What changed in this filing

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Item 1. Business

2025-11-25 compared with 2024-11-26 · 93 added, 186 removed, 822 unchanged (25% of the section changed)

12 unchanged sentences

Partner Solutions and Commercial Finance.

These strategic business lines provide end-to-end support to individuals and businesses.

These strategic business lines provide support to individuals and businesses.

As a nationally chartered bank, Pathward sits at the hub of the financial ecosystem where traditional banking and financial technology intersect.

8 unchanged sentences

With capabilities ranging from prepaid cards and deposit accounts to payment processing and consumer lending, the Company enables its partners to deliver programs that provide a financial path forward for all.

The Company delivers a diversified portfolio of offerings including issuing, acquiring, digital payments, financial institution solutions, credit solutions, and professional tax solutions.

The Company delivers a diversified portfolio of offerings including sponsorship solutions, financial institution solutions, credit solutions, and professional tax solutions.

With its issuing solutions, Pathward is one of the leading debit and prepaid card issuers in the country and holds funds for the programs of its partners in order to provide the consumer protections of a traditional bank account.

8 unchanged sentences

This diverse range of commercial finance products is available through the following lending solutions:

working capital, equipment finance, structured finance, and insurance premium finance.

working capital, equipment finance, and structured finance.

Working capital provides ready cash for liquidity needs to new or growing companies or companies in cyclical or seasonal industries.

3 unchanged sentences

Products include alternative energy financing, conventional loans, and loans administered through partnerships with the Small Business Administration (" SBA") and United States Department of Agriculture ("USDA").

Insurance premium finance is short-term financing to facilitate the purchase of property, casualty, and liability insurance premiums.

On October 31, 2024 (the "Closing Date"), the Bank completed the sale of substantially all of the assets and liabilities related to its commercial insurance premium finance business to AFS IBEX Financial Services, LLC, a subsidiary of Honor Capital Holdings, LLC.

Subsequent Events to the "Notes of Consolidated Financial Statements," which is included in Part II, Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K, for more information on the sale and transaction.

On October 31, 2024, the Bank completed the sale of substantially all of the assets and liabilities related to its commercial insurance premium finance business to AFS IBEX Financial Services, LLC, a subsidiary of Honor Capital Holdings, LLC.

Divestitures to the "Notes of Consolidated Financial Statements," which is included in Part II, Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K, for more information on the sale and transaction.

Other Subsidiaries

16 unchanged sentences

The following table shows the composition of the Company’s loan and lease portfolio by fixed- and adjustable-rate at the dates indicated.

At September 30,

September 30, 2025 September 30, 2024

(Dollars in thousands) Amount Percent Amount Percent

23 unchanged sentences

Commercial Finance

The Company's Commercial Finance business line offers a variety of products through its working capital, equipment finance, structured finance, and insurance premium finance lending solutions.

These products include term lending, asset-based lending, factoring, lease financing, insurance premium finance, government guaranteed lending, and other commercial finance products offered on a nationwide basis.

The Company's Commercial Finance business line offers a variety of products through its working capital, equipment finance, and structured finance lending solutions.

These products include term lending, asset-based lending, factoring, lease financing, government guaranteed lending, and other commercial finance products offered on a nationwide basis.

Term Lending .

The Bank originates a variety of collateralized conventional term loans and notes receivable.

While terms range from three years to 12 years, the weighted average life of these loans is approximately 59 months.

While terms generally range from five months to 14 years, the weighted average life of these loans is approximately 46 months.

These term loans may be secured by equipment, recurring revenue streams, or real estate.

2 unchanged sentences

As of September 30, 2025, 60% of the term lending portfolio exposure is concentrated in solar/alternative energy, most of which are construction projects that will convert to longer term government guaranteed facilities upon completion of the construction phase.

Equipment finance agreements make up 39% of the term lending total as of September 30, 2024.

Equipment finance makes up 25% of the term lending total as of September 30, 2025.

The remaining 15% are a variety of other general purpose commercial loans.

4 unchanged sentences

Loans are typically revolving lines of credit with terms of one year to three years.

Credit risk is managed through advance rates appropriate for the collateral (generally, advance rates on accounts receivable ranges from 80% to 90% and inventory advance rates range from 40% to 60%).

In certain cases, inventory advances are supported by the third party independent appraisals.

Credit risk is managed through advance rates appropriate for the collateral (generally, advance rates on accounts receivable range from 80% to 90% and inventory advance rates do not exceed 65%).

Collateral is further supported and verified via field audits conducted up to three times per year.

13 unchanged sentences

Lease maturities are generally no greater than 84 months.

Insurance Premium Finance.

Effective on the Closing Date of the commercial insurance premium finance business sale to AFS IBEX Financial Services, LLC, the Company no longer holds or originates insurance premium finance loans.

Until the Closing Date, the Bank provided, on a national basis, short-term, primarily collateralized financing to facilitate the commercial customers’ purchase of insurance for various forms of risk, otherwise known as insurance premium financing.

This included, but was not limited to, policies for commercial property, casualty and liability risk.

Premiums were advanced either directly to the insurance carrier or through an intermediary/broker and repaid by the policyholder with interest during the policy term.

The policyholder generally made a 20% to 25% down payment to the insurance broker and financed the remainder over nine to 10 months on average.

The down payment was set such that if the policy is canceled, the unearned premium was typically sufficient to cover the loan balance and accrued interest and was returned by the insurer to the Bank on a pro rata basis.

Over 95% of the portfolio finances policies were provided by investment grade-rated insurance company partners.

Government Guaranteed Lending.

42 unchanged sentences

If the SBA or USDA establishes that a loss on a guaranteed loan is attributable to significant technical deficiencies in the manner in which the loan was originated, funded or serviced by the Company, the SBA or USDA may seek recovery of the principal loss related to the deficiency from the Company, which could materially adversely affect our business, results of operations and financial condition.

On October 31, 2024, as part of the insurance premium finance business sale, the Company sold $588.4 million of commercial insurance premium finance loans.

On October 31, 2024, as part of the insurance premium finance business sale, the Company sold commercial insurance premium finance loans.

In the normal course of business, the Company enters into off-balance sheet transactions with special purpose entities ("SPEs").

14 unchanged sentences

Commercial finance (1)

1,155,124 99,005

Consumer finance 2,349,777 1,937,079

5 unchanged sentences

Net increase $ 95,892 $ 344,369

(1) Includes loan balances as part of the insurance premium finance business sale.

Nonperforming Assets, Other Loans and Leases of Concern and Classified Assets

18 unchanged sentences

The table below sets forth the amounts and categories of the Company’s nonperforming assets.

At September 30,

(Dollars in thousands) 2024 2023

(Dollars in thousands) September 30, 2025 September 30, 2024

Nonperforming Loans and Leases

14 unchanged sentences

(1) Certain tax services loans do not bear interest.

For the fiscal year ended September 30, 2024, gross interest income, which would have been recorded had the nonaccruing loans and leases been current in accordance with their original terms, was insignificant, none of which was included in interest income.

For the fiscal year ended September 30, 2025, interest income recorded on nonaccrual loans and leases was insignificant.

Nonaccruing Loans and Leases.

1 unchanged sentence

At September 30, 2024, the Company had $26.4 million in nonaccruing loans which constituted 0.6% of its gross loan and lease portfolio.

The fiscal 2024 decrease in nonaccruing loans and leases was primarily driven by one sizable relationship within the commercial finance portfolio that was nonaccrual during the prior period and not reported as such as of September 30, 2024.

The fiscal 2025 increase in nonaccruing loans and leases was primarily driven within the commercial finance portfolio, in particular, one sizable relationship that moved to nonaccrual status during the 2025 fiscal fourth quarter.

Accruing Loans and Leases Delinquent 90 Days or More.

At September 30, 2025, the Company had $17.7 million in accruing loans and leases delinquent 90 days or more, compared to $15.2 million at September 30, 2024.

The decrease in the balance of accruing loans and leases 90 days or more past due was primarily within the commercial finance portfolio, partially offset by increases within the consumer finance and seasonal tax services portfolios.

The increase in the balance of accruing loans and leases 90 days or more past due was primarily within the commercial finance portfolio, partially offset by decreases within the seasonal tax services and consumer finance portfolios.

For information on classified assets, see “Item 7.

6 unchanged sentences

The following table sets forth an analysis of the Company’s ACL.

At September 30,

(Dollars in thousands) 2024 2023

(Dollars in thousands) September 30, 2025 September 30, 2024

Balance at beginning of period $ 71,765 $ 96,855

33 unchanged sentences

The distribution of the Company’s ACL at the dates indicated is summarized as follows:

At September 30,

September 30, 2025 September 30, 2024

(Dollars in thousands) Amount Percent of Loans and Leases in Each Category of Total Loans and Leases Amount Percent of Loans and Leases in Each Category of Total Loans and Leases

11 unchanged sentences

Total $ 53,319 100.0 % $ 71,765 100.0 %

Management closely monitors economic developments and considers these factors when assessing the appropriateness of its ACL.

Management closely monitors economic developments and considers these factors when assessing the appropriateness of the Company's ACL.

The Company's ACL as a percentage of total loans and leases decreased to 1.14% at September 30, 2025 from 1.76% at September 30, 2024.

The decrease in the total loan and lease coverage ratio was primarily driven by decreases in the loan and lease coverage ratios for the consumer finance portfolio and the seasonal tax services portfolio, partially offset by an increase in the loan and lease coverage ratio for the commercial finance portfolio.

The increase in the commercial finance loan and lease coverage ratio was primarily related to the $594.4 million of insurance premium finance loans that were held for sale as of September 30, 2024 and, as such, had no related ACL balance.

That portfolio carried a lower reserve rate compared to the rest of the commercial finance portfolio.

The Company expects to continue to diligently monitor the ACL and adjust as necessary in future periods to maintain an appropriate and supportable level.

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The following table sets forth the carrying value of the Company’s portfolio at the dates indicated.

At September 30,

(Dollars in thousands) 2024 2023

(Dollars in thousands) September 30, 2025 September 30, 2024

Securities Available for Sale ("AFS")

15 unchanged sentences

$ 96,047 $ 106,672

(1) From time to time, the Company maintains balances in excess of insured limits at various financial institutions, including the FRB, the FHLB,

and other private institutions.

At September 30, 2024, the Company had $104.9 million and $1.7 million in interest bearing deposits held at

the FRB and FHLB, respectively.

At September 30, 2023, the Company had $260.3 million and $1.9 million in interest bearing deposits held

at the FRB and FHLB, respectively.

(1) At September 30, 2025, the Company had $94.6 million and $1.4 million in interest bearing deposits held at the FRB and FHLB, respectively.

At September 30, 2024, the Company had $104.9 million and $1.7 million in interest bearing deposits held at the FRB and FHLB, respectively.

The fair value of debt securities available for sale ("AFS") decreased $413.4 million at September 30, 2025 when compared to September 30, 2024 while the amortized cost of debt securities held to maturity ("HTM") decreased $3.8 million over the same period.

These decreases were primarily driven by reductions in SBA securities, non-bank qualified obligations of state and political subdivisions, and asset-backed securities, partially offset by an increase in MBS.

These decreases were primarily driven by strategic investment sales during the fiscal year and typical payments and prepayments in amortizing securities.

The following table sets forth the contractual maturities of debt securities AFS and HTM at September 30, 2025.

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations.

At September 30, 2024

September 30, 2025

1 Year or Less After 1 Year Through 5 Years After 5 Years Through 10 Years After 10 Years Total Securities

21 unchanged sentences

The following table sets forth the contractual maturities of the Company's MBS, excluding the effect of prepayments, periodic principal repayments and the adjustable rate nature of these instruments, all of which typically lower the average life of these securities.

At September 30, 2024

September 30, 2025

1 Year or Less After 1 Year Through 5 Years After 5 Years Through 10 Years After 10 Years Total Securities

17 unchanged sentences

Generally Accepted Accounting Principles (“GAAP”), premiums and discounts are amortized over the estimated lives of the loans, which decrease and increase interest income, respectively.

The prepayment assumptions used to determine the amortization period for premiums and discounts can significantly affect the yield of MBS, and these assumptions are reviewed periodically to reflect actual prepayments.

Although prepayments of underlying mortgages depend on many factors, including the type of mortgages, the coupon rate, borrower credit scores, loan to premises value, the age of mortgages, the geographical location of the underlying real estate collateralizing the mortgages and general levels of market interest rates, the difference between the interest rates on the underlying mortgages and the prevailing mortgage interest rates generally is the most significant determinant of the rate of prepayments.

During periods of falling mortgage interest rates, if the coupon rate of the underlying mortgages exceeds the prevailing market interest rates offered for mortgage loans, refinancing generally increases and accelerates the prepayment of the underlying mortgages and the related security.

Under such circumstances, the Company may be subject to reinvestment risk because, to the extent that the Company’s MBS amortize or prepay faster than anticipated, the Company may not be able to reinvest the proceeds of such repayments and prepayments at a comparable rate.

During periods of rising interest rates, these prepayments tend to decelerate as the prevailing market interest rates for mortgage rates increase and prepayment incentives dissipate.

Under ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

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In addition, the Company may periodically utilize brokered or other wholesale deposits to target strategic maturities related to its seasonal refund advance lending.

The refund advance lending season typically lasts six weeks or less and it is generally more efficient to fund these short-term loans by using brokered deposits to match the expected repayment from refunds.

Other sources of wholesale deposits may also be utilized periodically to take advantage of balance sheet funding opportunities.

20 unchanged sentences

The following table sets forth the dollar amount of deposits in the various types of deposit programs offered by the Company for the periods indicated.

At September 30,

September 30, 2025 September 30, 2024

(Dollars in thousands) Amount Percent of Total Amount Percent of Total

Transactions and Savings Deposits:

Non-Interest bearing checking $ 5,617,097 95.6 % $ 6,332,941 96.1 %

Noninterest bearing checking $ 5,619,554 95.5 % $ 5,617,097 95.6 %

Interest bearing checking 11,605 0.2 % 4,350 0.1 %

7 unchanged sentences

Total deposits $ 5,886,947 100.0 % $ 5,875,085 100.0 %

(1) As of September 30, 2024, total time certificates of deposit included $25.0 million of wholesale certificates of deposit.

(1) As of September 30, 2025, total time certificates of deposit included no wholesale certificates of deposit.

As of September 30, 2025 and 2024, total deposits that exceed FDIC insurance limits, or are otherwise uninsured, were estimated to be $652.1 million and $643.3 million, respectively.

2 unchanged sentences

The following table presents contractual maturities of estimated U.S.

time deposits in excess of FDIC insurance limits or are otherwise uninsured.

time deposits in excess of FDIC insurance limits or are otherwise uninsured at September 30, 2025.

(Dollars in thousands) 3 Months or Less Over 3 to 6 Months Over 6 to 12 Months Over 12 Months Total

17 unchanged sentences

At September 30, 2025, there were no deposits from governmental or other public entities included in certificates of deposit.

For information on custodial off-balance sheet deposits, see “Item 7.

For information on off-balance sheet custodial deposits, see “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation – Financial Condition” of this Annual Report on Form 10-K.

Although deposits are the Company’s primary source of funds, the Company’s practice has been to utilize borrowings when they are a less costly source of funds, can be invested at a positive interest rate spread, or when the Company desires additional capacity to fund loan demand.

Although deposits are the Company’s primary source of funds, the Company’s practice has been to utilize borrowings to manage cyclical deposit changes, when they are a less costly source of funds, can be invested at a positive interest rate spread, or when the Company desires additional capacity to fund loan demand.

Borrowings from various sources mature based on stated payment schedules.

1 unchanged sentence

Such advances can be made pursuant to several different credit programs, each of which has its own interest rate and range of maturities.

At September 30, 2024, the Bank had $257.0 million overnight borrowings with the ability to borrow up to an approximate additional $726.6 million from the FHLB.

As of September 30, 2024, debt securities with fair values of approximately $533.8 million and $1.04 billion were pledged as collateral to the FRB and the FHLB, respectively, to secure various obligations of the Company.

At September 30, 2025, the Bank had $9.0 million overnight borrowings with the ability to borrow up to an approximate additional $1.02 billion from the FHLB.

As of September 30, 2025, debt securities with fair values of approximately $385.5 million and $955.3 million were pledged as collateral to the FRB and the FHLB, respectively, to secure various obligations of the Company.

For additional information regarding the Company’s collateralization of borrowings, see Note 11.

35 unchanged sentences

The following table sets forth certain information as to the Company’s trust preferred securities, subordinated debentures, overnight fed funds purchased, and other borrowings.

At September 30,

(Dollars in thousands) 2024 2023

(Dollars in thousands) September 30, 2025 September 30, 2024

Trust preferred securities $ 13,661 $ 13,661

8 unchanged sentences

The Company's core differentiators, including industry experience, operational excellence, committed partnership, and mature risk and compliance infrastructure are important for payment innovators in an evolving marketplace.

Partner Solutions delivers a diversified portfolio of offerings including issuing, acquiring, digital payments, financial institution solutions, credit solutions, and professional tax solutions with an operating structure that streamlines banking processes and ensures reliable and sustainable programs with unparalleled commitment to enabling our partners' success.

Partner Solutions delivers a diversified portfolio of offerings including sponsorship solutions, financial institution solutions, credit solutions, and professional tax solutions with an operating structure that streamlines banking processes and ensures reliable and sustainable programs with unparalleled commitment to enabling our partners' success.

Overall, the products and services offered by the Company are generally designed to facilitate the processing and settlement of authorized electronic transactions involving the movement of funds.

35 unchanged sentences

Sponsorship consists of the review and oversight of entities participating in debit and credit networks.

Pathward currently provides financial processing services for approximately 300,000 freestanding ATMs nationwide providing consumers with access to funds at ATMs frequently found in malls, retail chains, convenience stores, events, fairs and other small business locations across the U.S.

Pathward currently provides financial processing services for approximately 300,000 freestanding ATMs in the U.S.

territories providing consumers with access to funds at ATMs frequently found in malls, retail chains, convenience stores, events, fairs and other small business locations.

Digital Payments

5 unchanged sentences

Pathward is a Nacha Top 50 bank for receiving and originating payments.

As of September 2024, Pathward typically processes a combined $2.5 billion per day in ACH and wire services to provide safe and efficient movement of money.

Financial Institution Solutions

2 unchanged sentences

Pathward has delivered myriad co-branded prepaid card programs that promote the brands of our financial institution clients.

Commercial Financing Options.

Today’s businesses require unique, flexible financial products to target areas ranging from acquiring new equipment and business expansion to maximizing cash flow and working capital.

When business clients do not qualify for traditional financing or when a product is not available, Pathward provides a variety of options including asset-based lending and SBA lending.

Merchant Services.

8 unchanged sentences

As a national bank, the Bank is supervised and examined by the Office of the Comptroller of the Currency ("OCC"), as its primary federal regulator, and the FDIC, the federal agency that administers the DIF.

As a BHC, the Company is supervised and examined by the FRB.

As a BHC, the Company is supervised and examined by the Federal Reserve.

Federal banking policy is designed to protect customers of and depositors in insured depository institutions, the DIF, and the U.S.

6 unchanged sentences

Any changes to the regulatory framework applicable to the Company or the Bank, however, could have a material adverse impact on the condition or operations of each entity.

In addition to regulation and supervision by the FRB, the Company is a reporting company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is required to file reports with the SEC and otherwise comply with federal securities laws.

In addition to regulation and supervision by the Federal Reserve, the Company is a reporting company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is required to file reports with the SEC and otherwise comply with federal securities laws.

As described broadly below, the banking industry is subject to significant regulation.

21 unchanged sentences

The Dodd-Frank Act includes provisions that restrict interchange fees to those which are “reasonable and proportionate” for certain debit card issuers and limits the ability of networks and issuers to restrict debit card transaction routing (known as the “Durbin Amendment”).

In October 2023, the Federal Reserve issued proposed rules that would reduce the maximum permissible interchange fee cap and would adopt an approach for future adjustments to the interchange fee cap.

Although, as of the date of the filing of this Annual Report on Form 10-K, the interchange fee restrictions in the Durbin Amendment do not apply to the Bank because debit card issuers with total worldwide assets of less than $10 billion are exempt, such restrictions may negatively impact the pricing all debit card processors in the market, including the Bank, may charge.

Incentive Compensation.

The Dodd-Frank Act requires that the federal banking agencies, including the Federal Reserve and the OCC, issue a rule related to incentive-based compensation.

No final rule implementing this provision of the Dodd-Frank Act has, as of the date of the filing of this Annual Report on Form 10-K, been adopted, but a proposed rule was published in May 2024.

The proposed rule is intended to (i) prohibit incentive-based payment arrangements that the banking agencies determine could encourage certain financial institutions to take inappropriate risks by providing excessive compensation or that could lead to material financial loss, (ii) require the board of directors of those financial institutions to take certain oversight actions related to incentive-based compensation, and (iii) require those financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate federal regulator.

The Dodd-Frank Act requires that the federal banking agencies, including the Federal Reserve and the OCC, and the SEC issue a rule related to incentive-based compensation.

No final rule implementing this provision of the Dodd-Frank Act has, as of the date of the filing of this Annual Report on Form 10-K, been adopted, but a re-proposed rule was published in May 2024 that is intended to prohibit certain financial institutions from establishing or maintaining incentive-based compensation arrangements that encourage inappropriate risk taking by providing covered persons with excessive compensation, fees or benefits that could lead to material financial loss at the financial institution.

It is unclear when or whether this rule will be finalized.

Although a final rule has not been issued, the Company and the Bank have undertaken efforts to ensure that their incentive compensation plans do not encourage inappropriate risks, consistent with the principles identified above.

1 unchanged sentence

Enacted in 2018, the Regulatory Relief Act includes several provisions that positively affect smaller banking institutions (e.g., those with less than $10 billion in assets) like the Bank.

Specific provisions of the Regulatory Relief Act that benefit smaller banks include modifications to the “qualified mortgage” criteria under the “ability to repay” rules for certain mortgages that are held and maintained on the Bank’s retained portfolio as well as relief from certain capital requirements required by an international banking capital framework with the creation of a “community bank leverage ratio.” See “Regulatory Capital Requirements” and “Brokered Deposits.”

These rules and their enforcement are subject to the substantial regulatory discretion of the federal banking agencies.

Temporary Regulatory Capital Relief Related to Impact of CECL

2 unchanged sentences

The Company elected to phase in the regulatory capital impact as permitted under this final rule.

The CECL transition amount is being phased out of regulatory capital over a three-year period that began October 1, 2022 and ends on September 30, 2025.

The CECL transition amount is being phased out of regulatory capital over a three-year period that began October 1, 2022 and ended on September 30, 2025.

Bank Regulation and Supervision

10 unchanged sentences

At September 30, 2025, the Bank was in compliance with the combined general limit.

The OCC announced on October 1, 2024 that its supervisory strategies for 2025 will focus on:

(b) allowance for credit losses;

(e) climate-related financial risks for banks with over $100 billion in total consolidated assets;

(f) cybersecurity;

(g) enterprise change management;

(h) operations;

(i) third-party risks;

(j) payments;

(k) Bank Secrecy Act/anti--money laundering/countering the financing of terrorism and Office of Foreign Assets Control;

(l) consumer compliance;

(m) Community Reinvestment Act;

and (n) fair lending.

The OCC’s 2025 supervisory plan provides the foundation for policy initiatives and for supervisory strategies as applied to national banks as well as their third-party service providers subject to OCC examination.

OCC staff members use the supervisory plan to guide their supervisory priorities, planning, and resource allocations.

The OCC typically provides periodic updates about supervisory priorities through the Semiannual Risk Perspective process in the fall and spring of each year.

The OCC and the FDIC have signaled shifts in their supervisory programs.

On October 7, 2025, the OCC and FDIC issued a notice of proposed rulemaking to codify the elimination of reputation risk from their supervisory programs, which would, among other things, prohibit the OCC or FDIC from criticizing or taking adverse action against an institution on the basis of reputation risk, and to prohibit politicized debanking.

On October 7, 2025, the OCC and FDIC also issued a notice of proposed rulemaking that would define the term “unsafe or unsound practice” for purposes of section 8 of the Federal Deposit Insurance Act and revise the supervisory framework for the issuance of matters requiring attention and other supervisory communications.

Insurance of Deposit Accounts and Regulation by the FDIC

9 unchanged sentences

FDIC total base assessment rates for institutions that have been insured for at least five years range from 2.5 to 42 basis points annually and take into account an institution’s composite CAMELS rating and other factors.

Notably, the FDIC has the authority to increase an institution’s deposit insurance premium if it determines that an insured depository institution significantly relies upon brokered deposits.

Notably, the FDIC has the authority to increase certain institutions' deposit insurance premium if it determines that the institution significantly relies upon brokered deposits.

As of September 30, 2025, 2024 and 2023, the Bank’s deposit insurance assessment rate was 6 basis points, 7 basis points, and 7 basis points, respectively.

1 unchanged sentence

A significant increase in DIF insurance premiums would have an adverse effect on the operating expenses and results of operations of the Bank.

The designated reserve ratio (“DRR”) of the DIF reached 1.36% as of September 30, 2018, exceeding the statutorily required 1.35% two years ahead of the deadline imposed by the Dodd-Frank Act.

On June 30, 2019, the DRR reached 1.40% and the FDIC applied small bank credits to banks with less than $10 billion in assets, such as the Bank, beginning September 30, 2020.

The FDIC will continue to apply small bank credits so long as the DRR is at least 1.35%.

The FDIC applies small bank credits to banks with less than $10 billion in assets, such as the Bank, so long as the designated reserve ratio ("DRR") is at least 1.35%.

After applying small bank credits for four quarters, the FDIC will remit to banks the value of any remaining small bank credits in the next assessment period in which the DRR is at least 1.35%.

7 unchanged sentences

As of September 30, 2025, the Bank categorized $59.5 million, or 1% of its deposit liabilities, as brokered deposits.

On December 15, 2020, the FDIC issued a final rule establishing a new framework for analyzing whether bank deposits obtained through third-party arrangements are brokered deposits pursuant to Section 29 of the Federal Deposit Insurance Act.

Generally, a person is a "deposit broker" if it is "engaged in the business of placing deposits, or facilitating the placement of deposits, of third parties with insured depository institutions or the business of placing deposits with insured depository institutions for the purpose of selling interests in those deposits to third parties." The final rule clarifies what it means to be in the business of placing deposits and facilitating the placement of deposits for purpose of the deposit broker definition.

Section 29 provides, in particular, that a person with an exclusive deposit placement arrangement with one insured depository institution will not be considered a deposit broker because it is not in the business of placing deposits or facilitating the placement of deposits.

The final rule also clarifies application of the “primary purpose exception” to Section 29 by identifying a number of common business relationships described as “designated exceptions” as meeting the primary purpose exception.

Many of these designated exceptions are arrangements previously addressed in advisory opinions and include:

certain investment-related deposits;

property management service deposits;

deposits for cross-border clearing services;

deposits related to real estate and mortgage servicing activities;

retirement and 529 deposits;

deposits related to employee benefits programs;

deposits held to secure credit card loans;

and deposits placed by agencies to disburse government benefits.

As a result of this final rule, the Company's deposits that were classified as brokered deposits reduced significantly beginning with the June 30, 2021 reporting period.

On July 30, 2024, the FDIC proposed a rule that would amend the current rules governing brokered deposits.

The proposed rule as drafted would, among other things, (1) amend the definition of “deposit broker”;

(2) eliminate the exclusive deposit placement arrangement exception;

(3) eliminate the enabling transactions designated business exception;

(4) revise the “25 percent test” designated business exception for a primary purpose exception to be available only to broker-dealers and investment advisers and only if less than 10 percent of the total assets that the broker-dealer or investment adviser has under management for its customers is placed at one or more insured depository institutions;

(5) revise the interpretation of the primary purpose exception to consider the third party’s intent in placing customer funds at a particular insured depository institution;

(6) allow only insured depository institutions to file notices and applications for primary purpose exceptions;

and (7) clarify how an insured depository institution that loses its “agent institution” status regains that status.

The Company is currently evaluating the effect of the proposed rule on the Company were it to be adopted as a final rule and monitoring the status of this rulemaking.

Branching by National Banks

8 unchanged sentences

Short-Term, Small-Dollar Installment Lending

In October 2017, the OCC rescinded its guidance on deposit advance products in light of the Bureau’s pending small dollar loan rule related to payday, vehicle title and certain high cost installment loans that was issued in November 2017 (“Small Dollar Rule”).

The Bureau issued its final Small Dollar Rule on July 22, 2020, which rescinded certain provisions of the rule that was issued in 2017 relating to mandatory underwriting.

Specifically, the Bureau revoked provisions that:

(i) provide that it is an unfair and abusive practice for a lender to make a covered short-term or longer-term balloon-payment loan, including payday and vehicle title loans, without reasonably determining that consumers have the ability to repay those loans according to their terms;

(ii) prescribe mandatory underwriting requirements for making the ability-to-repay determination;

(iii) exempt certain loans from the mandatory underwriting requirements;

and (iv) establish related definitions, reporting, and recordkeeping requirements.

The payment provisions of the Small Dollar Rule were not rescinded and restrict lenders from attempting to withdraw payment from a borrower’s account after two consecutive failed attempts unless the borrower provides new authorization for the third attempt.

The Bureau has a small dollar rule related to payday, vehicle title and certain high-cost installment loans ("Small Dollar Rule"), which restricts lenders from attempting to withdraw payment from a borrower’s account after two consecutive failed attempts unless the borrower provides new authorization for the third attempt.

In order to begin re-attempting payments, the lender must follow certain guidelines and obtain new authorizations where applicable.

The Small Dollar Rule has been the subject of litigation, but the Bureau indicated that it expects the Small Dollar Rule to become effective on March 30, 2025.

Separately, in May 2018, the OCC published guidance that encourages national banks and federal savings associations to offer responsible short-term, small-dollar installment loans with terms between two and twelve months and equal amortizing payments.

Pursuant to the OCC’s guidance on this issue, banks are encouraged to offer these products in a manner that is consistent with sound risk management principles and clear, documented underwriting guidelines.

Further, the federal banking agencies issued interagency guidance on May 20, 2020 to encourage banks, savings associations, and credit unions to offer responsible small-dollar loans to customers for consumer and small business purposes.

The Small Dollar Rule became effective on March 30, 2025.

Separately, in May 2020, the federal banking agencies issued interagency guidance to encourage banks, savings associations, and credit unions to offer responsible small-dollar loans to customers for consumer and small business purposes.

As of the date of the filing of this Annual Report on Form 10-K, the Bank has not determined to offer such products, although this position may change as the Bank further refines its business plan in the future.

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In addition, failure to comply with these requirements could lead to significant fines and penalties or the imposition of corrective orders.

In July 2024, the federal banking agencies, including the FRB and OCC, proposed amendments to update the requirements for supervised institutions to establish, implement and maintain effective, risk-based and reasonably designed AML and countering the financing of terrorism (“CFT”) programs.

In July 2024, the federal banking agencies, including the Federal Reserve and OCC, proposed amendments to update the requirements for supervised institutions to establish, implement and maintain effective, risk-based and reasonably designed AML and countering the financing of terrorism (“CFT”) programs.

The proposed amendments would require supervised institutions to identify, evaluate and document the regulated institution’s money laundering, terrorist financing and other illicit finance activity risks, as well as consider, as appropriate, the U.S.

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Customer Identification Programs for Holders of Prepaid Cards

The federal banking agencies, including the OCC and the FRB, issued guidance in 2016 that extends the requirements of the Customer Identification Program required by Section 326 of the USA PATRIOT Act to prepaid accounts where the cardholder has either the (i) ability to reload funds, or (ii) access to credit or overdraft features.

The federal banking agencies, including the OCC and the Federal Reserve, issued guidance in 2016 that extends the requirements of the Customer Identification Program required by Section 326 of the USA PATRIOT Act to prepaid accounts where the cardholder has either the (i) ability to reload funds, or (ii) access to credit or overdraft features.

If either of these features is present, the issuer must verify the identity of the named account holder.

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The Bank is also required to appropriately safeguard its customers’ personal information.

On November 18, 2021, the federal banking agencies issued a final rule to improve the sharing of information about cyber incidents.

The final rule requires a banking organization to notify its primary federal regulator of any significant computer-security incident as soon as possible and no later than 36 hours after the banking organization determines that a cyber incident has occurred.

A banking organization is required to notify its primary federal regulator of any significant computer-security incident as soon as possible and no later than 36 hours after the banking organization determines that a cyber incident has occurred.

Notification is required for incidents that have materially affected—or are reasonably likely to materially affect—the viability of a banking organization's operations, its ability to deliver banking products and services, or the stability of the financial sector.

The final rule also requires a bank service provider to notify affected banking organization customers as soon as possible when the provider determines that it has experienced a computer-security incident that has materially affected or is reasonably likely to materially affect banking organization customers for four or more hours.

This rule became effective May 1, 2022.

A bank service provider must also notify affected banking organization customers as soon as possible when the provider determines that it has experienced a computer-security incident that has materially affected or is reasonably likely to materially affect banking organization customers for four or more hours.

In addition, certain state laws could potentially impact the Bank’s operations, including those related to applicable notification requirements when computer-security incident or unauthorized access to customers’ nonpublic personal information has occurred.

Guidance for Third-Party Relationships

On June 9, 2023, the OCC, Federal Reserve, and FDIC issued final interagency guidance on risk management of third-party relationships, including third-party lending relationships.

In June, 2023, the OCC, Federal Reserve, and FDIC issued final interagency guidance on risk management of third-party relationships, including third-party lending relationships.

The interagency guidance is based, in part, on the OCC’s previously existing third-party risk management guidance from 2013 and seeks to, among other things, promote consistency in third-party risk management and provide sound risk management guidance for third-party relationships commensurate with a bank’s risk profile and complexity as well as the criticality of the activity.

The final interagency guidance replaces each agency’s existing guidance on this topic (including the OCC's 2020 Frequently Asked Questions on Third-Party Relationships) and is directed to all banking organizations supervised by the OCC, Federal Reserve, and FDIC.

Additionally, third party relationship risk management and banking as a service arrangements (including with respect to deposit products and services) have been topics of focus for federal bank regulators in 2024 and further rulemaking activity or guidance may be forthcoming.

Additionally, third party relationship risk management and banking as a service arrangements (including with respect to deposit products and services) may continue to be topics of focus for federal bank regulators and further rulemaking activity or guidance may be forthcoming.

Unclaimed Property Laws

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The Bank did not elect to implement the relief provided under the simplification rule.

On November 21, 2018, the FDIC, the OCC, and the FRB jointly issued a proposed rule required by the Regulatory Relief Act that would permit qualifying banks that have less than $10 billion in consolidated assets to elect to be subject to a 9% leverage ratio that would be applied using less complex leverage calculations (referred to as the “community bank leverage ratio” or “CBLR”).

On November 21, 2018, the FDIC, the OCC, and the Federal Reserve jointly issued a proposed rule required by the Regulatory Relief Act that would permit qualifying banks that have less than $10 billion in consolidated assets to elect to be subject to a 9% leverage ratio that would be applied using less complex leverage calculations (referred to as the “community bank leverage ratio” or “CBLR”).

Under the proposed rule, banks that opt into the CBLR framework and maintain a CBLR of greater than 9% would not be subject to other risk-based and leverage capital requirements and would be deemed to have met the well capitalized ratio requirements.

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Prompt Corrective Action ("PCA")

Federal banking agencies are authorized and, under certain circumstances, required to take certain actions against banks that fail to meet their minimum capital requirements expressed in terms of a total risk-based capital ratio, a Tier 1 risk-based capital ratio, a CET1 ratio, and a leverage ratio (as identified in the tables above).

Federal banking agencies are authorized and, under certain circumstances, required to take certain actions against banks that fail to meet their minimum capital requirements.

Well capitalized banks may not make a capital distribution or pay management fees if the bank would be undercapitalized after making such distributions or paying such fees.

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The Bank paid cash dividends in the amount of $159.5 million to the Company during fiscal 2025, to be used to fund share repurchases under the common stock share repurchase programs that were authorized by the Company's Board of Directors.

On September 3, 2021, the Company's Board of Directors authorized a stock repurchase program pursuant to which the Company may repurchase up to 6,000,000 shares of the Company's outstanding common stock on or before September 30, 2024.

On August 25, 2023, the Company's Board of Directors authorized a new stock repurchase program pursuant to which the Company may repurchase up to an additional 7,000,000 shares of the Company's outstanding common stock on or before September 30, 2028.

On August 25, 2023, the Company's Board of Directors authorized a stock repurchase program pursuant to which the Company may repurchase up to 7,000,000 shares of the Company's outstanding common stock on or before September 30, 2028.

As part of its capital planning, the Company will continue to regularly assess its needs for dividends from the Bank in order to fund future share repurchases and dividends to the Company's stockholders as needed.

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The Bank received a “Satisfactory” rating during its most recent Performance Evaluation dated January 29, 2024.

On October 24, 2023, the federal banking agencies jointly issued a final rule to modernize CRA regulations consistent with the following key goals:

(i) to encourage banks to expand access to credit, investment, and banking services in low to moderate income communities;

(ii) to adapt to changes in the banking industry, including internet and mobile banking and the growth of non-branch delivery systems;

(iii) to provide greater clarity and consistency in the application of the CRA regulations, including adoption of a new metrics-based approach to evaluating bank retail lending and community development financing;

and (iv) to tailor CRA evaluations and data collection to bank size and type, recognizing that differences in bank size and business models may impact CRA evaluations and qualifying activities.

Most of the final CRA rule’s requirements will be applicable beginning January 1, 2026, with certain requirements, including the data reporting requirements, applicable as of January 1, 2027.

The Bank is evaluating the expected impact of the modified CRA regulations.

On October 24, 2023, the federal banking agencies jointly issued a final rule to modernize CRA regulations, but in light of litigation, the agencies issued a joint proposal in July 2025 to rescind this rule and reinstate the CRA framework that existed prior to the 2023 final rule.

Federal Home Loan Bank System

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It is possible that additional rulemaking could require significant revisions to the regulations under which the Bank operates and is supervised.

Any change in such laws and regulations or interpretations thereof negatively impacting the Bank's or the Company's current operations, whether by the OCC, the FDIC, the Bureau, the FRB or through legislation, could have a material adverse impact on the Bank and its operations and on the Company and its stockholders.

Any change in such laws and regulations or interpretations thereof negatively impacting the Bank's or the Company's current operations, whether by the OCC, the FDIC, the Bureau, the Federal Reserve or through legislation, could have a material adverse impact on the Bank and its operations and on the Company and its stockholders.

Holding Company Regulation and Supervision

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In evaluating applications by BHCs to acquire other holding companies and banks, the Federal Reserve must consider the financial and managerial resources and future prospects of the company and institution involved, the effect of the acquisition on the risk to the DIF, the convenience and needs of the community and competitive factors.

On September 17, 2024, the OCC issued a final rule related to its regulations for business combinations involving national banks and a policy statement that summarizes the principles the OCC uses when it reviews proposed bank merger transactions under the Bank Merger Act (“BMA”).

The final rule removes provisions related to expedited review and the use of the streamlined business combination application.

The policy statement discusses the OCC’s review of applications submitted under the BMA, including general principles for the OCC’s review and the OCC’s consideration of the financial stability, managerial and financial resources and future prospects and the convenience and statutory needs factors under the BMA.

On September 17, 2024, the FDIC also approved a final Statement of Policy on Bank Merger Transactions addressing the scope of transactions subject to FDIC approval, the FDIC’s process for evaluating merger applications, and the principles that guide the FDIC’s consideration of the applicable statutory factors as set forth in the BMA.

In September 2024, the OCC issued a final rule related to its regulations for business combinations involving national banks and a policy statement summarizing the principles the OCC uses when it reviews proposed bank merger transactions under the Bank Merger Act (“BMA”), both of which expressed the OCC's heightened scrutiny of business combinations involving national banks.

In May 2025, the OCC adopted an interim final rule amending the 2024 final rule to restore the expedited review and the use of the streamlined business combination application.

The OCC also rescinded its 2024 policy statement.

President Trump subsequently signed a joint resolution under the Congressional Review Act, which, among other things, prevents an agency from reissuing a substantially similar rule.

Change in Bank Control

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The applicable regulations also provide for certain other "rebuttable" presumptions of control.

In April 2020, the Federal Reserve adopted a final rule to revise its regulations related to determinations of whether a company has the ability to exercise a controlling influence over another company for purposes of the BHCA.

The final rule expands and codifies the presumptions for use in such determinations.

By codifying the presumptions, the final rule provides greater transparency on the types of relationships that the Federal Reserve generally views as supporting a facts-and-circumstances determination that one company controls another company.

The Federal Reserve’s final rule applies to questions of control under the BHCA, but does not extend to CIBCA.

Source of Strength and Capital Requirements

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In 2009, the Federal Reserve released a supervisory letter entitled Applying Supervisory Guidance and Regulations on the Payment of Dividends, Stock Redemptions and Stock Repurchases at Bank Holding Companies .

This letter generally sets forth principles describing when a BHC must consult, provide notice, or seek approval from the FRB prior to a capital distribution including the payment of dividends, stock redemptions, or stock repurchases.

According to FRB staff, the FRBs are likely to require holding companies to eliminate, defer or reduce dividends if these payments are not fully covered by the net income available to shareholders for the past four quarters, earnings retention is not consistent with capital needs or the holding company will not meet or is in danger of not meeting minimum regulatory capital adequacy ratios.

This letter generally sets forth principles describing when a BHC must consult, provide notice, or seek approval from the Federal Reserve prior to a capital distribution including the payment of dividends, stock redemptions, or stock repurchases.

According to Federal Reserve staff, the Federal Reserve banks are likely to require holding companies to eliminate, defer or reduce dividends if these payments are not fully covered by the net income available to shareholders for the past four quarters, earnings retention is not consistent with capital needs or the holding company will not meet or is in danger of not meeting minimum regulatory capital adequacy ratios.

In August 2017, the Federal Reserve published proposed guidance related to supervisory expectations for boards of directors of BHCs.

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We empower our employees by providing opportunities to grow and develop in their careers, supported by strong compensation, benefits, and health and well-being programs.

We seek to provide a diverse, inclusive, safe, and healthy workplace, recognizing our employees enable us to deliver on our purpose.

We seek to provide an inclusive, safe, and healthy workplace, recognizing our employees enable us to deliver on our purpose.

Composition of Our Workforce

The following table describes the composition of our workforce as of September 30, 2025:

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Total Employees 1,244 1,182 (4.98)%

Racial/Ethnic Minorities 22%

Diversity, Equity, Inclusion and Belonging ("DEIB")

At Pathward, we are committed to advancing DEIB to meet the dynamic needs of our workforce and business.

We aim to cultivate an environment where every employee is embraced and recognized for their unique contributions in serving our clients, partners and communities.

Pathward works to promote diversity throughout our organization and provide an equal opportunity for employment and success regardless of background and identity, as reflected in our Code of Business Conduct and Employee Handbook.

We aim to cultivate an environment where every employee is recognized for their unique contributions in serving our clients, partners and communities.

Pathward works to provide an equal opportunity for employment and success, as reflected in our Code of Business Conduct and Employee Handbook.

Talent Acquisition

A core tenet of our talent system is to both develop talent from within and enrich our talent pool with external hires to support a continuous improvement mindset.

Our “Talent Anywhere” recruitment strategy enables us to source candidates needed to fill essential capabilities and roles while positioning us as a remote-enabled employer of choice.

Our remote-enabled workplace has created valuable benefits for both employees and our business by reducing necessary commutes, allowing us to hire diverse talent from anywhere in the United States, and realizing a reduction in our physical footprint.

As part of our DEIB strategy, we train our internal recruiters on how to mitigate unconscious bias in the hiring process and how to assemble diverse candidate slates for open positions.

We have evolved our “Talent Anywhere” recruitment strategy to source candidates in anchor geographic hubs with flexibility to hire in other domestic locations.

This allows us to expand our talent pool to acquire the best talent available while encouraging the ability for interactivity in our hub locations to build connections and community.

Through this recruiting strategy, we expand our reach beyond local candidates as a remote-enabled employer of choice.

Talent Assessment and Development

Assessing talent and leadership development are also critical to our talent growth and retention strategy.

We continue to mature and expand our talent management framework.

This framework is used throughout the company to better equip Pathward to have clear line of sight into teams’ strengths and opportunities in terms of skills, diversity, and leadership potential.

This helps ensure our internal talent supply keeps pace with demand, that we invest in our workforce with intention, have our highest performing, highest potential employees applied to our most critical work, and are preparing today’s talent for tomorrow’s needs.

Our performance management program is an interactive practice that engages our employees beginning with aligning objectives at the enterprise level to drive individual goal setting and quarterly conversations designed to review progress and accomplishments and calibrate on focus areas for the upcoming quarter, driving progress against objectives, alignment, and performance feedback throughout the year.

Assessing talent and leadership development are critical to our pipeline strategy.

We have continued to mature our enterprise talent management framework to provide a clearer line of sight into our teams’ strengths and opportunities in terms of skills and leadership potential.

This helps ensure our internal talent supply keeps pace with demand.

We continue to invest in our workforce with intention, have our highest performing, highest potential employees applied to our most critical work, and are preparing today’s talent for tomorrow’s needs.

Our performance management program is an interactive practice that engages our employees by aligning objectives at the enterprise level to drive individual goal setting, promoting quarterly conversations designed to review progress and accomplishments and designate focus areas for the upcoming quarter, driving progress against objectives, alignment, and performance feedback throughout the year.

We offer a variety of support to help team members and managers establish and meet personalized development goals, take on new roles and become better leaders.

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Total Rewards

As part of our total rewards strategy, we aspire to offer and maintain market competitive total rewards programs for our employees that attract and retain superior talent.

As part of our total rewards strategy, we aspire to offer and maintain market competitive total rewards programs for our employees to attract and retain superior talent.

In addition to competitive base wages, we offer other variable pay depending on an employee's position, including an annual bonus or commission plan.

We offer a 401(k) plan with a highly competitive company match.

Our healthcare, insurance benefits, health savings and flexible spending accounts are equally competitive with a low-cost share for the employee.

We also provide employer paid short- and long-term disability and life insurance benefits.

We understand how important it is that our employees have time away from work.

To allow employees time to recharge, we offer paid time off, family leave, family care resources, flexible work schedules, adoption assistance, employee assistance programs, and other related benefits.

We want our employees to be healthy and be able to bring their whole selves to the workplace.

Our healthcare, insurance benefits, health savings and flexible spending accounts are equally competitive with a low-cost share for employees.

Understanding the importance of time away from work to recharge and address family needs, we offer paid time off, family leave and flexible work schedules.

We also offer family care resources, adoption assistance, employee assistance programs, and other related benefits.

Health and Safety

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Accordingly, we are committed to the health, safety, and wellness of our employees.

Being a fully remote-enabled employer, we provide laptops and related hardware along with a stipend to enhance employees' at-home work experience.

Employees also have access to our offices if they choose to work there instead.

Our employees and their families are also supported with access to a variety of flexible and convenient health and welfare programs, including benefits that support their physical and mental health.

We follow local, state and federal regulations issued by the Occupational Safety and Health Administration and are prepared to implement any applicable workplace requirements.

Our employees and their families also have access to a variety of flexible and convenient health and well-being programs, including benefits that support their physical and mental health.

We are also a fully remote-enabled employer, with a work-from-home program allowing hybrid access to our offices that includes a stipend to enhance employees' at-home work experience.

Available Information

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The Company also will provide copies of its Annual Report on Form 10-K, free of charge, upon written request to Darby Schoenfeld, SVP Chief of Staff and Investor Relations, at the Company’s address.

Also posted on the Company's website, among other things, are the Sustainability Report, the charters of committees of the Board of Directors, as well as the Company's Code of Business Conduct.

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-K

Item 1. Business