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

Exhibit 99.1

EARNINGS RELEASE

 

CONTACT

 

Michael J. Fowler

Chief Financial Officer

(615) 732-7404

 

img25355703_0.jpg 

 

 

CapStar Reports Third Quarter 2023 Results

 

 

NASHVILLE, TN, October 26, 2023 (GLOBE NEWSWIRE) - CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) today reported net income of $8.9 million or $0.43 per diluted share, for the quarter ended September 30, 2023, compared with net income of $7.8 million or $0.37 per diluted share, for the quarter ended June 30, 2023, and net income of $8.0 million or $0.37 per diluted share, for the quarter ended September 30, 2022. Annualized return on average assets and return on average equity for the quarter ended September 30, 2023 was 1.10% and 10.18%, respectively.

 

“CapStar’s third quarter results demonstrate the hard work of our associates to mitigate the impact of the rapid rise in interest rates over the past year,” said Timothy K. Schools, CapStar President and Chief Executive Officer. “While the pace in the rise of market deposit rates slowed during the quarter, marginal deposit rates remain high relative to portfolio and new production loan yields and clients continue to migrate toward higher yielding deposit products. In response, we are focusing on controlling the controllables - liquidity, credit, expenses, and capital - each showing strength this quarter."

 

“Over the past five years, our team has repositioned CapStar enhancing its performance and long-term prospects. Today’s merger announcement will build on and further accelerate our progress. This partnership follows 16 years of meaningful work and best positions CapStar’s employees, customers, and shareholders for future success. Excitingly, our organizations share common missions and cultures, and CapStar will be a major contributor to their organization as we strengthen Old National’s recent entry into Tennessee.”

“I am thankful for the opportunity to have led CapStar and worked with so many talented professionals. Our team’s results during this period are nothing short of remarkable. Key accomplishments include:

•
Created a highly effective workforce elevating our Gallup engagement index to 73rd percentile nationally
•
Elevated operating results being named by Bank Director as the nation’s 14th highest performing publicly traded bank in 2022 and the highest performing Tennessee-based bank each of the past three years
•
Annualized growth in total assets of 12.5% to $3.3 billion to include expansion into the dynamic Rutherford/Williamson County, Asheville, Chattanooga, and Knoxville markets
•
Annualized growth in dividends per share of 19.9%
•
Total shareholder return for the period of 12.5% as compared to negative 15.6% for the KRE regional bank index”

 

 

 

 

 

Revenue


Total revenue, defined as net interest income plus noninterest income, was $26.6 million in the third quarter of 2023 compared to the second quarter of 2023 revenue of $28.8 million.

 

Third quarter net interest income decreased $2.2 million from the prior quarter to $20.4 million while noninterest income remained stable at $6.3 million.

 

Third quarter 2023 average earning assets increased $27.4 million to $2.99 billion compared to the second quarter 2023. The growth in average earning assets was attributed to an increase in average cash balances of $112.0 million and offset by a decrease in average loans held for investment of $58.6 million. The related yield on loans held for investment increased 19 basis points from the prior quarter to 5.98%.

Over the past year, the Company has been proactive and disciplined in curtailing lending on commercial real estate investment properties and to non-depositors, focusing primarily on liquidity management. While third quarter 2023 end of period loan held for investment balances declined versus the second quarter of 2023, the Company maintains strong lending capabilities in robust markets.

The net interest margin decreased 35 basis points from the prior quarter to 2.71%. Excess interest-bearing cash reduced the net interest margin by 14 basis points in the third quarter of 2023, versus a 4 basis point adverse net interest margin impact for the second quarter of 2023. The remaining net interest margin decline was principally related to rising deposit rates as a result of intense market competition, which has eased somewhat recently. The total cost of deposits increased 59 basis points from the second quarter of 2023 to 2.85% in the third quarter of 2023, exceeding the 19 basis point loan yield increase in the third quarter of 2023 versus the second quarter of 2023.

Third quarter 2023 noninterest income as compared to the second quarter of 2023 benefited from increased treasury management revenue, service charges and BOLI offset by declines in mortgage banking and SBA lending. The Company’s Tri-Net business continues to remain disciplined awaiting a return to rational market pricing with limited originations and sales occurring in 2023.

 

Noninterest Expense and Operating Efficiency

 

Noninterest expense was $17.1 million for the third quarter of 2023, compared to $19.2 million in the second quarter of 2023. Third quarter noninterest expense benefited from a $1.0 million decrease in salaries and employee benefits as well a $0.5 million recovery of a wire fraud expense previously recognized in the third quarter of 2022.

 

The efficiency ratio was 64.07% for the quarter ended September 30, 2023 and 66.61% for the quarter ended June 30, 2023. Annualized noninterest expense as a percentage of average assets was 2.10% for the quarter ended September 30, 2023 which is a decrease of 31 basis points compared to the quarter ended June 30, 2023. Assets per employee increased to $8.9 million as of September 30, 2023 compared to $8.3 million in the previous quarter.

 

Asset Quality

 

Due to a decrease in end of period loans held for investment and unfunded commitments versus the second quarter of 2023 along with improved macroeconomic forecasts, the Company recorded a recovery of provision of $1.6 million during the third quarter. Net loan charge-offs in third quarter totaled $0.4 million or 0.06% annualized of average loans held for investment.

 

Past due loans increased to $5.9 million or 0.26% of total loans held for investment at September 30, 2023 compared to $3.6 million or 0.15% of total loans held for investment at June 30, 2023. Management remains very pleased with the low level of past dues, as the prior quarter total was near a record low during the past five years.

 

 

Non-performing assets to total loans held for investment and OREO were 0.28% at September 30, 2023 compared to 0.48% at June 30, 2023. Two relationships with aggregate outstanding balances of $7.9 million returned to accrual status based on positive financial performance and timely payments.

 

The allowance for credit losses related to loans declined to 1.05% as of September 30, 2023 from 1.08% at June 30, 2023. The allowance for credit losses related to unfunded commitments declined to 0.39% of available balances from 0.43% at June 30, 2023.

 

Asset Quality Data:

 

9/30/2023

 

 

6/30/2023

 

 

3/31/2023

 

 

12/31/2022

 

 

9/30/2022

 

Annualized net charge-offs to average loans

 

 

0.06

%

 

 

0.03

%

 

 

0.03

%

 

 

0.03

%

 

 

0.02

%

Criticized and classified loans to total loans

 

 

1.40

%

 

 

1.36

%

 

 

1.76

%

 

 

1.31

%

 

 

1.79

%

Loans- past due to total end of period loans

 

 

0.26

%

 

 

0.15

%

 

 

0.35

%

 

 

0.50

%

 

 

0.63

%

Loans-over 90 days past due to total period end loans

 

 

0.17

%

 

 

0.08

%

 

 

0.05

%

 

 

0.44

%

 

 

0.27

%

Non-performing assets to total loans held for investment and OREO

 

 

0.28

%

 

 

0.48

%

 

 

0.42

%

 

 

0.46

%

 

 

0.30

%

Allowance for credit losses on loans to non-performing loans

 

 

376

%

 

 

228

%

 

 

249

%

 

 

222

%

 

 

333

%

 

Income Tax Expense

 

The Company’s third quarter effective income tax rate increased to 19.9% when compared to 18.6% in the prior quarter ended June 30, 2023 and remains relatively stable compared to the rate of 19.8% for the quarter ended September 30, 2022. The Company expects its effective tax rate for 2023 to be approximately 19.5%.

 

Capital

 

The Company continues to be strongly capitalized with equity of $345.6 million and tangible equity of $300.7 million at September 30, 2023. At September 30, 2023, CapStar’s Leverage Ratio was 11.08%, Common Equity Tier I ratio was 13.38%, and its Total Risk-Based Capital ratio was 15.36%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. As all investments are designated as available-for-sale, the Tangible Common Equity to Tangible Assets ratio of 9.34% is inclusive of all unrealized investment portfolio losses.

 

Book value per share of common stock as of September 30, 2023 was $16.67, compared to $16.64 and $15.84 for the quarters ended June 30, 2023 and September 30, 2022. Tangible book value per share of common stock was $14.50 as of September 30, 2023 compared to $14.47 and $13.72 for the quarters ended June 30, 2023 and September 30, 2022. Excluding the impact of after-tax unrealized gain or loss within the available for sale investment portfolio, tangible book value per share of common stock for the quarter ended September 30, 2023 was $17.33 compared to $16.95 and $16.16 for the quarters ended June 30, 2023 and September 30, 2022, respectively.

 

Consolidated Capital ratios:

 

9/30/2023

 

 

6/30/2023

 

 

3/31/2023

 

 

12/31/2022

 

 

9/30/2022

 

Total risk-based capital

 

 

15.36

%

 

 

14.34

%

 

 

13.98

%

 

 

14.51

%

 

 

14.59

%

Common equity tier 1 capital

 

 

13.38

%

 

 

12.40

%

 

 

12.09

%

 

 

12.61

%

 

 

12.70

%

Leverage

 

 

11.08

%

 

 

11.05

%

 

 

11.20

%

 

 

11.40

%

 

 

11.22

%

Tangible common equity to tangible assets *

 

 

9.34

%

 

 

9.64

%

 

 

9.67

%

 

 

10.03

%

 

 

9.65

%

 

As a component of the Company’s capital allocation strategy, $4.3 million was returned to shareholders in the third quarter of 2023 in the form of share repurchases and dividends. In total, 140,110 shares were repurchased at an average price of $14.81. The Board of Directors of the Company renewed a common stock share repurchase authorization of up to $20 million on May 25, 2023. The Plan will terminate on the earlier of the date on which the maximum authorized dollar amount of shares of common stock has been repurchased or January 31, 2024.

 

Liquidity

 

Liquidity sources remain strong at a total $1.7 billion as of September 30, 2023 compared to the June 30, 2023 total of $1.5 billion. Sources as of September 30, 2023 include cash and equivalents of $352.4 million, unpledged securities of $167.2 million, remaining borrowing capacity with the FHLB of $424.6 million, borrowing capacity with the Federal Reserve Discount Window of $302.2 million, the ability to issue an additional $218.0 million of brokered CDs based on internal limits, federal funds lines of $115.0 million, loans held-for-sale of $36.4 million and $62.6 million of additional funding capacity through the Federal Reserve’s Bank Term Funding Program.

 

The Company is pleased with $143.1 million of growth in customer end-of-period deposit balances versus the second quarter of 2023.

 

Dividend

 

On October 25, 2023, the Board of Directors of the Company approved a quarterly dividend of $0.11 per common share payable on November 22, 2023 to shareholders of record of CapStar’s common stock as of the close of business on November 8, 2023.

 

Conference Call and Webcast Information

In light of the Company's announced merger, CapStar will not host the previously announced conference call and webcast at 10:00 a.m. Central Time on Friday, October 27, 2023.

 

 

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

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

Third quarter 2023 Earnings Release

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

35,441

 

 

$

27,335

 

 

$

102,215

 

 

$

71,476

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

1,964

 

 

 

1,966

 

 

 

5,940

 

 

 

5,643

 

Tax-exempt

 

 

301

 

 

 

314

 

 

 

923

 

 

 

958

 

Federal funds sold

 

 

40

 

 

 

7

 

 

 

163

 

 

 

31

 

Restricted equity securities

 

 

300

 

 

 

215

 

 

 

788

 

 

 

544

 

Interest-bearing deposits in financial institutions

 

 

3,218

 

 

 

617

 

 

 

6,305

 

 

 

1,076

 

Total interest income

 

 

41,264

 

 

 

30,454

 

 

 

116,334

 

 

 

79,728

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

6,672

 

 

 

1,205

 

 

 

14,092

 

 

 

2,279

 

Savings and money market accounts

 

 

4,393

 

 

 

1,603

 

 

 

10,906

 

 

 

2,401

 

Time deposits

 

 

8,777

 

 

 

1,332

 

 

 

21,713

 

 

 

2,271

 

Federal funds purchased

 

 

—

 

 

 

2

 

 

 

—

 

 

 

2

 

Federal Home Loan Bank advances

 

 

660

 

 

 

365

 

 

 

2,283

 

 

 

461

 

Subordinated notes

 

 

393

 

 

 

394

 

 

 

1,181

 

 

 

1,181

 

Total interest expense

 

 

20,895

 

 

 

4,901

 

 

 

50,175

 

 

 

8,595

 

Net interest income

 

 

20,369

 

 

 

25,553

 

 

 

66,159

 

 

 

71,133

 

Provision for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

(Recovery of) provision for credit losses on loans

 

 

(1,017

)

 

 

867

 

 

 

(447

)

 

 

926

 

Provision for credit losses on available-for-sale securities

 

 

—

 

 

 

—

 

 

 

2,000

 

 

 

—

 

Recovery of credit losses on unfunded commitments

 

 

(544

)

 

 

—

 

 

 

(650

)

 

 

—

 

Total (recovery of) provision for credit losses

 

 

(1,561

)

 

 

867

 

 

 

903

 

 

 

926

 

Net interest income after provision for credit losses

 

 

21,930

 

 

 

24,686

 

 

 

65,256

 

 

 

70,207

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Deposit service charges

 

 

1,347

 

 

 

1,251

 

 

 

3,979

 

 

 

3,575

 

Interchange and debit card transaction fees

 

 

1,195

 

 

 

1,245

 

 

 

3,293

 

 

 

3,803

 

Mortgage banking

 

 

749

 

 

 

765

 

 

 

2,997

 

 

 

4,436

 

Tri-Net

 

 

19

 

 

 

(2,059

)

 

 

46

 

 

 

39

 

Wealth management

 

 

441

 

 

 

385

 

 

 

1,241

 

 

 

1,284

 

SBA lending

 

 

531

 

 

 

560

 

 

 

2,599

 

 

 

1,054

 

Net gain on sale of securities

 

 

—

 

 

 

7

 

 

 

5

 

 

 

8

 

Other noninterest income

 

 

1,996

 

 

 

1,118

 

 

 

4,605

 

 

 

4,038

 

Total noninterest income

 

 

6,278

 

 

 

3,272

 

 

 

18,765

 

 

 

18,237

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,573

 

 

 

8,712

 

 

 

30,447

 

 

 

28,191

 

Data processing and software

 

 

3,245

 

 

 

2,861

 

 

 

9,750

 

 

 

8,355

 

Occupancy

 

 

1,161

 

 

 

1,092

 

 

 

3,451

 

 

 

3,266

 

Equipment

 

 

591

 

 

 

743

 

 

 

2,087

 

 

 

2,235

 

Professional services

 

 

674

 

 

 

468

 

 

 

2,361

 

 

 

1,653

 

Regulatory fees

 

 

435

 

 

 

269

 

 

 

1,267

 

 

 

814

 

Amortization of intangibles

 

 

352

 

 

 

415

 

 

 

1,104

 

 

 

1,291

 

Other operating

 

 

1,041

 

 

 

3,371

 

 

 

4,831

 

 

 

6,935

 

Total noninterest expense

 

 

17,072

 

 

 

17,931

 

 

 

55,298

 

 

 

52,740

 

Income before income taxes

 

 

11,136

 

 

 

10,027

 

 

 

28,723

 

 

 

35,704

 

Income tax expense

 

 

2,211

 

 

 

1,988

 

 

 

5,548

 

 

 

7,018

 

Net income

 

$

8,925

 

 

$

8,039

 

 

$

23,175

 

 

$

28,686

 

Per share information:

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share of common stock

 

$

0.43

 

 

$

0.37

 

 

$

1.10

 

 

$

1.30

 

Diluted net income per share of common stock

 

$

0.43

 

 

$

0.37

 

 

$

1.09

 

 

$

1.30

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

20,808,677

 

 

 

21,938,259

 

 

 

21,142,177

 

 

 

22,051,950

 

Diluted

 

 

20,823,971

 

 

 

21,988,085

 

 

 

21,172,712

 

 

 

22,104,687

 

 

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 2023 Earnings Release

 

 

Five Quarter Comparison

 

 

 

9/30/2023

 

 

6/30/2023

 

 

3/31/2023

 

 

12/31/2022

 

 

9/30/2022

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

20,369

 

 

$

22,571

 

 

$

23,219

 

 

$

24,959

 

 

$

25,553

 

(Recovery of) provision for credit losses

 

 

(1,561

)

 

 

22

 

 

 

2,442

 

 

 

1,548

 

 

 

867

 

Net interest income after provision for credit losses

 

 

21,930

 

 

 

22,549

 

 

 

20,777

 

 

 

23,411

 

 

 

24,686

 

Deposit service charges

 

 

1,347

 

 

 

1,264

 

 

 

1,368

 

 

 

1,206

 

 

 

1,251

 

Interchange and debit card transaction fees

 

 

1,195

 

 

 

1,060

 

 

 

1,038

 

 

 

1,250

 

 

 

1,245

 

Mortgage banking

 

 

749

 

 

 

955

 

 

 

1,293

 

 

 

637

 

 

 

765

 

Tri-Net

 

 

19

 

 

 

27

 

 

 

—

 

 

 

39

 

 

 

(2,059

)

Wealth management

 

 

441

 

 

 

426

 

 

 

374

 

 

 

403

 

 

 

385

 

SBA lending

 

 

531

 

 

 

977

 

 

 

1,091

 

 

 

1,446

 

 

 

560

 

Net gain on sale of securities

 

 

—

 

 

 

—

 

 

 

5

 

 

 

1

 

 

 

7

 

Other noninterest income

 

 

1,996

 

 

 

1,503

 

 

 

1,106

 

 

 

1,303

 

 

 

1,118

 

Total noninterest income

 

 

6,278

 

 

 

6,212

 

 

 

6,275

 

 

 

6,285

 

 

 

3,272

 

Salaries and employee benefits

 

 

9,573

 

 

 

10,533

 

 

 

10,341

 

 

 

9,875

 

 

 

8,712

 

Data processing and software

 

 

3,245

 

 

 

3,294

 

 

 

3,211

 

 

 

2,797

 

 

 

2,861

 

Occupancy

 

 

1,161

 

 

 

1,097

 

 

 

1,193

 

 

 

1,032

 

 

 

1,092

 

Equipment

 

 

591

 

 

 

674

 

 

 

822

 

 

 

753

 

 

 

743

 

Professional services

 

 

674

 

 

 

899

 

 

 

788

 

 

 

522

 

 

 

468

 

Regulatory fees

 

 

435

 

 

 

419

 

 

 

413

 

 

 

266

 

 

 

269

 

Amortization of intangibles

 

 

352

 

 

 

368

 

 

 

384

 

 

 

399

 

 

 

415

 

Other noninterest expense

 

 

1,041

 

 

 

1,888

 

 

 

1,902

 

 

 

984

 

 

 

3,371

 

Total noninterest expense

 

 

17,072

 

 

 

19,172

 

 

 

19,054

 

 

 

16,628

 

 

 

17,931

 

Net income before income tax expense

 

 

11,136

 

 

 

9,589

 

 

 

7,998

 

 

 

13,068

 

 

 

10,027

 

Income tax expense

 

 

2,211

 

 

 

1,785

 

 

 

1,552

 

 

 

2,735

 

 

 

1,988

 

Net income

 

$

8,925

 

 

$

7,804

 

 

$

6,446

 

 

$

10,333

 

 

$

8,039

 

Weighted average shares - basic

 

 

20,808,677

 

 

 

21,065,115

 

 

 

21,561,007

 

 

 

21,887,351

 

 

 

21,938,259

 

Weighted average shares - diluted

 

 

20,823,971

 

 

 

21,107,457

 

 

 

21,595,182

 

 

 

21,926,821

 

 

 

21,988,085

 

Net income per share, basic

 

$

0.43

 

 

$

0.37

 

 

$

0.30

 

 

$

0.47

 

 

$

0.37

 

Net income per share, diluted

 

 

0.43

 

 

 

0.37

 

 

 

0.30

 

 

 

0.47

 

 

 

0.37

 

Balance Sheet Data (at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

352,393

 

 

$

170,709

 

 

$

175,557

 

 

$

135,305

 

 

$

199,913

 

Securities available-for-sale

 

 

354,024

 

 

 

373,262

 

 

 

391,547

 

 

 

396,416

 

 

 

401,345

 

Securities held-to-maturity

 

 

—

 

 

 

—

 

 

 

1,232

 

 

 

1,240

 

 

 

1,762

 

Loans held for sale

 

 

36,391

 

 

 

48,895

 

 

 

31,501

 

 

 

44,708

 

 

 

43,122

 

Loans held for investment

 

 

2,292,241

 

 

 

2,358,928

 

 

 

2,407,328

 

 

 

2,312,798

 

 

 

2,290,269

 

Allowance for credit losses on loans

 

 

(24,157

)

 

 

(25,524

)

 

 

(25,189

)

 

 

(23,806

)

 

 

(22,431

)

Total assets

 

 

3,264,540

 

 

 

3,179,016

 

 

 

3,232,751

 

 

 

3,117,169

 

 

 

3,165,706

 

Non-interest-bearing deposits

 

 

432,203

 

 

 

414,828

 

 

 

463,243

 

 

 

512,076

 

 

 

628,846

 

Interest-bearing deposits

 

 

2,364,477

 

 

 

2,295,931

 

 

 

2,286,844

 

 

 

2,167,743

 

 

 

2,004,827

 

Federal Home Loan Bank advances and other borrowings

 

 

79,766

 

 

 

79,733

 

 

 

85,199

 

 

 

44,666

 

 

 

149,633

 

Total liabilities

 

 

2,918,901

 

 

 

2,831,551

 

 

 

2,878,840

 

 

 

2,762,987

 

 

 

2,818,341

 

Shareholders' equity

 

 

345,639

 

 

 

347,465

 

 

 

353,911

 

 

 

354,182

 

 

 

347,365

 

Total shares of common stock outstanding

 

 

20,739,942

 

 

 

20,884,492

 

 

 

21,361,614

 

 

 

21,714,380

 

 

 

21,931,624

 

Book value per share of common stock

 

$

16.67

 

 

$

16.64

 

 

$

16.57

 

 

$

16.31

 

 

$

15.84

 

Tangible book value per share of common stock*

 

 

14.50

 

 

 

14.47

 

 

 

14.43

 

 

 

14.19

 

 

 

13.72

 

Tangible book value per share of common stock less after-tax unrealized available for sale investment losses*

 

 

17.33

 

 

 

16.95

 

 

 

16.56

 

 

 

16.57

 

 

 

16.16

 

Market value per share of common stock

 

 

14.19

 

 

 

12.27

 

 

 

15.15

 

 

 

17.66

 

 

 

18.53

 

Consolidated Capital ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total risk-based capital

 

 

15.36

%

 

 

14.34

%

 

 

13.98

%

 

 

14.51

%

 

 

14.59

%

Tangible common equity to tangible assets*

 

 

9.34

%

 

 

9.64

%

 

 

9.67

%

 

 

10.03

%

 

 

9.65

%

Tangible common equity to tangible assets less after-tax unrealized available for sale investment losses*

 

 

10.96

%

 

 

11.11

%

 

 

10.94

%

 

 

11.52

%

 

 

11.17

%

Common equity tier 1 capital

 

 

13.38

%

 

 

12.40

%

 

 

12.09

%

 

 

12.61

%

 

 

12.70

%

Leverage

 

 

11.08

%

 

 

11.05

%

 

 

11.20

%

 

 

11.40

%

 

 

11.22

%

_____________________

*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 2023 Earnings Release

 

 

 

Five Quarter Comparison

 

 

 

9/30/2023

 

 

6/30/2023

 

 

3/31/2023

 

 

12/31/2022

 

 

9/30/2022

 

Average Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

268,211

 

 

$

157,862

 

 

$

153,464

 

 

$

154,150

 

 

$

154,543

 

Investment securities

 

 

380,725

 

 

 

402,743

 

 

 

410,371

 

 

 

415,414

 

 

 

450,933

 

Loans held for sale

 

 

34,625

 

 

 

37,031

 

 

 

29,578

 

 

 

37,945

 

 

 

94,811

 

Loans held for investment

 

 

2,332,622

 

 

 

2,391,229

 

 

 

2,348,100

 

 

 

2,309,349

 

 

 

2,241,355

 

Assets

 

 

3,230,738

 

 

 

3,196,593

 

 

 

3,150,436

 

 

 

3,124,928

 

 

 

3,146,841

 

Interest bearing deposits

 

 

2,344,705

 

 

 

2,244,499

 

 

 

2,176,542

 

 

 

2,076,743

 

 

 

1,993,172

 

Deposits

 

 

2,760,356

 

 

 

2,678,337

 

 

 

2,691,108

 

 

 

2,662,954

 

 

 

2,659,268

 

Federal Home Loan Bank advances and other borrowings

 

 

79,746

 

 

 

126,397

 

 

 

62,585

 

 

 

74,812

 

 

 

88,584

 

Liabilities

 

 

2,882,943

 

 

 

2,846,824

 

 

 

2,797,442

 

 

 

2,776,902

 

 

 

2,782,703

 

Shareholders' equity

 

 

347,795

 

 

 

349,769

 

 

 

352,994

 

 

 

348,027

 

 

 

364,138

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized return on average assets

 

 

1.10

%

 

 

0.98

%

 

 

0.83

%

 

 

1.31

%

 

 

1.01

%

Annualized return on average equity

 

 

10.18

%

 

 

8.95

%

 

 

7.41

%

 

 

11.78

%

 

 

8.76

%

Net interest margin (1)

 

 

2.71

%

 

 

3.06

%

 

 

3.24

%

 

 

3.44

%

 

 

3.50

%

Annualized noninterest income to average assets

 

 

0.77

%

 

 

0.78

%

 

 

0.81

%

 

 

0.80

%

 

 

0.41

%

Efficiency ratio

 

 

64.07

%

 

 

66.61

%

 

 

64.60

%

 

 

53.23

%

 

 

62.21

%

Loans by Type (at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

485,028

 

 

$

518,136

 

 

$

534,521

 

 

$

496,347

 

 

$

499,048

 

Commercial real estate - owner occupied

 

 

280,273

 

 

 

275,712

 

 

 

276,515

 

 

 

246,109

 

 

 

235,519

 

Commercial real estate - non-owner occupied

 

 

799,084

 

 

 

802,574

 

 

 

840,755

 

 

 

803,611

 

 

 

832,156

 

Construction and development

 

 

205,486

 

 

 

230,859

 

 

 

209,556

 

 

 

229,972

 

 

 

198,869

 

Consumer real estate

 

 

429,028

 

 

 

429,517

 

 

 

425,649

 

 

 

402,615

 

 

 

386,628

 

Consumer

 

 

50,860

 

 

 

52,759

 

 

 

55,125

 

 

 

53,382

 

 

 

52,715

 

Other

 

 

42,482

 

 

 

49,371

 

 

 

65,207

 

 

 

80,762

 

 

 

85,334

 

Asset Quality Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans to total loans

 

 

1.05

%

 

 

1.08

%

 

 

1.05

%

 

 

1.03

%

 

 

0.98

%

Allowance for credit losses on loans to non-performing loans

 

 

376

%

 

 

228

%

 

 

249

%

 

 

222

%

 

 

333

%

Nonaccrual loans

 

$

6,430

 

 

$

11,216

 

 

$

10,123

 

 

$

10,714

 

 

$

6,734

 

Loans - over 90 days past due

 

 

3,874

 

 

 

1,815

 

 

 

1,182

 

 

 

10,222

 

 

 

6,096

 

Total non-performing loans

 

 

6,430

 

 

 

11,216

 

 

 

10,123

 

 

 

10,714

 

 

 

6,734

 

OREO and repossessed assets

 

 

11

 

 

 

11

 

 

 

—

 

 

 

—

 

 

 

165

 

Total non-performing assets

 

 

6,441

 

 

 

11,227

 

 

 

10,123

 

 

 

10,714

 

 

 

6,899

 

Non-performing loans to total loans held for investment

 

 

0.28

%

 

 

0.48

%

 

 

0.42

%

 

 

0.46

%

 

 

0.29

%

Non-performing assets to total assets

 

 

0.20

%

 

 

0.35

%

 

 

0.31

%

 

 

0.34

%

 

 

0.22

%

Non-performing assets to total loans held for investment and OREO

 

 

0.28

%

 

 

0.48

%

 

 

0.42

%

 

 

0.46

%

 

 

0.30

%

Annualized net charge-offs to average loans

 

 

0.06

%

 

 

0.03

%

 

 

0.03

%

 

 

0.03

%

 

 

0.02

%

Net charge-offs

 

$

350

 

 

$

184

 

 

$

165

 

 

$

172

 

 

$

120

 

Interest Rates and Yields:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

 

5.98

%

 

 

5.79

%

 

 

5.49

%

 

 

5.03

%

 

 

4.62

%

Securities (1)

 

 

2.78

%

 

 

2.64

%

 

 

2.52

%

 

 

2.53

%

 

 

2.29

%

Total interest-earning assets (1)

 

 

5.48

%

 

 

5.33

%

 

 

4.99

%

 

 

4.66

%

 

 

4.17

%

Deposits

 

 

2.85

%

 

 

2.26

%

 

 

1.77

%

 

 

1.20

%

 

 

0.62

%

Borrowings and repurchase agreements

 

 

5.24

%

 

 

5.16

%

 

 

5.09

%

 

 

4.22

%

 

 

3.41

%

Total interest-bearing liabilities

 

 

3.42

%

 

 

2.83

%

 

 

2.28

%

 

 

1.63

%

 

 

0.93

%

Other Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Full-time equivalent employees

 

 

366

 

 

 

381

 

 

 

401

 

 

 

397

 

 

 

387

 

_____________________

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 2023 Earnings Release

 

 

For the Three Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

 

Average
Outstanding
Balance

 

 

Interest
Income/
Expense

 

 

Average
Yield/
Rate

 

 

Average
Outstanding
Balance

 

 

Interest
Income/
Expense

 

 

Average
Yield/
Rate

 

Interest-Earning Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

2,332,622

 

 

$

35,157

 

 

 

5.98

%

 

$

2,241,355

 

 

$

26,128

 

 

 

4.62

%

Loans held for sale

 

 

34,625

 

 

 

284

 

 

 

3.25

%

 

 

94,811

 

 

 

1,207

 

 

 

5.05

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable investment securities (2)

 

 

328,666

 

 

 

2,264

 

 

 

2.76

%

 

 

396,358

 

 

 

2,181

 

 

 

2.20

%

Investment securities exempt from
   federal income tax (3)

 

 

52,059

 

 

 

301

 

 

 

2.93

%

 

 

54,575

 

 

 

314

 

 

 

2.92

%

Total securities

 

 

380,725

 

 

 

2,565

 

 

 

2.78

%

 

 

450,933

 

 

 

2,495

 

 

 

2.29

%

Cash balances in other banks

 

 

242,700

 

 

 

3,218

 

 

 

5.26

%

 

 

120,624

 

 

 

617

 

 

 

2.03

%

Funds sold

 

 

2,012

 

 

 

40

 

 

 

7.89

%

 

 

755

 

 

 

7

 

 

 

3.65

%

Total interest-earning assets

 

 

2,992,684

 

 

 

41,264

 

 

 

5.48

%

 

 

2,908,478

 

 

 

30,454

 

 

 

4.17

%

Noninterest-earning assets

 

 

238,054

 

 

 

 

 

 

 

 

 

238,363

 

 

 

 

 

 

 

Total assets

 

$

3,230,738

 

 

 

 

 

 

 

 

$

3,146,841

 

 

 

 

 

 

 

Interest-Bearing Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

 

$

915,604

 

 

 

6,672

 

 

 

2.89

%

 

$

821,545

 

 

 

1,205

 

 

 

0.58

%

Savings and money market deposits

 

 

597,310

 

 

 

4,393

 

 

 

2.92

%

 

 

709,591

 

 

 

1,603

 

 

 

0.90

%

Time deposits

 

 

831,791

 

 

 

8,777

 

 

 

4.19

%

 

 

462,036

 

 

 

1,332

 

 

 

1.14

%

Total interest-bearing deposits

 

 

2,344,705

 

 

 

19,842

 

 

 

3.36

%

 

 

1,993,172

 

 

 

4,140

 

 

 

0.82

%

Borrowings and repurchase agreements

 

 

79,746

 

 

 

1,053

 

 

 

5.24

%

 

 

88,584

 

 

 

761

 

 

 

3.41

%

Total interest-bearing liabilities

 

 

2,424,451

 

 

 

20,895

 

 

 

3.42

%

 

 

2,081,756

 

 

 

4,901

 

 

 

0.93

%

Noninterest-bearing deposits

 

 

415,651

 

 

 

 

 

 

 

 

 

666,096

 

 

 

 

 

 

 

Total funding sources

 

 

2,840,102

 

 

 

 

 

 

 

 

 

2,747,852

 

 

 

 

 

 

 

Noninterest-bearing liabilities

 

 

42,841

 

 

 

 

 

 

 

 

 

34,851

 

 

 

 

 

 

 

Shareholders’ equity

 

 

347,795

 

 

 

 

 

 

 

 

 

364,138

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

3,230,738

 

 

 

 

 

 

 

 

$

3,146,841

 

 

 

 

 

 

 

Net interest spread (4)

 

 

 

 

 

 

 

 

2.06

%

 

 

 

 

 

 

 

 

3.23

%

Net interest income/margin (5)

 

 

 

 

$

20,369

 

 

 

2.71

%

 

 

 

 

$

25,553

 

 

 

3.50

%

_____________________

 

(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 2023 Earnings Release

 

 

For the three months ended

 

 

For the nine months ended

 

 

 

9/30/2023

 

 

6/30/2023

 

 

3/31/2023

 

 

12/31/2022

 

 

9/30/2022

 

 

9/30/2023

 

 

9/30/2022

 

Annualized pretax preprovision return on assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized return on assets (GAAP)

 

 

1.10

%

 

 

0.98

%

 

 

0.83

%

 

 

1.31

%

 

 

1.01

%

 

 

0.97

%

 

 

1.22

%

Effect of income tax and provision expense

 

 

0.08

%

 

 

0.23

%

 

 

0.51

%

 

 

0.55

%

 

 

0.36

%

 

 

0.27

%

 

 

0.34

%

Annualized pretax preprovision return on assets

 

 

1.18

%

 

 

1.21

%

 

 

1.34

%

 

 

1.86

%

 

 

1.37

%

 

 

1.24

%

 

 

1.56

%

Effect of operational (recoveries) losses

 

 

(0.07

)%

 

 

—

 

 

 

—

 

 

 

(0.10

)%

 

 

0.28

%

 

 

(0.02

)%

 

 

0.09

%

Effect of the reversal of executive incentives

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(0.10

)%

 

 

—

 

 

 

(0.03

)%

Adjusted annualized pretax preprovision return on assets

 

 

1.11

%

 

 

1.21

%

 

 

1.34

%

 

 

1.76

%

 

 

1.55

%

 

 

1.22

%

 

 

1.62

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized return on tangible common equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized return on equity (GAAP)

 

 

10.18

%

 

 

8.95

%

 

 

7.41

%

 

 

11.78

%

 

 

8.76

%

 

 

8.85

%

 

 

10.41

%

Effect of goodwill and other intangibles

 

 

1.52

%

 

 

1.34

%

 

 

1.10

%

 

 

1.81

%

 

 

1.29

%

 

 

1.32

%

 

 

1.53

%

Return on tangible common equity

 

 

11.70

%

 

 

10.29

%

 

 

8.51

%

 

 

13.59

%

 

 

10.05

%

 

 

10.17

%

 

 

11.94

%

Effect of operational (recoveries) losses

 

 

(0.65

)%

 

 

—

 

 

 

—

 

 

 

(0.97

)%

 

 

2.74

%

 

 

(0.22

)%

 

 

0.91

%

Effect of the reversal of executive incentives

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(0.96

)%

 

 

—

 

 

 

(0.32

)%

Adjusted return on tangible common equity

 

 

11.05

%

 

 

10.29

%

 

 

8.51

%

 

 

12.62

%

 

 

11.83

%

 

 

9.95

%

 

 

12.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per share of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share of common stock (GAAP)

 

$

16.67

 

 

$

16.64

 

 

$

16.57

 

 

$

16.31

 

 

$

15.84

 

 

$

16.67

 

 

$

15.84

 

Effect of goodwill and other intangibles

 

 

(2.17

)

 

 

(2.17

)

 

 

(2.14

)

 

 

(2.12

)

 

 

(2.12

)

 

 

(2.17

)

 

 

(2.12

)

Tangible book value per share of common stock

 

$

14.50

 

 

$

14.47

 

 

$

14.43

 

 

$

14.19

 

 

$

13.72

 

 

$

14.50

 

 

$

13.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per share of common stock less after-tax unrealized available for sale investment losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per share of common stock

 

$

14.50

 

 

$

14.47

 

 

$

14.43

 

 

$

14.19

 

 

$

13.72

 

 

$

14.50

 

 

$

13.72

 

Effect of after-tax unrealized losses

 

 

2.83

 

 

 

2.48

 

 

 

2.13

 

 

 

2.38

 

 

 

2.44

 

 

 

2.83

 

 

 

2.44

 

Tangible book value per share of
common stock less after-tax unrealized
available for sale investment losses

 

$

17.33

 

 

$

16.95

 

 

$

16.56

 

 

$

16.57

 

 

$

16.16

 

 

$

17.33

 

 

$

16.16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity to Assets (GAAP)

 

 

10.59

%

 

 

10.93

%

 

 

10.95

%

 

 

11.36

%

 

 

10.97

%

 

 

10.59

%

 

 

10.97

%

Effect of goodwill and other intangibles

 

 

(1.25

)%

 

 

(1.29

)%

 

 

(1.28

)%

 

 

(1.33

)%

 

 

(1.32

)%

 

 

(1.25

)%

 

 

(1.32

)%

Tangible common equity to tangible assets

 

 

9.34

%

 

 

9.64

%

 

 

9.67

%

 

 

10.03

%

 

 

9.65

%

 

 

9.34

%

 

 

9.65

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets less after-tax unrealized available for sale investment losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

 

 

9.34

%

 

 

9.64

%

 

 

9.67

%

 

 

10.03

%

 

 

9.65

%

 

 

9.34

%

 

 

9.65

%

Effect of after-tax unrealized losses

 

 

1.62

%

 

 

1.47

%

 

 

1.27

%

 

 

1.49

%

 

 

1.52

%

 

 

1.62

%

 

 

1.52

%

Tangible common equity to tangible assets less after-tax unrealized available for sale investment losses

 

 

10.96

%

 

 

11.11

%

 

 

10.94

%

 

 

11.52

%

 

 

11.17

%

 

 

10.96

%

 

 

11.17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted annualized noninterest expense as a percentage of average assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized noninterest expense as a percentage of average assets

 

 

2.10

%

 

 

2.41

%

 

 

2.45

%

 

 

2.11

%

 

 

2.26

%

 

 

2.32

%

 

 

2.24

%

Effect of operational recoveries (losses)

 

 

0.06

%

 

 

—

 

 

 

—

 

 

 

0.09

%

 

 

(0.28

)%

 

 

0.02

%

 

 

(0.09

)%

Effect of the reversal of executive incentives

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.10

%

 

 

—

 

 

 

0.03

%

Adjusted annualized noninterest expense as a percentage of average assets

 

 

2.16

%

 

 

2.41

%

 

 

2.45

%

 

 

2.20

%

 

 

2.08

%

 

 

2.34

%

 

 

2.18

%

 

 

 

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, 2023, on a consolidated basis, CapStar had total assets of $3.3 billion, total loans of $2.3 billion, total deposits of $2.8 billion, and shareholders’ equity of $345.6 million. Visit www.capstarbank.com for more information.

 

NON-GAAP MEASURES

 

Certain releases may include financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information may include certain operating performance measures, which exclude charges that are not considered part of recurring operations. Such measures may include: “Annualized pre-tax pre-provision return on assets”, “Annualized return on tangible common equity”, “Tangible book value per share of common stock,” “Tangible book value per share of common stock less after-tax unrealized losses”, “Tangible common equity to tangible assets”, “Tangible common equity to tangible assets less after-tax unrealized available for sale investment losses”, “Adjusted annualized noninterest expense as a percentage of average assets”, or other measures.

 

Management may include 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.

 

FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements, as defined by federal securities laws, including statements about CapStar Financial Holdings, Inc. (“CapStar”) and its financial outlook and business environment. All statements, other than statements of historical fact, included in this release and any oral statements made regarding the subject of this release, including in the conference call referenced herein, that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are “forward-looking statements“ within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1955. The words “expect“, “anticipate”, “intend”, “may”, “should”, “plan”, “believe”, “seek“, “estimate“ and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (I) deterioration in the financial condition of borrowers of the Company and its subsidiaries, resulting in significant increases in loan losses and provisions for those losses; (II) the ability to grow and retain low-cost, core deposits and retain large, uninsured deposits, including during times when the Company is seeking to lower rates it pays on deposits; (III) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on the Company’s results, including as a result of compression to net interest margin; (IV) fluctuations or differences in interest rates on loans or deposits from those that the Company is modeling or anticipating, including as a result of the Company’s inability to better match deposit rates with the changes in the short term rate environment, or that affect the yield curve; (V) difficulties and delays in integrating required businesses or fully realizing cost savings or other benefits from acquisitions; (VI) the Company‘s ability to profitably grow its business and successfully execute on its business plans; (VII) any matter that would cause the Company to conclude that there was impairment of any asset, including goodwill or other intangible assets; (VIII) the vulnerability of the Company’s network and online banking portals, and the systems of customers or parties with whom the Company contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (IX) the availability of and access to capital; and (X) general competitive, economic, political and market conditions. Additional factors which could affect the forward-looking statements can be found in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, filed with the SEC. The Company disclaims any obligation to update or revise any forward-looking statements contained in this press release (we speak only as of the date hereof ), whether as a result of new information, future events, or otherwise.