quarters ended June 30, 2020 and June 30, 2019.

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