cash-20210427
0000907471false00009074712021-04-272021-04-27



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

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): April 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 April 27, 2021, the Registrant issued a press release announcing its results of operations and financial condition as of and for the three and six months ended March 31, 2021. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated into this Item 2.02 by reference.

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

Item 7.01    Regulation FD Disclosure.

Information is being furnished herein in Exhibit 99.2 with respect to the Investor Update slide presentation prepared for use with the press release. While most of the selected financial information furnished herein is derived from the Company’s consolidated financial statements and related notes prepared in accordance with generally accepted accounting principles ("GAAP") and management’s discussion and analysis of financial condition and results of operations included, or to be included, in the Company’s reports on Forms 10-K and 10-Q, this information includes selected financial and operational information through the second quarter of fiscal year 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 April 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 April 27, 2021 regarding the results of operations and financial condition.
Investor Update slide presentation for the Second Quarter of Fiscal Year 2021, dated April 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: April 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/2906dcbb4ef51c3a997496c10fbb3924-metalogoa201a.jpg
META FINANCIAL GROUP, INC.® ANNOUNCES RESULTS FOR 2021 FISCAL SECOND QUARTER
- Earnings Per Share Increased 27% Year-over-Year to $1.84
Sioux Falls, S.D., April 27, 2021 (GLOBE NEWSWIRE) -- Meta Financial Group, Inc.® (Nasdaq: CASH) (“Meta” or the “Company”) reported net income of $59.1 million, or $1.84 per share, for the three months ended March 31, 2021, compared to net income of $52.3 million, or $1.45 per share, for the three months ended March 31, 2020.
“Our Tax Services and Payments businesses and the increased interest income from our Commercial Finance business combined to produce solid second quarter revenue results," said President and CEO Brad Hanson. " We continued to develop our Banking as a Service franchise, including the launch of a new partnership with Walgreens. During the quarter, we distributed cards for the second and third rounds of Economic Impact Payments and further developed our Environmental, Social and Governance efforts, all of which helped advance our mission of financial inclusion for all®."
“We are pleased with our team’s ability to grow core revenues, improve efficiency, and manage credit. Excluding last year’s gain-on-sale from the divestiture of our community bank, we have seen promising fee income growth driven by both new and existing partner relationships in our payments and tax businesses. Our loan and lease portfolios also continued to perform well, reflecting the strength of our lending and collateral management programs," said Executive Vice President and CFO Glen Herrick.
Business Development Highlights for the 2021 Fiscal Second Quarter
Increased revenue included the benefits of H&R Block's suite of financial services products.
Partnered with the U.S. Department of the Treasury's Bureau of the Fiscal Service ("Fiscal Service") to disburse Economic Income Payment ("EIP") stimulus payments through the distribution of prepaid cards. During the quarter, the Company began distributing cards under the authorizations for the second round on January 4, 2021 and for the third round on March 23, 2021.
Selected as the issuing bank for Walgreens' newly launched bank-account product with InComm Payments and MasterCard, adding to MetaBank's diverse suite of Banking as a Service relationships.
Expanded our solar lending business, increasing our solar lending originations for the first six months of the fiscal year 2021 by 65% to $58.5 million.
Dedicated additional resources to our Environmental, Social, and Governance ("ESG") activities to include the hiring of Chief People and Inclusion Officer, Kia Tang.
Financial Highlights for the 2021 Fiscal Second Quarter
Total revenue for the second quarter was $187.3 million, a slight decrease compared to $188.3 million for the same quarter in fiscal 2020, which benefited from the one-time $19.3 million gain on sale from the divestiture of our former Community Bank division.
Operating efficiency ratio was 63.1% at March 31, 2021, compared to 62.9% at March 31, 2020, which benefited from the aforementioned gain on sale of divestiture of the Community Bank division. See non-GAAP reconciliation table below.
Net interest income for the second quarter was $73.9 million, compared to $67.7 million in the comparable quarter last year.
Net interest margin ("NIM") decreased to 3.07% for the second quarter from 4.78% during the same period of last year, chiefly reflecting excess cash associated with the Company's participation in the EIP program, as described further below.
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Total gross loans and leases at March 31, 2021 increased $37.2 million, or 1%, to $3.65 billion, compared to March 31, 2020 and increased $208.5 million, or 6%, when compared to December 31, 2020.
Average deposits from the payments division for the fiscal 2021 second quarter increased nearly 181% to $9.29 billion when compared to the prior year quarter. 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 734,984 shares during the second quarter at an average price of $40.78.
Tax Season
For the 2021 tax season, MetaBank originated $1.79 billion in refund advance loans compared to $1.33 billion during the 2020 tax season.
During the second quarter of the fiscal 2021, total tax services product revenue was $67.0 million, an increase of 17% compared to the second quarter of fiscal 2020.
While the 2021 tax services results have thus far been favorable compared to the prior year's tax season, it has been below the Company's expectations as a result of reduced overall demand for refund advances due to consumers having access to EIP stimulus funds, which have been partially offset by higher payments fee income. We do expect overall tax season refund transfer volumes and revenue to be similar to last year. We believe the impacts to the tax advance product are unique to this tax season and the Company anticipates more normalized results from its H&R Block and Jackson Hewitt relationships will be achieved in the 2022 tax season and beyond. Despite these stimulus-related impacts, total tax services product income, net of losses and direct product expenses, increased 14% when comparing the first six months of fiscal 2021 to the same period of the prior fiscal year.
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 an ongoing role in providing a safe and secure mechanism for individuals, including the underbanked, to receive their stimulus payments. In 2020, the Bank dispensed approximately $6.42 billion of the first round of EIP payments under the Coronavirus Aid, Relief, and Economic Security Act through the distribution of 3.6 million Bank-issued prepaid cards, and earlier this year dispensed approximately $7.10 billion of the second round of EIP payments under the Consolidated Appropriations Act of 2021 through the distribution of 8.1 million Bank-issued prepaid cards.
On March 11, 2021, the U.S. Congress, through the American Rescue Plan Act of 2021, directed the Internal Revenue Service (“IRS”), to distribute a third round of EIP via the U.S. Treasury to persons in the U.S. eligible to receive them. The Bank has entered into an amendment of its existing agreement with the Fiscal Service under which the Bank acts as its Financial Agent 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. Through this third round, the Bank disbursed approximately $10.64 billion of EIP payments through the distribution of 4.7 million Bank-issued prepaid cards.
Through March 31, 2021 the Bank has issued a combined total of 16.5 million prepaid cards totaling approximately $24.15 billion related to three stimulus programs, of which $11.64 billion is still outstanding as of March 31, 2021. Of that balance, only $869.2 million remained on Meta’s balance sheet, as MetaBank has been working with other banks to transfer these temporary deposits off the balance sheet. As of April 21st, 2021 the Bank had $131.0 million in EIP deposit balances outstanding on its balance sheet.
The Company anticipates that participating in the EIP card distribution program will continue to have a slightly positive impact on earnings and it does not expect any material impact on its risk-based capital ratios due to the participation in the card distribution program. Additionally, the Company does not expect these conditions will be sustained over the long-term.
COVID-19 Business Update
As of March 31, 2021, the Company had 576 loans outstanding with total loan balances of $208.6 million originated as part of the Paycheck Protection Program ("PPP"), compared with 612 loans outstanding with total loan balances of $194.3 million for the quarter ended December 31, 2020.
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As of March 31, 2021, $66.5 million of the loans and leases that were granted deferral payments by the Company were still in their deferment period. As of December 31, 2020, loans and leases totaling $84.2 million were within their deferment period.
The Company's capital position remained in good standing as of March 31, 2021, even while continuing to absorb 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.
Net Interest Income
Net interest income for the fiscal 2021 second quarter was $73.9 million, an increase of 9% from the same quarter in fiscal 2020. The increase was primarily driven by a reduction in total interest expense, partially offset by lower overall yields realized on investments and loan and leases.
During the second fiscal quarter of 2021, interest expense decreased $9.8 million, which was partially offset by decreases in loan and lease interest income of $2.0 million and investment securities and cash interest income of $1.7 million, when comparing to the prior year quarter. The quarterly average outstanding balance of loans and leases increased by 8% on a linked quarter basis primarily due to seasonal tax services loans with growth from Term Lending, Asset Based Lending, and SBA/USDA, partially offset by lower community bank loan balances. The Company’s average interest-earning assets for the fiscal 2021 second quarter increased by $4.07 billion, to $9.77 billion compared with the second quarter in fiscal 2020, primarily due to the effects of the EIP program.
NIM decreased to 3.07% for the fiscal 2021 second quarter from 4.78% for the comparable quarter last year. The overall reported tax-equivalent yield (“TEY”) on average earning asset yields decreased by 249 basis points to 3.15% for the fiscal 2021 second 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 second quarter TEY on the securities portfolio was 1.78% compared to 2.68% for the comparable period last year.
The Company's cost of funds for all deposits and borrowings averaged 0.08% during the fiscal 2021 second quarter, compared to 0.83% during the prior year quarter. This reflected primarily 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 0.02% in the fiscal second quarter of 2021, compared to 0.66% in the same quarter last year.
Noninterest Income
Fiscal 2021 second quarter noninterest income decreased to $113.5 million, compared with $120.5 million for the same period of the prior year. This decrease was primarily due to the $19.3 million gain on divestiture of the Community Bank division, which was recognized during the fiscal 2020 second quarter. Partially offsetting the decrease were increases in total tax product fee income and payment card and deposit fee income.
Noninterest Expense
Noninterest expense increased 5% to $96.0 million for the fiscal 2021 second quarter, from $91.7 million for the same quarter of last year, primarily driven by increases in compensation and benefits due to a return to more normalized incentive accruals and additional employees to support growth.
Income Tax Expense
The Company recorded income tax expense of $1.1 million, representing an effective tax rate of 1.9%, for the fiscal 2021 second quarter, compared to an income tax expense of $5.6 million, representing an effective tax rate of 9.5%, for the second quarter last year.
The Company originated $20.0 million in solar leases during the fiscal 2021 second quarter, compared to $17.6 million during last year's second quarter. The investment tax credit for the second quarter reflected an adjustment to the full fiscal year’s projected investment tax credit volumes, which contributed to the overall reduction in income tax expense compared to the prior year. 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
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March 31, 2021December 31, 2020September 30, 2020June 30, 2020March 31, 2020
Total investments$1,552,892 $1,309,452 $1,360,712 $1,268,416 $1,310,476 
Loans held for sale
Consumer credit products6,233 234 962 391 — 
SBA/USDA61,402 32,983 52,542 31,438 13,610 
Community Bank— 100,442 130,073 48,076 — 
Total loans held for sale67,635 133,659 183,577 79,905 13,610 
National Lending
Term lending891,414 881,306 805,323 738,454 725,581 
Asset based lending248,735 242,298 182,419 181,130 250,211 
Factoring277,612 275,650 281,173 206,361 285,495 
Lease financing308,169 283,722 281,084 264,988 238,788 
Insurance premium finance344,841 338,227 337,940 359,147 332,800 
SBA/USDA331,917 300,707 318,387 308,611 92,000 
Other commercial finance103,234 101,209 101,658 100,214 101,472 
Commercial Finance2,505,922 2,423,119 2,307,984 2,158,905 2,026,347 
Consumer credit products104,842 88,595 89,809 102,808 113,544 
Other consumer finance130,822 162,423 134,342 138,777 144,895 
Consumer Finance235,664 251,018 224,151 241,585 258,439 
Tax Services225,921 92,548 3,066 19,168 95,936 
Warehouse Finance332,456 318,937 293,375 277,614 333,829 
Total National Lending loans and leases3,299,963 3,085,622 2,828,576 2,697,272 2,714,551 
Community Banking
Commercial real estate and operating335,587 339,141 457,371 608,303 654,429 
Consumer one-to-four family real estate and other4,567 5,077 16,486 166,479 205,046 
Agricultural real estate and operating7,911 9,724 11,707 24,655 36,759 
Total Community Banking loans348,065 353,942 485,564 799,437 896,234 
Total gross loans and leases3,648,028 3,439,564 3,314,140 3,496,709 3,610,785 
Allowance for credit losses(98,892)(72,389)(56,188)(65,747)(65,355)
Net deferred loan and lease origination fees9,503 9,111 8,625 5,937 8,139 
Total loans and leases, net of allowance$3,558,639 $3,376,286 $3,266,577 $3,436,899 $3,553,569 

The Company's investment security balances at March 31, 2021 totaled $1.55 billion, as compared to $1.31 billion at December 31, 2020 and $1.31 billion at March 31, 2020.
Total gross loans and leases increased $37.2 million, or 1%, to $3.65 billion at March 31, 2021, from $3.61 billion at March 31, 2020. The increase was primarily driven by growth in the commercial finance and tax services portfolios partially offset by the continued decrease in community bank loan balances.
At March 31, 2021, commercial finance loans, which comprised 69% of the Company's gross loan and lease portfolio, totaled $2.51 billion, reflecting growth of $82.8 million, or 3%, from December 31, 2020. The increase in commercial finance loans was primarily due to increases in SBA/USDA loans and lease financing of $31.2 million and $24.4 million, respectively, along with slight increases spread across several of the other commercial finance categories.
Consumer finance loans totaled $235.7 million as of March 31, 2021, decreasing as compared to $251.0 million at December 31, 2020 and $258.4 million at March 31, 2020. This decrease was primarily driven by other consumer finance, which includes student loans and the seasonal lending products for tax customers associated with Emerald Financial Services.
Tax services loans totaled $225.9 million as of March 31, 2021, increasing as compared to $92.5 million at December 31, 2020 and $95.9 million at March 31, 2020, as the Company originated seasonal taxpayer advances
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and electronic return originator ("ERO") loans during the fiscal 2021 second quarter. Warehouse finance loans totaled $332.5 million at March 31, 2021, a 4% increase from December 31, 2020.
Community bank loans held for investment totaled $348.1 million as of March 31, 2021, decreasing as compared to $353.9 million at December 31, 2020 and $896.2 million at March 31, 2020. As of March 31, 2021, the Company had no community bank loans classified as held for sale.
Asset Quality
The Company’s allowance for credit losses totaled $98.9 million at March 31, 2021, increasing compared to $72.4 million at December 31, 2020 and $65.4 million at March 31, 2020. The increase in the allowance at March 31, 2021 when compared to December 31, 2020, was primarily due to the seasonal tax services loan portfolio, which increased $27.7 million during the fiscal 2021 second quarter.
The year-over-year increase in the allowance was primarily driven by a $18.5 million increase within the commercial finance portfolio, a $7.8 million increase in tax services, a $6.6 million increase in the consumer finance portfolio and a $0.7 million increase within the retained community banking portfolio. These increases were primarily driven by a combination of year-over-year loan growth and the adoption of the current expected credit losses ("CECL") accounting standard, which required a day one entry to increase the allowance for credit losses in the amount of $12.8 million effective October 1, 2020.
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)March 31, 2021December 31, 2020
October 1, 2020(1)
September 30, 2020June 30, 2020March 31, 2020
Commercial finance1.77 %1.88 %1.85 %1.30 %1.36 %1.28 %
Consumer finance4.70 %4.39 %4.31 %1.64 %1.75 %1.74 %
Tax services12.90 %1.53 %0.06 %0.06 %59.67 %22.22 %
Warehouse finance0.10 %0.10 %0.10 %0.10 %0.10 %0.10 %
National Lending2.57 %1.89 %1.86 %1.20 %1.68 %1.92 %
Community Bank4.03 %4.01 %3.37 %4.59 %2.55 %1.49 %
Total loans and leases2.71 %2.10 %2.08 %1.70 %1.88 %1.81 %
(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 2.71% at March 31, 2021 from 2.10% at December 31, 2020. The increase in the total loans and leases coverage ratio was primarily driven by the seasonal tax services loan portfolio. The coverage ratios for the other non-tax-related loan categories remained relatively similar to the December 31, 2020 quarter. The change in the year-over-year tax services coverage ratio is primarily due to higher outstanding principal balances as of March 31, 2021 due in large part to the delayed start to the 2021 tax season. 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.
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Activity in the allowance for credit losses for the periods presented was as follows.
(Unaudited)Three Months EndedSix Months Ended
March 31, 2021December 31, 2020March 31, 2020March 31, 2021March 31, 2020
(Dollars in thousands)
Beginning balance$72,389 $56,188 $30,176 $56,188 $29,149 
Adoption of CECL accounting standard— 12,773 — 12,773 — 
Provision - tax services loans27,680 454 19,596 28,134 20,507 
Provision - all other loans and leases2,519 5,810 17,700 8,329 20,196 
Charge-offs - tax services loans— — — — — 
Charge-offs - all other loans and leases(4,248)(5,675)(3,187)(9,923)(7,105)
Recoveries - tax services loans54 956 74 1,010 813 
Recoveries - all other loans and leases498 1,883 996 2,381 1,795 
Ending balance$98,892 $72,389 $65,355 $98,892 $65,355 

Provision for credit losses was $30.3 million for the quarter ended March 31, 2021, compared to $37.3 million for the comparable period in the prior fiscal year. The decrease in the overall provision compared to the prior year was due in large part to the increase in the allowance as part of the Company's response to the emerging COVID-19 pandemic during the second quarter of fiscal 2020. Partially offsetting that decrease was an increase in provision expense related to originating higher volumes of tax services loans for the second quarter of fiscal 2021, compared to the comparable quarter of the prior year. Net charge-offs were $3.7 million for the quarter ended March 31, 2021, compared to $2.1 million for the quarter ended March 31, 2020. The majority of the net charge-offs for the quarter were in the commercial finance portfolio.
The Company's past due loans and leases were as follows for the periods presented.
As of March 31, 2021Accruing 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$34,675 $8,730 $9,488 $52,893 $2,453,029 $2,505,922 $4,810 $18,305 $23,115 
Consumer finance2,033 4,162 2,294 8,489 227,175 235,664 517 — 517 
Tax services507 — — 507 225,414 225,921 — — — 
Warehouse finance— — — — 332,456 332,456 — — — 
Total National Lending37,215 12,892 11,782 61,889 3,238,074 3,299,963 5,327 18,305 23,632 
Total Community Banking12 — 1,818 1,830 346,235 348,065 — 19,824 19,824 
Total loans and leases held for investment$37,227 $12,892 $13,600 $63,719 $3,584,309 $3,648,028 $5,327 $38,129 $43,456 

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As of December 31, 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$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 

The Company's nonperforming assets at March 31, 2021 were $46.7 million, representing 0.48% of total assets, compared to $53.2 million, or 0.73% of total assets at December 31, 2020 and $39.4 million, or 0.67% of total assets at March 31, 2020. The decrease in nonperforming assets on a linked quarter basis was primarily driven by a $5.7 million reduction in commercial finance repossessed and foreclosed assets and a $1.9 million decrease in nonperforming operating leases, which were partially offset by a $2.3 million increase in the commercial finance nonperforming loans and leases when compared to December 31, 2020. The improvement in nonperforming assets as a percentage of total assets at March 31, 2021 was due to a combination of the lower nonperforming assets along with higher period-end assets, when compared to December 31, 2020.
The Company's nonperforming loans and leases at March 31, 2021, were $43.5 million, representing 1.17% of total gross loans and leases, compared to $42.3 million, or 1.18% of total gross loans and leases at December 31, 2020 and $31.5 million, or 0.87% of total gross loans and leases at March 31, 2020.
Loan and lease balances that were within their active deferment period decreased to $66.5 million at March 31, 2021 from $84.2 million at December 31, 2020.
Deposits, Borrowings and Other Liabilities
Total average deposits for the fiscal 2021 second quarter increased by $4.51 billion to $9.57 billion compared to the same period in fiscal 2020, primarily due to the EIP program. Average noninterest-bearing deposits increased $5.77 billion, or 180%, for the fiscal 2021 second quarter when compared to the same period in fiscal 2020, while average wholesale deposits decreased $1.30 billion, or 88%. Average deposits from the payments division increased 181% to $9.29 billion for the fiscal 2021 second quarter when compared to the same period in fiscal 2020. Excluding the balances on the EIP cards, average payments deposits for the fiscal 2021 second quarter were $6.43 billion, representing an increase of 100% compared to the same period of the prior year, which was largely driven by other stimulus payments loaded on various partner cards.
The average balance of total deposits and interest-bearing liabilities was $9.66 billion for the three-month period ended March 31, 2021, compared to $5.64 billion for the same period in the prior fiscal year, representing an increase of 71%.
Total end-of-period deposits increased 118% to $8.64 billion at March 31, 2021, compared to $3.96 billion at March 31, 2020. The increase in end-of-period deposits was primarily driven by an increase in noninterest-bearing deposits of $5.03 billion, of which $869.2 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 $705.5 million in wholesale deposits.
Regulatory Capital
The Company and MetaBank remained above the federal regulatory minimum capital requirements at March 31, 2021, continued to be classified as well-capitalized, and in good standing with the regulatory agencies. A temporary exemption was granted by the Office of the Comptroller of the Currency related to the financial impacts of distributing prepaid debit cards as part of the EIP program. Regulatory capital ratios of the Company and the Bank are stated in the table below.
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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
March 31, 2021(1)
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
Company
Tier 1 leverage capital ratio4.75 %7.39 %6.58 %5.91 %7.28 %
Common equity Tier 1 capital ratio11.24 %10.72 %11.78 %11.51 %10.27 %
Tier 1 capital ratio 11.58 %11.07 %12.18 %11.90 %10.63 %
Total capital ratio14.59 %14.14 %15.30 %14.99 %13.61 %
MetaBank
Tier 1 leverage capital ratio5.47 %8.60 %7.56 %6.89 %8.52 %
Common equity Tier 1 capital ratio13.32 %12.87 %13.96 %13.82 %12.39 %
Tier 1 capital ratio 13.33 %12.89 %14.00 %13.86 %12.44 %
Total capital ratio14.60 %14.14 %15.26 %15.12 %13.69 %
(1) March 31, 2021 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.

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)
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
(Dollars in Thousands)
Total stockholders' equity$835,258 $813,210 $847,308 $829,909 $805,074 
Adjustments:
LESS: Goodwill, net of associated deferred tax liabilities301,602 301,999 302,396 302,814 303,625 
LESS: Certain other intangible assets36,779 39,403 40,964 42,865 44,909 
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards19,306 24,105 18,361 10,360 11,589 
LESS: Net unrealized gains (losses) on available-for-sale securities12,458 19,894 17,762 8,382 2,337 
LESS: Non-controlling interest1,092 1,536 3,603 3,787 3,762 
ADD: Adoption of Accounting Standards Update 2016-1310,439 10,439 — — — 
Common Equity Tier 1(1)
474,460 436,712 464,222 461,701 438,852 
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 capital690 749 1,894 1,894 2,036 
Total Tier 1 Capital488,811 451,122 479,777 477,256 454,549 
Allowance for credit losses53,232 51,070 49,343 50,338 53,580 
Subordinated debentures (net of issuance costs)73,892 73,850 73,807 73,765 73,724 
Total qualifying capital$615,935 $576,042 $602,927 $601,359 $581,853 
(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.
8



March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
(Dollars in Thousands)
Total Stockholders' Equity$835,258 $813,210 $847,308 $829,909 $805,074 
Less: Goodwill309,505 309,505 309,505 309,505 309,505 
Less: Intangible assets36,903 39,660 41,692 43,974 46,766 
     Tangible common equity488,850 464,045 496,111 476,430 448,803 
Less: Accumulated other comprehensive income (loss) ("AOCI")12,809 20,119 17,542 7,995 1,654 
     Tangible common equity excluding AOCI$476,041 $443,926 $478,569 $468,435 $447,149 


Conference Call
The Company will host a conference call and earnings webcast at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) on Tuesday, April 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 6896972 upon request. International callers should dial (636) 812-6634. A webcast replay will also be archived at www.metafinancialgroup.com for one year.

Upcoming Investor Events
Piper Sandler Fintech and Payments Conference, June 10, 2021 | Virtual

9


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; 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.
10


Condensed Consolidated Statements of Financial Condition (Unaudited)
(Dollars in Thousands, Except Share Data)
ASSETSMarch 31, 2021December 31, 2020September 30, 2020June 30, 2020March 31, 2020
Cash and cash equivalents$3,724,242 $1,586,451 $427,367 $3,108,141 $108,733 
Investment securities available for sale, at fair value921,947 797,363 814,495 825,579 840,525 
Mortgage-backed securities available for sale, at fair value558,833 430,761 453,607 338,250 355,094 
Investment securities held to maturity, at cost67,709 76,176 87,183 98,205 108,105 
Mortgage-backed securities held to maturity, at cost4,403 5,152 5,427 6,382 6,752 
Loans held for sale67,635 133,659 183,577 79,905 13,610 
Loans and leases3,657,531 3,448,675 3,322,765 3,502,646 3,618,924 
Allowance for credit losses(98,892)(72,389)(56,188)(65,747)(65,355)
Federal Reserve Bank and Federal Home Loan Bank stocks, at cost28,433 27,138 27,138 31,836 29,944 
Accrued interest receivable17,429 17,133 16,628 17,545 16,958 
Premises, furniture, and equipment, net41,510 39,932 41,608 40,361 38,871 
Rental equipment, net211,397 206,732 205,964 216,336 200,837 
Bank-owned life insurance93,542 92,937 92,315 91,697 91,081 
Foreclosed real estate and repossessed assets1,483 7,186 9,957 6,784 7,249 
Goodwill309,505 309,505 309,505 309,505 309,505 
Intangible assets36,903 39,660 41,692 43,974 46,766 
Prepaid assets10,201 11,270 8,328 6,806 9,727 
Deferred taxes25,435 24,411 17,723 15,944 20,887 
Other assets110,877 82,763 82,983 104,877 85,652 
Total assets$9,790,123 $7,264,515 $6,092,074 $8,779,026 $5,843,865 
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits:
Noninterest-bearing checking7,928,235 5,581,597 4,356,630 6,537,809 2,900,484 
Interest-bearing checking416,164 274,504 157,571 187,003 152,504 
Savings deposits126,834 54,080 47,866 55,896 37,615 
Money market deposits55,045 56,440 48,494 40,811 37,266 
Time certificates of deposit12,614 13,522 20,223 25,000 25,492 
Wholesale deposits103,521 227,648 348,416 743,806 809,043 
Total deposits8,642,413 6,207,791 4,979,200 7,590,325 3,962,404 
Short-term borrowings— — — — 717,000 
Long-term borrowings95,336 96,760 98,224 209,781 211,353 
Accrued interest payable679 2,068 1,923 4,332 3,607 
Accrued expenses and other liabilities216,437 144,686 165,419 144,679 144,427 
Total liabilities8,954,865 6,451,305 5,244,766 7,949,117 5,038,791 
STOCKHOLDERS’ EQUITY 
Preferred stock— — — — — 
Common stock, $.01 par value319 326 344 346 346 
Common stock, Nonvoting, $.01 par value— — — — — 
Additional paid-in capital601,222 598,669 594,569 592,693 590,682 
Retained earnings225,471 198,000 234,927 228,500 212,027 
Accumulated other comprehensive income12,809 20,119 17,542 7,995 1,654 
Treasury stock, at cost(5,655)(5,440)(3,677)(3,412)(3,397)
Total equity attributable to parent834,166 811,674 843,705 826,122 801,312 
Noncontrolling interest1,092 1,536 3,603 3,787 3,762 
Total stockholders’ equity835,258 813,210 847,308 829,909 805,074 
Total liabilities and stockholders’ equity$9,790,123 $7,264,515 $6,092,074 $8,779,026 $5,843,865 
11


Consolidated Statements of Operations (Unaudited)
(Dollars in Thousands, Except Share and Per Share Data)
 Three Months EndedYear Ended
March 31, 2021December 31, 2020March 31, 2020March 31,
2021
March 31,
2020
Interest and dividend income:   
Loans and leases, including fees$68,472 $61,655 $70,493 $130,128 $139,195 
Mortgage-backed securities2,608 2,123 2,493 4,730 4,882 
Other investments4,589 4,368 6,417 8,956 12,952 
 75,669 68,146 79,403 143,814 157,029 
Interest expense:  
Deposits445 797 8,242 1,241 17,583 
FHLB advances and other borrowings1,374 1,350 3,424 2,724 7,058 
 1,819 2,147 11,666 3,965 24,641 
Net interest income73,850 65,999 67,737 139,849 132,388 
Provision for credit losses30,290 6,089 37,296 36,379 40,703 
Net interest income after provision for loan and lease losses43,560 59,910 30,441 103,470 91,685 
Noninterest income:    
Refund transfer product fees22,680 647 28,939 23,327 29,131 
Tax advance product fees44,562 1,960 29,536 46,522 31,812 
Payments card and deposit fees29,875 22,564 23,156 52,439 44,655 
Other bank and deposit fees133 237 381 370 868 
Rental income9,846 9,885 11,100 19,731 23,451 
Gain on sale of securities available-for-sale, net— — — 
Gain on divestitures— — 19,275 — 19,275 
Gain (loss) on sale of other2,133 2,847 2,325 4,981 (244)
Other income4,218 7,315 5,801 11,532 9,047 
Total noninterest income113,453 45,455 120,513 158,908 157,995 
Noninterest expense:    
Compensation and benefits43,932 32,331 34,260 76,263 68,529 
Refund transfer product expense6,146 61 7,449 6,207 7,621 
Tax advance product expense2,189 370 1,698 2,559 2,830 
Card processing 7,212 6,117 6,696 13,329 12,303 
Occupancy and equipment expense6,748 6,888 7,013 13,636 13,668 
Operating lease equipment depreciation7,419 7,581 8,421 15,000 16,701 
Legal and consulting6,045 5,247 5,909 11,292 10,583 
Intangible amortization2,757 2,013 3,402 4,770 6,077 
Impairment expense554 1,159 507 1,713 750 
Other expense12,969 10,808 16,374 23,777 28,464 
Total noninterest expense95,971 72,575 91,729 168,546 167,526 
Income before income tax expense61,042 32,790 59,225 93,832 82,154 
Income tax expense1,133 3,533 5,617 4,665 6,297 
Net income before noncontrolling interest59,909 29,257 53,608 89,167 75,857 
Net income attributable to noncontrolling interest843 1,220 1,304 2,064 2,485 
Net income attributable to parent$59,066 $28,037 $52,304 $87,103 $73,372 
Less: Allocation of Earnings to participating securities(1)
1,1135541,2151,6831,652
Net income attributable to common shareholders(1)
57,95327,48351,08985,42071,720
Earnings per common share  
Basic$1.84 $0.84 $1.45 $2.66 $2.00 
Diluted$1.84 $0.84 $1.45 $2.65 $2.00 
Shares used in computing earnings per common share
Basic31,520,505 32,782,285 35,114,053 32,158,994 35,865,443 
Diluted31,535,022 32,790,895 35,135,550 32,175,484 35,887,077 
(1) Amounts presented are used in the two-class earnings per common share calculation.
12


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 March 31,20212020
(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$4,187,558 $1,090 0.11 %$196,754 $739 1.51 %
Mortgage-backed securities543,256 2,607 1.95 %358,103 2,493 2.80 %
Tax exempt investment securities297,299 1,132 1.96 %454,177 2,132 2.39 %
Asset-backed securities389,406 1,290 1.34 %304,674 2,271 3.00 %
Other investment securities230,168 1,077 1.90 %192,379 1,275 2.67 %
Total investments1,460,129 6,106 1.78 %1,309,333 8,171 2.68 %
Commercial finance loans and leases2,471,694 46,299 7.60 %2,020,358 41,643 8.29 %
Consumer finance loans255,625 6,968 11.06 %264,307 5,386 8.20 %
Tax services loans714,789 6,544 3.71 %516,491 6,351 4.95 %
Warehouse finance loans315,162 4,845 6.23 %314,474 4,785 6.12 %
National lending loans and leases3,757,270 64,656 6.98 %3,115,630 58,165 7.51 %
Community banking loans363,285 3,817 4.26 %1,080,142 12,328 4.59 %
Total loans and leases4,120,555 68,473 6.74 %4,195,772 70,493 6.76 %
Total interest-earning assets$9,768,242 $75,669 3.15 %$5,701,859 $79,403 5.64 %
Non-interest-earning assets887,610 909,040 
Total assets$10,655,852 $6,610,899 
Interest-bearing liabilities:
Interest-bearing checking(2)
$275,982 $— — %$182,107 $105 0.23 %
Savings deposits77,562 0.02 %46,592 0.05 %
Money market deposits 56,352 42 0.30 %68,421 153 0.90 %
Time certificates of deposit12,820 34 1.07 %84,940 427 2.02 %
Wholesale deposits175,777 365 0.84 %1,476,085 7,551 2.06 %
Total interest-bearing deposits598,493 445 0.30 %1,858,145 8,242 1.78 %
Overnight fed funds purchased— — — %372,596 1,307 1.41 %
FHLB advances— — — %110,000 670 2.45 %
Subordinated debentures73,864 1,147 6.30 %73,698 1,158 6.32 %
Other borrowings22,377 227 4.12 %28,714 289 4.04 %
Total borrowings96,241 1,374 5.79 %585,008 3,424 2.35 %
Total interest-bearing liabilities694,734 1,819 1.06 %2,443,153 11,666 1.92 %
Noninterest-bearing deposits8,967,067 — — %3,199,148 — — %
Total deposits and interest-bearing liabilities$9,661,801 $1,819 0.08 %$5,642,301 $11,666 0.83 %
Other noninterest-bearing liabilities177,372 136,759 
Total liabilities9,839,173 5,779,060 
Shareholders' equity816,679 831,839 
Total liabilities and shareholders' equity$10,655,852 $6,610,899 
Net interest income and net interest rate spread including noninterest-bearing deposits$73,850 3.08 %$67,737 4.81 %
Net interest margin3.07 %4.78 %
Tax-equivalent effect0.01 %0.04 %
Net interest margin, tax-equivalent(3)
3.08 %4.82 %
(1) Tax rate used to arrive at the TEY for the three months ended March 31, 2021 and 2020 was 21%.
(2) Of the total balance, $275.7 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.
13



Selected Financial Information
As of and For the Three Months EndedMarch 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
Equity to total assets8.53 %11.19 %13.91 %9.45 %13.78 %
Book value per common share outstanding$26.16 $24.93 $24.66 $23.96 $23.26 
Tangible book value per common share outstanding$15.31 $14.23 $14.44 $13.76 $12.97 
Tangible book value per common share outstanding excluding AOCI$14.91 $13.61 $13.93 $13.53 $12.92 
Common shares outstanding31,926,008 32,620,251 34,360,890 34,631,160 34,607,962 
Nonperforming assets to total assets0.48 %0.73 %0.79 %0.64 %0.67 %
Nonperforming loans and leases to total loans and leases1.17 %1.18 %0.97 %1.10 %0.87 %
Net interest margin3.07 %4.65 %3.77 %3.28 %4.78 %
Net interest margin, tax-equivalent3.08 %4.67 %3.79 %3.31 %4.82 %
Return on average assets2.22 %1.73 %0.69 %0.86 %3.16 %
Return on average equity28.93 %13.91 %6.21 %8.83 %25.15 %
Full-time equivalent employees1,075 1,038 1,015 999 992 


Non-GAAP Reconciliation
Efficiency RatioFor the last twelve months ended
(Dollars in Thousands)March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
Noninterest Expense - GAAP$320,070 $315,828 $319,051 $314,911 $316,138 
Net Interest Income266,499 260,386 259,038 260,142 264,973 
Noninterest Income240,706 247,766 239,794 235,024 237,766 
Total Revenue: GAAP$507,205 $508,152 $498,832 $495,166 $502,739 
Efficiency Ratio, last twelve months63.10 %62.15 %63.96 %63.60 %62.88 %



14


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 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
605-362-2423
bkelley@metabank.com
Media Relations Contact
mediarelations@metabank.com

15
a2qfy21investordeck_0427
Q U A R T E R LY I N V E STO R U P D AT E S E C O N D Q U A R T E R F I S C A L Y E A R 2 0 2 1


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH F O R WA R D - LO O K I N G STAT E M E N TS 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, 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 | SECOND 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 P A 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®.


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH B A N K I N G A S A S E R V I C E ( “ B a a S ” ) 4 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 RO 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 issuing prepaid cards, deposit accounts, and payment related transactions to consumers. Directly 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 EM 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®. 47% Net Interest Income $266.5 Payments Fee Income $95.2 Tax Product Income $76.8 Rental Income $41.1 Other Income $27.6 R E V E N U E M A K E U P L A S T T W E L V E M O N T H S E N D I N G M A R C H 3 1 , 2 0 2 1 ($ in millions) Noninterest Income as a percent of Total Revenue in LTM ending March 31, 2021


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH5 INCREASE PERCENTAGE OF FUNDING FROM CORE DEPOSITS OPTIMIZE INTEREST- EARNING ASSET MIX IMPROVE OPERATING EFFICIENCIES Efficiency ratio 63.1% • Continuing to drive 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 13% AND 27%, RESPECTIVELY Executing large, national programs leveraging Meta’s scale • Successfully launched H&R Block’s suite of financial services products. • Selected as issuing bank to distribute Economic Impact Payments (“EIP”) on prepaid debit cards. • Launched Walgreen’s new bank- account product with InComm Payments and MasterCard® RETURNED CAPITAL BY REPURCHASING 734,984 SHARES IN THE SECOND QU ARTER OF FISCAL 2021 Focus on commercial finance business lines • Grew commercial finance loans by $82.8 million, 3%, from the linked-quarter • Community bank loans reduced to $348 million S E C O N D Q UA R T E R B U S I N E S S H I G H L I G H TS & K E Y ST R AT E G I C I N I T I AT I V E S ✓ ✓✓


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH6 F E E I N C O M E D R I V E S P RO F I TA B I L I T Y S E C O N D Q U A R T E R E N D E D M A R C H 3 1 , 2 0 2 1 INCOME STATEMENT ($ in thousands, except per share data) 2Q21 1Q21 2Q20 Net interest income 73,850 65,999 67,737 Provision for credit losses 30,290 6,089 37,296 Payments card & deposit fees 29,875 22,564 23,156 Tax product fee income 67,242 2,607 58,475 Total noninterest income 113,453 45,455 120,513 Total noninterest expense 95,971 72,575 91,729 Net income before taxes 61,042 32,790 59,225 Income tax expense 1,133 3,533 5,617 Net income before non-controlling interest 59,909 29,257 53,608 Net income attributable to non-controlling interest 843 1,220 1,304 Net income attributable to parent $ 59,066 $ 28,037 $ 52,304 Less: Allocation of earnings to participating securities1 1,113 554 1,215 Net income attributable to common shareholders1 57,953 27,483 51,089 Earnings per share, diluted $ 1.84 $ 0.84 $ 1.45 Average diluted shares 31,535,022 32,790,895 35,135,550 • Revenue of $187.3 million, a 1% decrease compared to $188.3 million for the same quarter in fiscal 2020. – Revenue increased 11% when excluding the $19.3 million gain on sale of divestiture of the Community Bank division in the second quarter of fiscal 2020. • Noninterest expense increased 5% to $96.0 million for the fiscal 2021 second quarter, from $91.7 million for the same quarter of last year – Driven by increases in compensation and benefits due to a return to more normalized incentive accruals and additional employees to support growth. • Earnings per share increased 27% year-over-year to $1.84. 1 Amounts presented are used in the two-class earnings per common share calculation.


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH7 S E L E C T E D B A L A N C E S H E E T H I G H L I G H TS S E C O N D Q U A R T E R E N D E D M A R C H 3 1 , 2 0 2 1 BALANCE SHEET PERIOD ENDING AVERAGE ($ in thousands) 2Q21 1Q21 2Q20 2Q21 2Q20 Cash and cash equivalents 3,724,242 1,586,451 108,733 4,187,558 196,754 Loans and leases (HFI) 3,657,531 3,448,675 3,618,924 4,120,555 4,195,772 Allowance for credit losses (98,892) (72,389) (65,355) (86,591) (41,537) Total assets $ 9,790,123 $ 7,264,515 $ 5,843,865 $ 10,655,852 $ 6,610,899 Noninterest-bearing checking 7,928,235 5,581,597 2,900,484 8,967,067 3,199,148 Total deposits 8,642,413 6,207,791 3,962,404 9,565,560 5,057,293 Total liabilities 8,954,865 6,451,305 5,038,791 9,839,173 5,779,060 Total stockholders' equity 835,258 813,210 805,074 816,679 831,839 Total liabilities and stockholders equity $ 9,790,123 $ 7,264,515 $ 5,843,865 $ 10,655,852 $ 6,610,889 Loans / Deposits 42 % 56% 91 % 43 % 83 % Net Interest Margin 3.07 % 4.65% 4.78 % 3.07 % 4.78 % Return on Average Assets 2.22 % 1.73% 3.16 % 2.22 % 3.16 % Return on Average Equity 28.93 % 13.91% 25.15 % 28.93 % 25.15 % • Total gross loans and leases at the end of the second quarter increased $37.2 million, or 1%, to $3.65 billion, compared to the same quarter of the prior year. • Included $208.6 million of Paycheck Protection Program Loans • Average deposits from the payments divisions for the second quarter increased nearly 181% to $9.29 billion driven by the company’s participation in the EIP program, as well as 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 (direct and indirect), and enhanced unemployment benefits that flow through to existing prepaid card programs.


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH 74% 23% 3% 35% 19% 10% 42% 15% 43% D I V E R S I F I E D E A R N I N G AS S E T P O R T FO L I O 8 QUARTERLY AVERAGE EARNING ASSET MIX MAR 2020 $5.70 billion INTEREST EARNING ASSETS 25% 4% 6% MAR 2021 $9.77 billion INTEREST EARNING ASSETS CASH & FED FUNDSINVESTMENTSLOANS & LEASES Commercial Community Bank Consumer & Warehouse % in charts represent % of total interest earning assets ASPIRATIONAL TARGETS >55% 0% <15% At the Quarter Ended March 31, 2021 March 31, 2020 ($ in thousands) 2 Q 2 1 2 Q 2 0 Y/Y Δ COMMERCIAL FINANCE 2,505,922 2,026,347 24% Term lending 891,414 725,581 23% Asset-based lending 248,735 250,211 (1)% Factoring 277,612 285,495 (3)% Lease financing 308,169 238,788 29% Insurance premium finance 344,841 332,800 4% SBA/USDA¹ 331,917 92,000 261% Other commercial finance 103,234 101,472 2% CONSUMER FINANCE 235,664 258,439 (9)% Consumer credit programs 104,842 113,544 (8)% Other consumer finance 130,822 144,895 (10)% TAX SERVICES 225,921 95,936 135% WAREHOUSE FINANCE 332,456 333,829 0% NATIONAL LENDING 3,299,963 2,714,551 22% COMMUNITY BANKING 348,065 896,234 (61)% TOTAL GROSS LOANS & LEASES HFI 3,648,028 3,610,785 1% TOTAL GROSS LOANS & LEASES HFS 67,635 13,610 397% CASH & INVESTMENTS 5,207,223 1,416,095 268% TOTAL EARNING ASSETS 8,922,886 5,040,490 77% RENTAL EQUIPMENT, NET 211,397 200,837 5% 1 Includes balances of $208.6 million in Paycheck Protection Program loans at March 31, 2021.


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH9 E N V I RO N M E N TA L , S O C I A L , A N D G OV E R N A N G E ( “ E S G ” ) Our mission, financial inclusion for all®, 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. HIRED CHIEF PEOPLE AND INCLUSION OFFICER COMPLETED MATERIALITY ASSESSMENT ON TRACK TO PUBLISH ESG ANNUAL REPORT IN FISCAL Q3 P R O G R E S S O N E S G E F F O R T S D U R I N G T H E Q U A R T E R


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH F I N A N C I A L I N C LU S I O N E N A B L I N G B U S I N E S S E S T H R O U G H T H E P AY C H E C K P R O T E C T I O N P R O G R A M 10 more than $300M IN RELIEF more than 18,000 EMPLOYEE JOBS 1,012 LOANS FUNDED $574K AVERAGE LOAN AMOUNT 69% of loans were for LESS THAN $150K 59% of loans went to businesses with FEWER THAN 10 EMPLOYEES 31% of loans went to businesses LOCATED IN CDFI ZONES THROUGH ROUNDS 1 & 2 AS OF MARCH 31, 2021 more than $95M IN FORGIVENESS 43% of Round 1 balances were FORGIVEN


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH BANKING AS A SERVICE 11


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH12 P AY M E N TS B U S I N E S S S O LU T I O N S E N A B L I N G F I N T E C H S A N D F I N S E R V S T H R O U G H B a a S DEPOSIT GENERATORS • Facilitate Transactional Payments including: Faster Payments, ACH, merchant acquiring and ATM sponsorship. • Stable, consistent card usage. • Ranked among Top 25 on Nacha’s 2020 Top ACH Originators & Receivers By Volume. P AY M E N T S B U S I N E S S E S P R O V I D E P R I M A R Y S O U R C E O F D E P O S I T S 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 R E C U R R I N G F E E I N C O M E • Leading prepaid and debit card issuer. • Partner to top program managers and payments brands. • Leader in applying innovative prepaid solutions to address key consumer and business payments needs. • Provide deposit account services for fintech and challenger bank brands. P R O D U C T D I S T R I B U T I O N based on balances as of March 31, 2021 General Purpose Reloadable Loyalty Awards Promotion Gift Payroll 10% 13% 62% 8% Demand Deposit Accounts 7% FEE INCOME DRIVERS


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH $2.45 $2.71 $3.57 $3.31 $6.43 $0.98 $2.86 2018 2019 2020 2Q20 2Q21 Average Payments Deposits ($ in billions) 13 P AY M E N TS B U S I N E S S U P DAT E • Selected as the prepaid debit card issuer for Economic Impact Payments as Treasury’s financial agent. – Disbursed $24.15 billion for the three rounds of EIP on 16.5 million Bank- issued prepaid debit cards. – As of April 21, 2021, $5.34 billion remained outstanding, $131 million on the Company’s balance sheet. – Demonstrates Meta’s ability to work with large-scale programs in an efficient and effective manner. • Total average payments deposits were up 181% year-over-year. – Deposit growth largely associated with government stimulus programs and is expected to be temporary in nature. $23.2 $21.3 $21.4 $22.6 $29.9 2Q20 3Q20 4Q20 1Q21 2Q21 Payments Card and Deposit Fee Income ($ in millions) Percent of Total Revenue 12% 21% 20% 20% 16% 83% 8% 9% Prepaid Deposit Banking Services Banking Services includes ATM, ACH/Faster Payments, Merchant Acquiring Payments Card and Deposit Fee Income Breakout Second Quarter Fiscal 2021 Quarter AverageFiscal Year Average EIP Card Balances EIP Card Balances $9.29 $4.55


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH14 TA X S E AS O N U P DAT E 2 0 2 1 Refund advances (“RAs”) and refund-transfers (“RTs”) leverage BaaS infrastructure and are core to MetaBank’s mission, as they allow consumers quicker access to their money. • RA originations of $1.79 billion compared to $1.33 billion in the 2020 tax season. – 2021 tax season benefited by the addition of H&R Block relationship – Approximate average loan size of $1,323 compared to $1,355 in 2020 • RT volumes and RT product income for the overall tax season expected to be similar to last year. 1 Approximate loss rate calculated by taking provision for loan & lease losses divided by total refund advance originations. TAX SERVICES ECONOMICS Three Months Ended Six Months Ended $ in millions March 31, 2021 March 31, 2020 % Change March 31, 2021 March 31, 2020 % Change Net interest income (expense) (0.29) (1.36) (8)% (0.34) (1.33) (74.8)% Tax advance product income 44.56 29.54 50.9% 46.52 31.81 46.2% RT product income 22.68 28.94 (21.6)% 23.33 29.13 (19.9)% Total revenue $ 66.95 $ 57.12 17.2% $ 69.51 $ 59.61 16.6% Total expense 8.34 9.15 (8.9)% 8.77 10.45 (16.1)% Provision for credit losses 27.68 19.60 41.3% 28.13 20.51 37.2% Net income, pre-tax $ 30.93 $ 28.37 9.1% $ 32.61 $ 28.65 13.8% Total refund advance originations $ 1,727 $ 1,258 37% $ 1,792 $ 1,335 34% Approximate loss rate¹ (6 months) 1.57 % 1.54 % 2% RELATIONSHIPS WITH FRANCHISES (H&R BLOCK, JACKSON HEWITT) RELATIONSHIPS WITH INDEPENDENTS (META TAX) Tax Season at MetaBank ramps up during the first fiscal quarter and peaks during the second fiscal quarter. As a result, performance for the six months ended March 31 is a better reflection on the overall performance for tax season as it alleviates timing differences between quarters.


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH15 M E TA V E N T U R E S | E STA B L I S H E D 2 0 1 7 Formed for the purpose of making strategic minority equity investments¹ in companies or funds in the fintech and financial services industries that are aligned with our mission of financial inclusion for all® and are potential MetaBank customers. ¹Total committed capital is limited to 15% of Risk Based Capital, economics and performances of investments are not material to the Company as of March 31, 2021. $25.9M C O M M I T E D C A P I T A L March 31, 2021 STRATEGY DRIVEN INVESTMENT VERTICALS POTENTIAL PARTNERS | LEAD GENERATION | TECHNOLOGY | ESG 17 T O T A L C O M P A N I E S I N V E S T E D I N INVESTMENTS INCLUDE


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH COMMERCIAL F INANCE & LEGACY COMMUNIT Y BANK PORTFOLIO 16


 
QUARTERLY INVESTOR UPDATE | SECOND 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 $1.8 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 $325 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 $170 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 $208.6 million of PPP loans. Average loan size approximately $770 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 LO A N A N D L E AS E P O R T FO L I O 17 Top geographic state concentrations1 by % 1. California 16.6% 2. Texas 11.1% 3. Michigan 7.5% 4. Florida 6.5% 5. North Carolina 5.1% 6. Illinois 4.6% 7. New York 4.2% 8. Pennsylvania 3.5% 1 Excludes certain joint ventures; percentages calculated based on aggregate principal amount of commercial finance loans and leases includes operating lease rental equipment of $211.4M $2.72 billion COMMERCIAL FINANCE PORTFOLIO (includes Rental Equipment, net) as of March 31, 2021 Asset-Based Lending $248.7M 9.80% SBA/USDA $331.9M 4.69% Other $103.2M 7.41% Factoring $277.6M 14.05% Insurance Premium Finance $344.8M 5.40% Term Lending $891.4M 6.93% 7.60% 2Q21 Quarterly Yield % in chart represents current quarter yield Rental Equipment, net $211.4M NA% Lease Financing $308.2M 8.50% Small ticket equipment financing $263.5M Solar/alternative energy $273.5M Equipment financing $158.8M Wealth management/ insurance $126.1M Other $69.5M


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH D I ST 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 ST RY ¹ 18 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 $211.4M Manufacturing Utilities Transportation and Warehousing Wholesale Trade Finance and Insurance 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 Retail Trade Real Estate and Rental and Leasing 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 $- $100 $200 $300 $400 $500 $ in millions MANUFACTURING 25% Asset-based lending 24% Lease financing 20% Term Lending 11% SBA/USDA 9% Factoring TRANSPORTATION & WAREHOUSING 37% Factoring 28% Term lending 21% Insurance premium finance UTILIT IES 54% Term lending 25% SBA/USDA 15% Rental equipment, net OIL & GAS 36% Term lending 23% SBA/USDA 22% Factoring 9% Lease financing


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH Outstanding Balance % of Total² MANUFACTURING $446.0 11.6% Computer and Electronic Product Manufacturing 67.3 1.7% Fabricated Metal Product Manufacturing 52.1 1.3% Transportation Equipment Manufacturing 48.9 1.3% Machinery Manufacturing 42.8 1.1% Nonmetallic Mineral Product Manufacturing 40.6 1.1% Electrical Equipment, Appliance, and Component Mfg 36.7 1.0% Chemical Manufacturing 30.9 0.8% Plastics and Rubber Products Manufacturing 30.5 0.8% Printing and Related Support Activities 25.1 0.7% Food Manufacturing 24.0 0.6% Other³ 47.1 1.2% 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 19 1 Excludes certain joint ventures; percentages calculated based on aggregate principal amount of loans includes operating lease rental equipment of $211.4M ² Total includes total gross loans & leases of $3.65 billion and rental equipment, net of $211.4M, as of March 31, 2021, exposures are based on current outstanding balances as of March 31, 2021 3 Other includes manufacturing subsectors comprised of less than 0.5% of total² • $46.2 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 1.7% 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 • $250.8 million exposure to truck transportation, over 88% in general freight trucking. • 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 $399.2 million % of Total² 10.3% Total Exposure $446.0 million % of Total² 11.6% Total Exposure $442.0 million % of Total² 11.5% Total Exposure $51.4 million % of Total² 1.3%


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH S O L A R / A LT E R N AT I V E E N E R GY 20 Project is Leased to a Solar Developer Project Financing (Construction) MetaBank Purchases the Project ITC Recognized TAX ADVANTAGES IN RENEWABLE ENERGY PORTFOLIO RENEWABLE ENERGY INVESTMENT TAX CREDIT (ITC) • The solar and fuel cell ITC is an important federal policy mechanism to support the growth of solar energy in the U.S. — Since the ITC was enacted in 2006, the U.S. solar industry alone has grown by more than 10,000%¹ • The ITC is based on the amount of investment in the solar or fuel cell project — Both the solar and fuel cell ITC are currently equal to 26% of the basis that is invested in eligible property which has begun construction through 2022. • Originated $38.5 million and $20.0 million in ITC eligible alternative energy sale-leasebacks for the first and second quarter of 2021, that resulted in $15.5 million in total net ITC, respectively. — 80% of ITC in Q1 & Q2 were solar transactions with the remaining 20% fuel cells. Project Financing (Construction) Permanent Financing via USDA Loan Sell USDA Guaranteed Portion ADVANTAGES OF RENEWABLE ENERGY LENDING PERMANENT DEBT FINANCING • MetaBank provides permanent debt financing via United States Department of Agriculture (USDA) Guaranteed Loan Programs — All USDA loans carry an 80 percent loan guaranty during MetaBank’s 2021 fiscal year. • Safe and conservative lending characteristics — Loan-to-Value (“LTV”) is low averaging approx. 40%-60% — Each project includes a long-term Power Purchase Agreement (“PPA”) often with publicly rated utility providers — Having long-term PPAs and low LTV generates predictable cash flow and safeguards the loan’s debt service coverage capability • Originated $8.1 million and $42.3 million in USDA solar loans for the first and second quarter of 2021, respectively — At times, MetaBank may sell the USDA-guaranteed portion of the loan to an outside investor. ¹Source: Solar Energy Industries Association® Solar Investment Tax Credit (ITC) Fact Sheet https://www.seia.org/sites/default/files/2021-01/SEIA-ITC-Factsheet-2021-Jan.pdf


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH L E G ACY 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 M A R C H 3 1 , 2 0 2 1 | S E R V I C E D B Y C E N T R A L B A N K 21 COMMERCIAL REAL ESTATE INDUSTRY COMPOSITION ($ in millions) Outstanding Balance % of Total¹ Commercial Real Estate $324.3 8.4% Commercial Operating 11.3 0.3% Agricultural 7.9 0.2% 1-4 Family Real Estate 3.9 0.1% Consumer 0.7 0.0% Total $348.1 9.0% • 68% commercial mortgage, 32% commercial construction • Allowance for credit losses coverage of 4.16% of total commercial real estate loans, primarily related to the hospitality and theater commercial real estate loans • Negligible past due commercial real estate balances as of March 31, 2021 • $17.2 million in nonperforming commercial real estate loans as of March 31, 2021 COMMERCIAL REAL ESTATE Hotel/Motel 57% Multifamily 19% Retail 13% Theater 5% Office Building 5% Other² 1% ¹ Total includes total gross loans & leases of $3.65 billion and rental equipment, net of $211.4 million, as of March 31, 2021, exposures are based on current outstanding balances as of March 31, 2021 ² Other includes subsectors comprised of less than 1% of total commercial real estate as of March 31, 2021 ($324.3 million) During the quarter sold $103 million of community bank loans that were classified as held for sale during the prior quarter. Sale did not result in any material gain.


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH L E G ACY C O M M U N I T Y B A N K | H OT E L P O R T F O L I O A S O F M A R C H 3 1 , 2 0 2 1 | S E R V I C E D B Y C E N T R A L B A N K 22 $191.4 million outstanding, total exposure of $194.4 million including unfunded commitments • $15.7 million related to construction. $185.0 million in commercial real estate and $6.4 million in C&I • Portfolio comprised of 28 relationships representing 31 individual hotels and 3,017 total rooms • 99% flagged hotel relationships (i.e. Holiday Inn Express, Hampton Inn, Hyatt Place, etc.); 100% limited-service • 24% 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 guarantees by individuals with a strong combined net worth • Average loan-to-value of 60% at March 31, 2021 • No nonperforming loans as of March 31, 2021 COVID-19 Monitoring • Most hospitality loans that were on deferral are back to P&I payments • 8 hospitality loans upgraded from watch to pass during the quarter • 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 | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH ASSET QUALIT Y, INTEREST R ATE R ISK, & CAPITAL 23


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH AS S E T Q UA L I T Y 24 Credit quality remains strong. Allowance for credit losses (“ACL”) $98.9 million, or 2.70% of total loans and leases as of March 31, 2021. • ACL 228% of nonperforming loans • Legacy community bank hospitality and theater exposures ACL coverage of 5.70% • Small ticket equipment finance ACL coverage of 5.30% For fiscal 2021 second quarter, $2.7 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. $39.4 $56.1 $48.0 $53.2 $46.7 0.67% 0.64% 0.79% 0.73% 0.48% 2Q20 3Q20 4Q20 1Q21 2Q21 $ i n m il li o n s Period Ended Nonperforming Assets (“NPAs”) NPAs NPAs / Total Assets $31.5 $39.3 $34.0 $42.3 $43.5 0.87% 1.10% 0.97% 1.18% 1.17% 2Q20 3Q20 4Q20 1Q21 2Q21 $ i n m il li o n s Period Ended Nonperforming Loans (“NPLs”) NPLs NPLs / Total Loans $2.2 $4.9 $5.5 $3.8 $3.8 0.24% 0.55% 0.63% 0.44% 0.44% 2Q20 3Q20 4Q20 1Q21 2Q21 $ i n m il li o n s Period Ended Adjusted Net Charge-Offs (“NCOs”)¹ NCOs NCOs / Average Loans


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH $75.4 $51.2 $63.7 $9.5 $85.3 $66.4 2Q20 1Q21 2Q21 $ i n m il li o n s Total Past Due COVID-19 Modifications & Deferrals Past Due Loans & Leases + COVID-19 Modifications & Deferrals AS S E T Q UA L I T Y 25 1 Small ticket equipment finance includes balances of $16.0 million in term lending and $0.5 million in lease receivables. Well-diversified portfolio with very modest exposures to the industries most impacted by the pandemic. COVID-related modifications and deferrals continue to improve. Excluding PPP loans, active deferments and modifications decreased from $85.3, or 3% of total gross loans and leases at December 31, 2020 to $66.4 million or 2% of total gross loans at March 31, 2021. ACTIVE COVID-19 LOAN AND LEASE MODIFICATIONS AND DEFERRALS March 31, 2021 December 31, 2020 COUNT $ BALANCE COUNT $ BALANCE AREAS OF CREDIT FOCUS 70 $64.5 138 $75.2 Hospitality 11 40.8 11 40.8 Movie Theater 4 17.9 4 17.9 Small ticket equipment finance¹ 55 5.8 123 16.5 COMMERCIAL FINANCE 55 $5.8 130 $21.1 CONSUMER 76 $1.9 200 $3.9 COMMUNITY BANK 15 $58.7 16 $60.3 TOTAL 146 $66.4 346 $85.3 % TOTAL LOANS AND LEASES (excl. PPP) 2% 3% Past Due / Total Loans and Leases Past Due + COVID-19 Modifications & Deferrals / Total Loans and Leases 2.08% 1.43% 1.71% 2.34% 3.82% 3.50% 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. • Upgraded 8 hospitality loans in the quarter.


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH -10% 5% 20% 35% 50% 65% -100 +100 +200 +300 12-MONTH INTEREST RATE SENSITIVITY FROM BASE NET INTEREST INCOME Parallel Shock Ramp 42% 18% 8% 32% EARNING ASSET PRICING ATTRIBUTES 1 26 • 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 ST R AT E R I S K M A N AG E M E N T M A R C H 3 1 , 2 0 2 1 Fixed Rate > 1 Year Fixed Rate < 1 Year Floating or Variable Federal Reserve Bank Deposits (Floating or Variable) -2,000 0 2,000 4,000 6,000 8,000 Month 1-12 Month 13-36 Month 37-60 Month 61-180 V o lu m e ( $ M M ) Period Variance Total Assets Total Liabilities


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH C A P I TA L A N D S O U RC E S O F L I Q U I D I T Y R E G U L AT O R Y C A P I TA L A S O F M A R C H 3 1 , 2 0 2 1 27 Minimum Requirement to be Well-Capitalized under Prompt Corrective Action Provisions Meta Financial Group, Inc. MetaBank, N.A. CAPITAL RATIO TRENDS At March 31, 2021¹ Meta Financial Group, Inc. MetaBank, N.A. Tier 1 Leverage 4.75% 5.47% Tier 1 Leverage – EIP-adjusted² N/A 7.39% Common Equity Tier 1 11.24% 13.32% Tier 1 Capital 11.58% 13.33% Total Capital 14.59% 14.60% • MetaBank EIP-adjusted Tier 1 Leverage of 7.39% 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 Bank-issued EIP cards. • Repurchased 734,984 shares at a weighted average price of $40.78 during the 2021 second fiscal quarter. As of April 21, 2021, approximately 1.5 million shares remain under current authorization. Primary & Secondary Liquidity Sources ($ in millions) Cash and Cash Equivalents $3,725 Unpledged Investment Securities $465 FHLB Borrowing Capacity $845 Funds Available through Fed Discount Window $285 PPP Loan Collateral $208 Unsecured Lines of Credit $1,265 - $1,535 EIP Deposit Balances Held at Other Banks $10,768 1 Regulatory capital reflects the Company's election of the five-year CECL transition for regulatory capital purposes. Amounts are preliminary pending completion and filing of the Company's regulatory reports. ² Non-GAAP measure, see appendix for reconciliations. 7.28% 5.91% 6.58% 7.39% 4.75% 8.52% 6.89% 7.56% 8.60% 5.47% 2Q20 3Q20 4Q20 1Q21 2Q21 Tier 1 Leverage Ratio 13.61% 14.99% 15.30% 14.14% 14.59%13.69% 15.12% 15.26% 14.14% 14.60% 2Q20 3Q20 4Q20 1Q21 2Q21 Total Capital Ratio 10% 5%


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH APPENDIX 28


 
QUARTERLY INVESTOR UPDATE | SECOND 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 AT E D A D J U S T M E N T S 29 ($ in millions) THREE MONTHS ENDED NET INTEREST MARGIN MARCH 31, 2021 DECEMBER 31, 2020 SEPTEMBER 30, 2020 JUNE 30, 2020 Average interest-earning assets 9,768,242 5,636,445 6,806,366 7,608,616 Net interest income 73,850 65,999 64,513 62,137 Net interest margin 3.07% 4.65% 3.77% 3.28% ADJUSTMENT FOR EIP-RELATED ASSETS Interest-earning assets 9,768,242 5,636,445 6,806,366 7,608,618 LESS: Estimated cash adjustment 2,679,372 624,857 1,573,727 2,323,425 EIP-ADJUSTED AVERAGE INTEREST-EARNING ASSETS 7,088,870 5,011,588 5,232,639 5,285,193 Net interest income 73,850 65,999 64,513 62,137 LESS: Estimated cash interest adjustment 661 157 396 578 EIP-ADJUSTED NET INTEREST INCOME 73,189 65,842 64,177 61,559 EIP-ADJUSTED NET INTEREST MARGIN 4.19% 5.21% 4.87% 4.68% ADJUSTMENT FOR INFLATED CASH BALANCES Interest-earning assets 9,768,242 LESS: Estimated cash adjustment 4,187,558 ADJUSTED AVERAGE INTEREST-EARNING ASSETS 5,580,684 Net interest income 73,850 LESS: Estimated cash interest adjustment 1,090 ADJUSTED NET INTEREST INCOME 72,760 ADJUSTED NET INTEREST MARGIN 5.29% RETURN ON AVERAGE ASSETS (“ROAA”) MARCH 31, 2021 DECEMBER 31, 2020 SEPTEMBER 30, 2020 JUNE 30, 2020 Net income 59,066 28,037 13,158 18,190 Average assets 10,655,852 6,481,823 7,672,773 8,439,206 ROAA 2.22% 1.73% 0.69% 0.86% LESS: Estimated cash adjustment 2,679,372 624,857 1,573,727 2,323,425 LESS: Estimated cash interest adjustment 661 157 396 578 EIP-ADJUSTED AVERAGE ASSETS 7,976,480 5,856,966 6,099,046 6,115,781 EIP-ADJUSTED NET INCOME 58,405 27,880 12,762 17,612 EIP-ADJUSTED ROAA 2.93% 1.90% 0.84% 1.15%


 
QUARTERLY INVESTOR UPDATE | SECOND 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 AT E D C A P I TA L A D J U S T M E N T S 30 ($ in millions) METABANK TIER 1 LEVERAGE MARCH 31, 2020 DECEMBER 31, 2020 SEPTEMBER 30, 2020 JUNE 30, 2020 Total stockholder's equity $ 934,010 $ 912,143 $ 933,430 $ 923,520 LESS: Goodwill, net of associated deferred tax liabilities 301,602 301,999 302,396 302,815 LESS: Certain other intangible assets 36,780 39,403 40,946 42,865 LESS: Net deferred tax assets from operating loss and tax credit carry-forwards 19,306 24,105 18,361 10,360 LESS: Net unrealized gains (losses) on available-for-sale securities 12,458 19,894 17,762 8,382 LESS: Non-controlling interest 1,092 1,536 3,603 3,787 Common Equity Tier 1 Capital ("CET1") 562,772 525,206 550,344 555,311 Tier 1 minority interest not included in common equity tier 1 capital 690 750 1,894 1,894 Total Tier 1 capital 563,462 525,956 552,238 557,205 Total Assets (Quarter Average) $ 10,662,731 $ 6,487,231 $ 7,679,897 $ 8,446,393 ADD: Available for sale securities amortized cost (20,219) (24,694) (22,844) (8,420) ADD: Deferred tax 5,077 6,201 5,724 2,104 ADD: CECL adoption 10,439 10,439 0 0 LESS: Deductions from CET1 357,688 365,507 361,721 356,040 ADJUSTED TOTAL ASSETS $ 10,300,340 $ 6,113,671 $ 7,301,056 $ 8,084,037 METABANK REGULATORY TIER 1 LEVERAGE 5.47 % 8.60 % 7.56 % 6.89% ADJUSTMENT FOR EIP-RELATED ASSETS Adjusted total assets $ 10,300,340 $ 6,113,671 $ 7,301,056 $ 8,084,037 LESS: EIP prepaid card-related assets (cash) 2,679,372 624,857 1,573,727 2,323,425 EIP-ADJUSTED TOTAL ASSETS $ 7,620,968 $ 5,488,814 $ 5,727,329 $ 5,760,612 METABANK EIP-ADJUSTED TIER 1 LEVERAGE 7.39 % 9.58 % 9.64 % 9.67%


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH F I N A N C I A L M E AS U R E R E C O N C I L I AT I O N S 31 Efficiency Ratio For the last twelve months ended ($ in thousands) Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Noninterest Expense - GAAP 320,070 315,828 319,051 314,911 316,138 Net Interest Income 266,499 260,386 259,038 260,142 264,973 Noninterest Income 240,706 247,766 239,794 235,024 237,766 Total Revenue: GAAP 507,205 508,152 498,832 495,166 502,739 Efficiency Ratio, LTM 63.10% 62.15% 63.96 % 63.60 % 62.88 % Non-GAAP Reconciliation Adjusted Annualized NCOs and Adjusted Average Loans and Leases For the quarter ended ($ in thousands) Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Net Charge-offs 3,696 2,836 18,538 14,700 2,117 Less: Tax services net charge-offs (54) (956) 13,034 9,782 (74) Adjusted Net Charge-offs $ 3,750 $ 3,792 $ 5,504 $ 4,918 $ 2,191 Quarterly Average Loans and Leases 4,120,555 3,495,696 3,536,997 3,622,928 4,195,772 Less: Quarterly Average Tax Services Loans 714,789 25,104 16,650 39,845 516,491 Adjusted Quarterly Loans and Leases $ 3,405,766 $ 3,470,592 $ 3,520,347 $ 3,583,083 $ 3,679,281 Annualized NCOs/Average Loans and Leases 0.36% 0.32% 2.10 % 1.62 % 0.20 % Adjusted Annualized NCOs/Adjusted Average Loans and Leases1 0.44% 0.44% 0.63 % 0.55 % 0.24 % 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 | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH WA R E H O U S E F I N A N C E 32 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 $332.5 million % of Total¹ 8.6% ¹ Total includes total gross loans & leases of $3.65 billion and rental equipment, net of $211.4 million, as of March 31, 2021


 
QUARTERLY INVESTOR UPDATE | SECOND QUARTER FISCAL YEAR 2021 | NASDAQ: CASH I N D I R E C T C O N S U M E R C R E D I T P RO G R A M S 33 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 with marketplace lenders 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 March 31, 2021, MetaBank had two consumer credit programs with strategic partners. Reserve release to partner is conditional (subordinate) based on product performance Total Exposure $104.8 million % of Total¹ 2.7% ¹ Total includes total gross loans & leases of $3.65 billion and rental equipment, net of $211.4 million, as of March 31, 2021