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

Exhibit 99.1

EARNINGS RELEASE

 

CONTACT

 

Rob Anderson

Chief Financial Officer and Chief Administrative Officer

(615) 732-6470

 

 

 

CapStar Reports Fully Diluted EPS of $0.31 and Fully Diluted Operating EPS of $0.38 for 2Q2019

 

NASHVILLE, TN, July 25, 2019/GlobeNewswire/ -- CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) reported net income of $5.76 million, or $0.31 per share on a fully diluted basis, for the three months ended June 30, 2019, compared to net income of $3.51 million, or $0.27 per share on a fully diluted basis, for the three months ended June 30, 2018.  Operating(1) net income was $7.02 million, or $0.38 per share on a fully diluted basis, for the three months ended June 30, 2019, compared to $3.76 million, or $0.29 per share on a fully diluted basis, for the three months ended June 30, 2018.  

 

“Our strong second quarter results show that CapStar’s talented group of bankers continues to deliver a highly-personalized banking experience, providing creative solutions for our clients and creating long-term sustainable value for our shareholders,” said Claire W. Tucker, CapStar’s chief executive officer.  

 

“Since joining the company in May, I have met with associates and customers across the organization and I am excited about the opportunities in front of us,” added Timothy K. Schools, CapStar’s recently appointed president. “CapStar is well positioned to expand within our dynamic markets and our strong second quarter results demonstrate the importance of our diverse revenue streams,” continued Mr. Schools.

 

Soundness

 

•

Non-performing assets as a percentage of total assets were 0.12% at June 30, 2019 compared to 0.39% at June 30, 2018.

 

•

Annualized net charge-offs to average loans were 0.02% for the three months ended June 30, 2019 compared to 0.01% for the same period in 2018.

 

•

The total risk based capital ratio was 13.29% at June 30, 2019 compared to 12.53% at June 30, 2018.

 

Profitability

Operating measures exclude merger-related expenses unrelated to CapStar’s normal operations. CapStar believes these measures are useful to investors as they exclude certain non-recurring costs resulting from acquisition activity and allow investors to more clearly see the financial results of CapStar’s operations.

 

 

•

Operating annualized return on average assets for the three months ended June 30, 2019 was 1.40% compared to 1.08% for the same period in 2018.

 

•

Operating annualized return on average tangible equity for the three months ended June 30, 2019 was 13.05% compared to 10.38% for the same period in 2018.

 

•

The operating efficiency ratio for the three months ended June 30, 2019 was 61.39% compared to 67.38% for the same period in 2018.

 

•

Net interest margin for the three months ended June 30, 2019 was 3.68% compared to 3.46% for the same period in 2018.

(1) For a discussion and reconciliation of the Non-GAAP operating measures that exclude merger-related costs unrelated to CapStar’s normal operations, see the section titled “Non-GAAP Disclaimer” and the Non-GAAP financial measures section of the financial statements.

 

 

“Despite a challenging macro-economic environment with a flat to inverted yield curve, we grew our operating earnings per share by 31.0% from the same period last year and our operating return on average tangible equity grew to 13.05%,” said Rob Anderson, chief financial officer and chief administrative officer of CapStar. “A tremendous quarter by our Mortgage Banking and TriNet teams boosted profitability measures and helped mitigate the decline in our margin,” continued Mr. Anderson.  

 

Growth

 

•

Operating EPS on a fully diluted basis increased 31.0% to $0.38 for the quarter ended June 30, 2019, compared to $0.29 on a fully diluted basis for the same period in 2018.

 

•

Average gross loans for the quarter ended June 30, 2019 increased 41.0% to $1.47 billion, compared to $1.04 billion for the same period in 2018.

 

o

Excluding Day 1 loans from Athens, organic average loan growth was 7.9% year-over-year.

 

•

Average deposits for the quarter ended June 30, 2019 increased 47.4% to $1.68 billion, compared to $1.14 billion for the same period in 2018.

 

o

Excluding Day 1 deposits from Athens, organic average deposit growth was 11.9% year-over-year.

 

“Excluding Day 1 loans from Athens, organic average loan growth was 7.9% year-over-year and “in market” loan growth was 10.3% year-over-year, while our “out of market” loans declined $49 million from $124 million in the second quarter of 2018 to $75 million at June 30, 2019,” said Mr. Anderson. “In addition, our organic deposit growth was 11.9% year-over-year, excluding the Day 1 deposits acquired from Athens.”

 

Dividend

 

On July 25, 2019, the board of directors of CapStar approved a quarterly dividend of $0.05 per share that will be paid on or about August 26, 2019 to all shareholders of record of CapStar’s capital stock as of the close of business on August 12, 2019.

 

Conference Call and Webcast Information

 

CapStar will host a conference call and webcast at 9:00 a.m. Central Time on Friday July 26, 2019.  During the call, management will review the second quarter results and operational highlights.  Interested parties may listen to the call by dialing (844) 412-1002.  The conference ID number is 7628709.  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 June 30, 2019, on a consolidated basis, CapStar had total assets of $2.02 billion, gross loans of $1.44 billion, total deposits of $1.72 billion, and shareholders’ equity of $262.66 million.  Visit www.capstarbank.com for more information.

 

 

Forward-Looking Statements

 

Certain statements in this earnings release are forward-looking statements that reflect CapStar’s current views with respect to, among other things, CapStar’s assets, business, cash flows, condition (financial or otherwise), credit quality, financial performance, liquidity, short and long-term performance goals, prospects, results of operations, strategic initiatives and the timing, benefits, costs and synergies of recently completed and future acquisition, disposition and other growth

 

opportunities, including, without limitation, those relating to the acceptance by customers of Athens of CapStar’s products and services, the ability of CapStar to meet expectations regarding the benefits, costs, synergies, and financial and operational impact of the Athens merger, the possibility that any of the anticipated benefits, costs, synergies and financial and operational improvements of the Athens merger will not be realized or will not be realized as expected and the opportunities to enhance market share in certain markets and market acceptance of CapStar are generally in new markets. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “aspire,” “achieve,” “estimate,” “intend,” “plan,” “project,” “projection,” “forecast,” “roadmap,” “goal,” “guidance,” “target,” “would,” and “outlook,” or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about CapStar’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond CapStar’s control. The inclusion of these forward-looking statements should not be regarded as a representation by CapStar or any other person that such expectations, estimates and projections will be achieved. Accordingly, CapStar cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although CapStar believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be important factors that could cause CapStar’s actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, any factors identified in this earnings release as well as those factors that are detailed from time to time in CapStar’s periodic and current reports filed with the Securities and Exchange Commission, including those factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 under the headings “Item 1A. Risk Factors” and “Cautionary Note Regarding Forward Looking Statements” and in the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.  If one or more events related to these or other risks or uncertainties materialize, or if CapStar’s underlying assumptions prove to be incorrect, actual results may differ materially from its forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this earnings release, and CapStar does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for CapStar to predict their occurrence or how they will affect CapStar.

 

Non-GAAP Disclaimer

 

This earnings release includes the following financial measures that were prepared other than in accordance with generally accepted accounting principles in the United States (“non-GAAP financial measure”): operating net income, operating diluted net income per share, operating return on average assets, operating return on average tangible equity, tangible book value per share and operating efficiency ratio. These non-GAAP financial measures (i) provide useful information to management and investors that is supplementary to CapStar’s financial condition, results of operations and cash flows computed in accordance with GAAP, (ii) enable a more complete understanding of factors and trends affecting CapStar’s business, and (iii) allow investors to evaluate CapStar’s performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators; however, CapStar acknowledges that these non-GAAP financial measures have a number of limitations.  As such, you should not view these non-GAAP financial measures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use.  See below for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure.  

 

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

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

Second Quarter 2019 Earnings Release

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

20,999

 

 

$

13,796

 

 

$

41,591

 

 

$

26,030

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

1,165

 

 

 

943

 

 

 

2,512

 

 

 

1,823

 

Tax-exempt

 

 

363

 

 

 

257

 

 

 

739

 

 

 

538

 

Federal funds sold

 

 

6

 

 

 

19

 

 

 

25

 

 

 

39

 

Restricted equity securities

 

 

214

 

 

 

128

 

 

 

401

 

 

 

257

 

Interest-bearing deposits in financial institutions

 

 

411

 

 

 

211

 

 

 

857

 

 

 

411

 

Total interest income

 

 

23,158

 

 

 

15,354

 

 

 

46,125

 

 

 

29,098

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

1,827

 

 

 

892

 

 

 

3,420

 

 

 

1,646

 

Savings and money market accounts

 

 

1,782

 

 

 

1,413

 

 

 

3,500

 

 

 

2,418

 

Time deposits

 

 

2,217

 

 

 

834

 

 

 

4,030

 

 

 

1,483

 

Federal funds purchased

 

 

—

 

 

 

1

 

 

 

4

 

 

 

1

 

Securities sold under agreements to repurchase

 

 

—

 

 

 

—

 

 

 

5

 

 

 

—

 

Federal Home Loan Bank advances

 

 

324

 

 

 

627

 

 

 

1,156

 

 

 

1,117

 

Total interest expense

 

 

6,150

 

 

 

3,767

 

 

 

12,115

 

 

 

6,665

 

Net interest income

 

 

17,008

 

 

 

11,587

 

 

 

34,010

 

 

 

22,433

 

Provision for loan losses

 

 

—

 

 

 

169

 

 

 

886

 

 

 

846

 

Net interest income after provision for loan losses

 

 

17,008

 

 

 

11,418

 

 

 

33,124

 

 

 

21,587

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury management and other deposit service charges

 

 

813

 

 

 

427

 

 

 

1,611

 

 

 

829

 

Net gain (loss) on sale of securities

 

 

(121

)

 

 

3

 

 

 

(108

)

 

 

3

 

Tri-Net fees

 

 

1,024

 

 

 

325

 

 

 

1,664

 

 

 

853

 

Mortgage banking income

 

 

3,087

 

 

 

1,383

 

 

 

4,472

 

 

 

2,695

 

Other noninterest income

 

 

2,229

 

 

 

627

 

 

 

4,128

 

 

 

1,474

 

Total noninterest income

 

 

7,032

 

 

 

2,765

 

 

 

11,767

 

 

 

5,854

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

8,563

 

 

 

6,340

 

 

 

16,995

 

 

 

12,598

 

Data processing and software

 

 

1,862

 

 

 

810

 

 

 

3,336

 

 

 

1,608

 

Professional fees

 

 

501

 

 

 

344

 

 

 

1,043

 

 

 

819

 

Occupancy

 

 

809

 

 

 

535

 

 

 

1,692

 

 

 

1,056

 

Equipment

 

 

1,026

 

 

 

602

 

 

 

1,878

 

 

 

1,141

 

Regulatory fees

 

 

272

 

 

 

233

 

 

 

546

 

 

 

436

 

Merger related expenses

 

 

1,711

 

 

 

335

 

 

 

2,305

 

 

 

335

 

Amortization of intangibles

 

 

419

 

 

 

10

 

 

 

850

 

 

 

20

 

Other operating

 

 

1,307

 

 

 

796

 

 

 

2,551

 

 

 

1,573

 

Total noninterest expense

 

 

16,470

 

 

 

10,005

 

 

 

31,196

 

 

 

19,586

 

Income before income taxes

 

 

7,570

 

 

 

4,178

 

 

 

13,695

 

 

 

7,855

 

Income tax expense

 

 

1,814

 

 

 

665

 

 

 

3,160

 

 

 

1,148

 

Net income

 

$

5,756

 

 

$

3,513

 

 

$

10,535

 

 

$

6,707

 

Per share information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share of common stock

 

$

0.33

 

 

$

0.30

 

 

$

0.59

 

 

$

0.57

 

Diluted net income per share of common stock

 

$

0.31

 

 

$

0.27

 

 

$

0.56

 

 

$

0.52

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

17,663,992

 

 

 

11,845,822

 

 

 

17,723,286

 

 

 

11,755,535

 

Diluted

 

 

18,650,706

 

 

 

13,067,223

 

 

 

18,740,322

 

 

 

13,021,744

 

 

This information is preliminary and based on company data available at the time of the presentation.

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

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

Second Quarter 2019 Earnings Release

 

Five Quarter Comparison

 

 

 

6/30/19

 

 

3/31/19

 

 

12/31/18

 

 

9/30/18

 

 

6/30/18

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

17,008

 

 

$

17,002

 

 

$

17,716

 

 

$

11,543

 

 

$

11,587

 

Provision for loan losses

 

 

—

 

 

 

886

 

 

 

1,514

 

 

 

481

 

 

 

169

 

Net interest income after provision for loan losses

 

 

17,008

 

 

 

16,116

 

 

 

16,202

 

 

 

11,062

 

 

 

11,418

 

Treasury management and other deposit service charges

 

 

813

 

 

 

798

 

 

 

793

 

 

 

528

 

 

 

427

 

Net gain (loss) on sale of securities

 

 

(121

)

 

 

12

 

 

 

1

 

 

 

(1

)

 

 

3

 

Tri-Net fees

 

 

1,024

 

 

 

641

 

 

 

276

 

 

 

374

 

 

 

325

 

Mortgage banking income

 

 

3,087

 

 

 

1,385

 

 

 

1,324

 

 

 

1,634

 

 

 

1,383

 

Other noninterest income

 

 

2,229

 

 

 

1,899

 

 

 

3,993

 

 

 

683

 

 

 

627

 

Total noninterest income

 

 

7,032

 

 

 

4,735

 

 

 

6,387

 

 

 

3,218

 

 

 

2,765

 

Salaries and employee benefits

 

 

8,563

 

 

 

8,432

 

 

 

9,475

 

 

 

6,514

 

 

 

6,340

 

Data processing and software

 

 

1,862

 

 

 

1,474

 

 

 

1,424

 

 

 

803

 

 

 

810

 

Professional fees

 

 

501

 

 

 

543

 

 

 

534

 

 

 

255

 

 

 

344

 

Occupancy

 

 

809

 

 

 

883

 

 

 

736

 

 

 

544

 

 

 

535

 

Equipment

 

 

1,026

 

 

 

852

 

 

 

810

 

 

 

520

 

 

 

602

 

Regulatory fees

 

 

272

 

 

 

274

 

 

 

364

 

 

 

228

 

 

 

233

 

Merger related expenses

 

 

1,711

 

 

 

594

 

 

 

8,929

 

 

 

540

 

 

 

335

 

Amortization of intangibles

 

 

419

 

 

 

430

 

 

 

442

 

 

 

3

 

 

 

10

 

Other operating

 

 

1,307

 

 

 

1,243

 

 

 

1,118

 

 

 

663

 

 

 

796

 

Total noninterest expense

 

 

16,470

 

 

 

14,725

 

 

 

23,832

 

 

 

10,070

 

 

 

10,005

 

Net income (loss) before income tax expense

 

 

7,570

 

 

 

6,126

 

 

 

(1,243

)

 

 

4,210

 

 

 

4,178

 

Income tax (benefit) expense

 

 

1,814

 

 

 

1,346

 

 

 

(535

)

 

 

554

 

 

 

665

 

Net income (loss)

 

$

5,756

 

 

$

4,780

 

 

$

(708

)

 

$

3,656

 

 

$

3,513

 

Weighted average shares - basic

 

 

17,663,992

 

 

 

17,783,239

 

 

 

17,509,525

 

 

 

12,040,229

 

 

 

11,845,822

 

Weighted average shares - diluted

 

 

18,650,706

 

 

 

18,830,933

 

 

 

18,716,562

 

 

 

13,113,775

 

 

 

13,067,223

 

Net income (loss) per share, basic

 

$

0.33

 

 

$

0.27

 

 

$

(0.04

)

 

$

0.30

 

 

$

0.30

 

Net income (loss) per share, diluted

 

 

0.31

 

 

 

0.25

 

 

 

(0.04

)

 

 

0.28

 

 

 

0.27

 

Balance Sheet Data (at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

156,085

 

 

$

120,321

 

 

$

105,443

 

 

$

52,589

 

 

$

58,222

 

Securities available-for-sale

 

 

194,957

 

 

 

233,691

 

 

 

243,808

 

 

 

187,469

 

 

 

183,364

 

Securities held-to-maturity

 

 

3,721

 

 

 

3,727

 

 

 

3,734

 

 

 

3,740

 

 

 

3,746

 

Loans held for sale

 

 

89,629

 

 

 

72,870

 

 

 

57,618

 

 

 

50,499

 

 

 

65,320

 

Total loans

 

 

1,440,617

 

 

 

1,467,786

 

 

 

1,429,794

 

 

 

1,073,870

 

 

 

1,046,525

 

Allowance for loan losses

 

 

(12,903

)

 

 

(12,959

)

 

 

(12,113

)

 

 

(15,218

)

 

 

(14,705

)

Total assets

 

 

2,018,421

 

 

 

2,035,811

 

 

 

1,963,883

 

 

 

1,416,907

 

 

 

1,401,181

 

Non-interest-bearing deposits

 

 

326,550

 

 

 

312,597

 

 

 

289,552

 

 

 

239,792

 

 

 

223,579

 

Interest-bearing deposits

 

 

1,396,220

 

 

 

1,366,205

 

 

 

1,280,456

 

 

 

886,611

 

 

 

921,435

 

Federal Home Loan Bank advances

 

 

10,000

 

 

 

75,000

 

 

 

125,000

 

 

 

125,000

 

 

 

95,000

 

Total liabilities

 

 

1,755,757

 

 

 

1,776,060

 

 

 

1,709,504

 

 

 

1,259,397

 

 

 

1,248,035

 

Shareholders' equity

 

$

262,664

 

 

$

259,751

 

 

$

254,379

 

 

$

157,510

 

 

$

153,146

 

Total shares of common stock outstanding

 

 

17,561,476

 

 

 

17,765,124

 

 

 

17,724,721

 

 

 

12,125,122

 

 

 

11,931,131

 

Total shares of preferred stock outstanding

 

 

878,048

 

 

 

878,048

 

 

 

878,048

 

 

 

878,048

 

 

 

878,048

 

Book value per share of common stock

 

$

14.44

 

 

$

14.11

 

 

$

13.84

 

 

$

12.25

 

 

$

12.08

 

Tangible book value per share of common stock*

 

 

11.87

 

 

 

11.55

 

 

 

11.25

 

 

 

11.74

 

 

 

11.56

 

Market value per share of common stock

 

$

15.15

 

 

$

14.44

 

 

$

14.73

 

 

$

16.72

 

 

$

18.53

 

Capital ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total risk based capital

 

 

13.29

%

 

 

12.64

%

 

 

12.84

%

 

 

12.62

%

 

 

12.53

%

Tier 1 risk based capital

 

 

12.53

%

 

 

11.90

%

 

 

12.13

%

 

 

11.49

%

 

 

11.41

%

Common equity tier 1 capital

 

 

12.01

%

 

 

11.40

%

 

 

11.61

%

 

 

10.83

%

 

 

10.73

%

Leverage

 

 

11.01

%

 

 

10.97

%

 

 

11.06

%

 

 

11.02

%

 

 

10.87

%

_____________________

*This metric is a non-GAAP financial measure.  See below for discussion and reconciliation to the most directly comparable GAAP financial measure.

 

This information is preliminary and based on company data available at the time of the presentation.

 

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

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

Second Quarter 2019 Earnings Release

 

 

Five Quarter Comparison

 

 

 

6/30/19

 

 

3/31/19

 

 

12/31/18

 

 

9/30/18

 

 

6/30/18

 

Average Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

93,523

 

 

$

83,689

 

 

$

83,560

 

 

$

62,787

 

 

$

63,064

 

Investment securities

 

 

228,283

 

 

 

251,631

 

 

 

256,595

 

 

 

196,031

 

 

 

197,933

 

Loans held for sale

 

 

91,585

 

 

 

66,880

 

 

 

52,131

 

 

 

54,701

 

 

 

58,297

 

Loans

 

 

1,469,210

 

 

 

1,461,696

 

 

 

1,439,652

 

 

 

1,070,060

 

 

 

1,041,835

 

Assets

 

 

2,004,207

 

 

 

1,988,478

 

 

 

1,940,991

 

 

 

1,421,873

 

 

 

1,396,359

 

Interest bearing deposits

 

 

1,364,211

 

 

 

1,299,205

 

 

 

1,271,602

 

 

 

913,534

 

 

 

901,076

 

Deposits

 

 

1,678,240

 

 

 

1,588,317

 

 

 

1,579,250

 

 

 

1,147,274

 

 

 

1,138,400

 

Federal Home Loan Bank advances

 

 

42,088

 

 

 

117,278

 

 

 

102,304

 

 

 

109,728

 

 

 

99,121

 

Liabilities

 

 

1,743,010

 

 

 

1,731,373

 

 

 

1,695,181

 

 

 

1,265,610

 

 

 

1,244,824

 

Shareholders' equity

 

 

261,197

 

 

 

257,105

 

 

 

245,811

 

 

 

156,264

 

 

 

151,535

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized return on average assets

 

 

1.15

%

 

 

0.97

%

 

 

(0.14

)%

 

 

1.02

%

 

 

1.01

%

Annualized return on average equity

 

 

8.84

%

 

 

7.54

%

 

 

(1.14

)%

 

 

9.28

%

 

 

9.30

%

Net interest margin (1)

 

 

3.68

%

 

 

3.75

%

 

 

3.89

%

 

 

3.35

%

 

 

3.46

%

Annualized Noninterest income to average assets

 

 

1.41

%

 

 

0.97

%

 

 

1.31

%

 

 

0.90

%

 

 

0.79

%

Efficiency ratio

 

 

68.51

%

 

 

67.74

%

 

 

98.88

%

 

 

68.22

%

 

 

69.71

%

Loans by Type (at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

404,745

 

 

$

419,941

 

 

$

404,600

 

 

$

398,626

 

 

$

386,065

 

Commercial real estate - owner occupied

 

 

173,316

 

 

 

170,558

 

 

 

141,931

 

 

 

117,904

 

 

 

121,475

 

Commercial real estate - non-owner occupied

 

 

421,496

 

 

 

403,443

 

 

 

408,515

 

 

 

286,848

 

 

 

286,769

 

Construction and development

 

 

123,901

 

 

 

162,237

 

 

 

174,670

 

 

 

129,799

 

 

 

96,580

 

Consumer real estate

 

 

255,043

 

 

 

248,943

 

 

 

253,562

 

 

 

112,957

 

 

 

109,915

 

Consumer

 

 

26,704

 

 

 

26,241

 

 

 

25,615

 

 

 

8,274

 

 

 

9,671

 

Other

 

 

35,412

 

 

 

36,423

 

 

 

20,901

 

 

 

19,462

 

 

 

36,050

 

Asset Quality Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to total loans

 

 

0.90

%

 

 

0.88

%

 

 

0.85

%

 

 

1.42

%

 

 

1.41

%

Allowance for loan losses to non-performing loans

 

 

894

%

 

 

757

%

 

 

583

%

 

 

271

%

 

 

271

%

Nonaccrual loans

 

$

1,443

 

 

$

1,712

 

 

$

2,078

 

 

$

5,610

 

 

$

5,419

 

Troubled debt restructurings

 

 

1,238

 

 

 

1,255

 

 

 

1,391

 

 

 

1,146

 

 

 

1,173

 

Loans - over 89 days past due and accruing

 

 

302

 

 

 

-

 

 

 

214

 

 

 

215

 

 

 

216

 

Total non-performing loans

 

 

1,443

 

 

 

1,712

 

 

 

2,078

 

 

 

5,610

 

 

 

5,419

 

OREO and repossessed assets

 

 

914

 

 

 

1,038

 

 

 

988

 

 

 

-

 

 

 

-

 

Total non-performing assets

 

 

2,357

 

 

 

2,750

 

 

 

3,066

 

 

 

5,610

 

 

 

5,419

 

Non-performing loans to total loans

 

 

0.10

%

 

 

0.12

%

 

 

0.15

%

 

 

0.52

%

 

 

0.52

%

Non-performing assets to total assets

 

 

0.12

%

 

 

0.14

%

 

 

0.16

%

 

 

0.40

%

 

 

0.39

%

Non-performing assets to total loans and OREO

 

 

0.16

%

 

 

0.19

%

 

 

0.21

%

 

 

0.52

%

 

 

0.52

%

Annualized net charge-offs (recoveries) to average loans

 

 

0.02

%

 

 

0.01

%

 

 

1.27

%

 

 

(0.01

)%

 

 

0.01

%

Net charge-offs (recoveries)

 

$

56

 

 

$

40

 

 

$

4,620

 

 

$

(32

)

 

$

27

 

Interest Rates and Yields:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

 

5.44

%

 

 

5.49

%

 

 

5.49

%

 

 

5.00

%

 

 

5.04

%

Securities (1)

 

 

3.22

%

 

 

3.20

%

 

 

3.30

%

 

 

2.85

%

 

 

2.82

%

Total interest-earning assets (1)

 

 

5.00

%

 

 

5.06

%

 

 

5.02

%

 

 

4.58

%

 

 

4.58

%

Deposits

 

 

1.39

%

 

 

1.31

%

 

 

1.12

%

 

 

1.22

%

 

 

1.11

%

Borrowings and repurchase agreements

 

 

3.09

%

 

 

2.85

%

 

 

2.76

%

 

 

2.53

%

 

 

2.53

%

Total interest-bearing liabilities

 

 

1.75

%

 

 

1.71

%

 

 

1.50

%

 

 

1.64

%

 

 

1.51

%

Other Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Full-time equivalent employees

 

 

290

 

 

 

289

 

 

 

286

 

 

 

185

 

 

 

183

 

_____________________

 

This information is preliminary and based on company data available at the time of the presentation.

 

(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)

Second Quarter 2019 Earnings Release

 

For the Three Months Ended June 30,

 

 

 

2019

 

 

2018

 

 

 

Average

Outstanding

Balance

 

 

Interest

Income/

Expense

 

 

Average

Yield/

Rate

 

 

Average

Outstanding

Balance

 

 

Interest

Income/

Expense

 

 

Average

Yield/

Rate

 

Interest-Earning Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

 

$

1,469,210

 

 

$

19,931

 

 

 

5.44

%

 

$

1,041,835

 

 

$

13,090

 

 

 

5.04

%

Loans held for sale

 

 

91,585

 

 

 

1,068

 

 

 

4.68

%

 

 

58,297

 

 

 

706

 

 

 

4.86

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable investment securities (2)

 

 

175,742

 

 

 

1,379

 

 

 

3.14

%

 

 

155,552

 

 

 

1,071

 

 

 

2.76

%

Investment securities exempt from

   federal income tax (3)

 

 

52,541

 

 

 

363

 

 

 

3.50

%

 

 

42,381

 

 

 

257

 

 

 

3.07

%

Total securities

 

 

228,283

 

 

 

1,742

 

 

 

3.22

%

 

 

197,933

 

 

 

1,328

 

 

 

2.82

%

Cash balances in other banks

 

 

75,485

 

 

 

411

 

 

 

2.18

%

 

 

50,335

 

 

 

211

 

 

 

1.68

%

Funds sold

 

 

767

 

 

 

6

 

 

 

2.96

%

 

 

2,898

 

 

 

19

 

 

 

2.57

%

Total interest-earning assets

 

 

1,865,330

 

 

 

23,158

 

 

 

5.00

%

 

 

1,351,298

 

 

 

15,354

 

 

 

4.58

%

Noninterest-earning assets

 

 

138,877

 

 

 

 

 

 

 

 

 

 

 

45,061

 

 

 

 

 

 

 

 

 

Total assets

 

$

2,004,207

 

 

 

 

 

 

 

 

 

 

$

1,396,359

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

 

$

467,326

 

 

 

1,827

 

 

 

1.57

%

 

$

279,705

 

 

 

892

 

 

 

1.28

%

Savings and money market deposits

 

 

479,012

 

 

 

1,782

 

 

 

1.49

%

 

 

428,330

 

 

 

1,413

 

 

 

1.32

%

Time deposits

 

 

417,873

 

 

 

2,217

 

 

 

2.13

%

 

 

193,041

 

 

 

834

 

 

 

1.73

%

Total interest-bearing deposits

 

 

1,364,211

 

 

 

5,826

 

 

 

1.71

%

 

 

901,076

 

 

 

3,139

 

 

 

1.40

%

Borrowings and repurchase agreements

 

 

42,117

 

 

 

324

 

 

 

3.09

%

 

 

99,286

 

 

 

628

 

 

 

2.53

%

Total interest-bearing liabilities

 

 

1,406,328

 

 

 

6,150

 

 

 

1.75

%

 

 

1,000,362

 

 

 

3,767

 

 

 

1.51

%

Noninterest-bearing deposits

 

 

314,029

 

 

 

 

 

 

 

 

 

 

 

237,324

 

 

 

 

 

 

 

 

 

Total funding sources

 

 

1,720,357

 

 

 

 

 

 

 

 

 

 

 

1,237,686

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities

 

 

22,653

 

 

 

 

 

 

 

 

 

 

 

7,138

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

261,197

 

 

 

 

 

 

 

 

 

 

 

151,535

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,004,207

 

 

 

 

 

 

 

 

 

 

$

1,396,359

 

 

 

 

 

 

 

 

 

Net interest spread (4)

 

 

 

 

 

 

 

 

 

 

3.25

%

 

 

 

 

 

 

 

 

 

 

3.07

%

Net interest income/margin (5)

 

 

 

 

 

$

17,008

 

 

 

3.68

%

 

 

 

 

 

$

11,587

 

 

 

3.46

%


 

(1)

Average loan balances include nonaccrual loans.  Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.

(2)

Taxable investment securities include restricted equity securities.

(3)

Yields on tax exempt securities, total securities, and total interest-earning assets are shown on a tax equivalent basis.

(4)

Net interest spread is the average yield on total average interest-earning assets minus the average rate on total average interest-bearing liabilities.

(5)

Net interest margin is annualized net interest income calculated on a tax equivalent basis divided by total average interest-earning assets for the period.

This information is preliminary and based on company data available at the time of the presentation.

 

 

 

 

 

 

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

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

Second Quarter 2019 Earnings Release

 

Three Months Ended

 

 

 

June 30, 2019

 

 

March 31, 2019

 

 

December 31, 2018

 

 

September 30, 2018

 

 

June 30, 2018

 

Operating net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

5,756

 

 

$

4,780

 

 

$

(708

)

 

$

3,656

 

 

$

3,513

 

Add:  merger related expenses

 

 

1,711

 

 

 

594

 

 

 

8,929

 

 

 

540

 

 

 

335

 

Less: income tax impact of merger related expenses

 

 

(447

)

 

 

(155

)

 

 

(1,985

)

 

 

(141

)

 

 

(88

)

Operating net income

 

$

7,020

 

 

$

5,219

 

 

$

6,236

 

 

$

4,055

 

 

$

3,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating diluted net income per

   share of common stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating net income

 

$

7,020

 

 

$

5,219

 

 

$

6,236

 

 

$

4,055

 

 

$

3,760

 

Weighted average shares - diluted

 

 

18,650,706

 

 

 

18,830,933

 

 

 

18,716,562

 

 

 

13,113,775

 

 

 

13,067,223

 

Operating diluted net income

   per share of common stock

 

$

0.38

 

 

$

0.28

 

 

$

0.33

 

 

$

0.31

 

 

$

0.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating annualized return on average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating net income

 

$

7,020

 

 

$

5,219

 

 

$

6,236

 

 

$

4,055

 

 

$

3,760

 

Average assets

 

$

2,004,207

 

 

$

1,988,478

 

 

$

1,940,991

 

 

$

1,421,873

 

 

$

1,396,359

 

Operating annualized return on

   average assets

 

 

1.40

%

 

 

1.06

%

 

 

1.27

%

 

 

1.13

%

 

 

1.08

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating annualized return on

   average tangible equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total shareholders' equity

 

$

261,197

 

 

$

257,105

 

 

$

245,811

 

 

$

156,264

 

 

$

151,535

 

Less: average intangible assets

 

 

(45,456

)

 

 

(45,890

)

 

 

(45,687

)

 

 

(6,220

)

 

 

(6,228

)

Average tangible equity

 

 

215,741

 

 

 

211,215

 

 

 

200,124

 

 

 

150,044

 

 

 

145,307

 

Operating net income

 

$

7,020

 

 

$

5,219

 

 

$

6,236

 

 

$

4,055

 

 

$

3,760

 

Operating annualized return on

   average tangible equity

 

 

13.05

%

 

 

10.02

%

 

 

12.36

%

 

 

10.72

%

 

 

10.38

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating efficiency ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

 

$

16,470

 

 

$

14,725

 

 

$

23,832

 

 

$

10,070

 

 

$

10,005

 

Less:  merger related expenses

 

 

(1,711

)

 

 

(594

)

 

 

(8,929

)

 

 

(540

)

 

 

(335

)

Total operating noninterest expense

 

 

14,759

 

 

 

14,131

 

 

 

14,903

 

 

 

9,530

 

 

 

9,670

 

Net interest income

 

 

17,008

 

 

 

17,002

 

 

 

17,716

 

 

 

11,543

 

 

 

11,587

 

Total noninterest income

 

 

7,032

 

 

 

4,735

 

 

 

6,387

 

 

 

3,218

 

 

 

2,765

 

Total revenues

 

$

24,040

 

 

$

21,737

 

 

$

24,103

 

 

$

14,761

 

 

$

14,352

 

Operating efficiency ratio:

 

 

61.39

%

 

 

65.01

%

 

 

61.83

%

 

 

64.56

%

 

 

67.38

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

 

March 31, 2019

 

 

December 31, 2018

 

 

September 30, 2018

 

 

June 30, 2018

 

Tangible Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

$

262,664

 

 

$

259,751

 

 

$

254,379

 

 

$

157,510

 

 

$

153,146

 

Less: intangible assets

 

 

(45,199

)

 

 

(45,618

)

 

 

(46,048

)

 

 

(6,219

)

 

 

(6,222

)

Tangible equity

 

$

217,465

 

 

$

214,133

 

 

$

208,331

 

 

$

151,291

 

 

$

146,924

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Common Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible equity

 

$

217,465

 

 

$

214,133

 

 

$

208,331

 

 

$

151,291

 

 

$

146,924

 

Less: preferred equity

 

 

(9,000

)

 

 

(9,000

)

 

 

(9,000

)

 

 

(9,000

)

 

 

(9,000

)

Tangible common equity

 

$

208,465

 

 

$

205,133

 

 

$

199,331

 

 

$

142,291

 

 

$

137,924

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Book Value per Share of Common Stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity

 

$

208,465

 

 

$

205,133

 

 

$

199,331

 

 

$

142,291

 

 

$

137,924

 

Total shares of common stock outstanding

 

 

17,561,476

 

 

 

17,765,124

 

 

 

17,724,721

 

 

 

12,125,122

 

 

 

11,931,131

 

Tangible book value per share of common stock

 

$

11.87

 

 

$

11.55

 

 

$

11.25

 

 

$

11.74

 

 

$

11.56

 

 


 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

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

Second Quarter 2019 Earnings Release

 

 

 

Six Months Ended

 

 

 

June 30, 2019

 

 

June 30, 2018

 

Operating net income:

 

 

 

 

 

 

 

 

Net income

 

$

10,535

 

 

$

6,707

 

Add:  merger related expenses

 

 

2,305

 

 

 

335

 

Less: income tax impact of merger related expenses

 

 

(603

)

 

 

(88

)

Operating net income

 

$

12,237

 

 

$

6,954

 

 

 

 

 

 

 

 

 

 

Operating diluted net income per

   share of common stock:

 

 

 

 

 

 

 

 

Operating net income

 

$

12,237

 

 

$

6,954

 

Weighted average shares - diluted

 

 

18,740,322

 

 

 

13,021,744

 

Operating diluted net income

   per share of common stock

 

$

0.65

 

 

$

0.53

 

 

 

 

 

 

 

 

 

 

Operating annualized return on average assets:

 

 

 

 

 

 

 

 

Operating net income

 

$

12,237

 

 

$

6,954

 

Average assets

 

$

1,996,386

 

 

$

1,373,869

 

Operating annualized return on

   average assets

 

 

1.24

%

 

 

1.02

%

 

 

 

 

 

 

 

 

 

Operating annualized return on

   average tangible equity:

 

 

 

 

 

 

 

 

Average total shareholders' equity

 

$

259,162

 

 

$

149,914

 

Less: average intangible assets

 

 

(45,672

)

 

 

(6,233

)

Average tangible equity

 

 

213,490

 

 

 

143,681

 

Operating net income

 

$

12,237

 

 

$

6,954

 

Operating annualized return on

   average tangible equity

 

 

11.56

%

 

 

9.76

%

 

 

 

 

 

 

 

 

 

Operating efficiency ratio:

 

 

 

 

 

 

 

 

Total noninterest expense

 

$

31,196

 

 

$

19,586

 

Less:  merger related expenses

 

 

(2,305

)

 

 

(335

)

Total operating noninterest expense

 

 

28,891

 

 

 

19,251

 

Net interest income

 

 

34,010

 

 

 

22,433

 

Total noninterest income

 

 

11,767

 

 

 

5,854

 

Total revenues

 

$

45,777

 

 

$

28,287

 

Operating efficiency ratio:

 

 

63.11

%

 

 

68.06

%