Cass Information Systems, Inc. Reports Record 2nd Quarter 2010 Earnings; 33% Increase Over Q2 2009

Cass Information Systems, Inc. (NASDAQ: CASS), the nation's leading provider of transportation, utility and telecom invoice payment and information services, reported record second quarter 2010 earnings of $.52 per fully-diluted share, a 33% increase over the $.39 per fully diluted share it earned in the second quarter of 2009. Net income for the period was $4.9 million, a nearly 34% increase over the $3.7 million reported in 2009.
 

2nd Quarter
 

%
  YTD  

%
    2010   2009   Change   2010   2009   Change
Transportation Dollar Volume  

$4.2 billion
  $3.4 billion  

23.6%
  $8.0 billion   $6.8 billion  

17.5%
Utility Dollar Volume   $2.5 billion   $2.3 billion  

8.3%
  $5.1 billion   $4.8 billion  

6.3%
Revenues   $23.8 million   $21.7 million  

9.2%
  $46.5 million   $43.4 million  

7.1%
Net Income   $4.9 million   $3.7 million  

33.8%
  $9.6 million   $7.6 million  

27.2%
Diluted Earnings per Share   $.52   $.39  

33.3%
  $1.02   $.81  

25.9%

2010 2nd Quarter Recap

Increased activity from both base customers and new customers helped transportation transaction dollar volume surge more than 23%, with utility transaction volume up a steady 8%. Overall, revenues for the quarter grew to $23.8 million, a 9% increase over the $21.7 million posted in 2009.

Operating expenses were up less than 1%, or $53,000, as Cass continued to concentrate on cost control.

Six-Month 2010 Recap

For the six months ended June 30, 2010, the company earned $1.02 per fully diluted share, a 26% increase over the $.81 per fully diluted share earned in the first half of 2009. Net income was $9.6 million, 27% higher than the $7.6 million earned in 2009. Revenues rose 7%, from $43.4 million in 2009 to $46.5 million in 2010.

Operating expenses were essentially flat compared to 2009.

“Posting our record results in the second quarter was even more gratifying with all of our businesses – transportation, utility and telecom invoice processing plus our commercial bank subsidiary – making positive contributions,” said Eric H. Brunngraber , Cass president and chief executive officer. “We believe the company is solidly positioned to capitalize on improving economic conditions. Our continuing focus will be on strategies that promise to enhance our competitive position in the markets we serve.”

Cash Dividend Declared

On July 19, 2010, the company’s board of directors declared a third quarter dividend of $.14 per share payable September 15, 2010 to shareholders of record September 3, 2010. 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 $24 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 and ranked #65 on the 2009 Fortune Small Business FSB 100 list of the fastest-growing public companies in America.

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 June 30, 2010 and 2009:
  Quarter

Ended

6/30/10
  Quarter

Ended

6/30/09
  Six Months

Ended

6/30/10
  Six Months

Ended

6/30/09
Transportation Invoice Volume 6,716 5,716 12,733 11,111
Transportation Dollar Volume $ 4,193,903 $ 3,391,822 $ 7,962,844 $ 6,778,562
Utility Transaction Volume 3,045 2,823 6,100 5,653
Utility Dollar Volume $ 2,451,775 $ 2,263,404 $ 5,059,874 $ 4,759,101
 
Payment and Processing Fees $ 13,533 $ 12,036 $ 26,278 $ 23,980
Net Investment Income 9,782 9,144 19,334 18,246
Gain on Sales of Securities

--
83

--
202
Other 435     479     915     1,018  
Total Revenues $ 23,750   $ 21,742   $ 46,527   $ 43,446  
Salaries and Benefits $ 12,683 $ 12,730 $ 25,173 $ 25,179
Occupancy 611 571 1,183 1,186
Equipment 916 833 1,814 1,674
Other 2,640     2,663     4,877     5,048  

Total Operating Expenses
$ 16,850   $ 16,797   $ 33,047   $ 33,087  

Income from Operations before Income Taxes
$ 6,900 $ 4,945 $ 13,480 $ 10,359
Provision for Income Taxes 2,000     1,284     3,831     2,775  
Net Income $ 4,900   $ 3,661   $ 9,649   $ 7,584  
Basic Earnings per Share $ .52   $ .40   $ 1.03   $ .83  
Diluted Earnings per Share $ .52   $ .39   $ 1.02   $ .81  
 
Average Earning Assets $ 1,017,818 $ 831,669 $ 1,001,350 $ 817,884
Net Interest Margin 4.77 % 5.02 % 4.77 % 5.16 %
Allowance for Loan Losses to Loans 1.49 % 1.14 % 1.49 % 1.14 %

Non-performing Loans to Total Loans
.22 % .32 % .22 % .32 %
Net Loan (Recoveries) Charge-offs to Loans

--
(.01 )% .03 % .03 %
Provision for Loan Losses $ 1,150 $ 300 $ 2,050 $ 700

Copyright Business Wire 2010

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