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| CASH > SEC Filings for CASH > Form 8-K on 8-Oct-2008 | All Recent SEC Filings |
8-Oct-2008
Entry into a Material Definitive Agreement, Material Impairments
On October 2, 2008 the Registrant's subsidiary, MetaBank, reached a settlement with Home Federal Bank on the matter of Home Federal Bank v. MetaBank (Civ. No. 06-2230). This action was the last outstanding lawsuit, dating back to June 2006, relating to a series of loans to the Dan Nelson-related entities SNAG and SDAC by MetaBank and a group of participant banks. Settlements with the participant banks First Premier Bank, North American Banking Company, First Midwest-Deerfield Branches, and Mid-Country Bank on the matter of First Premier Bank, North American Banking Company, First Midwest-Deerfield Branches, and Mid-Country Bank (Civ. No. 06-4114) were reached in July and August 2008. As a result of the Home Federal settlement, on a pro rated basis net of previously established reserves and insurance proceeds already collected, the net effect on the Registrant is a charge of $1.0 million. As a result of all these settlements, the Company expects to record a final charge of approximately $2.1 million ($1.3 million after taxes), including legal expenses and after insurance claims and reserves are accounted for.
After this item and the item described in Item 2.06 below are recorded, MetaBank remains well-capitalized.
As disclosed in the Registrant's 10-Q for the period ending June 30, 2008, the Company had learned that a borrower of the Bank had likely participated in a fraud on the Bank and other banks. On October 8, 2008, the Bank's investigation of the fraud, loans and advances to the borrower, the collateral underlying the loan, and insurance coverage leads it to conclude that it is appropriate to establish a reserve for loan losses at September 30, 2008 of $1.8 million (approximately $1.1 million after taxes). It is anticipated that future cash expenditures related to this matter will be less than $100,000.
After this item and the item described above in Item 1.01 are recorded, MetaBank remains well-capitalized.
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