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): October 21, 2010
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.) |
| 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 October 21, 2010, Cass Information Systems, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter of fiscal 2010. 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 October 21, 2010, the Company announced a fourth quarter cash dividend of $0.16 per share, payable December 15, 2010 to shareholders of record as of December 3, 2010.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number |
Description | |
| 99.1 | Press release issued by Cass Information Systems, Inc. dated October 21, 2010. |
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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: October 21, 2010
| 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 | |
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Exhibit 99.1
Contact: Contact Kenn Entringer at Casey Communications, Inc., (314) 721-2828
kentringer@caseycomm.com
October 21, 2010
Cass Information Systems, Inc. Reports Record
3rd Quarter 2010 Earnings; Increases Dividend 14%
ST. LOUIS – Cass Information Systems, Inc. (NASDAQ: CASS), the nation’s leading provider of transportation, utility and telecom invoice payment and information services, reported record third quarter 2010 earnings of $.59 per diluted share, a 28% increase over the $.46 per diluted share it earned in the third quarter of 2009. Net income for the period was $5.6 million, a 29% increase over the $4.3 million reported in 2009.
| 3rd Quarter | % Change |
YTD | % Change |
|||||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||||
| Transportation Dollar Volume |
$ | 4.5 billion | $ | 3.6 billion | 26.9 | % | $ | 12.5 billion | $ | 10.4 billion | 20.7 | % | ||||||||||||
| Utility Dollar Volume |
$ | 2.9 billion | $ | 2.5 billion | 13.0 | % | $ | 7.9 billion | $ | 7.3 billion | 8.7 | % | ||||||||||||
| Revenues |
$ | 24.7 million | $ | 22.0 million | 12.4 | % | $ | 71.2 million | $ | 65.4 million | 8.9 | % | ||||||||||||
| Net Income |
$ | 5.6 million | $ | 4.3 million | 29.2 | % | $ | 15.2 million | $ | 11.9 million | 28.0 | % | ||||||||||||
| Diluted Earnings per Share |
$ | .59 | $ | .46 | 28.3 | % | $ | 1.61 | $ | 1.27 | 26.8 | % | ||||||||||||
2010 3rd Quarter Recap
Increased activity from both base customers and new customers helped transportation transaction dollar volume surge more than 26%, with utility transaction dollar volume up a solid 13%. Overall, revenues for the quarter grew to $24.7 million, a 12% increase over the $22.0 million posted in 2009.
Operating expenses were up 4%, or $732,000, primarily as a response to the increase in volume along with additional incentive compensation related to the increase in pre-tax income from operations.
Nine-Month 2010 Recap
For the nine months ended September 30, 2010, the company earned $1.61 per fully diluted share, a 27% increase over the $1.27 per fully diluted share earned in the comparable period in 2009. Net income was $15.2 million, 28% higher than the $11.9 million earned in 2009. Revenues rose 9%, from $65.4 million in 2009 to $71.2 million in 2010.
Operating expenses were up 1% compared to 2009.
“Our record results in the third quarter were generated by the strong performance of each of our businesses – transportation, utility and telecom invoice processing plus our commercial bank subsidiary,” said Eric H. Brunngraber, Cass president and chief executive officer. “The company remains well positioned to take advantage of improving economic conditions and we continue to focus on strengthening our competitive position in the markets we serve.”
Cash Dividend Increased by 14%
On October 18, 2010, the company’s board of directors declared a fourth quarter dividend of $.16 per share payable December 15, 2010 to shareholders of record December 3, 2010. This represents a 14% increase over the prior dividend. “The increase reflects the company’s solid capital base, its strong performance and the board’s optimism about our future,” said Brunngraber.
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 $24 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 ranked #65 on the 2009 Fortune Small Business FSB 100 list of the fastest-growing public companies in America.
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, 2009.
Selected Consolidated Financial Data
The following table presents selected unaudited consolidated financial data (in thousands, except per share data) for the periods ended September 30, 2010 and 2009:
| Quarter Ended 9/30/10 |
Quarter Ended 9/30/09 |
Nine Months Ended 9/30/10 |
Nine Months Ended 9/30/09 |
|||||||||||||
| Transportation Invoice Volume |
6,886 | 5,962 | 19,619 | 17,073 | ||||||||||||
| Transportation Dollar Volume |
$ | 4,534,235 | $ | 3,573,371 | $ | 12,497,079 | $ | 10,351,933 | ||||||||
| Utility Transaction Volume |
3,061 | 2,903 | 9,161 | 8,556 | ||||||||||||
| Utility Dollar Volume |
$ | 2,878,647 | $ | 2,546,747 | $ | 7,938,521 | $ | 7,305,848 | ||||||||
| Payment and Processing Fees |
$ | 13,895 | $ | 12,302 | $ | 40,173 | $ | 36,282 | ||||||||
| Net Investment Income |
10,290 | 9,241 | 29,624 | 27,487 | ||||||||||||
| Gain on Sales of Securities |
— | — | — | 202 | ||||||||||||
| Other |
506 | 432 | 1,421 | 1,450 | ||||||||||||
| Total Revenues |
$ | 24,691 | $ | 21,975 | $ | 71,218 | $ | 65,421 | ||||||||
| Salaries and Benefits |
$ | 13,026 | $ | 12,583 | $ | 38,199 | $ | 37,762 | ||||||||
| Occupancy |
658 | 611 | 1,841 | 1,797 | ||||||||||||
| Equipment |
887 | 835 | 2,701 | 2,509 | ||||||||||||
| Other |
2,527 | 2,337 | 7,404 | 7,385 | ||||||||||||
| Total Operating Expenses |
$ | 17,098 | $ | 16,366 | $ | 50,145 | $ | 49,453 | ||||||||
| Income from Operations before Income Taxes |
$ | 7,593 | $ | 5,609 | $ | 21,073 | $ | 15,968 | ||||||||
| Provision for Income Taxes |
2,013 | 1,291 | 5,844 | 4,066 | ||||||||||||
| Net Income |
$ | 5,580 | $ | 4,318 | $ | 15,229 | $ | 11,902 | ||||||||
| Basic Earnings per Share |
$ | .60 | $ | .47 | $ | 1.63 | $ | 1.30 | ||||||||
| Diluted Earnings per Share |
$ | .59 | $ | .46 | $ | 1.61 | $ | 1.27 | ||||||||
| Average Earning Assets |
$ | 1,102,218 | $ | 938,566 | $ | 1,035,346 | $ | 858,557 | ||||||||
| Net Interest Margin |
4.47 | % | 4.50 | % | 4.66 | % | 4.92 | % | ||||||||
| Allowance for Loan Losses to Loans |
1.56 | % | 1.16 | % | 1.56 | % | 1.16 | % | ||||||||
| Non-performing Loans to Total Loans |
.15 | % | .29 | % | .15 | % | .29 | % | ||||||||
| Net Loan Charge-offs to Loans |
.05 | % | .02 | % | .08 | % | .05 | % | ||||||||
| Provision for Loan Losses |
$ | 950 | $ | 400 | $ | 3,000 | $ | 1,100 | ||||||||