August 28, 2024

Pathward Financial, Inc. (the “Company”) (Nasdaq: CASH) today announced that its wholly owned subsidiary Pathward®, N.A. (“Pathward”), an industry leading financial empowerment company driven by its purpose to power financial inclusion, has entered into a definitive agreement to sell its commercial insurance premium finance business to AFS IBEX Financial Services, LLC (“AFS”), a Delaware limited liability company and subsidiary of Honor Capital Holdings, LLC, a Delaware limited liability company (“Honor”). Through its subsidiaries, Honor originates and services premium finance loans and is one of the nation’s largest independently owned insurance premium finance companies with offices in Massachusetts, New York, Florida, Texas and California. Honor will be guaranteeing the obligations of AFS under the agreement.

The agreement includes, among other things, AFS’s commitment to offer employment to those within the commercial insurance premium finance business subject to certain conditions, to purchase the commercial insurance premium finance loan portfolio, which had a balance of $617.1 million at June 30, 2024, and to assume its real property leases.

The cash purchase price to be paid by AFS at closing consists of the final net asset value of the assets purchased pursuant to the Purchase Agreement, which was $617.1 million as of June 30, 2024, plus a $31.2 million premium, subject to fluctuations in the loan portfolio, plus the assumption of certain liabilities, subject to adjustment.

“As I have mentioned before, we need to have the right sized balance sheet with an optimized asset mix to deliver on our fiscal 2025 strategy. This transaction supports our strategy of simplification and gives us the opportunity to accelerate our rotation into higher yielding assets in verticals where we believe we have a competitive advantage,” said Brett Pharr, chief executive officer of the Company.

The Company believes, excluding any related gains, that the transaction will be relatively neutral to fiscal 2024 net income and earnings per diluted share. However, the Company expects the transaction to be increasingly accretive as it redeploys the released capital and deposits into other commercial finance loans and leases. The Company expects the transaction to close by the end of fiscal year 2024 and will update fiscal 2025 guidance at that time.

The transaction has been approved by the Boards of Directors of the Company and Pathward and remains subject to the satisfaction or waiver of certain customary closing conditions. Colonnade Securities LLC served as financial advisor to Pathward.

About Pathward Financial, Inc.

Pathward Financial, Inc. (Nasdaq: CASH) is a U.S.-based financial holding company driven by its purpose to power financial inclusion. 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.