Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Q1 FY2021 Earnings Presentation
30 slides from Pathward Financial's earnings presentation, Jan 27, 2021
Slide 1: Quarterly Investor Update First Quarter Fiscal Year 2021
Q U A R T E R LY I N V E S T O R U P DAT E F I R S T Q UA R T E R F I S C A L Y E A R 2 0 21
Slide 2: Forward-Looking Statements
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH F O R WA R D - L O O K I N G S TAT E M E N T S 2 This investor update contains “forward-looking statements” which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigat
Slide 3: We Are a Financial Enablement Company
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH3 W E A R E A F I N A N C I A L E N A B L E M E N T C O M PA N Y We work with innovators to increase financial availability, choice, and opportunity for all. We strive to remove barriers that traditional institutions put in the
Slide 4: Strong Revenue Growth and Disciplined Expense Management Drive Profitability
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH4 S T R O N G R E V E N U E G R O W T H A N D D I S C I P L I N E D E X P E N S E M A N A G E M E N T D R I V E P R O F I TA B I L I T Y F I R S T Q U A R T E R E N D E D D E C E M B E R 3 1 , 2 0 2 0 INCOME STATEMENT ($ in tho
Slide 5: Healthy Balance Sheet with Robust Payment Deposit Growth
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH5 H E A LT H Y B A L A N C E S H E E T W I T H R O B U S T PAY M E N T D E P O S I T G R O W T H F I R S T Q U A R T E R E N D E D D E C E M B E R 3 1 , 2 0 2 0 BALANCE SHEET PERIOD ENDING AVERAGE ($ in thousands) 1Q21 4Q20 1Q2
Slide 6: Differentiated Business Lines with Significant Growth Opportunities
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH6 D I F F E R E N T I AT E D B U S I N E S S L I N E S W I T H S I G N I F I C A N T G R O W T H O P P O R T U N I T I E S C O M M E R C I A L F I N A N C E Enables fintechs, finservs, and various organizations by distributing
Slide 7: First Quarter Business Highlights & Key Strategic Initiatives
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH7 F I R S T Q U A R T E R B U S I N E S S H I G H L I G H T S & K E Y S T R AT E G I C I N I T I AT I V E S INCREASE PERCENTAGE OF FUNDING FROM CORE DEPOSITS OPTIMIZE INTEREST-EARNING ASSET MIX IMPROVE OPERATING EFFICIENCIES Ef
Slide 8: Diversified Earning Asset Portfolio
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH 72% 26% 2% 38% 23% 11% 62% 23% 15% D I V E R S I F I E D E A R N I N G A S S E T P O R T F O L I O 8 QUARTERLY AVERAGE EARNING ASSET MIX DEC 2019 $5.20 billion INTEREST EARNING ASSETS 43% 9% 10% DEC 2020 $5.64 billion INTEREST
Slide 9: Payments & Tax Services
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH PAY MENT S & TA X SERVICES 9
Slide 10: Payments Business Solutions
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH10 PAY M E N T S B U S I N E S S S O L U T I O N S P R E P A I D B A N K I N G A S A S E R V I C E Facilitate Transactional Payments including: Faster Payments, ACH, merchant acquiring and ATM Sponsorship. Ranked among Top 50 o
Slide 11: Payments Business Update
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH $2.45 $2.71 $3.57 $2.78 $4.32 $0.98 $0.75 2018 2019 2020 1Q20 1Q21 Average Payments Deposits ($ in billions) 11 PAY M E N T S B U S I N E S S U P DAT E 21% CAGR 2018 – 2020 Excl. EIP Card Balances • Selected as the prepaid deb
Slide 12: Overview of Strategic Relationship with H&R Block
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH12 PROGRAM MANAGER H&R Block / Emerald Financial Services, LLC PAYMENTS Emerald Prepaid Mastercard® Emerald Savings® TAX SERVICES Refund Advance Refund Transfers CONSUMER FINANCE Emerald Advance® Line of Credit O V E R V I E W
Slide 13: Commercial Finance & Community Bank Portfolios
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH COMMERCIA L F INA NCE & COMMUNIT Y BA NK POR T FOL IOS 13
Slide 14: Commercial Finance Portfolio Descriptions
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH TERM LENDING. Collateralized conventional term loans and notes receivable, weighted average life of 53 months. Exposure is concentrated in solar/alternative energy, most of which are construction projects that will convert to
Slide 15: Distribution of Commercial Finance Portfolio by Industry
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH D I S T R I B U T I O N O F C O M M E R C I A L F I N A N C E P O R T F O L I O B Y I N D U S T R Y ¹ 15 1 Distribution by NAICS codes; excludes certain joint ventures; percentages calculated based on aggregate principal amoun
Slide 16: Commercial Finance Mix
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH Outstanding Balance % of Total² M A N UF ACTURING $ 4 1 9 . 1 1 1 . 5 % Computer and Electronic Product Manufacturing 67.2 1.8% Fabricated Metal Product Manufacturing 51.2 1.4% Transportation Equipment Manufacturing 42.3 1.2%
Slide 17: Legacy Community Bank Portfolio Breakdown
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH L E G A C Y C O M M U N I T Y B A N K P O R T F O L I O B R E A K D O W N A S O F D E C E M B E R 3 1 , 2 0 2 0 | S E R V I C E D B Y C E N T R A L B A N K 17 COMMERCIAL REAL ESTATE INDUSTRY COMPOSITION ($ in millions) Outstan
Slide 18: Legacy Community Bank Hotel Portfolio
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH L E G A C Y C O M M U N I T Y B A N K | H O T E L P O R T F O L I O A S O F D E C E M B E R 3 1 , 2 0 2 0 | S E R V I C E D B Y C E N T R A L B A N K 18 $186.7 million outstanding, total exposure of $197.9 million including un
Slide 19: Asset Quality, Interest Rate Risk, & Capital
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH A SSET QUA L IT Y, INT ER EST R AT E R ISK , & CA PITA L 19
Slide 20: Asset Quality
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH A S S E T Q U A L I T Y 20 Credit quality remains strong. Allowance for credit losses (“ACL”) $72.4 million, or 2.10% of total loans and leases as of December 31, 2020. • ACL 171% of nonperforming loans • Legacy community bank
Slide 21: Asset Quality: Past Due Loans and COVID-19 Modifications
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH $53.7 $52.3 $51.2 $193.3 $85.3 1Q20 4Q20 1Q21 $ i n m il li o n s Past Due Loans & Leases + COVID-10 Modifications & Deferrals Total Past Due COVID-19 Modifications & Deferrals A S S E T Q U A L I T Y 21 1 Small ticket equipme
Slide 22: Interest Rate Sensitivity and Gap Analysis
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH Month 1-12 Month 13-36 Month 37-60 Month 61-180 -2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 V o lu m e ( $ M M ) Period Variance Total Assets Total Liabilities -5% 5% 15% 25% 35% 45% -100 +100 +200 +300 12-MONTH INTEREST RAT
Slide 23: Strong Capital and Sources of Liquidity
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH S T R O N G C A P I TA L A N D S O U R C E S O F L I Q U I D I T Y R E G U L A T O R Y C A P I T A L A S O F D E C E M B E R 3 1 , 2 0 2 0 23 Minimum Requirement to be Well-Capitalized under Prompt Corrective Action Provisions
Slide 24: Appendix
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH A PPENDIX 24
Slide 25: Non-GAAP Reconciliations: EIP-Related Adjustments
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH N O N - G A A P R E C O N C I L I AT I O N S E I P - R E L A T E D A D J U S T M E N T S 25 THREE MONTHS ENDED NET INTEREST MARGIN DECEMBER 31, 2020 SEPTEMBER 30, 2020 JUNE 30, 2020 Average interest-earning assets 5,636,445 6,
Slide 26: Non-GAAP Reconciliations: EIP-Related Capital Adjustments
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH N O N - G A A P R E C O N C I L I AT I O N S E I P - R E L A T E D C A P I T A L A D J U S T M E N T S 26 METABANK TIER 1 LEVERAGE DECEMBER 31, 2020 SEPTEMBER 30, 2020 JUNE 30, 2020 Total stockholder's equity $ 912,508 $ 933,4
Slide 27: Financial Measure Reconciliations
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH F I N A N C I A L M E A S U R E R E C O N C I L I AT I O N S 27 Efficiency Ratio For the last twelve months ended ($ in thousands) Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Noninterest Expense - GAAP 315
Slide 28: Limited Total Exposure to COVID-19 High Impact Industries
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH L I M I T E D T O TA L E X P O S U R E T O C O V I D - 1 9 H I G H I M PA C T I N D U S T R I E S 28 ¹ Total includes total gross loans & leases of $3.44 billion and rental equipment, net of $206.7M, as of December 31, 2020, e
Slide 29: Warehouse Finance
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH WA R E H O U S E F I N A N C E 29 Asset-backed warehouse lines of credit used to support strategic initiatives. • Lines are primarily secured by consumer receivables, whereby Meta is in a senior, secured position as the first
Slide 30: Consumer Credit Programs
QUARTERLY INVESTOR UPDATE | FIRST QUARTER FISCAL YEAR 2021 | NASDAQ: CASH C O N S U M E R C R E D I T P R O G R A M S 30 Consumer Payments Principal, Interest, Fees Principal Losses to Meta Collection Account Principal Repayment to Meta Servicing Meta’s Agreed upon interest return Remaining Excess S
Meta Financial Group — Q1 FY2021 Earnings Presentation on 6ix