Cass Information Systems Inc 10-Q for FY2023 Q3

Cass Information Systems Inc (CASS)

10-Q 2023-11-07 For: 2023-09-30

Added on April 06, 2026

About this 10-Q

Cass Information Systems Inc filed this 10-Q on November 7, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

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

Revenue: $49.22M; up 4.3% from $47.21M a year earlier
Net income: $7.39M; down 16.0% from net income of $8.8M a year earlier
Diluted EPS: $0.54; down 15.6% from $0.64 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 September 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 September 30, 2023 (unaudited) and December 31, 2022	3
	Consolidated Statements of Income Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)	4
	Consolidated Statements of Comprehensive Income Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)	5
	Consolidated Statements of Cash Flows Nine Months Ended September 30, 2023 and 2022 (unaudited)	6
	Consolidated Statements of Shareholders’ Equity Three and Nine Months Ended September 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	23
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36
Item 4.	CONTROLS AND PROCEDURES	36
PART II – Other Information – Items 1. – 6.		37
SIGNATURES		40


	September 30, 2023 (Unaudited)		December 31, 2022
Assets
Cash and due from banks	$	23,550	$	20,995
Short-term investments	384,885		179,947
Cash and cash equivalents	408,435		200,942
Securities available-for-sale, at fair value	615,855		754,468

Loans	1,039,619		1,082,906
Less: Allowance for credit losses	13,319		13,539
Loans, net	1,026,300		1,069,367
Payments in advance of funding	258,587		293,775
Premises and equipment, net	26,257		19,958
Investment in bank-owned life insurance	48,857		47,998
Goodwill	17,309		17,309
Other intangible assets, net	3,540		4,126
Accounts and drafts receivable from customers	28,710		95,779
Other assets	71,028		69,301
Total assets	$	2,504,878	$	2,573,023

Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing	$	511,292	$	642,757
Interest-bearing	666,050		614,460
Total deposits	1,177,342		1,257,217
Accounts and drafts payable	1,082,224		1,067,600
Other liabilities	39,076		41,881
Total liabilities	2,298,642		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 September 30, 2023 and December 31, 2022; 13,596,490 and 13,669,656 shares outstanding at September 30, 2023 and December 31, 2022, respectively.	7,753		7,753
Additional paid-in capital	207,663		207,422
Retained earnings	141,444		131,682
Common shares in treasury, at cost (1,909,282 shares at September 30, 2023 and 1,836,116 shares at December 31, 2022)	(83,704)		(81,211)
Accumulated other comprehensive loss	(66,920)		(59,321)
Total shareholders’ equity	206,236		206,325
Total liabilities and shareholders’ equity	$	2,504,878	$	2,573,023


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Fee Revenue and Other Income:
Processing fees	$	19,939	$	18,964	$	58,838	$	57,184
Financial fees	11,597		11,252		34,518		32,406
Other	1,264		1,568		3,624		3,275
Total fee revenue and other income	32,800		31,784		96,980		92,865

Interest Income:
Interest and fees on loans	12,863		10,006		38,029		27,890
Interest and dividends on securities:
Taxable	3,428		2,947		10,702		6,679
Exempt from federal income taxes	964		1,551		3,161		4,867
Interest on federal funds sold and other short-term investments	3,934		2,249		9,147		3,423
Total interest income	21,189		16,753		61,039		42,859

Interest Expense:
Interest on deposits	4,641		782		11,463		1,344
Interest on short-term borrowings	—		—		116		—
Total interest expense	4,641		782		11,579		1,344
Net interest income	16,548		15,971		49,460		41,515
Provision for (release of) credit losses	125		550		(335)		850
Net interest income after provision for (release of) credit losses	16,423		15,421		49,795		40,665
Total net revenue	49,223		47,205		146,775		133,530

Operating Expense:
Personnel	29,636		26,999		89,094		77,750
Occupancy	908		970		2,670		2,801
Equipment	1,789		1,633		5,188		5,004
Amortization of intangible assets	195		195		585		485
Other operating expense	7,535		6,524		22,237		15,748
Total operating expense	40,063		36,321		119,774		101,788
Income before income tax expense	9,160		10,884		27,001		31,742
Income tax expense	1,766		2,085		5,352		6,123
Net income	$	7,394	$	8,799	$	21,649	$	25,619

Basic earnings per share	$	.55	$	.65	$	1.60	$	1.89
Diluted earnings per share	.54		.64		1.56		1.86


	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total
Balance, June 30, 2022	$	7,753	$	204,482	$	121,386	$	(81,742)	$	(46,265)	$	205,614
Net income					8,799						8,799
Cash dividends ($0.28 per share)					(3,824)						(3,824)
Issuance of 3,487 common shares pursuant to stock-based compensation plan, net			(165)				118				(47)

Stock-based compensation expense			1,307								1,307

Other comprehensive loss									(20,114)		(20,114)
Balance, September 30, 2022	$	7,753	$	205,624	$	126,361	$	(81,624)	$	(66,379)	$	191,735


Balance, June 30, 2023	$	7,753	$	206,734	$	137,996	$	(80,943)	$	(56,394)	$	215,146
Net income					7,394						7,394
Cash dividends ($0.29 per share)					(3,946)						(3,946)
Issuance of 1,685 common shares pursuant to stock-based compensation plans, net			(9)				74				65
Exercise of SARs			—				—				—
Stock-based compensation expense			938				—				938
Purchase of 73,272 common shares							(2,835)				(2,835)
Other comprehensive loss									(10,526)		(10,526)
Balance, September 30, 2023	$	7,753	$	207,663	$	141,444	$	(83,704)	$	(66,920)	$	206,236


	September 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	$	(4,778)	$	6,470	$	(4,561)
Patents	72		(35)		72		(32)
Software	3,212		(1,827)		3,212		(1,508)
Trade name	373		(63)		373		(42)
Other	500		(384)		500		(358)
Unamortized intangible assets:
Goodwill	17,309		—		17,309		—
Total intangible assets	$	27,936	$	(7,087)	$	27,936	$	(6,501)


(In thousands except share and per share data)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Basic
Net income	$	7,394	$	8,799	$	21,649	$	25,619
Weighted-average common shares outstanding	13,501,469		13,542,231		13,551,070		13,554,169
Basic earnings per share	$	0.55	$	0.65	$	1.60	$	1.89

Diluted
Net income	$	7,394	$	8,799	$	21,649	$	25,619
Weighted-average common shares outstanding	13,501,469		13,542,231		13,551,070		13,554,169
Effect of dilutive restricted stock and stock appreciation rights	291,142		262,106		285,354		252,496
Weighted-average common shares outstanding assuming dilution	13,792,611		13,804,337		13,836,424		13,806,665
Diluted earnings per share	$	0.54	$	0.64	$	1.56	$	1.86


(In thousands)	Information Services		Banking Services		Corporate, Eliminations and Other		Total
Three Months Ended September 30, 2023:
Fee income	$	31,843	$	664	$	293	$	32,800
Interest income	10,143		13,879		(2,833)		21,189
Interest expense	437		7,523		(3,319)		4,641
Intersegment income (expense)	(1,117)		1,117		—		—
Tax-equivalized pre-tax income	6,100		2,282		778		9,160
Goodwill	17,173		136		—		17,309
Other intangible assets, net	3,540		—		—		3,540
Total assets	1,648,152		1,130,345		(273,619)		2,504,878
Average funding sources	$	1,347,074	$	795,011	$	—	$	2,142,085
Three Months Ended September 30, 2022:
Fee income	$	30,399	$	1,093	$	292	$	31,784
Interest income	7,468		10,525		(1,240)		16,753
Interest expense	33		1,025		(276)		782
Intersegment income (expense)	(802)		802		—		—
Tax-equivalized pre-tax income	5,933		5,622		(671)		10,884
Goodwill	17,173		136		—		17,309
Other intangible assets, net	4,321		—		—		4,321
Total assets	1,616,986		1,134,295		(140,466)		2,610,815
Average funding sources	$	1,417,250	$	949,454	$	—	$	2,366,704
Nine Months Ended September 30, 2023:
Fee income	$	94,280	$	2,001	$	699	$	96,980
Interest income	29,053		40,885		(8,899)		61,039
Interest expense	604		20,296		(9,321)		11,579
Intersegment income (expense)	(3,093)		3,093		—		—
Tax-equivalized pre-tax income	16,964		8,917		1,120		27,001
Goodwill	17,173		136		—		17,309
Other intangible assets, net	3,540		—		—		3,540
Total assets	1,648,152		1,130,345		(273,619)		2,504,878
Average funding sources	$	1,343,750	$	820,335	$	—	$	2,164,085
Nine Months Ended September 30, 2022:
Fee income	$	89,243	$	2,763	$	859	$	92,865
Interest income	17,596		28,714		(3,451)		42,859
Interest expense	73		1,578		(307)		1,344
Intersegment income (expense)	(2,476)		2,476		—		—
Tax-equivalized pre-tax income	17,803		16,224		(2,285)		31,742
Goodwill	17,173		136		—		17,309
Other intangible assets, net	4,321		—		—		4,321
Total assets	1,616,986		1,134,295		(140,466)		2,610,815
Average funding sources	$	1,365,880	$	963,588	$	—	$	2,329,468


(In thousands)	September 30, 2023		December 31, 2022
Commercial and industrial	$	517,310	$	561,616
Real estate:
Commercial:
Mortgage	115,742		108,166
Construction	21,101		17,874
Faith-based:
Mortgage	376,186		387,114
Construction	9,249		8,094
Other	31		42
Total loans	$	1,039,619	$	1,082,906


	Performing						Nonperforming
(In thousands)	Current		30-59 Days		60-89 Days		90 Days and Over		Non- accrual		Total Loans
September 30, 2023
Commercial and industrial	$	517,310	$	—	$	—	$	—	$	—	$	517,310
Real estate
Commercial:
Mortgage	115,742		—		—		—		—		115,742
Construction	21,101		—		—		—		—		21,101
Faith-based:
Mortgage	376,186		—		—		—		—		376,186
Construction	9,249		—		—		—		—		9,249

Other	31		—		—		—		—		31
Total	$	1,039,619	$	—	$	—	$	—	$	—	$	1,039,619
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
September 30, 2023
Commercial and industrial	$	517,310	$	—	$	—	$	517,310
Real estate
Commercial:
Mortgage	115,742		—		—		115,742
Construction	21,101		—		—		21,101
Faith-based:
Mortgage	372,708		3,478		—		376,186
Construction	9,249		—		—		9,249

Other	31		—		—		31
Total	$	1,036,141	$	3,478	$	—	$	1,039,619
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
September 30, 2023
Commercial and industrial	$	—	$	10,709	$	—	$	—	2.07	%









Total	$	—	$	10,709	$	—	$	—	1.03	%


(In thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due
September 30, 2023
Commercial and industrial	$	10,709	$	—	$	—	$	—	$	—









Total	$	10,709	$	—	$	—	$	—	$	—


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Comprehensive Income:
Net income	$	7,394	$	8,799	$	21,649	$	25,619
Other comprehensive (loss) income:
Net unrealized loss on securities available-for-sale	(13,659)		(26,127)		(10,105)		(87,159)
Tax effect	3,251		6,218		2,405		20,744
Reclassification adjustments for (gains) losses included in net income	—		(13)		160		(15)
Tax effect	—		3		(38)		3
Foreign currency translation adjustments	(118)		(195)		(21)		(405)
Total comprehensive (loss) income	$	(3,132)	$	(11,315)	$	14,050	$	(41,213)


	Nine Months Ended September 30,
	2023		2022
Cash Flows From Operating Activities:
Net income	$	21,649	$	25,619
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets	585		485
Net amortization of premium/discount on investment securities	3,378		4,818
Depreciation	3,061		3,008
Losses (gains) on sales of securities	160		(15)
Stock-based compensation expense	3,797		4,479
(Release of) provision for credit losses	(335)		850

(Decrease) increase in current income tax liability	(1,496)		641
Increase (decrease) in pension liability	346		(1,877)
Increase in accounts receivable	(1,234)		(2,540)
Other operating activities, net	(545)		5,331
Net cash provided by operating activities	29,366		40,799

Cash Flows From Investing Activities:
Proceeds from sales of securities available-for-sale	111,053		3,838
Proceeds from maturities of securities available-for-sale	29,410		45,740
Purchase of securities available-for-sale	(15,332)		(231,891)
Net decrease (increase) in loans	43,286		(76,521)
Purchase of bank-owned life insurance	—		(4,538)
Asset acquisition of Touchpoint	—		(4,425)
Decrease in payments in advance of funding	35,188		22,206
Purchases of premises and equipment, net	(9,360)		(4,270)
Net cash provided by (used in) investing activities	194,245		(249,861)

Cash Flows From Financing Activities:
Net decrease in noninterest-bearing demand deposits	(131,465)		(911)
Net increase in interest-bearing demand and savings deposits	15,304		20,672
Net increase (decrease) in time deposits	36,286		(11,543)
Net decrease (increase) in accounts and drafts receivable from customers	67,069		(45,699)

Net decrease in accounts and drafts payable	14,624		95,938
Cash dividends paid	(11,887)		(11,478)
Purchase of common shares for treasury	(5,212)		(5,299)
Other financing activities, net	(837)		(552)


	Nine Months Ended September 30, 2023
	Shares	Fair Value
Balance at December 31, 2022	205,565	$	42.64
Granted	56,407	44.59
Vested	(21,691)	53.16
Forfeitures	(398)	40.15
Balance at September 30, 2023	239,883	$	42.17


	Nine Months Ended September 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 September 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)	(275)		72		(48)		31		(220)
Recoveries	—		—		—		—		—
Balance at September 30, 2023	$	5,703	$	1,012	$	6,389	$	215	$	13,319


(1)			For the nine month period ended September 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 September 30, 2023	30,409	$	46.70	0.33	$	—


(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


	September 30, 2023
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
State and political subdivisions	$	241,194	$	2	$	25,735	$	215,461
Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	192,241		—		39,806		152,435
Corporate bonds	111,172		—		11,723		99,449
Treasury securities	109,752		—		2,030		107,722
Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	42,020		—		1,232		40,788
Total	$	696,379	$	2	$	80,526	$	615,855


	September 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	$	63,256	$	1,183	$	149,202	$	24,552	$	212,458	$	25,735
Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	—		—		152,435		39,806		152,435		39,806
Corporate bonds	14,939		61		79,510		11,662		94,449		11,723
Treasury securities	—		—		107,722		2,030		107,722		2,030
Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises	—		—		40,788		1,232		40,788		1,232
Total	$	78,195	$	1,244	$	529,657	$	79,282	$	607,852	$	80,526


	September 30, 2023
(In thousands)	Amortized Cost		Fair Value
Due in 1 year or less	$	124,354	$	122,207
Due after 1 year through 5 years	141,867		138,528
Due after 5 years through 10 years	201,815		169,520
Due after 10 years	228,343		185,600
Total	$	696,379	$	615,855


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Fee revenue and other income
In-scope of FASB ASC 606
Processing fees	$	19,939	$	18,964	$	58,838	$	57,184
Financial fees	11,597		11,252		34,518		32,406
Information services payment and processing revenue	31,536		30,216		93,356		89,590
Bank service fees	247		289		764		1,142
Fee revenue (in-scope of FASB ASC 606)	31,783		30,505		94,120		90,732
Other income (out-of-scope of FASB ASC 606)	1,017		1,279		2,860		2,133
Total fee revenue and other income	$	32,800	$	31,784	$	96,980	$	92,865


(In thousands)	September 30, 2023
Lease payments due
Less than 1 year	$	1,332
1-2 years	1,339
2-3 years	1,354
3-4 years	1,350
4-5 years	1,343
Over 5 years	3,218
Total undiscounted cash flows	9,936
Discount on cash flows	1,200
Total lease liability	$	8,736


(In thousands except per share data)	Third Quarter of								Nine Months Ended
	2023			2022			% Change		2023			2022			% Change
Processing fees	$	19,939		$	18,964		5.1	%	$	58,838		$	57,184		2.9	%
Financial fees	11,597			11,252			3.1	%	34,518			32,406			6.5	%
Net interest income	16,548			15,971			3.6	%	49,460			41,515			19.1	%
Provision for (release of) credit loss	125			550			(77.3)	%	(335)			850			(139.4)	%
Other	1,264			1,568			(19.4)	%	3,624			3,275			10.7	%
Total net revenue	49,223			47,205			4.3	%	146,775			133,530			9.9	%
Operating expense	40,063			36,321			10.3	%	119,774			101,788			17.7	%
Income before income tax expense	9,160			10,884			(15.8)	%	27,001			31,742			(14.9)	%
Income tax expense	1,766			2,085			(15.3)	%	5,352			6,123			(12.6)	%
Net income	$	7,394		$	8,799		(16.0)	%	$	21,649		$	25,619		(15.5)	%
Diluted earnings per share	$	0.54		$	0.64		(15.6)	%	$	1.56		$	1.86		(16.1)	%
Return on average assets	1.22		%	1.33		%	—		1.20		%	1.32		%	—
Return on average equity	13.80		%	16.84		%	—		13.64		%	15.80		%	—


(In thousands)	Third Quarter of 2023						Third Quarter of 2022
	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Assets1
Interest-earning assets
Loans2:	$	1,045,967	$	12,863	4.88	%	$	984,104	$	10,005	4.03	%
Investment securities3:
Taxable	518,954		3,429		2.62	%	554,315		2,948		2.11	%
Tax-exempt4	184,110		1,220		2.63	%	273,284		1,963		2.85	%

Short-term investments	310,770		3,934		5.02	%	431,516		2,249		2.07	%
Total interest-earning assets	2,059,801		21,446		4.13	%	2,243,219		17,165		3.04	%
Non-interest-earning assets
Cash and due from banks	24,786						19,084
Premises and equipment, net	25,531						19,515
Bank-owned life insurance	48,677						47,546
Goodwill and other intangibles	20,966						21,745
Payments in advance of funding	234,684						277,682
Unrealized loss on investment securities	(68,230)						(51,437)
Other assets	62,244						53,039
Allowance for credit losses	(13,195)						(12,579)
Total assets	$	2,395,264					$	2,617,814
Liabilities and Shareholders’ Equity1
Interest-bearing liabilities
Interest-bearing demand deposits	$	508,554	$	4,007	3.13	%	$	545,539	$	701	0.51	%
Savings deposits	7,716		33		1.70	%	13,547		12		0.35	%
Time deposits >= $100	23,610		203		3.41	%	16,325		37		0.90	%
Other time deposits	51,676		398		3.06	%	22,047		32		0.58	%
Total interest-bearing deposits	591,556		4,641		3.11	%	597,458		782		0.52	%
Short-term borrowings	11		—		—	%	11		—		—	%
Total interest-bearing liabilities	591,567		4,641		3.11	%	597,469		782		0.52	%
Non-interest bearing liabilities
Demand deposits	480,472						586,872
Accounts and drafts payable	1,070,057						1,182,373
Other liabilities	40,578						43,852
Total liabilities	2,182,674						2,410,566
Shareholders’ equity	212,590						207,248
Total liabilities and shareholders’ equity	$	2,395,264					$	2,617,814
Net interest income			$	16,805					$	16,383
Net interest margin					3.24	%					2.90	%
Interest spread					1.02	%					2.52	%


(In thousands)	Nine Months Ended 2023						Nine Months Ended 2022
	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Assets1
Interest-earning assets
Loans2:
Taxable	$	1,065,915	$	38,029	4.77	%	$	972,698	$	27,890	3.83	%
Investment securities3:
Taxable	550,680		10,702		2.60	%	488,257		6,679		1.83	%
Tax-exempt4	197,023		4,001		2.72	%	284,187		6,161		2.90	%

Short-term investments	263,774		9,147		4.64	%	451,562		3,423		1.01	%
Total interest-earning assets	2,077,392		61,879		3.98	%	2,196,704		44,153		2.69	%
Non-interest-earning assets:
Cash and due from banks	23,774						20,304
Premises and equipment, net	22,984						19,192
Bank-owned life insurance	48,395						46,009
Goodwill and other intangibles	21,159						18,887
Payments in advance of funding	243,458						283,430
Unrealized loss on investment securities	(65,882)						(31,791)
Other assets	63,322						47,374
Allowance for credit losses	(13,327)						(12,349)
Total assets	$	2,421,275					$	2,587,760
Liabilities and Shareholders’ Equity1
Interest-bearing liabilities:
Interest-bearing demand deposits	$	491,495	$	10,060	2.74	%	$	542,378	$	1,102	0.27	%
Savings deposits	7,094		82		1.55	%	14,628		17		0.16	%
Time deposits >= $100	23,115		463		2.68	%	17,054		115		0.90	%
Other time deposits	42,290		858		2.71	%	24,741		110		0.59	%
Total interest-bearing deposits	563,994		11,463		2.72	%	598,801		1,344		0.30	%
Short-term borrowings	2,993		116		5.18	%	11		—		—	%
Total interest-bearing liabilities	566,987		11,579		2.73	%	598,812		1,344		0.30	%
Non-interest bearing liabilities:
Demand deposits	528,677						594,994
Accounts and drafts payable	1,071,414						1,135,673
Other liabilities	42,037						41,454
Total liabilities	2,209,115						2,370,933
Shareholders’ equity	212,159						216,827
Total liabilities and shareholders’ equity	$	2,421,274					$	2,587,760
Net interest income			$	50,300					$	42,809
Net interest margin					3.24	%					2.61	%
Interest spread					1.25	%					2.39	%


(In thousands)	Third Quarter of 2023 Compared to Third Quarter of 2022
	Volume		Rate		Total
Increase (decrease) in interest income:
Loans1:	$	659	$	2,199	$	2,858
Investment securities:
Taxable	(198)		679		481
Tax-exempt2	(600)		(143)		(743)

Short-term investments	(777)		2,462		1,685
Total interest income	(916)		5,197		4,281
Increase (decrease) in interest expense:
Interest-bearing demand deposits	(51)		3,357		3,306
Savings deposits	(7)		28		21
Time deposits >=$100	23		143		166
Other time deposits	87		279		366
Short-term borrowings	—		—		—
Total interest expense	52		3,807		3,859
Net interest income	$	(968)	$	1,390	$	422


(In thousands)	Nine Months Ended 2023 Compared to Nine Months Ended of 2022
	Volume		Rate		Total
Increase (decrease) in interest income:
Loans1:
Taxable	$	2,857	$	7,282	$	10,139
Investment securities:
Taxable	938		3,085		4,023
Tax-exempt2	(1,791)		(369)		(2,160)

Short-term investments	(1,954)		7,678		5,724
Total interest income	50		17,676		17,726
Interest expense on:
Interest-bearing demand deposits	(113)		9,071		8,958
Savings deposits	(13)		78		65
Time deposits >=$100	53		295		348
Other time deposits	124		624		748
Short-term borrowings	—		116		116
Total interest expense	51		10,184		10,235
Net interest income	$	(1)	$	7,492	$	7,491


	Actual				Capital Requirements				Requirement to be Well-Capitalized
(In thousands)	Amount		Ratio		Amount		Ratio		Amount	Ratio
At September 30, 2023
Total capital (to risk-weighted assets)
Cass Information Systems, Inc.	$	265,286	15.30	%	$	138,669	8.00	%	$ N/A	N/A %
Cass Commercial Bank	197,767		18.14		87,236		8.00		109,045	10.00
Common Equity Tier I Capital (to risk-weighted assets)
Cass Information Systems, Inc.	251,850		14.53		78,001		4.50		N/A	N/A
Cass Commercial Bank	185,127		16.98		49,070		4.50		70,879	6.50
Tier I capital (to risk-weighted assets)
Cass Information Systems, Inc.	251,850		14.53		104,002		6.00		N/A	N/A
Cass Commercial Bank	185,127		16.98		65,427		6.00		87,236	8.00
Tier I capital (to average assets)
Cass Information Systems, Inc.	251,850		10.61		94,977		4.00		N/A	N/A
Cass Commercial Bank	185,127		12.17		60,847		4.00		76,059	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.	243,774		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
		September 30, 2023		December 31, 2022
+200 basis points		13.7	%	10.6	%
+100 basis points		8.2	%	4.2	%
Flat rates		—	%	—	%
-100 basis points		(3.2)	%	—	%
-200 basis points		(6.0)	%	(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
July 1, 2023–July 31, 2023	1,122	$	38.68	1,122	276,280
August 1, 2023–August 31, 2023	60,900	38.79		60,900	215,380
September 1, 2023–September 30, 2023	11,250	38.16		11,250	204,130
Total	73,272	$	38.69	73,272	204,130


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



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