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 24, 2014
CASS INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
| Missouri | 000-20827 | 43-1265338 | ||
| (State or other jurisdiction of | (Commission | (I.R.S. Employer | ||
| incorporation or organization) | File Number) | 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. |
| Item 2.02. | Results of Operations and Financial Condition. |
On July 24, 2014, Cass Information Systems, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2014. 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 24, 2014, the Company also announced that its board of directors declared a third quarter cash dividend of $0.20 per share, payable September 15, 2014 to shareholders of record on September 5, 2014.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit Number |
Description | |
| 99.1 | Press release issued by Cass Information Systems, Inc. dated July 24, 2014. | |
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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: July 24, 2014
| 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 Kenn Entringer at Casey Communications, (314)721-2828 or kentringer@caseycomm.com
July 24, 2014
Cass Information Systems, Inc. Reports 2nd Quarter 2014 Earnings
ST. LOUIS – Cass Information Systems, Inc. (NASDAQ: CASS), the nation’s leading provider of transportation, energy, telecom and environmental invoice payment and information services, reported second quarter 2014 earnings of $.52 per diluted share, the same figure it reported in the second quarter of 2013. Net income for the period was $6.0 million, compared to $6.1 million in 2013.
| 2nd Quarter | YTD | |||||||||||||||||||||||
| 2014 | 2013 | % Change | 2014 | 2013 | % Change | |||||||||||||||||||
| Transportation Dollar Volume |
$ | 6.7 billion | $ | 5.9 billion | 13.5 | % | $ | 12.6 billion | $ | 11.3 billion | 11.3 | % | ||||||||||||
| Facility Expense Dollar Volume* |
$ | 3.1 billion | $ | 2.8 billion | 10.8 | % | $ | 6.3 billion | $ | 5.4 billion | 17.3 | % | ||||||||||||
| Revenues |
$ | 29.3 million | $ | 29.2 million | .4 | % | $ | 58.0 million | $ | 57.6 million | .7 | % | ||||||||||||
| Net Income |
$ | 6.0 million | $ | 6.1 million | (.6 | %) | $ | 11.8 million | $ | 12.1 million | (2.1 | %) | ||||||||||||
| Diluted Earnings per Share |
$ | .52 | $ | .52 | — | $ | 1.02 | $ | 1.04 | (1.9 | %) | |||||||||||||
| * | Includes Energy, Telecom and Environmental |
2014 2nd Quarter Recap
Transportation and facility expense dollar volumes increased 14% and 11%, respectively. The increases were driven by growth in processing activity associated with the large number of new customers added in the past year plus increased activity from core transportation clients. Despite solid growth in activity, second quarter earnings essentially matched year-earlier results as the operational gains were off-set by a 3% or $0.3 million drop in net investment income due to depressed interest rates and the absence of gains from the sale of securities in the current quarter.
Operating expenses increased by $0.3 million, or 1%, due to continued investment in staff and technology to support current growth and win new business, partially off-set by lower pension expense.
“Our transportation and facility expense invoice processing operations turned in admirable performances, enabling us to largely overcome the earnings drag posed by current interest rate levels,” said Eric H. Brunngraber, Cass president and chief executive officer. “The solid operating performance of our business units continues to illustrate the value and market acceptance of our expanding service lines.”
Six-Month 2014 Recap
For the six-month period ended June 30, 2014, the company earned $1.02 per diluted share, 2% less than the $1.04 per diluted share earned in the first half of 2013. Net income was $11.8 million, slightly lower than the $12.1 million earned in 2013. Revenues rose 1%, from $57.6 million in 2013 to $58.0 million in 2014.
Operating expenses were up 2%, or $0.9 million, for the reasons previously cited.
Cash Dividend Declared
On July 21, 2014, the company’s board of directors declared a third quarter dividend of $.20 per share payable September 15, 2014 to shareholders of record September 5, 2014. Cass has continuously paid regularly scheduled cash dividends for the last 80 years.
About Cass Information Systems
Cass Information Systems is the leading provider of transportation, energy, telecom and environmental invoice payment and information services. The company, which has been involved in the payables services and information support business since 1956, disburses $35 billion annually on behalf of customers from locations in St. Louis, Mo., Columbus, Ohio, Boston, Mass., Greenville, S.C., Wellington, Kansas and Jacksonville, Fla. 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, 2013.
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, 2014 and 2013:
| Quarter Ended June 30, 2014 |
Quarter Ended June 30, 2013 |
Six Months Ended June 30, 2014 |
Six Months Ended June 30, 2013 |
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| Transportation Invoice Volume |
8,874 | 7,935 | 16,633 | 15,279 | ||||||||||||
| Transportation Dollar Volume |
$ | 6,664,922 | $ | 5,869,694 | $ | 12,557,493 | $ | 11,285,059 | ||||||||
| Facility Expense Transaction Volume |
5,181 | 4,800 | 10,276 | 9,418 | ||||||||||||
| Facility Expense Dollar Volume |
$ | 3,060,418 | $ | 2,762,513 | $ | 6,334,971 | $ | 5,402,756 | ||||||||
| Payment and Processing Fees |
$ | 19,554 | $ | 17,448 | $ | 37,951 | $ | 34,024 | ||||||||
| Net Investment Income |
9,347 | 9,629 | 18,494 | 19,598 | ||||||||||||
| Gain on Sales of Securities |
— | 1,684 | — | 3,137 | ||||||||||||
| Other |
398 | 435 | 1,576 | 871 | ||||||||||||
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| Total Revenues |
$ | 29,299 | $ | 29,196 | $ | 58,021 | $ | 57,630 | ||||||||
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| Salaries and Benefits |
$ | 16,464 | $ | 16,280 | $ | 32,651 | $ | 32,538 | ||||||||
| Occupancy |
756 | 735 | 1,562 | 1,344 | ||||||||||||
| Equipment |
1,121 | 923 | 2,147 | 1,831 | ||||||||||||
| Other |
2,965 | 3,079 | 5,971 | 5,693 | ||||||||||||
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| Total Operating Expenses |
$ | 21,306 | $ | 21,017 | $ | 42,331 | $ | 41,406 | ||||||||
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| Income from Operations before Income Taxes |
$ | 7,993 | $ | 8,179 | $ | 15,690 | $ | 16,224 | ||||||||
| Income Tax Expense |
1,958 | 2,106 | 3,844 | 4,119 | ||||||||||||
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| Net Income |
$ | 6,035 | $ | 6,073 | $ | 11,846 | $ | 12,105 | ||||||||
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| Basic Earnings per Share |
$ | .52 | $ | .53 | $ | 1.03 | $ | 1.06 | ||||||||
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| Diluted Earnings per Share |
$ | .52 | $ | .52 | $ | 1.02 | $ | 1.04 | ||||||||
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| Average Earning Assets |
$ | 1,220,326 | $ | 1,176,943 | $ | 1,227,932 | $ | 1,171,498 | ||||||||
| Net Interest Margin |
3.50 | % | 3.77 | % | 3.46 | % | 3.86 | % | ||||||||
| Allowance for Loan Losses to Loans |
1.78 | % | 1.69 | % | 1.78 | % | 1.69 | % | ||||||||
| Non-performing Loans to Total Loans |
.23 | % | .13 | % | .23 | % | .13 | % | ||||||||
| Net Loan (Recoveries) Charge-offs to Loans |
— | — | (.03 | %) | .22 | % | ||||||||||
| Provision for Loan Losses |
$ | — | $ | 300 | $ | — | $ | 500 | ||||||||