Company Overview - Pathward Financial is a diversified financial services provider focusing on innovative banking and payment solutions, leveraging expertise in commercial and consumer finance to drive growth and maintain a competitive position within the U.S. regional banking sector [8] - The company reported trailing-12-month revenue of $724.3 million and net income of $191.0 million as of September 30, 2025 [6][4] - As of January 20, 2026, shares of Pathward Financial were priced at $74.18, reflecting a 5.16% decline over the past year, underperforming the S&P 500 Index by 17.67 percentage points [4][6] Recent Transaction - On January 20, 2026, Shepherd Wealth Management liquidated its entire position in Pathward Financial, selling 15,726 shares for an estimated transaction value of $10.06 million [2][4] - Following this sale, Pathward Financial represented 0% of Shepherd's reported assets under management (AUM), down from 6.7% in the previous quarter [4] Market Position and Performance - Pathward Financial's market capitalization is approximately $1.95 billion, with a current price of $74.18 [6][4] - The company's dividend yield stood at 0.27% as of January 20, 2026 [4] - The stock's 52-week range was between $64.45 and $88.66, with a trading volume of 181K and an average volume of 222K [5] Strategic Insights - The liquidation of Pathward Financial shares by Shepherd Wealth Management indicates a significant strategic overhaul, with the firm reallocating its investments towards water resources, which now constitute 27% of its portfolio [10][11] - This shift suggests a potential belief in better opportunities within water infrastructure and nuclear energy compared to traditional tech growth stocks [11]

Financial Data and Key Metrics Changes - The quarterly net income reached COP 1.7 trillion, reflecting a 4.5% growth both quarterly and annually [5][29] - The return on equity (ROE) for the quarter was 16.3%, with a return on tangible equity of 20.4% [30] - The loan portfolio decreased slightly this quarter but grew 7% annually [5][21] - Deposits fell by 1% in the quarter yet increased almost 13% annually [6][22] - The cost of risk for the period was 1.6%, showing improved asset quality [6][27] Business Line Data and Key Metrics Changes - The retail segment saw an increase in market share in savings accounts and time deposits by 110 basis points as of February 2025 [16] - NEKI's deposits experienced a significant growth of 70% year over year [18] - Credit card loans market share increased by 20 basis points, representing nearly 30% of transaction value [18] Market Data and Key Metrics Changes - The Colombian economy showed signs of recovery with increased investment and domestic demand despite global trade tensions [4] - Inflation rates remained stable, leading to unchanged interest rates during the quarter [4] - The exchange rate depreciated up to 8% during March, impacting local assets [12] Company Strategy and Development Direction - The merger of Bancolombia ALA MANO with NEKI aims to enhance financial inclusion and meet evolving technological needs [14] - The company plans to distribute an extraordinary dividend of $6.24 per share, resulting in a total dividend payout of 69% for the year [7] - A share buyback program is planned for approval at an upcoming extraordinary shareholders meeting [8] Management's Comments on Operating Environment and Future Outlook - Management maintains a GDP growth expectation of 2.6% for 2025, with a slight increase to 3% in 2026 [11] - The fiscal situation in Colombia is viewed as a significant challenge, with a projected fiscal deficit of 5.9% of GDP [51][53] - The company remains cautious regarding the cost of risk due to macroeconomic uncertainties [69] Other Important Information - The company achieved a total solvency ratio of nearly 13% and a core equity Tier one ratio of 11.2% [7][30] - The transition to the Mibanco Columbia App has enhanced customer experience, with 8.5 million users migrated [8] Q&A Session Summary Question: Regarding personal expenses and bonus line tracking above inflation - Management explained that the first quarter's higher provisions for bonuses were due to improved net income expectations compared to the previous year [39] Question: On margins and funding optimization - Management acknowledged the competitive environment for funding but expressed confidence in maintaining net interest margin (NIM) guidance of around 6.2% [37][38] Question: Political and economic outlook in Colombia - Management indicated that the fiscal situation is a key challenge, with expectations for a clearer political landscape by the end of the year [50][51] Question: ROE targets among subsidiaries - Management provided ROE targets of above 20% for Banco Agricola in El Salvador, above 10% for Banismo in Panama, and around 14-15% for BAM in Guatemala [57][59] Question: Impact of lower oil prices on GDP and fiscal forecast - Management maintained the GDP growth expectation of 2.6% but acknowledged potential revisions due to lower oil prices impacting fiscal revenues [66] Question: Provisions and growth relationship - Management confirmed guidance for commercial loans growing at 4%, mortgage loans at 4.5%, and consumer loans at 8% [83]