Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — IPO Roadshow (August 2016)
29 slides from Pathward Financial's IPO roadshow presentation, Aug 8, 2016
Slide 1: Meta Financial Group Subordinated Notes Offering Investor Presentation
April 2016 Meta Financial Group, Inc.Subordinated Notes OfferingInvestor PresentationAugust 2016 Free Writing ProspectusDated August 8, 2016Filed pursuant to Rule 433Registration Number 333-212269
Slide 2: Forward Looking Statements
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Forward Looking Statements * Meta Financial Group, Inc. (the “Company”) has filed a shelf registration statement (File No. 333-212269) (including base prospectus), a
Slide 3: Terms of the Proposed Offering
Terms of the Proposed Offering * Issuer Security Principal Amount Structure Term Use of Proceeds Rating Covenants Redemption Underwriter Meta Financial Group, Inc. (Nasdaq: CASH) Subordinated Notes (Holding Company Level) $60 million Fixed-to-Floating Rate Subordinated Notes due 2026 10 Years (Non-C
Slide 4: Investment Highlights
Investment Highlights * Proven Leadership TeamConsistent and Well-Diversified Non-Interest Income StreamsA Leader in Issuance of Prepaid Debit Cards with Major Barriers to EntryStrong Capital and Liquidity PositionStable, Low-cost, Long Duration Deposit Funding AdvantageHigh Quality and Diversified
Slide 5: Who We Are
Who We Are BankingGrowing community bank in regions with strong economiesRetail Operations based in Iowa and South Dakota Strong and high quality commercial and agricultural loan growthAFS/IBEX (premium financing) asset acquisition completed in December 2014Platform for nationwide expansionHigh qual
Slide 6: Meta Financial Group Highlights
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Meta Financial Group Highlights Net Income (3QFY16 vs 3QFY15)Strong quarterly earnings for 3QFY16; Net Income $8.9MMYear-over-year growth of 91%Earnings ProfileSizab
Slide 7: Fiscal Q3 2016 Highlights
Fiscal Q3 2016 Highlights * Financial Highlights:$43.7MM in revenue compared to $30.1MM in Q3 201545% growth driven by $23.1MM in Tax Product revenue for the 2015 tax seasonNet income of $8.9MM versus $4.6MM in Q3 2015Diluted EPS of $1.04 versus $0.66 in Q3 2015Total average assets grew 31% from Q3
Slide 8: Meta Senior Management
Meta Senior Management Chairman and Chief Executive OfficerTyler Haahr has been with Meta Financial Group since 1997. Previously, he was a partner with the law firm of Lewis and Roca LLP, Phoenix, Arizona. Tyler received his B.S. degree in Accounting with honors at the University of South Dakota in
Slide 9: Banking – Retail Bank
Banking – Retail Bank Retail Bank Regional Community BankGrowing, profitable operationsAttractive combination of commercial, agricultural, retail and national insurance premium lendingLow-cost deposit base gives Bank competitive advantage on terms to attract high quality creditsExpect continued robu
Slide 10: Banking – AFS/IBEX
Banking – AFS/IBEX AFS/IBEX Loans to commercial businesses to fund their property, casualty, and liability insurance premiumsShort duration assetsHigher yields than alternative investments, particularly for the termLoans generally priced as a spread to Prime, reset higher if Prime moves higherSignif
Slide 11: Payments - Refund Advantage
Payments - Refund Advantage® Asset acquisition completed 4QFY15Offers tax refund-transfer (RTs) solutions through ACH direct deposit, check, and prepaid cardMeta does not make refund anticipation loansGrowth enhanced by new credit-advance product Processed a record number of RTs for Refund Advantage
Slide 12: Payments - Meta Payment Systems (MPS) Overview
Payments - Meta Payment Systems (MPS) Overview Prepaid card industry leader with payments diversificationContinuing to grow “annuity”-like stream of fee incomeAdjacent and complementary new product introductionRefund Advantage® – Tax channelAdditional MPS distributionFasterMoneyNew credit productsCo
Slide 13: Our Infrastructure Helps Widen Our Protective Moat
Our Infrastructure Helps Widen Our Protective “Moat” * Early adopter of sophisticated compliance systemsInvestments in Meta Payment Systems program design, training and technologyImplemented enhanced BSA/AML technologyEnhanced infrastructure supports growthPrior investments allow more focus on growi
Slide 14: Strategic Goals and Drivers
Strategic Goals and Drivers Optimize synergies: Banking and PaymentsStrong loan growth in local markets and AFS/IBEXContinue to improve upon earning asset mixLow cost deposits with long average life (approximately seven years) feed increasingly diverse asset mixUnlock value of non-interest bearing d
Slide 15: Capital Management
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Capital Management * Equity capital enhancement history$26.1 million and $11.7 million private placements supporting Refund Advantage acquisition and other growth in
Slide 16: Ample Balance Sheet Liquidity
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Ample Balance Sheet Liquidity * Meta Financial Group, Inc.As of June 30, 2016($MM) Meta Financial Group, Inc.As of June 30, 2016($MM) Cash & Equivalents $36.8 Securi
Slide 17: Deposits and Cost of Funds
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Deposits and Cost of Funds * Deposits* ($MM) Cost of Funds 0.13%Cost of Funds in 3Q16 Low Cost of Funds *Fiscal Quarter Average
Slide 18: Interest Rate Risk Management
Interest Rate Risk Management Positively leveraged for higher rate environmentOther Comprehensive Income volatile relative to peersWe believe GAAP understates balance sheet true value, particularly low-cost depositsExpect continued, increasing Net Interest Margin (NIM)Continued robust loan growth at
Slide 19: Appendix
Appendix 19
Slide 20: Earning Asset Mix & Net Interest Margin
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 * Earning Asset Mix & Net Interest Margin *Fiscal Quarter Average 41bpsNIM Expansion 86bps10 Year Treasury Yield Declined (Qtr Average) Mortgage-Backed Securities In
Slide 21: Assets – Earning Asset Mix
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Assets – Earning Asset Mix * Total Assets* ($MM) Total Investments* ($MM) Mortgage-Backed Securities Municipal Securities Other Securities 23.5%Asset Compound Annual
Slide 22: Loan Portfolio
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Loan Portfolio* ($MM) Total Gross Loans * *Fiscal Quarter Average Loan Composition*At June 30, 2016
Slide 23: Non-Performing Assets
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Non-Performing Assets * Non-Performing Assets ($MM) % of Total Assets Strong Asset Quality 0.07%NPAs as a percentage of total assets at 6/30/16.
Slide 24: Earnings Power While Growing Equity
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Earnings Power While Growing Equity *
Slide 25: Interest Coverage and Double Leverage
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Interest Coverage and Double Leverage * Double leverage ratio assumes 100% of gross proceeds downstreamed to the bank as equityInterest coverage assumes 6.00% rate o
Slide 26: Income Statement
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Income Statement * ¹ Includes $11.4MM gain on sale of GNMA securities² Includes $2.5MM gain on sale of securities³ Includes $(1.9)MM loss on sale of securities, $(1.
Slide 27: Balance Sheet
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Balance Sheet * Meta Financial Group($MM) Fiscal Quarter Average Fiscal Quarter Average Fiscal Quarter Average Fiscal Quarter Average Fiscal Quarter Average Fiscal Q
Slide 28: Interest Rate Sensitivity – What We Believe
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Interest Rate Sensitivity – What We Believe * We believe static interest rate risk results do not accurately reflect Meta’s true interest rate sensitivity due to our
Slide 29: Industry Recognition
Red:36Green: 48Blue: 98 Red: 28Green: 75Blue: 144 Red: 70Green: 137 Blue: 201 Red: 29Green: 169 Blue: 160 Red: 217Green: 230 Blue: 243 Industry Recognition * Top 50 of ACH originators in 2015Top 30 of ACH receivers in 2015 #44 “More double-digit goodness” (June 2015) based on average ROE over the pa