CASH 2017 Annual Report

79 Rate / Volume Analysis The following table presents, for the periods presented, the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. The table distinguishes between the change related to higher outstanding balances and the change due to the levels and volatility of interest rates. For each category of interest- earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume ( i.e., changes in volume multiplied by old rate) and (ii) changes in rate ( i.e., changes in rate multiplied by old volume). For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated proportionately to the change due to volume and the change due to rate. Rate / Volume Year Ended September 30, 2017 vs. 2016 2016 vs. 2015 (1) Increase / (Decrease) Due to Volume Increase / (Decrease) Due to Rate Total Increase / (Decrease) Increase / (Decrease) Due to Volume Increase / (Decrease) Due to Rate Total Increase / (Decrease) Interest-earning assets Specialty Finance Loans $ 9,699 $ (72) $ 9,627 $ 3,751 $ (2,514) $ 1,237 Tax Advance Loans — 11 11 5,513 (128) 5,385 Retail Bank Loans 6,441 (149) 6,292 — — — Mortgage-backed securities 385 415 800 687 1,105 1,792 Tax-Exempt Investment Securities 5,576 1,389 6,965 8,115 1,120 9,235 Asset-Backed Securities 1,537 263 1,800 1,199 — 1,199 Other investments and fed funds sold 389 178 567 705 90 795 Cash & Fed Funds Sold 1,115 (470) 645 (508) 654 146 Total interest-earning assets $ 25,142 $ 1,565 $ 26,707 $ 19,462 $ 327 $ 19,789 Interest-bearing liabilities Interest-bearing checking $ 18 $ 57 $ 75 $ 2 $ 7 $ 9 Savings (2) 10 8 20 (37) (17) Money markets 1 10 11 11 4 15 Time deposits 145 267 412 (36) (83) (119) Wholesale deposits 4,931 — 4,931 — — — FHLB advances (109) 445 336 941 (728) 213 Overnight fed funds purchased (451) 1,493 1,042 389 526 915 Subordinated Debt 3,873 36 3,909 22 — 22 Other borrowings 58 — 58 (234) 900 666 Total interest-bearing liabilities $ 8,464 $ 2,318 $ 10,782 $ 1,115 $ 589 $ 1,704 Net effect on net interest income $ 16,678 $ (753) $ 15,925 $ 18,347 $ (262) $ 18,085 (1) Due to the change in categorization of the Average Balances, Interest Rates and Yields table, 2016 vs. 2015 rate/volume calculation results have been conformed to be consistent with the updated categorization. Comparison of Operating Results for the Years Ended September 30, 2017, and September 30, 2016 General. The Company recorded net income of $44.9 million, or $4.83 per diluted share, for the year ended September 30, 2017, compared to $33.2 million, or $3.91 per diluted share, for the year ended September 30, 2016, an increase of $11.7 million. The increase in net income was primarily caused by an increase in tax advance fee income of $30.3 million, a $24.2 million increase in card fee income, a $15.9 million increase in net interest income, and a $15.6 million increase in refund advance fee income. The net income increase was offset in part by an increase in compensation and benefits expense of $27.1 million, a $10.2 million intangible impairment expense, a $7.5 million increase in amortization expense, and an increase in other expense of $5.5 million.