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Pathward misses fiscal Q3 estimates as credit losses jump

For the quarter ended June 30, net interest income fell 8% to $112.9 million and the credit-loss provision rose to $28.3 million from $9.3 million a year earlier.

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Pathward Financial missed fiscal third-quarter earnings expectations as higher credit losses weighed on results, according to MarketBeat Ratings. For the quarter ended June 30, the company reported net income of $29 million, or $1.37 per diluted share, down from $42.1 million, or $1.81 per share, a year earlier.

The reported $189.6 million in revenue also fell short of the $191.2 million consensus. The shortfall was tied to a decline in net interest income, which fell 8% to $112.9 million, including an $11.6 million drop after Pathward sold a consumer-finance portfolio last October.

Management said the net interest margin slipped to 6.59% from 7.43% a year earlier. At the same time, the provision for credit losses increased to $28.3 million from $9.3 million a year ago, while nonperforming loans rose to roughly $275 million from $117.7 million three months earlier.

MarketBeat Ratings also noted managements confidence in a stronger fiscal 2027, supported by buybacks. The companys stock was up nearly 17% year to date as analysts maintained a Buy rating with about 20% upside.

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