NASDAQ$CASS

Cass Information Systems Inc · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Reported a 33.3% increase in earnings per share and 22.1% revenue growth.

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.

Headline financials

Total Revenue

$47.2M

Previous: $38.7M+22.1%
EPS (adj)

$0.64

Previous: $0.48+33.3%
Transportation Volume

$11.5B

Previous: $9.5B+21.1%
Facility Expense Volume

$5.5B

No prior period
Net Interest Margin

2.9%

Previous: 2.3%+25.0%
ROAE

16.8%

No prior period
Capital Expenditures

-$4.27M

Previous: -$2.7M-58.3%
Free Cash Flow

$4.53M

Previous: $4.11M+10.2%
Net Income

$8.8M

Previous: $6.81M+29.3%
Operating Income

$44.7M

Previous: $36.9M+21.2%
Gross Profit

$46.7M

Previous: $38.3M+21.7%
Cash & Equivalents

$347M

Previous: $500M-30.6%
Total Assets

$2.61B

Previous: $2.29B+13.9%
Stock-Based Comp

$1.3M

Previous: $1.07M+22.0%

Revenue & EPS history

Cass · Revenue · Quarterly

$47.2M

Q3 2022+22.1%vs Q3 2021
Beat estimate in 4 of 14 quarters(29%)
ActualEstimate

Revenue by segment

Cass · $30.2M total across 2 segments · Q3 2022

  • Processing Fees
    $19M
  • Financial Fees
    $11.3M

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.

Tailwinds

  • 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.

Headwinds

  • 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.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

-0.3%

Avg return

Earnings day

+0.4%

Avg return

5 days after

+2.8%

Avg return

30 days after

55%

36 / 66 earnings

Positive

+5.9%

Q3 2022

Best reaction

-13.8%

Q2 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-0.6%-2.0%-6.0%
Q4 2025+1.6%+3.6%+4.2%
Q3 2025+0.4%-0.6%+5.5%
Q2 2025-1.4%-0.8%-0.0%
Q1 2025-1.2%-0.8%+3.5%
Q4 2024+2.7%+2.6%+6.9%
Q3 2024-6.2%-3.9%+3.6%
Q2 2024-13.8%-11.3%-9.1%
Q1 2024-6.9%-3.9%+2.1%
Q4 2023+2.4%+2.9%+10.6%
Q3 2023-1.1%+1.7%+12.0%
Q2 2023+0.2%-2.2%+0.2%
Q1 2023-12.3%-13.1%-10.2%
Q4 2022+1.7%+2.2%+7.0%
Q3 2022+5.9%+7.9%+16.5%
Q2 2022+5.1%+9.0%+14.0%
Q1 2022+3.2%+4.3%-11.0%
Q4 2021+3.6%+6.5%+5.5%
Q3 2021+0.4%+0.1%+7.1%
Q2 2021-0.4%+1.2%+8.9%
Q1 2021+0.2%-1.7%-0.9%
Q4 2020+0.7%+4.1%+6.8%
Q3 2020+3.4%-3.7%+1.8%
Q2 2020-4.3%-6.5%-2.4%
Q1 2020+2.4%+13.4%+8.1%
Q4 2019-2.5%-2.4%-15.2%
Q3 2019+2.9%+8.9%+6.4%
Q2 2019+2.9%+3.7%-1.4%
Q1 2019+3.4%+1.0%-6.3%
Q4 2018-2.9%+1.0%+2.6%
Q3 2018+4.8%+10.8%+14.3%
Q2 2018-2.8%-2.9%+6.5%
Q1 2018-1.5%-1.0%+2.2%
Q4 2017-2.5%-4.5%+4.3%
Q3 2017+1.1%-0.2%+1.5%
Q2 2017-1.2%-3.8%-9.1%
Q1 2017-1.3%-2.2%-8.0%
Q4 2016+0.5%-3.2%-0.3%
Q3 2016+0.7%+2.7%+29.2%
Q2 2016-0.0%-2.3%+1.5%
Q1 2016+0.2%
Q4 2015+4.0%
Q3 2015+2.7%
Q2 2015-8.0%
Q1 2015+4.4%
Q4 2014-8.8%
Q3 2014+5.1%
Q2 2014-0.8%
Q1 2014+2.9%
Q4 2013-8.6%
Q3 2013+1.2%
Q2 2013+3.3%
Q1 2013-0.4%
Q4 2012-4.0%
Q3 2012-2.3%
Q4 2011+4.9%
Q2 2012+4.9%
Q1 2011-1.7%
Q1 2012+0.9%
Q4 2009+2.2%
Q3 2010+1.0%
Q3 2011+1.0%
Q2 2011-1.7%
Q2 2010-1.7%
Q4 2010-1.7%
Q1 2010-4.4%

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