Cass Information Systems Inc 10-Q for FY2021 Q2

Cass Information Systems Inc (CASS)

10-Q 2021-08-05 For: 2021-06-30

Added on April 06, 2026

About this 10-Q

Cass Information Systems Inc filed this 10-Q on August 5, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $38.41M; up 13.2% from $33.94M a year earlier
Net income: $7.03M; up 29.2% from net income of $5.44M a year earlier
Diluted EPS: $0.48; up 29.7% from $0.37 a year earlier

(In thousands)	Number of Loans	Pre-Modification Outstanding Balance
Commercial and industrial	1	$	8,773	$	8,773
Faith-based real estate	1		1,029		1,029
Total	2	$	9,802	$	9,802

	Amount of Commitment Expiration per Period
Time deposits	$	51,442		$	36,441		$	14,938		$	63		$	—


Balance at December 31, 2020	136,167	$	46.78
Granted	49,406		41.54
Vested	(22,750)		47.97
Balance at June 30, 2021	162,823	$	44.99


Balance at December 31, 2020	98,410	$	50.64
Granted	52,240		40.74
Vested	(31,451)		48.63
Balance at June 30, 2021	119,199	$	46.79

	Shares	Weighted- Average Exercise Price
Balance at December 31, 2020	144,999	$	32.99	1.95	$	1,095
Exercised	(20,560)		24.12	—		—
Forfeited	(2,088)		31.92	─		─
Exercisable at June 30, 2021	122,351	$	34.50	1.67	$	1,228

(In thousands)	Estimated 2021
Service cost – benefits earned during the year	$	963	$	4,329
Interest cost on projected benefit obligations		3,069		3,908
Expected return on plan assets		(6,299)		(6,049)
Net amortization		360		1,946
Net periodic pension (benefit) cost	$	(1,907)	$	4,134

(In thousands)	Estimated 2021
Service cost – benefits earned during the year	$	147	$	121
Interest cost on projected benefit obligation		291		347
Net amortization		203		112
Net periodic pension cost	$	641	$	580

	June 30, 2021
State and political subdivisions	$	335,739	$	16,004	$	48	$	351,695
U.S. government agencies		90,756		601		424		90,933
Corporate Bonds		63,567		852		─		64,419
Total	$	490,062	$	17,457	$	472	$	507,047

	December 31, 2020
State and political subdivisions	$	287,059	$	18,915	$	─	$	305,974
U.S. government agencies		50,988		764		─		51,752
Total	$	338,047	$	19,679	$	─	$	357,726

	June 30, 2021
State and political subdivisions	$	8,184	$	48	$	─	$	─	$	8,184	$	48
U.S. government agencies		59,998		424		─		─		59,998		424
Total	$	68,182	$	472	$	─	$	─	$	68,182	$	472

	June 30, 2021
Due in 1 year or less	$	58,144	$	58,412
Due after 1 year through 5 years		95,443		100,135
Due after 5 years through 10 years		216,180		227,682
Due after 10 years		120,295		120,818
Total	$	490,062	$	507,047

(In thousands)	June 30, 2021
Lease payments due
Less than 1 year	$	1,695
1-2 years		1,351
2-3 years		532
3-4 years		509
4-5 years		519
Over 5 years		1,760
Total undiscounted cash flows		6,366
Discount on cash flows		937
Total lease liability	$	5,429

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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, 2021

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, 2021 (unaudited) and December 31, 2020	3
Consolidated Statements of Income Three and six months ended June 30, 2021 and 2020 (unaudited)	4
Consolidated Statements of Comprehensive Income Three and six months ended June 30, 2021 and 2020 (unaudited)	5
Consolidated Statements of Cash Flows Six months ended June 30, 2021 and 2020 (unaudited)	6
Consolidated Statements of Shareholders’ Equity Three and six months ended June 30, 2021 and 2020 (unaudited)	7
Notes to Consolidated Financial Statements (unaudited)	8

Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	22
Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	33
Item 4.CONTROLS AND PROCEDURES	33
PART II – Other Information – Items 1. – 6.	34
SIGNATURES	36

	June 30, 2021 (Unaudited)		December 31, 2020
Assets
Cash and due from banks	$	14,545	$	30,985
Interest-bearing deposits in other financial institutions		424,263		393,810
Federal funds sold and other short-term investments		182,773		245,733
Cash and cash equivalents		621,581		670,528
Securities available-for-sale, at fair value		507,047		357,726

Loans		871,020		891,676
Less: Allowance for credit losses		11,171		11,944
Loans, net		859,849		879,732
Payments in excess of funding		184,262		194,563
Premises and equipment, net		17,741		18,057
Investment in bank-owned life insurance		17,758		18,058
Goodwill		14,262		14,262
Other intangible assets, net		2,993		3,423
Other assets		46,840		46,886
Total assets	$	2,272,333	$	2,203,235

Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing	$	422,374	$	493,504
Interest-bearing		593,569		557,352
Total deposits		1,015,943		1,050,856
Accounts and drafts payable		939,570		835,386
Other liabilities		56,053		55,833
Total liabilities		2,011,566		1,942,075

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, 2021 and December 31, 2020		7,753		7,753
Additional paid-in capital		203,098		204,875
Retained earnings		105,398		99,062
Common shares in treasury, at cost (1,183,885 shares at June 30, 2021 and 1,113,103 shares at December 31, 2020)		(53,437)		(50,515)
Accumulated other comprehensive loss		(2,045)		(15)
Total shareholders’ equity		260,767		261,160
Total liabilities and shareholders’ equity	$	2,272,333	$	2,203,235

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Fee Revenue and Other Income:
Information services payment and processing revenue	$	26,348	$	22,661	$	51,564	$	48,164
Bank service fees		530		398		1,024		808
(Losses) gains on sales of securities		(3)		—		45		1,069
Other		112		115		529		228
Total fee revenue and other income		26,987		23,174		53,162		50,269

Interest Income:
Interest and fees on loans		8,696		9,298		17,283		18,299
Interest and dividends on securities:
Taxable		458		473		656		1,033
Exempt from federal income taxes		1,832		1,785		3,571		3,604
Interest on federal funds sold and other short-term investments		122		86		274		1,044
Total interest income		11,108		11,642		21,784		23,980

Interest Expense:
Interest on deposits		297		481		628		1,444
Interest on short-term borrowings		—		—		─		2
Total interest expense		297		481		628		1,446
Net interest income		10,811		11,161		21,156		22,534
(Release of) provision for credit losses / loan losses		(610)		400		(1,210)		725
Net interest income after provision for credit losses / loan losses		11,421		10,761		22,366		21,809
Total net revenue		38,408		33,935		75,528		72,078

Operating Expense:
Personnel		22,880		20,891		45,406		43,318
Occupancy		959		938		1,906		1,879
Equipment		1,653		1,617		3,328		3,252
Amortization of intangible assets		214		214		429		429
Other operating expense		4,097		3,697		7,259		7,408
Total operating expense		29,803		27,357		58,328		56,286
Income before income tax expense		8,605		6,578		17,200		15,792
Income tax expense		1,579		1,139		3,103		2,808
Net income	$	7,026	$	5,439	$	14,097	$	12,984

Basic earnings per share	$	.49	$	.38	$	.99	$	.90
Diluted earnings per share		.48		.37		.97		.89

	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total
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


Balance, March 31, 2021	$	7,753	$	202,828	$	102,247	$	(49,949)	$	(3,392)	$	259,487

Net income						7,026						7,026
Cash dividends ($.27 per share)						(3,875)						(3,875)
Issuance of 9,720 common shares pursuant to stock-based compensation plan, net				(455)				450				(5)
Exercise of SARs				(101)				94				(7)
Stock-based compensation expense				826								826
Purchase of 89,010 common shares								(4,032)				(4,032)
Other comprehensive income										1,347		1,347
Balance, June 30, 2021	$	7,753	$	203,098	$	105,398	$	(53,437)	$	(2,045)	$	260,767

(In thousands except share and per share data)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Basic
Net income	$	7,026	$	5,439	$	14,097	$	12,984
Weighted-average common shares outstanding		14,267,290		14,349,040		14,286,362		14,385,927
Basic earnings per share	$	.49	$	.38	$	.99	$	.90

Diluted
Net income	$	7,026	$	5,439	$	14,097	$	12,984
Weighted-average common shares outstanding		14,267,290		14,349,040		14,286,362		14,385,927
Effect of dilutive restricted stock and stock appreciation rights		243,192		196,159		239,906		201,930
Weighted-average common shares outstanding assuming dilution		14,510,482		14,545,199		14,526,268		14,587,857
Diluted earnings per share	$	.48	$	.37	$	.97	$	.89

(In thousands)	Information Services		Banking Services		Corporate, Eliminations and Other		Total
Three Months Ended June 30, 2021:
Fee income	$	26,098	$	612	$	277	$	26,987
Interest income*		5,884		6,563		(853)		11,594
Interest expense		—		297		—		297
Intersegment income (expense)		—		688		(688)		—
Tax-equivalized pre-tax income*		6,404		3,432		(743)		9,093
Goodwill		12,433		1,829		—		14,262
Other intangible assets, net		532		2,461		—		2,993
Total assets		1,062,536		1,215,799		(6,002)		2,272,333
Average funding sources		905,983		860,956		—		1,766,939
Three Months Ended June 30, 2020:
Fee income	$	22,460	$	640	$	74	$	23,174
Interest income*		4,955		6,601		560		12,116
Interest expense		—		481		—		481
Intersegment income (expense)		—		556		(556)		—
Tax-equivalized pre-tax income*		3,437		2,981		634		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
Six Months Ended June 30, 2021:
Fee income	$	51,075	$	1,250	$	837	$	53,162
Interest income*		11,393		12,314		(975)		22,732
Interest expense		─		628		—		628
Intersegment income (expense)		—		1,311		(1,311)		—
Tax-equivalized pre-tax income*		12,417		6,194		461		18,150
Goodwill		12,433		1,829		—		14,262
Other intangible assets, net		532		2,461		—		2,993
Total assets		1,062,536		1,215,799		(6,002)		2,272,333
Average funding sources		872,106		855,099		—		1,727,205
Six Months Ended June 30, 2020:
Fee income	$	47,900	$	1,255	$	1,114	$	50,269
Interest income*		9,662		13,885		1,391		24,938
Interest expense		—		1,446		—		1,446
Intersegment income (expense)		—		1,081		(1,081)		—
Tax-equivalized pre-tax income*		8,560		5,684		2,506		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

	Performing						Nonperforming
(In thousands)	Current		30-59 Days		60-89 Days		90 Days and Over		Non- accrual		Total Loans
June 30, 2021
Commercial and industrial	$	330,714	$	—	$	—	$	—	$	—	$	330,714
Real estate
Commercial:
Mortgage		103,878		—		—		—		—		103,878
Construction		24,500		—		—		—		—		24,500
Faith-based:
Mortgage		331,235		—		—		—		—		331,235
Construction		24,051		—		—		—		—		24,051
PPP		56,642		—		—		—		—		56,642
Total	$	871,020	$	—	$	—	$	—	$	—	$	871,020
December 31, 2020
Commercial and industrial	$	298,984	$	—	$	—	$	—	$	—	$	298,984
Real estate
Commercial:
Mortgage		100,419		—		—		—		—		100,419
Construction		25,090		—		—		—		—		25,090
Faith-based:
Mortgage		333,661		—		—		—		—		333,661
Construction		23,818		—		—		—		—		23,818
PPP		109,704		—		—		—		—		109,704
Total	$	891,676	$	—	$	—	$	—	$	—	$	891,676

(In thousands)	Loans Subject to Normal Monitoring¹		Performing Loans Subject to Special Monitoring²		Nonperforming Loans Subject to Special Monitoring²		Total Loans
June 30, 2021
Commercial and industrial	$	319,477	$	11,237	$	—	$	330,714
Real estate
Commercial:
Mortgage		103,637		241		—		103,878
Construction		24,500		—		—		24,500
Faith-based:
Mortgage		328,236		2,999		—		331,235
Construction		24,051		—		—		24,051
PPP		56,642		—		—		56,642
Total	$	856,543	$	14,477	$	—	$	871,020
December 31, 2020
Commercial and industrial	$	284,882	$	14,102	$	—	$	298,984
Real estate
Commercial:
Mortgage		99,044		1,375		—		100,419
Construction		25,090		—		—		25,090
Faith-based:
Mortgage		330,554		3,107		—		333,661
Construction		23,818		—		—		23,818
PPP		109,704		—		—		109,704
Total	$	873,092	$	18,584	$	—	$	891,676

(In thousands)	C&I		CRE		Faith-based CRE		Construction		Total
Allowance for credit losses on loans:
Balance at December 31, 2020	$	4,635	$	1,175	$	5,717	$	417	$	11,944
Charge Offs		—		—		—		—		—
(Release of) provision for credit losses		(509)		(54)		(199)		(28)		($790)
Recoveries		2		—		15		—		17
Balance at June 30, 2021	$	4,128	$	1,121	$	5,533	$	389	$	11,171

	Six Months Ended June 30, 2021
	Shares		Fair Value
Balance at December 31, 2020		136,167	$	46.78
Granted		49,406		41.54
Vested		(22,750)		47.97
Balance at June 30, 2021		162,823	$	44.99

	Six Months Ended June 30,
	2021		2020
Cash Flows From Operating Activities:
Net income	$	14,097	$	12,984
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,167		5,564
Gains on sales of securities		(45)		(1,069)
Stock-based compensation expense		1,519		1,478
(Release of) provision for credit losses / loan losses		(1,210)		725
Decrease in income tax benefit		22		1
(Decrease) increase in income tax liability		(88)		592
(Decrease) increase in pension liability		(294)		2,167
(Increase) decrease in accounts receivable		(1,131)		1,472
Other operating activities, net		2,722		8,741
Net cash provided by operating activities		21,759		32,655

Cash Flows From Investing Activities:
Proceeds from sales of securities available-for-sale		13,116		19,629
Proceeds from maturities of securities available-for-sale		70,209		27,130
Purchase of securities available-for-sale		(238,831)		─
Net decrease (increase) in loans		21,093		(191,077)
Decrease in payments in excess of funding		10,301		43,948
Purchases of premises and equipment, net		(1,886)		(1,383)
Net cash used in investing activities		(125,998)		(101,753)

Cash Flows From Financing Activities:
Net decrease in noninterest-bearing demand deposits		(71,130)		(7,524)
Net increase in interest-bearing demand and savings deposits		40,759		79,066
Net decrease in time deposits		(4,542)		(2,721)
Net increase in accounts and drafts payable		104,184		60,966
Net decrease in short-term borrowings		─		(18,000)
Cash dividends paid		(7,761)		(7,811)
Purchase of common shares for treasury		(5,260)		(5,508)
Other financing activities, net		(958)		(1,185)
Net cash provided by financing activities		55,292		97,283
Net (decrease) increase in cash and cash equivalents		(48,947)		28,185
Cash and cash equivalents at beginning of period		670,528		203,954
Cash and cash equivalents at end of period	$	621,581	$	232,139

Supplemental information:

	June 30, 2021				December 31, 2020
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Assets eligible for amortization:
Customer lists	$	4,778	$	(4,122)	$	4,778	$	(3,902)
Patents		72		(26)		72		(24)
Software		2,844		(918)		2,844		(731)
Trade Name		190		(17)		190		(13)
Other		500		(308)		500		(291)
Unamortized intangible assets:
Goodwill		14,262		─		14,262		─
Total intangible assets	$	22,646	$	(5,391)	$	22,646	$	(4,961)

	June 30, 2021
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
State and political subdivisions	$	335,739	$	16,004	$	48	$	351,695
U.S. government agencies		90,756		601		424		90,933
Corporate Bonds		63,567		852		─		64,419
Total	$	490,062	$	17,457	$	472	$	507,047

	June 30, 2021
	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	$	8,184	$	48	$	─	$	─	$	8,184	$	48
U.S. government agencies		59,998		424		─		─		59,998		424
Total	$	68,182	$	472	$	─	$	─	$	68,182	$	472

	June 30, 2021
(In thousands)	Amortized Cost		Fair Value
Due in 1 year or less	$	58,144	$	58,412
Due after 1 year through 5 years		95,443		100,135
Due after 5 years through 10 years		216,180		227,682
Due after 10 years		120,295		120,818
Total	$	490,062	$	507,047

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In thousands)	2021		2020		2021		2020
Fee revenue and other income
In-scope of FASB ASC 606
Invoice processing fees	$	19,753	$	17,923	$	38,817	$	37,047
Invoice payment fees		6,595		4,738		12,747		11,117
Information services payment and processing revenue		26,348		22,661		51,564		48,164
Bank service fees		530		398		1,024		808
Fee revenue (in-scope of FASB ASC 606)		26,878		23,059		52,588		48,972
Other income (out-of-scope of FASB ASC 606)		109		115		574		1,297
Total fee revenue and other income		26,987		23,174		53,162		50,269

*(In thousands except per share data)*	Second Quarter of								First Half of
*(In thousands except per share data)*	2021				2020			% Change	2021			2020		% Change
Net income	$	7,026		$		5,439		29.2%	$	14,097		$	12,984		8.6%
Diluted earnings per share	$	.48		$		.37		29.7%	$	.97		$	.89		9.0%
Return on average assets		1.24	%			1.16	%	—		1.27	%		1.43	%	—
Return on average equity		10.83	%			9.04	%	—		10.96	%		10.77	%	—

*(In thousands)*	Second Quarter of						First Half of
*(In thousands)*		2021		2020	% Change		2021		2020	% Change
Transportation invoice volume		9,461		7,294	29.7%		18,248		15,574	17.2%
Transportation invoice dollar volume	$	8,940,889	$	5,697,627	56.9%	$	16,845,528	$	12,164,678	38.5%
Facility-related transaction volume*		6,827		6,704	1.8%		13,823		13,213	4.6%
Facility-related dollar volume*	$	3,657,965	$	3,064,038	19.4%	$	7,375,393	$	6,522,684	13.1%
Payment and processing revenue	$	26,348	$	22,661	16.3%	$	51,564	$	48,164	7.1%

*(In thousands)*	Second Quarter of 2021						Second Quarter of 2020
*(In thousands)*	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Assets¹
Interest-earning assets
Loans²:
Taxable	$	901,619	$	8,696	3.87	%	$	964,060	$	9,298	3.88	%
Investment securities³:
Taxable		156,057		458	1.18			82,107		471	2.31
Tax-exempt⁴		316,371		2,319	2.94			288,078		2,260	3.16
Certificates of deposit		—		—	—			313		2	2.57
Interest-bearing deposits in other financial institutions		419,475		104	0.10			273,287		73	0.11
Federal funds sold and other short-term investments		175,124		18	0.04			16,570		12	0.29
Total interest-earning assets		1,968,646		11,595	2.36			1,624,415		12,116	3.00
Non-interest-earning assets
Cash and due from banks		20,565						15,948
Premises and equipment, net		17,848						20,069
Bank-owned life insurance		17,693						17,760
Goodwill and other intangibles		17,382						18,239
Other assets		247,983						200,779
Allowance for loan losses		(11,715)						(10,895)
Total assets	$	2,278,402					$	1,886,315
Liabilities and Shareholders’ Equity¹
Interest-bearing liabilities
Interest-bearing demand deposits	$	525,286	$	136	0.10	%	$	394,756	$	202	0.21	%
Savings deposits		17,772		2	0.05			12,921		3	0.09
Time deposits >= $100		22,841		68	1.19			28,268		138	1.96
Other time deposits		30,835		91	1.18			42,414		138	1.31
Total interest-bearing deposits		596,734		297	0.20			478,359		481	0.40
Short-term borrowings		10		—	—			11		—	—
Total interest-bearing liabilities		596,744		297	0.20			478,370		481	0.40
Non-interest bearing liabilities
Demand deposits		420,072						359,808
Accounts and drafts payable		947,987						741,547
Other liabilities		53,482						64,489
Total liabilities		2,018,285						1,644,214
Shareholders’ equity		260,117						242,101
Total liabilities and shareholders’ equity	$	2,278,402					$	1,886,315
Net interest income			$	11,298					$	11,635
Net interest margin					2.30	%					2.88	%
Interest spread					2.16						2.60

*(In thousands)*	First Half of 2021						First Half of 2020
*(In thousands)*	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Assets¹
Interest-earning assets
Loans²:
Taxable	$	891,477	$	17,283	3.91	%	$	881,781	$	18,299	4.17	%
Investment securities³:
Taxable		119,604		656	1.11			88,899		1,028	2.33
Tax-exempt⁴		302,456		4,520	3.01			292,561		4,562	3.14
Certificates of deposit		—		—	—			407		5	2.47
Interest-bearing deposits in other financial institutions		500,340		242	0.10			201,949		456	0.45
Federal funds sold and other short-term investments		116,357		32	0.06			90,547		588	1.31
Total interest-earning assets		1,930,234		22,733	2.37			1,556,144		24,938	3.22
Non-interest-earning assets:
Cash and due from banks		20,455						16,649
Premises and equipment, net		17,958						20,182
Bank-owned life insurance		17,806						17,703
Goodwill and other intangibles		17,490						18,347
Other assets		239,636						213,674
Allowance for loan losses		(11,835)						(10,728)
Total assets	$	2,231,744					$	1,831,971
Liabilities and Shareholders’ Equity¹
Interest-bearing liabilities:
Interest-bearing demand deposits	$	500,388	$	287	0.12	%	$	360,804	$	835	0.47	%
Savings deposits		19,775		5	0.05			10,662		16	0.30
Time deposits >= $100		23,668		185	1.58			29,044		279	1.93
Other time deposits		31,106		151	0.98			43,253		314	1.46
Total interest-bearing deposits		574,937		628	0.22			443,763		1,444	0.65
Short-term borrowings		10		—	—			110		2	3.66
Total interest-bearing liabilities		574,947		628	0.22			443,873		1,446	0.66
Non-interest bearing liabilities:
Demand deposits		419,013						327,486
Accounts and drafts payable		923,320						754,773
Other liabilities		55,054						63,359
Total liabilities		1,972,334						1,589,491
Shareholders’ equity		259,410						242,480
Total liabilities and shareholders’ equity	$	2,231,744					$	1,831,971
Net interest income			$	22,105					$	23,492
Net interest margin					2.31	%					3.04	%
Interest spread					2.15						2.56

*(In thousands)*	Second Quarter of 2021 Over Second Quarter of 2020
*(In thousands)*	Volume		Rate		Total
Increase (decrease) in interest income:
Loans¹:
Taxable	$	(578)	$	(24)	$	(602)
Investment securities:
Taxable		290		(303)		(13)
Tax-exempt²		217		(158)		59
Certificates of deposit		(2)		—		(2)
Interest-bearing deposits in other financial institutions		37		(6)		31
Federal funds sold and other short-term investments		24		18)		6
Total interest income		(12)		(509)		(521)
Interest expense on:
Interest-bearing demand deposits		54		(120)		(66)
Savings deposits		1		(2)		(1)
Time deposits >=$100		(23)		(47)		(70)
Other time deposits		(35)		(12)		(47)
Total interest expense		(3)		(181)		(184)
Net interest income	$	(9)	$	(328)	$	(337)

*(In thousands)*	First Half of 2021 Over First Half of 2020
*(In thousands)*	Volume		Rate		Total
Increase (decrease) in interest income:
Loans¹:
Taxable	$	190	$	(1,206)	$	(1,016)
Investment securities:
Taxable		278		(650)		(372)
Tax-exempt²		145		(187)		(42)
Certificates of deposit		(5)		—		(5)
Interest-bearing deposits in other financial institutions		325		(539)		(214)
Federal funds sold and other short-term investments		129		(685)		(556)
Total interest income		1,062		(3,267)		(2,205)
Interest expense on:
Interest-bearing demand deposits		238		(786)		(548)
Savings deposits		8		(19)		(11)
Time deposits >=$100		(47)		(47)		(94)
Other time deposits		(75)		(88)		(163)
Short-term borrowings		(1)		(1)		(2)
Total interest expense		123		(941)		(818)
Net interest income	$	939	$	(2,326)	$	(1,387)

*(In thousands)*		Second Quarter of				First Half of
*(In thousands)*		2021		2020		2021		2020
Allowance for credit/loan losses at beginning of period	$	11,721	$	10,889	$	11,944	$	10,556
(Release of) provision for credit/loan losses		(550)		400		(790)		725
Loans charged off		—		—		—		—
Recoveries on loans previously charged off		—		3		17		11
Net recoveries		—		3		17		11
Allowance for credit/loan losses at end of period	$	11,171	$	11,292	$	11,171	$	11,292
Allowance for unfunded commitments at beginning of Period	$	207	$	—	$	567	$	—
(Release of) provision for credit losses		(60)		—		(420)		—
Allowance for unfunded commitments at end of period		147		—		147		—
Loans outstanding:
Average	$	901,619	$	964,060	$	891,477	$	881,781
June 30		871,020		963,726		871,020		963,726
Ratio of ACL to loans outstanding:
Average		1.24%		1.17%		1.25%		1.28%
June 30		1.28%		1.17%		1.28%		1.17%

	June 30, 2021			December 31, 2020
*(Dollars in thousands)*	Amount		Ratio	Amount		Ratio
Total capital (to risk-weighted assets)
Cass Information Systems, Inc.	$	256,648	19.90%	$	255,332	21.41%
Cass Commercial Bank		180,343	22.22%		171,298	21.46%
Common equity tier I capital (to risk-weighted assets)
Cass Information Systems, Inc.	$	245,477	19.04%	$	243,388	20.41%
Cass Commercial Bank		170,195	20.97%		161,300	20.21%
Tier I capital (to risk-weighted assets)
Cass Information Systems, Inc.	$	245,477	19.04%	$	243,388	20.41%
Cass Commercial Bank		170,195	20.97%		161,300	20.21%
Tier I capital (to leverage assets)
Cass Information Systems, Inc.	$	245,477	10.86%	$	243,388	11.52%
Cass Commercial Bank		170,195	13.60%		161,300	14.48%

(In thousands)	December 31, 2019		Impact of ASU 2016-13 Adoption		As Reported Under ASU 2016-13
Assets:
Allowance for credit/loan losses on loans	$	10,556	$	723	$	11,279
Deferred tax asset		2,298		269		2,567
Liabilities:
Reserve for unfunded commitments		─		402		402
Shareholders’ equity:
Retained earnings		90,341		(856)		89,485

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, 2021 – April 30, 2021	—	—	—	434,622
May 1, 2021– May 31, 2021	59,092	44.78	59,092	375,530
June 1, 2021 – June 30, 2021	29,918	45.25	29,918	345,612
Total	89,010	44.94	89,010	345,612

	(a)	None.
	(b)	There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors implemented in the Second Quarter of 2021.

	CASS INFORMATION SYSTEMS, INC.

DATE: August 5, 2021	By	/s/ Eric H. Brunngraber
		Eric H. Brunngraber
		Chairman, President, and Chief Executive Officer
		(Principal Executive Officer)



DATE: August 5, 2021	By	/s/ Michael J. Normile
		Michael J. Normile
		Executive Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

	/s/ Eric H. Brunngraber
	Eric H. Brunngraber
	Chairman, President, and Chief
	Executive Officer
	(Principal Executive Officer)

	/s/ Michael J. Normile
	Michael J. Normile
	Executive Vice President and Chief
	Financial Officer
	(Principal Financial and Accounting Officer)