Truxton Corporation Reports First Quarter 2023 Results

April 20, 2023

NASHVILLE, Tenn., April 20, 2023 (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, 2023. First quarter net income attributable to common shareholders was $4.3 million or $1.47 per diluted share compared to $4.2 million or $1.45 per diluted share for the same quarter in 2022. Net income and fully diluted earnings per share for the quarter rose by 2% and 1%, respectively, compared to the first quarter of 2022.

“Truxton performed well in the first quarter of 2023 despite continued financial market turbulence,” said Chairman and CEO Tom Stumb. “In light of recent banking industry turmoil, it is important to highlight that our conservative asset liability management has always been a key pillar of strength for our business. Volatility in stock and bond markets also continues to be a headwind. Wealth Management Services revenue was down only $10 thousand for the quarter compared to first quarter 2022 while many market indices were down more than 10% over the same period. Net interest margin for the quarter held steady year-over-year despite a dramatic shift in the interest rate environment during the same period. The market environment remains challenging, but we continue to seek to serve our shareholders well by striving to serve our clients well.”

Key Highlights

  • Non-interest income, excluding gains and losses on the sale of securities, grew to $4.5 million in the first quarter, an increase of 2% from the fourth quarter of 2022 and 2% higher in comparison to the first quarter of 2022. Wealth management services constituted 94% of non-interest income, excluding those same gains and losses, in the first quarter of 2023 compared to 95% in the fourth quarter of 2022 and 96% in the first quarter of 2022.
  • Loans rose by 1% to $626 million at quarter end compared to $619 million on December 31, 2022 and were up 24% compared to $505 million on March 31, 2022.
  • Total deposits decreased by 4% from $808 million at December 31, 2022, to $771 million at March 31, 2023, and were less than 1% lower in comparison to $778 million at March 31, 2022. Truxton continues to fund its growth from a single banking location led by its commitment to provide what it believes is 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 2023 was 2.75%, a decrease of 8 basis points from the 2.83% experienced in the quarter ended December 31, 2022, and the same as in the quarter ended March 31, 2022. Cost of funds was 2.27% in the first quarter of 2023, up from 1.73% for the quarter ended December 31, 2022, and up from 0.42% for the quarter ended March 31, 2022.
  • Asset quality remains sound at Truxton. Truxton had $0 in non-performing assets on March 31, 2023. Truxton had $12 thousand of net charge-offs in the first quarter of 2023, $2 thousand in recoveries in the trailing quarter, and $0 in the first quarter of 2022.
  • Truxton adopted the mandated Current Expected Credit Loss accounting methodology for calculating its allowance for credit losses effective January 1, 2023. Allowance for credit losses, excluding $507 thousand for unfunded commitments, was $6.0 million at quarter end March 31, 2023, compared to Allowance for loans losses of $5.8 million at December 31, 2022, and $4.9 million at March 31, 2022. For the same three periods, the Bank’s allowance was 0.95%, 0.93%, and 0.97%, respectively, of gross loans outstanding at period end.
  • The Bank’s capital position remains strong. Its Tier 1 leverage ratio was 10.29% at March 31, 2023, compared to 9.78% at December 31, 2022, and 9.48% at March 31, 2022. Book value per common share was $25.71, $25.39, and $25.77 at March 31, 2023, December 31, 2022, and March 31, 2022, respectively. During the three months ended March 31, 2023, Truxton Corporation paid dividends of $1.38 per common share, inclusive of a $1.00 special cash dividend paid on March 25, 2023.

About Truxton Trust
Truxton Trust Company is a provider of private banking, wealth management, trust, capital markets 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 Media Relations
Austin Branstetter Swan Burrus
615-250-0783 615-250-0773
austin.branstetter@truxtontrust.com swan.burrus@truxtontrust.com

 

Truxton Corporation
Consolidated Balance Sheets
(000's)
(Unaudited)
       
  March 31, 2023* December 31, 2022* March 31, 2022*
ASSETS      
Cash and due from financial institutions $ 8,955   $ 5,405   $ 8,837  
Interest bearing deposits in other financial institutions   4,322     1,094     42,375  
Federal funds sold   10     -     2,985  
Cash and cash equivalents   13,288     6,499     54,197  
       
Time deposits in other financial institutions   1,260     3,833     2,284  
Securities available for sale   253,372     257,257     293,588  
       
Gross loans, excluding Paycheck Protection Program   625,626     618,847     504,235  
Allowance for credit losses**   (5,961 )   (5,761 )   (4,881 )
Paycheck Protection Program Loans   90     101     409  
Net loans   619,754     613,187     499,763  
       
Bank owned life insurance   10,644     10,592     10,439  
Restricted equity securities   5,391     3,227     3,250  
Premises and equipment, net   222     209     267  
Accrued interest receivable   9,752     3,512     2,479  
Deferred tax asset, net   6,842     7,161     3,107  
Other assets   1,369     11,803     5,790  
       
Total assets $ 921,894   $ 917,280   $ 875,164  
       
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Deposits      
Non-interest bearing $ 151,956   $ 153,870   $ 180,743  
Interest bearing   619,542     653,880     597,310  
Total deposits   771,499     807,750     778,053  
       
Federal funds purchased   2,417     4,933     -  
Swap counterparty cash collateral   2,860     4,090     -  
Federal Home Loan Bank advances   9,500     4,500     4,500  
Federal Reserve Bank Term Funding Program advances   40,000     -     -  
Subordinated debt   14,752     14,727     14,653  
Other liabilities   6,078     7,904     2,789  
Total liabilities   847,106     843,904     799,995  
       
SHAREHOLDERS' EQUITY      
Common stock, $0.10 par value $ 289   $ 289   $ 287  
Additional paid-in capital   31,336     31,107     32,113  
Retained earnings   59,281     59,492     49,946  
Accumulated other comprehensive income (loss)   (16,118 )   (17,512 )   (7,177 )
       
Total shareholders' equity   74,788     73,376     75,169  
       
Total liabilities and shareholders' equity $ 921,894   $ 917,280   $ 875,164  
       
*The information is preliminary, unaudited and based on company data available at the time of presentation.
**Prior quarter data shows Allowance for loan losses. Truxton adopted the Current Expected Credit Loss methodology as of January 1, 2023. The total excludes reserve for credit losses on unfunded commitments of $507, recorded in Other liabilities, as of March 31, 2023.

 

Truxton Corporation
Consolidated Statements of Net Income
(000's)
(Unaudited)
             
  Three Months Ended  
  March 31, 2023*   December 31, 2022*   March 31, 2022*  
Non-interest income            
Wealth management services $ 4,171   $ 4,126     $ 4,182    
Service charges on deposit accounts   136     111       99    
Securities gains (losses), net   58     (588 )     (18 )  
Bank owned life insurance income   52     51       50    
Other   91     63       48    
Total non-interest income   4,508     3,763       4,361    
             
Interest income            
Loans, including fees $ 8,487   $ 8,017     $ 4,838    
Taxable securities   1,954     1,620       1,114    
Tax-exempt securities   233     373       396    
Interest bearing deposits   61     303       31    
Federal funds sold   11     26       1    
Other interest income   65     59       16    
Total interest income   10,812     10,398       6,396    
             
Interest expense            
Deposits   4,216     3,485       586    
Short-term borrowings   58     42       194    
Long-term borrowings   237     72       23    
Subordinated debentures   194     194       1    
Total interest expense   4,705     3,793       804    
             
Net interest income   6,107     6,605       5,592    
             
Provision for credit losses   59     9       105    
             
Net interest income after provision for loan losses   6,048     6,596       5,487    
             
Total revenue, net   10,556 0   10,359       9,848    
             
Non interest expense            
Salaries and employee benefits   3,766     3,823       3,511    
Occupancy   286     278       252    
Furniture and equipment   25     25       32    
Data processing   427     400       366    
Wealth management processing fees   176     179       165    
Advertising and public relations   46     78       32    
Professional services   116     177       166    
FDIC insurance assessments   75     55       57    
Other   397     196       242    
Total non interest expense   5,314     5,211       4,823    
             
Income before income taxes   5,242     5,148       5,025    
             
Income tax expense   951     1,098       798    
             
Net income $ 4,291   $ 4,050     $ 4,227    
             
Earnings per share:            
Basic $ 1.48   $ 1.40     $ 1.46    
Diluted $ 1.47   $ 1.40     $ 1.45    
*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, 2023* December 31, 2022* March 31, 2022*
       
Per Common Share Data      
Net income attributable to shareholders, per share      
Basic $1.48 $1.40 $1.46
Diluted $1.47 $1.40 $1.45
Book value per common share $25.71 $25.39 $25.77
Tangible book value per common share $25.71 $25.39 $25.77
Basic weighted average common shares 2,820,892 2,810,702 2,793,014
Diluted weighted average common shares 2,830,504 2,822,538 2,807,866
Common shares outstanding at period end 2,908,483 2,887,362 2,917,044
       
       
Selected Balance Sheet Data      
Tangible common equity (TCE) ratio 8.11% 8.00% 8.59%
Average Loans $622,012 $616,609 $498,755
Average earning assets (1) $912,603 $939,763 $840,952
Average total assets $918,440 $943,900 $866,432
Average stockholders' equity $75,557 $70,128 $83,009
       
       
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) $12 ($2) $0
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 credit losses to total loans** 0.95% 0.93% 0.97%
Net charge offs to average loans 0.00% 0.00% 0.00%
       
       
Capital Ratios (Bank Subsidiary Only)      
Tier 1 leverage 10.29% 9.78% 9.48%
Common equity tier 1 13.79% 13.36% 14.00%
Total risk-based capital 14.74% 14.20% 14.83%
       
Selected Performance Ratios      
Efficiency ratio 51.32% 48.55% 48.46%
Return on average assets (ROA) 1.89% 1.70% 1.98%
Return on average stockholders' equity (ROE) 23.05% 22.92% 20.64%
Return on average tangible common equity (ROTCE) 23.05% 22.92% 20.64%
Net interest margin 2.75% 2.83% 2.75%
       
*The information is preliminary, unaudited and based on company data available at the time of presentation.
**Prior quarter data shows Allowance for loan losses. Truxton adopted the Current Expected Credit Loss methodology as of January 1, 2023. March 31, 2023 ratio does not include $507 reserve for unfunded commitments
(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, and investment 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, 2023*   December 31, 2022*   March 31, 2022*
                       
  Average
Balances
Rates/ Yields (%) Interest Income/ Expense   Average
Balances
Rates/ Yields (%) Interest Income/ Expense   Average
Balances
Rates/ Yields (%) Interest Income/ Expense
                       
Earning Assets                      
Loans $622,012   5.46 $8,376   $616,609   5.01 $7,905   $498,755   3.73 $4,586
Loan fees $0   0.07 $111   $0   0.07 $112   $0   0.20 $252
Loans with fees $622,012   5.53 $8,487   $616,609   5.16 $8,017   $498,755   3.93 $4,837
Mortgage loans held for sale $0   0.00 $0   $0   0.00 $0   $61   3.72 $1
Federal funds sold $866   5.15 $11   $2,688   3.76 $26   $1,735   0.17 $1
Deposits with banks $11,749   4.38 $127   $31,462   3.82 $303   $34,026   0.37 $31
Investment securities - taxable $237,601   3.29 $1,954   $228,108   2.84 $1,620   $239,635   1.86 $1,114
Investment securities - tax-exempt $40,376   3.45 $233   $60,897   3.31 $372   $66,739   3.21 $396
      Total Earning Assets $912,603   4.84 $10,812   $939,764   4.43 $10,338   $840,952   3.13 $6,380
Non interest earning assets                      
Allowance for loan losses   (6,279 )         (5,783 )         (4,776 )    
Cash and due from banks $6,547         $6,871         $8,046      
Premises and equipment $202         $224         $256      
Accrued interest receivable $2,843         $2,935         $2,065      
Other real estate $0         $0         $0      
Other assets $28,601         $30,251         $20,519      
Unrealized gain (loss) on inv. securities   (26,077 )         (30,362 )         (630 )    
      Total Assets $918,440         $943,900         $866,432      
Interest bearing liabilities                      
Interest bearing demand $366,260   2.80 $2,529   $380,638   2.23 $2,140   $37,019   0.32 $29
Savings and money market $127,422   1.70 $533   $142,369   1.44 $515   $68,248   0.33 $523
Time deposits - retail $18,256   1.93 $87   $24,280   1.41 $86   $10,734   0.48 $13
Time deposits - wholesale $133,704   3.24 $1,067   $128,619   2.29 $744   $39,793   0.22 $21
Total interest bearing deposits $645,642   2.65 $4,216   $675,906   2.05 $3,485   $725,793   0.33 $586
Federal Home Loan Bank advances $16,844   4.09 $172   $9,957   2.85 $72   $6,278   1.48 $23
Subordinated debt $15,001   5.17 $194   $14,827   5.12 $194   $14,863   5.22 $194
Other borrowings $11,451   4.29 $123   $4,760   4.33 $42   $882   1.23 $1
Total borrowed funds $43,296   4.52 $489   $29,544   4.08 $308   $22,023   3.96 $218
      Total interest bearing liabilities $688,938   2.77 $4,705   $705,450   2.13 $3,793   $747,817   0.43 $804
Net interest rate spread   2.08 $6,107     2.30 $6,545     2.70 $5,576
Non-interest bearing deposits $150,259         $163,653         $31,724      
Other liabilities $3,686         $4,671         $3,882      
Stockholder's equity $75,557         $70,128         $83,009      
      Total Liabilities and Stockholder's Equity $918,440         $943,902         $866,432      
Cost of funds   2.27       1.73       0.42  
Net interest margin   2.75       2.83       2.75  
                       
*The information is preliminary, unaudited and based on company data available at the time of presentation. Totals may not foot due to rounding.    
                       
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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Source: Truxton Trust Company