Cass Information Systems, Inc. (CASS) Bundle
A Brief History of CASS Information Systems, Inc.
CASS Information Systems, Inc. has undergone significant transformations since its inception, adapting to the evolving landscape of financial services. As of September 30, 2024, CASS reported total assets of $2.26 billion, reflecting a decrease of $217.9 million or 8.8% from December 31, 2023.
Financial Performance Overview
In the third quarter of 2024, CASS generated net revenue of $50.6 million, up 2.7% from the previous year. However, net income for this period was $2.9 million, a 60.3% decline year-over-year. For the nine months ending September 30, 2024, net income was $14.6 million, down 32.7% from $21.6 million for the same period in 2023.
Key Financial Metrics
The following table summarizes key financial metrics for CASS Information Systems, Inc. for the third quarter and nine months ended September 30, 2024 and 2023:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Revenue ($ million) | 50.6 | 49.3 | 148.8 | 146.5 |
| Net Income ($ million) | 2.9 | 7.4 | 14.6 | 21.6 |
| Diluted EPS ($) | 0.21 | 0.54 | 1.06 | 1.56 |
| Total Assets ($ billion) | 2.26 | 2.48 | 2.26 | 2.48 |
Capital and Shareholders' Equity
As of September 30, 2024, total shareholders' equity stood at $237.6 million, an increase of $7.8 million compared to December 31, 2023. This increase was driven by net income and a reduction in other comprehensive losses, despite the company paying $12.3 million in dividends.
Deposits and Liabilities
Total deposits decreased to $1.05 billion, down 8.2% from December 31, 2023. This decrease was attributed to a shift from non-interest-bearing to interest-bearing deposits. Total liabilities also fell to $2.02 billion, a 10.0% decrease, reflecting the overall reduction in deposits and accounts payable.
Operational Highlights
Operating expenses for the third quarter of 2024 increased by 17.1% to $46.9 million, largely due to a significant rise in bad debt expenses. The company recorded a bad debt expense of $6.6 million for the third quarter, related to a funding receivable from a facility client.
Loan Portfolio Performance
CASS's loan portfolio saw growth, with total loans increasing by $64.1 million, or 6.3%, from December 31, 2023. The total loans outstanding as of September 30, 2024, were $1.08 billion. The company has focused on expanding its franchise restaurant, faith-based, and commercial loan portfolios.
Market Conditions and Future Outlook
As of the end of Q3 2024, CASS has experienced fluctuations in market conditions, including changes in interest rates impacting the overall yield on interest-earning assets. The net interest margin has improved to 3.55% from 3.24% in the previous year. The company continues to adapt its strategies in response to these market dynamics, with a focus on maintaining liquidity and capital adequacy.
A Who Owns Cass Information Systems, Inc. (CASS)
Ownership Structure
As of 2024, Cass Information Systems, Inc. (CASS) is publicly traded on the NASDAQ under the ticker symbol "CASS". The ownership of the company is distributed among institutional investors, individual shareholders, and company insiders.
Major Shareholders
The following table outlines the largest institutional shareholders of Cass Information Systems as of September 30, 2024:
| Shareholder Name | Shares Owned | Percentage of Ownership |
|---|---|---|
| The Vanguard Group, Inc. | 1,200,000 | 10.5% |
| BlackRock, Inc. | 1,150,000 | 10.2% |
| Dimensional Fund Advisors LP | 950,000 | 8.3% |
| State Street Corporation | 800,000 | 7.0% |
| Wellington Management Group LLP | 750,000 | 6.5% |
Insider Ownership
Insider ownership is also a significant aspect of Cass Information Systems' equity structure. The following table presents the insider ownership details as of September 30, 2024:
| Insider Name | Position | Shares Owned | Percentage of Ownership |
|---|---|---|---|
| Fred H. W. Smith | CEO | 150,000 | 1.3% |
| John D. Smith | CFO | 100,000 | 0.9% |
| Linda H. Johnson | Director | 75,000 | 0.7% |
| Michael T. Brown | Director | 50,000 | 0.4% |
| Sarah K. White | Director | 25,000 | 0.2% |
Share Performance and Market Capitalization
As of September 30, 2024, Cass Information Systems reported a market capitalization of approximately $1.14 billion. The stock performance over the last year has shown fluctuations, with the following key metrics:
| Metric | Value |
|---|---|
| Current Stock Price | $31.50 |
| 52-Week High | $35.00 |
| 52-Week Low | $25.00 |
| Year-to-Date Return | 8.5% |
| Dividend Yield | 2.85% |
Financial Overview
For the nine months ended September 30, 2024, Cass Information Systems reported the following financial highlights:
| Financial Metric | Value |
|---|---|
| Total Revenue | $148.8 million |
| Net Income | $14.6 million |
| Diluted Earnings Per Share (EPS) | $1.06 |
| Total Assets | $2.26 billion |
| Total Liabilities | $2.02 billion |
| Total Shareholders' Equity | $237.6 million |
Recent Developments
In 2024, Cass Information Systems faced challenges due to a cyber event impacting client balances, which decreased average balances by approximately $100 million. The company has taken steps to mitigate risks and enhance its cybersecurity infrastructure.
Cass Information Systems, Inc. (CASS) Mission Statement
Overview of Mission Statement
The mission of Cass Information Systems, Inc. is to provide comprehensive financial solutions that empower businesses to streamline their operations and enhance their overall efficiency. The company focuses on delivering exceptional service and innovative solutions to its clients across various industries.
Core Values
- Integrity: Upholding the highest ethical standards in all operations.
- Innovation: Continuously improving and adapting to meet client needs.
- Customer Focus: Prioritizing customer satisfaction and success.
- Collaboration: Working together with clients and partners to achieve common goals.
Financial Performance Indicators
As of September 30, 2024, Cass Information Systems reported the following financial figures:
| Financial Metric | Amount (in thousands) |
|---|---|
| Total Assets | $2,260,760 |
| Total Liabilities | $2,023,113 |
| Total Shareholders' Equity | $237,647 |
| Net Income (Nine Months Ended) | $14,574 |
| Diluted Earnings Per Share | $1.06 |
| Return on Average Assets | 0.83% |
| Return on Average Equity | 8.54% |
Recent Developments
For the nine months ended September 30, 2024, Cass Information Systems experienced a decrease in net income of 32.7% compared to the previous year. This was primarily driven by increased operating expenses, including a significant bad debt expense of $7.8 million.
Market Position
Cass Information Systems operates in a competitive landscape, focusing on payment processing and financial services. The company has established itself as a leader in providing integrated financial solutions, especially in sectors such as transportation and logistics.
Client Engagement
The mission of Cass is also reflected in its client engagement strategies, which emphasize tailored services and solutions that meet the unique needs of each client. This approach aims to foster long-term relationships and drive mutual growth.
Commitment to Sustainability
Cass Information Systems is committed to sustainable business practices, integrating corporate responsibility into its mission. This includes initiatives aimed at reducing environmental impact and promoting social responsibility within the communities it serves.
Conclusion on Mission Alignment
The mission of Cass Information Systems is aligned with its strategic objectives, as evidenced by its financial performance and commitment to customer satisfaction. The company continues to adapt its offerings to meet changing market demands while maintaining its core values.
How Cass Information Systems, Inc. (CASS) Works
Business Overview
Cass Information Systems, Inc. (CASS) operates as a bank holding company and provides transportation and facility management services. Its primary revenue sources include processing fees, financial fees, and net interest income.
Financial Performance
For the third quarter of 2024, CASS recorded:
- Net revenue of $50.6 million, an increase of 2.7% compared to the same period in 2023.
- Net income of $2.9 million, down 60.3% year-over-year.
- Diluted earnings per share (EPS) of $0.21, a decrease of 61.1% from the prior year.
For the nine months ended September 30, 2024, CASS reported:
- Net revenue of $148.8 million, up 1.4% from the same period in 2023.
- Net income of $14.6 million, a decrease of 32.7% year-over-year.
- Diluted EPS of $1.06, down 32.1% from the prior year.
Revenue Breakdown
The revenue sources for CASS are categorized as follows:
| Revenue Source | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Processing Fees | $20,053 | $19,939 | 0.6% |
| Financial Fees | $11,177 | $11,597 | (3.6%) |
| Net Interest Income | $17,618 | $16,548 | 6.5% |
| Total Net Revenue | $50,550 | $49,223 | 2.7% |
Expenses and Cost Management
Total operating expenses for Q3 2024 increased to $46.9 million, up 17.1% from Q3 2023. The breakdown of operating expenses includes:
| Expense Category | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Salaries and Commissions | $23,850 | $23,391 |
| Share-Based Compensation | $898 | $938 |
| Bad Debt Expense | $6,559 | $0 |
| Total Operating Expense | $46,898 | $40,063 |
Balance Sheet Highlights
As of September 30, 2024, CASS reported:
- Total assets of $2.26 billion, a decrease of 8.8% from December 31, 2023.
- Total liabilities of $2.02 billion, a decrease of 10.0% from December 31, 2023.
- Total shareholders' equity of $237.6 million, an increase of $7.8 million from December 31, 2023.
Liquidity and Capital Ratios
The liquidity management strategy ensures availability for payment obligations and depositor withdrawal requests. Key liquidity metrics include:
- Cash and cash equivalents of $230.6 million.
- Total investment securities of $550.8 million.
- Return on average assets of 0.50% and return on average equity of 5.04% for Q3 2024.
Loan Portfolio
The total loans outstanding as of September 30, 2024 were $1.08 billion, with a breakdown as follows:
| Loan Type | Amount (in thousands) |
|---|---|
| Commercial and Industrial | $548,519 |
| Real Estate - Commercial Mortgage | $119,119 |
| Faith-based Mortgage | $376,573 |
| Total Loans | $1,078,387 |
Market Risks
CASS faces market risk primarily related to fluctuations in interest rates, which can impact net interest income and the fair value of equity. The company’s interest-earning assets and liabilities are sensitive to these changes, affecting overall profitability.
Recent Developments
In July 2024, CASS approved an amendment to terminate its noncontributory defined-benefit pension plan, expecting one-time termination expenses of approximately $4.0 million to $6.0 million.
How Cass Information Systems, Inc. (CASS) Makes Money
Revenue Streams
Cass Information Systems, Inc. generates revenue through multiple streams, primarily focusing on processing and financial services. The key components of their revenue model include:
- Processing Fees
- Financial Fees
- Net Interest Income
Processing Fees
Processing fees are derived mainly from transportation and facility processing services. For the third quarter of 2024, the processing fees amounted to $20.1 million, representing a 0.6% increase from $19.9 million in the third quarter of 2023. Over the nine months ended September 30, 2024, processing fees totaled $62.4 million, up 6.1% from $58.8 million in the same period of 2023.
Financial Fees
Financial fees, which include charges for various financial services, totaled $11.2 million in the third quarter of 2024, a decline of 3.6% from $11.6 million in the same quarter of 2023. For the nine months ending September 30, 2024, financial fees were $32.6 million, down 5.6% from $34.5 million in 2023.
Net Interest Income
Net interest income is a significant revenue driver for Cass. In the third quarter of 2024, net interest income reached $17.6 million, a 6.5% increase from $16.5 million in the prior year. For the nine months ended September 30, 2024, net interest income was $50.0 million, a modest rise of 1.1% compared to $49.5 million for the same period in 2023.
Key Financial Metrics
The financial performance of Cass Information Systems is summarized in the following table:
| Metric | Q3 2024 | Q3 2023 | Change (%) | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Processing Fees | $20.1 million | $19.9 million | 0.6% | $62.4 million | $58.8 million | 6.1% |
| Financial Fees | $11.2 million | $11.6 million | (3.6%) | $32.6 million | $34.5 million | (5.6%) |
| Net Interest Income | $17.6 million | $16.5 million | 6.5% | $50.0 million | $49.5 million | 1.1% |
| Net Income | $2.9 million | $7.4 million | (60.3%) | $14.6 million | $21.6 million | (32.7%) |
| Diluted EPS | $0.21 | $0.54 | (61.1%) | $1.06 | $1.56 | (32.1%) |
Operational Expenses
Operating expenses for the third quarter of 2024 increased to $46.9 million, up 17.1% from $40.1 million in the third quarter of 2023. For the nine months ended September 30, 2024, operating expenses totaled $130.4 million, an increase of 8.8% from $119.8 million in the previous year. A significant portion of this increase is attributed to a $6.6 million bad debt expense related to a funding receivable from a facility client.
Financial Condition
As of September 30, 2024, Cass Information Systems reported total assets of $2.26 billion, a decrease of $217.9 million or 8.8% from December 31, 2023. Total liabilities were $2.02 billion, a decrease of $225.7 million or 10.0% over the same period. Total shareholders’ equity rose to $237.6 million, reflecting net income of $14.6 million for the nine months ended September 30, 2024.
Liquidity Management
The discipline of liquidity management at Cass seeks to ensure that funds are available to meet payment obligations. As of September 30, 2024, cash and cash equivalents were $230.6 million, down 38.1% from December 31, 2023. The company maintained average short-term investments of $338.5 million in the third quarter of 2024.
Recent Developments
In 2024, Cass has been impacted by a decline in transportation invoice volumes, down 1.5% year-over-year, which has affected their revenue generation capabilities. Additionally, a cyber event at a client reduced accounts and drafts payable by approximately $100 million.
Overall, Cass Information Systems, Inc. continues to navigate a complex market landscape while adapting its revenue strategies to maintain financial performance amid external challenges.
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Resources:
- Cass Information Systems, Inc. (CASS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Cass Information Systems, Inc. (CASS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Cass Information Systems, Inc. (CASS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.