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 18, 2012
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 18, 2012, Cass Information Systems, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2012. 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 October 15, 2012, the Company’s board of directors approved a 10% stock dividend payable on December 14, 2012 to shareholders of record on December 5, 2012. Shareholders will receive one additional share of the Company’s common stock for each 10 shares of the Company’s common stock owned. No fractional shares will be issued. Shareholders will receive cash for any fractional shares owned based on the share price reported by The Nasdaq Stock Market at the close of trading on December 5, 2012.
Also on October 15, 2012, the Company’s board of directors declared a fourth quarter cash dividend of $0.18 per share payable on December 14, 2012 to shareholders of record on December 5, 2012. The cash dividend will apply to all shares held after the 10% stock dividend is completed.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number |
Description | |
| 99.1 | Press release issued by Cass Information Systems, Inc. dated October 18, 2012. |
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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 18, 2012
| 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 18, 2012
Cass Information Systems, Inc. Reports 3rd Quarter 2012 Earnings
Declares 10% Stock Dividend; Raises Cash Dividend
ST. LOUIS – Cass Information Systems, Inc. (NASDAQ:CASS), the nation’s leading provider of transportation, utility, telecom and environmental invoice payment and information services, reported third quarter 2012 earnings of $.58 per diluted share, matching earnings reported in the third quarter of 2011. Net income for the period was $6.1 million, identical to 2011 results.
| 3rd Quarter | % | YTD | % | |||||||||
| 2012 | 2011 | Change | 2012 | 2011 | Change | |||||||
| Transportation Dollar Volume |
$5.6 billion | $5.4 billion | 2.9 | $16.6 billion | $15.3 billion | 9.0 | ||||||
| Utility Dollar Volume |
$2.8 billion | $2.9 billion | (5.2) | $7.8 billion | $8.2 billion | (4.3) | ||||||
| Revenues |
$27.9 million | $27.3 million | 2.1 | $84.8 million | $80.0 million | 5.9 | ||||||
| Net Income |
$6.1 million | $6.1 million | .5 | $18.0 million | $17.5 million | 2.5 | ||||||
| Diluted Earnings per Share |
$.58 | $.58 | — | $1.71 | $1.68 | 1.8 | ||||||
2012 3rd Quarter Recap
Increased activity from base customers and new customers helped transportation dollar volume increase 3%. Utility dollar volume was down 5%, primarily due to lower rates for electricity and natural gas. Overall, year-to-year quarterly revenues grew 2% from $27.3 million to $27.9 million.
Net investment income decreased slightly due to the on-going decline in interest rates.
Operating expenses were up 5%, or $1.0 million, primarily due to costs related to the launch of the company’s new environmental expense service line following its acquisition of Jacksonville, Fla.-based Waste Reduction Consultants, Inc. in January.
Nine-Month 2012 Recap
For the nine-month period ended September 30, 2012, Cass earned $1.71 per diluted share, a 2% increase over the $1.68 per diluted share earned in the comparable period of 2011. Net income grew to $18.0 million, 3% higher than the $17.5 million earned in 2011. Revenues rose 6%, from $80.0 million in 2011 to $84.8 million in 2012.
Operating expenses were up 9%, or $4.8 million, with the bulk of the increase attributable to the Waste Reduction Consultants acquisition.
“While new account wins helped our transportation invoice processing operation grow volume in a tepid global economy, a dip in utility rates and historically low interest rates created a drag on earnings that produced a flat quarterly result,” commented Eric H. Brunngraber, Cass president and chief executive officer. “Just as we have endured the low-growth environments of the past by concentrating on identifying strategies that improve operating efficiency and enhance our competitive position, we are confident that Cass will resume a growth trajectory as the global economy strengthens and interest rates normalize.”
10% Stock Dividend Declared With Increase in Cash Dividend
On October 15, 2012, the company’s board of directors declared a 10% stock dividend payable December 14, 2012 to shareholders of record December 5, 2012. Shareholders will receive one additional share of Cass stock for each 10 shares owned. No fractional shares will be issued. Shareholders will receive cash for any fractional shares owned based on the share price reported by NASDAQ at the close of trading December 5, 2012.
In addition, the company’s board declared a fourth quarter cash dividend of $.18 per share payable December 14, 2012 to shareholders of record December 5, 2012. That is a one cent increase from the previous dividend per share. The upcoming cash payout will apply to all shares held after the 10% stock dividend is completed, effectively increasing the fourth quarter dividend by more than 16%. “These actions by the board reflect the company’s strong capital base, its solid performance and the board’s optimism about our future,” said Brunngraber. Cass has continuously paid regularly scheduled cash dividends since 1934.
About Cass Information Systems
Cass Information Systems is the leading provider of transportation, utility, 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 $32 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, 2011.
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, 2012 and 2011:
| Quarter Ended September 30, 2012 |
Quarter Ended September 30, 2011 |
Nine Months Ended September 30, 2012 |
Nine Months Ended September 30, 2011 |
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| Transportation Invoice Volume |
7,302 | 7,482 | 21,470 | 21,281 | ||||||||||||
| Transportation Dollar Volume |
$ | 5,599,551 | $ | 5,443,972 | $ | 16,647,242 | $ | 15,273,046 | ||||||||
| Utility Transaction Volume |
3,443 | 3,410 | 10,472 | 10,108 | ||||||||||||
| Utility Dollar Volume |
$ | 2,783,504 | $ | 2,936,417 | $ | 7,829,235 | $ | 8,184,747 | ||||||||
| Payment and Processing Fees |
$ | 16,600 | $ | 15,806 | $ | 49,712 | $ | 45,372 | ||||||||
| Net Investment Income |
10,610 | 10,884 | 31,331 | 32,952 | ||||||||||||
| Gain on Sales of Securities |
267 | — | 2,401 | 48 | ||||||||||||
| Other |
434 | 641 | 1,308 | 1,642 | ||||||||||||
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| Total Revenues |
$ | 27,911 | $ | 27,331 | $ | 84,752 | $ | 80,014 | ||||||||
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| Salaries and Benefits |
$ | 15,919 | $ | 14,425 | $ | 46,978 | $ | 42,277 | ||||||||
| Occupancy |
497 | 581 | 1,588 | 1,786 | ||||||||||||
| Equipment |
879 | 886 | 2,626 | 2,581 | ||||||||||||
| Other |
2,634 | 3,021 | 9,318 | 9,038 | ||||||||||||
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| Total Operating Expenses |
$ | 19,929 | $ | 18,913 | $ | 60,510 | $ | 55,682 | ||||||||
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| Income from Operations before Income Taxes |
$ | 7,982 | $ | 8,418 | $ | 24,242 | $ | 24,332 | ||||||||
| Income Tax Expense |
1,890 | 2,358 | 6,280 | 6,814 | ||||||||||||
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| Net Income |
$ | 6,092 | $ | 6,060 | $ | 17,962 | $ | 17,518 | ||||||||
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| Basic Earnings per Share |
$ | .59 | $ | .59 | $ | 1.74 | $ | 1.70 | ||||||||
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| Diluted Earnings per Share |
$ | .58 | $ | .58 | $ | 1.71 | $ | 1.68 | ||||||||
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| Average Earning Assets |
$ | 1,229,687 | $ | 1,219,184 | $ | 1,199,950 | $ | 1,172,182 | ||||||||
| Net Interest Margin |
3.86 | % | 4.15 | % | 4.02 | % | 4.43 | % | ||||||||
| Allowance for Loan Losses to Loans |
1.81 | % | 1.88 | % | 1.81 | % | 1.88 | % | ||||||||
| Non-performing Loans to Total Loans |
.72 | % | .93 | % | .72 | % | .93 | % | ||||||||
| Net Loan (Recoveries) Charge-offs to Loans |
.04 | % | .11 | % | .21 | % | .11 | % | ||||||||
| Provision for Loan Losses |
$ | — | $ | 550 | $ | 800 | $ | 1,850 | ||||||||