CASH 2017 Annual Report

136 The Bank was served on October 14, 2016, with a lawsuit captioned Card Limited, LLC v. MetaBank dba Meta Payment Systems, Civil No. 2:16-cv-00980 in the United States District Court for the District of Utah. This action was initiated by former prepaid program manager of the Bank, which was terminated by the Bank in fiscal year 2016. Card Limited alleges that after all of the programs have been wound down, there are two accounts with a positive balance to which they are entitled. The Bank’s position is that Card Limited is not entitled to the funds contained in said accounts. The total amount to which Card Limited claims it is entitled is $4,001,025. The Bank intends to vigorously defend this claim. An estimate of a range of reasonably possible loss cannot be made at this stage of the litigation because discovery is still being conducted. Other than the matters set forth above and litigation routine to the Company's or its subsidiaries' respective businesses, there are no other new material pending legal proceedings or updates to which the Company or its subsidiaries is a party. NOTE 15. LEASE COMMITMENTS The Company has leased property under various non-cancelable operating lease agreements which expire at various times through 2036, and require annual rentals ranging from $12,000 to $789,000 plus the payment of the property taxes, normal maintenance, and insurance on certain properties. The Company also entered into capital lease agreements during the fiscal year ended September 30, 2015, for building and equipment expiring at various times through fiscal year 2035. Amortization expense for these capital leases was $0.1 million for the fiscal year ended September 30, 2017, and included in interest expense. In November 2014, the Company entered into a sale-leaseback transaction for one of its retail bank locations in the Des Moines area. This lease meets the requirements of a capital lease and has been reflected as such in the financial statements. The original term of the lease is 20 years and does not contain any penalties for failure to renew after the initial 20 year term where guarantees or loans from the lessee to the lessor are expected to be outstanding. The Company has the option to extend the lease for four additional five year terms at the conclusion of the original lease term. The following table shows the total minimum rental commitment for our operating and capital leases for each of the years presented below as of September 30, 2017. Year Ended September 30, (Dollars in Thousands) Operating Leases Capital Leases 2018 $ 2,486 $ 179 2019 2,287 179 2020 2,289 182 2021 2,143 182 2022 1,882 182 Thereafter 17,922 2,240 Total Leases Commitments $ 29,009 $ 3,144 Amounts representing interest $ 1,206 Present value of net minimum lease payments 1,938 NOTE 16. SEGMENT REPORTING An operating segment is generally defined as a component of a business for which discrete financial information is available and whose results are reviewed by the chief operating decision-maker. Operating segments are aggregated into reportable segments if certain criteria are met. The Company reports its results of operations through the following three business segments: Payments, Banking, and Corporate Services/Other. Certain shared services, including the investment portfolio, wholesale deposits and borrowings, are included in Corporate Services/Other. Specialty Lending and Retail Bank are reported in the Banking segment. MPS, Refund Advantage, EPS, SCS, and other tax businesses are reported in the Payments segment.