Ladies and gentlemen, thank you for standing by. And welcome to the Meta Financial Group Fourth Quarter and Fiscal Year 2018 Investor Conference Call. During the presentation, all participants will be in a listen-only mode. Following the prepared remarks, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Ms. Brittany Elsasser, Director of Investor Relations. Please go ahead.

Thank you, and welcome to Meta's conference call and webcast to discuss our financial results for the fourth quarter and fiscal year ended September 30, 2018, released earlier this afternoon. Additional information, including the earnings release and investor presentation, may be found on our website at metafinancialgroup.com. Company Chairman Tyler Haahr; President and CEO, Brad Hanson; and Executive Vice President and CFO, Glen Herrick; will be sharing some prepared remarks today before we open up the call for questions. Today's call may contain forward-looking statements, including statements related to Meta and its operating subsidiaries, which may generally be identified as describing the company's future plans, objectives or goals. We caution you not to place undue reliance on these forward-looking statements, which are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those currently anticipated or that we otherwise discuss today. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For further information about the factors that could affect Meta's future results, please see the company's most recent annual and quarterly reports filed on forms 10-K and 10-Q and its other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made. Meta expressly disclaims any intent or obligation to update any forward-looking statements on behalf of the company or its subsidiaries, whether as a result of new information, changed circumstances, future events or for any other reason. As a note, all share and per share data reported in our earnings release and during this conference call has been adjusted to reflect three-for-one forward stock split that the company recently affected. At this time, I would like to turn the call over to Chairman, Tyler Haahr.

Thank you, Brittany, and thank you to everyone for joining today's call. Before I turn it over to Brad to get into our record results for the fourth quarter and for fiscal 2018, I would like to touch briefly on the leadership announcement we made this afternoon. As you saw in our press release, the board has appointed Brad Hanson, our current President of Meta Financial Group, MetaBank and Meta Payment Systems, the additional role of Chief Executive Officer effective immediately. I will remain Chairman of the Board through our annual meeting of shareholders expect to take place in January 2019. It’s been a privilege to lead this great company for 13 years and to be part of its growth story for more than 20 years. I'm extremely proud of the work that we have done to strengthen and diversify our platform, take good care of our employees and customers, advance our vision of financial inclusion for everyone and deliver value for our shareholders. Following the conclusion of the fiscal year and completion of the transformative Crestmark acquisition, I, along with the board, determined that now is the right time to transition to new leadership. I'm delighted that the board has elected Brad to succeed me as CEO. He's a proven leader in the financial services industry and has been instrumental in executing our strategic initiatives. I look forward to continuing to work with Brad in my role as Chairman to ensure a smooth transition and I'm confident under Brad’s leadership Meta will continue to drive for decades to come. With that, I will turn the call over to Brad.

Thank you, Tyler. On behalf of the entire Meta team, I would like to express our gratitude for your service and many contributions to the company. Thanks again. It’s an honor to have been given this opportunity to lead Meta in a new role. As CEO and President, I will focus on continuing to build on our recent accomplishments and growth momentum. Given our strong platform and talented team, I believe Meta is poised to deliver significant value for our shareholders in the years and years ahead. The strength of our platform is evident in the fourth quarter and fiscal 2018 results we announced today. We are very pleased to report very strong fiscal 2018 results which generated record earnings of $51.6 million, up 15% over the prior fiscal year even with significant non-recurring expenses such as the Crestmark acquisition expenses. For the fiscal 2018 fourth quarter, we're also pleased to report earnings of $8.7 million or 24% per diluted share and Glen will touch on meaningful items that impacted our results in his remarks. Our results for the fourth quarter and fiscal year reflect the acquisition of Crestmark Bancorp and other strategic efforts to drive profitable growth. Due to the diligent work of our employees throughout the company, we are successfully executing on our strategies and priorities to deliver enhanced profitability and revenue growth. Our core performance remains solid and continues to reflect the success of our strategies around client acquisition and discipline around risk management and underwriting which resulted in strong core revenues and record earnings for 2018 fiscal year. We are now benefiting from the successful integration of our recent acquisition of Crestmark which has a dramatic impact on expanding the scale and reach of the company in to national commercial lending activities, in asset base lending,…

Thank you, Brad and good afternoon everyone. On a GAAP basis, for the fiscal 2018 fourth quarter, we reported net income of $8.7 million or $0.24 per diluted share. You will notice in our earnings release and on Slide 6 of our fourth quarter Investor Presentation, we have details on selected items of note that are included in GAAP earnings. In the fourth quarter, we took a $7 million loss on the sale of securities to take advantage of the opportunity to fund loan growth primarily from the Crestmark acquisition and reposition our securities portfolio for the current rate environment. We will continue to optimize shareholder returns by considering methods to utilize our balance sheet where we feel prospects are best suited for Meta over the long-term, while staying nimble to take advantage of market opportunities. Earnings in the fourth quarter also included the favorable tax benefit of $4.6 million from an amended prior-year Crestmark tax return. In addition, direct merger and acquisition-related expenses totaled $3.2 million, while expense charges related to the aforementioned operational synergies in the tax division and support areas totaled $3.1 million in the fourth fiscal quarter. In addition, GAAP net income includes the benefit of investment tax credits which contributed approximately $4 million to net earnings in the fourth quarter. Through the Crestmark acquisition, Meta acquired an experienced team and sophisticated processes for evaluating, underwriting, and managing alternative energy tax credit opportunities which we intend to utilize to manage income tax expense and to maximize shareholder return. The timing and impact of alternative energy tax credits are expected to vary from period to period, but are expected to be an ongoing source of income for the company and Meta intends to undertake only those opportunities that meet the company's underwriting and return criteria. For the…

Thanks, Glen. As I hope you learned from our comments this afternoon, all of Meta's teams including the talented professionals at Crestmark remain focused on expanding their businesses, implementing innovative programs for our partners, and maintaining rigorous discipline around risk management underwriting and expense management. Meta continues to deliver profitable growth as we take full advantage of our differentiated business model; balance sheet; and suite of diversified and fee generating products and services. That concludes our prepared remarks. Glen and I will be available for any questions. Operator, please open the line for any questions.

Thank you. [Operator Instructions]. Our first question comes from Steve Moss with B. Riley FBR. Your line is open.

Good afternoon. I want to start-off on the balance sheet and the funding of it, you guys mentioned your securities to fund loan growth how should we think about the balance sheet by the end of fiscal 2019 in terms of just deposits versus borrowings and wholesale CDs?

Hi Steve, this is Glen. We haven't set balance sheet targets per se at this point. But now that we have Crestmark with the ability to generate high return low risk commercial finance loans, and we want to grow that business, you might expect us to put more effort into growing deposits now that we have again higher return uses for those deposits. So we're using wholesale to balance the balance sheet today and hope to grow and accelerate low cost core deposit growth going forward.

Okay. And in terms of a lot of moving pieces with expenses here, just wondering if you could give us a little more color as to what to expect for the fourth quarter on a run rate basis given that Crestmark came in here two months or one month into the quarter?

Sure. We're not providing guidance on a line-by-line item. I would say revert back to our overall guidance for 2019 and 2020. That said, we had roughly two months of expenses for Crestmark in this fourth quarter and so we'll have three full months. Their run rate if you look at their call reports was in that $25 million so range. We would expect that to be a representative run rate in the near future. That said, as a combined company, there is a fair amount of variable expense. So to the extent that business accelerates, there is certainly some variable expenses or business contracts, we would expect lower variable expenses.

Thank you. And our next question comes from Michael Perito with KBW. Your line is open.

Hi, this is actually [indiscernible] on for Mike Perito. Thanks for taking my questions. Could you please give us some color on the near-term thoughts on the margin now that Crestmark is on board?

Sure. We're 427 in the quarter and that included just two months of Crestmark, it also included benefit from purchase accounting which we expect to continue as the acquired portfolio accretes through and then becomes replaced by higher yielding loans. So we would expect the margin to move up from where it’s at in this fourth quarter.

Okay. And then your consumer growth which was much higher than we were looking for fourth quarter, how you’re thinking about that growth and that business going forward?

Consumer lending growth?

Yes.

Yes, we are continuing to look at the balance sheet and the growth and profitability of those programs and managing that growth accordingly.

Thank you. The next question comes from Frank Schiraldi with Sandler O'Neill. Your line is open.

Hi, just wondered if I mean you guys reiterated guidance so it doesn't seem like there's much strain -- much change but in terms of Brad with you now CEO, is there any change to strategy at all?

Not in the near-term. We have continued to work on our plan and execute on our existing strategies. We will be looking at strategy over time and communicating with you as that develops over time.

Just in terms of the consumer credit business, I feel like we've heard some players talk recently about some areas of that business getting a bit frothy. Is there any rethinking at all in the speed and/or scope of building that business?

We have -- as we've announced we have a number of programs that we signed, we are focusing on those programs right now and managing the rollout very diligently. I would say that they may come, some of those may come on a little bit more paced as we identify and look for how the quality of those programs are being rolled out. But in general, I think our plans are still intact.

Frank, this is Glen. And I would add, you'll note that we noted that we expect the majority of our loan portfolio to be in commercial lending and commercial finance products, the majority of it. And while we have not publicly set balance sheet mix targets at this point, part of that is we do not want to be home to trying to achieve certain loan balances that may not meet our risk and return thresholds. But we do plan to over the next couple months just provide additional guidance of how we see our balance sheet mix moving forward long-term and what our goals are there.

And I would say that we are very focused on structure and risk management, risk mitigation as we develop these programs and we are not compromising on any of that.

Thank you. [Operator Instructions]. We have a question from Daniel Cardenas with Raymond James. Your line is open.

Good afternoon guys. So given that you've completed the Crestmark transaction, you're ramping up the consumer lending programs. I mean what are your thoughts about additional M&A and additional expansion efforts. Are you kind of looking for those or are you in a digestion phase right now?

Yes, hi Dan, this is Glen. I think what's reasonable in the near-term is you should not expect a material M&A from us. Again in the near term not to say we can do some fill-ins where it's aqua higher or a technology platform. But I wouldn't expect any material acquisitions from that in fiscal 2019.

It's been our goal to really focus on integration at this point. We've made a number of acquisitions over the last short period of time and we're really focused on ensuring those smooth integrations going forward and optimizing those acquisitions and really stabilizing at this point.

Yes, Dan if you really look at what Crestmark brought us they brought us combined all the platforms that we were we're really looking for. So the major pieces that now we have in our combined product suite and portfolios. And now it's about really fully leveraging and optimizing the power of the combined platforms.

Good. And where would you guys pick kind of a core EPS number for this quarter?

I would pick it at $0.41.

Okay, great. I’ll step back for right now. Thank you.

Thank you. Our next question comes from Frank Schiraldi with Sandler O'Neill. Your line is open.

Yes, sorry it's just a follow-up here on. Glen, you mentioned you talked about expectations or up opportunities with Crestmark and so the idea that you would be able to ramp up or try to ramp up deposit growth. Can you just talk a little bit about that with seems like prepaid is maturing to a certain degree. So do you have any sort of color, you can give on opportunities to ramp that back up?

Yes, prepaid has been maturing but we still see opportunities for growth in prepaid in particular. We've analyzed the different value of deposits associated with various prepaid programs and are looking at how we can target those. We did shift our focus a little bit towards some of our consumer lending and that asset side of our balance sheet in the past year and I think there's an opportunity to refocus on deposit gathering and expand what we've been doing there. So we are going to go after more deposits in the prepaid categories that we've targeted.

And Frank, I would say, as you know, the payments technologies that we have today, it could be additional deposits besides your traditional prepaid card type deposits. So certainly exploring other opportunities to leverage technology and systems that we have.

And then this was obviously the change in CEO was pretty sudden obviously I'm not sure if you can talk at all about, what went into the thinking to do this effective immediately versus a transition period or maybe just how you can get the Street comfortable that there's no other impending issue here?

This is Tyler. I'll go ahead and take that one. From my perspective, I've been on the road basically over half the time and have meetings most nights when an industry falls. I told our team there is a reason most public company CEOs don’t last 30 years. So we got Crestmark successfully closed, we’ve got the consumer credit kicked-off really well, we got Brad and Glen in particular leading the team that has been here a long time, we’ve added a number of other senior executives, Frank, I'd been transitioning some things for a while now. The company is in a great place, so now just seen like the right time, again I’m staying in the Chair role and as an employee through really the end of January when our Annual Meeting and be there to help with the smooth transition and frankly I told them that the things they need for me they can call me anytime. And so I think we’re well-positioned for future success and that’s part of why it makes sense to do it now.

Thank you. And I’m showing no further questions. I'd like to turn the call back to Mr. Brad Hanson for any closing remarks.

All right, well thank you everybody who participated on Meta's quarterly investment call today and thank you Tyler for your service. We all really enjoyed working with you and appreciate it. We’re excited by the early progress we’re making as we begin our 2019 fiscal year and look forward to updating you all again in our January Investor Call. Thank you again and have a great evening.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program. You may all disconnect. Everyone have a great day.