Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Q2 2015 Earnings Presentation
26 slides from Pathward Financial's earnings presentation, Apr 30, 2015
Slide 1: Investor Update Second Quarter 2015
Meta® Financial Group’ INVESTOR UPDATE SECOND QUARTER 2015
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Meta L—L EE Ee Meta Financial Group, Inc.®, (“Meta Financial” or “the Company” or “us”) 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 inv
Slide 3: Meta Management
META MANAGEMENT Meta® Financial Group J. TYLER HAAHR Chairman and Chief Executive Officer, Meta Financial Group Tyler 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
Slide 4: Who We Are
WHO WE ARE ACCELERATING GROWTH PRODUCT EXPANSION COMPLIANT ASSETS* $2,275M * As of 03/31/2015 METABANK RETAIL BANK STRONG ECONOMY & LOCAL MARKETS > IOWA > SOUTH DAKOTA LOANS* $619M EEE SPECIALTY META PAYMENT LENDING SYSTEMS, BUSINESS PARTNERS > NETSPEND > MONEY NETWORK > BLACKHAWK > UNIRUSH > MANY O
Slide 5: Who We Are
WHO WE ARE Meta® R ETAI L BANK GROWING COMMUNITY BANK ° STRONG LOCAL ECONOMIES * 10 BRANCH LOCATIONS IN IOWA AND SOUTH DAKOTA * STRONG LOAN GROWTH WITH HIGH QUALITY META PAYMENT SYSTEMS ATOP PREPAID CARD ISSUER IN U.S. ° ROBUST DEPOSIT GROWTH ° NEW PARTNERS BEING ADDED ° EXISTING PARTNERS EXPANDING
Slide 6: Retail Bank
RETAIL BANK Meta@ Financial Group oN > SUCCESSFUL REGIONAL ENTERPRISE * 60 YEARS IN BUSINESS ¢ 10 LOCATIONS IN lOWA AND SOUTH DAKOTA * GROWING, PROFITABLE OPERATIONS * LOYAL CUSTOMER BASE > DIVERSE CUSTOMER BASE ¢ ATTRACTIVE COMBINATION OF COMMERCIAL, AGRICULTURAL & RETAIL > NET LOAN GROWTH OF 26% (
Slide 7: Retail Bank Locations
RETAIL BANK LOCATIONS Meta® | > SOUTH DAKOTA NORTH DAKOTA * BROOKINGS * Sl0ux FALLS > IOWA * Des MOINES * STORM LAKE
Slide 8: Meta Payment Systems
META PAYMENT SYSTEMS Meta® TT > ALEADER IN THE PREPAID CARD INDUSTRY > DEPOSIT GROWTH ~ 28%* OVER PRIOR YEAR > GROWING EXISTING RELATIONSHIPS + NETSPEND * MONEY NETWORK + BLACKHAWK * GLOBAL CASH > NEW RELATIONSHIPS DRIVING ACCELERATING GROWTH, STRONG PIPELINE + UNIRUSH * STORE FINANCIAL * HYPERWALLE
Slide 9: Deposits and Cost of Funds
ESS _‘l DEPOSITS AND COST OF FUNDS Aah) Financial Group’ $2,000 + 1.20% Q Cost of Funds , 5 $1,600 ] 1.00% 5 S F 0.80% 2 # $1,200 | 5 o 0.60% uw % $800 2 5 | 2 0.40% g tu oO Qa 4 S $400 | 0.20% z $0 | ; : : ; 0.00% Q409 Q410 Q411 Q412 Q413 Q414 Q214 aq2is GEBank MMPS —Cost of Funds *Quarter Average
Slide 10: AFS / IBEX Asset Acquisition
a AFS / IBEX ASSET ACQUISITION MuG@els) Ee Financial Group’ ¢ FOUNDED IN 1986, AFS/IBEX WAS THE 7™ LARGEST INSURANCE PREMIUM FINANCE COMPANY IN THE U.S. IN 2014, ORIGINATING LOANS THROUGH A NETWORK OF OVER 1,300 INDEPENDENT INSURANCE AGENCIES * LOANS GREW BY $9.0 MILLION, OR 12%, FROM DECEMBER 31, 2
Slide 11: Recognition
RECOGNITION Meta® ee META FINANCIAL GROUP: (NASDAQ: CASH) #68 IN AMERICAN BANKER MAGAZINE “TOP 200 COMMUNITY BANKS AND THRIFTS” (JUNE 2014) TOP 1% BASED ON 3 YEAR ROE + TOP 100 IN ABA BANKING JOURNAL'S ANNUAL PERFORMANCE RANKING FOR $1B-$10B BANKS (2014) * SECOND LARGEST PREPAID CARD ISSUER IN THE U
Slide 12: Strategic Goals
STRATEGIC GOALS Meta® Financial Group oN > GROW MPS DIVISION * SCALABLE, STATE-OF-THE-ART OPERATING INFRASTRUCTURE * LEVERAGE LOW AND NO COST FUNDS * ROBUST PRODUCT OFFERING - RELOADABLE, PAYROLL, GIFT, INCENTIVE, VIRTUAL, AND TRAVEL - DIVERSIFYING PRODUCT SUITE IN 2015 — PAYMENTS, DEPOSITS, AND CRE
Slide 13: Growing Our Business
GROWING OUR BUSINESS Meta | > CAPITALIZING ON SYNERGIES: COMMUNITY BANK, MPS, SPECIALTY LENDING ¢ STRONG LOAN GROWTH IN LOCAL MARKETS AND AFS/IBEX * EXPECT MATERIAL BENEFITS WHEN INTEREST RATES RISE > LEVERAGING MPS LEADERSHIP IN PAYMENTS INDUSTRY * HIGH-GROWTH INDUSTRY - META HAS LARGE MARKET SHARE
Slide 14: Compliance and Oversight Systems
COMPLIANCE AND OVERSIGHT SYSTEMS Meta ee > EARLY ADOPTER OF SOPHISTICATED COMPLIANCE SYSTEMS > OCC CONSENT ORDER REMOVED IN AUGUST 2014 > INVESTMENTS IN MPS PROGRAM DESIGN, TRAINING AND TECHNOLOGY * IMPLEMENTED ENHANCED BSA/AML TECHNOLOGY * ENHANCED INFRASTRUCTURE SUPPORTS GROWTH * SHIFTED FOCUS TO
Slide 15: Interest Rate Risk Management
INTEREST RATE RISK MANAGEMENT Meta OO > POSITIVELY LEVERAGED FOR HIGHER RATE ENVIRONMENT > OCI VOLATILE RELATIVE TO PEERS * GAAP DOES NOT CAPTURE BALANCE SHEET TRUE VALUE + META MARK INCLUDES ~65% OF ASSETS (SECURITIES) VS. TYPICAL “PEER” AT 20% * GAAP OCI DOES NOT RECOGNIZE VALUE OF LOW AND NO COST
Slide 16: Capital Management
CAPITAL MANAGEMENT Meta@ Financial Group | > CAPITAL ENHANCEMENTS * $61.0 MILLION IN 2012-13 VIA PRIVATE PLACEMENTS AND AN ATM OFFERING ¢ RECENT ATM NET PROCEEDS OF $25.4 MILLION TO SUPPORT GROWTH > MAINTAIN STRONG CAPITAL RATIO GOALS * COMMON EQUITY TIER 1 CAPITAL AT LEAST 8% ¢ RISK-BASED OVER 15%
Slide 17: MFG Financial Highlights
MFG FINANCIAL HIGHLIGHTS Meta@ Financial Group > NET INCOME * $8.8 MILLION IN FISCAL 2015 (THRU 03/31/15) * ADJUSTED $9.6 MILLION, EXCLUDING ITEMS BELOW*, 19% OVER FY14 SAME PERIOD > EARNINGS PROFILE * ANNUALIZED ROAA OF 0.78% AND ANNUALIZED ROAE OF 9.30% * — ADJUSTED ANNUALIZED ROAA AND ROAE OF 0.8
Slide 18: Earnings Power While Growing Equity
a EARNINGS POWER WHILE GROWING EQUITY Meta@ Financial Group’ $5 $30 4 Ww < as = $4 $25 G ~ 5 pa a $3 $20 & 5 $2 $15 S a So sf 8 a $1 $10 a im re 5 ao a go B $0 $5 Zz a ‘a a $1 $0 Q210 Q211 Q212 Q213 Q214 Q215 ‘—=DILUTED EPS = ==TANGIBLE BOOK VALUE/SHARE
Slide 19: Balance Sheet ($000s)
BALANCE SHEET ($000s) Meta® Financial Group’ | (ise ure Aveta) 41041141234 2a 215] CASH AND CASH EQUIVALENTS 94,248 132,149 106,067 73,733 100,159 132,659 231,310 INVESTMENTS AND MBS 511,011 615,320 998,826 1,176,811 1,320,364 1,294,874 1,439,652 LOANS RECEIVABLE NET 369,563 314,484 329,689 364,100
Slide 20: Income Statement ($000s)
INCOME STATEMENT ($000s) [ieaGhs Financial Group Meta Financial Group FY10 FY11 FY12* FY13** FY14 Q214 qQ2is YTD YTD*** 17,299 34,034 97,444 57,491 69,574 55,503 51,738 26,650 27,644 Compensation and Benefits 32,529 30,467 31,104 34,106 38,155 18,970 22,199 Card Processing Expense 38,242 23,286 17,3
Slide 21: Total Assets
TOTAL ASSETS* Meta@ Financial Group’ $ MILLIONS 0409 Q410 441 412 0413 414 Q215 *Fiscal Quarter average
Slide 22: Total Net Loans
TOTAL NET LOANS* Meta® Financial Group’ $300 $200 $100 $0 $ MILLIONS Q409 Q410 Q411 Q412 Q413 Q414 Q215 *Fiscal Quarter average Net of ALL
Slide 23: Non-Performing Assets
NON-PERFORMING ASSETS Meta@ Financial Group’ w i $18.0 3.00% a ¢ © $15.0 2.50% = = a) <= $12.0 2.00% i (e) a 2 B & 2 a $9.0 1.50% 2 3 is} ie} = 2 $60 1.00% oe ro} fo) x g $3.0 26 $08 SLO $1.70 0.50% . 0.05% gS 0.16% aie 0.07% = $0.0 0.00% 7 FYO9 FY10 FY11 FY12 FY13 FY14 FY15 Q2 —S$ OF NPA——% OF TOTA
Slide 24: Total Revenue
TOTAL REVENUE Meta® Financial Group $150 w $100 4 2) = 2 = - = i $0 Fy12* PYia&* Fy14 an Q2 FY15 Q2 Yipee BALL OTHER REVENUE MPS NON-INTEREST INCOME includes $11.4M gain on sale of GNMA Securities Includes $2.41 gain on sale of securities *** Includes $(1.2)M loss on sale of securities, $(0.5)M acqu
Slide 25: Meta Value Proposition
META VALUE PROPOSITION Meta®) Financial Group oN > ALEADING ISSUER OF PREPAID DEBIT CARDS * SPRINGBOARD INTO OTHER PRODUCTS AND SERVICES > STRONG CAPITAL POSITION * EARNINGS AND ACCESS TO CAPITAL MARKETS TO FUND OUR GROWTH OBJECTIVES * MFG Ratio OF TIER 1 CAPITAL TO ADJ. TOTAL ASSETS AT MARCH 31, 20
Slide 26: Meta®
Meta® Financial Group’ NASDAQ: CASH