Pathward Financial (NASDAQ:CASH) stock climbed as much as 5.6% to an over nine-month high on Thursday after the company reported strong Q1 results and raised its FY earnings outlook.

Q1 adj. EPS was $0.81 vs. $0.78 in Q1 FY22, while revenue fell 5% Y/Y to $149.8M. Net interest income grew 17% to $84.1M, driven by increased yields and improved earning asset mix.

Total gross loans and leases at December 31 decreased 5% to $3.51B, reflecting reduced warehouse finance loans and sale of the $81.5M student loan portfolio in Q4 FY22.

Pathward (CASH) raised its guidance for FY23 adj. EPS to $5.40-$5.80, as a result of the rising interest rate environment, from prior outlook of $5.10-$5.60.

Raymond James assumed coverage of Pathward (CASH) at Market Perform. “We believe the bank has a longer tail to NIM expansion exclusive of Fed hikes as assets continue to reprice higher, whereas many in the industry are at/near peak levels,” said analyst David Feaster.

“In turn, this leaves significant NII and fee revenue growth potential and less negative estimate revision risk,” he said.

But he cautioned that potential for inflecting credit metrics and investor perception could prove a near-term headwind.

Raymond James’ stance on Pathward (CASH) is in line with SA Quant’s Hold rating.