Pathward Financial, Inc. Announces Results for 2024 Fiscal Second Quarter
- Net income for the 2024 fiscal second quarter was $65.3 million, or $2.56 per share, compared to $54.8 million, or $1.99 per share, in the same period last year.
- Total revenue for the quarter was $247.2 million, an 8% increase from the previous year.
- Gross loans and leases increased to $4.41 billion, with growth across all loan portfolios.
- CEO Brett Pharr emphasized the focus on risk-adjusted returns and enhancements in Banking as a Service offerings.
- The company is narrowing its fiscal year 2024 GAAP earnings per diluted share guidance to a range of $6.30 to $6.60.
- Noninterest expense increased by 10% to $140.4 million for the fiscal 2024 second quarter.
- Card and deposit fee income decreased, primarily due to servicing fee income on off-balance sheet deposits.
- Income tax expense increased to $15.2 million, with an effective tax rate of 18.9% for the second quarter.
- Contractual, rate-related processing expenses for NIM would have been 4.65% in the fiscal 2024 second quarter, compared to 4.89% in the fiscal 2023 second quarter.
Insights
Examining the net income increase from $54.8 million to $65.3 million highlights a solid growth trajectory for Pathward Financial. This is bolstered by an uptick in earnings per share (EPS), ascending from $1.99 to $2.56 year-over-year. Such a notable rise in EPS often signals a company's increasing profitability and can be a positive driver for stock valuation. However, investors should consider the impact of non-recurring items that may have influenced adjusted net income figures.
The net interest margin (NIM) climb, albeit modest, suggests efficiency in managing interest-earning assets and liabilities. A NIM of 6.23% is quite robust by current banking standards, often hovering around 3% for many institutions. Nevertheless, the adjusted NIM figure that accounts for rate-related card processing expenses underscores the importance of scrutinizing operational costs which have risen in a higher rate environment.
Investors would be prudent to assess the share repurchase programs as they can indicate management's belief in undervalued stock. However, the dynamic between share repurchases and stock liquidity is complex; a decrease in outstanding shares tends to improve EPS, but it can also reduce the stock's market liquidity.
The 8% year-over-year revenue increase is significant, reflecting the company's capacity to grow its income streams in a competitive financial landscape. The expansion of gross loans and leases is indicative of aggressive lending practices, which can be lucrative yet also warrant vigilant risk analysis.
The tax services product income surge of 24% suggests effective monetization of this vertical. As this aligns with the core purpose of financial inclusion that the CEO emphasized, it can resonate positively with socially conscious investors. Moreover, the origination of $1.56 billion in refund advance loans, an increase from the prior tax season, points to their competitive edge in tax-related financial products. Nevertheless, a marginal increase in tax services product revenue implies that while product uptake is high, the revenue scaling is not proportionate, possibly due to competitive pricing or higher associated costs.
The reduction in the provision for credit losses reflects positively on the company's credit risk management. Enhancements in data analytics and underwriting processes have likely contributed to this outcome. This improvement not only helps in freeing up capital that can be utilized for further lending but also instills confidence in investors regarding the company's credit quality.
The increase in noninterest expense by 10%, particularly in card processing and compensation, could potentially squeeze margins if not matched by proportional revenue growth in future quarters. Investors should monitor whether these expenses lead to sustainable growth or merely increased costs without corresponding returns.
CEO Brett Pharr said, “We continue to produce strong results by focusing on risk adjusted returns, enhancing our Banking as a Service offerings, and spending the off-season in tax services improving our data analytics, underwriting and monitoring processes. We delivered significant growth in net income and earnings per share through solid performance across the enterprise. The Pathward team continues to perform by maintaining our culture, focusing on risk and compliance, working closely with our partners, and embodying our purpose of financial inclusion. I am excited to be a part of this company and for what we can create in the future.”
Company Highlights
- On February 27, 2024, the Board of Directors (the "Board") of Pathward Financial appointed Neeraj Mehta as a member of the Board.
- On April 3, 2024, Pathward®, N.A. announced it became Certified™ by Great Place to Work® for the second year in a row. Great Place to Work describes itself as the global authority on workplace culture, employee experience, and the leadership behaviors proven to deliver market-leading revenue, employee retention and increased innovation.
Financial Highlights for the 2024 Fiscal Second Quarter
-
Total revenue for the second quarter was
$247.2 million $18.8 million 8% , compared to the same quarter in fiscal 2023, driven by an increase in both net interest income and noninterest income. -
Net interest margin ("NIM") increased 11 basis points to
6.23% for the second quarter from6.12% during the same period last year, primarily driven by increased yields on earning assets and an improved earning asset mix from the continued optimization of the portfolio. When including contractual, rate-related processing expense, NIM would have been4.65% in the fiscal 2024 second quarter compared to4.89% during the fiscal 2023 second quarter due to increases in rate-related card processing expenses from a higher rate environment. Servicing fee income on off-balance sheet deposits is not included in this calculation. See non-GAAP reconciliation table below. -
Total gross loans and leases at March 31, 2024 increased
$683.8 million $4.41 billion $16.9 million -
During the 2024 fiscal second quarter, the Company repurchased 764,185 shares of common stock at an average share price of
$51.20 $49.47 -
The Company is narrowing its fiscal year 2024 GAAP earnings per diluted share guidance to a range of
$6.30 $6.60
Tax Season
For the six months ended March 31, 2024, total tax services product revenue was
Provision for credit losses for tax services portfolio decreased
Total tax services product income, net of losses and direct product expenses, increased
For the 2024 tax season through March 31, 2024, Pathward originated
Net Interest Income
Net interest income for the second quarter of fiscal 2024 was
The Company’s average interest-earning assets for the second quarter of fiscal 2024 increased by
Fiscal 2024 second quarter NIM increased to
The Company's cost of funds for all deposits and borrowings averaged
Noninterest Income
Fiscal 2024 second quarter noninterest income increased
The period-over-period decrease in card and deposit fee income was primarily related to 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 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 is based on a percentage of the Effective Federal Funds Rate ("EFFR") and reprices immediately upon a change in the EFFR. Approximately
Income Tax Expense
The Company recorded income tax expense 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 narrowing its fiscal year 2024 GAAP earnings per diluted share guidance to a range of
Investments, Loans and Leases
(Dollars in thousands) |
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
||||||||||
Total investments |
$ |
1,814,140 |
|
|
$ |
1,886,021 |
|
|
$ |
1,840,819 |
|
|
$ |
1,951,996 |
|
|
$ |
1,864,276 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans held for sale |
|
|
|
|
|
|
|
|
|
||||||||||
Term lending |
|
1,977 |
|
|
|
2,500 |
|
|
|
— |
|
|
|
3,000 |
|
|
|
— |
|
Lease financing |
|
— |
|
|
|
778 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
SBA/USDA |
|
7,372 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Consumer finance |
|
16,597 |
|
|
|
66,240 |
|
|
|
77,779 |
|
|
|
84,351 |
|
|
|
24,780 |
|
Total loans held for sale |
|
25,946 |
|
|
|
69,518 |
|
|
|
77,779 |
|
|
|
87,351 |
|
|
|
24,780 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Term lending |
|
1,489,054 |
|
|
|
1,452,274 |
|
|
|
1,308,133 |
|
|
|
1,253,841 |
|
|
|
1,235,453 |
|
Asset-based lending |
|
429,556 |
|
|
|
379,681 |
|
|
|
382,371 |
|
|
|
373,160 |
|
|
|
377,965 |
|
Factoring |
|
336,442 |
|
|
|
335,953 |
|
|
|
358,344 |
|
|
|
351,133 |
|
|
|
338,884 |
|
Lease financing |
|
168,616 |
|
|
|
188,889 |
|
|
|
183,392 |
|
|
|
201,996 |
|
|
|
170,645 |
|
Insurance premium finance |
|
522,904 |
|
|
|
671,035 |
|
|
|
800,077 |
|
|
|
666,265 |
|
|
|
437,700 |
|
SBA/USDA |
|
560,433 |
|
|
|
546,048 |
|
|
|
524,750 |
|
|
|
422,389 |
|
|
|
405,612 |
|
Other commercial finance |
|
149,056 |
|
|
|
160,628 |
|
|
|
166,091 |
|
|
|
171,954 |
|
|
|
166,402 |
|
Commercial finance |
|
3,656,061 |
|
|
|
3,734,508 |
|
|
|
3,723,158 |
|
|
|
3,440,738 |
|
|
|
3,132,661 |
|
Consumer finance |
|
267,031 |
|
|
|
301,510 |
|
|
|
254,416 |
|
|
|
200,121 |
|
|
|
148,648 |
|
Tax services |
|
84,502 |
|
|
|
33,435 |
|
|
|
5,192 |
|
|
|
47,194 |
|
|
|
61,553 |
|
Warehouse finance |
|
394,814 |
|
|
|
349,911 |
|
|
|
376,915 |
|
|
|
380,458 |
|
|
|
377,036 |
|
Total loans and leases |
|
4,402,408 |
|
|
|
4,419,364 |
|
|
|
4,359,681 |
|
|
|
4,068,511 |
|
|
|
3,719,898 |
|
Net deferred loan origination costs |
|
6,977 |
|
|
|
6,917 |
|
|
|
6,435 |
|
|
|
4,388 |
|
|
|
5,718 |
|
Total gross loans and leases |
|
4,409,385 |
|
|
|
4,426,281 |
|
|
|
4,366,116 |
|
|
|
4,072,899 |
|
|
|
3,725,616 |
|
Allowance for credit losses |
|
(80,777 |
) |
|
|
(53,785 |
) |
|
|
(49,705 |
) |
|
|
(81,916 |
) |
|
|
(84,304 |
) |
Total loans and leases, net |
$ |
4,328,608 |
|
|
$ |
4,372,496 |
|
|
$ |
4,316,411 |
|
|
$ |
3,990,983 |
|
|
$ |
3,641,312 |
|
The Company's investment security balances at March 31, 2024 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) |
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
|||||
Commercial finance |
1.21 |
% |
1.30 |
% |
1.26 |
% |
1.35 |
% |
1.53 |
% |
Consumer finance |
1.71 |
% |
1.45 |
% |
0.92 |
% |
0.92 |
% |
1.99 |
% |
Tax services |
37.31 |
% |
1.52 |
% |
0.04 |
% |
70.20 |
% |
53.77 |
% |
Warehouse finance |
0.10 |
% |
0.10 |
% |
0.10 |
% |
0.10 |
% |
0.10 |
% |
Total loans and leases |
1.83 |
% |
1.22 |
% |
1.14 |
% |
2.01 |
% |
2.27 |
% |
Total loans and leases excluding tax services |
1.14 |
% |
1.21 |
% |
1.14 |
% |
1.21 |
% |
1.40 |
% |
The Company's ACL as a percentage of total loans and leases increased to
Activity in the allowance for credit losses for the periods presented was as follows.
(Unaudited) |
Three Months Ended |
|
Six Months Ended |
|||||||||||||
(Dollars in thousands) |
March 31,
|
December 31,
|
March 31,
|
|
March 31,
|
March 31,
|
||||||||||
Beginning balance |
$ |
53,785 |
|
$ |
49,705 |
|
$ |
52,592 |
|
|
$ |
49,705 |
|
$ |
45,947 |
|
Provision (reversal of) - tax services loans |
|
25,221 |
|
|
1,356 |
|
|
31,422 |
|
|
|
26,577 |
|
|
33,059 |
|
Provision (reversal of) - all other loans and leases |
|
684 |
|
|
8,210 |
|
|
5,264 |
|
|
|
8,894 |
|
|
13,490 |
|
Charge-offs - tax services loans |
|
— |
|
|
(1,145 |
) |
|
— |
|
|
|
(1,145 |
) |
|
(1,731 |
) |
Charge-offs - all other loans and leases |
|
(5,492 |
) |
|
(5,725 |
) |
|
(6,625 |
) |
|
|
(11,218 |
) |
|
(9,334 |
) |
Recoveries - tax services loans |
|
5,800 |
|
|
294 |
|
|
1,063 |
|
|
|
6,094 |
|
|
1,761 |
|
Recoveries - all other loans and leases |
|
779 |
|
|
1,090 |
|
|
588 |
|
|
|
1,870 |
|
|
1,112 |
|
Ending balance |
$ |
80,777 |
|
$ |
53,785 |
|
$ |
84,304 |
|
|
$ |
80,777 |
|
$ |
84,304 |
|
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 March 31, 2024 |
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 |
$ |
323 |
|
$ |
546 |
|
$ |
843 |
|
$ |
1,712 |
|
$ |
24,234 |
|
$ |
25,946 |
|
$ |
843 |
|
$ |
— |
|
$ |
843 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial finance |
|
36,482 |
|
|
23,986 |
|
|
15,596 |
|
|
76,064 |
|
|
3,579,997 |
|
|
3,656,061 |
|
|
2,679 |
|
|
27,781 |
|
|
30,460 |
Consumer finance |
|
4,293 |
|
|
3,001 |
|
|
3,093 |
|
|
10,387 |
|
|
256,644 |
|
|
267,031 |
|
|
3,093 |
|
|
— |
|
|
3,093 |
Tax services |
|
1,123 |
|
|
— |
|
|
— |
|
|
1,123 |
|
|
83,379 |
|
|
84,502 |
|
|
— |
|
|
— |
|
|
— |
Warehouse finance |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
394,814 |
|
|
394,814 |
|
|
— |
|
|
— |
|
|
— |
Total loans and leases held for investment |
|
41,898 |
|
|
26,987 |
|
|
18,689 |
|
|
87,574 |
|
|
4,314,834 |
|
|
4,402,408 |
|
|
5,772 |
|
|
27,781 |
|
|
33,553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total loans and leases |
$ |
42,221 |
|
$ |
27,533 |
|
$ |
19,532 |
|
$ |
89,286 |
|
$ |
4,339,068 |
|
$ |
4,428,354 |
|
$ |
6,615 |
|
$ |
27,781 |
|
$ |
34,396 |
As of December 31, 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 |
$ |
1,173 |
|
$ |
786 |
|
$ |
661 |
|
$ |
2,620 |
|
$ |
66,898 |
|
$ |
69,518 |
|
$ |
661 |
|
$ |
— |
|
$ |
661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial finance |
|
33,406 |
|
|
8,341 |
|
|
20,739 |
|
|
62,486 |
|
|
3,672,022 |
|
|
3,734,508 |
|
|
7,862 |
|
|
28,099 |
|
|
35,961 |
Consumer finance |
|
4,258 |
|
|
3,345 |
|
|
2,859 |
|
|
10,462 |
|
|
291,048 |
|
|
301,510 |
|
|
2,859 |
|
|
— |
|
|
2,859 |
Tax services |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
33,435 |
|
|
33,435 |
|
|
— |
|
|
— |
|
|
— |
Warehouse finance |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
349,911 |
|
|
349,911 |
|
|
— |
|
|
— |
|
|
— |
Total loans and leases held for investment |
|
37,664 |
|
|
11,686 |
|
|
23,598 |
|
|
72,948 |
|
|
4,346,416 |
|
|
4,419,364 |
|
|
10,721 |
|
|
28,099 |
|
|
38,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total loans and leases |
$ |
38,837 |
|
$ |
12,472 |
|
$ |
24,259 |
|
$ |
75,568 |
|
$ |
4,413,314 |
|
$ |
4,488,882 |
|
$ |
11,382 |
|
$ |
28,099 |
|
$ |
39,481 |
The Company's nonperforming assets at March 31, 2024 were
The decrease in the nonperforming assets as a percentage of total assets at March 31, 2024 compared to December 31, 2023, was primarily driven by a decrease in nonperforming loans in the commercial finance portfolio, partially offset by an increase in nonperforming loans in the consumer finance portfolio. When comparing the current period to the same period of the prior year, the increase in nonperforming assets was primarily due to an increase in nonperforming loans in the commercial finance portfolio.
The Company's nonperforming loans and leases at March 31, 2024, were
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 March 31, 2024 |
|
|
|
|
|
|
||||||
Commercial finance |
$ |
2,893,892 |
$ |
447,110 |
$ |
87,657 |
$ |
218,108 |
$ |
9,294 |
$ |
3,656,061 |
Warehouse finance |
|
394,814 |
|
— |
|
— |
|
— |
|
— |
|
394,814 |
Total loans and leases |
$ |
3,288,706 |
$ |
447,110 |
$ |
87,657 |
$ |
218,108 |
$ |
9,294 |
$ |
4,050,875 |
|
Asset Classification |
|||||||||||
(Dollars in thousands) |
Pass |
Watch |
Special
|
Substandard |
Doubtful |
Total |
||||||
As of December 31, 2023 |
|
|||||||||||
Commercial finance |
$ |
2,895,451 |
$ |
535,057 |
$ |
96,172 |
$ |
197,682 |
$ |
10,146 |
$ |
3,734,508 |
Warehouse finance |
|
349,911 |
|
— |
|
— |
|
— |
|
— |
|
349,911 |
Total loans and leases |
$ |
3,245,362 |
$ |
535,057 |
$ |
96,172 |
$ |
197,682 |
$ |
10,146 |
$ |
4,084,419 |
Deposits, Borrowings and Other Liabilities
The average balance of total deposits and interest-bearing liabilities was
Total end-of-period deposits increased
As of March 31, 2024, the Company had
As of March 31, 2024, the Company managed
Regulatory Capital
The Company and its subsidiary Pathward®, N.A. (the "Bank") remained above the federal regulatory minimum capital requirements at March 31, 2024, 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. The decrease in Tier 1 leverage capital ratio for the period is the result of higher quarterly average assets related to the Company's seasonal tax business. The Bank's Tier 1 leverage capital ratio using end of period assets of
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 |
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|||||
Company |
|
|
|
|
|
|
|
|
|
|||||
Tier 1 leverage capital ratio |
7.75 |
% |
|
7.96 |
% |
|
8.11 |
% |
|
8.40 |
% |
|
7.53 |
% |
Common equity Tier 1 capital ratio |
12.30 |
% |
|
11.43 |
% |
|
11.25 |
% |
|
11.52 |
% |
|
12.05 |
% |
Tier 1 capital ratio |
12.56 |
% |
|
11.69 |
% |
|
11.50 |
% |
|
11.79 |
% |
|
12.35 |
% |
Total capital ratio |
14.21 |
% |
|
13.12 |
% |
|
12.84 |
% |
|
13.45 |
% |
|
14.06 |
% |
Bank |
|
|
|
|
|
|
|
|
|
|||||
Tier 1 leverage ratio |
7.92 |
% |
|
8.15 |
% |
|
8.32 |
% |
|
8.67 |
% |
|
7.79 |
% |
Common equity Tier 1 capital ratio |
12.83 |
% |
|
11.97 |
% |
|
11.81 |
% |
|
12.17 |
% |
|
12.77 |
% |
Tier 1 capital ratio |
12.83 |
% |
|
11.97 |
% |
|
11.81 |
% |
|
12.17 |
% |
|
12.77 |
% |
Total capital ratio |
14.09 |
% |
|
13.01 |
% |
|
12.76 |
% |
|
13.42 |
% |
|
14.03 |
% |
| (1) | March 31, 2024 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) |
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
||||||||||
Total stockholders' equity |
$ |
739,462 |
|
|
$ |
729,282 |
|
|
$ |
650,625 |
|
|
$ |
677,721 |
|
|
$ |
673,244 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||
LESS: Goodwill, net of associated deferred tax liabilities |
|
296,889 |
|
|
|
297,283 |
|
|
|
297,679 |
|
|
|
298,092 |
|
|
|
298,390 |
|
LESS: Certain other intangible assets |
|
19,146 |
|
|
|
20,093 |
|
|
|
21,228 |
|
|
|
22,372 |
|
|
|
23,553 |
|
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards |
|
15,862 |
|
|
|
20,253 |
|
|
|
19,679 |
|
|
|
12,157 |
|
|
|
13,219 |
|
LESS: Net unrealized (losses) on available for sale securities |
|
(205,460 |
) |
|
|
(187,901 |
) |
|
|
(254,294 |
) |
|
|
(207,358 |
) |
|
|
(186,796 |
) |
LESS: Noncontrolling interest |
|
(420 |
) |
|
|
(510 |
) |
|
|
(1,005 |
) |
|
|
(631 |
) |
|
|
(551 |
) |
ADD: Adoption of Accounting Standards Update 2016-13 |
|
1,345 |
|
|
|
1,345 |
|
|
|
2,017 |
|
|
|
2,017 |
|
|
|
2,017 |
|
Common Equity Tier 1(1) |
|
614,790 |
|
|
|
581,409 |
|
|
|
569,355 |
|
|
|
555,106 |
|
|
|
527,446 |
|
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 |
|
(311 |
) |
|
|
(410 |
) |
|
|
(826 |
) |
|
|
(454 |
) |
|
|
(404 |
) |
Total Tier 1 capital |
|
628,140 |
|
|
|
594,660 |
|
|
|
582,190 |
|
|
|
568,313 |
|
|
|
540,703 |
|
Allowance for credit losses |
|
62,715 |
|
|
|
53,037 |
|
|
|
47,960 |
|
|
|
60,489 |
|
|
|
55,058 |
|
Subordinated debentures, net of issuance costs |
|
19,642 |
|
|
|
19,617 |
|
|
|
19,591 |
|
|
|
19,566 |
|
|
|
19,540 |
|
Total capital |
$ |
710,497 |
|
|
$ |
667,314 |
|
|
$ |
649,741 |
|
|
$ |
648,368 |
|
|
$ |
615,301 |
|
| (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. |
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, April 24, 2024. 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 082173.
The Quarterly Investor Update slide 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.
Upcoming Investor Events
-
Jefferies Global FinTech Conference, June 12, 2024 |
New York, NY
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 diluted share guidance, annual effective tax rate and related performance expectations; progress on key strategic initiatives; expected results of our partnerships; impacts of our improved data analytics, underwriting and monitoring processes; our goals regarding the addition of recurring revenue and related expected performance impacts; expected nonperforming loan resolutions and net charge off rates; 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, 2023, and in 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.
Condensed Consolidated Statements of Financial Condition (Unaudited) |
|||||||||||||||||||
(Dollars in Thousands, Except Share Data) |
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents |
$ |
347,888 |
|
|
$ |
671,630 |
|
|
$ |
375,580 |
|
|
$ |
515,271 |
|
|
$ |
432,598 |
|
Securities available for sale, at fair value |
|
1,779,458 |
|
|
|
1,850,581 |
|
|
|
1,804,228 |
|
|
|
1,914,271 |
|
|
|
1,825,563 |
|
Securities held to maturity, at amortized cost |
|
34,682 |
|
|
|
35,440 |
|
|
|
36,591 |
|
|
|
37,725 |
|
|
|
38,713 |
|
Federal Reserve Bank and Federal Home Loan Bank Stock, at cost |
|
25,844 |
|
|
|
23,694 |
|
|
|
28,210 |
|
|
|
30,890 |
|
|
|
29,387 |
|
Loans held for sale |
|
25,946 |
|
|
|
69,518 |
|
|
|
77,779 |
|
|
|
87,351 |
|
|
|
24,780 |
|
Loans and leases |
|
4,409,385 |
|
|
|
4,426,281 |
|
|
|
4,366,116 |
|
|
|
4,072,899 |
|
|
|
3,725,616 |
|
Allowance for credit losses |
|
(80,777 |
) |
|
|
(53,785 |
) |
|
|
(49,705 |
) |
|
|
(81,916 |
) |
|
|
(84,304 |
) |
Accrued interest receivable |
|
30,294 |
|
|
|
27,080 |
|
|
|
23,282 |
|
|
|
22,332 |
|
|
|
22,434 |
|
Premises, furniture, and equipment, net |
|
37,266 |
|
|
|
38,270 |
|
|
|
39,160 |
|
|
|
38,601 |
|
|
|
39,735 |
|
Rental equipment, net |
|
215,885 |
|
|
|
228,916 |
|
|
|
211,750 |
|
|
|
224,212 |
|
|
|
210,844 |
|
Goodwill and intangible assets |
|
328,001 |
|
|
|
329,241 |
|
|
|
330,225 |
|
|
|
331,335 |
|
|
|
332,503 |
|
Other assets |
|
283,245 |
|
|
|
280,571 |
|
|
|
292,327 |
|
|
|
265,654 |
|
|
|
270,387 |
|
Total assets |
$ |
7,437,117 |
|
|
$ |
7,927,437 |
|
|
$ |
7,535,543 |
|
|
$ |
7,458,625 |
|
|
$ |
6,868,256 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES |
|
|
|
|
|
|
|
|
|
||||||||||
Deposits |
|
6,368,344 |
|
|
|
6,936,055 |
|
|
|
6,589,182 |
|
|
|
6,306,976 |
|
|
|
5,902,696 |
|
Short-term borrowings |
|
31,000 |
|
|
|
— |
|
|
|
13,000 |
|
|
|
230,000 |
|
|
|
43,000 |
|
Long-term borrowings |
|
33,373 |
|
|
|
33,614 |
|
|
|
33,873 |
|
|
|
34,178 |
|
|
|
34,543 |
|
Accrued expenses and other liabilities |
|
264,938 |
|
|
|
228,486 |
|
|
|
248,863 |
|
|
|
209,750 |
|
|
|
214,773 |
|
Total liabilities |
|
6,697,655 |
|
|
|
7,198,155 |
|
|
|
6,884,918 |
|
|
|
6,780,904 |
|
|
|
6,195,012 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Common stock, |
|
254 |
|
|
|
260 |
|
|
|
262 |
|
|
|
266 |
|
|
|
271 |
|
Common stock, Nonvoting, |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
634,415 |
|
|
|
629,737 |
|
|
|
628,500 |
|
|
|
625,825 |
|
|
|
623,250 |
|
Retained earnings |
|
317,964 |
|
|
|
293,463 |
|
|
|
278,655 |
|
|
|
267,100 |
|
|
|
245,046 |
|
Accumulated other comprehensive loss |
|
(206,570 |
) |
|
|
(188,433 |
) |
|
|
(255,443 |
) |
|
|
(207,896 |
) |
|
|
(187,829 |
) |
Treasury stock, at cost |
|
(6,181 |
) |
|
|
(5,235 |
) |
|
|
(344 |
) |
|
|
(6,943 |
) |
|
|
(6,943 |
) |
Total equity attributable to parent |
|
739,882 |
|
|
|
729,792 |
|
|
|
651,630 |
|
|
|
678,352 |
|
|
|
673,795 |
|
Noncontrolling interest |
|
(420 |
) |
|
|
(510 |
) |
|
|
(1,005 |
) |
|
|
(631 |
) |
|
|
(551 |
) |
Total stockholders’ equity |
|
739,462 |
|
|
|
729,282 |
|
|
|
650,625 |
|
|
|
677,721 |
|
|
|
673,244 |
|
Total liabilities and stockholders’ equity |
$ |
7,437,117 |
|
|
$ |
7,927,437 |
|
|
$ |
7,535,543 |
|
|
$ |
7,458,625 |
|
|
$ |
6,868,256 |
|
Condensed Consolidated Statements of Operations (Unaudited) |
||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
(Dollars in Thousands, Except Share and Per Share Data) |
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
March 31,
|
|||||||
Interest and dividend income: |
|
|
|
|
|
|
|
|
|
|||||||
Loans and leases, including fees |
$ |
102,750 |
|
$ |
94,963 |
|
$ |
83,879 |
|
|
$ |
197,713 |
|
$ |
152,275 |
|
Mortgage-backed securities |
|
9,998 |
|
|
10,049 |
|
|
10,326 |
|
|
|
20,047 |
|
|
20,738 |
|
Other investments |
|
14,013 |
|
|
10,886 |
|
|
10,482 |
|
|
|
24,899 |
|
|
16,734 |
|
|
|
126,761 |
|
|
115,898 |
|
|
104,687 |
|
|
|
242,659 |
|
|
189,747 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|||||||
Deposits |
|
6,685 |
|
|
3,526 |
|
|
2,096 |
|
|
|
10,211 |
|
|
2,238 |
|
FHLB advances and other borrowings |
|
1,775 |
|
|
2,336 |
|
|
1,186 |
|
|
|
4,111 |
|
|
2,047 |
|
|
|
8,460 |
|
|
5,862 |
|
|
3,282 |
|
|
|
14,322 |
|
|
4,285 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net interest income |
|
118,301 |
|
|
110,036 |
|
|
101,405 |
|
|
|
228,337 |
|
|
185,462 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Provision for credit loss |
|
26,052 |
|
|
9,890 |
|
|
36,763 |
|
|
|
35,942 |
|
|
46,539 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net interest income after provision for credit loss |
|
92,249 |
|
|
100,146 |
|
|
64,642 |
|
|
|
192,395 |
|
|
138,923 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Noninterest income: |
|
|
|
|
|
|
|
|
|
|||||||
Refund transfer product fees |
|
28,942 |
|
|
422 |
|
|
30,205 |
|
|
|
29,364 |
|
|
30,882 |
|
Refund advance fee income |
|
43,200 |
|
|
111 |
|
|
37,995 |
|
|
|
43,311 |
|
|
38,612 |
|
Card and deposit fees |
|
35,344 |
|
|
30,750 |
|
|
42,087 |
|
|
|
66,094 |
|
|
79,805 |
|
Rental income |
|
13,720 |
|
|
13,459 |
|
|
12,940 |
|
|
|
27,179 |
|
|
25,648 |
|
Gain on sale of trademarks |
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
10,000 |
|
Gain (loss) on sale of other |
|
1,695 |
|
|
2,840 |
|
|
(666 |
) |
|
|
4,535 |
|
|
(164 |
) |
Other income |
|
6,044 |
|
|
5,179 |
|
|
4,477 |
|
|
|
11,223 |
|
|
8,032 |
|
Total noninterest income |
|
128,945 |
|
|
52,761 |
|
|
127,038 |
|
|
|
181,706 |
|
|
192,815 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|||||||
Compensation and benefits |
|
54,073 |
|
|
46,652 |
|
|
47,547 |
|
|
|
100,725 |
|
|
90,564 |
|
Refund transfer product expense |
|
7,366 |
|
|
192 |
|
|
7,863 |
|
|
|
7,558 |
|
|
7,968 |
|
Refund advance expense |
|
1,846 |
|
|
30 |
|
|
1,603 |
|
|
|
1,876 |
|
|
1,630 |
|
Card processing |
|
35,163 |
|
|
34,584 |
|
|
26,924 |
|
|
|
69,747 |
|
|
49,607 |
|
Occupancy and equipment expense |
|
9,293 |
|
|
8,848 |
|
|
8,510 |
|
|
|
18,141 |
|
|
16,822 |
|
Operating lease equipment depreciation |
|
10,424 |
|
|
10,423 |
|
|
14,719 |
|
|
|
20,847 |
|
|
24,347 |
|
Legal and consulting |
|
6,141 |
|
|
4,892 |
|
|
4,921 |
|
|
|
11,033 |
|
|
14,380 |
|
Intangible amortization |
|
1,240 |
|
|
984 |
|
|
1,435 |
|
|
|
2,224 |
|
|
2,693 |
|
Impairment expense |
|
2,013 |
|
|
— |
|
|
500 |
|
|
|
2,013 |
|
|
524 |
|
Other expense |
|
12,872 |
|
|
12,669 |
|
|
13,114 |
|
|
|
25,541 |
|
|
23,660 |
|
Total noninterest expense |
|
140,431 |
|
|
119,274 |
|
|
127,136 |
|
|
|
259,705 |
|
|
232,195 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Income before income tax expense |
|
80,763 |
|
|
33,633 |
|
|
64,544 |
|
|
|
114,396 |
|
|
99,543 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Income tax expense (benefit) |
|
15,246 |
|
|
5,719 |
|
|
9,176 |
|
|
|
20,965 |
|
|
15,753 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income before noncontrolling interest |
|
65,517 |
|
|
27,914 |
|
|
55,368 |
|
|
|
93,431 |
|
|
83,790 |
|
Net income attributable to noncontrolling interest |
|
249 |
|
|
257 |
|
|
597 |
|
|
|
506 |
|
|
1,177 |
|
Net income attributable to parent |
$ |
65,268 |
|
$ |
27,657 |
|
$ |
54,771 |
|
|
$ |
92,925 |
|
$ |
82,613 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Less: Allocation of Earnings to participating securities(1) |
|
524 |
|
|
220 |
|
|
839 |
|
|
|
744 |
|
|
1,228 |
|
Net income attributable to common shareholders(1) |
|
64,744 |
|
|
27,437 |
|
|
53,932 |
|
|
|
92,181 |
|
|
81,382 |
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|||||||
Basic |
$ |
2.56 |
|
$ |
1.06 |
|
$ |
1.99 |
|
|
$ |
3.61 |
|
$ |
2.95 |
|
Diluted |
$ |
2.56 |
|
$ |
1.06 |
|
$ |
1.99 |
|
|
$ |
3.61 |
|
$ |
2.95 |
|
Shares used in computing earnings per common share: |
|
|
|
|
|
|
|
|
|
|||||||
Basic |
|
25,281,743 |
|
|
25,776,845 |
|
|
27,078,048 |
|
|
|
25,529,186 |
|
|
27,555,197 |
|
Diluted |
|
25,311,144 |
|
|
25,801,538 |
|
|
27,169,569 |
|
|
|
25,555,656 |
|
|
27,632,737 |
|
| (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 March 31, |
2024 |
|
2023 |
||||||||||||||
(Dollars in thousands) |
Average
|
|
Interest
|
|
Yield /
|
|
Average
|
|
Interest
|
|
Yield /
|
||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and fed funds sold |
$ |
616,288 |
|
$ |
7,422 |
|
4.84 |
% |
|
$ |
564,656 |
|
$ |
5,843 |
|
4.20 |
% |
Mortgage-backed securities |
|
1,464,530 |
|
|
9,998 |
|
2.75 |
% |
|
|
1,549,240 |
|
|
10,326 |
|
2.70 |
% |
Tax exempt investment securities |
|
132,733 |
|
|
932 |
|
3.57 |
% |
|
|
149,912 |
|
|
990 |
|
3.39 |
% |
Asset-backed securities |
|
237,421 |
|
|
3,368 |
|
5.71 |
% |
|
|
141,968 |
|
|
1,273 |
|
3.64 |
% |
Other investment securities |
|
281,695 |
|
|
2,291 |
|
3.27 |
% |
|
|
298,030 |
|
|
2,376 |
|
3.23 |
% |
Total investments |
|
2,116,379 |
|
|
16,589 |
|
3.20 |
% |
|
|
2,139,150 |
|
|
14,965 |
|
2.89 |
% |
Commercial finance |
|
3,650,845 |
|
|
74,330 |
|
8.19 |
% |
|
|
3,056,293 |
|
|
60,765 |
|
8.06 |
% |
Consumer finance |
|
351,459 |
|
|
9,144 |
|
10.46 |
% |
|
|
187,826 |
|
|
6,301 |
|
13.60 |
% |
Tax services |
|
493,168 |
|
|
9,014 |
|
7.35 |
% |
|
|
448,659 |
|
|
10,555 |
|
9.54 |
% |
Warehouse finance |
|
407,703 |
|
|
10,262 |
|
10.12 |
% |
|
|
321,334 |
|
|
6,258 |
|
7.90 |
% |
Total loans and leases |
|
4,903,175 |
|
|
102,750 |
|
8.43 |
% |
|
|
4,014,112 |
|
|
83,879 |
|
8.47 |
% |
Total interest-earning assets |
$ |
7,635,842 |
|
$ |
126,761 |
|
6.69 |
% |
|
$ |
6,717,918 |
|
$ |
104,687 |
|
6.34 |
% |
Noninterest-earning assets |
|
600,354 |
|
|
|
|
|
|
612,020 |
|
|
|
|
||||
Total assets |
$ |
8,236,196 |
|
|
|
|
|
$ |
7,329,938 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing checking |
$ |
266 |
|
$ |
— |
|
0.31 |
% |
|
$ |
267 |
|
$ |
— |
|
0.33 |
% |
Savings |
|
59,914 |
|
|
5 |
|
0.04 |
% |
|
|
70,024 |
|
|
6 |
|
0.03 |
% |
Money markets |
|
190,143 |
|
|
598 |
|
1.26 |
% |
|
|
125,193 |
|
|
71 |
|
0.23 |
% |
Time deposits |
|
5,027 |
|
|
4 |
|
0.29 |
% |
|
|
6,948 |
|
|
2 |
|
0.11 |
% |
Wholesale deposits |
|
439,785 |
|
|
6,078 |
|
5.56 |
% |
|
|
186,421 |
|
|
2,017 |
|
4.39 |
% |
Total interest-bearing deposits |
|
695,135 |
|
|
6,685 |
|
3.87 |
% |
|
|
388,853 |
|
|
2,096 |
|
2.19 |
% |
Overnight fed funds purchased |
|
79,484 |
|
|
1,107 |
|
5.60 |
% |
|
|
46,735 |
|
|
543 |
|
4.71 |
% |
Subordinated debentures |
|
19,625 |
|
|
355 |
|
7.27 |
% |
|
|
19,523 |
|
|
354 |
|
7.34 |
% |
Other borrowings |
|
13,901 |
|
|
313 |
|
9.07 |
% |
|
|
15,283 |
|
|
289 |
|
7.68 |
% |
Total borrowings |
|
113,010 |
|
|
1,775 |
|
6.32 |
% |
|
|
81,541 |
|
|
1,186 |
|
5.90 |
% |
Total interest-bearing liabilities |
|
808,145 |
|
|
8,460 |
|
4.21 |
% |
|
|
470,394 |
|
|
3,282 |
|
2.83 |
% |
Noninterest-bearing deposits |
|
6,473,538 |
|
|
— |
|
— |
% |
|
|
5,997,739 |
|
|
— |
|
— |
% |
Total deposits and interest-bearing liabilities |
$ |
7,281,683 |
|
$ |
8,460 |
|
0.47 |
% |
|
$ |
6,468,133 |
|
$ |
3,282 |
|
0.21 |
% |
Other noninterest-bearing liabilities |
|
223,560 |
|
|
|
|
|
|
191,360 |
|
|
|
|
||||
Total liabilities |
|
7,505,243 |
|
|
|
|
|
|
6,659,493 |
|
|
|
|
||||
Shareholders' equity |
|
730,953 |
|
|
|
|
|
|
670,445 |
|
|
|
|
||||
Total liabilities and shareholders' equity |
$ |
8,236,196 |
|
|
|
|
|
$ |
7,329,938 |
|
|
|
|
||||
Net interest income and net interest rate spread including noninterest-bearing deposits |
|
|
$ |
118,301 |
|
6.22 |
% |
|
|
|
$ |
101,405 |
|
6.13 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net interest margin |
|
|
|
|
6.23 |
% |
|
|
|
|
|
6.12 |
% |
||||
Tax-equivalent effect |
|
|
|
|
0.01 |
% |
|
|
|
|
|
0.02 |
% |
||||
Net interest margin, tax-equivalent(2) |
|
|
|
|
6.24 |
% |
|
|
|
|
|
6.14 |
% |
||||
| (1) |
Tax rate used to arrive at the TEY for the three months ended March 31, 2024 and 2023 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 |
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
||||||||||
Equity to total assets |
|
9.94 |
% |
|
|
9.20 |
% |
|
|
8.63 |
% |
|
|
9.09 |
% |
|
|
9.80 |
% |
Book value per common share outstanding |
$ |
29.14 |
|
|
$ |
28.06 |
|
|
$ |
24.85 |
|
|
$ |
25.54 |
|
|
$ |
24.88 |
|
Tangible book value per common share outstanding |
$ |
16.21 |
|
|
$ |
15.39 |
|
|
$ |
12.24 |
|
|
$ |
13.05 |
|
|
$ |
12.59 |
|
Common shares outstanding |
|
25,377,986 |
|
|
|
25,988,230 |
|
|
|
26,183,583 |
|
|
|
26,539,272 |
|
|
|
27,055,727 |
|
Nonperforming assets to total assets |
|
0.50 |
% |
|
|
0.53 |
% |
|
|
0.77 |
% |
|
|
0.55 |
% |
|
|
0.44 |
% |
Nonperforming loans and leases to total loans and leases |
|
0.78 |
% |
|
|
0.88 |
% |
|
|
1.26 |
% |
|
|
0.93 |
% |
|
|
0.76 |
% |
Net interest margin |
|
6.23 |
% |
|
|
6.23 |
% |
|
|
6.19 |
% |
|
|
6.18 |
% |
|
|
6.12 |
% |
Net interest margin, tax-equivalent |
|
6.24 |
% |
|
|
6.24 |
% |
|
|
6.21 |
% |
|
|
6.20 |
% |
|
|
6.14 |
% |
Return on average assets |
|
3.17 |
% |
|
|
1.46 |
% |
|
|
1.97 |
% |
|
|
2.61 |
% |
|
|
2.99 |
% |
Return on average equity |
|
35.72 |
% |
|
|
16.87 |
% |
|
|
21.12 |
% |
|
|
26.26 |
% |
|
|
32.68 |
% |
Full-time equivalent employees |
|
1,204 |
|
|
|
1,218 |
|
|
|
1,193 |
|
|
|
1,186 |
|
|
|
1,164 |
|
Non-GAAP Reconciliations |
|||||||
Adjusted Net Income and Adjusted Earnings Per Share |
At and For the Three Months Ended |
|
At and For the Six Months Ended |
||||
(Dollars in Thousands, Except Share and Per Share Data) |
March 31,
|
|
March 31,
|
||||
Net Income - GAAP |
$ |
54,771 |
|
|
$ |
82,613 |
|
Less: Gain on sale of trademarks |
|
— |
|
|
|
10,000 |
|
Less: Loss on disposal of certain mobile solar generators |
|
(1,993 |
) |
|
|
(1,993 |
) |
Add: Accelerated depreciation on certain mobile solar generators |
|
4,822 |
|
|
|
4,822 |
|
Add: Rebranding expenses |
|
— |
|
|
|
3,737 |
|
Add: Separation related expenses |
|
— |
|
|
|
11 |
|
Add: Impairment on Venture Capital investments |
|
500 |
|
|
|
500 |
|
Add: Income tax effect resulting from the above listed items |
|
(1,829 |
) |
|
|
(253 |
) |
Adjusted net income |
$ |
60,257 |
|
|
$ |
83,423 |
|
Less: Adjusted allocation of earnings to participating securities |
|
923 |
|
|
|
1,241 |
|
Adjusted Net income attributable to common shareholders |
|
59,334 |
|
|
|
82,182 |
|
Weighted average diluted common shares outstanding |
|
27,169,569 |
|
|
|
27,632,737 |
|
Adjusted earnings per common share - diluted |
$ |
2.18 |
|
|
$ |
2.97 |
|
Net Interest Margin and Cost of Deposits |
At and For the Three Months Ended |
||||||||
(Dollars in thousands) |
March 31, 2024 |
December 31, 2023 |
March 31, 2023 |
||||||
Average interest earning assets |
$ |
7,635,842 |
|
$ |
7,031,922 |
|
$ |
6,717,918 |
|
Net interest income |
$ |
118,301 |
|
$ |
110,036 |
|
$ |
101,405 |
|
Net interest margin |
|
6.23 |
% |
|
6.23 |
% |
|
6.12 |
% |
Quarterly average total deposits |
$ |
7,168,673 |
|
$ |
6,558,190 |
|
$ |
6,386,592 |
|
Deposit interest expense |
$ |
6,685 |
|
$ |
3,526 |
|
$ |
2,096 |
|
Cost of deposits |
|
0.38 |
% |
|
0.21 |
% |
|
0.13 |
% |
|
|
|
|
||||||
Adjusted Net Interest Margin and Adjusted Cost of Deposits |
|
|
|
||||||
Average interest earning assets |
$ |
7,635,842 |
|
$ |
7,031,922 |
|
$ |
6,717,918 |
|
Net interest income |
|
118,301 |
|
|
110,036 |
|
|
101,405 |
|
Less: Contractual, rate-related processing expense |
|
30,094 |
|
|
26,793 |
|
|
20,369 |
|
Adjusted net interest income |
$ |
88,207 |
|
$ |
83,243 |
|
$ |
81,036 |
|
Adjusted net interest margin |
|
4.65 |
% |
|
4.71 |
% |
|
4.89 |
% |
Average total deposits |
$ |
7,168,673 |
|
$ |
6,558,190 |
|
$ |
6,386,592 |
|
Deposit interest expense |
|
6,685 |
|
|
3,526 |
|
|
2,096 |
|
Add: Contractual, rate-related processing expense |
|
30,094 |
|
|
26,793 |
|
|
20,369 |
|
Adjusted deposit expense |
$ |
36,779 |
|
$ |
30,319 |
|
$ |
22,465 |
|
Adjusted cost of deposits |
|
2.06 |
% |
|
1.84 |
% |
|
1.43 |
% |
|
|
||
Pathward, N.A. Period-end Tier 1 Leverage |
|
||
(Dollars in thousands) |
March 31, 2024 |
||
Total stockholders' equity |
$ |
765,910 |
|
Adjustments: |
|
||
Less: Goodwill, net of associated deferred tax liabilities |
|
296,888 |
|
Less: Certain other intangible assets |
|
19,145 |
|
Less: Net deferred tax assets from operating loss and tax credit carry-forwards |
|
15,862 |
|
Less: Net unrealized gains (losses) on available for sale securities |
|
(205,460 |
) |
Less: Noncontrolling interest |
|
(420 |
) |
Add: Adoption of Accounting Standards Update 2016-13 |
|
1,345 |
|
Common Equity Tier 1 |
|
641,240 |
|
Tier 1 minority interest not included in common equity Tier 1 capital |
|
— |
|
Total Tier 1 capital |
$ |
641,240 |
|
|
|
||
Total Assets (Quarter Average) |
$ |
8,229,652 |
|
Add: Available for sale securities amortized cost |
|
266,591 |
|
Add: Deferred tax |
|
(66,675 |
) |
Add: Adoption of Accounting Standards Updated 2016-13 |
|
1,345 |
|
Less: Deductions from CET1 |
|
331,895 |
|
Adjusted total assets |
$ |
8,099,018 |
|
Pathward, N.A. Regulatory Tier 1 Leverage |
|
7.92 |
% |
|
|
||
Total Assets (Period End) |
$ |
7,435,034 |
|
Add: Available for sale securities amortized cost |
|
273,983 |
|
Add: Deferred tax |
|
(68,523 |
) |
Add: Adoption of Accounting Standards Updated 2016-13 |
|
1,345 |
|
Less: Deductions from CET1 |
|
331,895 |
|
Adjusted total assets |
$ |
7,309,944 |
|
Pathward, N.A. Period-end Tier 1 Leverage |
|
8.77 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240424036567/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
What was Pathward Financial's net income for the 2024 fiscal second quarter?
What was the total revenue for Pathward Financial in the second quarter of fiscal 2024?
What is the range of Pathward Financial's fiscal year 2024 GAAP earnings per diluted share guidance?
How did Pathward Financial's gross loans and leases perform in the 2024 fiscal second quarter?
Who was appointed as a member of the Board of Directors of Pathward Financial in February 2024?
What certification did Pathward®, N.A. achieve in April 2024?
