Loading...
•
Jun 30, 2024
Cass Q2 2024 Earnings Report
Cass Information Systems reported second quarter earnings, noting both successes in client onboarding and challenges from a cyber event.
Key Takeaways
Cass Information Systems reported a net income of $4.5 million, or $0.32 per diluted share, for the second quarter of 2024. The company experienced growth in facility expense transaction volumes and processing fees, but faced challenges including the loss of non-interest bearing funding due to a cyber event and one-time expenses.
Net income was $4.5 million, or $0.32 per diluted common share.
Facility expense transaction volumes increased by 25.1%.
Processing fees grew by 8.9%.
Transportation dollar volumes decreased by 6.5%.
Cass
Cass
Cass Revenue by Segment
Revenue by Segment
Processing fees Revenue
CapyFin.comFinancial fees Revenue
CapyFin.comNet interest income Revenue
CapyFin.com Forward Guidance
The company's focus for the second half of the year will be on signed client implementations, converting pipeline opportunities to signed deals and reducing run rate expense levels using the new technology that has been completed in the last year. The company expects to record one-time termination expenses of approximately $5.0 million through operating expense related to the plan termination. The successful termination of the plan is expected to reduce run rate operating expense by approximately $1.0 million on an annual basis.
Positive Outlook
- Focus on signed client implementations.
- Converting pipeline opportunities to signed deals.
- Reducing run rate expense levels using new technology.
- Termination of defined-benefit pension plan will reduce run rate operating expense by approximately $1.0 million annually.
- Taking advantage of recent technology investments to begin decreasing the run rate level of salaries and commissions expense.
Challenges Ahead
- Loss of over $100 million of non-interest bearing funding due to a cyber event at a client.
- Incurring an aggregate of $3.4 million of one-time expenses.
- Expected to record one-time termination expenses of approximately $5.0 million through operating expense related to the plan termination.
- Late fees were mostly driven by a check processing delay with our third-party vendor, the same CassPay client which incurred the cyber attack.
- The Company does not expect these payment volumes and related balances from this client to return.
Revenue & Expenses
Visualization of income flow from segment revenue to net income