Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Investor Presentation (June 2024)
21 slides from Pathward Financial's investor presentation, Jun 10, 2024
Slide 1: Investor Presentation
INVESTOR PRESENTATION U P D AT E D J U N E 1 0 , 2 0 2 4
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This investor update contains “forward-looking statements” which are made in good faith by Pathward Financial, Inc. (the “Company”) pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements
Slide 3: Leading the way to financial access is the heart of our business
AT PATHWARD®, LEADING THE WAY TO FINANCIAL ACCESS IS THE HEART OF OUR BUSINESS. Since our founding, we have worked to advance financial inclusion. We seek out diverse partners, including fintechs, affinity groups, government agencies, and other banks and work with them to identify markets where peop
Slide 4: Building a diversified company dedicated to financial empowerment
BUILDING A DIVERSIFIED COMPANY DEDICATED TO FINANCIAL EMPOWERMENT FOR INDIVIDUALS AND BUSINESSES 1993 2015 / 2016 2021 2022 Listed on Entered Tax Services Sold Meta Completed Nasdaq: CASH business by acquiring Refund trademarks and rebranding as Advantage, SCS, and EPS began rebranding Pathward init
Slide 5: Resilient business model in economic cycles
RESILIENT BUSINESS MODEL IN ECONOMIC CYCLES Funding Income Stable funding Earns consistent Operates a via BaaS partner fees from the BaaS collateralized relationships business lending platform that outperforms in down-cycles 5 Pathward Financial, Inc. (Nasdaq: CASH) | June 2024 Investor Presentation
Slide 6: Collaborate with partners to provide innovative BaaS solutions
COLLABORATE WITH PARTNERS TO PROVIDE INNOVATIVE BANKING AS A SERVICE (BAAS) SOLUTIONS Payment Accepting and processing payments through highspeed banking rails Solutions Issuing A leading debit and prepaid card issuer holding funds for partner programs Solutions Credit Solutions Enable partners’ len
Slide 7: Commercial Finance helps businesses access needed funds
Commercial Finance Helps Businesses Access Needed Funds Through Various Solutions Working Capital Equipment Structured Insurance Finance Finance Finance Premium Finance Ready cash for Providing access to Assisting small and Short-term financing liquidity needs to equipment financing, mid-sized for p
Slide 8: Investment Highlights
INVESTMENT HIGHLIGHTS RECORD OF STRONG EXCESS CAPITAL EXPERIENCED LEADER IN 1 EARNINGS GROWTH AND 2 GENERATING BUSINESS 3 FAST-GROWING BANKING PROFITABILITY ABOVE ENABLES ONGOING RETURN AS A SERVICE (BAAS) BANKING INDUSTRY OF VALUE TO SECTOR, WITH DIVERSIFIED AVERAGES SHAREHOLDERS PORTFOLIO OF HIGH-
Slide 9: Record of strong earnings growth
1 2 3 4 5 RECORD OF STRONG EARNINGS GROWTH Earnings Per Common Share Net Income $ in millions CAGR CAGR $5.99 +26% $163.6 $156.4 +29% $5.26 $141.7 $4.38 $104.7 $97.0 $2.94 $2.49 $4.49 $131.4 $51.6 $1.67 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22 FY ’23 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22 FY ’23 Earnings incl
Slide 10: Profitability above banking industry averages
1 2 3 4 5 PROFITABILITY ABOVE BANKING INDUSTRY AVERAGES Return on Average Assets Net Interest Margin 2.33% 6.04% 2.20% 4.84% 1.74% 4.09% 1.45% 3.83% 3.43% 3.33% 1.32% 1.25% 3.17% 3.13% 1.17% 0.97% FY '20 FY '21 FY '22 FY '23 FY '20 FY '21 FY '22 FY '23 Pathward Peers Pathward Peers • Peer data inclu
Slide 11: Ongoing return of capital
1 2 3 4 5 TRACK RECORD OF STRONG EARNINGS GROWTH AND RIGHT-SIZED BALANCE SHEET ENABLES ONGOING RETURN OF CAPITAL $590.0M $33.3M TOTAL SHARE REPURCHASES TOTAL DIVIDENDS PAID 2Q19 TO 2Q24 2Q19 TO 2Q24 Note: Repurchased common shares include shares withheld to cover income taxes owed by participants re
Slide 12: Leader in fast-growing BaaS sector
1 2 3 4 5 LEADER IN FAST-GROWING BAAS SECTOR Top 50 ~$2.5 Billion NACHA – Top 50 ACH Originator and Moved daily in ACH and wire services Receiver (#18 and #27, April 2023) >11,000 >$10 Billion Financial institution client locations Moved since start of MasterCard Send and Visa Direct programs in 202
Slide 13: Pathward serves as a hub of the BaaS ecosystem
1 2 3 4 5 PATHWARD SERVES AS A HUB OF THE BAAS ECOSYSTEM Debit/Credit Fed / Networks Settlement 14 Financial Institution ATM Sponsorship Clients 80+ ISOs 1,100+ Issuing/Acquiring/ Originating Bank End User End User Card Holder / Merchants Consumer FinTech / Processor Program Manager Acquiring Partne
Slide 14: Resilient commercial loan portfolio
1 2 3 4 5 RESILIENT COMMERCIAL LOAN PORTFOLIO… Working Capital Equipment Structured Insurance Premium Finance Finance Finance Finance • Provides working capital for • Loan and lease financing to provide • Funding small and midsized • Typically, short-term financing to companies to meet short-term ac
Slide 15: Produces stable annual net charge-off rates
1 2 3 4 5 …PRODUCES STABLE ANNUAL NET CHARGE-OFF RATES Fiscal Year End Commercial Finance Loan Balances ($ in millions) 4,000 1.0 $3,723 Pathward Acquires 0.9 3,500 Crestmark $3,024 0.8 3,000 $2,725 0.7 2,500 $2,308 0.6 2,000 $1,916 0.5 $1,510 0.4 1,500 0.3 1,000 $858 $591 $665 0.2 $414 $474 500 $32
Slide 16: Well-developed risk mitigation and compliance capabilities
1 2 3 4 5 WELL-DEVELOPED RISK MITIGATION AND COMPLIANCE CAPABILITIES Enterprise Risk Third-Party Risk Business Continuity Bank Secrecy Act / Anti- Management Management Management Money Laundering Our Enterprise Risk Management Just as Pathward’s ERM program Business Continuity Management To protect
Slide 17: Appendix
APPENDIX Pathward Financial, Inc. (Nasdaq: CASH) | June 2024 Investor Presentation
Slide 18: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted Net Income and Adjusted Earnings Per Share Fiscal Year ($ in thousands, except per share data) 2022 2023 Net income - GAAP 156,386 163,615 Less: Gain on sale of trademarks 50,000 10,000 Less: Loss on disposal of certain mobile generators - (1,993) Add: Accelerated de
Slide 19: Pathward's Balance Sheet
PATHWARD’S BALANCE SHEET BaaS deposits fund Pathward’s earning asset portfolio while delivering ample fee income Pathward’s commitment to maintain the size of its balance sheet enables the return of capital to shareholders Assets Liabilities Earning Assets BaaS Deposits Prepaid Cards Loans & Leases
Slide 20: Definitions
DEFINITIONS Industry Terms Payment Players Banking-as-a-Service (BaaS): Acquiring Bank: Issuing Processor: Providing financial services and solutions to third parties An acquiring bank provides merchant accounts that allow a Connects directly with the networks and issuing bank to to offer through th
Slide 21: Definitions, Continued
Definitions, Continued Commercial Lending Terms Asset-Based Lending: Government Guaranteed Lending: Asset-Based Lending (ABL) refers to business loans that are A government guaranteed loan is a loan guaranteed by a secured based on assets as collateral, generally accounts government agency and finan
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