Pathward Financial, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Pathwork Financial Investor Conference Call for the third 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 call over to Justin Schimpf, Vice President of Investor Relations and Financial Reporting. Please go ahead.

Thank you, and welcome to Password Financial's third fiscal quarter of 2022 conference call and webcast. On July 13th, the company legally changed its name to Password Financial, and we will refer to ourselves as such throughout today's call. 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 passwordfinancial.com. As a reminder, our comments may include forward-looking statements, including with respect to anticipated results for future periods. 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 in the company's filings with the Securities and Exchange Commission including our most recent pilings, 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 the company's results and performance trends. Reconciliations for such non-GAAP measures are included within the appendix of the investor presentation. Let me turn the call over to Brett Farr, our CEO.

Thank you, everyone, for joining Pathwork Financial's third fiscal quarter 2022 earnings call. I am pleased to host this call today, our first, using our company's new corporate name, which reflects our continued commitment to providing a path forward to people and businesses so they can reach the next stage of their financial journey. As Justin mentioned, Our company legally changed its name to Pathwork earlier this month. While our corporate name has changed, the full transition to our new brand, including the launch of our new brand identity and website, is still underway, and we will complete it by calendar year end. Turning to our financial results, net income was $22.4 million, down $16.3 million compared to $38.7 million in the same prior year period. Earnings per share for the quarter was 76 cents as compared to $1.21 in the prior year. As previously disclosed, our earnings this year have been impacted by a slowdown in the renewable energy tax credit lending market, lower tax advance demand than we assumed, and certain one-time branding and separation agreement expenses. We continue to benefit from our business model of using low-cost deposits from our banking as a service business, lending them to a variety of commercial finance asset classes, allowing substantial return of capital to our shareholders. This model will generate higher returns once the market lending rates begin to reflect the higher rate environment. We anticipate that our net interest margin will continue to expand as a result of our ongoing mix shift into higher interest earning assets, coupled with higher overall rates on new business originations and increases to the variable loan portion of our existing portfolio. Our confidence in steadily growing earnings per share has never been higher. Like others in our industry, we are facing a challenging macroeconomic and geopolitical landscape. Third quarter expenses were higher compared to the previous year as we incurred higher employee compensation costs as well as higher technology-related spending to enhance our capabilities to get ahead of market expectations and respond to industry-wide inflationary pressures. In response to these headlines, we will concentrate our efforts to drive productivity and enhance efficiency. Our income tax rate was up compared to the second quarter due to delays in the development of renewable energy projects in our pipeline. As we've noted in the past, our income tax fluctuates primarily due to these projects. The solar construction market has been largely impacted by supply chain constraints, leading to volumes well below our expectations, and as a result, we anticipate our tax rate to be higher than previously expected in the short term. To address credit in the current environment, we are pleased that our growing commercial finance portfolio remains healthy, as reflected in our reduced allowance reserve rates. We continue to be confident in the ability of this well-diversified portfolio to perform even during a difficult economic environment, as it has done historically. Our team has deep experience in hands-on collateral management, which has helped mitigate losses during previous cyclical downturns. Because of this hands-on collateral management, our ability to manage losses in the downturn far exceeds traditional C&I lending. Given the dynamic economic environment, we believe it will be helpful to provide guidance for the current and next fiscal year. We expect fiscal year 2023 GAAP earnings per share to be in the range of $5.25 to $5.75. When adjusting for certain non-recurring items, net of tax, we expect an adjusted earnings per share to be in the range of $5.10 to $5.60. At this point, we will only be providing guidance for EPS and will not be addressing specifics on various income statement items. Glenn will discuss our broad assumptions in more detail later. Now, let me turn the call over to our president, Anthony Charette, to provide updates on our lines of business.