Cass 2020 Shareholder Letter from Eric Brunngraber, CEO

10 March 2021

A Letter from Cass Chairman, President and Chief Executive Officer, Eric Brunngraber.

Dear Fellow Shareholders,

As we enter 2021 with renewed enthusiasm, and a great desire to place 2020 behind us, it is gratifying to reflect upon all the wonderful accomplishments we achieved during the year. Before we begin, however, a few words on COVID-19, the global pandemic, and its effects on the economy and Cass.

The pandemic, which greatly affected all of us, had a substantial impact on Cass beginning in the spring of 2020. Our first priority was the safety of our staff and customers. We immediately activated our Pandemic Response Plan which, with some effort and adjustments, allowed us to continue our daily operations and reliably serve our customers in a safe manner. We continue to operate under this plan today. The pandemic and related shutdowns affected our clients in many ways, but the net results for the year were significant declines in items and dollars processed and reduced customer loan demand. The federal PPP loan program, and the associated credit we extended to bank customers, did mitigate some of these negative effects. The final, and most consequential, issue was the drastic decline in interest rates and the related actions taken by the Federal Reserve that severely reduced our net interest margin.

Against this backdrop, we have much to be proud of. We were able to keep pace with processing volumes throughout the year in an offsite environment, develop new solutions on the fly to assist our customers, continue to invest in new technologies and services, and maintain a pipeline of new business and customers. We began and continue to reposition our balance sheet and adjust our service mix and other elements to lessen the impact of lower interest rates. Please visit the Investors section of our website to see more detail, by business unit, of many of these accomplishments. Although the negative impact of the pandemic on the activities of our clients, combined with lower interest rates, reduced revenues, and earnings from last year’s record year, we remain very profitable, liquid, and strong.

We also significantly augmented our leadership team during 2020. Martin Resch joins us in the new role of Chief Operating Officer. Matt Schuckman joins us as our first in-house General Counsel. More recently, Mike Normile has joined Cass and been named Chief Financial Officer. Steve Appelbaum, our CFO for the past 15 years, will retire later this year. Matt and Mike have both worked previously with Cass as outside counsel and external auditor and are very familiar with our staff, business, strategy, and culture. These individuals, working in concert with our current leadership team, will capably ensure the continuity of our business plan. In addition, they bring specific new talents and experiences that will enable us to move more quickly and with a greater degree of agility in the future we envision.

Looking forward, we see excellent growth potential in our markets, through both the addition of new clients and our ability to continue to develop and market new services. We also continue to explore new markets where we can add value. How does Cass create value? We provide the means to accept highly diverse inputs spanning paper, digitized documents, digital data, and data feeds in multiple formats. We turn unstructured inputs into structured and actionable information, typically around financial transactions but also including supporting data elements for auditing purposes. We support client/vendor relationships, inserting highly qualified business experts and industry specialists into the conversation. We are the trusted third party, validating pricing and contractual agreements. We are recognized by the high level of service we provide, while processing millions of these transactions and billions of dollars accurately, on time, and in a cost-effective, safe, and secure manner. We also provide payment and financing solutions in conjunction with these services and to customers of our subsidiary, Cass Commercial Bank.

I am delighted to direct you to the revamped Investor section of our website. Here you will find highlights of our recent accomplishments, the initiatives we are currently undertaking, and our vision for the future. We will update this information throughout the year so you can follow our progress. I also encourage you to read our 2020 Annual Report and Form 10-K and other filings for further financial information.

On behalf of the Board of Directors and our leadership team, I wish to thank you for your support and belief in the future success of Cass. I am proud and thankful to work with the outstanding and dedicated Cass team, who met all the challenges of 2020 with confidence, resourcefulness, and a lot of hard work. I remain humbly grateful for God’s blessings, inspiration, and guidance.


Eric H. Brunngraber

Chairman, President, and Chief Executive Officer

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