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Sep 30, 2022
Cass Q3 2022 Earnings Report
Reported a 33.3% increase in earnings per share and 22.1% revenue growth.
Key Takeaways
Cass Information Systems reported record quarterly net income and diluted earnings per share, with a 33.3% increase in diluted earnings per share to $0.64 and a 29.3% increase in net income to $8.8 million compared to the same period in 2021. The company experienced growth in transportation dollar volumes, financial fees, and net interest income.
Record quarterly net income and diluted earnings per share achieved.
Diluted earnings per share increased by 33.3% to $0.64.
Net income increased by 29.3% to $8.8 million.
Transportation dollar volumes increased by 21.1% to $11.5 billion.
Cass
Cass
Cass Revenue by Segment
Revenue by Segment
Processing fees Revenue
CapyFin.comFinancial fees Revenue
CapyFin.com Forward Guidance
The company anticipates that elevated spending on technology initiatives will result in improved operating leverage beginning in late 2023. Further improvement is expected in future quarters if short-term interest rates continue to increase.
Positive Outlook
- Technology initiatives should allow more efficient data consumption through automation.
- Technology initiatives should allow faster onboarding of new customers.
- Improved operating leverage is expected beginning in late 2023 due to technology investments.
- Net interest margin is expected to further improve if short-term interest rates continue to increase.
- Company has been successful in achieving organic growth in its franchise, faith-based and other commercial and industrial loans.
Challenges Ahead
- Elevated spending on technology initiatives is currently impacting certain expense categories.
- Total shareholders’ equity has declined due to the rise in market interest rates
- Decline in average deposits as compared to the second quarter of 2022, partially due to tightening monetary policy.
- The provision for credit losses was primarily driven by the increase in total loans
- Consolidated operating expenses rose due to personnel expense and investment in technology.
Revenue & Expenses
Visualization of income flow from segment revenue to net income