Meta Financial Group, Inc.® Announces Record Earnings for 2019 Fiscal Year
- 2019 Fiscal Fourth Quarter Net Income of
- Fiscal 2019 Net Income of
- Fiscal 2019 Earnings Per Share up 49% Versus Fiscal 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
Highlights for the 2019 Fiscal Fourth Quarter and Year Ended
- Total gross loans and leases at September 30, 2019 increased 24% to
$3.65 billion compared toSeptember 30, 2018 , and increased by$25.5 million , or 1%, when compared toJune 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 endedSeptember 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 ofSeptember 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
During the fourth quarter of fiscal 2019, loan and lease interest income grew by
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
Noninterest Expense
Noninterest expense increased to
Income Tax Expense
The Company recorded an income tax benefit of
The Company originated
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
(2) The September 30, 2019 balance included
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
Total gross loans and leases receivable increased
At
Community banking loans grew
Asset Quality
The Company’s allowance for loan and lease losses was
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
For fiscal year 2019, the Company recorded a provision for loan and lease losses of
The Company’s nonperforming assets at September 30, 2019 were
Deposits, Borrowings and Other Liabilities
Total average deposits for the 2019 fiscal fourth quarter increased by
The average balance of total deposits and interest-bearing liabilities was
Total end-of-period deposits decreased 2% to
The Company and
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
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
Conference Call
The Company will host a conference call and earnings webcast at
Forward-Looking Statements
The Company and
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
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
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
(2) Tax rate used to arrive at the TEY for the three months ended
(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®
Investor Relations and Media Contact: |
Brittany Kelley Elsasser |
Director of Investor Relations |
605.362.2423 |
bkelley@metabank.com |
Source: MetaBank