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1. Company Snapshot

1.a. Company Description

Pathward Financial, Inc.operates as the holding company for Pathward, National Association that provides various banking products and services in the United States.It operates through three segments: Consumer, Commercial, and Corporate Services/Other.


The company offers demand deposit accounts, savings accounts, money market savings accounts, and certificate accounts.It also provides commercial finance product comprising term lending, asset based lending, factoring, lease financing, insurance premium finance, government guaranteed lending, and other commercial finance products; consumer credit products; other consumer financing services; short-term taxpayer advance loans; and warehouse financing services.In addition, the company issues prepaid cards and consumer credit products; sponsors merchant acquiring and automated teller machines (ATMs) in various debit networks; and offers tax refund-transfer services, and other payment industry products and services.


The company was formerly known as Meta Financial Group, Inc.and changed its name to Pathward Financial, Inc.in July 2022.


Pathward Financial, Inc.was founded in 1954 and is headquartered in Sioux Falls, South Dakota.

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1.b. Last Insights on CASH

Pathward Financial, Inc.'s recent performance was negatively impacted by the sale of its insurance business, which resulted in a pre-tax loss of $3.9 million and $2.9 million in total after-tax costs related to BOLI restructuring. This unexpected loss likely weighed on the company's results. Additionally, the absence of share buyback activity might have contributed to the negative sentiment, as it would have otherwise provided a boost to earnings per share.

1.c. Company Highlights

2. Pathward Financial's Strong FY2025 Results Exceed Guidance

Pathward Financial reported earnings per diluted share of $7.87 for FY2025, above the high end of the guidance range, representing a 9% year-over-year growth. Net income for the year was $185.9 million. The company's non-interest income increased by 10%, and it expanded its full-year net interest margin and adjusted net interest margin to 7.34% and 5.92%, respectively. For the fourth quarter, earnings per diluted share were $1.69, beating estimates of $1.39, with a 26% year-over-year growth.

Publication Date: Oct -28

📋 Highlights
  • 2025 Earnings Growth:: Earnings per diluted share reached $7.87, up 9% YoY, with net income of $185.9 million.
  • Non-Interest Income Expansion:: Non-interest income grew 10%, while net interest margin (7.34%) and adjusted net interest margin (5.92%) expanded year-over-year.
  • Commercial Finance Growth:: Total loans and leases increased by 14%, driven by structured finance, asset-based lending, and warehouse finance segments.
  • 2026 Guidance:: Maintained EPS guidance of $8.25–$8.75 despite divestitures, supported by $2.3 billion in liquidity and 80–90% payout ratio for share repurchases.
  • Strategic Partnerships:: Expanded partnerships with Trustly, Stripe, Greenlight, and Upstart for personal loans, enhancing Credit Solutions and Consumer segments.

Segment Performance

In the Consumer segment, Pathward entered into agreements with Trustly, Stripe, and Greenlight, and partnered with Upstart to offer personal loans. The Credit Solutions segment had a great year, continuing to invest in technology improvements. Commercial Finance grew total loans and leases by 14%, improving key metrics. As Brett L. Pharr stated, the team stuck to the 2025 strategy and executed day in and day out, achieving significant milestones.

Guidance and Outlook

For FY2026, Pathward aims to maintain an optimized balance sheet, invest in technology, and focus on client experience. The company is maintaining its FY2026 guidance for earnings per diluted share of $8.25 to $8.75. Analysts estimate next year's revenue growth at 2.3%. Despite the sale of the majority of their held-for-investment consumer portfolio, which will put downward pressure on pre-tax income and net interest margin in 2026, the company is reiterating its FY2026 guidance.

Valuation

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.86 (using 'P/B Ratio'), Pathward's valuation appears reasonable compared to its peers. The Net Interest Margin (NIM) of 7.34% is a strong indicator of the company's profitability. The Dividend Yield is 0.29%, which may not be attractive to income-seeking investors. Considering the ROE of 22.58%, the company's profitability is strong, and the P/E Ratio of 8.59 is relatively low, indicating potential undervaluation.

3. NewsRoom

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Pathward Introduces Evolved Operating Model, Next Step in Sponsor Banking

Dec -04

Source: businesswire.com

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OLD REPUBLIC DECLARES FOURTH QUARTER REGULAR CASH DIVIDEND OF 29 CENTS PER SHARE

Nov -25

Source: prnewswire.com

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Chief Legal and Admin Officer of Pathward Financial Sells Nearly Half Her Stock Holding

Nov -21

Source: fool.com

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J & J SNACK FOODS CORP. ANNOUNCES QUARTERLY CASH DIVIDEND

Nov -20

Source: globenewswire.com

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KEYCORP DECLARES QUARTERLY CASH DIVIDEND ON COMMON SHARES AND PREFERRED STOCKS

Nov -20

Source: prnewswire.com

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Pathward Financial, Inc. Declares Cash Dividend

Nov -20

Source: businesswire.com

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Pathward Tax Call Center Wins Global Contact Center Award

Nov -20

Source: businesswire.com

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PIEDMONT REALTY TRUST ANNOUNCES PRICING OF CASH TENDER OFFER FOR ANY AND ALL OF ITS OUTSTANDING 9.250% SENIOR NOTES DUE 2028

Nov -19

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.08%)

6. Segments

Consumer

Expected Growth: 5%

Consumer segment of Pathward Financial, Inc. exhibits 5% growth driven by increasing adoption of digital banking services, rising demand for personal loans, and expanding credit card offerings. Additionally, strategic partnerships and targeted marketing efforts contribute to the growth, as well as the company's focus on underserved communities.

Commercial

Expected Growth: 5%

Pathward Financial's commercial segment growth is driven by increasing demand for digital banking solutions, expansion into new markets, strategic partnerships, and investments in technology infrastructure. Additionally, the company's focus on customer experience, competitive pricing, and diversified product offerings contribute to its 5% growth rate.

Corporate Services/Other

Expected Growth: 6%

Pathward Financial's Corporate Services/Other segment growth of 6% is driven by increasing demand for digital payment solutions, expansion of commercial lending services, and strategic partnerships. Additionally, the company's investments in technology and operational efficiency have improved customer experience, leading to increased adoption and retention rates.

7. Detailed Products

Digital Banking

A digital banking platform that provides online and mobile banking services to customers, enabling them to manage their finances, pay bills, and transfer funds.

Commercial Lending

A commercial lending service that provides financing solutions to businesses, including term loans, lines of credit, and commercial mortgages.

Treasury Management

A treasury management service that provides cash management solutions to businesses, including account management, payment processing, and fraud protection.

Payment Processing

A payment processing service that enables businesses to accept payments online, in-store, or on-the-go.

Card Services

A card services program that provides credit, debit, and prepaid card solutions to businesses and consumers.

Consumer Lending

A consumer lending service that provides personal loans, credit cards, and other financing solutions to individuals.

Mortgage Lending

A mortgage lending service that provides home loan solutions to individuals, including purchase, refinance, and home equity loans.

8. Pathward Financial, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Pathward Financial, Inc. operates in a highly competitive industry, and customers have various alternatives to choose from. However, the company's strong brand recognition and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

Pathward Financial, Inc. has a large customer base, but individual customers have significant bargaining power due to the availability of alternative financial services providers.

Bargaining Power Of Suppliers

Pathward Financial, Inc. has a diversified supplier base, and no single supplier has significant bargaining power over the company.

Threat Of New Entrants

While there are barriers to entry in the financial services industry, new entrants can still disrupt the market. Pathward Financial, Inc. must continue to innovate to stay competitive.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players and new entrants vying for market share. Pathward Financial, Inc. must differentiate itself through its products and services to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 6.71%
Debt Cost 7.26%
Equity Weight 93.29%
Equity Cost 7.26%
WACC 7.26%
Leverage 7.19%

11. Quality Control: Pathward Financial, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Guaranty Bancshares

A-Score: 7.2/10

Value: 4.9

Growth: 5.6

Quality: 7.8

Yield: 8.0

Momentum: 9.5

Volatility: 7.3

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Hanover Bancorp

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Quality: 6.2

Yield: 4.0

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Volatility: 8.0

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FirstBank

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Quality: 5.9

Yield: 4.0

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Plumas Bank

A-Score: 6.1/10

Value: 3.8

Growth: 6.9

Quality: 7.4

Yield: 5.0

Momentum: 6.5

Volatility: 7.3

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Eagle Bancorp Montana

A-Score: 6.1/10

Value: 6.9

Growth: 5.2

Quality: 3.4

Yield: 6.0

Momentum: 6.0

Volatility: 9.0

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Pathward Financial

A-Score: 5.7/10

Value: 8.7

Growth: 4.2

Quality: 8.2

Yield: 0.0

Momentum: 5.0

Volatility: 8.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

74.36$

Current Price

74.36$

Potential

-0.00%

Expected Cash-Flows