EARNINGS PER COMMON SHARE ("EPS")

The Company has granted restricted share awards with dividend rights that are considered to be participating securities. Accordingly, a portion of the Company’s earnings is allocated to those participating securities in the earnings per share calculation under the two-class method. Basic EPS is computed using the two-class method by dividing income available to common stockholders after the allocation of dividends and undistributed earnings to the participating securities by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated using the more dilutive of the two-class method or the treasury stock method. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, and is computed after giving consideration to the weighted average dilutive effect upon vesting of performance share units ("PSUs") and restricted stock grants, and after the allocation of earnings to the participating securities. Antidilutive securities are disregarded in earnings per share calculations. Diluted EPS shown below reflects the two-class method, as diluted EPS under the two-class method was more dilutive than under the treasury stock method.

A reconciliation of net income and common stock share amounts used in the computation of basic and diluted earnings per share is presented below.


	Fiscal Year Ended September 30,
(Dollars in thousands, except per share data)	2025		2024		2023
Basic income per common share:
Net income attributable to Pathward Financial, Inc.	$	185,872	$	183,219	$	143,266
Dividends and undistributed earnings allocated to participating securities	(691)		(1,678)		(2,148)
Basic net earnings available to common stockholders	185,181		181,541		141,118
Undistributed earnings allocated to nonvested restricted stockholders	673		1,631		2,067
Reallocation of undistributed earnings to nonvested restricted stockholders	(670)		(1,629)		(2,060)


Diluted net earnings available to common stockholders	$	185,184	$	181,543	$	141,125

Total weighted-average basic common shares outstanding	23,397,489		25,169,937		26,833,079
Effect of dilutive securities(1)
PSUs	125,140		31,813		92,527

Total effect of dilutive securities	125,140		31,813		92,527
Total weighted-average diluted common shares outstanding	23,522,629		25,201,750		26,925,606

Net earnings per common share:
Basic earnings per common share	$	7.91	$	7.21	$	5.26
Diluted earnings per common share(2)	$	7.87	$	7.20	$	5.24

(1) Represents the effect of the assumed vesting of PSUs and restricted stock, as applicable, utilizing the treasury stock method.

(2) Excluded from the computation of diluted earnings per share for the fiscal years ended September 30, 2025, 2024, and 2023, respectively, were 87,324, 232,601, and 408,477 weighted average shares of nonvested restricted stock because their inclusion would be anti-dilutive.

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

PATHWARD FINANCIAL, INC. Earnings Per Share Disclosure

About Earnings Per Share Disclosures

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