Truxton Corporation Reports First Quarter 2020 Results

NASHVILLE, Tenn., April 16, 2020 (GLOBE NEWSWIRE) -- Truxton Corporation, the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended March 31, 2020.  First quarter net income attributable to common shareholders was $2.5 million or $0.87 per share compared to $2.2 million or $0.78 per share for the same quarter in 2019.  Net income rose by 13% for the quarter while earnings per share rose by 12%.

“We are very pleased with results in the first quarter, reflecting the dedication and hard work of the Truxton team,” stated Chairman and CEO Tom Stumb.  “By the end of the quarter, however, our country was facing an unprecedented public health crisis, dramatically reducing economic activity.  Truxton has taken extensive measures to protect the health of our staff and clients. We have begun efforts to work with our borrowers to give them the time to recover from the downturn, protect the assets of our shareholders.  Our wealth management clients continue to benefit from prudent asset selection and tax sensitive trading strategies.  The rest of the year will be challenging, but Truxton starts down this road with exceptionally strong capital, earnings, and credit quality.”

Key Highlights

  • Non-interest income grew to $3 million in the first quarter, an increase of 8% from the fourth quarter of 2019 and 5% for the first quarter of 2019.  Wealth management services constituted 90% of non-interest income. 
  • Loans rose by 12% to $375 million compared to March 31, 2019, and were up 4% compared to December 31, 2019.  First quarter new loan production was $18.0 million. 
  • Total deposits decreased by 4% from December 31, 2019, and increased by 4% from March 31, 2019.  Truxton continues to fund its growth from a single banking location through superior deposit operations service and technology.  As a result, occupancy expenditures and fixed asset investments are a fraction of typical peers.
  • Net interest margin for the first quarter of 2020 was 3.38%.  That represents an increase of 17 basis points from the 3.21% experienced in the quarter ended December 31, 2019, and an increase of 15 basis points from the quarter ended March 31, 2019.  Cost of funds decreased to 0.71% in the first quarter of 2020 from 0.95% for the quarter ended December 31, 2019, and 1.14% for the quarter ended March 31, 2019. Truxton entered this period of declining rates with a strong book of fixed rate loans and investments.  Over the near term, declining rates should help our net interest margin.
  • Asset quality remains sound at Truxton.  Truxton had no non-performing assets at March 31, 2020.  Truxton had $2 thousand of charge-offs in the quarter and none in the trailing quarter, nor in the same quarter a year ago. 
  • Allowance for loan losses was $3.6 million, $3.4 million, and $3.4 million at quarter end for March 31, 2020, December 31, 2019, and March 31, 2019, quarters, respectively.   For the three periods, the Bank’s allowance was 0.95%, 0.94%, and 0.99%, of gross loans outstanding at period end, respectively.
  • Tax expense increased by 25% from the December 31, 2019 quarter and by 5% from the March 31, 2019 period.  Effective tax rate was low in the final quarter of 2019 because of certain loans, funded late in the year, for which Truxton receives a direct credit against state income tax based on the year-end balance of the loan.  Truxton believes that the effective tax rate of approximately 19% of pretax net income will persist under current state and federal law. Truxton has several sources of lightly taxed income including yield on bank-owned life insurance, the earnings of the bank’s captive insurance company, and the interest income from the bank’s tax-exempt bond portfolio that cause its effective rate to be below the combined statutory rates.
  • The Bank’s capital position remains strong.  Its Tier 1 leverage ratio was 11.21% for March 31, 2020, 11.30% for December 31, 2019, and 11.15% for March 31, 2019.  Book value per common share was $23.19, $22.84, and $21.52 for March 31, 2020, December 31, 2019, and March 31, 2019, respectively.  During the 12 months ended March 31, 2020, Truxton Corporation paid dividends of $2.03 per common share.

About Truxton Trust
Truxton Trust Company is a provider of private banking, wealth management, trust, and family office services for wealthy individuals, their families and their business interests.  Serving clients across the world, Truxton’s vastly experienced team of professionals provides customized solutions to its clients’ complex financial needs.  Founded in 2004 in Nashville, Tennessee, Truxton Trust upholds its original guiding principle: do the right thing. Truxton Trust Company is a subsidiary of financial holding company, Truxton Corporation (OTCPK: TRUX).  For more information, visit truxtontrust.com. 

Investor Relations
Andrew May
615-515-1707
andrew.may@truxtontrust.com

Media Relations
Tamara Schoeplein
615-515-1714
tamara.schoeplein@truxtontrust.com

 
Truxton Corporation
Consolidated Balance Sheets
(000's)
(Unaudited)
    
 March 31,
2020*
December
2019
March 31,
2019*
ASSETS   
Cash and due from financial institutions$9,433 $8,868 $5,349 
Interest bearing deposits in other financial institutions 5,394  19,519  8,061 
Federal funds sold 2,038  8,808  120 
Cash and cash equivalents 16,865  37,195  13,530 
    
Time deposits in other financial institutions 4,659  5,157  14,280 
Securities available for sale 122,112  116,032  111,608 
    
Gross loans 379,072  364,134  339,176 
Allowance for loan losses (3,592) (3,409) (3,356)
Net loans 375,480  360,725  335,820 
    
Bank owned life insurance 10,026  9,973  9,809 
Restricted equity securities 2,606  2,599  2,583 
Premises and equipment, net 376  273  383 
Accrued interest receivable 1,865  1,842  1,883 
Deferred tax asset, net 608  520  653 
Other assets 6,767  4,448  4,137 
    
Total assets$541,364 $538,764 $494,686 
    
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
Deposits   
Non-interest bearing$120,269 $119,999 $107,248 
Interest bearing 309,032  328,077  304,152 
Total deposits 429,301  448,076  411,400 
    
Federal Home Loan Bank advances 38,262  18,411  19,090 
Federal Funds purchased -  -  - 
Other liabilities 8,454  8,914  4,903 
Total liabilities 476,017  475,401  435,393 
    
SHAREHOLDERS' EQUITY   
Additional paid-in capital 30,362  29,770  28,882 
Retained earnings 35,151  33,511  30,783 
Accumulated other comprehensive income (loss) (166) 82  (372)
    
Total shareholders' equity 65,347  63,363  59,293 
    
Total liabilities and shareholders' equity$541,364 $538,764 $494,686 
    
*The information is preliminary, unaudited and based on company data available at the time of presentation.
    



 
Truxton Corporation
Consolidated Statements of Net Income
(000's)
(Unaudited)
       
 Three Months Ended 
 March 31,
2020*
 December 31,
2019
 March 31,
2019*
 
Non-interest income      
Wealth management services$2,742 $2,596  $2,672 
Service charges on deposit accounts 79  82   70 
Securities gains (losses), net 0  0   2 
Bank owned life insurance income 54  54   54 
Other 148  57   74 
Total non-interest income 3,023  2,789   2,872 
       
Interest income      
Loans, including fees$4,177 $4,062  $3,921 
Taxable securities 534  584   498 
Tax-exempt securities 196  196   247 
Interest bearing deposits 109  125   156 
Federal funds sold 14  8   5 
 Other interest income 12  45   32 
Total interest income 5,042  5,020   4,859 
       
Interest expense      
Deposits 732  984   1,082 
Short-term borrowings -  1   7 
Long-term borrowings 91  90   121 
Total interest expense 823  1,075   1,210 
       
Net interest income 4,219  3,945   3,649 
       
Provision for loan losses 185  0   0 
       
Net interest income after provision for loan losses 4,034  3,945   3,649 
       
Total revenue, net 7,057  6,734   6,521 
       
Non interest expense      
Salaries and employee benefits 2,928  2,671   2,793 
Occupancy 199  200   197 
Furniture and equipment 26  27   27 
Data processing 263  342   299 
Wealth management processing fees 124  126   112 
Advertising and public relations 43  121   38 
Professional services 168  211   115 
FDIC insurance assessments 15  -73   35 
Other 264  195   194 
Total non interest expense 4,030  3,820   3,810 
       
Income before income taxes 3,027  2,914   2,711 
       
Income tax expense 550  441   523 
       
Net income$2,477 $2,473  $2,188 
       
Earnings per share:      
Basic$0.88 $0.89  $0.80 
Diluted$0.87 $0.88  $0.78 
*The information is preliminary, unaudited and based on company data available at the time of presentation. 
  


 
Truxton Corporation
Selected Quarterly Financial data
At Or For The Three Months Ended
(000's)
(Unaudited)
    
 March 31, 2020*December 31, 2019March 31, 2019*
    
Per Common Share Data   
Net income attributable to shareholders, per share   
Basic$0.88 $0.89 $0.80 
Diluted$0.87 $0.88 $0.78 
Book value per common share$23.19 $22.84 $21.52 
Tangible book value per common share$23.19 $22.84 $21.52 
Basic weighted average comm shares 2,729,167  2,699,777  2,677,947 
Diluted weighted average common shares 2,761,639  2,754,101  2,729,774 
Common shares outstanding at period end 2,817,354  2,774,655  2,754,788 
    
    
Selected Balance Sheet Data   
Tangible common equity (TEC) ratio 12.07%  12.35%  12.00% 
Average Loans$368,017 $348,635 $332,819 
Average earning assets (1)$510,110 $492,829 $469,928 
Average total assets$538,334 $518,902 $490,230 
Average stockholders' equity$65,434 $65,457 $57,593 
    
    
Selected Asset Quality Measures   
Nonaccrual loans 0  0  0 
90+ days past due still accruing 0  0  0 
Total nonperforming loans 0  0  0 
Total nonperforming assets 0  0  0 
Net charge offs (recoveries) 2  0  -2 
Nonperforming loans to assets 0.00%  0.00%  0.00% 
Nonperforming assets to total assets 0.00%  0.00%  0.00% 
Nonperforming assets to total loans and other real estate 0.00%  0.00%  0.00% 
Allowance for loan losses to total loans 0.95%  0.94%  0.99% 
Allowance for loan losses to nonperforming loansNANANA
Net charge offs (recoveries) to average loans 0.00%  0.00%  0.00% 
    
    
Capital Ratios (Bank Subsidiary Only)   
Tier 1 leverage 11.21%  11.30%  11.15% 
Common equity tier 1 13.41%  13.70%  14.43% 
Total risk-based capital 14.21%  14.51%  15.32% 
    
Selected Performance Ratios    
Efficiency ratio 65.74%  55.67%  58.53% 
Return on average assets (ROA) 1.85%  1.89%  1.81% 
Return on average stockholders' equity (ROE) 15.22%  15.77%  15.41% 
Return on tangible common equity (ROTCE) 15.22%  15.77%  15.41% 
Net interest margin 3.38%  3.21%  3.23% 
    
*The information is preliminary, unaudited and based on company data available at the time of presentation. 
    
(1) Average earning assets is the daily average of earning assets. Earning assets consists of loans, mortgage loans held for sale, federal funds sold, deposits with banks, investment securities and restricted equity securities.
 


 
Truxton Corporation
Yield Tables
For The Periods Indicated
(000's)
(Unaudited)
 
The following table sets forth the amount of our average balances, interest income or interest expense for each category of interest earning assets and interest bearing liabilities and the average interest rate for interest earning assets and interest bearing liabilities, net interest spread and net interest margin for the periods indicated below: 
 
 
      
 Three Months Ended
 Three Months Ended
 Three Months Ended
 March 31, 2020*
 December 31, 2019
 March 31, 2019*
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
            
Earning Assets           
 Loans$368,0174.55$4,159 $348,635 4.60$4,044 $332,819 4.77$3,917
 Loan fees$00.04$34 $0 0.03$24 $0 0.02$17
 Loans with fees$368,0174.58$4,193 $348,635 4.63$4,068 $332,819 4.79$3,935
 Mortgage loans held for sale$1223.23$1 $13 3.55$0 $66 1.44$0
 Federal funds sold$3,1431.75$14 $1,944 1.66$8 $851 2.48$5
 Deposits with banks$24,2241.82$109 $25,747 1.93$125 $24,211 2.61$156
 Investment securities - taxable$87,6652.44$534 $89,614 2.61$584 $77,423 2.57$498
 Investment securities - tax-exempt$26,9393.93$196 $26,876 3.93$196 $34,558 4.26$247
 Total Earning Assets$510,1104.03$5,048 $492,829 4.07$4,981 $469,928 4.27$4,841
Non interest earning assets           
 Allowance for loan losses 3,411    -3,411     -3,356   
 Cash and due from banks$9,399   $8,263    $6,693   
 Premises and equipment$1,728   $1,623    $300   
 Accrued interest receivable$1,651   $1,600    $1,588   
 Other real estate$0   $0    $0   
 Other assets$16,829   $16,343    $16,456   
 Unrealized gain (loss) on inv. securities 2,028    1,656     -1,379   
 Total Assets$538,334   $518,903    $490,230   
Interest bearing liabilities           
 Interest bearing demand$32,8680.69$56 $28,241 0.41$29 $26,545 0.95$62
 Savings and Money Market$368,2110.66$605 $349,734 0.84$737 $339,115 1.17$981
 Time deposits - Retail$10,4971.46$38 $14,023 1.83$65 $11,465 1.14$32
 Time Deposits - Wholesale$5,4882.38$32 $8,695 6.99$153 $1,243 2.20$7
 Total interest bearing deposits$417,0750.71$732 $400,693 0.97$984 $378,368 1.16$1,082
 Federal home Loan Bank advances$20,9501.72$91 $18,490 1.89$90 $24,378 2.00$122
 Other borrowings$1,4560.04$0 $1,417 0.21$1 $884 3.08$7
 Total borrowed funds$22,4051.61$91 $19,907 1.77$91 $25,262 2.03$128
 Total interest bearing liabilities$439,4800.75$823 $420,600 1.01$1,074 $403,631 1.21$1,210
Net interest rate spread 3.28$4,225  3.06$3,907  3.06$3,631
 Non-interest bearing deposits$27,470   $27,422    $25,445   
 Other liabilities$5,938   $5,423    $3,560   
 Stockholder's equity$64,434   $65,457    $57,593   
 Total Liabilities and Stockholder's Equity$538,323   $518,902    $490,228   
Cost of funds 0.71   0.95   1.14 
Net interest margin 3.38   3.21   3.23 
            
*The information is preliminary, unaudited and based on company data available at the time of presentation.      
            
Yield Table Assumptions - Average loan balances are inclusive of nonperforming loans. Yields computed on tax-exempt instruments are on a tax equivalent basis. Net interest spread is calculated as the yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. Net interest margin is the result of net interest income calculated on a tax-equivalent basis divided by average interest earning assets for the period. Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate while rate change is change in rate times the previous volume. Changes not due solely to volume or rate changes are allocated to volume change and rate change in proportion to the relationship of the absolute dollar amounts of the change in each category.

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