DIVESTITURES

9 Months Ended

Jun. 30, 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 nine months ended June 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 $1.4 million in servicing fee expense during the nine months ended June 30, 2020.

On August 4, 2020, the Company sold an additional $58.6 million of the retained Community Bank portfolio to Central Bank. The sale did not result in any material gain to the Company. The loans included in the sale were classified as held for sale for the quarter ended June 30, 2020. See Note 6. Loans and Leases, Net, and Note 19. Subsequent Events, for additional information.

The Company has summarized the Community Bank division results for the three and nine months ended June 30, 2020 below.


(Dollars in Thousands)	Community Bank Sold⁽¹⁾		Community Bank Retained⁽²⁾		Total Community Bank
Three Months Ended June 30, 2020
Net interest income	$	—	$	7,955	$	7,955
(Reversal) Provision for loan and lease losses	(491)		7,547		7,056
Noninterest income	—		11		11
Noninterest expense	39		1,562		1,601
Net income (loss) before income tax expense	$	452	$	(1,143)	$	(691)
Nine Months Ended June 30, 2020
Net interest income	$	2,512	$	25,348	$	27,860
(Reversal) Provision for loan and lease losses	(2,241)		14,521		12,280
Noninterest income	19,694		(3,473)		16,221
Noninterest expense	4,955		5,113		10,068
Net income (loss) before income tax expense	$	19,492	$	2,241	$	21,733

⁽¹⁾ Reflects the activity of the assets and liabilities included in the disposal of the Community Bank division through June 30, 2020.

⁽²⁾ Reflects the activity of the retained Community Bank loan portfolio as of June 30, 2020.