NASHVILLE, Tenn., July 26, 2018 (GLOBE NEWSWIRE) -- CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) reported net income of $3.5 million, or $0.27 per share on a fully diluted basis, for the three months ended June 30, 2018, compared to a net loss of $3.3 million, or ($0.26) per share on a fully diluted basis, for the three months ended June 30, 2017. Net income for the six months ending June 30, 2018 was $6.7 million, or $0.52 per share on a fully diluted basis, compared to a net loss of $3.0 million, or ($0.24) per share on a fully diluted basis, for the six months ended June 30, 2017.
“Our associates followed up on our strong first quarter with a number of accomplishments during the second quarter that continue to demonstrate our focus on delivering sound, profitable growth for our shareholders,” said Claire W. Tucker, CapStar’s president and chief executive officer. “Excluding merger-related charges, operating net income(1) was $3.8 million, or $0.29 per share on a fully diluted basis, for the three months ended June 30, 2018.”
Soundness
- The allowance for loan losses represented 1.41% of total loans at June 30, 2018 compared to 1.25% at June 30, 2017.
- Non-performing assets as a percentage of total loans and other real estate owned was 0.52% at June 30, 2018 compared to 0.32% at June 30, 2017.
- Annualized net charge-offs (recoveries) to average loans was 0.01% for the three months ended June 30, 2018 compared to 4.38% for the same period in 2017.
- The total risk based capital ratio was 12.45% at June 30, 2018 compared to 11.51% at June 30, 2017.
Profitability
Operating measures exclude merger-related expenses unrelated to CapStar’s normal operations. CapStar believes these measures are useful to investors as they exclude certain costs resulting from acquisition activity and allow investors to more clearly see the economic results of the organization's operations.
- Operating return on average assets ("ROAA") for the three months ended June 30, 2018 was 1.08% compared to -0.96% for the same period in 2017.
- Operating return on average tangible equity ("ROATE") for the three months ended June 30, 2018 was 10.4% compared to -9.8% for the same period in 2017.
- The net interest margin (“NIM”) for the three months ended June 30, 2018 was 3.46% compared to 3.20% for the same period in 2017.
- Operating efficiency ratio for the three months ended June 30, 2018 was 67.4% compared to 62.1% for the same period in 2017.
“Excluding merger-related expenses, our operating results were in line with our expectations. Delivering a 1.08% Operating ROAA in the second quarter is a step in the right direction towards improving our profitability profile,” said Rob Anderson, chief financial officer and chief administrative officer of CapStar.
(1) For a reconciliation of the non-GAAP operating measures that exclude merger-related costs unrelated to CapStar’s normal operations, see the non-GAAP financial measures section of this document.
Growth
- Average gross loans for the quarter ended June 30, 2018 increased 1.3%, to $1.04 billion, compared to $1.03 billion for the same period in 2017.
- Average demand deposits for the quarter ended June 30, 2018 increased 3.6%, to $237.3 million, compared to $229.1 million for the same period in 2017.
- Average total assets for the quarter ended June 30, 2018 increased 0.2%, to $1.40 billion, compared to $1.39 billion for the same period in 2017.
Merger Update
In addition, as announced on June 11, 2018, CapStar entered into a definitive merger agreement (the “Merger Agreement”) with Athens Bancshares Corporation (“Athens”). The Merger Agreement provides that Athens will merge with and into CapStar (the “Merger”), with CapStar as the surviving entity in the Merger and that, after the Merger, Athens’ wholly owned bank subsidiary, Athens Federal Community Bank, National Association, will merge with and into CapStar’s wholly owned bank subsidiary, CapStar Bank (the “Bank Merger,” together with the Merger, the “Mergers”), with CapStar Bank as the surviving entity in the Bank Merger.
The Merger Agreement was unanimously approved by the board of directors of each of CapStar and Athens. In the Merger, Athens shareholders will receive 2.864 shares of CapStar common stock for each share of Athens common stock. The all-stock transaction is valued at approximately $113.5 million based on the closing price of CapStar common stock on June 11, 2018.
Athens operates 10 locations in Southeast Tennessee. As of June 30, 2018, Athens had approximately $474 million in total assets, which included approximately $338 million in total loans, and approximately $412 million in total deposits.
CapStar expects to complete the Mergers in the fourth quarter of 2018. However, CapStar can provide no assurances of when or if the Mergers will be completed. CapStar must first obtain the approval of CapStar shareholders and Athens shareholders for the Mergers, as well as obtain necessary regulatory approvals and satisfy certain other closing conditions.
“We believe the second quarter financial results reported by Athens earlier this week support our confidence in the merits of this combination and the value creation potential for all of our shareholders,” said Claire W. Tucker, CapStar’s president and chief executive officer.
Conference Call and Webcast Information
CapStar will host a conference call and webcast at 9:00 a.m. Central Time on Friday, July 27, 2018. During the call, management will review the second quarter results and operational highlights. Interested parties may listen to the call by dialing (844) 412-1002. The conference ID number is 7191747. A simultaneous webcast may be accessed on CapStar’s website at ir.capstarbank.com by clicking on “News & Events”. An archived version of the webcast will be available in the same location shortly after the live call has ended.
About CapStar Financial Holdings, Inc.
CapStar Financial Holdings, Inc. is a bank holding company headquartered in Nashville, Tennessee, and operates primarily through its wholly owned subsidiary, CapStar Bank, a Tennessee-chartered state bank. CapStar Bank is a commercial bank that seeks to establish and maintain comprehensive relationships with its clients by delivering customized and creative banking solutions and superior client service. As of June 30, 2018, on a consolidated basis, CapStar had total assets of $1.4 billion, gross loans of $1.0 billion, total deposits of $1.1 billion, and shareholders’ equity of $153.1 million. Visit www.capstarbank.com for more information.
Important Additional Information about the Mergers and Where to Find It
In connection with the Mergers, CapStar has filed with the SEC a registration statement on Form S-4 (File Number 333-226112) that includes a joint proxy statement of CapStar and Athens and a prospectus of CapStar, as well as other relevant documents concerning the proposed Mergers. This earnings release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. SHAREHOLDERS OF CAPSTAR AND ATHENS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE MERGERS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGERS. When filed, this earnings release and other documents relating to the Mergers filed by CapStar with the SEC can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge by accessing CapStar’s website at https://ir.capstarbank.com/ under the tab “Financials & Filings.” Alternatively, these documents, when available, can be obtained free of charge from CapStar upon written request to CapStar Financials Holding, Inc., 1201 Demonbreun Street, Suite 700, Nashville, Tennessee 37203, Attention: Investor Relations or by calling (615) 732-6455.
Participants in the Solicitation
CapStar, Athens and certain of their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed Mergers. Information regarding CapStar’s directors and executive officers is available in its definitive proxy statement, which was filed with the SEC on March 19, 2018, and certain of its Current Reports on Form 8-K. Information about the directors and executive officers of Athens is set forth in the joint proxy statement/prospectus when it is filed with the SEC. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, are contained in the joint proxy statement/prospectus and other relevant materials filed with the SEC. Free copies of this document may be obtained as described in the preceding paragraph.
Forward-Looking Statements
Certain statements in this earnings release are forward-looking statements that reflect CapStar’s current views with respect to, among other things, future events, including, without limitation, the terms, timing and closing of the proposed Mergers and CapStar’s financial and operational performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “aspire,” “achieve,” “estimate,” “intend,” “plan,” “project,” “projection,” “forecast,” “roadmap,” “goal,” “guidance”, “target,” “would,” and “outlook,” or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about CapStar’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond CapStar’s control. The inclusion of these forward-looking statements should not be regarded as a representation by CapStar or any other person that such expectations, estimates and projections will be achieved. Accordingly, CapStar cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although CapStar believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be important factors that could cause CapStar’s actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, any factors identified in this earnings release as well as those factors that are detailed from time to time in CapStar’s periodic and current reports filed with the Securities and Exchange Commission, including those factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 under the headings “Item 1A. Risk Factors” and “Cautionary Note Regarding Forward Looking Statements” and in the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if CapStar’s underlying assumptions prove to be incorrect, actual results may differ materially from our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this earnings release, and CapStar does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for CapStar to predict their occurrence or how they will affect CapStar.
Non-GAAP Disclaimer
This earnings release includes the following financial measures that were prepared other than in accordance with generally accepted accounting principles in the United States (“non-GAAP financial measure”): operating net income, operating diluted net income per share, operating return on average assets, operating return on average tangible equity, tangible book value per share and operating efficiency ratio. These non-GAAP financial measures (i) provide useful information to management and investors that is supplementary to CapStar’s financial condition, results of operations and cash flows computed in accordance with GAAP, (ii) enable a more complete understanding of factors and trends affecting CapStar’s business, and (iii) allow investors to evaluate CapStar’s performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators; however, CapStar acknowledges that these non-GAAP financial measures have a number of limitations. As such, you should not view these non-GAAP financial measures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. See below for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure.
CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Income (unaudited) (dollars in thousands, except share data)
Second Quarter 2018 Earnings Release
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Interest income: | ||||||||||||||||
| Loans, including fees | $ | 13,796 | $ | 11,373 | $ | 26,030 | $ | 21,840 | ||||||||
| Securities: | ||||||||||||||||
| Taxable | 939 | 983 | 1,815 | 1,987 | ||||||||||||
| Tax-exempt | 261 | 317 | 546 | 642 | ||||||||||||
| Federal funds sold | 19 | 16 | 39 | 18 | ||||||||||||
| Restricted equity securities | 128 | 86 | 257 | 163 | ||||||||||||
| Interest-bearing deposits in financial institutions | 211 | 115 | 411 | 219 | ||||||||||||
| Total interest income | 15,354 | 12,890 | 29,098 | 24,869 | ||||||||||||
| Interest expense: | ||||||||||||||||
| Interest-bearing deposits | 892 | 586 | 1,646 | 1,204 | ||||||||||||
| Savings and money market accounts | 1,413 | 773 | 2,418 | 1,587 | ||||||||||||
| Time deposits | 834 | 574 | 1,483 | 1,046 | ||||||||||||
| Federal funds purchased | 1 | 7 | 1 | 11 | ||||||||||||
| Federal Home Loan Bank advances | 627 | 379 | 1,117 | 519 | ||||||||||||
| Total interest expense | 3,767 | 2,319 | 6,665 | 4,367 | ||||||||||||
| Net interest income | 11,587 | 10,571 | 22,433 | 20,502 | ||||||||||||
| Provision for loan losses | 169 | 9,690 | 846 | 13,094 | ||||||||||||
| Net interest income after provision for loan losses | 11,418 | 881 | 21,587 | 7,408 | ||||||||||||
| Noninterest income: | ||||||||||||||||
| Treasury management and other deposit service charges | 427 | 342 | 829 | 670 | ||||||||||||
| Loan commitment fees | 185 | 187 | 572 | 423 | ||||||||||||
| Net gain on sale of securities | 3 | 40 | 3 | 34 | ||||||||||||
| Tri-Net fees | 325 | 297 | 853 | 382 | ||||||||||||
| Mortgage banking income | 1,383 | 1,370 | 2,695 | 2,587 | ||||||||||||
| Other noninterest income | 442 | 430 | 902 | 703 | ||||||||||||
| Total noninterest income | 2,765 | 2,666 | 5,854 | 4,799 | ||||||||||||
| Noninterest expense: | ||||||||||||||||
| Salaries and employee benefits | 6,340 | 4,784 | 12,598 | 9,870 | ||||||||||||
| Data processing and software | 810 | 711 | 1,608 | 1,331 | ||||||||||||
| Professional fees | 344 | 350 | 819 | 714 | ||||||||||||
| Occupancy | 535 | 539 | 1,056 | 987 | ||||||||||||
| Equipment | 602 | 544 | 1,141 | 1,040 | ||||||||||||
| Regulatory fees | 233 | 301 | 436 | 608 | ||||||||||||
| Merger related expenses | 335 | — | 335 | — | ||||||||||||
| Other operating | 806 | 988 | 1,593 | 2,042 | ||||||||||||
| Total noninterest expense | 10,005 | 8,217 | 19,586 | 16,592 | ||||||||||||
| Income (loss) before income taxes | 4,178 | (4,670 | ) | 7,855 | (4,385 | ) | ||||||||||
| Income tax (benefit) expense | 665 | (1,328 | ) | 1,148 | (1,375 | ) | ||||||||||
| Net income (loss) | $ | 3,513 | $ | (3,342 | ) | $ | 6,707 | $ | (3,010 | ) | ||||||
| Per share information: | ||||||||||||||||
| Basic net income (loss) per share of common stock | $ | 0.30 | $ | (0.30 | ) | $ | 0.57 | $ | (0.27 | ) | ||||||
| Diluted net income (loss) per share of common stock | $ | 0.27 | $ | (0.26 | ) | $ | 0.52 | $ | (0.24 | ) | ||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 11,845,822 | 11,226,216 | 11,755,535 | 11,218,624 | ||||||||||||
| Diluted | 13,067,223 | 12,740,104 | 13,021,744 | 12,761,989 | ||||||||||||
This information is preliminary and based on company data available at the time of the presentation.
CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)
Second Quarter 2018 Earnings Release
| Five Quarter Comparison | ||||||||||||||||||||
| 6/30/18 | 3/31/18 | 12/31/17 | 9/30/17 | 6/30/17 | ||||||||||||||||
| Income Statement Data: | ||||||||||||||||||||
| Net interest income | $ | 11,587 | $ | 10,846 | $ | 10,518 | $ | 10,843 | $ | 10,571 | ||||||||||
| Provision for loan losses | 169 | 678 | (30 | ) | (195 | ) | 9,690 | |||||||||||||
| Net interest income after provision for loan losses | 11,418 | 10,168 | 10,548 | 11,038 | 881 | |||||||||||||||
| Treasury management and other deposit service charges | 427 | 402 | 419 | 427 | 342 | |||||||||||||||
| Loan commitment fees | 185 | 387 | 124 | 224 | 188 | |||||||||||||||
| Net gain (loss) on sale of securities | 3 | — | (108 | ) | 9 | 40 | ||||||||||||||
| Tri-Net fees | 325 | 528 | 254 | 367 | 297 | |||||||||||||||
| Mortgage banking income | 1,383 | 1,313 | 1,621 | 2,030 | 1,370 | |||||||||||||||
| Other noninterest income | 442 | 458 | 426 | 315 | 429 | |||||||||||||||
| Total noninterest income | 2,765 | 3,088 | 2,736 | 3,372 | 2,666 | |||||||||||||||
| Salaries and employee benefits | 6,340 | 6,257 | 5,411 | 5,119 | 4,784 | |||||||||||||||
| Data processing and software | 810 | 798 | 746 | 709 | 711 | |||||||||||||||
| Professional fees | 344 | 474 | 473 | 336 | 350 | |||||||||||||||
| Occupancy | 535 | 521 | 507 | 531 | 539 | |||||||||||||||
| Equipment | 602 | 539 | 467 | 564 | 544 | |||||||||||||||
| Regulatory fees | 233 | 203 | 234 | 270 | 301 | |||||||||||||||
| Merger related expenses | 335 | — | — | — | — | |||||||||||||||
| Other operating | 806 | 788 | 861 | 945 | 988 | |||||||||||||||
| Total noninterest expense | 10,005 | 9,580 | 8,699 | 8,474 | 8,217 | |||||||||||||||
| Net income (loss) before income tax expense | 4,178 | 3,676 | 4,585 | 5,936 | (4,670 | ) | ||||||||||||||
| Income tax (benefit) expense | 665 | 483 | 4,494 | 1,516 | (1,328 | ) | ||||||||||||||
| Net income (loss) | $ | 3,513 | $ | 3,193 | $ | 91 | $ | 4,420 | $ | (3,342 | ) | |||||||||
| Weighted average shares - basic | 11,845,822 | 11,664,467 | 11,403,689 | 11,279,364 | 11,226,216 | |||||||||||||||
| Weighted average shares - diluted | 13,067,223 | 12,975,981 | 12,938,288 | 12,750,423 | 12,740,104 | |||||||||||||||
| Net income (loss) per share, basic | $ | 0.30 | $ | 0.27 | $ | 0.01 | $ | 0.39 | $ | (0.30 | ) | |||||||||
| Net income (loss) per share, diluted | 0.27 | 0.25 | 0.01 | 0.35 | (0.26 | ) | ||||||||||||||
| Balance Sheet Data (at period end): | ||||||||||||||||||||
| Cash and cash equivalents | $ | 58,222 | $ | 51,125 | $ | 82,797 | $ | 69,789 | $ | 48,093 | ||||||||||
| Securities available-for-sale | 183,364 | 189,580 | 192,621 | 146,600 | 155,663 | |||||||||||||||
| Securities held-to-maturity | 3,746 | 3,752 | 3,759 | 45,635 | 46,458 | |||||||||||||||
| Loans held for sale | 65,320 | 62,286 | 74,093 | 53,225 | 73,573 | |||||||||||||||
| Total loans | 1,046,525 | 1,031,821 | 947,537 | 974,530 | 996,617 | |||||||||||||||
| Allowance for loan losses | (14,705 | ) | (14,563 | ) | (13,721 | ) | (14,122 | ) | (12,454 | ) | ||||||||||
| Total assets | 1,401,181 | 1,382,745 | 1,344,429 | 1,338,559 | 1,371,626 | |||||||||||||||
| Non-interest-bearing deposits | 223,579 | 258,161 | 301,742 | 250,007 | 231,169 | |||||||||||||||
| Interest-bearing deposits | 921,435 | 869,393 | 818,124 | 841,488 | 889,816 | |||||||||||||||
| Federal Home Loan Bank advances | 95,000 | 100,000 | 70,000 | 95,000 | 105,000 | |||||||||||||||
| Total liabilities | 1,248,035 | 1,234,052 | 1,197,483 | 1,194,355 | 1,233,596 | |||||||||||||||
| Shareholders' equity | $ | 153,146 | $ | 148,693 | $ | 146,946 | $ | 144,204 | $ | 138,031 | ||||||||||
| Total shares of common stock outstanding | 11,931,131 | 11,773,358 | 11,582,026 | 11,346,498 | 11,235,255 | |||||||||||||||
| Total shares of preferred stock outstanding | 878,049 | 878,049 | 878,049 | 878,049 | 878,049 | |||||||||||||||
| Book value per share of common stock | $ | 12.08 | $ | 11.87 | $ | 11.91 | $ | 11.92 | $ | 11.48 | ||||||||||
| Tangible book value per share of common stock* | 11.56 | 11.34 | 11.37 | 11.36 | 10.93 | |||||||||||||||
| Market value per share of common stock | $ | 18.53 | $ | 18.83 | $ | 20.77 | $ | 19.58 | $ | 17.74 | ||||||||||
| Capital ratios: | ||||||||||||||||||||
| Total risk based capital | 12.45 | % | 12.22 | % | 12.52 | % | 12.41 | % | 11.51 | % | ||||||||||
| Tier 1 risk based capital | 11.33 | % | 11.11 | % | 11.41 | % | 11.28 | % | 10.54 | % | ||||||||||
| Common equity tier 1 capital | 10.66 | % | 10.43 | % | 10.70 | % | 10.58 | % | 9.86 | % | ||||||||||
| Leverage | 10.87 | % | 10.91 | % | 10.77 | % | 10.36 | % | 9.77 | % | ||||||||||
_____________________
*This metric is a non-GAAP financial measure. See below for reconciliation to the most directly comparable GAAP financial measure.
This information is preliminary and based on company data available at the time of the presentation.
CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)
Second Quarter 2018 Earnings Release
| Five Quarter Comparison | ||||||||||||||||||||
| 6/30/18 | 3/31/18 | 12/31/17 | 9/30/17 | 6/30/17 | ||||||||||||||||
| Average Balance Sheet Data: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 63,064 | $ | 60,965 | $ | 64,850 | $ | 59,352 | $ | 62,002 | ||||||||||
| Investment securities | 197,933 | 203,274 | 202,818 | 207,926 | 227,431 | |||||||||||||||
| Loans held for sale | 58,297 | 68,084 | 66,311 | 67,886 | 34,690 | |||||||||||||||
| Loans | 1,041,835 | 983,496 | 956,441 | 991,238 | 1,028,968 | |||||||||||||||
| Assets | 1,396,359 | 1,351,129 | 1,329,621 | 1,367,993 | 1,393,331 | |||||||||||||||
| Interest bearing deposits | 901,076 | 840,871 | 827,732 | 857,344 | 882,721 | |||||||||||||||
| Deposits | 1,138,400 | 1,111,182 | 1,081,380 | 1,094,500 | 1,111,833 | |||||||||||||||
| Federal Home Loan Bank advances | 99,121 | 84,533 | 92,554 | 123,315 | 128,901 | |||||||||||||||
| Liabilities | 1,244,824 | 1,202,854 | 1,181,954 | 1,226,438 | 1,250,544 | |||||||||||||||
| Shareholders' equity | 151,535 | 148,276 | 147,667 | 141,556 | 142,787 | |||||||||||||||
| Performance Ratios: | ||||||||||||||||||||
| Annualized return on average assets | 1.01 | % | 0.96 | % | 0.03 | % | 1.28 | % | -0.96 | % | ||||||||||
| Annualized return on average equity | 9.30 | % | 8.74 | % | 0.25 | % | 12.38 | % | -9.39 | % | ||||||||||
| Net interest margin (1) | 3.46 | % | 3.39 | % | 3.31 | % | 3.31 | % | 3.20 | % | ||||||||||
| Annualized Non-interest income to average assets | 0.79 | % | 0.93 | % | 0.82 | % | 0.98 | % | 0.77 | % | ||||||||||
| Efficiency ratio | 69.7 | % | 68.8 | % | 65.6 | % | 59.6 | % | 62.1 | % | ||||||||||
| Loans by Type (at period end): | ||||||||||||||||||||
| Commercial and industrial | $ | 386,065 | $ | 408,353 | $ | 373,248 | $ | 394,600 | $ | 406,636 | ||||||||||
| Commercial real estate - owner occupied | 121,475 | 131,741 | 101,132 | 103,183 | 97,634 | |||||||||||||||
| Commercial real estate - non-owner occupied | 286,769 | 258,016 | 249,489 | 263,594 | 288,124 | |||||||||||||||
| Construction and development | 96,580 | 91,953 | 82,586 | 79,951 | 62,152 | |||||||||||||||
| Consumer real estate | 109,915 | 104,224 | 102,581 | 100,811 | 99,750 | |||||||||||||||
| Consumer | 9,671 | 9,524 | 6,862 | 6,289 | 4,096 | |||||||||||||||
| Other | 36,428 | 28,750 | 31,984 | 26,461 | 38,784 | |||||||||||||||
| Asset Quality Data: | ||||||||||||||||||||
| Allowance for loan losses to total loans | 1.41 | % | 1.41 | % | 1.45 | % | 1.45 | % | 1.25 | % | ||||||||||
| Allowance for loan losses to non-performing loans | 271 | % | 1096 | % | 509 | % | 446 | % | 386 | % | ||||||||||
| Nonaccrual loans | $ | 5,419 | $ | 1,329 | $ | 2,695 | $ | 3,165 | $ | 3,229 | ||||||||||
| Troubled debt restructurings | 1,173 | 1,190 | 1,206 | 1,222 | 1,239 | |||||||||||||||
| Loans - over 89 days past due and accruing | 216 | - | 231 | 27 | 15 | |||||||||||||||
| Total non-performing loans | 5,419 | 1,329 | 2,695 | 3,165 | 3,229 | |||||||||||||||
| OREO and repossessed assets | - | - | - | - | - | |||||||||||||||
| Total non-performing assets | 5,419 | 1,329 | 2,695 | 3,165 | 3,229 | |||||||||||||||
| Non-performing loans to total loans | 0.52 | % | 0.13 | % | 0.28 | % | 0.32 | % | 0.32 | % | ||||||||||
| Non-performing assets to total assets | 0.39 | % | 0.10 | % | 0.20 | % | 0.24 | % | 0.24 | % | ||||||||||
| Non-performing assets to total loans and OREO | 0.52 | % | 0.13 | % | 0.28 | % | 0.32 | % | 0.32 | % | ||||||||||
| Annualized net charge-offs (recoveries) to average loans | 0.01 | % | -0.07 | % | 0.15 | % | -0.75 | % | 4.38 | % | ||||||||||
| Net charge-offs (recoveries) | $ | 27 | $ | (165 | ) | $ | 372 | $ | (1,863 | ) | $ | 11,233 | ||||||||
| Interest Rates and Yields: | ||||||||||||||||||||
| Loans | 5.04 | % | 4.74 | % | 4.54 | % | 4.55 | % | 4.29 | % | ||||||||||
| Securities (1) | 2.82 | % | 2.69 | % | 2.84 | % | 2.72 | % | 2.74 | % | ||||||||||
| Total interest-earning assets (1) | 4.58 | % | 4.29 | % | 4.11 | % | 4.12 | % | 3.90 | % | ||||||||||
| Deposits | 1.11 | % | 0.88 | % | 0.78 | % | 0.77 | % | 0.70 | % | ||||||||||
| Borrowings and repurchase agreements | 2.53 | % | 2.35 | % | 2.04 | % | 1.81 | % | 1.18 | % | ||||||||||
| Total interest-bearing liabilities | 1.51 | % | 1.27 | % | 1.12 | % | 1.08 | % | 0.92 | % | ||||||||||
| Other Information: | ||||||||||||||||||||
| Full-time equivalent employees | 183 | 182 | 175 | 168 | 169 | |||||||||||||||
_____________________
This information is preliminary and based on company data available at the time of the presentation.
(1) Net Interest Margin, Securities yields, and Total interest-earning asset yields are calculated on a tax-equivalent basis
CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Analysis of Interest Income and Expense, Rates and Yields (unaudited) (dollars in thousands)
Second Quarter 2018 Earnings Release
| For the Three Months Ended June 30, | ||||||||||||||||||||||||
| 2018 | 2017 | |||||||||||||||||||||||
| Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate | Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate | |||||||||||||||||||
| Interest-Earning Assets | ||||||||||||||||||||||||
| Loans (1) | $ | 1,041,835 | $ | 13,090 | 5.04 | % | $ | 1,028,968 | $ | 11,011 | 4.29 | % | ||||||||||||
| Loans held for sale | 58,297 | 706 | 4.86 | % | 34,690 | 362 | 4.18 | % | ||||||||||||||||
| Securities: | ||||||||||||||||||||||||
| Taxable investment securities (2) | 155,552 | 1,067 | 2.74 | % | 174,075 | 1,069 | 2.46 | % | ||||||||||||||||
| Investment securities exempt from federal income tax (3) | 42,381 | 261 | 3.12 | % | 53,356 | 317 | 3.66 | % | ||||||||||||||||
| Total securities | 197,933 | 1,328 | 2.82 | % | 227,431 | 1,386 | 2.74 | % | ||||||||||||||||
| Cash balances in other banks | 50,335 | 211 | 1.68 | % | 49,735 | 115 | 0.93 | % | ||||||||||||||||
| Funds sold | 2,898 | 19 | 2.57 | % | 3,637 | 16 | 1.78 | % | ||||||||||||||||
| Total interest-earning assets | 1,351,298 | 15,354 | 4.58 | % | 1,344,461 | 12,890 | 3.90 | % | ||||||||||||||||
| Noninterest-earning assets | 45,061 | 48,870 | ||||||||||||||||||||||
| Total assets | $ | 1,396,359 | $ | 1,393,331 | ||||||||||||||||||||
| Interest-Bearing Liabilities | ||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
| Interest-bearing transaction accounts | $ | 279,705 | 892 | 1.28 | % | $ | 302,532 | 586 | 0.78 | % | ||||||||||||||
| Savings and money market deposits | 428,330 | 1,413 | 1.32 | % | 379,800 | 773 | 0.82 | % | ||||||||||||||||
| Time deposits | 193,041 | 834 | 1.73 | % | 200,389 | 574 | 1.15 | % | ||||||||||||||||
| Total interest-bearing deposits | 901,076 | 3,139 | 1.40 | % | 882,721 | 1,933 | 0.88 | % | ||||||||||||||||
| Borrowings and repurchase agreements | 99,286 | 628 | 2.53 | % | 130,824 | 386 | 1.18 | % | ||||||||||||||||
| Total interest-bearing liabilities | 1,000,362 | 3,767 | 1.51 | % | 1,013,545 | 2,319 | 0.92 | % | ||||||||||||||||
| Noninterest-bearing deposits | 237,324 | 229,111 | ||||||||||||||||||||||
| Total funding sources | 1,237,686 | 1,242,656 | ||||||||||||||||||||||
| Noninterest-bearing liabilities | 7,138 | 7,888 | ||||||||||||||||||||||
| Shareholders’ equity | 151,535 | 142,787 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,396,359 | $ | 1,393,331 | ||||||||||||||||||||
| Net interest spread (4) | 3.07 | % | 2.98 | % | ||||||||||||||||||||
| Net interest income/margin (5) | $ | 11,587 | 3.46 | % | $ | 10,571 | 3.20 | % | ||||||||||||||||
- Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
- Taxable investment securities include restricted equity securities.
- Yields on tax exempt securities, total securities, and total interest-earning assets are shown on a tax equivalent basis.
- Net interest spread is the average yield on total average interest-earning assets minus the average rate on total average interest-bearing liabilities.
- Net interest margin is annualized net interest income calculated on a tax equivalent basis divided by total average interest-earning assets for the period.
This information is preliminary and based on company data available at the time of the presentation.
CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Analysis of Interest Income and Expense, Rates and Yields (unaudited) (dollars in thousands)
Second Quarter 2018 Earnings Release
| For the Six Months Ended June 30, | ||||||||||||||||||||||||
| 2018 | 2017 | |||||||||||||||||||||||
| Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate | Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate | |||||||||||||||||||
| Interest-Earning Assets | ||||||||||||||||||||||||
| Loans (1) | $ | 1,012,827 | $ | 24,574 | 4.89 | % | $ | 1,001,810 | $ | 21,205 | 4.27 | % | ||||||||||||
| Loans held for sale | 63,163 | 1,456 | 4.65 | % | 31,542 | 635 | 4.06 | % | ||||||||||||||||
| Securities: | ||||||||||||||||||||||||
| Taxable investment securities (2) | 155,918 | 2,072 | 2.66 | % | 177,840 | 2,150 | 2.42 | % | ||||||||||||||||
| Investment securities exempt from federal income tax (3) | 44,671 | 546 | 3.09 | % | 54,391 | 642 | 3.63 | % | ||||||||||||||||
| Total securities | 200,589 | 2,618 | 2.75 | % | 232,231 | 2,792 | 2.70 | % | ||||||||||||||||
| Cash balances in other banks | 49,465 | 411 | 1.68 | % | 48,893 | 219 | 0.91 | % | ||||||||||||||||
| Funds sold | 3,216 | 39 | 2.41 | % | 2,689 | 18 | 1.39 | % | ||||||||||||||||
| Total interest-earning assets | 1,329,260 | 29,098 | 4.44 | % | 1,317,165 | 24,869 | 3.86 | % | ||||||||||||||||
| Noninterest-earning assets | 44,610 | 49,766 | ||||||||||||||||||||||
| Total assets | $ | 1,373,870 | $ | 1,366,931 | ||||||||||||||||||||
| Interest-Bearing Liabilities | ||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
| Interest-bearing transaction accounts | $ | 283,002 | 1,646 | 1.17 | % | $ | 316,502 | 1,204 | 0.77 | % | ||||||||||||||
| Savings and money market deposits | 404,064 | 2,418 | 1.21 | % | 406,937 | 1,587 | 0.79 | % | ||||||||||||||||
| Time deposits | 184,074 | 1,483 | 1.62 | % | 184,446 | 1,046 | 1.14 | % | ||||||||||||||||
| Total interest-bearing deposits | 871,140 | 5,547 | 1.28 | % | 907,885 | 3,837 | 0.85 | % | ||||||||||||||||
| Borrowings and repurchase agreements | 92,006 | 1,118 | 2.45 | % | 88,206 | 530 | 1.21 | % | ||||||||||||||||
| Total interest-bearing liabilities | 963,146 | 6,665 | 1.40 | % | 996,091 | 4,367 | 0.88 | % | ||||||||||||||||
| Noninterest-bearing deposits | 253,727 | 219,762 | ||||||||||||||||||||||
| Total funding sources | 1,216,873 | 1,215,853 | ||||||||||||||||||||||
| Noninterest-bearing liabilities | 7,083 | 8,905 | ||||||||||||||||||||||
| Shareholders’ equity | 149,914 | 142,173 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,373,870 | $ | 1,366,931 | ||||||||||||||||||||
| Net interest spread (4) | 3.04 | % | 2.98 | % | ||||||||||||||||||||
| Net interest income/margin (5) | $ | 22,433 | 3.43 | % | $ | 20,502 | 3.19 | % | ||||||||||||||||
- Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
- Taxable investment securities include restricted equity securities.
- Yields on tax exempt securities, total securities, and total interest-earning assets are shown on a tax equivalent basis.
- Net interest spread is the average yield on total average interest-earning assets minus the average rate on total average interest-bearing liabilities.
- Net interest margin is annualized net interest income calculated on a tax equivalent basis divided by total average interest-earning assets for the period.
This information is preliminary and based on company data available at the time of the presentation.
CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)
Second Quarter 2018 Earnings Release
| Three Months Ended | ||||||||||||||||||||
| June 30, 2018 | March 31, 2018 | December 31, 2017 | September 31, 2017 | June 30, 2017 | ||||||||||||||||
| Operating net income (loss): | ||||||||||||||||||||
| Net income (loss) | $ | 3,513 | $ | 3,193 | $ | 91 | $ | 4,420 | $ | (3,342 | ) | |||||||||
| Add: merger related expenses | 335 | — | — | — | — | |||||||||||||||
| Less: income tax impact of merger related expenses | (88 | ) | — | — | — | — | ||||||||||||||
| Operating net income (loss) | $ | 3,760 | $ | 3,193 | $ | 91 | $ | 4,420 | $ | (3,342 | ) | |||||||||
| Operating diluted net income (loss) per share of common stock: | ||||||||||||||||||||
| Operating net income (loss) | $ | 3,760 | $ | 3,193 | $ | 91 | $ | 4,420 | $ | (3,342 | ) | |||||||||
| Weighted average shares - diluted | 13,067,223 | 12,975,981 | 12,938,288 | 12,750,423 | 12,740,104 | |||||||||||||||
| Operating diluted net income (loss) per share of common stock | $ | 0.29 | $ | 0.25 | $ | 0.01 | $ | 0.35 | $ | (0.26 | ) | |||||||||
| Operating annualized return on average assets: | ||||||||||||||||||||
| Operating net income (loss) | $ | 3,760 | $ | 3,193 | $ | 91 | $ | 4,420 | $ | (3,342 | ) | |||||||||
| Average assets | $ | 1,396,359 | $ | 1,351,129 | $ | 1,329,621 | $ | 1,367,993 | $ | 1,393,331 | ||||||||||
| Operating annualized return on average assets | 1.08 | % | 0.96 | % | 0.03 | % | 1.28 | % | -0.96 | % | ||||||||||
| Operating annualized return on average tangible equity: | ||||||||||||||||||||
| Average total shareholders' equity | $ | 151,535 | $ | 148,276 | $ | 147,667 | $ | 141,556 | $ | 142,787 | ||||||||||
| Less: average intangible assets | (6,228 | ) | (6,238 | ) | (6,248 | ) | (6,258 | ) | (6,271 | ) | ||||||||||
| Average tangible equity | 145,307 | 142,038 | 141,419 | 135,298 | 136,516 | |||||||||||||||
| Operating net income (loss) | $ | 3,760 | $ | 3,193 | $ | 91 | $ | 4,420 | $ | (3,342 | ) | |||||||||
| Operating annualized return on average tangible equity | 10.38 | % | 9.12 | % | 0.26 | % | 12.96 | % | -9.82 | % | ||||||||||
| Operating efficiency ratio: | ||||||||||||||||||||
| Total noninterest expense | $ | 10,005 | $ | 9,580 | $ | 8,699 | $ | 8,474 | $ | 8,217 | ||||||||||
| Less: merger related expenses | (335 | ) | — | — | — | — | ||||||||||||||
| Total operating noninterest expense | 9,670 | 9,580 | 8,699 | 8,474 | 8,217 | |||||||||||||||
| Net interest income | 11,587 | 10,846 | 10,518 | 10,843 | 10,571 | |||||||||||||||
| Total noninterest income | 2,765 | 3,088 | 2,736 | 3,372 | 2,666 | |||||||||||||||
| Total revenues | $ | 14,352 | $ | 13,934 | $ | 13,254 | $ | 14,215 | $ | 13,237 | ||||||||||
| Operating efficiency ratio: | 67.38 | % | 68.75 | % | 65.63 | % | 59.61 | % | 62.08 | % | ||||||||||
| June 30, 2018 | March 31, 2018 | December 31, 2017 | September 31, 2017 | June 30, 2017 | ||||||||||||||||
| Tangible Equity: | ||||||||||||||||||||
| Total shareholders' equity | $ | 153,146 | $ | 148,693 | $ | 146,946 | $ | 144,204 | $ | 138,031 | ||||||||||
| Less: intangible assets | (6,228 | ) | (6,238 | ) | (6,248 | ) | (6,258 | ) | (6,271 | ) | ||||||||||
| Tangible equity | $ | 146,918 | $ | 142,455 | $ | 140,698 | $ | 137,946 | $ | 131,760 | ||||||||||
| Tangible Common Equity: | ||||||||||||||||||||
| Tangible equity | $ | 146,918 | $ | 142,455 | $ | 140,698 | $ | 137,946 | $ | 131,760 | ||||||||||
| Less: preferred equity | (9,000 | ) | (9,000 | ) | (9,000 | ) | (9,000 | ) | (9,000 | ) | ||||||||||
| Tangible common equity | $ | 137,918 | $ | 133,455 | $ | 131,698 | $ | 128,946 | $ | 122,760 | ||||||||||
| Tangible Book Value per Share of Common Stock: | ||||||||||||||||||||
| Tangible common equity | $ | 137,918 | $ | 133,455 | $ | 131,698 | $ | 128,946 | $ | 122,760 | ||||||||||
| Total shares of common stock outstanding | 11,931,131 | 11,773,358 | 11,582,026 | 11,346,498 | 11,235,255 | |||||||||||||||
| Tangible book value per share of common stock | $ | 11.56 | $ | 11.34 | $ | 11.37 | $ | 11.36 | $ | 10.93 | ||||||||||
CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)
Second Quarter 2018 Earnings Release
| Six Months Ended | ||||||||
| June 30, 2018 | June 30, 2017 | |||||||
| Operating net income (loss): | ||||||||
| Net income (loss) | $ | 6,707 | $ | (3,010 | ) | |||
| Add: merger related expenses | 335 | — | ||||||
| Less: income tax impact of merger related expenses | (88 | ) | — | |||||
| Operating net income (loss) | $ | 6,954 | $ | (3,010 | ) | |||
| Operating diluted net income (loss) per share of common stock: | ||||||||
| Operating net income (loss) | $ | 6,954 | $ | (3,010 | ) | |||
| Weighted average shares - diluted | 13,021,744 | 12,761,989 | ||||||
| Operating diluted net income (loss) per share of common stock | $ | 0.53 | $ | (0.24 | ) | |||
| Operating annualized return on average assets: | ||||||||
| Operating net income (loss) | $ | 6,954 | $ | (3,010 | ) | |||
| Average assets | $ | 1,373,869 | $ | 1,366,931 | ||||
| Operating annualized return on average assets | 1.02 | % | -0.44 | % | ||||
| Operating annualized return on average tangible equity: | ||||||||
| Average total shareholders' equity | $ | 149,914 | $ | 142,173 | ||||
| Less: average intangible assets | (6,233 | ) | (6,278 | ) | ||||
| Average tangible equity | 143,681 | 135,895 | ||||||
| Operating net income (loss) | $ | 6,954 | $ | (3,010 | ) | |||
| Operating annualized return on average tangible equity | 9.76 | % | -4.47 | % | ||||
| Operating efficiency ratio: | ||||||||
| Total noninterest expense | $ | 19,586 | $ | 16,592 | ||||
| Less: merger related expenses | (335 | ) | — | |||||
| Total operating noninterest expense | 19,251 | 16,592 | ||||||
| Net interest income | 22,433 | 20,502 | ||||||
| Total noninterest income | 5,854 | 4,799 | ||||||
| Total revenues | $ | 28,287 | $ | 25,301 | ||||
| Operating efficiency ratio: | 68.06 | % | 65.58 | % | ||||