Kirby McInerney LLP is investigating Pathward Financial after Q3 2026 results showed a sharp rise in credit-loss provisions and nonperforming loans, including exposure tied to alleged fraud and renewable energy projects.
Kirby McInerney LLP says it is investigating Pathward Financial, Inc. over possible violations of the federal securities laws or other unlawful business practices after the company’s fiscal third-quarter 2026 results showed a sharp deterioration in credit quality and a cut to full-year guidance. Pathward reported on July 22, 2026 that its provision for credit losses rose to $28.3 million for the quarter ended June 30, 2026, from $9.3 million a year earlier. During the earnings call, CEO Brett Pharr said the higher provision was due in part to the company having "identified a working capital loan that we believe involves a sophisticated fraud." Pathward also said nonperforming loans increased to $277.5 million, up from $119.8 million in the prior quarter and $74.7 million at June 30, 2025, with the primary increase in nonperforming commercial finance loans tied to certain renewable energy construction projects with a common developer. The company lowered fiscal 2026 earnings guidance to $7.80 to $8.20 per share from $8.55 to $9.05. Shares fell $5.55, or about 6.26%, to close at $83.12 on July 23, 2026. No lawsuit has been filed, and the investigation is ongoing.