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CST: 19/11/2019 00:08:18   

Truxton Corporation Reports Second Quarter 2019 Results

123 Days ago

NASHVILLE, Tenn., July 18, 2019 (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, 2019.  Second quarter net income attributable to common shareholders was $2.5 million or $0.90 per diluted share compared to $2.0 million or $0.74 per diluted share for the same quarter in 2018.  Net income rose by 23% for the quarter while earnings per share rose by 22%.  For the six months ended June 30, 2019, net income increased by 24% to $4.7 million from $3.8 million in the comparable period in 2018.  For the six months ended June 30, 2019, earnings per diluted share rose from $1.37 to $1.69, an increase of 23%.

“Our earnings performance in 2019 has continued to be very strong,” said Truxton Trust Chairman and CEO Tom Stumb.  “Tight expense control, exceptional credit quality, and continued growth in wealth management revenue were the drivers of excellent growth and return metrics this quarter.  Clients continue to seek our advice for their most challenging financial decisions.  Nashville, our core market, has experienced strong employment growth now for a decade.”

Key Highlights

  • Non-interest income grew to $3.0 million in the second quarter, an increase of 12% from the same period of 2018.  Wealth management services constituted 93% of non-interest income in the period ended June 30, 2019. 
  • Loans rose by 10% to $336 million compared to June 30, 2018, and were up 1.2% compared to December 31, 2018. 
  • Total deposits grew by 7.7% since June 30, 2018.  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 2019 was 3.35%.  That represents an increase of 12 basis points from the 3.23% experienced in the quarter ended March 31, 2019, but a decline of 7 basis points from the quarter ended June 30, 2018.  Cost of funds decreased to 1.08% in the second quarter of 2019 from 1.14% for the quarter ended March 31, 2019, but rose from 0.63% for the quarter ended June 30, 2018.  Pressure on rates has abated as the bond market has rallied and short-term money markets have stabilized.
  • Asset quality remains sound at Truxton.  Truxton had no non-performing assets at June 30, 2019.  Truxton had no charge-offs in the quarter and none in the trailing quarter, nor in the same quarter a year ago. 
  • Allowance for loan losses was $3.4 million, $3.4 million, and $3.1 million for the June 30, 2019, March 31, 2019, and June 30, 2018, quarters, respectively.  For the three periods, the bank’s allowance was 1.02%, 0.99%, and 1.03%, of gross loans outstanding at period end, respectively.
  • Tax expense increased by 28% from the March 31, 2019, quarter and by 39% from the June 30, 2018, period.  Effective tax rate rose from the first quarter of 2019 because of partial payoffs of certain loans for which Truxton receives a direct credit against state income tax based on the year end balance of the loan.  Reported effective tax rate for the rest of the year may fluctuate based on the actual balance of such loans.  In addition, 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.  Tier 1 leverage ratio was 11.44% for June 30, 2019, 11.15% for March 31, 2019, and 11.20% for June 30, 2018.  Book value per common share was $22.47, $21.52, and $19.27 for June 30, 2019, March 31, 2019, and June 30, 2018, respectively.  During the 12 months ended June 30, 2019, Truxton Corporation paid dividends of $0.94 per common share.

About Truxton Trust
Truxton Trust Company is a provider of private banking, wealth management, trust, and family office services for wealthy individuals, their families and their business interests.  Serving clients across the world, Truxton’s vastly experienced team of professionals provides customized solutions to its clients’ complex financial needs.  Founded in 2004 in Nashville, Tennessee, Truxton Trust upholds its original guiding principle: do the right thing. Truxton Trust Company is a subsidiary of financial holding company, Truxton Corporation (OTCPK: TRUX).  For more information, visit truxtontrust.com. 

Investor Relations
Andrew May
615-515-1707
andrew.may@truxtontrust.com 
      Media Relations
Tamara Schoeplein
615-515-1714
tamara.schoeplein@truxtontrust.com 


Truxton Corporation
Consolidated Balance Sheets
(000's)
(Unaudited)
       
  June 30,
2019*
March 31,
2019*
June 30,
2018*
ASSETS      
Cash and due from financial institutions $   7,951   $   5,349   $   6,408  
Interest bearing deposits in other financial institutions     12,712       8,061       14,212  
                   
Federal funds sold     253       120       808  
Cash and cash equivalents     20,916       13,530       21,428  
       
Time deposits in other financial institutions     12,288       14,280       4,821  
Securities available for sale     102,304       111,608       101,991  
       
Gross loans     335,639       339,176       305,223  
Allowance for loan losses     (3,411 )     (3,356 )     (3,131 )
Net loans     332,228       335,820       302,092  
       
Mortgage loans held for sale,net     480       -       -  
Bank owned life insurance     9,864       9,809       9,647  
Restricted equity securities     2,588       2,583       2,567  
Premises and equipment, net     1,887       2,082       543  
Accrued interest receivable     1,817       1,883       1,529  
Deferred tax asset, net     321       653       820  
Other assets     3,115       2,438       1,750  
       
Total assets $   487,808   $   494,686   $   447,188  
       
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Deposits      
Non-interest bearing $   104,475   $   107,248   $   113,486  
Interest bearing     296,549       304,152       258,997  
Total deposits     401,024       411,400       372,483  
       
Federal Home Loan Bank advances     18,833       19,090       19,737  
Federal Funds purchased     -       -       -  
Other liabilities     5,988       4,903       2,725  
Total liabilities     425,845       435,393       394,945  
       
SHAREHOLDERS' EQUITY      
Additional paid-in capital     29,066       28,882       27,722  
Retained earnings     32,610       30,783       26,098  
Accumulated other comprehensive income (loss)     287       (372 )     (1,577 )
       
Total shareholders' equity     61,963       59,293       52,243  
       
Total liabilities and shareholders' equity  $   487,808   $   494,686   $   447,188  
       
       
*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,
2019*
  March 31,
2019*
  June 30,
2018*
  June 30,
2019*
  June 30,
2018 *
Non-interest income                
Wealth management services $   2,783   $   2,672   $   2,431   $   5,456   $   4,797
Service charges on deposit accounts   74     70     88     144     172
Securities gains (losses), net   70     2     20     72     20
Bank owned life insurance income   55     54     57     109     112
Other   10     74     66     82     78
Total non-interest income   2,992     2,872     2,662     5,863     5,179
                   
Interest income                  
Loans, including fees $   4,093   $   3,921   $   3,424   $   8,014   $   6,591
Taxable securities   471     498     361     970     740
Tax-exempt securities   237     247     251     484     515
Interest bearing deposits   161     156     60     317     112
Federal funds sold   7     5     5     12     8
 Other interest income   51     32     48     83     76
Total interest income   5,020     4,859     4,149     9,880     8,042
                   
Interest expense                  
Deposits     1,041       1,082       494       2,122       922
Short-term  borrowings     9       7       6       16       9
Long-term  borrowings   111     121     109     233     200
Total interest expense   1,161     1,210     609     2,371     1,131
                   
Net interest income   3,859     3,649     3,540     7,509     6,911
                   
Provision for loan losses   55     0     8     55     57
                   
Net interest income after provision for loan losses   3,804     3,649     3,532     7,454     6,854
                   
Total revenue, net   6,796     6,521     6,194     13,317     12,033
                   
Non interest expense                  
Salaries and employee benefits   2,575     2,793     2,639     5,367     5,151
Occupancy   207     197     190     405     373
Furniture and equipment   27     27     45     55     101
Data processing   278     299     287     579     564
Wealth management processing fees   110     112     111     222     240
Advertising and public relations   20     38     16     57     45
Professional services   145     115     173     260     320
FDIC insurance assessments   35     35     35     70     70
Other   212     194     173     406     479
Total non interest expense   3,609     3,810     3,669     7,421     7,343
                   
Income before income taxes   3,187     2,711     2,525     5,896     4,690
                   
Income tax expense   668     523     479     1,191     885
                   
Net income $   2,519   $   2,188   $   2,046   $   4,705   $   3,805
                   
Earnings per share:                   
Basic $ 0.92   $ 0.80   $   0.75   $ 1.72   $   1.41
Diluted $ 0.90   $ 0.78   $   0.74   $ 1.69   $   1.37
*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, 2019* March 31, 2019* June 30, 2018*
       
Pre Common Share Data      
Net income attributable to shareholders, per share      
Basic $0.92 $0.80 $0.75
Diluted  $0.90 $0.78 $0.74
Book value per common share $22.47 $21.52 $19.27
Tangible book value per common share $22.47 $21.52 $19.27
Basic weighted average comm shares 2,675,283 2,677,947 2,624,039
Diluted weighted average common shares 2,727,375 2,729,774 2,686,117
Common shares outstanding at period end 2,758,109 2,754,788 2,710,409
       
       
Selected Balance Sheet Data      
Tangible common equity (TEC) ratio 12.70% 12.00% 11.68%
Average Loans $339,174 $332,819 $307,477
Average earning assets (1) $470,691 $469,928 $426,041
Average total assets $493,510 $490,230 $443,326
Average stockholders' equity $60,524 $57,593 $51,916
       
       
Selected Asset Quality Measures      
Nonaccrual loans 0 0 0
90+ days past due still accruing 0 0 0
Total nonperforming loans 0 0 0
Total nonperforming assets 0 0 0
Net charge offs (recoveries) (2) (2) (1)
Nonperforming loans to assets 0.00% 0.00% 0.00%
Nonperforming assets to total assets 0.00% 0.00% 0.00%
Nonperforming assets to total loans and other real estate 0.00% 0.00% 0.00%
Allowance for loan losses to total loans 1.02% 0.99% 1.03%
Allowance for loan losses to nonperforming loans NA NA NA
Net charge offs (recoveries) to average loans 0.00% 0.00% 0.00%
       
       
Capital Ratios (Bank Subsidiary Only)      
Tier 1 leverage 11.44% 11.15% 11.20%
Common equity tier 1 15.06% 14.39% 14.28%
Total risk-based capital 15.97% 15.29% 15.18%
       
Selected Performance Ratios        
Efficiency ratio 54.60% 58.53% 59.72%
Return on average assets (ROA) 2.05% 1.81% 1.85%
Return on average stockholders' equity (ROE) 16.69% 15.41% 15.80%
Return on tangible common equity (ROTCE) 16.69% 15.41% 15.80%
Net interest margin 3.35% 3.23% 3.42%
     
*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, 2019*   March 31, 2019*   June 30, 2018*
                       
  Average  Balances Rates/  Yields
(%)
Interest
Income/ Expense
  Average  Balances Rates/
Yields (%)
Interest
Income/ Expense
  Average  Balances Rates/
Yields (%)
Interest
Income/ Expense
                       
Earning Assets                      
Loans $339,175   4.81 $4,070   $332,819   4.77 $3,917   $307,477   4.48 $3,427
Loan fees $0   0.04 $30   $0   0.02 $17   $0   0.00 $3
Loans with fees $339,175   4.85 $4,100   $332,819   4.79 $3,935   $307,477   4.48 $3,430
Mortgage loans held for sale $71   2.99 $1   $66   1.44 $0   $39   4.55 $1
Federal funds sold $1,042   2.58 $7   $851   2.48 $5   $732   2.54 $5
Deposits with banks $24,747   2.61 $161   $24,211   2.61 $156   $14,023   1.73 $60
Investment securities - taxable $72,520   2.60 $471   $77,423   2.57 $498   $66,931   2.16 $361
Investment securities - tax-exempt $33,136   4.27 $237   $34,558   4.26 $247   $36,838   4.06 $250
Total Earning Assets $470,691   4.34 $4,977   $469,928   4.27 $4,841   $426,040   3.99 $4,107
Non interest earning assets                      
Allowance for loan losses   (3,394 )         (3,356 )         (3,129 )    
Cash and due from banks $6,381         $6,693         $5,666      
Premises and equipment $1,901         $300         $401      
Accrued interest receivable $1,630         $1,588         $1,317      
Other real estate $0         $0         $0      
Other assets $16,075         $16,456         $14,827      
Unrealized gain (loss) on inv. securities   226           (1,379 )         (1,796 )    
Total Assets $493,510         $490,230         $443,326      
Interest bearing liabilities                      
Interest bearing demand $25,935   0.71 $46   $26,545   0.95 $62   $26,160   0.35 $23
Savings and Money Market $331,800   1.15 $951   $339,115   1.17 $981   $295,269   0.60 $440
Time deposits - Retail $11,368   1.35 $38   $11,465   1.14 $32   $12,716   0.75 $24
Time Deposits - Wholesale $7,880   0.31 $6   $1,243   2.20 $7   $2,126   1.39 $7
Total interest bearing deposits $376,983   1.11 $1,041   $378,368   1.16 $1,082   $336,271   0.59 $494
Federal home Loan Bank advances $22,339   1.97 $111   $24,378   2.00 $122   $24,490   1.76 $109
Other borrowings $2,924   1.27 $9   $884   3.08 $7   $1,055   2.33 $6
Total borrowed funds $25,263   1.89 $120   $25,262   2.03 $128   $25,545   1.79 $115
Total interest bearing liabilities $402,246   1.16 $1,161   $403,631   1.21 $1,210   $361,816   0.67 $609
Net interest rate spread   3.18 $3,816     3.06 $3,631     3.31 $3,498
Non-interest bearing deposits $27,424         $25,445         $28,265      
Other liabilities $3,315         $3,560         $1,360      
Stockholder's equity $60,524         $57,593         $51,916      
Total Liabilities and Stockholder's Equity $493,509         $490,228         $443,357      
Cost of funds   1.08       1.14       0.63  
Net interest margin   3.35       3.23       3.42  
                       
*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, 2019*     June 30, 2018*
                 
  Average
Balances
Rates/
Yields (%)
Interest
Income/
Expense
    Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
                 
Earning Assets                
Loans $336,014   4.79 $7,987     $301,029   4.43 $6,594
Loan fees $0   0.03 $48     $0   0.00 $7
Loans with fees $336,014   4.82 $8,035     $301,029   4.43 $6,601
Mortgage loans held for sale $69   2.24 $1     $19   4.53 $1
Federal funds sold $947   2.53 $12     $847   1.92 $8
Deposits with banks $24,480   2.61 $317     $14,061   1.61 $112
Investment securities - taxable $74,959   2.59 $969     $67,721   2.19 $740
Investment securities - tax-exempt $33,843   3.86 $484     $37,835   4.07 $515
Total Earning Assets $470,312   4.28 $9,818     $421,512   3.94 $7,977
Non interest earning assets                
Allowance for loan losses   (3,375 )           (3,105 )    
Cash and due from banks $6,536           $5,841      
Premises and equipment $1,396           $432      
Accrued interest receivable $1,609           $1,280      
Other real estate $0           $0      
Other assets $15,973           $14,476      
Unrealized gain (loss) on inv. securities   (572 )           (1,327 )    
Total Assets $491,879           $439,109      
Interest bearing liabilities                
Interest bearing demand $26,238   0.83 $108     $28,369   0.37 $52
Savings and Money Market $335,438   1.16 $1,932     $292,474   0.56 $813
Time deposits - Retail $11,416   1.24 $70     $12,326   0.69 $42
Time Deposits - Wholesale $4,580   0.56 $13     $2,083   1.42 $15
Total interest bearing deposits $377,672   1.13 $2,123     $335,252   0.55 $922
Federal home Loan Bank advances $23,353   1.98 $233     $22,858   1.74 $200
Other borrowings $2,201   1.47 $16     $815   2.14 $9
Total borrowed funds $25,554   1.94 $249     $23,673   1.76 $209
Total interest bearing liabilities $403,226   1.18 $2,372     $358,925   0.63 $1,131
Net interest rate spread   3.09 $7,446       3.31 $6,846
Non-interest bearing deposits $26,439           $27,356      
Other liabilities $3,146           $1,374      
Stockholder's equity $59,067           $51,478      
Total Liabilities and Stockholder's Equity $491,878           $439,133      
Cost of funds   1.11         0.59  
Net interest margin   3.26         3.40  
                 
*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.

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