Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Q3 2017 Earnings Presentation
19 slides from Pathward Financial's earnings presentation, Jul 26, 2017
Slide 1: Investor Update Third Quarter Fiscal Year 2017
Investor Update Third Quarter Fiscal Year 2017 : 7 Meta
Slide 2: Forward Looking Statements
Forward Looking Statements Inc." (the “Company” MetaBank’ (the “Bank"), + . SEC" id “safe harbor" Litigation Reform Act of 1995. should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “could,” “future” ie a iE "information. tat timates, and inte
Slide 3: Company Overview
Company Overview Prepaid low-cost deposit base provides Prepaid division generates fee income with competitive advantage to obtain high-quality low-cost, long duration deposit base (ES credits and attractive terms for the Retail Bank ‘and Specialty Finance divisions LEVERAGE DEPOSITS BROUGHT IN FROM
Slide 4: The Meta Ecosystem
The Meta Ecosystem Banking Payments Retail Banking Prepaid/ATM/Other Regional community Be with 10 branch locations A prepaid cor industry leader with payments, in lowa and South Dakote diversification Growing, profitable operations Coailing ty soy eanunvner stem eres + Loan growth = 19-30% YoY each
Slide 5: Financial Highlights
Financial Highlights Third Quarter Ended June 30, 2017 Earnings Quarterly net income of $9.8MM+ Fiscal year-to-date (FYTD) net income of $43.2MM Quarterly and FYTD diluted earnings per share of $1.04 and $4.66, respectively FYTD Return on Average Assets of 1.45% and Return on Average Equity of 14.79
Slide 6: Tax Season Review
Tax Season Review Tax product revenue was $5.7 MM in Q3FY17, an increase of 65% compared to Q3FY16. Increase driven by growth in RT fee income primarily related to the acquisition of EPS Financial (EPS) expected, loss rates came in below prior year, primarily due to the Specialty Consumer Services (
Slide 7: Net Interest Margin
Net Interest Margin (smm Net Interest Income and NIM Third Quarter Highlights S280 Net interest income increased 25%, while NIM normalized post tax season Issuance of subordinated debt in Q4FY16 (13 bps) As expected, fiscal third quarter NIM normalized at higher levels, over prior quarter, as tempor
Slide 8: Net Interest Drivers
Net Interest Drivers (smu Fiscal Quarter Average Total Investments and Yield Total Loans and Yield peace) $2,383 437% $2,004 BQ ee 2. $97 $906 $826 0336 eas uaz waz a7 336 eas a7 waz 317 Third Quarter Highlights Excluding refund advance loans, total loan yield for Q3FY17 was 4.73% Interest Bearing L
Slide 9: Earning Asset Mix
Earning Asset Mix (sum) Interest Earning Assets Fiscal Quarter Average Lt i | Loans TH Cash and other Seourties Continue to improve earning asset mix + Asset diversification with higher yields Earning Asset Growth + Increased balances of high-quality specialty Q3-16 to Q3-17 finance and retail loan
Slide 10: Loan Portfolio
Loan Portfolio (sum) Third Quarter Highlights Total loans receivable increased 42%, YoY * Driven by increases in Consumer, rommmere ne Estate, Premium Finance, and Residential Mortgage Consumer loan growth driven by purchase of student loan portfolio in December 2016 Excluding purchased student loan
Slide 11: Loan Portfolio/Credit Quality
Loan Portfolio/Credit Quality Third Quarter Highlights Allowance for loan losses (ALL) was $15.0MM, or 1.2% of total loans at June 30, 2017 Currently over 94% reserved for the tax advance loans and expect them all to be collected or written-off by September 30, 2017 Normalized ALL (excl. tax advance
Slide 12: Balance Sheet Overview
Balance Sheet Overview (sum Total abies Total Assets iW sana < * 3 $4,000 @ "| 3 $3.40 . * $3,235 $3,068 ° y a a 3.46 18 tz a7 osa7 TH vinotesale deposits HE borowings Fiscal Quarter Average TH subocdnated debt Bother abies Third Quarter Highlights Average assets for Q3FY17 grew 30% compared to Q3FY
Slide 13: Regulatory Capital
Regulatory Capital Regulatory Capital Ratios* 18.56% 18.56% inimum Requirement. be WelkCaptaized under Prompt Corrective Action (PCA) Provisions Tier 4 Leverage Common Equity Tier 1 Tier 4 RiskBased Total Risk Based Regulatory ratios ae estimated Period Ending Meta Financial Group, Inc. | MetaBank G
Slide 14: Competitive Landscape
Competitive Landscape Early adopter of sophisticated compliance systems Investments in program design, training and technology + Implemented enhanced BSA/AML technology + Enhanced infrastructure supports growth + These prior investments allow more focus on growing current business and new developmen
Slide 15: Interest Rate Risk Management
Interest Rate Risk Management Interest rate itivity (what believes) Static interest rate risk results do not accurately reflect the Company's true interest rate sensitivity due to our unique and historically predictable deposit base Utilizing quarterly average balances for deposits, cash and borrowi
Slide 16: Industry Recognition
Industry Recognition BUSINESS JOURNAL PART OFTHE USA TODAY NETWORK Bank Dj recto if MetaBank named one of “7 To Watch in ‘17” ani Bank (May 202 ee Top Community Bank ees 2016) SNACHA -NILSQN REPORT Top 40 of ACH originators in 2016 (April 2017) - 5 Top 30 of ACH receivers in 2016 (April 2017) Second
Slide 17: Appendix
Appendix
Slide 18: Income Statement
Income Statement Three Months Ended Net Interest Income 19,919 19,893 19,833 23,966 24,943, Card Fee Income 18,779 17,920 18,414 26,547 23,052 RT Product Fee Income 3,424 285 176 32,487 5,785 69% ‘Tax Advance Fee Income i - 449 31,119 (108) —% Other Income 1,597 1,023 310 2,017 2,091 31% Total Reven
Slide 19: Average Balance Sheet
Average Balance Sheet ‘Gash and cash equivalents Investment securities Mortgage-backed securities Net loans Other assets Total Assets Non terest bearing deposits Imerest bearing deposits Wholesale deposits Shortterm debt Longterm debt Other lablities Total Liabilities Sharehoider's eauity Liabilitie