The newly revamped trail looks to be on the up and up following a stellar year – SiouxFalls.Business

October 31, 2022

Facebook announced the name change just hours after Jimmy Kimmel landed a monologue on “The Tonight Show.”

“Meta. Yeah. Meta,” Kamles said, eyebrows raised. “When I joined Facebook, I met a lot of crazy people,” he said.

Until then, the name Meta was Sioux Falls-based Meta Financial Group — a fintech company, far from a social network and an appearance on a nationally syndicated late-night show.

“My phone was blowing up,” says Brett Farr, then CEO of Meta Financial, a year ago. “It was funny.”

It was profitable. The Sioux Falls-based company received $60 million in trademark assets, which was used in part for the rebrand.

The new name, Password Financial Inc., was announced earlier this year, and the full name brand was released earlier this month.

“It begins to reach our goal, which is financial inclusion for all and helps ensure that everyone is connected to the nation’s financial network, so they have the opportunity to have the American dream,” Farr said. “If you don’t have access to finance, you’re excluded from many opportunities.”

There is no use of a real word in the name – “all taken” – he explained, “so you have to make up words. The concept of moving forward for people agreed with us, and the logo has the idea of ​​forward and upward.”

For Pathward, as a company, the concept of “on the up and up” seems to apply as well.

The company recently reported net income of $156.4 million, or $5.26 per share, for the fiscal year ended September 30, compared with net income of $141.7 million, or $4.38 per share, for the prior fiscal year. This shows an average income of 2.2 percent compared to 1.74 percent in the previous fiscal year.

Farr called it a “landmark year” of unifying the company under one brand.

“We aim to help the financially excluded, and that’s true in our payments business, but the type of trade finance we do is for people who are excluded from traditional trade finance,” he said. “I think it helped us recruit. People help us to understand our social consciousness but at the same time it helps us to be a person who rewards shareholders.

When the name changed, the company itself evolved from the name Meta Chance Magazine’s 100 Fastest Growing Companies in 2017.

At the time, Meta had grown to about 700 employees in Sioux Falls, out of a company of 800. Less than five years later and several acquisitions later, Passward is a nearly 400-person, 1,100-person company in Sioux Falls. That also reflects a reduction in staff supporting the community banking side of the business, which is now part of Iowa-based Central Bank.

Farrer, who is based in Nashville, estimates he is in Sioux Falls six to eight times a year. In addition to Nashville, the company has large offices in the Detroit suburbs as well as Scottsdale, Arizona and Dallas, where the company’s commercial finance operations are located.

Glenn Herrick and Brett Farr

The Sioux Falls team, which is housed in one building on the company’s campus, includes “a lot of professional work,” Farr said. “Risk and compliance, accounting, finance and a lot of technology. Here’s our ‘mobile money’ engines, and here’s a high-tech presence and some payments operations. That’s our prepaid card, debit card operations and accounting and finance.”

The pandemic has led the company to embrace more remote workers — there were some before — especially for hard-to-fill jobs like software developers. There are now employees working from 39 regions.

“We still have more than 50 open positions, and while some of those may be remote, our preference is to try and hire around a cluster,” said the company’s Sioux Falls executive vice president and CFO.

“Sioux Falls is where we want to add talent.”

Most password offices include “hotel spaces” and the flexibility to work remotely.

“We’ve made collaborations particularly effective in a number of ways,” Farr said. “That said, bringing culture and people together intentionally on our website for business purposes is a big focus for us.”

Herrick estimates there are 60 to 80 people in the Sioux Falls office on any given day, though 170 people signed up for a recent company volunteer day.

“We had so many signups that we had to find five more nonprofits to volunteer with,” he said.

Pathward’s growth is coming from several directions. The consumer payment side still operates on a business-to-consumer model, “because there are a lot of niches out there that don’t offer a lot of services, because third parties can provide them with a custom solution.” Farr said. “We provide safety and soundness in the background, we work collaboratively with people to help their needs…but we do very little direct-to-consumer business.”

The company supports refunds for tax filers through H&R Block as well as 25,000 independent tax offices nationwide.

“They face the customer, and we’re the banking engine behind it,” Farr said.

The company’s overall bank-as-a-service business, including payments, giving, lending and tax solutions, is among the industry’s top two players with The Bancorp of Sioux Falls, “and we have good business models, but there’s a lot of change happening and different ways to move money,” Farr said. He said. “Gaming, digital wallets, and we’re playing through all of this, so I think we’re all in the ‘let’s all figure it out’ phase.”

Last week, for example, Ramsey Solutions launched its new debit card, Gazelle, “The Dave Ramsey Way to Profit and Save.” Pathward acknowledges that banking services are “backed” by FDIC insurance to “keep your money safe.”

Pazward’s trade finance side caters to companies that are losing money or have suffered significant damage to their margins that prevents them from accessing more traditional bank financing. “It’s a serious collateralized loan, and we know how to do that even for companies that are on the brink of bankruptcy, but they don’t lose money doing it,” Farr said. “It gives them a chance to recover and return to their former glory, or in some cases it’s a start to help them go. Some of them fail and we remove them, but we don’t lose money by checking.

It’s an approach that could serve the company well, he said, as economic conditions create a more challenging traditional credit environment.

“If you’re in a traditional (lending) business and most of the loans are unsecured, you’re going to suffer losses when there’s a downturn,” Farr said. “Every loan we make assumes the company will fail tomorrow and we structure it accordingly. We’re built for bad times. So we’re going to have a lot of companies coming to us during a recession. That hasn’t started yet, and I don’t wish it on anyone, but we’re here to help.”

Meanwhile, while the rebrand may be in full swing, hearing the old company’s name on the national news is still enough to do a double take.

“All the time,” Herrick said. “I look at Bloomberg, and every time I hear meta, my head starts pounding. Then I realized, ‘Oh, we’re not.'”

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