Meta Financial Group, Inc.® Announces Results for 2019 Fiscal First Quarter
- Revenue Rises 77% -
- Produces Net Income of
“Due in large part to the success of our recent expansion in our national commercial finance portfolio, we drove a sizable increase in net interest income helping us deliver strong growth in earnings for the first quarter of fiscal 2019," said President and CEO
Highlights for the 2019 Fiscal First Quarter Ended December 31, 2018
- Total gross loans and leases grew over 100% to
$3.33 billion , compared to the same period in fiscal 2018 and increased$383.3 million , or 13%, when compared toSeptember 30, 2018 .
- Average non-interest-bearing deposits of
$2.49 billion increased by$161.0 million , or 7%, when compared to the same period in fiscal 2018.
- Net interest income grew over 100%, or
$34.1 million , to$60.3 million , compared to$26.2 million in the comparable quarter in fiscal 2018.
- Net interest margin ("NIM") increased to 4.60% from 2.76% over the same period of the prior fiscal year, while the tax-equivalent net interest margin ("NIM, TE") increased to 4.76% from 3.06% over that same period.
Net Interest Income
Net interest income for the fiscal 2019 first quarter was
During the first quarter of fiscal year 2019, loan and lease interest income grew
NIM, TE was 4.76% for the fiscal 2019 first quarter, with the net effect of purchase accounting accretion contributing 18 basis points.
The overall reported tax-equivalent yield (“TEY”) on average earning asset yields increased by 234 basis points to 5.89% for the fiscal 2019 first quarter compared to the 2018 first fiscal quarter. The improvement was driven primarily by the Company's improved earning asset mix, which reflects increased balances in the national lending portfolio. The fiscal 2019 first quarter TEY on the securities portfolio increased by 20 basis points to 3.13% compared to TEY for the same period of the prior year of 2.93%.
Overall, the Company's cost of funds for all deposits and borrowings averaged 1.14% during the fiscal 2019 first quarter, compared to 0.51% for the 2018 first fiscal quarter. This increase was primarily due to a rise in short-term interest rates affecting overnight borrowing rates, other wholesale funding, and the interest-bearing time deposits acquired by the Company in connection with the Company's acquisition of Crestmark in the fourth quarter of fiscal 2018. The Company's overall cost of deposits was 0.91% in the fiscal first quarter of 2019, compared to 0.24% in the same quarter of fiscal 2018. Excluding wholesale deposits, the Company's cost of deposits for the first quarter of fiscal 2019 would have been 0.14%.
Non-Interest Income
Fiscal 2019 first quarter non-interest income was
Together, card and deposit fee income totaled
Non-Interest Expense
Non-interest expense increased to
Income Tax Expense
The Company recorded an income tax benefit of
The Company originated
Investments, Loans and Leases
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
|||||||||||||||
Total investments | $ | 1,855,792 | $ | 2,019,968 | $ | 2,149,709 | $ | 2,306,603 | $ | 2,233,705 | |||||||||
Loans held for sale | |||||||||||||||||||
Consumer credit products | 24,233 | — | — | — | — | ||||||||||||||
SBA/USDA(1) | 9,327 | 15,606 | — | — | — | ||||||||||||||
Total loans held for sale | 33,560 | 15,606 | — | — | — | ||||||||||||||
National Lending loans and leases | |||||||||||||||||||
Asset based lending | 554,072 | 477,917 | — | — | — | ||||||||||||||
Factoring | 284,912 | 284,221 | — | — | — | ||||||||||||||
Lease financing | 290,889 | 265,315 | — | — | — | ||||||||||||||
Insurance premium finance | 330,712 | 337,877 | 303,603 | 240,640 | 235,671 | ||||||||||||||
SBA/USDA | 67,893 | 59,374 | — | — | — | ||||||||||||||
Other commercial finance | 89,402 | 85,145 | 11,418 | 8,041 | 6,306 | ||||||||||||||
Commercial finance(2) | 1,617,880 | 1,509,849 | 315,021 | 248,681 | 241,977 | ||||||||||||||
Consumer credit products | 96,144 | 80,605 | 26,583 | — | — | ||||||||||||||
Other consumer finance | 182,510 | 189,756 | 194,344 | 201,942 | 209,137 | ||||||||||||||
Consumer finance | 278,654 | 270,361 | 220,927 | 201,942 | 209,137 | ||||||||||||||
Tax services | 76,575 | 1,073 | 14,281 | 58,794 | 67,424 | ||||||||||||||
Warehouse finance | 176,134 | 65,000 | — | — | — | ||||||||||||||
Total National Lending loans and leases | 2,149,243 | 1,846,283 | 550,229 | 509,417 | 518,538 | ||||||||||||||
Community Banking loans | |||||||||||||||||||
Commercial real estate and operating | 863,753 | 790,890 | 751,146 | 723,091 | 680,785 | ||||||||||||||
Consumer one-to-four family real estate and other | 256,341 | 247,318 | 237,704 | 228,415 | 225,841 | ||||||||||||||
Agricultural real estate and operating | 58,971 | 60,498 | 60,096 | 58,773 | 85,999 | ||||||||||||||
Total Community Banking loans | 1,179,065 | 1,098,706 | 1,048,946 | 1,010,279 | 992,625 | ||||||||||||||
Total gross loans and leases | 3,328,308 | 2,944,989 | 1,599,175 | 1,519,696 | 1,511,163 | ||||||||||||||
Allowance for loan and lease losses | (21,290 | ) | (13,040 | ) | (21,950 | ) | (27,078 | ) | (8,862 | ) | |||||||||
Net deferred loan origination fees | 1,190 | (250 | ) | (1,881 | ) | (2,080 | ) | (2,023 | ) | ||||||||||
Total loans and leases, net of allowance | $ | 3,308,208 | $ | 2,931,699 | $ | 1,575,344 | $ | 1,490,538 | $ | 1,500,278 | |||||||||
(1) The December 31, 2018 balance included $0.8 million of an interest rate mark premium related to the acquired loans and leases from the Crestmark acquisition. | |||||||||||||||||||
(2) The December 31, 2018 balance included $10.1 million and $5.6 million of credit and interest rate mark discounts, respectively, related to the acquired loans and leases from the Crestmark acquisition. | |||||||||||||||||||
The Company continued to utilize sales of securities and cash flow from its amortizing securities portfolio to fund loan growth, which contributed to a 17% decrease in investment securities at December 31, 2018, from
Total gross loans and leases increased
At
Asset Quality
The Company’s allowance for loan and lease losses was
(Unaudited) | Three Months Ended | ||||||||||
Allowance for loan and lease loss activity | December 31, 2018 | September 30, 2018 | December 31, 2017 | ||||||||
(Dollars in thousands) | |||||||||||
Beginning balance | $ | 13,040 | $ | 21,950 | $ | 7,534 | |||||
Provision - tax services loans | 1,496 | 1,009 | 1,017 | ||||||||
Provision - all other loans and leases | 7,603 | 3,697 | 51 | ||||||||
Charge-offs - tax services loans | (42 | ) | (11,295 | ) | — | ||||||
Charge-offs - all other loans and leases | (2,762 | ) | (3,420 | ) | (160 | ) | |||||
Recoveries - tax services loans | 92 | 31 | 413 | ||||||||
Recoveries - all other loans and leases | 1,863 | 1,068 | 7 | ||||||||
Ending balance | $ | 21,290 | $ | 13,040 | $ | 8,862 | |||||
Provision for loan and lease losses was
The Company's non-performing assets at December 31, 2018, were
Deposits, Borrowings and Other Liabilities
Total average deposits for the fiscal 2019 first quarter increased by
The average balance of total deposits and interest-bearing liabilities was
Total end-of-period deposits increased 40%, to
Regulatory Capital
The Company and
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 periods indicated | December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
|||||||||
Company | ||||||||||||||
Tier 1 leverage ratio | 7.90 | % | 8.50 | % | 8.29 | % | 7.26 | % | 7.68 | % | ||||
Common equity Tier 1 capital ratio | 10.11 | % | 10.56 | % | 13.92 | % | 13.74 | % | 12.88 | % | ||||
Tier 1 capital ratio | 10.47 | % | 10.97 | % | 14.35 | % | 14.18 | % | 13.32 | % | ||||
Total qualifying capital ratio | 12.69 | % | 13.18 | % | 18.37 | % | 18.48 | % | 16.91 | % | ||||
MetaBank | ||||||||||||||
Tier 1 leverage ratio | 9.01 | % | 9.75 | % | 10.16 | % | 8.93 | % | 9.61 | % | ||||
Common equity Tier 1 capital ratio | 11.87 | % | 12.50 | % | 17.57 | % | 17.43 | % | 16.64 | % | ||||
Tier 1 capital ratio | 11.91 | % | 12.56 | % | 17.57 | % | 17.43 | % | 16.64 | % | ||||
Total qualifying capital ratio | 12.41 | % | 12.89 | % | 18.50 | % | 18.59 | % | 17.03 | % |
Due to the predictable, quarterly cyclicality of non-interest bearing 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, MetaBank’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, 2018, were 9.46%, 13.42%, 13.47%, and 14.03%, respectively.
The following table provides certain non-GAAP financial measures used to compute certain of the ratios included in the table above for the periods presented, 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, 2018 |
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
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(Dollars in Thousands) | |||||||||||||||||||
Total stockholders' equity | $ | 770,728 | $ | 747,726 | $ | 443,913 | $ | 443,703 | $ | 437,705 | |||||||||
Adjustments: | |||||||||||||||||||
LESS: Goodwill, net of associated deferred tax liabilities | 299,037 | 299,456 | 94,781 | 95,262 | 95,705 | ||||||||||||||
LESS: Certain other intangible assets | 61,317 | 64,716 | 46,098 | 47,724 | 40,417 | ||||||||||||||
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards | 4,720 | — | — | — | — | ||||||||||||||
LESS: Net unrealized gains (losses) on available-for-sale securities | (28,829 | ) | (33,114 | ) | (28,601 | ) | (21,166 | ) | 5,782 | ||||||||||
LESS: Non-controlling interest | 3,267 | 3,574 | — | — | — | ||||||||||||||
LESS: Unrealized currency gains (losses) | (357 | ) | 3 | — | — | — | |||||||||||||
Common Equity Tier 1 (1) | 431,573 | 413,091 | 331,635 | 321,882 | 295,801 | ||||||||||||||
Long-term debt and other instruments qualifying as Tier 1 | 13,661 | 13,661 | 10,310 | 10,310 | 10,310 | ||||||||||||||
Tier 1 minority interest not included in common equity tier 1 capital | 1,796 | 2,118 | — | — | — | ||||||||||||||
Total Tier 1 capital | 447,030 | 428,870 | 341,945 | 332,192 | 306,111 | ||||||||||||||
Allowance for loan and lease losses | 21,422 | 13,185 | 22,151 | 27,285 | 9,058 | ||||||||||||||
Subordinated debentures (net of issuance costs) | 73,528 | 73,491 | 73,442 | 73,418 | 73,382 | ||||||||||||||
Total qualifying capital | $ | 541,980 | $ | 515,546 | $ | 437,538 | $ | 432,896 | $ | 388,551 | |||||||||
(1) Capital ratios were determined using the Basel III capital rules that became effective on January 1, 2015. Basel III revised the definition of capital, increased minimum capital ratios, and introduced a minimum CET1 ratio; those changes are being fully phased in through the end of 2021. | |||||||||||||||||||
The following table provides a reconciliation of tangible common equity used in calculating tangible book value data.
December 31, 2018 | |||
(Dollars in Thousands) | |||
Total Stockholders' Equity | $ | 770,728 | |
Less: Goodwill | 303,270 | ||
Less: Intangible assets | 66,366 | ||
Tangible common equity | 401,092 | ||
Less: Accumulated Other Comprehensive Income (Loss) ("AOCI") | (29,186 | ) | |
Tangible common equity excluding AOCI (Loss) | 430,278 | ||
Future Outlook
The Company continues to expect fiscal 2019 earnings per common share to be in the range of
Conference Call
The Company will host a conference call and earnings webcast at
Forward-Looking Statements
The Company and
You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “could,” “future,” or the negative of those terms, or other words of similar meaning or similar expressions. You should carefully read statements that contain these words because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements are based on information currently available to us and assumptions about future events, and include statements with respect to the Company’s beliefs, expectations, estimates, and intentions, which are subject to significant risks and uncertainties, and are subject to change based on various factors, some of which are beyond the Company’s control. Such risks, uncertainties and other factors may cause our actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Such statements address, among others, the following subjects: future operating results; customer retention; loan and other product demand; important components of the Company's statements of financial condition and operations; growth and expansion; new products and services, such as those offered by
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, 2018 |
September 30, 2018 | June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
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Cash and cash equivalents | $ | 164,169 | $ | 99,977 | $ | 71,276 | $ | 107,563 | $ | 1,300,409 | |||||||||||||||||||
Investment securities available for sale, at fair value | 1,340,870 | 1,484,160 | 1,349,642 | 1,417,012 | 1,390,411 | ||||||||||||||||||||||||
Mortgage-backed securities available for sale, at fair value | 354,186 | 364,065 | 575,999 | 654,890 | 600,112 | ||||||||||||||||||||||||
Investment securities held to maturity, at cost | 153,075 | 163,893 | 215,850 | 226,308 | 234,714 | ||||||||||||||||||||||||
Mortgage-backed securities held to maturity, at cost | 7,661 | 7,850 | 8,218 | 8,393 | 8,468 | ||||||||||||||||||||||||
Loans held for sale | 33,560 | 15,606 | — | — | — | ||||||||||||||||||||||||
Loans and leases | 3,329,498 | 2,944,739 | 1,597,294 | 1,517,616 | 1,509,140 | ||||||||||||||||||||||||
Allowance for loan and lease loss | (21,290 | ) | (13,040 | ) | (21,950 | ) | (27,078 | ) | (8,862 | ) | |||||||||||||||||||
Federal Home Loan Bank Stock, at cost | 15,600 | 23,400 | 7,446 | 17,846 | 57,443 | ||||||||||||||||||||||||
Accrued interest receivable | 22,076 | 22,016 | 17,825 | 17,604 | 21,089 | ||||||||||||||||||||||||
Premises, furniture, and equipment, net | 44,299 | 40,458 | 20,374 | 20,278 | 20,571 | ||||||||||||||||||||||||
Rental equipment, net | 146,815 | 107,290 | — | — | — | ||||||||||||||||||||||||
Bank-owned life insurance | 87,934 | 87,293 | 86,655 | 86,021 | 85,371 | ||||||||||||||||||||||||
Foreclosed real estate and repossessed assets | 31,548 | 31,638 | 29,922 | 30,050 | 128 | ||||||||||||||||||||||||
Goodwill | 303,270 | 303,270 | 98,723 | 98,723 | 98,723 | ||||||||||||||||||||||||
Intangible assets | 66,366 | 70,719 | 46,098 | 47,724 | 50,521 | ||||||||||||||||||||||||
Prepaid assets | 31,483 | 27,906 | 23,211 | 26,342 | 29,758 | ||||||||||||||||||||||||
Deferred taxes | 23,607 | 18,737 | 23,025 | 20,939 | 5,379 | ||||||||||||||||||||||||
Other assets | 48,038 | 35,090 | 19,551 | 31,462 | 14,588 | ||||||||||||||||||||||||
Total assets | $ | 6,182,765 | $ | 5,835,067 | $ | 4,169,159 | $ | 4,301,693 | $ | 5,417,963 | |||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||||||||||
Non-interest-bearing checking | $ | 2,739,757 | $ | 2,405,274 | $ | 2,637,987 | $ | 2,850,886 | $ | 2,779,645 | |||||||||||||||||||
Interest-bearing checking | 128,662 | 111,578 | 103,065 | 123,398 | 84,390 | ||||||||||||||||||||||||
Savings deposits | 52,229 | 54,765 | 57,356 | 65,345 | 53,535 | ||||||||||||||||||||||||
Money market deposits | 54,559 | 51,995 | 45,115 | 48,070 | 47,451 | ||||||||||||||||||||||||
Time certificates of deposit | 170,629 | 276,180 | 57,151 | 71,712 | 128,220 | ||||||||||||||||||||||||
Wholesale deposits | 1,790,611 | 1,531,186 | 620,959 | 181,087 | 420,404 | ||||||||||||||||||||||||
Total deposits | 4,936,447 | 4,430,987 | 3,521,633 | 3,340,497 | 3,513,645 | ||||||||||||||||||||||||
Short-term debt | 231,293 | 425,759 | 27,290 | 315,777 | 1,313,401 | ||||||||||||||||||||||||
Long-term debt | 88,983 | 88,963 | 85,580 | 85,572 | 85,552 | ||||||||||||||||||||||||
Accrued interest payable | 11,280 | 7,794 | 3,705 | 1,315 | 4,065 | ||||||||||||||||||||||||
Accrued expenses and other liabilities | 144,034 | 133,838 | 87,038 | 114,829 | 63,595 | ||||||||||||||||||||||||
Total liabilities | 5,412,037 | 5,087,341 | 3,725,246 | 3,857,990 | 4,980,258 | ||||||||||||||||||||||||
STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||||||||
Preferred stock, 3,000,000 shares authorized, no shares issued or outstanding at December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017 | — | — | — | — | — | ||||||||||||||||||||||||
Common stock, $.01 par value; 90,000,000, 90,000,000, 90,000,000, 90,000,000, and 45,000,000 shares authorized, 39,494,919, 39,192,063, 29,122,596, 29,119,718, and 29,015,090 shares issued and 39,405,508, 39,167,280, 29,101,605, 29,098,773, and 28,994,538 shares outstanding at December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017. | 394 | 393 | 291 | 291 | 290 | ||||||||||||||||||||||||
Common stock, Nonvoting, $.01 par value; 3,000,000 shares authorized, no shares issued or outstanding at December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017. | — | — | — | — | — | ||||||||||||||||||||||||
Additional paid-in capital | 572,156 | 565,811 | 267,610 | 265,491 | 262,678 | ||||||||||||||||||||||||
Retained earnings | 228,453 | 213,048 | 206,284 | 200,753 | 170,578 | ||||||||||||||||||||||||
Accumulated other comprehensive (loss) income | (29,186 | ) | (33,111 | ) | (28,601 | ) | (21,166 | ) | 5,782 | ||||||||||||||||||||
Treasury stock, at cost, 89,411, 24,783, 20,991, 20,945, and 20,552 common shares at December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017. | (4,356 | ) | (1,989 | ) | (1,671 | ) | (1,666 | ) | (1,623 | ) | |||||||||||||||||||
Total equity attributable to parent | 767,461 | 744,152 | 443,913 | 443,703 | 437,705 | ||||||||||||||||||||||||
Non-controlling interest | 3,267 | 3,574 | — | — | — | ||||||||||||||||||||||||
Total stockholders’ equity | 770,728 | 747,726 | 443,913 | 443,703 | 437,705 | ||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 6,182,765 | $ | 5,835,067 | $ | 4,169,159 | $ | 4,301,693 | $ | 5,417,963 | |||||||||||||||||||
All share and per share data reported in this release for all periods presented has been adjusted to reflect the 3-for-1 forward stock split effected by the Company on October 4, 2018. | |||||||||||||||||||||||||||||
Consolidated Statements of Operations (Unaudited)
(Dollars in Thousands, Except Share and Per Share Data)
Three Months Ended | |||||||||||||||||||||||||||
December 31, 2018 | September 30, 2018 | December 31, 2017 | |||||||||||||||||||||||||
Interest and dividend income: | |||||||||||||||||||||||||||
Loans and leases, including fees | $ | 60,498 | $ | 45,131 | $ | 16,443 | |||||||||||||||||||||
Mortgage-backed securities | 2,698 | 3,724 | 3,758 | ||||||||||||||||||||||||
Other investments | 11,780 | 11,346 | 10,656 | ||||||||||||||||||||||||
74,976 | 60,201 | 30,857 | |||||||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||||||
Deposits | 10,596 | 8,057 | 1,885 | ||||||||||||||||||||||||
FHLB advances and other borrowings | 4,108 | 3,607 | 2,776 | ||||||||||||||||||||||||
14,704 | 11,664 | 4,661 | |||||||||||||||||||||||||
Net interest income | 60,272 | 48,537 | 26,196 | ||||||||||||||||||||||||
Provision for loan for lease losses | 9,099 | 4,706 | 1,068 | ||||||||||||||||||||||||
Net interest income after provision for loan and lease losses | 51,173 | 43,831 | 25,128 | ||||||||||||||||||||||||
Non-interest income: | |||||||||||||||||||||||||||
Refund transfer product fees | 261 | 526 | 192 | ||||||||||||||||||||||||
Tax advance product fees | 1,685 | (36 | ) | 1,947 | |||||||||||||||||||||||
Card fees | 19,351 | 19,536 | 25,247 | ||||||||||||||||||||||||
Rental income | 10,890 | 7,333 | — | ||||||||||||||||||||||||
Loan and lease fees | 1,247 | 1,025 | 1,292 | ||||||||||||||||||||||||
Bank-owned life insurance | 642 | 638 | 669 | ||||||||||||||||||||||||
Deposit fees | 1,938 | 1,487 | 848 | ||||||||||||||||||||||||
Loss on sale of securities | (22 | ) | (6,979 | ) | (1,010 | ) | |||||||||||||||||||||
Gain on sale of loans and leases | 867 | 355 | — | ||||||||||||||||||||||||
Gain (loss) on foreclosed real estate | 15 | — | (19 | ) | |||||||||||||||||||||||
Other income | 877 | 728 | 102 | ||||||||||||||||||||||||
Total non-interest income | 37,751 | 24,613 | 29,268 | ||||||||||||||||||||||||
Non-interest expense: | |||||||||||||||||||||||||||
Compensation and benefits | 33,010 | 30,093 | 22,340 | ||||||||||||||||||||||||
Refund transfer product expense | 10 | 85 | 101 | ||||||||||||||||||||||||
Tax advance product expense | 452 | 81 | 280 | ||||||||||||||||||||||||
Card processing | 7,085 | 5,485 | 6,540 | ||||||||||||||||||||||||
Occupancy and equipment | 6,458 | 5,653 | 4,890 | ||||||||||||||||||||||||
Operating lease equipment depreciation expense | 7,765 | 5,386 | — | ||||||||||||||||||||||||
Legal and consulting | 3,969 | 6,628 | 2,416 | ||||||||||||||||||||||||
Marketing | 539 | 1,037 | 553 | ||||||||||||||||||||||||
Data processing | 437 | 268 | 414 | ||||||||||||||||||||||||
Intangible amortization expense | 4,383 | 3,564 | 1,681 | ||||||||||||||||||||||||
Intangible impairment expense | — | 18 | — | ||||||||||||||||||||||||
Other expense | 10,187 | 8,342 | 4,827 | ||||||||||||||||||||||||
Total non-interest expense | 74,295 | 66,640 | 44,042 | ||||||||||||||||||||||||
Income before income tax expense | 14,629 | 1,804 | 10,354 | ||||||||||||||||||||||||
Income tax expense (benefit) | (1,691 | ) | (7,591 | ) | 5,684 | ||||||||||||||||||||||
Net income before non-controlling interest | 16,320 | 9,395 | 4,670 | ||||||||||||||||||||||||
Net income attributable to non-controlling interest | 922 | 673 | — | ||||||||||||||||||||||||
Net income attributable to parent | $ | 15,398 | $ | 8,722 | $ | 4,670 | |||||||||||||||||||||
Earnings per common share | |||||||||||||||||||||||||||
Basic | $ | 0.39 | $ | 0.24 | $ | 0.16 | |||||||||||||||||||||
Diluted | $ | 0.39 | $ | 0.24 | $ | 0.16 | |||||||||||||||||||||
Shares used in computing earnings per share | |||||||||||||||||||||||||||
Basic | 39,335,054 | 35,711,400 | 28,970,334 | ||||||||||||||||||||||||
Diluted | 39,406,507 | 35,823,162 | 29,138,523 | ||||||||||||||||||||||||
All share and per share data reported in this release for all periods presented has been adjusted to reflect the 3-for-1 forward stock split effected by the Company on October 4, 2018. | |||||||||||||||||||||||||||
Average Balances, Interest Rates and Yields
The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. Only the yield/rate reflects tax-equivalent adjustments. Non-accruing loans and leases have been included in the table as loans carrying a zero yield.
Three Months Ended December 31, | 2018 | 2017 | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | Average Outstanding Balance |
Interest Earned / Paid |
Yield / Rate(1) |
Average Outstanding Balance |
Interest Earned / Paid |
Yield / Rate(2) |
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Interest-earning assets: | |||||||||||||||||||||||||||||||||||||||||||||
Cash & fed funds sold | $ | 45,383 | $ | 555 | 4.85 | % | $ | 100,321 | $ | 607 | 2.40 | % | |||||||||||||||||||||||||||||||||
Mortgage-backed securities | 381,285 | 2,698 | 2.81 | % | 673,411 | 3,758 | 2.21 | % | |||||||||||||||||||||||||||||||||||||
Tax exempt investment securities | 1,237,198 | 7,803 | 3.17 | % | 1,408,552 | 8,698 | 3.25 | % | |||||||||||||||||||||||||||||||||||||
Asset-backed securities | 298,445 | 2,712 | 3.61 | % | 93,631 | 765 | 3.24 | % | |||||||||||||||||||||||||||||||||||||
Other investment securities | 110,879 | 710 | 2.54 | % | 78,584 | 586 | 2.96 | % | |||||||||||||||||||||||||||||||||||||
Total investments | 2,027,807 | 13,923 | 3.13 | % | 2,254,178 | 13,807 | 2.93 | % | |||||||||||||||||||||||||||||||||||||
Commercial finance loans and leases | 1,562,054 | 39,281 | 9.98 | % | 249,927 | 2,868 | 4.55 | % | |||||||||||||||||||||||||||||||||||||
Consumer finance loans | 291,421 | 6,230 | 8.48 | % | 204,024 | 3,109 | 6.04 | % | |||||||||||||||||||||||||||||||||||||
Tax services loans | 11,009 | 2 | 0.07 | % | 12,378 | — | — | % | |||||||||||||||||||||||||||||||||||||
Warehouse finance loans | 99,818 | 1,632 | 6.49 | % | — | — | — | % | |||||||||||||||||||||||||||||||||||||
National lending loans and leases | 1,964,302 | 47,145 | 9.52 | % | 466,329 | 5,977 | 5.09 | % | |||||||||||||||||||||||||||||||||||||
Community banking loans | 1,156,072 | 13,353 | 4.58 | % | 940,161 | 10,466 | 4.42 | % | |||||||||||||||||||||||||||||||||||||
Total loans and leases | 3,120,374 | 60,498 | 7.69 | % | 1,406,490 | 16,443 | 4.64 | % | |||||||||||||||||||||||||||||||||||||
Total interest-earning assets | $ | 5,193,564 | $ | 74,976 | 5.89 | % | $ | 3,760,989 | $ | 30,857 | 3.55 | % | |||||||||||||||||||||||||||||||||
Non-interest-earning assets | 787,973 | 361,960 | |||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 5,981,537 | $ | 4,122,949 | |||||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing checking | $ | 102,880 | $ | 58 | 0.23 | % | $ | 71,448 | $ | 50 | 0.28 | % | |||||||||||||||||||||||||||||||||
Savings | 53,661 | 10 | 0.07 | % | 53,084 | 8 | 0.06 | % | |||||||||||||||||||||||||||||||||||||
Money markets | 54,288 | 64 | 0.47 | % | 47,899 | 27 | 0.22 | % | |||||||||||||||||||||||||||||||||||||
Time deposits | 205,049 | 881 | 1.71 | % | 128,496 | 366 | 1.13 | % | |||||||||||||||||||||||||||||||||||||
Wholesale deposits | 1,698,492 | 9,583 | 2.24 | % | 483,878 | 1,434 | 1.18 | % | |||||||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 2,114,370 | 10,596 | 1.99 | % | 784,805 | 1,885 | 0.95 | % | |||||||||||||||||||||||||||||||||||||
Overnight fed funds purchased | 393,315 | 2,481 | 2.50 | % | 139,152 | 525 | 1.50 | % | |||||||||||||||||||||||||||||||||||||
FHLB advances | — | — | — | % | 268,913 | 937 | 1.38 | % | |||||||||||||||||||||||||||||||||||||
Subordinated debentures | 73,504 | 1,161 | 6.27 | % | 73,359 | 1,113 | 6.02 | % | |||||||||||||||||||||||||||||||||||||
Other borrowings | 30,058 | 466 | 6.15 | % | 22,982 | 201 | 3.47 | % | |||||||||||||||||||||||||||||||||||||
Total borrowings | 496,877 | 4,108 | 3.28 | % | 504,406 | 2,776 | 2.18 | % | |||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 2,611,247 | 14,704 | 2.23 | % | 1,289,211 | 4,661 | 1.43 | % | |||||||||||||||||||||||||||||||||||||
Non-interest bearing deposits | 2,489,148 | — | — | % | 2,328,159 | — | — | % | |||||||||||||||||||||||||||||||||||||
Total deposits and interest-bearing liabilities | $ | 5,100,395 | $ | 14,704 | 1.14 | % | $ | 3,617,370 | $ | 4,661 | 0.51 | % | |||||||||||||||||||||||||||||||||
Other non-interest-bearing liabilities | 128,900 | 71,398 | |||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 5,229,295 | 3,688,768 | |||||||||||||||||||||||||||||||||||||||||||
Shareholders' equity | 752,242 | 434,181 | |||||||||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 5,981,537 | $ | 4,122,949 | |||||||||||||||||||||||||||||||||||||||||
Net interest income and net interest rate spread including non-interest-bearing deposits | $ | 60,272 | 4.75 | % | $ | 26,196 | 3.04 | % | |||||||||||||||||||||||||||||||||||||
Net interest margin | 4.60 | % | 2.76 | % | |||||||||||||||||||||||||||||||||||||||||
Tax-equivalent effect | 0.16 | % | 0.30 | % | |||||||||||||||||||||||||||||||||||||||||
Net interest margin, tax-equivalent(3) | 4.76 | % | 3.06 | % | |||||||||||||||||||||||||||||||||||||||||
(1) Tax rate used to arrive at the TEY for the three months ended December 31, 2018 was 21%. | |||||||||||||||||||||||||||||||||||||||||||||
(2) Tax rate used to arrive at the TEY for the three months ended December 31, 2017 was 24.53%. | |||||||||||||||||||||||||||||||||||||||||||||
(3) Net interest margin expressed on a fully-taxable-equivalent basis ("net interest margin, tax-equivalent") is a non-GAAP financial measure. The tax-equivalent adjustment to net interest income recognizes the estimated income tax savings when comparing taxable and tax-exempt assets and adjusting for federal and state exemption of interest income. The Company believes that it is a standard practice in the banking industry to present net interest margin expressed on a fully-taxable-equivalent basis and, accordingly, believe 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: | December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
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Equity to total assets | 12.47 | % | 12.81 | % | 10.65 | % | 10.31 | % | 8.08 | % | ||||||||||||||||||||||||||||||||||||||
Book value per common share outstanding | $ | 19.56 | $ | 19.09 | $ | 15.25 | $ | 15.25 | $ | 15.10 | ||||||||||||||||||||||||||||||||||||||
Tangible book value per common share outstanding | $ | 10.18 | $ | 9.54 | $ | 10.28 | $ | 10.22 | $ | 9.95 | ||||||||||||||||||||||||||||||||||||||
Tangible book value per common share outstanding excluding AOCI | $ | 10.92 | $ | 10.39 | $ | 11.26 | $ | 10.94 | $ | 9.75 | ||||||||||||||||||||||||||||||||||||||
Common shares outstanding | 39,405,508 | 39,167,280 | 29,101,605 | 29,098,773 | 28,994,538 | |||||||||||||||||||||||||||||||||||||||||||
Non-performing assets to total assets | 0.73 | % | 0.72 | % | 0.86 | % | 0.84 | % | 0.61 | % | ||||||||||||||||||||||||||||||||||||||
Non-performing loans and leases to total loans and leases | 0.42 | % | 0.35 | % | 0.36 | % | 0.40 | % | 2.19 | % | ||||||||||||||||||||||||||||||||||||||
Net interest margin | 4.60 | % | 4.05 | % | 2.94 | % | 2.61 | % | 2.76 | % | ||||||||||||||||||||||||||||||||||||||
Net interest margin, tax-equivalent | 4.76 | % | 4.27 | % | 3.23 | % | 2.89 | % | 3.06 | % | ||||||||||||||||||||||||||||||||||||||
Return on average assets | 1.03 | % | 0.65 | % | 0.64 | % | 2.67 | % | 0.45 | % | ||||||||||||||||||||||||||||||||||||||
Return on average equity | 8.19 | % | 5.34 | % | 6.11 | % | 28.37 | % | 4.30 | % | ||||||||||||||||||||||||||||||||||||||
Full-time equivalent employees | 1,229 | 1,219 | 932 | 916 | 878 | |||||||||||||||||||||||||||||||||||||||||||
Select Quarterly Expenses | ||||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | Actual | Anticipated | ||||||||||||||||||||||||||||||||||
For the Three Months Ended | Dec 31, 2018 |
Mar 31, 2019 |
Jun 30, 2019 |
Sep 30, 2019 |
Dec 31, 2019 |
Mar 31, 2020 |
Jun 30, 2020 |
Sep 30, 2020 |
Dec 31, 2020 |
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Amortization of Intangibles (1) | $ | 4,383 | $ | 5,602 | $ | 4,383 | $ | 3,366 | $ | 2,683 | $ | 3,409 | $ | 2,640 | $ | 2,286 | $ | 2,683 | ||||||||||||||||||
Executive Officer Stock Compensation (2) | $ | 941 | $ | 917 | $ | 927 | $ | 937 | $ | 679 | $ | 669 | $ | 669 | $ | 676 | $ | 485 | ||||||||||||||||||
(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 at that time. This table makes no assumption for expenses related to any additional future agreements entered into, or to be entered into, after such quarters. The amounts in this table are not expected to be impacted by the Executive Separation Agreement entered into by the Company as of January 16, 2019 and filed with the Securities and Exchange Commission on January 17, 2019. | ||||||||||||||||||||||||||||||||||||
About Meta Financial Group®
Investor Relations and Media Contact:
Director of Investor Relations
605-362-2423
bkelley@metabank.com
Source: MetaBank