Press Release

Truxton Corporation Reports First Quarter 2019 Results

Company Release - 4/18/2019 8:00 AM ET

NASHVILLE, Tenn., April 18, 2019 (GLOBE NEWSWIRE) -- Truxton Corporation, the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries announced its operating results for the quarter ended March 31, 2019.  First quarter net income attributable to common shareholders was $2.2 million or $0.78 per share compared to $1.8 million or $0.64 per share for the same quarter in 2018.  Net income rose by 25% for the quarter while earnings per share rose by 22%.

“We are very pleased with the way that 2019 has begun, reflecting the dedication and hard work of the Truxton team,” stated Chairman and CEO Tom Stumb.  “Our earnings grew because more clients entrusted us with more of their most critical financial affairs. They appreciate our attentive service and deep expertise in delivering private banking and wealth management.  Nashville, our principal market, continues to be one of the strongest in the United States.”

Key Highlights

  • Non-interest income grew to $2.9 million in the first quarter, an increase of 10% from the fourth quarter of 2018 and 13% for the first quarter of 2018.  Wealth management services constituted 93% of non-interest income. 
  • Loans rose by 11% to $339 million compared to March 31, 2018 and were up 2% compared to December 31, 2018.  First quarter new loan production was $18.0 million.  New loans in the quarter consisted of 59% commercial real estate, 36% consumer (including 1-4 family residential), and 5% commercial and industrial.  Loans produced in the quarter had an average yield of 5.4%.
  • Total deposits grew by 2% from December 31, 2018, and by 12% from March 31, 2018.  Truxton continues to fund its growth from a single banking location through superior deposit operations service and technology.  As a result, occupancy expenditures and fixed asset investments are a fraction of typical peers.
  • Net interest margin for the first quarter of 2019 was 3.23%.  That represents a decrease of two basis points from the 3.25% experienced in the quarter ended December 31, 2018, and a decline of 15 basis points from the quarter ended March 31, 2018.  Cost of funds rose to 1.14% in the first quarter of 2019 from 0.94% for the quarter ended December 31, 2018, and 0.55% for the quarter ended March 31, 2018.  After a long period during which deposit cost lagged the rise in Fed Funds, Truxton is seeing pressure on rates. 
  • Asset quality remains sound at Truxton.  Truxton had no non-performing assets at March 31, 2019.  Truxton had no charge-offs in the quarter and none in the trailing quarter, nor in the same quarter a year ago.  The Bank also had no “Other Real-estate Owned” for the three periods mentioned above. 
  • Provision for loan losses was $3.36 million, $3.36 million, and $3.12 million for the March 31, 2019, December 31, 2018, and March 31, 2018, quarters, respectively.   For the three periods, the bank’s allowance was 0.99%, 1.01%, and 1.03%, of gross loans outstanding at period end, respectively.
  • Tax expense increased by 40% from the December 31, 2018 quarter and by 29% from the March 31, 2018 period.  Effective tax rate was low in the final quarter of 2018 because of certain loans, funded late in the year, for which Truxton receives a direct credit against state income tax based on the year end balance of the loan.  Truxton believes that the effective tax rate of approximately 19% of pretax net income will persist under current state and federal law. Truxton has several sources of lightly taxed income including yield on bank-owned life insurance, the earnings of the bank’s captive insurance company, and the interest income from the bank’s tax-exempt bond portfolio that cause its effective rate to be below the combined statutory rates.
  • The bank’s capital position remains to be strong.  Tier 1 leverage ratio was 11.15% for March 31, 2019, 10.76% for December 31, 2018, and 11.20% for March 31, 2018.  Book value per common share was $21.52, $20.63, and $18.85 for March 31, 2019, December 31, 2018, and March 31, 2018, respectively.  During the 12 months ended March 31, 2019, Truxton Corporation paid dividends of $0.91 per common share.

About Truxton Trust
Truxton Trust is a full-service private bank and trust company founded in 2004. Since its inception, Truxton Trust has been focused on a singular guiding principle: do the right thing. Truxton Trust delivers the highest level of personal service through its vastly experienced and credentialed team of professionals who provide comprehensive and customized financial solutions to individuals, their families and their business interests.

Investor Relations
Andrew May 
615-515-1707 
[email protected]
 Media Relations
Tamara Schoeplein
615-515-1714
[email protected]


Truxton Corporation
Consolidated Balance Sheets
(000's)
(Unaudited)
    
 March 31,
2019*
December
2018
March 31,
2018*
ASSETS   
Cash and due from financial institutions$  5,349 $  7,139 $  5,616 
Interest bearing deposits in other financial institutions   8,061    3,660    2,797 
          
Federal funds sold   120    6    2,158 
Cash and cash equivalents   13,530    10,805    10,571 
    
Time deposits in other financial institutions   14,280    18,268    7,809 
Securities available for sale   111,608    109,696    104,134 
    
Gross loans   339,176    331,809    304,584 
Allowance for loan losses   (3,356)   (3,356)   (3,123)
Net loans   335,820    328,453    301,461 
    
Bank owned life insurance   9,809    9,755    9,590 
Restricted equity securities   2,583    2,578    2,560 
Premises and equipment, net   383    429    631 
Accrued interest receivable   1,883    1,804    1,445 
Deferred tax asset, net   653    1,022    716 
Other assets   3,497    2,323    1,205 
    
Total assets$  494,046 $  485,133 $  440,122 
    
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
Deposits   
Non-interest bearing$  107,248 $  93,464 $  106,774 
Interest bearing   304,152    311,218    261,073 
Total deposits   411,400    404,682    367,847 
    
Federal Home Loan Bank advances   19,090    19,249    20,027 
Federal Funds purchased   -    1,282    - 
Other liabilities   4,263    3,525    1,159 
Total liabilities   434,753    428,738    389,033 
    
SHAREHOLDERS' EQUITY   
Additional paid-in capital   28,882    28,527    27,514 
Retained earnings   30,783    29,283    24,647 
Accumulated other comprehensive income (loss)   (372)   (1,415)   (1,072)
    
Total shareholders' equity      59,293    56,395    51,089 
    
Total liabilities and shareholders' equity $  494,046 $  485,133 $  440,122 
    
    
*The information is preliminary, unaudited and based on company data available at the time of presentation.   
    

 

Truxton Corporation
Consolidated Statements of Net Income
(000's)
(Unaudited)
        
 Three Months Ended Year To Date
 March 31,
2019*
 December 31,
2018 
 March 31,
2018*
 March 31,
2019*
 March 31,
2018
Non-interest income        
Wealth management services$  2,672 $  2,476  $  2,366 $  2,672 $  2,366
Service charges on deposit accounts 70  86   85  70  85
Securities gains (losses), net 2  (86)    2  
Bank owned life insurance income 54  55   54  54  54
Other 74  74   41  74  41
Total non-interest income 2,872  2,605   2,546  2,872  2,546
          
Interest income         
Loans, including fees$  3,921 $  3,819  $  3,166 $  3,921 $  3,166
Taxable securities 498  494   380  498  380
Tax-exempt securities 247  232   265  247  265
Interest bearing deposits 156  231   52  156  52
Federal funds sold 5  16   3  5  3
 Other interest income 32  51   28  32  
Total interest income 4,859  4,843   3,894  4,859  3,866
          
Interest expense         
Deposits   1,082    940     428    1,082    428
Short-term  borrowings   7    2     3    7    3
Long-term  borrowings 121  87   91  121  91
Total interest expense 1,210  1,029   522  1,210  522
          
Net interest income 3,649  3,814   3,372  3,649  3,344
          
Provision for loan losses 0  226   49  0  49
          
Net interest income after provision for loan losses 3,649  3,588   3,323  3,649  3,295
          
Total revenue, net 6,521  6,193   5,869  6,521  5,841
          
Non interest expense         
Salaries and employee benefits 2,793  2,683   2,512  2,793  2,512
Occupancy 197  202   183  197  183
Furniture and equipment 27  28   56  27  56
Data processing 299  295   277  299  277
Wealth management processing fees 112  92   129  112  129
Advertising and public relations 38  43   30  38  30
Professional services 115  142   147  115  147
FDIC insurance assessments 35  19   35  35  35
Other 194  207   308  194  308
Total non interest expense 3,810  3,711   3,677  3,810  3,677
          
Income before income taxes 2,711  2,482   2,192  2,711  2,164
          
Income tax expense 523  373   406  523  406
          
Net income$  2,188 $  2,109  $  1,786 $  2,188 $  1,758
          
Earnings per share:          
Basic$0.80 $  0.78  $  0.65   $  0.65
Diluted$0.78 $  0.76  $  0.64   $  0.64
*The information is preliminary, unaudited and based on company data available at the time of presentation. 
  

 

Truxton Corporation
Selected Quarterly Financial data
At Or For The Three Months Ended
(000's)
(Unaudited)
    
 March 31, 2019*December 31, 2018 March 31, 2018*
    
Pre Common Share Data   
Net income attributable to shareholders, per share   
Basic$0.80$0.78$0.65
Diluted $0.78$0.76$0.64
Book value per common share$21.52$20.67$18.86
Tangible book value per common share$21.52$20.67$18.86
Basic weighted average comm shares2,677,9472,644,3182,618,266
Diluted weighted average common shares2,729,7742,703,9712,679,397
Common shares outstanding at period end2,754,7882,728,9752,708,659
    
    
Selected Balance Sheet Data   
Tangible common equity (TEC) ratio12.00%11.62%11.61%
Average Loans$332,819$323,421$294,510
Average earning assets (1)$469,928$475,145$416,933
Average total assets$490,230$492,767$434,845
Average stockholders' equity$57,593$54,756$51,034
    
    
Selected Asset Quality Measures   
Nonaccrual loans000
90+ days past due still accruing000
Total nonperforming loans000
Total nonperforming assets000
Net charge offs (recoveries)(2)(1)(1)
Nonperforming loans to assets0.00%0.00%0.00%
Nonperforming assets to total assets0.00%0.00%0.00%
Nonperforming assets to total loans and other real estate0.00%0.00%0.00%
Allowance for loan losses to total loans0.99%1.01%1.03%
Allowance for loan losses to nonperforming loansNANANA
Net charge offs (recoveries) to average loans0.00%0.00%0.00%
    
    
Capital Ratios (Bank Subsidiary Only)   
Tier 1 leverage11.15%10.76%11.12%
Common equity tier 114.43%14.30%14.03%
Total risk-based capital15.32%15.21%14.95%
    
Selected Performance Ratios    
Efficiency ratio58.53%56.73%64.66%
Return on average assets (ROA)1.81%1.70%1.64%
Return on average stockholders' equity (ROE)15.41%15.29%13.97%
Return on tangible common equity (ROTCE)15.41%15.29%13.97%
Net interest margin3.23%3.25%3.38%
   
*The information is preliminary, unaudited and based on company data available at the time of presentation.  
   
(1) Average earning assets is the daily average of earning assets.  Earning assets consists of loans, mortgage loans held for sale, federal funds sold, deposits with banks, investment securities and restricted equity securities. 

  

Truxton Corporation
Yield Tables
For The Periods Indicated
(000's)
(Unaudited)
 
The following table sets forth the amount of our average balances, interest income or interest expense for each category of interest earning assets and interest bearing liabilities and the average interest rate for interest earning assets and interest bearing liabilities, net interest spread and net interest margin for the periods indicated below:
            
 Three Months Ended Three Months Ended Three Months Ended
 March 31, 2019* December 31, 2018 March 31, 2018*
            
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
            
Earning Assets           
Loans$332,8194.77$3,917 $323,4214.69$3,811 $294,5104.37$3,167
Loan fees$00.02$17 $00.01$10 $00.00$4
Loans with fees$332,8194.79$3,935 $323,4214.70$3,821 $294,5104.38$3,171
Mortgage loans held for sale$661.44$0 $193.84$0 $00.00$0
Federal funds sold$8512.48$5 $2,4642.46$15 $9621.44$3
Deposits with banks$24,2112.61$156 $38,1602.41$231 $14,0991.49$52
Investment securities - taxable$77,4232.57$498 $77,9232.54$494 $68,5202.22$380
Investment securities - tax-exempt$34,5584.26$247 $33,1584.18$232 $38,8424.07$265
Total Earning Assets$469,9284.27$4,841 $475,1454.11$4,794 $416,9333.89$3,871
Non interest earning assets           
Allowance for loan losses(3,356)   (3,261)   (3,080)  
Cash and due from banks$6,693   $6,664   $6,017  
Premises and equipment$300   $325   $464  
Accrued interest receivable$1,588   $1,459   $1,242  
Other real estate$0   $0   $0  
Other assets$16,456   $15,331   $14,121  
Unrealized gain (loss) on inv. securities(1,379)   (2,897)   (853)  
Total Assets$490,230   $492,767   $434,845  
Interest bearing liabilities           
Interest bearing demand$26,5450.95$62 $25,3370.44$28 $30,6030.39$29
Savings and Money Market$339,1151.17$981 $348,9230.99$868 $289,6470.52$373
Time deposits - Retail$11,4651.14$32 $15,2681.06$41 $11,9320.62$18
Time Deposits - Wholesale$1,2432.20$7 $1,2431.16$4 $2,0411.45$7
Total interest bearing deposits$378,3681.16$1,082 $390,7710.95$940 $334,2220.52$428
Federal home Loan Bank advances$24,3782.00$122 $19,3451.75$87 $21,2081.72$91
Other borrowings$8843.08$7 $3072.64$2 $5721.78$3
Total borrowed funds$25,2622.03$128 $19,6521.77$89 $21,7801.72$94
Total interest bearing liabilities$403,6311.21$1,210 $410,4230.99$1,029 $356,0030.59$522
Net interest rate spread 3.06$3,631  3.12$3,765  3.30$3,349
Non-interest bearing deposits$25,445   $24,842   $26,437  
Other liabilities$3,560   $2,746   $1,387  
Stockholder's equity$57,593   $54,756   $51,034  
Total Liabilities and Stockholder's Equity$490,228   $492,767   $434,861  
Cost of funds 1.14   0.94   0.55 
Net interest margin 3.23   3.25   3.38 
            
*The information is preliminary, unaudited and based on company data available at the time of presentation. 
 
Yield Table Assumptions - Average loan balances are inclusive of nonperforming loans. Yields computed on tax-exempt instruments are on a tax equivalent basis. Net interest spread is calculated as the yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. Net interest margin is the result of net interest income calculated on a tax-equivalent basis divided by average interest earning assets for the period. Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate while rate change is change in rate times the previous volume. Changes not due solely to volume or rate changes are allocated to volume change and rate change in proportion to the relationship of the absolute dollar amounts of the change in each category.
            


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Source: Truxton Trust Company
 
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