Slide 1: Quarterly Investor Update Third Quarter Fiscal Year 2022
QUARTERLY INVESTOR UPDATE THIRD QUARTER FISCAL YEAR 2022 Pathward Financial, Inc. (Nasdaq: CASH) | Quarterly Investor Presentation 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 2 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,” “h
Slide 3: We strive to increase financial availability, choice, and opportunity
3 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 servic
Slide 4: Optimize Interest-Earning Assets, Deposits, Operating Efficiencies
Optimize Interest-Earning Assets Optimize Deposits Optimize Operating Efficiencies Efficiency ratio of 62.84% compared to 61.75% as of June 30, 2021.1 • Drive long-term simplification and optimization of existing business platforms. • Exiting two tax partner relationships, driving simplification and
Slide 5: Other Business Developments Third Quarter Ended June 30, 2022
OTHER BUSINESS DEVELOPMENTS THIRD QUARTER ENDED JUNE 30, 2022 5Pathward Financial, Inc. (Nasdaq: CASH) | Quarterly Investor Presentation • On July 13, 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
Slide 6: Earnings Guidance
EARNINGS GUIDANCE • Fiscal Year 2023 earnings assume a Fed Funds rate of 3.50% by September 2023 The Company’s expectations are as of the date of this presentation and are subject to substantial uncertainty. Our results may be materially affected by many factors, such as changes in economic conditio
Slide 7: Summary Financial Results Third Quarter Ended June 30, 2022
SUMMARY FINANCIAL RESULTS THIRD QUARTER ENDED JUNE 30, 2022 7 1 Amounts presented are used in the two-class earnings per common share calculation. INCOME STATEMENT ($ in thousands, except per share data) 3Q21 2Q22 3Q22 Net interest income 68,475 83,800 72,151 Provision for credit losses 4,612 32,302
Slide 8: 2022 Tax Season Recap
2022 TAX SEASON RECAP 8 Refund advances (“RAs”) and refund-transfers (“RTs”) leverage banking-as-a-service (“BaaS”) infrastructure and are core to our Pathwardmission, as they allow consumers quicker access to their money. • RA originations of $1.83 billion compared to $1.79 billion in the 2021 tax
Slide 9: BaaS Capabilities Generate Low-Cost Deposits and Revenue
$- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 3Q21 2Q22 3Q22 Payments Tax Services Consumer Lending BaaS CAPABILITIES GENERATE LOW-COST DEPOSITS AND REVENUE 9 BaaS revenue Average Payments Deposits* ($ in billions) 36% 58% 32% % of Total Revenue ($ in millions) *Deposit balances includes stimulus-related
Slide 10: Balance Sheet Highlights Third Quarter Ended June 30, 2022
BALANCE SHEET HIGHLIGHTS THIRD QUARTER ENDED JUNE 30, 2022 10 BALANCE SHEET PERIOD ENDING ($ in thousands) 3Q21 2Q22 3Q22 Cash and cash equivalents 720,243 237,680 157,260 Investments 1,981,852 2,090,765 2,000,400 Loans held for sale 87,905 31,410 67,571 Loans and leases (HFI)1 3,496,670 3,730,190 3
Slide 11: Quarterly Average Earning Asset Mix
Quarterly Average Earning Asset Mix % in charts represent % of total interest earning assetsAt the Quarter Ended JUN 30, 2021 JUN 30, 2022 ($ in thousands) 3 Q 2 1 3 Q 2 2 Y/Y Δ COMMERCIAL FINANCE 2,586,527 2,947,903 14% Term lending 920,279 1,047,764 14% Asset-based lending 263,237 402,506 53% Fact
Slide 12: Overview of Loan Portfolio
OVERVIEW OF LOAN PORTFOLIO 12 ($ in millions) Business Line Balance Sheet Category 3Q21 2Q22 3Q22 MRQ Yield Commercial Finance Commercial Finance Guaranteed portion of US govt SBA/USDA loans SBA/USDA 71.9 61.7 59.3 Unguaranteed portion of US govt SBA/USDA loans SBA/USDA 48.6 109.5 135.1 Paycheck Pro
Slide 13: Commercial Finance Industry Concentrations
COMMERCIAL FINANCE INDUSTRY CONCENTRATIONS1 13Pathward Financial, Inc. (Nasdaq: CASH) | Quarterly Investor Presentation 1Total renewable energy debt financing outstanding was $401.2 million in 2Q22. Majority of balances in term lending balance sheet category. Transportation and Warehousing Manufactu
Slide 14: Key Credit Metrics
$2.8 $7.0 $3.4 $11.4 $4.2 0.32% 0.77% 0.37% 1.25% 0.46% 3Q21 4Q21 1Q22 2Q22 3Q222 Period Ended Adj. NCOs Adj. NCOs / Adj. Average Loans Adjusted Net Charge-Offs (“NCOs”)¹ Excludes Tax Services NCOs and Related Seasonal Average Loans ($ in millions) KEY CREDIT METRICS • Annualized adjusted net charge
Slide 15: Interest Rate Risk Management
-10% 5% 20% 35% -100 +100 +200 +300 Parallel Shock Ramp 1 Fixed rate securities, loans and leases are shown for contractual periods. -2,000 0 2,000 4,000 Month 1-12 Month 13-36 Month 37-60 Month 61-180 V o lu m e ( $ M M ) Period Variance Total Assets Total Liabilities INTEREST RATE RISK MANAGEMENT
Slide 16: Capital and Sources of Liquidity
6.85% 7.67% 7.39% 6.80% 8.23% 7.83% 8.69% 8.52% 7.79% 8.22% 3Q21 4Q21 1Q22 2Q22 3Q22 CAPITAL AND SOURCES OF LIQUIDITY REGULATORY CAPITAL AS OF JUNE 30, 2022 Minimum Requirement to be Well-Capitalized under Prompt Corrective Action Provisions Pathward Financial, Inc. Pathward, N.A. Capital Ratio Tren
Slide 17: Appendix
APPENDIX 17Pathward Financial, Inc. (Nasdaq: CASH) | Quarterly Investor Presentation
Slide 18: Non-GAAP Reconciliation: Adjusted Net Income and Adjusted EPS
NON-GAAP RECONCILIATION 18Pathward Financial, Inc. (Nasdaq: CASH) | Quarterly Investor Presentation Adjusted Net Income and Adjusted Earnings Per Share For the quarter ended For the nine months ended ($ in thousands, except per share data) 3Q21 2Q22 3Q22 3Q21 3Q22 Net income - GAAP 38,701 49,251 22,
Slide 19: Non-GAAP Reconciliation: Adjusted Net Charge-Offs
1 Tax Services NCOs and average loans are excluded to adjust for the cyclicality of activity related to the overall economics of the Company's tax services business line. 19 For the quarter ended ($ in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Net Charge-offs 12,333
Slide 20: Financial Measure Reconciliations
FINANCIAL MEASURE RECONCILIATIONS 20Pathward Financial, Inc. (Nasdaq: CASH) | Quarterly Investor Presentation For the last twelve months ended ($ in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Noninterest Expense - GAAP 330,352 343,683 353,544 360,733 375,860 Net Inte