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Truxton Corporation Reports First Quarter 2021 Results

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NASHVILLE, Tenn., April 22, 2021 (GLOBE NEWSWIRE) -- Truxton Corporation, the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended March 31, 2021. First quarter net income attributable to common shareholders was $3 million or $1.06 per share compared to $2.5 million or $0.87 per share for the same quarter in 2020. Net income rose by 24% for the quarter while earnings per share rose by 22%.

“Truxton’s first quarter 2021 performance was very strong in both of our core businesses, wealth management and private banking,” said Chairman and CEO Tom Stumb. “Wealth management benefitted from rising assets under management because of new client relationships combined with increasing equity prices in 2021. Private banking found new lending opportunities as the economy in our core Nashville market continues to improve following the past year’s coronavirus impacts. Low interest rates have pressured our net interest margin; however, strong balance sheet growth has supported earnings per share and returns on equity capital.”

Key Highlights

  • Non-interest income grew to $3.6 million in the first quarter, an increase of 8% from the fourth quarter of 2020 and 18% in comparison to the first quarter of 2020. Wealth management services constituted 96% of non-interest income in the first quarter of 2021.

  • Loans rose by 15% to $431 million compared to March 31, 2020, and were up 4% compared to December 31, 2020. Excluding loans made under the Paycheck Protection Program (PPP), loans rose by 7.9% compared to March 31, 2020, and 3.3% compared to December 31, 2020.

  • Total deposits increased by 5% from December 31, 2020 to $655.5 million, and increased by 53% in comparison to March 31, 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 first quarter of 2021 was 2.64%. A decrease of 31 basis points from the 2.95% experienced in the quarter ended December 31, 2020, and a decrease of 74 basis points from the quarter ended March 31, 2020. Cost of funds was 0.49% in the first quarter of 2021, up from 0.47% for the quarter ended December 31, 2020, but down 0.71% from the quarter ended March 31, 2020. We continue to have excess liquidity as a result of the deposit growth we experienced in 2020 that has continued into the first quarter of 2021.

  • Asset quality remains sound at Truxton. Truxton had $2 million in non-performing assets at March 31, 2021, 100% of which was a single residential mortgage. Truxton had $9 thousand of charge-offs in the quarter and none in the trailing quarter, $2 thousand 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, $4.5 million, and $3.6 million at quarter end March 31, 2021, December 31, 2020, and March 31, 2020, respectively. For the same three periods, the Bank’s allowance was 1.05%, 1.07%, and 0.95%, respectively, of gross loans outstanding at period end.

  • Tax expense increased by 26% from the December 31, 2020 quarter and by 4% from the March 31, 2020 period. Effective tax rate in the fourth quarter of 2020 was favorably impacted by certain loans, funded late in the year, for which Truxton receives a direct credit against state income tax based on the year-end balance of the loan. 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 9.39% at March 31, 2021, 9.38% at December 31, 2020, and 11.21% at March 31, 2020. Book value per common share was $25.93, $26.77, and $23.19 at March 31, 2021, December 31, 2020, and March 31, 2020, respectively. During the twelve months ended March 31, 2021, Truxton Corporation paid dividends of $2.14 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

Media Relations

Andrew May

Tamara Schoeplein

615-515-1707

615-515-1714

andrew.may@truxtontrust.com

tamara.schoeplein@truxtontrust.com


Truxton Corporation

Consolidated Balance Sheets

(000's)

(Unaudited)

March 31,
2021*

December 31,
2020

March 31,
2020*

ASSETS

Cash and due from financial institutions

$

11,352

$

9,742

$

6,864

Interest bearing deposits in other financial institutions

65,373

84,429

7,964

Federal funds sold

4,923

169

2,038

Cash and cash equivalents

81,648

94,340

16,866

Time deposits in other financial institutions

2,187

2,687

4,659

Securities available for sale

228,214

206,318

122,112

Gross loans, excluding Paycheck Protection Program (PPP)

408,232

395,106

379,072

PPP Loans

27,593

24,522

-

Allowance for loan losses

(4,574

)

(4,490

)

(3,592

)

Net loans

431,251

415,138

375,480

Bank owned life insurance

10,236

10,185

10,026

Restricted equity securities

3,221

3,214

2,605

Premises and equipment, net

468

507

376

Accrued interest receivable

2,500

2,653

1,865

Deferred tax asset, net

352

-

802

Other assets

6,333

6,576

6,767

Total assets

$

766,410

$

741,618

$

541,558

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits

Non-interest bearing

$

179,883

$

170,251

$

120,269

Interest bearing

475,616

453,774

309,032

Total deposits

655,499

624,025

429,301

Federal Home Loan Bank advances

15,533

17,673

38,262

Federal Funds purchased

-

-

-

Subordinated debt

14,554

14,529

-

Deferred tax liability, net

479

Other liabilities

6,016

8,254

8,648

Total liabilities

691,602

664,960

476,211

SHAREHOLDERS' EQUITY

Additional paid-in capital

31,745

31,651

30,362

Retained earnings

40,761

41,433

35,151

Accumulated other comprehensive income (loss)

2,302

3,574

(166

)

Total shareholders' equity

74,808

76,658

65,347

Total liabilities and shareholders' equity

$

766,410

$

741,618

$

541,558

*The information is 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

March 31,
2021*

December 31,
2020*

March 31,
2020*

Non-interest income

Wealth management services

$

3,430

$

3,101

$

2,742

Service charges on deposit accounts

59

59

79

Securities gains (losses), net

-

-

-

Bank owned life insurance income

51

53

54

Other

16

65

148

Total non-interest income

3,556

3,278

3,023

Interest income

Loans, including fees

$

4,202

$

4,616

$

4,177

Taxable securities

660

646

534

Tax-exempt securities

379

347

196

Interest bearing deposits

62

79

109

Federal funds sold

0

1

14

Other interest income

20

35

12

Total interest income

5,323

5,724

5,042

Interest expense

Deposits

525

451

732

Short-term borrowings

-

-

-

Subordinated debentures

198

194

-

Long-term borrowings

77

115

91

Total interest expense

800

760

823

Net interest income

4,523

4,964

4,219

Provision for loan losses

92

228

185

Net interest income after provision for loan losses

4,431

4,736

4,034

Total revenue, net

7,987

8,014

7,057

Non interest expense

Salaries and employee benefits

3,106

2,872

2,928

Occupancy

221

219

199

Furniture and equipment

46

46

26

Data processing

347

319

263

Wealth management processing fees

176

163

124

Advertising and public relations

39

66

43

Professional services

127

112

168

FDIC insurance assessments

42

52

15

Other

228

168

264

Total non interest expense

4,332

4,017

4,030

Income before income taxes

3,655

3,997

3,027

Income tax expense

574

457

550

Net income

$

3,081

$

3,540

$

2,477

Earnings per share:

Basic

$

1.07

$

1.25

$

0.88

Diluted

$

1.06

$

1.23

$

0.87

*The information is 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)

March 31, 2021*

December 31, 2020*

March 31, 2020*

Per Common Share Data

Net income attributable to common shareholders, per share

Basic

$1.07

$1.25

$0.88

Diluted

$1.06

$1.23

$0.87

Book value per common share

$25.93

$26.77

$23.19

Tangible book value per common share

$25.93

$26.77

$23.19

Basic weighted average common shares

2,794,175

2,768,270

2,728,667

Diluted weighted average common shares

2,806,856

2,794,461

2,761,139

Common shares outstanding at period end

2,885,233

2,863,671

2,817,354

Selected Balance Sheet Data

Tangible common equity (TCE) ratio

9.76%

10.34%

12.07%

Average loans

$428,864

$420,106

$368,017

Average earning assets (1)

$709,535

$683,594

$510,886

Average total assets

$743,462

$719,206

$538,336

Average stockholders' equity

$77,851

$73,764

$65,434

Selected Asset Quality Measures

Nonaccrual loans

$2,007

$2,017

$0

90+ days past due still accruing

$0

$11

$0

Total nonperforming loans

$2,007

$2,017

$0

Total nonperforming assets

$2,007

$2,017

$0

Net charge offs

$1

$12

$2

Nonperforming loans to assets

0.26%

0.27%

0.00%

Nonperforming assets to total assets

0.26%

0.27%

0.00%

Nonperforming assets to total loans and other real estate

0.46%

0.48%

0.00%

Allowance for loan losses to gross loans

1.05%

1.07%

0.95%

Net charge offs to average loans

0.00%

0.00%

0.00%

Capital Ratios (Bank Subsidiary Only)

Tier 1 leverage

9.39%

9.38%

11.21%

Common equity tier 1

13.99%

14.10%

13.41%

Total risk-based capital

14.92%

15.05%

14.21%

Selected Performance Ratios

Efficiency ratio

53.62%

48.74%

55.65%

Return on average assets (ROA)

1.68%

1.96%

1.85%

Return on average stockholders' equity (ROE)

16.05%

19.09%

15.22%

Return on tangible common equity (ROTCE)

16.05%

19.09%

15.22%

Net interest margin

2.64%

2.95%

3.38%

*The information is 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

March 31, 2021*

December 31, 2020*

March 31, 2020*

Average
Balances

Rates/
Yields
(%)

Interest
Income/
Expense

Average
Balances

Rates/
Yields
(%)

Interest
Income/
Expense

Average
Balances

Rates/
Yields
(%)

Interest
Income/
Expense

Earning Assets

Loans

$428,864

3.65

$3,861

$420,106

3.75

$3,957

$368,017

4.55

$4,159

Loan fees

$0

0.32

$342

$0

0.63

$665

$0

0.04

$34

Loans with fees

$428,864

3.97

$4,203

$420,106

4.38

$4,622

$368,017

4.58

$4,193

Mortgage loans held for sale

$96

2.90

$1

$78

3.33

$1

$122

3.23

$1

Federal funds sold

$2,173

0.05

$0

$2,581

0.14

$1

$3,143

1.75

$14

Deposits with banks

$66,900

0.37

$62

$77,539

0.41

$79

$24,224

1.82

$109

Investment securities - taxable

$149,117

1.77

$660

$127,864

2.02

$646

$87,665

2.44

$534

Investment securities - tax-exempt

$62,385

3.29

$379

$55,425

3.39

$347

$26,939

3.93

$196

Total Earning Assets

$709,535

3.10

$5,305

$683,593

3.39

$5,696

$510,110

4.03

$5,048

Non interest earning assets

Allowance for loan losses

(4,541

)

(4,359

)

(3,411

)

Cash and due from banks

$10,346

$11,611

$9,399

Premises and equipment

$460

$500

$1,728

Accrued interest receivable

$2,209

$2,573

$1,651

Other real estate

$0

$0

$0

Other assets

$19,614

$20,416

$16,829

Unrealized gain (loss) on inv. securities

5,839

4,871

2,028

Total Assets

$743,462

$719,205

$538,334

Interest bearing liabilities

Interest bearing demand

$36,530

0.39

$35

$30,668

(0.08

)

($6

)

$32,868

0.69

$56

Savings and Money Market

$530,414

0.35

$464

$487,041

0.34

$415

$368,211

0.66

$605

Time deposits - Retail

$8,291

0.73

$15

$8,538

1.13

$24

$10,497

1.46

$38

Time Deposits - Wholesale

$24,299

0.19

$11

$22,451

0.31

$18

$5,488

2.38

$32

Total interest bearing deposits

$599,534

0.36

$525

$548,698

0.33

$451

$417,075

0.71

$732

Federal home Loan Bank advances

$15,981

1.93

$77

$17,738

1.92

$87

$20,950

1.72

$91

Subordinated debt

$14,798

5.34

$198

$14,629

5.19

$194

$0

Other borrowings

$1,456

0.61

$0

$31,730

1.10

$28

$1,456

0.04

$0

Total borrowed funds

$31,918

3.44

$275

$64,097

1.88

$309

$22,405

1.61

$91

Total interest bearing liabilities

$631,452

0.51

$800

$612,795

0.49

$760

$439,480

0.75

$823

Net interest rate spread

2.59

$4,505

2.90

$4,936

3.28

$4,225

Non-interest bearing deposits

$28,242

$24,645

$27,470

Other liabilities

$5,916

$7,787

$5,938

Stockholder's equity

$77,851

$73,764

$64,434

Total Liabilities and Stockholder's Equity

$743,462

$718,991

$538,323

Cost of funds

0.49

0.47

0.71

Net interest margin

2.64

2.95

3.38

*The information is 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.