PATHWARD FINANCIAL, INC.

Previous wording

•Total revenue for the fourth quarter was $167.9 million, an increase of $6.9 million, or 4%, compared to the same quarter in fiscal 2023, driven by an increase in net interest income, partially offset by a reduction in noninterest income.

Current wording

•Total revenue for the fourth quarter was $186.7 million, an increase of $7.2 million, or 4%, compared to the same quarter in fiscal 2024, primarily driven by an increase of 13% in noninterest income.

Previous wording

•Net interest margin ("NIM") increased 47 basis pointsto 6.66% for the fourth quarter from 6.19% during the same period of last year, primarily driven by increased yields on earning assets and an improved earning asset mix from the continued optimization of the portfolio.

Current wording

•Net interest margin ("NIM") increased 14 basis pointsto 7.46% for the fourth quarter from 7.32% during the same period of last year, primarily driven by an improved earning asset mix from continued balance sheet optimization.

Previous wording

•During the 2024 fiscal fourth quarter, the Company repurchased 236,308 shares of common stock at an average share price of $63.44. As of September 30, 2024, there were 7,000,000 shares available for repurchase under the current common stock share repurchase program.

Current wording

•During the 2025 fiscal fourth quarter, the Company repurchased 180,740 shares of common stock at an average share price of $82.95. As of September 30, 2025, there were 4,937,816 shares available for repurchase under the current common stock share repurchase program.

Previous wording

At September 30, 2024, the Company’s total assets increased slightly to $7.55 billion compared to $7.54 billion at September 30, 2023, primarily due to an increase of $611.1 million in loans held for sale and $8.1 million in accrued interest receivable, partially offset by decreases of $290.9 million in loans and leases, $217.2 million in cash and cash equivalents, $63.0 million in securities available for sale and $32.3 million in other assets.

Current wording

At September 30, 2025, the Company’s total assets decreased to $7.17 billion compared to $7.53 billion at September 30, 2024, primarily due to reductions of $512.3 million in loans held for sale, $413.4 million in securities AFS, and $37.8 million in cash and cash equivalents, partially offset by growth of $589.7 million in loans and leases.

Previous wording

Total cash and cash equivalents were $158.3 million at September 30, 2024, decreasing from $375.6 million at September 30, 2023. The Company maintains its cash investments primarily in interest-bearing overnight deposits with the FHLB of Des Moines and the FRB. At September 30, 2024, the Company did not have any federal funds sold.

Current wording

Total cash and cash equivalents were $120.6 million at September 30, 2025, decreasing from $158.3 million at September 30, 2024. The decrease was primarily due to the repayment of short-term borrowings partially offset by the proceeds from the sale of the commercial insurance premium finance business, net transaction costs, the sale of the transportation portfolio within the Company's working capital lending solutions, and the sale of debt securities AFS during the fiscal year ended September 30, 2025. The Company maintains its cash investments primarily in interest-bearing overnight deposits with the FHLB of Des Moines and the FRB. At September 30, 2025, the Company did not have any federal funds sold.

Previous wording

The total investment portfolio decreased $66.5 million to $1.77 billion at September 30, 2024, compared to $1.84 billion at September 30, 2023. The Company’s portfolio of securities customarily consists primarily of MBS, which have expected lives much shorter than the stated final maturity, non-bank qualified obligations of states and political subdivisions, which mature in approximately 15 years or less, and other tax exempt municipal mortgage related pass through securities which have average lives much shorter than their stated final maturities. During the fiscal year ended September 30, 2024, the Company made $3.5 million purchases of investment securities.

Current wording

The Company's investment security balances at September 30, 2025 totaled $1.36 billion, as compared to $1.77 billion at September 30, 2024. The decrease was primarily related to the sale of investment securities AFS during the first, second, and fourth quarters of fiscal 2025 and normal paydown activity of investment security balances during the fiscal year. The Company’s portfolio of securities customarily consists primarily of MBS, which have expected lives much shorter than the stated final maturity, non-bank qualified obligations of states and political subdivisions, which mature in approximately 15 years or less, and other tax exempt municipal mortgage related pass through securities which have average lives much shorter than their stated final maturities. During the fiscal year ended September 30, 2025, the Company made $2.3 million purchases of investment securities.

Previous wording

Through the Bank, the Company owns stock in the FHLB due to the Bank’s membership and participation in this banking system as well as stock in the FRB. The FHLB requires a level of stock investment based on a pre-determined formula. The Company’s investment in these stocks was $36.0 million at September 30, 2024, an increase from $28.2 million at September 30, 2023, as purchases of FHLB membership stock were partially offset by redemptions during the fiscal year.

Current wording

Through the Bank, the Company owns stock in the FHLB due to the Bank’s membership and participation in this banking system as well as stock in the FRB. The FHLB requires a level of stock investment based on a pre-determined formula. The Company’s investment in these stocks was $24.7 million at September 30, 2025, a decrease from $36.0 million at September 30, 2024, as redemptions were partially offset by purchases of FHLB membership stock during the fiscal year.

Previous wording

Total end-of-period deposits decreased 11% to $5.88 billion at September 30, 2024, compared to $6.59 billion at September 30, 2023. The decrease in end-of-period deposits was primarily driven by decreases in noninterest-bearing deposits of $715.8 million, money market deposits of $10.6 million, and savings deposits of $10.3 million, partially offset by an increase in wholesale deposits of $20.1 million.

Current wording

Total end-of-period deposits increased slightly to $5.89 billion at September 30, 2025, compared to $5.88 billion at September 30, 2024. The increase in end-of-period deposits was primarily driven by increases in money market deposits of $32.3 million, partially offset by a decrease in wholesale deposits of $25.0 million.

Previous wording

The Company's total borrowings increased $363.5 million to $410.4 million at September 30, 2024 from $46.9 million at September 30, 2023, primarily driven by an increase in short-term borrowings of $364.0 million. See Note 10. Short-term and Long-term Borrowings to the “Notes to Consolidated Financial Statements,” which are included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Current wording

The Company's total borrowings decreased $367.9 million to $42.5 million at September 30, 2025 from $410.4 million at September 30, 2024, primarily driven by a decrease in short-term borrowings of $368.0 million. See Note 11. Short-term and Long-term Borrowings to the “Notes to Consolidated Financial Statements,” which are included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Previous wording

At September 30, 2024, the Company’s stockholders’ equity totaled $839.6 million, an increase of $189.0 million, from $650.6 million at September 30, 2023. The increase was primarily attributable to a decrease in accumulated other comprehensive loss and increases in additional paid-in capital and retained earnings. The Company and Bank remained above the federal regulatory minimum capital requirements at September 30, 2024, and continued to be classified as well-capitalized, and in good standing with the regulatory agencies. See Note 14. Capital Requirements and Restrictions on Retained Earnings to the “Notes to Consolidated Financial Statements,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Current wording

At September 30, 2025, the Company’s stockholders’ equity totaled $857.5 million, an increase of $35.3 million, from $822.2 million at September 30, 2024. The increase was primarily attributable to increases in additional paid-in capital, retained earnings, and a decrease in accumulated other comprehensive loss, partially offset by a decrease in treasury stock. The Company and Bank remained above the federal regulatory minimum capital requirements at September 30, 2025, and continued to be classified as well-capitalized, and in good standing with the regulatory agencies. See Note 15. Capital Requirements and Restrictions on Retained Earnings to the “Notes to Consolidated Financial Statements,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Previous wording

As of September 30, 2024, the Company managed $201.9 million of customer deposits at other banks in its capacity as custodian. These deposits provide the Company with the ability to earn servicing fee income, typically reflective of the EFFR. Servicing fee income totaled $27.2 million during fiscal 2024, compared to $53.4 million for fiscal 2023.

Current wording

As of September 30, 2025, the Company managed $210.5 million of customer deposits at other banks in its capacity as custodian. These deposits provide the Company with the ability to earn servicing fee income, typically reflective of the EFFR.

Previous wording

The Company’s noninterest income is derived primarily from tax product fees, card and deposit fees, credit products, and ATM fees attributable to the Partner Solutions business line and fees charged on bank loans, leases and transaction accounts. Noninterest income is also derived from rental income, net gains on the sale of securities, net gains on the sale of loans and leases, as well as the Company’s holdings of bank-owned life insurance. This income is offset by noninterest expenses, such as compensation and benefits associated with personnel, as well as card processing expenses and tax product expenses attributable to the Partner Solutions business line. Noninterest expense is also impacted by operating lease equipment depreciation expense, occupancy and equipment expense, legal and consulting expenses, and regulatory expense.

Current wording

The Company’s noninterest income is derived primarily from acquiring fee income, tax product fees, card and deposit fees, credit products, and ATM fees attributable to the Partner Solutions business line and fees charged on bank loans, leases and transaction accounts. Noninterest income is also derived from rental income, net gains on the sale of securities, secondary market revenue, as well as the Company’s holdings of bank-owned life insurance. This income is offset by noninterest expenses, such as compensation and benefits associated with personnel, as well as card processing expenses and tax product expenses attributable to the Partner Solutions business line. Noninterest expense is also impacted by operating lease equipment depreciation expense, building and software, legal and consulting expenses, and regulatory expense.

Previous wording

(3) Included in the yield computation are net loan fees of $22.7 million, $27.7 million, and $33.7 million, for the fiscal years ended September 30, 2024, 2023, and 2022, respectively.

Current wording

(3) Included in the yield computation are net loan fees of $27.6 million, $22.7 million, and $27.7 million, for the fiscal years ended September 30, 2025, 2024, and 2023, respectively.

Previous wording

The Company reported net income of $168.4 million, or $6.62 per diluted share, for the fiscal year ended September 30, 2024, compared to $163.6 million, or $5.99 per diluted share, for the fiscal year ended September 30, 2023, an increase of $4.7 million. The increase in net income was driven by an increase in net interest income and a decrease in provision for credit losses, partially offset by a decrease in noninterest income and increases in noninterest expense and income tax expense. Total revenue for fiscal 2024 was $754.7 million, compared to $704.5 million for fiscal 2023, an increase of 7%.

Current wording

The Company reported net income of $185.9 million, or $7.87 per diluted share, for the fiscal year ended September 30, 2025, compared to $183.2 million, or $7.20 per diluted share, for the fiscal year ended September 30, 2024, an increase of $2.7 million. The increase in net income was driven by increases in noninterest income and net interest income and a decrease in provision for credit losses, partially offset by an increase in noninterest expense and income tax expense. Total revenue for fiscal 2025 was $839.9 million, compared to $797.4 million for fiscal 2024, an increase of 5%.

Previous wording

Net interest income for fiscal 2024 was $455.1 million, an increase of 17%, from $387.9 million for the same period of the prior year. The increase was mainly attributable to increased yields, higher average interest-earning asset balances and an improved earning asset mix.

Current wording

Net interest income for fiscal 2025 was $511.8 million, an increase of 3%, from $497.8 million for the same period of the prior year. The increase was mainly attributable to an improved earning asset mix.

Previous wording

The Company's average interest-earning assets for fiscal 2024 increased by $677.0 million to $7.10 billion compared with fiscal 2023, primarily due to growth in average outstanding balances of loans and leases and cash balances, partially offset by a decrease in total investment security balances. The Company's average outstanding balance of loans and leases increased $723.6 million compared to the prior fiscal year due to increases across all loan portfolios.

Current wording

The Company's average interest-earning assets for fiscal 2025 decreased by $132.0 million to $6.97 billion compared with fiscal 2024, primarily due to a decrease in total investment security balances, partially offset by increases in average outstanding balances of loans and leases and cash balances. The Company's average outstanding balance of loans and leases increased $176.5 million compared to the prior fiscal year primarily due to an increase in the warehouse finance portfolio.

Previous wording

The Company’s average deposits and interest-bearing liabilities increased $539.9 million to $6.68 billion during fiscal 2024 from $6.14 billion during fiscal 2023. This increase was primarily due to increases in average noninterest-bearing deposits of $374.2 million, interest-bearing deposits of $142.5 million, and total borrowings of $23.3 million.

Current wording

The Company’s average deposits and interest-bearing liabilities decreased $211.2 million to $6.47 billion during fiscal 2025 from $6.68 billion during fiscal 2024. This decrease was primarily due to decreases in average interest-bearing deposits of $107.8 million, noninterest-bearing deposits of $79.0 million, and total borrowings of $24.4 million.

Previous wording

Fiscal 2024 NIM increased to 6.41% from 6.04% in fiscal 2023. The overall reported TEY on average earning asset yields increased 37 basis points to 6.42% compared to the prior fiscal year primarily driven by an improved earning asset mix. The yield on the loan and lease portfolio was 8.50% compared to 8.22% for the prior fiscal year and the TEY on the securities portfolio was 3.15% compared to 2.94% for the prior fiscal year.

Current wording

Fiscal 2025 NIM increased to 7.34% from 7.01% in fiscal 2024. The overall reported TEY on average earning asset yields increased 33 basis points to 7.35% compared to the prior fiscal year primarily driven by an improved earning asset mix. The yield on the loan and lease portfolio was 9.42% compared to 9.41% for the prior fiscal year and the TEY on the securities portfolio was 3.09% compared to 3.15% for the prior fiscal year.

Previous wording

The Company’s cost of funds for all deposits and borrowings averaged 0.32% during fiscal 2024, as compared to 0.18% during fiscal 2023. The Company's overall cost of deposits was 0.20% in fiscal 2024, as compared to 0.07% during fiscal 2023.

Current wording

The Company’s cost of funds for all deposits and borrowings averaged 0.18% during fiscal 2025, as compared to 0.32% during fiscal 2024. The Company's overall cost of deposits was 0.09% in fiscal 2025, as compared to 0.20% during fiscal 2024.

Previous wording

The Company recognized a provision for credit loss of $42.7 million for fiscal 2024, compared to $57.4 million in fiscal 2023. The period-over-period decrease in provision for credit loss was primarily due to decreases in the tax services portfolio of $12.8 million and the commercial finance portfolio of $3.3 million, partially offset by an increase of $0.8 million in provision for credit loss in the consumer finance portfolio. The decrease in provision for credit loss in the commercial finance portfolio was primarily due to the commercial insurance premium finance portfolio moving to held for sale and reversing out the provision for credit loss on that portfolio. The Company recognized net charge-offs of $46.6 million for the fiscal year ended September 30, 2024, compared to net charge-offs of $53.7 million for the fiscal year ended September 30, 2023. Net charge-offs attributable to the tax services, commercial finance, and consumer finance portfolios for fiscal 2024 were $23.0 million, $19.5 million, and $4.1 million, respectively. Net charge-offs attributable to the tax services, commercial finance, and consumer finance portfolios for fiscal 2023 were $35.8 million, $15.6 million, and $2.3 million, respectively. See Note 3. Loans and Leases, Net for further information on the provision for credit loss.

Current wording

The Company recognized a provision for credit loss of $56.8 million for fiscal 2025, compared to $58.1 million in fiscal 2024. The period-over-period decrease in provision for credit loss was primarily due to decreases in provision for credit losses in the consumer finance portfolio of $12.9 million and the tax services portfolio of $0.9 million, partially offset by an increase of $12.7 million in provision for credit loss in the commercial finance portfolio. The decrease in provision for credit loss in the consumer finance portfolio was primarily driven by a $14.3 million release in provision as the Company moved more than half of its held for investment consumer finance portfolio to held for sale during the fiscal 2025 fourth quarter. The Company recognized net charge-offs of $75.0 million for the fiscal year ended September 30, 2025, compared to net charge-offs of $82.8 million for the fiscal year ended September 30, 2024. Net charge-offs attributable to the consumer finance, commercial finance, and tax services portfolios for fiscal 2025 were $28.7 million, $24.2 million, and $22.1 million, respectively. Net charge-offs attributable to the consumer finance, tax services, and commercial finance portfolios for fiscal 2024 were $40.2 million, $23.0 million, and $19.5 million, respectively. See Note 4. Loans and Leases, Net for further information on the provision for credit loss.

Previous wording

Fiscal 2024 noninterest income decreased 5% to $299.6 million, compared to $316.6 million for fiscal 2023. The decrease was primarily driven by a decrease in card and deposit fees and the gain on sale of trademarks recognized in the prior year, partially offset by increases in gain on sale of other and tax services product fees.

Current wording

Fiscal 2025 noninterest income increased 10% to $328.1 million, compared to $299.6 million for fiscal 2024. The increase was primarily driven by increases in secondary market revenue, gain on divestiture, total tax services product fees, and other income, partially offset by a loss on sale of investment securities and decreases in rental income, gain on sale of other, and card and deposit fees.

Previous wording

The decrease in card and deposit fee income was primarily related to lower servicing fee income due to a reduction in custodial deposits. Servicing fee income totaled $27.2 million during fiscal 2024, compared to $53.4 million for fiscal 2023.

Current wording

The decrease in card and deposit fee income was primarily related to lower servicing fee income due to a reduction in custodial deposits. Servicing fee income totaled $21.4 million during fiscal 2025, compared to $27.2 million for fiscal 2024.

Previous wording

Noninterest expense increased 10% to $513.3 million for fiscal 2024 from $465.0 million for fiscal 2023. The increase was primarily attributable to increases in card processing expense, compensation and benefits expense, and other expense, partially offset by decreases in operating lease equipment depreciation and legal and consulting expense.

Current wording

Noninterest expense increased 8% to $560.1 million for fiscal 2025 from $520.7 million for fiscal 2024. The increase was primarily attributable to increases in other expense, legal and consulting expense, building and software, operating lease equipment depreciation, and impairment expense, partially offset by decreases in compensation and benefits and intangible amortization expense.

Previous wording

The card processing expense increase was due to rate-related agreements with Partner Solutions relationships. The amount of expense paid under those agreements is based on an agreed upon rate index that varies depending on the deposit levels, floor rates, market conditions, and other performance conditions. Generally this rate index is based on a percentage of the EFFR and reprices immediately upon a change in the EFFR. Approximately 57% of the deposit portfolio was subject to these higher rate-related processing expenses. For fiscal 2024, contractual, rate-related processing expenses were $110.8 million, as compared to $77.4 million for the fiscal year ended September 30, 2023.

Current wording

Card processing expense is primarily driven by rate-related agreements with Partner Solutions relationships. The amount of expense paid under those agreements is based on an agreed upon rate index that varies depending on the deposit levels, floor rates, market conditions, and other performance conditions. Generally this rate index is based on a percentage of the EFFR and reprices immediately upon a change in the EFFR. Approximately 64% of the deposit portfolio was subject to these higher rate-related processing expenses. For fiscal 2025, contractual, rate-related processing expenses were $104.1 million, as compared to $110.8 million for the fiscal year ended September 30, 2024.

Previous wording

The Company recorded an income tax expense of $29.1 million, representing an effective tax rate of 14.7%, for fiscal 2024, compared to an income tax expense of $16.3 million, representing an effective tax rate of 9.0%, for fiscal 2023. The increase in income tax expense was primarily due a decrease in investment tax credits.

Current wording

The Company recorded an income tax expense of $36.3 million, representing an effective tax rate of 16.3%, for fiscal 2025, compared to an income tax expense of $34.1 million, representing an effective tax rate of 15.6%, for fiscal 2024. The increase in income tax expense was primarily due to the increase in income and the surrender of life insurance policies.

Previous wording

For the fiscal year ended September 30, 2024, the Company originated $68.4 million in renewable energy leases, compared to $93.6 million for the prior fiscal year. Investment tax credits related to renewable energy leases are recognized ratably based on income throughout each fiscal year.

Current wording

For the fiscal year ended September 30, 2025, the Company originated $95.5 million in renewable energy leases, compared to $68.4 million for the prior fiscal year. Investment tax credits related to renewable energy leases are recognized ratably based on income throughout each fiscal year.

Previous wording

A comparison of the 2023 results to the 2022 results and other 2022 information not included herein can be found in the Company's Annual Report on Form 10-K: Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” filed November 21, 2023 and is incorporated by reference herein.

Current wording

A comparison of the 2024 results to the 2023 results and other 2023 information not included herein can be found in the Company's Annual Report on Form 10-K/A: Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” filed August 29, 2025 and is incorporated by reference herein.

Previous wording

Generally, when a loan or lease becomes delinquent 90 days or more or when the collection of principal or interest becomes doubtful, the Company will place the loan or lease on a nonaccrual status and, as a result, previously accrued interest income on the loan or lease is reversed against current income. The loan or lease will generally remain on a non-accrual status until six months of good payment history has been established or management believes the financial status of the borrower has been significantly restored. Certain relationships in the table below are over 90 days past due and still accruing. The Company considers these relationships as being in the process of collection. Insurance premium finance loans, consumer finance and tax services loans are generally not placed on nonaccrual status, but are instead written off when the collection of principal and interest become doubtful.

Current wording

Generally, when a loan or lease becomes delinquent 90 days or more or when the collection of principal or interest becomes doubtful, the Company will place the loan or lease on a nonaccrual status and, as a result, previously accrued interest income on the loan or lease is reversed against current income. The loan or lease will generally remain on a non-accrual status until six months of good payment history has been established or management believes the financial status of the borrower has been significantly restored. Certain relationships in the table below are over 90 days past due and still accruing. The Company considers these relationships as being in the process of collection. Consumer finance and tax services loans are generally not placed on nonaccrual status, but are instead written off when the collection of principal and interest become doubtful.

Previous wording

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.

Current wording

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 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.

Previous wording

The Company's nonperforming assets at September 30, 2024 were $43.0 million, representing 0.57% of total assets, compared to $58.0 million, or 0.77% of total assets at September 30, 2023. The decrease in the nonperforming assets as a percentage of total assets at September 30, 2024 compared to the prior fiscal year, was primarily driven by a decrease in nonperforming loans in the commercial finance portfolio, partially offset by increases in the tax services and consumer finance portfolios.

Current wording

The Company's nonperforming assets at September 30, 2025 were $101.7 million, representing 1.42% of total assets, compared to $43.0 million, or 0.57% of total assets at September 30, 2024. The increase in the nonperforming assets as a percentage of total assets at September 30, 2025 compared to the prior fiscal year, was primarily driven by an increase in nonperforming loans in the commercial finance portfolio, partially offset by decreases in the tax services and consumer finance portfolios.

Previous wording

The Company's nonperforming loans and leases at September 30, 2024, were $41.6 million, representing 0.87% of total gross loans and leases, compared to $56.2 million, or 1.26% of total gross loans and leases at September 30, 2023.

Current wording

The Company's nonperforming loans and leases at September 30, 2025, were $99.1 million, representing 2.05% of total gross loans and leases, compared to $41.6 million, or 0.87% of total gross loans and leases at September 30, 2024.

Previous wording

On the basis of management’s review of its loans, leases, and other assets, at September 30, 2024, the Company had classified loans and leases of $180.9 million as substandard, $10.3 million as doubtful and none as loss. At September 30, 2023, the Company classified loans and leases of $208.2 million as substandard, $8.2 million as doubtful and none as loss.

Current wording

On the basis of management’s review of its loans, leases, and other assets, at September 30, 2025, the Company had classified loans and leases of $244.9 million as substandard, $13.7 million as doubtful and none as loss. At September 30, 2024, the Company classified loans and leases of $180.9 million as substandard, $10.3 million as doubtful and none as loss.

Previous wording

The Company's ACL totaled $45.3 million at September 30, 2024, a decrease compared to $49.7 million at September 30, 2023. The $4.4 million year-over-year decrease in the ACL was primarily driven by a $4.4 million decrease in the allowance related to the commercial finance portfolio and a $0.1 million decrease in the allowance related to the consumer finance portfolio, partially offset by a $0.1 million increase in the allowance related to the warehouse finance portfolio.

Current wording

The Company's ACL totaled $53.3 million at September 30, 2025, a decrease compared to $71.8 million at September 30, 2024. The $18.4 million year-over-year decrease in the ACL was primarily driven by a $22.2 million decrease in the allowance related to the consumer finance portfolio, partially offset by a $3.7 million increase in the allowance related to the commercial finance portfolio and a $0.1 million increase in the allowance related to the warehouse finance portfolio.

Previous wording

The Company's ACL as a percentage of total loans and leases decreased to 1.11% at September 30, 2024 from 1.14% at September 30, 2023. The decrease in the total loans and leases coverage ratio was primarily driven by the tax services and consumer finance portfolios, partially offset by an increase in the commercial finance portfolio.

Current wording

The Company's ACL as a percentage of total loans and leases decreased to 1.14% at September 30, 2025 from 1.76% at September 30, 2024. The decrease in the total loans and leases coverage ratio was primarily driven by the decrease in the ACL relative to the decrease in the consumer finance and the seasonal tax services portfolios. The decrease in the consumer finance portfolio coverage ratio was primarily driven by the aforementioned release in provision.

Previous wording

The excess of consideration paid over the fair value of the net assets acquired is recorded as goodwill. Determining the fair value of assets acquired, including identifiable intangible assets, liabilities assumed, and any noncontrolling interest often requires the use of significant estimates and assumptions. This may involve estimates based on third-party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques such as estimates of attrition, inflation, asset growth rates, discount rates, multiples of earnings or other relevant factors. In addition, the determination of the useful lives over which an intangible asset will be amortized is subjective. See Note 7. Goodwill and Intangibles to the Consolidated Financial Statements for further information.

Current wording

The excess of consideration paid over the fair value of the net assets acquired is recorded as goodwill. Determining the fair value of assets acquired, including identifiable intangible assets, liabilities assumed, and any noncontrolling interest often requires the use of significant estimates and assumptions. This may involve estimates based on third-party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques such as estimates of attrition, inflation, asset growth rates, discount rates, multiples of earnings or other relevant factors. In addition, the determination of the useful lives over which an intangible asset will be amortized is subjective. See Note 8. Goodwill and Intangible Assets to the Consolidated Financial Statements for further information.

Previous wording

The Company’s primary sources of funds are deposits, derived principally through its Partner Solutions business line, borrowings, principal and interest payments on loans and leases and mortgage-backed securities, and maturing investment securities. In addition, the Company utilizes wholesale deposit sources to provide temporary funding when necessary or when favorable terms are available. While scheduled loan repayments and maturing investments are relatively predictable, deposit flows and early loan repayments are influenced by the level of interest rates, general economic conditions and competition. The Company uses its capital resources principally to meet ongoing commitments to fund maturing certificates of deposit and loan commitments, to maintain liquidity, and to meet operating expenses. See Note 20. Subsequent Events to the "Notes of Consolidated Financial Statements," which is included in Part II, Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K, for more information on the closing of the sale of the commercial insurance premium finance business.

Current wording

The Company’s primary sources of funds are deposits, derived principally through its Partner Solutions business line, borrowings, principal and interest payments on loans and leases and mortgage-backed securities, and maturing investment securities. In addition, the Company utilizes wholesale deposit sources to provide temporary funding when necessary or when favorable terms are available. While scheduled loan repayments and maturing investments are relatively predictable, deposit flows and early loan repayments are influenced by the level of interest rates, general economic conditions and competition. The Company uses its capital resources principally to meet ongoing commitments to fund maturing certificates of deposit and loan commitments, to maintain liquidity, and to meet operating expenses.

Previous wording

At September 30, 2024, the Company had unfunded loan and lease commitments of $1.29 billion. Management believes that loan repayment and other sources of funds will be adequate to meet the Company’s foreseeable short- and long-term liquidity needs. The liquidity sources as of September 30, 2024 include $158.3 million in cash and cash equivalents and $201.9 million in off-balance sheet custodial deposits. When factoring in all resources, such as the FHLB, the FRB Discount Window and other unsecured funding and wholesale options, the Company has over $2.1 billion in available liquidity. Due to the characteristics of the Company's deposit portfolio, uninsured deposits remained less than 15% of total deposits during fiscal year 2024 and below the Company's available liquidity.

Current wording

At September 30, 2025, the Company had unfunded loan and lease commitments of $1.20 billion. Management believes that loan repayment and other sources of funds will be adequate to meet the Company’s foreseeable short- and long-term liquidity needs. The liquidity sources as of September 30, 2025 include $120.6 million in cash and cash equivalents and $210.5 million in off-balance sheet custodial deposits. When factoring in all resources, such as the FHLB, the FRB Discount Window and other unsecured funding and wholesale options, the Company has over $2.30 billion in available liquidity. Due to the characteristics of the Company's deposit portfolio, uninsured deposits remained less than 15% of total deposits during fiscal year 2025 and below the Company's available liquidity.