EX-99.1 2 cash12312024earningsreleas.htm EX-99.1 Document

Exhibit 99.1
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PATHWARD FINANCIAL, INC. ANNOUNCES RESULTS FOR 2025 FISCAL FIRST QUARTER

Sioux Falls, S.D., January 21, 2025 - Pathward Financial, Inc. (“Pathward Financial” or the “Company”) (Nasdaq: CASH) reported net income of $31.4 million, or $1.29 per share, for the three months ended December 31, 2024, compared to net income of $27.7 million, or $1.06 per share, for the three months ended December 31, 2023.
CEO Brett Pharr said, “Fiscal 2025 started out well as we made good progress against the strategy we laid out last year. During the quarter we completed the sale of our insurance premium finance business along with the subsequent sale of debt securities. This move was another large step toward optimizing our balance sheet by giving us the opportunity to put those funds into higher yielding assets or those with optionality. We also extended two contracts with large, existing partners in Partner Solutions and started tax season with 12% more enrolled tax offices than last year.”

Company Highlights and Business Developments
•On October 31, 2024, Pathward N.A. (the "Bank") completed the sale of substantially all of the assets and liabilities related to the Bank's commercial insurance premium finance business. The purchase price was $603.3 million, plus a $31.2 million premium. The Bank recorded a $16.4 million pre-tax gain on the sale.
•On November 30, 2024, the Bank sold $160.6 million of debt securities available for sale ("AFS") with a pre-tax loss on the sale of securities of $15.7 million. This loss largely offsets the gain from the sale of the commercial insurance premium finance business.

Financial Highlights for the 2025 Fiscal First Quarter
•Total revenue for the first quarter was $173.5 million, an increase of $10.7 million, or 7%, compared to the same quarter in fiscal 2024, driven by an increase in both net interest income and noninterest income.
•Net interest margin ("NIM") increased 61 basis points to 6.84% for the first quarter from 6.23% during the same period last year, primarily driven by increased yields and balances in the loan and lease portfolio and an improved earning asset mix from the continued balance sheet optimization. When including contractual, rate-related processing expenses associated with deposits on the Company's balance sheet, NIM would have been 5.41% in the fiscal 2025 first quarter compared to 4.76% during the fiscal 2024 first quarter. See non-GAAP reconciliation table below.
•Total gross loans and leases at December 31, 2024 increased $136.4 million to $4.56 billion compared to December 31, 2023 and increased $487.5 million when compared to September 30, 2024. When excluding the insurance premium finance loans of $671.0 million at December 31, 2023, total gross loans and leases at December 31, 2024 increased $807.4 million, or 22%, when compared to December 31, 2023.
•During the 2025 fiscal first quarter, the Company repurchased 701,860 shares of common stock at an average share price of $74.05. As of December 31, 2024, there were 6,298,140 shares available for repurchase under the current common stock share repurchase program.


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Net Interest Income
Net interest income for the first quarter of fiscal 2025 was $116.1 million, an increase of 6% from the same quarter in fiscal 2024. The increase was mainly attributable to increased yields and balances in the loan and lease portfolio and an improved earning asset mix.
The Company’s average interest-earning assets for the first quarter of fiscal 2025 decreased by $296.0 million to $6.74 billion compared to the same quarter in fiscal 2024, due to decreases in average outstanding balances of total investments and interest earning cash balances, partially offset by an increase in total loan and lease balances. The first quarter average outstanding balance of loans and leases increased $107.6 million compared to the same quarter of the prior fiscal year, primarily due to increases in warehouse finance and tax services loans, partially offset by decreases in commercial finance and consumer finance loans. The decrease in the average outstanding balance of commercial finance loans and leases was primarily driven by the sale of the insurance premium finance loans, partially offset by an increase in term lending, asset-based lending, and SBA/USDA loans.
Fiscal 2025 first quarter NIM increased to 6.84% from 6.23% in the first fiscal quarter of 2024. When including contractual, rate-related processing expenses associated with deposits on the Company's balance sheet, NIM would have been 5.41% in the first quarter compared to 4.76% during the fiscal 2024 first quarter. See non-GAAP reconciliation table below. The overall reported tax-equivalent yield (“TEY”) on average interest-earning assets increased 47 basis points to 7.04% compared to the prior year quarter, driven by an improved earning asset mix. The yield on the loan and lease portfolio was 8.78% compared to 8.33% for the comparable period last year and the TEY on the securities portfolio was 3.10% compared to 3.15% over that same period.
The Company's cost of funds for all deposits and borrowings averaged 0.20% during the fiscal 2025 first quarter, as compared to 0.35% during the prior year quarter. The Company's overall cost of deposits was 0.05% in the fiscal first quarter of 2025, as compared to 0.21% during the prior year quarter. When including contractual, rate-related processing expenses associated with deposits on the Company's balance sheet, the Company's overall cost of deposits was 1.63% in the fiscal 2025 first quarter, as compared to 1.78% during the prior year quarter. See non-GAAP reconciliation table below.
Noninterest Income
Fiscal 2025 first quarter noninterest income increased 9% to $57.4 million, compared to $52.8 million for the same period of the prior year. During the first fiscal quarter of 2025, the Company recognized a gain on divestiture of $16.4 million from the sale of its commercial insurance premium finance business. This gain on divestiture was largely offset by a loss on sale of securities of $15.7 million also recognized during the current quarter. The increase in noninterest income when comparing the current period to the same period of the prior year was primarily driven by an increase in gain on sale of loans and leases, other income, tax services product fees, and rental income. The period-over-period increase was partially offset by a decrease in card and deposit fees and a reduction in gain on sale of other. The increase in gain on sale of loans was primarily driven by SBA/USDA loan sales.
The period-over-period decrease in card and deposit fee income was primarily related to lower servicing fee income due to a reduction in rates following reductions in the Effective Federal Funds Rate ("EFFR"). Servicing fee income on custodial deposits totaled $4.5 million during the 2025 fiscal first quarter, compared to $5.1 million for the same period of the prior year. For the fiscal quarter ended September 30, 2024, servicing fee income on custodial deposits totaled $3.2 million.
Noninterest Expense
Noninterest expense increased 4% to $123.6 million for the fiscal 2025 first quarter, from $119.3 million for the same quarter last year. The increase was primarily attributable to increases in compensation and benefits, operating lease depreciation, occupancy and equipment expense, other expense, and legal and consulting expense. The period-over-period increase was partially offset by decreases in card processing expense.
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The card processing expense decrease was due to rate-related agreements with Partner Solutions relationships. 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 EFFR and reprices immediately upon a change in the EFFR. Approximately 60% of the deposit portfolio was subject to these rate-related processing expenses during the fiscal 2025 first quarter. For the fiscal quarter ended December 31, 2024, contractual, rate-related processing expenses were $25.6 million, as compared to $26.3 million for the fiscal quarter ended September 30, 2024, and $26.8 million for the fiscal quarter ended December 31, 2023.
Income Tax Expense
The Company recorded an income tax expense of $6.3 million, representing an effective tax rate of 16.6%, for the fiscal 2025 first quarter, compared to an income tax expense of $5.7 million, representing an effective tax rate of 17.0%, for the first quarter last fiscal year. The current quarter increase in income tax expense compared to the prior year quarter was primarily due to an increase in income and a decrease in investment tax credits.
The Company originated $9.3 million in renewable energy leases during the fiscal 2025 first quarter, resulting in $3.2 million in total net investment tax credits. During the first quarter of fiscal 2024, the Company originated $12.2 million in renewable energy leases resulting in $4.4 million in total net investment tax credits. Investment tax credits related to renewable energy leases are recognized ratably based on income throughout each fiscal year.

Investments, Loans and Leases
(Dollars in thousands)December 31, 2024September 30, 2024June 30, 2024March 31, 2024December 31, 2023
Total investments$1,512,091 $1,774,313 $1,759,486 $1,814,140 $1,886,021 
Loans held for sale
Term lending7,860 4,567 — 1,977 2,500 
Lease financing424 — — — 778 
Insurance premium finance— 594,359 — — — 
SBA/USDA21,786 65,734 7,030 7,372 — 
Consumer finance42,578 24,210 22,350 16,597 66,240 
Total loans held for sale72,648 688,870 29,380 25,946 69,518 
Term lending1,735,539 1,554,641 1,533,722 1,489,054 1,452,274 
Asset-based lending608,261 471,897 473,289 429,556 379,681 
Factoring364,477 362,295 350,740 336,442 335,953 
Lease financing138,305 152,174 155,044 168,616 188,889 
Insurance premium finance— — 617,054 522,904 671,035 
SBA/USDA595,965 568,628 563,689 560,433 546,048 
Other commercial finance174,097 185,964 166,653 149,056 160,628 
Commercial finance3,616,644 3,295,599 3,860,191 3,656,061 3,734,508 
Consumer finance280,001 248,800 253,358 267,031 301,510 
Tax services45,051 8,825 43,184 84,502 33,435 
Warehouse finance624,251 517,847 449,962 394,814 349,911 
Total loans and leases4,565,947 4,071,071 4,606,695 4,402,408 4,419,364 
Net deferred loan origination costs (fees)(3,266)4,124 5,857 6,977 6,917 
Total gross loans and leases4,562,681 4,075,195 4,612,552 4,409,385 4,426,281 
Allowance for credit losses(48,977)(45,336)(79,836)(80,777)(53,785)
Total loans and leases, net$4,513,704 $4,029,859 $4,532,716 $4,328,608 $4,372,496 
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The Company's investment security balances at December 31, 2024 totaled $1.51 billion, as compared to $1.77 billion at September 30, 2024 and $1.89 billion at December 31, 2023. The sequential and year-over-year decreases were primarily related to the sale of $160.6 million of investment securities AFS during the first quarter of fiscal 2025.
Total gross loans and leases totaled $4.56 billion at December 31, 2024, as compared to $4.08 billion at September 30, 2024 and $4.43 billion at December 31, 2023. The driver for the sequential increase was growth across all loan portfolios. The year-over-year increase was primarily due to increases in warehouse finance and tax services loans, partially offset by decreases in commercial finance and consumer finance. When excluding the insurance premium finance loans of $671.0 million at December 31, 2023, total gross loans and leases at December 31, 2024 increased $807.4 million, or 22%, when compared to December 31, 2023.
Commercial finance loans, which comprised 79% of the Company's loan and lease portfolio, totaled $3.62 billion at December 31, 2024, reflecting an increase of $321.0 million, 10%, from September 30, 2024 and a decrease of $117.9 million, or 3%, from December 31, 2023. The sequential increase was primarily driven by increases of $180.9 million in term lending and $136.4 million in asset-based lending. The year-over-year decrease was primarily related to the sale of insurance premium finance loans during the first quarter of fiscal 2025, partially offset by increases of $283.3 million in term lending, $228.6 million in asset-based lending, and $49.9 million in SBA/USDA. When excluding the insurance premium finance loans of $671.0 million at December 31, 2023, commercial finance loans at December 31, 2024 increased by $553.2 million when compared to December 31, 2023.
Asset Quality
The Company’s allowance for credit losses ("ACL") totaled $49.0 million at December 31, 2024, an increase compared to $45.3 million at September 30, 2024 and a decrease compared to $53.8 million at December 31, 2023. The increase in the ACL at December 31, 2024, when compared to September 30, 2024, was primarily due to a $2.8 million increase in the allowance related to the consumer finance portfolio due to seasonal activity and a $0.8 million increase in the allowance related to the seasonal tax services portfolio.
The $4.8 million year-over-year decrease in the ACL was primarily driven by a $6.0 million decrease in the allowance related to the commercial finance portfolio, due in part to the sale of the insurance premium finance loans, partially offset by a $0.6 million increase in the allowance related to the consumer finance portfolio, a $0.3 million increase in the allowance related to the seasonal tax services portfolio, and a $0.3 million increase in the allowance related to the warehouse finance portfolio.
The following table presents the Company's ACL as a percentage of its total loans and leases.
As of the Period Ended
(Unaudited)December 31, 2024September 30, 2024June 30, 2024March 31, 2024December 31, 2023
Commercial finance1.18 %1.29 %1.17 %1.21 %1.30 %
Consumer finance1.79 %0.90 %2.23 %1.71 %1.45 %
Tax services1.75 %0.02 %66.35 %37.31 %1.52 %
Warehouse finance0.10 %0.10 %0.10 %0.10 %0.10 %
Total loans and leases1.07 %1.11 %1.73 %1.83 %1.22 %
Total loans and leases excluding tax services1.07 %1.12 %1.12 %1.14 %1.21 %

The Company's ACL as a percentage of total loans and leases decreased to 1.07% at December 31, 2024 from 1.11% at September 30, 2024. The decrease in the total loans and leases coverage ratio was primarily driven by the commercial finance portfolio, partially offset by an increase in the seasonal tax services portfolio and consumer finance portfolio. The increase in the tax services and consumer finance portfolios loan coverage ratios was due to seasonal activity.

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Activity in the allowance for credit losses for the periods presented was as follows.
(Unaudited)Three Months Ended
(Dollars in thousands)December 31, 2024September 30, 2024December 31, 2023
Beginning balance$45,336 $79,836 $49,705 
Provision (reversal of) - tax services loans1,301 (297)1,356 
Provision (reversal of) - all other loans and leases10,913 1,423 8,210 
Charge-offs - tax services loans(741)(28,815)(1,145)
Charge-offs - all other loans and leases(8,935)(7,912)(5,725)
Recoveries - tax services loans228 461 294 
Recoveries - all other loans and leases875 640 1,090 
Ending balance$48,977 $45,336 $53,785 
The Company recognized a provision for credit losses of $12.0 million for the quarter ended December 31, 2024, compared to $9.9 million for the comparable period in the prior fiscal year. The period-over-period increase in provision for credit losses was primarily due to increases in provision for credit losses in the commercial finance portfolio of $1.9 million, the consumer finance portfolio of $0.7 million, and the warehouse finance portfolio of $0.1 million, partially offset by a decrease of $0.1 million in provision for credit losses tax services portfolio. The Company recognized net charge-offs of $8.6 million for the quarter ended December 31, 2024, compared to net charge-offs of $5.5 million for the quarter ended December 31, 2023. Net charge-offs attributable to the commercial finance and seasonal tax services portfolios for the current quarter were $8.1 million and $0.5 million, respectively. Net charge-offs attributable to the commercial finance, tax services, and consumer finance portfolios for the same quarter of the prior year were $4.6 million, $0.8 million, and $0.1 million, respectively.
The Company's past due loans and leases were as follows for the periods presented.
As of December 31, 2024Accruing and Nonaccruing Loans and LeasesNonperforming Loans and Leases
(Dollars in thousands)30-59 Days Past Due60-89 Days Past Due> 89 Days Past DueTotal Past DueCurrentTotal Loans and Leases Receivable> 89 Days Past Due and AccruingNonaccrual BalanceTotal
Loans held for sale$— $— $— $— $72,648 $72,648 $— $— $— 
Commercial finance25,080 8,966 23,545 57,591 3,559,053 3,616,644 5,555 27,231 32,786 
Consumer finance4,502 2,936 2,423 9,861 270,140 280,001 2,423 — 2,423 
Tax services— — — — 45,051 45,051 — — — 
Warehouse finance— — — — 624,251 624,251 — — — 
Total loans and leases held for investment29,582 11,902 25,968 67,452 4,498,495 4,565,947 7,978 27,231 35,209 
Total loans and leases$29,582 $11,902 $25,968 $67,452 $4,571,143 $4,638,595 $7,978 $27,231 $35,209 

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As of September 30, 2024Accruing and Nonaccruing Loans and LeasesNonperforming Loans and Leases
(Dollars in thousands)30-59 Days Past Due60-89 Days Past Due> 89 Days Past DueTotal Past DueCurrentTotal Loans and Leases Receivable> 89 Days Past Due and AccruingNonaccrual BalanceTotal
Loans held for sale$2,266 $1,361 $1,050 $4,677 $684,193 $688,870 $1,050 $— $1,050 
Commercial finance23,381 7,671 19,975 51,027 3,244,572 3,295,599 2,314 26,412 28,726 
Consumer finance3,962 3,186 3,053 10,201 238,599 248,800 3,053 — 3,053 
Tax services— — 8,733 8,733 92 8,825 8,733 — 8,733 
Warehouse finance— — — — 517,847 517,847 — — — 
Total loans and leases held for investment27,343 10,857 31,761 69,961 4,001,110 4,071,071 14,100 26,412 40,512 
Total loans and leases$29,609 $12,218 $32,811 $74,638 $4,685,303 $4,759,941 $15,150 $26,412 $41,562 
The Company's nonperforming assets at December 31, 2024 were $37.5 million, representing 0.49% of total assets, compared to $43.0 million, or 0.57% of total assets at September 30, 2024 and $42.4 million, or 0.53% of total assets at December 31, 2023.
The decrease in the nonperforming assets as a percentage of total assets at December 31, 2024 compared to September 30, 2024, was primarily driven by a decrease in nonperforming loans in the seasonal tax services and consumer finance portfolios, partially offset by an increase in nonperforming loans in the commercial finance portfolio. When comparing the current period to the same period of the prior year, the decrease in nonperforming assets was primarily due to decreases in nonperforming loans in the commercial finance and consumer finance portfolios.
The Company's nonperforming loans and leases at December 31, 2024, were $35.2 million, representing 0.76% of total gross loans and leases, compared to $41.6 million, or 0.87% of total gross loans and leases at September 30, 2024 and $39.5 million, or 0.88% of total gross loans and leases at December 31, 2023.

Deposits, Borrowings and Other Liabilities
The average balance of total deposits and interest-bearing liabilities was $6.25 billion for the three-month period ended December 31, 2024, compared to $6.71 billion for the same period in the prior fiscal year. Total average deposits for the fiscal 2025 first quarter decreased by $477.0 million to $6.08 billion compared to the same period in fiscal 2024. The decrease in average deposits was primarily due to decreases in noninterest bearing deposits and wholesale deposits.
Total end-of-period deposits decreased 6% to $6.52 billion at December 31, 2024, compared to $6.94 billion at December 31, 2023. The decrease in end-of-period deposits was primarily driven by decreases in noninterest-bearing deposits of $264.9 million and wholesale deposits of $140.6 million.
As of December 31, 2024, the Company had $416.1 million in deposits related to government stimulus programs.
As of December 31, 2024, the Company managed $840.5 million of customer deposits at other banks in its capacity as custodian. These deposits provide the Company with the ability to earn servicing fee income, typically reflective of the EFFR. The sequential quarter increase in these customer deposits held at other banks reflects normal seasonal patterns during the first quarter of the fiscal year.




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Regulatory Capital
The Company and its subsidiary Pathward®, N.A. (the "Bank") remained above the federal regulatory minimum capital requirements at December 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. 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
December 31, 2024(1)
September 30, 2024June 30,
2024		March 31,
2024		December 31,
2023
Company
Tier 1 leverage capital ratio9.15 %9.26 %9.13 %7.75 %7.96 %
Common equity Tier 1 capital ratio12.53 %12.61 %12.44 %12.30 %11.43 %
Tier 1 capital ratio12.79 %12.86 %12.70 %12.56 %11.69 %
Total capital ratio14.11 %14.08 %14.33 %14.21 %13.12 %
Bank
Tier 1 leverage ratio9.42 %9.44 %9.36 %7.92 %8.15 %
Common equity Tier 1 capital ratio13.16 %13.12 %13.02 %12.83 %11.97 %
Tier 1 capital ratio13.16 %13.12 %13.02 %12.83 %11.97 %
Total capital ratio14.10 %13.97 %14.27 %14.09 %13.01 %
(1) December 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.

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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)
December 31,
2024		September 30,
2024		June 30,
2024		March 31,
2024		December 31,
2023
Total stockholders' equity$776,430 $839,605 $765,248 $739,462 $729,282 
Adjustments:
LESS: Goodwill, net of associated deferred tax liabilities286,171 296,105 296,496 296,889 297,283 
LESS: Certain other intangible assets16,951 18,018 18,315 19,146 20,093 
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards12,298 13,253 11,880 15,862 20,253 
LESS: Net unrealized (losses) on available for sale securities(187,834)(152,328)(206,584)(205,460)(187,901)
LESS: Noncontrolling interest(756)(277)(506)(420)(510)
ADD: Adoption of Accounting Standards Update 2016-13672 1,345 1,345 1,345 1,345 
Common Equity Tier 1(1)
650,272 666,179 646,992 614,790 581,409 
Long-term borrowings and other instruments qualifying as Tier 113,661 13,661 13,661 13,661 13,661 
Tier 1 minority interest not included in common equity Tier 1 capital(462)(150)(374)(311)(410)
Total Tier 1 capital663,471 679,690 660,279 628,140 594,660 
Allowance for credit losses48,818 44,687 65,182 62,715 53,037 
Subordinated debentures, net of issuance costs19,719 19,693 19,668 19,642 19,617 
Total capital$732,008 $744,070 $745,129 $710,497 $667,314 
(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.

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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 Tuesday, January 21, 2025. 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 228214.
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.

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 for all. Through our subsidiary, Pathward®, N.A., we strive to increase financial availability, choice, and opportunity across our Partner Solutions and Commercial Finance business lines. These strategic business lines provide support to individuals and businesses. Learn more at www.pathwardfinancial.com.

Investor Relations Contact
Darby Schoenfeld, CPA
SVP, Chief of Staff & Investor Relations
877-497-7497
investorrelations@pathward.com
Media Relations Contact
mediarelations@pathward.com

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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; underwriting and monitoring processes; 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 Ukraine and the Middle East, weather-related disasters, or public health events, such as pandemics, and any governmental or societal responses thereto; 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 their related impacts on macroeconomic conditions, customer behavior, funding costs and loan and securities portfolios; changes in tax laws; 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 and the insurance premium finance 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; and 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.
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, 2024, 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.
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Condensed Consolidated Statements of Financial Condition (Unaudited)
(Dollars in Thousands, Except Share Data)December 31, 2024September 30, 2024June 30, 2024March 31, 2024December 31, 2023
ASSETS
Cash and cash equivalents$597,396 $158,337 $298,926 $347,888 $671,630 
Securities available for sale, at fair value1,480,090 1,741,221 1,725,460 1,779,458 1,850,581 
Securities held to maturity, at amortized cost32,001 33,092 34,026 34,682 35,440 
Federal Reserve Bank and Federal Home Loan Bank Stock, at cost24,454 36,014 24,449 25,844 23,694 
Loans held for sale72,648 688,870 29,380 25,946 69,518 
Loans and leases4,562,681 4,075,195 4,612,552 4,409,385 4,426,281 
Allowance for credit losses(48,977)(45,336)(79,836)(80,777)(53,785)
Accrued interest receivable35,279 31,385 31,755 30,294 27,080 
Premises, furniture, and equipment, net38,263 39,055 36,953 37,266 38,270 
Rental equipment, net206,754 205,339 209,544 215,885 228,916 
Goodwill and intangible assets313,074 326,094 327,018 328,001 329,241 
Other assets308,679 260,070 280,053 283,245 280,571 
Total assets$7,622,342 $7,549,336 $7,530,280 $7,437,117 $7,927,437 
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits6,518,953 5,875,085 6,431,516 6,368,344 6,936,055 
Short-term borrowings— 377,000 — 31,000 — 
Long-term borrowings33,380 33,354 33,329 33,373 33,614 
Accrued expenses and other liabilities293,579 424,292 300,187 264,938 228,486 
Total liabilities6,845,912 6,709,731 6,765,032 6,697,655 7,198,155 
STOCKHOLDERS’ EQUITY 
Preferred stock— — — — — 
Common stock, $.01 par value241 248 251 254 260 
Common stock, Nonvoting, $.01 par value— — — — — 
Additional paid-in capital640,422 638,803 636,284 634,415 629,737 
Retained earnings332,322 354,474 343,392 317,964 293,463 
Accumulated other comprehensive loss(190,917)(153,394)(207,992)(206,570)(188,433)
Treasury stock, at cost(4,882)(249)(6,181)(6,181)(5,235)
Total equity attributable to parent777,186 839,882 765,754 739,882 729,792 
Noncontrolling interest(756)(277)(506)(420)(510)
Total stockholders’ equity776,430 839,605 765,248 739,462 729,282 
Total liabilities and stockholders’ equity$7,622,342 $7,549,336 $7,530,280 $7,437,117 $7,927,437 


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Condensed Consolidated Statements of Operations (Unaudited)
 Three Months Ended
(Dollars in Thousands, Except Share and Per Share Data)December 31, 2024September 30, 2024December 31, 2023
Interest and dividend income:  
Loans and leases, including fees$102,731 $102,292 $94,963 
Mortgage-backed securities8,986 9,607 10,049 
Other investments7,522 7,851 10,886 
 119,239 119,750 115,898 
Interest expense: 
Deposits775 1,119 3,526 
FHLB advances and other borrowings2,331 2,709 2,336 
 3,106 3,828 5,862 
Net interest income116,133 115,922 110,036 
Provision for credit loss12,032 838 9,890 
Net interest income after provision for credit loss104,101 115,084 100,146 
Noninterest income:  
Refund transfer product fees410 1,703 422 
Refund advance fee income459 229 111 
Card and deposit fees29,066 26,441 30,750 
Rental income13,708 13,199 13,459 
(Loss) on sale of securities(15,671)— — 
Gain on divestitures16,404 — — 
Gain (loss) on sale of loans and leases4,378 2,829 (31)
Gain on sale of other987 630 2,871 
Other income7,637 6,979 5,179 
Total noninterest income57,378 52,010 52,761 
Noninterest expense:  
Compensation and benefits49,292 52,298 46,652 
Refund transfer product expense108 168 192 
Refund advance expense34 20 30 
Card processing33,314 33,877 34,584 
Occupancy and equipment expense9,706 9,376 8,848 
Operating lease equipment depreciation 11,426 10,445 10,423 
Legal and consulting5,225 8,414 4,892 
Intangible amortization812 924 984 
Other expense13,642 14,348 12,669 
Total noninterest expense123,559 129,870 119,274 
Income before income tax expense37,920 37,224 33,633 
Income tax expense (benefit)6,294 3,052 5,719 
Net income before noncontrolling interest31,626 34,172 27,914 
Net income attributable to noncontrolling interest199 575 257 
Net income attributable to parent$31,427 $33,597 $27,657 
Less: Allocation of Earnings to participating securities(1)
130348220
Net income attributable to common shareholders(1)
31,29733,24927,437
Earnings per common share: 
Basic$1.29 $1.35 $1.06 
Diluted$1.29 $1.35 $1.06 
Shares used in computing earnings per common share:
Basic24,221,697 24,676,329 25,776,845 
Diluted24,280,371 24,715,021 25,801,538 
(1) Amounts presented are used in the two-class earnings per common share calculation.
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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 December 31,20242023
(Dollars in thousands)Average
Outstanding
Balance		Interest
Earned /
Paid
Yield /
Rate(1)
Average
Outstanding
Balance		Interest
Earned /
Paid
Yield /
Rate(1)
Interest-earning assets:      
Cash and fed funds sold$239,614 $2,258 3.74 %$337,975 $4,103 4.83 %
Mortgage-backed securities1,309,926 8,986 2.72 %1,486,854 10,049 2.69 %
Tax-exempt investment securities120,707 845 3.52 %136,470 930 3.43 %
Asset-backed securities188,163 2,604 5.49 %250,172 3,565 5.67 %
Other investment securities234,087 1,815 3.07 %284,625 2,288 3.20 %
Total investments1,852,883 14,250 3.10 %2,158,121 16,832 3.15 %
Commercial finance3,686,450 77,430 8.33 %3,762,910 75,345 7.97 %
Consumer finance316,402 10,405 13.05 %362,935 10,585 11.60 %
Tax services36,785 132 1.43 %28,050 (11)(0.16)%
Warehouse finance603,824 14,764 9.70 %381,931 9,044 9.42 %
Total loans and leases4,643,461 102,731 8.78 %4,535,826 94,963 8.33 %
Total interest-earning assets$6,735,958 $119,239 7.04 %$7,031,922 $115,898 6.57 %
Noninterest-earning assets649,450 543,418 
Total assets$7,385,408 $7,575,340 
Interest-bearing liabilities:
Interest-bearing checking$685 $— 0.21 %$426 $— 0.34 %
Savings45,469 3 0.03 %54,783 6 0.04 %
Money markets180,104 385 0.85 %183,255 576 1.25 %
Time deposits4,208 3 0.25 %5,517 4 0.25 %
Wholesale deposits26,892 384 5.67 %211,281 2,940 5.54 %
Total interest-bearing deposits (a)257,358 775 1.19 %455,262 3,526 3.08 %
Overnight fed funds purchased131,337 1,670 5.05 %117,153 1,656 5.62 %
Subordinated debentures19,702 355 7.14 %19,600 357 7.24 %
Other borrowings13,661 306 8.89 %14,178 323 9.07 %
Total borrowings164,700 2,331 5.62 %150,931 2,336 6.16 %
Total interest-bearing liabilities422,058 3,106 2.92 %606,193 5,862 3.85 %
Noninterest-bearing deposits (b)5,823,877 — — %6,102,928 — — %
Total deposits and interest-bearing liabilities$6,245,935 $3,106 0.20 %$6,709,121 $5,862 0.35 %
Other noninterest-bearing liabilities335,743 210,468 
Total liabilities6,581,678 6,919,589 
Shareholders' equity803,730 655,751 
Total liabilities and shareholders' equity$7,385,408 $7,575,340 
Net interest income and net interest rate spread including noninterest-bearing deposits$116,133 6.84 %$110,036 6.22 %
Net interest margin6.84 %6.23 %
Tax-equivalent effect0.01 %0.01 %
Net interest margin, tax-equivalent(2)
6.85 %6.24 %
Total cost of deposits (a+b)6,081,235 775 0.05 %6,558,190 3,526 0.21 %
(1) Tax rate used to arrive at the TEY for the three months ended December 31, 2024 and 2023 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
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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 EndedDecember 31,
2024		September 30,
2024		June 30,
2024		March 31,
2024		December 31,
2023
Equity to total assets10.19 %11.12 %10.16 %9.94 %9.20 %
Book value per common share outstanding$32.19 $33.79 $30.51 $29.14 $28.06 
Tangible book value per common share outstanding$19.21 $20.67 $17.47 $16.21 $15.39 
Common shares outstanding24,119,416 24,847,353 25,085,230 25,377,986 25,988,230 
Nonperforming assets to total assets0.49 %0.57 %0.61 %0.50 %0.53 %
Nonperforming loans and leases to total loans and leases0.76 %0.87 %0.96 %0.78 %0.88 %
Net interest margin6.84 %6.66 %6.56 %6.23 %6.23 %
Net interest margin, tax-equivalent6.85 %6.67 %6.57 %6.24 %6.24 %
Return on average assets1.69 %1.79 %2.28 %3.17 %1.46 %
Return on average equity15.51 %16.80 %22.62 %35.72 %16.87 %
Return on average tangible equity25.65 %28.40 %40.59 %64.92 %33.95 %
Full-time equivalent employees1,170 1,241 1,232 1,204 1,218 

Non-GAAP Reconciliations
Net Interest Margin and Cost of DepositsAt and For the Three Months Ended
(Dollars in thousands)December 31, 2024September 30, 2024December 31, 2023
Average interest earning assets$6,735,958 $6,925,315 $7,031,922 
Net interest income$116,133 $115,922 $110,036 
Net interest margin6.84 %6.66 %6.23 %
Quarterly average total deposits$6,081,235 $6,199,271 $6,558,190 
Deposit interest expense$775 $1,119 $3,526 
Cost of deposits0.05 %0.07 %0.21 %
Adjusted Net Interest Margin with contractual, rate-related card expenses associated with deposits on the Company's balance sheet
Average interest earning assets$6,735,958 $6,925,315 $7,031,922 
Net interest income116,133 115,922 110,036 
Less: Contractual, rate-related processing expense24,241 24,631 25,891 
Adjusted net interest income$91,892 $91,291 $84,145 
Adjusted net interest margin5.41 %5.24 %4.76 %
Average total deposits$6,081,235 $6,199,271 $6,558,190 
Deposit interest expense775 1,119 3,526 
Add: Contractual, rate-related processing expense24,241 24,631 25,891 
Adjusted deposit expense$25,016 $25,750 $29,417 
Adjusted cost of deposits1.63 %1.65 %1.78 %


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