Cass Information Systems reports First Quarter 2025 Results
ST. LOUIS – Cass Information Systems, Inc. (Nasdaq: CASS), (the Company or Cass) reported first quarter 2025 earnings of $0.66 per diluted share, as compared to $0.52 in the first quarter of 2024 and $0.33 in the fourth quarter of 2024. Net income for the period was $9.0 million, an increase of 25.4% from $7.2 million in the same period in 2024 and an increase of $4.4 million, or 95.2%, as compared to the fourth quarter of 2024.
First Quarter Results
All comparisons refer to the first quarter of 2024, except as noted. On April 7, 2025, the Company signed an Asset Purchase Agreement providing for the sale of its Telecom Expense Management & Managed Mobility Services (“TEM”) business to Asignet USA Inc. The Company has applied discontinued operations accounting in accordance with FASB Accounting Standards Codification (“ASC”), Topic 205-20, “Presentation of Financial Statements – Discontinued Operations,” to the assets and liabilities being sold related to the Company's TEM Business Unit as of March 31, 2025 and December 31, 2024, and for the three-months ended March 31, 2025, December 31, 2024 and March 31, 2024, as applicable. All financial information in this earnings release is reported on a continuing operations basis, unless otherwise noted.
•Net income of $9.0 million, or $0.66 per diluted common share.
•Return on average equity and assets of 15.91% and 1.51%, respectively.
•Increase in net interest margin to 3.75% from 3.26%.
•Increase in net interest income of $2.8 million, or 17.0%.
•Announced signing of an Asset Purchase Agreement providing for the sale of the TEM business.
•Limited personnel expense growth to 1.4% despite AcuAudit acquisition and facility expense transaction volume increase.
•Maintained exceptional credit quality, with no non-performing loans or charge-offs.
•Received $2.0 million as partial consideration in a litigation settlement.
•Repurchased 116,109 shares of Company stock at weighted average price of $42.86.
Martin Resch, the Company’s President and Chief Executive Officer, noted, “Our quality financial results for the first quarter show progress toward our strategic plan and I am proud of the team’s execution. The positive results reflect our ongoing successful implementation of efficiency initiatives powered by technology, combined with an increase in our revenue driven by net interest income.” Resch added, “The combination of continued efficiencies via technology, improvement in our net interest margin and the closure of pipeline opportunities in our Transportation and Facility lines of business should result in meaningful profitability improvement over recent quarters. In addition, the successful sale of our TEM business will enable us to concentrate on our strengths in financial exchange and information processing.”
First Quarter 2025 Highlights
Transportation Invoice and Dollar Volumes – Transportation invoice volumes of 8.36 million declined 4.7% as compared to the first quarter of 2024 and 6.3% as compared to the fourth quarter of 2024. The decline in invoice volumes is reflective of an overall decline in shipments as well as severe weather in January 2025. Transportation dollar volumes were $8.6 billion during the first quarter of 2025, decreases of 3.3% as compared to the first quarter of 2024 and 3.9% as compared to the fourth quarter of 2024. The decline in dollar volumes was primarily due to the decline in invoice volume, partially offset by a slight increase in average dollars per invoice.
Facility Expense Invoice and Dollar Volumes – Facility expense invoice volumes of 4.2 million increased 2.7%. as compared to the first quarter of 2024 and 3.4% as compared to the fourth quarter of 2024. Facility expense dollar volumes totaled $5.8 billion during the first quarter of 2025, increases of 16.1% as compared to the first quarter of 2024 and 15.7% as compared to the fourth quarter of 2024. The increases are largely reflective of new client volume.
Processing Fees – Processing fees decreased $390,000, or 2.3%, over the same period in the prior year. The decrease in processing fees was largely driven by the decrease in transportation invoice volumes of 4.7%, partially offset by the increase in facility expense invoice volumes of 2.7%.
Financial Fees – Financial fees, earned on a transactional level basis for invoice payment services when making customer payments, decreased $637,000, or 6.0%. The decrease in financial fees was primarily due to a decline in transportation dollar volumes of 3.3% and related decline in average payments in advance of funding of 10.7%.
Net Interest Income – Net interest income increased $2.8 million, or 17.0%. The increase in net interest income was attributable to the net interest margin improving to 3.75% as compared to 3.26% in the same period last year, in addition to an increase in average interest-earning assets of $41.4 million, or 2.0%.
The Company’s net interest margin improvement was driven by increases in the average yield on loans and investment securities of 55 and 15 basis points, respectively, combined with a decline in the average cost of total deposits of 31 basis points. The increase in loan yield was driven by loan growth at current market interest rates and continued maturing and re-pricing of existing fixed rate loans to current market interest rates. The decline in the cost of total deposits was driven by the reduction in short-term interest rates in the last four months of 2024. The Company generally benefits from a higher interest rate environment due to a large percentage of its funding sources being non-interest bearing.
Provision for Credit Losses - The Company recorded a provision of credit losses of $905,000 during the first quarter of 2025 as compared to $95,000 in the first quarter of 2024. The provision for credit losses for the first quarter of 2025 was largely driven by the increase in total loans of $59.9 million, or 5.5%, as compared to December 31, 2024.
Personnel Expenses - Personnel expenses increased $372,000, or 1.4%. Salaries and commissions increased 0.9%, as a result of merit increases and the December 2024 acquisition of AcuAudit, partially offset by a decrease in average full-time equivalent employees (“FTEs”) of 3.4% due to strategic investments in various technology initiatives. Net periodic pension cost was $0 for the first quarter of 2025 as compared to $195,000 in the first quarter of 2024 and $3.6 million in the fourth quarter of 2024 due to the termination of the Company’s noncontributory defined-benefit pension plan in the fourth quarter of 2024. Other benefits increased $327,000, or 7.2%, due to higher health insurance costs, partially offset by the decline in average FTEs.
Equipment Expense - Equipment expense increased $463,000 primarily due to an increase in depreciation expense on software related to recently completed technology initiatives.
Bad Debt Recovery - The Company recorded a bad debt recovery of $2.0 million related to partial consideration received in a litigation settlement.
Loans - When compared to December 31, 2024, ending loans increased $59.9 million, or 5.5%. The Company experienced growth in its commercial and industrial and faith-based loan portfolios during the first quarter of 2025.
Payments in Advance of Funding – Average payments in advance of funding decreased $20.7 million, or 10.7%, primarily due to a 3.3% decrease in transportation dollar volumes, which led to fewer dollars advanced to freight carriers, in addition to the continued consolidation of freight carriers.
Deposits – Average deposits decreased $46.1 million, or 4.3%, when compared to the first quarter of 2024. The Company has experienced deposit attrition due to a decrease in the overall level of some larger commercial deposits due to client funding needs for acquisitions and other purposes.
Accounts and Drafts Payable - Average accounts and drafts payable increased $57.9 million, or 5.7%. The increase in these balances, which are non-interest bearing, are primarily reflective of the increase in facility dollar volumes of 16.1%. Accounts and drafts payable are a significant source of funding generated by payment float from transportation and facility clients.
Shareholders’ Equity - Total shareholders’ equity increased $5.2 million since December 31, 2024 as a result of net income of $9.0 million and a decrease in accumulated other comprehensive loss of $5.7 million primarily related to the fair value of available-for-sale investment securities, partially offset by the repurchase of Company stock of $5.0 million and dividends of $4.2 million.
About Cass Information Systems
Cass Information Systems, Inc. is a leading provider of integrated information and payment management solutions. Cass enables enterprises to achieve visibility, control and efficiency in their supply chains, communications networks, facilities and other operations. Disbursing over $90 billion annually on behalf of clients, and with total assets of $2.3 billion, Cass is uniquely supported by Cass Commercial Bank. Founded in 1906 and a wholly owned subsidiary, Cass Commercial Bank provides sophisticated financial exchange services to the parent organization and its clients. Cass is part of the Russell 2000®. More information is available at www.cassinfo.com.
Forward Looking Information
This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions, and other statements that are not historical facts. Such statements are based on current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. These risks and uncertainties include the impact of economic and market conditions, inflationary pressures, risks of credit deterioration, interest rate changes, governmental actions, market volatility, security breaches and technology interruptions, energy prices and competitive factors, among others, as set forth in the Company’s most recent Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. Actual results may differ materially from those set forth in the forward-looking statements.
Note to Investors
The Company has used, and intends to continue using, the Investors portion of its website to disclose material non-public information and to comply with its disclosure obligations under Regulation FD. Accordingly, investors are encouraged to monitor Cass’s website in addition to following press releases, SEC filings, and public conference calls and webcasts.
Consolidated Statements of Income (unaudited)
($ and numbers in thousands, except per share data)
Quarter Ended March 31, 2025
Quarter Ended December 31, 2024
Quarter Ended March 31, 2024
Processing fees
$
16,469
$
15,680
$
16,859
Financial fees
9,961
10,509
10,598
Total fee revenue
$
26,430
$
26,189
$
27,457
Interest and fees on loans
15,350
14,428
12,776
Interest and dividends on securities
4,147
4,104
4,437
Interest on short-term investments
3,893
3,844
4,441
Total interest income
$
23,390
$
22,376
$
21,654
Interest expense
4,116
4,612
5,178
Net interest income
$
19,274
$
17,764
$
16,476
Provision for credit losses
(905)
(93)
(95)
Loss on sale of investment securities
(18)
(33)
—
Other
1,626
1,757
1,267
Total revenues
$
46,407
$
45,584
$
45,105
Salaries and commissions
21,165
21,400
20,971
Share-based compensation
1,241
545
1,195
Net periodic pension cost
—
3,588
195
Other benefits
4,873
4,128
4,546
Total personnel expenses
$
27,279
$
29,661
$
26,907
Occupancy
721
679
676
Equipment
2,294
2,275
1,831
Amortization of intangible assets
293
174
173
Bad debt (recovery) expense
(2,000)
—
—
Other
6,943
7,575
6,621
Total operating expenses
$
35,530
$
40,364
$
36,208
Income from continuing operations, before income tax expense
$
10,877
$
5,220
$
8,897
Income tax expense
2,326
1,060
1,833
Net income from continuing operations
$
8,551
$
4,160
$
7,064
Income from discontinued operations, net of tax
415
434
88
Net income
$
8,966
$
4,594
$
7,152
Basic earnings per share from continuing operations
$
.64
$
.31
$
.52
Basic earnings per share from discontinued operations
.03
.03
.01
Basic earnings per share
$
.67
$
.34
$
.53
Diluted earnings per share from continuing operations
$
.63
$
.30
$
.51
Diluted earnings per share from discontinued operations
.03
.03
.01
Diluted earnings per share
$
.66
$
.33
$
.52
Share data:
Weighted-average common shares outstanding
13,398
13,436
13,530
Weighted-average common shares outstanding assuming dilution
13,643
13,718
13,785
Consolidated Balance Sheets (unaudited)
($ in thousands)
March 31, 2025
December 31, 2024
March 31, 2024
Assets:
Cash and cash equivalents
$
220,674
$
349,728
$
192,802
Securities available-for-sale, at fair value
576,510
528,021
621,929
Loans
1,141,874
1,081,989
1,036,997
Less: Allowance for credit losses
(14,286)
(13,395)
(13,299)
Loans, net
$
1,127,588
$
1,068,594
$
1,023,698
Payments in advance of funding
175,326
208,530
221,552
Premises and equipment, net
31,748
30,576
29,496
Investments in bank-owned life insurance
50,767
50,325
49,496
Goodwill and other intangible assets
20,786
21,247
15,323
Accounts and drafts receivable from customers
40,465
55,906
32,856
Other assets
60,536
67,741
91,700
Assets of discontinued operations
14,057
14,413
14,727
Total assets
$
2,318,457
$
2,395,081
$
2,293,579
Liabilities and shareholders’ equity:
Deposits
Non-interest bearing
$
363,798
$
251,230
$
412,879
Interest-bearing
636,277
716,686
666,213
Total deposits
$
1,000,075
$
967,916
$
1,079,092
Accounts and drafts payable
1,016,324
1,129,610
923,276
Other liabilities
48,823
46,211
37,303
Liabilities of discontinued operations
18,988
22,314
24,421
Total liabilities
$
2,084,210
$
2,166,051
$
2,064,092
Shareholders’ equity:
Common stock
$
7,753
$
7,753
$
7,753
Additional paid-in capital
203,755
205,593
204,361
Retained earnings
153,278
148,487
148,845
Common shares in treasury, at cost
(91,025)
(87,615)
(82,316)
Accumulated other comprehensive loss
(39,514)
(45,188)
(49,156)
Total shareholders’ equity
$
234,247
$
229,030
$
229,487
Total liabilities and shareholders’ equity
$
2,318,457
$
2,395,081
$
2,293,579
Average Balances (unaudited)
($ in thousands)
Quarter Ended March 31, 2025
Quarter Ended December 31, 2024
Quarter Ended March 31, 2024
Average interest-earning assets
$
2,104,603
$
2,022,794
$
2,063,239
Average loans
1,109,526
1,065,944
1,016,246
Average securities available-for-sale
554,905
555,674
635,422
Average short-term investments
383,836
348,632
352,163
Average payments in advance of funding
173,590
200,963
194,338
Average assets
2,394,013
2,353,770
2,367,212
Average non-interest bearing deposits
405,183
399,778
447,900
Average interest-bearing deposits
628,214
638,180
631,622
Average interest-bearing liabilities
628,225
638,191
631,633
Average accounts and drafts payable
1,072,013
1,036,212
1,014,067
Average shareholders’ equity
$
228,615
$
231,993
$
226,669
Consolidated Financial Highlights (unaudited)
($ and numbers in thousands, except ratios and average full-time equivalent employees)
Quarter Ended March 31, 2025
Quarter Ended December 31, 2024
Quarter Ended March 31, 2024
Return on average equity
15.91%
7.88%
12.66%
Return on average assets
1.51%
0.77%
1.20%
Net interest margin (1)
3.75%
3.55%
3.26%
Average interest-earning assets yield (1)
4.54%
4.46%
4.27%
Average loan yield
5.61%
5.38%
5.06%
Average investment securities yield (1)
2.86%
2.87%
2.71%
Average short-term investment yield
4.11%
4.39%
5.07%
Average cost of total deposits
1.62%
1.77%
1.93%
Average cost of interest-bearing deposits
2.66%
2.88%
3.30%
Average cost of interest-bearing liabilities
2.66%
2.87%
3.30%
Allowance for credit losses to loans
1.25%
1.24%
1.28%
Non-performing loans to total loans
—%
—%
—%
Net loan charge-offs (recoveries) to loans
—%
—%
—%
Common equity tier 1 ratio
14.11%
13.84%
14.84%
Total risk-based capital ratio
14.94%
14.61%
15.60%
Leverage ratio
10.39%
10.57%
11.34%
(1) Yields are presented on tax-equivalent basis assuming a tax rate of 21%.
Transportation invoice volume
8,355
8,919
8,771
Transportation dollar volume
$
8,643,138
$
8,994,440
$
8,939,646
Facility expense transaction volume
4,225
4,085
4,114
Facility expense dollar volume
$
5,822,935
$
5,032,620
$
5,016,208
Average full-time equivalent employees
1,008
1,008
1,044
Assets and Liabilities of Discontinued Operations (unaudited)
($ in thousands)
March 31, 2025
December 31, 2024
March 31, 2024
Assets:
Premises and equipment, net
$
3,605
$
3,598
$
3,117
Goodwill and other intangible assets, net
5,102
5,112
5,140
Other assets
5,350
5,703
6,470
Assets of discontinued operations
$
14,057
$
14,413
$
14,727
Liabilities:
Accounts and drafts payable
16,465
19,665
21,517
Other liabilities
2,523
2,649
2,904
Liabilities of discontinued operations
$
18,988
$
22,314
$
24,421
Income from Discontinued Operations (unaudited)
($ in thousands)
March 31, 2025
December 31, 2024
March 31, 2024
Fee revenue:
Processing fees
$
4,205
$
4,582
$
4,394
Financial fees
413
205
179
Total fee revenue
4,618
4,787
4,573
Operating expense:
Salaries and commissions
2,756
2,871
3,005
Share-based compensation
43
25
31
Other benefits
616
504
664
Total personnel expenses
3,415
3,400
3,700
Occupancy
180
189
185
Equipment
51
53
51
Amortization of intangible assets
9
9
18
Other
435
592
508
Total operating expense
4,090
4,243
4,462
Income from discontinued operations, before income tax expense
528
544
111
Income tax expense
113
110
23
Net income from discontinued operations
$
415
$
434
$
88
Other Information from Discontinued Operations (unaudited)
($ and numbers in thousands, except average full-time equivalent employees)
