Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Q4 FY2015 Earnings Presentation
30 slides from Pathward Financial's earnings presentation, Oct 30, 2015
Slide 1: Fourth Quarter FY2015 Investor Update
fourth QUARTER FY2015 Investor Update
Slide 2: META Management
META Management Chairman and Chief Executive Officer, Meta Financial GroupTyler Haahr has been with Meta Financial Group since March 1997. Previously, he was a partner with the law firm of Lewis and Roca LLP, Phoenix, Arizona. Tyler received his B.S. degree with honors at the University of South Dak
Slide 3: Highlights
> Net income$18.1MM in FY15, +15% vs. FY14Adjusted $20.4MM*, +30% vs. FY14 > Earnings profileROA of 0.78% and ROE of 8.83%Adjusted* ROA and ROE of 0.88% and 9.97%Revenues related to business development & implementation costs from new agreements & products historically lag 9-12 months > Very strong
Slide 4: Who We Are
MetaBank Meta Financial Group Net LOANS* $706M MPS Deposits* $1,424M STRONG ECONOMY IN LOCAL MARKETS BUSINESS PARTNERS > NetSpend> Money Network> Blackhawk> Unirush> INCOMM> Many Others * As of 09/30/2015 WHO WE ARE 4 Accelerating Growth Product/asset Expansion Compliant Assets* $2,530M > IOWA> SOUT
Slide 5: Who We Are
WHO WE ARE Growing community bank in regions with strong economiesBased in Iowa and South Dakota Strong and high quality commercial & ag loan growthAFS/IBEX asset acquisition completed in December 2014Platform for nationwide expansionHigh quality; strong and accelerating loan growth RETAIL BANK A to
Slide 6: Evolution of Meta Financial Group
6 Evolution of Meta Financial Group Community Bank MPS Start-Up Pre-Recession Regulatory Diversification ($ mil) 2000 2004 2007 2011 2015 Assets $506 $781 $686 $1,275 $2,530 Mkt Cap $23 $55 $103 $59 $290 TBV – not rounded $16.48 $18.98 $18.11 $25.19 $24.60 Net Income $2.3 $4.0 $1.2 $4.6 $18.1 Events
Slide 7: Meta Payment Systems
> Prepaid card industry leader with payments diversification> Deposit Growth ~ 25% (qtr avg) over prior year> Fee income up 16% vs 4Q14> Adjacent and complementary new product introductionsRefund Advantage – Tax channelFasterMoneyNew credit products> Strong systems and infrastructure Meta Payment Sy
Slide 8: Retail Bank
> Regional Community Bank60+ years in business 10 locations in IA and SD Growing, profitable operationsAttractive combination of commercial, agricultural, retail and insurance premium finance lending> Net loan growth of 22% ($105MM) last 12 Months> Expect continued robust loan growth in the next yea
Slide 9: Retail Bank – Premium Finance
Retail bank – premium finance 9 > AFS/IBEX was 7th largest U.S. insurance premium finance company in 2014> Loans to commercial businesses fund their property, casualty, and liability insurance premiums. Assisted by > 1,300 independent insurance agencies / brokersHigher yields than alternative invest
Slide 10: Industry Recognition
Industry RECOGNITION #44 in American Banker Magazine “More double-digit goodness” (June 2015) based on avg. roe over the past 3 years#48 in American Banker Magazine “Top 200 Community Banks and Thrifts” (June 2015) Top 1% based on 3 year ROETop 100 in ABA Banking Journal’s annual Performance Ranking
Slide 11: Strategic Goals
Strategic Goals Grow organically and by acquisition to achieve scaleDiversify business linesStrengthen balance sheet and grow revenueCreate a more strategic asset mixHire and develop the right people in the right rolesscalable operating infrastructureVertically integrate to gain more of the economic
Slide 12: Strategy: Optimize Synergies and Leverage MPS Leadership
> Optimize synergies: retail bank and MPSStrong loan growth in local markets and AFS/IBEXLow cost deposits feed increasingly diverse asset mixRising rates expected to increase yields while funding costs remain lowMBS portfolio yields & related income expected to increase significantly if rates rise>
Slide 13: Compliance and Competitive Barriers
> Early adopter of sophisticated compliance systems> OCC consent order removed in august 2014> Federal reserve bank consent order removed in may 2015> Investments in MPS program design, training and technologyImplemented enhanced BSA/AML technologyEnhanced infrastructure supports growthAdditional fo
Slide 14: Positioned for a Higher Rate Environment
> Positively leveraged for higher rate environment> OCI volatile relative to peers We believe GAAP understates balance sheet true value, particularly low cost depositsMeta mark includes ~50% of assets available for sale (securities) vs. typical “peer” at ~16% > Expect Continued, increasing Net Inter
Slide 15: Interest Rate Sensitivity
Interest Rate Sensitivity 15 > We believe static interest rate results do not accurately reflect true interest rate sensitivityDue to historically predictable weekly and monthly deposit volatility, IRR results can be significantly skewed based on which day of the week the model is implementedUtilizi
Slide 16: Capital Management
> Capital enhancementsRecent $26 million private placement supporting Fort Knox acquisition (+$25.5M stock issued to Fort Knox Owners)2014-15 ATM net proceeds of $25.4 million to support growth$61.0 million in 2012-13 via private placements and ATM offering> Maintain strong capital ratio goalsCommon
Slide 17: Earnings Power While Growing Equity
Earnings power while growing equity 17
Slide 18: Income Statement
Income statement ($000’s) * Includes $11.4M gain on sale of GNMA Securities** Includes $2.4M gain on sale of securities*** Includes $(1.9)M Loss on sale of securities, $(1.5)M Merger Expense, $(1.4)M Amortization Expense and $1.3M ins. claim reimbursements and recoveries less applicable taxes Meta F
Slide 19: Total Revenue
Total revenue $ millions 19 * Includes $11.4M gain on sale of GNMA Securities** Includes $2.4M gain on sale of securities*** Includes $(1.9)M Loss on sale of securities and $1.3M ins. claim reimbursements
Slide 20: Balance Sheet
Balance sheet ($000’s) 4Q10 4Q11 4Q12 4Q13 4Q14 4Q15 Cash And Cash Equivalents 94,248 132,149 106,067 73,733 100,159 80,485 Investments and MBS 511,011 615,320 998,826 1,176,811 1,320,364 1,534,243 Loans Receivable Net 369,563 314,484 329,689 364,100 484,690 683,976 Other Assets 64,037 64,825 61,412
Slide 21: Total Assets
Total assets* 19.0% CAGR $ millions 21 *Fiscal Quarter Average
Slide 22: Total Investments
Total Investments* $ millions 22 *Fiscal Quarter Average
Slide 23: Total Gross Loans
Total Gross loans* $ millions 23 *Fiscal Quarter Average
Slide 24: Loan Portfolio Composition
Loan Portfolio Composition* 24 * At September 30, 2015
Slide 25: Earning Asset Mix & Yield
EARNING ASSET MIX & YIELD Meta® ‘inancial Group’ ee Earning Assets Mix Compared to Net Interest Margin 45% 3.25% 40% 3.00% 35% 30% 275% 25% 2.50% 20% 15% 2.25% 10% 2.00% 5% ox 175% 9/30/2013 12/31/2013 3/31/2014 6/30/2014 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 Mortgage-Backed Securities
Slide 26: Non-performing Assets
Non-performing assets $ millions of non-performing assets % of total assets 26
Slide 27: Deposits and Cost of Funds
Deposits and cost of funds deposits - $ mill* Cost of Funds 27 *Quarter Average
Slide 28: Meta Value Proposition
> A leading issuer of prepaid debit cardsSpringboard into other products and services.Significant growth; current partners expanding & new partners added.> Strong capital positionEarnings and historical access to capital markets to fund our growth objectives. > Stable, low-cost funding advantage> Po
Slide 29: Forward Looking Statements
Forward Looking Statements Meta Financial Group, Inc.®, (“the Company”) and its wholly-owned subsidiary, MetaBank® (the “Bank” or “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 t
Slide 30: Meta Financial Group
Meta® Financial Group’ NASDAQ: CASH
Meta Financial Group — Q4 FY2015 Earnings Presentation on 6ix