Cass Information Systems (CASS) came out with quarterly earnings of $0.52 per share, missing the Zacks Consensus Estimate of $0.59 per share. This compares to earnings of $0.51 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -11.86%. A quarter ago, it was expected that this invoice and payment management company would post earnings of $0.48 per share when it actually produced earnings of $0.61, delivering a surprise of 27.08%. ...

While "the trend is your friend" when it comes to short-term investing or trading, timing entries into the trend is a key determinant of success. And increasing the odds of success by making sure the sustainability of a trend isn't easy.The trend often reverses before exiting the trade, leading to a short-term capital loss for investors. So, for a profitable trade, one should confirm factors such as sound fundamentals, positive earnings estimate revisions, etc. that could keep the momentum in the stock aliv ...

The Zacks Computer - Services industry is riding on the ongoing digital transformation, which is increasing the demand for cloud-enabled software solutions. The rising adoption of digital transformative techniques in healthcare and financial services has been a silver lining for industry participants. CGI Group (GIB) , Perficient (PRFT) and Cass Information Systems (CASS) are well-positioned to benefit from the above-mentioned factors. The growing need for consulting, research and cyber-security solutions, ...

While "the trend is your friend" when it comes to short-term investing or trading, timing entries into the trend is a key determinant of success. And increasing the odds of success by making sure the sustainability of a trend isn't easy.The trend often reverses before exiting the trade, leading to a short-term capital loss for investors. So, for a profitable trade, one should confirm factors such as sound fundamentals, positive earnings estimate revisions, etc. that could keep the momentum in the stock aliv ...

Cass' core competencies allow it to perform the highest volumes of transaction processing in an integrated, efficient and systematic approach. Not only is Cass able to process the transaction, it is also able to collect the data defining the transaction and effect the financial payment governing its terms. Marketing, Customers and Competition Employees and Human Capital Resources Table of Contents The Company's DEI Committee was formed after a thorough process of determining a charter and actively looks to ...

Most of us have heard the dictum "the trend is your friend." And this is undeniably the key to success when it comes to short-term investing or trading. But it isn't easy to ensure the sustainability of a trend and profit from it.Often, the direction of a stock's price movement reverses quickly after taking a position in it, making investors incur a short-term capital loss. So, it's important to ensure that there are enough factors -- such as sound fundamentals, positive earnings estimate revisions, etc. -- ...

Cass Information Systems (CASS) came out with quarterly earnings of $0.61 per share, beating the Zacks Consensus Estimate of $0.48 per share. This compares to earnings of $0.67 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 27.08%. A quarter ago, it was expected that this invoice and payment management company would post earnings of $0.55 per share when it actually produced earnings of $0.54, delivering a surprise of -1.82%.O ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited consolidated financial statements and management's analysis of financial condition [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited consolidated financial statements including balance sheets, income, comprehensive income, cash flows, and equity [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to $2.50 billion, driven by reduced loans and securities, offset by increased cash Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 (Unaudited) | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $408,435 | $200,942 | | Securities available-for-sale | $615,855 | $754,468 | | Loans, net | $1,026,300 | $1,069,367 | | **Total Assets** | **$2,504,878** | **$2,573,023** | | **Liabilities & Equity** | | | | Total deposits | $1,177,342 | $1,257,217 | | Accounts and drafts payable | $1,082,224 | $1,067,600 | | **Total Liabilities** | **$2,298,642** | **$2,366,698** | | **Total Shareholders' Equity** | **$206,236** | **$206,325** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income declined in Q3 and nine-month periods due to increased operating expenses outpacing revenue growth Income Statement Summary (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Total net revenue | $49,223 | $47,205 | $146,775 | $133,530 | | Total operating expense | $40,063 | $36,321 | $119,774 | $101,788 | | **Net income** | **$7,394** | **$8,799** | **$21,649** | **$25,619** | | **Diluted earnings per share** | **$0.54** | **$0.64** | **$1.56** | **$1.86** | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income significantly improved for the nine-month period due to smaller unrealized losses on securities Comprehensive Income (Loss) Summary (in thousands) | Metric | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Net income | $7,394 | $8,799 | $21,649 | $25,619 | | Other comprehensive (loss) income | $(10,526) | $(20,114) | $(7,599) | $(66,832) | | **Total comprehensive (loss) income** | **$(3,132)** | **$(11,315)** | **$14,050** | **$(41,213)** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash increased by $207.5 million for the nine months, primarily from investing activities and operations Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $29,366 | $40,799 | | Net cash provided by (used in) investing activities | $194,245 | $(249,861) | | Net cash (used in) provided by financing activities | $(16,118) | $41,128 | | **Net increase (decrease) in cash** | **$207,493** | **$(167,934)** | [Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity remained stable, influenced by dividends, repurchases, and comprehensive loss, offset by net income - For the nine months ended September 30, 2023, the company paid cash dividends of **$0.87 per share**, totaling **$11.9 million**[35](index=35&type=chunk) - The company repurchased **136,577 common shares** for **$5.2 million** during the first nine months of 2023[35](index=35&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment information, loan portfolio, stock repurchase program, and recent accounting standard adoption - The company operates in **two reportable segments**: Information Services (invoice processing for transportation, energy, etc.) and Banking Services (commercial banking)[45](index=45&type=chunk)[76](index=76&type=chunk) - Total loans decreased to **$1.04 billion** at September 30, 2023, from **$1.08 billion** at December 31, 2022. The portfolio consists primarily of commercial & industrial and real estate loans, with **no loans past due** as of September 30, 2023[82](index=82&type=chunk) - The company repurchased **136,577 shares** in the first nine months of 2023. A new repurchase authorization for up to **500,000 shares** was approved by the Board on October 17, 2023, replacing the prior program[75](index=75&type=chunk) - Effective **January 1, 2023**, the company adopted **ASU 2022-02**, which eliminated the accounting guidance for troubled debt restructurings and enhanced disclosure requirements for loan modifications to borrowers experiencing financial difficulty[73](index=73&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses revenue growth, net income decline due to expenses, freight recession impact, and strong liquidity [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Net income decreased due to higher operating expenses, despite growth in fee revenue and net interest income Key Performance Metrics | Metric | Q3 2023 vs Q3 2022 | 9M 2023 vs 9M 2022 | | :--- | :--- | :--- | | Net Revenue | +4.3% | +9.9% | | Operating Expense | +10.3% | +17.7% | | Net Income | -16.0% | -15.5% | | Diluted EPS | -15.6% | -16.1% | - Processing fee revenue increased **5.1%** in Q3 2023 vs Q3 2022, driven by a **3.1% increase** in facility-related invoice volumes and ancillary fees, which offset a **4.9% decline** in transportation invoice volumes[235](index=235&type=chunk) - Net interest income for the nine months ended Sep 30, 2023, increased **19.1%** year-over-year, primarily due to the increase in the Federal Funds rate, which expanded the net interest margin to **3.24%** from **2.61%**[114](index=114&type=chunk)[186](index=186&type=chunk) - Personnel expenses, the largest component of operating costs, increased **14.6%** for the nine-month period due to merit increases, an increase in full-time employees for technology initiatives, and higher benefit costs[225](index=225&type=chunk) [Financial Condition](index=35&type=section&id=Financial%20Condition) Total assets decreased, marked by increased cash, decreased investments and loans, and a decline in total deposits - Cash and cash equivalents increased by **$207.5 million (103.3%)** during the first nine months of 2023[228](index=228&type=chunk) - The investment securities portfolio decreased by **$138.6 million (18.4%)**, primarily due to sales and maturities[259](index=259&type=chunk) - Loans decreased by **$43.3 million (4.0%)** as the company became more selective in booking new loans amid declining deposits[248](index=248&type=chunk) - Total deposits decreased by **$79.9 million (6.4%)** from year-end 2022, as commercial clients moved funds to higher-rate alternatives, but balances have shown recent stabilization[249](index=249&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with substantial cash and borrowing capacity, exceeding all regulatory capital requirements - Primary liquidity is strong, with cash and cash equivalents at **$408.4 million**, representing **16.3% of total assets**[263](index=263&type=chunk) - The company has substantial secondary liquidity, including unsecured lines of credit up to **$83.0 million** and secured lines of credit up to **$457.8 million**, with **no amounts outstanding**[251](index=251&type=chunk) Regulatory Capital Ratios (Consolidated) as of Sep 30, 2023 | Ratio | Actual | Requirement for Well-Capitalized | | :--- | :--- | :--- | | Total capital (to risk-weighted assets) | 15.30% | N/A | | Common Equity Tier I Capital | 14.53% | N/A | | Tier I capital (to risk-weighted assets) | 14.53% | N/A | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company manages interest rate risk, with simulations indicating asset sensitivity to rate changes Simulated Change in Net Interest Income (Next 12 Months) | Rate Shock | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | +200 basis points | +13.7% | +10.6% | | +100 basis points | +8.2% | +4.2% | | -100 basis points | -3.2% | —% | | -200 basis points | -6.0% | -1.5% | - The company is generally **asset sensitive**, as average interest-earning assets of **$2.06 billion** for Q3 2023 significantly exceeded average interest-bearing liabilities of **$591.6 million**[282](index=282&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were effective, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2023[283](index=283&type=chunk) - **No material changes** in internal control over financial reporting were identified during the third quarter of 2023[270](index=270&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, updated risk factors, equity sales, and other miscellaneous information [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course legal actions, not expected to materially affect financial condition - Management does not expect any pending or threatened legal actions to have a **material effect** on the company's business or financial condition[284](index=284&type=chunk) [Item 1A. Risk Factors](index=40&type=page&id=Item%201A.%20Risk%20Factors) Updated risks include liquidity issues from eroded confidence, potential realized losses on securities, and increased regulatory scrutiny - The company identifies a risk of an unexpected inability to obtain liquidity due to **eroded customer confidence** in regional banks following recent high-profile bank failures[274](index=274&type=chunk)[276](index=276&type=chunk) - Rising interest rates have created **significant unrealized losses** in the available-for-sale securities portfolio, which could become realized losses if the company were required to sell them to meet liquidity needs[277](index=277&type=chunk)[287](index=287&type=chunk) - The company anticipates **increased regulatory scrutiny** and new regulations in response to recent banking industry events, which could increase costs and reduce profitability[88](index=88&type=chunk)[296](index=296&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details on common stock repurchases during Q3 2023 and a new share repurchase authorization are provided Share Repurchases for Q3 2023 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jul 2023 | 1,122 | $38.68 | | Aug 2023 | 60,900 | $38.79 | | Sep 2023 | 11,250 | $38.16 | | **Total** | **73,272** | **$38.69** | - On **October 17, 2023**, the Board of Directors authorized a new repurchase program for up to **500,000 shares**, replacing the previous authorization from October 2021[75](index=75&type=chunk)[298](index=298&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company - **Not applicable**[91](index=91&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) No other significant information reported, specifically no Rule 10b5-1 trading arrangements by officers or directors - During Q3 2023, **none** of the company's officers or directors adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements[92](index=92&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including Sarbanes-Oxley certifications and Interactive Data Files (XBRL) - The exhibits filed with this report include **CEO and CFO certifications** (Exhibits 31.1, 31.2, 32.1, 32.2) and **Inline XBRL documents** (Exhibit 101)[93](index=93&type=chunk)[293](index=293&type=chunk) [Signatures](index=43&type=section&id=SIGNATURES) The report was duly signed by the President and CEO, and Executive Vice President and CFO - The report was duly signed on **November 7, 2023**, by Martin H. Resch, President and Chief Executive Officer, and Michael J. Normile, Executive Vice President and Chief Financial Officer[96](index=96&type=chunk)[302](index=302&type=chunk)

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited consolidated financial statements for the quarterly period ended June 30, 2023, revealing a decrease in net income primarily due to higher operating expenses despite increased net interest income [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets decreased to $2.47 billion from $2.57 billion, primarily due to reduced securities and loans, while total liabilities also fell to $2.26 billion from $2.37 billion, and shareholders' equity increased to $215.1 million from $206.3 million | Account | June 30, 2023 ($ in thousands) | Dec 31, 2022 ($ in thousands) | | :--- | :--- | :--- | | **Total Assets** | **2,470,796** | **2,573,023** | | Cash and cash equivalents | 270,473 | 200,942 | | Loans, net | 1,042,654 | 1,069,367 | | Securities available-for-sale | 637,513 | 754,468 | | **Total Liabilities** | **2,255,650** | **2,366,698** | | Total deposits | 1,191,434 | 1,257,217 | | Accounts and drafts payable | 1,021,524 | 1,067,600 | | **Total Shareholders' Equity** | **215,146** | **206,325** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q2 2023 decreased to $7.1 million from $8.6 million, and for the first half of 2023, it fell to $14.3 million from $16.8 million, primarily due to a significant increase in operating expenses outpacing revenue growth | Metric | Q2 2023 ($ in thousands) | Q2 2022 ($ in thousands) | H1 2023 ($ in thousands) | H1 2022 ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total net revenue | 48,207 | 44,222 | 97,552 | 86,325 | | Total operating expense | 39,339 | 33,639 | 79,711 | 65,467 | | **Net income** | **7,138** | **8,562** | **14,255** | **16,820** | | **Diluted earnings per share** | **$0.52** | **$0.62** | **$1.03** | **$1.22** | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income for Q2 2023 significantly improved to $3.0 million from a $9.6 million loss in Q2 2022, driven by a smaller net unrealized loss on available-for-sale securities | Metric | Q2 2023 ($ in thousands) | Q2 2022 ($ in thousands) | H1 2023 ($ in thousands) | H1 2022 ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net income | 7,138 | 8,562 | 14,255 | 16,820 | | Other comprehensive income (loss) | (4,124) | (18,147) | 2,927 | (46,722) | | **Total comprehensive income (loss)** | **3,014** | **(9,585)** | **17,182** | **(29,902)** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first half of 2023, net cash from operations decreased to $17.0 million, while investing activities provided $163.5 million, and financing activities used $110.9 million, resulting in a $69.5 million increase in cash and cash equivalents | Cash Flow Activity (Six Months Ended June 30) | 2023 ($ in thousands) | 2022 ($ in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | 16,973 | 31,062 | | Net cash provided by (used in) investing activities | 163,485 | (163,705) | | Net cash used in financing activities | (110,927) | (121,051) | | **Net increase (decrease) in cash and cash equivalents** | **69,531** | **(253,694)** | [Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity increased from $206.3 million at year-end 2022 to $215.1 million by June 30, 2023, driven by net income and positive other comprehensive income, partially offset by dividends and share repurchases - Balance at Dec 31, 2022: **$206,325 thousand**[91](index=91&type=chunk) - Key changes in H1 2023 include: Net income of **$14,255 thousand**, cash dividends of **($7,941) thousand**, share repurchases of **($2,377) thousand**, and other comprehensive gain of **$2,927 thousand**[26](index=26&type=chunk)[91](index=91&type=chunk) - Balance at June 30, 2023: **$215,146 thousand**[26](index=26&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information supporting the financial statements, covering operating segments, loan portfolio quality, stock-based compensation, investment securities fair value, and revenue recognition policies - The Company operates in two reportable segments: Information Services (invoice processing and payment) and Banking Services (commercial banking)[30](index=30&type=chunk)[57](index=57&type=chunk) - Total loans stood at **$1.06 billion** as of June 30, 2023, with the vast majority classified as 'Normal' credit grade and no loans past due[35](index=35&type=chunk)[36](index=36&type=chunk) - The company adopted ASU 2022-02, which eliminated the accounting for troubled debt restructurings and enhanced disclosures for loan modifications for borrowers in financial difficulty[37](index=37&type=chunk) - Stock-based compensation expense was **$2.9 million** for the first six months of 2023, down from **$3.2 million** in the same period of 2022[70](index=70&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's Q2 2023 performance, noting revenue growth driven by net interest income, but a 16.6% net income decline due to a 16.9% increase in operating expenses from technology investments and personnel costs, alongside impacts of banking industry volatility on deposits and the company's strong liquidity and capital position [Results of Operations](index=26&type=section&id=Results%20of%20Operations) In Q2 2023, net interest income grew 17.4% to $16.0 million and financial fees increased 9.8% to $11.7 million, but a 16.9% rise in operating expenses to $39.3 million, driven by personnel and technology costs, led to a 16.6% decrease in net income to $7.1 million | Metric (Q2 2023 vs Q2 2022) | 2023 ($ in thousands) | 2022 ($ in thousands) | % Change | | :--- | :--- | :--- | :--- | | Net interest income | 16,014 | 13,641 | 17.4% | | Total revenues | 48,207 | 44,222 | 9.0% | | Operating expense | 39,339 | 33,639 | 16.9% | | Net income | 7,138 | 8,562 | (16.6)% | | Diluted EPS | $0.52 | $0.62 | (16.1)% | - The increase in net interest income was primarily due to the rise in the Federal Funds rate, which expanded the net interest margin to **3.25%** from **2.54%** in the prior year[169](index=169&type=chunk) - Operating expenses increased due to merit increases, wage pressures, a **10.9%** increase in average full-time employees for technology initiatives, and higher costs for outside services during a technology platform transition[172](index=172&type=chunk)[196](index=196&type=chunk) [Financial Condition](index=34&type=section&id=Financial%20Condition) Total assets decreased by $102.2 million (4.0%) to $2.5 billion from year-end 2022, primarily due to reduced investment securities and loans, while total liabilities fell by $111.0 million (4.7%) due to lower deposits, and shareholders' equity grew by $8.8 million (4.3%) to $215.1 million - Total assets decreased by **4.0%** to **$2.5 billion** at June 30, 2023[174](index=174&type=chunk) - The investment securities portfolio decreased by **$117.0 million** (**15.5%**) due to sales and maturities[175](index=175&type=chunk) - Total deposits decreased by **$65.8 million** (**5.2%**) as larger clients moved funds to higher-interest alternatives[177](index=177&type=chunk) - Shareholders' equity increased by **4.3%** to **$215.1 million**, driven by earnings and a decrease in accumulated other comprehensive loss[203](index=203&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with cash and cash equivalents increasing to $270.5 million and access to substantial undrawn credit lines, while both the holding company and Cass Commercial Bank exceed all regulatory capital requirements, demonstrating robust capital ratios - Cash and cash equivalents totaled **$270.5 million** at June 30, 2023, representing **10.9%** of total assets[180](index=180&type=chunk) - The company has access to **$83.0 million** in unsecured federal funds lines and **$464.3 million** in secured lines of credit, with no outstanding balances as of June 30, 2023[181](index=181&type=chunk) | Capital Ratios (Cass Commercial Bank) | June 30, 2023 | Well-Capitalized Requirement | | :--- | :--- | :--- | | Total capital (to risk-weighted assets) | 17.06% | 10.00% | | Tier I capital (to risk-weighted assets) | 15.94% | 8.00% | | Common Equity Tier I Capital | 15.94% | 6.50% | | Tier I capital (to average assets) | 12.37% | 5.00% | [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is asset-sensitive, with simulations indicating that a 100 basis point increase in interest rates would boost projected net interest income by 7.4% over 12 months, and a 200 basis point increase by 12.7% - The company is asset sensitive, as average interest-earning assets of **$2.0 billion** greatly exceeded average interest-bearing liabilities of **$512.5 million** in Q2 2023[189](index=189&type=chunk) | Interest Rate Shock | % Change in Projected Net Interest Income (June 30, 2023) | | :--- | :--- | | +200 basis points | 12.7% | | +100 basis points | 7.4% | | -100 basis points | (3.3)% | | -200 basis points | (5.7)% | [Controls and Procedures](index=38&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting identified during Q2 2023 - Management concluded that disclosure controls and procedures were effective as of June 30, 2023[213](index=213&type=chunk) - No changes in internal control over financial reporting were identified in Q2 2023 that materially affected, or are reasonably likely to materially affect, the company's internal controls[190](index=190&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=39&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is subject to various ordinary course legal actions, which management believes will not materially affect its business or financial condition - Management does not expect pending legal actions to have a material effect on the company's businesses or financial conditions[214](index=214&type=chunk) [Risk Factors](index=39&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section outlines material risks, including liquidity concerns from potential deposit outflows due to eroded customer confidence, the negative impact of rising interest rates on the securities portfolio, and increased regulatory scrutiny and costs - A key risk is the potential inability to obtain needed liquidity to satisfy deposit withdrawal requests, which could be accelerated if uninsured depositors lose confidence[216](index=216&type=chunk)[233](index=233&type=chunk) - Recent bank failures have eroded customer confidence, potentially causing customers to move deposits to larger institutions or higher-yielding investments, which could adversely impact liquidity and results[217](index=217&type=chunk)[234](index=234&type=chunk) - Rising interest rates have caused significant unrealized losses in the available-for-sale securities portfolio. A forced sale to meet liquidity needs could result in realized losses, impairing capital[218](index=218&type=chunk)[235](index=235&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECU RITIES%20AND%20USE%20OF%20PROCEEDS) During Q2 2023, the company repurchased 63,305 shares of common stock at an average price of $37.55 per share under its treasury stock buyback program, with 277,402 shares remaining for repurchase | Period (2023) | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April | 13,678 | $37.10 | | May | 45,921 | $37.56 | | June | 3,706 | $39.13 | | **Total Q2** | **63,305** | **$37.55** | - As of June 30, 2023, a maximum of **277,402 shares** may yet be purchased under the authorized plan[220](index=220&type=chunk)[239](index=239&type=chunk) [Exhibits](index=41&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including the 2023 Omnibus Stock and Performance Compensation Plan, related award agreements, and CEO and CFO certifications - Filed exhibits include the 2023 Omnibus Stock and Performance Compensation Plan and various award agreements[222](index=222&type=chunk) - Certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included as exhibits[222](index=222&type=chunk)

____________________ x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 CASS INFORMATION SYSTEMS, INC. (Exact name of registrant as specified in its charter) Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the ...