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Mar 31, 2023
Cass Q1 2023 Earnings Report
Cass reported first quarter 2023 results with a decrease in net income but an increase in total revenues.
Key Takeaways
Cass Information Systems reported a decrease in earnings per share to $0.51, a 15.0% decrease compared to Q1 2022. Net income decreased by 13.8% to $7.1 million. However, total revenues increased by 17.2% to $49.345 million, driven by higher net interest income, financial fees, and payment processing fees.
Net income decreased by 13.8% to $7.1 million, or $0.51 per diluted common share.
Total revenues increased by 17.2% to $49.345 million.
Net interest margin increased to 3.23% from 2.36%.
Facility expense transaction and dollar volumes increased by 5.3% and 14.4%, respectively.
Cass
Cass
Cass Revenue by Segment
Revenue by Segment
Processing fees Revenue
CapyFin.comFinancial fees Revenue
CapyFin.com Forward Guidance
Cass is positioning itself for long-term success through technology investments and client acquisition. They anticipate improved operating leverage and revenue growth due to these initiatives.
Positive Outlook
- Successful rollout of technology initiatives will lead to improved revenue growth.
- Faster client onboarding and competitive advantages due to new technology.
- Improved operating leverage expected from reduced invoice processing costs.
- High demand for Cass service offerings.
- Improved technology will enhance growth and profitability prospects.
Challenges Ahead
- Expense levels are elevated due to significant and accelerated technology investment.
- Approximately $1.5 million in nonrecurring transition and conversion related expenses.
- Total expenses increased $8.5 million, or 26.8%, significantly greater than required to support increased revenue.
- Deposit attrition as larger depository clients moved their funds to higher interest rate alternatives outside of Cass Commercial Bank.
- Decrease in transportation dollar volumes of 5.4%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income