CASS INFORMATION SYSTEMS INC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, (In thousands except share and per share data) 2025 2024 Assets Cash and due from banks $ 26,129 $ 19,328 Short-term investments 366,139 330,400 Cash and cash equivalents 392,268 349,728 Investment securities available-for-sale, at fair value 770,772 528,021 Loans 1,061,217 1,081,989 Less allowance for credit losses 13,597 13,395 Loans, net 1,047,620 1,068,594 Payments in advance of funding 164,514 208,530 Premises and equipment, net 29,449 30,576 Investments in bank-owned life insurance 52,195 50,325 Goodwill 16,164 16,333 Other intangible assets, net 3,728 4,914 Accounts and drafts receivable from customers 69,425 55,906 Other assets 59,889 67,741 Assets of discontinued operations — 14,413 Total assets $ 2,606,024 $ 2,395,081 Liabilities and Shareholders’ Equity Liabilities: Deposits Noninterest-bearing $ 513,434 $ 251,230 Interest-bearing 686,599 716,686 Total deposits 1,200,033 967,916 Accounts and drafts payable 1,124,858 1,129,610 Other liabilities 38,135 46,211 Liabilities of discontinued operations — 22,314 Total liabilities 2,363,026 2,166,051 Shareholders’ Equity: Preferred stock, par value $ 0.50 per share; 2,000,000 shares authorized and no shares issued — — Common stock, par value $ 0.50 per share; 40,000,000 shares authorized; 15,505,772 shares issued at December 31, 2025 and 2024; 12,917,637 and 13,504,104 shares outstanding at December 31, 2025 and 2024, respectively. 7,753 7,753 Additional paid-in capital 207,052 205,593 Retained earnings 167,092 148,487 Common shares in treasury, at cost ( 2,588,135 shares at December 31, 2025 and 2,001,668 shares at December 31, 2024, respectively) ( 112,148 ) ( 87,615 ) Accumulated other comprehensive loss ( 26,751 ) ( 45,188 ) Total shareholders’ equity 242,998 229,030 Total liabilities and shareholders’ equity $ 2,606,024 $ 2,395,081 See accompanying notes to consolidated financial statements. 42 Table of Contents CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME For the Years Ended December 31, (In thousands except per share data) 2025 2024 2023 Fee Revenue and Other Income: Processing fees $ 66,129 $ 66,061 $ 59,670 Financial fees 40,398 42,584 45,339 Loss on sale of investment securities ( 3,534 ) ( 45 ) ( 173 ) Other 6,865 5,247 5,089 Total fee revenue and other income 109,858 113,847 109,925 Interest Income: Interest and fees on loans 62,340 55,362 50,825 Interest and dividends on investment securities: Taxable 17,328 13,422 14,118 Exempt from federal income taxes 4,064 3,509 4,097 Interest on federal funds sold and other short-term investments 13,834 15,752 13,720 Total interest income 97,566 88,045 82,760 Interest Expense: Interest on deposits 16,318 20,258 16,150 Interest on short-term borrowings 8 — 116 Total interest expense 16,326 20,258 16,266 Net interest income 81,240 67,787 66,494 Provision for (release of) credit losses 348 447 ( 550 ) Net interest income after provision for (release of) credit losses 80,892 67,340 67,044 Total net revenue 190,750 181,187 176,969 Operating Expense: Salaries and commissions 80,710 80,371 76,097 Share-based compensation 4,186 3,052 4,007 Employee profit sharing 6,284 4,452 5,815 Net periodic pension cost — 4,169 878 Other benefits 18,886 17,293 17,591 Total personnel expenses 110,066 109,337 104,388 Occupancy 2,767 2,695 2,799 Equipment 9,917 8,101 6,895 Bad debt (recovery) expense ( 2,000 ) 7,847 — Amortization of intangible assets 1,172 692 692 Other operating expense 30,069 29,070 27,731 Total operating expense 151,991 157,742 142,505 Income from continuing operations, before income tax expense 38,759 23,445 34,464 Income tax expense 7,647 4,887 6,574 Net income from continuing operations 31,112 18,558 27,890 Income from discontinued operations, net of tax 4,004 610 2,169 Net income $ 35,116 $ 19,168 $ 30,059 Basic earnings per share from continuing operations $ 2.36 $ 1.37 $ 2.06 Basic earnings per share from discontinued operations 0.30 0.05 0.16 Basic earnings per share $ 2.66 $ 1.42 $ 2.22 Diluted earnings per share from continuing operations $ 2.31 $ 1.35 $ 2.02 Diluted earnings per share from discontinued operations 0.30 0.04 0.16 Diluted earnings per share $ 2.61 $ 1.39 $ 2.18 See accompanying notes to consolidated financial statements. 43 Table of Contents CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Years Ended December 31, (In thousands) 2025 2024 2023 Comprehensive Income: Net income $ 35,116 $ 19,168 $ 30,059 Other comprehensive income: Net unrealized gain (loss) on securities available-for-sale 21,419 ( 1,931 ) 12,605 Tax effect ( 5,099 ) 459 ( 3,000 ) Reclassification adjustments for losses included in net income 3,534 45 173 Tax effect ( 841 ) ( 10 ) ( 41 ) ASC 715 pension adjustment — 5,191 2,550 Tax effect — ( 1,235 ) ( 607 ) Foreign currency translation adjustments, net of tax ( 576 ) ( 238 ) 172 Other comprehensive income 18,437 2,281 11,852 Total comprehensive income $ 53,553 $ 21,449 $ 41,911 See accompanying notes to consolidated financial statements. 44 Table of Contents CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, (In thousands) 2025 2024 2023 Cash Flows From Operating Activities: Net Income $ 35,116 $ 19,168 $ 30,059 Less: net income from discontinued operations 4,004 610 2,169 Net income from continuing operations $ 31,112 $ 18,558 $ 27,890 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of intangible assets 1,172 692 692 Net amortization of premium/discount on investment securities 974 3,591 4,472 Depreciation 6,029 5,033 3,954 Loss on sales of securities 3,534 45 173 Share-based compensation expense 4,186 3,052 4,007 Provision for (release of) credit losses 348 447 ( 550 ) Increase in bank-owned life insurance ( 1,870 ) ( 1,165 ) ( 1,161 ) Increase (decrease) in current income tax liability 4,256 ( 192 ) ( 1,766 ) ASC 715 pension adjustment, net of tax — 5,191 806 Increase in accounts receivable ( 322 ) ( 3,830 ) ( 3,082 ) Other operating activities, net ( 10,611 ) 5,322 ( 49 ) Net cash provided by operating activities - continuing operations 38,808 36,744 35,386 Net cash (used in) provided by operating activities - discontinued operations ( 1,371 ) 2,205 1,551 Net cash provided by operating activities 37,437 38,949 36,937 Cash Flows From Investing Activities: Proceeds from sales of securities available-for-sale 129,857 60,126 111,583 Proceeds from maturities of securities available-for-sale 83,075 153,192 39,233 Purchases of securities available-for-sale ( 435,237 ) ( 119,744 ) ( 15,332 ) Net decrease (increase) in loans 20,772 ( 67,671 ) 68,588 Proceeds from sale of TEM business 18,000 — — Decrease (increase) in payments in advance of funding 44,016 ( 9,669 ) 94,914 Purchases of premises and equipment, net ( 5,663 ) ( 8,512 ) ( 11,938 ) Asset acquisition — ( 2,954 ) — Net cash (used in) provided by investing activities - continuing operations ( 145,180 ) 4,768 287,048 Net cash used in investing activities - discontinued operations ( 99 ) ( 817 ) ( 2,386 ) Net cash (used in) provided by investing activities ( 145,279 ) 3,951 284,662 Cash Flows From Financing Activities: Net increase (decrease) in noninterest-bearing demand deposits 262,204 ( 273,129 ) ( 118,398 ) Net (decrease) increase in interest-bearing demand and savings deposits ( 46,025 ) 95,489 ( 34,106 ) Net increase in time deposits 15,938 4,742 36,101 Net (increase) decrease in accounts and drafts receivable from customers ( 13,519 ) 54,746 ( 14,872 ) Net (decrease) increase in accounts and drafts payable ( 4,753 ) 76,341 5,407 Cash dividends paid ( 16,511 ) ( 16,463 ) ( 15,959 ) Purchase of common shares for treasury ( 25,988 ) ( 7,248 ) ( 5,773 ) Other financing activities, net ( 1,299 ) ( 1,684 ) ( 834 ) Net cash provided by (used in) financing activities - continuing operations 170,047 ( 67,206 ) ( 148,434 ) Net cash (used in) provided by financing activities - discontinued operations ( 19,665 ) 1,566 ( 1,639 ) Net cash provided by (used in) financing activities 150,382 ( 65,640 ) ( 150,073 ) Net increase (decrease) in cash and cash equivalents 42,540 ( 22,740 ) 171,526 Cash and cash equivalents at beginning of year 349,728 372,468 200,942 Cash and cash equivalents at end of year $ 392,268 $ 349,728 $ 372,468 Supplemental cash flow information: Cash paid for interest $ 16,386 $ 20,227 $ 15,697 Cash paid for income taxes 5,136 5,509 9,300 Supplemental noncash disclosures: Contingent consideration for asset acquisition $ — $ 3,500 $ — See accompanying notes to consolidated financial statements. 45 Table of Contents CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (In thousands except per share data) Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Total Balance, December 31, 2022 $ 7,753 $ 207,422 $ 131,682 $ ( 81,211 ) $ ( 59,321 ) $ 206,325 Net income 30,059 30,059 Cash dividends ($ 1.17 per share) ( 15,959 ) ( 15,959 ) Issuance of 84,366 common shares pursuant to share-based compensation plan, net ( 3,334 ) 2,616 ( 718 ) Exercise of SARs ( 238 ) 122 ( 116 ) Share-based compensation expense 4,157 ( 18 ) 4,139 Purchase of 150,541 common shares ( 5,773 ) ( 5,773 ) Other comprehensive income 11,852 11,852 Balance, December 31, 2023 $ 7,753 $ 208,007 $ 145,782 $ ( 84,264 ) $ ( 47,469 ) $ 229,809 Net income 19,168 19,168 Cash dividends ($ 1.21 per share) ( 16,463 ) ( 16,463 ) Issuance of 126,336 common shares pursuant to share-based compensation plan, net ( 5,613 ) 3,929 ( 1,684 ) Share-based compensation expense 3,199 ( 32 ) 3,167 Purchase of 167,455 common shares ( 7,248 ) ( 7,248 ) Other comprehensive income 2,281 2,281 Balance, December 31, 2024 $ 7,753 $ 205,593 $ 148,487 $ ( 87,615 ) $ ( 45,188 ) $ 229,030 Net income 35,116 35,116 Cash dividends ($ 1.25 per share) ( 16,511 ) ( 16,511 ) Issuance of 122,127 common shares pursuant to share-based compensation plan, net ( 2,862 ) 1,563 ( 1,299 ) Share-based compensation expense 4,321 ( 108 ) 4,213 Purchase of 617,415 common shares ( 25,988 ) ( 25,988 ) Other comprehensive income 18,437 18,437 Balance, December 31, 2025 $ 7,753 $ 207,052 $ 167,092 $ ( 112,148 ) $ ( 26,751 ) $ 242,998 See accompanying notes to consolidated financial statements. 46 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 Summary of Significant Accounting Policies Summary of Operations The Company provides payment and information services, which include processing and payment of transportation, energy, telecommunications and environmental invoices. These services include the acquisition and management of data, information delivery and financial exchange. The consolidated balance sheet captions, “Accounts and drafts payable” and “Payments in advance of funding,” represent the Company’s resulting financial position related to the payment services that are performed for customers. The Company also provides a full range of banking services to individual, corporate and institutional customers through the Bank, its wholly owned bank subsidiary. Basis of Presentation The accounting and reporting policies of the Company and its subsidiaries conform to U.S. GAAP. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries after elimination of intercompany transactions. Certain amounts in the 2024 and 2023 consolidated financial statements have been reclassified to conform to the 2025 presentation. Such reclassifications have no effect on previously reported net income or shareholders’ equity. Financial results have been presented on a continuing operations basis for all periods shown, unless otherwise indicated. As such, amounts related to components of the business that meet the criteria for classification as discontinued operations have been excluded from continuing operations and reported separately. Additional information regarding the Company’s discontinued operations for the years ended 2025 and 2024, including the nature of the divestitures and their impact on the consolidated financial statements, is provided in Note 2 to the consolidated financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets; allowance for credit losses; the valuation of deferred tax assets, fixed assets, investments, lease liabilities and right-of-use assets, and share-based compensation; and reserves for employee benefit obligations, income tax uncertainties, and other contingencies. Cash and Cash Equivalents For purposes of the consolidated statements of cash flows, the Company considers cash and due from banks, interest-bearing deposits in other financial institutions, and federal funds sold and other short-term investments to be cash and cash equivalents. Investment Securities The Company classifies its investment securities as available-for-sale. Securities classified as available-for-sale are carried at fair value. Unrealized gains and losses, net of the related tax effect, are excluded from earnings and reported in accumulated other comprehensive income, a component of shareholders’ equity. Securities are periodically evaluated for credit losses in accordance with the guidance provided in FASB ASC Topic 326, Financial Instruments – Credit Losses ("ASC 326"). For available for sale investment securities in an unrealized loss position, the entire loss in fair value is required to be recognized in current earnings if the Company intends to sell the securities or believes it is more likely than not that it will be required to sell the security before the anticipated recovery. If neither condition is met, and the Company does not expect to recover the amortized cost basis, the Company determines whether the decline in fair value resulted from credit losses or other factors. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss has occurred, and an allowance for credit losses is recorded. The allowance for credit losses is limited by the amount that the fair value is less than the amortized cost basis. Any impairment not recorded through the provision for credit losses would be recognized in other comprehensive income. Changes in the allowance for credit losses would be recorded as a provision for credit losses on the consolidated statements of income. Losses would be charged against the allowance for credit losses on securities when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the conditions regarding intent or requirement to sell is met. 47 Table of Contents Premiums and discounts are amortized or accreted to interest income over the expected lives of the respective securities using the level-yield method. Interest income is recognized when earned. Gains and losses are calculated using the specific identification method. Loans Interest on loans is recognized based upon the principal amounts outstanding. It is the Company’s policy to discontinue the accrual of interest when there is reasonable doubt as to the collectability of principal or interest. Subsequent payments received on such loans are applied to principal if there is any doubt as to the collectability of such principal; otherwise, these receipts are recorded as interest income. The accrual of interest on a loan is resumed when the loan is current as to payment of both principal and interest and/or the borrower demonstrates the ability to pay and remain current. Loan origination and commitment fees on originated loans, net of certain direct loan origination costs, are deferred and amortized to interest income using the level-yield method over the estimated lives of the related loans. Allowance for Credit Losses The ACL is increased by provisions charged to expense and is available to absorb charge-offs, net of recoveries. Management utilizes a systematic, documented approach in determining the appropriate level of the ACL. Management’s approach provides for estimated current expected credit losses on loans in accordance with ASC 326. These estimates are based upon a number of factors, such as payment history, financial condition of the borrower, expected future cash flows and collateral exposure. The ACL is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries for amounts previously charged off and expected to be charged off do not exceed the aggregate of amounts previously charged off and expected to be charged off. Management estimated the allowance balance using relevant available information from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts based on economic factors, such as 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 concentration risk, 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. Management believes the ACL is adequate to absorb expected losses in the loan portfolio. Loans The Company has identified the following portfolio segments: Commercial & Industrial (“C&I”) – C&I loans consist of loans to small and medium-sized businesses in a wide variety of industries, franchise lending, and equipment financing to companies of all sizes. These loans are generally collateralized by inventory, accounts receivable, equipment, and other commercial assets, and may be supported by other credit enhancements such as personal guarantees. Risk arises primarily due to a difference between expected and actual cash flows of the borrower. However, the recoverability of these loans is also dependent on other factors primarily dictated by the type of collateral securing these loans. The fair value of the collateral securing these loans may fluctuate as market conditions change. Included within C&I are revolving loans supported by borrowing bases that fluctuate depending on the amount of underlying collateral. Commercial Real Estate (“CRE”) – CRE loans include various types of loans for which the Company holds real property as collateral. Commercial real estate lending activity is typically restricted to owner-occupied properties or to investor properties that are owned by customers with a current banking relationship. The primary risks of CRE loans include the borrower’s inability to pay and material decreases in the value of the real estate being held as collateral. Faith-based CRE – Faith-based CRE loans include loans to faith-based ministries for which the Company holds real property as collateral. The primary risks of faith-based CRE loans include the borrower’s inability to pay and material decreases in the value of the real estate being held as collateral. Construction and Land Development – The Company originates loans to finance construction projects including faith-based and commercial projects. Construction loans are generally collateralized by first liens on the real estate and have floating interest rates. The primary risks of construction loans are construction completion and timing risk. Adverse economic conditions may negatively impact the borrowers’ ability to complete the project. Additionally, the fair value of the underlying collateral may fluctuate as market conditions change. 48 Table of Contents The ACL is calculated as the difference between the amortized cost basis of the loan portfolio and the projections from the weighted-average remaining maturity ("WARM") model that the Company developed. The WARM model utilizes an attrition analysis, including events such as payoffs, matured loans, and renewals in the borrowers’ control, to anticipate the length of time it would take for each portfolio segment to runoff. Management incorporates a one-year GDP forecast and an immediate reversion to peer historical loss rates to determine the annual charge off rates over the estimated life of the loans. After the reasonable and supportable forecast period, the model reverts to long-run /historical average loss rates of its peers. However, for the faith-based CRE ACL, loss rates are determined using the Company’s long-run historical averages, as this loan segment is unique to the Company and does not represent a more than nominal percentage of peer loan portfolios. The economic forecast is based on management’s assessment of the length and pattern of the current economic cycle. The resulting annual charge off rate determined for each year in the WARM model is applied to the loan balances estimated in the attrition analysis. Additionally, the ACL calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. These qualitative adjustments may increase or reduce reserve levels and include adjustments for lending management experience and risk tolerance, value of underlying collateral, loan review and audit results, asset quality and portfolio trends, loan portfolio growth and loan concentrations. The Company has elected to exclude accrued interest receivable ("AIR") from the allowance for credit losses calculation. When a loan is placed on non-accrual, any recorded AIR is reversed against interest income. 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 ACL is decreased by net charge-offs and is increased by provisions for credit losses that are charged to the consolidated statements of operations. Charge-offs, if any, are typically measured for each loan based on a thorough analysis of the most probable source of repayment, such as the present value of the loan’s expected future cash flows, the loan’s estimated fair value, or the estimated fair value of the underlying collateral less costs of disposition for collateral-dependent loans. When it is determined that specific loans, or portions thereof, are uncollectible, these amounts are charged off against the ACL. Unfunded loan commitments In addition to the ACL for funded loans, the Company maintains reserves to cover the risk of loss associated with off-balance sheet unfunded loan commitments. The allowance for off-balance sheet credit losses is maintained within other liabilities in the statements of financial condition. Under the CECL framework, adjustments to this liability are recorded as provision for credit losses in the consolidated statements of operations. Unfunded loan commitment balances are evaluated by loan segment. In order to establish the required level of reserve, the Company applies average historical utilization rates and ACL loan model loss rates for each loan segment to the outstanding unfunded commitment balances. Investment securities Management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings. If either of the above criteria is not met, the Company will evaluate whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected is compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss. For U.S. agency-backed securities where the risk of nonpayment of the amortized cost basis is zero, the Company will not measure expected credit losses on these securities. When the loss is not considered a result of credit loss, the cost basis of the security is written down to fair value, with the loss charge recognized in AOCI. Credit losses are not estimated for AIR from investment securities as interest deemed uncollectible is written off through interest income. 49 Table of Contents Individually Evaluated Loans A loan is considered individually evaluated when it is probable that a creditor will be unable to collect all amounts due, both principal and interest, according to the contractual terms of the loan agreement. Individually evaluated loans are generally measured based on the expected future cash flows and discounted at the loan's effective interest rate. Alternatively, reference to an observable market price could be used to individually evaluate loans, if one exists, or the fair value of the collateral for a collateral-dependent loan. Regardless of the historical measurement method used, the Company measures individually evaluated loans based on the fair value of the collateral when the Company determines foreclosure is probable. The Company uses its methods as discussed above for recognizing interest on individually evaluated loans. Foreclosed Assets Real estate acquired as a result of foreclosure is initially recorded at fair value less estimated selling costs. Fair value is generally determined through the receipt of appraisals. Any write down to fair value at the time the property is acquired is recorded as a charge-off to the allowance for credit losses. Any decline in the fair value of the property subsequent to acquisition is recorded as a charge to non-interest expense. Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed over the estimated useful lives of the assets, or the respective lease terms for leasehold improvements, using straight-line and accelerated methods. Estimated useful lives do not exceed 40 years for buildings, the lesser of 10 years or the life of the lease for leasehold improvements and range from 3 to 7 years for software, equipment, furniture and fixtures. Maintenance and repairs are charged to expense as incurred. Goodwill and Intangible Assets Goodwill and intangible assets have resulted from the excess purchase price over the estimated fair value of net assets acquired in a business combination. Goodwill and intangible assets with indefinite useful lives are not amortized, but instead are tested for impairment at least annually. Intangible assets with finite useful lives are amortized on a straight-line basis over their respective estimated useful lives. Periodically, the Company reviews finite intangible assets for events or changes in circumstances that may indicate that the carrying amount of the assets may not be recoverable. Based on those reviews, adjustments of recorded amounts have not been required. Non-marketable Equity Investments The Company accounts for non-marketable equity investments, in which it holds less than a 20 % ownership, as equity investments without readily determinable fair values. As a result, the carrying value of the investment is determined under the measurement alternative of cost, less impairment (if any), adjusted for fair value changes when observable prices are available. The Company periodically evaluates for impairment of these investments. In performing this evaluation, the Company considers various factors including the investee's financial condition, results of operations, operating trends and other financial ratios. Non-marketable equity investments are included in other assets on the consolidated balance sheets. Treasury Stock Purchases of the Company’s common stock are recorded at cost. Upon reissuance, treasury stock is reduced based upon the average cost basis of shares held. Comprehensive Income Comprehensive income consists of net income, changes in net unrealized gains (losses) on available-for-sale investment securities and pension liability adjustments and is presented in the accompanying consolidated statements of shareholders' equity and consolidated statements of comprehensive income. Processing Fees A majority of the Company’s fee revenue is attributable to providing services related to processing and payment of invoices. These services include invoice processing, transportation invoice rating, payment processing and services, auditing, and the generation of accounting and transportation information. The Company also processes, pays and generates management information from electric, gas, telecommunications, environmental, and other invoices. The specific payment and information processing services provided to each customer are developed individually to meet each customer’s specific requirements. The Company enters into service agreements with customers typically for fixed fees per transaction that are invoiced monthly. Revenues are recognized in the period services are rendered and earned under the service agreements, as long as collection is reasonably assured. Financial fees The Company earns fees on a transaction level basis for invoice payment services when making customer payments. Fees are recognized at the point in time when the payment transactions are made, which is when the performance obligation is satisfied. 50 Table of Contents Income Taxes Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced if necessary, by a deferred tax asset valuation allowance. In the event that management determines it is more likely than not that it will not be able to realize all or part of net deferred tax assets in the future, the Company adjusts the recorded value of deferred tax assets, which would result in a direct charge to income tax expense in the period that such determination is made. Likewise, the Company will reverse the valuation allowance when realization of the deferred tax asset is expected. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company and its subsidiaries file U.S. federal and certain state income tax returns on a consolidated basis. In addition, certain state jurisdictions are filed on a separate company basis by the Company or its subsidiaries. The Company recognizes and measures income tax benefits using a two-step model: 1) a tax position must be more likely than not to be sustained based solely on its technical merits in order to be recognized; and 2) the benefit must be measured as the largest dollar amount of that position that is more likely than not to be sustained upon settlement. The difference between the benefit recognized for a tax position in this model and the tax benefit claimed on a tax return is treated as an unrecognized tax benefit. The Company recognizes income tax related interest and penalties in income tax expense. Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the sum of the weighted average number of common shares outstanding and the weighted average number of potential common shares outstanding. Share-Based Compensation The Company follows ASC 718, Accounting for Stock Options and Other Share-based Compensation (“ASC 718”), which requires that all share-based compensation be recognized as an expense in the financial statements and that such cost be measured at the fair value of the award. ASC 718 also requires that excess tax benefits related to stock option exercises and restricted stock awards be reflected as financing cash inflows instead of operating cash inflows. Pension Plans The amounts recognized in the consolidated financial statements related to the pension plans are determined from actuarial valuations. Inherent in these valuations are assumptions including expected return on plan assets, discount rates at which the liabilities could be settled and mortality rates. These assumptions are updated annually and are disclosed in Note 11. The Company follows ASC 715, Compensation – Retirement Benefits (“ASC 715”), which requires companies to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its consolidated balance sheet and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. The funded status is measured as the difference between the fair value of the plan assets and the projected benefit obligation as of the date of its fiscal year-end. As further described in Note 11 to the consolidated financial statements, the Company terminated its noncontributory defined-benefit pension plan during 2024. Fair Value Measurements The Company follows the provisions of ASC 820, Fair Value Measurements and Disclosures , which defines fair value, establishes a framework for measuring fair value in GAAP, and outlines disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level hierarchy for valuation techniques is used to measure financial assets and financial liabilities at fair value. This hierarchy is based on whether the valuation inputs are observable or unobservable. Financial instrument valuations are considered Level 1 when they are based on quoted prices in active markets for identical assets or liabilities. Level 2 financial instrument valuations use quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Financial instrument valuations are considered Level 3 when they are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable, and when determination of the fair value requires significant management judgment or estimation. The Company records investment securities available for sale at their fair values on a recurring basis using Level 2 valuations. Additionally, the Company records individually evaluated credits and other real estate owned at their fair value on a nonrecurring basis. The nonrecurring fair value adjustments typically involve application of lower-of-cost-or-market accounting or impairment write-downs of individual assets. 51 Table of Contents Impact of New and Not Yet Adopted Accounting Pronouncements In December 2023, the FASB issued 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). This ASU requires public business entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold. It also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state, and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things. The adoption of ASU 2023-09 was effective for annual periods beginning after December 15, 2024 and can be seen in Note 14 to the consolidated financial statements. In July 2025, the FASB issued Accounting Standards Update 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"). ASU 2025-05 provides the option to elect a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. ASU 2025-05 is effective for the Company for the fiscal years beginning after December 15, 2025 and interim periods within those fiscal years. The Company does not expect adoption of ASU 2025-05 to have a material impact on its consolidated financial statements. In September 2025, the FASB issued Accounting Standards Update 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"). ASU 2025-06 clarified and modernized the accounting for costs related to internal-use software. The amendments in 2025-06 remove all references to project stages throughout Subtopic 350-40 and clarify the threshold entities apply to begin capitalizing costs. ASU 2025-06 is effective for the Company for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years. The Company is currently evaluating the impact of adoption of ASU 2025-06 on its consolidated financial statements. In December 2025, the FASB issued Accounting Standards Update 2025-11, Interim Reporting (Topic 270): Narrow‑Scope Improvements ("ASU 2025-11" ) . ASU 2025-11 clarifies and enhances guidance under ASC 270 on interim financial reporting by (i) clarifying the scope of ASC 270 such that it now explicitly applies only to entities that issue complete interim financial statements and related notes under U.S. GAAP, (ii) establishing clear guidance on the form of interim statements and notes, incorporating a comprehensive list of required interim disclosures drawn from across the ASC, and (iii) introducing a requirement to disclose material events and changes occurring after the end of the last annual period that could impact interim results. ASU 2025-11 will be effective for the Company for interim periods beginning in 2028, though early adoption is permitted. The Company does not expect the adoption of ASU 2025-11 to have a material impact on its consolidated financial statements. Note 2 Discontinued Operations and Assets and Liabilities Held for Sale On April 7, 2025, the Company signed an Asset Purchase Agreement providing for the sale of its telecom expense management and managed mobility solutions business unit ("TEM Business Unit") to Asignet USA Inc ("Asignet") for a purchase price of $18.0 million. The sale closed on June 30, 2025. The Company also signed a Transition Services Agreement with Asignet to provide certain information technology, data ingestion, and payment processing services for a period of time not to exceed 18 months after closing. The Company has applied discontinued operations accounting in accordance with ASC Topic 205-20, “Presentation of Financial Statements – Discontinued Operations,” to the assets and liabilities being sold related to the Company's TEM Business Unit as of and for the years ended December 31, 2025, 2024, and 2023, as applicable. The sale of the TEM Business Unit represents a strategic shift due to the Company completely exiting both the telecom expense management and managed mobility solutions businesses. The Company did not allocate any consolidated interest that is not directly attributable to or related to discontinued operations. All financial information in the consolidated financial statements and notes to the consolidated financial statements is reported on a continuing operations basis, unless otherwise noted. The TEM Business Unit is included in the Information Services operating segment. 52 Table of Contents The carrying amount of major classes of assets and liabilities included as part of discontinued operations at December 31, 2025 and 2024 were as follows: December 31, (In thousands except share and per share data) 2025 2024 Assets Premises and equipment, net $ — $ 3,598 Goodwill — 5,019 Other intangible assets, net — 93 Other assets — 5,703 Assets of discontinued operations $ — $ 14,413 Liabilities Accounts and drafts payable — 19,665 Other liabilities — 2,649 Liabilities of discontinued operations $ — $ 22,314 Net income from discontinued operations for the years ended December 31, 2025, 2024, and 2023 is as follows: For the Years Ended December 31, (In thousands except per share data) 2025 2024 2023 Fee Revenue and Other Income: Processing fees $ 7,630 $ 15,795 $ 17,837 Financial fees 888 713 646 Other 3,402 1,494 2,059 Gain on sale of TEM business 3,550 — — Total fee revenue and other income 15,470 18,002 20,542 Operating Expense: Salaries and commissions 6,637 11,533 11,562 Share-based compensation 27 116 132 Other benefits 1,414 2,406 2,612 Total personnel expenses 8,078 14,055 14,306 Occupancy 408 751 761 Equipment 110 204 242 Amortization of intangible assets 18 45 88 Other operating 1,542 2,174 2,252 Total operating expense 10,156 17,229 17,649 Income from discontinued operations, before income tax expense 5,314 773 2,893 Income tax expense 1,310 163 724 Net income from discontinued operations $ 4,004 $ 610 $ 2,169 Note 3 Capital Requirements and Regulatory Restrictions The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines, the Company and the Bank must meet specific capital guidelines 53 Table of Contents that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulators to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of total and Tier I capital and common equity Tier I capital to risk-weighted assets, and of Tier I capital to average assets. Management believes that as of December 31, 2025 and 2024, the Company and the Bank met all capital adequacy requirements to which they are subject. The Bank is also subject to the regulatory framework for prompt corrective action. As of December 31, 2025, the most recent notification from the regulatory agencies categorized the Bank as well-capitalized. To be categorized as well-capitalized, the Bank must maintain minimum total risk-based, common equity Tier I risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the Bank’s category. The Company has traditionally paid a quarterly cash dividend to its shareholders. Subsidiary dividends can be a significant source of funds for payment of dividends by the Company to its shareholders. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that year combined with the retained net profits for the preceding two years. Under the foregoing dividend restrictions and while maintaining its “well capitalized” status, at December 31, 2025, unappropriated retained earnings of $ 31.1 million were available at the Bank for the declaration of dividends to the Company without prior approval from regulatory authorities. In addition to regulatory requirements and considerations, any payment of dividends in the future will depend on the Company’s earnings, financial condition and other factors considered relevant by the Company’s Board of Directors. There were no restricted funds on deposit used to meet regulatory reserve requirements at December 31, 2025 and 2024. 54 Table of Contents The Company’s and the Bank’s actual and required capital amounts and ratios are as follows: Actual Capital Requirements Requirement to be Well-Capitalized (In thousands) Amount Ratio Amount Ratio Amount Ratio At December 31, 2025 Total capital (to risk-weighted assets) Cass Information Systems, Inc. $ 262,792 15.95 % $ 131,837 8.00 % $ N/A N/A % Cass Commercial Bank 217,409 19.61 88,677 8.00 110,847 10.00 Common Equity Tier I Capital (to risk-weighted assets) Cass Information Systems, Inc. 248,776 15.10 74,158 4.50 N/A N/A Cass Commercial Bank 203,943 18.40 49,881 4.50 72,050 6.50 Tier I capital (to risk-weighted assets) Cass Information Systems, Inc. 248,776 15.10 98,878 6.00 N/A N/A Cass Commercial Bank 203,943 18.40 66,508 6.00 88,677 8.00 Tier I capital (to average assets) Cass Information Systems, Inc. 248,776 9.91 100,367 4.00 N/A N/A Cass Commercial Bank 203,943 14.48 56,357 4.00 70,446 5.00 At December 31, 2024 Total capital (to risk-weighted assets) Cass Information Systems, Inc. $ 261,021 14.61 % $ 142,969 8.00 % $ N/A N/A % Cass Commercial Bank 207,519 17.68 93,911 8.00 117,389 10.00 Common Equity Tier I Capital (to risk-weighted assets) Cass Information Systems, Inc. 247,354 13.84 80,420 4.50 N/A N/A Cass Commercial Bank 194,446 16.56 52,825 4.50 76,303 6.50 Tier I capital (to risk-weighted assets) Cass Information Systems, Inc. 247,354 13.84 107,226 6.00 N/A N/A Cass Commercial Bank 194,446 16.56 70,433 6.00 93,911 8.00 Tier I capital (to average assets) Cass Information Systems, Inc. 247,354 10.57 93,625 4.00 N/A N/A Cass Commercial Bank 194,446 13.50 57,620 4.00 72,026 5.00 55 Table of Contents Note 4 Investment Securities Investment securities available-for-sale are recorded at fair value on a recurring basis. The Company’s investment securities available-for-sale at December 31, 2025 and 2024 are measured at fair value using Level 2 valuations. The market evaluation utilizes several sources which include “observable inputs” rather than “significant unobservable inputs” and therefore falls into the Level 2 category. The table below presents the balances of investment securities available-for-sale measured at fair value on a recurring basis. The amortized cost, gross unrealized gains, gross unrealized losses and fair value of debt and equity investment securities are summarized as follows: December 31, 2025 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value State and political subdivisions $ 247,716 $ 3,228 $ ( 10,733 ) $ 240,211 Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 503,599 2,144 ( 27,047 ) 478,696 Corporate bonds 30,895 — ( 1,999 ) 28,896 Asset backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises 23,294 — ( 325 ) 22,969 Total $ 805,504 $ 5,372 $ ( 40,104 ) $ 770,772 December 31, 2024 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value State and political subdivisions $ 188,933 $ 4 $ ( 16,973 ) $ 171,964 Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 267,359 11 ( 34,095 ) 233,275 Corporate bonds 95,841 3 ( 8,058 ) 87,786 Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 35,575 — ( 579 ) 34,996 Total $ 587,708 $ 18 $ ( 59,705 ) $ 528,021 The fair values of securities with unrealized losses are as follows: December 31, 2025 Less than 12 months 12 months or more Total (In thousands) Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses State and political subdivisions $ — $ — $ 139,379 $ 10,733 $ 139,379 $ 10,733 Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 148,111 1,733 155,353 25,314 303,464 27,047 Corporate bonds — — 28,896 1,999 28,896 1,999 Asset backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises — — 22,969 325 22,969 325 Total $ 148,111 $ 1,733 $ 346,597 $ 38,371 $ 494,708 $ 40,104 56 Table of Contents December 31, 2024 Less than 12 months 12 months or more Total (In thousands) Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses State and political subdivisions $ 4,082 $ 8 $ 163,893 $ 16,964 $ 167,975 $ 16,972 Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 85,272 2,086 139,676 32,009 224,948 34,095 Corporate bonds 7,901 99 66,860 7,960 74,761 8,059 Asset backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises — — 30,575 579 30,575 579 Total $ 97,255 $ 2,193 $ 401,004 $ 57,512 $ 498,259 $ 59,705 There were 204 investment securities, or 67.3 %, in an unrealized loss position as of December 31, 2025 compared to 241 investment securities, or 96.0 %, in an unrealized loss position as of December 31, 2024. The unrealized losses at December 31, 2025 were primarily attributable to changes in market interest rates after the investment securities were purchased. The Company does not currently intend to sell, and based on current conditions, the Company does not believe it will be required to sell these available-for-sale investment securities before the recovery of the amortized cost basis, which may be the maturity dates of the investment securities. Therefore, the unrealized losses are recorded in accumulated other comprehensive loss. Of these investment securities, 177 , or 58.4 %, were in an unrealized loss position for greater than 12 months at December 31, 2025. At December 31, 2025 and December 31, 2024, the Company had not recorded an allowance for credit losses on investment securities. The amortized cost and fair value of debt and equity investment securities by contractual maturity are shown in the following table. Expected maturities may differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties. December 31, 2025 (In thousands) Amortized Cost Fair Value Due in 1 year or less $ 6,757 $ 6,755 Due after 1 year through 5 years 73,493 70,979 Due after 5 years through 10 years 160,264 149,204 Due after 10 years 564,990 543,834 Total $ 805,504 $ 770,772 There were no investment securities pledged to secure public deposits or for other purposes at December 31, 2025. Proceeds from sales of investment securities classified as available-for-sale were $ 129.9 million in 2025, $ 60.1 million in 2024, and $ 111.6 million in 2023. Gross realized gains on the sales in 2025, 2024, and 2023 were $ 429,000 , $ 4,000 , and $ 187,000 , respectively. Gross realized losses on the sales in 2025, 2024, and 2023 were $ 4.0 million, $ 49,000 and $ 360,000 , respectively. Note 5 Loans The Company originates commercial, industrial and real estate loans to businesses and faith-based ministries throughout the metropolitan St. Louis, Missouri area, Colorado Springs, Colorado and other selected cities in the United States. The Company does not have any particular concentration of credit in any one economic sector; however, a substantial portion of the commercial and industrial loans is extended to privately-held commercial companies and franchises in these market areas and are generally secured by the assets of the business. The Company also has a substantial portion of real estate 57 Table of Contents loans secured by mortgages that are extended to faith-based ministries in its market area and selected cities in the United States. A summary of loan categories is as follows: December 31, (In thousands) 2025 2024 Commercial and industrial $ 553,080 $ 559,262 Real estate: Commercial: Mortgage 97,567 119,194 Construction 12,943 9,134 Faith-based: Mortgage 362,312 368,881 Construction 35,288 25,518 Other 27 — Total loans $ 1,061,217 $ 1,081,989 The following table presents the aging of loans by loan categories at December 31, 2025: Performing Nonperforming (In thousands) Current 30-59 Days 60-89 Days 90 Days and Over Non- accrual Total Loans Commercial and industrial $ 549,310 $ — $ — $ — $ 3,770 $ 553,080 Real estate Commercial: Mortgage 94,345 — — — 3,222 97,567 Construction 12,943 — — — — 12,943 Faith-based: Mortgage 362,312 — — — — 362,312 Construction 35,288 — — — — 35,288 Other 27 — — — — 27 Total $ 1,054,225 $ — $ — $ — $ 6,992 $ 1,061,217 58 Table of Contents The following table presents the aging of loans by loan categories at December 31, 2024: Performing Nonperforming (In thousands) Current 30-59 Days 60-89 Days 90 Days and Over Non- accrual Total Loans Commercial and industrial $ 559,262 $ — $ — $ — $ — $ 559,262 Real estate Commercial: Mortgage 119,194 — — — — 119,194 Construction 9,134 — — — — 9,134 Faith-based: Mortgage 368,881 — — — — 368,881 Construction 25,518 — — — — 25,518 Total $ 1,081,989 $ — $ — $ — $ — $ 1,081,989 The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of December 31, 2025: (In thousands) Loans Subject to Normal Monitoring (1) Performing Loans Subject to Special Monitoring (2) Nonperforming Loans Subject to Special Monitoring (2) Total Loans Commercial and industrial $ 531,416 $ 17,894 $ 3,770 $ 553,080 Real estate Commercial: Mortgage 81,744 12,601 3,222 97,567 Construction 12,943 — — 12,943 Faith-based: Mortgage 358,691 3,621 — 362,312 Construction 35,288 — — 35,288 Other 27 — — 27 Total $ 1,020,109 $ 34,116 $ 6,992 $ 1,061,217 (1) Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk and have the apparent ability to satisfy their loan obligation. (2) Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a higher level of management attention. 59 Table of Contents The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of December 31, 2024: (In thousands) Loans Subject to Normal Monitoring (1) Performing Loans Subject to Special Monitoring (2) Nonperforming Loans Subject to Special Monitoring (2) Total Loans Commercial and industrial $ 527,690 $ 31,572 $ — $ 559,262 Real estate Commercial: Mortgage 116,063 3,131 — 119,194 Construction 9,134 — — 9,134 Faith-based: Mortgage 352,356 16,525 — 368,881 Construction 25,518 — — 25,518 Total $ 1,030,761 $ 51,228 $ — $ 1,081,989 (1) Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk and have the apparent ability to satisfy their loan obligation. (2) Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a higher level of management attention. Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination thereof, among other things. There were two loans modified during the year ended December 31, 2025 and no loans modified during the year ended December 31, 2024. Both loans modified during 2025 were paid off in full prior to December 31, 2025. There were no modified loans that had a payment default during the years ended December 31, 2025 or 2024 and that had been modified due to the borrower experiencing financial difficulty within the 12 previous months preceding the default. Upon the Company's determination that a modified loan has subsequently been deemed uncollectible, the loan is written off. There were no loans written off during the years ended December 31, 2025 or 2024. The Company had three loans evaluated for expected credit losses on an individual basis as of December 31, 2025 and no loans evaluated for expected credit losses on an individual basis as of December 31, 2024. There were no foreclosed loans recorded as other real estate owned as of December 31, 2025 or 2024. A summary of the ACL by category for the period ended December 31, 2025 is as follows: (In thousands) C&I CRE Faith-based CRE Construction Total Allowance for credit losses on loans: Balance at December 31, 2024 $ 5,897 $ 1,023 $ 6,258 $ 217 $ 13,395 (Release of) provision for credit losses (1) ( 64 ) ( 134 ) 288 112 202 Balance at December 31, 2025 $ 5,833 $ 889 $ 6,546 $ 329 $ 13,597 (1) For the year ended December 31, 2025, there was a provision for credit losses of $ 146,000 for unfunded commitments. 60 Table of Contents A summary of the ACL by category for the period ended December 31, 2024 is as follows: (In thousands) C&I CRE Faith-based CRE Construction Total Allowance for credit losses on loans: Balance at December 31, 2023 $ 5,412 $ 1,093 $ 6,476 $ 108 $ 13,089 Provision for (release of) credit losses (1) 485 ( 70 ) ( 218 ) 109 306 Balance at December 31, 2024 $ 5,897 $ 1,023 $ 6,258 $ 217 $ 13,395 (1) For the year ended December 31, 2024, there was a provision for credit losses of $ 141,000 for unfunded commitments. As of December 31, 2025 and 2024, there were no loans to executive officers or directors, or their affiliates. Note 6 Premises and Equipment A summary of premises and equipment is as follows: December 31, (In thousands) 2025 2024 Land $ 873 $ 873 Buildings 15,315 15,176 Leasehold improvements 1,566 1,444 Furniture, fixtures and equipment 17,242 16,325 Software 49,347 49,073 Total 84,343 82,891 Less accumulated depreciation 54,894 52,315 Total premises and equipment, net $ 29,449 $ 30,576 Total depreciation charged to expense in 2025, 2024 and 2023 amounted to $ 6.0 million, $ 5.0 million, and $ 4.0 million, respectively. Note 7 Acquired Intangible Assets The Company accounts for intangible assets in accordance with ASC 350, Goodwill and Other Intangible Assets , which requires that intangibles with indefinite useful lives be tested annually for impairment, or when management deems there is a triggering event, and those with finite useful lives be amortized over their useful lives. 61 Table of Contents Details of the Company’s intangible assets are as follows: December 31, 2025 December 31, 2024 (In thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortizing intangible assets: Customer lists $ 6,215 $ ( 5,003 ) $ 6,314 $ ( 4,729 ) Software 5,512 ( 3,244 ) 5,412 ( 2,358 ) Trade Name 373 ( 125 ) 373 ( 98 ) Indefinite-lived intangible assets: Goodwill 16,164 — 16,333 — Total intangible assets $ 28,264 $ ( 8,372 ) $ 28,432 $ ( 7,185 ) Customer lists are amortized over 5 years to 10 years, software over 3 years to 7 years, and trade name over 10 years to 20 years. Amortization of intangible assets amounted to $ 1.2 million and $ 692,000 for the years ended December 31, 2025, and 2024, respectively. Estimated future amortization of intangibles is $ 1.0 million in 2026, $ 730,000 in 2027 and 2028, $ 699,000 in 2029, and $ 197,000 in 2030. Note 8 Interest-Bearing Deposits I nterest-bearing deposits consist of the following: December 31, (In thousands) 2025 2024 Interest-bearing demand deposits $ 583,375 $ 628,328 Savings deposits 5,822 6,894 Time deposits: Less than $100 2,702 5,376 $100 to less than $250 69,534 54,411 $250 or more (1) 25,166 21,677 Total $ 686,599 $ 716,686 Weighted average interest rate 1.73 % 2.51 % (1) The scheduled maturities of time deposits not covered by deposit insurance consist of $ 24.4 million within one year and $ 778,000 within one to three years. Interest expense consists of the following: December 31, (In thousands) 2025 2024 2023 Interest-bearing demand deposits $ 13,153 $ 17,029 $ 14,056 Savings deposits 92 116 113 Time deposits: Less than $100 85 226 153 $100 to less than $250 2,175 2,290 1,411 $250 or more 813 597 417 Total $ 16,318 $ 20,258 $ 16,150 62 Table of Contents The scheduled maturities of time deposits are summarized as follows: December 31, 2025 2024 (In thousands) Amount Percent of Total Amount Percent of Total Due within: One year $ 95,778 98.3 % $ 75,628 92.7 % Two years 1,547 1.6 % 5,749 7.1 % Three years 10 — % 26 0.1 % Four years 63 0.1 % — — % Five years 4 — % 61 0.1 % Total $ 97,402 100.0 % $ 81,464 100.0 % Note 9 Unused Available Lines of Credit As of December 31, 2025, the Bank had unsecured lines of credit at six correspondent banks to purchase federal funds up to a maximum of $ 83.0 million in aggregate. As of December 31, 2025, the Bank had secured lines of credit with the Federal Home Loan Bank of $ 239.9 million collateralized by commercial mortgage loans. As of December 31, 2025, the Company had lines of credit from three banks up to a maximum of $ 225.0 million in aggregate collateralized by state and political subdivision investment securities. There were no amounts outstanding as of December 31, 2025 and 2024 under any of the lines of credit. Note 10 Common Stock and Earnings per Share The table below shows activity in the outstanding shares of the Company’s common stock during 2025. 2025 Shares outstanding at January 1 13,504,104 Issuance of common stock: Employee restricted stock units vested 16,008 Performance-based stock vested 55,348 Employee restricted stock surrendered for tax obligations ( 37,925 ) Shares repurchased ( 617,415 ) Shares forfeited ( 2,483 ) Shares outstanding at December 31 12,917,637 Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the sum of the weighted average number of common shares outstanding and the weighted average number of potential common shares outstanding. 63 Table of Contents The calculations of basic and diluted earnings per share are as follows: December 31, (In thousands except share and per share data) 2025 2024 2023 Basic: Net income from continuing operations $ 31,112 $ 18,558 $ 27,890 Net income from discontinued operations 4,004 610 2,169 Net income $ 35,116 $ 19,168 $ 30,059 Weighted-average common shares outstanding 13,181,884 13,501,930 13,530,005 Basic earnings per share from continuing operations $ 2.36 $ 1.37 $ 2.06 Basic earnings per share from discontinued operations $ 0.30 $ 0.05 $ 0.16 Basic earnings per share $ 2.66 $ 1.42 $ 2.22 Diluted: Net income from continuing operations $ 31,112 $ 18,558 $ 27,890 Net income from discontinued operations 4,004 610 2,169 Net income $ 35,116 $ 19,168 $ 30,059 Weighted-average common shares outstanding 13,181,884 13,501,930 13,530,005 Effect of dilutive restricted stock and stock appreciation rights 281,415 275,641 286,011 Weighted-average common shares outstanding assuming dilution 13,463,299 13,777,571 13,816,016 Diluted earnings per share from continuing operations $ 2.31 $ 1.35 $ 2.02 Diluted earnings per share from discontinued operations $ 0.30 $ 0.04 $ 0.16 Diluted earnings per share $ 2.61 $ 1.39 $ 2.18 Note 11 Employee Benefit Plans Defined Benefit Plan The Company maintained a noncontributory defined-benefit pension plan (the “Plan”), covering eligible employees. The Plan was closed to new participants effective December 31, 2016, and Plan benefits were frozen as of February 28, 2021. The Company terminated the Plan during 2024. 64 Table of Contents A summary of the activity in the Plan’s projected benefit obligation, assets, funded status and amounts recognized in the Company’s consolidated balance sheets is as follows: (In thousands) 2025 2024 Projected benefit obligation: Balance, January 1 $ 784 $ 87,127 Interest cost — 4,280 Actuarial (gain) loss — ( 6,047 ) Benefits paid ( 784 ) ( 84,576 ) Balance, December 31 $ — $ 784 Plan assets: Fair value, January 1 $ 2,129 $ 86,754 Actual investment return 60 996 Expenses paid from plan assets ( 209 ) ( 1,045 ) Transfer to defined contributions plan ( 1,196 ) — Benefits paid ( 784 ) ( 84,576 ) Fair value, December 31 $ — $ 2,129 Funded status: Accrued pension asset (liability) $ — $ 1,345 For 2024, the projected benefit obligation represents actual benefit payments made during the first quarter of 2025. During the fourth quarter of 2024, the plan liabilities were settled with lump sum payments and the purchase of annuity contracts. The remaining projected benefit obligation at December 31, 2024 represented benefit payments to be made to retirees prior to the administration of the Plan being taken over by the insurance company that assumed the annuity contracts in a sale from the Plan. For 2024 and 2023, the Plan’s expected benefit cash flows were discounted using the FTSE Above Median Double-A Curve. For 2023, the Pri-2012 Mortality Table and MP-2022 Mortality Improvement Scale were used. 2025 2024 2023 Weighted average discount rate N/A 5.60 % 5.05 % Rate of increase in compensation levels N/A N/A N/A The accumulated benefit obligation was $ 0 and $ 784,000 as of December 31, 2025 and 2024, respectively. The Company made no contributions during 2025 or 2024 to the Plan. The Plan’s net periodic pension cost included the following components: For the Year Ended December 31, (In thousands) 2025 2024 2023 Interest cost on projected benefit obligations — 4,280 4,314 Expected return on plan assets — ( 3,566 ) ( 3,735 ) Net amortization and deferral — 3,458 154 Net periodic pension cost $ — $ 4,172 $ 733 65 Table of Contents The following represent the major assumptions used to determine the net periodic pension cost of the Plan: 2025 2024 2023 Weighted average discount rate N/A 5.05 % 5.25 % Rate of increase in compensation levels N/A N/A N/A Expected long-term rate of return on assets N/A 6.00 % 6.00 % As of December 31, 2024, the Plan assets of $2.1 million were fully invested in cash. Supplemental Executive Retirement Plan The Company also has an unfunded supplemental executive retirement plan (“SERP”) which covers key executives of the Company whose benefits are limited by the Internal Revenue Service under the Company’s qualified retirement plan. The SERP is a noncontributory plan in which the Company’s subsidiaries make accruals designed to fund normal service costs on a current basis using the same method and criteria as the Plan. A summary of the activity in the SERP’s projected benefit obligation and amounts recognized in the Company’s consolidated balance sheets is as follows: December 31, (In thousands) 2025 2024 Benefit obligation: Balance, January 1 $ 8,812 $ 9,501 Interest cost 463 450 Benefits paid ( 656 ) ( 382 ) Actuarial loss (gain) 176 ( 757 ) Balance, December 31 $ 8,795 $ 8,812 The following represent the major assumptions used to determine the projected benefit obligation of the SERP. For 2025, 2024 and 2023, the SERP’s expected benefit cash flows were discounted using the FTSE Above Median Double-A Curve. 2025 2024 2023 Weighted average discount rate 5.15 % 5.50 % 4.95 % Rate of increase in compensation levels N/A N/A N/A The accumulated benefit obligation was $ 8.8 million as of December 31, 2025 and 2024, respectively. Since this is an unfunded plan, there are no plan assets. Benefits paid were $ 656,000 in 2025, $ 382,000 in 2024, and $ 400,000 in 2023. Expected future benefits payable by the Company over the next ten years are as follows: Amount 2026 $ 792,000 2027 789,000 2028 785,000 2029 779,000 2030 771,000 2029-2033 $ 3,629,000 66 Table of Contents Net periodic benefit cost related to the SERP included the following components: For the Year Ended December 31, (In thousands) 2025 2024 2023 Service cost – benefits earned during the year $ — $ — $ — Interest cost on projected benefit obligations 463 450 472 Net amortization and deferral — — — Net periodic pension cost $ 463 $ 450 $ 472 The pretax amounts in accumulated other comprehensive loss for the SERP as of December 31, 2025 and 2024 were a net actuarial gain of $ 855,000 and $ 1.0 million, respectively. The estimated pretax prior service cost and net actuarial gain in accumulated other comprehensive loss at December 31, 2025 expected to be recognized as components of net periodic benefit cost in 2026 for the SERP is $ 0 . The Company also maintains a noncontributory profit sharing program, which covers most of its employees. Employer contributions are calculated based upon formulas which relate to current operating results and other factors. Profit sharing expense recognized in personnel expense in the consolidated statements of income in 2025, 2024, and 2023 was $ 6.3 million, $ 4.5 million, and $ 5.8 million, respectively. The Company also sponsors a defined contribution 401(k) plan to provide additional retirement benefits to substantially all employees. Contributions under the 401(k) plan for 2025, 2024 and 2023 were $ 3.6 million, $ 3.6 million, and $ 4.6 million, respectively. 67 Table of Contents Note 12 Share-based Compensation Share-based compensation awards prior to April 17, 2023 were issued under the Company's Amended and Restated Omnibus Stock and Performance Compensation Plan (the "Prior Plan"). On April 18, 2023, shareholders approved the 2023 Omnibus Stock and Performance Compensation Plan (the "2023 Omnibus Plan") to replace the Prior Plan. The 2023 Omnibus Plan permits the issuance of up to 1.0 million shares of the Company’s common stock in the form of stock options, SARs, restricted stock, restricted stock units, phantom stock, and performance awards. Restricted Stock Restricted shares granted to Company employees are amortized to expense over the three-year cliff vesting period. Restricted shares granted to members of the Board of Directors are amortized to expense over a one-year service period, with the exception of those shares granted in lieu of cash payments for retainer fees which are expensed in the period earned. Changes in restricted shares outstanding for the year ended December 31, 2025 were as follows: Shares Weighted Average Grant Date Fair Value Balance at December 31, 2024 254,808 $ 42.87 Granted 66,779 40.94 Vested ( 43,526 ) 39.62 Forfeited ( 4,518 ) 45.01 Balance at December 31, 2025 273,543 $ 42.88 During 2024 and 2023, 57,502 and 57,837 shares, respectively, were granted with weighted average per share market values at date of grant of $ 44.01 in 2024 and $ 44.61 in 2023. The fair value of such shares are based on the market price on the date of grant. Amortization of restricted stock bonus awards totaled $ 2.4 million for 2025, $ 2.1 million for 2024 and $ 2.1 million for 2023. As of December 31, 2025, the total unrecognized compensation expense related to non-vested restricted stock awards was $ 1.6 million, and the related weighted average period over which it is expected to be recognized is approximately 0.97 years. The total fair value of shares vested during the years ended December 2025, 2024, and 2023 was $ 1.7 million, $ 1.6 million, and $ 1.3 million, respectively. Performance-Based Restricted Stock The Company has granted three-year PBRS awards which are contingent upon the Company’s achievement of pre-established financial goals over a three-year cliff vest period. The number of shares issued ranges from 0 % to 150 % of the target opportunity based on the actual achievement of financial goals for the three-year performance period. The following is a summary of the activity of the PBRS, based on 100% of target value, for the year ended December 31, 2025: Shares Weighted Average Grant Date Fair Value Balance at December 31, 2024 158,428 $ 43.87 Granted 56,339 41.45 Vested ( 55,848 ) 39.58 Forfeited ( 7,139 ) 44.53 Balance at December 31, 2025 151,780 $ 44.52 68 Table of Contents The PBRS that vested during the year ended December 31, 2025 achieved weighted average financial goals of 99.1 % of target, resulting in the issuance of 55,348 shares of common stock. The PBRS that vested during the year ended December 31, 2024 achieved weighted average financial goals of 135.4 % of target, resulting in the issuance of 68,834 shares of common stock. The outstanding PBRS at December 31, 2025 will vest at scheduled vesting dates and the actual number of shares of common stock issued will range from 0 % to 150 % of the target opportunity based on the actual achievement of financial goals for the respective three-year performance period. Note 13 Other Operating Expense Details of other operating expense are as follows: For the Years Ended December 31, (In thousands) 2025 2024 2023 Promotional expense $ 3,072 $ 2,774 $ 2,608 Outside service fees 9,531 8,761 8,471 Data processing services 5,906 5,879 6,534 Other 11,560 11,656 10,118 Total other operating expense $ 30,069 $ 29,070 $ 27,731 Note 14 Income Taxes The components of income tax expense (benefit) are as follows: For the Years Ended December 31, (In thousands) 2025 2024 2023 Current: Federal $ 140 $ 5,162 $ 5,964 State 240 612 1,087 Foreign 71 160 ( 193 ) Deferred: Federal 6,244 ( 891 ) ( 242 ) State 952 ( 156 ) ( 42 ) Total income tax expense $ 7,647 $ 4,887 $ 6,574 Income tax expense (benefit) broken out between Federal, state and foreign is as follows: For the Years Ended December 31, (In thousands) 2025 2024 2023 Federal $ 6,384 $ 4,271 $ 5,722 State 1,192 456 1,045 Foreign 71 160 ( 193 ) Total income tax expense $ 7,647 $ 4,887 $ 6,574 69 Table of Contents The Company adopted ASU 2023-09 on a prospective basis on January 1, 2025. The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the expected income tax expense (benefit) and effective tax rate, computed by applying the effective statutory rate of 21% for the year ended December 31, 2025 as follows: For the Year Ended December 31, 2025 (In thousands) Amount Percent U.S federal statutory tax rate $ 8,112 21.0 % State and local income taxes, net of federal income tax effect (1) 942 2.4 % Foreign tax effects 71 0.2 % Tax credits ( 431 ) ( 1.1 ) % Nontaxable or nondeductible items: Tax-exempt income ( 1,246 ) ( 3.3 ) % Share-based compensation adjustment 160 0.4 % Other, net 39 0.1 % Total income tax expense $ 7,647 19.7 % (1) State taxes in Missouri and California made up the majority (greater than 50%) of the tax effect in this category. The following table presents the required disclosures prior to the Company's adoption of ASU 2023-09 and reconciles the expected income tax expense (benefit), computed by applying the effective federal statutory rate of 21% for each year to income before income tax expense is as follows: For the Years Ended (In thousands) 2024 2023 Expected income tax expense $ 4,898 $ 7,278 (Reductions) increases resulting from: Tax-exempt income ( 1,045 ) ( 1,104 ) State taxes, net of federal benefit 355 801 Share-based compensation adjustment 316 298 Early surrender of bank-owned life insurance 279 — Federal tax credits ( 397 ) ( 643 ) Other, net 481 ( 56 ) Total income tax expense $ 4,887 $ 6,574 Income tax expense in 2025 totaled $7.6 million compared to $4.9 million in 2024 and $6.6 million in 2023. When measured as a percent of pre-tax income, the Company’s effective tax rate was 19.7 % in 2025, 20.8 % in 2024, and 19.1 % in 2023. 70 Table of Contents The tax effects of temporary differences which give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below: December 31, (In thousands) 2025 2024 Deferred tax assets: Allowance for credit losses $ 3,236 $ 3,188 Supplemental executive retirement plan accrual 2,286 2,345 Stock compensation 2,819 2,623 Unrealized loss on investment securities available-for-sale (1) 8,266 14,205 Research and development expenses — 760 Lease liability 1,073 1,774 Other 497 718 Total deferred tax assets $ 18,177 $ 25,613 Deferred tax liabilities: Premises and equipment $ ( 988 ) $ ( 986 ) ASC 715 supplemental executive retirement plan asset ( 249 ) ( 249 ) Research and development expenses ( 4,711 ) — Intangible assets ( 968 ) ( 1,900 ) Right of use asset ( 1,038 ) ( 1,677 ) Prepaid expenses ( 991 ) ( 936 ) Other ( 541 ) ( 391 ) Total deferred tax liabilities $ ( 9,486 ) $ ( 6,139 ) Net deferred tax assets $ 8,691 $ 19,474 (1) The deferred tax asset associated with the unrealized losses on investment securities is mainly a result of changes in interest rates, and the unrealized losses are considered to be temporary as the fair value is expected to recover as the investment securities approach their respective maturity dates. The issuers of the investment securities are of high credit quality and all principal amounts are expected to be paid when the investment securities mature. The Company does not intend to sell and it is more likely than not that the Company will not be required to sell the securities prior to their anticipated recovery. A valuation allowance would be provided on deferred tax assets when it is more likely than not that some portion of the assets will not be realized. The Company has not established a valuation allowance at December 31, 2025 or 2024, due to management’s belief that it is more likely than not that the deferred tax asset is realizable. The reconciliation of the beginning unrecognized tax benefits balance to the ending balance is presented in the following table: (In thousands) 2025 2024 2023 Balance at January 1 $ 1,257 $ 1,397 $ 1,252 Changes in unrecognized tax benefits as a result of tax positions taken during a prior year ( 52 ) ( 151 ) 99 Changes in unrecognized tax benefits as a result of tax position taken during the current year 181 262 300 Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations ( 195 ) ( 251 ) ( 254 ) Balance at December 31 $ 1,191 $ 1,257 $ 1,397 At December 31, 2025, 2024 and 2023, the balances of the Company’s unrecognized tax benefits which would, if recognized, affect the Company’s effective tax rate were $ 1.2 million, $ 1.1 million and $ 1.3 million, respectively. These amounts are net of the offsetting expense from other taxing jurisdictions. 71 Table of Contents As of December 31, 2025, 2024 and 2023, the Company had $ 183,000 , $ 70,000 and $ 117,000 , respectively, in accrued interest related to unrecognized tax benefits. The Company is subject to income tax in the U.S. federal jurisdiction, numerous state jurisdictions, and a foreign jurisdiction. The Company’s federal income tax returns for tax years 2022, 2023 and 2024 remain subject to examination by the Internal Revenue Service. In addition, the Company is subject to state tax examinations for the tax years 2021 through 2024. The Company adopted ASU 2023-09 on a prospective basis on January 1, 2025. The following table represents net income taxes paid (refunded), disaggregated by federal, state, and foreign taxes, including income taxes paid (refunded) in individual jurisdictions that are equal to or greater than 5% of total income taxes paid: For the Year Ended December 31, (In thousands) 2025 U.S. federal income taxes paid $ 4,103 State income taxes paid California income taxes paid 290 Other state income taxes paid 645 Total state income taxes paid 935 Total foreign income taxes paid 98 Total income taxes paid $ 5,136 Note 15 Disclosures about Fair Value of Financial Instruments Following is a summary of the carrying amounts and fair values of the Company’s financial instruments: December 31, 2025 2024 (In thousands) Carrying Amount Fair Value Carrying Amount Fair Value Balance sheet assets: Cash and cash equivalents $ 392,268 $ 392,268 $ 349,728 $ 349,728 Investment securities 770,772 770,772 528,021 528,021 Loans, net 1,047,620 1,044,045 1,068,594 1,046,406 Accrued interest receivable 9,170 9,170 7,979 7,979 Total $ 2,219,830 $ 2,216,255 $ 1,954,322 $ 1,932,134 Balance sheet liabilities: Deposits $ 1,200,033 $ 1,200,033 $ 967,916 $ 967,916 Accounts and drafts payable 1,124,858 1,124,858 1,129,610 1,129,610 Accrued interest payable 606 606 666 666 Total $ 2,325,497 $ 2,325,497 $ 2,098,192 $ 2,098,192 The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Cash and Cash Equivalents The carrying amount approximates fair value. Investment Securities The fair value is measured on a recurring basis using Level 2 valuations. Refer to Note 4 - Investment Securities, for fair value and unrealized gains and losses by investment type. 72 Table of Contents Loans The fair value is estimated using present values of future cash flows discounted at risk-adjusted interest rates for each loan category designated by management and is therefore a Level 3 valuation. Management believes that the risk factor embedded in the interest rates along with the allowance for credit losses approximates a fair valuation. Accrued Interest Receivable The carrying amount approximates fair value. Deposits The fair value of demand deposits, savings deposits and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities and therefore, is a Level 2 valuation. The fair value estimates above do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market or the benefit derived from the customer relationship inherent in existing deposits. Accounts and Drafts Payable The carrying amount approximates fair value. Accrued Interest The carrying amount approximates fair value. Limitations Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets or liabilities that are not considered financial assets or liabilities include premises and equipment and the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market (core deposit intangible). In addition, tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates. Note 16 Commitments and Contingencies The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, commercial letters of credit and standby letters of credit. The Company’s maximum potential exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, commercial letters of credit and standby letters of credit is represented by the contractual amounts of those instruments. At December 31, 2025, an allowance for unfunded commitments of $ 419,000 had been recorded, as compared to $ 273,000 at December 31, 2024. See Note 1 "Summary of Significant Accounting Policies" for information related to CECL. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commercial and standby letters of credit are commitments issued by the Company to guarantee the performance of a customer to a third party. These off-balance sheet financial instruments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The approximate remaining terms of commercial and standby letters of credit range from less than one year to five years . Since these financial instruments may expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. Commitments to extend credit and letters of credit are subject to the same underwriting standards as those financial instruments included on the consolidated balance sheets. The Company evaluates each customer’s credit-worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of the credit, is based on management’s credit evaluation of the borrower. Collateral held varies, but is generally accounts receivable, inventory, residential or income-producing commercial property or equipment. In the event of nonperformance, the Company may obtain and liquidate the collateral to recover amounts paid under its guarantees on these financial instruments. The following table shows commitments to extend credit, standby letters of credit and commercial letters: December 31, (In thousands) 2025 2024 Commitments to extend credit $ 172,728 $ 247,362 Standby letters of credit 12,794 12,005 Commercial letters of credit 782 400 73 Table of Contents The fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, the likelihood of the counterparties drawing on such financial instruments and the present credit worthiness of such counterparties. The Company believes such commitments have been made at terms which are competitive in the markets in which it operates. On March 19, 2024, the Company filed a claim against Rubicon Technologies, Inc. ("Rubicon") for failed reimbursement of invoices that were processed and paid by the Company on Rubicon's behalf and unpaid fees for Company services that were due for invoice management services and bill pay services, together with interest and penalties related to the foregoing amounts. On April 22, 2024, Rubicon filed a counterclaim against the Company for failure to perform its obligations under the Master Services Agreement between the Company and Rubicon. The Company recorded a write-off to bad debt expense of $7.8 million for the year ended December 31, 2024 related to this matter. On March 28, 2025, the Company and Rubicon, in order to fully resolve the above matters, signed a Settlement Agreement and Mutual Release whereby Rubicon made an initial payment to the Company of $2.0 million. The Company recorded a bad debt recovery of $2.0 million in the consolidated statement of income for the year ended December 31, 2025 upon receipt of the initial payment of $2.0 million. Rubicon also agreed to a fully amortizing, interest-bearing Promissory Note of $5.0 million, with annual payments, maturing July 1, 2029. The Company will record any future payments received in accordance with the Settlement Agreement and Mutual Release as a bad debt recovery when cash is received. Note 17 Revenue from Contracts with Customers Revenue is recognized as the obligation to the customer is satisfied. The Company’s revenue from contracts with clients is as follows: Processing fees – The Company earns fees on a per-item or monthly basis for the invoice processing services rendered on behalf of customers. Per-item fees are recognized at the point in time when the performance obligation is satisfied. Monthly fees are earned over the course of a month, representing the period over which the performance obligation is satisfied. The contracts have no significant variable consideration or financing components. Financial fees – The Company earns fees on a transaction level basis for invoice payment services when making customer payments. Fees are recognized at the point in time when the payment transactions are made, which is when the performance obligation is satisfied. The contracts have no significant impact of variable consideration and no significant financing components. Bank service fees – Revenue from service fees consists of service charges and fees on deposit accounts under depository agreements with customers to provide access to deposited funds. Service charges on deposit accounts are transaction-based fees that are recognized at the point in time when the performance obligation is satisfied. The contracts have no significant impact of variable consideration and no significant financing components. The following table presents non-interest income, segregated by revenue streams in-scope and out-of-scope for the years ended December 31, 2025, 2024 and 2023. For the Years Ended December 31, (In thousands) 2025 2024 2023 Fee revenue and other income In-scope of ASC 606 Processing fees $ 66,129 $ 66,061 $ 59,670 Financial fees 40,398 42,584 45,339 Information services payment and processing revenue 106,527 108,645 105,009 Bank service fees 1,470 1,284 1,063 Fee revenue (in-scope of ASC 606) 107,997 109,929 106,072 Other income (out-of-scope of ASC 606) 5,395 3,963 4,026 Loss on sale of investment securities ( 3,534 ) ( 45 ) ( 173 ) Total fee revenue and other income $ 109,858 $ 113,847 $ 109,925 74 Table of Contents Note 18 Industry Segment Information The services provided by the Company are classified into two reportable segments: Information Services and Banking Services. Each of these segments provides distinct services that are marketed through different channels and are consistent with the presentation of financial information to the chief operating decision maker to evaluate segment performance, develop strategy, and allocate resources. They are managed separately due to their unique service and processing requirements. The Company's chief operating decision maker is the President and Chief Executive Officer of Cass Information Systems' Inc. The Information Services segment provides transportation, energy, telecommunication, and environmental invoice processing and payment services to large corporations. In addition, this segment provides church management software and on-line generosity services primarily for faith-based ministries. As discussed in Note 2 to the consolidated financial statements, the Company applied discontinued operations accounting to the assets and liabilities being sold related to the TEM Business Unit as of and for the years ended December 31, 2025, 2024 and 2023, as applicable. The TEM Business Unit is included in the Information Services operating segment. The Banking Services segment provides banking services primarily to privately held businesses, franchise restaurants and faith-based ministries, as well as supporting the banking needs of the Information Services segment. The Company’s accounting policies for segments are the same as those described in Note 1 of this report. Management and the chief operating decision maker evaluate segment performance based on pre-tax income after allocations for corporate expenses. Transactions between segments are accounted for at what management believes to be fair value. Substantially all revenue originates from, and all long-lived assets are located within the United States, and no revenue from any customer of any segment exceeds 10% of the Company’s consolidated revenue. Funding sources represent average balances and deposits generated by Information Services and Banking Services and there is no allocation methodology used. Banking Services interest income is determined by actual interest income on loans minus actual interest expense paid on deposits plus/minus an allocation for interest income or expense dependent on the remaining available liquidity of the segment. Information Services interest income is determined by multiplying available liquidity by actual yields on short-term investments and investment securities. Any difference between total segment interest income and overall total Company interest income is included in Corporate, Eliminations, and Other. 75 Table of Contents Summarized information about the Company’s operations in each industry segment for the years ended December 31, 2025, 2024 and 2023 is as follows: (In thousands) Information Services Banking Services Corporate, Eliminations and Other Total 2025 Fee revenue and other income $ 108,348 $ 2,730 $ 2,314 $ 113,392 Loss on sale of investment securities — — ( 3,534 ) ( 3,534 ) Interest income 47,226 65,707 ( 15,367 ) 97,566 Interest expense 1,059 30,288 ( 15,021 ) 16,326 Provision for credit losses — 348 — 348 Total net revenue 154,515 37,801 ( 1,566 ) 190,750 Personnel expenses 97,558 12,508 — 110,066 Occupancy 2,029 738 — 2,767 Equipment 8,880 1,037 — 9,917 Bad debt recovery ( 2,000 ) — — ( 2,000 ) Intersegment expense (income) 3,472 ( 3,472 ) — — Other operating expense 23,135 8,106 — 31,241 Total operating expense 133,074 18,917 — 151,991 Pretax income from continuing operations 21,441 18,884 ( 1,566 ) 38,759 Pretax income from discontinued operations 5,314 — — 5,314 Goodwill 16,028 136 — 16,164 Other intangible assets, net 3,728 — — 3,728 Total assets 1,703,875 1,149,731 ( 247,582 ) 2,606,024 Average funding sources $ 1,396,388 $ 769,141 $ — $ 2,165,529 76 Table of Contents (In thousands) Information Services Banking Services Corporate, Eliminations and Other Total 2024 Fee revenue and other income $ 109,779 $ 2,643 $ 1,470 $ 113,892 Loss on sale of investment securities — — ( 45 ) $ ( 45 ) Interest income 40,316 59,568 ( 11,839 ) $ 88,045 Interest expense 1,540 33,496 ( 14,778 ) 20,258 Provision for credit losses — 447 — 447 Total net revenue 148,555 28,268 4,364 181,187 Personnel expenses 95,969 13,368 — 109,337 Occupancy 2,004 691 — 2,695 Equipment 6,762 1,339 — 8,101 Bad debt expense 7,847 — — 7,847 Intersegment expense (income) 3,896 ( 3,896 ) — — Other operating expense 20,883 8,879 — 29,762 Total operating expense 137,361 20,381 — 157,742 Pretax income from continuing operations 11,194 7,887 4,364 23,445 Pretax income from discontinued operations 773 — — 773 Goodwill 16,197 136 — 16,333 Other intangible assets, net 4,914 — — 4,914 Total assets 1,720,321 1,143,548 ( 468,788 ) 2,395,081 Average funding sources $ 1,276,335 $ 782,714 $ — $ 2,059,049 77 Table of Contents (In thousands) Information Services Banking Services Corporate, Eliminations and Other Total 2023 Fee revenue and other income $ 106,224 $ 2,713 $ 1,161 $ 110,098 Loss on sale of investment securities — — ( 173 ) ( 173 ) Interest income 39,899 54,696 ( 11,835 ) 82,760 Interest expense 1,191 28,029 ( 12,954 ) 16,266 Release of credit losses — ( 550 ) — ( 550 ) Total net revenue 144,932 29,930 2,107 176,969 Personnel expenses 92,480 11,908 — 104,388 Occupancy 2,104 695 — 2,799 Equipment 6,048 847 — 6,895 Intersegment expense (income) 4,270 ( 4,270 ) — — Other operating expense 20,005 8,418 — 28,423 Total operating expense 124,907 17,598 — 142,505 Pretax income from continuing operations 20,025 12,332 2,107 34,464 Pretax income from discontinued operations 2,893 — — 2,893 Goodwill 12,168 136 — 12,304 Other intangible assets, net 3,192 — — 3,192 Total assets 1,586,388 1,103,173 ( 210,939 ) 2,478,622 Average funding sources $ 1,333,997 $ 810,903 $ — $ 2,144,900 Intersegment income (expense) primarily relates to payment processing fees paid by the Information Services segment to the Banking services segment. The Corporate elimination for total assets and interest income and interest expense primarily relates to allocated funds and related interest depending on funding needs of the operating segments. Note 19 Leases The Company leases certain premises under operating leases. As of December 31, 2025, the Company had lease liabilities of $ 4.5 million and right-of-use assets of $ 4.4 million. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. Included in occupancy expense on the consolidated statements of income for 2025 was operating lease cost of $ 855,000 , short-term lease cost of $ 203,000 , and there was no variable lease cost. The Company paid cash of $ 826,000 for operating lease amounts included in the measurement of lease liabilities for the year ended December 31, 2025. No right-of-use assets were obtained in exchange for lease liabilities during the year ended December 31, 2025. For the year ended December 31, 2025, the weighted average remaining lease term for the operating leases was 6.1 years and the weighted average discount rate used in the measurement of operating lease liabilities was 2.75 %. Certain of the Company’s leases contain options to renew the lease; however, these renewal options are not included in the calculation of the lease liabilities as they are not reasonably certain to be exercised. 78 Table of Contents A maturity analysis of operating lease liabilities and undiscounted cash flows as of December 31, 2025 is as follows: (In thousands) December 31, 2025 Lease payments due Less than 1 year $ 826 1-2 years 821 2-3 years 769 3-4 years 714 4-5 years 726 Over 5 years 1,048 Total undiscounted cash flows 4,904 Discount on cash flows 395 Total lease liability $ 4,509 There were no sale and leaseback transactions, leveraged leases, or lease transactions with related parties during the year ended December 31, 2025. At December 31, 2025, the Company did not have any leases that had not yet commenced. Note 20 Subsequent Events In accordance with ASC 855, Subsequent Events , the Company has evaluated subsequent events after the consolidated balance sheet date of December 31, 2025, and there were no other events identified that would require additional disclosures to prevent the Company’s consolidated financial statements from being misleading. 79 Table of Contents Note 21 Condensed Financial Information of Parent Company Following are the condensed balance sheets of the Company (parent company only) and the related condensed statements of income and cash flows. Condensed Balance Sheets December 31, (In thousands) 2025 2024 Assets Cash and due from banks $ 16,302 $ 242,693 Short-term investments 22,507 50,410 Investment securities available-for-sale, at fair value 708,710 428,422 Loans, net 47,236 53,841 Payments in advance of funding 164,514 208,530 Investments in subsidiaries 206,012 194,102 Premises and equipment, net 29,086 30,311 Investments in bank-owned life insurance 52,195 50,325 Goodwill 16,027 16,197 Other intangible assets, net 3,728 4,914 Accounts and drafts receivable from customers 69,425 55,906 Other assets 41,955 51,169 Assets from discontinued operations $ — $ 14,413 Total assets $ 1,377,697 $ 1,401,233 Liabilities and Shareholders’ Equity Liabilities: Accounts and drafts payable $ 1,116,251 $ 1,123,995 Other liabilities 18,448 25,894 Liabilities from discontinued operations — 22,314 Total liabilities 1,134,699 1,172,203 Total shareholders’ equity 242,998 229,030 Total liabilities and shareholders’ equity $ 1,377,697 $ 1,401,233 80 Table of Contents Condensed Statements of Income For the Years Ended December 31, (In thousands) 2025 2024 2023 Equity in undistributed income of subsidiaries $ 9,817 $ 2,349 $ 19,281 Dividends received from subsidiaries 20,000 20,000 7,500 Income from subsidiaries – management fees 4,285 4,304 4,230 Processing fees 63,897 64,492 59,382 Financial fees 39,038 41,252 43,790 Other 1,830 2,991 1,745 Net interest income after provision for (release of) credit losses 27,299 20,466 19,287 Total revenue 166,166 155,854 155,215 Expenses: Salaries and employee benefits 94,878 92,514 90,809 Other expenses 41,692 47,465 37,095 Total expenses 136,570 139,979 127,904 Income from continuing operations, before income tax expense 29,596 15,875 27,311 Income tax benefit ( 1,516 ) ( 2,683 ) ( 579 ) Net income from continuing operations $ 31,112 $ 18,558 $ 27,890 Income from discontinued operations, net of tax $ 4,004 $ 610 $ 2,169 Net income $ 35,116 $ 19,168 $ 30,059 81 Table of Contents Condensed Statements of Cash Flows For the Years Ended December 31, (In thousands) 2025 2024 2023 Cash flows from operating activities: Net income $ 35,116 $ 19,168 $ 30,059 Less: net income from discontinued operations 4,004 610 2,169 Net income from continuing operations 31,112 18,558 27,890 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed income of subsidiaries ( 9,817 ) ( 2,349 ) ( 19,281 ) Net change in other assets 2,100 ( 7,999 ) ( 3,907 ) Net change in other liabilities ( 7,447 ) 2,143 ( 2,449 ) Share-based compensation expense 4,186 3,052 4,007 Other, net 10,418 12,485 9,958 Net cash provided by operating activities - continuing operations 30,552 25,890 16,218 Net cash (used in) provided by operating activities - discontinued operations ( 1,371 ) 2,206 1,551 Net cash provided by operating activities 29,181 28,096 17,769 Cash flows from investing activities: Proceeds from sales of investment securities available-for-sale 105,870 33,130 86,722 Proceeds from maturities of investment securities available-for-sale 67,591 49,712 23,032 Purchases of investment securities available-for-sale ( 435,237 ) ( 119,744 ) ( 15,332 ) Net decrease in loans 6,605 16,992 3,977 Proceeds from sale of TEM business 18,000 — — Net decrease (increase) in payments in advance of funding 44,016 ( 9,669 ) 94,914 Purchases of premises and equipment, net ( 5,494 ) ( 8,469 ) ( 11,876 ) Asset acquisition — ( 2,954 ) — Net cash (used in) provided by investing activities - continuing operations ( 198,649 ) ( 41,002 ) 181,437 Net cash used in investing activities - discontinued operations ( 99 ) ( 817 ) ( 2,386 ) Net cash (used in) provided by investing activities ( 198,748 ) ( 41,819 ) 179,051 Cash flows from financing activities: Net (increase) decrease in accounts and drafts receivable from customers ( 13,519 ) 54,746 ( 14,872 ) Net (decrease) increase in accounts and drafts payable ( 7,745 ) 72,757 13,514 Cash dividends paid ( 16,511 ) ( 16,463 ) ( 15,959 ) Purchase of common shares for treasury ( 25,988 ) ( 7,248 ) ( 5,773 ) Other financing activities, net ( 1,299 ) ( 1,704 ) ( 834 ) Net cash (used in) provided by financing activities - continuing operations ( 65,062 ) 102,088 ( 23,924 ) Net cash (used in) provided by financing activities - discontinued operations ( 19,665 ) 1,566 ( 1,639 ) Net cash (used in) provided by financing activities ( 84,727 ) 103,654 ( 25,563 ) Net (decrease) increase in cash and cash equivalents ( 254,294 ) 89,931 171,257 Cash and cash equivalents at beginning of year 293,103 203,172 31,915 Cash and cash equivalents at end of year $ 38,809 $ 293,103 $ 203,172 82 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Cass Information Systems, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Cass Information Systems, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, cash flows, and shareholders’ equity for each of the years in the three‑year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 6, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Assessment of the qualitative risk factors related to the allowance for credit losses on loans evaluated on a collective basis As discussed in Notes 1 and 5 to the consolidated financial statements, the Company’s allowance for credit losses as of December 31, 2025 was $13.6 million, of which $13.5 million was related to the allowance for credit losses on loans evaluated on a collective basis (the “collective ACL”). The December 31, 2025 collective ACL includes the measure of expected credit losses on a collective (pooled) basis for those loans that share similar risk characteristics. The Company estimated the collective ACL using a weighted-average remaining maturity (“WARM”) model that utilizes expected annual remaining loan balance, historical loss rates, a reasonable and supportable forecast, and reversion adjustments. Additionally, the collective ACL includes subjective qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. Given the Company’s recent historical loss experience, the impact of the qualitative risk factors related to the collective ACL is a substantial percentage of the overall collective ACL. These qualitative risk 83 Table of Contents factors may increase or reduce reserve levels and include adjustments for assumptions related to loan concentrations, lending management experience and risk tolerance, loan review and audit results, asset quality and portfolio trends, value of underlying collateral, and loan portfolio growth. We identified the assessment of the qualitative risk factors related to the collective ACL as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment due to significant measurement uncertainty. Specifically, the assessment encompassed the evaluation of the qualitative risk factors related to the collective ACL methodology, including the conceptual soundness and performance of the qualitative framework. The assessment also included the evaluation of qualitative risk factors and the related assumptions. These qualitative risk factors and related assumptions are sensitive to variation, such that minor changes in the assumption can cause significant changes in the estimates. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the qualitative risk factors related to the collective ACL estimate, including controls over the: • development of the collective ACL methodology • identification and determination of the assumptions used in the qualitative framework • continued use and appropriateness of changes made to the qualitative framework • analysis of the collective ACL results, trends, and ratios We evaluated the Company’s process to develop the qualitative risk factors related to the collective ACL estimate by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions. In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in: • evaluating the Company’s collective ACL methodology for compliance with U.S. generally accepted accounting principles • evaluating judgments made by the Company relative to the assessment of the qualitative framework by comparing it to relevant Company-specific metrics and trends and the applicable industry and regulatory practices • evaluating the qualitative framework used to develop the qualitative risk factors and the effect of those factors on the collective ACL compared with relevant credit risk factors and consistency with credit trends and identified limitations of the underlying quantitative models. /s/ KPMG LLP We have served as the Company’s auditor since 1983. St. Louis, Missouri March 6, 2026 84 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.