Document


 
 
 
 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 25, 2019

META FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)

Delaware
0-22140
42-1406262
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

5501 South Broadband Lane, Sioux Falls, South Dakota 57108
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (605) 782-1767

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b))
 
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 
 
 
 
 






Item 2.02    Results of Operations and Financial Condition.

On April 25, 2019, the Registrant issued a press release announcing its results of operations and financial condition as of and for the three and six months ended March 31, 2019. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated into this Item 2.02 by reference.

The information in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities thereof, nor shall it be deemed to be incorporated by reference in any filing under the Exchange Act or under the Securities Act of 1933, as amended (the "Securities Act"), except to the extent specifically provided in any such filing.

Item 7.01    Regulation FD Disclosure.

Information is being furnished herein in Exhibit 99.2 with respect to the Investor Update slide presentation prepared for use with the press release. While most of the selected financial information furnished herein is derived from the Company’s consolidated financial statements and related notes prepared in accordance with generally accepted accounting principles ("GAAP") and management’s discussion and analysis of financial condition and results of operations included, or to be included, in the Company’s reports on Forms 10-K and 10-Q, this information includes selected financial and operational information through the second quarter of fiscal year 2019 and does not represent a complete set of financial statement and related notes prepared in conformity with GAAP. The Company’s annual financial statements are subject to independent audit. The Investor Update slide presentation is dated April 25, 2019 and the Company does not undertake to update the materials after that date.

The information in this Item 7.01, including Exhibit 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities thereof, nor shall it be deemed to be incorporated by reference in any filing under the Exchange Act or under the Securities Act, except to the extent specifically provided in any such filing.

Item 9.01    Financial Statements and Exhibits.

(d) Exhibits
Exhibit Number
 
Description of Exhibit
 
 
 
 
Press Release of Meta Financial Group, Inc., dated April 25, 2019 regarding the results of operations and financial condition.
 
 
 
 
Investor Update slide presentation for the Second Quarter of Fiscal Year 2019, dated April 25, 2019, prepared for use with the Press Release.









SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
META FINANCIAL GROUP, INC.
 
 
 
Date: April 25, 2019
By:
/s/ Glen W. Herrick
 
 
Glen W. Herrick
 
 
Executive Vice President, Chief Financial Officer
 
 
and Secretary
 
 
 
 
 
 
 
 
 
 
 
 


Exhibit
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12854489&doc=22
META FINANCIAL GROUP ANNOUNCES RESULTS FOR 2019 FISCAL SECOND QUARTER
- Revenue Rises 41% -
- Generates Net Income of $32.1 Million and Delivers Earnings Per Diluted Share of $0.81 -

Sioux Falls, S.D., April 25, 2019 (GLOBE NEWSWIRE) -- Meta Financial Group, Inc.® (Nasdaq: CASH) (“Meta” or the “Company”) reported net income of $32.1 million, or $0.81 per diluted share, for the three months ended March 31, 2019, compared to net income of $31.4 million, or $1.08 per diluted share, for the three months ended March 31, 2018. Notably, GAAP earnings for the quarter were impacted by a few significant items. Total revenue for the fiscal 2019 second quarter was $176.4 million, compared to $124.8 million for the same quarter in fiscal 2018, representing an increase of $51.5 million, or 41%.
“We expanded net interest margin again this quarter as we were able to enhance our interest-earning asset mix reflecting ongoing growth in noninterest-bearing deposits, while replacing lower yielding investment portfolio balances with higher yielding loans and leases during the second quarter of fiscal 2019 driving a sizeable increase in net interest income,” said President and CEO Brad Hanson. "We also delivered another successful tax season, and made progress on our key strategic initiatives, which positions us well to continue to drive growth across our core businesses."
Highlights for the 2019 Fiscal Second Quarter Ended March 31, 2019
Total gross loans and leases at March 31, 2019 more than doubled to $3.44 billion, compared to March 31, 2018, and increased $106.7 million, or 3%, when compared to December 31, 2018.
Average noninterest-bearing deposits of $2.95 billion increased by $296.8 million, or 11%, when compared to the same period in fiscal 2018.
Net interest income more than doubled to $71.4 million, compared to $27.4 million in the comparable quarter in fiscal 2018.
Net interest margin ("NIM") increased to 5.06% for the fiscal 2019 second quarter from 2.61% over the same period of the prior fiscal year, while the tax-equivalent net interest margin ("NIM, TE") increased to 5.18% from 2.89% over that same period.
Total tax services product revenue, inclusive of interest income from the launch of a new interest-bearing refund advance product, was $72.8 million, an increase of 6% compared to the second quarter of fiscal 2018. The Company recorded $22.5 million in loan loss provision expense related to $1.49 billion in tax services loans originated during the fiscal second quarter of 2019.
Tax services product income, net of losses and direct product expenses, increased 5% when comparing the fiscal 2019 second quarter to the same period of the prior fiscal year.
Related to the previously disclosed DC Solar relationship, the Company recognized a $6.6 million after-tax net non-cash charge to earnings and recorded a $2.0 million increase to goodwill.
The Company recorded previously disclosed $6.1 million of pre-tax executive transition costs.


1



Net Interest Income
Net interest income for the fiscal 2019 second quarter was $71.4 million, an increase of $44.0 million, or 160%, compared to the same quarter in fiscal 2018. This increase was primarily due to growth in loan and lease balances, continued expansion in net interest margin, and an increase in tax services interest income of $7.4 million, which increase in tax services interest income was due in large part to the launch of a new interest-bearing refund advance product. The growth in loan and lease balances, along with the expansion in net interest margin, were largely attributable to the Company's acquisition of Crestmark in the fourth quarter of fiscal 2018 (the "Crestmark acquisition").
During the second quarter of fiscal year 2019, loan and lease interest income grew $55.8 million, offset in part by an increase in interest expense of $11.0 million, in each case, when compared to the same quarter in fiscal 2018. The quarterly average outstanding balance of loans and leases as a percentage of interest-earning assets for the quarter ended March 31, 2019 increased to 65%, from 44% for the quarter ended March 31, 2018, while the quarterly average balance of total investments as a percentage of interest-earning assets decreased to 30% from 53% over that same period. The Company’s average interest-earning assets for the fiscal 2019 second quarter grew by $1.5 billion, or 35%, to $5.72 billion from the comparable quarter in 2018. This was primarily due to growth in the loan and lease portfolio of $1.86 billion, of which $1.67 billion was attributable to an increase in national lending loans and leases along with an increase of $190.2 million in community banking loans, partially offset by a reduction in total investment securities of $534.0 million.
NIM increased to 5.06% for the fiscal 2019 second quarter from 2.61%, while NIM, TE was 5.18% for the fiscal 2019 second 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 292 basis points to 6.38% for the fiscal 2019 second quarter compared to the 2018 second fiscal quarter. The increase was driven primarily by the Company's improved earning asset mix, which reflects higher balances for the national lending portfolio and the launch of a new interest-bearing refund advance product. The fiscal 2019 second quarter TEY on the securities portfolio increased by 18 basis points to 3.36% compared to a 3.18% TEY for the same period of the prior year.
Overall, the Company's cost of funds for all deposits and borrowings averaged 1.17% during the fiscal 2019 second quarter, compared to 0.58% for the 2018 second 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 Crestmark acquisition in the fourth quarter of fiscal 2018. The Company's overall cost of deposits was 1.06% in the fiscal second quarter of 2019, compared to 0.33% in the same quarter of fiscal 2018. Excluding wholesale deposits, the Company's cost of deposits for the second quarter of fiscal 2019 would have been 0.11%.
Non-Interest Income
Fiscal 2019 second quarter non-interest income was $105.0 million, an increase of 8% over the same quarter of fiscal 2018, largely due to increases in rental income, other income, deposit fees, and gain on sale of loans and leases. Partially offsetting the increase in non-interest income was a decrease in card fee income compared to the same quarter of the prior fiscal year, as well as a decrease in total tax product fee income over that same period. The card fee income decrease was related to the previously mentioned wind-down of two non-strategic partners and the transition of certain fees to deposit fees. Certain tax product revenues moved from fee income to interest income due to the launch of a new interest-bearing refund advance product.
Non-Interest Expense
Non-interest expense increased to $110.3 million for the 2019 fiscal second quarter, compared to $68.5 million for the same quarter of fiscal 2018, primarily due to the addition of the Crestmark division, which was not present in the comparable quarter in the prior fiscal year, along with $9.7 million of impairment expense and the Company's recognition of $6.1 million in executive transition agreement costs. During the fiscal 2019 second quarter, compensation and benefits expense increased $17.0 million from the same period of the prior year, primarily due to the addition of Crestmark division employees, the executive transition agreement costs and new hires in the back half of fiscal 2018 in support of Meta's national lending and other business initiatives. The impairment expense included $9.5 million related to the DC Solar relationship.

2



Income Tax Expense
The Company recorded an income tax benefit of $0.4 million, or an effective tax rate of (1.20%), for the fiscal 2019 second quarter, compared to an income tax expense of $6.5 million, or an effective tax rate of 17.24%, for the fiscal 2018 second quarter. The income tax benefit for the fiscal 2019 second quarter was driven by a combination of the ratably recognized investment tax credits and a tax benefit arising from the impairment charges related to the DC Solar relationship.
Investment tax credits related to the solar leasing initiatives and future originations in fiscal 2019 will be recognized ratably based on income over the duration of the current fiscal year. The timing and impact of future solar tax credits are expected to vary from period to period, and Meta intends to undertake only those tax credit opportunities that meet the Company's underwriting and return criteria.
Investments, Loans and Leases
 
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
 
 
 
 
 
 
 
 
 
Total investments
$
1,649,754


$
1,855,792


$
2,019,968


$
2,149,709


$
2,306,603

 
 
 
 
 
 
 
 
 
 
Loans held for sale
 
 
 
 
 
 
 
 
 
Consumer credit products
42,342

 
24,233

 

 

 

SBA/USDA(1)
17,403

 
9,327

 
15,606

 

 

Total loans held for sale
59,745

 
33,560

 
15,606

 

 

 
 
 
 
 
 
 
 
 
 
National Lending loans and leases
 
 
 
 
 
 
 
 
 
Asset based lending
572,210

 
554,072

 
477,917

 

 

Factoring
287,955

 
284,912

 
284,221

 

 

Lease financing
321,414

 
290,889

 
265,315

 

 

Insurance premium finance
307,875

 
330,712

 
337,877

 
303,603

 
240,640

SBA/USDA
77,481

 
67,893

 
59,374

 

 

Other commercial finance
98,956

 
89,402

 
85,145

 
11,418

 
8,041

Commercial finance(2)
1,665,891

 
1,617,880

 
1,509,849

 
315,021

 
248,681

Consumer credit products
139,617

 
96,144

 
80,605

 
26,583

 

Other consumer finance
170,824

 
182,510

 
189,756

 
194,344

 
201,942

Consumer finance
310,441

 
278,654

 
270,361

 
220,927

 
201,942

Tax services
84,824

 
76,575

 
1,073

 
14,281

 
58,794

Warehouse finance
186,697

 
176,134

 
65,000

 

 

Total National Lending loans and leases
2,247,853

 
2,149,243

 
1,846,283

 
550,229

 
509,417

Community Banking loans
 
 
 
 
 
 
 
 
 
Commercial real estate and operating
869,917

 
863,753

 
790,890

 
751,146

 
723,091

Consumer one-to-four family real estate and other
257,079

 
256,341

 
247,318

 
237,704

 
228,415

Agricultural real estate and operating
60,167

 
58,971

 
60,498

 
60,096

 
58,773

Total Community Banking loans
1,187,163

 
1,179,065

 
1,098,706

 
1,048,946

 
1,010,279

Total gross loans and leases
3,435,016

 
3,328,308

 
2,944,989

 
1,599,175

 
1,519,696

Allowance for loan and lease losses
(48,672
)
 
(21,290
)
 
(13,040
)
 
(21,950
)
 
(27,078
)
Net deferred loan and lease origination fees (costs)
2,964

 
1,190

 
(250
)
 
(1,881
)
 
(2,080
)
Total loans and leases, net of allowance
$
3,389,308

 
$
3,308,208

 
$
2,931,699

 
$
1,575,344

 
$
1,490,538

(1) The March 31, 2019 balance included $0.8 million of an interest rate mark premium related to the acquired loans and leases from the Crestmark acquisition.
(2) The March 31, 2019 balance included $8.7 million and $4.5 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 and lease growth. Investment securities totaled $1.65 billion at March 31, 2019, as compared to $2.31 billion at March 31, 2018.

3



Total gross loans and leases increased $1.92 billion, or 126%, to $3.44 billion at March 31, 2019, from $1.52 billion at March 31, 2018, primarily driven by loans and leases attributable to the acquired Crestmark commercial finance division, along with increases in warehouse finance and consumer credit product loans, a 28% increase in insurance premium finance loans, and an 18% increase in community banking loans.
At March 31, 2019, commercial finance loans, which comprised 48% of the Company's gross loan and lease portfolio, totaled $1.67 billion, reflecting growth of $48.0 million, or 3%, from December 31, 2018. Consumer credit product loans increased by $43.5 million, or 45%, and warehouse finance loans increased by $10.6 million, or 6%, in each case at March 31, 2019 as compared to December 31, 2018.
Asset Quality
The Company’s allowance for loan and lease losses was $48.7 million at March 31, 2019, compared to $27.1 million at March 31, 2018, driven primarily by increases in the allowance of $8.4 million in commercial finance, $6.4 million in consumer lending, $4.5 million in tax services and $2.0 million in the community banking portfolio.
(Unaudited)
Three Months Ended
 
Six Months Ended
Allowance for loan and lease loss activity
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
March 31, 2019
 
March 31, 2018
(Dollars in thousands)
 
 
 
 
 
 
 
 
 
Beginning balance
$
21,290

 
$
13,040

 
$
8,862

 
$
13,040

 
$
7,534

Provision - tax services loans
22,473

 
1,496

 
18,129

 
23,969

 
19,146

Provision - all other loans and leases
10,845

 
7,603

 
214

 
18,448

 
265

Charge-offs - tax services loans
(1
)
 
(42
)
 

 
(43
)
 

Charge-offs - all other loans and leases
(6,522
)
 
(2,762
)
 
(339
)
 
(9,283
)
 
(499
)
Recoveries - tax services loans
84

 
92

 
9

 
176

 
422

Recoveries - all other loans and leases
503

 
1,863

 
203

 
2,365

 
210

Ending balance
$
48,672

 
$
21,290

 
$
27,078

 
$
48,672

 
$
27,078

Provision for loan and lease losses was $33.3 million for the quarter ended March 31, 2019, compared to $18.3 million for the comparable period in the prior fiscal year. The increase in provision was primarily driven by originations in the tax services portfolio, growth in commercial finance and provision expense to maintain allowance levels. Net charge-offs were $5.9 million for the quarter ended March 31, 2019 compared to $0.1 million for the quarter ended March 31, 2018.
The Company's non-performing assets at March 31, 2019, were $40.9 million, representing 0.68% of total assets, compared to $45.4 million, or 0.73% of total assets at December 31, 2018 and $36.1 million, or 0.84% of total assets at March 31, 2018. The Company's non-performing loans and leases at March 31, 2019 were $9.6 million, representing 0.28% of total loans and leases, compared to $13.9 million, or 0.42% of total loans and leases at December 31, 2018 and $6.0 million, or 0.40% of total loans and leases at March 31, 2018.
Deposits, Borrowings and Other Liabilities
Total average deposits for the fiscal 2019 second quarter increased by $1.98 billion, or 54%, compared to the same period in fiscal 2018. Average wholesale deposits increased $1.60 billion, or 233%, primarily related to the Crestmark acquisition, and noninterest-bearing deposits increased $296.8 million, or 11%, for the 2019 fiscal second quarter when compared to the same period in fiscal 2018.
The average balance of total deposits and interest-bearing liabilities was $5.86 billion for the three-month period ended March 31, 2019, compared to $4.17 billion for the same period in the prior fiscal year, representing an increase of 41%.
Total end-of-period deposits increased 49%, to $4.97 billion at March 31, 2019, compared to $3.34 billion at March 31, 2018. The increase in end-of-period deposits was primarily a result of increases in wholesale deposits, certificates of deposits and interest-bearing checking deposits.


4


Overview of the DC Solar Financial Impact
As previously communicated, the Company became aware that DC Solar Solutions, Inc., DC Solar Distribution, Inc. and their affiliates filed for bankruptcy and the entities, including their principals, are subjects of an ongoing federal investigation involving allegations of fraudulent misconduct. The Company previously purchased a portfolio of mobile solar generators from DC Solar Solutions, Inc. and certain of its affiliates and, in turn, leased the generators to DC Solar Distribution, Inc., another affiliate of DC Solar Solutions, pursuant to three separate operating leases. The Company has continued to monitor these matters and, in considering the facts and circumstances, the Company recorded a non-cash impairment charge and related effects to the underlying leased assets in the Company's financial statements for the three months ended March 31, 2019. The Company continues to gather information about the situation and, as of the date of this release, has identified and located nearly all of the underlying assets, however the timing and extent to which the Company will be able to recover and re-lease the underlying assets remains uncertain, due in part to claims by third parties as to their potential interests in the underlying assets.
In accordance with GAAP, based on the facts and circumstances surrounding these DC Solar matters, the Company recorded the identified impairment for the DC Solar transactions acquired as a result of the Crestmark acquisition and other related adjustments through goodwill. The impairment and related adjustments for the DC Solar transaction originated post-acquisition is reflected in current earnings. As new facts and circumstances become available, the Company will assess any remaining exposure with respect to these DC Solar matters to determine whether additional adjustments to goodwill and/or impairment loss is necessary. The Company will continue to account for adjustments to the acquired DC Solar transactions as adjustments to goodwill as long as the required criteria under GAAP are met.
In addition to the $2.0 million provisional increase to goodwill on the Company’s balance sheet at March 31, 2019, the table below reflects the net impact of the foregoing DC Solar matters, based upon the Company's present understanding of the relevant facts and circumstances, to the Company's income statement for the three months ended March 31, 2019.
 
 
Income (Expense)
 Income Statement:
(Dollars in Thousands)
 
Rental income
$
1,633

 
Other income
315

 
Impairment
(9,549
)
 
Income tax benefit
1,047

 
Impact to net income
$
(6,554
)
Regulatory Capital
The Company and MetaBank remained above the federal regulatory minimum capital requirements at March 31, 2019 and continued to be classified as well-capitalized institutions. Regulatory capital ratios of the Company and the Bank are stated in the table below.
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.

5



As of the dates indicated
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Company
 
 
 
 
 
 
 
 
 
Tier 1 leverage ratio
7.45
%
 
7.90
%
 
8.50
%
 
8.29
%
 
7.26
%
Common equity Tier 1 capital ratio
10.94
%
 
10.11
%
 
10.56
%
 
13.92
%
 
13.74
%
Tier 1 capital ratio
11.31
%
 
10.47
%
 
10.97
%
 
14.35
%
 
14.18
%
Total qualifying capital ratio
14.20
%
 
12.69
%
 
13.18
%
 
18.37
%
 
18.48
%
MetaBank
 
 
 
 
 
 
 
 
 
Tier 1 leverage ratio
8.42
%
 
9.01
%
 
9.75
%
 
10.16
%
 
8.93
%
Common equity Tier 1 capital ratio
12.72
%
 
11.87
%
 
12.50
%
 
17.57
%
 
17.43
%
Tier 1 capital ratio
12.76
%
 
11.91
%
 
12.56
%
 
17.57
%
 
17.43
%
Total qualifying capital ratio
13.92
%
 
12.41
%
 
12.89
%
 
18.50
%
 
18.59
%
Due to the predictable, quarterly cyclicality of noninterest-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 March 31, 2019, were 8.97%, 12.27%, 12.31%, and 13.42%, 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)
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
(Dollars in Thousands)
Total stockholders' equity
$
823,709

 
$
770,728

 
$
747,726

 
$
443,913

 
$
443,703

Adjustments:
 
 
 
 
 
 
 
 
 
LESS: Goodwill, net of associated deferred tax liabilities
302,768

 
299,037

 
299,456

 
94,781

 
95,262

LESS: Certain other intangible assets
56,456

 
61,317

 
64,716

 
46,098

 
47,724

LESS: Net deferred tax assets from operating loss and tax credit carry-forwards
7,381

 
4,720

 

 

 

LESS: Net unrealized gains (losses) on available-for-sale securities
(10,022
)
 
(28,829
)
 
(33,114
)
 
(28,601
)
 
(21,166
)
LESS: Noncontrolling interest
3,528

 
3,267

 
3,574

 

 

LESS: Unrealized currency gains (losses)
(242
)
 
(357
)
 
3

 

 

Common Equity Tier 1 (1)
463,840

 
431,573

 
413,091

 
331,635

 
321,882

Long-term debt and other instruments qualifying as Tier 1
13,661

 
13,661

 
13,661

 
10,310

 
10,310

Tier 1 minority interest not included in common equity tier 1 capital
2,064

 
1,796

 
2,118

 

 

Total Tier 1 capital
479,565

 
447,030

 
428,870

 
341,945

 
332,192

Allowance for loan and lease losses
48,812

 
21,422

 
13,185

 
22,151

 
27,285

Subordinated debentures (net of issuance costs)
73,566

 
73,528

 
73,491

 
73,442

 
73,418

Total qualifying capital
$
601,963

 
$
541,980

 
$
515,546

 
$
437,538

 
$
432,896

(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.


6



The following table provides a reconciliation of tangible common equity and tangible common equity excluding AOCI, each of which is used in calculating tangible book value data, to Total Stockholders' Equity. Each of tangible common equity and tangible common equity excluding AOCI is a non-GAAP financial measure that is commonly used within the banking industry.
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
(Dollars in Thousands)
Total Stockholders' Equity
$
823,709

 
$
770,728

 
$
747,726

 
$
443,913

 
$
443,703

Less: Goodwill
307,464

 
303,270

 
303,270

 
98,723

 
98,723

Less: Intangible assets
60,506

 
66,366

 
70,719

 
46,098

 
47,724

     Tangible common equity
455,739

 
401,092

 
373,737

 
299,092

 
297,256

Less: Accumulated Other Comprehensive Income (Loss) ("AOCI")
(10,264
)
 
(29,186
)
 
(33,111
)
 
(28,601
)
 
(21,166
)
     Tangible common equity excluding AOCI (Loss)
$
466,003

 
$
430,278

 
$
406,848

 
$
327,693

 
$
318,422


Future Outlook
The Company expects fiscal 2019 earnings per common share ("EPS") on an adjusted basis to range between $2.35 to $2.65. Importantly, the Company's estimates on an adjusted basis exclude the non-recurring $0.12 EPS effect, or $6.1 million, of pre-tax executive transition agreement costs incurred in the quarter ended March 31, 2019. The adjusted EPS guidance also excludes the $0.17 EPS effect, or $6.6 million, after-tax net charge to earnings related to the DC Solar matters. As a result, GAAP earnings per share for fiscal 2019 is expected to be in the range of $2.06 to $2.36 per share. The Company reaffirms the earnings outlook for fiscal year 2020 GAAP EPS to be in the range of $3.10 to $3.80.
Conference Call
The Company will host a conference call and earnings webcast at 4:00 p.m. CDT (5:00 p.m. EDT) on Thursday, April 25, 2019. The live webcast of the call can be accessed from Meta’s Investor Relations website at www.metafinancialgroup.com.  Telephone participants may access the live conference call by dialing (844) 461-9934 beginning approximately 10 minutes prior to start time. Please ask to join the Meta Financial conference call, and provide conference ID 8878418 upon request. International callers should dial (636) 812-6634. A webcast replay will also be archived at www.metafinancialgroup.com for one year.


7



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 Securities and Exchange Commission (“SEC”), the Company’s reports to stockholders, and in other communications by the Company and MetaBank, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.
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 MetaBank or the Company's Payments divisions (which include Meta Payment Systems, Refund Advantage, EPS Financial and Specialty Consumer Services); credit quality and adequacy of reserves; technology; and the Company's employees. The following factors, among others, could cause the Company's financial performance and results of operations to differ materially from the expectations, estimates, and intentions expressed in such forward-looking statements: maintaining our executive management team; the expected growth opportunities, beneficial synergies and/or operating efficiencies from the Crestmark acquisition may not be fully realized or may take longer to realize than expected; customer losses and business disruption related to the Crestmark acquisition; unanticipated or unknown losses and liabilities may be incurred by the Company following the Crestmark acquisition; the costs, risks and effects on the Company of the ongoing federal investigation and bankruptcy proceedings involving DC Solar Solutions, Inc., DC Solar Distribution, Inc., and their affiliates, including the potential financial impact of those matters on the net book value of Company assets leased to DC Solar Distribution and the Company’s ability to recognize certain investment tax credits associated with such assets, and the results of the Company’s review of its due diligence processes with respect to the Company’s alternative energy assets; factors relating to the Company’s recently announced share repurchase program; actual changes in interest rates and the Fed Funds rate; additional changes in tax laws; the strength of the United States' economy, in general, and the strength of the local economies in which the Company conducts operations; risks relating to the recent U.S. government shutdown, including any adverse impact on our ability to originate or sell SBA/USDA loans and any delay by the Internal Revenue Service in processing taxpayer refunds, thereby increasing the cost to us of our refund advance loans; the effects of, and changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve”), as well as efforts of the United States Congress and the United States Treasury in conjunction with bank regulatory agencies to stimulate the economy and protect the financial system; inflation, market, and monetary fluctuations; the timely and efficient development of, and acceptance of, new products and services offered by the Company or its strategic partners, as well as risks (including reputational and litigation) attendant thereto, and the perceived overall value of these products and services by users; the risks of dealing with or utilizing third parties, including, in connection with the Company’s refund advance business, the risk of reduced volume of refund advance loans as a result of reduced customer demand for or acceptance of usage of Meta’s strategic partners’ refund advance products; any actions which may be initiated by our regulators in the future; the impact of changes in financial services laws and regulations, including, but not limited to, laws and regulations relating to the tax refund industry and the insurance premium finance industry; our relationship with our primary regulators, the Office of the Comptroller of the Currency and the Federal Reserve, as well as the Federal Deposit Insurance Corporation, which insures MetaBank’s deposit accounts up to applicable limits; technological changes, including, but not limited to, the protection of electronic files or databases; acquisitions; litigation risk, in general, including, but not limited to, those risks involving MetaBank's divisions; the growth of the Company’s business, as well as expenses related thereto; continued maintenance by MetaBank of its status as a well-capitalized institution, particularly in light of our growing deposit base, a portion of which has been characterized as “brokered;” changes in consumer spending and saving habits; and the success of the Company at maintaining its high quality asset level and managing and collecting assets of borrowers in default should problem assets increase.
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 September 30, 2018, and in other filings made with the SEC. The Company expressly disclaims any intent or obligation to update any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of the Company or its subsidiaries, whether as a result of new information, changed circumstances, or future events or for any other reason.

8



Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in Thousands, Except Share and Per Share Data(1))
ASSETS
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
Cash and cash equivalents
$
156,461

 
$
164,169

 
$
99,977

 
$
71,276

 
$
107,563

Investment securities available for sale, at fair value
1,081,663

 
1,340,870

 
1,484,160

 
1,349,642

 
1,417,012

Mortgage-backed securities available for sale, at fair value
413,493

 
354,186

 
364,065

 
575,999

 
654,890

Investment securities held to maturity, at cost
146,992

 
153,075

 
163,893

 
215,850

 
226,308

Mortgage-backed securities held to maturity, at cost
7,606

 
7,661

 
7,850

 
8,218

 
8,393

Loans held for sale
59,745

 
33,560

 
15,606

 

 

Loans and leases
3,437,980

 
3,329,498

 
2,944,739

 
1,597,294

 
1,517,616

Allowance for loan and lease losses
(48,672
)
 
(21,290
)
 
(13,040
)
 
(21,950
)
 
(27,078
)
Federal Home Loan Bank Stock, at cost
7,436

 
15,600

 
23,400

 
7,446

 
17,846

Accrued interest receivable
20,281

 
22,076

 
22,016

 
17,825

 
17,604

Premises, furniture, and equipment, net
45,457

 
44,299

 
40,458

 
20,374

 
20,278

Rental equipment, net
140,087

 
146,815

 
107,290

 

 

Bank-owned life insurance
88,565

 
87,934

 
87,293

 
86,655

 
86,021

Foreclosed real estate and repossessed assets
29,548

 
31,548

 
31,638

 
29,922

 
30,050

Goodwill
307,464

 
303,270

 
303,270

 
98,723

 
98,723

Intangible assets
60,506

 
66,366

 
70,719

 
46,098

 
47,724

Prepaid assets
26,597

 
31,483

 
27,906

 
23,211

 
26,342

Deferred taxes
19,079

 
23,607

 
18,737

 
23,025

 
20,939

Other assets
49,754

 
48,038

 
35,090

 
19,551

 
31,462

 
 
 
 
 
 
 
 
 
 
        Total assets
$
6,050,042

 
$
6,182,765

 
$
5,835,067

 
$
4,169,159

 
$
4,301,693

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
 
 
Noninterest-bearing checking
$
3,034,428

 
$
2,739,757

 
$
2,405,274

 
$
2,637,987

 
$
2,850,886

Interest-bearing checking
183,492

 
128,662

 
111,587

 
103,065

 
123,397

Savings deposits
59,978

 
52,229

 
54,765

 
57,356

 
65,345

Money market deposits
56,563

 
54,559

 
51,995

 
45,115

 
48,070

Time certificates of deposit
154,401

 
170,629

 
276,180

 
57,151

 
71,712

Wholesale deposits
1,481,445

 
1,790,611

 
1,531,186

 
620,959

 
181,087

        Total deposits
4,970,307

 
4,936,447

 
4,430,987

 
3,521,633

 
3,340,497

Short-term debt
11,583

 
231,293

 
425,759

 
27,290

 
315,777

Long-term debt
99,800

 
88,983

 
88,963

 
85,580

 
85,572

Accrued interest payable
9,239

 
11,280

 
7,794

 
3,705

 
1,315

Accrued expenses and other liabilities
135,404

 
144,034

 
133,838

 
87,038

 
114,829

          Total liabilities
5,226,333

 
5,412,037

 
5,087,341

 
3,725,246

 
3,857,990

 
 
 
 
 
 
 
 
 
 
STOCKHOLDERS’ EQUITY
 

 
 
 
 
 
 
 
 
Preferred stock, 3,000,000 shares authorized, no shares issued or outstanding at March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018, and March 31, 2018

 

 

 

 

Common stock, $.01 par value; 90,000,000 shares authorized, 39,565,496, 39,494,919, 39,192,063, 29,122,596, and 29,119,718 shares issued and 39,450,938, 39,405,508, 39,167,280, 29,101,605, and 29,098,773 shares outstanding at March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018, and March 31, 2018
395

 
394

 
393

 
291

 
291

Common stock, Nonvoting, $.01 par value; 3,000,000 shares authorized, no shares issued or outstanding at March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018, and March 31, 2018

 

 

 

 

Additional paid-in capital
576,406

 
572,156

 
565,811

 
267,610

 
265,491

Retained earnings
258,600

 
228,453

 
213,048

 
206,284

 
200,753

Accumulated other comprehensive (loss) income
(10,264
)
 
(29,186
)
 
(33,111
)
 
(28,601
)
 
(21,166
)
Treasury stock, at cost, 114,558, 89,411, 24,783, 20,991, and 20,945 common shares at March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018, and March 31, 2018
(4,956
)
 
(4,356
)
 
(1,989
)
 
(1,671
)
 
(1,666
)
Total equity attributable to parent
820,181

 
767,461

 
744,152

 
443,913

 
443,703

Non-controlling interest
3,528

 
3,267

 
3,574

 

 

Total stockholders’ equity
823,709

 
770,728

 
747,726

 
443,913

 
443,703

 
 
 
 
 
 
 
 
 
 
         Total liabilities and stockholders’ equity
$
6,050,042

 
$
6,182,765

 
$
5,835,067

 
$
4,169,159

 
$
4,301,693

(1) 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.

9



Consolidated Statements of Operations (Unaudited)
(Dollars in Thousands, Except Share and Per Share Data(1))
 
Three Months Ended
 
Six Months Ended
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
March 31,
2019
 
March 31,
2018
Interest and dividend income:
 
 
 
 
 
 
 
 
 
Loans and leases, including fees
$
73,670

 
$
60,498

 
$
17,844

 
$
134,168

 
$
34,287

Mortgage-backed securities
2,861

 
2,698

 
4,047

 
5,559

 
7,805

Other investments
11,763

 
11,780

 
11,480

 
23,543

 
22,136

 
88,294

 
74,976

 
33,371

 
163,270

 
64,228

Interest expense:
 

 
 
 
 
 
 

 
 
Deposits
14,740

 
10,596

 
2,957

 
25,336

 
4,842

FHLB advances and other borrowings
2,204

 
4,108

 
3,009

 
6,312

 
5,785

 
16,944

 
14,704

 
5,966

 
31,648

 
10,627

 
 
 
 
 
 
 
 
 
 
Net interest income
71,350

 
60,272

 
27,405

 
131,622

 
53,601

 
 
 
 
 
 
 
 
 
 
Provision for loan for lease losses
33,318

 
9,099

 
18,343

 
42,417

 
19,411

 
 
 
 
 
 
 
 
 
 
Net interest income after provision for loan and lease losses
38,032

 
51,173

 
9,062

 
89,205

 
34,190

 
 
 
 
 
 
 
 
 
 
Noninterest income:
 

 
 
 
 

 
 

 
 

Refund transfer product fees
31,601

 
261

 
33,803

 
31,862

 
33,995

Tax advance product fees
33,038

 
1,685

 
33,838

 
34,723

 
35,785

Card fees
23,052

 
19,351

 
26,856

 
42,403

 
52,103

Rental income
9,890

 
10,890

 

 
20,780

 

Loan and lease fees
925

 
1,247

 
1,042

 
2,173

 
2,334

Bank-owned life insurance
631

 
642

 
650

 
1,273

 
1,319

Deposit fees
2,093

 
1,938

 
982

 
4,031

 
1,830

Gain (loss) on sale of securities available-for-sale, net
231

 
(22
)
 
(166
)
 
209

 
(1,176
)
Gain on sale of loans and leases
1,085

 
867

 

 
1,951

 

Gain (loss) on foreclosed real estate
(200
)
 
15

 

 
(185
)
 
(19
)
Other income
2,679

 
877

 
414

 
3,556

 
516

Total noninterest income
105,025

 
37,751

 
97,419

 
142,776

 
126,687

 
 
 
 
 
 
 
 
 
 
Noninterest expense:
 

 
 
 
 

 
 

 
 

Compensation and benefits
49,164

 
33,010

 
32,172

 
82,174

 
54,512

Refund transfer product expense
7,181

 
10

 
9,871

 
7,191

 
9,972

Tax advance product expense
2,225

 
452

 
1,474

 
2,677

 
1,754

Card processing
6,971

 
7,085

 
7,190

 
14,056

 
13,730

Occupancy and equipment
7,212

 
6,458

 
4,477

 
13,670

 
9,367

Operating lease equipment depreciation
4,485

 
7,765

 

 
12,251

 

Legal and consulting
4,308

 
3,969

 
3,239

 
8,277

 
5,655

Marketing
585

 
539

 
668

 
1,124

 
1,221

Data processing
321

 
437

 
243

 
758

 
657

Intangible amortization
5,596

 
4,383

 
2,731

 
9,978

 
4,412

Impairment expense
9,660

 

 

 
9,660

 

Other expense
12,546

 
10,187

 
6,432

 
22,733

 
11,259

Total noninterest expense
110,254

 
74,295

 
68,497

 
184,549

 
112,539

 
 
 
 
 
 
 
 
 
 
Income before income tax expense
32,803

 
14,629

 
37,984

 
47,432

 
48,338

 
 
 
 
 
 
 
 
 
 
Income tax (benefit) expense
(395
)
 
(1,691
)
 
6,548

 
(2,086
)
 
12,232

 
 
 
 
 
 
 
 
 
 
Net income before noncontrolling interest
33,198

 
16,320

 
31,436

 
49,518

 
36,106

Net income attributable to noncontrolling interest
1,078

 
922

 

 
2,000

 

Net income attributable to parent
$
32,120

 
$
15,398

 
$
31,436

 
$
47,518

 
$
36,106

 
 
 
 
 
 
 
 
 
 
Earnings per common share
 

 
 
 
 
 
 

 
 
Basic
$
0.81

 
$
0.39

 
$
1.08

 
$
1.21

 
$
1.24

Diluted
$
0.81

 
$
0.39

 
$
1.08

 
$
1.20

 
$
1.24

Shares used in computing earnings per share
 
 
 
 
 
 
 
 
 
Basic
39,429,595

 
39,335,054

 
29,061,180

 
39,381,682

 
29,015,376

Diluted
39,496,832

 
39,406,507

 
29,180,136

 
39,450,263

 
29,130,414

(1) 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.

10



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 March 31,
2019
 
2018
(Dollars in Thousands)
Average
Outstanding
Balance
 
Interest
Earned /
Paid
 
Yield /
Rate
(1)
 
Average
Outstanding
Balance
 
Interest
Earned /
Paid
 
Yield /
Rate
(2)
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Cash & fed funds sold
$
281,069

 
$
1,914

 
2.76
%
 
$
132,355

 
$
722

 
2.21
%
Mortgage-backed securities
374,096

 
2,861

 
3.10
%
 
642,164

 
4,047

 
2.56
%
Tax exempt investment securities
926,156

 
6,138

 
3.40
%
 
1,431,974

 
9,001

 
3.38
%
Asset-backed securities
285,783

 
2,677

 
3.80
%
 
112,301

 
1,220

 
4.41
%
Other investment securities
142,452

 
1,034

 
2.95
%
 
76,081

 
537

 
2.86
%
Total investments
1,728,487

 
12,710

 
3.36
%
 
2,262,520

 
14,805

 
3.18
%
Commercial finance loans and leases
1,649,973

 
41,954

 
10.31
%
 
249,320

 
3,009

 
4.90
%
Consumer finance loans
327,441

 
7,289

 
9.03
%
 
197,134

 
3,218

 
6.62
%
Tax services loans
369,331

 
8,204

 
9.01
%
 
416,625

 
833

 
0.81
%
Warehouse finance loans
181,781

 
2,789

 
6.22
%
 

 

 
%
National lending loans and leases
2,528,526

 
60,236

 
9.66
%
 
863,079

 
7,060

 
3.32
%
Community banking loans
1,181,294

 
13,434

 
4.61
%
 
991,089

 
10,784

 
4.41
%
Total loans and leases
3,709,820

 
73,670

 
8.05
%
 
1,854,168

 
17,844

 
3.90
%
Total interest-earning assets
$
5,719,376

 
$
88,294

 
6.38
%
 
$
4,249,043

 
$
33,371

 
3.46
%
Non-interest-earning assets
1,068,318

 
 
 
 
 
453,759

 
 
 
 
Total assets
$
6,787,694

 
 
 
 
 
$
4,702,802

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing checking
$
148,640

 
$
78

 
0.21
%
 
$
100,804

 
$
51

 
0.20
%
Savings
56,048

 
9

 
0.07
%
 
59,634

 
9

 
0.06
%
Money markets
57,932

 
92

 
0.64
%
 
48,812

 
27

 
0.22
%
Time deposits
148,384

 
715

 
1.95
%
 
118,933

 
344

 
1.17
%
Wholesale deposits
2,283,049

 
13,846

 
2.46
%
 
685,025

 
2,526

 
1.50
%
Total interest-bearing deposits
2,694,053

 
14,740

 
2.22
%
 
1,013,208

 
2,957

 
1.18
%
Overnight fed funds purchased
103,600

 
637

 
2.49
%
 
407,789

 
1,679

 
1.67
%
FHLB advances

 

 
%
 
2,333

 
9

 
1.56
%
Subordinated debentures
73,542

 
1,162

 
6.41
%
 
73,395

 
1,114

 
6.15
%
Other borrowings
39,610

 
405

 
4.14
%
 
19,602

 
207

 
4.29
%
Total borrowings
216,752

 
2,204

 
4.12
%
 
503,119

 
3,009

 
2.43
%
Total interest-bearing liabilities
2,910,805

 
16,944

 
2.36
%

1,516,327

 
5,966

 
1.60
%
Non-interest bearing deposits
2,953,275

 

 
%
 
2,656,516

 

 
%
Total deposits and interest-bearing liabilities
$
5,864,080

 
$
16,944

 
1.17
%
 
$
4,172,843

 
$
5,966

 
0.58
%
Other non-interest-bearing liabilities
129,525

 
 
 
 
 
86,675

 
 
 
 
Total liabilities
5,993,605

 
 
 
 
 
4,259,518

 
 
 
 
Shareholders' equity
794,089

 
 
 
 
 
443,284

 
 
 
 
Total liabilities and shareholders' equity
$
6,787,694

 
 
 
 
 
$
4,702,802

 
 
 
 
Net interest income and net interest rate spread including non-interest-bearing deposits
 
 
$
71,350

 
5.21
%
 
 
 
$
27,405

 
2.88
%
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin
 
 
 
 
5.06
%
 
 
 
 
 
2.61
%
Tax-equivalent effect
 
 
 
 
0.12
%
 
 
 
 
 
0.28
%
Net interest margin, tax-equivalent(3)
 
 
 
 
5.18
%
 
 
 
 
 
2.89
%
(1) Tax rate used to arrive at the TEY for the three months ended March 31, 2019 was 21%.
(2) Tax rate used to arrive at the TEY for the three months ended March 31, 2018 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, believes the presentation of this non-GAAP financial measure may be useful for peer comparison purposes.

11



Selected Financial Information
As of and for the three months ended:
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
 
 
 
 
 
 
 
 
 
Equity to total assets
13.61
%
 
12.47
%
 
12.81
%
 
10.65
%
 
10.31
%
Book value per common share outstanding
$
20.88

 
$
19.56

 
$
19.09

 
$
15.25

 
$
15.25

Tangible book value per common share outstanding
$
11.55

 
$
10.18

 
$
9.54

 
$
10.28

 
$
10.22

Tangible book value per common share outstanding excluding AOCI
$
11.81

 
$
10.92

 
$
10.39

 
$
11.26

 
$
10.94

Common shares outstanding
39,450,938

 
39,405,508

 
39,167,280

 
29,101,605

 
29,098,773

Non-performing assets to total assets
0.68
%
 
0.73
%
 
0.72
%
 
0.86
%
 
0.84
%
Non-performing loans and leases to total loans and leases
0.28
%
 
0.42
%
 
0.35
%
 
0.36
%
 
0.40
%
Net interest margin
5.06
%
 
4.60
%
 
4.05
%
 
2.94
%
 
2.61
%
Net interest margin, tax-equivalent
5.18
%
 
4.76
%
 
4.27
%
 
3.23
%
 
2.89
%
Return on average assets
1.89
%
 
1.03
%
 
0.65
%
 
0.64
%
 
2.67
%
Return on average equity
16.18
%
 
8.19
%
 
5.34
%
 
6.11
%
 
28.37
%
Full-time equivalent employees
1,231

 
1,229

 
1,219

 
932

 
916

Select Quarterly Expenses
(Dollars in Thousands)
Actual
Anticipated
For the Three Months Ended
Mar 31,
2019
Jun 30,
2019
Sep 30,
2019
Dec 31,
2019
Mar 31,
2020
Jun 30,
2020
Sep 30,
2020
Dec 31,
2020
Mar 31,
2021
 
 
 
 
 
 
 
 
 
 
Amortization of Intangibles (1)
$
5,596

$
4,375

$
3,357

$
2,675

$
3,400

$
2,632

$
2,278

$
2,675

$
2,752

Executive Officer Stock Compensation (2)
$
917

$
927

$
937

$
679

$
669

$
669

$
676

$
485

$
473

(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 were not 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®
Meta Financial Group, Inc. ® (Nasdaq: CASH) is the holding company for the financial services company MetaBank® (“Meta”). Founded in 1954, Meta has grown to operate in several different financial sectors: payments, commercial finance, tax services, community banking and consumer lending. Meta works with high-value niche industries, strategic-growth companies and technology adopters to grow their businesses and build more profitable customer relationships. Meta tailors solutions for bank and non-bank businesses, and provides a focused collaborative approach. The organization is helping to shape the evolving financial services landscape by directly investing in innovation and complementary businesses that strategically expand its suite of services. Meta has a national presence and over 1,200 employees, with corporate headquarters in Sioux Falls, S.D. For more information, visit the Meta Financial Group website or LinkedIn.
Investor Relations and Media Contact:
 
Brittany Kelley Elsasser
 
Director of Investor Relations
 
605-362-2423
 
bkelley@metabank.com
 

12
Exhibit


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