Truxton Corporation Reports Second Quarter 2020 Results

NASHVILLE, Tenn., July 16, 2020 (GLOBE NEWSWIRE) -- Truxton Corporation (OTCPK: TRUX), the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended June 30, 2020.  Second quarter net income attributable to common shareholders was $2.6 million or $0.92 per diluted share compared to $2.5 million or $0.90 per diluted share for the same quarter in 2019.  Net income rose by 4% for the quarter while diluted earnings per share rose by 2%.  For the six months ended June 30, 2020, net income increased by 8% to $5.1 million from $4.7 million in the comparable period in 2019.  For the six months ended June 30, 2020, earnings per diluted share rose to $1.81 from $1.69, an increase of 7%.

Chairman and CEO Tom Stumb remarked, “Truxton continued to perform well as we strove to serve our customers while protecting them and our tireless staff from COVID-19. There remains significant uncertainty about the strength of the economy and the potential risks in our loan portfolio, so we have added meaningfully to our allowance for loan and lease losses.”

Key Highlights

  • Non-interest income experienced a slight decline to $2.9 million from $3.0 million in the second quarter of 2020, a decrease of 2% from the same period of 2019.  Wealth management services contributed 95% of non-interest income in the quarter ended June 30, 2020. 
  • Loans increased by 25% to $420 million compared to June 30, 2019, and were up 15% compared to December 31, 2019.
  • We ended the second quarter with $46 million in loans made pursuant to the Paycheck Protection Program (PPP) provisions of the CARES Act, assisting our small business clients to cover payrolls and other essential costs during this pandemic period.
  • In the second quarter, our allowance for loan and lease losses (ALLL) increased by $411 thousand, a 12% increase from quarter ended March 31, 2020, and a 17% increase from the same quarter in 2019.
  • Total deposits grew 28% since June 30, 2019, inclusive of deposits added as a result of funding PPP loans.  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 significantly smaller than typical peers.
  • Net interest margin for the second quarter of 2020 was 3.13%.  That represents a decrease of 25 basis points from the 3.38% experienced in the quarter ended March 31, 2020, and a decline of 22 basis points from the quarter ended June 30, 2019.  Cost of funds decreased to 0.36% in the second quarter of 2020 from 0.71% for the quarter ended March 31, 2020, and 1.08% for the quarter ended June 30, 2019.  Net interest margin was negatively impacted by the PPP loans, which carry a 1% interest rate. 
  • Asset quality remains sound at Truxton.  Truxton had $2.0 million in non-performing assets at June 30, 2020, up from $0 in the same quarter a year ago. A single residential mortgage comprises over 95% of our non-performing loans.  Truxton had $8 thousand of charge-offs in the quarter and $2 thousand in the first quarter of 2020. 
  • Allowance for loan losses was $4.0 million, $3.6 million, and $3.4 million as of June 30, 2020, March 31, 2020, and June 30, 2019, respectively.  For the three periods, the bank’s allowance was 0.95%, 0.95%, and 1.02%, of gross loans outstanding at period end, respectively. There is no allowance associated with the $46 million of PPP loans.
  • Tax expense increased by 11% from the March 31, 2020 quarter but decreased by 9% from the June 30, 2019 quarter. 
  • The Bank’s capital position remains strong.  Tier 1 leverage ratio was 9.82% at June 30, 2020, 11.21% at March 31, 2020, and 11.44% at June 30, 2019.  The reduction in Tier 1 leverage ratio for the quarter was principally the result of the significant asset growth experienced in the quarter, which was largely driven by the PPP loans.  Book value per common share was $24.41, $23.19, and $22.47 for June 30, 2020, March 31, 2020, and June 30, 2019, respectively.  During the 12 months ended June 30, 2020, Truxton Corporation paid dividends of $2.06 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)
    
 June 30,
2020*
March 31,
2020*
June 30,
2019*
ASSETS   
Cash and due from financial institutions$10,831 $6,863 $7,951 
Interest bearing deposits in other financial institutions 69,772  7,964  12,712 
Federal funds sold 8,559  2,038  253 
Cash and cash equivalents 89,162  16,865  20,916 
    
Time deposits in other financial institutions 4,683  4,659  12,288 
Securities available for sale 137,372  122,112  102,304 
    
Gross loans 373,263  378,512  335,639 
Allowance for loan losses (4,003) (3,592) (3,411)
Paycheck Protection Program Loans 46,639  -  - 
Net loans 415,899  374,920  332,228 
    
Bank owned life insurance 10,079  10,026  9,864 
Restricted equity securities 2,695  2,606  2,588 
Premises and equipment, net 454  376  354 
Accrued interest receivable 2,447  1,865  1,817 
Deferred tax asset, net -  802  321 
Mortgage loans held for sale,et -  560  480 
Other assets 7,808  6,767  4,648 
    
Total assets$670,599 $541,558 $487,808 
    
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
Deposits   
Non-interest bearing$158,062 $120,269 $104,475 
Interest bearing 354,346  309,031  296,549 
Total deposits 512,408  429,300  401,024 
    
Federal Home Loan Bank advances 33,036  38,262  18,833 
Paycheck Protection Program Liquidity Facility advances 46,639  -  - 
Federal Funds purchased -  -  - 
Other liabilities 9,303  8,648  5,988 
Total liabilities 601,386  476,210  425,845 
    
SHAREHOLDERS' EQUITY   
Additional paid-in capital 30,591  30,362  29,066 
Retained earnings 36,971  35,151  32,610 
Accumulated other comprehensive income (loss) 1,651  (166) 287 
    
Total shareholders' equity 69,213  65,347  61,963 
    
Total liabilities and shareholders' equity$670,599 $541,557 $487,808 
    
    
*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 Year To Date 
 June 30,
2020*
 March 31,
2020*
 June 30,
2019*
 June 30,
2020*
 June 30,
2019*
 
Non-interest income          
Wealth management services$2,793 $2,742 $2,783 $5,535 $5,456 
Service charges on deposit accounts 60  79  74  139  144 
Securities gains (losses), net 0  0  70  0  72 
Bank owned life insurance income 53  54  55  107  109 
Other 34  148  10  182  82 
Total non-interest income 2,940  3,023  2,992  5,963  5,863 
           
Interest income          
Loans, including fees$4,282 $4,177 $4,093 $8,459 $8,014 
Taxable securities 486  534  471  1,020  970 
Tax-exempt securities 245  196  237  441  484 
Interest bearing deposits 54  109  161  163  317 
Federal funds sold 2  14  7  16  12 
Other interest income 34  12  51  46  83 
Total interest income 5,103  5,042  5,020  10,145  9,880 
           
Interest expense          
Deposits 371  732  1,041  1,102  2,122 
Short-term borrowings -  -  9  -  16 
Long-term borrowings 129  91  111  220  233 
Total interest expense 500  823  1,161  1,322  2,371 
           
Net interest income 4,603  4,219  3,859  8,823  7,509 
           
Provision for loan losses 418  185  55  603  55 
           
Net interest income after provision for loan losses 4,185  4,034  3,804  8,220  7,454 
           
Total revenue, net 7,125  7,057  6,796  14,183  13,317 
           
Non interest expense          
Salaries and employee benefits 2,797  2,928  2,575  5,726  5,367 
Occupancy 222  199  207  422  405 
Furniture and equipment 30  26  27  56  55 
Data processing 290  263  278  552  579 
Wealth management processing fees 130  124  110  254  222 
Advertising and public relations 25  43  20  68  57 
Professional services 156  168  145  324  260 
FDIC insurance assessments 38  15  35  53  70 
Other 215  264  212  479  406 
Total non interest expense 3,903  4,030  3,609  7,934  7,421 
           
Income before income taxes 3,222  3,027  3,187  6,249  5,896 
           
Income tax expense 608  550  668  1,159  1,191 
           
Net income$2,614 $2,477 $2,519 $5,090 $4,705 
           
Earnings per share:          
Basic$0.93 $0.88 $0.92 $1.83 $1.72 
Diluted$0.92 $0.87 $0.90 $1.81 $1.69 
*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)
    
 June 30,
2020*
March 31,
2020*
June 30,
2019*
    
Per Common Share Data   
Net income attributable to shareholders, per share   
Basic$0.93$0.88$0.92
Diluted$0.92$0.87$0.90
Book value per common share$24.41$23.19$22.47
Tangible book value per common share$24.41$23.19$22.47
Basic weighted average comm shares2,740,5042,729,1672,675,283
Diluted weighted average common shares2,768,1732,761,6392,727,375
Common shares outstanding at period end2,834,9512,817,3542,758,109
    
    
Selected Balance Sheet Data   
Tangible common equity (TEC) ratio10.32%12.07%12.70%
Average Loans$419,360$368,017$339,174
Average earning assets (1)$599,030$510,649$470,691
Average total assets$629,800$538,336$493,510
Average stockholders' equity$67,204$65,434$60,524
    
    
Selected Asset Quality Measures   
Nonaccrual loans205900
90+ days past due still accruing000
Total nonperforming loans205900
Total nonperforming assets205900
Net charge offs (recoveries)82(2)
Nonperforming loans to assets0.31%0.00%0.00%
Nonperforming assets to total assets0.31%0.00%0.00%
Nonperforming assets to total loans and other real estate0.55%0.00%0.00%
Allowance for loan losses to total loans0.95%0.95%1.02%
Allowance for loan losses to nonperforming loans0.49%NANA
Net charge offs (recoveries) to average loans0.00%0.00%0.00%
    
    
Capital Ratios (Bank Subsidiary Only)   
Tier 1 leverage9.82%11.21%11.44%
Common equity tier 113.61%13.41%15.06%
Total risk-based capital14.49%14.21%15.97%
    
Selected Performance Ratios    
Efficiency ratio54.22%65.74%54.31%
Return on average assets (ROA)1.67%1.85%2.05%
Return on average stockholders' equity (ROE)15.64%15.22%16.69%
Return on tangible common equity (ROTCE)15.64%15.22%16.69%
Net interest margin3.13%3.38%3.35%
    
*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
 June 30, 2020* March 31, 2020* June 30, 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$419,360 3.92$4,092 $368,017 4.55$4,159 $339,175 4.81$4,070
 Loan fees$0 0.19$194 $0 0.04$34 $0 0.04$30
 Loans with fees$419,360 4.11$4,286 $368,017 4.58$4,193 $339,175 4.85$4,100
 Mortgage loans held for sale$87 5.20$1 $122 3.23$1 $71 2.99$1
 Federal funds sold$5,372 0.12$2 $3,143 1.75$14 $1,042 2.58$7
 Deposits with banks$49,551 0.44$54 $24,224 1.82$109 $24,747 2.61$161
 Investment securities - taxable$90,256 2.15$486 $87,665 2.44$534 $72,520 2.60$471
 Investment securities - tax-exempt$34,403 3.86$245 $26,939 3.93$196 $33,136 4.27$237
 Total Earning Assets$599,030 3.46$5,074 $510,110 4.03$5,048 $470,691 4.34$4,977
Non interest earning assets           
 Allowance for loan losses(3,702)   (3,411)   (3,394)  
 Cash and due from banks$9,025    $9,399    $6,381   
 Premises and equipment$400    $1,728    $1,901   
 Accrued interest receivable$1,989    $1,651    $1,630   
 Other real estate$0    $0    $0   
 Other assets$20,726    $16,829    $16,075   
 Unrealized gain (loss) on inv. securities2,332    2,028    226   
 Total Assets$629,800    $538,334    $493,510   
Interest bearing liabilities           
 Interest bearing demand$33,084 0.22$18 $32,868 0.69$56 $25,935 0.71$46
 Savings and Money Market$408,757 0.30$300 $368,211 0.66$605 $331,800 1.15$951
 Time deposits - Retail$10,977 1.24$34 $10,497 1.46$38 $11,368 1.35$38
 Time Deposits - Wholesale$2,087 3.72$19 $5,488 2.38$32 $7,880 0.31$6
 Total interest bearing deposits$454,905 0.33$371 $417,075 0.71$732 $376,983 1.11$1,041
 Federal home Loan Bank advances$35,720 1.13$102 $20,950 1.72$91 $22,339 1.97$111
 Other borrowings$32,931 0.33$27 $1,456 0.04$0 $2,924 1.27$9
 Total borrowed funds$68,651 0.74$129 $22,405 1.61$91 $25,263 1.89$120
 Total interest bearing liabilities$523,556 0.38$500 $439,480 0.75$823 $402,246 1.16$1,161
Net interest rate spread 3.08$4,574  3.28$4,225  3.18$3,816
 Non-interest bearing deposits$31,315    $27,470    $27,424   
 Other liabilities$7,725    $5,938    $3,315   
 Stockholder's equity$67,204    $64,434    $60,524   
 Total Liabilities and Stockholder's Equity$629,800    $538,323    $493,509   
Cost of funds 0.36   0.71   1.08 
Net interest margin 3.13   3.38   3.35 
            
*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.
            



 
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:
         
 Six Months Ended  Six Months Ended
 June 30, 2020*  June 30, 2019*
         
 Average
Balances
Rates/
Yields (%)
Interest
Income/
Expense
  Average
Balances
Rates/
Yields (%)
Interest
Income/
Expense
         
Earning Assets        
 Loans$393,688 4.21$8,251  $336,014 4.79$7,987
 Loan fees$0 0.12$228  $0 0.03$48
 Loans with fees$393,688 4.33$8,479  $336,014 4.82$8,035
 Mortgage loans held for sale$105 4.05$2  $69 2.24$1
 Federal funds sold$4,258 0.73$16  $947 2.53$12
 Deposits with banks$37,157 0.88$163  $24,480 2.61$317
 Investment securities - taxable$88,960 2.29$1,020  $74,959 2.59$969
 Investment securities - tax-exempt$30,671 3.89$441  $33,843 3.86$484
 Total Earning Assets$554,839 3.72$10,121  $470,312 4.28$9,818
Non interest earning assets        
 Allowance for loan losses(3,557)    (3,375)  
 Cash and due from banks$8,943     $6,536   
 Premises and equipment$353     $1,396   
 Accrued interest receivable$1,820     $1,609   
 Other real estate$0     $0   
 Other assets$19,489     $15,973   
 Unrealized gain (loss) on inv. securities2,180     (572)  
 Total Assets$584,068     $491,879   
Interest bearing liabilities        
 Interest bearing demand$32,976 0.45$74  $26,238 0.83$108
 Savings and Money Market$388,489 0.05$905  $335,438 1.16$1,932
 Time deposits - Retail$10,737 1.35$72  $11,416 1.24$70
 Time Deposits - Wholesale$3,788 2.75$52  $4,580 0.56$13
 Total interest bearing deposits$435,990 0.51$1,103  $377,672 1.13$2,123
 Federal home Loan Bank advances$28,335 1.34$193  $23,353 1.98$233
 Other borrowings$17,193 0.32$27  $2,201 1.47$16
 Total borrowed funds$45,528 0.96$220  $25,554 1.94$249
 Total interest bearing liabilities$481,518 0.55$1,323  $403,226 1.18$2,372
Net interest rate spread 3.17$8,799   3.09$7,446
 Non-interest bearing deposits$29,393     $26,439   
 Other liabilities$6,833     $3,146   
 Stockholder's equity$66,319     $59,067   
 Total Liabilities and Stockholder's Equity$584,063     $491,878   
Cost of funds 0.52    1.11 
Net interest margin 3.24    3.26 
         
*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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