Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Investor Presentation (February 2022)
24 slides from Pathward Financial's investor presentation, Feb 15, 2022
Slide 1: Investor Presentation Updated February 15, 2022
INVESTOR PRESENTATION UPDATED FEBRUARY 15, 2022
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Meta Financial Group, Inc. (NASDAQ: CASH) | Investor Presentation 2 This investor update contains “forward-looking statements” which are made in good faith by Meta Financial Group, Inc. (the “Company”) pursuant to the “safe harbor” provisions of the Private Securities Liti
Slide 3: We Strive to Increase Financial Availability, Choice, and Opportunity
3 WE STRIVE TO INCREASE FINANCIAL AVAILABILITY, CHOICE, AND OPPORTUNITY THROUGH FINANCIAL EMPOWERMENT. Meta helps fintechs and third-party providers access financial networks, navigate risk, and meet compliance requirements, while overseeing their activities to ensure quality, security, and fairness
Slide 4: History of Meta Financial Group
HISTORY OF META FINANCIAL GROUP 4 Founded in 1954 as First Federal Savings Bank of the Midwest Since inception, dedicated to financial empowerment while developing our franchise and generating shareholder value Headquartered in South Dakota, offices in Arizona, Michigan, Kentucky, Tennessee, Pennsyl
Slide 5: Executing a Proven Strategy to Grow Our Franchise and Generate High Shareholder Returns
EXECUTING A PROVEN STRATEGY TO GROW OUR FRANCHISE AND GENERATE HIGH SHAREHOLDER RETURNS 5 Leader in fast-growing Banking as a Service (BaaS) sector, with diversified portfolio of high-quality financial partners Differentiated business model is powering profitable growth Significant recurring revenue
Slide 6: Financial Inclusion for All Empowers Our Business Lines
FINANCIAL INCLUSION FOR ALL® EMPOWERS OUR BUSINESS LINES 6 1 2 3 4 5 6 7 8 Our Consumer Solutions division provides financial empowerment through expanded financial service access. With capabilities ranging from consumer loans to tax payments advances, America’s underbanked consumers can build credi
Slide 7: Substantial Investments in ESG and Diversity, Equity and Inclusion Advance MetaBank's Mission
SUBSTANTIAL INVESTMENTS IN ESG AND DIVERSITY, EQUITY AND INCLUSION ADVANCE METABANK’S MISSION 7 Formed ESG Committee of Board of Directors and Appointed Vice President of ESG and DEI • Oversees MetaBank’s ESG efforts, including policies, programs, and strategies • The Vice President of ESG and DEI i
Slide 8: Providing Support to Businesses and Consumers During the Pandemic
PROVIDING SUPPORT TO BUSINESSES AND CONSUMERS DURING THE PANDEMIC 8 1,045 ~$300K $300M+ 18,000+ ~70% ~60% ~30% Paycheck Protection Program Economic Impact Payments Cards Issued 16.5M Dollars Disbursed $24.15B Loans Went To Businesses Located In CDFI Zones Loans Went To Businesses With Fewer Than 10
Slide 9: MetaBank Is a Well-Recognized Leader in BaaS
METABANK IS A WELL-RECOGNIZED LEADER IN BAAS 9 • Full range of payment and debit services • Leading issuer of prepaid debit cards • Agent for all three rounds of U.S. Treasury Economic Income Payments • Provide partners with regulatory and compliance oversight • Provide tax return transfer and loan
Slide 10: Meta Powers Partners Throughout the Payments Ecosystem
META POWERS PARTNERS THROUGHOUT THE PAYMENTS ECOSYSTEM 10 +9,000 Prepaid & debit programs launched ~1 Billion Transfer per day in ACH and wire services +1 Billion Cards issued +11 Billion Transactions settled +1 Million Distribution points for prepaid and debit card issuing and merchant acquiring +2
Slide 11: MetaBank Serves as a Hub of the BaaS Ecosystem
METABANK SERVES AS A HUB OF THE BAAS ECOSYSTEM 11 Regulatory/Compliance Oversight OCC Primary Regulator Issuing/Acquiring/Originating Bank End User Card Holder/ Consumer End User Merchants Processor Issuing 20+ Fintech / Program Manager Partners 50+ Community Banks 1200+ Debit/Credit Networks 20+ Fe
Slide 12: Offers Program Managers a Full Suite of BaaS Solutions
OFFERS PROGRAM MANAGERS A FULL SUITE OF BAAS SOLUTIONS 12 PARTNERS TAX SERVICES Refund Advance Refund Transfers PAYMENTS Prepaid (Gift, Payroll, General Purpose Reloadable, etc.) Consumer Banking Solutions (Debit, Savings) Faster Payments Transactional Payments (ACH, Wire, Receiving, Originating) Me
Slide 13: Differentiated Business Model Generates Consistently High Net Interest Spread
DIFFERENTIATED BUSINESS MODEL GENERATES CONSISTENTLY HIGH NET INTEREST SPREAD 13 • Low-cost deposits are invested in a granular, well-managed portfolio of high-return commercial finance assets • High proportion of fee income • Generated by tailored solutions in Payments, Tax, and Consumer Lending li
Slide 14: Commercial Finance Business Consists of a Group of Specialized Lenders
COMMERCIAL FINANCE BUSINESS CONSISTS OF A GROUP OF SPECIALIZED LENDERS Meta Financial Group, Inc. (NASDAQ: CASH) | Investor Presentation 14 • Provide small and medium-sized businesses, as well as large enterprises, with flexible capital solutions they cannot get elsewhere • Collateral-based lending
Slide 15: Significant Recurring Revenue with Clear Growth Drivers
SIGNIFICANT RECURRING REVENUE WITH CLEAR GROWTH DRIVERS • Payments and Tax relationships are “sticky,” produce high proportion of recurring revenue • Opportunity in Consumer Lending to provide products to strategic partners with payments and tax distribution potential • Participate in fintech indust
Slide 16: Realizing Operating Efficiencies from Disciplined Expense Management
REALIZING OPERATING EFFICIENCIES FROM DISCIPLINED EXPENSE MANAGEMENT 16 Continued Focus on Improving Efficiency Ratio • Achieve 2x operating leverage in each business line • Eliminate redundant processes and improve collaboration across teams • Automate to enhance productivity Efficiency Ratio 1 2 3
Slide 17: Cash-Generative Business Enables Return of Excess Capital to Shareholders
CASH-GENERATIVE BUSINESS ENABLES RETURN OF EXCESS CAPITAL TO SHAREHOLDERS 17 Capital Deployment Priorities $359.6M TOTAL SHARE REPURCHASES MAY 2019 TO DEC 2021 $37.8M TOTAL DIVIDENDS PAID FY16 – Q1 FY22 1 2 3 4 5 6 7 8 Meta Financial Group, Inc. (NASDAQ: CASH) | Investor Presentation Invest in organ
Slide 18: Strong and Diverse Management Team and Board of Directors
STRONG AND DIVERSE MANAGEMENT TEAM AND BOARD OF DIRECTORS 18 Brett Pharr Chief Executive Officer and Director Glen Herrick EVP and Chief Financial Officer Charles Ingram EVP and Chief Technology & Product Officer Sonja Theisen EVP and Chief Governance, Risk, & Compliance Officer Kia Tang EVP and Chi
Slide 19: Investment in Compliance and Infrastructure, Bank Charter, and Durbin Threshold Create a Banking as a Service Offering
INVESTMENT IN COMPLIANCE AND INFRASTRUCTURE, BANK CHARTER, COMBINED WITH DURBIN THRESHOLD, CREATE A COMPELLING BANKING AS A SERVICE OFFERING 19 National Bank • MetaBank is a fiduciary who issues accounts, holds the funds, and manages the money, moving billions of dollars each day. BSA/AML Compliance
Slide 20: Appendix
APPENDIX 20Meta Financial Group, Inc. (NASDAQ: CASH) | Investor Presentation
Slide 21: Credit Controls Limit the Risk in Consumer and Warehouse Programs
CREDIT CONTROLS LIMIT THE RISK IN CONSUMER AND WAREHOUSE PROGRAMS Consumer Credit Program Consumer credit programs with marketplace lenders offer Meta a risk adjusted return, protected by certain layers of credit support and balance sheet flexibility. Programs are offered to strategic partners with
Slide 22: Definitions
DEFINITIONS Industry Terms 22 Types of Payment Cards Banking-as-a-Service (BaaS): Providing financial services and solutions to third parties to offer through their distribution channels. Push-to-debit: The ability to move money directly to an end user. At Meta – our push-to-debit capabilities are c
Slide 23: Definitions, Continued
DEFINITIONS, CONTINUED Payment Players 23 Acquiring Bank: An acquiring bank provides merchant accounts that allow a business to accept card payments and works in conjunction with the acquirer processor. In some cases the acquiring bank and acquirer processor are a single entity. Acquiring Processors
Slide 24: Definitions, Continued
DEFINITIONS, CONTINUED 24 Commercial Lending Terms Asset-Based Lending: Asset-Based Lending (ABL) refers to business loans that are secured based on assets as collateral, generally accounts receivable, inventory, equipment or other balance sheet assets. Accounts Receivable: Accounts Receivable (A/R)
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