Truxton Corporation Reports Second Quarter 2021 Results
07/22/2021 - 08:30 AM
NASHVILLE, Tenn., July 22, 2021 (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, 2021. Second quarter net income attributable to common shareholders was $3.6 million or $1.22 per diluted share compared to $2.6 million or $0.92 per diluted share for the same quarter in 2020. Net income rose by 36% for the quarter compared to the second quarter of 2020 while fully diluted earnings per share rose by 33% .
“Truxton’s second quarter 2021 performance was exceptional in many ways,” said Chairman and CEO Tom Stumb. “Wealth management revenue increased 33% from this quarter last year. Securities markets were strong, and many new families entrusted their wealth to the professionals at Truxton. Loans, excluding Paycheck Protection Program (PPP) loans, grew 18% from the end of June 2020. Our lenders continued to deepen relationships with families and businesses in our market. Nashville continues to experience very strong economic and population growth, and Truxton is a beneficiary. This quarter’s strong performance resulted in part from $254,000 in PPP loan fee recognition, which will continue to boost earnings as the remainder of these loans are forgiven over the next two quarters but is not expected to persist into next year.”
Key Highlights
Non-interest income grew to $3.9 million in the second quarter, an increase of 10% from the first quarter of 2021 and 33% in comparison to the second quarter of 2020. Wealth management services constituted 95% of non-interest income in the second quarter of 2021. Loans rose by 5% to $452 million compared to March 31, 2021, and were up 9% compared to June 30, 2020. Excluding PPP loans, loans rose by 8% compared to March 31, 2021, and 18% compared to June 30, 2020. Total deposits increased by 8% from March 31, 2021 to $707.4 million , and increased by 38% in comparison to June 30, 2020. 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 2021 was 2.71% , an increase of 7 basis points from the 2.64% experienced in the first quarter of 2021, and a decrease of 42 basis points from the second quarter of 2020. Cost of funds was 0.46% in the second quarter of 2021, down from 0.49% for the quarter ended March 31, 2021, but up from 0.36% the quarter ended June 30, 2020. The year-over-year increase was the result of the issuance of $15 million of 4.5% subordinated notes in September 2020. We continue to have excess liquidity because of the deposit growth we experienced in 2020 that has continued into the second quarter of 2021. Asset quality remains sound at Truxton. Truxton had $2 million in non-performing assets at June 30, 2021, 98% of which was represented by a single residential mortgage. Truxton had $1,000 of charge-offs in the quarter, $8,000 in the trailing quarter, and $8,000 in the same quarter a year ago. All of these charge-offs are from small loans acquired from a housing not-for profit. Allowance for loan losses was $4.6 million , $4.6 million , and $4.0 million at quarter end June 30, 2021, March 31, 2020, and June 30, 2020, respectively. For the same three periods, the Bank’s allowance was 1.00% , 1.05% , and 0.95% , respectively, of gross loans (including PPP loans) outstanding at period end. Tax expense increased by 27% from the March 31, 2021 quarter and by 20% from the June 30, 2020 period. 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 strong. Its Tier 1 leverage ratio was 9.47% at June 30, 2021, 9.39% at March 31, 2021, and 9.82% at June 30, 2020. Book value per common share was $27.35 , $25.93 , and $24.41 at June 30, 2021, March 31, 2021, and June 30, 2020, respectively. During the twelve months ended June 30, 2021, Truxton Corporation paid dividends of $2.16 per common share. About Truxton Trust
Truxton Corporation Consolidated Balance Sheets (000's) (Unaudited) June 30, 2021* March 31, 2021* June 30, 2020* ASSETS Cash and due from financial institutions $ 10,232 $ 11,101 $ 10,581 Interest bearing deposits in other financial institutions 92,671 65,624 70,022 Federal funds sold 5,375 4,923 8,559 Cash and cash equivalents 108,278 81,648 89,162 Time deposits in other financial institutions 2,185 2,187 4,683 Securities available for sale 235,032 228,214 137,372 Gross loans 441,997 408,232 373,263 Allowance for loan losses (4,575 ) (4,574 ) (4,003 ) Paycheck Protection Program Loans 15,068 27,593 46,639 Net loans 452,490 431,251 415,899 Bank owned life insurance 10,288 10,236 10,079 Restricted equity securities 3,228 3,221 2,695 Premises and equipment, net 405 468 454 Accrued interest receivable 2,260 2,500 2,447 Deferred tax asset, net - 352 - Other assets 6,531 6,333 7,808 Total assets $ 820,697 $ 766,410 $ 670,599 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits Non-interest bearing $ 164,176 $ 179,883 $ 158,062 Interest bearing 543,238 475,616 354,346 Total deposits 707,414 655,499 512,408 Federal Home Loan Bank advances 12,835 15,533 33,036 Federal Funds purchased - - - Paycheck Protection Program Liquidity Facility advances - - 46,639 Subordinated debt 14,748 14,554 - Other liabilities 6,947 6,016 9,303 Total liabilities 741,944 691,602 601,386 SHAREHOLDERS' EQUITY Additional paid-in capital 31,556 31,745 30,591 Retained earnings 43,446 40,761 36,971 Accumulated other comprehensive income (loss) 3,751 2,302 1,651 Total shareholders' equity 78,753 74,808 69,213 Total liabilities and shareholders' equity $ 820,697 $ 766,410 $ 670,599 *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, March 31, June 30, June 30, June 30, Non-interest income Wealth management services $ 3,726 $ 3,430 $ 2,793 $ 7,156 $ 5,535 Service charges on deposit accounts 82 59 60 141 139 Securities gains (losses), net 0 0 0 0 0 Bank owned life insurance income 51 51 53 102 107 Other 50 16 34 66 182 Total non-interest income 3,909 3,556 2,940 7,465 5,963 Interest income Loans, including fees $ 4,434 $ 4,202 $ 4,282 $ 8,636 $ 8,459 Taxable securities 719 661 486 1,380 1,020 Tax-exempt securities 395 379 245 774 441 Interest bearing deposits 46 62 54 108 163 Federal funds sold 1 0 2 1 16 Other interest income 47 20 34 67 46 Total interest income 5,642 5,324 5,103 10,966 10,145 Interest expense Deposits 514 525 371 1,039 1,102 Short-term borrowings - - - - - Subordinated debentures 194 198 - 392 - Long-term borrowings 72 77 129 149 220 Total interest expense 780 800 500 1,580 1,322 Net interest income 4,862 4,524 4,603 9,386 8,823 Provision for loan losses 0 92 418 92 603 Net interest income after provision for loan losses 4,862 4,432 4,185 9,294 8,220 Total revenue, net 8,771 7,988 7,125 16,759 14,183 Non interest expense Salaries and employee benefits 3,230 3,106 2,797 6,336 5,726 Occupancy 246 221 222 467 422 Furniture and equipment 42 46 30 88 56 Data processing 327 344 290 671 552 Wealth management processing fees 164 180 130 343 254 Advertising and public relations 34 39 25 74 68 Professional services 183 127 156 310 324 FDIC insurance assessments 42 42 38 84 53 Other 221 228 215 449 479 Total non interest expense 4,489 4,333 3,903 8,822 7,934 Income before income taxes 4,282 3,655 3,222 7,937 6,249 Income tax expense 731 574 608 1,305 1,159 Net income $ 3,551 $ 3,081 $ 2,614 $ 6,632 $ 5,090 Earnings per share: Basic $ 1.23 $ 1.07 $ 0.93 $ 2.30 $ 1.83 Diluted $ 1.22 $ 1.06 $ 0.92 $ 2.29 $ 1.81 *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, 2021* March 31, 2021* June 30, 2020* Per Common Share Data Net income attributable to shareholders, per share Basic $1.23 $1.07 $0.93 Diluted $1.22 $1.06 $0.92 Book value per common share $27.35 $25.93 $24.41 Tangible book value per common share $27.35 $25.93 $24.41 Basic weighted average comm shares 2,814,196 2,794,175 2,740,504 Diluted weighted average common shares 2,825,668 2,806,856 2,768,173 Common shares outstanding at period end 2,879,177 2,885,233 2,834,951 Selected Balance Sheet Data Tangible common equity (TEC) ratio 9.60% 9.76% 10.32% Average Loans $446,079 $428,864 $419,360 Average earning assets (1) $732,416 $709,535 $599,030 Average total assets $765,391 $743,462 $629,800 Average stockholders' equity $77,148 $77,851 $67,204 Selected Asset Quality Measures Nonaccrual loans 2007 2007 2059 90+ days past due still accruing 38 156 0 Total nonperforming loans 2045 2163 2059 Total nonperforming assets 2045 2163 2059 Net charge offs (recoveries) 1 8 8 Nonperforming loans to assets 0.24% 0.26% 0.31% Nonperforming assets to total assets 0.25% 0.28% 0.31% Nonperforming assets to total loans and other real estate 0.45% 0.46% 0.49% Allowance for loan losses to total loans 1.00% 1.05% 0.95% Net charge offs (recoveries) to average loans 0.00% 0.00% 0.00% Capital Ratios (Bank Subsidiary Only) Tier 1 leverage 9.47% 9.39% 9.82% Common equity tier 1 13.80% 13.99% 13.61% Total risk-based capital 14.70% 14.92% 14.49% Selected Performance Ratios Efficiency ratio 51.67% 53.62% 54.22% Return on average assets (ROA) 1.86% 1.68% 1.67% Return on average stockholders' equity (ROE) 18.46% 16.05% 15.64% Return on tangible common equity (ROTCE) 18.46% 16.05% 15.64% Net interest margin 2.71% 2.64% 3.13% *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, 2021* March 31, 2021* June 30, 2020* Average Rates/ Interest Average Rates/ Interest Average Rates/ Interest Earning Assets Loans $ 446,079 3.64 $ 4,049 $ 428,864 3.65 $ 3,861 $ 419,360 3.92 $ 4,092 Loan fees $ 0 0.35 $ 385 $ 0 0.32 $ 342 $ 0 0.19 $ 189 Loans with fees $ 446,079 3.99 $ 4,433 $ 428,864 3.97 $ 4,203 $ 419,360 4.11 $ 4,281 Mortgage loans held for sale $ 108 3.16 $ 1 $ 96 2.90 $ 1 $ 87 5.20 $ 1 Federal funds sold $ 2,124 0.06 $ 0 $ 2,173 0.05 $ 0 $ 5,372 0.12 $ 2 Deposits with banks $ 53,857 0.34 $ 46 $ 66,900 0.37 $ 62 $ 49,801 0.44 $ 54 Investment securities - taxable $ 164,584 1.75 $ 719 $ 149,117 1.77 $ 660 $ 90,256 2.15 $ 486 Investment securities - tax-exempt $ 65,665 3.25 $ 395 $ 62,385 3.29 $ 379 $ 34,403 3.86 $ 245 Total Earning Assets $ 732,416 3.14 $ 5,594 $ 709,535 3.10 $ 5,305 $ 599,279 3.46 $ 5,069 Non interest earning assets Allowance for loan losses (4,575 ) (4,541 ) (3,702 ) Cash and due from banks $ 10,601 $ 10,346 $ 8,776 Premises and equipment $ 403 $ 460 $ 400 Accrued interest receivable $ 2,114 $ 2,209 $ 1,989 Other real estate $ 0 $ 0 $ 0 Other assets $ 20,112 $ 19,614 $ 20,726 Unrealized gain (loss) on inv. securities 4,320 5,839 2,332 Total Assets $ 765,391 $ 743,462 $ 629,800 Interest bearing liabilities Interest bearing demand $ 34,695 0.18 $ 15 $ 36,530 0.39 $ 35 $ 33,084 0.22 $ 18 Savings and Money Market $ 559,805 0.34 $ 470 $ 530,414 0.35 $ 464 $ 408,757 0.30 $ 300 Time deposits - Retail $ 9,920 0.61 $ 15 $ 8,291 0.73 $ 15 $ 10,977 1.24 $ 34 Time Deposits - Wholesale $ 20,271 0.28 $ 14 $ 24,299 0.19 $ 11 $ 2,087 3.72 $ 19 Total interest bearing deposits $ 624,691 0.33 $ 514 $ 599,534 0.36 $ 525 $ 454,905 0.33 $ 371 Federal home Loan Bank advances $ 14,603 1.95 $ 72 $ 15,981 1.93 $ 77 $ 35,720 1.13 $ 102 Subordinated debt $ 14,679 5.23 $ 194 $ 14,798 5.34 $ 198 $ 0 0.00 $ 0 Other borrowings $ 1,090 0.98 $ 0 $ 1,139 0.61 $ 0 $ 32,931 0.33 $ 27 Total borrowed funds $ 30,371 3.47 $ 266 $ 31,918 3.44 $ 275 $ 68,651 0.74 $ 129 Total interest bearing liabilities $ 655,062 0.48 $ 780 $ 631,452 0.51 $ 800 $ 523,556 0.38 $ 500 Net interest rate spread 2.66 $ 4,814 2.59 $ 4,505 3.08 $ 4,574 Non-interest bearing deposits $ 28,186 $ 28,242 $ 31,315 Other liabilities $ 4,995 $ 5,916 $ 7,725 Stockholder's equity $ 77,148 $ 77,851 $ 67,204 Total Liabilities and Stockholder's Equity $ 765,391 $ 743,462 $ 629,800 Cost of funds 0.46 0.49 0.36 Net interest margin 2.71 2.64 3.13 *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, 2021* June 30, 2020* Average Rates/ Interest Average Rates/ Interest Earning Assets Loans $ 437,519 4.21 $ 7,910 $ 393,688 4.21 $ 8,251 Loan fees $ 0 0.12 $ 725 $ 0 0.12 $ 228 Loans with fees $ 437,519 4.33 $ 8,635 $ 393,688 4.33 $ 8,479 Mortgage loans held for sale $ 102 4.05 $ 2 $ 105 4.05 $ 2 Federal funds sold $ 2,148 0.73 $ 1 $ 4,258 0.73 $ 16 Deposits with banks $ 60,342 0.88 $ 108 $ 37,157 0.88 $ 163 Investment securities - taxable $ 156,893 2.29 $ 1,380 $ 88,960 2.29 $ 1,020 Investment securities - tax-exempt $ 64,034 3.89 $ 774 $ 30,671 3.89 $ 441 Total Earning Assets $ 721,038 3.72 $ 10,898 $ 554,839 3.72 $ 10,121 Non interest earning assets Allowance for loan losses (4,558 ) (3,557 ) Cash and due from banks $ 10,474 $ 8,943 Premises and equipment $ 431 $ 353 Accrued interest receivable $ 2,162 $ 1,820 Other real estate $ 0 $ 0 Other assets $ 19,870 $ 19,489 Unrealized gain (loss) on inv. securities 5,075 2,180 Total Assets $ 754,492 $ 584,068 Interest bearing liabilities Interest bearing demand $ 35,608 0.29 $ 50 $ 32,976 0.45 $ 74 Savings and Money Market $ 545,191 0.35 $ 933 $ 388,489 0.05 $ 905 Time deposits - Retail $ 9,110 0.67 $ 30 $ 10,737 1.35 $ 72 Time Deposits - Wholesale $ 22,274 0.23 $ 25 $ 3,788 2.75 $ 52 Total interest bearing deposits $ 612,182 0.34 $ 1,039 $ 435,990 0.51 $ 1,103 Federal home Loan Bank advances $ 15,288 1.94 $ 149 $ 28,335 1.34 $ 193 Subordinated debt $ 14,738 5.58 $ 392 $ 0 0.00 $ 0 Other borrowings $ 1,114 0.86 $ 0 $ 17,193 0.32 $ 27 Total borrowed funds $ 31,140 3.45 $ 541 $ 45,528 0.96 $ 220 Total interest bearing liabilities $ 643,323 0.49 $ 1,580 $ 481,518 0.55 $ 1,323 Net interest rate spread 2.63 $ 9,318 3.17 $ 8,799 Non-interest bearing deposits $ 28,214 $ 29,393 Other liabilities $ 5,459 $ 6,833 Stockholder's equity $ 77,497 $ 66,319 Total Liabilities and Stockholder's Equity $ 754,492 $ 584,063 Cost of funds 0.47 0.52 Net interest margin 2.68 3.24 *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.
