EX-99.1 2 cstr-ex991_6.htm EX-99.1 cstr-ex991_6.htm

Exhibit 99.1

EARNINGS RELEASE

 

CONTACT

 

Rob Anderson

Chief Financial Officer and Chief Administrative Officer

(615) 732-6470

 

 

 

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

 

NASHVILLE, TN, October 24, 2019/GlobeNewswire/ -- 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.

 

o

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.

 

o

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

%