Pathward Financial, Inc., a national commercial banking group, has announced an extension to the closing date of its commercial insurance premium finance business sale. The transaction with AFS IBEX Financial Services, LLC was initially set to close by October 22, 2024, but both parties have agreed to extend the deadline to November 1, 2024.
The delay was disclosed in a Form 8-K filed with the Securities and Exchange Commission today, Thursday. The Sioux Falls-based bank stated that the purchaser agreed to pay a nonrefundable extension fee of $1 million in cash, which will be credited against the purchase price at closing.
This extension provides additional time for Pathward Financial and the purchaser to finalize the transaction, which was first reported in a Form 8-K filed on August 29, 2024. The initial agreement details were shared in an Asset Purchase and Sale Agreement, which was attached to the August filing.
Pathward Financial, previously known as Meta Financial Group (NASDAQ:CASH) Inc. and First Midwest Financial Inc., is headquartered in Sioux Falls, South Dakota, and operates under the NASDAQ ticker CASH. The company has not disclosed further specifics about the reasons for the extension or the terms of the deal.
This announcement is based on the press release statement filed with the SEC and does not include any additional commentary or speculation on the transaction.
In other recent news, Pathward Financial has been making notable strides. The company reported strong third-quarter earnings with earnings per share (EPS) of $1.35, surpassing both Piper Sandler's estimate of $1.29 and the consensus estimate of $1.26. This led Piper Sandler to raise its price target for Pathward Financial from $75.00 to $82.00, maintaining an Overweight rating on the stock.
Pathward Financial also concluded its fiscal year 2024 with a net income of $168.4 million and an 11% increase in earnings per diluted share to $6.62. The company has revised its 2025 earnings guidance upward and is expected to update its guidance following the completion of the sale of its insurance premium finance business.
Additionally, the company has rebranded its Banking as a Service business to Partner Solutions and extended key partnerships. Despite a decrease in total deposits and non-interest income, Pathward Financial experienced growth in its consumer lending pipeline and anticipates balance sheet optimization and earnings growth in fiscal year 2025.
Lastly, the company repurchased over 1.5 million shares during the fiscal year.
InvestingPro Insights
Pathward Financial's recent announcement regarding the extension of its commercial insurance premium finance business sale aligns with several key financial metrics and trends highlighted by InvestingPro.
According to InvestingPro data, Pathward Financial (NASDAQ: CASH) currently has a market capitalization of $1.81 billion and a P/E ratio of 10.92, suggesting a relatively modest valuation. This could be particularly interesting in light of the company's ongoing strategic moves, such as the sale of its insurance premium finance business.
InvestingPro Tips reveal that Pathward Financial is trading at a low P/E ratio relative to its near-term earnings growth, which may indicate potential upside for investors. This valuation metric becomes especially relevant as the company navigates the sale of a business unit, potentially impacting future earnings.
Additionally, the company has maintained dividend payments for 31 consecutive years, demonstrating a commitment to shareholder returns even as it undergoes strategic changes. This long-term dividend consistency could be reassuring for investors during the current transition period.
It's worth noting that Pathward Financial has shown strong performance recently, with a 70.43% price total return over the past year and is currently trading near its 52-week high. These metrics suggest that the market has been responding positively to the company's strategic decisions and financial performance.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Pathward Financial, providing a deeper understanding of the company's financial health and market position.
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