CASS INFORMATION SYSTEMS INC
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
CASS$54.18-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000708781-24-000074
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000708781-24-000091
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 115 previous paragraphs and 111 current paragraphs.
47 unchanged; 54 reworded; 8 added; 12 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
The Company recorded bad debt expense of $6.6 million and $7.8 million for the three and nine months ended September 30, 2024, respectively on a funding receivable related to a facility client. See Note 7, "Commitments and Contingencies" for further information.
Current report
The Company recorded net revenue of $148.8 million during the nine months ended September 30, 2024, up 1.4% from the nine months ended September 30, 2023, primarily driven by higher processing fees. Operating expense increased 8.8% largely driven by $7.9 million of bad debt expense experienced during the first nine months of 2024 on a funding receivable related to a facility client. Net income was $14.6 million and diluted EPS was $1.06 per share, decreases of 32.7% and 32.1% from the nine months ended September 30, 2023, respectively.
Current report
Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023:
Current report
Average loans increased $26.9 million, or 2.6%, to $1.07 billion. The increase in average loans was primarily due to growth in the Company's franchise restaurant and faith-based portfolios. The average yield on loans increased 52 basis points to 5.40%.
Current report
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for the nine months ended September 30, 2024 and 2023.
Current report
The Company recorded bad debt expense of $6.6 million on a funding receivable related to a facility client. While the Company is in the process of litigation to collect the receivable, a full write-off to bad debt expense was recorded as a result of a credit analysis.
Current report
The Company recorded bad debt expense of $7.8 million on a funding receivable related to a facility client. While the Company is in the process of litigation to collect the receivable, a full write-off to bad debt expense was recorded as a result of a credit analysis.
Current report
These factors were partially offset by a decrease in income tax liability $1.6 million.
Removed paragraphs (12)
Previous report
As a result of rising inflation, the Federal Reserve has increased the Federal Funds rate. The increase in the Federal Funds rate has contributed to a slight increase in the Company's net interest margin. Inflation has also had the impact of increasing operating expenses, such as compensation expense.
Previous report
Included in other operating expenses for the second quarter of 2024 are $2.1 million of reserves and other losses on outstanding receivables in addition to $1.3 million related to estimated late fees to be incurred on facility transactions. See Note 7, "Commitments and Contingencies" for further information on the reserves and other losses. The late fees were
Previous report
-22- mostly driven by a check processing delay with our third-party vendor, the same client that incurred a cyber attack, as described above.
Previous report
The Company recorded net revenue of $98.3 million during the first half of 2024, up 0.7% from the first half of June 30, 2023, primarily driven by higher processing fees. Operating expense increased 4.7% primarily driven by the same factors
Previous report
-23- as described above comparing the second quarter of 2024 to the same period in 2023. Net income was $11.6 million and diluted EPS was $0.84 per share, decreases of 18.4% and 18.4% from the first half of June 30, 2023, respectively.
Previous report
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for the three-month periods ended June 30, 2024 and 2023.
Previous report
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for the six-month periods ended June 30, 2024 and 2023.
Previous report
Other operating expenses increased $2.9 million, or 40.9%. Included in other operating expenses for the second quarter of 2024 are $2.1 million of reserves and other losses on outstanding receivables in addition to $1.3 million related to estimated late fees to be incurred on facility transactions. The late fees were mostly driven by a check processing delay with our third-party vendor, the same client that experienced a cyber attack, as described above.
Previous report
Other operating expenses increased $2.4 million, or 16.1% for the same reasons as described for the quarterly variance above, partially offset by lower levels of outside service expense as technology initiatives are completed.
Previous report
•An increase in other operating activities, net of $2.5 million, primarily due to changes in various other assets and liabilities;
Previous report
•A change in the increase (decrease) of the current income tax liability of $1.6 million and
Previous report
•A change in the provision for (release of) credit losses of $1.0 million primarily due to changes in loans outstanding during the respective periods.
Reworded paragraphs (54)
Previous wording
The transportation industry continues to experience a decline in overall freight rates caused by an ongoing freight recession. The freight recession adversely affects the number of freight transactions and dollar amount of invoices processed. Partially as a result, the Company's transportation invoice and dollar volumes declined 3.5% and 9.8%, respectively during the first six months of 2024 as compared to the same period in 2023. Transportation dollar volumes are key to the Company’s revenue as higher volumes generally lead to an increase in payment float, which generates interest income, as well as an increase in payments in advance of funding, which generates financial fees.
Current wording
The transportation industry continues to experience a decline in overall freight rates caused by an ongoing freight recession. The freight recession adversely affects the number of freight transactions and dollar amount of invoices processed. Partially as a result, the Company's transportation invoice and dollar volumes declined 1.5% and 7.3%, respectively during the nine months ended September 30, 2024 as compared to the same period in 2023. Transportation dollar volumes are key to the Company’s revenue as higher volumes generally lead to an increase in payment float, which generates interest income, as well as an increase in payments in advance of funding, which generates financial fees.
Previous wording
Net interest income for the second quarter of 2024 decreased $84,000, or 0.5%, as compared to the same period in 2023. The decrease in net interest income was attributable to a decline in average interest-earning assets of $52.3 million, or 2.6%. The Company had fewer funds to invest due to the loss of approximately $100.0 million of balances in February 2024 as a result of a cyber attack experienced by large client in the Company's CassPay division. CassPay offers solutions such as integrated payments, a B2B payment platform for clients. The Company does not expect these payment volumes and related balances from this client to return.
Current wording
Average interest-earning assets for the third quarter of 2024 declined $58.1 million, or 2.8%, as compared to the third quarter of 2023. The Company had fewer funds to invest due to the loss of approximately $100.0 million of balances in February 2024 as a result of a cyber attack experienced by large client. CassPay offers solutions such as integrated payments, a B2B payment platform for clients. The loss of CassPay balances was partially offset by an increase in facility dollar volumes of 13.4%, leading to higher average accounts and drafts payable.
Previous wording
Despite the decline in average accounts and drafts payable during the quarter, the Company’s liquidity position and balance sheet remains strong. The Company maintained average short-term investments of $265.3 million during the second quarter of 2024. In addition, all of the Company's investment securities are classified as available-for-sale and there were no outstanding borrowings at June 30, 2024.
Current wording
Despite the decline in average interest-earning assets during the quarter, the Company’s liquidity position and balance sheet remains strong. The Company maintained average short-term investments of $338.5 million during the third quarter of 2024. In addition, all of the Company's investment securities are classified as available-for-sale and there were no outstanding borrowings at September 30, 2024.
Previous wording
Also, on July 16, 2024, the Company approved an Amendment providing for the termination of its noncontributory defined-benefit pension plan. The Company expects to record one-time termination expenses of approximately $5.0 million through operating expense related to the plan termination. The expense related to the termination is expected to be incurred during the fourth quarter of 2024 and first quarter of 2025 as the plan liabilities are settled. The successful termination of the plan is expected to reduce run rate operating expense by approximately $1.0 million on an annual basis.
Current wording
Also, on July 16, 2024, the Company approved an Amendment providing for the termination of its noncontributory defined-benefit pension plan. The Company expects to record one-time termination expenses of approximately $4.0 million to $6.0 million through operating expense related to the plan termination during the fourth quarter of 2024 as the plan
Previous wording
The following paragraphs more fully discuss the results of operations and changes in financial condition for the three-month period ended June 30, 2024 (“second quarter of 2024”) compared to the three-month period ended June 30, 2023 (“second quarter of 2023”) and the six-month period ended June 30, 2024 ("first half of 2024") compared to the six-month period ended June 30, 2023 ("first half of 2023"). 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 2023 Form 10-K. Results of operations for the three months ended June 30, 2024 are not necessarily indicative of the results to be attained for any other period.
Current wording
The following paragraphs more fully discuss the results of operations and changes in financial condition for the three month period ended September 30, 2024 (“third quarter of 2024”) compared to the three month period ended September 30, 2023 (“third quarter of 2023”) and the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. 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 2023 Form 10-K. Results of operations for the three month period ended September 30, 2024 are not necessarily indicative of the results to be attained for any other period.
Previous wording
The Company recorded net revenue of $48.6 million during the three-month period ended June 30, 2024, up 0.8% from the three-month period ended June 30, 2023, primarily driven by higher processing fees. Operating expense increased 8.8% primarily driven by $2.1 million of reserves and other losses on outstanding receivables in addition to $1.3 million related to estimated late fees to be incurred on facility transactions. Net income was $4.5 million and diluted EPS was $0.32 per share, decreases of 37.2% and 38.5% from the three-month period ended June 30, 2023, respectively.
Current wording
The Company recorded net revenue of $50.6 million during the three month period ended September 30, 2024, up 2.7% from the three month period ended September 30, 2023, primarily driven by higher net interest income. Operating expense increased 17.1% primarily driven by $6.6 million of bad debt expense on a funding receivable related to a facility client. Net income was $2.9 million and diluted EPS was $0.21 per share, decreases of 60.3% and 61.1% from the three month period ended September 30, 2023, respectively.
Previous wording
The Company posted a 0.78% return on average assets and 8.01% return on average equity.
Current wording
The Company posted a 0.50% return on average assets and 5.04% return on average equity.
Previous wording
The Company posted a 1.00% return on average assets and 10.36% return on average equity.
Current wording
The Company posted a 0.83% return on average assets and 8.54% return on average equity.
Previous wording
Processing fee revenue increased $1.7 million, or 8.9%, primarily attributable to an increase in facility-related invoice volumes of 25.1%. The Company has experienced recent success in adding facility clients with high transaction volumes. Transportation invoice volumes decreased 3.4% over the same period. The decline in transportation volumes is largely due to the ongoing freight recession.
Current wording
Processing fees increased $114,000, or 0.6%, primarily attributable to an increase in facility-related invoice volumes of 26.3%, partially offset by a decrease in ancillary processing fees unrelated to transaction volumes, such as implementation fees. The Company has experienced recent success in adding facility clients with high transaction volumes.
Previous wording
Financial fee revenue decreased $1.5 million, or 6.6%, primarily attributable to a decline in transportation dollar volumes of 9.8% in addition to changes in the manner certain vendors receive payments.
Current wording
Financial fees decreased $420,000, or 3.6%, primarily attributable to a decline in transportation dollar volumes of 1.8%, in addition to changes in the manner certain vendors receive payments.
Previous wording
Processing fee revenue increased $3.5 million, or 8.9%, primarily attributable to an increase in facility-related invoice volumes of 24.0%. Transportation invoice volumes decreased 3.5% over the same period.
Current wording
Processing fees increased $3.6 million, or 6.1%, primarily attributable to an increase in facility-related invoice volumes of 24.8%. Transportation invoice volumes decreased 1.5% over the same period.
Previous wording
Financial fee revenue decreased $1.0 million, or 8.9%, primarily attributable to a decline in transportation dollar volumes of 6.5% in addition to changes in the manner certain vendors receive payments.
Current wording
Financial fees decreased $1.9 million, or 5.6%, primarily attributable to a decline in transportation dollar volumes of 7.3%, in addition to changes in the manner certain vendors receive payments.
Previous wording
The decrease in net interest income is primarily due to the decrease in average earning assets of $52.3 million, or 2.6%, partially offset by an increase in the net interest margin to 3.32%, as compared to 3.25% in the same quarter last year. The yield on interest-earning assets increased 43 basis points from 3.98% to 4.41% while the cost of interest-bearing liabilities increased 46 basis points from 2.89% to 3.35%.
Current wording
The increase in net interest income is primarily due to the increase in the net interest margin to 3.55%, as compared to 3.24% in the same quarter last year, partially offset by the decrease in average earning assets of $58.1 million, or 2.8%. The yield on interest-earning assets increased 44 basis points from 4.13% to 4.57% while the cost of interest-bearing liabilities increased 14 basis points from 3.11% to 3.25%.
Previous wording
Average investment securities decreased $96.1 million, or 12.5%, to $674.3 million. The average yield on taxable investment securities increased 20 basis points to 2.79% and the average yield on tax-exempt investment securities declined 3 basis points to 2.72%. The Company has not offset maturities and sales of investment securities with new purchase volume primarily due to the decline in average funding sources. The increase in the average yield on taxable investment securities was driven by purchases of investment securities at current market interest rates and maturities and sales of securities at below market interest rates.
Current wording
Average investment securities decreased $112.6 million, or 16.0%, to $590.5 million. The average yield on taxable investment securities increased 26 basis points to 2.88% and the average yield on tax-exempt investment securities increased 18 basis points to 2.81% driven by purchases of investment securities at current market interest rates and maturities and sales of securities at below market interest rates.
Previous wording
Average short-term investments, consisting of interest-bearing deposits in other financial institutions and federal funds sold, increased $80.1 million, or 43.2%, to $265.3 million. The increase is primarily a result of the sale and maturities of investment securities and the decline in average loans, partially offset by a decrease in average funding sources. The average yield on short-term investments increased 40 basis points to 4.95%, primarily due to higher average short-term interest rates when comparing the periods. The majority of these short-term investments are held at the Federal Reserve Bank.
Current wording
Average short-term investments, consisting of interest-bearing deposits in other financial institutions and federal funds sold, increased $27.7 million, or 8.9%, to $338.5 million. The increase is primarily a result of the decline in average investment securities, partially offset by a decrease in average funding sources. The average yield on short-term investments decreased 8 basis points to 4.94%, primarily due to the recent decline in the Federal Funds rate of 50 basis points. The majority of these short-term investments are held at the Federal Reserve Bank.
Previous wording
The average balance of interest-bearing deposits increased $85.0 million, or 15.5%, to $635.0 million. Average non-interest-bearing demand deposits decreased $125.7 million, or 22.7%, to $427.5 million. The Company has experienced a migration of client funds from non-interest bearing to interest-bearing driven by the higher interest rate environment. The average rate paid on interest-bearing deposits increased 82 basis points to 3.32% due to higher average short-term interest rates when comparing the periods.
Current wording
The average balance of interest-bearing deposits increased $38.6 million, or 6.5%, to $630.2 million. Average non-interest-bearing demand deposits decreased $76.1 million, or 15.8%, to $404.4 million. The Company has experienced a migration of client funds from non-interest bearing to interest-bearing driven by the higher interest rate environment prior to the recent 50 basis point decline in the Federal Funds rate. The average rate paid on interest-bearing deposits increased 14 basis points to 3.25%.
Previous wording
Average accounts and drafts payable decreased $52.3 million, or 5.0%, to $996.9 million. The decrease in average accounts and drafts payable was primarily reflective of a cyber event at a client, as described above, which decreased average balances approximately $100.0 million as well as the decrease in transportation dollar volumes of 6.5%, partially offset by an increase in facility dollar volume of 10.1%.
Current wording
Average accounts and drafts payable decreased $37.0 million, or 3.5%, to $1.03 billion. The decrease in average accounts and drafts payable was primarily reflective of a cyber event at a client during the first quarter of 2024, which decreased average balances by approximately $100.0 million as well as the decrease in transportation dollar volumes of 1.8%, partially offset by an increase in facility dollar volume of 13.4%.
Previous wording
The decrease in net interest income is primarily due to the decrease in average earning assets of $75.5 million, or 3.6%, partially offset by the increase in the net interest margin to 3.29%, as compared to 3.24% in the prior year. The yield on
Current wording
The increase in net interest income is primarily due to the increase in the net interest margin to 3.38%, as compared to 3.24% in the prior year, partially offset by the decrease in average earning assets of $69.6 million, or 3.4%. The yield on
Previous wording
-25- interest-earning assets increased 43 basis points from 3.91% to 4.34% while the cost of interest-bearing liabilities increased 80 basis points from 2.52% to 3.32%.
Current wording
-25- interest-earning assets increased 44 basis points from 3.98% to 4.42% while the cost of interest-bearing liabilities increased 57 basis points from 2.73% to 3.30%.
Previous wording
Average loans decreased $36.4 million, or 3.4%, to $1.04 billion. The decrease in average loans was primarily due to the Company opting to be more selective in booking new loans as a result of a decline in average deposits. The average yield on loans increased 44 basis points to 5.26%.
Current wording
Average loans decreased $23.0 million, or 2.2%, to $1.04 billion. The decrease in average loans was primarily due to the Company opting to be more selective in booking new loans as a result of a decline in average deposits. The average yield on loans increased 47 basis points to 5.24%.
Previous wording
Average investment securities decreased $96.0 million, or 12.8%, to $653.7 million. The Company has not offset maturities and sales of investment securities with new purchase volume primarily due to the decline in average funding sources. The average yield on taxable investment securities increased 25 basis points to 2.88% and the average yield on tax-exempt investment securities increased 7 basis points to 2.75% driven by purchases of investment securities at current market interest rates and maturities and sales of securities at below market interest rates.
Current wording
Average investment securities decreased $101.6 million, or 13.6%, to $646.1 million. The average yield on taxable investment securities increased 22 basis points to 2.82% and the average yield on tax-exempt investment securities increased 3 basis points to 2.75%. The increase in the average yield on taxable investment securities was driven by purchases of investment securities at current market interest rates and maturities and sales of securities at below market interest rates.
Previous wording
Average short-term investments, consisting of interest-bearing deposits in other financial institutions and federal funds sold, increased $68.8 million, or 28.7%, to $308.7 million. The increase is primarily a result of the decline in average investment securities and loans, partially offset by a decrease in average funding sources. The average yield on short-term investments increased 64 basis points to 5.02%, primarily due to higher average short-term interest rates when comparing the periods. The majority of these short-term investments are held at the Federal Reserve Bank.
Current wording
Average short-term investments, consisting of interest-bearing deposits in other financial institutions and federal funds sold, increased $54.9 million, or 20.8%, to $318.7 million. The increase is primarily a result of the decline in average investment securities and loans, partially offset by a decrease in average funding sources. The average yield on short-term investments increased 35 basis points to 4.99%, primarily due to higher average short-term interest rates when comparing the periods. The majority of these short-term investments are held at the Federal Reserve Bank.
Previous wording
The average balance of interest-bearing deposits increased $129.0 million, or 25.3%, to $638.3 million. Average non-interest-bearing demand deposits decreased $145.6 million, or 26.3%, to $407.1 million. The Company has experienced a migration of client funds from non-interest bearing to interest-bearing driven by the higher interest rate environment. The average rate paid on interest-bearing deposits increased 47 basis points to 3.35% due to higher average short-term interest rates when comparing the periods.
Current wording
The average balance of interest-bearing deposits increased $69.4 million, or 12.3%, to $633.4 million. Average non-interest-bearing demand deposits decreased $109.0 million, or 20.6%, to $419.7 million. The Company has experienced a migration of client funds from non-interest bearing to interest-bearing driven by the higher interest rate environment prior to the recent 50 basis point decline in the Federal Funds rate. The average rate paid on interest-bearing deposits increased 58 basis points to 3.30% due to higher average short-term interest rates when comparing the periods.
Previous wording
Average accounts and drafts payable decreased $55.7 million, or 5.2%, to $1.02 billion. The decrease in average accounts and drafts payable was primarily reflective of a cyber event experienced by a client, as described above, which decreased average balances approximately $100.0 million as well as the decrease in transportation dollar volumes of 9.8%, partially offset by an increase in facility dollar volumes of 4.8%.
Current wording
Average accounts and drafts payable decreased $49.4 million, or 4.6%, to $1.02 billion. The decrease in average accounts and drafts payable was primarily reflective of a cyber event experienced by a client during the first quarter of 2024, which decreased average balances approximately $100.0 million as well as the decrease in transportation dollar volumes of 7.3%, partially offset by an increase in facility dollar volumes of 7.7%.
Previous wording
Interest income on loans includes net loan fees of $146,000 and $291,000 for the second quarter of 2024 and 2023, respectively.
Current wording
Interest income on loans includes net loan fees of $154,000 and $98,000 for the third quarter of 2024 and 2023, respectively.
Previous wording
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for both 2024 and 2023. The tax-equivalent adjustment was approximately $239,000 and $263,000 for the second quarter of 2024 and 2023, respectively.
Current wording
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for both 2024 and 2023. The tax-equivalent adjustment was approximately $237,000 and $256,000 for the third quarter of 2024 and 2023, respectively.
Previous wording
Interest income on loans includes net loan fees of $229,000 and $511,000 for the six-month periods ended June 30, 2024 and 2023, respectively.
Current wording
Interest income on loans includes net loan fees of $383,000 and $609,000 for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for both the six-month periods ended June 30, 2024 and 2023. The tax-equivalent adjustment was approximately $483,000 and $584,000 for the six-month periods ended June 30, 2024 and 2023, respectively.
Current wording
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for both the nine months ended September 30, 2024 and 2023. The tax-equivalent adjustment was approximately $720,000 and $840,000 for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
The Company recorded a provision for credit losses and off-balance sheet credit exposures of $400,000 for the second quarter of 2024 and release of credit losses of $120,000 in second quarter of 2023. The Company recorded a provision for credit losses and off-balance sheet credit exposures of $495,000 for the first half of 2024 and release of credit losses of $460,000 in first half of 2023.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 second quarter and first half of 2024 was driven by an increase in total loans of $47.7 million, or 4.7%, as compared to December 31, 2023.
Current wording
The Company recorded a release of credit losses and off-balance sheet credit exposures of $140,000 for the third quarter of 2024 and a provision for credit losses of $125,000 in third quarter of 2023. The Company recorded a provision for credit losses and off-balance sheet credit exposures of $355,000 for the nine months ended of September 30, 2024 and a release of credit losses of $335,000 for the nine months ended September 30, 2023. The amount of the (release of) provision for credit losses is derived from the Company’s quarterly Current Expected Credit Loss (“CECL”) model. The amount of the (release of) provision for credit losses will fluctuate as determined by these quarterly analyses. The provision for credit losses for the nine months ended September 30, 2024 was driven by an increase in total loans of $64.1 million, or 6.3%, as compared to December 31, 2023.
Previous wording
The Company experienced no loan charge-offs in the second quarter of 2024 and 2023. The ACL was $13.6 million at June 30, 2024 and $13.1 million at December 31, 2023. The ACL represented 1.28% of outstanding loans at June 30, 2024 and 1.29% of outstanding loans at December 31, 2023. The allowance for unfunded commitments was $82,000 at June 30, 2024 and $132,000 at December 31, 2023. There were no nonperforming loans outstanding at June 30, 2024 and December 31, 2023.
Current wording
The Company experienced no loan charge-offs in the third quarters of 2024 and 2023. The ACL was $13.4 million at September 30, 2024 and $13.1 million at December 31, 2023. The ACL represented 1.25% of outstanding loans at September 30, 2024 and 1.29% of outstanding loans at December 31, 2023. The allowance for unfunded commitments was $129,000 at September 30, 2024 and $132,000 at December 31, 2023. There were no nonperforming loans outstanding at September 30, 2024 and December 31, 2023.
Previous wording
Total operating expenses for the second quarter of 2024 increased $3.5 million, or 8.8%, compared to the second quarter of 2023. Total operating expenses for the first half of 2024 increased $3.8 million, or 4.7%, compared to the first half of 2023.The following table details the components of operating expenses:
Current wording
Total operating expenses for the third quarter of 2024 increased $6.8 million, or 17.1%, compared to the third quarter of 2023. Total operating expenses for the nine months ended September 30, 2024 increased $10.6 million, or 8.8%, compared to the nine months ended September 30, 2023. The following table details the components of operating expenses:
Previous wording
Personnel expenses increased $425,000, or 1.4%. Salaries and commissions increased $642,000, or 2.7%, primarily as a result of merit increases. Share-based compensation decreased $435,000, reflecting the Company's financial performance and the impact on performance-based restricted stock between the periods.
Current wording
Personnel expense increased $231,000, or 0.8%. Salaries and commissions increased $459,000, or 2.0%, primarily as a result of merit increases and $280,000 severance recorded during the third quarter of 2024, partially offset by a decrease in employee profit sharing due to the decline in net income. Share-based compensation decreased $40,000, reflecting the Company's financial performance and the impact on performance-based restricted stock between the periods.
Previous wording
Equipment expense increased $239,000, or 13.7%, partially due to an increase in depreciation expense related to technology initiatives throughout our lines of business.
Current wording
Equipment expense increased $318,000, or 17.8%, primarily due to an increase in depreciation expense related to technology initiatives throughout the Company's lines of business.
Previous wording
Personnel expenses increased $1.0 million, or 1.7%. Salaries and commissions increased $2.0 million, or 4.4%, primarily as a result of merit increases. Share-based compensation decreased $1.2 million, reflecting the Company's financial performance and the impact on performance-based restricted stock between the periods.
Current wording
Personnel expense increased $1.2 million, or 1.4%. Salaries and commissions increased $2.5 million, or 3.6%, primarily as a result of merit increases. Share-based compensation decreased $1.2 million, reflecting the Company's financial performance and the impact on performance-based restricted stock between the periods.
Previous wording
Equipment expense increased $470,000, or 13.8%, partially due to an increase in depreciation expense related to technology initiatives throughout our lines of business.
Current wording
Equipment expense increased $788,000, or 15.2%, primarily due to an increase in depreciation expense related to technology initiatives throughout the Company's lines of business.
Previous wording
Total assets at June 30, 2024 were $2.28 billion, a decrease of $196.0 million, or 7.9%, from December 31, 2023.
Current wording
Total assets at September 30, 2024 were $2.26 billion, a decrease of $217.9 million, or 8.8%, from December 31, 2023.
Previous wording
The Company experienced a decrease in cash and cash equivalents of $148.7 million, or 39.9%, during the first half of 2024. 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 and deposits, cash flows in and out of loans, investments securities and payments in advance of funding.
Current wording
The Company experienced a decrease in cash and cash equivalents of $141.9 million, or 38.1%, during the nine months ended September 30, 2024. 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 and deposits, cash flows in and out of loans, investments securities and payments in advance of funding.
Previous wording
The investment securities portfolio decreased $86.3 million, or 13.8%, during the first half of 2024. The decrease is due to sales of $25.0 million and maturities of $103.6 million, partially offset by purchases of $47.0 million.
Current wording
The investment securities portfolio decreased $76.4 million, or 12.2%, during the nine months ended September 30, 2024. The decrease is due to sales of $25.0 million and maturities of $130.5 million, partially offset by purchases of $71.1 million.
Previous wording
Loans increased $47.7 million, or 4.7%, from December 31, 2023. The Company experienced growth in its franchise restaurant and equipment finance loan portfolios during the first half of 2024.
Current wording
Loans increased $64.1 million, or 6.3%, from December 31, 2023. The Company experienced growth in its franchise restaurant, faith-based and commercial and industrial loan portfolios during the nine months ended September 30, 2024.
Previous wording
Payments in advance of funding increased $15.7 million, or 7.9%. from December 31, 2023 due to timing of funding.
Current wording
Payments in advance of funding increased $8.3 million, or 4.2%. from December 31, 2023 due to timing of funding.
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
-22- liabilities are settled. The successful termination of the plan is expected to reduce run rate operating expense by approximately $1.0 million on an annual basis.
Current report — wording carried from elsewhere
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for the three months ended September 30, 2024 and 2023.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Average loans decreased $48.2 million, or 4.5%, to $1.03 billion. The decrease in average loans was primarily due to the Company opting to be more selective in booking new loans as a result of a decline in average deposits. The average yield on loans increased 44 basis points to 5.16%.
Previous report — wording carried elsewhere
Net cash flows provided by operating activities were $20.5 million for the six-month period ended June 30, 2024, compared to $17.0 million for the six-month period ended June 30, 2023, an increase of $3.5 million. Net cash flows from investing and financing activities fluctuate greatly as the Company actively manages its investment and loan portfolios and