EX-99.2 3 ex99_2.htm EXHIBIT 99.2

April 2016 Investor UpdateSecond Quarter Fiscal Year 2016

Forward Looking Statements 2 Meta Financial Group, Inc.® (“the Company”) and its wholly-owned subsidiary, MetaBank® (the “Bank” or “MetaBank”), may from time to time make written or oral “forward-looking statements,” including statements contained in this investor update, 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 the Bank, 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. 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 include statements with respect to the Company’s beliefs, expectations, estimates, and intentions that 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 statements address, among others, the following subjects: future operating results; customer retention; loan and other product demand; the potential benefits of the acquisition of Fort Knox Financial Services Corporation and its wholly-owned subsidiary, Tax Product Services LLC (collectively, “Fort Knox” or “Refund Advantage”); 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 Meta Payment Systems® (“MPS”), a division of the Bank; credit quality and adequacy of reserves; technology; and the Company's employees. Actual results may differ materially from those contained in the forward-looking statements contained herein. 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: the risk that the Company may incur unanticipated or unknown losses or liabilities as a result of the completion of the transaction with Fort Knox; the strength of the United States' economy, in general, and the strength of the local economies in which the Company conducts operations; 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 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 development of, and acceptance of new products and services offered by the Company, 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; any actions which may be initiated by our regulators; the impact of changes in financial services laws and regulations, including, but not limited to, laws and regulations relating to the tax refund industry, our relationship with our primary regulators, the Office of the Comptroller of the Currency (“OCC”) and the Federal Reserve, as well as the Federal Deposit Insurance Corporation (“FDIC”), which insures the Bank’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 the MPS division; the growth of the Company’s business, as well as expenses related thereto; continued maintenance by the Bank of its status as a well-capitalized institution, particularly in light of our deposit base, a substantial portion of which has been characterized as “brokered”; changes in consumer spending and saving habits; and the success of the Company at managing and collecting assets of borrowers in default.The foregoing list of factors is not exclusive. Additional discussions of factors affecting the Company’s business and prospects are reflected under the headings “Risk Factors” and in other sections of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015, and other filings made with the SEC. The Company expressly disclaims any intent or obligation to update any forward-looking statement, whether written or oral, that may be made, from time to time, by or on behalf of the Company or its subsidiaries.

Meta Senior Management 3 Chairman and Chief Executive Officer, Meta Financial GroupTyler Haahr has been with Meta Financial Group since 1997. Previously, he was a partner with the law firm of Lewis and Roca LLP, Phoenix, Arizona. Tyler received his B.S. degree in Accounting with honors at the University of South Dakota in Vermillion, SD, and he graduated with honors from the Georgetown University Law Center, Washington, D.C. President, Meta Financial Group and MetaBankBrad Hanson founded Meta Payment Systems in 2004. He has more than 20 years of experience in financial services, including numerous banking, card industry and technology-related capacities. During his career, Brad has played a significant role in the development of the prepaid card industry. Brad graduated from the University of South Dakota in Vermillion, SD with a degree in Economics. Chief Financial Officer, Meta Financial Group and MetaBank Glen Herrick joined Meta in 2013 after previously serving in various finance, treasury, and risk management roles at Wells Fargo, including as CFO of Wells Fargo’s student loan division. Glen received his B.S. degree in Engineering Management from the United States Military Academy at West Point, N.Y. and MBA from the University of South Dakota. He also graduated from the Stonier Graduate School of Banking. J. Tyler Haahr Brad Hanson Glen Herrick Cindy Smith Head of Technology and Operations, Meta Financial Group and MetaBank Cindy Smith joined Meta in 2015 with 25+ years of industry experience, including serving as EVP & Director of Client Contact Services/Channel Management and as EVP & Director of BankCard Product and Services at Zions Bancorporation. In 2008, she was named by American Banker as one of the “Top 25 Most Powerful Women in Banking”. Cindy has a MBA from Lansbridge University and a Masters in Management from the American Graduate School of Management.

Meta Financial Group Highlights 4 Net Income (2QFY16 vs 2QFY15)Record quarterly earnings for 2QFY16Year-over-year growth of 176%Earnings ProfileSizable and growing non-interest income Opportunity for NIM expansion in current and higher rate environmentRevenue from business development and new agreements lags 9-12 months behind implementation costs; potential coiled spring effect to future earningsVery strong asset qualityNPAs are less than one-sixth of bank industry average at 0.15% of total assets¹Successfully integrated Refund Advantage® tax payments businessContributed sizable revenue and income in 2QFY16 (tax seasonality) with some expected spillover into 3QFY16Expenses spread throughout full year 1Meta NPA/Assets as of 3/31/16, all other bank NPA/Assets as of 12/31/15 Interest Income Non-Interest Income

Non-Performing Assets 5 Non-Performing Assets ($MM) % of Total Assets Very strong asset quality 0.15%NPAs of total assets at 3/31/16.

Who We Are BankingGrowing community bank in regions with strong economiesRetail Operations based in Iowa and South Dakota Strong and high quality commercial and agricultural loan growthAFS/IBEX asset acquisition completed in December 2014Platform for nationwide expansionHigh quality; strong and accelerating loan growth PaymentsA top prepaid card issuer in U.S.Robust non-interest bearing deposit growth“Annuity”-like stream of fee incomeNew partners being added and existing partners expandingNew product introductions in 2016 and under development for future yearsRefund Advantage® acquisition completed in September 2015 6

Footprint Map 7

Banking – Retail Bank Retail Bank Regional Community BankGrowing, profitable operationsAttractive combination of commercial, agricultural, retail and national insurance premium lendingLow-cost deposit base gives Bank competitive advantage on terms to attract high quality creditsExpect continued robust loan growth over the next twelve monthsExpect continued high credit standards resulting in low non-performing assets 8 60+Years in Business 10Branch locations in Iowa and South Dakota 23%Net Loan Growth LTM The original Storm Lake Savings and Loan bank, 1954

Banking – AFS/IBEX AFS/IBEX Loans to commercial businesses to fund their property, casualty, and liability insurance premiumsShort duration assetsHigher yields than alternative investments, particularly for the termLoans generally priced as a spread to Prime, reset higher if Prime moves higherSignificant collateralization on most loans minimizes credit riskScalable platform will support anticipated robust national growthSeasoned sales executives recently added in 2HFY15Diversifies the Bank’s assets and earnings and efficiently deploys capital into higher earning assetsBuilding franchise valueCompetitive advantage utilizing the low cost of funds, further magnified in a rising rate environment 9 9-10Month Terms, typically 46%Net Loan Growth LTM

Payments - Meta Payment Systems (MPS) Overview Prepaid card industry leader with payments diversificationContinuing to grow “annuity”-like stream of fee incomeAdjacent and complementary new product introductionRefund Advantage® – Tax channelAdditional MPS distributionFasterMoneyNew Credit productsCompetitive advantage with strong systems and infrastructure, and regulatory requirements cause high barriers to entry Highlights Growing existing relationshipsNetspendMoney NetworkBlackhawkGlobal CashNew relationships driving accelerating growth, with a strong pipelineInComm UnirushStore FinancialHyperwallet Systems Berkley Payment SolutionsUnivision 10 36%Fee Income Growth, YoY 21%Deposit Growth, YoY (qtr. avg.) 10Of top 10 program managers under contract through at least December 2019.

Payments - Refund Advantage® Asset acquisition completed in September 2015Offers tax refund-transfer (RTs) solutions through ACH direct deposit, check, and prepaid cardGrowth enhanced by new credit-advance product Processed a record number of RTs in 2QFY16On track to process a record number of RTs over the entire 2016 tax seasonOpportunities for further growth, expense reduction, and new products for the 2017 tax season 11 $19.6Million; Tax Product Revenues in 2Q16 Refund Advantage® >10Thousand; Tax Preparer Offices (EROs) >1Million; Refund Transfers (RTs)

Industry Recognition 12 Top 50 of ACH originators in 2015Top 30 of ACH receivers in 2015 #44 “More double-digit goodness” (June 2015) based on average ROE over the past three years #48 “Top 200 Community Banks and Thrifts” (June 2015) Top 1% based on three year ROE Added to Russell 2000 Index (RTY) in June 2013 Top 100 in ABA Banking Journal’s annual Performance Ranking for $1B-$10B banks (2014) Second largest prepaid card issuer in the U.S. ranked by purchase volume (2015)

Growth Drivers and Goals Optimize synergies: Banking and PaymentsStrong loan growth in local markets and AFS/IBEXContinue to improve upon earning asset mixLow cost deposits with long average life (approximately seven years) feed increasingly diverse asset mixUnlock value of non-interest bearing deposit base; rising rates should increase yields while funding costs remain lowMBS portfolio yields expected to increase if rates riseLeverage MPS leadership in payments industryIncreasing market share organically and with new partnersExpanded Tax Payments presence via Refund Advantage acquisitionEmergent leader in “virtual cards” for electronic settlementsSponsors approximately 65% of U.S. “white label” Automated Teller Machines45 patents with more than two dozen pendingBank entrance into Specialty LendingAFS/IBEX acquisition in December 2014Hired additional experienced executive and sales professionals for AFS/IBEX in fiscal 2015ClearBalance partnership may provide a loan portfolio of up to $100MM in receivables over the next two years with limited credit risk. Rates adjusted on a annual basis based on a Prime + formula.Hospitals are underwritten and provide credit guarantee 13

14 Earning Asset Mix & Net Interest Margin *Fiscal Quarter Average 46bpsNIM Expansion 84bps10 Year Treasury Yield Declined (Qtr Average) Mortgage-Backed Securities Investment Securities Loans Earning Asset Mix* 97%Cumulative Investment Securities growth since 2Q14 85%Cumulative Loan growth since 2Q14 13%Cumulative Mortgage-Backed Securities growth since 2Q14

Assets – Earning Asset Mix 15 Total Assets* ($MM) Total Investments* ($MM) Mortgage-Backed Securities Municipal Securities Other Securities 25%Asset Compound Annual Growth Rate (CAGR) *Fiscal Quarter Average

Total Gross Loans 16 *Fiscal Quarter Average Loan Composition*At March 31, 2016 Loan Portfolio* ($MM) Residential Real Estate Commercial Real Estate Agricultural Real Estate Consumer Agricultural/Commercial Operating Premium Finance

Deposits and Cost of Funds 17 Deposits* ($MM) Cost of Funds 0.10%Cost of Funds in 2Q16 Low Cost of Funds *Fiscal Quarter Average

Earnings Power While Growing Equity 18

Infrastructure 19 Early adopter of sophisticated compliance systemsInvestments in MPS program design, training and technologyImplemented enhanced BSA/AML technologyEnhanced infrastructure supports growthPrior investments allow more focus on growing current business and new development opportunities with expected improving efficienciesHigh competitive barriers to enter prepaid Industry = wide “moat”Expertise, capital, complianceOperational infrastructureHigh start-up costsDurbin-related disadvantages for larger banks

Interest Rate Risk Management Positively leveraged for higher rate environmentOther Comprehensive Income volatile relative to peersWe believe GAAP understates balance sheet true value, particularly low-cost depositsMeta MTM of ~50% of assets available for sale (securities) vs. typical “peer” at ~15-20%Expect continued, increasing Net Interest Margin (NIM)Continued robust loan growth at retail bank and AFS/IBEX improves earning asset mixNIM up 16 basis points, YoYPremium Finance (AFS/IBEX) loan yields should adjust higher if rates rise as loans are generally priced at Prime plus a spreadGrowing Premium Finance loan portfolio increases duration flexibility and thus provides increased yields in the securities portfolioMortgage-Backed Securities (MBS) could provide solid tailwind to incomeIncreased value of non-interest bearing deposits and long average life, despite “brokered deposit” categorizationReinvestment opportunity promotes NIM expansion in an up-rate environmentCash flow from securities and loans and growing MPS deposits deployed at higher ratesMBS portfolio yields expected to increase with only nominal extension if rates riseValue of deposit base unlocked if rates rise 20

Interest Rate Sensitivity 21 Static interest rate risk results do not accurately reflect Meta’s true interest rate sensitivity due to our unique and historically, predictable deposit baseDue to historically predictable weekly, monthly, and yearly deposit volatility, static IRR results can be significantly skewedUtilizing quarterly average balances for deposits and borrowings, with cash as the offset, provides a more accurate view of the Company’s IRR positionUnderstanding our historically predictable cyclicality is necessary to interpret interest rate risk resultsMPS-related non-interest bearing deposit value will be unlocked if interest rates rise

Capital Management 22 Capital enhancement historyRecent $26 million and $12 million private placements supporting Refund Advantage acquisition and other growth2014-15 At-the-Market (ATM) net proceeds of $25.4 million to support growth$61.0 million in 2012-13 via private placements and ATM offeringInstitutional investor base has shown continued supportGoal: Maintain strong capital ratiosCommon Equity Tier 1 capital > 8%Risk-based >15%Prudent capital management, flexibility to source future needs Regulatory Capital RatiosAt March 31, 2016¹ Overview MB MFG MFG MFG MFG MB MB MB Minimum Requirement to be Well Capitalized under Prompt Corrective Action (PCA) Provisions ¹Amounts estimated

Meta’s Value Proposition A leading issuer of prepaid debit cardsSpringboard into other products and servicesSignificant growth; current partners expanding, new partners added, and new products implemented with more to come in 2016Strong capital positionEarnings and historical access to capital markets to fund our growth objectivesHigher earnings, with limited balance sheet related to Refund Advantage and AFS/IBEX, should significantly reduce, if not eliminate, the need for additional capital in the absence of future acquisitionsStable, low-cost, long duration funding advantagePotential for upward trend in earningsHigher/Normalized interest rates Asset diversification with higher yields~90% of deposits are low cost and will remain so in a rising rate environmentLoan and security yields well positioned to increase with rising ratesSteady dividend policy 23

Appendix 24

Income Statement 25 Meta Financial Group ($MM) Fiscal Year Ended September 30, Three Months Ended 2011 2012¹ 20132 2014 20153 2Q15⁴ 2Q165 % Change Net Interest Income 34.3 33.7 36.0 46.3 59.2 15.3 19.9 30.4% Non-Interest Income 57.5 69.6 55.5 51.7 58.2 15.0 40.9 173.2% Total Revenue $ 91.8 $ 103.3 $ 91.5 $ 98.0 $ 117.4 $ 30.3 $ 60.8 101.1% Provision for Loan Loss 0.3 1.0 0.00 1.2 1.5 0.6 1.2 97.7% Compensation and Benefits 30.5 31.1 34.1 38.2 46.5 11.7 17.1 46.6% Card Processing Expense 23.3 17.4 15.6 15.5 16.5 3.8 6.0 58.0% All Other Expense 29.5 27.0 24.7 24.6 33.5 7.9 18.7 135.0% Net Income Before Taxes $ 8.3 $ 26.8 $ 17.1 $ 18.6 $ 19.4 $ 6.2 $ 17.9 186.3% Income Tax Expense 3.6 9.7 3.7 2.9 1.4 1.1 3.6 238.4% Net Income $ 4.6 $ 17.1 $ 13.4 $ 15.7 $ 18.1 $ 5.2 $ 14.3 175.7% ¹ Includes $11.4MM gain on sale of GNMA securities² Includes $2.4MM gain on sale of securities³ Includes $(1.9)MM loss on sale of securities, $(1.5)MM merger expense, $(1.4)MM amortization expense and $1.3MM ins. claim reimbursements and recoveries, less applicable taxes⁴ Includes $0.02MM gain on sale of securities, $(0.07)MM merger expense, and $(0.34)MM amortization expense, less applicable taxes5 Includes $0.03MM gain on sale of securities, $(0.33)MM merger expense, and $(1.19)MM amortization expense, less applicable taxes

Balance Sheet 26 Meta Financial Group($MM) Fiscal Quarter Average Fiscal Quarter Average 4Q11 4Q12 4Q13 4Q14 4Q15 2Q15 2Q16 % Change Cash And Cash Equivalents 132 106 74 100 81 231 88 -61.9% Investments and MBS 615 999 1,177 1,320 1,534 1,440 2,037 41.5% Loans Receivable Net 315 330 364 485 684 602 767 27.4% Other Assets 65 62 99 97 148 107 187 73.6% Assets $ 1,127 $ 1,496 $ 1,713 $ 2,002 $ 2,447 $ 2,381 $ 3,078 29.3% Total Deposits 970 1,275 1,405 1,542 1,820 2,043 2,436 19.3% Other Liabilities 78 112 172 290 400 139 341 34.0% Shareholders' Equity 79 109 136 171 226 199 301 51.9% Liabilities and Equity $ 1,127 $ 1,496 $ 1,713 $ 2,002 $ 2,447 $ 2,381 $ 3,078 29.3%