What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-09 · 157 added, 147 removed, 1092 unchanged (22% of the section changed)

Financial Statements.

META FINANCIAL GROUP, INC.

PATHWARD FINANCIAL, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Condition

(Dollars in thousands, except per share data) March 31, 2022 September 30, 2021

(Dollars in thousands, except per share data) June 30, 2022 September 30, 2021

ASSETS (Unaudited) (Audited)

21 unchanged sentences

STOCKHOLDERS’ EQUITY

Preferred stock, 3,000,000 shares authorized, no shares issued and no shares outstanding at March 31, 2022 and September 30, 2021, respectively

Preferred stock, 3,000,000 shares authorized, no shares issued and no shares outstanding at June 30, 2022 and September 30, 2021, respectively

Common stock, $ 0.01 par value;

90,000,000 shares authorized, 29,443,911 and 31,686,483 shares issued, 29,362,844 and 31,669,952 shares outstanding at March 31, 2022 and September 30, 2021, respectively

90,000,000 shares authorized, 29,440,396 and 31,686,483 shares issued, 29,356,707 and 31,669,952 shares outstanding at June 30, 2022 and September 30, 2021, respectively

Common stock, Nonvoting, $ 0.01 par value;

3,000,000 shares authorized, no shares issued, none outstanding at March 31, 2022 and September 30, 2021, respectively

3,000,000 shares authorized, no shares issued, none outstanding at June 30, 2022 and September 30, 2021, respectively

Additional paid-in capital 615,159 604,484

1 unchanged sentence

Accumulated other comprehensive income (loss) ( 131,407 ) 7,599

Treasury stock, at cost, 81,067 and 16,531 common shares at March 31, 2022 and September 30, 2021, respectively

Treasury stock, at cost, 83,689 and 16,531 common shares at June 30, 2022 and September 30, 2021, respectively

( 4,623 ) ( 860 )

4 unchanged sentences

See Notes to Condensed Consolidated Financial Statements.

META FINANCIAL GROUP, INC.

PATHWARD FINANCIAL, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

Three Months Ended March 31, Six Months Ended March 31,

Three Months Ended June 30, Nine Months Ended June 30,

(Dollars in thousands, except per share data) 2022 2021 2022 2021

9 unchanged sentences

Net interest income 72,151 68,475 227,564 208,324

Provision for credit losses 32,302 30,290 32,488 36,379

Provision (reversal of) for credit losses ( 1,302 ) 4,612 31,186 40,991

Net interest income after provision for credit losses 73,453 63,863 196,378 167,333

31 unchanged sentences

See Notes to Condensed Consolidated Financial Statements.

META FINANCIAL GROUP, INC.

PATHWARD FINANCIAL, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended March 31, Six Months Ended March 31,

Three Months Ended June 30, Nine Months Ended June 30,

(Dollars in thousands) 2022 2021 2022 2021

11 unchanged sentences

See Notes to Condensed Consolidated Financial Statements.

META FINANCIAL GROUP, INC.

PATHWARD FINANCIAL, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)

(Dollars in thousands, except per share data) Meta Financial Group, Inc.

Three Months Ended March 31, 2022 Common

(Dollars in thousands, except per share data) Pathward Financial, Inc.

Three Months Ended June 30, 2022 Common

Stock Additional

3 unchanged sentences

Income (Loss) Treasury

Stock Total Meta

Stock Total Pathward

Stockholders’

1 unchanged sentence

Stockholders’

Balance, December 31, 2021 $ 301 $ 610,816 $ 217,991 $ 724 $ ( 4,318 ) $ 825,514 $ 642 $ 826,156

Balance, March 31, 2022 $ 294 $ 612,917 $ 223,760 $ ( 69,374 ) $ ( 4,513 ) $ 763,084 $ 322 $ 763,406

Cash dividends declared on common stock ($ 0.05 per share)

5 unchanged sentences

Net investment by (distribution to) noncontrolling interests — — — — — — ( 1,105 ) ( 1,105 )

Balance, March 31, 2022

Balance, June 30, 2022

$ 294 $ 615,159 $ 244,686 $ ( 131,407 ) $ ( 4,623 ) $ 724,109 $ 665 $ 724,774

Three Months Ended March 31, 2021

Balance, December 31, 2020 $ 326 $ 598,669 $ 198,000 $ 20,119 $ ( 5,440 ) $ 811,674 $ 1,536 $ 813,210

Three Months Ended June 30, 2021

Balance, March 31, 2021 $ 319 $ 601,222 $ 225,471 $ 12,809 $ ( 5,655 ) $ 834,166 $ 1,092 $ 835,258

Cash dividends declared on common stock ($ 0.05 per share)

5 unchanged sentences

Net investment by (distribution to) noncontrolling interests — — — — — — ( 760 ) ( 760 )

Balance, March 31, 2021

Balance, June 30, 2021

$ 319 $ 602,720 $ 262,578 $ 15,222 $ ( 5,696 ) $ 875,143 $ 1,490 $ 876,633

(Dollars in thousands, except per share data) Meta Financial Group, Inc.

Six Months Ended March 31, 2022 Common

(Dollars in thousands, except per share data) Pathward Financial, Inc.

Nine Months Ended June 30, 2022 Common

Stock Additional

3 unchanged sentences

Income (Loss) Treasury

Stock Total Meta

Stock Total Pathward

Stockholders’

5 unchanged sentences

— — ( 4,469 ) — — ( 4,469 ) — ( 4,469 )

Issuance of common stock due to restricted stock 1 — — — — 1 — 1

Issuance of common stock due to ESOP 1 2,885 — — — 2,886 — 2,886

4 unchanged sentences

Net investment by (distribution to) noncontrolling interests — — — — — — ( 2,771 ) ( 2,771 )

Balance, March 31, 2022

Balance, June 30, 2022

$ 294 $ 615,159 $ 244,686 $ ( 131,407 ) $ ( 4,623 ) $ 724,109 $ 665 $ 724,774

Six Months Ended March 31, 2021

Nine Months Ended June 30, 2021

Balance, September 30, 2020

9 unchanged sentences

Net investment by (distribution to) noncontrolling interests — — — — — — ( 2,882 ) ( 2,882 )

Balance, March 31, 2021

Balance, June 30, 2021

$ 319 $ 602,720 $ 262,578 $ 15,222 $ ( 5,696 ) $ 875,143 $ 1,490 $ 876,633

See Notes to Condensed Consolidated Financial Statements.

META FINANCIAL GROUP, INC.

PATHWARD FINANCIAL, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

Six Months Ended March 31,

Nine Months Ended June 30,

(Dollars in thousands) 2022 2021

10 unchanged sentences

Net realized (gain) on securities available for sale, net ( 161 ) ( 6 )

Net realized (gain) on securities held to maturity, net ( 397 ) —

Net realized (gain) loss on loans held for sale 3,933 ( 9,804 )

3 unchanged sentences

Net realized (gain) on trademarks ( 50,000 ) —

Net realized (gain) loss on other assets ( 434 ) 28

Change in bank-owned life insurance value ( 1,818 ) ( 1,827 )

Impairment of intangibles 670 —

Net change in accrued interest receivable ( 564 ) 398

7 unchanged sentences

Proceeds from maturities of and principal collected on securities available for sale 264,808 266,673

Proceeds from sales of securities held to maturity 460 —

Proceeds from maturities of and principal collected on securities held to maturity 12,189 27,041

11 unchanged sentences

Proceeds from sale of trademarks 50,000 —

Proceeds from sale of other assets 2,925 —

Net cash (used in) investing activities ( 410,941 ) ( 971,812 )

1 unchanged sentence

Net change in deposits 195,828 909,672

Redemption of long-term borrowings ( 75,000 ) —

Principal payments on capital lease obligations ( 75 ) ( 24 )

Principal payments on other liabilities ( 2,163 ) ( 4,775 )

Proceeds from other liabilities — 80

Dividends paid on common stock ( 4,469 ) ( 4,804 )

Issuance of common stock due to restricted stock 1 —

Issuance of common stock due to ESOP 2,886 3,036

1 unchanged sentence

Distributions to noncontrolling interest ( 2,771 ) ( 2,882 )

Net cash provided by financing activities 164,941 3,570,967

Net cash (used in) financing activities ( 32,526 ) 813,285

Effect of exchange rate changes on cash ( 311 ) 692

2 unchanged sentences

Cash and cash equivalents at end of fiscal period $ 157,260 $ 720,243

Six Months Ended March 31,

Nine Months Ended June 30,

(Dollars in thousands) 2022 2021

6 unchanged sentences

Supplemental schedule of non-cash investing activities:

Purchases/sales of securities accrued, not settled

Trade Date Purchases - AFS 101,993 —

Held for sale to loans and leases 14,731 —

6 unchanged sentences

BASIS OF PRESENTATION

The interim unaudited Condensed Consolidated Financial Statements contained herein should be read in conjunction with the audited consolidated financial statements and accompanying notes to the consolidated financial statements for the fiscal year ended September 30, 2021 included in Meta Financial Group, Inc.’s (“Meta” or the “Company”) Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on November 23, 2021.

The interim unaudited Condensed Consolidated Financial Statements contained herein should be read in conjunction with the audited consolidated financial statements and accompanying notes to the consolidated financial statements for the fiscal year ended September 30, 2021 included in Pathward Financial, Inc.’s (“Pathward” or the “Company”) Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on November 23, 2021.

Accordingly, footnote disclosures which would substantially duplicate the disclosures contained in the audited consolidated financial statements have been omitted.

2 unchanged sentences

Such information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented.

The results of the three and six months ended March 31, 2022 are not necessarily indicative of the results expected for the fiscal year ending September 30, 2022.

The results of the three and nine months ended June 30, 2022 are not necessarily indicative of the results expected for the fiscal year ending September 30, 2022.

Certain prior year amounts have been reclassified to conform to the current year financial statement presentation.

14 unchanged sentences

The remaining $ 10.0 million was paid by the Assignee and is being held in an escrow account by a third-party agent until the agreed upon activities within the Phase Out Period have been completed, at which time the funds will be released to the Company.

The Company’s receipt of the $ 10.0 million payment is contingent upon phase out activities that have not yet been completed and has not been recognized in the Company’s consolidated financial statements for the fiscal quarter ended March 31, 2022.

On March 29, 2022, the Company announced it is changing its name to Pathward Financial, Inc.™ ("Pathward"), and its bank subsidiary MetaBank®, N.A.

is changing to Pathward™, N.A.

On July 13, 2022, the Company announced it changed its name to Pathward Financial, Inc.™, and its bank subsidiary MetaBank®, N.A.

changed to Pathward™, N.A.

("Pathward").

Certain changes will be made immediately, with a full transition to Pathward expected by the end of this calendar year, including the launch of a new brand identity and website.

The Company will continue to serve its customers under existing brand names during the transition.

The Company recognized $ 2.8 million of noninterest expense related to rebranding efforts during the second quarter of fiscal 2022.

The Company recognized $ 3.4 million and $ 6.2 million of noninterest expense related to rebranding efforts during the three and nine months ended June 30, 2022, respectively.

The amortized cost, gross unrealized gains and losses and estimated fair values of available for sale ("AFS") and held to maturity ("HTM") debt securities are presented below.

1 unchanged sentence

(Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair

At March 31, 2022

At June 30, 2022

Corporate securities $ 25,000 $ — $ ( 1,562 ) $ 23,438

15 unchanged sentences

(Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair

At March 31, 2022

At June 30, 2022

Non-bank qualified obligations of states and political subdivisions $ 41,122 $ — $ ( 1,765 ) $ 39,357

12 unchanged sentences

Debt Securities AFS

At March 31, 2022

At June 30, 2022

Corporate securities $ 23,438 $ ( 1,562 ) $ — $ — $ 23,438 $ ( 1,562 )

11 unchanged sentences

Debt Securities HTM

At March 31, 2022

At June 30, 2022

Non-bank qualified obligations of states and political subdivisions $ 35,121 $ ( 1,530 ) $ 4,236 $ ( 235 ) $ 39,357 $ ( 1,765 )

4 unchanged sentences

Total debt securities HTM $ 26,096 $ ( 471 ) $ — $ — $ 26,096 $ ( 471 )

At March 31, 2022, there were 80 securities AFS in an unrealized loss position.

At June 30, 2022, there were 166 securities AFS in an unrealized loss position.

Management assessed each investment security with unrealized losses for credit loss and determined substantially all unrealized losses on these securities were due to credit spreads and 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 March 31, 2022, there was no ACL for debt securities AFS.

At June 30, 2022, there was no ACL for debt securities AFS.

The amortized cost and fair value of debt securities by contractual maturity are shown below.

4 unchanged sentences

However, certain prepayment penalties may apply.

(Dollars in thousands) At March 31, 2022 At September 30, 2021

(Dollars in thousands) At June 30, 2022 At September 30, 2021

Securities AFS at Fair Value Amortized Cost Fair

7 unchanged sentences

Total securities AFS, at fair value $ 2,131,916 $ 1,956,523 $ 1,855,084 $ 1,864,899

At March 31, 2022 At September 30, 2021

At June 30, 2022 At September 30, 2021

(Dollars in thousands) Amortized Cost Fair

6 unchanged sentences

Equity Securities

The Company held $ 3.9 million at March 31, 2022 and $ 12.7 million at September 30, 2021 in marketable equity securities.

The Company recognized $ 3.8 million and none in unrealized loss on marketable equity securities during the six months ended March 31, 2022 and 2021, respectively, which is attributable to an investee becoming publicly traded during fiscal year 2021.

All other marketable equity securities and related activity were insignificant for the six months ended March 31, 2022 and 2021.

There was one marketable security sold during the six months ended March 31, 2022 for a $ 0.3 million gain.

Non-marketable equity securities with a readily determinable fair value totaled $ 6.2 million at March 31, 2022 and $ 4.6 million at September 30, 2021.

The Company recognized $ 0.3 million in unrealized gains and $ 0.2 million in unrealized gains during the six months ended March 31, 2022 and 2021, respectively.

No such securities were sold during the six months ended March 31, 2022.

Non-marketable equity securities without readily determinable fair value totaled $ 20.9 million at March 31, 2022 and $ 16.0 million at September 30, 2021.

There was one security sold during the six months ended March 31, 2022 for a $ 0.1 million gain .

The Company held $ 3.1 million at June 30, 2022 and $ 12.7 million at September 30, 2021 in marketable equity securities.

The Company recognized $ 3.8 million and none in unrealized loss on marketable equity securities during the nine months ended June 30, 2022 and 2021, respectively, which is attributable to an investee becoming publicly traded during fiscal year 2021.

All other marketable equity securities and related activity were insignificant for the nine months ended June 30, 2022 and 2021.

There was one marketable security sold during the nine months ended June 30, 2022 for a $ 0.3 million gain.

Non-marketable equity securities with a readily determinable fair value totaled $ 6.5 million at June 30, 2022 and $ 4.6 million at September 30, 2021.

The Company recognized $ 0.6 million in unrealized gains and $ 0.4 million in unrealized gains during the nine months ended June 30, 2022 and 2021, respectively.

No such securities were sold during the nine months ended June 30, 2022.

Non-marketable equity securities without readily determinable fair value totaled $ 20.7 million at June 30, 2022 and $ 16.0 million at September 30, 2021.

There were three securities sold during the nine months ended June 30, 2022 for a $ 0.2 million gain .

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 March 31, 2022 and September 30, 2021.

FRB of Minneapolis stock held by the Bank totaled $ 19.7 million at June 30, 2022 and September 30, 2021.

These equity securities are 'restricted' in that they can only be owned by member banks.

4 unchanged sentences

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 $ 9.1 million at March 31, 2022 and $ 8.7 million at September 30, 2021.

The carrying value of the stock held at the FHLB was $ 9.1 million at June 30, 2022 and $ 8.7 million at September 30, 2021.

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.

3 unchanged sentences

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 no impairment for such investments for the six months ended March 31, 2022.

The Company recognized no impairment for such investments for the nine months ended June 30, 2022.

LOANS AND LEASES, NET

Loans and leases consist of the following:

(Dollars in thousands) March 31, 2022 September 30, 2021

(Dollars in thousands) June 30, 2022 September 30, 2021

Term lending $ 1,047,764 $ 961,019

17 unchanged sentences

Total loans and leases, net $ 3,613,360 $ 3,541,282

During the six months ended March 31, 2022, the Company transferred $ 169.0 million of Community Banking loans to held for sale.

During the six months ended March 31, 2021, the Company transferred $ 99.9 million of Community Banking loans to held for sale.

During the six months ended March 31, 2022 and 2021, the Company originated $ 555.4 million and $ 361.7 million of consumer finance and SBA/USDA as held for sale, respectively.

The Company sold held for sale loans resulting in proceeds of $ 723.9 million and loss on sale of $ 4.1 million during the six months ended March 31, 2022.

The Company sold held for sale loans resulting in proceeds of $ 476.0 million and gains on sale of $ 4.6 million during the six months ended March 31, 2021.

During the nine months ended June 30, 2022, the Company transferred $ 169.0 million of Community Banking loans to held for sale.

During the nine months ended June 30, 2021, the Company transferred $ 118.0 million of Community Banking loans to held for sale.

During the nine months ended June 30, 2022 and 2021, the Company originated $ 769.7 million and $ 472.9 million of consumer finance and SBA/USDA as held for sale, respectively.

The Company sold held for sale loans resulting in proceeds of $ 898.4 million and loss on sale of $ 3.9 million during the nine months ended June 30, 2022.

The Company sold held for sale loans resulting in proceeds of $ 694.1 million and gains on sale of $ 9.8 million during the nine months ended June 30, 2021.

In connection with the Company's sale of the Bank's Community Bank division to Central Bank, the Company entered into a servicing agreement with Central Bank for the retained Community Bank loan portfolio that became effective on February 29, 2020 (the "Closing Date").

The Company recognized $ 0.2 million and $ 1.6 million in servicing fee expense during the six months ended March 31, 2022 and 2021, respectively, and $ 3.3 million for the fiscal year ended September 30, 2021.

The Company recognized $ 0.2 million and $ 2.2 million in servicing fee expense during the nine months ended June 30, 2022 and 2021, respectively, and $ 3.3 million for the fiscal year ended September 30, 2021.

Since the Closing Date, the Company has entered into subsequent loan portfolio sale agreements with Central Bank and other third parties.

The Company sold additional loans from the retained Community Bank portfolio in the amount of $ 192.5 million and $ 233.0 million in the six months ended March 31, 2022 and 2021, respectively, and $ 308.1 million for the fiscal year ended September 30, 2021.

The Company sold additional loans from the retained Community Bank portfolio in the amount of $ 192.5 million and $ 233.0 million in the nine months ended June 30, 2022 and 2021, respectively, and $ 308.1 million for the fiscal year ended September 30, 2021.

All loans from the retained Community Bank portfolio have been sold as of December 31, 2021.

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

Three Months Ended March 31, Six Months Ended March 31,

Three Months Ended June 30, Nine Months Ended June 30,

(Dollars in thousands) 2022 2021 2022 2021

15 unchanged sentences

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

(Dollars in thousands) March 31, 2022 September 30, 2021

(Dollars in thousands) June 30, 2022 September 30, 2021

Carrying amount $ 226,347 $ 278,341

3 unchanged sentences

Total net investment in direct financing and sales-type leases $ 219,137 $ 266,540

Undiscounted future minimum lease payments receivable for direct financing and sales-type leases, and a reconciliation to the carrying amount recorded at March 31, 2022 were as follows:

Undiscounted future minimum lease payments receivable for direct financing and sales-type leases, and a reconciliation to the carrying amount recorded at June 30, 2022 were as follows:

(Dollars in thousands)

4 unchanged sentences

Total carrying amount of direct financing and sales-type leases $ 226,347

The Company did not record any contingent rental income from direct financing and sales-type leases in the six months ended March 31, 2022.

The Company did not record any contingent rental income from direct financing and sales-type leases in the nine months ended June 30, 2022.

The COVID-19 pandemic began impacting the U.S.

and global economies in the first calendar quarter of 2020, with significant deterioration of macroeconomic conditions and markets into 2021.

Although macroeconomic conditions and markets have improved since the beginning of 2021, the ultimate impact of this pandemic 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 COVID-19 and will refine its estimate as more information becomes available.

Although macroeconomic conditions and markets have improved since the beginning of 2021, other factors have been affecting the economic environment in 2022 including geopolitical conflict, supply chain disruptions, inflation, and rising interest rates.

While the ultimate impact of the pandemic and these other 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 COVID-19 and other factors impacting the economy and will refine its estimate as developments occur and more information becomes available.

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

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

(Dollars in thousands) Beginning Balance Provision (Reversal) Charge-offs Recoveries Ending Balance

13 unchanged sentences

Warehouse finance 441 ( 9 ) — — 432

Community banking — ( 2 ) — 2 —

Total loans and leases 88,552 ( 1,148 ) ( 14,344 ) 2,146 75,206

3 unchanged sentences

(1) Reserve for unfunded commitments is recognized within other liabilities on the Condensed Consolidated Statements of Financial Condition.

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

(Dollars in thousands) Beginning Balance Provision (Reversal) (2)

21 unchanged sentences

(2) As a result of the adoption of CECL, effective October 1, 2020, the provision for credit losses includes the provision for unfunded commitments that was previously included within other noninterest expense.

Six Months Ended March 31, 2022

Nine Months Ended June 30, 2022

(Dollars in thousands) Beginning Balance Provision (Reversal) Charge-offs Recoveries Ending Balance

19 unchanged sentences

(1) Reserve for unfunded commitments is recognized within other liabilities on the Consolidated Statements of Financial Condition.

Six Months Ended March 31, 2021

Nine Months Ended June 30, 2021

(Dollars in thousands) Beginning Balance Impact of CECL Adoption Provision (Reversal) (2)

22 unchanged sentences

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 March 31, 2022 At September 30, 2021

(Dollars in thousands) At June 30, 2022 At September 30, 2021

Term lending $ 65,998 $ 20,965

9 unchanged sentences

In response to the ongoing COVID-19 pandemic, the Company allowed modifications, such as payment deferrals and temporary forbearances, to credit-worthy borrowers who are experiencing temporary hardship due to the effects of COVID-19.

Accordingly, if all payments were less than 30 days past due prior to the onset of the pandemic effects, the loan or lease will not be reported as past due during the deferral or forbearance period.

As of March 31, 2022, $ 0.4 million of loan and lease balances that were granted deferral payments by the Company were still in their deferment period.

Up to January 1, 2022, when this relief ended, if all payments were less than 30 days past due prior to the onset of the pandemic effects, the loan or lease will not be reported as past due during the deferral or forbearance period.

As of June 30, 2022, $ 0.1 million of loan and lease balances that were granted deferral payments by the Company were still in their deferment period.

These modifications consisted solely of payment deferrals ranging from 30 days to six months .

19 unchanged sentences

Typically, this is associated with a delay or shortfall in payments of 210 days or more for commercial insurance premium finance, 180 days or more for the purchased student loan portfolios, 120 days or more for consumer credit products and leases, and 90 days or more for community banking loans and commercial finance loans.

Action is taken to charge off ERO loans if such loans have not been collected by the end of June and taxpayer advance loans if such loans have not been collected by the end of the calendar year.

Action is taken to charge off electronic return originator ("ERO") loans if such loans have not been collected by the end of June and taxpayer advance loans if such loans have not been collected by the end of the calendar year.

Nonaccrual loans and troubled debt restructurings are generally individually evaluated for expected credit losses.

3 unchanged sentences

Due to the unique risks associated with these portfolios, the Company monitors other credit quality indicators in their evaluation of the appropriateness of the allowance for credit losses 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 $ 283.8 million and $ 86.0 million at March 31, 2022, respectively, and $ 252.9 million and $ 10.4 million at September 30, 2021, respectively.

The outstanding balances of consumer finance loans and tax services loans were $ 259.2 million and $ 41.6 million at June 30, 2022, respectively, and $ 252.9 million and $ 10.4 million at September 30, 2021, respectively.

The amortized cost basis of loans and leases by asset classification and year of origination was as follows:

1 unchanged sentence

(Dollars in thousands) Term Loans and Leases by Origination Year Revolving Loans and Leases Total

At March 31, 2022 2022 2021 2020 2019 2018 Prior

At June 30, 2022 2022 2021 2020 2019 2018 Prior

Pass $ 315,012 $ 233,436 $ 130,225 $ 39,691 $ 28,753 $ 6,710 $ — $ 753,827

113 unchanged sentences

Past due loans and leases were as follows:

At March 31, 2022

At June 30, 2022

Accruing and Nonaccruing Loans and Leases Nonperforming Loans and Leases

14 unchanged sentences

Warehouse finance — — — — 434,748 434,748 — — —

Community banking — — — — — — — — —

Total loans and leases held for investment 19,234 49,258 12,696 81,188 3,602,331 3,683,519 7,020 19,603 26,623

20 unchanged sentences

Total loans and leases $ 19,945 $ 8,200 $ 24,637 $ 52,782 $ 3,611,227 $ 3,664,009 $ 21,687 $ 34,245 $ 55,932

Nonaccrual loans and leases by year of origination at March 31, 2022 were as follows:

Nonaccrual loans and leases by year of origination at June 30, 2022 were as follows:

Amortized Cost Basis

8 unchanged sentences

Total nonaccrual loans and leases $ 540 $ 960 $ 3,826 $ 7,883 $ 764 $ 379 $ 5,251 $ 19,603 $ 8,173

Loans and leases that are 90 days or more delinquent and accruing by year of origination at March 31, 2022 were as follows:

Loans and leases that are 90 days or more delinquent and accruing by year of origination at June 30, 2022 were as follows:

Amortized Cost Basis

4 unchanged sentences

Insurance premium finance 407 391 5 — — — — 803

SBA/USDA — — 315 — — — — 315

Commercial finance 1,293 1,167 687 129 204 39 — 3,519

7 unchanged sentences

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

Three Months Ended March 31, Six Months Ended March 31,

Three Months Ended June 30, Nine Months Ended June 30,

(Dollars in thousands) 2022 2021 2022 2021

7 unchanged sentences

Total loans and leases $ 21,822 $ 37,960 $ 28,736 $ 34,856

The recognized interest income on the Company's nonaccrual loans and leases for the three and six months ended March 31, 2022 and 2021 was not significant.

The recognized interest income on the Company's nonaccrual loans and leases for the three and nine months ended June 30, 2022 and 2021 was not significant.

The Company’s troubled debt restructurings ("TDRs") typically involve forgiving a portion of interest or principal on existing loans, making loans at a rate materially less than current market rates, or extending the term of the loan.

There were $ 0.2 million of commercial finance loans and $ 0.2 million of consumer finance loans that were modified in a TDR during the three months ended March 31, 2022, all of which were modified to extend the term of the loan.

There were $ 2.1 million of commercial finance loans that were modified in a TDR during the three months ended March 31, 2021, all of which were modified to extend the term of the loan, and no community banking loans.

During the six months ended March 31, 2022, there were $ 10.3 million of commercial finance loans and $ 0.2 million of consumer finance loans that were modified in a TDR, all of which were modified to extend the term of the loan.

There were $ 2.1 million of commercial finance loans and $ 0.1 million of consumer finance loans that were modified in a TDR during the six months ended March 31, 2021 and no community banking loans.

During the six months ended March 31, 2022, the Company had $ 2.6 million of commercial finance loans and $ 0.8 million of consumer finance loans that were modified in a TDR within the previous 12 months and for which there was a payment default.

During the six months ended March 31, 2021, the Company had $ 0.1 million of consumer finance loans, and no community banking loans that were modified in a TDR within the previous 12 months and for which there was a payment default.

TDR net charge-offs and the impact of TDRs on the Company's allowance for credit losses were insignificant during the six months ended March 31, 2022 and March 31, 2021.

There were $ 0.2 million of commercial finance loans and $ 0.5 million of consumer finance loans that were modified in a TDR during the three months ended June 30, 2022, all of which were modified to extend the term of the loan.

There were $ 3.7 million of commercial finance loans and $ 0.1 million of consumer finance loans that were modified in a TDR during the three months ended June 30, 2021, all of which were modified to extend the term of the loan, and no community banking loans.

During the nine months ended June 30, 2022, there were $ 10.4 million of commercial finance loans and $ 0.7 million of consumer finance loans that were modified in a TDR, all of which were modified to extend the term of the loan.

There were $ 5.9 million of commercial finance loans and $ 0.2 million of consumer finance loans that were modified in a TDR during the nine months ended June 30, 2021 and no community banking loans.

During the nine months ended June 30, 2022, the Company had $ 1.4 million of commercial finance loans and $ 0.3 million of consumer finance loans that were modified in a TDR within the previous 12 months and for which there was a payment default.

During the nine months ended June 30, 2021, the Company had $ 0.4 million of commercial finance loans and $ 0.1 million of consumer finance loans, and no community banking loans that were modified in a TDR within the previous 12 months and for which there was a payment default.

TDR net charge-offs and the impact of TDRs on the Company's allowance for credit losses were insignificant during the nine months ended June 30, 2022 and June 30, 2021.

EARNINGS PER COMMON SHARE ("EPS")

8 unchanged sentences

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

Three Months Ended March 31, Six Months Ended March 31,

Three Months Ended June 30, Nine Months Ended June 30,

(Dollars in thousands, except per share data) 2022 2021 2022 2021

Basic income per common share:

Net income attributable to Meta Financial Group, Inc.

Net income attributable to Pathward Financial, Inc.

$ 22,391 $ 38,701 $ 132,966 $ 125,805

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(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 three months ended March 31, 2022 and 2021, respectively, were 491,621 and 605,459 weighted average shares of nonvested restricted stock because their inclusion would be anti-dilutive.

Excluded from the computation of diluted earnings per share for the six months ended March 31, 2022 and 2021, respectively, were 484,457 and 633,553 weighted average shares of nonvested restricted stock because their inclusion would be anti-dilutive.

(2) Excluded from the computation of diluted earnings per share for the three months ended June 30, 2022 and 2021, respectively, were 493,800 and 601,693 weighted average shares of nonvested restricted stock because their inclusion would be anti-dilutive.

Excluded from the computation of diluted earnings per share for the nine months ended June 30, 2022 and 2021, respectively, were 487,538 and 622,954 weighted average shares of nonvested restricted stock because their inclusion would be anti-dilutive.

RENTAL EQUIPMENT, NET

Rental equipment consists of the following:

(Dollars in thousands) March 31, 2022 September 30, 2021

(Dollars in thousands) June 30, 2022 September 30, 2021

Computers and IT networking equipment $ 21,512 $ 17,683

6 unchanged sentences

Net book value $ 222,023 $ 213,116

Undiscounted future minimum lease payments expected to be received for operating leases at March 31, 2022 were as follows:

Undiscounted future minimum lease payments expected to be received for operating leases at June 30, 2022 were as follows:

(Dollars in thousands)

3 unchanged sentences

GOODWILL AND INTANGIBLE ASSETS

The Company held a total of $ 309.5 million of goodwill at March 31, 2022.

The Company held a total of $ 309.5 million of goodwill at June 30, 2022.

The recorded goodwill is a result of multiple business combinations that have been consummated since fiscal year 2015, with the most recent pursuant to the Crestmark Acquisition that closed on August 1, 2018.

2 unchanged sentences

Segment Reporting for additional information on the Company's segment reporting.

There have been no changes to the carrying amount of goodwill during the six months ended March 31, 2022.

There have been no changes to the carrying amount of goodwill during the nine months ended June 30, 2022.

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

8 unchanged sentences

Write-offs during the period — — ( 670 ) ( 203 ) ( 873 )

At March 31, 2022 $ 9,297 $ — $ 15,039 $ 4,954 $ 29,290

At June 30, 2022 $ 8,952 $ — $ 13,314 $ 4,822 $ 27,088

Gross carrying amount $ 14,624 $ 2,481 $ 82,088 $ 9,940 $ 109,133

1 unchanged sentence

Accumulated impairment — — ( 10,918 ) ( 218 ) ( 11,136 )

At March 31, 2022 $ 9,297 $ — $ 15,039 $ 4,954 $ 29,290

At June 30, 2022 $ 8,952 $ — $ 13,314 $ 4,822 $ 27,088

At September 30, 2020 $ 10,901 $ 422 $ 24,333 $ 6,036 $ 41,692

2 unchanged sentences

Write-offs during the period — — — ( 24 ) ( 24 )

At March 31, 2021 $ 10,357 $ 231 $ 20,617 $ 5,698 $ 36,903

At June 30, 2021 $ 10,085 $ 136 $ 19,131 $ 5,546 $ 34,898

Gross carrying amount $ 14,624 $ 2,481 $ 82,088 $ 10,131 $ 109,324

1 unchanged sentence

Accumulated impairment — — ( 10,248 ) ( 218 ) ( 10,466 )

At March 31, 2021 $ 10,357 $ 231 $ 20,617 $ 5,698 $ 36,903

At June 30, 2021 $ 10,085 $ 136 $ 19,131 $ 5,546 $ 34,898

(1) Book amortization period of 5 - 15 years.

7 unchanged sentences

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 remaining six months of fiscal 2022 and subsequent fiscal years was as follows:

Estimated amortization expense of intangible assets in the remaining three months of fiscal 2022 and subsequent fiscal years was as follows:

(Dollars in thousands)

3 unchanged sentences

The Company tests intangible assets for impairment at least annually or more often if conditions indicate a possible impairment.

There were no impairments to intangible assets during the six months ended March 31, 2022 and 2021.

There were no impairments to intangible assets during the nine months ended June 30, 2022 and 2021.

Intangible expense is recorded within the impairment expense line of the Condensed Consolidated Statements of Operations.

OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES

Operating lease ROU assets, included in other assets , were $ 31.8 million and $ 36.1 million at March 31, 2022 and 2021, respectively.

Operating lease liabilities, included in accrued expenses and other liabilities , were $ 33.6 million and $ 38.1 million at March 31, 2022 and 2021, respectively.

Undiscounted future minimum operating lease payments and a reconciliation to the amount recorded as operating lease liabilities at March 31, 2022 were as follows:

Operating lease ROU assets, included in other assets , were $ 31.0 million and $ 35.4 million at June 30, 2022 and 2021, respectively.

Operating lease liabilities, included in accrued expenses and other liabilities , were $ 32.9 million and $ 37.6 million at June 30, 2022 and 2021, respectively.

Undiscounted future minimum operating lease payments and a reconciliation to the amount recorded as operating lease liabilities at June 30, 2022 were as follows:

(Dollars in thousands)

4 unchanged sentences

Total operating lease liabilities $ 32,856

The weighted-average discount rate and remaining lease term for operating leases at March 31, 2022 were as follows:

The weighted-average discount rate and remaining lease term for operating leases at June 30, 2022 were as follows:

Weighted-average discount rate 2.34 %

1 unchanged sentence

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

Three Months Ended March 31, Six Months Ended March 31,

Three Months Ended June 30, Nine Months Ended June 30,

(Dollars in thousands) 2022 2021 2022 2021

8 unchanged sentences

All remaining shares available for repurchase under this program were repurchased during the fiscal 2022 first quarter.

This authorization was effective from November 21, 2019 through December 31, 2022.

This authorization is effective from November 21, 2019 through December 31, 2022.

On September 7, 2021, the Company's Board of Directors announced a new share repurchase program to repurchase up to an additional 6,000,000 shares of the Company's outstanding common stock.

This authorization is effective from September 3, 2021 through September 30, 2024.

During the six months ended March 31, 2022, and 2021, the Company repurchased 2,447,699 and 2,599,458 shares, respectively, as part of the share repurchase programs.

During the nine months ended June 30, 2022, and 2021, the Company repurchased 2,447,699 and 2,599,458 shares, respectively, as part of the share repurchase programs.

Under the repurchase programs, repurchased shares were retired and designated as authorized but unissued shares.

1 unchanged sentence

When the repurchase price is greater than the original issue proceeds, the excess is charged to retained earnings.

As of March 31, 2022, 4,868,177 shares of common stock remained available for repurchase.

For the six months ended March 31, 2022, and 2021, the Company also repurchased 64,536 and 84,121 shares, or $ 3.7 million and $ 1.9 million of common stock, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock.

As of June 30, 2022, 4,868,177 shares of common stock remained available for repurchase.

For the nine months ended June 30, 2022, and 2021, the Company also repurchased 67,158 and 84,950 shares, or $ 3.8 million and $ 2.0 million of common stock, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock.

STOCK COMPENSATION

5 unchanged sentences

The Company has elected, with the adoption of ASU 2016-09, to record forfeitures as they occur.

The following tables show the activity of nonvested (restricted) shares and PSUs granted, vested, or forfeited under the 2002 Omnibus Incentive Plan for the six months ended March 31, 2022.

There were no options granted, exercised, or forfeited under this plan during the six months ended March 31, 2022.

The following tables show the activity of nonvested (restricted) shares and PSUs granted, vested, or forfeited under the 2002 Omnibus Incentive Plan for the nine months ended June 30, 2022.

There were no options granted, exercised, or forfeited under this plan during the nine months ended June 30, 2022.

(Dollars in thousands, except per share data) Number of Shares Weighted Average Fair Value at Grant

4 unchanged sentences

Forfeited or expired ( 19,762 ) 42.98

Nonvested shares outstanding, March 31, 2022

Nonvested shares outstanding, June 30, 2022

485,534 $ 37.02

3 unchanged sentences

Forfeited or expired — —

Performance share units outstanding, March 31, 2022

Performance share units outstanding, June 30, 2022

96,689 $ 42.59

(1) The number of PSUs granted reflects the target number of PSUs able to be earned under a given award.

At March 31, 2022, stock-based compensation expense not yet recognized in income totaled $ 10.8 million, which is expected to be recognized over a weighted average remaining period of 1.63 years.

The Company recorded an income tax expense of $ 22.3 million for the six months ended March 31, 2022, resulting in an effective tax rate of 16.66 %, compared to an income tax expense of $ 4.7 million, or an effective tax rate of 4.97 %, for the six months ended March 31, 2021.

At June 30, 2022, stock-based compensation expense not yet recognized in income totaled $ 8.4 million, which is expected to be recognized over a weighted average remaining period of 1.51 years.

The Company recorded an income tax expense of $ 29.2 million for the nine months ended June 30, 2022, resulting in an effective tax rate of 17.77 %, compared to an income tax expense of $ 9.6 million, or an effective tax rate of 6.92 %, for the nine months ended June 30, 2021.

The Company’s effective tax rate was lower than the U.S.

2 unchanged sentences

The table below compares the income tax expense components for the periods presented.

Six Months Ended March 31,

Nine Months Ended June 30,

(Dollars in thousands) 2022 2021

15 unchanged sentences

(Dollars in thousands) Consumer Commercial Corporate Services/Other Consolidated Company

Three Months Ended March 31, 2022 2021 2022 2021 2022 2021 2022 2021

Three Months Ended June 30, 2022 2021 2022 2021 2022 2021 2022 2021

Net interest income (1)

16 unchanged sentences

Revenue $ 59,439 $ 66,361 $ 62,662 $ 62,838 $ 4,044 $ 1,729 $ 126,145 $ 130,928

Six Months Ended March 31,

Nine Months Ended June 30,

Net interest income (1)

32 unchanged sentences

The transaction price for such activity is based upon stand-alone fees within the terms and conditions.

At March 31, 2022 and September 30, 2021, there were no receivables related to refund transfer fees, which reflect earned revenue with unconditional rights to payment for product fee income.

At June 30, 2022 and September 30, 2021, there were no receivables related to refund transfer fees, which reflect earned revenue with unconditional rights to payment for product fee income.

All refund transfer fees are recorded within the Consumer reporting segment.

Card fees relate to Meta Payments, Refund Advantage, and EPS products.

Card fees relate to Banking-as-a-Service.

These fees are for products and services such as card activation, product support, processing, and servicing.

24 unchanged sentences

The Consumer reporting segment includes principal/agent relationships.

Within this segment, Meta Payments division relationships are recorded on a gross basis within the Condensed Consolidated Statements of Operations, as Meta is the principal in the contract, with the exception of association/network contracts and partner/processor contracts for prepaid cards, which are recorded on a net basis within the Condensed Consolidated Statements of Operations as Meta is the agent in these contracts.

Also within this segment, Tax Service relationships are recorded on a gross basis within the Condensed Consolidated Statements of Operations, as Meta is the principal in the contract, with the exception of contracts with software providers and merchants, which are recorded on a net basis within the Condensed Consolidated Statements of Operations as Meta is the agent in these contracts.

Within this segment, Pathward Payments division relationships are recorded on a gross basis within the Condensed Consolidated Statements of Operations, as Pathward is the principal in the contract, with the exception of association/network contracts and partner/processor contracts for prepaid cards, which are recorded on a net basis within the Condensed Consolidated Statements of Operations as Pathward is the agent in these contracts.

Also within this segment, Tax Service relationships are recorded on a gross basis within the Condensed Consolidated Statements of Operations, as Pathward is the principal in the contract, with the exception of contracts with software providers and merchants, which are recorded on a net basis within the Condensed Consolidated Statements of Operations as Pathward is the agent in these contracts.

SEGMENT REPORTING

3 unchanged sentences

Consumer, Commercial, and Corporate Services/Other.

The Meta Payments and Tax Services divisions, as well as the Consumer Credit Products and ClearBalance business lines, are reported in the Consumer segment .

The Crestmark and AFS divisions are reported in the Commercial segment.

The Payments and Tax Services divisions, as well as the Consumer Credit Products business line, are reported in the Consumer segment .

The commercial finance, insurance premium finance and ClearBalance divisions are reported in the Commercial segment.

The Community Bank division and Student Loan lending portfolio are included in the Corporate Services/Other segment.

3 unchanged sentences

(Dollars in thousands) Consumer Commercial Corporate Services/Other Total

Three Months Ended March 31, 2022 2021 2022 2021 2022 2021 2022 2021

Three Months Ended June 30, 2022 2021 2022 2021 2022 2021 2022 2021

Net interest income $ 23,213 $ 23,132 $ 46,802 $ 44,850 $ 2,136 $ 493 $ 72,151 $ 68,475

6 unchanged sentences

Total deposits 5,573,768 5,713,309 11,177 10,829 125,854 164,733 5,710,799 5,888,871

Six Months Ended March 31,

Nine Months Ended June 30,

Net interest income $ 79,323 $ 70,205 $ 136,923 $ 129,461 $ 11,318 $ 8,658 $ 227,564 $ 208,324

22 unchanged sentences

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:

Fair Value At March 31, 2022

Fair Value At June 30, 2022

(Dollars in thousands) Total Level 1 Level 2 Level 3

11 unchanged sentences

$ 6,494 $ — $ — $ —

(1) Equity securities at fair value are included within other assets on the Condensed Consolidated Statements of Financial Condition at March 31, 2022 and September 30, 2021.

(1) Equity securities at fair value are included within other assets on the Condensed Consolidated Statements of Financial Condition at June 30, 2022 and September 30, 2021.

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

13 unchanged sentences

$ 4,560 $ — $ — $ —

(1) Equity securities at fair value are included within other assets on the Condensed Consolidated Statements of Financial Condition at March 31, 2022 and September 30, 2021.

(1) Equity securities at fair value are included within other assets on the Condensed Consolidated Statements of Financial Condition at June 30, 2022 and September 30, 2021.

(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.

8 unchanged sentences

The following table summarizes the assets of the Company that are measured at fair value in the Condensed Consolidated Statements of Financial Condition on a non-recurring basis:

Fair Value At March 31, 2022

Fair Value At June 30, 2022

(Dollars in thousands) Total Level 1 Level 2 Level 3

16 unchanged sentences

(Dollars in thousands) Fair Value at

March 31, 2022

June 30, 2022

Fair Value at

6 unchanged sentences

Management discloses the estimated fair value of financial instruments, including assets and liabilities on and off the Condensed Consolidated Statements of Financial Condition, for which it is practicable to estimate fair value.

These fair value estimates were made at March 31, 2022 and September 30, 2021 based on relevant market information and information about financial instruments.

These fair value estimates were made at June 30, 2022 and September 30, 2021 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.

3 unchanged sentences

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

At March 31, 2022

At June 30, 2022

(Dollars in thousands) Carrying

17 unchanged sentences

Accrued interest payable 210 210 210 — —

(1) Equity securities at fair value are included within other assets on the Condensed Consolidated Statements of Financial Condition at March 31, 2022.

(1) Equity securities at fair value are included within other assets on the Condensed Consolidated Statements of Financial Condition at June 30, 2022.

(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.

22 unchanged sentences

SUBSEQUENT EVENTS

Management has evaluated subsequent events that occurred after March 31, 2022.

During this period, up to the filing date of this Quarterly Report on Form 10-Q, management did not identify any material subsequent events that would require recognition or disclosure in our Condensed Consolidated Financial Statements as of or for the quarter ended March 31, 2022.

Management has evaluated subsequent events that occurred after June 30, 2022.

During this period, up to the filing date of this Quarterly Report on Form 10-Q, management identified the following subsequent event:

• A majority of the Company's student loan portfolio is considered to be held for sale after becoming subject to a sale agreement that is expected to close in August.

The Company's student loan portfolio was $ 83.3 million at June 30, 2022 and is included in the Other Consumer Finance loan category within Note 5.

Loans and Leases, Net.

The transaction is not expected to result in a material impact to net income.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements