UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2007

             [ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

            For the transaction period from __________ to __________

                         Commission File Number: 0-22140

                         META FINANCIAL GROUP, INC.(R)
             (Exact name of registrant as specified in its charter)

           Delaware                                       42-1406262
           --------                                       ----------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

                  121 East Fifth Street, Storm Lake, Iowa 50588
                  ---------------------------------------------
                    (Address of principal executive offices)

                                 (712) 732-4117
                                 --------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12-b2 of the Exchange  Act.  (Check
one):

Large accelerated filer [ ]   Accelerated filer [ ]   Non-accelerated filer [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).   Yes [ ]  No [X]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

           Class:                            Outstanding at May 15, 2007:
Common Stock, $.01 par value                         2,565,025 Common Shares





                                   META FINANCIAL GROUP, INC.
                                            FORM 10-Q

                                              INDEX

                                                                                        Page No.
                                                                                        --------
                                                                                   
Part I.   Financial Information
-------------------------------

      Item 1.     Financial Statements (Unaudited):

                  Condensed Consolidated Statements of Financial Condition
                    as of March 31, 2007 and September 30, 2006                            3

                  Condensed Consolidated Statements of Operations for the Three
                    and Six Months Ended March 31, 2007 and 2006                           4

                  Condensed Consolidated Statements of Comprehensive Income (Loss)
                    for the Three and Six Months Ended March 31, 2007 and 2006             5

                  Condensed Consolidated Statements of Changes in Shareholders'
                    Equity for the Six Months Ended March 31, 2007 and 2006                6

                  Condensed Consolidated Statements of Cash Flows for the
                    Six Months Ended March 31, 2007 and 2006                               7

                  Notes to Condensed Consolidated Financial Statements                     8

      Item 2.     Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                                   18

      Item 3.     Quantitative and Qualitative Disclosure About Market Risk               28

      Item 4.     Controls and Procedures                                                 30

Part II.  Other Information
---------------------------

      Item 1.     Legal Proceedings                                                       31

      Item 1.A.   Risk Factors                                                            34

      Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds             34

      Item 3.     Defaults Upon Senior Securities                                         34

      Item 4.     Submission of Matters to a Vote of Security Holders                     35

      Item 5.     Other Information                                                       35

      Item 6.     Exhibits                                                                35

      Signatures                                                                          36



                                        2




                                           META FINANCIAL GROUP, INC.
                                                AND SUBSIDIARIES
                      Condensed Consolidated Statements of Financial Condition (Unaudited)
                                             (Dollars in Thousands)


ASSETS                                                                  March 31, 2007      September 30, 2006
--------------------------------------------------------------------------------------------------------------
                                                                                             
Cash and due from banks                                                     $     1,565            $     7,405
Interest-bearing deposits in other financial institutions                        22,920                101,948
                                                                            ----------------------------------
    Total cash and cash equivalents                                              24,485                109,353
Federal funds sold                                                              105,000                     --
Securities purchased under agreements to resell                                      --                  5,891
Other investment securities available for sale                                   27,584                 27,474
Mortgage-backed securities available for sale                                   147,604                158,702
Loans receivable - net of allowance for loan losses of
  $5,282 at March 31, 2007 and $5,968 at September 30, 2006                     374,869                389,270
Federal Home Loan and Federal Reserve Bank stock, at cost                         4,999                  5,768
Accrued interest receivable                                                       3,769                  4,379
Premises and equipment, net                                                      18,492                 17,623
Bank owned life insurance                                                        13,158                 12,953
Goodwill                                                                          3,403                  3,403
Other assets                                                                      6,063                  6,795
                                                                            ----------------------------------

                     Total assets                                           $   729,426            $   741,611
                                                                            ==================================

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
Non-interest-bearing checking                                               $   249,869            $   189,506
Interest-bearing checking                                                        28,178                 26,828
Savings deposits                                                                 20,196                 29,869
Money market deposits                                                            72,118                103,291
Time certificates of deposit                                                    209,218                216,217
                                                                            ----------------------------------
           Total deposits                                                       579,579                565,711
Advances from Federal Home Loan Bank                                             85,300                 99,565
Securities sold under agreements to repurchase                                    5,532                 15,179
Subordinated debentures                                                          10,310                 10,310
Accrued interest payable                                                          1,184                    972
Accrued expenses and other liabilities                                            2,798                  4,542
                                                                            ----------------------------------
           Total liabilities                                                    684,703                696,279
                                                                            ----------------------------------

SHAREHOLDERS' EQUITY
Preferred stock, 800,000 shares authorized, no shares
  issued or outstanding                                                              --                     --
Common stock, $.01 par value; 5,200,000 shares authorized,
  2,957,999 shares issued, 2,559,830 and 2,534,367 shares outstanding
  at March 31, 2007 and September 30, 2006, respectively                             30                     30
Additional paid-in capital                                                       20,958                 20,969
Retained earnings - substantially restricted                                     33,872                 37,186
Accumulated other comprehensive (loss)                                           (2,356)                (4,548)
Unearned Employee Stock Ownership Plan shares                                      (324)                  (509)
Treasury stock, 398,169 and 423,632 common shares, at cost,
  at March 31, 2007 and September 30, 2006, respectively                         (7,457)                (7,796)
                                                                            ----------------------------------
           Total shareholders' equity                                            44,723                 45,332
                                                                            ----------------------------------

           Total liabilities and shareholders' equity                       $   729,426            $   741,611
                                                                            ==================================


See Notes to Condensed Consolidated Financial Statements.


                                        3




                                       META FINANCIAL GROUP, INC.
                                            AND SUBSIDIARIES
                      Condensed Consolidated Statements of Operations (Unaudited)
                             (Dollars in Thousands, Except Per Share Data)

                                                           Three Months Ended       Six Months Ended
                                                               March 31,               March 31,

                                                            2007        2006        2007        2006
-------------------------------------------------------------------------------   ---------------------
                                                                                  
Interest and dividend income:
    Loans receivable, including fees                      $  6,615    $  7,466    $ 13,491    $ 15,052
    Mortgage backed securities                               1,519       1,823       3,125       3,656
    Other investments                                        2,155         906       4,050       1,663
                                                          --------------------    --------------------
                                                            10,289      10,195      20,666      20,371
                                                          --------------------    --------------------

Interest expense:
    Deposits                                                 3,190       3,336       6,693       6,683
    FHLB advances and other borrowings                       1,425       1,870       3,040       3,979
                                                          --------------------    --------------------
                                                             4,615       5,206       9,733      10,662
                                                          --------------------    --------------------

Net interest income                                          5,674       4,989      10,933       9,709

Provision for loan losses                                     (280)       (350)      5,185        (309)
                                                          --------------------    --------------------

Net interest income after provision for loan losses          5,954       5,339       5,748      10,018
                                                          --------------------    --------------------

Non-interest income:
    Deposit Fees                                               246         364         482         626
    Loan Fees                                                  161          54         220         196
    Card fees                                                3,462       1,449       6,870       2,670
    Bank owned life insurance income                           131         151         206         297
    Other income                                               232         179         415         254
                                                          --------------------    --------------------
       Total non-interest income                             4,232       2,197       8,193       4,043
                                                          --------------------    --------------------

Non-interest expense:
    Compensation and benefits                                4,532       3,006       8,566       6,074
    Occupancy and equipment expense                          1,072         788       2,039       1,552
    Marketing                                                  137         186         380         317
    Data processing expense                                    292         297         469         490
    Card processing expense                                  1,589         942       3,242       1,275
    Legal and consulting expense                               784         954       1,520       1,545
    Other expense                                              786       1,027       1,806       1,737
                                                          --------------------    --------------------
       Total non-interest expense                            9,192       7,200      18,022      12,990
                                                          --------------------    --------------------

Net income (loss) before income tax expense (benefit)          994         336      (4,081)      1,071

Income tax expense (benefit)                                   391          75      (1,430)        294
                                                          --------------------    --------------------

Net income (loss)                                              603         261      (2,651)        777
                                                          ====================    ====================
Earnings (loss) per common share:
    Basic                                                 $   0.24    $   0.10    $  (1.05)   $   0.31
                                                          ====================    ====================
    Diluted                                                   0.23        0.10       (1.05)       0.31
                                                          ====================    ====================

Dividends declared per common share:                      $   0.13    $   0.13    $   0.26    $   0.26
                                                          ====================    ====================


See Notes to Condensed Consolidated Financial Statements.


                                        4




                                META FINANCIAL GROUP INC.
                                     AND SUBSIDIARIES
       Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
                                  (Dollars in Thousands)

                                               Three Months Ended     Six Months Ended
                                                    March 31,             March 31,

                                                 2007       2006       2007       2006
------------------------------------------------------------------   -------------------
                                                                    
Net income (loss)                              $    603   $    261   $ (2,651)  $    777

Other comprehensive gain (loss):
   Net unrealized gain (loss) on
     securities available for sale                  774       (597)     3,495     (2,315)
   Deferred income tax expense (benefit)            289       (222)     1,303       (861)
                                               -------------------   -------------------

   Total other comprehensive income (loss)          485       (375)     2,192     (1,454)
                                               -------------------   -------------------

Total comprehensive income (loss)              $  1,088   $   (114)  $   (459)  $   (677)
                                               ===================   ===================


See Notes to Condensed Consolidated Financial Statements.


                                        5




                                                     META FINANCIAL GROUP, INC.
                                                          AND SUBSIDIARIES
                         Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited)
                                              For the Six Months Ended March 31, 2007
                                                       (Dollars in Thousands)

                                                                             Accumulated     Unearned
                                                                                Other        Employee
                                                    Additional              Comprehensive      Stock                     Total
                                          Common     Paid-in     Retained      (Loss),       Ownership    Treasury   Shareholders'
                                          Stock      Capital     Earnings    Net of Tax     Plan Shares    Stock        Equity
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                
Balance, September 30, 2005              $     30   $   20,646   $ 34,557   $      (3,180)  $      (825)  $ (8,269)  $      42,959

Cash dividends declared on common
   stock ($.26 per share)                      --           --       (652)             --            --         --            (652)

Issuance of 9,000 common shares from
   treasury stock due to exercise of
   stock options                               --          (63)        --              --            --        203             140

Stock compensation                             --           57         --              --            --         --              57

10,200 common shares committed to be
   released under the ESOP                     --          (16)        --              --           228         --             212

Net change in unrealized losses on
   securities available for sale,
   net of income taxes                         --           --         --          (1,454)           --         --          (1,454)

Net income for six months ended
   March 31, 2006                              --           --        777              --            --         --             777

----------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2006                  $     30   $   20,624   $ 34,682   $      (4,634)  $      (597)  $ (8,066)  $      42,039
==================================================================================================================================

Balance, September 30, 2006              $     30   $   20,969   $ 37,186   $      (4,548)  $      (509)  $ (7,796)  $      45,332

Cash dividends declared on common
   stock ($.26 per share)                      --           --       (663)             --            --         --            (663)

Issuance of 25,463 common shares from
   treasury stock due to exercise of
   stock options                               --         (227)        --              --            --        339             112

Stock compensation                             --          170         --              --            --         --             170

7,998 common shares committed to be
   released under the ESOP                     --           46         --              --           185         --             231

Net change in unrealized losses on
   securities available for sale,
   net of income taxes                         --           --         --           2,192            --         --           2,192

Net (loss) for six months ended
   March 31, 2007                              --           --     (2,651)             --            --         --          (2,651)

----------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2007                  $     30   $   20,958   $ 33,872   $      (2,356)  $      (324)  $ (7,457)  $      44,723
==================================================================================================================================


See Notes to Condensed Consolidated Financial Statements.


                                        6




                                     META FINANCIAL GROUP, INC.
                                          AND SUBSIDIARIES
                    Condensed Consolidated Statements of Cash Flows (Unaudited)
                                       (Dollars in Thousands)

                                                                        Six Months Ended March 31,
                                                                           2007           2006
--------------------------------------------------------------------------------------------------
                                                                                 
Cash Flows from operating activities:
   Net income (loss)                                                    $    (2,651)   $       777
   Adjustments to reconcile net income to net cash from operating
   activities:
   Effect of contribution to employee stock ownership plan                      231            212
   Depreciation, amortization and accretion, net                              1,274          1,258
   Provision for loan losses                                                  5,185           (309)
   Stock compensation                                                           170             57
   (Gain) loss on sales of real estate owned and repossessed assets, net          3             (4)
   (Gain) on sales of loans, net                                                (17)           (27)
   (Gain) on sales of other, net                                                (36)
   Net change in accrued interest receivable                                    610            295
   Net change in other assets                                                  (962)        (2,071)
   Net change in accrued interest payable                                       212           (109)
   Net change in accrued expenses and other liabilities                      (1,744)         4,803
                                                                        --------------------------
       Net cash provided by operating activities                              2,275          4,882

Cash flow from investing activities:
   Purchase of securities available for sale                                     --           (109)
   Net change in federal funds sold                                        (105,000)            --
   Net change in securities purchased under agreement to resell               5,891         12,352
   Proceeds from maturities and principal repayments of
     securities available for sale                                           13,931         21,507
   Loans purchased                                                          (54,840)       (26,687)
   Net change in loans receivable                                            64,073         41,531
   Proceeds from sales of foreclosed real estate                                 50          4,676
   Net change in FHLB / FRB stock                                               769          1,309
   Purchase of premises and equipment                                        (1,402)        (1,290)
                                                                        --------------------------
         Net cash provided by (used in) investing activities                (76,528)        53,289

Cash flows from financing activities:
   Net change in checking, savings, and money market deposits                20,867         33,769
   Net change in time deposits                                               (6,999)       (34,114)
   Repayments of advances from Federal Home Loan Bank                       (14,265)       (29,950)
   Net change in securities sold under agreements to repurchase              (9,647)        (4,404)
   Cash dividends paid                                                         (663)          (652)
   Proceeds from exercise of stock options                                       92            140
                                                                        --------------------------
         Net cash provided by (used in) financing activities                (10,615)       (35,211)
                                                                        --------------------------

Net change in cash and cash equivalents                                     (84,868)        22,960

Cash and cash equivalents at beginning of period                            109,353         14,370
                                                                        --------------------------
Cash and cash equivalents at end of period                              $    24,485    $    37,330
                                                                        ==========================

Supplemental disclosure of cash flow information
   Cash paid during the period for:
       Interest                                                         $     9,521    $    10,771
       Income taxes                                                             582            334

Supplemental schedule of non-cash investing and financing activities:
   Loans transferred to foreclosed real estate                          $        --    $        27


See Notes to Condensed Consolidated Financial Statements.


                                        7


                          META FINANCIAL GROUP, INC.(R)
                                AND SUBSIDIARIES
        Notes to Condensed Consolidated Financial Statements (Unaudited)

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The accounting  policies  followed for interim reporting by Meta Financial
      Group,   Inc.  ("Meta  Group"  or  the  "Company")  and  its  consolidated
      subsidiaries,  MetaBank, MetaBank West Central ("MetaBank WC"), Meta Trust
      Company ("Meta Trust"),  First Services Financial  Limited,  and Brookings
      Service  Corporation are consistent with the accounting  policies followed
      for annual financial  reporting.  All adjustments  that, in the opinion of
      management,  are necessary for a fair  presentation of the results for the
      periods  reported  have  been  included  in  the  accompanying   unaudited
      condensed consolidated financial statements,  and all such adjustments are
      of a normal  recurring  nature.  The accompanying  condensed  consolidated
      statement of financial  condition as of September 30, 2006, which has been
      derived from  audited  financial  statements,  and the  unaudited  interim
      condensed  financial  statements have been prepared  pursuant to the rules
      and  regulations  of  the  Securities  and  Exchange  Commission.  Certain
      information and note  disclosures  normally  included in annual  financial
      statements  prepared in  accordance  with  generally  accepted  accounting
      principles  have been  condensed  or omitted  pursuant  to those rules and
      regulations,  although the Company  believes that the disclosures made are
      adequate to make the  information  not  misleading.  It is suggested  that
      these condensed  consolidated  financial statements be read in conjunction
      with the  financial  statements  and the  notes  thereto  included  in the
      Company's latest shareholders' annual report (Form 10-K).

2.    ALLOWANCE FOR LOAN LOSSES

      At March  31,  2007 the  Company's  allowance  for  loan  losses  was $5.3
      million,  a decrease of $686,000  from $6.0 million at September 30, 2006.
      During  the six  months  ended  March  31,  2007 the  Company  recorded  a
      provision for loan losses of $5.2 million,  which was primarily related to
      the impairment of two commercial lending  relationships.  During the three
      months ended March 31, 2007 the Company recorded a negative  provision for
      loan losses of $280,000. The Company also incurred net loan charge-offs of
      $5.9  million,  of which $4.8  million was  incurred in the second  fiscal
      quarter,  primarily  related to the recognition of losses on both of these
      relationships.  Further  discussion  of this  change in the  allowance  is
      included in  "Corporate  Developments  and  Overview"  and  "Nonperforming
      Assets  and  Allowance  for Loan  Loss"  in  Management's  Discussion  and
      Analysis.

      The  following  table  sets  forth  an  analysis  of the  activity  in the
      Company's  allowance  for loan losses for the three and six month  periods
      ended March 31, 2007 and 2006.

                                    Three Months Ended       Six Months Ended
                                        March 31,                March 31,
                                   --------------------    --------------------
                                     2007        2006        2007         2006
                                   --------------------    --------------------
                                              (Dollars in Thousands)

Beginning balance                  $ 10,349    $  7,257    $  5,968    $  7,222
Provision charged to operations        (280)       (350)      5,185        (309)
Charge-offs                          (4,831)     (1,108)     (5,924)     (1,116)
Recoveries                               44         199          53         201
                                   --------------------    --------------------
Ending balance                     $  5,282    $  5,998    $  5,282    $  5,998
                                   ====================    ====================


                                        8


3.    EARNINGS PER SHARE

      Basic  earnings  per share is based on net income  divided by the weighted
      average number of shares outstanding  during the period.  Diluted earnings
      per share shows the dilutive  effect of additional  common shares issuable
      pursuant to stock options agreements.

      A  reconciliation  of the  numerators and  denominators  used in the basic
      earnings  per common  share and the  diluted  earnings  per  common  share
      computations for the three and six months ended March 31, 2007 and 2006 is
      presented below.



Three Months Ended March 31,                                                                 2007                    2006
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                       
                                                                                    (Dollars in Thousands, Except Per Share Data)

Basic earnings per common share:
   Numerator, net income                                                            $                603     $                261
=================================================================================================================================

   Denominator, weighted average common shares outstanding                                     2,549,631                2,510,677
   Less weighted average unallocated ESOP and nonvested shares                                   (25,283)                 (29,975)
---------------------------------------------------------------------------------------------------------------------------------

   Weighted average common shares outstanding                                                  2,524,348                2,480,702
=================================================================================================================================

Basic earnings per common share                                                     $               0.24     $               0.10
=================================================================================================================================

Diluted earnings per common share:
   Numerator, net income                                                            $                603     $                261
=================================================================================================================================

   Denominator, weighted average common shares outstanding
      for basic earnings per share                                                             2,524,348                2,480,702
   Add dilutive effect of assumed exercises of stock options, net of tax benefits                 96,366                   32,225
---------------------------------------------------------------------------------------------------------------------------------

   Weighted average common and dilutive potential common shares outstanding                    2,620,714                2,512,927
=================================================================================================================================

Diluted earnings per common share                                                   $               0.23     $               0.10
=================================================================================================================================



                                        9




Six Months Ended March 31,                                                                   2007                    2006
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                       
                                                                                    (Dollars in Thousands, Except Per Share Data)

Basic earnings (loss) per common share:
   Numerator, net income (loss)                                                     $             (2,651)    $                777
=================================================================================================================================

   Denominator, weighted average common shares outstanding                                     2,542,440                2,507,147
   Less weighted average unallocated ESOP and nonvested shares                                   (27,174)                 (32,558)
---------------------------------------------------------------------------------------------------------------------------------

   Weighted average common shares outstanding                                                  2,515,266                2,474,589
=================================================================================================================================

Basic earnings (loss) per common share                                              $              (1.05)    $               0.31
=================================================================================================================================

Diluted earnings (loss) per common share:
   Numerator, net income (loss)                                                     $             (2,651)    $                777
=================================================================================================================================

   Denominator, weighted average common shares outstanding
      for basic earnings per share                                                             2,515,266                2,474,589
   Add dilutive effect of assumed exercises of stock options, net of tax benefits                     --                   30,504
---------------------------------------------------------------------------------------------------------------------------------

   Weighted average common and dilutive potential common shares outstanding                    2,515,266                2,505,093
=================================================================================================================================

Diluted earnings (loss) per common share                                            $              (1.05)    $               0.31
=================================================================================================================================


4.    COMMITMENTS AND CONTINGENCIES

      At March 31, 2007 and  September  30,  2006,  the Company had  outstanding
      commitments  to originate and purchase  loans  totaling  $50.9 million and
      $52.9  million,   respectively.  It  is  expected  that  outstanding  loan
      commitments will be funded with existing liquid assets. At March 31, 2007,
      the Company had no  commitments to purchase or sell  securities  available
      for sale.

      Legal Proceedings

      MetaBank has been named in several  lawsuits whose eventual  outcome could
      have an adverse effect on the consolidated  financial  position or results
      of  operations  of the  Company.  Because the  likelihood  or amount of an
      adverse  resolution to these  matters  cannot  currently be assessed,  the
      Company has not recorded a contingent liability related to these potential
      claims.

      On June 11, 2004, the Sioux Falls School District filed suit in the Second
      Judicial Circuit Court alleging that MetaBank,  a wholly-owned  subsidiary
      of the Company,  improperly  allowed  funds,  which belonged to the school
      district,  to be  deposited  into,  and  subsequently  withdrawn  from,  a
      corporate account  established by an employee of the school district.  The
      school  district is seeking in excess of $600,000.  MetaBank has submitted
      the  claim to its  insurance  carrier,  and is  working  with  counsel  to
      vigorously contest the suit.

      On or about April 26, 2006,  MetaBank,  Meta Financial  Group,  Inc., Meta
      Trust  Company  and J. Tyler  Haahr were named as  defendants  in Dengler,
      Flute, et al v. Prairie Auto Group,  Inc., a class action lawsuit filed in
      Circuit Court for the Second Judicial Circuit in Minnehaha  County,  South
      Dakota.  This  lawsuit  appears to be a successor  suit to a series of two
      state and three tribal court lawsuits that were filed in 2006, reported on
      a previous 10-Q, but apparently  subsequently abandoned by the plaintiffs.
      In this action,


                                       10


      plaintiff class is comprised of individuals who purchased  vehicles and/or
      obtained  financing from the J.D. Byrider franchise in Pennington  County,
      which  was owned and  operated  by  companies  controlled  by Dan  Nelson.
      Plaintiffs allege that the Dan Nelson companies,  including the Dan Nelson
      Auto Group ("DNAG") and the South Dakota Acceptance  Corporation  ("SDAC")
      and other  affiliates,  operated  under  the J.D.  Byrider  franchise  and
      business  model  and  engaged  in  abusive  sales,  lending  and  consumer
      practices,  The  bulk  of the  complaint  addresses  the  various  alleged
      fraudulent  schemes  perpetrated  by the Nelson  companies  against  their
      customers, principally the "buy here, pay here" model in which individuals
      with poor credit  histories were  allegedly sold poor quality  vehicles at
      high prices with worthless warranties on usurious loan terms.

      MetaBank,  in  conjunction  with a  roster  of  participating  banks,  had
      provided  a  series  of  loans  and  lines of  credit  to DNAG  and  SDAC.
      Plaintiffs  allege  that  the  MetaBank  entities   "participated  in  the
      fraudulent  scheme" by virtue of providing these lines of credit and loans
      despite  being aware of the  predatory  consumer  practices  of the Nelson
      companies,  and that MetaBank profited by receiving  undisclosed  "special
      benefits"  for  providing  these loans.  DNAG,  SDAC and Nelson have since
      filed  for  bankruptcy.  Plaintiffs  also  allege  that  MetaBank  did not
      vigorously  pursue claims against  Nelson and fellow DNAG executive  Chris
      Tapken in their respective  personal  bankruptcies in order to allow these
      individuals to emerge with control over assets of their former  companies.
      The claims against J. Tyler Haahr personally are not explained, other than
      that Haahr had a "long-standing  personal relationship" that allegedly led
      to the  decision by  MetaBank to provide  loans and lines of credit to the
      various  entities  owned and controlled by Nelson.  The MetaBank  entities
      have not yet filed an answer to this  complaint,  and there is no discrete
      amount of damages  claimed against the MetaBank  entities,  so it would be
      premature  to  predict  MetaBank's  likelihood  of  success  or  amount of
      exposure in this lawsuit.  MetaBank  intends to  vigorously  contest these
      claims.  MetaBank's  liability  insurer  has  already  agreed  to  provide
      coverage to the MetaBank  entities and J. Tyler Haahr for this claim,  and
      has retained and is paying for counsel to defend this action.

      As was described in the Company's previous filings,  MetaBank was the lead
      lender and servicer of approximately  $32.0 million in loans to three auto
      dealership related companies and their owners. Approximately $22.2 million
      of the total had been sold to ten  participating  financial  institutions.
      Each participation  agreement with the ten participant banks provides that
      the participant  bank shall own a specified  percentage of the outstanding
      loan  balance at any give time.  Each  agreement  also recites the maximum
      amount that can be loaned by MetaBank on that  particular  loan.  MetaBank
      allocated  to some  participants  an  ownership  in the  outstanding  loan
      balance  in  excess  of the  percentage  specified  in  the  participation
      agreement.  MetaBank believes that in each instance this was done with the
      full knowledge and consent of the participant.  Several  participants have
      demanded  that their  participations  be adjusted to match the  percentage
      specified in the participant agreement. Based on the total loan recoveries
      projected as of March 31,  2007,  MetaBank  calculated  that it would cost
      approximately  $953,000 to adjust these participations as the participants
      would have them adjusted.  A few participants  have more recently asserted
      that  MetaBank  owes them  additional  monies  based on  additional  legal
      theories. MetaBank denies any obligation to make the requested adjustments
      on these or related claims. Other than as disclosed below, MetaBank cannot
      predict at this time  whether  any of these  claims will be the subject of
      litigation.

      During the three  months  ended June 30, 2006 or shortly  thereafter  four
      lawsuits were filed against the Company's  MetaBank  subsidiary.  Three of
      the complaints are related to the Company's  alleged actions in connection
      with its  activities  as lead lender to three  companies  involved in auto
      sales,  service,  and financing and their owner. An additional bank, North
      American Bank, has filed to join the First Midwest Bank-Deerfield Branches
      case,  which  action has not been granted and is being fought by MetaBank.
      All four actions are in their  infancy and amount  cannot be determined at
      this time. The Company intends, however, to vigorously defend its actions.


                                       11


      First Midwest  Bank-Deerfield  Branches and  Mid-Country  Bank v. MetaBank
      (Civ.  No.  06-2241).  On June  28,  2006,  First  Midwest  Bank-Deerfield
      Branches  and  Mid-Country  Bank  filed  suit  against  MetaBank  in South
      Dakota's Second Judicial  Circuit Court,  Minnehaha  County,  in the above
      titled  action.  The  complaint  alleges that  plaintiff  banks,  who were
      participating  lenders with MetaBank on a series of loans made to DNAG and
      SDAC,  suffered  damages  exceeding  $1 million as a result of  MetaBank's
      placement  and  administration  of the loans that were the  subject of the
      loan participation agreements. The complaint sounds in breach of contract,
      negligence, gross negligence,  negligent  misrepresentation,  fraud in the
      inducement,  unjust  enrichment and breach of fiduciary  duty. On July 17,
      2006,  MetaBank  removed  the case from state  court to the United  States
      District Court for the District of South Dakota, where the action has been
      assigned case no. Civ. 06-4114. Plaintiff(s) moved to remand the case back
      to state  court,  but this  motion  was  denied.  A  scheduling  order was
      recently  submitted to the United States  District  Court and discovery is
      just beginning.

      First Premier Bank v. MetaBank (Civ. No. 06-2277).  On July 5, 2006, First
      Premier Bank filed suit against MetaBank in South Dakota's Second Judicial
      Circuit Court,  Minnehaha County in the above titled action. The complaint
      alleges that First  Premier,  a  participating  lender with  MetaBank on a
      series  of  loans  made  to  SDAC,  has  suffered  damages  in an  as  yet
      undetermined  amount as a result of MetaBank's actions in selling to First
      Premier a participation  in a loan made to SDAC and MetaBank's  actions in
      administering  that  loan.  The  complaint  sounds in breach of  contract,
      breach of covenant of good faith and fair dealing,  fraudulent inducement,
      fraud, deceit, negligent misrepresentation,  fraudulent misrepresentation,
      conversion,  negligence,  gross  negligence,  breach of fiduciary duty and
      unjust enrichment.  On July 17, 2006, MetaBank removed the case from state
      court to the  United  States  District  Court  for the  District  of South
      Dakota,  where  the  action  has  been  assigned  case no.  Civ.  06-4115.
      Plaintiff(s) moved to remand the case back to state court, but this motion
      was denied. A scheduling order was recently submitted to the United States
      District Court and discovery is just beginning.

      Home Federal Bank v. J. Tyler Haahr,  Daniel A. Nelson and MetaBank  (Civ.
      No.  06-2230).  On June 26,  2006,  Home  Federal  Bank filed suit against
      MetaBank  and two  individuals,  J. Tyler Haahr and Daniel A.  Nelson,  in
      South Dakota's  Second  Judicial  Circuit Court,  Minnehaha  County in the
      above  titled  action.   The  complaint  alleges  that  Home  Federal,   a
      participating  lender with  MetaBank on a series of loans made to DNAG and
      SDAC,  suffered  damages  exceeding $3.8 million as a result of failure to
      make disclosures  regarding an  investigation of Nelson,  DNAG and SDAC by
      the Iowa Attorney  General at the time Home Federal agreed to an extension
      of the loan  participation  agreements.  The  complaint  sounds  in fraud,
      negligent  misrepresentation,  breach of fiduciary  duty,  conspiracy  and
      breach of duty of good faith and fair dealing. Discovery in that matter is
      proceeding.

      Subject to a reservation of rights,  the Company's  insurance  carrier has
      agreed to cover the three claims described above.

      Meridian  Enterprises  Corporation  v. Bank of America  Corporation et al.
      (Case  No.  4:06-cv-01117CDP).  On July  21,  2006,  Meridian  Enterprises
      Corporation  ("Meridian")  filed suit against Meta Financial  Group,  Inc.
      (Meta  Payment  Systems  division)  ("Meta") and other banks and financial
      institutions  in the U.S.  District  Court  for the  Eastern  District  of
      Missouri in the above-titled action.  Meridian is the owner of U.S. Patent
      No.  5,025,372 (the " '372 Patent").  The complaint  alleges that Meta and
      the  co-defendants  each  sell,  administer,  process  and/or  sponsor  an
      incentive  program  where  cards  are  provided  to  participants  in  the
      incentive  program  that can be presented to retailers to make a purchase.
      The complaint further alleges, inter alia, that Meta and the co-defendants
      each  use  a  computer  to  determine   whether  or  not  a  participant's
      performance  under the incentive  program  entitles the  participant to an
      award, in which the computer also determines the amount of the award,  and
      the  amount  of the  award is based  upon the  level of the  participant's
      performance in the incentive program. Accordingly, the complaint sounds in
      infringement, inducement of infringement, and contributory infringement of
      one or more  claims  of the '372  Patent.  On April  9,  2007,  Meridian's
      complaint was dismissed without prejudice.


                                       12


      There are no other material pending legal proceedings to which the Company
      or its  subsidiaries  is a party other than  ordinary  routine  litigation
      incidental to their respective businesses.

5.    STOCK OPTION PLAN

      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 Stock Option Committee of the Board of Directors
      based on the  performance  of the  award  recipients,  or  other  relevant
      factors.

      Effective   October  1,  2005,  the  Company   adopted  SFAS  No.  123(R),
      Share-Based Payment,  using a modified prospective  application.  Prior to
      that date, the Company accounted for stock option awards under APB Opinion
      No. 25, Accounting for Stock Issued to Employees.  In accordance with SFAS
      No. 123(R),  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  recording of such  compensation  expense began on October 1, 2005 for
      shares not yet vested as of that date and for all new grants subsequent to
      that date. 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.

      On  January  22,  2007,  the  Company's  stockholders  approved  the First
      Amendment to the 2002 Omnibus  Incentive Plan (the "Plan").  A description
      of the Plan was  included in "Proposal  II:  Approval of Amendment to 2002
      Omnibus  Incentive Plan" of the Company's  Definitive  Proxy Statement for
      its 2007 Annual Meeting,  as filed with the Securities Exchange Commission
      on December 29, 2006, and is incorporated herein by reference.


                                       13


      A summary of option  activity  at and for the six months  ended  March 31,
      2007 is presented below:



                                                                    Weighted
                                                      Weighted       Average
                                             Number    Average     Remaining       Aggregate
                                                 of   Exercise   Contractual       Intrinsic
                                             shares      Price    Term (Yrs)           Value
--------------------------------------------------------------------------------------------
                                                                   
Options outstanding, September 30, 2006     386,425   $  19.79          6.65   $   1,792,717
Granted                                      14,000      29.50
Exercised                                   (52,780)     16.99                       667,250
Forfeited or expired                         (1,500)     23.81
--------------------------------------------------------------------------------------------
Options outstanding, March 31, 2007         346,145   $  20.60          7.16   $   3,568,807

Options exercisable at March 31, 2007       232,395   $  19.24          6.46   $   2,710,427


      A summary of  nonvested  share  activity  at and for the six months  ended
      March 31, 2007 is presented below:

                                                                     Weighted
                                                        Number        Average
                                                            of   Fair Mkt Val
                                                        shares       At Grant
-----------------------------------------------------------------------------
Nonvested shares outstanding, September 30, 2006         8,333   $      24.43
Granted                                                     --             --
Vested                                                      --             --
Forfeited or expired                                        --             --
-----------------------------------------------------------------------------
Nonvested shares outstanding, March 31, 2007             8,333   $      24.43

      As of March 31, 2007, stock based compensation  expense not yet recognized
      in income  totaled  $578,000,  which is expected to be  recognized  over a
      weighted average remaining period of 1.39 years.

6.    SEGMENT INFORMATION

      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 under Statement
      of Financial  Accounting  Standards No. 131, Disclosures about Segments of
      an  Enterprise  and Related  Information:  a Traditional  Banking  Segment
      consisting  of its two banking  subsidiaries,  MetaBank and MetaBank  West
      Central, and Meta Payment Systems(R), a division of MetaBank. MetaBank and
      MetaBank West Central  operate as traditional  community  banks  providing
      deposit,  loan  and  other  related  products  to  individuals  and  small
      businesses,  primarily in the communities where their offices are located.
      Meta Payment Systems provides a number of products and services, primarily
      to third parties,  including financial  institutions and other businesses.
      These products and services include issuance of prepaid cards, issuance of
      credit cards, sponsorship of ATMs into the debit networks, ACH origination
      services  and a gift  card  program.  Other  related  programs  are in the
      process of development. The remaining grouping under the caption All Other
      Segments consists of the operations of Meta Financial Group, Inc. and Meta
      Trust  Company.  Revenues and expenses are allocated to business  segments
      using a funds transfer pricing  methodology  through which excess funds or
      funding  shortfalls  at  individual  segments  are sold to or bought from,
      respectively, the remaining segments. As the Company's funding mix changes
      between segments, net interest income


                                       14


      at individual  segments may rise or fall based on the relative size of the
      excess funding or funding  shortfall  position at any particular  segment.
      The following  tables  present  segment data for the Company for the three
      and six month periods ended March 31, 2007 and 2006, respectively.



                                     Traditional     Meta Payment
                                       Banking         Systems       All Others        Total
---------------------------------    ------------    ------------    -----------    ------------
                                                                        
Three Months Ended March 31, 2007
   Net interest income (expense)     $      4,215    $      1,697    $      (238)   $      5,674
   Provision for loan losses                 (280)             --             --            (280)
   Non-interest income                        726           3,482             24           4,232
   Non-interest expense                     4,463           4,370            359           9,192
                                     ------------    ------------    -----------    ------------
Net income (loss) before tax                  758             809           (573)            994
   Income tax expense (benefit)               281             270           (160)            391
                                     ------------    ------------    -----------    ------------
Net income (loss)                    $        477    $        539    $      (413)   $        603
                                     ============    ============    ===========    ============

Inter-segment revenue (expense)      $     (1,699)   $      1,699    $        --    $         --
Total assets                              501,772         229,466         (1,812)        729,426
Total deposits                            355,363         224,216             --         579,579

Three Months Ended March 31, 2006
   Net interest income (expense)     $      3,915    $      1,234    $      (160)   $      4,989
   Provision for loan losses                 (350)             --             --            (350)
   Non-interest income                        668           1,501             28           2,197
   Non-interest expense                     4,761           2,191            248           7,200
                                     ------------    ------------    -----------    ------------
Net income (loss) before tax                  172             544           (380)            336
   Income tax expense (benefit)                53             188           (166)             75
                                     ------------    ------------    -----------    ------------
Net income (loss)                    $        119    $        356    $      (214)   $        261
                                     ============    ============    ===========    ============

Inter-segment revenue (expense)      $       (775)   $        933    $      (158)   $         --
Total assets                              625,801         117,536          2,103         745,440
Total deposits                            422,059         118,366             --         540,425



                                       15




                                     Traditional     Meta Payment
                                       Banking         Systems       All Others         Total
---------------------------------    ------------    ------------    -----------    ------------
                                                                        
Six Months Ended March 31, 2007
   Net interest income (expense)     $      8,320    $      3,084    $      (471)   $     10,933
   Provision for loan losses                5,185              --             --           5,185
   Non-interest income                      1,200           6,944             49           8,193
   Non-interest expense                     8,962           8,321            739          18,022
                                     ------------    ------------    -----------    ------------
Net income (loss) before tax               (4,627)          1,707         (1,161)         (4,081)
   Income tax expense (benefit)            (1,641)            562           (351)         (1,430)
                                     ------------    ------------    -----------    ------------
Net income (loss)                    $     (2,986)   $      1,145    $      (810)   $     (2,651)
                                     ============    ============    ===========    ============

Inter-segment revenue (expense)      $     (3,066)   $      3,066    $        --    $         --
Total assets                              501,772         229,466         (1,812)        729,426
Total deposits                            355,363         224,216             --         579,579

Six Months Ended March 31, 2006
   Net interest income (expense)     $      8,039    $      1,991    $      (321)   $      9,709
   Provision for loan losses                 (309)             --             --            (309)
   Non-interest income                      1,250           2,739             54           4,043
   Non-interest expense                     9,047           3,432            511          12,990
                                     ------------    ------------    -----------    ------------
Net income (loss) before tax                  551           1,298           (778)          1,071
   Income tax expense (benefit)               185             448           (339)            294
                                     ------------    ------------    -----------    ------------
Net income (loss)                    $        366    $        850    $      (439)   $        777
                                     ============    ============    ===========    ============

Inter-segment revenue (expense)      $     (1,100)   $      1,419    $      (319)   $         --
Total assets                              625,801         117,536          2,103         745,440
Total deposits                            422,059         118,366             --         540,425


7.    SUBSEQUENT EVENT

      On  January  31,  2007,  MetaBank  announced  that  it  had  entered  into
      agreements to sell four of its Northwest Iowa branches.  On April 13, 2007
      MetaBank  consummated  the  sale of its  Laurens  office  to Iowa  Trust &
      Savings Bank in Emmetsburg,  Iowa. Iowa State Bank in Sac City, Iowa, will
      purchase the MetaBank  offices in Sac City, Lake View, and Odebolt,  Iowa.
      This  transaction is anticipated to close on May 18, 2007.  Together,  the
      transactions  will  involve  the  assumption  by the  acquiring  banks  of
      approximately  $40.4  million in deposits and the purchase of $1.2 million
      in loans.  Meta Financial Group expects the  transactions  will generate a
      pre-tax gain on sale of approximately $3.4 million.


                                       16


8.    NEW ACCOUNTING PRONOUNCEMENTS

      In September  2006,  the Financial  Accounting  Standards  Board  ("FASB")
      issued Statement No. 157, ("SFAS No. 157"), Fair Value Measurements.  This
      Statement  defines fair value,  establishes a framework for measuring fair
      value, and expands disclosures about fair value measurements. 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.  This
      Statement does not require any new fair value measurements, but rather, it
      provides enhanced guidance to other  pronouncements that require or permit
      assets or  liabilities  to be measured at fair value.  This  Statement  is
      effective for fiscal years beginning after November 15, 2007, with earlier
      adoption permitted.  The Company does not expect that the adoption of this
      Statement will have a material impact on its financial  position,  results
      of operation and cash flows.

      In February  2007,  the FASB issued  Statement No. 159,  ("SFAS No. 159"),
      "The Fair Value Option for Financial  Assets and  Financial  Liabilities."
      This  Statement  permits  entities  to choose to  measure  many  financial
      instruments  and certain  other items at fair value.  The  objective is to
      improve financial  reporting by providing entities with the opportunity to
      mitigate  volatility  in reported  earnings  caused by  measuring  related
      assets and liabilities  differently  without having to apply complex hedge
      accounting provisions. Most of the provisions of this Statement apply only
      to entities  that elect the fair value option.  However,  the amendment to
      FASB  Statement No. 115,  Accounting  for Certain  Investments in Debt and
      Equity  Securities,  applies to all entities with  available-for-sale  and
      trading  securities.  Unrealized  gains and  losses on items for which the
      fair value option has been elected are required to be reported in earnings
      at each  reporting  date.  This  Statement is  effective  for fiscal years
      beginning after November 15, 2007, with earlier  adoption  permitted.  The
      Company  does not expect that the adoption of this  Statement  will have a
      material impact on its financial  position,  results of operation and cash
      flows.


                                       17


Part I.     Financial Information
Item 2.     Management's Discussion and Analysis of Financial Condition and
            Results of Operations

                           META FINANCIAL GROUP, INC.
                                AND SUBSIDIARIES

FORWARD LOOKING STATEMENTS

The Company,  and its wholly-owned  subsidiaries,  MetaBank and MetaBank WC, may
from time to time make written or oral "forward-looking  statements,"  including
statements contained in its filings with the Securities and Exchange Commission,
in its reports to  shareholders,  and in other  communications  by the  Company,
which  are made in good  faith by the  Company  pursuant  to the  "safe  harbor"
provisions of the Private Securities Litigation Reform Act of 1995.

These  forward-looking   statements  include  statements  with  respect  to  the
Company's  beliefs,  expectations,  estimates and intentions that are subject to
significant risks and uncertainties,  and are subject to change based on various
factors,  some of which are beyond the Company's  control.  Such  statements may
address: future operating results; customer growth and retention; loan and other
product  demand;  earnings growth and  expectations;  new products and services,
such as those offered by the Meta Payment Systems  division;  credit quality and
adequacy of reserves;  technology;  and our  employees.  The following  factors,
among  others,  could  cause  the  Company's  financial  performance  to  differ
materially from the expectations,  estimates,  and intentions  expressed in such
forward-looking statements: the strength of the United States economy in general
and  the  strength  of  the  local  economies  in  which  the  Company  conducts
operations; the effects of, and changes in, trade, monetary, and fiscal policies
and laws,  including  interest  rate  policies  of the  Federal  Reserve  Board;
inflation,  interest  rate,  market,  and  monetary  fluctuations;   the  timely
development  of and  acceptance  of new products and services of the Company and
the perceived  overall value of these products and services by users; the impact
of changes in financial services' laws and regulations;  technological  changes;
acquisitions;  litigation;  changes in consumer spending and saving habits;  and
the success of the Company at managing  and  collecting  assets of  borrowers in
default and managing the risks involved in the foregoing.

The  foregoing  list of  factors is not  exclusive.  Additional  discussions  of
factors  affecting  the  Company's  business and  prospects are contained in the
Company's  periodic  filings with the SEC. The Company  expressly  disclaims any
intent or obligation to update any forward-looking statement, whether written or
oral, that may be made from time to time by or on behalf of the Company.

GENERAL

Meta Financial Group, Inc. is a bank holding company whose primary  subsidiaries
are MetaBank and MetaBank West Central.  The Company was incorporated in 1993 as
a unitary non-diversified savings and loan holding company that, on September 20
of that year,  acquired all of the capital stock of MetaBank,  a federal savings
bank,  in connection  with  MetaBank's  conversion  from mutual to stock form of
ownership.  On September 30, 1996, the Company became a bank holding  company in
conjunction  with the acquisition of MetaBank WC, a  state-chartered  commercial
bank.

The following discussion focuses on the consolidated  financial condition of the
Company and its subsidiaries, at March 31, 2007, compared to September 30, 2006,
and the  consolidated  results of operations for the three and six month periods
ended March 31, 2007 and 2006.  This  discussion  should be read in  conjunction
with the Company's consolidated financial statements, and notes thereto, for the
year ended September 30, 2006.


                                       18


CORPORATE DEVELOPMENTS AND OVERVIEW

The Company continues to emphasize  expansion in the growing  metropolitan areas
of Sioux Falls, South Dakota and Des Moines, Iowa. The Company focuses primarily
on establishing lending and deposit relationships with commercial businesses and
commercial  real estate  developments in these  communities.  In March 2007, the
Company also opened an  administrative  support office in Omaha.  On January 31,
2007,  the  Company  announced  a plan to divest  four of its  branches in rural
Northwest  Iowa.  See  Note 7 of  "Notes  to  Condensed  Consolidated  Financial
Statements.

The Company also continues to experience significant growth in its Meta Payments
Systems  (MPS)  division and is investing  for further  growth in this  business
unit.  MPS offers  prepaid  debit cards and other payment  systems  products and
services through a global  distribution  network. As a part of its normal course
of business, the division also attracts significant balances on low- and no-cost
demand deposits.  Further discussion of the financial results of MPS is included
below.

For the three months ended December 31, 2006, the Company announced  impairments
on two commercial lending  relationships which together reduced pre-tax earnings
by $5.7  million.  Further  detail  on these  loans is  included  in  "Financial
Condition" and "Results of Operations" below.

The Company's stock trades on the NASDAQ Global Market under the symbol "CASH."

FINANCIAL CONDITION

As of March 31, 2007, the Company had assets totaling  $729.4 million,  compared
to $741.6 million at September 30, 2006. The decrease in assets of $12.2 million
resulted  primarily  from  decreases in the Company's  loan and  investment  and
securities portfolios.  The Company's loan portfolio,  net of allowance for loan
losses,  decreased  $14.4  million from $389.3  million at September 30, 2006 to
$374.9 million at March 31, 2007. The Company  continues to experience runoff in
its  commercial  loan  participation  and  commercial  real  estate  portfolios.
Management  attributes  this shrinkage to an overall  decrease in the demand for
credit and increased competition from the secondary market.

Investment  securities,  including  mortgage-backed  securities,  declined $16.9
million from $192.1 million at September 30, 2006 to $175.2 million at March 31,
2007.  The Company did not purchase any  securities  during the six months ended
March 31, 2007.

The decrease in loans and  securities was offset by an increase in cash and cash
equivalents  and federal funds sold of $20.1  million.  In general,  the Company
maintains  its cash  investments  in  interest-bearing  overnight  deposits with
various  correspondent  banks.  Federal  funds sold  deposits are  maintained at
various large commercial banks.

Total  deposits rose $13.9 million from $565.7  million at September 30, 2006 to
$579.6  million at March 31,  2007.  Most of this  increase was the result of an
increase in non-interest-bearing checking deposits of $60.4 million. Most of the
checking deposit increase arose from growth in deposits at Meta Payment Systems.
Higher costing money market,  savings,  and certificates of deposits,  including
public  funds,  declined  $47.8  million.  Other  deposit  portfolios  exhibited
moderate growth during this time period.

Total  wholesale  borrowings  also declined $23.9 million from $125.0 million at
September 30, 2006 to $101.1 million at March 31, 2007. The Company continues to
de-emphasize  these high cost funding  sources in an effort to decrease  overall
liability costs and to de-lever the Company's balance sheet.

At March 31, 2007,  the Company's  shareholders'  equity  totaled $44.7 million,
down  $609,000  from $45.3  million at  September  30,  2006.  The  decrease was
primarily the result of the reported fiscal 2007 year-to-date loss (see "Results
of Operations" below) and the payment of dividends on common stock,  offset by a
favorable change in


                                       19


the accumulated  other  comprehensive  loss on the Company's  available for sale
securities  portfolio.  At March 31,  2007,  the Company and both of its banking
subsidiaries,  MetaBank and MetaBank West Central,  continue to meet  regulatory
requirements for classification as well-capitalized institutions.

Nonperforming Assets and Allowance for Loan Losses

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 nonaccrual  status and, as a result of this action,  previously  accrued
interest income on the loan is taken out of current income. The loan will remain
on  nonaccrual  status  until the loan has been  brought  current or until other
circumstances  occur  that  provide  adequate  assurance  of full  repayment  of
interest and principal.

At March 31, 2007,  the Company had loans  delinquent 30- days and over totaling
$8.0 million,  or 2.11% of total loans,  compared to $5.5  million,  or 1.39% of
total loans,  at  September  30, 2006.  The increase in  delinquent  loans since
September is primarily the result of a delinquency on a $3.8 million  commercial
business loan relationship.

At March 31, 2007,  commercial and multi-family  real estate loans delinquent 30
days  and  over  totaled  $689,000,  or 0.18%  of  total  loans.  There  were no
delinquent  loans in this  category as of September 30, 2006.  Multi-family  and
commercial real estate loans generally present a higher level of risk than loans
secured by one-to-four  family  residences.  This greater risk is due to several
factors,  including,  but not limited to, the  concentration  of  principal in a
limited number of loans and borrowers, the effect of general economic conditions
on income producing  properties and the higher level of difficulty of evaluating
and  monitoring  these types of loans.  The Company  believes  that the level of
allowance for loan losses adequately  reflects  potential risks related to these
loans;  however  there  can  be no  assurance  that  all  loans  will  be  fully
collectible.

At March 31, 2007, commercial business loans delinquent 30 days and over totaled
$6.9 million,  or 1.82% of total loans. This compares to $5.1 million,  or 1.28%
of total loans, at September 30, 2006.  Commercial  business  lending involves a
greater  degree of risk  than  one-to-four  family  residential  mortgage  loans
because of the typically larger loan amounts. In addition, payments on loans are
typically  dependent on the cash flows  derived from the operation or management
of the  business to which the loan is made.  The success of the loan may also be
affected  by factors  outside the control of the  business,  such as  unforeseen
changes in  economic  conditions  for the  business,  the  industry in which the
business  operates or the general  environment.  The Company  believes  that the
level of allowance for loan losses adequately  reflects  potential risks related
to these loans;  however there can be no assurance  that all loans will be fully
collectible.

At March  31,  2007,  agricultural  loans  delinquent  30 days and over  totaled
$150,000,  or 0.04% of total loans. This compares to $201,000, or 0.05% of total
loans,  at September  30,  2006.  Agricultural  lending also  involves a greater
degree of risk than one-to-four family residential mortgage loans because of the
typically larger loan amounts.  In addition,  payments on loans are dependent on
the successful operation or management of the farm property securing the loan or
for which an  operating  loan is  utilized.  The success of the loan may also be
affected by factors outside the control of the  agricultural  borrower,  such as
the weather and grain and livestock prices.


                                       20


The  table  below  sets  forth  the  amounts  and  categories  of the  Company's
nonperforming assets. Foreclosed assets include assets acquired in settlement of
loans.



                                                  Nonperforming Assets As Of
                                             ------------------------------------
                                             March 31, 2007    September 30, 2006
                                             ------------------------------------
                                                    (Dollars in Thousands)
                                                         
Nonaccruing loans:
   One-to four-family                        $          242    $               31
   Commercial and multi-family                          689                    --
   Agricultural operating                               150                   182
   Commercial business                                2,900                 3,887
                                             --------------    ------------------
Total nonaccruing loans                               3,981                 4,100
                                             --------------    ------------------
Accruing loans delinquent 90 days or more                --                    --
                                             --------------    ------------------
Total nonperforming loans                             3,981                 4,100
                                             --------------    ------------------

Foreclosed assets:
   One-to four-family                                    --                    15
   Commercial and multi-family                           --                    35
                                             --------------    ------------------
Total foreclosed assets                                  --                    50
                                             --------------    ------------------
Total nonperforming assets                   $        3,981    $            4,150
                                             ==============    ==================
Total as a percentage of total assets                  0.55%                 0.56%


Classified assets.  Federal  regulations provide for the classification of loans
and other assets as "substandard",  "doubtful" or "loss",  based on the level of
weakness  determined  to be  inherent in the  collection  of the  principal  and
interest.  When loans are  classified  as either  substandard  or doubtful,  the
Company may  establish  general  allowances  for loan losses in an amount deemed
prudent by management.  General allowances  represent loss allowances which have
been  established  to  recognize  the  inherent  risk  associated  with  lending
activities,  but which, unlike specific  allowances,  have not been allocated to
particular  problem  loans.  When assets are  classified as loss, the Company is
required either to establish a specific  allowance for loan losses equal to 100%
of that portion of the loan so  classified,  or to charge-off  such amount.  The
Company's  determination as to the classification of its loans and the amount of
its  allowances  for  loan  losses  are  subject  to  review  by its  regulatory
authorities,  which may  require  the  establishment  of  additional  general or
specific allowances for loan losses. The discovery of additional  information in
the future may also  affect both the level of  classification  and the amount of
allowances for loan losses.

On the basis of management's  review of its loans and other assets, at March 31,
2007,  the  Company  had  classified  a total of $8.2  million  of its assets as
substandard,   $566,000  as  doubtful  and  none  as  loss.   This  compares  to
classifications  at  September  30, 2006 of $5.0 million  substandard,  $447,000
doubtful and none as loss.

Allowance  for loan  losses.  The Company  establishes  its  provision  for loan
losses, and evaluates the adequacy of its allowance for loan losses based upon a
systematic  methodology  consisting  of a number  of  factors  including,  among
others,  historic loss  experience,  the overall level of classified  assets and
nonperforming  loans,  the  composition  of its loan  portfolio  and the general
economic environment within which the Company and its borrowers operate.

At March 31, 2007,  the Company has  established  an  allowance  for loan losses
totaling $5.3 million, or 133% of nonperforming loans, compared to $6.0 million,
or 143% of nonperforming loans at September 30, 2006.


                                       21


The  following  table sets forth an  analysis of the  activity in the  Company's
allowance  for loan losses for the three and six month  periods  ended March 31,
2007 and 2006.



                                      Three Months Ended           Six Months Ended
                                          March 31,                   March 31,
                                   ------------------------    ------------------------
                                      2007          2006          2007          2006
                                   ------------------------    ------------------------
                                                  (Dollars in Thousands)
                                                                 
Beginning balance                  $   10,349    $    7,257    $    5,968    $    7,222
Provision charged to operations          (280)         (350)        5,185          (309)
Charge-offs                            (4,831)       (1,108)       (5,924)       (1,116)
Recoveries                                 44           199            53           201
                                   ------------------------    ------------------------
Ending balance                     $    5,282    $    5,998    $    5,282    $    5,998
                                   ========================    ========================


The allowance for loan losses  reflects  management's  best estimate of probable
losses inherent in the portfolio based on currently  available  information.  In
addition to the factors  mentioned above,  future additions to the allowance for
loan  losses  may become  necessary  based upon  changing  economic  conditions,
increased  loan  balances or changes in the  underlying  collateral  of the loan
portfolio.

CRITICAL ACCOUNTING POLICIES

The Company's  financial  statements are prepared in accordance  with accounting
principles  generally  accepted in the United  States of America.  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  involve  the  most  complex  and
subjective  decisions  and  assessments,  management  has  identified  its  most
critical  accounting  policies  to be those  related to the  allowance  for loan
losses and asset impairment judgments including the recoverability of goodwill.

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.  As the Company adds new products and increases the complexity
of its loan portfolio it will enhance its  methodology  accordingly.  Management
may have  reported a  materially  different  amount for the  provision  for loan
losses in the statement of operations to change the allowance for loan losses if
its assessment of the above factors were different. This discussion and analysis
should be read in conjunction  with the Company's  financial  statements and the
accompanying  notes presented  elsewhere  herein, as well as the portion of this
Management's  Discussion and Analysis section entitled "Nonperforming Assets and
Allowance  for Loan  Losses."  Although  management  believes  the  level of the
allowance as of March 31, 2007 was adequate to absorb  probable  losses inherent
in the loan portfolio, a decline in local economic conditions, or other factors,
could result in increasing losses.

Goodwill  represents the excess of acquisition  costs over the fair value of the
net assets acquired in a purchase  acquisition.  Goodwill is tested annually for
impairment.


                                       22


RESULTS OF OPERATIONS

General.  For the three months ended March 31,  2007,  the Company  recorded net
income of  $603,000,  or $0.23 per  diluted  share,  compared  to net  income of
$261,000,  or $0.10 per diluted share, for the same period in 2006.  Earnings in
the current  period were  impacted by  non-recurring  and  recurring fee income,
partially offset by higher compensation and card processing expenses. A net loss
of $2.7  million,  or $1.05 per diluted  share,  was  reported for the six month
period  ended March 31, 2007  compared to net income of  $777,000,  or $0.31 per
diluted share for the same period in the prior fiscal year. Earnings for the six
month  period  ended  March  31,  2007  were  impacted  by  the  recognition  of
impairments on two commercial loan relationships, which together reduced pre-tax
earnings by $5.74 million.  Additionally,  the Company incurred higher operating
expenses.  Offsetting  these factors,  in part, were increased  income from card
fees and higher net interest income.

Net interest  income.  Net interest income for the second quarter of fiscal year
2007 was $5.7  million,  up 12.6% from $5.0  million  in the  second  quarter of
fiscal year 2006. Both higher asset yields and lower liability costs contributed
to this  increase.  Net  interest  margin rose 49 basis points from 2.87% in the
second quarter of fiscal year 2006 to 3.36% in the current quarter.  The rise in
short term interest  rates during the past year  contributed to both higher loan
and investment yields.  Total asset yields for the second quarter of fiscal year
2007 were 6.10%, up 24 basis points from 5.86% for the same quarter last year. A
significant  change in deposit mix, away from higher  costing  certificates  and
public  funds  deposits  and  toward  low-  and  no-cost  demand  deposits  also
contributed to a meaningful decline in liability costs despite a higher interest
rate  environment.  Total liability costs fell 24 basis points from 2.98% in the
second quarter of fiscal year 2006 to 2.74% in the current quarter.  For the six
month period ended March 31, 2007 net interest income was $10.9 million compared
to $9.7  million  for the same period in the prior  fiscal  year.  Net  interest
margin was 3.21% for the six months  ended March 31,  2007,  up 45 basis  points
from 2.76% for the same period in the prior fiscal year.


                                       23


The following  tables present the Company's  average  interest  earning  assets,
interest bearing  liabilities,  net interest spread, and net interest margin for
the three and six month periods ended March 31, 2007 and 2006.



Three Months Ended March 31,                                2007                                2006
------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)                         Average     Interest                Average     Interest
                                             Outstanding   Earned /   Yield /    Outstanding   Earned /    Yield /
                                               Balance       Paid      Rate        Balance       Paid       Rate
------------------------------------------------------------------------------------------------------------------
                                                                                            
Interest-earning assets:
     Loans receivable                        $   370,055   $  6,615      7.24%   $   424,645   $   7,466      7.12%
     Mortgage-backed securities                  150,403      1,519      4.04%       190,108       1,822      3.83%
     Other investments and fed funds sold        160,061      2,155      5.39%        86,963         907      4.17%
                                             --------------------------------    ---------------------------------
Total interest-earning assets                    680,519   $ 10,289      6.10%       701,716   $  10,195      5.86%
                                                           ==================                  ===================
     Non-interest-earning assets                  47,211                              48,696
                                             -----------                         -----------
Total assets                                 $   727,730                         $   750,412
                                             ===========                         ===========

Non-interest bearing deposits                $   247,082   $     --      0.00%   $   139,127   $      --      0.00%
Interest-bearing liabilities:
     Interest-bearing checking                    28,901        163      2.28%        26,070         177      2.76%
     Savings                                      20,846        122      2.38%        54,490         381      2.84%
     Money markets                                66,303        519      3.17%        91,659         623      2.76%
     Time deposits                               214,387      2,386      4.51%       235,908       2,155      3.70%
     FHLB advances                                85,584      1,123      5.25%       132,252       1,523      4.61%
     Other borrowings                             16,145        302      7.49%        25,657         347      5.41%
                                             --------------------------------    ---------------------------------
Total interest-bearing liabilities               432,166      4,615      4.31%       566,036       5,206      3.71%
Total deposits and
   interest-bearing liabilities                  679,248   $  4,615      2.74%       705,163   $   5,206      2.98%
                                                           ==================                  ===================
     Other non-interest bearing liabilities        4,849                               3,016
                                             -----------                         -----------
Total liabilities                                684,097                             708,179
     Shareholders' equity                         43,633                              42,233
Total liabilities and                        -----------                         -----------
     shareholders' equity                    $   727,730                         $   750,412
                                             ===========                         ===========
Net interest income and net
   interest rate spread including
   non-interest bearing deposits                           $  5,674      3.35%                 $   4,989      2.88%
                                                           ==================                  ===================

Net interest margin                                                      3.36%                                2.87%
                                                                      =======                              =======



                                       24




Six Months Ended March 31,                                  2007                                2006
------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)                         Average     Interest                Average     Interest
                                             Outstanding   Earned /   Yield /    Outstanding   Earned /    Yield /
                                               Balance       Paid      Rate        Balance       Paid       Rate
------------------------------------------------------------------------------------------------------------------
                                                                                            
Interest-earning assets:
     Loans receivable                        $   375,614   $ 13,491      7.24%   $   428,387   $  15,052      7.04%
     Mortgage-backed securities                  152,776      3,125      4.09%       195,796       3,655      3.73%
     Other investments and fed funds sold        156,436      4,050      5.12%        83,706       1,664      3.98%
                                             --------------------------------    ---------------------------------
Total interest-earning assets                    684,827   $ 20,666      6.05%       707,889   $  20,371      5.77%
                                                           ==================                  ===================
     Non-interest-earning assets                  47,360                              46,308
                                             -----------                         -----------
Total assets                                 $   732,187                         $   754,197
                                             ===========                         ===========

Non-interest bearing deposits                $   226,666   $     --      0.00%   $   123,983   $      --      0.00%
Interest-bearing liabilities:
     Interest-bearing checking                    28,260        410      2.91%        26,250         380      2.90%
     Savings                                      23,772        311      2.62%        57,189         805      2.82%
     Money markets                                76,875      1,222      3.19%        88,317       1,095      2.49%
     Time deposits                               215,517      4,751      4.42%       245,085       4,403      3.60%
     FHLB advances                                90,750      2,361      5.15%       142,568       3,315      4.60%
     Other borrowings                             20,541        679      6.54%        25,320         664      5.19%
                                             --------------------------------    ---------------------------------
Total interest-bearing liabilities               455,715      9,733      4.26%       584,729      10,662      3.64%
Total deposits and
   interest-bearing liabilities                  682,382    $ 9,733      2.85%       708,712   $  10,662      3.00%
                                                           ==================                  ===================
     Other non-interest bearing liabilities        5,147                               2,837
                                             -----------                         -----------
Total liabilities                                687,528                             711,549
     Shareholders' equity                         44,658                              42,648
Total liabilities and                        -----------                         -----------
     shareholders' equity                    $   732,187                         $   754,197
                                             ===========                         ===========
Net interest income and net
   interest rate spread including
   non-interest bearing deposits                           $ 10,933      3.20%                 $   9,709      2.77%
                                                           ==================                  ===================

Net interest margin                                                      3.21%                                2.76%
                                                                      =======                              =======



                                       25


Provision  for loan loss.  The Company  recorded a negative  provision  for loan
losses in the  second  quarter of fiscal  year 2007 of  $280,000  compared  to a
negative provision of $350,000 for the same period in the prior fiscal year. The
Company  recorded a  provision  for the six months  ended  March 31, 2007 in the
amount of $5.2 million compared to a negative provision of $309,000 for the same
period in the prior fiscal year. The provision this year is directly  related to
two commercial loan relationships.  The Company recorded a $690,000 provision on
a loan  secured by the assets of a road paving  company and  recognized  a $4.95
million  provision  on  a  purchased   participation  loan   relationship.   See
"Nonperforming  Assets and Allowance for Loan Losses" herein.  Offsetting  these
specific  provisions,  the Company also recorded a $280,000  negative  provision
during the three  months  ended March 31, 2007 as a result of  shrinkage  in the
loan portfolio.

Non-interest  income.  Non-interest  income  for the  second  quarter  was  $4.2
million,  double the level from the same quarter a year ago. The increase is the
result of higher fee income generated by the Meta Payment Systems division. Fees
earned on prepaid  debit cards and other payment  systems  products and services
were $3.5 million for the second  quarter of fiscal year 2007,  compared to $1.4
million for the same quarter in fiscal year 2006. For the six months ended March
31, 2007, non-interest income totaled $8.2 million, compared to $4.0 million for
the same period in the prior fiscal year. Fees earned on prepaid debit cards and
other payment systems products and services were $6.9 million for the six months
ended March 31,  2007,  compared  to $2.7  million for the same period in fiscal
year 2006.

Non-interest  expense.  The Company's non interest  expense was $9.2 million for
the second quarter of fiscal year 2007,  reflecting a $2.0 million increase from
$7.2 million in the same  quarter in fiscal year 2006.  For the six months ended
March 31, 2007,  non-interest  expense totaled $18.0 million,  compared to $13.0
million  for the same period in the prior  fiscal  year.  The  increase is broad
based and is  generally  the  result  of the  Company's  investment  in the Meta
Payment Systems division.

Card  processing  expenses rose $647,000 from $942,000 in the second  quarter of
fiscal  year 2006 to $1.6  million in the  current  quarter.  For the six months
ended March 31, 2007, card processing expense totaled $3.2 million,  compared to
$1.3  million  for the same  period in the prior  fiscal  year.  These  expenses
reflect costs  associated  with  processing  and  delivering  debit card related
products and services.  Compensation expense rose $1.5 million on a quarter over
quarter  basis  to $4.5  million.  For the six  months  ended  March  31,  2007,
compensation expense totaled $8.6 million, compared to $6.1 million for the same
period in the prior fiscal year. This increase  reflects the staffing of two new
full service branches,  one each in Sioux Falls, SD and West Des Moines,  IA, an
increase  in the  sales  force  and  operations  support  staff at Meta  Payment
Systems,  and the addition of IT staff and other  administrative  support within
the  Company.  Many of the new  employees  at MPS and in IT will be  focused  on
developing new product lines and increasing  market  penetration of our payments
systems products and services. Other expenses at the Company have also exhibited
growth as business volumes have increased.  Increases in occupancy and equipment
expense   reflect  the   aforementioned   new   branches  and  the  addition  of
administrative office space in Sioux Falls.  Similarly,  increases in marketing,
legal and  consulting,  and other  expenses  reflect  the  Company's  continuing
efforts to support growth of business  opportunities  that  management  believes
will be profitable over time.

Income tax  expense.  For the second  quarter of fiscal  year 2007,  the Company
recorded  income tax  expense of  $391,000  compared  to $75,000  for the second
quarter of the prior fiscal year.  For the six months ended March 31, 2007,  the
Company  recorded a benefit in the amount of $1.4 million.  The benefit compares
to a $294,000  income tax  expense for the first six months of fiscal year 2006.
The change is due primarily to the change in net income (loss) before income tax
expense (benefit).

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of funds are deposits,  borrowings,  principal and
interest payments on loans,  investments,  and mortgage-backed  securities,  and
funds provided by other operating activities. While scheduled payments on loans,
mortgage-backed   securities,   and   short-term   investments   are  relatively
predictable sources of


                                       26


funds, deposit flows and early loan repayments are greatly influenced by general
interest rates, economic conditions, and competition.

The Company uses its capital resources  principally to meet ongoing  commitments
to fund  maturing  certificates  of deposits and loan  commitments,  to maintain
liquidity,  and to meet operating  expenses.  At March 31, 2007, the Company had
commitments to originate and purchase loans totaling $50.9 million.  The Company
believes that loan repayment and other sources of funds will be adequate to meet
its foreseeable short- and long-term liquidity needs.

Regulations  require  MetaBank and MetaBank WC to maintain  minimum  amounts and
ratios of total risk-based  capital and Tier 1 capital to risk-weighted  assets,
and a  leverage  ratio  consisting  of Tier 1 capital  to  average  assets.  The
following  table sets forth  MetaBank's  and  MetaBank  WC's actual  capital and
required  capital  amounts  and ratios at March 31,  2007  which,  at that date,
exceeded the minimum capital adequacy requirements.



                                                                                                            Minimum
                                                                                                       Requirement to Be
                                                                                     Minimum           Well Capitalized
                                                                                 Requirement For         Under Prompt
                                                                                 Capital Adequacy      Corrective Active
                                                              Actual                 Purposes             Provisions
                                                         ---------------------------------------------------------------
At March 31, 2007                                        Amount     Ratio      Amount      Ratio        Amount    Ratio
------------------------------------------------------------------------------------------------------------------------
                                                                              (Dollars in Thousands)

                                                                                                 
MetaBank
--------
   Tangible capital (to tangible assets)                 $ 46,109    6.68 %   $ 10,356     1.50 %           n/a      n/a
   Tier 1 (core) capital (to adjusted total assets)        46,109    6.68       27,616     4.00        $ 34,519     5.00 %
   Tier 1 (core) capital (to risk-weighted assets)         46,109   10.33       17,860     4.00          26,790     6.00
   Total risk-based capital (to risk-weighted assets)      50,134   11.23       35,720     8.00          44,651    10.00
MetaBank West Central
---------------------
   Tier 1 capital (to average assets)                       3,758    8.79        1,709     4.00           2,136     5.00
   Tier 1 risk-based capital (to risk-weighted assets)      3,758   15.88          946     4.00           1,420     6.00
   Total risk-based capital (to risk-weighted assets)       3,935   16.63        1,893     8.00           2,366    10.00


The Federal  Deposit  Insurance  Corporation  Improvement  Act of 1991  (FDICIA)
established  five  regulatory  capital  categories  and  authorized  the banking
regulators to take prompt  corrective  action with respect to institutions in an
undercapitalized  category. At March 31, 2007, MetaBank and MetaBank WC exceeded
minimum requirements for the well-capitalized category.


                                       27


Part I.     Financial Information
Item 3.     Quantitative and Qualitative Disclosure About Market Risk

MARKET RISK

The Company is exposed to the impact of interest rate changes and changes in the
market value of its investments.

The Company originates  predominantly adjustable rate loans and fixed rate loans
with  relatively  short  terms to  maturity.  Long term fixed  rate  residential
mortgages  are  generally  sold into the  secondary  market.  As a result of its
lending practices,  the Company's loan portfolio is relatively short in duration
and yields respond quickly to the overall level of interest rates.

The Company's primary  objective for its investment  portfolio is to provide the
liquidity necessary to meet the Company's cash demands.  This portfolio may also
be used in the ongoing management of interest rate risk. As a result,  funds may
be invested among various categories of security types and maturities based upon
the  Company's  need for  liquidity  and its desire to create an economic  hedge
against the effects  changes in  interest  rates may have on the overall  market
value of the Company.

The Company offers a full range of deposit  products  which are generally  short
term in nature.  Interest-bearing  checking,  savings, and money market accounts
generally  provide  a  stable  source  of funds  for the  bank and also  respond
relatively  quickly to changes in short term interest rates.  The Company offers
certificates  of deposit with  maturities  of three  months  through five years,
which  serve  to  extend  the  duration  of the  overall  deposit  portfolio.  A
significant  portion of the  Company's  deposit  portfolio  is  concentrated  in
non-interest-bearing  checking  accounts.  These  accounts serve to decrease the
Company's  overall cost of funds and reduce its  sensitivity to changes in short
term interest rates.

The Company also  maintains a portfolio of wholesale  borrowings,  predominantly
advances from the Federal Home Loan Bank which carry fixed terms and fixed rates
of interest. The Company utilizes this portfolio to manage liquidity demands and
also, when appropriate, in the ongoing management of interest rate risk.

The  Board of  Directors,  as well as the  Office of  Thrift  Supervision,  have
established  limits on the level of acceptable  interest rate risk. 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.


                                       28


Net Portfolio  Value. The Company uses a Net Portfolio Value ("NPV") approach to
the  quantification  of  interest  rate  risk.  This  approach   calculates  the
difference  between the present value of expected cash flows from assets and the
present  value of expected  cash flows from  liabilities,  as well as cash flows
from  off-balance-sheet  contracts.  The Company's Investment  Committee,  which
consists  of members of senior  management,  is  responsible  for  managing  the
interest rate risk of the Company.

Presented  below, as of March 31, 2007 and September 30, 2006, is an analysis of
the  Company's  interest  rate risk profile as measured by changes in NPV for an
instantaneous  and  sustained  parallel  shift in the yield curve,  in 100 basis
point increments, up and down 200 basis points. The Company's interest rate risk
profile has remained largely unchanged since September 30, 2006. In general, the
Company is more  exposed to a decline  in market  value from a falling  interest
rate  environment  than it is to a rising interest rate  environment.  This risk
profile is driven predominantly by the Company's large concentration in low- and
no-cost  checking  deposits.  At both March 31, 2007 and September 30, 2006, the
Company's  interest  rate risk profile was within the limits set by the Board of
Directors.  Additionally,  MetaBank's  interest rate risk profile was within the
limits set forth by the Office of Thrift Supervision.



                                               At March 31, 2007      At September 30, 2006
     Change in Interest Rates   Board Limit   -------------------     ---------------------
          (Basis Points)         % Change     $ Change   % Change     $ Change     % Change
     ------------------------   -----------   --------   --------     --------     --------
                                                         (Dollars in thousands)
                                                                      
             +200 bp               (40)%      $   (894)    (1)%       $    548        1%
             +100 bp               (25)           (250)    --              562        1
         0 bp (Base Case)           --              --     --               --       --
             -100 bp               (25)           (876)    (1)            (907)      (1)
             -200 bp               (40)         (4,279)    (6)          (4,139)      (6)


Certain  shortcomings  are  inherent in the method of analysis  presented in the
preceding 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 which restrict changes in interest rates on a short-term basis and over
the life of the  asset.  Further,  in the event of a change in  interest  rates,
prepayments and early withdrawal  levels would likely deviate from those assumed
in  calculating  the tables.  Finally,  the ability of some borrowers to service
their debt may decrease in the event of an interest rate  increase.  The Company
considers all of these factors in monitoring its exposure to interest rate risk.


                                       29


Part I.     Financial Information
Item 4.     Controls and Procedures

CONTROLS AND PROCEDURES

Any control system,  no matter how well designed and operated,  can provide only
reasonable   (not  absolute)   assurance  that  its  objectives   will  be  met.
Furthermore,  no evaluation of controls can provide absolute  assurance that all
control issues and instances of fraud, if any, have been detected.

DISCLOSURE CONTROLS AND PROCEDURES

The  Company's  management,  with  the  participation  of  the  Company's  Chief
Executive Officer and Chief Financial  Officer,  has evaluated the effectiveness
of the Company's disclosure controls and procedures,  as such term is defined in
Rules  13a - 15(e)  and  15d -  15(e)  of the  Securities  Exchange  Act of 1934
(Exchange Act) as of the end of the period covered by the report.

Based upon that  evaluation,  our Chief  Executive  Officer and Chief  Financial
Officer  concluded  that as of  March  31,  2007  our  disclosure  controls  and
procedures  were  effective  to  provide  reasonable   assurance  that  (i)  the
information  required  to be  disclosed  by  us in  this  Report  was  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
SEC's rules and forms,  and (ii)  information  required to be disclosed by us in
our reports that we file or submit under the  Exchange  Act is  accumulated  and
communicated to our management,  including our principal executive and principal
financial officers,  or persons performing similar functions,  as appropriate to
allow timely decisions regarding required disclosure.

INTERNAL CONTROL OVER FINANCIAL REPORTING

With  the  participation  of  the  Company's  management,  including  its  Chief
Executive  Officer and Chief  Financial  Officer,  the Company also conducted an
evaluation  of the  Company's  internal  control  over  financial  reporting  to
determine whether any changes occurred during the Company's fiscal quarter ended
March 31, 2007,  that have  materially  affected,  or are  reasonably  likely to
materially  affect,  the Company's  internal  control over financial  reporting.
Based on such evaluation, management concluded that, as of the end of the period
covered  by this  report,  there  have  not been any  changes  in the  Company's
internal  control  over  financial  reporting  (as such term is defined in Rules
13a-15(f)  and 15d-15(f)  under the Exchange  Act) during the fiscal  quarter to
which this report  relates  that have  materially  affected,  or are  reasonably
likely to materially  affect,  the  Company's  internal  control over  financial
reporting.


                                       30


                           META FINANCIAL GROUP, INC.

                           PART II - OTHER INFORMATION

                                    FORM 10-Q

Item 1.     Legal  Proceedings  - MetaBank  has been  named in several  lawsuits
            whose  eventual   outcome  could  have  an  adverse  effect  on  the
            consolidated  financial  position  or results of  operations  of the
            Company.  Because the likelihood or amount of an adverse  resolution
            to these matters cannot  currently be assessed,  the Company has not
            recorded a contingent liability related to these potential claims.

            On June 11, 2004, the Sioux Falls School  District filed suit in the
            Second Judicial Circuit Court alleging that MetaBank, a wholly-owned
            subsidiary of the Company,  improperly allowed funds, which belonged
            to the school  district,  to be  deposited  into,  and  subsequently
            withdrawn  from, a corporate  account  established by an employee of
            the school  district.  The school  district  is seeking in excess of
            $600,000. MetaBank has submitted the claim to its insurance carrier,
            and is working with counsel to vigorously contest the suit.

            On or about April 26, 2006,  MetaBank,  Meta Financial Group,  Inc.,
            Meta Trust  Company and J. Tyler Haahr were named as  defendants  in
            Dengler,  Flute,  et al v. Prairie Auto Group,  Inc., a class action
            lawsuit  filed in Circuit Court for the Second  Judicial  Circuit in
            Minnehaha  County,  South  Dakota.  This  lawsuit  appears  to  be a
            successor  suit to a series  of two state  and  three  tribal  court
            lawsuits that were filed in 2006,  reported on a previous  10-Q, but
            apparently subsequently abandoned by the plaintiffs. In this action,
            plaintiff class is comprised of individuals  who purchased  vehicles
            and/or  obtained  financing  from  the  J.D.  Byrider  franchise  in
            Pennington  County,  which  was  owned  and  operated  by  companies
            controlled  by Dan  Nelson.  Plaintiffs  allege  that the Dan Nelson
            companies,  including  the Dan Nelson  Auto Group  ("DNAG")  and the
            South Dakota Acceptance  Corporation  ("SDAC") and other affiliates,
            operated  under the J.D.  Byrider  franchise and business  model and
            engaged in abusive sales,  lending and consumer practices,  The bulk
            of the complaint  addresses the various alleged  fraudulent  schemes
            perpetrated  by  the  Nelson  companies   against  their  customers,
            principally the "buy here, pay here" model in which individuals with
            poor credit  histories were allegedly sold poor quality  vehicles at
            high prices with worthless warranties on usurious loan terms.

            MetaBank,  in conjunction with a roster of participating  banks, had
            provided  a series  of loans  and  lines of credit to DNAG and SDAC.
            Plaintiffs  allege that the MetaBank  entities  "participated in the
            fraudulent  scheme" by virtue of providing these lines of credit and
            loans despite being aware of the predatory consumer practices of the
            Nelson   companies,   and  that   MetaBank   profited  by  receiving
            undisclosed "special benefits" for providing these loans. DNAG, SDAC
            and Nelson have since filed for  bankruptcy.  Plaintiffs also allege
            that MetaBank did not  vigorously  pursue claims  against Nelson and
            fellow DNAG  executive  Chris  Tapken in their  respective  personal
            bankruptcies  in order to allow  these  individuals  to emerge  with
            control over assets of their former companies. The claims against J.
            Tyler Haahr personally are not explained,  other than that Haahr had
            a "long-standing  personal  relationship"  that allegedly led to the
            decision  by  MetaBank  to provide  loans and lines of credit to the
            various  entities  owned and  controlled  by  Nelson.  The  MetaBank
            entities have not yet filed an answer to this  complaint,  and there
            is no  discrete  amount of  damages  claimed  against  the  MetaBank
            entities,  so it would be premature to predict MetaBank's likelihood
            of success or amount of exposure in this lawsuit.  MetaBank  intends
            to vigorously contest these claims. MetaBank's liability insurer has
            already agreed to provide  coverage to the MetaBank  entities and J.
            Tyler  Haahr for this  claim,  and has  retained  and is paying  for
            counsel to defend this action.

            As was described in the Company's previous filings, MetaBank was the
            lead lender and servicer of approximately  $32.0 million in loans to
            three  auto   dealership   related   companies   and  their  owners.
            Approximately  $22.2  million  of the  total  had  been  sold to ten
            participating financial institutions. Each


                                       31


            participation agreement with the ten participant banks provides that
            the  participant  bank  shall  own a  specified  percentage  of  the
            outstanding  loan  balance at any give  time.  Each  agreement  also
            recites  the  maximum  amount that can be loaned by MetaBank on that
            particular  loan.   MetaBank   allocated  to  some  participants  an
            ownership  in  the  outstanding   loan  balance  in  excess  of  the
            percentage  specified  in  the  participation  agreement.   MetaBank
            believes that in each instance this was done with the full knowledge
            and consent of the participant.  Several  participants have demanded
            that  their  participations  be  adjusted  to match  the  percentage
            specified  in the  participant  agreement.  Based on the total  loan
            recoveries  projected as of March 31, 2007, MetaBank calculated that
            it would cost approximately  $953,000 to adjust these participations
            as the  participants  would have them adjusted.  A few  participants
            have more  recently  asserted  that  MetaBank  owes them  additional
            monies  based on  additional  legal  theories.  MetaBank  denies any
            obligation  to make the  requested  adjustments  on these or related
            claims.  Other than as disclosed  below,  MetaBank cannot predict at
            this  time  whether  any of  these  claims  will be the  subject  of
            litigation.

            During the three  months  ended June 30, 2006 or shortly  thereafter
            four lawsuits were filed against the Company's MetaBank  subsidiary.
            Three of the complaints are related to the Company's alleged actions
            in connection  with its activities as lead lender to three companies
            involved in auto sales,  service,  and financing and their owner. An
            additional  bank,  North  American Bank, has filed to join the First
            Midwest  Bank-Deerfield  Branches  case,  which  action has not been
            granted and is being  fought by  MetaBank.  All four  actions are in
            their  infancy and amount  cannot be  determined  at this time.  The
            Company intends, however, to vigorously defend its actions.

            First  Midwest  Bank-Deerfield  Branches  and  Mid-Country  Bank  v.
            MetaBank  (Civ.  No.  06-2241).  On June  28,  2006,  First  Midwest
            Bank-Deerfield  Branches  and  Mid-Country  Bank filed suit  against
            MetaBank in South Dakota's Second Judicial Circuit Court,  Minnehaha
            County,  in the above  titled  action.  The  complaint  alleges that
            plaintiff banks, who were  participating  lenders with MetaBank on a
            series of loans made to DNAG and SDAC, suffered damages exceeding $1
            million as a result of MetaBank's  placement and  administration  of
            the  loans  that  were  the   subject  of  the  loan   participation
            agreements. The complaint sounds in breach of contract,  negligence,
            gross  negligence,   negligent   misrepresentation,   fraud  in  the
            inducement,  unjust enrichment and breach of fiduciary duty. On July
            17, 2006,  MetaBank  removed the case from state court to the United
            States  District  Court for the District of South Dakota,  where the
            action has been assigned case no. Civ. 06-4114.  Plaintiff(s)  moved
            to remand the case back to state court,  but this motion was denied.
            A  scheduling  order was  recently  submitted  to the United  States
            District Court and discovery is just beginning.

            First Premier Bank v. MetaBank (Civ. No. 06-2277).  On July 5, 2006,
            First  Premier  Bank filed suit against  MetaBank in South  Dakota's
            Second Judicial Circuit Court,  Minnehaha County in the above titled
            action.  The complaint  alleges that First Premier,  a participating
            lender with MetaBank on a series of loans made to SDAC, has suffered
            damages in an as yet  undetermined  amount as a result of MetaBank's
            actions in selling to First Premier a  participation  in a loan made
            to SDAC and  MetaBank's  actions in  administering  that  loan.  The
            complaint  sounds in breach of contract,  breach of covenant of good
            faith  and  fair  dealing,  fraudulent  inducement,  fraud,  deceit,
            negligent    misrepresentation,     fraudulent    misrepresentation,
            conversion,  negligence, gross negligence,  breach of fiduciary duty
            and unjust enrichment.  On July 17, 2006,  MetaBank removed the case
            from  state  court  to the  United  States  District  Court  for the
            District of South  Dakota,  where the action has been  assigned case
            no.  Civ.  06-4115.  Plaintiff(s)  moved to remand  the case back to
            state  court,  but this motion was denied.  A  scheduling  order was
            recently submitted to the United States District Court and discovery
            is just beginning.

            Home Federal  Bank v. J. Tyler Haahr,  Daniel A. Nelson and MetaBank
            (Civ. No.  06-2230).  On June 26, 2006, Home Federal Bank filed suit
            against MetaBank and two  individuals,  J. Tyler Haahr and Daniel A.
            Nelson,  in South Dakota's Second Judicial Circuit Court,  Minnehaha
            County in the above


                                       32


            titled  action.   The  complaint   alleges  that  Home  Federal,   a
            participating lender with MetaBank on a series of loans made to DNAG
            and SDAC,  suffered  damages  exceeding  $3.8 million as a result of
            failure to make  disclosures  regarding an  investigation of Nelson,
            DNAG and SDAC by the Iowa Attorney  General at the time Home Federal
            agreed to an extension  of the loan  participation  agreements.  The
            complaint sounds in fraud,  negligent  misrepresentation,  breach of
            fiduciary duty, conspiracy and breach of duty of good faith and fair
            dealing. Discovery in that matter is proceeding.

            Subject to a reservation of rights, the Company's  insurance carrier
            has agreed to cover the three claims described above.

            Meridian  Enterprises  Corporation v. Bank of America Corporation et
            al.  (Case  No.  4:06-cv-01117CDP).   On  July  21,  2006,  Meridian
            Enterprises   Corporation   ("Meridian")  filed  suit  against  Meta
            Financial Group, Inc. (Meta Payment Systems  division)  ("Meta") and
            other banks and financial  institutions  in the U.S.  District Court
            for the Eastern  District of  Missouri in the  above-titled  action.
            Meridian  is the  owner of U.S.  Patent  No.  5,025,372  (the " '372
            Patent"). The complaint alleges that Meta and the co-defendants each
            sell, administer,  process and/or sponsor an incentive program where
            cards are provided to participants in the incentive program that can
            be presented to retailers to make a purchase.  The complaint further
            alleges,  inter  alia,  that Meta and the  co-defendants  each use a
            computer to  determine  whether or not a  participant's  performance
            under the incentive program entitles the participant to an award, in
            which the computer also determines the amount of the award,  and the
            amount  of the award is based  upon the  level of the  participant's
            performance  in the incentive  program.  Accordingly,  the complaint
            sounds in infringement, inducement of infringement, and contributory
            infringement  of one or more claims of the '372 Patent.  On April 9,
            2007, Meridian's complaint was dismissed without prejudice.

            There are no other material  pending legal  proceedings to which the
            Company or its  subsidiaries is a party other than ordinary  routine
            litigation incidental to their respective businesses.


                                       33


Item 1.A.   Risk Factors - Other than the risk factors  described  below,  there
            have been no  material  changes  from those  described  in the "Risk
            Factors" section of the Company's Annual Report on Form 10-K for the
            period ended September 30, 2006.

            On March 15,  2006,  the Federal  Housing  Finance  Board  ("Finance
            Board"),  the federal  regulator  of the 12 Federal  Home Loan Banks
            ("FHLBs"), published for comment a proposal that would (i) establish
            a minimum retained  earnings  requirement for each Federal Home Loan
            Bank,  (ii) limit the amount of excess  stock that a Bank could have
            outstanding,  and (iii)  impose new  restrictions  on the timing and
            form of dividend  payment.  On December 22, 2006,  the Finance Board
            adopted a final rule  prohibiting  the FHLBs from issuing new excess
            stock to members (such as MetaBank and MetaBank West Central) if the
            amount of member  excess  stock  exceeds  one  percent of the FHLB's
            assets.  These  changes  will  not  have a  material  impact  on the
            Company.

            In connection  with the previously  disclosed  bankruptcy of certain
            borrowers of MetaBank,  MetaBank has experienced loan losses,  which
            have, in part, been passed on to various entities that  participated
            with MetaBank,  which was the lead lender at the time the loans were
            made.  Several of the  participant  banks have  contended,  over and
            above the allocation  issue raised by the participants and described
            in  previous  filings of the  Registrant,  that  MetaBank  owes such
            participants  additional monies,  and have threatened  MetaBank with
            legal action,  or have already  filed such legal action,  to recover
            said monies. In addition,  five lawsuits,  all containing  virtually
            identical  allegations to each of the others, have been filed naming
            several defendants,  including MetaBank and affiliates, on behalf of
            the purchasers of automobiles from the borrowers. It is contended by
            the  plaintiffs  in  these  five  lawsuits  that  MetaBank  and  its
            affiliates  conspired with the borrowers to defraud such purchasers.
            See  Footnote  4 to the  Financial  Statements  and  Part II - Other
            Information,  Item 1. Legal  Proceedings  herein.  If the Company is
            forced  to  defend  itself   against  this  pending  and  threatened
            litigation, the Company would incur additional legal expenses, which
            cannot be reasonably  estimated at this time, but which would affect
            overall profitability.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds - None
            -----------------------------------------------------------

Item 3.     Defaults Upon Senior Securities - None
            -------------------------------


                                       34


Item 4.     Submission of Matters to a Vote of Security Holders
            ---------------------------------------------------

            At the Company's Annual Meeting of Shareholders  held on January 22,
            2007 (the  "Annual  Meeting"),  the  shareholders  elected the three
            individuals  nominated  to serve as  directors  until  2010 or until
            their respective successors are elected and qualified,  as set forth
            in  Proposal I in the  Company's  Proxy  Statement  relating  to the
            Annual Meeting.  The three  individuals  elected,  and the number of
            votes cast for, or  withheld,  with  respect to each of them,  is as
            follows:

            E. Wayne Cooley        For:  1,605,953      Vote Withheld:  351,628
            J. Tyler Haahr         For:  1,646,225      Vote Withheld:  311,356
            Bradley C. Hanson      For:  1,672,134      Vote Withheld:  285,447

            The following  directors continue to serve on the Board of Directors
            following the Annual Meeting:  James S. Haahr,  E. Thurman  Gaskill,
            Frederick V. Moore, Rodney G. Muilenburg and Jeanne Partlow.

            Additionally,   the  shareholders  ratified  the  amendment  of  the
            Company's 2002 Omnibus Incentive Plan as set forth in Proposal II in
            the Company's  Proxy Statement  relating to the Annual Meeting.  The
            number of votes cast for and against the  amendment,  together  with
            abstentions and non-votes, are as follows:

                                  For:              1,151,815
                                  Against:            205,592
                                  Abstain:              3,498
                                  Non-Votes:          596,676

Item 5.     Other Information - None
            -----------------

Item 6.     Exhibits
            --------

            (a)   Exhibits:

                  31.1    Section 302 certification of Chief Executive Officer.

                  31.2    Section 302 certification of Chief Financial Officer.

                  32.1    Section 906 certification of Chief Executive Officer.

                  32.2    Section 906 certification of Chief Financial Officer.


                                       35


                           META FINANCIAL GROUP, INC.

                                   SIGNATURES

Pursuant  to the  requirements  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:       May 15, 2007                By:   /s/ J. Tyler Haahr
           ---------------                   -----------------------------
                                             J. Tyler Haahr, President,
                                                and Chief Executive Officer


Date:       May 15, 2007                By:   /s/ Jonathan M. Gaiser
           --------------                    -----------------------------
                                             Jonathan M. Gaiser, Senior Vice
                                               President, Secretary, Treasurer,
                                               and Chief Financial Officer


                                       36