Cass Information Systems Inc 10-Q for FY2026 Q1
Cass Information Systems Inc (CASS)
10-Q
2026-05-05
For: 2026-03-31
View Original
Added on
May 05, 2026
About this 10-Q
Cass Information Systems Inc filed this 10-Q on May 5, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $49.1M
- up 5.8% from $46.41M a year earlier
- Net income
- $8.83M
- down 1.5% from net income of $8.97M a year earlier
- Diluted EPS
- $0.67
- up 1.5% from $0.66 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________________
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended | |||||
| OR | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
| For the transition period from __________ to __________ | |||||
Commission File No. 000-20827
____________________
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
(314 ) 506-5500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbols | Name of each exchange on which registered | ||||||||||||
____________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | o | x | |||||||||||||||
| Non-Accelerated Filer | o | Smaller Reporting Company | Emerging Growth Company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No x
The number of shares outstanding of the registrant's only class of common stock as of May 1, 2026: Common stock, par value $.50 per share – 12,871,149 shares outstanding.
-1-
TABLE OF CONTENTS
Forward-looking Statements - Factors That May Affect Future Results
This report may contain or incorporate by reference forward-looking statements made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although we believe that, in making any such statements, our expectations are based on reasonable assumptions, forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors beyond our control, which may cause future performance to be materially different from expected performance summarized in the forward-looking statements. These risks, uncertainties and other factors are discussed in Part I, Item 1A, “Risk Factors” of the Company’s 2025 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”), which may be updated from time to time in our future filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, or changes to future results over time.
-2-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in Thousands except Share and Per Share Data)
See accompanying notes to unaudited consolidated financial statements.
March 31, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Cash and due from banks | $ | $ | |||||||||
| Short-term investments | |||||||||||
| Cash and cash equivalents | |||||||||||
| Investment securities available-for-sale, at fair value | |||||||||||
| Loans | |||||||||||
| Less: Allowance for credit losses | |||||||||||
| Loans, net | |||||||||||
| Payments in advance of funding | |||||||||||
| Premises and equipment, net | |||||||||||
| Investment in bank-owned life insurance | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Accounts and drafts receivable from customers | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Liabilities: | |||||||||||
| Deposits: | |||||||||||
| Noninterest-bearing | $ | $ | |||||||||
| Interest-bearing | |||||||||||
| Total deposits | |||||||||||
| Accounts and drafts payable | |||||||||||
| Short-term borrowings | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Shareholders’ Equity: | |||||||||||
Preferred stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
Common shares in treasury, at cost ( | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total shareholders’ equity | |||||||||||
| Total liabilities and shareholders’ equity | $ | $ | |||||||||
-3-
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in Thousands except Per Share Data)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Fee Revenue and Other Income: | |||||||||||||||||||||||
| Processing fees | $ | $ | |||||||||||||||||||||
| Financial fees | |||||||||||||||||||||||
| Gain (loss) on sale of investment securities | ( | ||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total fee revenue and other income | |||||||||||||||||||||||
| Interest Income: | |||||||||||||||||||||||
| Interest and fees on loans | |||||||||||||||||||||||
| Interest and dividends on investment securities: | |||||||||||||||||||||||
| Taxable | |||||||||||||||||||||||
| Exempt from federal income taxes | |||||||||||||||||||||||
| Interest on federal funds sold and other short-term investments | |||||||||||||||||||||||
| Total interest income | |||||||||||||||||||||||
| Interest Expense: | |||||||||||||||||||||||
| Interest on deposits | |||||||||||||||||||||||
| Interest on short-term borrowings | |||||||||||||||||||||||
| Total interest expense | |||||||||||||||||||||||
| Net interest income | |||||||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||
| Net interest income after provision for credit losses | |||||||||||||||||||||||
| Total net revenue | |||||||||||||||||||||||
| Operating Expense: | |||||||||||||||||||||||
| Salaries and commissions | |||||||||||||||||||||||
| Share-based compensation | |||||||||||||||||||||||
| Employee profit sharing | |||||||||||||||||||||||
| Other benefits | |||||||||||||||||||||||
| Total personnel expenses | |||||||||||||||||||||||
| Occupancy | |||||||||||||||||||||||
| Equipment | |||||||||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||||||||
| Bad debt recovery | ( | ||||||||||||||||||||||
| Other operating expense | |||||||||||||||||||||||
| Total operating expense | |||||||||||||||||||||||
| Income from continuing operations, before income tax expense | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income from continuing operations | |||||||||||||||||||||||
| Income from discontinued operations, net of tax | |||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Basic earnings per share from continuing operations | $ | $ | |||||||||||||||||||||
| Basic earnings per share from discontinued operations | |||||||||||||||||||||||
| Basic earnings per share | $ | $ | |||||||||||||||||||||
| Diluted earnings per share from continuing operations | $ | $ | |||||||||||||||||||||
| Diluted earnings per share from discontinued operations | |||||||||||||||||||||||
| Diluted earnings per share | $ | $ | |||||||||||||||||||||
-4-
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Dollars in Thousands)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
Comprehensive Income: | |||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Other comprehensive income: | |||||||||||||||||||||||
| Net unrealized (loss) gain on securities available-for-sale | ( | ||||||||||||||||||||||
| Tax effect | ( | ||||||||||||||||||||||
| Reclassification adjustments for (gains) losses included in net income | ( | ||||||||||||||||||||||
| Tax effect | ( | ||||||||||||||||||||||
| Amortization of net loss on supplemental executive retirement plan | ( | ||||||||||||||||||||||
| Tax effect | |||||||||||||||||||||||
| Foreign currency translation adjustments | |||||||||||||||||||||||
| Total comprehensive income | $ | $ | |||||||||||||||||||||
See accompanying notes to unaudited consolidated financial statements.
-5-
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash Flows From Operating Activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Less: net income from discontinued operations | |||||||||||
| Net income from continuing operations | |||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Amortization of intangible assets | |||||||||||
| Net amortization of premium/discount on investment securities | ( | ||||||||||
| Depreciation | |||||||||||
| (Gain) loss on sale of investment securities | ( | ||||||||||
| Share-based compensation expense | |||||||||||
| Provision for credit losses | |||||||||||
| Increase in current income tax liability | |||||||||||
| Increase in accounts receivable | |||||||||||
| Other operating activities, net | |||||||||||
| Net cash provided by operating activities - continuing operations | |||||||||||
| Net cash provided by operating activities - discontinued operations | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash Flows From Investing Activities: | |||||||||||
| Proceeds from sales of investment securities available-for-sale | |||||||||||
| Proceeds from maturities of investment securities available-for-sale | |||||||||||
| Purchase of investment securities available-for-sale | ( | ( | |||||||||
| Net increase in loans | ( | ( | |||||||||
| (Increase) decrease in payments in advance of funding | ( | ||||||||||
| Purchases of premises and equipment, net | ( | ( | |||||||||
| Net cash used in investing activities - continuing operations | ( | ( | |||||||||
| Net cash used in investing activities - discontinued operations | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash Flows From Financing Activities: | |||||||||||
| Net (decrease) increase in noninterest-bearing demand deposits | ( | ||||||||||
| Net decrease in interest-bearing demand and savings deposits | ( | ( | |||||||||
| Net increase in time deposits | |||||||||||
| Net decrease in accounts and drafts receivable from customers | |||||||||||
| Net increase in short-term borrowings | |||||||||||
| Net decrease in accounts and drafts payable | ( | ( | |||||||||
| Cash dividends paid | ( | ( | |||||||||
| Purchase of common shares for treasury | ( | ( | |||||||||
| Other financing activities, net | ( | ( | |||||||||
| Net cash used in financing activities - continuing operations | ( | ( | |||||||||
| Net cash used in financing activities - discontinued operations | ( | ||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Net decrease in cash and cash equivalents | ( | ( | |||||||||
| Cash and cash equivalents at beginning of period | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
| Supplemental information: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid for income taxes | |||||||||||
-6-
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
(Dollars in Thousands except per share data)
| Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||
Cash dividends ($ | ( | ( | |||||||||||||||||||||||||||||||||
Issuance of | ( | ( | |||||||||||||||||||||||||||||||||
| Share-based compensation expense | |||||||||||||||||||||||||||||||||||
Purchase of | ( | ( | |||||||||||||||||||||||||||||||||
| Other comprehensive gain | |||||||||||||||||||||||||||||||||||
Balance, March 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||
Cash dividends ($ | ( | ( | |||||||||||||||||||||||||||||||||
Issuance of | ( | ( | |||||||||||||||||||||||||||||||||
| Share-based compensation expense | ( | ||||||||||||||||||||||||||||||||||
Purchase of | ( | ( | |||||||||||||||||||||||||||||||||
| Other comprehensive loss | ( | ( | |||||||||||||||||||||||||||||||||
Balance, March 31, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
-7-
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
Note 2 - Discontinued Operations and Assets and Liabilities Held for Sale
On April 7, 2025, the Company signed an Asset Purchase Agreement providing for the sale of its telecom expense management and managed mobility solutions business unit ("TEM Business Unit") to Asignet USA Inc ("Asignet") for a purchase price of $18.0 million. The sale closed on June 30, 2025. The Company also signed a Transition Services Agreement with Asignet to provide certain information technology, data ingestion, and payment processing services for a period of time not to exceed 18 months after closing.
The Company has applied discontinued operations accounting in accordance with Accounting Standards Codification, or ASC, Topic 205-20, “Presentation of Financial Statements – Discontinued Operations,” to the assets and liabilities sold related to the Company's TEM Business Unit for the three months ended March 31, 2026, and 2025, as applicable. The sale of the TEM Business Unit represents a strategic shift due to the Company completely exiting both the telecom expense management and managed mobility solutions businesses. The Company did not allocate any consolidated interest that is not directly attributable to or related to discontinued operations. All financial information in the consolidated financial statements and notes to the consolidated financial statements is reported on a continuing operations basis, unless otherwise noted. The TEM Business Unit is included in the Information Services operating segment.
-8-
Income from discontinued operations, net of tax, for the three months ended March 31, 2026, and 2025 is as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (In thousands except per share data) | 2026 | 2025 | |||||||||||||||||||||
| Fee Revenue and Other Income: | |||||||||||||||||||||||
| Processing fees | $ | $ | |||||||||||||||||||||
| Financial fees | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total fee revenue and other income | |||||||||||||||||||||||
| Operating Expense: | |||||||||||||||||||||||
| Salaries and commissions | |||||||||||||||||||||||
| Share-based compensation | |||||||||||||||||||||||
| Other benefits | |||||||||||||||||||||||
| Total personnel expenses | |||||||||||||||||||||||
| Occupancy | |||||||||||||||||||||||
| Equipment | |||||||||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||||||||
| Other operating expense | |||||||||||||||||||||||
| Total operating expense | |||||||||||||||||||||||
| Income from discontinued operations, before income tax expense | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income from discontinued operations | $ | $ | |||||||||||||||||||||
Note 3 – Intangible Assets
The Company accounts for intangible assets in accordance with ASC 350, Goodwill and Other Intangible Assets, which requires that intangibles with indefinite useful lives be tested annually for impairment, or when management deems there is a triggering event, and those with finite useful lives be amortized over their useful lives.
Details of the Company’s intangible assets are as follows:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (In thousands) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||
| Assets eligible for amortization: | |||||||||||||||||||||||
| Customer lists | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Software | ( | ( | |||||||||||||||||||||
| Trade name | ( | ( | |||||||||||||||||||||
| Unamortized intangible assets: | |||||||||||||||||||||||
| Goodwill | — | — | |||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | $ | ( | |||||||||||||||||
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Note 4 – Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the sum of the weighted-average number of common shares outstanding and the weighted-average number of potential common shares outstanding.
The calculations of basic and diluted earnings per share are as follows:
| (In thousands except share and per share data) | Three Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Basic: | |||||||||||||||||||||||
| Net income from continuing operations | $ | $ | |||||||||||||||||||||
| Net income from discontinued operations | |||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Weighted-average common shares outstanding | |||||||||||||||||||||||
| Basic earnings per share from continuing operations | $ | $ | |||||||||||||||||||||
| Basic earnings per share from discontinued operations | $ | $ | |||||||||||||||||||||
| Basic earnings per share | $ | $ | |||||||||||||||||||||
| Diluted: | |||||||||||||||||||||||
| Net income from continuing operations | $ | $ | |||||||||||||||||||||
| Net income from discontinued operations | |||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Weighted-average common shares outstanding | |||||||||||||||||||||||
| Effect of dilutive restricted stock | |||||||||||||||||||||||
| Weighted-average common shares outstanding assuming dilution | |||||||||||||||||||||||
| Diluted earnings per share from continuing operations | $ | $ | |||||||||||||||||||||
| Diluted earnings per share from discontinued operations | $ | $ | |||||||||||||||||||||
| Diluted earnings per share | $ | $ | |||||||||||||||||||||
Note 5 – Stock Repurchases
Note 6 – Industry Segment Information
The services provided by the Company are classified into two reportable segments: Information Services and Banking Services. Each of these segments provides distinct services that are marketed through different channels and are consistent with the presentation of financial information to the chief operating decision maker to evaluate segment performance, develop strategy, and allocate resources. They are managed separately due to their unique service and processing requirements. The Company's chief operating decision maker is the President and Chief Executive Officer of Cass Information Systems' Inc.
The Information Services segment provides transportation, energy, telecommunication, and environmental invoice processing and payment services to large corporations. In addition, this segment provides church management software and on-line generosity services primarily for faith-based ministries. As discussed in Note 2 to the consolidated financial statements, the Company applied discontinued operations accounting to the assets and liabilities sold related to the TEM Business Unit for the three months ended March 31, 2026 and 2025, as applicable. The TEM Business Unit is included in the Information Services operating segment. The Banking Services segment provides banking services primarily to
-10-
privately held businesses, franchise restaurants and faith-based ministries, as well as supporting the banking needs of the Information Services segment.
The Company’s accounting policies for segments are the same as those described in the summary of significant accounting policies in the Company’s 2025 Form 10-K. Management and the chief operating decision maker evaluates segment performance based on pre-tax income after allocations for corporate expenses. Transactions between segments are accounted for at what management believes to be fair value.
Substantially all revenue originates from, and all long-lived assets are located within, the United States and no revenue from any customer of any segment exceeds 10% of the Company’s consolidated revenue.
Funding sources represent average balances and deposits generated by Information Services and Banking Services and there is no allocation methodology used. Banking Services interest income is determined by actual interest income on loans minus actual interest expense paid on deposits plus/minus an allocation for interest income or expense dependent on the remaining available liquidity of the segment. Information Services interest income is determined by multiplying available liquidity by actual yields on short-term investments and investment securities.
Any difference between total segment interest income and overall total Company interest income is included in Corporate, Eliminations, and Other.
Summarized information about the Company’s operations in each industry segment is as follows:
| (In thousands) | Information Services | Banking Services | Corporate, Eliminations and Other | Total | |||||||||||||||||||
Three Months Ended March 31, 2026: | |||||||||||||||||||||||
| Fee revenue and other income | $ | $ | $ | $ | 27,941 | ||||||||||||||||||
| Gain on sale of investment securities | |||||||||||||||||||||||
| Interest income | ( | ||||||||||||||||||||||
| Interest expense | ( | ||||||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||
| Total net revenue | ( | ||||||||||||||||||||||
| Personnel expenses | |||||||||||||||||||||||
| Occupancy | |||||||||||||||||||||||
| Equipment | |||||||||||||||||||||||
| Intersegment expense (income) | ( | — | |||||||||||||||||||||
| Other operating expense | |||||||||||||||||||||||
| Total operating expense | |||||||||||||||||||||||
| Pre-tax income from continuing operations | ( | ||||||||||||||||||||||
| Pre-tax income from discontinued operations | |||||||||||||||||||||||
| Goodwill | |||||||||||||||||||||||
| Other intangible assets, net | |||||||||||||||||||||||
| Total assets | ( | ||||||||||||||||||||||
| Average funding sources | $ | $ | $ | $ | |||||||||||||||||||
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| (In thousands) | Information Services | Banking Services | Corporate, Eliminations and Other | Total | |||||||||||||||||||
Three Months Ended March 31, 2025: | |||||||||||||||||||||||
| Fee revenue and other income | $ | $ | $ | $ | 28,056 | ||||||||||||||||||
| Loss on sale of investment securities | ( | ( | |||||||||||||||||||||
| Interest income | ( | ||||||||||||||||||||||
| Interest expense | ( | ||||||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||
| Total net revenue | |||||||||||||||||||||||
| Personnel expenses | |||||||||||||||||||||||
| Occupancy | |||||||||||||||||||||||
| Equipment | |||||||||||||||||||||||
| Bad debt recovery | ( | ( | |||||||||||||||||||||
| Intersegment expense (income) | ( | — | |||||||||||||||||||||
| Other operating expense | |||||||||||||||||||||||
| Total operating expense | |||||||||||||||||||||||
| Pre-tax income from continuing operations | |||||||||||||||||||||||
| Pre-tax income from discontinued operations | |||||||||||||||||||||||
| Goodwill | |||||||||||||||||||||||
| Other intangible assets, net | |||||||||||||||||||||||
| Total assets | ( | ||||||||||||||||||||||
| Average funding sources | $ | $ | $ | $ | |||||||||||||||||||
Note 7 – Loans by Type
A summary of loans is as follows:
| (In thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Commercial and industrial | $ | $ | |||||||||
| Real estate: | |||||||||||
| Commercial: | |||||||||||
| Mortgage | |||||||||||
| Construction | |||||||||||
| Faith-based: | |||||||||||
| Mortgage | |||||||||||
| Construction | |||||||||||
| Total loans | $ | $ | |||||||||
-12-
The following table presents the aging of loans past due by category at March 31, 2026 and December 31, 2025:
| Performing | Nonperforming | ||||||||||||||||||||||||||||||||||
| (In thousands) | Current | 30-59 Days | 60-89 Days | 90 Days and Over | Non- accrual | Total Loans | |||||||||||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Real estate | |||||||||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||
| Mortgage | |||||||||||||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||||||||
| Faith-based: | |||||||||||||||||||||||||||||||||||
| Mortgage | |||||||||||||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Real estate | |||||||||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||
| Mortgage | |||||||||||||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||||||||
| Faith-based: | |||||||||||||||||||||||||||||||||||
| Mortgage | |||||||||||||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of March 31, 2026 and December 31, 2025:
| (In thousands) | Loans Subject to Normal Monitoring1 | Performing Loans Subject to Special Monitoring2 | Nonperforming Loans Subject to Special Monitoring2 | Total Loans | |||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | |||||||||||||||||||
| Real estate | |||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||
| Mortgage | |||||||||||||||||||||||
| Construction | |||||||||||||||||||||||
| Faith-based: | |||||||||||||||||||||||
| Mortgage | |||||||||||||||||||||||
| Construction | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | |||||||||||||||||||
| Real estate | |||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||
| Mortgage | |||||||||||||||||||||||
| Construction | |||||||||||||||||||||||
| Faith-based: | |||||||||||||||||||||||
| Mortgage | |||||||||||||||||||||||
| Construction | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
1 Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk, who have the apparent ability to satisfy their loan obligations. | ||
2 Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a high level of management attention. | ||
Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination thereof, among other things. There were no loans modified during the three months ended March 31, 2026. There were two loans modified during the three months ended March 31, 2025. Both loans modified during the three months ended March 31, 2025 were due to term extensions coupled with an interest rate increase.
There were no modified loans that had a payment default during the three months ended March 31, 2026 that had been modified due to the borrower experiencing financial difficulty within the 12 previous months preceding the default.
At March 31, 2026, the Company had no commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company modified the terms of the loans in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension during the current period.
Upon the Company's determination that a modified loan has subsequently been deemed uncollectible, the loan is written off. There were no loans written off during the three months ended March 31, 2026.
At March 31, 2026, the Company had two non-accrual loans totaling $3.1 million that had an allowance for credit losses specifically allocated to them of $101,000 based on an evaluation of expected credit losses. There were three non-accrual
-14-
loans at December 31, 2025 totaling $7.0 million. The Company did not record any interest income on non-accrual loans during the three months ended March 31, 2026 or 2025.
There were no foreclosed loans recorded as other real estate owned as of March 31, 2026 or December 31, 2025.
A summary of the activity in the allowance for credit losses (“ACL”) by category for the three months ended March 31, 2026 and year-ended December 31, 2025 is as follows:
| (In thousands) | C&I | CRE | Faith-based CRE | Construction | Total | ||||||||||||||||||||||||
Balance at January 1, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Provision for (release of) credit losses | ( | ( | |||||||||||||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Provision for (release of) credit losses (1) | ( | ( | |||||||||||||||||||||||||||
Balance at March 31, 2026 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| (1) | For the three months ended March 31, 2026, there was a release of credit losses of $203,000 for unfunded commitments. | ||||
Note 8 – Commitments and Contingencies
In the normal course of business, the Company is party to activities that contain credit, market and operational risks that are not reflected in whole or in part in the Company’s consolidated financial statements. As more fully described in the Form 10-K, such activities include traditional off-balance sheet credit-related financial instruments. These financial instruments include commitments to extend credit, commercial letters of credit and standby letters of credit. The Company’s maximum potential exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, commercial letters of credit and standby letters of credit is represented by the contractual amounts of those instruments. Commitments to extend credit and letters of credit are subject to the same underwriting standards as those financial instruments included on the consolidated balance sheets. An allowance for unfunded commitments of $216,000 and $419,000 had been recorded at March 31, 2026 and December 31, 2025, respectively.
At March 31, 2026, the balances of unfunded commitments, standby and commercial letters of credit were $136.8 million, $11.7 million, and $1.2 million, respectively. Since some of the financial instruments may expire without being drawn upon, the total amounts do not necessarily represent future cash requirements.
Note 9 – Share-Based Compensation
On February 16, 2023, the Board of Directors adopted the 2023 Omnibus Stock and Performance Compensation Plan (the "2023 Omnibus Plan"), which was approved by the Company's shareholders on April 18, 2023. The 2023 Omnibus Plan permits the issuance of up to 1.0 million shares of the Company’s common stock in the form of stock options, SARs, restricted stock, restricted stock units, phantom stock, and performance awards. During the three months ended March 31, 2026, 33,583 time-based restricted shares and 45,557 performance-based restricted shares were granted under the 2023 Omnibus Plan. Share-based compensation expense was $1.4 million and $1.2 million for the three months ended March 31, 2026, and 2025, respectively.
Restricted Stock
Restricted shares granted to Company employees are amortized to expense over a three-year cliff vesting period, or until vesting occurs upon retirement. Restricted shares granted to members of the Board of Directors are amortized to expense over a one-year service period, with the exception of those shares granted in lieu of cash payments for retainer fees which are expensed in the period earned.
As of March 31, 2026, the total unrecognized compensation expense related to non-vested restricted shares was $2.1 million, and the related weighted-average period over which it is expected to be recognized is approximately 1.43 years.
Following is a summary of the activity of the Company's restricted stock for the three months ended March 31, 2026, with total shares and weighted-average fair value:
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| Three Months Ended March 31, 2026 | |||||||||||
| Shares | Fair Value | ||||||||||
Balance at December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeitures | ( | ||||||||||
Balance at March 31, 2026 | $ | ||||||||||
Performance-Based Restricted Stock
The Company has granted three-year performance-based restricted stock (“PBRS”) awards which are contingent upon the Company’s achievement of pre-established financial goals over a three-year cliff vesting period. The number of shares issued ranges from 0 % to 150 % of the target opportunity based on the actual achievement of financial goals for the three-year performance period.
Following is a summary of the activity of the PBRS for the three months ended March 31, 2026, based on 100% of target value:
| Three Months Ended March 31, 2026 | |||||||||||
| Shares | Fair Value | ||||||||||
Balance at December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeitures | ( | ||||||||||
Balance at March 31, 2026 | $ | ||||||||||
The PBRS that vested during the three months ended March 31, 2026 were based on the Company's achievement of 61.9 % of target financial goals for the 2023-2025 performance period, resulting in the issuance of 28,389 shares of common stock. The outstanding PBRS at March 31, 2026 will vest at scheduled vesting dates and the actual number of shares of common stock issued will range from 0 % to 150 % of the target opportunity based on the actual achievement of financial goals for the respective three-year performance period.
Note 10 – Employee Benefit Plans
The Company has an unfunded supplemental executive retirement plan (the "SERP"). There are no current employees earning benefits and therefore, there is no service cost associated with the SERP. The following table represents the components of the net periodic cost for the SERP:
| (In thousands) | Estimated 2026 | Actual 2025 | |||||||||
| Interest cost on projected benefit obligation | $ | $ | |||||||||
| Net amortization | ( | ||||||||||
| Net periodic pension cost | $ | $ | |||||||||
SERP cost recorded to expense was $108,000 and $113,000 for the three months ended March 31, 2026 and 2025, respectively.
Note 11 – Income Taxes
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Note 12 – Investment Securities
Investment securities available-for-sale are recorded at fair value on a recurring basis. The Company’s investment securities available-for-sale are measured at fair value using Level 2 inputs including observable trade data, market data, etc. The market evaluation utilizes several sources which include “observable inputs” rather than “significant unobservable inputs” and therefore fall into the Level 2 category. The amortized cost, gross unrealized gains, gross unrealized losses and fair value of investment securities are summarized as follows:
| March 31, 2026 | |||||||||||||||||||||||
| (In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
| State and political subdivisions | $ | $ | $ | ( | $ | ||||||||||||||||||
| Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises | ( | ||||||||||||||||||||||
| Corporate bonds | ( | ||||||||||||||||||||||
| Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises | ( | ||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | ||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| (In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
| State and political subdivisions | $ | $ | $ | ( | $ | ||||||||||||||||||
| Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises | ( | ||||||||||||||||||||||
| Corporate bonds | ( | ||||||||||||||||||||||
| Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises | ( | ||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | ||||||||||||||||||
The fair values of investment securities with unrealized losses are as follows:
| March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||
| (In thousands) | Estimated Fair Value | Unrealized Losses | Estimated Fair Value | Unrealized Losses | Estimated Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||
| State and political subdivisions | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises | |||||||||||||||||||||||||||||||||||
| Corporate bonds | |||||||||||||||||||||||||||||||||||
| Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||
| (In thousands) | Estimated Fair Value | Unrealized Losses | Estimated Fair Value | Unrealized Losses | Estimated Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||
| State and political subdivisions | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises | |||||||||||||||||||||||||||||||||||
| Corporate bonds | |||||||||||||||||||||||||||||||||||
| Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
There were 213 investment securities, or 70.1 % (155 of which for greater than 12 months), in an unrealized loss position as of March 31, 2026. The unrealized losses at March 31, 2026 were primarily attributable to changes in market interest rates after the investment securities were purchased. The Company does not currently intend to sell, and based on current conditions, the Company does not believe it will be required to sell these available-for-sale investment securities before the recovery of the amortized cost basis, which may be the maturity dates of the investment securities. Therefore, the unrealized losses are recorded in accumulated other comprehensive loss. There were 204 investment securities, or 67.3 % (177 of which for greater than 12 months), in an unrealized loss position as of December 31, 2025. At March 31, 2026 and December 31, 2025, the Company had not recorded an allowance for credit losses on investment securities.
The amortized cost and fair value of investment securities by contractual maturity are shown in the following table. Expected maturities may differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties.
| March 31, 2026 | |||||||||||
| (In thousands) | Amortized Cost | Fair Value | |||||||||
Due in 1 year or less | $ | $ | |||||||||
Due after 1 year through 5 years | |||||||||||
Due after 5 years through 10 years | |||||||||||
Due after 10 years | |||||||||||
| Total | $ | $ | |||||||||
Proceeds from sales of investment securities classified as available-for-sale were $3.5 million and $23.0 million for the three months ended March 31, 2026 and 2025, respectively. Gross realized losses were $57,000 and $18,000 for the three months ended March 31, 2026 and 2025, respectively. There were $62,000 and $0 gross realized gains for the three months ended March 31, 2026 and 2025, respectively. There were no investment securities pledged to secure public deposits at March 31, 2026. The Company pledged municipal securities to secure its $145.0 million of short-term borrowings at March 31, 2026.
Note 13 – Short-term borrowings
The Company has lines of credit from three third party financial institutions up to a maximum of $225.0 million in aggregate collateralized by state and political subdivision securities. As of March 31, 2026, total outstanding borrowings under these facilities were $145.0 million. As such, the Company had future availability of $80.0 million at March 31, 2026.
The lines of credit mature on various dates from April 30, 2026 to November 27, 2026. The line of credit maturing on April 30, 2006 renewed at the same terms until April 30, 2027. The lines of credit bear interest at variable rates from a range of
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the Wall Street Journal ("WSJ") prime rate minus 0.50% to the WSJ prime rate minus 2.40%. All of the lines of credit include a commitment fee of 0.10% per annum.
During the three months ended March 31, 2026, the weighted‑average interest rate on outstanding short-term borrowings was 5.88%.
Availability under the lines of credit is subject to customary borrowing base provisions, financial covenants, and other terms as defined in the respective agreements. As of March 31, 2026, the Company was in compliance with all such covenants.
Note 14 – Fair Value of Financial Instruments
Following is a summary of the carrying amounts and fair values of the Company’s financial instruments:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (In thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||
| Balance sheet assets: | |||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Investment securities | |||||||||||||||||||||||
| Loans, net | |||||||||||||||||||||||
| Accrued interest receivable | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Balance sheet liabilities: | |||||||||||||||||||||||
| Deposits | $ | $ | $ | $ | |||||||||||||||||||
| Accounts and drafts payable | |||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||
| Accrued interest payable | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Cash and Cash Equivalents - The carrying amount approximates fair value.
Investment Securities - The fair value is measured on a recurring basis using Level 2 inputs including observable trade data, market data, etc. Refer to Note 12, “Investment Securities,” for fair value and unrealized gains and losses by investment type.
Loans - The fair value is estimated using present values of future cash flows discounted at risk-adjusted interest rates for each loan category designated by management and is therefore a Level 3 valuation. Management believes that the risk factor embedded in the interest rates along with the allowance for credit losses result in a fair valuation.
Accrued Interest Receivable - The carrying amount approximates fair value.
Deposits - The fair value of demand deposits, savings deposits and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities and therefore, is a Level 2 valuation. The fair value estimates above do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market or the benefit derived from the customer relationship inherent in existing deposits.
Accounts and Drafts Payable - The carrying amount approximates fair value.
Accrued Interest Payable - The carrying amount approximates fair value.
Short-term borrowings - The carrying amount approximates fair value.
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Note 15 – Revenue from Contracts with Customers
Revenue is recognized as the obligation to the customer is satisfied. The Company’s revenue from contracts with clients is as follows:
Processing fees – The Company earns fees on a per-item or monthly basis for the invoice processing services rendered on behalf of customers. Per-item fees are recognized at the point in time when the performance obligation is satisfied. Monthly fees are earned over the course of a month, representing the period over which the performance obligation is satisfied. The contracts have no significant variable consideration or financing components.
Financial fees – The Company earns fees on a transaction level basis for invoice payment services when making customer payments. Fees are recognized at the point in time when the payment transactions are made, which is when the performance obligation is satisfied. The contracts have no significant impact of variable consideration and no significant financing components.
Bank service fees – Revenue from service fees consists of service charges and fees on deposit accounts under depository agreements with customers to provide access to deposited funds. Service charges on deposit accounts are transaction-based fees that are recognized at the point in time when the performance obligation is satisfied. The contracts have no significant impact of variable consideration and no significant financing components.
The following table presents non-interest income, segregated by revenue streams in-scope and out-of-scope for the periods ended March 31, 2026 and 2025.
For the Three Months Ended March 31, | |||||||||||||||||||||||
| (In thousands) | 2026 | 2025 | |||||||||||||||||||||
| Fee revenue and other income | |||||||||||||||||||||||
| In-scope of FASB ASC 606 | |||||||||||||||||||||||
| Processing fees | $ | $ | |||||||||||||||||||||
| Financial fees | |||||||||||||||||||||||
| Information services payment and processing revenue | |||||||||||||||||||||||
| Bank service fees | |||||||||||||||||||||||
| Fee revenue (in-scope of FASB ASC 606) | |||||||||||||||||||||||
| Other income (out-of-scope of FASB ASC 606) | |||||||||||||||||||||||
| Gain (loss) on sale of investment securities | ( | ||||||||||||||||||||||
| Total fee revenue and other income | $ | $ | |||||||||||||||||||||
Note 16 – Leases
The Company leases certain premises under operating leases. As of March 31, 2026, the Company had lease liabilities of $4.3 million and right-of-use assets of $4.2 million. Lease liabilities and right-of-use assets are reflected in other liabilities and , respectively. Presented within occupancy expense on the Consolidated Statements of Income for the three months ended March 31, 2026, operating lease cost was $214,000 , short-term lease cost was $46,000 , and there was no variable lease cost. At March 31, 2026, the weighted-average remaining lease term for the operating leases was 5.9 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 2.75 %. Certain of the Company’s leases contain options to renew the lease; however, these renewal options are not included in the calculation of the lease liabilities as they are not reasonably certain to be exercised. See the Company’s 2025 Form 10-K for information regarding these commitments.
-20-
A maturity analysis of operating lease liabilities and undiscounted cash flows as of March 31, 2026 is as follows:
| (In thousands) | March 31, 2026 | ||||
| Lease payments due | |||||
Less than 1 year | $ | ||||
1-2 years | |||||
2-3 years | |||||
3-4 years | |||||
4-5 years | |||||
Over 5 years | |||||
| Total undiscounted cash flows | |||||
| Discount on cash flows | |||||
| Total lease liability | $ | ||||
There were no sale and leaseback transactions, leveraged leases, or lease transactions with related parties during the three months ended March 31, 2026.
Note 17 – Subsequent Events
In accordance with FASB ASC 855, Subsequent Events, the Company has evaluated subsequent events after the consolidated balance sheet date of March 31, 2026. There were no other events identified that would require additional disclosures to prevent the Company’s unaudited consolidated financial statements from being misleading.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Cass Information Systems, Inc. ("Cass" or the "Company") provides payment and information processing services to large manufacturing, distribution, and retail enterprises across the United States. The Company’s services include freight invoice rating, payment processing, auditing, and the generation of accounting and transportation information. Cass also processes and pays facility-related invoices, which include electricity and gas as well as waste and telecommunications expenses. Cass solutions include integrated payments, a B2B payment platform for clients that require an agile fintech partner. Additionally, the Company offers a church management software solution and an on-line platform to provide generosity services for faith-based and non-profit organizations. The Company’s bank subsidiary, Cass Commercial Bank (the “Bank”), supports the Company’s payment operations. The Bank also provides banking services to its target markets, which include privately held businesses in the St. Louis metropolitan area and restaurant franchises and faith-based ministries within the United States.
In general, Cass is compensated for its information processing services through service fees, transactional level payment services, and investment of account balances generated during the payment process. Both the number of transactions processed and the dollar volume processed are therefore key metrics followed by management. The Bank earns most of its revenue from net interest income.
Various factors will influence the Company’s revenue and profitability, such as changes in the general level of interest rates, which has a significant effect on net interest income; industry-wide factors, such as the willingness of large corporations to outsource key business functions, and the general level of transportation and energy costs; and economic factors that include the general level of economic activity, the ability to hire and retain qualified staff, the growth and quality of the Bank’s loan portfolio, and the effects of tariffs or other domestic or international governmental policies. For a more detailed discussion of the Company’s revenue drivers and factors that impact the Company’s results of operation and financial condition generally, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 2025 Form 10-K.
Recent Industry Developments and Items of Note
While freight rates have recently begun gradually increasing, volumes continue to decline on a year over year basis which continues to put pressure on transportation related processing fees. However, the increase in dollars paid due to rising freight rates and the impact of tariffs, is positively impacting the overall level of average accounts and drafts payable, which results in increased interest income, and average payments in advance of funding, which results in increased financial fees.
The Company has experienced an increase in facility dollar volumes in recent quarters due to higher energy usage and prices. Energy prices are rising due to a number of factors, including an aging power grid, and rising demand for electricity as a result of data center construction to power artificial intelligence and electric vehicles. Rising energy prices are positively impacting the overall level of average accounts and drafts payable, which results in increased interest income.
Results of Operations
The following paragraphs more fully discuss the results of operations and changes in financial condition for the three months ended March 31, 2026 (“first quarter of 2026”) compared to the three months ended March 31, 2025 (“first quarter of 2025”). The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and related notes and with the statistical information and financial data appearing in this report, as well as in the Company’s 2025 Form 10-K. Results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be attained for any other period.
Discontinued Operations
The Company has applied discontinued operations accounting in accordance with Accounting Standards Codification, or ASC, Topic 205-20, “Presentation of Financial Statements – Discontinued Operations,” to the assets and liabilities sold related to the Company's TEM Business Unit for the three months ended March 31, 2026, and 2025, as applicable. All financial information in this Quarterly Report on Form 10-Q is reported on a continuing operations basis, unless otherwise noted. See Note 2 to our consolidated financial statements for further discussion regarding discontinued operations.
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Summary of Results
The following table summarizes the Company’s operating results:
| (In thousands except per share data) | First Quarter of | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||||||||||||||||||||
| Processing fees | $ | 15,728 | $ | 16,469 | (4.5) | % | |||||||||||||||||||||||||||||
| Financial fees | 10,431 | 9,961 | 4.7 | % | |||||||||||||||||||||||||||||||
| Net interest income | 21,216 | 19,274 | 10.1 | % | |||||||||||||||||||||||||||||||
| Provision for credit losses | 61 | 905 | (93.3) | % | |||||||||||||||||||||||||||||||
| Gain (loss) on sale of investment securities | 5 | (18) | N/M | ||||||||||||||||||||||||||||||||
| Other | 1,782 | 1,626 | 9.6 | % | |||||||||||||||||||||||||||||||
| Total net revenue | 49,101 | 46,407 | 5.8 | % | |||||||||||||||||||||||||||||||
| Operating expense | 38,218 | 35,530 | 7.6 | % | |||||||||||||||||||||||||||||||
| Income before income tax expense | 10,883 | 10,877 | 0.1 | % | |||||||||||||||||||||||||||||||
| Income tax expense | 2,144 | 2,326 | (7.8) | % | |||||||||||||||||||||||||||||||
| Net income from continuing operations | $ | 8,739 | $ | 8,551 | 2.2 | % | |||||||||||||||||||||||||||||
| Income from discontinued operations, net of tax | $ | 93 | $ | 415 | (77.6) | % | |||||||||||||||||||||||||||||
| Net income | $ | 8,832 | $ | 8,966 | (1.5) | % | |||||||||||||||||||||||||||||
| Diluted earnings per share from continuing operations | $ | 0.66 | $ | 0.63 | 4.8 | % | |||||||||||||||||||||||||||||
| Diluted earnings per share from discontinued operations | $ | 0.01 | $ | 0.03 | (66.7) | % | |||||||||||||||||||||||||||||
| Diluted earnings per share | $ | 0.67 | $ | 0.66 | 1.5 | % | |||||||||||||||||||||||||||||
| Return on average assets | 1.42 | % | 1.51 | % | (6.0) | % | |||||||||||||||||||||||||||||
| Return on average equity | 14.63 | % | 15.91 | % | (8.0) | % | |||||||||||||||||||||||||||||
The Company recorded net revenue of $49.1 million during the first quarter of 2026, an increase of 5.8% from the first quarter of 2025, primarily driven by an increase in net interest income and financial fees, partially offset by lower processing fees. Operating expense increased 7.6% compared to the first quarter of 2025 as the prior year benefited from a $2.0 million bad debt recovery. Net income was $8.8 million, a decrease of 1.5% and diluted EPS was $0.67 per share, an increase of 1.5% from the three month period ended March 31, 2025.
The Company posted a 1.42% return on average assets and 14.63% return on average equity.
Fee Revenue and Other Income
The Company’s fee revenue is derived mainly from transportation and facility processing and financial fees. As the Company provides its processing and payment services, it is compensated by service fees which are typically calculated on a per-item basis, discounts received for services provided to carriers and by the accounts and drafts payable balances
-23-
generated in the payment process which can be used to generate interest income. Processing volumes, average payments in advance of funding, and fee revenue were as follows:
| (In thousands) | First Quarter of | ||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||||||||||||||||||||||||||
| Transportation invoice volume | 8,098 | 8,355 | (3.1) | % | |||||||||||||||||||||||||||||||||||||
| Transportation invoice dollar volume | $ | 9,032,515 | $ | 8,643,138 | 4.5 | % | |||||||||||||||||||||||||||||||||||
| Facility-related transaction volume | 4,038 | 4,225 | (4.4) | % | |||||||||||||||||||||||||||||||||||||
| Facility-related dollar volume | $ | 6,253,208 | $ | 5,822,935 | 7.4 | % | |||||||||||||||||||||||||||||||||||
| Average payments in advance of funding | $ | 176,987 | $ | 173,590 | 2.0 | % | |||||||||||||||||||||||||||||||||||
| Processing fees | $ | 15,728 | $ | 16,469 | (4.5) | % | |||||||||||||||||||||||||||||||||||
| Financial fees | $ | 10,431 | $ | 9,961 | 4.7 | % | |||||||||||||||||||||||||||||||||||
| Other fees | $ | 1,782 | $ | 1,626 | 9.6 | % | |||||||||||||||||||||||||||||||||||
| Gain (loss) on sale of investment securities | $ | 5 | $ | (18) | N/M | ||||||||||||||||||||||||||||||||||||
Processing fees decreased $741,000, or 4.5% over the same period in the prior year reflecting lower transportation and facility transaction volumes.
Financial fees increased $470,000, or 4.7%, primarily attributable to an increase in average payments in advance of funding of 2.0% compared to the prior period. The Company has recently seen increased demand for its quick pay solutions and continues to focus on the rollout of its Amplify working capital solution as well as other opportunities to increase financial fees in future quarters.
Net Interest Income
Net interest income is the difference between interest earned on loans, investments, and other earning assets and interest expense on deposits and other interest-bearing liabilities. Net interest income is a significant source of the Company’s revenues. The following table summarizes the changes in tax-equivalent net interest income and related factors:
| (In thousands) | First Quarter of | ||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||||||||||||||||||||||||||
| Average earning assets | $ | 2,214,838 | $ | 2,104,603 | 5.2 | % | |||||||||||||||||||||||||||||||||||
| Average interest-bearing liabilities | 652,328 | 628,225 | 3.8 | % | |||||||||||||||||||||||||||||||||||||
| Net interest income* | 21,589 | 19,442 | 11.0 | % | |||||||||||||||||||||||||||||||||||||
| Net interest margin* | 3.95 | % | 3.75 | % | |||||||||||||||||||||||||||||||||||||
| Yield on earning assets* | 4.67 | % | 4.54 | % | |||||||||||||||||||||||||||||||||||||
| Cost of interest-bearing liabilities | 2.42 | % | 2.66 | % | |||||||||||||||||||||||||||||||||||||
*Presented on a tax-equivalent basis assuming a tax rate of 21% for both 2026 and 2025.
The increase in net interest income is primarily attributable to the net interest margin improving to 3.95% as compared to 3.75% in the same period last year, in addition to an increase in average earning assets of $110.2 million, or 5.2%. The yield on interest-earning assets increased 13 basis points from 4.54% to 4.67% while the cost of interest-bearing liabilities decreased 24 basis points from 2.66% to 2.42%.
Average loans decreased $43.2 million, or 3.9%, to $1.07 billion. The average yield on loans increased 20 basis points to 5.81%, primarily due to the continued maturity and subsequent re-pricing of fixed rate loans originated in the years 2021 and 2022 to current market interest rates as well as the payoff of a non-performing loan which increased the loan yield by seven basis points during the first quarter of 2026.
Average investment securities increased $197.6 million, or 32.3%, to $808.8 million. The increase was primarily driven by the utilization of available liquidity arising from an increase in average accounts and drafts payable to purchase investment
-24-
securities. The average yield on taxable investment securities increased 68 basis points to 3.63% and the average yield on tax-exempt investment securities increased 136 basis points to 3.90%.
Average short-term investments, consisting of interest-bearing deposits in other financial institutions and federal funds sold, decreased $44.2 million, or 11.5%, to $339.7 million. The decrease is primarily a result of the increase in average investment securities, partially offset by the increase in average funding sources and decrease in average loans. The average yield on short-term investments decreased 73 basis points to 3.38%, primarily due to the decrease in the Federal Funds rate. The majority of these short-term investments are held at the Federal Reserve Bank.
The average balance of interest-bearing deposits increased $20.0 million, or 3.2%, to $648.3 million. Average non-interest-bearing demand deposits increased $16.5 million, or 4.1%, to $421.7 million. The average rate paid on interest-bearing deposits decreased 27 basis points to 2.39% due to the reduction in short-term interest rates.
Average accounts and drafts payable increased $100.1 million, or 9.3%, to $1.17 billion. The increase in average accounts and drafts payable was primarily driven by the increase in facility dollar volumes of 7.4% as well as the increase in transportation dollar volumes of 4.5%.
Distribution of Assets, Liabilities and Shareholders' Equity; Interest Rate and Interest Differential
The following tables show the condensed average balance sheets for each of the periods reported, the tax-equivalent interest income and expense for each category of interest-earning assets and interest-bearing liabilities, and the average yield on such categories of interest-earning assets and the average rates paid on such categories of interest-bearing liabilities for each of the periods reported.
-25-
| (In thousands) | First Quarter of 2026 | First Quarter of 2025 | ||||||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | |||||||||||||||||||||||||||||||||||||||
Assets1 | ||||||||||||||||||||||||||||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||||||||||||||||||||||||||
Loans2: | $ | 1,066,371 | $ | 15,277 | 5.81 | % | $ | 1,109,526 | $ | 15,350 | 5.61 | % | ||||||||||||||||||||||||||||||||
Investment securities3: | ||||||||||||||||||||||||||||||||||||||||||||
| Taxable | 624,648 | 5,595 | 3.63 | % | 483,536 | 3,514 | 2.95 | % | ||||||||||||||||||||||||||||||||||||
Tax-exempt4 | 184,152 | 1,773 | 3.90 | % | 127,705 | 801 | 2.54 | % | ||||||||||||||||||||||||||||||||||||
| Short-term investments | 339,667 | 2,832 | 3.38 | % | 383,836 | 3,893 | 4.11 | % | ||||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 2,214,838 | 25,477 | 4.67 | % | 2,104,603 | 23,558 | 4.54 | % | ||||||||||||||||||||||||||||||||||||
| Non-interest-earning assets | ||||||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 22,342 | 20,610 | ||||||||||||||||||||||||||||||||||||||||||
| Premises and equipment, net | 29,619 | 30,892 | ||||||||||||||||||||||||||||||||||||||||||
| Bank-owned life insurance | 52,367 | 50,499 | ||||||||||||||||||||||||||||||||||||||||||
| Goodwill and other intangibles | 19,741 | 21,060 | ||||||||||||||||||||||||||||||||||||||||||
| Payments in advance of funding | 176,987 | 173,590 | ||||||||||||||||||||||||||||||||||||||||||
| Unrealized loss on investment securities | (31,024) | (56,336) | ||||||||||||||||||||||||||||||||||||||||||
| Other assets | 52,590 | 62,500 | ||||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | (13,600) | (13,405) | ||||||||||||||||||||||||||||||||||||||||||
| Assets of discontinued operations | — | 14,393 | ||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 2,523,860 | $ | 2,408,406 | ||||||||||||||||||||||||||||||||||||||||
Liabilities and Shareholders’ Equity1 | ||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 530,740 | $ | 2,865 | 2.19 | % | $ | 537,938 | $ | 3,373 | 2.54 | % | ||||||||||||||||||||||||||||||||
| Savings deposits | 6,496 | 19 | 1.19 | % | 7,834 | 25 | 1.29 | % | ||||||||||||||||||||||||||||||||||||
| Time deposits >= $100 | 34,392 | 297 | 3.50 | % | 25,739 | 212 | 3.34 | % | ||||||||||||||||||||||||||||||||||||
| Other time deposits | 76,633 | 647 | 3.42 | % | 56,703 | 506 | 3.62 | % | ||||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | 648,261 | 3,828 | 2.39 | % | 628,214 | 4,116 | 2.66 | % | ||||||||||||||||||||||||||||||||||||
| Short-term borrowings | 4,067 | 60 | 5.98 | % | 11 | — | — | % | ||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 652,328 | 3,888 | 2.42 | % | 628,225 | 4,116 | 2.66 | % | ||||||||||||||||||||||||||||||||||||
| Non-interest bearing liabilities | ||||||||||||||||||||||||||||||||||||||||||||
| Demand deposits | 421,702 | 405,183 | ||||||||||||||||||||||||||||||||||||||||||
| Accounts and drafts payable | 1,172,102 | 1,072,013 | ||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 32,878 | 52,717 | ||||||||||||||||||||||||||||||||||||||||||
| Liabilities of discontinued operations | — | 21,653 | ||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 2,279,010 | 2,179,791 | ||||||||||||||||||||||||||||||||||||||||||
| Shareholders’ equity | 244,850 | 228,615 | ||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 2,523,860 | $ | 2,408,406 | ||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 21,589 | $ | 19,442 | ||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.95 | % | 3.75 | % | ||||||||||||||||||||||||||||||||||||||||
| Interest spread | 2.25 | % | 1.88 | % | ||||||||||||||||||||||||||||||||||||||||
1.Balances shown are daily averages.
2.Interest income on loans includes net loan fees of $102,000 and $367,000 for the first quarter of 2026 and 2025, respectively.
3.For purposes of these computations, yields on investment securities are computed as interest income divided by the average amortized cost of the investments.
4.Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for both 2026 and 2025. The tax-equivalent adjustment was approximately $372,000 and $168,000 for the first quarter of 2026 and 2025, respectively.
-26-
Analysis of Net Interest Income Changes
The following tables present the changes in interest income and expense between periods due to changes in volume and interest rates. That portion of the change in interest attributable to the combined rate/volume variance has been allocated to rate and volume changes in proportion to the absolute dollar amounts of the change in each.
| (In thousands) | First Quarter of 2026 Compared to First Quarter of 2025 | ||||||||||||||||
| Volume | Rate | Total | |||||||||||||||
| Increase (decrease) in interest income: | |||||||||||||||||
Loans1: | $ | (608) | $ | 535 | $ | (73) | |||||||||||
| Investment securities: | |||||||||||||||||
| Taxable | 1,158 | 923 | 2,081 | ||||||||||||||
Tax-exempt2 | 440 | 532 | 972 | ||||||||||||||
| Short-term investments | (417) | (644) | (1,061) | ||||||||||||||
| Total interest income | 573 | 1,346 | 1,919 | ||||||||||||||
| Increase (decrease) in interest expense: | |||||||||||||||||
| Interest-bearing demand deposits | (45) | (463) | (508) | ||||||||||||||
| Savings deposits | (4) | (2) | (6) | ||||||||||||||
| Time deposits >=$100 | 74 | 11 | 85 | ||||||||||||||
| Other time deposits | 170 | (29) | 141 | ||||||||||||||
| Short-term borrowings | — | 60 | 60 | ||||||||||||||
| Total interest expense | 195 | (423) | (228) | ||||||||||||||
| Net interest income | $ | 378 | $ | 1,769 | $ | 2,147 | |||||||||||
1.Interest income includes net loan fees.
2.Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for the three months ended March 31, 2026 and 2025.
Provision and Allowance for Credit Losses and Allowance for Unfunded Commitments
The Company recorded a provision for credit losses and off-balance sheet credit exposures of $61,000 and $905,000 for the first quarter of 2026 and 2025, respectively. The amount of the provision for (release of) credit losses is derived from the Company’s quarterly Current Expected Credit Loss (“CECL”) model. The amount of the provision for (release of) credit losses will fluctuate as determined by these quarterly analyses. The provision for credit losses in the first quarter of 2026 was driven by the increase in total loans of $27.5 million, or 2.6%, as compared to December 31, 2025.
The Company experienced no loan charge-offs in the first quarter of 2026 or 2025. The ACL was $13.9 million at March 31, 2026 and $13.6 million at December 31, 2025. The ACL represented 1.27% of outstanding loans at March 31, 2026 and 1.28% of outstanding loans at December 31, 2025. The allowance for unfunded commitments was $216,000 at March 31, 2026 and $419,000 at December 31, 2025. There were $3.1 million of nonperforming loans outstanding at March 31, 2026 and $7.0 million at December 31, 2025. The Company has a specific allowance for credit losses of $101,000 allocated to its non-accrual loans at March 31, 2026.
The ACL has been established and is maintained to estimate the lifetime expected credit losses in the loan portfolio. An ongoing assessment is performed to determine if the balance is adequate. Charges or credits are made to expense based on changes in the economic forecast, qualitative risk factors, loan volume, and individual loans. For loans that are individually evaluated, the Company uses two impairment measurement methods: 1) the present value of expected future cash flows and 2) collateral value.
The Company also utilizes ratio analyses to evaluate the overall reasonableness of the ACL compared to its peers and required levels of regulatory capital. Federal and state regulatory agencies review the Company’s methodology for maintaining the ACL. These agencies may require the Company to adjust the ACL based on their judgments and interpretations about information available to them at the time of their examinations.
-27-
Summary of Credit Loss Experience
The following table presents information on the Company's provision for (release of) credit losses and analysis of the ACL:
First Quarter of | |||||||||||||||||||||||
| (In thousands) | 2026 | 2025 | |||||||||||||||||||||
| Allowance for credit losses at beginning of period | $ | 13,597 | $ | 13,395 | |||||||||||||||||||
| Provision for credit losses | 264 | 891 | |||||||||||||||||||||
| Allowance for credit losses at end of period | $ | 13,861 | $ | 14,286 | |||||||||||||||||||
| Allowance for unfunded commitments at beginning of period | $ | 419 | $ | 273 | |||||||||||||||||||
| (Release of) provision for credit losses | (203) | 14 | |||||||||||||||||||||
| Allowance for unfunded commitments at end of period | $ | 216 | $ | 287 | |||||||||||||||||||
| Loans outstanding: | |||||||||||||||||||||||
| Average | $ | 1,066,371 | $ | 1,109,526 | |||||||||||||||||||
March 31 | $ | 1,088,730 | $ | 1,141,874 | |||||||||||||||||||
Ratio of allowance for credit losses to loans outstanding at March 31 | 1.27 | % | 1.25 | % | |||||||||||||||||||
Operating Expenses
Total operating expenses for the first quarter of 2026 increased $2.7 million, or 7.6%, as compared to the first quarter of 2025. The following table details the components of operating expenses:
| (In thousands) | First Quarter of | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Salaries and commissions | $ | 19,268 | $ | 19,663 | |||||||||||||||||||||||||||||||
| Share-based compensation | 1,439 | 1,241 | |||||||||||||||||||||||||||||||||
| Employee profit sharing | 1,634 | 1,502 | |||||||||||||||||||||||||||||||||
| Other benefits | 4,938 | 4,873 | |||||||||||||||||||||||||||||||||
| Personnel | $ | 27,279 | $ | 27,279 | |||||||||||||||||||||||||||||||
| Occupancy | 681 | 721 | |||||||||||||||||||||||||||||||||
| Equipment | 2,432 | 2,294 | |||||||||||||||||||||||||||||||||
| Bad debt recovery | — | (2,000) | |||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 293 | 293 | |||||||||||||||||||||||||||||||||
| Other operating expense | 7,533 | 6,943 | |||||||||||||||||||||||||||||||||
| Total operating expense | $ | 38,218 | $ | 35,530 | |||||||||||||||||||||||||||||||
Salaries and commissions decreased $395,000, or 2.0%, as a result of a decrease in average full-time equivalent employees ("FTEs") of 7.9% due to automation and the ongoing consolidation within the Company's Facilities division, partially offset by merit increases. Share-based compensation and employee profit sharing increased $198,000 and $132,000, respectively, due to the improvement in net income from continuing operations. Other benefits increased $65,000, or 1.3%, due to higher health insurance costs, partially offset by the decline in average FTEs.
Equipment expense increased $138,000, primarily due to an increase in depreciation expense on software related to recently completed technology initiatives.
The Company recorded a bad debt recovery of $2.0 million during the first quarter of 2025 related to a settlement agreement with a third party.
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Net Income from Discontinued Operations
| (In thousands except per share data) | First Quarter of | ||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||||||||||||||||||||||||||
| Processing fees | $ | — | $ | 3,823 | N/M | ||||||||||||||||||||||||||||||||||||
| Financial fees | — | 413 | N/M | ||||||||||||||||||||||||||||||||||||||
| Other fees | 733 | 382 | 91.9 | % | |||||||||||||||||||||||||||||||||||||
| Total revenues | 733 | 4,618 | (84.1) | % | |||||||||||||||||||||||||||||||||||||
| Operating expense | 609 | 4,090 | (85.1) | % | |||||||||||||||||||||||||||||||||||||
| Income before income tax expense | 124 | 528 | (76.5) | % | |||||||||||||||||||||||||||||||||||||
| Income tax expense | 31 | 113 | (72.6) | % | |||||||||||||||||||||||||||||||||||||
| Net income from discontinued operations | $ | 93 | $ | 415 | (77.6) | % | |||||||||||||||||||||||||||||||||||
| Facility transaction volume | — | 133 | N/M | ||||||||||||||||||||||||||||||||||||||
| Facility dollar volume | $ | — | $ | 256,844 | N/M | ||||||||||||||||||||||||||||||||||||
| Average full-time equivalent employees | 23 | 135 | N/M | ||||||||||||||||||||||||||||||||||||||
Net income from discontinued operations was $93,000, a decrease of 322,000, or 77.6% over the same period in the prior year.
Financial Condition
Total assets at March 31, 2026 were $2.53 billion, a decrease of $72.2 million, or 2.8%, from December 31, 2025.
The Company experienced a decrease in cash and cash equivalents of $147.9 million, or 37.7%, during the first quarter of 2026. The change in cash and cash equivalents reflects the Company’s daily liquidity position and is primarily affected by changes in funding sources, mainly accounts and drafts payable, deposits and short-term borrowings, cash flows in and out of loans, investment securities, accounts and drafts receivable, and payments in advance of funding.
The investment securities portfolio increased $14.6 million, or 1.9%, during the first quarter of 2026. The increase is primarily due to purchases of $42.3 million, partially offset by sales of $3.5 million, maturities of $19.5 million, and an increase in unrealized losses of $12.7 million
Loans increased $27.5 million, or 2.6%, from December 31, 2025. The Company experienced growth in its commercial and industrial loan portfolio during the first quarter of 2026.
Payments in advance of funding increased $96.1 million, or 58.4%, primarily due to a higher level of demand for the Company's quick pay solutions as well as timing of quarter end advances.
Accounts and drafts receivable from customers decreased $64.5 million, or 92.9%, from December 31, 2025. The decrease is solely due to timing of customer funding.
Total deposits at March 31, 2026 were $1.11 billion, a decrease of $94.4 million, or 7.9%, from December 31, 2025. Given the nature of the Company's deposit base being larger commercial clients, the ending balance of deposits will fluctuate from period end to period end due to liquidity needs of these clients. Average balances are generally a more meaningful measure of deposits.
Accounts and drafts payable at March 31, 2026 were $1.00 billion, a decrease of $124.7 million, or 11.1%, from December 31, 2025. Accounts and drafts payable are a stable source of funding generated by payment float from transportation and facility clients. The ending balance of accounts and drafts payable will fluctuate from period to period due to the payment processing cycle, which results in lower balances on days when payments clear and higher balances on days when payments are issued. For this reason, average balances are generally a more meaningful measure of accounts and drafts payable.
Short-term borrowings were $145.0 million at March 31, 2026. The Company borrowed on its lines of credit primarily to fund the $96.1 million increase in payments in advance of funding.
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Total liabilities at March 31, 2026 were $2.29 billion, a decrease of $71.0 million, or 3.0%, from December 31, 2025, reflective of the decrease in accounts and drafts payable and total deposits, partially offset by the increase in short-term borrowings.
Total shareholders’ equity at March 31, 2026 was $241.8 million, a $1.2 million decrease from December 31, 2025. The decrease in shareholders’ equity is a result of an increase in accumulated other comprehensive loss of $3.4 million, the repurchase of Company stock of $2.9 million, and dividends paid of $4.1 million, partially offset net income of $8.8 million.
Liquidity and Capital Resources
The Company's liquidity management discipline seeks to ensure funds are available to meet all obligations as they come due. These obligations include processing invoice payments, satisfying depositor withdrawal requests, and funding borrower credit demands. A primary goal of this practice is to achieve these objectives while maximizing profitability. This is accomplished by balancing changes in demand for funds with changes in supply of funds. Primary liquidity to meet demand is provided by short-term liquid assets that can be converted to cash, maturing investment securities and the ability to obtain funds from external sources. The Company's Asset/Liability Committee has direct oversight responsibility for the Company's liquidity position and profile. Management considers both on-balance sheet and off-balance sheet items in its evaluation of liquidity.
The balance of liquid assets consists of cash and cash equivalents, which include cash and due from banks, interest-bearing deposits in other financial institutions, federal funds sold and money market funds. Cash and cash equivalents totaled $244.3 million at March 31, 2026, a decrease of $147.9 million, or 37.7%, from December 31, 2025. At March 31, 2026, these assets represented 9.6% of total assets and are the Company’s and its subsidiaries’ primary source of liquidity to meet future expected and unexpected loan demand, depositor withdrawals or reductions in accounts and drafts payable.
Secondary sources of liquidity include the investment portfolio and borrowing lines. Total investment securities were $785.3 million at March 31, 2026, an increase of $14.6 million from December 31, 2025. These assets represented 31.0% of total assets at March 31, 2026. Of the total portfolio, 1.2% mature in one year, 8.1% mature in one to five years, and 90.7% mature in five or more years. The Company maintains a weighted average duration of its investment securities portfolio of approximately five years given the Company's asset sensitivity with approximately 70% of its funding sources being non-interest bearing.
The Bank has unsecured lines of credit at six correspondent banks to purchase federal funds up to a maximum of $83.0 million in aggregate. As of March 31, 2026, the Bank also has secured lines of credit with the Federal Home Loan Bank of $232.7 million collateralized by mortgage loans. The Bank had no amounts outstanding under any line of credit as of December 31, 2025.
The Company also has secured lines of credit from three banks up to a maximum of $225.0 million in aggregate collateralized by investment securities. There was $145.0 million total outstanding on the Company's lines of credit as of March 31, 2026.
The deposits of the Company's banking subsidiary have historically been stable, consisting of a sizable volume of core deposits related to customers that utilize other commercial products of the Bank, including CassPay and faith-based customers. The accounts and drafts payable generated by the Company has also historically been a stable source of funds. The Company is part of the Certificate of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweep (“ICS”) deposit placement programs. Time deposits include $78.0 million of CDARS deposits and interest-bearing demand deposits include $219.9 million of ICS deposits. These programs offer the Bank’s customers the ability to maximize Federal Deposit Insurance Corporation (“FDIC”) insurance coverage. The Company uses these programs to retain or attract deposits from existing customers.
Net cash flows provided by operating activities were $14.5 million for the three months ended March 31, 2026, compared to $21.6 million for the three months ended March 31, 2025, a decrease of $7.0 million. Net cash flows from investing and financing activities fluctuate greatly as the Company actively manages its investment and loan portfolios and customer activity influences changes in deposit and accounts and drafts payable balances. Other causes for the changes in these account balances are discussed earlier in this report. Due to the daily fluctuations in these account balances, the analysis of changes in average balances, also discussed earlier in this report, can be more indicative of underlying activity than the period-end balances used in the statements of cash flows. Management anticipates that cash and cash equivalents, maturing investments and cash from operations will continue to be sufficient to fund the Company’s operations and capital expenditures in 2026, which are estimated to range from $4.0 million to $6.0 million. Capital expenditures in 2026 are
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expected to primarily consist of purchases of equipment and software related to the payment and information processing services business.
Net income plus amortization of intangible assets, net amortization of premium/discount on investment securities and depreciation of premises and equipment was $10.4 million and $11.1 million for the three months ended March 31, 2026 and 2025, respectively. The decrease was primarily due to lower net amortization of premiums/discounts on investment securities of $644,000 and lower net income of $134,000, partially offset by higher depreciation of $40,000. The net amortization of premium/discount on investment securities is dependent on the type of securities purchased and changes in the prevailing market interest rate environment.
Other factors impacting the $7.0 million decrease in net cash provided by operating activities include:
•A change in accounts receivable of $1.5 million;
•A decrease in the provision for credit losses of $844,000; and
•A change in the current income tax liability of $665,000.
The Company faces market risk to the extent that its net interest income and fair market value of equity are affected by changes in market interest rates. For information regarding the market risk of the Company’s financial instruments, see Item 3, “Quantitative and Qualitative Disclosures about Market Risk.”
There are several trends and uncertainties that may impact the Company’s ability to generate revenues and income at the levels that it has in the past. Those that could significantly impact the Company include the general levels of interest rates, business activity, inflation, and energy costs as well as new business opportunities available to the Company. For more detailed information on these trends and uncertainties and how they can generally affect the Company’s available liquidity, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity” in the Company’s 2025 Form 10-K.
As a bank holding company, the Company and the Bank are subject to capital requirements administered by state and federal banking agencies. Capital adequacy guidelines, and, for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are subject to qualitative judgments by regulators about components, risk weighting, and other factors. In addition, the calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations. For example, as allowed under the Basel III Capital Rules, the Company has elected to opt-out of the requirement to include most components of accumulated other comprehensive income in common equity Tier 1 capital. For more information on these regulatory requirements, including the Basel III Capital Rules and capital classifications, see Item 1, "Business-Supervision and Regulation" and Item 8, Note 2, "Financial Statements and Supplementary Data" of the Company's 2025 Form 10-K.
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The Company and the Bank continue to exceed all regulatory capital requirements, as evidenced by the following capital amounts and ratios:
| Actual | Capital Requirements | Requirement to be Well-Capitalized | |||||||||||||||||||||||||||||||||
| (In thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||
At March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Total capital (to risk-weighted assets) | |||||||||||||||||||||||||||||||||||
| Cass Information Systems, Inc. | $ | 265,864 | 15.63 | % | $ | 136,104 | 8.00 | % | $ N/A | N/A % | |||||||||||||||||||||||||
| Cass Commercial Bank | 217,649 | 19.31 | 90,154 | 8.00 | 112,692 | 10.00 | |||||||||||||||||||||||||||||
| Common Equity Tier I Capital (to risk-weighted assets) | |||||||||||||||||||||||||||||||||||
| Cass Information Systems, Inc. | 251,787 | 14.80 | 76,558 | 4.50 | N/A | N/A | |||||||||||||||||||||||||||||
| Cass Commercial Bank | 204,068 | 18.11 | 50,711 | 4.50 | 73,250 | 6.50 | |||||||||||||||||||||||||||||
| Tier I capital (to risk-weighted assets) | |||||||||||||||||||||||||||||||||||
| Cass Information Systems, Inc. | 251,787 | 14.80 | 102,078 | 6.00 | N/A | N/A | |||||||||||||||||||||||||||||
| Cass Commercial Bank | 204,068 | 18.11 | 67,615 | 6.00 | 90,154 | 8.00 | |||||||||||||||||||||||||||||
| Tier I capital (to average assets) | |||||||||||||||||||||||||||||||||||
| Cass Information Systems, Inc. | 251,787 | 10.05 | 100,170 | 4.00 | N/A | N/A | |||||||||||||||||||||||||||||
| Cass Commercial Bank | 204,068 | 14.54 | 56,136 | 4.00 | 70,170 | 5.00 | |||||||||||||||||||||||||||||
At December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Total capital (to risk-weighted assets) | |||||||||||||||||||||||||||||||||||
| Cass Information Systems, Inc. | $ | 262,792 | 15.95 | % | $ | 131,837 | 8.00 | % | $ N/A | N/A % | |||||||||||||||||||||||||
| Cass Commercial Bank | 217,409 | 19.61 | 88,677 | 8.00 | 110,847 | 10.00 | |||||||||||||||||||||||||||||
| Common Equity Tier I Capital (to risk-weighted assets) | |||||||||||||||||||||||||||||||||||
| Cass Information Systems, Inc. | 248,776 | 15.10 | 74,158 | 4.50 | N/A | N/A | |||||||||||||||||||||||||||||
| Cass Commercial Bank | 203,943 | 18.40 | 49,881 | 4.50 | 72,050 | 6.50 | |||||||||||||||||||||||||||||
| Tier I capital (to risk-weighted assets) | |||||||||||||||||||||||||||||||||||
| Cass Information Systems, Inc. | 248,776 | 15.10 | 98,878 | 6.00 | N/A | N/A | |||||||||||||||||||||||||||||
| Cass Commercial Bank | 203,943 | 18.40 | 66,508 | 6.00 | 88,677 | 8.00 | |||||||||||||||||||||||||||||
| Tier I capital (to average assets) | |||||||||||||||||||||||||||||||||||
| Cass Information Systems, Inc. | 248,776 | 9.91 | 100,367 | 4.00 | N/A | N/A | |||||||||||||||||||||||||||||
| Cass Commercial Bank | 203,943 | 14.48 | 56,357 | 4.00 | 70,446 | 5.00 | |||||||||||||||||||||||||||||
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Impact of New or Not Yet Adopted Accounting Pronouncements
In July 2025, the FASB issued Accounting Standards Update 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"). ASU 2025-05 provides the option to elect a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. ASU 2025-05 was effective for the Company on January 1, 2026 and did not have a material impact on its consolidated financial statements.
In September 2025, the FASB issued Accounting Standards Update 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"). ASU 2025-06 clarified and modernizes the accounting for costs related to internal-use software. The amendments in ASU 2025-06 remove all references to project stages throughout Subtopic 350-40 and clarify the threshold entities apply to begin capitalizing costs. ASU 2025-06 is effective for the Company for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years. The Company is currently evaluating the impact of adoption of ASU 2025-06 on its consolidated financial statements.
In December 2025, the FASB issued Accounting Standards Update 2025-11, Interim Reporting (Topic 720): Narrow-Scope Improvements ("ASU 2025-11"). ASU 2025-11 clarifies and enhances guidance under ASC 720 on interim financial reporting by (i) clarifying the scope of ASC 270 such that it now explicitly applies only to entities that issue complete interim financial statements and related notes under U.S. GAAP, (ii) establishing clear guidance on the form of interim statements and notes, incorporating a comprehensive list of required interim disclosures drawn from across the ASC, and (iii) introducing a requirement to disclose material events and changes occurring after the end of the last annual period that could impact interim results. ASU 2025-11 will be effective for the Company for interim periods beginning in 2028, though early adoption is permitted. The Company does not expect the adoption of 2025-11 to have a material impact on its consolidated financial statements.
Critical Accounting Policies
The Company has prepared the consolidated financial statements in this report in accordance with the Financial Accounting Standards Board Accounting Standards Codification. In preparing the consolidated financial statements, management makes estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. These estimates have been generally accurate in the past, have been consistent and have not required any material changes. There can be no assurances that actual results will not differ from those estimates. The accounting policy that requires significant management estimates and is deemed critical to the Company’s results of operations or financial position has been discussed with the Audit and Risk Committee of the Board of Directors and is described below.
Allowance for Credit Losses. The Company performs periodic and systematic detailed reviews of its loan portfolio to determine management’s estimate of the lifetime expected credit losses. Although these estimates are based on established methodologies for determining allowance requirements, actual results can differ significantly from estimated results. These policies affect both segments of the Company. The impact and associated risks related to these policies on the Company’s business operations are discussed in the “Provision and Allowance for Credit Losses and Allowance for Unfunded Commitments” section of this report.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As described in the Company’s 2025 Form 10-K for the year ended December 31, 2025, the Company manages its interest rate risk through measurement techniques that include gap analysis and a simulation model. As part of the risk management process, asset/liability management policies are established and monitored by management.
The following table summarizes simulated changes in net interest income versus unchanged rates over the next 12 months as of March 31, 2026 and December 31, 2025.
| % change in projected net interest income | ||||||||||||||
| March 31, 2026 | December 31, 2025 | |||||||||||||
| +300 basis points | 1.9 | % | 10.7 | % | ||||||||||
| +200 basis points | 1.9 | % | 7.6 | % | ||||||||||
| +100 basis points | 0.7 | % | 3.7 | % | ||||||||||
| Flat rates | — | % | — | % | ||||||||||
| -100 basis points | 2.6 | % | (2.5) | % | ||||||||||
| -200 basis points | 4.9 | % | (6.1) | % | ||||||||||
| -300 basis points | 6.0 | % | (10.6) | % | ||||||||||
The Company is generally asset sensitive as average interest-earning assets of $2.21 billion for the first quarter of 2026 greatly exceeded average interest-bearing liabilities of $652.3 million. The table above on the projected impact of interest rate shocks results from a static balance sheet at March 31, 2026. Primarily as a result of $145.0 million in short-term borrowings at March 31, 2026, the simulated changes in projected net interest income from a static balance sheet are not indicative of what would occur in the next 12 months as the Company is not forecasting a significant balance in average short-term borrowings for the remainder of 2026. The Company believes that the interest rate shock results shown for December 31, 2025 are more indicative of what would happen in the various interest rate scenarios.
ITEM 4. CONTROLS AND PROCEDURES
The Company’s management, under the supervision and with the participation of the principal executive officer and the principal financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report and concluded that, as of such date, these controls and procedures were effective.
There were no changes in the first quarter of 2026 in the Company's internal control over financial reporting identified by the Company’s principal executive officer and principal financial officer in connection with their evaluation that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended).
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is the subject of various pending or threatened legal actions and proceedings, including those that arise in the ordinary course of business. Management believes the outcome of all such proceedings will not have a material effect on the businesses or financial conditions of the Company or its subsidiaries.
ITEM 1A. RISK FACTORS
The Company has included in Part I, Item 1A of its 2025 Form 10-K, a description of certain risks and uncertainties that could affect the Company’s business, future performance or financial condition (the “Risk Factors”). There are no material changes to the Risk Factors as disclosed in the Company’s 2025 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the three months ended March 31, 2026, the Company repurchased shares of its common stock as follows:
| Period | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
| January 1, 2026–January 31, 2026 | 23,673 | $ | 44.25 | — | 874,970 | |||||||||||||||||||||
| February 1, 2026–February 28, 2026 | 33,243 | 45.07 | 33,243 | 841,727 | ||||||||||||||||||||||
| March 1, 2026–March 31, 2026 | 31,559 | 45.04 | 31,559 | 810,168 | ||||||||||||||||||||||
| Total | 88,475 | $ | 44.84 | 64,802 | 810,168 | |||||||||||||||||||||
(1)During the quarter ended March 31, 2026, there were 64,802 shares repurchased pursuant to the Company's publicly announced treasury stock buyback program and 23,673 shares transferred from employees in satisfaction of tax withholding obligations upon the vesting of restricted stock.
(2)On November 6, 2025, the Board of Directors authorized the repurchase of up to 1,000,000 shares of the Company's common stock with no expiration date.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
(a)None.
(b)There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors implemented in the first quarter of 2026.
(c)During the three months ended March 31, 2026, none of the Company's officers or directors adopted or terminated any "Rule 10b5-1 trading arrangement" or any “non-Rule 10b5-1 trading arrangement,” as such terms are defined under Item 408 of Regulation S-K.
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ITEM 6. EXHIBITS
| Exhibit 101.INS XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||
| Exhibit 101.SCH Inline XBRL Taxonomy Extension Schema Document. | ||
| Exhibit 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||
| Exhibit 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. | ||
| Exhibit 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||
| Exhibit 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||
| Exhibit 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CASS INFORMATION SYSTEMS, INC. | ||||||||
DATE: May 5, 2026 | By | /s/ Martin H. Resch | ||||||
| Martin H. Resch | ||||||||
| President and Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
DATE: May 5, 2026 | By | /s/ Michael J. Normile | ||||||
| Michael J. Normile | ||||||||
| Executive Vice President and Chief Financial Officer | ||||||||
| (Principal Financial and Accounting Officer) | ||||||||
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Exhibit 31.1
CERTIFICATIONS
I, Martin H. Resch, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Cass Information Systems, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 5, 2026 | |||||
| /s/ Martin H. Resch | |||||
| Martin H. Resch | |||||
| President and Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
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Exhibit 31.2
CERTIFICATIONS
I, Michael J. Normile, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Cass Information Systems, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 5, 2026 | |||||
| /s/ Michael J. Normile | |||||
| Michael J. Normile | |||||
| Executive Vice President and Chief | |||||
| Financial Officer | |||||
| (Principal Financial and Accounting Officer) | |||||
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Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Cass Information Systems, Inc. (“the Company”) on Form 10-Q for the period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Martin H. Resch, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Martin H. Resch | |||||
| Martin H. Resch | |||||
| President and Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
| May 5, 2026 | |||||
A signed original of this written statement required by Section 906 has been provided to Cass Information Systems, Inc. and will be retained by Cass Information Systems, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
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Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Cass Information Systems, Inc. (“the Company”) on Form 10-Q for the period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael J. Normile, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Michael J. Normile | |||||
| Michael J. Normile | |||||
| Executive Vice President and Chief Financial Officer | |||||
| (Principal Financial and Accounting Officer) | |||||
| May 5, 2026 | |||||
A signed original of this written statement required by Section 906 has been provided to Cass Information Systems, Inc. and will be retained by Cass Information Systems, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
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