Cover Page - USD ($) $ in Millions	12 Months Ended
Cover Page - USD ($) $ in Millions	Sep. 30, 2024	Nov. 20, 2024	Mar. 31, 2024
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Sep. 30, 2024
Current Fiscal Year End Date	--09-30
Document Transition Report	false
Entity File Number	0-22140
Entity Registrant Name	PATHWARD FINANCIAL, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	42-1406262
Entity Address, Address Line One	5501 South Broadband Lane
Entity Address, City or Town	Sioux Falls
Entity Address, State or Province	SD
Entity Address, Postal Zip Code	57108
City Area Code	877
Local Phone Number	497-7497
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	CASH
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 1,270
Entity Common Stock, Shares Outstanding (in shares)		24,119,508
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE PART III of Form 10-K -- Portions of the Proxy Statement for the Annual Meeting of Stockholders expected to be held February 25, 2025 are incorporated by reference into Part III of this report.
Entity Central Index Key	0000907471
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	FY
Amendment Flag	false

Audit Information	12 Months Ended
Audit Information	Sep. 30, 2024
Audit Information [Abstract]
Auditor Name	Crowe LLP
Auditor Firm ID	173
Auditor Location	Chicago, Illinois

Consolidated Statements of Financial Condition - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
ASSETS
Cash and cash equivalents	$ 158,337	$ 375,580
Securities available for sale, at fair value	1,741,221	1,804,228
Securities held to maturity, at amortized cost (fair value $30,236 and $31,425, respectively)	33,092	36,591
Federal Reserve Bank and Federal Home Loan Bank Stock, at cost	36,014	28,210
Loans held for sale	688,870	77,779
Loans and leases	4,075,195	4,366,116
Allowance for credit losses	(45,336)	(49,705)
Accrued interest receivable	31,385	23,282
Premises, furniture, and equipment, net	39,055	39,160
Rental equipment, net	205,339	211,750
Goodwill and intangible assets	326,094	330,225
Other assets	260,070	292,327
Total assets	7,549,336	7,535,543
LIABILITIES
Deposits	5,875,085	6,589,182
Short-term borrowings	377,000	13,000
Long-term borrowings	33,354	33,873
Accrued expenses and other liabilities	424,292	248,863
Total liabilities	6,709,731	6,884,918
STOCKHOLDERS’ EQUITY
Preferred stock, 3,000,000 shares authorized, no shares issued, none outstanding at September 30, 2024 and 2023, respectively	0	0
Additional paid-in capital	638,803	628,500
Retained earnings	354,474	278,655
Accumulated other comprehensive loss	(153,394)	(255,443)
Treasury stock, at cost, 3,769 and 41,980 common shares at September 30, 2024 and 2023, respectively	(249)	(344)
Total equity attributable to parent	839,882	651,630
Noncontrolling interest	(277)	(1,005)
Total stockholders’ equity	839,605	650,625
Total liabilities and stockholders’ equity	7,549,336	7,535,543
Common stock, $0.01 par value; 90,000,000 shares authorized, 24,851,122 and 26,225,563 shares issued, 24,847,353 and 26,183,583 shares outstanding at September 30, 2024 and 2023, respectively
STOCKHOLDERS’ EQUITY
Common stock	248	262
Common stock, Nonvoting, $0.01 par value; 3,000,000 shares authorized, no shares issued, none outstanding at September 30, 2024 and 2023, respectively
STOCKHOLDERS’ EQUITY
Common stock	$ 0	$ 0

Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
STOCKHOLDERS’ EQUITY
Investment securities held to maturity, fair value	$ 30,236	$ 31,425
Preferred stock, shares authorized (in shares)	3,000,000	3,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Treasury stock (in shares)	3,769	41,980
Common stock, $0.01 par value; 90,000,000 shares authorized, 24,851,122 and 26,225,563 shares issued, 24,847,353 and 26,183,583 shares outstanding at September 30, 2024 and 2023, respectively
STOCKHOLDERS’ EQUITY
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	90,000,000	90,000,000
Common stock, shares issued (in shares)	24,851,122	26,225,563
Common stock, shares outstanding (in shares)	24,847,353	26,183,583
Common stock, Nonvoting, $0.01 par value; 3,000,000 shares authorized, no shares issued, none outstanding at September 30, 2024 and 2023, respectively
STOCKHOLDERS’ EQUITY
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	3,000,000	3,000,000
Common stock, shares issued (in shares)	0	0
Common stock, shares outstanding (in shares)	0	0

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Interest and dividend income:
Loans and leases, including fees	$ 395,876	$ 323,602	$ 268,078
Mortgage-backed securities	39,402	41,197	26,846
Other investments	41,073	33,936	17,272
Total interest and dividend income	476,351	398,735	312,196
Interest expense:
Deposits	13,019	4,356	500
FHLB advances and other borrowings	8,214	6,518	4,372
Total interest expense	21,233	10,874	4,872
Net interest income	455,118	387,861	307,324
Provision for credit loss	42,661	57,354	28,538
Net interest income after provision for credit loss	412,457	330,507	278,786
Noninterest income:
Gain on sale of trademarks	0	10,000	50,000
Gain (loss) on sale of other	12,669	2,663	(6,207)
Other income	23,167	22,115	17,357
Total noninterest income	299,587	316,599	293,807
Noninterest expense:
Compensation and benefits	201,472	184,318	171,126
Refund transfer product expense	9,862	9,723	8,908
Refund advance expense	1,943	1,863	2,157
Card processing	137,938	105,498	38,785
Occupancy and equipment expense	36,587	34,691	34,909
Operating lease equipment depreciation	41,757	45,710	35,636
Legal and consulting	24,857	27,102	40,634
Intangible amortization	4,131	4,971	6,585
Impairment expense	3,012	3,273	670
Other expense	51,694	47,826	45,865
Total noninterest expense	513,253	464,975	385,275
Income before income tax expense	198,791	182,131	187,318
Income tax expense	29,141	16,324	27,964
Net income before noncontrolling interest	169,650	165,807	159,354
Net income attributable to noncontrolling interest	1,293	2,192	2,968
Net income attributable to parent	$ 168,357	$ 163,615	$ 156,386
Earnings per common share:
Basic (in dollars per share)	$ 6.63	$ 6.01	$ 5.26
Diluted (in dollars per share)	$ 6.62	$ 5.99	$ 5.26
Refund transfer product fees
Noninterest income:
Noninterest income:	$ 40,178	$ 39,452	$ 39,809
Refund advance fee income
Noninterest income:
Noninterest income:	43,473	37,433	40,557
Card and deposit fees
Noninterest income:
Noninterest income:	125,943	150,746	105,733
Rental income
Noninterest income:
Noninterest income:	$ 54,157	$ 54,190	$ 46,558

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income before noncontrolling interest	$ 169,650	$ 165,807	$ 159,354
Other comprehensive income (loss):
Change in net unrealized gain (loss) on debt securities	136,028	(56,255)	(292,665)
Other comprehensive income (loss), investments	136,028	(56,255)	(292,665)
Unrealized gain (loss) on currency translation	81	331	(1,736)
Deferred income tax effect	34,060	(13,561)	(73,722)
Total other comprehensive income (loss)	102,049	(42,363)	(220,679)
Total comprehensive income (loss)	271,699	123,444	(61,325)
Total comprehensive income attributable to noncontrolling interest	1,293	2,192	2,968
Comprehensive income attributable to parent	$ 270,406	$ 121,252	$ (64,293)

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Total Pathward Financial, Inc. Stockholders’ Equity	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Noncontrolling interest
Beginning Balance at Sep. 30, 2021	$ 871,884	$ 870,729	$ 317	$ 604,484	$ 259,189	$ 7,599	$ (860)	$ 1,155
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cash dividends declared on common stock	(5,921)	(5,921)			(5,921)
Issuance of common stock due to ESOP	2,886	2,886	1	2,885
Repurchases of common stock	(168,235)	(168,235)	(30)	30	(164,260)		(3,975)
Stock compensation	10,004	10,004		10,004
Total other comprehensive income (loss)	(220,679)	(220,679)				(220,679)
Net income	159,354	156,386			156,386			2,968
Net distribution to noncontrolling interest	(4,153)							(4,153)
Ending Balance at Sep. 30, 2022	645,140	645,170	288	617,403	245,394	(213,080)	(4,835)	(30)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cash dividends declared on common stock	(5,426)	(5,426)			(5,426)
Issuance of common stock due to restricted stock	1	1	1
Repurchases of common stock	(120,437)	(120,437)	(27)	27	(117,985)		(2,452)
Retirement of treasury stock	0				(6,943)		6,943
Stock compensation	11,070	11,070		11,070
Total other comprehensive income (loss)	(42,363)	(42,363)				(42,363)
Net income	165,807	163,615			163,615			2,192
Net distribution to noncontrolling interest	(3,167)							(3,167)
Ending Balance at Sep. 30, 2023	650,625	651,630	262	628,500	278,655	(255,443)	(344)	(1,005)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cash dividends declared on common stock	(5,067)	(5,067)			(5,067)
Issuance of common stock due to restricted stock	3	3	3
Repurchases of common stock	(86,853)	(86,853)	(17)	17	(80,767)		(6,086)
Retirement of treasury stock	0				(6,181)		6,181
Stock compensation	10,286	10,286		10,286
Total other comprehensive income (loss)	102,049	102,049				102,049
Joint venture membership interest divestiture	(523)	(523)			(523)
Net income	169,650	168,357			168,357			1,293
Net distribution to noncontrolling interest	(565)							(565)
Ending Balance at Sep. 30, 2024	$ 839,605	$ 839,882	$ 248	$ 638,803	$ 354,474	$ (153,394)	$ (249)	$ (277)

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended												12 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Statement of Stockholders' Equity [Abstract]
Dividend declared per share (in dollars per share)	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.20	$ 0.20	$ 0.20

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net income before noncontrolling interest	$ 169,650,000	$ 165,807,000	$ 159,354,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	57,765,000	64,955,000	61,601,000
Provision for credit loss	42,661,000	57,354,000	28,538,000
Provision for deferred taxes	11,115,000	(175,000)	17,587,000
Originations of loans held for sale	(2,034,977,000)	(1,208,684,000)	(985,330,000)
Proceeds from sales of loans held for sale	2,036,084,000	1,139,881,000	1,059,361,000
Net change in loans held for sale	18,127,000	25,922,000	12,819,000
Fair value adjustment of foreclosed real estate	0	0	301,000
Net realized (gain) on securities available for sale	0	0	(154,000)
Net realized (gain) loss on loans held for sale	(5,920,000)	(268,000)	3,694,000
Net realized loss on premise, furniture, and equipment	0	65,000	55,000
Net realized (gain) on trademarks	0	(10,000,000)	(50,000,000)
Net realized (gain) on other	(6,749,000)	(1,832,000)	(1,956,000)
Change in bank-owned life insurance value	(2,751,000)	(1,497,000)	(2,434,000)
Impairment on rental equipment	2,013,000	24,000	0
Impairment of intangibles	0	0	670,000
Net change in accrued interest receivable	(8,103,000)	(5,303,000)	(1,725,000)
Net change in other assets	(11,747,000)	17,134,000	(32,936,000)
Net change in accrued expenses and other liabilities	176,083,000	48,658,000	(10,640,000)
Stock compensation	10,286,000	11,070,000	10,004,000
Net cash provided by operating activities	453,537,000	303,111,000	268,809,000
Cash flows from investing activities:
Purchases of securities available for sale	(3,465,000)	(156,885,000)	(907,361,000)
Proceeds from sales of securities available for sale	0	0	265,951,000
Proceeds from maturities of and principal collected on securities available for sale	201,730,000	177,296,000	324,234,000
Proceeds from maturities of and principal collected on securities held to maturity	3,317,000	4,835,000	14,281,000
Purchases of Federal Reserve Bank and Federal Home Loan Bank stock	(406,390,000)	(330,144,000)	(173,653,000)
Redemption of Federal Reserve Bank and Federal Home Loan Bank stock	398,587,000	330,746,000	173,240,000
Purchases of loans and leases	(298,262,000)	(215,266,000)	(115,353,000)
Proceeds from sales of loans and leases	0	0	123,241,000
Net change in loans and leases	137,540,000	(307,473,000)	358,635,000
Purchases of premises, furniture, and equipment	(10,141,000)	(8,623,000)	(8,177,000)
Proceeds from sales of premises, furniture, and equipment	0	0	35,000
Purchases of rental equipment	(266,613,000)	(441,047,000)	(424,919,000)
Proceeds from sales of rental equipment	9,006,000	14,998,000	9,372,000
Net change in rental equipment	565,000	(236,000)	(5,772,000)
Proceeds from sales of foreclosed real estate and repossessed assets	0	1,000	1,824,000
Proceeds from death benefit of bank-owned life insurance	0	1,040,000	0
Proceeds from sale of trademarks	0	10,000,000	50,000,000
Proceeds from sale of other assets	6,465,000	0	3,550,000
Net cash (used in) investing activities	(227,661,000)	(920,758,000)	(310,872,000)
Cash flows from financing activities:
Net change in deposits	(714,097,000)	723,145,000	351,066,000
Net change in short-term borrowings	364,000,000	13,000,000	0
Redemption of long-term borrowings	0	0	(75,000,000)
Proceeds from long-term borrowings	0	0	20,000,000
Principal payments on capital lease obligations	0	0	(75,000)
Principal payments on other liabilities	(621,000)	(1,747,000)	(2,751,000)
Payment of debt issuance costs	0	(511,000)	0
Dividends paid on common stock	(5,067,000)	(5,426,000)	(5,921,000)
Issuance of common stock due to restricted stock	3,000	1,000	1,000
Issuance of common stock due to ESOP	0	0	2,886,000
Repurchases of common stock	(86,853,000)	(120,437,000)	(168,235,000)
Investment by (distributions to) noncontrolling interest	(565,000)	(3,167,000)	(4,153,000)
Net cash provided by (used in) financing activities	(443,200,000)	604,858,000	117,818,000
Effect of exchange rate changes on cash	81,000	331,000	(1,736,000)
Net change in cash and cash equivalents	(217,243,000)	(12,458,000)	74,019,000
Cash and cash equivalents at beginning of fiscal year	375,580,000	388,038,000	314,019,000
Cash and cash equivalents at end of fiscal period	158,337,000	375,580,000	388,038,000
Supplemental disclosure of cash flow information:
Interest	20,909,000	10,819,000	5,259,000
Income taxes	19,633,000	14,056,000	13,940,000
Franchise and other taxes	726,000	1,359,000	791,000
Supplemental schedule of non-cash investing activities:
Held for sale to loans and leases	30,864,000	158,000	115,934,000
Loans and leases to held for sale	594,359,000	13,421,000	169,045,000
Loans and leases to rental equipment	4,847,000	3,122,000	3,893,000
Loans and leases to foreclosed real estate and repossessed assets	0	0	49,000
Rental equipment to loan and leases	225,870,000	377,250,000	400,148,000
Recognition of operating lease ROU assets, net of measurements	654,000	0	117,000
Retirement of treasury stock	$ 6,181,000	$ 6,943,000	$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The Consolidated Financial Statements include the accounts of Pathward Financial, Inc. ("Pathward Financial" or the “Company” or "us"), a registered bank holding company located in Sioux Falls, South Dakota, and its wholly-owned subsidiaries. The Company's subsidiaries include Pathward®, National Association ("Pathward®, N.A." or "Pathward" or the “Bank”), a national bank whose primary federal regulator is the Office of the Comptroller of the Currency (the "OCC"), and Pathward Venture Capital, LLC, a wholly-owned service corporation subsidiary of Pathward, N.A. which invests in companies in the financial services industry. All significant intercompany balances and transactions have been eliminated. The Company also owns 100% of First Midwest Financial Capital Trust I (the “Trust”), which was formed in July 2001 for the purpose of issuing trust preferred securities, and Crestmark Capital Trust I, which was acquired from the Crestmark Acquisition in August 2018. The Trust and Crestmark Capital Trust I are not included in the Consolidated Financial Statements of the Company.

In addition, the Company is a variable interest holder in certain entities in which the equity holders do not have the characteristics of a controlling financial interest or where the entity does not have enough equity at risk to finance its activities without additional subordinated financial support (referred to as variable interest entities or "VIEs"). The Company's variable interest arises from contractual ownership or other monetary interests that change with fluctuations in the VIE's net asset value. The primary beneficiary is the entity which has both: (1) the power to direct the activities of the VIE that most significantly impacts the VIE's economic performance, and (2) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE. To determine whether or not a variable interest the Company holds could potentially be significant to the VIE, the Company considers both qualitative and quantitative factors regarding the nature, size and form of the Company's involvement with the VIE. Further, the Company assesses whether or not the Company is the primary beneficiary of a VIE on an ongoing basis. If the determination is made that the Company is the primary beneficiary, then that entity is included in the Consolidated Financial Statements.

Noncontrolling interests represent the portion of net income and equity attributable to third-party owners of consolidated subsidiaries that are not wholly-owned by Pathward Financial. All of the Company's noncontrolling interests relate to the Company's Commercial Finance business line.

Variable Interest Entities

As a result of the Crestmark Acquisition, the Company acquired existing membership interests of certain joint venture limited liability companies (the "LLCs"). The Company holds 80% of the membership interests in each of the LLC entities, which offer commercial lending and other financing arrangements. In connection with these LLCs, the Company exclusively provides funding for each entity's activities. The Company determined it is the primary beneficiary of all LLCs as it has the managing power under the terms of each of the LLC operating agreements. Results of the LLCs are reflected in the Company's September 30, 2024 Consolidated Financial Statements and are summarized below. The assets recognized as a result of consolidating the LLCs are the property of the LLCs and are not available for any other purpose.


(Dollars in thousands)	At September 30, 2024
Cash and cash equivalents	$	127
Loans and leases	51,835
Allowance for credit losses	(1,148)
Accrued interest receivable	163


Other assets	1,110
Total assets	52,087
Accrued expenses and other liabilities	338
Noncontrolling interest	(277)
Net assets less noncontrolling assets	$	52,026

Amounts for noncontrolling interests reflect the proportionate share of membership interest (equity) and net income attributable to the holders of minority membership interest in the following entities:

•CM Help, LLC - CM Help provides flexible patient loan programs to hospitals and patient customers of hospitals as a financing alternative for the self-pay and co-pay portions of patients’ hospital expenses.

•CM Southgate II, LLC - CM Southgate II engages in the business of acquiring fleet leases and semi-trailer/tractor loans and leases.

•CM TFS, LLC - CM TFS engages in the business of acquiring equipment financing term loans and leases.

In the normal course of business, the Company enters into off-balance sheet transactions with SPEs, which can be structured as corporations, trusts, limited liability companies, or partnerships and are established for a limited purpose. Currently, the Company utilizes a SPE facility for certain term lending products within the Company's Commercial Finance business line. The Company participated in the structuring of the SPE, has a minority ownership interest in the SPE, and acts as servicer for the SPE in exchange for a servicing fee. Pathward is not the primary beneficiary of the SPE as our risk of loss or right to benefits from the SPE are not significant. At September 30, 2024, there are $18.4 million commercial term loans held at the SPE compared to $13.7 million for the prior fiscal year, and the Company’s equity investment in the SPE is $5.8 million compared to $1.2 million for the prior fiscal year. The Company’s maximum exposure to loss from the SPE is limited to its equity investment. At September 30, 2024 and 2023, there were $4.6 million and no commercial term loans classified as held for sale related to this SPE, respectively.

NATURE OF BUSINESS AND INDUSTRY SEGMENT INFORMATION

One of the Company's primary sources of revenue relates to payment processing services for prepaid cards, ATM sponsorship, tax refund transfer and money movement. Additionally, a significant source of revenue for the Company is interest from the purchase or origination of commercial finance loans, consumer finance loans, and warehouse finance loans. The Company accepts deposits from customers in the normal course of business on a national basis through its partner solutions and tax services divisions, and through wholesale funding. The Company operates in the banking industry, which accounts for the majority of its revenues and assets. The Company uses the “management approach” for reporting information about segments in annual and interim financial statements. The management approach is based on the way the chief operating decision-maker organizes segments within a company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure and any other manner in which management disaggregates a company. Based on the management approach model, the Company has determined that its business is comprised of three reporting segments. See Note 16. Segment Reporting for additional information on the Company's segment reporting.

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain significant estimates include the valuation of residual values within lease receivables, allowance for credit losses, the valuation of goodwill and intangible assets and the fair values of securities and other financial instruments. These estimates are reviewed by management regularly; however, they are particularly susceptible to significant changes in the future.

CASH AND CASH EQUIVALENTS

For purposes of reporting cash flows, cash and cash equivalents is defined to include the Company’s cash on hand and due from financial institutions and short-term interest-bearing deposits in other financial institutions. The Company reports cash flows net for customer loan transactions, securities purchased under agreement to resell, federal funds purchased, deposit transactions, securities sold under agreements to repurchase, and FHLB advances with terms less than 90 days. Previously, the FRB required all depository institutions to maintain reserves at specified levels against their transaction accounts, primarily checking accounts. However, since March 26, 2020, the reserve requirement ratio has been zero percent. At September 30, 2024, the Bank was not required to maintain any reserve balances. The Company at times maintains balances in excess of insured limits at various financial institutions including the FRB, the FHLB and other private institutions. At September 30, 2024, the Company had $104.9 million in interest-bearing deposits held at the FRB and $1.7 million interest-bearing deposits held at the FHLB. The Company does not believe these instruments carry a significant risk of loss but cannot provide assurances that no losses could occur if these institutions were to become insolvent.

SECURITIES

GAAP requires that, at acquisition, an enterprise classify debt securities into one of three categories: Available for Sale (“AFS”), Held to Maturity (“HTM”) or trading. Debt securities AFS are carried at fair value on the Consolidated Statements of Financial Condition. Unrealized holding gains and losses due to risk of credit loss are recognized in earnings while unrealized holding gains and losses due to market conditions and other non-credit risk factors are excluded from earnings and recognized as a separate component of equity in accumulated other comprehensive income (loss) (“AOCI”). See Note 19. Fair Values of Financial Instruments for additional information on fair value of AFS debt securities. Debt securities HTM are measured at amortized cost. The Company classifies the majority of its debt securities as AFS, which are those the Company may decide to sell if needed for liquidity, asset/liability management, or other reasons. Both AFS and HTM are subject to an allowance for credit losses. Pathward Financial did not hold trading securities at September 30, 2024 or 2023.

Gains and losses on the sale of securities are determined using the specific identification method based on amortized cost and are reflected in results of operations at the time of sale. Interest and dividend income, adjusted by amortization of purchase premium or discount using the level yield method, is included in income as earned. For callable debt securities, any purchase premium is amortized to the first call date while any discount is accreted over the contractual life of the security.

Debt Securities Credit Losses

The Company evaluates debt securities AFS for credit losses on a quarterly basis and records any such losses as a component of provision for credit loss in the Consolidated Statements of Operations. The Company has concluded that any unrealized holding losses in its portfolio as of September 30, 2024 are not related to credit loss and as a result has not recorded an allowance for credit losses. See Note 2. Securities for further information.

The Company evaluates debt securities HTM for credit losses on a quarterly basis and records any such losses as a component of provision for credit loss in the Consolidated Statements of Operations. The Company has concluded that its portfolio as of September 30, 2024 has a zero risk of credit loss due to the related U.S. Government financial guarantees underlying the securities within the HTM portfolio and as a result has not recorded an allowance for credit losses.

Equity Investments

The Company holds marketable equity securities, which have readily determinable fair value, and include common equity and mutual funds. These securities are recorded at fair value with unrealized gains and losses, due to changes in fair value, reflected in earnings. Interest and dividend income from these securities is recognized in interest income. See Note 2. Securities for additional information on marketable equity securities.

The Company also holds non-marketable equity securities that are included in Other Assets in the Company’s Consolidated Financial Statements. The Company generally accounts for these investments under the equity method or the provisions of Accounting Standards Codification ("ASC") 321. Equity Securities. Investments where the Company has significant influence, but not control, over the investee are accounted for under the equity method. Investments where the Company cannot exercise significant influence over the investee are measured at fair value, with changes in fair value recognized in earnings, unless those investments have no readily determinable fair value. Investments without readily determinable fair value are measured under the measurement alternative, which reflects cost less impairment, with adjustments in value resulting from observable price changes arising from orderly transactions of the same or a similar security from the same issuer ("measurement alternative investments").

The Company reviews for impairment for equity method and measurement alternative investments and includes an analysis of the facts and circumstances for each investment, expectations of cash flows, capital needs, and viability of its business model. For equity method, the asset carrying value is reduced when the decline in fair value is considered to be other than temporary. For measurement alternative investments, the asset carrying value is reduced when the fair value is less than the carrying value, without the consideration of recovery.

The Company held the following non-marketable equity securities:

•Equity Method - The Company held equity method investments of $4.1 million within other assets as of September 30, 2024 and $4.1 million at September 30, 2023. The Company’s ownership of such investments typically ranges from 5% - 25% of the investee. The Company recognized nominal net earnings from these investments within noninterest income for the fiscal year ended September 30, 2024. The Company elected to classify distributions received from equity method investments using the cumulative earnings approach on the Consolidated Statements of Cash Flows.

•Fair Value Method - The Company held equity investments measured at net asset value ("NAV") per share (or its equivalent) of $11.8 million at September 30, 2024 and $8.4 million at September 30, 2023 where NAV is considered the fair value practical expedient. These investments are recorded within other assets on the Company’s Consolidated Financial Statements. Fluctuations in fair value are recognized in earnings within noninterest Income.

•Measurement Alternative - The Company held equity investments measured using the measurement alternative of $9.5 million as of September 30, 2024 and $12.1 million at September 30, 2023 within other assets on the Company’s Consolidated Financial Statements. Equity investments measured using the measurement alternative are subject to fair value adjustments when observable price changes in orderly transactions for the identical or similar investment of the same issuer occur. The Company did not recognize any fair value adjustments in the fiscal years ended September 30, 2024 and 2023. Additionally, the Company recognized impairment loss of $1.0 million and $3.3 million of such investments during the fiscal years ended September 30, 2024 and 2023, respectively.

LOANS HELD FOR SALE ("LHFS")

Loans are designated as LHFS based on management's intent to sell loans, or portions of loans, in established secondary markets or to participating third-party financial institutions. LHFS are held at the lower of cost or fair value. Any amount by which the cost exceeds fair value is initially recorded as a valuation allowance and subsequently reflected in the gain or loss on sale when sold. At September 30, 2024 and 2023, there was no valuation allowance recorded for LHFS. Gains and losses on LHFS are recorded in noninterest income on the Consolidated Statements of Operations. Loan costs and fees are deferred at origination and are recognized in income at the time of sale. Interest income is calculated based on the note rate of the loan and is recorded as interest income. The Company occasionally transfers loans between held for sale and held for investment classifications based on its intent and ability to hold or sell loans. Management's intent to sell may be impacted by secondary market conditions, loan credit quality, or other factors.

The following table summarizes the activity pertaining to loans held for sale:


	Fiscal Year Ended September 30,
	2024				2023
(Dollars in thousands)	Consumer		Commercial		Consumer		Commercial
Beginning of year balance	$	77,779	$	—	$	21,071	$	—
Originations	1,901,593		133,388		1,206,201		2,483
Proceeds from sales	(1,937,079)		(99,005)		(1,123,271)		(16,610)
Gain (loss) on sales	—		5,102		—		268
Principal collections, net of deferred fees and costs	(18,083)		(48)		(26,222)		280
Non-cash transfers, net	—		563,495		—		13,579
End of year balance	$	24,210	$	602,932	$	77,779	$	—

LOANS AND LEASES

Loans Receivable

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are classified as held for investment and are generally reported at their outstanding principal balances net of any unearned income, cumulative charge-offs, unamortized deferred fees and costs on originated loans, and unamortized premiums or discounts on purchased loans (amortized cost).

Interest income on loans is accrued over the term of the loans based upon the amount of principal outstanding except when serious doubt exists as to the collectability of a loan, in which case the accrual of interest is discontinued. Unearned income, deferred loan fees and costs, and discounts and premiums are amortized to interest income over the contractual life of the loan using the interest method. The Company's business lines follow a nonaccrual policy with certain commercial finance, consumer finance and tax service loans not generally being placed on non-accrual status, but instead are charged off when the collection of principal and interest become doubtful. When placed on nonaccrual status, the accrued unpaid interest receivable is reversed against interest income and any remaining amortizing of net deferred fees is suspended. Cash collected on these loans is applied to first reduce the carrying value of the loan with any remainder being recognized as interest income. Generally, a loan can return to accrual status when all delinquent interest and principal become current under the terms of the loan agreement and collectability of the remaining principal and interest is no longer doubtful. Loans are considered past due when contractually required principal or interest payments have not been made on the due dates.

For commercial loans, the Company generally fully charges off or charges down to net realizable value (fair value of collateral, less estimated costs to sell) for loans secured by collateral when: management judges the loans to be uncollectible; repayment is deemed to be protracted beyond reasonable time frames; the loan has been classified as a loss by either the Company's internal loan review process or its banking regulatory agencies; the customer has filed bankruptcy and the loss becomes evident owing to lack of assets; or the loan meets a defined number of days past due unless the loan is both well-secured and in the process of collection. For consumer loans, the Company fully charges off or charges down to net realizable value when deemed uncollectible due to bankruptcy or other factors, or meets a defined number of days past due.

Leases Receivable

The Company provides various types of commercial lease financing that are classified for accounting purposes as direct financing, sales-type or operating leases. Leases that transfer substantially all of the benefits and risks of ownership to the lessee are classified as direct financing or sales-type leases and are included in loans and leases receivable on the Consolidated Statements of Financial Condition. Direct financing and sales-type leases are carried at the combined present value of future minimum lease payments and lease residual values. The determination of lease classification requires various judgments and estimates by management, including the fair value of equipment at lease inception, useful life of the equipment under lease, lease residual value, and collectability of minimum lease payments.

Sales-type leases generate a gain or loss at lease inception by recording lease revenue less lease cost. Lease revenue consists of the present value of the future minimum lease payments. Lease cost consists of the lease equipment’s book value, less the present value of its residual. Interest income on direct financing and sales-type leases is recognized using methods that approximate a level yield over the fixed, non-cancelable term of the lease. Recognition of interest income is generally discontinued at the time the lease becomes 90 days delinquent, unless the lease is well-secured and in process of collection. Delinquency and past due status is based on the contractual terms of the lease. The Company receives pro rata rent payments for the interim period until the lease contract commences and the fixed, non-cancelable lease term begins. Interim payments are recognized in the month they are earned and are recorded in interest income. Management has policies and procedures in place for the determination of lease classification and review of the related judgments and estimates for all lease financings.

The Company generally fully charges off or charges down to net realizable value (fair value of collateral, less estimated costs to sell) for leases when management judges the lease to be uncollectible; repayment is deemed to be protracted beyond reasonable time frames; the lease has been classified as a loss by either the Company's internal review process or its banking regulatory agencies; the customer has filed bankruptcy and the loss becomes evident owing to lack of assets; or the lease meets a defined number of days past due unless the lease is both well-secured and in the process of collection.

Some lease financings include a residual value component, which represents the estimated fair value of the leased equipment at the expiration of the initial term of the transaction. The estimation of the residual value involves judgments regarding product and technology changes, customer behavior, shifts in supply and demand, and other economic assumptions. The Company may purchase and sell minimum lease payments, primarily as a credit risk reduction tool, to third-party financial institutions at fixed rates on a non-recourse basis with its underlying equipment as collateral. For those transactions that achieve sale treatment, the related lease cash flow stream and the non-recourse financing are derecognized. For those transactions that do not achieve sale treatment, the underlying lease remains on the Company’s Consolidated Statements of Financial Condition and non-recourse debt is recorded in the amount of the proceeds received. The Company retains servicing of these leases and bills, collects, and remits funds to the third-party financial institution. Upon default by the lessee, the third-party financial institutions may take control of the underlying collateral which the Company would otherwise retain as residual value.

Leases that do not transfer substantially all benefits and risks of ownership to the lessee are classified as operating leases. Such leased equipment are included in rental equipment on the Consolidated Statements of Financial Condition and are depreciated on a straight-line basis over the term of the lease to its estimated residual value.

Depreciation expense is recorded as operating lease equipment depreciation expense within noninterest expense. Operating lease rental income is recognized when it becomes due and is reflected as a component of noninterest income. The Company evaluates the carrying value of rental equipment for impairment whenever events or circumstances have occurred that would indicate the carrying amount may not be fully recoverable. If the carrying amount is not fully recoverable, an impairment loss is recognized to reduce the carrying amount to fair value, where fair value is based on the condition of the rental equipment and the projected net cash flows from rental and sale adjusted for current market conditions. A $2.0 million impairment expense from rental equipment was recognized for the fiscal year ended September 30, 2024, a nominal impairment expense was recognized for fiscal year ended September 30, 2023, and no impairment expense was recognized for the fiscal year ended September 30, 2022.

Loan Servicing and Transfers of Financial Assets

The Company sells loan participations, generally without recourse, in both the commercial and consumer segments. The Company also sells commercial SBA and USDA loans to third parties, generally without recourse. Sold loans are not included in the Consolidated Financial Statements. The Bank generally retains the right to service the sold loans for a fee. If the fee is determined commensurate and customary with market terms, no servicing asset or liability is recorded. Any fee that is above or below market terms results in a servicing asset or liability and is included within Other Assets on the Consolidated Statements of Financial Condition. At September 30, 2024 and 2023, the Bank was servicing loans for others with aggregate unpaid principal balances of $364.5 million and $332.5 million, respectively. The service fees and ancillary income related to these loans were immaterial.

Transfers of loans, portions of loans meeting the definition of a participating interest, and other financial assets are accounted for as sales on the transaction settlement date when control has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been legally isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of such right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through a repurchase agreement or other means. Upon sale, the loans or other financial assets are derecognized from the Company’s Consolidated Statements of Financial Condition. If the transfer does not satisfy the aforementioned control criteria, the transaction is recorded as a secured borrowing with the loans or other financial assets remaining on the Company’s Consolidated Statements of Financial Condition and proceeds recognized as a liability.

ALLOWANCE FOR CREDIT LOSSES

The ACL represents management’s estimate of current credit losses expected to be incurred by the loan and lease portfolio over the life of each financial asset as of the balance sheet date. The Company individually evaluates loans and leases that do not share similar risk characteristics with other financial assets, which generally means loans and leases on nonaccrual status. All other loans and leases are evaluated collectively for credit loss. A reserve for unfunded credit commitments such as letters of credit and binding unfunded loan commitments is recorded in other liabilities on the Consolidated Statements of Financial Condition.

Individually evaluated loans and leases are a key component of the ACL. Generally, the Company measures credit loss on individually evaluated loans based on the fair value of the collateral less estimated selling costs, as the Company considers these financial assets to be collateral dependent. If an individually evaluated loan or lease is not collateral dependent, credit loss is measured at the present value of expected future cash flows discounted at the loan or lease initial effective interest rate. Management has also identified certain structured finance credits for alternative energy projects in which a substantial cash collateral account has been established to mitigate credit risk. Due to the nature of the transactions and significant cash collateral positions, these credits are evaluated individually.

Credit loss for all other loans and leases is evaluated collectively by various characteristics. The collective evaluation of expected losses in all commercial finance portfolios is based on a cohort loss rate and adjustments for forward-looking information, including industry and macroeconomic forecasts. The cohort loss rate is a life of loan loss rate that immediately reverts to historical loss information for the remaining maturity of the financial asset. Management has elected to use a twelve to twenty-four month reasonable and supportable forecast for forward-looking information. Factors utilized in the determination of the allowance include historical loss experience, current economic forecasts and measurement date credit characteristics such as product type, delinquency, and industry. The unfunded credit commitments depend on these same factors, as well as estimates of lines of credit usage. The various quantitative and qualitative factors used in the methodologies are reviewed quarterly.

The collective evaluation of expected credit losses for certain consumer lending portfolios utilize different methodologies when estimating expected credit losses. The determination of the allowance is governed by structured tiers that dictate how cash collections are applied to losses to assess if there are sufficient available funds to cover expected credit losses.

The amount of ACL depends significantly on management’s estimates or key factors and assumptions affecting valuation, appraisals of collateral, evaluations of performance and status, the amounts and timing of future cash flows expected to be received, forecasts of future economic conditions and reversion periods. Such estimates, appraisals, evaluations, cash flows and forecasts may be subject to frequent adjustments due to changing economic prospects of borrowers, lessees, properties or economic conditions. These estimates are reviewed quarterly and adjustments, if necessary, are recorded in the provision for credit loss in the periods in which they become known.

Accrued interest receivable is presented separately on the Consolidated Statements of Financial Condition, and an ACL is not recorded for these balances. Generally, when a loan or lease is placed on nonaccrual status, typically when the collection of interest or principal is 90 days or more past due, uncollected interest accrued in prior years is charged off against the ACL and interest accrued in the current year is reversed against interest income.

Management maintains a framework of controls over the estimation process for the ACL, including review of collective reserve methodologies for compliance with GAAP. Management has a quarterly process to review the appropriateness of historical observation periods and loss assumptions and risk ratings assigned to loans and leases, if applicable. Management reviews its qualitative framework and the effect on the collective reserve compared with relevant credit risk factors and consistency with credit trends. Management also maintains controls over information systems, models and spreadsheets used in the quantitative components of the reserve estimate. This includes the quality and accuracy of historical data used to derive loss rates, the inputs to industry and macroeconomic forecasts and the reversion periods utilized. The results of this process are summarized and presented to management quarterly for their approval of the recorded allowance. See Note 3. Loans and Leases, Net for further information.

The following are risk characteristics of the Company’s loan and lease portfolio:

Commercial Finance

The Company's Commercial Finance business line offers a variety of products through its working capital, equipment finance, structured finance, and insurance premium finance lending solutions. These products include term lending, asset-based lending, factoring, lease financing, insurance premium finance, government guaranteed lending and other commercial finance products offered on a nationwide basis that are subject to adverse market conditions which may impact the borrower’s ability to make repayment on the loan or lease or could cause a decline in the value of the collateral that secures the loan or lease. The loans or leases are primarily made based on the operating cash flows of the borrower and on the underlying collateral provided by the borrower. The cash flows of borrowers may be volatile and the value of the collateral securing these loans and leases may be difficult to measure. Most commercial finance loans and leases are secured by the assets being financed or other business assets such as accounts receivable or inventory. Although the loans and leases are often collateralized by equipment, inventory, accounts receivable, insurance premiums or other business assets, the liquidation of collateral in the event of a borrower default may be an insufficient source of repayment, because accounts receivable may be uncollectible and inventories and equipment may be obsolete or of limited use. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the management of the business and the credit-worthiness of borrowers and guarantors. See Note 20. Subsequent Events for further information on the Company's commercial premium finance insurance business.

Consumer Finance

The Bank offers a variety of installment and revolving consumer lending products through its credit solutions. The Bank designs its credit program relationships with certain desired outcomes, including liquidity, credit protection, and risk retention by the program partner. The Bank believes the benefits of these outcomes not only support its goals but the goals of the credit program partner as well. The Bank designs its program credit protections in a manner so that the Bank earns a reasonable risk adjusted return, but is protected by certain layers of credit support, similar to what you would find in structured finance. Certain loans are sold to third parties based on terms and conditions within the Program Agreement.

Tax Services

The Bank's Partner Solutions business line also offers tax solutions, which includes short-term refund advance loans. Through this product, taxpayers are underwritten to determine eligibility for these unsecured loans. Due to the nature of refund advance loans, it typically takes no more than three e-file cycles (the period of time between scheduled IRS payments) from when the return is accepted by the IRS to collect from the borrower. In the event of default, the Bank has no recourse against the tax consumer. When collection of principal becomes doubtful, the Bank will charge off the balance of a refund advance loan on September 30. Any remaining balances are charged off at the end of the calendar year. The Bank may record recoveries of previously charged off loans if collected in subsequent tax years.

The Bank offers short-term electronic return originator ("ERO") advance loans on a nationwide basis. These loans are typically utilized by tax preparers to purchase tax preparation software and to prepare tax office operations for the upcoming tax season. EROs go through an underwriting process to determine eligibility for the unsecured advances. ERO loans are not collateralized. Collection on ERO advances begins once the ERO begins to process refund transfers. Generally, the Bank will charge off the balance of an ERO advance loan if there is a balance at the end of June, or when collection of principal becomes doubtful.

Warehouse Finance

The Bank participates in several collateral-based warehouse lines of credit whereby the Bank is in a senior, secured position as the first out participant. These facilities are primarily collateralized by consumer receivables, with the Bank holding a senior collateral position enhanced by a subordinate party structure.

PREMISES, FURNITURE, AND EQUIPMENT

Land is carried at cost. Buildings, furniture, fixtures, leasehold improvements, internal-use software and equipment are carried at cost, less accumulated depreciation and amortization. The Company primarily uses the straight-line method of depreciation and amortization over the estimated useful lives of the assets, which is 39 years for buildings, three years for internal-use software, and range from two years to 15 years for leasehold improvements and for furniture, fixtures and equipment. Assets are reviewed for impairment when events indicate the carrying amount may not be recoverable. See Note 5. Premises, Furniture and Equipment, Net for further information.

GOODWILL

Goodwill represents the cost in excess of the fair value of net assets acquired (including identifiable intangibles) in transactions accounted for as business acquisitions. Goodwill is evaluated annually for impairment at a reporting unit level. The Company has determined that its reporting units are one level below the operating segments and distinguish these reporting units based on how the segments and reporting units are managed, taking into consideration the economic characteristics, nature of the products, and customers of the segments and reporting units. The Company performs its impairment evaluation as of September 30 of each fiscal year unless a triggering event occurs that would require an interim impairment evaluation. The Company generally utilizes a qualitative approach during this annual assessment to determine whether it is more likely than not (i.e. a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying value. If we determine it is more likely than not that goodwill is impaired, then a quantitative assessment is performed to determine fair value of the reporting unit. If the carrying amount of the reporting unit with goodwill exceeds its fair value, goodwill is considered impaired and is written down by the excess carrying value of the reporting unit. Subsequent increases in goodwill are not recognized in the Consolidated Financial Statements. No goodwill impairment was recognized during the fiscal years ended September 30, 2024, 2023 or 2022. See Note 7. Goodwill and Intangible Assets for further information.

INTANGIBLE ASSETS

Intangible assets other than goodwill are amortized over their respective estimated lives. All intangible assets are subject to an impairment test at least annually or more often if conditions indicate a possible impairment. See Note 7. Goodwill and Intangible Assets for further information.

STOCK COMPENSATION

Compensation expense for share-based awards is recorded over the vesting period at the fair value of the award at the time of grant. The fair value of nonvested (restricted) shares and performance share units granted under the Company’s incentive plans is equal to the fair market value of the underlying stock at the grant date, adjusted for dividends where applicable. The Company has elected to record forfeitures as they occur. See Note 12. Stock Compensation for further information.

INCOME TAXES

The Company records income tax expense based on the amount of taxes due on its tax return plus deferred taxes computed based on the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, using enacted tax rates. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

In accordance with ASC 740, Income Taxes, the Company recognizes a tax position as a benefit only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized upon examination. For tax positions not meeting the more likely than not test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in noninterest income or noninterest expense. The effect on deferred tax assets and liabilities from a change in tax rates is recorded in income tax expense in the Consolidated Statements of Operations in the period in which the enactment date occurs. If current period income tax rates change, the impact on the annual effective income tax rate is applied year to date in the period of enactment. See Note 13. Income Taxes for further information.

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Company, in the normal course of business, makes commitments to originate loans which are not reflected in the Consolidated Financial Statements. The reserve for these unfunded commitments is included within Other Liabilities on the Consolidated Statements of Financial Condition.

COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) consists of net income and other comprehensive income or loss. Other comprehensive income or loss includes the change in net unrealized holding gains and losses due to market conditions and other non-credit risk factors on AFS debt securities, net of reclassification adjustments and tax effects. Accumulated other comprehensive income (loss) is recognized as a separate component of stockholders’ equity.

REVENUE RECOGNITION

Interest revenue from loans, leases, and investments is recognized on the accrual basis of accounting as the interest is earned according to the terms of the particular loan, lease, or investment. Income from service and other customer charges is recognized as earned. Revenue within the Consumer segment is recognized as services are performed and service charges are earned in accordance with the terms of the various programs. Refer to Note 15. Revenue from Contracts with Customers for additional information.

EARNINGS PER COMMON SHARE (“EPS”)

Basic EPS is computed using the two-class method by dividing income available to common stockholders after the allocation of dividends and undistributed earnings to the participating securities by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, and is computed after giving consideration to the weighted average dilutive effect upon vesting of restricted stock grants and after the allocation of earnings to the participating securities. See Note 4. Earnings per Common Share for further information.

RELATED PARTY TRANSACTIONS

The Company has disclosed information on its equity investments and relationships with variable interest entities in Note 1. Summary of Significant Accounting Policies.

At September 30, 2024 and 2023, the Company had no loans or deposits outstanding with individuals deemed under Regulation O to be directors, executive officers and/or employees of the Company.

RECLASSIFICATION AND REVISION OF PRIOR PERIOD BALANCES

Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. These changes and reclassifications did not impact previously reported net income or comprehensive income (loss).

RECENTLY ADOPTED ACCOUNTING STANDARDS UPDATES ("ASU")

The following ASU was adopted by the Company during the fiscal year ended September 30, 2024 and did not have a material impact on the Company's Consolidated Financial Statements. The following ASU became effective for the Company on October 1, 2023.

ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in this ASU eliminate accounting guidance for troubled-debt restructurings (“TDRs”) by creditors in Subtopic ASC 310-40, Receivables – Troubled Debt Restructurings by Creditors, and enhance disclosure requirements for certain loan refinancings and restructurings when a borrower is experiencing financial difficulty. The ASU also requires current period gross charge-offs by year of origination to be disclosed for loans and leases within scope of ASC Topic 326, Financial Instruments – Credit Losses.

The following ASUs have been issued and are considered applicable to the Company, but have not yet been adopted as of September 30, 2024.

ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU improves reportable segment disclosures primarily by enhancing disclosure requirements about significant segment expenses. The amendments will be effective for the Company beginning with the fiscal year ended September 30, 2025 and subsequent interim periods. The amendments will be applied retrospectively to all prior periods in the consolidated financial statements. The Company is currently evaluating the impact of such amendments to the consolidated financial statements and related disclosures.

ASU 2023-09, Income Taxes (ASC 740): Improvements to Income Tax Disclosures. This ASU requires enhanced income tax disclosures primarily related to the rate reconciliation and income taxes paid information to provide further transparency surrounding the Company’s income tax position. The amendments in this ASU will be effective for the Company beginning on October 1, 2025. The Company is currently evaluating the impact of such amendments to the consolidated financial statements and related disclosures.

SECURITIES

12 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

SECURITIES

The amortized cost, gross unrealized gains and losses and estimated fair values of AFS and HTM debt securities are presented below.


(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Debt Securities AFS
At September 30, 2024
Corporate securities	$	25,000	$	—	$	(5,250)	$	19,750
SBA securities	86,036		—		(4,101)		81,935
Obligations of states and political subdivisions	501		—		(21)		480
Non-bank qualified obligations of states and political subdivisions	246,233		44		(28,287)		217,990
Asset-backed securities	192,979		337		(3,618)		189,698
Mortgage-backed securities	1,393,549		84		(162,265)		1,231,368
Total debt securities AFS	$	1,944,298	$	465	$	(203,542)	$	1,741,221
At September 30, 2023
Corporate securities	$	25,000	$	—	$	(6,750)	$	18,250
SBA securities	95,549		—		(10,307)		85,242
Obligations of states and political subdivisions	2,368		—		(79)		2,289
Non-bank qualified obligations of states and political subdivisions	269,396		—		(42,673)		226,723
Asset-backed securities	255,384		234		(9,419)		246,199
Mortgage-backed securities	1,495,636		—		(270,111)		1,225,525
Total debt securities AFS	$	2,143,333	$	234	$	(339,339)	$	1,804,228

Debt Securities HTM
At September 30, 2024
Non-bank qualified obligations of states and political subdivisions	$	31,060	$	—	$	(2,668)	$	28,392
Mortgage-backed securities	2,032		—		(188)		1,844
Total debt securities HTM	$	33,092	$	—	$	(2,856)	$	30,236
At September 30, 2023
Non-bank qualified obligations of states and political subdivisions	$	34,415	$	—	$	(4,844)	$	29,571
Mortgage-backed securities	2,176		—		(322)		1,854
Total debt securities HTM	$	36,591	$	—	$	(5,166)	$	31,425

Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous loss position, were as follows:


	LESS THAN 12 MONTHS				OVER 12 MONTHS				TOTAL
(Dollars in thousands)	Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)		Fair Value		Gross Unrealized (Losses)
Debt Securities AFS
At September 30, 2024
Corporate securities	$	—	$	—	$	19,750	$	(5,250)	$	19,750	$	(5,250)
SBA securities	—		—		81,935		(4,101)		81,935		(4,101)
Obligations of state and political subdivisions	—		—		280		(21)		280		(21)
Non-bank qualified obligations of states and political subdivisions	—		—		215,956		(28,287)		215,956		(28,287)
Asset-backed securities	52,101		(176)		88,576		(3,442)		140,677		(3,618)
Mortgage-backed securities	2,377		(15)		1,215,781		(162,250)		1,218,158		(162,265)
Total debt securities AFS	$	54,478	$	(191)	$	1,622,278	$	(203,351)	$	1,676,756	$	(203,542)
At September 30, 2023
Corporate securities	$	—	$	—	$	18,250	$	(6,750)	$	18,250	$	(6,750)
SBA securities	22,327		(1,919)		62,915		(8,388)		85,242		(10,307)
Obligations of state and political subdivisions	—		—		2,289		(79)		2,289		(79)
Non-bank qualified obligations of states and political subdivisions	5,010		(83)		221,714		(42,590)		226,723		(42,673)
Asset-backed securities	46,528		(224)		115,608		(9,195)		162,136		(9,419)
Mortgage-backed securities	18,311		(944)		1,207,214		(269,167)		1,225,525		(270,111)
Total debt securities AFS	$	92,176	$	(3,170)	$	1,627,990	$	(336,169)	$	1,720,165	$	(339,339)

Debt Securities HTM
At September 30, 2024
Non-bank qualified obligations of states and political subdivisions	$	—	$	—	$	28,392	$	(2,668)	$	28,392	$	(2,668)
Mortgage-backed securities	—		—		1,844		(188)		1,844		(188)
Total debt securities HTM	$	—	$	—	$	30,236	$	(2,856)	$	30,236	$	(2,856)
At September 30, 2023
Non-bank qualified obligations of states and political subdivisions	$	—	$	—	$	29,571	$	(4,844)	$	29,571	$	(4,844)
Mortgage-backed securities	—		—		1,854		(322)		1,854		(322)
Total debt securities HTM	$	—	$	—	$	31,425	$	(5,166)	$	31,425	$	(5,166)

The decrease in the fair value of investment securities balances when comparing September 30, 2024 to the prior year was primarily driven by principal pay downs during the fiscal year. At September 30, 2024, there were 195 debt securities AFS in an unrealized loss position. Management assessed each investment security with unrealized losses for credit loss by evaluating qualitative factors, including materiality of loss position as a percentage of book value, credit ratings, outstanding principal and interest payments, and changes in the underlying implicit or explicit guarantee of the security, and determined all unrealized losses on these securities were due to adverse market conditions and/or change in interest rates versus credit loss. As part of that assessment, management evaluated and concluded that it is more-likely-than-not that the Company will not be required and does not intend to sell any of the securities prior to recovery of the amortized cost. At September 30, 2024, there was no ACL for debt securities AFS.

The amortized cost and fair value of debt securities by contractual maturity are shown below. Certain securities have call features which allow the issuer to call the security prior to maturity. Expected maturities may differ from contractual maturities in MBS because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Therefore, MBS are not included in the maturity categories in the following maturity summary. The expected maturities of certain SBA securities may differ from contractual maturities because the borrowers may have the right to prepay the obligation. However, certain prepayment penalties may apply.


	At September 30,
(Dollars in thousands)	2024				2023
Debt Securities AFS	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	1,826	$	1,796	$	5,023	$	4,971
Due after one year through five years	14,772		14,211		11,175		10,292
Due after five years through ten years	70,894		63,636		79,139		66,428
Due after ten years	463,257		430,210		552,360		497,012
	550,749		509,853		647,697		578,703
Mortgage-backed securities	1,393,549		1,231,368		1,495,636		1,225,525
Total debt securities AFS	$	1,944,298	$	1,741,221	$	2,143,333	$	1,804,228

Debt Securities HTM



Due after ten years	$	31,060	$	28,392	$	34,415	$	29,571
	31,060		28,392		34,415		29,571
Mortgage-backed securities	2,032		1,844		2,176		1,854
Total debt securities HTM	$	33,092	$	30,236	$	36,591	$	31,425

Activity related to the sale of securities is summarized below.


	Fiscal Year Ended September 30,
(Dollars in thousands)	2024		2023		2022
Securities AFS
Proceeds from sales	$	—	$	—	$	265,951
Gross gains on sales	—		—		1,742
Gross losses on sales	—		—		1,588
Net gain on securities AFS	$	—	$	—	$	154

There was no activity related to the sale of securities held to maturity during the fiscal years ended September 30, 2024, 2023, and 2022.

No securities were pledged as collateral for public funds on deposit at September 30, 2024 and 2023. No securities were pledged as collateral for individual, trust and estate deposits at September 30, 2024 and 2023.

FRB Stock. The Bank is required by federal law to subscribe to capital stock (divided into shares of $100 each) as a member of the FRB of Minneapolis with an amount equal to six per centum of the paid-up capital stock and surplus. One-half of the subscription is paid at time of application, and one-half is subject to call of the Board of Governors of the Federal Reserve System. FRB of Minneapolis stock held by the Bank totaled $19.7 million at September 30, 2024 and 2023. These equity securities are 'restricted' in that they can only be owned by member banks. At fiscal year-end 2024 and 2023, the Company pledged securities with fair values of $533.8 million and $773.6 million against FRB advances, respectively.

Included in interest and dividend income from other investments is $1.2 million, $1.2 million, and $1.2 million related to dividend income on FRB stock for the fiscal years ended September 30, 2024, 2023, and 2022, respectively.

FHLB Stock. The Company’s borrowings from the FHLB are secured by specific investment securities. Such advances can be made pursuant to several different credit programs, each of which has its own interest rate and range of maturities.

The investments in the FHLB stock are required investments related to the Company’s membership in and current borrowings from the FHLB of Des Moines. The investments in the FHLB of Des Moines could be adversely impacted by the financial operations of the FHLB and actions of their regulator, the Federal Housing Finance Agency.

The FHLB stock is carried at cost since it is generally redeemable at par value. The carrying value of the stock held at the FHLB was $16.3 million and $8.5 million at September 30, 2024 and 2023, respectively. At fiscal year-end 2024 and 2023, the Company pledged securities with fair values of approximately $1.04 billion and $996.9 million, respectively, as collateral against FHLB advances. There was approximately $136.9 million and $21.3 million of qualifying loans pledged as collateral at September 30, 2024 and 2023, respectively.

Included in interest and dividend income from other investments is $0.7 million, $0.5 million and $0.3 million related to dividend income on FHLB stock for the fiscal years ended September 30, 2024, 2023 and 2022, respectively.

These equity securities are ‘restricted’ in that they can only be sold back to the respective institution from which they were acquired or another member institution at par. Therefore, FRB and FHLB stocks are less liquid than other marketable equity securities, and the cost approximates fair value.

Equity Securities. The Company held $3.3 million and $3.4 million in marketable equity securities at September 30, 2024 and 2023, respectively. The Company recognized $0.1 million and $0.2 million in unrealized losses on marketable equity securities during the fiscal years ended September 30, 2024 and 2023, respectively. No such securities were sold during the fiscal year.

Non-marketable equity securities with a readily determinable fair value totaled $11.8 million and $8.4 million at September 30, 2024 and 2023, respectively. The Company recognized $1.1 million in unrealized gains and $0.2 million in unrealized losses during the fiscal years ended September 30, 2024 and 2023, respectively. No such securities were sold during the fiscal year.

Non-marketable equity securities without readily determinable fair value totaled $13.6 million and $16.2 million at September 30, 2024 and 2023, respectively, reflecting the Company's ownership interests in other entities through Pathward Venture Capital, LLC, a wholly-owned service corporation subsidiary of the Bank that was formed in 2017 for the purpose of making minority equity investments and other corporate investments. During the fiscal year, the Company recognized a $2.4 million gain on Visa shares previously carried at cost basis of $0 since 2008. On April 8, 2024, Visa Inc. announced the commencement of an exchange offer for Visa Class B-1 common stock and the Company subsequently tendered its Visa Class B-1 common stock in exchange for a combination of Visa Class C common stock and Visa Class B-2 common stock. After entering the exchange, the Company sold its Visa Class C common stock and Visa Class B-2 common stock in the secondary market. There was one additional security sold during the fiscal year for a $2.5 million gain which is included in gain on sale of other on the Consolidated Statements of Operations.

Equity Securities Impairment. The Company evaluates impairment for investments held at cost on at least an annual basis based on the ultimate recoverability of the par value. All other equity investments, including those under the equity method, are reviewed for other-than-temporary impairment on at least a quarterly basis. The Company recognized $1.0 million, $3.3 million, and zero in impairment for such investments for the fiscal years ended September 30, 2024, 2023, and 2022, respectively.

LOANS AND LEASES, NET

12 Months Ended

Sep. 30, 2024

Loans and Leases Receivable Disclosure [Abstract]

LOANS AND LEASES, NET

Loans and leases consist of the following:


	At September 30,
(Dollars in thousands)	2024		2023
Term lending	$	1,554,641	$	1,308,133
Asset-based lending	471,897		382,371
Factoring	362,295		358,344
Lease financing	152,174		183,392
Insurance premium finance	—		800,077
SBA/USDA	568,628		524,750
Other commercial finance	185,964		166,091
Commercial finance	3,295,599		3,723,158


Consumer finance	248,800		254,416
Tax services	8,825		5,192
Warehouse finance	517,847		376,915
Total loans and leases	4,071,071		4,359,681
Net deferred loan origination costs	4,124		6,435
Total gross loans and leases	4,075,195		4,366,116
Allowance for credit losses	(45,336)		(49,705)
Total loans and leases, net	$	4,029,859	$	4,316,411

During the fiscal years ended September 30, 2024 and 2023, the Company originated $2.03 billion and $1.21 billion of consumer finance and SBA/USDA loans as held for sale, respectively.

The Company sold held for sale loans resulting in proceeds of $2.04 billion and gain on sale of $5.9 million during the fiscal year ended September 30, 2024. The Company sold held for sale loans resulting in proceeds of $1.14 billion and gain on sale of $0.3 million during the fiscal year ended September 30, 2023.

Loans purchased and sold by portfolio segment, including participation interests, were as follows:


	Fiscal Year Ended September 30,
(Dollars in thousands)	2024		2023
Loans Purchased





Loans held for investment:
Commercial finance	$	13,782	$	480


Warehouse finance	284,480		214,786
Total purchases	$	298,262	$	215,266
Loans Sold
Loans held for sale:
Commercial finance	$	99,005	$	16,610
Consumer finance	1,937,079		1,123,271







Total sales	$	2,036,084	$	1,139,881

Leasing Portfolio. The net investment in direct financing and sales-type leases was comprised of the following:


	At September 30,
(Dollars in thousands)	2024		2023
Minimum lease payments receivable	$	162,757	$	191,807
Unguaranteed residual assets	9,300		12,709
Unamortized initial direct costs	102		141
Unearned income	(19,883)		(21,124)
Total net investment in direct financing and sales-type leases	$	152,276	$	183,533

The components of total lease income were as follows:


	Fiscal Year Ended September 30,
(Dollars in thousands)	2024		2023		2022
Interest income - loans and leases
Interest income on net investments in direct financing and sales-type leases	$	11,827	$	13,536	$	17,081

Leasing and equipment finance noninterest income
Lease income from operating lease payments	53,365		53,551		46,017

Other(1)	4,921		3,964		5,982
Total leasing and equipment finance noninterest income	58,286		57,515		51,999
Total lease income	$	70,113	$	71,051	$	69,080
(1) Other leasing and equipment finance noninterest income consists of gains (losses) on sales of leased equipment, fees and service charges on leases and gains (losses) on sales of leases.

Undiscounted future minimum lease payments receivable for direct financing and sales-type leases, and a reconciliation to the carrying amount recorded at September 30, 2024 were as follows:


(Dollars in thousands)
2025	$	59,315
2026	41,380
2027	26,908
2028	19,157
2029	10,236
Thereafter	5,761

Total undiscounted future minimum lease payments receivable for direct financing and sales-type leases	162,757
Third-party residual value guarantees	—
Total carrying amount of direct financing and sales-type leases	$	162,757

The Company did not record any contingent rental income from direct financing and sales-type leases in the fiscal year ended September 30, 2024.

A number of factors affected the economic environment in 2023 continued throughout 2024 including geopolitical conflict, supply chain disruptions, inflation, and increased interest rates. The 2023 bank failures that were brought on by, among other things, rising interest rates, deposit outflows and liquidity crises also continued to impact the banking industry. While the ultimate impact of these factors on the Company's loan and lease portfolio remains difficult to predict, management continues to evaluate the loan and lease portfolio in order to assess the impact on repayment sources and underlying collateral that could result in additional losses and the impact to our customers and businesses as a result of these factors impacting the economy and will refine its estimate as developments occur and more information becomes available.

Activity in the allowance for credit losses was as follows:


	Fiscal Year Ended September 30,
(Dollars in thousands)	2024		2023
Beginning balance	$	49,705	$	45,947
Provision for credit loss	42,238		57,448
Charge-offs	(57,681)		(59,898)
Recoveries	11,074		6,208
Ending balance	$	45,336	$	49,705

Activity in the allowance for credit losses and balances of loans and leases by portfolio segment was as follows:


	At September 30, 2024
(Dollars in thousands)	Beginning Balance		Provision (Reversal)		Charge-offs		Recoveries		Ending Balance
Allowance for credit losses:
Term lending	$	25,686	$	20,558	$	(18,193)	$	2,343	$	30,394
Asset-based lending	2,738		(1,637)		—		255		1,356
Factoring	6,566		1,420		(2,453)		224		5,757
Lease financing	3,302		(2,010)		(287)		184		1,189
Insurance premium finance	2,637		(1,767)		(1,149)		279		—
SBA/USDA	2,962		1,065		(755)		1		3,273
Other commercial finance	3,089		(2,482)		—		—		607
Commercial finance	46,980		15,147		(22,837)		3,286		42,576


Consumer finance	2,346		3,955		(4,064)		3		2,240
Tax services	2		22,995		(30,780)		7,785		2
Warehouse finance	377		141		—		—		518
Total loans and leases	49,705		42,238		(57,681)		11,074		45,336
Unfunded commitments(1)	272		423		—		—		695
Total	$	49,977	$	42,661	$	(57,681)	$	11,074	$	46,031
(1) Reserve for unfunded commitments is recognized within other liabilities on the Consolidated Statements of Financial Condition.


	At September 30, 2023
(Dollars in thousands)	Beginning Balance		Provision (Reversal)		Charge-offs		Recoveries		Ending Balance
Allowance for credit losses:
Term lending	$	24,621	$	10,541	$	(11,295)	$	1,819	$	25,686
Asset-based lending	1,050		4,005		(2,873)		556		2,738
Factoring	6,556		1,523		(1,545)		32		6,566
Lease financing	5,902		(1,424)		(1,479)		303		3,302
Insurance premium finance	1,450		2,349		(1,659)		497		2,637
SBA/USDA	3,263		(296)		(43)		38		2,962
Other commercial finance	1,310		1,779		—		—		3,089
Commercial finance	44,152		18,477		(18,894)		3,245		46,980


Consumer finance	1,463		3,146		(2,263)		—		2,346
Tax services	5		35,775		(38,741)		2,963		2
Warehouse finance	327		50		—		—		377
Total loans and leases	45,947		57,448		(59,898)		6,208		49,705
Unfunded commitments(1)	366		(94)		—		—		272
Total	$	46,313	$	57,354	$	(59,898)	$	6,208	$	49,977
(1) Reserve for unfunded commitments is recognized within other liabilities on the Consolidated Statements of Financial Condition.


	At September 30, 2022
(Dollars in thousands)	Beginning Balance		Provision (Reversal)		Charge-offs		Recoveries		Ending Balance
Allowance for credit losses:
Term lending	$	29,351	$	4,850	$	(12,629)	$	3,049	$	24,621
Asset-based lending	1,726		(1,092)		(16)		432		1,050
Factoring	3,997		11,699		(11,057)		1,917		6,556
Lease financing	7,629		(2,062)		(301)		636		5,902
Insurance premium finance	1,394		597		(767)		226		1,450
SBA/USDA	2,978		863		(652)		74		3,263
Other commercial finance	1,168		142		—		—		1,310
Commercial finance	48,243		14,997		(25,422)		6,334		44,152


Consumer finance	7,354		(1,449)		(4,787)		345		1,463
Tax services	2		28,093		(30,852)		2,762		5
Warehouse finance	420		(93)		—		—		327
Community banking	12,262		(12,686)		—		424		—
Total loans and leases	68,281		28,862		(61,061)		9,865		45,947
Unfunded commitments(1)	690		(324)		—		—		366
Total	$	68,971	$	28,538	$	(61,061)	$	9,865	$	46,313
(1) Reserve for unfunded commitments is recognized within other liabilities on the Consolidated Statements of Financial Condition.

Information on loans and leases that are deemed to be collateral dependent and are evaluated individually for the ACL was as follows:


(Dollars in thousands)	At September 30, 2024		At September 30, 2023
Term lending	$	15,491	$	3,516
Asset-based lending	—		19,226
Factoring	—		1,133
Lease financing	5,300		630

SBA/USDA	1,419		750

Commercial finance(1)	22,210		25,255





Total	$	22,210	$	25,255
(1) For Commercial Finance, collateral dependent financial assets have collateral in the form of cash, equipment, or other business assets.

Management has identified certain structured finance credits for alternative energy projects in which a substantial cash collateral account has been established to mitigate credit risk. Due to the nature of the transactions and significant cash collateral positions, these credits are evaluated individually. The balance of these pass rated cash collateral loans totaled $105.1 million and $117.0 million at September 30, 2024 and 2023, respectively.

Federal regulations provide for the classification of loans and other assets such as debt and equity securities considered by the Bank's primary regulator, the OCC, to be of lesser quality as “substandard,” “doubtful” or “loss.” The loan classification and risk rating definitions are as follows:

Pass - A pass asset is of sufficient quality in terms of repayment, collateral and management to preclude a special mention or an adverse rating.

Watch - A watch asset is generally a credit performing well under current terms and conditions but with identifiable weakness meriting additional scrutiny and corrective measures. Watch is not a regulatory classification but can be used to designate assets that are exhibiting one or more weaknesses that deserve management’s attention. These assets are of better quality than special mention assets.

Special Mention - A special mention asset is a credit with potential weaknesses deserving management’s close attention and, if left uncorrected, may result in deterioration of the repayment prospects for the asset. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Special mention is a temporary status with aggressive credit management required to garner adequate progress and move to watch or higher.

The adverse classifications are as follows:

Substandard - A substandard asset is inadequately protected by the net worth and/or repayment ability or by a weak collateral position. Assets so classified will have well-defined weaknesses creating a distinct possibility the Bank will sustain some loss if the weaknesses are not corrected. Loss potential does not have to exist for an asset to be classified as substandard.

Doubtful - A doubtful asset has weaknesses similar to those classified substandard, with the degree of weakness causing the likely loss of some principal in any reasonable collection effort. Due to pending factors, the asset’s classification as loss is not yet appropriate.

Loss - A loss asset is considered uncollectible and of such little value that the asset’s continuance on the Bank’s balance sheet is no longer warranted. This classification does not necessarily mean an asset has no recovery or salvage value leaving room for future collection efforts.

Loans and leases, or portions thereof, are generally charged off when collection of principal becomes doubtful. Typically, this is associated with a delay or shortfall in payments of 210 days or more for commercial insurance premium finance, 120 days or more for consumer credit products and leases, and 90 days or more for commercial finance loans. Action is taken to charge off ERO loans if such loans have not been collected by the end of June and refund advance loans if such loans have not been collected by the end of the calendar year. The Company individually evaluates loans and leases that do not share similar risk characteristics with other financial assets, which generally means loans and leases identified as modifications or loans and leases on nonaccrual status.

The Company recognizes that concentrations of credit may naturally occur and may take the form of a large volume of related loans and leases to an individual, a specific industry, or a geographic location. Credit concentration is a direct, indirect, or contingent obligation that has a common bond where the aggregate exposure equals or exceeds a certain percentage of the Company’s Tier 1 Capital plus the allowable Allowance for Credit Losses.

The Company has various portfolios of consumer finance and tax services loans that present unique risks that are statistically managed. Due to the unique risks associated with these portfolios, the Company monitors other credit quality indicators in its evaluation of the appropriateness of the ACL on these portfolios, and as such, these loans are not included in the asset classification table below. The outstanding balances of consumer finance loans and tax services loans were $248.8 million and $8.8 million at September 30, 2024, respectively, and $254.4 million and $5.2 million at September 30, 2023, respectively. The amortized cost basis of loans and leases by asset classification and year of origination was as follows:


	Amortized Cost Basis
(Dollars in thousands)	Term Loans and Leases by Origination Year												Revolving Loans and Leases		Total
At September 30, 2024	2024		2023		2022		2021		2020		Prior
Term lending
Pass	$	548,597	$	398,832	$	117,180	$	77,585	$	42,950	$	24,166	$	—	$	1,209,310
Watch	47,765		52,317		34,964		31,025		2,720		2,312		—		171,103
Special mention	44,617		3,106		9,121		14,772		7,238		2		—		78,856
Substandard	9,798		24,187		18,537		11,660		18,894		2,631		—		85,707
Doubtful	4,314		1,465		2,247		758		114		767		—		9,665
Total	655,091		479,907		182,049		135,800		71,916		29,878		—		1,554,641
Current period charge-offs	114		3,102		8,502		3,576		2,184		715		—		18,193
Asset-based lending
Pass	—		—		—		—		—		—		233,268		233,268
Watch	—		—		—		—		—		—		221,521		221,521
Special mention	—		—		—		—		—		—		13,187		13,187
Substandard	—		—		—		—		—		—		3,921		3,921

Total	—		—		—		—		—		—		471,897		471,897
Current period charge-offs	—		—		—		—		—		—		—		—
Factoring
Pass	—		—		—		—		—		—		292,436		292,436
Watch	—		—		—		—		—		—		62,270		62,270
Special mention	—		—		—		—		—		—		271		271
Substandard	—		—		—		—		—		—		7,306		7,306
Doubtful	—		—		—		—		—		—		12		12
Total	—		—		—		—		—		—		362,295		362,295
Current period charge-offs	—		—		—		—		—		—		2,453		2,453
Lease financing
Pass	44,883		48,851		12,862		7,101		7,938		1,733		—		123,368
Watch	1,837		3,537		370		6,264		1,362		40		—		13,410
Special mention	—		250		—		—		174		—		—		424


Substandard	—		6,691		2,723		2,717		2,069		603		—		14,803
Doubtful	—		—		—		138		31		—		—		169
Total	46,720		59,329		15,955		16,220		11,574		2,376		—		152,174
Current period charge-offs	—		—		—		207		80		—		—		287
Insurance premium finance






Current period charge-offs	86		890		173		—		—		—		—		1,149
SBA/USDA
Pass	60,636		171,136		179,490		20,825		28,588		39,319		—		499,994
Watch	5,244		6,967		—		639		10		3,026		—		15,886
Special mention	—		—		—		156		—		363		—		519
Substandard	1,037		15,923		12,158		2,003		9,519		11,134		—		51,774
Doubtful	—		185		55		55		62		98		—		455
Total	66,917		194,211		191,703		23,678		38,179		53,940		—		568,628
Current period charge-offs	—		549		79		—		127		—		—		755
Other commercial finance
Pass	73,330		2,210		6,685		12,351		1,274		70,203		—		166,053
Watch	—		2,480		—		—		—		—		—		2,480

Substandard	—		508		—		16,923		—		—		—		17,431

Total	73,330		5,198		6,685		29,274		1,274		70,203		—		185,964
Current period charge-offs	—		—		—		—		—		—		—		—
Warehouse finance
Pass	—		—		—		—		—		—		517,847		517,847




Total	—		—		—		—		—		—		517,847		517,847
Current period charge-offs	—		—		—		—		—		—		—		—
Total loans and leases
Pass	727,446		621,029		316,217		117,862		80,750		135,421		1,043,551		3,042,276
Watch	54,846		65,301		35,334		37,928		4,092		5,378		283,791		486,670
Special mention	44,617		3,356		9,121		14,928		7,412		365		13,458		93,257
Substandard	10,835		47,309		33,418		33,303		30,482		14,368		11,227		180,942
Doubtful	4,314		1,650		2,302		951		207		865		12		10,301
Total	$	842,058	$	738,645	$	396,392	$	204,972	$	122,943	$	156,397	$	1,352,039	$	3,813,446
Current period charge-offs	$	200	$	4,541	$	8,754	$	3,783	$	2,391	$	715	$	2,453	$	22,837


	Amortized Cost Basis
(Dollars in thousands)	Term Loans and Leases by Origination Year												Revolving Loans and Leases		Total
At September 30, 2023	2023		2022		2021		2020		2019		Prior
Term lending
Pass	$	539,448	$	149,190	$	99,677	$	73,132	$	14,368	$	85,812	$	—	$	961,627
Watch	53,481		51,036		58,041		12,230		4,483		727		—		179,998
Special mention	26,539		13,853		20,463		723		2,932		75		—		64,585
Substandard	20,437		30,451		14,729		24,613		3,872		764		—		94,866
Doubtful	200		2,655		1,691		1,121		165		1,225		—		7,057
Total	640,105		247,185		194,601		111,819		25,820		88,603		—		1,308,133
Asset-based lending
Pass	—		—		—		—		—		—		161,744		161,744


Watch	—	—	—	—	—	—	174,243	174,243
Special mention	—	—	—	—	—	—	26,382	26,382
Substandard	—	—	—	—	—	—	19,501	19,501
Doubtful	—	—	—	—	—	—	501	501
Total	—	—	—	—	—	—	382,371	382,371
Factoring
Pass	—	—	—	—	—	—	270,754	270,754
Watch	—	—	—	—	—	—	70,833	70,833
Special mention	—	—	—	—	—	—	8,892	8,892
Substandard	—	—	—	—	—	—	7,865	7,865

Total	—	—	—	—	—	—	358,344	358,344
Lease financing
Pass	57,123	15,941	15,167	27,489	4,036	1,281	—	121,037
Watch	793	10,436	12,566	4,494	1,579	55	—	29,923
Special mention	—	—	847	415	195	—	—	1,457
Substandard	14,890	1,983	7,082	3,660	3,062	33	—	30,710
Doubtful	—	—	71	61	—	133	—	265
Total	72,806	28,360	35,733	36,119	8,872	1,502	—	183,392
Insurance premium finance
Pass	797,267	1,210	—	—	—	—	—	798,477
Watch	858	34	—	—	—	—	—	892
Special mention	250	15	—	—	—	—	—	265
Substandard	91	20	—	—	—	—	—	111
Doubtful	180	152	—	—	—	—	—	332
Total	798,646	1,431	—	—	—	—	—	800,077
SBA/USDA
Pass	158,675	148,525	26,244	36,274	8,798	18,252	—	396,768
Watch	49,010	48,833	658	51	357	2,572	—	101,481
Special mention	—	—	530	—	—	—	—	530
Substandard	252	2,356	1,718	5,418	8,509	7,718	—	25,971

Total	207,937	199,714	29,150	41,743	17,664	28,542	—	524,750
Other commercial finance
Pass	2,330	18,927	32,737	1,137	10,122	69,927	—	135,180
Watch	1,742	—	—	—	—	—	—	1,742

Substandard	2,753	450	25,708	—	—	258	—	29,169

Total	6,825	19,377	58,445	1,137	10,122	70,185	—	166,091
Warehouse finance
Pass	—	—	—	—	—	—	376,915	376,915




Total	—	—	—	—	—	—	376,915	376,915
Total loans and leases
Pass	1,554,843	333,793	173,825	138,032	37,324	175,272	809,413	3,222,502
Watch	105,884	110,339	71,265	16,775	6,419	3,354	245,076	559,112
Special mention	26,789	13,868	21,840	1,138	3,127	75	35,274	102,111
Substandard	38,423	35,260	49,237	33,691	15,443	8,773	27,366	208,193
Doubtful	380	2,807	1,762	1,182	165	1,358	501	8,155


Total			$	1,726,319		$	496,067		$	317,929		$	190,818		$	62,478		$	188,832		$	1,117,630		$	4,100,073

Past due loans and leases were as follows:


	At September 30, 2024
	Accruing and Nonaccruing Loans and Leases												Nonperforming Loans and Leases
(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		> 89 Days Past Due		Total Past Due		Current		Total Loans and Leases Receivable		> 89 Days Past Due and Accruing		Nonaccrual Balance		Total
Loans held for sale	$	2,266	$	1,361	$	1,050	$	4,677	$	684,193	$	688,870	$	1,050	$	—	$	1,050

Term lending	19,776		5,124		17,694		42,594		1,512,047		1,554,641		1,923		23,462		25,385
Asset-based lending	—		—		—		—		471,897		471,897		—		—		—
Factoring	—		—		—		—		362,295		362,295		—		29		29
Lease financing	3,605		1,595		109		5,309		146,865		152,174		60		746		806

SBA/USDA	—		952		2,172		3,124		565,504		568,628		331		2,175		2,506
Other commercial finance	—		—		—		—		185,964		185,964		—		—		—
Commercial finance	23,381		7,671		19,975		51,027		3,244,572		3,295,599		2,314		26,412		28,726


Consumer finance	3,962		3,186		3,053		10,201		238,599		248,800		3,053		—		3,053
Tax services	—		—		8,733		8,733		92		8,825		8,733		—		8,733
Warehouse finance	—		—		—		—		517,847		517,847		—		—		—
Total loans and leases held for investment	27,343		10,857		31,761		69,961		4,001,110		4,071,071		14,100		26,412		40,512
Total loans and leases	$	29,609	$	12,218	$	32,811	$	74,638	$	4,685,303	$	4,759,941	$	15,150	$	26,412	$	41,562


	At September 30, 2023
	Accruing and Nonaccruing Loans and Leases												Nonperforming Loans and Leases
(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		> 89 Days Past Due		Total Past Due		Current		Total Loans and Leases Receivable		> 89 Days Past Due and Accruing		Nonaccrual Balance		Total
Loans held for sale	$	626	$	549	$	306	$	1,481	$	76,298	$	77,779	$	306	$	—	$	306

Term lending	13,898		7,723		11,136		32,757		1,275,376		1,308,133		3,737		15,324		19,061
Asset-based lending	—		—		123		123		382,248		382,371		—		18,082		18,082
Factoring	—		—		—		—		358,344		358,344		—		1,298		1,298
Lease financing	6,865		158		4,828		11,851		171,541		183,392		4,242		1,666		5,908
Insurance premium finance	2,159		1,262		2,339		5,760		794,317		800,077		2,339		—		2,339
SBA/USDA	512		—		1,835		2,347		522,403		524,750		833		1,002		1,835
Other commercial finance	—		—		91		91		166,000		166,091		91		—		91
Commercial finance	23,434		9,143		20,352		52,929		3,670,229		3,723,158		11,242		37,372		48,614


Consumer finance	2,992		2,425		2,210		7,627		246,789		254,416		2,210		—		2,210
Tax services	—		—		5,082		5,082		110		5,192		5,082		—		5,082
Warehouse finance	—		—		—		—		376,915		376,915		—		—		—
Total loans and leases held for investment	26,426		11,568		27,644		65,638		4,294,043		4,359,681		18,534		37,372		55,906
Total loans and leases	$	27,052	$	12,117	$	27,950	$	67,119	$	4,370,341	$	4,437,460	$	18,840	$	37,372	$	56,212

Nonaccrual loans and leases by year of origination were as follows:


	Amortized Cost Basis
(Dollars in thousands)	Term Loans and Leases by Origination Year												Revolving Loans and Leases		Total		Nonaccrual with No ACL
At September 30, 2024	2024		2023		2022		2021		2020		Prior
Term lending	$	9,281	$	3,433	$	5,369	$	1,386	$	625	$	3,368	$	—	$	23,462	$	2,579

Factoring	—		—		—		—		—		—		29		29		—
Lease financing	—		577		11		46		2		110		—		746		—

SBA/USDA	—		738		55		55		742		585		—		2,175		681

Commercial finance	9,281		4,748		5,435		1,487		1,369		4,063		29		26,412		3,260





Total nonaccrual loans and leases	$	9,281	$	4,748	$	5,435	$	1,487	$	1,369	$	4,063	$	29	$	26,412	$	3,260


	Amortized Cost Basis
(Dollars in thousands)	Term Loans and Leases by Origination Year												Revolving Loans and Leases		Total		Nonaccrual with No ACL
At September 30, 2023	2023		2022		2021		2020		2019		Prior
Term lending	$	865	$	4,942	$	2,933	$	2,165	$	3,134	$	1,285	$	—	$	15,324	$	—
Asset-based lending	—		—		—		—		—		—		18,082		18,082		—
Factoring	—		—		—		—		—		—		1,298		1,298		—
Lease financing	—		—		446		660		—		560		—		1,666		1

SBA/USDA	—		750		—		—		—		252		—		1,002		—

Commercial finance	865		5,692		3,379		2,825		3,134		2,097		19,380		37,372		1





Total nonaccrual loans and leases	$	865	$	5,692	$	3,379	$	2,825	$	3,134	$	2,097	$	19,380	$	37,372	$	1

Loans and leases that are 90 days or more delinquent and accruing by year of origination were as follows:


	Amortized Cost Basis
(Dollars in thousands)	Term Loans and Leases by Origination Year												Revolving Loans and Leases		Total
At September 30, 2024	2024		2023		2022		2021		2020		Prior
Loans held for sale	$	1,031	$	19	$	—	$	—	$	—	$	—	$	—	$	1,050
Term lending	—		621		354		719		217		12		—		1,923


Lease financing	—		—		—		2		58		—		—		60

SBA/USDA	—		—		331		—		—		—		—		331

Commercial finance	—		621		685		721		275		12		—		2,314


Consumer finance	736		1,841		388		88		—		—		—		3,053
Tax services	8,733		—		—		—		—		—		—		8,733

Total loans and leases held for investment	9,469		2,462		1,073		809		275		12		—		14,100
Total 90 days or more delinquent and accruing	$	10,500	$	2,481	$	1,073	$	809	$	275	$	12	$	—	$	15,150


	Amortized Cost Basis
(Dollars in thousands)	Term Loans and Leases by Origination Year												Revolving Loans and Leases		Total
At September 30, 2023	2023		2022		2021		2020		2019		Prior
Loans held for sale	$	306	$	—	$	—	$	—	$	—	$	—	$	—	$	306
Term lending	1,604		1,371		500		233		29		—		—		3,737


Lease financing	151		490		979		784		1,794		44		—		4,242
Insurance premium finance	—		414		114		—		334		1,477		—		2,339
SBA/USDA	—		—		—		833		—		—		—		833
Other commercial finance	—		—		—		—		—		91		—		91
Commercial finance	1,755		2,275		1,593		1,850		2,157		1,612		—		11,242


Consumer finance	891		1,045		246		—		—		—		28		2,210
Tax services	5,082		—		—		—		—		—		—		5,082

Total loans and leases held for investment	7,728		3,320		1,839		1,850		2,157		1,612		28		18,534
Total 90 days or more delinquent and accruing	$	8,034	$	3,320	$	1,839	$	1,850	$	2,157	$	1,612	$	28	$	18,840

Certain loans and leases 90 days or more past due as to interest or principal continue to accrue because they are (1) well-secured and in the process of collection or (2) consumer loans exempt under regulatory rules from being classified as non-accrual until later delinquency, usually 120 days past due.

The following table provides the average recorded investment in nonaccrual loans and leases:


	Fiscal Year Ended September 30,
(Dollars in thousands)	2024		2023
Term lending	$	20,133	$	11,494
Asset-based lending	4,896		10,295
Factoring	2,079		578
Lease financing	1,176		2,852

SBA/USDA	2,230		1,244

Commercial finance	30,514		26,463





Total loans and leases	$	30,514	$	26,463

The recognized interest income on the Company's nonaccrual loans and leases for the fiscal years ended September 30, 2024 and 2023 was not significant.

Effective October 1, 2023, the Company adopted ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures on a prospective basis. Financial information at and for the fiscal year ended September 30, 2024 is reflected as such. The historical information disclosed is in accordance with Subtopic ASC 310-40, Receivables – Troubled Debt Restructurings by Creditors.

Modifications made to borrowers experiencing financial difficulty during the fiscal year ended September 30, 2024 were $9.8 million in the commercial finance loan portfolio. The types of modifications granted were term extensions and reduced payments.

During the fiscal year ended September 30, 2024, the Company had $1.5 million of commercial finance loans where a modification was granted in the previous 12 months in which there was a payment default. At September 30, 2024, $1.5 million of modifications granted were in the over 89 days past due category.

There were $1.1 million loans that were modified in a trouble debt restructuring ("TDR") during the fiscal year ended September 30, 2023. The Company had $0.9 million of commercial finance loans that were modified within the previous 12 months experience a payment default during the fiscal year ended September 30, 2023. TDR net charge-offs and the impact of TDRs on the Company's allowance for credit losses were insignificant during the fiscal year ended September 30, 2023.

EARNINGS PER COMMON SHARE ("EPS")

12 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

EARNINGS PER COMMON SHARE ("EPS")

The Company has granted restricted share awards with dividend rights that are considered to be participating securities. Accordingly, a portion of the Company’s earnings is allocated to those participating securities in the earnings per share calculation under the two-class method. Basic EPS is computed using the two-class method by dividing income available to common stockholders after the allocation of dividends and undistributed earnings to the participating securities by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated using the more dilutive of the two-class method or the treasury stock method. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, and is computed after giving consideration to the weighted average dilutive effect upon vesting of performance share units ("PSUs") and restricted stock grants, the exercise of stock options, if any, and after the allocation of earnings to the participating securities. Antidilutive securities are disregarded in earnings per share calculations. Diluted EPS shown below reflects the two-class method, as diluted EPS under the two-class method was more dilutive than under the treasury stock method.

A reconciliation of net income and common stock share amounts used in the computation of basic and diluted earnings per share is presented below.


	Fiscal Year Ended September 30,
(Dollars in thousands, except per share data)	2024		2023		2022
Basic income per common share:
Net income attributable to Pathward Financial, Inc.	$	168,357	$	163,615	$	156,386
Dividends and undistributed earnings allocated to participating securities	(1,542)		(2,453)		(2,565)
Basic net earnings available to common stockholders	166,815		161,162		153,821
Undistributed earnings allocated to nonvested restricted stockholders	1,495		2,372		2,468
Reallocation of undistributed earnings to nonvested restricted stockholders	(1,493)		(2,364)		(2,468)


Diluted net earnings available to common stockholders	$	166,817	$	161,170	$	153,821

Total weighted-average basic common shares outstanding	25,169,937		26,833,079		29,227,071
Effect of dilutive securities(1)

Performance share units	31,813		92,527		5,176

Total effect of dilutive securities	31,813		92,527		5,176
Total weighted-average diluted common shares outstanding	25,201,750		26,925,606		29,232,247

Net earnings per common share:
Basic earnings per common share	$	6.63	$	6.01	$	5.26
Diluted earnings per common share(2)	$	6.62	$	5.99	$	5.26

(1) Represents the effect of the assumed exercise of stock options and vesting of performance share units and restricted stock, as applicable, utilizing the treasury stock method.

(2) Excluded from the computation of diluted earnings per share for the fiscal years ended September 30, 2024, 2023, and 2022, respectively, were 232,601, 408,477, and 487,476 weighted average shares of nonvested restricted stock because their inclusion would be anti-dilutive.

PREMISES, FURNITURE, AND EQUIPMENT, NET

12 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

PREMISES, FURNITURE, AND EQUIPMENT, NET

Premises, furniture, and equipment consists of the following:


	At September 30,
(Dollars in thousands)	2024		2023
Land	$	1,354	$	1,354
Buildings	21,685		21,331
Furniture, fixtures, and equipment	63,823		62,312
	86,862		84,997
Less: accumulated depreciation and amortization	(47,807)		(45,837)
Net book value	$	39,055	$	39,160

Depreciation expense of premises, furniture and equipment included in occupancy and equipment expense was approximately $10.2 million, $11.1 million and $11.3 million for the fiscal years ended September 30, 2024, 2023 and 2022, respectively.

RENTAL EQUIPMENT, NET

Rental equipment consists of the following:


	At September 30,
(Dollars in thousands)	2024		2023
Computers and IT networking equipment	$	21,308	$	25,094
Motor vehicles and other	140,920		122,845
Other furniture and equipment	38,755		37,637
Solar panels and equipment	128,296		142,355
Total	329,279		327,931

Accumulated depreciation	(124,987)		(117,418)
Unamortized initial direct costs	1,047		1,237
Net book value	$	205,339	$	211,750

Future minimum lease payments expected to be received for operating leases at September 30, 2024 were as follows:


(Dollars in thousands)
2025	$	41,983
2026	32,493
2027	24,333
2028	15,017
2029	9,402
Thereafter	5,921
Total	$	129,149

RENTAL EQUIPMENT, NET

12 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

RENTAL EQUIPMENT, NET

PREMISES, FURNITURE, AND EQUIPMENT, NET

Premises, furniture, and equipment consists of the following:


	At September 30,
(Dollars in thousands)	2024		2023
Land	$	1,354	$	1,354
Buildings	21,685		21,331
Furniture, fixtures, and equipment	63,823		62,312
	86,862		84,997
Less: accumulated depreciation and amortization	(47,807)		(45,837)
Net book value	$	39,055	$	39,160

Depreciation expense of premises, furniture and equipment included in occupancy and equipment expense was approximately $10.2 million, $11.1 million and $11.3 million for the fiscal years ended September 30, 2024, 2023 and 2022, respectively.

RENTAL EQUIPMENT, NET

Rental equipment consists of the following:


	At September 30,
(Dollars in thousands)	2024		2023
Computers and IT networking equipment	$	21,308	$	25,094
Motor vehicles and other	140,920		122,845
Other furniture and equipment	38,755		37,637
Solar panels and equipment	128,296		142,355
Total	329,279		327,931

Accumulated depreciation	(124,987)		(117,418)
Unamortized initial direct costs	1,047		1,237
Net book value	$	205,339	$	211,750

Future minimum lease payments expected to be received for operating leases at September 30, 2024 were as follows:


(Dollars in thousands)
2025	$	41,983
2026	32,493
2027	24,333
2028	15,017
2029	9,402
Thereafter	5,921
Total	$	129,149

GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

The Company held a total of $309.5 million of goodwill at September 30, 2024. The recorded goodwill is a result of multiple business combinations that occurred from 2015 to 2018. There have been no changes to the carrying amount of goodwill during the fiscal years ended September 30, 2024 and 2023.

The changes in the carrying amount of the Company's intangible assets were as follows:


(Dollars in thousands)	Trademark(1)		Non-Compete		Customer Relationships(2)		All Others(3)		Total
At September 30, 2023	$	7,477	$	—	$	9,110	$	4,133	$	20,720

Amortization during the period	(1,055)		—		(2,544)		(532)		(4,131)

At September 30, 2024	$	6,422	$	—	$	6,566	$	3,601	$	16,589

Gross carrying amount	$	13,774	$	301	$	77,578	$	7,732	$	99,385
Accumulated amortization	(7,352)		(301)		(60,094)		(3,978)		(71,725)
Accumulated impairment	—		—		(10,918)		(153)		(11,071)
At September 30, 2024	$	6,422	$	—	$	6,566	$	3,601	$	16,589

At September 30, 2022	$	8,605	$	—	$	12,395	$	4,691	$	25,691

Amortization during the period	(1,128)		—		(3,285)		(558)		(4,971)

At September 30, 2023	$	7,477	$	—	$	9,110	$	4,133	$	20,720

Gross carrying amount	$	14,314	$	301	$	77,578	$	7,796	$	99,989
Accumulated amortization	(6,837)		(301)		(57,550)		(3,445)		(68,133)
Accumulated impairment	—		—		(10,918)		(218)		(11,136)
At September 30, 2023	$	7,477	$	—	$	9,110	$	4,133	$	20,720

(1) Book amortization period of 5-15 years. Amortized using the straight line and accelerated methods.

(2) Book amortization period of 10-30 years. Amortized using the accelerated method.

(3) Book amortization period of 3-20 years. Amortized using the straight line method.

The estimated amortization expense of intangible assets assumes no activities, such as acquisitions, which would result in additional amortizable intangible assets. Estimated amortization expense of intangible assets in the subsequent fiscal years at September 30, 2024 was as follows:


(Dollars in thousands)
2025	$	3,569
2026	3,223
2027	2,577
2028	2,267
2029	1,637
Thereafter	3,316
Total anticipated intangible amortization	$	16,589

There were no impairments to intangible assets for the fiscal years ended September 30, 2024 and 2023. Intangible impairment expense is recorded within the impairment expense line of the Consolidated Statements of Operations.

OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES

12 Months Ended

Sep. 30, 2024

Leases [Abstract]

OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES

Operating lease right-of-use ("ROU") assets, included in other assets, were $24.4 million and $26.9 million at September 30, 2024 and 2023, respectively.

Operating lease liabilities, included in accrued expenses and other liabilities, were $26.0 million and $28.8 million at September 30, 2024 and 2023, respectively.

Undiscounted future minimum operating lease payments and a reconciliation to the amount recorded as operating lease liabilities at September 30, 2024 were as follows:


(Dollars in thousands)
2025	$	3,985
2026	3,435
2027	3,152
2028	3,095
2029	2,841
Thereafter	12,703
Total undiscounted future minimum lease payments	29,211
Discount	(3,189)
Total operating lease liabilities	$	26,022

The weighted-average discount rate and remaining lease term for operating leases were as follows:


	At September 30,
	2024		2023
Weighted-average discount rate	2.45	%	2.38	%
Weighted-average remaining lease term (years)	8.78		9.66

The components of total lease costs for operating leases were as follows:


	Fiscal Year Ended September 30,
(Dollars in thousands)	2024		2023		2022
Lease expense	$	3,997	$	3,951	$	4,431
Short-term and variable lease cost	75		142		194
ROU asset impairment	—		—		670
Sublease income	(1,300)		(1,409)		(1,267)
Total lease cost for operating leases	$	2,772	$	2,684	$	4,028

TIME CERTIFICATES OF DEPOSIT

12 Months Ended

Sep. 30, 2024

Deposits [Abstract]

TIME CERTIFICATES OF DEPOSIT

Time certificates of deposit in denominations of $250,000 or more were approximately $4.1 million and $5.0 million at September 30, 2024, and 2023, respectively.

Scheduled maturities of time certificates of deposit at September 30, 2024 were as follows for the fiscal years ending:


(Dollars in thousands)
2025	$	3,104
2026	26,102
2027	—
2028	—
2029	—
Thereafter	—
Total(1)	$	29,206

(1) As of September 30, 2024, the Company had $25.0 million certificates of deposit recorded in wholesale deposits on the Consolidated Statements of Financial Condition.

Under the Dodd-Frank Act, IRA and non-IRA deposit accounts are insured up to $250,000 by the DIF under management of the FDIC.

SHORT-TERM AND LONG-TERM BORROWINGS

12 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

SHORT-TERM AND LONG-TERM BORROWINGS

Short-Term Borrowings


	At September 30,
(Dollars in thousands)	2024		2023
Overnight fed funds purchased	$	377,000	$	13,000

Total	$	377,000	$	13,000

The Company had $257.0 million of overnight federal funds purchased from the FHLB and $120.0 million from other financial institutions at September 30, 2024, as compared to $13.0 million from the FHLB at September 30, 2023.

The Bank has executed blanket pledge agreements whereby the Bank assigns, transfers, and pledges to the FHLB and grants to the FHLB a security interest in real estate and securities collateral. The Bank has the right to use, commingle, and dispose of the collateral it has assigned to the FHLB. Under the agreement, the Bank must maintain “eligible collateral” that has a “lending value” at least equal to the “required collateral amount,” all as defined by the agreement.

At September 30, 2024 and 2023, the Bank pledged securities with fair values of approximately $1.04 billion and $996.9 million, respectively, to be used against FHLB advances as needed. In addition, qualifying loans of approximately $136.9 million were pledged as collateral at September 30, 2024 compared to $21.3 million at September 30, 2023.

The Company had no securities sold under agreements to repurchase at September 30, 2024 and 2023.

Long-Term Borrowings


	At September 30,
(Dollars in thousands)	2024		2023

Trust preferred securities	$	13,661	$	13,661
Subordinated debentures, net of issuance costs	19,693		19,591
Other long-term borrowings(1)	—		621
Total	$	33,354	$	33,873

(1) Includes zero and $0.6 million of discounted leases at September 30, 2024 and 2023, respectively.

Scheduled maturities of the Company's long-term borrowings at September 30, 2024 were as follows for the fiscal years ending:


(Dollars in thousands)	Trust preferred securities		Subordinated debentures		Other long-term borrowings		Total
2025	$	—	$	—	$	—	$	—
2026	—		—		—		—
2027	—		—		—		—
2028	—		—		—		—
2029	—		—		—		—
Thereafter	13,661		19,693		—		33,354
Total long-term borrowings	$	13,661	$	19,693	$	—	$	33,354

Certain trust preferred securities are due to First Midwest Financial Capital Trust I, a 100%-owned nonconsolidated subsidiary of the Company. The securities were issued in 2001 in conjunction with the Trust’s issuance of 10,000 shares of trust preferred securities. The securities bear the same interest rate and terms as the trust preferred securities. The securities are included on the Consolidated Statements of Financial Condition as liabilities.

The Company issued all of the 10,310 authorized shares of trust preferred securities of First Midwest Financial Capital Trust I holding solely securities. Distributions are paid semi-annually. Cumulative cash distributions are calculated at 6-month CME Term SOFR plus 0.42826% tenor spread adjustment plus 3.75% (8.43% at September 30, 2024 and 9.65% at September 30, 2023), not to exceed 12.5%. The Company may, at one or more times, defer interest payments on the capital securities for up to 10 consecutive semi-annual periods, but not beyond July 25, 2031. At the end of any deferral period, all accumulated and unpaid distributions are required to be paid. The capital securities are required to be redeemed on July 25, 2031; however, the Company has a semi-annual option to shorten the maturity date. The redemption price is $1,000 per capital security plus any accrued and unpaid distributions to the date of redemption.

Holders of the capital securities have no voting rights, are unsecured and rank junior in priority of payment to all of the Company’s indebtedness and senior to the Company’s common stock.

Although the securities issued by the Trust are not included as a component of stockholders’ equity, the securities are treated as capital for regulatory purposes, subject to certain limitations.

Through the Crestmark Acquisition, the Company acquired $3.4 million in floating rate capital securities due to Crestmark Capital Trust I, a 100%-owned nonconsolidated subsidiary of the Company. The subordinated debentures bear interest at 3-month CME Term SOFR plus 0.26161% tenor spread adjustment plus 3.00%, have a stated maturity of 30 years and are redeemable by the Company at par, with regulatory approval. The interest rate is reset quarterly at distribution dates in February, May, August, and November. The interest rate as of September 30, 2024 was 7.85%. The Company has the option to defer interest payments on the subordinated debentures from time to time for a period not to exceed five consecutive years.

On September 23, 2022, the Company completed a private placement of $20.0 million of its 6.625% fixed-to-floating rate subordinated debentures due 2032 to certain qualified institutional buyers and accredited investors. These notes will mature on September 30, 2032, unless earlier redeemed. Beginning on September 30, 2027, the notes may be redeemed, in whole or in part, at the Company's option subject to regulatory approval, on any scheduled interest payment date. Prior to September 30, 2027, the notes may be redeemed, in whole but not in part, at any time upon certain other specified events. At September 30, 2024, the Company had $19.7 million in aggregate principal amount in subordinated debentures remains outstanding.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 6
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-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/470/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 20: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

STOCKHOLDERS' EQUITY	12 Months Ended
STOCKHOLDERS' EQUITY	Sep. 30, 2024
Equity [Abstract]
STOCKHOLDERS' EQUITY	STOCKHOLDERS' EQUITY Repurchase of Common Stock. The Company's Board of Directors authorized the September 3, 2021 share repurchase program to repurchase up to 6,000,000 shares of the Company's outstanding common stock. This authorization was effective from September 3, 2021 through September 30, 2024, with 146,435 shares authorized by this repurchase program not repurchased when it expired. On August 25, 2023, the Company's Board of Directors announced a share repurchase program to repurchase up to an additional 7,000,000 shares of the Company's outstanding common stock on or before September 30, 2028. During the fiscal years ended September 30, 2024 and 2023, the Company repurchased 1,520,001 and 2,628,541 shares, respectively, as part of the share repurchase programs. Under the repurchase programs, repurchased shares were retired and designated as authorized but unissued shares. The Company accounts for repurchased shares using the par value method under which the repurchase price is charged to paid-in capital up to the amount of the original proceeds of those shares. When the repurchase price is greater than the original issue proceeds, the excess is charged to retained earnings. As of September 30, 2024, 7,000,000 shares of common stock remained available for repurchase. For the fiscal years ended September 30, 2024 and 2023, the Company also repurchased 126,221 and 67,103 shares, or $6.1 million and $2.5 million, of common stock, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock. Repurchase of Treasury Stock. The Company accounts for the retirement of repurchased shares, including treasury stock, using the par value method under which the repurchase price is charged to paid-in capital up to the amount of the original proceeds of those shares. When the repurchase price is greater than the original issue proceeds, the excess is charged to retained earnings. The Company retired 129,929 and 149,679 shares of common stock held in treasury during the fiscal years ended September 30, 2024 and 2023, respectively.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

+ Details

STOCK COMPENSATION

12 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

STOCK COMPENSATION

The Company previously maintained the Pathward Financial, Inc. 2002 Omnibus Incentive Plan, as amended and restated (the "Prior Omnibus Incentive Plan"). No awards were granted under the Prior Omnibus Incentive Plan following November 25, 2022, the date that the Prior Omnibus Incentive Plan expired by its terms. On February 27, 2024, the shareholders of the Company voted to approve the Pathward Financial, Inc. 2023 Omnibus Incentive Plan (the "Plan"). The Plan permits the granting of various types of awards including but not limited to nonvested (restricted) shares and PSUs to certain officers and directors of the Company. Awards may be granted by the Compensation Committee of the Board of Directors based on the performance of the award recipients or other relevant factors.

Shares have previously been granted each year to executives and senior leadership members under the applicable Company incentive plan. These shares vest at various times ranging from immediately to three years based on circumstances at time of grant. The fair value is determined based on the fair market value of the Company’s stock on the grant date. Director shares are issued to the Company’s directors, and these shares have historically vested from immediately to up to one year from the grant date.

The Company also grants selected executives PSU awards. The vesting of these awards is contingent on meeting company-wide performance goals, including earnings per share. PSUs are generally granted at the market value of the underlying share on the date of grant, adjusted for dividends, as PSUs do not participate in dividends. The awards contingently vest over a period of three years and have payout levels ranging from a threshold of 50% to a maximum of 200%. Upon vesting, each PSU earned is converted into one share of common stock.

The fair value of the PSUs is determined by the dividend-adjusted fair value on the grant date for those awards subject to a performance condition. For those PSUs subject to a market condition, a simulation valuation is performed.

In addition, during the first and second quarters of fiscal year 2017, shares were granted to certain executive officers of the Company in connection with their signing of employment agreements with the Company. These stock awards vest in equal installments over eight years.

The following tables show the activity of share awards (including shares of restricted stock subject to vesting, fully-vested restricted stock, and PSUs) granted, exercised or forfeited under all of the Company’s incentive plans during the fiscal years ended September 30, 2024 and 2023.


(Dollars in thousands, except per share data)	Number of Shares	Weighted Average Fair Value at Grant
Nonvested shares outstanding, September 30, 2023	370,151	$	35.87
Granted	181,117	50.61
Vested	(288,734)	40.22
Forfeited or expired	(13,864)	42.49
Nonvested shares outstanding, September 30, 2024	248,670	$	41.19

Nonvested shares outstanding, September 30, 2022	474,348	$	36.52
Granted	135,417	36.68
Vested	(229,803)	37.46
Forfeited or expired	(9,811)	41.14
Nonvested shares outstanding, September 30, 2023	370,151	$	35.87


(Dollars in thousands, except per share data)	Number of Units	Weighted Average Fair Value at Grant
Performance share units outstanding, September 30, 2023	155,804	$	41.20
Granted(1)	52,125	49.61
Vested	(60,984)	55.47
Forfeited or expired	(4,483)	44.59
Performance share units outstanding, September 30, 2024	142,462	$	47.24

Performance share units outstanding, September 30, 2022	96,689	$	42.59
Granted(2)	59,115	38.94
Vested	—	—
Forfeited or expired	—	—
Performance share units outstanding, September 30, 2023	155,804	$	41.20
(1) The activity in this table includes 60,984 shares related to the fiscal year 2021 PSUs, which are included in this table under the assumption of a target performance achievement. The final performance was assessed after September 30, 2023, resulted in an achievement greater than target, and an additional 47,252 shares were allocated to the participants in the plan.
(2) The number of PSUs granted reflects the target number of PSUs able to be earned under a given award.

Compensation expense for share-based awards is recorded over the vesting period at the fair value of the award at the time of the grant. The exercise price of fair value of nonvested (restricted) shares and PSUs granted under the Company’s incentive plans is equal to the fair market value of the underlying stock at the grant date, adjusted for dividends where applicable. The Company has elected to record forfeitures as they occur.

The following table shows the effect to income, net of tax benefits, of share-based compensation expense recorded:


	Fiscal Year Ended September 30,
(Dollars in thousands)	2024		2023		2022
Total employee stock-based compensation expense recognized in income, net of tax effects of $1,873, $1,838, and $2,181, respectively	$	8,416	$	8,465	$	7,824

As of September 30, 2024, stock-based compensation expense not yet recognized in income totaled $6.3 million, which is expected to be recognized over a weighted-average remaining period of 1.56 years.

INCOME TAXES

12 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

The Company and its subsidiaries file a consolidated federal income tax return on a fiscal year basis. The provision for income taxes were as follows:


	Fiscal Year Ended September 30,
(Dollars in thousands)	2024		2023		2022
Federal:
Current	$	9,815	$	8,682	$	5,657
Deferred	9,281		(1,168)		12,900
	19,096		7,514		18,557
State:
Current	8,211		7,817		4,720
Deferred	1,834		993		4,687
	10,045		8,810		9,407
Income tax expense	$	29,141	$	16,324	$	27,964

The tax effects of the Company's temporary differences that give rise to significant portions of its deferred tax assets and liabilities were:


	At September 30,
(Dollars in thousands)	2024		2023
Deferred tax assets:
Allowance for credit losses	$	11,042	$	11,606
Deferred compensation	4,351		3,739
Stock based compensation	2,402		3,916


Valuation adjustments	175		393
General business credits(1)	55,706		59,783
Accrued expenses	2,763		2,558
Lease liability	6,503		7,210
Net unrealized loss on securities available for sale	50,819		84,908
Premises and equipment	3,939		—
Other assets	3,940		4,193
	141,640		178,306
Deferred tax liabilities:
Premises and equipment	—		(2,016)
Intangibles	(7,859)		(5,862)


Leased assets	(76,016)		(66,877)
Right-of-use assets	(6,218)		(6,877)
Other liabilities	(1,346)		(1,349)
	(91,439)		(82,981)
Net deferred tax assets	$	50,201	$	95,325

(1) The general business credits are investment tax credits generated from qualified solar energy property placed in service during the fiscal years ended September 30, 2024 and 2023. These credits will begin to expire on September 30, 2042.

As of September 30, 2024, the Company had a gross deferred tax asset of $3.0 million for separate company state cumulative net operating loss carryforwards, for which $3.0 million was reserved. At September 30, 2023, the Company had a gross deferred tax asset of $2.7 million for separate company state cumulative net operating loss carryforwards, for which $2.7 million was reserved. These state operating loss carryforwards will expire in various subsequent periods.

In general, management believes that the realization of its deferred tax assets is more likely than not based on the expectations as to future taxable income; therefore, there was no deferred tax valuation allowance at September 30, 2024, or 2023 with the exception of the state cumulative net operating loss carryforwards discussed above.

The table below reconciles the statutory federal income tax expense and rate to the effective income tax expense and rate for the fiscal years presented. The Company's effective tax rate is calculated by dividing income tax expense by income before income tax expense.


	Fiscal Year Ended September 30,
	2024				2023				2022
(Dollars in thousands)	Amount		Rate		Amount		Rate		Amount		Rate
Statutory federal income tax expense and rate	$	41,746	21.0	%	$	38,248	21.0	%	$	38,714	21.0	%
Change in tax rate resulting from:
State income taxes net of federal benefits	7,875		4.0	%	7,047		3.9	%	7,413		4.0	%
162(m) disallowance	1,874		0.9	%	919		0.5	%	1,125		0.4	%
Tax exempt income	(690)		(0.3)	%	(783)		(0.4)	%	(743)		(0.4)	%

General business credits	(21,132)		(10.6)	%	(28,633)		(15.7)	%	(17,589)		(9.5)	%

Other, net	(532)		(0.3)	%	(474)		(0.3)	%	(956)		(0.3)	%
Income tax expense	$	29,141	14.7	%	$	16,324	9.0	%	$	27,964	15.2	%

The Company uses the flow through method of accounting for investment tax credits under which the credits are recognized as a reduction to income tax expense in the period in which the credit arises. During the fiscal years ended September 30, 2024, 2023, and 2022, $19.7 million, $27.4 million, and $16.8 million in investment tax credits were recognized as a reduction to income tax expense, respectively.

The Company’s tax reserves reflect management’s judgment as to the resolution of the issues involved if subject to judicial review. While the Company believes that its reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be resolved at a financial cost that does not exceed its related reserve. With respect to these reserves, the Company’s income tax expense would include (i) any changes in tax reserves arising from material changes during the period in the facts and circumstances surrounding a tax issue, and (ii) any difference from the Company’s tax position as recorded in the Consolidated Financial Statements and the final resolution of a tax issue during the period.

The tax years ended September 30, 2021 and later remain subject to examination by the Internal Revenue Service. For state purposes, the tax years ended September 30, 2021 and later remain open for examination, with few exceptions.

A reconciliation of the beginning and ending balances for liabilities associated with unrecognized tax benefits follows:


	At September 30,
(Dollars in thousands)	2024		2023
Balance at beginning of fiscal year	$	521	$	645



Additions (reductions) for tax positions related to prior years	56		(124)
Balance at end of fiscal year	$	577	$	521

The total amount of unrecognized tax benefits that, if recognized, would impact the effective rate was $540,000 as of September 30, 2024. The Company recognizes interest related to unrecognized tax benefits as a component of income tax expense. The amount of accrued interest related to unrecognized tax benefits was $93,000 as of September 30, 2024. The Company does not anticipate any significant change in the total amount of unrecognized tax benefits within the next 12 months.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 231
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12C
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 12B
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477891/740-270-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-13

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/740/tableOfContent

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-14

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-21

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
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-Subparagraph (b)
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-17

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS

12 Months Ended

Sep. 30, 2024

CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS [Abstract]

CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS

The Company and the Bank are required to comply with the regulatory capital rules administered by federal banking agencies (the "Capital Rules"). Under the Capital Rules and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors.

The Capital Rules require the Company and the Bank to maintain minimum ratios (set forth in the table below) of total risk-based capital and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and a leverage ratio consisting of Tier 1 capital (as defined) to average assets (as defined). At September 30, 2024, the Company and the Bank exceeded federal regulatory minimum capital requirements to be classified as well-capitalized under the prompt corrective action requirements. The Company and the Bank took the AOCI opt-out election; under the rule, non-advanced approach banking organizations were given a one-time option to exclude certain AOCI components.

The table below includes certain non-GAAP financial measures that are used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews these measures along with other measures of capital as part of its financial analyses and has included this non-GAAP financial information, and the corresponding reconciliation to total equity.


	Company		Bank		Minimum to be Adequately Capitalized Under Prompt Corrective Action Provisions		Minimum to be Well Capitalized Under Prompt Corrective Action Provisions
At September 30, 2024
Tier 1 leverage capital ratio	9.26	%	9.44	%	4.00	%	5.00	%
Common equity Tier 1 capital ratio	12.61		13.12		4.50		6.50
Tier 1 capital ratio	12.86		13.12		6.00		8.00
Total capital ratio	14.08		13.97		8.00		10.00
At September 30, 2023
Tier 1 leverage capital ratio	8.11	%	8.32	%	4.00	%	5.00	%
Common equity Tier 1 capital ratio	11.25		11.81		4.50		6.50
Tier 1 capital ratio	11.50		11.81		6.00		8.00
Total capital ratio	12.84		12.76		8.00		10.00

The following table provides a reconciliation of the amounts included in the table above for the Company.


	Standardized Approach(1)
(Dollars in thousands)	September 30, 2024		September 30, 2023
Total stockholders' equity	$	839,605	$	650,625
Adjustments:
LESS: Goodwill, net of associated deferred tax liabilities	296,105		297,679
LESS: Certain other intangible assets	18,018		21,228
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards	13,253		19,679
LESS: Net unrealized (losses) on available for sale securities	(152,328)		(254,294)
LESS: Noncontrolling interest	(277)		(1,005)
ADD: Adoption of Accounting Standards Update 2016-13	1,345		2,017
Common Equity Tier 1(1)	666,179		569,355
Long-term borrowings and other instruments qualifying as Tier 1	13,661		13,661
Tier 1 minority interest not included in common equity Tier 1 capital	(150)		(826)
Total Tier 1 capital	679,690		582,190
Allowance for credit losses	44,687		47,960
Subordinated debentures, net of issuance costs	19,693		19,591
Total capital	$	774,070	$	649,741
(1) Capital ratios were determined using the Basel III capital rules that became effective on January 1, 2015. Basel III revised the definition of capital, increased minimum capital ratios, and introduced a minimum common equity tier 1 capital ratio; those changes were fully phased in through the end of 2021.

The Company and the Bank are required to maintain a capital conservation buffer above the minimum risk-based capital requirements in order to avoid certain limitations on capital distributions, stock repurchases and discretionary bonus payments to executive officers. The capital conservation buffer is exclusively composed of Common Equity Tier 1 capital, and it applies to each of the three risk-based capital ratios but not the leverage ratio. The required Common Equity Tier 1 risk-based, Tier 1 risk-based and total risk-based capital ratios with the buffer are currently 7.0%, 8.5% and 10.5%, respectively.

Based on current and expected continued profitability and subject to continued access to capital markets, we believe that the Company and the Bank will continue to meet the capital conservation buffer of 2.5% in addition to required minimum capital ratios.

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References + Details

REVENUE FROM CONTRACTS WITH CUSTOMERS

12 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

Topic 606 applies to all contracts with customers unless such revenue is specifically addressed under existing guidance. The table below presents the Company’s revenue by operating segment. For additional descriptions of the Company’s operating segments, including additional financial information and the underlying management accounting process, see Note 16. Segment Reporting to the Consolidated Financial Statements.


(Dollars in thousands)	Consumer				Commercial					Corporate Services/Other			Consolidated Company
Fiscal Year Ended September 30,	2024		2023			2024		2023			2024		2023		2024		2023
Net interest income(1)	$	236,011	$	154,316		$	194,967	$	195,239		$	24,140	$	38,306	$	455,118	$	387,861
Noninterest income:
Refund transfer product fees	40,178		39,452			—		—			—		—		40,178		39,452
Refund advance fee income(1)	43,473		37,433			—		—			—		—		43,473		37,433
Card and deposit fees	124,949		149,703			967		1,018			27		25		125,943		150,746
Rental income(1)	—		—			53,443		53,346			714		844		54,157		54,190

Gain on trademarks(1)	—		—			—		—			—		10,000		—		10,000
Gain (loss) on sale of other(1)	(5)		—			7,702		2,005			4,972		658		12,669		2,663
Other income(1)	8,512		6,956			9,636		9,682			5,019		5,477		23,167		22,115
Total noninterest income	217,107		233,544			71,748		66,051			10,732		17,004		299,587		316,599
Revenue	$	453,118	$	387,860		$	266,715	$	261,290		$	34,872	$	55,310	$	754,705	$	704,460
(1) These revenues are not within the scope of Topic 606. Additional details are included in other footnotes to the accompanying financial statements. The scope of Topic 606 explicitly excludes net interest income as well as many other revenues for financial assets and liabilities, including loans, leases, and securities.

Following is a discussion of key revenues within the scope of Topic 606. The Company provides services to customers that have related performance obligations that must be completed to recognize revenue. Revenues are generally recognized immediately upon the completion of the service or over time as services are performed. Any services performed over time generally require that the Company renders services each period; therefore, the Company measures progress in completing these services based upon the passage of time. Revenue from contracts with customers did not generate significant contract assets and liabilities for the fiscal year ended September 30, 2024.

Refund Transfer Product Fees. Refund transfer fees are specific to the Partner Solutions business line and reflect product fees offered by the Company through third-party tax preparers and tax preparation software providers where the Company acts as the partnering financial institution. A refund transfer allows a taxpayer to pay tax preparation and filing fees directly from their federal or state government tax refund, with the remainder of the refund being disbursed in accordance with the terms and conditions of the taxpayer agreement, which may include satisfaction of other disbursement obligations before going directly to the taxpayer via check, direct deposit, or prepaid card. Refund transfer fees are recognized by the Company immediately after the taxpayer's refund has been disbursed in accordance with the contract and are based on standalone pricing included within the terms and conditions. Certain expenses to tax preparation software providers are netted with refund transfer fee income as the Company is considered the agent in these contractual relationships. All refund transfer fees are recorded within the Consumer reporting segment.

Card and Deposit Fees. Card fees relate to the Partner Solutions business line and consist of income from prepaid cards and merchant services, including interchange fees from prepaid cards processed through card association networks, merchant services and other card related services. Interchange rates are generally set by card association networks based on transaction volume and other factors. Since interchange fees are generated by cardholder activity, the Company recognizes the income as transactions occur. Fee income for merchant services and other card related services reflect account management and transaction fees charged to merchants for processing card association network transactions. The associated income is recognized as transactions occur or as services are performed. For the Company's internally managed prepaid card programs, fees are based on standalone pricing within the terms and conditions of the cardholder agreement. The Company is considered the principal of these relationships resulting in all fee income being presented on a gross basis within the Consolidated Statement of Operations. For the Company's sponsorship prepaid card programs where a third-party is considered the Program Manager, the fees are based on standalone pricing within the terms and conditions of the Program Agreement. For these relationships, the Company is considered the agent and certain expenses with the Program Manager, networks and associations are netted with card fee revenue. All card fee income is included in the Consumer reporting segment.

Deposit fees relate to the Partner Solutions and Commercial Finance business lines and consist of income from banking and deposit-related services, including account services, overdraft protection, and wire transfers. Fee income for account services is recognized over the course of the month as the performance obligation is satisfied. Fee income for overdraft protection and wire transfers is recognized at the point in time when such event occurs. For partner solutions, the fees for account services and overdraft protection are based on standalone pricing within the terms and conditions of the Program Agreement with the sponsorship partner. For these relationships, the Company is considered the agent and certain expenses with the partner are netted with deposit fee revenue. For Commercial Finance, fees for wire transfers are based on standalone pricing within the terms and conditions of the customer deposit agreement. Bank and deposit fees for the Partner Solutions and Commercial Finance business lines are included in the Consumer and Commercial reporting segments, respectively. Also included within Card and Deposit Fees for the Consumer reporting segment are servicing fees the Company recognizes for custodial off-balance sheet deposits. This fee income is for services the Bank performs to maintain records of cardholder funds placed at one or more third-party banks insured by the FDIC. The servicing fee is typically reflective of the EFFR.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
-Paragraph 12
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

SEGMENT REPORTING

12 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

SEGMENT REPORTING

An operating segment is generally defined as a component of a business for which discrete financial information is available and whose results are reviewed by the chief operating decision-maker. Operating segments are aggregated into reportable segments if certain criteria are met.

The Company reports its results of operations through the following three business segments: Consumer, Commercial, and Corporate Services/Other. The Partner Solutions business line is reported in the Consumer segment. The Commercial Finance business line is reported in the Commercial segment. The Corporate Services/Other segment includes certain shared services as well as treasury related functions such as the investment portfolio, warehouse finance, wholesale deposits, and borrowings.

The following tables present segment data for the Company:


	Fiscal Year Ended September 30, 2024
(Dollars in thousands)	Consumer		Commercial		Corporate Services/Other		Total
Net interest income	$	236,011	$	194,967	$	24,140	$	455,118
Provision for credit loss	26,950		15,571		140		42,661
Noninterest income	217,107		71,748		10,732		299,587
Noninterest expense	207,778		142,143		163,332		513,253
Income (loss) before income tax expense	218,390		109,001		(128,600)		198,791

Total assets	444,272		4,437,844		2,667,220		7,549,336
Total goodwill	87,145		222,360		—		309,505
Total deposits	5,643,228		10,935		220,922		5,875,085


	Fiscal Year Ended September 30, 2023
(Dollars in thousands)	Consumer		Commercial		Corporate Services/Other		Total
Net interest income	$	154,316	$	195,239	$	38,306	$	387,861
Provision for credit loss	38,920		18,384		50		57,354
Noninterest income	233,544		66,051		17,004		316,599
Noninterest expense	165,782		141,627		157,566		464,975
Income (loss) before income tax expense	183,158		101,279		(102,306)		182,131

Total assets	492,964		4,179,914		2,862,665		7,535,543
Total goodwill	87,145		222,360		—		309,505
Total deposits	6,376,467		5,958		206,757		6,589,182


	Fiscal Year Ended September 30, 2022
(Dollars in thousands)	Consumer		Commercial		Corporate Services/Other		Total
Net interest income	$	98,366	$	187,209	$	21,749	$	307,324
Provision for (reversal of) credit loss	30,680		14,674		(16,816)		28,538
Noninterest income	189,252		68,412		36,143		293,807
Noninterest expense	99,589		128,904		156,782		385,275
Income (loss) before income tax expense	157,349		112,043		(82,074)		187,318

Total assets	356,994		3,487,461		2,902,955		6,747,410
Total goodwill	87,145		222,360		—		309,505
Total deposits	5,695,776		8,965		161,296		5,866,037

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

PARENT COMPANY FINANCIAL STATEMENTS

12 Months Ended

Sep. 30, 2024

Condensed Financial Information Disclosure [Abstract]

PARENT COMPANY FINANCIAL STATEMENTS

Presented below are the condensed financial statements for the parent company, Pathward Financial, Inc.


Condensed Statements of Financial Condition
(Dollars in thousands)	September 30, 2024		September 30, 2023
ASSETS
Cash and cash equivalents	$	1,898	$	1,399
Securities held to maturity, at amortized cost	10,896		9,220
Investment in subsidiaries	865,843		678,572
Other assets	2,263		1,312
Total assets	$	880,900	$	690,503

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Long-term borrowings	$	33,354	$	33,252
Other liabilities	7,941		6,626
Total liabilities	41,295		39,878

STOCKHOLDERS' EQUITY
Common stock	248		262
Additional paid-in capital	638,803		628,500
Retained earnings	354,474		278,655
Accumulated other comprehensive loss	(153,394)		(255,443)
Treasury stock, at cost	(249)		(344)
Total equity attributable to parent	839,882		651,630
Noncontrolling interest	(277)		(1,005)
Total stockholders' equity	839,605		650,625
Total liabilities and stockholders' equity	$	880,900	$	690,503


Condensed Statements of Operations
	Fiscal Year Ended September 30,
(Dollars in thousands)	2024		2023		2022
Interest expense	$	2,667	$	2,538	$	3,982
Other expense	3,297		1,409		1,062
Total expense	5,964		3,947		5,044

Loss before income taxes and equity in undistributed net income of subsidiaries	(5,964)		(3,947)		(5,044)

Income tax benefit	(1,147)		(967)		(1,029)

Loss before equity in undistributed net income of subsidiaries	(4,817)		(2,980)		(4,015)

Equity in undistributed net income of subsidiaries	172,017		166,738		159,652
Other income	1,157		(143)		749
Total income	173,174		166,595		160,401

Net income attributable to parent	$	168,357	$	163,615	$	156,386


Condensed Statements of Cash Flows
	Fiscal Year Ended September 30,
(Dollars in thousands)	2024		2023		2022
Cash flows from operating activities:
Net income attributable to parent	$	168,357	$	163,615	$	156,386
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion, net	102		102		1,020
Equity in undistributed net income of subsidiaries	(172,017)		(166,738)		(159,652)

Net change in accrued interest receivable	46		(30)		(15)
Net change in other assets	(997)		(354)		(636)
Net change in accrued expenses and other liabilities	1,315		(1,793)		3,163
Cash dividend received	87,000		110,000		229,200

Stock compensation	10,287		11,070		10,004
Net cash provided by operating activities	94,093		115,872		239,470

Cash flows from investing activities:




Alternative investments	(1,676)		(1,217)		(3,380)
Net cash (used in) investing activities	(1,676)		(1,217)		(3,380)

Cash flows from financing activities:


Redemption of long-term borrowings	—		—		(75,000)
Payment of debt issuance costs	—		(511)		—
Proceeds from long-term borrowings	—		—		20,000
Dividends paid on common stock	(5,067)		(5,426)		(5,921)

Issuance of common stock due to restricted stock	2		1		1
Issuance of common stock due to ESOP	—		—		2,886
Repurchases of common stock	(86,853)		(120,437)		(168,235)
Net cash (used in) financing activities	(91,918)		(126,373)		(226,269)

Net change in cash and cash equivalents	499		(11,718)		9,821

Cash and cash equivalents at beginning of fiscal year	1,399		13,117		3,296
Cash and cash equivalents at end of fiscal year	$	1,898	$	1,399	$	13,117

The extent to which the Company may pay cash dividends to stockholders will depend on the cash currently available at the Company, as well as the ability of the Bank to pay dividends to the Company.

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Sep. 30, 2024

Quarterly Financial Information Disclosure [Abstract]

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)


	Quarter Ended
(Dollars in thousands, except per share data)	December 31		March 31		June 30		September 30
Fiscal Year 2024
Interest and dividend income	$	115,898	$	126,761	$	113,942	$	119,750
Interest expense	5,862		8,460		3,083		3,828
Net interest income	110,036		118,301		110,859		115,922
Provision for credit loss	9,890		26,052		5,881		838
Noninterest income	52,761		128,945		65,871		52,010
Net income attributable to parent	27,657		65,268		41,835		33,597
Earnings per common share
Basic	$	1.06	$	2.56	$	1.66	$	1.35
Diluted	1.06		2.56		1.66		1.35
Dividend declared per share	0.05		0.05		0.05		0.05

Fiscal Year 2023
Interest and dividend income	$	85,060	$	104,687	$	99,346	$	109,642
Interest expense	1,003		3,282		1,881		4,708
Net interest income	84,057		101,405		97,465		104,934
Provision for credit loss	9,776		36,763		1,773		9,042
Noninterest income	65,777		127,038		67,733		56,051
Net income attributable to parent	27,842		54,771		45,096		35,906
Earnings per common share
Basic	$	0.98	$	1.99	$	1.69	$	1.37
Diluted	0.98		1.99		1.68		1.36
Dividend declared per share	0.05		0.05		0.05		0.05

Fiscal Year 2022
Interest and dividend income	$	72,891	$	85,177	$	73,906	$	80,222
Interest expense	1,278		1,377		1,755		462
Net interest income	71,613		83,800		72,151		79,760
Provision for (reversal of) credit loss	186		32,302		(1,302)		(2,648)
Noninterest income	86,591		109,766		53,994		43,456
Net income attributable to parent	61,324		49,251		22,391		23,420
Earnings per common share
Basic	$	2.00	$	1.66	$	0.76	$	0.81
Diluted	2.00		1.66		0.76		0.81
Dividend declared per share	0.05		0.05		0.05		0.05

FAIR VALUES OF FINANCIAL INSTRUMENTS

12 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

FAIR VALUES OF FINANCIAL INSTRUMENTS

ASC 820, Fair Value Measurements defines fair value, establishes a framework for measuring the fair value of assets and liabilities using a hierarchy system and requires disclosures about fair value measurement. It clarifies that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts.

The fair value hierarchy is as follows:

Level 1 Inputs - Valuation is based upon quoted prices for identical instruments traded in active markets that the Company has the ability to access at measurement date.

Level 2 Inputs - Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which significant assumptions are observable in the market.

Level 3 Inputs - Valuation is generated from model-based techniques that use significant assumptions not observable in the market and are used only to the extent that observable inputs are not available. These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability.

There were no transfers between levels of the fair value hierarchy for the fiscal years ended September 30, 2024 or 2023.

Debt Securities Available for Sale and Held to Maturity. Debt securities available for sale are recorded at fair value on a recurring basis and debt securities held to maturity are carried at amortized cost.

The fair values of debt securities AFS, categorized primarily as Level 2, are recorded using prices obtained from independent asset pricing services that are based on observable transactions, but not quoted markets. Management reviews the prices obtained from independent asset pricing services for unusual fluctuations and compares to current market trading activity.

Equity Securities. Marketable equity securities and certain non-marketable equity securities are recorded at fair value on a recurring basis. The fair values of marketable equity securities are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs).

The following tables summarize the fair values of debt securities available for sale and equity securities as they are measured at fair value on a recurring basis.


	At September 30, 2024
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Debt securities AFS
Corporate securities	$	19,750	$	—	$	19,750	—
SBA securities	81,935		—		81,935		—
Obligations of states and political subdivisions	480		—		480		—
Non-bank qualified obligations of states and political subdivisions	217,990		—		217,990		—
Asset-backed securities	189,698		—		189,698		—
Mortgage-backed securities	1,231,368		—		1,231,368		—
Total debt securities AFS	$	1,741,221	$	—	$	1,741,221	$	—
Common equities and mutual funds(1)	$	3,303	$	3,303	$	—	$	—
Non-marketable equity securities(2)	$	11,828	$	—	$	—	$	—

(1) Equity securities at fair value are included within other assets on the Consolidated Statements of Financial Condition at September 30, 2024.

(2) Consists of certain non-marketable equity securities that are measured at fair value using NAV per share (or its equivalent) as a practical expedient and are excluded from the fair value hierarchy.


	At September 30, 2023
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Debt securities AFS
Corporate securities	$	18,250	$	—	$	18,250	$	—
SBA securities	85,242		—		85,242		—
Obligations of states and political subdivisions	2,289		—		2,289		—
Non-bank qualified obligations of states and political subdivisions	226,723		—		226,723		—
Asset-backed securities	246,199		—		246,199		—
Mortgage-backed securities	1,225,525		—		1,225,525		—
Total debt securities AFS	$	1,804,228	$	—	$	1,804,228	$	—
Common equities and mutual funds(1)	$	3,378	$	3,378	$	—	$	—
Non-marketable equity securities(2)	$	8,389	$	—	$	—	$	—

(1) Equity securities at fair value are included within other assets on the consolidated statement of financial condition at September 30, 2023.

(2) Consists of certain non-marketable equity securities that are measured at fair value using NAV per share (or its equivalent) as a practical expedient and are excluded from the fair value hierarchy.

Loans and Leases. The Company does not record loans and leases at fair value on a recurring basis. However, if a loan or lease is individually evaluated for risk of credit loss and repayment is expected to be solely provided by the values of the underlying collateral, the Company measures fair value on a nonrecurring basis. Fair value is determined by the fair value of the underlying collateral less estimated costs to sell. The fair value of the collateral is determined based on the internal estimates and/or assessment provided by third-party appraisers and the valuation relies on discount rates ranging from 3% to 37%.

The following tables summarize the assets of the Company that are measured at fair value in the Consolidated Statements of Financial Condition on a nonrecurring basis:


	At September 30, 2024
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Loans and leases, net individually evaluated for credit loss
Commercial finance	$	7,652	$	—	$	—	$	7,652
Total loans and leases, net individually evaluated for credit loss	7,652		—		—		7,652

Total	$	7,652	$	—	$	—	$	7,652


	At September 30, 2023
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Loans and leases, net individually evaluated for credit loss
Commercial finance	$	21,829	$	—	$	—	$	21,829
Total loans and leases, net individually evaluated for credit loss	21,829		—		—		21,829
Foreclosed assets, net	—		—		—		—
Total	$	21,829	$	—	$	—	$	21,829

Quantitative Information About Level 3 Fair Value Measurements

(Dollars in thousands)

Fair Value at September 30, 2024

Fair Value at September 30, 2023

Valuation
Technique

Unobservable Input

Range of Inputs

Loans and leases, net individually evaluated for credit loss

$

7,652

21,829

Market approach

Appraised values(1)

3% - 37%

(1) The Company generally relies on external appraisers to develop this information. Management reduced the appraised value by estimated selling costs and other inputs in a range of 3% to 37%.

Management discloses the estimated fair value of financial instruments, including assets and liabilities on and off the Consolidated Statements of Financial Condition, for which it is practicable to estimate fair value. These fair values estimates were made at September 30, 2024 and 2023 based on relevant market information and information about financial instruments. Fair value estimates are intended to represent the price at which an asset could be sold or a liability could be settled. However, since there is no active market for certain financial instruments of the Company, the estimates of fair value are subjective in nature, involve uncertainties, and include matters of significant judgment. Changes in assumptions as well as tax considerations could significantly affect the estimated values. Accordingly, the aggregate fair value estimates are not intended to represent the underlying value of the Company, on either a going concern or a liquidation basis.

The following tables present the carrying amount and estimated fair value of the financial instruments held by the Company:


	At September 30, 2024
(Dollars in thousands)	Carrying Amount		Estimated Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	158,337	$	158,337	$	158,337	$	—	$	—
Debt securities available for sale	1,741,221		1,741,221		—		1,741,221		—
Debt securities held to maturity	33,092		30,236		—		30,236		—
Common equities and mutual funds(1)	3,303		3,303		3,303		—		—
Non-marketable equity securities(1)(2)	21,350		21,350		—		9,522		—
Loans held for sale	688,870		688,870		—		688,870		—
Loans and leases	4,071,071		4,036,490		—		—		4,036,490
Federal Reserve Bank and Federal Home Loan Bank stocks	36,014		36,014		—		36,014		—
Accrued interest receivable	31,385		31,385		31,385		—		—
Financial liabilities

Deposits	5,875,085		5,874,994		5,845,879		29,115		—
Overnight federal funds purchased	377,000		377,000		377,000		—		—

Other short- and long-term borrowings	33,354		31,787		—		31,787		—
Accrued interest payable	571		571		571		—		—

(1) Equity securities at fair value are included within other assets on the consolidated statement of financial condition at September 30, 2024.

(2) Includes certain non-marketable equity securities that are measured at fair value using NAV per share (or its equivalent) as a practical expedient and are excluded from the fair value hierarchy.


	At September 30, 2023
(Dollars in thousands)	Carrying Amount		Estimated Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	375,580	$	375,580	$	375,580	$	—	$	—
Debt securities available for sale	1,804,228		1,804,228		—		1,804,228		—
Debt securities held to maturity	36,591		31,425		—		31,425		—
Common equities and mutual funds(1)	3,378		3,378		3,378		—		—
Non-marketable equity securities(1)(2)	20,453		20,453		—		12,064		—
Loans held for sale	77,779		77,779		—		77,779		—
Loans and leases	4,359,681		4,223,010		—		—		4,223,010
Federal Reserve Bank and Federal Home Loan Bank stocks	28,210		28,210		—		28,210		—
Accrued interest receivable	23,282		23,282		23,282		—		—
Financial liabilities

Deposits	6,589,182		6,589,065		6,583,648		5,417		—
Overnight federal funds purchased	13,000		13,000		13,000		—		—

Other short- and long-term borrowings	33,873		31,187		—		31,187		—
Accrued interest payable	247		247		247		—		—

(1) Equity securities at fair value are included within other assets on the consolidated statement of financial condition at September 30, 2023.

(2) Includes certain non-marketable equity securities that are measured at fair value using NAV per share (or its equivalent) as a practical expedient and are excluded from the fair value hierarchy.

The following sets forth the methods and assumptions used in determining the fair value estimates for the Company’s financial instruments at September 30, 2024 and 2023.

CASH AND CASH EQUIVALENTS

The carrying amount of cash and short-term investments is assumed to approximate the fair value.

DEBT SECURITIES AVAILABLE FOR SALE AND EQUITY SECURITIES

Fair values for debt securities available for sale are based on quoted prices of similar securities on nationally recognized securities exchanges, or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities. Fair values for marketable equity securities are based on unadjusted quoted prices from active markets in which the security is traded. Non-marketable equity securities are measured at fair value using NAV per share (or its equivalent) as a practical expedient.

LOANS HELD FOR SALE

Loans held for sale are carried at the lower of amortized cost or fair value, where fair value reflects the amount a willing market participant would pay for the loan. The Company classifies SBA/USDA loans held for sale as Level 2 in the fair value hierarchy as there is an active secondary market in which these loans are exchanged. Consumer loans held for sale are classified as Level 3 in the fair value hierarchy as the price at which these loans are sold are dictated by terms of the Program Agreements with consumer lending partners.

LOANS AND LEASES

The fair values of loans and leases were estimated using an exit price methodology. The exit price estimation of fair value is based on the present value of expected cash flows, which are based on the contractual terms of the loans, adjusted for prepayments and a discount rate based on the relative risk of the cash flows. Other considerations include the loan type, remaining life of the loan and credit risk.

FEDERAL RESERVE BANK AND FEDERAL HOME LOAN BANK STOCKS

The fair value of FRB and FHLB stock is assumed to approximate book value since the Company is only able to redeem this stock at par value.

ACCRUED INTEREST RECEIVABLE

The carrying amount of accrued interest receivable is assumed to approximate the fair value.

DEPOSITS

With the exception of time certificate deposits and wholesale deposits, the carrying values of deposits are assumed to approximate fair value since deposits are immediately withdrawable without penalty. The fair value of time certificate deposits and wholesale certificate of deposits are estimated using a discounted cash flows calculation that applies the FHLB Des Moines curve to aggregated expected maturities of time deposits.

FEDERAL HOME LOAN BANK ADVANCES

The fair value of such advances was estimated by discounting the expected future cash flows using current interest rates for advances with similar terms and remaining maturities.

SUBORDINATED DEBENTURES AND OTHER BORROWINGS

The fair value of these instruments was estimated by discounting the expected future cash flows using derived interest rates approximating market over the contractual maturity of such borrowings.

ACCRUED INTEREST PAYABLE

The carrying amount of accrued interest payable is assumed to approximate the fair value.

LIMITATIONS

Fair value estimates are made at a specific point in time and are based on relevant market information about the financial instrument. Additionally, fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business, customer relationships and the value of assets and liabilities that are not considered financial instruments. These estimates do not reflect any premium or discount that could result from offering the Company’s entire holdings of a particular financial instrument for sale at one time. Furthermore, since no market exists for certain of the Company’s financial instruments, fair value estimates may be based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with a high level of precision. Changes in assumptions as well as tax considerations could significantly affect the estimates. Accordingly, based on the limitations described above, the aggregate fair value estimates are not intended to represent the underlying value of the Company, on either a going concern or a liquidation basis.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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+ Details

SUBSEQUENT EVENTS	12 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS Management has evaluated subsequent events that occurred after September 30, 2024. During this period, up to the filing date of this Annual Report on Form 10-K, management identified the following subsequent events: •On October 31, 2024, Pathward, N.A. completed the sale (the "Transaction") of substantially all of the assets and liabilities related to the Bank's commercial insurance premium finance business (the "Business") pursuant to an Asset Purchase and Sale Agreement (the "Purchase Agreement") dated August 28, 2024 with Honor Capital Corporation, a Florida corporation (the "Purchaser"), the successor by assignment to AFS IBEX Financial Services, LLC, and Honor Capital Holdings, LLC as guarantor. The cash purchase price paid by the Purchaser at the closing was $603.3 million, based on the net asset value of the assets purchased and liabilities assumed pursuant to the Purchase Agreement plus a $31.2 million premium, subject to customary post-closing adjustment based on the final determination of the net asset value of the assets purchased and liabilities assumed pursuant to the terms of the Purchase Agreement. The Bank recorded a gain on the Transaction of $16.4 million. As part of the Transaction, $588.4 million of commercial insurance premium finance loans were sold. •On November 1, 2024, the Bank sold $161.6 million of debt securities AFS with a loss on sale of securities of $15.8 million. This loss largely offsets the gain from the Transaction discussed above.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net income attributable to Pathward Financial, Inc.	$ 33,597	$ 41,835	$ 65,268	$ 27,657	$ 35,906	$ 45,096	$ 54,771	$ 27,842	$ 23,420	$ 22,391	$ 49,251	$ 61,324	$ 168,357	$ 163,615	$ 156,386

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Insider Trading Policies and Procedures	12 Months Ended
Insider Trading Policies and Procedures	Sep. 30, 2024
Insider Trading Policies and Procedures [Line Items]
Insider Trading Policies and Procedures Adopted	true

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

PRINCIPLES OF CONSOLIDATION

The Consolidated Financial Statements include the accounts of Pathward Financial, Inc. ("Pathward Financial" or the “Company” or "us"), a registered bank holding company located in Sioux Falls, South Dakota, and its wholly-owned subsidiaries. The Company's subsidiaries include Pathward®, National Association ("Pathward®, N.A." or "Pathward" or the “Bank”), a national bank whose primary federal regulator is the Office of the Comptroller of the Currency (the "OCC"), and Pathward Venture Capital, LLC, a wholly-owned service corporation subsidiary of Pathward, N.A. which invests in companies in the financial services industry. All significant intercompany balances and transactions have been eliminated. The Company also owns 100% of First Midwest Financial Capital Trust I (the “Trust”), which was formed in July 2001 for the purpose of issuing trust preferred securities, and Crestmark Capital Trust I, which was acquired from the Crestmark Acquisition in August 2018. The Trust and Crestmark Capital Trust I are not included in the Consolidated Financial Statements of the Company.

In addition, the Company is a variable interest holder in certain entities in which the equity holders do not have the characteristics of a controlling financial interest or where the entity does not have enough equity at risk to finance its activities without additional subordinated financial support (referred to as variable interest entities or "VIEs"). The Company's variable interest arises from contractual ownership or other monetary interests that change with fluctuations in the VIE's net asset value. The primary beneficiary is the entity which has both: (1) the power to direct the activities of the VIE that most significantly impacts the VIE's economic performance, and (2) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE. To determine whether or not a variable interest the Company holds could potentially be significant to the VIE, the Company considers both qualitative and quantitative factors regarding the nature, size and form of the Company's involvement with the VIE. Further, the Company assesses whether or not the Company is the primary beneficiary of a VIE on an ongoing basis. If the determination is made that the Company is the primary beneficiary, then that entity is included in the Consolidated Financial Statements.

Noncontrolling interests represent the portion of net income and equity attributable to third-party owners of consolidated subsidiaries that are not wholly-owned by Pathward Financial. All of the Company's noncontrolling interests relate to the Company's Commercial Finance business line.

NATURE OF BUSINESS AND INDUSTRY SEGMENT INFORMATION

One of the Company's primary sources of revenue relates to payment processing services for prepaid cards, ATM sponsorship, tax refund transfer and money movement. Additionally, a significant source of revenue for the Company is interest from the purchase or origination of commercial finance loans, consumer finance loans, and warehouse finance loans. The Company accepts deposits from customers in the normal course of business on a national basis through its partner solutions and tax services divisions, and through wholesale funding. The Company operates in the banking industry, which accounts for the majority of its revenues and assets. The Company uses the “management approach” for reporting information about segments in annual and interim financial statements. The management approach is based on the way the chief operating decision-maker organizes segments within a company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure and any other manner in which management disaggregates a company. Based on the management approach model, the Company has determined that its business is comprised of three reporting segments.

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain significant estimates include the valuation of residual values within lease receivables, allowance for credit losses, the valuation of goodwill and intangible assets and the fair values of securities and other financial instruments. These estimates are reviewed by management regularly; however, they are particularly susceptible to significant changes in the future.

CASH AND CASH EQUIVALENTS

For purposes of reporting cash flows, cash and cash equivalents is defined to include the Company’s cash on hand and due from financial institutions and short-term interest-bearing deposits in other financial institutions. The Company reports cash flows net for customer loan transactions, securities purchased under agreement to resell, federal funds purchased, deposit transactions, securities sold under agreements to repurchase, and FHLB advances with terms less than 90 days. Previously, the FRB required all depository institutions to maintain reserves at specified levels against their transaction accounts, primarily checking accounts. However, since March 26, 2020, the reserve requirement ratio has been zero percent. At September 30, 2024, the Bank was not required to maintain any reserve balances. The Company at times maintains balances in excess of insured limits at various financial institutions including the FRB, the FHLB and other private institutions. At September 30, 2024, the Company had $104.9 million in interest-bearing deposits held at the FRB and $1.7 million interest-bearing deposits held at the FHLB. The Company does not believe these instruments carry a significant risk of loss but cannot provide assurances that no losses could occur if these institutions were to become insolvent.

SECURITIES

GAAP requires that, at acquisition, an enterprise classify debt securities into one of three categories: Available for Sale (“AFS”), Held to Maturity (“HTM”) or trading. Debt securities AFS are carried at fair value on the Consolidated Statements of Financial Condition. Unrealized holding gains and losses due to risk of credit loss are recognized in earnings while unrealized holding gains and losses due to market conditions and other non-credit risk factors are excluded from earnings and recognized as a separate component of equity in accumulated other comprehensive income (loss) (“AOCI”). See Note 19. Fair Values of Financial Instruments for additional information on fair value of AFS debt securities. Debt securities HTM are measured at amortized cost. The Company classifies the majority of its debt securities as AFS, which are those the Company may decide to sell if needed for liquidity, asset/liability management, or other reasons. Both AFS and HTM are subject to an allowance for credit losses. Pathward Financial did not hold trading securities at September 30, 2024 or 2023.

Gains and losses on the sale of securities are determined using the specific identification method based on amortized cost and are reflected in results of operations at the time of sale. Interest and dividend income, adjusted by amortization of purchase premium or discount using the level yield method, is included in income as earned. For callable debt securities, any purchase premium is amortized to the first call date while any discount is accreted over the contractual life of the security.

Debt Securities Credit Losses

The Company evaluates debt securities AFS for credit losses on a quarterly basis and records any such losses as a component of provision for credit loss in the Consolidated Statements of Operations. The Company has concluded that any unrealized holding losses in its portfolio as of September 30, 2024 are not related to credit loss and as a result has not recorded an allowance for credit losses. See Note 2. Securities for further information.

The Company evaluates debt securities HTM for credit losses on a quarterly basis and records any such losses as a component of provision for credit loss in the Consolidated Statements of Operations. The Company has concluded that its portfolio as of September 30, 2024 has a zero risk of credit loss due to the related U.S. Government financial guarantees underlying the securities within the HTM portfolio and as a result has not recorded an allowance for credit losses.

Equity Investments

The Company holds marketable equity securities, which have readily determinable fair value, and include common equity and mutual funds. These securities are recorded at fair value with unrealized gains and losses, due to changes in fair value, reflected in earnings. Interest and dividend income from these securities is recognized in interest income. See Note 2. Securities for additional information on marketable equity securities.

The Company also holds non-marketable equity securities that are included in Other Assets in the Company’s Consolidated Financial Statements. The Company generally accounts for these investments under the equity method or the provisions of Accounting Standards Codification ("ASC") 321. Equity Securities. Investments where the Company has significant influence, but not control, over the investee are accounted for under the equity method. Investments where the Company cannot exercise significant influence over the investee are measured at fair value, with changes in fair value recognized in earnings, unless those investments have no readily determinable fair value. Investments without readily determinable fair value are measured under the measurement alternative, which reflects cost less impairment, with adjustments in value resulting from observable price changes arising from orderly transactions of the same or a similar security from the same issuer ("measurement alternative investments").

The Company reviews for impairment for equity method and measurement alternative investments and includes an analysis of the facts and circumstances for each investment, expectations of cash flows, capital needs, and viability of its business model. For equity method, the asset carrying value is reduced when the decline in fair value is considered to be other than temporary. For measurement alternative investments, the asset carrying value is reduced when the fair value is less than the carrying value, without the consideration of recovery.

The Company held the following non-marketable equity securities:

•Equity Method - The Company held equity method investments of $4.1 million within other assets as of September 30, 2024 and $4.1 million at September 30, 2023. The Company’s ownership of such investments typically ranges from 5% - 25% of the investee. The Company recognized nominal net earnings from these investments within noninterest income for the fiscal year ended September 30, 2024. The Company elected to classify distributions received from equity method investments using the cumulative earnings approach on the Consolidated Statements of Cash Flows.

•Fair Value Method - The Company held equity investments measured at net asset value ("NAV") per share (or its equivalent) of $11.8 million at September 30, 2024 and $8.4 million at September 30, 2023 where NAV is considered the fair value practical expedient. These investments are recorded within other assets on the Company’s Consolidated Financial Statements. Fluctuations in fair value are recognized in earnings within noninterest Income.

•Measurement Alternative - The Company held equity investments measured using the measurement alternative of $9.5 million as of September 30, 2024 and $12.1 million at September 30, 2023 within other assets on the Company’s Consolidated Financial Statements. Equity investments measured using the measurement alternative are subject to fair value adjustments when observable price changes in orderly transactions for the identical or similar investment of the same issuer occur. The Company did not recognize any fair value adjustments in the fiscal years ended September 30, 2024 and 2023. Additionally, the Company recognized impairment loss of $1.0 million and $3.3 million of such investments during the fiscal years ended September 30, 2024 and 2023, respectively.

LOANS HELD FOR SALE ("LHFS")

Loans are designated as LHFS based on management's intent to sell loans, or portions of loans, in established secondary markets or to participating third-party financial institutions. LHFS are held at the lower of cost or fair value. Any amount by which the cost exceeds fair value is initially recorded as a valuation allowance and subsequently reflected in the gain or loss on sale when sold. At September 30, 2024 and 2023, there was no valuation allowance recorded for LHFS. Gains and losses on LHFS are recorded in noninterest income on the Consolidated Statements of Operations. Loan costs and fees are deferred at origination and are recognized in income at the time of sale. Interest income is calculated based on the note rate of the loan and is recorded as interest income. The Company occasionally transfers loans between held for sale and held for investment classifications based on its intent and ability to hold or sell loans. Management's intent to sell may be impacted by secondary market conditions, loan credit quality, or other factors.

The following table summarizes the activity pertaining to loans held for sale:


	Fiscal Year Ended September 30,
	2024				2023
(Dollars in thousands)	Consumer		Commercial		Consumer		Commercial
Beginning of year balance	$	77,779	$	—	$	21,071	$	—
Originations	1,901,593		133,388		1,206,201		2,483
Proceeds from sales	(1,937,079)		(99,005)		(1,123,271)		(16,610)
Gain (loss) on sales	—		5,102		—		268
Principal collections, net of deferred fees and costs	(18,083)		(48)		(26,222)		280
Non-cash transfers, net	—		563,495		—		13,579
End of year balance	$	24,210	$	602,932	$	77,779	$	—

LOANS AND LEASES

Loans Receivable

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are classified as held for investment and are generally reported at their outstanding principal balances net of any unearned income, cumulative charge-offs, unamortized deferred fees and costs on originated loans, and unamortized premiums or discounts on purchased loans (amortized cost).

Interest income on loans is accrued over the term of the loans based upon the amount of principal outstanding except when serious doubt exists as to the collectability of a loan, in which case the accrual of interest is discontinued. Unearned income, deferred loan fees and costs, and discounts and premiums are amortized to interest income over the contractual life of the loan using the interest method. The Company's business lines follow a nonaccrual policy with certain commercial finance, consumer finance and tax service loans not generally being placed on non-accrual status, but instead are charged off when the collection of principal and interest become doubtful. When placed on nonaccrual status, the accrued unpaid interest receivable is reversed against interest income and any remaining amortizing of net deferred fees is suspended. Cash collected on these loans is applied to first reduce the carrying value of the loan with any remainder being recognized as interest income. Generally, a loan can return to accrual status when all delinquent interest and principal become current under the terms of the loan agreement and collectability of the remaining principal and interest is no longer doubtful. Loans are considered past due when contractually required principal or interest payments have not been made on the due dates.

For commercial loans, the Company generally fully charges off or charges down to net realizable value (fair value of collateral, less estimated costs to sell) for loans secured by collateral when: management judges the loans to be uncollectible; repayment is deemed to be protracted beyond reasonable time frames; the loan has been classified as a loss by either the Company's internal loan review process or its banking regulatory agencies; the customer has filed bankruptcy and the loss becomes evident owing to lack of assets; or the loan meets a defined number of days past due unless the loan is both well-secured and in the process of collection. For consumer loans, the Company fully charges off or charges down to net realizable value when deemed uncollectible due to bankruptcy or other factors, or meets a defined number of days past due.

Leases Receivable

The Company provides various types of commercial lease financing that are classified for accounting purposes as direct financing, sales-type or operating leases. Leases that transfer substantially all of the benefits and risks of ownership to the lessee are classified as direct financing or sales-type leases and are included in loans and leases receivable on the Consolidated Statements of Financial Condition. Direct financing and sales-type leases are carried at the combined present value of future minimum lease payments and lease residual values. The determination of lease classification requires various judgments and estimates by management, including the fair value of equipment at lease inception, useful life of the equipment under lease, lease residual value, and collectability of minimum lease payments.

Sales-type leases generate a gain or loss at lease inception by recording lease revenue less lease cost. Lease revenue consists of the present value of the future minimum lease payments. Lease cost consists of the lease equipment’s book value, less the present value of its residual. Interest income on direct financing and sales-type leases is recognized using methods that approximate a level yield over the fixed, non-cancelable term of the lease. Recognition of interest income is generally discontinued at the time the lease becomes 90 days delinquent, unless the lease is well-secured and in process of collection. Delinquency and past due status is based on the contractual terms of the lease. The Company receives pro rata rent payments for the interim period until the lease contract commences and the fixed, non-cancelable lease term begins. Interim payments are recognized in the month they are earned and are recorded in interest income. Management has policies and procedures in place for the determination of lease classification and review of the related judgments and estimates for all lease financings.

The Company generally fully charges off or charges down to net realizable value (fair value of collateral, less estimated costs to sell) for leases when management judges the lease to be uncollectible; repayment is deemed to be protracted beyond reasonable time frames; the lease has been classified as a loss by either the Company's internal review process or its banking regulatory agencies; the customer has filed bankruptcy and the loss becomes evident owing to lack of assets; or the lease meets a defined number of days past due unless the lease is both well-secured and in the process of collection.

Some lease financings include a residual value component, which represents the estimated fair value of the leased equipment at the expiration of the initial term of the transaction. The estimation of the residual value involves judgments regarding product and technology changes, customer behavior, shifts in supply and demand, and other economic assumptions. The Company may purchase and sell minimum lease payments, primarily as a credit risk reduction tool, to third-party financial institutions at fixed rates on a non-recourse basis with its underlying equipment as collateral. For those transactions that achieve sale treatment, the related lease cash flow stream and the non-recourse financing are derecognized. For those transactions that do not achieve sale treatment, the underlying lease remains on the Company’s Consolidated Statements of Financial Condition and non-recourse debt is recorded in the amount of the proceeds received. The Company retains servicing of these leases and bills, collects, and remits funds to the third-party financial institution. Upon default by the lessee, the third-party financial institutions may take control of the underlying collateral which the Company would otherwise retain as residual value.

Leases that do not transfer substantially all benefits and risks of ownership to the lessee are classified as operating leases. Such leased equipment are included in rental equipment on the Consolidated Statements of Financial Condition and are depreciated on a straight-line basis over the term of the lease to its estimated residual value.

Depreciation expense is recorded as operating lease equipment depreciation expense within noninterest expense. Operating lease rental income is recognized when it becomes due and is reflected as a component of noninterest income. The Company evaluates the carrying value of rental equipment for impairment whenever events or circumstances have occurred that would indicate the carrying amount may not be fully recoverable. If the carrying amount is not fully recoverable, an impairment loss is recognized to reduce the carrying amount to fair value, where fair value is based on the condition of the rental equipment and the projected net cash flows from rental and sale adjusted for current market conditions. A $2.0 million impairment expense from rental equipment was recognized for the fiscal year ended September 30, 2024, a nominal impairment expense was recognized for fiscal year ended September 30, 2023, and no impairment expense was recognized for the fiscal year ended September 30, 2022.

LOAN SERVICING AND TRANSFERS OF FINANCIAL ASSETS

Loan Servicing and Transfers of Financial Assets

The Company sells loan participations, generally without recourse, in both the commercial and consumer segments. The Company also sells commercial SBA and USDA loans to third parties, generally without recourse. Sold loans are not included in the Consolidated Financial Statements. The Bank generally retains the right to service the sold loans for a fee. If the fee is determined commensurate and customary with market terms, no servicing asset or liability is recorded. Any fee that is above or below market terms results in a servicing asset or liability and is included within Other Assets on the Consolidated Statements of Financial Condition.