Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Q4 FY2019 Earnings Presentation
22 slides from Pathward Financial's earnings presentation, Oct 24, 2019
Slide 1: Quarterly Investor Update Fourth Quarter & Fiscal Year End 2019
Quarterly Investor Update Fourth Quarter & Fiscal Year End 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements The Company and MetaBank 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 Securities and Exchange Commission (“SEC”), the Company’s reports to stockholders, and i
Slide 3: Financial Highlights
Financial Highlights For the Applicable Period Ended September 30, 2019 Fourth Quarter Fiscal Year • Net income of $20.2 million, or $0.53 per diluted • Net income of $97.0 million, or $2.49 per diluted share, for the quarter. share, for the full fiscal year. • Net interest margin ("NIM") increased
Slide 4: Compelling Asset Mix Driving Differentiated NIM Expansion
Compelling Asset Mix Driving Differentiated NIM Expansion 1 Earning Asset Mix Yields Aspirational Selected Quarterly Average September 2018 June 2019 September 2019 September 2019 Earning Asset Mix Commercial Finance 23% 34% 36% 9.35% >55% Consumer & Warehouse Finance 6% 11% 12% 7.67% <15% Community
Slide 5: Diversified Loan Portfolio
Diversified Loan Portfolio At the Quarter Ended September 30, 2019 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 4Q19 % Change From ($ in thousands) 4Q19 3Q19 2Q19 1Q19 4Q18 3Q19 4Q18 Commercial Finance 1,916,230 1,835,850 1,665,891 1,617,880 1,509,849 4.4% 26.9% Asset-based lend
Slide 6: Commercial Finance Growth Engine
Commercial Finance Growth Engine Asset-Based Lending. Provide asset-based loans secured by assets such as inventory, accounts receivable, machinery & equipment, work-in-process and other assets. Other $99.7M SBA/USDA $88.8M Lease Financing. Provide flexible leasing solutions for technology, capital
Slide 7: Diversified Commercial Finance Portfolio
Diversified Commercial Finance Portfolio Commercial Finance Commercial Finance Geographic Concentrations1 Industry Concentrations1 Other 1.7% Midwest 25.9% Northeast West 16.1% 23.1% Southwest 12.3% 2 Southeast 20.9% • Experienced management team offers consultative approach to targeted commercial f
Slide 8: Disciplined Credit Culture Drives Strong Asset Quality
Disciplined Credit Culture Drives Strong Asset Quality 1 Excludes Tax Services NCOs and Related Seasonal Average Loans Tax Services NCOs and related seasonal average loans are excluded to adjust for the cyclicality of activity related to the overall economics of the tax services business line. Sourc
Slide 9: Ongoing Growth in Payments Deposits Driving Differentiated Funding Mix
Ongoing Growth in Payments Deposits Driving Differentiated Funding Mix Fourth Quarter Fiscal 2019 Primary deposit source derived from Payments division, which generates low- cost deposits, including prepaid and demand deposit solutions Generated $89.1 million in card and deposit fee income in fiscal
Slide 10: Interest Rate Risk Management
Interest Rate Risk Management September 30, 2019 12-Month Interest Rate Sensitivity from Base Net Interest Income 8% Net Interest Income modeled under an instantaneous, 6% parallel rate shock and a gradual parallel ramp. 4% 2% 0% Management also employs rigorous modeling techniques -2% under a varie
Slide 11: Strategy Update
Strategy Update 11 Fourth Quarter & Fiscal Year End 2019 | Nasdaq: CASH
Slide 12: Targeted Focus Areas
Targeted Focus Areas Tailored solutions to facilitate money movement, enabling payments providers to Payments grow their businesses and build more profitable customer relationships by creating and delivering payment solutions Incorporated in 1993, is the holding company for its banking subsidiary, M
Slide 13: Strategy to Drive Shareholder Value
Strategy to Drive Shareholder Value 1 2 3 KEY Increase Percentage of Optimize Interest-Earning Improve Operating Funding from Core Asset Mix Efficiencies INITIATIVES Deposits Expense discipline by improving collaboration Leverage payments division growth Replace lower-yielding loans and securities w
Slide 14: Long-Term Value Drivers
Long-Term Value Drivers Differentiated Model • Target niche commercial and consumer industries to provide opportunities for growth Low-Cost Funding Advantage • National payments business drives low-cost deposits • Re-focus on increasing percentage of funding from core deposits Scalable Lending Platf
Slide 15: Appendix
Appendix 15 Fourth Quarter & Fiscal Year End 2019 | Nasdaq: CASH
Slide 16: Regulatory Capital as of September 30, 2019
Regulatory Capital as of September 30, 2019 Strong capital remains above "well-capitalized" Capital Deployment Priorities 1. Growth initiatives 2. Share repurchases1 3. Dividend payout Meta Financial Group, Inc. MetaBank Minimum Requirement to be Well-Capitalized under Prompt Corrective Action (PCA)
Slide 17: Quarterly Income Statement
Quarterly Income Statement 4Q19 Change From ($ in millions, except per share data) 4Q19 3Q19 2Q19 1Q19 4Q18 3Q19 4Q18 $ % $ % Net Interest Income 65.6 67.0 71.4 60.3 48.5 (1.4) (2)% 17.1 35% Card & Deposit Fee Income 20.8 21.9 25.1 21.3 21.0 (1.1) (5)% (0.2) (1)% Refund Transfer Product Fee Income 0
Slide 18: Annual Income Statement
Annual Income Statement 2019 Change From ($ in millions, except per share data) 2019 2018 2017 2018 2017 $ % $ % Net Interest Income 264.2 130.5 93.2 133.7 102% 171.0 183% Card & Deposit Fee Income 89.1 98.9 95.4 (9.8) (10)% (6.3) (7)% Refund Transfer Product Fee Income 39.2 41.9 39.0 (2.7) (6)% 0.2
Slide 19: Average Balance Sheet
Average Balance Sheet Average - for the period ended Sep 30, 2019 Sep 30, 2018 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 4Q19 Change From FY19 Change From ($ in millions) 4Q19 4Q18 FY19 FY18 FY17 4Q18 FY18 $ % $ % Cash and fed funds sold 68 61 129 88 150 7 11% 41 47% Total Investments 1,463 2,201 1,710
Slide 20: Financial Measure Reconciliations
Financial Measure Reconciliations Efficiency Ratio For the last twelve months ended ($ in thousands) Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Noninterest Expense - GAAP 333,160 323,657 300,242 258,485 228,232 Net Interest Income 264,207 247,127 208,570 164,625 130,549 Noninte
Slide 21: Risk Management in Commercial Finance
Risk Management in Commercial Finance Underlying credit philosophy is fundamentally collateral-based lending with underwriting and monitoring focused on the risk management and administrative controls of the collateral borrowing base. Loans are underwritten to ensure that the Bank can recover the fu
Slide 22: Payments Solutions
Payments Solutions Prepaid Demand Deposits ACH Meta is a leader in applying innovative How DDA delivers value for consumers Turnkey and flexible ACH payments prepaid solutions to address key consumer implementation and business payments needs. Promotes strong direct deposit relationship, acceptance
Meta Financial Group — Q4 FY2019 Earnings Presentation on 6ix