Pathward Financial(CASH) - 2025 Q1 - Quarterly Results

Financial Performance - Pathward Financial reported net income of $31.4 million, or $1.29 per share, for Q1 2025, compared to $27.7 million, or $1.06 per share, in Q1 2024, representing a 13.4% increase in net income[1]. - Total revenue for Q1 2025 was $173.5 million, an increase of $10.7 million, or 7%, compared to the same quarter in fiscal 2024, driven by higher net interest income and noninterest income[5]. - Noninterest income rose by 9% to $57.4 million in Q1 2025, compared to $52.8 million in the same period last year, driven by gains on loan sales and tax services product fees[10]. - The company completed the sale of its commercial insurance premium finance business for $603.3 million, recording a pre-tax gain of $16.4 million[5]. - Net income attributable to parent for the quarter was $31,427 thousand, a decrease from $33,597 thousand in the previous quarter, representing a decline of 6.5%[51]. - Earnings per common share (basic) was $1.29, compared to $1.35 in the previous quarter, reflecting a decrease of 4.44%[51]. Loan and Lease Activity - Total gross loans and leases increased by $136.4 million to $4.56 billion compared to December 31, 2023, and increased by $487.5 million from September 30, 2024[5]. - The company originated $9.3 million in renewable energy leases during Q1 2025, resulting in $3.2 million in total net investment tax credits[15]. - Loans and leases increased to $4,562,681 thousand, compared to $4,075,195 thousand in the previous quarter, representing an increase of 11.95%[49]. - Total loans and leases rose to $4,643,461 thousand in Q4 2024, an increase of 2.4% from $4,535,826 thousand in Q4 2023[54]. Interest Income and Margin - Net interest margin (NIM) increased by 61 basis points to 6.84% in Q1 2025 from 6.23% in Q1 2024, primarily due to increased yields and balances in the loan and lease portfolio[5]. - Net interest income for the three months ended September 30, 2024, was $116,133 thousand, compared to $115,922 thousand in the previous quarter, reflecting a slight increase of 0.18%[51]. - Net interest income increased to $116,133 thousand in Q4 2024, up from $110,036 thousand in Q4 2023, representing a growth of 5.7%[59]. - Adjusted net interest margin was 5.41% in Q4 2024, up from 4.76% in Q4 2023, indicating a year-over-year improvement[60]. Credit Losses and Allowance - The allowance for credit losses totaled $49.0 million at December 31, 2024, an increase from $45.3 million at September 30, 2024, but a decrease from $53.8 million at December 31, 2023[22]. - The allowance for credit losses (ACL) decreased by $4.8 million year-over-year, primarily due to a $6.0 million decrease in the commercial finance portfolio[23]. - 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 same period in the prior fiscal year[27]. - Net charge-offs for the quarter ended December 31, 2024, were $8.6 million, an increase from $5.5 million for the same quarter in 2023[27]. Deposits and Assets - Total end-of-period deposits decreased by 6% to $6.52 billion at December 31, 2024, compared to $6.94 billion at December 31, 2023[34]. - The average balance of total deposits and interest-bearing liabilities was $6.25 billion for the three-month period ended December 31, 2024, down from $6.71 billion for the same period in the prior fiscal year[33]. - Total assets increased to $7,622,342 thousand as of December 31, 2024, up from $7,549,336 thousand in the previous quarter, representing a growth of 0.97%[49]. - Cash and cash equivalents increased to $597,396 thousand, up from $158,337 thousand in the previous quarter, showing a substantial increase of 276.5%[49]. Capital and Equity - Regulatory capital ratios remained above federal minimum requirements, with the common equity Tier 1 capital ratio at 12.53% as of December 31, 2024[39]. - Total stockholders' equity as of December 31, 2024, is $776,430,000, an increase from $729,282,000 as of December 31, 2023, representing a growth of 6.5% year-over-year[40]. - Common Equity Tier 1 capital stands at $650,272,000 as of December 31, 2024, compared to $581,409,000 a year earlier, reflecting an increase of 12%[40]. - Total capital is $732,008,000 as of December 31, 2024, compared to $667,314,000 as of December 31, 2023, marking an increase of 9.7%[40]. Operational Insights - The company will host a conference call on January 21, 2025, at 4:00 p.m. Central Time to discuss earnings and future outlook[41]. - The quarterly investor update presentation will be available on the company's Investor Relations website, providing insights into financial performance and strategic initiatives[42]. - Pathward Financial aims to enhance financial inclusion through its Partner Solutions and Commercial Finance business lines, focusing on increasing financial availability and choice[43]. - The company emphasizes the importance of maintaining a well-capitalized status and managing risks associated with market fluctuations and regulatory changes[46]. - Forward-looking statements indicate expectations for future operating results, including earnings per diluted share guidance and anticipated growth opportunities[45].