What changed in this filing

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Item 1. Financial Statements

2023-02-07 compared with 2022-08-09 · 218 added, 395 removed, 854 unchanged (42% of the section changed)

3 unchanged sentences

Condensed Consolidated Statements of Financial Condition

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

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

ASSETS (Unaudited) (Audited)

10 unchanged sentences

Rental equipment, net 231,129 204,371

Foreclosed real estate and repossessed assets, net 13 2,077

Goodwill and intangible assets 333,938 335,196

Prepaid assets 11,408 10,513

Other assets 272,349 295,324

6 unchanged sentences

STOCKHOLDERS’ EQUITY

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

Preferred stock, 3,000,000 shares authorized, no shares issued, none outstanding at December 31, 2022 and September 30, 2022, respectively

Common stock, $ 0.01 par value;

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

90,000,000 shares authorized, 28,358,583 and 28,878,177 shares issued, 28,211,239 and 28,788,124 shares outstanding at December 31, 2022 and September 30, 2022, respectively

Common stock, Nonvoting, $ 0.01 par value;

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

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

Additional paid-in capital 620,681 617,403

Retained earnings 246,891 245,394

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

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

Accumulated other comprehensive loss ( 201,690 ) ( 213,080 )

Treasury stock, at cost, 147,344 and 90,053 common shares at December 31, 2022 and September 30, 2022, respectively

( 6,824 ) ( 4,835 )

7 unchanged sentences

Condensed Consolidated Statements of Operations (Unaudited)

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

Three Months Ended December 31,

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

7 unchanged sentences

FHLB advances and other borrowings 861 1,137

1,755 1,508 4,410 5,474

Net interest income 84,057 71,613

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

Provision for credit losses 9,776 186

Net interest income after provision for credit losses 74,281 71,427

1 unchanged sentence

Refund transfer product fees 677 579

Tax advance product fees ( 20 ) 891 40,513 47,413

Payments card and deposit fees 24,673 29,203 76,075 81,641

Other bank and deposit fees 262 338 750 709

Refund advance fee income 617 1,233

Card and deposit fees 37,718 25,369

Rental income 12,708 11,077

Gain on sale of securities 198 — 595 6

Gain (loss) on sale of securities — 137

Gain on sale of trademarks 10,000 50,000

5 unchanged sentences

Refund transfer product expense 105 138

Tax advance product expense ( 29 ) ( 25 ) 2,156 2,534

Refund advance expense 27 183

Card processing 22,683 7,172

9 unchanged sentences

Net income before noncontrolling interest 28,422 61,306

Net income attributable to noncontrolling interest 1,448 1,158 2,281 3,221

Net income (loss) attributable to noncontrolling interest 580 ( 18 )

Net income attributable to parent $ 27,842 $ 61,324

6 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

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

Three Months Ended December 31,

(Dollars in thousands) 2022 2021

2 unchanged sentences

Change in net unrealized gain (loss) on debt securities 14,708 ( 9,140 )

Net (gain) realized on investment securities ( 198 ) — ( 595 ) ( 6 )

Net loss (gain) realized on investment securities — ( 137 )

14,708 ( 9,277 )

Unrealized gain on currency translation ( 520 ) 121 ( 311 ) 692

Unrealized gain (loss) on currency translation 387 66

Deferred income tax effect 3,705 ( 2,336 )

Total other comprehensive (loss) ( 62,033 ) 2,413 ( 139,006 ) ( 2,320 )

Total comprehensive income (loss) ( 38,194 ) 42,272 ( 3,759 ) 126,706

Total comprehensive income attributable to noncontrolling interest 1,448 1,158 2,281 3,221

Comprehensive income (loss) attributable to parent $ ( 39,642 ) $ 41,114 $ ( 6,040 ) $ 123,485

Total other comprehensive income (loss) 11,390 ( 6,875 )

Total comprehensive income 39,812 54,431

Total comprehensive income (loss) attributable to noncontrolling interest 580 ( 18 )

Comprehensive income attributable to parent $ 39,232 $ 54,449

See Notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

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

Three Months Ended June 30, 2022 Common

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Treasury

Stock Total Pathward

Stockholders’

Equity Noncontrolling interest Total

Stockholders’

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)

— — ( 1,465 ) — — ( 1,465 ) — ( 1,465 )

Repurchases of common stock — — — — ( 110 ) ( 110 ) — ( 110 )

Stock compensation — 2,242 — — — 2,242 — 2,242

Total other comprehensive (loss) — — — ( 62,033 ) — ( 62,033 ) — ( 62,033 )

Net income — — 22,391 — — 22,391 1,448 23,839

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

Balance, June 30, 2022

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

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)

— — ( 1,594 ) — — ( 1,594 ) — ( 1,594 )

Repurchases of common stock — — — — ( 41 ) ( 41 ) — ( 41 )

Stock compensation — 1,498 — — — 1,498 — 1,498

Total other comprehensive (loss) — — — 2,413 — 2,413 — 2,413

Net income — — 38,701 — — 38,701 1,158 39,859

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

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) Pathward Financial, Inc.

Nine Months Ended June 30, 2022 Common

Three Months Ended December 31, 2022 Common

Stock Additional

3 unchanged sentences

Income (Loss) Treasury

Stock Total Pathward

Stock Total Pathward Financial

Stockholders’

6 unchanged sentences

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

Repurchases of common stock ( 7 ) 7 ( 24,943 ) — ( 1,989 ) ( 26,932 ) — ( 26,932 )

Stock compensation — 3,271 — — — 3,271 — 3,271

Total other comprehensive (loss) — — — ( 139,006 ) — ( 139,006 ) — ( 139,006 )

Total other comprehensive income — — — 11,390 — 11,390 — 11,390

Net income — — 27,842 — — 27,842 580 28,422

Net investment by (distribution to) noncontrolling interests — — — — — — ( 757 ) ( 757 )

Balance, June 30, 2022

Balance, December 31, 2022

$ 282 $ 620,681 $ 246,891 $ ( 201,690 ) $ ( 6,824 ) $ 659,340 $ ( 207 ) $ 659,133

Nine Months Ended June 30, 2021

Three Months Ended December 31, 2021

Balance, September 30, 2021

$ 317 $ 604,484 $ 259,189 $ 7,599 $ ( 860 ) $ 870,729 $ 1,155 $ 871,884

Adoption of Accounting Standards Update 2016-13, net of income taxes — — ( 8,351 ) — — ( 8,351 ) ( 2,452 ) ( 10,803 )

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

6 unchanged sentences

Net investment by (distribution to) noncontrolling interests — — — — — — ( 495 ) ( 495 )

Balance, June 30, 2021

Balance, December 31, 2021

$ 301 $ 610,816 $ 217,992 $ 724 $ ( 4,318 ) $ 825,515 $ 642 $ 826,157

3 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended June 30,

Three Months Ended December 31,

(Dollars in thousands) 2022 2021

4 unchanged sentences

Provision for credit losses 9,776 186

Provision (reversal of) for deferred taxes 18,517 ( 1,360 )

Provision for deferred taxes 2,255 8,015

Originations of loans held for sale ( 398,798 ) ( 385,558 )

1 unchanged sentence

Net change in loans held for sale ( 84 ) 8,805

Fair value adjustment of foreclosed real estate 250 481

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

Net realized (gain) on securities held to maturity, net — ( 137 )

Net realized (gain) loss on loans held for sale ( 75 ) 4,365

1 unchanged sentence

Net realized (gain) on lease receivables and equipment ( 427 ) ( 924 )

Net realized (gain) on foreclosed real estate and repossessed assets — ( 4 )

Net realized (gain) on trademarks ( 10,000 ) ( 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 —

Impairment on rental equipment 24 —

Net change in accrued interest receivable ( 2,191 ) ( 987 )

5 unchanged sentences

Purchases of securities available for sale — ( 20,894 )

Proceeds from sales of securities available for sale 244,305 50,468

Proceeds from maturities of and principal collected on securities available for sale 49,069 91,297

Proceeds from sales of securities held to maturity — 200

Proceeds from maturities of and principal collected on securities held to maturity 1,058 5,409

11 unchanged sentences

Proceeds from sale of trademarks 10,000 50,000

Proceeds from sale of other assets 2,925 —

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

Net cash provided by (used in) investing activities 45,443 ( 147,517 )

Cash flows from financing activities:

Net change in deposits ( 76,905 ) 1,010,598

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

Principal payments on capital lease obligations — ( 7 )

Principal payments on other liabilities ( 573 ) ( 598 )

Proceeds from other liabilities — 80

Payment of debt issuance costs ( 504 ) —

Dividends paid on common stock ( 1,402 ) ( 1,521 )

3 unchanged sentences

Distributions to noncontrolling interest ( 757 ) ( 495 )

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

Net cash provided by (used in) financing activities ( 107,072 ) 906,405

Effect of exchange rate changes on cash 387 66

2 unchanged sentences

Cash and cash equivalents at end of fiscal period $ 369,169 $ 1,230,100

Nine Months Ended June 30,

Three Months Ended December 31,

(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 — 12

1 unchanged sentence

Loans and leases to rental equipment 1,405 988

Loans and leases to foreclosed real estate and repossessed assets — 9

Rental equipment to loan and leases 128,145 72,267

Recognition of operating lease ROU assets, net of measurements 389 12,954

See Notes to Condensed Consolidated Financial Statements.

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

The results of the three months ended December 31, 2022 are not necessarily indicative of the results expected for the fiscal year ending September 30, 2023.

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

2 unchanged sentences

Significant accounting policies in effect and disclosed within the Company’s most recent audited consolidated financial statements as of September 30, 2022 remain substantially unchanged.

The following ASUs became effective for the Company on October 1, 2021, none of which had a material impact on the Company’s significant accounting policies or Condensed Consolidated Financial Statements:

– ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

– ASU 2020-08 , Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs.

– ASU 2020-10, Codification Improvements.

The following ASU became effective for the Company on October 1, 2022, and did not have a material impact on the Company’s significant accounting policies or Condensed Consolidated Financial Statements:

– ASU 2021-05, Leases (Topic 842):

Lessors - Certain Leases with Variable Lease Payments.

SIGNIFICANT EVENTS

On December 7, 2021, the Company executed a Purchase Agreement (the “Agreement”) with Beige Key, LLC (the “Assignee”) for the sale of all of the Company’s worldwide right, title and interest in and to company names and tradenames including Meta and other "Meta" formative names including MetaBank and Meta Financial Group, and the domain names, social media accounts and goodwill associated with the foregoing (collectively, the “Meta” tradenames) in exchange for $ 60.0 million in cash.

Subject to the terms and conditions set forth in the Agreement, the Company has one year from the Agreement execution date to phase out and cease all use of the Meta tradenames.

From the date of the Agreement until the date such phase out is completed (the “Phase Out Period”), Assignee has granted the Company a non-exclusive royalty free license in the United States and Canada to use the Meta tradenames in the manner in which they were used by the Company prior to the Agreement.

Subject to the terms and conditions set forth in the Agreement, the Company had one year from the Agreement execution date to phase out and cease all use of the Meta tradenames.

The Company received $ 50.0 million upon execution and delivery of the Agreement, at which time the Meta tradenames were assigned to the Assignee.

The Company has recognized the $ 50.0 million as noninterest income during the period ended December 31, 2021.

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 June 30, 2022.

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 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 remaining $ 10.0 million was released to the Company upon completion of phase out activities and recognized as noninterest income during the three months ended December 31, 2022.

The Company recognized $ 3.7 million and zero of noninterest expense related to rebranding efforts during the three months ended December 31, 2022 and 2021, 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.

Debt Securities AFS

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

At June 30, 2022

Debt Securities AFS

At December 31, 2022

Corporate securities $ 25,000 $ — $ ( 3,688 ) $ 21,312

14 unchanged sentences

Debt Securities HTM

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

At June 30, 2022

At December 31, 2022

Non-bank qualified obligations of states and political subdivisions $ 38,131 $ — $ ( 2,647 ) $ 35,484

12 unchanged sentences

Debt Securities AFS

At June 30, 2022

At December 31, 2022

Corporate securities $ — $ — $ 21,313 $ ( 3,688 ) $ 21,313 $ ( 3,688 )

6 unchanged sentences

At September 30, 2022

Corporate securities $ — $ — $ 22,187 $ ( 2,813 ) $ 22,187 $ ( 2,813 )

SBA securities 97,767 ( 7,470 ) — — 97,767 ( 7,470 )

Obligations of state and political subdivisions 2,345 ( 125 ) — — 2,345 ( 125 )

Non-bank qualified obligations of states and political subdivisions 195,816 ( 19,743 ) 67,967 ( 7,228 ) 263,783 ( 26,971 )

3 unchanged sentences

Debt Securities HTM

At June 30, 2022

At December 31, 2022

Non-bank qualified obligations of states and political subdivisions $ — $ — $ 35,485 $ ( 2,647 ) $ 35,485 $ ( 2,647 )

3 unchanged sentences

Non-bank qualified obligations of states and political subdivisions $ 3,984 $ ( 300 ) $ 31,919 $ ( 2,890 ) $ 35,903 $ ( 3,190 )

Mortgage-backed securities 2,268 ( 321 ) — — 2,268 ( 321 )

Total debt securities HTM $ 6,252 $ ( 621 ) $ 31,919 $ ( 2890 ) $ 38,171 $ ( 3,511 )

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

At December 31, 2022, there were 194 securities AFS in an unrealized loss position.

All of the mortgage-backed securities ("MBS") in an unrealized loss position at December 31, 2022 were government guaranteed.

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

At December 31, 2022, there was no allowance for credit losses ("ACL") for debt securities AFS.

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

Certain securities have call features that allow the issuer to call the security prior to maturity.

Expected maturities may differ from contractual maturities in mortgage-backed securities ("MBS") because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Expected maturities may differ from contractual maturities in MBS because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Therefore, MBS are not included in the maturity categories in the following maturity summary.

The expected maturities of certain SBA securities may differ from contractual maturities because the borrowers may have the right to prepay the obligation.

The expected maturities of certain Small Business Administration ("SBA") securities may differ from contractual maturities because the borrowers may have the right to prepay the obligation.

However, certain prepayment penalties may apply.

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

(Dollars in thousands) At December 31, 2022 At September 30, 2022

Securities AFS at Fair Value Amortized Cost Fair

7 unchanged sentences

Total securities AFS, at fair value $ 2,115,921 $ 1,847,778 $ 2,165,719 $ 1,882,869

At June 30, 2022 At September 30, 2021

(Dollars in thousands) Amortized Cost Fair

Value Amortized Cost Fair

Securities HTM at Fair Value

4 unchanged sentences

Equity Securities

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 Company held $ 3.4 million at December 31, 2022 and $ 2.9 million at September 30, 2022 in marketable equity securities.

The Company recognized zero and $ 2.3 million in unrealized loss on marketable equity securities during the three months ended December 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 three months ended December 31, 2022 and 2021.

No such securities were sold during the three months ended December 31, 2022.

Non-marketable equity securities with a readily determinable fair value totaled $ 7.8 million at December 31, 2022 and $ 7.2 million at September 30, 2022.

The Company recognized $ 0.1 million in unrealized gains and $ 0.3 million in unrealized losses during the three months ended December 31, 2022 and 2021, respectively.

No such securities were sold during the three months ended December 31, 2022.

Non-marketable equity securities without readily determinable fair value totaled $ 18.2 million at December 31, 2022 and $ 18.2 million at September 30, 2022.

No such securities were sold during the three months ended December 31, 2022 .

Federal Reserve Bank ("FRB") Stock

The Bank is required by federal law to subscribe to capital stock (divided into shares of $100 each) as a member of the FRB of Minneapolis with an amount equal to six per centum of the paid-up capital stock and surplus.

One-half of the subscription is paid at time of application, and one-half is subject to call of the Board of Governors of the Federal Reserve System.

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

FRB of Minneapolis stock held by the Bank totaled $ 19.7 million at December 31, 2022 and September 30, 2022.

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

Federal Home Loan Bank ("FHLB") Stock

The Company's borrowings from the FHLB are secured by specific investment securities.

3 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 June 30, 2022 and $ 8.7 million at September 30, 2021.

The carrying value of the stock held at the FHLB was $ 9.1 million at December 31, 2022 and at September 30, 2022.

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 nine months ended June 30, 2022.

The Company recognized no impairment for such investments for the three months ended December 31, 2022 and 2021, respectively.

LOANS AND LEASES, NET

Loans and leases consist of the following:

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

(Dollars in thousands) December 31, 2022 September 30, 2022

Term lending $ 1,160,100 $ 1,090,289

11 unchanged sentences

Warehouse finance 279,899 326,850

Community banking — 199,132

Total loans and leases 3,504,066 3,529,280

3 unchanged sentences

Total loans and leases, net $ 3,457,138 $ 3,490,358

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 $ 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 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.

During the three months ended December 31, 2022 and 2021, the Company originated $ 398.8 million and $ 385.6 million of consumer finance and SBA/USDA as held for sale, respectively.

The Company sold held for sale loans resulting in proceeds of $ 402.9 million and gain on sale of $ 0.1 million during the three months ended December 31, 2022.

The Company sold held for sale loans resulting in proceeds of $ 562.7 million and loss on sale of $ 4.4 million during the three months ended December 31, 2021.

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

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

Three Months Ended December 31,

(Dollars in thousands) 2022 2021

3 unchanged sentences

Warehouse finance 67,649 55,993

Community banking — 403 — 3,250

Total purchases $ 67,649 $ 57,713

4 unchanged sentences

Loans held for investment:

Commercial finance — — 15,549 —

Community banking — 30,235

2 unchanged sentences

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

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

(Dollars in thousands) December 31, 2022 September 30, 2022

Carrying amount $ 194,480 $ 216,880

3 unchanged sentences

Total net investment in direct financing and sales-type leases $ 190,115 $ 210,987

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:

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

(Dollars in thousands)

4 unchanged sentences

Total carrying amount of direct financing and sales-type leases $ 194,480

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

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

3 unchanged sentences

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

Three Months Ended June 30, 2022

Three Months Ended December 31, 2022

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

18 unchanged sentences

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

Three Months Ended June 30, 2021

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

Charge-offs Recoveries Ending Balance

Allowance for credit losses:

Term lending $ 27,315 $ 1,199 $ ( 1,998 ) $ 515 $ 27,031

Asset based lending 1,749 21 — 212 1,982

Factoring 3,210 33 1 17 3,261

Lease financing 6,863 842 ( 916 ) 130 6,919

Insurance premium finance 1,326 ( 1,200 ) ( 120 ) 1,583 1,589

SBA/USDA 3,300 ( 171 ) — — 3,129

Other commercial finance 541 183 — — 724

Commercial finance 44,304 907 ( 3,033 ) 2,457 44,635

Consumer credit products 990 21 — — 1,011

Other consumer finance 10,093 ( 180 ) ( 2,327 ) 57 7,643

Consumer finance 11,083 ( 159 ) ( 2,327 ) 57 8,654

Tax services 29,146 4,685 ( 9,505 ) 17 24,343

Warehouse finance 332 — — — 332

Community banking 14,027 ( 783 ) — — 13,244

Total loans and leases 98,892 4,650 ( 14,865 ) 2,531 91,208

Unfunded commitments (1)

779 ( 38 ) — — 741

Total $ 99,671 $ 4,612 $ ( 14,865 ) $ 2,531 $ 91,949

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

(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.

Nine Months Ended June 30, 2022

Three Months Ended December 31, 2021

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

18 unchanged sentences

Total $ 68,971 $ 186 $ ( 4,859 ) $ 3,730 $ 68,028

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

Nine Months Ended June 30, 2021

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

Charge-offs Recoveries Ending Balance

Allowance for credit losses:

Term lending $ 15,211 $ 9,999 $ 8,621 $ ( 7,787 ) $ 987 $ 27,031

Asset based lending 1,406 164 1,399 ( 1,199 ) 212 1,982

Factoring 3,027 987 ( 1,928 ) — 1,175 3,261

Lease financing 7,023 ( 556 ) 2,375 ( 2,264 ) 341 6,919

Insurance premium finance 2,129 ( 965 ) ( 609 ) ( 925 ) 1,959 1,589

SBA/USDA 940 2,720 ( 532 ) — 1 3,129

Other commercial finance 182 364 178 — — 724

Commercial finance 29,918 12,713 9,504 ( 12,175 ) 4,675 44,635

Consumer credit products 845 — 166 — — 1,011

Other consumer finance 2,821 5,998 1,568 ( 2,964 ) 220 7,643

Consumer finance 3,666 5,998 1,734 ( 2,964 ) 220 8,654

Tax services 2 — 32,819 ( 9,505 ) 1,027 24,343

Warehouse finance 294 ( 1 ) 39 — — 332

Community banking 22,308 ( 5,937 ) ( 2,983 ) ( 144 ) — 13,244

Total loans and leases 56,188 12,773 41,113 ( 24,788 ) 5,922 91,208

Unfunded commitments (1)

32 831 ( 122 ) — — 741

Total $ 56,220 $ 13,604 $ 40,991 $ ( 24,788 ) $ 5,922 $ 91,949

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

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

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

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

(Dollars in thousands) At December 31, 2022 At September 30, 2022

Term lending $ 2,847 $ 2,885

4 unchanged sentences

Commercial finance (1)

112,256 26,115

Community banking — 14,915

Total $ 17,514 $ 7,421

(1) For commercial finance, collateral dependent financial assets have collateral in the form of cash, equipment, or other business assets.

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.

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 .

These modifications are in line with applicable regulatory guidelines and, therefore, they are not reported as troubled debt restructurings.

Other than the loan modifications that are on nonaccrual status, the Company is accruing and recognizing interest income on these modifications during the payment deferral period.

Management has identified certain structured finance credits for alternative energy projects in which a substantial cash collateral account has been established to mitigate credit risk.

Due to the nature of the transactions and significant cash collateral positions, these credits are evaluated individually.

The balance of these pass rated cash collateral loans totaled $ 153.0 million and $ 120.7 million at December 31, 2022 and at September 30, 2022, respectively.

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

15 unchanged sentences

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, 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 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.

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 electronic return originator ("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.

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 $ 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 outstanding balances of consumer finance loans and tax services loans were $ 186.9 million and $ 30.4 million at December 31, 2022, respectively, and $ 169.7 million and $ 9.1 million at September 30, 2022, 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 June 30, 2022 2022 2021 2020 2019 2018 Prior

At December 31, 2022 2023 2022 2021 2020 2019 Prior

Pass $ 232,029 $ 334,377 $ 155,092 $ 103,243 $ 28,013 $ 33,853 $ — $ 886,607

14 unchanged sentences

Substandard — — — — — — 13,036 13,036

Doubtful — — — — — — 20 20

Total — — — — — — 338,594 338,594

17 unchanged sentences

Substandard — — 66 6,943 8,494 10,207 — 25,710

Doubtful — 23 314 — — — — 337

Total 4,346 196,049 35,864 65,947 21,459 33,419 — 357,084

55 unchanged sentences

Pass 5,886 13,607 26,040 20,458 23,098 40,782 — 129,871

Watch — 17,404 3,409 451 — — — 21,264

Substandard — 9,538 — — — 20,000 — 29,538

2 unchanged sentences

Pass — — — — — — 294,350 294,350

Total — — — — — — 419,926 419,926

Community banking

Pass — — 4,159 — 5,683 472 — 10,314

Watch — 10,134 — 10,854 6,133 — — 27,121

Special Mention — — — — — — 32,500 32,500

Substandard — 119 49,449 50,626 13,933 6,110 — 120,237

Doubtful — 122 — 5,422 — — — 5,544

Total — — — — — — 326,850 326,850

7 unchanged sentences

Past due loans and leases were as follows:

At June 30, 2022

Accruing and Nonaccruing Loans and Leases Nonperforming Loans and Leases

(Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due > 89 Days Past Due Total Past Due Current Total Loans and Leases Receivable > 89 Days Past Due and Accruing Nonaccrual Balance Total

(Dollars in thousands) Accruing and Nonaccruing Loans and Leases Nonperforming Loans and Leases

At December 31, 2022 30-59 Days Past Due 60-89 Days Past Due > 89 Days Past Due Total Past Due Current Total Loans and Leases Receivable > 89 Days Past Due and Accruing Nonaccrual Balance Total

Loans held for sale $ — $ — $ — $ — $ 17,148 $ 17,148 $ — $ — $ —

14 unchanged sentences

Total loans and leases $ 22,731 $ 14,262 $ 19,773 $ 56,766 $ 3,464,448 $ 3,521,214 $ 15,774 $ 25,077 $ 40,851

At September 30, 2021

Accruing and Nonaccruing Loans and Leases Nonperforming Loans and Leases

(Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due > 89 Days Past Due Total Past Due Current Total Loans and Leases Receivable > 89 Days Past Due and Accruing Nonaccrual Balance Total

(Dollars in thousands) Accruing and Nonaccruing Loans and Leases Nonperforming Loans and Leases

At September 30, 2022 30-59 Days Past Due 60-89 Days Past Due > 89 Days Past Due Total Past Due Current Total Loans and Leases Receivable > 89 Days Past Due and Accruing Nonaccrual Balance Total

Loans held for sale $ — $ — $ — $ — $ 21,071 $ 21,071 $ — $ — $ —

12 unchanged sentences

Warehouse finance — — — — 326,850 326,850 — — —

Community banking — — — — 199,132 199,132 — 14,915 14,915

Total loans and leases held for investment 28,203 8,817 19,534 56,554 3,472,726 3,529,280 15,808 13,375 29,183

Total loans and leases $ 28,203 $ 8,817 $ 19,534 $ 56,554 $ 3,493,797 $ 3,550,351 $ 15,808 $ 13,375 $ 29,183

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

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

Amortized Cost Basis

Term Loans and Leases by Origination Year Revolving Loans and Leases Total Nonaccrual with No ACL

(Dollars in thousands) 2022 2021 2020 2019 2018 Prior

(Dollars in thousands) Term Loans and Leases by Origination Year Revolving Loans and Leases Total Nonaccrual with No ACL

At December 31, 2022 2023 2022 2021 2020 2019 Prior

Term lending $ — $ 1,454 $ 1,783 $ 1,627 $ 3,691 $ 139 $ — $ 8,694 $ 2,847

5 unchanged sentences

Total nonaccrual loans and leases $ — $ 1,454 $ 2,587 $ 3,966 $ 5,427 $ 575 $ 11,068 $ 25,077 $ 4,711

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

Term Loans and Leases by Origination Year Revolving Loans and Leases Total

(Dollars in thousands) 2022 2021 2020 2019 2018 Prior

(Dollars in thousands) Term Loans and Leases by Origination Year Revolving Loans and Leases Total Nonaccrual with No ACL

At September 30, 2022 2022 2021 2020 2019 2018 Prior

Term lending $ 251 $ 1,110 $ 1,964 $ 989 $ 3,096 $ 166 $ — $ 7,576 $ 2,885

Asset based lending — — — — — — 29 29 —

Factoring — — — — — — 569 569 550

Lease financing 977 310 2,442 13 8 — — 3,750 —

Insurance premium finance 407 391 5 — — — — 803

SBA/USDA — — 1,199 — — 252 — 1,451 1,199

Commercial finance 1,228 1,420 5,605 1,002 3,104 418 598 13,375 4,634

Total nonaccrual loans and leases $ 1,228 $ 1,420 $ 5,605 $ 1,002 $ 3,104 $ 418 $ 598 $ 13,375 $ 4,634

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

Amortized Cost Basis

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

At December 31, 2022 2023 2022 2021 2020 2019 Prior

Term lending $ — $ 358 $ 6,136 $ 472 $ 170 $ 44 $ — $ 7,180

Lease financing — 2,754 75 126 40 21 — 3,016

Insurance premium finance — 3,073 7 5 — — — 3,085

Commercial finance — 6,185 6,218 603 210 65 — 13,281

Consumer credit products — 1,816 535 29 44 — 5 2,429

2 unchanged sentences

Total 90 days or more delinquent and accruing $ — $ 8,001 $ 6,753 $ 632 $ 254 $ 65 $ 69 $ 15,774

Amortized Cost Basis

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

At September 30, 2022 2022 2021 2020 2019 2018 Prior

Term lending $ 207 $ 720 $ 716 $ 130 $ 70 $ 192 $ — $ 2,035

Asset based lending — — — — — — 39 39

Lease financing 8 158 98 131 45 — — 440

Insurance premium finance 1,513 110 5 — — — — 1,628

Commercial finance 1,728 988 819 261 115 192 39 4,142

Consumer credit products 2,123 481 42 23 — — — 2,669

Other consumer finance — 124 — — — — — 124

Consumer finance 2,123 605 42 23 — — — 2,793

Tax services 8,873 — — — — — — 8,873

Total 90 days or more delinquent and accruing $ 12,724 $ 1,593 $ 861 $ 284 $ 115 $ 192 $ 39 $ 15,808

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

When analysis of borrower or lessee operating results and financial condition indicates that underlying cash flows of the borrower’s business are not adequate to meet its debt service requirements, the loan or lease is evaluated for impairment.

Often, this is associated with a delay or shortfall in scheduled payments, as described above.

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

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

Three Months Ended December 31,

(Dollars in thousands) 2022 2021

5 unchanged sentences

Commercial finance 18,819 33,429

Community banking — 19,801 — 16,144

Total loans and leases $ 18,819 $ 33,429

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 recognized interest income on the Company's nonaccrual loans and leases for the three months ended December 31, 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 $ 0.5 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.

No loans were modified in a TDR during the three months ended December 31, 2022.

There were $ 10.1 million of commercial finance loans and $ 0.1 million of consumer finance loans that were modified in a TDR during the three months ended December 31, 2021, all of which were modified to extend the term of the loan.

During the three months ended December 31, 2022, the Company had $ 0.1 million of commercial finance loans that were modified in a TDR within the previous 12 months and for which there was a payment default.

During the three months ended December 31, 2021, the Company had $ 2.3 million of commercial finance loans and $ 0.5 million of consumer finance 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 three months ended December 31, 2022 and December 31, 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 June 30, Nine Months Ended June 30,

Three Months Ended December 31,

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

17 unchanged sentences

(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 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.

(2) Excluded from the computation of diluted earnings per share for the three months ended December 31, 2022 and 2021, respectively, were 411,794 and 477,488 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) June 30, 2022 September 30, 2021

(Dollars in thousands) December 31, 2022 September 30, 2022

Computers and IT networking equipment $ 20,176 $ 21,669

Motor vehicles and other 110,196 107,648

Office furniture and equipment 57,228 48,828

Other furniture and equipment 58,624 34,254

Solar panels and equipment 141,759 133,765

3 unchanged sentences

Net book value $ 231,129 $ 204,371

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

Future minimum lease payments expected to be received for operating leases at December 31, 2022 were as follows:

(Dollars in thousands)

1 unchanged sentence

Thereafter 10,930

Total undiscounted future minimum lease payments receivable for operating leases $ 122,237

Total $ 122,762

GOODWILL AND INTANGIBLE ASSETS

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.

Goodwill is assessed for impairment at least annually or more often if conditions indicate a possible impairment.

The assessment is done at a reporting unit level, which is one level below the operating segments.

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

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

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

The recorded goodwill is a result of multiple business combinations that occurred from 2015 to 2018.

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

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

(Dollars in thousands) Trademark (1)

Non-Compete (2)

Customer Relationships (3)

Non-Compete Customer Relationships (2)

All Others (3)

1 unchanged sentence

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

Acquisitions during the period — — — 1 1

Amortization during the period ( 351 ) — ( 776 ) ( 131 ) ( 1,258 )

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

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

At December 31, 2022 $ 8,254 $ — $ 11,619 $ 4,560 $ 24,433

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

1 unchanged sentence

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

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

At December 31, 2022 $ 8,254 $ — $ 11,619 $ 4,560 $ 24,433

At September 30, 2021 $ 9,823 $ 40 $ 17,868 $ 5,417 $ 33,148

1 unchanged sentence

Amortization during the period ( 263 ) ( 39 ) ( 1,054 ) ( 132 ) ( 1,488 )

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

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

At December 31, 2021 $ 9,560 $ 1 $ 16,814 $ 5,286 $ 31,661

Gross carrying amount $ 14,624 $ 2,481 $ 82,088 $ 10,142 $ 109,335

1 unchanged sentence

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

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

At December 31, 2021 $ 9,560 $ 1 $ 16,814 $ 5,286 $ 31,661

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

1 unchanged sentence

(2) Book amortization period of 10 - 30 years.

Amortized using the straight line method.

(3) Book amortization period of 10 - 30 years.

Amortized using the accelerated method.

2 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 three months of fiscal 2022 and subsequent fiscal years was as follows:

Estimated amortization expense of intangible assets in the remaining nine months of fiscal 2023 and subsequent fiscal years at December 31, 2022 was as follows:

(Dollars in thousands)

2 unchanged sentences

Total anticipated intangible amortization $ 24,433

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 nine months ended June 30, 2022 and 2021.

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

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

Intangible impairment 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 $ 31.0 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:

Operating lease ROU assets, included in other assets , were $ 29.3 million and $ 32.7 million at December 31, 2022 and 2021, respectively.

Operating lease liabilities, included in accrued expenses and other liabilities , were $ 31.2 million and $ 34.5 million at December 31, 2022 and 2021, respectively.

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

(Dollars in thousands)

4 unchanged sentences

Total operating lease liabilities $ 31,184

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

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

Weighted-average discount rate 2.36 %

1 unchanged sentence

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

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

Three Months Ended December 31,

(Dollars in thousands) 2022 2021

1 unchanged sentence

Short-term and variable lease cost 42 35

ROU asset impairment 670 — 670 224

Sublease income ( 333 ) ( 176 )

2 unchanged sentences

Repurchase of Common Stock

The Company's Board of Directors authorized the November 20, 2019 share repurchase program to repurchase up to 7,500,000 shares of the Company's outstanding common stock.

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

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.

The Company's Board of Directors authorized the September 3, 2021 share repurchase program to repurchase up to 6,000,000 shares of the Company's outstanding common stock.

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

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.

During the three months ended December 31, 2022, and 2021, the Company repurchased 653,994 and 1,711,501 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 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.

As of December 31, 2022, 3,640,983 shares of common stock remained available for repurchase.

For the three months ended December 31, 2022, and 2021, the Company also repurchased 57,291 and 61,172 shares, or $ 2.0 million and $ 3.4 million of common stock, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock.

Retirement of Treasury Stock

The Company accounts for the retirement of repurchased shares, including treasury stock, using the par value method under which the repurchase price is charged to paid-in capital up to the amount of the original proceeds of those shares.

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

The Company retired zero shares of common stock held in treasury during the three months ended December 31, 2022 and 2021, respectively.

STOCK COMPENSATION

The Company maintains the Meta Financial Group, Inc.

The Company maintains the Pathward Financial, Inc.

2002 Omnibus Incentive Plan, as amended and restated (the "2002 Omnibus Incentive Plan"), which, among other things, provides for the awarding of stock options, nonvested (restricted) shares, and performance share units ("PSUs") to certain officers and directors of the Company.

3 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 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.

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

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

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

4 unchanged sentences

Forfeited or expired ( 1,017 ) 41.82

Nonvested shares outstanding, June 30, 2022

Nonvested shares outstanding, December 31, 2022

427,508 $ 37.32

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

Performance share units outstanding, September 30, 2022

1 unchanged sentence

Forfeited or expired — —

Performance share units outstanding, June 30, 2022

Performance share units outstanding, December 31, 2022

155,804 $ 41.20

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

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.

At December 31, 2022, stock-based compensation expense not yet recognized in income totaled $ 10.9 million, which is expected to be recognized over a weighted average remaining period of 1.73 years.

The Company recorded an income tax expense of $ 6.6 million for the three months ended December 31, 2022, resulting in an effective tax rate of 18.79 %, compared to an income tax expense of $ 14.3 million, or an effective tax rate of 18.89 %, for the three months ended December 31, 2021.

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

statutory rate of 21% primarily because of the anticipated effect of investment tax credits during fiscal year 2023.

The Company’s effective tax rate in the future will depend in part on actual investment tax credits earned as part of its financing of solar energy projects.

The Company's effective tax rate in the future will depend in part on actual investment tax credits generated from qualified solar energy property.

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

Nine Months Ended June 30,

Three Months Ended December 31,

(Dollars in thousands) 2022 2021

4 unchanged sentences

Tax credit investments, net - federal ( 3,062 ) ( 5,670 )

Research tax credit ( 355 ) ( 323 )

IRC 162(m) nondeductible compensation 136 263

8 unchanged sentences

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

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

Net interest income (1)

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

Noninterest income:

Refund transfer product fees 10,289 12,073 — — — — 10,289 12,073

Tax advance product fees (1)

( 20 ) 891 — — — — ( 20 ) 891

Payment card and deposit fees 24,673 29,203 — — — — 24,673 29,203

Other bank and deposit fees — — 252 334 10 4 262 338

Rental income (1)

— 6 11,890 9,970 192 — 12,082 9,976

Net gain realized on investment securities (1)

— — — — 198 — 198 —

Gain (loss) on sale of other (1)

— — 1,239 5,982 — ( 27 ) 1,239 5,955

Other income (1)

1,284 1,056 2,479 1,702 1,508 1,259 5,271 4,017

Total noninterest income 36,226 43,229 15,860 17,988 1,908 1,236 53,994 62,453

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

Nine Months Ended June 30,

Three Months Ended December 31, 2022 2021 2022 2021 2022 2021 2022 2021

Net interest income (1)

2 unchanged sentences

Refund transfer product fees 677 579 — — — — 677 579

Tax advance product fees (1)

Refund advance fee income (1)

617 1,233 — — — — 617 1,233

Payment card and deposit fees 76,075 81,641 — — — — 76,075 81,641

Other bank and deposit fees — — 728 694 22 15 750 709

Card and deposit fees 37,452 25,132 261 231 5 6 37,718 25,369

Rental income (1)

— — 12,515 11,077 193 — 12,708 11,077

Net gain realized on investment securities (1)

Gain (loss) on sale of securities (1)

— — — — — 137 — 137

16 unchanged sentences

Refund Transfer Product Fees.

Refund transfer fees are specific to the tax products offered by Refund Advantage and EPS.

These fees are for products, services such as payment processing, and product referral commissions.

Software partner fees paid and/or incurred are recorded on a net basis.

The Company’s obligation for product fees and commissions is satisfied at the time of the product delivery and obligation for payment processing is satisfied at the time of processing.

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

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.

Refund transfer fees are specific to the Banking as a Service ("BaaS") business line and reflect product fees offered by the Company through third-party tax preparers and tax preparation software providers where the Company acts as the partnering financial institution.

A refund transfer allows a taxpayer to pay tax preparation and filing fees directly from their federal or state government tax refund, with the remainder of the refund being disbursed in accordance with the terms and conditions of the taxpayer agreement, which may include satisfaction of other disbursement obligations before going directly to the taxpayer via check, direct deposit, or prepaid card.

Refund transfer fees are recognized by the Company immediately after the taxpayer's refund has been disbursed in accordance with the contract and is based on standalone pricing included within the terms and conditions.

Certain expenses to tax preparation software providers are netted with refund transfer fee income as the Company is considered the agent in these contractual relationships.

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

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

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

The Company earns these fees based upon the underlying terms and conditions with each cardholder over the contract term.

Agreements with the Company’s cardholders are considered daily service contracts as they are not fixed in duration.

The Company’s obligation for card activation and product support fees is satisfied at the time of product delivery, while the obligation for processing and servicing is satisfied over the course of each month.

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

Card fee revenue also includes income from sponsorships, associations and networks, and interchange income.

Sponsorship income relates to fees charged to the Company’s ATM sponsorship partners, where the obligation is satisfied over the course of each month.

Association and network income reflect incentives, performance bonuses and rebates with MasterCard and Visa.

The obligation for such income is satisfied at the time when certain thresholds of transaction volume have been met.

Interchange income is generated by cardholder activity, and therefore the Company’s obligations are satisfied as activity occurs.

The transaction price for such activity is based on underlying rates and activity thresholds within the terms and conditions of the applicable agreements.

Card fee revenue also includes breakage revenue.

Breakage represents the estimated amount that will not be redeemed by the holder of unregistered, unused prepaid cards for goods or services.

Breakage revenue is recognized ratably over the expected customer usage period and is an estimate based on cardholder behavior and breakage rates.

Breakage is also impacted by escheatment laws.

Card fees are recorded within both the Consumer and Commercial reporting segments, the substantial majority of which is derived from the Company's payments divisions and reported in payments card and deposit fees.

Card fees not related to the Company's payments divisions are reported within other bank and deposit fees.

Bank and Deposit Fees.

Fees are earned on depository accounts for consumer and commercial customers and include fees for account services, overdraft services, and event-driven services (i.e.

returned checks, ATM surcharge, card replacement, and wire transfers).

The Company’s obligation for event-driven services is satisfied at the time of the event when the service is delivered, while its obligation for account services is satisfied over the course of each month.

The Company’s obligation for overdraft services is satisfied at the time of overdraft.

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

Bank and deposit fees are recorded within both the Consumer and Commercial reporting segments, the majority of which are derived from the Company's payments divisions.

Principal vs Agent.

The Consumer reporting segment includes principal/agent relationships.

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.

Card and Deposit Fees.

Card fees relate to the BaaS business line and consists of income from prepaid cards and merchant services, including interchange fees from prepaid cards processed through card association networks, merchant services and other card related services.

Interchange rates are generally set by card association networks based on transaction volume and other factors.

Since interchange fees are generated by cardholder activity, the Company recognizes the income as transactions occur.

Fee income for merchant services and other card related services reflect account management and transaction fees charged to merchants for processing card association network transactions.

The associated income is recognized as transactions occur or as services are performed.

For the Company's internally managed prepaid card programs, fees are based on standalone pricing within the terms and conditions of the cardholder agreement.

The Company is considered the principal of these relationships resulting in all fee income being presented on a gross basis within the Condensed Consolidated Statement of Operations.

For the Company's sponsorship prepaid card programs where a third-party is considered the Program Manager, the fees are based on standalone pricing within the terms and conditions of the Program Agreement.

For these relationships, the Company is considered the agent and certain expenses with the Program Manager, networks and associations are netted with card fee revenue.

All card fee income is included in the Consumer reporting segment.

Deposit fees relate to the BaaS and Commercial Finance business lines and consist of income from banking and deposit-related services, including account services, overdraft protection, and wire transfers.

Fee income for account services is recognized over the course of the month as the performance obligation is satisfied.

Fee income for overdraft protection and wire transfers is recognized point in time when such event occurs.

For BaaS, the fees for account services and overdraft protection are based on standalone pricing within the terms and conditions of the Program Agreement with the sponsorship partner.

For these relationships, the Company is considered the agent and certain expenses with the partner are netted with deposit fee revenue.

For Commercial Finance, fees for wire transfers are based on standalone pricing within the terms and conditions of the customer deposit agreement.

Bank and deposit fees for the BaaS and Commercial Finance business lines are included in the Consumer and Commercial reporting segments, respectively.

Also included within Card and Deposit Fees for the Consumer reporting segment are servicing fees the Company recognizes for custodial off-balance sheet deposits.

This fee income is for services the Bank performs to maintain records of cardholder funds placed at one or more third-party banks insured by the FDIC.

The servicing fee is typically reflective of the effective federal funds rate ("EFFR").

SEGMENT REPORTING

3 unchanged sentences

Consumer, Commercial, and Corporate Services/Other.

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.

The Corporate Services/Other segment also includes certain shared services as well as treasury related functions such as the investment portfolio, warehouse finance, wholesale deposits and borrowings.

The Company does not report indirect general and administrative expenses in the Consumer and Commercial segments.

The BaaS business line is reported in the Consumer segment.

The Commercial Finance business line is reported in the Commercial segment.

The Corporate Services/Other segment includes certain shared services as well as treasury related functions such as the investment portfolio, warehouse finance, wholesale deposits and borrowings.

The following tables present segment data for the Company:

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

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

Provision for credit losses ( 279 ) 4,507 ( 752 ) 870 ( 271 ) ( 765 ) ( 1,302 ) 4,612

Noninterest income 36,226 43,229 15,860 17,988 1,908 1,236 53,994 62,453

Noninterest expense 23,960 20,561 31,336 28,605 41,354 32,358 96,650 81,523

Income (loss) before income tax expense 35,758 41,294 32,078 33,363 ( 37,039 ) ( 29,864 ) 30,797 44,793

Total assets 373,019 319,911 3,457,004 3,104,083 2,898,155 3,627,818 6,728,178 7,051,812

Total goodwill 87,145 87,145 222,360 222,360 — — 309,505 309,505

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

Nine Months Ended June 30,

Three Months Ended December 31, 2022 2021 2022 2021 2022 2021 2022 2021

Net interest income $ 34,272 $ 26,110 $ 42,324 $ 45,087 $ 7,461 $ 416 $ 84,057 $ 71,613

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 June 30, 2022

At December 31, 2022

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

11 unchanged sentences

$ 7,822 $ — $ — $ —

(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.

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

(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.

Fair Value At September 30, 2021

At September 30, 2022

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

11 unchanged sentences

$ 7,212 $ — $ — $ —

(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.

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

(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.

Foreclosed Real Estate and Repossessed Assets.

Real estate properties and repossessed assets are initially recorded at the fair value less selling costs at the date of foreclosure, establishing a new cost basis.

The carrying amount represents the lower of the new cost basis or the fair value less selling costs of foreclosed assets that were measured at fair value subsequent to their initial classification as foreclosed assets.

Loans and Leases.

2 unchanged sentences

Fair value is determined by the fair value of the underlying collateral less estimated costs to sell.

The fair value of the collateral is determined based on internal estimates and/or assessments provided by third-party appraisers and the valuation relies on discount rates ranging from 4 % to 42 %.

The fair value of the collateral is determined based on the internal estimates and/or assessment provided by third-party appraisers and the valuation relies on discount rates ranging from 4 % to 35 %.

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 June 30, 2022

At December 31, 2022

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

1 unchanged sentence

Commercial finance $ 8,544 $ — $ — $ 8,544

Total loans and leases, net individually evaluated

for credit loss 2,172 — — 2,172

Total loans and leases, net individually evaluated for credit loss 8,544 — — 8,544

Foreclosed assets, net — — — —

Total $ 8,544 $ — $ — $ 8,544

Fair Value At September 30, 2021

At September 30, 2022

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

1 unchanged sentence

Commercial finance $ 1,575 $ — $ — $ 1,575

Community banking 9,371 — — 9,371

Total loans and leases, net individually evaluated

for credit loss 12,775 — — 12,775

Total loans and leases, net individually evaluated for credit loss 1,575 — — 1,575

Foreclosed assets, net 1 — — 1

2 unchanged sentences

(Dollars in thousands) Fair Value at

June 30, 2022

December 31, 2022

Fair Value at

2 unchanged sentences

Loans and leases, net individually evaluated for credit loss $ 8,544 $ 1,575 Market approach Appraised values (1)

Foreclosed assets, net $ 13 2,077 Market approach Appraised values (1)

(1) The Company generally relies on external appraisers to develop this information.

1 unchanged sentence

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 June 30, 2022 and September 30, 2021 based on relevant market information and information about financial instruments.

These fair value estimates were made at December 31, 2022 and September 30, 2022 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 June 30, 2022

At December 31, 2022

(Dollars in thousands) Carrying

17 unchanged sentences

Accrued interest payable 717 717 717 — —

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

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

19 unchanged sentences

Accrued interest payable 192 192 192 — —

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

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

SUBSEQUENT EVENTS

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.

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

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