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Back of Napkin

Pathward Financial, Inc. CASH

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Pathward's nonperforming assets went from $101.7M to $277.5M in nine months, from 1.42% of the balance sheet to 3.79%.

Almost all of it sits in one place: commercial finance nonaccruals tripled to $255.4M, and that segment's pretax income fell 75%.

CASH · price with moving averages

Daily · 6MWeekly · 3Y
$39$56$72$88$104 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Pathward is two banks wearing one charter. Partner Solutions rents the charter to financial technology companies, running prepaid cards, deposit accounts and tax refund products for partners who cannot hold deposits themselves. It earns interchange, program fees and the interest on partner balances, and it is a genuinely good business.

Commercial Finance is the other half: asset-based lending, equipment leasing and specialty commercial loans. That is the half that has gone wrong.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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