SEC Filing | Meta Financial Group, Inc.

View:

Download DOC

Download PDF

Download XLS

Download XBRL

cash-20201231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2020

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

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 0-22140

https://cdn.kscope.io/6ab5d0d14b89dced0fbd54080a643681-cash-20201231_g1.jpg

META FINANCIAL GROUP INC.®

(Exact name of registrant as specified in its charter)


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

5501 South Broadband Lane, Sioux Falls, South Dakota 57108

(Address of principal executive offices and Zip Code)

(605) 782-1767

(Registrant’s telephone number, including area code)

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


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

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

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

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

Large accelerated filer

☒

Accelerated
filer

☐

Non-accelerated
filer

☐

Smaller reporting
company

☐

Emerging growth
company

☐

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

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

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


Class:	Outstanding at February 3, 2021:
Common Stock, $.01 par value	32,248,629	Shares
Nonvoting Common Stock, $.01 par value	0	Nonvoting shares

META FINANCIAL GROUP, INC.

FORM 10-Q

Table of Contents


PART I - FINANCIAL INFORMATION		2

Item 1.	Financial Statements (Unaudited)	2

	Condensed Consolidated Statements of Financial Condition as of December 31, 2020 and September 30, 20 20	2

	Condensed Consolidated Statements of Operations for the Three Months Ended December 3 1 , 2020 and 2019	3

	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended December 3 1 , 2020 and 2019	4

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended December 3 1 , 2020 and 2019	5

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31 , 2020 and 2019	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	59

Item 4.	Controls and Procedures	61

PART II - OTHER INFORMATION		62

Item 1.	Legal Proceedings	62

Item 1A.	Risk Factors	62

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62







Item 6.	Exhibits	63

SIGNATURES		64

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

META FINANCIAL GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Condition


(Dollars in Thousands, Except Share and Per Share Data)	December 31, 2020		September 30, 2020
ASSETS	(Unaudited)		(Audited)
Cash and cash equivalents	$	1,586,451	$	427,367
Investment securities available for sale, at fair value	797,363		814,495
Mortgage-backed securities available for sale, at fair value	430,761		453,607
Investment securities held to maturity, at cost	76,176		87,183
Mortgage-backed securities held to maturity, at cost	5,152		5,427
Loans held for sale	133,659		183,577
Loans and leases	3,448,675		3,322,765
Allowance for credit losses	(72,389)		(56,188)
Federal Reserve Bank and Federal Home Loan Bank stocks, at cost	27,138		27,138
Accrued interest receivable	17,133		16,628
Premises, furniture, and equipment, net	39,932		41,608
Rental equipment, net	206,732		205,964
Bank-owned life insurance	92,937		92,315
Foreclosed real estate and repossessed assets. net	7,186		9,957
Goodwill	309,505		309,505
Intangible assets	39,660		41,692
Prepaid assets	11,270		8,328
Deferred taxes, net	24,411		17,723
Other assets	82,763		82,983

Total assets	$	7,264,515	$	6,092,074

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES
Deposits:
Noninterest-bearing checking	5,581,597		4,356,630
Interest-bearing checking	274,504		157,571
Savings deposits	54,080		47,866
Money market deposits	56,440		48,494
Time certificates of deposit	13,522		20,223
Wholesale deposits	227,648		348,416
Total deposits	6,207,791		4,979,200
Short-term borrowings	—		—
Long-term borrowings	96,760		98,224
Accrued interest payable	2,068		1,923
Accrued expenses and other liabilities	144,686		165,419
Total liabilities	6,451,305		5,244,766

STOCKHOLDERS’ EQUITY
Preferred stock, 3,000,000 shares authorized, no shares issued and no shares outstanding at December 31, 2020 and September 30, 2020, respectively	—		—
Common stock, $0.01 par value; 90,000,000 shares authorized, 32,817,626 and 34,479,164 shares issued, 32,620,251 and 34,360,890 shares outstanding at December 31, 2020 and September 30, 2020, respectively	326		344
Common stock, Nonvoting, $0.01 par value; 3,000,000 shares authorized, no shares issued, none outstanding at December 31, 2020 and September 30, 2020, respectively	—		—
Additional paid-in capital	598,669		594,569
Retained earnings	198,000		234,927
Accumulated other comprehensive income	20,119		17,542
Treasury stock, at cost, 197,375 and 118,274 common shares at December 31, 2020 and September 30, 2020, respectively	(5,440)		(3,677)
Total equity attributable to parent	811,674		843,705
Noncontrolling interest	1,536		3,603
Total stockholders’ equity	813,210		847,308

Total liabilities and stockholders’ equity	$	7,264,515	$	6,092,074

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

META FINANCIAL GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)


	Three Months Ended December 31,
(Dollars in Thousands, Except Share and Per Share Data)		2020		2019
Interest and dividend income:
Loans and leases, including fees		$	61,655	$	68,702
Mortgage-backed securities		2,123		2,389
Other investments		4,368		6,534
		68,146		77,625
Interest expense:
Deposits		797		9,340
FHLB advances and other borrowings		1,350		3,634
		2,147		12,974

Net interest income		65,999		64,651

Provision for credit losses		6,089		3,407

Net interest income after provision for credit losses		59,910		61,244

Noninterest income:
Refund transfer product fees		647		192
Tax advance product fees		1,960		2,276
Payment card and deposit fees		22,564		21,499
Other bank and deposit fees		237		487
Rental income		9,885		12,351


Gain (loss) on sale of other		2,847		(2,568)
Other income		7,315		3,246
Total noninterest income		45,455		37,483

Noninterest expense:
Compensation and benefits		32,331		34,268
Refund transfer product expense		61		173
Tax advance product expense		370		1,132
Card processing		6,117		5,607
Occupancy and equipment expense		6,888		6,655
Operating lease equipment depreciation		7,581		8,280
Legal and consulting		5,247		4,674
Intangible amortization		2,013		2,676
Impairment expense		1,159		242
Other expense		10,808		12,091
Total noninterest expense		72,575		75,798

Income before income tax expense		32,790		22,929

Income tax expense		3,533		680

Net income before noncontrolling interest		29,257		22,249
Net income attributable to noncontrolling interest		1,220		1,181
Net income attributable to parent		$	28,037	$	21,068

Earnings per common share
Basic		$	0.84	$	0.56
Diluted		$	0.84	$	0.56

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

META FINANCIAL GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended December 31,
(Dollars in Thousands)	2020		2019
Net income before noncontrolling interest	$	29,257	$	22,249

Other comprehensive income (loss):
Change in net unrealized gain (loss) on debt securities	2,846		(3,412)

	2,846		(3,412)
Unrealized gain on currency translation	445		116
Deferred income tax effect	714		(852)
Total other comprehensive income (loss)	2,577		(2,444)
Total comprehensive income	31,834		19,805
Total comprehensive income attributable to noncontrolling interest	1,220		1,181
Comprehensive income attributable to parent	$	30,614	$	18,624

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

META FINANCIAL GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)


(Dollars in Thousands, Except Share and Per Share Data)	Meta Financial Group, Inc. Stockholders' Equity
Three Months Ended December 31, 2020	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss), Net of Tax		Treasury Stock		Total Meta Stockholders’ Equity		Noncontrolling Interest		Total Equity
Balance, September 30, 2020	$	344	$	594,569	$	234,927	$	17,542	$	(3,677)	$	843,705	$	3,603	$	847,308
Adoption of Accounting Standards Update 2016-13, net of income taxes	—		—		(8,351)		—		—		(8,351)		(2,452)		(10,803)
Cash dividends declared on common stock ($0.05 per share)	—		—		(1,613)		—		—		(1,613)		—		(1,613)


Issuance of common shares due to ESOP	2		3,034		—		—		—		3,036		—		3,036
Shares repurchased	(20)		20		(55,000)		—		(1,763)		(56,763)		—		(56,763)

Stock compensation	—		1,046		—		—		—		1,046		—		1,046
Total other comprehensive income	—		—		—		2,577		—		2,577		—		2,577
Net income	—		—		28,037		—		—		28,037		1,220		29,257
Net investment by (distribution to) noncontrolling interests	—		—		—		—		—		—		(835)		(835)
Balance, December 31, 2020	$	326	$	598,669	$	198,000	$	20,119	$	(5,440)	$	811,674	$	1,536	$	813,210


(Dollars in Thousands, Except Share and Per Share Data)	Meta Financial Group, Inc. Stockholders' Equity
Three Months Ended December 31, 2019	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Meta Stockholders’ Equity		Noncontrolling Interest		Total Equity
Balance, September 30, 2019	$	378	$	580,826	$	252,813	$	6,339	$	(445)	$	839,911	$	4,047	$	843,958
Cash dividends declared on common stock ($0.05 per share)	—		—		(1,870)		—		—		(1,870)		—		(1,870)
Issuance of common shares due to exercise of stock options	—