Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Q2 FY2017 Earnings Presentation
19 slides from Pathward Financial's earnings presentation, April 2017
Slide 1: Investor Update Second Quarter Fiscal Year 2017
Investor Update Second Quarter Fiscal Year 2017 Second Quarter 2017 | NASDAQ: CASH
Slide 2: Forward Looking Statements
Forward Looking Statements Meta Financial Group, Inc.® (the “Company”) 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 Securities a
Slide 3: Company Overview
Company Overview Prepaid low-cost deposit base provides Prepaid division generates fee income with competitive advantage to obtain high quality low-cost, long duration deposit base credits and attractive terms for the Retail Bank and Specialty Finance divisions Tax services division offers interest-
Slide 4: The Meta Ecosystem
The Meta Ecosystem Banking Payments Retail Banking Prepaid/ATM/Other Regional community bank with 10 branch locations A prepaid card industry leader with payments in Iowa and South Dakota diversification Growing, profitable operations Continuing to grow “annuity-like” stream of fee • Loan growth of
Slide 5: Financial Highlights
Financial Highlights Quarterly net income of $32.1MM1 Quarterly Earnings Diluted EPS of $3.42 ROAA of 2.91% and ROAE of 32.86% Net Interest Income (NII) Quarterly NII of $24.0MM, increase of 20% over Q2FY16 Tax product fee income increased $42.5MM, or 202% over Q2FY16 Non-interest Income Card fee in
Slide 6: Tax Season Review
Tax Season Review Tax product revenue was $63.6MM in Q2FY17, an increase of 202% compared to Q2FY16 • Increase driven by growth in refund advance fee income and refund transfer fee income Tax product expenses grew at a much slower rate, increasing 62% compared to Q2FY16 Effectively and efficiently i
Slide 7: Net Interest Income ($MM)
Net Interest Income ($MM) Second Quarter Highlights Net interest income increased 20%, while net interest Net Interest Income and NIM margin (NIM) decreased 31 bps compared to fiscal second quarter 2016 • Issuance of subordinated debt (11 bps) • Depressed by interest-free refund advance tax loans th
Slide 8: Net Interest Margin Breakout
Net Interest Margin Breakout¹ Quarter Average March 31, 2017 Impact on NIM Net Interest Income/NIM as reported 2.91% Zero Interest Tax loans 13 - 14 bps Excess Cash 13 - 14 bps Borrowings Adjustment 12 - 13 bps Normalized NIM 3.29% - 3.32% • Borrowings adjustment removes wholesale deposit costs and
Slide 9: Net Interest Drivers ($MM)
Net Interest Drivers ($MM) Fiscal Quarter Average Total Investments and Yield Total Loans and Yield $2,358 $1,302 4.48% 4.52% 3.24% 4.41% 4.37% $2,039 $2,067 4.56% $2,020 $2,004 4.44% $1,137 2.99% $970 2.95% $906 3.98% 2.93% 2.92% $826 $774 $768 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q2-16 Q3-16 Q4-16 Q1-17
Slide 10: Earning Asset Mix ($MM)
Earning Asset Mix ($MM) Interest Earning Assets Q2-16 $2,864 Fiscal Quarter Average Q3-16 $2,852 Q4-16 $3,000 Q1-17 $3,223 Q2-17 $3,962 Tax-Exempt Investment Securities Mortgage-Backed Securities Loans Cash and Other Securities Continue to improve earning asset mix 38% Earning Asset Growth Q2-16 to
Slide 11: Loan Portfolio ($MM)
Loan Portfolio ($MM) Second Quarter Highlights Loan Receivable Composition Total loans receivable, excluding student loan portfolio $1,152 purchase and refund advances, increased 29%, YoY $1,115 YoY loan growth driven by increases in Commercial, Premium Finance and Consumer $926 $861 • Retail Bank l
Slide 12: Balance Sheet Overview ($MM)
Balance Sheet Overview ($MM) Total Liabilities Q2-16 $2,777 Total Assets Fiscal Quarter Average Q3-16 $2,749 $4,414 Q4-16 $2,900 Q1-17 $3,139 $3,491 Q2-17 $4,022 $3,235 $3,078 $3,068 Non-interest bearing deposits Interest bearing deposits Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Wholesale deposits Borrowings F
Slide 13: Regulatory Capital
Regulatory Capital Regulatory Capital Ratios¹ 19.46% 19.76% 18.95% 18.95% 14.68% 14.14% Minimum Requirement to be Well-Capitalized under 8.20% Prompt Corrective Action (PCA) Provisions 6.44% Tier 1 Leverage Common Equity Tier 1 Tier 1 Risk-Based Total Risk-Based 1Regulatory ratios are estimated Peri
Slide 14: Competitive Landscape
Competitive Landscape Early adopter of sophisticated compliance systems Investments in program design, training and technology • Implemented enhanced BSA/AML technology • Enhanced infrastructure supports growth • These prior investments allow more focus on growing current business and new developmen
Slide 15: Interest Rate Risk Management
Interest Rate Risk Management Interest rate sensitivity (what management believes) Static interest rate risk results do not accurately reflect Meta’s true interest rate sensitivity due to our unique and historically predictable deposit base • Utilizing quarterly average balances for deposits, cash,
Slide 16: Industry Recognition
Industry Recognition MetaBank named one of “7 To Watch in ‘17” #1 Top Growth Bank (May 2016) Named Top Community Bank (Aug 2016) Top 40 of ACH originators in 2016 (April 2017) Top 30 of ACH receivers in 2016 (April 2017) Second largest prepaid card issuer in the U.S. ranked by purchase volume (2015)
Slide 17: Appendix
Appendix 17 Second Quarter 2017 | NASDAQ: CASH
Slide 18: Income Statement
Income Statement Percent Three Months Ended Change Q2 Q3 Q4 Q1 Q2 Q2-17 vs. (dollars in thousands) March 2016 June 2016 Sept. 2016 Dec. 2016 March 2017 Q2-16 Net Interest Income 19,938 19,919 19,893 19,833 23,966 20 % Card Fee Income 18,579 18,779 17,920 18,414 26,547 43 % Tax Product Fee Income 21,
Slide 19: Average Balance Sheet
Average Balance Sheet Percent Fiscal Quarter Average Change Q2 Q3 Q4 Q1 Q2 Q2-17 vs. (dollars in thousands) March 2016 June 2016 Sept. 2016 Dec. 2016 March 2017 Q2-16 Cash and Cash Equivalents 88,331 23,154 50,976 195,004 404,688 358 % Investments and MBS 2,036,633 2,026,849 2,075,599 2,084,101 2,34
Meta Financial Group — Q2 FY2017 Earnings Presentation on 6ix