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 30, 2008
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 30, 2008, Cass Information Systems, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2007. 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. |
On January 30, 2008, the Company issued a press release announcing that the Board of Directors authorized the Company to acquire up to an aggregate of 300,000 shares of its outstanding common stock, if deemed appropriate. The Company may make these common stock repurchases from time to time in the open market or through negotiated transactions.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit |
Description | |
| 99.1 | Press release issued by Cass Information Systems, Inc. dated January 30, 2008. |
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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: January 30, 2008
| CASS INFORMATION SYSTEMS, INC. | ||
| By: | /s/ Lawrence A. Collett | |
| Name: | Lawrence A. Collett | |
| Title: | Chairman and Chief Executive Officer | |
| By: | /s/ P. Stephen Appelbaum | |
| P. Stephen Appelbaum | ||
| Title: | Chief Financial Officer | |
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Exhibit Index
| Exhibit |
Description | |
| 99.1 | Press release issued by Cass Information Systems, Inc. dated January 30, 2008. |
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Exhibit 99.1
Contact: Contact Kenn Entringer at Casey Communications, Inc., (314) 721-2828
kentringer@caseycomm.com
January 30, 2008
Cass Information Systems, Inc. Finishes 2007
With 31% Increase in 4th Quarter Earnings
ST. LOUIS – Cass Information Systems, Inc. (NASDAQ: CASS), the nation's leading provider of transportation, utility and telecom invoice payment and information services ended its 2007 fiscal year on a strong note, reporting fourth quarter earnings of $.51 per fully diluted share, a 31% increase over the $.39 per fully diluted share it earned in the fourth quarter of 2006. Net income for the period was $4.7 million, compared to $3.7 million in 2006.
2007 4th Quarter Recap
| 12/31/07 | 12/31/06 | % Change |
|||||||
| Transportation Dollar Volume |
$ | 3.8 billion | $ | 3.5 billion | 8.6 | % | |||
| Utility Dollar Volume |
$ | 2.0 billion | $ | 1.5 billion | 33.3 | % | |||
| Revenues |
$ | 22.5 million | $ | 20.9 million | 7.7 | % | |||
| Net Income |
$ | 4.7 million | $ | 3.7 million | 27.0 | % | |||
| Diluted Earnings per Share |
$ | .51 | $ | .39 | 30.8 | % | |||
Payment and processing fees increased 10% or $1.1 million compared to the year-earlier period, as utility transaction volume was up 28% and dollar volume rose 33% due to new business and heightened activity from existing customers.
Operating expenses were up 5%, or $707,000, as a result of higher employee costs related to transaction growth. Income tax expense decreased slightly due to the growth of the company’s state and municipal bond portfolios.
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2007 Net Income Up 18% over 2006
| 12/31/07 | 12/31/06 | % Change |
|||||||
| Transportation Dollar Volume |
$ | 14.5 billion | $ | 14.2 billion | 2.1 | % | |||
| Utility Dollar Volume |
$ | 7.7 billion | $ | 5.7 billion | 35.1 | % | |||
| Revenues |
$ | 88.7 million | $ | 82.1 million | 8.0 | % | |||
| Net Income |
$ | 17.8 million | $ | 15.1 million | 17.9 | % | |||
| Diluted Earnings per Share |
$ | 1.90 | $ | 1.61 | 18.0 | % | |||
For the year ended December 31, 2007, Cass earned $1.90 per fully diluted share, an 18% increase from the $1.61 per fully diluted share reported for the same period in 2006. Net income was $17.8 million, 18% higher than the $15.1 million earned in 2006. Total revenue increased $6.6 million or 8% compared to 2006 primarily due to increased processing volumes and higher fee revenues.
For all of 2007, operating expenses were up 8%, or $4.5 million, mainly due to the increase in salaries and benefits required to support growth in processing activity. Income tax expense was down 3% due to growth of the company’s state and municipal bond portfolios.
On December 17, 2007, Cass issued a 10% stock dividend to all shareholders of record.
“We are delighted with the 35% growth in transaction volume experienced by our utility invoice processing operations in 2007 and with the 18% increase in year-over-year earnings,” said Lawrence A. Collett, Cass chief executive officer and chairman of the board. “From the larger perspective, it is gratifying that the company produced another solid year of results for our shareholders and that for the fourth consecutive year, we were able to provide a special stock dividend to them over and above the regular quarterly cash dividends we have paid without fail since 1934. We believe Cass is in a strong financial condition to provide a solid base for continued future growth as well as withstand the negative impacts of current difficulties in the financial arena.”
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Cass currently holds no sub-prime mortgage loans nor has any securities in its investment portfolio that contain any exposure to such instruments. The company holds no mortgage-backed securities or residential development loans of any kind. Hence, the issues that are having a significant detrimental effect on the financial community should not affect Cass in such a manner.
Authorizes 300,000 Share Stock Buy-Back
The Board of Directors also authorized the company to acquire up to an aggregate of 300,000 shares of its outstanding common stock, if deemed appropriate. The company may make these common stock repurchases from time to time in the open market or through negotiated transactions.
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 $22 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, 2006.
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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, 2007 and 2006:
| Quarter Ended 12/31/07 |
Quarter Ended 12/31/06 |
Year Ended 12/31/07 |
Year Ended 12/31/06 |
|||||||||||||
| Transportation Invoice Volume |
6,210 | 5,909 | 25,206 | 24,220 | ||||||||||||
| Transportation Dollar Volume |
$ | 3,755,348 | $ | 3,476,395 | $ | 14,519,906 | $ | 14,199,389 | ||||||||
| Utility Transaction Volume |
2,388 | 1,868 | 9,260 | 6,665 | ||||||||||||
| Utility Dollar Volume |
$ | 1,977,656 | $ | 1,483,314 | $ | 7,665,283 | $ | 5,671,892 | ||||||||
| Payment and Processing Fees |
$ | 11,553 | $ | 10,490 | $ | 45,642 | $ | 40,343 | ||||||||
| Net Investment Income |
10,252 | 9,813 | 40,482 | 39,284 | ||||||||||||
| Other |
663 | 583 | 2,558 | 2,478 | ||||||||||||
| Total Revenues |
$ | 22,468 | $ | 20,886 | $ | 88,682 | $ | 82,105 | ||||||||
| Salaries and Benefits |
$ | 11,830 | $ | 11,003 | $ | 46,965 | $ | 42,676 | ||||||||
| Occupancy |
534 | 517 | 2,106 | 1,979 | ||||||||||||
| Equipment |
791 | 800 | 3,356 | 2,928 | ||||||||||||
| Other |
2,655 | 2,783 | 10,312 | 10,694 | ||||||||||||
| Total Operating Expenses |
$ | 15,810 | $ | 15,103 | $ | 62,739 | $ | 58,277 | ||||||||
| Income from Continuing Operations before Income Taxes |
$ | 6,658 | $ | 5,783 | $ | 25,943 | $ | 23,828 | ||||||||
| Provision for Income Taxes |
1,918 | 1,970 | 8,148 | 8,367 | ||||||||||||
| Net Income from Continuing Operations |
$ | 4,740 | $ | 3,813 | $ | 17,795 | $ | 15,461 | ||||||||
| Loss from Discontinued Operations net of Income Taxes |
— | (118 | ) | — | (395 | ) | ||||||||||
| Net Income |
$ | 4,740 | $ | 3,695 | $ | 17,795 | $ | 15,066 | ||||||||
| Basic Earnings per Share |
$ | .52 | $ | .40 | $ | 1.95 | $ | 1.65 | ||||||||
| Diluted Earnings per Share |
$ | .51 | $ | .39 | $ | 1.90 | $ | 1.61 | ||||||||
| Average Earning Assets |
$ | 841,174 | $ | 793,937 | $ | 809,738 | $ | 762,397 | ||||||||
| Net Interest Margin |
5.36 | % | 5.42 | % | 5.45 | % | 5.50 | % | ||||||||
| Allowance for Loan Losses to Loans |
1.26 | % | 1.31 | % | 1.26 | % | 1.31 | % | ||||||||
| Non-performing Loans to Total Loans |
.50 | % | .16 | % | .50 | % | .16 | % | ||||||||
| Net Loan Charge-offs to Loans |
— | — | .24 | % | .17 | % | ||||||||||
| Provision for Loan Losses |
$ | 225 | $ | 650 | $ | 900 | $ | 1,150 | ||||||||
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