Meta Financial Group, Inc.® Announces Results For Fiscal Year 2020
- 2020 Fiscal Fourth Quarter Net Income of
- Fiscal 2020 Net Income of
- Fiscal 2020 Earnings Per Share up 18% Versus Fiscal 2019 -
“I am extremely proud of our team for executing on our plan and our ability to deliver strong financial results and value to shareholders despite numerous challenges we faced during fiscal 2020,” said President and CEO
Business Developments
- The Company resumed its share repurchase program ("Program"), which it had suspended during
March 2020 as a result of the uncertainty related to the COVID-19 pandemic. During the quarter endedSeptember 30, 2020 , the Company repurchased 260,816 shares, at an average price of$19.13 , under its Program, which is authorized throughDecember 31, 2022 . ThroughOctober 23, 2020 , the Company has repurchased a total of 898,416 of its shares, at a weighted average price of$21.80 , since the Company resumed repurchasing shares under the Program inSeptember 2020 . - On
August 5, 2020 ,MetaBank, N.A. , a wholly-owned subsidiary of the Company ("MetaBank" or the "Bank"), entered into a three-year program management agreement withEmerald Financial Services, LLC , a wholly owned indirect subsidiary of H&R Block, Inc., pursuant to which MetaBank will serve as a facilitator for H&R Block’s suite of financial services products, which include: Emerald Prepaid MasterCard®, Refund Transfers, Refund Advances, Emerald Advance® lines of credit, and other products through H&R Block’s distribution channels. - The Company continued its support of various COVID-19 relief efforts including the Economic Impact Payment ("EIP") program and the Paycheck Protection Program ("PPP"), which are further described below.
Financial Highlights for the 2020 Fiscal Fourth Quarter and Year Ended
- Total gross loans and leases at
September 30, 2020 decreased$337.3 million , or 9%, to$3.31 billion , compared toSeptember 30, 2019 and decreased$182.6 million , or 5% when compared toJune 30, 2020 . - Average deposits from the payments divisions for the fiscal 2020 fourth quarter increased nearly 121% to
$5.82 billion when compared to the same quarter in fiscal 2019. A significant portion of the year-over-year increase reflected the Company's participation in the EIP program, as described further below. Excluding the balances on the EIP cards, average payments deposits for the fiscal 2020 fourth quarter were approximately$4.20 billion , representing an increase of 60% compared to the same quarter in fiscal 2019. - Total revenue for the fiscal 2020 fourth quarter was
$105.3 million , compared to$101.6 million for the same quarter in fiscal 2019. Total revenue for the fiscal year endedSeptember 30, 2020 was$498.8 million , an increase of 2% from the fiscal year endedSeptember 30, 2019 . - Net interest income for the fiscal 2020 fourth quarter was
$64.5 million , compared to$65.6 million in the comparable quarter in fiscal 2019. Total fiscal year 2020 net interest income was$259.0 million versus$264.2 million in the prior fiscal year. - Net interest margin ("NIM") decreased to 3.77% for the fiscal 2020 fourth quarter from 4.95% over the same period of the prior fiscal year, while the tax-equivalent net interest margin ("NIM, TE") decreased to 3.79% from 5.00% for that same period in fiscal 2019. NIM for the 2020 fiscal year was 4.09% compared to 4.91% during fiscal year 2019 while NIM, TE, decreased to 4.12% for fiscal year 2020 from 5.02% for fiscal year 2019. The decrease in NIM during the fiscal 2020 fourth quarter and 2020 fiscal year was primarily driven by excess cash associated with the Company's participation in the EIP program, as described further below.
COVID-19 Business Update
The Company is participating in the PPP which is being administered by the
From a credit perspective, the Company continues to closely monitor each of its lending portfolios. The Company has placed significant focus on its hospitality and movie theater loans and its small ticket equipment finance relationships. The credit management team has remained in regular contact with these borrowers.
The Company's community bank hospitality loan balances increased to
As of
As of
When excluding its seasonal tax services lending portfolio, the Company increased its allowance for loan and lease losses by
The Company's capital position remained strong as of
EIP Program Update
On
Under the EIP program, 3.6 million cards were delivered with a total load balance of
The total balances remaining on the EIP cards were
Net Interest Income
Net interest income for the fiscal 2020 fourth quarter was
During the fourth quarter of fiscal year 2020, loan and lease interest income decreased
NIM decreased to 3.77% for the fiscal 2020 fourth quarter from 4.95% for the comparable quarter in fiscal 2019, primarily due to the effects of the EIP program.
The overall reported tax-equivalent yield (“TEY”) on average earning asset yields decreased by 213 basis points to 4.02% for the fiscal 2020 fourth quarter compared to the fiscal 2019 fourth quarter, driven primarily by excess low-yielding cash held at the
The Company's cost of funds for all deposits and borrowings averaged 0.23% during the fiscal 2020 fourth quarter, compared to 1.17% for the fiscal 2019 fourth quarter. This decrease was primarily due to 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 0.12% in the fiscal fourth quarter of 2020, compared to 0.95% in the same quarter of fiscal 2019.
Noninterest Income
Fiscal 2020 fourth quarter noninterest income was
Noninterest Expense
Noninterest expense increased 5% to
Income Tax Expense
The Company recorded income tax expense of
The Company originated
Investments, Loans and Leases
Total investments | $ | 1,360,712 | $ | 1,268,416 | $ | 1,310,476 | $ | 1,337,840 | $ | 1,407,257 | |||||||||
Loans held for sale | |||||||||||||||||||
Consumer credit products | 962 | 391 | — | — | 122,299 | ||||||||||||||
SBA/ |
52,542 | 31,438 | 13,610 | 13,883 | 26,478 | ||||||||||||||
130,073 | 48,076 | — | 250,383 | — | |||||||||||||||
Total loans held for sale | 183,577 | 79,905 | 13,610 | 264,266 | 148,777 | ||||||||||||||
National Lending | |||||||||||||||||||
Term lending(2) | 805,323 | 738,454 | 725,581 | 695,347 | 641,742 | ||||||||||||||
Asset based lending(2) | 182,419 | 181,130 | 250,211 | 250,633 | 250,465 | ||||||||||||||
Factoring | 281,173 | 206,361 | 285,495 | 285,776 | 296,507 | ||||||||||||||
Lease financing(2) | 281,084 | 264,988 | 238,788 | 223,715 | 177,915 | ||||||||||||||
Insurance premium finance | 337,940 | 359,147 | 332,800 | 349,299 | 361,105 | ||||||||||||||
SBA/ |
318,387 | 308,611 | 92,000 | 90,269 | 88,831 | ||||||||||||||
Other commercial finance | 101,658 | 100,214 | 101,472 | 99,617 | 99,665 | ||||||||||||||
Commercial Finance | 2,307,984 | 2,158,905 | 2,026,347 | 1,994,656 | 1,916,230 | ||||||||||||||
Consumer credit products | 89,809 | 102,808 | 113,544 | 115,843 | 106,794 | ||||||||||||||
Other consumer finance | 134,342 | 138,777 | 144,895 | 154,772 | 161,404 | ||||||||||||||
Consumer Finance | 224,151 | 241,585 | 258,439 | 270,615 | 268,198 | ||||||||||||||
Tax Services | 3,066 | 19,168 | 95,936 | 101,739 | 2,240 | ||||||||||||||
Warehouse Finance | 293,375 | 277,614 | 333,829 | 272,522 | 262,924 | ||||||||||||||
Total National Lending loans and leases | 2,828,576 | 2,697,272 | 2,714,551 | 2,639,532 | 2,449,592 | ||||||||||||||
Community Banking | |||||||||||||||||||
Commercial real estate and operating | 457,371 | 608,303 | 654,429 | 682,399 | 883,932 | ||||||||||||||
Consumer one-to-four family real estate and other | 16,486 | 166,479 | 205,046 | 220,588 | 259,425 | ||||||||||||||
Agricultural real estate and operating | 11,707 | 24,655 | 36,759 | 40,778 | 58,464 | ||||||||||||||
Total Community Banking loans | 485,564 | 799,437 | 896,234 | 943,765 | 1,201,821 | ||||||||||||||
Total gross loans and leases | 3,314,140 | 3,496,709 | 3,610,785 | 3,583,297 | 3,651,413 | ||||||||||||||
Allowance for loan and lease losses | (56,188 | ) | (65,747 | ) | (65,355 | ) | (30,176 | ) | (29,149 | ) | |||||||||
Net deferred loan and lease origination fees | 8,625 | 5,937 | 8,139 | 7,177 | 7,434 | ||||||||||||||
Total loans and leases, net of allowance(3) | $ | 3,266,577 | $ | 3,436,899 | $ | 3,553,569 | $ | 3,560,298 | $ | 3,629,698 |
(1) The
(2) The Company updated the presentation of its loan and lease table beginning in the fiscal 2020 first quarter. The new presentation includes a new category called term lending. Certain balances previously included in the asset based lending and lease financing categories were reclassified into the new term lending category during the fiscal 2020 first quarter. Prior period balances have been conformed to the new presentation.
(3) As of
The Company's investment security balances at
Total gross loans and leases decreased
At
Community bank loans held for investment totaled
Asset Quality
The Company’s allowance for loan and lease losses was
The year over year increase in the allowance was primarily driven by a
The following table presents the Company's allowance for loan and lease losses as a percentage of its total loans and leases.
As of the Period Ended | |||||||
(Unaudited) | |||||||
Commercial finance | 1.30 | % | 1.36 | % | 0.76 | % | |
Consumer finance | 1.64 | % | 1.75 | % | 2.30 | % | |
Tax services | 0.06 | % | 59.67 | % | — | % | |
Warehouse finance | 0.10 | % | 0.10 | % | 0.10 | % | |
National Lending | 1.20 | % | 1.68 | % | 0.86 | % | |
4.59 | % | 2.55 | % | 0.68 | % | ||
Total loans and leases | 1.70 | % | 1.88 | % | 0.80 | % |
The Company's allowance for loan and lease losses as a percentage of total loans and leases decreased to 1.70% at
When adding the
Activity in the allowance for loan and lease losses for the periods presented were as follows.
(Unaudited) | Three Months Ended | Year Ended | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Beginning balance | $ | 65,747 | $ | 65,355 | $ | 43,505 | $ | 29,149 | $ | 13,040 | |||||||||
Provision - tax services loans | 1,599 | (100 | ) | (9 | ) | 22,006 | 24,873 | ||||||||||||
Provision - all other loans and leases | 7,381 | 15,193 | 4,130 | 42,770 | 30,776 | ||||||||||||||
Charge-offs - tax services loans | (13,037 | ) | (9,797 | ) | (15,426 | ) | (22,834 | ) | (25,096 | ) | |||||||||
Charge-offs - all other loans and leases | (6,015 | ) | (5,807 | ) | (3,351 | ) | (18,927 | ) | (17,758 | ) | |||||||||
Recoveries - tax services loans | 3 | 14 | 10 | 830 | 223 | ||||||||||||||
Recoveries - all other loans and leases | 510 | 889 | 290 | 3,194 | 3,091 | ||||||||||||||
Ending balance | $ | 56,188 | $ | 65,747 | $ | 29,149 | $ | 56,188 | $ | 29,149 |
Provision for loan and lease 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 | $ | 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 |
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 | $ | 13,865 | $ | 16,005 | $ | 27,150 | $ | 57,020 | $ | 2,101,885 | $ | 2,158,905 | $ | 8,635 | $ | 22,285 | $ | 30,920 | ||||||||
Consumer finance | 650 | 623 | 909 | 2,182 | 239,403 | 241,585 | 909 | — | 909 | |||||||||||||||||
Tax services | — | 19,168 | — | 19,168 | — | 19,168 | — | — | — | |||||||||||||||||
Warehouse finance | — | — | — | — | 277,614 | 277,614 | — | — | — | |||||||||||||||||
Total National Lending | 14,515 | 35,796 | 28,059 | 78,370 | 2,618,902 | 2,697,272 | 9,544 | 22,285 | 31,829 | |||||||||||||||||
Total Community Banking | 4,910 | 625 | 6,885 | 12,420 | 787,017 | 799,437 | 4,995 | 2,470 | 7,465 | |||||||||||||||||
Total loans and leases held for investment | $ | 19,425 | $ | 36,421 | $ | 34,944 | $ | 90,790 | $ | 3,405,919 | $ | 3,496,709 | $ | 14,539 | $ | 24,755 | $ | 39,294 |
The Company's nonperforming assets at
The Company's nonperforming loans and leases at
At
Adoption of Current Expected Credit Losses ("CECL") Accounting Standard
The Company adopted CECL effective
Deposits, Borrowings and Other Liabilities
Total average deposits for the fiscal 2020 fourth quarter increased by
The average balance of total deposits and interest-bearing liabilities was
Total end-of-period deposits increased 10% 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 |
2019 |
|||||||||
Company | ||||||||||||||
Tier 1 leverage capital ratio | 6.58 | % | 5.91 | % | 7.28 | % | 8.28 | % | 8.33 | % | ||||
Common equity Tier 1 capital ratio | 11.78 | % | 11.51 | % | 10.27 | % | 10.10 | % | 10.35 | % | ||||
Tier 1 capital ratio | 12.18 | % | 11.90 | % | 10.63 | % | 10.46 | % | 10.71 | % | ||||
Total capital ratio | 15.30 | % | 14.99 | % | 13.61 | % | 12.74 | % | 13.01 | % | ||||
MetaBank | ||||||||||||||
Tier 1 leverage capital ratio | 7.56 | % | 6.89 | % | 8.52 | % | 9.70 | % | 9.65 | % | ||||
Common equity Tier 1 capital ratio | 13.96 | % | 13.82 | % | 12.39 | % | 12.18 | % | 12.31 | % | ||||
Tier 1 capital ratio | 14.00 | % | 13.86 | % | 12.44 | % | 12.24 | % | 12.37 | % | ||||
Total capital ratio | 15.26 | % | 15.12 | % | 13.69 | % | 12.90 | % | 13.02 | % |
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 |
2019 |
2019 |
||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||
Total stockholders' equity | $ | 847,308 | $ | 829,909 | $ | 805,074 | $ | 837,068 | $ | 843,958 | |||||||||
Adjustments: | |||||||||||||||||||
LESS: |
302,396 | 302,814 | 303,625 | 304,020 | 304,020 | ||||||||||||||
LESS: Certain other intangible assets | 40,964 | 42,865 | 44,909 | 47,855 | 50,501 | ||||||||||||||
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards | 18,361 | 10,360 | 11,589 | 16,876 | 15,569 | ||||||||||||||
LESS: Net unrealized gains (losses) on available-for-sale securities | 17,762 | 8,382 | 2,337 | 3,897 | 6,458 | ||||||||||||||
LESS: Non-controlling interest | 3,603 | 3,787 | 3,762 | 4,305 | 4,047 | ||||||||||||||
Common Equity Tier 1(1) | 464,222 | 461,701 | 438,852 | 460,115 | 463,363 | ||||||||||||||
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 | 1,894 | 1,894 | 2,036 | 2,372 | 2,350 | ||||||||||||||
Total Tier 1 Capital | 479,777 | 477,256 | 454,549 | 476,148 | 479,374 | ||||||||||||||
Allowance for loan and lease losses | 49,343 | 50,338 | 53,580 | 30,239 | 29,272 | ||||||||||||||
Subordinated debentures (net of issuance costs) | 73,807 | 73,765 | 73,724 | 73,684 | 73,644 | ||||||||||||||
Total qualifying capital | $ | 602,927 | $ | 601,359 | $ | 581,853 | $ | 580,071 | $ | 582,290 |
(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 |
2019 |
2019 |
|||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||
Total Stockholders' Equity | $ | 847,308 | $ | 829,909 | $ | 805,074 | $ | 837,068 | $ | 843,958 | |||||||||
Less: |
309,505 | 309,505 | 309,505 | 309,505 | 309,505 | ||||||||||||||
Less: Intangible assets | 41,692 | 43,974 | 46,766 | 50,151 | 52,810 | ||||||||||||||
Tangible common equity | 496,111 | 476,430 | 448,803 | 477,412 | 481,643 | ||||||||||||||
Less: Accumulated other comprehensive income (loss) ("AOCI") | 17,542 | 7,995 | 1,654 | 3,895 | 6,339 | ||||||||||||||
Tangible common equity excluding AOCI | $ | 478,569 | $ | 468,435 | $ | 447,149 | $ | 473,517 | $ | 475,304 |
Conference Call
The Company will host a conference call and earnings webcast at
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 loan and lease 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, 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 | $ | 427,367 | $ | 3,108,141 | $ | 108,733 | $ | 152,189 | $ | 126,545 | |||||||||
Investment securities available for sale, at fair value | 814,495 | 825,579 | 840,525 | 852,603 | 889,947 | ||||||||||||||
Mortgage-backed securities available for sale, at fair value | 453,607 | 338,250 | 355,094 | 362,120 | 382,546 | ||||||||||||||
Investment securities held to maturity, at cost | 87,183 | 98,205 | 108,105 | 116,313 | 127,582 | ||||||||||||||
Mortgage-backed securities held to maturity, at cost | 5,427 | 6,382 | 6,752 | 6,804 | 7,182 | ||||||||||||||
Loans held for sale | 183,577 | 79,905 | 13,610 | 264,266 | 148,777 | ||||||||||||||
Loans and leases | 3,322,765 | 3,502,646 | 3,618,924 | 3,590,474 | 3,658,847 | ||||||||||||||
Allowance for loan and lease losses | (56,188 | ) | (65,747 | ) | (65,355 | ) | (30,176 | ) | (29,149 | ) | |||||||||
27,138 | 31,836 | 29,944 | 13,796 | 30,916 | |||||||||||||||
Accrued interest receivable | 16,628 | 17,545 | 16,958 | 18,687 | 20,400 | ||||||||||||||
Premises, furniture, and equipment, net | 41,608 | 40,361 | 38,871 | 38,671 | 45,932 | ||||||||||||||
Rental equipment, net | 205,964 | 216,336 | 200,837 | 211,673 | 208,537 | ||||||||||||||
Bank-owned life insurance | 92,315 | 91,697 | 91,081 | 90,458 | 89,827 | ||||||||||||||
Foreclosed real estate and repossessed assets | 9,957 | 6,784 | 7,249 | 1,328 | 29,494 | ||||||||||||||
309,505 | 309,505 | 309,505 | 309,505 | 309,505 | |||||||||||||||
Intangible assets | 41,692 | 43,974 | 46,766 | 50,151 | 52,810 | ||||||||||||||
Prepaid assets | 8,328 | 6,806 | 9,727 | 14,813 | 9,476 | ||||||||||||||
Deferred taxes | 17,723 | 15,944 | 20,887 | 19,752 | 18,884 | ||||||||||||||
Other assets | 82,983 | 104,877 | 85,652 | 97,499 | 54,832 | ||||||||||||||
Total assets | $ | 6,092,074 | $ | 8,779,026 | $ | 5,843,865 | $ | 6,180,926 | $ | 6,182,890 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
LIABILITIES | |||||||||||||||||||
Deposits held for sale | $ | — | $ | — | $ | — | $ | 288,975 | $ | — | |||||||||
Deposits: | |||||||||||||||||||
Noninterest-bearing checking | 4,356,630 | 6,537,809 | 2,900,484 | 2,927,967 | 2,358,010 | ||||||||||||||
Interest-bearing checking | 157,571 | 187,003 | 152,504 | 67,642 | 185,768 | ||||||||||||||
Savings deposits | 47,866 | 55,896 | 37,615 | 17,436 | 49,773 | ||||||||||||||
Money market deposits | 48,494 | 40,811 | 37,266 | 42,286 | 76,911 | ||||||||||||||
Time certificates of deposit | 20,223 | 25,000 | 25,492 | 23,454 | 109,275 | ||||||||||||||
Wholesale deposits | 348,416 | 743,806 | 809,043 | 1,438,820 | 1,557,268 | ||||||||||||||
Total deposits | 4,979,200 | 7,590,325 | 3,962,404 | 4,517,605 | 4,337,005 | ||||||||||||||
Short-term borrowings | — | — | 717,000 | 194,000 | 646,019 | ||||||||||||||
Long-term borrowings | 98,224 | 209,781 | 211,353 | 213,070 | 215,838 | ||||||||||||||
Accrued interest payable | 1,923 | 4,332 | 3,607 | 6,620 | 9,414 | ||||||||||||||
Accrued expenses and other liabilities | 165,419 | 144,679 | 144,427 | 123,588 | 130,656 | ||||||||||||||
Total liabilities | 5,244,766 | 7,949,117 | 5,038,791 | 5,343,858 | 5,338,932 | ||||||||||||||
STOCKHOLDERS’ EQUITY | |||||||||||||||||||
Preferred stock | — | — | — | — | — | ||||||||||||||
Common stock, |
344 | 346 | 346 | 372 | 378 | ||||||||||||||
Common stock, Nonvoting, |
— | — | — | — | — | ||||||||||||||
Additional paid-in capital | 594,569 | 592,693 | 590,682 | 587,678 | 580,826 | ||||||||||||||
Retained earnings | 234,927 | 228,500 | 212,027 | 244,005 | 252,813 | ||||||||||||||
Accumulated other comprehensive income | 17,542 | 7,995 | 1,654 | 3,895 | 6,339 | ||||||||||||||
(3,677 | ) | (3,412 | ) | (3,397 | ) | (3,187 | ) | (445 | ) | ||||||||||
Total equity attributable to parent | 843,705 | 826,122 | 801,312 | 832,763 | 839,911 | ||||||||||||||
Noncontrolling interest | 3,603 | 3,787 | 3,762 | 4,305 | 4,047 | ||||||||||||||
Total stockholders’ equity | 847,308 | 829,909 | 805,074 | 837,068 | 843,958 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 6,092,074 | $ | 8,779,026 | $ | 5,843,865 | $ | 6,180,926 | $ | 6,182,890 |
Consolidated Statements of Operations (Unaudited)
(Dollars in Thousands, Except Share and Per Share Data)
Three Months Ended | Year Ended | ||||||||||||||||||
Interest and dividend income: | |||||||||||||||||||
Loans and leases, including fees | $ | 62,022 | $ | 59,911 | $ | 70,628 | $ | 261,128 | $ | 274,528 | |||||||||
Mortgage-backed securities | 1,877 | 2,269 | 2,768 | 9,028 | 11,390 | ||||||||||||||
Other investments | 4,508 | 5,226 | 7,432 | 22,685 | 39,811 | ||||||||||||||
68,407 | 67,406 | 80,828 | 292,841 | 325,729 | |||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 1,904 | 3,130 | 10,917 | 22,616 | 46,648 | ||||||||||||||
FHLB advances and other borrowings | 1,990 | 2,139 | 4,294 | 11,187 | 14,874 | ||||||||||||||
3,894 | 5,269 | 15,211 | 33,803 | 61,522 | |||||||||||||||
Net interest income | 64,513 | 62,137 | 65,617 | 259,038 | 264,207 | ||||||||||||||
Provision for loan for lease losses | 8,980 | 15,093 | 4,121 | 64,776 | 55,650 | ||||||||||||||
Net interest income after provision for loan and lease losses | 55,533 | 47,044 | 61,496 | 194,262 | 208,557 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Refund transfer product fees | 2,335 | 4,595 | 639 | 36,061 | 39,198 | ||||||||||||||
Tax advance product fees | (14 | ) | 28 | (70 | ) | 31,826 | 34,687 | ||||||||||||
Payments card and deposit fees | 21,422 | 21,302 | 20,276 | 87,379 | 87,130 | ||||||||||||||
Other bank and deposit fees | 228 | 214 | 492 | 1,310 | 1,942 | ||||||||||||||
Rental income | 10,144 | 11,231 | 10,886 | 44,826 | 41,053 | ||||||||||||||
Gain on sale of securities available-for-sale, net | 51 | — | 80 | 51 | 729 | ||||||||||||||
Gain on divestitures | — | — | — | 19,275 | — | ||||||||||||||
Gain (loss) on sale of other | 3,455 | 1,214 | 1,715 | 4,425 | 7,831 | ||||||||||||||
Other income | 3,129 | 2,464 | 1,962 | 14,641 | 9,975 | ||||||||||||||
Total noninterest income | 40,750 | 41,048 | 35,980 | 239,794 | 222,545 | ||||||||||||||
Noninterest expense: | |||||||||||||||||||
Compensation and benefits | 35,616 | 32,102 | 38,461 | 136,247 | 155,811 | ||||||||||||||
Refund transfer product expense | 162 | (139 | ) | 48 | 7,644 | 7,526 | |||||||||||||
Tax advance product expense | (97 | ) | (11 | ) | 1 | 2,723 | 3,102 | ||||||||||||
Card processing | 6,524 | 7,128 | 5,008 | 25,956 | 23,677 | ||||||||||||||
Occupancy and equipment expense | 6,826 | 6,502 | 7,265 | 26,995 | 28,071 | ||||||||||||||
Operating lease equipment depreciation | 7,594 | 8,536 | 7,901 | 32,831 | 26,181 | ||||||||||||||
Legal and consulting | 5,615 | 4,660 | 4,968 | 20,858 | 17,310 | ||||||||||||||
Intangible amortization | 2,283 | 2,636 | 3,358 | 10,997 | 17,711 | ||||||||||||||
Impairment expense | 1,232 | — | — | 1,982 | 9,660 | ||||||||||||||
Other expense | 14,528 | 9,827 | 9,133 | 52,818 | 44,111 | ||||||||||||||
Total noninterest expense | 80,283 | 71,241 | 76,143 | 319,051 | 333,160 | ||||||||||||||
Income before income tax expense | 16,000 | 16,851 | 21,333 | 115,005 | 97,942 | ||||||||||||||
Income tax expense (benefit) | 1,791 | (2,426 | ) | (130 | ) | 5,661 | (3,374 | ) | |||||||||||
Net income before noncontrolling interest | 14,209 | 19,277 | 21,463 | 109,344 | 101,316 | ||||||||||||||
Net income attributable to noncontrolling interest | 1,051 | 1,087 | 1,268 | 4,624 | 4,312 | ||||||||||||||
Net income attributable to parent | $ | 13,158 | $ | 18,190 | $ | 20,195 | $ | 104,720 | $ | 97,004 | |||||||||
Earnings per common share | |||||||||||||||||||
Basic | $ | 0.38 | $ | 0.53 | $ | 0.53 | $ | 2.94 | $ | 2.49 | |||||||||
Diluted | $ | 0.38 | $ | 0.53 | $ | 0.53 | $ | 2.94 | $ | 2.49 | |||||||||
Shares used in computing earnings per share | |||||||||||||||||||
Basic | 34,596,422 | 34,616,038 | 37,868,788 | 35,651,709 | 38,880,919 | ||||||||||||||
Diluted | 34,596,422 | 34,623,114 | 37,912,616 | 35,651,709 | 38,921,637 |
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. Non-accruing 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 | $ | 1,960,020 | $ | 891 | 0.18 | % | $ | 68,435 | $ | 505 | 2.93 | % | |||||||||
Mortgage-backed securities | 394,456 | 1,877 | 1.89 | % | 396,075 | 2,768 | 2.77 | % | |||||||||||||
Tax exempt investment securities | 374,876 | 1,347 | 1.81 | % | 555,285 | 2,743 | 2.48 | % | |||||||||||||
Asset-backed securities | 331,939 | 1,241 | 1.49 | % | 307,080 | 2,615 | 3.38 | % | |||||||||||||
Other investment securities | 208,078 | 1,029 | 1.97 | % | 204,695 | 1,569 | 3.04 | % | |||||||||||||
Total investments | 1,309,349 | 5,494 | 1.78 | % | 1,463,135 | 9,695 | 2.83 | % | |||||||||||||
Commercial finance loans and leases | 2,240,591 | 42,390 | 7.53 | % | 1,882,699 | 44,375 | 9.35 | % | |||||||||||||
Consumer finance loans | 234,468 | 3,998 | 6.78 | % | 381,165 | 8,268 | 8.61 | % | |||||||||||||
Tax services loans | 16,651 | 5 | 0.13 | % | 21,445 | (13 | ) | (0.25 | )% | ||||||||||||
Warehouse finance loans | 287,294 | 4,378 | 6.06 | % | 249,022 | 3,913 | 6.24 | % | |||||||||||||
National lending loans and leases | 2,779,004 | 50,771 | 7.27 | % | 2,534,331 | 56,543 | 8.85 | % | |||||||||||||
Community banking loans | 757,993 | 11,251 | 5.91 | % | 1,195,214 | 14,085 | 4.68 | % | |||||||||||||
Total loans and leases | 3,536,997 | 62,022 | 6.98 | % | 3,729,545 | 70,628 | 7.51 | % | |||||||||||||
Total interest-earning assets | $ | 6,806,366 | $ | 68,407 | 4.02 | % | $ | 5,261,115 | $ | 80,828 | 6.15 | % | |||||||||
Non-interest-earning assets | 866,407 | 869,171 | |||||||||||||||||||
Total assets | $ | 7,672,773 | $ | 6,130,286 | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Interest-bearing checking(2) | $ | 186,952 | $ | — | — | % | $ | 155,099 | $ | 136 | 0.35 | % | |||||||||
Savings | 52,616 | 1 | 0.01 | % | 49,846 | 9 | 0.07 | % | |||||||||||||
Money markets | 41,179 | 32 | 0.31 | % | 71,793 | 157 | 0.86 | % | |||||||||||||
Time deposits | 21,947 | 92 | 1.66 | % | 115,036 | 601 | 2.07 | % | |||||||||||||
Wholesale deposits | 562,828 | 1,779 | 1.26 | % | 1,593,616 | 10,014 | 2.49 | % | |||||||||||||
Total interest-bearing deposits | 865,522 | 1,904 | 0.88 | % | 1,985,390 | 10,917 | 2.18 | % | |||||||||||||
Overnight fed funds purchased | — | — | — | % | 336,457 | 1,999 | 2.36 | % | |||||||||||||
FHLB advances | 94,457 | 619 | 2.61 | % | 115,707 | 713 | 2.44 | % | |||||||||||||
Subordinated debentures | 73,779 | 1,147 | 6.19 | % | 73,618 | 1,162 | 6.26 | % | |||||||||||||
Other borrowings | 25,431 | 224 | 3.50 | % | 45,302 | 420 | 3.68 | % | |||||||||||||
Total borrowings | 193,667 | 1,990 | 4.09 | % | 571,084 | 4,294 | 2.98 | % | |||||||||||||
Total interest-bearing liabilities | 1,059,189 | 3,894 | 1.46 | % | 2,556,474 | 15,211 | 2.36 | % | |||||||||||||
Noninterest-bearing deposits | 5,601,052 | — | — | % | 2,595,386 | — | — | % | |||||||||||||
Total deposits and interest-bearing liabilities | $ | 6,660,241 | $ | 3,894 | 0.23 | % | $ | 5,151,860 | $ | 15,211 | 1.17 | % | |||||||||
Other noninterest-bearing liabilities | 164,766 | 144,703 | |||||||||||||||||||
Total liabilities | 6,825,007 | 5,296,563 | |||||||||||||||||||
Shareholders' equity | 847,766 | 833,723 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 7,672,773 | $ | 6,130,286 | |||||||||||||||||
Net interest income and net interest rate spread including noninterest-bearing deposits | $ | 64,513 | 3.79 | % | $ | 65,617 | 4.98 | % | |||||||||||||
Net interest margin | 3.77 | % | 4.95 | % | |||||||||||||||||
Tax-equivalent effect | 0.02 | % | 0.05 | % | |||||||||||||||||
Net interest margin, tax-equivalent(3) | 3.79 | % | 5.00 | % |
(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 |
2019 |
2019 |
||||||||||||||
Equity to total assets | 13.91 | % | 9.45 | % | 13.78 | % | 13.54 | % | 13.65 | % | |||||||||
Book value per common share outstanding | $ | 24.66 | $ | 23.96 | $ | 23.26 | $ | 22.52 | $ | 22.32 | |||||||||
Tangible book value per common share outstanding | $ | 14.44 | $ | 13.76 | $ | 12.97 | $ | 12.84 | $ | 12.74 | |||||||||
Tangible book value per common share outstanding excluding AOCI | $ | 13.93 | $ | 13.53 | $ | 12.92 | $ | 12.74 | $ | 12.57 | |||||||||
Common shares outstanding | 34,360,890 | 34,631,160 | 34,607,962 | 37,172,081 | 37,807,064 | ||||||||||||||
Non-performing assets to total assets | 0.79 | % | 0.64 | % | 0.67 | % | 0.48 | % | 0.91 | % | |||||||||
Non-performing loans and leases to total loans and leases | 0.97 | % | 1.10 | % | 0.87 | % | 0.62 | % | 0.70 | % | |||||||||
Net interest margin | 3.77 | % | 3.28 | % | 4.78 | % | 4.94 | % | 4.95 | % | |||||||||
Net interest margin, tax-equivalent | 3.79 | % | 3.31 | % | 4.82 | % | 4.99 | % | 5.00 | % | |||||||||
Return on average assets | 0.69 | % | 0.86 | % | 3.16 | % | 1.38 | % | 1.32 | % | |||||||||
Return on average equity | 6.21 | % | 8.83 | % | 25.15 | % | 10.04 | % | 9.69 | % | |||||||||
Full-time equivalent employees | 1,015 | 999 | 992 | 1,088 | 1,186 |
Quarterly Amortization of Intangibles Expense
(Dollars in Thousands) | Actual | Anticipated | |||||||||||||||||||||||||
For the Three Months Ended | 2020 |
2020 |
2021 |
2021 |
2021 |
2021 |
2022 |
2022 |
2022 |
||||||||||||||||||
Amortization of intangibles(1) | $ | 2,283 | $ | 2,014 | $ | 2,758 | $ | 2,014 | $ | 1,762 | $ | 1,489 | $ | 2,171 | $ | 1,177 | $ | 1,092 |
(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.
Non-GAAP Reconciliation
MetaBank Period-End Tier 1 Leverage | |||
Total stockholders' equity | $ | 933,430 | |
Adjustments: | |||
LESS: |
302,396 | ||
LESS: Certain other intangible assets | 40,964 | ||
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards | 18,361 | ||
LESS: Net unrealized gains (losses) on available-for-sale securities | 17,762 | ||
LESS: Non-controlling interest | 3,603 | ||
Common Equity Tier 1 | 550,344 | ||
Tier 1 minority interest not included in common equity tier 1 capital | 1,894 | ||
Total Tier 1 Capital | $ | 552,238 | |
Total Assets (Quarter Average) | $ | 7,679,897 | |
ADD: Available for sale securities amortized cost | (22,844 | ) | |
ADD: Deferred tax | 5,724 | ||
LESS: Deductions from CET1 | 361,721 | ||
Adjusted total assets | $ | 7,301,056 | |
MetaBank Regulatory Tier 1 Leverage | 7.56 | % | |
Total Assets (Period End) | $ | 6,095,030 | |
ADD: Available for sale securities amortized cost | (23,718 | ) | |
ADD: Deferred tax | 5,956 | ||
LESS: Deductions from CET1 | 361,721 | ||
Adjusted total assets | $ | 5,715,547 | |
MetaBank Period-end Tier 1 Leverage | 9.66 | % |
About Meta Financial Group®
Investor Relations Contact: | |
Director of Investor Relations | |
605-362-2423 | |
bkelley@metabank.com | |
Media Relations: | |
mediarelations@metabank.com |