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Truxton Corporation Reports Fourth Quarter 2020 Results

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NASHVILLE, Tenn., Jan. 28, 2021 (GLOBE NEWSWIRE) -- Truxton Corporation (OTCPK: TRUX), the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended December 31, 2020. Fourth quarter net income attributable to common shareholders was $3.5 million or $1.23 per diluted share compared to $2.5 million or $0.88 per diluted share for the same quarter in 2019. Net income increased by 43.2% and earnings per diluted share increased by 39.7% for the quarter compared to the fourth quarter of 2019. For the twelve months ended December 31, 2020, net income increased by 14.4% to $11.1 million from $9.7 million in the comparable period in 2019. For the twelve months ended December 31, 2020, earnings per diluted share rose to $3.90 from $3.46, an increase of 12.7% from the comparable period in 2019.

During the fourth quarter, Truxton received notice from the Small Business Administration (SBA) that 134 loans totaling $22.2 million had been forgiven under the terms of the Paycheck Protection Program (PPP). Truxton recognized as income in the quarter the unamortized fees associated with these loans. In the quarter ended December 31, 2020, Truxton recognized $670 thousand of income from PPP fees. As of December 31, 2020, Truxton had $24.5 million in PPP loans outstanding with $429 thousand in unamortized fees. In addition, Truxton made loans in the quarter which qualify for tax credits under the Community Investment Tax Credit (CITC) program of the State of Tennessee. These credits reduced Truxton’s state tax provision by $325 thousand in the final quarter of 2020.

Chairman and CEO Tom Stumb remarked, “Truxton appreciates the patience and loyalty of our clients and the courage and dedication of our remarkable team of employees during a trying year. We were able to deliver a 16.1% return on our average equity capital (ROAE) for the full year, the highest in our history because Truxton performed superbly for clients throughout the year. Whether it was working nights and weekends to master the intricacies of the PPP loan program, or assisting families in managing wealth during a period of economic and political uncertainty, the Truxton team enhanced business and personal relationships with wonderful families and the businesses they own.”

Key Highlights

  • Wealth management revenue rose 19.5% in the fourth quarter of 2020 compared to the fourth quarter of 2019. Wealth management services constituted 95% of non-interest income in the fourth quarter ended December 31, 2020.

  • Loans rose by 15.4% to $420 million compared to December 31, 2019 and were up 1.3% compared to September 30, 2020.

  • We ended the fourth quarter with $24.5 million in loans outstanding pursuant to the Paycheck Protection Program (PPP) provisions of the CARES Act. These loans assisted our small business clients in covering payrolls and other essential costs during the pandemic period.

  • Total deposits grew to $624 million or 39.3% since December 31, 2019, inclusive of deposits added as a result of funding PPP loans and new business growth. 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 significantly less than many of our peers.

  • Net interest margin for the fourth quarter of 2020 was 2.95%. That represents an increase of 11 basis points from the 2.84% experienced in the quarter ended September 30, 2020, and a decline of 26 basis points from the quarter ended December 31, 2019. Cost of funds increased to 0.47% in the fourth quarter of 2020 from 0.35% for the quarter ended September 30, 2020 but declined from 0.95% for the quarter ended December 31, 2019. Net interest margin was negatively impacted by the PPP loans, which carry a 1% interest rate.

  • Asset quality remains sound at Truxton. Truxton had $2.0 million in non-performing assets at December 31, 2020, up from $0 at December 31, 2019. A single residential mortgage comprises over 95% of our non-performing loans.

  • Provision for loan losses was $228 thousand for the quarter ended December 31, 2020, an increase from no provision in the same quarter in 2019 and down from $262 thousand in the quarter ended September 30, 2020. Allowance for loan losses was $4.5 million, $4.3 million, and $3.4 million as of December 31, 2020, September 30, 2020, and December 31, 2019, respectively. For the three periods, the bank’s allowance was 1.07%, 1.03%, and 0.94%, of gross loans outstanding at period end, respectively. There is no allowance associated with the $24.5 million of PPP loans outstanding at December 31, 2020.

  • The Bank’s capital position remains strong. Tier 1 leverage ratio was 9.38% at December 31, 2020, 9.43% at September 30, 2020, and 11.30% at December 31, 2019. The reduction in Tier 1 leverage ratio for the year was principally the result of the significant asset growth experienced in the year. Book value per common share was $26.77, $25.27, and $22.84 at December 31, 2020, September 30, 2020, and December 31, 2019, respectively. During the 12 months ended December 31, 2020, Truxton Corporation paid dividends of $2.12 per common share.

  • With the onset of the pandemic in March 2020, Truxton began providing borrowers interest and/or principal payment deferrals for up to 180 days in an amount eventually impacting $63.6 million in loans, or 17% of non-PPP total loan balances. As of December 31, 2020, those loans still receiving borrower payment deferrals totaled $5.8 million or 1.47% of non-PPP loans.

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)

December 31,
2020*

September 30,
2020*

December 31,
2019*

ASSETS

Cash and due from financial institutions

$

9,742

$

12,772

$

8,868

Interest bearing deposits in other financial institutions

84,429

90,836

19,519

Federal funds sold

169

2,223

8,808

Cash and cash equivalents

94,340

105,831

37,195

Time deposits in other financial institutions

2,687

2,938

5,157

Securities available for sale

206,318

156,558

116,032

Gross loans, excluding Paycheck Protection Program (PPP) Loans

395,106

367,689

363,784

PPP Loans

24,522

46,684

-

Allowance for loan losses

(4,490

)

(4,257

)

(3,409

)

Net loans

415,138

410,116

360,375

Mortgage loans held for sale, net

-

-

350

Bank owned life insurance

10,185

10,132

9,973

Restricted equity securities

3,214

3,206

2,599

Premises and equipment, net

507

538

273

Accrued interest receivable

2,653

2,850

1,842

Deferred tax asset, net

-

106

520

Other assets

6,576

7,044

4,448

Total assets

$

741,618

$

699,319

$

538,764

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits

Non-interest bearing

$

170,251

$

150,083

$

119,999

Interest bearing

453,774

388,959

328,077

Total deposits

624,025

539,042

448,076

Federal Home Loan Bank advances

17,673

17,867

18,411

Paycheck Protection Program Liquidity Facility advances

-

46,639

-

Subordinated debt

14,529

14,574

-

Deferred tax liability, net

479

-

-

Other liabilities

8,254

9,527

8,914

Total liabilities

664,960

627,649

475,401

SHAREHOLDERS' EQUITY

Additional paid-in capital

31,651

30,832

29,770

Retained earnings

41,433

38,696

33,511

Accumulated other comprehensive income

3,574

2,142

82

Total shareholders' equity

76,658

71,670

63,363

Total liabilities and shareholders' equity

$

741,618

$

699,319

$

538,764

*The information is unaudited and based on company data available at the time of presentation.



Truxton Corporation

Consolidated Statements of Net Income

(000's)

Three Months Ended

Year Ended

December 31,
2020*

September 30,
2020*

December 31,
2019*

December 31,
2020

December 31,
2019

Non-interest income

Wealth management services

$

3,101

$

2,832

$

2,596

$

11,469

$

10,746

Service charges on deposit accounts

59

59

82

256

303

Securities gains, net

-

-

-

-

131

Bank owned life insurance income

53

53

54

212

218

Other

65

15

57

262

271

Total non-interest income

3,278

2,959

2,789

12,199

11,669

Gross loans, excluding Paycheck Protection Program (PPP) Loans

0

PPP Loans

$

4,616

$

4,126

$

4,062

$

17,201

$

16,083

Taxable securities

646

472

584

2,137

2,060

Tax-exempt securities

347

299

196

1,088

887

Interest bearing deposits

79

90

125

332

744

Federal funds sold

1

2

8

19

34

Other interest income

35

13

45

94

153

Total interest income

5,724

5,002

5,020

20,871

19,961

Interest expense

Deposits

451

389

984

1,941

4,120

Short-term borrowings

-

-

1

-

17

Subordinated debentures

194

-

-

194

-

Long-term borrowings

115

134

90

468

412

Total interest expense

760

523

1,075

2,603

4,549

Net interest income

4,964

4,479

3,945

18,268

15,412

Provision for loan losses

228

262

0

1,093

55

Net interest income after provision for loan losses

4,736

4,217

3,945

17,175

15,357

Total Revenue, net

8,014

7,176

6,734

29,374

27,026

Non interest expense

Salaries and employee benefits

2,872

2,781

2,671

11,380

10,699

Occupancy

219

228

200

868

808

Furniture and equipment

46

46

27

153

108

Data processing

319

296

342

1,169

1,209

Wealth management processing fees

163

102

126

520

462

Advertising and public relations

66

30

121

163

198

Professional services

112

190

211

626

596

FDIC insurance assessments

52

45

(73

)

150

32

Other

168

238

195

887

879

Total non interest expense

4,017

3,956

3,820

15,916

14,991

Income before income taxes

3,997

3,220

2,914

13,458

12,035

Income tax expense

457

693

441

2,309

2,293

Net income

$

3,540

$

2,527

$

2,473

$

11,149

$

9,742

Earnings per share:

Basic

$

1.25

$

0.89

$

0.89

$

3.94

$

3.53

Diluted

$

1.23

$

0.88

$

0.88

$

3.90

$

3.46

*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)

December 31, 2020*

September 30, 2020*

December 31, 2019*

Per Common Share Data

Net income attributable to shareholders, per share

Basic

$1.25

$0.89

$0.89

Diluted

$1.23

$0.88

$0.88

Book value per common share

$26.77

$25.27

$22.84

Tangible book value per common share

$26.77

$25.27

$22.84

Basic weighted average common shares

2,768,270

2,758,375

2,699,777

Gross loans, excluding Paycheck Protection Program (PPP) Loans

2,794,461

2,789,562

2,754,101

PPP Loans

2,863,671

2,836,451

2,774,655

Selected Balance Sheet Data

Tangible common equity (TEC) ratio

10.34%

10.32%

11.76%

Average loans

$420,106

$413,716

$348,635

Average earning assets (1)

$683,594

$642,326

$492,829

Average total assets

$719,206

$677,985

$518,902

Average stockholders' equity

$73,764

$71,183

$65,457

Selected Asset Quality Measures

Nonaccrual loans

$2,017

$2,044

0

90+ days past due still accruing

$11

$0

0

Total nonperforming loans

$2,017

$2,044

0

Total nonperforming assets

$2,017

$2,044

0

Net charge offs (recoveries)

$12

$0

$1

Nonperforming loans to assets

0.27%

0.29%

0.00%

Nonperforming assets to total assets

0.27%

0.29%

0.00%

Nonperforming assets to total loans and other real estate

0.48%

0.49%

0.00%

Allowance for loan losses to gross loans

1.07%

1.03%

0.94%

Net charge offs (recoveries) to average loans

0.00%

0.00%

0.00%

Capital Ratios (Bank Subsidiary Only)

Tier 1 leverage

9.38%

9.43%

11.30%

Common equity tier 1

14.10%

14.60%

13.70%

Total risk-based capital

15.05%

15.58%

14.51%

Selected Performance Ratios

Efficiency ratio

46.95%

53.01%

55.67%

Return on average assets (ROA)

1.96%

1.48%

1.89%

Return on average stockholders' equity (ROE)

19.09%

14.12%

15.77%

Return on tangible common equity (ROTCE)

19.09%

14.12%

15.77%

Net interest margin

2.95%

2.84%

3.21%

*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)

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

December 31, 2020*

September 30, 2020*

December 31, 2019*

Average Balances

Rates/ Yields (%)

Interest Income/ Expense

Average Balances

Rates/ Yields (%)

Interest Income/ Expense

Average Balances

Rates/ Yields (%)

Interest Income/ Expense

Earning assets

Gross loans, excluding Paycheck Protection Program (PPP) Loans

$420,106

3.75

$3,957

$413,716

3.74

$3,891

$348,635

4.60

$4,044

PPP Loans

$0

0.63

$665

$0

0.23

$240

$0

0.03

$24

Loans with fees

$420,106

4.38

$4,622

$413,716

3.97

$4,131

$348,635

4.63

$4,068

Mortgage loans held for sale

$78

3.33

$1

$0

0.00

$0

$13

3.55

$0

Federal funds sold

$2,581

0.14

$1

$4,340

0.17

$2

$1,944

1.66

$8

Deposits with banks

$77,539

0.41

$79

$83,360

0.43

$90

$25,747

1.93

$125

Investment securities - taxable

$127,864

2.02

$646

$96,081

1.96

$471

$89,614

2.61

$584

Investment securities - tax-exempt

$55,425

3.39

$347

$44,829

3.61

$299

$26,876

3.93

$196

Total earning assets

$683,593

3.39

$5,696

$642,326

3.16

$4,993

$492,829

4.07

$4,981

Non interest earning assets

Allowance for loan losses

(4,359

)

(4,122

)

(3,411

)

Cash and due from banks

$11,611

$11,256

$8,263

Premises and equipment

$500

$484

$1,623

Accrued interest receivable

$2,573

$2,502

$1,600

Other real estate

$0

$0

$0

Other assets

$20,416

$20,485

$16,343

Unrealized gain (loss) on inv. securities

4,871

5,053

1,656

Total assets

$719,205

$677,984

$518,903

Interest bearing liabilities

Interest bearing demand

$30,668

(0.08

)

($

6

)

$31,416

(0.03

)

($

3

)

$28,241

0.41

$29

Savings and money market

$487,041

0.34

$415

$454,105

0.31

$351

$349,734

0.84

$737

Time deposits - retail

$8,538

1.13

$24

$9,796

1.20

$30

$14,023

1.83

$65

Time deposits - wholesale

$22,451

0.31

$18

$15,285

0.27

$11

$8,695

6.99

$153

Total interest bearing deposits

$548,698

0.33

$451

$510,603

0.30

$389

$400,693

0.97

$984

Federal Home Loan Bank advances

$17,738

1.92

$87

$25,435

1.43

$93

$18,490

1.89

$90

Subordinated debt

$14,629

5.19

$194

$0

0.00

$0

$0

0.00

$0

Other borrowings

$31,730

1.10

$28

$48,454

0.33

$41

$1,417

0.21

$1

Total borrowed funds

$64,097

1.88

$309

$73,889

0.71

$134

$19,907

1.77

$91

Total interest bearing liabilities

$612,795

0.49

$760

$584,492

0.35

$523

$420,600

1.01

$1,074

Net interest rate spread

2.90

$4,936

2.81

$4,470

3.06

$3,907

Non-interest bearing deposits

$24,645

$14,564

$27,422

Other liabilities

$7,787

$7,745

$5,423

Shareholder's equity

$73,764

$71,183

$65,457

Total liabilities and shareholder's equity

$718,991

$677,984

$518,902

Cost of funds

0.47

0.35

0.95

Net interest margin

2.95

2.84

3.21

*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 or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid.



Truxton Corporation

Yield Tables

for the Periods Indicated

(000's)

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:

Twelve Months Ended

Twelve Months Ended

December 31, 2020

December 31, 2019

Average Balances

Rates/ Yields (%)

Interest Income/ Expense

Average Balances

Rates/ Yields (%)

Interest Income/ Expense

Earning assets

Gross loans, excluding Paycheck Protection Program (PPP) Loans

$405,363

3.97

$16,099

$338,675

4.74

$16,038

PPP Loans

$0

0.28

$1,132

$0

0.03

$87

Loans with fees

$405,363

4.25

$17,231

$338,675

4.76

$16,125

Mortgage loans held for sale

$72

3.86

$3

$55

3.29

$2

Federal funds sold

$3,857

0.05

$18

$1,570

2.16

$34

Deposits with banks

$59,043

0.56

$332

$30,857

2.41

$744

Investment securities - taxable

$100,529

2.13

$2,138

$79,071

2.61

$2,060

Investment securities - tax-exempt

$40,452

3.63

$1,088

$30,856

3.89

$887

Total earning assets

$609,316

3.48

$20,810

$481,084

4.19

$19,852

Non interest earning assets

Allowance for loan losses

(3,900

)

(3,393

)

Cash and due from banks

$10,074

$7,290

Premises and equipment

$423

$1,537

Accrued interest receivable

$2,181

$1,597

Other real estate

$0

$0

Other assets

$19,973

$16,111

Unrealized gain (loss) on inv. securities

3,579

607

Total assets

$641,646

$504,833

Interest bearing liabilities

Interest bearing demand

$32,004

0.20

$65

$27,131

0.69

$187

Savings and money market

$429,755

0.39

$1,671

$342,244

1.05

$3,584

Time deposits - retail

$9,948

1.26

$126

$12,203

1.49

$181

Time deposits - wholesale

$11,369

0.69

$79

$7,131

2.35

$167

Total interest bearing deposits

$483,076

0.40

$1,941

$388,709

1.06

$4,119

Federal Home Loan Bank advances

$24,942

1.47

$372

$20,957

1.94

$412

Subordinated debt

$3,816

5.00

$194

$0

0.00

$0

Other borrowings

$28,566

1.50

$96

$1,817

0.93

$17

Total borrowed funds

$57,324

1.14

$662

$22,774

1.86

$429

Total interest bearing liabilities

$540,400

0.48

$2,603

$411,483

1.10

$4,548

Net interest rate spread

3.00

$18,207

3.09

$15,304

Non-interest bearing deposits

$24,472

$27,400

Other liabilities

$7,302

$4,141

Shareholder's equity

$69,413

$61,783

Total liabilities and shareholder's equity

$641,587

$504,807

Cost of funds

0.46

1.04

Net interest margin

3.05

3.25

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 or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid.