Cass Information Systems posts 16% jump in third-quarter net income

Cass Information Systems, Inc. reported third-quarter 2026 net income of $10.6 million, a 16.1% increase from the same period in 2025. Diluted earnings per share rose 19.1% to $0.81, driven by continued expansion in net interest margin and higher transportation dollar volumes.

The St. Louis-based company, which trades on the Nasdaq under the ticker CASS, saw its net interest margin improve to 4.02% from 3.87% a year earlier. This margin expansion contributed to an $1.9 million, or 8.9%, increase in net interest income. Total revenues grew by $2.6 million, or 5.3%, while transportation dollar volumes surged 14.5%. Financial fees also climbed by $1.2 million, or 11.8%, primarily due to higher average payments in advance of funding and rising interchange fees within its CassPay platform.

Martin Resch, President and Chief Executive Officer of Cass Information Systems, attributed the results to continued profitability growth across all business lines. He noted that recent client wins for CassPay and facility services, combined with rising transportation and facility dollar volumes, provide a favorable outlook for asset growth and net interest income in coming quarters. Resch stated that these factors, along with technology enhancements designed to improve client experience, should support enhanced profitability for the next several quarters.

The company’s average deposits increased by $79.2 million, or 7.8%, during the quarter. Return on average equity reached 17.46%, compared to 15.29% in the third quarter of 2025. Cass Information Systems also increased its quarterly dividend by $0.02 to $0.34 per share for the fourth quarter of 2026.

In its investment securities portfolio, the company purchased $82.0 million of U.S. Treasury and government agency securities in September 2026 at a weighted average rate of 4.00%. It also acquired $28.1 million of mortgage-backed securities at a weighted average rate of 5.42%. The unrealized loss on investment securities widened by $34.4 million to $75.3 million compared to June 30, 2026, as the company evaluated liquidity deployment opportunities in the current interest rate environment.

Loans decreased by $38.3 million, or 3.5%, from June 30, 2026. This decrease drove a release of credit losses of $211,000 during the quarter, up from $193,000 in the prior-year period. The provision included a $508,000 charge-off of a nonperforming commercial real estate loan, which the company identified as its first loan charge-off in over a decade.