Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: Investor Relations
Telephone: 712.732.4117
META FINANCIAL GROUP, INC. REPORTS THIRD QUARTER RESULTS
Storm Lake, Iowa - (August 15, 2005) Meta Financial Group, Inc. (NASDAQNM:CASH)
today reported a net loss of $2.3 million, or a negative $0.94 per diluted
share, for the 2005 fiscal year third quarter ended June 30, 2005, compared to
net income of $837,000, or $0.33 per diluted share, for the same period last
year. As a result of the net loss in the third quarter, the results for the
first nine months of the 2005 fiscal year were a net loss of $1.5 million, or a
negative $0.60 per diluted share, compared to net income of $3.5 million, or
$1.38 per diluted share, for the same period last year. The Company results for
the nine month period of fiscal 2004 included a net gain, after income taxes, of
$699,000, or $0.27 per diluted share, from the January 2004 sale of a branch
office. The fiscal 2005 net loss reflects decreases of $3.1 million and $5.0
million for the three and nine month periods ended June 30, 2005, respectively,
compared to the same periods in 2004.
The net losses for the three and nine months periods of fiscal 2005 were the
result of recording an additional provision for loan losses totaling $4.8
million during the third quarter. Of this total, $4.1 million was recorded by
MetaBank and the remaining $700,000 was recorded by MetaBank West Central. Net
of the effect of income taxes, the additional provision reduced earnings per
diluted share by $1.25 for both the quarter and the nine months. The additional
provision relates to the Company's share of a total of approximately $32.0
million of loans to three affiliated companies involved in automobile sales,
service and financing, and to the owners thereof. The Company estimates that
losses could range between approximately $1.90 million and approximately $4.88
million. Based on this estimate of loss the Company took the additional $4.8
million provision for loan losses. In addition, collection and related costs are
estimated between $250,000 and $500,000. During the evening of June 20, 2005, as
disclosed in a Form 8-K filed with the Securities and Exchange Commission on
June 24, 2005, two of the companies filed for reorganization under Chapter 11 of
the U.S. Bankruptcy Code. On July 8, 2005, the Company took possession of the
assets of one of the companies, while the other company remains in Chapter 11
bankruptcy. The process of liquidation of the assets of all three companies is
underway. The amount of the additional provision was determined through
extensive review and evaluation of the net realizable value of the assets. One
loan totaling $1.3 million was written off as of June 30, 2005. While the
Company believes it has correctly identified the size of the provision taken for
the period ended June 30, 2005, no assurance can be given that additional
adjustments will not occur.
In addition to the provision, the net loss for the period ended June 30, 2005
includes net losses for the payment systems division (Meta Payment Systems) of
$156,000, or $0.06 per diluted share, and $867,000, or $0.34 per diluted share
for the quarter and nine month periods ended June 30, 2005, respectively. This
compares to a net loss of $141,000, or $.06 per diluted share, for both the
quarter and nine-month periods of the prior year. The loss for Meta Payment
Systems represents a continuation of costs for the recently started division,
which was formed in May 2004. The Company anticipates that Meta Payment Systems
will become profitable ahead of projections. In addition, the Company incurred
one-time costs resulting from activities related to the name changes of the
Company and its subsidiaries, net of income taxes, totaling $40,000, or $0.02
per diluted share, and $428,000, or $0.17 per diluted share, for the quarter and
nine month period, respectively.
Excluding the provision for loan losses, the payment systems loss and the costs
related to the Company's recent name change, net income would have been $1.0
million, or $0.41 per diluted share, for the third quarter and $3.0 million, or
$1.18 per diluted share, for the nine month period ended June 30, 2005. This
compares to net income of $0.33 per diluted share for the three month period
ended June 30, 2004, and net income of $1.11 per diluted share, excluding the
profit from the branch sale, for the nine month period ended June 30, 2004, and
to net income (excluding the Meta Payment System loss and the name change costs)
of $.43 per diluted share for the three months ended March 31, 2005. During the
first nine months of fiscal 2005, Meta Payment Systems launched a number of
programs, began to generate revenue as a result of these programs, and has
continued to increase its revenue. Although excluding the impact of the above
items is a non-GAAP measure, we believe that it is important to provide such
information due to the nature of the expenses and to more accurately compare the
results of the periods presented.
Net interest income increased $596,000, or 13.2 percent, and $1.4 million, or
10.4 percent, for the three and nine month periods ended June 30, 2005,
respectively, compared to the same periods last year. This was due, in part, to
the Company's growth in both loans and deposits, which increased $56.0 million,
or 13.8 percent, and $32.3 million, or 7.0 percent, respectively, during the
first nine months of fiscal 2005. This growth, plus an improvement in interest
rate spreads, contributed to the increase in net interest income in both the
three and nine month periods.
During the quarter, the Company moved ahead with previously disclosed plans for
two additional branch offices in Sioux Falls, South Dakota. The offices in Sioux
Falls are expected to be open prior to the end of calendar 2005. When these
offices have opened, the Company will have four offices in Sioux Falls, South
Dakota.
The Company had recoveries for the fiscal year totaling $116,000, that when
coupled with the $1.3 million write-off noted above, resulted in net charge offs
of $1.2 million. At June 30, 2005, non-performing assets totaled $8.2 million
(almost all associated with the credit discussed above) and the
ratio of non-performing assets to total assets was 1.06 percent, compared to
$729,000 and 0.09 percent, respectively, at September 30, 2004. The Company had
$6.6 million of 30-day past due loans (1.39 percent of total loans) as of June
30, 2005, including approximately $4.2 million related to the credit discussed
above, compared to $1.1 million of 30-day past due loans (.56 percent of total
loans) at September 30, 2004.
Shareholders of record on June 15, 2005, received a quarterly cash dividend of
13 cents per share. This dividend was paid on July 1, 2005.
At June 30, 2005, assets of Meta Financial Group totaled $768.7 million.
Shareholders' equity totaled $43.1 million, or $17.20 per common share
outstanding. Meta Financial Group is the holding company for MetaBank and
MetaBank West Central. Though no longer well-capitalized under federal banking
guidelines due to the provision taken this quarter, MetaBank had a capital ratio
well in excess of minimum regulatory requirements at June 30, 2005, with Tier I
and Tier II capital ratios of 6.37 percent and 9.98 percent, respectively. The
Company and MetaBank West Central remain well-capitalized.
During the quarter ended June 30, 2005, Meta Financial Group shares traded
between $18.15 and $24.09.
Corporate Profile: Meta Financial Group, Inc. (doing business as Meta Financial
Group) is the holding company for MetaBank and MetaBank West Central. MetaBank
is a federally-chartered savings bank 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. Seventeen
offices support customers throughout northwest and central Iowa, and in
Brookings and Sioux Falls, South Dakota.
The Company, and its wholly-owned subsidiaries, MetaBank and MetaBank WC, may
from time to time make written or oral "forward-looking statements," including
statements contained in its filings with the Securities and Exchange Commission,
in its reports to shareholders, and in other communications by the Company,
which are made in good faith by the Company pursuant to the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include statements with respect to the
Company's beliefs, expectations, estimates and intentions that 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 statements address
the following subjects: future operating results; customer growth and retention;
loan and other product demand; earnings growth and expectations; new products
and services, such as those offered by the Meta Payment Systems Division; credit
quality and adequacy of reserves; technology; and our employees. The following
factors, among others, could cause the Company's financial performance to differ
materially from the expectations, estimates, and intentions expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local economies in which the Company conducts
operations; the effects of, and changes in, trade, monetary, and fiscal policies
and laws, including interest rate policies of the Federal Reserve Board;
inflation, interest rate, market, and monetary fluctuations; the timely
development of and acceptance of new products and services of the Company and
the perceived overall value of these products and services by users; the impact
of changes in financial services' laws and regulations; technological changes;
acquisitions; changes in consumer spending and saving habits; and the success of
the Company at managing and collecting assets of borrowers in default and
managing the risks involved in the foregoing.
The foregoing list of factors is not exclusive. Additional discussion of factors
affecting the Company's business and prospects is contained in the Company's
periodic filings with the SEC. The Company does not undertake, and expressly
disclaims any intent or obligation, to update any forward-looking statement,
whether written or oral, that may be made from time to time by or on behalf of
the Company.
(More)
Financial Highlights
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Consolidated Statement of Financial Condition
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(In Thousands)
Assets June 30, 2005 Sept. 30, 2004
Cash and Cash Equivalents $ 7,913 $ 8,937
Investments & Mortgage-backed Securities 250,802 322,524
Loans, net 459,690 404,051
Other Assets 50,272 45,287
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Total Assets $ 768,677 $ 780,799
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Liabilities
Deposits $ 493,870 $ 461,581
Borrowed Money 229,279 269,109
Other Liabilities 2,477 2,835
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Total Liabilities $ 725,626 $ 733,525
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Shareholders' Equity $ 43,051 $ 47,274
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Total Liabilities and Shareholders' Equity $ 768,677 $ 780,799
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Consolidated Statements of Income
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For the 3 Months For the 9 Months
Ended June 30: Ended June 30:
(Dollars In Thousands except per share data) 2005 2004 2005 2004
Interest Income $ 10,813 $ 9,043 $ 30,970 $ 26,988
Interest Expense 5,697 4,523 16,178 13,585
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Net Interest Income 5,116 4,520 14,792 13,403
Provision for Loan Losses 4,956 168 5,391 325
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Net Interest Income After
Provision for Loan Losses 160 4,352 9,401 13,078
Other Income 949 640 2,234 3,005
Other Expenses 4,666 3,731 14,014 10,755
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Income (Loss) Before Income Tax (3,557) 1,261 (2,379) 5,328
Income Tax Expense (Benefit) (1,245) 424 (908) 1,839
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Net Income (Loss) $ (2,312) $ 837 $ (1,471) $ 3,489
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Earnings (Loss) Per Common Share (Basic): $ (0.94) $ 0.34 $ (0.60) $ 1.41
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Earnings (Loss) Per Common Share (Diluted): $ (0.94) $ 0.33 $ (0.60) $ 1.38
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Selected Financial Information
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For the 9 Months Ended June 30, 2005 2004
Return on Average Assets -0.24% 0.60%
Return on Average Equity -4.28% 10.13%
Average Shares Outstanding for Diluted Earnings per Share 2,513,928 2,536,863
At Period Ended: June 30, 2005 Sept. 30, 2004
Equity to Total Assets 5.60% 6.05%
Book Value per Common Share Outstanding $ 17.20 $ 18.98
Tangible Book Value per Common Share Outstanding $ 15.84 $ 17.61
Common Shares Outstanding 2,503,655 2,491,025
Non-Performing Assets to Total Assets 1.06% 0.09%
Meta Financial Group \ 121 East Fifth Street \ P.O. Box 1307 \ Storm Lake, Iowa 50588