Pathward Financial(US:CASH)2025-10-21 20:10Financial Performance - For the fiscal year ended September 30, 2025, net income was $185.9 million, or $7.87 per share, compared to $183.2 million, or $7.20 per share, for the prior year, reflecting a growth of 1.5% in net income[2] - Total revenue for the fourth quarter was $186.7 million, an increase of $7.2 million, or 4%, compared to the same quarter in fiscal 2024, driven by a 13% increase in noninterest income[4] - Noninterest income for the fourth quarter increased 13% to $58.8 million, compared to $52.0 million for the same period of the prior year, mainly due to higher secondary market revenue and card fees[9] - Total noninterest income for the fiscal year ended September 30, 2025, was $328,100, up from $299,587 in the previous year, representing a growth of 9.5%[44] - Net income attributable to common shareholders for the three months ended September 30, 2025, was $38,664, compared to $41,996 in the previous quarter, a decrease of 5.5%[44] - Earnings per common share (basic) for the three months ended September 30, 2025, was $1.70, down from $1.83 in the previous quarter[44] Asset Quality - The allowance for credit losses (ACL) totaled $53.3 million at September 30, 2025, a decrease from $106.0 million at June 30, 2025, driven by a reduction in the consumer finance portfolio[17] - The Company's ACL as a percentage of total loans and leases decreased to 1.14% at September 30, 2025, from 2.23% at June 30, 2025[20] - The Company recognized a reversal of provision for credit losses of $6.4 million for the quarter ended September 30, 2025, compared to a provision of $8.7 million for the same period in the prior fiscal year[22] - Net charge-offs for the quarter ended September 30, 2025, were $46.2 million, compared to $44.0 million for the same quarter in 2024[22] - Nonperforming assets increased to $101.7 million, or 1.42% of total assets, at September 30, 2025, compared to $74.7 million, or 1.03% at June 30, 2025[25] - Nonperforming loans and leases at September 30, 2025, were $99.1 million, representing 2.05% of total gross loans and leases[27] Capital and Liabilities - Total liabilities as of September 30, 2025, were $6,314,890, a decrease from $6,411,696 in June 30, 2025[41] - Total stockholders' equity reached $857,454 thousand as of September 30, 2025, compared to $822,189 thousand a year ago, reflecting a growth of 4.3%[33] - As of September 30, 2025, the Common Equity Tier 1 capital ratio is 12.70%, an increase from 12.15% a year earlier[33] - The Tier 1 leverage capital ratio improved to 9.79% as of September 30, 2025, up from 8.90% a year earlier[33] - The Total capital ratio stands at 14.27% as of September 30, 2025, compared to 14.04% a year ago, indicating a positive trend in capital adequacy[33] Deposits and Loans - Total gross loans and leases at September 30, 2025, increased to $4.66 billion, up $589.7 million from September 30, 2024, but decreased by $78.4 million compared to June 30, 2025[4][16] - The average balance of total deposits and interest-bearing liabilities was $6.27 billion for the three-month period ended September 30, 2025, compared to $6.38 billion for the same period in the prior fiscal year[28] - Total end-of-period deposits increased slightly to $5.89 billion at September 30, 2025, compared to $5.88 billion at September 30, 2024[29] - The Company experienced a decrease in wholesale deposits, partially offset by an increase in noninterest-bearing deposits[28] - Loans and leases outstanding as of September 30, 2025, were $4,664,908, a slight decrease from $4,743,324 in June 30, 2025[41] Operational Efficiency and Future Outlook - The Company is focused on improving data analytics and underwriting processes to enhance operational efficiency and customer retention[39] - Forward-looking statements indicate expectations for fiscal year 2026, including performance goals and strategic initiatives[39] - The Company aims to enhance financial inclusion through its Partner Solutions and Commercial Finance business lines[36] - The Company emphasizes the importance of maintaining a well-capitalized status to support growth and manage risks effectively[40] - The Company will host a conference call on October 21, 2025, to discuss earnings and future outlook[34] Interest Income and Margin - The net interest margin (NIM) increased to 7.46% for the fourth quarter from 7.32% during the same period last year, primarily due to an improved earning asset mix[4] - Net interest income for the three months ended September 30, 2025, was $127,952, compared to $122,313 for the previous quarter, reflecting an increase of 5.3%[44] - Adjusted net interest margin for Q3 2025 was 6.04%, up from 5.91% in Q3 2024, indicating an improvement in profitability metrics[52] - The net interest margin improved to 7.46% in Q3 2025 compared to 7.32% in Q3 2024, representing an increase of 14 basis points[49] Other Financial Metrics - Cash and cash equivalents as of September 30, 2025, were $120,568, a decrease from $258,343 in June 30, 2025[41] - Total assets as of September 30, 2025, were $7,172,344, a slight decrease from $7,229,844 in June 30, 2025[41] - Total assets decreased to $7,374,276 thousand in Q3 2025 from $7,481,835 thousand in Q3 2024, a decline of approximately 1.4%[47] - Average interest-earning assets were $6,803,398 thousand in Q3 2025, compared to $6,602,267 thousand in Q2 2025, showing an increase of about 3.04%[51] - Total liabilities decreased to $6,561,071 thousand in Q3 2025 from $6,698,950 thousand in Q3 2024, a reduction of approximately 2.05%[49]