CASS INFORMATION SYSTEMS INC
For the period ended Mar 31, 2026. Filed May 5, 2026.
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.
Mar 31, 2026 · Filed May 5, 2026
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 2025-09-30; filed 2025-11-04.
0000708781-25-000105
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0000708781-26-000022
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 119 previous paragraphs and 91 current paragraphs.
38 unchanged; 38 reworded; 12 added; 31 removed; 12 previous and 3 current paragraphs rearranged.
Tables are not compared: 11 previous and 9 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 (12)
Current report
Recent Industry Developments and Items of Note
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
Net income from discontinued operations was $93,000, a decrease of 322,000, or 77.6% over the same period in the prior year.
Current report
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.
Current report
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.
Current report
-30- expected to primarily consist of purchases of equipment and software related to the payment and information processing services business.
Current report
•A decrease in the provision for credit losses of $844,000; and
Current report
•A change in the current income tax liability of $665,000.
Current report
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.
Removed paragraphs (31)
Previous report
Recent Industry Developments
Previous report
While freight rates have recently begun gradually increasing after several quarters of decline since 2023, volumes continue to decline on a year over year basis which continues to put pressure on transportation related processing fees. In addition, carrier consolidation with small and medium-sized trucking companies exiting the market or selling to larger carriers continues to put downward pressure on financial fees as the smaller trucking companies were larger users of our quick pay solutions.
Previous report
Recent Items of Note
Previous report
Net interest income increased $3.5 million, or 19.3%, as compared to the same period last year. The increase in net interest income was attributable to the net interest margin improving to 3.87% as compared to 3.55% in the same period last year, in addition to an increase in average interest-earning assets of $187.6 million, or 9.4%. The Company generally benefits from a higher interest rate environment due to a large percentage of its funding sources being non-interest bearing.
Previous report
On July 4, 2025 the president signed into law the One Big Beautiful Bill Act which makes various changes to the tax law. The most significant impacts relate to the deductibility of interest expense, research and experimentation expenses and accelerated deprecation deductions, among others. The full impact of the bill is being analyzed by the Company and could have an impact on income tax expense in future periods.
Previous report
-28- by an increase in personnel expenses of $1.1 million. Net income was $9.1 million and diluted EPS was $0.68 per share, increases of 209.9% and 223.8% from the three months period ended September 30, 2024, respectively.
Previous report
The Company recorded net revenue of $140.9 million during the nine months ended September 30, 2025, an increase of 3.9% from the nine months ended September 30, 2024, primarily driven by an increase in net interest income, partially offset by a loss on the sale of investment securities and lower financial fees. Operating expense decreased 4.5% primarily driven by a $9.8 million change in bad debt expense (recovery), partially offset by an increase in personnel expenses of $3.0 million. Net income was $26.9 million and diluted EPS was $1.99 per share, increases of 84.8% and 87.7% from the nine months ended September 30, 2024, respectively.
Previous report
Includes utility and waste.
Previous report
Financial fees decreased $601,000, or 5.5%, primarily attributable to a decline in average payments in advance of funding of 13.4%, in addition to changes in the manner whereby facility vendors receive payments.
Previous report
Financial fees decreased $1.5 million, or 4.8%, primarily attributable to a decline in average payments in advance of funding of 13.9%, in addition to changes in the manner whereby facility vendors receive payments.
Previous report
The Company sold $34.0 million of corporate investment securities with a weighted-average yield of 2.29% at a loss of $3.6 million during June 2025. The proceeds from these sales were redeployed into higher yielding interest-earning assets during the third quarter of 2025.
Previous report
Average loans increased $22.6 million, or 2.1%, to $1.10 billion. The average yield on loans increased 26 basis points to 5.66%, primarily due to loan growth at current market interest rates and continued maturing and re-pricing of existing fixed rate loans to current market interest rates.
Previous report
The increase in net interest income is primarily attributable to the net interest margin improving to 3.80% as compared to 3.38% in the same period last year, in addition to an increase in average earning assets of $120.6 million, or 6.0%. The yield on interest-earning assets increased 16 basis points from 4.42% to 4.58% while the cost of interest-bearing liabilities decreased 61 basis points from 3.30% to 2.69%.
Previous report
Average loans increased $67.3 million, or 6.5%, to $1.11 billion. The average yield on loans increased 40 basis points to 5.64%, primarily due to loan growth at current market interest rates and continued maturing and re-pricing of existing fixed rate loans to current market interest rates.
Previous report
Average investment securities increased $17.1 million, or 2.6%, to $663.2 million. The increase was driven by the utilization of available liquidity arising from an increase in average accounts and drafts payable to purchase investment securities. The average yield on taxable investment securities increased 29 basis points to 3.11% and the average yield on tax-exempt investment securities increased 25 basis points to 3.00%.
Previous report
The average balance of interest-bearing deposits decreased $15.3 million, or 2.4%, to $618.1 million. Average non-interest-bearing demand deposits decreased $18.2 million, or 4.3%, to $401.5 million. The Company has experienced deposit attrition due to a decrease in the overall level of some larger commercial deposits due to client funding needs for acquisitions and other purposes. The average rate paid on interest-bearing deposits decreased 61 basis points to 2.69% due to the reduction in short-term interest rates in the last four months of 2024 and again in September 2025.
Previous report
Balances shown are daily averages.
Previous report
Interest income on loans includes net loan fees of $599,000 and $383,000 for the nine months ended September 30, 2025 and 2024, respectively.
Previous report
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for both the nine months ended September 30, 2025 and 2024. The tax-equivalent adjustment was approximately $699,000 and $720,000 for the nine months ended September 30, 2025 and 2024, respectively.
Previous report
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for the nine months ended September 30, 2025 and 2024.
Previous report
The Company incurred bad debt expense of $6.6 million during the third quarter of 2024 and $0 in the third quarter of 2025.
Previous report
The Company recorded a bad debt recovery during the nine months ended 2025 of $2.0 million related to partial consideration received in a litigation settlement as more fully described in Note 8 to the consolidated financial statements. The Company incurred $7.8 million of bad debt expense in the nine months ended 2024 related to the same matter.
Previous report
Net loss from discontinued operations was $106,000, as compared to $90,000 during the same period in the prior year.
Previous report
Net income from discontinued operations was $4.0 million, an increase of $3.8 million over the same period in the prior year. The increase is primarily due to the gain on sale of the TEM Business Unit of $3.6 million in the second quarter of 2025.
Previous report
Payments in advance of funding decreased $20.5 million, or 9.8%, primarily due to the continued consolidation of freight carriers, partially offset by the 2.0% increase in transportation dollar volumes.
Previous report
Assets of discontinued operations declined $14.4 million due to the sale of the TEM business on June 30, 2025.
Previous report
Liabilities of discontinued operations declined $22.3 million due to the sale of the TEM business on June 30, 2025.
Previous report
•A loss on sale of investment securities of $3.6 million;
Previous report
•A change in income tax liabilities of $2.1 million.
Previous report
These were partially offset by a decrease in net cash (used in) provided by discontinued operations of $3.1 million and a change in other operating activities, net of $3.0 million, primarily due to changes in various other assets and liabilities related to client funding and reimbursements.
Previous report
In December 2023, the FASB issued 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). This ASU requires public business entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold. It also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state, and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, though early adoption is permitted. ASU 2023-09 is not expected to have a significant impact on the Company's financial statements.
Reworded paragraphs (38)
Previous wording
The Company has experienced an increase in facility dollar volumes in recent quarters due to higher energy usage and prices, in addition to onboarding new clients with high dollar volumes as compared to the related transaction count. 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.
Current wording
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.
Previous wording
September 30, 2024. 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 2024 Form 10-K. Results of operations for the three months ended September 30, 2025 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 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.
Previous wording
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 being sold related to the Company's TEM Business Unit as of September 30, 2025 and December 31, 2024, and for the three and nine months ended September 30, 2025, and 2024, 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 and subsequent events associated with discontinued operations.
Current wording
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.
Previous wording
The Company recorded net revenue of $50.1 million during the third quarter of 2025, an increase of 7.6% from the third quarter of 2024, primarily driven by an increase in net interest income, partially offset by lower financial fees. Operating expense decreased 10.1% primarily driven by $6.6 million of bad debt expense in the third quarter of 2024, partially offset
Current wording
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.
Previous wording
The Company posted a 1.44% return on average assets and 15.29% return on average equity.
Current wording
The Company posted a 1.42% return on average assets and 14.63% return on average equity.
Previous wording
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 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:
Current wording
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
Previous wording
Processing fees decreased $31,000, or 0.2% over the same period in the prior year reflecting lower transportation and facility transaction volumes.
Current wording
Processing fees decreased $741,000, or 4.5% over the same period in the prior year reflecting lower transportation and facility transaction volumes.
Previous wording
The increase in net interest income is primarily attributable to the net interest margin improving to 3.87% as compared to 3.55% in the same period last year, in addition to an increase in average earning assets of $187.6 million, or 9.4%. The yield on interest-earning assets increased 5 basis points from 4.57% to 4.62% while the cost of interest-bearing liabilities decreased 55 basis points from 3.25% to 2.70%.
Current wording
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%.
Previous wording
Average investment securities increased $121.3 million, or 20.5%, to $711.7 million. The increase was driven by the utilization of available liquidity arising from an increase in average accounts and drafts payable to purchase investment securities. The average yield on taxable investment securities increased 44 basis points to 3.32% and the average yield on tax-exempt investment securities increased 59 basis points to 3.40%.
Current wording
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
Previous wording
Average short-term investments, consisting of interest-bearing deposits in other financial institutions and federal funds sold, increased $36.3 million, or 11.4%, to $355.0 million. The increase is primarily a result of the increase in average funding sources, partially offset by the increase in average loans and average investment securities. The average yield on short-term investments decreased 94 basis points to 4.05%, primarily due to the decrease in the Federal Funds rate that occurred in the last four months of 2024 and again in September 2025. 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, 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.
Previous wording
The average balance of interest-bearing deposits decreased $19.8 million, or 3.1%, to $610.4 million. Average non-interest-bearing demand deposits increased $1.9 million, or 0.5%, to $406.2 million. The Company has experienced deposit attrition due to a decrease in the overall level of some larger commercial deposits due to client funding needs for acquisitions and other purposes. The average rate paid on interest-bearing deposits decreased 55 basis points to 2.70% due to the reduction in short-term interest rates in the last four months of 2024 and then again in September 2025.
Current wording
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.
Previous wording
Average accounts and drafts payable increased $196.5 million, or 19.4%, to $1.21 billion. The increase in average accounts and drafts payable was primarily driven by the increase in facility dollar volumes of 13.9% as well as the increase in transportation dollar volumes of 2.0%.
Current wording
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%.
Previous wording
Interest income on loans includes net loan fees of $114,000 and $154,000 for the third quarter of 2025 and 2024, respectively.
Current wording
Interest income on loans includes net loan fees of $102,000 and $367,000 for the first quarter of 2026 and 2025, respectively.
Previous wording
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for both 2025 and 2024. The tax-equivalent adjustment was approximately $316,000 and $237,000 for the third quarter of 2025 and 2024, respectively.
Current wording
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.
Previous wording
The Company recorded a release of credit losses and off-balance sheet credit exposures of $193,000 and $140,000 for the third quarter of 2025 and 2024, respectively. The Company recorded a provision for credit losses and off-balance sheet credit exposures of $737,000 and $355,000 for the nine months ended September 30, 2025 and 2024, 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 release of credit losses in the third quarter of 2025 was driven by the decrease in total loans of $28.7 million, or 2.6%, partially offset by the increase in nonaccrual loans of $3.7 million as compared to June 30, 2025.
Current wording
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.
Previous wording
The Company experienced no loan charge-offs in the third quarter of 2025 and 2024. The ACL was $14.1 million at September 30, 2025 and $13.4 million at December 31, 2024. The ACL represented 1.29% of outstanding loans at September 30, 2025 and 1.24% of outstanding loans at December 31, 2024. The allowance for unfunded commitments was $339,000 at September 30, 2025 and $273,000 at December 31, 2024. There were $7.1 million of nonperforming loans outstanding at September 30, 2025 and $0 at December 31, 2024. The Company has a specific allowance for credit losses of $141,000 allocated to its nonaccrual loans at September 30, 2025.
Current wording
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.
Previous wording
Total operating expenses for the third quarter of 2025 decreased $4.3 million, or 10.1%, as compared to the third quarter of 2024. Total operating expenses for the nine months ended 2025 decreased $5.3 million, or 4.5%, as compared to the nine months ended 2024. The following table details the components of operating expenses:
Current wording
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:
Previous wording
Personnel expenses increased $1.1 million, or 4.1%. Salaries and commissions decreased $425,000, or 2.1%, as a result of a decrease in average full-time equivalent employees ("FTEs") of 6.9% due to strategic investments in various technology initiatives. Share-based compensation and employee profit sharing increased $155,000 and $1.1 million, respectively, due to the improvement in earnings. Other benefits increased $491,000, or 11.4%, due to higher health insurance costs, partially offset by the decline in average FTEs.
Current wording
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.
Previous wording
Equipment expense increased $455,000, primarily due to an increase in depreciation expense on software related to recently completed technology initiatives.
Current wording
Equipment expense increased $138,000, primarily due to an increase in depreciation expense on software related to recently completed technology initiatives.
Previous wording
Total assets at September 30, 2025 were $2.45 billion, an increase of $58.5 million, or 2.4%, from December 31, 2024.
Current wording
Total assets at March 31, 2026 were $2.53 billion, a decrease of $72.2 million, or 2.8%, from December 31, 2025.
Previous wording
The Company experienced a decrease in cash and cash equivalents of $91.1 million, or 26.0%, during the nine months ended 2025. 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, investment securities and payments in advance of funding.
Current wording
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.
Previous wording
The investment securities portfolio increased $189.3 million, or 35.9%, during the nine months ended 2025. The increase is due to purchases of $354.8 million and a decrease in unrealized losses of $20.7 million, partially offset by sales of $125.8 million and maturities of $55.8 million.
Current wording
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
Previous wording
Loans increased $6.4 million, or 0.6%, from December 31, 2024. The Company experienced growth in its commercial and industrial and faith-based loan portfolios during the nine months ended 2025.
Current wording
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.
Previous wording
Accounts and drafts receivable from customers decreased $6.1 million, or 10.9%, from December 31, 2024. The decrease is solely due to timing of customer funding.
Current wording
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.
Previous wording
Total deposits at September 30, 2025 were $1.03 billion, an increase of $66.7 million, or 6.9%, from December 31, 2024. 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.
Current wording
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.
Previous wording
Accounts and drafts payable at September 30, 2025 were $1.13 billion, an increase of $761,000, or 0.1%, from December 31, 2024. 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.
Current wording
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.
Previous wording
Total liabilities at September 30, 2025 were $2.21 billion, an increase of $44.1 million, or 2.0%, from December 31, 2024, reflective of the increase in accounts and drafts payable and in total deposits.
Current wording
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.
Previous wording
Total shareholders’ equity at September 30, 2025 was $243.4 million, a $14.4 million increase from December 31, 2024. The increase in shareholders’ equity is a result of net income of $26.9 million, and a decrease in accumulated other comprehensive loss of $15.8 million primarily related to the fair value of available-for-sale investment securities, partially offset by the repurchase of Company stock of $17.7 million, and dividends paid of $12.4 million.
Current wording
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.
Previous wording
The discipline of liquidity management as practiced by the Company seeks to ensure that funds are available to fulfill all payment obligations relating to invoices processed as they become due and meet depositor withdrawal requests and borrower credit demands while at the same time 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.
Current wording
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.
Previous wording
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 $258.6 million at September 30, 2025, a decrease of $91.1 million, or 26.0%, from December 31, 2024. At September 30, 2025, these assets represented 10.5% 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.
Current wording
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.
Previous wording
Secondary sources of liquidity include the investment portfolio and borrowing lines. Total investment securities were $717.4 million at September 30, 2025, an increase of $189.3 million from December 31, 2024. These assets represented 29.2% of total assets at September 30, 2025. Of the total portfolio, 1.6% mature in one year, 10.1% mature in one to five years, and 88.3% mature in five or more years.
Current wording
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.
Previous wording
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 September 30, 2025, the Bank also has secured lines of credit with the Federal Home Loan Bank of $220.7 million collateralized by mortgage loans. 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 were no amounts outstanding under any line of credit as of September 30, 2025 or December 31, 2024.
Current wording
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.
Previous wording
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 $62.4 million of CDARS deposits and interest-bearing demand deposits include $135.3 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.
Current wording
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.
Previous wording
Net cash flows provided by operating activities were $32.6 million for the nine months ended September 30, 2025, compared to $20.3 million for the nine months ended September 30, 2024, an increase of $12.3 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
Current wording
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
Previous wording
Net income plus amortization of intangible assets, net amortization of premium/discount on investment securities and depreciation of premises and equipment was $33.3 million and $21.5 million for the nine months ended 2025 and 2024, respectively. The nine months ended September 30, 2025 reflected higher net income of $12.4 million and higher depreciation of $988,000, partially offset by a decrease in net amortization of premium/discount on investment securities of $1.9 million. 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.
Current wording
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.
Previous wording
Other factors impacting the $12.3 million increase in net cash provided by operating activities include:
Current wording
Other factors impacting the $7.0 million decrease in net cash provided by operating activities include:
Previous wording
•A change in accounts receivable of $3.7 million; and
Current wording
•A change in accounts receivable of $1.5 million;
Previous wording
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
Current wording
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.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
-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:
Current report — wording carried from elsewhere
-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%.
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (12)
Previous report — wording carried elsewhere
The following paragraphs more fully discuss the results of operations and changes in financial condition for the three months ended September 30, 2025 (“third quarter of 2025”) compared to the three months ended September 30, 2024 (“third quarter of 2024”) and the nine months ended September 30, 2025 compared to the nine months ended
Previous report — wording carried elsewhere
The Company posted a 1.48% return on average assets and 15.51% return on average equity.
Previous report — wording carried elsewhere
Processing fees decreased $155,000, or 0.3% over the same period in the prior year reflecting lower transportation and facility transaction volumes.
Previous report — wording carried elsewhere
Average short-term investments, consisting of interest-bearing deposits in other financial institutions and federal funds sold, increased $43.8 million, or 12.9%, to $382.3 million. The increase is primarily a result of the increase in average funding sources, partially offset by the increase in average loans and average investment securities. The average yield on short-term investments decreased 93 basis points to 4.01%, primarily due to the decrease in the Federal Funds rate that
Previous report — wording carried elsewhere
-30- occurred in the last four months of 2024 and then again in September 2025. The majority of these short-term investments are held at the Federal Reserve Bank.
Previous report — wording carried elsewhere
Average accounts and drafts payable increased $140.7 million, or 14.1%, to $1.14 billion. The increase in average accounts and drafts payable was primarily driven by the increase in facility dollar volumes of 15.3%.
Previous report — wording carried elsewhere
For purposes of these computations, yields on investment securities are computed as interest income divided by the average amortized cost of the investments.
Previous report — wording carried elsewhere
Interest income includes net loan fees.
Previous report — wording carried elsewhere
Personnel expenses increased $3.0 million, or 3.7%. Salaries and commissions decreased $39,000, or 0.1%, as a result of a decrease in average full-time equivalent employees ("FTEs") of 5.1% due to strategic investments in various technology initiatives Share-based compensation and employee profit sharing increased $669,000 and $1.8 million, respectively, due to the improvement in earnings. Other benefits increased $1.1 million, or 8.5%, due to higher health insurance costs, partially offset by the decline in average FTEs.
Previous report — wording carried elsewhere
Equipment expense increased $1.5 million primarily due to an increase in depreciation expense on software related to recently completed technology initiatives.
Previous report — wording carried elsewhere
-38- and cash equivalents, maturing investments and cash from operations will continue to be sufficient to fund the Company’s operations and capital expenditures in 2025, which are estimated to range from $6 million to $8 million.
Previous report — wording carried elsewhere
-40- expected credit losses on these assets. ASU 2025-05 is effective for the Company for fiscal years beginning after December 15, 2025 and interim periods within those fiscal years. The Company does not expect adoption of ASU 2025-05 to have a material impact on its consolidated financial statements.