Cass Information Systems, Inc. Annual Report 2013

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FY2013 Annual Report · Cass Information Systems, Inc.

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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

8
7

1
0

2
0

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

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

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

1
3

3
3

5
3

6
0
1

1
1
1

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

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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

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

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

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.

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.

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

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

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,

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

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

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

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

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

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