Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Conference Presentation (March 2020)
19 slides from Pathward Financial's conference presentation, March 2020
Slide 1: Investor Presentation
Investor Presentation March 2020
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 presentation, the Company’s filings with the Securities and Exchange Commission (“SEC”), the Company’s reports to stockholders,
Slide 3: Who is Meta?
Who is Meta? 1954 2004 BEGINNING 1993 Founded in Storm Lake, IA Nasdaq: CASH Meta Payments Systems Created First Federal Savings Bank of the Meta Financial Group was incorporated and Entrance into the prepaid industry Midwest, a savings and loan went public in connection with the Bank’s opened the d
Slide 4: Strategic Balance Sheet Mix Improvement
Strategic Balance Sheet Mix Improvement AVERAGE INTEREST-EARNING ASSETS Interest-earning asset mix expected to further generate margin expansion. Year ended September 30 Cash & Investments Loans & Leases Receivable Community Bank Loans Receivable $5.38 24% 22% 28% $4.16 34% $3.62 Ability to keep bal
Slide 5: Differentiated Business Reduces Risk and Provides Growth Opportunities in Various Economic Environments
Differentiated Business Reduces Risk and Provides Growth Opportunities in Various Economic Environments Payments Commercial Finance Loans • Tailored solutions enable • Provide customized business payments providers to grow 7.32% capital solutions for small-and their businesses and build Yield on Loa
Slide 6: Differentiated Approach to Driving Shareholder Value
Differentiated Approach to Driving Shareholder Value 1 Increase Percentage of Funding from Core Deposits 2 Optimize Earning Asset Mix 3 Improve Operating Efficiencies 6 March 2020 | Nasdaq: CASH
Slide 7: Earnings Power from Payments
Earnings Power from Payments 1 Payments Card and Deposit Fee Income Breakout First Quarter Fiscal 2020 • Primary deposit source derived from Payments business line which generates stable, core deposits, including prepaid and demand deposit 9% solutions 12% • Payments deposits represented 60% of tota
Slide 8: Compelling Asset Mix Driving Differentiated NIM Expansion
Compelling Asset Mix Driving Differentiated NIM Expansion 2 Earning Asset Mix1 Yields Aspirational Selected Quarterly Average December 2018 September 2019 December 2019 December 2019 Earning Asset Mix Commercial Finance 30% 36% 38% 9.00% >55% Consumer & Warehouse Finance 8% 12% 10% 7.45% <15% Commun
Slide 9: Commercial Finance Growth Engine
Commercial Finance Growth Engine 2 Other SBA/USDA $99.6M Term Lending. Originate a variety of collateralized conventional term loans $90.3M 7.11% and notes receivable, with terms ranging from three to 25 years, generally 6.57% secured by equipment, recurring revenue streams, as well as real estate.
Slide 10: Improve Operating Efficiencies
3 Improve Operating Efficiencies Enhance efficiency ratio from current level • Expense discipline and generation of positive operating leverage – Driving 2x operating leverage in each business line (i.e., growing revenue two times the rate of expense growth) – Eliminating redundant functions and imp
Slide 11: Long-Term Value Drivers
Long-Term Value Drivers Differentiated Model • Target niche commercial and consumer industries to provide opportunities for growth Lower Cost Funding Advantage • National payments business drives stable, lower cost deposits • Re-focus on increasing percentage of funding from core deposits Scalable L
Slide 12: Quarter Highlights
Quarter Highlights First Quarter Fiscal 2020 12 March 2020 | Nasdaq: CASH
Slide 13: Business Developments
Business Developments First Quarter Ended December 31, 2019 • On November 20, 2019, entered into a definitive agreement with Central Bank for the sale of the Community Bank division. – Sale includes all Community Bank deposits, branch locations, fixed assets and employees and a portion of the Commun
Slide 14: Financial Highlights
Financial Highlights First Quarter Ended December 31, 2019 INCOME STATEMENT ($ in thousands, except per share data) 1Q20 4Q19 1Q19 Net Interest Income 64,651 65,617 60,272 Provision for Loan and Lease Loss 3,407 4,121 9,099 • Net income of $21.1 million, or $0.56 per diluted share, for 21,499 20,276
Slide 15: Diversified Loan Portfolio
Diversified Loan Portfolio At the Quarter Ended Highlights December 31, 2019 September 30, 2019 December 31, 2018 1Q20 % Change From ($ in thousands) 1Q20 4Q19 1Q19 4Q19 1Q19 • Certain balances previously Commercial Finance 1,994,656 1,916,230 1,617,880 4% 23% included in asset-based lending and Ter
Slide 16: 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. Chart
Slide 17: Interest Rate Risk Management as of December 31, 2019
Interest Rate Risk Management as of December 31, 2019 12-Month Interest Rate Sensitivity from Base Net Interest Income 11% 9% Net Interest Income modeled under an instantaneous, 7% parallel rate shock and a gradual parallel ramp. 5% 3% Management also employs rigorous modeling techniques 1% under a
Slide 18: Regulatory Capital as of December 31, 2019
Regulatory Capital as of December 31, 2019 Strong capital remains above "well-capitalized" Capital Ratio Trends At December 31, 2019 Meta Financial Group, Inc. MetaBank Tier 1 Leverage 8.28% 9.70% Common Equity Tier 1 10.10% 12.18% Tier 1 Capital 10.46% 12.24% Total Capital 12.74% 12.90% Capital Dep
Slide 19: Financial Measure Reconciliations
Financial Measure Reconciliations Efficiency Ratio For the last twelve months ended ($ in thousands) Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Noninterest Expense - GAAP 334,663 333,160 323,657 300,242 258,485 Net Interest Income 268,586 264,207 247,127 208,570 164,625 Noninte
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