Pathward Financial Q4 net interest income falls on lower credit sponsorship

Overview

• U.S. financial holding company's fiscal Q4 net income and EPS were nearly flat yr/yr

• Fiscal Q4 net interest income fell 8% yr/yr due to lower credit sponsorship and warehouse finance income

• Noninterest income rose 12% and noninterest expense fell 10% in the quarter

Outlook

• Pathward sees opportunities for revenue growth from Payments Sponsorship pipeline in fiscal 2027

• Company anticipates impacts from technology investments and improved data analytics in fiscal 2027

• Pathward expects to focus on credit performance and nonperforming loan resolutions in fiscal 2027

Result Drivers

• COMMERCIAL FINANCE ORIGINATIONS - Co said strong structured finance originations drove higher commercial finance loan income

• CARD AND DEPOSIT FEES - Co attributed noninterest income growth to higher card and deposit fee income

• EXPENSE MANAGEMENT - Co said lower noninterest expense was due to disciplined expense management

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Pathward Financial Inc is $97.50, about 31.9% above its October 20 closing price of $73.93

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 9 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)