Cass Information Systems (CASS) came out with quarterly earnings of $0.63 per share, beating the Zacks Consensus Estimate of $0.60 per share. This compares to earnings of $0.52 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 5%. A quarter ago, it was expected that this invoice and payment management company would post earnings of $0.44 per share when it actually produced earnings of $0.33, delivering a surprise of -25%.Over th ...

Earnings Performance - First quarter 2025 earnings per diluted share were $0.66, up 26.9% from $0.52 in Q1 2024 and 100% from $0.33 in Q4 2024[1] - Net income for Q1 2025 was $9.0 million, a 25.4% increase from $7.2 million in Q1 2024 and a 95.2% increase from $4.6 million in Q4 2024[1] - Total revenues for Q1 2025 were $46.4 million, a slight increase from $45.1 million in Q1 2024[23] Asset and Loan Management - Total assets as of March 31, 2025, were $2,318,457, a decrease of 3.2% from $2,395,081 on December 31, 2024[25] - Net loans increased to $1,127,588 as of March 31, 2025, up 5.5% from $1,068,594 at the end of 2024[25] - Average loans for the quarter ended March 31, 2025, were $1,109,526, up 4.1% from $1,065,944 in the previous quarter[27] Deposits and Funding - Average deposits decreased by $46.1 million, or 4.3%, compared to Q1 2024, attributed to client funding needs for acquisitions[16] - Total deposits rose to $1,000,075, reflecting an increase of 3.1% from $967,916 on December 31, 2024[25] Interest Income and Margin - Net interest income rose by $2.8 million, or 17.0%, to $19.3 million, driven by an increase in net interest margin to 3.75% from 3.26%[5][9] - The net interest margin for the quarter was 3.75%, an increase from 3.55% in the previous quarter[29] - Average interest-earning assets increased to $2,104,603, up 4.0% from $2,022,794 in the prior quarter[27] Credit Losses and Provisions - The company recorded a provision for credit losses of $905,000 in Q1 2025, compared to $95,000 in Q1 2024, due to a 5.5% increase in total loans[11] Shareholder Actions - The company repurchased 116,109 shares at a weighted average price of $42.86, totaling $5.0 million[5] Operational Changes - The successful sale of the Telecom Expense Management business is expected to allow the company to focus on its strengths in financial exchange and information processing[3] Employee Metrics - Average full-time equivalent employees remained stable at 1,008 for the quarter ended March 31, 2025, unchanged from the previous quarter[29] Financial Ratios - Return on average equity improved to 15.91% for the quarter ended March 31, 2025, compared to 7.88% in the previous quarter[29] - Common equity tier 1 ratio improved to 14.11% as of March 31, 2025, compared to 13.84% at the end of 2024[29] Other Income - Net income from discontinued operations for the quarter was $415, a slight decrease from $434 in the previous quarter[33] Transportation and Facility Expenses - Transportation invoice volumes decreased by 4.7% year-over-year to 8.36 million, while dollar volumes were $8.6 billion, down 3.3% from Q1 2024[4] - Facility expense invoice volumes increased by 2.7% year-over-year to 4.2 million, with dollar volumes totaling $5.8 billion, reflecting a 16.1% increase from Q1 2024[6]

The Computer and Technology group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is Cass Information Systems (CASS) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Computer and Technology sector should help us answer this question.Cass Information Systems is a member of our Computer and Technology group, which includes 603 different companies and currently sits at #5 ...

Financial Performance - The Company's net interest margin increased to 3.42% in 2024 from 3.25% in 2023, 2.74% in 2022, and 2.31% in 2021, indicating improved net interest income[91] - The Company's net interest margin increased to 3.42% in 2024 from 3.25% in 2023, contributing to higher net interest income[91] - As of December 31, 2024, the Company had $26.4 million in goodwill and other intangible assets, which may be subject to impairment charges in the future[92] - As of December 31, 2024, the Company reported $26.4 million in goodwill and other intangible assets, which may be subject to impairment charges in the future[92] Credit and Risk Management - The Company faces risks from customer credit quality, which could lead to increased provisions for credit losses and negatively impact financial results[88] - The allowance for credit losses (ACL) is subject to ongoing evaluation and may be insufficient, potentially impacting the Company's financial condition[103] - The Company's allowance for credit losses is subject to evaluation and may be insufficient, impacting financial condition and results[103] - The Company faces potential losses if customer payments are not received after remitting payments to freight carriers and utility companies[93] - Lending concentrations in specific sectors, such as faith-based ministries and franchise restaurants, could lead to increased credit losses if these sectors decline[94] - Lending concentrations in specific sectors, such as faith-based ministries and franchise restaurants, may expose the Company to increased credit losses[94] Regulatory and Compliance Risks - Increased regulatory scrutiny following high-profile bank failures in 2023 may raise the Company's operational costs and affect profitability[86] - The Company may need to raise additional capital to meet regulatory requirements, which could be on unfavorable terms or not available at all[120] - Legal and regulatory proceedings could result in substantial costs and adversely affect the Company's financial condition and operating results[123] - Compliance with Basel III Capital rules requires the Company to hold more capital against risk-weighted assets, potentially impacting its business strategy[120] - Legal and regulatory proceedings could adversely affect Cass, leading to substantial costs and potential regulatory actions that may harm its financial condition[123] Market and Economic Factors - Fluctuations in interest rates significantly affect the Company's net interest income, with a decline in rates expected to have a negative impact[91] - Rising interest rates have decreased the value of the Company's available-for-sale securities portfolio, leading to potential losses if these securities are sold to meet liquidity needs[115] - Rising interest rates have decreased the value of the Company's available-for-sale securities portfolio, potentially leading to losses if sold to meet liquidity needs[115] - A decline in oil prices could negatively impact the Company's revenues and the dollar amounts of processed invoices[95] Operational and Technological Risks - The Company operates in a highly competitive environment, facing pressure from large payment processors and regional financial institutions[107] - Rapid technological changes may render the Company's existing products and services obsolete if it fails to adapt[100] - The Company must adapt to rapid technological changes to remain competitive, or risk losing customers[100] - The introduction of new products and services may not meet expected timelines or success, impacting the Company's financial performance[111] - The Company faces risks and uncertainties in introducing new products and services, which may not be successful due to factors beyond its control[111] Cybersecurity and Reputational Risks - Cybersecurity threats pose significant risks to the Company's operations and reputation, with potential for material adverse effects on business[96] - The Company is exposed to cybersecurity risks that could disrupt operations and harm financial results[96] - ESG risks could adversely affect the Company's reputation and the market price of its securities, particularly in relation to its lending and business partnerships[136] Climate Change and Environmental Risks - Climate change poses operational, credit, and reputational risks that could negatively impact the Company and its clients[131] - The Company is subject to increased scrutiny regarding climate-related risks, which may lead to higher compliance costs and regulatory risks[134] - The Company faces ongoing legislative and regulatory uncertainties regarding climate risk management, which may result in higher compliance costs and risks[135] Management and Personnel Risks - Cass' future operating results depend significantly on the ability to attract and retain qualified management and key personnel, with intense competition for such talent[116] - An inability to raise additional capital on acceptable terms when needed could have a materially adverse effect on the Company's business and financial condition[122]

Core Insights - The interview highlights the significant financial implications of invoice fraud, with approximately 80% of businesses experiencing some form of fraud that adversely affects their bottom line [2][6]. - Cass Information Systems utilizes advanced AI technology to process non-purchase order invoices, ensuring legitimacy and accuracy before payment [4][6]. - The integration of AI in financial processing is creating new opportunities for business students, emphasizing the need for technical skills alongside traditional finance education [5][6]. Company Overview - Cass Information Systems is a leading provider of integrated information and payment management solutions, disbursing over $90 billion annually on behalf of clients and holding total assets of $2.3 billion [9]. - The company is supported by Cass Commercial Bank, which offers sophisticated financial exchange services and is a wholly owned subsidiary [9]. - Cass is part of the Russell 2000 index, indicating its significance in the market [9]. Educational Insights - Creighton University's Heider College of Business is preparing students for the finance sector by incorporating a FinTech major that covers blockchain, AI, machine learning, and analytics [6][10]. - The curriculum aims to equip students with both traditional financial skills and modern technical competencies necessary for today's automated financial transactions [6][10]. Media and Outreach - Today's Marketplace (TMP) serves as a platform for C-Suite interviews, providing insights from business leaders and academic experts, enhancing media exposure for under-reported stories [11].

Group 1 - Cass Information Systems (CASS) has gained about 5.6% year-to-date, outperforming the average loss of 0.4% in the Computer and Technology sector [4][5] - The Zacks Rank for Cass Information Systems is currently 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3][5] - The Zacks Consensus Estimate for CASS's full-year earnings has increased by 3.6% over the past 90 days, reflecting stronger analyst sentiment [3] Group 2 - Cass Information Systems belongs to the Computer - Services industry, which includes 9 individual stocks and currently ranks 45 in the Zacks Industry Rank [5] - The Computer - Services industry has also experienced an average loss of 0.4% year-to-date, further highlighting CASS's relative performance [5] - In comparison, BlackBerry (BB), another outperforming stock in the Computer and Technology sector, has returned 41.8% year-to-date [4][6]

Group 1 - Cass Information Systems (CASS) is outperforming the Computer and Technology sector with a year-to-date gain of 4.2%, compared to the sector's average gain of 1.8% [4] - The Zacks Consensus Estimate for CASS's full-year earnings has increased by 3.6% in the past quarter, indicating improved analyst sentiment [4] - CASS currently holds a Zacks Rank of 2 (Buy), suggesting it is positioned to outperform the broader market in the near term [3] Group 2 - Cass Information Systems is part of the Computer - Services industry, which has seen an average gain of about 6% this year, indicating that CASS is slightly underperforming its industry [6] - The Computer and Technology group, which includes 608 companies, ranks 3 in the Zacks Sector Rank, reflecting a strong overall performance [2] - Another notable stock in the sector, DoorDash, Inc. (DASH), has gained 16.8% year-to-date and also holds a Zacks Rank of 2 (Buy) [5]

Earnings Performance - Cass Information Systems (CASS) reported quarterly earnings of $0.33 per share, missing the Zacks Consensus Estimate of $0.44 per share, and down from $0.61 per share a year ago, representing an earnings surprise of -25% [1] - The company posted revenues of $50.37 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.80%, but down from year-ago revenues of $50.74 million [2] Stock Performance - Cass shares have lost about 1.3% since the beginning of the year, while the S&P 500 has gained 3.5% [3] - The current status of estimate revisions for Cass is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.53 on revenues of $50.46 million, and for the current fiscal year, it is $2.53 on revenues of $209.23 million [7] - The outlook for the Computer - Services industry, where Cass operates, is currently in the top 37% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]

Net Income and Profitability - Net income for Q4 2024 was $4.6 million, a decrease of 45.4% from $8.4 million in Q4 2023, but an increase of 56.4% compared to Q3 2024[1] - Net income for Q4 2024 was $4,594 thousand, compared to $2,938 thousand in Q3 2024 and $8,410 thousand in Q4 2023[23] - Return on average equity increased to 7.88% in Q4 2024 from 5.04% in Q3 2024, but decreased from 16.06% in Q4 2023[29] Revenue and Fee Income - Total fee revenue for Q4 2024 was $30,976 thousand, a slight decrease from $31,230 thousand in Q3 2024 and $32,195 thousand in Q4 2023[23] - Total revenues for Q4 2024 were $50,371 thousand, slightly down from $50,550 thousand in Q3 2024 and $50,736 thousand in Q4 2023[23] Net Interest Income and Margin - Net interest income increased by $730,000 (4.3%) in Q4 2024, driven by a net interest margin increase to 3.55% from 3.30% in Q4 2023[9] - Net interest income for Q4 2024 was $17,764 thousand, compared to $17,618 thousand in Q3 2024 and $17,034 thousand in Q4 2023[23] - Net interest margin remained stable at 3.55% in Q4 2024 compared to Q3 2024, but increased from 3.30% in Q4 2023[29] - Average loan yield slightly decreased to 5.38% in Q4 2024 from 5.40% in Q3 2024, but increased from 4.95% in Q4 2023[29] Loans and Deposits - Loans increased by $67.7 million (6.7%) compared to December 31, 2023[14] - Average loans for Q4 2024 were $1,065,944 thousand, compared to $1,072,824 thousand in Q3 2024 and $1,025,259 thousand in Q4 2023[27] - Average deposits decreased by $19.0 million (1.8%) compared to Q4 2023, driven by client funds migration from non-interest bearing to interest-bearing accounts[16] - Total deposits as of December 31, 2024, were $967,916 thousand, down from $1,047,323 thousand in September 30, 2024, and $1,140,814 thousand in December 31, 2023[25] - Average non-interest bearing deposits for Q4 2024 were $399,778 thousand, down from $404,364 thousand in Q3 2024 and $464,924 thousand in Q4 2023[27] - Average cost of total deposits decreased to 1.77% in Q4 2024 from 1.98% in Q3 2024, but increased from 1.76% in Q4 2023[29] Transportation and Facility Expenses - Transportation dollar volumes in Q4 2024 were $9.0 billion, a decrease of 0.6% compared to Q4 2023 and 1.1% compared to Q3 2024[3] - Facility expense dollar volumes totaled $5.3 billion in Q4 2024, an increase of 9.1% compared to Q4 2023 but a decrease of 8.4% compared to Q3 2024[6] - Transportation dollar volume decreased to $8,994,440 in Q4 2024 from $9,097,739 in Q3 2024, but increased from $9,044,772 in Q4 2023[29] - Facility expense dollar volume decreased to $5,291,143 in Q4 2024 from $5,778,291 in Q3 2024, but increased from $4,848,064 in Q4 2023[29] Personnel and Operating Costs - Personnel expenses increased by $3.5 million (11.7%) in Q4 2024, including a one-time non-cash expense of $3.5 million related to the termination of the defined benefit pension plan[12] - The termination of the defined benefit pension plan is expected to reduce annual operating costs by approximately $1.0 million[12] Capital and Shareholder Equity - The company repurchased 79,713 shares of its stock at a weighted average price of $44.02[4] - Average shareholders' equity for Q4 2024 was $231,993 thousand, compared to $231,785 thousand in Q3 2024 and $207,834 thousand in Q4 2023[27] - Common equity tier 1 ratio decreased to 13.84% in Q4 2024 from 14.54% in Q3 2024 and 14.73% in Q4 2023[29] - Total risk-based capital ratio decreased to 14.61% in Q4 2024 from 15.31% in Q3 2024 and 15.49% in Q4 2023[29] - Leverage ratio decreased to 10.57% in Q4 2024 from 11.05% in Q3 2024 and 10.71% in Q4 2023[29] Assets and Liabilities - Total assets as of December 31, 2024, were $2,395,081 thousand, up from $2,260,760 thousand in September 30, 2024, but down from $2,478,622 thousand in December 31, 2023[25] - Average interest-earning assets for Q4 2024 were $2,022,794 thousand, compared to $2,001,740 thousand in Q3 2024 and $2,075,641 thousand in Q4 2023[27] Credit and Risk Management - Allowance for credit losses to loans remained stable at 1.24% in Q4 2024 compared to 1.25% in Q3 2024, but decreased from 1.29% in Q4 2023[29] Acquisitions and Investments - The company completed the acquisition of AcuAudit with a base purchase price of $3.0 million and an earnout based on annualized recurring revenue of $2.5 million[15]

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Cass Information Systems (CASS) due to lower revenues, with a focus on how actual results will compare to estimates [1][3]. Earnings Expectations - CASS is expected to report quarterly earnings of $0.44 per share, reflecting a year-over-year decrease of 27.9% [3]. - Revenues are projected to be $49.48 million, down 2.5% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 3.64% lower in the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for CASS matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the potential deviation of actual earnings from the consensus estimate, with a positive reading being a strong predictor of an earnings beat [6][7]. - CASS currently holds a Zacks Rank of 3, making it challenging to predict an earnings beat conclusively [11]. Historical Performance - In the last reported quarter, CASS was expected to post earnings of $0.50 per share but only achieved $0.21, resulting in a surprise of -58% [12]. - Over the past four quarters, CASS has only beaten consensus EPS estimates once [13]. Industry Comparison - CACI International, another player in the Zacks Computer - Services industry, is expected to report earnings of $5.24 per share, indicating a year-over-year increase of 20.2% [17]. - CACI's revenues are projected to be $1.99 billion, up 8.3% from the previous year [17]. - Despite a recent EPS estimate revision of 3% higher, CACI has an Earnings ESP of -1.48%, complicating predictions for an earnings beat [18].