☐ time. Gross Carrying Accumulated Gross Carrying Accumulated faith-based ministries, including on-line generosity services, as well as supporting the banking needs of the Information Services segment. Summarized information about the Company’s operations in each industry segment is as follows: 2021. There were no foreclosed loans recorded as other real estate owned (included in other assets) as of 2021, respectively. Stock-based compensation expense for the three months ended March 31, 2022 and 2021 was $1,090,000 and $693,000, respectively. Following is a summary of the activity of the Company's restricted stock for the three months ended March 31, 2022, with total shares and weighted average fair value: respective three-year performance period. In addition to the above funded benefit plan, the Company has an unfunded supplemental executive retirement plan which covers key executives of the Company. This is a noncontributory plan in which the Company and its subsidiaries make accruals designed to fund normal service costs on a current basis using the same method and criteria as its defined benefit plan. The following table represents the components of the net periodic pension costs for bank-owned life insurance, among other factors. The recorded an allowance for credit losses on securities. faith-based ministries in the St. Louis metropolitan area as well as other selected cities in the United States. The cost of fuel is another factor that has a significant impact on the transportation sector. As the price of fuel goes up or down, the Company’s earnings increase or decrease with the dollar amount of transportation invoices. Allowance for The increase in rising energy prices. 2.36%. Analysis of Net Interest Income Changes The 2021. There were no nonperforming loans outstanding at March 31, 2022 or December 31, 2021. volume, and individual loans. For loans that are individually evaluated, the Company uses two impairment measurement methods: 1) the present value of expected future cash flows and 2) collateral value. Credit Loss Experience Operating Expenses an increase in data processing related expenses. and deposits, cash flows in and out of loans, investments securities and payments in advance of 2021. Accounts and drafts payable will fluctuate from period-end to period-end due to the payment processing cycle, which results in lower balances on days when payments clear and higher balances on days when payments are issued. For this reason, average balances are a more meaningful measure of accounts and drafts payable (for average balances refer to the tables under the “Distribution of Assets, Liabilities and Shareholders’ Equity; Interest Rate and Interest Differential” section of this report). $8,258,000. The Bank has unsecured lines of credit at six correspondent banks to purchase federal funds up to a maximum of 2021. Lower levels of economic activity, such as those previously experienced by the Company as a result of COVID-19 and governmental actions related thereto, decrease both fee income and balances of accounts and drafts payable. above the minimum but below the conservation buffer will face limitations on the payment of dividends, common stock repurchases and discretionary cash payments to executive officers based on the amount of the shortfall. certain specified factors. _________________☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2017 OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _____________x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ ________________Missouri43-1265338Missouri 43-1265338 (I.R.S. Employer Identification No.) organization)63131 (Address of principal executive offices) (Zip Code) ________________Title of each class Trading symbols Name of each exchange on which registered Common stock, par value $.50 CASS The Nasdaq Global Select Market X x No _____
oand posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). X x No _____o”" “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.Large Accelerated Filer _____Accelerated Filer X Large Accelerated Filer Non-AcceleratedoAccelerated Filer _____Non-Accelerated Filer o Smaller Reporting Company _____o Emerging Growth Company _____(Do not check if a smaller reporting company)o __________☐ No X xOctober 30, 2017:April 22, 2022: Common stock, par value $.50 per share –11,166,349– 13,652,849 shares outstanding.Consolidated Balance SheetsSeptember 30, 2017Three and nine months ended September 30, 2017 and 2016 (unaudited)4Three and nine months ended September 30, 2017 and 2016 (unaudited)5Nine 6718292930SIGNATURES3220162021 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.September 30, 2017 December 31, (Unaudited) 2016 Assets Cash and due from banks $ 13,961 $ 11,814 Interest-bearing deposits in other financial institutions 90,789 136,852 Federal funds sold and other short-term investments 137,348 118,077 Cash and cash equivalents 242,098 266,743 Securities available-for-sale, at fair value 457,068 390,552 Loans 658,090 664,866 Less: Allowance for loan losses 10,202 10,175 Loans, net 647,888 654,691 Premises and equipment, net 21,168 21,086 Investment in bank-owned life insurance 16,812 16,445 Payments in excess of funding 119,802 105,347 Goodwill 12,569 11,590 Other intangible assets, net 2,106 1,997 Other assets 37,239 36,388 Total assets $ 1,556,750 $ 1,504,839 Liabilities and Shareholders’ Equity Liabilities: Deposits: Noninterest-bearing $ 211,413 $ 214,656 Interest-bearing 397,817 407,305 Total deposits 609,230 621,961 Accounts and drafts payable 687,233 642,287 Other liabilities 36,332 32,556 Total liabilities 1,332,795 1,296,804 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 11,931,147 shares issued at September 30, 2017 and December 31, 2016 5,966 5,966 Additional paid-in capital 129,052 128,455 Retained earnings 130,321 118,363 Common shares in treasury, at cost (764,798 shares at September 30, 2017 and 742,681 shares at December 31, 2016) (32,167 ) (30,206 ) Accumulated other comprehensive loss (9,217 ) (14,543 ) Total shareholders’ equity 223,955 208,035 Total liabilities and shareholders’ equity $ 1,556,750 $ 1,504,839 March 31, 2022 (Unaudited) December 31,
2021Assets Cash and due from banks $ 22,416 $ 12,301 Short-term investments 169,033 502,627 Cash and cash equivalents 191,449 514,928 Securities available-for-sale, at fair value 774,610 673,453 Loans 977,202 960,567 Less: Allowance for credit losses 12,406 12,041 Loans, net 964,796 948,526 Payments in advance of funding 329,622 291,427 Premises and equipment, net 19,086 18,113 Investment in bank-owned life insurance 47,163 43,176 Goodwill 14,262 14,262 Other intangible assets, net 2,429 2,564 Other assets 78,626 48,452 Total assets $ 2,422,043 $ 2,554,901 Liabilities and Shareholders’ Equity Liabilities: Deposits: Noninterest-bearing $ 621,819 $ 582,642 Interest-bearing 555,116 638,861 Total deposits 1,176,935 1,221,503 Accounts and drafts payable 989,733 1,050,396 Other liabilities 38,297 37,204 Total liabilities 2,204,965 2,309,103 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 March 31, 2022 and December 31, 2021; 13,644,741 and 13,734,295 shares outstanding at March 31, 2022 and December 31, 2021, respectively. 7,753 7,753 Additional paid-in capital 203,149 204,276 Retained earnings 116,646 112,220 Common shares in treasury, at cost (1,861,031 shares at March 31, 2022 and 1,771,477 shares at December 31, 2021) (82,348) (78,904) Accumulated other comprehensive (loss) income (28,122) 453 Total shareholders’ equity 217,078 245,798 Total liabilities and shareholders’ equity $ 2,422,043 $ 2,554,901 �� Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Fee Revenue and Other Income: Information services payment and processing revenue $ 23,761 $ 21,737 $ 69,332 $ 62,162 Bank service fees 327 284 998 931 Gains on sales of securities — — — 387 Other 119 127 448 630 Total fee revenue and other income 24,207 22,148 70,778 64,110 Interest Income: Interest and fees on loans 7,209 7,264 21,266 21,711 Interest and dividends on securities: Taxable 107 36 268 69 Exempt from federal income taxes 2,605 2,386 7,865 7,217 Interest on federal funds sold and other short-term investments 744 299 1,597 775 Total interest income 10,665 9,985 30,996 29,772 Interest Expense: Interest on deposits 571 505 1,521 1,522 Net interest income 10,094 9,480 29,475 28,250 Provision for loan losses — — — (1,000 ) Net interest income after provision for loan losses 10,094 9,480 29,475 29,250 Total net revenue 34,301 31,628 100,253 93,360 Operating Expense: Personnel 19,423 18,319 57,384 54,267 Occupancy 903 860 2,634 2,560 Equipment 1,242 1,124 3,746 3,289 Amortization of intangible assets 110 101 317 305 Other operating expense 3,364 3,147 10,180 9,105 Total operating expense 25,042 23,551 74,261 69,526 Income before income tax expense 9,259 8,077 25,992 23,834 Income tax expense 2,396 1,855 6,309 5,910 Net income $ 6,863 $ 6,222 $ 19,683 $ 17,924 Basic earnings per share $ .62 $ .56 $ 1.77 $ 1.61 Diluted earnings per share .61 .55 1.74 1.58 Three Months Ended
March 31,2022 2021 Fee Revenue and Other Income: Processing fees $ 19,036 $ 18,375 Financial fees 10,532 6,997 Other 862 803 Total fee revenue and other income 30,430 26,175 Interest Income: Interest and fees on loans 8,777 8,587 Interest and dividends on securities: Taxable 1,456 198 Exempt from federal income taxes 1,677 1,739 Interest on federal funds sold and other short-term investments 216 152 Total interest income 12,126 10,676 Interest Expense: Interest on deposits 223 331 Total interest expense 223 331 Net interest income 11,903 10,345 Provision for (release of) credit losses 230 (600) Net interest income after provision for (release of) credit losses 11,673 10,945 Total net revenue 42,103 37,120 Operating Expense: Personnel 24,718 22,526 Occupancy 915 947 Equipment 1,711 1,675 Amortization of intangible assets 135 215 Other operating expense 4,349 3,162 Total operating expense 31,828 28,525 Income before income tax expense 10,275 8,595 Income tax expense 2,017 1,524 Net income $ 8,258 $ 7,071 Basic earnings per share $ .61 $ .49 Diluted earnings per share .60 .49 Three Months Ended Nine Months Ended September 30, September 30, Three Months Ended
March 31,2017 2016 2017 2016 2022 2021 Comprehensive income: Net income $ 6,863 $ 6,222 $ 19,683 $ 17,924 Net income $ 8,258 $ 7,071 Other comprehensive income: Net unrealized (loss) gain on securities available-for-sale (99 ) (3,176 ) 8,246 5,036 Other comprehensive (loss) income: Other comprehensive (loss) income: Net unrealized loss on securities available-for-sale Net unrealized loss on securities available-for-sale (37,499) (4,214) Tax effect 37 1,180 (3,063 ) (1,871 ) Tax effect 8,925 1,003 Reclassification adjustments for gains included in net income — — — (387 ) Reclassification adjustments for gains included in net income — (48) Tax effect — — — 143 Tax effect — 11 Foreign currency translation adjustments 41 9 143 20 Foreign currency translation adjustments (1) (129) Total comprehensive income $ 6,842 $ 4,235 $ 25,009 $ 20,865 Total comprehensive (loss) income Total comprehensive (loss) income $ (20,317) $ 3,694 Nine Months Ended September 30, Three Months Ended
March 31,2017 2016 2022 2021 Cash Flows From Operating Activities: Cash Flows From Operating Activities: Net income $ 19,683 $ 17,924 Net income $ 8,258 $ 7,071 Adjustments to reconcile net income to net cash provided by operating activities: Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,361 6,964 Depreciation and amortization 2,912 2,978 Net gains on sales of securities — (387 ) Gains on sales of securities Gains on sales of securities — (48) Stock-based compensation expense 1,658 1,471 Stock-based compensation expense 1,090 693 Provision for loan losses — (1,000 ) Increase in income tax benefit — (121 ) Increase in income tax liability 551 973 Increase in pension liability 3,476 3,102 Provision for (release of) credit losses Provision for (release of) credit losses 230 (600) Increase in current income tax liability Increase in current income tax liability 1,911 1,355 (Decrease) increase in pension liability (Decrease) increase in pension liability (640) 336 Increase in accounts receivable (3,637 ) (3,742 ) Increase in accounts receivable (726) (237) Other operating activities, net (2,156 ) 431 Other operating activities, net 1,688 5,156 Net cash provided by operating activities 27,936 25,615 Net cash provided by operating activities 14,723 16,704 Cash Flows From Investing Activities: Cash Flows From Investing Activities: Proceeds from sales of securities available-for-sale — 21,491 Proceeds from sales of securities available-for-sale — 2,991 Proceeds from maturities of securities available-for-sale 33,856 29,970 Proceeds from maturities of securities available-for-sale 16,194 47,113 Purchase of securities available-for-sale (97,473 ) (57,637 ) Purchase of securities available-for-sale (156,597) (125,467) Net decrease (increase) in loans 6,803 (25,781 ) Net increase in payments in excess of funding (14,455 ) (5,808 ) Net (increase) decrease in loans Net (increase) decrease in loans (16,500) 3,478 Purchase of bank-owned life insurance Purchase of bank-owned life insurance (3,987) — Increase in payments in advance of funding Increase in payments in advance of funding (38,195) (21,912) Purchases of premises and equipment, net (2,780 ) (3,549 ) Purchases of premises and equipment, net (2,002) (900) Net cash used in investing activities (74,049 ) (41,314 ) Net cash used in investing activities (201,087) (94,697) Cash Flows From Financing Activities: Cash Flows From Financing Activities: Net (decrease) increase in noninterest-bearing demand deposits (3,243 ) 20,561 Net decrease in interest-bearing demand and savings deposits (6,504 ) (37,855 ) Net increase (decrease) in noninterest-bearing demand deposits Net increase (decrease) in noninterest-bearing demand deposits 39,177 (68,645) Net (decrease) increase in interest-bearing demand and savings deposits Net (decrease) increase in interest-bearing demand and savings deposits (80,002) 21,373 Net decrease in time deposits (2,984 ) (5,177 ) Net decrease in time deposits (3,743) (449) Net increase in accounts and drafts payable 44,946 105,503 Net (decrease) increase in accounts and drafts payable Net (decrease) increase in accounts and drafts payable (83,054) 60,905 Cash dividends paid (7,725 ) (7,406 ) Cash dividends paid (3,832) (3,886) Purchase of common shares for treasury (2,270 ) (9,217 ) Purchase of common shares for treasury (5,086) (1,228) Other financing activities, net (752 ) (779 ) Other financing activities, net (575) (946) Net cash provided by financing activities 21,468 65,630 Net (decrease) increase in cash and cash equivalents (24,645 ) 49,931 Net cash (used in) provided by financing activities Net cash (used in) provided by financing activities (137,115) 7,124 Net decrease in cash and cash equivalents Net decrease in cash and cash equivalents (323,479) (70,869) Cash and cash equivalents at beginning of period 266,743 253,172 Cash and cash equivalents at beginning of period 514,928 670,528 Cash and cash equivalents at end of period $ 242,098 $ 303,103 Cash and cash equivalents at end of period $ 191,449 $ 599,659 Supplemental information: Supplemental information: Cash paid for interest $ 1,520 $ 1,517 Cash paid for interest $ 216 $ 311 Cash paid for income taxes 5,758 5,128 Cash paid for income taxes 109 134 Common
StockAdditional
Paid-in
CapitalRetained
EarningsTreasury
StockAccumulated
Other
Comprehensive
LossTotal Balance, December 31, 2020 $ 7,753 $ 204,875 $ 99,062 $ (50,515) $ (15) $ 261,160 Net income 7,071 7,071 Cash dividends ($.27 per share) (3,886) (3,886) Issuance of 69,374 common shares pursuant to stock-based compensation plan, net (2,426) 1,596 (830) Exercise of SARs (314) 198 (116) Stock-based compensation expense 693 693 Purchase of 31,256 common shares (1,228) (1,228) Other comprehensive income (3,377) (3,377) Balance, March 31, 2021 $ 7,753 $ 202,828 $ 102,247 $ (49,949) $ (3,392) $ 259,487 Balance, December 31, 2021 $ 7,753 $ 204,276 $ 112,220 $ (78,904) $ 453 $ 245,798 Net income 8,258 8,258 Cash dividends ($.28 per share) (3,832) (3,832) Issuance of 58,272 common shares pursuant to stock-based compensation plan, net (1,889) 1,399 (490) Exercise of SARs (328) 243 (85) Stock-based compensation expense 1,090 1,090 Purchase of 124,874 common shares (5,086) (5,086) Other comprehensive loss (28,575) (28,575) Balance, March 31, 2022 $ 7,753 $ 203,149 $ 116,646 $ (82,348) $ (28,122) $ 217,078 footnotesnotes 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, 2016.2021.“GoodwillGoodwill and Other Intangible Assets” (“FASB ASC 350”), 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.In March 2017, the Company completed an acquisition and recorded intangible assets of $1,406,000. Those intangible assets were valued as $980,000 for goodwill, $355,000 for the customer list and $71,000 for non-compete agreements. September 30, 2017 December 31, 2016 March 31, 2022 December 31, 2021 (In thousands) Amount Amortization Amount Amortization (In thousands) Gross Carrying
AmountAccumulated
AmortizationGross Carrying
AmountAccumulated
AmortizationAssets eligible for amortization: Assets eligible for amortization: Customer lists $ 4,288 $ (2,610 ) $ 3,933 $ (2,342 ) Customer lists $ 4,778 $ (4,371) $ 4,778 $ (4,341) Patents 72 (11 ) 72 (8 ) Patents 72 (29) 72 (28) Non-compete agreements 332 (282 ) 261 (261 ) Software 234 (234 ) 234 (234 ) Software 2,844 (1,197) 2,844 (1,104) Trade Name Trade Name 190 (25) 190 (22) Other 500 (183 ) 500 (158 ) Other 500 (333) 500 (325) Unamortized intangible assets: Unamortized intangible assets: Goodwill1 12,796 (227 ) 11,817 (227 ) Goodwill Goodwill 14,262 — 14,262 — Total intangible assets $ 18,222 $ (3,547 ) $ 16,817 $ (3,230 ) Total intangible assets $ 22,646 $ (5,955) $ 22,646 $ (5,820) 1Amortization through December 31, 2001 prior to adoption of FASB ASC 350. seven7 and ten10 years; the patents over 18 years; the non-compete agreements over two and five years; software over three years;3 years and 7 years, the trade name over 20 years and other intangible assets over fifteen15 years. Amortization of intangible assets amounted to $317,000$135,000 and $305,000$215,000 for the nine-monththree month periods ended September 30, 2017March 31, 2022 and 2016,2021, respectively. Estimated annual amortization of intangibles is as follows: $427,000$540,000 in 2017, $442,000both 2022 and 2023, $498,000 in 2018, $412,0002024, $490,000 in 2019,2025, and $406,000$342,000 in each of 2020 and 2021.2026.There were no anti-dilutive shares inUnder the three and nine months ended September 30, 2017 and 2016. 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.-7-(In thousands except share and per
share data)Three Months Ended
March 31,2022 2021 Basic Net income $ 8,258 $ 7,071 Weighted-average common shares outstanding 13,577,991 14,312,260 Basic earnings per share $ .61 $ .49 Diluted Net income $ 8,258 $ 7,071 Weighted-average common shares outstanding 13,577,991 14,312,260 Effect of dilutive restricted stock and stock appreciation rights 236,233 220,809 Weighted-average common shares outstanding assuming dilution 13,814,224 14,533,069 Diluted earnings per share $ .60 $ .49 Three Months Ended Nine Months Ended September 30, September 30, (In thousands except share and per share data) 2017 2016 2017 2016 Basic Net income $ 6,863 $ 6,222 $ 19,683 $ 17,924 Weighted-average common shares outstanding 11,137,451 11,110,824 11,143,116 11,159,469 Basic earnings per share $ .62 $ .56 $ 1.77 $ 1.61 Diluted Net income $ 6,863 $ 6,222 $ 19,683 $ 17,924 Weighted-average common shares outstanding 11,137,451 11,110,824 11,143,116 11,159,469 Effect of dilutive restricted stock and stock appreciation rights 164,439 158,541 166,442 155,112 Weighted-average common shares outstanding assuming dilution assuming dilution 11,301,890 11,269,365 11,309,558 11,314,581 Diluted earnings per share $ .61 $ .55 $ 1.74 $ 1.58 has authorized the repurchase of up to 500,000750,000 shares of the Company’s common stock. As restored by the Board of Directors on October 17, 2016, the program provides that the Company may repurchase up to an aggregate of 500,000 shares of common stock and haswith no expiration date. The Company repurchased 38,042 and 0 shares during the three-month periods and 38,042 and 187,123 during the nine-month periods ended September 30, 2017 and 2016, respectively. As of September 30, 2017, 461,958March 31, 2022, 346,207 shares remained available for repurchase under the program. The Company repurchased 124,874 and 31,256 shares during the three-month periods ended March 31, 2022 and 2021, respectively. Repurchases may be made in the open market or through negotiated transactions from time to time depending on market conditions. On October 24, 2017, the Company’s Board of Directors restored the repurchase program to 500,000 shares.two2 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 and capital requirements.churches.2016.2021. Management evaluates segment performance based on nettax-equivalized (as defined in the footnote to the chart on the following table) pre-tax income after allocations for corporate expenses and income taxes.expenses. Transactions between segments are accounted for at what management believes to be fair value.Assetsactual assets ownedaverage balances and deposits generated by Information Services and Banking Services and there is no allocation methodology used. Segment interest from customersincome is a function of the actual interest earned onrelative share of average funding sources generated by each segment multiplied by the loans owned by following rates:respectively.-8- Corporate, Information Banking Eliminations (In thousands) Services Services and Other Total (In thousands) Information
ServicesBanking
ServicesCorporate,
Eliminations
and OtherTotal Three Months Ended September 30, 2017 Fee revenue and other income: Income from customers $ 27,276 $ 7,025 $ — $ 34,301 Three Months Ended March 31, 2022: Three Months Ended March 31, 2022: Fee income Fee income $ 29,234 $ 628 $ 568 $ 30,430 Interest income* Interest income* 6,326 6,482 (237) 12,571 Interest expense Interest expense — 223 — 223 Intersegment income (expense) 3,078 377 (3,455 ) — Intersegment income (expense) — 1,133 (1,133) — Net income 4,237 2,626 — 6,863 Tax-equivalized pre-tax income* Tax-equivalized pre-tax income* 7,815 2,850 56 10,721 Goodwill 12,433 136 — 12,569 Goodwill 12,433 1,829 — 14,262 Other intangible assets, net 2,106 — — 2,106 Other intangible assets, net 307 2,122 — 2,429 Total assets 820,596 738,478 (2,324 ) 1,556,750 Total assets 1,090,737 1,345,958 (14,652) 2,422,043 Three Months Ended September 30, 2016 Fee revenue and other income: Income from customers $ 25,090 $ 6,538 $ — $ 31,628 Average funding sources Average funding sources 1,008,928 966,820 — 1,975,748 Three Months Ended March 31, 2021: Three Months Ended March 31, 2021: Fee income Fee income $ 25,298 $ 317 $ 560 $ 26,175 Interest income* Interest income* 5,509 5,751 (122) 11,138 Interest expense Interest expense — 331 — 331 Intersegment income (expense) 2,797 416 (3,213 ) — Intersegment income (expense) — 623 (623) — Net income 3,806 2,416 — 6,222 Tax-equivalized pre-tax income* Tax-equivalized pre-tax income* 5,786 2,988 283 9,057 Goodwill 11,454 136 — 11,590 Goodwill 12,433 1,829 — 14,262 Other intangible assets, net 2,099 — — 2,099 Other intangible assets, net 634 2,574 — 3,208 Total assets 808,568 742,933 (3,848 ) 1,547,653 Total assets 1,023,196 1,263,669 (70,292) 2,216,573 Nine Months Ended September 30, 2017 Fee revenue and other income: Income from customers $ 79,671 $ 20,582 $ — $ 100,253 Intersegment income (expense) 9,090 1,122 (10,212 ) — Net income 11,992 7,691 — 19,683 Goodwill 12,433 136 — 12,569 Other intangible assets, net 2,106 — — 2,106 Total assets 820,596 738,478 (2,324 ) 1,556,750 Nine Months Ended September 30, 2016 Fee revenue and other income: Income from customers $ 73,084 $ 20,276 $ — $ 93,360 Intersegment income (expense) 8,870 1,195 (10,065 ) — Net income 10,231 7,693 — 17,924 Goodwill 11,454 136 — 11,590 Other intangible assets, net 2,099 — — 2,099 Total assets 808,568 742,933 (3,848 ) 1,547,653 Average funding sources Average funding sources 837,852 849,177 — 1,687,029 loan categoriesloans is as follows:(In thousands) September 30,
2017 December 31,
2016(In thousands) March 31,
2022December 31,
2021Commercial and industrial $ 213,942 $ 214,767 Commercial and industrial $ 469,129 $ 450,336 Real estate Real estate: Real estate: Commercial: Commercial: Mortgage 94,485 104,779 Mortgage 101,018 108,759 Construction 14,919 6,325 Construction 24,757 24,797 Church, church-related: Faith-based: Faith-based: Mortgage 322,614 321,168 Mortgage 367,376 355,582 Construction 7,907 11,152 Construction 13,512 14,664 Industrial Revenue Bonds 4,191 6,639 Paycheck Protection Program (“PPP”) Paycheck Protection Program (“PPP”) 1,373 6,299 Other 32 36 Other 37 130 Total loans $ 658,090 $ 664,866 Total loans $ 977,202 $ 960,567 -9-loan categoriescategory at September 30, 2017March 31, 2022 and December 31, 2016:2021: Performing Nonperforming 90 Days 30-59 60-89 and Non- Total Performing Nonperforming (In thousands) Current Days Days Over accrual Loans (In thousands) Current 30-59
Days60-89
Days90
Days
and
OverNon-
accrualTotal
LoansSeptember 30, 2017 March 31, 2022 March 31, 2022 Commercial and industrial $ 213,942 $ — $ — $ — $ — $ 213,942 Commercial and industrial $ 469,129 $ — $ — $ — $ — $ 469,129 Real estate Real estate Commercial: Commercial: Mortgage 94,270 — — — 215 94,485 Mortgage 101,018 — — — — 101,018 Construction 14,919 — — — — 14,919 Construction 24,757 — — — — 24,757 Church, church-related: Faith-based: Faith-based: Mortgage 322,614 — — — — 322,614 Mortgage 367,376 — — — — 367,376 Construction 7,907 — — — — 7,907 Construction 13,512 — — — — 13,512 Industrial Revenue Bonds 4,191 — — — — 4,191 PPP PPP 1,373 — — — — 1,373 Other 32 — — — — 32 Other 37 — — — — 37 Total $ 657,875 $ — $ — $ — $ 215 $ 658,090 Total $ 977,202 $ — $ — $ — $ — $ 977,202 December 31, 2016 December 31, 2021 December 31, 2021 Commercial and industrial $ 214,767 $ — $ — $ — $ — $ 214,767 Commercial and industrial $ 450,336 $ — $ — $ — $ — $ 450,336 Real estate Real estate Commercial: Commercial: Mortgage 104,534 — — — 245 104,779 Mortgage 108,759 — — — — 108,759 Construction 6,325 — — — — 6,325 Construction 24,797 — — — — 24,797 Church, church-related: Faith-based: Faith-based: Mortgage 321,168 — — — — 321,168 Mortgage 355,582 — — — — 355,582 Construction 11,152 — — — — 11,152 Construction 14,664 — — — — 14,664 Industrial revenue bonds 6,639 — — — — 6,639 PPP PPP 6,299 — — — — 6,299 Other 24 12 — — — 36 Other 130 — — — — 130 Total $ 664,609 $ 12 $ — $ — $ 245 $ 664,866 Total $ 960,567 $ — $ — $ — $ — $ 960,567 -10-September 30, 2017March 31, 2022 and December 31, 2016:2021: Loans Performing Nonperforming Subject to Loans Subject to Loans Subject Normal Special to Special (In thousands) Monitoring1 Monitoring2 Monitoring2 Total Loans (In thousands) Total Loans September 30, 2017 March 31, 2022 March 31, 2022 Commercial and industrial $ 211,820 $ 2,122 $ — $ 213,942 Commercial and industrial $ 466,946 $ 2,183 $ — $ 469,129 Real estate Real estate Commercial: Commercial: Mortgage 93,560 710 215 94,485 Mortgage 100,472 546 — 101,018 Construction 14,919 — — 14,919 Construction 24,757 — — 24,757 Church, church-related: Faith-based: Faith-based: Mortgage 322,561 53 — 322,614 Mortgage 366,397 979 — 367,376 Construction 7,907 — — 7,907 Construction 13,512 — — 13,512 Industrial Revenue Bonds 4,191 — — 4,191 PPP PPP 1,373 — — 1,373 Other 32 — — 32 Other 37 — — 37 Total $ 654,990 $ 2,885 $ 215 $ 658,090 Total $ 973,494 $ 3,708 $ — $ 977,202 December 31, 2016 December 31, 2021 December 31, 2021 Commercial and industrial $ 213,024 $ 1,743 $ — $ 214,767 Commercial and industrial $ 440,607 $ 9,729 $ — $ 450,336 Real estate Real estate Commercial: Commercial: Mortgage 103,778 756 245 104,779 Mortgage 108,759 — — 108,759 Construction 6,325 — — 6,325 Construction 24,797 — — 24,797 Church, church-related: Faith-based: Faith-based: Mortgage 318,030 3,138 — 321,168 Mortgage 352,717 2,865 — 355,582 Construction 11,152 — — 11,152 Construction 14,664 — — 14,664 Industrial revenue bonds 6,639 — — 6,639 PPP PPP 6,299 — — 6,299 Other 36 — — 36 Other 130 — — 130 Total $ 658,984 $ 5,637 $ 245 $ 664,866 Total $ 947,973 $ 12,594 $ — $ 960,567 1Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk, who have the apparent ability to satisfytheir loan obligations. 2Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a high level of management attention. Impaired loans consist primarily of nonaccrual loans, loans greater than 90 days past due and still accruing interest and troubled debt restructurings, both performing and nonperforming. Troubled debt restructuring involves the granting of a concession to a borrower experiencing financial difficulty resulting in the modification of terms of the loan, such as changes in payment schedule or interest rate. Management measures impairment in accordance with FASB ASC 310, “Allowance for Credit Losses.” At September 30, 2017 and December 31, 2016, impaired loans were evaluated using the expected cash flow method. There weredelinquent 90 days or more and still accruing interest at September 30, 2017evaluated for expected credit losses on an individual basis as of March 31, 2022 or December 31, 2016. There were no loans classified as troubled debt restructuring at September 30, 2017 or December 31, 2016.September 30, 2017 andMarch 31, 2022 or December 31, 2016.-11-The following table presents the recorded investment and unpaid principal balance for impaired2021. There were no loans at September 30, 2017 andconsidered troubled debt restructurings as of March 31, 2022 or December 31, 2016: Unpaid Related Recorded Principal Allowance for (In thousands) Investment Balance Loan Losses September 30, 2017 Commercial and industrial: Nonaccrual $ — $ — $ — Real estate Commercial – Mortgage: Nonaccrual 215 215 — Church – Mortgage: Nonaccrual — — — Total impaired loans $ 215 $ 215 $ — December 31, 2016 Commercial and industrial: Nonaccrual $ — $ — $ — Real estate Commercial – Mortgage: Nonaccrual 245 245 — Church – Mortgage: Nonaccrual — — — Total impaired loans $ 245 $ 245 $ — the allowance for loancredit losses from(“ACL”) by category for the periods ended March 31, 2022 and December 31, 2016 to September 30, 20172021 is as follows: December 31, Charge- September 30, (In thousands) 2016 Offs Recoveries Provision 2017 Commercial and industrial $ 3,261 $ — $ 27 $ (61 ) $ 3,227 Real estate Commercial: Mortgage 1,662 — — (160 ) 1,502 Construction 47 — — 54 101 Church, church-related: Mortgage 4,027 — — 20 4,047 Construction 85 — — (26 ) 59 Industrial Revenue Bonds 101 — — (37 ) 64 Other 992 — — 210 1,202 Total $ 10,175 $ — $ 27 $ — $ 10,202 (In thousands) C&I CRE Faith-based
CREConstruction Total Balance at December 31, 2020 $ 4,635 $ 1,175 $ 5,717 $ 417 $ 11,944 Provision for (release of) credit losses 387 (144) (48) (125) 70 Recoveries 12 — 15 — 27 Balance at December 31, 2021 $ 5,034 $ 1,031 $ 5,684 $ 292 $ 12,041 Provision for (release of) credit losses 245 (55) 180 (5) 365 Recoveries — — — — — Balance at March 31, 2022 $ 5,279 $ 976 $ 5,864 $ 287 $ 12,406 A summary ofactivityperiod ended March 31, 2022 was primarily due to the increase in the allowance for loan losses from December 31, 2015 to September 30, 2016 is as follows: December 31, Charge- September 30, (In thousands) 2015 Offs Recoveries Provision 2016 Commercial and industrial $ 3,083 $ — $ 38 $ 217 $ 3,338 Real estate Commercial: Mortgage 2,803 — — (1,179 ) 1,624 Construction 9 — — 93 102 Church, church-related: Mortgage 4,082 — — 48 4,130 Construction 217 — — (102 ) 115 Industrial Revenue Bonds 320 — — (47 ) 273 Other 1,121 — — (30 ) 1,091 Total $ 11,635 $ — $ 38 $ (1,000 ) $ 10,673 -12-At September 30, 2017A release of credit losses of $135,000 was recorded during the three months ended March 31, 2022 primarily due to a decrease in unfunded commitments. An allowance for unfunded commitments of $232,000 and $367,000 had been recorded at March 31, 2022 and December 31, 2016, no amounts have been accrued for any estimated losses for these instruments.The balanceAt March 31, 2022, the balances of unused loan commitments, standby and commercial letters of credit were $91,117,000, $13,841,000,$200,547,000, $12,297,000, and $3,184,000 at September 30, 2017.$1,208,000, respectively. Since some of the financial instruments may expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. 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. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of the credit, is based on management’s credit evaluation of the borrower. Collateral held varies, but is generally accounts receivable, inventory, residential or income-producing commercial property or equipment. In the event of nonperformance, the Company or its subsidiaries may obtain and liquidate the collateral to recover amounts paid under guarantees on these financial instruments.The following table summarizes contractual cash obligations of the Company related to operating lease commitments and time deposits at September 30, 2017: Amount of Commitment Expiration per Period Less than 1-3 3-5 Over 5 (In thousands) Total 1 Year Years Years Years Operating lease commitments $ 6,798 $ 1,498 $ 2,562 $ 2,240 $ 498 Time deposits 52,800 48,161 3,034 1,605 — Total $ 59,598 $ 49,659 $ 5,596 $ 3,845 $ 498 The Company and its subsidiaries are involved in various pending legal actions and proceedings in which claims for damages are asserted. Management, after discussion with legal counsel, believes the ultimate resolution of these legal actions and proceedings will not have a material effect upon the Company’s consolidated financial position or results of operations.stock appreciation rights (“SARs”),SARs, restricted stock, restricted stock units and performance awards. The Company issuesmay issue shares out of treasury stock for these awards. During the ninethree months ended September 30, 2017, 23,135March 31, 2022, 40,462 restricted shares, 57,542 performance-based restricted shares, and 0 SARs were granted under the Omnibus Plan. shares granted prior to April 16, 2013 are amortized to expense over a three-year vesting period. Beginning on April 16, 2013, restricted shares granted to Company employees are amortized to expense over a three-year cliff vesting period whereas restrictedperiod. 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.September 30, 2017,March 31, 2022, the total unrecognized compensation expense related to non-vested restricted shares was $1,781,000,$2,625,000, and the related weighted-average period over which it is expected to be recognized is approximately 0.81.01 years.-13-stock: Nine Months Ended September 30, 2017 Shares Fair Value Balance at December 31, 2016 73,840 $ 51.03 Granted 23,135 65.36 Vested (26,545 ) 52.34 Balance at September 30, 2017 70,430 $ 55.24 Three Months Ended
March 31, 2022Shares Fair Value Balance at December 31, 2021 165,553 $ 44.81 Granted 40,462 39.45 Vested (21,836) 49.09 Balance at March 31, 2022 184,179 $ 43.13 On February 2, 2017, theperformance basedperformance-based restricted stock (“PBRS”) awards which are contingent upon the Company’s achievement of pre-established financial goals over the period from January 1, 2017 through December 31, 2019. The PBRS awardsa three-year cliff vest on the three-year anniversaryperiod. The number of their grant date at levels rangingshares issued ranges from 0% to 150% of the target opportunity based on the actual achievement of financial goals for the three-year performance period.Three Months Ended
March 31, 2022Shares Fair Value Balance at December 31, 2021 116,543 $ 46.79 Granted 57,542 39.58 Vested (33,668) 49.09 Balance at March 31, 2022 140,417 $ 43.20 target number of PBRS shares granted was 23,038 with a grant date fair value of $65.12 per share. The 2017 expense related to this grant is currently estimated to be $458,000 and isthat vested during the three months ended March 31, 2022 were based on the grant date fair valueCompany's achievement of 52.9% of target financial goals, resulting in the issuance of 17,810 shares of common stock. The outstanding PBRS at March 31, 2022 will vest at scheduled vesting dates and the achievementactual number of 100%shares of common stock issued will range from 0% to 150% of the target financial goals. The estimated expense for 2017 and each future period throughopportunity based on the vesting date is subject to prospective adjustment based upon changes in the expectedactual achievement of financial goals for the financial goals.vest over a three-year period, with one-third ofgranted and no expense recognized during the shares vesting and becoming exercisable each year on the anniversary date of the grant, and they expire 10 years from the original grant date. As of September 30, 2017, all compensation expense has been recognized and all granted SARs are vested.three months ended March 31, 2022. Following is a summary of the activity of the Company’s SARs program for the nine-month periodthree months ended September 30, 2017: Weighted- Average Aggregate Average Remaining Intrinsic Exercise Contractual Value Shares Price Term Years (In thousands) Outstanding at December 31, 2016 237,468 $ 38.22 5.73 $ 3,201 Exercised (15,547 ) 40.60 Outstanding at September 30, 2017 221,921 $ 38.05 4.45 $ 5,634 Exercisable at September 30, 2017 221,921 $ 38.05 4.45 $ 5,634 Shares Weighted-
Average
Exercise
PriceAverage
Remaining
Contractual
Term YearsBalance at December 31, 2021 117,089 $ 34.91 1.21 $ 741 Exercised (23,976) 27.78 — — Exercisable at March 31, 2022 93,113 $ 36.75 1.16 $ 313 most of itseligible 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 Company accrues and makes contributions designed to fund normal service costs on a current basis using the projected unit credit with service proration method to amortize prior service costs arising from improvements in pension benefits and qualifying service prior to the establishment of the plan over a period of approximately 30 years. Disclosure information is based on a measurement date of December 31 of the corresponding year. The following table represents the components of the net periodic pension costs: Estimated Actual (In thousands) 2017 2016 Service cost – benefits earned during the year $ 3,733 $ 3,559 Interest cost on projected benefit obligations 3,621 3,505 Expected return on plan assets (4,681 ) (4,734 ) Net amortization and deferral 1,382 1,259 Net periodic pension cost $ 4,055 $ 3,589 Pension costs(In thousands) Actual 2021 Service cost – benefits earned during the year $ — $ 1,002 Interest cost on projected benefit obligations 3,290 3,076 Expected return on plan assets (5,860) (6,310) Net amortization — 393 Net periodic pension benefit $ (2,570) $ (1,839) to expense were $1,033,000 and $965,000a net periodic benefit of $618,000 for the three-month periodsperiod ended September 30, 2017March 31, 2022, and 2016, respectively, and totaled $3,070,000 and $2,724,000net periodic pension cost of $273,000 for the nine-month periodsthree-month period ended September 30, 2017 and 2016, respectively.March 31, 2021. Pension costs increased in 2017decreased during the three-month period ended March 31, 2022 due to a decrease in the discount rate and expected return on plan assets assumptions and the usePlan being frozen as of the updated mortality tables.February 28, 2021. The Company made no contributioncontributions to the planPlan during the nine-monththree-month period ended September 30, 2017March 31, 2022 and is evaluating the amount of additional contributions, if any, infor the remainder of 2017.-14-
2022.20162021 and an estimate for 2017: Estimated Actual (In thousands) 2017 2016 Service cost – benefits earned during the year $ 143 $ 133 Interest cost on projected benefit obligation 361 367 Net amortization 323 295 Net periodic pension cost $ 827 $ 795 Pension2022:(In thousands) Service cost – benefits earned during the year $ — $ 147 Interest cost on projected benefit obligation 318 291 Net amortization 108 203 Net periodic pension cost $ 426 $ 641 $210,000$107,000 and $201,000$160,000 for the three-month periods ended September 30, 2017March 31, 2022 and 2016, respectively, and were $628,000 and $604,000 for the nine-month periods ended September 30, 2017 and 2016,2021, respectively.As of September 30, 2017, the Company’s unrecognized tax benefits were approximately $1,840,000, of which $1,409,000 would, if recognized, affect the Company’srate. As of Decemberrate was 19.6% and 17.7% for the three-month periods ended March 31, 2016, the Company’s unrecognized tax benefits were approximately $1,623,000, of which $1,225,000 would, if recognized, affect the Company’s2022 and 2021, respectively. The effective tax rate. Duringrate for all periods differs from the next 12 months, the Company may realize a reductionstatutory rate of its unrecognized tax benefits of approximately $226,00021% primarily due to the lapse of federaltax-exempt interest received from municipal bonds and state statutes of limitations.Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company had $159,000 and $108,000 of gross interest accrued as of September 30, 2017 and December 31, 2016, respectively. There were no penalties for unrecognized tax benefits accrued at September 30, 2017 and December 31, 2016.The Company is subject to income taxincrease in the U.S. federal jurisdiction and numerous state jurisdictions. U.S. federal incomeeffective tax returns for tax years 2014 through 2016 remain subject to examination by the Internal Revenue Service. In addition, the Company is subject to state tax examinations for the tax years 2013 through 2016.On January 1, 2017, the Company adopted Accounting Standards Update (“ASU”) No. 2016-09 – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The adoption of this new accounting pronouncement resulted in a $0 and $278,000 reduction in income tax expenserate for the three-month and nine-month periods ending September 30, 2017, respectively. September 30, 2017 Gross Gross Amortized Unrealized Unrealized (In thousands) Cost Gains Losses Fair Value State and political subdivisions $ 406,833 $ 11,086 $ 924 $ 416,995 U.S. government agencies 32,241 — 409 31,832 Certificates of deposit 8,241 — — 8,241 Total $ 447,315 $ 11,086 $ 1,333 $ 457,068 -15-March 31, 2022 (In thousands) Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
ValueState and political subdivisions $ 347,450 $ 2,417 $ 10,543 $ 339,324 Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 205,522 — 13,763 191,759 Corporate bonds 96,516 — 5,321 91,195 U.S. treasury bonds 99,455 132 — 99,587 Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 53,983 — 1,238 52,745 Total $ 802,926 $ 2,549 $ 30,865 $ 774,610 December 31, 2016 Gross Gross Amortized Unrealized Unrealized (In thousands) Cost Gains Losses Fair Value State and political subdivisions $ 368,223 $ 5,239 $ 3,328 $ 370,134 U.S. government agencies 13,075 — 403 12,672 Certificates of deposit 7,746 — — 7,746 Total $ 389,044 $ 5,239 $ 3,731 $ 390,552 December 31, 2021 (In thousands) Amortized
CostGross
Unrealized
GainsGross
Unrealized
LossesFair Value State and political subdivisions $ 359,187 $ 12,931 $ 990 $ 371,128 Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 170,711 135 2,200 168,646 Corporate bonds 84,538 72 272 84,338 Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 49,835 — 494 49,341 Total $ 664,271 $ 13,138 $ 3,956 $ 673,453 September 30, 2017 Less than 12 months 12 months or more Total Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) Fair Value Losses Fair Value Losses Fair Value Losses State and political subdivisions $ 33,567 $ 336 $ 16,288 $ 588 $ 49,855 $ 924 U.S. government agencies 29,162 338 2,670 71 31,832 409 Certificates of deposit — — — — — — Total $ 62,729 $ 674 $ 18,958 $ 659 $ 81,687 $ 1,333 December 31, 2016 Less than 12 months 12 months or more Total Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) Fair Value Losses Fair Value Losses Fair Value Losses State and political subdivisions $ 140,384 $ 3,328 $ — $ — $ 140,384 $ 3,328 U.S. government agencies 12,672 403 — — 12,672 403 Certificates of deposit — — — — — — Total $ 153,056 $ 3,731 $ — $ — $ 153,056 $ 3,731 March 31, 2022 Less than 12 months 12 months or more Total (In thousands) Estimated
Fair Value Unrealized
Losses Estimated
Fair ValueUnrealized
Losses Estimated
Fair Value Unrealized
LossesState and political subdivisions $ 127,246 $ 10,543 $ — $ — $ 127,246 $ 10,543 Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 175,387 11,937 16,373 1,826 191,760 13,763 Corporate Bonds 86,195 5,321 — — 86,195 5,321 Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 52,744 1,238 — — 52,744 1,238 Total $ 441,572 $ 29,039 $ 16,373 $ 1,826 $ 457,945 $ 30,865 December 31, 2021 Less than 12 months 12 months or more Total (In thousands) Estimated
Fair Value Unrealized
Losses Estimated
Fair ValueUnrealized
Losses Estimated
Fair Value Unrealized
LossesState and political subdivisions $ 60,083 $ 990 $ — $ — $ 60,083 $ 990 Mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 163,652 2,200 — — 163,652 2,200 Corporate Bonds 55,120 272 — — 55,120 272 Asset backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises 49,341 494 — — 49,341 494 Total $ 328,196 $ 3,956 $ — $ — $ 328,196 $ 3,956 44180 securities, or 12% of the total (1349% (4 greater than 12 months), in an unrealized loss position as of September 30, 2017.March 31, 2022. The unrealized losses at March 31, 2022 were primarily attributable to changes in market interest rates after the securities were purchased. There were 108101 securities, or 31% of the total (none28% (0 greater than 12 months), in an unrealized loss position as of December 31, 2016. All unrealized losses were reviewed to determine whether the losses were other than temporary. Management believes that all unrealized losses are temporary since they were market driven,2021. At March 31, 2022 and it is more likely than not thatDecember 31, 2021, the Company willhad not be required to sell prior to recovery of the amortized basis. September 30, 2017 (In thousands) Amortized Cost Fair Value Due in 1 year or less $ 22,366 $ 22,562 Due after 1 year through 5 years 56,315 57,476 Due after 5 years through 10 years 237,366 245,720 Due after 10 years 131,268 131,310 Total $ 447,315 $ 457,068 There were no sales of investment securities classified as available for sale for the three months ended September 30, 2017 or 2016. March 31, 2022 (In thousands) Amortized Cost Fair Value Due in 1 year or less $ 20,878 $ 21,011 Due after 1 year through 5 years 237,759 238,756 Due after 5 years through 10 years 229,359 222,124 Due after 10 years 314,930 292,719 Total $ 802,926 $ 774,610 available for saleavailable-for-sale were $0 and $21,491,000 for the nine months ended September 30, 2017 and 2016, respectively. There were no gross realized gains$2,991,000 for the three months ended September 30, 2017 or 2016.March 31, 2022 and 2021, respectively. Gross realized gains realized were $0 and $387,000$48 for the ninethree months ended September 30, 2017March 31, 2022 and 2016,2021, respectively. There was one security totaling $3,750,000were no securities pledged to secure public deposits and for other purposes at September 30, 2017.-16- September 30, 2017 December 31, 2016 Carrying Carrying (In thousands) Amount Fair Value Amount Fair Value Balance sheet assets: Cash and cash equivalents $ 242,098 $ 242,098 $ 266,743 $ 266,743 Investment securities 457,068 457,068 390,552 390,552 Loans, net 647,888 650,593 654,691 652,028 Accrued interest receivable 6,267 6,267 6,543 6,543 Total $ 1,353,321 $ 1,356,026 $ 1,318,529 $ 1,315,866 Balance sheet liabilities: Deposits $ 609,230 $ 609,199 $ 621,961 $ 622,173 Accounts and drafts payable 687,233 687,233 642,287 642,287 Accrued interest payable 47 47 46 46 Total $ 1,296,510 $ 1,296,479 $ 1,264,294 $ 1,264,506 March 31, 2022 December 31, 2021 (In thousands) Carrying
AmountFair Value Carrying
AmountFair Value Balance sheet assets: Cash and cash equivalents $ 191,449 $ 191,449 $ 514,928 $ 514,928 Investment securities 774,610 774,610 673,453 673,453 Loans, net 964,796 961,547 948,526 948,701 Accrued interest receivable 7,302 7,302 6,799 6,799 Total $ 1,938,157 $ 1,934,908 $ 2,143,706 $ 2,143,881 Balance sheet liabilities: Deposits $ 1,176,935 $ 1,176,935 $ 1,221,503 $ 1,221,503 Accounts and drafts payable 989,733 989,733 1,050,396 1,050,396 Accrued interest payable 22 22 16 16 Total $ 2,166,690 $ 2,166,690 $ 2,271,915 $ 2,271,915 –- The carrying amount approximates fair value.–- The fair value is measured on a recurring basis using Level 2 valuations. Refer to Note 11, “Investment in Securities,” for fair value and unrealized gains and losses by investment type.–- The fair value is estimated using present values of future cash flows discounted at risk-adjusted interest rates for each loan category designated by management and is therefore a Level 3 valuation. Management believes that the risk factor embedded in the interest rates along with the allowance for loancredit losses result in a fair valuation.Impaired loans are valued using the fair value of the collateral which is based upon an observable market price or a current appraised value and therefore, the fair value is a nonrecurring Level 3 valuation.–- The carrying amount approximates fair value.–- The fair value of demand deposits, savings deposits and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities and therefore, is a Level 2 valuation. The fair value estimates above do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market or the benefit derived from the customer relationship inherent in existing deposits.–- The carrying amount approximates fair value.–Payable - The carrying amount approximates fair value.For the Three Months Ended March 31, (In thousands) 2022 2021 Fee revenue and other income In-scope of FASB ASC 606 Processing fees $ 19,036 $ 18,375 Financial fees 10,532 6,997 Information services payment and processing revenue 29,568 25,372 Bank service fees 429 337 Fee revenue (in-scope of FASB ASC 606) 29,997 25,709 Other income (out-of-scope of FASB ASC 606) 433 466 Total fee revenue and other income $ 30,430 $ 26,175 (In thousands) March 31,
2022Lease payments due Less than 1 year $ 1,596 1-2 years 664 2-3 years 547 3-4 years 557 4-5 years 537 Over 5 years 1,365 Total undiscounted cash flows 5,266 Discount on cash flows 750 Total lease liability $ 4,516 transfers between Levelssale and leaseback transactions, leveraged leases, or lease transactions with related parties during the three months ended March 31, 2022. At March 31, 2022, the Company has 1 lease that has not yet commenced, but is expected to create approximately $6,800,000 of additional lease liabilities and 2 of the fair value hierarchyright-of-use assets for the nine months ended September 30, 2017Company. This lease is a 10-year lease and 2016. No financial instruments are measured using Level 3 inputs for the nine months ended September 30, 2017 and 2016.will commence in June 2022.1315 – Subsequent EventsOn October 24, 2017,boardunaudited consolidated financial statements from being misleading.ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSBoston, Massachusetts, Greenville, South Carolina, Wellington, Kansas, Jacksonville, Florida, Breda, Netherlands, Basingstoke, United Kingdom, and Breda, Netherlands.Singapore. The Company’s services include freight invoice rating, payment processing, auditing, and the generation of accounting and transportation information. Cass also processes and pays energy invoices, which include electricity and gas as well as environmentalwaste and telecommunications expenseexpenses, and is a provider of telecom expense management solutions. Cass extracts, stores,solutions include a B2B payment platform for clients that require an agile fintech partner. Additionally, the Company offers an on-line platform to provide generosity services for faith-based and presents information from transportation, energy, telecommunication and environmental invoices, assisting its customers’ transportation, energy, environmental and information technology managers in making decisions that will enable them to improve operating performance.non-profit organizations. The Company receives data from multiple sources, electronic and otherwise, and processes the data to accomplish the specific operating requirements of its customers. It then provides the data in a central repository for access and archiving. The data is finally transformed into information through the Company’s databases that allow client interaction as required and provide Internet-based tools for analytical processing. The Company also, through Cass Commercial Bank, its St. Louis, Missouri-based bank subsidiary, provides banking services in the St. Louis metropolitan, Orange County, California, Colorado Springs, Colorado, and other selected cities in the United States. In addition to supporting“Bank,” supports the Company’s payment operations, theoperations. The Bank also provides banking services to its target markets, which include privately-owned businesses and churches and church-related ministries.Risk,”Risk” in the Company’s 20162021 Annual Report on Form 10-K, a decline in the general level of interest rates can have a negative impact on net interest income and conversely, a rise in the general level of interest rates can have a positive impact on net interest income.(“FASB”) Accounting Standards Codification (“ASC”).Codification. In preparing the consolidated financial statements, management makes estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. These estimates have been generally accurate in the past, have been consistent and have not required any material changes. There can be no assurances that actual results will not differ from those estimates. CertainThe accounting policiespolicy that requirerequires significant management estimates and areis deemed critical to the Company’s results of operations or financial position havehas been discussed with the Audit Committee of the Board of Directors and areis described below.-18-Loan Losses.Credit Losses. The Company performs periodic and systematic detailed reviews of its loan portfolio to assess overall collectability. The level of the allowance for loan losses reflectsdetermine management’s estimate of the collectability of the loan portfolio.lifetime expected credit losses. Although these estimates are based on established methodologies for determining allowance requirements, actual results can differ significantly from estimated results. These policies affect both segments of the Company. The impact and associated risks related to these policies on the Company’s business operations are discussed in the “Provision and Allowance for Loan Losses”Credit Losses and Allowance for Unfunded Commitments” section of this report. The Company’s estimates have been materially accurate in the past, and accordingly, the Company expects to continue to utilize the present processes.Income Taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns. Judgment is required in addressing the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns such as the realization of deferred tax assets or changes in tax laws or interpretations thereof. In addition, the Company is subject to the continuous examination of its income tax returns by the Internal Revenue Service and other taxing authorities. In accordance with FASB ASC 740, “Income Taxes,” the Company has unrecognized tax benefits related to tax positions taken or expected to be taken. See Note 10 to the unaudited consolidated financial statements contained herein.Pension Plans.The amounts recognized in the unaudited consolidated financial statements related to pension plans are determined from actuarial valuations. Inherent in these valuations are assumptions, including expected return on plan assets, discount rates at which the liabilities could be settled at December 31, 2016, rate of increase in future compensation levels and mortality rates. These assumptions are updated annually and are disclosed in Item 8, Note 10 to the consolidated financial statements filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Pursuant to FASB ASC 715, “Compensation – Retirement Benefits,” the Company has recognized the funded status of its defined benefit postretirement plan in its balance sheet and has recognized changes in that funded status through comprehensive income. The funded status is measured as the difference between the fair value of the plan assets and the projected benefit obligation as of the date of its fiscal year-end.September 30, 2017March 31, 2022 (“ThirdFirst Quarter of 2017”2022”) compared to the three-month period ended September 30, 2016March 31, 2021 (“ThirdFirst Quarter of 2016”) and the nine-month period ended September 30, 2017 (“Nine Months Ended 2017”) compared to the nine-month period ended September 30, 2016 (“Nine Months Ended 2016”2021”). The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and related notes and with the statistical information and financial data appearing in this report, as well as in the Company’s 20162021 Annual Report on Form 10-K. Results of operations for the ThirdFirst Quarter of 20172022 are not necessarily indicative of the results to be attained for any other period.results:Third Quarter of Nine Months Ended % % (In thousands except per share data) 2017 2016 Change 2017 2016 Change Net income $ 6,863 $ 6,222 10.3 $ 19,683 $ 17,924 9.8 Diluted earnings per share $ .61 $ .55 10.9 $ 1.74 $ 1.58 10.1 Return on average assets 1.70 % 1.59 % — 1.70 % 1.60 % — Return on average equity 12.34 % 11.84 % — 12.27 % 11.56 % — -19-
results:(In thousands except per share data) First Quarter of 2022 2021 %
ChangeNet income $ 8,258 $ 7,071 16.8 % Diluted earnings per share $ .60 $ .49 22.4 % Return on average assets 1.32 % 1.31 % — Return on average equity 14.21 % 11.09 % — paymentprocessing and processingfinancial fees. As the Company provides its processing and payment services, it is compensated by service fees which are typically calculated on a per-item basis and by the accounts and drafts payable balances generated in the payment process which can be used to and other income were as follows: Third Quarter of Nine Months Ended % % (In thousands) 2017 2016 Change 2017 2016 Change Transportation invoice volume 8,962 8,898 0.7 % 26,585 25,786 3.1 % Transportation invoice dollar volume $ 6,162,957 $ 5,864,716 5.1 % $ 18,271,178 $ 17,107,723 6.8 % Expense management transaction volume* 6,935 6,034 14.9 % 20,477 16,989 20.5 % Expense management dollar volume* $ 3,391,672 $ 3,301,049 2.7 % $ 9,647,573 $ 8,882,181 8.6 % Payment and processing revenue $ 23,761 $ 21,737 9.3 % $ 69,332 $ 62,162 11.5 % *Includes energy, telecom and waste Third(In thousands) First Quarter of 2022 2021 %
ChangeTransportation invoice volume 8,958 8,787 1.9 % Transportation invoice dollar volume $ 10,855,180 $ 7,904,639 37.3 % Facility-related transaction volume* 6,640 6,996 (5.1) % Facility-related dollar volume* $ 4,643,942 $ 3,717,428 24.9 % Average payments in advance of funding $ 279,479 $ 177,295 57.6 % Processing fees $ 19,036 $ 18,375 3.6 % Financial fees $ 10,532 $ 6,997 50.5 % 20172022 compared to ThirdFirst Quarter of 2016:In2021: sector, invoice volume and an increase in fees generated by our parcel payment services, partially offset by the decrease in facility-related transaction volume of 5.1%. Financial fee revenue increased 50.5%, attributable to the 37.3% and 24.9% increases in transportation and facility-related dollar volumes, respectively. The increase in dollar volumes contributed to a 57.6% increase in average payments in advance of funding, which is a significant driver of our financial fee revenue. The dramatic increase in transportation invoice dollar volume was up 0.7%driven by inflationary pressures, supply chain disruptions, fuel surcharges and scarcity in carrier supply, among other factors. Facility-related invoices decreased 5% while dollar volume rose 5.1%increased 25%. The expense management group had 14.9% growth in transaction volume. New customer wins, combined with increased volume from current accounts, fueled the increase. Expense management dollar volume was also up 2.7% for the quarter.payment and processing revenue of 9.3% wasfacility-related dollar volume is primarily attributabledue to two factors: continued growthfewer pandemic-related restrictions in the customer base of each marketrestaurant, retail, and the development, deployment, and expansion of new revenue-generating services.There were no gains on sales of securitieshospitality sectors, creating higher utility usage in either the Third Quarter of 2017 or 2016.Nine Months Ended 2017 comparedaddition to Nine Months Ended 2016:Transportation invoice and dollar volumes, as well as expense management transaction and dollar volumes, increased for the same reasons as the Third Quarter.The increase in payment and processing revenue of 11.5% was primarily attributable to two factors: continued growth in the customer base of each market and the development, deployment, and expansion of new revenue-generating services.There were no gains on sales of securities in the Nine Months Ended 2017, compared to $387,000 in the Nine Months Ended 2016. Third Quarter of Nine Months Ended % % (In thousands) 2017 2016 Change 2017 2016 Change Average earnings assets $ 1,395,025 $ 1,351,638 3.2 % $ 1,348,253 $ 1,301,280 3.6 % Average interest-bearing liabilities 393,262 428,786 (8.3 %) 388,693 426,825 (8.9 %) Net interest income* 11,513 10,842 6.2 % 33,765 32,370 4.3 % Net interest margin* 3.27 % 3.19 % 3.35 % 3.32 % Yield on earning assets* 3.44 % 3.34 % 3.50 % 3.48 % Rate on interest-bearing liabilities .58 % .47 % .52 % .48 % *Presented on a tax-equivalent basis assuming a tax rate of 35%. -20-(In thousands) First Quarter of 2022 2021 %
ChangeAverage earnings assets $ 2,122,915 $ 1,891,395 12.2 % Average interest-bearing liabilities 593,057 552,906 7.3 % Net interest income* 12,349 10,807 14.3 % Net interest margin* 2.36 % 2.32 % Yield on earning assets* 2.40 % 2.39 % Rate on interest-bearing liabilities .15 % .24 % Third20172022 compared to ThirdFirst Quarter of 2016:Third Quarter of 2017 average2021:$43,387,000,$231,520,000, or 3.2%12.2%. The overall increase in average interest-earning asset balances was primarily due to increases in the investment and loan portfolios. Average investment securities increased $319,253,000, or 86.0%, as cash provided by increases in funding sources was utilized to purchase investment securities. Average loans increased $78,629,000 as organic growth in franchise, faith-based and other commercial and industrial loansasdriven by the result of growth12.2% increase in funding sources. Components of these variances are as follows:Earning Assets.Average investment securities increased $77,815,000, or 22.4%,average interest-earning assets and average federal funds sold and other short-term investments increased $14,478,000, or 7.8%, for the Third Quarter of 2017 as compared to the Third Quarter of 2016. Interest-bearing deposits in other financial institutions decreased $25,111,000, or 19.7%, and loans decreased $22,219,000, or 3.3%, compared to the same period in the prior year.Funding Sources.Average accounts and drafts payable balances for the Third Quarter of 2017 increased $46,748,000, or 6.8%, and non-interest bearing demand deposits increased $15,244,000, or 7.9%, as compared to the Third Quarter of 2016. Total average interest-bearing liabilities for the Third Quarter of 2017 decreased by $35,524,000, or 8.3%, compared to the Third Quarter of 2016.Net interest margin and yield on earning assets both increased in the Third Quarter of 2017 compared to the Third Quarter of 2016 as a result of Federal Reserve actions which increased yield on short-term investments and led to an4 basis point increase in the Cass prime rate.Nine Months Ended 2017 compared to Nine Months Ended 2016:Nine Months Ended 2017 average earning assets increased $46,973,000, or 3.6%, compared to the same period in the prior year as the result of growth in funding sources. Components of these variances are as follows:Earning Assets.Average investment securities increased $72,045,000, or 20.8%, and other short-term investments increased $24,577,000, or 17.7%, for the Nine Months Ended 2017 as compared to the Nine Months Ended 2016. Interest-bearing deposits in other financial institutions decreased $30,251,000, or 23.4%, and loans decreased $18,364,000, or 2.7%, compared to the same period in the prior year.Funding Sources.Average accounts and drafts payable balances for the Nine Months Ended 2017 increased $55,231,000, or 8.5%, and non-interest bearing demand deposits increased $17,959,000, or 9.6%, as compared to the Nine Months Ended 2016. Total average interest-bearing liabilities for the Nine Months Ended 2017 decreased by $38,132,000, or 8.9%, compared to the Nine Months Ended 2016.Netnet interest margin and yield on earning assets both increased in the Nine Months Ended 2017 comparedfrom 2.32% to the Nine Months Ended 2016 as a result of Federal Reserve actions which increased yield on short-term investments and led to an increase in the Cass prime rate.Shareholders’Shareholders' Equity; Interest Rate and Interest Differentialonfor each category of interest-earning assets and interest-bearing liabilities, and the average yield on such categories of interest-earning assets and the average rates paid on such categories of interest-bearing liabilities for each of the periods reported.-21- Third Quarter of 2017 Third Quarter of 2016 Interest Interest Average Income/ Yield/ Average Income/ Yield/ (In thousands) Balance Expense Rate Balance Expense Rate Assets1 Earning assets Loans2, 3: Taxable $ 655,723 $ 7,178 4.34 % $ 664,705 $ 7,121 4.26 % Tax-exempt4 4,466 47 4.18 17,703 219 4.92 Investment securities5: Taxable 19,703 94 1.89 5,714 22 1.53 Tax-exempt4 406,131 4,007 3.91 342,305 3,672 4.27 Certificates of deposit 6,763 14 .82 8,339 14 .67 Interest-bearing deposits in other financial institutions 102,203 300 1.16 127,314 162 .51 Federal funds sold and other short-term investments 200,036 444 .88 185,558 137 .29 Total earning assets 1,395,025 12,084 3.44 1,351,638 11,347 3.34 Non-earning assets Cash and due from banks 12,704 12,097 Premises and equipment, net 21,256 20,773 Bank-owned life insurance 16,738 16,238 Goodwill and other intangibles 14,742 13,749 Other assets 149,266 148,734 Allowance for loan losses (10,199 ) (10,673 ) Total assets $ 1,599,532 $ 1,552,556 Liabilities and Shareholders’ Equity1 Interest-bearing liabilities Interest-bearing demand deposits $ 327,997 $ 434 .52 % $ 351,971 $ 347 .39 % Savings deposits 12,493 17 .54 19,679 24 .49 Time deposits >= $100 23,486 68 1.15 22,237 69 1.23 Other time deposits 29,286 52 .70 34,899 65 .74 Total interest-bearing liabilities 393,262 571 .58 428,786 505 .47 Non-interest bearing liabilities Demand deposits 208,932 193,688 Accounts and drafts payable 739,293 692,545 Other liabilities 37,317 28,467 Total liabilities 1,378,804 1,343,486 Shareholders’ equity 220,728 209,070 Total liabilities and shareholders’ equity $ 1,599,532 $ 1,552,556 Net interest income $ 11,513 $ 10,842 Net interest margin 3.27 % 3.19 % Interest spread 2.86 2.87 1.Balances shown are daily averages.2.For purposes of these computations, nonaccrual loans are included in the average loan amounts outstanding. Interest on nonaccrual loans is recorded when received as discussed further in Note 1 to the Company’s 2016 consolidated financial statements, filed with the Company’s 2016 Annual Report on Form 10-K.3.Interest income on loans includes net loan fees of $76,000 for both the Third Quarter of 2017 and 2016.4.Interest income is presented on a tax-equivalent basis assuming a tax rate of 35%. The tax-equivalent adjustment was approximately $1,419,000 and $1,361,000 for the Third Quarter of 2017 and 2016, respectively.5.For purposes of these computations, yields on investment securities are computed as interest income divided by the average amortized cost of the investments.-22-(In thousands) First Quarter of 2021 Average
BalanceInterest
Income/
ExpenseYield/
RateAverage
BalanceInterest
Income/
ExpenseYield/
RateInterest-earning assets Taxable $ 959,851 $ 8,777 3.71 % $ 881,222 $ 8,587 3.95 % Taxable 395,233 1,456 1.49 82,746 198 0.97 295,152 2,123 2.92 288,386 2,201 3.10 Short-term investments 472,679 216 0.19 639,041 152 0.10 Total interest-earning assets 2,122,915 12,572 2.40 1,891,395 11,138 2.39 Non-interest-earning assets Cash and due from banks 22,781 20,344 Premises and equipment, net 18,706 18,070 Bank-owned life insurance 43,167 17,920 Goodwill and other intangibles 16,772 17,598 Other assets 315,968 231,196 Allowance for credit losses (12,046) (11,956) Total assets $ 2,528,263 $ 2,184,567 Interest-bearing liabilities Interest-bearing demand deposits $ 530,491 $ 136 0.10 % $ 475,212 $ 151 0.13 % Savings deposits 17,488 2 0.05 21,800 3 0.06 Time deposits >= $100 17,928 41 0.93 24,505 83 1.37 Other time deposits 27,150 44 0.66 31,379 94 1.21 Total interest-bearing deposits 593,057 223 0.15 552,896 331 0.24 Short-term borrowings — — — 10 — — Total interest-bearing liabilities 593,057 223 0.15 552,906 331 0.24 Non-interest bearing liabilities Demand deposits 574,064 417,942 Accounts and drafts payable 1,088,105 898,378 Other liabilities 37,317 56,646 Total liabilities 2,292,543 1,925,872 Shareholders’ equity 235,720 258,695 Total liabilities and shareholders’ equity $ 2,528,263 $ 2,184,567 Net interest income $ 12,349 $ 10,807 Net interest margin 2.36 % 2.32 % Interest spread 2.25 2.15 Nine Months Ended 2017 Nine Months Ended 2016 Interest Interest Average Income/ Yield/ Average Income/ Yield/ (In thousands) Balance Expense Rate Balance Expense Rate Assets1 Earning assets Loans2, 3: Taxable $ 656,314 $ 21,164 4.31 % $ 661,435 $ 21,278 4.30 % Tax-exempt4 5,274 157 3.98 18,517 666 4.80 Investment securities5: Taxable 15,905 232 1.95 2,711 33 1.63 Tax-exempt4 401,903 12,100 4.03 343,052 11,104 4.32 Certificates of deposit 6,592 36 .73 7,626 36 .63 Interest-bearing deposits in other financial institutions 99,206 703 .95 129,457 484 .50 Federal funds sold and other short-term investments 163,059 894 .73 138,482 291 .28 Total earning assets 1,348,253 35,286 3.50 1,301,280 33,892 3.48 Non-earning assets Cash and due from banks 12,729 11,716 Premises and equipment, net 21,225 20,371 Bank-owned life insurance 16,615 16,110 Goodwill and other intangibles 14,408 13,851 Other assets 144,086 144,129 Allowance for loan losses (10,190 ) (10,981 ) Total assets $ 1,547,126 $ 1,496,476 Liabilities and Shareholders’ Equity1 Interest-bearing liabilities Interest-bearing demand deposits $ 317,046 $ 1,090 .46 % $ 348,221 $ 1,043 .40 % Savings deposits 17,007 62 .49 18,756 68 .48 Time deposits >= $100 23,238 195 1.12 22,425 201 1.20 Other time deposits 31,402 174 .74 37,423 210 .75 Total interest-bearing liabilities 388,693 1,521 .52 426,825 1,522 .48 Non-interest bearing liabilities Demand deposits 205,298 187,339 Accounts and drafts payable 703,912 648,681 Other liabilities 34,821 26,475 Total liabilities 1,332,724 1,289,320 Shareholders’ equity 214,402 207,156 Total liabilities and shareholders’ equity $ 1,547,126 $ 1,496,476 Net interest income $ 33,765 $ 32,370 Net interest margin 3.35 % 3.32 % Interest spread 2.98 3.00 1.Balances shown are daily averages.2.For purposes of these computations, nonaccrual loans are included in the average loan amounts outstanding. Interest on nonaccrual loans is recorded when received as discussed further in Note 1 to the Company’s 2016 consolidated financial statements, filed with the Company’s 2016 Annual Report on Form 10-K.3.Interest income on loans includes net loan fees of $319,000 and $311,000 for the Nine Months Ended 2017 and 2016, respectively.4.Interest income is presented on a tax-equivalent basis assuming a tax rate of 35%. The tax-equivalent adjustment was approximately $4,290,000 and $4,119,000 for the Nine Months Ended 2017 and 2016, respectively.5.For purposes of these computations, yields on investment securities are computed as interest income divided by the average amortized cost of the investments.-23- Third Quarter of 2017 Over Third Quarter of 2016 (In thousands) Volume Rate Total Increase (decrease) in interest income: Loans1, 2: Taxable $ (89 ) $ 146 $ 57 Tax-exempt3 (143 ) (29 ) (172 ) Investment securities: Taxable 66 6 72 Tax-exempt3 653 (318 ) 335 Certificates of deposit (4 ) 4 — Interest-bearing deposits in other financial institutions (37 ) 175 138 Federal funds sold and other short-term investments 12 295 307 Total interest income 458 279 737 Interest expense on: Interest-bearing demand deposits (25 ) 112 87 Savings deposits (9 ) 2 (7 ) Time deposits >=$100 3 (4 ) (1 ) Other time deposits (10 ) (3 ) (13 ) Total interest expense (41 ) 107 66 Net interest income $ 499 $ 172 $ 671 1. Average balances include nonaccrual loans. 2. Interest income includes net loan fees. 3. Interest income is presented on a tax-equivalent basis assuming a tax rate of 35%. Nine Months Ended 2017 Over Nine Months Ended 2016 (In thousands) Volume Rate Total Increase (decrease) in interest income: Loans1, 2: Taxable $ (178 ) $ 64 $ (114 ) Tax-exempt3 (411 ) (98 ) (509 ) Investment securities: Taxable 191 8 199 Tax-exempt3 1,799 (803 ) 996 Certificates of deposit (4 ) 4 — Interest-bearing deposits in other financial institutions (134 ) 353 219 Federal funds sold and other short-term investments 60 543 603 Total interest income 1,323 71 1,394 Interest expense on: Interest-bearing demand deposits (99 ) 146 47 Savings deposits (6 ) — (6 ) Time deposits >=$100 7 (13 ) (6 ) Other time deposits (33 ) (3 ) (36 ) Total interest expense (131 ) 130 (1 ) Net interest income $ 1,454 $ (59 ) $ 1,395 1.Average balances include nonaccrual loans.2.Interest income includes net loan fees.3.Interest income is presented on a tax-equivalent basis assuming a tax rate of 35%.(In thousands) First Quarter of 2022 Compared to First Quarter of 2021 Volume Rate Total Increase (decrease) in interest income: Taxable $ 738 $ (548) $ 190 Investment securities: Taxable 1,101 157 1,258 51 (129) (78) Short-term investments (48) 112 64 Total interest income 1,842 (408) 1,434 Interest expense on: Interest-bearing demand deposits 16 (31) (15) Savings deposits (1) — (1) Time deposits >=$100 (19) (23) (42) Other time deposits (11) (39) (50) Total interest expense (15) (93) (108) Net interest income $ 1,857 $ (315) $ 1,542 LoanCredit Losses (“ALLL”)A significant determinantand Allowance for Unfunded CommitmentsCompany’s operating results can beFirst Quarter of 2022 and 2021, respectively. The amount of the provision for loan losses. There was no(release of) credit losses is derived from the Company’s quarterly Current Expected Credit Loss (“CECL”) model. The amount of the provision for loan(release of) credit losses duringwill fluctuate as determined by these quarterly analyses. The provision for credit losses in the ThirdFirst Quarter of 2017 or2022 was primarily due to loan growth and the Thirdrelated impact in the CECL model.2016. There was no loan loss provision recorded during2022 and $17,000 in the Nine Months Ended 2017 and a negative loan loss provision of $1,000,000 was recorded during the Nine Months Ended 2016. As discussed below, the Company continually analyzes the outstanding loan portfolio based on the performance, financial condition and collateralization of the credits. Net loan recoveries were $6,000 and $1,000 during the ThirdFirst Quarter of 2017 and the Third Quarter of 2016, respectively. Net loan recoveries were $27,000 in the Nine Months Ended 2017 and $38,000 during the Nine Months Ended 2016.-24-
2021.ALLLACL was $12,406,000 at September 30, 2017 was $10,202,000 andMarch 31, 2022 compared to $12,041,000 at December 31, 2016 was $10,175,000.2021. The ratioACL represented 1.27% of ALLL to total loans outstanding at September 30, 2017 was 1.55% compared to 1.53% at December 31, 2016. Nonperforming loans were $215,000, or .03% of total loans at September 30, 2017 compared to $245,000, or .04%March 31, 2022 and 1.25% of totaloutstanding loans at December 31, 2016. This consists of one nonaccrual loan, which is also considered impaired,2021. The allowance for unfunded commitments was $232,000 at September 30, 2017. Total nonaccrual loans decreased $30,000 fromMarch 31, 2022 and $367,000 at December 31, 2016 to September 30, 2017.ALLLACL has been established and is maintained to absorb reasonably estimated and probableestimate the lifetime expected credit losses in the loan portfolio. An ongoing assessment is performed to determine if the balance is adequate. Charges or credits are made to expense to cover any deficiency or reduce any excess, as required. The current methodology consists of two components: 1) estimated credit lossesbased on individually evaluated loans that are determined to be impaired in accordance with FASB ASC 310 “Allowance for Credit Losses,” and 2) estimated credit losses inherentchanges in the remainder of theeconomic forecast, qualitative risk factors, loan portfolio in accordance with FASB ASC 450, “Contingencies.” Estimated credit losses is an estimate of the current amount of loans that is probable the Company will be unable to collect according to the original terms. For the remainder of the portfolio, the Company groups loans with similar risk characteristics into eight segments and applies historical loss rates to each segment based on a five fiscal-year look-back period. In addition, qualitative factors including credit concentration risk, national and local economic conditions, nature and volume of loan portfolio, legal and regulatory factors, downturns in specific industries including losses in collateral value, trends in credit quality at the Company and in the banking industry and trends in risk-rating agencies are also considered.analysisanalyses to evaluate the overall reasonableness of the ALLLACL compared to its peers and required levels of regulatory capital. Federal and state regulatory agencies review the Company’s methodology for maintaining the ALLL.ACL. These agencies may require the Company to adjust the ALLLACL based on their judgments and interpretations about information available to them at the time of their examinations.Asset QualityCompany’sCompany's provision for loan(release of) credit losses and analysis of the ALLL:ACL:Third Quarter of Nine Months Ended (In thousands) 2017 2016 2017 2016 Allowance at beginning of period $ 10,196 $ 10,672 $ 10,175 $ 11,635 Provision charged to expense — — — (1,000 ) Loans charged off — — — — Recoveries on loans previously charged off 6 1 27 38 Net recoveries 6 1 27 38 Allowance at end of period $ 10,202 $ 10,673 $ 10,202 $ 10,673 Loans outstanding: Average $ 660,189 $ 682,408 $ 661,588 $ 679,952 September 30 658,090 684,874 658,090 684,874 Ratio of ALLL to loans outstanding: Average 1.55 % 1.56 % 1.54 % 1.57 % September 30 1.55 % 1.56 % 1.55 % 1.56 % Impaired loans: Nonaccrual loans $ 215 $ 340 $ 215 $ 340 Loans past due 90 days or more — 984 — 984 Troubled debt restructurings — — — — Total impaired loans $ 215 $ 1,324 $ 215 $ 1,324 Foreclosed assets $ — — $ — — Impaired loans as percentage of average loans .03 % .19 % .03 % .19 % First Quarter of (In thousands) 2022 2021 Allowance for credit losses at beginning of period $ 12,041 $ 11,944 Provision for (release of) credit losses 365 (240) Loans charged off — — Recoveries on loans previously charged off — 17 Net recoveries — 17 Allowance for credit losses at end of period $ 12,406 $ 11,721 Allowance for unfunded commitments at beginning of Period $ 367 $ 567 Release of credit losses (135) (360) Allowance for unfunded commitments at end of period $ 232 $ 207 Loans outstanding: Average $ 959,851 $ 881,222 March 31 977,203 888,575 Ratio of ACL to loans outstanding: Average 1.29 % 1.33 % March 31 1.27 % 1.32 % The Bank had no property carried as other real estate owned as of September 30, 2017 or December 31, 2016.-25-ThirdFirst Quarter of 20172022 were up 6.3%11.6%, or $1,491,000,$3,303,000, compared to the ThirdFirst Quarter of 2016 and were up $4,735,000 for2021. The following table details the Nine Months Ended 2017 comparedcomponents of operating expenses:(In thousands) First Quarter of 2022 2021 Personnel $ 24,718 $ 22,526 Occupancy 915 947 Equipment 1,711 1,675 Amortization of intangible assets 135 215 Other operating 4,349 3,162 Total operating expense $ 31,828 $ 28,525 Nine Months Ended 2016.Personnel expense forCompany's financial performance, an increase in the Third Quarter of 2017 increased $1,104,000 compared to the Third Quarter of 2016Company's 401(k) match during March 2021 and increased $3,117,000 to $57,384,000 for the Nine Months Ended 2017 compared to the Nine Months Ended 2016 due to strategic investment in staff andvarious technology to win and support new business, annual merit increases, and increased retirementinitiatives. These factors were partially offset by the freezing of the benefits of the pension plan costs.Equipment expense forduring the ThirdFirst Quarter of 2017 increased $118,000, or 10.5%, compared to the Third Quarter2021, which resulted in a decrease of 2016 and increased $457,000, or 13.9%, for the Nine Months Ended 2017 from the Nine Months Ended 2016. This increase was the resultpension expense of the continued strategic investment in technology.Income tax expense for the Third Quarter of 2017 increased $541,000 compared to the Third Quarter of 2016 and increased $399,000 for the Nine Months Ended 2017 compared to the Nine Months Ended 2016. The effective tax rate was 25.9% and 23.0% for the Third Quarters of 2017 and 2016, respectively, and was 24.3% and 24.8% for the Nine Months Ended 2017 and 2016, respectively. $890,000.Third Quarter of 2017 tax rateother operating expenses was the result of higher credits for investmentprimarily due to an increase in technology recorded last year. The decreasebusiness development and other promotional activities in the Nine Months Ended 2017 tax rate was the result of the adoption of ASU No. 2016-09 – Stock Compensation (Topic 718): Improvementsaddition to Employee Share-Based Payment Accounting.September 30, 2017March 31, 2022 were $1,556,750,000, an increase$2,422,043,000, a decrease of $51,911,000,$132,858,000, or 3.4%5.2%, from December 31, 2016.2021. The most significant changes in asset balances during this period were increases of $66,516,000 in investment securities and payments in excess of funding of $14,455,000. This was partially offset byCompany experienced a decrease in cash and cash equivalents of $24,645,000. Changes$323,479,000, or 62.8%. The change in cash and cash equivalents reflectreflects the Company’s daily liquidity position and areis primarily affected by the changes in the other asset balances and changes in deposit andfunding sources, mainly accounts and drafts payable balances.September 30, 2017March 31, 2022 were $1,332,795,000, an increase$2,204,965,000, a decrease of $35,991,000,$104,138,000, or 2.8%4.5%, from December 31, 2016.2021. Total deposits at March 31, 2022 were $1,176,935,000, a decrease of $44,568,000, or 3.6%, from December 31, 2021. Accounts and drafts payable at September 30, 2017March 31, 2022 were $687,233,000, an increase$989,733,000, a decrease of $44,946,000,$60,663,000, or 7.0%5.8%, from December 31, 2016. Total deposits decreased $12,731,000, or 2.0%, from December 31, 2016. Total shareholders’ equity at September 30, 2017 was $223,955,000, a $15,920,000, or 7.7%, increase from December 31, 2016.The increase in total$15,920,000 resulted primarily from$28,122,000 as a result of rising interest rates and the result on the fair value of existing investment securities, share repurchases of $5,086,000, and dividends paid of $3,832,000. These decreases were partially offset by net income of $19,683,000 and a decrease of $5,326,000 in accumulated other comprehensive loss. These were offset by dividends paid of $7,725,000 and an increase in common shares in treasury of $1,961,000 resulting from treasury stock repurchases.other short-term investments, was $242,098,000money market funds. Cash and cash equivalents totaled $191,449,000 at September 30, 2017,March 31, 2022, a decrease of $24,645,000,$323,479,000, or 9.2%62.8%, from December 31, 2016.2021. At September 30, 2017,March 31, 2022, these assets represented 15.6%7.9% of total assets. These funds are the Company’s and its subsidiaries’ primary source of liquidity to meet future expected and unexpected loan demand, depositor withdrawals or reductions in accounts and drafts payable.$457,068,000$774,610,000 at September 30, 2017,March 31, 2022, an increase of $66,516,000$101,157,000 from December 31, 2016.2021. These assets represented 29.4%32.0% of total assets at September 30, 2017. Of this total, 91% were state and political subdivision securities.March 31, 2022. Of the total portfolio, 4.9%2.7% mature in one year, or less, 12.6%30.8% mature in one to five years, and 82.5%66.5% mature in five or more years.-26-$68,000,000 at$83,000,000 in aggregate. As of March 31, 2022, the following banks: US Bank, $20,000,000; Wells Fargo Bank, $15,000,000; Frost National Bank, $10,000,000; PNC Bank, $12,000,000; UMB Bank, $5,000,000; and JPM Chase Bank, $6,000,000. The Bank also has secured lines of credit with the Federal Home Loan Bank of $211,513,000$218,049,000 collateralized by commercial mortgage loans. The Company also has secured lines of credit with UMB Bankfrom two banks up to a maximum of $50,000,000 and First Tennessee Bank of $50,000,000$150,000,000 collateralized by state and political subdivision securities. There were no amounts outstanding under any line of credit as of September 30, 2017March 31, 2022 or December 31, 2016.Company’sCompany's banking subsidiary have historically been stable, consisting of a sizable volume of core deposits related to customers that utilize other commercial products of the Bank. The accounts and drafts payable generated by the Company has also historically been a stable source of funds. The Company is part of the Certificate of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweep (“ICS”) deposit placement programs. Time deposits include $28,858,000$26,111,000 of CDARS deposits and interest-bearing demand deposits include $84,763,000$123,156,000 of ICS deposits. These programs offer the Bank’s customers the ability to maximize Federal Deposit Insurance Corporation (“FDIC”) insurance coverage. The Company uses these programs to retain or attract deposits from existing customers.$27,936,000$14,723,000 for the Nine Months Ended 2017First Quarter of 2022, compared with $25,615,000to $16,704,000 for the Nine Months ended 2016, an increaseFirst Quarter of $2,321,000.2021, a decrease of $1,981,000. Net cash flows from investing and financing activities fluctuate greatly as the Company actively manages its investment and loan portfolios and customer activity influences changes in deposit and accounts and drafts payable balances. Other causes for the changes in these account balances are discussed earlier in this report. Due to the daily fluctuations in these account balances, the analysis of changes in average balances, also discussed earlier in this report, can be more indicative of underlying activity than the period-end balances used in the statements of cash flows. Management anticipates that cash and cash equivalents, maturing investments and cash from2017,2022, which are estimated to range from $5$4 million to $7$6 million.longer-termlonger term relatively higher yielding investments and loans. If the primary source of liquidity is reduced in a low interest rate environment, a greater reliance would be placed on secondary sources of liquidity including borrowing lines, the ability of the Bank to generate deposits, and the investment portfolio to ensure overall liquidity remains at acceptable levels.-27-FDIC insured depository institutionsbanking organizations, like Cass, to meet and maintain severalmaintain:capital standards: aratio of common equity Tier 1 capital to risk-basedrisk-weighted assets of at least 4.5%, plus a 2.5% capital conservation buffer; 4.5%, a Tier 1 capital to risk-basedrisk-weighted assets of at least 6.0%, plus a 2.5% capital conservation buffer;6.0%, a total capital (that is, Tier 1 plus Tier 2 capital) to risk-basedrisk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer; andtotaladjusted average consolidated assets.leverage ratio.loancredit losses limited to a maximum of 1.25% of risk-weighted assets and, for non-advanced approaches institutions like Cass that have exercised ana one-time opt-out election regarding the treatment of Accumulated Other Comprehensive Income (“AOCI”), up to 45% of net unrealized gains on available-for-sale equity securities with readily determinable fair market values. The calculation of all types of regulatory capital is subject to deductions and adjustments specified in applicable regulations.In addition to establishing the minimumrequirements,is subject to deductions and adjustments specified in the regulations. For instance, the Basel III Capital Rules limitand the Capital Simplification Rules provide for a number of deductions from and adjustments to common equity Tier 1 capital. These include, for example, the requirement that certain deferred tax assets and significant investments in non-consolidated financial entities be deducted from Tier 1 capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5%extent that any one such category exceeds 25% of common equity Tier 1 capital to risk-weighted assets abovecapital. necessary to meet its minimum risk-based capital requirements. The capital conservation buffer requirement is being phased in beginning January 1, 2016 at 0.625% of risk-weighted assets for purposes of calculating risk-based capital ratios, all assets, including certain off-balance sheet assets, are multiplied by a risk weight factor assigned by the regulations based on the risks believed inherent in the type of asset. Higher levels of capital are required for asset categories believed to present greater risk. For example, a risk weight of 0% is assigned to cash and increasing each year until fully implemented at 2.5%U.S. government securities, a risk weight of 50% is generally assigned to prudently underwritten first lien one to four-family residential mortgages, a risk weight of 100% is assigned to commercial and consumer loans, a risk weight of 150% is assigned to certain past due loans, and a risk weight of between 0% to 600% is assigned to permissible equity interests, depending on January 1, 2019.September 30, 2017 December 31, 2016 (Dollars in thousands) Amount Ratio Amount Ratio Total capital (to risk-weighted assets) Cass Information Systems, Inc. $ 229,044 22.97 % $ 219,747 22.75 % Cass Commercial Bank 118,295 17.13 % 110,576 16.72 % Common Equity Tier I Capital (to risk-weighted assets) Cass Information Systems, Inc. $ 218,842 21.95 % $ 209,572 21.70 % Cass Commercial Bank 110,461 16.00 % 102,769 15.54 % Tier I capital (to risk-weighted assets) Cass Information Systems, Inc. $ 218,842 21.95 % $ 209,572 21.70 % Cass Commercial Bank 110,461 16.00 % 102,769 15.54 % Tier I capital (to average assets) Cass Information Systems, Inc. $ 218,842 13.80 % $ 209,572 13.83 % Cass Commercial Bank 110,461 14.90 % 102,769 13.98 % On October 24, 2017, the Company’s board of directors declared a 10% common stock dividend payable on December 15, 2017 to shareholders of record on December 5, 2017. Shareholders will receive one additional share of Cass common stock for each 10 shares of common stock owned. No fractional shares will be issued. Shareholders will receive cash for any fractional shares owned based on the share price reported by the Nasdaq Stock Market at the close of trading on December 5, 2017.Additionally, on October 24, 2017, the Company’s board of directors declared a fourth quarter cash dividend of $0.24 per share payable on December 15, 2017 to shareholders of record on December 5, 2017. The cash dividend will apply to all shares of common stock held after the 10% common stock dividend is completed. March 31, 2022 December 31, 2021 (Dollars in thousands) Amount Ratio Amount Ratio Total capital (to risk-weighted assets) Cass Information Systems, Inc. $ 240,619 13.96 % $ 240,265 14.86 % Cass Commercial Bank 179,410 16.97 % 174,614 17.21 % Common equity tier I capital (to risk-weighted assets) Cass Information Systems, Inc. $ 228,213 13.24 % $ 228,224 14.11 % Cass Commercial Bank 167,465 15.84 % 163,030 16.07 % Tier I capital (to risk-weighted assets) Cass Information Systems, Inc. $ 228,213 13.24 % $ 228,224 14.11 % Cass Commercial Bank 167,465 15.84 % 163,030 16.07 % Tier I capital (to leverage assets) Cass Information Systems, Inc. $ 228,213 9.09 % $ 228,224 9.21 % Cass Commercial Bank 167,465 11.12 % 163,030 11.05 % Company’sCompany's consolidated balance sheet reflects a net positive monetary position (monetary assets exceed monetary liabilities). During periods of inflation, the holding of a net positive monetary position will result in an overall decline in the purchasing power of a company. Management believes that replacement costs of equipment, furniture, and leasehold improvements will not materially affect operations. The rate of inflation does affect certain expenses, such as those for employee compensation, which may not be readily recoverable in the price of the Company’s services.-28-In May 2014, the FASB issued ASU No. 2014-09 – Revenue from Contracts with Customers. The ASU supersedes revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance in the FASB ASC. The core principle of theguidance isaccounting pronouncements that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance identifies specific steps that entities should apply in order to achieve this principle. Under the ASU, the amendments are effective for interim and annual periods beginning January 1, 2018 and must be applied retrospectively. The impact of the adoption of this ASU is currently being evaluated but is not expected to have a material impact on the Company’s consolidated financial statements or results of operations.In February 2016, the FASB issued ASU No. 2016-02 – Leases (ASC Topic 842). The ASU improves financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. Consistent with current Generally Accepted Accounting Principles (GAAP), the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP—which requires only capital leases to be recognized on the balance sheet—the new ASU will require both types of leases to be recognized on the balance sheet. The ASU also will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. The ASU on leases will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The impact of the adoption of this ASU is currently being evaluated but is not expected to have a material impact on the Company’s consolidated financial statements or results of operations.In June 2016, the FASB issued ASU No. 2016-13 - Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU requires measurement and recognition of expected credit losses for financial assets held. Under this standard, it will be required to hold an allowance equalapplicable to the expected life-of-loan losses oncompany and/or do not materially impact the loan portfolio. The standard is effective for fiscal periods beginning after December 15, 2019. The impact of the adoption of this ASU is currently being evaluated.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 2016,2021, the Company manages its interest rate risk through measurement techniques that include gap analysis and a simulation model. As part of the risk management process, asset/liability management policies are established and monitored by management. The policy objective is to limit the change in annualized net interest income to 15.0% from an immediate and sustained parallel change in interest rates of 200 basis points. Based on the Company’s most recent evaluation, management does not believe the Company’s risk position at September 30, 2017 has changed materially from that at December 31, 2016.% change in projected net interest income March 31, 2022 December 31, 2021 +200 basis points 10.6 % 20.6 % +100 basis points 4.9 % 10.2 % Flat rates — % — % -100 basis points (2.1) % (2.5) % CONTROLS AND PROCEDURES 13a-15e13a-15(e) and 15d-15e15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report and concluded that, as of such date, these controls and procedures were effective.ThirdFirst Quarter of 20172022 in the Company’sCompany's internal control over financial reporting identified by the Company’s principal executive officer and principal financial officer in connection with their evaluation that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended).-29-PART II.PART II. OTHER INFORMATION ITEM 1.LEGAL PROCEEDINGSThe Company is the subject of various pending or threatened legal actions and proceedings,including those that arise in the ordinary course of business. Management believes the outcome ofall such proceedings will not have a material effect on the businesses or financial conditions of theCompany or its subsidiaries.ITEM 1A.RISK FACTORSThe Company has included in Part I, Item 1A of its Annual Report on Form 10-K for the year endedDecember 31, 2016, a description of certain risks and uncertainties that could affect the Company’sbusiness, future performance or financial condition (the “Risk Factors”). There are no materialchanges to the Risk Factors as disclosed in the Company’s 2016 Annual Report on Form 10-K.ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSDuring the three months ended September 30, 2017, the Company repurchased a total of 38,042shares of its common stock pursuant to its treasury stock buyback program, as follows: Total Number Maximum of Shares Number of Purchased as Shares that Part of May Yet Be Total Publicly Purchased Number of Announced Under the Shares Average Price Plans or Plans or Period Purchased Paid per Share Programs1 Programs July 1, 2017 – — — — 500,000 July 31, 2017 August 1, 2017– August 31, 2017 13,242 $ 59.80 13,242 486,758 September 1, 2017 – September 30, 2017 24,800 $ 59.59 24,800 461,958 Total 38,042 $ 59.67 38,042 461,958 1. All repurchases made during the quarter ended September 30, 2017 were made pursuant to the treasury stock buyback program, which was authorized by the Board of Directors on October 17, 2011 and announced by the Company on October 20, 2011. The program, as modified by the Board of Directors on October 20, 2014, provides that the Company may repurchase up to an aggregate of 500,000 shares of common stock and has no expiration date. The program is periodically modified by the Board of Directors and was most recently modified on October 24, 2017 to restore the aggregate number of shares available for repurchase to 500,000.
ITEM 1. LEGAL PROCEEDINGSITEM 3.DEFAULTS UPON SENIOR SECURITIESNone.ITEM 4.MINE SAFETY DISCLOSURESNot applicable.ITEM 5.OTHER INFORMATIONPeriod Total
Number of
Shares
PurchasedAverage Price
Paid per ShareMaximum
Number of
Shares that
May Yet Be
Purchased
Under the
Plans or
ProgramsJanuary 1, 2022–January 31, 2022 44,404 $ 40.05 44,404 426,677 February 1, 2022–February 28, 2022 58,097 41.75 58,097 368,580 March 1, 2022–March 31, 2022 22,373 39.42 22,373 346,207 Total 124,874 $ 40.73 124,874 346,207 (a) None.(b)There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors implemented in the Third Quarter of 2017.-30-ITEM 6. EXHIBITS. . Exhibit 101.INS XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. Exhibit 101.SCH Inline XBRL Taxonomy Extension Schema Document. Exhibit 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. Exhibit 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. Exhibit 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. Exhibit 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. Exhibit 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). -31-CASS INFORMATION SYSTEMS, INC. DATE: November 7, 2017May 6, 2022By By /s/ Eric H. Brunngraber Eric H. Brunngraber Chairman and Chief Executive Officer (Principal Executive Officer) Eric H. BrunngraberChairman, President and Chief Executive Officer(Principal Executive Officer)DATE: November 7, 2017By/s/ P. Stephen AppelbaumP. Stephen Appelbaum
DATE: May 6, 2022By /s/ Michael J. Normile Michael J. Normile Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) -32-