author

Author: Don Obrien

Meta Financial Group, Inc.® Announces Results for Fourth Quarter and Fiscal Year 2021


SIOUX FALLS, S.D.–()–Meta Financial Group, Inc.® (Nasdaq: CASH) (“Meta” or the “Company”) reported net income of $15.9 million, or $0.50 per share, for the three months ended September 30, 2021, compared to net income of $13.2 million, or $0.38 per share, for the three months ended September 30, 2020. The Company reported record net income of $141.7 million, or $4.38 per share, for the fiscal year ended September 30, 2021, compared to net income of $104.7 million, or $2.94 per diluted share for the fiscal year ended September 30, 2020.

“MetaBank ended fiscal year 2021 on a strong note, as we made significant progress against our three key strategic initiatives, positioning the firm for continued improvement,” said CEO Brett Pharr. “As we start the new fiscal year, our Banking-as-a-Service pipeline has never been stronger and we will continue to advance our mission of financial inclusion for all®.”

“I also want to thank our previous CEO Brad Hanson for his contributions over nearly 20 years. His efforts, together with those of our team, built the leadership position that Meta enjoys today,” Pharr added.

“We achieved record earnings this past fiscal year that generated excess capital for our shareholders, as reflected in the Board’s confidence in authorizing the new share repurchase program we announced last month,” said Executive Vice President and CFO Glen Herrick. “We have a balanced approach to capital deployment and will continue to evaluate strategies that create shareholder value.”

Business Development Highlights for the 2021 Fiscal Fourth Quarter and Full Fiscal Year 2021

  • Named the Visa card issuer, in conjunction with Blackhawk Network, for the Excluded Workers Fund, a New York State Department of Labor program that provides one-time payments to certain New Yorkers who lost income due to COVID-19.
  • Recognized a net unrealized gain of $4.1 million on a prior investment in MoneyLion Inc. (“MoneyLion”) following the completion of its de-SPAC’ing process and listing on the New York Stock Exchange on September 22, 2021.
  • Expanded our renewable energy financing, originating $101.1 million for the fiscal year 2021, resulting in $26.5 million in total net investment tax credits.
  • Announced a new share repurchase program and during the 2021 fiscal fourth quarter repurchased 234,297 shares, at an average price of $51.18, reflecting the momentum of the business and confidence in the Company’s strategy and growth trajectory. An additional 636,100 shares were purchased in October 2021 through October 22, 2021.
  • Bradley C. Hanson, President and Chief Executive Officer of the Company retired from his positions at Meta Financial and MetaBank. He will remain on the Company’s Board until the next annual stockholders’ meeting, expected to take place in February 2022. He also will serve as a Strategic Advisor to Meta on industry and partner relations until the end of 2022. The Board appointed Brett L. Pharr as Chief Executive Officer and Anthony M. Sharett as President of Meta Financial Group and MetaBank effective October 1, 2021. For additional information, please see the associated press release from September 7, 2021.
  • Subsequent to September 30, 2021, MetaBank sold $30.2 million in community banking loans to Central Bank and has agreements in place to sell another approximately $161.0 million. Following the sale, the legacy community bank loan portfolio will be less than $8 million. The Company expects community bank balances to be at $0 at the end of the first fiscal quarter of 2022. Included in the sales, are approximately $108.0 million of substandard and doubtful loans, of which $14.9 million are nonaccrual loans, as of September 30, 2021, representing 39% of MetaBank’s substandard and doubtful loan and lease balances and 44% of our nonaccrual balances.

Financial Highlights for the 2021 Fiscal Fourth Quarter

  • Total revenue for the fourth quarter was $120.2 million, an increase of $14.9 million compared to the same quarter in fiscal 2020 primarily driven by higher net interest income, payments fee income and $4.1 million in other income related to the MoneyLion valuation.
  • Operating efficiency ratio improved 146 basis points to 62.5% at September 30, 2021 compared to 64.0% at September 30, 2020. See non-GAAP reconciliation table below.
  • Net interest income for the fourth quarter was $70.7 million, an increase of $6.2 million compared to $64.5 million in the fourth quarter last year.
  • Net interest margin (“NIM”) improved to 4.35% for the fourth quarter from 3.77% during the same period of last year, chiefly due to the decrease in cash associated with the Company’s participation in the Economic Impact Program (“EIP”) program, as well as an increase in commercial and warehouse finance loans and leases.
  • Total gross loans and leases at September 30, 2021 increased $293.7 million, to $3.61 billion, or 9%, compared to September 30, 2020 and increased $112.6 million, or 3%, when compared to June 30, 2021. The increase was primarily driven by growth in commercial finance, warehouse finance and consumer finance loans partially offset by a decrease in community bank loans, which was driven by a loan sale of $75.1 million during the quarter.

Net Interest Income

Net interest income for the fourth quarter of fiscal 2021 was $70.7 million, an increase of 10% from the same quarter in fiscal 2020. The increase was mainly attributable to the continued optimization of our earning asset and liability mix, along with increased loan balances.

The fourth quarter average outstanding balance of loans and leases increased $109.3 million compared to the prior year quarter, primarily due to increases in the commercial finance, warehouse finance and consumer finance loan and lease portfolios, partially offset by a decrease in the retained community bank portfolio. The Company’s average interest-earning assets for the fourth quarter decreased by $367.8 million to $6.44 billion compared with the same quarter in fiscal 2020, primarily due to the decrease in cash and fed funds sold, partially offset by growth in total investments and total loans and leases.

Fiscal 2021 fourth quarter NIM increased to 4.35% from 3.77% in the fourth quarter of last year. The overall reported tax-equivalent yield (“TEY”) on average earning asset yields increased 43 basis points to 4.45% compared to the prior year quarter, primarily driven by a reduction in low-yielding cash held at the Federal Reserve. The TEY on the securities portfolio was 1.50% compared to 1.78% for the comparable period last year.

The Company’s cost of funds for all deposits and borrowings averaged 0.09% during the fiscal 2021 fourth quarter, compared to 0.23% during the prior year quarter, primarily driven by a reduction in wholesale deposit balances. The Company’s overall cost of deposits was 0.01% in the fiscal fourth quarter of 2021, compared to 0.12% in the same quarter last year.

Noninterest Income

Fiscal 2021 fourth quarter noninterest income increased to $49.5 million, compared to $40.8 million for the same period of the prior year. The significant increase was primarily driven by payments fee income, a net unrealized gain of $4.1 million in the MoneyLion investment and $1.5 million of other income on a student loan insurance recovery, which were partially offset by a net loss on a sale of community bank loans in the quarter of $1.8 million. The payments fee income was aided by an increase in activity related to government stimulus programs.

Noninterest Expense

Noninterest expense increased 17% to $93.6 million for the fiscal 2021 fourth quarter, from $80.3 million for the same quarter last year. The increase in expense was primarily driven by $9.0 million in one-time technology and product investments. CEO transition expenses of $1.3 million related to accelerated vesting of CEO shares and associated professional expenses also contributed to the year-over-year increase.

Income Tax Expense

The Company recorded income tax expense of $1.1 million, representing an effective tax rate of 6.2%, for the fiscal 2021 fourth quarter, compared to $1.8 million, representing an effective tax rate of 11.2%, for the fourth quarter last year.

The Company originated $29.1 million in solar leases during the fiscal 2021 fourth quarter, compared to $41.1 million in last year’s fourth quarter. Investment tax credits related to solar leases are recognized ratably based on income throughout each fiscal year. The timing and impact of future solar tax credits are expected to vary from period to period, and Meta intends to undertake only those tax credit opportunities that meet the Company’s underwriting and return criteria.

Investments, Loans and Leases

 

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

 

September 30,

2020

Total investments

$

1,921,568

 

 

$

1,981,852

 

 

$

1,552,892

 

 

$

1,309,452

 

 

$

1,360,712

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

 

 

 

 

 

 

 

 

Consumer credit products

23,111

 

 

12,582

 

 

6,233

 

 

234

 

 

962

 

SBA/USDA

33,083

 

 

57,208

 

 

61,402

 

 

32,983

 

 

52,542

 

Community Bank

 

 

18,115

 

 

 

 

100,442

 

 

130,073

 

Total loans held for sale

56,194

 

 

87,905

 

 

67,635

 

 

133,659

 

 

183,577

 

 

 

 

 

 

 

 

 

 

 

Term lending

961,019

 

 

920,279

 

 

891,414

 

 

881,306

 

 

805,323

 

Asset based lending

300,225

 

 

263,237

 

 

248,735

 

 

242,298

 

 

182,419

 

Factoring

363,670

 

 

320,629

 

 

277,612

 

 

275,650

 

 

281,173

 

Lease financing

266,050

 

 

282,940

 

 

308,169

 

 

283,722

 

 

281,084

 

Insurance premium finance

428,867

 

 

417,652

 

 

344,841

 

 

338,227

 

 

337,940

 

SBA/USDA

247,756

 

 

263,709

 

 

331,917

 

 

300,707

 

 

318,387

 

Other commercial finance

157,908

 

 

118,081

 

 

103,234

 

 

101,209

 

 

101,658

 

Commercial Finance

2,725,495

 

 

2,586,527

 

 

2,505,922

 

 

2,423,119

 

 

2,307,984

 

Consumer credit products

129,251

 

 

105,440

 

 

104,842

 

 

88,595

 

 

89,809

 

Other consumer finance

123,606

 

 

122,316

 

 

130,822

 

 

162,423

 

 

134,342

 

Consumer Finance

252,857

 

 

227,756

 

 

235,664

 

 

251,018

 

 

224,151

 

Tax Services

10,405

 

 

41,268

 

 

225,921

 

 

92,548

 

 

3,066

 

Warehouse Finance

419,926

 

 

335,704

 

 

332,456

 

 

318,937

 

 

293,375

 

Community Banking

199,132

 

 

303,984

 

 

348,065

 

 

353,942

 

 

485,564

 

Total gross loans and leases

3,607,815

 

 

3,495,239

 

 

3,648,028

 

 

3,439,564

 

 

3,314,140

 

Allowance for credit losses

(68,281

)

 

(91,208

)

 

(98,892

)

 

(72,389

)

 

(56,188

)

Net deferred loan and lease origination fees

1,748

 

 

1,431

 

 

9,503

 

 

9,111

 

 

8,625

 

Total loans and leases, net of allowance

$

3,541,282

 

 

$

3,405,462

 

 

$

3,558,639

 

 

$

3,376,286

 

 

$

3,266,577

 

The Company’s investment security balances at September 30, 2021 totaled $1.92 billion, as compared to $1.98 billion at June 30, 2021 and $1.36 billion at September 30, 2020.

Total gross loans and leases totaled $3.61 billion at September 30, 2021, as compared to $3.50 billion at June 30, 2021 and $3.31 billion and as compared to September 30, 2020. The primary drivers for the increase on a prior quarter basis were commercial finance, consumer credit, and warehouse finance loans, partially offset by the decrease in community bank and tax service loans.

At September 30, 2021, commercial finance loans, which comprised 76% of the Company’s gross loan and lease portfolio, totaled $2.73 billion, reflecting growth of $139.0 million, or 5%, from June 30, 2021.

As of September 30, 2021, the Company had 370 loans outstanding with total loan balances of $96.0 million originated as part of the Paycheck Protection Program (“PPP”), compared with 458 loans outstanding with total loan balances of $143.3 million for the quarter ended June 30, 2021. In total, 69% of the PPP loan balances were forgiven through September 30, 2021.

Community bank loans held for investment totaled $199.1 million as of September 30, 2021, decreasing as compared to $304.0 million at June 30, 2021 and $485.6 million at September 30, 2020. The Company sold additional loans from the retained Community Bank portfolio in the amount of $75.1 million during the fiscal 2021 fourth quarter, which resulted in a net loss on sale of $1.8 million for the quarter.

Asset Quality

The Company’s allowance for credit losses (“ACL”) totaled $68.3 million at September 30, 2021, a decrease compared to $91.2 million at June 30, 2021 and an increase compared to $56.2 million at September 30, 2020. The decrease in the ACL at September 30, 2021, when compared to June 30, 2021, was primarily due to a $24.3 million decrease in the allowance for seasonal tax services loan portfolio as we recorded season-end charge-downs, a $1.3 million decrease in consumer lending and a $1.0 million decrease in the retained community banking portfolio, partially offset by a $4.3 million increase in commercial finance and $0.1 million increase in warehouse finance.

The $12.1 million year-over-year increase in the ACL was primarily driven by an $18.3 million increase within the commercial finance portfolio and a $3.7 million increase in the consumer lending portfolio. These increases were driven by the 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 increases noted above were partially offset by a $10.0 million reduction within the retained community banking portfolio, which decreased year-over-year.

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)

September 30,

2021

June 30,

2021

March 31,

2021

December 31,

2020

October 1,

2020(1)

September 30,

2020

 

 

 

 

 

 

 

Commercial finance

1.77

%

1.73

%

1.77

%

1.88

%

1.85

%

1.30

%

Consumer finance

2.91

%

3.80

%

4.70

%

4.39

%

4.31

%

1.64

%

Tax services

0.02

%

58.99

%

12.90

%

1.53

%

0.06

%

0.06

%

Warehouse finance

0.10

%

0.10

%

0.10

%

0.10

%

0.10

%

0.10

%

Community bank

6.16

%

4.36

%

4.03

%

4.01

%

3.37

%

4.59

%

Total loans and leases

1.89

%

2.61

%

2.71

%

2.10

%

2.08

%

1.70

%

(1) Represents the Company’s ACL 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 ACL as a percentage of total loans and leases decreased to 1.89% at September 30, 2021 from 2.61% at June 30, 2021. The decrease in the total loans and leases coverage ratio reflected a seasonal reduction in the allowance for the tax services loan portfolios along with a reduction in specific reserves. When excluding the seasonal tax services loans, the ACL as a percentage of total loans and leases decreased to 1.90% at September 30, 2021 from 1.94% at June 30, 2021. The coverage ratio for the commercial finance loan category remained relatively similar to the June 30, 2021 quarter. The consumer finance coverage decreased primarily due to an improved overall macroeconomic outlook and the community bank coverage ratio increased as the majority of the remaining loans are in pandemic stressed industries, such as hospitality and movie theaters. The Company expects to continue to diligently monitor the allowance for credit losses and adjust as necessary in future periods to maintain an appropriate and supportable level.

Activity in the allowance for credit losses for the periods presented was as follows.

(Unaudited)

Three Months Ended

Year Ended

 

September 30, 2021

June 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

(Dollars in thousands)

 

 

 

 

 

Beginning balance

$

91,208

 

$

98,892

 

$

65,747

 

$

56,188

 

$

29,149

 

Adoption of CECL accounting standard

 

 

 

12,773

 

 

Provision – tax services loans

457

 

4,685

 

1,599

 

33,276

 

22,006

 

Provision – all other loans and leases

8,368

 

(36

)

7,381

 

16,663

 

42,770

 

Charge-offs – tax services loans

(24,849

)

(9,505

)

(13,037

)

(34,354

)

(22,834

)

Charge-offs – all other loans and leases

(7,635

)

(5,360

)

(6,015

)

(22,920

)

(18,927

)

Recoveries – tax services loans

51

 

17

 

3

 

1,078

 

830

 

Recoveries – all other loans and leases

681

 

2,515

 

510

 

5,577

 

3,194

 

Ending balance

$

68,281

 

$

91,208

 

$

56,188

 

$

68,281

 

$

56,188

 

Provision for credit losses was $8.8 million for the quarter ended September 30, 2021, compared to $9.0 million for the comparable period in the prior fiscal year. Provision for credit losses was $49.8 million for fiscal year ended September 30, 2021, compared to $64.8 million for the comparable period in the prior fiscal year. The fiscal year-over-year decrease in provision was largely attributable to the ACL build in the prior year stemming from the COVID-19 pandemic. Net charge-offs were $31.8 million for the quarter ended September 30, 2021, compared to $18.5 million for the quarter ended September 30, 2020. The majority of the net charge-offs for the quarter were attributable to seasonal tax-related loan products.

The Company’s past due loans and leases were as follows for the periods presented.

As of September 30, 2021

 

Accruing and Nonaccruing Loans and Leases

 

Nonperforming Loans and Leases

(Dollars in Thousands)

 

30-59

Days

Past Due

 

60-89

Days

Past Due

 

> 89 Days

Past Due

 

Total

Past

Due

 

Current

 

Total Loans

and Leases

Receivable

 

> 89 Days

Past Due

and

Accruing

 

Non-accrual

balance

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial finance

 

$

18,269

 

$

7,388

 

$

15,439

 

$

41,096

 

$

2,684,399

 

$

2,725,495

 

$

12,489

 

$

19,330

 

$

31,819

Consumer finance

 

 

1,676

 

 

812

 

 

1,236

 

 

3,724

 

 

249,133

 

 

252,857

 

 

1,160

 

 

 

 

1,160

Tax services

 

 

 

 

 

 

7,962

 

 

7,962

 

 

2,443

 

 

10,405

 

 

7,962

 

 

 

 

7,962

Warehouse finance

 

 

 

 

 

 

 

 

 

 

419,926

 

 

419,926

 

 

 

 

 

 

Community banking

 

 

 

 

 

 

 

 

 

 

199,132

 

 

199,132

 

 

 

 

14,915

 

 

14,915

Total loans and leases held for investment

 

 

19,945

 

 

8,200

 

 

24,637

 

 

52,782

 

 

3,555,033

 

 

3,607,815

 

 

21,611

 

 

34,245

 

 

55,856

As of June 30, 2021

 

Accruing and Nonaccruing Loans and Leases

 

Nonperforming Loans and Leases

(Dollars in Thousands)

 

30-59

Days

Past Due

 

60-89

Days

Past Due

 

> 89 Days

Past Due

 

Total

Past

Due

 

Current

 

Total Loans

and Leases

Receivable

 

> 89 Days

Past Due

and

Accruing

 

Non-accrual

balance

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial finance

 

$

22,117

 

$

10,650

 

$

8,844

 

$

41,611

 

$

2,544,916

 

$

2,586,527

 

$

4,350

 

$

17,315

 

$

21,665

Consumer finance

 

 

843

 

 

1,009

 

 

525

 

 

2,377

 

 

225,379

 

 

227,756

 

 

469

 

 

 

 

469

Tax services

 

 

 

 

40,958

 

 

 

 

40,958

 

 

310

 

 

41,268

 

 

 

 

 

 

Warehouse finance

 

 

 

 

 

 

 

 

 

 

335,704

 

 

335,704

 

 

 

 

 

 

Community banking

 

 

62

 

 

 

 

1,769

 

 

1,831

 

 

302,153

 

 

303,984

 

 

 

 

19,773

 

 

19,773

Total loans and leases held for investment

 

 

23,022

 

 

52,617

 

 

11,138

 

 

86,777

 

 

3,408,462

 

 

3,495,239

 

 

4,819

 

 

37,088

 

 

41,907

The Company’s nonperforming assets at September 30, 2021 were $61.8 million, representing 0.92% of total assets, compared to $45.1 million, or 0.64% of total assets at June 30, 2021 and $48.0 million, or 0.79% of total assets at September 30, 2020. The changes in the nonperforming assets as a percentage of total assets at September 30, 2021 were driven in large part by a $10.2 million increase in nonperforming assets in the commercial finance portfolio which is primarily due to an administrative timing item that management believes is not a credit concern, and an increase related to the seasonal tax services portfolio that is also timing and not credit-related, partially offset by a decrease in nonperforming assets in the community bank portfolio when compared to both the linked-quarter and the prior year.

The Company’s nonperforming loans and leases at September 30, 2021, were $55.9 million, representing 1.52% of total gross loans and leases, compared to $41.9 million, or 1.17% of total gross loans and leases at June 30, 2021 and $34.0 million, or 0.97% of total gross loans and leases at September 30, 2020. The increases are related to the aforementioned non-credit related increases in nonperforming assets in the commercial finance and tax services portfolios.

Loan and lease balances that were within their active deferment period decreased to $39.1 million at September 30, 2021 from $41.5 million at June 30, 2021.

Meta has revised its credit administration policies and reviewed its loan portfolio to better align with OCC guidance for national banks, a process that began during the quarter ending June 30, 2021 and was substantially completed as of September 30, 2021. These credit policy revisions had an impact on our loan and lease risk ratings, resulting in downgrades of certain credits in several categories. Our loan and collateral management practices have proven effective in managing losses during previous economic cycles; and while we expect this process will result in setting a new baseline for portfolio metrics going forward, it does not indicate a deterioration in our portfolio’s expected performance. Further, these changes do not reflect an increase in credit risk for past or future periods and thus we do not anticipate any increase in losses as a result of these one-time administrative adjustments to these credits’ risk ratings.

The Company has various portfolios of consumer lending and tax services loans that present unique risks that are statistically managed. Due to the unique risks associated with these portfolios, the Company monitors other credit quality indicators in their evaluation of the appropriateness of the allowance for credit losses on these portfolios, and as such, these loans are not included in the asset classification table below. The Company’s loans and leases held for investment by asset classification were as follows for the periods presented.

Asset Classification

Pass

 

Watch

 

Special Mention

 

Substandard

 

Doubtful

 

Total

As of September 30, 2021

(Dollars in Thousands)

Commercial finance

$

2,039,324

 

$

364,713

 

$

170,527

 

$

144,414

 

$

6,517

 

$

2,725,495

Warehouse finance

419,926

 

 

 

 

 

419,926

Community banking

10,314

 

27,121

 

35,916

 

120,238

 

5,543

 

199,132

Total Loans and Leases

$

2,469,564

 

$

391,834

 

$

206,443

 

$

264,652

 

$

12,060

 

$

3,344,553

Asset Classification

Pass

 

Watch

 

Special Mention

 

Substandard

 

Doubtful

 

Total

As of June 30, 2021

(Dollars in Thousands)

Commercial finance

$

2,315,437

 

$

133,124

 

$

55,869

 

$

74,930

 

$

7,166

 

$

2,586,526

Warehouse finance

335,704

 

 

 

 

 

335,704

Community banking

195,721

 

33,494

 

14,574

 

60,196

 

 

303,985

Total Loans and Leases

$

2,846,862

 

$

166,618

 

$

70,443

 

$

135,126

 

$

7,166

 

$

3,226,215

Deposits, Borrowings and Other Liabilities

Total average deposits for the fiscal 2021 fourth quarter decreased by $389.7 million to $6.08 billion compared to the same period in fiscal 2020, primarily due to a reduction in wholesale deposits. Average wholesale deposits decreased $485.3 million, while noninterest-bearing deposits decreased $11.1 million, for the fiscal 2021 fourth quarter when compared to the same period in fiscal 2020.

The average balance of total deposits and interest-bearing liabilities was $6.17 billion for the three-month period ended September 30, 2021, compared to $6.66 billion for the same period in the prior fiscal year, representing a decrease of 7%.

Total end-of-period deposits increased 11% to $5.51 billion at September 30, 2021, compared to $4.98 billion at September 30, 2020. The increase in end-of-period deposits was primarily driven by an increase in noninterest-bearing deposits of $661.6 million, partially offset by a decrease in wholesale deposits of $269.1 million. The increase in noninterest-bearing deposits was driven by government stimulus-related dollars loaded on various partner cards.

Of the 16.5 million prepaid cards issued in conjunction with the three EIP stimulus programs, totaling approximately $24.15 billion, $1.64 billion were outstanding as of September 30, 2021, of which only $69.8 million was on Meta’s balance sheet with the remainder being held by other banks.

Regulatory Capital

The Company and MetaBank remained above the federal regulatory minimum capital requirements at September 30, 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.

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

September 30,

2021 (1)

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

 

September 30,

2020

Company

 

 

 

 

 

 

 

 

 

Tier 1 leverage capital ratio

7.67

%

 

6.85

%

 

4.75

%

 

7.39

%

 

6.58

%

Common equity Tier 1 capital ratio

12.12

%

 

12.76

%

 

11.29

%

 

10.72

%

 

11.78

%

Tier 1 capital ratio

12.46

%

 

13.11

%

 

11.63

%

 

11.07

%

 

12.18

%

Total capital ratio

15.45

%

 

16.18

%

 

14.65

%

 

14.14

%

 

15.30

%

MetaBank

 

 

 

 

 

 

 

 

 

Tier 1 leverage capital ratio

8.69

%

 

7.83

%

 

5.47

%

 

8.60

%

 

7.56

%

Common equity Tier 1 capital ratio

14.11

%

 

14.94

%

 

13.39

%

 

12.87

%

 

13.96

%

Tier 1 capital ratio

14.13

%

 

14.96

%

 

13.40

%

 

12.89

%

 

14.00

%

Total capital ratio

15.38

%

 

16.22

%

 

14.66

%

 

14.14

%

 

15.26

%

(1) September 30, 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)

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

 

September 30,

2020

(Dollars in Thousands)

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

871,884

 

 

$

876,633

 

 

$

835,258

 

 

$

813,210

 

 

$

847,308

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

LESS: Goodwill, net of associated deferred tax liabilities

300,780

 

 

301,179

 

 

301,602

 

 

301,999

 

 

302,396

 

 

LESS: Certain other intangible assets

33,572

 

 

35,100

 

 

36,779

 

 

39,403

 

 

40,964

 

 

LESS: Net deferred tax assets from operating loss and tax credit carry-forwards

22,801

 

 

17,753

 

 

19,306

 

 

24,105

 

 

18,361

 

 

LESS: Net unrealized gains (losses) on available-for-sale securities

7,344

 

 

14,750

 

 

12,458

 

 

19,894

 

 

17,762

 

 

LESS: Non-controlling interest

1,155

 

 

1,490

 

 

1,092

 

 

1,536

 

 

3,603

 

 

ADD: Adoption of Accounting Standards Update 2016-13

8,202

 

 

13,913

 

 

10,439

 

 

10,439

 

 

 

 

Common Equity Tier 1(1)

514,434

 

 

520,274

 

 

474,460

 

 

436,712

 

 

464,222

 

 

Long-term borrowings and other instruments qualifying as Tier 1

13,661

 

 

13,661

 

 

13,661

 

 

13,661

 

 

13,661

 

 

Tier 1 minority interest not included in common equity tier 1 capital

747

 

 

932

 

 

690

 

 

749

 

 

1,894

 

 

Total Tier 1 Capital

528,842

 

 

534,867

 

 

488,811

 

 

451,122

 

 

479,777

 

 

Allowance for credit losses

53,159

 

 

51,317

 

 

53,232

 

 

51,070

 

 

49,343

 

 

Subordinated debentures (net of issuance costs)

73,980

 

 

73,936

 

 

73,892

 

 

73,850

 

 

73,807

 

 

Total qualifying capital

$

655,981

 

 

$

660,119

 

 

$

615,935

 

 

$

576,042

 

 

$

602,927

 

 

(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.

 

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

 

September 30,

2020

(Dollars in Thousands)

 

 

 

 

 

 

 

 

 

Total Stockholders’ Equity

$

871,884

 

 

$

876,633

 

 

$

835,258

 

 

$

813,210

 

 

$

847,308

 

 

Less: Goodwill

309,505

 

 

309,505

 

 

309,505

 

 

309,505

 

 

309,505

 

 

Less: Intangible assets

33,148

 

 

34,898

 

 

36,903

 

 

39,660

 

 

41,692

 

 

Tangible common equity

529,231

 

 

532,230

 

 

488,850

 

 

464,045

 

 

496,111

 

 

Less: Accumulated other comprehensive income (loss) (“AOCI”)

7,599

 

 

15,222

 

 

12,809

 

 

20,119

 

 

17,542

 

 

Tangible common equity excluding AOCI

$

521,632

 

 

$

517,008

 

 

$

476,041

 

 

$

443,926

 

 

$

478,569

 

 

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 Wednesday, October 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 conference call by dialing (844) 200-6205 approximately 10 minutes prior to start time and reference access code 483958. A webcast replay will also be archived at www.metafinancialgroup.com for one year.

Upcoming Investor Events

  • KBW Financial Services Symposium, February 17, 2022 | Boca Raton, FL
  • Raymond James Institutional Investors Conference, March 8, 2022 | Orlando, FL

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; 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 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.

Condensed Consolidated Statements of Financial Condition (Unaudited)

 

(Dollars in Thousands, Except Share Data)

 

ASSETS

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 30,

2020

 

September 30,

2020

Cash and cash equivalents

$

314,019

 

 

 

$

720,243

 

 

 

$

3,724,242

 

 

 

$

1,586,451

 

 

 

$

427,367

 

 

Investment securities available for sale, at fair value

847,870

 

 

 

854,023

 

 

 

921,947

 

 

 

797,363

 

 

 

814,495

 

 

Mortgage-backed securities available for sale, at fair value

1,017,029

 

 

 

1,063,582

 

 

 

558,833

 

 

 

430,761

 

 

 

453,607

 

 

Investment securities held to maturity, at cost

52,944

 

 

 

60,228

 

 

 

67,709

 

 

 

76,176

 

 

 

87,183

 

 

Mortgage-backed securities held to maturity, at cost

3,725

 

 

 

4,019

 

 

 

4,403

 

 

 

5,152

 

 

 

5,427

 

 

Loans held for sale

56,194

 

 

 

87,905

 

 

 

67,635

 

 

 

133,659

 

 

 

183,577

 

 

Loans and leases

3,609,563

 

 

 

3,496,670

 

 

 

3,657,531

 

 

 

3,448,675

 

 

 

3,322,765

 

 

Allowance for credit losses

(68,281

)

 

 

(91,208

)

 

 

(98,892

)

 

 

(72,389

)

 

 

(56,188

)

 

Federal Reserve Bank and Federal Home Loan Bank stocks, at cost

28,400

 

 

 

28,433

 

 

 

28,433

 

 

 

27,138

 

 

 

27,138

 

 

Accrued interest receivable

16,254

 

 

 

16,230

 

 

 

17,429

 

 

 

17,133

 

 

 

16,628

 

 

Premises, furniture, and equipment, net

44,888

 

 

 

44,107

 

 

 

41,510

 

 

 

39,932

 

 

 

41,608

 

 

Rental equipment, net

213,116

 

 

 

211,368

 

 

 

211,397

 

 

 

206,732

 

 

 

205,964

 

 

Bank-owned life insurance

94,749

 

 

 

94,142

 

 

 

93,542

 

 

 

92,937

 

 

 

92,315

 

 

Foreclosed real estate and repossessed assets, net

2,077

 

 

 

1,204

 

 

 

1,483

 

 

 

7,186

 

 

 

9,957

 

 

Goodwill

309,505

 

 

 

309,505

 

 

 

309,505

 

 

 

309,505

 

 

 

309,505

 

 

Intangible assets

33,148

 

 

 

34,898

 

 

 

36,903

 

 

 

39,660

 

 

 

41,692

 

 

Prepaid assets

10,513

 

 

 

7,482

 

 

 

10,201

 

 

 

11,270

 

 

 

8,328

 

 

Deferred taxes

25,173

 

 

 

20,072

 

 

 

25,435

 

 

 

24,411

 

 

 

17,723

 

 

Other assets

79,764

 

 

 

88,909

 

 

 

110,877

 

 

 

82,763

 

 

 

82,983

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

6,690,650

 

 

 

$

7,051,812

 

 

 

$

9,790,123

 

 

 

$

7,264,515

 

 

 

$

6,092,074

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

5,018,233

 

 

 

5,385,569

 

 

 

7,928,235

 

 

 

5,581,597

 

 

 

4,356,630

 

 

Interest-bearing checking

254,721

 

 

 

255,509

 

 

 

416,164

 

 

 

274,504

 

 

 

157,571

 

 

Savings deposits

86,356

 

 

 

93,608

 

 

 

126,834

 

 

 

54,080

 

 

 

47,866

 

 

Money market deposits

67,204

 

 

 

63,920

 

 

 

55,045

 

 

 

56,440

 

 

 

48,494

 

 

Time certificates of deposit

9,091

 

 

 

11,425

 

 

 

12,614

 

 

 

13,522

 

 

 

20,223

 

 

Wholesale deposits

79,366

 

 

 

78,840

 

 

 

103,521

 

 

 

227,648

 

 

 

348,416

 

 

Total deposits

5,514,971

 

 

 

5,888,871

 

 

 

8,642,413

 

 

 

6,207,791

 

 

 

4,979,200

 

 

Long-term borrowings

92,834

 

 

 

93,634

 

 

 

95,336

 

 

 

96,760

 

 

 

98,224

 

 

Accrued interest payable

579

 

 

 

1,853

 

 

 

679

 

 

 

2,068

 

 

 

1,923

 

 

Accrued expenses and other liabilities

210,382

 

 

 

190,821

 

 

 

216,437

 

 

 

144,686

 

 

 

165,419

 

 

Total liabilities

5,818,766

 

 

 

6,175,179

 

 

 

8,954,865

 

 

 

6,451,305

 

 

 

5,244,766

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock, $.01 par value

317

 

 

 

319

 

 

 

319

 

 

 

326

 

 

 

344

 

 

Common stock, Nonvoting, $.01 par value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional paid-in capital

604,484

 

 

 

602,720

 

 

 

601,222

 

 

 

598,669

 

 

 

594,569

 

 

Retained earnings

259,189

 

 

 

262,578

 

 

 

225,471

 

 

 

198,000

 

 

 

234,927

 

 

Accumulated other comprehensive income

7,599

 

 

 

15,222

 

 

 

12,809

 

 

 

20,119

 

 

 

17,542

 

 

Treasury stock, at cost

(860

)

 

 

(5,696

)

 

 

(5,655

)

 

 

(5,440

)

 

 

(3,677

)

 

Total equity attributable to parent

870,729

 

 

 

875,143

 

 

 

834,166

 

 

 

811,674

 

 

 

843,705

 

 

Noncontrolling interest

1,155

 

 

 

1,490

 

 

 

1,092

 

 

 

1,536

 

 

 

3,603

 

 

Total stockholders’ equity

871,884

 

 

 

876,633

 

 

 

835,258

 

 

 

813,210

 

 

 

847,308

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

$

6,690,650

 

 

 

$

7,051,812

 

 

 

$

9,790,123

 

 

 

$

7,264,515

 

 

 

$

6,092,074

 

 

Consolidated Statements of Operations (Unaudited)

 

(Dollars in Thousands, Except Share and Per Share Data)

 

 

Three Months Ended

 

Year Ended

 

September 30,

2021

 

June 30,

2021

 

September 30,

2020

 

September 30,

2021

 

September 30,

2020

Interest and dividend income:

 

 

 

 

 

 

 

 

 

Loans and leases, including fees

$

63,665

 

$

62,287

 

 

$

62,022

 

 

$

256,080

 

$

261,128

Mortgage-backed securities

3,979

 

3,446

 

 

1,877

 

 

12,155

 

9,028

Other investments

4,412

 

4,250

 

 

4,508

 

 

17,619

 

22,685

 

72,056

 

69,983

 

 

68,407

 

 

285,854

 

292,841

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

164

 

188

 

 

1,904

 

 

1,593

 

22,616

FHLB advances and other borrowings

1,225

 

1,320

 

 

1,990

 

 

5,270

 

11,187

 

1,389

 

1,508

 

 

3,894

 

 

6,863

 

33,803

 

 

 

 

 

 

 

 

 

 

Net interest income

70,667

 

68,475

 

 

64,513

 

 

278,991

 

259,038

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

8,775

 

4,612

 

 

8,980

 

 

49,766

 

64,776

 

 

 

 

 

 

 

 

 

 

Net interest income after provision for credit losses

61,892

 

63,863

 

 

55,533

 

 

229,225

 

194,262

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

Refund transfer product fees

2,567

 

12,073

 

 

2,335

 

 

37,967

 

36,061

Tax advance product fees

226

 

891

 

 

(14

)

 

47,639

 

31,826

Payments card and deposit fees

25,541

 

29,203

 

 

21,422

 

 

107,182

 

87,379

Other bank and deposit fees

230

 

338

 

 

228

 

 

939

 

1,310

Rental income

9,709

 

9,976

 

 

10,144

 

 

39,416

 

44,826

Net gain realized on investment securities

 

 

 

51

 

 

6

 

51

Gain on divestitures

 

 

 

 

 

 

19,275

Gain (loss) on sale of other

580

 

5,955

 

 

3,455

 

 

11,515

 

4,425

Other income

10,689

 

4,017

 

 

3,129

 

 

26,240

 

14,641

Total noninterest income

49,542

 

62,453

 

 

40,750

 

 

270,904

 

239,794

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

Compensation and benefits

36,222

 

38,604

 

 

35,616

 

 

151,090

 

136,247

Refund transfer product expense

3,219

 

2,435

 

 

162

 

 

11,861

 

7,644

Tax advance product expense

30

 

(25

)

 

(97

)

 

2,564

 

2,723

Card processing

7,063

 

6,809

 

 

6,524

 

 

27,201

 

25,956

Occupancy and equipment expense

8,252

 

7,381

 

 

6,826

 

 

29,269

 

26,995

Operating lease equipment depreciation

7,865

 

8,122

 

 

7,594

 

 

30,987

 

32,831

Legal and consulting

14,369

 

5,680

 

 

5,615

 

 

31,341

 

20,858

Intangible amortization

1,761

 

2,013

 

 

2,283

 

 

8,545

 

10,997

Impairment expense

601

 

505

 

 

1,232

 

 

2,818

 

1,982

Other expense

14,232

 

9,999

 

 

14,528

 

 

48,007

 

52,818

Total noninterest expense

93,614

 

81,523

 

 

80,283

 

 

343,683

 

319,051

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

17,820

 

44,793

 

 

16,000

 

 

156,446

 

115,005

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

1,101

 

4,934

 

 

1,791

 

 

10,701

 

5,661

 

 

 

 

 

 

 

 

 

 

Net income before noncontrolling interest

16,719

 

39,859

 

 

14,209

 

 

145,745

 

109,344

Net income attributable to noncontrolling interest

816

 

1,158

 

 

1,051

 

 

4,037

 

4,624

Net income attributable to parent

$

15,903

 

$

38,701

 

 

$

13,158

 

 

$

141,708

 

$

104,720

 

 

 

 

 

 

 

 

 

 

Less: Allocation of Earnings to participating securities(1)

297

 

729

 

 

309

 

 

2,698

 

2,414

Net income attributable to common shareholders(1)

15,606

 

37,972

 

 

12,849

 

 

139,010

 

102,306

Earnings per common share

 

 

 

 

 

 

 

 

 

Basic

$

0.50

 

$

1.21

 

 

$

0.38

 

 

$

4.38

 

$

2.94

Diluted

$

0.50

 

$

1.21

 

 

$

0.38

 

 

$

4.38

 

$

2.94

Shares used in computing earnings per common share

 

 

 

 

 

 

 

 

 

Basic

31,280,162

 

31,320,893

 

 

33,783,659

 

 

31,729,596

 

34,829,971

Diluted

31,299,555

 

31,338,947

 

 

33,783,659

 

 

31,751,522

 

34,829,971

(1) Amounts presented are used in the two-class earnings per common share calculation.

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 September 30,

2021

 

2020

(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

$

852,122

 

 

$

1,248

 

 

0.58

%

 

$

1,960,020

 

 

$

891

 

 

0.18

%

Mortgage-backed securities

1,049,258

 

 

3,979

 

 

1.50

%

 

394,456

 

 

1,877

 

 

1.89

%

Tax exempt investment securities

232,006

 

 

772

 

 

1.67

%

 

374,876

 

 

1,347

 

 

1.81

%

Asset-backed securities

400,507

 

 

1,199

 

 

1.19

%

 

331,939

 

 

1,241

 

 

1.49

%

Other investment securities

258,367

 

 

1,193

 

 

1.83

%

 

208,078

 

 

1,029

 

 

1.97

%

Total investments

1,940,138

 

 

7,143

 

 

1.50

%

 

1,309,349

 

 

5,494

 

 

1.78

%

Total commercial finance

2,690,064

 

 

48,285

 

 

7.12

%

 

2,240,591

 

 

42,390

 

 

7.53

%

Total consumer finance

258,043

 

 

4,308

 

 

6.62

%

 

234,468

 

 

3,998

 

 

6.78

%

Total tax services

37,174

 

 

165

 

 

1.76

%

 

16,651

 

 

5

 

 

0.13

%

Total warehouse finance

388,477

 

 

6,332

 

 

6.47

%

 

287,294

 

 

4,378

 

 

6.06

%

Total community banking loans

272,554

 

 

4,575

 

 

6.66

%

 

757,993

 

 

11,251

 

 

5.91

%

Total loans and leases

3,646,312

 

 

63,665

 

 

6.93

%

 

3,536,997

 

 

62,022

 

 

6.98

%

Total interest-earning assets

$

6,438,572

 

 

$

72,056

 

 

4.45

%

 

$

6,806,366

 

 

$

68,407

 

 

4.02

%

Noninterest-earning assets

822,592

 

 

 

 

 

 

866,407

 

 

 

 

 

Total assets

$

7,261,164

 

 

 

 

 

 

$

7,672,773

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking(2)

$

243,005

 

 

$

 

 

%

 

$

186,952

 

 

$

 

 

%

Savings

89,110

 

 

5

 

 

0.02

%

 

52,616

 

 

1

 

 

0.01

%

Money markets

67,083

 

 

58

 

 

0.34

%

 

41,179

 

 

32

 

 

0.31

%

Time deposits

10,218

 

 

21

 

 

0.81

%

 

21,947

 

 

92

 

 

1.66

%

Wholesale deposits

77,506

 

 

80

 

 

0.41

%

 

562,828

 

 

1,779

 

 

1.26

%

Total interest-bearing deposits

486,922

 

 

164

 

 

0.13

%

 

865,522

 

 

1,904

 

 

0.88

%

FHLB advances

 

 

 

 

%

 

94,457

 

 

619

 

 

2.61

%

Subordinated debentures

73,951

 

 

1,065

 

 

5.71

%

 

73,779

 

 

1,147

 

 

6.19

%

Other borrowings

19,299

 

 

160

 

 

3.29

%

 

25,431

 

 

224

 

 

3.50

%

Total borrowings

93,250

 

 

1,225

 

 

5.21

%

 

193,667

 

 

1,990

 

 

4.09

%

Total interest-bearing liabilities

580,172

 

 

1,390

 

 

0.95

%

 

1,059,189

 

 

3,894

 

 

1.46

%

Noninterest-bearing deposits

5,589,946

 

 

 

 

%

 

5,601,052

 

 

 

 

%

Total deposits and interest-bearing liabilities

$

6,170,118

 

 

$

1,390

 

 

0.09

%

 

$

6,660,241

 

 

$

3,894

 

 

0.23

%

Other noninterest-bearing liabilities

204,726

 

 

 

 

 

 

164,766

 

 

 

 

 

Total liabilities

6,374,844

 

 

 

 

 

 

6,825,007

 

 

 

 

 

Shareholders’ equity

886,320

 

 

 

 

 

 

847,766

 

 

 

 

 

Total liabilities and shareholders’ equity

$

7,261,164

 

 

 

 

 

 

$

7,672,773

 

 

 

 

 

Net interest income and net interest rate spread including noninterest-bearing deposits

 

 

$

70,667

 

 

4.36

%

 

 

 

$

64,513

 

 

3.79

%

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

 

 

4.35

%

 

 

 

 

 

3.77

%

Tax-equivalent effect

 

 

 

 

0.01

%

 

 

 

 

 

0.02

%

Net interest margin, tax-equivalent(3)

 

 

 

 

4.37

%

 

 

 

 

 

3.79

%

(1) Tax rate used to arrive at the TEY for the three months ended September 30, 2021 and 2020 was 21%.

(2) Of the total balance, $242.7 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.

Selected Financial Information

 

As of and For the Three Months Ended

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

 

September 30,

2020

Equity to total assets

13.03

%

 

12.43

%

 

8.53

%

 

11.19

%

 

13.91

%

Book value per common share outstanding

$

27.53

 

 

$

27.46

 

 

$

26.16

 

 

$

24.93

 

 

$

24.66

 

Tangible book value per common share outstanding

$

16.71

 

 

$

16.67

 

 

$

15.31

 

 

$

14.23

 

 

$

14.44

 

Tangible book value per common share outstanding excluding AOCI

$

16.47

 

 

$

16.20

 

 

$

14.91

 

 

$

13.61

 

 

$

13.93

 

Common shares outstanding

31,669,952

 

 

31,919,780

 

 

31,926,008

 

 

32,620,251

 

 

34,360,890

 

Nonperforming assets to total assets

0.92

%

 

0.64

%

 

0.48

%

 

0.73

%

 

0.79

%

Nonperforming loans and leases to total loans and leases

1.52

%

 

1.17

%

 

1.17

%

 

1.18

%

 

0.97

%

Net interest margin

4.35

%

 

3.75

%

 

3.07

%

 

4.65

%

 

3.77

%

Net interest margin, tax-equivalent

4.37

%

 

3.77

%

 

3.08

%

 

4.67

%

 

3.79

%

Return on average assets

0.88

%

 

1.90

%

 

2.22

%

 

1.73

%

 

0.69

%

Return on average equity

7.18

%

 

18.07

%

 

28.93

%

 

13.91

%

 

6.21

%

Full-time equivalent employees

1,124

 

 

1,109

 

 

1,075

 

 

1,038

 

 

1,015

 

Non-GAAP Reconciliation

 

Efficiency Ratio

For the last twelve months ended

(Dollars in Thousands)

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

 

September 30,

2020

Noninterest Expense – GAAP

$

343,683

 

 

$

330,352

 

 

$

320,070

 

 

$

315,828

 

 

$

319,051

 

Net Interest Income

278,991

 

 

272,837

 

 

266,499

 

 

260,386

 

 

259,038

 

Noninterest Income

270,903

 

 

262,111

 

 

240,706

 

 

247,766

 

 

239,794

 

Total Revenue: GAAP

$

549,894

 

 

$

534,948

 

 

$

507,205

 

 

$

508,152

 

 

$

498,832

 

Efficiency Ratio, last twelve months

62.50

%

 

61.75

%

 

63.10

%

 

62.15

%

 

63.96

%

About Meta Financial Group, Inc.®

Meta Financial Group, Inc.® (“Meta”) (Nasdaq: CASH) is a South Dakota-based financial holding company. At Meta, our mission is financial inclusion for all®. Through our subsidiary, MetaBank®, N.A., we strive to remove barriers to financial access and promote economic mobility by working with third parties to provide responsible, secure, high quality financial products that contribute to the social and economic benefit of communities at the core of the real economy. Meta works to increase financial availability, choice, and opportunity for all. Additional information can be found by visiting www.metafinancialgroup.com.



Source link

Share:

Share on facebook
Facebook
Share on twitter
Twitter
Share on pinterest
Pinterest
Oliver Bolt

Oliver Bolt

On Key

Related Posts