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CST: 21/08/2019 22:32:41   

CapStar Reports Fully Diluted EPS of $0.31 and Fully Diluted Operating EPS of $0.38 for 2Q2019

27 Days ago

NASHVILLE, Tenn., July 25, 2019 (GLOBE NEWSWIRE) -- CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) reported net income of $5.76 million, or $0.31 per share on a fully diluted basis, for the three months ended June 30, 2019, compared to net income of $3.51 million, or $0.27 per share on a fully diluted basis, for the three months ended June 30, 2018.  Operating(1) net income was $7.02 million, or $0.38 per share on a fully diluted basis, for the three months ended June 30, 2019, compared to $3.76 million, or $0.29 per share on a fully diluted basis, for the three months ended June 30, 2018. 

“Our strong second quarter results show that CapStar’s talented group of bankers continues to deliver a highly-personalized banking experience, providing creative solutions for our clients and creating long-term sustainable value for our shareholders,” said Claire W. Tucker, CapStar’s chief executive officer. 

“Since joining the company in May, I have met with associates and customers across the organization and I am excited about the opportunities in front of us,” added Timothy K. Schools, CapStar’s recently appointed president. “CapStar is well positioned to expand within our dynamic markets and our strong second quarter results demonstrate the importance of our diverse revenue streams,” continued Mr. Schools.

Soundness

  • Non-performing assets as a percentage of total assets were 0.12% at June 30, 2019 compared to 0.39% at June 30, 2018.
  • Annualized net charge-offs to average loans were 0.02% for the three months ended June 30, 2019 compared to 0.01% for the same period in 2018.
  • The total risk based capital ratio was 13.29% at June 30, 2019 compared to 12.53% at June 30, 2018.

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 non-recurring costs resulting from acquisition activity and allow investors to more clearly see the financial results of CapStar’s operations.

  • Operating annualized return on average assets for the three months ended June 30, 2019 was 1.40% compared to 1.08% for the same period in 2018.
  • Operating annualized return on average tangible equity for the three months ended June 30, 2019 was 13.05% compared to 10.38% for the same period in 2018.
  • The operating efficiency ratio for the three months ended June 30, 2019 was 61.39% compared to 67.38% for the same period in 2018.
  • Net interest margin for the three months ended June 30, 2019 was 3.68% compared to 3.46% for the same period in 2018.

“Despite a challenging macro-economic environment with a flat to inverted yield curve, we grew our operating earnings per share by 31.0% from the same period last year and our operating return on average tangible equity grew to 13.05%,” said Rob Anderson, chief financial officer and chief administrative officer of CapStar. “A tremendous quarter by our Mortgage Banking and TriNet teams boosted profitability measures and helped mitigate the decline in our margin,” continued Mr. Anderson. 

Growth

  • Operating EPS on a fully diluted basis increased 31.0% to $0.38 for the quarter ended June 30, 2019, compared to $0.29 on a fully diluted basis for the same period in 2018.
  • Average gross loans for the quarter ended June 30, 2019 increased 41.0% to $1.47 billion, compared to $1.04 billion for the same period in 2018.
    -- Excluding Day 1 loans from Athens, organic average loan growth was 7.9% year-over-year.
  • Average deposits for the quarter ended June 30, 2019 increased 47.4% to $1.68 billion, compared to $1.14 billion for the same period in 2018.
    -- Excluding Day 1 deposits from Athens, organic average deposit growth was 11.9% year-over-year.

“Excluding Day 1 loans from Athens, organic average loan growth was 7.9% year-over-year and “in market” loan growth was 10.3% year-over-year, while our “out of market” loans declined $49 million from $124 million in the second quarter of 2018 to $75 million at June 30, 2019,” said Mr. Anderson.  “In addition, our organic deposit growth was 11.9% year-over-year, excluding the Day 1 deposits acquired from Athens.”

Dividend

On July 25, 2019, the board of directors of CapStar approved a quarterly dividend of $0.05 per share that will be paid on or about August 26, 2019 to all shareholders of record of CapStar’s capital stock as of the close of business on August 12, 2019.

Conference Call and Webcast Information

CapStar will host a conference call and webcast at 9:00 a.m. Central Time on Friday July 26, 2019.  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 7628709.  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, 2019, on a consolidated basis, CapStar had total assets of $2.02 billion, gross loans of $1.44 billion, total deposits of $1.72 billion, and shareholders’ equity of $262.66 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, CapStar’s assets, business, cash flows, condition (financial or otherwise), credit quality, financial performance, liquidity, short and long-term performance goals, prospects, results of operations, strategic initiatives and the timing, benefits, costs and synergies of recently completed and future acquisition, disposition and other growth opportunities, including, without limitation, those relating to the acceptance by customers of Athens of CapStar’s products and services, the ability of CapStar to meet expectations regarding the benefits, costs, synergies, and financial and operational impact of the Athens merger, the possibility that any of the anticipated benefits, costs, synergies and financial and operational improvements of the Athens merger will not be realized or will not be realized as expected and the opportunities to enhance market share in certain markets and market acceptance of CapStar are generally in new markets. 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, 2018 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 its 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.

(1) For a discussion and reconciliation of the Non-GAAP operating measures that exclude merger-related costs unrelated to CapStar’s normal operations, see the section titled “Non-GAAP Disclaimer” and the Non-GAAP financial measures section of the financial statements.

 
CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Income (unaudited) (dollars in thousands, except share data)
Second Quarter 2019 Earnings Release
 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2019     2018     2019     2018  
Interest income:                                
Loans, including fees   $ 20,999     $ 13,796     $ 41,591     $ 26,030  
Securities:                                
Taxable     1,165       943       2,512       1,823  
Tax-exempt     363       257       739       538  
Federal funds sold     6       19       25       39  
Restricted equity securities     214       128       401       257  
Interest-bearing deposits in financial institutions     411       211       857       411  
Total interest income     23,158       15,354       46,125       29,098  
Interest expense:                                
Interest-bearing deposits     1,827       892       3,420       1,646  
Savings and money market accounts     1,782       1,413       3,500       2,418  
Time deposits     2,217       834       4,030       1,483  
Federal funds purchased           1       4       1  
Securities sold under agreements to repurchase                 5        
Federal Home Loan Bank advances     324       627       1,156       1,117  
Total interest expense     6,150       3,767       12,115       6,665  
Net interest income     17,008       11,587       34,010       22,433  
Provision for loan losses           169       886       846  
Net interest income after provision for loan losses     17,008       11,418       33,124       21,587  
Noninterest income:                                
Treasury management and other deposit service charges     813       427       1,611       829  
Net gain (loss) on sale of securities     (121 )     3       (108 )     3  
Tri-Net fees     1,024       325       1,664       853  
Mortgage banking income     3,087       1,383       4,472       2,695  
Other noninterest income     2,229       627       4,128       1,474  
Total noninterest income     7,032       2,765       11,767       5,854  
Noninterest expense:                                
Salaries and employee benefits     8,563       6,340       16,995       12,598  
Data processing and software     1,862       810       3,336       1,608  
Professional fees     501       344       1,043       819  
Occupancy     809       535       1,692       1,056  
Equipment     1,026       602       1,878       1,141  
Regulatory fees     272       233       546       436  
Merger related expenses     1,711       335       2,305       335  
Amortization of intangibles     419       10       850       20  
Other operating     1,307       796       2,551       1,573  
Total noninterest expense     16,470       10,005       31,196       19,586  
Income before income taxes     7,570       4,178       13,695       7,855  
Income tax expense     1,814       665       3,160       1,148  
Net income   $ 5,756     $ 3,513     $ 10,535     $ 6,707  
Per share information:                                
Basic net income per share of common stock   $ 0.33     $ 0.30     $ 0.59     $ 0.57  
Diluted net income per share of common stock   $ 0.31     $ 0.27     $ 0.56     $ 0.52  
Weighted average shares outstanding:                                
Basic     17,663,992       11,845,822       17,723,286       11,755,535  
Diluted     18,650,706       13,067,223       18,740,322       13,021,744  

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 2019 Earnings Release
 
    Five Quarter Comparison  
    6/30/19     3/31/19     12/31/18     9/30/18     6/30/18  
Income Statement Data:                                        
Net interest income   $ 17,008     $ 17,002     $ 17,716     $ 11,543     $ 11,587  
Provision for loan losses           886       1,514       481       169  
Net interest income after provision for loan losses     17,008       16,116       16,202       11,062       11,418  
Treasury management and other deposit service charges     813       798       793       528       427  
Net gain (loss) on sale of securities     (121 )     12       1       (1 )     3  
Tri-Net fees     1,024       641       276       374       325  
Mortgage banking income     3,087       1,385       1,324       1,634       1,383  
Other noninterest income     2,229       1,899       3,993       683       627  
Total noninterest income     7,032       4,735       6,387       3,218       2,765  
Salaries and employee benefits     8,563       8,432       9,475       6,514       6,340  
Data processing and software     1,862       1,474       1,424       803       810  
Professional fees     501       543       534       255       344  
Occupancy     809       883       736       544       535  
Equipment     1,026       852       810       520       602  
Regulatory fees     272       274       364       228       233  
Merger related expenses     1,711       594       8,929       540       335  
Amortization of intangibles     419       430       442       3       10  
Other operating     1,307       1,243       1,118       663       796  
Total noninterest expense     16,470       14,725       23,832       10,070       10,005  
Net income (loss) before income tax expense     7,570       6,126       (1,243 )     4,210       4,178  
Income tax (benefit) expense     1,814       1,346       (535 )     554       665  
Net income (loss)   $ 5,756     $ 4,780     $ (708 )   $ 3,656     $ 3,513  
Weighted average shares - basic     17,663,992       17,783,239       17,509,525       12,040,229       11,845,822  
Weighted average shares - diluted     18,650,706       18,830,933       18,716,562       13,113,775       13,067,223  
Net income (loss) per share, basic   $ 0.33     $ 0.27     $ (0.04 )   $ 0.30     $ 0.30  
Net income (loss) per share, diluted     0.31       0.25       (0.04 )     0.28       0.27  
Balance Sheet Data (at period end):                                        
Cash and cash equivalents   $ 156,085     $ 120,321     $ 105,443     $ 52,589     $ 58,222  
Securities available-for-sale     194,957       233,691       243,808       187,469       183,364  
Securities held-to-maturity     3,721       3,727       3,734       3,740       3,746  
Loans held for sale     89,629       72,870       57,618       50,499       65,320  
Total loans     1,440,617       1,467,786       1,429,794       1,073,870       1,046,525  
Allowance for loan losses     (12,903 )     (12,959 )     (12,113 )     (15,218 )     (14,705 )
Total assets     2,018,421       2,035,811       1,963,883       1,416,907       1,401,181  
Non-interest-bearing deposits     326,550       312,597       289,552       239,792       223,579  
Interest-bearing deposits     1,396,220       1,366,205       1,280,456       886,611       921,435  
Federal Home Loan Bank advances     10,000       75,000       125,000       125,000       95,000  
Total liabilities     1,755,757       1,776,060       1,709,504       1,259,397       1,248,035  
Shareholders' equity   $ 262,664     $ 259,751     $ 254,379     $ 157,510     $ 153,146  
Total shares of common stock outstanding     17,561,476       17,765,124       17,724,721       12,125,122       11,931,131  
Total shares of preferred stock outstanding     878,048       878,048       878,048       878,048       878,048  
Book value per share of common stock   $ 14.44     $ 14.11     $ 13.84     $ 12.25     $ 12.08  
Tangible book value per share of common stock*     11.87       11.55       11.25       11.74       11.56  
Market value per share of common stock   $ 15.15     $ 14.44     $ 14.73     $ 16.72     $ 18.53  
Capital ratios:                                        
Total risk based capital     13.29 %     12.64 %     12.84 %     12.62 %     12.53 %
Tier 1 risk based capital     12.53 %     11.90 %     12.13 %     11.49 %     11.41 %
Common equity tier 1 capital     12.01 %     11.40 %     11.61 %     10.83 %     10.73 %
Leverage     11.01 %     10.97 %     11.06 %     11.02 %     10.87 %

_____________________
*This metric is a non-GAAP financial measure.  See below for discussion and 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 2019 Earnings Release
 
    Five Quarter Comparison  
    6/30/19     3/31/19     12/31/18     9/30/18     6/30/18  
Average Balance Sheet Data:                                        
Cash and cash equivalents   $ 93,523     $ 83,689     $ 83,560     $ 62,787     $ 63,064  
Investment securities     228,283       251,631       256,595       196,031       197,933  
Loans held for sale     91,585       66,880       52,131       54,701       58,297  
Loans     1,469,210       1,461,696       1,439,652       1,070,060       1,041,835  
Assets     2,004,207       1,988,478       1,940,991       1,421,873       1,396,359  
Interest bearing deposits     1,364,211       1,299,205       1,271,602       913,534       901,076  
Deposits     1,678,240       1,588,317       1,579,250       1,147,274       1,138,400  
Federal Home Loan Bank advances     42,088       117,278       102,304       109,728       99,121  
Liabilities     1,743,010       1,731,373       1,695,181       1,265,610       1,244,824  
Shareholders' equity     261,197       257,105       245,811       156,264       151,535  
Performance Ratios:                                        
Annualized return on average assets     1.15 %     0.97 %     (0.14 )%     1.02 %     1.01 %
Annualized return on average equity     8.84 %     7.54 %     (1.14 )%     9.28 %     9.30 %
Net interest margin (1)     3.68 %     3.75 %     3.89 %     3.35 %     3.46 %
Annualized Noninterest income to average assets     1.41 %     0.97 %     1.31 %     0.90 %     0.79 %
Efficiency ratio     68.51 %     67.74 %     98.88 %     68.22 %     69.71 %
Loans by Type (at period end):                                        
Commercial and industrial   $ 404,745     $ 419,941     $ 404,600     $ 398,626     $ 386,065  
Commercial real estate - owner occupied     173,316       170,558       141,931       117,904       121,475  
Commercial real estate - non-owner occupied     421,496       403,443       408,515       286,848       286,769  
Construction and development     123,901       162,237       174,670       129,799       96,580  
Consumer real estate     255,043       248,943       253,562       112,957       109,915  
Consumer     26,704       26,241       25,615       8,274       9,671  
Other     35,412       36,423       20,901       19,462       36,050  
Asset Quality Data:                                        
Allowance for loan losses to total loans     0.90 %     0.88 %     0.85 %     1.42 %     1.41 %
Allowance for loan losses to non-performing loans     894 %     757 %     583 %     271 %     271 %
Nonaccrual loans   $ 1,443     $ 1,712     $ 2,078     $ 5,610     $ 5,419  
Troubled debt restructurings     1,238       1,255       1,391       1,146       1,173  
Loans - over 89 days past due and accruing     302       -       214       215       216  
Total non-performing loans     1,443       1,712       2,078       5,610       5,419  
OREO and repossessed assets     914       1,038       988       -       -  
Total non-performing assets     2,357       2,750       3,066       5,610       5,419  
Non-performing loans to total loans     0.10 %     0.12 %     0.15 %     0.52 %     0.52 %
Non-performing assets to total assets     0.12 %     0.14 %     0.16 %     0.40 %     0.39 %
Non-performing assets to total loans and OREO     0.16 %     0.19 %     0.21 %     0.52 %     0.52 %
Annualized net charge-offs (recoveries) to average loans     0.02 %     0.01 %     1.27 %     (0.01 )%     0.01 %
Net charge-offs (recoveries)   $ 56     $ 40     $ 4,620     $ (32 )   $ 27  
Interest Rates and Yields:                                        
Loans     5.44 %     5.49 %     5.49 %     5.00 %     5.04 %
Securities (1)     3.22 %     3.20 %     3.30 %     2.85 %     2.82 %
Total interest-earning assets (1)     5.00 %     5.06 %     5.02 %     4.58 %     4.58 %
Deposits     1.39 %     1.31 %     1.12 %     1.22 %     1.11 %
Borrowings and repurchase agreements     3.09 %     2.85 %     2.76 %     2.53 %     2.53 %
Total interest-bearing liabilities     1.75 %     1.71 %     1.50 %     1.64 %     1.51 %
Other Information:                                        
Full-time equivalent employees     290       289       286       185       183  

_____________________

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 2019 Earnings Release
 
    For the Three Months Ended June 30,  
    2019     2018  
    Average
Outstanding
Balance
    Interest
Income/
Expense
    Average
Yield/
Rate
    Average
Outstanding
Balance
    Interest
Income/
Expense
    Average
Yield/
Rate
 
Interest-Earning Assets                                                
Loans (1)   $ 1,469,210     $ 19,931       5.44 %   $ 1,041,835     $ 13,090       5.04 %
Loans held for sale     91,585       1,068       4.68 %     58,297       706       4.86 %
Securities:                                                
Taxable investment securities (2)     175,742       1,379       3.14 %     155,552       1,071       2.76 %
Investment securities exempt from
  federal income tax (3)
    52,541       363       3.50 %     42,381       257       3.07 %
Total securities     228,283       1,742       3.22 %     197,933       1,328       2.82 %
Cash balances in other banks     75,485       411       2.18 %     50,335       211       1.68 %
Funds sold     767       6       2.96 %     2,898       19       2.57 %
Total interest-earning assets     1,865,330       23,158       5.00 %     1,351,298       15,354       4.58 %
Noninterest-earning assets     138,877                       45,061                  
Total assets   $ 2,004,207                     $ 1,396,359                  
Interest-Bearing Liabilities                                                
Interest-bearing deposits:                                                
Interest-bearing transaction accounts   $ 467,326       1,827       1.57 %   $ 279,705       892       1.28 %
Savings and money market deposits     479,012       1,782       1.49 %     428,330       1,413       1.32 %
Time deposits     417,873       2,217       2.13 %     193,041       834       1.73 %
Total interest-bearing deposits     1,364,211       5,826       1.71 %     901,076       3,139       1.40 %
Borrowings and repurchase agreements     42,117       324       3.09 %     99,286       628       2.53 %
Total interest-bearing liabilities     1,406,328       6,150       1.75 %     1,000,362       3,767       1.51 %
Noninterest-bearing deposits     314,029                       237,324                  
Total funding sources     1,720,357                       1,237,686                  
Noninterest-bearing liabilities     22,653                       7,138                  
Shareholders’ equity     261,197                       151,535                  
Total liabilities and shareholders’ equity   $ 2,004,207                     $ 1,396,359                  
Net interest spread (4)                     3.25 %                     3.07 %
Net interest income/margin (5)           $ 17,008       3.68 %           $ 11,587       3.46 %

                                               

(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) Yields on tax exempt securities, total securities, and total interest-earning assets are shown 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 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 2019 Earnings Release
 
    Three Months Ended  
    June 30,
2019
    March 31,
2019
    December 31,
 2018
    September 30, 2018     June 30,
2018
 
Operating net income:                                        
Net income (loss)   $ 5,756     $ 4,780     $ (708 )   $ 3,656     $ 3,513  
Add:  merger related expenses     1,711       594       8,929       540       335  
Less: income tax impact of merger related expenses     (447 )     (155 )     (1,985 )     (141 )     (88 )
Operating net income   $ 7,020     $ 5,219     $ 6,236     $ 4,055     $ 3,760  
                                         
Operating diluted net income per
  share of common stock:
                                       
Operating net income   $ 7,020     $ 5,219     $ 6,236     $ 4,055     $ 3,760  
Weighted average shares - diluted     18,650,706       18,830,933       18,716,562       13,113,775       13,067,223  
Operating diluted net income
  per share of common stock
  $ 0.38     $ 0.28     $ 0.33     $ 0.31     $ 0.29  
                                         
Operating annualized return on average assets:                                        
Operating net income   $ 7,020     $ 5,219     $ 6,236     $ 4,055     $ 3,760  
Average assets   $ 2,004,207     $ 1,988,478     $ 1,940,991     $ 1,421,873     $ 1,396,359  
Operating annualized return on
  average assets
    1.40 %     1.06 %     1.27 %     1.13 %     1.08 %
                                         
Operating annualized return on
  average tangible equity:
                                       
Average total shareholders' equity   $ 261,197     $ 257,105     $ 245,811     $ 156,264     $ 151,535  
Less: average intangible assets     (45,456 )     (45,890 )     (45,687 )     (6,220 )     (6,228 )
Average tangible equity     215,741       211,215       200,124       150,044       145,307  
Operating net income   $ 7,020     $ 5,219     $ 6,236     $ 4,055     $ 3,760  
Operating annualized return on
  average tangible equity
    13.05 %     10.02 %     12.36 %     10.72 %     10.38 %
                                         
Operating efficiency ratio:                                        
Total noninterest expense   $ 16,470     $ 14,725     $ 23,832     $ 10,070     $ 10,005  
Less:  merger related expenses     (1,711 )     (594 )     (8,929 )     (540 )     (335 )
Total operating noninterest expense     14,759       14,131       14,903       9,530       9,670  
Net interest income     17,008       17,002       17,716       11,543       11,587  
Total noninterest income     7,032       4,735       6,387       3,218       2,765  
Total revenues   $ 24,040     $ 21,737     $ 24,103     $ 14,761     $ 14,352  
Operating efficiency ratio:     61.39 %     65.01 %     61.83 %     64.56 %     67.38 %
                                         
    June 30,
2019
    March 31,
2019
    December 31,
 2018
    September 30, 2018     June 30,
2018
 
Tangible Equity:                                        
Total shareholders' equity   $ 262,664     $ 259,751     $ 254,379     $ 157,510     $ 153,146  
Less: intangible assets     (45,199 )     (45,618 )     (46,048 )     (6,219 )     (6,222 )
Tangible equity   $ 217,465     $ 214,133     $ 208,331     $ 151,291     $ 146,924  
                                         
Tangible Common Equity:                                        
Tangible equity   $ 217,465     $ 214,133     $ 208,331     $ 151,291     $ 146,924  
Less: preferred equity     (9,000 )     (9,000 )     (9,000 )     (9,000 )     (9,000 )
Tangible common equity   $ 208,465     $ 205,133     $ 199,331     $ 142,291     $ 137,924  
                                         
Tangible Book Value per Share of Common Stock:                                        
Tangible common equity   $ 208,465     $ 205,133     $ 199,331     $ 142,291     $ 137,924  
Total shares of common stock outstanding     17,561,476       17,765,124       17,724,721       12,125,122       11,931,131  
Tangible book value per share of common stock   $ 11.87     $ 11.55     $ 11.25     $ 11.74     $ 11.56  


 
CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)
Second Quarter 2019 Earnings Release
 
    Six Months Ended  
    June 30, 2019     June 30, 2018  
Operating net income:                
Net income   $ 10,535     $ 6,707  
Add:  merger related expenses     2,305       335  
Less: income tax impact of merger related expenses     (603 )     (88 )
Operating net income   $ 12,237     $ 6,954  
                 
Operating diluted net income per
  share of common stock:
               
Operating net income   $ 12,237     $ 6,954  
Weighted average shares - diluted     18,740,322       13,021,744  
Operating diluted net income
  per share of common stock
  $ 0.65     $ 0.53  
                 
Operating annualized return on average assets:                
Operating net income   $ 12,237     $ 6,954  
Average assets   $ 1,996,386     $ 1,373,869  
Operating annualized return on
  average assets
    1.24 %     1.02 %
                 
Operating annualized return on
  average tangible equity:
               
Average total shareholders' equity   $ 259,162     $ 149,914  
Less: average intangible assets     (45,672 )     (6,233 )
Average tangible equity     213,490       143,681  
Operating net income   $ 12,237     $ 6,954  
Operating annualized return on
  average tangible equity
    11.56 %     9.76 %
                 
Operating efficiency ratio:                
Total noninterest expense   $ 31,196     $ 19,586  
Less:  merger related expenses     (2,305 )     (335 )
Total operating noninterest expense     28,891       19,251  
Net interest income     34,010       22,433  
Total noninterest income     11,767       5,854  
Total revenues   $ 45,777     $ 28,287  
Operating efficiency ratio:     63.11 %     68.06 %
CONTACT

Rob Anderson 
Chief Financial Officer and Chief Administrative Officer 
(615) 732-6470

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