Mystate Limited · ASX:MYS
Mystate — Investor Presentation (May 2021)
51 slides from Mystate's investor presentation, May 24, 2021
Slide 1: Investor update & capital raising
MyStateLimited Investor update & capital raising The human way to bank
Slide 2: Presenters and agenda
0 1 Melos Sulicich O 2 Melos Sulicich Managing Director & CEO Managing Director & CEO Gary Dickson Chief Financial Officer 0 3 Gary Dickson 04 Melos Sulicich Chief Financial Officer Managing Director & CEO
Slide 3: Executive summary
MyStateLimited Executive summary Trading update 2025 strategy * Momentum continues with financial performance A focused and accelerated growth strategy: ahead of prior year. * Increased rate of loan book growth with further * Operating expenses managed carefully with further geographic diversificati
Slide 4: Trading updates
Trading " pasts 01
Slide 5: Financial YTD April 2021 key highlights
MyStateLimited Financial YTD April 2021 Key highlights Strategic initiatives delivered +17.1% Net profit after tax -360bps Cost to income! +16.2% Earnings per share +10bps Net interest margin +10.6% Customer deposits +120bps Return on tangible equity Grow Increase digital capability + automation Bui
Slide 6: Financial YTD April 2021 performance summary
MyStateLimited Financial YTD April 2021 performance summary Pre-provision operating profit ($m)! 45.1 38.1 +18.3% A * — Strong top line momentum with NIM Net profit after tax ($m) 30.2 25.8 417.1% A conenuing to benefit from lower funding Underlying net profit after tax ($m)! 31.5 26.7 +18.2% A + Po
Slide 7: Operating performance
MyStateLimited * Lending book growth a result of continued diversification across the eastern seaboard. Personal loans origination ceased. * NIM benefiting from lower funding costs and growth in retail funding. * Disciplined management of costs remains a priority. * NPAT growth a result of strong ne
Slide 8: Continued credit quality remains a hallmark
MyStateLimited * Continued credit quality remains a hallmark of MyState's strategy and balance sheet strength. * Focus on low-risk, owner occupied lending with LVR of less than 80%. * Growth in >90% LVR loans reflects strong support of the First Home Loan Deposit Scheme. Home loan book - LVR profile
Slide 9: Capital and funding
MyStateLimited Capital 12.72% *°2PPS 43.24% 12.79% Reduction in total capital ratio since 31 Dec 2020 reflects payment of FY21 interim dividend and balance sheet growth. 10.87% Funding Apr-20 Dec-20 Apr-21 Balance sheet Capital (%) Capital raising will provide capital flexibility and 10.89% | 11.24%
Slide 10: TPT Wealth
MyStateLimited TPT Wealth Funds under management ($m) * — Distribution capability enhanced to drive growth on the eastern seaboard, to 45.5% compliment the team in the heartland market of Tasmania. 1,170 1,069 * FUM increased 5.5% financial YTD April : 2021 to $1.128b driven by income fund growth. ;
Slide 11: Strategy 2021 - 2025
Slide 12: Strong heartland presence and growing national reach
MyStateLimited Strong heartland presence and growing national reach... Home Loan geographic Home Loan geographic concentration — June 2016 concentration — April 2021 Total home loan book $3.7b Total home loan book $5.3b NT NT 0.1% OLD 0.1% aLb 16.2% 20.0% WA WA SA SA 2.5% 12% 1.4% 0.8% NSW NSW 12.4%
Slide 13: ...which has evolved into a digital bank
MyStateLimited ...which has evolved into a digital bank 2016 Our journey 2021 Branch based “credit union” * Geographically concentrated = customer base * Legacy technology platforms Digital Bank + Increasingly geographically diverse : Customer-centred customer base * Disparate systems and processes
Slide 14: Well positioned for accelerated growth
MyStateLimited Well positioned for accelerated growth Proven execution capability Digital transformation driving growth Transformed digital bank attracting new customers. * ‘Human way to bank’ underpinned by strong digital Strong customer NPS demonstrating deep customer capability. relationships. Na
Slide 15: Proven execution capability
MyStateLimited Proven execution capability Strategic initiatives delivered 2016 to 2021 + Home loan book has grown 43% from $3.7bn to $5.3bn + New customer growth across eastern seaboard + Customer funding ratio > 72% from 66.9% in 2016 * Ceasing origination of Personal Loans Grow our balance sheet
Slide 16: Capital invested generating loan book growth
MyStateLimited CET1 capital ($m)! CET1 (%): 140 109; (102) 215 184 FY16CET1 Cumulative Cumulative FY20 CET1 dividends capital retained * Over 5 years $31m of capital invested to support loan growth. Reported loans ($m) +39.2% 5,366 3,853 FY16 1H'21 * Loan book has grown by $1,513m since FY16, repres
Slide 17: Digital transformation driving growth
MyStateLimited Digital transformation driving growth Dec Feb 2019 2020 Contact Online Online Trustees Centre Feb mortgage managed fund A services system G origination platform ug platform replacement 2018 2020 upgrade Single Core bankin New Payments Al-driven personalised On track to launch system (
Slide 18: Operating environment creating opportunities
MyStateLimited Operating environment creating opportunities * Ina world still feeling the effects of COVID-19, business is adapting to a lower growth environment; regulation, capital requirements, record low interest rates, intense competition and shifting buying patterns are all affecting profitabi
Slide 19: Strategy 2021 - 2025
MyStateLimited Strategy 2021 - 2025 Our ambition is to grow our share in deposits, lending and FUM. Our growth strategy is focused and bold. It builds on our strong financial position and high customer NPS to access specific growth opportunities in eastern seaboard markets, via a strong digital and
Slide 20: MyState sees a significant opportunity
MyStateLimited + MyState sees a significant opportunity across its markets to accelerate growth, creating value for shareholders. * Since 2016 MyState’s home loan book has increased +43%.? * Opportunity to build on past success and rapidly accelerate growth trajectory. * Targeting above system growt
Slide 21: Capital strength
Slide 22: Capital raising will support significant growth plans
MyStateLimited Capital raising will support MyState’s significant growth plans . seodt . . CET1(%)! * MyState remains well capitalised with all capital ratios comfortably above regulatory 2) 13.58% requirements. 11.24% 2.34% * Additional capital will be used to rapidly accelerate the execution of My
Slide 23: Guidance & closing remarks
Slide 24: FY21 guidance and closing remarks
MyStateLimited FY21 guidance and closing remarks ‘©) Guidance FY21 | GI: Closing remarks + Expect FY21 NPAT and EPS (pre capital raising) to * Demonstrated capability on strategic execution. ti tum fi FYTD April 21. conrinue momentum trom pr * Trusted and respected challenger brand with leading + Pr
Slide 25: Capital raising info
Capital aising inf Melos $ licich and Gary Dickso 25
Slide 26: Offer size and structure
MyStateLimited Offer size and structure Offer price Use of proceeds Institutional offer Retail offer Board participation Underwriting Ranking of new shares Key details of capital raise Fully underwritten institutional placement (Placement) to raise approximately $20 million Partially underwritten 1
Slide 27: Key details of capital raise
MyStateLimited Key details of capital raise Announcement of Equity Raising Placement and Institutional Entitlement Offer bookbuild Announcement of results of Placement and Institutional Entitlement Offer Shares recommence trading on ASX on an “ex-entitlement” basis Entitlement Offer record date (7.0
Slide 28: Key risks
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Slide 29: Key risks
MyStateLimited Key risks This section identifies the areas that the directors of MyState Limited (ACN 133 623 962) (the Company) regard as the major risks associated with an investment in the Company, being both risks specific to the Company and risks of a general nature. Potential investors should
Slide 30: Key risks
MyStateLimited Key risks Credit risk The Company relies on its credit risk framework of policies, procedures and systems for controls on credit risk. A failure to comply with these processes, policies or systems may expose MyState Limited to greater than projected credit risk. While MyState Limited
Slide 31: Key risks
MyStateLimited Key risks Dependence on key personnel MyState Limited has a number of key executives, employees and directors who play an integral role in MyState Limited's business and its pursuit of its strategic objectives. The unexpected departure of an individual in a key role, or the failure to
Slide 32: Key risks
MyStateLimited Key risks Increase in costs for labour, suppliers and contractors There is a risk that MyState Limited may need to pay higher than expected costs to acquire or retain the necessary employees, suppliers and contractors to enable MyState Limited to continue operating its business and ac
Slide 33: Key risks
MyStateLimited Key risks Operational, technology and cyber risks The business of MyState Limited depends on the efficient and uninterrupted operation of core IT infrastructure and systems. Any material interruptions to these systems would adversely impact the Company's ability to operate its busines
Slide 34: Key risks
MyStateLimited Key risks Market price of ordinary shares will fluctuate There are risks associated with any securities investment. The prices at which the securities trade may fluctuate in response to a number of factors. Furthermore, the stock market may experience extreme price and volume fluctuat
Slide 35: Underwriting agreement - termination rights
MyStateLimited Underwriting agreement - termination rights Underwriting Agreement - Right of Termination The Company has entered into an agreement with the Lead Manager (Underwriting Agreement) with respect to $20 million under the Placement and $30 million under the Entitlement Offer. The Lead Mana
Slide 36: Underwriting agreement - termination rights
MyStateLimited Underwriting agreement - termination rights Schedule 3 Termination Events (a) (market fall) the S&P/ASX 200 Index falls to a level that is 87.5% or less of the level as at the close of trading immediately prior to the date of the Underwriting Agreement: (i) at any time before the sett
Slide 37: Underwriting agreement - termination rights
MyStateLimited Underwriting agreement - termination rights Schedule 3 Termination Events (continued) (h) * (change of law) there is introduced or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any State of Australia a new law or regulation, or the Rese
Slide 38: Underwriting agreement - termination rights
MyStateLimited Underwriting agreement - termination rights Schedule 3 Termination Events (continued) (m) (no misleading or deceptive conduct) the Issuer engages in conduct that is misleading or deceptive or which is likely to mislead or deceive in connection with the making of the Offer; (n) * (mark
Slide 39: Underwriting agreement - termination rights
MyStateLimited Underwriting agreement - termination rights Schedule 3 Termination Events (continued) (v) (prosecution) any of the following occurs: (i) adirector or proposed director of the Issuer is charged with an indictable offence; (ii) any government agency commences any public proceedings agai
Slide 40: Appendices
Slide 41: A trusted and respected brand
MyStateLimited A trusted and respected brand... MyState is a unique provider of banking, trustee and wealth management services to more than 150,000 customers across Australia through its retail brands - MyState Bank and TPT Wealth. MyState listed on the ASX in 2009. MyState currently has a market c
Slide 42: ...with a long and proud history
MyStateLimited ...with a long and proud history 66.6 ¢ @2/¢5 - Te 1887 1958 1998 (4) 2007 2011 2014 2018 2019 = g MyState — ~~ The Perpetual MyState Trastece, 1970 2001 2009 2016 Meth bank Executors and brand Agency Tasmanian Company of Island State Credit Union Perpetual Trustees MyState Financial
Slide 43: Migration to digital continues
MyStateLimited Migration to digital continues Best in class Al insights in MyState Bank app generating over 1.5m insights per month. 94% of transactions completed digitally. Digitisation of back office processes increasing scalability and speed. Customer uptake of internet and mobile banking increas
Slide 44: Mortgage deferral assistance
MyStateLimited Mortgage deferral assistance Total loans with assistance Total loans with assistance Financial assistance (facilities, no.) (balances, $m) + — Avery small number of accounts remained in deferral in April (76 customers; 73 home loans and 3 personal loans). 12 . 6 48 $126m $28m_— 19 * 9
Slide 45: December 2020 pro forma balance sheet
MyStateLimited December 2020 pro forma balance sheet Interi Equity raise | Transact . Actual Pro f Fro forma balance sm | etal de proceeds COS sem sheet illustrates the impact of the Assets Offer on the 31 Cash and liquid assets 113.6 151.2 December 2020 Due from other financial institutions 21.4 21
Slide 46: Glossary
1H: First half of financial year 2H: Second half of financial year ADI: Authorised deposit-taking institution APRA: Australian Prudential Regulation Authority Avg: Average ASX: Australian Securities Exchange BBSW: Bank Bill Swap Rate BDD: Bad & Doubtful Debt Expense bps: basis points CAGR: Compounde
Slide 47: Important notice
This Presentation has been prepared by MyState Limited (ACN 133 623 962) ("MyState" or "Company’) in relation to a pro rata accelerated non-renounceable entitlement offer of new shares ("New Shares") to eligible institutional investors and eligible retail investors ("Entitlement Offer") and placemen
Slide 48: Forward-looking statements
Forward-looking statements This Presentation may contain “forward-looking” statements including statements, guidance, forecasts, estimates, prospects, projections or statements in relation to future matters, including statements regarding MyState’s intent, belief or current expectations with respect
Slide 49: International offer restrictions
This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except
Slide 50: Hong Kong
Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and F
Slide 51: Singapore
Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in connection with the offer or sale,