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Item 1. Financial Statements

2023-08-08 compared with 2023-05-09 · 192 added, 146 removed, 1045 unchanged (24% of the section changed)

3 unchanged sentences

Condensed Consolidated Statements of Financial Condition

(Dollars in thousands, except per share data) March 31, 2023 September 30, 2022

(Dollars in thousands, except per share data) June 30, 2023 September 30, 2022

ASSETS (Unaudited) (Audited)

20 unchanged sentences

STOCKHOLDERS’ EQUITY

Preferred stock, 3,000,000 shares authorized, no shares issued, none outstanding at March 31, 2023 and September 30, 2022, respectively

Preferred stock, 3,000,000 shares authorized, no shares issued, none outstanding at June 30, 2023 and September 30, 2022, respectively

Common stock, $ 0.01 par value;

90,000,000 shares authorized, 27,205,406 and 28,878,177 shares issued, 27,055,727 and 28,788,124 shares outstanding at March 31, 2023 and September 30, 2022, respectively

90,000,000 shares authorized, 26,688,951 and 28,878,177 shares issued, 26,539,272 and 28,788,124 shares outstanding at June 30, 2023 and September 30, 2022, respectively

Common stock, Nonvoting, $ 0.01 par value;

3,000,000 shares authorized, no shares issued, none outstanding at March 31, 2023 and September 30, 2022, respectively

3,000,000 shares authorized, no shares issued, none outstanding at June 30, 2023 and September 30, 2022, respectively

Additional paid-in capital 625,825 617,403

1 unchanged sentence

Accumulated other comprehensive loss ( 207,896 ) ( 213,080 )

Treasury stock, at cost, 149,679 and 90,053 common shares at March 31, 2023 and September 30, 2022, respectively

Treasury stock, at cost, 149,679 and 90,053 common shares at June 30, 2023 and September 30, 2022, respectively

( 6,943 ) ( 4,835 )

7 unchanged sentences

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) 2023 2022 2023 2022

9 unchanged sentences

Net interest income 97,465 72,151 282,927 227,564

Provision for credit losses 36,763 32,302 46,539 32,488

Provision for (reversal of) credit losses 1,773 ( 1,302 ) 48,312 31,186

Net interest income after provision for credit losses 95,692 73,453 234,615 196,378

4 unchanged sentences

Rental income 13,980 12,082 39,628 34,534

Gain (loss) on sale of securities 82 260 82 397

Gain on sale of securities 9 198 91 595

Gain on sale of trademarks — — 10,000 50,000

17 unchanged sentences

Net income before noncontrolling interest 45,604 23,839 129,394 135,247

Net income (loss) attributable to noncontrolling interest 597 851 1,177 833

Net income attributable to noncontrolling interest 508 1,448 1,685 2,281

Net income attributable to parent $ 45,096 $ 22,391 $ 127,709 $ 132,966

6 unchanged sentences

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) 2023 2022 2023 2022

2 unchanged sentences

Change in net unrealized gain (loss) on debt securities ( 26,664 ) ( 81,841 ) 6,574 ( 184,614 )

Net loss (gain) realized on investment securities ( 82 ) ( 260 ) ( 82 ) ( 397 )

Net (gain) realized on investment securities ( 9 ) ( 198 ) ( 91 ) ( 595 )

( 26,673 ) ( 82,039 ) 6,483 ( 185,209 )

10 unchanged sentences

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

Three Months Ended March 31, 2023 Common

Three Months Ended June 30, 2023 Common

Stock Additional

7 unchanged sentences

Stockholders’

Balance, December 31, 2022 $ 282 $ 620,681 $ 246,891 $ ( 201,690 ) $ ( 6,824 ) $ 659,340 $ ( 207 ) $ 659,133

Balance, March 31, 2023 $ 271 $ 623,250 $ 245,046 $ ( 187,829 ) $ ( 6,943 ) $ 673,795 $ ( 551 ) $ 673,244

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

2 unchanged sentences

Stock compensation — 2,570 — — — 2,570 — 2,570

Total other comprehensive income — — — 13,861 — 13,861 — 13,861

Total other comprehensive (loss) — — — ( 20,067 ) — ( 20,067 ) — ( 20,067 )

Net income — — 45,096 — — 45,096 508 45,604

Net investment by (distribution to) noncontrolling interests — — — — — — ( 588 ) ( 588 )

Balance, March 31, 2023

Balance, June 30, 2023

$ 266 $ 625,825 $ 267,100 $ ( 207,896 ) $ ( 6,943 ) $ 678,352 $ ( 631 ) $ 677,721

Three Months Ended March 31, 2022

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

Three Months Ended June 30, 2022

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

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

Six Months Ended March 31, 2023 Common

Nine Months Ended June 30, 2023 Common

Stock Additional

17 unchanged sentences

Net investment by (distribution to) noncontrolling interests — — — — — — ( 2,286 ) ( 2,286 )

Balance, March 31, 2023

Balance, June 30, 2023

$ 266 $ 625,825 $ 267,100 $ ( 207,896 ) $ ( 6,943 ) $ 678,352 $ ( 631 ) $ 677,721

Six Months Ended March 31, 2022

Nine Months Ended June 30, 2022

Balance, September 30, 2021

2 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

3 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Six Months Ended March 31,

Nine Months Ended June 30,

(Dollars in thousands) 2023 2022

8 unchanged sentences

Net change in loans held for sale 5,456 12,568

Net realized (gain) on securities available for sale — ( 161 )

Net realized (gain) loss on loans held for sale ( 235 ) 3,933

2 unchanged sentences

Net realized (gain) on trademarks ( 10,000 ) ( 50,000 )

Net realized (gain) loss on other assets ( 82 ) ( 397 )

Net realized (gain) on other assets ( 91 ) ( 434 )

Impairment on rental equipment 24 —

Impairment of intangibles — 670

Net change in accrued interest receivable ( 4,353 ) ( 564 )

5 unchanged sentences

Purchases of securities available for sale ( 150,751 ) ( 689,515 )

Proceeds from sales of securities available for sale — 244,305

Proceeds from maturities of and principal collected on securities available for sale 127,071 264,808

13 unchanged sentences

Proceeds from sale of other assets — 2,925

Net cash provided by (used in) investing activities ( 131,072 ) ( 532,838 )

Net cash (used in) investing activities ( 620,974 ) ( 410,941 )

Cash flows from financing activities:

1 unchanged sentence

Net change in short-term borrowings 230,000 —

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

Principal payments on capital lease obligations — ( 75 )

12 unchanged sentences

Cash and cash equivalents at end of fiscal period $ 515,271 $ 157,260

Six Months Ended March 31,

Nine Months Ended June 30,

(Dollars in thousands) 2023 2022

6 unchanged sentences

Supplemental schedule of non-cash investing activities:

Purchases/sales of securities accrued, not settled

Trade Date Purchases - AFS 3,026 101,993

Held for sale to loans and leases 158 14,731

2 unchanged sentences

Rental equipment to loan and leases 311,278 233,634

Recognition of operating lease ROU assets, net of measurements — 389

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 six months ended March 31, 2023 are not necessarily indicative of the results expected for the fiscal year ending September 30, 2023.

The results of the three and nine months ended June 30, 2023 are not necessarily indicative of the results expected for the fiscal year ending September 30, 2023.

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

1 unchanged sentence

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ADOPTED ACCOUNTING STANDARDS UPDATES ("ASU")

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.

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, except for the following:

PRINCIPLES OF CONSOLIDATION

The Consolidated Financial Statements include the accounts of Pathward Financial, Inc.

("Pathward Financial" or the “Company” or "us"), a registered bank holding company located in Sioux Falls, South Dakota, and its wholly-owned subsidiaries.

The Company's subsidiaries include Pathward ® , National Association ("Pathward ® , N.A." or "Pathward" or "the “Bank”), a national bank whose primary federal regulator is the Office of the Comptroller of the Currency (the "OCC"), and Pathward Venture Capital, LLC, a wholly-owned service corporation subsidiary of Pathward, N.A.

which invests in companies in the financial services industry.

All significant intercompany balances and transactions have been eliminated.

The Company also owns 100% of First Midwest Financial Capital Trust I (the “Trust”), which was formed in July 2001 for the purpose of issuing trust preferred securities, and Crestmark Capital Trust I, which was acquired from the Crestmark Acquisition in August 2018.

The Trust and Crestmark Capital Trust I are not included in the Consolidated Financial Statements of the Company.

In addition, the Company is a variable interest holder in certain entities in which the equity holders do not have the characteristics of a controlling financial interest or where the entity does not have enough equity at risk to finance its activities without additional subordinated financial support (referred to as variable interest entities or "VIEs").

The Company's variable interest arises from contractual ownership or other monetary interests that change with fluctuations in the VIE's net asset value.

The primary beneficiary is the entity which has both:

(1) the power to direct the activities of the VIE that most significantly impacts the VIE's economic performance, and (2) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.

To determine whether or not a variable interest the Company holds could potentially be significant to the VIE, the Company considers both qualitative and quantitative factors regarding the nature, size and form of the Company's involvement with the VIE.

Further, the Company assesses whether or not the Company is the primary beneficiary of a VIE on an ongoing basis.

If the determination is made that the Company is the primary beneficiary, then that entity is included in the Consolidated Financial Statements.

Noncontrolling interests represent the portion of net income and equity attributable to third-party owners of consolidated subsidiaries that are not wholly-owned by Pathward Financial.

All of the Company's noncontrolling interests relate to the Company's Commercial Finance business line.

Variable Interest Entities

In the normal course of business, the Company enters into off-balance sheet transactions with special purpose entities ("SPEs"), which can be structured as corporations, trusts, limited liability companies, or partnerships and are established for a limited purpose.

Currently, the Company utilizes a SPE facility for certain term lending products within the Company's Commercial Finance business line.

The Company participated in the structuring of the SPE, has a minority ownership interest in the SPE, and acts as servicer for the SPE in exchange for a servicing fee.

Pathward is not the primary beneficiary of the SPE as our risk of loss or right to benefits from the SPE are not significant.

As of June 30, 2023, there are $ 9.9 million of commercial term loans held at the SPE, and the Company’s equity investment in the SPE is $ 0.9 million.

The Company’s maximum exposure to loss from the SPE is limited to its equity investment.

As of June 30, 2023, there are $ 3.0 million of commercial term loans classified as held for sale related to this VIE.

Additional information on loans transferred during the period is included in Note 5.

Loans and Leases, Net.

Loan Servicing and Transfers of Financial Assets

Transfers of loans, portions of loans meeting the definition of a participating interest, and other financial assets are accounted for as sales on the transaction settlement date when control has been surrendered.

Control over transferred assets is deemed to be surrendered when (1) the assets have been legally isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of such right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through a repurchase agreement or other means.

Upon sale, the loans or other financial assets are derecognized from the Company’s Consolidated Statements of Financial Condition.

If the transfer does not satisfy the aforementioned control criteria, the transaction is recorded as a secured borrowing with the loans or other financial assets remaining on the Company’s Consolidated Statements of Financial Condition and proceeds recognized as a liability.

The Company sells loan participations, generally without recourse, in both the commercial and consumer segments.

The Company also sells commercial Small Business Administration ("SBA") and United States Department of Agriculture ("USDA") loans to third parties, generally without recourse.

The Bank generally retains the right to service the sold loans for a fee.

If the fee is determined commensurate and customary with market terms, no servicing asset or liability is recorded.

Any fee that is above or below market terms results in a servicing asset or liability and is included within Other Assets on the Consolidated Statements of Financial Condition.

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:

10 unchanged sentences

Debt Securities AFS

At March 31, 2023

At June 30, 2023

Corporate securities $ 25,000 $ — $ ( 6,250 ) $ 18,750

14 unchanged sentences

Debt Securities HTM

At March 31, 2023

At June 30, 2023

Non-bank qualified obligations of states and political subdivisions $ 35,450 $ — $ ( 3,822 ) $ 31,628

12 unchanged sentences

Debt Securities AFS

At March 31, 2023

At June 30, 2023

Corporate securities $ — $ — $ 18,750 $ ( 6,250 ) $ 18,750 $ ( 6,250 )

14 unchanged sentences

Debt Securities HTM

At March 31, 2023

At June 30, 2023

Non-bank qualified obligations of states and political subdivisions $ — $ — $ 31,628 $ ( 3,822 ) $ 31,628 $ ( 3,822 )

5 unchanged sentences

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

At March 31, 2023, there were 192 securities AFS in an unrealized loss position.

All of the mortgage-backed securities ("MBS") in an unrealized loss position at March 31, 2023 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.

At June 30, 2023, there were 203 securities AFS in an unrealized loss position.

All of the mortgage-backed securities ("MBS") in an unrealized loss position at June 30, 2023 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 adverse market conditions and/or changes in 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, 2023, there was no allowance for credit losses ("ACL") for debt securities AFS.

At June 30, 2023, 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.

2 unchanged sentences

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

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.

The expected maturities of certain 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 March 31, 2023 At September 30, 2022

(Dollars in thousands) At June 30, 2023 At September 30, 2022

Securities AFS at Fair Value Amortized Cost Fair

12 unchanged sentences

Total securities HTM, at cost $ 37,725 $ 33,670 $ 41,682 $ 38,171

Equity Securities

The Company held $ 3.5 million at March 31, 2023 and $ 2.9 million at September 30, 2022 in marketable equity securities.

The Company recognized none and $ 3.8 million in unrealized losses on marketable equity securities during the six months ended March 31, 2023 and 2022, 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, 2023 and 2022.

No such securities were sold during the six months ended March 31, 2023.

Non-marketable equity securities with a readily determinable fair value totaled $ 7.7 million at March 31, 2023 and $ 7.2 million at September 30, 2022.

The Company recognized $ 0.1 million in unrealized losses and $ 0.3 million in unrealized gains during the six months ended March 31, 2023 and 2022, respectively.

No such securities were sold during the six months ended March 31, 2023.

Non-marketable equity securities without readily determinable fair value totaled $ 17.7 million at March 31, 2023 and $ 18.2 million at September 30, 2022.

No such securities were sold during the six months ended March 31, 2023 .

Federal Reserve Bank ("FRB") Stock.

1 unchanged sentence

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, 2023 and September 30, 2022.

FRB of Minneapolis stock held by the Bank totaled $ 19.7 million at June 30, 2023 and September 30, 2022.

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

5 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 $ 9.7 million and $ 9.1 million at March 31, 2023 and at September 30, 2022, respectively.

The carrying value of the stock held at the FHLB was $ 11.2 million and $ 9.1 million at June 30, 2023 and at September 30, 2022, respectively.

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.

Therefore, FRB and FHLB stocks are less liquid than other marketable equity securities, and the fair value approximates cost.

Equity Security Impairment

Equity Securities.

The Company held $ 3.5 million at June 30, 2023 and $ 2.9 million at September 30, 2022 in marketable equity securities.

The Company recognized $ 0.2 million and $ 3.8 million in unrealized losses on marketable equity securities during the nine months ended June 30, 2023 and 2022, 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, 2023 and 2022.

No such securities were sold during the nine months ended June 30, 2023.

Non-marketable equity securities with a readily determinable fair value totaled $ 8.5 million at June 30, 2023 and $ 7.2 million at September 30, 2022.

The Company recognized $ 0.1 million in unrealized losses and $ 0.6 million in unrealized gains during the nine months ended June 30, 2023 and 2022, respectively.

No such securities were sold during the nine months ended June 30, 2023.

Non-marketable equity securities without readily determinable fair value totaled $ 15.8 million at June 30, 2023 and $ 18.2 million at September 30, 2022.

There were two such securities were sold during the nine months ended June 30, 2023 .

Equity Securities Impairment.

The Company evaluates impairment for investments held at cost on at least an annual basis based on the ultimate recoverability of the par value.

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 $ 0.5 million and no impairment for such investments for the six months ended March 31, 2023 and 2022, respectively.

The Company recognized $ 3.2 million and no impairment for such investments for the nine months ended June 30, 2023 and 2022, respectively.

LOANS AND LEASES, NET

Loans and leases consist of the following:

(Dollars in thousands) March 31, 2023 September 30, 2022

(Dollars in thousands) June 30, 2023 September 30, 2022

Term lending $ 1,253,841 $ 1,090,289

16 unchanged sentences

Total loans and leases, net $ 3,990,983 $ 3,490,358

During the six months ended March 31, 2023 and 2022, the Company originated $ 608.6 million and $ 555.4 million of consumer finance and SBA/USDA as held for sale, respectively.

The Company sold held for sale loans resulting in proceeds of $ 604.4 million and gain on sale of $ 0.1 million during the six months ended March 31, 2023.

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.

During the nine months ended June 30, 2023 and 2022, the Company originated $ 941.5 million and $ 769.7 million of consumer finance and SBA/USDA as held for sale, respectively.

The Company sold held for sale loans resulting in proceeds of $ 870.1 million and gain on sale of $ 0.2 million during the nine months ended June 30, 2023.

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.

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) 2023 2022 2023 2022

14 unchanged sentences

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

(Dollars in thousands) March 31, 2023 September 30, 2022

(Dollars in thousands) June 30, 2023 September 30, 2022

Carrying amount $ 212,275 $ 216,880

3 unchanged sentences

Total net investment in direct financing and sales-type leases $ 202,156 $ 210,987

Undiscounted future minimum lease payments receivable for direct financing and sales-type leases, and a reconciliation to the carrying amount recorded at March 31, 2023 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, 2023 were as follows:

(Dollars in thousands)

4 unchanged sentences

Total carrying amount of direct financing and sales-type leases $ 212,275

The Company did not record any contingent rental income from direct financing and sales-type leases in the six months ended March 31, 2023.

The Company did not record any contingent rental income from direct financing and sales-type leases in the nine months ended June 30, 2023.

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, other factors have been affecting the economic environment in 2022 and 2023 including geopolitical conflict, supply chain disruptions, inflation, rising interest rates, and recent bank failures brought on by, among other things, rising interest rates, deposit outflows and liquidity crises.

Although macroeconomic conditions and markets have improved since the beginning of 2021, other factors have been affecting the economic environment in 2022 and 2023 including geopolitical conflict, supply chain disruptions, inflation, rising interest rates, and bank failures brought on by, among other things, rising interest rates, deposit outflows and liquidity crises.

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, 2023

Three Months Ended June 30, 2023

(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 March 31, 2022

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

Charge-offs Recoveries Ending Balance

Three Months Ended June 30, 2022

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

Allowance for credit losses:

12 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.

(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, 2023

Nine Months Ended June 30, 2023

(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.

Six Months Ended March 31, 2022

Nine Months Ended June 30, 2022

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

20 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, 2023 At September 30, 2022

(Dollars in thousands) At June 30, 2023 At September 30, 2022

Term lending $ 4,767 $ 2,885

Asset based lending 14,414 —

Factoring — 550

6 unchanged sentences

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 $ 70.8 million and $ 120.7 million at March 31, 2023 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:

The balance of these pass rated cash collateral loans totaled $ 68.2 million and $ 120.7 million at June 30, 2023 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 OCC, to be of lesser quality as “substandard,” “doubtful” or “loss.” The loan classification and risk rating definitions are as follows:

Pass - A pass asset is of sufficient quality in terms of repayment, collateral and management to preclude a special mention or an adverse rating.

20 unchanged sentences

The Company has various portfolios of consumer finance and tax services loans that present unique risks that are statistically managed.

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 $ 148.6 million and $ 61.6 million at March 31, 2023, respectively, and $ 169.7 million and $ 9.1 million at September 30, 2022, respectively.

Due to the unique risks associated with these portfolios, the Company monitors other credit quality indicators in its evaluation of the appropriateness of the ACL 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 $ 200.1 million and $ 47.2 million at June 30, 2023, 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 March 31, 2023 2023 2022 2021 2020 2019 Prior

At June 30, 2023 2023 2022 2021 2020 2019 Prior

Pass $ 313,587 $ 201,918 $ 119,763 $ 82,834 $ 18,380 $ 203,059 $ — $ 939,541

38 unchanged sentences

Watch 1,740 — — — — — — 1,740

Special mention — — 18,000 — — — — 18,000

Substandard 2,789 464 8,379 — — 259 — 11,891

66 unchanged sentences

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

At March 31, 2023 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

At June 30, 2023 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 $ 10 $ — $ — $ 10 $ 87,341 $ 87,351 $ — $ — $ —

35 unchanged sentences

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

At March 31, 2023 2023 2022 2021 2020 2019 Prior

At June 30, 2023 2023 2022 2021 2020 2019 Prior

Term lending $ 103 $ 3,819 $ 2,245 $ 2,017 $ 3,380 $ 1,643 $ — $ 13,207 $ —

18 unchanged sentences

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

At March 31, 2023 2023 2022 2021 2020 2019 Prior

At June 30, 2023 2023 2022 2021 2020 2019 Prior

Term lending $ 128 $ 917 $ 658 $ 107 $ 52 $ — $ — $ 1,862

Asset based lending — — — — — — 218 218

Lease financing — 479 969 152 20 7 — 1,627

Insurance premium finance 1,149 1,241 4 — — — — 2,394

SBA/USDA — 349 — — — — — 349

Other commercial finance — — — — — 92 — 92

19 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) 2023 2022 2023 2022

6 unchanged sentences

Total loans and leases $ 32,910 $ 21,822 $ 24,102 $ 28,736

The recognized interest income on the Company's nonaccrual loans and leases for the three and six months ended March 31, 2023 and 2022 was not significant.

The recognized interest income on the Company's nonaccrual loans and leases for the three and nine months ended June 30, 2023 and 2022 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.

No loans were modified in a TDR during the three months ended March 31, 2023.

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.

During the six months ended March 31, 2023, there were no loans that were modified in a TDR.

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

During the three months ended March 31, 2023, there was an immaterial amount 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 March 31, 2022, the Company had $ 0.3 million of commercial finance loans and $ 0.3 million of consumer finance loans that were modified in a TDR with the previous 12 months and for which there was a payment default.

During the six months ended March 31, 2023, 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 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.

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, 2023 and March 31, 2022.

No loans were modified in a TDR during the three months ended June 30, 2023.

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.

During the nine months ended June 30, 2023, there were no loans that were modified in a TDR.

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

During the three months ended June 30, 2023, there was an immaterial amount 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 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 with the previous 12 months and for which there was a payment default.

During the nine months ended June 30, 2023, the Company had $ 0.4 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 nine months ended June 30, 2022, the Company had $ 3.9 million of commercial finance loans and $ 1.1 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 nine months ended June 30, 2023 and June 30, 2022.

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) 2023 2022 2023 2022

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 March 31, 2023 and 2022, respectively, were 422,461 and 491,621 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, 2023 and 2022, respectively, were 417,012 and 484,457 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, 2023 and 2022, respectively, were 409,666 and 493,800 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, 2023 and 2022, respectively, were 414,539 and 487,538 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, 2023 September 30, 2022

(Dollars in thousands) June 30, 2023 September 30, 2022

Computers and IT networking equipment $ 25,681 $ 21,669

6 unchanged sentences

Net book value $ 224,212 $ 204,371

During the quarter, certain solar panels and equipment assets had a change in depreciable life that resulted in additional depreciation expense of $ 4.8 million occurring during the three-month period ended March 31, 2023.

The assets impacted are now carried at their residual value and will not be subject to depreciation going forward.

Future minimum lease payments expected to be received for operating leases at March 31, 2023 were as follows:

Future minimum lease payments expected to be received for operating leases at June 30, 2023 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, 2023.

The Company held a total of $ 309.5 million of goodwill at June 30, 2023.

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 six months ended March 31, 2023.

There have been no changes to the carrying amount of goodwill during the nine months ended June 30, 2023.

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

5 unchanged sentences

Amortization during the period ( 868 ) — ( 2,595 ) ( 398 ) ( 3,861 )

At March 31, 2023 $ 7,996 $ — $ 10,576 $ 4,426 $ 22,998

At June 30, 2023 $ 7,737 $ — $ 9,800 $ 4,293 $ 21,830

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, 2023 $ 7,996 $ — $ 10,576 $ 4,426 $ 22,998

At June 30, 2023 $ 7,737 $ — $ 9,800 $ 4,293 $ 21,830

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

2 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

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

5 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 2023 and subsequent fiscal years at March 31, 2023 was as follows:

Estimated amortization expense of intangible assets in the remaining three months of fiscal 2023 and subsequent fiscal years at June 30, 2023 was as follows:

(Dollars in thousands)

2 unchanged sentences

Total anticipated intangible amortization $ 21,830

There were no impairments to intangible assets during the six months ended March 31, 2023 and 2022.

There were no impairments to intangible assets during the nine months ended June 30, 2023 and 2022.

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 $ 28.5 million and $ 31.8 million at March 31, 2023 and 2022, respectively.

Operating lease liabilities, included in accrued expenses and other liabilities , were $ 30.4 million and $ 33.6 million at March 31, 2023 and 2022, respectively.

Undiscounted future minimum operating lease payments and a reconciliation to the amount recorded as operating lease liabilities at March 31, 2023 were as follows:

Operating lease right-of-use ("ROU") assets, included in other assets , were $ 27.7 million and $ 31.0 million at June 30, 2023 and 2022, respectively.

Operating lease liabilities, included in accrued expenses and other liabilities , were $ 29.6 million and $ 32.9 million at June 30, 2023 and 2022, respectively.

Undiscounted future minimum operating lease payments and a reconciliation to the amount recorded as operating lease liabilities at June 30, 2023 were as follows:

(Dollars in thousands)

4 unchanged sentences

Total operating lease liabilities $ 29,645

The weighted-average discount rate and remaining lease term for operating leases at March 31, 2023 were as follows:

The weighted-average discount rate and remaining lease term for operating leases at June 30, 2023 were as follows:

Weighted-average discount rate 2.37 %

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) 2023 2022 2023 2022

1 unchanged sentence

Short-term and variable lease cost 22 58 106 133

ROU asset impairment — 670 — 670

Sublease income ( 368 ) ( 375 ) ( 1,040 ) ( 906 )

4 unchanged sentences

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

During the six months ended March 31, 2023, and 2022, the Company repurchased 1,826,694 and 2,447,699 shares, respectively, as part of the share repurchase programs.

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

During the nine months ended June 30, 2023 and 2022, the Company repurchased 2,316,814 and 2,447,699 shares, respectively, as part of the share repurchase program.

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

The Company accounts for repurchased shares 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.

As of March 31, 2023, 2,468,283 shares of common stock remained available for repurchase.

For the six months ended March 31, 2023, and 2022, the Company also repurchased 59,626 and 64,536 shares, or $ 2.1 million and $ 3.7 million of common stock, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock.

As of June 30, 2023, 1,978,163 shares of common stock remained available for repurchase.

For the nine months ended June 30, 2023 and 2022, the Company also repurchased 59,626 and 67,158 shares, or $ 2.1 million and $ 3.8 million of common stock, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock.

Retirement of Treasury Stock.

1 unchanged sentence

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 six months ended March 31, 2023 and 2022, respectively.

The Company retired zero shares of common stock held in treasury during the nine months ended June 30, 2023 and 2022, respectively.

STOCK COMPENSATION

2 unchanged sentences

Awards are granted by the Compensation Committee of the Board of Directors based on the performance of the award recipients or other relevant factors.

No new awards are made under the 2002 Omnibus Incentive Plan following November 25, 2022, the date that the 2002 Omnibus Incentive Plan expired by its terms.

Compensation expense for share-based awards is recorded over the vesting period at the fair value of the award at the time of the grant.

1 unchanged sentence

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, 2023.

There were no options granted, exercised, or forfeited under this plan during the six months ended March 31, 2023.

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

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, 2023.

There were no options granted, exercised, or forfeited under this plan during the nine months ended June 30, 2023.

Number of Shares Weighted Average Fair Value at Grant

Nonvested shares outstanding, September 30, 2022

3 unchanged sentences

Forfeited or expired ( 33,293 ) 48.90

Nonvested shares outstanding, March 31, 2023

Nonvested shares outstanding, June 30, 2023

392,496 $ 36.42

2 unchanged sentences

Forfeited or expired — —

Performance share units outstanding, March 31, 2023

Performance share units outstanding, June 30, 2023

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 March 31, 2023, stock-based compensation expense not yet recognized in income totaled $ 10.2 million, which is expected to be recognized over a weighted average remaining period of 1.53 years.

The Company recorded an income tax expense of $ 15.8 million for the six months ended March 31, 2023, resulting in an effective tax rate of 15.83 %, compared to an income tax expense of $ 22.3 million, or an effective tax rate of 16.66 %, for the six months ended March 31, 2022.

At June 30, 2023, stock-based compensation expense not yet recognized in income totaled $ 8.2 million, which is expected to be recognized over a weighted average remaining period of 1.45 years.

The Company recorded an income tax expense of $ 19.0 million for the nine months ended June 30, 2023, resulting in an effective tax rate of 12.80 %, compared to an income tax expense of $ 29.2 million, or an effective tax rate of 17.77 %, for the nine months ended June 30, 2022.

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.

statutory rate of 21% primarily because of the 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 generated from qualified renewable energy property.

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) 2023 2022

15 unchanged sentences

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

Three Months Ended March 31, 2023 2022 2023 2022 2023 2022 2023 2022

Three Months Ended June 30, 2023 2022 2023 2022 2023 2022 2023 2022

Net interest income (1)

7 unchanged sentences

— — 13,756 11,890 224 192 13,980 12,082

Gain (loss) on sale of securities (1)

Gain on sale of securities (1)

— — — — 9 198 9 198

Gain (loss) on sale of other (1)

Gain on sale of other (1)

— — 812 1,239 — — 812 1,239

3 unchanged sentences

Revenue $ 89,397 $ 59,439 $ 69,776 $ 62,662 $ 6,025 $ 4,044 $ 165,198 $ 126,145

Six Months Ended March 31,

Nine Months Ended June 30,

Net interest income (1)

7 unchanged sentences

— — 39,008 34,192 620 342 39,628 34,534

Gain (loss) on sale of securities (1)

Gain on sale of securities (1)

— — — — 91 595 91 595

14 unchanged sentences

therefore, the Company measures progress in completing these services based upon the passage of time.

Revenue from contracts with customers did not generate significant contract assets and liabilities.

Revenue from contracts with customers did not generate significant contract assets and liabilities for the nine months ended June 30, 2023.

Refund Transfer Product Fees.

1 unchanged sentence

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.

Refund transfer fees are recognized by the Company immediately after the taxpayer's refund has been disbursed in accordance with the contract and are 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.

13 unchanged sentences

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.

Fee income for overdraft protection and wire transfers is recognized at the 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.

3 unchanged sentences

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.

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 Federal Deposit Insurance Corporation ("FDIC").

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

9 unchanged sentences

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

Three Months Ended March 31, 2023 2022 2023 2022 2023 2022 2023 2022

Three Months Ended June 30, 2023 2022 2023 2022 2023 2022 2023 2022

Net interest income $ 40,683 $ 23,213 $ 53,067 $ 46,802 $ 3,715 $ 2,136 $ 97,465 $ 72,151

Provision for credit losses 31,654 29,685 5,012 2,205 97 412 36,763 32,302

Noninterest income (loss) 111,776 94,761 14,176 15,537 1,086 ( 532 ) 127,038 109,766

Provision for (reversal of) credit losses 508 ( 279 ) 1,265 ( 752 ) — ( 271 ) 1,773 ( 1,302 )

Noninterest income 48,714 36,226 16,709 15,860 2,310 1,908 67,733 53,994

Noninterest expense 39,666 23,960 33,594 31,336 41,318 41,354 114,578 96,650

3 unchanged sentences

Total deposits 6,130,524 5,573,768 7,550 11,177 168,902 125,854 6,306,976 5,710,799

Six Months Ended March 31,

Nine Months Ended June 30,

Net interest income $ 116,373 $ 79,323 $ 142,149 $ 136,923 $ 24,405 $ 11,318 $ 282,927 $ 227,564

Provision (reversal of) for credit losses 34,894 30,946 11,595 13,797 50 ( 12,255 ) 46,539 32,488

Provision for (reversal of) credit losses 35,402 30,667 12,860 13,045 50 ( 12,526 ) 48,312 31,186

Noninterest income 200,029 158,696 45,247 50,354 15,272 41,301 260,548 250,351

20 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.

At March 31, 2023

At June 30, 2023

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

11 unchanged sentences

$ 8,469 $ — $ — $ —

(1) Equity securities at fair value are included within other assets on the Condensed Consolidated Statements of Financial Condition at March 31, 2023.

(1) Equity securities at fair value are included within other assets on the Condensed Consolidated Statements of Financial Condition at June 30, 2023.

(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.

21 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:

At March 31, 2023

At June 30, 2023

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

12 unchanged sentences

(Dollars in thousands) Fair Value at

March 31, 2023

June 30, 2023

Fair Value at

5 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, 2023 and September 30, 2022 based on relevant market information and information about financial instruments.

These fair value estimates were made at June 30, 2023 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 March 31, 2023

At June 30, 2023

(Dollars in thousands) Carrying

18 unchanged sentences

Accrued interest payable 802 802 802 — —

(1) Equity securities at fair value are included within other assets on the Condensed Consolidated Statements of Financial Condition at March 31, 2023.

(1) Equity securities at fair value are included within other assets on the Condensed Consolidated Statements of Financial Condition at June 30, 2023.

(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, 2023.

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, 2023.

Management has evaluated subsequent events that occurred after June 30, 2023.

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