Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: Investor Relations
Telephone: 712.732.4117
META FINANCIAL GROUP, INC. REPORTS RESULTS FOR THE QUARTER
AND THE FISCAL YEAR ENDED SEPTEMBER 30, 2005
Storm Lake, Iowa - (October 21, 2005) Meta Financial Group, Inc. (NASDAQNM:CASH)
today reported a net loss of $924,000, or a negative $0.38 per diluted share,
for the 2005 fiscal year ended September 30, 2005, compared to net income of
$3,987,000, or $1.57 per diluted share, for fiscal 2004. This represents a
decrease of $4.9 million in earnings from fiscal 2004 to fiscal 2005. Boosting
the 2004 fiscal year's results was a net gain, after income taxes, of $699,000,
or $0.28 per diluted share, on the January 2004 sale of a branch office. For the
quarter ended September 30, 2005, the Company recorded net income of $546,000,
or $0.22 per diluted share, compared to net income of $498,000, or $0.20 per
diluted share, for the quarter ended September 30, 2004. This represents an
increase of $48,000, or 9.6%, in earnings from the 2004 quarter to 2005 quarter.
The net loss for fiscal 2005 was primarily the result of recording, during the
third quarter ended June 30, 2005, an additional provision for loan losses
totaling $4.8 million. Net of the effect of income taxes, this additional
provision reduced earnings per diluted share by $1.25 for the fiscal year. The
additional provision related to $9.8 million of loans which was 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 amount of the provision was based on a detailed analysis of the
value of the underlying assets collateralizing the loans. Prior to the end of
the June quarter, two of the affiliated companies filed for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. In the fourth quarter, the Company took
possession of the assets of one of the companies that had filed bankruptcy and
the assets of the third company. The net loan balances of two of the companies
were transferred to either real estate owned or repossessed assets during the
fourth fiscal quarter. The remaining company is still, at this date, in Chapter
11 bankruptcy. The loans of the company still in bankruptcy remain on the books
as loans.
The process of liquidation of the assets of all three companies has been
underway since that time. During the fourth quarter, the Company incurred costs
related to the liquidation totaling approximately $330,000, or $218,000, net of
tax benefits. The $218,000 decreased earnings per share by approximately $.09
per share for both the quarter and the fiscal year ended September 30, 2005.
While the Company believes it correctly identified the size of the provision, no
assurance can be given that additional adjustments will not occur.
The net results for the fiscal year and quarter ended September 30, 2005 include
the net results for the payment systems division (Meta Payment Systems) of
MetaBank, of a loss of $808,000, or $0.32 per diluted share, for the year, and
net income of $59,000, or $0.02 per diluted share, for the quarter,
respectively. This compares to net losses of $490,000, or $.20 per diluted
share, and $349,000, or $.14 per diluted share, for the year and the quarter
ended September 30, 2004, respectively. The 2005 loss for Meta Payment Systems
represents a continuation of costs for the recently started division, which was
formed in May 2004. During 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, resulting in its first profitable quarter. As
the Company anticipated, Meta Payment Systems recorded a profit in the fourth
quarter of fiscal 2005, ahead of original projections. In addition, during
fiscal 2005, 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 $428,000, or $0.17 per diluted share.
Excluding the additional provision for loan losses, the liquidation costs, the
payment systems results and the costs related to the Company's recent name
change, net income would have been $705,000, or $0.28 per diluted share, for the
fourth quarter and $3.7 million, or $1.46 per diluted share, for the year ended
September 30, 2005. In addition, during the fourth quarter, the Company incurred
additional expenses related to the two new Sioux Falls offices discussed below
which also reduced earnings. This compares to net income of $0.34 per diluted
share for the three month period ended September 30, 2004, and net income of
$1.49 per diluted share, excluding the profit from the branch sale, for the year
ended September 30, 2004. Although excluding the impact of the above items is a
non-GAAP measure, we believe that it may be useful to provide such information
due to the nature of the expenses in order to more accurately compare the
results of the periods presented.
Net interest income increased $81,000, or 1.9 percent, and $1.5 million, or 8.3
percent, for the quarter and year ended September 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 $36.1 million, or 8.9
percent, and $79.2 million, or 17.2 percent, respectively, during fiscal 2005.
This growth, plus an improvement in interest rate spreads, contributed to the
increase in net interest income in both the quarter and the year.
During the quarter, the Company moved ahead with previously disclosed plans for
two additional branch offices in Sioux Falls, South Dakota. The third office in
Sioux Falls opened in August, and the fourth office will open late in October
2005.
The Company had recoveries for the fiscal year totaling $147,000, and losses of
$3.8 million, resulting in net charge offs of $3.6 million. Almost all of the
losses were related to the loans discussed earlier. At September
30, 2005, non-performing assets totaled $5.4 million ($4.7 million of which is
associated with the credit discussed above) and the ratio of non-performing
assets to total assets was 0.69 percent, compared to $729,000 and 0.09 percent,
respectively, at September 30, 2004. The Company had $1.91 million of 30-day
past due loans (0.43 percent of total loans) as of September 30, 2005, compared
to $1.89 million of 30-day past due loans (.45 percent of total loans) at
September 30, 2004.
Shareholders of record on September 15, 2005, received a quarterly cash dividend
of 13 cents per share. This dividend was paid on October 1, 2005.
At September 30, 2005, assets of Meta Financial Group totaled $776.3 million.
Shareholders' equity totaled $43.0 million, or $17.16 per common share
outstanding. Meta Financial Group is the holding company for MetaBank and
MetaBank West Central. At June 30, 2005, as a result of the additional provision
for loan losses, MetaBank's Tier II capital level decreased to 9.98%, two basis
points below the level at which the Bank would have continued to qualify as
well-capitalized at that date. During the fourth fiscal quarter the Tier II
capital level of MetaBank increased to 10.33%. As of September 30, 2005, the
holding company and its two subsidiary banks all had capital ratios in excess of
regulatory requirements and are once again considered well-capitalized under
regulatory guidelines.
During the quarter ended September 30, 2005, Meta Financial Group shares traded
between $16.51 and $19.89.
Corporate Profile: Meta Financial Group, Inc. (doing business as Meta Financial
Group) is the holding company for MetaBank, MetaBank West Central, and Meta
Trust Company. MetaBank is a federally-chartered savings bank with four market
areas: Northwest Iowa, Brookings, Central Iowa, and Sioux Empire; and the Meta
Payment Systems division. MetaBank West Central is a state-chartered commercial
bank located in West Central Iowa. 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, MetaBank WC and Meta
Trust, 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) September 30,
Assets 2005 2004
Cash and Cash Equivalents $ 14,370 $ 8,937
Investments & Mortgage-backed Securities 268,406 322,524
Loans, net 440,190 404,051
Other Assets 53,383 45,287
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Total Assets $ 776,349 $ 780,799
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Liabilities
Deposits $ 540,770 $ 461,581
Borrowed Money 190,522 269,109
Other Liabilities 2,098 2,835
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Total Liabilities 733,390 733,525
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Shareholders' Equity 42,959 47,274
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Total Liabilities and Shareholders' Equity $ 776,349 $ 780,799
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Consolidated Statements of Income
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For the 3 Months For the Year
Ended September 30, Ended September 30,
(Dollars In Thousands except per share data) 2005 2004 2005 2004
Interest Income $ 10,123 $ 9,193 $ 41,093 $ 36,180
Interest Expense 5,675 4,826 21,854 18,411
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Net Interest Income 4,448 4,367 19,239 17,769
Provision for Loan Losses 92 164 5,482 488
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Net Interest Income After
Provision for Loan Losses 4,356 4,203 13,757 17,281
Other Income 1,496 591 3,731 3,596
Other Expenses 5,082 4,076 19,097 14,831
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Income (Loss) Before Income Tax 770 718 (1,609) 6,046
Income Tax Expense (Benefit) 224 220 (685) 2,059
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Net Income (Loss) $ 546 $ 498 $ (924) $ 3,987
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Earnings (Loss) Per Common Share (Basic): $ 0.22 $ 0.20 $ (0.38) $ 1.61
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Earnings (Loss) Per Common Share (Diluted): $ 0.22 $ 0.20 $ (0.38) $ 1.57
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Selected Financial Information
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For the Year Ended September 30, 2005 2004
Return on Average Assets -0.12% 0.51%
Return on Average Equity -2.05% 8.69%
Average Shares Outstanding for Diluted Earnings per Share 2,507,520 2,534,423
As of September 30, 2005 2004
Equity to Total Assets 5.53% 6.06%
Book Value per Common Share Outstanding $ 17.16 $ 18.98
Tangible Book Value per Common Share Outstanding $ 15.80 $ 17.61
Common Shares Outstanding 2,503,655 2,491,025
Non-Performing Assets to Total Assets 0.69% 0.09%
Meta Financial Group \ 121 East Fifth Street \ P.O. Box 1307 \ Storm Lake, Iowa 50588