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): April 18, 2016
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. |
| Item 2.02. | Results of Operations and Financial Condition. |
On April 18, 2016, Cass Information Systems, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter of fiscal 2016. 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 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit Number |
Description | |
| 99.1 | Press release issued by Cass Information Systems, Inc. dated April 18, 2016. | |
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: April 18, 2016
| 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
April 18, 2016
1st Quarter 2016 Earnings Up 6% 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 first quarter 2016 earnings of $.51 per diluted share, an increase of 6% from the $.48 per diluted share it earned in the first quarter of 2015. Net income for the period was $5.8 million, compared to $5.5 million in 2015.
2016 1st Quarter Recap
| March 31, 2016 | March 31, 2015 | % Change | ||||
| Transportation Dollar Volume |
$5.4 billion | $6.1 billion | (10.1)% | |||
| Facility Expense Dollar Volume* |
$2.8 billion | $3.0 billion | (6.0)% | |||
| Revenues |
$30.8 million | $29.8 million | 3.3% | |||
| Net Income |
$5.8 million | $5.5 million | 5.3% | |||
| Diluted Earnings per Share |
$.51 | $.48 | 6.3% |
| * | Includes Energy, Telecom and Waste |
Sales growth generated by new customers and broadened service offerings helped offset the headwinds created by a challenging economic environment. This, combined with an increase in net investment income due mainly to an improvement in the overall quality of the company’s loan portfolio, led to growth in revenue and net income of 3.3% and 5.3%, respectively.
Overall, lingering adverse economic factors including low interest rates, low energy prices and slow growth in U.S. manufacturing output continued to restrain results. In the transportation group, new accounts boosted transaction volume, but that growth was offset by declining activity
from existing customers, especially those involved in oil and gas production. Transportation dollar volume was also retarded by lower fuel prices which reduced average invoice amounts. The decrease in dollar volume generated smaller investable balances that reduced investment income, and more significantly, lowered fees from carrier services. Facility expense transaction volume increased as a result of new business; however, dollar volume decreased due to both a change in the mix of customers and the impact of lower energy prices which reduced the average invoice amounts.
Strategic investment in staff and technology to win and support new business and annual merit increases were the key contributors to a $600,000 (3%) hike in operating expenses.
“We are pleased with the solid start to 2016. However, the macro economic factors that have stunted earnings in recent years remain present. Our ability to continue to win and grow new business combined with strong asset management performance leaves us confident that our strategy is sound,” said Eric H. Brunngraber, Cass chairman and chief executive officer. “We plan to continue to invest in our business to improve operating results and be optimally positioned when the environment improves.”
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 $40 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, 2015.
Selected Consolidated Financial Data
The following table presents selected unaudited consolidated financial data (in thousands, except per share data) for the periods ended March 31, 2016 and 2015:
| Quarter Ended March 31, 2016 |
Quarter Ended March 31, 2015 |
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| Transportation Invoice Volume |
8,112 | 8,125 | ||||||
| Transportation Dollar Volume |
$ | 5,442,332 | $ | 6,056,711 | ||||
| Facility Expense Transaction Volume |
5,288 | 5,041 | ||||||
| Facility Expense Dollar Volume |
$ | 2,805,493 | $ | 2,983,190 | ||||
| Payment and Processing Fees |
$ | 19,545 | $ | 19,418 | ||||
| Net Investment Income |
10,264 | 8,961 | ||||||
| Gains on Sales of Securities |
308 | 949 | ||||||
| Other |
652 | 465 | ||||||
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| Total Revenues |
$ | 30,769 | $ | 29,793 | ||||
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| Salaries and Benefits |
$ | 17,846 | $ | 17,326 | ||||
| Occupancy |
834 | 837 | ||||||
| Equipment |
1,055 | 1,071 | ||||||
| Other |
3,181 | 3,074 | ||||||
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| Total Operating Expenses |
$ | 22,916 | $ | 22,308 | ||||
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| Income from Operations before Income Tax Expense |
$ | 7,853 | $ | 7,485 | ||||
| Income Tax Expense |
2,020 | 1,946 | ||||||
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| Net Income |
$ | 5,833 | $ | 5,539 | ||||
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| Basic Earnings per Share |
$ | .52 | $ | .48 | ||||
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| Diluted Earnings per Share |
$ | .51 | $ | .48 | ||||
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| Average Earning Assets |
$ | 1,262,308 | $ | 1,262,085 | ||||
| Net Interest Margin |
3.39 | % | 3.31 | % | ||||
| Allowance for Loan Losses to Loans |
1.55 | % | 1.74 | % | ||||
| Non-performing Loans to Total Loans |
.06 | % | .48 | % | ||||
| Net Loan (Recoveries) / Charge-offs to Loans |
— | — | ||||||
| Provision for Loan Losses |
$ | (1,000 | ) | $ | — | |||