Cass Freight-Volume Growth Accelerates as Net Income Holds

The Tip Desk · November 8, 2026 · 4 min read

Net income was $10.6 million, or $0.81 a share, matching the second-quarter record, while transportation dollar volumes rose 14.5%.

Cass Information Systems (CASS), a provider of supply-chain payment and information services, reported net income of $10.6 million, or $0.81 a share, for the third quarter of 2026, matching the record levels it posted in the second quarter. Diluted earnings per share rose 19.1% from a year earlier.

The defining operating turn was in freight. Transportation dollar volumes rose 14.5% from the third quarter of 2025, accelerating from 7.4% growth in the second quarter and 4.5% in the first quarter. The company said the increase reflected rising contract freight rates and fuel surcharges. Average dollars per traditional freight invoice were $1,115, up 17.2%. In September 2026 that average was $1,152, above the full-quarter level, and the company said the figure suggests the average will continue rising into the fourth quarter.

Those higher freight dollars fed the bank’s interest and fee lines. Net interest income increased $1.9 million, or 8.9%, to $22.9 million, after a $2.1 million, or 10.6%, increase in the second quarter. Net interest margin expanded to 4.02% from 3.87% a year earlier, continuing the expansion from 4.00% in the second quarter and 3.95% in the first quarter. Average interest-earning assets rose $105.4 million, or 4.8%. The company attributed the margin improvement to higher yields on loans and investment securities and a lower cost of deposits, partly offset by a lower yield on short-term investments.

Financial fees increased $1.2 million, or 11.8%, to $11.6 million, after a $790,000, or 7.8%, increase in the second quarter. The company said the rise was primarily due to average payments in advance of funding up 15.8% and higher interchange fees within CassPay. Processing fees decreased $763,000, or 4.6%, to $15.9 million, on lower transportation and facility invoice volumes. Total revenues increased $2.6 million, or 5.3%, to $52.7 million.

Average deposits increased $79.2 million, or 7.8%, from a year earlier, with average CassPay deposits up $74.5 million, or 29.2%. Average accounts and drafts payable, which are non-interest bearing, rose $37.0 million, or 3.1%. Facility expense invoice volumes of 4.0 million decreased 1.2%, and facility dollar volumes of $6.6 billion increased 5.5%.

Loans decreased $38.3 million, or 3.5%, versus June 30, 2026. The company said several faith-based pay-offs occurred, some from intentional exits of potential problem credits and others from refinancing elsewhere, and it recorded a $508,000 charge-off of a nonperforming commercial real estate loan, its first loan charge-off in over a decade. Non-performing loans fell to $1.1 million from $1.6 million at June 30. The company recorded a $211,000 release of credit losses. It expects loans at December 31, 2026 to be flat with September 30, and its 2027 and longer-term forecast for loan growth is 6-8%.

Investment securities increased $65.7 million versus June 30. In September the company purchased $82.0 million of U.S. Treasury and government agency securities at a weighted average rate of 4.00% and $28.1 million of mortgage-backed securities at 5.42%. Unrealized loss on investment securities increased $34.4 million to $75.3 million. Total shareholders’ equity decreased $18.6 million versus June 30, as accumulated other comprehensive loss rose $26.2 million on higher long-term bond yields, partly offset by net income. The tangible common equity ratio was 8.16%.

The board raised the quarterly dividend by $0.02, or 6.3%, to $0.34 a share for the fourth quarter of 2026. The company did not repurchase stock in the quarter, versus 65,557 shares bought in the second quarter, citing an $80.8 million increase in average assets versus the second quarter and the need to support that growth with earnings.

President and Chief Executive Officer Martin Resch said recent CassPay and Facilities client wins, combined with higher transportation and facility dollar volumes, present an outlook for continued growth in assets, net interest income and financial fees. The company said it expects higher operating expense growth into the fourth quarter of 2026 and 2027 versus the first three quarters of 2026, citing two large new CassPay clients, AI-related depreciation and licensing, higher profit sharing and share-based compensation, and rising health insurance costs.