CapStar Financial Holdings, Inc. Reports Second Quarter 2020 Results

Strong Pre-tax Pre-provision Income led by Record Mortgage Results

| Source: CapStar Financial Holdings, Inc. CapStar Financial Holdings, Inc.

NASHVILLE, Tenn., July 23, 2020 (GLOBE NEWSWIRE) -- CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) today reported second quarter net income of $6.2 million and pre-tax pre-provision income of $9.6 million.  Diluted earnings per share were $0.34, an increase of $0.03 from the second quarter of 2019. Excluding merger-related charges, diluted operating(1) earnings per share were $0.36, a decline of $0.02 from the second quarter of 2019. Return on average assets and return on average equity for the second quarter of 2020 were 1.06% and 8.83%, respectively.  On an operating basis, return on average assets was 1.11% and return on average tangible common equity was 11.02%.  Net income for the quarter included provision for loan losses of $1.6 million, severance expense of $1.4 million, and merger related expenses of $448,000.

“I am proud of the CapStar team for their remarkable dedication during an extremely challenging operating environment,” said Timothy K. Schools, CapStar’s president and CEO.  “In keeping with our vision, mission and values, we have been unwavering in our commitment to support our employees, clients and communities through the public health crisis. Our non-financial center work force mobilized to working 100% remotely and continues to provide outstanding service. Importantly, we prioritized client assistance by offering loan deferrals and took a leadership position in facilitating PPP loans to protect all local business – both clients and non-clients – as they navigate the challenges presented by COVID-19.  Our inclusive and response-driven approach is supporting our communities and presents the prospect for many new and expanded relationships.”

“In the second quarter, we delivered solid financial results with strong pre-tax pre-provision revenue led by our mortgage and Tri-Net divisions,” continued Schools.  “During the quarter, we saw a significant rise in both loans related to PPP and in deposits which will bring short-term compression to our net interest margin and we continued to actively monitor our portfolio to identify potential weaknesses.  On July 1, we completed our merger with The Bank of Waynesboro and The First National Bank of Manchester, creating an approximately $3 billion financial institution which will enhance our funding profile, diversify our loan portfolio, expand our geographic reach, and improve our net interest margin, efficiency ratio, and return on assets."

Soundness

  • Allowance for loan losses to total loans was 1.32% at June 30, 2020 compared to 0.90% at June 30, 2019.
  • Annualized net charge-offs to average loans were 0.18% for the three months ended June 30, 2020 compared to 0.02% for the same period in 2019.
  • Non-performing assets to total loans and OREO were 0.20% at June 30, 2020 compared to 0.16% at June 30, 2019.
  • The leverage ratio was 10.08% at June 30, 2020 compared to 11.01% at June 30, 2019.
  • The total risk based capital ratio was 16.76% at June 30, 2020 compared to 13.29% at June 30, 2019.                                                            

Profitability

  • Operating annualized return on average assets for the three months ended June 30, 2020 was 1.11% compared to 1.40% for the same period in 2019.
  • Operating annualized return on average tangible equity for the three months ended June 30, 2020 was 11.02% compared to 13.05% for the same period in 2019.
  • Net interest margin for the three months ended June 30, 2020 was 3.23% compared to 3.68% for the same period in 2019; approximately 17 bps of the decline is attributed to the impact of PPP loans and an increase in cash due to significant deposit growth during the quarter.
  • The operating efficiency ratio for the three months ended June 30, 2020 was 64.87% compared to 61.39% for the same period in 2019.
  • Operating annualized pre-tax pre-provision income to average assets for the three months ended June 30, 2020 was 1.71% compared to 1.86% for the same period in 2019.

Growth

  • Average deposits for the quarter ended June 30, 2020 increased 21.1% to $2.03 billion, compared to $1.68 billion for the same period in 2019.
  • Average gross loans for the quarter ended June 30, 2020 increased 6.3% to $1.56 billion, compared to $1.47 billion for the same period in 2019.
  • Pre-tax pre-provision earnings for the quarter ended June 30, 2020 increased 26.3% to $9.6 million, compared to $7.6 million for the quarter ended June 30, 2019.
  • Tangible book value per share for the quarter ended June 30, 2020 increased 9.7% to $13.02, compared to $11.87 for the quarter ended June 30, 2019.

Dividend

On July 23, 2020, the board of directors of CapStar approved a quarterly dividend of $0.05 per common share that will be paid on August 27, 2020 to shareholders of record of CapStar’s common stock as of the close of business on August 13, 2020.

Conference Call and Webcast Information

CapStar will host a conference call and webcast at 9:00 a.m. Central Time on Friday, July 24, 2020. During the call, management will review the second quarter results and operational highlights. Interested parties may listen to the call by dialing (844) 412-1002. The conference ID number is 4376815. 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 June 30, 2020, on a consolidated basis, CapStar had total assets of $2.45 billion, gross loans of $1.59 billion, total deposits of $2.10 billion, and shareholders’ equity of $282.0 million. Visit www.capstarbank.com for more information.

FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements, as defined by federal securities laws, including statements about CapStar and its financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of our operations and future financial performance. Our operations and such performance involves risks and uncertainties, including but in no way limited to the effect of the COVID-19 pandemic, that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to CapStar’s filings with the Securities and Exchange Commission, including its 2019 Annual Report on Form 10-K under the sections entitled “Forward-Looking Statements” and “Item 1A Risk Factors.”  Forward-looking statements speak only as of the date they are made, and except as otherwise required by applicable law, we undertake no obligation to update or revise forward-looking statements.

NON-GAAP MEASURES
This release includes financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations. Such measures include: “Efficiency ratio – operating,” “Expenses – operating,” “Earnings per share – operating,” “Diluted earnings per share – operating,” “Tangible book value per share,” “Return on common equity – operating,” “Return on tangible common equity – operating,” “Return on assets – operating,” and “Tangible common equity to tangible assets.”

Management has included these non-GAAP measures because it believes these measures may provide useful supplemental information for evaluating CapStar’s underlying performance trends. Further, management uses these measures in managing and evaluating CapStar’s business and intends to refer to them in discussions about our operations and performance. Operating performance measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in the ‘Non-GAAP Reconciliation Tables’ included in the exhibits to this presentation.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Income (unaudited) (dollars in thousands, except share data)
Second quarter 2020 Earnings Release

  Three Months Ended  Six Months Ended 
  June 30,  June 30, 
  2020  2019  2020  2019 
Interest income:                
Loans, including fees $19,086  $20,999  $38,823  $41,591 
Securities:                
Taxable  1,096   1,165   2,272   2,512 
Tax-exempt  312   363   633   739 
Federal funds sold  —   6   —   25 
Restricted equity securities  140   214   282   401 
Interest-bearing deposits in financial institutions  107   411   469   857 
Total interest income  20,741   23,158   42,479   46,125 
Interest expense:                
Interest-bearing deposits  831   1,827   2,732   3,420 
Savings and money market accounts  731   1,782   2,283   3,500 
Time deposits  1,416   2,217   2,897   4,030 
Federal funds purchased  —   —   —   4 
Securities sold under agreements to repurchase  —   —   —   5 
Federal Home Loan Bank advances  88   324   231   1,156 
Total interest expense  3,066   6,150   8,143   12,115 
Net interest income  17,675   17,008   34,336   34,010 
Provision for loan losses  1,624   —   9,177   886 
Net interest income after provision for loan losses  16,051   17,008   25,159   33,124 
Noninterest income:                
Treasury management and other deposit service charges  691   813   1,466   1,611 
Net gain (loss) on sale of securities  13   (121)  40   (108)
Tri-Net fees  1,260   1,024   1,860   1,664 
Mortgage banking income  7,123   3,087   9,376   4,472 
Wealth management fees  374   334   781   639 
Interchange and debit card transaction fees  729   991   1,454   1,569 
Other noninterest income  633   904   1,720   1,920 
Total noninterest income  10,823   7,032   16,697   11,767 
Noninterest expense:                
Salaries and employee benefits  12,305   8,563   20,307   16,995 
Data processing and software  2,100   1,862   3,964   3,336 
Professional fees  581   501   1,216   1,043 
Occupancy  797   809   1,616   1,692 
Equipment  680   1,026   1,431   1,878 
Regulatory fees  333   272   496   546 
Merger related expenses  448   1,711   738   2,305 
Amortization of intangibles  375   419   761   850 
Other operating  1,315   1,307   2,616   2,551 
Total noninterest expense  18,934   16,470   33,145   31,196 
Income before income taxes  7,940   7,570   8,711   13,695 
Income tax expense  1,759   1,814   1,184   3,160 
Net income $6,181  $5,756  $7,527  $10,535 
Per share information:                
Basic net income per share of common stock $0.34  $0.33  $0.41  $0.59 
Diluted net income per share of common stock $0.34  $0.31  $0.41  $0.56 
Weighted average shares outstanding:                
Basic  18,307,083   17,663,992   18,349,998   17,723,286 
Diluted  18,320,006   18,650,706   18,381,866   18,740,322 

This information is preliminary and based on CapStar data available at the time of this earnings release.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)
Second quarter 2020 Earnings Release

  Five Quarter Comparison 
  6/30/20  3/31/20  12/31/19  9/30/19  6/30/19 
Income Statement Data:                    
Net interest income $17,675  $16,661  $16,581  $17,156  $17,008 
Provision for loan losses  1,624   7,553   —   (125)  — 
Net interest income after provision for loan losses  16,051   9,108   16,581   17,281   17,008 
Treasury management and other deposit service charges  691   775   736   788   813 
Net gain (loss) on sale of securities  13   27   9   —   (121)
Tri-Net fees  1,260   599   274   847   1,024 
Mortgage banking income  7,123   2,253   2,316   2,679   3,087 
Wealth management fees  374   407   407   379   334 
Interchange and debit card transaction fees  729   724   928   754   991 
Other noninterest income  633   1,089   1,049   1,341   904 
Total noninterest income  10,823   5,874   5,719   6,788   7,032 
Salaries and employee benefits  12,305   8,002   9,318   9,229   8,563 
Data processing and software  2,100   1,864   1,835   1,790   1,862 
Professional fees  581   636   531   528   501 
Occupancy  797   820   795   858   809 
Equipment  680   751   834   1,012   1,026 
Regulatory fees  333   163   28   18   272 
Merger related expenses  448   290   163   187   1,711 
Amortization of intangibles  375   386   397   408   419 
Other operating  1,315   1,299   1,365   1,501   1,307 
Total noninterest expense  18,934   14,211   15,266   15,531   16,470 
Net income before income tax expense  7,940   771   7,034   8,538   7,570 
Income tax (benefit) expense  1,759   (575)  1,613   2,072   1,814 
Net income $6,181  $1,346  $5,421  $6,466  $5,756 
Weighted average shares - basic  18,307,083   18,392,913   18,350,994   17,741,778   17,663,992 
Weighted average shares - diluted  18,320,006   18,443,725   18,443,916   18,532,479   18,650,706 
Net income per share, basic $0.34  $0.07  $0.30  $0.36  $0.33 
Net income per share, diluted  0.34   0.07   0.29   0.35   0.31 
Balance Sheet Data (at period end):                    
Cash and cash equivalents $368,820  $91,450  $101,269  $154,021  $156,085 
Securities available-for-sale  223,034   219,213   213,129   203,500   194,957 
Securities held-to-maturity  2,699   3,306   3,313   3,319   3,721 
Loans held for sale  129,807   186,937   168,222   129,613   89,629 
Total loans  1,592,725   1,446,835   1,420,102   1,411,768   1,440,617 
Allowance for loan losses  (21,035)  (20,114)  (12,604)  (12,828)  (12,903)
Total assets  2,445,172   2,072,585   2,037,201   2,033,911   2,018,421 
Non-interest-bearing deposits  546,974   442,789   312,096   352,266   326,550 
Interest-bearing deposits  1,548,591   1,320,920   1,417,355   1,379,497   1,396,220 
Federal Home Loan Bank advances and other borrowings  39,464   10,000   10,000   10,000   10,000 
Total liabilities  2,163,222   1,796,795   1,764,155   1,765,829   1,755,757 
Shareholders' equity $281,950  $275,790  $273,046  $268,082  $262,664 
Total shares of common stock outstanding  18,302,188   18,307,802   18,361,922   18,343,403   17,561,476 
Total shares of preferred stock outstanding  —   —   —   —   878,048 
Book value per share of common stock $15.41  $15.06  $14.87  $14.61  $14.44 
Tangible book value per share of common stock*  13.02   12.66   12.45   12.17   11.87 
Market value per share of common stock $12.00  $9.89  $16.65  $16.58  $15.15 
Capital ratios:                    
Total risk based capital  16.76%  13.68%  13.45%  13.46%  13.29%
Tier 1 risk based capital  13.76%  12.56%  12.73%  12.71%  12.53%
Common equity tier 1 capital  13.76%  12.56%  12.73%  12.71%  12.01%
Leverage  10.08%  11.23%  11.37%  11.24%  11.01%

_____________________
*This metric is a non-GAAP financial measure.  See Non-GAAP disclaimer in this earnings release and below for discussion and reconciliation to the most directly comparable GAAP financial measure.
This information is preliminary and based on CapStar data available at the time of this earnings release.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)
Second quarter 2020 Earnings Release

   Five Quarter Comparison 
  6/30/20  3/31/20  12/31/19  9/30/19  6/30/19 
Average Balance Sheet Data:                    
Cash and cash equivalents $257,709  $114,272  $115,100  $129,114  $93,523 
Investment securities  238,762   226,537   225,265   211,460   228,283 
Loans held for sale  176,193   180,401   140,731   101,835   91,585 
Loans  1,560,626   1,421,256   1,431,027   1,445,755   1,469,210 
Assets  2,350,021   2,059,306   2,030,231   2,005,950   2,004,207 
Interest bearing deposits  1,519,877   1,411,666   1,388,496   1,370,988   1,364,211 
Deposits  2,031,924   1,735,635   1,711,021   1,704,873   1,678,240 
Federal Home Loan Bank advances and other borrowings  10,966   20,989   22,391   12,174   42,088 
Liabilities  2,068,408   1,780,756   1,758,663   1,739,509   1,743,010 
Shareholders' equity  281,614   278,550   271,568   266,441   261,197 
Performance Ratios:                    
Annualized return on average assets  1.06%  0.26%  1.06%  1.28%  1.15%
Annualized return on average equity  8.83%  1.94%  7.92%  9.63%  8.84%
Net interest margin (1)  3.23%  3.50%  3.49%  3.66%  3.68%
Annualized Noninterest income to average assets  1.85%  1.15%  1.12%  1.34%  1.41%
Efficiency ratio  66.44%  63.06%  68.46%  64.87%  68.51%
Loans by Type (at period end):                    
Commercial and industrial $621,541  $447,311  $394,408  $382,816  $404,745 
Commercial real estate - owner occupied  147,682   166,652   172,456   169,370   173,316 
Commercial real estate - non-owner occupied  408,402   378,170   387,443   407,378   421,496 
Construction and development  117,830   141,087   143,111   132,222   123,901 
Consumer real estate  238,696   248,243   256,097   254,736   255,043 
Consumer  27,542   27,739   28,426   29,059   26,704 
Other  31,032   37,633   38,161   36,187   35,412 
Asset Quality Data:                    
Allowance for loan losses to total loans  1.32%  1.39%  0.89%  0.91%  0.90%
Allowance for loan losses to non-performing loans  705%  550%  861%  754%  894%
Nonaccrual loans $2,982  $3,658  $1,464  $1,701  $1,443 
Troubled debt restructurings  1,228   1,306   2,717   2,725   1,238 
Loans - over 89 days past due and accruing  639   399   38   551   302 
Total non-performing loans  2,982   3,658   1,464   1,701   1,443 
OREO and repossessed assets  147   147   1,044   914   914 
Total non-performing assets  3,129   3,805   2,508   2,615   2,357 
Non-performing loans to total loans  0.19%  0.25%  0.10%  0.12%  0.10%
Non-performing assets to total assets  0.13%  0.18%  0.12%  0.13%  0.12%
Non-performing assets to total loans and OREO  0.20%  0.26%  0.18%  0.19%  0.16%
Annualized net charge-offs (recoveries) to average loans  0.18%  0.01%  0.06%  (0.01)%  0.02%
Net charge-offs (recoveries) $703  $43  $224  $(50) $56 
Interest Rates and Yields:                    
Loans  4.50%  5.10%  5.24%  5.48%  5.44%
Securities (1)  2.73%  3.04%  3.00%  3.14%  3.22%
Total interest-earning assets (1)  3.78%  4.56%  4.67%  4.95%  5.00%
Deposits  0.59%  1.14%  1.27%  1.38%  1.39%
Borrowings and repurchase agreements  3.16%  2.77%  2.88%  4.12%  3.09%
Total interest-bearing liabilities  0.81%  1.43%  1.58%  1.74%  1.75%
Other Information:                    
Full-time equivalent employees  286   288   289   290   290 

_____________________

This information is preliminary and based on CapStar data available at the time of this earnings 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)
Second quarter 2020 Earnings Release

   For the Three Months Ended June 30, 
  2020  2019 
  Average
Outstanding
Balance		  Interest
Income/
Expense		  Average
Yield/
Rate		  Average
Outstanding
Balance		  Interest
Income/
Expense		  Average
Yield/
Rate		 
Interest-Earning Assets                        
Loans (1) $1,560,626  $17,459   4.50% $1,469,210  $19,931   5.44%
Loans held for sale  176,193   1,627   3.71%  91,585   1,068   4.68%
Securities:                        
Taxable investment securities (2)  194,876   1,236   2.54%  175,742   1,379   3.14%
Investment securities exempt from
  federal income tax (3)		  43,886   312   3.60%  52,541   363   3.50%
Total securities  238,762   1,548   2.73%  228,283   1,742   3.22%
Cash balances in other banks  237,738   107   0.18%  75,485   411   2.18%
Funds sold  1   —   1.27%  767   6   2.96%
Total interest-earning assets  2,213,320   20,741   3.78%  1,865,330   23,158   5.00%
Noninterest-earning assets  136,701           138,877         
Total assets $2,350,021          $2,004,207         
Interest-Bearing Liabilities                        
Interest-bearing deposits:                        
Interest-bearing transaction accounts $691,063   831   0.48% $467,326   1,827   1.57%
Savings and money market deposits  492,682   731   0.60%  479,012   1,782   1.49%
Time deposits  336,132   1,416   1.69%  417,873   2,217   2.13%
Total interest-bearing deposits  1,519,877   2,978   0.79%  1,364,211   5,826   1.71%
Borrowings and repurchase agreements  11,131   88   3.16%  42,117   324   3.09%
Total interest-bearing liabilities  1,531,008   3,066   0.81%  1,406,328   6,150   1.75%
Noninterest-bearing deposits  512,046           314,029         
Total funding sources  2,043,054           1,720,357         
Noninterest-bearing liabilities  25,353           22,653         
Shareholders’ equity  281,614           261,197         
Total liabilities and shareholders’ equity $2,350,021          $2,004,207         
Net interest spread (4)          2.98%          3.25%
Net interest income/margin (5)     $17,675   3.23%     $17,008   3.68%

                                               

  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 CapStar data available at the time of this earnings release.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)
Second quarter 2020 Earnings Release

  Three Months Ended 
  June 30,
2020		  March 31,
2020		  December 31,
2019		  September 30,
2019		  June 30,
2019		 
Operating net income:                    
Net income $6,181  $1,346  $5,421  $6,466  $5,756 
Add:  merger related expenses  448   290   163   187   1,711 
Less: income tax impact of merger related expenses  (117)  (76)  (43)  (49)  (447)
Operating net income $6,512  $1,560  $5,541  $6,604  $7,020 
                     
Operating diluted net income per
  share of common stock:		                    
Operating net income $6,512  $1,560  $5,541  $6,604  $7,020 
Weighted average shares - diluted  18,320,006   18,443,725   18,443,916   18,532,479   18,650,706 
Operating diluted net income
  per share of common stock		 $0.36  $0.08  $0.30  $0.36  $0.38 
                     
Operating annualized return on average assets:                    
Operating net income $6,512  $1,560  $5,541  $6,604  $7,020 
Average assets $2,350,021  $2,059,306  $2,030,231  $2,005,950  $2,004,207 
Operating annualized return on
  average assets		  1.11%  0.30%  1.08%  1.31%  1.40%
                     
Operating annualized return on
  average tangible equity:		                    
Average total shareholders' equity $281,614  $278,550  $271,568  $266,441  $261,197 
Less: average intangible assets  (43,871)  (44,253)  (44,646)  (45,050)  (45,456)
Average tangible equity  237,743   234,297   226,922   221,391   215,741 
Operating net income $6,512  $1,560  $5,541  $6,604  $7,020 
Operating annualized return on
  average tangible equity		  11.02%  2.68%  9.69%  11.83%  13.05%
                     
Operating efficiency ratio:                    
Total noninterest expense $18,934  $14,211  $15,266  $15,531  $16,470 
Less:  merger related expenses  (448)  (290)  (163)  (187)  (1,711)
Total operating noninterest expense  18,486   13,921   15,103   15,344   14,759 
Net interest income  17,675   16,661   16,581   17,156   17,008 
Total noninterest income  10,823   5,874   5,719   6,788   7,032 
Total revenues $28,498  $22,535  $22,300  $23,944  $24,040 
Operating efficiency ratio:  64.87%  61.78%  67.73%  64.08%  61.39%
                     
Operating annualized pre-tax pre-provision income to average assets:                    
Income before income taxes $7,940  $771  $7,034  $8,538  $7,570 
Add:  merger related expenses  448   290   163   187   1,711 
Add: provision for loan losses  1,624   7,553   —   (125)  — 
Operating pre-tax pre-provision income  10,012   8,614   7,197   8,600   9,281 
Average assets $2,350,021  $2,059,306  $2,030,231  $2,005,950  $2,004,207 
Operating annualized pre-tax pre-provision income to
average assets:		  1.71%  1.68%  1.41%  1.70%  1.86%
                     
  June 30,
2020		  March 31,
2020		  December 31,
2019		  September 30,
2019		  June 30,
2019		 
Tangible Equity:                    
Total shareholders' equity $281,950  $275,790  $273,046  $268,082  $262,664 
Less: intangible assets  (43,633)  (44,008)  (44,393)  (44,790)  (45,199)
Tangible equity $238,317  $231,782  $228,653  $223,292  $217,465 
                     
Tangible Common Equity:                    
Tangible equity $238,317  $231,782  $228,653  $223,292  $217,465 
Less: preferred equity  —   —   —   —   (9,000)
Tangible common equity $238,317  $231,782  $228,653  $223,292  $208,465 
                     
Tangible Book Value per Share of Common Stock:                    
Tangible common equity $238,317  $231,782  $228,653  $223,292  $208,465 
Total shares of common stock outstanding  18,302,188   18,307,802   18,361,922   18,343,403   17,561,476 
Tangible book value per share of common stock $13.02  $12.66  $12.45  $12.17  $11.87 


CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)
Second quarter 2020 Earnings Release

  Six Months Ended 
  June 30, 2020  June 30, 2019 
Operating net income:        
Net income $7,527  $10,535 
Add:  merger related expenses  738   2,305 
Less: income tax impact of merger related expenses  (193)  (603)
Operating net income $8,072  $12,237 
         
Operating diluted net income per
  share of common stock:		        
Operating net income $8,072  $12,237 
Weighted average shares - diluted  18,381,866   18,740,322 
Operating diluted net income
  per share of common stock		 $0.44  $0.65 
         
Operating annualized return on average assets:        
Operating net income $8,072  $12,237 
Average assets $2,204,663  $1,996,386 
Operating annualized return on
  average assets		  0.74%  1.24%
         
Operating annualized return on
  average tangible equity:		        
Average total shareholders' equity $280,082  $259,162 
Less: average intangible assets  (44,062)  (45,672)
Average tangible equity  236,020   213,490 
Operating net income $8,072  $12,237 
Operating annualized return on
  average tangible equity		  6.88%  11.56%
         
Operating efficiency ratio:        
Total noninterest expense $33,145  $31,196 
Less:  merger related expenses  (738)  (2,305)
Total operating noninterest expense  32,407   28,891 
Net interest income  34,336   34,010 
Total noninterest income  16,697   11,767 
Total revenues $51,033  $45,777 
  Operating efficiency ratio:  63.50%  63.11%


CONTACT

Mike Fowler
Chief Financial Officer
(615) 732-7404