CASH Shareholder/Stockholder Letter Transcript:
2024
ANNUAL REPORT
INVESTOR INFORMATION
ANNUAL MEETING OF STOCKHOLDERS
STOCKHOLDER SERVICES
The Annual Meeting of Stockholders will convene at 9:00 a.m.
Central Standard Time on Tuesday, February 25, 2025. The meeting
will be held virtually via the internet. Further information with regard
to this meeting can be found in the proxy statement.
Stockholders desiring to change the name, address or ownership of
stock; to report lost certi cates; or to consolidate accounts should
contact the corporation s transfer agent:
Computershare Investor Services
150 Royall St., Suite 101
Canton, MA 02021
FORM 10-K
Copies of the Company s Annual Report on Form 10-K for the year
ended September 30, 2024 (excluding exhibits thereto) included
in this document may also be obtained, without charge, from
pathward nancial.com
INVESTOR RELATIONS
Requests for Form 10-K, other inquiries or investor comments are
welcome and should be directed to:
Pathward Corporate Services
Darby Schoenfeld, CPA
SVP, Chief of Staff and Investor Relations
5501 South Broadband Lane
Sioux Falls, SD 57108
Telephone: 877.497.7497
investorrelations@pathward.com
pathward nancial.com
ABOUT PATHWARD FINANCIAL, INC.
Pathward Financial, Inc. (Nasdaq: CASH) is a U.S.-based nancial holding company driven by its purpose to power nancial inclusion.
Through our subsidiary, Pathward , N.A., we strive to increase nancial availability, choice, and opportunity across our Banking as a Service
and Commercial Finance business lines. These strategic business lines provide support to individuals and businesses. Learn more at
www.pathward nancial.com.
A MESSAGE FROM
CHIEF EXECUTIVE OFFICER
BRETT PHARR
TO MY FELLOW STOCKHOLDERS,
2024 was a great year for Pathward. We re-certi ed as a Great Place to Work, remained committed to our remote rst
approach, announced new partnerships and extended others, celebrated employees who won multiple awards, and
announced that our newly rebranded Partner Solutions team won Finovate s Best Banking as a Service provider. In addition,
we continue to deliver on our purpose of Financial Inclusion as we help consumers and small to medium-size businesses
with access to the nancial markets.
These successes translated into solid nancial results as well. We reported earnings per diluted share of $6.62 for the scal
year, representing year-over-year growth of 11%. Our results were driven in part by an increase in net interest income of 17%
when compared to last year. We also expanded our full year net interest margin and adjusted net interest margin, which
includes contractual, rate-related processing expense, to 6.41% and 4.85%, respectively. Performance metrics remain strong
with return on average assets for the year of 2.2% and return on average tangible equity of 41.7%.
$168.4M
NET INCOME
$6.62
DILUTED EARNINGS
PER SHARE
3%
2.2%
RETURN ON
AVERAGE ASSETS
11%
2024 EXECUTION ON STRATEGY
In scal year 2024, we sharpened our focus on long-term strategic goals and took action to set ourselves up for future success.
We remained focused on managing the balance sheet, which allowed us to grow our bottom line while remaining under
the $10 billion Durbin-exemption limit on assets. We continued to expand our Partner Solutions business and celebrated
our 20th anniversary in the payments space during the scal year. We also launched new products, signed new business
deals, and extended contracts with some of our existing partners. The growth of this business drives sustainable non-interest
income and stable deposits, the latter of which we then deploy into loans and leases in our Commercial Finance, Consumer
Lending and Independent Tax businesses.
Our lending portfolios remain focused on achieving the highest risk adjusted returns for the deposits we deploy. We have
seen signi cant growth in our Structured Finance originations, including both SBA and USDA loans, and we moved up
almost 80 places to be the 39th largest SBA 7(a) program lender in the country for scal year 2024. During the scal year, we
announced the sale of our Insurance Premium Finance business, which subsequently closed in October of 2024. This was a
strategic decision in line with our goal of simpli cation and will allow us to accelerate our rotation into higher yielding assets
in verticals where we believe we have a competitive advantage.
OUR COMMITMENT TO RISK AND COMPLIANCE
In scal 2024, as we predicted, we entered a cycle of regulatory scrutiny that has started to change our industry. We continue
to believe that the payments industry requires a practiced culture of risk and compliance, the necessary infrastructure to
support it, and the human capital to power it. We also continue to believe that we have the culture and the commitment to
maintain and operate a risk framework that will effectively manage greater demands and standards. As a part of that, we
continuously work to improve this framework. This includes focusing on people, processes and technology, as we do in the
rest of the Company, and contributing to our goal of being the trusted platform that enables our partners to thrive.
In our view, doing our part in keeping the banking system safe and sound while creating opportunities for the unbanked
or underbanked to access the nancial system in a fashion that meets their needs is necessary, and ties directly back to our
purpose of Financial Inclusion which our employees work tirelessly to accomplish.
OUR PURPOSE
Throughout my time at Pathward, we have been dedicated to helping those who are seemingly overlooked by traditional
nancial institutions and are underserved by the banking system. We support this effort for both individual consumers and
small to medium-sized businesses by operating at the intersection of banking and nancial technology. On the consumer
side, in Partner Solutions, we enable our partners and work closely with them to develop nancial products and support their
entrepreneurial spirits, which in turn creates nancial products that meet customers where and how they want to be met. In
Commercial Finance, we work with businesses that may need exible solutions and a personalized approach that provides
our clients with funding options to grow, expand and thrive.
In addition, we contribute a signi cant amount of our time to giving back. We support community outreach, volunteering,
targeted charitable investments in the locations in which we operate, and provide charitable investments to nonpro t
organizations. We have additional programs that help our employees volunteerism go further, such as Dollars for Doers,
where employees can earn up to $480 per year for an organization of their choice, and Employee Matching, where the
company will double the impact of employee contributions to eligible nonpro ts.
Being able to give back through daily contributions to a business that supports the social purpose of Financial Inclusion and
being supported in their volunteer efforts is something that resonates with Pathward employees. We have built a culture
based on our purpose, vision and values, and that contributes to our ability to be successful.
LOOKING FORWARD TO FISCAL 2025
Our goal is to be the trusted platform that enables our partners to thrive, giving us the ability to grow. We believe this growth
will come in two forms. In Commercial Finance, we will continue our focus on maintaining a right-sized balance sheet with
an optimized asset mix, favoring asset rotation into the highest yielding portfolios where we believe we have a competitive
advantage or that provides us with optionality. This will include shrinking the securities portfolio in favor of loans. However,
we will maintain our current credit standards and discipline around collateralized lending. This should allow us to increase
our net interest margin as well as net interest income.
In Partner Solutions, we are focused on creating a portfolio of product offerings that we can offer to our partners, making us a
comprehensive source for all their growth needs. As a result, we are constantly investing in technology, which enables us to
provide scalable solutions to our partners more ef ciently than we are today and innovate alongside them. This also puts us
in a position to generate an increasing amount of noninterest income that is not dependent on growing the balance sheet.
We also continue to work on taking market share in our Independent Tax business and growing our Credit Solutions business,
where we give our partners the ability to offer secure lending solutions to their customers. We believe that this strategy will
help us deliver stockholder value for you.
The Board and management are committed to our purpose and strategy and believe this is the correct path forward for the
Company. As Chief Executive Of cer of Pathward Financial, I appreciate your continued con dence and support.
Sincerely,
Bret t Pharr
Chief Executive Of cer
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1/15/2025 Letter Continued (Full PDF)