Pathward Financial Sells Insurance Business

By Tamara Parker • Thursday, August 29 15:13 • Permanent Link

Pathward Financial, Inc. (NASDAQ: CASH) has recently announced the sale of its commercial insurance premium finance business to AFS IBEX Financial Services, LLC, a subsidiary of Honor Capital Holdings, LLC. The agreement includes AFS's commitment to offer employment to those within the commercial insurance premium finance business, 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 as of June 30, 2024, which was $617.1 million, plus a $31.2 million premium, subject to fluctuations in the loan portfolio, and the assumption of certain liabilities.

Pathward Financial, Inc. believes that, excluding any related gains, 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 transaction is expected to close by the end of fiscal year 2024, and the company plans to update fiscal 2025 guidance at that time. The transaction has been approved by the boards of directors of both Pathward Financial, Inc. and Pathward, N.A.

In terms of specific figures, the commercial insurance premium finance loan portfolio had a balance of $617.1 million at June 30, 2024, and the final net asset value of the assets purchased by AFS was also $617.1 million as of the same date, with a $31.2 million premium. These numbers highlight the significant value associated with the transaction.

The company will be hosting a conference call and webcast with a corresponding presentation on Thursday, August 29, 2024, to discuss the transaction and its implications. The webcast can be accessed from Pathward's investor relations website, and a webcast replay will also be archived for one year.

Pathward Financial, Inc. (NASDAQ: CASH) is a U.S.-based financial holding company that focuses on increasing financial availability, choice, and opportunity across its banking as a service and commercial finance business lines. As a result of these announcements, the company's shares have moved 0.2% on the market, and are now trading at a price of $66.78. Check out the company's full 8-K submission here.

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