NASHVILLE, Tenn., Oct. 24, 2019 (GLOBE NEWSWIRE) -- CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) reported net income of $6.47 million, or $0.35 per share on a fully diluted basis, for the three months ended September 30, 2019, compared to net income of $3.66 million, or $0.28 per share on a fully diluted basis, for the three months ended September 30, 2018.  Operating(1) net income was $6.60 million, or $0.36 per share on a fully diluted basis, for the three months ended September 30, 2019, compared to $4.06 million, or $0.31 per share on a fully diluted basis, for the three months ended September 30, 2018. 

“I am pleased with our third quarter results,” said Timothy K. Schools, President and Chief Executive Officer. “We continue to experience strong credit metrics, our mortgage and Tri-Net businesses performed very well, and we are approaching the first anniversary of our acquisition of Athens Federal.  Additionally, our former largest shareholder was able to successfully exit their position, as the life of the fund this investment was held in came to an end, creating increased liquidity for our remaining shareholders.  As we look ahead, we will be working to improve upon our loan production and deposit gathering capabilities as we navigate through a period of increased loan prepayments and net interest margin pressure.”

Soundness

  • Non-performing assets as a percentage of total assets were 0.13% at September 30, 2019 compared to 0.40% at September 30, 2018.
  • Annualized net charge-offs to average loans were -0.01% for the three months ended September 30, 2019 compared to -0.01% for the same period in 2018.
  • The total risk based capital ratio was 13.46% at September 30, 2019 compared to 12.62% at September 30, 2018.

Profitability

Operating measures exclude non-recurring merger-related expenses unrelated to CapStar’s normal operations.

  • Operating annualized return on average assets for the three months ended September 30, 2019 was 1.31% compared to 1.13% for the same period in 2018.
  • Operating annualized return on average tangible equity for the three months ended September 30, 2019 was 11.83% compared to 10.72% for the same period in 2018.
  • Net interest margin for the three months ended September 30, 2019 was 3.66% compared to 3.35% for the same period in 2018.
  • The operating efficiency ratio for the three months ended September 30, 2019 was 64.08% compared to 64.56% 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.

“With the FOMC cutting rates for the first time since 2008, we experienced 2 basis points of net interest margin compression compared to the second quarter,” said Rob Anderson Chief Financial Officer and Chief Administrative Officer of CapStar. “Elevated loan fees helped offset the decline in variable rate loan yields, but yields on newly originated loans remain above our portfolio average.  Further, our deposit costs are down slightly due to rate adjustments made late in the quarter and our associates continue to meet with customers to reset rates lower,” continued Mr. Anderson. “On another positive note, our salesforce was able to grow non-interest bearing deposit accounts by 25.1% on an annualized basis from the second quarter.”

Growth

  • Operating EPS on a fully diluted basis increased 16.1% to $0.36 for the quarter ended September 30, 2019, compared to $0.31 on a fully diluted basis for the same period in 2018.
  • Average gross loans for the quarter ended September 30, 2019 increased 35.1% to $1.45 billion, compared to $1.07 billion for the same period in 2018.
    • Excluding Day 1 loans from Athens, organic average loan growth was 2.9% year-over-year.
  • Average deposits for the quarter ended September 30, 2019 increased 48.6% to $1.70 billion, compared to $1.15 billion for the same period in 2018.
    • Excluding Day 1 deposits from Athens, organic average deposit growth was 17.9% year-over-year.

Dividend

On October 24, 2019, the board of directors of CapStar approved a quarterly dividend of $0.05 per common share that will be paid on November 22, 2019 to shareholders of record of CapStar’s capital stock as of the close of business on November 8, 2019.

Conference Call and Webcast Information

CapStar will host a conference call and webcast at 8:30 a.m. Central Time on Friday October 25, 2019.  During the call, management will review the third quarter results and operational highlights.  Interested parties may listen to the call by dialing (844) 412-1002.  The conference ID number is 5171609.  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 September 30, 2019, on a consolidated basis, CapStar had total assets of $2.03 billion, gross loans of $1.41 billion, total deposits of $1.73 billion, and shareholders’ equity of $268.08 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 a projected increase in liquidity for our shareholders, improvements in our loan production and deposit gathering capabilities, 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)

Third Quarter 2019 Earnings Release

  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2019  2018  2019  2018 
Interest income:                
Loans, including fees $21,005  $14,167  $62,596  $40,197 
Securities:                
Taxable  1,028   951   3,540   2,775 
Tax-exempt  354   248   1,093   784 
Federal funds sold  1   17   26   56 
Restricted equity securities  183   132   584   389 
Interest-bearing deposits in financial institutions  645   267   1,502   679 
Total interest income  23,216   15,782   69,341   44,880 
Interest expense:                
Interest-bearing deposits  2,102   1,146   5,523   2,793 
Savings and money market accounts  1,944   1,409   5,445   3,827 
Time deposits  1,887   985   5,917   2,468 
Federal funds purchased     1   4   3 
Securities sold under agreements to repurchase        5    
Federal Home Loan Bank advances  127   698   1,281   1,813 
Total interest expense  6,060   4,239   18,175   10,904 
Net interest income  17,156   11,543   51,166   33,976 
Provision for loan losses  (125)  481   761   1,328 
Net interest income after provision for loan losses  17,281   11,062   50,405   32,648 
Noninterest income:                
Treasury management and other deposit service charges  788   528   2,399   1,357 
Net gain (loss) on sale of securities     (1)  (108)  2 
Tri-Net fees  847   373   2,511   1,227 
Mortgage banking income  2,679   1,634   7,151   4,329 
Other noninterest income  2,474   684   6,602   2,157 
Total noninterest income  6,788   3,218   18,555   9,072 
Noninterest expense:                
Salaries and employee benefits  9,229   6,514   26,224   19,111 
Data processing and software  1,790   803   5,126   2,411 
Professional fees  528   255   1,571   1,074 
Occupancy  858   544   2,550   1,600 
Equipment  1,012   520   2,890   1,661 
Regulatory fees  18   228   564   664 
Merger related expenses  187   540   2,491   875 
Amortization of intangibles  408   3   1,258   23 
Other operating  1,501   663   4,054   2,236 
Total noninterest expense  15,531   10,070   46,728   29,655 
Income before income taxes  8,538   4,210   22,232   12,065 
Income tax expense  2,072   554   5,231   1,702 
Net income $6,466  $3,656  $17,001  $10,363 
Per share information:                
Basic net income per share of common stock $0.36  $0.30  $0.96  $0.87 
Diluted net income per share of common stock $0.35  $0.28  $0.91  $0.79 
Weighted average shares outstanding:                
Basic  17,741,778   12,040,229   17,729,518   11,851,476 
Diluted  18,532,479   13,113,775   18,670,280   13,052,758 
                 

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

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

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

Third Quarter 2019 Earnings Release

  Five Quarter Comparison 
  9/30/19  6/30/19  3/31/19  12/31/18  9/30/18 
Income Statement Data:                    
Net interest income $17,156  $17,008  $17,002  $17,716  $11,543 
Provision for loan losses  (125)     886   1,514   481 
Net interest income after provision for loan losses  17,281   17,008   16,116   16,202   11,062 
Treasury management and other deposit service charges  788   813   798   793   528 
Net gain (loss) on sale of securities     (121)  12   1   (1)
Tri-Net fees  847   1,024   641   276   373 
Mortgage banking income  2,679   3,087   1,385   1,324   1,634 
Other noninterest income  2,474   2,229   1,899   3,993   684 
Total noninterest income  6,788   7,032   4,735   6,387   3,218 
Salaries and employee benefits  9,229   8,563   8,432   9,475   6,514 
Data processing and software  1,790   1,862   1,474   1,424   803 
Professional fees  528   501   543   534   255 
Occupancy  858   809   883   736   544 
Equipment  1,012   1,026   852   810   520 
Regulatory fees  18   272   274   364   228 
Merger related expenses  187   1,711   594   8,929   540 
Amortization of intangibles  408   419   430   442   3 
Other operating  1,501   1,307   1,243   1,118   663 
Total noninterest expense  15,531   16,470   14,725   23,832   10,070 
Net income (loss) before income tax expense  8,538   7,570   6,126   (1,243)  4,210 
Income tax (benefit) expense  2,072   1,814   1,346   (535)  554 
Net income (loss) $6,466  $5,756  $4,780  $(708) $3,656 
Weighted average shares - basic  17,741,778   17,663,992   17,783,239   17,509,525   12,040,229 
Weighted average shares - diluted  18,532,479   18,650,706   18,830,933   18,716,562   13,113,775 
Net income (loss) per share, basic $0.36  $0.33  $0.27  $(0.04) $0.30 
Net income (loss) per share, diluted  0.35   0.31   0.25   (0.04)  0.28 
Balance Sheet Data (at period end):                    
Cash and cash equivalents $154,021  $156,085  $120,321  $105,443  $52,589 
Securities available-for-sale  203,500   194,957   233,691   243,808   187,469 
Securities held-to-maturity  3,319   3,721   3,727   3,734   3,740 
Loans held for sale  129,613   89,629   72,870   57,618   50,499 
Total loans  1,411,768   1,440,617   1,467,786   1,429,794   1,073,870 
Allowance for loan losses  (12,828)  (12,903)  (12,959)  (12,113)  (15,218)
Total assets  2,033,911   2,018,421   2,035,811   1,963,883   1,416,907 
Non-interest-bearing deposits  352,266   326,550   312,597   289,552   239,792 
Interest-bearing deposits  1,379,497   1,396,220   1,366,205   1,280,456   886,611 
Federal Home Loan Bank advances  10,000   10,000   75,000   125,000   125,000 
Total liabilities  1,765,829   1,755,757   1,776,060   1,709,504   1,259,397 
Shareholders' equity $268,082  $262,664  $259,751  $254,379  $157,510 
Total shares of common stock outstanding  18,343,403   17,561,476   17,765,124   17,724,721   12,125,122 
Total shares of preferred stock outstanding     878,048   878,048   878,048   878,048 
Book value per share of common stock $14.61  $14.44  $14.11  $13.84  $12.25 
Tangible book value per share of common stock*  12.17   11.87   11.55   11.25   11.74 
Market value per share of common stock $16.58  $15.15  $14.44  $14.73  $16.72 
Capital ratios:                    
Total risk based capital  13.46%  13.29%  12.64%  12.84%  12.62%
Tier 1 risk based capital  12.71%  12.53%  11.90%  12.13%  11.49%
Common equity tier 1 capital  12.71%  12.01%  11.40%  11.61%  10.83%
Leverage  11.24%  11.01%  10.97%  11.06%  11.02%

_____________________
*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 release.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

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

Third Quarter 2019 Earnings Release

  Five Quarter Comparison 
  9/30/19  6/30/19  3/31/19  12/31/18  9/30/18 
Average Balance Sheet Data:                    
Cash and cash equivalents $129,114  $93,523  $83,689  $83,560  $62,787 
Investment securities  211,460   228,283   251,631   256,595   196,031 
Loans held for sale  101,835   91,585   66,880   52,131   54,701 
Loans  1,445,755   1,469,210   1,461,696   1,439,652   1,070,060 
Assets  2,005,950   2,004,207   1,988,478   1,940,991   1,421,873 
Interest bearing deposits  1,370,988   1,364,211   1,299,205   1,271,602   913,534 
Deposits  1,704,873   1,678,240   1,588,317   1,579,250   1,147,274 
Federal Home Loan Bank advances  12,174   42,088   117,278   102,304   109,728 
Liabilities  1,739,509   1,743,010   1,731,373   1,695,181   1,265,610 
Shareholders' equity  266,441   261,197   257,105   245,811   156,264 
Performance Ratios:                    
Annualized return on average assets  1.28%  1.15%  0.97%  (0.14)%  1.02%
Annualized return on average equity  9.63%  8.84%  7.54%  (1.14)%  9.28%
Net interest margin (1)  3.66%  3.68%  3.75%  3.89%  3.35%
Annualized Noninterest income to average assets  1.34%  1.41%  0.97%  1.31%  0.90%
Efficiency ratio  64.87%  68.51%  67.74%  98.88%  68.22%
Loans by Type (at period end):                    
Commercial and industrial $382,816  $404,745  $419,941  $404,600  $398,626 
Commercial real estate - owner occupied  169,370   173,316   170,558   141,931   117,904 
Commercial real estate - non-owner occupied  407,378   421,496   403,443   408,515   286,848 
Construction and development  132,222   123,901   162,237   174,670   129,799 
Consumer real estate  254,736   255,043   248,943   253,562   112,957 
Consumer  29,059   26,704   26,241   25,615   8,274 
Other  36,187   35,412   36,423   20,901   19,462 
Asset Quality Data:                    
Allowance for loan losses to total loans  0.91%  0.90%  0.88%  0.85%  1.42%
Allowance for loan losses to non-performing loans  754%  894%  757%  583%  271%
Nonaccrual loans $1,701  $1,443  $1,712  $2,078  $5,610 
Troubled debt restructurings  2,725   1,238   1,255   1,391   1,146 
Loans - over 89 days past due and accruing  551   302   -   214   215 
Total non-performing loans  1,701   1,443   1,712   2,078   5,610 
OREO and repossessed assets  914   914   1,038   988   - 
Total non-performing assets  2,615   2,357   2,750   3,066   5,610 
Non-performing loans to total loans  0.12%  0.10%  0.12%  0.15%  0.52%
Non-performing assets to total assets  0.13%  0.12%  0.14%  0.16%  0.40%
Non-performing assets to total loans and OREO  0.19%  0.16%  0.19%  0.21%  0.52%
Annualized net charge-offs (recoveries) to average loans  (0.01)%  0.02%  0.01%  1.27%  (0.01)%
Net charge-offs (recoveries) $(50) $56  $40  $4,620  $(32)
Interest Rates and Yields:                    
Loans  5.48%  5.44%  5.49%  5.49%  5.00%
Securities (1)  3.14%  3.22%  3.20%  3.30%  2.85%
Total interest-earning assets (1)  4.95%  5.00%  5.06%  5.02%  4.58%
Deposits  1.38%  1.39%  1.31%  1.12%  1.22%
Borrowings and repurchase agreements  4.12%  3.09%  2.85%  2.76%  2.53%
Total interest-bearing liabilities  1.74%  1.75%  1.71%  1.50%  1.64%
Other Information:                    
Full-time equivalent employees  290   290   289   286   185 

_____________________

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

(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)

Third Quarter 2019 Earnings Release

  For the Three Months Ended September 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) $1,445,755  $19,955   5.48% $1,070,060  $13,484   5.00%
Loans held for sale  101,835   1,050   4.09%  54,701   683   4.96%
Securities:                        
Taxable investment securities (2)  160,528   1,211   3.02%  154,570   1,083   2.80%
Investment securities exempt from
  federal income tax (3)
  50,932   354   3.52%  41,461   248   3.03%
Total securities  211,460   1,565   3.14%  196,031   1,331   2.85%
Cash balances in other banks  110,690   645   2.31%  50,844   267   2.08%
Funds sold  144   1   3.46%  2,475   17   2.73%
Total interest-earning assets  1,869,884   23,216   4.95%  1,374,111   15,782   4.58%
Noninterest-earning assets  136,066           47,762         
Total assets $2,005,950          $1,421,873         
Interest-Bearing Liabilities                        
Interest-bearing deposits:                        
Interest-bearing transaction accounts $527,759   2,102   1.58% $318,586   1,146   1.43%
Savings and money market deposits  494,183   1,944   1.56%  391,107   1,409   1.43%
Time deposits  349,046   1,887   2.14%  203,841   985   1.92%
Total interest-bearing deposits  1,370,988   5,933   1.72%  913,534   3,540   1.54%
Borrowings and repurchase agreements  12,174   127   4.12%  109,891   699   2.53%
Total interest-bearing liabilities  1,383,162   6,060   1.74%  1,023,425   4,239   1.64%
Noninterest-bearing deposits  333,885           233,739         
Total funding sources  1,717,047           1,257,164         
Noninterest-bearing liabilities  22,462           8,445         
Shareholders’ equity  266,441           156,264         
Total liabilities and shareholders’ equity $2,005,950          $1,421,873         
Net interest spread (4)          3.21%          2.93%
Net interest income/margin (5)     $17,156   3.66%     $11,543   3.35%
                         

                                               

(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 release.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

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

Third Quarter 2019 Earnings Release

  Three Months Ended 
  September 30,
2019
  June 30,
2019
  March 31,
2019
  December 31,
2018
  September 30,
2018
 
Operating net income:                    
Net income (loss) $6,466  $5,756  $4,780  $(708) $3,656 
Add:  merger related expenses  187   1,711   594   8,929   540 
Less: income tax impact of merger related expenses  (49)  (447)  (155)  (1,985)  (141)
Operating net income $6,604  $7,020  $5,219  $6,236  $4,055 
                     
Operating diluted net income per
  share of common stock:
                    
Operating net income $6,604  $7,020  $5,219  $6,236  $4,055 
Weighted average shares - diluted  18,532,479   18,650,706   18,830,933   18,716,562   13,113,775 
Operating diluted net income
  per share of common stock
 $0.36  $0.38  $0.28  $0.33  $0.31 
                     
Operating annualized return on average assets:                    
Operating net income $6,604  $7,020  $5,219  $6,236  $4,055 
Average assets $2,005,950  $2,004,207  $1,988,478  $1,940,991  $1,421,873 
Operating annualized return on
  average assets
  1.31%  1.40%  1.06%  1.27%  1.13%
                     
Operating annualized return on
  average tangible equity:
                    
Average total shareholders' equity $266,441  $261,197  $257,105  $245,811  $156,264 
Less: average intangible assets  (45,050)  (45,456)  (45,890)  (45,687)  (6,220)
Average tangible equity  221,391   215,741   211,215   200,124   150,044 
Operating net income $6,604  $7,020  $5,219  $6,236  $4,055 
Operating annualized return on
  average tangible equity
  11.83%  13.05%  10.02%  12.36%  10.72%
                     
Operating efficiency ratio:                    
Total noninterest expense $15,531  $16,470  $14,725  $23,832  $10,070 
Less:  merger related expenses  (187)  (1,711)  (594)  (8,929)  (540)
Total operating noninterest expense  15,344   14,759   14,131   14,903   9,530 
Net interest income  17,156   17,008   17,002   17,716   11,543 
Total noninterest income  6,788   7,032   4,735   6,387   3,218 
Total revenues $23,944  $24,040  $21,737  $24,103  $14,761 
Operating efficiency ratio:  64.08%  61.39%  65.01%  61.83%  64.56%
                     
  September 30,
2019
  June 30,
2019
  March 31,
2019
  December 31,
2018
  September 30,
2018
 
Tangible Equity:                    
Total shareholders' equity $268,082  $262,664  $259,751  $254,379  $157,510 
Less: intangible assets  (44,790)  (45,199)  (45,618)  (46,048)  (6,219)
Tangible equity $223,292  $217,465  $214,133  $208,331  $151,291 
                     
Tangible Common Equity:                    
Tangible equity $223,292  $217,465  $214,133  $208,331  $151,291 
Less: preferred equity     (9,000)  (9,000)  (9,000)  (9,000)
Tangible common equity $223,292  $208,465  $205,133  $199,331  $142,291 
                     
Tangible Book Value per Share of Common Stock:                    
Tangible common equity $223,292  $208,465  $205,133  $199,331  $142,291 
Total shares of common stock outstanding  18,343,403   17,561,476   17,765,124   17,724,721   12,125,122 
Tangible book value per share of common stock $12.17  $11.87  $11.55  $11.25  $11.74 
                     


CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

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

Third Quarter 2019 Earnings Release

  Nine Months Ended 
  September 30, 2019  September 30, 2018 
Operating net income:        
Net income $17,001  $10,363 
Add:  merger related expenses  2,491   875 
Less: income tax impact of merger related expenses  (651)  (229)
Operating net income $18,841  $11,009 
         
Operating diluted net income per
  share of common stock:
        
Operating net income $18,841  $11,009 
Weighted average shares - diluted  18,670,280   13,052,758 
Operating diluted net income
  per share of common stock
 $1.01  $0.84 
         
Operating annualized return on average assets:        
Operating net income $18,841  $11,009 
Average assets $1,999,609  $1,390,046 
Operating annualized return on
  average assets
  1.26%  1.06%
         
Operating annualized return on
  average tangible equity:
        
Average total shareholders' equity $261,615  $152,054 
Less: average intangible assets  (45,462)  (6,229)
Average tangible equity  216,153   145,825 
Operating net income $18,841  $11,009 
Operating annualized return on
  average tangible equity
  11.65%  10.09%
         
Operating efficiency ratio:        
Total noninterest expense $46,728  $29,655 
Less:  merger related expenses  (2,491)  (875)
Total operating noninterest expense  44,237   28,780 
Net interest income  51,166   33,976 
Total noninterest income  18,555   9,072 
Total revenues $69,721  $43,048 
Operating efficiency ratio:  63.45%  66.86%