Meta Financial Group Inc.'s profit fell by almost 40% in its fiscal first quarter after it took a goodwill charge stemming from its poor stock performance, it reported on Monday.
The Storm Lake, Iowa, company's share price has fallen more than 50% since mid-October, when it reported that the Office of Thrift Supervision had ordered it to shut down a low-dollar, high-interest loan program it offered to users of prepaid debit cards. The OTS said Meta was engaging in "unfair or deceptive acts or practices." It also limited the company's ability to enter new business arrangements or alter existing ones, causing problems for its prepaid card partners, including NetSpend Holdings Inc. and AccountNow Inc.
Meta, which offers retail banking services directly to consumers and issues cards for other banks, said it wrote down the value of its goodwill by $1.5 million due mostly to the recent decline in its stock price. Meta reported net income of $721,000 in the quarter that ended Dec. 31.
The company last month said its regulator had notified it that it was preparing a cease-and-desist order and was also determining whether to impose civil monetary penalties against its MetaBank subsidiary, a major issuer of prepaid debit cards.
Meta's revenue for the quarter was $24.9 million, a 20% decline, driven mostly by a drop in fee revenue from the discontinuance of its iAdvance loan program.
