April 24, 2020

Sioux Falls-based Meta Financial Group reported 63 percent growth in earnings for the most recent quarter, driven largely by the sale of its community bank division.

Net income was $52.3 million, or $1.45 per share, for the three months that ended March 31, compared with $32.1 million, or 81 cents per share, for the same time last year.

The community bank division was sold to Iowa-based Central Bank at the end of February. It resulted in a $19.3 million gain, partially offset by one-time expenses, for a pre-tax net gain of $18.3 million, or 51 cents per share.

“Our fiscal second quarter, which has in the past been driven by our high-volume tax businesses, was met with unprecedented uncertainty and market volatility associated with the spread of COVID-19. Our priorities are the health and safety of our employees and preserving access to the financial products our customers need to make it through these difficult times,” president and CEO Brad Hanson said in a statement.

“Meta proactively implemented its pandemic plan under its business continuity program with minimal business disruption and a near-seamless transition to a work-from-home environment.”

A COVID-19 Crisis Command Center consisting of leadership and business continuity planning resources throughout the organization is “coordinating extensive scenario planning focused on credit quality, regulatory capital, expense management and viability of our partners and customers to ensure continuity of our business and financial stability under extreme circumstances related to COVID-19,” he said.

“Finally, I am thrilled with the engagement and productivity exhibited by our staff, resulting in strong performance for the quarter and the ability to manage our businesses through and beyond this crisis.”

During the quarter, the company also expanded its faster payments platform to include Visa Direct, which allows Visa clients to enable businesses and payment service providers to make payments, disbursements and remittances rapidly, conveniently and cost-effectively, for more than 1 billion eligible debit and prepaid cards worldwide.

“As a leading issuer of payments services, the addition of Visa Direct builds on MetaBank’s faster payments platform that also includes MasterCard Send, ACH origination, wire transfers and more,” Meta said.

The company also detailed measures that have been put in place in response to COVID-19, including mandating remote-work options and social distancing measures where possible, restricting nonessential business travel and enhancing preventative cleaning services at all office locations.

Meta’s loan and lease portfolio is diversified by geography and industry, it said, adding that while asset quality remains strong at this time, the focus is on actively monitoring and assisting customers. The following actions have been implemented:

• Tighter underwriting standards.
• Monitoring and placing limits on originations to industries and customers most adversely impacted by the COVID-19 pandemic, including, but not limited to, transportation, travel, entertainment and retail.
• Contacting customers to assess their credit situations and needs.
• Offering flexible repayment options to current customers when appropriate.
• Using CARES Act, SBA and USDA programs and loan products to help small-business clients.

Meta increased its allowance for loan and lease losses during the fiscal second quarter as a result of the pandemic.

“In addition, the company has options available that can be used to effectively manage capital levels through these turbulent times, including a very strong and flexible balance sheet,” it said.