Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Q3 2019 Earnings Presentation
20 slides from Pathward Financial's earnings presentation, Jul 30, 2019
Slide 1: Meta Financial Group
Meta® Financial Group
Slide 2: Forward-Looking Statements
Forward-Looking Statements The Company and MetaBank may from time to time make written or oral “forward-looking statements,” including statements contained in this press release, the Company's filings with the Securities and Exchange Commission (“SEC”), the Company's reports to stockholders, and in
Slide 3: Financial Highlights
Financial Highlights Third Quarter Ended June 30, 2019 * Net income of $29.3 million, or $0.75 per diluted share, for the quarter. ¢ Net interest margin ("NIM") increased to 5.07% for the fiscal 2019 third quarter, up 213 basis points from the fiscal 2018 third quarter. - Net purchase accounting acc
Slide 4: Ongoing Balance Sheet Remix Provides Powerful Commercial Finance Growth Opportunities
Ongoing Balance Sheet Remix Provides Powerful Commercial Finance Growth Opportunities _ Earning Asset Mixt Yields Aspirational Selected Quarterly Average June 2018 September 2018 June 2019 June 2019 _ Earning Asset Mix Commercial Finance 8% 23% 34% 10.01% >55% Consumer & Warehouse Finance 5% 6% 11%
Slide 5: Rising Loan Yields and More Compelling Asset Mix Driving Differentiated NIM Expansion
Rising Loan Yields and More Compelling Asset Mix Driving Differentiated NIM Expansion Closed Crestmark Acqu August 1, 2018. 3Q18 4Q18 1919 2919 3Q19 —4— Yield on Loans —— Net Interest Margin ——fli—__ SNLUSS. Banks $2B-$10B" Net Interest Margin + SNL U.S. Bank $2-108; includes all Banks in SNL's cove
Slide 6: Disciplined Credit Culture Drives Strong Asset Quality
Disciplined Credit Culture Drives Strong Asset Quality Nonperforming Assets ("NPAs") Adjusted Annualized Net Charge-Offs / Adjusted 1 ages B 8k Quarterly Average Loans & Leases 0.72% Excludes Tax Service and Related Seasonal Average Loans g $51.0 e577 $41.8 $45.4 $40.9 0.73% 0.53% 3Q18 4Q18 1Q19 291
Slide 7: Diversified Loan Growth
Diversified Loan Growth At the Quarter Ended June 30, 2018 March 34, 2019 June 30, 2019 3Q19 % Change From ($ in thousands) 3Q18 2Q19 3Q19 2Q19 3Q18 Commercial Finance 315,021 1,665,891 1,835,850 10.2% 482.8% Asset based lending = 572,210 615,309 7.5% NM Factoring i 287,955 320,344 11.2% NM Lease fi
Slide 8: Regulatory Capital as of June 30, 2019
Regulatory Capital as of June 30, 2019 Strong capital remains above "well-capitalized" Regulatory Capital Ratios 13.22% 13.26% Capital Deployment Priorities 1. Growth initiatives 2. Share repurchases 3. Dividend payout Tier 4 Leverage Common Equity Tier 4 Tier 4 Capital Total Capital i Weta Financia
Slide 9: Commercial Finance
Commercial Finance Third Quarter Fiscal Year 2019 | Nasdaq: CASH
Slide 10: Commercial Finance Growth Engine
Commercial Finance Growth Engine Other $99.7M SBA/USDA $99.8M Asset Based Lending $615.3M Factoring $320.3M $1.84 billion National Commercial Finance Portfolio as of June 30, 2019 Lease Financing $342.0M Insurance Premium Finance $358.8M ‘See Appendix, slide 20, for an overview of the underlying cre
Slide 11: Experienced Management Team Offers Consultative Approach to Targeted Commercial Finance Clients
Experienced Management Team Offers Consultative Approach to Targeted Commercial Finance Clients on Nationwide Basis * Seasoned management team Commercial Finance i 4 - Average tenure at Crestmark of 13 years Industry Concentrations - Average of over 25 years of banking or specialty finance experienc
Slide 12: Strategy Update
42 Strategy Update Third Quarter Fiscal Year 2019 | Nasdaq: CASH
Slide 13: Company Targeted Focus Areas
Company Targeted Focus Areas L J Strategic, tailored solutions to facilitate money movement, enabling payments providers to grow their businesses and build more profitable customer relationships by creating, delivering and sponsoring payment solutions Financial Group’ Incorporated in 1993, is the ho
Slide 14: Differentiated Approach to Driving Shareholder Value
Differentiated Approach to Driving Shareholder Value KEY INITIATIVES PROGRESS 14 Increase Percentage of Funding from Core Deposits Leverage payments division growth opportunities Explore and develop new niche deposit opportunities Gain greater share of deposits from existing strategic relationships
Slide 15: Long-Term Value Drivers
Long-Term Value Drivers Differentiated Model * Target niche commercial and consumer industries to provide opportunities for growth Low-Cost Funding Advantage * National payments business drives low-cost deposits * Re-focus on increasing percentage of funding from core deposits Scalable Lending Platf
Slide 16: Appendix
16 Appendix Third Quarter Fiscal Year 2019 | Nasdaq: CASH
Slide 17: Quarterly Income Statement
Quarterly Income Statement at 3Q19 Change From in S, EXCEL 3Q18 2Q19 3Q19 2Q19 3Q18 $ % $ % Net interest Income 28.4 71.4 67.0 GA) (©% 38.6 136% Card & Deposit Fee Income 23.9 25.4 219 (3.3) (13)% (2.1) (9)% Refund Transfer Product Fee Income 74 31.6 67 (24.9) (79)% (0.7) (9)% Tax Advance Fee Income
Slide 18: Average Balance Sheet
Average Balance Sheet Fiscal Quarter Average - for the quarter ended Jun 30, 2018 Sep 30, 2018 Dec 31, 2018 Mar 31, 2019 Jun 30, 2019 3Q19 Change From in millions) 3Q18 4Q18 1919 2919 3Q19 2919 3Q18 $ % $ % Cash and fed funds sold 57 61 45 281 80 (201) (74)% 23 40% Total Investments 2,253 2,201 2,02
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Efficiency Ratio and Adjusted Operating Leverage For the last twelve months ended $ in thousands, Jun 30, 2018 Sep 30, 2018 Dec 31, 2018 Mar 31, 2019 Jun 30, 2019 Noninterest Expense - GAAP 215,338 228,232 258,485 300,242 323,657 Less: Rental Equipment Depreciation E
Slide 20: Risk Management in Commercial Finance
Risk Management in Commercial Finance Underlying credit philosophy is fundamentally collateral-based lending with underwriting and monitoring focused on the risk management and administrative controls of the collateral borrowing base. Loans are underwritten to ensure that the Bank can recover the fu