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): January 29, 2009
CASS INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
| Missouri | 2-80070 | 43-1265338 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
| 13001 Hollenberg Drive Bridgeton, Missouri |
63044 | |
| (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. |
| Item 2.02. | Results of Operations and Financial Condition. |
On January 29, 2009, Cass Information Systems, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2008. 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 Events. |
Also on January 29, 2009, the Company announced that at its January meeting, the Board of Directors declared a regular quarterly cash dividend of $0.13 per share payable on March 16, 2009 to shareholders of record on March 5, 2009.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit |
Description | |
| 99.1 | Press release issued by Cass Information Systems, Inc. dated January 29, 2009. |
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: January 29, 2009
| CASS INFORMATION SYSTEMS, INC. | ||
| By: | /s/ Eric H. Brunngraber | |
| Name: | Eric H. Brunngraber | |
| Title: | President and Chief Executive Officer | |
| By: | /s/ P. Stephen Appelbaum | |
| Name: | P. Stephen Appelbaum | |
| Title: | Chief Financial Officer | |
3
Exhibit Index
| Exhibit |
Description | |
| 99.1 | Press release issued by Cass Information Systems, Inc. dated January 29, 2009. |
4
Exhibit 99.1
January 29, 2009
Contact: Contact Kenn Entringer at Casey Communications, Inc., (314) 721-2828 kentringer@caseycomm.com
Cass Information Systems, Inc. Reports
12% Increase in 4th Quarter 2008 Earnings;
Declares Regular Quarterly Dividend
ST. LOUIS—Cass Information Systems, Inc. (NASDAQ: CASS), the nation’s leading provider of transportation, utility and telecom invoice payment and information services, reported fourth quarter 2008 earnings of $.56 per fully-diluted share, a 12% increase over the $.50 per fully-diluted share earned a year earlier. Net income for the period was $5.2 million, a 10% increase over the $4.7 million in net income reported in the fourth quarter of 2007.
2008 4th Quarter Recap
| 12/31/08 | 12/31/07 | % Change |
|||||||
| Transportation Dollar Volume | $ | 4.3 billion | $ | 3.8 billion | 15 | % | |||
| Utility Dollar Volume | $ | 2.3 billion | $ | 2.0 billion | 16 | % | |||
| Revenues | $ | 23.2 million | $ | 22.5 million | 3 | % | |||
| Net Income | $ | 5.2 million | $ | 4.7 million | 10 | % | |||
| Diluted Earnings per Share | $ | .56 | $ | .50 | 12 | % | |||
Payment and processing fees increased 11%, or $1.3 million, compared to the year-earlier period. Transportation transaction volume was up 9% and dollar volume rose 15% due primarily to new business. Utility transaction volume was up 13% and utility dollar volume rose 16% due to new business and heightened activity from existing customers.
Net investment income decreased $442,000, or 4%, primarily due to the overall decline in interest rates.
Operating expenses were up 3%, or $407,000, primarily as a result of higher employee costs related to transaction growth.
Year-End 2008 Recap
| 12/31/08 | 12/31/07 | % Change |
|||||||
| Transportation Dollar Volume | $ | 17.5 billion | $ | 14.5 billion | 20 | % | |||
| Utility Dollar Volume | $ | 9.4 billion | $ | 7.7 billion | 23 | % | |||
| Revenues | $ | 91.7 million | $ | 88.7 million | 3 | % | |||
| Net Income | $ | 19.0 million | $ | 17.8 million | 7 | % | |||
| Diluted Earnings per Share | $ | 2.03 | $ | 1.90 | 7 | % | |||
For all of 2008, payment and processing fees increased 11%, or $5.1 million, compared to 2007. Transportation transaction volume was up 10% and dollar volume rose 20%. Utility transaction volume was up 14% and dollar volume rose 23%.
Net investment income decreased $1,922,000, or 5%, primarily due to the overall decline in interest rates.
Operating expenses were up 5%, or $2,825,000, primarily as a result of higher employee costs related to transaction growth.
“We are pleased with the strong growth in transaction volume experienced by our utility and freight invoice processing operations during 2008,” said Eric H. Brunngraber, Cass president and chief executive officer. “This growth enabled us to overcome the negative effects of a historically low interest rate environment and to produce solid growth in earnings. We remain optimistic about the ability of the company to perform well in the future. Still, if the significant decline in general economic activity experienced in the fourth quarter of 2008 persists well into 2009, it could hinder our effort to sustain our recent growth trajectory.”
Due to its lack of exposure to sub-prime mortgage loans, mortgage-backed securities, or residential development loans of any kind—issues that are having a significant detrimental effect on the financial community—are not affecting Cass in such a manner.
Cash Dividend Declared
On January 19, 2009, the company’s board of directors declared a first quarter dividend of $.13 per share payable March 16, 2009 to shareholders of record March 5, 2009. Cass has continuously paid regularly scheduled cash dividends since 1934.
About Cass Information Systems
Cass Information Systems is the leading provider of transportation, utility and telecom invoice payment and information services. The company, which has been involved in the payables services and information support business since 1956, disburses over $26 billion annually on behalf of customers from processing centers in St. Louis, Mo., Columbus, Ohio, Boston, Mass., Greenville, S.C. and Wellington, Kansas. The support of Cass Commercial Bank, founded in 1906, makes Cass Information Systems unique in the industry. Cass is part of the Russell 2000® Index and in 2008 was one of only 27 companies to be honored with a Supplier Excellence Award by AT&T Inc. (NYSE:T) for its service in utility management.
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, 2007.
Selected Consolidated Financial Data
The following table presents selected unaudited consolidated financial data (in thousands, except per share data) for the periods ended December 31, 2008 and 2007.
| Quarter Ended 12/31/08 |
Quarter Ended 12/31/07 |
Year Ended 12/31/08 |
Year Ended 12/31/07 |
|||||||||||||
| Transportation Invoice Volume |
6,345 | 5,821 | 25,854 | 23,480 | ||||||||||||
| Transportation Dollar Volume |
$ | 4,332,918 | $ | 3,755,348 | $ | 17,482,520 | $ | 14,519,906 | ||||||||
| Utility Transaction Volume |
2,710 | 2,388 | 10,562 | 9,260 | ||||||||||||
| Utility Dollar Volume |
$ | 2,291,216 | $ | 1,977,656 | $ | 9,418,015 | $ | 7,665,283 | ||||||||
| Payment and Processing Fees |
$ | 12,814 | $ | 11,553 | $ | 50,721 | $ | 45,642 | ||||||||
| Net Investment Income |
9,810 | 10,252 | 38,560 | 40,482 | ||||||||||||
| Gain on Sale of Securities |
343 | — | 552 | — | ||||||||||||
| Other |
205 | 663 | 1,897 | 2,558 | ||||||||||||
| Total Revenues |
$ | 23,172 | $ | 22,468 | $ | 91,730 | $ | 88,682 | ||||||||
| Salaries and Benefits |
$ | 12,322 | $ | 11,830 | $ | 49,723 | $ | 46,965 | ||||||||
| Occupancy |
552 | 534 | 2,228 | 2,106 | ||||||||||||
| Equipment |
810 | 791 | 3,331 | 3,356 | ||||||||||||
| Other |
2,533 | 2,655 | 10,282 | 10,312 | ||||||||||||
| Total Operating Expenses |
$ | 16,217 | $ | 15,810 | $ | 65,564 | $ | 62,739 | ||||||||
| Income from Operations before Income Taxes |
$ | 6,955 | $ | 6,658 | $ | 26,166 | $ | 25,943 | ||||||||
| Provision for Income Taxes |
1,762 | 1,918 | 7,160 | 8,148 | ||||||||||||
| Net Income |
$ | 5,193 | $ | 4,740 | $ | 19,006 | $ | 17,795 | ||||||||
| Basic Earnings per Share |
$ | .57 | $ | .53 | $ | 2.08 | $ | 1.95 | ||||||||
| Diluted Earnings per Share |
$ | .56 | $ | .50 | $ | 2.03 | $ | 1.90 | ||||||||
| Average Earning Assets |
$ | 863,252 | $ | 841,174 | $ | 841,367 | $ | 809,739 | ||||||||
| Net Interest Margin |
5.35 | % | 5.36 | % | 5.34 | % | 5.45 | % | ||||||||
| Allowance for Loan Losses to Loans |
1.09 | % | 1.26 | % | 1.09 | % | 1.26 | % | ||||||||
| Non-performing Loans to Total Loans |
.21 | % | .50 | % | .21 | % | .50 | % | ||||||||
| Net Loan Charge-offs to Loans |
.07 | % | — | .34 | % | .24 | % | |||||||||
| Provision for Loan Losses |
$ | 600 | $ | 225 | $ | 2,200 | $ | 900 | ||||||||