Cass Information Systems Inc 10-Q for FY2023 Q2

Cass Information Systems Inc (CASS)

10-Q 2023-08-07 For: 2023-06-30

Added on April 06, 2026

About this 10-Q

Cass Information Systems Inc filed this 10-Q on August 7, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).

Headline figures

Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $48.21M; up 9.0% from $44.22M a year earlier
Net income: $7.14M; down 16.6% from net income of $8.56M a year earlier
Diluted EPS: $0.52; down 16.1% from $0.62 a year earlier

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x			QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the quarterly period ended June 30, 2023

OR

o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the transition period from __________ to __________


Missouri			43-1265338
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
12444 Powerscourt Drive, Suite 550 St. Louis, Missouri			63131
(Address of principal executive offices)			(Zip Code)


PART I – Financial Information
Item 1.	FINANCIAL STATEMENTS
	Consolidated Balance Sheets June 30, 2023 (unaudited) and December 31, 2022	3
	Consolidated Statements of Income Three and Six Months Ended June 30 , 2023 and 2022 (unaudited)	4
	Consolidated Statements of Comprehensive Income Three and Six Months Ended June 30 , 2023 and 2022 (unaudited)	5
	Consolidated Statements of Cash Flows Six Months Ended June 30 , 2023 and 2022 (unaudited)	6
	Consolidated Statements of Shareholders’ Equity Three and Six Months Ended June 30 , 2023 and 2022 (unaudited)	8
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	22
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	35
Item 4.	CONTROLS AND PROCEDURES	35
PART II – Other Information – Items 1. – 6.		36
SIGNATURES		39


	June 30, 2023 (Unaudited)		December 31, 2022
Assets
Cash and due from banks	$	27,361	$	20,995
Short-term investments	243,112		179,947
Cash and cash equivalents	270,473		200,942
Securities available-for-sale, at fair value	637,513		754,468

Loans	1,055,848		1,082,906
Less: Allowance for credit losses	13,194		13,539
Loans, net	1,042,654		1,069,367
Payments in advance of funding	269,180		293,775
Premises and equipment, net	24,320		19,958
Investment in bank-owned life insurance	48,564		47,998
Goodwill	17,309		17,309
Other intangible assets, net	3,735		4,126
Accounts and drafts receivable from customers	83,627		95,779
Other assets	73,421		69,301
Total assets	$	2,470,796	$	2,573,023

Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing	$	679,107	$	642,757
Interest-bearing	512,327		614,460
Total deposits	1,191,434		1,257,217
Accounts and drafts payable	1,021,524		1,067,600
Other liabilities	42,692		41,881
Total liabilities	2,255,650		2,366,698

Shareholders’ Equity:
Preferred stock, par value $.50 per share; 2,000,000 shares authorized and no shares issued	—		—
Common stock, par value $.50 per share; 40,000,000 shares authorized and 15,505,772 shares issued at June 30, 2023 and December 31, 2022; 13,668,077 and 13,669,656 shares outstanding at June 30, 2023 and December 31, 2022, respectively.	7,753		7,753
Additional paid-in capital	206,734		207,422
Retained earnings	137,996		131,682
Common shares in treasury, at cost (1,837,695 shares at June 30, 2023 and 1,836,116 shares at December 31, 2022)	(80,943)		(81,211)
Accumulated other comprehensive loss	(56,394)		(59,321)
Total shareholders’ equity	215,146		206,325
Total liabilities and shareholders’ equity	$	2,470,796	$	2,573,023


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Fee Revenue and Other Income:
Processing fees	$	19,386	$	19,184	$	38,899	$	38,220
Financial fees	11,662		10,623		22,921		21,155
Other	1,025		844		2,360		1,706
Total fee revenue and other income	32,073		30,651		64,180		61,081

Interest Income:
Interest and fees on loans	12,931		9,107		25,166		17,884
Interest and dividends on securities:
Taxable	3,688		2,276		7,274		3,732
Exempt from federal income taxes	989		1,639		2,197		3,316
Interest on federal funds sold and other short-term investments	2,100		958		5,213		1,174
Total interest income	19,708		13,980		39,850		26,106

Interest Expense:
Interest on deposits	3,651		339		6,822		562
Interest on short-term borrowings	43		—		116		—
Total interest expense	3,694		339		6,938		562
Net interest income	16,014		13,641		32,912		25,544
(Release of) provision for credit losses	(120)		70		(460)		300
Net interest income after (release of) provision for credit losses	16,134		13,571		33,372		25,244
Total net revenue	48,207		44,222		97,552		86,325

Operating Expense:
Personnel	29,432		26,033		59,458		50,751
Occupancy	907		916		1,762		1,831
Equipment	1,749		1,660		3,399		3,371
Amortization of intangible assets	195		155		390		290
Other operating expense	7,056		4,875		14,702		9,224
Total operating expense	39,339		33,639		79,711		65,467
Income before income tax expense	8,868		10,583		17,841		20,858
Income tax expense	1,730		2,021		3,586		4,038
Net income	$	7,138	$	8,562	$	14,255	$	16,820

Basic earnings per share	$	.53	$	.63	$	1.05	$	1.24
Diluted earnings per share	.52		.62		1.03		1.22


	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total
Balance, March 31, 2022	$	7,753	$	203,149	$	116,646	$	(82,348)	$	(28,122)	$	217,078
Net income					8,562						8,562
Cash dividends ($0.28 per share)					(3,822)						(3,822)
Issuance of 18,637 common shares pursuant to stock-based compensation plan, net			(749)				819				70

Stock-based compensation expense			2,082								2,082
Purchase of 5,500 common shares							(213)				(213)
Other comprehensive loss									(18,143)		(18,143)
Balance, June 30, 2022	$	7,753	$	204,482	$	121,386	$	(81,742)	$	(46,265)	$	205,614


Balance, March 31, 2023	$	7,753	$	206,614	$	134,822	$	(79,419)	$	(52,270)	$	217,500
Net income					7,138						7,138
Cash dividends ($0.29 per share)					(3,964)						(3,964)
Issuance of 19,687 common shares pursuant to stock-based compensation plan, net			(807)				871				64

Stock-based compensation expense			927				(18)				909
Purchase of 63,305 common shares							(2,377)				(2,377)
Other comprehensive loss									(4,124)		(4,124)
Balance, June 30, 2023	$	7,753	$	206,734	$	137,996	$	(80,943)	$	(56,394)	$	215,146


	June 30, 2023				December 31, 2022
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Assets eligible for amortization:
Customer lists	$	6,470	$	(4,706)	$	6,470	$	(4,561)
Patents	72		(34)		72		(32)
Software	3,212		(1,721)		3,212		(1,508)
Trade name	373		(56)		373		(42)
Other	500		(375)		500		(358)
Unamortized intangible assets:
Goodwill	17,309		—		17,309		—
Total intangible assets	$	27,936	$	(6,892)	$	27,936	$	(6,501)


(In thousands except share and per share data)	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Basic
Net income	$	7,138	$	8,562	$	14,255	$	16,820
Weighted-average common shares outstanding	13,553,346		13,542,677		13,576,281		13,560,237
Basic earnings per share	$	0.53	$	0.63	$	1.05	$	1.24

Diluted
Net income	$	7,138	$	8,562	$	14,255	$	16,820
Weighted-average common shares outstanding	13,553,346		13,542,677		13,576,281		13,560,237
Effect of dilutive restricted stock and stock appreciation rights	300,696		258,864		282,412		247,611
Weighted-average common shares outstanding assuming dilution	13,854,042		13,801,541		13,858,693		13,807,848
Diluted earnings per share	$	0.52	$	0.62	$	1.03	$	1.22


(In thousands)	Information Services		Banking Services		Corporate, Eliminations and Other		Total
Three Months Ended June 30, 2023:
Fee income	$	31,360	$	626	$	87	$	32,073
Interest income	9,463		13,829		(3,584)		19,708
Interest expense	69		7,340		(3,715)		3,694
Intersegment income (expense)	(1,062)		1,062		—		—
Tax-equivalized pre-tax income	5,873		2,776		219		8,868
Goodwill	17,173		136		—		17,309
Other intangible assets, net	3,735		—		—		3,735
Total assets	1,602,932		1,150,293		(282,429)		2,470,796
Average funding sources	1,327,251		784,068		—		2,111,319
Three Months Ended June 30, 2022:
Fee income	$	29,660	$	717	$	274	$	30,651
Interest income	5,778		9,336		(1,134)		13,980
Interest expense	34		328		(23)		339
Intersegment income (expense)	(910)		910		—		—
Tax-equivalized pre-tax income	5,980		5,441		(838)		10,583
Goodwill	17,173		136		—		17,309
Other intangible assets, net	4,516		—		—		4,516
Total assets	1,376,262		1,086,799		(19,073)		2,443,988
Average funding sources	1,390,567		974,681		—		2,365,248
Six Months Ended June 30, 2023:
Fee income	$	62,437	$	1,337	$	406	$	64,180
Interest income	18,910		27,006		(6,066)		39,850
Interest expense	167		12,773		(6,002)		6,938
Intersegment income (expense)	(1,976)		1,976		—		—
Tax-equivalized pre-tax income	10,864		6,635		342		17,841
Goodwill	17,173		136		—		17,309
Other intangible assets, net	3,735		—		—		3,735
Total assets	1,602,932		1,150,293		(282,429)		2,470,796
Average funding sources	1,342,061		833,207		—		2,175,268
Six Months Ended June 30, 2022:
Fee income	$	58,844	$	1,670	$	567	$	61,081
Interest income	10,128		18,189		(2,211)		26,106
Interest expense	40		553		(31)		562
Intersegment income (expense)	(1,674)		1,674		—		—
Tax-equivalized pre-tax income	11,870		10,602		(1,614)		20,858
Goodwill	17,173		136		—		17,309
Other intangible assets, net	4,516		—		—		4,516
Total assets	1,376,262		1,086,799		(19,073)		2,443,988
Average funding sources	1,339,769		970,772		—		2,310,541


(In thousands)	June 30, 2023		December 31, 2022
Commercial and industrial	$	534,128	$	561,616
Real estate:
Commercial:
Mortgage	115,335		108,166
Construction	20,330		17,874
Faith-based:
Mortgage	376,127		387,114
Construction	9,928		8,094
Other	—		42
Total loans	$	1,055,848	$	1,082,906


	Performing						Nonperforming
(In thousands)	Current		30-59 Days		60-89 Days		90 Days and Over		Non- accrual		Total Loans
June 30, 2023
Commercial and industrial	$	534,128	$	—	$	—	$	—	$	—	$	534,128
Real estate
Commercial:
Mortgage	115,335		—		—		—		—		115,335
Construction	20,330		—		—		—		—		20,330
Faith-based:
Mortgage	376,127		—		—		—		—		376,127
Construction	9,928		—		—		—		—		9,928


Total	$	1,055,848	$	—	$	—	$	—	$	—	$	1,055,848
December 31, 2022
Commercial and industrial	$	560,466	$	—	$	—	$	—	$	1,150	$	561,616
Real estate
Commercial:
Mortgage	108,166		—		—		—		—		108,166
Construction	17,874		—		—		—		—		17,874
Faith-based:
Mortgage	387,114		—		—		—		—		387,114
Construction	8,094		—		—		—		—		8,094

Other	42		—		—		—		—		42
Total	$	1,081,756	$	—	$	—	$	—	$	1,150	$	1,082,906


(In thousands)	Loans Subject to Normal Monitoring1		Performing Loans Subject to Special Monitoring2		Nonperforming Loans Subject to Special Monitoring2		Total Loans
June 30, 2023
Commercial and industrial	$	523,176	$	10,952	$	—	$	534,128
Real estate
Commercial:
Mortgage	115,335		—		—		115,335
Construction	20,330		—		—		20,330
Faith-based:
Mortgage	369,338		6,789		—		376,127
Construction	9,928		—		—		9,928


Total	$	1,038,107	$	17,741	$	—	$	1,055,848
December 31, 2022
Commercial and industrial	$	549,241	$	11,225	$	1,150	$	561,616
Real estate
Commercial:
Mortgage	108,166		—		—		108,166
Construction	17,874		—		—		17,874
Faith-based:
Mortgage	386,169		945		—		387,114
Construction	8,094		—		—		8,094

Other	42		—		—		42
Total	$	1,069,586	$	12,170	$	1,150	$	1,082,906


1 Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk, who have the apparent ability to satisfy their loan obligations.
2 Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a high level of management attention.


(In thousands)	Payment Delay		Term Extension		Interest Rate Reduction		Combination Term Extension and Interest Rate Reduction		Percentage of Total Loans Held for Investment
June 30, 2023
Commercial and industrial	$	—	$	10,952	$	—	$	—	2.05	%









Total	$	—	$	10,952	$	—	$	—	1.04	%


(In thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due
June 30, 2023
Commercial and industrial	$	10,952	$	—	$	—	$	—	$	—









Total	$	10,952	$	—	$	—	$	—	$	—


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Comprehensive Income:
Net income	$	7,138	$	8,562	$	14,255	$	16,820
Other comprehensive income (loss):
Net unrealized (loss) gain on securities available-for-sale	(5,627)		(23,538)		3,554		(61,037)
Tax effect	1,339		5,602		(846)		14,527
Reclassification adjustments for losses (gains) included in net income	199		(2)		160		(2)
Tax effect	(47)		—		(38)		—
Foreign currency translation adjustments	12		(209)		97		(210)
Total comprehensive income (loss)	$	3,014	$	(9,585)	$	17,182	$	(29,902)


	Six Months Ended June 30,
	2023		2022
Cash Flows From Operating Activities:
Net income	$	14,255	$	16,820
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets	390		290
Net amortization of premium/discount on investment securities	2,287		3,321
Depreciation	2,028		2,036
Losses (gains) on sales of securities	160		(2)
Stock-based compensation expense	2,859		3,172
(Release of) provision for credit losses	(460)		300

(Decrease) increase in current income tax liability	(1,036)		634
Increase (decrease) in pension liability	224		(1,274)
Increase in accounts receivable	(5,446)		(1,805)
Other operating activities, net	1,712		7,570
Net cash provided by operating activities	16,973		31,062

Cash Flows From Investing Activities:
Proceeds from sales of securities available-for-sale	111,053		1,521
Proceeds from maturities of securities available-for-sale	22,501		30,357
Purchase of securities available-for-sale	(15,332)		(162,853)
Net decrease in loans	27,058		1,092
Purchase of bank-owned life insurance	—		(4,259)
Asset acquisition of Touchpoint	—		(4,425)
Decrease (increase) in payments in advance of funding	24,595		(21,745)
Purchases of premises and equipment, net	(6,390)		(3,393)
Net cash provided by (used in) investing activities	163,485		(163,705)

Cash Flows From Financing Activities:
Net increase in noninterest-bearing demand deposits	36,350		21,850
Net decrease in interest-bearing demand and savings deposits	(122,399)		(48,982)
Net increase (decrease) in time deposits	20,266		(4,796)
Net decrease (increase) in accounts and drafts receivable from customers	12,152		(24,139)

Net decrease in accounts and drafts payable	(46,076)		(51,526)
Cash dividends paid	(7,941)		(7,654)
Purchase of common shares for treasury	(2,377)		(5,299)
Other financing activities, net	(902)		(505)


	Six Months Ended June 30, 2023
	Shares	Fair Value
Balance at December 31, 2022	205,565	$	42.64
Granted	54,722	44.78
Vested	(21,691)	53.16
Forfeitures	(398)	40.15
Balance at June 30, 2023	238,198	$	42.18


	Six Months Ended June 30, 2023
	Shares	Fair Value
Balance at December 31, 2022	138,785	$	43.19
Granted	51,453	48.19
Vested	(30,567)	54.02
Forfeitures	(598)	40.15
Balance at June 30, 2023	159,073	$	42.74


(In thousands)	C&I		CRE		Faith-based CRE		Construction		Total
Balance at December 31, 2021	$	5,034	$	1,031	$	5,684	$	292	$	12,041
Provision for (release of) credit losses	931		(91)		753		(108)		1,485
Recoveries	13		—		—		—		13
Balance at December 31, 2022	$	5,978	$	940	$	6,437	$	184	$	13,539

(Release of) provision for credit losses (1)	(282)		42		(130)		25		(345)
Recoveries	—		—		—		—		—
Balance at June 30, 2023	$	5,696	$	982	$	6,307	$	209	$	13,194


(1)			For the six month period ended June 30, 2023 and year-ended December 31, 2022, there was a release of credit losses of $115,000 and $135,000, respectively, for unfunded commitments.


	Shares	Weighted- Average Exercise Price		Average Remaining Contractual Term Years	Aggregate Intrinsic Value (In thousands)
Balance at December 31, 2022	46,325	$	41.62	0.73	$	192
Exercised	(15,916)	31.92		—	—

Exercisable at June 30, 2023	30,409	$	46.70	0.59	$	—


(In thousands)	Estimated 2023		Actual 2022

Interest cost on projected benefit obligations	$	4,375	$	3,293
Expected return on plan assets	(3,977)		(5,857)

Net periodic pension cost (benefit)	$	398	$	(2,564)


(In thousands)	Estimated 2023		Actual 2022

Interest cost on projected benefit obligation	$	472	$	318
Net amortization	—		108
Net periodic pension cost	$	472	$	426


	June 30, 2023
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
State and political subdivisions	$	243,231	$	1	$	19,799	$	223,433
Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	196,521		—		32,669		163,852
Corporate bonds	111,231		—		10,068		101,163
Treasury securities	109,666		—		2,770		106,896
Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	43,729		—		1,560		42,169
Total	$	704,378	$	1	$	66,866	$	637,513


	June 30, 2023
	Less than 12 months				12 months or more				Total
(In thousands)	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
State and political subdivisions	$	104,329	$	1,171	$	118,103	$	18,628	$	222,432	$	19,799
Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	11,581		608		152,271		32,061		163,852		32,669
Corporate bonds	14,846		155		81,318		9,913		96,164		10,068
Treasury securities	9,656		247		97,240		2,523		106,896		2,770
Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	—		—		42,169		1,560		42,169		1,560
Total	$	140,412	$	2,181	$	491,101	$	64,685	$	631,513	$	66,866


	June 30, 2023
(In thousands)	Amortized Cost		Fair Value
Due in 1 year or less	$	114,522	$	111,901
Due after 1 year through 5 years	144,547		141,874
Due after 5 years through 10 years	205,751		179,827
Due after 10 years	239,558		203,911
Total	$	704,378	$	637,513


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In thousands)	2023		2022		2023		2022
Fee revenue and other income
In-scope of FASB ASC 606
Processing fees	$	19,386	$	19,184	$	38,899	$	38,220
Financial fees	11,662		10,623		22,921		21,155
Information services payment and processing revenue	31,048		29,807		61,820		59,375
Bank service fees	253		423		517		852
Fee revenue (in-scope of FASB ASC 606)	31,301		30,230		62,337		60,227
Other income (out-of-scope of FASB ASC 606)	772		421		1,843		854
Total fee revenue and other income	$	32,073	$	30,651	$	64,180	$	61,081


(In thousands)	June 30, 2023
Lease payments due
Less than 1 year	$	1,337
1-2 years	1,333
2-3 years	1,359
3-4 years	1,343
4-5 years	1,370
Over 5 years	3,531
Total undiscounted cash flows	10,273
Discount on cash flows	1,280
Total lease liability	$	8,993


(In thousands except per share data)	Second Quarter of								First Half of
	2023			2022			% Change		2023			2022			% Change
Processing fees	$	19,386		$	19,184		1.1	%	$	38,899		$	38,220		1.8	%
Financial fees	11,662			10,623			9.8	%	22,921			21,155			8.3	%
Net interest income	16,014			13,641			17.4	%	32,912			25,544			28.8	%
(Release of) provision for credit loss	(120)			70			(271.4)	%	(460)			300			(253.3)	%
Other	1,025			844			21.4	%	2,360			1,706			38.3	%
Total revenues	48,207			44,222			9.0	%	97,552			86,325			13.0	%
Operating expense	39,339			33,639			16.9	%	79,711			65,467			21.8	%
Income before income tax expense	8,868			10,583			(16.2)	%	17,841			20,858			(14.5)	%
Income tax expense	1,730			2,021			(14.4)	%	3,586			4,038			(11.2)	%
Net income	$	7,138		$	8,562		(16.6)	%	$	14,255		$	16,820		(15.2)	%
Diluted earnings per share	$	0.52		$	0.62		(16.1)	%	$	1.03		$	1.22		(15.6)	%
Return on average assets	1.21		%	1.31		%	—		1.18		%	1.32		%	—
Return on average equity	13.37		%	16.53		%	—		13.56		%	15.30		%	—


(In thousands)	Second Quarter of 2023						Second Quarter of 2022
	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Assets1
Interest-earning assets
Loans2:	$	1,075,891	$	12,931	4.82	%	$	973,871	$	9,107	3.75	%
Investment securities3:
Taxable	561,989		3,687		2.63	%	513,474		2,275		1.78	%
Tax-exempt4	187,661		1,253		2.68	%	284,366		2,075		2.93	%

Short-term investments	185,230		2,100		4.55	%	450,942		959		0.85	%
Total interest-earning assets	2,010,771		19,971		3.98	%	2,222,653		14,416		2.60	%
Non-interest-earning assets
Cash and due from banks	24,461						19,088
Premises and equipment, net	22,932						19,345
Bank-owned life insurance	48,391						47,267
Goodwill and other intangibles	21,159						18,089
Payments in advance of funding	254,869						293,150
Unrealized loss on investment securities	(62,873)						(42,038)
Other assets	63,902						51,083
Allowance for credit losses	(13,253)						(12,417)
Total assets	$	2,370,359					$	2,616,220
Liabilities and Shareholders’ Equity1
Interest-bearing liabilities
Interest-bearing demand deposits	$	442,686	$	3,229	2.93	%	$	550,938	$	266	0.19	%
Savings deposits	6,457		26		1.62	%	12,894		3		0.09	%
Time deposits >= $100	21,934		151		2.76	%	16,926		36		0.85	%
Other time deposits	38,243		245		2.57	%	25,082		34		0.54	%
Total interest-bearing deposits	509,320		3,651		2.88	%	605,840		339		0.22	%
Short-term borrowings	3,199		43		5.39	%	21		—		—	%
Total interest-bearing liabilities	512,519		3,694		2.89	%	605,861		339		0.22	%
Non-interest bearing liabilities
Demand deposits	552,718						623,904
Accounts and drafts payable	1,049,281						1,135,504
Other liabilities	41,775						43,123
Total liabilities	2,156,293						2,408,392
Shareholders’ equity	214,066						207,828
Total liabilities and shareholders’ equity	$	2,370,359					$	2,616,220
Net interest income			$	16,277					$	14,077
Net interest margin					3.25	%					2.54	%
Interest spread					1.09	%					2.38	%


(In thousands)	First Half of 2023						First Half of 2022
	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Assets1
Interest-earning assets
Loans2:
Taxable	$	1,076,055	$	25,166	4.72	%	$	966,900	$	17,884	3.73	%
Investment securities3:
Taxable	566,804		7,274		2.59	%	454,681		3,732		1.66	%
Tax-exempt4	203,587		2,781		2.75	%	289,729		4,198		2.92	%

Short-term investments	239,886		5,213		4.38	%	461,750		1,174		0.51	%
Total interest-earning assets	2,086,332		40,434		3.91	%	2,173,060		26,988		2.50	%
Non-interest-earning assets:
Cash and due from banks	23,260						20,924
Premises and equipment, net	21,689						19,027
Bank-owned life insurance	48,252						45,228
Goodwill and other intangibles	21,257						17,434
Payments in advance of funding	247,918						286,352
Unrealized loss on investment securities	(64,689)						(21,805)
Other assets	63,869						44,497
Allowance for credit losses	(13,394)						(12,232)
Total assets	$	2,434,494					$	2,572,485
Liabilities and Shareholders’ Equity1
Interest-bearing liabilities:
Interest-bearing demand deposits	$	482,825	$	6,053	2.53	%	$	540,771	$	402	0.15	%
Savings deposits	6,778		48		1.43	%	15,178		5		0.07	%
Time deposits >= $100	22,863		260		2.29	%	17,424		78		0.90	%
Other time deposits	37,519		461		2.48	%	26,111		77		0.59	%
Total interest-bearing deposits	549,985		6,822		2.50	%	599,484		562		0.19	%
Short-term borrowings	4,509		116		5.19	%	10		—		—	%
Total interest-bearing liabilities	554,494		6,938		2.52	%	599,494		562		0.19	%
Non-interest bearing liabilities:
Demand deposits	553,178						599,122
Accounts and drafts payable	1,072,105						1,111,935
Other liabilities	42,777						40,237
Total liabilities	2,222,554						2,350,788
Shareholders’ equity	211,940						221,697
Total liabilities and shareholders’ equity	$	2,434,494					$	2,572,485
Net interest income			$	33,496					$	26,426
Net interest margin					3.24	%					2.45	%
Interest spread					1.39	%					2.31	%


(In thousands)	Second Quarter of 2023 Compared to Second Quarter of 2022
	Volume		Rate		Total
Increase (decrease) in interest income:
Loans1:	$	1,027	$	2,797	$	3,824
Investment securities:
Taxable	233		1,179		1,412
Tax-exempt2	(657)		(165)		(822)

Short-term investments	(856)		1,997		1,141
Total interest income	(253)		5,808		5,555
Interest expense on:
Interest-bearing demand deposits	(61)		3,024		2,963
Savings deposits	(2)		25		23
Time deposits >=$100	13		102		115
Other time deposits	26		185		211
Short-term borrowings	—		43		43
Total interest expense	(24)		3,379		3,355
Net interest income	$	(229)	$	2,429	$	2,200


(In thousands)	First Half of 2023 Compared to First Half of 2022
	Volume		Rate		Total
Increase (decrease) in interest income:
Loans1:
Taxable	$	2,173	$	5,109	$	7,282
Investment securities:
Taxable	1,083		2,459		3,542
Tax-exempt2	(1,185)		(232)		(1,417)

Short-term investments	(815)		4,854		4,039
Total interest income	1,256		12,190		13,446
Interest expense on:
Interest-bearing demand deposits	(48)		5,699		5,651
Savings deposits	(4)		47		43
Time deposits >=$100	31		151		182
Other time deposits	46		338		384
Short-term borrowings	—		116		116
Total interest expense	25		6,351		6,376
Net interest income	$	1,231	$	5,839	$	7,070


	Actual				Capital Requirements				Requirement to be Well-Capitalized
(In thousands)	Amount		Ratio		Amount		Ratio		Amount	Ratio
At June 30, 2023
Total capital (to risk-weighted assets)
Cass Information Systems, Inc.	$	263,467	14.39	%	$	146,482	8.00	%	$ N/A	N/A %
Cass Commercial Bank	191,355		17.06		89,726		8.00		112,157	10.00
Common Equity Tier I Capital (to risk-weighted assets)
Cass Information Systems, Inc.	250,156		13.66		82,396		4.50		N/A	N/A
Cass Commercial Bank	178,800		15.94		50,471		4.50		72,902	6.50
Tier I capital (to risk-weighted assets)
Cass Information Systems, Inc.	250,156		13.66		109,862		6.00		N/A	N/A
Cass Commercial Bank	178,800		15.94		67,294		6.00		89,726	8.00
Tier I capital (to average assets)
Cass Information Systems, Inc.	250,156		10.65		93,973		4.00		N/A	N/A
Cass Commercial Bank	178,800		12.37		57,839		4.00		72,299	5.00
At December 31, 2022
Total capital (to risk-weighted assets)
Cass Information Systems, Inc.	$	257,313	13.52	%	$	152,306	8.00	%	$ N/A	N/A %
Cass Commercial Bank	186,075		16.00		93,044		8.00		116,305	10.00
Common Equity Tier I Capital (to risk-weighted assets)
Cass Information Systems, Inc.	243,774		12.80		85,672		4.50		N/A	N/A
Cass Commercial Bank	172,848		14.86		52,337		4.50		75,598	6.50
Tier I capital (to risk-weighted assets)
Cass Information Systems, Inc.	243,774		12.80		114,229		6.00		N/A	N/A
Cass Commercial Bank	172,848		14.86		69,783		6.00		93,044	8.00
Tier I capital (to average assets)
Cass Information Systems, Inc.	243,771		9.52		102,386		4.00		N/A	N/A
Cass Commercial Bank	172,848		10.77		64,196		4.00		80,245	5.00


	% change in projected net interest income
		June 30, 2023		December 31, 2022
+200 basis points		12.7	%	10.6	%
+100 basis points		7.4	%	4.2	%
Flat rates		—	%	—	%
-100 basis points		(3.3)	%	—	%
-200 basis points		(5.7)	%	(1.5)	%


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs1	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2023–April 30, 2023	13,678	$	37.10	13,678	327,029
May 1, 2023–May 31, 2023	45,921	37.56		45,921	281,108
June 1, 2023–June 30, 2023	3,706	39.13		3,706	277,402
Total	63,305	$	37.55	63,305	277,402


Exhibit 10.1 Cass Information Systems, Inc. 2023 Omnibus Stock and Performance Compensation Plan, incorporated by reference to Exhibit 10.1 to the current report on Form 8-K, filed with the SEC on April 21, 2023.*

Exhibit 10.2 Form of Employee Restricted Stock Award Agreement under the Cass Information Systems, Inc. 2023 Omnibus Stock and Performance Compensation Plan, incorporated by reference to Exhibit 10.2 to the current report on Form 8-K, filed with the SEC on April 21, 2023.*

Exhibit 10.3 Form of Non-Employee Director Restricted Stock Award Agreement under the Cass Information Systems, Inc. 2023 Omnibus Stock and Perfo r m ance Compensation Plan, incorporated by reference to Exhibit 10.3 to the quarterly report on Form 10-Q filed with the SEC on May 9, 2023.

Exhibit 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101.INS XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Exhibit 101.SCH Inline XBRL Taxonomy Extension Schema Document.

Exhibit 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Exhibit 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.

Exhibit 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Exhibit 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.

Exhibit 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*Management contract or compensatory plan arrangement.


	CASS INFORMATION SYSTEMS, INC.

DATE: August 7, 2023	By	/s/ Martin H. Resch
		Martin H. Resch
		President and Chief Executive Officer
		(Principal Executive Officer)



DATE: August 7, 2023	By	/s/ Michael J. Normile
		Michael J. Normile
		Executive Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)