Cass Information Systems, Inc · NASDAQ:CASS
Cass Information Systems — Q1 2024 Earnings Presentation
24 slides from Cass Information Systems's earnings presentation, 2024
Slide 1: The Power to Deliver Solutions
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 2024 INVESTOR PRESE
Slide 2: Table of Contents
TABLE OF CONTENTS 3 Forward-Looking Statements 4 Cass at a Glance 6 Financial Performance 9 Revenue & Expenses 14 Balance Sheet 19 Capital 20 Leadership and Shareholder Information www.cassinfo.com / © 2023 Cass Information Systems 2
Slide 3: Forward Looking Statements
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,” “poten
Slide 4: Cass at a Glance
CASS AT A GLANCE www.cassinfo.com / © 2023 Cass Information Systems 4
Slide 5: Overview
OVERVIEW INFORMATION SYSTEMS / PAYMENTS + Cass is an information services company that + Transportation information systems provides freight invoice audit and payment services processes freight and facility payments for a number + Facilities expense management provides invoice management, payment an
Slide 6: Financial Performance
FINANCIAL PERFORMANCE www.cassinfo.com / © 2023 Cass Information Systems 6
Slide 7: Q1 2024 Financial Highlights
Q1 2024 FINANCIAL HIGHLIGHTS NET INCOME DILUTED EPS RETURN ON EQUITY + Net income of $7.2 million $7.12M $7.15M $0.52 13.76% $0.51 12.66% + Diluted EPS of $0.52 + Return on average equity of 12.66% + Quarterly revenue of $49.7 million + Net interest margin of 3.26% Q1 '23 Q1 '24 Q1 '23 Q1 '24 Q1 '23
Slide 8: Quarterly Financial Performance
QUARTERLY FINANCIAL PERFORMANCE TOTAL REVENUE TOTAL OPERATING EXPENSE NET INCOME $50.7M $40.7M $8.41M $49.7M $40.4M $40.4M $40.1M $7.39M $49.3M $49.2M $7.12M $7.14M $7.15M $39.3M $48.2M Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 DILUTED E
Slide 9: Revenue & Expenses
REVENUE & EXPENSES www.cassinfo.com / © 2023 Cass Information Systems 9
Slide 10: Financial Fees
FINANCIAL FEES FINANCIAL FEES $11.7M $11.6M $11.5M + Financial fees declined due to lower transportation dollar volumes, which led to a lower $11.3M $10.8M average balance of payments in advance of funding, and changes in the manner certain vendors receive payments, partially offset by an increase i
Slide 11: Processing Fees
PROCESSING FEES + The change quarter to quarter is generally correlated to transportation and facility invoice volumes. + Processing fees increased as compared to 1Q 2023 primarily due to a 23.0% increase in facility invoice volumes. The Company has experienced recent success in winning facility cli
Slide 12: Net Interest Income
NET INTEREST INCOME + The net interest margin declined 4 basis points from the fourth quarter of 2023 to the first quarter of 2024 due to a $91.6 million decrease in average non-interest bearing funding, consisting of $17.0 million in average non-interest bearing deposits and $74.6 million in averag
Slide 13: Operating Expense
OPERATING EXPENSE ($$ in millions) + Salaries and commissions increased $1.4 million, or Expense 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 6.1%, primarily due a 5.2% increase in average FTEs Salaries and commissions 22.6 23.6 23.4 23.9 24.0 related to strategic investments in various technology initiatives
Slide 14: Balance Sheet
BALANCE SHEET www.cassinfo.com / © 2023 Cass Information Systems 14
Slide 15: Loans
LOANS + The Company experienced C&I loan growth during the first quarter of 2024 which contributed to an increase in loans or $22.7 million, or 2.2% compared to 12/31/23. + The Company has not incurred a loan charge-off since 2015. ($$ in millions) PORTFOLIO COMPOSITION Portfolio Composition 3/31/23
Slide 16: Investment Portfolio Composition
INVESTMENT PORTFOLIO COMPOSITION + All investment securities are classified as available-for-sale. The overall weighted-average PORTFOLIO COMPOSITION repricing term is 3.7 years and the average yield for 1Q2024 was 2.71%. The portfolio had (BOOK VALUE) unrealized losses of $59.9 million at March 31,
Slide 17: Funding
FUNDING + For 1Q 2024, 70.1% of average funding was non-interest bearing, a strategic advantage in current rate environment. + Average deposits increased $22.5 million as compared to the fourth quarter of 2023. + The decrease in average accounts and drafts payable is reflective of the decrease in tr
Slide 18: Key Funding Points
KEY FUNDING POINTS + 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 deposits almost entirely consist of operating accounts
Slide 19: Capital
CAPITAL + Repurchased 23,271 shares of Company Tier 1 leverage ratio at 3/31/24 11.34% stock during 1Q2024 + Maintain excess capital to support Common equity tier 1 risk- organic balance sheet growth and 14.84% based ratio at 3/31/24 opportunistic acquisitions + Quarterly dividend of $0.30 per share
Slide 20: Leadership and Shareholder Information
LEADERSHIP AND SHAREHOLDER INFORMATION www.cassinfo.com / © 2023 Cass Information Systems 20
Slide 21: Board of Directors
BOARD OF DIRECTORS Eric H. Brunngraber Wendy J. Henry Sally H. Roth Executive Chairman Retired Managing Partner, Retired Area President — BKD, LLP Upper Midwest, Regions Bank Ralph W. Clermont James J. Lindemann Joseph D. Rupp Retired Managing Partner, Retired Executive Lead Director and Retired Cha
Slide 22: Leadership Council
LEADERSHIP COUNCIL Cory J. Bricker Carl N. Friedholm Sean M. Mullins Jeanne M. Scannell Senior Vice President and Senior Vice President and President - Vice President – Chief Chief Credit Officer - Cass President - CassPay Telecom Expense Management Information Security Officer Commercial Bank Mark
Slide 23: Shareholder Information
SHAREHOLDER INFORMATION CORPORATE HEADQUARTERS SHAREHOLDER WEBSITE TRANSFER AGENT Cass Information Systems, Inc. www.computershare.com/investor Shareholder correspondence 12444 Powerscourt Drive, Suite 550 should be mailed to: Saint Louis, Missouri 63131 INDEPENDENT AUDITORS Computershare 314.506.55
Slide 24: Thank You for Your Time
Thank You for Your Time Cass Information Systems, Inc.
Cass Information Systems — Q1 2024 Earnings Presentation on 6ix