SEC Filing | Meta Financial Group, Inc.

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cash-20200331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 0-22140

https://cdn.kscope.io/fb7862b7da5ae1ac84a331a583dc0f7c-cash-20200331_g1.jpg

META FINANCIAL GROUP INC.®

(Exact name of registrant as specified in its charter)


Delaware			42-1406262
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

5501 South Broadband Lane, Sioux Falls, South Dakota 57108

(Address of principal executive offices and Zip Code)

(605) 782-1767

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	CASH	The NASDAQ Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company See the definitions of "large accelerated filer." "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☒

Accelerated
filer

☐

Non-accelerated
filer

☐

Smaller reporting
company

☐

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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class:

Outstanding at May 4, 2020:

Common Stock, $.01 par value

34,607,962

Nonvoting Common Stock, $.01 par value

Nonvoting shares

META FINANCIAL GROUP, INC.

FORM 10-Q

Table of Contents


PART I - FINANCIAL INFORMATION			2

Item 1.	Financial Statements (Unaudited)	2

	Condensed Consolidated Statements of Financial Condition as of March 31, 2020 and September 30, 2019	2

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2020 and 2019	3

	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended March 31, 2020 and 2019	4

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended March 31, 2020 and 2019	5

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2020 and 2019	7

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	53

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	71

Item 4.	Controls and Procedures	73

PART II - OTHER INFORMATION			75

Item 1.	Legal Proceedings	75

Item 1A.	Risk Factors	75

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77







Item 6.	Exhibits	78

SIGNATURES			79

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

META FINANCIAL GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Condition


(Dollars in Thousands, Except Share and Per Share Data)	March 31, 2020		September 30, 2019
ASSETS	(Unaudited)		(Audited)
Cash and cash equivalents	$	108,733	$	126,545
Investment securities available for sale, at fair value	840,525		889,947
Mortgage-backed securities available for sale, at fair value	355,094		382,546
Investment securities held to maturity, at cost	108,105		127,582
Mortgage-backed securities held to maturity, at cost	6,752		7,182
Loans held for sale	13,610		148,777
Loans and leases	3,618,924		3,658,847
Allowance for loan and lease losses	(65,355)		(29,149)
Federal Home Loan Bank Stock, at cost	29,944		30,916
Accrued interest receivable	16,958		20,400
Premises, furniture, and equipment, net	38,871		45,932
Rental equipment, net	200,837		208,537
Bank-owned life insurance	91,081		89,827
Foreclosed real estate and repossessed assets	7,249		29,494
Goodwill	309,505		309,505
Intangible assets	46,766		52,810
Prepaid assets	9,727		9,476
Deferred taxes	20,887		18,884
Other assets	85,652		54,832

Total assets	$	5,843,865	$	6,182,890

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES
Deposits:
Noninterest-bearing checking	2,900,484		2,358,010
Interest-bearing checking	152,504		185,768
Savings deposits	37,615		49,773
Money market deposits	37,266		76,911
Time certificates of deposit	25,492		109,275
Wholesale deposits	809,043		1,557,268
Total deposits	3,962,404		4,337,005
Short-term borrowings	717,000		646,019
Long-term borrowings	211,353		215,838
Accrued interest payable	3,607		9,414
Accrued expenses and other liabilities	144,427		130,656
Total liabilities	5,038,791		5,338,932

STOCKHOLDERS’ EQUITY
Preferred stock, 3,000,000 shares authorized, no shares issued, none outstanding at March 31, 2020 and September 30, 2019, respectively	—		—
Common stock, $0.01 par value; 90,000,000 shares authorized, 34,711,190 and 37,821,508 shares issued, 34,607,962 and 37,807,064 shares outstanding at March 31, 2020 and September 30, 2019, respectively	346		378
Common stock, Nonvoting, $0.01 par value; 3,000,000 shares authorized, no shares issued, none outstanding at March 31, 2020 and September 30, 2019, respectively	—		—
Additional paid-in capital	590,682		580,826
Retained earnings	212,027		252,813
Accumulated other comprehensive income	1,654		6,339
Treasury stock, at cost, 103,228 and 14,444 common shares at March 31, 2020 and September 30, 2019, respectively	(3,397)		(445)
Total equity attributable to parent	801,312		839,911
Noncontrolling interest	3,762		4,047
Total stockholders’ equity	805,074		843,958

Total liabilities and stockholders’ equity	$	5,843,865	$	6,182,890

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

META FINANCIAL GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)


	Three Months Ended March 31,						Six Months Ended March 31,
(Dollars in Thousands, Except Share and Per Share Data)	2020		2019		2020		2019
Interest and dividend income:
Loans and leases, including fees	$	70,493	$	73,670	$	139,195	$	134,168
Mortgage-backed securities	2,493		2,861		4,882		5,559
Other investments	6,417		11,763		12,952		23,543
	79,403		88,294		157,029		163,270
Interest expense:
Deposits	8,242		14,740		17,583		25,336
FHLB advances and other borrowings	3,424		2,204		7,058		6,312
	11,666		16,944		24,641		31,648

Net interest income	67,737		71,350		132,388		131,622

Provision for loan and lease losses	37,296		33,318		40,703		42,417

Net interest income after provision for loan and lease losses	30,441		38,032		91,685		89,205

Noninterest income:
Refund transfer product fees	28,939		31,601		29,131		31,862
Tax advance product fees	29,536		33,038		31,812		34,723
Payment card and deposit fees	23,156		24,671		44,655		45,477
Other bank and deposit fees	381		474		868		957
Rental income	11,100		9,890		23,451		20,780
Gain on sale of securities available for sale, net (includes $0 and $231 reclassified from accumulated other comprehensive income (loss) for net gain (loss) on securities available for sale for the three months ended March 31, 2020 and 2019, respectively and $0 and $209 for the six months ended March 31, 2020 and 2019, respectively)	—		231		—		209
Gain on divestitures	19,275		—		19,275		—
Gain (loss) on sale of other	2,325		2,230		(244)		3,496
Other income	5,801		2,890		9,047		5,272
Total noninterest income	120,513		105,025		157,995		142,776

Noninterest expense: