Cass Information Systems, Inc · NASDAQ:CASS
Cass Information Systems — Q1 2023 Earnings Presentation
27 slides from Cass Information Systems's earnings presentation, Apr 17, 2023
Slide 1: The Power to Deliver Solutions - Q1 2023 Investor Presentation
The Power to Deliver Solutions Around the world, leading enterprises rely on Cass for our vertical expertise, processing power, and global payment network to execute critical financial transactions while driving greater control and efficiency across critical business expenses. Q1 2023 INVESTOR PRESE
Slide 2: Table of Contents
Forward-Looking Statements Cass at a Glance Financial Performance Revenue & Expenses Balance Sheet Capital ESG Highlights Leadership and Shareholder Information TABLE OF CONTENTS 2 3 4 6 10 15 21 22 www.cassinfo.com / © 2023 Cass Information Systems 23
Slide 3: Forward-Looking Statements
This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contain words such as “anticipate,” “believe,” “can,” “would,” “should,” “could,” “may,” “predict,” “seek,” “potential,” “will,” “estimate,”
Slide 4: Cass at a Glance
4www.cassinfo.com / © 2023 Cass Information Systems CASS AT A GLANCE
Slide 5: Cass at a Glance
+ Cass is an information services company that processes freight and facility payments for a number of the largest global companies + The information systems business has a 70-year legacy + As a result of its $90B of payments, Cass generates $1B+ of average non-interest bearing float + Cass continue
Slide 6: Financial Performance
6www.cassinfo.com / © 2023 Cass Information Systems FINANCIAL PERFORMANCE
Slide 7: Q1 2023 Financial Highlights
Q1 2023 FINANCIAL HIGHLIGHTS 7www.cassinfo.com / © 2023 Cass Information Systems $8.26M $7.12M Q1 '22 Q1 '23 $0.60 $0.51 Q1 '22 Q1 '23 14.21% 13.76% Q1 '22 Q1 '23 NET INCOME DILUTED EPS RETURN ON EQUITY + Net income of $7.1 million + Diluted EPS of $0.51 + Return on average equity of 13.76% + Record
Slide 8: Quarterly Financial Performance
QUARTERLY FINANCIAL PERFORMANCE 8www.cassinfo.com / © 2023 Cass Information Systems $42.1M $44.2M $47.2M $48.9M $49.3M Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 $8.26M $8.56M $8.80M $9.29M $7.12M Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 14.21% 16.53% 16.84% 18.96% 13.76% Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 $0.60
Slide 9: Technology Investment Update
TECHNOLOGY INVESTMENT UPDATE 9www.cassinfo.com / © 2023 Cass Information Systems + The Company has moved into production multiple technology projects involving automated invoice retrieval, automated extraction of data, general ledger mapping platform, and improving the transportation rating engine f
Slide 10: Revenue & Expenses
10www.cassinfo.com / © 2023 Cass Information Systems REVENUE & EXPENSES
Slide 11: Financial Fees
FINANCIAL FEES 11www.cassinfo.com / © 2023 Cass Information Systems + Despite a decline in transportation dollar volumes which led to a lower average balance of payments in advance of funding, financial fees were up over the same period last year due to the increase in short-term interest rates + Tr
Slide 12: Processing Fees
PROCESSING FEES 12www.cassinfo.com / © 2023 Cass Information Systems + The change quarter to quarter is generally correlated to transportation and facility invoice volumes, although Cass has other processing fee revenue tied to CassPay and Cass Commercial Bank. + Processing fees increased as compare
Slide 13: Net Interest Income
NET INTEREST INCOME 13www.cassinfo.com / © 2023 Cass Information Systems + The increase in short-term interest rates has had a positive impact on net interest income and margin, jumping from 2.36% during 1Q 2022 up to 3.23% in 1Q 2023 + Average interest-earning assets declined during 1Q 2023 as comp
Slide 14: Operating Expense
OPERATING EXPENSE 14www.cassinfo.com / © 2023 Cass Information Systems + Salaries and commissions as well as other benefits have increased due to average FTEs being up 13.2% as compared to 1Q 2022, primarily due to the Touchpoint acquisition and various technology initiatives. + Share-based compensa
Slide 15: Balance Sheet
15www.cassinfo.com / © 2023 Cass Information Systems BALANCE SHEET
Slide 16: Loans
LOANS 16www.cassinfo.com / © 2023 Cass Information Systems + Cass experienced good organic loan growth in 2022, in particular its specialty franchise, faith-based and investment grade lease niches + Cass has not incurred a loan charge-off since 2015 Portfolio Composition 3/31/22 6/30/22 9/30/22 12/3
Slide 17: Investments
INVESTMENTS 17www.cassinfo.com / © 2023 Cass Information Systems + The yield on investment securities has been increasing due to the increase in short-term interest rates + Cass maintains a high-quality investment portfolio as detailed on the following slide. The decline during 1Q 2023 was due to ma
Slide 18: Investment Portfolio Composition
INVESTMENT PORTFOLIO COMPOSITION 18www.cassinfo.com / © 2023 Cass Information Systems + All investment securities are classified as available-for-sale. The overall weighted-average repricing term is 3.9 years. + All of the $156.5 million of U.S. Treasury bonds mature by July 31, 2024 and $50.0 milli
Slide 19: Funding
FUNDING 19www.cassinfo.com / © 2023 Cass Information Systems + For 1Q 2023, 73.6% of average funding was non-interest bearing + The Company’s funding is diversified close to 50/50 between Bank deposits and payment float generated from transportation and facility clients. AVERAGE DEPOSITS AND ACCOUNT
Slide 20: Key Funding Points
KEY FUNDING POINTS 20www.cassinfo.com / © 2023 Cass Information Systems + Accounts and drafts payable represents float generated by our payments businesses and have proven a very stable source of funding over a long period of time. + Deposits are generated from core Bank and CassPay clients. These d
Slide 21: Capital
CAPITAL 21www.cassinfo.com / © 2023 Cass Information Systems + $121.9 million in excess of capital over 7.0% common equity tier 1 risk-based regulatory requirement + Maintain excess capital to support organic balance sheet growth and opportunistic acquisitions + Quarterly dividend of $0.29 per share
Slide 22: Environmental, Social and Governance (ESG) Highlights
During March 2023, we published our annual ESG report, a copy of which is available on our Investor Relations site. To read more from the Cass ESG report, please follow this link to cassinfo.com ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) HIGHLIGHTS 22www.cassinfo.com / © 2023 Cass Information System
Slide 23: Leadership and Shareholder Information
LEADERSHIP AND SHAREHOLDER INFORMATION 23www.cassinfo.com / © 2023 Cass Information Systems
Slide 24: Board of Directors
BOARD OF DIRECTORS 24 Eric H. Brunngraber Chairman and Chief Executive Officer Ralph W. Clermont Retired Managing Partner, KPMG LLP, Saint Louis, Missouri Robert A. Ebel Retired Chief Executive Officer, Universal Printing Company Wendy J. Henry Retired Managing Partner, BKD, LLP James J. Lindemann R
Slide 25: Leadership Council
LEADERSHIP COUNCIL 25 Cory J. Bricker Vice President - CassPay Carl N. Friedholm Vice President and General Manager - Telecom Expense Management Christi A. Reiter Vice President - Human Resources Eric H. Brunngraber Chairman and Chief Executive Officer Nicole M. Jennings Vice President - Internal Au
Slide 26: Shareholder Information
SHAREHOLDER INFORMATION 26www.cassinfo.com / © 2023 Cass Information Systems CORPORATE HEADQUARTERS Cass Information Systems, Inc. 12444 Powerscourt Drive, Suite 550 Saint Louis, Missouri 63131 314.506.5500 www.cassinfo.com INVESTOR RELATIONS ir@cassinfo.com COMMON STOCK The company’s common stock t
Slide 27: Thank You for Your Time
Thank You for Your Time Cass Information Systems, Inc:
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