Slide 1: FY24 Results & Proposed merger with Auswide Bank
FY24 Results & Proposed merger with Auswide Bank 19 August 2024 1
Slide 2: Agenda
Agenda 1 Overview of FY24 Brett Morgan { Managing Director & CEO 2 FY24 financial results { Gary Dickson Chief Financial Officer 3 Proposed merger with { Auswide Bank Limited Brett Morgan & Gary Dickson 4 Additional FY24 { results information 5 Additional merger information{ 2
Slide 3: Overview of FY24
Overview of FY24 1 Brett Morgan Managing Director & CEO 3
Slide 4: FY24 summary
FY24 summary Balancing growth and return in a challenging environment. Capital up. Dividend stable $8.0b $5.9b $35.3m Home loan book Customer deposits Net profit after tax +2.0% on pcp -4.9% on pcp -8.3% on pcp 16.4% 32.0 cps 23.0 cps Total capital Earnings per share Stable dividend +100 bps on pcp
Slide 5: Delivered on key FY24 strategic initiatives
Delivered on key FY24 strategic initiatives Bank Wealth Group Trustee Operating New digital Services costs well capability offer managed expanded ● Successfully launched our new internet and ● Delivering on Trustee Services ● Operating costs down year on year in an mobile banking platform optimisati
Slide 6: FY24 financial results
FY24 financial results 2 Gary Dickson Chief Financial Officer 6
Slide 7: FY24 financial performance
FY24 financial performance Metric FY24 FY23 Change v FY23 Total operating income ($m) 152.4 160.4 -5.0% ▼ Total operating expenses ($m) 101.0 102.7 -1.6% ▼ Core earnings ($m) 1 51.4 57.7 -10.9% ▼ Statutory net profit after tax ($m) 35.3 38.5 -8.3% ▼ ● Optimised growth and return in a Statutory earni
Slide 8: Full year NPAT
Full year NPAT Revenue challenges partially offset by well-managed expenses Net profit after tax ($m) 1.8 1.3 1.6 1.1 -8.0 -1.0 38.5 35.3 -8.3% Decrease Increase FY23 Statutory Net interest income Other banking Wealth Operating Net bad and Income tax expense FY24 Statutory NPAT income management exp
Slide 9: Operating costs well-managed
Operating costs well-managed Operating costs ($m) MyState Bank operating efficiency ratio 1 0.74% 1.5 -4.1 2.3 -1.4 0.67% 0.58% 0.60% 102.7 Increase 101.0 Decrease FY23 Personnel Marketing Technology Other FY24 Jun-21 Jun-22 Jun-23 Jun-24 ● Operating costs closely managed in a high-inflationary envi
Slide 10: Challenging margin environment; NIM stable half-on-half
Challenging margin environment; NIM stable half-on-half NIM waterfall Average NIM trend Origination costs Increase Decrease 1.63% 0.01% 0.01% 1.45% 1.46% 1.45% 1.28% 1.45% 0.29% 0.05% 0.06% 0.30% 1.63% 1.45% FY23 Asset yield Asset mix Origination Funding cost Funding mix Other FY24 FY23 FY24 1H24 2H
Slide 11: Quality home loan book
Quality home loan book Home loan book – FY24 Quarterly applications and settlements ($b) Applications 0.9 Settlements 1.0 0.8 0.5 0.5 0.6 0.4 0.3 Home loan book LVR profile ($b) Home loan book – 8.0 applications and settlements ($b) 7.8 6.8 0.8 >90% 1H 2H 1Q24 2Q24 3Q24 4Q24 0.9 0.7 85%-90% 23% Appl
Slide 12: TPT Wealth providing income diversification
TPT Wealth providing income diversification Operating income ($m) Funds under management ($m) 15.4 +0.2% 14.8 14.3 1,062 994 996 5.2 5.0 7.4 9.6 9.3 8.0 FY22 FY23 FY24 Jun-22 Jun-23 Jun-24 Investment services Trustee services ● TPT delivered $15.4m in fee revenue, driven by strong performance in Tru
Slide 13: Proposed merger with Auswide Bank Limited
Proposed merger with Auswide Bank Limited 3 Brett Morgan Managing Director & CEO 13
Slide 14: Merger overview
Merger overview • MyState Limited (MyState) has signed a scheme implementation agreement (SIA) to merge with Auswide (the Proposed Merger) • Under the Proposed Merger, Auswide shareholders would receive 1.112 MyState shares per Auswide share. This implies 65.9% pro forma ownership of the combined Gr
Slide 15: Strong strategic rationale for merger with Auswide
Strong strategic rationale for merger with Auswide Opportunity to significantly accelerate the earnings and growth profile of the Group Opportunity MergeCo Combination of two quality, • Alignment of strategy and values with a shared customer centric culture complementary, customer • Strong operating
Slide 16: Merged entity combination a compelling offering
Merged entity combination a compelling offering Opportunity to significantly accelerate the earnings and growth profile of the Group MyState Auswide MergeCo Tasmania based retail bank together with Combination of two quality customer- Queensland based retail bank helping Brand one of Australia’s old
Slide 17: Improved geographical diversification
Improved geographical diversification The proposed merger with Auswide will increase the loan footprint across Tasmania, Victoria and New South Wales and strengthen the presence in the fast-growing Queensland market Home loan geographic distribution (%) MYS Auswide1,2 MergeCo 2.5% 5.7% 3.6% 13.1% 20
Slide 18: Key pro forma financial metrics
Key pro forma financial metrics The combined entity will have significantly increased scale, a larger capital base, and a more diversified home loan and deposit portfolio, improving its financial resilience As at 30 June 2024 MyState Auswide1,2,3 MergeCo4 Gross loans and advances ($bn) 8.0 4.4 12.5
Slide 19: Significant shareholder value creation
Significant shareholder value creation The transaction is expected to yield annual pre-tax cost synergies of $20m - $25m achieved over a three-year period Pre-tax synergy run-rate benefits of $20m to $25m Indicative synergy breakdown • Committed to a cohesive integration strategy, leveraging the str
Slide 20: Indicative transaction timetable
Indicative transaction timetable Lodge regulatory applications August 2024 Lodge Scheme Booklet with ASIC and ASX September 2024 First Court date application served on ASIC October 2024 First Court date October 2024 Dispatch Scheme Booklet October 2024 Scheme meeting held (Auswide shareholder vote)
Slide 21: Additional FY24 results information
Additional FY24 results information 4 21
Slide 22: Recapping FY24
Recapping FY24 Key financial results for FY24 were in line with the outlook provided at the half. Lending and deposit composition results reflect the decision to actively optimise the balance between growth and returns. FY24 guidance FY24 result MyState Bank lending Lending growth 1.0x system 0.4x s
Slide 23: FY24 financial performance
FY24 financial performance Metric 1H24 2H24 1H24 v 2H24 FY24 Total operating income ($m) 75.8 76.6 +1.1% ▲ 152.4 Total operating expenses ($m) 49.8 51.2 +2.7% ▲ 101.0 Core earnings ($m) 1 26.0 25.4 -2.1% ▼ 51.4 First half v second half FY24 ● Revenue slightly up on 1H24 Statutory net profit after ta
Slide 24: Operating costs
Operating costs Operating costs breakdown ($m) ● Operating costs closely managed in a high-inflationary +7.0% -1.6% environment, down 1.6% ($1.7m) 102.7 101.0 ● Personnel costs increase reflects underlying salary inflation partly 3.2 95.9 3.3 3.0 4.4 4.1 offset by lower FTE (30 June 2024: 345 vs. 20
Slide 25: Diversified funding mix
Diversified funding mix -4.9% Customer deposits ($b) Funding mix (%) 6.2 5.9 5.6 14.4% 16.3% 17.6% 22.0% 4.5 12.6% 10.9% 3.4 9.0% 3.1 8.9% 3.4 3.0 73.4% 73.1% 72.8% 69.1% 2.8 2.8 2.2 1.5 Jun-21 Jun-22 Jun-23 Jun-24 Jun-21 Jun-22 Jun-23 Jun-24 Customer deposits Wholesale funding Securitisation Custom
Slide 26: Increased total capital
Increased total capital Capital 1.25% 0.92% 0.36% 0.13% 16.42% 15.43% 1.01% 0.02% 0.12% 1.98% 1.89% 2.43% 2.32% CET1 capital AT1 capital Tier 2 capital Increase Decrease 12.01% 11.22% Jun-23 Capital initiatives Securitisation Profit Dividends paid Secured Capitalised Other asset Jun-24 activity mort
Slide 27: Capital, stock and flow metrics
Capital, stock and flow metrics Movement Stock metrics Jun-24 Dec-23 Jun-23 30-Jun-24 31-Dec-23 30-Jun-23 % (Jun-Jun ‘23) Broker 83% 82% 82% $m $m $m $m Proprietary 17% 18% 18% Qualifying capital Owner occupied 79% 79% 80% Common equity tier 1 capital (CET1) Investor 20% 20% 19% Ordinary share capit
Slide 28: Home loan book
Home loan book Loan balance and lending flows ($b) Home loan book composition ($b) 7.8 8.0 0.4 0.4 6.8 0.2 0.2 0.1 1.2 1.8 1.3 0.9 1.2 1.1 0.2 1.0 7.8 Increase 8.0 6.1 6.3 78% 5.4 78% Decrease Jun-23 New funding Discharges Redraw & Repayments Jun-24 Jun-22 Jun-23 Jun-24 Interest Own. Occ. P&I Inv. P
Slide 29: Fixed rate home loan profile
Fixed rate home loan profile New HL flow – fixed rate issuance Fixed rate HL expiry schedule as at 30 Jun 24 $533m 400.0 m 100% 361.4 m 350.0 m 90% 80% 300.0 m 70% 250.0 m $294m 60% $249m 200.0 m 50% 155.2 m $178m 40% 150.0 m 119.5 m 30% 100.0 m 20% $43m $56m 39.5 m 37.4 m 36.9 m $23m $25m 50.0 m 10
Slide 30: Continued high credit quality
Continued high credit quality 30+ days S&P arrears data 90+ days S&P arrears data MyState MyState SPIN Majors SPIN Majors SPIN Regionals SPIN Regionals 2.40% 2.40% 2.00% 2.00% 1.60% 1.60% 1.20% 1.20% 0.97% 0.80% 0.80% 0.40% 0.40% 0.44% 0.00% 0.00% ● Maintaining quality lending growth underpins our b
Slide 31: Prudent loan provisioning
Prudent loan provisioning Total collective provisions and GRCL ($m) Collective credit provisions ($m) 7.7 7.9 10.1 10.3 6.9 9.3 8.3 1.6 1.9 5.9 2.9 2.7 6.8 1.6 2.4 1.6 2.4 2.4 4.5 1.8 0.9 2.4 1.7 2.4 1.5 1.5 2.0 2.3 1.1 6.1 0.9 5.3 6.0 3.6 4.3 3.0 3.0 3.0 3.3 2.1 Jun 22 Dec 22 Jun 23 Dec 23 Jun 24 J
Slide 32: Forward looking economic overlay assumptions
Forward looking economic overlay assumptions ● Forward looking overlay has increased from $1.6m at 30 June 2023 Assumptions June 25 June 26 to $1.9m at 30 June 2024, with recent macroeconomic data reinforcing the probability of ‘higher for longer’ inflation and the Unemployment (year ended) deferral
Slide 33: Additional merger information
Additional merger information 5 33
Slide 34: Reconciling the different treatment of broker commissions
Reconciling the different treatment of broker commissions MyState Auswide MergeCo 1 Key financials on MyState’s reporting basis Net Interest Income ($m) 2 124.5 59.7 184.2 Operating Expenses ($m) 101.0 54.3 155.4 NIM (%) 2 1.45% 1.19% 1.36% CTI (%) 66.3% 76.6% 69.6% Key financials on Auswide’s repor
Slide 35: Key merger terms
Key merger terms • Implementation of the Scheme is subject to a number of conditions including without limitation the following: • Regulatory approvals (including Treasurer, APRA, ASIC, ASX, ACCC if required) as well as shareholder and court approvals; Conditions • Independent Expert concluding that
Slide 36: Glossary
Glossary 1H: First half of financial year EPS: Earnings per share NIM: Net Interest Margin 2H: Second half of financial FHLDS: First Home Loan Deposit Scheme NPAT: Net Profit after Tax year FUM: Funds under management NPBT: Net Profit before Tax ADI: Authorised deposit-taking institution FY: Financi
Slide 37: Important information & disclaimer
Important information & disclaimer Use of this document Past performance and risks You must read the following notices before reading or making any use of this document or any Past performance information given in this presentation is given for illustrative purposes only and should information conta
Slide 38: MyState Limited
MyStateLimited \