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Meta Financial Group Inc. Reports Operating Results (10-Q)

February 07, 2011 | About:
10qk

10qk

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Meta Financial Group Inc. (CASH) filed Quarterly Report for the period ended 2010-12-31.

Meta Financial Group Inc. has a market cap of $46.24 million; its shares were traded at around $15 with a P/E ratio of 3.68 and P/S ratio of 0.34. The dividend yield of Meta Financial Group Inc. stocks is 3.5%.

Highlight of Business Operations:

MPS 2011 first quarter net income was $1.6 million compared to $0.9 million in the 2010 quarter. While non-interest income decreased by $5.5 million in 2011, expenses and loan loss provision expense declined by $7.0 million. The change in this quarter was primarily due to the discontinuance of the iAdvance and tax-related loan programs previously disclosed in our Annual Report on Form 10-K for the year ended September 30, 2010.

The traditional bank segment focuses primarily on establishing lending and deposit relationships with commercial accounts and consumers. The bank currently operates 12 retail banking branches: in Brookings (1) and Sioux Falls (3), South Dakota, in Des Moines (6) and Storm Lake (2), Iowa and a non-retail service branch in Memphis, Tennessee. The traditional bank introduced new checking products early in the fiscal 2010 first quarter. Retail bank checking balances grew from $40.4 million to $55.0 million, or 36%, during that time. During the three months ended December 31, 2010, the traditional bank segment recognized a goodwill impairment loss of $1.5 million due primarily to the recent decline in stock price of the Company. The original goodwill asset represented the excess of acquisition costs over the fair value of the net assets acquired in an earlier bank acquisition. Without the charge, the traditional bank recorded net income of $0.8 million.

As of December 31, 2010, the Companys assets grew by $100.0 million, or 9.7%, to $1.1 billion compared to $1.0 billion at September 30, 2010. The increase in assets was reflected primarily in increases in the Companys cash and cash equivalents and to a lesser extent the mortgage-backed securities available for sale, offset in part by decreases in the Companys net loans receivable.

Total cash and cash equivalents and federal funds sold were $199.8 million at December 31, 2010, an increase of $112.3 million from $87.5 million at September 30, 2010. The growth primarily was the result of the Companys additional liquidity due to an increase in deposits, entirely due to deposits generated by MPS. In general, the Company maintains its cash investments in interest-bearing overnight deposits with the FHLB and the FRB. Federal funds sold deposits may be maintained at the FHLB. At December 31, 2010, the Company had $6.2 million in federal funds sold.

Total deposits increased $104.8 million, or 11.7%, to $1.0 billion at December 31, 2010. The Company continues to grow its low- and no-cost deposit portfolio. Deposits attributable to MPS were up $134.8 million, or 20.6%, at December 31, 2010, as compared to September 30, 2010. This increase results from growth in prepaid card programs and seasonal activity. Offsetting the above increases was a $31.1 million decrease in certificates of deposits primarily related to a decrease in public funds.

On the basis of managements review of its loans and other assets, at December 31, 2010, the Company had classified a total of $21.3 million of its assets as substandard, $1.9 million as doubtful and none as loss. This compares to classifications at September 30, 2010 of $33.1 million as substandard, $2.1 million as doubtful and none as loss. As of December 31, 2010, $10.0 million out of a total of $21.3 million of substandard assets is attributable to the trust preferred securities identified above. See Note 10 to the Notes to Condensed Consolidated Financial Statements.

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