Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Q1 2019 Earnings Presentation
19 slides from Pathward Financial's earnings presentation, January 2019
Slide 1: Quarterly Investor Update First Quarter Fiscal Year 2019
Quarterly Investor Update First Quarter Fiscal Year 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements Meta Financial Group, Inc.® (the “Company” or "Meta") and its wholly-owned subsidiary, MetaBank® (the “Bank”), may from time to time make written or oral “forward-looking statements,” including statements contained in this investor update, the Company’s filings with the Se
Slide 3: Competitive Advantages
Competitive Advantages Differentiated Model • Diversification across businesses, platforms, and fee structures intended to drive consistent growth • History across economic cycles | Founded in 1954 | Initial public offering in 1993, Nasdaq listed Low-Cost Funding Advantage • National payments busine
Slide 4: Differentiated Approach to Driving Shareholder Value
Differentiated Approach to Driving Shareholder Value Increase Percentage of Funding from Core Deposits Optimize Earning Asset Mix Improve Operating Efficiencies 4 First Quarter Fiscal Year 2019 | Nasdaq: CASH
Slide 5: Increase Percentage of Funding from Core Deposits
Increase Percentage of Funding from Core Deposits Increasingly Leverage Payments Division • Gain greater share of deposits from strategic partner relationships • Develop additional products and services to deepen relationships Explore and Develop Other New Deposit Opportunities First Quarter Fiscal
Slide 6: Optimize Earning Asset Mix
Optimize Earning Asset Mix Selected Average Earning Asset Mix(1) Aspirational Earning Asset Mix Commercial Finance 30% Commercial Finance >55% Consumer & Warehouse Finance 8% Consumer & Warehouse Finance <15% Community Bank 22% Community Bank <15% Investments 39% Investments <20% (1) As of December
Slide 7: Improve Operating Efficiencies
Improve Operating Efficiencies Enhance efficiency ratio from current level • Expense discipline and generation of positive operating leverage – Eliminating redundant functions and improving collaboration across teams ⦁ Deep team and recent organizational changes ⦁ Executive team in place to lead org
Slide 8: Experienced Management Team
Experienced Management Team Industry MetaBank Experience Experience Executive Officers Prior Experience (years) (years) Brad Hanson • President at MetaBank President and Chief Executive Officer • Prior experience in financial services, including numerous banking, payment card 28 14 industry and tech
Slide 9: Differentiated Approach Creates Long-term Value
Differentiated Approach Creates Long-term Value Rising Earnings Power • Earnings Per Share Outlook Affirmed for Fiscal Years 2019(1) and 2020 Aspirational Target Qualitative Metrics • ROA > 2.0% • Efficiency ratio < 65% Long-Term Capital Management Options • Share repurchases • Dividend payout (1) E
Slide 10: Financial Highlights
Financial Highlights 10 First Quarter Fiscal Year 2019 | Nasdaq: CASH
Slide 11: Financial Highlights
Financial Highlights First Quarter Ended December 31, 2018 • Net income of $15.4 million, or $0.39 per diluted share, for the quarter; earnings per share more than doubled compared to the prior year quarter. • Net interest income grew to $60.3 million, an increase of $34.1 million, or 130%, compared
Slide 12: Scalable and Diversified Loan Portfolio
Scalable and Diversified Loan Portfolio National Commercial Lending Platforms Add Further Diversification All amounts presented are as of December 31, 2018 National Commercial Finance Community Banking Tax Services Commercial finance portfolio National 2.3% Community banking portfolio increased by 7
Slide 13: Example Consumer Credit Waterfall
Example Consumer Credit Waterfall Agreement structures limit downside risk Customer payments of principal, interest and fees Meta’s agreements include provisions for: • Program suspension or termination based on Collection Account collateral performance, among other reasons • Credit protection from
Slide 14: Asset Quality Remains Strong and Stable
Asset Quality Remains Strong and Stable Disciplined Credit Culture Continues to Drive Strong Asset Quality • Allowance for loan and lease losses was $21.3 million at December 31, 2018, compared to $8.9 million at December 31, 2017 • The fair value credit mark for the acquired Crestmark loans and lea
Slide 15: Regulatory Capital as of December 31, 2018
Regulatory Capital as of December 31, 2018 Strong capital remains above "well-capitalized" Management targets six-month average Bank capital ratios to reduce seasonality(1) MetaBank Six-Month Average Actual Target Tier 1 Leverage 9.46% >8.0% Total Risk-Based Capital 14.03% >12.0% Capital Deployment
Slide 16: Investment Highlights
Investment Highlights Differentiated Model • Targeted national commercial and consumer industries provide opportunities for growth Low-Cost Funding Advantage • Re-focused on increasing percentage of funding from core deposits Scalable Lending Platforms • Recent Crestmark acquisition provides scalabl
Slide 17: Appendix
Appendix 17 First Quarter Fiscal Year 2019 | Nasdaq: CASH
Slide 18: Quarterly Income Statement
Quarterly Income Statement 1Q19 Change From ($ in millions, except per share data) 1Q18 4Q18 1Q19 4Q18 1Q18 $ % $ % Net Interest Income 26.2 48.5 60.3 11.7 24% 34.1 130% Card & Deposit Fee Income 26.1 21.0 21.3 0.3 1% (4.8) (18)% Refund Transfer Product Fee Income 0.2 0.5 0.3 (0.3) (50)% 0.1 36% Tax
Slide 19: Average Balance Sheet
Average Balance Sheet Fiscal Quarter Average - Quarter Ended Dec. 31, 2017 March 31, 2018 June 30, 2018 Sept. 30, 2018 Dec. 31, 2018 1Q19 Change From ($ in millions) 1Q18 2Q18 3Q18 4Q18 1Q19 4Q18 1Q18 $ % $ % Cash and fed funds sold 100 132 57 61 45 (16) (26)% (55) (55)% Total Investments 2,254 2,26