Truxton Corporation Reports Second Quarter 2023 Results

July 20, 2023

NASHVILLE, Tenn., July 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 June 30, 2023. Second quarter net income attributable to common shareholders was $4.5 million or $1.53 per diluted share compared to $4.1 million or $1.41 per diluted share for the same quarter in 2022. Net income and fully diluted earnings per share for the quarter rose by 8% and 9%, respectively, compared to the second quarter of 2022.

“Truxton had another great quarter despite the challenges facing financial institutions,” said Chairman and CEO Tom Stumb. “Net interest margin compressed but our resilient business model with significant non-interest income allowed for continued earnings growth. Our home market of Nashville continues to experience exceptional strength, supporting our growth and credit quality.”

Key Highlights

  • Non-interest income grew to $4.8 million in the second quarter, an increase of 6% from the first quarter of 2023 and 13% higher in comparison to the second quarter of 2022. Wealth management services constituted 93% of non-interest income in the second quarter of 2023 compared to 94% in the first quarter of 2023 and 95% in the second quarter of 2022.
  • Gross loans rose by less than 1% to $628 million at quarter end compared to $626 million on March 31, 2023 and were up 10% compared to $570 million on June 30, 2022.
  • Total deposits increased by 2% from $771 million at March 31, 2023, to $790 million at June 30, 2023, and were 1% higher in comparison to $782 million at June 30, 2022. Truxton continues to principally 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 remain a fraction of typical peers.
  • Net interest margin for the second quarter of 2023 was 2.54%, a decrease of 21 basis points from the 2.75% experienced in the quarter ended March 31, 2023, and 29 basis points lower than 2.83% in the quarter ended June 30, 2022. Cost of funds was 2.80% in the second quarter of 2023, up from 2.27% for the quarter ended March 31, 2023, and up from 0.50% for the quarter ended June 30, 2022.
  • Asset quality remains sound at Truxton. Truxton had $0 in non-performing assets on June 30, 2023. Truxton had $0 of net charge-offs in the second quarter of 2023, $2 thousand in recoveries in the trailing quarter, and $0 of net charge-offs in the second quarter of 2022.
  • Truxton adopted the mandated Current Expected Credit Loss accounting methodology for calculating its allowance for credit losses effective January 1, 2023. The Allowance for Credit Losses was $6.0 million at quarter end June 30, 2023, and at quarter end March 31, 2023, each excluding $0.5 million in allowance for unfunded commitments, compared to Allowance for Loan and Lease Losses of $5.5 million at June 30, 2022. For the same three periods, the Bank’s allowance was 0.95%, 0.95%, and 0.96%, respectively, of gross loans outstanding at period end.
  • The Bank’s capital position remains strong. Its Tier 1 leverage ratio was 10.39% at June 30, 2023, compared to 10.29% at March 31, 2023, and 9.63% at June 30, 2022. Book value per common share was $27.01, $25.71, and $24.49 at June 30, 2023, March 31, 2023, and June 30, 2022, respectively. During the six months ended June 30, 2023, Truxton Corporation paid dividends of $1.76 per common share, inclusive of a $1.00 special cash dividend.

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 RelationsMedia Relations
Austin BranstetterSwan Burrus
615-250-0783615-250-0773
austin.branstetter@truxtontrust.com swan.burrus@truxtontrust.com 
  


Truxton Corporation
Consolidated Balance Sheets
(000’s)
(Unaudited)
    
 June 30, 2023*March 31, 2023*June 30, 2022*
ASSETS   
Cash and due from financial institutions$30,617 $8,955 $6,145 
Interest bearing deposits in other financial institutions 2,848  4,322  670 
          
Federal funds sold 1,705  10  114 
Cash and cash equivalents 35,171  13,288  6,929 
    
Time deposits in other financial institutions 250  1,260  2,283 
Securities available for sale 272,474  253,372  273,689 
    
Gross loans, excluding Paycheck Protection Program 627,576  625,626  569,969 
Allowance for credit losses** (5,982) (5,961) (5,468)
Paycheck Protection Program Loans 80  90  121 
Net loans 621,674  619,754  564,622 
    
Bank owned life insurance 10,698  10,644  10,490 
Restricted equity securities 5,011  5,391  3,258 
Premises and equipment, net 575  222  223 
Accrued interest receivable 11,782  9,752  2,748 
Deferred tax asset, net 6,623  6,842  5,335 
Other assets 1,387  1,369  7,192 
    
Total assets$965,644 $921,894 $876,769 
    
    
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Deposits   
Non-interest bearing$152,071 $151,956 $190,911 
Interest bearing 637,595  619,542  591,081 
Total deposits 789,665  771,499  781,992 
    
Federal funds purchased -  2,417  - 
Swap counterparty cash collateral 3,780  2,860  - 
Federal Home Loan Bank advances 16,500  9,500  4,500 
Federal Reserve Bank Term Funding Program advances 55,000  40,000  - 
          
Subordinated debt 14,946  14,752  14,847 
Other liabilities 7,083  6,078  4,468 
Total liabilities 886,974  847,106  805,807 
    
SHAREHOLDERS’ EQUITY   
Common stock, $0.10 par value$289 $289 $285 
Additional paid-in capital 31,743  31,336  30,972 
Retained earnings 62,627  59,281  53,070 
Accumulated other comprehensive income (loss) (15,989) (16,118) 13,366 
    
Total shareholders’ equity 78,670  74,788  97,693 
    
Total liabilities and shareholders’ equity$965,644 $921,894 $903,500 
    
*The information is preliminary, unaudited and based on company data available at the time of presentation.
**2022 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 recorded in Other liabilities in 2023.
    


Truxton Corporation
Consolidated Statements of Net Income
(000’s)
(Unaudited)
          
 Three Months Ended Year To Date
 June 30, 2023* March 31, 2023* June 30, 2022* June 30, 2023* June 30, 2022*
Non-interest income         
Wealth management services$4,442 $4,171 $4,056  $8,613 $8,237 
Service charges on deposit accounts 139  136  106   276  205 
Securities gains (losses), net 0  58  (30)  58  (47)
Bank owned life insurance income 54  52  51   106  101 
Other 133  95  38   228  86 
Total non-interest income 4,769  4,512  4,221   9,281  8,582 
          
Interest income         
Loans, including fees$9,107 $8,487 $5,473  $17,594 $10,311 
Taxable securities 2,267  1,954  1,143   4,221  2,257 
Tax-exempt securities 217  233  396   450  793 
Interest bearing deposits 55  61  48   117  79 
Federal funds sold 18  11  3   29  4 
Other interest income 134  61  47   195  62 
Total interest income 11,798  10,809  7,110   22,606  13,506 
          
Interest expense         
Deposits 4,938  4,216  807   9,155  1,393 
Short-term borrowings 52  58  4   110  5 
Long-term borrowings 817  237  194   1,054  388 
Subordinated debentures 194  194  22   388  46 
Total interest expense 6,001  4,705  1,027   10,706  1,832 
          
Net interest income 5,797  6,103  6,083   11,900  11,674 
          
Provision for credit losses 15  59  586   74  691 
          
Net interest income after provision for loan losses 5,782  6,044  5,497   11,826  10,983 
          
Total revenue, net 10,550  10,556  9,718   21,107  19,565 
          
Non interest expense         
Salaries and employee benefits 3,663  3,766  3,469   7,429  6,980 
Occupancy 314  286  243   600  495 
Furniture and equipment 20  25  29   45  61 
Data processing 455  427  354   882  720 
Wealth management processing fees 176  176  159   352  324 
Advertising and public relations 35  46  21   81  53 
Professional services 54  116  179   169  345 
FDIC insurance assessments 75  75  57   150  114 
Other 279  397  214   676  455 
Total non interest expense 5,070  5,314  4,725   10,384  9,547 
          
Income before income taxes 5,481  5,242  4,993   10,722  10,018 
          
Income tax expense 1,028  951  883   1,979  1,681 
          
Net income$4,453 $4,291 $4,110  $8,743 $8,337 
          
Earnings per share:         
Basic$1.53 $1.48 $1.41  $3.01 $2.87 
Diluted$1.53 $1.47 $1.41  $3.00 $2.86 
*The information is preliminary, unaudited and based on company data available at the time of presentation. Totals may not foot due to rounding.
 


Truxton Corporation
Selected Quarterly Financial data
At Or For The Three Months Ended
(000’s)
(Unaudited)
    
 June 30, 2023*March 31, 2023*June 30, 2022*
    
Per Common Share Data   
Net income attributable to shareholders, per share   
Basic$1.53$1.48$1.41
Diluted$1.53$1.47$1.41
Book value per common share$27.01$25.71$24.49
Tangible book value per common share$27.01$25.71$24.49
Basic weighted average common shares2,830,8942,820,8922,822,292
Diluted weighted average common shares2,838,3212,830,5042,835,394
Common shares outstanding at period end2,912,7812,908,4832,898,167
    
    
Selected Balance Sheet Data   
Tangible common equity (TCE) ratio8.15%8.11%8.09%
Average Loans$629,899$622,012$544,496
Average earning assets (1)$932,732$912,603$875,238
Average total assets$939,007$918,440$890,088
Average stockholders’ equity$76,536$75,557$83,192
    
    
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)$0$12$0
Nonperforming loans to assets0.00%0.00%0.00%
Nonperforming assets to total assets0.00%0.00%0.00%
Nonperforming assets to total loans and other real estate0.00%0.00%0.00%
Allowance for credit losses to total loans**0.95%0.95%0.96%
Net charge offs to average loans0.00%0.00%0.00%
    
    
Capital Ratios (Bank Subsidiary Only)   
Tier 1 leverage10.39%10.29%9.63%
Common equity tier 114.25%13.79%12.97%
Total risk-based capital15.18%14.74%13.80%
    
Selected Performance Ratios    
Efficiency ratio48.56%51.32%48.46%
Return on average assets (ROA)1.90%1.89%1.85%
Return on average stockholders’ equity (ROE)23.33%23.05%22.52%
Return on average tangible common equity (ROTCE)23.33%23.05%22.52%
Net interest margin2.54%2.75%2.83%
    
*The information is preliminary, unaudited and based on company data available at the time of presentation.
**2022 data shows Allowance for loan losses. Truxton adopted the Current Expected Credit Loss methodology as of January 1, 2023. 2023 ratios do not include 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
 June 30, 2023* March 31, 2023* June 30, 2022*
            
 Average BalancesRates/Yields (%)Interest Income/ Expense Average BalancesRates/Yields (%)Interest Income/ Expense
 Average BalancesRates/Yields (%)Interest Income/ Expense
            
Earning Assets           
Loans$629,899 5.72$8,989 $622,012 5.46$8,376 $544,496 3.90$5,299
Loan fees$0 0.08$119 $0 0.07$111 $0 0.13$174
Loans with fees$629,899 5.80$9,107 $622,012 5.53$8,487 $544,496 4.03$5,473
Mortgage loans held for sale$0 0.00$0 $0 0.00$0 $53 4.53$1
Federal funds sold$1,456 4.85$18 $866 5.15$11 $2,255 0.55$3
Deposits with banks$15,618 4.95$193 $11,749 4.38$127 $28,206 0.68$48
Investment securities - taxable$247,515 3.66$2,267 $237,601 3.29$1,954 $234,780 1.95$1,143
Investment securities - tax-exempt$38,243 3.39$217 $40,376 3.45$233 $65,448 3.27$396
Total Earning Assets$932,732 5.12$11,802 $912,603 4.84$10,812 $875,238 3.30$7,064
Non interest earning assets           
Allowance for loan losses(5,959)   (6,279)   (5,105)  
Cash and due from banks$6,092    $6,547    $9,244   
Premises and equipment$164    $202    $248   
Accrued interest receivable$3,213    $2,843    $2,278   
Other real estate$0    $0    $0   
Other assets$28,375    $28,601    $24,350   
Unrealized gain (loss) on inv. securities(25,610)   (26,077)   (16,166)  
Total Assets$939,007    $918,440    $890,087   
Interest bearing liabilities           
Interest bearing demand$341,780 3.14$2,673 $366,260 2.80$2,529 $365,521 0.05$44
Savings and money market$139,463 2.62$912 $127,422 1.70$533 $135,122 1.76$594
Time deposits - retail$16,758 2.40$100 $18,256 1.93$87 $16,400 0.87$36
Time deposits - wholesale$128,795 3.90$1,254 $133,704 3.24$1,067 $82,376 0.65$134
Total interest bearing deposits$626,796 3.16$4,938 $645,642 2.65$4,216 $599,419 0.54$807
Federal Home Loan Bank advances$18,907 4.27$204 $16,844 4.09$172 $4,500 1.98$22
Subordinated debt$14,876 5.16$193,899 $15,001 5.17$194 $14,776 5.19$194
Other borrowings$58,342 5.86$858 $11,451 4.57$123 $1,236 2.23$4
Total borrowed funds$92,125 4.56$1,062 $43,296 4.52$489 $20,512 4.25$220
Total interest bearing liabilities$718,921 3.34$6,000 $688,938 2.77$4,705 $619,931 0.66$1,027
Net interest rate spread 1.78$5,801  2.08$6,107  2.64$6,037
Non-interest bearing deposits$139,807    $150,259    $193,872   
Other liabilities$3,743    $3,686    $3,092   
Stockholder’s equity$76,536    $75,557    $73,192   
Total Liabilities and Stockholder’s Equity$939,007    $918,440    $890,087   
Cost of funds 2.80   2.27   0.50 
Net interest margin 2.54   2.75   2.83 
 
*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.
 


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, 2023* June 30, 2022*
        
 Average BalancesRates/Yield (%)Interest Income/Expense Average BalancesRates/Yields (%)Interest Income/Expense
        
Earning Assets       
Loans$625,977 5.59$9,885 $521,752 3.85$9,885
Loan fees$0 0.07$434 $0 0.17$434
Loans with fees$625,977 5.67$10,319 $521,752 3.99$10,319
Mortgage loans held for sale$0 0.00$1 $57 4.10$1
Federal funds sold$1,162 4.96$4 $1,997 0.39$4
Deposits with banks$13,695 4.71$79 $31,100 0.51$79
Investment securities - taxable$242,585 3.48$2,257 $237,194 1.90$2,257
Investment securities - tax-exempt$39,304 3.42$792 $66,090 3.24$792
Total Earning Assets$922,723 4.98$13,452 $858,190 3.22$13,452
Non interest earning assets       
Allowance for loan losses(6,118)   (4,942)  
Cash and due from banks$6,318    $8,648   
Premises and equipment$183    $272   
Accrued interest receivable$3,029    $2,172   
Other real estate$0    $0   
Other assets$28,487    $22,425   
Unrealized gain (loss) on inv. securities(25,842)   (8,441)  
Total Assets$928,780    $878,324   
Interest bearing liabilities       
Interest bearing demand$353,953 2.96$72 $364,279 0.04$72
Savings and Money Market$133,476 2.18$1,117 $149,534 1.51$1,117
Time deposits - Retail$17,503 2.16$48 $13,582 0.72$48
Time Deposits - Wholesale$131,236 3.57$155 $61,202 0.51$155
Total interest bearing deposits$636,167 2.90$1,393 $588,597 0.48$1,393
Federal home Loan Bank advances$17,881 4.19$46 $5,384 1.69$46
Subordinated debt$14,939 5.16$388 $14,820 5.20$388
Other borrowings$35,025 5.22$4 $1,060 1.98$4
Total borrowed funds$67,845 4.55$438 $21,264 4.10$438
Total interest bearing liabilities$704,012 3.06$1,831 $609,861 0.60$1,831
Net interest rate spread 1.92$11,621  2.62$11,621
Non-interest bearing deposits$145,004    $186,821   
Other liabilities$3,715    $3,569   
Stockholder’s equity$76,049    $78,073   
Total Liabilities and Stockholder’s Equity$928,780    $878,324   
Cost of funds 2.54   0.46 
Net interest margin 2.65   2.79 
        
*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.