CapStar Financial Holdings, Inc. Announces First Quarter 2018 Results

NASHVILLE, Tenn., April 26, 2018 (GLOBE NEWSWIRE) -- CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) reported net income of $3.2 million, or $0.25 per share on a fully diluted basis, for the three months ended March 31, 2018, compared to net income of $0.33 million, or $0.03 per share on a fully diluted basis, for the three months ended March 31, 2017. 

"In the context of sound, profitable growth, delivering strong and consistent financial performance remains a priority at CapStar,” said Claire W. Tucker, CapStar’s president and chief executive officer. “Our performance during the first quarter exemplifies our focus on these objectives, and we remain committed to achieving a sustainable 1.0% return on average assets by the end of the year. CapStar’s talented group of bankers continues to leverage their years of experience in the market, providing creative solutions for our clients that reflect the understanding and appreciation of their unique financial service needs.”

Soundness 

• The allowance for loan losses represented 1.41% of total loans at March 31, 2018 compared to 1.39% at March 31, 2017. 

• Non-performing assets as a percentage of total loans and other real estate owned was 0.13% at March 31, 2018 compared to 1.36% at March 31, 2017. 

• Annualized net charge-offs (recoveries) to average loans was (0.07%) for the three months ended March 31, 2018 compared to 0.43% for the same period in 2017. 

• The total risk-based capital ratio was 12.22% at March 31, 2018 compared to 12.13% at March 31, 2017. 

Profitability 

• Return on average assets ("ROAA") for the three months ended March 31, 2018 was 0.96% compared to 0.10% for the same period in 2017. 

• The net interest margin (“NIM”) for the three months ended March 31, 2018 was 3.37% compared to 3.12% for the same period in 2017. 

• The efficiency ratio for the three months ended March 31, 2018 was 68.8% compared to 69.4% for the same period in 2017. 

Growth 

• Average gross loans for the quarter ended March 31, 2018 increased 0.9%, to $983.5 million, compared to $974.4 million for the same period in 2017. 

•  Average demand deposits for the quarter ended March 31, 2018 increased 28.5%, to $270.3 million, compared to $210.3 million for the same period in 2017. 

• Average total assets for the quarter ended March 31, 2018 increased 0.8%, to $1.35 billion, compared to $1.34 billion for the same period in 2017. 

“After a couple of quarters of sluggish loan growth and elevated payoffs, we are pleased to see the rebound in loan growth, as we posted a record $84 million for end of period quarterly loan growth,” said Rob Anderson, chief financial officer and chief administrative officer of CapStar. 

Conference Call and Webcast Information 

CapStar will host a conference call and webcast at 9:00 a.m. Central Time on Friday, April 27, 2018. During the call, management will review the first quarter results and operational highlights. Interested parties may listen to the call by dialing (844) 412-1002. The conference ID number is 4796055. 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 March 31, 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 $148.7 million. Visit www.capstarbank.com for more information. 

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 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”): adjusted net income, adjusted diluted net income per share, adjusted return on average assets, adjusted return on average tangible common equity and tangible book value per share. 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)
First Quarter 2018 Earnings Release 

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)
First Quarter 2018 Earnings Release 

*This metric is a non-GAAP financial measure. See below for a 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)
First Quarter 2018 Earnings Release 

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)
First Quarter 2018 Earnings Release 

(1) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
(2) Taxable investment securities include restricted equity securities.
(3) Balances for investment securities exempt from federal income tax are not calculated on a tax equivalent basis.
(4) Net interest spread is the average yield on total average interest-earning assets minus the average rate on total average interest-bearing liabilities.
(5) Net interest margin is net interest income divided by total average interest-earning assets and is presented in the table above on an annualized basis. 

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)
First Quarter 2018 Earnings Release