Pathward Financial Q3 profit falls on losses tied to larger loans

Overview

• U.S. financial holding company reported fiscal Q3 revenue down yr/yr, with net income and EPS lower

• Company saw credit performance impacted by a few larger loans, including one discussed last year

• Pathward repurchased 303,632 shares during the quarter at an average price of $92.18

Outlook

• Company did not provide specific guidance for the current quarter or full year

Result Drivers

• CREDIT EVENTS - Co said changes in credit performance, primarily from a few larger loans, negatively impacted results, per CEO Brett Pharr

• COMMERCIAL FINANCE GROWTH - Higher interest income from commercial finance loans and increased new loan originations supported results

• EXPENSE MANAGEMENT - Noninterest expense fell 7% due to reductions in card processing, legal, and consulting expenses, while strategic investments continued

Company press release: ID:nBw6Tttlha

Key Details

Analyst Coverage

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

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

• Wall Street's median 12-month price target for Pathward Financial Inc is $107.50, about 21.3% above its July 21 closing price of $88.60

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 10 three months ago

Reuters Recommended Reads

• July 21 - Metropolitan Bank Q2 EPS falls on credit loss provision and one-time expenses

• July 21 - Synchrony beats profit estimates on solid spending, higher interest income

• July 21 - Bank OZK's Q2 net income falls 8.7% yr/yr

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