Pathward Financial, Inc. Announces Results for Fourth Quarter and Fiscal Year 2026

Pathward Financial, Inc. Announces Results for Fourth Quarter and Fiscal Year 2026 SIOUX FALLS, S.D.--( BUSINESS WIRE)--Pathward Financial, Inc. (“Pathward Financial,” "Pathward," or the “Company” (Nasdaq: CASH), a U.S.-based financial holding company driven by its purpose to power financial inclusion for all, today reported its unaudited results for the fourth quarter and the fiscal year ended September 30, 2026. The Company reported net income of $38.6 million, or earnings per diluted share of $1.85, for the three months ended September 30, 2026, compared to net income of $38.8 million, or earnings per diluted share of $1.69, for the three months ended September 30, 2025.

For fiscal year 2026 ("fiscal 2026"), the Company reported net income of $175.7 million, or earnings per diluted share of $8.14, compared to net income of $185.9 million, or earnings per diluted share of $7.87, for fiscal year 2025 ("fiscal 2025"). The Company also recognized return on average assets and return on average tangible equity of 2.30% and 32.89%, respectively, compared to 2.46% and 38.75%, respectively, for the prior-year period.

Chief Executive Officer Brett Pharr said, "Fiscal 2026 was another important year of execution for Pathward. We successfully advanced the strategic priorities we set out to accomplish last year, and this was no small feat. We had some major wins across each area, and are very proud of the results the team delivered. While we continue to track and manage some of the credit items we mentioned last quarter, all other areas of the business yielded positive results. We extended contracts with partners, grew noninterest income, and grew net interest income in commercial finance."

Financial Highlights for the Fourth Quarter of Fiscal 2026

All highlights are compared to the same fiscal quarter in the prior-year period.

Net Interest Income

Net interest income for the fourth quarter of fiscal 2026 was $117.6 million, a decrease of 8% compared to the fourth quarter of fiscal 2025. The decrease was attributable to an $11.1 million reduction in interest income from the credit sponsorship portfolio and a $3.3 million reduction in interest income from the warehouse finance portfolio. Interest income on the credit sponsorship portfolio was impacted by the sale of a portfolio in October 2025 that was previously accounted for using a gross accounting methodology, and therefore, recorded at higher yields with offsetting entries not included in net interest income. These decreases were partially offset by a $5.6 million increase in interest income from commercial finance loans and leases, driven by strong originations within structured finance.

The Company’s average interest-earning assets for the fourth quarter of fiscal 2026 increased by $69.9 million to $6.87 billion compared to the same quarter in fiscal 2025 due to increases in the average outstanding balances in total loans and leases and cash and fed funds sold. The increase was partially offset by a decrease in the average outstanding balance of total investments. The fourth quarter average outstanding balance of loans and leases increased $196.8 million compared to the same quarter of the prior fiscal year due to an increase in the commercial finance portfolio, partially offset by decreases in the credit sponsorship and warehouse finance portfolios.

Fiscal 2026 fourth quarter net interest margin ("NIM") decreased to 6.79% from 7.46% in the fourth quarter of fiscal 2025 primarily due to the aforementioned sale of the credit sponsorship portfolio in October 2025. When including contractual, rate-related processing expense associated with deposits on the Company's balance sheet and excluding the gross interest income on credit sponsorship loans, adjusted NIM was 5.51% in the fiscal 2026 fourth quarter compared to 5.43% during the fiscal 2025 fourth quarter. See non-GAAP reconciliation table at the end of the press release. The overall reported tax-equivalent yield (“TEY”) on average interest-earning assets decreased 69 basis points to 6.87% compared to the prior-year quarter. The yield on the loan and lease portfolio was 8.23% compared to 9.25% for the comparable period last year and the TEY on the securities portfolio was 2.98% compared to 3.06% over that same period. The decreases in the TEY on average interest-earning assets and the yield on the loan and lease portfolio were also primarily driven by the aforementioned sale of the credit sponsorship portfolio.

The Company's cost of funds for all deposits and borrowings averaged 0.08% during the fiscal 2026 fourth quarter, as compared to 0.09% during the prior-year quarter. The Company's cost of deposits was 0.01% in the fourth quarter of fiscal 2026, as compared to 0.02% during the prior-year quarter. When including contractual, rate-related processing expense associated with deposits on the Company's balance sheet, the Company's adjusted cost of deposits was 1.40% in the fiscal 2026 fourth quarter, a decrease from 1.58% during the prior-year quarter primarily reflecting a lower rate environment. See non-GAAP reconciliation table at the end of the press release.

Noninterest Income

Fiscal 2026 fourth quarter noninterest income increased 12% to $65.6 million, compared to $58.8 million for the same period of the prior year. The increase was driven by increases in card and deposit fees and secondary market revenue, partially offset by decreases in rental income and gain on sale of other. Card and deposit fees excluding servicing fee income on custodial deposits increased $6.4 million, as contracts signed last year are generating growth.

Servicing fee income on custodial deposits totaled $6.1 million during the 2026 fiscal fourth quarter, as compared to $7.5 million for the fiscal quarter ended June 30, 2026 and $2.6 million for the same period of the prior year.

Noninterest Expense

Noninterest expense decreased 10% to $129.7 million in the fourth quarter of fiscal 2026, compared to $144.8 million for the same quarter last year. The decrease was attributable to lower legal and consulting expense, partially offset by an increase in building and software expense. The Company continues to make targeted investments in our people, processes and technology.

Card processing expense is primarily driven by rate-related agreements with Payments Sponsorship relationships and subject to deposit levels, floor rates, market conditions, and other performance conditions. Generally, this rate index is based on a percentage of the effective federal funds rate ("EFFR") and reprices immediately upon a change in the EFFR. Approximately 67% of the deposit portfolio was subject to these rate-related processing expenses during the fiscal 2026 fourth quarter. For the fiscal quarter ended September 30, 2026, contractual, rate-related processing expense was $23.0 million, as compared to $23.3 million for the fiscal quarter ended June 30, 2026, and $24.9 million for the fiscal quarter ended September 30, 2025.

Income Tax Expense

The Company recorded an income tax expense of $4.4 million, representing an effective tax rate of 10.1% for the fiscal 2026 fourth quarter, compared to an income tax expense of $9.3 million, representing an effective tax rate of 19.2%, for the fourth quarter last fiscal year. The decrease in income tax expense compared to the prior-year quarter was primarily driven by lower pre-tax income and the impact of a life insurance surrender recognized in the prior-year quarter.

The Company originated $45.3 million in renewable energy leases during the fiscal 2026 fourth quarter, resulting in $13.4 million in total net investment tax credits. During the fourth quarter of fiscal 2025, the Company originated $82.1 million in renewable energy leases resulting in $15.8 million in total net investment tax credits. For fiscal 2026, the Company originated $78.2 million in renewable energy leases, compared to $95.5 million for the comparable prior-year period.

Investments, Loans and Leases

(Dollars in thousands)

September 30, 2026

June 30, 2026

March 31, 2026

December 31, 2025

September 30, 2025

Total investments

1,190,318

1,246,718

1,299,421

1,338,709

1,357,151

Loans held for sale

Term lending

8,019

3,438

—

5,000

—

Lease financing

478

511

566

619

690

SBA/USDA

18,534

59,342

20,811

31,338

15,654

Credit sponsorship

47,056

33,997

31,695

51,012

163,077

Total loans held for sale

74,087

97,288

53,072

87,969

179,421

Term lending

2,791,146

2,666,977

2,501,855

2,506,777

2,302,540

Asset-based lending

697,151

697,687

660,220

629,317

593,265

Factoring

213,889

220,026

213,269

213,888

217,501

Lease financing

130,643

120,583

126,902

136,505

149,236

SBA/USDA

561,557

567,986

536,637

520,461

511,488

Other commercial finance

46,569

49,510

73,694

140,229

149,939

Commercial finance

4,440,955

4,322,769

4,112,577

4,147,177

3,923,969

Credit sponsorship

108,409

99,430

90,912

132,045

93,319

Tax services

1,898

34,770

60,191

62,049

2,532

Warehouse finance

527,008

647,611

604,642

641,669

645,186

Total loans and leases

5,078,270

5,104,580

4,868,322

4,982,940

4,665,006

Net deferred loan origination costs (fees)

6,345

3,261

(1,157

)

(85

)

(98

)

Total gross loans and leases

5,084,615

5,107,841

4,867,165

4,982,855

4,664,908

Allowance for credit losses

(67,321

)

(109,780

)

(98,279

)

(58,840

)

(53,319

)

Total loans and leases, net

5,017,295

4,998,061

4,768,886

4,924,015

4,611,589

The Company's investment security balances at September 30, 2026 totaled $1.19 billion, compared to $1.25 billion at June 30, 2026 and $1.36 billion at September 30, 2025. The year-over-year decrease was primarily related to normal paydown activity.

Total gross loans and leases totaled $5.08 billion at September 30, 2026, as compared to $5.11 billion at June 30, 2026 and $4.66 billion at September 30, 2025. The drivers for the sequential quarter decrease were declines in the warehouse finance portfolio and the seasonal decrease in the tax services portfolio, partially offset by growth in the commercial finance and credit sponsorship portfolios. The year-over-year increase was primarily attributable to growth in the commercial finance portfolio, partially offset by a decrease in the warehouse finance portfolio.

Commercial finance loans, which comprised 87% of the Company's loan and lease portfolio, totaled $4.44 billion at September 30, 2026, reflecting an increase of $118.2 million, or 3%, from June 30, 2026 and an increase of $517.0 million, or 13%, from September 30, 2025. The sequential quarter increase in the commercial finance portfolio was driven by a $124.2 million increase in term lending and a $10.1 million increase in lease financing. The year-over-year increase was driven by an increase of $488.6 million in term lending, an increase of $103.9 million in asset-based lending, and an increase of $50.1 million in SBA/USDA, partially offset by declines of $103.4 million in other commercial finance loans and $18.6 million in lease financing. These changes are primarily the result of the Company's efforts to maintain an optimized balance sheet.

Asset Quality

The Company’s allowance for credit losses ("ACL") totaled $67.3 million at September 30, 2026, a decrease compared to $109.8 million at June 30, 2026 and an increase compared to $53.3 million at September 30, 2025. The sequential decrease in the ACL was due to decreases of $30.1 million, $9.0 million, and $3.2 million in the allowance related to the seasonal tax services, commercial finance, and credit sponsorship portfolios, respectively. The sequential decrease in the commercial finance portfolio was primarily driven by a reduction in specific reserves.

The $14.0 million year-over-year increase in the ACL was primarily driven by an $18.5 million increase in the allowance related to the commercial finance portfolio, partially offset by a decrease in the allowance related to the credit sponsorship portfolio of $4.4 million.

The following table presents the Company's ACL as a percentage of its total loans and leases.

As of the Period Ended

(Unaudited)

September 30, 2026

June 30, 2026

March 31, 2026

December 31, 2025

September 30, 2025

Commercial finance

1.46

1.71

1.36

1.16

1.18

Credit sponsorship

1.86

5.23

7.25

6.85

6.88

Tax services

0.28

86.66

58.63

1.71

—

Warehouse finance

0.10

Total loans and leases

1.33

2.15

2.02

1.18

1.14

Total loans and leases excluding tax services

1.33

1.57

1.31

1.17

1.14

The Company's ACL as a percentage of total loans and leases decreased to 1.33% at September 30, 2026 from 2.15% at June 30, 2026 and increased from 1.14% at September 30, 2025. The sequential decrease in the total loans and leases coverage ratio was primarily driven by a decrease in the ACL related to the commercial finance and seasonal tax services portfolios. The year-over-year increase in the total loans and leases coverage ratio was primarily driven by an increase in the ACL related to the commercial finance portfolio.

Activity in the ACL for the periods presented was as follows.

(Unaudited)

Three Months Ended

Year Ended

(Dollars in thousands)

September 30, 2026

June 30, 2026

September 30, 2025

September 30, 2026

September 30, 2025

Beginning balance

109,780

98,279

105,995

53,319

71,765

(Reversal of) provision - tax services loans

(2,539

)

(6,035

)

(660

)

14,504

22,091

Provision (reversal of) - all other loans and leases

12,105

33,565

(5,797

)

71,176

34,454

Charge-offs - tax services loans

(28,586

)

(1,000

)

(30,426

)

(29,586

)

(31,721

)

Charge-offs - all other loans and leases

(25,402

)

(17,712

)

(17,704

)

(63,288

)

(59,173

)

Recoveries - tax services loans

997

1,879

657

15,087

9,628

Recoveries - all other loans and leases

966

804

1,254

6,109

6,275

Ending balance

67,321

109,780

53,319

67,321

53,319

The Company recognized a provision for credit losses of $10.3 million for the quarter ended September 30, 2026, compared to a reversal of provision of $6.4 million for the comparable period in the prior fiscal year. The year-over-year increase was primarily due to increases in the credit sponsorship portfolio of $12.0 million and commercial finance portfolio of $6.7 million, partially offset by decreases in the tax services portfolio of $1.9 million. The increase in provision expense within the credit sponsorship portfolio was due to a provision release recognized during the prior-year quarter.

The Company recognized net charge-offs of $52.0 million for the quarter ended September 30, 2026, consisting of $27.6 million in the seasonal tax services portfolio, $20.3 million in the commercial finance portfolio, and $4.1 million in the credit sponsorship portfolio. Net charge-offs were $46.2 million for the quarter ended September 30, 2025, comprised of $29.7 million, $8.9 million, and $7.5 million within the seasonal tax services, credit sponsorship, and commercial finance portfolios, respectively.

The Company's past due loans and leases were as follows for the periods presented.

As of September 30, 2026

Accruing and Nonaccruing Loans and Leases

Nonperforming Loans and Leases

(Dollars in thousands)

30-59 Days Past Due

60-89 Days Past Due

> 89 Days Past Due

Total Past Due

Current

Total Loans and Leases Receivable

> 89 Days Past Due and Accruing

Nonaccrual Balance

Total

Loans held for sale

—

74,087

—

Commercial finance

15,810

49,220

120,078

185,108

4,255,847

4,440,955

32,765

254,607

287,372

Credit sponsorship

1,281

314

337

1,932

106,477

108,409

337

—

337

Tax services

—

1,598

300

1,898

1,598

—

1,598

Warehouse finance

—

527,008

—

Total loans and leases held for investment

17,091

49,534

122,013

188,638

4,889,632

5,078,270

34,700

254,607

289,307

Total loans and leases

17,091

49,534

122,013

188,638

4,963,719

5,152,357

34,700

254,607

289,307

As of June 30, 2026

Accruing and Nonaccruing Loans and Leases

Nonperforming Loans and Leases

(Dollars in thousands)

30-59 Days Past Due

60-89 Days Past Due

> 89 Days Past Due

Total Past Due

Current

Total Loans and Leases Receivable

> 89 Days Past Due and Accruing

Nonaccrual Balance

Total

Loans held for sale

—

12,420

—

12,420

84,868

97,288

—

Commercial finance

56,731

87,246

171,712

315,689

4,007,080

4,322,769

15,711

255,365

271,076

Credit sponsorship

1,425

448

3,998

5,871

93,559

99,430

3,998

—

3,998

Tax services

—

34,770

—

34,770

—

34,770

—

Warehouse finance

—

647,611

—

Total loans and leases held for investment

58,156

122,464

175,710

356,330

4,748,250

5,104,580

19,709

255,365

275,074

Total loans and leases

58,156

134,884

175,710

368,750

4,833,118

5,201,868

19,709

255,365

275,074

The Company's nonperforming assets at September 30, 2026 were $290.4 million, representing 4.00% of total assets, compared to $277.5 million, or 3.79% of total assets, at June 30, 2026 and $101.7 million, or 1.42% of total assets, at September 30, 2025.

The increase in the nonperforming assets as a percentage of total assets at September 30, 2026, compared to June 30, 2026, was primarily driven by an increase in commercial finance loans more than 89 days past due and accruing. Compared with the same period of the prior year, the increase was driven by higher nonperforming loans in the commercial finance portfolio, partially offset by lower nonperforming loans in the seasonal tax services portfolio.

The Company's nonperforming loans and leases at September 30, 2026 were $289.3 million, representing 5.61% of total gross loans and leases, compared to $275.1 million, or 5.28% of total gross loans and leases, at June 30, 2026 and $99.1 million, or 2.05% of total gross loans and leases, at September 30, 2025. The primary reason for the increase in nonperforming commercial finance loans, as compared to September 30, 2025, was related to certain renewable energy construction projects with a common developer. The Company continues to work with other parties in these projects to bring them to completion.

Deposits, Borrowings and Other Liabilities

The average balance of total deposits and interest-bearing liabilities was $6.22 billion for the quarter ended September 30, 2026, compared to $6.27 billion for the same period in the prior fiscal year. Total average deposits for the fiscal 2026 fourth quarter decreased by $42.8 million to $6.14 billion compared to the same period in fiscal 2025. The decrease in average deposits was primarily due to decreases in noninterest-bearing deposits and money market deposits.

Total end-of-period deposits decreased 3% to $5.69 billion at September 30, 2026, from $5.89 billion at September 30, 2025. The decrease in end-of-period deposits was primarily driven by a decreases in noninterest-bearing deposits of $151.6 million and $55.7 million in money market deposits, partially offset by an increase in interest-bearing checking deposits of $15.1 million.

As of September 30, 2026, the Company managed $630.0 million of customer deposits at other banks in its capacity as custodian, compared to $575.0 million as of June 30, 2026 and $210.5 million as of September 30, 2025. These deposits provide the Company with the ability to earn servicing fee income, typically reflective of the EFFR.

Regulatory Capital

The Company and its subsidiary Pathward®, N.A. (the "Bank") remained above the federal regulatory minimum capital requirements at September 30, 2026, and continued to be classified as well-capitalized, and in good standing with the regulatory agencies. Regulatory capital ratios of the Company and the Bank are stated in the table below. Regulatory capital is not affected by the unrealized loss on accumulated other comprehensive income (“AOCI”). The securities portfolio is primarily comprised of amortizing securities that should provide consistent cash flow.

The tables below include certain non-GAAP financial measures that are used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews these measures along with other measures of capital as part of its financial analysis.

As of the Periods Indicated

September 30, 2026 (1)

June 30, 2026

March 31, 2026

December 31, 2025

September 30, 2025

Company

Tier 1 leverage capital ratio

9.85

9.66

8.62

9.51

9.79

Common equity Tier 1 capital ratio

11.83

11.51

12.65

12.02

12.70

Tier 1 capital ratio

12.07

11.74

12.89

12.26

12.95

Total capital ratio

13.59

13.33

14.52

13.67

14.27

Bank

Tier 1 leverage ratio

10.09

9.91

8.85

9.84

10.00

Common equity Tier 1 capital ratio

12.37

12.05

13.24

12.67

13.23

Tier 1 capital ratio

12.37

12.05

13.24

12.67

13.23

Total capital ratio

13.56

13.31

14.49

13.73

14.19

(1) September 30, 2026 capital ratios are preliminary pending completion and filing of the Company's and Bank's regulatory reports. The ratios presented above have been calculated under the generally applicable risk-based capital framework.

The following table provides the non-GAAP financial measures used to compute certain of the ratios included in the table above, as well as a reconciliation of such non-GAAP financial measures to the most directly comparable financial measure in accordance with GAAP:

Standardized Approach (1)

As of the Periods Indicated

(Dollars in thousands)

September 30, 2026

June 30, 2026

March 31, 2026

December 31, 2025

September 30, 2025

Total stockholders' equity

820,355

851,146

850,677

853,712

857,454

Adjustments:

LESS: Goodwill, net of associated deferred tax liabilities

283,760

284,105

284,471

284,815

285,158

LESS: Certain other intangible assets

19,339

18,699

17,306

17,746

18,077

LESS: Net deferred tax assets from operating loss and tax credit carry-forwards

3,136

785

1,207

5,877

5,733

LESS: Net unrealized (losses) on available for sale securities

(183,151

)

(138,411

)

(138,462

)

(133,516

)

(143,190

)

LESS: Noncontrolling interest

194

245

(785

)

(823

)

(591

)

ADD: Adoption of Accounting Standards Update 2016-13

—

1,788

Common Equity Tier 1 (1)

697,077

685,723

686,940

679,613

694,055

Long-term borrowings and other instruments qualifying as Tier 1

13,661

Tier 1 minority interest not included in common equity Tier 1 capital

115

(382

)

(437

)

(307

)

Total Tier 1 capital

710,814

699,499

700,219

692,837

707,409

Allowance for credit losses

70,022

74,916

68,278

59,687

52,455

Subordinated debentures, net of issuance costs

19,898

19,872

19,846

19,821

19,796

Total capital

800,734

794,287

788,343

772,345

779,660

(1) Capital amounts and ratios are calculated in accordance with Basel III capital rules as implemented by U.S. banking regulators and reflect fully phased-in regulatory requirements applicable to the Company as of the reporting date.

Conference Call

The Company will host a conference call and earnings webcast with a corresponding presentation at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) on Wednesday, October 21, 2026. The live webcast of the call can be accessed from Pathward’s Investor Relations website at www.pathwardfinancial.com. Telephone participants may access the conference call by dialing 1-833-461-5787 approximately 10 minutes prior to start time and reference meeting ID 841767855.

The quarterly investor presentation prepared for use in connection with the Company's conference call and earnings webcast is available under the Presentations link in the Investor Relations - Events & Presentations section of the Company's website at www.pathwardfinancial.com. A webcast replay will also be archived at www.pathwardfinancial.com for one year.

About Pathward Financial, Inc.

Pathward Financial, Inc. (Nasdaq: CASH) is a U.S.-based financial holding company driven by its purpose to power financial inclusion. Through our subsidiary, Pathward®, N.A., we strive to increase financial availability, choice, and opportunity through payments sponsorship and lending. These capabilities provide support to individuals and businesses. Learn more at www.pathwardfinancial.com.

Non-GAAP Financial Measures

This press release includes certain adjusted non-GAAP financial measures, which are not calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and exclude the impact of certain items. Management uses these non-GAAP financial measures to evaluate the Company’s performance and manage its operations and believes such measures to be helpful in understanding the Company's results of operations or financial position. These non-GAAP financial measures are intended to complement, and are not considered as alternatives to or substitutes for, the most directly comparable GAAP financial measures, as reconciled in the below tables. Additionally, such non-GAAP financial measures may not be comparable to or calculated in the same manner as similarly titled measures used by other companies.

Forward-Looking Statements

The Company and the Bank may from time to time make written or oral “forward-looking statements,” including statements contained in this press release, the Company’s filings with the Securities and Exchange Commission ("SEC"), the Company’s reports to stockholders, and in other communications by the Company and the Bank, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “could,” “future,” "target," or the negative of those terms, or other words of similar meaning or similar expressions. You should carefully read statements that contain these words because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements are based on information currently available to us and assumptions about future events, and include statements with respect to the Company’s beliefs, expectations, estimates, and intentions, which are subject to significant risks and uncertainties, and are subject to change based on various factors, some of which are beyond the Company’s control. Such risks, uncertainties and other factors may cause our actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Such statements address, among others, the following subjects: future operating results, including our performance expectations and fiscal 2027 financial guidance; our fiscal 2027 goals and strategy; including our emphasis on people, processes and technology; progress on key strategic initiatives; future performance and business prospects, including our Payments Sponsorship pipeline; our value proposition, including opportunities for revenue growth; expected results of our partnerships; impacts of our improved data analytics, underwriting and monitoring processes; impacts of our evolved operating model; expectations with respect to credit performance, expected nonperforming loan resolutions and net charge-off rates; the performance of our securities portfolio; customer retention; loan and other product demand; new products and services; credit quality; the level of net charge-offs and the adequacy of the allowance for credit losses; and technology, including impacts of technology investments. The following factors, among others, could cause the Company's financial performance and results of operations to differ materially from the expectations, estimates, and intentions expressed in such forward-looking statements: maintaining our executive management team; expected growth opportunities may not be realized or may take longer to realize than expected; our ability to successfully implement measures designed to reduce expenses and increase efficiencies; changes in trade, monetary, and fiscal policies and laws, including actual changes in interest rates and the Fed Funds rate and changes in international trade policies, tariffs, and treaties affecting imports and exports, and their related impacts on macroeconomic conditions, customer behavior, funding costs and loan and securities portfolios; changes in tax laws; trade disputes, barriers to trade or the emergence of trade restrictions; the strength of the United States' economy and the local economies in which the Company operates; adverse developments in the financial services industry generally such as bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer behavior; inflation, market, and monetary fluctuations; our liquidity and capital positions, including the sufficiency of our liquidity; the timely and efficient development of new products and services offered by the Company or its strategic partners, as well as risks (including reputational and litigation) attendant thereto, and the perceived overall value and acceptance of these products and services by users; the Bank's ability to maintain its Durbin Amendment exemption; the risks of dealing with or utilizing third parties, including, in connection with the Company’s prepaid card and tax refund advance businesses; the risk of reduced volume of refund advance loans as a result of reduced customer demand for or usage of the Bank's strategic partners’ refund advance products; our relationship with, and any actions, which may be initiated by our regulators, and any related increases in compliance and other costs; changes in financial services laws and regulations, including laws and regulations relating to the tax refund industry; technological changes, including, but not limited to, the protection of our electronic systems and information; the impact of acquisitions and divestitures; litigation risk; the growth of the Company’s business, as well as expenses related thereto; continued maintenance by the Bank of its status as a well-capitalized institution; changes in consumer borrowing, spending and saving habits; losses from fraudulent or illegal activity; technological risks and developments and cyber threats, attacks, or events; emerging external focus among regulators and other officials related to risks in connection with the development and use of artificial intelligence; the success of the Company at maintaining its high quality asset level and managing and collecting assets of borrowers in default should problem assets increase; and the potential adverse effects of unusual and infrequently occurring events, including the impact on financial markets from geopolitical conflicts, government shutdowns, weather-related disasters, or public health events, such as pandemics, and any governmental or societal responses thereto.

The foregoing list of factors is not exclusive. We caution you not to place undue reliance on these forward-looking statements. The forward-looking statements included in this press release speak only as of the date hereof. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Additional discussions of factors affecting the Company’s business and prospects are reflected under the caption “Risk Factors” and in other sections of the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended September 30, 2025, and in the Company's other filings made with the SEC. The Company expressly disclaims any intent or obligation to update, revise or clarify any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of the Company or its subsidiaries, whether as a result of new information, changed circumstances, or future events or for any other reason, except as required by applicable law.

Condensed Consolidated Statements of Financial Condition (Unaudited)

(Dollars in Thousands, Except Share Data)

September 30, 2026

June 30, 2026

March 31, 2026

December 31, 2025

September 30, 2025

ASSETS

Cash and cash equivalents

162,398

149,412

157,602

331,217

120,568

Securities available for sale, at fair value

1,163,947

1,219,616

1,271,353

1,310,047

1,327,843

Securities held to maturity, at amortized cost

26,371

27,101

28,068

28,662

29,308

Federal Reserve Bank and Federal Home Loan Bank stock, at cost

39,250

30,915

25,480

24,310

24,708

Loans held for sale

74,087

97,288

53,072

87,969

179,421

Loans and leases

5,084,615

5,107,841

4,867,165

4,982,855

4,664,908

Allowance for credit losses

(67,321

)

(109,780

)

(98,279

)

(58,840

)

(53,319

)

Accrued interest receivable

35,828

36,966

36,127

36,174

38,520

Premises, furniture, and equipment, net

43,748

43,313

42,254

42,370

40,632

Rental equipment, net

116,661

152,451

146,190

154,533

159,446

Goodwill and intangible assets

307,328

308,023

308,741

309,712

310,430

Other assets

266,765

251,227

274,626

311,196

329,879

Total assets

7,253,677

7,314,373

7,112,399

7,560,205

7,172,344

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES

Deposits

5,691,644

5,950,309

5,851,696

6,350,394

5,886,947

Short-term borrowings

334,500

167,500

26,000

—

9,000

Long-term borrowings

33,559

33,533

33,508

33,482

33,456

Accrued expenses and other liabilities

373,619

311,885

350,518

322,617

385,487

Total liabilities

6,433,322

6,463,227

6,261,722

6,706,493

6,314,890

STOCKHOLDERS’ EQUITY

Preferred stock

—

Common stock, $.01 par value

207

210

213

222

228

Common stock, nonvoting, $.01 par value

—

Additional paid-in capital

659,640

657,682

655,128

651,199

648,330

Retained earnings

348,047

339,252

340,744

346,529

359,830

Accumulated other comprehensive loss

(187,733

)

(142,706

)

(141,086

)

(134,996

)

(145,461

)

Treasury stock, at cost

—

(3,537

)

(3,537

)

(8,419

)

(4,882

)

Total equity attributable to parent

820,161

850,901

851,462

854,535

858,045

Noncontrolling interest

194

245

(785

)

(823

)

(591

)

Total stockholders’ equity

820,355

851,146

850,677

853,712

857,454

Total liabilities and stockholders’ equity

7,253,677

7,314,373

7,112,399

7,560,205

7,172,344

Condensed Consolidated Statements of Operations (Unaudited)

Three Months Ended

Year Ended

(Dollars in thousands, except per share data)

September 30, 2026

June 30, 2026

September 30, 2025

September 30, 2026

September 30, 2025

Interest and dividend income:

Loans and leases, including fees

106,773

101,289

115,446

430,666

455,816

Mortgage-backed securities

7,263

7,396

8,149

30,061

34,052

Other investments

4,763

5,348

5,845

24,203

33,524

118,799

114,033

129,440

484,930

523,392

Interest expense:

Deposits

124

140

283

4,744

5,430

FHLB advances and other borrowings

1,116

980

1,205

5,252

6,168

1,240

1,120

1,488

9,996

11,598

Net interest income

117,559

112,913

127,952

474,934

511,794

Provision for credit loss

10,302

28,309

(6,431

)

87,457

56,774

Net interest income after provision for credit loss

107,257

84,604

134,383

387,477

455,020

Noninterest income:

Refund transfer product fees

949

11,209

1,061

47,302

43,980

Refund advance and other tax fee income

(212

)

696

(711

)

58,129

48,705

Card and deposit fees

35,832

34,570

27,770

138,068

124,971

Rental income

8,497

9,607

11,864

40,671

51,686

(Loss) on sale of securities

—

(2,185

)

—

(25,084

)

Gain on divestitures

—

15,044

Secondary market revenue

11,340

13,969

10,122

33,040

37,022

Gain (loss) on sale of other

1,301

(51

)

3,144

2,621

5,151

Other income

7,849

6,731

7,691

27,399

26,625

Total noninterest income

65,556

76,731

58,756

347,230

328,100

Noninterest expense:

Compensation and benefits

51,793

52,361

50,740

211,423

200,495

Refund transfer product expense

(141

)

2,758

133

11,817

11,534

Refund advance expense

1,597

1,241

Card processing

30,172

30,671

32,693

124,755

138,443

Building and software

14,551

13,054

11,448

52,386

42,094

Operating lease equipment depreciation

6,984

7,545

10,861

33,599

45,636

Legal and consulting

7,489

6,122

14,272

24,496

36,469

Intangible amortization

695

718

763

3,102

3,456

Impairment expense

749

177

3,325

926

5,915

Other expense

17,384

15,625

20,520

65,375

74,784

Total noninterest expense

129,686

129,121

144,771

529,476

560,067

Income before income tax expense

43,127

32,214

48,368

205,231

223,053

Income tax expense

4,372

3,062

9,300

28,798

36,266

Net income before noncontrolling interest

38,755

29,152

39,068

176,433

186,787

Net income attributable to noncontrolling interest

128

183

265

761

915

Net income attributable to parent

38,627

28,969

38,803

175,672

185,872

Less: Allocation of Earnings to participating securities (1)

139

192

688

Net income attributable to common shareholders (1)

38,589

28,941

38,664

175,480

185,184

Earnings per common share:

Basic

1.86

1.37

1.70

8.18

7.91

Diluted

1.85

1.37

1.69

8.14

7.87

Shares used in computing earnings per common share:

Basic

20,775,162

21,065,733

22,708,085

21,441,203

23,397,489

Diluted

20,853,388

21,165,826

22,841,774

21,550,594

23,522,629

(1) Amounts presented are used in the two-class earnings per common share calculation.

Average Balances, Interest Rates and Yields

The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and in rates. Only the yield/rate reflects tax-equivalent adjustments. Nonaccruing loans and leases have been included in the table as loans carrying a zero yield.

Three Months Ended September 30,

2026

2025

(Dollars in thousands)

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

302,519

1,540

2.02

253,387

1,887

2.95

Mortgage-backed securities

1,049,469

7,263

2.75

1,170,189

8,149

2.76

Tax-exempt investment securities

99,856

691

3.47

110,456

756

3.44

Asset-backed securities

106,471

1,213

4.52

140,398

1,825

5.16

Other investment securities

165,729

1,319

3.16

176,532

1,377

3.10

Total investments

1,421,525

10,486

2.98

1,597,575

12,107

3.06

Commercial finance

4,409,447

88,587

7.97

3,993,526

82,939

8.24

Credit sponsorship

134,551

5,604

16.52

252,368

16,709

26.27

Tax services

31,817

0.23

34,740

(84

)

(0.96

Warehouse finance

573,393

12,563

8.69

671,802

15,882

9.38

Total loans and leases

5,149,208

106,773

8.23

4,952,436

115,446

9.25

Total interest-earning assets

6,873,252

118,799

6.87

6,803,398

129,440

7.56

Noninterest-earning assets

502,469

570,878

Total assets

7,375,721

7,374,276

Interest-bearing liabilities:

Interest-bearing checking

1,072

—

0.05

950

—

0.09

Savings

44,198

0.03

45,947

0.06

Money markets

160,692

105

0.26

177,225

258

0.58

Time deposits

1,974

1.14

2,636

0.75

Wholesale deposits

1,066

3.76

1,041

4.62

Total interest-bearing deposits (a)

209,002

124

0.23

227,799

283

0.49

Overnight fed funds purchased

48,511

496

4.06

48,391

571

4.69

Subordinated debentures

19,881

357

7.12

19,779

357

7.16

Other borrowings

13,661

263

7.64

13,661

277

8.03

Total borrowings

82,053

1,116

5.40

81,831

1,205

5.84

Total interest-bearing liabilities

291,055

1,240

1.69

309,630

1,488

1.91

Noninterest-bearing deposits (b)

5,933,671

—

5,957,697

—

Total deposits and interest-bearing liabilities

6,224,726

1,240

0.08

6,267,327

1,488

0.09

Other noninterest-bearing liabilities

309,658

293,745

Total liabilities

6,534,384

6,561,071

Shareholders' equity

841,337

813,204

Total liabilities and shareholders' equity

7,375,721

7,374,276

Net interest income and net interest rate spread including noninterest-bearing deposits

117,559

6.79

127,952

7.47

Net interest margin

6.79

7.46

Tax-equivalent effect

0.01

Net interest margin, tax-equivalent (2)

6.80

7.47

Total cost of deposits (a+b)

6,142,673

124

0.01

6,185,496

283

0.02

(1) Tax rate used to arrive at the TEY for the three months ended September 30, 2026 and 2025 was 21%.

(2) Net interest margin expressed on a fully-taxable-equivalent basis ("net interest margin, tax-equivalent") is a non-GAAP financial measure. The tax-equivalent adjustment to net interest income recognizes the estimated income tax savings when comparing taxable and tax-exempt assets and adjusting for federal and state exemption of interest income. The Company believes that it is a standard practice in the banking industry to present net interest margin expressed on a fully taxable equivalent basis and, accordingly, believes the presentation of this non-GAAP financial measure may be useful for peer comparison purposes.

Selected Financial Information

As of and For the Three Months Ended

September 30, 2026

June 30, 2026

March 31, 2026

December 31, 2025

September 30, 2025

Equity to total assets

11.31

11.64

11.96

11.29

11.96

Book value per common share outstanding

39.54

40.48

39.89

38.51

37.65

Tangible book value per common share outstanding

24.73

25.83

25.41

24.54

24.02

Common shares outstanding

20,745,540

21,023,902

21,327,534

22,169,535

22,772,570

Nonperforming assets to total assets

4.00

3.79

1.68

1.47

1.42

Nonperforming loans and leases to total loans and leases

5.61

5.28

2.39

2.15

2.05

Net interest margin

6.79

6.59

6.63

6.95

7.46

Adjusted net interest margin (1)

5.51

5.27

5.32

5.56

5.43

Cost of deposits

0.01

0.25

0.01

0.02

Adjusted cost of deposits (2)

1.40

1.43

1.63

1.49

1.58

Return on average assets

2.08

1.57

3.56

1.87

2.09

Return on average equity

18.21

13.73

34.67

16.76

18.93

Return on average tangible equity

28.72

21.61

54.41

26.72

30.65

Full-time equivalent employees

1,224

1,196

1,181

1,170

1,179

Non-GAAP Reconciliations

Net Interest Margin and Cost of Deposits

At and For the Three Months Ended

(Dollars in thousands)

September 30, 2026

June 30, 2026

March 31, 2026

December 31, 2025

September 30, 2025

Average interest earning assets

6,873,252

6,876,094

7,653,765

6,812,693

6,803,398

Net interest income

117,559

112,913

125,124

119,338

127,952

Net interest margin

6.79

6.59

6.63

6.95

7.46

Average total deposits

6,142,673

6,173,468

7,021,044

6,173,866

6,185,496

Deposit interest expense

124

140

4,274

206

283

Cost of deposits

0.01

0.25

0.01

0.02

Adjusted Net Interest Margin (1) and Adjusted Cost of Deposits (2)

Average interest earning assets

6,873,252

6,876,094

7,653,765

6,812,693

6,803,398

Net interest income

117,559

112,913

125,124

119,338

127,952

Less: Contractual, rate-related processing expense associated with deposits on the Company's balance sheet

21,625

21,897

23,971

23,013

24,346

Less: Gross interest income on credit sponsorship loans

509

718

814

905

10,456

Adjusted net interest income

95,425

90,298

100,339

95,420

93,150

Adjusted net interest margin (1)

5.51

5.27

5.32

5.56

5.43

Average total deposits

6,142,673

6,173,468

7,021,044

6,173,866

6,185,496

Deposit interest expense

124

140

4,274

206

283

Add: Contractual, rate-related processing expense associated with deposits on the Company's balance sheet

21,625

21,897

23,971

23,013

24,346

Adjusted deposit expense

21,749

22,037

28,245

23,219

24,629

Adjusted cost of deposits (2)

1.40

1.43

1.63

1.49

1.58

(1) Adjusted net interest margin includes contractual, rate-related processing expense associated with deposits on the Company's balance sheet and excludes the gross interest income on credit sponsorship loans.

(2) Adjusted cost of deposits includes contractual, rate-related card processing expense associated with deposits on the Company’s balance sheet.