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CST: 19/11/2019 00:04:45   

CapStar Reports Fully Diluted EPS of $0.35 and Fully Diluted Operating EPS of $0.36 for 3Q 2019

25 Days ago

NASHVILLE, Tenn., Oct. 24, 2019 (GLOBE NEWSWIRE) -- CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) reported net income of $6.47 million, or $0.35 per share on a fully diluted basis, for the three months ended September 30, 2019, compared to net income of $3.66 million, or $0.28 per share on a fully diluted basis, for the three months ended September 30, 2018.  Operating(1) net income was $6.60 million, or $0.36 per share on a fully diluted basis, for the three months ended September 30, 2019, compared to $4.06 million, or $0.31 per share on a fully diluted basis, for the three months ended September 30, 2018. 

“I am pleased with our third quarter results,” said Timothy K. Schools, President and Chief Executive Officer. “We continue to experience strong credit metrics, our mortgage and Tri-Net businesses performed very well, and we are approaching the first anniversary of our acquisition of Athens Federal.  Additionally, our former largest shareholder was able to successfully exit their position, as the life of the fund this investment was held in came to an end, creating increased liquidity for our remaining shareholders.  As we look ahead, we will be working to improve upon our loan production and deposit gathering capabilities as we navigate through a period of increased loan prepayments and net interest margin pressure.”

Soundness

  • Non-performing assets as a percentage of total assets were 0.13% at September 30, 2019 compared to 0.40% at September 30, 2018.
  • Annualized net charge-offs to average loans were -0.01% for the three months ended September 30, 2019 compared to -0.01% for the same period in 2018.
  • The total risk based capital ratio was 13.46% at September 30, 2019 compared to 12.62% at September 30, 2018.

Profitability

Operating measures exclude non-recurring merger-related expenses unrelated to CapStar’s normal operations.

  • Operating annualized return on average assets for the three months ended September 30, 2019 was 1.31% compared to 1.13% for the same period in 2018.
  • Operating annualized return on average tangible equity for the three months ended September 30, 2019 was 11.83% compared to 10.72% for the same period in 2018.
  • Net interest margin for the three months ended September 30, 2019 was 3.66% compared to 3.35% for the same period in 2018.
  • The operating efficiency ratio for the three months ended September 30, 2019 was 64.08% compared to 64.56% for the same period in 2018.

(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.

“With the FOMC cutting rates for the first time since 2008, we experienced 2 basis points of net interest margin compression compared to the second quarter,” said Rob Anderson Chief Financial Officer and Chief Administrative Officer of CapStar. “Elevated loan fees helped offset the decline in variable rate loan yields, but yields on newly originated loans remain above our portfolio average.  Further, our deposit costs are down slightly due to rate adjustments made late in the quarter and our associates continue to meet with customers to reset rates lower,” continued Mr. Anderson. “On another positive note, our salesforce was able to grow non-interest bearing deposit accounts by 25.1% on an annualized basis from the second quarter.”

Growth

  • Operating EPS on a fully diluted basis increased 16.1% to $0.36 for the quarter ended September 30, 2019, compared to $0.31 on a fully diluted basis for the same period in 2018.
  • Average gross loans for the quarter ended September 30, 2019 increased 35.1% to $1.45 billion, compared to $1.07 billion for the same period in 2018.
    • Excluding Day 1 loans from Athens, organic average loan growth was 2.9% year-over-year.
  • Average deposits for the quarter ended September 30, 2019 increased 48.6% to $1.70 billion, compared to $1.15 billion for the same period in 2018.
    • Excluding Day 1 deposits from Athens, organic average deposit growth was 17.9% year-over-year.

Dividend

On October 24, 2019, the board of directors of CapStar approved a quarterly dividend of $0.05 per common share that will be paid on November 22, 2019 to shareholders of record of CapStar’s capital stock as of the close of business on November 8, 2019.

Conference Call and Webcast Information

CapStar will host a conference call and webcast at 8:30 a.m. Central Time on Friday October 25, 2019.  During the call, management will review the third quarter results and operational highlights.  Interested parties may listen to the call by dialing (844) 412-1002.  The conference ID number is 5171609.  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 September 30, 2019, on a consolidated basis, CapStar had total assets of $2.03 billion, gross loans of $1.41 billion, total deposits of $1.73 billion, and shareholders’ equity of $268.08 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 a projected increase in liquidity for our shareholders, improvements in our loan production and deposit gathering capabilities, 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.  

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statements of Income (unaudited) (dollars in thousands, except share data)

Third Quarter 2019 Earnings Release

    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2019     2018     2019     2018  
Interest income:                                
Loans, including fees   $ 21,005     $ 14,167     $ 62,596     $ 40,197  
Securities:                                
Taxable     1,028       951       3,540       2,775  
Tax-exempt     354       248       1,093       784  
Federal funds sold     1       17       26       56  
Restricted equity securities     183       132       584       389  
Interest-bearing deposits in financial institutions     645       267       1,502       679  
Total interest income     23,216       15,782       69,341       44,880  
Interest expense:                                
Interest-bearing deposits     2,102       1,146       5,523       2,793  
Savings and money market accounts     1,944       1,409       5,445       3,827  
Time deposits     1,887       985       5,917       2,468  
Federal funds purchased           1       4       3  
Securities sold under agreements to repurchase                 5        
Federal Home Loan Bank advances     127       698       1,281       1,813  
Total interest expense     6,060       4,239       18,175       10,904  
Net interest income     17,156       11,543       51,166       33,976  
Provision for loan losses     (125 )     481       761       1,328  
Net interest income after provision for loan losses     17,281       11,062       50,405       32,648  
Noninterest income:                                
Treasury management and other deposit service charges     788       528       2,399       1,357  
Net gain (loss) on sale of securities           (1 )     (108 )     2  
Tri-Net fees     847       373       2,511       1,227  
Mortgage banking income     2,679       1,634       7,151       4,329  
Other noninterest income     2,474       684       6,602       2,157  
Total noninterest income     6,788       3,218       18,555       9,072  
Noninterest expense:                                
Salaries and employee benefits     9,229       6,514       26,224       19,111  
Data processing and software     1,790       803       5,126       2,411  
Professional fees     528       255       1,571       1,074  
Occupancy     858       544       2,550       1,600  
Equipment     1,012       520       2,890       1,661  
Regulatory fees     18       228       564       664  
Merger related expenses     187       540       2,491       875  
Amortization of intangibles     408       3       1,258       23  
Other operating     1,501       663       4,054       2,236  
Total noninterest expense     15,531       10,070       46,728       29,655  
Income before income taxes     8,538       4,210       22,232       12,065  
Income tax expense     2,072       554       5,231       1,702  
Net income   $ 6,466     $ 3,656     $ 17,001     $ 10,363  
Per share information:                                
Basic net income per share of common stock   $ 0.36     $ 0.30     $ 0.96     $ 0.87  
Diluted net income per share of common stock   $ 0.35     $ 0.28     $ 0.91     $ 0.79  
Weighted average shares outstanding:                                
Basic     17,741,778       12,040,229       17,729,518       11,851,476  
Diluted     18,532,479       13,113,775       18,670,280       13,052,758  
                                 

This information is preliminary and based on company data available at the time of the release.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)

Third Quarter 2019 Earnings Release

    Five Quarter Comparison  
    9/30/19     6/30/19     3/31/19     12/31/18     9/30/18  
Income Statement Data:                                        
Net interest income   $ 17,156     $ 17,008     $ 17,002     $ 17,716     $ 11,543  
Provision for loan losses     (125 )           886       1,514       481  
Net interest income after provision for loan losses     17,281       17,008       16,116       16,202       11,062  
Treasury management and other deposit service charges     788       813       798       793       528  
Net gain (loss) on sale of securities           (121 )     12       1       (1 )
Tri-Net fees     847       1,024       641       276       373  
Mortgage banking income     2,679       3,087       1,385       1,324       1,634  
Other noninterest income     2,474       2,229       1,899       3,993       684  
Total noninterest income     6,788       7,032       4,735       6,387       3,218  
Salaries and employee benefits     9,229       8,563       8,432       9,475       6,514  
Data processing and software     1,790       1,862       1,474       1,424       803  
Professional fees     528       501       543       534       255  
Occupancy     858       809       883       736       544  
Equipment     1,012       1,026       852       810       520  
Regulatory fees     18       272       274       364       228  
Merger related expenses     187       1,711       594       8,929       540  
Amortization of intangibles     408       419       430       442       3  
Other operating     1,501       1,307       1,243       1,118       663  
Total noninterest expense     15,531       16,470       14,725       23,832       10,070  
Net income (loss) before income tax expense     8,538       7,570       6,126       (1,243 )     4,210  
Income tax (benefit) expense     2,072       1,814       1,346       (535 )     554  
Net income (loss)   $ 6,466     $ 5,756     $ 4,780     $ (708 )   $ 3,656  
Weighted average shares - basic     17,741,778       17,663,992       17,783,239       17,509,525       12,040,229  
Weighted average shares - diluted     18,532,479       18,650,706       18,830,933       18,716,562       13,113,775  
Net income (loss) per share, basic   $ 0.36     $ 0.33     $ 0.27     $ (0.04 )   $ 0.30  
Net income (loss) per share, diluted     0.35       0.31       0.25       (0.04 )     0.28  
Balance Sheet Data (at period end):                                        
Cash and cash equivalents   $ 154,021     $ 156,085     $ 120,321     $ 105,443     $ 52,589  
Securities available-for-sale     203,500       194,957       233,691       243,808       187,469  
Securities held-to-maturity     3,319       3,721       3,727       3,734       3,740  
Loans held for sale     129,613       89,629       72,870       57,618       50,499  
Total loans     1,411,768       1,440,617       1,467,786       1,429,794       1,073,870  
Allowance for loan losses     (12,828 )     (12,903 )     (12,959 )     (12,113 )     (15,218 )
Total assets     2,033,911       2,018,421       2,035,811       1,963,883       1,416,907  
Non-interest-bearing deposits     352,266       326,550       312,597       289,552       239,792  
Interest-bearing deposits     1,379,497       1,396,220       1,366,205       1,280,456       886,611  
Federal Home Loan Bank advances     10,000       10,000       75,000       125,000       125,000  
Total liabilities     1,765,829       1,755,757       1,776,060       1,709,504       1,259,397  
Shareholders' equity   $ 268,082     $ 262,664     $ 259,751     $ 254,379     $ 157,510  
Total shares of common stock outstanding     18,343,403       17,561,476       17,765,124       17,724,721       12,125,122  
Total shares of preferred stock outstanding           878,048       878,048       878,048       878,048  
Book value per share of common stock   $ 14.61     $ 14.44     $ 14.11     $ 13.84     $ 12.25  
Tangible book value per share of common stock*     12.17       11.87       11.55       11.25       11.74  
Market value per share of common stock   $ 16.58     $ 15.15     $ 14.44     $ 14.73     $ 16.72  
Capital ratios:                                        
Total risk based capital     13.46 %     13.29 %     12.64 %     12.84 %     12.62 %
Tier 1 risk based capital     12.71 %     12.53 %     11.90 %     12.13 %     11.49 %
Common equity tier 1 capital     12.71 %     12.01 %     11.40 %     11.61 %     10.83 %
Leverage     11.24 %     11.01 %     10.97 %     11.06 %     11.02 %

_____________________
*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 release.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)

Third Quarter 2019 Earnings Release

    Five Quarter Comparison  
    9/30/19     6/30/19     3/31/19     12/31/18     9/30/18  
Average Balance Sheet Data:                                        
Cash and cash equivalents   $ 129,114     $ 93,523     $ 83,689     $ 83,560     $ 62,787  
Investment securities     211,460       228,283       251,631       256,595       196,031  
Loans held for sale     101,835       91,585       66,880       52,131       54,701  
Loans     1,445,755       1,469,210       1,461,696       1,439,652       1,070,060  
Assets     2,005,950       2,004,207       1,988,478       1,940,991       1,421,873  
Interest bearing deposits     1,370,988       1,364,211       1,299,205       1,271,602       913,534  
Deposits     1,704,873       1,678,240       1,588,317       1,579,250       1,147,274  
Federal Home Loan Bank advances     12,174       42,088       117,278       102,304       109,728  
Liabilities     1,739,509       1,743,010       1,731,373       1,695,181       1,265,610  
Shareholders' equity     266,441       261,197       257,105       245,811       156,264  
Performance Ratios:                                        
Annualized return on average assets     1.28 %     1.15 %     0.97 %     (0.14 )%     1.02 %
Annualized return on average equity     9.63 %     8.84 %     7.54 %     (1.14 )%     9.28 %
Net interest margin (1)     3.66 %     3.68 %     3.75 %     3.89 %     3.35 %
Annualized Noninterest income to average assets     1.34 %     1.41 %     0.97 %     1.31 %     0.90 %
Efficiency ratio     64.87 %     68.51 %     67.74 %     98.88 %     68.22 %
Loans by Type (at period end):                                        
Commercial and industrial   $ 382,816     $ 404,745     $ 419,941     $ 404,600     $ 398,626  
Commercial real estate - owner occupied     169,370       173,316       170,558       141,931       117,904  
Commercial real estate - non-owner occupied     407,378       421,496       403,443       408,515       286,848  
Construction and development     132,222       123,901       162,237       174,670       129,799  
Consumer real estate     254,736       255,043       248,943       253,562       112,957  
Consumer     29,059       26,704       26,241       25,615       8,274  
Other     36,187       35,412       36,423       20,901       19,462  
Asset Quality Data:                                        
Allowance for loan losses to total loans     0.91 %     0.90 %     0.88 %     0.85 %     1.42 %
Allowance for loan losses to non-performing loans     754 %     894 %     757 %     583 %     271 %
Nonaccrual loans   $ 1,701     $ 1,443     $ 1,712     $ 2,078     $ 5,610  
Troubled debt restructurings     2,725       1,238       1,255       1,391       1,146  
Loans - over 89 days past due and accruing     551       302       -       214       215  
Total non-performing loans     1,701       1,443       1,712       2,078       5,610  
OREO and repossessed assets     914       914       1,038       988       -  
Total non-performing assets     2,615       2,357       2,750       3,066       5,610  
Non-performing loans to total loans     0.12 %     0.10 %     0.12 %     0.15 %     0.52 %
Non-performing assets to total assets     0.13 %     0.12 %     0.14 %     0.16 %     0.40 %
Non-performing assets to total loans and OREO     0.19 %     0.16 %     0.19 %     0.21 %     0.52 %
Annualized net charge-offs (recoveries) to average loans     (0.01 )%     0.02 %     0.01 %     1.27 %     (0.01 )%
Net charge-offs (recoveries)   $ (50 )   $ 56     $ 40     $ 4,620     $ (32 )
Interest Rates and Yields:                                        
Loans     5.48 %     5.44 %     5.49 %     5.49 %     5.00 %
Securities (1)     3.14 %     3.22 %     3.20 %     3.30 %     2.85 %
Total interest-earning assets (1)     4.95 %     5.00 %     5.06 %     5.02 %     4.58 %
Deposits     1.38 %     1.39 %     1.31 %     1.12 %     1.22 %
Borrowings and repurchase agreements     4.12 %     3.09 %     2.85 %     2.76 %     2.53 %
Total interest-bearing liabilities     1.74 %     1.75 %     1.71 %     1.50 %     1.64 %
Other Information:                                        
Full-time equivalent employees     290       290       289       286       185  

_____________________

This information is preliminary and based on company data available at the time of the release.

(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)

Third Quarter 2019 Earnings Release

    For the Three Months Ended September 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)   $ 1,445,755     $ 19,955       5.48 %   $ 1,070,060     $ 13,484       5.00 %
Loans held for sale     101,835       1,050       4.09 %     54,701       683       4.96 %
Securities:                                                
Taxable investment securities (2)     160,528       1,211       3.02 %     154,570       1,083       2.80 %
Investment securities exempt from
  federal income tax (3)
    50,932       354       3.52 %     41,461       248       3.03 %
Total securities     211,460       1,565       3.14 %     196,031       1,331       2.85 %
Cash balances in other banks     110,690       645       2.31 %     50,844       267       2.08 %
Funds sold     144       1       3.46 %     2,475       17       2.73 %
Total interest-earning assets     1,869,884       23,216       4.95 %     1,374,111       15,782       4.58 %
Noninterest-earning assets     136,066                       47,762                  
Total assets   $ 2,005,950                     $ 1,421,873                  
Interest-Bearing Liabilities                                                
Interest-bearing deposits:                                                
Interest-bearing transaction accounts   $ 527,759       2,102       1.58 %   $ 318,586       1,146       1.43 %
Savings and money market deposits     494,183       1,944       1.56 %     391,107       1,409       1.43 %
Time deposits     349,046       1,887       2.14 %     203,841       985       1.92 %
Total interest-bearing deposits     1,370,988       5,933       1.72 %     913,534       3,540       1.54 %
Borrowings and repurchase agreements     12,174       127       4.12 %     109,891       699       2.53 %
Total interest-bearing liabilities     1,383,162       6,060       1.74 %     1,023,425       4,239       1.64 %
Noninterest-bearing deposits     333,885                       233,739                  
Total funding sources     1,717,047                       1,257,164                  
Noninterest-bearing liabilities     22,462                       8,445                  
Shareholders’ equity     266,441                       156,264                  
Total liabilities and shareholders’ equity   $ 2,005,950                     $ 1,421,873                  
Net interest spread (4)                     3.21 %                     2.93 %
Net interest income/margin (5)           $ 17,156       3.66 %           $ 11,543       3.35 %
                                                 

                                               

(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 release.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)

Third Quarter 2019 Earnings Release

    Three Months Ended  
    September 30,
2019
    June 30,
2019
    March 31,
2019
    December 31,
2018
    September 30,
2018
 
Operating net income:                                        
Net income (loss)   $ 6,466     $ 5,756     $ 4,780     $ (708 )   $ 3,656  
Add:  merger related expenses     187       1,711       594       8,929       540  
Less: income tax impact of merger related expenses     (49 )     (447 )     (155 )     (1,985 )     (141 )
Operating net income   $ 6,604     $ 7,020     $ 5,219     $ 6,236     $ 4,055  
                                         
Operating diluted net income per
  share of common stock:
                                       
Operating net income   $ 6,604     $ 7,020     $ 5,219     $ 6,236     $ 4,055  
Weighted average shares - diluted     18,532,479       18,650,706       18,830,933       18,716,562       13,113,775  
Operating diluted net income
  per share of common stock
  $ 0.36     $ 0.38     $ 0.28     $ 0.33     $ 0.31  
                                         
Operating annualized return on average assets:                                        
Operating net income   $ 6,604     $ 7,020     $ 5,219     $ 6,236     $ 4,055  
Average assets   $ 2,005,950     $ 2,004,207     $ 1,988,478     $ 1,940,991     $ 1,421,873  
Operating annualized return on
  average assets
    1.31 %     1.40 %     1.06 %     1.27 %     1.13 %
                                         
Operating annualized return on
  average tangible equity:
                                       
Average total shareholders' equity   $ 266,441     $ 261,197     $ 257,105     $ 245,811     $ 156,264  
Less: average intangible assets     (45,050 )     (45,456 )     (45,890 )     (45,687 )     (6,220 )
Average tangible equity     221,391       215,741       211,215       200,124       150,044  
Operating net income   $ 6,604     $ 7,020     $ 5,219     $ 6,236     $ 4,055  
Operating annualized return on
  average tangible equity
    11.83 %     13.05 %     10.02 %     12.36 %     10.72 %
                                         
Operating efficiency ratio:                                        
Total noninterest expense   $ 15,531     $ 16,470     $ 14,725     $ 23,832     $ 10,070  
Less:  merger related expenses     (187 )     (1,711 )     (594 )     (8,929 )     (540 )
Total operating noninterest expense     15,344       14,759       14,131       14,903       9,530  
Net interest income     17,156       17,008       17,002       17,716       11,543  
Total noninterest income     6,788       7,032       4,735       6,387       3,218  
Total revenues   $ 23,944     $ 24,040     $ 21,737     $ 24,103     $ 14,761  
Operating efficiency ratio:     64.08 %     61.39 %     65.01 %     61.83 %     64.56 %
                                         
    September 30,
2019
    June 30,
2019
    March 31,
2019
    December 31,
2018
    September 30,
2018
 
Tangible Equity:                                        
Total shareholders' equity   $ 268,082     $ 262,664     $ 259,751     $ 254,379     $ 157,510  
Less: intangible assets     (44,790 )     (45,199 )     (45,618 )     (46,048 )     (6,219 )
Tangible equity   $ 223,292     $ 217,465     $ 214,133     $ 208,331     $ 151,291  
                                         
Tangible Common Equity:                                        
Tangible equity   $ 223,292     $ 217,465     $ 214,133     $ 208,331     $ 151,291  
Less: preferred equity           (9,000 )     (9,000 )     (9,000 )     (9,000 )
Tangible common equity   $ 223,292     $ 208,465     $ 205,133     $ 199,331     $ 142,291  
                                         
Tangible Book Value per Share of Common Stock:                                        
Tangible common equity   $ 223,292     $ 208,465     $ 205,133     $ 199,331     $ 142,291  
Total shares of common stock outstanding     18,343,403       17,561,476       17,765,124       17,724,721       12,125,122  
Tangible book value per share of common stock   $ 12.17     $ 11.87     $ 11.55     $ 11.25     $ 11.74  
                                         


CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)

Third Quarter 2019 Earnings Release

    Nine Months Ended  
    September 30, 2019     September 30, 2018  
Operating net income:                
Net income   $ 17,001     $ 10,363  
Add:  merger related expenses     2,491       875  
Less: income tax impact of merger related expenses     (651 )     (229 )
Operating net income   $ 18,841     $ 11,009  
                 
Operating diluted net income per
  share of common stock:
               
Operating net income   $ 18,841     $ 11,009  
Weighted average shares - diluted     18,670,280       13,052,758  
Operating diluted net income
  per share of common stock
  $ 1.01     $ 0.84  
                 
Operating annualized return on average assets:                
Operating net income   $ 18,841     $ 11,009  
Average assets   $ 1,999,609     $ 1,390,046  
Operating annualized return on
  average assets
    1.26 %     1.06 %
                 
Operating annualized return on
  average tangible equity:
               
Average total shareholders' equity   $ 261,615     $ 152,054  
Less: average intangible assets     (45,462 )     (6,229 )
Average tangible equity     216,153       145,825  
Operating net income   $ 18,841     $ 11,009  
Operating annualized return on
  average tangible equity
    11.65 %     10.09 %
                 
Operating efficiency ratio:                
Total noninterest expense   $ 46,728     $ 29,655  
Less:  merger related expenses     (2,491 )     (875 )
Total operating noninterest expense     44,237       28,780  
Net interest income     51,166       33,976  
Total noninterest income     18,555       9,072  
Total revenues   $ 69,721     $ 43,048  
Operating efficiency ratio:     63.45 %     66.86 %
                 
CONTACT

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

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