Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Investor Presentation (September 2023)
23 slides from Pathward Financial's investor presentation, Sep 6, 2023
Slide 1: Investor Presentation Updated September 6, 2023
Investor Presentation UPDATED SEPTEMBER 6 , 2023
Slide 2: Forward Looking Statements
Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation2 FORWARD LOOKING STATEMENTS This investor update contains “forward-looking statements” which are made in good faith by Pathward Financial, Inc. (the “Company”) pursuant to the “safe harbor” provisions of the Private Securities Liti
Slide 3: Leading the way to financial access is the heart of our business
Since our founding, we have worked to advance financial inclusion. We seek out diverse partners, including fintechs, affinity groups, government agencies, and other banks and work with them to identify markets where people and businesses are underserved. Our national bank charter, coordination with
Slide 4: Building a Diversified Franchise Dedicated to Financial Empowerment
Building a Diversified Franchise Dedicated to Financial Empowerment for Individuals and Businesses 4 1993 Listed on Nasdaq: CASH 2015 / 2016 Entered Tax Services business by acquiring Refund Advantage, SCS, and EPS 2020 Completed sale of Retail Bank division to focus on national banking operations a
Slide 5: Resilient Business Model in Economic Cycles
Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation5 Resilient Business Model in Economic Cycles Stable funding via BaaS partner relationships Funding Earns consistent fees from the BaaS business Operates a collateralized lending platform that outperforms in down-cycles Income
Slide 6: Collaborate With Partners to Provide Innovative BaaS Solutions
Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation6 Collaborate With Partners to Provide Innovative Banking as a Service (BaaS) Solutions Payment Solutions Issuing Solutions Credit Solutions Tax Solutions Accepting and processing payments through highspeed banking rails A leading d
Slide 7: Commercial Finance Helps Businesses Access Needed Funds
Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation7 Commercial Finance Helps Businesses Access Needed Funds Through Various Solutions Working Capital Finance Equipment Finance Structured Finance Insurance Premium Finance Ready cash for liquidity needs to new or growing companies in
Slide 8: Strong and Diverse Leadership Team and Board of Directors
Strong and Diverse Leadership Team and Board of Directors 8 Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation Executive Leadership Team Board of Directors Brett Pharr Chief Executive Officer and Director Anthony Sharett President Glen Herrick EVP, Chief Financial Officer Charles I
Slide 9: Investment Highlights
2 3 4 1 Record of strong earnings growth and profitability above banking industry averages Resilient Commercial Finance loan portfolio produces attractive returns throughout economic cycles Experienced leader in fast-growing Banking as a Service (BaaS) sector, with diversified portfolio of high-qual
Slide 10: Record of Strong Earnings Growth
Record of Strong Earnings Growth Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation10 1 2 3 4 5 Earnings Per Common Share $5.26 $1.61 $1.67 $2.49 $2.94 $4.38 $4.49 FY '17 FY '18 FY '19 FY '20 FY '21 FY '22 Earnings inclusive of extraordinary items Net Income $156.4 $44.9 $51.6 $97.
Slide 11: Profitability Above Banking Industry Averages
Profitability Above Banking Industry Averages Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation11 1 2 3 4 5 • Peer data includes commercial insured banks with assets between $3-10 billion. Return on average assets and net interest margin information gathered from the Federal Finan
Slide 12: Strong Earnings Growth and Right-Sized Balance Sheet Enable Return of Capital
Track Record of Strong Earnings Growth and Right-Sized Balance Sheet Enables Ongoing Return of Capital Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation12 1 2 3 4 5 $523.9M TOTAL SHARE REPURCHASES 2Q19 TO 3Q23 $29.4M TOTAL DIVIDENDS PAID 2Q19 TO 3Q23 Paid dividend every quarter da
Slide 13: Leader in Fast-Growing BaaS Sector
Leader in Fast-Growing BaaS Sector Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation13 1 2 3 4 5 ~$2.5 Billion Moved daily in ACH and wire services >$10 Billion Moved since start of MasterCard Send and Visa Direct programs in 2020 >260,000 ATMs Sponsored >$11 Billion Tax refunds p
Slide 14: Serves as a Hub of the BaaS Ecosystem
Pathward Serves as a Hub of the BaaS Ecosystem Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation14 1 2 3 4 5 Fed / Settlement ATM Sponsorship 85+ ISOs Processor Acquiring 10+ Processor Issuing 20+ FinTech / Program Manager Partners 50+ Community Banks 1,200+ Debit/Credit Networks
Slide 15: Resilient Commercial Loan Portfolio
Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation15 Resilient Commercial Loan Portfolio… WORKING CAPITAL FINANCE • Provides working capital for new or growing companies to meet short-term operational requirements • Primarily variable rate loans with majority of floors at or above
Slide 16: Produces Stable Annual Net Charge-Off Rates
…Produces Stable Annual Net Charge-Off Rates Pathward Financial, Inc. (Nasdaq: CASH) | Quarterly Investor Presentation16 Pathward Acquires Crestmark December 31st Commercial Finance Loan Balances ($ in millions) $117 $115 $121 $149 $157 $224 $326 $350 $428 $521 $582 $702 $934 $1,618 $1,995 $2,423 $2
Slide 17: Well-Developed Risk Mitigation and Compliance Capabilities
Well-Developed Risk Mitigation and Compliance Capabilities Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation17 1 2 3 4 5 Enterprise Risk Management Our Enterprise Risk Management (ERM) program applies corporate governance to risk-taking activities. The ERM program sets strategy ac
Slide 18: Appendix
Appendix
Slide 19: Adjusted Net Income and Adjusted Earnings Per Share
Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation19 Adjusted Net Income and Adjusted Earnings Per Share Fiscal Year ($ in thousands, except per share data) 2022 Net income - GAAP 156,386 Less: Gain on sale of trademarks 50,000 Add: Rebranding Expenses 13,148 Add: Separation relate
Slide 20: Pathward's Balance Sheet
Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation20 Pathward’s Balance Sheet BaaS deposits fund Pathward’s earning asset portfolio while delivering ample fee income Pathward’s commitment to maintain the size of its balance sheet enables the return of capital to shareholders Assets
Slide 21: Credit Controls Limit the Risk in Consumer and Warehouse Programs
Pathward Financial, Inc. (Nasdaq: CASH) | 2023 Investor Presentation21 Credit Controls Limit the Risk in Consumer and Warehouse Programs All Loan/Collateral Cash Flows Admin Fees (0-5%) Junior Tranche $40MM (40%) Equity Tranche $10MM (10%) First-Out Tranche (Pathward Position) $50MM (50%) $100M Faci
Slide 22: Industry Terms
Industry Terms 22 Types of Payment Cards Banking-as-a-Service (BaaS): Providing financial services and solutions to third parties to offer through their distribution channels. Push-to-debit: The ability to move money directly to an end user. At Pathward, our push-to-debit capabilities are called “Fa
Slide 23: Asset-Based Lending and Financing Terms
23 Asset-Based Lending: Asset-Based Lending (ABL) refers to business loans that are secured based on assets as collateral, generally accounts receivable, inventory, equipment or other balance sheet assets. Accounts Receivable: Accounts Receivable (A/R) financing refers to financing based on the valu
Pathward Financial — Investor Presentation (September 2023) on 6ix