Meta Financial Group Inc. (doing business as Meta Financial Group) is the holding company for MetaBank and MetaBank West Central. MetaBank is a thrift with four market areas: Northwest Iowa Market Brookings Market Central Iowa Market Sioux Empire Market; and the Meta Payment Systems prepaid debit card division. MetaBank West Central is a state-chartered commercial bank in the West Central Iowa Market. Meta Financial Group Inc. has a market cap of $61.2 million; its shares were traded at around $23.5 with and P/S ratio of 0.8. The dividend yield of Meta Financial Group Inc. stocks is 2.2%.
Highlight of Business Operations:The Company recorded a net loss of $2.6 million for the fiscal third quarter of 2009 which was primarily due to an increased provision for loan losses in the amount of $6.2 million. As discussed below, the provision comprised $773,000 related to the MPS division and $5.5 million related to the Companys traditional bank segment in connection with various commercial borrowers. Net loss in the current period was also impacted by higher operating expenses at MPS, commensurate with the growth in revenue. In addition, net interest income increased $353,000 as compared to the same period in fiscal year 2008.
Total cash and cash equivalents and federal funds sold were $15.3 million at June 30, 2009, an increase of $7.1 million from $8.2 million at September 30, 2008. The increase primarily was the result of the Companys excess liquidity due to an increase in deposits, primarily due to deposits generated by MPS. In general, the Company maintains its cash investments in interest-bearing overnight deposits with various correspondent banks. Federal funds sold deposits may be maintained at the FHLB of Des Moines or various commercial banks, including, but not limited to the following: CitiBank, JP Morgan Chase, M&I Bank, BNP Paribas, Bank of America and Bankers Bank, all but one with assets in excess of $1.0 billion. At June 30, 2009, the Company held $10.0 million in federal funds sold.
The Companys portfolio of net loans receivable decreased $25.3 million, or 5.9%, to $402.6 million at June 30, 2009. This decrease primarily relates to a decrease of $21.8 million in commercial business and agricultural operating loans due to pay downs and transfers to other repossessed assets and an increase in the allowance for loan losses of $3.4 million. Offsetting the above was an increase in commercial and multi-family real estate loans of $11.5 million.
On the basis of managements review of its loans and other assets, at June 30, 2009, the Company had classified a total of $34.2 million of its assets as substandard, $12.1 million as doubtful and none as loss. This compares to classifications at September 30, 2008 of $15.8 million as substandard, $88,000 as doubtful and none as loss. As of June 30, 2009, $19.9 million out of a total of $34.2 million of substandard assets is attributable to the trust preferred securities identified above. See Note 9 to the Notes to Condensed Consolidated Financial Statement.
General. The Company recorded a loss from continuing operations of $2.6 million, or $0.99 per diluted share, for the three months ended June 30, 2009 compared to a net loss of $410,000, or $0.16 per diluted share, for the same period in fiscal year 2008. Net loss in the current period was primarily impacted by higher operating expenses at MPS, commensurate with the growth in revenue, and an increased provision for loan losses in connection with various commercial borrowers. In addition, net interest income increased $353,000 as compared to the same period in fiscal year 2008.
The Company recorded a loss from continuing operations of $734,000, or $0.28 per diluted share, for the nine months ended June 30, 2009 compared to income of $3,000, or $0.00 per diluted share, for the same period in fiscal year 2008. Including discontinued operations, net loss was $734,000, or $0.28 per diluted share for the nine months ended June 30, 2009 compared to income of $814,000, or $0.31 per diluted share for the same period in fiscal year 2008. Net loss for the nine month period ended June 30, 2009 were impacted by the aforementioned factors.
Read the The complete Report