Pathward Financial, Inc. Announces Results for 2026 Fiscal First Quarter
SIOUX FALLS, S.D.--( BUSINESS WIRE)--Pathward Financial, Inc. (“Pathward Financial” or the “Company”) (Nasdaq: CASH), a U.S.-based financial holding company driven by its purpose to power financial inclusion for all, today reported its results for the 2026 fiscal first quarter. The Company reported net income of $35.2 million, or $1.57 per share, for the three months ended December 31, 2025, compared to net income of $30.0 million, or $1.23 per share, for the three months ended December 31, 2024.
CEO Brett Pharr said, "We started the fiscal year in a position of strength. Overall, we are pleased with the financial results achieved in the quarter, which were marked by solid growth in our core business including growing interest income in commercial finance with a lower provision, increasing core card and deposit fee income, and flat expenses. Our strategy continues to drive strong results, and we are seeing positive outcomes driven by what we accomplished in fiscal 2025. We look forward to delivering on our fiscal 2026 goals which we believe will set us up for sustainable growth in the future."
Financial Highlights for the 2026 Fiscal First Quarter
All highlights are compared to the same fiscal quarter in the prior year period.
Net Interest Income
Net interest income for the first quarter of fiscal 2026 was $119.3 million, which was a decrease of 5% compared to the same quarter in fiscal 2025.
The Company’s average interest-earning assets for the first quarter of fiscal 2026 increased by $75.8 million to $6.81 billion compared to the same quarter in fiscal 2025, primarily due to increases in average outstanding balances in total loan and lease balances partially offset by decreases in securities investment balances. The first quarter average outstanding balance of loans and leases increased $353.7 million compared to the same quarter of the prior fiscal year, due to increases in the commercial finance, warehouse finance, and tax services portfolios, partially offset by a decrease in the consumer finance portfolio.
Fiscal 2026 first quarter NIM decreased to 6.95% from 7.38% in the first fiscal quarter of 2025. When including contractual, rate-related processing expense associated with deposits on the Company's balance sheet, NIM would have been 5.61% in the fiscal 2026 first quarter compared to 5.95% during the fiscal 2025 first quarter. See non-GAAP reconciliation table at the end of the press release. The overall reported tax-equivalent yield (“TEY”) on average interest-earning assets decreased 50 basis point to 7.07% compared to the prior year quarter. The yield on the loan and lease portfolio was 8.56% compared to 9.55% for the comparable period last year and the TEY on the securities portfolio was 3.05% compared to 3.10% over that same period. The decreases in NIM, the TEY on average interest-earning assets, and the yield on the loan and lease portfolio was primarily driven by the sale of more than half of the held for sale consumer finance portfolio in October 2025 that was accounted for using a gross accounting methodology, and therefore, recorded at higher yields with offsetting entries not included in net interest income.
The Company's cost of funds for all deposits and borrowings averaged 0.12% during the fiscal 2026 first quarter, as compared to 0.20% during the prior year quarter. The Company's overall cost of deposits was 0.01% in the fiscal first quarter of 2026, as compared to 0.05% during the prior year quarter. When including contractual, rate-related processing expense associated with deposits on the Company's balance sheet, the Company's overall cost of deposits was 1.49% in the fiscal 2026 first quarter, as compared to 1.63% during the prior year quarter. See non-GAAP reconciliation table at the end of the press release.
Noninterest Income
Fiscal 2026 first quarter noninterest income decreased 6% to $53.8 million, compared to $57.4 million for the same period of the prior year. The decrease in noninterest income when comparing the current period to the same period of the prior year was primarily driven by decreases in rental income, other income, and gain on sale of other, partially offset by an increase in card and deposit fee income. Additionally, during the prior year period, the Company recognized a $16.4 million gain on divestiture which was almost completely offset by a loss on sale of securities of $15.7 million.
Servicing fee income on custodial deposits totaled $3.4 million during the 2026 fiscal first quarter, compared to $4.5 million for the same period of the prior year. For the fiscal quarter ended September 30, 2025, servicing fee income on custodial deposits totaled $2.6 million. The year-over-year decrease in servicing fee income on custodial deposit balances held at partner banks was due to a reduction in rates following reductions in the Effective Federal Funds Rate ("EFFR"). The sequential increase in servicing fee income on custodial deposit balances held at partner banks was due to higher quarterly average deposits balances held at partner banks.
Noninterest Expense
Noninterest expense was $127.2 million for the fiscal 2026 first quarter, as compared to $127.8 million for the same quarter last year. The marginal decrease was primarily attributable to reductions in card processing expense, other expense, and operating and lease equipment depreciation, partially offset by increases in compensation and benefits, building and software, and legal and consulting expense.
Card processing expense is primarily driven by 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 66% of the deposit portfolio was subject to these rate-related processing expenses during the fiscal 2026 first quarter. For the fiscal quarter ended December 31, 2025, contractual, rate-related processing expense was $23.8 million, as compared to $24.9 million for the fiscal quarter ended September 30, 2025, and $25.6 million for the fiscal quarter ended December 31, 2024.
Income Tax Expense
The Company recorded an income tax expense of $7.2 million, representing an effective tax rate of 16.9%, for the fiscal 2026 first quarter, compared to an income tax expense of $6.0 million, representing an effective tax rate of 16.6%, 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 the increase in income.
The Company originated $19.7 million in renewable energy leases during the fiscal 2026 first quarter, resulting in $5.2 million in total net investment tax credits. During the first quarter of fiscal 2025, the Company originated $9.3 million in renewable energy leases resulting in $3.2 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, 2025
September 30, 2025
June 30, 2025
March 31, 2025
December 31, 2024
Total investments
$
1,338,709
$
1,357,151
$
1,397,613
$
1,442,855
$
1,512,091
Loans held for sale
Term lending
5,000
—
5,736
—
7,860
Lease financing
619
690
93
—
424
SBA/USDA
31,338
15,654
9,564
15,188
21,786
Consumer finance
51,012
163,077
34,374
30,579
42,578
Total loans held for sale
87,969
179,421
49,767
45,767
72,648
Term lending
2,506,777
2,302,540
2,003,699
1,766,432
1,735,539
Asset-based lending
629,317
593,265
610,852
542,483
608,261
Factoring
213,888
217,501
241,024
224,520
364,477
Lease financing
136,505
149,236
134,214
134,856
138,305
SBA/USDA
520,461
511,488
674,902
701,736
595,965
Other commercial finance
140,229
149,939
153,321
154,728
174,097
Commercial finance
4,147,177
3,923,969
3,818,012
3,524,755
3,616,644
Consumer finance
132,045
93,319
226,380
246,202
280,001
Tax services
62,049
2,532
37,419
55,973
45,051
Warehouse finance
641,669
645,186
664,110
643,124
624,251
Total loans and leases
4,982,940
4,665,006
4,745,921
4,470,054
4,565,947
Net deferred loan origination costs (fees)
(85
)
(98
)
(2,597
)
(5,184
)
(3,266
)
Total gross loans and leases
4,982,855
4,664,908
4,743,324
4,464,870
4,562,681
Allowance for credit losses
(58,840
)
(53,319
)
(105,995
)
(102,890
)
(74,337
)
Total loans and leases, net
$
4,924,015
$
4,611,589
$
4,637,329
$
4,361,980
$
4,488,344
The Company's investment security balances at December 31, 2025 totaled $1.34 billion, as compared to $1.36 billion at September 30, 2025 and $1.51 billion at December 31, 2024. The year-over-year decrease was primarily related to the sale of investment securities AFS during the second and fourth quarters of fiscal 2025 and normal paydown activity of investment security balances during the fiscal year.
Total gross loans and leases totaled $4.98 billion at December 31, 2025, as compared to $4.66 billion at September 30, 2025 and $4.56 billion at December 31, 2024. The drivers for the sequential increase were increases in the commercial finance, seasonal tax services, and seasonal consumer finance portfolios, partially offset by a slight decrease in the warehouse finance portfolio. The year-over-year increase was due to increases in the commercial finance, warehouse finance, and seasonal tax services portfolios, partially offset by a decrease in the consumer finance portfolio. The year-over-year decrease in consumer finance was due to the aforementioned loan sale within the consumer finance portfolio that occurred in October 2025.
Commercial finance loans, which comprised 83% of the Company's loan and lease portfolio, totaled $4.15 billion at December 31, 2025, reflecting an increase of $223.2 million, or 6%, from September 30, 2025 and an increase of $530.5 million, or 15%, from December 31, 2024. The sequential increase was primarily driven by increases of $204.2 million in term lending and $36.1 million in asset-based lending, partially offset by decreases in lease financing, other commercial finance, and factoring. The year-over-year increase was primarily driven by increases of $771.2 million in term lending and $21.1 million in asset-based lending, partially offset by decreases of $150.6 million in factoring, $75.5 million in SBA/USDA, and $33.9 million in other commercial finance.
Asset Quality
The Company’s allowance for credit losses ("ACL") totaled $58.8 million at December 31, 2025, an increase compared to $53.3 million at September 30, 2025 and a decrease compared to $74.3 million at December 31, 2024. The increase in the ACL at December 31, 2025, when compared to September 30, 2025, was primarily due to a $2.6 million increase in the allowance related to the consumer finance portfolio, a $1.9 million increase in the allowance related to the commercial finance portfolio, and a $1.1 million increase in the allowance related to the tax services portfolio.
The $15.5 million year-over-year decrease in the ACL was primarily driven by the decrease in the allowance related to the consumer finance portfolio of $21.3 million, partially offset by a $5.5 million increase in the allowance related to the commercial 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, 2025
September 30, 2025
June 30, 2025
March 31, 2025
December 31, 2024
Commercial finance
1.16
%
1.18
%
1.27
%
1.10
%
1.18
%
Consumer finance
6.85
%
6.88
%
11.69
%
12.04
%
10.84
%
Tax services
1.71
%
—
%
81.32
%
60.35
%
1.75
%
Warehouse finance
0.10
%
0.10
%
0.10
%
0.10
%
0.10
%
Total loans and leases
1.18
%
1.14
%
2.23
%
2.30
%
1.63
%
Total loans and leases excluding tax services
1.17
%
1.14
%
1.60
%
1.57
%
1.63
%
The Company's ACL as a percentage of total loans and leases increased to 1.18% at December 31, 2025 from 1.14% at September 30, 2025 and decreased from 1.63% at December 31, 2024. The year-over-year decrease in the total loans and leases coverage ratio was primarily driven by the decrease in the ACL related to the decrease in the consumer finance portfolio due to the aforementioned loan sale within the consumer finance portfolio that occurred in October 2025.
Activity in the ACL for the periods presented was as follows.
(Unaudited)
Three Months Ended
(Dollars in thousands)
December 31, 2025
September 30, 2025
December 31, 2024
Beginning balance
$
53,319
$
105,995
$
71,765
Provision (reversal of) - tax services loans
(1,398
)
(660
)
1,301
Provision (reversal of) - all other loans and leases
4,706
(5,797
)
17,542
Charge-offs - tax services loans
—
(30,426
)
(741
)
Charge-offs - all other loans and leases
(3,407
)
(17,704
)
(16,987
)
Recoveries - tax services loans
2,459
657
228
Recoveries - all other loans and leases
3,161
1,254
1,229
Ending balance
$
58,840
$
53,319
$
74,337
The Company recognized a provision for credit losses of $3.2 million for the quarter ended December 31, 2025, compared to provision for credit losses of $18.7 million for the comparable period in the prior fiscal year. The period-over-period decrease in provision for credit losses was primarily due to decreases in provision for credit losses in the commercial finance portfolio of $7.4 million, consumer finance portfolio of $5.3 million, and the tax services portfolio of $2.7 million. The Company recognized net recoveries of $2.2 million for the quarter ended December 31, 2025, compared to net charge-offs of $16.3 million for the quarter ended December 31, 2024. Net recoveries attributable to the seasonal tax services and commercial finance portfolios for the quarter ended December 31, 2025 were $2.5 million and $1.3 million respectively, while net charge-offs of $1.5 million were recognized in the consumer finance portfolio. Net charge-offs attributable to the commercial finance, consumer finance, and tax services portfolios for the same quarter of the prior year were $8.1 million, $7.7 million, and $0.5 million, respectively.
The Company's past due loans and leases were as follows for the periods presented.
As of December 31, 2025
Accruing and Nonaccruing Loans and Leases
Nonperforming Loans and Leases
(Dollars in thousands)
30-59 Days Past Due
60-89 Days Past Due
> 89 Days Past Due
Total Past Due
Current
Total Loans and Leases Receivable
> 89 Days Past Due and Accruing
Nonaccrual Balance
Total
Loans held for sale
$
148
$
150
$
235
$
533
$
87,436
$
87,969
$
235
$
—
$
235
Commercial finance
54,278
22,871
90,103
167,252
3,979,925
4,147,177
11,447
96,781
108,228
Consumer finance
1,383
691
602
2,676
129,369
132,045
602
—
602
Tax services
—
—
—
—
62,049
62,049
—
—
—
Warehouse finance
—
—
—
—
641,669
641,669
—
—
—
Total loans and leases held for investment
55,661
23,562
90,705
169,928
4,813,012
4,982,940
12,049
96,781
108,830
Total loans and leases
$
55,809
$
23,712
$
90,940
$
170,461
$
4,900,448
$
5,070,909
$
12,284
$
96,781
$
109,065
As of September 30, 2025
Accruing and Nonaccruing Loans and Leases
Nonperforming Loans and Leases
(Dollars in thousands)
30-59 Days Past Due
60-89 Days Past Due
> 89 Days Past Due
Total Past Due
Current
Total Loans and Leases Receivable
> 89 Days Past Due and Accruing
Nonaccrual Balance
Total
Loans held for sale
$
2,319
$
1,860
$
1,521
$
5,700
$
173,721
$
179,421
$
1,521
$
—
$
1,521
Commercial finance
31,505
18,061
53,833
103,399
3,820,570
3,923,969
12,900
81,416
94,316
Consumer finance
909
778
826
2,513
90,806
93,319
826
—
826
Tax services
—
—
2,477
2,477
55
2,532
2,477
—
2,477
Warehouse finance
—
—
—
—
645,186
645,186
—
—
—
Total loans and leases held for investment
32,414
18,839
57,136
108,389
4,556,617
4,665,006
16,203
81,416
97,619
Total loans and leases
$
34,733
$
20,699
$
58,657
$
114,089
$
4,730,338
$
4,844,427
$
17,724
$
81,416
$
99,140
The Company's nonperforming assets at December 31, 2025 were $111.5 million, representing 1.47% of total assets, compared to $101.7 million, or 1.42% of total assets at September 30, 2025 and $37.5 million, or 0.49% of total assets at December 31, 2024.
The increase in the nonperforming assets as a percentage of total assets at December 31, 2025, compared to September 30, 2025, was driven by an increase in nonperforming loans in the commercial finance portfolio, partially offset by decreases in the tax services and consumer finance portfolios. When comparing the current period to the same period of the prior year, the increase was driven by an increase in nonperforming loans in the commercial finance portfolio, partially offset by a decrease in nonperforming loans in the consumer finance portfolio.
The Company's nonperforming loans and leases at December 31, 2025, were $109.1 million, representing 2.15% of total gross loans and leases, compared to $99.1 million, or 2.05% of total gross loans and leases at September 30, 2025 and $35.2 million, or 0.76% of total gross loans and leases at December 31, 2024.
Deposits, Borrowings and Other Liabilities
The average balance of total deposits and interest-bearing liabilities was $6.31 billion for the three-month period ended December 31, 2025, compared to $6.25 billion for the same period in the prior fiscal year. Total average deposits for the fiscal 2026 first quarter increased by $92.6 million to $6.17 billion compared to the same period in fiscal 2025. The increase in average deposits was primarily due to an increase in noninterest-bearing deposits, partially offset by a decrease in wholesale deposits.
Total end-of-period deposits decreased 3% to $6.35 billion at December 31, 2025, from $6.52 billion at December 31, 2024. The decrease in end-of-period deposits was primarily driven by a decrease in noninterest-bearing deposits of $205.8 million, partially offset by an increase in money market deposits of $31.9 million.
As of December 31, 2025, the Company managed $1.05 billion 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 of $835.5 million in these customer deposits held at other banks reflects normal seasonal patterns during the first quarter of the fiscal year.
Regulatory Capital
The Company and its subsidiary Pathward®, N.A. (the "Bank") remained above the federal regulatory minimum capital requirements at December 31, 2025, 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, 2025 (1)
September 30, 2025
June 30,
2025
March 31,
2025
December 31,
2024
Company
Tier 1 leverage capital ratio
9.51
%
9.79
%
9.78
%
8.31
%
8.91
%
Common equity Tier 1 capital ratio
12.02
%
12.70
%
12.87
%
13.64
%
12.15
%
Tier 1 capital ratio
12.26
%
12.95
%
13.12
%
13.91
%
12.40
%
Total capital ratio
13.67
%
14.27
%
14.76
%
15.57
%
14.03
%
Bank
Tier 1 leverage ratio
9.84
%
10.00
%
10.00
%
8.51
%
9.16
%
Common equity Tier 1 capital ratio
12.67
%
13.23
%
13.43
%
14.25
%
12.78
%
Tier 1 capital ratio
12.67
%
13.23
%
13.43
%
14.25
%
12.78
%
Total capital ratio
13.73
%
14.19
%
14.68
%
15.51
%
14.03
%
(1)
December 31, 2025 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)
December 31,
2025
September 30,
2025
June 30,
2025
March 31,
2025
December 31,
2024
Total stockholders' equity
$
853,712
$
857,454
$
818,146
$
814,046
$
757,554
Adjustments:
LESS: Goodwill, net of associated deferred tax liabilities
284,815
285,158
285,482
285,865
286,171
LESS: Certain other intangible assets
17,746
18,077
17,091
16,363
16,951
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards
5,877
5,733
2,669
5,788
15,039
LESS: Net unrealized (losses) on available for sale securities
(133,516
)
(143,190
)
(158,673
)
(163,206
)
(187,833
)
LESS: Noncontrolling interest
(823
)
(591
)
(856
)
(658
)
(756
)
ADD: Adoption of Accounting Standards Update 2016-13
—
1,788
1,788
1,788
1,788
Common Equity Tier 1 (1)
679,613
694,055
674,221
671,682
629,770
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
(437
)
(307
)
(513
)
(381
)
(462
)
Total Tier 1 capital
692,837
707,409
687,369
684,962
642,969
Allowance for credit losses
59,687
52,455
65,960
62,042
64,904
Subordinated debentures, net of issuance costs
19,821
19,796
19,770
19,744
19,719
Total capital
$
772,345
$
779,660
$
773,099
$
766,748
$
727,592
(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 Thursday, January 22, 2026. The live webcast of the call can be accessed from Pathward’s Investor Relations website at www.pathwardfinancial.com. Telephone participants may access the conference call by dialing 1-833-470-1428 approximately 10 minutes prior to start time and reference access code 981737.
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.
Forward-Looking Statements
The Company and the Bank may from time to time make written or oral “forward-looking statements,” including statements contained in this press release, the Company’s filings with the Securities and Exchange Commission ("SEC"), the Company’s reports to stockholders, and in other communications by the Company and the Bank, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.
You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “could,” “future,” "target," or the negative of those terms, or other words of similar meaning or similar expressions. You should carefully read statements that contain these words because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements are based on information currently available to us and assumptions about future events, and include statements with respect to the Company’s beliefs, expectations, estimates, and intentions, which are subject to significant risks and uncertainties, and are subject to change based on various factors, some of which are beyond the Company’s control. Such risks, uncertainties and other factors may cause our actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Such statements address, among others, the following subjects: future operating results, including our performance expectations and fiscal 2026 financial guidance; our fiscal 2026 goals and strategy; progress on key strategic initiatives; our value proposition, including opportunities for revenue growth; expected results of our partnerships; impacts of our improved data analytics, underwriting and monitoring processes; impacts of our evolved operating model; 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, including impacts of technology investments. The following factors, among others, could cause the Company's financial performance and results of operations to differ materially from the expectations, estimates, and intentions expressed in such forward-looking statements: maintaining our executive management team; expected growth opportunities may not be realized or may take longer to realize than expected; our ability to successfully implement measures designed to reduce expenses and increase efficiencies; changes in trade, monetary, and fiscal policies and laws, including actual changes in interest rates and the Fed Funds rate and changes in international trade policies, tariffs, and treaties affecting imports and exports, and their related impacts on macroeconomic conditions, customer behavior, funding costs and loan and securities portfolios; changes in tax laws; trade disputes, barriers to trade or the emergence of trade restrictions; the strength of the United States' economy and the local economies in which the Company operates; adverse developments in the financial services industry generally such as bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer behavior; inflation, market, and monetary fluctuations; our liquidity and capital positions, including the sufficiency of our liquidity; the timely and efficient development of new products and services offered by the Company or its strategic partners, as well as risks (including reputational and litigation) attendant thereto, and the perceived overall value and acceptance of these products and services by users; the Bank's ability to maintain its Durbin Amendment exemption; the risks of dealing with or utilizing third parties, including, in connection with the Company’s prepaid card and tax refund advance businesses; the risk of reduced volume of refund advance loans as a result of reduced customer demand for or usage of the Bank's strategic partners’ refund advance products; our relationship with and any actions which may be initiated by our regulators, and any related increases in compliance and other costs; changes in financial services laws and regulations, including laws and regulations relating to the tax refund industry; technological changes, including, but not limited to, the protection of our electronic systems and information; the impact of acquisitions and divestitures; litigation risk; the growth of the Company’s business, as well as expenses related thereto; continued maintenance by the Bank of its status as a well-capitalized institution; changes in consumer borrowing, spending and saving habits; losses from fraudulent or illegal activity; technological risks and developments and cyber threats, attacks, or events; the success of the Company at maintaining its high quality asset level and managing and collecting assets of borrowers in default should problem assets increase; and the potential adverse effects of unusual and infrequently occurring events, including the impact on financial markets from geopolitical conflicts such as the military conflicts in Ukraine and the Middle East, government shutdowns, weather-related disasters, or public health events, such as pandemics, and any governmental or societal responses thereto.
The foregoing list of factors is not exclusive. We caution you not to place undue reliance on these forward-looking statements. The forward-looking statements included in this press release speak only as of the date hereof. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Additional discussions of factors affecting the Company’s business and prospects are reflected under the caption “Risk Factors” and in other sections of the Company’s Annual Report on Form 10-K, as amended, for the Company’s fiscal year ended September 30, 2025, and in the Company's other filings made with the SEC. The Company expressly disclaims any intent or obligation to update, revise or clarify any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of the Company or its subsidiaries, whether as a result of new information, changed circumstances, or future events or for any other reason.
Condensed Consolidated Statements of Financial Condition (Unaudited)
(Dollars in Thousands, Except Share Data)
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
December 31, 2024
ASSETS
Cash and cash equivalents
$
331,217
$
120,568
$
258,343
$
254,249
$
597,396
Securities available for sale, at fair value
1,310,047
1,327,843
1,367,340
1,411,520
1,480,090
Securities held to maturity, at amortized cost
28,662
29,308
30,273
31,335
32,001
Federal Reserve Bank and Federal Home Loan Bank Stock, at cost
24,310
24,708
29,451
24,276
24,454
Loans held for sale
87,969
179,421
49,767
45,767
72,648
Loans and leases
4,982,855
4,664,908
4,743,324
4,464,870
4,562,681
Allowance for credit losses
(58,840
)
(53,319
)
(105,995
)
(102,890
)
(74,337
)
Accrued interest receivable
36,174
38,520
39,996
37,081
35,279
Premises, furniture, and equipment, net
42,370
40,632
39,799
39,542
38,263
Rental equipment, net
154,533
159,446
181,370
202,194
206,754
Goodwill and intangible assets
309,712
310,430
311,193
311,992
313,074
Other assets
311,196
329,879
284,983
274,850
315,122
Total assets
$
7,560,205
$
7,172,344
$
7,229,844
$
6,994,786
$
7,603,425
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits
6,350,394
5,886,947
6,005,246
5,819,209
6,518,953
Short-term borrowings
—
9,000
115,000
—
—
Long-term borrowings
33,482
33,456
33,431
33,405
33,380
Accrued expenses and other liabilities
322,617
385,487
258,019
328,125
293,538
Total liabilities
6,706,493
6,314,890
6,411,696
6,180,739
6,845,871
STOCKHOLDERS’ EQUITY
Preferred stock
—
—
—
—
—
Common stock, $.01 par value
222
228
230
235
241
Common stock, Nonvoting, $.01 par value
—
—
—
—
—
Additional paid-in capital
651,199
648,330
646,044
643,888
640,422
Retained earnings
346,529
359,830
337,321
341,775
313,446
Accumulated other comprehensive loss
(134,996
)
(145,461
)
(159,709
)
(166,311
)
(190,917
)
Treasury stock, at cost
(8,419
)
(4,882
)
(4,882
)
(4,882
)
(4,882
)
Total equity attributable to parent
854,535
858,045
819,004
814,705
758,310
Noncontrolling interest
(823
)
(591
)
(856
)
(658
)
(756
)
Total stockholders’ equity
853,712
857,454
818,148
814,047
757,554
Total liabilities and stockholders’ equity
$
7,560,205
$
7,172,344
$
7,229,844
$
6,994,786
$
7,603,425
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended
(Dollars in thousands, except per share data)
December 31, 2025
September 30, 2025
December 31, 2024
Interest and dividend income:
Loans and leases, including fees
$
107,775
$
115,446
$
111,849
Mortgage-backed securities
7,812
8,149
8,986
Other investments
5,635
5,845
7,522
121,222
129,440
128,357
Interest expense:
Deposits
206
283
775
FHLB advances and other borrowings
1,678
1,205
2,331
1,884
1,488
3,106
Net interest income
119,338
127,952
125,251
Provision for credit loss
3,230
(6,431
)
18,661
Net interest income after provision for credit loss
116,108
134,383
106,590
Noninterest income:
Refund transfer product fees
355
1,061
410
Refund advance and other tax fee income
131
(711
)
459
Card and deposit fees
30,140
27,770
29,066
Rental income
11,620
11,864
13,708
(Loss) on sale of securities
—
(2,185
)
(15,671
)
Gain on divestitures
—
—
16,404
Secondary market revenue
4,157
10,122
4,378
Gain on sale of other
488
3,144
987
Other income
6,872
7,691
7,637
Total noninterest income
53,763
58,756
57,378
Noninterest expense:
Compensation and benefits
51,864
50,740
49,292
Refund transfer product expense
73
133
108
Refund advance expense
72
16
34
Card processing
30,437
32,693
33,314
Building and software
12,580
11,448
9,706
Operating lease equipment depreciation
9,995
10,861
11,426
Legal and consulting
5,554
14,272
5,225
Intangible amortization
718
763
812
Impairment expense
—
3,325
—
Other expense
15,920
20,520
17,880
Total noninterest expense
127,213
144,771
127,797
Income before income tax expense
42,658
48,368
36,171
Income tax expense
7,193
9,300
6,005
Net income before noncontrolling interest
35,465
39,068
30,166
Net income attributable to noncontrolling interest
299
265
199
Net income attributable to parent
$
35,166
$
38,803
$
29,967
Less: Allocation of Earnings to participating securities (1)
49
139
123
Net income attributable to common shareholders (1)
35,117
38,664
29,844
Earnings per common share:
Basic
$
1.57
$
1.70
$
1.23
Diluted
$
1.57
$
1.69
$
1.23
Shares used in computing earnings per common share:
Basic
22,312,973
22,708,085
24,221,697
Diluted
22,381,460
22,841,774
24,280,371
(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 December 31,
2025
2024
(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
$
275,336
$
1,799
2.59
%
$
239,614
$
2,258
3.74
%
Mortgage-backed securities
1,122,081
7,812
2.76
%
1,309,926
8,986
2.72
%
Tax-exempt investment securities
107,375
734
3.43
%
120,707
845
3.52
%
Asset-backed securities
136,468
1,747
5.08
%
188,163
2,604
5.49
%
Other investment securities
173,376
1,355
3.10
%
234,087
1,815
3.07
%
Total investments
1,539,300
11,648
3.05
%
1,852,883
14,250
3.10
%
Commercial finance
4,109,353
83,833
8.09
%
3,687,369
74,612
8.03
%
Consumer finance
199,184
9,457
18.84
%
316,402
22,341
28.01
%
Tax services
45,053
(40
)
(0.35
)%
36,785
132
1.43
%
Warehouse finance
644,467
14,525
8.94
%
603,824
14,764
9.70
%
Total loans and leases
4,998,057
107,775
8.56
%
4,644,380
111,849
9.55
%
Total interest-earning assets
$
6,812,693
$
121,222
7.07
%
$
6,736,877
$
128,357
7.57
%
Noninterest-earning assets
645,462
629,600
Total assets
$
7,458,155
$
7,366,477
Interest-bearing liabilities:
Interest-bearing checking
$
944
$
—
0.08
%
$
685
$
—
0.21
%
Savings
44,018
4
0.03
%
45,469
3
0.03
%
Money markets
212,420
169
0.31
%
180,104
385
0.85
%
Time deposits
2,636
6
0.91
%
4,208
3
0.25
%
Wholesale deposits
2,687
27
4.02
%
26,892
384
5.67
%
Total interest-bearing deposits (a)
262,705
206
0.31
%
257,358
775
1.19
%
Overnight fed funds purchased
98,240
1,047
4.23
%
131,337
1,670
5.05
%
Subordinated debentures
19,805
357
7.15
%
19,702
355
7.14
%
Other borrowings
13,661
274
7.95
%
13,661
306
8.89
%
Total borrowings
131,706
1,678
5.06
%
164,700
2,331
5.62
%
Total interest-bearing liabilities
394,411
1,884
1.90
%
422,058
3,106
2.92
%
Noninterest-bearing deposits (b)
5,911,161
—
—
%
5,823,877
—
—
%
Total deposits and interest-bearing liabilities
$
6,305,572
$
1,884
0.12
%
$
6,245,935
$
3,106
0.20
%
Other noninterest-bearing liabilities
320,242
335,839
Total liabilities
6,625,814
6,581,774
Shareholders' equity
832,341
784,703
Total liabilities and shareholders' equity
$
7,458,155
$
7,366,477
Net interest income and net interest rate spread including noninterest-bearing deposits
$
119,338
6.95
%
$
125,251
7.37
%
Net interest margin
6.95
%
7.38
%
Tax-equivalent effect
0.01
%
0.01
%
Net interest margin, tax-equivalent (2)
6.96
%
7.39
%
Total cost of deposits (a+b)
6,173,866
206
0.01
%
6,081,235
775
0.05
%
(1) Tax rate used to arrive at the TEY for the three months ended December 31, 2025 and 2024 was 21%.
(2) Net interest margin expressed on a fully-taxable-equivalent basis ("net interest margin, tax-equivalent") is a non-GAAP financial measure. The tax-equivalent adjustment to net interest income recognizes the estimated income tax savings when comparing taxable and tax-exempt assets and adjusting for federal and state exemption of interest income. The Company believes that it is a standard practice in the banking industry to present net interest margin expressed on a fully taxable equivalent basis and, accordingly, believes the presentation of this non-GAAP financial measure may be useful for peer comparison purposes.
Selected Financial Information
As of and For the Three Months Ended
December 31,
2025
September 30,
2025
June 30,
2025
March 31,
2025
December 31,
2024
Equity to total assets
11.29
%
11.96
%
11.32
%
11.64
%
9.96
%
Book value per common share outstanding
$
38.51
$
37.65
$
35.64
$
34.55
$
31.41
Tangible book value per common share outstanding
$
24.54
$
24.02
$
22.09
$
21.31
$
18.43
Common shares outstanding
22,169,535
22,772,570
22,953,608
23,558,939
24,119,416
Nonperforming assets to total assets
1.47
%
1.42
%
1.03
%
0.59
%
0.49
%
Nonperforming loans and leases to total loans and leases
2.15
%
2.05
%
1.49
%
0.88
%
0.76
%
Net interest margin
6.95
%
7.46
%
7.43
%
7.12
%
7.38
%
Net interest margin, tax-equivalent
6.96
%
7.47
%
7.44
%
7.13
%
7.39
%
Return on average assets
1.87
%
2.09
%
2.36
%
3.63
%
1.61
%
Return on average equity
16.76
%
18.93
%
21.19
%
39.19
%
15.15
%
Return on average tangible equity
26.72
%
30.65
%
34.77
%
65.66
%
25.45
%
Full-time equivalent employees
1,170
1,179
1,178
1,155
1,170
Non-GAAP Reconciliations
Net Interest Margin and Cost of Deposits
At and For the Three Months Ended
(Dollars in thousands)
December 31, 2025
September 30, 2025
December 31, 2024
Average interest earning assets
$
6,812,693
$
6,803,398
$
6,736,877
Net interest income
$
119,338
$
127,952
$
125,251
Net interest margin
6.95
%
7.46
%
7.38
%
Quarterly average total deposits
$
6,173,866
$
6,185,496
$
6,081,235
Deposit interest expense
$
206
$
283
$
775
Cost of deposits
0.01
%
0.02
%
0.05
%
Adjusted Net Interest Margin with contractual, rate-related card expense associated with deposits on the Company's balance sheet
Average interest earning assets
$
6,812,693
$
6,803,398
$
6,736,877
Net interest income
119,338
127,952
125,251
Less: Contractual, rate-related processing expense
23,013
24,346
24,241
Adjusted net interest income
$
96,325
$
103,607
$
101,010
Adjusted net interest margin
5.61
%
6.04
%
5.95
%
Average total deposits
$
6,173,866
$
6,185,496
$
6,081,235
Deposit interest expense
206
283
775
Add: Contractual, rate-related processing expense
23,013
24,346
24,241
Adjusted deposit expense
$
23,219
$
24,629
$
25,016
Adjusted cost of deposits
1.49
%
1.58
%
1.63
%