Executive Summary

Q2 2025 diluted EPS was $0.66 and net income $8.9M; continuing operations EPS was $0.38 as discontinued operations (TEM sale) contributed $0.28 per share . Net interest margin rose to 3.78% (+46 bps YoY), driving net interest income up 22.3% to $19.5M .
Versus S&P Global consensus, continuing EPS missed (consensus $0.72 vs actual $0.38) and revenue ex investment losses missed (consensus $51.0M vs actual $48.6M). Bolded: significant miss on EPS and revenue ex losses (consensus vs SPGI definitions)*.
Cass closed the TEM business sale (pretax gain $3.6M) and repositioned its securities portfolio (sold $34.0M of corporates yielding 2.29% at a pretax loss of $3.6M) to improve future NIM .
Board declared a $0.31 dividend (payable Sep 15) and authorized repurchases up to 500,000 shares; 140,269 shares were repurchased in Q2 at a $41.79 WAP, adding capital return support .

What Went Well and What Went Wrong

What Went Well

Net interest margin expanded to 3.78% from 3.32% YoY, with higher loan and securities yields and lower deposit costs; net interest income rose by $3.5M (+22.3% YoY) .
Facility expense dollar volumes increased 16.1% YoY on higher energy prices and onboarding high-dollar clients; processing fees rose 1.6% YoY .
CEO tone constructive: “The growth in interest-earning assets, combined with the continued improvement in net interest margin, is driving significant net interest income gains… ongoing efficiency initiatives led to profitability growth” .

What Went Wrong

Financial fees declined 2.9% YoY on a 17.4% decrease in average payments in advance of funding (freight carrier consolidation); management expects working capital solutions to improve this over time .
Pretax loss of $3.6M on sale of low-yield corporate bonds to reposition the portfolio; equipment expense up $626K on software depreciation; personnel expense up $1.5M (+5.7%) on comp and profit sharing .
Nonaccrual loans increased by $3.4M; average deposits decreased $36.4M YoY due to attrition at larger commercial clients .

Financial Results

Summary metrics

Metric	Q4 2024	Q1 2025	Q2 2025
Total revenues ($USD Millions)	$50.371	$46.407	$44.398
Total revenue, excl. investment losses ($USD Millions)	$45.6	$46.4	$48.0
Net interest income ($USD Millions)	$17.764	$19.274	$19.475
Diluted EPS (total) ($)	$0.33	$0.66	$0.66
Diluted EPS (continuing operations) ($)	—	$0.63	$0.38
Net interest margin (%)	3.55%	3.75%	3.78%

Notes: Q2 2025 total EPS includes discontinued operations $0.28 per share (TEM sale) . “Total revenue, excl. investment losses” is management’s presentation metric, not a GAAP line .

Fee and interest revenue breakdown

Metric ($USD Millions)	Q4 2024	Q1 2025	Q2 2025
Processing fees	$20.262	$16.469	$17.082
Financial fees	$10.714	$9.961	$10.161
Net interest income	$17.764	$19.274	$19.475

KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Transportation invoice volume (Millions)	8.879	8.355	8.837
Transportation dollar volume ($USD Billions)	$9.081	$8.643	$9.371
Facility expense transaction volume (Millions)	4.197	4.225	4.141
Facility expense dollar volume ($USD Billions)	$4.751	$5.823	$5.513
Average payments in advance of funding ($USD Millions)	$213.2	$173.6	$176.2
Average accounts & drafts payable ($USD Millions)	975.5	1,072.0	1,122.7

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net interest margin trajectory	FY 2025+	None disclosed	NIM should benefit as assets reprice to current rates; repositioning securities supports future NIM	Raised/Positive commentary
Financial fees (payments in advance of funding)	H2 2025+	None disclosed	New working capital solution programs sold to clients, implementation underway to lift average payments in advance of funding	Raised/Positive commentary
TEM business impact	FY 2025	None disclosed	Ongoing consolidated earnings expected to be neutral as TEM net income offsets increased interest income on redeployed $18.0M and portfolio actions	Maintained/Neutral
Dividend	Q3 2025	$0.31 last quarter	$0.31 declared, payable Sep 15, 2025; record Sep 5, 2025	Maintained
Share repurchases	Ongoing	Prior activity ongoing	New authorization: up to 500,000 shares; repurchased 140,269 shares in Q2 at $41.79 WAP	Raised (capacity)

No formal quantitative ranges were provided for revenue, margins, OpEx, OI&E, or tax rate.

Earnings Call Themes & Trends

Transcript for Q2 2025 was not available via the tools; themes are inferred from the press release and investor presentation.

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Net interest margin	NIM improved to 3.55% on asset repricing ; Q1 at 3.75% with higher loan/securities yields and lower deposit costs	3.78%; continued benefit from higher rate environment and asset repricing; securities portfolio repositioned	Improving
Working capital solutions / financial fees	Amplify solution expected to begin positively impacting fees in H2’25 ; Q1 noted decline in payments in advance of funding, plan to address	Financial fees -2.9% YoY; new solutions sold and being implemented to raise payments in advance of funding	Early execution; expected improvement
TEM business	Announced sale; applied discontinued ops	Sale closed; $3.6M gain; earnings neutral expectation going forward	Portfolio focus; neutral earnings
Technology/efficiency	AI-enabled platforms; lower headcount with rising volumes	FTEs down 5.9% YoY; equipment expense up on software depreciation	Ongoing efficiency; cost investments
Freight rates / transportation	Freight indices approaching positive territory	Upward momentum in freight rates supporting fees; transport $ volume +3.2% YoY	Stabilizing/improving
Funding mix	Non-interest funding stable; accounts & drafts payable key source	71.1% average funding non-interest bearing; A&D payable +15.1%	Strong structural advantage
Credit	No NPLs/charge-offs; small provisions Q4/Q1	Nonaccrual loans +$3.4M; provision $25K; ACL/loans 1.28%	Slightly weaker credit metrics but still conservative

Management Commentary

“We continue to see year over year improvement… net interest margin… driving significant net interest income gains. This revenue improvement, combined with ongoing efficiency initiatives, led to the profitability growth reported.” — Martin Resch, President & CEO .
“The upward momentum in freight rates, the addition of enhanced freight product offerings and onboarding of new clients should provide support to fees… successful closing of our TEM business sale will enable us to concentrate on our strengths in financial exchange and information processing.” — Martin Resch .
“The Company generally benefits from a higher interest rate environment due to a large percentage of its funding sources being non-interest bearing.” .

Q&A Highlights

The Q2 2025 earnings call transcript was not available through the document tools; no Q&A highlights can be cited. We relied on the press release and investor presentation for themes .

Estimates Context

Metric	Q4 2024	Q1 2025	Q2 2025
Primary EPS Consensus Mean ($)	0.21*	0.60*	0.72*
Primary EPS Actual ($, continuing ops)	0.33*	0.63*	0.38*
Revenue Consensus Mean ($USD Millions)	49.475*	51.487*	51.000*
Revenue Actual ($USD Millions, SPGI definition)	55.075*	51.428*	48.587*

Values retrieved from S&P Global*. Note: S&P Global “Primary EPS” and “Revenue Actual” appear to reflect continuing operations EPS and revenue excluding investment losses, respectively. Company-reported total revenues were $44.4M in Q2 including the $3.6M investment securities loss , and total diluted EPS was $0.66 including $0.28 from discontinued operations .

Implications:

Q2 2025: EPS and revenue (ex inv losses) missed consensus materially; EPS miss reflects continuing ops metric excluding TEM gain; revenue miss driven by lower financial fees and the investment portfolio loss in company GAAP *.

Key Takeaways for Investors

Net interest margin expansion and non-interest funding base remain core earnings drivers; securities portfolio repositioning should lift future NIM despite the near-term $3.6M loss .
Fee trajectory mixed: processing fees modestly higher, but financial fees pressured by lower payments in advance of funding; management expects working capital solutions to support a recovery in H2 .
One-time TEM gain boosted total EPS; ongoing consolidated profitability expected to be neutral from the sale, shifting focus to higher-return core businesses .
Credit modestly softer with higher nonaccruals, but provision minimal and capital ratios robust (CET1 14.82%, total risk-based 15.67%) .
Dividend maintained at $0.31 and repurchase authorization increased to 500,000 shares, with buybacks already executed, providing capital return support .
Trading lens: headline misses vs SPGI consensus may pressure near term, but NIM momentum, funding mix, and fee recovery initiatives are medium-term positives; watch H2 implementation of working capital programs and NIM trajectory.
Monitor facility dollar volumes (energy price sensitivity), freight rate trends, and asset repricing cadence for continued NII growth .

CASS INFORMATION SYSTEMS INC (CASS)·Q2 2025 Earnings Summary