AP NEWS

Meta Financial Group Announces Results for 2019 Fiscal First Quarter

January 28, 2019

- Revenue Rises 77% -

- Produces Net Income of $15.4 million as Earnings Per Diluted Share More Than Doubles to $0.39 -

SIOUX FALLS, S.D., Jan. 28, 2019 (GLOBE NEWSWIRE) -- Meta Financial Group, Inc.® (Nasdaq: CASH) (“Meta” or the “Company”) recorded net income of $15.4 million, or $0.39 per diluted share, for the three months ended December 31, 2018, compared to net income of $4.7 million, or $0.16 per diluted share, for the three months ended December 31, 2017, representing a 230% increase in net income. Total revenue for the fiscal 2019 first quarter was $98.0 million, compared to $55.5 million for the same quarter in fiscal 2018, an increase of $42.5 million, or 77%.

“Due in large part to the success of our recent expansion in our national commercial finance portfolio, we drove a sizable increase in net interest income helping us deliver strong growth in earnings for the first quarter of fiscal 2019,” said President and CEO Brad Hanson. “In addition to our plans to accelerate growth in our core deposits, primarily in our non-interest bearing deposit portfolio, we expect to further enhance our interest-earning asset mix by continuing to grow our commercial finance portfolios, and improve operating efficiencies to maximize long-term value for shareholders.”

Highlights for the 2019 Fiscal First Quarter Ended December 31, 2018

-- Total gross loans and leases grew over 100% to $3.33 billion, compared to the same period in fiscal 2018 and increased $383.3 million, or 13%, when compared to September 30, 2018. -- Average non-interest-bearing deposits of $2.49 billion increased by $161.0 million, or 7%, when compared to the same period in fiscal 2018. -- Net interest income grew over 100%, or $34.1 million, to $60.3 million, compared to $26.2 million in the comparable quarter in fiscal 2018. -- Net interest margin (“NIM”) increased to 4.60% from 2.76% over the same period of the prior fiscal year, while the tax-equivalent net interest margin (“NIM, TE”) increased to 4.76% from 3.06% over that same period.

Net Interest IncomeNet interest income for the fiscal 2019 first quarter was $60.3 million, an increase of $34.1 million, or 130%, compared to the same quarter in fiscal 2018, primarily due to growth in loan and lease balances and expansion in net interest margin.

During the first quarter of fiscal year 2019, loan and lease interest income grew $44.1 million, offset by an increase in interest expense of $10.0 million, when compared to the same quarter in fiscal 2018. The quarterly average outstanding balance of loans and leases as a percentage of interest-earning assets increased to 60% as of the end of the first fiscal quarter of 2019 from 37% as of the end of the first fiscal quarter of 2018. The Company’s average interest-earning assets for the fiscal 2019 first quarter grew by $1.43 billion, or 38%, to $5.19 billion from the comparable quarter in 2018. This was primarily due to growth in the loan and lease portfolio of $1.71 billion, of which $1.50 billion was attributable to an increase in national lending loans and leases along with an increase of $215.9 million in community banking loans, partially offset by a reduction in total investment securities of $226.4 million.

NIM, TE was 4.76% for the fiscal 2019 first quarter, with the net effect of purchase accounting accretion contributing 18 basis points.

The overall reported tax-equivalent yield (“TEY”) on average earning asset yields increased by 234 basis points to 5.89% for the fiscal 2019 first quarter compared to the 2018 first fiscal quarter. The improvement was driven primarily by the Company’s improved earning asset mix, which reflects increased balances in the national lending portfolio. The fiscal 2019 first quarter TEY on the securities portfolio increased by 20 basis points to 3.13% compared to TEY for the same period of the prior year of 2.93%.

Overall, the Company’s cost of funds for all deposits and borrowings averaged 1.14% during the fiscal 2019 first quarter, compared to 0.51% for the 2018 first fiscal quarter. This increase was primarily due to a rise in short-term interest rates affecting overnight borrowing rates, other wholesale funding, and the interest-bearing time deposits acquired by the Company in connection with the Company’s acquisition of Crestmark in the fourth quarter of fiscal 2018. The Company’s overall cost of deposits was 0.91% in the fiscal first quarter of 2019, compared to 0.24% in the same quarter of fiscal 2018. Excluding wholesale deposits, the Company’s cost of deposits for the first quarter of fiscal 2019 would have been 0.14%.

Non-Interest IncomeFiscal 2019 first quarter non-interest income was $37.8 million, an increase of 29% over the same quarter of fiscal 2018, largely due to increases in rental income, deposit fees, other income, and gain on sale of loans and leases. Lower losses on sale of securities also contributed to the overall increase in non-interest income. Partially offsetting the increase in non-interest income was a decrease in card fee income to $19.4 million, compared to $25.2 million in same quarter of the prior fiscal year.

Together, card and deposit fee income totaled $21.3 million for the fiscal 2019 first quarter, compared to $26.1 million in the same quarter in fiscal 2018. This expected reduction in residual fee income was related to the wind-down of the Company’s relationships with two non-strategic payments partners.

Non-Interest ExpenseNon-interest expense increased to $74.3 million for the 2019 fiscal first quarter, compared to $44.0 million for the same quarter of fiscal 2018, primarily due to the addition of the Crestmark division which was not present in the comparable quarter in the prior fiscal year.

Income Tax ExpenseThe Company recorded an income tax benefit of $1.7 million, or an effective tax rate of (11.56%), for the fiscal 2019 first quarter, compared to an income tax expense of $5.7 million, or an effective tax rate of 54.90%, for the fiscal 2018 first quarter.

The Company originated $35.6 million in solar leasing initiatives and recorded a related income tax benefit in the fiscal first quarter of 2019. Investment tax credits related to these solar leasing initiatives and future originations in fiscal 2019 will be recognized ratably based on income over the duration of the current fiscal year. The timing and impact of future solar tax credits are expected to vary from period to period, and Meta intends to undertake only those tax credit opportunities that meet the Company’s underwriting criteria.

Investments, Loans and Leases

December 31, September 30, June 30, March 31, December 31, 2018 2018 2018 2018 2017 ------------- ------------- ------------- ------------- ------------- Total investments $ 1,855,792 $ 2,019,968 $ 2,149,709 $ 2,306,603 $ 2,233,705 Loans held for sale Consumer credit products 24,233 — — — — SBA/USDA(1) 9,327 15,606 — — — Total loans held for sale 33,560 15,606 — — — National Lending loans and leases Asset based lending 554,072 477,917 — — — Factoring 284,912 284,221 — — — Lease financing 290,889 265,315 — — — Insurance premium finance 330,712 337,877 303,603 240,640 235,671 SBA/USDA 67,893 59,374 — — — Other commercial finance 89,402 85,145 11,418 8,041 6,306 Commercial finance(2) 1,617,880 1,509,849 315,021 248,681 241,977 Consumer credit products 96,144 80,605 26,583 — — Other consumer finance 182,510 189,756 194,344 201,942 209,137 ----------- - ----------- - ----------- - ----------- - ----------- - Consumer finance 278,654 270,361 220,927 201,942 209,137 Tax services 76,575 1,073 14,281 58,794 67,424 Warehouse finance 176,134 65,000 — — — ----------- - ----------- - ----------- - ----------- - ----------- - Total National Lending loans and 2,149,243 1,846,283 550,229 509,417 518,538 leases Community Banking loans Commercial real estate and operating 863,753 790,890 751,146 723,091 680,785 Consumer one-to-four family real 256,341 247,318 237,704 228,415 225,841 estate and other Agricultural real estate and 58,971 60,498 60,096 58,773 85,999 operating ----------- - ----------- - ----------- - ----------- - ----------- - Total Community Banking loans 1,179,065 1,098,706 1,048,946 1,010,279 992,625 ----------- - ----------- - ----------- - ----------- - ----------- - Total gross loans and leases 3,328,308 2,944,989 1,599,175 1,519,696 1,511,163 Allowance for loan and lease losses (21,290 ) (13,040 ) (21,950 ) (27,078 ) (8,862 ) Net deferred loan origination fees 1,190 (250 ) (1,881 ) (2,080 ) (2,023 ) ----------- - ----------- - ----------- - ----------- - ----------- - Total loans and leases, net of $ 3,308,208 $ 2,931,699 $ 1,575,344 $ 1,490,538 $ 1,500,278 allowance - --------- - - --------- - - --------- - - --------- - - --------- - (1) The December 31, 2018 balance included $0.8 million of an interest rate mark premium related to the acquired loans and leases from the Crestmark acquisition. (2)The December 31, 2018 balance included $10.1 million and $5.6 million of credit and interest rate mark discounts, respectively, related to the acquired loans and leases from the Crestmark acquisition.

The Company continued to utilize sales of securities and cash flow from its amortizing securities portfolio to fund loan growth, which contributed to a 17% decrease in investment securities at December 31, 2018, from $2.23 billion at December 31, 2017.

Total gross loans and leases increased $1.82 billion, or 120%, to $3.33 billion at December 31, 2018, from $1.51 billion at December 31, 2017, primarily driven by loans and leases attributable to the recently acquired Crestmark commercial finance division, along with increases in warehouse finance and consumer credit product loans, a 40% increase in insurance premium finance loans, and a 19% increase in community banking loans.

At December 31, 2018, commercial finance loans, which comprised 49% of the Company’s gross loan and lease portfolio, totaled $1.62 billion, reflecting growth of $108.0 million, or 7%, from September 30, 2018. Warehouse finance loans increased by $111.1 million from the prior quarter, due to the Company’s participation in two highly-secured, asset-based warehouse lines of credit. Community banking loans grew by $80.4 million, or 7%, during the first quarter of fiscal 2019, due primarily to growth in commercial real estate loans.

Asset QualityThe Company’s allowance for loan and lease losses was $21.3 million at December 31, 2018, compared to $8.9 million at December 31, 2017, driven primarily by increases in the allowance of $5.4 million in consumer lending, $5.0 million in commercial finance, and $1.8 million in the community banking portfolio.

(Unaudited) Three Months Ended Allowance for loan and lease loss activity December September December 31, 2018 30, 2018 31, 2017 ---------- ---------- --------- (Dollars in thousands) Beginning balance $ 13,040 $ 21,950 $ 7,534 Provision - tax services loans 1,496 1,009 1,017 Provision - all other loans and leases 7,603 3,697 51 Charge-offs - tax services loans (42 ) (11,295 ) — Charge-offs - all other loans and leases (2,762 ) (3,420 ) (160 ) Recoveries - tax services loans 92 31 413 Recoveries - all other loans and leases 1,863 1,068 7 Ending balance $ 21,290 $ 13,040 $ 8,862 - ------ - - ------ - - ----- -

Provision for loan and lease losses was $9.1 million for the quarter ended December 31, 2018, compared to $1.1 million for the comparable period in the prior fiscal year. The increase in provision was primarily driven by growth in the commercial finance and tax advance portfolios, as well as provision expense to maintain allowance levels. Net charge-offs were $0.8 million for the quarter ended December 31, 2018 compared to a net recovery of $0.3 million for the quarter ended December 31, 2017.

The Company’s non-performing assets at December 31, 2018, were $45.4 million, representing 0.73% of total assets, compared to $41.8 million, or 0.72% of total assets at September 30, 2018 and $33.3 million, or 0.61% of total assets at December 31, 2017. The Company’s non-performing loans and leases at December 31, 2018 were $13.9 million, representing 0.42% of total loans and leases, compared to $10.2 million, or 0.35% of total loans and leases at September 30, 2018 and $33.2 million, or 2.19% of total loans and leases at December 31, 2017.

Deposits, Borrowings and Other LiabilitiesTotal average deposits for the fiscal 2019 first quarter increased by $1.49 billion, or 48%, compared to the same period in fiscal 2018. Average wholesale deposits increased $1.21 billion, or 251%, and average non-interest-bearing deposits increased $161.0 million, or 7%, for the 2019 fiscal first quarter when compared to the same period in fiscal 2018.

The average balance of total deposits and interest-bearing liabilities was $5.10 billion for the three-month period ended December 31, 2018, compared to $3.62 billion for the same period in the prior fiscal year, representing an increase of 41%.

Total end-of-period deposits increased 40%, to $4.94 billion at December 31, 2018, compared to $3.51 billion at December 31, 2017. The increase in end-of-period deposits was primarily a result of increases in wholesale deposits by 326%, interest-bearing checking deposits by 52%, and certificates of deposits by 33%.

Regulatory Capital The Company and MetaBank remained above the federal regulatory minimum capital requirements at December 31, 2018 and continued to be classified as well-capitalized institutions. Regulatory capital ratios of the Company and the Bank are stated in the table below.

The tables below include certain non-GAAP financial measures that are used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews these measures along with other measures of capital as part of its financial analysis.

December Septembe June March December As of the periods indicated 31, r 30, 30, 31, 31, 2018 2018 2018 2018 2017 ---------------------------------- ------- ------- ------- ------- ------- Company Tier 1 leverage ratio 7.90 % 8.50 % 8.29 % 7.26 % 7.68 % Common equity Tier 1 capital ratio 10.11 % 10.56 % 13.92 % 13.74 % 12.88 % Tier 1 capital ratio 10.47 % 10.97 % 14.35 % 14.18 % 13.32 % Total qualifying capital ratio 12.69 % 13.18 % 18.37 % 18.48 % 16.91 % MetaBank Tier 1 leverage ratio 9.01 % 9.75 % 10.16 % 8.93 % 9.61 % Common equity Tier 1 capital ratio 11.87 % 12.50 % 17.57 % 17.43 % 16.64 % Tier 1 capital ratio 11.91 % 12.56 % 17.57 % 17.43 % 16.64 % Total qualifying capital ratio 12.41 % 12.89 % 18.50 % 18.59 % 17.03 %

Due to the predictable, quarterly cyclicality of non-interest bearing deposits in connection with tax season business activity, management believes that a six-month capital calculation is a useful metric to monitor the Company’s overall capital management process. As such, MetaBank’s six-month average Tier 1 leverage ratio, Common equity Tier 1 capital ratio, Tier 1 capital ratio, and Total qualifying capital ratio as of December 31, 2018, were 9.46%, 13.42%, 13.47%, and 14.03%, respectively.

The following table provides certain non-GAAP financial measures used to compute certain of the ratios included in the table above for the periods presented, as well as a reconciliation of such non-GAAP financial measures to the most directly comparable financial measure in accordance with GAAP:

December September June 30, March 31, December 31, Standardized Approach(1) 31, 30, 2018 2018 2017 2018 2018 ----------- ----------- ----------- ----------- ------------ (Dollars in Thousands) Total stockholders’ equity $ 770,728 $ 747,726 $ 443,913 $ 443,703 $ 437,705 Adjustments: LESS: Goodwill, net of associated deferred 299,037 299,456 94,781 95,262 95,705 tax liabilities LESS: Certain other intangible assets 61,317 64,716 46,098 47,724 40,417 LESS: Net deferred tax assets from operating 4,720 — — — — loss and tax credit carry-forwards LESS: Net unrealized gains (losses) on (28,829 ) (33,114 ) (28,601 ) (21,166 ) 5,782 available-for-sale securities LESS: Non-controlling interest 3,267 3,574 — — — LESS: Unrealized currency gains (losses) (357 ) 3 — — — --------- - --------- - --------- - --------- - --------- -- Common Equity Tier 1 (1) 431,573 413,091 331,635 321,882 295,801 Long-term debt and other instruments 13,661 13,661 10,310 10,310 10,310 qualifying as Tier 1 Tier 1 minority interest not included in 1,796 2,118 — — — common equity tier 1 capital Total Tier 1 capital 447,030 428,870 341,945 332,192 306,111 --------- - --------- - --------- - --------- - --------- -- Allowance for loan and lease losses 21,422 13,185 22,151 27,285 9,058 Subordinated debentures (net of issuance 73,528 73,491 73,442 73,418 73,382 costs) --------- - --------- - --------- - --------- - --------- -- Total qualifying capital $ 541,980 $ 515,546 $ 437,538 $ 432,896 $ 388,551 - ------- - - ------- - - ------- - - ------- - - ------- -- (1) Capital ratios were determined using the Basel III capital rules that became effective on January 1, 2015. Basel III revised the definition of capital, increased minimum capital ratios, and introduced a minimum CET1 ratio; those changes are being fully phased in through the end of 2021.

The following table provides a reconciliation of tangible common equity used in calculating tangible book value data.

December 31, 2018 ----------- (Dollars in Thousands) Total Stockholders’ Equity $ 770,728 Less: Goodwill 303,270 Less: Intangible assets 66,366 Tangible common equity 401,092 Less: Accumulated Other Comprehensive Income (Loss) (“AOCI”) (29,186 ) Tangible common equity excluding AOCI (Loss) 430,278 --------- -

Future OutlookThe Company continues to expect fiscal 2019 earnings per common share to be in the range of $2.30 to $2.70, excluding the effects related to Company executive transition costs. The Company estimates $6.1 million of pre-tax executive transition agreement costs will reduce fiscal 2019 earnings per common share by up to $0.12, all of which costs the Company expects will be incurred in the quarter ending March 31, 2019. The Company also affirms the earnings outlook for fiscal year 2020 GAAP earnings per common share to be in the range of $3.10 to $3.80.

Conference CallThe Company will host a conference call and earnings webcast at 4:00 p.m. CST (5:00 p.m. EST) on Monday, January 28, 2019. The live webcast of the call can be accessed from Meta’s Investor Relations website at www.metafinancialgroup.com. Telephone participants may access the live conference call by dialing (844) 461-9934 beginning approximately 10 minutes prior to start time. Please ask to join the Meta Financial conference call, and provide conference ID 7878366 upon request. International callers should dial (636) 812-6634. A webcast replay will also be archived at www.metafinancialgroup.com for one year.

Forward-Looking StatementsThe Company and MetaBank may from time to time make written or oral “forward-looking statements,” including statements contained in this press release, the Company’s filings with the Securities and Exchange Commission (“SEC”), the Company’s reports to stockholders, and in other communications by the Company and MetaBank, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “could,” “future,” or the negative of those terms, or other words of similar meaning or similar expressions. You should carefully read statements that contain these words because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements are based on information currently available to us and assumptions about future events, and include statements with respect to the Company’s beliefs, expectations, estimates, and intentions, which 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 risks, uncertainties and other factors may cause our actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Such statements address, among others, the following subjects: future operating results; customer retention; loan and other product demand; important components of the Company’s statements of financial condition and operations; growth and expansion; new products and services, such as those offered by MetaBank or the Company’s Payments divisions (which include Meta Payment Systems, Refund Advantage, EPS Financial and Specialty Consumer Services); credit quality and adequacy of reserves; technology; and the Company’s employees. The following factors, among others, could cause the Company’s financial performance and results of operations to differ materially from the expectations, estimates, and intentions expressed in such forward-looking statements: risks relating to the recently-announced management transition; maintaining our executive management team; the expected growth opportunities, beneficial synergies and/or operating efficiencies from the Crestmark acquisition may not be fully realized or may take longer to realize than expected; customer losses and business disruption related to the Crestmark acquisition; unanticipated or unknown losses and liabilities may be incurred by the Company following the Crestmark acquisition; actual changes in interest rates and the Fed Funds rate; additional changes in tax laws; the strength of the United States’ economy, in general, and the strength of the local economies in which the Company conducts operations; risks relating to the recent U.S. government shutdown, including any adverse impact on our ability to originate or sell SBA/USDA loans and any delay by the Internal Revenue Service in processing taxpayer refunds, thereby increasing the cost to us of our refund advance loans; the effects of, and changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve”), as well as efforts of the United States Congress and the United States Treasury in conjunction with bank regulatory agencies to stimulate the economy and protect the financial system; inflation, interest rate, market, and monetary fluctuations; the timely and efficient development of, and acceptance of, new products and services offered by the Company or its strategic partners, as well as risks (including reputational and litigation) attendant thereto, and the perceived overall value of these products and services by users; the risks of dealing with or utilizing third parties, including, in connection with the Company’s refund advance business, the risk of reduced volume of refund advance loans as a result of reduced customer demand for or acceptance of usage of Meta’s strategic partners’ refund advance products; any actions which may be initiated by our regulators in the future; the impact of changes in financial services laws and regulations, including, but not limited to, laws and regulations relating to the tax refund industry and the insurance premium finance industry; our relationship with our primary regulators, the Office of the Comptroller of the Currency and the Federal Reserve, as well as the Federal Deposit Insurance Corporation, which insures MetaBank’s deposit accounts up to applicable limits; technological changes, including, but not limited to, the protection of electronic files or databases; acquisitions; litigation risk, in general, including, but not limited to, those risks involving MetaBank’s divisions; the growth of the Company’s business, as well as expenses related thereto; continued maintenance by MetaBank of its status as a well-capitalized institution, particularly in light of our growing deposit base, a portion of which has been characterized as “brokered;” changes in consumer spending and saving habits; and the success of the Company at maintaining its high quality asset level and managing and collecting assets of borrowers in default should problem assets increase.

The foregoing list of factors is not exclusive. We caution you not to place undue reliance on these forward-looking statements. The forward-looking statements included in this press release speak only as of the date hereof. Additional discussions of factors affecting the Company’s business and prospects are reflected under the caption “Risk Factors” and in other sections of the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended September 30, 2018, and in other filings made with the SEC. The Company expressly disclaims any intent or obligation to update any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of the Company or its subsidiaries, whether as a result of new information, changed circumstances, or future events or for any other reason.

Condensed Consolidated Statements of Operations (Unaudited)(Dollars in Thousands, Except Share and Per Share Data)

ASSETS December 31, September 30, June 30, March 31, December 31, 2018 2018 2018 2018 2017 -------------------------- --------------- --------------- --------------- --------------- --------------- Cash and cash equivalents $ 164,169 $ 99,977 $ 71,276 $ 107,563 $ 1,300,409 Investment securities available for sale, at 1,340,870 1,484,160 1,349,642 1,417,012 1,390,411 fair value Mortgage-backed securities available for sale, at 354,186 364,065 575,999 654,890 600,112 fair value Investment securities held 153,075 163,893 215,850 226,308 234,714 to maturity, at cost Mortgage-backed securities 7,661 7,850 8,218 8,393 8,468 held to maturity, at cost Loans held for sale 33,560 15,606 — — — Loans and leases 3,329,498 2,944,739 1,597,294 1,517,616 1,509,140 Allowance for loan and (21,290 ) (13,040 ) (21,950 ) (27,078 ) (8,862 ) lease loss Federal Home Loan Bank 15,600 23,400 7,446 17,846 57,443 Stock, at cost Accrued interest 22,076 22,016 17,825 17,604 21,089 receivable Premises, furniture, and 44,299 40,458 20,374 20,278 20,571 equipment, net Rental equipment, net 146,815 107,290 — — — Bank-owned life insurance 87,934 87,293 86,655 86,021 85,371 Foreclosed real estate and 31,548 31,638 29,922 30,050 128 repossessed assets Goodwill 303,270 303,270 98,723 98,723 98,723 Intangible assets 66,366 70,719 46,098 47,724 50,521 Prepaid assets 31,483 27,906 23,211 26,342 29,758 Deferred taxes 23,607 18,737 23,025 20,939 5,379 Other assets 48,038 35,090 19,551 31,462 14,588 ------------- - ------------- - ------------- - ------------- - ------------- - Total assets $ 6,182,765 $ 5,835,067 $ 4,169,159 $ 4,301,693 $ 5,417,963 --- --------- - --- --------- - --- --------- - --- --------- - --- --------- - LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Non-interest-bearing $ 2,739,757 $ 2,405,274 $ 2,637,987 $ 2,850,886 $ 2,779,645 checking Interest-bearing checking 128,662 111,578 103,065 123,398 84,390 Savings deposits 52,229 54,765 57,356 65,345 53,535 Money market deposits 54,559 51,995 45,115 48,070 47,451 Time certificates of 170,629 276,180 57,151 71,712 128,220 deposit Wholesale deposits 1,790,611 1,531,186 620,959 181,087 420,404 ------------- - ------------- - ------------- - ------------- - ------------- - Total deposits 4,936,447 4,430,987 3,521,633 3,340,497 3,513,645 Short-term debt 231,293 425,759 27,290 315,777 1,313,401 Long-term debt 88,983 88,963 85,580 85,572 85,552 Accrued interest payable 11,280 7,794 3,705 1,315 4,065 Accrued expenses and other 144,034 133,838 87,038 114,829 63,595 liabilities Total liabilities 5,412,037 5,087,341 3,725,246 3,857,990 4,980,258 ------------- - ------------- - ------------- - ------------- - ------------- - STOCKHOLDERS’ EQUITY Preferred stock, 3,000,000 shares authorized, no shares issued or outstanding at December — — — — — 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017 Common stock, $.01 par value; 90,000,000, 90,000,000, 90,000,000, 90,000,000, and 45,000,000 shares authorized, 39,494,919, 39,192,063, 29,122,596, 29,119,718, and 29,015,090 shares 394 393 291 291 290 issued and 39,405,508, 39,167,280, 29,101,605, 29,098,773, and 28,994,538 shares outstanding at December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017. Common stock, Nonvoting, $.01 par value; 3,000,000 shares authorized, no shares issued or outstanding at December — — — — — 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017. Additional paid-in capital 572,156 565,811 267,610 265,491 262,678 Retained earnings 228,453 213,048 206,284 200,753 170,578 Accumulated other comprehensive (loss) (29,186 ) (33,111 ) (28,601 ) (21,166 ) 5,782 income Treasury stock, at cost, 89,411, 24,783, 20,991, 20,945, and 20,552 common shares at December 31, (4,356 ) (1,989 ) (1,671 ) (1,666 ) (1,623 ) 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017. Total equity attributable 767,461 744,152 443,913 443,703 437,705 to parent Non-controlling interest 3,267 3,574 — — — Total stockholders’ equity 770,728 747,726 443,913 443,703 437,705 ------------- - ------------- - ------------- - ------------- - ------------- - Total liabilities and $ 6,182,765 $ 5,835,067 $ 4,169,159 $ 4,301,693 $ 5,417,963 stockholders’ equity --- --------- - --- --------- - --- --------- - --- --------- - --- --------- - All share and per share data reported in this release for all periods presented has been adjusted to reflect the 3-for-1 forward stock split effected by the Company on October 4, 2018.

Consolidated Statements of Operations (Unaudited)(Dollars in Thousands, Except Share and Per Share Data)

Three Months Ended ---------------------------------------------- December 31, 2018 September December 31, 30, 2018 2017 ------------------------------------------------------------- ------------------- ----------- ------------ Interest and dividend income: Loans and leases, including fees $ 60,498 $ 45,131 $ 16,443 Mortgage-backed securities 2,698 3,724 3,758 Other investments 11,780 11,346 10,656 ----------------- - --------- - ---------- - 74,976 60,201 30,857 ----------------- - --------- - ---------- - Interest expense: Deposits 10,596 8,057 1,885 FHLB advances and other borrowings 4,108 3,607 2,776 ----------------- - --------- - ---------- - 14,704 11,664 4,661 ----------------- - --------- - ---------- - Net interest income 60,272 48,537 26,196 Provision for loan for lease losses 9,099 4,706 1,068 ----------------- - --------- - ---------- - Net interest income after provision for loan and lease losses 51,173 43,831 25,128 ----------------- - --------- - ---------- - Non-interest income: Refund transfer product fees 261 526 192 Tax advance product fees 1,685 (36 ) 1,947 Card fees 19,351 19,536 25,247 Rental income 10,890 7,333 — Loan and lease fees 1,247 1,025 1,292 Bank-owned life insurance 642 638 669 Deposit fees 1,938 1,487 848 Loss on sale of securities (22 ) (6,979 ) (1,010 ) Gain on sale of loans and leases 867 355 — Gain (loss) on foreclosed real estate 15 — (19 ) Other income 877 728 102 ----------------- - --------- - ---------- - Total non-interest income 37,751 24,613 29,268 ----------------- - --------- - ---------- - Non-interest expense: Compensation and benefits 33,010 30,093 22,340 Refund transfer product expense 10 85 101 Tax advance product expense 452 81 280 Card processing 7,085 5,485 6,540 Occupancy and equipment 6,458 5,653 4,890 Operating lease equipment depreciation expense 7,765 5,386 — Legal and consulting 3,969 6,628 2,416 Marketing 539 1,037 553 Data processing 437 268 414 Intangible amortization expense 4,383 3,564 1,681 Intangible impairment expense — 18 — Other expense 10,187 8,342 4,827 ----------------- - --------- - ---------- - Total non-interest expense 74,295 66,640 44,042 ----------------- - --------- - ---------- - Income before income tax expense 14,629 1,804 10,354 Income tax expense (benefit) (1,691 ) (7,591 ) 5,684 ----------------- - --------- - ---------- - Net income before non-controlling interest 16,320 9,395 4,670 Net income attributable to non-controlling interest 922 673 — ----------------- - --------- - ---------- - Net income attributable to parent $ 15,398 $ 8,722 $ 4,670 ---------- ------ - -- ------ - -- ------- - Earnings per common share Basic $ 0.39 $ 0.24 $ 0.16 ---------- ------ - -- ------ - -- ------- - Diluted $ 0.39 $ 0.24 $ 0.16 ---------- ------ - -- ------ - -- ------- - Shares used in computing earnings per share Basic 39,335,054 35,711,400 28,970,334 Diluted 39,406,507 35,823,162 29,138,523 All share and per share data reported in this release for all periods presented has been adjusted to reflect the 3-for-1 forward stock split effected by the Company on October 4, 2018.

Average Balances, Interest Rates and YieldsThe following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. Only the yield/rate reflects tax-equivalent adjustments. Non-accruing loans and leases have been included in the table as loans carrying a zero yield.

Three Months Ended December 2018 2017 31, --------------------------- ---------------------------------------- ---------------------------------------- Average Interest Yield Average Interest Yield (Dollars in Thousands) Outstanding Earned / / Outstanding Earned / / Balance Paid Rate Balance Paid Rate (1) (2) --------------------------- -------------------- ---------- ------ -------------------- ---------- ------ Interest-earning assets: Cash & fed funds sold $ 45,383 $ 555 4.85 % $ 100,321 $ 607 2.40 % Mortgage-backed securities 381,285 2,698 2.81 % 673,411 3,758 2.21 % Tax exempt investment 1,237,198 7,803 3.17 % 1,408,552 8,698 3.25 % securities Asset-backed securities 298,445 2,712 3.61 % 93,631 765 3.24 % Other investment securities 110,879 710 2.54 % 78,584 586 2.96 % ------------------- --------- ---- - ------------------- --------- ---- - Total investments 2,027,807 13,923 3.13 % 2,254,178 13,807 2.93 % Commercial finance loans 1,562,054 39,281 9.98 % 249,927 2,868 4.55 % and leases Consumer finance loans 291,421 6,230 8.48 % 204,024 3,109 6.04 % Tax services loans 11,009 2 0.07 % 12,378 — — % Warehouse finance loans 99,818 1,632 6.49 % — — — % National lending loans and 1,964,302 47,145 9.52 % 466,329 5,977 5.09 % leases ------------------- --------- ---- - ------------------- --------- ---- - Community banking loans 1,156,072 13,353 4.58 % 940,161 10,466 4.42 % ------------------- --------- ---- - ------------------- --------- ---- - Total loans and leases 3,120,374 60,498 7.69 % 1,406,490 16,443 4.64 % ------------------- --------- ---- - ------------------- --------- ---- - Total interest-earning $ 5,193,564 $ 74,976 5.89 % $ 3,760,989 $ 30,857 3.55 % assets -- ------ ---- - -- ------ ---- - Non-interest-earning assets 787,973 361,960 ------------------- ------------------- Total assets $ 5,981,537 $ 4,122,949 --------- --------- --------- --------- Interest-bearing liabilities: Interest-bearing checking $ 102,880 $ 58 0.23 % $ 71,448 $ 50 0.28 % Savings 53,661 10 0.07 % 53,084 8 0.06 % Money markets 54,288 64 0.47 % 47,899 27 0.22 % Time deposits 205,049 881 1.71 % 128,496 366 1.13 % Wholesale deposits 1,698,492 9,583 2.24 % 483,878 1,434 1.18 % ------------------- --------- ---- - ------------------- --------- ---- - Total interest-bearing 2,114,370 10,596 1.99 % 784,805 1,885 0.95 % deposits Overnight fed funds 393,315 2,481 2.50 % 139,152 525 1.50 % purchased FHLB advances — — — % 268,913 937 1.38 % Subordinated debentures 73,504 1,161 6.27 % 73,359 1,113 6.02 % Other borrowings 30,058 466 6.15 % 22,982 201 3.47 % ------------------- --------- ---- - ------------------- --------- ---- - Total borrowings 496,877 4,108 3.28 % 504,406 2,776 2.18 % ------------------- --------- ---- - ------------------- --------- ---- - Total interest-bearing 2,611,247 14,704 2.23 % 1,289,211 4,661 1.43 % liabilities Non-interest bearing 2,489,148 — — % 2,328,159 — — % deposits ------------------- --------- ---- - ------------------- --------- Total deposits and interest-bearing $ 5,100,395 $ 14,704 1.14 % $ 3,617,370 $ 4,661 0.51 % liabilities -- ------ ---- - -- ------ ---- - Other non-interest-bearing 128,900 71,398 liabilities ------------------- ------------------- Total liabilities 5,229,295 3,688,768 Shareholders’ equity 752,242 434,181 ------------------- ------------------- Total liabilities and $ 5,981,537 $ 4,122,949 shareholders’ equity --------- --------- --------- --------- Net interest income and net interest rate spread including $ 60,272 4.75 % $ 26,196 3.04 % non-interest-bearing deposits -- ------ ---- - -- ------ ---- - Net interest margin 4.60 % 2.76 % ---- - ---- - Tax-equivalent effect 0.16 % 0.30 % ---- - ---- - Net interest margin, 4.76 % 3.06 % tax-equivalent(3) ---- - ---- - (1)Tax rate used to arrive at the TEY for the three months ended December 31, 2018 was 21%. (2)Tax rate used to arrive at the TEY for the three months ended December 31, 2017 was 24.53%. (3) Net interest margin expressed on a fully-taxable-equivalent basis (“net interest margin, tax-equivalent”) is a non-GAAP financial measure. The tax-equivalent adjustment to net interest income recognizes the estimated income tax savings when comparing taxable and tax-exempt assets and adjusting for federal and state exemption of interest income. The Company believes that it is a standard practice in the banking industry to present net interest margin expressed on a fully-taxable-equivalent basis and, accordingly, believe the presentation of this non-GAAP financial measure may be useful for peer comparison purposes.

Selected Financial Information December September June 30, March 31, December As of and for the three months ended: 31, 30, 2018 2018 31, 2018 2018 2017 -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- Equity to total assets 12.47 % 12.81 % 10.65 % 10.31 % 8.08 % Book value per common share outstanding $ 19.56 $ 19.09 $ 15.25 $ 15.25 $ 15.10 Tangible book value per common share outstanding $ 10.18 $ 9.54 $ 10.28 $ 10.22 $ 9.95 Tangible book value per common share outstanding $ 10.92 $ 10.39 $ 11.26 $ 10.94 $ 9.75 excluding AOCI Common shares outstanding 39,405,50 39,167,28 29,101,60 29,098,77 28,994,53 8 0 5 3 8 Non-performing assets to total assets 0.73 % 0.72 % 0.86 % 0.84 % 0.61 % Non-performing loans and leases to total loans and 0.42 % 0.35 % 0.36 % 0.40 % 2.19 % leases Net interest margin 4.60 % 4.05 % 2.94 % 2.61 % 2.76 % Net interest margin, tax-equivalent 4.76 % 4.27 % 3.23 % 2.89 % 3.06 % Return on average assets 1.03 % 0.65 % 0.64 % 2.67 % 0.45 % Return on average equity 8.19 % 5.34 % 6.11 % 28.37 % 4.30 % Full-time equivalent employees 1,229 1,219 932 916 878

Select Quarterly Expenses ------------------------------------------------------------------------------------------------------------- (Dollars in Actual Anticipated Thousands) For the Three Months Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Ended 2018 2019 2019 2019 2019 2020 2020 2020 2020 -------------------- -------- -------- -------- ------- -------- -------- -------- -------- -------- Amortization of $ 4,383 $ 5,602 $ 4,383 $ $ 2,683 $ 3,409 $ 2,640 $ 2,286 $ 2,683 Intangibles (1) Executive Officer Stock Compensation $ 941 $ 917 $ 927 $ $ 679 $ 669 $ 669 $ 676 $ 485 (2) (1) These amounts are based upon the current reporting period’s intangible assets only. This table makes no assumption for expenses related to future acquired intangible assets. (2) These amounts are based upon the long-term employment agreements signed in the first and second quarters of fiscal 2017 by the Company’s three highest paid executives at that time. This table makes no assumption for expenses related to any additional future agreements entered into, or to be entered into, after such quarters. The amounts in this table are not expected to be impacted by the Executive Separation Agreement entered into by the Company as of January 16, 2019 and filed with the Securities and Exchange Commission on January 17, 2019.

About Meta Financial Group®Meta Financial Group, Inc. ® (Nasdaq: CASH) is the holding company for the financial services company MetaBank® (“Meta”). Founded in 1954, Meta has grown to operate in several different financial sectors: payments, tax, national commercial lending, community banking, national consumer lending, and insurance premium financing. Meta works with high-value niche industries, strategic-growth companies and technology adopters to grow their businesses and build more profitable customer relationships. Meta tailors solutions for bank and non-bank businesses, and provides a focused collaborative approach. The organization is helping to shape the evolving financial services landscape by directly investing in innovation and acquiring complementary businesses that strategically expand its suite of services. Meta has a national presence and over 1,200 employees, with corporate headquarters in Sioux Falls, S.D. For more information, visit the Meta Financial Group website or LinkedIn.

Investor Relations and Media Contact: Brittany Kelley ElsasserDirector of Investor Relations605-362-2423 bkelley@metabank.com

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