Meta reports new business agreements, slight earnings drop

May 1, 2018

Meta Financial Group reported new and renewed pieces of business along with a slight drop in quarterly earnings.

Net income for the second quarter was $31.4 million, or $3.23 per share. That’s down 2 percent from $32.1 million, or $3.42 per share, one year ago. The pre-tax results include $2.2 million in merger and acquisition-related expenses, $500,000 in severance costs and a $200,000 loss on sale of investments. It also includes $2.7 million in amortization of intangible assets and $1.3 million in noncash, stock-related compensation associated with executive officer employment agreements.

“We are excited to announce that we have delivered strong quarterly earnings of $31.4 million,” said chairman and CEO Tyler Haahr. “The production and results of the 2018 tax season and the effectiveness of our processing standards and partner relationships aided in our outstanding performance. Our tax season infrastructure has once again performed very well, and we believe we are well-positioned to continue to deliver positive results into the future.”

Meta also announced a renewed four-year partnership with AAA. Currently, MetaBank’s payments offerings, which include a travel card and a gift card, are available in AAA branches across the U.S.

Under the new agreement, MetaBank and AAA will work to enhance the offerings to members, adding features to chip-enabled, reloadable prepaid cards like online purchase and loading capabilities, and card personalization, as well as upgrading the mobile application to include Touch ID and remote-deposit capture.

“Beyond security and convenience, we have learned that AAA members are highly attracted to features that can help them with budgeting, emergency travel mishaps and managing funds for dependents. These types of prepaid cards are accepted by millions of merchants worldwide, safer to carry than cash, offer fraud protection and are great for staying on budget,” said Sheree Thornsberry, executive vice president and head of payments at MetaBank. “We’re excited to extend our decade-long relationship with AAA and to serve their members better than ever before.”

Meta also announced an agreement with CURO Group Holdings Corp., which it called a leader in providing short-term credit to underbanked consumers. The organizations will launch a line of credit products, which they said will be more flexible and transparent than others in the market and well-suited for U.S.-based underbanked consumers. CURO and Meta expect to unveil the joint brand and a timeline for the pilot launch later this year.

“This relationship expands Meta’s longstanding commitment to serving consumers across the credit spectrum,” said Brent Turner, Meta executive vice president and head of consumer lending. “We believe Meta’s experience in specialty consumer lending and payments products, combined with CURO’s 20 years of proven experience providing credit to underbanked consumers, will result in a product and platform that drives innovation, transparency and responsible credit to the market.”

In the first three years of the agreement with CURO, Meta expects to hold up to $350 million in product receivables on its balance sheet. This agreement is part of Meta’s ongoing expansion into consumer lending, following the 2016 acquisition of Crestmark, a platform that provides a comprehensive solution for marketplace lending, including underwriting and loan management.

“Work towards the integration of the anticipated Crestmark acquisition is continuing behind the scenes, and we expect the acquisition to be completed by June 30,” Haahr said.

“While we are earnestly engaged with acquisition details, we are actively making investments in people and systems to build out our platforms for our consumer credit business and to enhance growth for Crestmark and our other current business initiatives. We anticipate making significant investments in the next 12 months to lay the groundwork for what we believe will be good growth in fiscal 2019 and significantly more meaningful drivers for earnings performance in 2020 and beyond.”

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Meta reports new business agreements, slight earnings drop

Meta Financial Group reported new and renewed pieces of business along with a slight drop in quarterly earnings.

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