CASS INFORMATION SYSTEMS INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 -Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Certain amounts in prior-period financial statements have been reclassified to conform to the current period’s presentation. Such reclassifications have no effect on previously reported net income or shareholders’ equity. For further information, refer to the audited consolidated financial statements and related footnotes included in Cass Information Systems, Inc.’s (the “Company” or “Cass”) Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K").

Note 2 - Discontinued Operations and Assets and Liabilities Held for Sale

On April 7, 2025, the Company signed an Asset Purchase Agreement providing for the sale of its telecom expense management and managed mobility solutions business unit ("TEM Business Unit") to Asignet USA Inc. ("Asignet") for a purchase price of $18.0 million. The sale closed on June 30, 2025. The Company also signed a Transition Services Agreement with Asignet to provide certain information technology, data ingestion, and payment processing services for a period of time not to exceed 18 months after closing.

The Company has applied discontinued operations accounting in accordance with Accounting Standards Codification, or ASC, Topic 205-20, “Presentation of Financial Statements – Discontinued Operations,” to the assets and liabilities sold related to the Company's TEM Business Unit for the three and nine months ended September 30, 2026 and 2025, as applicable. The sale of the TEM Business Unit represents a strategic shift due to the Company completely exiting both the telecom expense management and managed mobility solutions businesses. The Company did not allocate any consolidated interest that is not directly attributable to or related to discontinued operations. All financial information in the consolidated financial statements and notes to the consolidated financial statements is reported on a continuing operations basis, unless otherwise noted. The TEM Business Unit is included in the Information Services operating segment.

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Income from discontinued operations, net of tax, for the three and nine months ended September 30, 2026, and 2025 is as follows:

Note 3 –Intangible Assets

The Company accounts for intangible assets in accordance with ASC 350, Goodwill and Other Intangible Assets, which requires that intangibles with indefinite useful lives be tested annually for impairment, or when management deems there is a triggering event, and those with finite useful lives be amortized over their useful lives.

Details of the Company’s intangible assets are as follows:

The customer lists are amortized over 5 to 10 years; software over 3 to 7 years; and trade names over 10 to 20 years. Amortization of intangible assets amounted to $286,000 and $872,000 for the three and nine months ended September 30, 2026, respectively. Amortization of intangible assets amounted to $293,000 and $879,000 for the three and nine months

-10- ended September 30, 2025, respectively. Estimated annual amortization of intangibles is $1.1 million in 2026, $720,000 in 2027 and 2028, $689,000 in 2029, and $188,000 in 2030.

Note 4 –Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the sum of the weighted-average number of common shares outstanding and the weighted-average number of potential common shares outstanding.

The calculations of basic and diluted earnings per share are as follows:

Note 5 –Stock Repurchases

The Company maintains a treasury stock buyback program pursuant to which, on November 6, 2025, the Board of Directors authorized the repurchase of up to 1,000,000 shares of the Company's common stock with no expiration date. The Company repurchased zero and 130,359 shares during the three and nine months ended September 30, 2026, respectively and 159,587 and 415,965 shares during the three and nine months ended September 30, 2025, respectively. Repurchases may be made in the open market or through negotiated transactions from time to time depending on market conditions. As of September 30, 2026, the Company had 744,611 shares remaining available for repurchase under the program.

Note 6 – Industry Segment Information

The services provided by the Company are classified intotwo reportable segments: Information Services and Banking Services. Each segment provides distinct services marketed through different channels and is evaluated using the financial information presented to the chief operating decision maker for purposes of assessing performance, developing strategy

-11- and allocating resources. They are managed separately due to their unique service and processing requirements. The Company's chief operating decision maker is the President and Chief Executive Officer of Cass Information Systems, Inc.

The Information Services segment provides transportation, energy, telecommunication, and environmental invoice processing and payment services to large corporations. In addition, this segment provides church management software and on-line generosity services primarily for faith-based ministries. As discussed in Note 2 to the consolidated financial statements, the Company applied discontinued operations accounting to the assets and liabilities sold related to the TEM Business Unit for the three and nine months ended September 30, 2026 and 2025, as applicable. The TEM Business Unit is included in the Information Services operating segment. The Banking Services segment provides banking services primarily to privately held businesses, franchise restaurants and faith-based ministries, as well as supporting the banking needs of the Information Services segment.

The Company’s accounting policies for segments are the same as those described in the summary of significant accounting policies in the Company’s 2025 Form 10-K. Both management and the chief operating decision maker evaluate segment performance based on pre-tax income after allocations for corporate expenses. Transactions between segments are accounted for at what management believes to be fair value.

Substantially all revenue originates from, and all long-lived assets are located within, the United States and no revenue from any customer of any segment exceeds 10% of the Company’s consolidated revenue.

Funding sources represent average balances and deposits generated by Information Services and Banking Services and there is no allocation methodology used. Banking Services interest income is determined by actual interest income on loans minus actual interest expense paid on deposits plus/minus an allocation for interest income or expense dependent on the remaining available liquidity of the segment. Information Services interest income is determined by multiplying available liquidity by actual yields on short-term investments and investment securities.

Intersegment expense (income) primarily consists of payment processing fees paid by the Information Services segment to the Banking Services segment. The Corporate elimination for total assets and interest income and interest expense primarily relates to allocated funds and related interest depending on funding needs of the operating segments.

Any difference between total segment interest income and overall total Company interest income is included in Corporate, Eliminations, and Other.

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Summarized information about the Company’s operations in each industry segment is as follows:

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Note 7 – Loans by Type

A summary of loans is as follows:

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The following table presents the aging of loans past due by category at September 30, 2026 and December 31, 2025:

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The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of September 30, 2026 and December 31, 2025:

1 Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk, who have the apparent ability to satisfy their loan obligations.

2 Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a high level of management attention.

Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination thereof, among other things. There were no loans modified during the three and nine months ended September 30, 2026. There were two loans modified during the three and nine months ended September 30, 2025. Both loans modified during the three and nine months ended September 30, 2025 were due to term extensions coupled with an interest rate increase. Both loans were paid off in December 2025.

There were no modified loans that had a payment default during the nine months ended September 30, 2026 that had been modified due to the borrower experiencing financial difficulty within the 12 months preceding the default.

At September 30, 2026, the Company had no commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company modified the terms of the loans in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension during the current period.

At September 30, 2026, the Company had two non-accrual loans totaling $1.1 million that had no allowance for credit losses specifically allocated to them based on an evaluation of expected credit losses. There were three non-accrual loans at

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December 31, 2025 totaling $7.0 million. The Company did not record any interest income on non-accrual loans during the three and nine months ended September 30, 2026 or 2025.

Upon the Company's determination that a non-accrual loan has subsequently been deemed uncollectible, the loan is fully or partially charged off. The Company recorded a partial charge-off of $508,000 on a non-accrual loan during the three months ended September 30, 2026.

There were no foreclosed loans recorded as other real estate owned as of September 30, 2026 or December 31, 2025.

There were no loans to executive officers or directors as of September 30, 2026 or December 31, 2025.

A summary of the activity in the allowance for credit losses (“ACL”) by category for the nine months ended September 30, 2026 and year ended December 31, 2025 is as follows:

Note 8 –Commitments and Contingencies

In the normal course of business, the Company is party to activities that contain credit, market and operational risks that are not reflected in whole or in part in the Company’s consolidated financial statements. As more fully described in the Form 10-K, such activities include traditional off-balance sheet credit-related financial instruments. These financial instruments include commitments to extend credit, commercial letters of credit and standby letters of credit. The Company’s maximum potential exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, commercial letters of credit and standby letters of credit is represented by the contractual amounts of those instruments. Commitments to extend credit and letters of credit are subject to the same underwriting standards as those financial instruments included on the consolidated balance sheets. An allowance for unfunded commitments of $287,000 and $419,000 had been recorded at September 30, 2026 and December 31, 2025, respectively.

At September 30, 2026, the balances of unfunded commitments, standby and commercial letters of credit were $170.2 million, $12.5 million, and $420,000, respectively. Since some of the financial instruments may expire without being drawn upon, the total amounts do not necessarily represent future cash requirements.

Note 9 –Share-Based Compensation

On February 16, 2023, the Board of Directors adopted the 2023 Omnibus Stock and Performance Compensation Plan (the "2023 Omnibus Plan"), which was approved by the Company's shareholders on April 18, 2023. The 2023 Omnibus Plan permits the issuance of up to 1.0 million shares of the Company’s common stock in the form of stock options, SARs, restricted stock, restricted stock units, phantom stock, and performance awards. During the nine months ended September 30, 2026,51,217 time-based restricted shares and 45,557 performance-based restricted shares were granted under the 2023 Omnibus Plan. Share-based compensation expense was $1.0 million and $3.6 million for the three and nine months ended September 30, 2026, respectively, and $1.0 million and $3.2 million for the three and nine months ended September 30, 2025, respectively.

Restricted Stock

Restricted shares granted to Company employees are amortized to expense over athree-year cliff vesting period, or until vesting occurs upon retirement. Restricted shares granted to members of the Board of Directors are amortized to expense over aone-year service period, with the exception of those shares granted in lieu of cash payments for retainer fees which are expensed in the period earned.

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As of September 30, 2026, the total unrecognized compensation expense related to non-vested restricted shares was $1.7 million, and the related weighted-average period over which it is expected to be recognized is approximately 1.20 years.

Following is a summary of the activity of the Company's restricted stock for the nine months ended September 30, 2026, with total shares and weighted-average fair value:

Performance-Based Restricted Stock

The Company has granted three-year performance-based restricted stock (“PBRS”) awards which are contingent upon the Company’s achievement of pre-established financial goals over athree-year cliff vesting period. The number of shares issued ranges from 0% to 150% of the target opportunity based on the actual achievement of financial goals for thethree-year performance period.

Following is a summary of the activity of the PBRS for the nine months ended September 30, 2026, based on achievement at 100% of target value:

The PBRS that vested during the nine months ended September 30, 2026 were based on the Company's achievement of 61.9% of target financial goals for the 2023-2025 performance period, resulting in the issuance of 30,364 shares of common stock. The outstanding PBRS at September 30, 2026 will vest at scheduled vesting dates and the actual number of shares of common stock issued will range from 0% to 150% of the target opportunity based on the actual achievement of financial goals for the respective three-year performance period.

Note 10 – Employee Benefit Plans

The Company has an unfunded supplemental executive retirement plan (the "SERP"). There are no current employees earning benefits and therefore, there is no service cost associated with the SERP. The following table represents the components of the net periodic cost for the SERP:

SERP cost recorded to expense was $108,000 and $324,000 for the three and nine months ended September 30, 2026, respectively and $113,000 and $338,000 for the three and nine months ended September 30, 2025, respectively.

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Note 11 –Income Taxes

The effective tax rate for continuing operations was 18.2% and 19.2% for the three and nine months ended September 30, 2026, respectively and was 20.7% and 20.3% for the three and nine months ended September 30, 2025, respectively. The effective tax rate can differ from the statutory rate of 21% primarily due to the impact of state income taxes, tax-exempt interest received from municipal bonds, bank-owned life insurance income, tax credits, and other factors.

Note 12 – Investment Securities

Investment securities available-for-sale are recorded at fair value on a recurring basis. The Company’s investment securities available-for-sale are measured at fair value using Level 2 inputs including observable trade data, market data, etc. The market evaluation utilizes several sources which include “observable inputs” rather than “significant unobservable inputs” and therefore fall into the Level 2 category. The amortized cost, gross unrealized gains, gross unrealized losses and fair value of investment securities are summarized as follows:

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The fair values of investment securities with unrealized losses are as follows:

There were 294 investment securities, or 96.4% (142 of which for greater than 12 months), in an unrealized loss position as of September 30, 2026. The unrealized losses at September 30, 2026 were primarily attributable to changes in market interest rates after the investment securities were purchased. The Company does not currently intend to sell, and based on current conditions, the Company does not believe it will be required to sell these available-for-sale investment securities before the recovery of the amortized cost basis, which may be the maturity dates of the investment securities. Therefore, the unrealized losses are recorded in accumulated other comprehensive loss. There were 204 investment securities, or 67.3% (177 of which for greater than 12 months), in an unrealized loss position as of December 31, 2025. At September 30, 2026 and December 31, 2025, the Company had not recorded an allowance for credit losses on investment securities.

The amortized cost and fair value of investment securities by contractual maturity are shown in the following table. Expected maturities may differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties.

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Proceeds from sales of investment securities classified as available-for-sale were $6.3 million and $37.9 million for the three and nine months ended September 30, 2026, respectively and were $72.7 million and $125.8 million for the three and nine months ended September 30, 2025, respectively. Gross realized losses were $46,000 and $224,000 for the three and nine months ended September 30, 2026, respectively, and were $347,000 and $3.9 million for the three and nine months ended September 30, 2025, respectively. Gross realized gains were $9,000 and $196,000 for the three and nine months ended September 30, 2026, respectively, and $351,000 for both the three and nine months ended September 30, 2025. There were no investment securities pledged to secure public deposits at September 30, 2026.

Note 13 – Short-Term Borrowings

The Company has lines of credit from three third-party financial institutions up to a maximum of $250.0 million in aggregate collateralized by state and political subdivision securities. As of September 30, 2026, there wereno outstanding borrowings under these facilities.

The lines of credit mature on various dates from November 27, 2026 to June 30, 2027. The lines of credit bear interest at variable rates from a range of the Wall Street Journal ("WSJ") prime rate minus 0.50% to the WSJ prime rate minus 2.40%. All of the lines of credit include either a commitment fee or unused line fee of 0.10% per annum. During the three months ended September 30, 2026, the weighted‑average interest rate paid on outstanding short-term borrowings was 4.56%.

Availability under the lines of credit is subject to customary borrowing base provisions, financial covenants, and other terms as defined in the respective agreements. As of September 30, 2026, the Company was in compliance with all such covenants.

Note 14 –Fair Value of Financial Instruments

Following is a summary of the carrying amounts and fair values of the Company’s financial instruments:

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The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and Cash Equivalents- The carrying amount approximates fair value.

Investment Securities- The fair value is measured on a recurring basis using Level 2 inputs including observable trade data, market data, etc. Refer to Note 12, “Investment Securities,” for fair value and unrealized gains and losses by investment type.

Loans- The fair value is estimated using present values of future cash flows discounted at risk-adjusted interest rates for each loan category designated by management and is therefore a Level 3 valuation. Management believes that the risk factor embedded in the interest rates along with the allowance for credit losses results in a fair valuation.

Accrued Interest Receivable- The carrying amount approximates fair value.

Deposits- The fair value of demand deposits, savings deposits and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities and therefore, is a Level 2 valuation. The fair value estimates above do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market or the benefit derived from the customer relationship inherent in existing deposits.

Accounts and Drafts Payable- The carrying amount approximates fair value.

Short-term borrowings -The carrying amount approximates fair value.

Accrued Interest Payable- The carrying amount approximates fair value.

Note 15 –Revenue from Contracts with Customers

Revenue is recognized as the obligation to the customer is satisfied. The Company’s revenue from contracts with clients is as follows:

Processing fees– The Company earns fees on a per-item or monthly basis for the invoice processing services rendered on behalf of customers. Per-item fees are recognized at the point in time when the performance obligation is satisfied. Monthly fees are earned over the course of a month, representing the period over which the performance obligation is satisfied. The contracts have no significant variable consideration or financing components.

Financial fees– The Company earns fees on a transaction level basis for invoice payment services when making customer payments. Fees are recognized at the point in time when the payment transactions are made, which is when the performance obligation is satisfied. The contracts have no significant impact of variable consideration and no significant financing components.

Bank service fees– Revenue from service fees consists of service charges and fees on deposit accounts under depository agreements with customers to provide access to deposited funds. Service charges on deposit accounts are transaction-based

-24- fees that are recognized at the point in time when the performance obligation is satisfied. The contracts have no significant impact of variable consideration and no significant financing components.

The following table presents non-interest income, segregated by revenue streams in-scope and out-of-scope for the periods ended September 30, 2026 and 2025.

Note 16 – Leases

The Company leases certain premises under operating leases. As of September 30, 2026, the Company had lease liabilities of $4.2 million and right-of-use assets of $4.0 million. Lease liabilities and right-of-use assets are reflected in other liabilities andother assets, respectively. Presented within occupancy expense on the Consolidated Statements of Income for the three and nine months ended September 30, 2026, operating lease cost was $214,000 and $642,000, short-term lease cost was $65,000 and $153,000, and there wasno variable lease cost. At September 30, 2026, the weighted-average remaining lease term for the operating leases was 5.4 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 2.83%. Certain of the Company’s leases contain options to renew the lease; however, these renewal options are not included in the calculation of the lease liabilities as they are not reasonably certain to be exercised. See the Company’s 2025 Form 10-K for information regarding these commitments.

A maturity analysis of operating lease liabilities and undiscounted cash flows as of September 30, 2026 is as follows:

There were no sale and leaseback transactions, leveraged leases, or lease transactions with related parties during the nine months ended September 30, 2026.

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Note 17 – Subsequent Events

In accordance with FASB ASC 855, Subsequent Events, the Company has evaluated subsequent events after the consolidated balance sheet date of September 30, 2026. There were no events identified that would require additional disclosures to prevent the Company’s unaudited consolidated financial statements from being misleading.

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