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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________________
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 000-20827
____________________
CASS INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Missouri43-1265338
(State or other jurisdiction of incorporation or
organization)
(I.R.S. Employer Identification No.)
12444 Powerscourt Drive, Suite 550
St. Louis, Missouri
63131
(Address of principal executive offices) (Zip Code)
(314) 506-5500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbols Name of each exchange on which registered
Common stock, par value $.50 CASS The Nasdaq Global Select Market
____________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes     x                 No    o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes     x                 No     o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer o
Accelerated Filer
x
 
Non-Accelerated Filer oSmaller Reporting Company o Emerging Growth Company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes     ☐                 No    x
The number of shares outstanding of the registrant's only class of common stock as of October 22, 2021: Common stock, par value $.50 per share – 14,010,148 shares outstanding.
-1-

TABLE OF CONTENTS
Forward-looking Statements - Factors That May Affect Future Results
This report may contain or incorporate by reference forward-looking statements made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although we believe that, in making any such statements, our expectations are based on reasonable assumptions, forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors beyond our control, which may cause future performance to be materially different from expected performance summarized in the forward-looking statements. These risks, uncertainties and other factors are discussed in Part I, Item 1A, “Risk Factors” of the Company’s 2020 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”), which may be updated from time to time in our future filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, or changes to future results over time.
-2-

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands except Share and Per Share Data)
September 30, 2021 (Unaudited)
December 31,
2020
Assets  
Cash and due from banks $25,641 $30,985 
Interest-bearing deposits in other financial institutions 472,786 393,810 
Federal funds sold and other short-term investments 1,882 245,733 
Cash and cash equivalents 500,309 670,528 
Securities available-for-sale, at fair value 541,079 357,726 
Loans 872,905 891,676 
Less: Allowance for credit losses 11,532 11,944 
Loans, net 861,373 879,732 
Payments in excess of funding 266,379 194,563 
Premises and equipment, net 17,499 18,057 
Investment in bank-owned life insurance 42,926 18,058 
Goodwill 14,262 14,262 
Other intangible assets, net 2,779 3,423 
Other assets 46,380 46,886 
Total assets $2,292,986 $2,203,235 
Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing $467,320 $493,504 
Interest-bearing 619,997 557,352 
Total deposits 1,087,317 1,050,856 
Accounts and drafts payable 905,479 835,386 
Other liabilities 52,547 55,833 
Total liabilities 2,045,343 1,942,075 
Shareholders’ Equity:
Preferred stock, par value $.50 per share; 2,000,000 shares authorized and no shares issued
  
Common stock, par value $.50 per share; 40,000,000 shares authorized and 15,505,772 shares issued at September 30, 2021 and December 31, 2020
7,753 7,753 
Additional paid-in capital 204,113 204,875 
Retained earnings 108,388 99,062 
Common shares in treasury, at cost (1,495,624 shares at September 30, 2021 and 1,113,103 shares at December 31, 2020)
(67,018)(50,515)
Accumulated other comprehensive loss (5,593)(15)
Total shareholders’ equity 247,643 261,160 
Total liabilities and shareholders’ equity $2,292,986 $2,203,235 
See accompanying notes to unaudited consolidated financial statements.
-3-

CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in Thousands except Per Share Data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021202020212020
Fee Revenue and Other Income:
Information services payment and processing revenue $26,877 $24,376 $78,441 $72,540 
Bank service fees 533 441 1,557 1,249 
(Losses) gains on sales of securities (1) 44 1,069 
Other 168 115 697 343 
Total fee revenue and other income 27,577 24,932 80,739 75,201 
Interest Income:
Interest and fees on loans 8,987 9,067 26,270 27,366 
Interest and dividends on securities:
Taxable 731 373 1,387 1,406 
Exempt from federal income taxes 1,760 1,753 5,331 5,357 
Interest on federal funds sold and other short-term investments 241 86 515 1,130 
Total interest income 11,719 11,279 33,503 35,259 
Interest Expense:
Interest on deposits 287 465 915 1,909 
Interest on short-term borrowings    2 
Total interest expense 287 465 915 1,911 
Net interest income 11,432 10,814 32,588 33,348 
 Provision for (release of) credit losses / loan losses 340  (870)725 
Net interest income after provision for (release of) credit losses / loan losses 11,092 10,814 33,458 32,623 
Total net revenue 38,669 35,746 114,197 107,824 
Operating Expense:
Personnel 23,283 22,521 68,689 65,839 
Occupancy 953 930 2,859 2,809 
Equipment 1,700 1,648 5,028 4,900 
Amortization of intangible assets 215 215 644 644 
Other operating expense 4,539 3,366 11,798 10,774 
Total operating expense 30,690 28,680 89,018 84,966 
Income before income tax expense 7,979 7,066 25,179 22,858 
Income tax expense 1,174 1,285 4,277 4,093 
Net income $6,805 $5,781 $20,902 $18,765 
Basic earnings per share $.48 $.40 $1.47 $1.31 
Diluted earnings per share .48 .40 1.45 1.29 
See accompanying notes to unaudited consolidated financial statements.


-4-

CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Dollars in Thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021202020212020
Comprehensive Income:
Net income $6,805 $5,781 $20,902 $18,765 
Other comprehensive income (loss):
Net unrealized (loss) gain on securities available-for-sale (4,438)224 (7,086)7,209 
Tax effect 1,057 (53)1,687 (1,716)
Reclassification adjustments for losses (gains) included in net income 1  (44)(1,069)
Tax effect   10 254 
Foreign currency translation adjustments (168)63 (145)(65)
Total comprehensive income $3,257 $6,015 $15,324 $23,378 
See accompanying notes to unaudited consolidated financial statements.
-5-

CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
Nine Months Ended
September 30,
20212020
Cash Flows From Operating Activities:  
Net income $20,902 $18,765 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 9,340 8,391 
Gains on sales of securities (44)(1,069)
Stock-based compensation expense 2,585 2,277 
(Release of) provision for credit losses / loan losses (870)725 
Decrease in deferred income tax asset 22 1 
Increase in current income tax liability 79 527 
(Decrease) increase in pension liability (1,252)3,315 
(Increase) decrease in accounts receivable (628)1,339 
Other operating activities, net 546 5,790 
Net cash provided by operating activities 30,680 40,061 
Cash Flows From Investing Activities:
Proceeds from sales of securities available-for-sale 43,190 19,629 
Proceeds from maturities of securities available-for-sale 83,265 43,605 
Purchase of securities available-for-sale (322,336)(2,931)
Net decrease (increase) in loans 19,229 (171,902)
Purchase of bank-owned life insurance(24,868) 
(Increase) decrease in payments in excess of funding (71,816)44,766 
Purchases of premises and equipment, net (2,697)(1,705)
Net cash used in investing activities (276,033)(68,538)
Cash Flows From Financing Activities:
Net (decrease) increase in noninterest-bearing demand deposits (26,184)23,290 
Net increase in interest-bearing demand and savings deposits 67,930 136,639 
Net decrease in time deposits (5,285)(5,881)
Net increase in accounts and drafts payable 70,099 146,280 
Net decrease in short-term borrowings  (18,000)
Cash dividends paid (11,576)(11,704)
Purchase of common shares for treasury (18,975)(5,508)
Other financing activities, net (875)(1,142)
Net cash provided by financing activities 75,134 263,974 
Net (decrease) increase in cash and cash equivalents (170,219)235,497 
Cash and cash equivalents at beginning of period 670,528 203,954 
Cash and cash equivalents at end of period $500,309 $439,451 
Supplemental information:
Cash paid for interest $885 $1,889 
Cash paid for income taxes 4,176 3,567 
See accompanying notes to unaudited consolidated financial statements.
-6-

CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2021
(Unaudited)
(Dollars in Thousands except per share data)
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Total
Balance, June 30, 2020 $7,753 $204,258 $95,514 $(49,457)$(9,541)$248,527 
Net income 5,781 5,781 
Cash dividends ($.27 per share)
(3,893)(3,893)
Issuance of 1,165 common shares pursuant to stock-based compensation plan, net
(4)47 43 
Stock-based compensation expense 799 799 
Other comprehensive income 234 234 
Balance, September 30, 2020
$7,753 $205,053 $97,402 $(49,410)$(9,307)$251,491 
Balance, June 30, 2021 $7,753 $203,098 $105,398 $(53,437)$(2,045)$260,767 
Net income 6,805 6,805 
Cash dividends ($.27 per share)
(3,815)(3,815)
Issuance of 4,412 common shares pursuant to stock-based compensation plan, net
(51)134 83 
Exercise of SARs    
Stock-based compensation expense 1,066 1,066 
Purchase of 314,672 common shares
(13,715)(13,715)
Other comprehensive loss(3,548)(3,548)
Balance, September 30, 2021
$7,753 $204,113 $108,388 $(67,018)$(5,593)$247,643 
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Total
Balance, December 31, 2019
$7,753 $205,397 $90,341 $(45,381)$(13,920)$244,190 
Net income 18,765 18,765 
Cash dividends ($.81 per share)
(11,704)(11,704)
Issuance of 67,790 common shares pursuant to stock-based compensation plan, net
(2,378)1,338 (1,040)
Exercise of SARs (243)141 (102)
Stock-based compensation expense 2,277 2,277 
Purchase of 128,779 common shares
(5,508)(5,508)
Other comprehensive income 4,613 4,613 
Balance, September 30, 2020
$7,753 $205,053 $97,402 $(49,410)$(9,307)$251,491 
Balance, December 31, 2020
$7,753 $204,875 $99,062 $(50,515)$(15)$261,160 
Net income 20,902 20,902 
Cash dividends ($.81 per share)
(11,576)(11,576)
Issuance of 83,506 common shares pursuant to stock-based compensation plan, net
(2,932)2,180 (752)
Exercise of SARs (415)292 (123)
Stock-based compensation expense 2,585 2,585 
Purchase of 434,938 common shares
(18,975)(18,975)
Other comprehensive loss(5,578)(5,578)
Balance, September 30, 2021
$7,753 $204,113 $108,388 $(67,018)$(5,593)$247,643 
See accompanying notes to unaudited consolidated financial statements.
-7-

CASS INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Certain amounts in prior-period financial statements have been reclassified to conform to the current period’s presentation. Such reclassifications have no effect on previously reported net income or shareholders’ equity. Results for quarterly reporting periods beginning after December 31, 2020 in the Company’s Form 10-Q will be presented under ASU 2016-13, as defined in this report, while prior quarterly period amounts continue to be reported in accordance with previously applicable GAAP. 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, 2020.
Risks and Uncertainties
On March 11, 2020, the World Health Organization (“WHO”) declared the outbreak of COVID-19 as a global pandemic. The declaration of a global pandemic meant that almost all public commerce and related business activities was, to varying degrees, curtailed with the goal of decreasing the rate of new infections. In late fiscal 2020, vaccines for combating COVID-19 were approved by health agencies and have been administered throughout the country. Although vaccination efforts have been widespread and continuing, and a significant amount of previous business and other restrictions have been lifted, the continued impact of COVID-19, including any increases in the infection rates, new variants, and renewed governmental action to slow the spread of COVID-19 cannot be estimated. The ongoing impact of COVID-19, including the impact of restrictions imposed to combat its spread, could result in additional and prolonged business closures, supply chain disruptions, work restrictions and activity restrictions.
The Company is closely monitoring developments related to COVID-19 checking regularly for updated information and recommendations from the WHO and the Centers for Disease Control and Prevention, from national, state, and local governments, and evaluating courses of action being taken by peers. At this time, the Company remains subject to heightened business, operational, market, credit and other risks related to the COVID-19 pandemic, including, but not limited to, those discussed below, which may have an adverse effect on business, financial condition and results of operations.
Financial position and results of operations - The global health crisis caused by COVID-19 has and will continue to negatively impact business activity throughout the world. The COVID-19 outbreak and associated counter-acting measures implemented by governments around the world, as well as increased business uncertainty and shortages in the labor force, have had, and continue to have, an adverse impact on the Company’s financial results and are discussed in more detail below.
Although many restrictions have been relaxed with some success and economic conditions have been improving, many states and localities are still experiencing moderate to high levels of COVID-19 cases, prompting continued restrictions and the need for additional aid and other forms of relief for affected individuals, businesses and other entities. When and if COVID-19 is demonstrably contained, the Company anticipates a rebound in economic activity; however, any such rebound is contingent upon the rate and effectiveness of the containment efforts deployed by federal, state, and local governments. In light of the evolving health, social, economic and business environment, governmental regulations or mandates, and business disruptions that have occurred and could continue to occur, the aggregate impact that COVID-19 could have on the Company’s financial condition and operating results remains uncertain.
In response to COVID-19, the Federal Reserve took action to lower the Federal Funds rate. The Federal Reserve has indicated that the target Federal Funds rate would remain at current levels until the economy is in a more stable employment and price-stability position.
To the extent the business disruption continues for an extended period, additional cost control actions will be considered. Future asset impairment charges, increases in allowance for credit losses, or restructuring charges could be more likely and will be dependent on the severity and duration of this crisis and its effect on the Company’s borrowers.
-8-

For payment processing services, business closures cause a decrease in the number of transactions and dollars processed due to the decline in customers’ business activity. Other financial impact could occur though such potential impact is unknown at this time.
Capital and liquidity - While the Company believes that it has sufficient capital to withstand an extended economic recession brought about by COVID-19, its reported and regulatory capital ratios could be adversely impacted by future financial losses.
The Company maintains access to multiple sources of liquidity. If an extended recession caused large numbers of the Bank’s customers to draw down deposits, the Company might become more reliant on more expensive sources of funding.
Asset valuation - Currently, the Company does not expect COVID-19 to affect its ability to fairly value the assets on its balance sheet; however, this could change in future periods. While certain valuation assumptions and judgments will change to account for pandemic-related circumstances such as widening credit spreads, the Company does not anticipate significant changes in methodology used to determine the fair value of assets measured in accordance with GAAP.
An economic slowdown as a result of COVID-19 could cause a decline in the Company’s stock price or the occurrence of what management would deem to be a triggering event that could, under certain circumstances, necessitate a goodwill or intangible asset impairment test and result in an impairment charge being recorded for that period. In the event that the Company concludes that all or a portion of its goodwill is impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital or regulatory capital.
Processes, controls and business continuity - In accordance with its federally mandated Pandemic Plan and Business Continuity Plan, many Cass employees around the globe continue to work and conduct business remotely. In the past several years, Cass has invested in sophisticated technology initiatives that enable employees to operate remotely with full system(s) access along with unified and transparent voice and electronic communications capabilities. The Company cannot predict when or how it will fully lift the actions put in place as part of the Business Continuity Plan, including work from home requirements and travel restrictions. Cass does not believe the work from home protocol has materially adversely impacted internal controls, financial reporting systems, or operations.
Note 2 – Intangible Assets
The Company accounts for intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Goodwill and Other Intangible Assets (“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.
Details of the Company’s intangible assets are as follows:
September 30, 2021December 31, 2020
(In thousands)Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Assets eligible for amortization:     
Customer lists $4,778 $(4,231)$4,778 $(3,902)
Patents 72 (26)72 (24)
Software 2,844 (1,011)2,844 (731)
Trade Name 190 (20)190 (13)
Other 500 (317)500 (291)
Unamortized intangible assets:
Goodwill 14,262 — 14,262 — 
Total intangible assets $22,646 $(5,605)$22,646 $(4,961)
The customer lists are amortized over 7 and 10 years; the patents over 18 years; software over 3 years and 7 years, the trade name over 20 years and other intangible assets over 15 years. Amortization of intangible assets amounted to $644,000 for both the nine-month periods ended September 30, 2021 and 2020, respectively. Estimated amortization of intangibles is $859,000 in 2021, $540,000 in both 2022 and 2023, $498,000 in 2024, and $490,000 in 2025.
-9-

Note 3 – Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the sum of the weighted-average number of common shares outstanding and the weighted-average number of potential common shares outstanding. Under the treasury stock method, stock appreciation rights (“SARs”) are dilutive when the average market price of the Company’s common stock, combined with the effect of any unamortized compensation expense, exceeds the SAR price during a period.
The calculations of basic and diluted earnings per share are as follows:
(In thousands except share and per
share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021202020212020
Basic
Net income $6,805 $5,781 $20,902 $18,765 
Weighted-average common shares outstanding 14,040,089 14,348,151 14,203,369 14,373,243 
Basic earnings per share $.48 $.40 $1.47 $1.31 
 
Diluted
Net income $6,805 $5,781 $20,902 $18,765 
Weighted-average common shares outstanding 14,040,089 14,348,151 14,203,369 14,373,243 
Effect of dilutive restricted stock and stock appreciation rights 237,080 198,336 239,016 200,723 
Weighted-average common shares outstanding assuming dilution 14,277,169 14,546,487 14,442,385 14,573,966 
Diluted earnings per share $.48 $.40 $1.45 $1.29 
Note 4 – Stock Repurchases
The Company maintains a treasury stock buyback program pursuant to which, in October 2020, the Board of Directors authorized the repurchase of up to 500,000 shares of the Company’s common stock with no expiration date. As of September 30, 2021, 30,940 shares remained available for repurchase under the program. The Company repurchased 314,672 and zero shares during the three-month periods ended September 30, 2021 and 2020, respectively, and 434,938 and 128,779 shares for the nine-month periods ended September 30, 2021 and 2020, respectively. Repurchases may be made in the open market or through negotiated transactions from time to time depending on market conditions.
On October 19, 2021, the Board of Directors authorized the repurchase of up to 750,000 shares of the Company's common stock under the program. This new authorization replaces the previous authorization of 500,000 shares, and as such, the Company has 750,000 shares remaining available for repurchase in future periods.
Note 5 – Industry Segment Information
The services provided by the Company are classified into two reportable segments: Information Services and Banking Services. Each of these segments provides distinct services that are marketed through different channels. They are managed separately due to their unique service and processing requirements.
The Information Services segment provides transportation, energy, telecommunication, and environmental invoice processing and payment services to large corporations. The Banking Services segment provides banking services primarily to privately held businesses and faith-based ministries, including on-line generosity services, as well as supporting the banking needs of the Information Services segment.
The Company’s accounting policies for segments are the same as those described in the summary of significant accounting policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Management evaluates segment performance based on tax-equivalized (as defined in the footnote to the chart on the following table) pre-tax income after allocations for corporate expenses. Transactions between segments are accounted for at what management believes to be fair value.
-10-

Substantially all revenue originates from, and all long-lived assets are located within the United States, and no revenue from any customer of any segment exceeds 10% of the Company’s consolidated revenue.
Funding sources represent average balances and deposits generated by Information Services and Banking Services and there is no allocation methodology used. Segment interest income is a function of the relative share of average funding sources generated by each segment multiplied by the following rates:
Information Services – one or more fixed rates depending upon the specific characteristics of the funding source, and
Banking Services – a variable rate that is based upon the overall performance of the Company’s earning assets.
Any difference between total segment interest income and overall total Company interest income is included in Corporate, Eliminations, and Other.
-11-

Summarized information about the Company’s operations in each industry segment is as follows:
(In thousands)Information
Services
Banking
Services
Corporate,
Eliminations
and Other
Total
Three Months Ended September 30, 2021:
Fee income $26,642 $596 $339 $27,577 
Interest income* 6,361 6,187 (361)12,187 
Interest expense  287  287 
Intersegment income (expense)  859 (859)— 
Tax-equivalized pre-tax income* 6,753 1,886 (193)8,446 
Goodwill 12,433 1,829  14,262 
Other intangible assets, net 431 2,348  2,779 
Total assets 1,018,710 1,279,452 (5,176)2,292,986 
Average funding sources 974,091 875,997  1,850,088 
Three Months Ended September 30, 2020:
Fee income $24,198 $651 $83 $24,932 
Interest income* 5,112 7,212 (579)11,745 
Interest expense  465  465 
Intersegment income (expense)  593 (593)— 
Tax-equivalized pre-tax income* 4,522 3,506 (496)7,532 
Goodwill 12,433 1,829  14,262 
Other intangible assets, net 837 2,800  3,637 
Total assets 905,158 1,105,845 (10,540)2,000,463 
Average funding sources 751,010 780,217  1,531,227 
Nine Months Ended September 30, 2021:
Fee income $77,717 $1,846 $1,176 $80,739 
Interest income* 17,754 18,501 (1,335)34,920 
Interest expense  915  915 
Intersegment income (expense)  2,170 (2,170)— 
Tax-equivalized pre-tax income* 19,170 8,080 (654)26,596 
Goodwill 12,433 1,829  14,262 
Other intangible assets, net 431 2,348  2,779 
Total assets 1,018,710 1,279,452 (5,176)2,292,986 
Average funding sources 906,474 862,142  1,768,616 
Nine Months Ended September 30, 2020:
Fee income $72,098 $1,906 $1,197 $75,201 
Interest income* 14,774 21,097 812 36,683 
Interest expense  1,911  1,911 
Intersegment income (expense)  1,674 (1,674)— 
Tax-equivalized pre-tax income* 13,082 9,190 2,010 24,282 
Goodwill 12,433 1,829  14,262 
Other intangible assets, net 837 2,800  3,637 
Total assets 905,158 1,105,845 (10,540)2,000,463 
Average funding sources 703,142 712,903  1,416,045 
* Presented on a tax-equivalent basis assuming a tax rate of 21% for both 2021 and 2020. The tax-equivalent adjustment was approximately $468,000 and $466,000 for the Third Quarter of 2021 and 2020, respectively, and $1,417,000 and $1,424,000 for the Nine Months Ended 2021 and 2020, respectively.
-12-

Note 6 – Loans by Type
A summary of loan categories is as follows:
(In thousands)September 30,
2021
December 31,
2020
Commercial and industrial $356,532 $298,984 
Real estate:
Commercial:
Mortgage 103,596 100,419 
Construction 24,705 25,090 
Faith-based:
Mortgage 358,493 333,661 
Construction 13,272 23,818 
Paycheck Protection Program (“PPP”) 16,307 109,704 
Total loans $872,905 $891,676 
In support of the Coronavirus, Aid, Relief, and Economic Security Act (the “CARES Act”), the Bank processed 460 applications for PPP loans with an aggregate principal balance of $210,000,000 during 2021 and 2020 to provide much-needed cash to small business and self-employed taxpayers during the COVID-19 crisis. The loans were primarily made to existing bank customers and are 100% guaranteed by the Small Business Administration (“SBA”) with no allowance for credit loss allocation. The Company has unaccreted PPP loan fees of $479,000 at September 30, 2021.
-13-

The following table presents the aging of loans past due by category at September 30, 2021 and December 31, 2020:
PerformingNonperforming
(In thousands)Current30-59
Days
60-89
Days
90
Days
and
Over
Non-
accrual
Total
Loans
September 30, 2021
Commercial and industrial $356,532 $ $ $ $ $356,532 
Real estate
Commercial:
Mortgage 103,596