CASS INFORMATION SYSTEMS INC
For the period ended Jun 30, 2026. Filed Aug 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.
Jun 30, 2026 · Filed Aug 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 2026-03-31; filed 2026-05-05.
0000708781-26-000022
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0000708781-26-000031
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 91 previous paragraphs and 113 current paragraphs.
42 unchanged; 43 reworded; 17 added; 5 removed; 1 previous and 11 current paragraphs rearranged.
Tables are not compared: 9 previous and 11 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 (17)
Current report
The Company recorded net revenue of $99.0 million during the first half of 2026, an increase of 9.1% from the first half of 2025, primarily driven by an increase in net interest income and financial fees, partially offset by lower processing fees. Operating expense increased 1.8% compared to the first half of 2025. Net income was $19.4 million, an increase of 9.0% and diluted EPS was $1.48 per share, an increase of 13.0% from the first half of 2025.
Current 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 the second quarter of 2025.
Current report
Processing fees decreased $1.4 million, or 4.1%, reflecting lower transportation and facility invoice volumes.
Current report
Average investment securities increased $136.9 million, or 20.6%, to $802.5 million. The increase was primarily driven by the partial repositioning of the portfolio at the end of the second quarter of 2025 as well as purchases of investments at current market rates. The average yield on taxable investment securities increased 58 basis points to 3.63% and the average yield on tax-exempt investment securities increased 113 basis points to 4.04%.
Current report
The average balance of interest-bearing deposits increased $23.5 million, or 3.8%, to $645.6 million. Average non-interest-bearing demand deposits increased $27.9 million, or 7.0%, to $427.0 million. The increase in non-interest bearing demand deposits is primarily due to the growth in average CassPay deposits compared to the first half of 2025. The average rate paid on interest-bearing deposits decreased 26 basis points to 2.42% due to the reduction in short-term interest rates.
Current report
Balances shown are daily averages.
Current report
Interest income on loans includes net loan fees of $223,000 and $485,000 for the six months ended June 30, 2026 and 2025, respectively.
Current report
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for both the six months ended June 30, 2026 and 2025. The tax-equivalent adjustment was approximately $732,000 and $383,000 for the six months ended June 30, 2026 and 2025, respectively.
Current report
Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for the six months ended June 30, 2026 and 2025.
Current report
The Company recorded a bad debt recovery of $1.8 million related to the second annual payment in a litigation settlement. Three annual payments remaining of $1.25 million each, plus interest, remain under the settlement agreement.
Current report
Other operating expense increased $828,000, or 12.1%. The increase is primarily due to higher business development costs and professional fees.
Current report
Equipment expense increased $352,000, primarily due to an increase in depreciation and licensing and maintenance expense on software related to technology initiatives.
Current report
Other operating expense increased $1.4 million, or 10.3%. The increase is primarily due to higher business development costs and professional fees.
Current report
Net income from discontinued operations was $12,000, a decrease of $3.7 million, or 99.7% over the same period in the prior year. The decrease is primarily due to the gain on sale of the TEM Business Unit of $3.6 million in the second quarter of 2025.
Current report
Net income from discontinued operations was $105,000, a decrease of $4.0 million, or 97.4% over the same period in the prior year. The decrease is primarily due to the gain on sale of the TEM Business Unit of $3.6 million in the first half of 2025.
Current report
•A change in other operating activities of $3.3 million; and
Current report
•An increase in stock-based compensation of $410,000.
Removed paragraphs (5)
Previous report
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 report
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 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.
Previous report
•A change in accounts receivable of $1.5 million;
Previous report
•A decrease in the provision for credit losses of $844,000; and
Reworded paragraphs (43)
Previous wording
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 wording
Contract freight rates have recently begun to increase, and, together with fuel surcharges from rising diesel prices, are contributing to higher Transportation dollars processed and paid. The increase in Transportation dollars paid is expected to increase 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.
Previous 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.
Current wording
The following paragraphs more fully discuss the results of operations and changes in financial condition for the three months ended June 30, 2026 (“second quarter of 2026”) compared to the three months ended June 30, 2025 (“second quarter of 2025”) and the six months ended June 30, 2026 ("first half of 2026") compared to the six months ended June 30, 2025 ("first half 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 and six months ended June 30, 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 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.
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 and six months ended June 30, 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 $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.
Current wording
The Company recorded net revenue of $49.9 million during the second quarter of 2026, an increase of 12.5% from the second quarter of 2025, primarily driven by an increase in net interest income and financial fees, partially offset by lower processing fees. Operating expense decreased 3.5% compared to the second quarter of 2025 primarily due to $1.8 million bad debt recovery. Net income was $10.6 million, an increase of 19.6% and diluted EPS was $0.81 per share, an increase of 22.7% from the second quarter of 2025.
Previous wording
The Company posted a 1.42% return on average assets and 14.63% return on average equity.
Current wording
The Company posted a 1.67% return on average assets and 17.72% return on average equity.
Previous wording
-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 wording
-27- 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:
Previous wording
Processing fees decreased $741,000, or 4.5% over the same period in the prior year reflecting lower transportation and facility transaction volumes.
Current wording
Processing fees decreased $614,000, or 3.7% over the same period in the prior year reflecting lower transportation and facility invoice volumes.
Previous wording
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 wording
Financial fees increased $790,000, or 7.8%, primarily attributable to an increase in average payments in advance of funding of 19.4% compared to the prior period.
Previous 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%.
Current wording
The increase in net interest income is primarily attributable to the net interest margin improving to 4.00% as compared to 3.78% in the same period last year, in addition to an increase in average earning assets of $108.7 million, or 5.2%. The yield on interest-earning assets increased 16 basis points from 4.58% to 4.74% while the cost of interest-bearing liabilities decreased 22 basis points from 2.71% to 2.49%.
Previous wording
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 wording
Average loans decreased $35.1 million, or 3.1%, to $1.09 billion. The average yield on loans increased 23 basis points to 5.87%, 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.
Previous 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.
Current wording
The average balance of interest-bearing deposits increased $27.0 million, or 4.4%, to $642.9 million. Average non-interest-bearing demand deposits increased $39.1 million, or 10.0%, to $432.2 million. The increase in average non-interest bearing deposits is primarily due to growth within CassPay. The average rate paid on interest-bearing deposits decreased 27 basis points to 2.44% due to the reduction in short-term interest rates.
Previous 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%.
Current wording
Average accounts and drafts payable increased $56.0 million, or 5.0%, to $1.18 billion. The increase in average accounts and drafts payable was primarily driven by the increase in transportation dollar volumes of 7.4% as well as the increase in facility dollar volumes of 2.6%.
Previous wording
-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 wording
Average investment securities increased $167.1 million, or 26.2%, to $805.7 million due to the utilization of available liquidity to purchase investment securities. The average yield on taxable investment securities increased 63 basis points to 3.63% and the average yield on tax-exempt investment securities increased 123 basis points to 3.97%. The increase in yield was primarily driven by the partial repositioning of the portfolio at the end of the second quarter of 2025 as well as purchases of investments at current market rates.
Previous 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.
Current wording
Average short-term investments, consisting of interest-bearing deposits in other financial institutions and federal funds sold, decreased $18.5 million, or 5.4%, to $322.6 million. The average yield on short-term investments decreased 70 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
Interest income on loans includes net loan fees of $102,000 and $367,000 for the first quarter of 2026 and 2025, respectively.
Current wording
Interest income on loans includes net loan fees of $121,000 and $118,000 for the second quarter of 2026 and 2025, respectively.
Previous wording
For purposes of these computations, yields on investment securities are computed as interest income divided by the average amortized cost of the investments.
Current wording
Yields on investment securities are computed as interest income divided by the average amortized cost of the investments.
Previous 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.
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 $360,000 and $215,000 for the second quarter of 2026 and 2025, respectively.
Previous 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.
Current wording
The Company recorded a provision for credit losses and off-balance sheet credit exposures of $531,000 and $25,000 for the second quarter of 2026 and 2025, respectively. The Company recorded a provision for credit losses and off-balance sheet credit exposures of $592,000 and $930,000 for the first half 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 second quarter of 2026 was driven by a specific reserve on a nonperforming commercial real estate loan and an increase in total loans of $41.8 million, or 3.9%, as compared to December 31, 2025.
Previous 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.
Current wording
The Company experienced no loan charge-offs in the first half of 2026 or 2025. The ACL was $14.4 million at June 30, 2026 and $13.6 million at December 31, 2025. The ACL represented 1.30% of outstanding loans at June 30, 2026 and 1.28% of outstanding loans at December 31, 2025. The allowance for unfunded commitments was $234,000 at June 30, 2026 and $419,000 at December 31, 2025. There were $1.6 million of nonperforming loans outstanding at June 30, 2026 and $7.0 million at December 31, 2025. The Company has a specific allowance for credit losses of $288,000 allocated to its non-accrual loans at June 30, 2026.
Previous 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:
Current wording
Total operating expenses for the second quarter of 2026 decreased $1.4 million, or 3.5%, as compared to the second quarter of 2025. Total operating expenses for the first half of 2026 increased $1.3 million, or 1.8%, as compared to the first half of 2025. The following table details the components of operating expenses:
Previous wording
Equipment expense increased $138,000, primarily due to an increase in depreciation expense on software related to recently completed technology initiatives.
Current wording
Equipment expense increased $214,000, primarily due to an increase in depreciation and licensing and maintenance expense on software related to technology initiatives.
Previous 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.
Current wording
Salaries and commissions decreased $792,000, or 2.0%, as a result of a decrease in average full-time equivalent employees ("FTEs") of 8.4% 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 $410,000 and $508,000, respectively, due to the improvement in net income from continuing operations. Other benefits decreased $793,000, or 8.4%, due to the decrease in FTEs in addition to lower health insurance claims and related expenses.
Previous wording
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 wording
The Company recorded a bad debt recovery of $1.8 million during the first half of 2026 compared to $2.0 million during the first half of 2025.
Previous wording
Total assets at March 31, 2026 were $2.53 billion, a decrease of $72.2 million, or 2.8%, from December 31, 2025.
Current wording
Total assets at June 30, 2026 were $2.52 billion, a decrease of $89.8 million, or 3.4%, from December 31, 2025.
Previous 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.
Current wording
The Company experienced a decrease in cash and cash equivalents of $163.8 million, or 41.8%, during the first half of 2026. The change in cash and cash equivalents reflects the Company’s daily liquidity position and is primarily impacted 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 $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
Current wording
The investment securities portfolio decreased $34.0 million, or 4.4%, during the first half of 2026. The decrease is primarily due to sales of $31.6 million, and maturities of $39.0 million, partially offset by purchases of $42.3 million.
Previous 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.
Current wording
Loans increased $41.8 million, or 3.9%, from December 31, 2025. The Company experienced growth in its commercial and industrial loan portfolio during the first half of 2026.
Previous wording
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 wording
Payments in advance of funding increased $85.1 million, or 51.7%, primarily due to a higher level of demand for the Company's early payment solutions as well as timing of quarter end advances.
Previous 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.
Current wording
Accounts and drafts receivable from customers decreased $24.7 million, or 35.6%, from December 31, 2025. The decrease is solely due to timing of customer funding.
Previous 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.
Current wording
Total deposits at June 30, 2026 were $1.12 billion, a decrease of $83.5 million, or 7.0%, 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 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.
Current wording
Accounts and drafts payable at June 30, 2026 were $1.03 billion, a decrease of $96.8 million, or 8.6%, 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
Previous wording
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 wording
Short-term borrowings were $80.0 million at June 30, 2026. The Company borrowed on its lines of credit primarily to fund the $85.1 million increase in payments as compared to December 31, 2025.
Previous 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.
Current wording
Total liabilities at June 30, 2026 were $2.27 billion, a decrease of $91.5 million, or 3.9%, 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 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.
Current wording
Total shareholders’ equity at June 30, 2026 was $244.7 million, a $1.7 million increase from December 31, 2025. The increase in shareholders’ equity is a result of net income of $19.4 million, partially offset by dividends paid of $8.2 million, the repurchase of Company stock of $6.0 million, and an increase in accumulated other comprehensive loss of $4.2 million.
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 $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.
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 $228.5 million at June 30, 2026, a decrease of $163.8 million, or 41.8%, from December 31, 2025. At June 30, 2026, these assets represented 9.1% 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 $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.
Current wording
Secondary sources of liquidity include the investment portfolio and borrowing lines. Total investment securities were $736.8 million at June 30, 2026, a decrease of $34.0 million from December 31, 2025. These assets represented 29.3% of total assets at June 30, 2026. Of the total portfolio, 1.2% mature in one year, 8.3% mature in one to five years, and 90.5% 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 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.
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 June 30, 2026, the Bank also has secured lines of credit with the Federal Home Loan Bank of $224.1 million collateralized by mortgage loans. The Bank had no amounts outstanding under any line of credit as of December 31, 2025.
Previous wording
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.
Current wording
The Company also has secured lines of credit from three banks up to a maximum of $250.0 million in aggregate collateralized by investment securities. There was $80.0 million total outstanding on the Company's lines of credit as of June 30, 2026.
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 $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.
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 $75.7 million of CDARS deposits and interest-bearing demand deposits include $176.1 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 $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
Current wording
-36- 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 be approximately $6.0 million. Capital expenditures in 2026 are expected to primarily consist of purchases of equipment and software related to the payment and information processing services business.
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Current report — wording carried from elsewhere
The Company posted a 1.54% return on average assets and 16.17% return on average equity.
Current report — wording carried from elsewhere
Financial fees increased $1.3 million, or 6.3%, primarily attributable to an increase in average payments in advance of funding of 10.8% compared to the prior period.
Current report — wording carried from elsewhere
Average short-term investments, consisting of interest-bearing deposits in other financial institutions and federal funds sold, increased $6.9 million, or 2.3%, to $305.8 million. The average yield on short-term investments decreased 66 basis points to 3.37%, primarily due to the decrease in the Federal Funds rate. The majority of these short-term investments are held at the Federal Reserve Bank.
Current report — wording carried from elsewhere
The increase in net interest income is primarily attributable to the net interest margin improving to 3.97% as compared to 3.76% in the same period last year, in addition to an increase in average earning assets of $109.5 million, or 5.2%. The yield on interest-earning assets increased 14 basis points from 4.56% to 4.70% while the cost of interest-bearing liabilities decreased 22 basis points from 2.68% to 2.46%.
Current report — wording carried from elsewhere
Average loans decreased $39.1 million, or 3.5%, to $1.08 billion. The average yield on loans increased 21 basis points to 5.84%, 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.
Current report — wording carried from elsewhere
Average accounts and drafts payable increased $68.4 million, or 6.2%, to $1.18 billion. The increase in average accounts and drafts payable was primarily driven by the increase in facility dollar volumes of 5.1% as well as the increase in transportation dollar volumes of 6.0%.
Current report — wording carried from elsewhere
Yields on investment securities are computed as interest income divided by the average amortized cost of the investments.
Current report — wording carried from elsewhere
Interest income includes net loan fees.
Current report — wording carried from elsewhere
Salaries and commissions decreased $397,000, or 1.9%, as a result of a decrease in average full-time equivalent employees ("FTEs") of 9.0% 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 $212,000 and $376,000, respectively, due to the improvement in net income from continuing operations. Other benefits decreased $858,000, or 18.6%, due to the decrease in FTEs in addition to lower health insurance claims and related expenses as compared to the second quarter of 2025.
Current report — wording carried from elsewhere
-35- payments are issued. For this reason, average balances are generally a more meaningful measure of accounts and drafts payable.
Current report — wording carried from elsewhere
Net cash flows provided by operating activities were $31.5 million for the first half of 2026, compared to $20.3 million for the first half of 2025, an increase of $11.2 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
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Previous report — wording carried elsewhere
-30- expected to primarily consist of purchases of equipment and software related to the payment and information processing services business.