Press Release

Truxton Corporation Reports Second Quarter 2019 Results

Company Release - 7/18/2019 8:30 AM ET

NASHVILLE, Tenn., July 18, 2019 (GLOBE NEWSWIRE) -- Truxton Corporation (OTCPK: TRUX), the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended June 30, 2019.  Second quarter net income attributable to common shareholders was $2.5 million or $0.90 per diluted share compared to $2.0 million or $0.74 per diluted share for the same quarter in 2018.  Net income rose by 23% for the quarter while earnings per share rose by 22%.  For the six months ended June 30, 2019, net income increased by 24% to $4.7 million from $3.8 million in the comparable period in 2018.  For the six months ended June 30, 2019, earnings per diluted share rose from $1.37 to $1.69, an increase of 23%.

“Our earnings performance in 2019 has continued to be very strong,” said Truxton Trust Chairman and CEO Tom Stumb.  “Tight expense control, exceptional credit quality, and continued growth in wealth management revenue were the drivers of excellent growth and return metrics this quarter.  Clients continue to seek our advice for their most challenging financial decisions.  Nashville, our core market, has experienced strong employment growth now for a decade.”

Key Highlights

  • Non-interest income grew to $3.0 million in the second quarter, an increase of 12% from the same period of 2018.  Wealth management services constituted 93% of non-interest income in the period ended June 30, 2019. 
  • Loans rose by 10% to $336 million compared to June 30, 2018, and were up 1.2% compared to December 31, 2018. 
  • Total deposits grew by 7.7% since June 30, 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 second quarter of 2019 was 3.35%.  That represents an increase of 12 basis points from the 3.23% experienced in the quarter ended March 31, 2019, but a decline of 7 basis points from the quarter ended June 30, 2018.  Cost of funds decreased to 1.08% in the second quarter of 2019 from 1.14% for the quarter ended March 31, 2019, but rose from 0.63% for the quarter ended June 30, 2018.  Pressure on rates has abated as the bond market has rallied and short-term money markets have stabilized.
  • Asset quality remains sound at Truxton.  Truxton had no non-performing assets at June 30, 2019.  Truxton had no charge-offs in the quarter and none in the trailing quarter, nor in the same quarter a year ago. 
  • Allowance for loan losses was $3.4 million, $3.4 million, and $3.1 million for the June 30, 2019, March 31, 2019, and June 30, 2018, quarters, respectively.  For the three periods, the bank’s allowance was 1.02%, 0.99%, and 1.03%, of gross loans outstanding at period end, respectively.
  • Tax expense increased by 28% from the March 31, 2019, quarter and by 39% from the June 30, 2018, period.  Effective tax rate rose from the first quarter of 2019 because of partial payoffs of certain loans for which Truxton receives a direct credit against state income tax based on the year end balance of the loan.  Reported effective tax rate for the rest of the year may fluctuate based on the actual balance of such loans.  In addition, 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 strong.  Tier 1 leverage ratio was 11.44% for June 30, 2019, 11.15% for March 31, 2019, and 11.20% for June 30, 2018.  Book value per common share was $22.47, $21.52, and $19.27 for June 30, 2019, March 31, 2019, and June 30, 2018, respectively.  During the 12 months ended June 30, 2019, Truxton Corporation paid dividends of $0.94 per common share.

About Truxton Trust
Truxton Trust Company is a provider of private banking, wealth management, trust, and family office services for wealthy individuals, their families and their business interests.  Serving clients across the world, Truxton’s vastly experienced team of professionals provides customized solutions to its clients’ complex financial needs.  Founded in 2004 in Nashville, Tennessee, Truxton Trust upholds its original guiding principle: do the right thing. Truxton Trust Company is a subsidiary of financial holding company, Truxton Corporation (OTCPK: TRUX).  For more information, visit truxtontrust.com

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)
    
 June 30,
2019*
March 31,
2019*
June 30,
2018*
ASSETS   
Cash and due from financial institutions$  7,951 $  5,349 $  6,408 
Interest bearing deposits in other financial institutions   12,712    8,061    14,212 
          
Federal funds sold   253    120    808 
Cash and cash equivalents   20,916    13,530    21,428 
    
Time deposits in other financial institutions   12,288    14,280    4,821 
Securities available for sale   102,304    111,608    101,991 
    
Gross loans   335,639    339,176    305,223 
Allowance for loan losses   (3,411)   (3,356)   (3,131)
Net loans   332,228    335,820    302,092 
    
Mortgage loans held for sale,net   480    -    - 
Bank owned life insurance   9,864    9,809    9,647 
Restricted equity securities   2,588    2,583    2,567 
Premises and equipment, net   1,887    2,082    543 
Accrued interest receivable   1,817    1,883    1,529 
Deferred tax asset, net   321    653    820 
Other assets   3,115    2,438    1,750 
    
Total assets$  487,808 $  494,686 $  447,188 
    
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
Deposits   
Non-interest bearing$  104,475 $  107,248 $  113,486 
Interest bearing   296,549    304,152    258,997 
Total deposits   401,024    411,400    372,483 
    
Federal Home Loan Bank advances   18,833    19,090    19,737 
Federal Funds purchased   -    -    - 
Other liabilities   5,988    4,903    2,725 
Total liabilities   425,845    435,393    394,945 
    
SHAREHOLDERS' EQUITY   
Additional paid-in capital   29,066    28,882    27,722 
Retained earnings   32,610    30,783    26,098 
Accumulated other comprehensive income (loss)   287    (372)   (1,577)
    
Total shareholders' equity   61,963    59,293    52,243 
    
Total liabilities and shareholders' equity $  487,808 $  494,686 $  447,188 
    
    
*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
 June 30,
2019*
 March 31,
2019*
 June 30,
2018*
 June 30,
2019*
 June 30,
2018 *
Non-interest income        
Wealth management services$  2,783 $  2,672 $  2,431 $  5,456 $  4,797
Service charges on deposit accounts 74  70  88  144  172
Securities gains (losses), net 70  2  20  72  20
Bank owned life insurance income 55  54  57  109  112
Other 10  74  66  82  78
Total non-interest income 2,992  2,872  2,662  5,863  5,179
          
Interest income         
Loans, including fees$  4,093 $  3,921 $  3,424 $  8,014 $  6,591
Taxable securities 471  498  361  970  740
Tax-exempt securities 237  247  251  484  515
Interest bearing deposits 161  156  60  317  112
Federal funds sold 7  5  5  12  8
 Other interest income 51  32  48  83  76
Total interest income 5,020  4,859  4,149  9,880  8,042
          
Interest expense         
Deposits   1,041    1,082    494    2,122    922
Short-term  borrowings   9    7    6    16    9
Long-term  borrowings 111  121  109  233  200
Total interest expense 1,161  1,210  609  2,371  1,131
          
Net interest income 3,859  3,649  3,540  7,509  6,911
          
Provision for loan losses 55  0  8  55  57
          
Net interest income after provision for loan losses 3,804  3,649  3,532  7,454  6,854
          
Total revenue, net 6,796  6,521  6,194  13,317  12,033
          
Non interest expense         
Salaries and employee benefits 2,575  2,793  2,639  5,367  5,151
Occupancy 207  197  190  405  373
Furniture and equipment 27  27  45  55  101
Data processing 278  299  287  579  564
Wealth management processing fees 110  112  111  222  240
Advertising and public relations 20  38  16  57  45
Professional services 145  115  173  260  320
FDIC insurance assessments 35  35  35  70  70
Other 212  194  173  406  479
Total non interest expense 3,609  3,810  3,669  7,421  7,343
          
Income before income taxes 3,187  2,711  2,525  5,896  4,690
          
Income tax expense 668  523  479  1,191  885
          
Net income$  2,519 $  2,188 $  2,046 $  4,705 $  3,805
          
Earnings per share:          
Basic$0.92 $0.80 $  0.75 $1.72 $  1.41
Diluted$0.90 $0.78 $  0.74 $1.69 $  1.37
*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)
    
 June 30, 2019*March 31, 2019*June 30, 2018*
    
Pre Common Share Data   
Net income attributable to shareholders, per share   
Basic$0.92$0.80$0.75
Diluted $0.90$0.78$0.74
Book value per common share$22.47$21.52$19.27
Tangible book value per common share$22.47$21.52$19.27
Basic weighted average comm shares2,675,2832,677,9472,624,039
Diluted weighted average common shares2,727,3752,729,7742,686,117
Common shares outstanding at period end2,758,1092,754,7882,710,409
    
    
Selected Balance Sheet Data   
Tangible common equity (TEC) ratio12.70%12.00%11.68%
Average Loans$339,174$332,819$307,477
Average earning assets (1)$470,691$469,928$426,041
Average total assets$493,510$490,230$443,326
Average stockholders' equity$60,524$57,593$51,916
    
    
Selected Asset Quality Measures   
Nonaccrual loans000
90+ days past due still accruing000
Total nonperforming loans000
Total nonperforming assets000
Net charge offs (recoveries)(2)(2)(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 loans1.02%0.99%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 leverage11.44%11.15%11.20%
Common equity tier 115.06%14.39%14.28%
Total risk-based capital15.97%15.29%15.18%
    
Selected Performance Ratios    
Efficiency ratio54.60%58.53%59.72%
Return on average assets (ROA)2.05%1.81%1.85%
Return on average stockholders' equity (ROE)16.69%15.41%15.80%
Return on tangible common equity (ROTCE)16.69%15.41%15.80%
Net interest margin3.35%3.23%3.42%
   
*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
 June 30, 2019* March 31, 2019* June 30, 2018*
            
 Average  BalancesRates/  Yields
(%)
Interest
Income/ Expense
 Average  BalancesRates/
Yields (%)
Interest
Income/ Expense
 Average  BalancesRates/
Yields (%)
Interest
Income/ Expense
            
Earning Assets           
Loans$339,175 4.81$4,070 $332,819 4.77$3,917 $307,477 4.48$3,427
Loan fees$0 0.04$30 $0 0.02$17 $0 0.00$3
Loans with fees$339,175 4.85$4,100 $332,819 4.79$3,935 $307,477 4.48$3,430
Mortgage loans held for sale$71 2.99$1 $66 1.44$0 $39 4.55$1
Federal funds sold$1,042 2.58$7 $851 2.48$5 $732 2.54$5
Deposits with banks$24,747 2.61$161 $24,211 2.61$156 $14,023 1.73$60
Investment securities - taxable$72,520 2.60$471 $77,423 2.57$498 $66,931 2.16$361
Investment securities - tax-exempt$33,136 4.27$237 $34,558 4.26$247 $36,838 4.06$250
Total Earning Assets$470,691 4.34$4,977 $469,928 4.27$4,841 $426,040 3.99$4,107
Non interest earning assets           
Allowance for loan losses (3,394)    (3,356)    (3,129)  
Cash and due from banks$6,381    $6,693    $5,666   
Premises and equipment$1,901    $300    $401   
Accrued interest receivable$1,630    $1,588    $1,317   
Other real estate$0    $0    $0   
Other assets$16,075    $16,456    $14,827   
Unrealized gain (loss) on inv. securities 226     (1,379)    (1,796)  
Total Assets$493,510    $490,230    $443,326   
Interest bearing liabilities           
Interest bearing demand$25,935 0.71$46 $26,545 0.95$62 $26,160 0.35$23
Savings and Money Market$331,800 1.15$951 $339,115 1.17$981 $295,269 0.60$440
Time deposits - Retail$11,368 1.35$38 $11,465 1.14$32 $12,716 0.75$24
Time Deposits - Wholesale$7,880 0.31$6 $1,243 2.20$7 $2,126 1.39$7
Total interest bearing deposits$376,983 1.11$1,041 $378,368 1.16$1,082 $336,271 0.59$494
Federal home Loan Bank advances$22,339 1.97$111 $24,378 2.00$122 $24,490 1.76$109
Other borrowings$2,924 1.27$9 $884 3.08$7 $1,055 2.33$6
Total borrowed funds$25,263 1.89$120 $25,262 2.03$128 $25,545 1.79$115
Total interest bearing liabilities$402,246 1.16$1,161 $403,631 1.21$1,210 $361,816 0.67$609
Net interest rate spread 3.18$3,816  3.06$3,631  3.31$3,498
Non-interest bearing deposits$27,424    $25,445    $28,265   
Other liabilities$3,315    $3,560    $1,360   
Stockholder's equity$60,524    $57,593    $51,916   
Total Liabilities and Stockholder's Equity$493,509    $490,228    $443,357   
Cost of funds 1.08   1.14   0.63 
Net interest margin 3.35   3.23   3.42 
            
*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.


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:
 Six Months Ended  Six Months Ended
 June 30, 2019*  June 30, 2018*
         
 Average
Balances
Rates/
Yields (%)
Interest
Income/
Expense
  Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
         
Earning Assets        
Loans$336,014 4.79$7,987  $301,029 4.43$6,594
Loan fees$0 0.03$48  $0 0.00$7
Loans with fees$336,014 4.82$8,035  $301,029 4.43$6,601
Mortgage loans held for sale$69 2.24$1  $19 4.53$1
Federal funds sold$947 2.53$12  $847 1.92$8
Deposits with banks$24,480 2.61$317  $14,061 1.61$112
Investment securities - taxable$74,959 2.59$969  $67,721 2.19$740
Investment securities - tax-exempt$33,843 3.86$484  $37,835 4.07$515
Total Earning Assets$470,312 4.28$9,818  $421,512 3.94$7,977
Non interest earning assets        
Allowance for loan losses (3,375)     (3,105)  
Cash and due from banks$6,536     $5,841   
Premises and equipment$1,396     $432   
Accrued interest receivable$1,609     $1,280   
Other real estate$0     $0   
Other assets$15,973     $14,476   
Unrealized gain (loss) on inv. securities (572)     (1,327)  
Total Assets$491,879     $439,109   
Interest bearing liabilities        
Interest bearing demand$26,238 0.83$108  $28,369 0.37$52
Savings and Money Market$335,438 1.16$1,932  $292,474 0.56$813
Time deposits - Retail$11,416 1.24$70  $12,326 0.69$42
Time Deposits - Wholesale$4,580 0.56$13  $2,083 1.42$15
Total interest bearing deposits$377,672 1.13$2,123  $335,252 0.55$922
Federal home Loan Bank advances$23,353 1.98$233  $22,858 1.74$200
Other borrowings$2,201 1.47$16  $815 2.14$9
Total borrowed funds$25,554 1.94$249  $23,673 1.76$209
Total interest bearing liabilities$403,226 1.18$2,372  $358,925 0.63$1,131
Net interest rate spread 3.09$7,446   3.31$6,846
Non-interest bearing deposits$26,439     $27,356   
Other liabilities$3,146     $1,374   
Stockholder's equity$59,067     $51,478   
Total Liabilities and Stockholder's Equity$491,878     $439,133   
Cost of funds 1.11    0.59 
Net interest margin 3.26    3.40 
         
*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.

TruxtonLogo.jpg

Source: Truxton Trust Company
 
TRUXTON TRUST