Earnings Release – Q3 FY2026
Pathward Financial Inc. (NASDAQ:CASH) reported third‑quarter fiscal 2026 results that fell short of market expectations. Adjusted earnings per share were $1.37, missing the consensus estimate of $1.95 by $0.58. Revenue totaled $189.64 million, below the $191.17 million forecast and representing a 3 % decline from $195.4 million in the comparable quarter last year.
Net income decreased to $29.0 million, or $1.37 per diluted share, versus $42.1 million, or $1.81 per diluted share, in the third quarter of fiscal 2025. The decline was driven primarily by a provision for credit losses of $28.3 million, up from $9.3 million in the prior‑year period, reflecting specific reserves on two large loans and higher expected losses in the commercial finance portfolio.
Non‑performing assets rose to $277.5 million, representing 3.79 % of total assets, compared with $119.8 million, or 1.68 % of assets, at March 31 2026. Non‑performing loans within the commercial finance portfolio increased to $271.1 million from $117.3 million in the previous quarter, largely linked to renewable‑energy construction projects with a common developer.
Net interest income fell 8 % year‑over‑year to $112.9 million from $122.6 million, mainly due to an $11.6 million reduction in interest income on the consumer finance portfolio after a portfolio sale in October 2025. This was partially offset by a $6.1 million increase in interest income from commercial finance loans. Non‑interest income grew 4 % to $76.7 million from $73.4 million, driven by higher secondary‑market revenue.
The company repurchased 303,632 shares at an average price of $92.18 during the quarter. Following the release, the stock declined 9.5 % in after‑hours trading.
CEO Brett Pharr commented that the credit performance deterioration stemmed from a few larger loans, noting that credit events can occur in lending.