cash-20210127
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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): January 27, 2021

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

Delaware0-2214042-1406262
(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))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $.01 par valueCASHThe NASDAQ Stock Market LLC

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 January 27, 2021, the Registrant issued a press release announcing its results of operations and financial condition as of and for the three months ended December 31, 2020. 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 first quarter of fiscal year 2021 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 January 27, 2021 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 NumberDescription of Exhibit
Press Release of Meta Financial Group, Inc., dated January 27, 2021 regarding the results of operations and financial condition.
Investor Update slide presentation for the First Quarter of Fiscal Year 2021, dated January 27, 2021, 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: January 27, 2021
By:/s/ Glen W. Herrick
Glen W. Herrick
Executive Vice President and Chief Financial Officer


Document

Exhibit 99.1
https://cdn.kscope.io/32f007a56200fe480cf4c00a2dd857b6-metalogoa201a.jpg
META FINANCIAL GROUP, INC.® ANNOUNCES RESULTS FOR 2021 FISCAL FIRST QUARTER
- Earnings Per Share Increased 50% Year-over-Year to $0.84
- Efficiency Ratio Improved 9% from Prior Year
Sioux Falls, S.D., January 27, 2021 (GLOBE NEWSWIRE) -- Meta Financial Group, Inc.® (Nasdaq: CASH) (“Meta” or the “Company”) reported net income of $28.0 million, or $0.84 per share, for the three months ended December 31, 2020, compared to net income of $21.1 million, or $0.56 per share, for the three months ended December 31, 2019.
“Solid revenues, lower expenses, and better efficiency ratios combined to deliver excellent results in the first quarter of fiscal year 2021. I am extremely proud of my team's ability to persevere during the pandemic, delivering significant value to customers and shareholders from a remote working environment." said President and CEO Brad Hanson. "During the quarter, we spent time getting ready for the upcoming tax season, implementing H&R Block, and preparing for the distribution of the second round of Economic Impact Payments while advancing our long-standing mission of Financial Inclusion for All®, with increased resources and prioritization of Environmental, Social and Governance initiatives."
"Our quarterly results demonstrate ongoing progress in optimizing our business platforms, enabling us to improve our efficiency ratio by over 600 basis points compared with the prior year. Our loan portfolios continue to perform well, as our credit metrics demonstrate the Company's ability to weather the worst of the pandemic, leaving us well-positioned to continue to remix our balance sheet with higher yield and return earning assets," said Executive Vice President and CFO Glen Herrick.
Business Development Highlights for the 2021 Fiscal First Quarter
Began our new three-year program with Emerald Financial Services, LLC, a wholly-owned indirect subsidiary of H&R Block, Inc., which we announced in the fourth quarter of fiscal 2020. Have already moved more than $150 million in deposits and began issuing Emerald Prepaid Mastercard® to applicants.
Completed negotiations with the U.S. Department of the Treasury's Bureau of the Fiscal Service ("Fiscal Service") to disperse a second round of Economic Income Payment ("EIP") stimulus payments through the distribution of prepaid cards. The Company began distributing cards under this authorization January 4, 2021.
Expanded our solar lending business, increasing our solar credit balance 29% to $323.9 million.
Increased resources dedicated to our Environmental, Social, and Governance ("ESG") activities by hiring an experienced Vice President of ESG and Community Impact and forming a Board-level ESG committee to provide oversight.
Financial Highlights for the 2021 Fiscal First Quarter
Total revenue for the first quarter was $111.5 million, an increase of 9% compared to $102.1 million for the same quarter in fiscal 2020.
Operating efficiency ratio improved to 62.2% at December 31, 2020, compared to 68.2% at December 31, 2019. See non-GAAP reconciliation table below.
Net interest income for the first quarter was $66.0 million, compared to $64.7 million in the comparable quarter last year.


1


Net interest margin ("NIM") decreased to 4.65% for the first quarter from 4.94% during the same period of last year, while the tax-equivalent net interest margin ("NIM, TE") decreased to 4.67% from 4.99% for that same period in fiscal 2020. The decrease in NIM during the first quarter was primarily driven by excess cash associated with the Company's participation in the EIP program, as described further below.
Total gross loans and leases at December 31, 2020 decreased $143.7 million, or 4%, to $3.44 billion, compared to December 31, 2019 and increased $125.4 million, or 4% when compared to September 30, 2020.
Average deposits from the payments division for the fiscal 2021 first quarter increased nearly 83% to $5.07 billion when compared to the same quarter in fiscal 2020. A significant portion of the year-over-year increase reflected the Company's participation in the EIP program, as described further below.
The Company repurchased 1,864,474 shares during the first quarter at an average price of $29.46. Through January 20, 2021, the Company repurchased an additional 300,000 of its shares, at a weighted average price of $38.73.
COVID-19 Business Update
As of December 31, 2020, the Company had 612 loans outstanding with total loan balances of $194.3 million originated as part of the Paycheck Protection Program ("PPP"), compared with 689 loans outstanding with total loan balances of $219.0 million for the quarter ended September 30, 2020.
As of December 31, 2020, $84.2 million of the loans and leases that were granted deferral payments by the Company were still in their deferment period. As of September 30, 2020, loans and leases totaling $170.0 million were within their deferment period. In addition, the Company has made other COVID-19 related modifications, of which $1.1 million were still active as of December 31, 2020 compared to $23.3 million at September 30, 2020. The majority of the other modifications were related to adjusting the type or amount of the customer's payments.
The Company's capital position remained strong as of December 31, 2020, even while absorbing the temporary impact resulting from the receipt of deposits in conjunction with EIP payments described below. In addition, the Company has options available that can be used to effectively manage capital levels, including a strong and flexible balance sheet.
EIP Program Update
The Bank is serving as the sole Financial Agent for distributing prepaid debit cards used in the EIP program. The Company's Payments division, in collaboration with Fiserv and Visa, is proud to have provided a safe and secure mechanism for individuals, including the underbanked, to receive their stimulus payments. Under the first round of EIP, approximately $6.42 billion in stimulus payments on 3.6 million prepaid cards were mailed to individuals across the United States. The total balances remaining on the first round of EIP cards were $605.1 million as of December 31, 2020 and $569.2 million as of January 20, 2021.
On December 27, 2020, the U.S. Congress, through the Consolidated Appropriations Act of 2021 (“CAA”), directed the Internal Revenue Service (“IRS”) to distribute a second round of EIP via the U.S. Treasury to persons in the U.S. eligible to receive them. The Bank entered into an amendment of its existing agreement with the U.S. Department of the Treasury’s Bureau of the Fiscal Service ("Fiscal Service"), under which the Bank will act as a Financial Agent to Fiscal Service in connection with the provision of prepaid debit card services to disburse a portion of the EIP payments to eligible recipients via Bank-issued prepaid cards.
Under the second round, the Bank disbursed approximately $7.10 billion of EIP payments, with initial payments having begun January 4, 2021. The total balances remaining on the second round of EIP cards were $5.80 billion as of January 20, 2021.
While the EIP Program's impact to earnings is expected to be slightly positive, it continues to temporarily have a significant impact on cash and deposit balances, leading to a reduced NIM along with a corresponding impact on the Company's leverage capital ratios. In conjunction with the Program and its balance sheet impacts, the Bank was granted temporary exemption from its requirements to maintain minimum regulatory capital leverage ratios by the Officer of the Comptroller of the Currency due to deposits received as part of the EIP program. The influx of EIP deposits is not expected to have any material impact on the Company's risk-weighted capital ratios.
2


The Company is working with other banks to transfer deposits off-balance sheet in an effort to relieve the impact of the substantial influx of deposits related to the second round of EIP.
Net Interest Income
Net interest income for the fiscal 2021 first quarter was $66.0 million, an increase of 2% from the same quarter in fiscal 2020. The increase was primarily driven by a reduction in total interest expense, partially offset by lower overall balances and yields realized on interest earning assets.
During the first fiscal quarter of 2021, loan and lease interest income decreased $7.0 million and investment securities interest income decreased $2.4 million, compared to the prior year quarter, while interest expense decreased $10.8 million over the same period. The quarterly average outstanding balance of loans and leases as a percentage of interest-earning assets for the first quarter decreased to 62%, from 72% for the comparable quarter last year, while the quarterly average balance of total investments as a percentage of interest-earning assets decreased to 23% from 26% over the same period. These decreases were primarily due to the increase in interest-earning cash balances related to the EIP program. The Company’s average interest-earning assets for the fiscal 2021 first quarter increased by $432.9 million, to $5.64 billion compared with the first quarter in fiscal 2020, primarily due to the effects of the EIP program.
NIM decreased to 4.65% for the fiscal 2021 first quarter from 4.94% for the comparable quarter last year, primarily due to the effects of the EIP program.
The overall reported tax-equivalent yield (“TEY”) on average earning asset yields decreased by 116 basis points to 4.82% for the fiscal 2021 first quarter compared to the prior year quarter, driven primarily by excess low-yielding cash held at the Federal Reserve, as well as the lower interest rate environment. The fiscal 2021 first quarter TEY on the securities portfolio was 1.79% compared to 2.65% for the comparable period last year.
The Company's cost of funds for all deposits and borrowings averaged 0.15% during the fiscal 2021 first quarter, compared to 1.01% during the prior year quarter. This reflected primarily a decrease in overnight borrowings rates as well as an increase in the average balance of the Company's noninterest-bearing deposits, mainly due to the EIP program noted above. The Company's overall cost of deposits was 0.06% in the fiscal first quarter of 2021, compared to 0.81% in the same quarter last year.
Noninterest Income
Fiscal 2021 first quarter noninterest income increased to $45.5 million, compared with $37.5 million for the same period of the prior year. This was due primarily to an increase within gain on sale of other, an increase in other income, and an increase in payments cards and deposit fees, partially offset by a decrease in rental income. The increase within gain on sale of other was primarily due to a loss on sale of foreclosed and repossessed assets recognized during the first quarter of fiscal year 2020. The increase within other income was primarily due to the receipt of a portion of the Company’s liquidation insurance claims of unearned premiums on the ReliaMax estate related to the Company’s student loan portfolio. The amount received in the first quarter of fiscal 2021 was $3.5 million.
Noninterest Expense
Noninterest expense decreased 4% to $72.6 million for the fiscal 2021 first quarter, from $75.8 million for the same quarter of last year, primarily driven by decreases in compensation and benefits, other expense, tax product expense, operating lease depreciation, and amortization expense, partially offset by increases within impairment expense, legal and consulting expense, and card processing expense.
Income Tax Expense
The Company recorded income tax expense of $3.5 million, representing an effective tax rate of 10.8%, for the fiscal 2021 first quarter, compared to an income tax expense of $0.7 million, representing an effective tax rate of 3.0%, for the first quarter last year.


3


The Company originated $38.5 million in solar leases during the fiscal 2021 first quarter, compared to $17.9 million during last year's first quarter. Investment tax credits related to solar leases are recognized ratably based on income throughout each 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
December 31, 2020September 30, 2020June 30, 2020March 31, 2020December 31, 2019
Total investments$1,309,452 $1,360,712 $1,268,416 $1,310,476 $1,337,840 
Loans held for sale
Consumer credit products234 962 391 — — 
SBA/USDA32,983 52,542 31,438 13,610 13,883 
Community Bank(1)
100,442 130,073 48,076 — 250,383 
Total loans held for sale133,659 183,577 79,905 13,610 264,266 
National Lending
Term lending881,306 805,323 738,454 725,581 695,347 
Asset based lending242,298 182,419 181,130 250,211 250,633 
Factoring275,650 281,173 206,361 285,495 285,776 
Lease financing283,722 281,084 264,988 238,788 223,715 
Insurance premium finance338,227 337,940 359,147 332,800 349,299 
SBA/USDA300,707 318,387 308,611 92,000 90,269 
Other commercial finance101,209 101,658 100,214 101,472 99,617 
Commercial Finance2,423,119 2,307,984 2,158,905 2,026,347 1,994,656 
Consumer credit products88,595 89,809 102,808 113,544 115,843 
Other consumer finance162,423 134,342 138,777 144,895 154,772 
Consumer Finance251,018 224,151 241,585 258,439 270,615 
Tax Services92,548 3,066 19,168 95,936 101,739 
Warehouse Finance318,937 293,375 277,614 333,829 272,522 
Total National Lending loans and leases3,085,622 2,828,576 2,697,272 2,714,551 2,639,532 
Community Banking
Commercial real estate and operating339,141 457,371 608,303 654,429 682,399 
Consumer one-to-four family real estate and other5,077 16,486 166,479 205,046 220,588 
Agricultural real estate and operating9,724 11,707 24,655 36,759 40,778 
Total Community Banking loans353,942 485,564 799,437 896,234 943,765 
Total gross loans and leases3,439,564 3,314,140 3,496,709 3,610,785 3,583,297 
Allowance for credit losses(72,389)(56,188)(65,747)(65,355)(30,176)
Net deferred loan and lease origination fees9,111 8,625 5,937 8,139 7,177 
Total loans and leases, net of allowance$3,376,286 $3,266,577 $3,436,899 $3,553,569 $3,560,298 
(1) The December 31, 2020 balance included approximately $95.5 million of commercial real estate and operating loans, $3.5 million of consumer one-to-four family real estate and other loans, and $1.4 million of agricultural real estate and operating loans. The September 30, 2020 balance included approximately $77.5 million of commercial real estate and operating loans, $50.1 million of consumer one-to-four family real estate and other loans, and $2.5 million of agricultural real estate and operating loans. The June 30, 2020 balance included approximately $28.7 million of commercial real estate and operating loans, $11.3 million of consumer one-to-four family real estate and other loans, and $8.1 million of agricultural real estate and operating loans. The December 31, 2019 balance included approximately $197.5 million of commercial real estate and operating loans, $40.4 million of consumer one-to-four family real estate and other loans, and $12.7 million of agricultural real estate and operating loans.

The Company's investment security balances at December 31, 2020 totaled $1.31 billion, as compared to $1.36 billion at September 30, 2020 and $1.34 billion at December 31, 2019.
Total gross loans and leases decreased $143.7 million, or 4%, to $3.44 billion at December 31, 2020, from $3.58 billion at December 31, 2019, with most of the decline attributable to the sale of community bank loan balances during the second and fourth quarters of fiscal 2020 and first quarter of fiscal 2021, along with a decrease in the consumer finance portfolio, partially offset by growth in the commercial finance and warehouse finance portfolios.
4


At December 31, 2020, commercial finance loans, which comprised 70% of the Company's gross loan and lease portfolio, totaled $2.42 billion, reflecting growth of $115.1 million, or 5%, from September 30, 2020. The increase in commercial finance loans was primarily due to increases in term lending and asset based lending loans of $76.0 million and $59.9 million, respectively, partially offset by a $17.7 million decrease in SBA/USDA loans.
Consumer finance loans totaled $251.0 million at December 31, 2020, increasing from $224.2 million at September 30, 2020. This increase was primarily driven by seasonal lending products for tax customers associated with the aforementioned three-year program with Emerald Financial Services.
Tax services loans totaled $92.5 million at December 31, 2020, increasing from $3.1 million at September 30, 2020, as the Company began originating taxpayer advances and ERO loans in preparation of the 2020 tax season during the fiscal 2021 first quarter. Warehouse finance loans totaled $318.9 million at December 31, 2020, a 9% increase from September 30, 2020.
Community bank loans held for investment totaled $353.9 million as of December 31, 2020, as compared to $485.6 million at September 30, 2020 and $943.8 million at December 31, 2019. On November 18, 2020, the Company sold an additional $129.8 million of the retained Community Bank portfolio to Central Bank. The sale did not result in any material gain to the Company. As of December 31, 2020, the Company had $100.4 million of community bank loans classified as held for sale and expects to sell those loans during the second quarter of fiscal year 2021.
Asset Quality
Adoption of Current Expected Credit Losses ("CECL") Accounting Standard
The Company adopted CECL effective October 1, 2020, and its day one entry to increase the allowance for credit losses was $12.8 million. Aside from the loan and lease portfolio, management does not expect any other meaningful impacts on the balance sheet or regulatory capital ratios in the near term based on the election of the two-year delay and the five-year total transition period as allowed by the Office of the Comptroller of the Currency and the Federal Reserve.
Of the total $12.8 million CECL impact to the Company's allowance, $12.7 million and $6.0 million were within the commercial and consumer finance portfolios, respectively. These increases were partially offset by a reduction in retained community bank's allowance of $5.9 million.
The Company’s allowance for credit losses was $72.4 million at December 31, 2020, compared to $56.2 million at September 30, 2020 and $30.2 million at December 31, 2019. The increase in the allowance at December 31, 2020 when compared to September 30, 2020, was primarily due to the adoption of the CECL accounting standard noted above, as well as additional increases during the fiscal 2021 first quarter in the commercial finance portfolio of $2.8 million, tax services portfolio of $1.4 million, and consumer finance portfolio of $1.4 million, partially offset by an additional decrease within the retained community bank portfolio of $2.2 million.
The year over year increase in the allowance was primarily driven by a $29.6 million increase within the commercial finance portfolio, $7.8 million increase within the retained community banking portfolio, and an increase in the consumer lending portfolio of $5.0 million.
5


The following table presents the Company's allowance for credit losses as a percentage of its total loans and leases.
As of the Period Ended
(Unaudited)December 31, 2020
October 1, 2020(1)
September 30, 2020December 31, 2019
Commercial finance1.88 %1.85 %1.30 %0.80 %
Consumer finance4.39 %4.31 %1.64 %2.22 %
Tax services1.53 %0.06 %0.06 %1.62 %
Warehouse finance0.10 %0.10 %0.10 %0.10 %
National Lending1.89 %1.86 %1.20 %0.90 %
Community Bank4.01 %3.37 %4.59 %0.68 %
Total loans and leases2.10 %2.08 %1.70 %0.84 %
(1) Represents the Company's allowance coverage ratio upon the adoption of the Accounting Standards Update 2016-13 using September 30, 2020 loan and lease and allowance balances plus the CECL allowance adjustment.
The Company's allowance for credit losses as a percentage of total loans and leases increased to 2.10% at December 31, 2020 from 1.70% at September 30, 2020. The increase in the coverage ratio was primarily related to the CECL adoption, along with the Company's continued assessment of the risks associated with the ongoing COVID-19 pandemic. Warehouse finance remained largely unchanged due in part to the structure of the credit protections in place. The Company expects to continue to diligently monitor the allowance for credit losses and adjust as necessary in future periods to maintain an appropriate and supportable level.
Activity in the allowance for credit losses for the periods presented was as follows.
(Unaudited)Three Months Ended
December 31, 2020September 30, 2020December 31, 2019
(Dollars in thousands)
Beginning balance$56,188 $65,747 $29,149 
Adoption of CECL accounting standard12,773 — — 
Provision - tax services loans454 1,599 911 
Provision - all other loans and leases5,810 7,381 2,496 
Charge-offs - tax services loans— (13,037)— 
Charge-offs - all other loans and leases(5,675)(6,015)(3,918)
Recoveries - tax services loans956 739 
Recoveries - all other loans and leases1,883 510 799 
Ending balance$72,389 $56,188 $30,176 

Provision for credit losses was $6.1 million for the quarter ended December 31, 2020, compared to $3.4 million for the comparable period in the prior fiscal year. The increase in provision was primarily within the commercial finance and consumer finance portfolios, partially offset by a decrease within the retained community bank portfolio. Net charge-offs were $2.8 million for the quarter ended December 31, 2020 compared to $2.4 million for the quarter ended December 31, 2019.

6


The Company's past due loans and leases were as follows for the periods presented.
As of December 31, 2020Accruing and Nonaccruing Loans and LeasesNonperforming Loans and Leases
(Dollars in Thousands)30-59 Days
Past Due
60-89 Days
Past Due
> 89 Days Past DueTotal Past
Due
CurrentTotal Loans and Leases
Receivable
> 89 Days Past Due and AccruingNon-accrual balanceTotal
Commercial finance$23,448 $7,358 $14,900 $45,706 $2,377,413 $2,423,119 $2,092 $18,707 $20,799 
Consumer finance1,415 404 1,132 2,951 248,067 251,018 1,132 — 1,132 
Tax services— — — — 92,548 92,548 — — — 
Warehouse finance— — — — 318,937 318,937 — — — 
Total National Lending24,863 7,762 16,032 48,657 3,036,965 3,085,622 3,224 18,707 21,931 
Total Community Banking13 — 2,379 2,392 351,550 353,942 — 20,389 20,389 
Total loans and leases held for investment$24,876 $7,762 $18,411 $51,049 $3,388,515 $3,439,564 $3,224 $39,096 $42,320 

As of September 30, 2020Accruing and Nonaccruing Loans and LeasesNonperforming Loans and Leases
(Dollars in Thousands)30-59 Days Past Due60-89 Days Past Due> 89 Days Past DueTotal Past DueCurrentTotal Loans and Leases Receivable> 89 Days Past Due and AccruingNon-accrual balanceTotal
Commercial finance$13,338 $14,345 $16,663 $44,346 $2,263,638 $2,307,984 $7,400 $21,553 $28,953 
Consumer finance977 894 872 2,743 221,408 224,151 872 — 872 
Tax services— — 1,743 1,743 1,323 3,066 1,744 — 1,744 
Warehouse finance— — — — 293,375 293,375 — — — 
Total National Lending14,315 15,239 19,278 48,832 2,779,744 2,828,576 10,016 21,553 31,569 
Total Community Banking905 114 2,449 3,468 482,096 485,564 50 2,399 2,449 
Total loans and leases held for investment$15,220 $15,353 $21,727 $52,300 $3,261,840 $3,314,140 $10,066 $23,952 $34,018 

The Company's nonperforming assets at December 31, 2020, were $53.2 million, representing 0.73% of total assets, compared to $48.0 million, or 0.79% of total assets at September 30, 2020 and $29.8 million, or 0.48% of total assets at December 31, 2019. The increase in nonperforming assets on a linked quarter basis was primarily driven by an increase in community bank nonperforming loans, partially offset by decreases in commercial finance and tax services nonperforming loans and leases, and a decrease in nonperforming operating leases. The year-over-year increase in nonperforming assets was primarily within the community bank portfolio, as well as an increase in foreclosed and repossessed assets, partially offset by a reduction within the commercial and consumer finance portfolios. The increase in nonaccrual balances was driven by one Community Bank relationship operating in the movie theater industry that moved to nonaccrual status in the fiscal 2021 first quarter. The overall decrease in nonperforming assets as a percentage of total assets at December 31, 2020 was primarily due to higher period-end assets, when compared to September 30, 2020.
The Company's nonperforming loans and leases at December 31, 2020, were $42.3 million, representing 1.18% of total gross loans and leases, compared to $34.0 million, or 0.97% of total gross loans and leases at September 30, 2020 and $24.0 million, or 0.62% of total gross loans and leases at December 31, 2019.
At December 31, 2020, the balance of the Company's loans and leases past due 30 days or greater decreased 2% to $51.0 million when compared to September 30, 2020. When excluding tax services loans, the balance of loans and leases past due 30 days or greater increased to $51.0 million at December 31, 2020 from $50.6 million at September 30, 2020. Loan and lease balances that were within their active deferment period decreased to $84.2 million at December 31, 2020 from $170.0 million at September 30, 2020.

7


Deposits, Borrowings and Other Liabilities
Total average deposits for the fiscal 2021 first quarter increased by $813.6 million to $5.43 billion compared to the same period in fiscal 2020, primarily due to the effects of the EIP program. Average noninterest-bearing deposits increased $2.15 billion, or 79%, for the fiscal 2021 first quarter when compared to the same period in fiscal 2020, while average wholesale deposits decreased $1.21 billion, or 82%. Average deposits from the payments division increased 83% to $5.07 billion for the fiscal 2021 first quarter when compared to the same period in fiscal 2020. Excluding the balances on the EIP cards, average payments deposits for the fiscal 2021 first quarter were $4.32 billion, representing an increase of 55% compared to the same period of the prior year, which was largely driven by stimulus payments loaded on various partner cards along with lower levels of consumer spending.
The average balance of total deposits and interest-bearing liabilities was $5.52 billion for the three-month period ended December 31, 2020, compared to $5.13 billion for the same period in the prior fiscal year, representing an increase of 8%.
Total end-of-period deposits increased 37% to $6.21 billion at December 31, 2020, compared to $4.52 billion at December 31, 2019. The increase in end-of-period deposits was primarily driven by an increase in noninterest-bearing deposits of $2.65 billion, of which $605.1 million was attributable to the balances on the EIP cards. The increase in total end-of-period deposits was partially offset by a decrease of $1.21 billion in wholesale deposits, as well as the sale of $290.5 million of community bank deposits during the second quarter of fiscal 2020.
Regulatory Capital
The Company and MetaBank remained above the federal regulatory minimum capital requirements at December 31, 2020 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.
As of the dates indicated
December 31, 2020(1)
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
Company
Tier 1 leverage capital ratio7.40 %6.58 %5.91 %7.28 %8.28 %
Common equity Tier 1 capital ratio10.76 %11.78 %11.51 %10.27 %10.10 %
Tier 1 capital ratio 11.11 %12.18 %11.90 %10.63 %10.46 %
Total capital ratio14.18 %15.30 %14.99 %13.61 %12.74 %
MetaBank
Tier 1 leverage capital ratio8.62 %7.56 %6.89 %8.52 %9.70 %
Common equity Tier 1 capital ratio12.91 %13.96 %13.82 %12.39 %12.18 %
Tier 1 capital ratio 12.93 %14.00 %13.86 %12.44 %12.24 %
Total capital ratio14.19 %15.26 %15.12 %13.69 %12.90 %
(1) December 31, 2020 amounts are preliminary pending completion and filing of the Company's regulatory reports. Regulatory capital presented for periods in fiscal year 2021 reflect the Company's election of the five-year CECL transition for regulatory capital purposes.














8



The following table provides the non-GAAP financial measures used to compute certain of the ratios included in the table above, as well as a reconciliation of such non-GAAP financial measures to the most directly comparable financial measure in accordance with GAAP:
Standardized Approach(1)
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
(Dollars in Thousands)
Total stockholders' equity$813,210 $847,308 $829,909 $805,074 $837,068 
Adjustments:
LESS: Goodwill, net of associated deferred tax liabilities301,999 302,396 302,814 303,625 304,020 
LESS: Certain other intangible assets39,403 40,964 42,865 44,909 47,855 
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards24,105 18,361 10,360 11,589 16,876 
LESS: Net unrealized gains (losses) on available-for-sale securities19,894 17,762 8,382 2,337 3,897 
LESS: Non-controlling interest1,536 3,603 3,787 3,762 4,305 
ADD: Adoption of Accounting Standards Update 2016-1310,804 — — — — 
Common Equity Tier 1(1)
437,077 464,222 461,701 438,852 460,115 
Long-term borrowings and other instruments qualifying as Tier 113,661 13,661 13,661 13,661 13,661 
Tier 1 minority interest not included in common equity tier 1 capital749 1,894 1,894 2,036 2,372 
Total Tier 1 Capital451,487 479,777 477,256 454,549 476,148 
Allowance for credit losses51,070 49,343 50,338 53,580 30,239 
Subordinated debentures (net of issuance costs)73,850 73,807 73,765 73,724 73,684 
Total qualifying capital$576,407 $602,927 $601,359 $581,853 $580,071 
(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 and tangible common equity excluding accumulated other comprehensive income ("AOCI"), each of which is used in calculating tangible book value data, to Total Stockholders' Equity. Each of tangible common equity and tangible common equity excluding AOCI is a non-GAAP financial measure that is commonly used within the banking industry.

December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
(Dollars in Thousands)
Total Stockholders' Equity$813,210 $847,308 $829,909 $805,074 $837,068 
Less: Goodwill309,505 309,505 309,505 309,505 309,505 
Less: Intangible assets39,660 41,692 43,974 46,766 50,151 
     Tangible common equity464,045 496,111 476,430 448,803 477,412 
Less: Accumulated other comprehensive income (loss) ("AOCI")20,119 17,542 7,995 1,654 3,895 
     Tangible common equity excluding AOCI$443,926 $478,569 $468,435 $447,149 $473,517 








9



Conference Call
The Company will host a conference call and earnings webcast at 4:00 p.m. Central Standard Time (5:00 p.m. Eastern Time) on Wednesday, January 27, 2021. 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 1904899 upon request. International callers should dial (636) 812-6634. A webcast replay will also be archived at www.metafinancialgroup.com for one year.
Annual Meeting of Shareholders
The Annual Meeting of Shareholders will convene at 9:00 a.m. Central Standard Time on Tuesday, February 23, 2021. The meeting will be held virtually via the internet for the safety of the Company's directors, employees, and stockholders in light of the COVID-19 pandemic. Further information with regard to this meeting can be found in the proxy statement filed with the Securities and Exchange Commission (the "SEC") on January 14, 2021. Copies of the Company's Annual Report on Form 10-K for the year ended September 30, 2020 (excluding exhibits thereto) may be obtained from www.metafinancialgroup.com.
Upcoming Investor Events
KBW Winter Financial Services Symposium, February 10 - February 12, 2021 | Virtual
KBW Fintech Payments Conference, February 23 - February 25, 2021 | Virtual
Piper Sandler Western Financial Services Conference, March 2, 2021 | Virtual

10


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 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; expectations in connection with the impact of the ongoing COVID-19 pandemic and related government actions on our business, our industry and the capital markets; customer retention; loan and other product demand; expectations concerning acquisitions and divestitures; new products and services, including those offered by Meta Payment Systems, Refund Advantage, EPS Financial and Specialty Consumer Services divisions; credit quality; the level of net charge-offs and the adequacy of the allowance for credit losses; technology; and the Company's employees. The following factors, among others, could cause the Company's financial performance and results of operations to differ materially from the expectations, estimates, and intentions expressed in such forward-looking statements: maintaining our executive management team; expected growth opportunities may not be realized or may take longer to realize than expected; the potential adverse effects of the ongoing COVID-19 pandemic and any governmental or societal responses thereto including the deployment and efficacy of the COVID-19 vaccines, or other unusual and infrequently occurring events; actual changes in interest rates and the Fed Funds rate; additional changes in tax laws; the strength of the United States' economy, in general, and the strength of the local economies in which the Company operates; changes in trade, monetary, and fiscal policies and laws, including interest rate policies of the Federal Reserve; 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 usage of Meta’s strategic partners’ refund advance products; our relationship with, and any actions which may be initiated by, our regulators; 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 and recent and potential changes in response to the COVID-19 pandemic such as the CARES Act and the rules and regulations that may be promulgated thereunder; technological changes, including, but not limited to, the protection of our electronic systems and information; the impact of acquisitions and divestitures; litigation risk; 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 deposit base, a portion of which has been characterized as “brokered;” changes in consumer spending and saving habits; the impact of our participation as prepaid card issuer for the EIP program and potentially similar programs in the future; losses from fraudulent or illegal activity; technological risks and developments and cyber threats, attacks, or events; 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, 2020, 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.
11


Condensed Consolidated Statements of Financial Condition (Unaudited)
(Dollars in Thousands, Except Share Data)
ASSETSDecember 31, 2020September 30, 2020June 30, 2020March 31, 2020December 31, 2019
Cash and cash equivalents$1,586,451 $427,367 $3,108,141 $108,733 $152,189 
Investment securities available for sale, at fair value797,363 814,495 825,579 840,525 852,603 
Mortgage-backed securities available for sale, at fair value430,761 453,607 338,250 355,094 362,120 
Investment securities held to maturity, at cost76,176 87,183 98,205 108,105 116,313 
Mortgage-backed securities held to maturity, at cost5,152 5,427 6,382 6,752 6,804 
Loans held for sale133,659 183,577 79,905 13,610 264,266 
Loans and leases3,448,675 3,322,765 3,502,646 3,618,924 3,590,474 
Allowance for credit losses(72,389)(56,188)(65,747)(65,355)(30,176)
Federal Reserve Bank and Federal Home Loan Bank stocks, at cost27,138 27,138 31,836 29,944 13,796 
Accrued interest receivable17,133 16,628 17,545 16,958 18,687 
Premises, furniture, and equipment, net39,932 41,608 40,361 38,871 38,671 
Rental equipment, net206,732 205,964 216,336 200,837 211,673 
Bank-owned life insurance92,937 92,315 91,697 91,081 90,458 
Foreclosed real estate and repossessed assets7,186 9,957 6,784 7,249 1,328 
Goodwill309,505 309,505 309,505 309,505 309,505 
Intangible assets39,660 41,692 43,974 46,766 50,151 
Prepaid assets11,270 8,328 6,806 9,727 14,813 
Deferred taxes24,411 17,723 15,944 20,887 19,752 
Other assets82,763 82,983 104,877 85,652 97,499 
Total assets$7,264,515 $6,092,074 $8,779,026 $5,843,865 $6,180,926 
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits held for sale$— $— $— $— $288,975 
Deposits:
Noninterest-bearing checking5,581,597 4,356,630 6,537,809 2,900,484 2,927,967 
Interest-bearing checking274,504 157,571 187,003 152,504 67,642 
Savings deposits54,080 47,866 55,896 37,615 17,436 
Money market deposits56,440 48,494 40,811 37,266 42,286 
Time certificates of deposit13,522 20,223 25,000 25,492 23,454 
Wholesale deposits227,648 348,416 743,806 809,043 1,438,820 
Total deposits6,207,791 4,979,200 7,590,325 3,962,404 4,517,605 
Short-term borrowings— — — 717,000 194,000 
Long-term borrowings96,760 98,224 209,781 211,353 213,070 
Accrued interest payable2,068 1,923 4,332 3,607 6,620 
Accrued expenses and other liabilities144,686 165,419 144,679 144,427 123,588 
Total liabilities6,451,305 5,244,766 7,949,117 5,038,791 5,343,858 
STOCKHOLDERS’ EQUITY 
Preferred stock— — — — — 
Common stock, $.01 par value326 344 346 346 372 
Common stock, Nonvoting, $.01 par value— — — — — 
Additional paid-in capital598,669 594,569 592,693 590,682 587,678 
Retained earnings198,000 234,927 228,500 212,027 244,005 
Accumulated other comprehensive income20,119 17,542 7,995 1,654 3,895 
Treasury stock, at cost(5,440)(3,677)(3,412)(3,397)(3,187)
Total equity attributable to parent811,674 843,705 826,122 801,312 832,763 
Noncontrolling interest1,536 3,603 3,787 3,762 4,305 
Total stockholders’ equity813,210 847,308 829,909 805,074 837,068 
Total liabilities and stockholders’ equity$7,264,515 $6,092,074 $8,779,026 $5,843,865 $6,180,926 
12


Consolidated Statements of Operations (Unaudited)
(Dollars in Thousands, Except Share and Per Share Data)
 Three Months Ended
December 31, 2020September 30, 2020December 31, 2019
Interest and dividend income:  
Loans and leases, including fees$61,655 $62,022 $68,702 
Mortgage-backed securities2,123 1,877 2,389 
Other investments4,368 4,508 6,534 
 68,146 68,407 77,625 
Interest expense: 
Deposits797 1,904 9,340 
FHLB advances and other borrowings1,350 1,990 3,634 
 2,147 3,894 12,974 
Net interest income65,999 64,513 64,651 
Provision for credit losses6,089 8,980 3,407 
Net interest income after provision for loan and lease losses59,910 55,533 61,244 
Noninterest income:  
Refund transfer product fees647 2,335 192 
Tax advance product fees1,960 (14)2,276 
Payments card and deposit fees22,564 21,422 21,499 
Other bank and deposit fees237 228 487 
Rental income9,885 10,144 12,351 
Gain on sale of securities available-for-sale, net— 51 — 
Gain (loss) on sale of other2,847 3,455 (2,568)
Other income7,315 3,129 3,246 
Total noninterest income45,455 40,750 37,483 
Noninterest expense:  
Compensation and benefits32,331 35,616 34,268 
Refund transfer product expense61 162 173 
Tax advance product expense370 (97)1,132 
Card processing 6,117 6,524 5,607 
Occupancy and equipment expense6,888 6,826 6,655 
Operating lease equipment depreciation7,581 7,594 8,280 
Legal and consulting5,247 5,615 4,674 
Intangible amortization2,013 2,283 2,676 
Impairment expense1,159 1,232 242 
Other expense10,808 14,528 12,091 
Total noninterest expense72,575 80,283 75,798 
Income before income tax expense32,790 16,000 22,929 
Income tax expense3,533 1,791 680 
Net income before noncontrolling interest29,257 14,209 22,249 
Net income attributable to noncontrolling interest1,220 1,051 1,181 
Net income attributable to parent$28,037 $13,158 $21,068 
Earnings per common share 
Basic$0.84 $0.38 $0.56 
Diluted$0.84 $0.38 $0.56 
Shares used in computing earnings per common share
Basic32,782,285 33,783,659 36,613,699 
Diluted32,790,895 33,783,659 36,647,789 

13


Average Balances, Interest Rates and Yields
The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and in rates. Only the yield/rate reflects tax-equivalent adjustments. Nonaccruing loans and leases have been included in the table as loans carrying a zero yield.
Three Months Ended December 31,20202019
(Dollars in Thousands)Average
Outstanding
Balance
Interest
Earned /
Paid
Yield /
Rate(1)
Average
Outstanding
Balance
Interest
Earned /
Paid
Yield /
Rate(1)
Interest-earning assets:      
Cash and fed funds sold$820,108 $842 0.41 %$99,597 $412 1.65 %
Mortgage-backed securities438,610 2,123 1.92 %376,358 2,389 2.53 %
Tax exempt investment securities333,729 1,215 1.83 %490,982 2,339 2.40 %
Asset-backed securities326,315 1,200 1.46 %303,885 2,354 3.08 %
Other investment securities221,986 1,111 1.98 %197,513 1,429 2.88 %
Total investments1,320,640 5,649 1.79 %1,368,738 8,511 2.65 %
Commercial finance loans and leases2,417,691 45,630 7.49 %1,980,509 44,781 9.00 %
Consumer finance loans239,618 4,748 7.86 %270,612 5,790 8.51 %
Tax services loans25,104 0.13 %24,429 33 0.54 %
Warehouse finance loans284,199 4,933 6.89 %265,564 4,174 6.25 %
National lending loans and leases2,966,612 55,319 7.40 %2,541,114 54,778 8.58 %
Community banking loans529,085 6,336 4.75 %1,194,082 13,924 4.64 %
Total loans and leases3,495,697 61,655 7.00 %3,735,196 68,702 7.32 %
Total interest-earning assets$5,636,445 $68,146 4.82 %$5,203,531 $77,625 5.98 %
Non-interest-earning assets845,378 918,973 
Total assets$6,481,823 $6,122,504 
Interest-bearing liabilities:
Interest-bearing checking(2)
$162,748 $— — %$163,693 $153 0.37 %
Savings deposits52,198 0.01 %48,776 0.08 %
Money market deposits 52,620 39 0.30 %80,528 205 1.01 %
Time certificates of deposit17,390 57 1.30 %114,924 595 2.06 %
Wholesale deposits261,136 699 1.06 %1,472,820 8,378 2.26 %
Total interest-bearing deposits546,092 797 0.58 %1,880,741 9,340 1.98 %
Overnight fed funds purchased11 — 0.25 %302,804 1,450 1.91 %
FHLB advances— — — %110,000 678 2.45 %
Subordinated debentures73,822 1,147 6.16 %73,658 1,160 6.26 %
Other borrowings23,870 203 3.37 %33,589 346 4.10 %
Total borrowings97,703 1,350 5.48 %520,051 3,634 2.78 %
Total interest-bearing liabilities643,795 2,147 1.32 %2,400,792 12,974 5.15 %
Noninterest-bearing deposits4,880,352 — — %2,732,062 — — %
Total deposits and interest-bearing liabilities$5,524,147 $2,147 0.15 %$5,132,854 $12,974 1.01 %
Other noninterest-bearing liabilities151,528 150,319 
Total liabilities5,675,675 5,283,173 
Shareholders' equity806,148 839,331 
Total liabilities and shareholders' equity$6,481,823 $6,122,504 
Net interest income and net interest rate spread including noninterest-bearing deposits$65,999 4.67 %$64,651 4.97 %
Net interest margin4.65 %4.94 %
Tax-equivalent effect0.02 %0.05 %
Net interest margin, tax-equivalent(3)
4.67 %4.99 %
(1) Tax rate used to arrive at the TEY for the three months ended December 31, 2020 and 2019 was 21%.
(2) Of the total balance, $162.5 million are interest-bearing deposits where interest expense is paid by a third party and not by the Company.
(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.
14



Selected Financial Information
As of and For the Three Months EndedDecember 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
Equity to total assets11.19 %13.91 %9.45 %13.78 %13.54 %
Book value per common share outstanding$24.93 $24.66 $23.96 $23.26 $22.52 
Tangible book value per common share outstanding$14.23 $14.44 $13.76 $12.97 $12.84 
Tangible book value per common share outstanding excluding AOCI$13.61 $13.93 $13.53 $12.92 $12.74 
Common shares outstanding32,620,251 34,360,890 34,631,160 34,607,962 37,172,081 
Nonperforming assets to total assets0.73 %0.79 %0.64 %0.67 %0.48 %
Nonperforming loans and leases to total loans and leases1.18 %0.97 %1.10 %0.87 %0.62 %
Net interest margin4.65 %3.77 %3.28 %4.78 %4.94 %
Net interest margin, tax-equivalent4.67 %3.79 %3.31 %4.82 %4.99 %
Return on average assets1.73 %0.69 %0.86 %3.16 %1.38 %
Return on average equity13.91 %6.21 %8.83 %25.15 %10.04 %
Full-time equivalent employees1,038 1,015 999 992 1,088 


Non-GAAP Reconciliation
Efficiency RatioFor the last twelve months ended
(Dollars in Thousands)December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
Noninterest Expense - GAAP$315,828 $319,051 $314,911 $316,138 $334,663 
Net Interest Income260,386 259,038 260,142 264,973 268,586 
Noninterest Income247,766 239,794 235,024 237,766 222,278 
Total Revenue: GAAP$508,152 $498,832 $495,166 $502,739 $490,864 
Efficiency Ratio, last twelve months62.15 %63.96 %63.60 %62.88 %68.18 %



15



About Meta Financial Group, Inc.®
Meta Financial Group, Inc.®(Nasdaq: CASH) is a South Dakota-based financial holding company. Meta Financial Group’s subsidiary, MetaBank®, N.A., is a financial enablement company that works with innovators to increase financial availability, choice, and opportunity for all. MetaBank strives to remove barriers that traditional institutions put in the way of financial access, and promote economic mobility by providing responsible, secure, high quality financial products that contribute to individuals and communities at the core of the real economy. Additional information can be found by visiting www.metafinancialgroup.com or www.metabank.com.

Investor Relations Contact:
Brittany Kelley Elsasser
Director of Investor Relations
605-362-2423
bkelley@metabank.com
Media Relations:
mediarelations@metabank.com

16
a1qfy21investordeck_0127
Q U A R T E R LY I N V E S T O R U P DAT E F I R S T Q UA R T E R F I S C A L Y E A R 2 0 21


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH F O R WA R D - L O O K I N G S TAT E M E N T S 2 This investor update contains “forward-looking statements” 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. These forward-looking statements are based on information currently available to us and assumptions about future events, and include statements with respect to the Company’s beliefs, expectations, estimates, and intentions, which are subject to significant risks and uncertainties, and are subject to change based on various factors, some of which are beyond the Company’s control. Such risks, uncertainties and other factors may cause our actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these forward- looking statements. Such statements address, among others, the following subjects: future operating results; expectations in connection with the impact of the ongoing COVID-19 pandemic and related government actions on our business, our industry and the capital markets; customer retention; loan and other product demand; expectations concerning acquisitions and divestitures; new products and services, including those offered by Meta Payment Systems, Refund Advantage, EPS Financial and Specialty Consumer Services divisions; credit quality; the level of net charge-offs and the adequacy of the allowance for loan and lease losses; technology; and the Company's employees. The following factors, among others, could cause the Company's financial performance and results of operations to differ materially from the expectations, estimates, and intentions expressed in such forward-looking statements: maintaining our executive management team; expected growth opportunities may not be realized or may take longer to realize than expected; the potential adverse effects of the ongoing COVID-19 pandemic and any governmental or societal responses thereto, including the deployment and efficacy of the COVID-19 vaccines, or other unusual and infrequently occurring events; actual changes in interest rates and the Fed Funds rate; additional changes in tax laws; the strength of the United States' economy, in general, and the strength of the local economies in which the Company operates; changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Federal Reserve; 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 usage of the Company’s strategic partners’ refund advance products; our relationship with, and any actions which may be initiated by, our regulators; 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 and recent and potential changes in response to the COVID-19 pandemic such as the CARES Act and the rules and regulations that may be promulgated thereunder; technological changes, including, but not limited to, the protection of our electronic systems and information; the impact of acquisitions and divestitures; litigation risk; 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 deposit base, a portion of which has been characterized as “brokered;” changes in consumer spending and saving habits; the impact of our participation as prepaid card issuer for the Economic Impact Payment (“EIP”) program and potential similar programs in the future, losses from fraudulent or illegal activity, technological risks and developments and cyber threats, attacks or events; 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; and the other factors described 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, 2020 and in other filings made by the Company with the Securities and Exchange Commission (“SEC”). The forward-looking statements included herein speak only as of the date of this investor update. 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.


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH3 W E A R E A F I N A N C I A L E N A B L E M E N T C O M PA N Y We work with innovators to increase financial availability, choice, and opportunity for all. We strive to remove barriers that traditional institutions put in the way of financial access, and promote economic mobility by providing responsible, secure, high quality financial products that contribute to individuals and communities at the core of the real economy. We work to disrupt traditional banking norms by developing partnerships with fintechs and finservs, affinity groups, government agencies, and other banks to make a range of quality financial products and services available to the communities we serve nationally. Our national bank charter, coordination with regulators, and deep understanding of risk mitigation and compliance allows us to guide our partners and deliver the financial products and services that meet the needs of those who need them most. We believe in Financial Inclusion For All®. Our mission is about equal access to financial opportunity and is inherently ESG-oriented. Every day, our team members work to help individuals and organizations improve their economic status and set themselves on secure paths for growth and financial stability. During the first quarter of fiscal 2021, we increased resources dedicated to our ESG activities by hiring an experienced Vice President of ESG and Community Impact and formed a Board-level ESG committee to provide oversight. E N V I R O N M E N T A L , S O C I A L , A N D G O V E R N A N G E ( “ E S G ” )


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH4 S T R O N G R E V E N U E G R O W T H A N D D I S C I P L I N E D E X P E N S E M A N A G E M E N T D R I V E P R O F I TA B I L I T Y F I R S T Q U A R T E R E N D E D D E C E M B E R 3 1 , 2 0 2 0 INCOME STATEMENT ($ in thousands, except per share data) 1Q21 4Q20 1Q20 Net interest income 65,999 64,513 64,651 Provision for loan and lease losses 6,089 8,980 3,407 Payments card & deposit fees 22,564 21,422 21,499 Total noninterest income 45,455 40,750 37,483 Total noninterest expense 72,575 80,283 75,798 Net income before taxes 32,790 16,000 22,929 Income tax expense 3,533 1,791 680. Net income before non-controlling interest 29,257 14,209 22,249 Net income attributable to non-controlling interest 1,220 1,051 1,181 Net income attributable to parent $ 28,037 $ 13,158 $ 21,068 Earnings per share, diluted $ 0.84 $ 0.38 $ 0.56 Average diluted shares 32,790,895 33,783,659 36,647,789 • Revenue increased to $111.5 million, or 9%, compared to $102.1 million for the same quarter in fiscal 2020, driven by: — Previously disclosed $5 million loss from the sale of foreclosed property during the last year's first fiscal quarter, related to a legacy community bank agricultural relationship. — Receipt of $3.5 million dollars related to a portion of the Company’s liquidation insurance claims of unearned premiums on the ReliaMax estate related to our student loan portfolio. • Noninterest expense decreased 4% to $72.6 million for the fiscal 2021 first quarter, from $75.8 million for the same quarter of last year. • Earnings per share increased 50% year-over-year to $0.84 supported by strong net income and share repurchases completed since the first quarter of fiscal 2020.


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH5 H E A LT H Y B A L A N C E S H E E T W I T H R O B U S T PAY M E N T D E P O S I T G R O W T H F I R S T Q U A R T E R E N D E D D E C E M B E R 3 1 , 2 0 2 0 BALANCE SHEET PERIOD ENDING AVERAGE ($ in thousands) 1Q21 4Q20 1Q20 1Q21 1Q20 Loans and leases 3,448,675 3,322,765 3,590,474 3,341,023 3,601,302 Allowance for credit losses (72,389) (56,188) (30,176) (72,252) (28,853) Total assets $ 7,264,515 $ 6,092,074 $ 6,180,926 $ 6,481,823 $ 6,122,504 Noninterest-bearing checking 5,581,597 4,356,630 2,927,967 4,880,314 2,717,346 Total deposits 6,207,791 4,979,200 4,517,605 5,426,443 4,481,158 Total liabilities 6,451,305 5,244,766 5,343,858 5,675,676 5,283,173 Total stockholders' equity 813,210 847,308 837,068 806,147 839,331 Total liabilities and stockholders equity $ 7,264,515 $ 6,092,074 $ 6,180,926 $ 6,481,823 $ 6,122,504 Loans / Deposits 56 % 67 % 79 % 62 % 80 % Net Interest Margin 4.65 % 3.77 % 4.94 % 4.65 % 4.94 % Return on Average Assets 1.73 % 0.69 % 1.38 % 1.73 % 1.38 % Return on Average Equity 13.91 % 6.21 % 10.04 % 13.91 % 10.04 % • Total gross loans and leases at the end of the first quarter decreased $143.7 million, or 4%, to $3.45 billion compared to the same quarter of the prior year. • Average deposits from the payments divisions for the first quarter increased nearly 83% to $5.07 driven by the company’s participation in the EIP program, as well as growth associated with other government stimulus programs. • The effects of government stimulus programs have had a significant impact on the Company’s balance sheet. — These programs include Paycheck Protection Program loans, EIP, and enhanced unemployment benefits that flow through to existing prepaid card programs.


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH6 D I F F E R E N T I AT E D B U S I N E S S L I N E S W I T H S I G N I F I C A N T G R O W T H O P P O R T U N I T I E S C O M M E R C I A L F I N A N C E Enables fintechs, finservs, and various organizations by distributing prepaid cards, deposit accounts, and payment related transactions to consumers. Enables small and medium-sized businesses, as well as large enterprises, with flexible capital solutions P A Y M E N T S T A X S E R V I C E S C O N S U M E R F I N A N C E M E T A V E N T U R E S Enables tax preparation firms to provide underbanked consumers with access to electronic tax payments and refund advances. Enables consumers to better control their financial futures with empowered spending and reliable access to funds. Enables emerging and strategic companies that align with our mission and contribute to our goal of bringing Financial Inclusion For All®. 49% Noninterest Income as a percent of Total Revenue in LTM ending December 31, 2020 Net Interest Income $260.4 Payments Fee Income $88.5 Tax Product Income $68.0 Rental Income $42.3 Other Income $48.9 R E V E N U E M A K E U P L A S T T W E L V E M O N T H S E N D I N G D E C E M B E R 3 1 , 2 0 2 0 ($ in millions)


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH7 F I R S T Q U A R T E R B U S I N E S S H I G H L I G H T S & K E Y S T R AT E G I C I N I T I AT I V E S INCREASE PERCENTAGE OF FUNDING FROM CORE DEPOSITS OPTIMIZE INTEREST-EARNING ASSET MIX IMPROVE OPERATING EFFICIENCIES Efficiency ratio improved to 62.2% from 68.2% a year prior Driving optimization and utilization of existing business platforms. Leveraging technology to help drive future efficiencies. ACHIEVED YEAR-OVER-YEAR NET INCOME AND EARNINGS PER SHARE GROWTH OF 33% AND 50%, RESPECTIVELY Executing large, national programs requiring Meta’s scale • Selected as issuing bank to distribute Economic Impact Payments (“EIP”) on prepaid debit cards. • Facilitator for H&R Block’s suite of financial services products. RETURNED CAPITAL BY REPURCHASING OVER 1.8 MILLION SHARES IN THE FIRST QUARTER OF FISCAL 2021 Focus on commercial finance business lines • Sold Community Bank division in fiscal 2020. • Replacing community bank loans with commercial finance loans and leases.


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH 72% 26% 2% 38% 23% 11% 62% 23% 15% D I V E R S I F I E D E A R N I N G A S S E T P O R T F O L I O 8 QUARTERLY AVERAGE EARNING ASSET MIX DEC 2019 $5.20 billion INTEREST EARNING ASSETS 43% 9% 10% DEC 2020 $5.64 billion INTEREST EARNING ASSETS CASH & FED FUNDSINVESTMENTSLOANS & LEASES Commercial Community Bank Consumer & Warehouse % in charts represent % of total interest earning assets ASPIRATIONAL TARGETS >55% 0% <15% At the Quarter Ended December 31, 2020 December 31, 2019 ($ in thousands) 1 Q 2 1 1 Q 2 0 Y/Y Δ COMMERCIAL FINANCE 2,423,119 1,994,656 21% Term lending 881,306 695,347 27% Asset-based lending 242,298 250,633 (3)% Factoring 275,650 285,776 (4)% Lease financing 283,722 223,715 27% Insurance premium finance 338,227 349,299 (3)% SBA/USDA¹ 300,707 90,269 233% Other commercial finance 101,209 99,617 2% CONSUMER FINANCE 251,018 270,615 (7)% Consumer credit programs 88,595 115,843 (24)% Other consumer finance 162,423 154,772 5% TAX SERVICES 92,548 101,739 (15)% WAREHOUSE FINANCE 318,937 272,522 17% NATIONAL LENDING 3,085,622 2,639,532 17% COMMUNITY BANKING 353,942 943,765 (62)% TOTAL GROSS LOANS & LEASES HFI 3,439,564 3,583,297 (4)% TOTAL GROSS LOANS & LEASES HFS 133,658 264,266 (49)% CASH & INVESTMENTS 2,802,598 1,426,769 96% TOTAL EARNING ASSETS 6,375,820 5,274,332 21% RENTAL EQUIPMENT, NET 206,732 211,673 (2)% 1 Includes balances of $194.3 million in Paycheck Protection Program loans.


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH PAY MENT S & TA X SERVICES 9


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH10 PAY M E N T S B U S I N E S S S O L U T I O N S P R E P A I D B A N K I N G A S A S E R V I C E Facilitate Transactional Payments including: Faster Payments, ACH, merchant acquiring and ATM Sponsorship. Ranked among Top 50 on Nacha’s 2019 Top ACH Originators & Receivers By Volume. Provide deposit account services for fintech/neobank/challenger banks. Named Partner Bank of the Year by Tearsheet for MoneyLion’s RoarMoney banking product. P A Y M E N T S B U S I N E S S P R O V I D E S P R I M A R Y D E P O S I T S O U R C E G E N E R A T E S S T A B L E , L O W C O S T C O R E D E P O S I T S A N D F E E I N C O M E Leading prepaid card issuer. Partner to top prepaid program managers. Leader in applying innovative prepaid solutions to address key consumer and business payments needs. P R E P A I D C A R D D I S T R I B U T I O N based on balances as of December 31, 2020 General Purpose Reloadable Loyalty Awards Promotion Gift Payroll 23% 17% 42% DEPOSITS + FEE INCOME DEPOSITS + FEE INCOME 13% Demand Deposit Accounts 5%


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH $2.45 $2.71 $3.57 $2.78 $4.32 $0.98 $0.75 2018 2019 2020 1Q20 1Q21 Average Payments Deposits ($ in billions) 11 PAY M E N T S B U S I N E S S U P DAT E 21% CAGR 2018 – 2020 Excl. EIP Card Balances • Selected as the prepaid debit card issuer for Economic Impact Payments as Treasury’s financial agent. – Disbursed $6.42 billion in funding for EIP round 1 (“EIP1”) and $7.10 billion for EIP round 2 (“EIP2”). Distribution of initial payments for EIP2 begun January 4, 2021. – As of December 31, 2020, $605.1 million in balances remained outstanding from EIP1. – As of January 20, 2021, $569.2 million and $5.80 billion in balances remained outstanding on EIP1 and EIP2, respectively. – Program execution provides opportunities to work with large-scale programs and program managers in the future, as well as increase MetaBank’s presence in the payments space. • Total average payments deposits were up nearly 83% year-over-year, excluding EIP Card balances issued by MetaBank, average payments deposits were up 55% year- over-year. – Deposit growth largely associated with government stimulus programs and is expected to be temporary in nature. – Also contributing to growth was $150 million in deposits acquired as a component of the H&R Block relationship that began in the fiscal first quarter. $21.5 $23.2 $21.3 $21.4 $22.6 1Q20 2Q20 3Q20 4Q20 1Q21 Payments Card and Deposit Fee Income ($ in millions) Percent of Total Revenue 21% 12% 21% 20% 20% 79% 11% 10% Prepaid Deposit Banking Services Banking Services includes ATM, ACH/Faster Payments, Merchant Acquiring Payments Card and Deposit Fee Income Breakout First Quarter Fiscal 2021 Quarter AverageFiscal Year Average EIP Card Balances EIP Card Balances $5.07 $4.55


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH12 PROGRAM MANAGER H&R Block / Emerald Financial Services, LLC PAYMENTS Emerald Prepaid Mastercard® Emerald Savings® TAX SERVICES Refund Advance Refund Transfers CONSUMER FINANCE Emerald Advance® Line of Credit O V E R V I E W O F S T R AT E G I C R E L AT I O N S H I P W I T H H & R B L O C K


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH COMMERCIA L F INA NCE & COMMUNIT Y BA NK POR T FOL IOS 13


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH TERM LENDING. Collateralized conventional term loans and notes receivable, weighted average life of 53 months. Exposure is concentrated in solar/alternative energy, most of which are construction projects that will convert to longer term government guaranteed facilities upon completion. Also includes equipment financing relationships, through equipment finance agreements and installment purchase agreements. Average loan size approximately $180 thousand; small ticket equipment finance approximately $70 thousand ASSET-BASED LENDING. Asset-based loans secured by accounts receivable, inventory, machinery & equipment, work-in-process and other assets. Approximately 70% backed by accounts receivable, generally 85% advance rates. Exposure managed within a collateral borrowing base. Well diversified in terms of industry and geographic concentrations. Average loan size approximately $1.4 million. FACTORING. Factoring services where clients provide detailed inventory, accounts receivable, and work-in-process reports for lending arrangements. Bank secures dominion of funds which secures repayment when applicable accounts receivables or invoices are paid. Approximately 95% backed by accounts receivable, generally 85% advance rates. Average loan size approximately $320 thousand. LEASE FINANCING. Leasing solutions for technology, capital equipment and select transportation assets like tractors, trailers and construction equipment. Majority of portfolio relationships are to Fortune 1000 clients. Average lease size approximately $145 thousand. INSURANCE PREMIUM FINANCE. Short-term, primarily collateralized financing to facilitate the purchase of commercial insurance for various forms of risk. Over 90% of insurance company partners have an investment grade rating through AM Best as well as an internal risk rating system. Average loan size approximately $30 thousand. SBA/USDA. Originate loans through SBA or USDA programs, primarily SBA 7(a), USDA B&I, USDA REAP. Focus on specific verticals such as investment advisory practices, insurance agencies and solar. Includes $194.3 million of PPP loans. Average loan size approximately $530 thousand, excluding PPP loans. OTHER COMMERCIAL FINANCE. Includes healthcare receivables loan portfolio primarily comprised of loans to individuals for medical services received. Majority of these loans are guaranteed by the referring hospital. RENTAL EQUIPMENT. Leased assets related to operating leases generated from the commercial finance business line. Primarily consists of solar panels, motor vehicles, and computers and IT networking equipment. C O M M E R C I A L F I N A N C E L O A N A N D L E A S E P O R T F O L I O 14 Top geographic state concentrations1 by % 1. California 16.7% 2. Texas 11.3% 3. Michigan 7.8% 4. Florida 7.0% 5. North Carolina 4.6% 6. New York 4.5% 7. Illinois 4.1% 8. Pennsylvania 3.2% 1 Excludes certain joint ventures; percentages calculated based on aggregate principal amount of commercial finance loans and leases includes operating lease rental equipment of $206.7M $2.63 billion COMMERCIAL FINANCE PORTFOLIO (includes Rental Equipment, net) as of December 31, 2020 Asset-Based Lending $242.3M 10.67% SBA/USDA $300.7M 4.02% Other $101.2M 7.63% Factoring $275.7M 12.82% Insurance Premium Finance $338.2M 5.39% Term Lending $881.3M 7.03% 7.49% 1Q21 Quarterly Yield % in chart represents current quarter yield Rental Equipment, net $206.7M NA% Lease Financing $283.7M 7.68% Small Ticket Equipment Financing $266.0M Solar/alternative energy $235.3M Equipment financing $181.8M Wealth management/ insurance $135.9M Other $62.3M


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH D I S T R I B U T I O N O F C O M M E R C I A L F I N A N C E P O R T F O L I O B Y I N D U S T R Y ¹ 15 1 Distribution by NAICS codes; excludes certain joint ventures; percentages calculated based on aggregate principal amount of commercial finance loans and leases includes operating lease rental equipment of $206.7M Manufacturing Transportation and Warehousing Utilities Finance and Insurance Wholesale Trade Health Care and Social Assistance Construction Admin and Support and Waste Mgmt and Remediation Services Mining, Quarrying, and Oil and Gas Extraction Other Professional, Scientific, and Technical Services Real Estate and Rental and Leasing Retail Trade Accommodation and Food Services Other Services (except Public Administration) Information Arts, Entertainment, and Recreation Agriculture, Forestry, Fishing and Hunting Educational Services Management of Companies and Enterprises Public Administration $- $50 $100 $150 $200 $250 $300 $350 $400 $450 $ in millions MANUFACTURING 24% Asset-based lending 22% Term lending 21% Lease financing 12% SBA/USDA 10% Factoring TRANSPORTATION & WAREHOUSING 37% Factoring 30% Term lending 22% Insurance premium finance UTIL IT IES 55% Term lending 20% Rental equipment, net 20% SBA/USDA OIL & GAS 42% Term lending 18% SBA/USDA 16% Factoring 9% Lease financing


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH Outstanding Balance % of Total² M A N UF ACTURING $ 4 1 9 . 1 1 1 . 5 % Computer and Electronic Product Manufacturing 67.2 1.8% Fabricated Metal Product Manufacturing 51.2 1.4% Transportation Equipment Manufacturing 42.3 1.2% Nonmetallic Mineral Product Manufacturing 39.1 1.1% Machinery Manufacturing 34.7 1.0% Electrical Equipment, Appliance, and Component Manufacturing 30.8 0.8% Plastics and Rubber Products Manufacturing 29.6 0.8% Chemical Manufacturing 29.2 0.8% Printing and Related Support Activities 27.9 0.8% Food Manufacturing 17.4 0.5% Other³ 49.7 1.3% Solar Electric Power Generation Other Utilities C O M M E R C I A L F I N A N C E M I X ¹ 16 1 Excludes certain joint ventures; percentages calculated based on aggregate principal amount of loans includes operating lease rental equipment of $206.7M ² Total includes total gross loans & leases of $3.44 billion and rental equipment, net of $206.7M, as of December 31, 2020, exposures are based on current outstanding balances as of December 31, 2020 3 Other includes manufacturing subsectors comprised of less than 0.5% of total² • $51.0 million exposure related to support activities for Oil & Gas Operations - Approximately half of outstandings are in working capital lines, primarily collateralized by accounts receivable, remaining collateralized by machinery and equipment • Limited exposure to single borrowers • Diversified across multiple subsectors – greatest concentration of subsectors is 1.8% of total² • 98% of Utilities exposure is to Solar Electric Power Generation, majority of which is related to permanent solar generators. • Well collateralized, majority backed by power purchase agreements with highly rated, large public utilities • $236.9 million exposure to truck transportation, over 89% in general freight trucking. • Less than $18.0 million exposure to passenger air transportation and support activities. • Receive invoices and back-up, verify a portion of the purchases and monitor these accounts under a Dominion of Funds to ensure that our balances are covered by collateral MANUFACTURING UTILITIES TRANSPORTATION & WAREHOUSING OIL & GAS Total Exposure $371.3 million % of Total² 10.2% Total Exposure $419.1 million % of Total² 11.5% Total Exposure $348.3 million % of Total² 9.6% Total Exposure $54.7 million % of Total² 1.5%


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH L E G A C Y C O M M U N I T Y B A N K P O R T F O L I O B R E A K D O W N A S O F D E C E M B E R 3 1 , 2 0 2 0 | S E R V I C E D B Y C E N T R A L B A N K 17 COMMERCIAL REAL ESTATE INDUSTRY COMPOSITION ($ in millions) Outstanding Balance % of Total¹ Commercial Real Estate $322.4 8.8% Commercial Operating 16.8 0.5% Agricultural 9.7 0.3% 1-4 Family Real Estate 4.2 0.1% Consumer 0.9 0.0% Total $353.9 9.7% • 70% commercial mortgage, 30% commercial construction • ACL coverage of 4.18% of total commercial real estate loans, primarily related to the hospitality and theater commercial real estate loans - Low historical charge-offs (2bps 5-year average NCO/average loans) • Past due commercial real estate balances were less than 0.01%, as of December 31, 2020 • $17.2 million in nonperforming loans as of December 31, 2020 COMMERCIAL REAL ESTATE Hotel/Motel 56.0% Multifamily 19.3% Retail 12.8% Theater 5.3% Office Building 5.3% Other² 1.3% ¹ Total includes total gross loans & leases of $3.44 billion and rental equipment, net of $206.7M, as of December 31, 2020, exposures are based on current outstanding balances as of December 31, 2020 ² Other includes subsectors comprised of less than 1% of total commercial real estate as of December 31, 2020 ($322.4 million) During the quarter, sold $130 million loans and had $100 million of community bank loans classified as held for sale as of December 31, 2020. • Sale did not result in any material gain. As a result of COVID-19, tightened focus on directly impacted industries – Hospitality & Movie Theater • 68% and 30% of active community bank COVID-related modifications and deferrals tied to hospitality and theater exposures, respectively.


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH L E G A C Y C O M M U N I T Y B A N K | H O T E L P O R T F O L I O A S O F D E C E M B E R 3 1 , 2 0 2 0 | S E R V I C E D B Y C E N T R A L B A N K 18 $186.7 million outstanding, total exposure of $197.9 million including unfunded commitments • $29.9 million related to construction. $180.4 million in commercial real estate and $6.3 million in C&I • Portfolio comprised of 29 relationships representing 32 individual hotels and 3,084 total rooms • 99% flagged hotel relationships (i.e. Holiday Inn Express, Hampton Inn, Hyatt Place, etc.); 100% limited-service • 26% of balances located in South Dakota and Iowa with majority of the remaining balances through developers headquartered in South Dakota and Iowa - Lower unemployment rate in Sioux Falls & Des Moines MSA, relative to National rates sign of stronger local economies • Majority of loans have guarantors by individuals with a strong combined net worth • Average loan-to-value of 60% at December 31, 2020 • No nonperforming loans as of December 31, 2020 COVID-19 Monitoring • Most hospitality loans that were on deferral are back to P&I payments • Active COVID-related deferrals and modifications on $40.8 million in hospitality balances outstanding, working with borrowers on a case-by-case basis


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH A SSET QUA L IT Y, INT ER EST R AT E R ISK , & CA PITA L 19


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH A S S E T Q U A L I T Y 20 Credit quality remains strong. Allowance for credit losses (“ACL”) $72.4 million, or 2.10% of total loans and leases as of December 31, 2020. • ACL 171% of nonperforming loans • Legacy community bank hospitality and theater exposures ACL coverage of 5.80% • Small ticket equipment finance ACL coverage of 5.19% Uptick in NPAs and NPLs driven primarily by isolated theater relationship in the legacy community bank portfolio. For fiscal 2021 first quarter, $3.3 million of NCOs were related to small ticket equipment finance relationships. Excludes Tax Services NCOs and Related Seasonal Average Loans Tax Services NCOs and related seasonal average loans are excluded to adjust for the cyclicality of activity related to the overall economics of the tax services business line. 1 Non-GAAP measures, see appendix for reconciliations. $29.8 $39.4 $56.1 $48.0 $53.2 0.48% 0.67% 0.64% 0.79% 0.73% 1Q20 2Q20 3Q20 4Q20 1Q21 $ i n m il li o n s Period Ended Nonperforming Assets (“NPAs”) NPAs NPAs / Total Assets $24.0 $31.5 $39.3 $34.0 $42.3 0.62% 0.87% 1.10% 0.97% 1.18% 1Q20 2Q20 3Q20 4Q20 1Q21 $ i n m il li o n s Period Ended Nonperforming Loans (“NPLs”) NPLs NPLs / Total Loans $3.1 $2.2 $4.9 $5.5 $3.8 0.34% 0.24% 0.55% 0.63% 0.44% 1Q20 2Q20 3Q20 4Q20 1Q21 $ i n m il li o n s Period Ended Adjusted Net Charge-Offs (“NCOs”)¹ NCOs NCOs / Average Loans


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH $53.7 $52.3 $51.2 $193.3 $85.3 1Q20 4Q20 1Q21 $ i n m il li o n s Past Due Loans & Leases + COVID-10 Modifications & Deferrals Total Past Due COVID-19 Modifications & Deferrals A S S E T Q U A L I T Y 21 1 Small ticket equipment finance includes balances of $16.0 million in term lending and $0.5 million in lease receivables. Portfolio showing strong improvement in COVID-related modifications and deferrals. Excluding PPP loans, active deferments and modifications decreased from $193.3, or 6% of total gross loans and leases at September 30, 2020 to $85.3 million or 3% of total gross loans at December 31, 2020. The Company continues to place significant focus on hospitality and movie theater loans as well as small ticket equipment finance relationships. • Working with borrowers on a case-by-case basis. • Most hospitality loans that were on deferral are back to P&I payments. ACTIVE COVID-19 LOAN AND LEASE MODIFICATIONS AND DEFERRALS December 31, 2020 September 30, 2020 COUNT $ BALANCE COUNT $ BALANCE AREAS OF CREDIT FOCUS 138 $75.2 183 $118.7 Hospitality 11 40.8 26 79.0 Movie Theater 4 17.9 4 17.9 Small ticket equipment finance¹ 123 16.5 153 21.8 COMMERCIAL FINANCE 130 $21.1 192 $66.8 CONSUMER 200 $3.9 276 $5.8 COMMUNITY BANK 16 $60.3 35 $120.7 TOTAL 346 $85.3 503 $193.3 % TOTAL LOANS AND LEASES (excl. PPP) 3% 6% Past Due / Total Loans and Leases Past Due + COVID-19 Modifications & Deferrals / Total Loans and Leases 1.50% 1.57% 1.43% 1.50% 7.41% 3.82%


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH Month 1-12 Month 13-36 Month 37-60 Month 61-180 -2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 V o lu m e ( $ M M ) Period Variance Total Assets Total Liabilities -5% 5% 15% 25% 35% 45% -100 +100 +200 +300 12-MONTH INTEREST RATE SENSITIVITY FROM BASE NET INTEREST INCOME Parallel Shock Ramp 24% 24% 11% 41% EARNING ASSET PRICING ATTRIBUTES 1 22 • Lower for longer rate environment -- focus is on reducing wholesale funding and redeploying deposits and assets into positive carry opportunities. • Interest rate risk shows asset sensitive balance sheet - net interest income modeled under an instantaneous, parallel rate shock and a gradual parallel ramp. • Management also employs rigorous modeling techniques under a variety of yield curve shapes, twists and ramps. ASSET/LIABILITY GAP ANALYSIS 1 Fixed rate securities, loans and leases are shown for contractual periods less than 12 months and greater than 12 months. I N T E R E S T R AT E R I S K M A N A G E M E N T D E C E M B E R 3 1 , 2 0 2 0 Fixed Rate > 1 Year Fixed Rate < 1 Year Floating or Variable Federal Reserve Bank Deposits (Floating or Variable)


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH S T R O N G C A P I TA L A N D S O U R C E S O F L I Q U I D I T Y R E G U L A T O R Y C A P I T A L A S O F D E C E M B E R 3 1 , 2 0 2 0 23 Minimum Requirement to be Well-Capitalized under Prompt Corrective Action Provisions Meta Financial Group, Inc. MetaBank, N.A. CAPITAL RATIO TRENDS At December 31, 2020¹ Meta Financial Group, Inc. MetaBank, N.A. Tier 1 Leverage 7.40% 8.62% Tier 1 Leverage – EIP-adjusted² N/A 9.61% Common Equity Tier 1 10.76% 12.91% Tier 1 Capital 11.11% 12.93% Total Capital 14.18% 14.19% • MetaBank EIP-adjusted Tier 1 Leverage of 9.61% better reflects the balance sheet reducing the impact from the temporary EIP card- related balances. • MetaBank remains well-capitalized. Granted temporary exemption from meeting certain capital leverage ratios by the OCC, related to participation in distributing EIP cards. • Repurchased 1,864,474 shares at a weighted average price of $29.46 during the 2021 first fiscal quarter. As of January 20, 2021, approximately 2 million shares remain under current authorization. Primary & Secondary Liquidity Sources ($ in millions) Cash and Cash Equivalents $1,585 Unpledged Investment Securities $90 FHLB Borrowing Capacity $970 Funds Available through Fed Discount Window $340 PPP Loan Collateral $190 Unsecured Lines of Credit $1,265 - $1,535 1 Regulatory capital reflects the Company's election of the five-year CECL transition for regulatory capital purposes. ² Non-GAAP measure, see appendix for reconciliations. 8.28% 7.28% 5.91% 6.58% 7.40% 9.70% 8.52% 6.89% 7.56% 8.62% 1Q20 2Q20 3Q20 4Q20 1Q21 Tier 1 Leverage Ratio 12.74% 13.61% 14.99% 15.30% 14.18% 12.90% 13.69% 15.12% 15.26% 14.19% 1Q20 2Q20 3Q20 4Q20 1Q21 Total Capital Ratio 10% 5%


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH A PPENDIX 24


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH N O N - G A A P R E C O N C I L I AT I O N S E I P - R E L A T E D A D J U S T M E N T S 25 THREE MONTHS ENDED NET INTEREST MARGIN DECEMBER 31, 2020 SEPTEMBER 30, 2020 JUNE 30, 2020 Average interest-earning assets 5,636,445 6,806,366 7,608,616 Net interest income 65,999 64,513 62,137 Net interest margin 4.65% 3.77% 3.28% ADJUSTMENT FOR EIP-RELATED ASSETS Interest-earning assets 5,636,445 6,806,366 7,608,618 LESS: Cash adjustment 624,857 1,573,727 2,323,425 EIP-ADJUSTED AVERAGE INTEREST-EARNING ASSETS 5,011,588 5,232,639 5,285,193 Net interest income 65,999 64,513 62,137 LESS: Cash interest adjustment 157 396 578 EIP-ADJUSTED NET INTEREST INCOME 65,842 64,177 61,559 EIP-ADJUSTED NET INTEREST MARGIN 5.21% 4.87% 4.68% RETURN ON AVERAGE ASSETS (“ROAA”) DECEMBER 31, 2020 SEPTEMBER 30, 2020 JUNE 30, 2020 Net income 28,037 13,158 18,190 Average assets 6,481,823 7,672,773 8,439,206 ROAA 1.73% 0.69% 0.86% LESS: Cash adjustment 624,857 1,573,727 2,323,425 EIP-ADJUSTED AVERAGE ASSETS 5,856,966 6,099,046 6,115,781 EIP-ADJUSTED ROAA 1.91% 0.86% 1.19%


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH N O N - G A A P R E C O N C I L I AT I O N S E I P - R E L A T E D C A P I T A L A D J U S T M E N T S 26 METABANK TIER 1 LEVERAGE DECEMBER 31, 2020 SEPTEMBER 30, 2020 JUNE 30, 2020 Total stockholder's equity $ 912,508 $ 933,430 $ 923,520 LESS: Goodwill, net of associated deferred tax liabilities 301,999 302,396 302,815 LESS: Certain other intangible assets 39,403 40,946 42,865 LESS: Net deferred tax assets from operating loss and tax credit carry-forwards 24,105 18,361 10,360 LESS: Net unrealized gains (losses) on available-for-sale securities 19,894 17,762 8,382 LESS: Non-controlling interest 1,536 3,603 3,787 Common Equity Tier 1 Capital ("CET1") 525,571 550,344 555,311 Tier 1 minority interest not included in common equity tier 1 capital 750 1,894 1,894 Total Tier 1 capital 526,321 552,238 557,205 Total Assets (Quarter Average) $ 6,487,231 $ 7,679,897 $ 8,446,393 ADD: Available for sale securities amortized cost (24,694) (22,844) (8,420) ADD: Deferred tax 6,201 5,724 2,104 LESS: Deductions from CET1 365,507 361,721 356,040 ADJUSTED TOTAL ASSETS $ 6,103,231 $ 7,301,056 $ 8,084,037 METABANK REGULATORY TIER 1 LEVERAGE 8.62 % 7.56 % 6.89% ADJUSTMENT FOR EIP-RELATED ASSETS Adjusted total assets $ 6,103,231 $ 7,301,056 $ 8,084,037 LESS: EIP prepaid card-related assets (cash) 624,857 1,573,727 2,323,425 EIP-ADJUSTED TOTAL ASSETS $ 5,478,375 $ 5,727,329 $ 5,760,612 METABANK EIP-ADJUSTED TIER 1 LEVERAGE 9.61 % 9.64 % 9.67%


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH F I N A N C I A L M E A S U R E R E C O N C I L I AT I O N S 27 Efficiency Ratio For the last twelve months ended ($ in thousands) Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Noninterest Expense - GAAP 315,828 319,051 314,911 316,138 334,663 Net Interest Income 260,386 259,038 260,142 264,973 268,586 Noninterest Income 247,766 239,794 235,024 237,766 222,278 Total Revenue: GAAP 508,152 498,832 495,166 502,739 490,864 Efficiency Ratio, LTM 62.15 % 63.96 % 63.60 % 62.88 % 68.18 % Non-GAAP Reconciliation Adjusted Annualized NCOs and Adjusted Average Loans and Leases For the quarter ended ($ in thousands) Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Net Charge-offs 2,836 18,538 14,700 2,117 2,380 Less: Tax services net charge-offs (956) 13,034 9,782 (74) (739) Adjusted Net Charge-offs $ 3,792 $ 5,504 $ 4,918 $ 2,191 $ 3,119 Quarterly Average Loans and Leases 3,495,696 3,536,997 3,622,928 4,195,772 3,735,196 Less: Quarterly Average Tax Services Loans 25,104 16,650 39,845 516,491 24,429 Adjusted Quarterly Loans and Leases $ 3,470,592 $ 3,520,347 $ 3,583,083 $ 3,679,281 $ 3,710,767 Annualized NCOs/Average Loans and Leases 0.32 % 2.10 % 1.62 % 0.20 % 0.25 % Adjusted Annualized NCOs/Adjusted Average Loans and Leases1 0.44 % 0.63 % 0.55 % 0.24 % 0.34 % 1 Tax Services NCOs and average loans are excluded to adjust for the cyclicality of activity related to the overall economics of the Company's tax services business line.


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH L I M I T E D T O TA L E X P O S U R E T O C O V I D - 1 9 H I G H I M PA C T I N D U S T R I E S 28 ¹ Total includes total gross loans & leases of $3.44 billion and rental equipment, net of $206.7M, as of December 31, 2020, exposures are based on current outstanding balances as of December 31, 2020 ² Consumer staples incudes grocery, pharmacy, gas stations, and convenience stores. HIGH IMPACT INDUSTRY EXPOSURES D E C E M BE R 31 , 2 0 2 0 ($ in millions) COMMUNITY BANK COMMERCIAL FINANCE PPP LOANS TOTAL % OF TOTAL¹ HOSPITALITY $186.7 $56.2 $2.2 $245.1 6.7% RETAIL (excl. consumer staples²) $41.3 $64.6 $1.6 $107.5 2.9% FITNESS AND RECREATIONAL CENTERS $0.6 $18.1 $0.9 $19.6 0.5% MOVIE THEATERS $17.9 $0.8 - $18.7 0.5% RESTAURANTS $0.8 $11.9 $1.5 $14.2 0.4% TOTAL $247.3 $151.6 $6.2 $405.1 11.0% As of December 31, 2020, $194.3 million Paycheck Protection Program (“PPP”) loans administered by the Small Business Administration remained; 3.2% of PPP loans are in high impact industries.


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH WA R E H O U S E F I N A N C E 29 Asset-backed warehouse lines of credit used to support strategic initiatives. • Lines are primarily secured by consumer receivables, whereby Meta is in a senior, secured position as the first out participant. • Have never had a charge off or loss. • Agreements trigger waterfall protection for the “First Out” participant: - The waterfall could be “triggered” due to items such as: collateral underperformance, collateral days past due, covenant breaches, concentration limit breaches, missed payments, regulatory events, material adverse effects, etc. All Loan/Collateral Cash Flows Admin Fees (0-5%) Junior Tranche $35MM (35%) Equity Tranche $10MM (10%) First-Out Tranche (Meta Position) $55MM (55%) $100M Facility EXAMPLEEXAMPLE In the example $100M scenario, all cash flows of the outstanding facility are used to pay the First Out Tranche’s (i.e. – Meta’s) outstanding principal and interest. The First Out’s position must be paid down in full prior to the junior and equity tranches receiving any cash flow. Effectively, the First Out receives the benefit of $100M of loans/collateral to pay down its $55M full principal and interest position. Total Exposure $318.9 million % of Total¹ 8.7% ¹ Total includes total gross loans & leases of $3.44 billion and rental equipment, net of $206.7M, as of December 31, 2020


 
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH C O N S U M E R C R E D I T P R O G R A M S 30 Consumer Payments Principal, Interest, Fees Principal Losses to Meta Collection Account Principal Repayment to Meta Servicing Meta’s Agreed upon interest return Remaining Excess Spread to Meta-owned escrow reserve Consumer credit programs offer Meta a risk adjusted return, protected by certain layers of credit support and balance sheet flexibility. Programs are offered to strategic partners with payments distribution potential. • Agreements typically provide for “excess spread” build-up and protection through a priority of payment within a waterfall • Consumer interest rate and fees flow through a waterfall: - Covers principal losses and Meta’s required rate of interest. Meta’s interest rate is substantially less than the consumer’s APR - Structure provides for a build up of excess spread to allow protection from loan losses and ensure Meta’s contractual rate of interest is covered - Structure provides for ALLL on a portfolio basis rather than loan level basis - Excess spread in the escrow account only released to partner when certain conditions are satisfied - Escrow account balance has increased since program inception • As of December 31, 2020, MetaBank had two consumer credit programs with strategic partners. Reserve release to partner is conditional (subordinate) based on product performance Total Exposure $88.6 million % of Total¹ 2.4% ¹ Total includes total gross loans & leases of $3.44 billion and rental equipment, net of $206.7M, as of December 31, 2020