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CASH > SEC Filings for CASH > Form 8-K on 7-Jun-2013All Recent SEC Filings

Show all filings for META FINANCIAL GROUP INC | Request a Trial to NEW EDGAR Online Pro



Other Events

Item 8.01. Other Events.

Debt Securities Reclassified from Available for Sale to Held to Maturity

Generally accepted accounting principles require that, at acquisition, an enterprise classify debt securities into one of three categories: available for sale (AFS), held to maturity (HTM) or trading. AFS securities are carried at fair value on the consolidated statement of financial condition, and unrealized holding gains and losses are excluded from earnings and recognized as a separate component of equity in accumulated other comprehensive income ("AOCI"). HTM debt securities are measured at amortized cost. Both AFS and HTM are subject to review for other-than-temporary impairment. Meta Financial Group, Inc. (the "Company") has no trading securities.

On May 6, 2013, the Company reclassified approximately $284.3 million from the AFS to the HTM category. Following the transfer, the Company had an HTM portfolio of $284.3 million, representing approximately 22.5% of the Company's total investment securities portfolio and an AFS portfolio of $981.2 million, representing approximately 77.5% of its total investment securities portfolio.

The reclassification was made to better reflect the revised intentions of the Company to maintain these securities in its portfolio; in response to the potential impact on Tangible Book Value should interest rates rise, due to the mark to market on these bonds; and to mitigate possible negative impacts on its regulatory capital under the proposed Basel III capital guidelines, whereby unrealized losses on AFS securities could become a direct deduction from regulatory capital.

As reflected in the table below, the reclassification resulted in the recording of an unrealized gain of $2.1 million which amount has been segregated within AOCI. This amount will be amortized over the remaining life of the related securities as an adjustment of yield in a manner consistent with the amortization of premium on the same transferred debt securities. The reclassification will have no impact on the Company's net income because the accretion of the unrealized holding gain reported in equity will offset the effect on the interest income of the amortization of the premium on these securities.

                                                                   Amortized               Fair
                                                                     Cost                  Value
Debt Securities Reclassified to Held-To-Maturity Investments      May 6, 2013           May 6, 2013

Mortage Backed Securities                                      $   80,255,050.92     $   81,342,223.02
State and Municipal                                               191,940,180.61        192,967,195.54
Agencies                                                           10,000,000.00         10,006,443.30

Total                                                          $  282,195,231.53     $  284,315,861.86

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