Cass Information Systems, Inc. Reports 2nd Quarter 2013 Earnings

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 2013 earnings of $.52 per diluted share, equaling the earnings it reported in the second quarter of 2012. Net income for the period was $6.1 million, slightly higher than the $6.0 million reported in 2012.
 
         

2nd Quarter
                YTD        
        2013         2012    

%Change
    2013         2012    

%Change
 
  Transportation Dollar Volume     $5.9 billion     $5.7 billion     3.6%     $11.3 billion     $11.0 billion     2.1%  
 

Facility Expense Dollar Volume*
    $2.8 billion     $2.6 billion     5.7%     $5.4 billion     $5.4 billion     .9%  
  Revenues     $29.2 million     $28.4 million     2.8%     $57.6 million     $56.8 million     1.4%  
  Net Income     $6.1 million     $6.0 million     1.9%     $12.1 million     $11.9 million     2.0%  
  Diluted Earnings per Share         $.52         $.52        

--
        $1.04         $1.03         1.0%  

*Includes Energy, Telecom and Environmental
 

2013 2nd Quarter Recap

The primary impediment to earnings growth remained a historically low interest rate environment that continues to erode the company’s net interest margin. In the second quarter, Cass net investment income declined by $.5 million, or 5%.

Conversely, transaction volume, which generates fee income, increased in the transportation, telecom and environmental sectors despite an idling economy. Partially offsetting growth in those sectors were lower volumes in the energy marketplace, where recent competitor consolidation is affecting customer retention, even as new sales remain strong.

Operating expenses were up for the quarter due to higher salary and benefit expenses.

“Factoring the sizable drag that low interest rates and lackluster economic growth exert on profitability, we are satisfied to post second quarter earnings consistent with year-ago results,” said Eric Brunngraber, Cass president and chief executive officer. “Although interest rates have remained historically low for nearly five years, the impact on Cass becomes more pronounced as longer-term, higher-yielding assets re-price, mature or are sold. We continue to respond by focusing our energies on our long-term objective of efficiently fostering growth across all business lines and positioning our company to benefit when the economy and interest rates improve.”

Six-Month 2013 Recap

For the six-month period ended June 30, 2013, the company earned $1.04 per diluted share, a 1% increase over the $1.03 per diluted share earned in the first half of 2012. Net income was $12.1 million, 2% higher than the $11.9 million earned in 2012. Revenues rose 1%, from $56.8 million in 2012 to $57.6 million in 2013.

Operating expenses were up 2%, or $.8 million, for the reasons previously cited.

Cash Dividend Declared

On July 15, 2013, the company’s board of directors declared a third quarter dividend of $.18 per share payable September 16, 2013 to shareholders of record September 5, 2013. 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 $33 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, 2012.
 

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, 2013 and 2012:
 
    Quarter

Ended

June 30, 2013
    Quarter

Ended

June 30, 2012
    Six Months

Ended

June 30, 2013
    Six Months

Ended

June 30, 2012
Transportation Invoice Volume 7,935 7,295 15,279 14,168
Transportation Dollar Volume $ 5,869,694 $ 5,665,600 $ 11,285,059 $ 11,047,691
Facility Expense Transaction Volume 4,800 4,556 9,418 9,133
Facility Expense Dollar Volume $ 2,762,513 $ 2,613,459 $ 5,402,756 $ 5,356,987
 
Payment and Processing Fees $ 17,448 $ 16,625 $ 34,024 $ 33,112
Net Investment Income 9,629 10,170 19,598 20,721
Gain on Sales of Securities 1,684 1,168 3,137 2,134
Other   435     444     871     874  
Total Revenues $ 29,196   $ 28,407   $ 57,630   $ 56,841  
Salaries and Benefits $ 16,280 $ 15,498 $ 32,538 $ 31,059
Occupancy 735 559 1,344 1,091
Equipment 923 884 1,831 1,747
Other   3,079     3,299     5,693     6,684  

Total Operating Expenses
$ 21,017   $ 20,240   $ 41,406   $ 40,581  
Income from Operations before Income Taxes $ 8,179 $ 8,167 $ 16,224 $ 16,260
Income Tax Expense   2,106     2,205     4,119     4,390  
Net Income $ 6,073   $ 5,962   $ 12,105   $ 11,870  
Basic Earnings per Share $ .53   $ .53   $ 1.06   $ 1.05  
Diluted Earnings per Share $ .52   $ .52   $ 1.04   $ 1.03  
 
Average Earning Assets $ 1,176,943 $ 1,176,084 $ 1,171,498 $ 1,184,918
Net Interest Margin 3.77 % 4.13 % 3.86 % 4.11 %
Allowance for Loan Losses to Loans 1.69 % 1.82 % 1.69 % 1.82 %
Non-performing Loans to Total Loans .13 % .86 % .13 % .86 %
Net Loan (Recoveries) Charge-offs to Loans

--
.13 % .22 % .16 %
Provision for Loan Losses $ 300 $ 600 $ 500 $ 800
 

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX