Pathward Financial, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Metta Financial Group Investor Conference call for the second fiscal quarter of 2022. During the presentation, all participants will be in a listen-only mode. Following the prepared remarks, we will conduct a question and answer session. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Justin Schimpf, Vice President of Investor Relations and Financial Reporting. Please go ahead.

Thank you, and welcome to the Meta Financial Group second fiscal quarter of 2022 conference call and webcast. Our CEO, Brett Farr, President Anthony Charette, and CFO Glenn Herrick will discuss our operating and financial results, after which we will take your questions. Additional information, including the earnings release and investor presentation, may be found on our website at metafinancialgroup.com. As a reminder, our comments may include forward-looking statements. Those statements are subject to risks and uncertainties that could cause actual and anticipated results to differ. The company undertakes no obligation to update any forward-looking statement. Please refer to the cautionary language in the earnings release, investor presentation, and embedded filings with the Securities and Exchange Commission, including our most recent filings for additional information covering factors that could cause actual results to differ materially from the forward-looking statements. Additionally, Today, we may be discussing certain non-GAAP financial measures on this conference call. References to non-GAAP measures are only provided to assist you in understanding META's results and performance trends. Reconciliations for such non-GAAP measures are included within the appendix of the investor presentation. Now, let me turn the call over to Brett Farr, our CEO.

Thank you, everyone, for joining META Financial Group's second fiscal quarter 2022 earnings call. I want to begin by referencing the exciting news of our new name, PathWord Financial, which we announced last month. PathWord is born out of our company's purpose to power financial inclusion for all and our commitment to providing a path forward to people and businesses so they can reach the next stage of their financial journey. The name reflects our dedication to removing barriers that prevent millions of Americans from achieving access to the financial system and will serve as a constant reminder of our mission to create a path forward for the unbanked, underbanked, and underserved to help them achieve economic mobility. We will make some changes immediately to integrate the PathWord name and work with our partners in the coming months to ensure a successful transition for each of them. We will complete the transition to PathWord by calendar year end, including the launch of a new brand identity and website. Until then, we will continue to serve our customers under existing brand names. During the second quarter, we recognized $2.8 million of pre-tax expenses related to these rebranding efforts, and we continue to estimate our total rebranding expenses will range between $15 to $20 million. Turning now to our financial results for the second quarter, net income was $49.3 million, down $9.8 million compared to $59.1 million in the prior year. Earnings per share for the quarter was $1.66 as compared to $1.84 in the prior year. Our income taxes and tax rate were up significantly compared to last year as uncertainty around government infrastructure funding and supply chain constraints delayed the development of renewable energy projects in our pipeline. While this is beginning to return to normal, our fiscal 2022 tax rate will be higher than expected. In addition, the 2022 tax season yielded mixed results. Year over year, total tax product revenue was up slightly, while total tax services product expense was approximately flat. However, we believe child tax credits and excess liquidity from various stimulus programs reduced our expected year over year increase for our taxpayer advanced product. Otherwise, the balance of our business has posted good results. Our commercial finance portfolio sold continued healthy loan growth from satisfying the robust demand of small and medium sized businesses for credit. We believe our collateralized commercial finance portfolios are especially well positioned for any potential down economic cycles as they have demonstrated during prior cycles. Our core banking as a service business continues to grow. with increased activity from both new and existing partners, and our pipeline of opportunities remains strong. Looking ahead, we are optimistic about the prospects of a rising rate environment. Our low cost of funds deposit base, combined with the mix of our earning assets, position Meta for meaningful interest income growth under a rising rate scenario. Now, let me turn the call over to our president, Anthony Charette, to provide updates on our lines of business.