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LOANS AND LEASES, NET (Tables)
 3 Months Ended
Dec. 31, 2021
Loans and Leases Receivable Disclosure [Abstract]  
Schedule of Loans Receivable
Loans and leases consist of the following:
(Dollars in thousands)December 31, 2021September 30, 2021
Term lending$1,038,378 $961,019 
Asset based lending337,236 300,225 
Factoring402,972 363,670 
Lease financing245,315 266,050 
Insurance premium finance385,473 428,867 
SBA/USDA209,521 247,756 
Other commercial finance178,853 157,908 
Commercial finance2,797,748 2,725,495 
Consumer credit products173,343 129,251 
Other consumer finance144,412 123,606 
Consumer finance317,755 252,857 
Tax services100,272 10,405 
Warehouse finance466,831 419,926 
Community banking— 199,132 
Total loans and leases3,682,606 3,607,815 
Net deferred loan origination costs1,655 1,748 
Total gross loans and leases3,684,261 3,609,563 
Allowance for credit losses(67,623)(68,281)
Total loans and leases, net$3,616,638 $3,541,282 
Schedule of Loans Purchased and Sold by Portfolio Segment
Loans purchased and sold by portfolio segment, including participation interests, were as follows:
Three Months Ended December 31,
(Dollars in thousands)20212020
Loans Purchased
Loans held for investment:
Commercial finance$1,720 $— 
Warehouse finance55,993 62,631 
Community banking— 2,299 
Total purchases$57,713 $64,930 
Loans Sold
Loans held for sale:
Commercial finance$33,023 $30,324 
Consumer finance376,444 291,540 
Community banking153,222 129,788 
Loans held for investment:
Community banking30,235 — 
Total sales$592,924 $451,652 
Sales-type Lease, Lease Income The net investment in direct financing and sales-type leases was comprised of the following:
(Dollars in thousands)December 31, 2021September 30, 2021
Carrying amount$255,907 $278,341 
Unguaranteed residual assets13,329 14,393 
Unamortized initial direct costs435 490 
Unearned income(23,921)(26,684)
Total net investment in direct financing and sales-type leases$245,750 $266,540 
Operating Lease, Lease Income
The components of total lease income were as follows:
Three Months Ended December 31,
(Dollars in thousands)20212020
Interest income - loans and leases
Interest income on net investments in direct financing and sales-type leases$4,573 $5,319 
Leasing and equipment finance noninterest income
Lease income from operating lease payments11,086 10,041 
Profit recorded on commencement date on sales-type leases— 71 
Other(1)
1,325 69 
Total leasing and equipment finance noninterest income12,411 10,181 
Total lease income$16,984 $15,500 
(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.
Sales-type and Direct Financing Leases, Lease Receivable, Maturity
Undiscounted future minimum lease payments receivable for direct financing and sales-type leases, and a reconciliation to the carrying amount recorded at December 31, 2021 were as follows:
(Dollars in thousands)
Remaining in 2022$78,421 
202386,354 
202454,978 
202526,113 
20267,124 
Thereafter2,918 
Total undiscounted future minimum lease payments receivable for direct financing and sales-type leases255,908 
Total carrying amount of direct financing and sales-type leases$255,908 
Annual Activity in Allowance for Loan Losses, Allowance for Loan Losses and Recorded Investment in Loans
Activity in the allowance for credit losses and balances of loans and leases by portfolio segment was as follows:
Three Months Ended December 31, 2021
(Dollars in thousands)Beginning BalanceProvision (Reversal)Charge-offsRecoveriesEnding Balance
Allowance for credit losses:
Term lending$29,351 $(858)$(2,085)$314 $26,722 
Asset based lending1,726 911 (16)137 2,758 
Factoring3,997 12,502 (1,275)18 15,242 
Lease financing7,629 (822)(16)66 6,857 
Insurance premium finance1,394 (270)(177)97 1,044 
SBA/USDA2,978 233 (217)2 2,996 
Other commercial finance1,168 181 — — 1,349 
Commercial finance48,243 11,877 (3,786)634 56,968 
Consumer credit products1,242 385 — — 1,627 
Other consumer finance6,112 1,560 (819)107 6,960 
Consumer finance7,354 1,945 (819)107 8,587 
Tax services2 (714)(254)2,567 1,601 
Warehouse finance420 47 — — 467 
Community banking12,262 (12,684)— 422 — 
Total loans and leases68,281 471 (4,859)3,730 67,623 
Unfunded commitments(1)
690 (285)— — 405 
Total $68,971 $186 $(4,859)$3,730 $68,028 
(1) Reserve for unfunded commitments is recognized within other liabilities on the Condensed Consolidated Statements of Financial Condition.
Three Months Ended December 31, 2020
(Dollars in thousands)Beginning BalanceImpact of CECL AdoptionProvision (Reversal)Charge-offsRecoveriesEnding Balance
Allowance for credit losses:
Term lending$15,211 $9,999 $6,026 $(3,312)$296 $28,220 
Asset based lending1,406 164 839 (600)— 1,809 
Factoring3,027 987 (1,416)(1)1,122 3,719 
Lease financing7,023 (556)1,112 (876)81 6,784 
Insurance premium finance2,129 (965)488 (656)289 1,285 
SBA/USDA940 2,720 (497)— 1 3,164 
Other commercial finance182 364 (67)— — 479 
Commercial finance29,918 12,713 6,485 (5,445)1,789 45,460 
Consumer credit products845 — (10)— — 835 
Other consumer finance2,821 5,998 1,482 (218)93 10,176 
Consumer finance3,666 5,998 1,472 (218)93 11,011 
Tax services2 — 454 — 956 1,412 
Warehouse finance294 (1)26 — — 319 
Community banking22,308 (5,937)(2,173)(11)— 14,187 
Total loans and leases56,188 12,773 6,264 (5,674)2,838 72,389 
Unfunded commitments(1)
32 831 (175)— — 688 
Total $56,220 $13,604 $6,089 $(5,674)$2,838 $73,077 
(1) Reserve for unfunded commitments is recognized within other liabilities on the Consolidated Statements of Financial Condition.
Past Due Loans and Leases
Past due loans and leases were as follows:
At December 31, 2021
Accruing and Nonaccruing Loans and LeasesNonperforming Loans and Leases
(Dollars in thousands)30-59 Days Past Due60-89 Days Past Due> 89 Days Past DueTotal Past DueCurrentTotal Loans and Leases Receivable> 89 Days Past Due and AccruingNonaccrual BalanceTotal
Loans held for sale$9 $2 $— $11 $36,171 $36,182 $— $— $— 
Term lending25,308 4,350 4,331 33,989 1,004,389 1,038,378 679 12,732 13,411 
Asset based lending216 — — 216 337,020 337,236 — 5,995 5,995 
Factoring— — — — 402,972 402,972 — 15,335 15,335 
Lease financing11,721 3,227 1,803 16,751 228,564 245,315 1,783 3,051 4,834 
Insurance premium finance1,409 777 721 2,907 382,566 385,473 721 — 721 
SBA/USDA2,414 185 713 3,312 206,209 209,521 713 647 1,360 
Other commercial finance405 — — 405 178,448 178,853 — — — 
Commercial finance41,473 8,539 7,568 57,580 2,740,168 2,797,748 3,896 37,760 41,656 
Consumer credit products3,307 1,838 617 5,762 167,581 173,343 617 — 617 
Other consumer finance1,573 439 917 2,929 141,483 144,412 917 — 917 
Consumer finance4,880 2,277 1,534 8,691 309,064 317,755 1,534 — 1,534 
Tax services— — — — 100,272 100,272 — — — 
Warehouse finance— — — — 466,831 466,831 — — — 
Community banking— — — — — — — — — 
Total loans and leases held for investment46,353 10,816 9,102 66,271 3,616,335 3,682,606 5,430 37,760 43,190 
Total loans and leases$46,362 $10,818 $9,102 $66,282 $3,652,506 $3,718,788 $5,430 $37,760 $43,190 
At September 30, 2021
Accruing and Nonaccruing Loans and LeasesNonperforming Loans and Leases
(Dollars in thousands)30-59 Days Past Due60-89 Days Past Due> 89 Days Past DueTotal Past DueCurrentTotal Loans and Leases Receivable> 89 Days Past Due and AccruingNonaccrual BalanceTotal
Loans held for sale$— $— $— $— $56,194 $56,194 $— $— $— 
Term lending11,879 2,703 5,452 20,034 940,985 961,019 2,558 14,904 17,462 
Asset based lending— — — — 300,225 300,225 — — — 
Factoring— — — — 363,670 363,670 — 1,268 1,268 
Lease financing4,909 3,336 8,401 16,646 249,404 266,050 8,345 3,158 11,503 
Insurance premium finance1,415 375 599 2,389 426,478 428,867 599 — 599 
SBA/USDA66 974 987 2,027 245,729 247,756 987 — 987 
Other commercial finance— — — — 157,908 157,908 — — — 
Commercial finance18,269 7,388 15,439 41,096 2,684,399 2,725,495 12,489 19,330 31,819 
Consumer credit products713 527 511 1,751 127,500 129,251 511 — 511 
Other consumer finance963 285 725 1,973 121,633 123,606 725 — 725 
Consumer finance1,676 812 1,236 3,724 249,133 252,857 1,236 — 1,236 
Tax services— — 7,962 7,962 2,443 10,405 7,962 — 7,962 
Warehouse finance— — — — 419,926 419,926 — — — 
Community banking— — — — 199,132 199,132 — 14,915 14,915 
Total loans and leases held for investment19,945 8,200 24,637 52,782 3,555,033 3,607,815 21,687 34,245 55,932 
Total loans and leases$19,945 $8,200 $24,637 $52,782 $3,611,227 $3,664,009 $21,687 $34,245 $55,932 
Financing Receivable, Nonaccrual
Nonaccrual loans and leases by year of origination at December 31, 2021 were as follows:
Amortized Cost Basis
Term Loans and Leases by Origination YearRevolving Loans and LeasesTotalNonaccrual with No ACL
(Dollars in thousands)20222021202020192018Prior
Term lending$— $765 $3,106 $8,123 $611 $127 $— $12,732 $3,025 
Asset based lending— — — — — — 5,995 5,995 — 
Factoring— — — — — — 15,335 15,335 — 
Lease financing— 87 18 2,380 546 20 — 3,051 — 
SBA/USDA— — 647 — — — — 647 326 
Commercial finance— 852 3,771 10,503 1,157 147 21,330 37,760 3,351 
Total nonaccrual loans and leases$— $852 $3,771 $10,503 $1,157 $147 $21,330 $37,760 $3,351 
Loans and leases that are 90 days or more delinquent and accruing by year of origination at December 31, 2021 were as follows:
Amortized Cost Basis
Term Loans and Leases by Origination YearRevolving Loans and LeasesTotal
(Dollars in thousands)20222021202020192018Prior
Term lending$— $84 $595 $— $— $— $— $679 
Lease financing132 973 79 380 126 93 — 1,783 
Insurance premium finance19 702 — — — — — 721 
SBA/USDA— — 647 — — 66 — 713 
Commercial finance151 1,759 1,321 380 126 159 — 3,896 
Consumer credit products— 471 5 141 — — — 617 
Other consumer finance— 7 — — — 910 — 917 
Consumer finance— 478 5 141 — 910 — 1,534 
Total 90 days or more delinquent and accruing$151 $2,237 $1,326 $521 $126 $1,069 $— $5,430 
Impaired Loans and Leases
Information on loans and leases that are deemed to be collateral dependent and are evaluated individually for the ACL was as follows:
(Dollars in thousands)At December 31, 2021At September 30, 2021
Term lending$68,838 $20,965 
Asset based lending5,992 — 
Factoring16,503 1,268 
Lease financing13,254 3,882 
SBA/USDA797 — 
Commercial finance(1)
105,384 26,115 
Community banking— 14,915 
Total$105,384 $41,030 
(1) For commercial finance, collateral dependent financial assets have collateral in the form of cash, equipment, or other business assets.

In response to the ongoing COVID-19 pandemic, the Company allowed modifications, such as payment deferrals and temporary forbearances, 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 December 31, 2021, $0.4 million of loan and lease balances that were granted deferral payments by the Company were still in their deferment period. 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. Other than the loan modifications that are on nonaccrual status, the Company is accruing and recognizing 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 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.

Loans and leases, or portions thereof, are generally charged off when collection of principal becomes doubtful. Typically, this is associated with a delay or shortfall in payments of 210 days or more for commercial insurance premium finance, 180 days or more for the purchased student loan portfolios, 120 days or more for consumer credit products and leases, and 90 days or more for community banking loans and commercial finance loans. Action is taken to charge off ERO loans if such loans have not been collected by the end of June and taxpayer advance loans if such loans have not been collected by the end of the calendar year. Nonaccrual loans and troubled debt restructurings are generally individually evaluated for expected credit losses.

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 allowable Allowance for Credit Losses.

The Company has various portfolios of consumer finance and tax services loans that present unique risks that are statistically managed. 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 credit losses on these portfolios, and as such, these loans are not included in the asset classification table below. The outstanding balances of consumer finance loans and tax services loans were $317.8 million and $100.3 million at December 31, 2021, respectively, and $252.9 million and $10.4 million at September 30, 2021, respectively. The amortized cost basis of loans and leases by asset classification and year of origination was as follows:
Amortized Cost Basis
(Dollars in thousands)Term Loans and Leases by Origination YearRevolving Loans and LeasesTotal
At December 31, 202120222021202020192018Prior
Term lending
Pass$145,763 $337,426 $175,447 $54,833 $37,328 $12,940 $— $763,737 
Watch9,627 53,179 70,323 27,372 7,346 2,979 — 170,826 
Special Mention194 888 21,679 4,409 697 3,127 — 30,994 
Substandard5,040 16,035 18,469 23,418 3,582 3,922 — 70,466 
Doubtful— 140 780 1,361 74 — — 2,355 
Total160,624 407,668 286,698 111,393 49,027 22,968 — 1,038,378 
Asset based lending
Pass— — — — — — 235,577 235,577 
Watch— — — — — — 30,560 30,560 
Special Mention— — — — — — 53,240 53,240 
Substandard— — — — — — 17,859 17,859 
Total— — — — — — 337,236 337,236 
Factoring
Pass— — — — — — 299,672 299,672 
Watch— — — — — — 37,974 37,974 
Special Mention— — — — — — 30,587 30,587 
Substandard— — — — — — 19,425 19,425 
Doubtful— — — — — — 15,314 15,314 
Total— — — — — — 402,972 402,972 
Lease financing
Pass5,592 47,808 61,345 13,162 6,148 365 — 134,420 
Watch1,122 21,300 18,565 6,966 2,693 2,095 — 52,741 
Special Mention765 17,737 14,560 3,768 1,263 55 — 38,148 
Substandard— 600 11,208 5,302 786 21 — 17,917 
Doubtful— — — 2,089 — — — 2,089 
Total7,479 87,445 105,678 31,287 10,890 2,536 — 245,315 
Insurance premium finance
Pass169,134 215,844 46 3 — — — 385,027 
Watch— 183 — — — — — 183 
Special Mention— 66 — — — — — 66 
Substandard— 78 20 — — — — 98 
Doubtful— 95 4 — — — — 99 
Total169,134 216,266 70 3 — — — 385,473 
SBA/USDA
Pass2,851 77,090 25,399 13,028 12,525 9,859 — 140,752 
Watch— — 19,705 1,963 — 1,350 — 23,018 
Special Mention— — 696 1,147 4,971 1,005 — 7,819 
Substandard— — 17,732 9,502 8,177 2,455 — 37,866 
Doubtful— — — — — 66 — 66 
Total2,851 77,090 63,532 25,640 25,673 14,735 — 209,521 
Other commercial finance
Pass20,130 28,666 764 5,885 2,428 67,777 — 125,650 
Watch— 20,000 16,807 3,322 — — — 40,129 
Special Mention— — — — 447 — — 447 
Substandard— 10,255 — — 270 2,102 — 12,627 
Total20,130 58,921 17,571 9,207 3,145 69,879 — 178,853 
Warehouse finance
Pass— — — — — — 466,831 466,831 
Total— — — — — — 466,831 466,831 
Total loans and leases
Pass343,470 706,834 263,000 86,911 58,428 90,942 1,002,081 2,551,666 
Watch10,750 94,662 125,398 39,623 10,039 6,426 68,533 355,431 
Special Mention959 18,690 36,935 9,324 7,380 4,186 83,827 161,301 
Substandard5,040 26,967 47,433 38,221 12,814 8,499 37,284 176,258 
Doubtful— 235 784 3,450 73 66 15,315 19,923 
Total$360,219 $847,388 $473,550 $177,529 $88,734 $110,119 $1,207,040 $3,264,579 

Amortized Cost Basis
(Dollars in thousands)Term Loans and Leases by Origination YearRevolving Loans and LeasesTotal
At September 30, 202120212020201920182017Prior
Term lending
Pass$362,443 $192,305 $63,708 $34,381 $3,195 $1,236 $— $657,268 
Watch63,046 71,701 32,941 21,419 76 3,628 — 192,811 
Special Mention6,422 26,673 4,821 932 70 633 — 39,551 
Substandard18,569 16,810 26,920 3,529 928 641 — 67,397 
Doubtful252 1,673 1,756 311 — — — 3,992 
Total450,732 309,162 130,146 60,572 4,269 6,138 — 961,019 
Asset based lending
Pass— — — — — — 185,432 185,432 
Watch— — — — — — 52,072 52,072 
Special Mention— — — — — — 43,135 43,135 
Substandard— — — — — — 19,586 19,586 
Total— — — — — — 300,225 300,225 
Factoring
Pass— — — — — — 294,124 294,124 
Watch— — — — — — 17,984 17,984 
Special Mention— — — — — — 33,035 33,035 
Substandard— — — — — — 18,527 18,527 
Total— — — — — — 363,670 363,670 
Lease financing
Pass54,434 73,629 17,153 7,511 1,857 203 — 154,787 
Watch22,061 20,455 9,274 2,739 1,454 — — 55,983 
Special Mention15,402 20,595 4,148 1,546 61 — — 41,752 
Substandard479 4,765 4,981 831 25 — — 11,081 
Doubtful— 6 2,402 38 1 — — 2,447 
Total92,376 119,450 37,958 12,665 3,398 203 — 266,050 
Insurance premium finance
Pass428,131 144 9 — — — — 428,284 
Watch262 5 — — — — — 267 
Special Mention58 5 — — — — — 63 
Substandard68 107 — — — — — 175 
Doubtful58 20 — — — — — 78 
Total428,577 281 9 — — — — 428,867 
SBA/USDA
Pass110,122 37,006 14,461 12,760 6,525 3,779 — 184,653 
Watch— 20,431 1,996 1,670 1,394 298 — 25,789 
Special Mention— 8,333 214 3,348 177 919 — 12,991 
Substandard— 3,812 9,550 8,079 2,169 713 — 24,323 
Total110,122 69,582 26,221 25,857 10,265 5,709 — 247,756 
Other commercial finance
Pass56,957 642 5,786 6,075 3,345 60,965 — 133,770 
Watch— 17,404 3,409 451 — — — 21,264 
Substandard466 — — 273 837 1,299 — 2,875 
Total57,423 18,046 9,195 6,799 4,182 62,264 — 157,909 
Warehouse finance
Pass— — — — — — 419,926 419,926 
Total— — — — — — 419,926 419,926 
Community banking
Pass— — 4,159 — 5,683 472 — 10,314 
Watch— 10,134 — 10,854 6,133 — — 27,121 
Special Mention— — 35,916 — — — — 35,916 
Substandard— 119 49,449 50,626 13,933 6,110 — 120,237 
Doubtful— 122 — 5,422 — — — 5,544 
Total— 10,375 89,524 66,902 25,749 6,582 — 199,132 
Total loans and leases
Pass1,012,088 303,727 105,274 60,727 20,605 66,655 899,481 2,468,557 
Watch85,369 140,131 47,620 37,132 9,057 3,926 70,056 393,291 
Special Mention21,882 55,606 45,099 5,826 307 1,552 76,171 206,443 
Substandard19,584 25,613 90,900 63,338 17,891 8,762 38,113 264,201 
Doubtful310 1,822 4,158 5,770 1 — — 12,061 
Total$1,139,233 $526,899 $293,051 $172,793 $47,861 $80,895 $1,083,821 $3,344,553 
The following table provides the average recorded investment in nonaccrual loans and leases:
Three Months Ended December 31,
(Dollars in thousands)20212020
Term lending$13,922 $14,876 
Asset based lending4,011 1,074 
Factoring12,247 935 
Lease financing3,033 3,556 
SBA/USDA216 600 
Commercial finance33,429 21,041 
Community banking— 8,433 
Total loans and leases$33,429 $29,474