Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Q4 2017 Earnings Presentation
19 slides from Pathward Financial's earnings presentation, 2017
Slide 1: Investor Update: Fourth Quarter and Fiscal Year End 2017
Investor Update Fourth Quarter and Fiscal Year End 2017 Fourth Quarter & Fiscal Year End 2017 | NASDAQ: CASH
Slide 2: Forward Looking Statements
Forward Looking Statements Meta Financial Group, Inc.® (the “Company”) and its wholly-owned subsidiary, MetaBank® (the “Bank”), may from time to time make written or oral “forward-looking statements,” including statements contained in this investor update, the Company’s filings with the Securities a
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 credits and attractive terms for the Retail Bank and Specialty Finance divisions LEVERAGE DEPOSITS BROUGHT IN FROM OUR
Slide 4: The Meta Ecosystem
The Meta Ecosystem Banking Payments Retail Banking Prepaid/ATM/Other Regional community bank with 10 branch locations A prepaid card industry leader with payments in Iowa and South Dakota diversification Growing, profitable operations Continuing to grow “annuity-like” stream of fee • Loan growth of
Slide 5: Financial Highlights
Financial Highlights Record breaking fiscal year earnings • Fiscal year 2017 (FY 2017) GAAP net income of $44.9 million, an increase of 35% over fiscal year 20161 • Quarterly GAAP net income of $1.7 million2 • Quarterly and FY 2017 diluted earnings per share of $0.19 and $4.83, respectively • FY 201
Slide 6: Income Growth ($MM)
Income Growth ($MM) Non-interest income grew 71% in FY 2017 compared to FY 2016 • Card fee income continues to accelerate year over year, adding $95 million to non-interest income in FY $172.2 2017 65% ◦ Growth was driven by synergies with our tax businesses, growth in our core payments business, an
Slide 7: Net Interest Margin ($MM)
Net Interest Margin ($MM) Net Interest Income and NIM Fourth Quarter Highlights $24.94 Net interest income increased 23%, compared to Q4 $24.49 FY 2016 $23.97 • Issuance of subordinated debt in Q4 FY 2016 (12 bps) • Continued to employ balance sheet leverage strategy to utilize the excess capital th
Slide 8: Net Interest Drivers ($MM)
Net Interest Drivers ($MM) Fiscal Quarter Average Total Investments and Yield Total Loans and Yield $2,358 $2,383 4.73% $2,326 4.41% 4.56% 4.55% 4.37% 4.69% 4.53% $2,067 3.98% $1,276 $2,039 $1,204 $1,302 3.24% $1,271 3.20% $1,195 2.93% 2.92% $1,137 3.19% $970 $906 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q4-16
Slide 9: Earning Asset Mix ($MM)
Earning Asset Mix ($MM) Interest Earning Asset Mix Q4-16 30% $3,017 Fiscal Quarter Average Q1-17 30% $3,223 Q2-17 33% $3,962 Q3-17 33% $3,628 Q4-17 35% $3,675 Tax-Exempt Investment Securities Mortgage-Backed Securities Loans Cash and Other Securities Continue to improve earning asset mix • Asset div
Slide 10: Loan Portfolio ($MM)
Loan Portfolio ($MM) Total loans receivable increased 43%, YoY Loans Receivable Composition • Primarily driven by increases in Consumer, Commercial Real $1,327 Estate, Premium Finance, and Residential Mortgage loans $1,226 • Consumer loan growth primarily driven by purchase of student $1,115 $1,152
Slide 11: Loan Portfolio/Credit Quality
Loan Portfolio/Credit Quality Fourth Quarter Highlights Allowance for loan losses (ALL) was $7.5 million, or 0.6% of total loans, at September 30, 2017 • Recovery of $0.1 million was recorded for the fourth quarter primarily due to continued collections and recoveries on tax advance loans from the 2
Slide 12: Balance Sheet Overview ($MM)
Balance Sheet Overview ($MM) Total Average Assets Total Average Liabilities $4,414 Q4-16 $2,901 Fiscal Quarter Average $4,000 $4,034 Q1-17 $3,139 Q2-17 $4,022 $3,491 Q3-17 $3,575 $3,235 Q4-17 $3,598 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Fiscal Quarter Average Non-interest bearing deposits Interest bearing d
Slide 13: Regulatory Capital
Regulatory Capital Regulatory Capital Ratios¹ 18.22% 18.22% 18.41% 18.59% 13.97% 14.46% Minimum Requirement to 9.64% be Well-Capitalized under Prompt Corrective Action 7.64% (PCA) Provisions Tier 1 Leverage Common Equity Tier 1 Tier 1 Risk-Based Total Risk-Based 1Regulatory ratios are estimated Peri
Slide 14: Competitive Landscape
Competitive Landscape Early adopter of sophisticated compliance systems Investments in program design, training and technology • Implemented enhanced BSA/AML technology • Enhanced infrastructure supports growth • These prior investments allow more focus on growing current business and new developmen
Slide 15: Interest Rate Risk Management
Interest Rate Risk Management Interest rate sensitivity (what management believes) Static interest rate risk results do not accurately reflect the Company's true interest rate sensitivity due to our unique and historically predictable deposit base • Utilizing quarterly average balances for deposits,
Slide 16: Industry Recognition
Industry Recognition #1 Top Growth Bank (May 2016) Named one of Fortune magazine's One of the top performing mid-size Named Top Community Bank 100 Fastest-Growing Companies banks in 2016 (June 2017) (August 2016) (September 2017) Top 40 of ACH originators in 2016 EPS Financial Business of the (April
Slide 17: Appendix
Appendix 17 Fourth Quarter & Fiscal Year End 2017 | NASDAQ: CASH
Slide 18: Income Statement
Income Statement Percent Percent Three Months Ended Change Fiscal Year Ended Change FY 2017 Q4 Q1 Q2 Q3 Q4 Q4-17 vs. September September vs. FY ($ in thousands) Sept. 2016 Dec. 2016 March 2017 June 2017 Sept. 2017 Q4-16 2016 2017 2016 Net Interest Income 19,893 19,833 23,966 24,943 24,488 23 % 77,30
Slide 19: Average Balance Sheet
Average Balance Sheet Percent Percent Fiscal Quarter Average Change Fiscal Year Average Change FY 2017 Q4 Q1 Q2 Q3 Q4 Q4-17 vs. FY FY vs. FY ($ in thousands) Sept. 2016 Dec. 2016 March 2017 June 2017 Sept. 2017 Q4-16 2016 2017 2016 Cash and cash equivalents 50,976 195,004 404,688 50,235 85,158 67 %