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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

___________________________

FORM 10-Q


x			QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the quarterly period ended September 30, 2025

OR

o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the transition period from __________ to __________

Commission File No. 000-20827

____________________

CASS INFORMATION SYSTEMS, INC.

(Exact name of registrant as specified in its charter)


Missouri			43-1265338
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
12444 Powerscourt Drive, Suite 550 St. Louis, Missouri			63131
(Address of principal executive offices)			(Zip Code)

(314) 506-5500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbols

Name of each exchange on which registered

Common stock, par value $.50

CASS

The Nasdaq Global Select Market

____________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer

Non-Accelerated Filer

Smaller Reporting Company

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No x

The number of shares outstanding of the registrant's only class of common stock as of October 31, 2025: Common stock, par value $.50 per share – 13,084,279 shares outstanding.

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TABLE OF CONTENTS


PART I – Financial Information
Item 1.	FINANCIAL STATEMENTS
	Consolidated Balance Sheets September 30, 2025 (unaudited) and December 31, 2024	3
	Consolidated Statements of Income Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)	4
	Consolidated Statements of Comprehensive Income Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)	5
	Consolidated Statements of Cash Flows Nine Months Ended September 30, 2025 and 2024 (unaudited)	6
	Consolidated Statements of Shareholders’ Equity Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	41
Item 4.	CONTROLS AND PROCEDURES	41
PART II – Other Information – Items 1. – 6.		43
SIGNATURES		45

Forward-looking Statements - Factors That May Affect Future Results

This report may contain or incorporate by reference forward-looking statements made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although we believe that, in making any such statements, our expectations are based on reasonable assumptions, forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors beyond our control, which may cause future performance to be materially different from expected performance summarized in the forward-looking statements. These risks, uncertainties and other factors are discussed in Part I, Item 1A, “Risk Factors” of the Company’s 2024 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”), which may be updated from time to time in our future filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, or changes to future results over time.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands except Share and Per Share Data)


	September 30, 2025 (Unaudited)		December 31, 2024
Assets
Cash and due from banks	$	30,663	$	19,328
Short-term investments	227,971		330,400
Cash and cash equivalents	258,634		349,728
Investment securities available-for-sale, at fair value	717,369		528,021

Loans	1,088,347		1,081,989
Less: Allowance for credit losses	14,066		13,395
Loans, net	1,074,281		1,068,594
Payments in advance of funding	188,040		208,530
Premises and equipment, net	30,287		30,576
Investment in bank-owned life insurance	51,700		50,325
Goodwill	16,164		16,333
Other intangible assets, net	4,036		4,914
Accounts and drafts receivable from customers	49,798		55,906
Other assets	63,313		67,741
Assets of discontinued operations	—		14,413
Total assets	$	2,453,622	$	2,395,081

Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing	$	407,169	$	251,230
Interest-bearing	627,491		716,686
Total deposits	1,034,660		967,916
Accounts and drafts payable	1,130,371		1,129,610
Other liabilities	45,142		46,211
Liabilities of discontinued operations	—		22,314
Total liabilities	2,210,173		2,166,051

Shareholders’ Equity:
Preferred stock, par value $.50 per share; 2,000,000 shares authorized and no shares issued	—		—
Common stock, par value $.50 per share; 40,000,000 shares authorized and 15,505,772 shares issued at September 30, 2025 and December 31, 2024; 13,120,318 and 13,504,104 shares outstanding at September 30, 2025 and December 31, 2024, respectively.	7,753		7,753
Additional paid-in capital	205,925		205,593
Retained earnings	163,038		148,487
Common shares in treasury, at cost (2,385,454 shares at September 30, 2025 and 2,001,668 shares at December 31, 2024)	(103,835)		(87,615)
Accumulated other comprehensive loss	(29,432)		(45,188)
Total shareholders’ equity	243,449		229,030
Total liabilities and shareholders’ equity	$	2,453,622	$	2,395,081

See accompanying notes to unaudited consolidated financial statements.

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CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in Thousands except Per Share Data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Fee Revenue and Other Income:
Processing fees	$	16,655	$	16,686	$	50,206	$	50,361
Financial fees	10,416		11,017		30,538		32,075
Gain (loss) on sale of investment securities	4		—		(3,572)		(13)
Other	1,768		1,060		4,657		3,512
Total fee revenue and other income	28,843		28,763		81,829		85,935

Interest Income:
Interest and fees on loans	15,632		14,567		46,819		40,935
Interest and dividends on investment securities:
Taxable	4,491		3,114		11,996		10,117
Exempt from federal income taxes	1,188		893		2,629		2,709
Interest on federal funds sold and other short-term investments	3,860		4,200		10,755		11,908
Total interest income	25,171		22,774		72,199		65,669

Interest Expense:
Interest on deposits	4,151		5,156		12,431		15,646

Total interest expense	4,151		5,156		12,431		15,646
Net interest income	21,020		17,618		59,768		50,023
(Release of) provision for credit losses	(193)		(140)		737		355
Net interest income after (release of) provision for credit losses	21,213		17,758		59,031		49,668
Total net revenue	50,056		46,521		140,860		135,603

Operating Expense:
Salaries and commissions	20,105		20,530		60,406		60,445
Share-based compensation	1,018		863		3,177		2,508
Employee profit sharing	1,685		627		4,770		2,978
Net periodic pension cost	—		195		—		581
Other benefits	4,798		4,307		14,284		13,161
Total personnel expenses	27,606		26,522		82,637		79,673
Occupancy	734		699		2,124		2,016
Equipment	2,513		2,058		7,369		5,825
Amortization of intangible assets	293		173		879		519
Bad debt expense (recovery)	—		6,559		(2,000)		7,847
Other operating expense	7,295		6,746		21,081		21,494
Total operating expense	38,441		42,757		112,090		117,374
Income from continuing operations, before income tax expense	11,615		3,764		28,770		18,229
Income tax expense	2,403		736		5,848		3,829
Net income from continuing operations	9,212		3,028		22,922		14,400
(Loss) income from discontinued operations, net of tax	(106)		(90)		4,005		174
Net income	$	9,106	$	2,938	$	26,927	$	14,574

Basic earnings per share from continuing operations	$	.70	$	.23	$	1.73	$	1.07
Basic (loss) earnings per share from discontinued operations	(.01)		(.01)		.30		.01
Basic earnings per share	$	.69	$	.22	$	2.03	$	1.08

Diluted earnings per share from continuing operations	$	.69	$	.22	$	1.69	$	1.05
Diluted (loss) earnings per share from discontinued operations	(.01)		(.01)		.30		.01
Diluted earnings per share	$	.68	$	.21	$	1.99	$	1.06

See accompanying notes to unaudited consolidated financial statements.

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CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in Thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Comprehensive Income:
Net income	$	9,106	$	2,938	$	26,927	$	14,574
Other comprehensive income:
Net unrealized gain on securities available-for-sale	4,882		13,624		17,145		10,938
Tax effect	(1,161)		(3,243)		(4,080)		(2,604)
Reclassification adjustments for (gains) losses included in net income	(4)		—		3,572		13
Tax effect	1		—		(850)		(3)
Foreign currency translation adjustments	(475)		172		(31)		40
Total comprehensive income	$	12,349	$	13,491	$	42,683	$	22,958

See accompanying notes to unaudited consolidated financial statements.

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CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Thousands)


	Nine Months Ended September 30,
	2025		2024
Cash Flows From Operating Activities:
Net income	$	26,927	$	14,574
Less: net income from discontinued operations	4,005		174
Net income from continuing operations	22,922		14,400
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets	879		519
Net amortization of premium/discount on investment securities	981		2,916
Depreciation	4,474		3,486
Loss on sale of investment securities	3,572		13
Share-based compensation expense	3,177		2,508
Provision for credit losses	737		355
Increase in current income tax liability	2,190		56
Increase in accounts receivable	(349)		(4,033)
Other operating activities, net	(4,624)		(1,638)
Net cash provided by operating activities - continuing operations	33,959		18,582
Net cash (used in) provided by operating activities - discontinued operations	(1,370)		1,737
Net cash provided by operating activities	32,589		20,319

Cash Flows From Investing Activities:
Proceeds from sales of investment securities available-for-sale	125,815		24,985
Proceeds from maturities of investment securities available-for-sale	55,814		130,518
Purchase of investment securities available-for-sale	(354,813)		(71,121)
Net increase in loans	(6,358)		(64,069)

Proceeds from sale of TEM business	18,000		—
Decrease (increase) in payments in advance of funding	20,490		(8,341)
Purchases of premises and equipment, net	(4,946)		(8,321)
Net cash (used in) provided by investing activities - continuing operations	(145,998)		3,651
Net cash (used in) provided by investing activities - discontinued operations	(99)		472
Net cash (used in) provided by investing activities	(146,097)		4,123

Cash Flows From Financing Activities:
Net increase (decrease) in noninterest-bearing demand deposits	155,939		(131,786)
Net (decrease) increase in interest-bearing demand and savings deposits	(101,037)		33,640
Net increase in time deposits	11,842		4,655
Net decrease in accounts and drafts receivable from customers	6,108		79,760

Net increase (decrease) in accounts and drafts payable	760		(130,806)
Cash dividends paid	(12,376)		(12,264)
Purchase of common shares for treasury	(17,728)		(3,705)
Other financing activities, net	(1,429)		(1,749)
Net cash provided by (used in) financing activities - continuing operations	42,079		(162,255)
Net cash used in financing activities - discontinued operations	(19,665)		(4,099)
Net cash provided by (used in) financing activities	22,414		(166,354)
Net decrease in cash and cash equivalents	(91,094)		(141,912)
Cash and cash equivalents at beginning of period	349,728		372,468
Cash and cash equivalents at end of period	$	258,634	$	230,556

Supplemental information:
Cash paid for interest	$	12,126	$	15,653
Cash paid for income taxes	4,890		4,095

See accompanying notes to unaudited consolidated financial statements.

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CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

(Unaudited)

(Dollars in Thousands except per share data)


	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total
Balance, June 30, 2024	$	7,753	$	204,128	$	149,236	$	(81,554)	$	(49,638)	$	229,925
Net income					2,938						2,938
Cash dividends ($0.30 per share)					(4,082)						(4,082)
Issuance of 1,505 common shares pursuant to share-based compensation plans, net			—				66				66

Share-based compensation expense			898				—				898
Purchase of 64,471 common shares							(2,651)				(2,651)
Other comprehensive gain									10,553		10,553
Balance, September 30, 2024	$	7,753	$	205,026	$	148,092	$	(84,139)	$	(39,085)	$	237,647


Balance, June 30, 2025	$	7,753	$	204,842	$	158,005	$	(97,103)	$	(32,675)	$	240,822
Net income					9,106						9,106
Cash dividends ($0.31 per share)					(4,073)						(4,073)
Issuance of 1,490 common shares pursuant to share-based compensation plans, net			65				—				65

Share-based compensation expense			1,018				—				1,018
Purchase of 159,587 common shares							(6,732)				(6,732)
Other comprehensive gain									3,243		3,243
Balance, September 30, 2025	$	7,753	$	205,925	$	163,038	$	(103,835)	$	(29,432)	$	243,449

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CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

(Unaudited)

(Dollars in Thousands except per share data)


	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total
Balance, December 31, 2023	$	7,753	$	208,007	$	145,782	$	(84,264)	$	(47,469)	$	229,809
Net income					14,574						14,574
Cash dividends ($0.90 per share)					(12,264)						(12,264)
Issuance of 124,801 common shares pursuant to share-based compensation plan, net			(5,611)				3,862				(1,749)

Share-based compensation expense			2,630				(32)				2,598
Purchase of 87,742 common shares							(3,705)				(3,705)
Other comprehensive gain									8,384		8,384
Balance, September 30, 2024	$	7,753	$	205,026	$	148,092	$	(84,139)	$	(39,085)	$	237,647


Balance, December 31, 2024	$	7,753	$	205,593	$	148,487	$	(87,615)	$	(45,188)	$	229,030
Net income					26,927						26,927
Cash dividends ($0.93 per share)					(12,376)						(12,376)
Issuance of 120,642 common shares pursuant to share-based compensation plans, net			(2,927)				1,563				(1,364)

Share-based compensation expense			3,259				(55)				3,204
Purchase of 415,965 common shares							(17,728)				(17,728)
Other comprehensive gain									15,756		15,756
Balance, September 30, 2025	$	7,753	$	205,925	$	163,038	$	(103,835)	$	(29,432)	$	243,449

See accompanying notes to unaudited consolidated financial statements.

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CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 System, Inc.’s (the “Company” or “Cass”) Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 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 being sold related to the Company's TEM Business Unit as of September 30, 2025 and December 31, 2024, and for the three and nine months ended September 30, 2025, and 2024, as applicable. 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.

The carrying amount of major classes of assets and liabilities included as part of discontinued operations at September 30, 2025, and December 31, 2024 were as follows:


	September 30, 2025		December 31, 2024
(In thousands except share and per share data)
Assets
Premises and equipment, net	$	—	$	3,598
Goodwill	—		5,019
Other intangible assets, net	—		93
Other assets	—		5,703
Assets of discontinued operations	$	—	$	14,413

Liabilities
Accounts and drafts payable	$	—	$	19,665
Other liabilities	—		2,649
Liabilities of discontinued operations	$	—	$	22,314

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Income from discontinued operations, net of tax, for the three and nine months ended September 30, 2025, and 2024 are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands except per share data)	2025		2024		2025		2024
Fee Revenue and Other Income:
Processing fees	$	—	$	3,849	$	7,630	$	12,027
Financial fees	—		161		888		508
Other	772		20		2,608		680
Gain on sale of TEM business	—		—		3,550		—
Total fee revenue and other income	772		4,030		14,676		13,215

Operating Expense:
Salaries and commissions	536		2,693		6,150		8,662
Share-based compensation	—		35		28		91
Other benefits	183		617		1,324		1,905
Total personnel expenses	719		3,345		7,502		10,658
Occupancy	23		191		384		562
Equipment	1		50		100		151
Amortization of intangible assets	—		9		19		36
Other operating expense	170		547		1,357		1,582
Total operating expense	913		4,142		9,362		12,989
(Loss) income from discontinued operations, before income tax (benefit) expense	(141)		(112)		5,314		226
Income tax (benefit) expense	(35)		(22)		1,309		52
Net (loss) income from discontinued operations	$	(106)	$	(90)	$	4,005	$	174

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:


	September 30, 2025				December 31, 2024
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Assets eligible for amortization:
Customer lists	$	6,215	$	(4,938)	$	6,314	$	(4,729)

Software	5,512		(3,007)		5,412		(2,358)
Trade name	373		(119)		373		(98)

Unamortized intangible assets:
Goodwill	16,164		—		16,333		—
Total intangible assets	$	28,264	$	(8,064)	$	28,432	$	(7,185)

The customer lists are amortized over 5 to 10 years; software over 3 to 7 years; the trade names over 10 to 20 years; and other intangible assets over 15 years. Amortization of intangible assets amounted to $293,000 and $879,000 for the three and nine months ended September 30, 2025, respectively. Amortization of intangible assets amounted to $173,000 and

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$519,000 for the three and nine months ended September 30, 2024, respectively. Estimated annual amortization of intangibles is $1.2 million in 2025, $1.0 million in 2026, $730,000 in 2027, 2028, and $699,000 in 2029.

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:


(In thousands except share and per share data)	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Basic:
Net income from continuing operations	$	9,212	$	3,028	$	22,922	$	14,400
Net (loss) income from discontinued operations	(106)		(90)		4,005		174
Net income	$	9,106	$	2,938	$	26,927	$	14,574
Weighted-average common shares outstanding	13,116,216		13,504,204		13,262,729		13,524,165
Basic earnings per share from continuing operations	$	0.70	$	0.23	$	1.73	$	1.07
Basic (loss) earnings per share from discontinued operations	$	(0.01)	$	(0.01)	$	0.30	$	0.01
Basic earnings per share	$	0.69	$	0.22	$	2.03	$	1.08

Diluted:
Net income from continuing operations	$	9,212	$	3,028	$	22,922	$	14,400
Net (loss) income from discontinued operations	(106)		(90)		4,005		174
Net income	$	9,106	$	2,938	$	26,927	$	14,574
Weighted-average common shares outstanding	13,116,216		13,504,204		13,262,729		13,524,165
Effect of dilutive restricted stock and stock appreciation rights	283,139		281,793		274,500		273,575
Weighted-average common shares outstanding assuming dilution	13,399,355		13,785,997		13,537,229		13,797,740
Diluted earnings per share from continuing operations	$	0.69	$	0.22	$	1.69	$	1.05
Diluted (loss) earnings per share from discontinued operations	$	(0.01)	$	(0.01)	$	0.30	$	0.01
Diluted earnings per share	$	0.68	$	0.21	$	1.99	$	1.06

Note 5 – Stock Repurchases

The Company maintains a treasury stock buyback program pursuant to which, in July 2025, the Board of Directors authorized the repurchase of up to 500,000 shares of the Company’s common stock with no expiration date. As of September 30, 2025, the Company had 340,413 shares remaining available for repurchase under the program. The Company repurchased 159,587 and 415,965 shares during the three and nine months ended September 30, 2025, respectively and 64,471 and 87,742 shares during the three and nine months ended September 30, 2024, respectively. Repurchases may be made in the open market or through negotiated transactions from time to time depending on market conditions.

Note 6 – Industry Segment Information

The services provided by the Company are classified into two reportable segments: Information Services and Banking Services. Each of these segments provides distinct services that are marketed through different channels and are consistent

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with the presentation of financial information to the chief operating decision maker to evaluate segment performance, develop strategy, and allocate 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 being sold related to the TEM Business Unit as of and for the three and nine months ended September 30, 2025 and 2024, 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 2024 Form 10-K. Management and the chief operating decision maker evaluates 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.

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:


(In thousands)	Information Services		Banking Services		Corporate, Eliminations and Other		Total
Three Months Ended September 30, 2025:
Fee revenue and other income	$	27,491	$	669	$	679	$	28,839
Gain on sale of investment securities	—		—		4		4
Interest income	12,637		16,487		(3,953)		25,171
Interest expense	293		7,752		(3,894)		4,151
Release of credit losses	—		(193)		—		(193)
Total net revenue	39,835		9,597		624		50,056

Personnel expenses	24,354		3,252		—		27,606
Occupancy	534		200		—		734
Equipment	2,453		60		—		2,513

Intersegment expense (income)	865		(865)		—		—
Other operating expense	5,507		2,081		—		7,588
Total operating expense	33,713		4,728		—		38,441
Pre-tax income from continuing operations	6,122		4,869		624		11,615
Pre-tax loss from discontinued operations	(141)		—		—		(141)

Goodwill	16,028		136		—		16,164
Other intangible assets, net	4,036		—		—		4,036
Total assets	1,591,235		1,174,037		(311,650)		2,453,622
Average funding sources	$	1,451,420	$	761,129	$	—	$	2,212,549

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(In thousands)	Information Services		Banking Services		Corporate, Eliminations and Other		Total
Three Months Ended September 30, 2024:
Fee revenue and other income	$	27,800	$	614	$	349	$	28,763

Interest income	10,223		15,630		(3,079)		22,774
Interest expense	334		9,005		(4,183)		5,156
Release of credit losses	—		(140)		—		(140)
Total net revenue	37,689		7,379		1,453		46,521

Personnel expenses	23,489		3,033		—		26,522
Occupancy	534		165		—		699
Equipment	1,808		250		—		2,058
Bad debt expense	6,559		—		—		6,559
Intersegment expense (income)	938		(938)		—		—
Other operating expense	4,683		2,236		—		6,919
Total operating expense	38,011		4,746		—		42,757
Pre-tax (loss) income from continuing operations	(322)		2,633		1,453		3,764
Pre-tax loss from discontinued operations	(112)		—		—		(112)

Goodwill	17,173		136		—		17,309
Other intangible assets, net	2,789		—		—		2,789
Total assets	1,371,095		1,172,264		(282,599)		2,260,760
Average funding sources	$	1,273,365	$	774,126	$	—	$	2,047,491

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(In thousands)	Information Services		Banking Services		Corporate, Eliminations and Other		Total
Nine Months Ended September 30, 2025:
Fee revenue and other income	$	81,845	$	1,972	$	1,584	$	85,401
Loss on sale of investment securities	—		—		(3,572)		(3,572)
Interest income	34,090		49,390		(11,281)		72,199
Interest expense	818		23,493		(11,880)		12,431
Provision for credit losses	—		737		—		737
Total net revenue	115,117		27,132		(1,389)		140,860

Personnel expenses	73,267		9,370		—		82,637
Occupancy	1,561		563		—		2,124
Equipment	7,175		194		—		7,369
Bad debt recovery	(2,000)		—		—		(2,000)
Intersegment income (expense)	2,637		(2,637)		—		—
Other operating expense	16,101		5,859		—		21,960
Total operating expense	98,741		13,349		—		112,090
Pre-tax income (loss) from continuing operations	16,376		13,783		(1,389)		28,770
Pre-tax income from discontinued operations	5,314		—		—		5,314

Goodwill	16,028		136		—		16,164
Other intangible assets, net	4,036		—		—		4,036
Total assets	1,591,235		1,174,037		(311,650)		2,453,622
Average funding sources	$	1,376,783	$	764,987	$	—	$	2,141,770

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(In thousands)	Information Services		Banking Services		Corporate, Eliminations and Other		Total
Nine Months Ended September 30, 2024:
Fee revenue and other income	$	82,998	$	1,919	$	1,031	$	85,948
Loss on sale of investment securities	—		—		(13)		(13)
Interest income	30,166		44,194		(8,691)		65,669
Interest expense	1,246		25,468		(11,068)		15,646
Provision for credit losses	—		355		—		355
Total net revenue	111,918		20,290		3,395		135,603

Personnel expenses	70,739		8,934		—		79,673
Occupancy	1,518		498		—		2,016
Equipment	5,077		748		—		5,825
Bad debt expense	7,847		—		—		7,847
Intersegment income (expense)	2,992		(2,992)		—		—
Other operating expense	15,621		6,392		—		22,013
Total operating expense	103,794		13,580		—		117,374
Pre-tax income from continuing operations	8,124		6,710		3,395		18,229
Pre-tax income from discontinued operations	226		—		—		226

Goodwill	17,173		136		—		17,309
Other intangible assets, net	2,789		—		—		2,789
Total assets	1,371,095		1,172,264		(282,599)		2,260,760
Average funding sources	$	1,267,431	$	786,541	$	—	$	2,053,972

Intersegment income (expense) primarily relates to 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.

Note 7 – Loans by Type

A summary of loans is as follows:


(In thousands)	September 30, 2025		December 31, 2024
Commercial and industrial	$	569,739	$	559,262
Real estate:
Commercial:
Mortgage	101,242		119,194
Construction	10,302		9,134
Faith-based:
Mortgage	378,820		368,881
Construction	28,244		25,518

Total loans	$	1,088,347	$	1,081,989

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The following table presents the aging of loans past due by category at September 30, 2025 and December 31, 2024:


	Performing						Nonperforming
(In thousands)	Current		30-59 Days		60-89 Days		90 Days and Over		Non- accrual		Total Loans
September 30, 2025
Commercial and industrial	$	565,969	$	—	$	—	$	—	$	3,770	$	569,739
Real estate
Commercial:
Mortgage	97,938		—		—		—		3,304		101,242
Construction	10,302		—		—		—		—		10,302
Faith-based:
Mortgage	378,820		—		—		—		—		378,820
Construction	28,244		—		—		—		—		28,244


Total	$	1,081,273	$	—	$	—	$	—	$	7,074	$	1,088,347
December 31, 2024
Commercial and industrial	$	559,262	$	—	$	—	$	—	$	—	$	559,262
Real estate
Commercial:
Mortgage	119,194		—		—		—		—		119,194
Construction	9,134		—		—		—		—		9,134
Faith-based:
Mortgage	368,881		—		—		—		—		368,881
Construction	25,518		—		—		—		—		25,518


Total	$	1,081,989	$	—	$	—	$	—	$	—	$	1,081,989

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The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of September 30, 2025 and December 31, 2024:


(In thousands)	Loans Subject to Normal Monitoring1		Performing Loans Subject to Special Monitoring2		Nonperforming Loans Subject to Special Monitoring2		Total Loans
September 30, 2025
Commercial and industrial	$	533,678	$	32,291	$	3,770	$	569,739
Real estate
Commercial:
Mortgage	93,982		3,956		3,304		101,242
Construction	10,302		—		—		10,302
Faith-based:
Mortgage	368,216		10,604		—		378,820
Construction	28,244		—		—		28,244


Total	$	1,034,422	$	46,851	$	7,074	$	1,088,347
December 31, 2024
Commercial and industrial	$	527,690	$	31,572	$	—	$	559,262
Real estate
Commercial:
Mortgage	116,063		3,131		—		119,194
Construction	9,134		—		—		9,134
Faith-based:
Mortgage	352,356		16,525		—		368,881
Construction	25,518		—		—		25,518


Total	$	1,030,761	$	51,228	$	—	$	1,081,989


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.

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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.

The following table shows the amortized cost of loans that were both experiencing financial difficulty and modified during the nine months ended September 30, 2025, segregated by category and type of modification.


(In thousands)	Payment Delay		Term Extension		Interest Rate Reduction		Combination Term Extension and Interest Rate Reduction		Percentage of Total Loans Held for Investment
September 30, 2025
Commercial and industrial	$	—	$	27,930	$	—	$	—	4.90	%








Total	$	—	$	27,930	$	—	$	—	2.57	%

There were two loans modified during the nine months ended September 30, 2025. There were no loans modified during the nine months ended September 30, 2024. Both loans modified during the nine months ended September 30, 2025 were due to term extensions coupled with an interest rate increase.

The following table shows the payment status of loans that have been modified to borrowers experiencing financial difficulty in the last twelve months:


(In thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due

Commercial and industrial	$	27,930	$	—	$	—	$	—	—		%








Total	$	27,930	$	—	$	—	$	—	$	—

At September 30, 2025, 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.

There were no modified loans that had a payment default during the nine months ended September 30, 2025 that had been modified due to the borrower experiencing financial difficulty within the 12 previous months preceding the default.

Upon the Company's determination that a modified loan has subsequently been deemed uncollectible, the loan is written off. There were no loans written off during the nine months ended September 30, 2025.

At September 30, 2025, the Company had three non-accrual loans totaling $7.1 million that had an allowance for credit losses specifically allocated to them of $141,000 based on an evaluation of expected credit losses. There were no non-accrual loans at December 31, 2024. The Company did not record any interest income on non-accrual loans during the three and nine months ended September 30, 2025 or September 30, 2024.

There were no foreclosed loans recorded as other real estate owned as of September 30, 2025 or December 31, 2024.

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A summary of the activity in the allowance for credit losses (“ACL”) by category for the nine months ended September 30, 2025 and year-ended December 31, 2024 is as follows:


(In thousands)	C&I		CRE		Faith-based CRE		Construction		Total
Balance at January 1, 2024	$	5,412	$	1,093	$	6,476	$	108	$	13,089
Provision for (release of) credit losses	485		(70)		(218)		109		306

Balance at December 31, 2024	$	5,897	$	1,023	$	6,258	$	217	$	13,395

Provision for (release of) credit losses (1)	279		(14)		359		47		671

Balance at September 30, 2025	$	6,176	$	1,009	$	6,617	$	264	$	14,066


(1)			For the nine months ended September 30, 2025, there was a provision for credit losses of $66,000 for unfunded commitments.

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 $339,000 and $273,000 had been recorded at September 30, 2025 and December 31, 2024, respectively.

At September 30, 2025, the balances of unfunded commitments, standby and commercial letters of credit were $174.8 million, $11.9 million, and $489,000, respectively. Since some of the financial instruments may expire without being drawn upon, the total amounts do not necessarily represent future cash requirements.

On March 19, 2024, the Company filed a claim against Rubicon Technologies, Inc. ("Rubicon") for failed reimbursement of invoices that were processed and paid by the Company on Rubicon's behalf and unpaid fees for Company services that were due for invoice management services and bill pay services, together with interest and penalties related to the foregoing amounts. On April 22, 2024, Rubicon filed a counterclaim against the Company for failure to perform its obligations under the Master Services Agreement between the Company and Rubicon. The Company recorded a write-off to bad debt expense of $7.8 million for the year ended December 31, 2024 related to this matter.

On March 28, 2025, the Company and Rubicon, in order to fully resolve the above matters, signed a Settlement Agreement and Mutual Release whereby Rubicon made an initial payment to the Company of $2.0 million. The Company recorded a bad debt recovery of $2.0 million in the consolidated statement of income for the nine months ended September 30, 2025 upon receipt of the initial payment of $2.0 million. Rubicon also agreed to a fully amortizing, interest-bearing Promissory Note of $5.0 million, with annual payments, maturing July 1, 2029. The Company will record any future payments received in accordance with the Settlement Agreement and Mutual Release as a bad debt recovery when cash is received.

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, 2025, 65,294 time-based restricted shares and 56,339 performance-based restricted shares were granted under the 2023 Omnibus Plan. Share-based compensation expense was $1.0 million and $3.2 million for the three and nine months ended September 30, 2025, respectively, and $863,000 and $2.5 million for the three and nine months ended September 30, 2024, respectively.

Restricted Stock

Restricted shares granted to Company employees are amortized to expense over a three-year cliff vesting period, or until vesting occurs upon retirement. Restricted shares granted to members of the Board of Directors are amortized to expense

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over a one-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.

As of September 30, 2025, the total unrecognized compensation expense related to non-vested restricted shares was $2.3 million, and the related weighted-average period over which it is expected to be recognized is approximately 0.58 years.

Following is a summary of the activity of the Company's restricted stock for the nine months ended September 30, 2025, with total shares and weighted-average fair value:


	Nine Months Ended September 30, 2025
	Shares	Fair Value
Balance at December 31, 2024	254,808	$	42.87
Granted	65,294	40.88
Vested	(43,526)	39.62
Forfeitures	(2,558)	45.33
Balance at September 30, 2025	274,018	$	42.88

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 a three-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 the three-year performance period.

Following is a summary of the activity of the PBRS for the nine months ended September 30, 2025, based on 100% of target value:


	Nine Months Ended September 30, 2025
	Shares	Fair Value
Balance at December 31, 2024	158,428	$	43.87
Granted	56,339	41.45
Vested	(55,848)	39.58
Forfeitures	(4,200)	44.50
Balance at September 30, 2025	154,719	$	44.52

The PBRS that vested during the nine months ended September 30, 2025 were based on the Company's achievement of 99.1% of target financial goals for the 2022-2024 performance period, resulting in the issuance of 55,348 shares of common stock. The outstanding PBRS at September 30, 2025 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 – Defined Pension Plans

The Company had a noncontributory defined-benefit pension plan (the “Plan”), which covered eligible employees that was terminated in 2024. The Company recorded no net periodic pension cost for the three and nine months ended

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September 30, 2025, and $195,000 and $581,000 for the three and nine months ended September 30, 2024, respectively related to the Plan.

In addition to the Plan, 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:


(In thousands)	Estimated 2025		Actual 2024

Interest cost on projected benefit obligation	$	463	$	450
Net amortization	(13)		—
Net periodic pension cost	$	450	$	450

SERP cost recorded to expense was $113,000 and $338,000 for the three and nine month periods ended September 30, 2025, September 30, 2024, respectively.

Note 11 – Income Taxes

The effective tax rate for continuing operations was 20.7% and 20.3% for the three and nine months ended September 30, 2025, respectively and was 19.6% and 21.0% for the three and nine months ended September 30, 2024, respectively. The effective tax rate can differ from the statutory rate of 21% primarily due to the impact of state income taxes, the tax-exempt interest received from municipal bonds and bank-owned life insurance, 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:


	September 30, 2025
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
State and political subdivisions	$	257,145	$	1,802	$	(11,838)	$	247,109
Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	439,159		1,515		(27,864)		412,810
Corporate bonds	30,960		—		(2,238)		28,722

Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	29,074		—		(346)		28,728
Total	$	756,338	$	3,317	$	(42,286)	$	717,369


	December 31, 2024
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
State and political subdivisions	$	188,933	$	4	$	(16,973)	$	171,964
Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	267,359		11		(34,095)		233,275
Corporate bonds	95,841		3		(8,058)		87,786

Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	35,575		—		(579)		34,996
Total	$	587,708	$	18	$	(59,705)	$	528,021

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


	September 30, 2025
	Less than 12 months				12 months or more				Total
(In thousands)	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
State and political subdivisions	$	2,814	$	16	$	148,209	$	11,822	$	151,023	$	11,838
Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	117,666		1,227		145,446		26,637		263,112		27,864
Corporate bonds	—		—		28,723		2,238		28,723		2,238

Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	—		—		28,728		346		28,728		346
Total	$	120,480	$	1,243	$	351,106	$	41,043	$	471,586	$	42,286


	December 31, 2024
	Less than 12 months				12 months or more				Total
(In thousands)	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
State and political subdivisions	$	4,082	$	8	$	163,893	$	16,964	$	167,975	$	16,972
Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	85,272		2,086		139,676		32,009		224,948		34,095
Corporate bonds	7,901		99		66,860		7,960		74,761		8,059

Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	—		—		30,575		579		30,575		579
Total	$	97,255	$	2,193	$	401,004	$	57,512	$	498,259	$	59,705

There were 209 investment securities, or 69.9% (182 of which for greater than 12 months), in an unrealized loss position as of September 30, 2025. The unrealized losses at September 30, 2025 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 241 investment securities, or 96.0% (215 of which for greater than 12 months), in an unrealized loss position as of December 31, 2024. At September 30, 2025 and December 31, 2024, 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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	September 30, 2025
(In thousands)	Amortized Cost		Fair Value
Due in 1 year or less	$	11,388	$	11,387
Due after 1 year through 5 years	75,399		72,765
Due after 5 years through 10 years	167,330		154,915
Due after 10 years	502,221		478,302
Total	$	756,338	$	717,369

Proceeds from sales of investment securities classified as available-for-sale were $72.7 million and $125.8 million for the three and nine months ended September 30, 2025, and were $0 and $25.0 million for the three and nine months ended September 30, 2024, respectively. Gross realized losses were $347,000 and $3.9 million for the three and nine months ended September 30, 2025, respectively, and were $0 and $13,000 for the three and nine months ended September 30, 2024, respectively. There were $351,000 gross realized gains for both the three and nine months ended September 30, 2025, respectively, and no gross realized gains for both the three and nine months ended September 30, 2024, respectively. There were no investment securities pledged to secure public deposits or for other purposes at September 30, 2025.

Note 13 – Fair Value of Financial Instruments

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


	September 30, 2025				December 31, 2024
(In thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Balance sheet assets:
Cash and cash equivalents	$	258,634	$	258,634	$	349,728	$	349,728
Investment securities	717,369		717,369		528,021		528,021
Loans, net	1,074,281		1,065,604		1,068,594		1,046,406
Accrued interest receivable	9,558		9,558		7,979		7,979
Total	$	2,059,842	$	2,051,165	$	1,954,322	$	1,932,134
Balance sheet liabilities:
Deposits	$	1,034,660	$	1,034,660	$	967,916	$	967,916
Accounts and drafts payable	1,130,371		1,130,371		1,129,610		1,129,610
Accrued interest payable	971		971		666		666
Total	$	2,166,002	$	2,166,002	$	2,098,192	$	2,098,192

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 result 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

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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.

Accrued Interest Payable - The carrying amount approximates fair value.

Note 14 – 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 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, 2025 and 2024.


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands)	2025		2024		2025		2024
Fee revenue and other income
In-scope of FASB ASC 606
Processing fees	$	16,655	$	16,686	$	50,206	$	50,361
Financial fees	10,416		11,017		30,538		32,075
Information services payment and processing revenue	27,071		27,703		80,744		82,436
Bank service fees	372		354		1,058		955
Fee revenue (in-scope of FASB ASC 606)	27,443		28,057		81,802		83,391
Other income (out-of-scope of FASB ASC 606)	1,396		706		3,599		2,557
Gain (loss) on sale of investment securities	4		—		(3,572)		(13)
Total fee revenue and other income	$	28,843	$	28,763	$	81,829	$	85,935

Note 15 – Leases

The Company leases certain premises under operating leases. As of September 30, 2025, the Company had lease liabilities of $4.7 million and right-of-use assets of $4.5 million. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. Presented within occupancy expense on the Consolidated Statements of Income for the three and nine months ended September 30, 2025, operating lease cost was $214,000 and $642,000, respectively, short-term lease cost was $53,000 and $159,000, respectively, and there was no variable lease cost. At September 30, 2025, the weighted-average remaining lease term for the operating leases was 6.4 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 2.75%. 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 2024 Form 10-K for information regarding these commitments.

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A maturity analysis of operating lease liabilities and undiscounted cash flows as of September 30, 2025 is as follows:


(In thousands)	September 30, 2025
Lease payments due
Less than 1 year	$	833
1-2 years	817
2-3 years	800
3-4 years	711
4-5 years	723
Over 5 years	1,230
Total undiscounted cash flows	5,114
Discount on cash flows	427
Total lease liability	$	4,687

There were no sale and leaseback transactions, leveraged leases, or lease transactions with related parties during the nine months ended September 30, 2025.

Note 16 – 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, 2025. There were no other events identified that would require additional disclosures to prevent the Company’s unaudited consolidated financial statements from being misleading.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Cass Information Systems, Inc. ("Cass" or the "Company") provides payment and information processing services to large manufacturing, distribution, and retail enterprises across the United States. The Company’s services include freight invoice rating, payment processing, auditing, and the generation of accounting and transportation information. Cass also processes and pays facility-related invoices, which include electricity and gas as well as waste and telecommunications expenses. Cass solutions include integrated payments, a B2B payment platform for clients that require an agile fintech partner. Additionally, the Company offers a church management software solution and an on-line platform to provide generosity services for faith-based and non-profit organizations. The Company’s bank subsidiary, Cass Commercial Bank (the “Bank”), supports the Company’s payment operations. The Bank also provides banking services to its target markets, which include privately held businesses in the St. Louis metropolitan area and restaurant franchises and faith-based ministries within the United States.

In general, Cass is compensated for its information processing services through service fees, transactional level payment services, and investment of account balances generated during the payment process. Both the number of transactions processed and the dollar volume processed are therefore key metrics followed by management. The Bank earns most of its revenue from net interest income.

Various factors will influence the Company’s revenue and profitability, such as changes in the general level of interest rates, which has a significant effect on net interest income; industry-wide factors, such as the willingness of large corporations to outsource key business functions, and the general level of transportation and energy costs; and economic factors that include the general level of economic activity, the ability to hire and retain qualified staff, the growth and quality of the Bank’s loan portfolio, and the effects of tariffs or other domestic or international governmental policies. For a more detailed discussion of the Company’s revenue drivers and factors that impact the Company’s results of operation and financial condition generally, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 2024 Form 10-K.

Recent Industry Developments

While freight rates have recently begun gradually increasing after several quarters of decline since 2023, volumes continue to decline on a year over year basis which continues to put pressure on transportation related processing fees. In addition, carrier consolidation with small and medium-sized trucking companies exiting the market or selling to larger carriers continues to put downward pressure on financial fees as the smaller trucking companies were larger users of our quick pay solutions.

The Company has experienced an increase in facility dollar volumes in recent quarters due to higher energy usage and prices, in addition to onboarding new clients with high dollar volumes as compared to the related transaction count. Energy prices are rising due to a number of factors, including an aging power grid, and rising demand for electricity as a result of data center construction to power artificial intelligence and electric vehicles.

Recent Items of Note

Net interest income increased $3.5 million, or 19.3%, as compared to the same period last year. The increase in net interest income was attributable to the net interest margin improving to 3.87% as compared to 3.55% in the same period last year, in addition to an increase in average interest-earning assets of $187.6 million, or 9.4%. The Company generally benefits from a higher interest rate environment due to a large percentage of its funding sources being non-interest bearing.

On July 4, 2025 the president signed into law the One Big Beautiful Bill Act which makes various changes to the tax law. The most significant impacts relate to the deductibility of interest expense, research and experimentation expenses and accelerated deprecation deductions, among others. The full impact of the bill is being analyzed by the Company and could have an impact on income tax expense in future periods.

Results of Operations

The following paragraphs more fully discuss the results of operations and changes in financial condition for the three months ended September 30, 2025 (“third quarter of 2025”) compared to the three months ended September 30, 2024 (“third quarter of 2024”) and the nine months ended September 30, 2025 compared to the nine months ended

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September 30, 2024. The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and related notes and with the statistical information and financial data appearing in this report, as well as in the Company’s 2024 Form 10-K. Results of operations for the three months ended September 30, 2025 are not necessarily indicative of the results to be attained for any other period.

Discontinued Operations

The Company has applied discontinued operations accounting in accordance with Accounting Standards Codification, or ASC, Topic 205-20, “Presentation of Financial Statements – Discontinued Operations,” to the assets and liabilities being sold related to the Company's TEM Business Unit as of September 30, 2025 and December 31, 2024, and for the three and nine months ended September 30, 2025, and 2024, as applicable. All financial information in this Quarterly Report on Form 10-Q is reported on a continuing operations basis, unless otherwise noted. See Note 2 to our consolidated financial statements for further discussion regarding discontinued operations and subsequent events associated with discontinued operations.

Summary of Results

The following table summarizes the Company’s operating results:


(In thousands except per share data)	Third Quarter of								Nine Months Ended September 30,
	2025			2024			% Change		2025			2024			% Change
Processing fees	$	16,655		$	16,686		(0.2)	%	$	50,206		$	50,361		(0.3)	%
Financial fees	10,416			11,017			(5.5)	%	30,538			32,075			(4.8)	%
Net interest income	21,020			17,618			19.3	%	59,768			50,023			19.5	%
(Release of) provision for credit loss	(193)			(140)			37.9	%	737			355			107.6	%
Gain (loss) on sale of investment securities	4			—			N/M		(3,572)			(13)			N/M
Other	1,768			1,060			66.8	%	4,657			3,512			32.6	%
Total net revenue	50,056			46,521			7.6	%	140,860			135,603			3.9	%
Operating expense	38,441			42,757			(10.1)	%	112,090			117,374			(4.5)	%
Income before income tax expense	11,615			3,764			208.6	%	28,770			18,229			57.8	%
Income tax expense	2,403			736			226.5	%	5,848			3,829			52.7	%
Net income from continuing operations	$	9,212		$	3,028		204.2	%	$	22,922		$	14,400		59.2	%
Income from discontinued operations, net of tax	$	(106)		$	(90)		(17.8)	%	$	4,005		$	174		N/M
Net income	$	9,106		$	2,938		209.9	%	$	26,927		$	14,574		84.8	%
Diluted earnings per share from continuing operations	$	0.69		$	0.22		213.6	%	$	1.69		$	1.05		61.0	%
Diluted earnings per share from discontinued operations	$	(0.01)		$	(0.01)		—	%	$	0.30		$	0.01		N/M
Diluted earnings per share	$	0.68		$	0.21		223.8	%	$	1.99		$	1.06		87.7	%
Return on average assets	1.44		%	0.50		%	188.0	%	1.48		%	0.83		%	78.3	%
Return on average equity	15.29		%	5.04		%	203.4	%	15.51		%	8.54		%	81.6	%

Third quarter of 2025 compared to third quarter of 2024:

The Company recorded net revenue of $50.1 million during the third quarter of 2025, an increase of 7.6% from the third quarter of 2024, primarily driven by an increase in net interest income, partially offset by lower financial fees. Operating expense decreased 10.1% primarily driven by $6.6 million of bad debt expense in the third quarter of 2024, partially offset

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by an increase in personnel expenses of $1.1 million. Net income was $9.1 million and diluted EPS was $0.68 per share, increases of 209.9% and 223.8% from the three months period ended September 30, 2024, respectively.

The Company posted a 1.44% return on average assets and 15.29% return on average equity.

Nine months ended September 30, 2025 compared to nine months ended September 30, 2024:

The Company recorded net revenue of $140.9 million during the nine months ended September 30, 2025, an increase of 3.9% from the nine months ended September 30, 2024, primarily driven by an increase in net interest income, partially offset by a loss on the sale of investment securities and lower financial fees. Operating expense decreased 4.5% primarily driven by a $9.8 million change in bad debt expense (recovery), partially offset by an increase in personnel expenses of $3.0 million. Net income was $26.9 million and diluted EPS was $1.99 per share, increases of 84.8% and 87.7% from the nine months ended September 30, 2024, respectively.

The Company posted a 1.48% return on average assets and 15.51% return on average equity.

Fee Revenue and Other Income

The Company’s fee revenue is derived mainly from transportation and facility processing and financial fees. As the Company provides its processing and payment services, it is compensated by service fees which are typically calculated on a per-item basis, discounts received for services provided to carriers and by the accounts and drafts payable balances generated in the payment process which can be used to generate interest income. Processing volumes, average payments in advance of funding, and fee revenue were as follows:


(In thousands)	Third Quarter of						Nine Months Ended September 30,
	2025		2024		% Change			2025		2024		% Change
Transportation invoice volume	8,884		9,160		(3.0)	%		26,075		26,810		(2.7)	%
Transportation invoice dollar volume	$	9,277,722	$	9,097,739	2.0	%		$	27,291,394	$	27,118,728	0.6	%
Facility-related transaction volume 1	4,084		4,176		(2.2)	%		12,450		12,487		(0.3)	%
Facility-related dollar volume 1	$	6,233,369	$	5,473,113	13.9	%		$	17,569,447	$	15,239,831	15.3	%
Average payments in advance of funding	$	175,705	$	202,976	(13.4)	%		$	175,170	$	203,498	(13.9)	%
Processing fees	$	16,655	$	16,686	(0.2)	%		$	50,206	$	50,361	(0.3)	%
Financial fees	$	10,416	$	11,017	(5.5)	%		$	30,538	$	32,075	(4.8)	%
Other fees	$	1,768	$	1,060	66.8	%		$	4,657	$	3,512	32.6	%
Gain (loss) on sale of investment securities	$	4	$	—	N/M			$	(3,572)	$	(13)	N/M

1.Includes utility and waste.

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Third quarter of 2025 compared to third quarter of 2024:

Processing fees decreased $31,000, or 0.2% over the same period in the prior year reflecting lower transportation and facility transaction volumes.

Financial fees decreased $601,000, or 5.5%, primarily attributable to a decline in average payments in advance of funding of 13.4%, in addition to changes in the manner whereby facility vendors receive payments.

Nine months ended September 30, 2025 compared to nine months ended September 30, 2024:

Processing fees decreased $155,000, or 0.3% over the same period in the prior year reflecting lower transportation and facility transaction volumes.

Financial fees decreased $1.5 million, or 4.8%, primarily attributable to a decline in average payments in advance of funding of 13.9%, in addition to changes in the manner whereby facility vendors receive payments.

The Company sold $34.0 million of corporate investment securities with a weighted-average yield of 2.29% at a loss of $3.6 million during June 2025. The proceeds from these sales were redeployed into higher yielding interest-earning assets during the third quarter of 2025.

Net Interest Income

Net interest income is the difference between interest earned on loans, investments, and other earning assets and interest expense on deposits and other interest-bearing liabilities. Net interest income is a significant source of the Company’s revenues. The following table summarizes the changes in tax-equivalent net interest income and related factors:


(In thousands)	Third Quarter of						Nine Months Ended September 30,
	2025			2024				2025			2024
Average earning assets	$	2,189,384		$	2,001,741			$	2,128,428		$	2,007,780
Average interest-bearing liabilities	610,414			630,215				618,125			633,384
Net interest income*	21,336			17,856				60,467			50,744
Net interest margin*	3.87		%	3.55		%		3.80		%	3.38		%
Yield on earning assets*	4.62		%	4.57		%		4.58		%	4.42		%
Cost of interest-bearing liabilities	2.70		%	3.25		%		2.69		%	3.30		%

*Presented on a tax-equivalent basis assuming a tax rate of 21% for both 2025 and 2024.

Third quarter of 2025 compared to third quarter of 2024:

The increase in net interest income is primarily attributable to the net interest margin improving to 3.87% as compared to 3.55% in the same period last year, in addition to an increase in average earning assets of $187.6 million, or 9.4%. The yield on interest-earning assets increased 5 basis points from 4.57% to 4.62% while the cost of interest-bearing liabilities decreased 55 basis points from 3.25% to 2.70%.

Average loans increased $22.6 million, or 2.1%, to $1.10 billion. The average yield on loans increased 26 basis points to 5.66%, primarily due to loan growth at current market interest rates and continued maturing and re-pricing of existing fixed rate loans to current market interest rates.

Average investment securities increased $121.3 million, or 20.5%, to $711.7 million. The increase was driven by the utilization of available liquidity arising from an increase in average accounts and drafts payable to purchase investment securities. The average yield on taxable investment securities increased 44 basis points to 3.32% and the average yield on tax-exempt investment securities increased 59 basis points to 3.40%.

Average short-term investments, consisting of interest-bearing deposits in other financial institutions and federal funds sold, increased $43.8 million, or 12.9%, to $382.3 million. The increase is primarily a result of the increase in average funding sources, partially offset by the increase in average loans and average investment securities. The average yield on short-term investments decreased 93 basis points to 4.01%, primarily due to the decrease in the Federal Funds rate that

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occurred in the last four months of 2024 and then again in September 2025. The majority of these short-term investments are held at the Federal Reserve Bank.

The average balance of interest-bearing deposits decreased $19.8 million, or 3.1%, to $610.4 million. Average non-interest-bearing demand deposits increased $1.9 million, or 0.5%, to $406.2 million. The Company has experienced deposit attrition due to a decrease in the overall level of some larger commercial deposits due to client funding needs for acquisitions and other purposes. The average rate paid on interest-bearing deposits decreased 55 basis points to 2.70% due to the reduction in short-term interest rates in the last four months of 2024 and then again in September 2025.

Average accounts and drafts payable increased $196.5 million, or 19.4%, to $1.21 billion. The increase in average accounts and drafts payable was primarily driven by the increase in facility dollar volumes of 13.9% as well as the increase in transportation dollar volumes of 2.0%.

Nine months ended September 30, 2025 compared to nine months ended September 30, 2024:

The increase in net interest income is primarily attributable to the net interest margin improving to 3.80% as compared to 3.38% in the same period last year, in addition to an increase in average earning assets of $120.6 million, or 6.0%. The yield on interest-earning assets increased 16 basis points from 4.42% to 4.58% while the cost of interest-bearing liabilities decreased 61 basis points from 3.30% to 2.69%.

Average loans increased $67.3 million, or 6.5%, to $1.11 billion. The average yield on loans increased 40 basis points to 5.64%, primarily due to loan growth at current market interest rates and continued maturing and re-pricing of existing fixed rate loans to current market interest rates.

Average investment securities increased $17.1 million, or 2.6%, to $663.2 million. The increase was driven by the utilization of available liquidity arising from an increase in average accounts and drafts payable to purchase investment securities. The average yield on taxable investment securities increased 29 basis points to 3.11% and the average yield on tax-exempt investment securities increased 25 basis points to 3.00%.

Average short-term investments, consisting of interest-bearing deposits in other financial institutions and federal funds sold, increased $36.3 million, or 11.4%, to $355.0 million. The increase is primarily a result of the increase in average funding sources, partially offset by the increase in average loans and average investment securities. The average yield on short-term investments decreased 94 basis points to 4.05%, primarily due to the decrease in the Federal Funds rate that occurred in the last four months of 2024 and again in September 2025. The majority of these short-term investments are held at the Federal Reserve Bank.

The average balance of interest-bearing deposits decreased $15.3 million, or 2.4%, to $618.1 million. Average non-interest-bearing demand deposits decreased $18.2 million, or 4.3%, to $401.5 million. The Company has experienced deposit attrition due to a decrease in the overall level of some larger commercial deposits due to client funding needs for acquisitions and other purposes. The average rate paid on interest-bearing deposits decreased 61 basis points to 2.69% due to the reduction in short-term interest rates in the last four months of 2024 and again in September 2025.

Average accounts and drafts payable increased $140.7 million, or 14.1%, to $1.14 billion. The increase in average accounts and drafts payable was primarily driven by the increase in facility dollar volumes of 15.3%.

Distribution of Assets, Liabilities and Shareholders' Equity; Interest Rate and Interest Differential

The following tables show the condensed average balance sheets for each of the periods reported, the tax-equivalent interest income and expense for each category of interest-earning assets and interest-bearing liabilities, and the average yield on such categories of interest-earning assets and the average rates paid on such categories of interest-bearing liabilities for each of the periods reported.

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(In thousands)	Third Quarter of 2025						Third Quarter of 2024
	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Assets1
Interest-earning assets
Loans2:	$	1,095,412	$	15,632	5.66	%	$	1,072,824	$	14,567	5.40	%
Investment securities3:
Taxable	536,394		4,491		3.32	%	430,242		3,114		2.88	%
Tax-exempt4	175,328		1,504		3.40	%	160,211		1,131		2.81	%

Short-term investments	382,250		3,860		4.01	%	338,464		4,200		4.94	%
Total interest-earning assets	2,189,384		25,487		4.62	%	2,001,741		23,012		4.57	%
Non-interest-earning assets
Cash and due from banks	24,106						22,468
Premises and equipment, net	30,648						31,766
Bank-owned life insurance	51,415						49,899
Goodwill and other intangibles	20,343						15,079
Payments in advance of funding	175,705						202,976
Unrealized loss on investment securities	(44,451)						(55,029)
Other assets	67,057						71,768
Allowance for credit losses	(14,293)						(13,632)
Assets of discontinued operations	—						13,834
Total assets	$	2,499,914					$	2,340,870
Liabilities and Shareholders’ Equity1
Interest-bearing liabilities
Interest-bearing demand deposits	$	514,138	$	3,345	2.58	%	$	543,845	$	4,314	3.16	%
Savings deposits	7,104		24		1.34	%	6,921		29		1.67	%
Time deposits >= $100	27,868		236		3.36	%	27,884		270		3.85	%
Other time deposits	61,293		546		3.53	%	51,554		543		4.19	%
Total interest-bearing deposits	610,403		4,151		2.70	%	630,204		5,156		3.25	%
Short-term borrowings	11		—		—	%	11		—		—	%
Total interest-bearing liabilities	610,414		4,151		2.70	%	630,215		5,156		3.25	%
Non-interest bearing liabilities
Demand deposits	406,241						404,364
Accounts and drafts payable	1,209,416						1,012,922
Other liabilities	37,635						38,598
Liabilities of discontinued operations	—						22,986
Total liabilities	2,263,706						2,109,085
Shareholders’ equity	236,208						231,785
Total liabilities and shareholders’ equity	$	2,499,914					$	2,340,870
Net interest income			$	21,336					$	17,856
Net interest margin					3.87	%					3.55	%
Interest spread					1.92	%					1.32	%

1.Balances shown are daily averages.

2.Interest income on loans includes net loan fees of $114,000 and $154,000 for the third quarter of 2025 and 2024, respectively.

3.For purposes of these computations, yields on investment securities are computed as interest income divided by the average amortized cost of the investments.

4.Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for both 2025 and 2024. The tax-equivalent adjustment was approximately $316,000 and $237,000 for the third quarter of 2025 and 2024, respectively.

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(In thousands)	Nine Months Ended September 30, 2025						Nine Months Ended September 30, 2024
	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Assets1
Interest-earning assets
Loans2:	$	1,110,227	$	46,819	5.64	%	$	1,042,953	$	40,935	5.24	%
Investment securities3:
Taxable	515,059		11,996		3.11	%	479,337		10,118		2.82	%
Tax-exempt4	148,161		3,328		3.00	%	166,778		3,429		2.75	%

Short-term investments	354,981		10,755		4.05	%	318,712		11,908		4.99	%
Total interest-earning assets	2,128,428		72,898		4.58	%	2,007,780		66,390		4.42	%
Non-interest-earning assets
Cash and due from banks	21,497						22,630
Premises and equipment, net	31,143						30,858
Bank-owned life insurance	50,949						49,603
Goodwill and other intangibles	20,676						15,251
Payments in advance of funding	175,170						203,498
Unrealized loss on investment securities	(50,822)						(59,528)
Other assets	64,470						72,413
Allowance for credit losses	(13,998)						(13,343)
Assets of discontinued operations	9,765						14,327
Total assets	$	2,437,278					$	2,343,489
Liabilities and Shareholders’ Equity1
Interest-bearing liabilities:
Interest-bearing demand deposits	$	525,139	$	10,112	2.57	%	$	548,891	$	13,244	3.22	%
Savings deposits	7,249		72		1.33	%	7,134		92		1.72	%
Time deposits >= $100	26,359		657		3.33	%	27,492		773		3.76	%
Other time deposits	59,367		1,590		3.58	%	49,856		1,536		4.12	%
Total interest-bearing deposits	618,114		12,431		2.69	%	633,373		15,645		3.30	%
Short-term borrowings	11		—		—	%	11		1		12.14	%
Total interest-bearing liabilities	618,125		12,431		2.69	%	633,384		15,646		3.30	%
Non-interest bearing liabilities:
Demand deposits	401,497						419,724
Accounts and drafts payable	1,141,535						1,000,874
Other liabilities	42,287						37,627
Liabilities of discontinued operations	1,727						23,960
Total liabilities	2,205,171						2,115,569
Shareholders’ equity	232,107						227,920
Total liabilities and shareholders’ equity	$	2,437,278					$	2,343,489
Net interest income			$	60,467					$	50,744
Net interest margin					3.80	%					3.38	%
Interest spread					1.12	%					1.12	%

1.Balances shown are daily averages.

2.Interest income on loans includes net loan fees of $599,000 and $383,000 for the nine months ended September 30, 2025 and 2024, respectively.

3.For purposes of these computations, yields on investment securities are computed as interest income divided by the average amortized cost of the investments.

4.Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for both the nine months ended September 30, 2025 and 2024. The tax-equivalent adjustment was approximately $699,000 and $720,000 for the nine months ended September 30, 2025 and 2024, respectively.

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Table of Contents

Analysis of Net Interest Income Changes

The following tables present the changes in interest income and expense between periods due to changes in volume and interest rates. That portion of the change in interest attributable to the combined rate/volume variance has been allocated to rate and volume changes in proportion to the absolute dollar amounts of the change in each.


(In thousands)	Third Quarter of 2025 Compared to Third Quarter of 2024
	Volume		Rate		Total
Increase (decrease) in interest income:
Loans1:	$	311	$	754	$	1,065
Investment securities:
Taxable	842		535		1,377
Tax-exempt2	114		259		373

Short-term investments	502		(842)		(340)
Total interest income	1,769		706		2,475
Increase (decrease) in interest expense:
Interest-bearing demand deposits	(226)		(743)		(969)
Savings deposits	1		(6)		(5)
Time deposits >=$100	—		(34)		(34)
Other time deposits	94		(91)		3
Short-term borrowings	—		—		—
Total interest expense	(131)		(874)		(1,005)
Net interest income	$	1,900	$	1,580	$	3,480

1.Interest income includes net loan fees.

2.Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for the three months ended September 30, 2025 and 2024.


(In thousands)	Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
	Volume		Rate		Total
Increase (decrease) in interest income:
Loans1:	$	2,732	$	3,151	$	5,883
Investment securities:
Taxable	787		1,092		1,879
Tax-exempt2	(402)		301		(101)

Short-term investments	1,259		(2,412)		(1,153)
Total interest income	4,376		2,132		6,508
Interest expense on:
Interest-bearing demand deposits	(553)		(2,579)		(3,132)
Savings deposits	1		(21)		(20)
Time deposits >=$100	(31)		(85)		(116)
Other time deposits	270		(216)		54
Short-term borrowings	—		(1)		(1)
Total interest expense	(313)		(2,902)		(3,215)
Net interest income	$	4,689	$	5,034	$	9,723

1.Interest income includes net loan fees.

2.Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for the nine months ended September 30, 2025 and 2024.

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Table of Contents

Provision and Allowance for Credit Losses and Allowance for Unfunded Commitments

The Company recorded a release of credit losses and off-balance sheet credit exposures of $193,000 and $140,000 for the third quarter of 2025 and 2024, respectively. The Company recorded a provision for credit losses and off-balance sheet credit exposures of $737,000 and $355,000 for the nine months ended September 30, 2025 and 2024, respectively. The amount of the provision for (release of) credit losses is derived from the Company’s quarterly Current Expected Credit Loss (“CECL”) model. The amount of the provision for (release of) credit losses will fluctuate as determined by these quarterly analyses. The release of credit losses in the third quarter of 2025 was driven by the decrease in total loans of $28.7 million, or 2.6%, partially offset by the increase in nonaccrual loans of $3.7 million as compared to June 30, 2025.

The Company experienced no loan charge-offs in the third quarter of 2025 and 2024. The ACL was $14.1 million at September 30, 2025 and $13.4 million at December 31, 2024. The ACL represented 1.29% of outstanding loans at September 30, 2025 and 1.24% of outstanding loans at December 31, 2024. The allowance for unfunded commitments was $339,000 at September 30, 2025 and $273,000 at December 31, 2024. There were $7.1 million of nonperforming loans outstanding at September 30, 2025 and $0 at December 31, 2024. The Company has a specific allowance for credit losses of $141,000 allocated to its nonaccrual loans at September 30, 2025.

The ACL has been established and is maintained to estimate the lifetime expected credit losses in the loan portfolio. An ongoing assessment is performed to determine if the balance is adequate. Charges or credits are made to expense based on changes in the economic forecast, qualitative risk factors, loan volume, and individual loans. For loans that are individually evaluated, the Company uses two impairment measurement methods: 1) the present value of expected future cash flows and 2) collateral value.

The Company also utilizes ratio analyses to evaluate the overall reasonableness of the ACL compared to its peers and required levels of regulatory capital. Federal and state regulatory agencies review the Company’s methodology for maintaining the ACL. These agencies may require the Company to adjust the ACL based on their judgments and interpretations about information available to them at the time of their examinations.

Summary of Credit Loss Experience

The following table presents information on the Company's provision for (release of) credit losses and analysis of the ACL:


	Third Quarter of					Nine Months Ended September 30,
(In thousands)	2025			2024		2025		2024
Allowance for credit losses at beginning of period	$	14,296		$	13,634	$	13,395	$	13,089
(Release of) provision for credit losses	(230)			(187)		671		358
Net recoveries	—			—		—		—
Allowance for credit losses at end of period	$	14,066		$	13,447	$	14,066	$	13,447

Allowance for unfunded commitments at beginning of period	$	302		$	82	$	273	$	132
Provision for (release of) credit losses	37			47		66		(3)
Allowance for unfunded commitments at end of period	$	339		$	129	$	339	$	129


Loans outstanding:
Average	$	1,095,412		$	1,072,824	$	1,110,227	$	1,042,953
September 30	$	1,088,347		$	1,078,387	$	1,088,347	$	1,078,387
Ratio of allowance for credit losses to loans outstanding at September 30	1.29		%

CASS INFORMATION SYSTEMS INC 10-Q