Pathward Financial Inc (CASH) 2023 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to Pathward Financial's Second Quarter Fiscal Year 2023 Investor Conference Call.

女士們，先生們，感謝你們的支持，歡迎來到 Pathward Financial 2023 財年第二季度投資者電話會議。

(Operator Instructions)

（操作員說明）

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, Head of Investor Relations. Please go ahead.

提醒一下，正在錄製此電話會議。我現在想將電話會議轉交給高級副總裁兼投資者關係主管 Darby Schoenfeld。請繼續。

Thank you, operator, and welcome. With me today are Pathward Financial's CEO, Brett Pharr; and CFO, Glen Herrick, who will discuss our operating and financial results for the second fiscal quarter of 2023, after which we will take your questions. Additional information include earnings release, the investor presentation that accompanies our prepared remarks and supplemental slides may be found on our website at pathwardfinancial.com.

謝謝你，運營商，歡迎。今天和我在一起的是 Pathward Financial 的首席執行官 Brett Pharr；首席財務官 Glen Herrick 將討論我們 2023 年第二財季的運營和財務業績，之後我們將回答您的問題。其他信息包括收益發布、伴隨我們準備好的評論的投資者介紹和補充幻燈片，可在我們的網站 pathwardfinancial.com 上找到。

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 presentation and in the company's 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.

提醒一下，我們的評論可能包括前瞻性陳述，包括關於未來時期預期結果的陳述。這些陳述受風險和不確定性的影響，可能導致實際結果和預期結果不同。公司不承擔更新任何前瞻性陳述的義務。請參閱收益發布、投資者介紹和公司提交給美國證券交易委員會的文件中的警示性語言，包括我們最近提交的文件，以獲取更多信息，這些信息涵蓋可能導致實際結果與前瞻性陳述存在重大差異的因素。

Additionally, today, we will be discussing certain non-GAAP financial measures on this 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 in the appendix of the investor presentation.

此外，今天，我們將在此次電話會議上討論某些非 GAAP 財務指標。對非 GAAP 措施的參考僅用於幫助您了解公司的業績和業績趨勢。此類非 GAAP 措施的對賬包含在投資者介紹的附錄中。

Now let me turn the call over to Brett Pharr, our CEO.

現在讓我把電話轉給我們的首席執行官 Brett Pharr。

Thanks, everyone, for joining us today. We're very happy to welcome Darby to Pathward. Please reach out to her to say hello, introduce yourself and let her know what you might need. We thought this was a good opportunity and time to offer all of you a bit more context and detail than we have in the past about Pathward. We've taken advantage of the recent attention focused on our industry to assess our strengths, focus on the potential for new opportunities and more about these in a few minutes and better communicate to you and others why Pathward is uniquely positioned for strong and stable future.

謝謝大家今天加入我們。我們很高興歡迎 Darby 加入 Pathward。請聯繫她打招呼，自我介紹並讓她知道您可能需要什麼。我們認為這是一個很好的機會和時間，可以為大家提供比過去更多關於 Pathward 的背景和細節。我們利用最近對我們行業的關注來評估我們的優勢，關注新機會的潛力，並在幾分鐘內更多地了解這些機會，並更好地向您和其他人傳達為什麼 Pathward 具有獨特的定位以實現強大而穩定的未來.

I'm going to start today with an in-depth look at how Pathward is different. Our business is unique and how we differentiate ourselves from traditional banks. And more importantly, why we think that differentiation matters and how it offers our investors and customers a better value proposition. Financial inclusion for all drives our actions and our strategy. We want to be a leader in providing access to underserved banking markets. Why? Three reasons: the underserved gap that's in the marketplace for both consumers and commercial small business customers is significant, we can help close that gap; second, we believe our approach to inclusion generates unique value for our shareholders; and three, we believe it offers valuable and meaningful career opportunities for our employees.

從今天開始，我將深入了解 Pathward 的不同之處。我們的業務是獨一無二的，我們如何從傳統銀行中脫穎而出。更重要的是，為什麼我們認為差異化很重要，以及它如何為我們的投資者和客戶提供更好的價值主張。所有人的普惠金融推動著我們的行動和戰略。我們希望成為提供進入服務不足的銀行市場的領導者。為什麼？三個原因：對於消費者和商業小企業客戶而言，市場上服務不足的差距很大，我們可以幫助縮小這一差距；其次，我們相信我們的包容性方法為我們的股東創造了獨特的價值；第三，我們相信它為我們的員工提供了寶貴而有意義的職業機會。

We continuously strive to provide financial inclusion by positioning ourselves at the hub of the financial ecosystem where financial technology and banking intersect. Sitting at this intersection give us, Pathward, and you, our investors, multiple advantages and opportunities. First off, provides us with strength, provides us with stability, and it provides us with the ability to produce stronger capital returns. It also gives us the ability to innovate and disrupt creating more opportunities for growth.

我們將自己定位於金融技術和銀行業交叉的金融生態系統的中心，不斷努力提供普惠金融。坐在這個十字路口給我們 Pathward 和你，我們的投資者，多重優勢和機會。首先，它為我們提供了力量，為我們提供了穩定性，並為我們提供了產生更高資本回報的能力。它還使我們能夠創新和顛覆，創造更多的增長機會。

I want to share a bit about our business lines. We operate primarily through 2 businesses: Banking-as-a-Service or BaaS; and two, Commercial Finance. Our BaaS business focuses on underbanked and underserved consumers. It generates sticky, low-cost deposits and recurring fee income. Our Commercial Finance business lends these stable deposits to small- and medium-sized businesses that may not have access to traditional forms of credit.

我想分享一下我們的業務線。我們主要通過 2 項業務運營：銀行即服務或 BaaS；第二，商業金融。我們的 BaaS 業務專注於銀行服務不足和服務不足的消費者。它產生粘性、低成本的存款和經常性的費用收入。我們的商業金融業務將這些穩定存款借給可能無法獲得傳統信貸形式的中小企業。

These 2 business entities form a particularly strong combination, ability to deliver a diversified revenue base that provides recurring, stable fee income and a high net interest margin. In BaaS, we operate primarily through a diverse network of partners who have proven established companies and long-standing clients of ours. We generally sign long-term agreements and excluding the economic impact program, or EIP deposits, no single partner constitutes more than 13% of our total deposits.

這兩個業務實體形成了一個特別強大的組合，能夠提供多元化的收入基礎，提供經常性、穩定的費用收入和高淨息差。在 BaaS 中，我們主要通過多元化的合作夥伴網絡運營，這些合作夥伴已經證明是成熟的公司和我們的長期客戶。我們通常簽署長期協議，不包括經濟影響計劃或 EIP 存款，沒有一個合作夥伴占我們總存款的 13% 以上。

Our BaaS business has 4 solutions: issuing, tax, payment and credit. In addition to creating a strong deposit base, these businesses have the added benefit of generating recurring noninterest or fee income. In issuing solutions, we are one of the leading debit and prepaid card issuers in the country. We are a network sponsor and settle and hold funds and programs developed jointly with our partners.

我們的 BaaS 業務有 4 個解決方案：發行、稅收、支付和信用。除了建立強大的存款基礎外，這些業務還具有產生經常性非利息或費用收入的額外好處。在發行解決方案方面，我們是國內領先的借記卡和預付卡發行商之一。我們是網絡贊助商，結算和持有與我們的合作夥伴共同開發的基金和項目。

This allows the end consumer who may not have access to traditional bank account to receive the protections and benefits of one. These partnerships, combined with our purpose, distinguish Pathward's deposits from most traditional banks. Most of our deposits are held in millions of retail card accounts with an average balance of less than $1,000. We have very few institutional accounts, and those that what we do have are typically cash collateral tied to loans within our commercial finance group. Due to these factors, our noninterest-bearing deposits on the balance sheet have a weighted average life of over 6 years based on our Decay study.

這允許可能無法訪問傳統銀行賬戶的最終消費者獲得一個的保護和利益。這些合作夥伴關係與我們的宗旨相結合，將 Pathward 的存款與大多數傳統銀行區分開來。我們的大部分存款都存放在數以百萬計的零售卡賬戶中，平均餘額不到 1,000 美元。我們的機構賬戶很少，而我們所擁有的通常是與我們商業金融集團內的貸款掛鉤的現金抵押品。由於這些因素，根據我們的衰減研究，我們資產負債表上的無息存款的加權平均壽命超過 6 年。

To contrast this with our loan portfolio's weighted average life of about 2.5 years, and our securities portfolio duration of around 5 years, and you can really see the value of our unique deposit base, particularly in today's high rate environment. Glen will give you a more detailed look at our deposits in a moment.

將此與我們貸款組合的加權平均壽命約為 2.5 年以及我們的證券組合期限約為 5 年進行對比，您可以真正看到我們獨特的存款基礎的價值，尤其是在當今的高利率環境下。格倫稍後會給您更詳細地了解我們的存款。

Our second line of business within BaaS is tax solutions, where we offer refund transfers, refund advances and preseason loan programs. Refund Transfers allow consumers to have their tax return completed with no upfront cost as any preparation fees are deducted from the refund. Additionally, Refund Transfers allow unbanked customers to take advantage of the speed and safety of direct deposit from the IRS. Refund Advances enable consumers to receive an advance based on their expected refund proceeds allowing access to funds immediately while they wait for the return to be processed by the IRS. The Preseason Loan Program allows the consumer to borrow as early as November in anticipation of the refund, which may serve a more immediate end of year cash flow need. For many of our customers, their tax refund is one of the largest financial event of the year.

我們在 BaaS 中的第二個業務是稅務解決方案，我們提供退款轉賬、退款預付款和季前貸款計劃。 Refund Transfers 允許消費者完成納稅申報，無需預付費用，因為任何準備費用都已從退款中扣除。此外，退款轉賬允許沒有銀行賬戶的客戶利用 IRS 直接存款的速度和安全性。退款預付款使消費者能夠根據他們的預期退款收益收到預付款，從而在他們等待 IRS 處理退貨時立即獲得資金。季前貸款計劃允許消費者最早在 11 月借款，以期獲得退款，這可以滿足更直接的年末現金流需求。對於我們的許多客戶來說，他們的退稅是一年中最大的金融事件之一。

Our programs assist them by providing access to funds immediately or in some cases, early, providing options for receiving their refund and helping to process the tax preparation payment. These tax surfaces are utilized by millions of consumers annually through a network of ten thousands of tax preparation offices nationwide. This year's tax season has performed above our initial expectations through the end of March, and we're pleased with the results. Glen will dive into the details in his remarks.

我們的計劃通過立即或在某些情況下提早提供資金使用權來幫助他們，提供接收退款的選項並幫助處理稅務準備付款。每年有數百萬消費者通過全國數万個稅務準備辦公室網絡使用這些稅務表面。截至 3 月底，今年的報稅季表現超出了我們最初的預期，我們對結果感到滿意。格倫將在他的講話中深入探討細節。

Remaining 2 businesses are Payment Solutions and Credit Solutions. Payment Solutions, we offer merchant acquiring and money movement, acting as a sponsor bank for our clients and moving our $2.5 billion in ACH and wire services daily. We are also sponsoring bank on approximately 270,000 or 2 of every 3 independent ATMs in the nation. In Credit Solutions, we give our partners the ability to offer lending solutions to a diverse credit pool.

其餘 2 項業務是支付解決方案和信用解決方案。支付解決方案，我們提供商戶收單和資金流動，作為我們客戶的讚助銀行，每天通過 ACH 和電匯服務轉移 25 億美元。我們還在大約 270,000 台或全國每 3 台獨立 ATM 機中的 2 台上贊助銀行。在 Credit Solutions 中，我們讓我們的合作夥伴能夠為多樣化的信用池提供貸款解決方案。

Importantly, our relationships of design with a focus on credit protection, risk mitigation as well as liquidity. We earn a reasonable risk-adjusted return protected by certain layers of credit support, and we may also choose to sell certain consumer loans to third parties. Total deposits, both on and off balance sheet decreased $534 million or 6% from the prior year quarter to $7.9 billion. The drivers of this are a continued decrease in EIP balances and the volume and timing of tax deposits at quarter end.

重要的是，我們設計的關係側重於信用保護、風險緩解以及流動性。我們在一定層次的信貸支持下獲得合理的風險調整後回報，我們也可能選擇將某些消費貸款出售給第三方。資產負債表內外的總存款比去年同期減少 5.34 億美元或 6% 至 79 億美元。其驅動因素是 EIP 餘額的持續減少以及季度末稅收存款的數量和時間。

From the end of last quarter, we saw a decrease in total deposits of $152 million or 2%, primarily due to runoff of seasonal gift card balances, partially offset by tax season deposits. Pathward continues to be in a strong liquidity position and the recent financial industry issues have actually produced some new potential for Pathward. We, the leadership, took this new focus on the banking industry as an opportunity to take a closer look at our positions and strengths and how they might offer new value and potential. Because of how our bank is positioned, our experience and our leadership in the BaaS industry, some of which I just described, several new businesses have reached out to us and new partnership opportunities have developed.

從上一季度末開始，我們發現總存款減少了 1.52 億美元或 2%，這主要是由於季節性禮品卡餘額減少，部分被稅收季節存款所抵消。 Pathward 繼續處於強勁的流動性狀況，最近的金融業問題實際上為 Pathward 帶來了一些新的潛力。我們，領導層，把這次對銀行業的新關注作為一個機會，仔細研究我們的地位和優勢，以及它們如何提供新的價值和潛力。由於我們銀行的定位、我們的經驗和我們在 BaaS 行業的領導地位（我剛剛描述了其中的一些），一些新業務已經與我們聯繫，並且已經開發了新的合作機會。

We and others see the benefit of our strength as a stable established partner. We will continue to be selective in our deals, ensuring that new relationships fit with our company's purpose, risk profile and return aspirations.

我們和其他人都看到了我們作為穩定的合作夥伴的實力所帶來的好處。我們將繼續在交易中有選擇性，確保新的關係符合我們公司的宗旨、風險狀況和回報期望。

Now I want to have a few words about Commercial Finance. We primarily offer financing to small- and medium-sized businesses. We operate in a unique position between traditional banks. We can offer better structuring to our clients and finance companies, we can offer better pricing. We generate new loans across the country through a combination of our in-house business development officers and referrals from other institutions. This portfolio is diversified across different asset classes and structured to provide opportunity regardless of where we are in the economic cycle. If we're in a thriving economy, we expect to see increased originations in the equipment and insurance lines of businesses as our customers grow and expand.

現在我想談談商業金融。我們主要為中小企業提供融資。我們在傳統銀行中處於獨特的地位。我們可以為我們的客戶和金融公司提供更好的結構，我們可以提供更好的定價。我們通過內部業務發展官員和其他機構的推薦相結合，在全國范圍內產生新貸款。該投資組合分散在不同的資產類別中，無論我們處於經濟周期的哪個階段，其結構都可以提供機會。如果我們處於繁榮的經濟中，我們預計隨著客戶的增長和擴張，設備和保險業務的起源也會增加。

In the downturn, we typically see an increase in the working capital segment as most businesses need our help bridging any gaps they may experience. Regardless of the economic cycle, our leases and loans' performance remained steady. There are 2 reasons for this. First, during a downturn, some of the additional volumes we underwrite are good credit companies have had a bad moment and therefore, have lost access to the original funding source. These companies are working to rebuild their credit profile. So they're highly incentivized to work with us to fulfill their fiduciary responsibilities.

在經濟低迷時期，我們通常會看到營運資金部分增加，因為大多數企業需要我們的幫助來彌補他們可能遇到的任何差距。無論經濟周期如何，我們的租賃和貸款表現都保持穩定。這有兩個原因。首先，在經濟低迷時期，我們承銷的一些額外數量的信用良好的公司經歷了糟糕的時刻，因此失去了獲得原始資金來源的機會。這些公司正在努力重建他們的信用狀況。因此，他們非常願意與我們合作以履行他們的受託責任。

Secondly, our loans are highly collateralized and underwritten to a discounted basis on that collateral. So that in the -- when a liquidation, our recoveries limit any losses we may experience. The higher yields we receive are primarily due to the human capital and due diligence performed in the collateral during the underwriting process and throughout the life of the loan and not necessarily an increased risk premium.

其次，我們的貸款是高度抵押的，並以該抵押品的折扣基礎承銷。因此，在 - 當清算時，我們的追回限制了我們可能遭受的任何損失。我們獲得的更高收益率主要是由於人力資本和在承銷過程中以及整個貸款期限內對抵押品進行的盡職調查，而不一定是風險溢價增加。

Let me give you an example. During the underwriting process in the equipment finance line, we often received several quotes from buyers on the equipment at origination. These quotes are part of what we base the value of the loan on so that in the event of the default, buyers are preapproved and prepared to transact with us. In our working capital business, during underwriting, we research and preapprove the end client who is responsible for making payments to the company we're financing.

讓我給你舉個例子。在設備融資業務的承保過程中，我們經常會在設備初始階段收到買家的多份報價。這些報價是我們貸款價值基礎的一部分，因此在發生違約時，買家已獲得預先批准並準備好與我們進行交易。在我們的營運資金業務中，在承銷期間，我們研究並預先批准負責向我們融資的公司付款的最終客戶。

In addition, throughout the life of loan, we conduct on-site field examinations, test the collateral and books of our clients, and we have dominion of funds. Should the client default, the payment from their customer comes directly to us. The active management of our highly collateralized loan book puts us in a strong position to recover a significant portion, if not all, the value of the loan in the event of a customer default. This may cause peaks and valleys in our short-term net charge-off rates since the default may occur in 1 quarter and recover in another.

此外，在整個貸款期限內，我們對客戶進行現場實地檢查，對客戶的抵押品和賬簿進行檢測，我們擁有資金的支配權。如果客戶違約，他們客戶的付款將直接支付給我們。我們對高度抵押貸款賬簿的積極管理使我們處於有利地位，可以在客戶違約時收回大部分（如果不是全部）貸款價值。這可能會導致我們的短期淨註銷率出現高峰和低谷，因為違約可能在一個季度發生並在另一個季度恢復。

However, as you can see on the slide, our annual net charge-off rates, even throughout the global financial crisis are not significantly higher than those of larger banks. Total loans and leases were $3.7 billion as of March 31, an increase of 6% from the linked quarter. Commercial Finance volumes and warehouse lending were the primary drivers of this result. This was roughly flat compared to the prior year as growth in Commercial Finance was offset by our decision to sell the student loan portfolio, paydowns and warehouse facilities and the timing of tax season loans.

然而，正如您在幻燈片中看到的那樣，即使在整個全球金融危機期間，我們的年度淨註銷率也沒有明顯高於大型銀行。截至 3 月 31 日，貸款和租賃總額為 37 億美元，較上一季度增長 6%。商業融資量和倉庫貸款是這一結果的主要驅動力。這與上一年相比大致持平，因為商業金融的增長被我們出售學生貸款組合、還款和倉庫設施的決定以及稅收季節貸款的時間所抵消。

Our Commercial Finance portfolio totaled $3.1 billion, an increase of 7% from the year ago period. During the second quarter, the company recognized a total of $6.8 million in pretax financial impacts. This was attributable to the disposal or change in depreciable life of mobile solar generators related to a single relationship. In fiscal year 2019, we incurred a large impairment expense associated with 1 company with which we had 3 legacy solar transactions that turned out to be fraudulent. The assets were written down to their market value and redeployed under an equipment lease agreement to new participants. When lease assets were returned, we performed a due diligence assessment. This led us to dispose of certain generators based on their condition and to adjust the depreciable life for the remaining mobile generators.

我們的商業金融投資組合總計 31 億美元，比去年同期增長 7%。在第二季度，公司共確認了 680 萬美元的稅前財務影響。這歸因於與單一關係相關的移動太陽能發電機的折舊年限的處置或變化。在 2019 財年，我們發生了與 1 家公司相關的大筆減值費用，我們與這家公司進行了 3 筆遺留的太陽能交易，這些交易後來被證明是欺詐性的。這些資產被減記至其市場價值，並根據設備租賃協議重新部署給新的參與者。當租賃資產被歸還時，我們進行了盡職調查評估。這導致我們根據某些發電機的狀況對其進行處置，並調整其餘移動發電機的折舊壽命。

That better reflected the service period based on market conditions and advancements in current technology. This was an isolated event limited to unique equipment is not indicative of the remaining rental equipment or even the solar portfolio. The remaining value of the generators on the balance sheet is $1.3 million.

這更好地反映了基於市場條件和當前技術進步的服務期限。這是一個僅限於獨特設備的孤立事件，並不代表剩餘的租賃設備甚至太陽能產品組合。資產負債表上發電機的剩餘價值為 130 萬美元。

Notwithstanding that unique situation, credit quality across the portfolio remains strong. Nonperforming loans of 0.76% were down from 1.16% in the previous quarter, and our net charge-off rates remain stable. We remain confident in our collateral management and the quality of our portfolio. Finally, some news in which we are particularly proud. In the fiscal third quarter, we were awarded the Great Place to Work certification. We remain dedicated to Pathward's culture and improving our employees' work experience. We are extremely pleased with Pathward's recognition as a Great Place to Work. Now I know that's a lot. Thank you for your patience and attention to this Pathward news in these interesting times. I look forward to your questions.

儘管情況特殊，但整個投資組合的信用質量依然強勁。不良貸款率為 0.76%，低於上一季度的 1.16%，我們的淨沖銷率保持穩定。我們對抵押品管理和投資組合的質量充滿信心。最後，一些讓我們感到特別自豪的消息。在第三財季，我們獲得了 Great Place to Work 認證。我們始終致力於 Pathward 的文化並改善員工的工作體驗。我們非常高興 Pathward 被評為理想工作場所。現在我知道很多了。感謝您在這個有趣的時代耐心等待和關注 Pathward 新聞。我期待著你的問題。

Before yielding the floor to Glen Herrick, I'd like to express my gratitude to Glen for postponing his retirement and agreeing to carry the [mass] as CFO while we search for his successor. We have engaged an executive search firm for this position, and Glen has gracefully agreed to help in the transition once that person is on board. Now Glen, will you take us through our financial results?

在讓 Glen Herrick 發言之前，我想對 Glen 推遲退休並同意在我們尋找他的繼任者時擔任首席財務官一職表示感謝。我們為這個職位聘請了一家獵頭公司，格倫優雅地同意在該人入職後幫助過渡。現在格倫，你能給我們介紹一下我們的財務結果嗎？

Thank you, Brett. Net income for the quarter ended March 31 totaled $54.8 million or $1.99 per share, an increase from $49.3 million or $1.66 per share recorded in the prior year quarter. When excluding the financial impact of the previously mentioned legacy mobile solar deal, a venture capital impairment and their corresponding tax impact, net income was $60.3 million or $2.18 per share for the fiscal second quarter.

謝謝你，布雷特。截至 3 月 31 日的季度淨收入總計 5480 萬美元或每股 1.99 美元，高於去年同期的 4930 萬美元或每股 1.66 美元。如果排除前面提到的遺留移動太陽能交易的財務影響、風險投資減值及其相應的稅收影響，第二財季淨收入為 6030 萬美元或每股 2.18 美元。

The second quarter's results were driven by the expansion of the net interest margin and the increases in noninterest income, generating 11% GAAP net income growth and 16% adjusted net income growth. Continued expansion in Pathward's net interest margin enabled net interest income to grow 21% year-over-year. Total net interest margin for the fiscal second quarter of 6.12% increased considerably when compared to the 4.80% recorded in the second quarter of fiscal year 2022. We expect our net interest margin to continue to expand through the ongoing remix of our balance sheet and the repricing of our earning assets in today's higher rate environment.

第二季度的業績受到淨息差擴大和非利息收入增加的推動，實現了 11% 的 GAAP 淨收入增長和 16% 的調整後淨收入增長。 Pathward 的淨息差持續擴大，使淨利息收入同比增長 21%。與 2022 財年第二季度的 4.80% 相比，第二財季總淨息差為 6.12%，大幅增加。我們預計，通過不斷調整資產負債表和在當今利率較高的環境中重新定價我們的盈利資產。

Provision expense in the fiscal second quarter of $36.8 million represents a $4.5 million increase from the prior year. The primary driver of the increase is higher provisioning in tax products. Excluding the impact of tax, the provision expense was $5.3 million, a $2.1 million increase from the prior year. This increase reflects a shift in the overall mix of loans. Total noninterest income increased 16% to $127 million in the fiscal second quarter as compared to $109.8 million in the prior year's quarter. The large increase was attributable to revenues associated from off-balance sheet deposit servicing along with Refund Transfer product fee income partially offset by a $2 million loss on the disposal of rental equipment related to the mobile solar generator activity Brett mentioned.

第二財季的撥備費用為 3680 萬美元，比上年增加 450 萬美元。增長的主要驅動因素是稅收產品的撥備增加。不計稅項影響，撥備費用為 530 萬美元，比上年增加 210 萬美元。這一增長反映了貸款整體結構的轉變。第二財季非利息總收入增長 16% 至 1.27 億美元，而去年同期為 1.098 億美元。大幅增長歸因於與資產負債表外存款服務相關的收入以及退款轉賬產品費用收入，部分被布雷特提到的與移動太陽能發電機活動相關的租賃設備處置損失 200 萬美元所抵消。

For the 6 months ended March 31, 2023, total tax services product revenue increased 2% when compared to the same period last year. This was driven by increases in revenue from Refund Transfers, which was partially offset by decreases in revenue from Refund Advances. Refund Advance originations for the 2023 tax season were $1.46 billion as compared to $1.83 billion last year. When adjusting originations for the nonrenewal of 2 previously announced partnerships, during the first 6 months of 2022, Refund Advance originations would have increased to $116 million or 9%.

截至 2023 年 3 月 31 日止 6 個月，稅務服務產品總收入與去年同期相比增長 2%。這是由於退款轉賬收入增加，部分被退款預付款收入減少所抵消。 2023 年納稅季的退款預付款金額為 14.6 億美元，而去年為 18.3 億美元。在為 2 個先前宣布的合作夥伴關係的不續簽調整髮起時，在 2022 年的前 6 個月，退款預付款發起將增加到 1.16 億美元或 9%。

Provision for tax services products increased when compared to the prior year's tax season, primarily due to unexpected shift in mix and Refund Advances from national franchise channels to independent tax providers. As Brett mentioned, we are pleased with the performance year-to-date. On the expense side, total noninterest expense of $127.1 million represents an increase of 23% from the prior year. This increase resulted primarily from $20.4 million in contractual card processing expenses, mostly attributable to the higher rate environment.

與上一年的稅收季節相比，稅務服務產品的準備金有所增加，這主要是由於組合和退稅預付款從國家特許經營渠道意外轉移到獨立稅務提供商。正如布雷特所提到的，我們對今年迄今為止的表現感到滿意。在支出方面，非利息支出總額為 1.271 億美元，比上年增長 23%。這一增長主要來自 2040 萬美元的合同卡處理費用，這主要歸因於利率較高的環境。

On our balance sheet, our deposit base remains strong at $5.9 billion. And as Brett stated, consists of millions of retail cards and other small dollar accounts with an average balance less than $1,000. Our deposit base is also diversified on a client basis as we contract with over 50 program managers. In all of our partnerships, consumer funds are held in accounts owned and controlled by Pathward. In the second quarter, off-balance sheet deposits averaged $1.6 billion, earning revenue roughly equivalent to the effective Fed funds rate.

在我們的資產負債表上，我們的存款基礎仍然強勁，達到 59 億美元。正如布雷特所說，它由數百萬張零售卡和其他小額美元賬戶組成，平均餘額低於 1,000 美元。由於我們與 50 多個項目經理簽訂合同，因此我們的存款基礎也因客戶而異。在我們所有的合作夥伴關係中，消費者資金都存放在 Pathward 擁有和控制的賬戶中。第二季度，表外存款平均為 16 億美元，收入大致相當於有效聯邦基金利率。

At March 31, we had $2 billion of deposits off balance sheet with program banks. For the quarter ended March 31, we held approximately $1 billion in deposits related to government stimulus programs. As we move through the rest of 2023 and into 2024, we anticipate that our off-balance sheet deposit balances and associated revenue seen in the card and deposit fee lines of noninterest income will likely decrease due to the continued rundown of our EIP balances. Not only will recipients continue to spend them but we will also begin to return unclaimed balances to the United States Treasury.

截至 3 月 31 日，我們在計劃銀行的資產負債表外存款為 20 億美元。在截至 3 月 31 日的季度中，我們持有約 10 億美元的與政府刺激計劃相關的存款。隨著 2023 年剩餘時間和 2024 年的到來，我們預計，由於我們的 EIP 餘額持續減少，我們的表外存款餘額和卡中的相關收入以及非利息收入的存款費用可能會減少。不僅接受者會繼續消費它們，而且我們還將開始將無人認領的餘額返還給美國財政部。

We expect the return of the unclaimed balances to be approximately $500 million in deposits over the next 18 months. This assumption is included in our guidance as we believe loan growth and the corresponding net interest income will offset this impact along with other growth. From a liquidity perspective, Pathward continues to remain in a robust position.

我們預計在未來 18 個月內，無人認領的餘額將返還大約 5 億美元的存款。這一假設包含在我們的指導中，因為我們認為貸款增長和相應的淨利息收入將與其他增長一起抵消這一影響。從流動性的角度來看，Pathward 繼續保持強勢地位。

Our balance sheet is strong, and the company holds $2 billion in deposits off-balance sheet. We have cash and cash equivalents of $433 million, unpledged investment securities of $85 million, Federal Home Loan Bank borrowing capacity of $755 million and funds available through the Fed discount window of $195 million. When factoring in unsecured funding and other wholesale funding options, this gives us over $4 billion in available liquidity.

我們的資產負債表穩健，公司在資產負債表外持有 20 億美元的存款。我們擁有 4.33 億美元的現金和現金等價物、8500 萬美元的未抵押投資證券、7.55 億美元的聯邦住房貸款銀行借款能力以及 1.95 億美元的可通過美聯儲貼現窗口獲得的資金。考慮到無擔保融資和其他批發融資選項時，這為我們提供了超過 40 億美元的可用流動資金。

The company remains well capitalized while continuing to return value to shareholders. During the fiscal 2023 second quarter, the company repurchased 1.17 million shares at an average price of $46.60. We are reaffirming our guidance for fiscal year 2023, continuing to expect GAAP earnings per share between $5.55 and $5.95 despite the $7.3 million in adverse pretax items during the second quarter that were detailed in the press release. This guidance includes the anticipated impact from the declining EIP deposit balances and assumes the federal funds target rate remains at 5% in the second half of fiscal year 2023. We also assume an income tax rate in the 12% to 15% range for the fiscal year.

公司在繼續為股東回報價值的同時，仍保持良好的資本狀況。在 2023 財年第二季度，公司以平均 46.60 美元的價格回購了 117 萬股股票。我們重申我們對 2023 財年的指引，繼續預計 GAAP 每股收益在 5.55 美元至 5.95 美元之間，儘管新聞稿中詳述了第二季度的 730 萬美元不利稅前項目。該指南包括 EIP 存款餘額下降的預期影響，並假設聯邦基金目標利率在 2023 財年下半年保持在 5%。我們還假設本財年的所得稅稅率在 12% 至 15% 的範圍內年。

That concludes our prepared remarks. Operator, please open the line for questions.

我們準備好的發言到此結束。接線員，請打開問題線路。

(Operator Instructions)

（操作員說明）

Our first question will be from the line of Frank Schiraldi with Piper Sandler.

我們的第一個問題將來自 Frank Schiraldi 和 Piper Sandler 的台詞。

I wanted to ask -- Glen, I wanted to ask just off the bat. You just mentioned the guidance. You reiterated the guidance. And I know in the quarter, you talked about the adjusted earnings per share, excluding the impairments and mostly on solar generators. And it seems in the release that you talked about the adjusted earnings per share being in the range of $5.40 to $5.80. That would include the impairments this quarter, though, right, given what you say in the (inaudible) I wanted to make sure that...

我想問——格倫，我想馬上問。你剛才提到了指導。你重申了指導意見。我知道在本季度，你談到了調整後的每股收益，不包括減值，主要是太陽能發電機。在新聞稿中，您似乎談到調整後的每股收益在 5.40 美元至 5.80 美元之間。這將包括本季度的減值，不過，鑑於你在（聽不清）中所說的話，我想確保......

It did not, Frank. So the adjusted earnings would actually be higher if you're going to adjust out the solar impairment. We use the same methodology when we first issued guidance which was just for the rebranding gain that we had and the impacts from that.

它沒有，弗蘭克。因此，如果您要調整太陽能減值，調整後的收益實際上會更高。我們在首次發布指南時使用相同的方法，這只是為了我們獲得的品牌重塑收益以及由此產生的影響。

Right. That's what I thought. Okay. I just wanted to make sure. And then as far as these -- the mobile generators, I believe you guys -- I mean, obviously, you're not in that 1 partnership or that 1 relationship any longer. But I believe you basically exited that business following that issue. Is that the case or anything else that's like that on the -- in the loan book?

正確的。我也這麼想。好的。我只是想確定一下。然後就這些 - 移動發電機，我相信你們 - 我的意思是，很明顯，你們不再處於那種 1 夥伴關係或 1 關係中。但我相信你在那個問題之後基本上退出了那個業務。貸款簿上是這種情況還是其他類似情況？

Yes, Frank, this is Brett. That is the only mobile solar transaction set that we did with 1 borrower that as we said, turned out to be a fraudulent borrower. If you go back to 2019 and read all the story about that, there were a number of lenders that got caught in that. But no, we don't have anything else like that. All of our solar business is fixed panels, things that are considerably different than that.

是的，弗蘭克，這是布雷特。這是我們與 1 個借款人進行的唯一一次移動太陽能交易，正如我們所說，結果證明是欺詐性借款人。如果你回到 2019 年並閱讀所有相關故事，就會發現有許多貸方被捲入其中。但是不，我們沒有其他類似的東西。我們所有的太陽能業務都是固定面板，與此截然不同。

Right. Okay. And then just lastly, if I could, on the Commercial Finance side, we've talked in the past and you talked a little bit about the detail there, Brett, on the call about the business in general. You've talked about pricing maybe being impacted a bit by all the liquidity in the system. It seems like some of that liquidity has come out of the system over the last -- certainly, over the last few months, and just wondering, it seems like maybe you're getting some better pricing there. Just curious, any color on both the pricing you're seeing there and also maybe the opportunity as this seems like it's the time where other more traditional banks kind of back off that business a bit.

正確的。好的。最後，如果可以的話，在商業金融方面，我們過去曾談過，布雷特，你在電話會議上談了一些關於一般業務的細節。您已經談到定價可能會受到系統中所有流動性的影響。似乎在過去的一段時間裡，一些流動性已經從系統中流出——當然，在過去的幾個月裡，我只是想知道，似乎你在那裡得到了更好的定價。只是好奇，你在那裡看到的定價和可能的機會都有任何顏色，因為這似乎是其他更傳統的銀行有點退出該業務的時候了。

Yes. I think you're right, Frank. We literally within the past couple of weeks are starting to see what you're talking about as other banks begin to pull back either because of their own liquidity concerns, or any kind of view of a credit C&I kind of credit view. So we are just now starting to see that, and that gives us an opportunity to get a higher yield on the kinds of transactions we're comfortable with. So I think -- and part of our guidance view is we're going to get the benefit of that through the next few months.

是的。我認為你是對的，弗蘭克。我們實際上在過去幾週內開始看到你在說什麼，因為其他銀行開始撤回，要么是因為他們自己的流動性問題，要么是任何一種對信用 C&I 的信用觀點。所以我們現在才剛剛開始看到這一點，這讓我們有機會在我們喜歡的交易類型上獲得更高的收益。所以我認為 - 我們的部分指導觀點是我們將在接下來的幾個月中從中受益。

There are currently no additional questions registered at this time.

目前沒有其他問題登記在這個時候。

(Operator Instructions)

（操作員說明）

There are currently no additional questions registered at this time, so I will pass the call back over to the management team for closing remarks.

目前沒有其他問題登記，所以我會將電話轉回給管理團隊以作結束髮言。

Thank you, everybody, for joining us today and your interest in Pathward. Have a great evening.

謝謝大家今天加入我們以及您對 Pathward 的興趣。祝你有個愉快的夜晚。

That concludes today's conference call. Thank you for your participation. You may now disconnect your lines.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開線路。