Pathward Financial : 2022 Annual Report(

2022

Annual Report

Pathward Financial, Inc.

INVESTOR INFORMATION

ANNUAL MEETING OF STOCKHOLDERS

The Annual Meeting of Stockholders will convene at 9:00 a.m. Central Standard Time on Tuesday, February 28, 2023. The meeting will be held virtually via the internet. Further information with regard to this meeting can be found in the proxy statement.

FORM 10-K

STOCKHOLDER SERVICES

Stockholders desiring to change the name, address or ownership of stock; to report lost certificates; or to consolidate accounts should contact the corporation's transfer agent:

Computershare Investor Services 150 Royall St., Suite 101 Canton, MA 02021

Copies of the Company's Annual Report on Form 10-K for the year ended September 30, 2022 (excluding exhibits thereto) included in this document may also be obtained, without charge, from pathwardfinancial.com.

INVESTOR RELATIONS

Requests for Form 10-K, other inquiries or investor comments are welcome and should be directed to:

Pathward Corporate Services Justin Schempp

VP, Investor Relations and Financial Reporting 5501 South Broadband Lane

Sioux Falls, SD 57108

Telephone: [phone] [e-mail] pathwardfinancial.com

ABOUT PATHWARD FINANCIAL, INC.TM

Pathward Financial, Inc. (Nasdaq: CASH) is a U.S.-based financial holding company driven by its purpose to power financial inclusion for all™. Through our subsidiary, Pathward™, N.A., we strive to increase financial availability, choice, and opportunity across our Banking as a Service and Commercial Finance business lines. These strategic business lines provide end-to-end support to individuals and businesses. Learn more at www.pathwardfinancial.com.

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A MESSAGE FROM

CHIEF EXECUTIVE OFFICER

BRETT PHARR

TO MY FELLOW SHAREHOLDERS,

For Pathward, Fiscal 2022 was a momentous year. We again generated strong earnings per share and increased net revenue, while growing relationships with partners and customers to position our Company for sustained growth. Our superior to industry financial results demonstrate that our core capabilities provide significant economic advantage. Our current core strategy to optimize earning assets continues to produce substantial returns for shareholders. We also completed a rebranding of the Company. We continue with our noble purpose of financial inclusion for all, especially in places in the economy that traditional financial institutions overlook.

FISCAL 2022 FINANCIAL RESULTS

We reported net income of $156.4 million for fiscal year 2022, including a one-time gain on the sale of our former brand's trademarks, representing an increase of 10% compared to fiscal 2021; and generated earnings per share of $5.26, an increase of 20% compared to fiscal 2021. These results produced a return on average assets of 2.2% and a return on average tangible equity of 35.4% for the fiscal year.

$156.4M

NET INCOME

• 10%

$5.26

DILUTED EARNINGS PER

SHARE

 20%

2.20%

RETURN ON AVERAGE ASSETS

• 46bps

4.84%

NET INTEREST MARGIN

• 101bps

Our commercial finance business achieved year-over-year loan growth of 11%, while maintaining strong credit metrics; and our Banking as a Service "BaaS" business attracted and maintained low-cost deposits while also generating steady fee income. The benefits of rising interest rates and the continued optimization of our earning assets drove the expansion of our net interest margin to 4.84% for fiscal 2022, as compared to 3.83% the prior year.

The underlying momentum of our business and our continued confidence in our growth trajectory, combined with our commitment to maintaining the size of our balance sheet, enabled us to return the majority of earnings to shareholders through share repurchases and dividends during the fiscal year.

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These results were achieved by continuing to execute our core strategy and related initiatives.

OPTIMIZE OUR INTEREST-EARNING	OPTIMIZE OUR DEPOSIT MIX, TO
PORTFOLIO, TO EMPHASIZE	MAINTAIN A STABLE, LOW-COST
HIGHER-RETURN ASSETS	DEPOSIT BASE

SIMPLIFY AND OPTIMIZE OUR EXISTING BUSINESS PLATFORMS

z Established a business transformation

• Grew commercial finance loans by 11%.
• Improved the yield on earning assets to 4.93% from 3.94% in the prior fiscal year.
• Completed the sale of the remaining student loans and community bank loans.

• Achieved 0.08% cost of funds from all deposits and borrowings.
• Prioritized acquisition of stable BaaS deposits, to support higher fee income generation.
• Ended fiscal year 2022 with $1.3 billion of income-generatingoff-balance sheet customer deposits in custody of partner banks.

office to drive optimization of existing

business platforms and accelerate our

investments in technology, targeting 2X

operating leverage.

z Executed several expense reduction

initiatives, including shrinking our office

space footprint and restructuring our

workforce.

Due to our core capabilities and market position, our company can produce top-tier economic returns for our industry.

Fiscal Year 2022	GAAP	Peers(1)	Percentile
Return on average assets	2.20%	1.25%	95-99th
Return on average equity	20.0%	12.90%	90-95th
Net interest margin (TE)	4.85%	3.13%	95-99th

1. Peers includes insured commercial banks with assets between $3 and $10B, sourced from FFIEC reports.

Our business model will allow us to continue to provide outsize returns to shareholders through valuations, stock-buy backs, or both, as valuations adjust to reflect our earning power.

CORE CAPABILITIES

Our top-tier sustainable economic results are the product of our core capabilities that are not easily duplicated. Our BaaS division has long been known for its expertise in solutions, payments operations, third-party relationships and the all-critical Risk and Compliance. We are a market leader in the small bank market for sponsorship, providing us stable low-cost deposits. Public announcements impacting others in recent months have demonstrated the need for strong Third-Party management in the BaaS space; an area where we excel. Our unique collateral managed approach in Commercial Finance allows us to have outsized yields while maintaining low loan losses throughout cycles. Our variety of asset classes also provide good economic and duration diversification. The ability to generate non-interest income, including the annual benefits from our tax business, provides us with a revenue mix that is often elusive for banks.

Well-Developed Risk Mitigation and Compliance Capabilities:

					BUSINESS
ENTERPRISE RISK			THIRD-PARTY RISK		CONTINUITY
MANAGEMENT			MANAGEMENT		MANAGEMENT
Our Enterprise Risk		Just as Pathward's ERM	Business Continuity
Management (ERM) program		program oversees our own	Management (BCM) sets
applies corporate governance		actions, our Third-Party Risk	standards and testing to
to risk-taking activities. The		Management program	ensure our company remains
ERM program sets strategy		ensures that our third-party	resilient in case of disaster.
across the enterprise and		relationships are controlled	Our standards comply with
works closely with the lines of		and mitigated. Our policy	Federal Financial Institutions
business to ensure that risks		and strategy encourage us to	Examination Council (FFIEC)
are appropriately identified	protect our company from risk,	and Office of the Comptroller
and managed.		monitor third-party activities,	of the Currency (OCC)
			and report risk events.	guidance.

BANK SECRECY

ACT / ANTI-MONEY

LAUNDERING

To protect our customers, partners and company from the risks of fraud, money laundering, terrorist financing and other illicit activity, Pathward's compliance programs are designed

to keep us compliant with all federal programs and sanctions.

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NEW BRAND PROMISE

We also rebranded to Pathward during the year, unifying our businesses under a single name, brand and culture. I want to acknowledge our team's tremendous efforts in these and other areas: Change isn't easy, but they met the challenge, and our Board and I thank them.

In the first quarter of fiscal 2022, we announced an agreement to sell our former Meta name and trademarks to Beige Key LLC for $60 million. The sale provided significant funds to advance a new corporate name and brand that represents the Company's significant evolution and better enables us to fulfill our purpose of financial inclusion for all®.

Later in the year, we unveiled our new name and corporate brand and launched our new website. Pathward reflects our commitment to providing a path forward to people and businesses so they can reach the next stage of their financial journey. The name reflects our dedication to removing barriers that prevent millions of Americans from achieving access to the financial system and will serve as a constant reminder of our mission to create a path forward for the unbanked, underbanked, and underserved to help them achieve economic mobility.

The rebrand also provided an ideal opportunity for us to develop our current and aspirational values and to communicate them throughout our organization to drive excitement.

Together We:
1	2
LEAD BY EXAMPLE:	FIND A BETTER WAY:
Do the right thing,	Always ask why,
engage with empathy,	challenge how we
and foster diversity and	do things, embrace
inclusion.	innovation, and look to
	simplify.
3	4
HELP OTHERS SUCCEED:	DARE TO BE GREAT:
Elevate our teammates,	Think big, have the
be present and have fun,	courage to disrupt,
and positively impact	be prepared to pivot,
our customers and our	deliver best-in-class
communities.	service, and promote
	an environment of
	excellence.

These values reflect who we are and aim to be as a company and help set the stage for our future as Pathward, a future in which we constantly strive to fulfill our purpose of financial inclusion for all® while driving shareholder value.



We strive to increase financial availability, choice, and opportunity through financial empowerment.

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