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 27, 2011
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 January 27, 2011, Cass Information Systems, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 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 January 27, 2011, the Board of Directors declared a first quarter cash dividend of $0.16 per share payable on March 15, 2011 to shareholders of record on March 4, 2011.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
| Exhibit |
Description | |
| 99.1 | Press release issued by Cass Information Systems, Inc. dated January 27, 2011. | |
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 27, 2011
| 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
January 27, 2011
Cass Information Systems, Inc. Completes Record-Setting 2010;
Posts Annual Earnings of $ 20.3 Million, 26% Higher Than 2009
Declares Regular Quarterly Cash Dividend
ST. LOUIS – Cass Information Systems, Inc. (NASDAQ: CASS), the nation’s leading provider of transportation, utility and telecom invoice payment and information services reports that it earned $2.15 per diluted share for the year ended Dec. 31, 2010, a 24% increase over the $1.73 per diluted share earned in 2009. Total net income for 2010 was a record-setting $20.3 million, a 26% increase over the $16.1 million earned in 2009.
| 4th Quarter | % Change |
YTD | % Change |
|||||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||||
| Transportation Dollar Volume |
$ | 4.5 billion | $ | 3.7 billion | 20.9 | % | $ | 17.0 billion | $ | 14.0 billion | 20.8 | % | ||||||||||||
| Utility Dollar Volume |
$ | 2.5 billion | $ | 2.4 billion | 6.7 | % | $ | 10.5 billion | $ | 9.7 billion | 8.2 | % | ||||||||||||
| Revenues |
$ | 25.0 million | $ | 22.5 million | 11.1 | % | $ | 96.2 million | $ | 87.9 million | 9.4 | % | ||||||||||||
| Net Income |
$ | 5.1 million | $ | 4.2 million | 20.2 | % | $ | 20.3 million | $ | 16.1 million | 25.9 | % | ||||||||||||
| Diluted Earnings per Share |
$ | .54 | $ | .46 | 17.4 | % | $ | 2.15 | $ | 1.73 | 24.3 | % | ||||||||||||
2010 4th Quarter Recap
The company ended 2010 reporting fourth quarter earnings of $.54 per diluted share, a 17% increase over the $.46 per diluted share it earned in the fourth quarter of 2009. Net income for the period was $5.1 million, or 20% higher than the $4.2 million recorded in the final quarter of 2009.
Fueling earnings growth was increased activity from both base and new customers which helped transportation transaction dollar volume surge more than 20%. Utility transaction dollar volume was up a solid 7%. Overall, revenues for the quarter grew to $25.0 million, an 11% increase over the $22.5 million generated in the year-earlier period.
Net investment income increased $1,253,000 or 14% due to growth of the company’s loan portfolio.
Operating expenses were up 7%, or $1,207,000, primarily in response to the increase in business volume as well as higher professional fees as the company invests for future growth.
2010 Revenues Also Set Record, Up 9%
Revenues for the year ended December 31, 2010 also set an all-time high, $96. 2 million and were 9% higher than 2009 revenues of $87.9 million.
Comparatively, operating expenses for the year were up only 3% or $1,899,000, again primarily in response to increases in business volume.
“A company-wide focus on finding new ways to operate our businesses as efficiently as possible served us well during the 2008-09 recession and continued to benefit us in 2010 as economic conditions gradually improved and the earnings potential of our invoice processing units and bank subsidiary was more fully realized,” said Eric H. Brunngraber, Cass president and chief executive officer. “The performance of the company in 2010 affirms our faith in our core strategies and in the ability of our businesses to successfully compete over the long-term.”
Cash Dividend Declared
On January 24, 2011 the company’s board of directors declared a first quarter dividend of $.16 per share payable March 15, 2011 to shareholders of record March 4, 2011. 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 $27 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.
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 December 31, 2010 and 2009.
| Quarter Ended 12/31/10 |
Quarter Ended 12/31/09 |
Year Ended 12/31/10 |
Year Ended 12/31/09 |
|||||||||||||
| Transportation Invoice Volume |
6,668 | 6,064 | 26,287 | 23,137 | ||||||||||||
| Transportation Dollar Volume |
$ | 4,468,924 | $ | 3,695,409 | $ | 16,966,003 | $ | 14,047,342 | ||||||||
| Utility Transaction Volume |
3,086 | 2,926 | 12,247 | 11,482 | ||||||||||||
| Utility Dollar Volume |
$ | 2,521,812 | $ | 2,364,261 | $ | 10,460,333 | $ | 9,670,109 | ||||||||
| Payment and Processing Fees |
$ | 14,010 | $ | 12,383 | $ | 54,183 | $ | 48,665 | ||||||||
| Net Investment Income |
10,447 | 9,194 | 40,071 | 36,681 | ||||||||||||
| Gain on Sale of Securities |
— | 495 | — | 697 | ||||||||||||
| Other |
542 | 426 | 1,963 | 1,876 | ||||||||||||
| Total Revenues |
$ | 24,999 | $ | 22,498 | $ | 96,217 | $ | 87,919 | ||||||||
| Salaries and Benefits |
$ | 13,169 | $ | 12,852 | $ | 51,368 | $ | 50,614 | ||||||||
| Occupancy |
644 | 599 | 2,485 | 2,396 | ||||||||||||
| Equipment |
860 | 839 | 3,561 | 3,348 | ||||||||||||
| Other |
3,466 | 2,642 | 10,870 | 10,027 | ||||||||||||
| Total Operating Expenses |
$ | 18,139 | $ | 16,932 | $ | 68,284 | $ | 66,385 | ||||||||
| Income from Operations before Income Taxes |
$ | 6,860 | $ | 5,566 | $ | 27,933 | $ | 21,534 | ||||||||
| Provision for Income Taxes |
1,779 | 1,339 | 7,623 | 5,405 | ||||||||||||
| Net Income |
$ | 5,081 | $ | 4,227 | $ | 20,310 | $ | 16,129 | ||||||||
| Basic Earnings per Share |
$ | .55 | $ | .46 | $ | 2.18 | $ | 1.76 | ||||||||
| Diluted Earnings per Share |
$ | .54 | $ | .46 | $ | 2.15 | $ | 1.73 | ||||||||
| Average Earning Assets |
$ | 1,135,125 | $ | 1,002,981 | $ | 1,060,558 | $ | 894,951 | ||||||||
| Net Interest Margin |
4.47 | % | 4.46 | % | 4.61 | % | 4.79 | % | ||||||||
| Allowance for Loan Losses to Loans |
1.68 | % | 1.29 | % | 1.68 | % | 1.29 | % | ||||||||
| Non-performing Loans to Total Loans |
.08 | % | .25 | % | .08 | % | .25 | % | ||||||||
| Net Loan (Recoveries)/ Charge-offs to Loans |
— | (.02 | )% | .07 | % | .03 | % | |||||||||
| Provision for Loan Losses |
$ | 1,100 | $ | 950 | $ | 4,100 | $ | 2,050 | ||||||||