Cass Information Systems Reports Fourth Quarter 2024 Results
Fourth Quarter Results
(All comparisons refer to the fourth quarter of 2023, except as noted)
-
Net income of
, or$4.6 million per diluted common share.$0.33 -
Successfully terminated defined benefit pension plan resulting in one-time expense of
.$3.5 million -
Increase in net interest margin to
3.55% from3.30% . -
Increase in facility expense transaction volumes of
20.3% . - Completed acquisition of AcuAudit from Acuitive Solutions LLC.
- Maintained exceptional credit quality, with no non-performing loans or charge-offs.
-
Repurchased 79,713 shares of Company stock at weighted average price of
.$44.02
Martin Resch, the Company’s President and Chief Executive Officer, noted, “We closed 2024 operationally on a strong note and have significant momentum for enhanced profitability as we enter 2025. We expect our net interest margin to continue to increase given the current interest rate environment. We see average earning assets returning to the level we had prior to the cyber event at our CassPay client, which resulted in a
Resch continued, “Net income during 2024 was negatively impacted by a combination of
Fourth Quarter 2024 Highlights
Transportation Dollar Volumes – Transportation dollar volumes were
Facility Expense Dollar Volumes – Facility expense dollar volumes totaled
Processing Fees – Processing fees decreased
Financial Fees – Financial fees, earned on a transactional level basis for invoice payment services when making customer payments, decreased
Net Interest Income – Net interest income increased
Provision for Credit Losses - The Company recorded a provision for credit losses of
Personnel Expenses - Personnel expenses increased
Net periodic pension cost increased
Non-Personnel Expenses - Non-personnel expenses increased
Loans - When compared to December 31, 2023, ending loans increased
Payments in Advance of Funding – Average payments in advance of funding decreased
Goodwill and Other Intangible Assets - When compared to September 30, 2024, goodwill and other intangible assets increased
Deposits – Average deposits decreased
Accounts and Drafts Payable - Average accounts and drafts payable decreased
Shareholders’ Equity - Total shareholders’ equity has decreased
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
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
|
|
Quarter
|
|
Quarter
|
|
Year Ended December 31, 2024 |
|
Year Ended December 31, 2023 |
|||||||||
Processing fees |
$ |
20,262 |
|
|
$ |
20,053 |
|
$ |
20,728 |
|
|
$ |
82,671 |
|
|
$ |
79,566 |
|
Financial fees |
|
10,714 |
|
|
|
11,177 |
|
|
11,467 |
|
|
|
43,297 |
|
|
|
45,985 |
|
Total fee revenue |
$ |
30,976 |
|
|
$ |
31,230 |
|
$ |
32,195 |
|
|
$ |
125,968 |
|
|
$ |
125,551 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest and fees on loans |
|
14,428 |
|
|
|
14,567 |
|
|
12,796 |
|
|
|
55,362 |
|
|
|
50,825 |
|
Interest and dividends on securities |
|
4,104 |
|
|
|
4,007 |
|
|
4,352 |
|
|
|
16,931 |
|
|
|
18,215 |
|
Interest on federal funds sold and other short-term investments |
|
3,844 |
|
|
|
4,200 |
|
|
4,573 |
|
|
|
15,752 |
|
|
|
13,720 |
|
Total interest income |
$ |
22,376 |
|
|
$ |
22,774 |
|
$ |
21,721 |
|
|
$ |
88,045 |
|
|
$ |
82,760 |
|
Interest expense |
|
4,612 |
|
|
|
5,156 |
|
|
4,687 |
|
|
|
20,258 |
|
|
|
16,266 |
|
Net interest income |
$ |
17,764 |
|
|
$ |
17,618 |
|
$ |
17,034 |
|
|
$ |
67,787 |
|
|
$ |
66,494 |
|
(Provision for) release of credit losses |
|
(93 |
) |
|
|
140 |
|
|
215 |
|
|
|
(447 |
) |
|
|
550 |
|
Loss on sale of investment securities |
|
(33 |
) |
|
|
-- |
|
|
(13 |
) |
|
|
(46 |
) |
|
|
(173 |
) |
Other |
|
1,757 |
|
|
|
1,562 |
|
|
1,305 |
|
|
|
5,927 |
|
|
|
5,089 |
|
Total revenues |
$ |
50,371 |
|
|
$ |
50,550 |
|
$ |
50,736 |
|
|
$ |
199,189 |
|
|
$ |
197,511 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Salaries and commissions |
|
24,271 |
|
|
|
23,850 |
|
|
23,861 |
|
|
|
96,356 |
|
|
|
93,474 |
|
Share-based compensation |
|
570 |
|
|
|
898 |
|
|
342 |
|
|
|
3,168 |
|
|
|
4,139 |
|
Net periodic pension cost |
|
3,588 |
|
|
|
195 |
|
|
476 |
|
|
|
4,172 |
|
|
|
878 |
|
Other benefits |
|
4,632 |
|
|
|
4,924 |
|
|
4,921 |
|
|
|
19,695 |
|
|
|
20,203 |
|
Total personnel expenses |
$ |
33,061 |
|
|
$ |
29,867 |
|
$ |
29,600 |
|
|
$ |
123,391 |
|
|
$ |
118,694 |
|
Occupancy |
|
868 |
|
|
|
890 |
|
|
890 |
|
|
|
3,446 |
|
|
|
3,560 |
|
Equipment |
|
2,328 |
|
|
|
2,107 |
|
|
1,950 |
|
|
|
8,305 |
|
|
|
7,138 |
|
Bad debt expense |
|
-- |
|
|
|
6,559 |
|
|
-- |
|
|
|
7,847 |
|
|
|
-- |
|
Other |
|
8,350 |
|
|
|
7,475 |
|
|
7,941 |
|
|
|
31,981 |
|
|
|
30,763 |
|
Total operating expenses |
$ |
44,607 |
|
|
$ |
46,898 |
|
$ |
40,381 |
|
|
$ |
174,970 |
|
|
$ |
160,155 |
|
Income from operations before income taxes |
$ |
5,764 |
|
|
$ |
3,652 |
|
$ |
10,355 |
|
|
$ |
24,219 |
|
|
$ |
37,356 |
|
Income tax expense |
|
1,170 |
|
|
|
714 |
|
|
1,945 |
|
|
|
5,051 |
|
|
|
7,297 |
|
Net income |
$ |
4,594 |
|
|
$ |
2,938 |
|
$ |
8,410 |
|
|
$ |
19,168 |
|
|
$ |
30,059 |
|
Basic earnings per share |
$ |
.34 |
|
|
$ |
.22 |
|
$ |
.62 |
|
|
$ |
1.42 |
|
|
$ |
2.22 |
|
Diluted earnings per share |
$ |
.33 |
|
|
$ |
.21 |
|
$ |
.61 |
|
|
$ |
1.39 |
|
|
$ |
2.18 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Share data: |
|
|
|
|
|
|
|
|
|
|||||||||
Weighted-average common shares outstanding |
|
13,436 |
|
|
|
13,504 |
|
|
13,467 |
|
|
|
13,502 |
|
|
|
13,530 |
|
Weighted-average common shares outstanding assuming dilution |
|
13,718 |
|
|
|
13,786 |
|
|
13,755 |
|
|
|
13,778 |
|
|
|
13,816 |
|
Consolidated Balance Sheets
($ in thousands) |
||||||||||||
|
(unaudited)
|
|
(unaudited)
|
|
December 31,
|
|
||||||
Assets: |
|
|
|
|
|
|
||||||
Cash and cash equivalents |
$ |
349,728 |
|
|
$ |
230,556 |
|
|
$ |
372,468 |
|
|
Securities available-for-sale, at fair value |
|
528,021 |
|
|
|
550,756 |
|
|
|
627,117 |
|
|
Loans |
|
1,081,989 |
|
|
|
1,078,387 |
|
|
|
1,014,318 |
|
|
Less: Allowance for credit losses |
|
(13,395 |
) |
|
|
(13,447 |
) |
|
|
(13,089 |
) |
|
Loans, net |
$ |
1,068,594 |
|
|
$ |
1,064,940 |
|
|
$ |
1,001,229 |
|
|
Payments in advance of funding |
|
208,530 |
|
|
|
207,202 |
|
|
|
198,861 |
|
|
Premises and equipment, net |
|
34,174 |
|
|
|
34,295 |
|
|
|
30,093 |
|
|
Investments in bank-owned life insurance |
|
50,325 |
|
|
|
49,885 |
|
|
|
49,159 |
|
|
Goodwill and other intangible assets |
|
26,359 |
|
|
|
20,098 |
|
|
|
20,654 |
|
|
Accounts and drafts receivable from customers |
|
66,281 |
|
|
|
30,892 |
|
|
|
110,651 |
|
|
Other assets |
|
63,069 |
|
|
|
72,136 |
|
|
|
68,390 |
|
|
Total assets |
$ |
2,395,081 |
|
|
$ |
2,260,760 |
|
|
$ |
2,478,622 |
|
|
|
|
|
|
|
|
|
||||||
Liabilities and shareholders’ equity: |
|
|
|
|
|
|
||||||
Deposits |
|
|
|
|
|
|
||||||
Non-interest bearing |
$ |
251,230 |
|
|
$ |
392,573 |
|
|
$ |
524,359 |
|
|
Interest-bearing |
|
716,686 |
|
|
|
654,750 |
|
|
|
616,455 |
|
|
Total deposits |
$ |
967,916 |
|
|
$ |
1,047,323 |
|
|
$ |
1,140,814 |
|
|
Accounts and drafts payable |
|
1,149,276 |
|
|
|
936,463 |
|
|
|
1,071,369 |
|
|
Other liabilities |
|
48,859 |
|
|
|
39,327 |
|
|
|
36,630 |
|
|
Total liabilities |
$ |
2,166,051 |
|
|
$ |
2,023,113 |
|
|
$ |
2,248,813 |
|
|
|
|
|
|
|
|
|
||||||
Shareholders’ equity: |
|
|
|
|
|
|
||||||
Common stock |
$ |
7,753 |
|
|
$ |
7,753 |
|
|
$ |
7,753 |
|
|
Additional paid-in capital |
|
205,593 |
|
|
|
205,026 |
|
|
|
208,007 |
|
|
Retained earnings |
|
148,487 |
|
|
|
148,092 |
|
|
|
145,782 |
|
|
Common shares in treasury, at cost |
|
(87,615 |
) |
|
|
(84,139 |
) |
|
|
(84,264 |
) |
|
Accumulated other comprehensive loss |
|
(45,188 |
) |
|
|
(39,085 |
) |
|
|
(47,469 |
) |
|
Total shareholders’ equity |
$ |
229,030 |
|
|
$ |
237,647 |
|
|
$ |
229,809 |
|
|
Total liabilities and shareholders’ equity |
$ |
2,395,081 |
|
|
$ |
2,260,760 |
|
|
$ |
2,478,622 |
|
|
Average Balances (unaudited)
($ in thousands) |
||||||||||||||
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Year Ended December 31, 2024 |
|
Year Ended December 31, 2023 |
|||||
Average interest-earning assets |
$ |
2,022,794 |
|
$ |
2,001,740 |
|
$ |
2,075,641 |
|
$ |
2,011,554 |
|
$ |
2,076,950 |
Average loans |
|
1,065,944 |
|
|
1,072,824 |
|
|
1,025,259 |
|
|
1,048,732 |
|
|
1,055,668 |
Average securities available-for-sale |
|
555,674 |
|
|
535,423 |
|
|
615,666 |
|
|
578,817 |
|
|
665,146 |
Average short-term investments |
|
348,632 |
|
|
338,464 |
|
|
356,887 |
|
|
326,233 |
|
|
287,243 |
Average payments in advance of funding |
|
200,963 |
|
|
202,976 |
|
|
209,364 |
|
|
202,860 |
|
|
234,865 |
Average assets |
|
2,366,992 |
|
|
2,340,870 |
|
|
2,414,665 |
|
|
2,349,397 |
|
|
2,419,608 |
Average non-interest bearing deposits |
|
399,778 |
|
|
404,364 |
|
|
464,924 |
|
|
414,711 |
|
|
512,608 |
Average interest-bearing deposits |
|
638,180 |
|
|
630,204 |
|
|
592,055 |
|
|
634,581 |
|
|
571,067 |
Average interest-bearing liabilities |
|
638,191 |
|
|
630,215 |
|
|
592,066 |
|
|
634,592 |
|
|
573,308 |
Average accounts and drafts payable |
|
1,055,928 |
|
|
1,033,070 |
|
|
1,110,415 |
|
|
1,030,520 |
|
|
1,081,245 |
Average shareholders’ equity |
$ |
231,993 |
|
$ |
231,785 |
|
$ |
207,834 |
|
$ |
228,944 |
|
$ |
211,069 |
Consolidated Financial Highlights (unaudited)
($ and numbers in thousands, except ratios) |
|||||||||||||||||||
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Year Ended
|
|
Year Ended
|
||||||||||
Return on average equity |
|
7.88 |
% |
|
|
5.04 |
% |
|
|
16.06 |
% |
|
|
8.37 |
% |
|
|
14.24 |
% |
Return on average assets |
|
0.77 |
% |
|
|
0.50 |
% |
|
|
1.38 |
% |
|
|
0.82 |
% |
|
|
1.24 |
% |
Net interest margin (1) |
|
3.55 |
% |
|
|
3.55 |
% |
|
|
3.30 |
% |
|
|
3.42 |
% |
|
|
3.25 |
% |
Average interest-earning assets yield (1) |
|
4.46 |
% |
|
|
4.57 |
% |
|
|
4.20 |
% |
|
|
4.43 |
% |
|
|
4.04 |
% |
Average loan yield |
|
5.38 |
% |
|
|
5.40 |
% |
|
|
4.95 |
% |
|
|
5.28 |
% |
|
|
4.81 |
% |
Average investment securities yield (1) |
|
2.87 |
% |
|
|
2.86 |
% |
|
|
2.63 |
% |
|
|
2.82 |
% |
|
|
2.63 |
% |
Average short-term investment yield |
|
4.39 |
% |
|
|
4.94 |
% |
|
|
5.08 |
% |
|
|
4.83 |
% |
|
|
4.78 |
% |
Average cost of total deposits |
|
1.77 |
% |
|
|
1.98 |
% |
|
|
1.76 |
% |
|
|
1.93 |
% |
|
|
1.50 |
% |
Average cost of interest-bearing deposits |
|
2.88 |
% |
|
|
3.25 |
% |
|
|
3.14 |
% |
|
|
3.19 |
% |
|
|
2.85 |
% |
Average cost of interest-bearing liabilities |
|
2.87 |
% |
|
|
3.25 |
% |
|
|
3.14 |
% |
|
|
3.19 |
% |
|
|
2.84 |
% |
Allowance for credit losses to loans |
|
1.24 |
% |
|
|
1.25 |
% |
|
|
1.29 |
% |
|
|
1.24 |
% |
|
|
1.29 |
% |
Non-performing loans to total loans |
|
-- | % |
|
|
-- | % |
|
|
-- | % |
|
|
-- | % |
|
|
-- | % |
Net loan charge-offs (recoveries) to loans |
|
-- |
% |
|
|
-- | % |
|
|
-- | % |
|
|
-- | % |
|
|
-- | % |
Common equity tier 1 ratio |
|
13.84 |
% |
|
|
14.54 |
% |
|
|
14.73 |
% |
|
|
13.84 |
% |
|
|
14.73 |
% |
Total risk-based capital ratio |
|
14.61 |
% |
|
|
15.31 |
% |
|
|
15.49 |
% |
|
|
14.61 |
% |
|
|
15.49 |
% |
Leverage ratio |
|
10.57 |
% |
|
|
11.05 |
% |
|
|
10.71 |
% |
|
|
10.57 |
% |
|
|
10.71 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
Transportation invoice volume |
|
8,919 |
|
|
|
9,160 |
|
|
|
8,733 |
|
|
|
35,729 |
|
|
|
35,949 |
|
Transportation dollar volume |
$ |
8,994,440 |
|
|
$ |
9,097,739 |
|
|
$ |
9,044,772 |
|
|
$ |
36,113,169 |
|
|
$ |
38,288,478 |
|
Facility expense transaction volume |
|
4,218 |
|
|
|
4,316 |
|
|
|
3,505 |
|
|
|
17,135 |
|
|
|
13,857 |
|
Facility expense dollar volume |
$ |
5,291,143 |
|
|
$ |
5,778,291 |
|
|
$ |
4,848,064 |
|
|
$ |
21,438,282 |
|
|
$ |
19,836,821 |
|
(1) Yields are presented on tax-equivalent basis assuming a tax rate of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250123487493/en/
Cass Investor Relations
ir@cassinfo.com
Source: Cass Information Systems, Inc.