Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Q1 FY2016 Earnings Presentation
24 slides from Pathward Financial's earnings presentation, Jan 28, 2016
Slide 1: Investor Update First Quarter Fiscal Year 2016
Investor Update First Quarter Fiscal Year 2016
Slide 2: Meta Management
Meta Management Chairman and Chief Executive Officer, Meta Financial GroupTyler Haahr has been with Meta Financial Group since 1997. Previously, he was a partner with the law firm of Lewis and Roca LLP, Phoenix, Arizona. Tyler received his B.S. degree with honors at the University of South Dakota in
Slide 3: Meta Financial Group Highlights
Meta Financial Group Highlights Net Income (1QFY16 vs 1QFY15)GAAP year over year growth of 13%Core year over year growth of 26%1Earnings ProfileSizable and growing non-interest income Opportunity for NIM expansion in current and higher rate environmentRevenue from business development & new agreemen
Slide 4: Who We Are
Who We Are PaymentsA top prepaid card issuerRobust deposit growthGrowing “annuity” stream and fee incomeNew partners being added & existing partners expandingNew product introductions have begun with more expected in 2016 Refund Advantage acquisition completed in September 2015 BankingGrowing commun
Slide 5: Meta Payment Systems
Meta Payment Systems Prepaid card industry leader with payments diversificationDeposit Growth ~25% (qtr. avg.) over prior yearFee income up 17% YoYContinuing to grow “annuity” streamAdjacent and complementary new product introductionRefund Advantage – Tax channelAdditional MPS distributionFasterMone
Slide 6: Retail Bank
Retail Bank Regional Community Bank60+ years in business 10 locations in IA and SD Growing, profitable operationsAttractive combination of commercial, agricultural, retail and national insurance premium lendingLow-cost deposit base gives Bank competitive advantage on terms to attract high-quality cr
Slide 7: AFS/IBEX – Premium Finance
AFS/IBEX – Premium Finance Loans to commercial businesses fund their property, casualty, and liability insurance premiums. Short duration assets; typically 9-10 month termsHigher yields than alternative investments, particularly for the termLoans generally priced as a spread to Prime, reset higher a
Slide 8: Industry Recognition
Industry Recognition #44 in American Banker Magazine “More double-digit goodness” (June 2015) based on avg. ROE over the past 3 years#48 in American Banker Magazine “Top 200 Community Banks and Thrifts” (June 2015) Top 1% based on 3 year ROETop 100 in ABA Banking Journal’s annual Performance Ranking
Slide 9: Growth Drivers
Growth Drivers Optimize synergies: Bank and PaymentsStrong loan growth in local markets, AFS/IBEX and MPSContinue to improve upon earning asset mixLow-cost deposits with long average life (almost 7 years) feed increasingly diverse asset mixUnlock value of non-interest bearing deposit baseRising rate
Slide 10: Oversight and Infrastructure
Oversight and Infrastructure Early adopter of sophisticated compliance systemsOCC consent order removed in August 2014Federal Reserve Bank consent order removed in May 2015Investments in MPS program design, training and technologyImplemented enhanced BSA/AML technologyEnhanced infrastructure support
Slide 11: Interest Rate Risk Management
Interest Rate Risk Management Positively leveraged for higher rate environmentOCI volatile relative to peersWe believe GAAP understates balance sheet true value, particularly low-cost depositsMeta MTM of ~50% of assets available for sale (securities) vs. typical “peer” at ~15-20%Significant increase
Slide 12: IRR Sensitivity – What We Believe
IRR Sensitivity – What We Believe Static interest rate risk (IRR) results do not accurately reflect Meta’s true interest rate sensitivity due to our unique, predictable deposit baseDue to historically predictable weekly, monthly, and yearly deposit volatility, static IRR results can be significantly
Slide 13: Capital Management
Capital Management Capital enhancementsRecent $26 million and $12 million private placements supporting Refund Advantage acquisition and other growth2014-15 ATM net proceeds of $25.4 million to support growth$61.0 million in 2012-13 via private placements and ATM offeringStrong institutional investo
Slide 14: Earnings Power While Growing Equity
Earnings Power While Growing Equity *
Slide 15: Income Statement
Income Statement Meta Financial Group ($MM) FY11 FY12¹ FY132 FY14 FY153 1Q15⁴ 1Q16⁵ % Change Net Interest Income 34.3 33.7 36.0 46.3 59.2 13.6 17.6 24.0% Non-Interest Income 57.5 69.6 55.5 51.7 58.2 12.7 16.8 32.8% Total Revenue 91.8 103.3 91.5 98.0 117.4 26.2 34.4 28.2% Provision for Loan Loss 0.3
Slide 16: Balance Sheet
Balance Sheet Meta Financial Group*($MM) 4Q11 4Q12 4Q13 4Q14 4Q15 1Q15 1Q16 % Change Cash And Cash Equivalents 132 106 74 100 81 90 47 -47.2% Investments and MBS 615 999 1,177 1,320 1,534 1,394 1,725 23.8% Loans Receivable Net 315 330 364 485 684 528 728 37.9% Other Assets 65 61 99 97 148 103 186 81
Slide 17: Assets
Assets * Total Assets *Fiscal Quarter Average Total Investments 22.7% CAGR
Slide 18: Total Gross Loans and Loan Composition
Total Gross Loans *Fiscal Quarter Average * Loan Composition1QFY16 Avg. Loan Portfolio ($MM)*
Slide 19: Non-Performing Assets
Non-Performing Assets Non-Performing Assets ($MM) % of Total Assets *
Slide 20: Earning Asset Mix
Earning Asset Mix * NIM Expanded 50bps *Fiscal Quarter Average
Slide 21: Deposits and Cost of Funds
Deposits and Cost of Funds Deposits ($MM)* Cost of Funds * *Fiscal Quarter Average
Slide 22: Meta's Value Proposition
Meta’s Value Proposition A leading issuer of prepaid debit cardsSpringboard into other products and services.Significant growth; current partners expanding, new partners added, and new products implemented with more expected to come in 2016.Strong capital positionEarnings and historical access to ca
Slide 23: Forward Looking Statement
Forward Looking Statement Meta Financial Group, Inc.®, (“the Company”) and its wholly-owned subsidiary, MetaBank® (the “Bank” or “MetaBank”), may from time to time make written or oral “forward-looking statements,” including statements contained in this investor update, the Company’s filings with th
Slide 24: Financial Group’
Financial Group’ NASDAQ: CASH
Meta Financial Group — Q1 FY2016 Earnings Presentation on 6ix