Meta Financial Group, Inc.® Reports Net Income of $4.7 million for First Quarter of Fiscal 2018
Robust Year-over-Year Revenue Growth of 42%
Announced Strategic Acquisition of
January 9, 2018, Meta announced that it entered into a definitive merger agreement with Crestmark Bancorp, Inc.(“Crestmark”), the holding company of Crestmark Bank, whereby Meta will acquire Crestmark in an all-stock transaction.
Pursuant to the terms of the merger agreement, at the effective time of the merger, Crestmark will merge with and into Meta, and
Crestmark Bankwill merge with and into MetaBank(the "Bank"). As of September 30, 2017, MetaBankhad $5.2 billionin assets and $1.3 billionin total loans and, on a pro forma consolidated basis, the combined company would have had approximately $6.4 billionin assets and $2.2 billionin loans and leases, or 34% of total assets, with lending operations throughout the U.S.
Under the terms of the merger agreement, Crestmark shareholders will receive 2.65 shares of Meta common stock for each share of Crestmark common stock. The aggregate value of the acquisition consideration, based on the closing price of Meta shares on
January 8, 2018, of $91.35, is $320.6 million. Giving effect to the transaction, existing shareholders of Meta are expected to own approximately 75%, and Crestmark shareholders are expected to own approximately 25%, of the outstanding shares of Meta.
Crestmark Bank, is a commercial lender that primarily offers asset-based loans, equipment finance leases and government guaranteed loans to small and mid-sized businesses across the U.S. Crestmark focuses on working with a broad range of industries, including manufacturing, transportation and health care. Crestmark will operate as a division of MetaBankand will continue to be headquartered in Troy, Michigan. See the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commissionon January 9, 2018, for additional information regarding the proposed transaction and the merger agreement entered into with Crestmark, as well as an investor presentation regarding the proposed transaction included as an exhibit to the Form 8-K.
January 25, 2018, Meta announced that it entered into a three-year program agreement with Liberty Lending, LLC("Liberty Lending"), whereby MetaBankwill provide personal loans to Liberty Lending customers. Under this agreement, MetaBankexpects to originate between $500 million and $1 billionin personal loans during the term of the program. This marks the entry point for Meta into a direct-to-consumer credit business, leveraging its balance sheet to generate high income on higher margin products.
- As previously disclosed, on
October 11, 2017, the Company completed the purchase of a $73.0 million, seasoned, floating rate, private student loan portfolio. All loans are indexed to one-month LIBOR. The portfolio is serviced by ReliaMax Lending Services LLCand insured by ReliaMax Surety Company. This portfolio purchase builds on the Company's existing student loan platform.
Highlights for the 2018 Fiscal First Quarter Ended December 31, 2017
- The Company recorded net income of
$4.7 million, or $0.48per diluted share, for the three months ended December 31, 2017, compared to net income of $1.2 million, or $0.14per diluted share, for the three months ended December 31, 2016, an increase of 275%. Included in the 2018 fiscal first quarter net income was an income tax expense of $3.6 millionfrom a reduction in the value of certain deferred tax assets as a result of the Tax Cuts and Jobs Act (the "Tax Act") signed into law on December 22, 2017(see non-interest expense section for further discussion). The 2018 fiscal first quarter pre-tax results included a $1.0 millionloss on sale of investments and $1.3 millionof acquisition expenses. The 2018 fiscal first quarter pre-tax results also included $1.7 millionin amortization of intangible assets and $1.3 millionin non-cash stock-related compensation associated with executive officer employment agreements (see Select Quarterly Expenses table).
- Net interest income was
$26.2 millionin the 2018 fiscal first quarter, an increase of $6.4 million, or 32%, compared to $19.8 millionin the first quarter of fiscal 2017. This increase was primarily a result of high credit quality loan growth in both the commercial insurance premium finance loan portfolio and community banking loan portfolio, as well as the purchased floating rate student loans. Also contributing to the improvement were increases in higher yielding securities balances, primarily due to highly-rated tax-exempt municipal securities at relatively high tax equivalent yields and a continuing improvement in the overall interest-earning asset mix.
- Card fee income increased
$6.8 million, or 37%, for the 2018 fiscal first quarter when compared to the same quarter in 2017. This increase was primarily due to residual fees related to a wind-down of two of our non-strategic programs. The Company expects fiscal year 2018 total card fee income to be between $95.0 million and $101.0 millionand expects total card processing expense to be between $23.0 million and $27.0 million.
- Total tax product fee income increased
$1.5 million, or 242%, from $0.6 millionfor the three months ended December 31, 2016 to $2.1 millionfor the three months ended December 31, 2017. This increase was primarily due to the volume of pre-season tax advance loans originated during the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017. All of these loans are being held during fiscal 2018, as opposed to the previous year when many of these loans were sold, which also contributed to the increase.
- The Company's 2018 fiscal first quarter average assets grew to
$4.12 billion, compared to $3.49 billionin the 2017 first quarter, an increase of 18%, primarily driven by growth in loan and securities balances.
- Total loans receivable, net of allowance for loan losses, increased
$393.2 million, or 36%, at December 31, 2017, compared to December 31, 2016. This increase was primarily related to growth in commercial real estate loans of $213.5 million, or an increase of 48%, growth in consumer loans of $101.8 million, or an increase of 59%, of which $56.7 millionwas attributable to the Company's purchased student loan portfolios and $44.0 millionwas related to refund advances, growth in commercial insurance premium finance loans of $56.2 million, or an increase of 31%, and growth in residential mortgage loans of $31.1 million, or an increase of 18%. The growth in net loans receivable from December 31, 2016 to December 31, 2017 was partially offset by an $11.6 milliondecrease, or a 12% decrease, in total agricultural loans. Excluding all purchased student loan portfolios and refund advance loans, total loans receivable, net of allowance for loan losses, at December 31, 2017 would have increased $293.1 million, or 30%, compared to the same period of the prior year. At December 31, 2017, community banking loans increased $223.3 million, or 29%, compared to December 31, 2016.
- Payments division average deposits increased
$295.2 million, or 15%, for the 2018 fiscal first quarter when compared to the same quarter of 2017.
- Non-performing assets (“NPAs”) were 0.61% of total assets at December 31, 2017, compared to 0.05% at December 31, 2016. The increase in NPAs was primarily related to a large, well-collateralized agricultural loan relationship being more than 90 days past due, which was still accruing at
December 31, 2017. On January 2, 2018, a deed in lieu of foreclosure was executed on the collateral for this relationship upon which the Company took ownership of the properties serving as collateral and transferred the loans to foreclosed real estate and repossessed assets. If the properties are sold prior to the end of the agreed-upon receivership period set forth in the settlement agreement as expected, the Company will be entitled to all principal, note interest, legal and other fees and expenses. After the receivership period ends, if the properties are not sold, the Company will be entitled to the fair value of the properties, which the Company believes to be significantly in excess of all principal, note interest, legal and other fees and expenses. At September 30, 2017, NPAs were 0.72% of total assets. The decrease in NPAs from September 30, 2017to December 31, 2017was primarily due to the payoff of a $7.0 millionnonperforming agricultural loan relationship during the first quarter of fiscal 2018.
“Fiscal 2018 is off to a fast and exciting start,” said Chairman and CEO
"We expect that this acquisition will moderate Meta's inherent earnings seasonality, which we believe shareholders will value. In addition to Crestmark’s commercial loan portfolio, we expect to launch a number of consumer lending initiatives over the coming months.
"Adding to our exciting announcement regarding our transaction with Crestmark, a new tax season is now underway and we will be able to showcase improved products, new partners, and enhanced synergies from our acquisitions of Refund Advantage, EPS, and Specialty Consumer Services over the last few years. Finally, we were able to continue to profitably grow our core businesses with earnings of over
Total revenue for the fiscal 2018 first quarter was
The Company recorded net income of
Included in 2018 fiscal first quarter net income was the aforementioned income tax expense of
Our tax business is expected to continue to generate the vast majority of its revenues in the Company's fiscal second quarter, with some additional revenues generated in the third quarter, while most expenses are expected to be spread throughout the year with some elevated expenses in the quarters ending in December and March related to the Bank's tax related business.
Net Interest Income
Net interest income for the fiscal 2018 first quarter was
Net Interest Margin
Net interest margin, tax equivalent ("NIM") increased from 2.90% in the fiscal 2017 first quarter to 3.06% in the fiscal 2018 first quarter. The reported 3.06% NIM reflects the lowered corporate prorated tax rate on the Company's tax-exempt municipal portfolio. Had corporate tax rates remained at previous rates, excluding changes resulting from the adoption of the Tax Act, the reported NIM of 3.06% would have been 3.26%. The reported NIM of 3.06% was impacted by 16 basis points due to tax service loans and wholesale deposits.
NIM continues to be supported by the growing loan portfolio, which represented 37% of earning assets as of the end of the fiscal first quarter of 2018, as compared to 30% as of the end of the fiscal first quarter of 2017. Also contributing to the increase in NIM in the fiscal first quarter of 2018 was the addition of the higher-yielding student loan portfolio purchased in
The overall reported tax equivalent yield (“TEY”) on average earning asset yields increased by 31 basis points to 3.55% when comparing the fiscal 2018 first quarter to the 2017 first quarter, which was driven primarily by the Company's improved earning asset mix, with increased exposure to its high-quality commercial insurance premium finance, student, and community banking loan portfolios. The increase in TEY continues to highlight the beneficial tailwind provided by this rotation among earning assets. The Company expects earning assets yields to continue to increase in the near term due to the aforementioned recently purchased, higher-yielding student loan portfolio being included for nearly the full fiscal first quarter of 2018. The reported 3.55% TEY on earning assets reflects the lowered corporate prorated tax rate on the Company's tax-exempt municipal portfolio. Had corporate tax rates remained at previous rates, excluding changes resulting from the adoption of the Tax Act, reported TEY on earning assets would have been 3.75%.
The fiscal 2018 first quarter TEY on the securities portfolio increased by one basis point compared to the prior year fiscal first quarter, primarily due to the continued shift in new investments being made in higher-yielding investment securities, primarily mortgage-related, tax-exempt municipal securities rather than traditional agency MBS securities. The TEY on the securities portfolio of 2.93% for the first fiscal quarter of 2018 reflects the lowered corporate prorated tax rate on the Company's tax-exempt municipal portfolio. Had corporate tax rates remained at previous rates, excluding changes resulting from the adoption of the Tax Act, reported securities portfolio yield would have been 3.25%.
The Company’s average interest-earning assets for the fiscal 2018 first quarter grew by
Overall, the Company's cost of funds for all deposits and borrowings averaged 0.51% during the fiscal 2018 first quarter, compared to 0.36% for the 2017 first quarter. This increase was primarily due to the addition of wholesale deposits, an increase in the overnight borrowing rates and higher average overall funding balances due to the Company's utilization of more of its capital during non-tax season with higher investment balances and funding, and in preparation to hold more tax loans on the balance sheet. Notwithstanding this increase, the Company believes that its growing, low-cost deposit base gives it a distinct and significant competitive advantage over most banks, and even more so if interest rates continue to rise, because the Company anticipates that its cost of deposits will likely remain relatively low, increasing less than at many other banks. The Company's overall cost of deposits was 0.24% in the fiscal first quarter of 2018, compared to 0.14% in the same quarter of 2017, which was driven primarily by its MPS-related non-interest-bearing deposits which the Company believes is a significant competitive advantage. When excluding wholesale deposits, the Company's cost of deposits for the first quarter of fiscal 2018 would have been 0.07%.
Fiscal 2018 first quarter non-interest income of
Non-interest expense increased
Income tax expense for the fiscal 2018 first quarter was
Total loans receivable, net of allowance for loan losses, increased
The Company recorded a provision for loan losses of
The Company’s allowance for loan losses was
MetaBank’s NPAs at December 31, 2017, were
Investment securities and MBS increased by
During the first quarter of fiscal 2018, the Company early adopted Accounting Standard Update ("ASU") 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." Due to the early adoption of the ASU, the Company transferred
Average TEY on the securities portfolio increased one basis point to 2.93% in the first quarter of fiscal 2018 from 2.92 in the same quarter of 2017. Overall TEY decreased by 20 basis points from 3.43 to 3.23% in the first quarter of 2018 compared to the same period of 2017 primarily due to a decrease in non-MBS investment securities due in part to the effects of the Tax Act. Average yields increased within MBS by 30 basis points to 2.21% in the first quarter of 2018 from 1.91% in the same quarter of 2017.
The TEY on the securities portfolio of 2.93% for the first fiscal quarter of 2018 reflects the lowered corporate prorated tax rate on the Company's tax-exempt municipal portfolio. Had corporate tax rates not changed due to the Tax Act, reported securities portfolio yield would have been 3.25%, and the TEY of investment securities would have been 3.69% at the previous corporate rate. The 3.23% overall TEY of investment securities reflects the lowered corporate prorated tax rate.
Average TEY on the securities portfolio decreased by 26 basis points to 2.93% from 3.19% when comparing the 2018 fiscal first quarter to the 2017 fiscal fourth quarter. Investment securities TEY decreased 42 basis points to 3.23% in the first quarter of fiscal 2018 from 3.65% in the fourth quarter of fiscal 2017, and MBS decreased two basis points to 2.21% from 2.23% when comparing the 2018 fiscal first quarter to the 2017 fiscal fourth quarter. These decreases quarter over quarter in the overall securities portfolio TEY and investment securities TEY were due to the lowered corporate tax rates.
During the 2018 fiscal first quarter, the Company continued to purchase high-quality investments within certain sectors of the municipal market, at what it believes to be attractive yields. Many of these new purchases are tax-exempt and also backed, or collateralized, by
The Company continues to execute its investment strategy of primarily purchasing
Deposits, Other Borrowings and Other Liabilities
Total end-of-period deposits decreased
Similar to fiscal 2017, the Company utilizes wholesale deposits to target strategic maturities related to our seasonal tax advance lending. The tax advance lending season typically lasts six weeks or less and the Company believes it is generally more efficient to fund these short-term loans by using brokered deposits, or other wholesale funding, rather than by selling investment securities. The decrease in wholesale deposits at
Total average deposits for the fiscal 2018 first quarter increased by
The average balance of total deposits and interest-bearing liabilities was
The Company and the Bank remain above the federal regulatory minimum capital requirements to remain classified as well-capitalized institutions. Regulatory capital ratios at December 31, 2017, are stated in the table below.
The tables below also include certain non-GAAP financial measures that are used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews these measures along with other measures of capital as part of its financial analysis.
Regulatory Capital Data (1)
|Requirement to Be|
|Requirement For||Under Prompt|
|Capital Adequacy||Corrective Action|
|At December 31, 2017||Company||Bank||Purposes||Provisions|
|Tier 1 leverage ratio||7.68||%||9.61||%||4.00||%||5.00||%|
|Common equity Tier 1 capital ratio||12.93||16.71||4.50||6.50|
|Tier 1 capital ratio||13.38||16.71||6.00||8.00|
|Total qualifying capital ratio||16.99||17.11||8.00||10.00|
(1) Regulatory ratios are estimated.
The following table provides certain 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)|
|December 31, 2017|
|(Dollars in Thousands)|
|LESS: Goodwill, net of associated deferred tax liabilities||95,705|
|LESS: Certain other intangible assets||40,417|
|LESS: Net deferred tax assets from operating loss and tax credit carry-forwards||—|
|LESS: Net unrealized gains (losses) on available-for-sale securities||5,782|
|Common Equity Tier 1 (1)||295,801|
|Long-term debt and other instruments qualifying as Tier 1||10,310|
|LESS: Additional Tier 1 capital deductions||—|
|Total Tier 1 capital||306,111|
|Allowance for loan losses||9,058|
|Subordinated debentures (net of issuance costs)||73,382|
|Total qualifying capital||388,551|
(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 used in calculating tangible book value data.
|December 31, 2017|
|(Dollars in Thousands)|
|Total Stockholders' Equity||$||437,705|
|Less: Intangible assets||50,521|
|Tangible common equity||288,461|
|Tangible common equity excluding AOCI||282,679|
Due to the predictable, quarterly cyclicality of MPS deposits in connection with tax season business activity, management believes that a six-month capital calculation is a useful metric to monitor the Company’s overall capital management process. As such, the Bank’s six-month average Tier 1 leverage ratio, Common equity Tier 1 capital ratio, Tier 1 capital ratio, and Total qualifying capital ratio as of December 31, 2017, were 9.75%, 18.17%, 18.17%, and 18.60%, respectively.
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: statements regarding the potential benefits of, and other expectations for the combined company giving effect to, the proposed merger transaction with Crestmark, including, but not limited to, anticipated synergies of the combined businesses, the possibility that the transaction will facilitate Meta’s growth through complementary product and service offerings; 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, such as those offered by the Bank or MPS, a division of the Bank; 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: the risk that the transaction with Crestmark may not occur on a timely basis or at all; the parties’ ability to obtain regulatory approvals and approval of their respective shareholders, and otherwise satisfy the other conditions to closing, on a timely basis or at all; the risk that the businesses of Meta and
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||December 31, 2017||September 30, 2017||June 30, 2017||March 31, 2017||December 31, 2016|
|Cash and cash equivalents||$||1,300,409||$||1,267,586||$||65,630||$||67,293||$||695,731|
|Investment securities available for sale||1,392,240||1,106,977||1,141,684||1,184,440||936,832|
|Mortgage-backed securities available for sale||600,112||586,454||666,424||642,833||534,939|
|Investment securities held to maturity||235,024||449,840||464,729||474,306||478,611|
|Mortgage-backed securities held to maturity||8,468||113,689||117,399||122,497||126,365|
|Loans held for sale||—||—||—||—||1,223|
|Allowance for loan loss||(8,862||)||(7,534||)||(14,968||)||(14,602||)||(6,415||)|
|Federal Home Loan Bank Stock, at cost||57,443||61,123||16,323||25,043||3,832|
|Accrued interest receivable||21,089||19,380||21,831||20,902||21,375|
|Premises, furniture, and equipment, net||20,571||19,320||20,107||20,019||20,093|
|Bank-owned life insurance||85,371||84,702||84,035||58,378||57,934|
|Foreclosed real estate and repossessed assets||128||292||364||—||76|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Money market deposits||47,451||48,758||46,709||42,340||46,856|
|Time certificates of deposit||128,220||123,637||83,760||61,170||122,334|
|Accrued interest payable||4,065||2,280||2,463||722||2,255|
|Accrued expenses and other liabilities||63,595||78,065||64,118||113,479||79,815|
|Preferred stock, 3,000,000 shares authorized, no shares issued or outstanding at December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017, and December 31, 2016.||—||—||—||—||—|
|Common stock, $.01 par value; 15,000,000 shares authorized, 9,664,846 and 9,622,595 shares outstanding and 9,685,398 and 9,626,431 shares issued at December 31, 2017 and September 30, 2017. 9,349,989, 9,349,989, and 9,305,079 shares issued and outstanding at June 30, 2017, March 31, 2017, and December 31, 2016, respectively.||96||96||94||94||93|
|Common stock, Nonvoting, $.01 par value; 3,000,000 shares authorized, no shares issued or outstanding at December 31, 2017, September 30, 2016, June 30, 2017, March 31, 2017, and December 31, 2016.||—||—||—||—||—|
|Additional paid-in capital||262,872||258,336||256,088||253,473||249,476|
|Accumulated other comprehensive income (loss)||5,782||9,166||7,397||14||(5,022||)|
|Treasury stock, at cost, 20,552 and 3,836 common shares at December 31, 2017 and September 30, 2017, none at June 30, 2017, March 31, 2017, and December 31, 2016.||(1,623||)||(266||)||—||—||—|
|Total stockholders’ equity||437,705||434,496||430,213||411,748||371,786|
|Total liabilities and stockholders’ equity||$||5,417,963||$||5,228,332||$||4,019,693||$||3,985,596||$||4,213,329|
|Condensed Consolidated Statements of Operations (Unaudited)|
|(Dollars in Thousands, Except Share and Per Share Data)|
|Three Months Ended|
|Interest and dividend income:|
|Loans receivable, including fees||$||16,443||$||14,577||$||10,678|
|FHLB advances and other borrowings||2,776||2,571||1,804|
|Net interest income||26,196||24,488||19,833|
|Provision (recovery) for loan losses||1,068||(144||)||843|
|Net interest income after provision for loan losses||25,128||24,632||18,990|
|Refund transfer product fees||192||508||176|
|Tax advance product fees||1,947||453||449|
|Bank-owned life insurance||669||668||448|
|Gain (loss) on sale of securities||(1,010||)||838||(1,234||)|
|(Loss) on foreclosed real estate||(19||)||(13||)||—|
|Other income (loss)||102||(391||)||76|
|Total non-interest income||29,268||29,833||19,349|
|Compensation and benefits||22,340||21,919||17,850|
|Refund transfer product expense||101||292||51|
|Tax advance product expense||280||(257||)||27|
|Occupancy and equipment||4,890||4,263||3,977|
|Legal and consulting||2,416||2,781||2,723|
|Intangible impairment expense||—||10,248||—|
|Total non-interest expense||44,042||53,746||36,753|
|Income before income tax expense||10,354||719||1,586|
|Income tax expense (benefit)||5,684||(1,025||)||342|
|Earnings per common share|
|Shares used in computing earnings per share|
Average Balances, Interest Rates and Yields
The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. Only the yield/rate has tax-equivalent adjustments. Non-accruing loans have been included in the table as loans carrying a zero yield.
|Three Months Ended December 31,||2017||2016|
|(Dollars in Thousands)
|Cash & fed funds sold||$||100,321||$||607||2.40||%||$||186,565||$||391||0.83||%|
|Tax exempt investment securities||1,408,552||8,698||3.25||%||1,172,252||6,902||3.59||%|
|Other investment securities||80,035||586||2.91||%||87,029||589||2.69||%|
|Community banking loans(1)||958,222||10,466||4.33||%||762,559||8,169||4.25||%|
|Tax services loans||12,378||—||—||%||5,573||—||—||%|
|Commercial insurance premium finance loans||244,380||2,799||4.54||%||181,422||2,078||4.54||%|
|Student loans and other||191,510||3,178||6.58||%||20,129||431||8.50||%|
|National lending loans(2)||435,891||5,977||5.44||%||201,551||2,509||4.94||%|
|Total interest-earning assets||$||3,762,441||$||30,857||3.55||%||$||3,223,075||$||22,575||3.24||%|
|Total interest-bearing deposits||784,805||1,885||0.95||%||624,755||938||0.60||%|
|Overnight fed funds purchased||139,152||525||1.50||%||271,272||392||0.57||%|
|Total interest-bearing liabilities||1,289,211||4,661||1.43||%||1,004,873||2,742||1.08||%|
|Non-interest bearing deposits||2,328,159||—||—||%||2,055,842||—||—||%|
|Total deposits and interest-bearing liabilities||$||3,617,370||$||4,661||0.51||%||$||3,060,715||$||2,742||0.36||%|
|Other non-interest-bearing liabilities||71,398||78,219|
|Total liabilities and shareholders' equity||$||4,122,949||$||3,491,022|
|Net interest income and net interest rate spread including non-interest-bearing deposits||$||26,196||3.04||%||$||19,833||2.88||%|
|Net interest margin||2.76||%||2.44||%|
|Net interest margin, tax equivalent(3)||3.06||%||2.90||%|
(1) Previously stated
(2) Previously stated Specialty Finance Loans have been renamed as National Lending Loans
(3) Net interest margin expressed on a fully taxable equivalent basis ("Net interest margin, tax equivalent") is a non-GAAP financial measure. The tax-equivalent adjustment to net interest income recognizes the estimated income tax savings when comparing taxable and tax-exempt assets and adjusting for federal and state exemption of interest income. We believe that it is a standard practice in the banking industry to present net interest margin expressed on a fully taxable equivalent basis, and accordingly believe the presentation of this non-GAAP financial measure may be useful for peer comparison purposes.
|Selected Financial Information|
|At Period Ended:||December 31,
|Equity to total assets||8.08||%||8.31||%||10.70||%||10.33||%||8.82||%|
|Book value per common share outstanding||$||45.29||$||45.15||$||46.01||$||44.04||$||39.96|
|Tangible book value per common share outstanding||$||29.85||$||29.47||$||28.52||$||26.35||$||21.43|
|Tangible book value per common share outstanding excluding AOCI||$||29.25||$||28.52||$||27.73||$||26.35||$||21.97|
|Common shares outstanding||9,664,846||9,622,595||9,349,989||9,349,989||9,305,079|
|Non-performing assets to total assets||0.61||%||0.72||%||1.17||%||0.12||%||0.05||%|
|For the Three Months Ended:||December 31,
|Net interest margin, tax equivalent||3.06||%||2.90||%|
|Return on average assets||0.45||%||0.14||%|
|Return on average equity||4.30||%||1.41||%|
|Select Quarterly Expenses|
|(Dollars in Thousands)||Actual||Anticipated|
|For the Three Months Ended||Dec 31,
|Amortization of Intangibles (1)||$||1,681||$||2,733||$||1,664||$||1,633||$||1,489||$||2,707||$||1,489||$||1,469||$||1,283|
|Executive Officer Stock Compensation (2)||$||1,268||$||1,268||$||1,268||$||1,268||$||899||$||899||$||899||$||899||$||653|
(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.
(2) These amounts are based upon the long-term employment agreements signed in the first and second quarters of fiscal 2017 by the Company’s three highest paid executives. This table makes no assumption for expenses related to any additional future agreements.
The Company will host a conference call and earnings webcast at
Additional Information About the Proposed Crestmark Transaction
In connection with the proposed merger transaction, Meta intends to file a registration statement on Form S-4 with the
This communication and the information contained herein does not and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities in connection with the proposed merger shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Participants in the Transaction
Meta, Crestmark and certain of their respective directors and executive officers may be deemed under the rules of the
|Media Contact:||Investor Relations Contact:|
|Katie LeBrun||Brittany Kelley Elsasser|
|Corporate Communications Director||Director of Investor Relations|