EX-99.1 2 cstr-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

EARNINGS RELEASE

 

CONTACT

 

Denis J. Duncan

Chief Financial Officer

(615) 732-7492

 

 

img25355703_0.jpg 

 

 

CapStar Reports Third Quarter 2021 Results and Chattanooga Expansion

 

 

NASHVILLE, TN, October 21, 2021 (GLOBE NEWSWIRE) -- CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) today reported net income of $13.1 million or $0.59 per diluted share, for the quarter ended September 30, 2021, compared with net income of $12.1 million or $0.54 per diluted share, for the quarter ended June 30, 2021, and net income of $7.5 million or $0.34 per diluted share, for the quarter ended September 30, 2020. Annualized return on average assets and return on average equity for the quarter ended September 30, 2021 were 1.64 percent and 14.13 percent, respectively.

 

For the nine months ended September 30, 2021, the Company reported net income of $36.2 million or $1.63 per diluted share, compared with $15.0 million or $0.77 per diluted share, for the same period of 2020. Year to date 2021 annualized return on average assets and return on average equity were 1.56 percent and 13.48 percent, respectively.

 

Four Key Drivers

 

Targets

 

3Q21

 

2Q21

 

3Q20

Annualized revenue growth

 

> 5%

 

20.49%

 

8.96%

 

83.00%

Net interest margin

 

≥ 3.60%

 

3.12%

 

3.26%

 

2.72%

Efficiency ratio

 

 ≤ 55%

 

53.06%

 

57.97%

 

65.99%

Annualized net charge-offs to average loans

 

 ≤ 0.25%

 

0.05%

 

0.01%

 

0.00%

 

Concurrently, the Company announced the hiring of a team of nine experienced financial professionals to grow market share and serve clients in Chattanooga, TN. The group includes five Commercial Relationship Managers who will deliver CapStar’s banking solutions to businesses, their owners, professionals, and real estate investors; one senior credit officer; one office leader, and two support and processing associates. Brian Paris, former Financial Advisor at Pinnacle Financial Partners, will serve as CapStar’s Chattanooga market president. Paris has twenty years of banking experience within the Chattanooga region, including the past eleven at CapitalMark/Pinnacle where he has been a key contributor in creating the metro area’s fourth largest bank, according to FDIC deposit share data.

 

“Third quarter marks two milestone events as we report record earnings and announce our exciting Chattanooga expansion,” said Timothy K. Schools President and Chief Executive Officer of CapStar. “Originating from twenty-four months of tremendous focus on strategic alignment and execution, our associates are delivering winning results, improved profitability, and enhanced growth. I could not be more proud of our team and nothing illustrates their efforts more than the positive trends of our four key drivers and recent recognition by Piper Sandler as one of their 2021 Sm-All Stars.”

 

“In the summer of 2019, we established four clear strategic objectives: 1) enhance profitability and earnings consistency, 2) accelerate organic growth, 3) maintain sound risk management, and 4) execute disciplined capital allocation. Complimenting the first three objectives, we are rapidly expanding our customer-centric banking model in attractive, high-growth markets through the hiring of top-tier talent. At the outset of 2020, we expanded to Knoxville where our team’s loan commitments now exceed $150 million. This summer, we added one of Nashville’s highest volume mortgage

 

 

loan originators. Today, we are thrilled to welcome Brian Paris and his former teammates, who are among Chattanooga’s banking leaders. As we speak with bankers across the state, CapStar’s capabilities, size, customer responsiveness, and flexibility are attractive to high-quality talent seeking an organization where they can better serve their customers and have a greater relative impact.”

 

“As we plan for the new year, I am very encouraged by CapStar’s positioning and prospects to become one of Tennessee’s great banks. Tennessee’s fifth largest bank by assets, CapStar is leveraging the inherent advantage of operating in one of the best states in the nation to do business and live, has strategically positioned itself in three of the Southeast’s most dynamic markets where population and household income are growing faster than national averages, has one of the industry’s youngest and most experienced management teams, and is executing a focused business model that produces strong financial results. Having significant excess liquidity and capital, we are focused on strategic initiatives that take advantage of market opportunities to significantly improve our return on tangible equity, earnings per share, and book value per share over time.”

 

Revenue


Total revenue, defined as net interest income plus noninterest income, increased $1.7 million to $34.6 million from the prior quarter. Net interest income totaled $23.0 million, flat compared to the second quarter of 2021. Third quarter 2021 noninterest income totaled $11.7 million, an increase of $1.8 million from the prior quarter. The increase was attributable to continued strong performance within the Company's Mortgage, SBA Lending, and Tri-Net divisions.

 

Third quarter 2021 average earning assets increased to $2.93 billion compared to $2.85 billion at June 30, 2021. Average loans held for investment, excluding PPP balances, increased $24.6 million from the prior quarter, or 5.5 percent linked-quarter annualized. Loan growth continued to accelerate during the third quarter of 2021 with end of period loans held for investment, excluding PPP balances, increasing $42.2 million, or 9.4 percent linked-quarter annualized. Due to a significant increase in deposits over the past year, average loans as a percentage of average earning assets declined to 64.31 percent for third quarter 2021. The Company’s commercial loan pipeline remains strong, exceeding $400 million, presenting the Company a tremendous opportunity to utilize current excess liquidity and capital to grow revenue and net income.

 

The Company’s net interest margin continues to be positively and negatively impacted from the effects of the recent pandemic. For the third quarter of 2021, the net interest margin decreased 14 basis points from the prior quarter to 3.12 percent resulting principally from a reduction in revenues related to PPP forgiveness. Adjusting for the influence of PPP and excess deposits accumulated over the past year, the Company estimates its third quarter 2021 net interest margin was 3.36 percent, unchanged compared to the second quarter of 2021.

 

The Company's average deposits totaled $2.73 billion in the third quarter of 2021, an increase of $70.0 million compared to June 30, 2021. The Company experienced an increase of $39.9 million in average interest-bearing deposits offset by a $17.9 million reduction in higher cost time deposits. While in the short-term the Company is experiencing a period of excess liquidity, a key longer-term strategic initiative is to create a stronger deposit-led culture with an emphasis on lower cost relationship-based deposits. During the quarter, the Company’s lowest cost deposit category, noninterest bearing, increased $30.1 million on average from the prior quarter, or 16.55 percent linked-quarter annualized. Overall deposit costs declined 2 basis points to 0.19 percent.

 

Noninterest income during the quarter benefitted from record SBA and Tri-Net revenues, contributing $0.5 and $0.4 million improvements, respectively, when compared to the quarter ended June 30, 2021. Mortgage revenues remain strong increasing $0.8 million compared to the quarter ended June 30, 2021 to $4.7 million for the quarter ended September 30, 2021.

 

 

 

 

Noninterest Expense and Operating Efficiency

 

Noninterest expenses decreased $0.7 million from the second quarter of 2021 to $18.4 million in the third quarter of 2021. The third quarter noninterest expense decrease benefitted from a $0.4 million reduction in data processing fees related to decreases in processing of PPP loans and the absence of $0.3 million in acquisition related expenses incurred during the second quarter.

 

Efficiency is a key driver for the Company. The Company uses three metrics to monitor its performance relative to peers: efficiency ratio (noninterest expense as a percentage of total revenue), noninterest expense as a percentage of assets, and assets per employee. For the quarter ended September 30, 2021, the efficiency ratio was 53.06 percent, a decrease from 57.97 percent in the second quarter of 2021. Annualized noninterest expense as a percentage of average assets decreased to 2.30 percent for the quarter ended September 30, 2021 compared to 2.49 percent for the quarter ended June 30, 2021. Assets per employee decreased to $7.9 million as of September 30, 2021 compared to $8.4 million for the previous quarter. The continued favorable trend in operating efficiency metrics demonstrates the Company's commitment, ability, and success in controlling its costs in accordance with its four key strategic initiatives.

 

Asset Quality

 

Asset quality is a core tenant of the Company’s culture. Continued sound risk management and an improving economy led to continued low net charge-offs and strong credit metrics. Annualized net charge offs to average loans for the three months ended September 30, 2021, were 0.05 percent. Past due loans as a percentage of total loans held for investment improved to 0.31 percent at September 30, 2021 compared to 0.49 percent at June 30, 2021. Within this amount, loans greater than 90 days past due totaled $2.3 million, or 0.12 percent of loans held for investment at September 30, 2021, compared to 0.13 percent at June 30, 2021. Non-performing assets to total loans and OREO were 0.20 percent at September 30, 2021, an improvement from 0.22 percent at June 30, 2021. Criticized and classified loans to total loans, which elevated during the pandemic, continued to improve and were 2.85 percent at September 30, 2021, a 108 basis point decline from June 30, 2021.

 

Positive asset quality trends combined with strong loan growth, resulted in no provision expense during the third quarter of 2021. As a result, the allowance for loan losses plus the fair value mark on acquired loans to total loans, less PPP loans decreased 6 basis points to 1.41 percent at September 30, 2021 when compared to June 30, 2021.

 

Asset Quality Data:

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

 

12/31/2020

 

 

9/30/2020

 

Annualized net charge-offs to average loans

 

 

0.05

%

 

 

0.01

%

 

 

0.00

%

 

 

0.02

%

 

 

0.00

%

Criticized and classified loans to total loans

 

 

2.85

%

 

 

3.95

%

 

 

4.39

%

 

 

5.46

%

 

 

5.64

%

Classified loans to total risk-based capital

 

 

7.16

%

 

 

7.69

%

 

 

10.51

%

 

 

11.08

%

 

 

11.43

%

Loans- past due to total end of period loans

 

 

0.31

%

 

 

0.49

%

 

 

0.44

%

 

 

1.12

%

 

 

0.44

%

Loans- over 89 days past due to total end of period loans

 

 

0.12

%

 

 

0.13

%

 

 

0.14

%

 

 

0.23

%

 

 

0.09

%

Non-performing assets to total loans and OREO

 

 

0.20

%

 

 

0.22

%

 

 

0.30

%

 

 

0.28

%

 

 

0.16

%

Allowance for loan losses plus fair value marks / Non-PPP Loans

 

 

1.41

%

 

 

1.47

%

 

 

1.60

%

 

 

1.58

%

 

 

1.62

%

Allowance for loan losses to non-performing loans

 

 

657

%

 

 

571

%

 

 

446

%

 

 

483

%

 

 

787

%

 

Income Tax Expense

 

The Company’s third quarter effective income tax rate of approximately 19.0% remained unchanged from the prior quarter ended June 30, 2021. During the third quarter, the Company revised its expected annual effective tax rate for 2021 to approximately 20.0 percent, a 1.0 percent decrease from the previous estimate. The decrease is attributable to continued benefits in the Company's tax strategy.

 

 

 

 

Capital

 

The Company continues to be strongly capitalized with tangible equity of $322.1 million at September 30, 2021. Tangible book value per share of common stock for the quarter ended September 30, 2021 increased to $14.53 compared to $14.03 and $12.92 for the quarters ended June 30, 2021 and September 30, 2020, respectively. The regulatory capital ratios in the table below are significantly above levels required to be considered “well capitalized," which is the highest possible regulatory designation.

 

Capital ratios:

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

 

12/31/2020

 

 

9/30/2020

 

Total risk-based capital

 

 

16.23

%

 

 

16.13

%

 

 

16.29

%

 

 

16.03

%

 

 

15.96

%

Common equity tier 1 capital

 

 

13.95

%

 

 

13.78

%

 

 

13.79

%

 

 

13.52

%

 

 

13.39

%

Leverage

 

 

10.28

%

 

 

10.17

%

 

 

9.78

%

 

 

9.60

%

 

 

9.23

%

 

In the third quarter of 2021, the Company did not repurchase common stock under its share repurchase program. The total remaining authorization for future repurchases was $29.7 million as of September 30, 2021.

 

Dividend

 

On October 21, 2021, the Board of Directors of CapStar approved a quarterly cash dividend of $0.06 per common share payable on November 24, 2021 to shareholders of record as of November 10, 2021.

 

 

 

Conference Call and Webcast Information

 

CapStar will host a conference call and webcast at 9:00 a.m. Central Time on Friday, October 22, 2021. 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 2255846. 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, 2021, on a consolidated basis, CapStar had total assets of $3.1 billion, total loans of $1.9 billion, total deposits of $2.7 billion, and shareholders’ equity of $370.3 million. Visit www.capstarbank.com for more information.

 

 

 

NON-GAAP MEASURES

 

This release includes financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations. Such measures include: “Efficiency ratio – operating,” “Expenses – operating,” “Earnings per share – operating,” “Diluted earnings per share – operating,” “Tangible book value per share,” “Return on common equity – operating,” “Return on tangible common equity – operating,” “Return on assets – operating,” and “Tangible common equity to tangible assets.”

 

Management has included these non-GAAP measures because it believes these measures may provide useful supplemental information for evaluating CapStar’s underlying performance trends. Further, management uses these measures in managing and evaluating CapStar’s business and intends to refer to them in discussions about our operations and performance. Operating performance measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in the ‘Non-GAAP Reconciliation Tables’ included in the exhibits to this presentation.

 

 

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statements of Income (unaudited) (dollars in thousands, except share data)

Third quarter 2021 Earnings Release

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

22,350

 

 

$

22,796

 

 

$

66,936

 

 

$

61,620

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

1,655

 

 

 

1,193

 

 

 

4,900

 

 

 

3,465

 

Tax-exempt

 

 

344

 

 

 

343

 

 

 

1,065

 

 

 

975

 

Federal funds sold

 

 

9

 

 

 

—

 

 

 

12

 

 

 

—

 

Restricted equity securities

 

 

161

 

 

 

139

 

 

 

482

 

 

 

421

 

Interest-bearing deposits in financial institutions

 

 

171

 

 

 

171

 

 

 

405

 

 

 

640

 

Total interest income

 

 

24,690

 

 

 

24,642

 

 

 

73,800

 

 

 

67,121

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

390

 

 

 

640

 

 

 

1,216

 

 

 

3,371

 

Savings and money market accounts

 

 

288

 

 

 

2,537

 

 

 

896

 

 

 

4,819

 

Time deposits

 

 

654

 

 

 

1,299

 

 

 

2,317

 

 

 

4,197

 

Federal Home Loan Bank advances

 

 

—

 

 

 

116

 

 

 

12

 

 

 

348

 

Subordinated notes

 

 

394

 

 

 

394

 

 

 

1,181

 

 

 

394

 

Total interest expense

 

 

1,726

 

 

 

4,986

 

 

 

5,622

 

 

 

13,129

 

Net interest income

 

 

22,964

 

 

 

19,656

 

 

 

68,178

 

 

 

53,992

 

Provision for loan losses

 

 

—

 

 

 

2,119

 

 

 

(415

)

 

 

11,295

 

Net interest income after provision for loan losses

 

 

22,964

 

 

 

17,537

 

 

 

68,593

 

 

 

42,697

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Deposit service charges

 

 

1,187

 

 

 

1,064

 

 

 

3,398

 

 

 

2,531

 

Interchange and debit card transaction fees

 

 

1,236

 

 

 

936

 

 

 

3,555

 

 

 

2,389

 

Mortgage banking

 

 

4,693

 

 

 

9,686

 

 

 

13,318

 

 

 

19,063

 

Tri-Net

 

 

1,939

 

 

 

668

 

 

 

4,618

 

 

 

2,528

 

Wealth management

 

 

481

 

 

 

382

 

 

 

1,412

 

 

 

1,162

 

SBA lending

 

 

911

 

 

 

476

 

 

 

1,781

 

 

 

525

 

Net gain on sale of securities

 

 

7

 

 

 

34

 

 

 

20

 

 

 

74

 

Other noninterest income

 

 

1,197

 

 

 

1,558

 

 

 

3,446

 

 

 

3,228

 

Total noninterest income

 

 

11,651

 

 

 

14,804

 

 

 

31,548

 

 

 

31,500

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

10,980

 

 

 

12,949

 

 

 

31,210

 

 

 

33,256

 

Data processing and software

 

 

2,632

 

 

 

2,353

 

 

 

8,530

 

 

 

6,317

 

Occupancy

 

 

1,028

 

 

 

999

 

 

 

3,193

 

 

 

2,615

 

Equipment

 

 

760

 

 

 

864

 

 

 

2,640

 

 

 

2,295

 

Professional services

 

 

469

 

 

 

638

 

 

 

1,634

 

 

 

1,854

 

Regulatory fees

 

 

279

 

 

 

397

 

 

 

746

 

 

 

893

 

Acquisition related expenses

 

 

—

 

 

 

2,548

 

 

 

323

 

 

 

3,286

 

Amortization of intangibles

 

 

477

 

 

 

539

 

 

 

1,478

 

 

 

1,300

 

Other operating

 

 

1,741

 

 

 

1,452

 

 

 

5,105

 

 

 

4,067

 

Total noninterest expense

 

 

18,366

 

 

 

22,739

 

 

 

54,859

 

 

 

55,883

 

Income before income taxes

 

 

16,249

 

 

 

9,602

 

 

 

45,282

 

 

 

18,314

 

Income tax expense

 

 

3,147

 

 

 

2,115

 

 

 

9,075

 

 

 

3,299

 

Net income

 

$

13,102

 

 

$

7,487

 

 

$

36,207

 

 

$

15,015

 

Per share information:

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share of common stock

 

$

0.59

 

 

$

0.34

 

 

$

1.64

 

 

$

0.77

 

Diluted net income per share of common stock

 

$

0.59

 

 

$

0.34

 

 

$

1.63

 

 

$

0.77

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

22,164,278

 

 

 

21,948,579

 

 

 

22,114,948

 

 

 

19,558,281

 

Diluted

 

 

22,218,402

 

 

 

21,960,490

 

 

 

22,165,130

 

 

 

19,583,448

 

 

This information is preliminary and based on CapStar data available at the time of this earnings release.

 

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)

Third quarter 2021 Earnings Release

 

 

Five Quarter Comparison

 

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

 

12/31/2020

 

 

9/30/2020

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

22,964

 

 

$

23,032

 

 

$

22,182

 

 

$

22,331

 

 

$

19,656

 

Provision for loan losses

 

 

—

 

 

 

(1,065

)

 

 

650

 

 

 

184

 

 

 

2,119

 

Net interest income after provision for loan losses

 

 

22,964

 

 

 

24,097

 

 

 

21,532

 

 

 

22,147

 

 

 

17,537

 

Deposit service charges

 

 

1,187

 

 

 

1,109

 

 

 

1,102

 

 

 

964

 

 

 

1,064

 

Interchange and debit card transaction fees

 

 

1,236

 

 

 

1,227

 

 

 

1,092

 

 

 

782

 

 

 

936

 

Mortgage banking

 

 

4,693

 

 

 

3,910

 

 

 

4,716

 

 

 

5,971

 

 

 

9,686

 

Tri-Net

 

 

1,939

 

 

 

1,536

 

 

 

1,143

 

 

 

1,165

 

 

 

668

 

Wealth management

 

 

481

 

 

 

471

 

 

 

459

 

 

 

411

 

 

 

382

 

SBA lending

 

 

911

 

 

 

377

 

 

 

492

 

 

 

916

 

 

 

476

 

Net gain (loss) on sale of securities

 

 

7

 

 

 

(13

)

 

 

26

 

 

 

51

 

 

 

34

 

Other noninterest income

 

 

1,197

 

 

 

1,266

 

 

 

984

 

 

 

1,488

 

 

 

1,558

 

Total noninterest income

 

 

11,651

 

 

 

9,883

 

 

 

10,014

 

 

 

11,748

 

 

 

14,804

 

Salaries and employee benefits

 

 

10,980

 

 

 

10,803

 

 

 

9,427

 

 

 

11,996

 

 

 

12,949

 

Data processing and software

 

 

2,632

 

 

 

3,070

 

 

 

2,827

 

 

 

2,548

 

 

 

2,353

 

Occupancy

 

 

1,028

 

 

 

1,057

 

 

 

1,108

 

 

 

975

 

 

 

999

 

Equipment

 

 

760

 

 

 

980

 

 

 

899

 

 

 

900

 

 

 

864

 

Professional services

 

 

469

 

 

 

460

 

 

 

704

 

 

 

370

 

 

 

638

 

Regulatory fees

 

 

279

 

 

 

211

 

 

 

257

 

 

 

368

 

 

 

397

 

Acquisition related expenses

 

 

—

 

 

 

256

 

 

 

67

 

 

 

2,105

 

 

 

2,548

 

Amortization of intangibles

 

 

477

 

 

 

493

 

 

 

508

 

 

 

524

 

 

 

539

 

Other operating

 

 

1,741

 

 

 

1,750

 

 

 

1,616

 

 

 

1,692

 

 

 

1,452

 

Total noninterest expense

 

 

18,366

 

 

 

19,080

 

 

 

17,413

 

 

 

21,478

 

 

 

22,739

 

Net income before income tax expense

 

 

16,249

 

 

 

14,900

 

 

 

14,133

 

 

 

12,417

 

 

 

9,602

 

Income tax expense

 

 

3,147

 

 

 

2,824

 

 

 

3,103

 

 

 

2,736

 

 

 

2,115

 

Net income

 

$

13,102

 

 

$

12,076

 

 

$

11,030

 

 

$

9,681

 

 

$

7,487

 

Weighted average shares - basic

 

 

22,164,278

 

 

 

22,133,759

 

 

 

22,045,501

 

 

 

21,960,184

 

 

 

21,948,579

 

Weighted average shares - diluted

 

 

22,218,402

 

 

 

22,198,829

 

 

 

22,076,600

 

 

 

21,978,925

 

 

 

21,960,490

 

Net income per share, basic

 

$

0.59

 

 

$

0.55

 

 

$

0.50

 

 

$

0.44

 

 

$

0.34

 

Net income per share, diluted

 

 

0.59

 

 

 

0.54

 

 

 

0.50

 

 

 

0.44

 

 

 

0.34

 

Balance Sheet Data (at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

359,267

 

 

$

449,267

 

 

$

390,565

 

 

$

277,439

 

 

$

455,925

 

Securities available-for-sale

 

 

483,778

 

 

 

500,339

 

 

 

474,788

 

 

 

486,215

 

 

 

308,337

 

Securities held-to-maturity

 

 

1,788

 

 

 

2,395

 

 

 

2,401

 

 

 

2,407

 

 

 

2,413

 

Loans held for sale

 

 

176,488

 

 

 

158,234

 

 

 

171,660

 

 

 

186,998

 

 

 

208,218

 

Loans held for investment

 

 

1,894,249

 

 

 

1,897,838

 

 

 

1,931,687

 

 

 

1,883,690

 

 

 

1,896,988

 

Allowance for loan losses

 

 

(22,533

)

 

 

(22,754

)

 

 

(23,877

)

 

 

(23,245

)

 

 

(23,167

)

Total assets

 

 

3,112,127

 

 

 

3,212,390

 

 

 

3,150,457

 

 

 

2,987,006

 

 

 

3,024,348

 

Non-interest-bearing deposits

 

 

718,299

 

 

 

782,170

 

 

 

711,606

 

 

 

662,934

 

 

 

716,707

 

Interest-bearing deposits

 

 

1,956,093

 

 

 

1,998,024

 

 

 

2,039,595

 

 

 

1,905,067

 

 

 

1,900,835

 

Federal Home Loan Bank advances and other borrowings

 

 

29,499

 

 

 

29,487

 

 

 

29,455

 

 

 

39,423

 

 

 

39,418

 

Total liabilities

 

 

2,741,799

 

 

 

2,852,639

 

 

 

2,806,513

 

 

 

2,643,520

 

 

 

2,690,453

 

Shareholders' equity

 

$

370,328

 

 

$

359,752

 

 

$

343,944

 

 

$

343,486

 

 

$

333,895

 

Total shares of common stock outstanding

 

 

22,165,760

 

 

 

22,165,547

 

 

 

22,089,873

 

 

 

21,988,803

 

 

 

21,947,805

 

Book value per share of common stock

 

$

16.71

 

 

$

16.23

 

 

$

15.57

 

 

$

15.62

 

 

$

15.21

 

Tangible book value per share of common stock*

 

 

14.53

 

 

 

14.03

 

 

 

13.34

 

 

 

13.36

 

 

 

12.92

 

Market value per share of common stock

 

$

21.24

 

 

$

20.50

 

 

$

17.25

 

 

$

14.75

 

 

$

9.81

 

Capital ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total risk-based capital

 

 

16.23

%

 

 

16.13

%

 

 

16.29

%

 

 

16.03

%

 

 

15.96

%

Tier 1 risk-based capital

 

 

13.95

%

 

 

13.78

%

 

 

13.79

%

 

 

13.52

%

 

 

13.39

%

Common equity tier 1 capital

 

 

13.95

%

 

 

13.78

%

 

 

13.79

%

 

 

13.52

%

 

 

13.39

%

Leverage

 

 

10.28

%

 

 

10.17

%

 

 

9.78

%

 

 

9.60

%

 

 

9.23

%

_____________________

*This metric is a non-GAAP financial measure. See Non-GAAP disclaimer in this earnings release and below for discussion and reconciliation to the most directly comparable GAAP financial measure.

This information is preliminary and based on CapStar data available at the time of this earnings release.

 

 

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)

Third quarter 2021 Earnings Release

 

 

 

Five Quarter Comparison

 

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

 

12/31/2020

 

 

9/30/2020

 

Average Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

411,101

 

 

$

301,773

 

 

$

341,092

 

 

$

427,086

 

 

$

526,409

 

Investment securities

 

 

515,877

 

 

 

508,595

 

 

 

496,035

 

 

 

407,622

 

 

 

323,689

 

Loans held for sale

 

 

173,402

 

 

 

147,912

 

 

 

164,867

 

 

 

171,517

 

 

 

163,390

 

Loans held for investment

 

 

1,884,935

 

 

 

1,938,818

 

 

 

1,929,343

 

 

 

1,885,126

 

 

 

1,899,182

 

Assets

 

 

3,171,182

 

 

 

3,078,748

 

 

 

3,078,745

 

 

 

3,028,225

 

 

 

3,043,847

 

Interest bearing deposits

 

 

1,980,304

 

 

 

1,940,442

 

 

 

1,986,621

 

 

 

1,909,692

 

 

 

1,957,259

 

Deposits

 

 

2,732,165

 

 

 

2,662,192

 

 

 

2,663,551

 

 

 

2,613,080

 

 

 

2,648,465

 

Federal Home Loan Bank advances and other borrowings

 

 

29,495

 

 

 

29,467

 

 

 

33,879

 

 

 

39,428

 

 

 

39,431

 

Liabilities

 

 

2,803,375

 

 

 

2,719,898

 

 

 

2,728,064

 

 

 

2,687,516

 

 

 

2,722,341

 

Shareholders' equity

 

 

367,807

 

 

 

358,850

 

 

 

350,681

 

 

 

340,709

 

 

 

321,506

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized return on average assets

 

 

1.64

%

 

 

1.57

%

 

 

1.45

%

 

 

1.27

%

 

 

0.98

%

Annualized return on average equity

 

 

14.13

%

 

 

13.50

%

 

 

12.76

%

 

 

11.30

%

 

 

9.26

%

Net interest margin (1)

 

 

3.12

%

 

 

3.26

%

 

 

3.13

%

 

 

3.12

%

 

 

2.72

%

Annualized noninterest income to average assets

 

 

1.46

%

 

 

1.29

%

 

 

1.32

%

 

 

1.54

%

 

 

1.93

%

Efficiency ratio

 

 

53.06

%

 

 

57.97

%

 

 

54.08

%

 

 

63.02

%

 

 

65.99

%

Loans by Type (at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

478,279

 

 

$

536,279

 

 

$

609,896

 

 

$

623,446

 

 

$

638,403

 

Commercial real estate - owner occupied

 

 

193,139

 

 

 

200,725

 

 

 

197,758

 

 

 

162,603

 

 

 

164,336

 

Commercial real estate - non-owner occupied

 

 

579,857

 

 

 

538,521

 

 

 

505,252

 

 

 

481,229

 

 

 

480,106

 

Construction and development

 

 

210,516

 

 

 

198,448

 

 

 

170,965

 

 

 

174,859

 

 

 

176,751

 

Consumer real estate

 

 

328,262

 

 

 

331,580

 

 

 

336,496

 

 

 

343,791

 

 

 

350,238

 

Consumer

 

 

45,669

 

 

 

45,898

 

 

 

45,481

 

 

 

44,279

 

 

 

42,104

 

Other

 

 

58,527

 

 

 

46,387

 

 

 

65,839

 

 

 

53,483

 

 

 

45,050

 

Asset Quality Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to total loans

 

 

1.19

%

 

 

1.20

%

 

 

1.24

%

 

 

1.23

%

 

 

1.22

%

Allowance for loan losses to non-performing loans

 

 

657

%

 

 

571

%

 

 

446

%

 

 

483

%

 

 

787

%

Nonaccrual loans

 

$

3,431

 

 

$

3,985

 

 

$

5,355

 

 

$

4,817

 

 

$

2,945

 

Troubled debt restructurings

 

 

1,859

 

 

 

1,895

 

 

 

1,914

 

 

 

1,928

 

 

 

1,886

 

Loans - over 89 days past due

 

 

2,333

 

 

 

2,389

 

 

 

2,720

 

 

 

4,367

 

 

 

1,781

 

Total non-performing loans

 

 

3,431

 

 

 

3,985

 

 

 

5,355

 

 

 

4,817

 

 

 

2,945

 

OREO and repossessed assets

 

 

349

 

 

 

184

 

 

 

523

 

 

 

523

 

 

 

171

 

Total non-performing assets

 

 

3,780

 

 

 

4,169

 

 

 

5,878

 

 

 

5,340

 

 

 

3,116

 

Non-performing loans to total loans

 

 

0.18

%

 

 

0.21

%

 

 

0.28

%

 

 

0.26

%

 

 

0.16

%

Non-performing assets to total assets

 

 

0.12

%

 

 

0.13

%

 

 

0.19

%

 

 

0.18

%

 

 

0.10

%

Non-performing assets to total loans and OREO

 

 

0.20

%

 

 

0.22

%

 

 

0.30

%

 

 

0.28

%

 

 

0.16

%

Annualized net charge-offs to average loans

 

 

0.05

%

 

 

0.01

%

 

 

0.00

%

 

 

0.02

%

 

0.00%

 

Net charge-offs (recoveries)

 

$

221

 

 

$

59

 

 

$

18

 

 

$

106

 

 

$

(13

)

Interest Rates and Yields:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

 

4.41

%

 

 

4.43

%

 

 

4.36

%

 

 

4.50

%

 

 

4.48

%

Securities (1)

 

 

1.75

%

 

 

1.77

%

 

 

1.80

%

 

 

1.98

%

 

 

2.18

%

Total interest-earning assets (1)

 

 

3.35

%

 

 

3.51

%

 

 

3.42

%

 

 

3.45

%

 

 

3.41

%

Deposits

 

 

0.19

%

 

 

0.21

%

 

 

0.26

%

 

 

0.30

%

 

 

0.67

%

Borrowings and repurchase agreements

 

 

5.30

%

 

 

5.36

%

 

 

4.85

%

 

 

4.09

%

 

 

5.14

%

Total interest-bearing liabilities

 

 

0.34

%

 

 

0.37

%

 

 

0.42

%

 

 

0.49

%

 

 

0.99

%

Other Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Full-time equivalent employees

 

 

392

 

 

 

383

 

 

 

379

 

 

 

380

 

 

 

403

 

_____________________

 

This information is preliminary and based on CapStar data available at the time of this earnings 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 2021 Earnings Release

 

 

For the Three Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

 

Average
Outstanding
Balance

 

 

Interest
Income/
Expense

 

 

Average
Yield/
Rate

 

 

Average
Outstanding
Balance

 

 

Interest
Income/
Expense

 

 

Average
Yield/
Rate

 

Interest-Earning Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

1,884,935

 

 

$

20,942

 

 

 

4.41

%

 

$

1,899,182

 

 

$

21,398

 

 

 

4.47

%

Loans held for sale

 

 

173,402

 

 

 

1,408

 

 

 

3.22

%

 

 

163,390

 

 

 

1,398

 

 

 

3.56

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable investment securities (2)

 

 

455,583

 

 

 

1,816

 

 

 

1.59

%

 

 

271,838

 

 

 

1,332

 

 

 

1.96

%

Investment securities exempt from
   federal income tax (3)

 

 

60,294

 

 

 

344

 

 

 

2.90

%

 

 

51,851

 

 

 

343

 

 

 

3.35

%

Total securities

 

 

515,877

 

 

 

2,160

 

 

 

1.75

%

 

 

323,689

 

 

 

1,675

 

 

 

2.18

%

Cash balances in other banks

 

 

337,011

 

 

 

171

 

 

 

0.20

%

 

 

499,770

 

 

 

171

 

 

 

0.14

%

Funds sold

 

 

19,909

 

 

 

9

 

 

 

0.18

%

 

 

—

 

 

 

—

 

 

 

—

 

Total interest-earning assets

 

 

2,931,134

 

 

 

24,690

 

 

 

3.35

%

 

 

2,886,031

 

 

 

24,642

 

 

 

3.41

%

Noninterest-earning assets

 

 

240,048

 

 

 

 

 

 

 

 

 

157,816

 

 

 

 

 

 

 

Total assets

 

$

3,171,182

 

 

 

 

 

 

 

 

$

3,043,847

 

 

 

 

 

 

 

Interest-Bearing Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

 

$

984,874

 

 

 

390

 

 

 

0.16

%

 

$

840,926

 

 

 

640

 

 

 

0.30

%

Savings and money market deposits

 

 

589,101

 

 

 

288

 

 

 

0.19

%

 

 

610,942

 

 

 

2,537

 

 

 

1.65

%

Time deposits

 

 

406,329

 

 

 

654

 

 

 

0.64

%

 

 

505,391

 

 

 

1,299

 

 

 

1.02

%

Total interest-bearing deposits

 

 

1,980,304

 

 

 

1,332

 

 

 

0.27

%

 

 

1,957,259

 

 

 

4,476

 

 

 

0.91

%

Borrowings and repurchase agreements

 

 

29,495

 

 

 

394

 

 

 

5.30

%

 

 

39,431

 

 

 

510

 

 

 

5.14

%

Total interest-bearing liabilities

 

 

2,009,799

 

 

 

1,726

 

 

 

0.34

%

 

 

1,996,690

 

 

 

4,986

 

 

 

0.99

%

Noninterest-bearing deposits

 

 

751,862

 

 

 

 

 

 

 

 

 

691,205

 

 

 

 

 

 

 

Total funding sources

 

 

2,761,661

 

 

 

 

 

 

 

 

 

2,687,895

 

 

 

 

 

 

 

Noninterest-bearing liabilities

 

 

41,714

 

 

 

 

 

 

 

 

 

34,446

 

 

 

 

 

 

 

Shareholders’ equity

 

 

367,807

 

 

 

 

 

 

 

 

 

321,506

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

3,171,182

 

 

 

 

 

 

 

 

$

3,043,847

 

 

 

 

 

 

 

Net interest spread (4)

 

 

 

 

 

 

 

 

3.01

%

 

 

 

 

 

 

 

 

2.42

%

Net interest income/margin (5)

 

 

 

 

$

22,964

 

 

 

3.12

%

 

 

 

 

$

19,656

 

 

 

2.72

%

_____________________

 

(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 CapStar data available at the time of this earnings release.

 

 

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)

Third quarter 2021 Earnings Release

 

 

Five Quarter Comparison

 

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

 

12/31/2020

 

 

9/30/2020

 

Operating net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

13,102

 

 

$

12,076

 

 

$

11,030

 

 

$

9,681

 

 

$

7,487

 

Add: acquisition related expenses

 

 

—

 

 

 

256

 

 

 

67

 

 

 

2,105

 

 

 

2,548

 

Less: income tax impact of acquisition related expenses

 

 

—

 

 

 

(67

)

 

 

(18

)

 

 

(550

)

 

 

(666

)

Operating net income

 

$

13,102

 

 

$

12,265

 

 

$

11,079

 

 

$

11,236

 

 

$

9,369

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating diluted net income per
   share of common stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating net income

 

$

13,102

 

 

$

12,265

 

 

$

11,079

 

 

$

11,236

 

 

$

9,369

 

Weighted average shares - diluted

 

 

22,218,402

 

 

 

22,198,829

 

 

 

22,076,600

 

 

 

21,978,925

 

 

 

21,960,490

 

Operating diluted net income
   per share of common stock

 

$

0.59

 

 

$

0.55

 

 

$

0.50

 

 

$

0.51

 

 

$

0.43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating annualized return on average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating net income

 

$

13,102

 

 

$

12,265

 

 

$

11,079

 

 

$

11,236

 

 

$

9,369

 

Average assets

 

 

3,171,182

 

 

 

3,078,748

 

 

 

3,078,745

 

 

 

3,028,225

 

 

 

3,043,847

 

Operating annualized return on
   average assets

 

 

1.64

%

 

 

1.60

%

 

 

1.46

%

 

 

1.48

%

 

 

1.22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating annualized return on
   average tangible equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total shareholders' equity

 

$

367,807

 

 

$

358,850

 

 

$

350,681

 

 

$

340,709

 

 

$

321,506

 

Less: average intangible assets

 

 

(48,527

)

 

 

(49,012

)

 

 

(49,514

)

 

 

(50,038

)

 

 

(50,577

)

Average tangible equity

 

 

319,280

 

 

 

309,838

 

 

 

301,167

 

 

 

290,671

 

 

 

270,929

 

Operating net income

 

$

13,102

 

 

$

12,265

 

 

$

11,079

 

 

$

11,236

 

 

$

9,369

 

Operating annualized return on
   average tangible equity

 

 

16.28

%

 

 

15.88

%

 

 

14.92

%

 

 

15.38

%

 

 

13.76

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating efficiency ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

 

$

18,366

 

 

$

19,080

 

 

$

17,413

 

 

$

21,478

 

 

$

22,739

 

Less: acquisition related expenses

 

 

—

 

 

 

(256

)

 

 

(67

)

 

 

(2,105

)

 

 

(2,548

)

Total operating noninterest expense

 

 

18,366

 

 

 

18,824

 

 

 

17,346

 

 

 

19,373

 

 

 

20,191

 

Net interest income

 

 

22,964

 

 

 

23,032

 

 

 

22,182

 

 

 

22,331

 

 

 

19,656

 

Total noninterest income

 

 

11,651

 

 

 

9,883

 

 

 

10,014

 

 

 

11,748

 

 

 

14,804

 

Total revenues

 

$

34,615

 

 

$

32,915

 

 

$

32,196

 

 

$

34,079

 

 

$

34,460

 

Operating efficiency ratio:

 

 

53.06

%

 

 

57.19

%

 

 

53.88

%

 

 

56.85

%

 

 

58.59

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating annualized pre-tax pre-provision income to average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

$

16,249

 

 

$

14,900

 

 

$

14,133

 

 

$

12,417

 

 

$

9,602

 

Add: acquisition related expenses

 

 

—

 

 

 

256

 

 

 

67

 

 

 

2,105

 

 

 

2,548

 

Add: provision for loan losses

 

 

—

 

 

 

(1,065

)

 

 

650

 

 

 

184

 

 

 

2,119

 

Operating pre-tax pre-provision income

 

 

16,249

 

 

 

14,091

 

 

 

14,850

 

 

 

14,706

 

 

 

14,269

 

Average assets

 

$

3,171,182

 

 

$

3,078,748

 

 

$

3,078,745

 

 

$

3,028,225

 

 

$

3,043,847

 

Operating annualized pre-tax pre-provision income to average assets:

 

 

2.03

%

 

 

1.84

%

 

 

1.96

%

 

 

1.93

%

 

 

1.86

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

$

370,328

 

 

$

359,752

 

 

$

343,944

 

 

$

343,486

 

 

$

333,895

 

Less: intangible assets

 

 

(48,220

)

 

 

(48,697

)

 

 

(49,190

)

 

 

(49,698

)

 

 

(50,222

)

Tangible equity

 

$

322,108

 

 

$

311,055

 

 

$

294,754

 

 

$

293,788

 

 

$

283,673

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Book Value per Share of Common Stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity

 

$

322,108

 

 

$

311,055

 

 

$

294,754

 

 

$

293,788

 

 

$

283,673

 

Total shares of common stock outstanding

 

 

22,165,760

 

 

 

22,165,547

 

 

 

22,089,873

 

 

 

21,988,803

 

 

 

21,947,805

 

Tangible book value per share of common stock

 

$

14.53

 

 

$

14.03

 

 

$

13.34

 

 

$

13.36

 

 

$

12.92

 

 

 

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)

Third quarter 2021 Earnings Release

 

 

Nine Months Ended

 

 

 

9/30/2021

 

 

9/30/2020

 

Operating net income:

 

 

 

 

 

 

Net income

 

$

36,207

 

 

$

15,015

 

Add: acquisition related expenses

 

 

323

 

 

 

3,286

 

Less: income tax impact of acquisition related expenses

 

 

(84

)

 

 

(859

)

Operating net income

 

$

36,446

 

 

$

17,442

 

 

 

 

 

 

 

 

Operating diluted net income per
   share of common stock:

 

 

 

 

 

 

Operating net income

 

$

36,446

 

 

$

17,442

 

Weighted average shares - diluted

 

 

22,165,130

 

 

 

19,583,448

 

Operating diluted net income
   per share of common stock

 

$

1.64

 

 

$

0.89

 

 

 

 

 

 

 

 

Operating annualized return on average assets:

 

 

 

 

 

 

Operating net income

 

$

36,446

 

 

$

17,442

 

Average assets

 

$

3,109,897

 

 

$

2,486,433

 

Operating annualized return on
   average assets

 

 

1.57

%

 

 

0.94

%

 

 

 

 

 

 

 

Operating annualized return on
   average tangible equity:

 

 

 

 

 

 

Average total shareholders' equity

 

$

359,176

 

 

$

293,990

 

Less: average intangible assets

 

 

(49,014

)

 

 

(46,249

)

Average tangible equity

 

 

310,162

 

 

 

247,741

 

Operating net income

 

$

36,446

 

 

$

17,442

 

Operating annualized return on
   average tangible equity

 

 

15.71

%

 

 

9.40

%

 

 

 

 

 

 

 

Operating efficiency ratio:

 

 

 

 

 

 

Total noninterest expense

 

$

54,859

 

 

$

55,883

 

Less: acquisition related expenses

 

 

(323

)

 

 

(3,286

)

Total operating noninterest expense

 

 

54,536

 

 

 

52,597

 

Net interest income

 

 

68,178

 

 

 

53,992

 

Total noninterest income

 

 

31,548

 

 

 

31,500

 

Total revenues

 

$

99,726

 

 

$

85,492

 

Operating efficiency ratio:

 

 

54.69

%

 

 

61.52

%

 

 

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)

Third quarter 2021 Earnings Release

 

 

 

Five Quarter Comparison

 

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

 

12/31/2020

 

 

9/30/2020

 

Net interest income

 

$

22,964

 

 

$

23,032

 

 

$

22,182

 

 

$

22,331

 

 

$

19,656

 

Less: PPP loan income

 

 

(1,897

)

 

 

(2,686

)

 

 

(2,260

)

 

 

(2,184

)

 

 

(2,050

)

Less: Excess liquidity interest income

 

 

(545

)

 

 

(545

)

 

 

(504

)

 

 

(300

)

 

 

—

 

Plus: Loss recognized on termination of interest rate swap

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

1,910

 

Adjusted net interest income

 

 

20,522

 

 

 

19,801

 

 

 

19,418

 

 

 

19,847

 

 

 

19,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average interest earning assets

 

 

2,931,134

 

 

 

2,848,857

 

 

 

2,889,119

 

 

 

2,859,096

 

 

 

2,886,031

 

Less: Average PPP loans

 

 

(95,257

)

 

 

(173,733

)

 

 

(204,459

)

 

 

(204,918

)

 

 

(215,806

)

Less: Excess liquidity

 

 

(411,926

)

 

 

(301,325

)

 

 

(334,109

)

 

 

(341,654

)

 

 

(362,659

)

Adjusted interest earning assets

 

 

2,423,951

 

 

 

2,373,799

 

 

 

2,350,551

 

 

 

2,312,524

 

 

 

2,307,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (1)

 

 

3.12

%

 

 

3.26

%

 

 

3.13

%

 

 

3.12

%

 

 

2.72

%

Adjusted Net interest margin (1)

 

 

3.36

%

 

 

3.36

%

 

 

3.35

%

 

 

3.41

%

 

 

3.40

%

 

 

 

Five Quarter Comparison

 

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

 

12/31/2020

 

 

9/30/2020

 

Allowance for loan losses

 

$

22,533

 

 

$

22,754

 

 

$

23,877

 

 

$

23,245

 

 

$

23,167

 

Purchase accounting marks

 

 

3,288

 

 

 

3,533

 

 

 

3,615

 

 

 

3,663

 

 

 

4,013

 

Allowance for loan losses and purchase accounting fair value marks

 

 

25,821

 

 

 

26,287

 

 

 

27,492

 

 

 

26,908

 

 

 

27,180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for investment

 

 

1,894,249

 

 

 

1,897,838

 

 

 

1,931,687

 

 

 

1,883,690

 

 

 

1,896,988

 

Less: PPP Loans net of deferred fees

 

 

64,188

 

 

 

109,940

 

 

 

210,810

 

 

 

181,601

 

 

 

216,799

 

Non-PPP Loans

 

 

1,830,061

 

 

 

1,787,898

 

 

 

1,720,877

 

 

 

1,702,089

 

 

 

1,680,189

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses plus fair value marks / Non-PPP Loans

 

 

1.41

%

 

 

1.47

%

 

 

1.60

%

 

 

1.58

%

 

 

1.62

%

_____________________

 

(1)
Net interest margin and adjusted net interest margin are shown on a tax equivalent basis.