- 2019 Fiscal Fourth Quarter Net Income of $20.2 million, or $0.53 Per Diluted Share -

- Fiscal 2019 Net Income of $97.0 million, or $2.49 Per Diluted Share -

- Fiscal 2019 Earnings Per Share up 49% Versus Fiscal 2018 -

SIOUX FALLS, S.D., Oct. 24, 2019 (GLOBE NEWSWIRE) -- Meta Financial Group, Inc.^® (Nasdaq: CASH) (“Meta” or the “Company”) reported net income of $20.2 million, or $0.53 per diluted share, for the three months ended September 30, 2019, compared to net income of $8.7 million, or $0.24 per diluted share, for the three months ended September 30, 2018. The Company reported record net income of $97.0 million, or $2.49 per diluted share, for the fiscal year ended September 30, 2019, compared to net income of $51.6 million, or $1.67 per diluted share, for the fiscal year ended September 30, 2018.

“Earnings for the full fiscal year nearly doubled year-over-year, and more than doubled in the fiscal fourth quarter compared to the same period last year. This is reflective of the earnings power of the Company following our merger with Crestmark,” said President and CEO Brad Hanson. “Looking ahead, we remain focused on delivering against the key initiatives we have outlined with the goal of driving long-term value to shareholders. Finally, we continued to return excess capital to shareholders via quarterly dividends and ongoing share repurchases and plan to maintain flexibility as we continue to optimize our capital structure.”

Highlights for the 2019 Fiscal Fourth Quarter and Year Ended September 30, 2019

• Total gross loans and leases at September 30, 2019 increased 24% to $3.65 billion compared to September 30, 2018, and increased by $25.5 million, or 1%, when compared to June 30, 2019.
  
• Average deposits from the payments division increased $271.1 million, or 11%, to $2.63 billion for the 2019 fiscal fourth quarter when compared to the same quarter of fiscal 2018.
• Total revenue for the fiscal 2019 fourth quarter was $101.6 million, an increase of 39% from the same period of the prior year. Total revenue for the fiscal year ended September 30, 2019 was $486.8 million, an increase of 54% from the fiscal year ended September 30, 2018.
• Net interest income was $65.6 million for the 2019 fiscal fourth quarter, an increase of $17.1 million, or 35%, compared to $48.5 million for the fourth quarter of fiscal 2018. Total fiscal year 2019 net interest income was $264.2 million, representing a $133.7 million increase over the prior fiscal year.
• Net interest margin ("NIM") was 4.95% for the fiscal fourth quarter of 2019, an increase from 4.05% over the same period of the prior year, while the tax-equivalent net interest margin ("NIM, TE") increased to 5.00% from 4.27% over that same period. NIM for the 2019 fiscal year was 4.91% compared to 3.14% during fiscal year 2018 while NIM, TE increased to 5.02% for fiscal year 2019 from 3.41% for fiscal year 2018.
• The Company recognized $3.5 million pre-tax, or $0.07 per share on an after-tax basis, in compensation and benefits expense charges during the fiscal 2019 fourth quarter related to organizational changes, including severance, to further support its key strategic initiatives and drive enhanced operating leverage.
• Repurchased $3.5 million, or 106,038 shares at an average price of $33.01 per share during the fiscal 2019 fourth quarter. For the 2019 fiscal year, the Company repurchased an aggregate of $46.5 million, or 1,680,772 shares at an average price of $27.67 per share. As of September 30, 2019, 319,228 shares remained available for repurchase under the common stock share repurchase program that was announced during the fiscal 2019 second quarter.

Net Interest Income
Net interest income for the fiscal 2019 fourth quarter was $65.6 million, an increase of 35% from the same quarter in 2018. The increase was driven primarily by growth in loans and leases, largely attributable to the Company's commercial, consumer and warehouse finance portfolios.

During the fourth quarter of fiscal 2019, loan and lease interest income grew by $25.5 million, when compared to the same quarter in fiscal 2018, offset in part by an increase in interest expense of $3.5 million. The quarterly average outstanding balance of loans and leases as a percentage of interest-earning assets for the quarter ended September 30, 2019 increased to 71%, from 52% for the quarter ended September 30, 2018, while the quarterly average balance of total investments as a percentage of interest-earning assets decreased to 28% from 46% over that same period. The Company’s average interest-earning assets for the fiscal 2019 fourth quarter grew by $515.9 million, or 11%, to $5.26 billion from the same quarter of the prior year, primarily as a result of growth in loans and leases in the Company's commercial finance portfolio.

NIM was 4.95% in the fiscal 2019 fourth quarter, an increase of 90 basis points from 4.05% in the fourth quarter of fiscal 2018. The net effect of purchase accounting accretion contributed 14 basis points to NIM for the fourth quarter of fiscal 2019 and 12 basis points to NIM for the same period of the prior year.

The overall reported tax-equivalent yield (“TEY”) on average-earning asset yields increased by 90 basis points to 6.15% when comparing the fiscal 2019 fourth quarter to the fiscal 2018 fourth quarter, driven primarily by the Company's improved earning asset mix, which reflects higher balances for the national lending portfolio. The fiscal 2019 fourth quarter TEY on the securities portfolio was 2.83% compared to 3.09% for the same period of the prior fiscal year.

The Company's cost of funds for all deposits and borrowings averaged 1.17% during the fiscal 2019 fourth quarter, compared to 1.01% for the fiscal 2018 fourth quarter. This increase was primarily due to an increase in the cost of wholesale funding, including brokered deposits. The Company's overall cost of deposits was 0.95% in the fiscal fourth quarter of 2019, compared to 0.78% in the same quarter of fiscal 2018.

Noninterest Income
Fiscal 2019 fourth quarter noninterest income was $36.0 million, an increase of 46% over the same quarter of fiscal 2018, which was due in large part to increases in rental income and gain on sale of loans and leases, primarily as a result of the Crestmark merger. Also contributing to the increase were growth in deposit fees and an improvement in gain (loss) on sale of securities. Partially offsetting the increase were decreases in card fee income and other income over that same period of the prior fiscal year. The card fee income decrease was primarily related to the transition of certain fees to deposit fees.

Noninterest Expense
Noninterest expense increased to $76.1 million, or 14%, for the fiscal 2019 fourth quarter, compared to the same quarter in fiscal 2018, primarily due to increases in compensation and benefits, operating lease depreciation expense, and occupancy and equipment expense. These increases were primarily a result of the Crestmark merger. The increase in noninterest expense was partially offset by a decrease in legal and consulting expenses when comparing the fiscal 2019 fourth quarter to the same period of the prior year. The Company recognized $3.5 million pre-tax in compensation and benefits expense related to organizational changes, including severance, during the fiscal fourth quarter of 2019.

Income Tax Expense
The Company recorded an income tax benefit of $0.1 million for the fiscal 2019 fourth quarter, compared to an income tax benefit of $7.6 million for the fiscal 2018 fourth quarter. The fiscal 2018 fourth quarter results included a $4.6 million income tax benefit recognized by the Company as a result of amending a historical tax return of Crestmark, Bancorp, Inc. Also contributing to the reduced income tax benefit was an increase in net income before tax during the fourth quarter of fiscal 2019 compared to the same period of the prior year. For the 2019 fiscal year, our effective tax rate was (3.4)%, compared to 9.0% for the 2018 fiscal year.

The Company originated $19.7 million in solar leases during the fiscal 2019 fourth quarter, compared to $15.0 million in solar leases originated during the fiscal 2018 fourth quarter, and originated $104.4 million in solar leases for the 2019 fiscal year. Investment tax credits related to solar leases are recognized ratably based on income throughout each fiscal year. The timing and impact of future solar tax credits are expected to vary from period to period, and Meta intends to undertake only those tax credit opportunities that meet the Company's underwriting and return criteria.

Investments, Loans and Leases

(Dollars in thousands)	September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2018				September 30, 2018
Total investments	$	1,407,257			$	1,502,640			$	1,649,754			$	1,855,791			$	2,019,968
Loans held for sale
Consumer credit products	122,299				45,582				42,342				24,233				—
SBA/USDA(1)	26,478				17,257				17,403				9,327				15,606
Total loans held for sale	148,777				62,839				59,745				33,560				15,606
National Lending
Asset based lending	688,520				615,309				572,210				554,072				477,917
Factoring	296,507				320,344				287,955				284,912				284,221
Lease financing	381,602				341,957				321,414				290,889				265,315
Insurance premium finance	361,105				358,772				307,875				330,712				337,877
SBA/USDA	88,831				99,791				77,481				67,893				59,374
Other commercial finance	99,665				99,677				98,956				89,402				85,145
Commercial Finance(2)	1,916,230				1,835,850				1,665,891				1,617,880				1,509,849
Consumer credit products	106,794				155,539				139,617				96,144				80,605
Other consumer finance	161,404				164,727				170,824				182,510				189,756
Consumer Finance	268,198				320,266				310,441				278,654				270,361
Tax Services	2,240				24,410				84,824				76,575				1,073
Warehouse Finance	262,924				250,003				186,697				176,134				65,000
Total National Lending loans and leases	2,449,592				2,430,529				2,247,853				2,149,243				1,846,283
Community Banking
Commercial real estate and operating	883,932				877,412				869,917				863,753				790,890
Consumer one-to-four family real estate and other	259,425				256,853				257,079				256,341				247,318
Agricultural real estate and operating	58,464				61,169				60,167				58,971				60,498
Total Community Banking loans	1,201,821				1,195,434				1,187,163				1,179,065				1,098,706
Total gross loan and leases	3,651,413				3,625,963				3,435,016				3,328,308				2,944,989
Allowance for loan and lease losses	(29,149		)		(43,505		)		(48,672		)		(21,290		)		(13,040		)
Net deferred loan and lease origination fees (costs)	7,434				5,068				2,964				1,190				(250		)
Total loan and leases, net of allowance	$	3,629,698			$	3,587,526			$	3,389,308			$	3,308,208			$	2,931,699

⁽¹⁾ The September 30, 2019 balance included $0.7 million of an interest rate mark premium related to the acquired loans and leases from the Crestmark acquisition.
⁽²⁾ The September 30, 2019 balance included $5.6 million and $2.6 million of credit and interest rate mark discounts, respectively, related to the acquired loans and leases from the Crestmark acquisition.

The Company continued to utilize sales of securities and cash flow from its amortizing securities portfolio to fund loan and lease growth. Investment securities totaled $1.41 billion at September 30, 2019, as compared to $2.02 billion at September 30, 2018.

Total gross loans and leases receivable increased $706.4 million, or 24%, to $3.65 billion at September 30, 2019 from $2.94 billion at September 30, 2018, which was primarily attributable to growth in the commercial finance and warehouse finance portfolios.

At September 30, 2019, commercial finance loans, which comprised 52% of the Company's gross loan and lease portfolio, totaled $1.92 billion, reflecting growth of $80.4 million, or 4%, from June 30, 2019.

Community banking loans grew $103.1 million, or 9%, at September 30, 2019 compared to September 30, 2018.

Asset Quality
The Company’s allowance for loan and lease losses was $29.1 million at September 30, 2019, compared to $13.0 million at September 30, 2018, which difference was driven primarily by increases in the allowance in the commercial and consumer finance portfolios of $13.3 million and $2.6 million, respectively. The Company's allowance at September 30, 2019 decreased $14.4 million compared to June 30, 2019, primarily from net charge-offs of $18.5 million during the 2019 fiscal fourth quarter, of which $15.4 million were related to charging-off a majority of the remaining balances of tax services loans. The timing and amount of these net charge-offs within the tax services portfolio are consistent with the same period of the prior year.

The following table presents, for the periods indicated, the allowance for loan and lease loss activity.

(Unaudited)	Three Months Ended												Year Ended
Allowance for loan and lease loss activity	September 30, 2019				June 30, 2019				September 30, 2018				September 30, 2019				September 30, 2018
(Dollars in thousands)
Beginning balance	$	43,505			$	48,672			$	21,950			$	13,040			$	7,534
Provision - tax services loans	(9		)		914				1,009				24,873				21,344
Provision - all other loans and leases	4,130				8,198				3,697				30,776				8,089
Charge-offs - tax services loans	(15,426		)		(9,627		)		(11,295		)		(25,096		)		(21,802		)
Charge-offs - all other loans and leases	(3,351		)		(5,124		)		(3,420		)		(17,758		)		(4,162		)
Recoveries - tax services loans	10				36				31				223				453
Recoveries - all other loans and leases	290				436				1,068				3,091				1,584
Ending balance	$	29,149			$	43,505			$	13,040			$	29,149			$	13,040

Provision for loan and lease losses was $4.1 million for the quarter ended September 30, 2019, compared to $4.7 million for the comparable period in the prior fiscal year. The decrease in provision was primarily driven by a decrease in loan balances within the consumer finance portfolio, as well as a decrease in provision in the tax services and community bank portfolios to maintain allowance levels. As a partial offset, the provision in the commercial finance portfolio for the quarter ended September 30, 2019 increased year-over-year due to related loan and lease growth. Net charge-offs were $18.5 million for the quarter ended September 30, 2019, compared to $13.6 million for the quarter ended September 30, 2018.

For fiscal year 2019, the Company recorded a provision for loan and lease losses of $55.7 million, compared to $29.4 million for the prior fiscal year, primarily driven by loan and lease growth and increased net charge-offs within the commercial finance portfolio.

The Company’s nonperforming assets at September 30, 2019 were $56.5 million, representing 0.91% of total assets, compared to $51.0 million, or 0.84% of total assets at June 30, 2019 and $41.8 million, or 0.72% of total assets, at September 30, 2018. At September 30, 2019, foreclosed and repossessed assets were $29.5 million, representing 0.48% of total assets, compared to $29.5 million, or 0.48% of total assets at June 30, 2019 and $31.6 million, or 0.54% of total assets, at September 30, 2018. For each of these periods, the outstanding foreclosed and repossessed asset balance was primarily related to a previously disclosed agricultural relationship.

Deposits, Borrowings and Other Liabilities
Total average deposits for the 2019 fiscal fourth quarter increased by $466.6 million, or 11%, compared to the same period in fiscal 2018. Average wholesale deposits increased $265.5 million, or 20%, and noninterest-bearing checking deposits increased $219.9 million, or 9%, for the 2019 fiscal fourth quarter when compared to the same period in fiscal 2018. Average deposits from the payments division increased $271.1 million, or 11%, to $2.63 billion for the 2019 fiscal fourth quarter when compared to the same quarter of fiscal 2018.

The average balance of total deposits and interest-bearing liabilities was $5.15 billion for the three-month period ended September 30, 2019, compared to $4.58 billion for the same period in fiscal 2018, representing an increase of 12%.

Total end-of-period deposits decreased 2% to $4.34 billion at September 30, 2019, compared to $4.43 billion at September 30, 2018. The decrease in end-of-period deposits was primarily a result of decreases in certificates of deposits and noninterest-bearing checking deposits. The decrease in noninterest-bearing checking deposits is related to the cyclicality of the Company's business, as a portion of its noninterest-bearing deposit base can fluctuate depending on the day of the week, primarily related to payroll processing timing. As noted above, average noninterest-bearing checking deposits increased 9% for the 2019 fiscal fourth quarter when compared to the same period in fiscal 2018.

Regulatory Capital
The Company and MetaBank remained above the federal regulatory minimum capital requirements at September 30, 2019 and continued to be classified as well-capitalized institutions. Regulatory capital ratios of the Company and the Bank are stated in the table below.

The tables below also include certain non-GAAP financial measures that are used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews these measures along with other measures of capital as part of its financial analysis.

As of the dates indicated	September 30,  2019	June 30,  2019	March 31,  2019	December 31, 2018	September 30, 2018
Company
Tier 1 leverage capital ratio	8.33%	8.05%	7.45%	7.90%	8.50%
Common equity Tier 1 capital ratio	10.35%	10.19%	10.94%	10.10%	10.56%
Tier 1 capital ratio	10.71%	10.55%	11.31%	10.47%	10.97%
Total capital ratio	13.01%	13.22%	14.20%	12.69%	13.18%
MetaBank
Tier 1 leverage capital ratio	9.65%	9.37%	8.42%	9.01%	9.75%
Common equity Tier 1 capital ratio	12.31%	12.22%	12.72%	11.87%	12.50%
Tier 1 capital ratio	12.37%	12.27%	12.76%	11.91%	12.56%
Total capital ratio	13.02%	13.26%	13.92%	12.41%	12.89%

The following table provides non-GAAP financial measures used to compute certain of the ratios included in the table above, as well as a reconciliation of such non-GAAP financial measures to the most directly comparable financial measure in accordance with GAAP:

Standardized Approach(1)	September 30,  2019			June 30,  2019			March 31,  2019			December 31, 2018			September 30, 2018
	(Dollars in Thousands)
Total stockholders' equity	$	843,958		$	822,901		$	823,709		$	770,728		$	747,726
Adjustments:
LESS: Goodwill, net of associated deferred tax liabilities	304,020			302,850			302,768			299,037			299,456
LESS: Certain other intangible assets	50,501			53,249			56,456			61,317			64,716
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards	15,569			13,858			7,381			4,720			—
LESS: Net unrealized gains (losses) on available-for-sale securities	6,458			2,329			(10,022		)	(28,829		)	(33,114		)
LESS: Non-controlling interest	4,047			3,508			3,528			3,267			3,574
LESS: Unrealized currency gains (losses)	—			—			(242		)	(357		)	3
Common Equity Tier 1 (1)	463,363			447,107			463,840			431,573			413,091
Long-term debt and other instruments qualifying as Tier 1	13,661			13,661			13,661			13,661			13,661
Tier 1 minority interest not included in common equity tier 1 capital	2,350			2,119			2,064			1,796			2,118
Total Tier 1 capital	479,374			462,887			479,565			447,030			428,870
Allowance for loan and lease losses	29,272			43,641			48,812			21,422			13,185
Subordinated Debentures (net of issuance costs)	73,644			73,605			73,566			73,528			73,491
Total qualifying capital	$	582,290		$	580,133		$	601,963		$	541,980		$	515,546

⁽¹⁾ Capital ratios were determined using the Basel III capital rules that became effective on January 1, 2015. Basel III revised the definition of capital, increased minimum capital ratios, and introduced a minimum CET1 ratio; those changes are being fully phased in through the end of 2021.

The following table provides a reconciliation of tangible common equity and tangible common equity excluding AOCI, each of which is used in calculating tangible book value data, to Total Stockholders' Equity. Each of tangible common equity and tangible common equity excluding AOCI is a non-GAAP financial measure that is commonly used within the banking industry.

	September 30,  2019			June 30,  2019			March 31,  2019			December 31, 2018			September 30, 2018
	(Dollars in Thousands)
Total Stockholders' Equity	$	843,958		$	822,901		$	823,709		$	770,728		$	747,726
Less: Goodwill	309,505			307,941			307,464			303,270			303,270
Less: Intangible assets	52,810			56,153			60,506			66,366			70,719
Tangible common equity	481,643			458,807			455,739			401,092			373,737
Less: Accumulated Other Comprehensive Income (Loss) ("AOCI")	6,339			2,308			(10,264		)	(29,186		)	(33,111		)
Tangible common equity excluding AOCI (Loss)	$	475,304		$	456,499		$	466,003		$	430,278		$	406,848

Future Outlook
The Company currently expects full-year fiscal 2020 GAAP earnings per common share to range between $3.30 to $3.50.

Conference Call
The Company will host a conference call and earnings webcast at 4:00 p.m. CDT (5:00 p.m. EDT) on October 24, 2019. The live webcast of the call can be accessed from Meta’s Investor Relations website at www.metafinancialgroup.com. Telephone participants may access the live conference call by dialing (844) 461-9934 beginning approximately 10 minutes prior to start time. Please ask to join the Meta Financial conference call, and provide conference ID 6288753 upon request. International callers should dial (636) 812-6634. A webcast replay will also be archived at www.metafinancialgroup.com for one year.

Forward-Looking Statements
The Company and MetaBank may from time to time make written or oral “forward-looking statements,” including statements contained in this press release, the Company’s filings with the Securities and Exchange Commission (“SEC”), the Company’s reports to stockholders, and in other communications by the Company and MetaBank, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “could,” “future,” or the negative of those terms, or other words of similar meaning or similar expressions. You should carefully read statements that contain these words because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements are based on information currently available to us and assumptions about future events, and include statements with respect to the Company’s beliefs, expectations, estimates, and intentions, which are subject to significant risks and uncertainties, and are subject to change based on various factors, some of which are beyond the Company’s control. Such risks, uncertainties and other factors may cause our actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Such statements address, among others, the following subjects: future operating results; customer retention; loan and other product demand; important components of the Company's statements of financial condition and operations; growth and expansion; new products and services; credit quality and adequacy of reserves; technology; and the Company's employees. The following factors, among others, could cause the Company's financial performance and results of operations to differ materially from the expectations, estimates, and intentions expressed in such forward-looking statements: maintaining our executive management team; the expected growth opportunities, beneficial synergies and/or operating efficiencies from the Crestmark acquisition may not be fully realized or may take longer to realize than expected; customer losses and business disruption related to the Crestmark acquisition; unanticipated or unknown losses and liabilities may be incurred by the Company following the Crestmark acquisition; the costs, risks and effects on the Company of the ongoing federal investigation and bankruptcy proceedings involving DC Solar Solutions, Inc., DC Solar Distribution, Inc., and their affiliates, including the potential financial impact of those matters on the net book value of Company assets leased to DC Solar Distribution and the Company’s ability to recognize certain investment tax credits associated with such assets; factors relating to the Company’s share repurchase program; actual changes in interest rates and the Fed Funds rate; additional changes in tax laws; the strength of the United States' economy, in general, and the strength of the local economies in which the Company conducts operations; the effects of, and changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve”), as well as efforts of the United States Congress and the United States Treasury in conjunction with bank regulatory agencies to stimulate the economy and protect the financial system; inflation, market, and monetary fluctuations; the timely and efficient development of, and acceptance of, new products and services offered by the Company or its strategic partners, as well as risks (including reputational and litigation) attendant thereto, and the perceived overall value of these products and services by users; the risks of dealing with or utilizing third parties, including, in connection with the Company’s refund advance business, the risk of reduced volume of refund advance loans as a result of reduced customer demand for or acceptance of usage of Meta’s strategic partners’ refund advance products; any actions which may be initiated by our regulators in the future; the impact of changes in financial services laws and regulations, including, but not limited to, laws and regulations relating to the tax refund industry and the insurance premium finance industry; our relationship with our primary regulators, the Office of the Comptroller of the Currency and the Federal Reserve, as well as the Federal Deposit Insurance Corporation, which insures MetaBank’s deposit accounts up to applicable limits; technological changes, including, but not limited to, the protection of electronic files or databases; acquisitions; litigation risk, in general, including, but not limited to, those risks involving MetaBank's divisions; the growth of the Company’s business, as well as expenses related thereto; continued maintenance by MetaBank of its status as a well-capitalized institution, particularly in light of our growing deposit base, a portion of which has been characterized as “brokered”; changes in consumer spending and saving habits; and the success of the Company at maintaining its high quality asset level and managing and collecting assets of borrowers in default should problem assets increase.

The foregoing list of factors is not exclusive. We caution you not to place undue reliance on these forward-looking statements. The forward-looking statements included in this press release speak only as of the date hereof. Additional discussions of factors affecting the Company’s business and prospects are reflected under the caption “Risk Factors” and in other sections of the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended September 30, 2018, and in other filings made with the SEC. The Company expressly disclaims any intent or obligation to update any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of the Company or its subsidiaries, whether as a result of new information, changed circumstances, or future events or for any other reason.

Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in Thousands, Except Share and per Share Data)

ASSETS	September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018
Cash and cash equivalents	$	126,545		$	100,732		$	156,461		$	164,169		$	99,977
Investment securities available for sale, at fair value	889,947			961,897			1,081,663			1,340,870			1,484,160
Mortgage-backed securities available for sale, at fair value	382,546			395,201			413,493			354,186			364,065
Investment securities held to maturity, at cost	127,582			138,128			146,992			153,075			163,893
Mortgage-backed securities held to maturity, at cost	7,182			7,414			7,606			7,661			7,850
Loans held for sale	148,777			62,839			59,745			33,560			15,606
Loans and leases	3,658,847			3,631,031			3,437,980			3,329,498			2,944,739
Allowance for loan and lease losses	(29,149		)	(43,505		)	(48,672		)	(21,290		)	(13,040		)
Federal Home Loan Bank Stock, at cost	30,916			17,236			7,436			15,600			23,400
Accrued interest receivable	20,400			19,722			20,281			22,076			22,016
Premises, furniture, and equipment, net	45,932			46,360			45,457			44,299			40,458
Rental equipment, net	208,537			184,732			140,087			146,815			107,290
Bank-owned life insurance	89,827			89,193			88,565			87,934			87,293
Foreclosed real estate and repossessed assets	29,494			29,514			29,548			31,548			31,638
Goodwill	309,505			307,941			307,464			303,270			303,270
Intangible assets	52,810			56,153			60,506			66,366			70,719
Prepaid assets	9,476			22,023			26,597			31,483			27,906
Deferred taxes	18,884			21,630			19,079			23,607			18,737
Other assets	54,832			52,831			49,754			48,038			35,090
Total assets	$	6,182,890		$	6,101,072		$	6,050,042		$	6,182,765		5,835,067
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Noninterest-bearing checking	$	2,358,010		$	2,751,931		$	3,034,428		$	2,739,757		2,405,274
Interest-bearing checking	185,768			157,802			183,492			128,662			111,587
Savings deposits	49,773			52,179			59,978			52,229			54,765
Money market deposits	76,911			68,604			56,563			54,559			51,995
Time certificates of deposit	109,275			116,698			154,401			170,629			276,180
Wholesale deposits	1,557,268			1,628,000			1,481,445			1,790,611			1,531,186
Total deposits	4,337,005			4,775,214			4,970,307			4,936,447			4,430,987
Short-term borrowings	646,019			146,613			11,583			231,293			425,759
Long-term borrowings	215,838			209,765			99,800			88,983			88,963
Accrued interest payable	9,414			12,350			9,239			11,280			7,794
Accrued expenses and other liabilities	130,656			134,229			135,404			144,034			133,838
Total liabilities	5,338,932			5,278,171			5,226,333			5,412,037			5,087,341
STOCKHOLDERS’ EQUITY
Preferred stock	—			—			—			—			—
Common stock, $.01 par value	378			379			395			394			393
Common stock, Nonvoting, $.01 par value	—			—			—			—			—
Additional paid-in capital	580,826			578,715			576,406			572,156			565,811
Retained earnings	252,813			238,004			258,600			228,453			213,048
Accumulated other comprehensive income (loss)	6,339			2,308			(10,264		)	(29,186		)	(33,111		)
Treasury stock, at cost	(445		)	(13		)	(4,956		)	(4,356		)	(1,989		)
Total equity attributable to parent	839,911			819,393			820,181			767,461			744,152
Non-controlling interest	4,047			3,508			3,528			3,267			3,574
Total stockholders' equity	843,958			822,901			823,709			770,728			747,726
Total liabilities and stockholders’ equity	$	6,182,890		$	6,101,072		$	6,050,042		$	6,182,765		$	5,835,067

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended										Year Ended
(Dollars in Thousands, Except Share and Per Share Data)	September 30, 2019			June 30, 2019			September 30, 2018				September 30, 2019			September 30, 2018
Interest and dividend income:
Loans and leases, including fees	$	70,628		$	69,732		$	45,131			$	274,528		$	98,475
Mortgage-backed securities	2,768			3,063			3,724				11,390			15,479
Other investments	7,432			8,837			11,346				39,811			44,580
	80,828			81,632			60,201				325,729			158,534
Interest expense:
Deposits	10,917			10,395			8,057				46,648			15,163
FHLB advances and other borrowings	4,294			4,269			3,607				14,874			12,822
	15,211			14,664			11,664				61,522			27,985
Net interest income	65,617			66,968			48,537				264,207			130,549
Provision for loan and lease losses	4,121			9,112			4,706				55,650			29,432
Net interest income after provision for loan and lease losses	61,496			57,856			43,831				208,557			101,117
Noninterest income:
Refund transfer product fees	639			6,697			526				39,198			41,879
Tax advance product fees	(70		)	34			(36		)		34,687			35,703
Card fees	18,043			19,537			19,536				79,982			94,446
Rental income	10,886			9,386			7,333				41,053			7,333
Loan and lease fees	1,107			1,012			1,025				4,292			4,470
Bank-owned life insurance	634			628			638				2,535			2,590
Deposit fees	2,725			2,335			1,487				9,090			4,451
Gain (loss) on sale of securities available-for-sale, net	80			440			(6,979		)		729			(8,177		)
Gain on sale of loans and leases	1,380			1,913			355				5,244			355
Loss on foreclosed real estate	(93		)	—			—				(278		)	(19		)
Other income	649			1,808			728				6,013			1,494
Total noninterest income	35,980			43,790			24,613				222,545			184,525
Noninterest expense:
Compensation and benefits	38,461			35,176			30,093				155,811			109,044
Refund transfer product expense	48			287			85				7,526			11,750
Tax advance product expense	1			425			81				3,102			1,817
Card processing	5,008			4,613			5,485				23,677			26,283
Occupancy and equipment	7,265			7,136			5,653				28,071			19,740
Operating lease equipment depreciation	7,901			6,029			5,386				26,181			5,386
Legal and consulting	4,968			4,065			6,628				17,310			15,064
Marketing	1,195			368			1,037				2,688			2,674
Data processing	453			260			268				1,471			1,226
Intangible amortization	3,358			4,374			3,564				17,711			9,641
Impairment expense	—			—			18				9,660			18
Other expense	7,485			9,735			8,342				39,952			25,589
Total noninterest expense	76,143			72,468			66,640				333,160			228,232
Income before income tax expense	21,333			29,178			1,804				97,942			57,410
Income tax (benefit) expense	(130		)	(1,158		)	(7,591		)		(3,374		)	5,117
Net income before noncontrolling interest	21,463			30,336			9,395				101,316			52,293
Net income attributable to noncontrolling interest	1,268			1,045			673				4,312			673
Net income attributable to parent	$	20,195		$	29,291		$	8,722			$	97,004		$	51,620
Earnings per common share(1)
Basic	$	0.53		$	0.75		$	0.24			$	2.49		$	1.68
Diluted	$	0.53		$	0.75		$	0.24			$	2.49		$	1.67
Shares used in computing earnings per share(1)
Basic	37,868,788			38,903,266			35,711,400				38,880,919			30,737,499
Diluted	37,912,616			38,977,690			35,823,162				38,921,637			30,853,050

Average Balances, Interest Rates and Yields

The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. Only the yield/rate reflects tax-equivalent adjustments. Non-accruing loans and leases have been included in the table as loans carrying a zero yield.

Three Months Ended September 30,	2019											2018
(Dollars in Thousands)	Average Outstanding Balance				Interest Earned / Paid				Yield / Rate(1)			Average Outstanding Balance				Interest Earned / Paid				Yield / Rate(2)
Interest-earning assets:
Cash and fed funds sold	$	68,435			$	505			2.93	%		$	60,946			$	532			3.47	%
Mortgage-backed securities	396,075				2,768				2.77	%		543,042				3,724				2.72	%
Tax exempt investment securities	555,285				2,743				2.48	%		1,314,380				8,069				3.23	%
Asset-backed securities	307,080				2,615				3.38	%		273,625				2,251				3.26	%
Other investment securities	204,695				1,569				3.04	%		70,380				494				2.79	%
Total investments	1,463,135				9,695				2.83	%		2,201,427				14,538				3.09	%
Commercial finance loans and leases	1,882,699				44,375				9.35	%		1,091,459				27,035				9.83	%
Consumer finance loans	381,165				8,268				8.61	%		245,405				5,043				8.15	%
Tax services loans	21,445				(13		)		(0.25	)%		13,210				(14		)		(0.41	)%
Warehouse finance loans	249,022				3,913				6.24	%		57,228				879				6.09	%
National lending loans and leases	2,534,331				56,543				8.85	%		1,407,302				32,943				9.29	%
Community banking loans	1,195,214				14,085				4.68	%		1,075,586				12,188				4.50	%
Total loans and leases	3,729,545				70,628				7.51	%		2,482,888				45,131				7.21	%
Total interest-earning assets	5,261,115				$	80,828			6.15	%		4,745,261				$	60,201			5.25	%
Non-interest-earning assets	869,171											635,317
Total assets	$	6,130,286										$	5,380,578
Interest-bearing liabilities:
Interest-bearing checking	155,099				136				0.35	%		90,627				56				0.24	%
Savings	49,846				9				0.07	%		55,163				10				0.07	%
Money markets	71,793				157				0.86	%		49,822				41				0.33	%
Time deposits	115,036				601				2.07	%		214,946				926				1.71	%
Wholesale deposits	1,593,616				10,014				2.49	%		1,328,128				7,024				2.10	%
Total interest-bearing deposits	1,985,390				10,917				2.18	%		1,738,686				8,057				1.84	%
Overnight fed funds purchased	336,457				1,999				2.36	%		362,076				2,051				2.25	%
FHLB advances	115,707				713				2.44	%		—				—				—	%
Subordinated debentures	73,618				1,162				6.26	%		73,466				1,158				6.25	%
Other borrowings	45,302				420				3.68	%		31,593				398				5.00	%
Total borrowings	571,084				4,294				2.98	%		467,135				3,607				3.06	%
Total interest-bearing liabilities	2,556,474				15,211				2.36	%		2,205,821				11,664				2.10	%
Non-interest-bearing deposits	2,595,386				—				—	%		2,375,499				—				—	%
Total deposits and interest-bearing liabilities	5,151,860				$	15,211			1.17	%		4,581,320				$	11,664			1.01	%
Other non-interest-bearing liabilities	144,703											146,148
Total liabilities	5,296,563											4,727,468
Shareholders' equity	833,723											653,110
Total liabilities and shareholders' equity	$	6,130,286										$	5,380,578
Net interest income and net interest rate spread including non-interest-bearing deposits					$	65,617			4.98	%						$	48,537			4.24	%
Net interest margin									4.95	%										4.05	%
Tax equivalent effect									0.05	%										0.22	%
Net interest margin, tax-equivalent(3)									5.00	%										4.27	%

⁽¹⁾ Tax rate used to arrive at the TEY for the three months ended September 30, 2019 was 21%.
⁽²⁾ Tax rate used to arrive at the TEY for the three months ended September 30, 2018 was 24.53%.
⁽³⁾ Net interest margin expressed on a fully-taxable-equivalent basis ("net interest margin, tax-equivalent") is a non-GAAP financial measure. The tax-equivalent adjustment to net interest income recognizes the estimated income tax savings when comparing taxable and tax-exempt assets and adjusting for federal and state exemption of interest income. The Company believes that it is a standard practice in the banking industry to present net interest margin expressed on a fully-taxable-equivalent basis and, accordingly, believes the presentation of this non-GAAP financial measure may be useful for peer comparison purposes.

Selected Financial Information
As of and for the three months ended:	September 30,  2019				June 30, 2019				March 31, 2019				December 31, 2018				September 30, 2018
Equity to total assets	13.65		%		13.49		%		13.61		%		12.47		%		12.81		%
Book value per common share outstanding	$	22.32			$	21.72			$	20.88			$	19.56			$	19.09
Tangible book value per common share outstanding	$	12.74			$	12.11			$	11.55			$	10.18			$	9.54
Tangible book value per common share outstanding excluding AOCI	$	12.57			$	12.05			$	11.81			$	10.92			$	10.39
Common shares outstanding	37,807,064				37,878,205				39,450,938				39,405,508				39,167,280
Non-performing assets to total assets	0.91		%		0.84		%		0.68		%		0.73		%		0.72		%
Non-performing loans and leases to total loans and leases	0.70		%		0.57		%		0.28		%		0.42		%		0.35		%
Net interest margin	4.95		%		5.07		%		5.06		%		4.60		%		4.05		%
Net interest margin, tax-equivalent	5.00		%		5.15		%		5.18		%		4.76		%		4.27		%
Return on average assets	1.32		%		1.91		%		1.89		%		1.03		%		0.65		%
Return on average equity	9.69		%		14.17		%		16.18		%		8.19		%		5.34		%
Full-time equivalent employees	1,186				1,218				1,231				1,229				1,219

Quarterly Amortization of Intangibles Expense
(Dollars in Thousands)	Actual			Anticipated
For the Three Months Ended	Sep 30,  2019			Dec 31,  2019			Mar 31,  2020			Jun 30,  2020			Sep 30,  2020			Dec 31,  2020			Mar 31,  2021			Jun 30,  2021			Sep 30,  2021
Amortization of Intangibles(1)	$	3,358		$	2,675		$	3,400		$	2,632		$	2,277		$	2,008		$	2,752		$	2,008		$	1,756

⁽¹⁾ These amounts are based upon the current reporting period’s intangible assets only. This table makes no assumption for expenses related to future acquired intangible assets.

About Meta Financial Group®
Meta Financial Group, Inc. ® (Nasdaq: CASH) is the holding company for the financial services company MetaBank® (“Meta”). Founded in 1954, Meta has grown to operate in several different financial sectors: payments, commercial finance, tax services, community banking and consumer lending. Meta works with high-value niche industries, strategic-growth companies and technology adopters to grow their businesses and build more profitable customer relationships. Meta tailors solutions for bank and non-bank businesses, and provides a focused collaborative approach. The organization is helping to shape the evolving financial services landscape by directly investing in innovation and complementary businesses that strategically expand its suite of services. Meta has a national presence and over 1,200 employees, with corporate headquarters in Sioux Falls, S.D. For more information, visit the Meta Financial Groupwebsite or LinkedIn.

Investor Relations and Media Contact:

Brittany Kelley Elsasser

Director of Investor Relations

605.362.2423

bkelley@metabank.com

Source: MetaBank