Pathward Financial, Inc. Announces Results for 2023 Fiscal Fourth Quarter and Fiscal Year 2023
- Pathward Financial reported an increase in net income for Q3 2023 compared to the same period last year. They also achieved a higher return on average assets for FY 2023. The CEO expressed satisfaction with the company's accomplishments and raised their guidance for fiscal year 2024.
- None.
The Company reported net income of
For the fiscal year ended September 30, 2023, the Company recognized adjusted net income of
CEO Brett Pharr said, “During fiscal year 2023, we focused on operations across the enterprise, growing the commercial finance loan book, and working with new and existing partners to expand their product offerings. As a result, we increased net income by
Company Highlights
- On October 5, 2023, the Company announced Greg Sigrist has been appointed Executive Vice President (“EVP”), Chief Financial Officer (“CFO”) - Designee, beginning November 1, 2023. Immediately after the filing of the Company’s Form 10-K for fiscal year 2023, Mr. Sigrist will transition to EVP, CFO, when he will succeed Glen Herrick, who will remain with the Company as EVP, Executive Advisor to the Chief Executive Officer to aid in the transition and other projects until his retirement on December 31, 2023.
- On August 25, 2023, the Company announced a new share repurchase program to repurchase up to 7,000,000 shares of the Company's outstanding common stock on or before September 30, 2028.
Financial Highlights for the 2023 Fiscal Fourth Quarter
-
Total revenue for the fourth quarter was
$161.0 million $37.8 million 31% , compared to the same quarter in fiscal 2022, driven by an increase in both net interest income and noninterest income.
-
Net interest margin ("NIM") increased 98 basis points to
6.19% for the fourth quarter from5.21% during the same period of last year, primarily driven by increased yields and an improved earnings asset mix from the continued optimization of the portfolio. When including contractual, rate-related processing expense, NIM would have been4.87% in the fiscal 2023 fourth quarter compared to4.73% during the fiscal 2022 fourth quarter. See non-GAAP reconciliation table below.
-
Total gross loans and leases at September 30, 2023 increased
$829.8 million $4.37 billion $293.2 million 7% , when compared to June 30, 2023. The increase compared to the prior year quarter was primarily due to growth in the commercial and consumer finance portfolios. The primary driver for the sequential increase was growth in commercial finance loans.
-
During the 2023 fiscal fourth quarter, the Company repurchased 311,727 shares of common stock at an average share price of
$51.29 $47.25
-
The Company is raising fiscal year 2024 GAAP earnings per diluted share guidance to a range of
$6.20 $6.70
Net Interest Income
Net interest income for the fourth quarter of fiscal 2023 was
The Company’s average interest-earning assets for the fourth fiscal quarter increased by
Fiscal 2023 fourth quarter NIM increased to
The Company's cost of funds for all deposits and borrowings averaged
Noninterest Income
Fiscal 2023 fourth quarter noninterest income increased
The increase in card and deposit fee income was primarily from servicing fee income on off-balance sheet deposits, which totaled
Noninterest Expense
Noninterest expense increased
The card processing expense increase was due to rate-related agreements with Banking as a Service ("BaaS") partners. The amount of expense paid under those agreements is based on an agreed upon rate index that varies depending on the deposit levels, floor rates, market conditions, and other performance conditions. Generally, this rate index averages between
Income Tax Expense
The Company recorded an income tax benefit of
The Company originated
Outlook
The following forward-looking statements reflect the Company’s expectations as of the date of this release and are subject to substantial uncertainty. The Company's results may be materially affected by many factors, such as changes in economic conditions and customer demand, changes in interest rates, adverse developments in the financial services industry generally, inflation, competition, and other factors detailed below under “Forward-looking Statements.”
The Company is raising fiscal year 2024 GAAP earnings per diluted share guidance to a range of
Investments, Loans and Leases
(Dollars in thousands) |
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
||||||||||
Total investments |
$ |
1,840,819 |
|
|
$ |
1,951,996 |
|
|
$ |
1,864,276 |
|
|
$ |
1,888,343 |
|
|
$ |
1,924,551 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans held for sale |
|
|
|
|
|
|
|
|
|
||||||||||
Term lending |
|
— |
|
|
|
3,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Consumer Finance |
|
77,779 |
|
|
|
84,351 |
|
|
|
24,780 |
|
|
|
17,148 |
|
|
|
21,071 |
|
Total loans held for sale |
|
77,779 |
|
|
|
87,351 |
|
|
|
24,780 |
|
|
|
17,148 |
|
|
|
21,071 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Term lending |
|
1,308,133 |
|
|
|
1,253,841 |
|
|
|
1,235,453 |
|
|
|
1,160,100 |
|
|
|
1,090,289 |
|
Asset-based lending |
|
382,371 |
|
|
|
373,160 |
|
|
|
377,965 |
|
|
|
359,516 |
|
|
|
351,696 |
|
Factoring |
|
358,344 |
|
|
|
351,133 |
|
|
|
338,884 |
|
|
|
338,594 |
|
|
|
372,595 |
|
Lease financing |
|
183,392 |
|
|
|
201,996 |
|
|
|
170,645 |
|
|
|
189,868 |
|
|
|
210,692 |
|
Insurance premium finance |
|
800,077 |
|
|
|
666,265 |
|
|
|
437,700 |
|
|
|
436,977 |
|
|
|
479,754 |
|
SBA/USDA |
|
524,750 |
|
|
|
422,389 |
|
|
|
405,612 |
|
|
|
357,084 |
|
|
|
359,238 |
|
Other commercial finance |
|
166,091 |
|
|
|
171,954 |
|
|
|
166,402 |
|
|
|
164,734 |
|
|
|
159,409 |
|
Commercial finance |
|
3,723,158 |
|
|
|
3,440,738 |
|
|
|
3,132,661 |
|
|
|
3,006,873 |
|
|
|
3,023,673 |
|
Consumer finance |
|
254,416 |
|
|
|
200,121 |
|
|
|
148,648 |
|
|
|
186,930 |
|
|
|
169,659 |
|
Tax services |
|
5,192 |
|
|
|
47,194 |
|
|
|
61,553 |
|
|
|
30,364 |
|
|
|
9,098 |
|
Warehouse finance |
|
376,915 |
|
|
|
380,458 |
|
|
|
377,036 |
|
|
|
279,899 |
|
|
|
326,850 |
|
Total loans and leases |
|
4,359,681 |
|
|
|
4,068,511 |
|
|
|
3,719,898 |
|
|
|
3,504,066 |
|
|
|
3,529,280 |
|
Net deferred loan origination costs |
|
6,435 |
|
|
|
4,388 |
|
|
|
5,718 |
|
|
|
5,664 |
|
|
|
7,025 |
|
Total gross loans and leases |
|
4,366,116 |
|
|
|
4,072,899 |
|
|
|
3,725,616 |
|
|
|
3,509,730 |
|
|
|
3,536,305 |
|
Allowance for credit losses |
|
(49,705 |
) |
|
|
(81,916 |
) |
|
|
(84,304 |
) |
|
|
(52,592 |
) |
|
|
(45,947 |
) |
Total loans and leases, net |
$ |
4,316,411 |
|
|
$ |
3,990,983 |
|
|
$ |
3,641,312 |
|
|
$ |
3,457,138 |
|
|
$ |
3,490,358 |
|
The Company's investment security balances at September 30, 2023 totaled
Total gross loans and leases totaled
Commercial finance loans, which comprised
Asset Quality
The Company’s allowance for credit losses ("ACL") totaled
The
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, 2023 |
June 30, 2023 |
March 31, 2023 |
December 31, 2022 |
September 30, 2022 |
|||||
Commercial finance |
1.26 |
% |
1.35 |
% |
1.53 |
% |
1.62 |
% |
1.46 |
% |
Consumer finance |
0.95 |
% |
0.92 |
% |
1.99 |
% |
1.54 |
% |
0.86 |
% |
Tax services |
0.06 |
% |
70.20 |
% |
53.77 |
% |
2.01 |
% |
0.05 |
% |
Warehouse finance |
0.10 |
% |
0.10 |
% |
0.10 |
% |
0.10 |
% |
0.10 |
% |
Total loans and leases |
1.14 |
% |
2.01 |
% |
2.27 |
% |
1.50 |
% |
1.30 |
% |
Total loans and leases excluding tax services |
1.14 |
% |
1.21 |
% |
1.40 |
% |
1.50 |
% |
1.30 |
% |
The Company's ACL as a percentage of total loans and leases decreased to
Activity in the allowance for credit losses for the periods presented was as follows.
(Unaudited) |
Three Months Ended |
|
Year Ended |
|||||||||||||
(Dollars in thousands) |
September 30, 2023 |
June 30, 2023 |
September 30, 2022 |
|
September 30, 2023 |
September 30, 2022 |
||||||||||
Beginning balance |
$ |
81,916 |
|
$ |
84,304 |
|
$ |
75,206 |
|
|
$ |
45,947 |
|
$ |
68,281 |
|
Provision (reversal of) - tax services loans |
|
2,945 |
|
|
(229 |
) |
|
— |
|
|
|
35,775 |
|
|
28,093 |
|
Provision (reversal of) - all other loans and leases |
|
6,124 |
|
|
2,059 |
|
|
(2,617 |
) |
|
|
21,673 |
|
|
769 |
|
Charge-offs - tax services loans |
|
(36,606 |
) |
|
(404 |
) |
|
(22,599 |
) |
|
|
(38,741 |
) |
|
(30,852 |
) |
Charge-offs - all other loans and leases |
|
(6,227 |
) |
|
(5,597 |
) |
|
(6,844 |
) |
|
|
(21,158 |
) |
|
(30,210 |
) |
Recoveries - tax services loans |
|
531 |
|
|
671 |
|
|
5 |
|
|
|
2,963 |
|
|
2,762 |
|
Recoveries - all other loans and leases |
|
1,022 |
|
|
1,112 |
|
|
2,796 |
|
|
|
3,246 |
|
|
7,104 |
|
Ending balance |
$ |
49,705 |
|
$ |
81,916 |
|
$ |
45,947 |
|
|
$ |
49,705 |
|
$ |
45,947 |
|
The Company recognized a provision for credit losses of
The Company's past due loans and leases were as follows for the periods presented.
As of September 30, 2023 |
Accruing and Nonaccruing Loans and Leases |
|
Nonperforming Loans and Leases |
|||||||||||||||||||||||
(Dollars in thousands) |
30-59
|
|
60-89
|
|
> 89
|
|
Total
|
|
Current |
|
Total Loans
|
|
> 89
|
|
Nonaccrual
|
|
Total |
|||||||||
Loans held for sale |
$ |
626 |
|
$ |
549 |
|
$ |
306 |
|
$ |
1,481 |
|
$ |
76,298 |
|
$ |
77,779 |
|
$ |
306 |
|
$ |
— |
|
$ |
306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial finance |
|
23,434 |
|
|
9,143 |
|
|
20,352 |
|
|
52,929 |
|
|
3,670,229 |
|
|
3,723,158 |
|
|
11,242 |
|
|
37,372 |
|
|
48,614 |
Consumer finance |
|
2,992 |
|
|
2,425 |
|
|
2,210 |
|
|
7,627 |
|
|
246,789 |
|
|
254,416 |
|
|
2,210 |
|
|
— |
|
|
2,210 |
Tax services |
|
— |
|
|
— |
|
|
5,082 |
|
|
5,082 |
|
|
110 |
|
|
5,192 |
|
|
5,082 |
|
|
— |
|
|
5,082 |
Warehouse finance |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
376,915 |
|
|
376,915 |
|
|
— |
|
|
— |
|
|
— |
Total loans and leases held for investment |
|
26,426 |
|
|
11,568 |
|
|
27,644 |
|
|
65,638 |
|
|
4,294,043 |
|
|
4,359,681 |
|
|
18,534 |
|
|
37,372 |
|
|
55,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total loans and leases |
$ |
27,052 |
|
$ |
12,117 |
|
$ |
27,950 |
|
$ |
67,119 |
|
$ |
4,370,341 |
|
$ |
4,437,460 |
|
$ |
18,840 |
|
$ |
37,372 |
|
$ |
56,212 |
As of June 30, 2023 |
Accruing and Nonaccruing Loans and Leases |
|
Nonperforming Loans and Leases |
|||||||||||||||||||||||
(Dollars in thousands) |
30-59
|
|
60-89
|
|
> 89
|
|
Total
|
|
Current |
|
Total Loans
|
|
> 89 Days
|
|
Nonaccrual
|
|
Total |
|||||||||
Loans held for sale |
$ |
10 |
|
$ |
— |
|
$ |
— |
|
$ |
10 |
|
$ |
87,341 |
|
$ |
87,351 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial finance |
|
35,344 |
|
|
5,934 |
|
|
13,720 |
|
|
54,998 |
|
|
3,385,740 |
|
|
3,440,738 |
|
|
6,542 |
|
|
30,170 |
|
|
36,712 |
Consumer finance |
|
2,538 |
|
|
2,050 |
|
|
2,087 |
|
|
6,675 |
|
|
193,446 |
|
|
200,121 |
|
|
2,087 |
|
|
— |
|
|
2,087 |
Tax services |
|
— |
|
|
47,194 |
|
|
— |
|
|
47,194 |
|
|
— |
|
|
47,194 |
|
|
— |
|
|
— |
|
|
— |
Warehouse finance |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
380,458 |
|
|
380,458 |
|
|
— |
|
|
— |
|
|
— |
Total loans and leases held for investment |
|
37,882 |
|
|
55,178 |
|
|
15,807 |
|
|
108,867 |
|
|
3,959,644 |
|
|
4,068,511 |
|
|
8,629 |
|
|
30,170 |
|
|
38,799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total loans and leases |
$ |
37,892 |
|
$ |
55,178 |
|
$ |
15,807 |
|
$ |
108,877 |
|
$ |
4,046,985 |
|
$ |
4,155,862 |
|
$ |
8,629 |
|
$ |
30,170 |
|
$ |
38,799 |
The Company's nonperforming assets at September 30, 2023 were
The Company's nonperforming loans and leases at September 30, 2023, were
The increase in the nonperforming assets as a percentage of total assets at September 30, 2023 compared to June 30, 2023, was driven by an increase in nonperforming loans in the commercial finance portfolio and in the seasonal tax services portfolio. When comparing the current period to the same period of the prior year, the increase in nonperforming assets was primarily due to one sizable relationship moving to nonaccrual within the commercial finance portfolio, partially offset by a decrease in nonperforming loans in the seasonal tax services portfolio and the consumer finance portfolio.
The Company has various portfolios of consumer lending and tax services loans that present unique risks that are statistically managed. Due to the unique risks associated with these portfolios, the Company monitors other credit quality indicators in their evaluation of the appropriateness of the allowance for credit losses on these portfolios, and as such, these loans are not included in the asset classification table below. The Company's loans and leases held for investment by asset classification were as follows for the periods presented.
|
Asset Classification |
|||||||||||
(Dollars in thousands) |
Pass |
Watch |
Special
|
Substandard |
Doubtful |
Total |
||||||
As of September 30, 2023 |
|
|
|
|
|
|
||||||
Commercial finance |
$ |
2,845,587 |
$ |
559,112 |
$ |
102,111 |
$ |
208,193 |
$ |
8,155 |
$ |
3,723,158 |
Warehouse finance |
|
376,915 |
|
— |
|
— |
|
— |
|
— |
|
376,915 |
Total loans and leases |
$ |
3,222,502 |
$ |
559,112 |
$ |
102,111 |
$ |
208,193 |
$ |
8,155 |
$ |
4,100,073 |
|
Asset Classification |
|||||||||||
(Dollars in thousands) |
Pass |
Watch |
Special
|
Substandard |
Doubtful |
Total |
||||||
As of June 30, 2023 |
|
|||||||||||
Commercial finance |
$ |
2,692,865 |
$ |
459,885 |
$ |
84,450 |
$ |
189,743 |
$ |
13,795 |
$ |
3,440,738 |
Warehouse finance |
|
380,458 |
|
— |
|
— |
|
— |
|
— |
|
380,458 |
Total loans and leases |
$ |
3,073,323 |
$ |
459,885 |
$ |
84,450 |
$ |
189,743 |
$ |
13,795 |
$ |
3,821,196 |
Deposits, Borrowings and Other Liabilities
Total average deposits for the fiscal 2023 fourth quarter increased by
The average balance of total deposits and interest-bearing liabilities was
Total end-of-period deposits increased
As of September 30, 2023, the Company had
As of September 30, 2023, the Company managed
Approximately
Regulatory Capital
The Company and its subsidiary Pathward®, N.A. (the "Bank") remained above the federal regulatory minimum capital requirements at September 30, 2023, 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 Company does not intend to sell these securities, or recognize the unrealized losses on its income statement, to fund future loan growth.
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,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|||||
Company |
|
|
|
|
|
|
|
|
|
|||||
Tier 1 leverage capital ratio |
8.11 |
% |
|
8.40 |
% |
|
7.53 |
% |
|
8.37 |
% |
|
8.10 |
% |
Common equity Tier 1 capital ratio |
11.25 |
% |
|
11.52 |
% |
|
12.05 |
% |
|
12.31 |
% |
|
12.07 |
% |
Tier 1 capital ratio |
11.50 |
% |
|
11.79 |
% |
|
12.35 |
% |
|
12.63 |
% |
|
12.39 |
% |
Total capital ratio |
12.84 |
% |
|
13.45 |
% |
|
14.06 |
% |
|
14.29 |
% |
|
13.88 |
% |
Bank |
|
|
|
|
|
|
|
|
|
|||||
Tier 1 leverage ratio |
8.32 |
% |
|
8.67 |
% |
|
7.79 |
% |
|
8.68 |
% |
|
8.19 |
% |
Common equity Tier 1 capital ratio |
11.81 |
% |
|
12.17 |
% |
|
12.77 |
% |
|
13.09 |
% |
|
12.55 |
% |
Tier 1 capital ratio |
11.81 |
% |
|
12.17 |
% |
|
12.77 |
% |
|
13.09 |
% |
|
12.55 |
% |
Total capital ratio |
12.76 |
% |
|
13.42 |
% |
|
14.03 |
% |
|
14.29 |
% |
|
13.57 |
% |
(1) September 30, 2023 percentages are preliminary pending completion and filing of the Company's regulatory reports. Regulatory capital ratios for periods presented reflect the Company's election of the five-year CECL transition for regulatory capital purposes. |
||||||||||||||
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,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
||||||||||
Total stockholders' equity |
$ |
650,625 |
|
|
$ |
677,721 |
|
|
$ |
673,244 |
|
|
$ |
659,133 |
|
|
$ |
645,140 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||
LESS: Goodwill, net of associated deferred tax liabilities |
|
297,679 |
|
|
|
298,092 |
|
|
|
298,390 |
|
|
|
298,788 |
|
|
|
299,186 |
|
LESS: Certain other intangible assets |
|
21,228 |
|
|
|
22,372 |
|
|
|
23,553 |
|
|
|
25,053 |
|
|
|
26,406 |
|
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards |
|
19,679 |
|
|
|
12,157 |
|
|
|
13,219 |
|
|
|
16,641 |
|
|
|
17,968 |
|
LESS: Net unrealized (losses) on available for sale securities |
|
(254,294 |
) |
|
|
(207,358 |
) |
|
|
(186,796 |
) |
|
|
(200,597 |
) |
|
|
(211,600 |
) |
LESS: Noncontrolling interest |
|
(1,005 |
) |
|
|
(631 |
) |
|
|
(551 |
) |
|
|
(207 |
) |
|
|
(30 |
) |
ADD: Adoption of Accounting Standards Update 2016-13 |
|
2,017 |
|
|
|
2,017 |
|
|
|
2,017 |
|
|
|
2,017 |
|
|
|
2,689 |
|
Common Equity Tier 1(1) |
|
569,355 |
|
|
|
555,106 |
|
|
|
527,446 |
|
|
|
521,472 |
|
|
|
515,899 |
|
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 |
|
(826 |
) |
|
|
(454 |
) |
|
|
(404 |
) |
|
|
(138 |
) |
|
|
(20 |
) |
Total Tier 1 capital |
|
582,190 |
|
|
|
568,313 |
|
|
|
540,703 |
|
|
|
534,995 |
|
|
|
529,540 |
|
Allowance for credit losses |
|
47,960 |
|
|
|
60,489 |
|
|
|
55,058 |
|
|
|
50,853 |
|
|
|
43,623 |
|
Subordinated debentures, net of issuance costs |
|
19,591 |
|
|
|
19,566 |
|
|
|
19,540 |
|
|
|
19,521 |
|
|
|
20,000 |
|
Total capital |
$ |
649,741 |
|
|
$ |
648,368 |
|
|
$ |
615,301 |
|
|
$ |
650,369 |
|
|
$ |
593,163 |
|
(1) Capital ratios were determined using the Basel III capital rules that became effective on January 1, 2015. Basel III revised the definition of capital, increased minimum capital ratios, and introduced a minimum CET1 ratio; those changes were fully phased in through the end of calendar year 2021. |
|||||||||||||||||||
The following table provides a reconciliation of tangible common equity and tangible common equity excluding AOCI, each of which is used in calculating tangible book value data, to Total Stockholders' Equity. Each of tangible common equity and tangible common equity excluding AOCI is a non-GAAP financial measure that is commonly used within the banking industry.
As of the Periods Indicated (Dollars in thousands) |
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
||||||||||
Total stockholders' equity |
$ |
650,625 |
|
|
$ |
677,721 |
|
|
$ |
673,244 |
|
|
$ |
659,133 |
|
|
$ |
645,140 |
|
Less: Goodwill |
|
309,505 |
|
|
|
309,505 |
|
|
|
309,505 |
|
|
|
309,505 |
|
|
|
309,505 |
|
Less: Intangible assets |
|
20,720 |
|
|
|
21,830 |
|
|
|
22,998 |
|
|
|
24,433 |
|
|
|
25,691 |
|
Tangible common equity |
|
320,400 |
|
|
|
346,386 |
|
|
|
340,741 |
|
|
|
325,195 |
|
|
|
309,944 |
|
Less: AOCI |
|
(255,443 |
) |
|
|
(207,896 |
) |
|
|
(187,829 |
) |
|
|
(201,690 |
) |
|
|
(213,080 |
) |
Tangible common equity excluding AOCI |
$ |
575,843 |
|
|
$ |
554,282 |
|
|
$ |
528,570 |
|
|
$ |
526,885 |
|
|
$ |
523,024 |
|
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 25, 2023. 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 1-833-470-1428 approximately 10 minutes prior to start time and reference access code 644009. A webcast replay will also be archived at www.pathwardfinancial.com for one year.
Upcoming Investor Events
-
Piper Sandler East Coast Financial Services Conference, November 16, 2023 |
Miami, FL
About Pathward Financial, Inc.
Pathward Financial, Inc.(Nasdaq: CASH) is a
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 earnings per share guidance, future effective tax rate and related performance expectations; the performance of our securities portfolio; the impact of card balances related to government stimulus programs; 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. 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; the potential adverse effects of unusual and infrequently occurring events, including the impact on financial markets from geopolitical conflicts such as the military conflicts in
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. 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, 2022, and in other filings made with the SEC. The Company expressly disclaims any intent or obligation to update 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.
Condensed Consolidated Statements of Financial Condition (Unaudited) |
|||||||||||||||||||
(Dollars in Thousands, Except Share Data) |
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents |
$ |
375,580 |
|
|
$ |
515,271 |
|
|
$ |
432,598 |
|
|
$ |
369,169 |
|
|
$ |
388,038 |
|
Securities available for sale, at fair value |
|
1,804,228 |
|
|
|
1,914,271 |
|
|
|
1,825,563 |
|
|
|
1,847,778 |
|
|
|
1,882,869 |
|
Securities held to maturity, at amortized cost |
|
36,591 |
|
|
|
37,725 |
|
|
|
38,713 |
|
|
|
40,565 |
|
|
|
41,682 |
|
Federal Reserve Bank and Federal Home Loan Bank Stock, at cost |
|
28,210 |
|
|
|
30,890 |
|
|
|
29,387 |
|
|
|
28,812 |
|
|
|
28,812 |
|
Loans held for sale |
|
77,779 |
|
|
|
87,351 |
|
|
|
24,780 |
|
|
|
17,148 |
|
|
|
21,071 |
|
Loans and leases |
|
4,366,116 |
|
|
|
4,072,899 |
|
|
|
3,725,616 |
|
|
|
3,509,730 |
|
|
|
3,536,305 |
|
Allowance for credit losses |
|
(49,705 |
) |
|
|
(81,916 |
) |
|
|
(84,304 |
) |
|
|
(52,592 |
) |
|
|
(45,947 |
) |
Accrued interest receivable |
|
23,282 |
|
|
|
22,332 |
|
|
|
22,434 |
|
|
|
20,170 |
|
|
|
17,979 |
|
Premises, furniture, and equipment, net |
|
39,160 |
|
|
|
38,601 |
|
|
|
39,735 |
|
|
|
41,029 |
|
|
|
41,710 |
|
Rental equipment, net |
|
211,750 |
|
|
|
224,212 |
|
|
|
210,844 |
|
|
|
231,129 |
|
|
|
204,371 |
|
Goodwill and intangible assets |
|
330,225 |
|
|
|
331,335 |
|
|
|
332,503 |
|
|
|
333,938 |
|
|
|
335,196 |
|
Other assets |
|
292,327 |
|
|
|
265,654 |
|
|
|
270,387 |
|
|
|
272,349 |
|
|
|
295,324 |
|
Total assets |
$ |
7,535,543 |
|
|
$ |
7,458,625 |
|
|
$ |
6,868,256 |
|
|
$ |
6,659,225 |
|
|
$ |
6,747,410 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES |
|
|
|
|
|
|
|
|
|
||||||||||
Deposits |
|
6,589,182 |
|
|
|
6,306,976 |
|
|
|
5,902,696 |
|
|
|
5,789,132 |
|
|
|
5,866,037 |
|
Short-term borrowings |
|
13,000 |
|
|
|
230,000 |
|
|
|
43,000 |
|
|
|
— |
|
|
|
— |
|
Long-term borrowings |
|
33,873 |
|
|
|
34,178 |
|
|
|
34,543 |
|
|
|
34,977 |
|
|
|
36,028 |
|
Accrued expenses and other liabilities |
|
248,863 |
|
|
|
209,750 |
|
|
|
214,773 |
|
|
|
175,983 |
|
|
|
200,205 |
|
Total liabilities |
|
6,884,918 |
|
|
|
6,780,904 |
|
|
|
6,195,012 |
|
|
|
6,000,092 |
|
|
|
6,102,270 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Common stock, |
|
262 |
|
|
|
266 |
|
|
|
271 |
|
|
|
282 |
|
|
|
288 |
|
Common stock, Nonvoting, |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
628,500 |
|
|
|
625,825 |
|
|
|
623,250 |
|
|
|
620,681 |
|
|
|
617,403 |
|
Retained earnings |
|
278,655 |
|
|
|
267,100 |
|
|
|
245,046 |
|
|
|
246,891 |
|
|
|
245,394 |
|
Accumulated other comprehensive loss |
|
(255,443 |
) |
|
|
(207,896 |
) |
|
|
(187,829 |
) |
|
|
(201,690 |
) |
|
|
(213,080 |
) |
Treasury stock, at cost |
|
(344 |
) |
|
|
(6,943 |
) |
|
|
(6,943 |
) |
|
|
(6,824 |
) |
|
|
(4,835 |
) |
Total equity attributable to parent |
|
651,630 |
|
|
|
678,352 |
|
|
|
673,795 |
|
|
|
659,340 |
|
|
|
645,170 |
|
Noncontrolling interest |
|
(1,005 |
) |
|
|
(631 |
) |
|
|
(551 |
) |
|
|
(207 |
) |
|
|
(30 |
) |
Total stockholders’ equity |
|
650,625 |
|
|
|
677,721 |
|
|
|
673,244 |
|
|
|
659,133 |
|
|
|
645,140 |
|
Total liabilities and stockholders’ equity |
$ |
7,535,543 |
|
|
$ |
7,458,625 |
|
|
$ |
6,868,256 |
|
|
$ |
6,659,225 |
|
|
$ |
6,747,410 |
|
Condensed Consolidated Statements of Operations (Unaudited) |
|||||||||||||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
(Dollars in Thousands, Except Share and Per Share Data) |
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
||||||||||
Interest and dividend income: |
|
|
|
|
|
|
|
|
|
||||||||||
Loans and leases, including fees |
$ |
90,085 |
|
|
$ |
81,242 |
|
|
$ |
64,963 |
|
|
$ |
323,602 |
|
$ |
268,078 |
|
|
Mortgage-backed securities |
|
10,225 |
|
|
|
10,234 |
|
|
|
10,155 |
|
|
|
41,197 |
|
|
|
26,846 |
|
Other investments |
|
9,332 |
|
|
|
7,870 |
|
|
|
5,104 |
|
|
|
33,936 |
|
|
|
17,272 |
|
|
|
109,642 |
|
|
|
99,346 |
|
|
|
80,222 |
|
|
|
398,735 |
|
|
|
312,196 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
||||||||||
Deposits |
|
1,954 |
|
|
|
164 |
|
|
|
99 |
|
|
|
4,356 |
|
|
|
500 |
|
FHLB advances and other borrowings |
|
2,754 |
|
|
|
1,717 |
|
|
|
363 |
|
|
|
6,518 |
|
|
|
4,372 |
|
|
|
4,708 |
|
|
|
1,881 |
|
|
|
462 |
|
|
|
10,874 |
|
|
|
4,872 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income |
|
104,934 |
|
|
|
97,465 |
|
|
|
79,760 |
|
|
|
387,861 |
|
|
|
307,324 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Provision for (reversal of) credit losses |
|
9,042 |
|
|
|
1,773 |
|
|
|
(2,648 |
) |
|
|
57,354 |
|
|
|
28,538 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income after provision for credit losses |
|
95,892 |
|
|
|
95,692 |
|
|
|
82,408 |
|
|
|
330,507 |
|
|
|
278,786 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest income: |
|
|
|
|
|
|
|
|
|
||||||||||
Refund transfer product fees |
|
308 |
|
|
|
8,262 |
|
|
|
1,135 |
|
|
|
39,452 |
|
|
|
39,809 |
|
Refund advance fee income |
|
(252 |
) |
|
|
(927 |
) |
|
|
44 |
|
|
|
37,433 |
|
|
|
40,557 |
|
Card and deposit fees |
|
31,233 |
|
|
|
39,708 |
|
|
|
28,908 |
|
|
|
150,746 |
|
|
|
105,733 |
|
Rental income |
|
14,562 |
|
|
|
13,980 |
|
|
|
12,024 |
|
|
|
54,190 |
|
|
|
46,558 |
|
Gain (loss) on sale of securities |
|
— |
|
|
|
9 |
|
|
|
(1,882 |
) |
|
|
91 |
|
|
|
(1,287 |
) |
Gain on sale of trademarks |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,000 |
|
|
|
50,000 |
|
Gain (loss) on sale of other |
|
2,006 |
|
|
|
812 |
|
|
|
(3,319 |
) |
|
|
2,572 |
|
|
|
(4,920 |
) |
Other income |
|
8,194 |
|
|
|
5,889 |
|
|
|
6,546 |
|
|
|
22,115 |
|
|
|
17,357 |
|
Total noninterest income |
|
56,051 |
|
|
|
67,733 |
|
|
|
43,456 |
|
|
|
316,599 |
|
|
|
293,807 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest expense: |
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits |
|
46,352 |
|
|
|
47,402 |
|
|
|
42,762 |
|
|
|
184,318 |
|
|
|
171,126 |
|
Refund transfer product expense |
|
28 |
|
|
|
1,727 |
|
|
|
52 |
|
|
|
9,723 |
|
|
|
8,908 |
|
Refund advance expense |
|
(6 |
) |
|
|
239 |
|
|
|
1 |
|
|
|
1,863 |
|
|
|
2,157 |
|
Card processing |
|
29,549 |
|
|
|
26,342 |
|
|
|
15,718 |
|
|
|
105,498 |
|
|
|
38,785 |
|
Occupancy and equipment expense |
|
9,274 |
|
|
|
8,595 |
|
|
|
9,064 |
|
|
|
34,691 |
|
|
|
34,909 |
|
Operating lease equipment depreciation |
|
10,846 |
|
|
|
10,517 |
|
|
|
9,306 |
|
|
|
45,710 |
|
|
|
35,636 |
|
Legal and consulting |
|
7,633 |
|
|
|
5,089 |
|
|
|
13,355 |
|
|
|
27,102 |
|
|
|
40,634 |
|
Intangible amortization |
|
1,110 |
|
|
|
1,168 |
|
|
|
1,397 |
|
|
|
4,971 |
|
|
|
6,585 |
|
Impairment expense |
|
— |
|
|
|
2,749 |
|
|
|
— |
|
|
|
3,273 |
|
|
|
670 |
|
Other expense |
|
13,416 |
|
|
|
10,750 |
|
|
|
11,375 |
|
|
|
47,826 |
|
|
|
45,865 |
|
Total noninterest expense |
|
118,202 |
|
|
|
114,578 |
|
|
|
103,030 |
|
|
|
464,975 |
|
|
|
385,275 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income tax expense |
|
33,741 |
|
|
|
48,847 |
|
|
|
22,834 |
|
|
|
182,131 |
|
|
|
187,318 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income tax expense (benefit) |
|
(2,672 |
) |
|
|
3,243 |
|
|
|
(1,272 |
) |
|
|
16,324 |
|
|
|
27,964 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income before noncontrolling interest |
|
36,413 |
|
|
|
45,604 |
|
|
|
24,106 |
|
|
|
165,807 |
|
|
|
159,354 |
|
Net income attributable to noncontrolling interest |
|
507 |
|
|
|
508 |
|
|
|
686 |
|
|
|
2,192 |
|
|
|
2,968 |
|
Net income attributable to parent |
$ |
35,906 |
|
|
$ |
45,096 |
|
|
$ |
23,420 |
|
|
$ |
163,615 |
|
|
$ |
156,386 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Less: Allocation of Earnings to participating securities(1) |
|
531 |
|
|
|
690 |
|
|
|
393 |
|
|
|
2,445 |
|
|
|
2,566 |
|
Net income attributable to common shareholders(1) |
|
35,375 |
|
|
|
44,406 |
|
|
|
23,027 |
|
|
|
161,170 |
|
|
|
153,821 |
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
$ |
1.37 |
|
|
$ |
1.69 |
|
|
$ |
0.81 |
|
|
$ |
6.01 |
|
|
$ |
5.26 |
|
Diluted |
$ |
1.36 |
|
|
$ |
1.68 |
|
|
$ |
0.81 |
|
|
$ |
5.99 |
|
|
$ |
5.26 |
|
Shares used in computing earnings per common share: |
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
25,883,807 |
|
|
|
26,346,693 |
|
|
|
28,581,236 |
|
|
|
26,833,079 |
|
|
|
29,227,071 |
|
Diluted |
|
25,991,449 |
|
|
|
26,447,032 |
|
|
|
28,581,236 |
|
|
|
26,925,606 |
|
|
|
29,232,247 |
|
(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, |
2023 |
|
2022 |
||||||||||||||||||
(Dollars in thousands) |
Average
|
|
Interest
|
|
Yield /
|
|
Average
|
|
Interest
|
|
Yield /
|
||||||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and fed funds sold |
$ |
230,032 |
|
$ |
2,425 |
|
|
4.18 |
% |
|
$ |
275,344 |
|
$ |
1,467 |
|
|
2.11 |
% |
||
Mortgage-backed securities |
|
1,514,318 |
|
|
|
10,225 |
|
|
2.68 |
% |
|
|
1,583,415 |
|
|
|
10,155 |
|
|
2.54 |
% |
Tax exempt investment securities |
|
141,328 |
|
|
|
964 |
|
|
3.43 |
% |
|
|
165,718 |
|
|
|
990 |
|
|
3.00 |
% |
Asset-backed securities |
|
260,460 |
|
|
|
3,656 |
|
|
5.57 |
% |
|
|
167,053 |
|
|
|
854 |
|
|
2.03 |
% |
Other investment securities |
|
289,980 |
|
|
|
2,287 |
|
|
3.13 |
% |
|
|
263,615 |
|
|
|
1,792 |
|
|
2.70 |
% |
Total investments |
|
2,206,086 |
|
|
|
17,132 |
|
|
3.13 |
% |
|
|
2,179,801 |
|
|
|
13,791 |
|
|
2.56 |
% |
Commercial finance |
|
3,543,353 |
|
|
|
74,157 |
|
|
8.30 |
% |
|
|
2,960,988 |
|
|
|
54,325 |
|
|
7.28 |
% |
Consumer finance |
|
312,292 |
|
|
|
7,125 |
|
|
9.05 |
% |
|
|
234,295 |
|
|
|
4,128 |
|
|
6.99 |
% |
Tax services |
|
44,192 |
|
|
|
(147 |
) |
|
(1.32 |
)% |
|
|
35,484 |
|
|
|
(148 |
) |
|
(1.65 |
)% |
Warehouse finance |
|
388,230 |
|
|
|
8,950 |
|
|
9.15 |
% |
|
|
387,910 |
|
|
|
6,658 |
|
|
6.81 |
% |
Total loans and leases |
|
4,288,067 |
|
|
|
90,085 |
|
|
8.33 |
% |
|
|
3,618,678 |
|
|
|
64,963 |
|
|
7.12 |
% |
Total interest-earning assets |
$ |
6,724,185 |
|
|
$ |
109,642 |
|
|
6.48 |
% |
|
$ |
6,073,822 |
|
|
$ |
80,222 |
|
|
5.26 |
% |
Noninterest-earning assets |
|
566,890 |
|
|
|
|
|
|
|
657,498 |
|
|
|
|
|
||||||
Total assets |
$ |
7,291,075 |
|
|
|
|
|
|
$ |
6,731,321 |
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing checking |
$ |
364 |
|
|
$ |
— |
|
|
0.33 |
% |
|
$ |
380 |
|
|
$ |
— |
|
|
0.33 |
% |
Savings |
|
58,907 |
|
|
|
6 |
|
|
0.04 |
% |
|
|
67,937 |
|
|
|
6 |
|
|
0.04 |
% |
Money markets |
|
156,671 |
|
|
|
237 |
|
|
0.60 |
% |
|
|
104,570 |
|
|
|
55 |
|
|
0.21 |
% |
Time deposits |
|
5,589 |
|
|
|
3 |
|
|
0.19 |
% |
|
|
7,969 |
|
|
|
5 |
|
|
0.23 |
% |
Wholesale deposits |
|
128,155 |
|
|
|
1,708 |
|
|
5.29 |
% |
|
|
6,479 |
|
|
|
32 |
|
|
1.98 |
% |
Total interest-bearing deposits |
|
349,686 |
|
|
|
1,954 |
|
|
2.22 |
% |
|
|
187,335 |
|
|
|
99 |
|
|
0.21 |
% |
Overnight fed funds purchased |
|
148,837 |
|
|
|
2,077 |
|
|
5.54 |
% |
|
|
15,511 |
|
|
|
100 |
|
|
2.56 |
% |
Subordinated debentures |
|
19,574 |
|
|
|
357 |
|
|
7.23 |
% |
|
|
1,739 |
|
|
|
29 |
|
|
6.72 |
% |
Other borrowings |
|
14,484 |
|
|
|
320 |
|
|
8.76 |
% |
|
|
16,397 |
|
|
|
234 |
|
|
5.66 |
% |
Total borrowings |
|
182,895 |
|
|
|
2,754 |
|
|
5.97 |
% |
|
|
33,647 |
|
|
|
363 |
|
|
4.29 |
% |
Total interest-bearing liabilities |
|
532,581 |
|
|
|
4,708 |
|
|
3.51 |
% |
|
|
220,981 |
|
|
|
462 |
|
|
0.83 |
% |
Noninterest-bearing deposits |
|
5,855,248 |
|
|
|
— |
|
|
— |
% |
|
|
5,577,713 |
|
|
|
— |
|
|
— |
% |
Total deposits and interest-bearing liabilities |
$ |
6,387,829 |
|
|
$ |
4,708 |
|
|
0.29 |
% |
|
$ |
5,798,694 |
|
|
$ |
462 |
|
|
0.03 |
% |
Other noninterest-bearing liabilities |
|
223,242 |
|
|
|
|
|
|
|
201,711 |
|
|
|
|
|
||||||
Total liabilities |
|
6,611,071 |
|
|
|
|
|
|
|
6,000,404 |
|
|
|
|
|
||||||
Shareholders' equity |
|
680,004 |
|
|
|
|
|
|
|
730,916 |
|
|
|
|
|
||||||
Total liabilities and shareholders' equity |
$ |
7,291,075 |
|
|
|
|
|
|
$ |
6,731,321 |
|
|
|
|
|
||||||
Net interest income and net interest rate spread including noninterest-bearing deposits |
|
|
$ |
104,934 |
|
|
6.19 |
% |
|
|
|
$ |
79,760 |
|
|
5.23 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest margin |
|
|
|
|
6.19 |
% |
|
|
|
|
|
5.21 |
% |
||||||||
Tax-equivalent effect |
|
|
|
|
0.02 |
% |
|
|
|
|
|
0.02 |
% |
||||||||
Net interest margin, tax-equivalent(2) |
|
|
|
|
6.21 |
% |
|
|
|
|
|
5.23 |
% |
||||||||
(1) Tax rate used to arrive at the TEY for the three months ended September 30, 2023 and 2022 was |
|||||||||||||||||||||
| (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,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
||||||||||
Equity to total assets |
|
8.63 |
% |
|
|
9.09 |
% |
|
|
9.80 |
% |
|
|
9.90 |
% |
|
|
9.56 |
% |
Book value per common share outstanding |
$ |
24.85 |
|
|
$ |
25.54 |
|
|
$ |
24.88 |
|
|
$ |
23.36 |
|
|
$ |
22.41 |
|
Tangible book value per common share outstanding |
$ |
12.24 |
|
|
$ |
13.05 |
|
|
$ |
12.59 |
|
|
$ |
11.53 |
|
|
$ |
10.77 |
|
Tangible book value per common share outstanding excluding AOCI |
$ |
21.99 |
|
|
$ |
20.89 |
|
|
$ |
19.54 |
|
|
$ |
18.68 |
|
|
$ |
18.17 |
|
Common shares outstanding |
|
26,183,583 |
|
|
|
26,539,272 |
|
|
|
27,055,727 |
|
|
|
28,211,239 |
|
|
|
28,788,124 |
|
Nonperforming assets to total assets |
|
0.77 |
% |
|
|
0.55 |
% |
|
|
0.44 |
% |
|
|
0.68 |
% |
|
|
0.46 |
% |
Nonperforming loans and leases to total loans and leases |
|
1.26 |
% |
|
|
0.93 |
% |
|
|
0.76 |
% |
|
|
1.16 |
% |
|
|
0.82 |
% |
Net interest margin |
|
6.19 |
% |
|
|
6.18 |
% |
|
|
6.12 |
% |
|
|
5.62 |
% |
|
|
5.21 |
% |
Net interest margin, tax-equivalent |
|
6.21 |
% |
|
|
6.20 |
% |
|
|
6.14 |
% |
|
|
5.64 |
% |
|
|
5.23 |
% |
Return on average assets |
|
1.97 |
% |
|
|
2.61 |
% |
|
|
2.99 |
% |
|
|
1.71 |
% |
|
|
1.39 |
% |
Return on average equity |
|
21.12 |
% |
|
|
26.26 |
% |
|
|
32.68 |
% |
|
|
17.18 |
% |
|
|
12.82 |
% |
Full-time equivalent employees |
|
1,193 |
|
|
|
1,186 |
|
|
|
1,164 |
|
|
|
1,150 |
|
|
|
1,141 |
|
Non-GAAP Reconciliations |
||||||||||||||||
Adjusted Net Income and Adjusted Earnings Per Share |
At and For the Three Months Ended |
|
At and For the Year Ended |
|||||||||||||
(Dollars in Thousands, Except Share and Per Share Data) |
September 30,
|
June 30,
|
September 30,
|
|
September 30,
|
September 30,
|
||||||||||
Net Income - GAAP |
$ |
35,906 |
$ |
45,096 |
|
$ |
23,420 |
|
|
$ |
163,615 |
|
$ |
156,386 |
||
Less: Gain on sale of trademarks |
|
— |
|
|
— |
|
|
— |
|
|
|
10,000 |
|
|
50,000 |
|
Less: Loss on disposal of certain mobile solar generators |
|
— |
|
|
— |
|
|
— |
|
|
|
(1,993 |
) |
|
— |
|
Add: Accelerated depreciation on certain mobile solar generators |
|
— |
|
|
— |
|
|
— |
|
|
|
4,822 |
|
|
— |
|
Add: Rebranding expenses |
|
— |
|
|
— |
|
|
6,899 |
|
|
|
3,737 |
|
|
13,148 |
|
Add: Separation related expenses |
|
— |
|
|
— |
|
|
1,029 |
|
|
|
11 |
|
|
5,109 |
|
Add: Impairment on Venture Capital investments |
|
— |
|
|
2,749 |
|
|
— |
|
|
|
3,249 |
|
|
— |
|
Add: Income tax effect resulting from the above listed items |
|
— |
|
|
(687 |
) |
|
(1,029 |
) |
|
|
(942 |
) |
|
8,936 |
|
Adjusted net income |
$ |
35,906 |
|
$ |
47,158 |
|
$ |
30,319 |
|
|
$ |
166,485 |
|
$ |
133,579 |
|
Less: Adjusted allocation of earnings to participating securities |
|
531 |
|
|
722 |
|
|
508 |
|
|
|
2,488 |
|
|
2,191 |
|
Adjusted Net income attributable to common shareholders |
|
35,375 |
|
|
46,436 |
|
|
29,811 |
|
|
|
163,997 |
|
|
131,388 |
|
Weighted average diluted common shares outstanding |
|
25,991,449 |
|
|
26,447,032 |
|
|
28,581,236 |
|
|
|
26,925,606 |
|
|
29,232,247 |
|
Adjusted earnings per common share - diluted |
$ |
1.36 |
|
$ |
1.76 |
|
$ |
1.04 |
|
|
$ |
6.09 |
|
$ |
4.49 |
|
Net Interest Margin and Cost of Deposits |
At and For the Three Months Ended |
||||||||
(Dollars in thousands) |
September 30, 2023 |
June 30, 2023 |
September 30, 2022 |
||||||
Average interest earning assets |
$ |
6,724,185 |
|
$ |
6,326,750 |
|
$ |
6,073,822 |
|
Net interest income |
$ |
104,935 |
|
$ |
97,465 |
|
$ |
79,760 |
|
Net interest margin |
|
6.19 |
% |
|
6.18 |
% |
|
5.21 |
% |
Quarterly average total deposits |
$ |
6,204,934 |
|
$ |
5,895,242 |
|
$ |
5,765,047 |
|
Deposit interest expense |
$ |
1,954 |
|
$ |
164 |
|
$ |
99 |
|
Cost of deposits |
|
0.12 |
% |
|
0.01 |
% |
|
0.01 |
% |
|
|
|
|
||||||
Adjusted Net Interest Margin and Adjusted Cost of Deposits |
|
|
|
||||||
Average interest earning assets |
$ |
6,724,185 |
|
$ |
6,326,750 |
|
$ |
6,073,822 |
|
Net interest income |
$ |
104,935 |
|
$ |
97,465 |
|
$ |
79,760 |
|
Less: Contractual, rate-related processing expense |
$ |
22,473 |
|
$ |
20,528 |
|
$ |
7,372 |
|
Adjusted net interest income |
$ |
82,462 |
|
$ |
76,937 |
|
$ |
72,388 |
|
Adjusted net interest margin |
|
4.87 |
% |
|
4.88 |
% |
|
4.73 |
% |
Average total deposits |
$ |
6,204,934 |
|
$ |
5,895,242 |
|
$ |
5,765,047 |
|
Deposit interest expense |
$ |
1,954 |
|
$ |
164 |
|
$ |
99 |
|
Add: Contractual, rate-related processing expense |
$ |
22,473 |
|
$ |
20,528 |
|
$ |
7,372 |
|
Adjusted deposit expense |
$ |
24,427 |
|
$ |
20,692 |
|
$ |
7,471 |
|
Adjusted cost of deposits |
|
1.56 |
% |
|
1.41 |
% |
|
0.52 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20231025949337/en/
Investor Relations Contact
Darby Schoenfeld, CPA
SVP, Investor Relations
877-497-7497
investorrelations@pathward.com
Media Relations Contact
mediarelations@pathward.com
Source: Pathward Financial, Inc.
FAQ
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