Pathward Financial, Inc. · NASDAQ:CASH
Pathward Financial — Meta Financial Group — Q3 FY2017 Earnings Presentation
19 slides from Pathward Financial's earnings presentation, July 2017
Slide 1: Investor Update Third Quarter Fiscal Year 2017
Investor Update Third Quarter Fiscal Year 2017 Third Quarter 2017 | NASDAQ: CASH
Slide 2: Forward Looking Statements
Forward Looking Statements Meta Financial Group, Inc.® (the “Company”) and its wholly-owned subsidiary, MetaBank® (the “Bank”), may from time to time make written or oral “forward-looking statements,” including statements contained in this investor update, the Company’s filings with the Securities a
Slide 3: Company Overview
Company Overview Prepaid low-cost deposit base provides Prepaid division generates fee income with competitive advantage to obtain high-quality low-cost, long duration deposit base credits and attractive terms for the Retail Bank and Specialty Finance divisions LEVERAGE DEPOSITS BROUGHT IN FROM OUR
Slide 4: The Meta Ecosystem
The Meta Ecosystem Banking Payments Retail Banking Prepaid/ATM/Other Regional community bank with 10 branch locations A prepaid card industry leader with payments in Iowa and South Dakota diversification Growing, profitable operations Continuing to grow “annuity-like” stream of fee • Loan growth of
Slide 5: Financial Highlights
Financial Highlights Third Quarter Ended June 30, 2017 Quarterly net income of $9.8 MM1 Fiscal year-to-date (FYTD) net income of $43.2 MM Earnings Quarterly and FYTD diluted earnings per share of $1.04 and $4.66 , respectively FYTD Return on Average Assets of 1.45% and Return on Average Equity of 14
Slide 6: Tax Season Review
Tax Season Review Tax product revenue was $5.7 MM in Q3FY17, an increase of 65% compared to Q3FY16 • Increase driven by growth in RT fee income primarily related to the acquisition of EPS Financial (EPS) • As expected, loss rates came in below prior year, primarily due to the Specialty Consumer Serv
Slide 7: Net Interest Margin ($MM)
Net Interest Margin ($MM) Net Interest Income and NIM Third Quarter Highlights $24.94 Net interest income increased 25%, while NIM $23.97 normalized post tax season • Issuance of subordinated debt in Q4FY16 (13 bps) • As expected, fiscal third quarter NIM normalized at higher levels, over prior quar
Slide 8: Net Interest Drivers ($MM)
Net Interest Drivers ($MM) Fiscal Quarter Average Total Investments and Yield Total Loans and Yield $2,358 $2,383 4.73% 4.52% 4.41% 4.56% 4.37% 3.98% 4.69% $2,039 $2,067 $1,204 $2,004 $1,302 3.24% $1,195 2.95% $1,137 2.93% 2.92% $970 3.20% $906 $826 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q3-16 Q4-16 Q1-17 Q2
Slide 9: Earning Asset Mix ($MM)
Earning Asset Mix ($MM) Interest Earning Assets Q3-16 $2,852 Fiscal Quarter Average Q4-16 $3,000 Q1-17 $3,223 Q2-17 $3,962 Q3-17 $3,628 Tax-Exempt Investment Securities Mortgage-Backed Securities Loans Cash and Other Securities Continue to improve earning asset mix • Asset diversification with highe
Slide 10: Loan Portfolio ($MM)
Loan Portfolio ($MM) Third Quarter Highlights Loan Receivable Composition Total loans receivable increased 42%, YoY $1,226 • Driven by increases in Consumer, Commercial Real Estate, $1,152 $1,115 Premium Finance, and Residential Mortgage loans • Consumer loan growth driven by purchase of student loa
Slide 11: Loan Portfolio/Credit Quality
Loan Portfolio/Credit Quality Third Quarter Highlights Allowance for loan losses (ALL) was $15.0MM, or 1.2% of total loans at June 30, 2017 • Currently over 94% reserved for the tax advance loans and expect them all to be collected or written-off by September 30, 2017 • Normalized ALL (excl. tax adv
Slide 12: Balance Sheet Overview ($MM)
Balance Sheet Overview ($MM) Total Liabilities Q3-16 $2,749 Total Assets Fiscal Quarter Average Q4-16 $2,900 $4,414 Q1-17 $3,139 $4,000 Q2-17 $4,022 $3,491 Q3-17 $3,575 $3,235 $3,068 Non-interest bearing deposits Interest bearing deposits Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Wholesale deposits Borrowings F
Slide 13: Regulatory Capital
Regulatory Capital Regulatory Capital Ratios¹ 19.08% 19.34% 18.56% 18.56% 14.54% 14.03% Minimum Requirement to 9.44% be Well-Capitalized under Prompt Corrective Action 7.39% (PCA) Provisions Tier 1 Leverage Common Equity Tier 1 Tier 1 Risk-Based Total Risk-Based 1Regulatory ratios are estimated Peri
Slide 14: Competitive Landscape
Competitive Landscape Early adopter of sophisticated compliance systems Investments in program design, training and technology • Implemented enhanced BSA/AML technology • Enhanced infrastructure supports growth • These prior investments allow more focus on growing current business and new developmen
Slide 15: Interest Rate Risk Management
Interest Rate Risk Management Interest rate sensitivity (what management believes) Static interest rate risk results do not accurately reflect the Company's true interest rate sensitivity due to our unique and historically predictable deposit base • Utilizing quarterly average balances for deposits,
Slide 16: Industry Recognition
Industry Recognition MetaBank named one of “7 To Watch in ‘17” #1 Top Growth Bank (May 2016) Named Top Community Bank (August 2016) Top 40 of ACH originators in 2016 (April 2017) Top 30 of ACH receivers in 2016 (April 2017) Second largest prepaid card issuer in the U.S. ranked by purchase volume in
Slide 17: Appendix
Appendix 17 Third Quarter 2017 | NASDAQ: CASH
Slide 18: Income Statement
Income Statement Percent Three Months Ended Change Q3 Q4 Q1 Q2 Q3 Q3-17 vs. (dollars in thousands) June 2016 Sept. 2016 Dec. 2016 March 2017 June 2017 Q3-16 Net Interest Income 19,919 19,893 19,833 23,966 24,943 25 % Card Fee Income 18,779 17,920 18,414 26,547 23,052 23 % RT Product Fee Income 3,424
Slide 19: Average Balance Sheet
Average Balance Sheet Percent Fiscal Quarter Average Change Q3 Q4 Q1 Q2 Q3 Q3-17 vs. (dollars in thousands) June 2016 Sept. 2016 Dec. 2016 March 2017 June 2017 Q3-16 Cash and cash equivalents 23,154 50,976 195,004 404,688 50,235 117 % Investment securities 1,290,043 1,374,288 1,394,596 1,593,130 1,6
Meta Financial Group — Q3 FY2017 Earnings Presentation on 6ix