CASH

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Performance was driven by a treasury-led model that achieved nearly $6 million in net interest income growth from commercial finance and double-digit noninterest income growth. - Strategic balance sheet optimization focused on expanding commercial finance while reducing lower-yielding securities to improve risk-adjusted returns. - The company achieved a top 20 ranking in SBA 7(a) program lending, reflecting a successful pivot toward high-value small business administration markets. - Management attributes long-term resilience to a diversified partner mix where no single partner represents more than 5% of total revenue. - Operational efficiency improved through disciplined expense management, specifically lower legal and consulting costs, despite ongoing investments in technology and compliance. - The 'talent anywhere' remote-enabled strategy has expanded the company's recruitment reach beyond local markets to meet evolving business needs. - Renewed long-term contracts with H&R Block (through 2030) and Clair underscore the stability of the core payments and earned wage access platforms. - Fiscal 2027 EPS guidance of $9.50 to $10.00 assumes no additional interest rate changes and an effective tax rate between 18% and 22%. - Management expects credit costs to normalize in 2027, with provisioning projected to return to historic levels of 120 to 130 basis points for the commercial finance portfolio. - Investments in people and technology are expected to front-load in the December quarter, leading to an earlier increase in compensation and benefits run rates compared to prior years. - The securities portfolio is targeted to settle between $800 million and $1 billion as principal is recycled into the higher-yielding loan book. - Strategic growth is anticipated to stem primarily from existing partners expanding into multithreaded products, supplemented by a pipeline of new partner on-boardings. - Net charge-offs of $52 million in the quarter resulted from specific reserves taken in prior quarters for idiosyncratic loans, including those within the commercial finance portfolio. - The nonperforming loans and lease ratio increased to 5.61% as the company works to bring specific construction-related credits to completion and eventual sale. - Management clarified that elevated credit items are project-specific and not indicative of systemic issues across the broader commercial or consumer portfolios. - Liquidity remains robust at $3.1 billion, supporting continued share repurchases with 2.8 million shares remaining under the current authorization. - Growth is broad-based across credit sponsorship and embedded finance, with significant revenue increases coming from existing partners deepening their product usage. - Management is investing heavily in risk and compliance infrastructure to ensure scalability as transaction volumes increase. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Provisioning in the current quarter was primarily driven by new loan growth rather than portfolio deterioration. - Management expects the Allowance for Credit Losses (ACL) ratio to stabilize around 1.20% to 1.30% for the commercial finance book as legacy issues are resolved. - Higher rates historically benefit Pathward's asset-based lending as traditional bank borrowers seek alternative credit sources during economic stress. - While higher rates change the capital structure of renewable energy projects, management believes the high returns of these projects keep them viable despite increased financing costs. - Management argues that 'culture' is the hardest element to replicate, noting that fully vertically integrated models often struggle to balance banking compliance with entrepreneurial front-end needs. - Private equity ownership of many fintech partners acts as a structural barrier to them becoming bank holding companies. - While seasonality remains (deposits in Q1, spending in Q2), the diversification of products is gradually flattening the revenue curve. - Approximately 75% to 80% of year-over-year fee growth is driven by existing partners adding new programs.

This article first appeared on GuruFocus. - Net Income: Full fiscal year 2026 net income of $175.7 million. - Diluted EPS: $8.14 per diluted share for the full fiscal year 2026. - Return on Average Assets: 230 basis points for the full fiscal year 2026. - Return on Average Tangible Equity: 32.9% for the full fiscal year 2026. - Net Interest Income: Commercial finance business grew net interest income by nearly $6 million in Q4. - Non-Interest Income: Double-digit percentage growth in Q4, driven by an increase of almost $8 million in card and deposit fee income. - Non-Interest Expense: Improved in Q4 on disciplined expense management and lower legal and consulting expense, partially offset by higher building and software expense. - Commercial Finance Interest Income: Grew nearly $30 million for the full year, driven primarily by structured finance. - Adjusted Net Interest Margin: Improved to 551 basis points in Q4. - Loan Originations: Increased year-over-year from $1.3 billion to $2.2 billion, driven by credit sponsorship growth. - Loans and Leases: Grew 9% at September 30. - Non-Performing Loans and Leases Ratio: Increased modestly to 5.61% sequentially. - Net Charge-Offs: $52 million in the quarter, of which $20.3 million was associated with the commercial finance portfolio. - Custodial Deposits: Held more than $400 million more in average custodial deposits versus a year ago; on-balance-sheet deposits decreased modestly year-over-year. - Liquidity: $3.1 billion as of September 30. - Share Repurchases: Approximately 282,000 shares repurchased in the quarter at an average price of $88.75; over 2 million shares repurchased for the year; 2.8 million shares remaining under the current program. - FY2027 Guidance: Reiterated EPS range of $9.50 to $10.00, assuming no additional rate changes, an effective tax rate of 18%22%, secondary market revenues of $5 million$7 million per quarter, and expected share repurchases. - Warning! GuruFocus has detected 4 Warning Signs with NVEC. - Is CASH fairly valued? Test your thesis with our free DCF calculator. Release Date: October 21, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Pathward Financial Inc (NASDAQ:CASH) delivered full-year net income of $175.7 million, or $8.14 diluted EPS, with strong return metrics of 230 basis points ROA and 32.9% ROTCE. - The company renewed its contract with H&R Block through mid-2030 and extended its partnership with Claire, demonstrating strong partner retention. - Loan originations increased from $1.3 billion to $2.2 billion year-over-year, driven by significant growth in credit sponsorship and expansion with existing partners. - Adjusted net interest margin improved to 551 basis points, benefiting from earning asset mix improvement and repricing. - Pathward Financial Inc (NASDAQ:CASH) has a diversified business model with no single partner representing more than 5% of revenue, reducing concentration risk. - The company reiterated fiscal 2027 EPS guidance of $9.50 to $10.00, reflecting confidence in continued execution. - Liquidity remains strong at $3.1 billion, and the company repurchased over 2 million shares during the year, returning capital to shareholders. - Non-performing loans and lease ratio increased to 5.61% sequentially, largely due to additional work on certain credits. - Net charge-offs were elevated at $52 million in the quarter, with $20.3 million associated with the commercial finance portfolio. - Credit issues in renewable energy projects persist, and resolution is taking longer than expected, with further charge-offs possible as projects are funded and sold. - Deposits held on the balance sheet decreased modestly year-over-year, although average custodial deposits increased. - The company expects continued investments in people, processes, and technology, which will increase compensation and benefits run rate earlier in fiscal 2027, pressuring expenses. - Card fee income exhibits seasonality and variability due to contractual volume-based incentive payments, which can skew quarterly results. - New partner onboarding, particularly in issuing, takes time and may not contribute significantly to revenue until subsequent fiscal years, limiting near-term growth from new partners. Q: With the elevated charge-offs this quarter, should investors expect further charge-offs next year, and what provision expense assumptions are embedded in fiscal 2027 guidance? A: CFO Gregory Sigrist explained that charge-offs are episodic and tied to the idiosyncratic credits already discussed, distinct from the ongoing cost of credit. He expects credit to normalize in 2027, with the commercial finance ACL ratio returning to a historic 120-130 basis point range, meaning provisioning will largely be for loan growth rather than credit deterioration. CEO Brett Pharr added that some renewable energy projects require funding to completion, which temporarily flows into non-accrual until sold. Q: New originations increased meaningfully this quarter, largely driven by credit sponsorship. How much of that growth represents a new normalized run rate versus acceleration in specific programs? A: CFO Gregory Sigrist stated that the growth represents the new run rate based on programs and partners already announced and onboarded. He noted that credit sponsorship and acquiring programs ramp more rapidly than issuing, and going forward growth will come from both expansion of partner programs and growth in the partner base. Q: With a higher rate environment and a NIM rebound this quarter, how would a potential December rate hike impact EPS trajectory, and how could higher rates affect credit? A: CFO Gregory Sigrist said the company is fairly neutral from an asset-liability perspective, but a 25 basis point hike could add roughly $2 million pre-tax for the full year given a slight asset-sensitive position from floating-rate construction loans. He also cited the middle of the curve as a tailwind, with about 35% of new production in fixed-rate loans pricing off the three-to-five-year curve. CEO Brett Pharr added that higher rates actually benefit the asset-based lending and working capital portfolio as traditional C&I borrowers get pushed out of banks, and that renewable energy projects have high enough returns to absorb higher capital costs. Q: Are any partners actively pursuing national charters, and how concentrated is the partner base? A: CEO Brett Pharr acknowledged a small subset of partners have discussed pursuing charters, but noted private equity ownership makes becoming a bank holding company very difficult, so there is no material threat. He emphasized the lack of concentration, stating no single partner represents more than 5% of Pathward revenue. Q: Where would you like the securities portfolio to settle out as it continues to wind down? A: CFO Gregory Sigrist said the portfolio, now under $1.2 billion, serves as a liquidity reservoir pledged for tax-season funding. He expects it to normalize in the $800 million to $1 billion range, recycling roughly $140-150 million of principal into the loan book, with possibly a small amount reinvested in securities as OCI coverage in a down-rate scenario. Q: Where do you expect new partners to come from by industry, and is growth more on credit sponsorship, embedded finance, or cards? A: CEO Brett Pharr said it is broad-based across all areas, emphasizing the diversified business model and product set. Growth comes from both new partners and existing partners, with no single segment dominating; the breadth and depth of offerings is the key differentiator. Q: What is the hardest aspect for competitors to replicate as more fintechs consider charters and banks build BaaS capabilities? A: CEO Brett Pharr pointed to culture as the hardest thing to replicate, noting banks have bank culture and program managers have program manager culture. He said fully vertically integrated models have historically failed and that culture cannot simply be hired. Q: How should investors think about the card fee income line over the next year? A: CFO Gregory Sigrist said current levels set the mark going forward, with variations driven by partner onboarding volumes. He noted normal seasonality, with deposits growing in the December quarter and core fee income rising in the March quarter, plus some contractual volume-based incentive payments that can skew individual quarters. Q: How much of the card fee acceleration in fiscal 2026 came from new programs and partners versus existing ones? A: CFO Gregory Sigrist estimated 75% to 80% of year-over-year uplift historically comes from existing partners adding new programs and multi-threaded products. New issuing partners take longer to onboard and ramp, so their uplift typically shows up in subsequent fiscal years, providing tailwind exiting 2027 into 2028 and 2029. Q: How do you view credit performance in the tax services business looking ahead? A: CEO Brett Pharr said underwriting has improved for several years and that shows in the numbers. He expects to maintain those gains but doubts improvement will continue at the same degree, hoping for some modest further improvement rather than the larger gains of past years. Q: Has the seasonality of the card fee line changed given the strong fourth quarter and new partner onboarding? A: CFO Gregory Sigrist said onboarding of new products and partners flattens seasonality somewhat, though prepaid card deposit growth in December and fee income in March will persist. He noted contractual volume-based incentive payments can shift between quarters, which was the explanation for prior-year comparisons. Q: What areas require more investment to keep up with competition in BaaS and embedded finance? A: CFO Gregory Sigrist said the company continues run-rate investing in technology and infrastructure to stay contemporary with clients, plus risk and compliance to keep pace with onboarding and rising volumes. CEO Brett Pharr added that these investments support partners' own endeavors and maintain historical strength. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Financial services company Pathward Financial (NASDAQ:CASH) announced better-than-expected revenue in calendar Q3 2026 (fiscal Q4 2026), but sales fell by 2.7% year on year to $183.1 million. Its non-GAAP profit of $1.85 per share was 17.1% above analysts' consensus estimates. Is now the time to buy CASH? Find out in our full research report (it's free). - Revenue: $183.1 million vs analyst estimates of $179.1 million (2.7% year-on-year decline, 2.2% beat) - Adjusted EPS: $1.85 vs analyst estimates of $1.58 (17.1% beat) - Market Capitalization: $1.54 billion Pathward Financial's third quarter results outpaced Wall Street expectations, driven by strong growth in commercial finance and the ongoing expansion of its card and deposit fee income, particularly within its core payments business. Management credited disciplined expense management and focused investment in technology, risk, and compliance for maintaining operational efficiency, even as sales declined year over year. CEO Brett Pharr emphasized the company's broadened partner base and the renewal of significant contracts, noting, "Our broad suite of solutions allows us to create opportunities, deepen relationships, and deliver value." Looking ahead, Pathward Financial's outlook is shaped by continued investments in technology and scalability, as well as further diversification of products and partners. Management reiterated its commitment to maintaining a resilient business model that capitalizes on both new and existing relationships. CFO Gregory Sigrist highlighted that ongoing investments in people, processes, and technology are expected to begin ramping in the coming quarter, potentially impacting expenses but supporting long-term growth. The company anticipates credit costs to normalize, with most provisioning in 2027 tied to new loan growth rather than credit deterioration. Management attributed the quarter's performance primarily to commercial finance growth, disciplined expense management, and the deepening of partner relationships across multiple business lines. - Commercial finance momentum: Growth in commercial finance, especially through structured and asset-based lending, was a key revenue driver, with management highlighting increased loan originations and a strategic shift toward higher-yielding assets. - Payments and card fee income: The company saw double-digit percentage growth in noninterest income, led by a significant rise in card and deposit fee income. This was attributed to both the onboarding of new programs and increased activity with existing partners in the embedded finance and payments segments. - Partner diversification and contract renewals: Renewals with major partners, including H&R Block and Clair, reinforced the company's diverse revenue streams. Management stressed that no single partner accounts for more than 5% of total revenue, reducing concentration risk. - Expense management and technology investments: Lower legal and consulting costs helped offset increases in building and software expenses, while targeted investments in technology and compliance were emphasized as essential for supporting future scalability and partner needs. - Credit normalization underway: Elevated charge-offs were concentrated in previously identified credits, primarily within renewable energy projects. Management stated that credit costs are expected to return to historical averages as these projects are resolved and new loan growth becomes the primary source of provisioning. Pathward's future performance will be influenced by ongoing product diversification, sustained partner growth, and disciplined investments in technology and risk management. - Sustained partner and product expansion: Management expects most near-term growth to come from existing partners, particularly through the addition of new products and services. New partner onboarding remains a tailwind, though the impact is expected to build more gradually over time as programs ramp up. - Credit cost normalization: Provisioning for credit losses is anticipated to revert to historical run rates, with 2027 credit costs primarily driven by loan growth rather than deteriorating credit quality. Management noted that episodic charge-offs are largely behind the company and that credit trends should stabilize going forward. - Expense and technology investments: Planned increases in hiring and consulting spend in the next quarter are expected to raise the compensation and benefits run rate. However, these investments are positioned to support operational scale, compliance requirements, and the growing complexity of partner relationships, which management believes will help Pathward capture additional growth opportunities. In upcoming quarters, the StockStory team will monitor (1) the pace of new product launches and partner onboarding, (2) the normalization of credit costs and resolution of remaining nonperforming loans, and (3) the impact of strategic technology investments on operational scale and partner satisfaction. Continued updates on contract renewals and the rollout of expanded payment solutions will also be important to track. Pathward Financial currently trades at $73.90, in line with $74.20 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it's free for active Edge members). WHILE YOU'RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. 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Image source: The Motley Fool. Wednesday, Oct. 21, 2026 - Senior Vice President, Chief of Staff and Investor Relations - Darby Schoenfeld - Chief Executive Officer - Brett L. Pharr - Chief Financial Officer - Gregory A. Sigrist Operator: Ladies and gentlemen, thank you for standing by and welcome to Pathward Financial's Fourth Quarter 26 Investor Conference Call. During the presentation, all participants will be in a listen-only mode. Following the prepared remarks, please press *1 to raise your hand. To withdraw your question, press *1 again. 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 Schoenfeld: Thank you, operator, and welcome. With me today are Pathway Financial's CEO, Brett Farr and CFO, Gregory A. Sigrist, who will discuss our operating and financial results for the fourth quarter and full fiscal year of 2026. 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 pathwardfinancial.com. As a reminder, our comments may include forward-looking statements. Those statements are subject to risks and uncertainties that could cause actual and anticipated results to differ. These statements speak only as of this date, and the company undertakes no obligation to update any forward looking statement, except as may be required by applicable law. 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 those expressed or implied in the forward-looking statements. Additionally, today, we will be discussing certain non-GAAP financial measures on this conference call. References to non GAAP measures are only provided to you to assist in understanding the company's results and performance. Additional information regarding these non-GAAP measures as well as reconciliations 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 Pharr, our CEO. Brett L. Pharr: Thanks, Darby, and good evening, everyone. Thank you for joining our earnings call. Looking forward to sharing our updates today, but I would like to start by taking a moment to reflect on an important milestone. This quarter marks 5 years since my first earnings call as CEO of Pathward. Looking back, it is remarkable to reflect on everything the Pathward team has accomplished together. We have navigated the challenges of COVID, rebranded the company as Pathward, expanded our executive team, and strategically reshaped our balance sheet. All while evolving our business and strengthening our position as a trusted platform that enables our partners to thrive. Through each chapter, 1 thing has remained constant, and that is the dedication and commitment of our employees. Our success has always been rooted in our people. Every day, talented employees across Pathward work with customers and businesses to enable financial availability, choice, and opportunity. Their unwavering commitment to true partnership is what has enabled us to adapt, execute and continue delivering for all of our stakeholders. I am very proud that we have continued to sustainably grow while staying true to our purpose of powering financial inclusion. That is not a coincidence. Our purpose continues to guide our strategy, and we believe that this diligent focus helps drive long term value for our shareholders. And while I find tremendous value in times of reflection, I am even more excited about what lies ahead. We have a strong foundation, a team that embodies our values, and is committed to success, as well as a clear strategy to guide us forward. With that, let me spend a few minutes on our strategy. Then I will provide a quick update on credit, before turning the call over to Gregory. Fiscal 26 was another important year of execution for Pathway. We successfully advanced the strategic priorities we set out to accomplish last year, and this was by no means a small feat. We had some major wins across each area, starting with maintaining an optimized balance sheet. Commercial finance growth, combined with reductions in our lower yielding securities portfolio, reflects our disciplined approach while remaining cognizant of our balance sheet capacity. We deployed capital where we believe would provide us with optionality or generated strong risk adjusted returns. We made significant inroads in the small business administration loan market moving up within the top 20 SBA 7(a) program lenders in the country. Next, we continue to make investments in technology, risk, and compliance. We believe these continued investments will allow our partners both present and future to deliver with confidence as they leverage our expertise, infrastructure, and collaborative support. The world is only moving faster, and we are proud to enable our partners by offering a broad suite of capabilities. Furthermore, we are very proud to have been recognized by a few different organizations throughout the year for our standout workforce and culture. We believe part of our success can be attributed to our talent anywhere approach. With this talent strategy, we have been very successful in expanding our reach beyond local candidates as a remote enabled employer and strengthening our ability to meet the evolving needs of our business. The last strategic priority is the client experience. We believe our partners see the value in Pathward platform and our ability to grow alongside them. Last quarter, we announced that we had renewed our relationship with Clair, a company that has empowered workforce management and payroll to offer early access to earned wages to employees at no cost to employers. This quarter, we are pleased to announce that we have renewed our contract with long standing partner H&R Block, extending our relationship through mid-2030. H&R Block has been a leader in the tax preparation industry for more than 70 years with a deep commitment to their clients, associates, and community. We are excited to continue to support them. We still see significant opportunity in our pipeline with both new and existing partners to build on this momentum by expanding the products and capabilities we deliver. As we look ahead to fiscal 2027, our strategy will remain consistent. We believe the continuity in our strategy reflects the confidence that we have both in the direction of the business and the progress we have made throughout fiscal 2026. Our focus is now on continuing to execute against these areas and building momentum across the organization. Importantly, we believe our diversified mix of partners, products capabilities remains a key differentiator of Pathward. We are not dependent on a single partner, industry or market, which we believe delivers a resilient business model while providing multiple avenues for growth. Our broad suite of solutions allows us to create opportunities deepen relationships, and deliver value. As a result, we believe we are well positioned to capitalize on the opportunities in front of us. We continue to work through the renewable energy projects that we mentioned last quarter, and still believe we have line of sight to bringing them to completion. While we made significant progress during the quarter, these things take time. We will continue to provide transparency in connection with these credit items. Additionally, we continue to believe that these events are not indicative of a broader systemic issue within the portfolio. Aside from credits, we are very pleased with the results of the year. Now I would like to turn it over to Gregory, who will take you through the details of our financials and fiscal year 2027 guidance. Gregory A. Sigrist: Thank you, Brett. We were pleased with the performance during the quarter as our core businesses delivered solid results. Starting with the balance sheet, our treasury led model continues to deliver with growth, of nearly $6 million in net interest income from our commercial finance business. We also delivered double digit percentage growth in noninterest income primarily due to an increase of almost $8 million in card and deposit fee income the majority of which was driven by growth in the core payments business. Noninterest expense improved in the quarter as a result of disciplined expense management, with lower legal and consulting expense. This is partially offset by building and software expense, Additionally, we will continue to make targeted investments in our people, processes, and technology to facilitate evolution and scalability. Aside from the credit items Brett discussed, we are pleased with our full year results, and equally important, how our teams delivered them. Their focus, collaboration, and consistent execution throughout the year drove strong performance across the business. Interest income growth in commercial finance was nearly $30 million driven primarily by an increase in structured finance. Solid partner growth combined with disciplined expense management led to full-year net income of $175.7 million or $8.14 diluted earnings per share. With that, our return metrics remain strong, with a 2.30 return on average assets, and a 32.9% return on average tangible equity. We believe that these results reflect the quality of our business model, the discipline of our teams, and consistent execution. Not to mention our capacity to generate earnings, and to create capital to cover events as they arise. We believe this continues to differentiate Pathward and provide a strong foundation as we enter fiscal 2027. While deposits held on the company's balance sheet at September 30 experienced a modest decrease versus a year ago, we held more than $400 million more in average custodial deposits. As a reminder, we do earn fee income on custodial deposits that is tied to the effective fed funds rate. Average partner deposits were strong in the quarter, giving us the ability to generate additional servicing fee income. Loans and leases at September 30, grew 9%. We continue to be successful in growing structured finance term lending, and SBA and USDA loans as well as working capital asset based lending. Adjusted net interest margin improved to 5.51% in the fourth quarter as we continue to improve our earning asset mix and see the benefit of repricing. Year over year loan originations increased from $1.3 billion to $2.2 billion. Driven primarily by significant growth in our credit sponsorship business from both a new contract signed last year and expansion with current partners. Regarding credit, the nonperforming loans and lease ratio did increase modestly to 5.61% sequentially. While there are always normal flows in and out, the increase was largely attributable to additional work being done to bring certain credits to completion. Net charge offs were $52 million in the quarter, of which $20.3 million was associated with the commercial finance portfolio. We continue to expect credit to normalize in 2027, as we work down our nonperforming loans. The strength of our balance sheet along with our earnings and capital accretion power allows for return of capital to shareholders, As of September 30, our liquidity was $3.1 billion, during the quarter, we were able to repurchase approximately 282 thousand shares at an average share price of $88.75. For a total of over 2 million shares for the year. This leaves 2.8 million shares still available for repurchase under current stock repurchase program. We are reiterating our fiscal year 2027 guidance range of $9.50 to $10 per share which includes the following assumptions. No additional rate changes during the year, an effective tax rate of 18% to 22%, expected secondary market revenues between $5 million to $7 million per quarter, and includes expected share repurchases. Lastly, a comment on expenses. As we have said, we will continue to invest in people, processes, and technology. In prior years, that has largely shown up as an investment ramping throughout the year. For fiscal 2027, we expect those investments to begin in the December quarter. This will manifest as additional hirings in the first quarter that will increase the compensation and benefits run rate earlier in the year but will still hold the normal seasonal pattern. Similarly, we will continue to use consultants with modestly elevated spend in the first half of the year. This concludes our prepared remarks. Operator, please open the line for questions. Operator: We will now begin the question and answer session. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile our roster of Q&A. Your first question comes from Timothy Switzer with KBW. Timothy, your line is now open. Please go ahead. Timothy Switzer: Hey. Good afternoon. Thanks for taking my question. Brett L. Pharr: Hey, Timothy. Timothy Switzer: Sounds like good progress on the partnership side announced with H&R Block. And Clair and others recently. I am curious on where do you think the new partners will be coming from specific industries And is it more on the credit sponsorship side, embedded finance? You know, the card and debit business. We would love to get an update there. Brett L. Pharr: Yeah. So I think there is a variety of ways. It is pretty broad. 1 of the things we kind of emphasize is our business model and product set. And so it is all of the above that we are seeing. And we have said it before, a lot come from potential new partners and also an awful lot of our increase in revenue comes from existing partners. But there is not 1 that I would single out and say that it is a higher percentage of it. This is all about the breadth and depth of our offerings and our partners really want to understand that and be a part of it. Timothy Switzer: Okay. And do you guys feel like there is any areas right now we need to invest a little bit more in to keep up with the competition in the vast embedded finance space, where are you directing most of your investment dollars right now? Brett L. Pharr: Gregory, I will get you to talk about this a little bit. But, I mean, we have said for a while that we have been in our run rate investment in technology and enhancing the infrastructure in the back. Anything you want to add to that? Gregory A. Sigrist: No. I think that is right. I mean, it is more just staying contemporary with our clients and really help them support their own endeavors. As I said in my prepared remarks, we also invest on the risk and compliance side because with the onboarding we have done and just the increase in the volumes today and in the future, we just wanna make sure that stays, you know, state of the art and stays at the strength that we have had historically. So that is just an area we wanna make sure we stay ahead of. Timothy Switzer: Okay. that is helpful. I want to ask a few on the credit side here. With the charge offs this quarter, and I guess in the last few, which were--some of them were in the renewable energy space. Are there any specific verticals or industries that these are concentrated in this quarter? Brett L. Pharr: No. None specific that we would call out. And, you know, a lot of this is related to transactions that we have already talked about before. As we work through the process. So there is not anything new or any new kind of asset classes that we would bring to the table and say we are seeing things here. Gregory A. Sigrist: And, Timothy, I think the key point there with predatory time. Yeah. I think the key point which you really touched on, though, is that the elevated charge offs and, frankly, still the NPL and the NPL ratio, it is concentrated in the credits we have already talked about. And I think, importantly, we are making resolutions. You know, you saw the past dues have declined. that is important to see too, and we have not seen any evidence that there is any other, you know, issues spreading across the portfolios. Timothy Switzer: Okay. I mean, I guess with the charge-offs this quarter, we still see NPAs staying around the same level. Should we expect further charge offs starting next year? What kind of assumptions should we have? Brett L. Pharr: Yeah. Keep in mind, and we talked last time about a number of the projects that we were going to take over and have to lead to completion. That means you fund the projects and then eventually complete them, get them producing, and then you sell them. Well, for the existing portfolio, when you fund some of that construction, those dollars go into nonaccrual until you sell the product. Gregory A. Sigrist: Yeah. But specifically on charge-offs, Tim, just-- You have to separate and differentiate the charge offs from when you take the specific reserves and how that kind of dovetails with the life cycle Brett just mentioned. Right? The charge offs you are seeing are results of, you know, specific reserves that we have taken in prior quarters. And you have to differentiate that against our ongoing credit cost of, you know, credit, right, which is what we provision for. You know, we talked about last quarter, we see credit normalizing in 2027. And what that really means is the cost of credit, which is our credit provisioning, is getting--I feel it is going to migrate back to our historic levels. The charge offs are a bit more episodic, and they are tied to the idiosyncratic, you know, loans that we have talked about over the last year, frankly. But it is a byproduct of just a natural progress of working through some of those. Timothy Switzer: Okay. Alright. My last 1 here, and Gregory, you just touched on this. But what kind of provision expense expectations are embedded within your guidance for 2027? Gregory A. Sigrist: Yeah. I touched on it last quarter too and where I said we would normalize back to kind of the historic run rate and what. And I think I said this last quarter too. What that really means is if you focus solely on the commercial finance portfolio, the historic ACL ratio has been. You can see it in the deck. it is in there. But it could be down, you know, roughly a 1.20% to a 1.30% probably a normalized level. I think that is the starting point. And then in anything up or. That, it is really just gonna be a more of a function of the mix. Of new production. What you saw this quarter, frankly, the provisioning in the quarter is really just provisioning for new, you know, for new. For loan growth. Depending upon what that mix was. And that is the way I kinda see next year playing is more akin to that 120 to a 130 basis point range. Timothy Switzer: Okay. Since you are already near those levels, it seems like, you know, the provision going forward would be more for loan growth rather than credit deterioration. Gregory A. Sigrist: Based upon the facts we have right now, that is exactly the way we are feeling about it. Timothy Switzer: Alright. Good to hear. Thanks for taking all my questions. Brett L. Pharr: Thanks, Tim. Operator: Your next question from the line of Joe Yanchunis with Raymond James. Your line is now open. Please go ahead. Joseph Yanchunis: Good afternoon, guys. Thanks for taking my questions. Brett L. Pharr: Hey. How are you doing? Joseph Yanchunis: Yep. I am doing well. Gregory A. Sigrist: So new originations increased pretty meaningfully this quarter, you know, largely driven by credit sponsorship. And you would referenced growth with existing partners. You know, how much that growth represents a new normalized run rate versus potentially some acceleration in specific programs? I am just kind of curious what you are seeing in the pipeline today that gives you confidence in that continued growth. Brett L. Pharr: Yeah. I believe that really represents the new run rate based upon the programs and the partners we have announced and onboarded. I think we tend to ramp into those programs more rapidly than an issuing partner or acquiring is pretty rapid too. But I think that is the new normal. And from here, it is really just growth and partner programs and then growth in the partner base. Joseph Yanchunis: that is great to hear. And then, Brett, you know, having completed 5 years of earnings calls for Pathward, and congratulations for that, was hoping you could talk a little bit about the next 5 years. And what do you think the themes will be in the BaaS space? And how do you expect consolidation in the regulatory environment will play out? Brett L. Pharr: Well, so I think there is a broad set of things over there. Obviously, there is lots of continual change in all kinds of payments I mean, if you think about where we were 5 years ago, and the products that we offered and provided and then what we offer today is vastly different. And I think 5 years from now, there will be a lot more of things that are let's say, not just issuing an interchange related and that is gonna continue to advance. Some of which are the products we are already doing, some of which are products that we do not even know about or that are coming. And we gotta let all that play out. We have got to let AI play. that is gonna have a material impact on our industry. I think it is gonna be more on the customer front end ultimately, and how that shows up. So that is gonna be a big part of, I think, 5 years out. And I think, you know, we are in a period of time where some are looking at vertical integration. We are gonna see if that is right or wrong, and I am not sure. I think there are pros and cons to that. And so I think we will watch that play out. That will not be 5 years. That will be 2 years, and we will watch as that plays out. But, you know, very optimistic about this because this whole thing has always been about third party delivery. And about people being creative, innovative, entrepreneurial, upfront with the customer, and then us providing the infrastructure and the backbone behind it, obviously wrapped in risk and compliance. And I just think that is a fabulous business model for whatever's coming. So excited about the future and, you know, we lead on what our partners lead into. So we watch them and what they are doing, then we help support them to do that and often co create. And I think we will keep doing that. Joseph Yanchunis: You know, you mentioned the vertical integration in your answer there, and I believe this question has come up on the past probably 5 or so earnings calls with you guys. You know, with more fintechs considering their own charters and more banks building vast capabilities, what is the hardest aspect for a competitor to replicate? You know, do you think it is the regulatory infrastructure product breadth, technology, or just the relationships? Brett L. Pharr: it is the culture. Culture matters. And there is a distinct reason that banks do banking and our program managers do what they do. And by the way, you cannot hire culture. You have to spend a lot of time creating it. And I think the best business model has worked because banks had the bank culture and the program managers had the program manager culture. I think we have already had in the past household names that you know that tried vertical integration, and failed. Now some of them as we go forward, we will figure it out. Some of them have narrow based charters that can let them do some things, and so it will not be quite as hard. But the fully vertical integrated model I think it is hard to get up every day and have a culture that meets the needs of a banking infrastructure. In the background and all the things you need on the front end as a program manager. And as I said, you cannot hire that. Joseph Yanchunis: that is a good point. Then 1 more for me here to bring Gregory kind of back in the fold. The securities portfolio continues to wind down. Now it is under $1.2 billion. I think you have about another $150 million cash flowing in fiscal 2027. Where would you like to see the portfolio settle out? Gregory A. Sigrist: You know, we still keep it there largely as a reservoir of liquidity just in case we need it. You know, it is pledged. We borrow against it. that is part of, you know, how we fund tax season. But the reality is I think we can let that run down to the $800 million to perhaps a $1 billion range. And it will settle out there. We are in that environment, though, where rates are. And I have said historically, we will take that 140 or 150 million of principal off the portfolio and reinvest it back into the loan book. The reality is, though, there is probably a benefit for us to buy a few securities along the way. Just to give us, in the event there is a down rate scenario, a bit of coverage on the OCI front. I would not say it is gonna be a lot, but I would say there might be a little bit there. But that is still. In my view, we are gonna normalize around that $800 million to a $1 billion range. Joseph Yanchunis: Alright. All right. Brett, well, thank you for taking my questions. Gregory A. Sigrist: Thanks, Joe. Brett L. Pharr: Thanks, Joe. Operator: Your next question from the line of Manuel Navas with Piper Sandler. Your line is now open. Please go ahead. Manuel Navas: Hey. Good evening. Gregory A. Sigrist: Hi, Manuel. With this higher rate environment, can you guys talk through and also the NIM rebound this quarter. Manuel Navas: Can you just kind of talk through what are some of the expectations from the September hike? How did. how a potential December hike could impact your EPS trajectory, And also, maybe touch on is this. How this could show up potentially down the road in credit? Gregory A. Sigrist: Let me tackle the first 1 first, then I may hand off to Brett so we can do a little tag team here. But I will I will break it down maybe just broadly on the adjusted net interest margin, how I think about, you know, headwinds, tailwinds there. And you touched on the September hike, the possibility of a December hike, but you know, more broadly, we have been fairly rate-neutral from a asset liability perspective. So each, you know, 25-basis-point rate cut or increase has been pretty close to, you know, pretty negligible. We, during the balance of 2026, did shift a little bit of new production toward floating rate loans. Particularly tied to prime. So that is put us at a moment in time at a slightly asset sensitive position. So this point, if we have a 25-basis-point raise in December or the next meeting, it is perhaps $2 million pretax, maybe a little bit more for the full year. But I point it out at this point in time because a lot of that new production came from the renewable space and the infrastructure space, and it is in the construction loans. And I think we are probably at a high watermark of where those are gonna be. So over time, as that portfolio comes down and also the treasury team's looking over the next, you know, 9-month timeline. But I think we will get the assets back to neutral, certainly over the next couple of years. So do not think there is a long term trend. Think it is a short term trend. But it is a trend that is helpful at this point in time just given where the rate environment's going. I think the other tailwind, though, and we. We have talked about this consistently, is just the middle part of the curve. You know, roughly 35% of the book in new production is fixed rate loans, which price off of the 3- to 5-year part of the curve. And with the curve--the 5-year had touched 5% and then backed off a little bit. You think about the loan portfolio, which is currently book yielding around 3.00%. And you assume that we are taking a $100 million or $150 million recycling that, that is a pretty large tailwind for us as we continue to do that. Not to mention the fixed rate loans in the book that are continuing to reprice because some of those still came on pre 2022 which has been really great. You are obviously, over time, gonna have some offsets. You know, cost of deposits will go up a little bit, but it is gonna be more than offset with the raise. With the with the rate environment. Did that make sense? I will assume yes because you might be on mute. I will hand it over to Brett. Brett L. Pharr: Yeah. I think the other part of your question is really is, what does higher rates for longer mean from a credit perspective or economic standpoint? You gotta remember our asset-based lending and working capital portfolio actually benefits during that time because the commercial traditional C and I borrower that was at a bank, now is either being pushed out of the bank or cannot get credit And so then they start looking for alternatives, and that is where we step in. And actually, during higher rate and economic stressed environments where we get the better quality credit in the asset-based lending and working capital portfolio. So I only see that kind of--it is kind of a dark view, but I only see that as a positive. When the economy slows down, we will pick up more opportunities in that space. Higher interest rates do have an impact in the energy infrastructure portfolio because you have to use a higher capital cost. It impacts the value of the tax equity throughout the life cycle of the project. So more equity will have to come in. But these projects have such high rate of return that the incremental impact of the interest rates is not going stop the projects. It will just reframe the capital that goes in upfront. So I do not expect there to be much there. And the consumer loan originations you know, our partners are operating in a space that is not prime credit. And as I often say, these people are always in a recession. And so the interest rate costs are not gonna be very material in that space. And they may be repaying it with benefits payments rather than income payments, but they will repay it anyway because of where they live and, you know, the part of the economy that you are in. So I am not worried about an economic downturn. I actually think our credit verticals are built for those kinds of things. They assume an economic downturn. Manuel Navas: Is there a certain level of rate increases that you think would start impacting the demand for your product, your partner's origination levels, and where it would impact some credit. Is it, like, 100 basis points from here? Just trying to ballpark that. Brett L. Pharr: I mean, you know, let's suppose that the prime goes up 200 basis points. That is gonna slow down commercial business. And that is exactly where we would excel. In the working capital and the asset based lending. And as I said, the 200-basis-point increase in rates in the alternative energy and electricity infrastructure arena It will change the economics But because they are so rich, they will still be valid projects. You will just structure them differently. So I do not expect that we will be impacted by a slowdown in that regard. And in fact, in some ways, we might be positively impacted by it. Manuel Navas: Okay. That. that is helpful. I appreciate that. Just about thoughts on your partner population. Do you have a sense of any that are actively pursuing national charters? Brett L. Pharr: We have had conversations where a small subset of them have talked about it and may be pursuing it. But it is 1 of the things you gotta remember if you are a private equity firm, it is very difficult to become a bank holding company. And so there is an awful lot of them that are in that category. And maybe an exception here or there, but there is not a circumstance where having any kind of material threat from a partner because of it. And part of that is just the lack of concentrations in that partner base in the first place. Gregory A. Sigrist: that is right. Manuel Navas: That was gonna be another question. I appreciate that your commentary that you are not dependent on any 1 customer. You have a sense for at some sort of metric that you can track that? what is, like, your top 3, top 5, top 10 partners? Brett L. Pharr: Is it kind of--let me give you this number. No partner represents more than 5% of Pathward's revenue. Manuel Navas: Okay. Appreciate that. Appreciate that. 1 thing--1 area that is been quite strong is the card fee line. Is the-- It kinda bounces around quarter to quarter, but there is there is very solid year over year growth. How should I think about that feline over the next year? Gregory A. Sigrist: Yep. If I heard the question on the card fee income line, and I mean, I am going to ask you. Is it related to off-balance-sheet? sheet? Yep. That is excellent. Yeah. Yeah. I think, really, what you are looking at right now is really sets the mark for going forward, and I think any variations from there are really just gonna be volume based from here with the partners we are on loading. Onboarding the pace, and the like. So I think what you are seeing now. But keep in mind too, there is always seasonality in that line. As we bring on deposits in the first quarter, spend them out in the second quarter. The December quarter, yeah, and then the second quarter. So you are gonna see the normal seasonality in that, but there is always kind of a you know, at the ebb and flow, there is always a low watermark as the tide comes in and out. Manuel Navas: And then just 1 kind of wrap-up question on credit for me. How do you view how you view the rest of the tax services kind of. you ended that for the year, kind of the charge-offs there. How do you view that next year? Do you feel like you have talked in the past about how that business performed better on credit Do you have any other kind of look back on that you can apply for next year? Brett L. Pharr: In terms of the tax services business itself? So I think we have said that for the last several years, we have continued to improve our underwriting. And that has shown up. In the numbers. We will maintain the gains we have gotten. But I doubt we will continue to improve at the same degree every year. So I would hope it is some better, but not as much better as it has been in past years. Manuel Navas: Okay. I appreciate it. I will step back into the queue. Thank you. Operator: Your next question from the line of Timothy Switzer with KBW. Your line is now open. Please go ahead. Timothy Switzer: Hey. Thanks for letting me back through the queue. Gregory, you actually just kind of answered 1 of the questions I had in terms of the seasonality. Obviously, we are going to get the bump in Q1 next quarter. But has the seasonality for the rest of the quarters changed at all? Like, for example, a really strong Q4 where it would typically be down, you know, mid to high single digits at least historically. You know? Has growth from any individual partner or, like, the onboarding of new partners changed that at all? Gregory A. Sigrist: Well, I think it is really the onboarding of, you know, new products, and then new partners, new products, and just that continued march of, you know, multithreaded opportunities. That flattens out the seasonality a bit. I think with the prepaid card business, though, you still see, you still see, you know, deposits grow in the December quarter and then you see the fee income, core fee income in the in the March quarter. I think you will always see that. But I think the continued march toward diversification of both products and partners helps to take away some of that seasonality, particularly in the fourth quarter. I think that is what you have seen when you kinda track back. There is 1 nuance, though. I mean, we talked about this last quarter a little bit. You know, we do receive some contractual, volume based incentive payments that can hit 1 quarter versus the next. And that was kind of the explanation last quarter for why when you did the year over year fiscal 2025 was a little above--or 2025 is a bit above fiscal 2026. For full year basis, we feel like we are gonna get those incentive payments, but that could skew 1 quarter to the next. That would be the only caveat to what I just said. Timothy Switzer: Gotcha. Okay. That makes sense. And then just qualitatively, are you able to kinda parse out the acceleration we have seen year over year in fiscal 2026. On the card fees? Like, how much of that is driven by new programs, new products, new partners versus older ones that are already in place in 2025? Gregory A. Sigrist: I think you are always gonna see, for the foreseeable future, growth year over year is still gonna be driven more by existing partners. And I think when you think back over the last 4 to 6 or 8 quarters, it is a combination of just, you know, they are putting on new programs, but also adding new multithreaded products to the mix. And I think that is still historically, that is probably been 75% to 80% of the uplift year over year. And part of that is, you know, the new partners typically take a bit more time to onboard plus part of which is going through the third party onboarding process which takes some time. And we talked about once we have gone through that process, it is a lot easier then to do multithreaded with new partners. But when I think out the next 12 months, I think it is still. Revenue growth is still largely gonna come from existing partners, perhaps a bit more uplift from new products with those partners, But brand new partners typically, unless it is, you know, credit which we can get uploaded a little faster, Acquiring, you can get those ramping a little faster. But if it is issuing business, that typically takes longer. it is usually--and plus, as part of the issuing, they would have to ramp into those new programs which really means you are talking the subsequent fiscal year before you really start to see uplift from that. But, you know, the partners in the pipelines have been talking about for new partner growth, that is just a tailwind for us. You know? Exiting 2027 and going into 2028 and 2029. Timothy Switzer: Gotcha. Okay. Thank you so much. Gregory A. Sigrist: You are welcome, Timothy. Thanks for coming back. Operator: We have reached the end of the Q&A session. I will now turn the call back to Brett Pharr, CEO, for closing remarks. Brett L. Pharr: Thank you for joining the call this evening. Hope you have a good night. Operator: This concludes today's call. Thank you for attending. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Pathward (CASH) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

- Interested in Pathward Financial, Inc.? Here are five stocks we like better. - Fiscal 2026 performance improved through commercial finance growth and higher payments-related fee income. Full-year net income was $175.7 million, or $8.14 per diluted share, while fourth-quarter adjusted net interest margin rose to 5.51%. - Credit problems remain concentrated in previously disclosed loans, including renewable energy projects. Nonperforming loans and leases reached 5.61%, but management expects credit costs to normalize in fiscal 2027 as those assets are resolved. - Pathward reiterated fiscal 2027 earnings guidance of $9.50 to $10 per share, while planning earlier investments in employees, technology and processes. The company also expects its securities portfolio to decline toward an $800 million-to-$1 billion range as capital shifts toward lending. - MarketBeat Week in Review – 08/24 - 08/28 Pathward Financial (NASDAQ:CASH) said its fourth-quarter and fiscal 2026 performance reflected growth in commercial finance and payments-related fee income, while the company continued to address a group of previously disclosed credit issues tied in part to renewable energy projects. Chief Executive Officer Brett Pharr said fiscal 2026 was a year of execution against the company's strategic priorities, including balance-sheet optimization, investments in technology, risk and compliance, workforce development, and client experience. He said commercial finance growth and reductions in the company's lower-yielding securities portfolio reflected a disciplined approach to capital deployment. → The AI Sell-Off Continues—These 3 Stocks Keep Raising Guidance Anyway - Pathward's Credit Scare Tests Its Comeback Story Pharr also said Pathward moved into the top 20 lenders in the Small Business Administration's 7(a) program and renewed its relationship with H&R Block through mid-2030. The company had previously announced an extension with earned-wage-access provider Clair. Chief Financial Officer Greg Sigrist said net interest income from commercial finance increased by nearly $6 million in the fourth quarter. Non-interest income rose by a double-digit percentage, led by an almost $8 million increase in card and deposit fee income, with most of that growth coming from the core payments business. → Tesla's Roadster Reveal Hints at 2 Much Bigger Moves - Will Lightning Strike Twice for These 3 October 2020 Winners? For the full fiscal year, Pathward reported net income of $175.7 million, or $8.14 per diluted share. Interest income from commercial finance increased by nearly $30 million, primarily due to growth in structured finance, Sigrist said. - Return on average assets was 2.30%. - Return on average tangible equity was 32.9%. - Loans and leases increased 9% at Sept. 30. - Adjusted net interest margin improved to 5.51% in the fourth quarter. - Loan originations increased to $2.2 billion from $1.3 billion a year earlier, largely due to credit sponsorship growth from a new contract and expanded existing partnerships. Average custodial deposits increased by more than $400 million from the prior year, even as deposits held on the balance sheet declined modestly. Pathward earns fee income on custodial deposits that is linked to the effective federal funds rate, Sigrist said. → Luxury's Middle Market Is Cracking—These 3 Stocks Could Win The company had $3.1 billion of liquidity as of Sept. 30. During the quarter, it repurchased about 282,000 shares at an average price of $88.75. Pathward repurchased more than 2 million shares during the fiscal year and had 2.8 million shares remaining under its current authorization. Pathward's nonperforming loans and leases ratio rose modestly from the prior quarter to 5.61%. Net charge-offs were $52 million in the quarter, including $20.3 million related to the commercial finance portfolio. Management said the elevated charge-offs and nonperforming loan levels remain concentrated in credits the company has already discussed, rather than reflecting deterioration across the broader portfolio. Pharr said the company continues to work through renewable energy projects and has "line of sight" to completing them, though the process takes time. Sigrist said charge-offs are tied to specific reserves taken in prior quarters and should be distinguished from the company's ongoing cost of credit. He said Pathward expects credit costs to normalize during fiscal 2027 as it works down nonperforming loans. For the commercial finance portfolio, he described an allowance level of roughly 120 to 130 basis points as a historical normalized range, subject to changes in loan-production mix. Pharr said higher interest rates could create more opportunities in Pathward's asset-based lending and working-capital businesses, as traditional commercial borrowers seek alternatives to bank credit. He also said higher rates could alter the capitalization of energy infrastructure projects but should not prevent projects with strong returns from moving forward. Pathward reiterated fiscal 2027 earnings guidance of $9.50 to $10 per share. The outlook assumes no additional interest-rate changes during the year, an effective tax rate of 18% to 22%, and secondary-market revenue of $5 million to $7 million per quarter. Guidance also incorporates expected share repurchases. Sigrist said the company expects investments in people, processes and technology to begin earlier in fiscal 2027 than in past years. Additional hiring in the December quarter is expected to raise the compensation and benefits run rate earlier in the year, while consulting spending is expected to be modestly elevated during the first half. On interest rates, Sigrist said the company had shifted some new production toward floating-rate loans tied to prime, leaving it slightly asset-sensitive at present. He estimated that a 25-basis-point rate increase could add approximately $2 million pretax for a full year, though he characterized that position as temporary as construction-related lending declines and the balance sheet returns toward a more neutral rate posture. Pharr said the company's opportunity pipeline spans new and existing partners, as well as multiple products including credit sponsorship, embedded finance and card programs. He emphasized that no individual partner accounts for more than 5% of Pathward revenue. Sigrist said growth in card fee income is expected to continue to be driven primarily by existing partners adding programs and products, though new credit sponsorship and acquiring relationships can ramp more quickly than issuing partnerships. He said issuing programs generally take longer to onboard and scale, making newer partnerships a larger potential contributor in later fiscal years. The company expects its securities portfolio, which was slightly below $1.2 billion, to settle in an $800 million to $1 billion range. Sigrist said the portfolio remains an important source of liquidity and supports seasonal tax-related funding needs, although principal runoff is generally expected to be reinvested into the loan portfolio. He added that Pathward could buy a limited amount of securities to provide balance-sheet protection in a declining-rate environment. Pathward Financial, Inc is a financial services holding company that operates primarily through its subsidiary, Pathward, National Association. Based in Sioux Falls, South Dakota, the company provides banking and financial services to consumers and businesses across the United States. Pathward's businesses include consumer banking, commercial finance, payments and tax-related financial solutions. Its offerings include prepaid and debit card programs, account and payment services, tax refund and tax-related products, and financing solutions for businesses. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "What Pathward Financial (CASH) Said on Its Q4 Earnings Call" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Pathward Financial (CASH) came out with quarterly earnings of $1.85 per share, beating the Zacks Consensus Estimate of $1.63 per share. This compares to earnings of $1.69 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +13.50%. A quarter ago, it was expected that this holding company for Pathward, N.A. would post earnings of $1.95 per share when it actually produced earnings of $1.37, delivering a surprise of -29.74%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Pathward, which belongs to the Zacks Banks - Northeast industry, posted revenues of $183.12 million for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 2.10%. This compares to year-ago revenues of $186.71 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Pathward shares have added about 4.1% since the beginning of the year versus the S&P 500's gain of 12.7%. While Pathward has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Pathward was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.66 on $183.69 million in revenues for the coming quarter and $9.63 on $864.41 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Northeast is currently in the top 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Bankwell Financial Group, Inc. (BWFG), is yet to report results for the quarter ended September 2026. The results are expected to be released on October 29. This company is expected to post quarterly earnings of $1.41 per share in its upcoming report, which represents a year-over-year change of +11%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Bankwell Financial Group, Inc.'s revenues are expected to be $33.39 million, up 17.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Pathward Financial, Inc. (CASH) : Free Stock Analysis Report Bankwell Financial Group, Inc. (BWFG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

SIOUX FALLS, S.D., October 21, 2026--(BUSINESS WIRE)--Pathward Financial, Inc. ("Pathward Financial," "Pathward," or the "Company" (Nasdaq: CASH), a U.S.-based financial holding company driven by its purpose to power financial inclusion for all, today reported its unaudited results for the fourth quarter and the fiscal year ended September 30, 2026. The Company reported net income of $38.6 million, or earnings per diluted share of $1.85, for the three months ended September 30, 2026, compared to net income of $38.8 million, or earnings per diluted share of $1.69, for the three months ended September 30, 2025. For fiscal year 2026 ("fiscal 2026"), the Company reported net income of $175.7 million, or earnings per diluted share of $8.14, compared to net income of $185.9 million, or earnings per diluted share of $7.87, for fiscal year 2025 ("fiscal 2025"). The Company also recognized return on average assets and return on average tangible equity of 2.30% and 32.89%, respectively, compared to 2.46% and 38.75%, respectively, for the prior-year period. Chief Executive Officer Brett Pharr said, "Fiscal 2026 was another important year of execution for Pathward. We successfully advanced the strategic priorities we set out to accomplish last year, and this was no small feat. We had some major wins across each area, and are very proud of the results the team delivered. While we continue to track and manage some of the credit items we mentioned last quarter, all other areas of the business yielded positive results. We extended contracts with partners, grew noninterest income, and grew net interest income in commercial finance." Financial Highlights for the Fourth Quarter of Fiscal 2026 All highlights are compared to the same fiscal quarter in the prior-year period. - Interest income from commercial finance loans increased by $5.6 million, driven by strong originations within structured finance. - Total noninterest income increased 12%, or $6.8 million, primarily due to a strong increase in card and deposit fee income. - Noninterest expense decreased 10% as a result of disciplined expense management while the Company continued to make strategic investments across people, processes, and technology in order to execute on its long-term strategy. - New loan originations nearly doubled from $1.3 billion to $2.2 billion, primarily driven by increased credit sponsorship loan originations resulting from a new contract announced during fiscal 2025, as well as growth with current partners. - The Company repurchased 281,562 shares of common stock at an average share price of $88.75. As of September 30, 2026, there were 2,845,617 shares available for repurchase under the current common stock share repurchase program. Net Interest Income Net interest income for the fourth quarter of fiscal 2026 was $117.6 million, a decrease of 8% compared to the fourth quarter of fiscal 2025. The decrease was attributable to an $11.1 million reduction in interest income from the credit sponsorship portfolio and a $3.3 million reduction in interest income from the warehouse finance portfolio. Interest income on the credit sponsorship portfolio was impacted by the sale of a portfolio in October 2025 that was previously accounted for using a gross accounting methodology, and therefore, recorded at higher yields with offsetting entries not included in net interest income. These decreases were partially offset by a $5.6 million increase in interest income from commercial finance loans and leases, driven by strong originations within structured finance. The Company's average interest-earning assets for the fourth quarter of fiscal 2026 increased by $69.9 million to $6.87 billion compared to the same quarter in fiscal 2025 due to increases in the average outstanding balances in total loans and leases and cash and fed funds sold. The increase was partially offset by a decrease in the average outstanding balance of total investments. The fourth quarter average outstanding balance of loans and leases increased $196.8 million compared to the same quarter of the prior fiscal year due to an increase in the commercial finance portfolio, partially offset by decreases in the credit sponsorship and warehouse finance portfolios. Fiscal 2026 fourth quarter net interest margin ("NIM") decreased to 6.79% from 7.46% in the fourth quarter of fiscal 2025 primarily due to the aforementioned sale of the credit sponsorship portfolio in October 2025. When including contractual, rate-related processing expense associated with deposits on the Company's balance sheet and excluding the gross interest income on credit sponsorship loans, adjusted NIM was 5.51% in the fiscal 2026 fourth quarter compared to 5.43% during the fiscal 2025 fourth quarter. See non-GAAP reconciliation table at the end of the press release. The overall reported tax-equivalent yield ("TEY") on average interest-earning assets decreased 69 basis points to 6.87% compared to the prior-year quarter. The yield on the loan and lease portfolio was 8.23% compared to 9.25% for the comparable period last year and the TEY on the securities portfolio was 2.98% compared to 3.06% over that same period. The decreases in the TEY on average interest-earning assets and the yield on the loan and lease portfolio were also primarily driven by the aforementioned sale of the credit sponsorship portfolio. The Company's cost of funds for all deposits and borrowings averaged 0.08% during the fiscal 2026 fourth quarter, as compared to 0.09% during the prior-year quarter. The Company's cost of deposits was 0.01% in the fourth quarter of fiscal 2026, as compared to 0.02% during the prior-year quarter. When including contractual, rate-related processing expense associated with deposits on the Company's balance sheet, the Company's adjusted cost of deposits was 1.40% in the fiscal 2026 fourth quarter, a decrease from 1.58% during the prior-year quarter primarily reflecting a lower rate environment. See non-GAAP reconciliation table at the end of the press release. Noninterest Income Fiscal 2026 fourth quarter noninterest income increased 12% to $65.6 million, compared to $58.8 million for the same period of the prior year. The increase was driven by increases in card and deposit fees and secondary market revenue, partially offset by decreases in rental income and gain on sale of other. Card and deposit fees excluding servicing fee income on custodial deposits increased $6.4 million, as contracts signed last year are generating growth. Servicing fee income on custodial deposits totaled $6.1 million during the 2026 fiscal fourth quarter, as compared to $7.5 million for the fiscal quarter ended June 30, 2026 and $2.6 million for the same period of the prior year. Noninterest Expense Noninterest expense decreased 10% to $129.7 million in the fourth quarter of fiscal 2026, compared to $144.8 million for the same quarter last year. The decrease was attributable to lower legal and consulting expense, partially offset by an increase in building and software expense. The Company continues to make targeted investments in our people, processes and technology. Card processing expense is primarily driven by rate-related agreements with Payments Sponsorship relationships and subject to deposit levels, floor rates, market conditions, and other performance conditions. Generally, this rate index is based on a percentage of the effective federal funds rate ("EFFR") and reprices immediately upon a change in the EFFR. Approximately 67% of the deposit portfolio was subject to these rate-related processing expenses during the fiscal 2026 fourth quarter. For the fiscal quarter ended September 30, 2026, contractual, rate-related processing expense was $23.0 million, as compared to $23.3 million for the fiscal quarter ended June 30, 2026, and $24.9 million for the fiscal quarter ended September 30, 2025. Income Tax Expense The Company recorded an income tax expense of $4.4 million, representing an effective tax rate of 10.1% for the fiscal 2026 fourth quarter, compared to an income tax expense of $9.3 million, representing an effective tax rate of 19.2%, for the fourth quarter last fiscal year. The decrease in income tax expense compared to the prior-year quarter was primarily driven by lower pre-tax income and the impact of a life insurance surrender recognized in the prior-year quarter. The Company originated $45.3 million in renewable energy leases during the fiscal 2026 fourth quarter, resulting in $13.4 million in total net investment tax credits. During the fourth quarter of fiscal 2025, the Company originated $82.1 million in renewable energy leases resulting in $15.8 million in total net investment tax credits. For fiscal 2026, the Company originated $78.2 million in renewable energy leases, compared to $95.5 million for the comparable prior-year period. Investments, Loans and Leases (Dollars in thousands) | September 30, 2026 | | June 30, 2026 | | March 31, 2026 | | December 31, 2025 | | September 30, 2025 Total investments | $ | 1,190,318 | | | $ | 1,246,718 | | | $ | 1,299,421 | | | $ | 1,338,709 | | | $ | 1,357,151 | | | | | | | | | | Loans held for sale | | | | | | | | | Term lending | | 8,019 | | | | 3,438 | | | | — | | | | 5,000 | | | | — | Lease financing | | 478 | | | | 511 | | | | 566 | | | | 619 | | | | 690 | SBA/USDA | | 18,534 | | | | 59,342 | | | | 20,811 | | | | 31,338 | | | | 15,654 | Credit sponsorship | | 47,056 | | | | 33,997 | | | | 31,695 | | | | 51,012 | | | | 163,077 | Total loans held for sale | | 74,087 | | | | 97,288 | | | | 53,072 | | | | 87,969 | | | | 179,421 | | | | | | | | | | Term lending | | 2,791,146 | | | | 2,666,977 | | | | 2,501,855 | | | | 2,506,777 | | | | 2,302,540 | Asset-based lending | | 697,151 | | | | 697,687 | | | | 660,220 | | | | 629,317 | | | | 593,265 | Factoring | | 213,889 | | | | 220,026 | | | | 213,269 | | | | 213,888 | | | | 217,501 | Lease financing | | 130,643 | | | | 120,583 | | | | 126,902 | | | | 136,505 | | | | 149,236 | SBA/USDA | | 561,557 | | | | 567,986 | | | | 536,637 | | | | 520,461 | | | | 511,488 | Other commercial finance | | 46,569 | | | | 49,510 | | | | 73,694 | | | | 140,229 | | | | 149,939 | Commercial finance | | 4,440,955 | | | | 4,322,769 | | | | 4,112,577 | | | | 4,147,177 | | | | 3,923,969 | Credit sponsorship | | 108,409 | | | | 99,430 | | | | 90,912 | | | | 132,045 | | | | 93,319 | Tax services | | 1,898 | | | | 34,770 | | | | 60,191 | | | | 62,049 | | | | 2,532 | Warehouse finance | | 527,008 | | | | 647,611 | | | | 604,642 | | | | 641,669 | | | | 645,186 | Total loans and leases | | 5,078,270 | | | | 5,104,580 | | | | 4,868,322 | | | | 4,982,940 | | | | 4,665,006 | Net deferred loan origination costs (fees) | | 6,345 | | | | 3,261 | | | | (1,157 | ) | | | (85 | ) | | | (98 | ) Total gross loans and leases | | 5,084,615 | | | | 5,107,841 | | | | 4,867,165 | | | | 4,982,855 | | | | 4,664,908 | Allowance for credit losses | | (67,321 | ) | | | (109,780 | ) | | | (98,279 | ) | | | (58,840 | ) | | | (53,319 | ) Total loans and leases, net | $ | 5,017,295 | | | $ | 4,998,061 | | | $ | 4,768,886 | | | $ | 4,924,015 | | | $ | 4,611,589 | The Company's investment security balances at September 30, 2026 totaled $1.19 billion, compared to $1.25 billion at June 30, 2026 and $1.36 billion at September 30, 2025. The year-over-year decrease was primarily related to normal paydown activity. Total gross loans and leases totaled $5.08 billion at September 30, 2026, as compared to $5.11 billion at June 30, 2026 and $4.66 billion at September 30, 2025. The drivers for the sequential quarter decrease were declines in the warehouse finance portfolio and the seasonal decrease in the tax services portfolio, partially offset by growth in the commercial finance and credit sponsorship portfolios. The year-over-year increase was primarily attributable to growth in the commercial finance portfolio, partially offset by a decrease in the warehouse finance portfolio. Commercial finance loans, which comprised 87% of the Company's loan and lease portfolio, totaled $4.44 billion at September 30, 2026, reflecting an increase of $118.2 million, or 3%, from June 30, 2026 and an increase of $517.0 million, or 13%, from September 30, 2025. The sequential quarter increase in the commercial finance portfolio was driven by a $124.2 million increase in term lending and a $10.1 million increase in lease financing. The year-over-year increase was driven by an increase of $488.6 million in term lending, an increase of $103.9 million in asset-based lending, and an increase of $50.1 million in SBA/USDA, partially offset by declines of $103.4 million in other commercial finance loans and $18.6 million in lease financing. These changes are primarily the result of the Company's efforts to maintain an optimized balance sheet. Asset Quality The Company's allowance for credit losses ("ACL") totaled $67.3 million at September 30, 2026, a decrease compared to $109.8 million at June 30, 2026 and an increase compared to $53.3 million at September 30, 2025. The sequential decrease in the ACL was due to decreases of $30.1 million, $9.0 million, and $3.2 million in the allowance related to the seasonal tax services, commercial finance, and credit sponsorship portfolios, respectively. The sequential decrease in the commercial finance portfolio was primarily driven by a reduction in specific reserves. The $14.0 million year-over-year increase in the ACL was primarily driven by an $18.5 million increase in the allowance related to the commercial finance portfolio, partially offset by a decrease in the allowance related to the credit sponsorship portfolio of $4.4 million. The following table presents the Company's ACL as a percentage of its total loans and leases. | As of the Period Ended (Unaudited) | September 30, 2026 | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 Commercial finance | 1.46 | % | 1.71 | % | 1.36 | % | 1.16 | % | 1.18 | % Credit sponsorship | 1.86 | % | 5.23 | % | 7.25 | % | 6.85 | % | 6.88 | % Tax services | 0.28 | % | 86.66 | % | 58.63 | % | 1.71 | % | — | % Warehouse finance | 0.10 | % | 0.10 | % | 0.10 | % | 0.10 | % | 0.10 | % Total loans and leases | 1.33 | % | 2.15 | % | 2.02 | % | 1.18 | % | 1.14 | % Total loans and leases excluding tax services | 1.33 | % | 1.57 | % | 1.31 | % | 1.17 | % | 1.14 | % The Company's ACL as a percentage of total loans and leases decreased to 1.33% at September 30, 2026 from 2.15% at June 30, 2026 and increased from 1.14% at September 30, 2025. The sequential decrease in the total loans and leases coverage ratio was primarily driven by a decrease in the ACL related to the commercial finance and seasonal tax services portfolios. The year-over-year increase in the total loans and leases coverage ratio was primarily driven by an increase in the ACL related to the commercial finance portfolio. Activity in the ACL for the periods presented was as follows. (Unaudited) | Three Months Ended | | Year Ended (Dollars in thousands) | September 30, 2026 | | June 30, 2026 | | September 30, 2025 | | September 30, 2026 | | September 30, 2025 Beginning balance | $ | 109,780 | | | $ | 98,279 | | | $ | 105,995 | | | $ | 53,319 | | | $ | 71,765 | (Reversal of) provision - tax services loans | | (2,539 | ) | | | (6,035 | ) | | | (660 | ) | | | 14,504 | | | | 22,091 | Provision (reversal of) - all other loans and leases | | 12,105 | | | | 33,565 | | | | (5,797 | ) | | | 71,176 | | | | 34,454 | Charge-offs - tax services loans | | (28,586 | ) | | | (1,000 | ) | | | (30,426 | ) | | | (29,586 | ) | | | (31,721 | ) Charge-offs - all other loans and leases | | (25,402 | ) | | | (17,712 | ) | | | (17,704 | ) | | | (63,288 | ) | | | (59,173 | ) Recoveries - tax services loans | | 997 | | | | 1,879 | | | | 657 | | | | 15,087 | | | | 9,628 | Recoveries - all other loans and leases | | 966 | | | | 804 | | | | 1,254 | | | | 6,109 | | | | 6,275 | Ending balance | $ | 67,321 | | | $ | 109,780 | | | $ | 53,319 | | | $ | 67,321 | | | $ | 53,319 | The Company recognized a provision for credit losses of $10.3 million for the quarter ended September 30, 2026, compared to a reversal of provision of $6.4 million for the comparable period in the prior fiscal year. The year-over-year increase was primarily due to increases in the credit sponsorship portfolio of $12.0 million and commercial finance portfolio of $6.7 million, partially offset by decreases in the tax services portfolio of $1.9 million. The increase in provision expense within the credit sponsorship portfolio was due to a provision release recognized during the prior-year quarter. The Company recognized net charge-offs of $52.0 million for the quarter ended September 30, 2026, consisting of $27.6 million in the seasonal tax services portfolio, $20.3 million in the commercial finance portfolio, and $4.1 million in the credit sponsorship portfolio. Net charge-offs were $46.2 million for the quarter ended September 30, 2025, comprised of $29.7 million, $8.9 million, and $7.5 million within the seasonal tax services, credit sponsorship, and commercial finance portfolios, respectively. The Company's past due loans and leases were as follows for the periods presented. As of September 30, 2026 | Accruing and Nonaccruing Loans and Leases | | Nonperforming Loans and Leases (Dollars in thousands) | 30-59 Days Past Due | | 60-89 Days Past Due | | > 89 Days Past Due | | Total Past Due | | Current | | Total Loans and Leases Receivable | | > 89 Days Past Due and Accruing | | Nonaccrual Balance | | Total Loans held for sale | $ | — | | $ | — | | $ | — | | $ | — | | $ | 74,087 | | $ | 74,087 | | $ | — | | $ | — | | $ | — | | | | | | | | | | | | | | | | | Commercial finance | | 15,810 | | | 49,220 | | | 120,078 | | | 185,108 | | | 4,255,847 | | | 4,440,955 | | | 32,765 | | | 254,607 | | | 287,372 Credit sponsorship | | 1,281 | | | 314 | | | 337 | | | 1,932 | | | 106,477 | | | 108,409 | | | 337 | | | — | | | 337 Tax services | | — | | | — | | | 1,598 | | | 1,598 | | | 300 | | | 1,898 | | | 1,598 | | | — | | | 1,598 Warehouse finance | | — | | | — | | | — | | | — | | | 527,008 | | | 527,008 | | | — | | | — | | | — Total loans and leases held for investment | | 17,091 | | | 49,534 | | | 122,013 | | | 188,638 | | | 4,889,632 | | | 5,078,270 | | | 34,700 | | | 254,607 | | | 289,307 | | | | | | | | | | | | | | | | | Total loans and leases | $ | 17,091 | | $ | 49,534 | | $ | 122,013 | | $ | 188,638 | | $ | 4,963,719 | | $ | 5,152,357 | | $ | 34,700 | | $ | 254,607 | | $ | 289,307 As of June 30, 2026 | Accruing and Nonaccruing Loans and Leases | | Nonperforming Loans and Leases (Dollars in thousands) | 30-59 Days Past Due | | 60-89 Days Past Due | | > 89 Days Past Due | | Total Past Due | | Current | | Total Loans and Leases Receivable | | > 89 Days Past Due and Accruing | | Nonaccrual Balance | | Total Loans held for sale | $ | — | | $ | 12,420 | | $ | — | | $ | 12,420 | | $ | 84,868 | | $ | 97,288 | | $ | — | | $ | — | | $ | — | | | | | | | | | | | | | | | | | Commercial finance | | 56,731 | | | 87,246 | | | 171,712 | | | 315,689 | | | 4,007,080 | | | 4,322,769 | | | 15,711 | | | 255,365 | | | 271,076 Credit sponsorship | | 1,425 | | | 448 | | | 3,998 | | | 5,871 | | | 93,559 | | | 99,430 | | | 3,998 | | | — | | | 3,998 Tax services | | — | | | 34,770 | | | — | | | 34,770 | | | — | | | 34,770 | | | — | | | — | | | — Warehouse finance | | — | | | — | | | — | | | — | | | 647,611 | | | 647,611 | | | — | | | — | | | — Total loans and leases held for investment | | 58,156 | | | 122,464 | | | 175,710 | | | 356,330 | | | 4,748,250 | | | 5,104,580 | | | 19,709 | | | 255,365 | | | 275,074 | | | | | | | | | | | | | | | | | Total loans and leases | $ | 58,156 | | $ | 134,884 | | $ | 175,710 | | $ | 368,750 | | $ | 4,833,118 | | $ | 5,201,868 | | $ | 19,709 | | $ | 255,365 | | $ | 275,074 The Company's nonperforming assets at September 30, 2026 were $290.4 million, representing 4.00% of total assets, compared to $277.5 million, or 3.79% of total assets, at June 30, 2026 and $101.7 million, or 1.42% of total assets, at September 30, 2025. The increase in the nonperforming assets as a percentage of total assets at September 30, 2026, compared to June 30, 2026, was primarily driven by an increase in commercial finance loans more than 89 days past due and accruing. Compared with the same period of the prior year, the increase was driven by higher nonperforming loans in the commercial finance portfolio, partially offset by lower nonperforming loans in the seasonal tax services portfolio. The Company's nonperforming loans and leases at September 30, 2026 were $289.3 million, representing 5.61% of total gross loans and leases, compared to $275.1 million, or 5.28% of total gross loans and leases, at June 30, 2026 and $99.1 million, or 2.05% of total gross loans and leases, at September 30, 2025. The primary reason for the increase in nonperforming commercial finance loans, as compared to September 30, 2025, was related to certain renewable energy construction projects with a common developer. The Company continues to work with other parties in these projects to bring them to completion. Deposits, Borrowings and Other Liabilities The average balance of total deposits and interest-bearing liabilities was $6.22 billion for the quarter ended September 30, 2026, compared to $6.27 billion for the same period in the prior fiscal year. Total average deposits for the fiscal 2026 fourth quarter decreased by $42.8 million to $6.14 billion compared to the same period in fiscal 2025. The decrease in average deposits was primarily due to decreases in noninterest-bearing deposits and money market deposits. Total end-of-period deposits decreased 3% to $5.69 billion at September 30, 2026, from $5.89 billion at September 30, 2025. The decrease in end-of-period deposits was primarily driven by a decreases in noninterest-bearing deposits of $151.6 million and $55.7 million in money market deposits, partially offset by an increase in interest-bearing checking deposits of $15.1 million. As of September 30, 2026, the Company managed $630.0 million of customer deposits at other banks in its capacity as custodian, compared to $575.0 million as of June 30, 2026 and $210.5 million as of September 30, 2025. These deposits provide the Company with the ability to earn servicing fee income, typically reflective of the EFFR. Regulatory Capital The Company and its subsidiary Pathward®, N.A. (the "Bank") remained above the federal regulatory minimum capital requirements at September 30, 2026, and continued to be classified as well-capitalized, and in good standing with the regulatory agencies. Regulatory capital ratios of the Company and the Bank are stated in the table below. Regulatory capital is not affected by the unrealized loss on accumulated other comprehensive income ("AOCI"). The securities portfolio is primarily comprised of amortizing securities that should provide consistent cash flow. The tables below include certain non-GAAP financial measures that are used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews these measures along with other measures of capital as part of its financial analysis. As of the Periods Indicated | September 30, 2026(1) | | June 30, 2026 | | March 31, 2026 | | December 31, 2025 | | September 30, 2025 Company | | | | | | | | | Tier 1 leverage capital ratio | 9.85 | % | | 9.66 | % | | 8.62 | % | | 9.51 | % | | 9.79 | % Common equity Tier 1 capital ratio | 11.83 | % | | 11.51 | % | | 12.65 | % | | 12.02 | % | | 12.70 | % Tier 1 capital ratio | 12.07 | % | | 11.74 | % | | 12.89 | % | | 12.26 | % | | 12.95 | % Total capital ratio | 13.59 | % | | 13.33 | % | | 14.52 | % | | 13.67 | % | | 14.27 | % Bank | | | | | | | | | Tier 1 leverage ratio | 10.09 | % | | 9.91 | % | | 8.85 | % | | 9.84 | % | | 10.00 | % Common equity Tier 1 capital ratio | 12.37 | % | | 12.05 | % | | 13.24 | % | | 12.67 | % | | 13.23 | % Tier 1 capital ratio | 12.37 | % | | 12.05 | % | | 13.24 | % | | 12.67 | % | | 13.23 | % Total capital ratio | 13.56 | % | | 13.31 | % | | 14.49 | % | | 13.73 | % | | 14.19 | % (1) September 30, 2026 capital ratios are preliminary pending completion and filing of the Company's and Bank's regulatory reports. The ratios presented above have been calculated under the generally applicable risk-based capital framework. The following table provides the non-GAAP financial measures used to compute certain of the ratios included in the table above, as well as a reconciliation of such non-GAAP financial measures to the most directly comparable financial measure in accordance with GAAP: | Standardized Approach(1) As of the Periods Indicated(Dollars in thousands) | September 30, 2026 | | June 30, 2026 | | March 31, 2026 | | December 31, 2025 | | September 30, 2025 Total stockholders' equity | $ | 820,355 | | | $ | 851,146 | | | $ | 850,677 | | | $ | 853,712 | | | $ | 857,454 | Adjustments: | | | | | | | | | LESS: Goodwill, net of associated deferred tax liabilities | | 283,760 | | | | 284,105 | | | | 284,471 | | | | 284,815 | | | | 285,158 | LESS: Certain other intangible assets | | 19,339 | | | | 18,699 | | | | 17,306 | | | | 17,746 | | | | 18,077 | LESS: Net deferred tax assets from operating loss and tax credit carry-forwards | | 3,136 | | | | 785 | | | | 1,207 | | | | 5,877 | | | | 5,733 | LESS: Net unrealized (losses) on available for sale securities | | (183,151 | ) | | | (138,411 | ) | | | (138,462 | ) | | | (133,516 | ) | | | (143,190 | ) LESS: Noncontrolling interest | | 194 | | | | 245 | | | | (785 | ) | | | (823 | ) | | | (591 | ) ADD: Adoption of Accounting Standards Update 2016-13 | | — | | | | — | | | | — | | | | — | | | | 1,788 | Common Equity Tier 1(1) | | 697,077 | | | | 685,723 | | | | 686,940 | | | | 679,613 | | | | 694,055 | Long-term borrowings and other instruments qualifying as Tier 1 | | 13,661 | | | | 13,661 | | | | 13,661 | | | | 13,661 | | | | 13,661 | Tier 1 minority interest not included in common equity Tier 1 capital | | 76 | | | | 115 | | | | (382 | ) | | | (437 | ) | | | (307 | ) Total Tier 1 capital | | 710,814 | | | | 699,499 | | | | 700,219 | | | | 692,837 | | | | 707,409 | Allowance for credit losses | | 70,022 | | | | 74,916 | | | | 68,278 | | | | 59,687 | | | | 52,455 | Subordinated debentures, net of issuance costs | | 19,898 | | | | 19,872 | | | | 19,846 | | | | 19,821 | | | | 19,796 | Total capital | $ | 800,734 | | | $ | 794,287 | | | $ | 788,343 | | | $ | 772,345 | | | $ | 779,660 | (1) Capital amounts and ratios are calculated in accordance with Basel III capital rules as implemented by U.S. banking regulators and reflect fully phased-in regulatory requirements applicable to the Company as of the reporting date. Conference Call The Company will host a conference call and earnings webcast with a corresponding presentation at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) on Wednesday, October 21, 2026. The live webcast of the call can be accessed from Pathward's Investor Relations website at www.pathwardfinancial.com. Telephone participants may access the conference call by dialing 1-833-461-5787 approximately 10 minutes prior to start time and reference meeting ID 841767855. The quarterly investor presentation prepared for use in connection with the Company's conference call and earnings webcast is available under the Presentations link in the Investor Relations - Events & Presentations section of the Company's website at www.pathwardfinancial.com. A webcast replay will also be archived at www.pathwardfinancial.com for one year. About Pathward Financial, Inc. Pathward Financial, Inc. (Nasdaq: CASH) is a U.S.-based financial holding company driven by its purpose to power financial inclusion. Through our subsidiary, Pathward®, N.A., we strive to increase financial availability, choice, and opportunity through payments sponsorship and lending. These capabilities provide support to individuals and businesses. Learn more at www.pathwardfinancial.com. Non-GAAP Financial Measures This press release includes certain adjusted non-GAAP financial measures, which are not calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP") and exclude the impact of certain items. Management uses these non-GAAP financial measures to evaluate the Company's performance and manage its operations and believes such measures to be helpful in understanding the Company's results of operations or financial position. These non-GAAP financial measures are intended to complement, and are not considered as alternatives to or substitutes for, the most directly comparable GAAP financial measures, as reconciled in the below tables. Additionally, such non-GAAP financial measures may not be comparable to or calculated in the same manner as similarly titled measures used by other companies. Forward-Looking Statements The Company and the Bank may from time to time make written or oral "forward-looking statements," including statements contained in this press release, the Company's filings with the Securities and Exchange Commission ("SEC"), the Company's reports to stockholders, and in other communications by the Company and the Bank, which are made in good faith by the Company pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as "may," "hope," "will," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential," "continue," "could," "future," "target," or the negative of those terms, or other words of similar meaning or similar expressions. You should carefully read statements that contain these words because they discuss our future expectations or state other "forward-looking" information. These forward-looking statements are based on information currently available to us and assumptions about future events, and include statements with respect to the Company's beliefs, expectations, estimates, and intentions, which are subject to significant risks and uncertainties, and are subject to change based on various factors, some of which are beyond the Company's control. Such risks, uncertainties and other factors may cause our actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Such statements address, among others, the following subjects: future operating results, including our performance expectations and fiscal 2027 financial guidance; our fiscal 2027 goals and strategy; including our emphasis on people, processes and technology; progress on key strategic initiatives; future performance and business prospects, including our Payments Sponsorship pipeline; our value proposition, including opportunities for revenue growth; expected results of our partnerships; impacts of our improved data analytics, underwriting and monitoring processes; impacts of our evolved operating model; expectations with respect to credit performance, expected nonperforming loan resolutions and net charge-off rates; the performance of our securities portfolio; customer retention; loan and other product demand; new products and services; credit quality; the level of net charge-offs and the adequacy of the allowance for credit losses; and technology, including impacts of technology investments. The following factors, among others, could cause the Company's financial performance and results of operations to differ materially from the expectations, estimates, and intentions expressed in such forward-looking statements: maintaining our executive management team; expected growth opportunities may not be realized or may take longer to realize than expected; our ability to successfully implement measures designed to reduce expenses and increase efficiencies; changes in trade, monetary, and fiscal policies and laws, including actual changes in interest rates and the Fed Funds rate and changes in international trade policies, tariffs, and treaties affecting imports and exports, and their related impacts on macroeconomic conditions, customer behavior, funding costs and loan and securities portfolios; changes in tax laws; trade disputes, barriers to trade or the emergence of trade restrictions; the strength of the United States' economy and the local economies in which the Company operates; adverse developments in the financial services industry generally such as bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer behavior; inflation, market, and monetary fluctuations; our liquidity and capital positions, including the sufficiency of our liquidity; the timely and efficient development of new products and services offered by the Company or its strategic partners, as well as risks (including reputational and litigation) attendant thereto, and the perceived overall value and acceptance of these products and services by users; the Bank's ability to maintain its Durbin Amendment exemption; the risks of dealing with or utilizing third parties, including, in connection with the Company's prepaid card and tax refund advance businesses; the risk of reduced volume of refund advance loans as a result of reduced customer demand for or usage of the Bank's strategic partners' refund advance products; our relationship with, and any actions, which may be initiated by our regulators, and any related increases in compliance and other costs; changes in financial services laws and regulations, including laws and regulations relating to the tax refund industry; technological changes, including, but not limited to, the protection of our electronic systems and information; the impact of acquisitions and divestitures; litigation risk; the growth of the Company's business, as well as expenses related thereto; continued maintenance by the Bank of its status as a well-capitalized institution; changes in consumer borrowing, spending and saving habits; losses from fraudulent or illegal activity; technological risks and developments and cyber threats, attacks, or events; emerging external focus among regulators and other officials related to risks in connection with the development and use of artificial intelligence; the success of the Company at maintaining its high quality asset level and managing and collecting assets of borrowers in default should problem assets increase; and the potential adverse effects of unusual and infrequently occurring events, including the impact on financial markets from geopolitical conflicts, government shutdowns, weather-related disasters, or public health events, such as pandemics, and any governmental or societal responses thereto. The foregoing list of factors is not exclusive. We caution you not to place undue reliance on these forward-looking statements. The forward-looking statements included in this press release speak only as of the date hereof. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Additional discussions of factors affecting the Company's business and prospects are reflected under the caption "Risk Factors" and in other sections of the Company's Annual Report on Form 10-K for the Company's fiscal year ended September 30, 2025, and in the Company's other filings made with the SEC. The Company expressly disclaims any intent or obligation to update, revise or clarify any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of the Company or its subsidiaries, whether as a result of new information, changed circumstances, or future events or for any other reason, except as required by applicable law. Condensed Consolidated Statements of Financial Condition (Unaudited) | | | | | | | | | (Dollars in Thousands, Except Share Data) | September 30, 2026 | | June 30, 2026 | | March 31, 2026 | | December 31, 2025 | | September 30, 2025 ASSETS | | | | | | | | | Cash and cash equivalents | $ | 162,398 | | | $ | 149,412 | | | $ | 157,602 | | | $ | 331,217 | | | $ | 120,568 | Securities available for sale, at fair value | | 1,163,947 | | | | 1,219,616 | | | | 1,271,353 | | | | 1,310,047 | | | | 1,327,843 | Securities held to maturity, at amortized cost | | 26,371 | | | | 27,101 | | | | 28,068 | | | | 28,662 | | | | 29,308 | Federal Reserve Bank and Federal Home Loan Bank stock, at cost | | 39,250 | | | | 30,915 | | | | 25,480 | | | | 24,310 | | | | 24,708 | Loans held for sale | | 74,087 | | | | 97,288 | | | | 53,072 | | | | 87,969 | | | | 179,421 | Loans and leases | | 5,084,615 | | | | 5,107,841 | | | | 4,867,165 | | | | 4,982,855 | | | | 4,664,908 | Allowance for credit losses | | (67,321 | ) | | | (109,780 | ) | | | (98,279 | ) | | | (58,840 | ) | | | (53,319 | ) Accrued interest receivable | | 35,828 | | | | 36,966 | | | | 36,127 | | | | 36,174 | | | | 38,520 | Premises, furniture, and equipment, net | | 43,748 | | | | 43,313 | | | | 42,254 | | | | 42,370 | | | | 40,632 | Rental equipment, net | | 116,661 | | | | 152,451 | | | | 146,190 | | | | 154,533 | | | | 159,446 | Goodwill and intangible assets | | 307,328 | | | | 308,023 | | | | 308,741 | | | | 309,712 | | | | 310,430 | Other assets | | 266,765 | | | | 251,227 | | | | 274,626 | | | | 311,196 | | | | 329,879 | Total assets | $ | 7,253,677 | | | $ | 7,314,373 | | | $ | 7,112,399 | | | $ | 7,560,205 | | | $ | 7,172,344 | | | | | | | | | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | LIABILITIES | | | | | | | | | Deposits | | 5,691,644 | | | | 5,950,309 | | | | 5,851,696 | | | | 6,350,394 | | | | 5,886,947 | Short-term borrowings | | 334,500 | | | | 167,500 | | | | 26,000 | | | | — | | | | 9,000 | Long-term borrowings | | 33,559 | | | | 33,533 | | | | 33,508 | | | | 33,482 | | | | 33,456 | Accrued expenses and other liabilities | | 373,619 | | | | 311,885 | | | | 350,518 | | | | 322,617 | | | | 385,487 | Total liabilities | | 6,433,322 | | | | 6,463,227 | | | | 6,261,722 | | | | 6,706,493 | | | | 6,314,890 | | | | | | | | | | STOCKHOLDERS' EQUITY | | | | | | | | | Preferred stock | | — | | | | — | | | | — | | | | — | | | | — | Common stock, $.01 par value | | 207 | | | | 210 | | | | 213 | | | | 222 | | | | 228 | Common stock, nonvoting, $.01 par value | | — | | | | — | | | | — | | | | — | | | | — | Additional paid-in capital | | 659,640 | | | | 657,682 | | | | 655,128 | | | | 651,199 | | | | 648,330 | Retained earnings | | 348,047 | | | | 339,252 | | | | 340,744 | | | | 346,529 | | | | 359,830 | Accumulated other comprehensive loss | | (187,733 | ) | | | (142,706 | ) | | | (141,086 | ) | | | (134,996 | ) | | | (145,461 | ) Treasury stock, at cost | | — | | | | (3,537 | ) | | | (3,537 | ) | | | (8,419 | ) | | | (4,882 | ) Total equity attributable to parent | | 820,161 | | | | 850,901 | | | | 851,462 | | | | 854,535 | | | | 858,045 | Noncontrolling interest | | 194 | | | | 245 | | | | (785 | ) | | | (823 | ) | | | (591 | ) Total stockholders' equity | | 820,355 | | | | 851,146 | | | | 850,677 | | | | 853,712 | | | | 857,454 | Total liabilities and stockholders' equity | $ | 7,253,677 | | | $ | 7,314,373 | | | $ | 7,112,399 | | | $ | 7,560,205 | | | $ | 7,172,344 | Condensed Consolidated Statements of Operations (Unaudited) | | | | Three Months Ended | | Year Ended (Dollars in thousands, except per share data) | September 30, 2026 | | June 30, 2026 | | September 30, 2025 | | September 30, 2026 | | September 30, 2025 Interest and dividend income: | | | | | | | | | Loans and leases, including fees | $ | 106,773 | | | $ | 101,289 | | | $ | 115,446 | | | $ | 430,666 | | | $ | 455,816 | Mortgage-backed securities | | 7,263 | | | | 7,396 | | | | 8,149 | | | | 30,061 | | | | 34,052 | Other investments | | 4,763 | | | | 5,348 | | | | 5,845 | | | | 24,203 | | | | 33,524 | | | 118,799 | | | | 114,033 | | | | 129,440 | | | | 484,930 | | | | 523,392 | Interest expense: | | | | | | | | | Deposits | | 124 | | | | 140 | | | | 283 | | | | 4,744 | | | | 5,430 | FHLB advances and other borrowings | | 1,116 | | | | 980 | | | | 1,205 | | | | 5,252 | | | | 6,168 | | | 1,240 | | | | 1,120 | | | | 1,488 | | | | 9,996 | | | | 11,598 | | | | | | | | | | Net interest income | | 117,559 | | | | 112,913 | | | | 127,952 | | | | 474,934 | | | | 511,794 | | | | | | | | | | Provision for credit loss | | 10,302 | | | | 28,309 | | | | (6,431 | ) | | | 87,457 | | | | 56,774 | | | | | | | | | | Net interest income after provision for credit loss | | 107,257 | | | | 84,604 | | | | 134,383 | | | | 387,477 | | | | 455,020 | | | | | | | | | | Noninterest income: | | | | | | | | | Refund transfer product fees | | 949 | | | | 11,209 | | | | 1,061 | | | | 47,302 | | | | 43,980 | Refund advance and other tax fee income | | (212 | ) | | | 696 | | | | (711 | ) | | | 58,129 | | | | 48,705 | Card and deposit fees | | 35,832 | | | | 34,570 | | | | 27,770 | | | | 138,068 | | | | 124,971 | Rental income | | 8,497 | | | | 9,607 | | | | 11,864 | | | | 40,671 | | | | 51,686 | (Loss) on sale of securities | | — | | | | — | | | | (2,185 | ) | | | — | | | | (25,084 | ) Gain on divestitures | | — | | | | — | | | | — | | | | — | | | | 15,044 | Secondary market revenue | | 11,340 | | | | 13,969 | | | | 10,122 | | | | 33,040 | | | | 37,022 | Gain (loss) on sale of other | | 1,301 | | | | (51 | ) | | | 3,144 | | | | 2,621 | | | | 5,151 | Other income | | 7,849 | | | | 6,731 | | | | 7,691 | | | | 27,399 | | | | 26,625 | Total noninterest income | | 65,556 | | | | 76,731 | | | | 58,756 | | | | 347,230 | | | | 328,100 | | | | | | | | | | Noninterest expense: | | | | | | | | | Compensation and benefits | | 51,793 | | | | 52,361 | | | | 50,740 | | | | 211,423 | | | | 200,495 | Refund transfer product expense | | (141 | ) | | | 2,758 | | | | 133 | | | | 11,817 | | | | 11,534 | Refund advance expense | | 10 | | | | 90 | | | | 16 | | | | 1,597 | | | | 1,241 | Card processing | | 30,172 | | | | 30,671 | | | | 32,693 | | | | 124,755 | | | | 138,443 | Building and software | | 14,551 | | | | 13,054 | | | | 11,448 | | | | 52,386 | | | | 42,094 | Operating lease equipment depreciation | | 6,984 | | | | 7,545 | | | | 10,861 | | | | 33,599 | | | | 45,636 | Legal and consulting | | 7,489 | | | | 6,122 | | | | 14,272 | | | | 24,496 | | | | 36,469 | Intangible amortization | | 695 | | | | 718 | | | | 763 | | | | 3,102 | | | | 3,456 | Impairment expense | | 749 | | | | 177 | | | | 3,325 | | | | 926 | | | | 5,915 | Other expense | | 17,384 | | | | 15,625 | | | | 20,520 | | | | 65,375 | | | | 74,784 | Total noninterest expense | | 129,686 | | | | 129,121 | | | | 144,771 | | | | 529,476 | | | | 560,067 | | | | | | | | | | Income before income tax expense | | 43,127 | | | | 32,214 | | | | 48,368 | | | | 205,231 | | | | 223,053 | | | | | | | | | | Income tax expense | | 4,372 | | | | 3,062 | | | | 9,300 | | | | 28,798 | | | | 36,266 | | | | | | | | | | Net income before noncontrolling interest | | 38,755 | | | | 29,152 | | | | 39,068 | | | | 176,433 | | | | 186,787 | Net income attributable to noncontrolling interest | | 128 | | | | 183 | | | | 265 | | | | 761 | | | | 915 | Net income attributable to parent | $ | 38,627 | | | $ | 28,969 | | | $ | 38,803 | | | $ | 175,672 | | | $ | 185,872 | | | | | | | | | | Less: Allocation of Earnings to participating securities(1) | | 38 | | | | 28 | | | | 139 | | | | 192 | | | | 688 | Net income attributable to common shareholders(1) | | 38,589 | | | | 28,941 | | | | 38,664 | | | | 175,480 | | | | 185,184 | Earnings per common share: | | | | | | | | | Basic | $ | 1.86 | | | $ | 1.37 | | | $ | 1.70 | | | $ | 8.18 | | | $ | 7.91 | Diluted | $ | 1.85 | | | $ | 1.37 | | | $ | 1.69 | | | $ | 8.14 | | | $ | 7.87 | Shares used in computing earnings per common share: | | | | | | | | | Basic | | 20,775,162 | | | | 21,065,733 | | | | 22,708,085 | | | | 21,441,203 | | | | 23,397,489 | Diluted | | 20,853,388 | | | | 21,165,826 | | | | 22,841,774 | | | | 21,550,594 | | | | 23,522,629 | (1) Amounts presented are used in the two-class earnings per common share calculation. Average Balances, Interest Rates and Yields The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and in rates. Only the yield/rate reflects tax-equivalent adjustments. Nonaccruing loans and leases have been included in the table as loans carrying a zero yield. Three Months Ended September 30, | 2026 | | 2025 (Dollars in thousands) | AverageOutstandingBalance | | InterestEarned /Paid | | Yield /Rate(1) | | AverageOutstandingBalance | | InterestEarned /Paid | | Yield /Rate(1) Interest-earning assets: | | | | | | | | | | | Cash and fed funds sold | $ | 302,519 | | $ | 1,540 | | 2.02 | % | | $ | 253,387 | | $ | 1,887 | | | 2.95 | % Mortgage-backed securities | | 1,049,469 | | | 7,263 | | 2.75 | % | | | 1,170,189 | | | 8,149 | | | 2.76 | % Tax-exempt investment securities | | 99,856 | | | 691 | | 3.47 | % | | | 110,456 | | | 756 | | | 3.44 | % Asset-backed securities | | 106,471 | | | 1,213 | | 4.52 | % | | | 140,398 | | | 1,825 | | | 5.16 | % Other investment securities | | 165,729 | | | 1,319 | | 3.16 | % | | | 176,532 | | | 1,377 | | | 3.10 | % Total investments | | 1,421,525 | | | 10,486 | | 2.98 | % | | | 1,597,575 | | | 12,107 | | | 3.06 | % Commercial finance | | 4,409,447 | | | 88,587 | | 7.97 | % | | | 3,993,526 | | | 82,939 | | | 8.24 | % Credit sponsorship | | 134,551 | | | 5,604 | | 16.52 | % | | | 252,368 | | | 16,709 | | | 26.27 | % Tax services | | 31,817 | | | 19 | | 0.23 | % | | | 34,740 | | | (84 | ) | | (0.96 | )% Warehouse finance | | 573,393 | | | 12,563 | | 8.69 | % | | | 671,802 | | | 15,882 | | | 9.38 | % Total loans and leases | | 5,149,208 | | | 106,773 | | 8.23 | % | | | 4,952,436 | | | 115,446 | | | 9.25 | % Total interest-earning assets | $ | 6,873,252 | | $ | 118,799 | | 6.87 | % | | $ | 6,803,398 | | $ | 129,440 | | | 7.56 | % Noninterest-earning assets | | 502,469 | | | | | | | 570,878 | | | | Total assets | $ | 7,375,721 | | | | | | $ | 7,374,276 | | | | | | | | | | | | | | | Interest-bearing liabilities: | | | | | | | | | | | Interest-bearing checking | $ | 1,072 | | $ | — | | 0.05 | % | | $ | 950 | | $ | — | | | 0.09 | % Savings | | 44,198 | | | 3 | | 0.03 | % | | | 45,947 | | | 7 | | | 0.06 | % Money markets | | 160,692 | | | 105 | | 0.26 | % | | | 177,225 | | | 258 | | | 0.58 | % Time deposits | | 1,974 | | | 6 | | 1.14 | % | | | 2,636 | | | 5 | | | 0.75 | % Wholesale deposits | | 1,066 | | | 10 | | 3.76 | % | | | 1,041 | | | 12 | | | 4.62 | % Total interest-bearing deposits (a) | | 209,002 | | | 124 | | 0.23 | % | | | 227,799 | | | 283 | | | 0.49 | % Overnight fed funds purchased | | 48,511 | | | 496 | | 4.06 | % | | | 48,391 | | | 571 | | | 4.69 | % Subordinated debentures | | 19,881 | | | 357 | | 7.12 | % | | | 19,779 | | | 357 | | | 7.16 | % Other borrowings | | 13,661 | | | 263 | | 7.64 | % | | | 13,661 | | | 277 | | | 8.03 | % Total borrowings | | 82,053 | | | 1,116 | | 5.40 | % | | | 81,831 | | | 1,205 | | | 5.84 | % Total interest-bearing liabilities | | 291,055 | | | 1,240 | | 1.69 | % | | | 309,630 | | | 1,488 | | | 1.91 | % Noninterest-bearing deposits (b) | | 5,933,671 | | | — | | — | % | | | 5,957,697 | | | — | | | — | % Total deposits and interest-bearing liabilities | $ | 6,224,726 | | $ | 1,240 | | 0.08 | % | | $ | 6,267,327 | | $ | 1,488 | | | 0.09 | % Other noninterest-bearing liabilities | | 309,658 | | | | | | | 293,745 | | | | Total liabilities | | 6,534,384 | | | | | | | 6,561,071 | | | | Shareholders' equity | | 841,337 | | | | | | | 813,204 | | | | Total liabilities and shareholders' equity | $ | 7,375,721 | | | | | | $ | 7,374,276 | | | | Net interest income and net interest rate spread including noninterest-bearing deposits | | | $ | 117,559 | | 6.79 | % | | | | $ | 127,952 | | | 7.47 | % | | | | | | | | | | | Net interest margin | | | | | 6.79 | % | | | | | | 7.46 | % Tax-equivalent effect | | | | | 0.01 | % | | | | | | 0.01 | % Net interest margin, tax-equivalent(2) | | | | | 6.80 | % | | | | | | 7.47 | % | | | | | | | | | | | Total cost of deposits (a+b) | | 6,142,673 | | | 124 | | 0.01 | % | | | 6,185,496 | | | 283 | | | 0.02 | % (1) Tax rate used to arrive at the TEY for the three months ended September 30, 2026 and 2025 was 21%. (2) Net interest margin expressed on a fully-taxable-equivalent basis ("net interest margin, tax-equivalent") is a non-GAAP financial measure. The tax-equivalent adjustment to net interest income recognizes the estimated income tax savings when comparing taxable and tax-exempt assets and adjusting for federal and state exemption of interest income. The Company believes that it is a standard practice in the banking industry to present net interest margin expressed on a fully taxable equivalent basis and, accordingly, believes the presentation of this non-GAAP financial measure may be useful for peer comparison purposes. Selected Financial Information | | | | | | | | | As of and For the Three Months Ended | September 30, 2026 | | June 30, 2026 | | March 31, 2026 | | December 31, 2025 | | September 30, 2025 Equity to total assets | | 11.31 | % | | | 11.64 | % | | | 11.96 | % | | | 11.29 | % | | | 11.96 | % Book value per common share outstanding | $ | 39.54 | | | $ | 40.48 | | | $ | 39.89 | | | $ | 38.51 | | | $ | 37.65 | Tangible book value per common share outstanding | $ | 24.73 | | | $ | 25.83 | | | $ | 25.41 | | | $ | 24.54 | | | $ | 24.02 | Common shares outstanding | | 20,745,540 | | | | 21,023,902 | | | | 21,327,534 | | | | 22,169,535 | | | | 22,772,570 | Nonperforming assets to total assets | | 4.00 | % | | | 3.79 | % | | | 1.68 | % | | | 1.47 | % | | | 1.42 | % Nonperforming loans and leases to total loans and leases | | 5.61 | % | | | 5.28 | % | | | 2.39 | % | | | 2.15 | % | | | 2.05 | % Net interest margin | | 6.79 | % | | | 6.59 | % | | | 6.63 | % | | | 6.95 | % | | | 7.46 | % Adjusted net interest margin(1) | | 5.51 | % | | | 5.27 | % | | | 5.32 | % | | | 5.56 | % | | | 5.43 | % Cost of deposits | | 0.01 | % | | | 0.01 | % | | | 0.25 | % | | | 0.01 | % | | | 0.02 | % Adjusted cost of deposits (2) | | 1.40 | % | | | 1.43 | % | | | 1.63 | % | | | 1.49 | % | | | 1.58 | % Return on average assets | | 2.08 | % | | | 1.57 | % | | | 3.56 | % | | | 1.87 | % | | | 2.09 | % Return on average equity | | 18.21 | % | | | 13.73 | % | | | 34.67 | % | | | 16.76 | % | | | 18.93 | % Return on average tangible equity | | 28.72 | % | | | 21.61 | % | | | 54.41 | % | | | 26.72 | % | | | 30.65 | % Full-time equivalent employees | | 1,224 | | | | 1,196 | | | | 1,181 | | | | 1,170 | | | | 1,179 | Non-GAAP Reconciliations Net Interest Margin and Cost of Deposits | At and For the Three Months Ended (Dollars in thousands) | September 30, 2026 | | June 30, 2026 | | March 31, 2026 | | December 31, 2025 | | September 30, 2025 Average interest earning assets | $ | 6,873,252 | | | $ | 6,876,094 | | | $ | 7,653,765 | | | $ | 6,812,693 | | | $ | 6,803,398 | Net interest income | $ | 117,559 | | | $ | 112,913 | | | $ | 125,124 | | | $ | 119,338 | | | $ | 127,952 | Net interest margin | | 6.79 | % | | | 6.59 | % | | | 6.63 | % | | | 6.95 | % | | | 7.46 | % Average total deposits | $ | 6,142,673 | | | $ | 6,173,468 | | | $ | 7,021,044 | | | $ | 6,173,866 | | | $ | 6,185,496 | Deposit interest expense | $ | 124 | | | $ | 140 | | | $ | 4,274 | | | $ | 206 | | | $ | 283 | Cost of deposits | | 0.01 | % | | | 0.01 | % | | | 0.25 | % | | | 0.01 | % | | | 0.02 | % | | | | | | | | | Adjusted Net Interest Margin(1) and Adjusted Cost of Deposits(2) | | | | | | | | | Average interest earning assets | $ | 6,873,252 | | | $ | 6,876,094 | | | $ | 7,653,765 | | | $ | 6,812,693 | | | $ | 6,803,398 | Net interest income | | 117,559 | | | | 112,913 | | | | 125,124 | | | | 119,338 | | | | 127,952 | Less: Contractual, rate-related processing expense associated with deposits on the Company's balance sheet | | 21,625 | | | | 21,897 | | | | 23,971 | | | | 23,013 | | | | 24,346 | Less: Gross interest income on credit sponsorship loans | | 509 | | | | 718 | | | | 814 | | | | 905 | | | | 10,456 | Adjusted net interest income | $ | 95,425 | | | $ | 90,298 | | | $ | 100,339 | | | $ | 95,420 | | | $ | 93,150 | Adjusted net interest margin(1) | | 5.51 | % | | | 5.27 | % | | | 5.32 | % | | | 5.56 | % | | | 5.43 | % Average total deposits | $ | 6,142,673 | | | $ | 6,173,468 | | | $ | 7,021,044 | | | $ | 6,173,866 | | | $ | 6,185,496 | Deposit interest expense | | 124 | | | | 140 | | | | 4,274 | | | | 206 | | | | 283 | Add: Contractual, rate-related processing expense associated with deposits on the Company's balance sheet | | 21,625 | | | | 21,897 | | | | 23,971 | | | | 23,013 | | | | 24,346 | Adjusted deposit expense | $ | 21,749 | | | $ | 22,037 | | | $ | 28,245 | | | $ | 23,219 | | | $ | 24,629 | Adjusted cost of deposits(2) | | 1.40 | % | | | 1.43 | % | | | 1.63 | % | | | 1.49 | % | | | 1.58 | % (1) Adjusted net interest margin includes contractual, rate-related processing expense associated with deposits on the Company's balance sheet and excludes the gross interest income on credit sponsorship loans. (2) Adjusted cost of deposits includes contractual, rate-related card processing expense associated with deposits on the Company's balance sheet. View source version on businesswire.com: https://www.businesswire.com/news/home/20261021438175/en/ Contacts Investor Relations contact Darby Schoenfeld, CPA SVP, Chief of Staff & Investor Relations 877-497-7497 [email protected] Media Relations contact [email protected]

Financial services company Pathward Financial (NASDAQ:CASH) will be reporting earnings this Wednesday after market close. Here's what to look for. Pathward Financial missed analysts' revenue expectations last quarter, reporting revenues of $189.7 million, down 3.1% year on year. It was a softer quarter for the company, with a significant miss of analysts' net interest income estimates and a significant miss of analysts' EPS estimates. Is Pathward Financial a buy or sell going into earnings? Read our full analysis here, it's free for active Edge members. This quarter, the market is expecting Pathward Financial's revenue to decline 4.8% year on year, a reversal from the 4.8% increase it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Pathward Financial has missed Wall Street's revenue estimates multiple times over the last two years. Looking at Pathward Financial's peers in the regional banks segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Washington Trust Bancorp delivered year-on-year revenue growth of 15%, beating analysts' expectations by 4.1%, and Independent Bank reported revenues up 7.4%, topping estimates by 0.6%. Independent Bank traded up 3.6% following the results. Read our full analysis of Washington Trust Bancorp's results here and Independent Bank's results here. Over the last year or so, investors' attention has moved from one major market theme to the next, spanning AI disruption and surging infrastructure investment to geopolitical tensions, interest rates, and the health of the broader economy. While some of the regional banks stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 5.7% on average over the last month. Pathward Financial is down 4.8% during the same time and is heading into earnings with an average analyst price target of $97.50 (compared to the current share price of $72.27). ALSO WORTH WATCHING: Nvidia's Quiet Partner. Nvidia's chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all. Every AI server needs specialized infrastructure the chip companies don't make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.