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Truxton Corporation Reports Second Quarter 2021 Results

·17 min read

NASHVILLE, Tenn., July 22, 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 June 30, 2021. Second quarter net income attributable to common shareholders was $3.6 million or $1.22 per diluted share compared to $2.6 million or $0.92 per diluted share for the same quarter in 2020. Net income rose by 36% for the quarter compared to the second quarter of 2020 while fully diluted earnings per share rose by 33%.

“Truxton’s second quarter 2021 performance was exceptional in many ways,” said Chairman and CEO Tom Stumb. “Wealth management revenue increased 33% from this quarter last year. Securities markets were strong, and many new families entrusted their wealth to the professionals at Truxton. Loans, excluding Paycheck Protection Program (PPP) loans, grew 18% from the end of June 2020. Our lenders continued to deepen relationships with families and businesses in our market. Nashville continues to experience very strong economic and population growth, and Truxton is a beneficiary. This quarter’s strong performance resulted in part from $254,000 in PPP loan fee recognition, which will continue to boost earnings as the remainder of these loans are forgiven over the next two quarters but is not expected to persist into next year.”

Key Highlights

  • Non-interest income grew to $3.9 million in the second quarter, an increase of 10% from the first quarter of 2021 and 33% in comparison to the second quarter of 2020. Wealth management services constituted 95% of non-interest income in the second quarter of 2021.

  • Loans rose by 5% to $452 million compared to March 31, 2021, and were up 9% compared to June 30, 2020. Excluding PPP loans, loans rose by 8% compared to March 31, 2021, and 18% compared to June 30, 2020.

  • Total deposits increased by 8% from March 31, 2021 to $707.4 million, and increased by 38% in comparison to June 30, 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 second quarter of 2021 was 2.71%, an increase of 7 basis points from the 2.64% experienced in the first quarter of 2021, and a decrease of 42 basis points from the second quarter of 2020. Cost of funds was 0.46% in the second quarter of 2021, down from 0.49% for the quarter ended March 31, 2021, but up from 0.36% the quarter ended June 30, 2020. The year-over-year increase was the result of the issuance of $15 million of 4.5% subordinated notes in September 2020. We continue to have excess liquidity because of the deposit growth we experienced in 2020 that has continued into the second quarter of 2021.

  • Asset quality remains sound at Truxton. Truxton had $2 million in non-performing assets at June 30, 2021, 98% of which was represented by a single residential mortgage. Truxton had $1,000 of charge-offs in the quarter, $8,000 in the trailing quarter, and $8,000 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, $4.6 million, and $4.0 million at quarter end June 30, 2021, March 31, 2020, and June 30, 2020, respectively. For the same three periods, the Bank’s allowance was 1.00%, 1.05%, and 0.95%, respectively, of gross loans (including PPP loans) outstanding at period end.

  • Tax expense increased by 27% from the March 31, 2021 quarter and by 20% from the June 30, 2020 period. 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 9.47% at June 30, 2021, 9.39% at March 31, 2021, and 9.82% at June 30, 2020. Book value per common share was $27.35, $25.93, and $24.41 at June 30, 2021, March 31, 2021, and June 30, 2020, respectively. During the twelve months ended June 30, 2021, Truxton Corporation paid dividends of $2.16 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.


Truxton Corporation

Consolidated Balance Sheets

(000's)

(Unaudited)

June 30, 2021*

March 31, 2021*

June 30, 2020*

ASSETS

Cash and due from financial institutions

$

10,232

$

11,101

$

10,581

Interest bearing deposits in other financial institutions

92,671

65,624

70,022

Federal funds sold

5,375

4,923

8,559

Cash and cash equivalents

108,278

81,648

89,162

Time deposits in other financial institutions

2,185

2,187

4,683

Securities available for sale

235,032

228,214

137,372

Gross loans

441,997

408,232

373,263

Allowance for loan losses

(4,575

)

(4,574

)

(4,003

)

Paycheck Protection Program Loans

15,068

27,593

46,639

Net loans

452,490

431,251

415,899

Bank owned life insurance

10,288

10,236

10,079

Restricted equity securities

3,228

3,221

2,695

Premises and equipment, net

405

468

454

Accrued interest receivable

2,260

2,500

2,447

Deferred tax asset, net

-

352

-

Other assets

6,531

6,333

7,808

Total assets

$

820,697

$

766,410

$

670,599

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits

Non-interest bearing

$

164,176

$

179,883

$

158,062

Interest bearing

543,238

475,616

354,346

Total deposits

707,414

655,499

512,408

Federal Home Loan Bank advances

12,835

15,533

33,036

Federal Funds purchased

-

-

-

Paycheck Protection Program Liquidity Facility advances

-

-

46,639

Subordinated debt

14,748

14,554

-

Other liabilities

6,947

6,016

9,303

Total liabilities

741,944

691,602

601,386

SHAREHOLDERS' EQUITY

Additional paid-in capital

31,556

31,745

30,591

Retained earnings

43,446

40,761

36,971

Accumulated other comprehensive income (loss)

3,751

2,302

1,651

Total shareholders' equity

78,753

74,808

69,213

Total liabilities and shareholders' equity

$

820,697

$

766,410

$

670,599

*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,
2021*

March 31,
2021*

June 30,
2020*

June 30,
2021*

June 30,
2020*

Non-interest income

Wealth management services

$

3,726

$

3,430

$

2,793

$

7,156

$

5,535

Service charges on deposit accounts

82

59

60

141

139

Securities gains (losses), net

0

0

0

0

0

Bank owned life insurance income

51

51

53

102

107

Other

50

16

34

66

182

Total non-interest income

3,909

3,556

2,940

7,465

5,963

Interest income

Loans, including fees

$

4,434

$

4,202

$

4,282

$

8,636

$

8,459

Taxable securities

719

661

486

1,380

1,020

Tax-exempt securities

395

379

245

774

441

Interest bearing deposits

46

62

54

108

163

Federal funds sold

1

0

2

1

16

Other interest income

47

20

34

67

46

Total interest income

5,642

5,324

5,103

10,966

10,145

Interest expense

Deposits

514

525

371

1,039

1,102

Short-term borrowings

-

-

-

-

-

Subordinated debentures

194

198

-

392

-

Long-term borrowings

72

77

129

149

220

Total interest expense

780

800

500

1,580

1,322

Net interest income

4,862

4,524

4,603

9,386

8,823

Provision for loan losses

0

92

418

92

603

Net interest income after provision for loan losses

4,862

4,432

4,185

9,294

8,220

Total revenue, net

8,771

7,988

7,125

16,759

14,183

Non interest expense

Salaries and employee benefits

3,230

3,106

2,797

6,336

5,726

Occupancy

246

221

222

467

422

Furniture and equipment

42

46

30

88

56

Data processing

327

344

290

671

552

Wealth management processing fees

164

180

130

343

254

Advertising and public relations

34

39

25

74

68

Professional services

183

127

156

310

324

FDIC insurance assessments

42

42

38

84

53

Other

221

228

215

449

479

Total non interest expense

4,489

4,333

3,903

8,822

7,934

Income before income taxes

4,282

3,655

3,222

7,937

6,249

Income tax expense

731

574

608

1,305

1,159

Net income

$

3,551

$

3,081

$

2,614

$

6,632

$

5,090

Earnings per share:

Basic

$

1.23

$

1.07

$

0.93

$

2.30

$

1.83

Diluted

$

1.22

$

1.06

$

0.92

$

2.29

$

1.81

*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, 2021*

March 31, 2021*

June 30, 2020*

Per Common Share Data

Net income attributable to shareholders, per share

Basic

$1.23

$1.07

$0.93

Diluted

$1.22

$1.06

$0.92

Book value per common share

$27.35

$25.93

$24.41

Tangible book value per common share

$27.35

$25.93

$24.41

Basic weighted average comm shares

2,814,196

2,794,175

2,740,504

Diluted weighted average common shares

2,825,668

2,806,856

2,768,173

Common shares outstanding at period end

2,879,177

2,885,233

2,834,951

Selected Balance Sheet Data

Tangible common equity (TEC) ratio

9.60%

9.76%

10.32%

Average Loans

$446,079

$428,864

$419,360

Average earning assets (1)

$732,416

$709,535

$599,030

Average total assets

$765,391

$743,462

$629,800

Average stockholders' equity

$77,148

$77,851

$67,204

Selected Asset Quality Measures

Nonaccrual loans

2007

2007

2059

90+ days past due still accruing

38

156

0

Total nonperforming loans

2045

2163

2059

Total nonperforming assets

2045

2163

2059

Net charge offs (recoveries)

1

8

8

Nonperforming loans to assets

0.24%

0.26%

0.31%

Nonperforming assets to total assets

0.25%

0.28%

0.31%

Nonperforming assets to total loans and other real estate

0.45%

0.46%

0.49%

Allowance for loan losses to total loans

1.00%

1.05%

0.95%

Net charge offs (recoveries) to average loans

0.00%

0.00%

0.00%

Capital Ratios (Bank Subsidiary Only)

Tier 1 leverage

9.47%

9.39%

9.82%

Common equity tier 1

13.80%

13.99%

13.61%

Total risk-based capital

14.70%

14.92%

14.49%

Selected Performance Ratios

Efficiency ratio

51.67%

53.62%

54.22%

Return on average assets (ROA)

1.86%

1.68%

1.67%

Return on average stockholders' equity (ROE)

18.46%

16.05%

15.64%

Return on tangible common equity (ROTCE)

18.46%

16.05%

15.64%

Net interest margin

2.71%

2.64%

3.13%

*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, 2021*

March 31, 2021*

June 30, 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

$

446,079

3.64

$

4,049

$

428,864

3.65

$

3,861

$

419,360

3.92

$

4,092

Loan fees

$

0

0.35

$

385

$

0

0.32

$

342

$

0

0.19

$

189

Loans with fees

$

446,079

3.99

$

4,433

$

428,864

3.97

$

4,203

$

419,360

4.11

$

4,281

Mortgage loans held for sale

$

108

3.16

$

1

$

96

2.90

$

1

$

87

5.20

$

1

Federal funds sold

$

2,124

0.06

$

0

$

2,173

0.05

$

0

$

5,372

0.12

$

2

Deposits with banks

$

53,857

0.34

$

46

$

66,900

0.37

$

62

$

49,801

0.44

$

54

Investment securities - taxable

$

164,584

1.75

$

719

$

149,117

1.77

$

660

$

90,256

2.15

$

486

Investment securities - tax-exempt

$

65,665

3.25

$

395

$

62,385

3.29

$

379

$

34,403

3.86

$

245

Total Earning Assets

$

732,416

3.14

$

5,594

$

709,535

3.10

$

5,305

$

599,279

3.46

$

5,069

Non interest earning assets

Allowance for loan losses

(4,575

)

(4,541

)

(3,702

)

Cash and due from banks

$

10,601

$

10,346

$

8,776

Premises and equipment

$

403

$

460

$

400

Accrued interest receivable

$

2,114

$

2,209

$

1,989

Other real estate

$

0

$

0

$

0

Other assets

$

20,112

$

19,614

$

20,726

Unrealized gain (loss) on inv. securities

4,320

5,839

2,332

Total Assets

$

765,391

$

743,462

$

629,800

Interest bearing liabilities

Interest bearing demand

$

34,695

0.18

$

15

$

36,530

0.39

$

35

$

33,084

0.22

$

18

Savings and Money Market

$

559,805

0.34

$

470

$

530,414

0.35

$

464

$

408,757

0.30

$

300

Time deposits - Retail

$

9,920

0.61

$

15

$

8,291

0.73

$

15

$

10,977

1.24

$

34

Time Deposits - Wholesale

$

20,271

0.28

$

14

$

24,299

0.19

$

11

$

2,087

3.72

$

19

Total interest bearing deposits

$

624,691

0.33

$

514

$

599,534

0.36

$

525

$

454,905

0.33

$

371

Federal home Loan Bank advances

$

14,603

1.95

$

72

$

15,981

1.93

$

77

$

35,720

1.13

$

102

Subordinated debt

$

14,679

5.23

$

194

$

14,798

5.34

$

198

$

0

0.00

$

0

Other borrowings

$

1,090

0.98

$

0

$

1,139

0.61

$

0

$

32,931

0.33

$

27

Total borrowed funds

$

30,371

3.47

$

266

$

31,918

3.44

$

275

$

68,651

0.74

$

129

Total interest bearing liabilities

$

655,062

0.48

$

780

$

631,452

0.51

$

800

$

523,556

0.38

$

500

Net interest rate spread

2.66

$

4,814

2.59

$

4,505

3.08

$

4,574

Non-interest bearing deposits

$

28,186

$

28,242

$

31,315

Other liabilities

$

4,995

$

5,916

$

7,725

Stockholder's equity

$

77,148

$

77,851

$

67,204

Total Liabilities and Stockholder's Equity

$

765,391

$

743,462

$

629,800

Cost of funds

0.46

0.49

0.36

Net interest margin

2.71

2.64

3.13

*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, 2021*

June 30, 2020*

Average
Balances

Rates/
Yields (%)

Interest
Income/
Expense

Average
Balances

Rates/
Yields (%)

Interest
Income/
Expense

Earning Assets

Loans

$

437,519

4.21

$

7,910

$

393,688

4.21

$

8,251

Loan fees

$

0

0.12

$

725

$

0

0.12

$

228

Loans with fees

$

437,519

4.33

$

8,635

$

393,688

4.33

$

8,479

Mortgage loans held for sale

$

102

4.05

$

2

$

105

4.05

$

2

Federal funds sold

$

2,148

0.73

$

1

$

4,258

0.73

$

16

Deposits with banks

$

60,342

0.88

$

108

$

37,157

0.88

$

163

Investment securities - taxable

$

156,893

2.29

$

1,380

$

88,960

2.29

$

1,020

Investment securities - tax-exempt

$

64,034

3.89

$

774

$

30,671

3.89

$

441

Total Earning Assets

$

721,038

3.72

$

10,898

$

554,839

3.72

$

10,121

Non interest earning assets

Allowance for loan losses

(4,558

)

(3,557

)

Cash and due from banks

$

10,474

$

8,943

Premises and equipment

$

431

$

353

Accrued interest receivable

$

2,162

$

1,820

Other real estate

$

0

$

0

Other assets

$

19,870

$

19,489

Unrealized gain (loss) on inv. securities

5,075

2,180

Total Assets

$

754,492

$

584,068

Interest bearing liabilities

Interest bearing demand

$

35,608

0.29

$

50

$

32,976

0.45

$

74

Savings and Money Market

$

545,191

0.35

$

933

$

388,489

0.05

$

905

Time deposits - Retail

$

9,110

0.67

$

30

$

10,737

1.35

$

72

Time Deposits - Wholesale

$

22,274

0.23

$

25

$

3,788

2.75

$

52

Total interest bearing deposits

$

612,182

0.34

$

1,039

$

435,990

0.51

$

1,103

Federal home Loan Bank advances

$

15,288

1.94

$

149

$

28,335

1.34

$

193

Subordinated debt

$

14,738

5.58

$

392

$

0

0.00

$

0

Other borrowings

$

1,114

0.86

$

0

$

17,193

0.32

$

27

Total borrowed funds

$

31,140

3.45

$

541

$

45,528

0.96

$

220

Total interest bearing liabilities

$

643,323

0.49

$

1,580

$

481,518

0.55

$

1,323

Net interest rate spread

2.63

$

9,318

3.17

$

8,799

Non-interest bearing deposits

$

28,214

$

29,393

Other liabilities

$

5,459

$

6,833

Stockholder's equity

$

77,497

$

66,319

Total Liabilities and Stockholder's Equity

$

754,492

$

584,063

Cost of funds

0.47

0.52

Net interest margin

2.68

3.24

*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.


Investor Relations

Media Relations

Andrew May

Tamara Schoeplein

615-515-1707

615-515-1714

andrew.may@truxtontrust.com

tamara.schoeplein@truxtontrust.com