Buoyed by lower expenses and increased fee income, Meta Financial Group Inc. of Storm Lake, Iowa, said that it earned $3.1 million for its fiscal year first quarter.
Profit for the quarter that ended Dec. 31 was more than four times higher than a year earlier, when the company took a $1.5 million goodwill impairment charge.
The $1.6 billion-asset Meta Financial is the holding company for MetaBank, which has 12 branches in Iowa and South Dakota. The company also offers prepaid cards and other electronic payments services and products through its Meta Payment Systems division.
The payments segment reported income of $1.9 million, up almost 19% from a year earlier, as revenue remained relatively flat but its cost efficiency improved. The banking unit reported profit of $1.3 million, compared with a loss of $700,000.
Meta Financial's shares rose sharply Tuesday after earnings were announced. The shares were trading at $19.49 in mid-afternoon, up 7.6% from Monday's closing price.
Meta Financial said Tuesday that for the overall company first quarter revenue totaled $25.3 million, up 1.6%, while noninterest income rose 3%, to $15.7 million. This resulted from an increase in gain on sale of securities.
Noninterest expense dropped 13%, to $18.8 million, as compensation costs declined 8%, to $7.2 million. Meta Financial said that overall staffing is 3% lower than in December 2010 as it has worked to streamline operations. Interest expense declined 27%, to $977,000, from a year earlier.
Meta Financial also said it sold $299 million of its mortgage-backed securities, which will result in an after-tax gain of $7.2 million to be recorded in the second quarter.