UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): July 27, 2017
CASS INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
| Missouri | 000-20827 | 43-1265338 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
| 12444 Powerscourt Drive, Suite 550 St. Louis, Missouri |
63131 | |||
| (Address of principal executive offices) | (Zip Code) | |||
(314) 506-5500
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act. |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act. |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
On July 27, 2017, Cass Information Systems, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2017. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information reported under this Item 2.02 of Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 8.01. | Other Matters. |
On July 27, 2017, the Company also announced that its Board of Directors declared a third quarter dividend of $0.23 per share payable September 15, 2017 to shareholders of record on September 5, 2017.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit |
Description | |
| 99.1 | Press release issued by Cass Information Systems, Inc. dated July 27, 2017. | |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: July 27, 2017
| CASS INFORMATION SYSTEMS, INC. | ||
| By: | /s/ Eric H. Brunngraber | |
| Name: | Eric H. Brunngraber | |
| Title: | Chairman, President and Chief Executive Officer | |
| By: | /s/ P. Stephen Appelbaum | |
| Name: | P. Stephen Appelbaum | |
| Title: | Executive Vice President and Chief Financial Officer | |
3
Exhibit 99.1
Contact: Contact Kenn Entringer at Casey Communications, Inc., (314) 721-2828.
kentringer@caseycomm.com
July 27, 2017
2nd Quarter 2017 Earnings Up 12% at Cass Information Systems, Inc.
ST. LOUIS – Cass Information Systems, Inc. (NASDAQ: CASS), the nation’s leading provider of transportation, energy, telecom and waste invoice payment and information services, reported second quarter 2017 earnings of $.58 per diluted share, an increase of 12% from the $.52 per diluted share it earned in the second quarter of 2016. Net income for the period was $6.5 million, compared to $5.9 million in 2016.
| 2nd Quarter | YTD | |||||||||||||||||||||||
| 2017 | 2016 | % Change |
2017 | 2016 | % Change |
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| Transportation Invoice Volume | 9.2 million | 8.8 million | 5.4 | 17.6 million | 16.9 million | 4.4 | ||||||||||||||||||
| Transportation Dollar Volume | $ | 6.2 billion | $ | 5.8 billion | 7.4 | $ | 12.1 billion | $ | 11.2 billion | 7.7 | ||||||||||||||
| Facility Expense Transaction Volume* | 6.7 million | 5.7 million | 18.7 | 13.5 million | 11.0 million | 23.6 | ||||||||||||||||||
| Facility Expense Dollar Volume* | $ | 3.1 billion | $ | 2.8 billion | 11.0 | $ | 6.3 billion | $ | 5.6 billion | 12.1 | ||||||||||||||
| Revenues | $ | 33.7 million | $ | 31.0 million | 8.7 | $ | 66.0 million | $ | 61.7 million | 6.8 | ||||||||||||||
| Net Income | $ | 6.5 million | $ | 5.9 million | 11.0 | $ | 12.8 million | $ | 11.7 million | 9.6 | ||||||||||||||
| Diluted Earnings per Share | $ | .58 | $ | .52 | 11.5 | $ | 1.13 | $ | 1.03 | 9.7 | ||||||||||||||
| * | Includes Energy, Telecom and Waste |
2017 2nd Quarter Recap
The increase in revenue and net income of 9% and 11%, respectively, was primarily attributable to the continued growth of the customer base in each market along with the development and expansion of new revenue-generating services. The solid bottom-line advances were achieved even as the company continued to commit significant funds to new technology and infrastructure in support of service growth.
Highlighting second quarter performance was a 19% increase in facility-related (electricity, gas, waste and telecom expense management) transactions. New customer wins, combined with increased volume from current accounts, fueled the increase. Facility expense dollar volume was also up 11% for the period.
In the transportation sector, a growing roster of clients and an increase in base activity boosted invoice volume by 5% and dollar volume by 7%.
Consolidated operating expenses were up $1.8 million (8%) due mainly to on-going strategic investment in the technology and staff required to win and support new business.
“These operating results affirm the earnings potential of the significant investment we have made – and will continue to make – in our operating units,” said Eric H. Brunngraber, Cass chairman and chief executive officer. “We remain confident in our abilities to successfully navigate an ever-evolving marketplace and to grow the company in the years ahead.”
Six-Month 2017 Recap
For the six-month period ended June 30, 2017 the company earned $1.13 per diluted share, an increase of 10% from the $1.03 per diluted share it earned in the same period in 2016. Net income was $12.8 million, compared to $11.7 million in 2016. Revenues rose 7%, from $61.7 million in 2016 to $66.0 million in 2017.
Consolidated operating expenses were up 7%, or $3.2 million, due to the cost of investing in staff and technology, as noted above.
Cash Dividend Declared
On July 25, 2017, the company’s board of directors declared a third quarter dividend of $.23 per share payable September 15, 2017 to shareholders of record September 5, 2017. Cass has continuously paid regularly scheduled cash dividends since 1934.
Additionally, over the past two years, Cass shareholders have benefited from the return of more than $13 million through the company’s share repurchase program.
About Cass Information Systems
Cass Information Systems, Inc. is a leading provider of integrated information and payment management solutions. Cass enables enterprises to achieve visibility, control and efficiency in their supply chains, communications networks, facilities and other operations. Disbursing nearly $44 billion annually on behalf of clients, and with total assets of $1.5 billion, Cass is uniquely supported by Cass Commercial Bank. Founded in 1906 and a wholly owned subsidiary, Cass Bank provides sophisticated financial exchange services to the parent organization and its clients. Cass is part of the Russell 2000®. More information is available at www.cassinfo.com.
Note to Investors
Certain matters set forth in this news release may contain forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. For a discussion of certain factors that may cause such forward-looking statements to differ materially from the company’s actual results, see the company’s reports filed from time to time with the Securities and Exchange Commission including the company’s annual report on Form 10-K for the year ended December 31, 2016.
Selected Consolidated Financial Data
The following table presents selected unaudited consolidated financial data (in thousands, except per share data) for the periods ended June 30, 2017 and 2016:
| Quarter Ended June 30, 2017 |
Quarter Ended June 30, 2016 |
Six Months Ended June 30, 2017 |
Six Months Ended June 30, 2016 |
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| Transportation Invoice Volume |
9,248 | 8,776 | 17,623 | 16,888 | ||||||||||||
| Transportation Dollar Volume |
$ | 6,231,378 | $ | 5,800,675 | $ | 12,108,221 | $ | 11,243,007 | ||||||||
| Facility Expense Transaction Volume |
6,729 | 5,667 | 13,542 | 10,955 | ||||||||||||
| Facility Expense Dollar Volume |
$ | 3,079,988 | $ | 2,775,639 | $ | 6,255,901 | $ | 5,581,132 | ||||||||
| Payment and Processing Fees |
$ | 23,282 | $ | 20,880 | $ | 45,571 | $ | 40,425 | ||||||||
| Net Investment Income |
9,862 | 9,506 | 19,381 | 19,770 | ||||||||||||
| Gain on Sales of Securities |
— | 79 | — | 387 | ||||||||||||
| Other |
518 | 498 | 1,000 | 1,150 | ||||||||||||
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| Total Revenues |
$ | 33,662 | $ | 30,963 | $ | 65,952 | $ | 61,732 | ||||||||
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| Personnel |
$ | 19,162 | $ | 18,102 | $ | 37,961 | $ | 35,948 | ||||||||
| Occupancy |
889 | 866 | 1,731 | 1,700 | ||||||||||||
| Equipment |
1,200 | 1,110 | 2,504 | 2,165 | ||||||||||||
| Other |
3,650 | 2,981 | 7,023 | 6,162 | ||||||||||||
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| Total Operating Expenses |
$ | 24,901 | $ | 23,059 | $ | 49,219 | $ | 45,975 | ||||||||
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| Income from Operations before Income Taxes |
$ | 8,761 | $ | 7,904 | $ | 16,733 | $ | 15,757 | ||||||||
| Income Tax Expense |
2,248 | 2,035 | 3,913 | 4,055 | ||||||||||||
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| Net Income |
$ | 6,513 | $ | 5,869 | $ | 12,820 | $ | 11,702 | ||||||||
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| Basic Earnings per Share |
$ | .58 | $ | .53 | $ | 1.15 | $ | 1.05 | ||||||||
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| Diluted Earnings per Share |
$ | .58 | $ | .52 | $ | 1.13 | $ | 1.03 | ||||||||
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| Average Earning Assets |
$ | 1,332,829 | $ | 1,289,339 | $ | 1,324,478 | $ | 1,275,824 | ||||||||
| Net Interest Margin |
3.40 | % | 3.40 | % | 3.39 | % | 3.39 | % | ||||||||
| Allowance for Loan Losses to Loans |
1.52 | % | 1.53 | % | 1.52 | % | 1.53 | % | ||||||||
| Non-performing Loans to Total Loans |
.03 | % | .05 | % | .03 | % | .05 | % | ||||||||
| Net Loan (Recoveries) / Charge-offs to Loans |
— | (.01 | %) | — | (.01 | %) | ||||||||||
| Provision for Loan Losses |
$ | — | $ | — | $ | — | $ | (1,000 | ) | |||||||