- Revenue Rises 41% -
Meta Financial Group, Inc.® (Nasdaq: CASH) (“Meta” or the
“Company”) reported net income of $32.1 million, or $0.81 per
diluted share, for the three months ended March 31, 2019,
compared to net income of $31.4 million, or $1.08 per diluted
share, for the three months ended March 31, 2018. Notably,
GAAP earnings for the quarter were impacted by a few significant
items. Total revenue for the fiscal 2019 second quarter was $176.4
million, compared to $124.8 million for the same quarter in fiscal
2018, representing an increase of $51.5 million, or 41%.
“We expanded net interest margin again this
quarter as we were able to enhance our interest-earning asset mix
reflecting ongoing growth in noninterest-bearing deposits, while
replacing lower yielding investment portfolio balances with higher
yielding loans and leases during the second quarter of fiscal 2019
driving a sizeable increase in net interest income,” said President
and CEO Brad Hanson. "We also delivered another successful tax
season, and made progress on our key strategic initiatives, which
positions us well to continue to drive growth across our core
businesses."
Highlights for the 2019 Fiscal Second Quarter Ended
March 31, 2019
- Total gross loans and leases at
March 31, 2019 more than doubled to $3.44 billion, compared to
March 31, 2018, and increased $106.7 million, or 3%, when
compared to December 31, 2018.
- Average noninterest-bearing
deposits of $2.95 billion increased by $296.8 million, or 11%, when
compared to the same period in fiscal 2018.
- Net interest income more than
doubled to $71.4 million, compared to $27.4 million in the
comparable quarter in fiscal 2018.
- Net interest margin ("NIM")
increased to 5.06% for the fiscal 2019 second quarter from 2.61%
over the same period of the prior fiscal year, while the
tax-equivalent net interest margin ("NIM, TE") increased to 5.18%
from 2.89% over that same period.
- Total tax services product revenue,
inclusive of interest income from the launch of a new
interest-bearing refund advance product, was $72.8 million, an
increase of 6% compared to the second quarter of fiscal 2018. The
Company recorded $22.5 million in loan loss provision expense
related to $1.49 billion in tax services loans originated during
the fiscal second quarter of 2019.
- Tax services product income, net of
losses and direct product expenses, increased 5% when comparing the
fiscal 2019 second quarter to the same period of the prior fiscal
year.
- Related to the previously disclosed
DC Solar relationship, the Company recognized a $6.6 million
after-tax net non-cash charge to earnings and recorded a $2.0
million increase to goodwill.
- The Company recorded previously
disclosed $6.1 million of pre-tax executive transition costs.
Net Interest IncomeNet interest
income for the fiscal 2019 second quarter was $71.4 million, an
increase of $44.0 million, or 160%, compared to the same quarter in
fiscal 2018. This increase was primarily due to growth in
loan and lease balances, continued expansion in net interest
margin, and an increase in tax services interest income of $7.4
million, which increase in tax services interest income was due in
large part to the launch of a new interest-bearing refund advance
product. The growth in loan and lease balances, along with the
expansion in net interest margin, were largely attributable to the
Company's acquisition of Crestmark in the fourth quarter of fiscal
2018 (the "Crestmark acquisition").
During the second quarter of fiscal year 2019,
loan and lease interest income grew $55.8 million, offset in part
by an increase in interest expense of $11.0 million, in each case,
when compared to the same quarter in fiscal 2018. The quarterly
average outstanding balance of loans and leases as a percentage of
interest-earning assets for the quarter ended March 31, 2019
increased to 65%, from 44% for the quarter ended March 31,
2018, while the quarterly average balance of total investments as a
percentage of interest-earning assets decreased to 30% from 53%
over that same period. The Company’s average interest-earning
assets for the fiscal 2019 second quarter grew by $1.5 billion, or
35%, to $5.72 billion from the comparable quarter in 2018.
This was primarily due to growth in the loan and lease portfolio of
$1.86 billion, of which $1.67 billion was attributable to an
increase in national lending loans and leases along with an
increase of $190.2 million in community banking loans, partially
offset by a reduction in total investment securities of $534.0
million.
NIM increased to 5.06% for the fiscal 2019
second quarter from 2.61%, while NIM, TE was 5.18% for the fiscal
2019 second quarter, with the net effect of purchase accounting
accretion contributing 18 basis points.
The overall reported tax-equivalent yield
(“TEY”) on average earning asset yields increased by 292 basis
points to 6.38% for the fiscal 2019 second quarter compared to the
2018 second fiscal quarter. The increase was driven primarily
by the Company's improved earning asset mix, which reflects higher
balances for the national lending portfolio and the launch of a new
interest-bearing refund advance product. The fiscal 2019 second
quarter TEY on the securities portfolio increased by 18 basis
points to 3.36% compared to a 3.18% TEY for the same period of the
prior year.
Overall, the Company's cost of funds for all
deposits and borrowings averaged 1.17% during the fiscal 2019
second quarter, compared to 0.58% for the 2018 second fiscal
quarter. This increase was primarily due to a rise in short-term
interest rates affecting overnight borrowing rates, other wholesale
funding, and the interest-bearing time deposits acquired by the
Company in connection with the Crestmark acquisition in the fourth
quarter of fiscal 2018. The Company's overall cost of deposits was
1.06% in the fiscal second quarter of 2019, compared to 0.33% in
the same quarter of fiscal 2018. Excluding wholesale deposits, the
Company's cost of deposits for the second quarter of fiscal 2019
would have been 0.11%.
Non-Interest IncomeFiscal 2019
second quarter non-interest income was $105.0 million, an increase
of 8% over the same quarter of fiscal 2018, largely due to
increases in rental income, other income, deposit fees, and gain on
sale of loans and leases. Partially offsetting the increase in
non-interest income was a decrease in card fee income compared to
the same quarter of the prior fiscal year, as well as a decrease in
total tax product fee income over that same period. The card
fee income decrease was related to the previously mentioned
wind-down of two non-strategic partners and the transition of
certain fees to deposit fees. Certain tax product revenues moved
from fee income to interest income due to the launch of a new
interest-bearing refund advance product.
Non-Interest
ExpenseNon-interest expense increased to $110.3 million
for the 2019 fiscal second quarter, compared to $68.5 million for
the same quarter of fiscal 2018, primarily due to the addition of
the Crestmark division, which was not present in the comparable
quarter in the prior fiscal year, along with $9.7 million of
impairment expense and the Company's recognition of $6.1 million in
executive transition agreement costs. During the fiscal 2019 second
quarter, compensation and benefits expense increased $17.0 million
from the same period of the prior year, primarily due to the
addition of Crestmark division employees, the executive transition
agreement costs and new hires in the back half of fiscal 2018 in
support of Meta's national lending and other business initiatives.
The impairment expense included $9.5 million related to the DC
Solar relationship.
Income Tax ExpenseThe Company
recorded an income tax benefit of $0.4 million, or an effective tax
rate of (1.20%), for the fiscal 2019 second quarter, compared to an
income tax expense of $6.5 million, or an effective tax rate of
17.24%, for the fiscal 2018 second quarter. The income tax benefit
for the fiscal 2019 second quarter was driven by a combination of
the ratably recognized investment tax credits and a tax benefit
arising from the impairment charges related to the DC Solar
relationship.
Investment tax credits related to the solar
leasing initiatives and future originations in fiscal 2019 will be
recognized ratably based on income over the duration of the current
fiscal year. The timing and impact of future solar tax credits are
expected to vary from period to period, and Meta intends to
undertake only those tax credit opportunities that meet the
Company's underwriting and return criteria.
Investments, Loans and Leases
|
|
|
|
|
|
|
|
|
|
|
March
31, |
|
December
31, |
|
September
30, |
|
June
30, |
|
March
31, |
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
Total
investments |
$ |
1,649,754 |
|
|
$ |
1,855,792 |
|
|
$ |
2,019,968 |
|
|
$ |
2,149,709 |
|
|
$ |
2,306,603 |
|
|
|
|
|
|
|
|
|
|
|
Loans held for
sale |
|
|
|
|
|
|
|
|
|
Consumer
credit products |
42,342 |
|
|
24,233 |
|
|
— |
|
|
— |
|
|
— |
|
SBA/USDA(1) |
17,403 |
|
|
9,327 |
|
|
15,606 |
|
|
— |
|
|
— |
|
Total loans
held for sale |
59,745 |
|
|
33,560 |
|
|
15,606 |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
National
Lending loans and leases |
|
|
|
|
|
|
|
|
|
Asset
based lending |
572,210 |
|
|
554,072 |
|
|
477,917 |
|
|
— |
|
|
— |
|
Factoring |
287,955 |
|
|
284,912 |
|
|
284,221 |
|
|
— |
|
|
— |
|
Lease
financing |
321,414 |
|
|
290,889 |
|
|
265,315 |
|
|
— |
|
|
— |
|
Insurance
premium finance |
307,875 |
|
|
330,712 |
|
|
337,877 |
|
|
303,603 |
|
|
240,640 |
|
SBA/USDA |
77,481 |
|
|
67,893 |
|
|
59,374 |
|
|
— |
|
|
— |
|
Other
commercial finance |
98,956 |
|
|
89,402 |
|
|
85,145 |
|
|
11,418 |
|
|
8,041 |
|
Commercial
finance(2) |
1,665,891 |
|
|
1,617,880 |
|
|
1,509,849 |
|
|
315,021 |
|
|
248,681 |
|
Consumer
credit products |
139,617 |
|
|
96,144 |
|
|
80,605 |
|
|
26,583 |
|
|
— |
|
Other
consumer finance |
170,824 |
|
|
182,510 |
|
|
189,756 |
|
|
194,344 |
|
|
201,942 |
|
Consumer
finance |
310,441 |
|
|
278,654 |
|
|
270,361 |
|
|
220,927 |
|
|
201,942 |
|
Tax
services |
84,824 |
|
|
76,575 |
|
|
1,073 |
|
|
14,281 |
|
|
58,794 |
|
Warehouse
finance |
186,697 |
|
|
176,134 |
|
|
65,000 |
|
|
— |
|
|
— |
|
Total National Lending loans and leases |
2,247,853 |
|
|
2,149,243 |
|
|
1,846,283 |
|
|
550,229 |
|
|
509,417 |
|
Community
Banking loans |
|
|
|
|
|
|
|
|
|
Commercial real estate
and operating |
869,917 |
|
|
863,753 |
|
|
790,890 |
|
|
751,146 |
|
|
723,091 |
|
Consumer one-to-four
family real estate and other |
257,079 |
|
|
256,341 |
|
|
247,318 |
|
|
237,704 |
|
|
228,415 |
|
Agricultural real
estate and operating |
60,167 |
|
|
58,971 |
|
|
60,498 |
|
|
60,096 |
|
|
58,773 |
|
Total Community Banking loans |
1,187,163 |
|
|
1,179,065 |
|
|
1,098,706 |
|
|
1,048,946 |
|
|
1,010,279 |
|
Total gross
loans and leases |
3,435,016 |
|
|
3,328,308 |
|
|
2,944,989 |
|
|
1,599,175 |
|
|
1,519,696 |
|
Allowance
for loan and lease losses |
(48,672 |
) |
|
(21,290 |
) |
|
(13,040 |
) |
|
(21,950 |
) |
|
(27,078 |
) |
Net
deferred loan and lease origination fees (costs) |
2,964 |
|
|
1,190 |
|
|
(250 |
) |
|
(1,881 |
) |
|
(2,080 |
) |
Total loans and
leases, net of allowance |
$ |
3,389,308 |
|
|
$ |
3,308,208 |
|
|
$ |
2,931,699 |
|
|
$ |
1,575,344 |
|
|
$ |
1,490,538 |
|
|
(1) The
March 31, 2019 balance included $0.8 million of an interest rate
mark premium related to the acquired loans and leases from the
Crestmark acquisition. |
(2) The
March 31, 2019 balance included $8.7 million and $4.5 million of
credit and interest rate mark discounts, respectively, related to
the acquired loans and leases from the Crestmark acquisition. |
|
The Company continued to utilize sales of
securities and cash flow from its amortizing securities portfolio
to fund loan and lease growth. Investment securities totaled $1.65
billion at March 31, 2019, as compared to $2.31 billion at
March 31, 2018.
Total gross loans and leases increased $1.92
billion, or 126%, to $3.44 billion at March 31, 2019, from
$1.52 billion at March 31, 2018, primarily driven by loans and
leases attributable to the acquired Crestmark commercial finance
division, along with increases in warehouse finance and consumer
credit product loans, a 28% increase in insurance premium finance
loans, and an 18% increase in community banking loans.
At March 31, 2019, commercial finance
loans, which comprised 48% of the Company's gross loan and lease
portfolio, totaled $1.67 billion, reflecting growth of $48.0
million, or 3%, from December 31, 2018. Consumer credit product
loans increased by $43.5 million, or 45%, and warehouse finance
loans increased by $10.6 million, or 6%, in each case at
March 31, 2019 as compared to December 31, 2018.
Asset QualityThe Company’s
allowance for loan and lease losses was $48.7 million at
March 31, 2019, compared to $27.1 million at March 31,
2018, driven primarily by increases in the allowance of $8.4
million in commercial finance, $6.4 million in consumer lending,
$4.5 million in tax services and $2.0 million in the community
banking portfolio.
|
|
|
|
(Unaudited) |
Three Months Ended |
|
Six Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
March 31, |
Allowance for loan and
lease loss activity |
2019 |
|
2018 |
|
2018 |
|
2019 |
|
2018 |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
Beginning
balance |
$ |
21,290 |
|
|
$ |
13,040 |
|
|
$ |
8,862 |
|
|
$ |
13,040 |
|
|
$ |
7,534 |
|
Provision
- tax services loans |
22,473 |
|
|
1,496 |
|
|
18,129 |
|
|
23,969 |
|
|
19,146 |
|
Provision
- all other loans and leases |
10,845 |
|
|
7,603 |
|
|
214 |
|
|
18,448 |
|
|
265 |
|
Charge-offs - tax services loans |
(1 |
) |
|
(42 |
) |
|
— |
|
|
(43 |
) |
|
— |
|
Charge-offs - all other loans and leases |
(6,522 |
) |
|
(2,762 |
) |
|
(339 |
) |
|
(9,283 |
) |
|
(499 |
) |
Recoveries - tax services loans |
84 |
|
|
92 |
|
|
9 |
|
|
176 |
|
|
422 |
|
Recoveries - all other loans and leases |
503 |
|
|
1,863 |
|
|
203 |
|
|
2,365 |
|
|
210 |
|
Ending
balance |
$ |
48,672 |
|
|
$ |
21,290 |
|
|
$ |
27,078 |
|
|
$ |
48,672 |
|
|
$ |
27,078 |
|
|
Provision for loan and lease losses was $33.3
million for the quarter ended March 31, 2019, compared to
$18.3 million for the comparable period in the prior fiscal year.
The increase in provision was primarily driven by originations in
the tax services portfolio, growth in commercial finance and
provision expense to maintain allowance levels. Net charge-offs
were $5.9 million for the quarter ended March 31, 2019
compared to $0.1 million for the quarter ended March 31,
2018.
The Company's non-performing assets at
March 31, 2019, were $40.9 million, representing 0.68% of
total assets, compared to $45.4 million, or 0.73% of total assets
at December 31, 2018 and $36.1 million, or 0.84% of total assets at
March 31, 2018. The Company\'s non-performing loans and leases
at March 31, 2019 were $9.6 million, representing 0.28% of
total loans and leases, compared to $13.9 million, or 0.42% of
total loans and leases at December 31, 2018 and $6.0 million, or
0.40% of total loans and leases at March 31, 2018.
Deposits, Borrowings and Other
LiabilitiesTotal average deposits for the fiscal 2019
second quarter increased by $1.98 billion, or 54%, compared to the
same period in fiscal 2018. Average wholesale deposits increased
$1.60 billion, or 233%, primarily related to the Crestmark
acquisition, and noninterest-bearing deposits increased $296.8
million, or 11%, for the 2019 fiscal second quarter when compared
to the same period in fiscal 2018.
The average balance of total deposits and
interest-bearing liabilities was $5.86 billion for the three-month
period ended March 31, 2019, compared to $4.17 billion for the
same period in the prior fiscal year, representing an increase of
41%.
Total end-of-period deposits increased 49%, to
$4.97 billion at March 31, 2019, compared to $3.34 billion at
March 31, 2018. The increase in end-of-period deposits was
primarily a result of increases in wholesale deposits, certificates
of deposits and interest-bearing checking deposits.
Overview of the DC Solar Financial
ImpactAs previously communicated, the Company became aware
that DC Solar Solutions, Inc., DC Solar Distribution, Inc. and
their affiliates filed for bankruptcy and the entities, including
their principals, are subjects of an ongoing federal investigation
involving allegations of fraudulent misconduct. The Company
previously purchased a portfolio of mobile solar generators from DC
Solar Solutions, Inc. and certain of its affiliates and, in turn,
leased the generators to DC Solar Distribution, Inc., another
affiliate of DC Solar Solutions, pursuant to three separate
operating leases. The Company has continued to monitor these
matters and, in considering the facts and circumstances, the
Company recorded a non-cash impairment charge and related effects
to the underlying leased assets in the Company's financial
statements for the three months ended March 31, 2019. The Company
continues to gather information about the situation and, as of the
date of this release, has identified and located nearly all of the
underlying assets, however the timing and extent to which the
Company will be able to recover and re-lease the underlying assets
remains uncertain, due in part to claims by third parties as to
their potential interests in the underlying assets.
In accordance with GAAP, based on the facts and
circumstances surrounding these DC Solar matters, the Company
recorded the identified impairment for the DC Solar transactions
acquired as a result of the Crestmark acquisition and other related
adjustments through goodwill. The impairment and related
adjustments for the DC Solar transaction originated
post-acquisition is reflected in current earnings. As new facts and
circumstances become available, the Company will assess any
remaining exposure with respect to these DC Solar matters to
determine whether additional adjustments to goodwill and/or
impairment loss is necessary. The Company will continue to account
for adjustments to the acquired DC Solar transactions as
adjustments to goodwill as long as the required criteria under GAAP
are met.
In addition to the $2.0 million provisional
increase to goodwill on the Company’s balance sheet at March 31,
2019, the table below reflects the net impact of the foregoing DC
Solar matters, based upon the Company's present understanding of
the relevant facts and circumstances, to the Company's income
statement for the three months ended March 31, 2019.
|
|
|
|
|
Income (Expense) |
Income Statement: |
(Dollars in Thousands) |
|
Rental income |
$ |
1,633 |
|
|
Other income |
315 |
|
|
Impairment |
(9,549 |
) |
|
Income tax benefit |
1,047 |
|
|
Impact to net
income |
$ |
(6,554 |
) |
|
|
|
|
|
Regulatory CapitalThe Company
and MetaBank remained above the federal regulatory minimum capital
requirements at March 31, 2019 and continued to be classified
as well-capitalized institutions. Regulatory capital ratios of the
Company and the Bank are stated in the table below.
The tables below include certain non-GAAP
financial measures that are used by investors, analysts and bank
regulatory agencies to assess the capital position of financial
services companies. Management reviews these measures along
with other measures of capital as part of its financial
analysis.
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
As of the dates indicated |
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
Company |
|
|
|
|
|
|
|
|
|
Tier 1 leverage
ratio |
7.45 |
% |
|
7.90 |
% |
|
8.50 |
% |
|
8.29 |
% |
|
7.26 |
% |
Common
equity Tier 1 capital ratio |
10.94 |
% |
|
10.11 |
% |
|
10.56 |
% |
|
13.92 |
% |
|
13.74 |
% |
Tier 1
capital ratio |
11.31 |
% |
|
10.47 |
% |
|
10.97 |
% |
|
14.35 |
% |
|
14.18 |
% |
Total
qualifying capital ratio |
14.20 |
% |
|
12.69 |
% |
|
13.18 |
% |
|
18.37 |
% |
|
18.48 |
% |
MetaBank |
|
|
|
|
|
|
|
|
|
Tier 1
leverage ratio |
8.42 |
% |
|
9.01 |
% |
|
9.75 |
% |
|
10.16 |
% |
|
8.93 |
% |
Common
equity Tier 1 capital ratio |
12.72 |
% |
|
11.87 |
% |
|
12.50 |
% |
|
17.57 |
% |
|
17.43 |
% |
Tier 1
capital ratio |
12.76 |
% |
|
11.91 |
% |
|
12.56 |
% |
|
17.57 |
% |
|
17.43 |
% |
Total
qualifying capital ratio |
13.92 |
% |
|
12.41 |
% |
|
12.89 |
% |
|
18.50 |
% |
|
18.59 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to the predictable, quarterly cyclicality of
noninterest-bearing deposits in connection with tax season business
activity, management believes that a six-month capital calculation
is a useful metric to monitor the Company’s overall capital
management process. As such, MetaBank’s six-month average Tier 1
leverage ratio, Common equity Tier 1 capital ratio, Tier 1 capital
ratio, and Total qualifying capital ratio as of March 31,
2019, were 8.97%, 12.27%, 12.31%, and 13.42%, respectively.
The following table provides certain non-GAAP
financial measures used to compute certain of the ratios included
in the table above for the periods presented, as well as a
reconciliation of such non-GAAP financial measures to the most
directly comparable financial measure in accordance with GAAP:
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Standardized
Approach(1) |
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
(Dollars in Thousands) |
Total stockholders'
equity |
$ |
823,709 |
|
|
$ |
770,728 |
|
|
$ |
747,726 |
|
|
$ |
443,913 |
|
|
$ |
443,703 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
LESS:
Goodwill, net of associated deferred tax liabilities |
302,768 |
|
|
299,037 |
|
|
299,456 |
|
|
94,781 |
|
|
95,262 |
|
LESS:
Certain other intangible assets |
56,456 |
|
|
61,317 |
|
|
64,716 |
|
|
46,098 |
|
|
47,724 |
|
LESS: Net deferred tax
assets from operating loss and tax credit carry-forwards |
7,381 |
|
|
4,720 |
|
|
— |
|
|
— |
|
|
— |
|
LESS: Net
unrealized gains (losses) on available-for-sale securities |
(10,022 |
) |
|
(28,829 |
) |
|
(33,114 |
) |
|
(28,601 |
) |
|
(21,166 |
) |
LESS:
Noncontrolling interest |
3,528 |
|
|
3,267 |
|
|
3,574 |
|
|
— |
|
|
— |
|
LESS:
Unrealized currency gains (losses) |
(242 |
) |
|
(357 |
) |
|
3 |
|
|
— |
|
|
— |
|
Common Equity Tier 1
(1) |
463,840 |
|
|
431,573 |
|
|
413,091 |
|
|
331,635 |
|
|
321,882 |
|
Long-term
debt and other instruments qualifying as Tier 1 |
13,661 |
|
|
13,661 |
|
|
13,661 |
|
|
10,310 |
|
|
10,310 |
|
Tier 1
minority interest not included in common equity tier 1 capital |
2,064 |
|
|
1,796 |
|
|
2,118 |
|
|
— |
|
|
— |
|
Total Tier 1
capital |
479,565 |
|
|
447,030 |
|
|
428,870 |
|
|
341,945 |
|
|
332,192 |
|
Allowance
for loan and lease losses |
48,812 |
|
|
21,422 |
|
|
13,185 |
|
|
22,151 |
|
|
27,285 |
|
Subordinated debentures (net of issuance costs) |
73,566 |
|
|
73,528 |
|
|
73,491 |
|
|
73,442 |
|
|
73,418 |
|
Total qualifying
capital |
$ |
601,963 |
|
|
$ |
541,980 |
|
|
$ |
515,546 |
|
|
$ |
437,538 |
|
|
$ |
432,896 |
|
|
(1) Capital ratios were determined using the Basel III
capital rules that became effective on January 1, 2015. Basel III
revised the definition of capital, increased minimum capital
ratios, and introduced a minimum CET1 ratio; those changes are
being fully phased in through the end of 2021. |
|
The following table provides a reconciliation of
tangible common equity and tangible common equity excluding AOCI,
each of which is used in calculating tangible book value data, to
Total Stockholders' Equity. Each of tangible common equity and
tangible common equity excluding AOCI is a non-GAAP financial
measure that is commonly used within the banking industry.
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
(Dollars in Thousands) |
Total Stockholders'
Equity |
$ |
823,709 |
|
|
$ |
770,728 |
|
|
$ |
747,726 |
|
|
$ |
443,913 |
|
|
$ |
443,703 |
|
Less: Goodwill |
307,464 |
|
|
303,270 |
|
|
303,270 |
|
|
98,723 |
|
|
98,723 |
|
Less: Intangible
assets |
60,506 |
|
|
66,366 |
|
|
70,719 |
|
|
46,098 |
|
|
47,724 |
|
Tangible
common equity |
455,739 |
|
|
401,092 |
|
|
373,737 |
|
|
299,092 |
|
|
297,256 |
|
Less: Accumulated Other
Comprehensive Income (Loss) ("AOCI") |
(10,264 |
) |
|
(29,186 |
) |
|
(33,111 |
) |
|
(28,601 |
) |
|
(21,166 |
) |
Tangible
common equity excluding AOCI (Loss) |
466,003 |
|
|
430,278 |
|
|
406,848 |
|
|
327,693 |
|
|
318,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future OutlookThe Company
expects fiscal 2019 earnings per common share ("EPS") on an
adjusted basis to range between $2.35 to $2.65. Importantly, the
Company's estimates on an adjusted basis exclude the non-recurring
$0.12 EPS effect, or $6.1 million, of pre-tax executive transition
agreement costs incurred in the quarter ended March 31, 2019. The
adjusted EPS guidance also excludes the $0.17 EPS effect, or $6.6
million, after-tax net charge to earnings related to the DC Solar
matters. As a result, GAAP earnings per share for fiscal 2019 is
expected to be in the range of $2.06 to $2.36 per share. The
Company reaffirms the earnings outlook for fiscal year 2020 GAAP
EPS to be in the range of $3.10 to $3.80.
Conference CallThe Company will
host a conference call and earnings webcast at 4:00 p.m. CDT (5:00
p.m. EDT) on Thursday, April 25, 2019. The live webcast of the
call can be accessed from Meta’s Investor Relations website at
www.metafinancialgroup.com. Telephone participants may access
the live conference call by dialing (844) 461-9934 beginning
approximately 10 minutes prior to start time. Please ask to join
the Meta Financial conference call, and provide conference
ID 8878418 upon request. International callers should
dial (636) 812-6634. A webcast replay will also be archived at
www.metafinancialgroup.com for one year.
Forward-Looking StatementsThe
Company and MetaBank may from time to time make written or oral
“forward-looking statements,” including statements contained in
this press release, the Company’s filings with the Securities and
Exchange Commission (“SEC”), the Company’s reports to stockholders,
and in other communications by the Company and MetaBank, which are
made in good faith by the Company pursuant to the “safe harbor”
provisions of the Private Securities Litigation Reform Act of
1995.
You can identify forward-looking statements by
words such as “may,” “hope,” “will,” “should,” “expect,” “plan,”
“anticipate,” “intend,” “believe,” “estimate,” “predict,”
“potential,” “continue,” “could,” “future,” or the negative of
those terms, or other words of similar meaning or similar
expressions. You should carefully read statements that contain
these words because they discuss our future expectations or state
other “forward-looking” information. These forward-looking
statements are based on information currently available to us and
assumptions about future events, and include statements with
respect to the Company’s beliefs, expectations, estimates, and
intentions, which are subject to significant risks and
uncertainties, and are subject to change based on various factors,
some of which are beyond the Company’s control. Such risks,
uncertainties and other factors may cause our actual growth,
results of operations, financial condition, cash flows, performance
and business prospects and opportunities to differ materially from
those expressed in, or implied by, these forward-looking
statements. Such statements address, among others, the
following subjects: future operating results; customer retention;
loan and other product demand; important components of the
Company's statements of financial condition and operations; growth
and expansion; new products and services, such as those offered by
MetaBank or the Company's Payments divisions (which include Meta
Payment Systems, Refund Advantage, EPS Financial and Specialty
Consumer Services); credit quality and adequacy of reserves;
technology; and the Company's employees. The following factors,
among others, could cause the Company's financial performance and
results of operations to differ materially from the expectations,
estimates, and intentions expressed in such forward-looking
statements: maintaining our executive management team; the expected
growth opportunities, beneficial synergies and/or operating
efficiencies from the Crestmark acquisition may not be fully
realized or may take longer to realize than expected; customer
losses and business disruption related to the Crestmark
acquisition; unanticipated or unknown losses and liabilities may be
incurred by the Company following the Crestmark acquisition; the
costs, risks and effects on the Company of the ongoing federal
investigation and bankruptcy proceedings involving DC Solar
Solutions, Inc., DC Solar Distribution, Inc., and their affiliates,
including the potential financial impact of those matters on the
net book value of Company assets leased to DC Solar Distribution
and the Company’s ability to recognize certain investment tax
credits associated with such assets, and the results of the
Company’s review of its due diligence processes with respect to the
Company’s alternative energy assets; factors relating to the
Company’s recently announced share repurchase program; actual
changes in interest rates and the Fed Funds rate; additional
changes in tax laws; the strength of the United States' economy, in
general, and the strength of the local economies in which the
Company conducts operations; risks relating to the recent U.S.
government shutdown, including any adverse impact on our ability to
originate or sell SBA/USDA loans and any delay by the Internal
Revenue Service in processing taxpayer refunds, thereby increasing
the cost to us of our refund advance loans; the effects of, and
changes in, trade, monetary, and fiscal policies and laws,
including interest rate policies of the Board of Governors of the
Federal Reserve System (the “Federal Reserve”), as well as efforts
of the United States Congress and the United States Treasury in
conjunction with bank regulatory agencies to stimulate the economy
and protect the financial system; inflation, market, and monetary
fluctuations; the timely and efficient development of, and
acceptance of, new products and services offered by the Company or
its strategic partners, as well as risks (including reputational
and litigation) attendant thereto, and the perceived overall value
of these products and services by users; the risks of dealing with
or utilizing third parties, including, in connection with the
Company’s refund advance business, the risk of reduced volume of
refund advance loans as a result of reduced customer demand for or
acceptance of usage of Meta’s strategic partners’ refund advance
products; any actions which may be initiated by our regulators in
the future; the impact of changes in financial services laws and
regulations, including, but not limited to, laws and regulations
relating to the tax refund industry and the insurance premium
finance industry; our relationship with our primary regulators, the
Office of the Comptroller of the Currency and the Federal Reserve,
as well as the Federal Deposit Insurance Corporation, which insures
MetaBank’s deposit accounts up to applicable limits; technological
changes, including, but not limited to, the protection of
electronic files or databases; acquisitions; litigation risk, in
general, including, but not limited to, those risks involving
MetaBank's divisions; the growth of the Company’s business, as well
as expenses related thereto; continued maintenance by MetaBank of
its status as a well-capitalized institution, particularly in light
of our growing deposit base, a portion of which has been
characterized as “brokered;” changes in consumer spending and
saving habits; and the success of the Company at maintaining its
high quality asset level and managing and collecting assets of
borrowers in default should problem assets increase.
The foregoing list of factors is not exclusive.
We caution you not to place undue reliance on these forward-looking
statements. The forward-looking statements included in this press
release speak only as of the date hereof. Additional discussions of
factors affecting the Company’s business and prospects are
reflected under the caption “Risk Factors” and in other sections of
the Company’s Annual Report on Form 10-K for the Company’s fiscal
year ended September 30, 2018, and in other filings made with the
SEC. The Company expressly disclaims any intent or obligation to
update any forward-looking statements, whether written or oral,
that may be made from time to time by or on behalf of the Company
or its subsidiaries, whether as a result of new information,
changed circumstances, or future events or for any other
reason.
Condensed Consolidated Statements of
Operations (Unaudited)(Dollars in Thousands, Except Share
and Per Share Data(1))
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
ASSETS |
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
Cash and cash equivalents |
$ |
156,461 |
|
|
$ |
164,169 |
|
|
99,977 |
|
|
$ |
71,276 |
|
|
$ |
107,563 |
|
Investment securities available for sale, at fair
value |
1,081,663 |
|
|
1,340,870 |
|
|
1,484,160 |
|
|
1,349,642 |
|
|
1,417,012 |
|
Mortgage-backed securities available for sale, at
fair value |
413,493 |
|
|
354,186 |
|
|
364,065 |
|
|
575,999 |
|
|
654,890 |
|
Investment securities held to maturity, at
cost |
146,992 |
|
|
153,075 |
|
|
163,893 |
|
|
215,850 |
|
|
226,308 |
|
Mortgage-backed securities held to maturity, at
cost |
7,606 |
|
|
7,661 |
|
|
7,850 |
|
|
8,218 |
|
|
8,393 |
|
Loans held for sale |
59,745 |
|
|
33,560 |
|
|
15,606 |
|
|
— |
|
|
— |
|
Loans and leases |
3,437,980 |
|
|
3,329,498 |
|
|
2,944,739 |
|
|
1,597,294 |
|
|
1,517,616 |
|
Allowance for loan and lease losses |
(48,672 |
) |
|
(21,290 |
) |
|
(13,040 |
) |
|
(21,950 |
) |
|
(27,078 |
) |
Federal Home Loan Bank Stock, at cost |
7,436 |
|
|
15,600 |
|
|
23,400 |
|
|
7,446 |
|
|
17,846 |
|
Accrued interest receivable |
20,281 |
|
|
22,076 |
|
|
22,016 |
|
|
17,825 |
|
|
17,604 |
|
Premises, furniture, and equipment, net |
45,457 |
|
|
44,299 |
|
|
40,458 |
|
|
20,374 |
|
|
20,278 |
|
Rental equipment, net |
140,087 |
|
|
146,815 |
|
|
107,290 |
|
|
— |
|
|
— |
|
Bank-owned life insurance |
88,565 |
|
|
87,934 |
|
|
87,293 |
|
|
86,655 |
|
|
86,021 |
|
Foreclosed real estate and repossessed
assets |
29,548 |
|
|
31,548 |
|
|
31,638 |
|
|
29,922 |
|
|
30,050 |
|
Goodwill |
307,464 |
|
|
303,270 |
|
|
303,270 |
|
|
98,723 |
|
|
98,723 |
|
Intangible assets |
60,506 |
|
|
66,366 |
|
|
70,719 |
|
|
46,098 |
|
|
47,724 |
|
Prepaid assets |
26,597 |
|
|
31,483 |
|
|
27,906 |
|
|
23,211 |
|
|
26,342 |
|
Deferred taxes |
19,079 |
|
|
23,607 |
|
|
18,737 |
|
|
23,025 |
|
|
20,939 |
|
Other assets |
49,754 |
|
|
48,038 |
|
|
35,090 |
|
|
19,551 |
|
|
31,462 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
6,050,042 |
|
|
$ |
6,182,765 |
|
|
5,835,067 |
|
|
$ |
4,169,159 |
|
|
$ |
4,301,693 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Noninterest-bearing checking |
$ |
3,034,428 |
|
|
$ |
2,739,757 |
|
|
2,405,274 |
|
|
$ |
2,637,987 |
|
|
$ |
2,850,886 |
|
Interest-bearing
checking |
183,492 |
|
|
128,662 |
|
|
111,587 |
|
|
103,065 |
|
|
123,397 |
|
Savings deposits |
59,978 |
|
|
52,229 |
|
|
54,765 |
|
|
57,356 |
|
|
65,345 |
|
Money market
deposits |
56,563 |
|
|
54,559 |
|
|
51,995 |
|
|
45,115 |
|
|
48,070 |
|
Time certificates of deposit |
154,401 |
|
|
170,629 |
|
|
276,180 |
|
|
57,151 |
|
|
71,712 |
|
Wholesale deposits |
1,481,445 |
|
|
1,790,611 |
|
|
1,531,186 |
|
|
620,959 |
|
|
181,087 |
|
Total
deposits |
4,970,307 |
|
|
4,936,447 |
|
|
4,430,987 |
|
|
3,521,633 |
|
|
3,340,497 |
|
Short-term debt |
11,583 |
|
|
231,293 |
|
|
425,759 |
|
|
27,290 |
|
|
315,777 |
|
Long-term debt |
99,800 |
|
|
88,983 |
|
|
88,963 |
|
|
85,580 |
|
|
85,572 |
|
Accrued interest payable |
9,239 |
|
|
11,280 |
|
|
7,794 |
|
|
3,705 |
|
|
1,315 |
|
Accrued expenses and other liabilities |
135,404 |
|
|
144,034 |
|
|
133,838 |
|
|
87,038 |
|
|
114,829 |
|
Total
liabilities |
5,226,333 |
|
|
5,412,037 |
|
|
5,087,341 |
|
|
3,725,246 |
|
|
3,857,990 |
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Preferred stock, 3,000,000 shares authorized, no
shares issued or outstanding at March 31, 2019, December 31, 2018,
September 30, 2018, June 30, 2018, and March 31, 2018 |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Common stock, $.01 par value; 90,000,000 shares
authorized, 39,565,496, 39,494,919, 39,192,063, 29,122,596, and
29,119,718 shares issued and 39,450,938, 39,405,508, 39,167,280,
29,101,605, and 29,098,773 shares outstanding at March 31, 2019,
December 31, 2018, September 30, 2018, June 30, 2018, and March 31,
2018 |
395 |
|
|
394 |
|
|
393 |
|
|
291 |
|
|
291 |
|
Common stock, Nonvoting, $.01 par value;
3,000,000 shares authorized, no shares issued or outstanding at
March 31, 2019, December 31, 2018, September 30, 2018, June 30,
2018, and March 31, 2018 |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Additional paid-in capital |
576,406 |
|
|
572,156 |
|
|
565,811 |
|
|
267,610 |
|
|
265,491 |
|
Retained earnings |
258,600 |
|
|
228,453 |
|
|
213,048 |
|
|
206,284 |
|
|
200,753 |
|
Accumulated other comprehensive (loss)
income |
(10,264 |
) |
|
(29,186 |
) |
|
(33,111 |
) |
|
(28,601 |
) |
|
(21,166 |
) |
Treasury stock, at cost, 114,558, 89,411, 24,783,
20,991, and 20,945 common shares at March 31, 2019, December 31,
2018, September 30, 2018, June 30, 2018, and March 31, 2018 |
(4,956 |
) |
|
(4,356 |
) |
|
(1,989 |
) |
|
(1,671 |
) |
|
(1,666 |
) |
Total equity attributable
to parent |
820,181 |
|
|
767,461 |
|
|
744,152 |
|
|
443,913 |
|
|
443,703 |
|
Non-controlling interest |
3,528 |
|
|
3,267 |
|
|
3,574 |
|
|
— |
|
|
— |
|
Total stockholders’
equity |
823,709 |
|
|
770,728 |
|
|
747,726 |
|
|
443,913 |
|
|
443,703 |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity |
$ |
6,050,042 |
|
|
$ |
6,182,765 |
|
|
5,835,067 |
|
|
$ |
4,169,159 |
|
|
$ |
4,301,693 |
|
|
(1) All share and per share data
reported in this release for all periods presented has been
adjusted to reflect the 3-for-1 forward stock split effected by the
Company on October 4, 2018. |
|
Consolidated Statements of Operations
(Unaudited)(Dollars in Thousands, Except Share and Per
Share Data(1))
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
December 31, |
|
|
|
March 31, |
|
March 31, |
|
March 31, 2019 |
|
2018 |
|
March 31, 2018 |
|
2019 |
|
2018 |
Interest and dividend income: |
|
|
|
|
|
|
|
|
|
Loans and leases, including
fees |
$ |
73,670 |
|
|
$ |
60,498 |
|
|
$ |
17,844 |
|
|
$ |
134,168 |
|
|
$ |
34,287 |
|
Mortgage-backed securities |
2,861 |
|
|
2,698 |
|
|
4,047 |
|
|
5,559 |
|
|
7,805 |
|
Other investments |
11,763 |
|
|
11,780 |
|
|
11,480 |
|
|
23,543 |
|
|
22,136 |
|
|
88,294 |
|
|
74,976 |
|
|
33,371 |
|
|
163,270 |
|
|
64,228 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
Deposits |
14,740 |
|
|
10,596 |
|
|
2,957 |
|
|
25,336 |
|
|
4,842 |
|
FHLB advances and other
borrowings |
2,204 |
|
|
4,108 |
|
|
3,009 |
|
|
6,312 |
|
|
5,785 |
|
|
16,944 |
|
|
14,704 |
|
|
5,966 |
|
|
31,648 |
|
|
10,627 |
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
71,350 |
|
|
60,272 |
|
|
27,405 |
|
|
131,622 |
|
|
53,601 |
|
|
|
|
|
|
|
|
|
|
|
Provision for loan for lease losses |
33,318 |
|
|
9,099 |
|
|
18,343 |
|
|
42,417 |
|
|
19,411 |
|
|
|
|
|
|
|
|
|
|
|
Net interest income after
provision for loan and lease losses |
38,032 |
|
|
51,173 |
|
|
9,062 |
|
|
89,205 |
|
|
34,190 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
Refund transfer product fees |
31,601 |
|
|
261 |
|
|
33,803 |
|
|
31,862 |
|
|
33,995 |
|
Tax advance product fees |
33,038 |
|
|
1,685 |
|
|
33,838 |
|
|
34,723 |
|
|
35,785 |
|
Card fees |
23,052 |
|
|
19,351 |
|
|
26,856 |
|
|
42,403 |
|
|
52,103 |
|
Rental income |
9,890 |
|
|
10,890 |
|
|
— |
|
|
20,780 |
|
|
— |
|
Loan and lease fees |
925 |
|
|
1,247 |
|
|
1,042 |
|
|
2,173 |
|
|
2,334 |
|
Bank-owned life insurance |
631 |
|
|
642 |
|
|
650 |
|
|
1,273 |
|
|
1,319 |
|
Deposit fees |
2,093 |
|
|
1,938 |
|
|
982 |
|
|
4,031 |
|
|
1,830 |
|
Gain (loss) on sale of securities
available-for-sale, net |
231 |
|
|
(22 |
) |
|
(166 |
) |
|
209 |
|
|
(1,176 |
) |
Gain on sale of loans and
leases |
1,085 |
|
|
867 |
|
|
— |
|
|
1,951 |
|
|
— |
|
Gain (loss) on foreclosed real
estate |
(200 |
) |
|
15 |
|
|
— |
|
|
(185 |
) |
|
(19 |
) |
Other income |
2,679 |
|
|
877 |
|
|
414 |
|
|
3,556 |
|
|
516 |
|
Total noninterest
income |
105,025 |
|
|
37,751 |
|
|
97,419 |
|
|
142,776 |
|
|
126,687 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
Compensation and benefits |
49,164 |
|
|
33,010 |
|
|
32,172 |
|
|
82,174 |
|
|
54,512 |
|
Refund transfer product
expense |
7,181 |
|
|
10 |
|
|
9,871 |
|
|
7,191 |
|
|
9,972 |
|
Tax advance product expense |
2,225 |
|
|
452 |
|
|
1,474 |
|
|
2,677 |
|
|
1,754 |
|
Card processing |
6,971 |
|
|
7,085 |
|
|
7,190 |
|
|
14,056 |
|
|
13,730 |
|
Occupancy and equipment |
7,212 |
|
|
6,458 |
|
|
4,477 |
|
|
13,670 |
|
|
9,367 |
|
Operating lease equipment
depreciation |
4,485 |
|
|
7,765 |
|
|
— |
|
|
12,251 |
|
|
— |
|
Legal and consulting |
4,308 |
|
|
3,969 |
|
|
3,239 |
|
|
8,277 |
|
|
5,655 |
|
Marketing |
585 |
|
|
539 |
|
|
668 |
|
|
1,124 |
|
|
1,221 |
|
Data processing |
321 |
|
|
437 |
|
|
243 |
|
|
758 |
|
|
657 |
|
Intangible amortization |
5,596 |
|
|
4,383 |
|
|
2,731 |
|
|
9,978 |
|
|
4,412 |
|
Impairment expense |
9,660 |
|
|
— |
|
|
— |
|
|
9,660 |
|
|
— |
|
Other expense |
12,546 |
|
|
10,187 |
|
|
6,432 |
|
|
22,733 |
|
|
11,259 |
|
Total noninterest
expense |
110,254 |
|
|
74,295 |
|
|
68,497 |
|
|
184,549 |
|
|
112,539 |
|
|
|
|
|
|
|
|
|
|
|
Income before income tax
expense |
32,803 |
|
|
14,629 |
|
|
37,984 |
|
|
47,432 |
|
|
48,338 |
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) expense |
(395 |
) |
|
(1,691 |
) |
|
6,548 |
|
|
(2,086 |
) |
|
12,232 |
|
|
|
|
|
|
|
|
|
|
|
Net income before noncontrolling
interest |
33,198 |
|
|
16,320 |
|
|
31,436 |
|
|
49,518 |
|
|
36,106 |
|
Net income attributable to
noncontrolling interest |
1,078 |
|
|
922 |
|
|
— |
|
|
2,000 |
|
|
— |
|
Net income attributable to
parent |
$ |
32,120 |
|
|
$ |
15,398 |
|
|
$ |
31,436 |
|
|
$ |
47,518 |
|
|
$ |
36,106 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.81 |
|
|
$ |
0.39 |
|
|
$ |
1.08 |
|
|
$ |
1.21 |
|
|
$ |
1.24 |
|
Diluted |
$ |
0.81 |
|
|
$ |
0.39 |
|
|
$ |
1.08 |
|
|
$ |
1.20 |
|
|
$ |
1.24 |
|
Shares used in computing earnings per
share |
|
|
|
|
|
|
|
|
|
Basic |
39,429,595 |
|
|
39,335,054 |
|
|
29,061,180 |
|
|
39,381,682 |
|
|
29,015,376 |
|
Diluted |
39,496,832 |
|
|
39,406,507 |
|
|
29,180,136 |
|
|
39,450,263 |
|
|
29,130,414 |
|
|
(1) All share and per share data
reported in this release for all periods presented has been
adjusted to reflect the 3-for-1 forward stock split effected by the
Company on October 4, 2018. |
|
Average Balances, Interest Rates and Yields
The following table presents, for the periods indicated, the
total dollar amount of interest income from average
interest-earning assets and the resulting yields, as well as the
interest expense on average interest-bearing liabilities, expressed
both in dollars and rates. Only the yield/rate reflects
tax-equivalent adjustments. Non-accruing loans and leases have been
included in the table as loans carrying a zero yield.
|
|
|
|
Three Months Ended March 31, |
2019 |
|
2018 |
(Dollars in Thousands) |
Average Outstanding
Balance |
|
Interest Earned /
Paid |
|
Yield / Rate(1) |
|
Average Outstanding
Balance |
|
Interest Earned /
Paid |
|
Yield / Rate(2) |
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
Cash
& fed funds sold |
$ |
281,069 |
|
|
$ |
1,914 |
|
|
2.76 |
% |
|
$ |
132,355 |
|
|
$ |
722 |
|
|
2.21 |
% |
Mortgage-backed securities |
374,096 |
|
|
2,861 |
|
|
3.10 |
% |
|
642,164 |
|
|
4,047 |
|
|
2.56 |
% |
Tax
exempt investment securities |
926,156 |
|
|
6,138 |
|
|
3.40 |
% |
|
1,431,974 |
|
|
9,001 |
|
|
3.38 |
% |
Asset-backed securities |
285,783 |
|
|
2,677 |
|
|
3.80 |
% |
|
112,301 |
|
|
1,220 |
|
|
4.41 |
% |
Other
investment securities |
142,452 |
|
|
1,034 |
|
|
2.95 |
% |
|
76,081 |
|
|
537 |
|
|
2.86 |
% |
Total
investments |
1,728,487 |
|
|
12,710 |
|
|
3.36 |
% |
|
2,262,520 |
|
|
14,805 |
|
|
3.18 |
% |
Commercial finance loans and leases |
1,649,973 |
|
|
41,954 |
|
|
10.31 |
% |
|
249,320 |
|
|
3,009 |
|
|
4.90 |
% |
Consumer
finance loans |
327,441 |
|
|
7,289 |
|
|
9.03 |
% |
|
197,134 |
|
|
3,218 |
|
|
6.62 |
% |
Tax
services loans |
369,331 |
|
|
8,204 |
|
|
9.01 |
% |
|
416,625 |
|
|
833 |
|
|
0.81 |
% |
Warehouse
finance loans |
181,781 |
|
|
2,789 |
|
|
6.22 |
% |
|
— |
|
|
— |
|
|
— |
% |
National
lending loans and leases |
2,528,526 |
|
|
60,236 |
|
|
9.66 |
% |
|
863,079 |
|
|
7,060 |
|
|
3.32 |
% |
Community
banking loans |
1,181,294 |
|
|
13,434 |
|
|
4.61 |
% |
|
991,089 |
|
|
10,784 |
|
|
4.41 |
% |
Total
loans and leases |
3,709,820 |
|
|
73,670 |
|
|
8.05 |
% |
|
1,854,168 |
|
|
17,844 |
|
|
3.90 |
% |
Total
interest-earning assets |
$ |
5,719,376 |
|
|
$ |
88,294 |
|
|
6.38 |
% |
|
$ |
4,249,043 |
|
|
$ |
33,371 |
|
|
3.46 |
% |
Non-interest-earning assets |
1,068,318 |
|
|
|
|
|
|
453,759 |
|
|
|
|
|
Total
assets |
$ |
6,787,694 |
|
|
|
|
|
|
$ |
4,702,802 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking |
$ |
148,640 |
|
|
$ |
78 |
|
|
0.21 |
% |
|
$ |
100,804 |
|
|
$ |
51 |
|
|
0.20 |
% |
Savings |
56,048 |
|
|
9 |
|
|
0.07 |
% |
|
59,634 |
|
|
9 |
|
|
0.06 |
% |
Money
markets |
57,932 |
|
|
92 |
|
|
0.64 |
% |
|
48,812 |
|
|
27 |
|
|
0.22 |
% |
Time
deposits |
148,384 |
|
|
715 |
|
|
1.95 |
% |
|
118,933 |
|
|
344 |
|
|
1.17 |
% |
Wholesale
deposits |
2,283,049 |
|
|
13,846 |
|
|
2.46 |
% |
|
685,025 |
|
|
2,526 |
|
|
1.50 |
% |
Total
interest-bearing deposits |
2,694,053 |
|
|
14,740 |
|
|
2.22 |
% |
|
1,013,208 |
|
|
2,957 |
|
|
1.18 |
% |
Overnight
fed funds purchased |
103,600 |
|
|
637 |
|
|
2.49 |
% |
|
407,789 |
|
|
1,679 |
|
|
1.67 |
% |
FHLB
advances |
— |
|
|
— |
|
|
— |
% |
|
2,333 |
|
|
9 |
|
|
1.56 |
% |
Subordinated debentures |
73,542 |
|
|
1,162 |
|
|
6.41 |
% |
|
73,395 |
|
|
1,114 |
|
|
6.15 |
% |
Other
borrowings |
39,610 |
|
|
405 |
|
|
4.14 |
% |
|
19,602 |
|
|
207 |
|
|
4.29 |
% |
Total
borrowings |
216,752 |
|
|
2,204 |
|
|
4.12 |
% |
|
503,119 |
|
|
3,009 |
|
|
2.43 |
% |
Total
interest-bearing liabilities |
2,910,805 |
|
|
16,944 |
|
|
2.36 |
% |
|
1,516,327 |
|
|
5,966 |
|
|
1.60 |
% |
Non-interest bearing deposits |
2,953,275 |
|
|
— |
|
|
— |
% |
|
2,656,516 |
|
|
— |
|
|
— |
% |
Total deposits
and interest-bearing liabilities |
$ |
5,864,080 |
|
|
$ |
16,944 |
|
|
1.17 |
% |
|
$ |
4,172,843 |
|
|
$ |
5,966 |
|
|
0.58 |
% |
Other
non-interest-bearing liabilities |
129,525 |
|
|
|
|
|
|
86,675 |
|
|
|
|
|
Total
liabilities |
5,993,605 |
|
|
|
|
|
|
4,259,518 |
|
|
|
|
|
Shareholders' equity |
794,089 |
|
|
|
|
|
|
443,284 |
|
|
|
|
|
Total
liabilities and shareholders' equity |
$ |
6,787,694 |
|
|
|
|
|
|
$ |
4,702,802 |
|
|
|
|
|
Net interest income and
net interest rate spread including non-interest-bearing
deposits |
|
|
$ |
71,350 |
|
|
5.21 |
% |
|
|
|
$ |
27,405 |
|
|
2.88 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin |
|
|
|
|
5.06 |
% |
|
|
|
|
|
2.61 |
% |
Tax-equivalent
effect |
|
|
|
|
0.12 |
% |
|
|
|
|
|
0.28 |
% |
Net interest
margin, tax-equivalent(3) |
|
|
|
|
5.18 |
% |
|
|
|
|
|
2.89 |
% |
|
(1) Tax rate used to arrive at the TEY for the three months
ended March 31, 2019 was 21%.(2) Tax rate used to arrive at the TEY
for the three months ended March 31, 2018 was 24.53%.(3) Net
interest margin expressed on a fully-taxable-equivalent basis ("net
interest margin, tax-equivalent") is a non-GAAP financial measure.
The tax-equivalent adjustment to net interest income recognizes the
estimated income tax savings when comparing taxable and tax-exempt
assets and adjusting for federal and state exemption of interest
income. The Company believes that it is a standard practice in the
banking industry to present net interest margin expressed on a
fully-taxable-equivalent basis and, accordingly, believes the
presentation of this non-GAAP financial measure may be useful for
peer comparison purposes.
|
Selected Financial Information |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
As of and for the three months ended: |
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
Equity to total
assets |
13.61 |
% |
|
12.47 |
% |
|
12.81 |
% |
|
10.65 |
% |
|
10.31 |
% |
Book value per common
share outstanding |
$ |
20.88 |
|
|
$ |
19.56 |
|
|
$ |
19.09 |
|
|
$ |
15.25 |
|
|
$ |
15.25 |
|
Tangible book value per
common share outstanding |
$ |
11.55 |
|
|
$ |
10.18 |
|
|
$ |
9.54 |
|
|
$ |
10.28 |
|
|
$ |
10.22 |
|
Tangible book value per
common share outstanding excluding AOCI |
$ |
11.81 |
|
|
$ |
10.92 |
|
|
$ |
10.39 |
|
|
$ |
11.26 |
|
|
$ |
10.94 |
|
Common shares
outstanding |
39,450,938 |
|
|
39,405,508 |
|
|
39,167,280 |
|
|
29,101,605 |
|
|
29,098,773 |
|
Non-performing assets
to total assets |
0.68 |
% |
|
0.73 |
% |
|
0.72 |
% |
|
0.86 |
% |
|
0.84 |
% |
Non-performing loans
and leases to total loans and leases |
0.28 |
% |
|
0.42 |
% |
|
0.35 |
% |
|
0.36 |
% |
|
0.40 |
% |
Net interest
margin |
5.06 |
% |
|
4.60 |
% |
|
4.05 |
% |
|
2.94 |
% |
|
2.61 |
% |
Net interest margin,
tax-equivalent |
5.18 |
% |
|
4.76 |
% |
|
4.27 |
% |
|
3.23 |
% |
|
2.89 |
% |
Return on average
assets |
1.89 |
% |
|
1.03 |
% |
|
0.65 |
% |
|
0.64 |
% |
|
2.67 |
% |
Return on average
equity |
16.18 |
% |
|
8.19 |
% |
|
5.34 |
% |
|
6.11 |
% |
|
28.37 |
% |
Full-time equivalent
employees |
1,231 |
|
|
1,229 |
|
|
1,219 |
|
|
932 |
|
|
916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Quarterly Expenses |
(Dollars in Thousands) |
Actual |
Anticipated |
|
Mar 31, |
Jun 30, |
Sep 30, |
Dec 31, |
Mar 31, |
Jun 30, |
Sep 30, |
Dec 31, |
Mar 31, |
For the Three Months Ended |
2019 |
2019 |
2019 |
2019 |
2020 |
2020 |
2020 |
2020 |
2021 |
|
|
|
|
|
|
|
|
|
|
Amortization of
Intangibles (1) |
$ |
5,596 |
|
$ |
4,375 |
|
$ |
3,357 |
|
$ |
2,675 |
|
$ |
3,400 |
|
$ |
2,632 |
|
$ |
2,278 |
|
$ |
2,675 |
|
$ |
2,752 |
|
Executive Officer Stock
Compensation (2) |
$ |
917 |
|
$ |
927 |
|
$ |
937 |
|
$ |
679 |
|
$ |
669 |
|
$ |
669 |
|
$ |
676 |
|
$ |
485 |
|
$ |
473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) These amounts are based upon the current
reporting period’s intangible assets only. This table makes
no assumption for expenses related to future acquired intangible
assets.
(2) These amounts are based upon the long-term
employment agreements signed in the first and second quarters of
fiscal 2017 by the Company’s three highest paid executives at that
time. This table makes no assumption for expenses related to
any additional future agreements entered into, or to be entered
into, after such quarters. The amounts in this table were not
impacted by the Executive Separation Agreement entered into by the
Company as of January 16, 2019 and filed with the Securities and
Exchange Commission on January 17, 2019.
About Meta Financial Group®
Meta Financial Group, Inc. ® (Nasdaq: CASH) is
the holding company for the financial services company MetaBank®
(“Meta”). Founded in 1954, Meta has grown to operate in several
different financial sectors: payments, commercial finance, tax
services, community banking and consumer lending. Meta works with
high-value niche industries, strategic-growth companies and
technology adopters to grow their businesses and build more
profitable customer relationships. Meta tailors solutions for bank
and non-bank businesses, and provides a focused collaborative
approach. The organization is helping to shape the evolving
financial services landscape by directly investing in innovation
and complementary businesses that strategically expand its suite of
services. Meta has a national presence and over 1,200 employees,
with corporate headquarters in Sioux Falls, S.D. For more
information, visit the Meta Financial Group website or
LinkedIn.
Investor Relations and Media
Contact:Brittany Kelley ElsasserDirector of Investor
Relations605-362-2423bkelley@metabank.com
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