Cass Information Systems Inc 10-Q for FY2020 Q2

Cass Information Systems Inc (CASS)

10-Q 2020-08-06 For: 2020-06-30

Added on April 06, 2026

About this 10-Q

Cass Information Systems Inc filed this 10-Q on August 6, 2020, covering the quarter ended June 30, 2020 (FY2020 Q2).

Headline figures

Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $33.94M; down 13.9% from $39.39M a year earlier
Net income: $5.44M; down 29.2% from net income of $7.68M a year earlier
Diluted EPS: $0.37; down 28.8% from $0.52 a year earlier

	Amount of Commitment Expiration per Period
Time deposits	$	68,246		$	46,188		$	21,922		$	136		$	—

	Shares	Weighted- Average Exercise Price
Balance at December 31, 2019	155,292	$	32.58	2.92	$	3,908
Exercised	(10,293)		26.72	—		—
Exercisable at June 30, 2020	144,999	$	32.99	2.46	$	1,109

(In thousands)	Estimated 2020
Service cost – benefits earned during the year	$	4,312	$	3,555
Interest cost on projected benefit obligations		3,903		4,103
Expected return on plan assets		(6,051)		(4,753)
Net amortization		1,890		1,559
Net periodic pension cost	$	4,054	$	4,464

(In thousands)	Estimated 2020
Service cost – benefits earned during the year	$	121	$	97
Interest cost on projected benefit obligation		347		408
Net amortization		112		276
Net periodic pension cost	$	580	$	781

	June 30, 2020
State and political subdivisions	$	287,151	$	18,615	$	—	$	305,766
U.S. government agencies		72,589		1,366		—		73,955
Certificates of deposit		250		—		—		250
Total	$	359,990	$	19,981	$	—	$	379,971

	December 31, 2019
State and political subdivisions	$	310,720	$	13,727	$	—	$	324,447
U.S. government agencies		97,380		507		169		97,718
Certificates of deposit		500		—		—		500
Total	$	408,600	$	14,234	$	169	$	422,665

	December 31, 2019
State and political subdivisions	$	—	$	—	$	—	$	—	$	—	$	—
U.S. government agencies		3,801		12		17,593		157		21,394		169
Certificates of deposit		—		—		—		—		—		—
Total	$	3,801	$	12	$	17,593	$	157	$	21,394	$	169

	June 30, 2020
Due in 1 year or less	$	54,652	$	55,208
Due after 1 year through 5 years		85,421		89,213
Due after 5 years through 10 years		188,475		202,974
Due after 10 years		31,442		32,576
Total	$	359,990	$	379,971

(In thousands)	June 30, 2020
Lease payments due
Less than 1 year	$	1,856
1-2 years		1,688
2-3 years		1,348
3-4 years		499
4-5 years		509
Over 5 years		2,279
Total undiscounted cash flows		8,179
Discount on cash flows		1,263
Total lease liability	$	6,916

	Second Quarter of
Net income	$	5,439	$	7,684	(29.2)%	$	12,984	$	15,847	(18.1)%
Diluted earnings per share	$	.37	$	.52	(28.2)%	$	.89	$	1.08	(17.6)%
Return on average assets		1.16%		1.81%	—		1.43%		1.89%	—
Return on average equity		9.04%		13.21%	—		10.77%		13.92%	—

		Second Quarter of	First Half of
Transportation invoice volume		7,294		9,222	(20.9)%		15,574		18,170	(14.3)%
Transportation invoice dollar volume	$	5,697,627	$	7,121,202	(20.0)%	$	12,164,678	$	14,106,975	(13.8)%
Facility Expense transaction volume*		6,704		6,892	(2.7)%		13,213		13,886	(4.8)%
Facility Expense dollar volume*	$	3,064,038	$	3,733,075	(17.9)%	$	6,522,684	$	7,350,503	(11.3)%
Payment and processing revenue	$	22,661	$	26,852	(15.6)%	$	48,164	$	53,309	(9.7)%

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

	For the quarterly period ended June 30, 2020

OR

☐	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)

Title of each class		Trading symbols		Name of each exchange on which registered
Common stock, par value $.50		CASS		The Nasdaq Global Select Market

Large Accelerated Filer ☒	Accelerated Filer ☐

Non-Accelerated Filer ☐	Smaller Reporting Company ☐	Emerging Growth Company ☐

PART I – Financial Information
Item 1.FINANCIAL STATEMENTS
Consolidated Balance Sheets June 30, 2020 (unaudited) and December 31, 2019	3
Consolidated Statements of Income Three and six months ended June 30, 2020 and 2019 (unaudited)	4
Consolidated Statements of Comprehensive Income Three and six months ended June 30, 2020 and 2019 (unaudited)	5
Consolidated Statements of Cash Flows Six months ended June 30, 2020 and 2019 (unaudited)	6
Consolidated Statements of Shareholders’ Equity Three and six months ended June 30, 2020 and 2019 (unaudited)	7
Notes to Consolidated Financial Statements (unaudited)	8
Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	31
Item 4.CONTROLS AND PROCEDURES	31
PART II – Other Information – Items 1. – 6.	31
SIGNATURES	34

	June 30, 2020 (Unaudited)		December 31, 2019
Assets
Cash and due from banks	$	11,861	$	18,076
Interest-bearing deposits in other financial institutions		208,573		172,422
Federal funds sold and other short-term investments		11,705		13,456
Cash and cash equivalents		232,139		203,954
Securities available-for-sale, at fair value		379,971		422,665

Loans		963,726		772,638
Less: Allowance for loan losses		11,292		10,556
Loans, net		952,434		762,082
Payments in excess of funding		162,210		206,158
Premises and equipment, net		19,695		20,527
Investment in bank-owned life insurance		17,827		17,599
Goodwill		14,262		14,262
Other intangible assets, net		3,852		4,281
Other assets		46,594		112,715
Total assets	$	1,828,984	$	1,764,243

Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing	$	343,567	$	351,091
Interest-bearing		482,389		406,045
Total deposits		825,956		757,136
Accounts and drafts payable		687,538		684,295
Short-term borrowings		—		18,000
Other liabilities		66,963		60,622
Total liabilities		1,580,457		1,520,053

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, 2020 and December 31, 2019		7,753		7,753
Additional paid-in capital		204,258		205,397
Retained earnings		95,514		90,341
Common shares in treasury, at cost (1,084,693 shares at June 30, 2020 and 991,406 shares at December 31, 2019)		(49,457)		(45,381)
Accumulated other comprehensive loss		(9,541)		(13,920)
Total shareholders’ equity		248,527		244,190
Total liabilities and shareholders’ equity	$	1,828,984	$	1,764,243

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Fee Revenue and Other Income:
Information services payment and processing revenue	$	22,661	$	26,852	$	48,164	$	53,309
Bank service fees		398		301		808		677
Gains on sales of securities		—		8		1,069		19
Other		115		211		228		380
Total fee revenue and other income		23,174		27,372		50,269		54,385

Interest Income:
Interest and fees on loans		9,298		9,387		18,299		18,016
Interest and dividends on securities:
Taxable		473		639		1,033		1,281
Exempt from federal income taxes		1,785		1,994		3,604		4,031
Interest on federal funds sold and other short-term investments		86		1,307		1,044		2,896
Total interest income		11,642		13,327		23,980		26,224

Interest Expense:
Interest on deposits		481		1,305		1,444		2,595
Interest on short-term borrowings		—		—		2		—
Total interest expense		481		1,305		1,446		2,595
Net interest income		11,161		12,022		22,534		23,629
Provision for loan losses		400		—		725		250
Net interest income after provision for loan losses		10,761		12,022		21,809		23,379
Total net revenue		33,935		39,394		72,078		77,764

Operating Expense:
Personnel		20,891		22,803		43,318		45,080
Occupancy		938		998		1,879		1,957
Equipment		1,617		1,552		3,252		3,021
Amortization of intangible assets		214		102		429		209
Other operating expense		3,697		4,516		7,408		8,166
Total operating expense		27,357		29,971		56,286		58,433
Income before income tax expense		6,578		9,423		15,792		19,331
Income tax expense		1,139		1,739		2,808		3,484
Net income	$	5,439	$	7,684	$	12,984	$	15,847

Basic earnings per share	$	.38	$	.53	$	.90	$	1.10
Diluted earnings per share		.37		.52		.89		1.08

	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive (Loss) Income		Total
Balance, March 31, 2019	$	7,753	$	205,310	$	79,558	$	(44,685)	$	(13,456)	$	234,480

Net income						7,684						7,684
Cash dividends ($.26 per share)						(3,772)						(3,772)
Issuance of 8,968 common shares pursuant to stock-based compensation plan, net				(407)				450				43
Stock-based compensation expense				560								560
Purchase of 46,778 common shares								(2,098)				(2,098)
Other comprehensive income										3,524		3,524
Balance, June 30, 2019	$	7,753	$	205,463	$	83,470	$	(46,333)	$	(9,932)	$	240,421

Balance, March 31, 2020	$	7,753	$	203,801	$	93,968	$	(49,800)	$	(14,439)	$	241,283

Net income						5,439						5,439
Cash dividends ($.27 per share)						(3,893)						(3,893)
Issuance of 9,292 common shares pursuant to stock-based compensation plan, net				(299)				343				44
Stock-based compensation expense				756								756
Other comprehensive income										4,898		4,898
Balance, June 30, 2020	$	7,753	$	204,258	$	95,514	$	(49,457)	$	(9,541)	$	248,527

(In thousands except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total
Balance, December 31, 2018	$	7,753	$	205,770	$	75,171	$	(39,974)	$	(18,872)	$	229,848

Net income						15,847						15,847
Cash dividends ($.26 per share)						(7,548)						(7,548)
Issuance of 34,092 common shares pursuant to stock-based compensation plan, net				(1,421)				1,276				(145)
Exercise of SARs				(303)				164				(139)
Stock-based compensation expense				1,417								1,417
Purchase of 154,593 common shares								(7,799)				(7,799)
Other comprehensive income										8,940		8,940
Balance, June 30, 2019	$	7,753	$	205,463	$	83,470	$	(46,333)	$	(9,932)	$	240,421

Balance, December 31, 2019	$	7,753	$	205,397	$	90,341	$	(45,381)	$	(13,920)	$	244,190

Net income						12,984						12,984
Cash dividends ($.27 per share)						(7,811)						(7,811)
Issuance of 66,625 common shares pursuant to stock-based compensation plan, net				(2,374)				1,291				(1,083)
Exercise of SARs				(243)				141				(102)
Stock-based compensation expense				1,478								1,478
Purchase of 128,779 common shares								(5,508)				(5,508)
Other comprehensive income										4,379		4,379
Balance, June 30, 2020	$	7,753	$	204,258	$	95,514	$	(49,457)	$	(9,541)	$	248,527

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands except share and per share data)	2020		2019		2020		2019
Basic
Net income	$	5,439	$	7,684	$	12,984	$	15,847
Weighted-average common shares outstanding		14,349,040		14,434,232		14,385,927		14,444,821
Basic earnings per share	$	.38	$	.53	$	.90	$	1.10

Diluted
Net income	$	5,439	$	7,684	$	12,984	$	15,847
Weighted-average common shares outstanding		14,349,040		14,434,232		14,385,927		14,444,821
Effect of dilutive restricted stock and stock appreciation rights		196,159		258,032		201,930		255,613
Weighted-average common shares outstanding assuming dilution		14,545,199		14,692,264		14,587,857		14,700,434
Diluted earnings per share	$	.37	$	.52	$	.89	$	1.08

(In thousands)	Information Services		Banking Services		Corporate, Eliminations and Other		Total
Three Months Ended June 30, 2020:
Fee income	$	22,460	$	640	$	74	$	23,174
Interest income*		6,056		6,601		(541)		12,116
Interest expense		—		481		—		481
Intersegment income (expense)		—		556		(556)		—
Tax-equivalized pre-tax income*		4,537		2,981		(466)		7,052
Goodwill		12,433		1,829		—		14,262
Other intangible assets, net		939		2,913		—		3,852
Total assets		822,684		1,109,676		(103,376)		1,828,984
Average funding sources		680,061		746,619		—		1,426,680
Three Months Ended June 30, 2019:
Fee income	$	27,227	$	392	$	(247)	$	27,372
Interest income*		6,336		7,666		(144)		13,858
Interest expense		—		1,305		—		1,305
Intersegment income (expense)		—		535		(535)		—
Tax-equivalized pre-tax income*		6,791		3,555		(392)		9,954
Goodwill		12,433		136		—		12,569
Other intangible assets, net		1,345		—		—		1,345
Total assets		934,620		816,661		(22,597)		1,728,684
Average funding sources		650,231		570,980		—		1,221,211
Six Months Ended June 30, 2020:
Fee income	$	47,900	$	1,255	$	1,114	$	50,269
Interest income*		11,847		13,885		(794)		24,938
Interest expense		—		1,446		—		1,446
Intersegment income (expense)		—		1,081		(1,081)		—
Tax-equivalized pre-tax income*		10,744		5,684		322		16,750
Goodwill		12,433		1,829		—		14,262
Other intangible assets, net		939		2,913		—		3,852
Total assets		822,684		1,109,676		(103,376)		1,828,984
Average funding sources		678,945		678,877		—		1,357,822
Six Months Ended June 30, 2019:
Fee income	$	54,023	$	783	$	(421)	$	54,385
Interest income*		12,513		15,152		(369)		27,296
Interest expense		—		2,595		—		2,595
Intersegment income (expense)		—		1,054		(1,054)		—
Tax-equivalized pre-tax income*		14,378		6,815		(790)		20,403
Goodwill		12,433		136		—		12,569
Other intangible assets, net		1,345		—		—		1,345
Total assets		934,620		816,661		(22,597)		1,728,684
Average funding sources		648,918		581,034		—		1,229,952

	Performing						Nonperforming
(In thousands)	Current		30-59 Days		60-89 Days		90 Days and Over		Non- accrual		Total Loans
June 30, 2020
Commercial and industrial	$	341,888	$	—	$	—	$	—	$	—	$	341,888
PPP		172,563		—		—		—		—		172,563
Real estate:
Commercial:
Mortgage		95,865		—		—		—		—		95,865
Construction		22,219		—		—		—		—		22,219
Faith-based:
Mortgage		302,895		—		—		—		—		302,895
Construction		28,293		—		—		—		—		28,293
Other		3		—		—		—		—		3
Total	$	963,726	$	—	$	—	$	—	$	—	$	963,726
December 31, 2019
Commercial and industrial	$	323,857	$	—	$	—	$	—	$	—	$	323,857
Real estate:
Commercial:
Mortgage		101,654		—		—		—		—		101,654
Construction		25,299		—		—		—		—		25,299
Faith-based:
Mortgage		305,826		—		—		—		—		305,826
Construction		15,945		—		—		—		—		15,945
Other		57		—		—		—		—		57
Total	$	772,638	$	—	$	—	$	—	$	—	$	772,638

(In thousands)	Loans Subject to Normal Monitoring¹		Performing Loans Subject to Special Monitoring²		Nonperforming Loans Subject to Special Monitoring²		Total Loans
June 30, 2020
Commercial and industrial	$	328,740	$	13,148	$	—	$	341,888
PPP		172,563		—		—		172,563
Real estate:
Commercial:
Mortgage		94,655		1,210		—		95,865
Construction		22,219		—		—		22,219
Faith-based:
Mortgage		301,623		1,272		—		302,895
Construction		28,293		—		—		28,293
Other		3		—		—		3
Total	$	948,096	$	15,630	$	—	$	963,726
December 31, 2019
Commercial and industrial	$	321,554	$	2,303	$	—	$	323,857
Real estate:
Commercial:
Mortgage		100,346		1,308		—		101,654
Construction		25,299		—		—		25,299
Faith-based:
Mortgage		304,513		1,313		—		305,826
Construction		15,945		—		—		15,945
Other		57		—		—		57
Total	$	767,714	$	4,924	$	—	$	772,638

(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance for Loan Losses
Commercial and industrial:	$	11,135	$	11,135	$	500
Real estate:
Faith-based:
Mortgage		1,047		1,047		—
Total impaired loans	$	12,182	$	12,182	$	500

(In thousands)	December 31, 2019		Charge- Offs		Recoveries		Provision		June 30, 2020
Commercial and industrial	$	4,874	$	—	$	10	$	686	$	5,570
Real estate:
Commercial:
Mortgage		1,528		—		—		(60)		1,468
Construction		191		—		—		(21)		170
Faith-based:
Mortgage		3,842		—		1		21		3,864
Construction		121		—		—		99		220
Total	$	10,556	$	—	$	11	$	725	$	11,292

	June 30, 2020				December 31, 2019
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Assets eligible for amortization:
Customer lists	$	4,778	$	(3,682)	$	4,778	$	(3,463)
Patents		72		(22)		72		(20)
Non-compete agreements		332		(332)		332		(332)
Software		2,844		(545)		2,844		(358)
Trade Name		190		(8)		190		(3)
Other		500		(275)		500		(259)
Unamortized intangible assets:
Goodwill¹		14,489		(227)		14,489		(227)
Total intangible assets	$	23,205	$	(5,091)	$	23,205		(4,662)

(In thousands)	December 31, 2018		Charge- Offs		Recoveries		Provision		June 30, 2019
Commercial and industrial	$	4,179	$	—	$	31	$	1,058	$	5,268
Real estate:
Commercial:
Mortgage		1,417		—		—		(148)		1,269
Construction		89		—		—		51		140
Faith-based:
Mortgage		3,961		—		—		36		3,997
Construction		155		—		—		(24)		131
Other		424		—		—		(723)		(299)
Total	$	10,225	$	—	$	31	$	250	$	10,506

	Six Months Ended June 30, 2020
	Shares		Fair Value
Balance at December 31, 2019		123,272	$	47.24
Granted		32,403		48.21
Vested		(20,369)		49.32
Forfeited		(4,962)		50.08
Balance at June 30, 2020		130,344	$	47.05

	Three Months Ended June 30, 2020
	Shares		Fair Value
Balance at December 31, 2019		102,116	$	49.13
Granted		32,910		54.02
Vested		(29,175)		49.33
Forfeited		(7,441)		50.08
Balance at June 30, 2020		98,410	$	50.64

	June 30, 2020
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
State and political subdivisions	$	287,151	$	18,615	$	—	$	305,766
U.S. government agencies		72,589		1,366		—		73,955
Certificates of deposit		250		—		—		250
Total	$	359,990	$	19,981	$	—	$	379,971

	December 31, 2019
	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	$	—	$	—	$	—	$	—	$	—	$	—
U.S. government agencies		3,801		12		17,593		157		21,394		169
Certificates of deposit		—		—		—		—		—		—
Total	$	3,801	$	12	$	17,593	$	157	$	21,394	$	169

	June 30, 2020
(In thousands)	Amortized Cost		Fair Value
Due in 1 year or less	$	54,652	$	55,208
Due after 1 year through 5 years		85,421		89,213
Due after 5 years through 10 years		188,475		202,974
Due after 10 years		31,442		32,576
Total	$	359,990	$	379,971

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Fee revenue and other income
In-scope of FASB ASC 606
Invoice processing fees	$	17,923	$	20,447	$	37,047	$	40,989
Invoice payment fees		4,738		6,405		11,117		12,320
Information services payment and processing revenue		22,661		26,852		48,164		53,309
Bank service fees		398		301		808		677
Fee revenue (in-scope of FASB ASC 606)		23,059		27,153		48,972		53,986
Other income (out-of-scope of FASB ASC 606)		115		219		1,297		399
Total fee revenue and other income		23,174		27,372		50,269		54,385

Net interest income after provision for loan losses (out-of-scope of FASB ASC 606)¹		10,761		12,022		21,809		23,379
Total net revenue	$	33,935	$	39,394	$	72,078	$	77,764

	Second Quarter of 2020							Second Quarter of 2019
(In thousands)	Average Balance			Interest Income/ Expense		Yield/Rate		Average Balance			Interest Income/ Expense		Yield/Rate
Assets¹
Interest-earning assets
Loans²:
Taxable	$	964,060		$	9,298	3.88	%	$	769,394		$	9,387	4.89	%
Investment securities⁴:									—			—	—
Taxable		82,107			471	2.31			104,740			630	2.41
Tax-exempt³		288,078			2,260	3.16			322,208			2,524	3.14
Certificates of deposit		313			2	2.57			1,995			10	2.01
Interest-bearing deposits in other financial institutions		273,287			73	0.11			87,883			477	2.18
Federal funds sold and other short-term investments		16,570			12	0.29			144,763			830	2.30
Total interest-earning assets		1,624,415			12,116	3.00			1,430,983			13,858	3.88
Non-interest-earning assets
Cash and due from banks		15,948							12,726
Premises and equipment, net		20,069							21,580
Bank-owned life insurance		17,760							17,540
Goodwill and other intangibles		18,239							13,975
Other assets		200,779							216,337
Allowance for loan losses		(10,895	)						(10,498	)
Total assets	$	1,886,315						$	1,702,643
Liabilities and Shareholders’ Equity¹
Interest-bearing liabilities
Interest-bearing demand Deposits	$	394,756		$	202	0.21	%	$	296,017		$	923	1.25	%
Savings deposits		12,921			3	0.09			9,867			26	1.06
Time deposits >= $100		28,268			138	1.96			24,954			120	1.93
Other time deposits		42,414			138	1.31			48,559			236	1.95
Total interest-bearing deposits		478,359			481	0.40			379,397			1,305	1.38
Short-term borrowings		11			—	—			25			—	—
Total interest-bearing liabilities		478,370			481	0.40			379,422			1,305	1.38
Non-interest bearing liabilities
Demand deposits		359,808							259,377
Accounts and drafts payable		741,547							774,623
Other liabilities		64,489							55,854
Total liabilities		1,644,214							1,469,276
Shareholders’ equity		242,101							233,367
Total liabilities and shareholders’ equity	$	1,886,315						$	1,702,643
Net interest income				$	11,635						$	12,553
Net interest margin						2.88	%						3.52	%
Interest spread						2.60							2.50

1.	Balances shown are daily averages.
2.	Interest income on loans includes net loan fees of $565,000 and $77,000 for the Second Quarter of 2020 and 2019, respectively due to higher PPP loan fees.
3.	Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for both 2020 and 2019. The tax-equivalent adjustment was approximately $474,000 and $531,000 for the Second Quarter of 2020 and 2019, respectively.
4.	For purposes of these computations, yields on investment securities are computed as interest income divided by the average amortized cost of the investments.

	First Half of 2020							First Half of 2019
(In thousands)	Average Balance			Interest Income/ Expense		Yield/Rate		Average Balance			Interest Income/ Expense		Yield/Rate
Assets¹
Interest-earning assets
Loans^{2, 3}:
Taxable	$	881,781		$	18,299	4.17	%	$	745,592		$	18,016	4.87	%
Investment securities⁴:
Taxable		88,899			1,028	2.33			105,685			1,262	2.41
Tax-exempt³		292,561			4,562	3.14			326,393			5,103	3.15
Certificates of deposit		407			5	2.47			1,995			20	2.02
Interest-bearing deposits in other financial institutions		201,949			456	0.45			114,314			1,286	2.27
Federal funds sold and other short-term investments		90,547			588	1.31			140,798			1,609	2.30
Total interest-earning assets		1,556,144			24,938	3.22			1,434,777			27,296	3.84
Non-interest-earning assets:
Cash and due from banks		16,649							13,268
Premises and equipment, net		20,182							21,796
Bank-owned life insurance		17,703							17,485
Goodwill and other intangibles		18,347							14,027
Other assets		213,674							203,974
Allowance for loan losses		(10,728	)						(10,365	)
Total assets	$	1,831,971						$	1,694,962
Liabilities and Shareholders’ Equity¹
Interest-bearing liabilities:
Interest-bearing demand deposits	$	360,804		$	835	0.47	%	$	300,429		$	1,845	1.24	%
Savings deposits		10,662			16	0.30			10,932			59	1.09
Time deposits >= $100		29,044			279	1.93			24,092			231	1.93
Other time deposits		43,253			314	1.46			49,141			460	1.89
Total interest-bearing deposits		443,763			1,444	0.65			384,594			2,595	1.36
Short-term borrowings		110			2	3.66			13			—	—
Total interest-bearing liabilities		443,873			1,446	0.66			384,607
Non-interest bearing liabilities:
Demand deposits		327,486							264,743
Accounts and drafts payable		754,773							762,416
Other liabilities		63,359							53,653
Total liabilities		1,589,491							1,465,419
Shareholders’ equity		242,480							229,543
Total liabilities and shareholders’ equity	$	1,831,971						$	1,694,962
Net interest income				$	23,492						$	24,701
Net interest margin						3.04	%						3.47	%
Interest spread						2.56							2.48

	Second Quarter of 2020 Over Second Quarter of 2019
(In thousands)	Volume			Rate			Total
Increase (decrease) in interest income:
Loans¹:
Taxable	$	2,090		$	(2,179	)	$	(89	)
Investment securities:
Taxable		(132	)		(27	)		(159	)
Tax-exempt²		(274	)		10			(264	)
Certificates of deposit		(10	)		2			(8	)
Interest-bearing deposits in other financial institutions		347			(751	)		(404	)
Federal funds sold and other short-term investments		(412	)		(406	)		(818	)
Total interest income		1,609			(3,351	)		(1,742	)
Interest expense on:
Interest-bearing demand deposits		234			(955	)		(721	)
Savings deposits		6			(29	)		(23	)
Time deposits >=$100		16			2			18
Other time deposits		(27	)		(71	)		(98	)
Total interest expense		229			(1,053	)		(824	)
Net interest income	$	1,380		$	(2,298	)	$	(918	)

1.	Interest income includes net loan fees.
2.	Interest income is presented on a tax-equivalent basis assuming a tax rate of 21% for the Second Quarter of 2020 and 2019.

	First Half of 2020 Over First Half of 2019
(In thousands)	Volume			Rate			Total
Increase (decrease) in interest income:
Loans¹:
Taxable	$	3,071		$	(2,788	)	$	283
Investment securities:
Taxable		(192	)		(42	)		(234	)
Tax-exempt²		(514	)		(27	)		(541	)
Certificates of deposit		(19	)		4			(15	)
Interest-bearing deposits in other financial institutions		606			(1,436	)		(830	)
Federal funds sold and other short-term investments		(461	)		(560	)		(1,021	)
Total interest income		2,490			(4,849	)		(2,358	)
Interest expense on:
Interest-bearing demand deposits		318			(1,328	)		(1,010	)
Savings deposits		(1	)		(42	)		(43	)
Time deposits >=$100		48			(0	)		48
Other time deposits		(50	)		(96	)		(146	)
Short-term borrowings		—			2			2
Total interest expense		315			(1,464	)		(1,149	)
Net interest income	$	2,176		$	(3,385	)	$	(1,209	)

	June 30, 2020				December 31, 2019
(Dollars in thousands)	Amount		Ratio		Amount		Ratio
Total capital (to risk-weighted assets)
Cass Information Systems, Inc.	$	250,949		21.32%	$	249,954		19.70%
Cass Commercial Bank		162,782		20.08%		154,011		19.32%
Common equity tier I capital (to risk-weighted assets)
Cass Information Systems, Inc.	$	239,657		20.36%	$	239,398		18.86%
Cass Commercial Bank		153,708		18.96%		145,673		18.27%
Tier I capital (to risk-weighted assets)
Cass Information Systems, Inc.	$	239,657		20.36%	$	239,398		18.86%
Cass Commercial Bank		153,708		18.96%		145,673		18.27%
Tier I capital (to leverage assets)
Cass Information Systems, Inc.	$	239,657		12.83%	$	239,398		13.24%
Cass Commercial Bank		153,708		13.13%		145,673		16.64%

	CASS INFORMATION SYSTEMS, INC.


DATE: August 6, 2020	By	/s/ Eric H. Brunngraber
		Eric H. Brunngraber
		Chairman, President, and Chief Executive Officer
		(Principal Executive Officer)


DATE: August 6, 2020	By	/s/ P. Stephen Appelbaum
		P. Stephen Appelbaum
		Executive Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)