REVENUE FROM CONTRACTS WITH CUSTOMERS

12 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

On October 1, 2018, the Company adopted Topic 606 (which is described in more detail below in this Note 18) on a modified retrospective basis. Prior period amounts have not been adjusted to reflect the adoption of Topic 606 and continue to be reported in accordance with the Company’s historical accounting policies. The impact of the Company’s adoption of Topic 606 was limited to the MPS division within the Payments reporting segment. Upon adoption, Meta recorded a cumulative-effect adjustment that increased retained earnings by $1.5 million, net of tax.

Topic 606 applies to all contracts with customers unless such revenue is specifically addressed under existing guidance. The table below presents the Company’s revenue by operating segment. For additional descriptions of the Company’s operating segments, including additional financial information and the underlying management accounting process, see Note 19. Segment Reporting to the Consolidated Financial Statements.



Fiscal Year Ended September 30, 2019	Payments		Banking			Corporate Services/Other			Consolidated Company
(Dollars in thousands)
Net interest income (expense)⁽¹⁾	$	52,506	$	228,667		$	(16,966	)	$	264,207
Noninterest income:
Refund transfer product fees	39,198		—			—			39,198
Tax advance product fees⁽¹⁾	34,687		—			—			34,687
Card fees	79,628		354			—			79,982
Rental income⁽¹⁾	12		41,041			—			41,053
Loan and lease fees⁽¹⁾	—		4,292			—			4,292
Bank-owned life insurance⁽¹⁾	—		—			2,535			2,535
Deposit fees	7,502		1,588			—			9,090
Gain (loss) on sale of securities available-for-sale, net⁽¹⁾	—		—			729			729
Gain on sale of loans and leases⁽¹⁾	—		5,244			—			5,244
Loss on foreclosed real estate⁽¹⁾	—		(278		)	—			(278		)
Other income⁽¹⁾	871		3,988			1,154			6,013
Total noninterest income (expense)	161,898		56,229			4,418			222,545
Revenue (expense)	$	214,404	$	284,896		$	(12,548	)	$	486,752

⁽¹⁾These revenues are not within the scope of Topic 606. Additional details are included in other footnotes to the accompanying financial statements. The scope of Topic 606 explicitly excludes net interest income as well as many other revenues for financial assets and liabilities, including loans, leases, and securities.

Following is a discussion of key revenues within the scope of Topic 606. The Company provides services to customers that have related performance obligations that must be completed to recognize revenue. Revenues are generally recognized immediately upon the completion of the service or over time as services are performed. Any services performed over time generally require that the Company renders services during each period, and, therefore, the Company measures progress in completing these services based upon the passage of time. Revenue from contracts with customers did not generate significant contract assets and liabilities.

Refund Transfer Product Fees

Refund transfer fees are specific to the tax products offered by Refund Advantage and EPS. These fees are for products, services such as payment processing, and product referral commissions. Software partner fees paid and/or incurred are recorded on a net basis. The Company’s obligation for product fees and commissions is satisfied at the time of the product delivery and obligation for payment processing is satisfied at the time of processing. The transaction price for such activity is based upon stand-alone fees within the terms and conditions. As of September 30, 2019, there were no receivables related to refund transfer fees, which reflect earned revenue with unconditional rights to payment for product fee income. All refund transfer fees are recorded within the Payments reporting segment.

Card Fees

Card fees relate to MPS, retail bank, Refund Advantage and EPS products. These fees are for products and services such as card activation, product support, processing, and servicing. The Company earns these fees based upon the underlying terms and conditions with each cardholder over the contract term. Agreements with the Company’s cardholders are considered daily service contracts as they are not fixed in duration. The Company’s obligation for card activation and product support fees is satisfied at the time of product delivery, while the obligation for processing and servicing is satisfied over the course of each month. The transaction price for such activity is based upon the stand-alone fees within the terms and conditions of the cardholder agreements. Card fee revenue also includes income from sponsorships, associations and networks, and interchange income. Sponsorship income relates to fees charged to the Company’s ATM sponsorship partners, where the obligation is satisfied over the course of each month. Association and network income reflect incentives, performance bonuses and rebates with MasterCard and Visa. The obligation for such income is satisfied at the time when certain thresholds of transaction volume have been met. Interchange income is generated by cardholder activity, and, therefore, the Company’s obligations are satisfied as activity occurs. The transaction price for such activity is based on underlying rates and activity thresholds within the terms and conditions of the applicable agreements. Card fee revenue also includes breakage revenue, which represents the estimated amount that will not be redeemed by the holder of unregistered, unused prepaid cards for goods or services. Breakage revenue is recognized ratably over the expected customer usage period and is an estimate based on cardholder behavior and breakage rates. Breakage is also impacted by escheatment laws. Card fees are recorded within the Payments and Banking reporting segments.

Deposit Fees

Fees are earned on depository accounts for commercial and consumer customers and include fees for account services, overdraft services, safety deposit box rentals, and event-driven services (i.e., returned checks, ATM surcharge, card replacement, wire transfers, and stop pays). The Company’s obligation for event-driven services is satisfied at the time of the event when the service is delivered, while its obligation for account services is satisfied over the course of each month. The Company’s obligation for overdraft services is satisfied at the time of overdraft. The transaction price for such activity is based upon stand-alone fees within the terms and conditions of the deposit agreements. Deposit fees are recorded within the Payments and Banking reporting segment.

Principal vs Agent

The Payments reporting segment includes principal/agent relationships. Within this segment, MPS relationships are recorded on a gross basis within the income statement, as Meta is the principal in MPS Contracts, with the exception of association/network contracts and partner/processer contracts for prepaid cards, which are recorded on a net basis within the income statement as Meta is the agent in those contracts. Also within this segment, tax service relationships are recorded on a gross basis within the income statement, as Meta is the principal in tax service contracts, with the exception of contracts with software providers and merchants, which are recorded on a net basis within the income statement as Meta is the agent in those contracts.