Management closely monitors economic developments both regionally and nationwide, and considers these factors when assessing the appropriateness of its allowance for loan losses. While the current economic environment is still slightly strained, it has begun to show signs of improvement in Meta Financial’s markets. Meta Financial’s loss rates over the past three years were very low. Notwithstanding these signs of improvement, Meta Financial does not believe it is likely these low loss conditions will continue indefinitely. All of Meta Financial’s markets indirectly benefit from the current agricultural market. Loss rates in the agricultural real estate and agricultural operating loan portfolios have been minimal in the past three years. Low loss rates are primarily due to higher than average livestock prices and strong crop yields over the last few years, offset by lower grain prices in 2014. Overall, these factors have created positive economic conditions for most farmers in our markets. Management expects that future losses in this portfolio, which have been very low, could be higher than recent historical experience. Management believes that various levels of rain and wet weather conditions within our markets has the potential to negatively impact potential yields which would have a negative economic effect on our agricultural markets.

The allowance for loan losses established by MPS results from an estimation process that evaluates relevant characteristics of its credit portfolio(s). MPS also considers other internal and external environmental factors such as changes in operations or personnel and economic events that may affect the adequacy of the allowance for credit losses. Adjustments to the allowance for loan losses are recorded periodically based on the result of this estimation process. The exact methodology to determine the allowance for loan losses for each program will not be identical. Each program may have differing attributes including such factors as levels of risk, definitions of delinquency and loss, inclusion/exclusion of credit bureau criteria, roll rate migration dynamics, and other factors. Similarly, the additional capital required to offset the increased risk in subprime lending activities may vary by credit program. Each program is evaluated separately.

Management believes that, based on a detailed review of the loan portfolio, historic loan losses, current economic conditions, the size of the loan portfolio, and other factors, the current level of the allowance for loan losses at September 30, 2014, reflects an appropriate allowance against probable losses from the loan portfolio. Although the Company maintains its allowance for loan losses at a level that it considers to be adequate, investors and others are cautioned that there can be no assurance that future losses will not exceed estimated amounts, or that additional provisions for loan losses will not be required in future periods. In addition, the Company's determination of the allowance for loan losses is subject to review by its regulatory agencies, the OCC and the Federal Reserve, which can require the establishment of additional general or specific allowances.

Non‑Interest Income. Non-interest income decreased by $3.8 million, or 6.8%, to $51.7 million for fiscal 2014 from $55.5 million for 2013 due primarily to a decrease in the gain on sale of securities available for sale of $2.5 million. Fees earned on prepaid debit cards, credit products and other payment systems products and services decreased to $48.7 million for fiscal 2014 as compared to $50.8 million for 2013, primarily due to reduced income tax-related prepaid card volume.

Non-Interest Expense. Non-interest expense increased by $3.8 million, or 5.1%, to $78.2 million for fiscal 2014 from $74.4 million for fiscal 2013.

Compensation expense increased $4.0 million during 2014 compared to fiscal 2013. In addition, the Company recorded $0.6 million in acquisition-related expenses and occupancy and equipment expense increased $0.5 million. These increased expenses were offset in part by a $0.6 million decrease in impairment on assets held for sale due to the fiscal 2013 sale of a branch in the Central Iowa market.

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Income Tax Expense. Income tax expense for fiscal 2014 was $2.9 million, resulting in an effective tax rate of 15.6%, compared to a tax expense of $3.7 million and an effective tax rate of 21.6%, in fiscal 2013. The decrease in the Company’s recorded income tax expense for 2014 was impacted primarily by an increase in the volume of tax exempt municipal bonds.

Comparison of Operating Results for the Years Ended

September 30, 2013, and September 30, 2012

General. The Company recorded net income of $13.4 million, or $2.38 per diluted share, for the year ended September 30, 2013, compared to $17.1 million, or $4.92 per diluted share, for the year ended September 30, 2012, a decrease of $3.7 million. The decrease in net income was primarily caused by a $14.0 million decrease in non-interest income which reflected an $11.2 million net decrease in gains on sale of securities available for sale from fiscal 2012 to 2013, offset in part by an increase in net interest income, and decreases in provision for loan loss, non-interest expense, and tax expense.

Net Interest Income. Net interest income for fiscal 2013 increased by $2.3 million, or 6.8%, to $36.0 million from $33.7 million for the prior year. Net interest margin decreased to 2.48% in 2013 as compared to 2.56% in 2012.

The Company’s average earning assets increased $301.3 million, or 22.5%, to $1.6 billion during fiscal 2013 from $1.3 billion during 2012. The increase was primarily the result of the increase in the Company’s investment securities and non-bank qualified municipal portfolios. Overall, asset yields declined by 16 basis points due to lower average rates. The increase in average earning assets was offset by a change in the mix of earning assets favoring investment securities and a decrease in yields on mortgage-backed securities.

The Company’s average total deposits and interest-bearing liabilities increased $267.9 million, or 20.8%, to $1.6 billion during fiscal 2013 from $1.3 billion during fiscal 2012. The increase resulted mainly from an increase in the Company’s non-interest-bearing deposits and federal funds purchased. The average outstanding balance of non-interest bearing deposits increased from $1.0 billion in fiscal 2012 to $1.2 billion in fiscal 2013. The Company’s cost of total deposits and interest-bearing liabilities declined 9 basis points to 0.19% during fiscal 2013 from 0.28% during fiscal 2012 primarily due to continued migration to low and no-cost deposits provided by MPS.

Provision for Loan Losses. In fiscal 2013, the Company did not record a provision for loan loss, compared to $1.0 million for fiscal 2012.

Non‑Interest Income. Non-interest income decreased by $14.1 million, or 20.2%, to $55.5 million for fiscal 2013 from $69.6 million for 2012 due primarily to a decrease in the gain on sale of securities available for sale of $11.2 million related to the sale of the GNMA securities portfolio during fiscal 2012. Fees earned on prepaid debit cards, credit products and other payment systems products and services decreased to $50.8 million for fiscal 2013 as compared to $53.2 million for fiscal 2012, primarily due to the exit from certain MPS credit sponsorship programs and a decrease in card fee income due to a temporary interruption at one MPS business partner.

Non-Interest Expense. Non-interest expense decreased by $1.1 million, or 1.4%, to $74.4 million for fiscal 2013 from $75.5 million for the same period in fiscal 2012.

The reduction in non-interest expense was attributable to a reduction in card processing expense, which declined $1.8 million from $17.4 million in fiscal 2012 to $15.6 million in fiscal 2013 due to lower volumes, a reduction in legal and consulting expenses of $1.2 million from $5.3 million in fiscal 2012 to $4.1 million in fiscal 2013, and a decrease in other expenses of $1.7 million, partially offset by an increase in compensation expense of $3.0 million.

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Impairment on assets held for sale was $0.6 million for fiscal 2013 due to an expected sale of a branch in the Central Iowa market.

Income Tax Expense. Income tax expense for fiscal 2013 was $3.7 million, an effective tax rate of 21.6%, compared to a tax expense of $9.7 million, an effective tax rate of 36.1%, in fiscal 2012. The decrease in the Company’s recorded income tax expense for fiscal 2013 was impacted primarily by an increase in the volume of tax exempt municipal bonds and, to a lesser extent, the purchase of additional bank-owned life insurance.

Critical Accounting Estimates

The Company’s financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The financial information contained within these statements is, to a significant extent, financial information that is based on approximate measures of the financial effects of transactions and events that have already occurred. Based on its consideration of accounting policies that: (i) involve the most complex and subjective decisions and assessments which may be uncertain at the time the estimate was made, and (ii) different estimates that reasonably could have been used in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, would have a material impact on the financial statements, management has identified the policies described below as Critical Accounting Policies.

Allowance for Loan Losses. The Company’s allowance for loan loss methodology incorporates a variety of risk considerations, both quantitative and qualitative, in establishing an allowance for loan loss that management believes is appropriate at each reporting date. Quantitative factors include the Company’s historical loss experience, delinquency and charge-off trends, collateral values, changes in nonperforming loans, and other factors. Quantitative factors also incorporate known information about individual loans, including borrowers’ sensitivity to interest rate movements. Qualitative factors include the general economic environment in the Company’s markets, including economic conditions throughout the Midwest and, in particular, the state of certain industries. Size and complexity of individual credits in relation to loan structure, existing loan policies, and pace of portfolio growth are other qualitative factors that are considered in the methodology. Although management believes the levels of the allowance as of both September 30, 2014, and September 30, 2013, were adequate to absorb probable losses inherent in the loan portfolio, a decline in local economic conditions or other factors could result in increasing losses.

Intangible Assets. Intangible assets include patents filed by the MPS Division. Goodwill and intangible assets are tested annually for impairment or more often if conditions indicate a possible impairment. Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate future cash flows, risk-adjusted discount rates, future economic and market conditions, comparison of the Company’s market value to book value and determination of appropriate market comparables. Actual future results may differ from those estimates.

Each quarter the Company evaluates the estimated useful lives of intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization. In accordance with Accounting Standards Codification (“ASC”) 350, Intangibles – Goodwill and Other, recoverability of these assets is measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.

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Assumptions and estimates about future values and remaining useful lives of the Company’s intangible and other long-lived assets are complex and subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in the Company’s business strategy and internal forecasts. Although the Company believes the historical assumptions and estimates used are reasonable and appropriate, different assumptions and estimates could materially impact the reported financial results. As of September 30, 2014 and 2013, the Company had no goodwill.

Deferred Tax Assets. The Company accounts for income taxes according to the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates applicable to income for the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized subject to management’s judgment that realization is more-likely-than-not. An estimate of probable income tax benefits that will not be realized in future years is required in determining the necessity for a valuation allowance.

Security Impairment. Management continually monitors the investment securities portfolio for impairment on a security by security basis. Management has a process in place to identify securities that could potentially have a credit impairment that is other-than-temporary. This process involves the length of time and extent to which the fair value has been less than the amortized cost basis, review of available information regarding the financial position of the issuer, monitoring the rating of the security, monitoring changes in value, cash flow projections, and the Company’s intent to sell a security or whether it is more likely than not the Company will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity. To the extent we determine that a security is deemed to be other-than-temporarily impaired, an impairment loss is recognized. If the Company intends to sell a security or it is more likely than not that the Company would be required to sell a security before the recovery of its amortized cost, the Company recognizes an other-than-temporary impairment in earnings for the difference between amortized cost and fair value. If we do not expect to recover the amortized cost basis, we do not plan to sell the security and if it is not more likely than not that the Company would be required to sell a security before the recovery of its amortized cost, the recognition of the other-than-temporary impairment is bifurcated. For those securities, the Company separates the total impairment into a credit loss component recognized in earnings, and the amount of the loss related to other factors is recognized in other comprehensive income net of taxes.

The amount of the credit loss component of a debt security impairment is estimated as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset- backed or floating rate security. Cash flow estimates for trust preferred securities are derived from scenario-based outcomes of forecasted default rates, loss severity, prepayment speeds and structural support.

In fiscal 2014, 2013 and 2012, there were no other than temporary impairment losses.

Level 3 Fair Value Measurement. U.S. GAAP requires the Company to measure the fair value of financial instruments under a standard which describes three levels of inputs that may be used to measure fair value. Level 3 measurement includes significant unobservable inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Although management believes that it uses a best estimate of information available to determine fair value, due to the uncertainty of future events, the approach includes a process that may differ significantly from other methodologies and still produce an estimate that is in accordance with U.S. GAAP.

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Interest Rate Risk (“IRR”)

Overview. The Company actively manages interest rate risk, as changes in market interest rates can have a significant impact on reported earnings. The Bank, like other financial institutions, is subject to interest rate risk to the extent that its interest-bearing liabilities mature or reprice more rapidly than its interest-earning assets. The interest rate risk process is designed to compare income simulations in market scenarios designed to alter the direction, magnitude, and speed of interest rate changes, as well as the slope of the yield curve. The Company does not currently engage in trading activities to control interest rate risk although it may do so in the future, if deemed necessary, to help manage interest rate risk.

Earnings at risk and economic value analysis. As a continuing part of its financial strategy, the Bank considers methods of managing an asset/liability mismatch consistent with maintaining acceptable levels of net interest income. In order to properly monitor interest rate risk, the Board of Directors has created an Investment Committee whose principal responsibilities are to assess the Bank’s asset/liability mix and implement strategies that will enhance income while managing the Bank’s vulnerability to changes in interest rates.

The Company uses two approaches to model interest rate risk: Earnings at Risk (“EAR analysis”) and Economic Value of Equity (“EVE analysis”). Under EAR analysis, net interest income is calculated for each interest rate scenario to the net interest income forecast in the base case. EAR analysis measures the sensitivity of interest sensitive earnings over a one year minimum time horizon. The results are affected by projected rates, prepayments, caps and floors. Market implied forward rates and various likely and extreme interest rate scenarios can be used for EAR analysis. These likely and extreme scenarios can include rapid and gradual interest rate ramps, rate shocks and yield curve twists.

The EAR analysis used in the following table reflects the required analysis used no less than quarterly by management. It models -100, +100, +200, +300 basis point parallel shifts in market interest rates over the next one-year period. Due to the current low level of interest rates, only a -100 basis point parallel shift is represented.

The Company is within Board policy for the -100 scenario. The Company is outside of Board policy limits for the +100, +200, and +300 scenarios as noted in the discussion below. The table below shows the results of the scenario as of September 30, 2014:

Table Net Sensitive Earnings at Risk

Net Sensitive Earnings at Risk
	Standard (Parallel Shift) Year 1
	Net Interest Income at Risk %
		-100		+100		+200		+300
Basis Point Change Scenario		-1.4	%	-6.7	%	-13.8	%	-21.1	%
Board Policy Limits		-5.0	%	-5.0	%	-10.0	%	-15.0	%

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The EAR analysis reported at September 30, 2014, shows that more liabilities, (primarily the overnight federal funds purchased) than assets will reprice over the modeled one-year period.

IRR is a snapshot in time. The Company’s IRR results vary depending on which day of the week and timing in relation to certain payrolls when this snapshot is taken. The Company’s overnight federal funds purchased fluctuates on a daily and weekly basis due to fluctuations in a portion of its non-interest bearing deposit base, primarily related to payroll processing and, to a lesser extent, to intraday funds flow settlement timing with the Federal Reserve Bank. IRR was negatively affected because fiscal year 2014 ended on a Tuesday, which, resulting from payroll processing timing in concert with typical early week activity, tend to necessitate a higher than average amount of overnight federal funds purchased which are typically paid down throughout the week. For perspective, the amount of overnight federal funds purchased on Tuesday, September 30, 2014 was over $135 million higher than the average amount of federal funds purchased throughout the last calendar week of September 2014 and more than $200 million higher than September 2014’s average overnight borrowings. Owing to the snapshot nature of IRR, as is required by regulators, in concert with the Company’s predictable, weekly and monthly fluctuating deposit base, the results produced by static IRR analysis are not necessarily representative of what management, the Board of Directors, and others would view as the Company’s true IRR positioning. Lastly, management began dollar cost averaging its investment securities purchases in September of 2014, related to upcoming seasonal increases in deposits, somewhat earlier than it historically has done to take advantage of what management deemed attractive opportunities in the market. Management and the Board are aware and understand these typical borrowing and deposit fluctuations, disciplined investment purchases, as well as the point in time nature of IRR analysis and anticipated an outcome where the Company may temporarily be outside of Board policy limits based on a snapshot analysis on September 30, 2014. The Company anticipates improved 2015 IRR results based on its historical, typical non-interest bearing deposit growth from December through March, the addition of recently added MPS relationships, and execution of its strategic plans.

The following table shows the income sensitivity of selected assets and liabilities to changes in market interest rates (dollars in thousands).

	Total Earning Assets		% of Total Earning Assets			Change in Interest Income/Expense for a given change in interest rates

						Over / (Under) Base Case Parallel Ramnp
Basis Point Change Scenario							-100	Base		+100	+200	+300
Total Loans		492,856		25	%		21,409		22,196	23,132	24,042	24,942
Total Investments (non-TEY) and other Earning Assets		1,470,883		75	%		31,804		32,626	33,937	35,126	36,296
Total Interest-Sensitive Income		1,963,739		100	%		53,213		54,822	57,069	59,168	61,238
Total Interest-Bearing Deposits		239,826		33	%		581		845	1,957	3,124	4,347
Total Borrowings		487,411		67	%		1,634		2,233	6,838	11,443	16,048
Total Interest-Sensitive Expense		727,237		100	%		2,215		3,078	8,795	14,567	20,395

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The Company believes that its growing portfolio of non-interest bearing deposits provides a stable and profitable funding vehicle and a significant competitive advantage in a rising interest rate environment as the Company’s cost of funds will likely remain relatively low, with less increase expected relative to other banks. The Company continues to execute its investment strategy of primarily purchasing NBQ municipal bonds and agency MBS, however, the Bank reviews opportunities to add diverse, high quality securities at attractive relative rates when opportunities present themselves. The NBQ municipal bonds are tax exempt and as such have a tax equivalent yield higher than their book yield. The tax equivalent yield calculation for NBQ municipal bonds uses the Company’s cost of funds as one of its components. With the Company’s large volume of non-interest bearing deposits, the tax equivalent yield for these NBQ municipal bonds is higher than a similar term investment in other investment categories of similar risk and higher than most other banks can realize on the same instruments.

Under EVE analysis, the economic value of financial assets, liabilities and off-balance sheet instruments, is derived under each rate scenario. The economic value of equity is calculated as the difference between the estimated market value of assets and liabilities, net of the impact of off-balance sheet instruments.

The EVE analysis used in the following table reflects the required analysis used no less than quarterly by management. It models immediate -100, +100, +200 and +300 basis point parallel shifts in market interest rates. Due to the current low level of interest rates, only a -100 basis point parallel shift is represented.

The Company is within Board policy limits for all basis point scenarios. The table below shows the results of the scenario as of September 30, 2014:

	Standard (Parallel Shift)
	Economic Value of Equity at Risk %
		-100		+100		+200		+300
Basis Point Change Scenario		-4.4	%	-2.4	%	-7.9	%	-14.3	%
Board Policy Limits		-10.0	%	-10.0	%	-20.0	%	-30.0	%

The EVE at risk reported at September 30, 2014, shows that as interest rates increase immediately, the economic value of equity position will decrease, partially due to the asset size being greater than the amount of liabilities.

The following table details the economic value sensitivity to changes in market interest rates at September 30, 2014, for loans, investments, deposits, borrowings, and other assets and liabilities (dollars in thousands). The analysis reflects that in a +100 scenario, total assets are less sensitive than total liabilities and in a +200 scenario, total assets and total liabilities have similar sensitivities. Lastly, in a +300 scenario, total assets are more sensitive than total liabilities. Investments and other earning assets contribute to sensitivity, largely due to fixed rate securities investments. This sensitivity is offset by the non-interest bearing deposits. Day of the week timing, as discussed previously, also contributes to sensitivity.

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Table Economic Value Sensitivity

	Book Value		% of Total Assets			Change in Economic Value for a given change in interest rates

						Over / (Under) Base Case Parallel Ramnp
Basis Point Change Scenario							-100		+100		+200		+300
Total Loans		492,856		24	%		2.0	%	-2.9	%	-6.0	%	-8.9	%
Total Investments (non-TEY) and other Earning Assets		1,444,085		70	%		3.9	%	-4.5	%	-9.1	%	-13.4	%
Other Assets		113,664		6	%		0.0	%	0.0	%	0.0	%	0.0	%
Assets		2,050,605		100	%		3.2	%	-3.9	%	-7.8	%	-11.6	%
Interest-Bearing Deposits		239,826		13	%		1.7	%	-1.4	%	-2.7	%	-3.7	%
Non-Interest Bearing Deposits		1,133,121		60	%		7.4	%	-6.7	%	-12.8	%	-18.3	%
Total Borrowings and Other Liabilities		1,875,037		27	%		0.1	%	-0.1	%	-0.2	%	-0.3	%
Liabilities		1,875,037		100	%		4.5	%	-4.1	%	-7.8	%	-11.1	%

Certain shortcomings are inherent in the method of analysis presented in the table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable rate mortgage loans, have features that restrict changes in interest rates on a short-term basis and over the life of the asset. Furthermore, although management has estimated changes in the levels of prepayments and early withdrawal in these rate environments, such levels would likely deviate from those assumed in calculating the table. Finally, the ability of some borrowers to service their debt may decrease in the event of an interest rate increase.

Asset Quality

It is management’s belief, based on information available at the end of fiscal 2014, the Company’s current asset quality is satisfactory. At September 30, 2014, non-performing assets, consisting of impaired/non-accruing loans, accruing loans delinquent 90 days or more, foreclosed real estate, and repossessed consumer property, totaled $1.0 million, or 0.05% of total assets, compared to $0.8 million, or 0.05% of total assets, at September 30, 2013.

Non-accruing loans at September 30, 2014, totaled $0.9 million. There were $15,000 in foreclosed real estate and repossessed assets at September 30, 2014.

The Company maintains an allowance for loan losses because it is probable that some loans may not be repaid in full. At September 30, 2014, the Company had an allowance for loan losses of $5.4 million as compared to $3.9 million at September 30, 2013. Management’s periodic review of the allowance for loan losses is based on various subjective and objective factors including the Company’s past loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, and current economic conditions. While management may allocate portions of the allowance for specifically identified problem loan situations, the majority of the allowance is based on judgmental factors related to the overall loan portfolio and is available for any loan charge-offs that may occur. As stated previously, there can be no assurance future losses will not exceed estimated amounts, or that additional provisions for loan losses will not be required in future periods. In addition, the Bank is subject to review by the OCC, which has the authority to require management to make changes to the allowance for loan losses, and the Company is subject to similar review by the Federal Reserve.

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In determining the allowance for loan losses, the Company specifically identifies loans it considers to have potential collectibility problems. Based on criteria established by ASC 310, Receivables, some of these loans are considered to be “impaired” while others are not considered to be impaired, but possess weaknesses that the Company believes merit additional analysis in establishing the allowance for loan losses. All other loans are evaluated by applying estimated loss ratios to various pools of loans. The Company then analyzes other factors (such as economic conditions) in determining the aggregate amount of the allowance needed.

At September 30, 2014, $0.7 million of the allowance for loan losses was allocated to impaired loans, representing 11.1% of the related loan balances. See Note 4 of the “Notes to Consolidated Financial Statements,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. $0.4 million of the allowance was allocated to other identified problem loan situations, representing 2.7% of the related loan balances, and $4.3 million, representing 0.9% of the related loan balances, was allocated to the remaining overall loan portfolio based on historical loss experience and general economic conditions. At September 30, 2013, $0.4 million of the allowance for loan losses was allocated to impaired loans, representing 5.9% of the related loan balances. $0.6 million was allocated to other identified problem loan situations, and $2.9 million was allocated against losses from the overall loan portfolio based on historical loss experience and general economic conditions.

The Company maintains a loan review and classification process which involves multiple officers of the Company and is designed to assess the general quality of credit underwriting and to promote early identification of potential problem loans. All loan officers are charged with the responsibility of risk rating all loans in their portfolios and updating the ratings, positively or negatively, on an ongoing basis as conditions warrant. A quarterly loan officer validation worksheet documents this process.

The level of potential problem loans is another predominant factor in determining the relative level of risk in the loan portfolio and in determining the appropriate level of the allowance for loan losses. Potential problem loans are generally defined by management to include loans rated as substandard by management but that are not considered impaired (i.e., nonaccrual loans and accruing troubled debt restructurings); however, there are circumstances present to create doubt as to the ability of the borrower to comply with present repayment terms. The decision of management to include performing loans in potential problem loans does not necessarily mean that the Company expects losses to occur, but that management recognizes a higher degree or risk associated with these loans. The loans that have been reported as potential problem loans are predominantly commercial loans covering a diverse range of businesses and real estate property types. At September 30, 2014, potential problem loans totaled $11.0 million, compared to $5.2 million at September 30, 2013. The $5.8 million increase in potential problem loans since September 30, 2013, was primarily due to a $9.2 million and $1.8 million increase in the agricultural operating and agricultural real estate categories, respectively, which was offset by a decrease in the commercial and multi-family real estate category.

Liquidity and Capital Resources

The Company’s primary sources of funds are deposits, borrowings, principal and interest payments on loans and mortgage-backed securities, and maturing investment securities. While scheduled loan repayments and maturing investments are relatively predictable, deposit flows and early loan repayments are influenced by the level of interest rates, general economic conditions, and competition.

The Company relies on advertising, quality customer service, convenient locations, and competitive pricing to attract and retain its deposits and only solicits these deposits from its primary market area. Based on its experience, the Company believes that its consumer checking, savings, and money market accounts are relatively stable sources of deposits. The Company’s ability to attract and retain time deposits has been, and will continue to be, affected by market conditions. However, the Company does not foresee any significant retail funding issues resulting from the sensitivity of time deposits to such market factors.

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The Company is aware that the low- and no-cost checking deposits generated through MPS may carry a greater degree of concentration risk than traditional consumer checking deposits. To date, the Company has not experienced any significant net outflows related to MPS, though no assurance can be given that this will continue to be the case.

The Bank is required by regulation to maintain sufficient liquidity to assure its safe and sound operation. In the opinion of management, the Bank is in compliance with this requirement.

Liquidity management is both a daily and long-term function of the Company’s management strategy. The Company adjusts its investments in liquid assets based upon management’s assessment of (i) expected loan demand, (ii) the projected availability of purchased loan products, (iii) expected deposit flows, (iv) yields available on interest-bearing deposits, and (v) the objectives of its asset/liability management program. Excess liquidity is generally invested in interest-earning overnight deposits and other short-term government agency or instrumentality obligations. If the Company requires funds beyond its ability to generate them internally, it has additional borrowing capacity with the FHLB and other wholesale funding sources. The Company is not aware of any significant trends in the Company’s liquidity or its ability to borrow additional funds if needed.

The Company filed a shelf registration statement on Form S-3 (the “Shelf Registration”) with the Securities and Exchange Commission which became effective in June 2013 and continues to be effective as of the date of this Annual Report. Pursuant to the Shelf Registration, the Company may issue and sell debt securities, common stock, preferred stock, depositary shares, warrants and units, or any combination of such securities, from time to time in one or more offerings, up to an aggregate amount of $40 million. From June through August 2013, the Company offered and sold shares of common stock registered under the Shelf Registration in an “at the market offering” in which the Company raised proceeds of approximately $13.9 million. The Company expects to use the Shelf Registration to issue additional equity or debt capital from time to time in the future. As of the date hereof, the Company has approximately $26.1 million remaining available under the Shelf Registration. In addition to the availability of the shelf registration, the Board of Directors may determine from time to time to issue additional equity or debt securities to support our business and enhance our capital levels.

The primary investing activities of the Company are the origination and purchase of loans and the purchase of securities. During the years ended September 30, 2014, 2013 and 2012, the Company originated loans totaling $472.4 million, $301.0 million, and $1.0 billion, respectively. In fiscal 2012, most of these loans were sold without recourse after origination. Purchases of loans totaled $0.3 million, $4.7 million and, $7.7 million during the years ended September 30, 2014, 2013 and 2012, respectively. During the years ended September 30, 2014, 2013 and 2012, the Company purchased mortgage-backed securities and other securities in the amount of $506.5 million, $514.8 million and $1.4 billion, respectively. Of these purchases in 2014 and 2013, $15.1 million were securities designated as held to maturity.

At September 30, 2014, the Company had unfunded loan commitments of $96.0 million. See Note 15 to the “Notes to Consolidated Financial Statements,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Certificates of deposit scheduled to mature in one year or less from September 30, 2014, totaled $106.1 million. Based on its historical experience, management believes that a significant portion of such deposits will remain with the Company; however, there can be no assurance that the Company can retain all such deposits. Management believes that loan repayment and other sources of funds will be adequate to meet the Company’s foreseeable short- and long-term liquidity needs.

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The following table summarizes the Company’s significant contractual obligations at September 30, 2014 (dollars in thousands):

Contractual Obligations	Total		Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years

Time deposits	$	134,553	$	106,078	$	23,571	$	4,904	$	-
Long-term debt		7,000		-		-		5,000		2,000
Short-term debt		480,411		480,411		-		-		-
Operating leases		18,818		1,218		2,444		2,021		13,135
Subordinate debentures
Issued to capital trust		10,310		-		-		-		10,310
Data processing services		29,116		2,754		5,692		5,384		15,286
Total	$	680,208	$	590,461	$	31,707	$	17,309	$	40,731

During July 2001, the Company’s unconsolidated trust subsidiary, First Midwest Financial Capital Trust I, sold $10.3 million in floating rate cumulative preferred securities. Proceeds from the sale were used to purchase subordinated debentures of the Company, which mature in 2031, and are redeemable at any time after five years. The capital securities are required to be redeemed on July 25, 2031; however, the Company has the option to redeem them earlier. The Company used the proceeds for general corporate purposes. See Note 10 to the “Notes to Consolidated Financial Statements,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

The Company and the Bank met regulatory requirements for classification as well-capitalized institutions at September 30, 2014. See Note 14 to the “Notes to Consolidated Financial Statements,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

The payment of dividends and repurchase of shares has the effect of reducing stockholders’ equity. Prior to authorizing such transactions, the Board of Directors considers the effect the dividend or repurchase of shares would have on liquidity and regulatory capital ratios. Further, pursuant to the terms of the Consent Order, the Company must seek the approval of the Federal Reserve prior to declaring dividends or capital distributions, or redeeming or purchasing Company equity stock.

The Board of Directors approved a goal, reflected in its capital plan, for the Bank to stay at or above an 8% Tier 1 capital to adjusted total assets ratio during fiscal 2015. While management expects the Bank to meet this goal, if it fails to do so materially it could be subject to additional regulatory restrictions or requirements.

The Board of Directors is also mindful of new capital rules that will increase bank and holding company capital requirements and liquidity requirements. No assurance can be given that our regulators will consider our liquidity level, or our capital level, though substantially in excess of current rules pursuant to which we are considered “well-capitalized, to be sufficiently high in the future.

Off-Balance Sheet Financing Arrangements

For discussion of the Company’s off-balance sheet financing arrangements, see Note 15 of “Notes to Consolidated Financial Statements,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Depending on the extent to which the commitments or contingencies described in Note 15 occur, the effect on the Company’s capital and net income could be significant.

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Impact of Inflation and Changing Prices

The Consolidated Financial Statements and Notes thereto presented in this Annual Report have been prepared in accordance with U.S. GAAP, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time due to inflation. The primary impact of inflation is reflected in the increased cost of the Company’s operations. Unlike most industrial companies, virtually all the assets and liabilities of the Company are monetary in nature. As a result, interest rates generally have a more significant impact on a financial institution’s performance than do the effects of general levels of inflation. Interest rates do not necessarily move in the same direction, or to the same extent, as the prices of goods and services.

Impact of New Accounting Standards

See Note 1 to the Consolidated Financial Statements for information regarding recently issued accounting pronouncements.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

As stated above, the Company derives a portion of its income from the excess of interest collected over interest paid. The rates of interest the Company earns on assets and pays on liabilities generally are established contractually for a period of time. Market interest rates change over time. Accordingly, the Company’s results of operations, like those of most financial institutions, are impacted by changes in interest rates and the interest rate sensitivity of its assets and liabilities. The risk associated with changes in interest rates and the Company’s ability to adapt to these changes is known as interest rate risk and is the Company’s only significant “market” risk.

The Company monitors and measures its exposure to changes in interest rates in order to comply with applicable government regulations and risk policies established by the Board of Directors, and in order to preserve stockholder value. In monitoring interest rate risk, the Company analyzes assets and liabilities based on characteristics including size, coupon rate, repricing frequency, maturity date, and likelihood of prepayment.

If the Company’s assets mature or reprice more rapidly or to a greater extent than its liabilities, then economic value of equity and net interest income would tend to increase during periods of rising rates and decrease during periods of falling interest rates. Conversely, if the Company’s assets mature or reprice more slowly or to a lesser extent than its liabilities, then economic value of equity and net interest income would tend to decrease during periods of rising interest rates and increase during periods of falling interest rates.

The Company currently focuses lending efforts toward originating and purchasing competitively priced adjustable-rate and fixed-rate loan products with short to intermediate terms to maturity, generally five years or less. This theoretically allows the Company to maintain a portfolio of loans that will have relatively little sensitivity to changes in the level of interest rates, while providing a reasonable spread to the cost of liabilities used to fund the loans.

The Company’s primary objective for its investment portfolio is to provide a source of liquidity for the Company. In addition, the investment portfolio may be used in the management of the Company’s interest rate risk profile. The investment policy generally calls for funds to be invested among various categories of security types and maturities based upon the Company’s need for liquidity, desire to achieve a proper balance between minimizing risk while maximizing yield, the need to provide collateral for borrowings, and to fulfill the Company’s asset/liability management goals.

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The Company’s cost of funds responds to changes in interest rates due to the relatively short-term nature of its deposit portfolio, and due to the relatively short-term nature of its borrowed funds. The Company believes that its growing portfolio of low- or no-cost deposits provides a stable and profitable funding vehicle, but also subjects the Company to greater risk in a falling interest rate environment than it would otherwise have without this portfolio. This risk is due to the fact that, while asset yields may decrease in a falling interest rate environment, the Company cannot significantly reduce interest costs associated with these deposits, which thereby compresses the Company’s net interest margin. As a result of the Company’s interest rate risk exposure in this regard, the Company has elected not to enter in to any new longer term wholesale borrowings, and generally has not emphasized longer term time deposit products.

The Board of Directors and relevant government regulations establish limits on the level of acceptable interest rate risk at the Company, to which management adheres. There can be no assurance, however, that, in the event of an adverse change in interest rates, the Company’s efforts to limit interest rate risk will be successful.

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Item 8.

Financial Statements and Supplementary Data

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Report of Independent Registered Public Accounting Firm

Consolidated Financial Statements

Statements of Financial Condition

Statements of Operations

Statements of Comprehensive Income (Loss)

Statements of Changes in Stockholders’ Equity

Statements of Cash Flows

Notes to Consolidated Financial Statements

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KPMG LLP

2500 Ruan Center

666 Grand Avenue

Des Moines, IA 50309

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Meta Financial Group, Inc.:

We have audited the accompanying consolidated statements of financial condition of Meta Financial Group, Inc. and subsidiaries (the Company) as of September 30, 2014 and 2013, and the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years in the three‑year period ended September 30, 2014. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Meta Financial Group, Inc. and subsidiaries as of September 30, 2014 and 2013, and the results of their operations and their cash flows for each of the years in the three‑year period ended September 30, 2014, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Meta Financial Group, Inc.’s internal control over financial reporting as of September 30, 2014, based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated December 12, 2014 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

	/s/ KPMG LLP

Des Moines, Iowa
December 12, 2014

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META FINANCIAL GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in Thousands, Except Share and Per Share Data)

ASSETS	September 30, 2014			September 30, 2013

Cash and cash equivalents	$	29,832		$	40,063
Investment securities available for sale		482,346			299,821
Mortgage-backed securities available for sale		657,870			581,372
Investment securities held to maturity		212,899			211,099
Mortgage-backed securities held to maturity		70,034			76,927
Loans receivable - net of allowance for loan losses of $5,397 at September 30, 2014 and $3,930 at September 30, 2013		493,007			380,428
Federal Home Loan Bank stock, at cost		21,245			9,994
Accrued interest receivable		11,222			8,582
Insurance receivable		269			400
Premises, furniture, and equipment, net		16,462			17,664
Bank-owned life insurance		35,469			33,830
Foreclosed real estate and repossessed assets		15			116
Intangible assets		2,588			2,339
MPS accounts receivable		3,935			3,707
Assets held for sale		-			1,120
Other assets		16,838			24,527

Total assets	$	2,054,031		$	1,691,989

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES
Non-interest-bearing checking	$	1,126,715		$	1,086,258
Interest-bearing checking		37,188			31,181
Savings deposits		27,610			26,229
Money market deposits		40,475			40,016
Time certificates of deposit		134,553			131,599
Total deposits		1,366,541			1,315,283
Advances from Federal Home Loan Bank		7,000			7,000
Federal funds purchased		470,000			190,000
Securities sold under agreements to repurchase		10,411			9,146
Subordinated debentures		10,310			10,310
Accrued interest payable		318			291
Contingent liability		331			331
Accrued expenses and other liabilities		14,318			16,644
Total liabilities		1,879,229			1,549,005

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY
Preferred stock, 3,000,000 shares authorized, no shares issued or outstanding at September 30, 2014 and 2013, respectively		-			-
Common stock, $.01 par value; 10,000,000 shares authorized, 6,213,979 and 6,132,744 shares issued, 6,169,604 and 6,070,654 shares outstanding at September 30, 2014 and 2013, respectively		62			61
Additional paid-in capital		95,079			92,963
Retained earnings		83,797			71,268
Accumulated other comprehensive income (loss)		(3,409	)		(20,285	)
Treasury stock, 44,375 and 62,090 common shares, at cost, at September 30, 2014and 2013, respectively		(727	)		(1,023	)
Total stockholders’ equity		174,802			142,984

Total liabilities and stockholders’ equity	$	2,054,031		$	1,691,989

See Notes to Consolidated Financial Statements.

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META FINANCIAL GROUP, INC

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Share and Per Share Data)

	For the Years Ended September 30,
	2014			2013			2012

Interest and dividend income:
Loans receivable, including fees	$	19,674		$	16,151		$	18,058
Mortgage-backed securities		15,343			11,900			16,133
Other investments		13,643			10,925			3,106
		48,660			38,976			37,297
Interest expense:
Deposits		965			1,280			2,205
FHLB advances and other borrowings		1,433			1,674			1,358
		2,398			2,954			3,563
Net interest income		46,262			36,022			33,734
Provision for loan losses		1,150			-			1,049
Net interest income after provision for loan losses		45,112			36,022			32,685
Non-interest income:
Card fees		48,738			50,790			53,220
Bank-owned life insurance income		1,139			998			511
Loan fees		981			868			1,190
Deposit fees		616			632			616
Gain (loss) on sale of securities available for sale, net(Includes $107, $2,546, and $13,755 reclassified from accumulated other comprehensive income (loss) for net gains on available for sale securities for the fiscal year ended September 30, 2014, 2013and 2012, respectively)		107			2,546			13,755
Gain (loss) on foreclosed real estate		(93	)		(268	)		(38	)
Other income (loss)		250			(63	)		320
Total non-interest income		51,738			55,503			69,574

Non-interest expense:
Compensation and benefits		38,155			34,106			31,104
Card processing expense		15,487			15,584			17,373
Occupancy and equipment expense		8,979			8,479			8,489
Legal and consulting expense		4,145			4,048			5,255
Data processing expense		1,316			1,228			1,141
Marketing		1,034			981			1,047
Impairment on assets held for sale		-			589			-
Other expense		9,115			9,388			11,054
Total non-interest expense		78,231			74,403			75,463

Income before income tax expense		18,619			17,122			26,796
Income tax expense (Includes $39, $924 and $5,261 income tax expense reclassified from accumulated other comprehensive income (loss) for the fiscal year ended September 30, 2014, 2013 and 2012, respectively)		2,906			3,704			9,682

Net income	$	15,713		$	13,418		$	17,114

Earnings per common share:
Basic	$	2.57		$	2.40		$	4.94
Diluted	$	2.53		$	2.38		$	4.92

See Notes to Consolidated Financial Statements.

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META FINANCIAL GROUP, INC.

AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

(Dollars in Thousands)

	For the Years Ended September 30,
	2014			2013			2012

Net income	$	15,713		$	13,418		$	17,114

Other comprehensive income:
Change in net unrealized gain (loss) on securities		26,790			(44,301	)		17,280
Losses (gains) realized in net income		(107	)		(2,546	)		(13,755	)
		26,683			(46,847	)		3,525
Deferred income tax effect		9,807			(18,049	)		1,348
Total other comprehensive income (loss)		16,876			(28,798	)		2,177
Total comprehensive income (loss)	$	32,589		$	(15,380	)	$	19,291

See Notes to Consolidated Financial Statements.

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META FINANCIAL GROUP, INC.

AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity

For the Years Ended September 30, 2012, 2013 and 2014

(Dollars in Thousands, Except Share and Per Share Data)

	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive (Loss), Net of Tax			Treasury Stock			Total Stockholders’ Equity






Balance, September 30, 2011	$	34	$	32,471		$	45,494		$	6,336		$	(3,758	)	$	80,577

Cash dividends declared on common stock ($.52 per share)		-		-			(1,832	)		-			-			(1,832	)

Issuance of common shares from the sales of equity securities		22		45,999			-			-			-			46,021

Issuance of 19,669 common shares from treasury stock due to exercise of stock options		-		272			-			-			1,503			1,775

Stock compensation		-		27			-			-			-			27

Change in net unrealized gains on securities available for sale, net		-		-			-			2,177			-			2,177

Net income		-		-			17,114			-			-			17,114

Balance, September 30, 2012	$	56	$	78,769		$	60,776		$	8,513		$	(2,255	)	$	145,859

Balance, September 30, 2012	$	56	$	78,769		$	60,776		$	8,513		$	(2,255	)	$	145,859

Cash dividends declared on common stock ($0.52 per share)		-		-			(2,926	)		-			-			(2,926	)

Issuance of common shares from the sales of equity securities		5		12,713			-			-			-			12,718

Issuance of common shares from treasury stock due to exercise of stock options		-		1,316			-			-			1,232			2,548

Stock compensation		-		165			-			-			-			165

Net change in unrealized losses on securities, net of income taxes		-		-			-			(28,798	)		-			(28,798	)

Net income		-		-			13,418			-			-			13,418

Balance, September 30, 2013	$	61	$	92,963		$	71,268		$	(20,285	)	$	(1,023	)	$	142,984


Balance, September 30, 2013	$	61	$	92,963		$	71,268		$	(20,285	)	$	(1,023	)	$	142,984

Cash dividends declared on common stock ($0.52 per share)		-		-			(3,184	)		-			-			(3,184	)

Issuance of common shares from the sales of equity securities		1		(52	)		-			-			-			(51	)

Issuance of common shares due to exercise of stock options and restricted stock units		-		2,080			-			-			296			2,376

Stock compensation		-		88			-			-			-			88

Net change in unrealized losses on securities, net of income taxes		-		-			-			16,876			-			16,876

Net income		-		-			15,713			-			-			15,713

Balance, September 30, 2014	$	62	$	95,079		$	83,797		$	(3,409	)	$	(727	)	$	174,802

See Notes to Consolidated Financial Statements.

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META FINANCIAL GROUP, INC.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Dollars in Thousands)

	For the Years Ended September 30,
	2014			2013			2012

Cash flows from operating activities:
Net income	$	15,713		$	13,418		$	17,114
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion, net		18,147			21,104			20,349
Disbursement of non-real estate consumer loans originated for sale		-			-			(621,285	)
Proceeds from sale of non-real estate consumer loans		-			-			623,469
Proceeds from sale of 1-4 family residential mortgage loans		-			-			368
Loss (gain) on sale of loans		-			-			7
Provision (recovery) for loan losses		1,150			-			1,049
Provision (recovery) for deferred taxes		(1,755	)		(395	)		988
Gain on sale of investments available for sale, net		(107	)		(2,546	)		(13,755	)
(Gain) loss on other assets		50			577			(1,018	)
Net change in accrued interest receivable		(2,640	)		(1,872	)		(2,577	)
Impairment on assets held for sale		-			589			-
Net change in other assets		(2,446	)		(10,874	)		4,653
Net change in accrued interest payable		27			114			(46	)
Net change in accrued expenses and other liabilities		(2,326	)		(43,183	)		50,674
Net cash provided by (used in) operating activities		25,813			(23,068	)		79,990

Cash flows from investing activities:
Purchase of securities available for sale		(491,416	)		(505,863	)		(1,393,844	)
Proceeds from sales of securities available for sale		166,804			209,172			678,833
Proceeds from maturities and principal repayments of securities available for sale		81,754			187,245			217,986
Purchase of securities held to maturity		(15,117	)		(8,946	)		-
Proceeds from maturities and principal repayments of securities held to maturity		16,802			3,837			-
Purchase of bank-owned life insurance		(500	)		(18,000	)		-
Loans purchased		(343	)		(4,699	)		(7,697	)
Loans sold		(11,747	)		(19,922	)		(16,740	)
Net change in loans receivable		(101,639	)		(28,826	)		5,011
Proceeds from sales of foreclosed real estate		8			478			4,941
Federal Home Loan Bank stock purchases		(445,971	)		(414,833	)		(122,189	)
Federal Home Loan Bank stock redemptions		434,720			406,959			124,806
Proceeds from the sale of premises and equipment		1,178			-			25
Purchase of premises and equipment		(2,329	)		(5,262	)		(4,127	)
Other, net		-			-			(1,347	)
Net cash provided by (used in) investing activities		(367,796	)		(198,660	)		(514,342	)

Cash flows from financing activities:
Net change in checking, savings, and money market deposits		48,304			(96,954	)		253,973
Net change in time deposits		2,954			32,443			(15,799	)
Repayment of FHLB and other borrowings		-			(4,000	)		-
Proceeds from federal funds purchased		280,000			190,000			-
Net change in securities sold under agreements to repurchase		1,265			(17,254	)		18,345
Cash dividends paid		(3,184	)		(2,926	)		(1,832	)
Stock compensation		88			165			27
Proceeds from issuance of common stock		2,325			15,266			47,796
Other, net		-			-			-
Net cash provided by (used in) financing activities		331,752			116,740			302,510

Net change in cash and cash equivalents		(10,231	)		(104,988	)		(131,842	)

Cash and cash equivalents at beginning of year		40,063			145,051			276,893
Cash and cash equivalents at end of year	$	29,832		$	40,063		$	145,051

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META FINANCIAL GROUP, INC.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Con't.)

(Dollars in Thousands)

	For the Years Ended September 30,
	2014		2013		2012


Supplemental disclosure of cash flow information
Cash paid during the year for:
Interest	$	2,371	$	2,840	$	3,609
Income taxes		4,451		3,761		8,424
Franchise taxes		109		70		54

Supplemental disclosure of non-cash investing and financing activities:
Net loans transferred to foreclosed real estate	$	-	$	165	$	3,247
Assets transferred to held for sale	$	-	$	1,709	$	-
Securities transferred from available for sale to held to maturity	$	-	$	282,195	$	-

See Notes to Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Meta Financial Group, Inc. (the “Company”), a unitary savings and loan holding company located in Sioux Falls, South Dakota, and its wholly-owned subsidiaries which include MetaBank (the “Bank”), a federally chartered savings bank whose primary federal regulator is the Office of the Comptroller of the Currency and First Services Financial Limited, which offered noninsured investment products and was dissolved on December 3, 2013. The Company also owns 100% of First Midwest Financial Capital Trust I (the “Trust”), which was formed in July 2001 for the purpose of issuing trust preferred securities. The Trust is not included in the consolidated financial statements of the Company. All significant intercompany balances and transactions have been eliminated.

NATURE OF BUSINESS AND INDUSTRY SEGMENT INFORMATION

The primary source of income relates to payment processing services for prepaid debit cards, ATM sponsorship, and other money transfer systems and services. Additionally, a significant source of income for the Company is interest from the purchase or origination of consumer, commercial, agricultural, commercial real estate, and residential real estate loans. The Company accepts deposits from customers in the normal course of business primarily in northwest and central Iowa and eastern South Dakota and on a national basis for the MPS division. The Company operates in the banking industry, which accounts for the majority of its revenues and assets. The Company uses the “management approach” for reporting information about segments in annual and interim financial statements. The management approach is based on the way the chief operating decision-maker organizes segments within a company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure and any other manner in which management disaggregates a company. Based on the management approach model, the Company has determined that its business is comprised of two reporting segments.

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain significant estimates include the allowance for loan losses, the valuation of intangible assets and the fair values of securities and other financial instruments. These estimates are reviewed by management regularly; however, they are particularly susceptible to significant changes in the future.

CASH AND CASH EQUIVALENTS AND FEDERAL FUNDS SOLD

For purposes of reporting cash flows, cash and cash equivalents is defined to include the Company’s cash on hand and due from financial institutions and short-term interest-bearing deposits in other financial institutions. The Company reports cash flows net for customer loan transactions, securities purchased under agreement to resell, federal funds purchased, deposit transactions, securities sold under agreements to repurchase, and FHLB advances with terms less than 90 days. The Bank is required to maintain reserve balances in cash or on deposit with the FRB, based on a percentage of deposits. The total of those reserve balances was $8.3 million and $4.1 million at September 30, 2014 and 2013, respectively. The Company at times maintains balances in excess of insured limits at various financial institutions including the FHLB, the FRB, and other private institutions. At September 30, 2014, the Company had no interest bearing deposits held at the FHLB and $9.1 million in interest bearing deposits held at the FRB. At September 30, 2014, the Company had no federal funds sold. The Company does not believe these instruments carry a significant risk of loss, but cannot provide assurances that no losses could occur if these institutions were to become insolvent.

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SECURITIES

GAAP 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 statements 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 has no trading securities.

The Company classifies the majority of its securities as AFS. AFS securities are those the Company may decide to sell if needed for liquidity, asset-liability management or other reasons. During the 2013 fiscal year, the Company reclassified a portion of its securities portfolio from the AFS to the HTM category. 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 Dodd-Frank and Basel III capital guidelines, whereby unrealized losses on AFS securities could become a direct deduction from regulatory capital. Subsequent to the reclassification and prior to June 30, 2013, the Basel III Accord was finalized and clarified that unrealized losses and gains on securities will not affect regulatory capital for those companies that opt out of the requirement, which the Company intends to do.

Gains and losses on the sale of securities are determined using the specific identification method based on amortized cost and are reflected in results of operations at the time of sale. Interest and dividend income, adjusted by amortization of purchase premium or discount over the estimated life of the security using the level yield method, is included in income as earned.

The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs), or based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model based valuation techniques for which significant assumptions are observable in the market (Level 2 inputs). The Company considers these valuations supplied by a third party provider which utilizes several sources for valuing fixed-income securities. Sources utilized by the third party provider include pricing models that vary based by asset class and include available trade, bid, and other market information. This methodology includes broker quotes, proprietary models, descriptive terms and conditions databases, as well as extensive quality control programs.

Securities Impairment

Management continually monitors the investment securities portfolio for impairment on a security by security basis and has a process in place to identify securities that could potentially have a credit impairment that is other-than-temporary. This process involves the consideration of the length of time and extent to which the fair value has been less than the amortized cost basis, review of available information regarding the financial position of the issuer, monitoring the rating of the security, monitoring changes in value, cash flow projections, and the Company’s intent to sell a security or whether it is more likely than not the Company will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity. To the extent the Company determines that a security is deemed to be other-than-temporarily impaired, an impairment loss is recognized. If the Company intends to sell a security or it is more likely than not that the Company would be required to sell a security before the recovery of its amortized cost, the Company recognizes an other-than-temporary impairment for the difference between amortized cost and fair value. If the Company does not expect to recover the amortized cost basis, does not plan to sell the security and if it is not more likely than not that the Company would be required to sell the security before the recovery of its amortized cost, the recognition of the other-than-temporary impairment is bifurcated. For those securities, the Company separates the total impairment into a credit loss component recognized in net income, and the amount of the loss related to other factors is recognized in other comprehensive income, net of taxes.

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The amount of the credit loss component of a debt security impairment is estimated as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset- backed or floating rate security. In fiscal 2014, 2013 and 2012, there was no other-than-temporary impairment recorded.

LOANS RECEIVABLE

Loans receivable which management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding principal balances reduced by the allowance for loan losses and any deferred fees or costs on originated loans.

Interest income on loans is accrued over the term of the loans based upon the amount of principal outstanding except when serious doubt exists as to the collectibility of a loan, in which case the accrual of interest is discontinued. Interest income is subsequently recognized only to the extent that cash payments are received until, in management’s judgment, the borrower has demonstrated a continued ability to make contractual interest and principal payments, in which case the loan is returned to accrual status.

Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized as an adjustment to interest income using the interest method.

As part of the Company’s ongoing risk management practices, management attempts to work with borrowers when necessary to extend or modify loan terms to better align with their current ability to repay. Extensions and modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Each occurrence is unique to the borrower and is evaluated separately. In a situation where an economic concession has been granted to a borrower that is experiencing financial difficulty, the Company identifies and reports that loan as a troubled debt restructuring (“TDR”). Management considers regulatory guidelines when restructuring loans to ensure that prudent lending practices are followed. As such, qualification criteria and payment terms consider the borrower’s current and prospective ability to comply with the modified terms of the loan. Additionally, the Company structures loan modifications with the intent of strengthening repayment prospects.

The Company considers whether a borrower is experiencing financial difficulties, as well as whether a concession has been granted to a borrower determined to be troubled, when determining whether a modification meets the criteria of being a TDR. For such purposes, evidence which may indicate that a borrower is troubled includes, among other factors, the borrower’s default on debt, the borrower’s declaration of bankruptcy or preparation for the declaration of bankruptcy, the borrower’s forecast that entity-specific cash flows will be insufficient to service the related debt, or the borrower’s inability to obtain funds from sources other than existing creditors at an effective interest rate equal to the current market interest rate for similar debt for a non-troubled debtor. If a borrower is determined to be troubled based on such factors or similar evidence, a concession will be deemed to have been granted if a modification of the terms of the debt occurred that management would not otherwise consider. Such concessions may include, among other modifications, a reduction of the stated interest for the remaining original life of the debt, an extension of the maturity date at a stated interest rate lower than the current market rate for new debt with similar risk, a reduction of accrued interest, or a reduction of the face amount or maturity amount of the debt.

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Loans that are reported as TDRs apply the identical criteria in the determination of whether the loan should be accruing or not accruing. The event of classifying the loan as a TDR due to a modification of terms may be independent from the determination of accruing interest on a loan.

Generally, when a loan becomes delinquent 90 days or more or when the collection of principal or interest becomes doubtful, the Company will place the loan on a non-accrual status and, as a result, previously accrued interest income on the loan will be charged to current income. The loan will remain on a non-accrual status until the loan becomes current and has demonstrated a sustained period of satisfactory performance.

MORTGAGE SERVICING AND TRANSFERS OF FINANCIAL ASSETS

The Company, from time to time, sells whole loans and loan participations, generally without recourse. Sold loans are not included in the consolidated financial statements. The Bank generally retains the right to service the sold loans for a fee. At September 30, 2014 and 2013, the Bank was servicing loans for others with aggregate unpaid principal balances of $22.5 million and $17.3 million, respectively.

ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses represents management’s estimate of probable loan losses which have been incurred as of the date of the consolidated financial statements. The allowance for loan losses is increased by a provision for loan losses charged to expense and decreased by charge-offs (net of recoveries). Estimating the risk of loss and the amount of loss on any loan is necessarily subjective. Management’s periodic evaluation of the appropriateness of the allowance is based on the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, and current economic conditions. While management may periodically allocate portions of the allowance for specific problem loan situations, the entire allowance is available for any loan charge-offs that occur.

Loans are considered impaired if full principal or interest payments are not probable in accordance with the contractual loan terms. Impaired loans are carried at the present value of expected future cash flows discounted at the loan’s effective interest rate or at the fair value of the collateral if the loan is collateral dependent. A portion of the allowance for loan losses is allocated to impaired loans if the value of such loans is deemed to be less than the unpaid balance.

The allowance consists of specific, general, and unallocated components. The specific component relates to impaired loans. For such loans, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers loans not considered impaired and is based on historical loss experience adjusted for qualitative factors. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

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Smaller-balance homogenous loans are collectively evaluated for impairment. Such loans include residential first mortgage loans secured by one-to-four family residences, residential construction loans, and automobile, manufactured homes, home equity and second mortgage loans. Commercial and agricultural loans and mortgage loans secured by other properties are evaluated individually for impairment. When analysis of borrower operating results and financial condition indicates that underlying cash flows of the borrower’s business are not adequate to meet its debt service requirements, the loan is evaluated for impairment. Often this is associated with a delay or shortfall in payments of 90 days or more. Non-accrual loans and all troubled debt restructurings are considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

FORECLOSED REAL ESTATE AND REPOSSESSED ASSETS

Real estate properties and repossessed assets acquired through, or in lieu of, loan foreclosure are initially recorded at fair value less selling costs at the date of foreclosure, establishing a new cost basis. Any reduction to fair value from the carrying value of the related loan at the time of acquisition is accounted for as a loan loss and charged against the allowance for loan losses. Valuations are periodically performed by management and valuation allowances are increased through a charge to income for reductions in fair value or increases in estimated selling costs.

INCOME TAXES

The Company records income tax expense based on the amount of taxes due on its tax return plus deferred taxes computed based on the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, using enacted tax rates. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

In accordance with ASC 740, Income Taxes, the Company recognizes a tax position as a benefit only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized upon examination. For tax positions not meeting the more likely than not test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

PREMISES, FURNITURE, AND EQUIPMENT

Land is carried at cost. Buildings, furniture, fixtures, leasehold improvements and equipment are carried at cost, less accumulated depreciation and amortization computed principally by using the straight-line method over the estimated useful lives of the assets, which range from 10 to 40 years for buildings, and 2 to 15 years for leasehold improvements, and for furniture, fixtures and equipment. These assets are reviewed for impairment when events indicate the carrying amount may not be recoverable.

TRANSFERS OF FINANCIAL ASSETS

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been legally isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

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BANK-OWNED LIFE INSURANCE

Bank-owned life insurance represents the cash surrender value of investments in life insurance contracts. Earnings on the contracts are based on the earnings on the cash surrender value, less mortality costs.

EMPLOYEE STOCK OWNERSHIP PLAN (“ESOP”)

The cost of shares issued to the ESOP, but not yet allocated to participants, are presented in the consolidated statements of financial condition as a reduction of stockholders’ equity. Compensation expense is recorded based on the market price of the shares as they are committed to be released for allocation to participant accounts. The difference between the market price and the cost of shares committed to be released is recorded as an adjustment to additional paid-in capital. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings. Dividends on unallocated shares are used to reduce the accrued interest and principal amount of the ESOP’s loan payable to the Company. At September 30, 2014 and 2013, all shares in the ESOP were allocated.

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Company, in the normal course of business, makes commitments to make loans which are not reflected in the consolidated financial statements.

INTANGIBLE ASSETS

Intangible assets other than goodwill are amortized. All intangible assets are subject to an impairment test at least annually or more often if conditions indicate a possible impairment.

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

The Company enters into sales of securities under agreements to repurchase with primary dealers only, which provide for the repurchase of the same security. Securities sold under agreements to repurchase identical securities are collateralized by assets which are held in safekeeping in the name of the Bank or by the dealers who arranged the transaction. Securities sold under agreements to repurchase are treated as financings, and the obligations to repurchase such securities are reflected as a liability. The securities underlying the agreements remain in the asset accounts of the Company.

REVENUE RECOGNITION

Interest revenue from loans and investments is recognized on the accrual basis of accounting as the interest is earned according to the terms of the particular loan or investment. Income from service and other customer charges is recognized as earned. Card fee revenue within the MPS division is recognized as services are performed and service charges are earned in accordance with the terms of the various programs.

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EARNINGS PER COMMON SHARE (“EPS”)

Basic EPS is based on the net income divided by the weighted average number of common shares outstanding during the period. Allocated ESOP shares are considered outstanding for earnings per common share calculations, as they are committed to be released; unallocated ESOP shares are not considered outstanding. Diluted EPS shows the dilutive effect of additional potential common shares issuable under stock option plans.

COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) consists of net income and other comprehensive income or loss. Other comprehensive income includes the change in net unrealized gains and losses on securities available for sale, net of reclassification adjustments and tax effects. Accumulated other comprehensive income (loss) is recognized as a separate component of stockholders’ equity.

STOCK COMPENSATION

Compensation expense for share based awards is recorded over the vesting period at the fair value of the award at the time of grant. The exercise price of options or fair value of nonvested shares granted under the Company’s incentive plans is equal to the fair market value of the underlying stock at the grant date. The Company assumes no projected forfeitures on its stock based compensation, since actual historical forfeiture rates on its stock based incentive awards has been negligible.

NEW ACCOUNTING PRONOUNCEMENTS

Accounting Standards Update (“ASU”) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income

This ASU requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures. The ASU does not change current requirements for reporting net income or other comprehensive income. The Company adopted this ASU effective October 1, 2013, and the adoption did not have a material impact on the Company's consolidated financial statements, results of operations or cash flows.

ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists

This ASU provides guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward exists. The objective of this ASU is to eliminate diversity in practice related to this topic. The ASU states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the consolidated financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar tax loss or a tax credit carryforward except in certain situations. The Company adopted this ASU effective January 1, 2014, and the adoption did not have a material impact on the Company’s consolidated financial statements.

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ASU No. 2014-04, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans Upon Foreclosure

This ASU provides guidance on when a loan should be derecognized and collateral assets recognized during an in substance repossession or foreclosure. The objective of this ASU is to eliminate diversity in practice related to the topic. The ASU states creditors are considered to have physical possession of residential real estate property when either the creditor obtains title for the property or the borrower transfers all interest in the property through a deed or other legal agreement. When physical possession occurs, the loan should be derecognized and collateral assets recognized. This update is effective for annual and interim periods beginning after December 15, 2014, and is not expected to have a material impact on the Company’s consolidated financial statements.

ASU No. 2014-09, Revenue Recognition – Revenue from Contracts with Customers (Topic 606)

This ASU provides guidance on when to recognize revenue from contracts with customers. The objective of this ASU is to eliminate diversity in practice related to this topic and to develop guidance that would streamline and enhance revenue recognition requirements. The ASU defines five steps to recognize revenue including, identify the contract with a customer, identify the performance obligations in the contract, determine a transaction price, allocate the transaction price to the performance obligations and then recognize the revenue when or as the entity satisfies a performance obligation. This update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and the Company is currently assessing the potential impact to the consolidated financial statements.

ASU No. 2014-14, Troubled Debt Restructuring by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure

This ASU provides guidance on how to account for certain foreclosed government-guaranteed mortgage loans. The creditor should recognize a separate other receivable in the amount the creditor expects to recover from the guarantor. This update is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014, and is not expected to have a material impact on the Company’s consolidated financial statements.

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NOTE 2. EARNINGS PER COMMON SHARE

A reconciliation of the net income and common stock share amounts used in the computation of basic and diluted EPS for the fiscal years ended September 30, 2014, 2013 and 2012 is presented below.

	2014			2013			2012
	(Dollars in Thousands, Except Share and Per Share Data)
Earnings
Net income	$	15,713		$	13,418		$	17,114

Basic EPS
Weighted average common shares outstanding		6,117,577			5,595,733			3,460,877
Less weighted average nonvested shares		(4,301	)		(2,032	)		-
Weighted average common shares outstanding		6,113,276			5,593,701			3,460,877

Earnings Per Common Share
Basic	$	2.57		$	2.40		$	4.94

Diluted EPS
Weighted average common shares outstanding for basic earnings per common share		6,113,276			5,593,701			3,460,877
Add dilutive effect of assumed exercises of stock options, net of tax benefits		85,133			53,437			19,601
Weighted average common and dilutive potential common shares outstanding		6,198,409			5,647,138			3,480,478

Earnings Per Common Share
Diluted	$	2.53		$	2.38		$	4.92

Stock options totaling 29,984, 88,828 and 308,351 were not considered in computing diluted earnings per common share for the years ended September 30, 2014, 2013, and 2012, respectively, because they were not dilutive.

NOTE 3. SECURITIES

Securities available for sale were as follows:

	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED (LOSSES)			FAIR VALUE

At September 30, 2014
	(Dollars in Thousands)
Debt securities
Trust preferred and corporate securities	$	48,747	$	191	$	(2,009	)	$	46,929
Small business administration securities		66,541		543		(72	)		67,012
Non-bank qualified obligations of states and political subdivisions		368,897		2,494		(3,811	)		367,580
Mortgage-backed securities		663,690		3,519		(9,339	)		657,870
Total debt securities		1,147,875		6,747		(15,231	)		1,139,391
Common equities and mutual funds		539		291		(5	)		825
Total available for sale securities	$	1,148,414	$	7,038	$	(15,236	)	$	1,140,216

	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED (LOSSES)			FAIR VALUE

At September 30, 2013
	(Dollars in Thousands)
Debt securities
Trust preferred and corporate securities	$	52,897	$	136	$	(4,249	)	$	48,784
Small business administration securities		10,099		482		-			10,581
Obligations of states and political subdivisions		1,880		-		(153	)		1,727
Non-bank qualified obligations of states and political subdivisions		255,189		-		(16,460	)		238,729
Mortgage-backed securities		596,343		3,968		(18,939	)		581,372
Total available for sale securities	$	916,408	$	4,586	$	(39,801	)	$	881,193

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Securities held to maturity were as follows:

	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED (LOSSES)			FAIR VALUE

At September 30, 2014
	(Dollars in Thousands)
Debt securities
Obligations of states and political subdivisions	$	19,304	$	48	$	(372	)	$	18,980
Non-bank qualified obligations of states and political subdivisions		193,595		894		(2,329	)		192,160
Mortgage-backed securities		70,034		-		(1,862	)		68,172
Total held to maturity securities	$	282,933	$	942	$	(4,563	)	$	279,312

	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED (LOSSES)			FAIR VALUE

At September 30, 2013
	(Dollars in Thousands)
Debt securities
Agency and instrumentality securities	$	10,003	$	-	$	(390	)	$	9,613
Obligations of states and political subdivisions		19,549		13		(1,220	)		18,342
Non-bank qualified obligations of states and political subdivisions		181,547		-		(12,085	)		169,462
Mortgage-backed securities		76,927		-		(3,826	)		73,101
Total held to maturity securities	$	288,026	$	13	$	(17,521	)	$	270,518

Included in securities available for sale are trust preferred securities as follows:

At September 30, 2014	Amortized Cost		Fair Value		Unrealized Gain (Loss)			S&P Credit Rating	Moody's Credit Rating

Issuer⁽¹⁾
	(Dollars in Thousands)

Key Corp. Capital I	$	4,985	$	4,400	$	(585	)	BB+	Baa3
Huntington Capital Trust II SE		4,977		4,300		(677	)	BB	Baa3
PNC Capital Trust		4,962		4,400		(562	)	BBB-	Baa2
Wells Fargo (Corestates Capital) Trust		4,444		4,400		(44	)	BBB+	A3
Total	$	19,368	$	17,500	$	(1,868	)

(1) Trust preferred securities are single-issuance. There are no known deferrals, defaults or excess subordination.

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At September 30, 2013	Amortized Cost		Fair Value		Unrealized Gain (Loss)			S&P Credit Rating	Moody's Credit Rating

Issuer⁽¹⁾
	(Dollars in Thousands)

Key Corp. Capital I	$	4,984	$	4,100	$	(884	)	BBB-	Baa3
Huntington Capital Trust II SE		4,976		4,075		(901	)	BB+	Baa3
PNC Capital Trust		4,959		4,175		(784	)	BBB	Baa2
Wells Fargo (Corestates Capital) Trust		4,399		4,050		(349	)	A-	A3
Total	$	19,318	$	16,400	$	(2,918	)

(1) Trust preferred securities are single-issuance. There are no known deferrals, defaults or excess subordination.

Management has a process to identify securities that could potentially have a credit impairment that is other-than-temporary. This process involves evaluating the length of time and extent to which the fair value has been less than the amortized cost basis, reviewing available information regarding the financial position of the issuer, monitoring the rating of the security, monitoring changes in value, and projecting cash flows. Other factors, but not necessarily all, considered are: that the risk of loss is minimized and easier to determine due to the single-issuer, rather than pooled, nature of the securities, the financial condition of the issuers listed, and whether there have been any payment deferrals or defaults to-date. Such factors are subject to change over time.

Management also determines if it is more likely than not we will be required to sell the security before the recovery of its amortized cost basis which, in some cases, may extend to maturity. To the extent we determine that a security is deemed to be other-than-temporarily impaired, an impairment loss is recognized.

For all securities that are considered temporarily impaired, the Company does not intend to sell these securities (has not made a decision to sell) and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may occur at maturity. The Company believes that it will collect all principal and interest due on all investments that have amortized cost in excess of fair value that are considered only temporarily impaired.

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Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position at September 30, 2014 and 2013 are as follows:

Available For Sale	LESS THAN 12 MONTHS					OVER 12 MONTHS					TOTAL
	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
At September 30, 2014	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
	(Dollars in Thousands)
Debt securities
Trust preferred and corporate securities	$	6,073	$	(47	)	$	25,359	$	(1,962	)	$	31,432	$	(2,009	)
Small Business Administration securities		8,454		(72	)		-		-			8,454		(72	)
Non-bank qualified obligations of states and political subdivisions		27,062		(70	)		191,146		(3,741	)		218,208		(3,811	)
Mortgage-backed securities		238,980		(1,248	)		234,347		(8,091	)		473,327		(9,339	)
Total debt securities		280,569		(1,437	)		450,852		(13,794	)		731,421		(15,231	)
Common equities and mutual funds		123		(5	)		-		-			123		(5	)
Total available for sale securities	$	280,692	$	(1,442	)	$	450,852	$	(13,794	)	$	731,544	$	(15,236	)

	LESS THAN 12 MONTHS					OVER 12 MONTHS					TOTAL
	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
At September 30, 2013	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
	(Dollars in Thousands)
Debt securities
Trust preferred and corporate securities	$	29,312	$	(1,433	)	$	13,477	$	(2,816	)	$	42,789	$	(4,249	)
Obligations of states and political subdivisions		1,727		(153	)		-		-			1,727		(153	)
Non-bank qualified obligations of states and political subdivisions		238,729		(16,460	)		-		-			238,729		(16,460	)
Mortgage-backed securities		357,850		(18,939	)		-		-			357,850		(18,939	)
Total available for sale securities	$	627,618	$	(36,985	)	$	13,477	$	(2,816	)	$	641,095	$	(39,801	)

Held To Maturity	LESS THAN 12 MONTHS					OVER 12 MONTHS					TOTAL
	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
At September 30, 2014	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
	(Dollars in Thousands)
Debt securities
Obligations of states and political subdivisions	$	1,056	$	(2	)	$	14,079	$	(370	)	$	15,135	$	(372	)
Non-bank qualified obligations of states and political subdivisions		-		-			147,949		(2,329	)		147,949		(2,329	)
Mortgage-backed securities		-		-			68,172		(1,862	)		68,172		(1,862	)
Total held to maturity securities	$	1,056	$	(2	)	$	230,200	$	(4,561	)	$	231,256	$	(4,563	)

	LESS THAN 12 MONTHS					OVER 12 MONTHS				TOTAL
	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)		Fair Value		Unrealized (Losses)
At September 30, 2013	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)		Fair Value		Unrealized (Losses)
	(Dollars in Thousands)
Debt securities
Agency and instrumentality securities	$	9,613	$	(390	)		-		-		9,613		(390	)
Obligations of states and political subdivisions		17,253		(1,220	)		-		-		17,253		(1,220	)
Non-bank qualified obligations of states and political subdivisions		169,462		(12,085	)		-		-		169,462		(12,085	)
Mortgage-backed securities		73,101		(3,826	)		-		-		73,101		(3,826	)
Total held to maturity securities	$	269,429	$	(17,521	)	$	-	$	-	$	269,429	$	(17,521	)

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As of September 30, 2014, the investment portfolio included securities with current unrealized losses which have existed for longer than one year. All of these securities are considered to be acceptable credit risks. Because the declines in fair value were due to changes in market interest rates, not in estimated cash flows, no other-than-temporary impairment was recorded at September 30, 2014 and 2013.

The amortized cost and fair value of debt securities by contractual maturity are shown below. Certain securities have call features which allow the issuer to call the security prior to maturity. Expected maturities may differ from contractual maturities in mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Therefore, mortgage-backed securities are not included in the maturity categories in the following maturity summary.

Available For Sale	AMORTIZED COST		FAIR VALUE
	AMORTIZED COST		FAIR VALUE
September 30, 2014	(Dollars in Thousands)

Due in one year or less	$	2,999	$	3,048
Due after one year through five years		9,922		10,079
Due after five years through ten years		285,413		285,698
Due after ten years		185,851		182,696
		484,185		481,521
Mortgage-backed securities		663,690		657,870
Common equities and mutual funds		539		825
Total available for sale securities	$	1,148,414	$	1,140,216

	AMORTIZED COST		FAIR VALUE
	AMORTIZED COST		FAIR VALUE
September 30, 2013	(Dollars in Thousands)

Due in one year or less	$	-	$	-
Due after one year through five years		9,929		10,061
Due after five years through ten years		162,203		155,014
Due after ten years		147,933		134,746
		320,065		299,821
Mortgage-backed securities		596,343		581,372
Total available for sale securities	$	916,408	$	881,193

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Held To Maturity	AMORTIZED COST		FAIR VALUE
	AMORTIZED COST		FAIR VALUE
September 30, 2014	(Dollars in Thousands)

Due in one year or less	$	347	$	348
Due after one year through five years		4,726		4,718
Due after five years through ten years		91,532		89,984
Due after ten years		116,294		116,090
		212,899		211,140
Mortgage-backed securities		70,034		68,172
Total held to maturity securities	$	282,933	$	279,312

	AMORTIZED COST		FAIR VALUE
	AMORTIZED COST		FAIR VALUE
September 30, 2013	(Dollars in Thousands)

Due in one year or less	$	649	$	649
Due after one year through five years		2,234		2,203
Due after five years through ten years		50,547		47,519
Due after ten years		157,669		147,046
		211,099		197,417
Mortgage-backed securities		76,927		73,101
Total held to maturity securities	$	288,026	$	270,518

Activities related to the sale of securities available for sale are summarized below.

	2014		2013		2012
	(Dollars in Thousands)

Proceeds from sales	$	166,804	$	209,172	$	678,833
Gross gains on sales		2,292		2,947		15,426
Gross losses on sales		2,185		401		1,671

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NOTE 4. LOANS RECEIVABLE, NET

Year-end loans receivable were as follows:

	September 30, 2014			September 30, 2013
	(Dollars in Thousands)

1-4 Family Real Estate	$	116,395		$	82,287
Commercial and Multi-Family Real Estate		224,302			192,786
Agricultural Real Estate		56,071			29,552
Consumer		29,329			30,314
Commercial Operating		30,846			16,264
Agricultural Operating		42,258			33,750
Total Loans Receivable		499,201			384,953

Less:
Allowance for Loan Losses		(5,397	)		(3,930	)
Net Deferred Loan Origination Fees		(797	)		(595	)
Total Loans Receivable, Net	$	493,007		$	380,428

Annual activity in the allowance for loan losses was as follows:

Year ended September 30,	2014			2013			2012
	(Dollars in Thousands)

Beginning balance	$	3,930		$	3,971		$	4,926
Provision (recovery) for loan losses		1,150			-			1,049
Recoveries		367			179			99
Charge offs		(50	)		(220	)		(2,103	)
Ending balance	$	5,397		$	3,930		$	3,971

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Allowance for Loan Losses and Recorded Investment in loans at September 30, 2014 and 2013 are as follows:

	1-4 Family Real Estate		Commercial and Multi-Family Real Estate			Agricultural Real Estate		Consumer		Commercial Operating		Agricultural Operating			Unallocated		Total
	(Dollars in Thousands)
Year Ended September 30, 2014

Allowance for loan losses:
Beginning balance	$	333	$	1,937		$	112	$	74	$	49	$	267		$	1,158	$	3,930
Provision (recovery) for loan losses		217		(709	)		151		4		26		502			959		1,150
Charge offs		-		-			-		-		-		(50	)		-		(50	)
Recoveries		2		347			-		-		18		-			-		367
Ending balance	$	552	$	1,575		$	263	$	78	$	93	$	719		$	2,117	$	5,397


Ending balance: individually evaluated for impairment		23		350			-		-		-		340			-		713
Ending balance: collectively evaluated for impairment		529		1,225			263		78		93		379			2,117		4,684
Total	$	552	$	1,575		$	263	$	78	$	93	$	719		$	2,117	$	5,397

Loans:
Ending balance: individually evaluated for impairment		387		5,655			-		-		22		340			-		6,404
Ending balance: collectively evaluated for impairment		116,008		218,647			56,071		29,329		30,824		41,918			-		492,797
Total	$	116,395	$	224,302		$	56,071	$	29,329	$	30,846	$	42,258		$	-	$	499,201

	1-4 Family Real Estate			Commercial and Multi-Family Real Estate			Agricultural Real Estate		Consumer			Commercial Operating			Agricultural Operating		Unallocated		Total
	(Dollars in Thousands)
Year Ended September 30, 2013

Allowance for loan losses:
Beginning balance	$	193		$	3,113		$	1	$	3		$	49		$	-	$	612	$	3,971
Provision (recovery) for loan losses		163			(1,095	)		111		71			(63	)		267		546		-
Charge offs		(25	)		(194	)		-		(1	)		-			-		-		(220	)
Recoveries		2			113			-		1			63			-		-		179
Ending balance	$	333		$	1,937		$	112	$	74		$	49		$	267	$	1,158	$	3,930


Ending balance: individually evaluated for impairment		25			404			-		-			-			-		-		429
Ending balance: collectively evaluated for impairment		308			1,533			112		74			49			267		1,158		3,501
Total	$	333		$	1,937		$	112	$	74		$	49		$	267	$	1,158	$	3,930

Loans:
Ending balance: individually evaluated for impairment		641			6,634			-		-			45			-		-		7,320
Ending balance: collectively evaluated for impairment		81,646			186,152			29,552		30,314			16,219			33,750		-		377,633
Total	$	82,287		$	192,786		$	29,552	$	30,314		$	16,264		$	33,750	$	-	$	384,953

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The asset classification of loans at September 30, 2014 and 2013, are as follows:

September 30, 2014	1-4 Family Real Estate		Commercial and Multi-Family Real Estate		Agricultural Real Estate		Consumer		Commercial Operating		Agricultural Operating		Total
	(Dollars in Thousands)

Pass	$	115,700	$	222,074	$	52,364	$	29,329	$	30,709	$	32,261	$	482,437
Watch		369		852		273		-		137		369		2,000
Special Mention		81		96		1,660		-		-		63		1,900
Substandard		245		1,280		1,774		-		-		9,565		12,864
Doubtful		-		-		-		-		-		-		-
	$	116,395	$	224,302	$	56,071	$	29,329	$	30,846	$	42,258	$	499,201

September 30, 2013	1-4 Family Real Estate		Commercial and Multi-Family Real Estate		Agricultural Real Estate		Consumer		Commercial Operating		Agricultural Operating		Total
	(Dollars in Thousands)

Pass	$	81,719	$	177,513	$	26,224	$	30,314	$	16,251	$	26,362	$	358,383
Watch		239		7,791		3,328		-		13		1,690		13,061
Special Mention		84		102		-		-		-		5,698		5,884
Substandard		245		7,380		-		-		-		-		7,625
Doubtful		-		-		-		-		-		-		-
	$	82,287	$	192,786	$	29,552	$	30,314	$	16,264	$	33,750	$	384,953

The loan classification and risk rating definitions are as follows:

Pass- A pass asset is of sufficient quality in terms of repayment, collateral and management to preclude a special mention or an adverse rating.

Watch- A watch asset is generally a credit performing well under current terms and conditions but with identifiable weakness meriting additional scrutiny and corrective measures. Watch is not a regulatory classification but can be used to designate assets that are exhibiting one or more weaknesses that deserve management’s attention. These assets are of better quality than special mention assets.

Special Mention- Special mention assets are a credit with potential weaknesses deserving management’s close attention and if left uncorrected, may result in deterioration of the repayment prospects for the asset. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Special mention is a temporary status with aggressive credit management required to garner adequate progress and move to watch or higher.

Substandard- A substandard asset is inadequately protected by the net worth and/or repayment ability or by a weak collateral position. Assets so classified will have well-defined weaknesses creating a distinct possibility the Bank will sustain some loss if the weaknesses are not corrected. Loss potential does not have to exist for an asset to be classified as substandard.

Doubtful- A doubtful asset has weaknesses similar to those classified substandard, with the degree of weakness causing the likely loss of some principal in any reasonable collection effort. Due to pending factors the asset’s classification as loss is not yet appropriate.

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Loss- A loss asset is considered uncollectible and of such little value that the asset’s continuance on the Bank’s balance sheet is no longer warranted. This classification does not necessarily mean an asset has no recovery or salvage value leaving room for future collection efforts.

Generally, when a loan becomes delinquent 90 days or more or when the collection of principal or interest becomes doubtful, the Company will place the loan on a non-accrual status and, as a result, previously accrued interest income on the loan is charged against current income. The loan will remain on a non-accrual status until the loan establishes satisfactory payment performance. Past due loans at September 30, 2014 and 2013 are as follows:

September 30, 2014	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Non-Accrual Loans		Total Loans Receivable
	(Dollars in Thousands)

1-4 Family Real Estate	$	111	$	37	$	-	$	148	$	115,966	$	281	$	116,395
Commercial and Multi-Family Real Estate		-		-		-		-		223,990		312		224,302
Agricultural Real Estate		-		-		-		-		56,071		-		56,071
Consumer		2		12		54		68		29,261		-		29,329
Commercial Operating		-		-		-		-		30,846		-		30,846
Agricultural Operating		-		-		-		-		41,918		340		42,258
Total	$	113	$	49	$	54	$	216	$	498,052	$	933	$	499,201

September 30, 2013	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Non-Accrual Loans		Total Loans Receivable
	(Dollars in Thousands)

1-4 Family Real Estate	$	53	$	-	$	245	$	298	$	81,744	$	245	$	82,287
Commercial and Multi-Family Real Estate		102		-		107		209		192,150		427		192,786
Agricultural Real Estate		1,169		-		-		1,169		28,383		-		29,552
Consumer		29		21		13		63		30,251		-		30,314
Commercial Operating		-		-		-		-		16,257		7		16,264
Agricultural Operating		-		-		-		-		33,750		-		33,750
Total	$	1,353	$	21	$	365	$	1,739	$	382,535	$	679	$	384,953

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Impaired loans at September 30, 2014 and 2013 are as follows:

	Recorded Balance		Unpaid Principal Balance		Specific Allowance
September 30, 2014	(Dollars in Thousands)

Loans without a specific valuation allowance
1-4 Family Real Estate	$	142	$	142	$	-
Commercial and Multi-Family Real Estate		4,375		4,375		-
Agricultural Real Estate		-		-		-
Consumer		-		-		-
Commercial Operating		22		22		-
Agricultural Operating		-		-		-
Total	$	4,539	$	4,539	$	-
Loans with a specific valuation allowance
1-4 Family Real Estate	$	245	$	245	$	23
Commercial and Multi-Family Real Estate		1,280		1,280		350
Agricultural Real Estate		-		-		-
Consumer		-		-		-
Commercial Operating		-		-		-
Agricultural Operating		340		340		340
Total	$	1,865	$	1,865	$	713

	Recorded Balance		Unpaid Principal Balance		Specific Allowance
September 30, 2013	(Dollars in Thousands)

Loans without a specific valuation allowance
1-4 Family Real Estate	$	359	$	359	$	-
Commercial and Multi-Family Real Estate		4,527		4,535		-
Agricultural Real Estate		-		-		-
Consumer		-		-		-
Commercial Operating		45		60		-
Agricultural Operating		-		-		-
Total	$	4,931	$	4,954	$	-
Loans with a specific valuation allowance
1-4 Family Real Estate	$	282	$	282	$	25
Commercial and Multi-Family Real Estate		2,107		2,107		404
Agricultural Real Estate		-		-		-
Consumer		-		-		-
Commercial Operating		-		-		-
Agricultural Operating		-		-		-
Total	$	2,389	$	2,389	$	429

Cash interest collected on impaired loans was not material during the years ended September 30, 2014 and 2013.

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The following table provides the average recorded investment in impaired loans for the years ended September 30, 2014 and 2013.

	Year Ended September 30,
	2014		2013
	Average Recorded Investment		Average Recorded Investment
	(Dollars in Thousands)

1-4 Family Real Estate	$	574	$	596
Commercial and Multi-Family Real Estate		6,526		8,480
Agricultural Real Estate		-		-
Consumer		-		1
Commercial Operating		34		51
Agricultural Operating		29		-
Total	$	7,163	$	9,128

For fiscal 2014 and 2013, the Company’s TDRs (which involved forgiving a portion of interest or principal on any loans or making loans at a rate materially less than that of market rates) are included in the table.

No TDRs were recorded during fiscal 2014 or 2013. Also, no TDRs which had been modified during the 12-month period prior to default had a payment default during fiscal 2014 or 2013.

Virtually all of the Company’s originated loans are to Iowa and South Dakota-based individuals and organizations. The Company’s purchased loans totaled $9.7 million at September 30, 2014, which were secured by properties located, as a percentage of total loans, as follows: 1% each in North Dakota and Oregon.

The Company originates and purchases commercial real estate loans. These loans are considered by management to be of somewhat greater risk of uncollectibility due to the dependency on income production. The Company’s commercial real estate loans include $40.7 million of loans secured by hotel properties and $62.3 million of multi-family properties at September 30, 2014. The Company’s commercial real estate loans include $34.8 million of loans secured by hotel properties and $52.0 million of multi-family properties at September 30, 2013. The remainder of the commercial real estate portfolio is diversified by industry. The Company’s policy for requiring collateral and guarantees varies with the creditworthiness of each borrower.

Non-accruing loans were $0.9 million and $0.7 million at September 30, 2014 and 2013, respectively. There were $54,000 and $13,000 accruing loans delinquent 90 days or more at September 30, 2014 and 2013, respectively. For the year ended September 30, 2014, gross interest income which would have been recorded had the non-accruing loans been current in accordance with their original terms amounted to approximately $152,000, of which none was included in interest income.

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NOTE 5. LOAN SERVICING

Loans serviced for others are not reported as assets. The unpaid principal balances of these loans at year end were as follows:

September 30,	2014		2013		2012
	(Dollars in Thousands)

Mortgage loan portfolios serviced for Fannie Mae	$	5,948	$	7,361	$	11,240
Other		16,576		9,930		3,251
	$	22,524	$	17,291	$	14,491

NOTE 6. PREMISES, FURNITURE, AND EQUIPMENT, NET

Year-end premises and equipment were as follows:

September 30,	2014			2013
	(Dollars in Thousands)

Land	$	1,673		$	1,679
Buildings		12,275			12,275
Furniture, fixtures, and equipment		30,947			28,430
		44,895			42,384
Less accumulated depreciation		(28,433	)		(24,720	)
	$	16,462		$	17,664

Depreciation expense of premises, furniture, and equipment included in occupancy and equipment expense was approximately $3.5 million, $3.3 million, and $3.5 million for the years ended September 30, 2014, 2013, and 2012, respectively.

NOTE 7. TIME CERTIFICATES OF DEPOSITS

Time certificates of deposits in denominations of $100,000 or more were approximately $87.1 million and $78.6 million at September 30, 2014, and 2013, respectively.

At September 30, 2014, the scheduled maturities of time certificates of deposits were as follows for the years ending:

September 30,
(Dollars in Thousands)

2015	$	106,078
2016		15,721
2017		7,850
2018		3,153
2019		1,751
Total Certificates	$	134,553

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Under the Dodd-Frank Act, IRA and non-IRA deposit accounts are permanently insured up to $250,000 by the DIF under management of the FDIC. Previous to the legislation in 2010, the coverage of $250,000 was temporary until December 2013.

NOTE 8. ADVANCES FROM THE FEDERAL HOME LOAN BANK AND OTHER BORROWINGS

At September 30, 2014, the Company’s advances from the FHLB had fixed rates ranging from 6.97% to 7.01% with a weighted average rate of 6.98%. The scheduled maturities of FHLB advances were as follows for the years ending:

September 30,
(Dollars in Thousands)

2015	$	-
2016		-
2017		-
2018		-
2019		5,000
Thereafter		2,000
Total FHLB Advances	$	7,000

The Company had $470.0 million of overnight federal funds purchased from the FHLB as of September 30, 2014.

As of September 30, 2013, the Company’s advances from the FHLB totaled $7.0 million and carried a weighted average rate of 6.98%. The Company had $190.0 million in overnight federal funds purchased from the FHLB at September 30, 2013.

The Bank has executed blanket pledge agreements whereby the Bank assigns, transfers, and pledges to the FHLB and grants to the FHLB a security interest in all mortgage collateral and securities collateral. The Bank has the right to use, commingle, and dispose of the collateral it has assigned to the FHLB. Under the agreement, the Bank must maintain “eligible collateral” that has a “lending value” at least equal to the “required collateral amount,” all as defined by the agreement.

At year-end 2014, and 2013, the Bank pledged securities with fair values of approximately $422.9 million and $409.6 million, respectively, against specific FHLB advances. In addition, qualifying mortgage loans of approximately $83.3 million, and $62.9 million were pledged as collateral at September 30, 2014 and 2013, respectively.

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NOTE 9. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase totaled approximately $10.4 million and $9.1 million at September 30, 2014 and 2013, respectively.

An analysis of securities sold under agreements to repurchase follows:

September 30,	2014			2013
	(Dollars in Thousands)

Highest month-end balance	$	33,999		$	19,901
Average balance		10,137			10,540
Weighted average interest rate for the year		0.52	%		0.52	%
Weighted average interest rate at year end		0.52	%		0.53	%

The Company pledged securities with fair values of approximately $36.4 million at September 30, 2014, as collateral for securities sold under agreements to repurchase. There were $20.9 million securities pledged as collateral for securities sold under agreements to repurchase at September 30, 2013.

NOTE 10. SUBORDINATED DEBENTURES AND TRUST PREFERRED SECURITIES

Subordinated debentures are due to First Midwest Financial Capital Trust I, a 100%-owned nonconsolidated subsidiary of the Company. The debentures were issued in 2001 in conjunction with the Trust’s issuance of 10,000 shares of Trust Preferred Securities. The debentures bear the same interest rate and terms as the trust preferred securities. The debentures are included on the consolidated balance sheets as liabilities.

The Company issued all of the 10,310 authorized shares of trust preferred securities of First Midwest Financial Capital Trust I holding solely subordinated debt securities. Distributions are paid semi-annually. Cumulative cash distributions are calculated at a variable rate of London Interbank Offered Rate (“LIBOR”) plus 3.75% (4.08% at September 30, 2014, and 4.15% at September 30, 2013), not to exceed 12.5%. The Company may, at one or more times, defer interest payments on the capital securities for up to 10 consecutive semi-annual periods, but not beyond July 25, 2031. At the end of any deferral period, all accumulated and unpaid distributions are required to be paid. The capital securities are required to be redeemed on July 25, 2031; however, the Company has a semi-annual option to shorten the maturity date. The redemption price is $1,000 per capital security plus any accrued and unpaid distributions to the date of redemption.

Holders of the capital securities have no voting rights, are unsecured and rank junior in priority of payment to all of the Company’s indebtedness and senior to the Company’s common stock.

Although the securities issued by the Trust are not included as a component of stockholders’ equity, the securities are treated as capital for regulatory purposes, subject to certain limitations.

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NOTE 11. EMPLOYEE STOCK OWNERSHIP AND PROFIT SHARING PLANS

The Company maintains an Employee Stock Ownership Plan (ESOP) for eligible employees who have 1,000 hours of employment with the Bank, have worked one year at the Bank and who have attained age 21. ESOP expense of $703,000, $694,000 and $696,000 was recorded for the years ended September 30, 2014, 2013, and 2012, respectively. Contributions of $850,406, $485,548 and $659,000 were made to the ESOP during the years ended September 30, 2014, 2013 and 2012, respectively.

Contributions to the ESOP and shares released from suspense are allocated among ESOP participants on the basis of compensation in the year of allocation. Benefits generally become 100% vested after seven years of credited service. Prior to the completion of seven years of credited service, a participant who terminates employment for reasons other than death or disability receives a reduced benefit based on the ESOP’s vesting schedule. Forfeitures are reallocated among remaining participating employees in the same proportion as contributions. Benefits are payable in the form of stock upon termination of employment. The Company’s contributions to the ESOP are not fixed, so benefits payable under the ESOP cannot be estimated.

For the years ended September 30, 2014, 2013 and 2012, 24,125 shares, 17,715 shares and 27,846 shares with a fair value of $35.25, $37.99 and $23.65 per share, respectively, were released. Also for the years ended September 30, 2014, 2013 and 2012, allocated shares and total ESOP shares reflect 10,643 shares, 45,225 shares and 28,486 shares, respectively, withdrawn from the ESOP by participants who are no longer with the Company or by participants diversifying their holdings. At September 30, 2014 and 2013 there were 2,529 and 3,526 shares purchased for dividend reinvestment. At September 30, 2012, no shares were purchased for dividend reinvestment.

Year-end ESOP shares are as follows:

September 30,	2014		2013		2012
	(Dollars in Thousands)

Allocated shares		239,879		223,868		247,814
Unearned shares		-		-		-
Total ESOP shares		239,879		223,868		247,814

The Company also has a profit sharing plan covering substantially all full-time employees. Contribution expense to the profit sharing plan, included in compensation and benefits, for the years ended September 30, 2014, 2013 and 2012 was $948,000, $774,000 and $775,000, respectively.

NOTE 12. SHARE BASED COMPENSATION PLANS

The Company maintains the 2002 Omnibus Incentive Plan which, among other things, provides for the awarding of stock options and nonvested (restricted) shares to certain officers and directors of the Company. Awards are granted by the Compensation Committee of the Board of Directors based on the performance of the award recipients or other relevant factors.

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The following table shows the effect to income, net of tax benefits, of share-based expense recorded in the years ended September 30, 2014, 2013 and 2012.

Year Ended September 30,	2014		2013		2012
	(Dollars in Thousands)
Total employee stock-based compensation expense recognized in income, net of tax effects of $66, $51 and $30, respectively	$	120	$	103	$	76

As of September 30, 2014, stock-based compensation expense not yet recognized in income totaled $56,000 which is expected to be recognized over a weighted average remaining period of 1.90 years.

At grant date, the fair value of options awarded to recipients is estimated using a Black-Scholes valuation model. The exercise price of stock options equals the fair market value of the underlying stock at the date of grant. Options are issued for 10 year periods with 100% vesting generally occurring either at grant date or over a four year period. No options were granted during the years ended September 30, 2014, 2013 and 2012. The intrinsic value of options exercised during the years ended September 30, 2014, 2013 and 2012 were $1.4 million, $807,000 and $117,000, respectively.

Shares are granted each year to Directors which vest immediately. The fair value is determined based on the fair market value of the Company’s stock on the grant date. The total fair value of director’s shares granted during the years ended September 30, 2014, 2013 and 2012 was $124,000, $113,000 and $79,000, respectively.

In addition to the Company’s 2002 Omnibus Incentive Plan, the Company also maintains the 1995 Stock Option and Incentive Plan. No new options were, or could have been, awarded under the 1995 plan during the year ended September 30, 2014; however, previously awarded options were exercised under this plan during the year.

The following tables show the activity of options and nonvested (restricted) shares granted, exercised, or forfeited under all of the Company’s option and incentive plans during the years ended September 30, 2014 and 2013.

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Yrs)		Aggregate Intrinsic Value




	(Dollars in Thousands, Except Share and Per Share Data)

Options outstanding, September 30, 2013		318,648		$	24.44		4.18	$	4,376
Granted		-			-		-		-
Exercised		(82,882	)		22.31		-		1,389
Forfeited or expired		-			-		-		-
Options outstanding, September 30, 2014		235,766		$	25.20		3.78	$	2,507

Options exercisable end of year		235,766		$	25.20		3.78	$	2,507

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	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Yrs)		Aggregate Intrinsic Value




	(Dollars in Thousands, Except Share and Per Share Data)

Options outstanding, September 30, 2012		389,358		$	23.52		5.08	$	1,199
Granted		-			-
Exercised		(65,399	)		18.09				807
Forfeited or expired		(5,311	)		35.06				-
Options outstanding, September 30, 2013		318,648		$	24.44		4.18	$	4,376

Options exercisable end of year		315,898		$	24.40		4.16	$	4,352

The following tables show the activity of nonvested (restricted) shares granted, vested, or forfeited under all of the Company’s option and incentive plans during the years ended September 30, 2014 and 2013.

	Number of Shares			Weighted Average Fair Value At Grant
	Number of Shares			Weighted Average Fair Value At Grant
	(Dollars in Thousands, Except Share and Per Share Data)

Nonvested shares outstanding, September 30, 2013		4,000		$	25.67
Granted		4,267			37.82
Vested		(4,267	)		35.07
Forfeited or expired		-			-
Nonvested shares outstanding, September 30, 2014		4,000		$	28.61

	Number of Shares			Weighted Average Fair Value At Grant
	Number of Shares			Weighted Average Fair Value At Grant
	(Dollars in Thousands, Except Share and Per Share Data)

Nonvested shares outstanding, September 30, 2012		-		$	-
Granted		8,900			24.20
Vested		(4,900	)		23.00
Forfeited or expired		-			-
Nonvested shares outstanding, September 30, 2013		4,000		$	25.67

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NOTE 13. INCOME TAXES

The Company and its subsidiaries file a consolidated federal income tax return on a fiscal year basis.

The provision for income taxes consists of:

Years ended September 30,	2014			2013			2012
	(Dollars in Thousands)
Federal:
Current	$	3,787		$	2,847		$	7,734
Deferred		(1,765	)		(536	)		858
		2,022			2,311			8,592

State:
Current		874			1,252			960
Deferred		10			141			130
		884			1,393			1,090

Income tax expense	$	2,906		$	3,704		$	9,682

Total income tax expense differs from the statutory federal income tax rate as follows:

Years ended September 30,	2014			2013			2012
	(Dollars in Thousands)

Income tax expense at federal tax rate	$	6,517		$	5,993		$	9,378
Increase (decrease) resulting from:
State income taxes net of federal benefit		575			1,092			708
Nontaxable buildup in cash surrender value		(399	)		(349	)		(179	)
Incentive stock option expense		(187	)		(97	)		10
Tax exempt income		(3,594	)		(2,815	)		(244	)
Nondeductible expenses		120			41			37
Other, net		(126	)		(161	)		(28	)
Total income tax expense (benefit)	$	2,906		$	3,704		$	9,682

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The components of the net deferred tax asset (liability) at September 30, 2014 and 2013 are:

September 30,	2014			2013
	(Dollars in Thousands)
Deferred tax assets:
Bad debts	$	1,955		$	1,426
Deferred compensation		708			446
Stock based compensation		271			293
Operational reserve		464			494
AMT Credit		2,239			1,113
Net unrealized losses on securities available for sale		2,969			12,776
Indirect tax benefits of unrecognized tax positions		376			-
Other assets		759			1,157
		9,741			17,705

Deferred tax liabilities:
FHLB stock dividend		(410	)		(411	)
Premises and equipment		(1,060	)		(1,366	)
Patents		(937	)		(849	)
Prepaid expenses		(743	)		(782	)
		(3,150	)		(3,408	)

Net deferred tax assets (liabilities)	$	6,591		$	14,297

As of September 30, 2014 and 2013, the Company had a gross deferred tax asset of $780,000 and $704,000, respectively, for state cumulative net operating loss carryforwards, which was fully reserved for as the Company does not anticipate any state taxable income at the holding company level in future periods.

Federal income tax laws provided savings banks with additional bad debt deductions through September 30, 1987, totaling $6.7 million for the Bank. Accounting standards do not require a deferred tax liability to be recorded on this amount, which liability otherwise would total approximately $2.3 million at September 30, 2014, and 2013. If the Bank were to be liquidated or otherwise cease to be a bank, or if tax laws were to change, the $2.3 million would be recorded as expense.

The provisions of ASC 740, Income Taxes, address the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under ASC 740, the Company recognizes the tax benefits from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination, with a tax examination being presumed to occur, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.

The Company’s tax reserves reflect management’s judgment as to the resolution of the issues involved if subject to judicial review. While the Company believes that its reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be resolved at a financial cost that does not exceed its related reserve. With respect to these reserves, the Company’s income tax expense would include (i) any changes in tax reserves arising from material changes during the period in the facts and circumstances surrounding a tax issue, and (ii) any difference from the Company’s tax position as recorded in the consolidated financial statements and the final resolution of a tax issue during the period.

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The tax years ended September 30, 2011, and later remain subject to examination by the Internal Revenue Service. For state purposes, the tax years ended September 30, 2011, and later remain open for examination, with few exceptions. A federal income tax review is currently underway with the Internal Revenue Service for the year ended September 30, 2012. The Company does not expect any material adjustments from the review. The Company does not anticipate any significant increase or decrease in unrecognized tax benefits during the next twelve months. Finally, management believes that the realization of its deferred tax assets is more likely than not based on the expectations as to future taxable income; therefore, there was no deferred tax valuation allowance at September 30, 2014 and 2013 with the exception of the state cumulative net operating loss carryforwards discussed above.

A reconciliation of the beginning and ending balances for liabilities associated with unrecognized tax benefits for the years ended September 30, 2014 and 2013, follows:

September 30,	2014			2013
	(Dollars in Thousands)

Balance at beginning of year	$	931		$	164
Additions for tax positions related to the current year		118			114
Additions for tax positions related to the prior years		-			653
Reductions for tax positions due to settlement with taxing authorities		(16	)		-
Reductions for tax positions related to prior years		(50	)		-
Balance at end of year	$	983		$	931

The total amount of unrecognized tax benefits that, if recognized, would impact the effective rate was $649,000 as of September 30, 2014. The Company recognizes interest related to unrecognized tax benefits as a component of income tax expense. The amount of accrued interest related to unrecognized tax benefits was $124,000 as of September 30, 2014. The Company does not anticipate any significant change in the total amount of unrecognized tax benefits within the next 12 months.

NOTE 14. CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS

The Bank is the Company’s primary subsidiary. The Bank is subject to various regulatory capital requirements. Failure to meet minimum capital requirements can initiate certain mandatory or discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific quantitative capital guidelines using its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The requirements are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total risk-based capital and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and a leverage ratio consisting of Tier I capital (as defined) to average assets (as defined). As of September 30, 2014, the Bank met all capital adequacy requirements.

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The Bank’s actual and required capital amounts and ratios are presented in the following table.

											Minimum Requirement To Be Well Capitalized Under Prompt Corrective Action Provisions
						Minimum Requirement For Capital Adequacy Purposes
	Actual					Minimum Requirement For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio			Amount		Ratio
(Dollars in Thousands)

September 30, 2014

MetaBank
Tangible capital (to tangible assets)	$	176,388		8.60	%	$	30,771		1.50	%	$	n/a		n/a	%
Tier 1 (core) capital (to adjusted total assets)		176,388		8.60			82,057		4.00			102,571		5.00
Tier 1 (core) capital (to risk-weighted assets)		176,388		20.95			33,672		4.00			50,508		6.00
Total risk based capital (to risk-weighted assets)		181,786		21.59			67,344		8.00			84,180		10.00

September 30, 2013

MetaBank
Tangible capital (to tangible assets)	$	160,145		9.38	%	$	25,608		1.50	%	$	n/a		n/a	%
Tier 1 (core) capital (to adjusted total assets)		160,145		9.38			68,289		4.00			85,362		5.00
Tier 1 (core) capital (to risk-weighted assets)		160,145		22.44			28,551		4.00			42,827		6.00
Total risk based capital (to risk-weighted assets)		164,076		22.99			57,103		8.00			71,378		10.00

Regulations limit the amount of dividends and other capital distributions that may be paid by a financial institution without prior approval of its primary regulator. The regulatory restriction is based on a three-tiered system with the greatest flexibility being afforded to well-capitalized (Tier 1) institutions. The Bank is currently a Tier 1 institution. Accordingly, the Bank can make, without prior regulatory approval, distributions during a calendar year up to 100% of their retained net income for the calendar year-to-date plus retained net income for the previous two calendar years (less any dividends previously paid) as long as they remain well-capitalized, as defined in prompt corrective action regulations, following the proposed distribution. Accordingly, at September 30, 2014, approximately $45.0 million of the Bank’s retained earnings were potentially available for distribution to the Company.

On July 21, 2011, pursuant to the Dodd Frank Act, the OTS was integrated into the OCC and the functions of the OTS related to thrift holding companies were transferred to the Federal Reserve. The OCC is now responsible for the ongoing examination, supervision and regulation of the Bank, including matters with respect to the Consent Order against the Bank. The Dodd Frank Act maintains the existence of the federal savings association charter and the HOLA, the primary statute governing the federal savings banks. The Federal Reserve is now responsible for the ongoing examination, supervision and regulation of the Company, including matters with respect to the Consent Order against the Company. Prior to passage of the Dodd-Frank Act, the OTS had issued supervisory directives to the Bank, consent orders to the Bank and the Company, and had taken other regulatory action to require the Bank to reimburse certain consumers in connection with a credit program that was discontinued. All supervisory directives have been terminated, and on August 7, 2014 the OCC terminated the Bank’s Consent Order. The Consent Order against the Company is still in effect, although management believes its effect on the Company’s financial condition and results of operations has been and will continue to be immaterial. The Company anticipates (but cannot guarantee) that the order will be terminated in the first calendar quarter of 2015.

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NOTE 15. COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Bank makes various commitments to extend credit which are not reflected in the accompanying consolidated financial statements.

At September 30, 2014 and 2013, unfunded loan commitments approximated $96.0 million and $102.9 million respectively, excluding undisbursed portions of loans in process. Unfunded loan commitments at September 30, 2014 and 2013 were principally for variable rate loans. Commitments, which are disbursed subject to certain limitations, extend over various periods of time. Generally, unused commitments are canceled upon expiration of the commitment term as outlined in each individual contract.

The exposure to credit loss in the event of nonperformance by other parties to financial instruments for commitments to extend credit is represented by the contractual amount of those instruments. The same credit policies and collateral requirements are used in making commitments and conditional obligations as are used for on-balance-sheet instruments.

Since certain commitments to make loans and to fund lines of credit expire without being used, the amount does not necessarily represent future cash commitments. In addition, commitments used to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.

Securities with fair values of approximately $5.8 million and $5.6 million at September 30, 2014 and 2013, respectively, were pledged as collateral for public funds on deposit. There were no securities pledged as collateral for individual, trust and estate deposits at September 30, 2014. Securities with fair values of approximately $7.4 million at September 30, 2013, were pledged as collateral for individual, trust and estate deposits.

Legal Proceedings

The Bank was served on April 15, 2013, with a lawsuit captioned Inter National Bank v. NetSpend Corporation, MetaBank, BDO USA, LLP d/b/a BDO Seidman, Cause No. C-2084-12-I filed in the District Court of Hidalgo County, Texas. The Plaintiff’s Second Amended Original Petition and Application for Temporary Restraining Order and Temporary Injunction adds both MetaBank and BDO Seidman to the original causes of action against NetSpend. NetSpend acts as a prepaid card program manager and processor for both INB and MetaBank. According to the Petition, NetSpend has informed Inter National Bank (“INB”) that the depository accounts at INB for the NetSpend program supposedly contained $10.5 million less than they should. INB alleges that NetSpend has breached its fiduciary duty by making affirmative misrepresentations to INB about the safety and stability of the program, and by failing to timely disclose the nature and extent of any alleged shortfall in settlement of funds related to cardholder activity and the nature and extent of NetSpend’s systemic deficiencies in its accounting and settlement processing procedures. To the extent that an accounting reveals that there is an actual shortfall, INB alleges that MetaBank may be liable for portions or all of said sum due to the fact that funds have been transferred from INB to MetaBank, and thus MetaBank would have been unjustly enriched. The Bank is vigorously contesting this matter. In January 2014, NetSpend was granted summary judgment in this matter which is under appeal. Because the theory of liability against both NetSpend and the Bank is the same, the Bank views the NetSpend summary judgment as a positive in support of our position. An estimate of a range of reasonably possible loss cannot be made at this stage of the litigation because discovery is still being conducted.

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Certain corporate clients of an unrelated company named Springbok Services, Inc. (“Springbok”) requested through counsel a mediation as a means of reaching a settlement in lieu of commencing litigation against MetaBank. The results of that mediation have not led to a settlement. These claimants purchased MetaBank prepaid reward cards from Springbok, prior to Springbok’s bankruptcy. As a result of Springbok’s bankruptcy and cessation of business, some of the rewards cards which had been purchased were never activated or funded. Counsel for these companies have indicated that they are prepared to assert claims totaling approximately $1.5 million against MetaBank based on principal/agency or failure to supervise theories. The Company denies liability with respect to these claims. The Company’s estimate of a range of reasonably possible loss is approximately $0 to $0.3 million.

Other than the matters set forth above, there are no other new material pending legal proceedings or updates to which the Company or its subsidiaries is a party other than ordinary litigation routine to their respective businesses.

NOTE 16. LEASE COMMITMENTS

The Company has leased property under various non-cancelable operating lease agreements which expire at various times through 2036, and require annual rentals ranging from $3,400 to $789,000 plus the payment of the property taxes, normal maintenance, and insurance on certain property.

The following table shows the total minimum rental commitment at September 30, 2014, under the leases.

Year Ending September 30,
(Dollars in Thousands)

2015	$	1,218
2016		1,219
2017		1,225
2018		1,035
2019		986
Thereafter		13,135
Total Leases Commitments	$	18,818

NOTE 17. SEGMENT REPORTING

An operating segment is generally defined as a component of a business for which discrete financial information is available and whose results are reviewed by the chief operating decision-maker. Operating segments are aggregated into reportable segments if certain criteria are met. The Company has determined that it has two reportable segments. The first reportable segment, Retail Banking, consists of its banking subsidiary, the Bank. The Bank operates as a traditional community bank providing deposit, loan and other related products to individuals and small businesses, primarily in the communities where their offices are located. The second reportable segment, MPS, is a division of the Bank. MPS provides a number of products and services to financial institutions and other businesses. These products and services include issuance of prepaid debit cards, sponsorship of ATMs into the debit networks, credit programs, Automated Clearing House (“ACH”) origination services, gift card programs, rebate programs, travel programs, and tax related programs. The remaining grouping under the caption “All Others” consists of the operations of the Company and Meta Trust and inter-segment eliminations.

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Transactions between affiliates, the resulting revenues of which are shown in the intersegment revenue category, are conducted at market prices, meaning prices that would be paid if the companies were not affiliates.

	Retail Banking		Meta Payment Systems^®			All Others			Total
	Retail Banking		Meta Payment Systems^®			All Others			Total

Year Ended September 30, 2014
Interest income	$	31,635	$	17,025		$	-		$	48,660
Interest expense		1,926		124			348			2,398
Net interest income (expense)		29,709		16,901			(348	)		46,262
Provision (recovery) for loan losses		1,150		-			-			1,150
Non-interest income		3,214		48,524			-			51,738
Non-interest expense		21,227		56,234			770			78,231
Income (loss) before income tax expense (benefit)		10,546		9,191			(1,118	)		18,619
Income tax expense (benefit)		1,846		1,482			(422	)		2,906
Net income (loss)	$	8,700	$	7,709		$	(696	)	$	15,713

Inter-segment revenue (expense)	$	12,793	$	(12,793	)	$	-		$	-
Total assets		805,494		1,245,110			3,427			2,054,031
Total deposits		273,399		1,099,548			(6,406	)		1,366,541

	Retail Banking		Meta Payment Systems^®			All Others			Total
	Retail Banking		Meta Payment Systems^®			All Others			Total

Year Ended September 30, 2013
Interest income	$	24,169	$	14,807		$	-		$	38,976
Interest expense		2,361		124			469			2,954
Net interest income (expense)		21,808		14,683			(469	)		36,022
Provision (recovery) for loan losses		-		-			-			-
Non-interest income		5,226		50,290			(13	)		55,503
Non-interest expense		19,479		53,983			941			74,403
Income (loss) before income tax expense (benefit)		7,555		10,990			(1,423	)		17,122
Income tax expense (benefit)		1,615		2,611			(522	)		3,704
Net income (loss)	$	5,940	$	8,379		$	(901	)	$	13,418

Inter-segment revenue (expense)	$	12,106	$	(12,106	)	$	-		$	-
Total assets		487,754		1,201,531			2,704			1,691,989
Total deposits		260,525		1,063,770			(9,012	)		1,315,283

	Retail Banking		Meta Payment Systems^®			All Others			Total
	Retail Banking		Meta Payment Systems^®			All Others			Total

Year Ended September 30, 2012
Interest income	$	24,856	$	12,441		$	-		$	37,297
Interest expense		2,877		204			482			3,563
Net interest income (expense)		21,979		12,237			(482	)		33,734
Provision (recovery) for loan losses		1,050		(1	)		-			1,049
Non-interest income		16,592		52,957			25			69,574
Non-interest expense		20,569		54,686			208			75,463
Income (loss) before tax		16,952		10,509			(665	)		26,796
Income tax expense (benefit)		5,963		3,993			(274	)		9,682
Net income (loss)	$	10,989	$	6,516		$	(391	)	$	17,114

Inter-segment revenue (expense)	$	11,603	$	(11,603	)	$	-		$	-
Total assets		418,137		1,230,925			1,936			1,650,998
Total deposits		216,912		1,167,364			(4,482	)		1,379,794

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The following tables present gross profit data for MPS for the years ended September 30, 2014, 2013 and 2012, respectively.

Year Ended September 30,	2014		2013		2012

Interest income	$	17,025	$	14,807	$	12,441
Interest expense		124		124		204
Net interest income		16,901		14,683		12,237

Provision (recovery) for loan losses		-		-		(1	)
Non-interest income		48,524		50,290		52,957
Card processing expense		15,457		15,546		17,323
Gross Profit		49,968		49,427		47,872

Other non-interest expense		40,777		38,437		37,363

Income (loss) before income tax expense (benefit)		9,191		10,990		10,509
Income tax expense		1,482		2,611		3,993
Net Income	$	7,709	$	8,379	$	6,516

NOTE 18. PARENT COMPANY FINANCIAL STATEMENTS

Presented below are condensed financial statements for the parent company, Meta Financial.

CONDENSED STATEMENTS OF FINANCIAL CONDITION

September 30,	2014			2013
	(Dollars in Thousands)
ASSETS
Cash and cash equivalents	$	9,439		$	11,386
Investment in subsidiaries		175,568			142,199
Other assets		393			329
Total assets	$	185,400		$	153,914

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Subordinated debentures	$	10,310		$	10,310
Other liabilities		288			620
Total liabilities	$	10,598		$	10,930

STOCKHOLDERS' EQUITY
Common stock		62			61
Additional paid-in capital		95,079			92,963
Retained earnings		83,797			71,268
Accumulated other comprehensive income (loss)		(3,409	)		(20,285	)
Treasury stock, at cost		(727	)		(1,023	)
Total stockholders' equity	$	174,802		$	142,984
Total liabilities and stockholders' equity	$	185,400		$	153,914

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CONDENSED STATEMENTS OF OPERATIONS

Years ended September 30,	2014			2013			2012
	(Dollars in Thousands)
Total other income	$	-		$	-		$	25

Interest expense		348			469			482
Other expense		770			941			209
Total expense		1,118			1,410			691

Loss before income taxes and equity in undistributed net income of subsidiaries		(1,118	)		(1,410	)		(666	)

Income tax benefit		(422	)		(509	)		(275	)

Loss before equity in undistributed net income of subsidiaries		(696	)		(901	)		(391	)

Equity in undistributed net income of subsidiaries		16,409			14,319			17,505

Net income	$	15,713		$	13,418		$	17,114

CONDENSED STATEMENTS OF CASH FLOWS

For the Years Ended September 30,	2014			2013			2012
	(Dollars in Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	15,713		$	13,418		$	17,114
Adjustments to reconcile net income to net cash provided by (used in) operating activites
Depreciation, amortization and accretion, net		(310	)		-			-
Equity in undistributed net income of subsidiaries		(16,409	)		(14,319	)		(17,505	)
Change in other assets		246			54			498
Change in other liabilities		(332	)		(339	)		865
Net cash provided by (used in) operating activities		(1,092	)		(1,186	)		972

CASH FLOWS FROM INVESTING ACTIVITES
Capital contributions to subsidiaries		-			(6,000	)		(42,482	)
Net cash provided by (used in)investing activites		-			(6,000	)		(42,482	)

CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid		(3,184	)		(2,926	)		(1,832	)
Stock compensation		4			165			27
Proceeds from issuance of common stock		(51	)		12,718			47,796
Proceeds from exercise of stock options		2,376			2,548			-
Other, net		-			(38	)		-
Net cash provided by (used in) financing activities		(855	)		12,467			45,991

Net change in cash and cash equivalents	$	(1,947	)	$	5,281		$	4,481

CASH AND CASH EQUIVALENTS
Beginning of year	$	11,386		$	6,105		$	1,624
End of year	$	9,439		$	11,386		$	6,105

The extent to which the Company may pay cash dividends to stockholders will depend on the cash currently available at the Company, as well as the ability of the Bank to pay dividends to the Company. For further discussion, see Note 14 herein.

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NOTE 19. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

	QUARTER ENDED
	December 31		March 31			June 30		September 30
	(Dollars in Thousands)

Fiscal Year 2014
Interest income	$	11,162	$	12,063		$	12,566	$	12,869
Interest expense		649		544			638		567
Net interest income		10,513		11,519			11,928		12,302
Provision (recovery) for loan losses		-		300			300		550
Net Income (loss)		4,002		4,144			4,204		3,363
Earnings (loss) per common and common equivalent share
Basic	$	0.66	$	0.68		$	0.69	$	0.54
Diluted		0.65		0.67			0.68		0.53
Dividend declared per share		0.13		0.13			0.13		0.13

Fiscal Year 2013
Interest income	$	9,630	$	9,718		$	9,825	$	9,803
Interest expense		833		813			666		642
Net interest income		8,797		8,905			9,159		9,161
Provision (recovery) for loan losses		-		(300	)		-		300
Net Income (loss)		3,125		3,147			3,672		3,474
Earnings (loss) per common and common equivalent share
Basic	$	0.57	$	0.57		$	0.67	$	0.59
Diluted		0.57		0.57			0.66		0.58
Dividend declared per share		0.13		0.13			0.13		0.13

Fiscal Year 2012
Interest income	$	9,615	$	10,299		$	9,149	$	8,234
Interest expense		977		888			857		841
Net interest income		8,638		9,411			8,292		7,393
Provision (recovery) for loan losses		699		200			150		-
Net Income (loss)		3,091		9,970			2,387		1,666
Earnings (loss) per common and common equivalent share
Basic	$	0.97	$	3.12		$	0.67	$	0.18
Diluted		0.97		3.10			0.66		0.19
Dividend declared per share		0.13		0.13			0.13		0.13

NOTE 20. FAIR VALUES OF FINANCIAL INSTRUMENTS

ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring the fair value of assets and liabilities using a hierarchy system and requires disclosures about fair value measurement. It clarifies that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts.

The fair value hierarchy is as follows:

Level 1 Inputs – Valuation is based upon quoted prices for identical instruments traded in active markets that the Company has the ability to access at measurement date.

Level 2 Inputs – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which significant assumptions are observable in the market.

Level 3 Inputs – Valuation is generated from model-based techniques that use significant assumptions not observable in the market and are used only to the extent that observable inputs are not available. These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

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There were no transfers between levels of the fair value hierarchy for the years ended September 30, 2014 and 2013.

Securities Available for Sale and Held to Maturity. Securities available for sale are recorded at fair value on a recurring basis and securities held to maturity are carried at amortized cost. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using an independent pricing service. For both Level 1 and Level 2 securities, management uses various methods and techniques to corroborate prices obtained from the pricing service, including but not limited to reference to dealer or other market quotes, and by reviewing valuations of comparable instruments. The Company’s Level 1 securities include equity securities and mutual funds. The Company’s Level 2 securities include U.S. Government agency and instrumentality securities, U.S. Government agency and instrumentality mortgage-backed securities, municipal bonds, corporate debt securities and trust preferred securities. The Company had no Level 3 securities at September 30, 2014 and had no Level 1 or Level 3 securities at September 30, 2013.

The fair values of securities are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs), or valuation based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model based valuation techniques for which significant assumptions are observable in the market (Level 2 inputs). The Company considers these valuations supplied by a third party provider which utilizes several sources for valuing fixed-income securities. These sources include Interactive Data Corporation, Reuters, Standard and Poor’s, Bloomberg Financial Markets, Street Software Technology, and the third party provider’s own matrix and desk pricing. The Company, no less than annually, reviews the third party’s methods and source’s methodology for reasonableness and to ensure an understanding of inputs utilized in determining fair value. Sources utilized by the third party provider include but are not limited to pricing models that vary based by asset class and include available trade, bid, and other market information. This methodology includes but is not limited to broker quotes, proprietary models, descriptive terms and conditions databases, as well as extensive quality control programs. Monthly, the Company receives and compares prices provided by multiple securities dealers and pricing providers to validate the accuracy and reasonableness of prices received from the third party provider. On a monthly basis, the Investment Committee reviews mark-to-market changes in the securities portfolio for reasonableness.

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The following table summarizes the fair values of securities available for sale and held to maturity at September 30, 2014 and 2013. Securities available for sale are measured at fair value on a recurring basis, while securities held to maturity are carried at amortized cost in the consolidated statements of financial condition.

	Fair Value at Sepember 30, 2014
	Available For Sale								Held to Maturity
(Dollars in Thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Debt securities
Trust preferred and corporate securities	$	46,929	$	-	$	46,929	$	-	$	-	$	-	$	-	$	-
Small business administration securities		67,012		-		67,012		-		-		-		-		-
Obligations of states and political subdivisions		-		-		-		-		18,980		-		18,980		-
Non-bank qualified obligations of states and political subdivisions		367,580		-		367,580		-		192,160		-		192,160		-
Mortgage-backed securities		657,870		-		657,870		-		68,172		-		68,172		-
Total debt securities		1,139,391		-		1,139,391		-		279,312		-		279,312		-
Common equities and mutual funds		825		825		-		-		-		-		-		-
Total securities	$	1,140,216	$	825	$	1,139,391	$	-	$	279,312	$	-	$	279,312	$	-

	Fair Value at September 30, 2013
	Available For Sale								Held to Maturity
(Dollars in Thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Debt securities
Trust preferred and corporate securities	$	48,784	$	-	$	48,784	$	-	$	-	$	-	$	-	$	-
Agency and instrumentality securities		-		-		-		-		9,613		-		9,613		-
Small business administration securities		10,581		-		10,581		-		-		-		-		-
Obligations of states and political subdivisions		1,727		-		1,727		-		18,342		-		18,342		-
Non-bank qualified obligations of states and political subdivisions		238,729		-		238,729		-		169,462		-		169,462		-
Mortgage-backed securities		581,372		-		581,372		-		73,101		-		73,101		-
Total securities	$	881,193	$	-	$	881,193	$	-	$	270,518	$	-	$	270,518	$	-

Foreclosed Real Estate and Repossessed Assets. Real estate properties and repossessed assets are initially recorded at the fair value less selling costs at the date of foreclosure, establishing a new cost basis. The carrying amount at September 30, 2014 and 2013 represent the lower of the new cost basis or the fair value less selling costs of foreclosed assets that were measured at fair value subsequent to their initial classification as foreclosed assets.

Loans. The Company does not record loans at fair value on a recurring basis. However, if a loan is considered impaired, an allowance for loan losses is established. Once a loan is identified as individually impaired, management measures impairment in accordance with ASC 310, Receivables.

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The following table summarizes the assets of the Company that are measured at fair value in the consolidated statements of financial condition on a non-recurring basis as of September 30, 2014 and 2013.

	Fair Value at September 30, 2014
(Dollars in Thousands)	Total		Level 1		Level 2		Level 3

Impaired Loans, net
1-4 Family Real Estate	$	222	$	-	$	-	$	222
Commercial and Multi-Family Real Estate		930		-		-		930
Total Impaired Loans		1,152		-		-		1,152
Foreclosed Assets, net		15		-		-		15
Total	$	1,167	$	-	$	-	$	1,167

	Fair Value at September 30, 2013
(Dollars in Thousands)	Total		Level 1		Level 2		Level 3

Impaired Loans, net
1-4 Family Real Estate	$	257	$	-	$	-	$	257
Commercial and Multi-Family Real Estate		1,810		-		-		1,810
Total Impaired Loans		2,067		-		-		2,067
Foreclosed Assets, net		116		-		-		116
Total	$	2,183	$	-	$	-	$	2,183

	Quantitative Information About Level 3 Fair Value Measurements
(Dollars in Thousands)	Fair Value at September 30, 2014		Fair Value at September 30, 2013		Valuation Technique	Unobservable Input

Impaired Loans, net	$	1,152	$	2,067	Market approach	Appraised values ⁽¹⁾
Foreclosed Assets, net		15		116	Market approach	Appraised values ⁽¹⁾

⁽¹⁾	The Company generally relies on external appraisers to develop this information. Management reduced the appraised value by estimated selling costs in a range of 4% to 10%.

The following table discloses the Company’s estimated fair value amounts of its financial instruments. It is management’s belief that the fair values presented below are reasonable based on the valuation techniques and data available to the Company as of September 30, 2014 and 2013, as more fully described below. The operations of the Company are managed from a going concern basis and not a liquidation basis. As a result, the ultimate value realized for the financial instruments presented could be substantially different when actually recognized over time through the normal course of operations. Additionally, a substantial portion of the Company’s inherent value is the Bank’s capitalization and franchise value. Neither of these components have been given consideration in the presentation of fair values below.

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The following presents the carrying amount and estimated fair value of the financial instruments held by the Company at September 30, 2014 and 2013.

	September 30, 2014
	Carrying Amount		Estimated Fair Value
	Carrying Amount		Estimated Fair Value		Level 1		Level 2		Level 3
	(Dollars in Thousands)
Financial assets
Cash and cash equivalents	$	29,832	$	29,832	$	29,832	$	-	$	-
Securities available for sale		1,140,216		1,140,216		825		1,139,391		-
Securities held to maturity		282,933		279,312		-		279,312		-
Loans receivable:
One to four family residential mortgage loans		116,395		111,254		-		-		111,254
Commercial and multi-family real estate loans		224,302		234,845		-		-		234,845
Agricultural real estate loans		56,071		58,651		-		-		58,651
Consumer loans		29,329		29,580		-		-		29,580
Commercial operating loans		30,846		25,660		-		-		25,660
Agricultural operating loans		42,258		44,398		-		-		44,398
Total loans receivable		499,201		504,388		-		-		504,388

FHLB stock		21,245		21,245		-		21,245		-
Accrued interest receivable		11,222		11,222		11,222		-		-

Financial liabilities
Noninterest bearing demand deposits		1,126,715		1,126,715		1,126,715		-		-
Interest bearing demand deposits, savings, and money markets		105,273		105,273		105,273		-		-
Certificates of deposit		134,553		134,746		-		134,746		-
Total deposits		1,366,541		1,366,734		1,231,988		134,746		-

Advances from FHLB		7,000		8,789		-		8,789		-
Federal funds purchased		470,000		470,000		-		470,000		-
Securities sold under agreements to repurchase		10,411		10,414		-		10,414		-
Subordinated debentures		10,310		10,415		-		10,415		-
Accrued interest payable		318		318		318		-		-

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	September 30, 2013
	Carrying Amount		Estimated Fair Value
	Carrying Amount		Estimated Fair Value		Level 1		Level 2		Level 3
	(Dollars in Thousands)
Financial assets
Cash and cash equivalents	$	40,063	$	40,063	$	40,063	$	-	$	-
Securities available for sale		881,193		881,193		-		881,193		-
Securities held to maturity		288,026		270,518		-		270,518		-
Loans receivable:
One to four family residential mortgage loans		82,287		72,628		-		-		72,628
Commercial and multi-family real estate loans		192,786		200,778		-		-		200,778
Agricultural real estate loans		29,552		30,920		-		-		30,920
Consumer loans		30,314		30,588		-		-		30,588
Commercial operating loans		16,264		15,718		-		-		15,718
Agricultural operating loans		33,750		35,175		-		-		35,175
Total loans receivable		384,953		385,807		-		-		385,807

FHLB stock		9,994		9,994		-		9,994		-
Accrued interest receivable		8,582		8,582		8,582		-		-

Financial liabilities
Noninterest bearing demand deposits		1,086,258		1,086,258		1,086,258		-		-
Interest bearing demand deposits, savings, and money markets		97,426		97,426		97,426		-		-
Certificates of deposit		131,599		132,187		-		132,187		-
Total deposits		1,315,283		1,315,871		1,183,684		132,187		-

Advances from FHLB		7,000		9,089		-		9,089		-
Federal funds purchased		190,000		190,000		-		190,001		-
Securities sold under agreements to repurchase		9,146		9,146		-		9,148		-
Subordinated debentures		10,310		10,312		-		10,312		-
Accrued interest payable		291		291		291		-		-

The following sets forth the methods and assumptions used in determining the fair value estimates for the Company’s financial instruments at September 30, 2014 and 2013.

CASH AND CASH EQUIVALENTS

The carrying amount of cash and short-term investments is assumed to approximate the fair value.

SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY

Securities available for sale are recorded at fair value on a recurring basis and securities held to maturity are carried at amortized cost. Fair values for investment securities are based on obtaining quoted prices on nationally recognized securities exchanges, or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities.

LOANS RECEIVABLE, NET

The fair value of loans is estimated using a historical or replacement cost basis concept (i.e. an entrance price concept). The fair value of loans was estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers and for similar remaining maturities. When using the discounting method to determine fair value, loans were grouped by homogeneous loans with similar terms and conditions and discounted at a target rate at which similar loans would be made to borrowers at September 30, 2014 and 2013. In addition, when computing the estimated fair value for all loans, allowances for loan losses have been subtracted from the calculated fair value as a result of the discounted cash flow which approximates the fair value adjustment for the credit quality component.

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FHLB STOCK

The fair value of such stock is assumed to approximate book value since the Company is generally able to redeem this stock at par value.

ACCRUED INTEREST RECEIVABLE

The carrying amount of accrued interest receivable is assumed to approximate the fair value.

DEPOSITS

The carrying values of non-interest bearing checking deposits, interest bearing checking deposits, savings, and money markets is assumed to approximate fair value, since such deposits are immediately withdrawable without penalty. The fair value of time certificates of deposit was estimated by discounting expected future cash flows by the current rates offered on certificates of deposit with similar remaining maturities.

In accordance with ASC 825, Financial Instruments, no value has been assigned to the Company’s long-term relationships with its deposit customers (core value of deposits intangible) since such intangible is not a financial instrument as defined under ASC 825.

ADVANCES FROM FHLB

The fair value of such advances was estimated by discounting the expected future cash flows using current interest rates for advances with similar terms and remaining maturities.

FEDERAL FUNDS PURCHASED

The carrying amount of federal funds purchased is assumed to approximate the fair value.

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND SUBORDINATED DEBENTURES

The fair value of these instruments was estimated by discounting the expected future cash flows using derived interest rates approximating market over the contractual maturity of such borrowings.

ACCRUED INTEREST PAYABLE

The carrying amount of accrued interest payable is assumed to approximate the fair value.

LIMITATIONS

It must be noted that fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument. Additionally, fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business, customer relationships and the value of assets and liabilities that are not considered financial instruments. These estimates do not reflect any premium or discount that could result from offering the Company’s entire holdings of a particular financial instrument for sale at one time. Furthermore, since no market exists for certain of the Company’s financial instruments, fair value estimates may be based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with a high level of precision. Changes in assumptions as well as tax considerations could significantly affect the estimates. Accordingly, based on the limitations described above, the aggregate fair value estimates are not intended to represent the underlying value of the Company, on either a going concern or a liquidation basis.

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NOTE 21. INTANGIBLE ASSETS

The changes in the carrying amount of the Company’s intangible assets for the years ended September 30, 2014 and 2013 are as follows:

	Meta Payment Systems^® Patents			Meta Payment Systems^® Other		Total



Balance as of September 30, 2013	$	2,339		$	-	$	2,339
Acquisitions during the period		331			-		331
Amortization during the period		(78	)		-		(78	)
Write-offs during the period		(4	)		-		(4	)
Balance as of September 30, 2014	$	2,588		$	-	$	2,588

	Meta Payment Systems^® Patents			Meta Payment Systems^® Other			Total



Balance as of September 30, 2012	$	2,026		$	9		$	2,035
Acquisitions during the period		363			-			363
Amortization during the period		(50	)		(9	)		(59	)
Write-offs during the period		-			-			-
Balance as of September 30, 2013	$	2,339		$	-		$	2,339

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The anticipated future amortization of intangibles is as follows:

	Meta Payment Systems^® Patents		Meta Payment Systems^® Other		Total


Year Ending September 30,

2015	$	91	$	-	$	91
2016		91		-		91
2017		91		-		91
2018		91		-		91
2019		91		-		91
Thereafter		2,133		-		2,133
Total anticipated intangible amortization	$	2,588	$	-	$	2,588

The Company tests intangible assets for impairment at least annually or more often if conditions indicate a possible impairment.

NOTE 22. SUBSEQUENT EVENTS

On December 2, 2014, the Company, via its bank subsidiary, MetaBank, completed the previously announced acquisition of substantially all of the commercial loan portfolio and related assets of AFS/IBEX Financial Services, Inc. (“AFS”) and has hired the AFS team. The acquisition, which was announced on October 14, 2014, was concluded following satisfaction of certain closing conditions, including regulatory approvals. The all-cash transaction includes the AFS operating platform, other assets, and approximately $77 million of outstanding insurance premium finance loan receivables. Upon closing, MetaBank created a new operating division, AFS/IBEX, which will continue to serve businesses and insurance agencies nationwide with commercial insurance premium financing. AFS/IBEX will be headquartered in Dallas, TX, with a full service office in Southern California.

Management has evaluated subsequent events. There were no material subsequent events that would require recognition or disclosure, other than noted above, in our consolidated financial statements as of and for the year ended September 30, 2014.

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A.

Controls and Procedures

(a)	Evaluation of Disclosure Controls and Procedures.

Management, under the direction of its Chief Executive Officer and Chief Financial Officer, is responsible for maintaining disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “1934 Act”) that are designed to ensure that information required to be disclosed in reports filed or submitted under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

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In connection with the preparation of this Annual Report on Form 10-K, management evaluated the Company’s disclosure controls and procedures. The evaluation was performed under the direction of the Company’s Chief Executive Officer and Chief Financial Officer to determine the effectiveness, as of September 30, 2014, of the design and operation of the Company’s disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective in timely alerting them to the material information relating to the Company required to be included in the Company’s periodic SEC filings. In addition, no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fourth quarter of our fiscal year ended September 30, 2014, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

(b)	Management’s Annual Report on Internal Control over Financial Reporting.

The Company’s management is responsible for establishing and maintaining effective internal control over financial reporting. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company assets that could have a material effect on the financial statements.

Internal control over financial reporting, no matter how well designed, has inherent limitations. Because of such inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2014, based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control-Integrated Framework (1992).” After conducting the assessment, management determined that, as of September 30, 2014, the Company’s internal control over financial reporting is effective, based on those criteria.

The effectiveness of the Company’s internal control over financial reporting as of September 30, 2014, has been audited by KPMG LLP, the independent registered public accounting firm who also has audited the Company’s consolidated financial statements included in this Annual Report on Form 10-K. KPMG LLP’s report on the Company’s internal control over financial reporting appears below.

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(c)	Changes in Internal Control over Financial Reporting.

There were no changes in the Company's internal control over financial reporting that occurred during the fourth quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Item 9B.

Other Information

None.

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KPMG LLP

2500 Ruan Center

666 Grand Avenue

Des Moines, IA 50309

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Meta Financial Group, Inc.:

We have audited Meta Financial Group, Inc.’s (the Company) internal control over financial reporting as of September 30, 2014, based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Meta Financial Group, Inc. maintained, in all material respects, effective internal control over financial reporting as of September 30, 2014, based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial condition of Meta Financial Group, Inc. and subsidiaries as of September 30, 2014 and 2013, and the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended September 30, 2014, and our report dated December 12, 2014 expressed an unqualified opinion on those consolidated financial statements.

	/s/ KPMG LLP

Des Moines, Iowa
December 12, 2014

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PART III

Item 10.

Directors, Executive Officers and Corporate Governance

Directors

Information concerning directors of the Company required by this item will be included under the captions “Election of Directors,” “Communicating with Our Directors” and “Stockholder Proposals For The Year 2014 Annual Meeting” in the Company’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held on January 26, 2015 (the “2014 Proxy Statement”), a copy of which will be filed not later than 120 days after September 30, 2014, and is incorporated herein by reference.

Executive Officers

Information concerning the executive officers of the Company required by this item is set forth under the caption “Executive Officers of the Company Who Are Not Directors” contained in Part I, Item 1 “Business” of this Annual Report on Form 10-K and is incorporated herein by reference.

Compliance with Section 16(a)

Information required by this item regarding compliance with Section 16(a) of the Exchange Act will be included under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s 2014 Proxy Statement and is incorporated herein by reference.

Audit Committee Financial Expert

Information regarding the audit committee of the Company’s Board of Directors, including information regarding Jeanne Partlow, the audit committee financial expert serving on the audit committee for fiscal 2014 will be included under the captions “Meetings and Committees” and “Election of Directors” in the Company’s 2014 Proxy Statement and is incorporated herein by reference.

Code of Ethics

Information regarding the Company’s Code of Ethics will be included under the caption “Corporate Governance” in the Company’s 2014 Proxy Statement and is incorporated herein by reference.

Item 11.

Executive Compensation

Information concerning executive and director compensation will be included under the captions “Compensation Processes and Procedures,” “Compensation of Directors” and “Executive Compensation” in the Company’s 2014 Proxy Statement and is incorporated herein by reference.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

(a)

Security Ownership of Certain Beneficial Owners and Management

The information required by this item will be included under the caption “Stock Ownership” in the Company’s 2014 Proxy Statement and is incorporated herein by reference.

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(b)

Changes in Control

Management of the Company knows of no arrangements, including any pledge by any persons of securities of the Company, the operation of which may, at a subsequent date; result in a change in control of the Registrant.

(c)

Equity Compensation Plan Information

The Company maintains the 2002 Omnibus Incentive Plan for purposes of issuing stock based compensation to employees and directors. An amendment to this plan, authorizing an additional 750,000 shares to be issued under this plan, was approved by the Board of Directors on November 30, 2007, and by the stockholders at the annual meeting held February 12, 2008. The Company also has unexercised options outstanding under a previous stock option plan. The following table provides information about the Company’s common stock that may be issued under the Company’s omnibus incentive plans.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plan excluding securities reflected in (a)

Equity compensation plans approved by stockholders		235,766	$	25.20		562,657

Equity compensation plans not approved by stockholders		-	$	-		-

Item 13.

Certain Relationships and Related Transactions, and Director Independence

The information required by this item will be included under the captions “Election of Directors,” “Meetings and Committees” and “Related Person Transactions” in the Company’s 2014 Proxy Statement and is incorporated herein by reference.

Item 14.

Principal Accountant Fees and Services

The information required by this item will be included under the caption “Independent Registered Public Accounting Firm” in the Company’s 2014 Proxy Statement and is incorporated herein by reference.

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PART IV

Item 15.

Exhibits and Financial Statement Schedules

The following is a list of documents filed as Part of this report:

(a)

Financial Statements:

The following financial statements are included under Part II, Item 8 of this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm.

Consolidated Statements of Financial Condition as of September 30, 2014 and 2013.

Consolidated Statements of Operations for the Years Ended September 30, 2014, 2013, and 2012.

Consolidated Statements of Comprehensive Income (Loss) for the Years ended September 30, 2014, 2013, and 2012.

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended September 30, 2014, 2013, and 2012.

Consolidated Statements of Cash Flows for the Years Ended September 30, 2014, 2013, and 2012.

Notes to Consolidated Financial Statements.

(b)

Exhibits:

See Index to Exhibits.

(c)

Financial Statement Schedules:

All financial statement schedules have been omitted as the information is not required under the related instructions or is inapplicable.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	META FINANCIAL GROUP, INC.

Date: December 12, 2014	By:	/s/ J. Tyler Haahr
		J. Tyler Haahr, Chairman of the Board
		and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:	/s/ J. Tyler Haahr	Date: December 12, 2014
	J. Tyler Haahr, Chairman of the Board
	and Chief Executive Officer
	(Principal Executive Officer)

By:	/s/ Bradley C. Hanson	Date: December 12, 2014
	Bradley C. Hanson, President and Director

By:	/s/ Douglas J. Hajek	Date: December 12, 2014
	Douglas J. Hajek, Director

By:	/s/ Elizabeth G. Hoople	Date: December 12, 2014
	Elizabeth G. Hoople, Director

By:	/s/ Frederick V. Moore	Date: December 12, 2014
	Frederick V. Moore, Director

By:	/s/ Troy Moore III	Date: December 12, 2014
	Troy Moore III, Director

By:	/s/ Rodney G. Muilenburg	Date: December 12, 2014
	Rodney G. Muilenburg, Director

By:	/s/ Jeanne Partlow	Date: December 12, 2014
	Jeanne Partlow, Director

By:	/s/ Glen W. Herrick	Date: December 12, 2014
	Glen W. Herrick, Executive Vice
	President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

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INDEX TO EXHIBITS

Exhibit Number	Description

3(i)	Registrant’s Certificate of Incorporation, as amended, filed on May 10, 2013, as an exhibit to the Registrant’s registration statement on Form S-3 (Commission File No. 333-188535), is incorporated herein by reference.

3(ii)	Registrant’s Amended and Restated By-laws, as amended, filed on December 16, 2013 as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013 (Commission File No. 0-22140), is incorporated herein by reference.

4.1	Registrant’s Specimen Stock Certificate, filed on February 19, 2010 as an exhibit to the Registrant’s registration statement on Form S-3 (Commission File No. 333-164997), is incorporated herein by reference.

4.2	Sales Agency Agreement, dated June 10, 2013, among Meta Financial Group, Inc., MetaBank and Sandler O’Neill & Partners, L.P. filed on June 10, 2013, as an exhibit to the Registrant’s Current Report on Form 8-K (Commission File No. 0-22140), is incorporated herein by reference.

110.1	Registrant’s 1995 Stock Option and Incentive Plan, filed as an exhibit to the Registrant’s Annual Report on Form 10-KSB for the fiscal year ended September 30, 1996 (Commission File No. 0-22140), is incorporated herein by reference.

*10.2	Employment Agreement between MetaBank and J. Tyler Haahr, originally filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 1997 (Commission File No. 0-22140), is incorporated herein by reference. First amendment to such agreement, filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008 (Commission File No. 0-22140), is incorporated herein by reference.

*10.3	Registrant’s Supplemental Employees’ Investment Plan, originally filed as an exhibit to the Registrant’s Annual Report on Form 10-KSB for the fiscal year ended September 30, 1994 (Commission File No. 0-22140). First amendment to such agreement, filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008 (Commission File No. 0-22140), is incorporated herein by reference.

*10.5	Registrant’s 2002 Omnibus Incentive Plan, filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2003 (Commission File No. 0-22140), is incorporated herein by reference.

¹ Management Contract or Compensatory Plan or Agreement

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*10.6	Employment Agreement between MetaBank and Bradley C. Hanson, originally filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2005 (Commission File No. 0-22140). First amendment to such agreement, filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008 (Commission File No. 0-22140), is incorporated herein by reference.

*10.7	Employment Agreement between MetaBank and Troy Moore III, originally filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2005 (Commission File No. 0-22140). First amendment to such agreement, filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008 (Commission File No. 0-22140), is incorporated herein by reference.

*10.8	The First Amendment to Registrant’s 2002 Omnibus Incentive Plan, adopted by the Registrant on August 28, 2006, and filed on December 19, 2006 as Exhibit A to the Registrant’s Schedule 14A (DEF 14A) Proxy Statement (Commission File No. 0‑22140), is incorporated by reference.

*10.9	The Second Amendment to Registrant’s 2002 Omnibus Incentive Plan, adopted by the Registrant on November 30, 2007, and filed on January 3, 2008 as Exhibit A to the Registrant’s Schedule 14A (DEF 14A) Proxy Statement (Commission File No. 0‑22140), is incorporated by reference.

*10.10	Employment Agreement between MetaBank and David W. Leedom, dated October 27, 2008 filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008 (Commission File No. 0-22140), is incorporated herein by reference.

*10.11	Amended and Restated Contract for Deferred Compensation between MetaBank and James S. Haahr, dated September 27, 2005, and the first amendment thereto filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008, is incorporated herein by reference.

*10.12	Consulting Services Agreement between the Registrant and James S. Haahr, dated October 10, 2011 and effective as of October 1, 2011, filed on October 12, 2011 as an exhibit to the Registrant’s Current Report on Form 8-K (Commission File No. 0‑22140), is incorporated herein by reference.

11	Statement re: computation of per share earnings (See Note 2 of “Notes to Consolidated Financial Statements,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K).

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21	Subsidiaries of the Registrant is filed herewith.

23.1	Consent of Independent Registered Public Accounting Firm is filed herewith.

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002 is filed herewith.

31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002 is filed herewith.

32.1	Certification of the CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is filed herewith.

32.2	Certification of the CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is filed herewith.

101.INS	Instance Document Filed Herewith.

101.SCH	XBRL Taxonomy Extension Schema Document Filed Herewith.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document Filed Herewith.

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document Filed Herewith.

101.LAB	XBRL Taxonomy Extension Label Linkbase Document Filed Herewith.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document Filed Herewith.

Delaware		42‑1406262
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
5501 South Broadband Lane, Sioux Falls, SD		57108
(Address of principal executive offices)		(Zip Code)

Title of Class		Name of each exchange on which registered
Common Stock, par value $0.01 per share		NASDAQ Global Market

	At September 30,
	2014					2013					2012					2011					2010
	Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent
	(Dollars in Thousands)

Real Estate Loans:
1-4 Family	$	116,395		23.3	%	$	82,287		21.4	%	$	49,134		14.9	%	$	34,128		10.7	%	$	40,454		10.9	%
Commercial & Multi-Family		224,302		44.9	%		192,786		50.1	%		191,905		57.9	%		194,414		60.9	%		204,820		55.1	%
Agricultural		56,071		11.3	%		29,552		7.7	%		19,861		6.0	%		20,320		6.4	%		25,895		7.0	%
Total Real Estate Loans		396,768		79.5	%		304,625		79.2	%		260,900		78.8	%		248,862		78.0	%		271,169		73.0	%

Other Loans:
Consumer Loans:
Home Equity		15,116		3.0	%		13,799		3.6	%		13,299		4.0	%		14,835		4.6	%		16,897		4.5	%
Automobile		671		0.1	%		658		0.1	%		792		0.2	%		794		0.2	%		737		0.2	%
Other (1)		13,542		2.7	%		15,857		4.1	%		18,747		5.7	%		18,769		5.9	%		30,479		8.2	%
Total Consumer Loans		29,329		5.8	%		30,314		7.8	%		32,838		9.9	%		34,398		10.7	%		48,113		12.9	%

Agricultural Operating		42,258		8.5	%		33,750		8.8	%		20,981		6.3	%		21,200		6.6	%		32,528		8.8	%
Commercial Operating		30,846		6.2	%		16,264		4.2	%		16,452		5.0	%		14,955		4.7	%		19,709		5.3	%

Total Other Loans		102,433		20.5	%		80,328		20.8	%		70,271		21.2	%		70,553		22.0	%		100,350		27.0	%
Total Loans		499,201		100.0	%		384,953		100.0	%		331,171		100.0	%		319,415		100.0	%		371,519		100.0	%

Less:
Deferred Fees and Discounts		797					595					219					79					240
Allowance for Loan Losses		5,397					3,930					3,971					4,926					5,234

Total Loans Receivable, Net	$	493,007				$	380,428				$	326,981				$	314,410				$	366,045

	September 30,
	2014					2013					2012					2011					2010
	Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent
	(Dollars in Thousands)

Fixed Rate Loans:
Real Estate:
1-4 Family	$	105,870		21.2	%	$	75,477		19.6	%	$	44,045		13.3	%	$	30,410		9.5	%	$	34,513		9.3	%
Commercial & Multi-Family		203,840		40.8	%		173,373		45.1	%		162,552		49.1	%		155,786		48.8	%		163,843		44.0	%
Agricultural		49,643		10.0	%		22,433		5.8	%		15,399		4.6	%		16,416		5.1	%		16,937		4.6	%
Total Fixed-Rate Real Estate Loans		359,353		72.0	%		271,283		70.5	%		221,996		67.0	%		202,612		63.4	%		215,293		57.9	%
Consumer		19,279		3.9	%		20,129		5.2	%		20,322		6.1	%		15,494		4.9	%		19,066		5.1	%
Agricultural Operating		24,991		5.0	%		23,137		6.0	%		10,627		3.2	%		12,570		3.9	%		22,490		6.0	%
Commercial Operating		13,659		2.7	%		8,070		2.1	%		6,818		2.1	%		7,138		2.3	%		11,147		3.1	%
Total Fixed-Rate Loans		417,282		83.6	%		322,619		83.8	%		259,763		78.4	%		237,814		74.5	%		267,996		72.1	%

Adjustable Rate Loans:
Real Estate:
1-4 Family		10,525		2.1	%		6,810		1.8	%		5,089		1.5	%		3,718		1.2	%		5,941		1.6	%
Commercial & Multi-Family		20,461		4.1	%		19,413		5.0	%		29,353		8.9	%		38,628		12.1	%		40,977		11.0	%
Agricultural		6,429		1.3	%		7,119		1.9	%		4,462		1.4	%		3,904		1.2	%		8,958		2.5	%
Total Adjustable Real Estate Loans		37,415		7.5	%		33,342		8.7	%		38,904		11.8	%		46,250		14.5	%		55,876		15.1	%
Consumer		10,050		2.0	%		10,185		2.6	%		12,516		3.8	%		18,904		5.9	%		29,047		7.8	%
Agricultural Operating		17,267		3.5	%		10,613		2.8	%		10,354		3.1	%		8,630		2.7	%		10,038		2.7	%
Commercial Operating		17,187		3.4	%		8,194		2.1	%		9,634		2.9	%		7,817		2.4	%		8,562		2.3	%
Total Adjustable Loans		81,919		16.4	%		62,334		16.2	%		71,408		21.6	%		81,601		25.5	%		103,523		27.9	%
Total Loans		499,201		100.0	%		384,953		100.0	%		331,171		100.0	%		319,415		100.0	%		371,519		100.0	%

Less:
Deferred Fees and Discounts		797					595					219					79					240
Allowance for Loan Losses		5,397					3,930					3,971					4,926					5,234

Total Loans Receivable, Net	$	493,007				$	380,428				$	326,981				$	314,410				$	366,045

	Real Estate ⁽¹⁾					Consumer					Commercial Operating					Agricultural Operating					Total
	Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate
	(Dollars in Thousands)

Due in one year or less ⁽²⁾	$	17,434		5.69	%	$	13,098		0.53	%	$	7,252		4.75	%	$	32,975		4.27	%	$	70,759		3.97	%
Due after one year through five years		143,683		4.52	%		14,112		4.94	%		20,490		4.53	%	$	4,943		4.37	%		183,228		4.55	%
Due after five years		235,651		4.35	%		2,119		5.46	%		3,104		4.10	%	$	4,340		4.63	%		245,214		4.36	%
Total	$	396,768				$	29,329				$	30,846				$	42,258				$	499,201

		Page
		No.
	PART I

Item 1.	Business	3
Item 1A.	Risk Factors	55
Item 1B.	Unresolved Staff Comments	74
Item 2.	Properties	74
Item 3.	Legal Proceedings	75
Item 4.	Mine Safety Disclosures	75

	PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	76
Item 6.	Selected Financial Data	77
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	78
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	95
Item 8.	Financial Statements and Supplementary Data	97
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	148
Item 9A.	Controls and Procedures	148
Item 9B.	Other Information	150

	PART III

Item 10.	Directors, Executive Officers and Corporate Governance	152
Item 11.	Executive Compensation	152
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	152
Item 13.	Certain Relationships and Related Transactions, and Director Independence	153
Item 14.	Principal Accountant Fees and Services	153

	PART IV

Item 15.	Exhibits and Financial Statement Schedules	154

	Loans Delinquent For:
	30-59 Days							60-89 Days							90 Days and Over
	Number		Amount		Percent of Category			Number		Amount		Percent of Category			Number		Amount		Percent of Category


								(Dollars in Thousands)
Real Estate:
1-4 Family		4	$	111		98.2	%		1	$	37		76.0	%		1	$	245		38.3	%
Commercial & Multi-Family		-		-		0.0	%		-		-		0.0	%		-		-		0.0	%
Agricultural		-		-		0.0	%		-		-		0.0	%		-		-		0.0	%
Consumer		1		2		1.8	%		1		12		24.0	%		3		54		8.4	%
Agricultural Operating		-		-		0.0	%		-		-		0.0	%		1		340		53.3	%
Commercial Operating		-		-		0.0	%		-		-		0.0	%		-		-		0.0	%
Total		5	$	113		100.0	%		2	$	49		100.0	%		5	$	639		100.0	%

	September 30, 2014
	1 Year or Less			After 1 Year Through 5 Years			After 5 Years Through 10 Years			After 10 Years			Total Investment Securities
	Carrying Value			Carrying Value			Carrying Value			Carrying Value			Amortized Cost			Fair Value
Available for Sale	(Dollars in Thousands)

Trust preferred and corporate securities	$	3,048		$	7,117		$	18,954		$	17,810		$	48,747		$	46,929
Small business administration securities		-			-			36,963			30,049			66,541			67,012
Non-bank qualified obligations of states and political subdivisions		-			2,962			229,781			134,837			368,897			367,580
Total Investment Securities AFS	$	3,048		$	10,079		$	285,698		$	182,696		$	484,185		$	481,521

Weighted Average Yield ⁽¹⁾		1.40	%		0.83	%		2.18	%		2.06	%		2.06	%		2.10	%

	Variable				0.00- 1.99	%		2.00- 3.99	%		4.00- 5.99	%		6.00- 7.99	%	Total			Percent of Total
	(Dollars in Thousands)
Certificate accounts maturing
in quarter ending:

December 31, 2014		38			59,171			1,464			-			-			60,673			45.1
March 31, 2015		52			31,428			867			-			-			32,347			24.0
June 30, 2015		13			9,166			970			-			-			10,149			7.5
September 30, 2015		47			2,702			160			-			-			2,909			2.2
December 31, 2015		24			7,479			1,441			-			-			8,944			6.6
March 31, 2016		28			1,000			189			-			-			1,217			0.9
June 30, 2016		-			4,296			180			-			-			4,476			3.3
September 30, 2016		-			765			319			-			-			1,084			0.8
December 31, 2016		-			1,744			21			-			-			1,765			1.3
March 31, 2017		-			673			10			-			-			683			0.5
June 30, 2017		-			5,098			-			-			-			5,098			3.8
September 30, 2017		-			304			-			-			-			304			0.2
Thereafter		-			4,904			-			-			-			4,904			3.6

Total	$	202		$	128,730		$	5,621		$	-		$	-		$	134,553			100.0	%

Percent of total		0.2	%		95.7	%		4.2	%		0.0	%		0.0	%		100.0	%

	Maturity
	3 Months or Less		After 3 to 6 Months		After 6 to 12 Months		After 12 Months		Total
	(Dollars in Thousands)

Certificates of deposit less than $100,000	$	15,247	$	3,393	$	8,832	$	19,992	$	47,464

Certificates of deposit of $100,000 or more		45,426		28,954		4,226		8,483	$	87,089

Total certificates of deposit	$	60,673	$	32,347	$	13,058	$	28,475	$	134,553

	Fiscal Year 2014				Fiscal Year 2013
	Low		High		Low		High

First Quarter	$	36.54	$	40.88	$	22.50	$	24.90
Second Quarter	$	38.07	$	45.99		22.50		26.56
Third Quarter	$	35.04	$	45.34		26.00		27.68
Fourth Quarter	$	34.85	$	40.06		26.18		38.57

Year Ended September 30,	2014							2013							2012
(Dollars in Thousands)	Average Outstanding Balance		Interest Earned / Paid		Yield / Rate			Average Outstanding Balance		Interest Earned / Paid		Yield / Rate			Average Outstanding Balance		Interest Earned / Paid		Yield / Rate


Interest-earning assets:
Loans receivable	$	439,323	$	19,674		4.48	%	$	340,702	$	16,151		4.74	%	$	327,634	$	18,058		5.51	%
Mortgage-backed securities		694,510		15,343		2.21	%		700,709		11,900		1.70	%		756,465		16,133		2.13	%
Other investments and fed funds sold		721,141		13,643		2.68	%		598,003		10,925		2.61	%		254,029		3,106		1.40	%
Total interest-earning assets		1,854,974	$	48,660		2.93	%		1,639,414	$	38,976		2.66	%		1,338,128	$	37,297		2.82	%
Non-interest-earning assets		73,878							72,600							61,978
Total assets	$	1,928,852						$	1,712,014						$	1,400,106

Non-interest bearing deposits	$	1,319,447	$	-		0.00	%	$	1,192,969	$	-		0.00	%	$	1,018,748	$	-		0.00	%
Interest-bearing liabilities:
Interest-bearing checking		33,353		96		0.29	%		32,030		125		0.39	%		33,555		252		0.75	%
Savings		28,882		47		0.16	%		27,907		39		0.14	%		17,773		39		0.22	%
Money markets		40,589		72		0.18	%		40,694		100		0.25	%		38,552		133		0.34	%
Time deposits		110,992		750		0.68	%		101,552		1,016		1.00	%		105,605		1,782		1.69	%
FHLB advances		7,000		495		7.07	%		8,087		727		8.99	%		11,000		670		6.09	%
Overnight fed funds purchased		185,440		538		0.29	%		129,016		423		0.33	%		34,414		128		0.37	%
Other borrowings		20,433		400		1.96	%		20,839		524		2.51	%		25,584		559		2.18	%
Total interest-bearing liabilities		426,689		2,398		0.56	%		360,125		2,954		0.82	%		266,483		3,563		1.34	%
Total deposits and interest-bearing liabilities		1,746,136	$	2,398		0.14	%		1,553,094	$	2,954		0.19	%		1,285,231	$	3,563		0.28	%
Other non-interest bearing liabilities		25,748							15,605							22,198
Total liabilities		1,771,884							1,568,699							1,307,429
Stockholders' equity		156,968							143,315							92,677
Total liabilities and stockholders' equity	$	1,928,852						$	1,712,014						$	1,400,106
Net interest income and net interest rate spread including non-interest bearing deposits			$	46,262		2.79	%			$	36,022		2.47	%			$	33,734		2.54	%

Net interest margin						2.80	%						2.48	%						2.56	%

Year Ended September 30,	2014 vs. 2013									2013 vs. 2012

	Increase / (Decrease) Due to Volume			Increase / (Decrease) Due to Rate			Total Increase / (Decrease)			Increase / (Decrease) Due to Volume			Increase / (Decrease) Due to Rate			Total Increase / (Decrease)


Interest-earning assets
Loans Receivable	$	4,451		$	(928	)	$	3,523		$	697		$	(2,604	)	$	(1,907	)
Mortgage-backed securities		(106	)		3,549			3,443			(1,132	)		(3,101	)		(4,233	)
Other investments		2,405			313			2,718			4,773			3,046			7,819
Total interest-earning assets	$	6,750		$	2,934		$	9,684		$	4,338		$	(2,659	)	$	1,679

Interest-bearing liabilities
Interest-bearing checking	$	5		$	(34	)	$	(29	)	$	(11	)	$	(116	)	$	(127	)
Savings		2			6			8			17			(17	)		-
Money markets		-			(28	)		(28	)		6			(39	)		(33	)
Time deposits		86			(352	)		(266	)		(66	)		(700	)		(766	)
FHLB advances		(90	)		(142	)		(232	)		(208	)		265			57
Overnight fed funds purchased		171			(56	)		115			310			(15	)		295
Other borrowings		(10	)		(114	)		(124	)		(112	)		77			(35	)
Total interest-bearing liabilities	$	164		$	(720	)	$	(556	)	$	(64	)	$	(545	)	$	(609	)

Net effect on net interest income	$	6,586		$	3,654		$	10,240		$	4,402		$	(2,114	)	$	2,288