Pathward Financial, Inc.

Ladies and gentlemen, thank you for standing by and welcome to Pathwork Financial's fourth quarter and fiscal year 2024 investor conference call. 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 Darby Schoenfeld, Senior Vice President, Chief of Staff and Investor Relations. Please go ahead, Darby.

Thank you, Operator, and welcome. With me today are Password Financial CEO Brett Farr and CFO Greg Sigrist, who will discuss our operating and financial results for the fourth quarter and full fiscal year of 2024, after which we will take your questions. Additional information, including the earnings release, the investor presentation that accompanies our prepared remarks, and supplemental slides, 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 statements. Please refer to the cautionary language in the earnings release, investor's presentation, and in the company's filing with the Securities and Exchange Commission, including our most recent filings for additional information covering factors that could cause actual and anticipated results to differ materially from the forward-looking statement. Additionally, today we will 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, particularly in competitive analysis. Reconciliations for such non-GAAP measures are included in the earnings release and the appendix of the investor presentation. Finally, all time periods referenced are fiscal quarters and fiscal years, and all comparisons are to the prior year period, unless otherwise noted. Now, let me turn the call over to Brett Farr, our CEO.

Thanks Darby, and welcome everyone to our earnings conference call. 2024 was a great year for Pathword. We welcome Greg to the company. Recertified is a great place to work. Remain committed to our remote first approach. Announce new partnerships and extended others. celebrated employees who won multiple awards, and most recently announced that our newly rebranded partner solutions team won Finnovate's Best Banking as a Service Provider. In addition, we continue to deliver on our purpose as we help consumers and small to medium-sized businesses with access to the financial markets. These successes translated into solid financial results as well. We reported earnings per diluted share of $6.62 for the fiscal year, which was just above the high end of the guidance range we provided last quarter, and represents year-over-year growth of 11%. Net income for the year was $168.4 million. Our results were driven in part by an increase in net interest income of 17% when compared to last year. We also expanded our full-year net interest margin and adjusted net interest margin, which includes contractual rate-related processing expense, to 6.41% and 4.85%, respectively. Performance metrics remain strong, with return on average assets for the year of 2.2% and return on average tangible equity of 41.7%. We continue to focus on optimizing the asset mix on the balance sheet, With an asset limit of $10 billion in order to remain below the Durbin Amendment exemption, we want to ensure that the assets we are holding are giving us the opportunity to maximize our ROA. We've seen the results of these efforts as our loan and lease portfolio yield moved from 8.33% for the fourth quarter of 2023 to 8.67% for the fourth quarter of this year. As part of the strategy, during the fourth quarter, We announced the sale of our commercial insurance premium finance business, and we now expect this transaction to close by October 31, allowing additional time for operational readiness. While we do expect this to be accretive to fiscal 2025 as we redeploy the released capital and deposits into other commercial finance loans and leases with higher risk adjusted returns resulting in better ROAs, The guidance we are given today will not include the impact of the transaction. Greg will go into more detail shortly. We've also made significant inroads in the SBA market, moving up almost 80 places to the 39th largest SBA 7A program lender in the country for the year ending September 30th, 2024. We continue to see strong pipelines, particularly in SBA, USDA, and working capital. Our consumer lending pipeline has also grown as we continue to focus on partners who align with our risk and compliance philosophy and purpose of powering financial inclusion. In September, we celebrated our 20th anniversary in the payments industry and announced the renaming of our banking as a service business to Partner Solutions. We think it's an important distinction to reflect our business model. which is founded on our commitment to helping our partners grow their business, innovate solutions, and create new products and services. The new name includes a refreshed emphasis on our core value propositions defined by time-tested industry experience, operational excellence that streamlines the making processes, and a mature risk and compliance infrastructure that promotes program sustainability. These elements are critical to enabling our partners' success in today's rapidly evolving marketplace. Ultimately, partnership is the heart of what we do. We believe our two decades of experience in this space positions us as a forward-thinking bank with the scale and capability to help our partners expand across multiple solutions, providing them with a one-stop shop for their banking needs. We build strong relationships and are deeply invested in seeing our partners succeed. We also believe that we have the right people and the right tools to support our partners and their programs, delivering financial solutions today to a wide range of tomorrow's customers. This success means that we are living up to our purpose of delivering financial inclusion for all. It's this commitment that helped us earn the 2024 Finnovate Award for Best Banking as a Service Provider, which recognizes a financial institution that excels in making banking and financial services available to non-financial institutions. As we mentioned before, our position in the industry has created a strong pipeline for us, and we are starting to see results. During the fourth quarter, we extended a contract with one of our current partners, and I am pleased to announce that after the quarter closed, we extended our contract with H&R Block to June of 2027 and are proud to be the partner enabling their efforts to provide their customers with banking products that take their financial experience beyond the annual tax return. We signed a DDA sponsorship agreement with RAINN. The card will serve as a disbursement card option for earned wage access programs administered by RAINN. We signed an additional extension with an existing partner. And we launched a new secured credit product with our existing partner, Oro. By launching a new product that allows expanded utility, PathWord is demonstrating our commitment to financial inclusion and meeting additional needs for our partner and its customers. As you can see, we are providing a series of embedded finance solutions to our partners where we bundle together a number of products that help them meet their customers' needs. As I mentioned, this is an example of how we can be the one-stop shop for our partners. Last quarter, we introduced our strategy to be the trusted platform that enables our partners to thrive. And I want to take a moment to delve a little deeper into that. First, we talked a lot about the right size balance sheet with an optimized asset mix. Looking ahead, we intend to continue to favor asset rotation to areas where we believe we have a competitive advantage to deliver a higher return on assets. This includes not only higher risk adjusted return categories, but also assets that provide us with optionality. For example, SBA and USDA loans have active secondary markets. And we can benefit from underwriting and eventually selling the guaranteed portion of these. This allows us to recognize additional fee income, which can boost our ROA and give us the ability to then reinvest those funds into additional loans without growing the balance sheet. Second, we are constantly working to deliver scalable solutions to our partners faster. We continue to invest in technology that will allow us to quickly adapt to the needs of our partners, ultimately enabling their programs to thrive, and we are always investing in our people and talent specifically aligned to that technology. For example, we continue investing in modern infrastructure with heavy emphasis on our data and other transactional platforms, helping support partner integration, automation, and scaling of our business and improving partner experiences. We also continue to invest in our data platforms to leverage our data assets and further bolster our risk and compliance posture. And we continue to evolve through adoption of technology operating models and norms that help us build operating discipline and a culture that ensures a successful return on our investments. Third, we are incredibly proud of our people and culture here at Pathwork. In fiscal 2024, we had several employees who were recognized by external parties including Nicole Price as one of the most influential women in payments by American Banker, Shannon Stetson, named to SFNet's 40 Under 40 list, and Brittany Kelly, named to American Banker's list for most influential women in payments next. Finally, our experience in the industry has allowed us to build our risk and compliance framework into what we believe is a competitive advantage. In fact, the recently announced extension of our partnership with Money Lion through 2029 was driven in part by their acknowledgement of our mature compliance culture and deep knowledge of the regulatory landscape. We've done a lot of work in fiscal 2024 to execute our strategy, and we believe this has laid the groundwork for a successful future. As a result, we are increasing our fiscal 2025 guidance for earnings per diluted share to $7.10 to $7.60, which does not include the impact of the sale of our commercial insurance premium finance business. Now I'd like to turn it over to Greg, who will take you through the financials and guidance in more detail. Thank you, Brett.