What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2026-03-06 compared with 2025-03-05 · 148 added, 130 removed, 105 unchanged (73% of the section changed)

2 unchanged sentences

New risks may emerge at any time, and Cass cannot predict such risks or estimate the extent to which they may affect the Company’s financial performance.

This section describes the Company’s beliefs regarding the factors that could materially and adversely affect the Company and its business, financial condition and results of operations in the future.

All references to past events are intended to be examples only rather than a complete listing or a representation regarding whether such events have occurred in the past or whether they are likely to occur in the future.

In addition to the factors discussed elsewhere or incorporated by reference in this report, the identified risks that could cause actual results to differ materially include the following:

Economic and Market Conditions Risk

Negative developments affecting the banking industry, and resulting media coverage, can erode customer confidence in the banking system.

The high-profile bank failures during 2023 generated significant market volatility among publicly traded bank holding companies.

These market developments negatively impacted customer confidence in the safety and soundness of regional banks.

As a result, customers may choose to maintain deposits with larger financial institutions or invest in higher yielding short-term fixed income securities, all of which could materially adversely impact the Company’s liquidity, loan funding capacity, net interest margin, capital and results of operations.

Increased regulatory examination scrutiny or new regulatory requirements arising from the recent events in the banking industry could increase the Company’s expenses and affect the Company’s operations.

Increased regulatory scrutiny and new regulations designed to address the high profile bank failures in 2023 may increase the Company’s costs of doing business and reduce its profitability.

Among other things, there may be an increased focus by regulators on deposit composition and the level of uninsured deposits.

As primarily a commercial bank, the Bank has a higher degree of uninsured deposits compared to larger national banks or smaller community banks with a stronger focus on retail deposits.

As a result, the Bank could face increased scrutiny or be viewed as higher risk.

General political, economic or industry conditions may be less favorable than expected.

Local, domestic, and international economic, political and industry-specific conditions and governmental monetary and fiscal policies affect the industries in which the Company competes, directly and indirectly.

Conditions such as inflation, recession, unemployment, volatile interest rates, tight money supply, real estate values, international conflicts, global pandemics, natural disasters, risks related to climate change, and other factors outside of Cass’ control may adversely affect the Company.

Economic downturns could result in the delinquency of outstanding loans, which could have a material adverse impact on Cass’ earnings.

Risks from fluctuating conditions in the financial markets and economic and political conditions generally affect the Company

The Company's success depends, to a certain extent, upon local, national and global economic and political conditions, as well as governmental monetary policies.

A favorable business environment is generally characterized by, among other factors, economic growth, efficient capital markets, low inflation, low unemployment, high business and investor confidence, and strong business earnings.

Unfavorable or uncertain economic and market conditions can be caused by a decline in economic growth both in the U.S.

and internationally;

declines in business activity or investor or business confidence;

limitations on the availability of or increases in the cost of credit and capital;

increases in inflation or interest rates;

high unemployment;

oil price volatility;

natural disasters;

trade policies and tariffs;

or a combination of these or other factors.

In addition, financial markets and global supply chains may be adversely affected by the current or anticipated impact of global wars/military conflicts, terrorism or other geopolitical events.

Current economic conditions are being heavily impacted by recent inflationary conditions and higher interest rates, the effects of which may impact the Company's profitability by negatively impacting its fixed costs and expenses.

Economic and inflationary pressure on consumers and uncertainty regarding economic improvement could result in changes in consumer and business spending, borrowing and savings habits.

Such conditions could have a material adverse effect on the credit quality of the Company's loans and its business, financial condition and results of operations.

Federal budget deficit concerns and the potential for political conflict over legislation to fund U.S.

government operations and raise the U.S.

government's debt limit may increase the possibility of a default by the U.S.

government on its debt obligations, related credit-rating downgrades, or an economic recession in the United States.

Many of the Company's investment securities are issued by the U.S.

government and government agencies and sponsored entities.

As a result of uncertain domestic political conditions, including potential future federal government shutdowns, the possibility of the federal government defaulting on its obligations for a period of time due to debt ceiling limitations or other unresolved political issues, investments in financial instruments issued or guaranteed by the federal government pose liquidity risks.

Most recently, in connection with successive failures by the U.S.

government to reverse the trend of large annual fiscal deficits and growing interest costs, Moody's lowered its long-term issuer credit rating on the U.S.

from Aaa to Aa1.

A further downgrade, or downgrades by other rating agencies, as well as sovereign debt issues facing the governments of

other countries, could have a material adverse impact on financial markets and economic conditions in the U.S.

and worldwide.

Certain events beyond the Company’s control, such as severe weather, natural disasters, terrorist activities or other hostilities, may adversely affect the general economy, financial and capital markets, specific industries, and the Company.

Severe weather, natural disasters, acts of terrorism or other hostilities, and other adverse external events beyond the Company’s control, could have a significant impact on the Company’s ability to conduct business.

Such events could disrupt the Company's operations or those of its customers, affect the stability of the Company’s deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in loss of revenue and/or cause the Company to incur additional expenses.

The occurrence of any such event in the future could have a material adverse effect on the Company’s business, which, in turn, could have a material adverse effect on the Company’s financial condition and results of operations.

Credit and Interest Rate Risks

Unfavorable developments concerning customer credit quality could affect Cass’ financial results.

1 unchanged sentence

Under such circumstances, the Company could experience an increase in the level of provision for credit losses, delinquencies, nonperforming assets, net charge-offs and allowance for credit losses.

The Company’s allowance for credit losses (“ACL”) is subject to continuing evaluation and may be insufficient.

The Company maintains an ACL, which is a reserve established through a provision for credit losses charged to expense.

The ACL is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on loans.

Management uses a systematic, documented approach in determining the appropriate level of ACL, which represents management’s estimate of losses in loans and off-balance sheet exposures as of the balance sheet date.

Management estimated the allowance balance using relevant available information relating to internal and external factors, past events, current conditions and reasonable and supportable forecasts based on economic sources, such as Gross Domestic Product (“GDP”).

Historical credit loss experience, of both the Company and similar peer banks, provides the basis for the estimation of expected credit losses.

Adjustments to historical loss information are made for asset quality trends, borrower’s ability to pay, collateral, and other environmental factors.

The ACL is measured on a collective pool basis when similar risk characteristics exist.

The determination of the appropriate level of the allowance for credit losses inherently involves a high degree of subjectivity and requires management to make estimates based on risks and trends that are subject to material change.

A deterioration in economic conditions, including any recession, affecting borrowers and securities issuers;

rising interest rates;

new information regarding existing loans, credit commitments and securities holdings;

global pandemics;

geopolitical and economic conditions;

natural disasters and risks related to climate change;

and identification of problem loans, ratings down-grades and other factors, both within and outside of the Company’s control, may require an increase in the allowances for credit losses on loans, investment securities and off-balance sheet credit exposures.

The determination and application of the ACL accounting policy involves judgments, estimates, and uncertainties that are subject to change.

Changes in these assumptions, estimates or the conditions surrounding them may have a material impact on the Company’s financial condition, liquidity or results of operations.

Various regulatory agencies, as an integral part of the examination process, periodically review the ACL.

Such agencies may require the Company to recognize additions to the ACL or reserve increases to adversely graded classified loans based on information available to them at the time of their examinations.

The application of the model used to determine the ACL could result in volatility in earnings.

Additionally, if charge-offs in future periods exceed the ACL, the Company will need additional provisions to increase the ACL.

Any increases in the ACL will result in a decrease in net income and, possibly, capital, and may have a material adverse effect on the Company’s business, financial condition and results of operations.

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Provision and Allowance for Credit Losses on Loans and Allowance for Unfunded Commitments” and Item 8, “Financial Statements and Supplementary Data—Note 1” for additional information.

Fluctuations in interest rates could affect Cass’ net interest income and balance sheet.

2 unchanged sentences

Fluctuations in interest rates affect Cass’ financial statements, as they do for all financial institutions.

Volatility in interest rates can also result in disintermediation, which is the flow of funds away from financial institutions into direct investments, such as federal government and corporate securities and other investment vehicles, which, because of the absence of federal insurance premiums and reserve requirements, generally pay higher rates of return than financial

institutions.

Due in part to a higher market interest rate environment in recent periods, the Company's net interest margin has increased to 3.42% in 2024 from 3.25% in 2023, 2.74% in 2022 and 2.31% in 2021, therefore increasing net interest income.

As discussed in greater detail in Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” a decline in market interest rates would be expected to have a negative impact on the Company’s net interest income.

The value of our goodwill and other intangible assets may decline in the future

As of December 31, 2024, the Company had $26.4 million of goodwill and other intangible assets.

A significant decline in the Company's expected future cash flows, a significant adverse change in the business climate, slower growth rates or a significant and sustained decline in the price of the Company's common stock may necessitate taking charges in the future related to the impairment of goodwill and other intangible assets which could have a material adverse effect on the Company's business, financial condition and results of operations.

Due in part to a higher market interest rate environment in recent years, the Company's net interest margin has increased to 3.83% in 2025 from 3.42% in 2024, 3.25% in 2023 and 2.74% in 2022, therefore increasing net interest income.

Notwithstanding these recent increases, as discussed in greater detail in Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” a decline in market interest rates would be expected to have a negative impact on the Company’s net interest income.

In certain circumstances, Cass remits payment of invoices prior to receiving funds from its customers.

6 unchanged sentences

If any of these segments or areas is significantly affected by weak economic conditions, the Company could experience increased credit losses, and its business could be adversely affected.

Operations of the Company’s customer base are impacted by macro-economic factors such as a strong dollar and/or volatility in commodity prices.

A reduction in its customers’ operations could have a material adverse effect on Cass’ results of operations.

Rising interest rates have decreased the value of the Company’s available-for-sale investment securities portfolio, and the Company would realize losses if it were required to sell such investment securities to meet liquidity needs.

As a result of inflationary pressures and resulting higher interest rates, the fair value of previously issued government and other fixed income investment securities has declined significantly, resulting in unrealized losses.

If the Company were required to sell such investment securities to meet liquidity needs, it may incur losses, which could impair the Company’s capital, financial condition, and results of operations and require the Company to raise additional capital on unfavorable terms, thereby negatively impacting its profitability.

While the Company has taken actions to maximize its funding sources, there is no guarantee that such actions will be successful or sufficient in the event of sudden liquidity needs.

Business Operations and Strategic Risk

Cass uses AI in connection with its business and operations, which exposes the Company to inherent risks that may expose it to material harm.

The Company uses AI in connection with its business and operations, including through the models it employs.

AI is complex and rapidly evolving, and the introduction of AI, a relatively new and emerging technology in the early stages of commercial use, into the Company's business and operations may subject it to new or heightened legal, regulatory, ethical, operational, reputational, or other risks.

The models underlying AI may be incorrectly or inadequately designed or implemented and trained on, or otherwise use, data or algorithms that are, and output that may be, incomplete, inadequate, misleading, biased, poor-quality or otherwise flawed, any of which may not be easily detectable.

Further, inappropriate or controversial data practices by developers and end-users or other factors adversely affecting public opinion of AI could impair the acceptance of AI, including those incorporated in the Company's business and operations.

If the AI that Cass uses is deficient, inaccurate or controversial, the Company could incur operational inefficiencies, competitive harm, legal and regulatory action, brand or reputational harm, or other adverse impacts on its business and financial results.

Further, there can be no assurance that the Company's use of AI will be successful in enhancing its business or operations, be

successfully adopted and deployed by its colleague base, or otherwise result in its intended outcomes, and the Company's competitors may incorporate AI into their businesses or operations more quickly or more successfully than Cass.

AI and the use thereof is also subject to a variety of existing laws and regulations, including fair lending, consumer protection, intellectual property, cybersecurity, data privacy, and equal opportunity, and is expected to be subject to new laws and regulations or new applications of existing laws and regulations.

AI is the subject of evolving review by various governmental and regulatory agencies, and changes in laws and regulations governing AI may adversely affect the Company's ability to use AI.

Additionally, various federal, state and foreign governments and regulators have implemented, or are considering implementing, general legal and regulatory frameworks for the appropriate use of AI.

It is possible that the Company will not be able to anticipate how to respond to these rapidly developing laws and regulations.

Further, if the Company does not have sufficient rights to use the data or algorithms on which its AI solutions rely or the output generated thereby, it also may incur liability through the violation of applicable laws and regulations, such as fair lending laws and regulations, third-party intellectual property, privacy or other rights, or contracts to which the Company is a party.

The Company may not be able to sufficiently mitigate or detect any of the foregoing risks or concerns given its and other market participants’ lack of experience with using AI, the pace of technological change, and rapid adoption of AI by its business partners and competitors.

Any actual or perceived failure to address risks or concerns relating to the use of AI, whether unfounded or not, could adversely affect the Company's business and operations.

The Company is exposed to risks associated with the handling of customer funds.

The Company makes payments of approximately $94 billion on an annual basis on behalf of its customers.

Consequently, at any given time, the Company may be holding or directing funds of transportation, facility, CassPay and Bank customers.

This function creates a risk of loss arising from, among other things, fraud by employees or third parties, execution of unauthorized transactions, ACH reversals, or errors relating to transaction processing.

The occurrence of any of these types of events could cause the Company financial loss and reputational harm.

The Company may be adversely impacted by changing oil and overall energy prices.

A decline in the cost of oil worldwide can have a negative effect on both the number of freight transactions processed and the dollar amount of invoices processed.

For example, lower oil prices can cause a significant drop in drilling supplies being transported to fracking operations by domestic railroads and trucks.

Lower oil prices can also result in lower gas and fuel prices, negatively affecting the dollar amounts of the invoices that Cass processes for its freight and shipping customers.

A decline in oil prices could have an adverse effect on the Company’s revenues and could significantly impact its results of operations.

Business Operations and Strategic Risk

Lower oil prices can also result in lower gas and fuel prices, negatively affecting the dollar amounts of the invoices that Cass processes for its freight and facility customers.

In addition, a decline in the price of electricity would also result in lower dollars processed for facility customers.

As such, a decline in oil and overall energy prices could have an adverse effect on the Company’s revenues in the form of net interest income and financial fees, and significantly impact its results of operations.

The Company may be adversely impacted by changing freight rates.

The Company is exposed to changes in freight rates, which impact the overall level of accounts and drafts payable, payments in advance of funding and resulting interest income and financial fees.

Freight rates are highly sensitive to many factors, including carrier capacity, economic conditions, and other factors beyond the Company's control.

A decline in freight rates would be expected to have an adverse effect on the Company's revenues and could significantly impact its result of operations.

Interruptions or performance problems associated with the Company's network technology and infrastructure may adversely affect its business and operating results.

The Company has experienced, and may in the future experience, disruptions, outages, and other performance problems related to its payments platform due to a variety of factors, including infrastructure changes, introductions of new functionality (including functionality that incorporates artificial intelligence tools), human or software errors, denial-of-service attacks, actions or inactions attributable to third parties, earthquakes, hurricanes, floods, fires, natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks and other geopolitical unrest, computer viruses, ransomware, malware, or other events.

The Company's systems also may be subject to break-ins, sabotage, theft, and intentional acts of vandalism, including by its own employees.

Some of the Company's systems are not fully redundant and disaster recovery planning may not be sufficient for all eventualities.

Occasionally, the Company may experience limited periods of server downtime due to server failure or other technical difficulties.

In some instances, the Company may not be able to identify the cause or causes of these performance problems

within an acceptable period of time.

It may become increasingly difficult to maintain and improve its performance, especially during peak usage times.

If the platform is unavailable or if the Company's users are unable to access the Company's platform within a reasonable amount of time, or at all, the Company's business would be adversely affected and its brand could be harmed.

In the event of any of the factors described above, or certain other failures of the Company's infrastructure, customer data may be permanently lost and Cass could experience significant losses of revenue.

To the extent that the Company does not effectively address capacity constraints, upgrade systems as needed, and continually develop its payments technology and network architecture to accommodate actual and anticipated changes in technology, the Company's business and operating results may be adversely affected.

Operational difficulties or cybersecurity problems could damage Cass’ reputation and business.

2 unchanged sentences

The Company also relies on electronic communications and information systems to store sensitive customer data.

Any failure, interruption, breach in security or loss of data, whatever the cause, could reduce client satisfaction with the Company’s products and services and harm Cass’ financial results.

Any failure, interruption, breach in security or loss of data, whatever the cause, could reduce client satisfaction with the Company’s products and services, cause reputational harm, and harm Cass’ financial results.

These types of threats may derive from human error, fraud or malice on the part of external or internal parties, or may result from accidental technological failure.

1 unchanged sentence

The Company’s technologies, systems, networks and software, and those of other financial institutions have been, and are likely to continue to be, the target of cybersecurity threats and attacks, which may range from uncoordinated individual attempts to sophisticated and targeted measures directed at Cass.

In addition, the rapid evolution of artificial intelligence technologies may intensify our cybersecurity risks.

The risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, has increased as the number, intensity and sophistication of attempted attacks and intrusions from

around the world have increased.

The risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, has increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

Criminals continuously adapt their methods to circumvent existing safeguards, and emerging technologies such as artificial intelligence may further enhance their ability to perpetrate fraud.

A material security problem affecting Cass could damage its reputation, deter prospects from purchasing its products and services, deter customers from using its products and services or result in liability to Cass.

1 unchanged sentence

Service disruptions in cloud technologies may lead to delays in accessing, or the loss of, data that is important to the Company's businesses and may hinder customers access to products and services.

Although the Company makes significant efforts to maintain the security and integrity of Cass’ information systems and have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that Cass’ security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.

Although the Company makes significant efforts to maintain the security and integrity of Cass’ information systems and has implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that Cass’ security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.

Even the most well protected information, networks, systems and facilities remain potentially vulnerable because attempted security breaches, particularly cyber-attacks and intrusions, or disruptions will occur in the future, and because the techniques used in such attempts are constantly evolving and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected.

9 unchanged sentences

Cass must respond to rapid technological changes and these changes may be more difficult or expensive than anticipated.

If competitors introduce new products and services embodying new technologies, including those supported by artificial intelligence, or if new industry standards and practices emerge, the Company’s existing product and service offerings, technology and systems may become obsolete.

Further, if Cass fails to adopt or develop new technologies, including those supported by artificial intelligence, or to adapt its products and services to emerging industry standards, Cass may lose current and future customers.

If competitors introduce new products and services embodying new technologies, such as those related to artificial intelligence, more quickly or more successfully than the Company, or if new industry standards and practices emerge, the Company’s existing product and service offerings, technology and systems may become obsolete.

Further, if Cass fails to adopt or develop new technologies or to adapt its products and services to emerging industry standards, Cass may lose current and future customers.

Finally, Cass’ ability to adopt these technologies can also be inhibited by intellectual property rights of third parties.

9 unchanged sentences

Such a change in these practices could adversely affect Cass’ ability to anticipate business needs, including cash flow and its impact on liquidity, and to meet regulatory requirements.

The Company’s allowance for credit losses (“ACL”) is subject to continuing evaluation and may be insufficient.

The Company maintains an ACL, which is a reserve established through a provision for credit losses charged to expense.

The ACL is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on loans.

Management estimated the allowance balance using relevant available information from internal and external factors, relating to past events, current conditions and reasonable and supportable forecasts based on economic sources, such as Gross Domestic Product (“GDP”).

Historical credit loss experience, of both the Company and similar peer banks, provides the basis for the estimation of expected credit losses.

Adjustments to historical loss information are made for asset quality trends, borrower’s ability to pay, collateral, and other environmental factors.

The ACL is measured on a collective pool basis when similar risk characteristics exist.

Continuing deterioration in economic conditions, including the possibility of a recession, affecting borrowers and securities issuers;

rising interest rates;

new information regarding existing loans, credit commitments and securities holdings;

global pandemics;

natural disasters and risks related to climate change;

The determination and application of the ACL accounting policy involves judgments, estimates, and uncertainties that are subject to change.

Changes in these assumptions, estimates or the conditions surrounding them may have a material impact on the Company’s financial condition, liquidity or results of operations.

Various regulatory agencies, as an integral part of the examination process, periodically review the ACL.

The application of the model used to determine the ACL could result in volatility in earnings.

Additionally, if charge-offs in future periods exceed the ACL, the Company will need additional provisions to increase the ACL.

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Provision and Allowance for Credit Losses and Unfunded Commitments” and Item 8, “Financial Statements and Supplementary Data—Note 1” for additional information.

Competitive product and pricing pressure within Cass’ markets may change.

6 unchanged sentences

The Company continues to experience pressures to maintain these relationships as its competitors attempt to capture its customers.

The introduction, withdrawal, success and timing of business initiatives and strategies, including, but not limited to, the expansion of payment and processing activities to new markets, the expansion of products and services to existing markets and opening of new bank branches, may be less successful or may be different than anticipated.

Such a result could adversely affect Cass’ business.

The introduction, withdrawal, success and timing of business initiatives and strategies, including, but not limited to, the expansion of payment and processing activities to new markets, and the expansion of products and services to existing markets, may be less successful or may be different than anticipated.

The Company makes certain projections as a basis for developing plans and strategies for its payment processing and banking products.

If the Company does not accurately determine demand for its products and services, it could result in the

Company incurring significant expenses without the anticipated increases in revenue, which could result in an adverse effect on its earnings.

If the Company does not accurately determine demand for its products and services, it could result in the Company incurring significant expenses without the anticipated increases in revenue, which could result in an adverse effect on its earnings.

In addition, there are risks and uncertainties associated with the introduction of new products and services, including substantial investments of time and resources.

The introduction and development of new products and services may not be achieved along expected timelines, or at all, and may not be successful as a result of factors beyond the Company’s control, including regulatory, competition and external market factors.

Failure to successfully manage these risks in the development and implementation of new products or services, and failure to integrate such new products and services into our existing system of internal controls, could have a material adverse effect on our business, financial condition and results of operations.

The Company and the Bank are subject to liquidity risk.

Failure to successfully manage these risks in the development and implementation of new products or services, and failure to integrate such new products and services into

the Company's existing system of internal controls, could have a material adverse effect on its business, financial condition and results of operations.

The Company is subject to liquidity risk.

The Company requires liquidity to meet deposit and accounts and drafts payable obligations as they come due.

2 unchanged sentences

A failure to maintain adequate liquidity could have a material adverse effect on the Company’s business, financial condition and results of operations.

The Company could experience an unexpected inability to obtain needed liquidity which could adversely affect the Company's business, profitability, and viability as a going concern.

Liquidity measures the ability to meet current and future cash flow needs as they become due.

The liquidity of a financial institution reflects its ability to meet loan requests, to accommodate possible outflows in deposits, and to take advantage of interest rate market opportunities and is essential to a financial institution’s business.

The ability of a financial institution to meet its current financial obligations is a function of its balance sheet structure, its ability to liquidate assets, and its access to alternative sources of funds.

The bank failures in 2023 exemplify the potential serious results of the unexpected inability of insured depository institutions to obtain needed liquidity to satisfy deposit withdrawal requests, including how quickly such requests can accelerate once uninsured depositors lose confidence in an institution's ability to satisfy its obligations to depositors.

1 unchanged sentence

If the Company becomes unable to obtain funds when needed, it could have a material adverse effect on its business, financial condition, and results of operations.

Rising interest rates have decreased the value of the Company’s available-for-sale securities portfolio, and the Company would realize losses if it were required to sell such securities to meet liquidity needs.

As a result of inflationary pressures and the resulting rapid increases in interest rates over the last year, the fair value of previously issued government and other fixed income securities has declined significantly, resulting in unrealized losses.

If the Company were required to sell such securities to meet liquidity needs, it may incur losses, which could impair the Company’s capital, financial condition, and results of operations and require the Company to raise additional capital on unfavorable terms, thereby negatively impacting its profitability.

While the Company has taken actions to maximize its funding sources, there is no guarantee that such actions will be successful or sufficient in the event of sudden liquidity needs.

Management’s ability to retain key officers and employees may change.

Cass’ future operating results depend substantially upon the continued service of Cass’ executive officers and key personnel.

Cass’ future operating results also depend in significant part upon Cass’ ability to attract and retain qualified management, financial, technical, marketing, sales, and support personnel.

Cass’ future operating results also depend in significant part upon Cass’ ability to attract and retain qualified management, financial, technical (including with AI experience), marketing, sales, and support personnel.

Competition for qualified personnel is intense, and the Company cannot ensure success in attracting or retaining qualified personnel.

1 unchanged sentence

Cass’ business, financial condition and results of operations could be materially adversely affected by the loss of any of its key employees, by the failure of any key employee to perform in his or her current position, or by Cass’ inability to attract and retain skilled employees.

Cass’ stock price can become volatile and fluctuate widely in response to a variety of factors.

The Company’s stock price can fluctuate based on factors that can include actual or anticipated variations in Cass’ quarterly results;

new technology or services by competitors;

unanticipated losses or gains due to unexpected events, including losses or gains on securities held for investment purposes;

significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving the Company or its competitors;

changes in accounting policies or practices;

failure to integrate acquisitions or realize anticipated benefits from acquisitions;

or changes in government regulations.

General market fluctuations, industry factors and general economic and political conditions, such as economic slowdowns or recessions, governmental intervention, interest rate changes, credit loss trends, low trading volume or currency fluctuations also could cause Cass’ stock price to decrease regardless of the Company’s operating results.

Regulatory, Legal and Accounting Risk

The Company and the Bank are subject to extensive government regulation and supervision and possible enforcement or other legal actions that could detrimentally affect Cass’ business.

The Company and the Bank are subject to extensive federal and state regulation and supervision, the primary focus of which is to protect customers, depositors, the deposit insurance fund and the safety and soundness of the banking system as a whole, and not shareholders.

In addition, since the global financial crisis, financial institutions generally have been subject to increased scrutiny from regulatory authorities, with an increased focus on risk management and consumer compliance.

This regulatory structure and heightened focus gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to capital levels, the timing and amount of dividend payments, the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes.

Failure to comply with applicable laws, regulations, policies or guidance could result in enforcement and other legal actions by federal and state authorities, including criminal and civil penalties, the loss of FDIC insurance, revocation of a banking charter, and other regulatory sanctions, as well as reputational damage, any of which could have a material adverse effect on the Company’s business, financial condition and results of operations.

The Company is subject to extensive government regulation and supervision and possible enforcement or other legal actions that could detrimentally affect Cass’ business.

The Company is subject to extensive federal and state regulation and supervision, the primary focus of which is to protect customers, depositors, the deposit insurance fund and the safety and soundness of the banking system as a whole, and not shareholders.

Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to capital levels, the timing and amount of dividend payments, the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes.

charter, and other regulatory sanctions, as well as reputational damage, any of which could have a material adverse effect on the Company’s business, financial condition and results of operations.

Congress and federal regulatory agencies continually review banking laws, regulations and policies for possible changes.

4 unchanged sentences

Such capital may not be available on favorable terms, or at all.

Fully phased in, the Basel III Capital rules implemented stricter capital requirements and leverage limits and methods for calculating risk-weighted assets, meaning the Company is required to hold more capital against such assets.

Complying with these more stringent capital requirements could result in management modifying its business strategy and could limit the Company’s ability to make distributions, including paying dividends, or buying back shares.

Compliance with regulatory capital requirements could result in management modifying its business strategy and could limit the Company’s ability to make distributions, including paying dividends, or buying back shares.

The Company may also need to raise additional capital in the future to provide it with sufficient capital resources and liquidity to meet commitments and business needs.

13 unchanged sentences

In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which might be reasonable under the circumstances yet might result in the Company reporting materially different amounts than would have been reported under a different alternative.

Cass has identified one accounting policy as being “critical” to the presentation of its financial condition and results of operations because it requires management to make particularly subjective and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be reported under different conditions or using different assumptions.

More information on Cass’ critical accounting policies is contained in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Cass has identified one accounting policy around the calculation of the allowance for credit losses as being “critical” to the presentation of its financial condition and results of operations because it requires management to make particularly subjective and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be reported under different conditions or using different assumptions.

information on Cass’ critical accounting policies is contained in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

From time to time, the regulatory agencies, the Financial Accounting Standards Board (“FASB”), and other authoritative bodies change the financial accounting and reporting standards that govern the preparation of the Company’s financial statements.

1 unchanged sentence

Cass is subject to examinations and challenges by tax authorities, which, if not resolved in the Company’s favor, could adversely affect the Company’s financial condition and results of operations.

In the normal course of business, Cass and its affiliates are routinely subject to examinations and challenges from federal and state tax authorities regarding the amount of taxes due in connection with investments it has made and the businesses in which it is engaged.

Recently, federal and state taxing authorities have become increasingly aggressive in challenging tax positions taken by financial institutions.

These tax positions may relate to tax compliance, sales and use, franchise, gross receipts, payroll, property and income tax issues, including tax base, apportionment and tax credit planning.

In the normal course of business, Cass and its affiliates are routinely subject to examinations and challenges from federal, state, and foreign tax authorities regarding the amount of taxes due in connection with investments it has made and the businesses in which it is engaged.

The challenges made by tax authorities may result in adjustments to the timing or amount of taxable income or deductions or the allocation of income among tax jurisdictions.

If any such challenges are made and are not resolved in the Company’s favor, they could have an adverse effect on Cass’ financial condition and results of operations.

General Risk Factors

Cass’ stock price can become volatile and fluctuate widely in response to a variety of factors.

The Company’s stock price can fluctuate based on factors that can include actual or anticipated variations in Cass’ quarterly results;

new technology or services by competitors;

unanticipated losses or gains due to unexpected events, including losses or gains on securities held for investment purposes;

significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving the Company or its competitors;

changes in accounting policies or practices;

failure to integrate acquisitions or realize anticipated benefits from acquisitions;

or changes in government regulations.

Such events could disrupt Cass’ operations or those of its customers, affect the stability of the Bank’s deposit base, impair the ability of

borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in loss of revenue and/or cause the Company to incur additional expenses.

General Risks

The value of the Company's goodwill and other intangible assets may decline in the future.

As of December 31, 2025, the Company had $19.9 million of goodwill and other intangible assets.

Climate change could have a material negative impact on the Company and its clients.

The Company's business, as well as the operations and activities of it clients, could be negatively impacted by climate change.

Climate change presents both immediate and long-term risks to Cass and its clients and these risks are expected to increase over time.

Climate changes presents multi-faceted risks, including (i) operational risk from the physical effects of climate events on facilities and other assets as well as those of clients;

(ii) credit risk from borrowers with significant exposure to climate risk;

and (iii) reputational risk from stakeholder concerns about practices related to climate change, carbon footprint and business relationships with clients who operate in carbon-intensive industries.

The Company's business, reputation and ability to attract and retain employees may also be harmed if the response to climate change is perceived to be ineffective or insufficient.

Climate change exposes Cass to physical risk as its effects may lead to more frequent and more extreme weather events, such as prolonged droughts or flooding, tornados, hurricanes, wildfires and extreme seasonal weather;

and longer-term shifts, such as increasing average temperatures, ozone depletion and rising sea levels.

Such events and long-term shifts may damage, destroy or otherwise impact the value or productivity of the Company's properties and other assets;

reduce the availability of insurance;

and/or disrupt operations and other activities through prolonged outages.

Such events and long-term shifts may also have a significant impact on Cass customers, which could amplify credit risk by diminishing borrowers’ repayment capacity or collateral values, and other businesses and counterparties with whom we transact, which could have a broader impact on the economy, supply chains and distribution networks.

Climate change also exposes Cass to transition risks associated with the transition to a less carbon-dependent economy.

Transition risks may result from changes in policies;

laws and regulations;

technologies;

and/or market preferences to address climate change.

Such changes could materially, negatively impact our business, results of operations, financial condition and/or our reputation, in addition to having a similar impact on our clients.

Cass has clients who operate in carbon-intensive industries that are exposed to climate risks, such as those risks related to the transition to a less carbon-dependent economy, as well as clients who operate in low-carbon industries that may be subject to risks associated with new technologies.

Federal and state banking regulators and supervisory authorities, investors and other stakeholders have increasingly viewed financial institutions as important in helping to address the risks related to climate change both directly and with respect to their clients, which may result in financial institutions coming under increased pressure regarding the disclosure and management of their climate risks and related lending and investment activities.

The OCC, FRB and the U.S.

Treasury Department have emphasized that climate-related risks are faced by banking organizations of all types and sizes, specifically including physical and transition risks, and is in the process of enhancing supervisory expectations regarding banks’ risk management practices.

These agencies have indicated increased expectations for larger financial institutions to measure, monitor and manage climate-related risk as part of their enterprise risk management processes.

Although any initial policies may not apply to financial institutions of the Bank’s size, it is likely that regulators will expect all banks to enhance internal control and risk management programs and processes relating to climate change.

To the extent that these initiatives lead to the adoption of new regulations or guidance applicable to the Company and the Bank, compliance costs and risks are expected to increase.

Given that climate change could impose systemic risks upon the financial sector, either via disruptions in economic activity resulting from the physical impacts of climate change or changes in policies as the economy transitions to a less carbon-intensive environment, the Company faces ongoing legislative and regulatory uncertainties and changes regarding climate risk management and practices that if adopted, may result in higher regulatory, compliance, credit and reputational risks and costs.

The Company is subject to ESG risks that could adversely affect its reputation and the market price of its securities.

The Company is subject to a variety of risks arising from ESG matters.

Risks arising from ESG matters may adversely affect, among other things, reputation and the market price of the Company’s securities.

Further, the Company may be exposed to negative publicity based on the identity and activities of those to whom it lends and with which it otherwise does business and the public’s view of the approach and performance of its customers and business partners with respect to

Any such negative publicity could arise from adverse news coverage in traditional media and could also spread through the use of social media platforms.

The Company’s relationships and reputation with its existing and prospective customers and third parties with which it does business could be damaged if it were to become the subject of any such negative publicity.

This, in turn, could have an adverse effect on the Company’s ability to attract and retain customers and employees and could have a negative impact on the market price for securities.

There is an increasing concern over the risks of climate change and related environmental sustainability matters.

The physical risks of climate change include discrete events, such as flooding, hurricanes, and wildfires, and longer-term shifts in climate patterns, such as extreme heat, sea level rise, and more frequent and prolonged drought.

Under medium or longer-term scenarios, such events, if uninterrupted or unaddressed, could disrupt the Company's operations or those of its customers or third parties on which it relies, including through direct damage to assets and indirect impacts from supply chain disruption and market volatility.

Additionally, transitioning to a low-carbon economy may entail extensive policy, legal, technology, and market initiatives.

Transition risks, including changes in consumer preferences and additional regulatory requirements or supervisory expectations or taxes, could increase the Company's expenses and undermine its strategies.

In addition, the Company's reputation and client relationships may be damaged as a result of its practices related to climate change, including its involvement, or its customers’ involvement, in certain industries or projects, in the absence of mitigation and/or transition measures, associated with causing or exacerbating climate change, as well as any decisions the Company makes to continue to conduct or change its activities in response to considerations relating to climate change.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors