Cass Information Systems Q1 2024 – Net Income Up 0.5%

Cass Information Systems, Inc. has reported its first quarter 2024 results, with net income of $7.2 million, or $0.52 per diluted common share. This represents an increase of 0.5% from the same period in 2023 and a decrease of $1.3 million, or 15.0%, compared to the fourth quarter of 2023.

The company achieved a return on average equity and assets of 12.66% and 1.20%, respectively. Despite a 23.0% increase in facility expense transaction volumes, operating expenses grew by only 0.7%, showcasing improved scalability.

Transportation dollar volumes decreased by 12.9% compared to the first quarter of 2023, while facility expense dollar volumes increased by 0.3% over the same period. Processing fees saw a notable growth of 8.9%, driven by a 23.0% increase in facility transaction volumes.

Financial fees, earned on a transactional level basis, decreased by 4.3% due to a decline in transportation dollar volumes. Net interest income also decreased by 2.5%, primarily attributable to a decline in average interest-earning assets.

The company recorded a provision of credit losses of $95,000 during the first quarter of 2024, compared to a release of credit losses of $340,000 in the first quarter of 2023. Personnel expenses increased by 1.9%, with salaries and commissions rising by 6.1%.

Ending loans increased by $22.7 million, representing a 2.2% growth when compared to December 31, 2023. Average deposits decreased by 5.7% compared to the first quarter of 2023 but increased by 2.1% compared to the fourth quarter of 2023.

Total shareholders' equity decreased by $322,000 since December 31, 2023, primarily due to an increase in accumulated other comprehensive loss of $1.7 million, dividends of $4.0 million, and the repurchase of company stock of $1.0 million, partially offset by net income of $7.2 million.

Cass Information Systems, Inc. is a leading provider of integrated information and payment management solutions, disbursing over $90 billion annually on behalf of clients, and with total assets of $2.3 billion.

The company's president and chief executive officer noted the successful onboarding of new facility clients and technology platform upgrades, which contributed to the significant increase in facility transaction volumes and the limited growth in operating expenses.

While the company's current revenue and profitability levels are not at desired levels due to external factors, robust new business pipelines are expected to position the company for client and transactional growth in the future. The market has reacted to these announcements by moving the company's shares -2.1% to a price of $43.79. For more information, read the company's full 8-K submission here.

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