Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Q4 2018 Earnings Presentation
21 slides from Pathward Financial's earnings presentation, Oct 30, 2018
Slide 1: Quarterly Investor Update: Fourth Quarter and Fiscal Year End 2018
Quarterly Investor UpdateFourth Quarter and Fiscal Year End 2018 Exhibit 99.3
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: Business Updates
Business Updates Crestmark Bancorp, Inc. Acquisition On August 1, 2018, Meta completed the previously announced acquisition of Crestmark Bancorp, Inc. and Crestmark Bank. The fair value of loans and leases receivable acquired on August 1, 2018 pursuant to the Crestmark acquisition was $1.05 billion.
Slide 4: Experienced Management Team
Experienced Management Team Executive Officers Prior Experience Industry Experience (years) MetaBank Experience (years) Brad Hanson President and Chief Executive Officer President at MetaBank Prior experience in financial services, including numerous banking, card industry and technology-related cap
Slide 5: Fourth Quarter Ended September 30, 2018
Fourth Quarter Ended September 30, 2018 Quarterly GAAP net income of $8.7 million and quarterly diluted earnings per share of $0.24. Fourth quarter fiscal 2018 average assets grew to $5.4 billion, an increase of 33% compared to the 2017 fiscal fourth quarter. Net interest income was $48.5 million in
Slide 6: Notable Fourth Quarter Impacts
Notable Fourth Quarter Impacts For the Quarter Ended September 30, 2018 Selected Items (pre-tax, unless noted) Loss on sale of securities 6,979 Amended historical tax return of the acquired Crestmark Bancorp entity (tax benefit) 4,644 M&A expenses 3,215 Operational synergies 3,051 Selected Items $7.
Slide 7: Selected Financial Data
Selected Financial Data (Dollars in Millions, Except Share and Per Share Data) 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 At September 30 Total Assets $ 2,054 $ 2,530 $ 4,006 $ 5,228 $ 5,835 Loans and leases receivable, net 493 706 919 1,318 2,932 Deposits 1,367 1,658 2,430 3,223 4,431 Total
Slide 8: Selected Ratios
Selected Ratios For the Fiscal Year Ended or at September 30, (Dollars in Thousands, Except Share and Per Share Data) 2014 2015 2016 2017 2018 Performance Ratios Return on average assets 0.81 % 0.78 % 1.10 % 1.13 % 1.12 % Return on average equity 10.01 % 8.83 % 10.80 % 11.20 % 10.44 % Net interest m
Slide 9: Lending Divisions Continue Growth Trends
Lending Divisions Continue Growth Trends Driven by Commercial Real Estate and Commercial Insurance Premium Finance Total net loans and leases receivable increased 122%, at September 30, 2018, compared to September 30, 2017 When excluding Crestmark acquired loans and leases, total net loans and lease
Slide 10: Diversified Loan Portfolio
Diversified Loan Portfolio National Commercial Lending and Consumer Financing Expected to Further Diversify Portfolio National Commercial Finance 51% Community Bank 37% Community Banking $1.1 billion in community banking loans at September 30, 2018 Increase due to growth in commercial real estate lo
Slide 11: Industry Concentrations
Industry Concentrations Crestmark Monitors Loan Concentrations to Specific Industries Industry concentrations in the following graph reflect concentrations in the asset-based lending, factoring, and government guaranteed portfolios, combined. Asset-based Lending Asset-based lending primarily provide
Slide 12: Asset Quality Remains Strong and Stable
Asset Quality Remains Strong and Stable Disciplined Credit Culture Continues to Drive Strong Asset Quality Combined allowance for loan and lease losses and fair value mark was 0.8%, or $24.4 million, of the total loan portfolio at September 30, 2018, compared to an allowance for loan loss to total l
Slide 13: Average Interest Earning Asset Mix Continues to Shift
Average Interest Earning Asset Mix Continues to Shift $4,749 $3,675 $3,873 $4,251 $3,762 52% 35% 37% 44% 40% Tax-Exempt Investment Securities Mortgage-Backed Securities Loans and Leases Cash and Other Securities Balance Sheet Restructuring During the fiscal 2018 fourth quarter, after the close of th
Slide 14: Net Interest Margin Expansion Bolstered in Fourth Quarter
Net Interest Margin Expansion Bolstered in Fourth Quarter of Fiscal 2018 from Crestmark Acquisition (1) Fiscal 2018 quarterly NIM reflects the lowered corporate prorated tax rate on the Company's tax-exempt municipal portfolio as a result of the Tax Cuts and Jobs Act of 2017. (2) NIM, tax equivalent
Slide 15: Meta's Funding Advantage: Stable Non-Interest-Bearing Deposit Base
The average balance of total deposits and interest-bearing liabilities was $4.58 billion for the fourth quarter of fiscal 2018, compared to $3.53 billion for the same period in fiscal 2017, representing an increase of 30%. Total average deposits for fourth quarter fiscal 2018 increased 33%, and aver
Slide 16: Regulatory Capital
Regulatory Capital Strong capital remains well above "well-capitalized" (1) Regulatory ratios are estimated (2) Due to the predictable, quarterly cyclicality of non-interest-bearing deposits in connection with tax season business activity, management believes that a six-month capital calculation is
Slide 17: Goodwill and Intangible Assets
Majority of intangible amortization expense front-loaded and taken within the next five years. Below table shows expected other intangible balance. Future M&A activity could generate additional assets and amortization expense. Majority of goodwill resulted from the Crestmark acquisition on August 1,
Slide 18: Appendix
Appendix Financial Group
Slide 19: Quarterly Income Statement
Quarterly Income Statement Three Months Ended Three Months Ended Percent Change Q4 Q4 Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 Q4-18 vs. Q4-17 ($ in thousands) Sept. 2017 Sept. 2017 Dec. 2017 Dec. 2017 March 2018 March 2018 June 2018 June 2018 Sept. 2018 Sept. 2018 Net Interest Income 24,488 26,196 27,405 28,411 48,
Slide 20: Fiscal Year Income Statement
Fiscal Year Income Statement Fiscal Year Ended Fiscal Year Ended Percent Change September 30, September 30, FY 2018 vs. FY 2017 ($ in thousands) 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 Net Interest Income 46,262 59,220 77,305 93,230 130,549 40% Card Fee Income 48,738 54,542 70,533 94,707 9
Slide 21: Average Balance Sheet
Average Balance Sheet Fiscal Year Average Fiscal Year Average Percent Change Fiscal Quarter Average Fiscal Quarter Average Percent Change FY FY FY FY FY FY FY FY FY FY FY 2018 vs. FY 2017 Q4 Q4 Q4 Q4 Q4-18 vs. Q4-17 ($ in thousands) 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2017 2017 2018 20