Meta Financial Group, Inc.® Announces Results for 2021 Fiscal First Quarter
- Earnings Per Share Increased 50% Year-over-Year to
- Efficiency Ratio Improved 9% from Prior Year
“Solid revenues, lower expenses, and better efficiency ratios combined to deliver excellent results in the first quarter of fiscal year 2021. I am extremely proud of my team's ability to persevere during the pandemic, delivering significant value to customers and shareholders from a remote working environment," said President and CEO
"Our quarterly results demonstrate ongoing progress in optimizing our business platforms, enabling us to improve our efficiency ratio by over 600 basis points compared with the prior year. Our loan portfolios continue to perform well, as our credit metrics demonstrate the Company's ability to weather the worst of the pandemic, leaving us well-positioned to continue to remix our balance sheet with higher yield and return earning assets," said Executive Vice President and CFO
Business Development Highlights for the 2021 Fiscal First Quarter
- Began our new three-year program with
Emerald Financial Services, LLC , a wholly-owned indirect subsidiary of H&R Block, Inc., which we announced in the fourth quarter of fiscal 2020. Have already moved more than$150 million in deposits and began issuing Emerald Prepaid Mastercard® to applicants. - Completed negotiations with the
U.S. Department of the Treasury's Bureau of the Fiscal Service ("Fiscal Service") to disperse a second round of Economic Income Payment ("EIP") stimulus payments through the distribution of prepaid cards. The Company began distributing cards under this authorizationJanuary 4, 2021 . - Expanded our solar lending business, increasing our solar credit balance 29% to
$323.9 million . - Increased resources dedicated to our Environmental, Social, and Governance ("ESG") activities by hiring an experienced Vice President of ESG and Community Impact and forming a Board-level ESG committee to provide oversight.
Financial Highlights for the 2021 Fiscal First Quarter
- Total revenue for the first quarter was
$111.5 million , an increase of 9% compared to$102.1 million for the same quarter in fiscal 2020. - Operating efficiency ratio improved to 62.2% at
December 31, 2020 , compared to 68.2% atDecember 31, 2019 . See non-GAAP reconciliation table below. - Net interest income for the first quarter was
$66.0 million , compared to$64.7 million in the comparable quarter last year. - Net interest margin ("NIM") decreased to 4.65% for the first quarter from 4.94% during the same period of last year, while the tax-equivalent net interest margin ("NIM, TE") decreased to 4.67% from 4.99% for that same period in fiscal 2020. The decrease in NIM during the first quarter was primarily driven by excess cash associated with the Company's participation in the EIP program, as described further below.
- Total gross loans and leases at
December 31, 2020 decreased$143.7 million , or 4%, to$3.44 billion , compared toDecember 31, 2019 and increased$125.4 million , or 4% when compared toSeptember 30, 2020 . - Average deposits from the payments division for the fiscal 2021 first quarter increased nearly 83% to
$5.07 billion when compared to the same quarter in fiscal 2020. A significant portion of the year-over-year increase reflected the Company's participation in the EIP program, as described further below. - The Company repurchased 1,864,474 shares during the first quarter at an average price of
$29.46 . ThroughJanuary 20, 2021 , the Company repurchased an additional 300,000 of its shares, at a weighted average price of$38.73 .
COVID-19 Business Update
As of
As of
The Company's capital position remained strong as of
EIP Program Update
The Bank is serving as the sole Financial Agent for distributing prepaid debit cards used in the EIP program. The Company's Payments division, in collaboration with Fiserv and
On
Under the second round, the Bank disbursed approximately
While the EIP Program's impact to earnings is expected to be slightly positive, it continues to temporarily have a significant impact on cash and deposit balances, leading to a reduced NIM along with a corresponding impact on the Company's leverage capital ratios. In conjunction with the Program and its balance sheet impacts, the Bank was granted temporary exemption from its requirements to maintain minimum regulatory capital leverage ratios by the Officer of the Comptroller of the Currency due to deposits received as part of the EIP program. The influx of EIP deposits is not expected to have any material impact on the Company's risk-weighted capital ratios.
The Company is working with other banks to transfer deposits off-balance sheet in an effort to relieve the impact of the substantial influx of deposits related to the second round of EIP.
Net Interest Income
Net interest income for the fiscal 2021 first quarter was
During the first fiscal quarter of 2021, loan and lease interest income decreased
NIM decreased to 4.65% for the fiscal 2021 first quarter from 4.94% for the comparable quarter last year, primarily due to the effects of the EIP program.
The overall reported tax-equivalent yield (“TEY”) on average earning asset yields decreased by 116 basis points to 4.82% for the fiscal 2021 first quarter compared to the prior year quarter, driven primarily by excess low-yielding cash held at the
The Company's cost of funds for all deposits and borrowings averaged 0.15% during the fiscal 2021 first quarter, compared to 1.01% during the prior year quarter. This reflected primarily a decrease in overnight borrowings rates as well as an increase in the average balance of the Company's noninterest-bearing deposits, mainly due to the EIP program noted above. The Company's overall cost of deposits was 0.06% in the fiscal first quarter of 2021, compared to 0.81% in the same quarter last year.
Noninterest Income
Fiscal 2021 first quarter noninterest income increased to
Noninterest Expense
Noninterest expense decreased 4% to
Income Tax Expense
The Company recorded income tax expense of
The Company originated
Investments, Loans and Leases
Total investments | $ | 1,309,452 | $ | 1,360,712 | $ | 1,268,416 | $ | 1,310,476 | $ | 1,337,840 | ||||||||||||||
Loans held for sale | ||||||||||||||||||||||||
Consumer credit products | 234 | 962 | 391 | — | — | |||||||||||||||||||
SBA/ |
32,983 | 52,542 | 31,438 | 13,610 | 13,883 | |||||||||||||||||||
100,442 | 130,073 | 48,076 | — | 250,383 | ||||||||||||||||||||
Total loans held for sale | 133,659 | 183,577 | 79,905 | 13,610 | 264,266 | |||||||||||||||||||
National Lending | ||||||||||||||||||||||||
Term lending | 881,306 | 805,323 | 738,454 | 725,581 | 695,347 | |||||||||||||||||||
Asset based lending | 242,298 | 182,419 | 181,130 | 250,211 | 250,633 | |||||||||||||||||||
Factoring | 275,650 | 281,173 | 206,361 | 285,495 | 285,776 | |||||||||||||||||||
Lease financing | 283,722 | 281,084 | 264,988 | 238,788 | 223,715 | |||||||||||||||||||
Insurance premium finance | 338,227 | 337,940 | 359,147 | 332,800 | 349,299 | |||||||||||||||||||
SBA/ |
300,707 | 318,387 | 308,611 | 92,000 | 90,269 | |||||||||||||||||||
Other commercial finance | 101,209 | 101,658 | 100,214 | 101,472 | 99,617 | |||||||||||||||||||
Commercial Finance | 2,423,119 | 2,307,984 | 2,158,905 | 2,026,347 | 1,994,656 | |||||||||||||||||||
Consumer credit products | 88,595 | 89,809 | 102,808 | 113,544 | 115,843 | |||||||||||||||||||
Other consumer finance | 162,423 | 134,342 | 138,777 | 144,895 | 154,772 | |||||||||||||||||||
Consumer Finance | 251,018 | 224,151 | 241,585 | 258,439 | 270,615 | |||||||||||||||||||
Tax Services | 92,548 | 3,066 | 19,168 | 95,936 | 101,739 | |||||||||||||||||||
Warehouse Finance | 318,937 | 293,375 | 277,614 | 333,829 | 272,522 | |||||||||||||||||||
Total National Lending loans and leases | 3,085,622 | 2,828,576 | 2,697,272 | 2,714,551 | 2,639,532 | |||||||||||||||||||
Community Banking | ||||||||||||||||||||||||
Commercial real estate and operating | 339,141 | 457,371 | 608,303 | 654,429 | 682,399 | |||||||||||||||||||
Consumer one-to-four family real estate and other | 5,077 | 16,486 | 166,479 | 205,046 | 220,588 | |||||||||||||||||||
Agricultural real estate and operating | 9,724 | 11,707 | 24,655 | 36,759 | 40,778 | |||||||||||||||||||
Total Community Banking loans | 353,942 | 485,564 | 799,437 | 896,234 | 943,765 | |||||||||||||||||||
Total gross loans and leases | 3,439,564 | 3,314,140 | 3,496,709 | 3,610,785 | 3,583,297 | |||||||||||||||||||
Allowance for credit losses | (72,389 | ) | (56,188 | ) | (65,747 | ) | (65,355 | ) | (30,176 | ) | ||||||||||||||
Net deferred loan and lease origination fees | 9,111 | 8,625 | 5,937 | 8,139 | 7,177 | |||||||||||||||||||
Total loans and leases, net of allowance | $ | 3,376,286 | $ | 3,266,577 | $ | 3,436,899 | $ | 3,553,569 | $ | 3,560,298 |
(1) The
The Company's investment security balances at
Total gross loans and leases decreased
At
Consumer finance loans totaled
Tax services loans totaled
Community bank loans held for investment totaled
Asset Quality
Adoption of Current Expected Credit Losses ("CECL") Accounting Standard
The Company adopted CECL effective
Of the total
The Company’s allowance for credit losses was
The year over year increase in the allowance was primarily driven by a
The following table presents the Company's allowance for credit losses as a percentage of its total loans and leases.
As of the Period Ended | ||||||||
(Unaudited) | ||||||||
Commercial finance | 1.88 | % | 1.85 | % | 1.30 | % | 0.80 | % |
Consumer finance | 4.39 | % | 4.31 | % | 1.64 | % | 2.22 | % |
Tax services | 1.53 | % | 0.06 | % | 0.06 | % | 1.62 | % |
Warehouse finance | 0.10 | % | 0.10 | % | 0.10 | % | 0.10 | % |
National Lending | 1.89 | % | 1.86 | % | 1.20 | % | 0.90 | % |
4.01 | % | 3.37 | % | 4.59 | % | 0.68 | % | |
Total loans and leases | 2.10 | % | 2.08 | % | 1.70 | % | 0.84 | % |
(1) Represents the Company's allowance coverage ratio upon the adoption of the Accounting Standards Update 2016-13 using
The Company's allowance for credit losses as a percentage of total loans and leases increased to 2.10% at
Activity in the allowance for credit losses for the periods presented was as follows.
(Unaudited) | Three Months Ended | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Beginning balance | $ | 56,188 | $ | 65,747 | $ | 29,149 | ||||||||
Adoption of CECL accounting standard | 12,773 | — | — | |||||||||||
Provision - tax services loans | 454 | 1,599 | 911 | |||||||||||
Provision - all other loans and leases | 5,810 | 7,381 | 2,496 | |||||||||||
Charge-offs - tax services loans | — | (13,037 | ) | — | ||||||||||
Charge-offs - all other loans and leases | (5,675 | ) | (6,015 | ) | (3,918 | ) | ||||||||
Recoveries - tax services loans | 956 | 3 | 739 | |||||||||||
Recoveries - all other loans and leases | 1,883 | 510 | 799 | |||||||||||
Ending balance | $ | 72,389 | $ | 56,188 | $ | 30,176 |
Provision for credit losses was
The Company's past due loans and leases were as follows for the periods presented.
As of |
Accruing and Nonaccruing Loans and Leases | Nonperforming Loans and Leases | |||||||||||||||||||||||||||||||||
(Dollars in Thousands) | 30-59 Days Past Due |
60-89 Days Past Due |
> 89 Days Past Due | Total Past Due |
Current | Total Loans and Leases Receivable |
> 89 Days Past Due and Accruing | Non-accrual balance | Total | ||||||||||||||||||||||||||
Commercial finance | $ | 23,448 | $ | 7,358 | $ | 14,900 | $ | 45,706 | $ | 2,377,413 | $ | 2,423,119 | $ | 2,092 | $ | 18,707 | $ | 20,799 | |||||||||||||||||
Consumer finance | 1,415 | 404 | 1,132 | 2,951 | 248,067 | 251,018 | 1,132 | — | 1,132 | ||||||||||||||||||||||||||
Tax services | — | — | — | — | 92,548 | 92,548 | — | — | — | ||||||||||||||||||||||||||
Warehouse finance | — | — | — | — | 318,937 | 318,937 | — | — | — | ||||||||||||||||||||||||||
Total National Lending | 24,863 | 7,762 | 16,032 | 48,657 | 3,036,965 | 3,085,622 | 3,224 | 18,707 | 21,931 | ||||||||||||||||||||||||||
Total Community Banking | 13 | — | 2,379 | 2,392 | 351,550 | 353,942 | — | 20,389 | 20,389 | ||||||||||||||||||||||||||
Total loans and leases held for investment | $ | 24,876 | $ | 7,762 | $ | 18,411 | $ | 51,049 | $ | 3,388,515 | $ | 3,439,564 | $ | 3,224 | $ | 39,096 | $ | 42,320 |
As of |
Accruing and Nonaccruing Loans and Leases | Nonperforming Loans and Leases | |||||||||||||||||||||||||||||||||
(Dollars in Thousands) | 30-59 Days Past Due | 60-89 Days Past Due | > 89 Days Past Due | Total Past Due | Current | Total Loans and Leases Receivable | > 89 Days Past Due and Accruing | Non-accrual balance | Total | ||||||||||||||||||||||||||
Commercial finance | $ | 13,338 | $ | 14,345 | $ | 16,663 | $ | 44,346 | $ | 2,263,638 | $ | 2,307,984 | $ | 7,400 | $ | 21,553 | $ | 28,953 | |||||||||||||||||
Consumer finance | 977 | 894 | 872 | 2,743 | 221,408 | 224,151 | 872 | — | 872 | ||||||||||||||||||||||||||
Tax services | — | — | 1,743 | 1,743 | 1,323 | 3,066 | 1,744 | — | 1,744 | ||||||||||||||||||||||||||
Warehouse finance | — | — | — | — | 293,375 | 293,375 | — | — | — | ||||||||||||||||||||||||||
Total National Lending | 14,315 | 15,239 | 19,278 | 48,832 | 2,779,744 | 2,828,576 | 10,016 | 21,553 | 31,569 | ||||||||||||||||||||||||||
Total Community Banking | 905 | 114 | 2,449 | 3,468 | 482,096 | 485,564 | 50 | 2,399 | 2,449 | ||||||||||||||||||||||||||
Total loans and leases held for investment | $ | 15,220 | $ | 15,353 | $ | 21,727 | $ | 52,300 | $ | 3,261,840 | $ | 3,314,140 | $ | 10,066 | $ | 23,952 | $ | 34,018 |
The Company's nonperforming assets at
The Company's nonperforming loans and leases at
At
Deposits, Borrowings and Other Liabilities
Total average deposits for the fiscal 2021 first quarter increased by
The average balance of total deposits and interest-bearing liabilities was
Total end-of-period deposits increased 37% to
The Company and MetaBank remained above the federal regulatory minimum capital requirements at
The tables below 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 | 2020 |
2020 |
2020 |
2019 |
||||||||||
Company | ||||||||||||||
Tier 1 leverage capital ratio | 7.40 | % | 6.58 | % | 5.91 | % | 7.28 | % | 8.28 | % | ||||
Common equity Tier 1 capital ratio | 10.76 | % | 11.78 | % | 11.51 | % | 10.27 | % | 10.10 | % | ||||
Tier 1 capital ratio | 11.11 | % | 12.18 | % | 11.90 | % | 10.63 | % | 10.46 | % | ||||
Total capital ratio | 14.18 | % | 15.30 | % | 14.99 | % | 13.61 | % | 12.74 | % | ||||
MetaBank | ||||||||||||||
Tier 1 leverage capital ratio | 8.62 | % | 7.56 | % | 6.89 | % | 8.52 | % | 9.70 | % | ||||
Common equity Tier 1 capital ratio | 12.91 | % | 13.96 | % | 13.82 | % | 12.39 | % | 12.18 | % | ||||
Tier 1 capital ratio | 12.93 | % | 14.00 | % | 13.86 | % | 12.44 | % | 12.24 | % | ||||
Total capital ratio | 14.19 | % | 15.26 | % | 15.12 | % | 13.69 | % | 12.90 | % |
(1)
The following table provides the 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) | 2020 |
2020 |
2020 |
2020 |
2019 |
||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||
Total stockholders' equity | $ | 813,210 | $ | 847,308 | $ | 829,909 | $ | 805,074 | $ | 837,068 | |||||||||
Adjustments: | |||||||||||||||||||
LESS: |
301,999 | 302,396 | 302,814 | 303,625 | 304,020 | ||||||||||||||
LESS: Certain other intangible assets | 39,403 | 40,964 | 42,865 | 44,909 | 47,855 | ||||||||||||||
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards | 24,105 | 18,361 | 10,360 | 11,589 | 16,876 | ||||||||||||||
LESS: Net unrealized gains (losses) on available-for-sale securities | 19,894 | 17,762 | 8,382 | 2,337 | 3,897 | ||||||||||||||
LESS: Non-controlling interest | 1,536 | 3,603 | 3,787 | 3,762 | 4,305 | ||||||||||||||
ADD: Adoption of Accounting Standards Update 2016-13 | 10,804 | — | — | — | — | ||||||||||||||
Common Equity Tier 1(1) | 437,077 | 464,222 | 461,701 | 438,852 | 460,115 | ||||||||||||||
Long-term borrowings 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 | 749 | 1,894 | 1,894 | 2,036 | 2,372 | ||||||||||||||
Total Tier 1 Capital | 451,487 | 479,777 | 477,256 | 454,549 | 476,148 | ||||||||||||||
Allowance for credit losses | 51,070 | 49,343 | 50,338 | 53,580 | 30,239 | ||||||||||||||
Subordinated debentures (net of issuance costs) | 73,850 | 73,807 | 73,765 | 73,724 | 73,684 | ||||||||||||||
Total qualifying capital | $ | 576,407 | $ | 602,927 | $ | 601,359 | $ | 581,853 | $ | 580,071 |
(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 accumulated other comprehensive income ("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.
2020 |
2020 |
2020 |
2020 |
2019 |
|||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||
Total Stockholders' Equity | $ | 813,210 | $ | 847,308 | $ | 829,909 | $ | 805,074 | $ | 837,068 | |||||||||
Less: |
309,505 | 309,505 | 309,505 | 309,505 | 309,505 | ||||||||||||||
Less: Intangible assets | 39,660 | 41,692 | 43,974 | 46,766 | 50,151 | ||||||||||||||
Tangible common equity | 464,045 | 496,111 | 476,430 | 448,803 | 477,412 | ||||||||||||||
Less: Accumulated other comprehensive income (loss) ("AOCI") | 20,119 | 17,542 | 7,995 | 1,654 | 3,895 | ||||||||||||||
Tangible common equity excluding AOCI | $ | 443,926 | $ | 478,569 | $ | 468,435 | $ | 447,149 | $ | 473,517 |
Conference Call
The Company will host a conference call and earnings webcast at
Annual Meeting of Shareholders
The Annual Meeting of Shareholders will convene at
Upcoming Investor Events
- KBW Winter Financial Services Symposium,
February 10 - February 12, 2021 | Virtual KBW Fintech Payments Conference ,February 23 - February 25, 2021 | VirtualPiper Sandler Western Financial Services Conference ,March 2, 2021 | Virtual
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
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; expectations in connection with the impact of the ongoing COVID-19 pandemic and related government actions on our business, our industry and the capital markets; customer retention; loan and other product demand; expectations concerning acquisitions and divestitures; new products and services, including those offered by Meta Payment Systems, Refund Advantage, EPS Financial and Specialty Consumer Services divisions; credit quality; the level of net charge-offs and the adequacy of the allowance for credit losses; 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; expected growth opportunities may not be realized or may take longer to realize than expected; the potential adverse effects of the ongoing COVID-19 pandemic and any governmental or societal responses thereto including the deployment and efficacy of the COVID-19 vaccines, or other unusual and infrequently occurring events; actual changes in interest rates and the Fed Funds rate; additional changes in tax laws; the strength of
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 Financial Condition (Unaudited)
(Dollars in Thousands, Except Share Data)
ASSETS | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,586,451 | $ | 427,367 | $ | 3,108,141 | $ | 108,733 | $ | 152,189 | ||||||||||||||
Investment securities available for sale, at fair value | 797,363 | 814,495 | 825,579 | 840,525 | 852,603 | |||||||||||||||||||
Mortgage-backed securities available for sale, at fair value | 430,761 | 453,607 | 338,250 | 355,094 | 362,120 | |||||||||||||||||||
Investment securities held to maturity, at cost | 76,176 | 87,183 | 98,205 | 108,105 | 116,313 | |||||||||||||||||||
Mortgage-backed securities held to maturity, at cost | 5,152 | 5,427 | 6,382 | 6,752 | 6,804 | |||||||||||||||||||
Loans held for sale | 133,659 | 183,577 | 79,905 | 13,610 | 264,266 | |||||||||||||||||||
Loans and leases | 3,448,675 | 3,322,765 | 3,502,646 | 3,618,924 | 3,590,474 | |||||||||||||||||||
Allowance for credit losses | (72,389 | ) | (56,188 | ) | (65,747 | ) | (65,355 | ) | (30,176 | ) | ||||||||||||||
27,138 | 27,138 | 31,836 | 29,944 | 13,796 | ||||||||||||||||||||
Accrued interest receivable | 17,133 | 16,628 | 17,545 | 16,958 | 18,687 | |||||||||||||||||||
Premises, furniture, and equipment, net | 39,932 | 41,608 | 40,361 | 38,871 | 38,671 | |||||||||||||||||||
Rental equipment, net | 206,732 | 205,964 | 216,336 | 200,837 | 211,673 | |||||||||||||||||||
Bank-owned life insurance | 92,937 | 92,315 | 91,697 | 91,081 | 90,458 | |||||||||||||||||||
Foreclosed real estate and repossessed assets | 7,186 | 9,957 | 6,784 | 7,249 | 1,328 | |||||||||||||||||||
309,505 | 309,505 | 309,505 | 309,505 | 309,505 | ||||||||||||||||||||
Intangible assets | 39,660 | 41,692 | 43,974 | 46,766 | 50,151 | |||||||||||||||||||
Prepaid assets | 11,270 | 8,328 | 6,806 | 9,727 | 14,813 | |||||||||||||||||||
Deferred taxes | 24,411 | 17,723 | 15,944 | 20,887 | 19,752 | |||||||||||||||||||
Other assets | 82,763 | 82,983 | 104,877 | 85,652 | 97,499 | |||||||||||||||||||
Total assets | $ | 7,264,515 | $ | 6,092,074 | $ | 8,779,026 | $ | 5,843,865 | $ | 6,180,926 | ||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Deposits held for sale | $ | — | $ | — | $ | — | $ | — | $ | 288,975 | ||||||||||||||
Deposits: | ||||||||||||||||||||||||
Noninterest-bearing checking | 5,581,597 | 4,356,630 | 6,537,809 | 2,900,484 | 2,927,967 | |||||||||||||||||||
Interest-bearing checking | 274,504 | 157,571 | 187,003 | 152,504 | 67,642 | |||||||||||||||||||
Savings deposits | 54,080 | 47,866 | 55,896 | 37,615 | 17,436 | |||||||||||||||||||
Money market deposits | 56,440 | 48,494 | 40,811 | 37,266 | 42,286 | |||||||||||||||||||
Time certificates of deposit | 13,522 | 20,223 | 25,000 | 25,492 | 23,454 | |||||||||||||||||||
Wholesale deposits | 227,648 | 348,416 | 743,806 | 809,043 | 1,438,820 | |||||||||||||||||||
Total deposits | 6,207,791 | 4,979,200 | 7,590,325 | 3,962,404 | 4,517,605 | |||||||||||||||||||
Short-term borrowings | — | — | — | 717,000 | 194,000 | |||||||||||||||||||
Long-term borrowings | 96,760 | 98,224 | 209,781 | 211,353 | 213,070 | |||||||||||||||||||
Accrued interest payable | 2,068 | 1,923 | 4,332 | 3,607 | 6,620 | |||||||||||||||||||
Accrued expenses and other liabilities | 144,686 | 165,419 | 144,679 | 144,427 | 123,588 | |||||||||||||||||||
Total liabilities | 6,451,305 | 5,244,766 | 7,949,117 | 5,038,791 | 5,343,858 | |||||||||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
Preferred stock | — | — | — | — | — | |||||||||||||||||||
Common stock, |
326 | 344 | 346 | 346 | 372 | |||||||||||||||||||
Common stock, Nonvoting, |
— | — | — | — | — | |||||||||||||||||||
Additional paid-in capital | 598,669 | 594,569 | 592,693 | 590,682 | 587,678 | |||||||||||||||||||
Retained earnings | 198,000 | 234,927 | 228,500 | 212,027 | 244,005 | |||||||||||||||||||
Accumulated other comprehensive income | 20,119 | 17,542 | 7,995 | 1,654 | 3,895 | |||||||||||||||||||
(5,440 | ) | (3,677 | ) | (3,412 | ) | (3,397 | ) | (3,187 | ) | |||||||||||||||
Total equity attributable to parent | 811,674 | 843,705 | 826,122 | 801,312 | 832,763 | |||||||||||||||||||
Noncontrolling interest | 1,536 | 3,603 | 3,787 | 3,762 | 4,305 | |||||||||||||||||||
Total stockholders’ equity | 813,210 | 847,308 | 829,909 | 805,074 | 837,068 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 7,264,515 | $ | 6,092,074 | $ | 8,779,026 | $ | 5,843,865 | $ | 6,180,926 |
Consolidated Statements of Operations (Unaudited)
(Dollars in Thousands, Except Share and Per Share Data)
Three Months Ended | |||||||||||||
Interest and dividend income: | |||||||||||||
Loans and leases, including fees | $ | 61,655 | $ | 62,022 | $ | 68,702 | |||||||
Mortgage-backed securities | 2,123 | 1,877 | 2,389 | ||||||||||
Other investments | 4,368 | 4,508 | 6,534 | ||||||||||
68,146 | 68,407 | 77,625 | |||||||||||
Interest expense: | |||||||||||||
Deposits | 797 | 1,904 | 9,340 | ||||||||||
FHLB advances and other borrowings | 1,350 | 1,990 | 3,634 | ||||||||||
2,147 | 3,894 | 12,974 | |||||||||||
Net interest income | 65,999 | 64,513 | 64,651 | ||||||||||
Provision for credit losses | 6,089 | 8,980 | 3,407 | ||||||||||
Net interest income after provision for loan and lease losses | 59,910 | 55,533 | 61,244 | ||||||||||
Noninterest income: | |||||||||||||
Refund transfer product fees | 647 | 2,335 | 192 | ||||||||||
Tax advance product fees | 1,960 | (14 | ) | 2,276 | |||||||||
Payments card and deposit fees | 22,564 | 21,422 | 21,499 | ||||||||||
Other bank and deposit fees | 237 | 228 | 487 | ||||||||||
Rental income | 9,885 | 10,144 | 12,351 | ||||||||||
Gain on sale of securities available-for-sale, net | — | 51 | — | ||||||||||
Gain (loss) on sale of other | 2,847 | 3,455 | (2,568 | ) | |||||||||
Other income | 7,315 | 3,129 | 3,246 | ||||||||||
Total noninterest income | 45,455 | 40,750 | 37,483 | ||||||||||
Noninterest expense: | |||||||||||||
Compensation and benefits | 32,331 | 35,616 | 34,268 | ||||||||||
Refund transfer product expense | 61 | 162 | 173 | ||||||||||
Tax advance product expense | 370 | (97 | ) | 1,132 | |||||||||
Card processing | 6,117 | 6,524 | 5,607 | ||||||||||
Occupancy and equipment expense | 6,888 | 6,826 | 6,655 | ||||||||||
Operating lease equipment depreciation | 7,581 | 7,594 | 8,280 | ||||||||||
Legal and consulting | 5,247 | 5,615 | 4,674 | ||||||||||
Intangible amortization | 2,013 | 2,283 | 2,676 | ||||||||||
Impairment expense | 1,159 | 1,232 | 242 | ||||||||||
Other expense | 10,808 | 14,528 | 12,091 | ||||||||||
Total noninterest expense | 72,575 | 80,283 | 75,798 | ||||||||||
Income before income tax expense | 32,790 | 16,000 | 22,929 | ||||||||||
Income tax expense | 3,533 | 1,791 | 680 | ||||||||||
Net income before noncontrolling interest | 29,257 | 14,209 | 22,249 | ||||||||||
Net income attributable to noncontrolling interest | 1,220 | 1,051 | 1,181 | ||||||||||
Net income attributable to parent | $ | 28,037 | $ | 13,158 | $ | 21,068 | |||||||
Earnings per common share | |||||||||||||
Basic | $ | 0.84 | $ | 0.38 | $ | 0.56 | |||||||
Diluted | $ | 0.84 | $ | 0.38 | $ | 0.56 | |||||||
Shares used in computing earnings per common share | |||||||||||||
Basic | 32,782,285 | 33,783,659 | 36,613,699 | ||||||||||
Diluted | 32,790,895 | 33,783,659 | 36,647,789 |
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 in rates. Only the yield/rate reflects tax-equivalent adjustments. Nonaccruing loans and leases have been included in the table as loans carrying a zero yield.
Three Months Ended |
2020 | 2019 | |||||||||||||||||||
(Dollars in Thousands) | Average Outstanding Balance |
Interest Earned / Paid |
Yield / Rate(1) |
Average Outstanding Balance |
Interest Earned / Paid |
Yield / Rate(1) |
|||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Cash and fed funds sold | $ | 820,108 | $ | 842 | 0.41 | % | $ | 99,597 | $ | 412 | 1.65 | % | |||||||||
Mortgage-backed securities | 438,610 | 2,123 | 1.92 | % | 376,358 | 2,389 | 2.53 | % | |||||||||||||
Tax exempt investment securities | 333,729 | 1,215 | 1.83 | % | 490,982 | 2,339 | 2.40 | % | |||||||||||||
Asset-backed securities | 326,315 | 1,200 | 1.46 | % | 303,885 | 2,354 | 3.08 | % | |||||||||||||
Other investment securities | 221,986 | 1,111 | 1.98 | % | 197,513 | 1,429 | 2.88 | % | |||||||||||||
Total investments | 1,320,640 | 5,649 | 1.79 | % | 1,368,738 | 8,511 | 2.65 | % | |||||||||||||
Commercial finance loans and leases | 2,417,691 | 45,630 | 7.49 | % | 1,980,509 | 44,781 | 9.00 | % | |||||||||||||
Consumer finance loans | 239,618 | 4,748 | 7.86 | % | 270,612 | 5,790 | 8.51 | % | |||||||||||||
Tax services loans | 25,104 | 8 | 0.13 | % | 24,429 | 33 | 0.54 | % | |||||||||||||
Warehouse finance loans | 284,199 | 4,933 | 6.89 | % | 265,564 | 4,174 | 6.25 | % | |||||||||||||
National lending loans and leases | 2,966,612 | 55,319 | 7.40 | % | 2,541,114 | 54,778 | 8.58 | % | |||||||||||||
Community banking loans | 529,085 | 6,336 | 4.75 | % | 1,194,082 | 13,924 | 4.64 | % | |||||||||||||
Total loans and leases | 3,495,697 | 61,655 | 7.00 | % | 3,735,196 | 68,702 | 7.32 | % | |||||||||||||
Total interest-earning assets | $ | 5,636,445 | $ | 68,146 | 4.82 | % | $ | 5,203,531 | $ | 77,625 | 5.98 | % | |||||||||
Non-interest-earning assets | 845,378 | 918,973 | |||||||||||||||||||
Total assets | $ | 6,481,823 | $ | 6,122,504 | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Interest-bearing checking(2) | $ | 162,748 | $ | — | — | % | $ | 163,693 | $ | 153 | 0.37 | % | |||||||||
Savings deposits | 52,198 | 2 | 0.01 | % | 48,776 | 9 | 0.08 | % | |||||||||||||
Money market deposits | 52,620 | 39 | 0.30 | % | 80,528 | 205 | 1.01 | % | |||||||||||||
Time certificates of deposit | 17,390 | 57 | 1.30 | % | 114,924 | 595 | 2.06 | % | |||||||||||||
Wholesale deposits | 261,136 | 699 | 1.06 | % | 1,472,820 | 8,378 | 2.26 | % | |||||||||||||
Total interest-bearing deposits | 546,092 | 797 | 0.58 | % | 1,880,741 | 9,340 | 1.98 | % | |||||||||||||
Overnight fed funds purchased | 11 | — | 0.25 | % | 302,804 | 1,450 | 1.91 | % | |||||||||||||
FHLB advances | — | — | — | % | 110,000 | 678 | 2.45 | % | |||||||||||||
Subordinated debentures | 73,822 | 1,147 | 6.16 | % | 73,658 | 1,160 | 6.26 | % | |||||||||||||
Other borrowings | 23,870 | 203 | 3.37 | % | 33,589 | 346 | 4.10 | % | |||||||||||||
Total borrowings | 97,703 | 1,350 | 5.48 | % | 520,051 | 3,634 | 2.78 | % | |||||||||||||
Total interest-bearing liabilities | 643,795 | 2,147 | 1.32 | % | 2,400,792 | 12,974 | 5.15 | % | |||||||||||||
Noninterest-bearing deposits | 4,880,352 | — | — | % | 2,732,062 | — | — | % | |||||||||||||
Total deposits and interest-bearing liabilities | $ | 5,524,147 | $ | 2,147 | 0.15 | % | $ | 5,132,854 | $ | 12,974 | 1.01 | % | |||||||||
Other noninterest-bearing liabilities | 151,528 | 150,319 | |||||||||||||||||||
Total liabilities | 5,675,675 | 5,283,173 | |||||||||||||||||||
Shareholders' equity | 806,148 | 839,331 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 6,481,823 | $ | 6,122,504 | |||||||||||||||||
Net interest income and net interest rate spread including noninterest-bearing deposits | $ | 65,999 | 4.67 | % | $ | 64,651 | 4.97 | % | |||||||||||||
Net interest margin | 4.65 | % | 4.94 | % | |||||||||||||||||
Tax-equivalent effect | 0.02 | % | 0.05 | % | |||||||||||||||||
Net interest margin, tax-equivalent(3) | 4.67 | % | 4.99 | % |
(1) Tax rate used to arrive at the TEY for the three months ended
(2) Of the total balance,
(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 | 2020 |
2020 |
2020 |
2020 |
2019 |
||||||||||||||
Equity to total assets | 11.19 | % | 13.91 | % | 9.45 | % | 13.78 | % | 13.54 | % | |||||||||
Book value per common share outstanding | $ | 24.93 | $ | 24.66 | $ | 23.96 | $ | 23.26 | $ | 22.52 | |||||||||
Tangible book value per common share outstanding | $ | 14.23 | $ | 14.44 | $ | 13.76 | $ | 12.97 | $ | 12.84 | |||||||||
Tangible book value per common share outstanding excluding AOCI | $ | 13.61 | $ | 13.93 | $ | 13.53 | $ | 12.92 | $ | 12.74 | |||||||||
Common shares outstanding | 32,620,251 | 34,360,890 | 34,631,160 | 34,607,962 | 37,172,081 | ||||||||||||||
Nonperforming assets to total assets | 0.73 | % | 0.79 | % | 0.64 | % | 0.67 | % | 0.48 | % | |||||||||
Nonperforming loans and leases to total loans and leases | 1.18 | % | 0.97 | % | 1.10 | % | 0.87 | % | 0.62 | % | |||||||||
Net interest margin | 4.65 | % | 3.77 | % | 3.28 | % | 4.78 | % | 4.94 | % | |||||||||
Net interest margin, tax-equivalent | 4.67 | % | 3.79 | % | 3.31 | % | 4.82 | % | 4.99 | % | |||||||||
Return on average assets | 1.73 | % | 0.69 | % | 0.86 | % | 3.16 | % | 1.38 | % | |||||||||
Return on average equity | 13.91 | % | 6.21 | % | 8.83 | % | 25.15 | % | 10.04 | % | |||||||||
Full-time equivalent employees | 1,038 | 1,015 | 999 | 992 | 1,088 |
Non-GAAP Reconciliation
Efficiency Ratio | For the last twelve months ended | ||||||||||||||||||
(Dollars in Thousands) | 2020 |
2020 |
2020 |
2020 |
2019 |
||||||||||||||
Noninterest Expense - GAAP | $ | 315,828 | $ | 319,051 | $ | 314,911 | $ | 316,138 | $ | 334,663 | |||||||||
Net Interest Income | 260,386 | 259,038 | 260,142 | 264,973 | 268,586 | ||||||||||||||
Noninterest Income | 247,766 | 239,794 | 235,024 | 237,766 | 222,278 | ||||||||||||||
Total Revenue: GAAP | $ | 508,152 | $ | 498,832 | $ | 495,166 | $ | 502,739 | $ | 490,864 | |||||||||
Efficiency Ratio, last twelve months | 62.15 | % | 63.96 | % | 63.60 | % | 62.88 | % | 68.18 | % |
About
Investor Relations Contact: | |
Director of Investor Relations | |
605-362-2423 | |
bkelley@metabank.com | |
Media Relations: | |
mediarelations@metabank.com |