META FINANCIAL GROUP INC
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>2
<FILENAME>ex10-12.txt
<TEXT>


                                                                   Exhibit 10.12

                       SETTLEMENT AGREEMENT BY AND BETWEEN
                       -----------------------------------

                      FIRST INDIANA BANK, N.A. AND METABANK
                      -------------------------------------

         This Settlement Agreement (the "Agreement"),  dated as of this 13th day
of March,  2006, is entered into by and between FIRST INDIANA BANK, N.A. ("FIB")
on the one hand,  and METABANK  f/k/a First  Federal  Savings Bank - Sioux Falls
("MetaBank") on the other hand.

                                    RECITALS

         WHEREAS,  on October 1, 2004, FIB and MetaBank executed a Participation
Certificate and Agreement (the "Participation  Agreement") whereby FIB agreed to
purchase a participation  in a certain  $20,000,000.00  revolving draw loan (the
"Loan"),   made  by  MetaBank  to  South  Dakota  Acceptance   Corporation  (the
"Borrower");

         WHEREAS,  the Borrower  filed its  petition  for Chapter 11  bankruptcy
relief in the United States Bankruptcy Court for the District of South Dakota on
June 20, 2005 (the  "Bankruptcy"),  which  constituted an event of default under
the terms and conditions of the Loan;

         WHEREAS,   as  of  the   Bankruptcy,   the  total  Loan   balance   was
$16,926,225.84,  and  FIB's  share of the Loan was  $6,000,000.00,  which  share
constituted 35.45% of the total outstanding Loan balance;

         WHEREAS,  a dispute  has  arisen  among the  parties  as to  MetaBank's
liability  to FIB for  allowing  FIB's share of the Loan to exceed 30 percent of
the Loan (the "Discrepancy"); and

         WHEREAS, the parties agree that it is in their mutual best interests to
resolve fully and finally their disputes, claims and controversies.

         NOW,  THEREFORE,  in  consideration of the foregoing and for the mutual
promises  contained herein, and for other good and valuable  consideration,  the
receipt and  sufficiency of which is hereby  acknowledged,  the parties agree as
follows:

                                    AGREEMENT

         1. The above-stated Recitals are hereby incorporated and made a part of
this Agreement as if fully restated herein.

         2.  Contemporaneously  with the execution and delivery of the Agreement
by all parties, MetaBank shall pay to FIB a lump sum payment of $461,000.00 (the
"Settlement Payment"), and FIB shall convey to MetaBank 2.724 percent (%) of the
Loan, so that FIB's  undivided  interest in the Loan shall equal 32.722  percent
(%) of the total Loan balance, or $5,539,000.00. MetaBank's interest in the Loan
will increase by $461,000.00.

         3. Upon  receipt  of the  Settlement  Payment  by FIB,  FIB  agrees for
itself, its respective successors,  heirs, executors,  estates,  administrators,
representatives,  attorneys,  agents,  and assigns,  and hereby does release and
forever  discharge  MetaBank,  and any of its past,  present and future parents,
subsidiaries,   and  affiliates,  and  their  respective  officers,   directors,
shareholders,   agents,   servants,   employees,   attorneys,   representatives,
predecessors,  successors,  and assigns (the "MetaBank Release Group"), from any
and  all  claims,  demands,   damages,   rights,  duties,  debts,   obligations,
liabilities,  actions  or  petitions  of any  kind,  whether  known or  unknown,
foreseen or unforeseen,  contingent,  actual, liquidated, or unliquidated,  from
the  beginning  of the world to the date of this  Agreement,  including  without
limitation  any of the  foregoing  arising  out of or related  to the Loan,  the
Discrepancy,  the Bankruptcy or the Participation Agreement,  provided, however,
that in the  event  any

                                       32
<PAGE>

person or entity in the MetaBank  Release Group is  subsequently  charged with a
felony  that  involves  or  relates  to  the  Loan,   the   Discrepancy  or  the
Participation  Agreement  and  subsequently  (i)  enters a plea of no contest or
guilty,  or (ii) is  otherwise  convicted  of the crime or any  lesser  included
felony,  the foregoing release shall be null and void and of no effect, but only
to the extent of the loss or damage  caused to FIB by the  conduct  constituting
the felony.

         4. Upon  payment to MetaBank by FIB as set forth in  paragraph 5 below,
MetaBank  agrees  for  itself,  its  respective  successors,  heirs,  executors,
estates,  administrators,  representatives,  attorneys, agents, and assigns, and
hereby does,  release,  and forever discharge FIB, and any of its past,  present
and future parents, subsidiaries, and affiliates, and their respective officers,
directors,     shareholders,    agents,    servants,    employees,    attorneys,
representatives,   predecessors,  successors,  and  assigns  (the  "FIB  Release
Group"),  from any and all claims,  demands,  damages,  rights,  duties,  debts,
obligations,  liabilities,  actions or petitions of any kind,  whether  known or
unknown,   foreseen  or   unforeseen,   contingent,   actual,   liquidated,   or
unliquidated,  from the  beginning  of the world to the date of this  Agreement,
including  without  limitation any of the foregoing arising out of or related to
the Loan, the  Discrepancy,  the  Bankruptcy,  or the  Participation  Agreement,
provided,  however,  that in the  event  that any  person  or  entity in the FIB
Release Group is subsequently  charged with a felony that involves or relates to
the Loan, the Discrepancy or the  Participation  Agreement and  subsequently (i)
enters a plea of no contest or guilty,  or (ii) is  otherwise  convicted  of the
crime or any lesser  included  felony,  the foregoing  release shall be null and
void and of no effect,  but only to the  extent of the loss or damage  caused to
MetaBank by the conduct constituting the felony.

         5. FIB and  MetaBank  acknowledge  that,  pursuant  to the terms of the
participation  agreement  concerning the ----------------------  Obligation (the
"Obligation"), FIB shall pay to MetaBank the sum of $2,423,049.87,  representing
MetaBank's full and entire  interest in the Obligation,  by wire transfer within
three (3) calendar days  following  the execution of this  Agreement by MetaBank
and its delivery to FIB.

         6. FIB  acknowledges  that, in exchange for receiving from MetaBank the
Settlement  Payment  representing  2.724 percent of the Loan, FIB hereby conveys
and assigns to MetaBank:  (a) all  accompanying  rights  formerly held by FIB in
connection with that Loan percentage, including but not limited to (i) the right
to pursue  other  parties for  losses,  and (ii) the right to all  proceeds  and
associated  recoveries,  no matter when  received or by who,  including  but not
limited to proceeds from the sale of contracts,  insurance  recoveries,  and any
and all other  payments or recoveries  that would be receivable by the holder of
the 2.724  percent of the Loan,  except for any interest  payments that may have
been  received by FIB from the Borrower on account of this 2.724  percent of the
Loan prior to the Borrower's bankruptcy filing on June 20, 2005; (b) any and all
claims against the Borrower or relating to transactions  with the Borrower;  and
(c) any and all rights it has against any other participant banks, including but
not limited to ---------------------------------.

         7. (a) The parties agree that they will keep  confidential the terms of
this  Agreement,  will not disclose the terms of the same,  and will cause their
respective officers, directors,  employees,  representatives,  agents, attorneys
and advisors not to disclose and to keep  confidential  the terms and conditions
of  this  Agreement  except  to  the  extent  required  by  (i)  law,  including
requirements  arising under the Securities  Exchange Act of 1934, as amended, or
(ii) by Court  process,  order,  subpoena  or  enforcement  proceedings  ("Court
Documents").

                                       33
<PAGE>

                  (b) In the event either party is served ("Served  Party") with
Court Documents (as defined in 7(a)(ii) above) requesting  information  relating
to the Agreement, the Served Party shall immediately forward a copy of the Court
Documents to the other party  ("Non-Served  Party") by Federal  Express.  In the
event the Non-Served  Party intends to object to disclosure of this Agreement or
its  terms  pursuant  to  the  Court  Documents,   the  Non-Served  Party  shall
immediately  (1) advise the Served Party of same; and (2) timely bring a motion,
action or other appropriate proceeding ("Motion") relating to the objection,  at
its sole  cost  and  expense  (including  attorneys'  fees.)  In the  event  the
Non-Served  Party  fails to advise on a timely  basis the  Served  Party that it
wishes to object to compliance with the Court Documents,  and/or fails to timely
bring on a Motion, then in that event the Served Party may comply with the Court
Documents.

                  (c) In the event the Agreement  and/or its terms are disclosed
pursuant  to 6(a) or (b),  the  parties  shall  have no further  obligations  to
maintain the confidentiality of the Agreement.

         8.  The  parties  acknowledge  and  represent  they  are  independently
represented  by counsel and have had the  opportunity to consult with counsel of
their choice prior to entering  into this  Agreement.  This  Agreement  has been
negotiated  by the  parties  hereto at arms  length  and shall not be  construed
against either party as the drafter. Each of the parties hereto acknowledges and
represents  that it is entering into this Agreement  freely and  voluntarily and
with the advice and consent of legal counsel.

         9. This  Agreement  is being  entered  into for the express  purpose of
making and entering into a full and final compromise,  adjustment and settlement
by and between MetaBank and FIB with regard to the subject matter hereof without
regard to the subsequent discovery or existence of different or additional facts
or events.

         10. This  Agreement  does not in any manner  constitute an admission of
liability or fault  whatsoever  by either  party.  The parties have entered into
this Agreement in order to avoid further expense,  inconvenience,  and delay and
to dispose of potentially expensive burdensome and protracted litigation.

         11.  This  Agreement  embodies  the entire  understanding  between  the
parties  with  respect to the  subject  matter  hereof and may be varied only by
subsequent written agreement signed by the parties. No representation,  promise,
inducement,  or statement  of  intentions  has been made by the parties  hereto,
which is not embodied in this Agreement.

         12. In the event of future litigation relating to this Agreement or any
provision of this Agreement,  the prevailing  party shall be entitled to recover
its  costs,   expenses  and  reasonable   attorney's  fees  (including  in-house
attorneys'  fees)  incurred  in the  enforcement  of this  Agreement,  including
enforcing the Agreement as a defense.

         13. This  Agreement  shall be construed and  interpreted  in accordance
with and governed by the laws of the State of Indiana  without  giving effect to
the  provisions,  policies or  principals  thereof  relating to choice of law or
conflict of law.

         14. Each party signing this  Agreement  represents and warrants to each
of the parties  that he or she is duly and fully  authorized  and  empowered  to
enter into and execute this  Agreement,  and that this  Agreement and all of its
terms are binding commitments of the party on whose behalf he or she purports to
act.

         15. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original, and all such counterparts together shall constitute
one of the same Agreement. A telecopy or facsimile signature shall be equivalent
to and binding as one original signature.

                                       34
<PAGE>






         AGREED AS OF THE DATE SET FORTH ABOVE.



                                                FIRST INDIANA BANK, N.A.


Dated:   March 13, 2006                         By:    /s/ Julie Fallon Hughes
         --------------                                -----------------------
                                                         First Vice President




                                                METABANK


Dated:   March 13, 2006                         By:    /s/ J. Tyler Haahr
         --------------                                -------------------
                                                         President and
                                                         Chief Executive Officer

                                       35

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</DOCUMENT>
