Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Q2 FY2022 Earnings Presentation
18 slides from Pathward Financial's earnings presentation, 2022
Slide 1: Quarterly Investor Update Second Quarter Fiscal Year 2022
QUARTERLY INVESTOR UPDATE SECOND QUARTER FISCAL YEAR 2022
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This investor update contains “forward-looking statements” which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as “may,” “hop
Slide 3: We Strive to Increase Financial Availability, Choice, and Opportunity
WE STRIVE TO INCREASE FINANCIAL AVAILABILITY, CHOICE, AND OPPORTUNITY THROUGH FINANCIAL EMPOWERMENT. We work to disrupt traditional banking norms by developing partnerships with fintechs, affinity groups, government agencies, and other banks to make a range of quality financial products and services
Slide 4: Second Quarter Business Highlights & Key Strategic Initiatives
SECOND QUARTER BUSINESS HIGHLIGHTS & KEY STRATEGIC INITIATIVES Optimize Optimize Optimize Interest-Earning Assets Deposits Operating Efficiencies Continued focus on growing Total deposits fell by $2.8 billion, or Efficiency ratio of 59.83% compared commercial finance business lines. 33%, from March
Slide 5: Other Business Developments
OTHER BUSINESS DEVELOPMENTS SECOND QUARTER ENDED MARCH 31, 2022 • On March 29, 2022, the Company announced it is changing its name to Pathward Financial, Inc.TM, and its bank subsidiary, MetaBank, N.A., will be changing its name to PathwardTM, N.A. – Pathward signifies our Company’s purpose to power
Slide 6: Summary Financial Results
SUMMARY FINANCIAL RESULTS SECOND QUARTER ENDED MARCH 31, 2022 INCOME STATEMENT ($ in thousands, except per share data) 2Q21 1Q22 2Q22 Net interest income 73,850 71,613 83,800 Provision for credit losses 30,290 186 32,302 Total noninterest income 113,453 86,591 109,766 Total noninterest expense 95,97
Slide 7: 2022 Tax Season Update
2022 TAX SEASON UPDATE Refund advances (“RAs”) and refund-transfers (“RTs”) leverage banking-as-a-service (“BaaS”) infrastructure and are core to MetaBank’s mission, as they allow consumers quicker access to their money. • RA originations of $1.83 billion compared to $1.79 billion in the 2021 tax se
Slide 8: BaaS Capabilities Generate Increasing Low-Cost Deposits and Revenue
BaaS CAPABILITIES GENERATE INCREASING LOW-COST DEPOSITS AND REVENUE Growth in BaaS deposits Growth in BaaS revenue Average Payments Deposits* % of Total Revenue ($ in billions) % of Payments Revenue ($ in millions) $120.0 59% 58% $100.0 $80.0 $2.86 $0.02 $0.02 $0.82 $1.47 $1.64 $60.0 $40.0 22% $6.43
Slide 9: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS SECOND QUARTER ENDED MARCH 31, 2022 BALANCE SHEET PERIOD ENDING ($ in thousands) 2Q21 1Q22 2Q22 Cash and cash equivalents 3,724,242 1,230,100 237,680 Investments 1,552,892 1,833,733 2,090,765 Loans held for sale 67,635 36,182 31,410 Loans and leases (HFI)1 3,657,531 3,684,26
Slide 10: Diversified Earning Asset Portfolio
DIVERSIFIED EARNING ASSET PORTFOLIO Quarterly Average Earning Asset Mix At the Quarter Ended % in charts represent % of total interest earning assets MAR 31, 2021 MAR 31, 2022 ($ in thousands) 2Q21 2Q22 Y/Y Δ COMMERCIAL FINANCE 2,505,922 2,914,829 16% Term lending 891,414 1,111,076 25% Asset-based l
Slide 11: Overview of Loan Portfolio
OVERVIEW OF LOAN PORTFOLIO MRQ ($ in millions) Business Line Balance Sheet Category 2Q21 1Q22 2Q22 Yield Commercial Finance Guaranteed portion of US govt SBA/USDA loans SBA/USDA 68.5 44.6 61.7 Unguaranteed portion of US govt SBA/USDA loans SBA/USDA 54.8 101.1 109.5 Paycheck protection program loans
Slide 12: Asset Quality
ASSET QUALITY Nonperforming Assets (“NPAs”) Adjusted Net Charge-Offs (“NCOs”)¹ ($ in millions) Excludes Tax Services NCOs and Related Seasonal Average Loans ($ in millions) 1.25% 0.92% 0.77% 0.64% 0.58% 0.56% 0.48% 0.44% 0.32% 0.37% $11.4 $61.8 $46.7 $3.8 $7.0 $45.1 $44.3 $38.3 $2.8 $3.4 2Q21 3Q21 4
Slide 13: Interest Rate Risk Management
INTEREST RATE RISK MANAGEMENT MARCH 31, 2022 12-Month Interest Rate Sensitivity from Base Net Interest Income • Focus is on selectively adding investment portfolio duration to improve yield and protect margin against 35% falling rates. Parallel Shock Ramp • Interest rate risk shows asset sensitive b
Slide 14: Capital and Sources of Liquidity
CAPITAL AND SOURCES OF LIQUIDITY REGULATORY CAPITAL AS OF MARCH 31, 2022 Meta Financial MetaBank, Capital Ratio Trends At March 31, 2022¹ Group, Inc. N.A. Tier 1 Leverage Ratio Tier 1 Leverage 6.80% 7.79% 8.69% 8.52% Common Equity Tier 1 11.26% 13.26% 7.83% 7.67% 7.79% 6.85% 7.39% Tier 1 Capital 11.
Slide 15: Appendix
APPENDIX Meta Financial Group, Inc. (Nasdaq: CASH) | Quarterly Investor Presentation 15
Slide 16: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted Net Income and Adjusted Earnings Per Share ($ in thousands, except per share data) 2Q21 1Q22 2Q22 Net income - GAAP 59,067 61,324 49,251 Less: Gain on sale of trademarks - 50,000 - Less: Rebranding Expenses - 3 2,819 Add: Income tax effect from gain on sale of tradem
Slide 17: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted Annualized NCOs and Adjusted Loans and Leases For the quarter ended ($ in thousands) Mar 31, 2021 Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Net Charge-offs 3,696 12,333 31,753 1,129 11,226 Less: Tax services net charge-offs (54) 9,488 24,798 (2,313) (183) A
Slide 18: Financial Measure Reconciliations
FINANCIAL MEASURE RECONCILIATIONS Efficiency Ratio For the last twelve months ended ($ in thousands) Mar 31, 2021 Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Noninterest Expense - GAAP 320,070 330,352 343,683 353,544 360,733 Net Interest Income 266,499 272,837 278,991 284,605 294,555 Noninte