Cass Information Services Inc.
Annual Report 2013

Plain-text annual report

Control Execution Confidence Cass Delivers Value 2013 SUMMARY ANNUAL REPORT Cass Information Systems, Inc. (NASDAQ: CASS) is a leading provider of transportation, utility, environmental and telecom expense management and related business intelligence services, disbursing $35 billion annually on behalf of its clients. With total assets of $1.3 billion, Cass is a business-to-business solutions provider focused on invoice processing, auditing, payment and information services. Cass is uniquely supported by Cass Commercial Bank, founded in 1906. Today, Cass Commercial Bank is a wholly owned subsidiary, providing sophisticated financial exchange services to the parent organization and its clients. CASS INFORMATION SYSTEMS, INC. 108 YEARS IN BUSINESS $ 23.5 MILLION NET INCOME 2013 Year in Review Financial Highlights FOR THE YEAR ENDED DECEMBER 31, 2013 2012 Total Net Revenues Net Income Basic Earnings per Common Share Diluted Earnings per Common Share Dividends Paid per Common Share $ $ $ $ $ 114,817,000 $ 111,523,000 23,497,000 $ 23,303,000 2.05 $ 2.02 $ 0.74 $ 2.05 2.02 0.64 Total Number of Transactions Processed 51,397,000 47,067,000 Total Dollar Volume Paid $ 35,089,708,000 $ 33,162,412,000 Return on Average Total Shareholders’ Equity Return on Average Assets 13.39 % 1.74 % 13.88 % 1.73 % $ 114.8 MILLION TOTAL NET REVENUE AS OF DECEMBER 31, Total Assets Total Shareholders’ Equity Book Value per Common Share 2013 2012 $ 1,326,020,000 $ 1,287,387,000 $ $ 190,427,000 $ 174,015,000 16.53 $ 15.18 Diluted Earnings per Common Share (IN DOLLARS) Net Income (IN MILLIONS OF DOLLARS) Book Value per Share (IN DOLLARS) 3 4 . 1 8 7 . 1 1 0 . 2 2 0 . 2 2 0 . 2 3 1 . 6 1 1 3 . 0 2 1 0 . 3 2 0 3 . 3 2 0 5 . 3 2 1 4 . 1 1 1 5 . 2 1 9 0 . 4 1 8 1 . 5 1 3 5 . 6 1 ‘09 ‘10 ‘11 ‘12 ‘13 ‘09 ‘10 ‘11 ‘12 ‘13 ‘09 ‘10 ‘11 ‘12 ‘13 1 CASS INFORMATION SYSTEMS, INC. Dear Fellow Shareholders, For Cass, 2013 was a year of achievement as well as a year of larger challenge. We marked key milestones – $35 billion in payments – a new record, invested significantly in our systems and facilities, and continued our expansion into new markets. Transactions processed increased 9% to 51.4 million, revenues rose 3% to $114,800,000, and payment and processing fee income grew 6% to $70,805,000, all which were records as well. I note these accomplishments in the context of what seems to have become an unrelenting challenge: sustaining earnings growth amid historically low interest rates. Our results in 2013 were once again affected by the protracted impact of five consecutive years of low interest rates. Downward pressure is placed on our returns as higher-yielding, longer-term investments continue to amortize, mature, re-price or are sold and we reinvest at today’s lower yields. “The strength of our business model is reflected in both our longevity and our consistent financial performance.” Eric H. Brunngraber President and Chief Executive Officer This is the day the Lord has made; Let us rejoice and be glad in it. Psalm 118:24 Cass Leadership LEFT TO RIGHT: P. Stephen Appelbaum Executive Vice President and Chief Financial Officer Robert J. Mathias President and Chief Operating Officer, Cass Commercial Bank John F. Pickering President, Transportation Information Services Karen L. Lowry Vice President, Human Resources Harry M. Murray Executive Vice President, Corporate Development Gary B. Langfitt President, Expense Management Services Eric H. Brunngraber President and Chief Executive Officer 2 Cass Delivers Value: The Cass Portfolio of Solutions Cass Solutions ENVIRONMENTAL Waste Expense Management Cass drives durable expense reduction and improves sustainability practices for clients by leveraging its waste expertise, powerful WasteVision™ technology platform and aggregate buying power. TELECOM Communications Lifecycle Management We manage our clients’ telecom investments – from source to pay – for both mobile and fixed telecom assets and services. Cass offers “bring your own device” program management for employee-owned equipment. BANKING Commercial Banking A Federal Reserve member bank, Cass Commercial Bank provides safety, security and control in moving funds through the Cass electronic payment network. FREIGHT/PARCEL Freight Audit & Payment Cass offers invoice management for freight and parcel bills, supplier payment management and general ledger account reconciliation, providing full visibility via CassPort®, the industry’s leading Web-based intelligence engine. UTILITIES Utility Bill Payment We process and pay invoices for electricity, gas, water and other facility- related expenses. Through advanced invoice processing methods, we capture large amounts of data and develop an energy data warehouse for each Expense$mart® client. Total Transactions (IN MILLIONS) Total Dollar Volume Paid (IN BILLIONS OF DOLLARS) Total Net Revenues (IN MILLIONS OF DOLLARS) Comparison of 3-Year Cumulative Total Return Assumes Initial Investment of $100 DECEMBER 2013 CASS INFORMATION SYSTEMS INC. NASDAQ STOCK MARKET (US COMPANIES) NASDAQ COMPUTER AND DATA PROCESSING INDEX 0 4 . 5 4 7 0 . 7 4 0 4 . 1 5 9 . 1 3 2 . 3 3 1 . 5 3 5 . 6 0 1 5 . 1 1 1 8 . 4 1 1 $250 $200 $150 $100 $225.59 $165.67 $159.00 ‘11 ‘12 ‘13 ‘11 ‘12 ‘13 ‘11 ‘12 ‘13 ‘10 ‘11 ‘12 ‘13 3 CASS INFORMATION SYSTEMS, INC. Our Corporate Structure Provides a Sound Framework for Secure Financial Exchange Bank-secure Financial Controls – An Imperative for Outsourced Supplier Payment Cass Information Systems’ corporate structure provides important financial security for its clients. Cass is the only publicly held, financial holding company whose core business is outsourced payables. Unique to Cass is a high level of transparency and operating oversight by third parties. by the Federal Reserve Bank. Because Cass is a public company, its records are transparent and readily available for review. Additionally, the soundness of Cass’ operating controls is evident from the results of its Sarbanes-Oxley review and its Soc 1 Type 2 (SSAE 16 Type 2) examination. The Company and its bank subsidiary are extensively regulated under federal and state law. The Bank is subject to regulation and supervision by the Missouri Division of Finance and the Federal Deposit Insurance Corporation. Both the Company and subsidiary are subject to regulation, supervision and examination Doing business with a company that lacks such controls can place a company’s funds at significant risk. Most other providers of outsourced payable solutions – including freight audit and payment – are privately held, non-bank businesses and are not subject to the same financial scrutiny, capital So today the challenge is greater; it takes even larger gains in shareholders’ equity of 13.39%. These results are very other areas of our business to offset these decreasing yields. impressive in the context of the strong liquidity and Despite this headwind, and with the accelerated expense of capital positions we maintain. For example, our year-end continued investment in our business lines, we were able to Tier 1 capital-to-assets ratio of 13.12% is more than record a modest increase in net income to $23,500,000 – double the amount regulators use to define institutions also a record. as “well capitalized.” Although growth is a challenge in this environment, we are This strong foundation, combined with the significant pleased that our profit margins remained strong with a generation of cash from our operations, not only provides return on average assets of 1.74% and return on average us the ability to take advantage of strategic investment 4 CASS HAS PROVIDED FREIGHT PAYMENT SERVICES FOR NEARLY 60 YEARS. requirements, investment oversight, examinations or audits as Cass. Such distinctions became topical in 2013 when two small, privately held freight payment companies closed after alleged mishandling of customer funds. Events such as these underscore the need for companies to closely examine the financial strength and controls of their supplier of payment services and recognize the risks in placing their funds in the hands of non-regulated companies. When evaluating providers, organizations should ensure that a verifiable audit trail exists for payments issued to their suppliers. Unlike many other outsourced payment providers that still issue paper checks to suppliers, Cass remits 93% of payments electronically. This electronic process is highly transparent in that it provides an almost immediate record of funds receipt. Comparatively, with the process of mailing of paper checks, the exact timing of payment cannot be readily verified. Cass has provided freight payment services for nearly 60 years and our history of strong financial results, prudent asset management and transparency of performance is a well-documented success. opportunities as they arise, but also allows the board of directors to increase dividends. For the twelfth consecutive THE BUSINESS OF CASS For those who are unfamiliar with Cass and our business, year, Cass increased the dividend rate, this year raising we perform back-office transaction processing for some the quarterly payment 11% to $.20 per share. of the world’s largest corporations, including DuPont, Ford Motor Company, Macy’s, Nationwide Insurance, Unilever While the weak economic environment has seemingly become and many others. We manage our clients’ complex payables permanent, we know, however, that economic cycles ebb and for transportation, utilities, telecommunications, waste flow. Our organization continues to build on its strengths so and recycling. These spend categories require specialized that we can continue to grow and also position ourselves for expense management tools and processes to keep costs accelerated growth when market conditions eventually improve. under control. We process invoices, apply advanced business 5 CASS INFORMATION SYSTEMS, INC. Strong Controls Produce Savings on Environmental Services Protecting Clients Through Strong Technology-driven Controls Tight audit controls are a true differentiator for Cass, and the area of waste disposal expense is no exception. Cass negotiates waste hauling and recycling services contracts on behalf of its clients, thereby allowing them to leverage Cass’ volume buying power and knowledge of market rates. The process doesn’t end, however, when Cass secures best-in-market rates for its customer. Cass further controls the process by auditing every invoice before payment to ensure its accuracy, recognizing that a strongly negotiated contract is meaningless if the invoice doesn’t reflect the agreed-upon rate structure. Over the past five years, about 12% of all waste services invoices processed by the Cass waste group have contained inaccuracies – including unauthorized price increases and ancillary charges such as administrative, container maintenance or environmental fees. The majority of these charges are recurrent, resulting in a cumulative effect in overcharges if not detected. An inaccurate charge – in the Cass view – is a charge on an invoice that was not previously agreed upon or referenced in 51.4 MILLION logic, make supplier payments and ultimately settle millions of transactions, most often by systematically updating our clients’ internal accounting software and other enterprise management systems. With the information derived from the aggregation of data we obtain from this process, and the application of our powerful analytic tools, we become strategic partners with our clients. Cass also provides specialized commercial financial solutions, which assist our clients by providing working capital, funding supply chains and financing their intermediate and long-term investments. TRANSACTIONS PROCESSED 6 IT TAKES A PRECISE INVOICE AUDITING SYSTEM TO IDENTIFY THE MANY SUBTLE INACCURACIES ON WASTE INVOICES THAT RESULT IN ASTONISHING INVOICE ERROR RATES. the service contract. While a contract, in theory, should protect customers, in reality, it takes a precise invoice auditing system to identify the many subtle inaccuracies on waste invoices that result in astonishing invoice error rates. and Cass recovers credits for incorrect charges. In the end, the customer saves – and Cass furnishes complete documentation that includes actual dollars spent and dollars saved through the audit. Cass clients are protected by strong technology-driven controls that deliver a precise audit of each invoice. Using our WasteVision™ technology, Cass abstracts information from contracts and service orders to pre-calculate expected costs. The expected amount is then compared with the actual invoice through the Cass audit process. Discrepancies are analyzed, The environmental services industry comprises many large corporations as well as smaller service providers. Rates and pricing structures are highly variable; little industry standardization exists. But companies that utilize Cass are able to put strong process controls in place to ensure that our clients’ contracts with their suppliers are well enforced. While our business continually expands and evolves, it is based on a solid and constant foundation characterized INVESTING FOR FUTURE GROWTH As we work with our clients and prospects to address their by the themes of control, execution and confidence. changing business requirements, we continue to make ■ Control: We control processes – through automation, facilities and staff. This provides us with the capacity and audits and management intensity. expertise to improve operating effectiveness, ensure our investments in new systems and technologies, operating ability to deliver on customer expectations and increase ■ Execution: We execute transactions – 50+ million this year. shareholder value. ■ Confidence: We instill confidence – so much so that our Overseas expansion is a natural progression as our global clients entrusted us to manage $35 billion of their spend customers desire to extend the functionality we provide in in 2013. 7 CASS INFORMATION SYSTEMS, INC. Tight Management Controls Support the Expansion of Enterprise Mobility Sophisticated BYOD Solutions for Managing Cost and Reducing Risk Managing expenses for fixed and mobile telecommunications is an ongoing challenge for large employers. As more employees seek to use their own mobile devices – including smartphones, notebooks and laptops – for work, employers worry that the influx of these devices will send their IT costs spiraling out of control as a result of increased expenses for software and services to secure their networks. Organizations must protect themselves against the loss of sensitive data and even valued intellectual capital as a result of rogue or malicious network access. The Cass solution for communications lifecycle management is a technology-assisted service that addresses these challenges by providing a system of effective management controls. Employers need a sophisticated solution to manage the costs and risks of today’s communications. They must create a mobility policy as a first step in establishing corporate governance. Next, the company must develop a means of effectively executing the policy and auditing compliance, no matter who owns the device. To address security concerns, North America to other parts of the world. Our Transportation systems that allow for the payment and granular reporting of Information Services group is working with many clients such far-reaching payables as elevator repair, alarm service, that, for years, have used Cass to process payments for equipment leasing, and floor cleaning. Hundreds of discreet imports and exports to and from North America as well as payable types are now being supported, and expenses intra-continental shipments. Now our clients are putting even driven by purchase orders will be added in the future. greater emphasis on using the Cass solution for shipments outside North America. With the acquisition of Waste Reduction Consultants in 2012, Cass entered the waste expense management Cass continues to build on its leading position in providing and sustainability market in a big way. We are investing solutions for controlling facility-related expenses. Once in both staff and systems to provide the expertise for our primarily a utility expense offering, Cass has invested in clients to achieve their sustainability and cost-saving goals. 8 software is often deployed that allows the employer to cost- effectively administer network access and take actions to protect data if the device falls into the hands of unauthorized users. The business needs automation to support and control tasks such as device and service provisioning. And finally, an additional level of control must be maintained in the face of change: Companies must have a system to address new hires as well as terminated employees. The Cass solution provides all of these controls. For organizations that desire consultation, Cass assists in policy development and shares best practices. We support policy implementation by providing a self-service portal where employees can view and agree to the policy and even be trained online. This mechanism provides the employer with an audit trail for compliance purposes. To address security concerns, clients typically rely upon mobile device management software. The Cass mobility solution integrates with this software so that both systems communicate with each other. As new employees enroll in the company’s Bring Your Own Device (BYOD) program, the Cass solution updates the security system so that every device can be securely managed using passwords and encryption. This also allows the employer to take action if the device is lost or stolen. The Cass solution also integrates with the company’s human resource system, so that changes in the employee roster are well managed. This is a significant cost control measure, in that, when systems aren’t adequately aligned, corporations often continue to incur costs for terminated employees. With one end-to-end solution, Cass addresses the multiple challenges large companies face in managing communications. Our clients can extend mobility knowing they are maintaining the needed controls. Governmental action and corporate initiatives on recycling employer managing BYOD stipend payments through payroll, and e-waste disposal will be solid business drivers in the Cass manages the payment process more directly and coming years. Integration initiatives within our organization efficiently. Employees’ expense reimbursements now appear are expected to deliver even higher margins, and payment as credits on their monthly wireless invoice. This innovative is now a core offering. approach to compensating employees also eliminates the burden and cost of expense reporting. In addition to fixed telecommunications expenses, our clients are also relying on Cass to help them control the increasing Cass is also investing in and expanding its financial solutions cost of mobility. Cass delivers turnkey programs for “Bring to provide more innovative options for our clients. For years, Your Own Device” (BYOD) management, where employees use Cass has offered low-cost financing to logistics suppliers, their own mobile devices to perform their jobs. Instead of the allowing carriers to be paid faster than the scheduled terms 9 CASS INFORMATION SYSTEMS, INC. Cass Supplier Network Continues to Expand Overseas Paying Utilities Expenses Incurred in the United Kingdom Cass manages $35 billion in payments to its network of nearly 40,000 suppliers, including those for electricity, gas, water and other utilities. Organizations that outsource utility bill payment to Cass have exceptional visibility to detailed information about their utility costs. This information is invaluable as they procure energy and renegotiate contracts with their suppliers. clients expand their payment programs to include overseas locations. For example, one Cass client, a large, U.S.-based retailer, recently tapped Cass to expand its utility payment program to the United Kingdom so that it could gain a true understanding of its global costs while tightening financial controls. The network of suppliers paid by Cass continues to expand, particularly as Cass grows its customer base and as U.S.-based U.S.-based organizations doing business in European Union countries have an opportunity to recover monies paid in Value of their contract with the shipper. We are expanding this model to increase the options available for both companies – the shippers and the logistics suppliers. In another example, Cass Commercial Bank, as agent, led a $54.6 million syndicate of banks to provide financing for a Christian broadcasting network throughout the United States. TAKING THE LONG-TERM VIEW Control. Execution. Confidence. These themes have been central to our business since 1906, the year Cass Avenue IN PAYMENTS Bank was founded. For over a century, through countless economic cycles, unceasing technological advancements and $35 BILLION 10 CASS MANAGES PAYMENTS TO ITS NETWORK OF NEARLY 40,000 SUPPLIERS. Added Tax (VAT). While the VAT appears on invoices and is initially paid, the U.S. company can later file for VAT recovery. This process, however, requires strong documentation and adherence to strict deadlines. Without the enforcement of bill payment controls, the data isn’t available, and VAT recovery is unlikely. The Cass service, however, furnishes the necessary documentation for successful VAT recovery. Once again, clients trust in Cass to deliver accurate data through an efficient process. Cass was awarded a 2013 Supplier Sustainability Award from AT&T for its contributions to the company’s energy efficiency programs. changing customer requirements, Cass Bank has grown to become today’s Cass Information Systems. ACKNOWLEDGMENTS We wish to thank our shareholders – both old and new – for their continued loyalty and support. We work diligently so that As we look to the future, we resolve to accelerate the execution your investment in Cass Information Systems will continue to of our corporate strategy, which continues to drive value to reward you financially over the long term. We deeply appreciate our clients and shareholders. This strategy rewards us for our the trust bestowed upon us by our customers and the talents cultural values of accountability and control. In addition to and dedication of our employees. We also acknowledge growth from global expansion, new business solutions and new the contribution of our board of directors for its counsel, relationships, we remain poised for growth through acquisition. commitment and support of our values and culture. We are optimistic as we assess the many possibilities where we can prosper by leveraging our proficiencies and capitalizing Sadly in 2013, we note the passing of two individuals who on our strong liquidity and financial positions. left a significant mark on our organization. Andrew Signorelli, 11 CASS INFORMATION SYSTEMS, INC. Cass Commercial Bank, the Root of our Strong Operations Cass: A Strong Culture of Exacting Standards Cass Commercial Bank, a subsidiary of Cass Information Systems, provides safety and control for its clients. The Bank’s primary focus is to support the Company’s payment operations and provide banking services to its target markets. Operating as a member bank of the Federal Reserve, Cass Commercial Bank is held to high standards for asset quality, liquidity, capital and operating controls - requirements that deliver significant benefits to both of these groups. For more than 100 years, Cass Commercial Bank has served privately held businesses throughout the St. Louis area. Today’s portfolio of clients is more geographically dispersed, reflecting our focus on two market niches with a national scope: faith- based organizations and fast-casual restaurant franchises. In addition to serving its commercial banking clients, the bank provides the investment management expertise and the financial exchange infrastructure that support Cass’ supplier payment operations – the movement of $35 billion to 40,000 suppliers in 2013. All supplier payments made on behalf of our clients are processed through Cass Bank’s operations center. This built-in funds transfer system tightens the movement and security of supplier payments while producing a reliable audit trail for each. Cass delivers payment and remittance data electronically, which increases the safety and soundness of the financial exchange process. In summary, Cass operates with a strong culture of exacting standards for control, which continue to serve our customers and shareholders. a board member since 1986, leaves us with a lasting imprint authority inspires us to serve creatively, industriously of the many, many contributions he made to Cass over the and ethically. As we begin the work of 2014, we look years. He was generous with his time, talent and insight. forward to the challenges and opportunities He provides. Jake Nania, a former board member, shareholder and strong supporter of Cass, will be missed by all of us who had the good fortune to know him over the years. Jake served on our board from 1967 to 2005 and was a strong contributor Eric H. Brunngraber to our success. President and Chief Executive Officer Cass Information Systems, Inc. Finally, we recognize and express our ultimate gratitude to God for His guidance and blessings. Our confidence in His 12 Cass operates with a strong culture of exacting standards for control, which continue to serve our customers and shareholders. CASS INFORMATION SYSTEMS, INC. Condensed Consolidated Statements of Income (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE INFORMATION) FOR THE YEAR ENDED DECEMBER 31, 2013 2012 2011 REVENUES Payment and Processing $ 70,805 Net Investment Income Gains on Sales of Securities Other 38,245 4,024 1,743 $ 66,695 40,385 2,635 1,808 $ 60,688 43,711 43 2,093 Total Net Revenues $ 114,817 $ 111,523 $ 106,535 EXPENSES Salaries and Employee Benefits 65,722 Occupancy Equipment Other Total Expenses 2,874 3,810 11,680 $ 84,086 Income Before Income Tax Expense 30,731 Income Tax Expense Net Income EARNINGS PER SHARE Basic Diluted 7,234 $ 23,497 $ 2.05 2.02 62,563 2,157 3,516 12,097 $ 80,333 31,190 7,887 $ 23,303 $ 2.05 2.02 56,573 2,318 3,525 12,613 $ 75,029 31,506 8,497 $ 23,009 $ 2.03 2.01 WEIGHTED AVERAGE SHARES OUTSTANDING Basic Diluted 11,441,158 11,640,739 11,378,216 11,557,214 11,326,968 11,475,620 14 Condensed Consolidated Balance Sheets (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE INFORMATION) AS OF DECEMBER 31, 2013 2012 ASSETS Cash and Cash Equivalents Loans and Investments, Net Premises and Equipment, Net Other Assets Total Assets LIABILITIES Deposits Accounts and Drafts Payable Other Liabilities Total Liabilities $ 225,262 958,265 13,231 129,262 $ 141,088 1,017,311 10,735 118,253 $ 1,326,020 $ 1,287,387 $ 582,496 $ 563,708 543,953 9,144 522,761 26,903 $ 1,135,593 $ 1,113,372 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; 11,931,147 shares issued at December 31, 2013 and 2012 Additional Paid-in Capital Retained Earnings Common Shares in Treasury, at cost (409,667 and 467,316 shares at December 31, 2013 and 2012, respectively) Accumulated Other Comprehensive Loss Total Shareholders’ Equity — — 5,966 125,062 75,939 (10,980) (5,560) 190,427 5,966 125,086 60,952 (11,896) (6,093) 174,015 Total Liabilities and Shareholders’ Equity $ 1,326,020 $ 1,287,387 15 CASS INFORMATION SYSTEMS, INC. Forward-Looking Statements FACTORS THAT MAY AFFECT FUTURE RESULTS This report may contain or incorporate by reference forward-looking statements made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although we believe that, in making any such statements, our expectations are based on reasonable assumptions, forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors beyond our control, which may cause future performance to be materially different from expected performance summarized in the forward-looking statements. These risks, uncertainties and other factors are discussed in Part I, Item 1A, “Risk Factors” section of the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, or changes to future results over time. Report of Independent Registered Public Accounting Firm THE BOARD OF DIRECTORS AND SHAREHOLDERS OF CASS INFORMATION SYSTEMS, INC. We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Cass Information Systems, Inc. and subsidiaries (the Company) as of December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, cash flows and shareholders’ equity for each of the years in the three-year period ended December 31, 2013 (not presented herein); and in our report dated March 11, 2014, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated financial statements is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived. Saint Louis, Missouri March 11, 2014 16 Shareholder Information Corporate Headquarters Investor Relations Transfer Agent Cass Information Systems, Inc. 12444 Powerscourt Drive, Suite 550 Saint Louis, Missouri 63131 314-506-5500 cass@cassinfo.com www.cassinfo.com Common Stock The company’s common stock trades on the NASDAQ stock market under the symbol CASS. Annual Meeting The annual meeting of shareholders will be held Monday, April 21, 2014 at 11 a.m. at the Charles F. Knight Executive Education and Conference Center, Olin Business School at Washington University, Saint Louis, Missouri. Security analysts, investment managers and others seeking financial information about the Company should contact: Investor Relations Department Cass Information Systems, Inc. 12444 Powerscourt Drive, Suite 550 Saint Louis, Missouri 63131 314-506-5500 10-K and Other Publications A copy of the company’s Form 10-K, as filed with the Securities and Exchange Commission, will be furnished without charge upon written request to the address above or from the Company’s website at: www.cassinfo.com Independent Auditors KPMG LLP 10 South Broadway, Suite 900 Saint Louis, Missouri 63102 Shareholder correspondence should be mailed to: Computershare P.O. Box 30170 College Station, Texas 77842-3170 Overnight correspondence should be mailed to: Computershare 211 Quality Circle, Suite 210 College Station, Texas 77845 Shareholder website: www.computershare.com/investor Shareholder online inquiries: https://www-us.computershare.com/ investor/Contact Toll-Free Phone: 866-323-8170 Board of Directors Lawrence A. Collett Chairman of the Board K. Dane Brooksher Retired Chairman and Chief Executive Officer, ProLogis Eric H. Brunngraber President and Chief Executive Officer Bryan S. Chapell President Emeritus, Covenant Theological Seminary Executive Officers Eric H. Brunngraber President and Chief Executive Officer P. Stephen Appelbaum Executive Vice President and Chief Financial Officer Robert A. Ebel Chief Executive Officer, Universal Printing Company Benjamin F. (Tad) Edwards, IV Chairman, Chief Executive Officer and President, Benjamin F. Edwards & Company John L. Gillis, Jr. Retired, Armstrong Teasdale LLP Wayne J. Grace Retired Managing Director, UHY Advisors MO, Inc. James J. Lindemann Executive Vice President, Emerson Randall L. Schilling President and Chief Executive Officer, Candlestiq Franklin D. Wicks, Jr., Ph. D. Executive Vice President and President, Applied Markets, Sigma-Aldrich Harry M. Murray Executive Vice President, Corporate Development John F. Pickering President, Transportation Information Services Gary B. Langfitt President, Expense Management Services Robert J. Mathias President and Chief Operating Officer, Cass Commercial Bank 17 

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