10-Q 1 cass-20230930.htm 10-Q cass-20230930
0000708781false12-312023Q3http://fasb.org/us-gaap/2023#OtherLiabilitieshttp://fasb.org/us-gaap/2023#OtherAssets00007087812023-01-012023-09-3000007087812023-10-27xbrli:shares00007087812023-09-30iso4217:USD00007087812022-12-31iso4217:USDxbrli:shares0000708781cass:ProcessingFeesMember2023-07-012023-09-300000708781cass:ProcessingFeesMember2022-07-012022-09-300000708781cass:ProcessingFeesMember2023-01-012023-09-300000708781cass:ProcessingFeesMember2022-01-012022-09-300000708781cass:FinancialFeesMember2023-07-012023-09-300000708781cass:FinancialFeesMember2022-07-012022-09-300000708781cass:FinancialFeesMember2023-01-012023-09-300000708781cass:FinancialFeesMember2022-01-012022-09-3000007087812023-07-012023-09-3000007087812022-07-012022-09-3000007087812022-01-012022-09-3000007087812021-12-3100007087812022-09-300000708781us-gaap:CommonStockMember2022-06-300000708781us-gaap:AdditionalPaidInCapitalMember2022-06-300000708781us-gaap:RetainedEarningsMember2022-06-300000708781us-gaap:TreasuryStockCommonMember2022-06-300000708781us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-3000007087812022-06-300000708781us-gaap:RetainedEarningsMember2022-07-012022-09-300000708781us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300000708781us-gaap:TreasuryStockCommonMember2022-07-012022-09-300000708781us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300000708781us-gaap:CommonStockMember2022-09-300000708781us-gaap:AdditionalPaidInCapitalMember2022-09-300000708781us-gaap:RetainedEarningsMember2022-09-300000708781us-gaap:TreasuryStockCommonMember2022-09-300000708781us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300000708781us-gaap:CommonStockMember2023-06-300000708781us-gaap:AdditionalPaidInCapitalMember2023-06-300000708781us-gaap:RetainedEarningsMember2023-06-300000708781us-gaap:TreasuryStockCommonMember2023-06-300000708781us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-3000007087812023-06-300000708781us-gaap:RetainedEarningsMember2023-07-012023-09-300000708781us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300000708781us-gaap:TreasuryStockCommonMember2023-07-012023-09-300000708781us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000708781us-gaap:CommonStockMember2023-09-300000708781us-gaap:AdditionalPaidInCapitalMember2023-09-300000708781us-gaap:RetainedEarningsMember2023-09-300000708781us-gaap:TreasuryStockCommonMember2023-09-300000708781us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300000708781us-gaap:CommonStockMember2021-12-310000708781us-gaap:AdditionalPaidInCapitalMember2021-12-310000708781us-gaap:RetainedEarningsMember2021-12-310000708781us-gaap:TreasuryStockCommonMember2021-12-310000708781us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000708781us-gaap:RetainedEarningsMember2022-01-012022-09-300000708781us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300000708781us-gaap:TreasuryStockCommonMember2022-01-012022-09-300000708781us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300000708781us-gaap:CommonStockMember2022-12-310000708781us-gaap:AdditionalPaidInCapitalMember2022-12-310000708781us-gaap:RetainedEarningsMember2022-12-310000708781us-gaap:TreasuryStockCommonMember2022-12-310000708781us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310000708781us-gaap:RetainedEarningsMember2023-01-012023-09-300000708781us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-300000708781us-gaap:TreasuryStockCommonMember2023-01-012023-09-300000708781us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000708781us-gaap:CustomerListsMember2023-09-300000708781us-gaap:CustomerListsMember2022-12-310000708781us-gaap:PatentsMember2023-09-300000708781us-gaap:PatentsMember2022-12-310000708781us-gaap:ComputerSoftwareIntangibleAssetMember2023-09-300000708781us-gaap:ComputerSoftwareIntangibleAssetMember2022-12-310000708781us-gaap:TradeNamesMember2023-09-300000708781us-gaap:TradeNamesMember2022-12-310000708781us-gaap:OtherIntangibleAssetsMember2023-09-300000708781us-gaap:OtherIntangibleAssetsMember2022-12-310000708781srt:MinimumMemberus-gaap:CustomerListsMember2023-09-300000708781srt:MaximumMemberus-gaap:CustomerListsMember2023-09-300000708781us-gaap:ComputerSoftwareIntangibleAssetMembersrt:MinimumMember2023-09-300000708781us-gaap:ComputerSoftwareIntangibleAssetMembersrt:MaximumMember2023-09-300000708781us-gaap:TradeNamesMembersrt:MinimumMember2023-09-300000708781us-gaap:TradeNamesMembersrt:MaximumMember2023-09-3000007087812021-10-31cass:segment0000708781cass:InformationServicesMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000708781cass:BankingServicesMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000708781cass:CorporateReconcilingItemsAndEliminationsMember2023-07-012023-09-300000708781cass:InformationServicesMemberus-gaap:OperatingSegmentsMember2023-09-300000708781cass:BankingServicesMemberus-gaap:OperatingSegmentsMember2023-09-300000708781cass:CorporateReconcilingItemsAndEliminationsMember2023-09-300000708781cass:InformationServicesMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000708781cass:BankingServicesMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000708781cass:CorporateReconcilingItemsAndEliminationsMember2022-07-012022-09-300000708781cass:InformationServicesMemberus-gaap:OperatingSegmentsMember2022-09-300000708781cass:BankingServicesMemberus-gaap:OperatingSegmentsMember2022-09-300000708781cass:CorporateReconcilingItemsAndEliminationsMember2022-09-300000708781cass:InformationServicesMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000708781cass:BankingServicesMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000708781cass:CorporateReconcilingItemsAndEliminationsMember2023-01-012023-09-300000708781cass:InformationServicesMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000708781cass:BankingServicesMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000708781cass:CorporateReconcilingItemsAndEliminationsMember2022-01-012022-09-300000708781cass:CommercialAndIndustrialLoanMember2023-09-300000708781cass:CommercialAndIndustrialLoanMember2022-12-310000708781us-gaap:CommercialRealEstateMemberus-gaap:MortgagesMember2023-09-300000708781us-gaap:CommercialRealEstateMemberus-gaap:MortgagesMember2022-12-310000708781us-gaap:CommercialRealEstateMemberus-gaap:ConstructionMember2023-09-300000708781us-gaap:CommercialRealEstateMemberus-gaap:ConstructionMember2022-12-310000708781cass:FaithBasedRealEstateMemberus-gaap:MortgagesMember2023-09-300000708781cass:FaithBasedRealEstateMemberus-gaap:MortgagesMember2022-12-310000708781cass:FaithBasedRealEstateMemberus-gaap:ConstructionMember2023-09-300000708781cass:FaithBasedRealEstateMemberus-gaap:ConstructionMember2022-12-310000708781cass:OtherLoanMember2023-09-300000708781cass:OtherLoanMember2022-12-310000708781cass:CommercialAndIndustrialLoanMemberus-gaap:FinancialAssetNotPastDueMember2023-09-300000708781us-gaap:FinancingReceivables30To59DaysPastDueMembercass:CommercialAndIndustrialLoanMember2023-09-300000708781us-gaap:FinancingReceivables60To89DaysPastDueMembercass:CommercialAndIndustrialLoanMember2023-09-300000708781us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembercass:CommercialAndIndustrialLoanMember2023-09-300000708781us-gaap:CommercialRealEstateMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:MortgagesMember2023-09-300000708781us-gaap:CommercialRealEstateMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:MortgagesMember2023-09-300000708781us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialRealEstateMemberus-gaap:MortgagesMember2023-09-300000708781us-gaap:CommercialRealEstateMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:MortgagesMember2023-09-300000708781us-gaap:CommercialRealEstateMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:ConstructionMember2023-09-300000708781us-gaap:CommercialRealEstateMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:ConstructionMember2023-09-300000708781us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialRealEstateMemberus-gaap:ConstructionMember2023-09-300000708781us-gaap:CommercialRealEstateMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:ConstructionMember2023-09-300000708781cass:FaithBasedRealEstateMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:MortgagesMember2023-09-300000708781us-gaap:FinancingReceivables30To59DaysPastDueMembercass:FaithBasedRealEstateMemberus-gaap:MortgagesMember2023-09-300000708781us-gaap:FinancingReceivables60To89DaysPastDueMembercass:FaithBasedRealEstateMemberus-gaap:MortgagesMember2023-09-300000708781cass:FaithBasedRealEstateMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:MortgagesMember2023-09-300000708781cass:FaithBasedRealEstateMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:ConstructionMember2023-09-300000708781us-gaap:FinancingReceivables30To59DaysPastDueMembercass:FaithBasedRealEstateMemberus-gaap:ConstructionMember2023-09-300000708781us-gaap:FinancingReceivables60To89DaysPastDueMembercass:FaithBasedRealEstateMemberus-gaap:ConstructionMember2023-09-300000708781cass:FaithBasedRealEstateMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:ConstructionMember2023-09-300000708781cass:OtherLoanMemberus-gaap:FinancialAssetNotPastDueMember2023-09-300000708781us-gaap:FinancingReceivables30To59DaysPastDueMembercass:OtherLoanMember2023-09-300000708781us-gaap:FinancingReceivables60To89DaysPastDueMembercass:OtherLoanMember2023-09-300000708781cass:OtherLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-09-300000708781us-gaap:FinancialAssetNotPastDueMember2023-09-300000708781us-gaap:FinancingReceivables30To59DaysPastDueMember2023-09-300000708781us-gaap:FinancingReceivables60To89DaysPastDueMember2023-09-300000708781us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-09-300000708781cass:CommercialAndIndustrialLoanMemberus-gaap:FinancialAssetNotPastDueMember2022-12-310000708781us-gaap:FinancingReceivables30To59DaysPastDueMembercass:CommercialAndIndustrialLoanMember2022-12-310000708781us-gaap:FinancingReceivables60To89DaysPastDueMembercass:CommercialAndIndustrialLoanMember2022-12-310000708781us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembercass:CommercialAndIndustrialLoanMember2022-12-310000708781us-gaap:CommercialRealEstateMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:MortgagesMember2022-12-310000708781us-gaap:CommercialRealEstateMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:MortgagesMember2022-12-310000708781us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialRealEstateMemberus-gaap:MortgagesMember2022-12-310000708781us-gaap:CommercialRealEstateMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:MortgagesMember2022-12-310000708781us-gaap:CommercialRealEstateMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:ConstructionMember2022-12-310000708781us-gaap:CommercialRealEstateMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:ConstructionMember2022-12-310000708781us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialRealEstateMemberus-gaap:ConstructionMember2022-12-310000708781us-gaap:CommercialRealEstateMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:ConstructionMember2022-12-310000708781cass:FaithBasedRealEstateMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:MortgagesMember2022-12-310000708781us-gaap:FinancingReceivables30To59DaysPastDueMembercass:FaithBasedRealEstateMemberus-gaap:MortgagesMember2022-12-310000708781us-gaap:FinancingReceivables60To89DaysPastDueMembercass:FaithBasedRealEstateMemberus-gaap:MortgagesMember2022-12-310000708781cass:FaithBasedRealEstateMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:MortgagesMember2022-12-310000708781cass:FaithBasedRealEstateMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:ConstructionMember2022-12-310000708781us-gaap:FinancingReceivables30To59DaysPastDueMembercass:FaithBasedRealEstateMemberus-gaap:ConstructionMember2022-12-310000708781us-gaap:FinancingReceivables60To89DaysPastDueMembercass:FaithBasedRealEstateMemberus-gaap:ConstructionMember2022-12-310000708781cass:FaithBasedRealEstateMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:ConstructionMember2022-12-310000708781cass:OtherLoanMemberus-gaap:FinancialAssetNotPastDueMember2022-12-310000708781us-gaap:FinancingReceivables30To59DaysPastDueMembercass:OtherLoanMember2022-12-310000708781us-gaap:FinancingReceivables60To89DaysPastDueMembercass:OtherLoanMember2022-12-310000708781cass:OtherLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000708781us-gaap:FinancialAssetNotPastDueMember2022-12-310000708781us-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-310000708781us-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310000708781us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000708781cass:LoansSubjectToNormalMonitoringMembercass:CommercialAndIndustrialLoanMember2023-09-300000708781cass:PerformingLoansSubjectToSpecialMonitoringMembercass:CommercialAndIndustrialLoanMember2023-09-300000708781cass:CommercialAndIndustrialLoanMembercass:NonperformingLoansSubjectToSpecialMonitoringMember2023-09-300000708781us-gaap:CommercialRealEstateMembercass:LoansSubjectToNormalMonitoringMemberus-gaap:MortgagesMember2023-09-300000708781cass:PerformingLoansSubjectToSpecialMonitoringMemberus-gaap:CommercialRealEstateMemberus-gaap:MortgagesMember2023-09-300000708781us-gaap:CommercialRealEstateMemberus-gaap:MortgagesMembercass:NonperformingLoansSubjectToSpecialMonitoringMember2023-09-300000708781us-gaap:CommercialRealEstateMembercass:LoansSubjectToNormalMonitoringMemberus-gaap:ConstructionMember2023-09-300000708781cass:PerformingLoansSubjectToSpecialMonitoringMemberus-gaap:CommercialRealEstateMemberus-gaap:ConstructionMember2023-09-300000708781us-gaap:CommercialRealEstateMembercass:NonperformingLoansSubjectToSpecialMonitoringMemberus-gaap:ConstructionMember2023-09-300000708781cass:FaithBasedRealEstateMembercass:LoansSubjectToNormalMonitoringMemberus-gaap:MortgagesMember2023-09-300000708781cass:PerformingLoansSubjectToSpecialMonitoringMembercass:FaithBasedRealEstateMemberus-gaap:MortgagesMember2023-09-300000708781cass:FaithBasedRealEstateMemberus-gaap:MortgagesMembercass:NonperformingLoansSubjectToSpecialMonitoringMember2023-09-300000708781cass:FaithBasedRealEstateMembercass:LoansSubjectToNormalMonitoringMemberus-gaap:ConstructionMember2023-09-300000708781cass:PerformingLoansSubjectToSpecialMonitoringMembercass:FaithBasedRealEstateMemberus-gaap:ConstructionMember2023-09-300000708781cass:FaithBasedRealEstateMembercass:NonperformingLoansSubjectToSpecialMonitoringMemberus-gaap:ConstructionMember2023-09-300000708781cass:OtherLoanMembercass:LoansSubjectToNormalMonitoringMember2023-09-300000708781cass:PerformingLoansSubjectToSpecialMonitoringMembercass:OtherLoanMember2023-09-300000708781cass:OtherLoanMembercass:NonperformingLoansSubjectToSpecialMonitoringMember2023-09-300000708781cass:LoansSubjectToNormalMonitoringMember2023-09-300000708781cass:PerformingLoansSubjectToSpecialMonitoringMember2023-09-300000708781cass:NonperformingLoansSubjectToSpecialMonitoringMember2023-09-300000708781cass:LoansSubjectToNormalMonitoringMembercass:CommercialAndIndustrialLoanMember2022-12-310000708781cass:PerformingLoansSubjectToSpecialMonitoringMembercass:CommercialAndIndustrialLoanMember2022-12-310000708781cass:CommercialAndIndustrialLoanMembercass:NonperformingLoansSubjectToSpecialMonitoringMember2022-12-310000708781us-gaap:CommercialRealEstateMembercass:LoansSubjectToNormalMonitoringMemberus-gaap:MortgagesMember2022-12-310000708781cass:PerformingLoansSubjectToSpecialMonitoringMemberus-gaap:CommercialRealEstateMemberus-gaap:MortgagesMember2022-12-310000708781us-gaap:CommercialRealEstateMemberus-gaap:MortgagesMembercass:NonperformingLoansSubjectToSpecialMonitoringMember2022-12-310000708781us-gaap:CommercialRealEstateMembercass:LoansSubjectToNormalMonitoringMemberus-gaap:ConstructionMember2022-12-310000708781cass:PerformingLoansSubjectToSpecialMonitoringMemberus-gaap:CommercialRealEstateMemberus-gaap:ConstructionMember2022-12-310000708781us-gaap:CommercialRealEstateMembercass:NonperformingLoansSubjectToSpecialMonitoringMemberus-gaap:ConstructionMember2022-12-310000708781cass:FaithBasedRealEstateMembercass:LoansSubjectToNormalMonitoringMemberus-gaap:MortgagesMember2022-12-310000708781cass:PerformingLoansSubjectToSpecialMonitoringMembercass:FaithBasedRealEstateMemberus-gaap:MortgagesMember2022-12-310000708781cass:FaithBasedRealEstateMemberus-gaap:MortgagesMembercass:NonperformingLoansSubjectToSpecialMonitoringMember2022-12-310000708781cass:FaithBasedRealEstateMembercass:LoansSubjectToNormalMonitoringMemberus-gaap:ConstructionMember2022-12-310000708781cass:PerformingLoansSubjectToSpecialMonitoringMembercass:FaithBasedRealEstateMemberus-gaap:ConstructionMember2022-12-310000708781cass:FaithBasedRealEstateMembercass:NonperformingLoansSubjectToSpecialMonitoringMemberus-gaap:ConstructionMember2022-12-310000708781cass:OtherLoanMembercass:LoansSubjectToNormalMonitoringMember2022-12-310000708781cass:PerformingLoansSubjectToSpecialMonitoringMembercass:OtherLoanMember2022-12-310000708781cass:OtherLoanMembercass:NonperformingLoansSubjectToSpecialMonitoringMember2022-12-310000708781cass:LoansSubjectToNormalMonitoringMember2022-12-310000708781cass:PerformingLoansSubjectToSpecialMonitoringMember2022-12-310000708781cass:NonperformingLoansSubjectToSpecialMonitoringMember2022-12-310000708781us-gaap:PaymentDeferralMembercass:CommercialAndIndustrialLoanMember2023-01-012023-09-300000708781us-gaap:ExtendedMaturityMembercass:CommercialAndIndustrialLoanMember2023-01-012023-09-300000708781cass:CommercialAndIndustrialLoanMemberus-gaap:ContractualInterestRateReductionMember2023-01-012023-09-300000708781cass:CommercialAndIndustrialLoanMemberus-gaap:ExtendedMaturityAndInterestRateReductionMember2023-01-012023-09-300000708781cass:CommercialAndIndustrialLoanMember2023-01-012023-09-30xbrli:pure0000708781us-gaap:PaymentDeferralMember2023-01-012023-09-300000708781us-gaap:ExtendedMaturityMember2023-01-012023-09-300000708781us-gaap:ContractualInterestRateReductionMember2023-01-012023-09-300000708781us-gaap:ExtendedMaturityAndInterestRateReductionMember2023-01-012023-09-30cass:loan00007087812022-01-012022-12-310000708781cass:LoansExcludingUnfundedCommitmentsMembercass:CAndIMember2021-12-310000708781cass:CREMembercass:LoansExcludingUnfundedCommitmentsMember2021-12-310000708781cass:LoansExcludingUnfundedCommitmentsMembercass:FaithBasedCREMember2021-12-310000708781us-gaap:ConstructionMembercass:LoansExcludingUnfundedCommitmentsMember2021-12-310000708781cass:LoansExcludingUnfundedCommitmentsMember2021-12-310000708781cass:LoansExcludingUnfundedCommitmentsMembercass:CAndIMember2022-01-012022-12-310000708781cass:CREMembercass:LoansExcludingUnfundedCommitmentsMember2022-01-012022-12-310000708781cass:LoansExcludingUnfundedCommitmentsMembercass:FaithBasedCREMember2022-01-012022-12-310000708781us-gaap:ConstructionMembercass:LoansExcludingUnfundedCommitmentsMember2022-01-012022-12-310000708781cass:LoansExcludingUnfundedCommitmentsMember2022-01-012022-12-310000708781cass:LoansExcludingUnfundedCommitmentsMembercass:CAndIMember2022-12-310000708781cass:CREMembercass:LoansExcludingUnfundedCommitmentsMember2022-12-310000708781cass:LoansExcludingUnfundedCommitmentsMembercass:FaithBasedCREMember2022-12-310000708781us-gaap:ConstructionMembercass:LoansExcludingUnfundedCommitmentsMember2022-12-310000708781cass:LoansExcludingUnfundedCommitmentsMember2022-12-310000708781cass:LoansExcludingUnfundedCommitmentsMembercass:CAndIMember2023-01-012023-09-300000708781cass:CREMembercass:LoansExcludingUnfundedCommitmentsMember2023-01-012023-09-300000708781cass:LoansExcludingUnfundedCommitmentsMembercass:FaithBasedCREMember2023-01-012023-09-300000708781us-gaap:ConstructionMembercass:LoansExcludingUnfundedCommitmentsMember2023-01-012023-09-300000708781cass:LoansExcludingUnfundedCommitmentsMember2023-01-012023-09-300000708781cass:LoansExcludingUnfundedCommitmentsMembercass:CAndIMember2023-09-300000708781cass:CREMembercass:LoansExcludingUnfundedCommitmentsMember2023-09-300000708781cass:LoansExcludingUnfundedCommitmentsMembercass:FaithBasedCREMember2023-09-300000708781us-gaap:ConstructionMembercass:LoansExcludingUnfundedCommitmentsMember2023-09-300000708781cass:LoansExcludingUnfundedCommitmentsMember2023-09-300000708781us-gaap:FinancialStandbyLetterOfCreditMember2023-09-300000708781cass:StandByLettersOfCreditMemberMember2023-09-300000708781us-gaap:RestrictedStockMembercass:OmnibusPlanMember2023-01-012023-09-300000708781cass:OmnibusPlanMemberus-gaap:PerformanceSharesMember2023-01-012023-09-300000708781us-gaap:RestrictedStockMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2023-01-012023-09-300000708781us-gaap:RestrictedStockMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMember2023-01-012023-09-300000708781us-gaap:RestrictedStockMember2023-09-300000708781us-gaap:RestrictedStockMember2023-01-012023-09-300000708781us-gaap:RestrictedStockMember2022-12-310000708781us-gaap:PerformanceSharesMember2023-01-012023-09-300000708781srt:MinimumMemberus-gaap:PerformanceSharesMember2023-01-012023-09-300000708781srt:MaximumMemberus-gaap:PerformanceSharesMember2023-01-012023-09-300000708781us-gaap:PerformanceSharesMember2022-12-310000708781us-gaap:PerformanceSharesMember2023-09-300000708781us-gaap:StockAppreciationRightsSARSMember2022-12-310000708781us-gaap:StockAppreciationRightsSARSMember2022-01-012022-12-310000708781us-gaap:StockAppreciationRightsSARSMember2023-01-012023-09-300000708781us-gaap:StockAppreciationRightsSARSMember2023-09-300000708781us-gaap:PensionPlansDefinedBenefitMembersrt:ScenarioForecastMember2023-01-012023-12-310000708781us-gaap:PensionPlansDefinedBenefitMember2022-01-012022-12-310000708781us-gaap:PensionPlansDefinedBenefitMember2023-07-012023-09-300000708781us-gaap:PensionPlansDefinedBenefitMember2023-01-012023-09-300000708781us-gaap:PensionPlansDefinedBenefitMember2022-07-012022-09-300000708781us-gaap:PensionPlansDefinedBenefitMember2022-01-012022-09-300000708781srt:ScenarioForecastMemberus-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2023-01-012023-12-310000708781us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2022-01-012022-12-310000708781us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2023-07-012023-09-300000708781us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2023-01-012023-09-300000708781us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2022-07-012022-09-300000708781us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2022-01-012022-09-300000708781us-gaap:USStatesAndPoliticalSubdivisionsMember2023-09-300000708781us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2023-09-300000708781us-gaap:CorporateDebtSecuritiesMember2023-09-300000708781us-gaap:USTreasurySecuritiesMember2023-09-300000708781us-gaap:AssetBackedSecuritiesMember2023-09-300000708781us-gaap:USStatesAndPoliticalSubdivisionsMember2022-12-310000708781us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2022-12-310000708781us-gaap:CorporateDebtSecuritiesMember2022-12-310000708781us-gaap:USTreasurySecuritiesMember2022-12-310000708781us-gaap:AssetBackedSecuritiesMember2022-12-31cass:security0000708781us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-09-300000708781us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310000708781us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-09-300000708781us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310000708781cass:InformationServicesMember2023-07-012023-09-300000708781cass:InformationServicesMember2022-07-012022-09-300000708781cass:InformationServicesMember2023-01-012023-09-300000708781cass:InformationServicesMember2022-01-012022-09-300000708781cass:BankServiceFeesMember2023-07-012023-09-300000708781cass:BankServiceFeesMember2022-07-012022-09-300000708781cass:BankServiceFeesMember2023-01-012023-09-300000708781cass:BankServiceFeesMember2022-01-012022-09-30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________________
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 000-20827
____________________
CASS INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Missouri43-1265338
(State or other jurisdiction of incorporation or
organization)
(I.R.S. Employer Identification No.)
12444 Powerscourt Drive, Suite 550
St. Louis, Missouri
63131
(Address of principal executive offices) (Zip Code)
(314) 506-5500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbols Name of each exchange on which registered
Common stock, par value $.50 CASS The Nasdaq Global Select Market
____________________
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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes     x                 No    o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes     x                 No     o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer o
Accelerated Filer
x
 
Non-Accelerated Filer oSmaller Reporting Company o Emerging Growth Company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes     ☐                 No    x
The number of shares outstanding of the registrant's only class of common stock as of October 27, 2023: Common stock, par value $.50 per share – 13,596,490 shares outstanding.
-1-

TABLE OF CONTENTS
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” of the Company’s 2022 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”), which may be updated from time to time in our future filings with the SEC. 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.
-2-

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands except Share and Per Share Data)
September 30, 2023 (Unaudited)
December 31,
2022
Assets  
Cash and due from banks $23,550 $20,995 
Short-term investments384,885 179,947 
Cash and cash equivalents 408,435 200,942 
Securities available-for-sale, at fair value 615,855 754,468 
Loans 1,039,619 1,082,906 
Less: Allowance for credit losses 13,319 13,539 
Loans, net 1,026,300 1,069,367 
Payments in advance of funding 258,587 293,775 
Premises and equipment, net 26,257 19,958 
Investment in bank-owned life insurance 48,857 47,998 
Goodwill 17,309 17,309 
Other intangible assets, net 3,540 4,126 
Accounts and drafts receivable from customers28,710 95,779 
Other assets 71,028 69,301 
Total assets $2,504,878 $2,573,023 
Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing $511,292 $642,757 
Interest-bearing 666,050 614,460 
Total deposits 1,177,342 1,257,217 
Accounts and drafts payable 1,082,224 1,067,600 
Other liabilities 39,076 41,881 
Total liabilities 2,298,642 2,366,698 
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 and 15,505,772 shares issued at September 30, 2023 and December 31, 2022; 13,596,490 and 13,669,656 shares outstanding at September 30, 2023 and December 31, 2022, respectively.
7,753 7,753 
Additional paid-in capital 207,663 207,422 
Retained earnings 141,444 131,682 
Common shares in treasury, at cost (1,909,282 shares at September 30, 2023 and 1,836,116 shares at December 31, 2022)
(83,704)(81,211)
Accumulated other comprehensive loss(66,920)(59,321)
Total shareholders’ equity 206,236 206,325 
Total liabilities and shareholders’ equity $2,504,878 $2,573,023 
See accompanying notes to unaudited consolidated financial statements.
-3-

CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in Thousands except Per Share Data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Fee Revenue and Other Income:
Processing fees$19,939 $18,964 $58,838 $57,184 
Financial fees11,597 11,252 34,518 32,406 
Other1,264 1,568 3,624 3,275 
Total fee revenue and other income 32,800 31,784 96,980 92,865 
Interest Income:
Interest and fees on loans 12,863 10,006 38,029 27,890 
Interest and dividends on securities:
Taxable 3,428 2,947 10,702 6,679 
Exempt from federal income taxes 964 1,551 3,161 4,867 
Interest on federal funds sold and other short-term investments 3,934 2,249 9,147 3,423 
Total interest income 21,189 16,753 61,039 42,859 
Interest Expense:
Interest on deposits 4,641 782 11,463 1,344 
Interest on short-term borrowings   116  
Total interest expense 4,641 782 11,579 1,344 
Net interest income 16,548 15,971 49,460 41,515 
Provision for (release of) credit losses125 550 (335)850 
Net interest income after provision for (release of) credit losses16,423 15,421 49,795 40,665 
Total net revenue 49,223 47,205 146,775 133,530 
Operating Expense:
Personnel 29,636 26,999 89,094 77,750 
Occupancy 908 970 2,670 2,801 
Equipment 1,789 1,633 5,188 5,004 
Amortization of intangible assets 195 195 585 485 
Other operating expense 7,535 6,524 22,237 15,748 
Total operating expense 40,063 36,321 119,774 101,788 
Income before income tax expense 9,160 10,884 27,001 31,742 
Income tax expense 1,766 2,085 5,352 6,123 
Net income $7,394 $8,799 $21,649 $25,619 
Basic earnings per share $.55 $.65 $1.60 $1.89 
Diluted earnings per share .54 .64 1.56 1.86 
See accompanying notes to unaudited consolidated financial statements.
-4-

CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Dollars in Thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Comprehensive Income:
Net income $7,394 $8,799 $21,649 $25,619 
Other comprehensive (loss) income:
Net unrealized loss on securities available-for-sale (13,659)(26,127)(10,105)(87,159)
Tax effect 3,251 6,218 2,405 20,744 
Reclassification adjustments for (gains) losses included in net income  (13)160 (15)
Tax effect  3 (38)3 
Foreign currency translation adjustments (118)(195)(21)(405)
Total comprehensive (loss) income $(3,132)$(11,315)$14,050 $(41,213)
See accompanying notes to unaudited consolidated financial statements.                                
-5-

CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
Nine Months Ended
September 30,
20232022
Cash Flows From Operating Activities:  
Net income $21,649 $25,619 
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets585 485 
Net amortization of premium/discount on investment securities3,378 4,818 
Depreciation3,061 3,008 
Losses (gains) on sales of securities 160 (15)
Stock-based compensation expense 3,797 4,479 
(Release of) provision for credit losses(335)850 
(Decrease) increase in current income tax liability(1,496)641 
Increase (decrease) in pension liability 346 (1,877)
Increase in accounts receivable (1,234)(2,540)
Other operating activities, net (545)5,331 
Net cash provided by operating activities 29,366 40,799 
Cash Flows From Investing Activities:
Proceeds from sales of securities available-for-sale 111,053 3,838 
Proceeds from maturities of securities available-for-sale 29,410 45,740 
Purchase of securities available-for-sale (15,332)(231,891)
Net decrease (increase) in loans 43,286 (76,521)
Purchase of bank-owned life insurance (4,538)
Asset acquisition of Touchpoint (4,425)
Decrease in payments in advance of funding35,188 22,206 
Purchases of premises and equipment, net (9,360)(4,270)
Net cash provided by (used in) investing activities 194,245 (249,861)
Cash Flows From Financing Activities:
Net decrease in noninterest-bearing demand deposits (131,465)(911)
Net increase in interest-bearing demand and savings deposits 15,304 20,672 
Net increase (decrease) in time deposits 36,286 (11,543)
Net decrease (increase) in accounts and drafts receivable from customers67,069 (45,699)
Net decrease in accounts and drafts payable14,624 95,938 
Cash dividends paid (11,887)(11,478)
Purchase of common shares for treasury (5,212)(5,299)
Other financing activities, net (837)(552)
Net cash (used in) provided by financing activities (16,118)41,128 
Net increase (decrease) in cash and cash equivalents 207,493 (167,934)
Cash and cash equivalents at beginning of period 200,942 514,928 
Cash and cash equivalents at end of period $408,435 $346,994 
Supplemental information:
Cash paid for interest $11,049 $1,314 
Cash paid for income taxes 6,775 5,531 
See accompanying notes to unaudited consolidated financial statements.
-6-


CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
THREE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
(Dollars in Thousands except per share data)
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Total
Balance, June 30, 2022
$7,753 $204,482 $121,386 $(81,742)$(46,265)$205,614 
Net income 8,799 8,799 
Cash dividends ($0.28 per share)
(3,824)(3,824)
Issuance of 3,487 common shares pursuant to stock-based compensation plan, net
(165)118 (47)
Stock-based compensation expense 1,307 1,307 
Other comprehensive loss(20,114)(20,114)
Balance, September 30, 2022
$7,753 $205,624 $126,361 $(81,624)$(66,379)$191,735 
Balance, June 30, 2023
$7,753 $206,734 $137,996 $(80,943)$(56,394)$215,146 
Net income 7,394 7,394 
Cash dividends ($0.29 per share)
(3,946)(3,946)
Issuance of 1,685 common shares pursuant to stock-based compensation plans, net
(9)74 65 
Exercise of SARs    
Stock-based compensation expense 938  938 
Purchase of 73,272 common shares
(2,835)(2,835)
Other comprehensive loss(10,526)(10,526)
Balance, September 30, 2023
$7,753 $207,663 $141,444 $(83,704)$(66,920)$206,236 
-7-

CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
(Dollars in Thousands except per share data)
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Total
Balance, December 31, 2021
$7,753 $204,276 $112,220 $(78,904)$453 $245,798 
Net income 25,619 25,619 
Cash dividends ($.84 per share)
(11,478)(11,478)
Issuance of 80,396 common shares pursuant to stock-based compensation plan, net
(2,803)2,336 (467)
Exercise of SARs (328)243 (85)
Stock-based compensation expense 4,479 4,479 
Purchase of 130,374 common shares
(5,299)(5,299)
Other comprehensive loss (66,832)(66,832)
Balance, September 30, 2022
$7,753 $205,624 $126,361 $(81,624)$(66,379)$191,735 
Balance, December 31, 2022
$7,753 $207,422 $131,682 $(81,211)$(59,321)$206,325 
Net income 21,649 21,649 
Cash dividends ($.87 per share)
(11,887)(11,887)
Issuance of 82,906 common shares pursuant to stock-based compensation plans, net
(3,336)2,615 (721)
Exercise of SARs (238)122 (116)
Stock-based compensation expense 3,815 (18)3,797 
Purchase of 136,577 common shares
(5,212)(5,212)
Other comprehensive loss(7,599)(7,599)
Balance, September 30, 2023
$7,753 $207,663 $141,444 $(83,704)$(66,920)$206,236 
See accompanying notes to unaudited consolidated financial statements.
-8-

CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Certain amounts in prior-period financial statements have been reclassified to conform to the current period’s presentation. Such reclassifications have no effect on previously reported net income or shareholders’ equity. For further information, refer to the audited consolidated financial statements and related footnotes included in Cass Information System, Inc.’s (the “Company” or “Cass”) Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 Form 10-K").
Note 2 – Intangible Assets
The Company accounts for intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Goodwill and Other Intangible Assets, which requires that intangibles with indefinite useful lives be tested annually for impairment, or when management deems there is a triggering event, and those with finite useful lives be amortized over their useful lives.
Details of the Company’s intangible assets are as follows:
September 30, 2023December 31, 2022
(In thousands)Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Assets eligible for amortization:     
Customer lists $6,470 $(4,778)$6,470 $(4,561)
Patents 72 (35)72 (32)
Software 3,212 (1,827)3,212 (1,508)
Trade name 373 (63)373 (42)
Other 500 (384)500 (358)
Unamortized intangible assets:
Goodwill 17,309 — 17,309 — 
Total intangible assets $27,936 $(7,087)$27,936 $(6,501)
The customer lists are amortized over 7 to 10 years; the patents over 18 years; software over 3 to 7 years; the trade names over 10 to 20 years; and other intangible assets over 15 years. Amortization of intangible assets amounted to $195,000 for the three month periods ended September 30, 2023 and 2022. Amortization of intangible assets amounted to $585,000 and $485,000 for the nine-month periods ended September 30, 2023 and 2022, respectively. Estimated annual amortization of intangibles is $780,000 in 2023, $738,000 in 2024, $730,000 in 2025, $582,000 in 2026, and $262,000 in 2027.
Note 3 – Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the sum of the weighted-average number of common shares outstanding and the weighted-average number of potential common shares outstanding. Under the treasury stock method, stock appreciation rights (“SARs”) are dilutive when the average market price of the Company’s common stock, combined with the effect of any unamortized compensation expense, exceeds the SAR price during a period.
-9-

The calculations of basic and diluted earnings per share are as follows:
(In thousands except share and per share data)Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Basic
Net income $7,394 $8,799 $21,649 $25,619 
Weighted-average common shares outstanding 13,501,469 13,542,231 13,551,070 13,554,169 
Basic earnings per share $0.55 $0.65 $1.60 $1.89 
 
Diluted
Net income $7,394 $8,799 $21,649 $25,619 
Weighted-average common shares outstanding 13,501,469 13,542,231 13,551,070 13,554,169 
Effect of dilutive restricted stock and stock appreciation rights 291,142 262,106 285,354 252,496 
Weighted-average common shares outstanding assuming dilution 13,792,611 13,804,337 13,836,424 13,806,665 
Diluted earnings per share $0.54 $0.64 $1.56 $1.86 
Note 4 – Stock Repurchases
The Company maintains a treasury stock buyback program pursuant to which, in October 2021, the Board of Directors authorized the repurchase of up to 750,000 shares of the Company’s common stock with no expiration date. As of September 30, 2023, the Company had 204,130 shares remaining available for repurchase under the program. On October 17, 2023, the Board of Directors authorized the repurchase of up to 500,000 shares of the Company's common stock with no expiration date. This authorization replaces the October 2021 authorization, and as such, the Company has 500,000 shares available for repurchase effective with the October 17, 2023 authorization. The Company repurchased 73,272 and 0 shares during the three-month periods ended September 30, 2023 and 2022, respectively, and 136,577 and 130,374 shares during the nine-month periods ended September 30, 2023 and 2022, respectively. Repurchases may be made in the open market or through negotiated transactions from time to time depending on market conditions.
Note 5 – Industry Segment Information
The services provided by the Company are classified into two reportable segments: Information Services and Banking Services. Each of these segments provides distinct services that are marketed through different channels. They are managed separately due to their unique service and processing requirements.
The Information Services segment provides transportation, energy, telecommunication, and environmental invoice processing and payment services to large corporations. In addition, this segment provides church management software and on-line generosity services primarily for faith-based ministries. The Banking Services segment provides banking services primarily to privately held businesses, franchise restaurants, and faith-based ministries, as well as supporting the banking needs of the Information Services segment.
The Company’s accounting policies for segments are the same as those described in the summary of significant accounting policies in the Company’s 2022 Form 10-K. Management evaluates segment performance based on pre-tax income after allocations for corporate expenses. Transactions between segments are accounted for at what management believes to be fair value.
Substantially all revenue originates from, and all long-lived assets are located within, the United States and no revenue from any customer of any segment exceeds 10% of the Company’s consolidated revenue.
Funding sources represent average balances and deposits generated by Information Services and Banking Services and there is no allocation methodology used. Banking Services interest income is determined by actual interest income on loans minus actual interest expense paid on deposits plus/minus an allocation for interest income or expense dependent on the
-10-

remaining available liquidity of the segment. Information Services interest income is determined by multiplying available liquidity by actual yields on short-term investments and investment securities.
Any difference between total segment interest income and overall total Company interest income is included in Corporate, Eliminations, and Other.
-11-

Summarized information about the Company’s operations in each industry segment is as follows:
(In thousands)Information
Services
Banking
Services
Corporate,
Eliminations
and Other
Total
Three Months Ended September 30, 2023:
Fee income $31,843 $664 $293 $32,800 
Interest income10,143 13,879 (2,833)21,189 
Interest expense 437 7,523 (3,319)4,641 
Intersegment income (expense) (1,117)1,117  — 
Tax-equivalized pre-tax income6,100 2,282 778 9,160 
Goodwill 17,173 136  17,309 
Other intangible assets, net 3,540   3,540 
Total assets 1,648,152 1,130,345 (273,619)2,504,878 
Average funding sources $1,347,074 $795,011 $ $2,142,085 
Three Months Ended September 30, 2022:
Fee income $30,399 $1,093 $292 $31,784 
Interest income7,468 10,525 (1,240)16,753 
Interest expense 33 1,025 (276)782 
Intersegment income (expense) (802)802  — 
Tax-equivalized pre-tax income5,933 5,622 (671)10,884 
Goodwill 17,173 136  17,309 
Other intangible assets, net 4,321   4,321 
Total assets 1,616,986 1,134,295 (140,466)2,610,815 
Average funding sources $1,417,250 $949,454 $ $2,366,704 
Nine Months Ended September 30, 2023:
Fee income $94,280 $2,001 $699 $96,980 
Interest income29,053 40,885 (8,899)61,039 
Interest expense 604 20,296 (9,321)11,579 
Intersegment income (expense) (3,093)3,093  — 
Tax-equivalized pre-tax income16,964 8,917 1,120 27,001 
Goodwill 17,173 136  17,309 
Other intangible assets, net 3,540   3,540 
Total assets 1,648,152 1,130,345 (273,619)2,504,878 
Average funding sources $1,343,750 $820,335 $ $2,164,085 
Nine Months Ended September 30, 2022:
Fee income $89,243 $2,763 $859 $92,865 
Interest income17,596 28,714 (3,451)42,859 
Interest expense 73 1,578 (307)1,344 
Intersegment income (expense) (2,476)2,476  — 
Tax-equivalized pre-tax income17,803 16,224 (2,285)31,742 
Goodwill 17,173 136  17,309 
Other intangible assets, net 4,321   4,321 
Total assets 1,616,986 1,134,295 (140,466)2,610,815 
Average funding sources $1,365,880 $963,588 $ $2,329,468 
-12-

Note 6 – Loans by Type
A summary of loans is as follows:
(In thousands)September 30,
2023
December 31,
2022
Commercial and industrial $517,310 $561,616 
Real estate:
Commercial:
Mortgage 115,742 108,166 
Construction 21,101 17,874 
Faith-based:
Mortgage 376,186 387,114 
Construction 9,249 8,094 
Other31 42 
Total loans $1,039,619 $1,082,906 
The following table presents the aging of loans past due by category at September 30, 2023 and December 31, 2022:
PerformingNonperforming
(In thousands)Current30-59
Days
60-89
Days
90
Days
and
Over
Non-
accrual
Total
Loans
September 30, 2023
Commercial and industrial $517,310 $ $ $ $ $517,310 
Real estate
Commercial:
Mortgage 115,742     115,742 
Construction 21,101     21,101 
Faith-based:
Mortgage 376,186     376,186 
Construction 9,249     9,249 
Other31     31 
Total $1,039,619 $ $ $ $ $1,039,619 
December 31, 2022
Commercial and industrial $560,466 $ $ $ $1,150 $561,616 
Real estate
Commercial:
Mortgage 108,166     108,166 
Construction 17,874     17,874 
Faith-based:
Mortgage 387,114     387,114 
Construction 8,094     8,094 
Other42     42 
Total $1,081,756 $ $ $ $1,150 $1,082,906 
-13-

The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of September 30, 2023 and December 31, 2022:
(In thousands)
Loans
Subject to
Normal
Monitoring1
Performing
Loans Subject
to Special
Monitoring2
Nonperforming
Loans Subject
to Special
Monitoring2
Total Loans
September 30, 2023
Commercial and industrial $517,310 $ $ $517,310 
Real estate
Commercial:
Mortgage 115,742   115,742 
Construction 21,101   21,101 
Faith-based:
Mortgage 372,708 3,478  376,186 
Construction 9,249   9,249 
Other31   31 
Total $1,036,141 $3,478 $ $1,039,619 
December 31, 2022
Commercial and industrial $549,241 $11,225 $1,150 $561,616 
Real estate
Commercial:
Mortgage 108,166   108,166 
Construction 17,874   17,874 
Faith-based:
Mortgage 386,169 945  387,114 
Construction 8,094   8,094 
Other42   42 
Total $1,069,586 $12,170 $1,150 $1,082,906 
1 Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk, who have the apparent ability to satisfy their loan obligations.
2 Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a high level of management attention.
-14-

The Company adopted Accounting Standards Update ("ASU") 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02") effective January 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measure of troubled debt restructurings and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty. In some cases, these modifications may result in new loans. Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination thereof, among other things.
The following table shows the amortized cost of loans at September 30, 2023 that were both experiencing financial difficulty and modified during the nine months ended September 30, 2023, segregated by category and type of modification.
(In thousands)Payment DelayTerm ExtensionInterest Rate ReductionCombination Term Extension and Interest Rate ReductionPercentage of Total Loans Held for Investment
September 30, 2023
Commercial and industrial$ $10,709 $ $ 2.07 %
Total$ $10,709 $ $ 1.03 %
There were two loans modified during the nine months ended September 30, 2023. The terms were extended by periods of two and three years, and there was not an interest rate reduction associated with the modifications.
The following table shows the performance of loans that have been modified to borrowers experiencing financial difficulty during the nine months ended September 30, 2023.
(In thousands)Current30-59 Days Past Due60-89 Days Past Due90 Days or More Past DueTotal Past Due
September 30, 2023
Commercial and industrial$10,709 $ $ $ $ 
Total$10,709 $ $ $ $ 
There were no modified loans that had a payment default during the nine months ended September 30, 2023 and that had been modified due to the borrower experiencing financial difficulty within the 12 previous months preceding the default.
Upon the Company's determination that a modified loan has subsequently been deemed uncollectible, the loan is written off. There were no loans written off during the nine months ended September 30, 2023.
Prior to the adoption of ASU 2022-02, there were no loans considered troubled debt restructurings as of September 30, 2022 or December 31, 2022.
The Company had no loans evaluated for expected credit losses on an individual basis as of September 30, 2023. The Company had one loan that was considered an individually evaluated credit at December 31, 2022, with no specific allowance. This loan was paid off in full in January 2023. There were no foreclosed loans recorded as other real estate owned as of September 30, 2023 or December 31, 2022.
-15-

A summary of the activity in the allowance for credit losses (“ACL”) by category for the nine month period ended September 30, 2023 and year-ended December 31, 2022 is as follows:
(In thousands)C&ICREFaith-based
CRE
ConstructionTotal
Balance at December 31, 2021
$5,034 $1,031 $5,684 $292 $12,041 
Provision for (release of) credit losses 931 (91)753 (108)1,485 
Recoveries 13    13 
Balance at December 31, 2022
$5,978 $940 $6,437 $184 $13,539 
(Release of) provision for credit losses (1)
(275)72 (48)31 (220)
Recoveries      
Balance at September 30, 2023
$5,703 $1,012 $6,389 $215 $13,319 
(1)
For the nine month period ended September 30, 2023 and year-ended December 31, 2022, there was a release of credit losses of $115,000 and $135,000, respectively, for unfunded commitments.
Note 7 – Commitments and Contingencies
In the normal course of business, the Company is party to activities that contain credit, market and operational risks that are not reflected in whole or in part in the Company’s consolidated financial statements. As more fully described in the Form 10-K, such activities include traditional off-balance sheet credit-related financial instruments and commitments under operating leases. These financial instruments include commitments to extend credit, commercial letters of credit and standby letters of credit. The Company’s maximum potential exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, commercial letters of credit and standby letters of credit is represented by the contractual amounts of those instruments. Commitments to extend credit and letters of credit are subject to the same underwriting standards as those financial instruments included on the consolidated balance sheets. An allowance for unfunded commitments of $117,000 and $232,000 had been recorded at September 30, 2023 and December 31, 2022, respectively.
At September 30, 2023, the balances of unfunded commitments, standby and commercial letters of credit were $187.0 million, $12.5 million, and $502,000, respectively. Since some of the financial instruments may expire without being drawn upon, the total amounts do not necessarily represent future cash requirements.
Note 8 – Stock-Based Compensation
Stock-based compensation awards have historically been issued under the Company's Amended and Restated Omnibus Stock and Performance Compensation Plan (the "Prior Plan"), which was amended and last approved by shareholders in 2013. The Company issued shares out of treasury stock for these awards until the expiration of the Prior Plan on April 17, 2023. During the nine months ended September 30, 2023, 35,035 restricted shares and 48,262 performance-based restricted shares were granted under the Prior Plan.
On February 16, 2023, the Board of Directors adopted the 2023 Omnibus Stock and Performance Compensation Plan (the "2023 Omnibus Plan") to replace the Prior Plan, subject to shareholder approval which occurred on April 18, 2023. Subsequent to this date, the Company will issue stock-based compensation awards under the 2023 Omnibus Plan. During the nine months ended September 30, 2023, 21,372 restricted shares and 3,191 performance-based restricted shares were granted under the 2023 Omnibus Plan.
Stock-based compensation expense for the three months ended September 30, 2023 and 2022 was $938,000 and $1.3 million, respectively, and $3.8 million and $4.5 million for the nine months ended September 30, 2023 and 2022, respectively.
Restricted Stock
Restricted shares granted to Company employees are amortized to expense over a three-year cliff vesting period, or until vesting occurs upon retirement. Restricted shares granted to members of the Board of Directors are amortized to expense over a one-year service period, with the exception of those shares granted in lieu of cash payments for retainer fees which are expensed in the period earned.
-16-

As of September 30, 2023, the total unrecognized compensation expense related to non-vested restricted shares was $2.0 million, and the related weighted-average period over which it is expected to be recognized is approximately 0.51 years.
Following is a summary of the activity of the Company's restricted stock for the nine months ended September 30, 2023, with total shares and weighted-average fair value:
Nine Months Ended
September 30, 2023
SharesFair Value
Balance at December 31, 2022
205,565 $42.64 
Granted 56,407 44.59 
Vested (21,691)53.16 
Forfeitures(398)40.15 
Balance at September 30, 2023
239,883 $42.17 
Performance-Based Restricted Stock
The Company has granted three-year performance-based restricted stock (“PBRS”) awards which are contingent upon the Company’s achievement of pre-established financial goals over a three-year cliff vest period. The number of shares issued ranges from 0% to 150% of the target opportunity based on the actual achievement of financial goals for the three-year performance period.
Following is a summary of the activity of the PBRS for the nine months ended September 30, 2023, based on 100% of target value:
Nine Months Ended
September 30, 2023
SharesFair Value
Balance at December 31, 2022
138,785 $43.19 
Granted 51,453 48.19 
Vested (30,567)54.02 
Forfeitures(598)40.15 
Balance at September 30, 2023
159,073 $42.74 
The PBRS that vested during the nine months ended September 30, 2023 were based on the Company's achievement of 86.7% of target financial goals, resulting in the issuance of 26,499 shares of common stock. The outstanding PBRS at September 30, 2023 will vest at scheduled vesting dates and the actual number of shares of common stock issued will range from 0% to 150% of the target opportunity based on the actual achievement of financial goals for the respective three-year performance period.
SARs
There were no SARs granted and no expense recognized during the nine months ended September 30, 2023. Following is a summary of the activity of the Company’s SARs program for the nine months ended September 30, 2023:
SharesWeighted-
Average
Exercise
Price
Average
Remaining
Contractual
Term Years
Aggregate
Intrinsic
Value
(In thousands)
Balance at December 31, 2022
46,325 $41.62 0.73$192 
Exercised (15,916)31.92 — — 
Exercisable at September 30, 2023
30,409 $46.70 0.33$ 
All SARs were vested at September 30, 2023.
-17-

Note 9 – Defined Pension Plans
The Company has a noncontributory defined-benefit pension plan (the “Plan”), which covers eligible employees. Effective December 31, 2016, the Plan was closed to all new participants. Additionally, the Plan’s benefits were frozen for all remaining participants as of February 28, 2021. As such, subsequent to February 28, 2021, there is no service cost associated with the Plan. The following table represents the components of net periodic pension cost (benefit):
(In thousands)
Estimated
2023
Actual 2022
Interest cost on projected benefit obligations $4,375 $3,293 
Expected return on plan assets (3,977)(5,857)
Net periodic pension cost (benefit)$398 $(2,564)
The Company recorded a net periodic pension cost of $129,000 and $402,000 for the three and nine month period ended September 30, 2023, respectively, and a net periodic pension benefit of $616,000 and $1.8 million for the three and nine month period ended September 30, 2022, respectively. The Company made no contributions to the Plan during the nine month period ended September 30, 2023 and is evaluating the amount of contributions, if any, for the remainder of 2023.
In addition to the above funded defined-benefit pension plan, the Company has an unfunded supplemental executive retirement plan (the "SERP"). There are no current employees earning benefits and therefore, there is no service cost associated with the SERP. The following table represents the components of the net periodic cost for the SERP:
(In thousands)
Estimated
2023
Actual
2022
Interest cost on projected benefit obligation $472 $318 
Net amortization  108 
Net periodic pension cost $472 $426 
SERP cost recorded to expense was $118,000 and $354,000 for the three and nine month periods ended September 30, 2023, respectively, and $107,000 and $320,000 for the three and nine month periods ended September 30, 2022, respectively.
Note 10 – Income Taxes
The effective tax rate was 19.3% and 19.8% for the three and nine month periods ended September 30, 2023, respectively, and 19.2% and 19.3% for the three and nine month periods September 30, 2022, respectively. The effective tax rate for all periods differs from the statutory rate of 21% primarily due to the tax-exempt interest received from municipal bonds and bank-owned life insurance, among other factors. The increase in the effective tax rate for the nine month period ended September 30, 2023 as compared to the same period of 2022 is primarily a result of lower tax-exempt income.
Note 11 – Investment in Securities
Investment securities available-for-sale are recorded at fair value on a recurring basis. The Company’s investment securities available-for-sale are measured at fair value using Level 2 valuations. The market evaluation utilizes several sources which include “observable inputs” rather than “significant unobservable inputs” and therefore fall into the Level 2
-18-

category. The amortized cost, gross unrealized gains, gross unrealized losses and fair value of investment securities are summarized as follows:
September 30, 2023
(In thousands)Amortized
Cost
 Gross
Unrealized
Gains
 Gross
Unrealized
Losses
 Fair
Value
State and political subdivisions $241,194 $2 $25,735 $215,461 
Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises192,241  39,806 152,435 
Corporate bonds 111,172