CapStar Financial Holdings, Inc. Reports Year End 2020 Results

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

NASHVILLE, Tenn., Jan. 28, 2021 (GLOBE NEWSWIRE) -- CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) today reported net income of $9.7 million or $0.44 per diluted share, for the quarter ended December 31, 2020, compared with net income of $5.4 million or $0.29 per diluted share, for the quarter ended December 31, 2019. Annualized return on average assets and return on average equity for the quarter ended December 31, 2020 was 1.27% and 11.30%, respectively. Excluding fourth quarter merger-related charges of $2.1 million, operating(1) diluted earnings per share were $0.51, return on average assets was 1.48%, and return on average tangible equity was 15.38%.

For the year ended December 31, 2020, the company reported net income of $24.7 million or $1.22 per diluted share compared with net income of $22.4 million, or $1.20 per diluted share, for the year ended December 31, 2019. Return on average assets and return on average equity for the year ended December 31, 2020 was 0.94% and 9.55%, respectively. Excluding merger-related charges of $5.4 million, operating(1) diluted earnings per share were $1.42, return on average assets was 1.09%, and return on average tangible equity was 11.09%.

“I would like to thank our employees for their tireless work over the past year in helping our clients and communities,” said Timothy K. Schools, chief executive officer. “As a result of their tremendous efforts and our solid risk management culture in a challenging and uncertain operating environment, we are pleased to report strong 2020 and fourth quarter financial results, led by high performance in our mortgage and tri-net divisions. During the year, we made progress in advancing several strategic initiatives, including the continued refocus on providing core banking services to our local markets, integrating and expanding our recent East Tennessee expansion with the addition of Knoxville and completion of our FCB acquisition, and strengthening our balance sheet management capabilities. Importantly, as part of our mission, we made extra efforts to support our employees, clients, and communities as we all manage through the current pandemic. We are proud to have maintained full employment and compensation, offer flexible work programs, and participate in loan assistance and deferral programs. Together, with our client-centric banking model, stable and growing markets, and key strategic initiatives, we are optimistic about our future prospects and enhanced opportunities to serve our clients.”

Profitability

  • Annualized return on average assets for the three months ended December 31, 2020 was 1.27% compared to 1.06% for the same period in 2019. Operating(1) annualized return on average assets for the three months ended December 31, 2020 was 1.48% compared to 1.08% for the same period in 2019. Operating(1) annualized pre-tax pre-provision income to average assets for the three months ended December 31, 2020 was 1.93% compared to 1.41% for the same period in 2019.
  • Annualized return on average equity for the three months ended December 31, 2020 was 11.30% compared to 7.92% for the same period in 2019. Operating(1) annualized return on average tangible equity for the three months ended December 31, 2020 was 15.38% compared to 9.69% for the same period in 2019.
  • Net interest margin was 3.12% for the three months ended December 31, 2020 compared to 3.49% for the same period in 2019.
  • The efficiency ratio for the three months ended December 31, 2020 was 63.02% compared to 68.46% for the same period in 2019. The operating(1) efficiency ratio for the three months ended December 31, 2020 was 56.85% compared to 67.73% for the same period in 2019.

Growth

  • Pre-tax pre-provision earnings for the quarter ended December 31, 2020 increased 79% to $12.6 million, compared to $7.0 million for the quarter ended December 31, 2019.
  • End of period deposits for the quarter ended December 31, 2020 decreased $49.5 million or 8% annualized.
  • Excluding PPP loans, end of period loan growth for the quarter ended December 31, 2020, was $19.61 million or 5% annualized.
  • Tangible book value per share for the quarter ended December 31, 2020 increased 7% to $13.36, compared to $12.45 for the quarter ended December 31, 2019.

Soundness

  • The total risk-based capital ratio was 16.03% at December 31, 2020 compared to 13.45% at December 31, 2019.
  • The allowance for loan losses to total loans was 1.23% at December 31, 2020 compared to 0.89% at December 31, 2019. The allowance for loan losses plus the fair value mark on acquired loans to total loans, less PPP loans, was 1.57% at December 31, 2020 compared to 1.13% at December 31, 2019.
  • Non-performing assets to total loans and OREO were 0.28% at December 31, 2020 compared to 0.18% at December 31, 2019.
  • Annualized net charge offs to average loans were 0.02% for the three months ended December 31, 2020 compared to 0.06% for the same period in 2019.

Dividend

On January 28, 2021, the board of directors of CapStar approved a quarterly dividend of $0.05 per common share that will be paid on February 24, 2021 to shareholders of record of CapStar’s common stock as of the close of business on February 10, 2021.

Conference Call and Webcast Information

CapStar will host a conference call and webcast at 9:00 a.m. Central Time on Friday, January 29, 2021. 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 1963565. 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 December 31, 2020, on a consolidated basis, CapStar had total assets of $2.98 billion, total loans of $1.89 billion, total deposits of $2.57 billion, and shareholders’ equity of $343.49 million. Visit www.capstarbank.com for more information.

(1) Operating measures exclude merger-related expenses unrelated to CapStar’s normal operations. 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.

FORWARD-LOOKING STATEMENTS

All statements, other than statements of historical fact, included in this release and any oral statements made regarding the subject of this release, including in the conference call referenced herein, that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are “forward-looking statements“ within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1955. The words “expect“, “anticipate”, “intend”, “may”, “should”, “plan”, “believe”, “seek“, “estimate“ and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (I) deterioration in the financial condition of borrowers of the Company and its subsidiaries, resulting in significant increases in loan losses and provisions for those losses; (II) the effects of the emergence of widespread health emergencies or pandemics, including the magnitude and duration of the Covid-19 pandemic and its impact on general economic and financial market conditions and on the Company’s customer’s business, results of operations, asset quality and financial condition; (III) the ability to grow and retain low-cost, core deposits and retain large, uninsured deposits, including during times when the Company is seeking to lower rates it pays on deposits; (IV) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on the Company’s results, including as a result of compression to net interest margin; (V) fluctuations or differences in interest rates on loans or deposits from those that the Company is modeling or anticipating, including as a result of the Company’s inability to better match deposit rates with the changes in the short term rate environment, or that affect the yield curve; (VI) difficulties and delays in integrating required businesses or fully realizing cost savings or other benefits from acquisitions; (VII) the Company‘s ability to profitably grow its business and successfully execute on its business plans; (VIII) any matter that would cause the Company to conclude that there was impairment of any asset, including goodwill or other intangible assets; (IX) the vulnerability of the Company’s network and online banking portals, and the systems of customers or parties with whom the Company contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (X) the availability of and access to capital; (XI) adverse results (including costs, fines, reputational harm, inability to obtain necessary approvals, and/or other negative affects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company’s participation in and execution of government programs related to the Covid-19 pandemic; and (XII) general competitive, economic, political and market conditions. Additional factors which could affect the forward-looking statements can be found in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, filed with the SEC. The Company disclaims any obligation to update or revise any forward-looking statements contained in this press release (we speak only as of the date hereof), whether as a result of new information, future events, or otherwise.

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)
Fourth quarter 2020 Earnings Release

  Three Months Ended  Year Ended 
  December 31,  December 31, 
  2020  2019  2020  2019 
Interest income:                
Loans, including fees $22,653  $20,233  $84,272  $82,828 
Securities:                
Taxable  1,412   1,077   4,863   4,619 
Tax-exempt  354   347   1,342   1,438 
Federal funds sold  —   —   —   26 
Restricted equity securities  155   171   576   755 
Interest-bearing deposits in financial institutions  158   377   799   1,881 
  Total interest income  24,732   22,205   91,852   91,547 
Interest expense:                
Interest-bearing deposits  497   2,015   3,868   7,538 
Savings and money market accounts  377   1,821   5,196   7,266 
Time deposits  1,121   1,626   5,317   7,542 
Federal funds purchased  —   —   —   4 
Securities sold under agreements to repurchase  —   —   —   5 
Federal Home Loan Bank advances  8   162   356   1,444 
Subordinated notes  398   —   792   — 
Total interest expense  2,401   5,624   15,529   23,799 
Net interest income  22,331   16,581   76,323   67,748 
Provision for loan losses  184   —   11,479   761 
Net interest income after provision for loan losses  22,147   16,581   64,844   66,987 
Noninterest income:                
Treasury management and other deposit service charges  964   736   3,494   3,135 
Interchange and debit card transaction fees  782   928   3,172   3,251 
Mortgage banking income  5,971   2,316   25,034   9,467 
Tri-Net fees  1,165   274   3,693   2,785 
Wealth management fees  411   407   1,573   1,425 
Net gain (loss) on Sale of SBA Loans  916   (20)  1,440   803 
Net gain (loss) on sale of securities  51   9   125   (99)
Other noninterest income  1,488   1,069   4,717   3,507 
Total noninterest income  11,748   5,719   43,248   24,274 
Noninterest expense:                
Salaries and employee benefits  11,996   9,318   45,252   35,542 
Data processing and software  2,548   1,835   8,865   6,961 
Professional fees  370   531   2,224   2,102 
Occupancy  975   795   3,590   3,345 
Equipment  900   834   3,195   3,723 
Regulatory fees  368   28   1,261   591 
Merger related expenses  2,105   163   5,390   2,654 
Amortization of intangibles  524   397   1,824   1,655 
Other operating  1,692   1,365   5,760   5,422 
Total noninterest expense  21,478   15,266   77,361   61,995 
Income before income taxes  12,417   7,034   30,731   29,266 
Income tax expense  2,736   1,613   6,035   6,844 
Net income $9,681  $5,421  $24,696  $22,422 
Per share information:                
Basic net income per share of common stock $0.44  $0.30  $1.22  $1.25 
Diluted net income per share of common stock $0.44  $0.29  $1.22  $1.20 
Weighted average shares outstanding:                
Basic  21,960,184   18,350,994   20,162,038   17,886,164 
Diluted  21,978,925   18,443,916   20,185,589   18,613,224 

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)
Fourth quarter 2020 Earnings Release

  Five Quarter Comparison 
  12/31/20  9/30/20  6/30/20  3/31/20  12/31/19 
Income Statement Data:                    
Net interest income $22,331  $19,656  $17,675  $16,661  $16,581 
Provision for loan losses  184   2,119   1,624   7,553   — 
Net interest income after provision for loan losses  22,147   17,537   16,051   9,108   16,581 
Treasury management and other deposit service charges  964   1,064   691   775   736 
Interchange and debit card transaction fees  782   936   729   724   928 
Mortgage banking income  5,971   9,686   7,123   2,253   2,316 
Tri-Net fees  1,165   668   1,260   599   274 
Wealth management fees  411   382   374   407   407 
Net gain (loss) on Sale of SBA Loans  916   476   13   35   (20)
Net gain on sale of securities  51   34   13   27   9 
Other noninterest income  1,488   1,558   620   1,054   1,069 
Total noninterest income  11,748   14,804   10,823   5,874   5,719 
Salaries and employee benefits  11,996   12,949   12,305   8,002   9,318 
Data processing and software  2,548   2,353   2,100   1,864   1,835 
Professional fees  370   638   581   636   531 
Occupancy  975   999   797   820   795 
Equipment  900   864   680   751   834 
Regulatory fees  368   397   333   163   28 
Merger related expenses  2,105   2,548   448   290   163 
Amortization of intangibles  524   539   375   386   397 
Other operating  1,692   1,452   1,315   1,299   1,365 
Total noninterest expense  21,478   22,739   18,934   14,211   15,266 
Net income before income tax expense  12,417   9,602   7,940   771   7,034 
Income tax (benefit) expense  2,736   2,115   1,759   (575)  1,613 
Net income $9,681  $7,487  $6,181  $1,346  $5,421 
Weighted average shares - basic  21,960,184   21,948,579   18,307,083   18,392,913   18,350,994 
Weighted average shares - diluted  21,978,925   21,960,490   18,320,006   18,443,725   18,443,916 
Net income per share, basic $0.44  $0.34  $0.34  $0.07  $0.30 
Net income per share, diluted  0.44   0.34   0.34   0.07   0.29 
Balance Sheet Data (at period end):                    
Cash and cash equivalents $277,439  $455,925  $368,820  $91,450  $101,269 
Securities available-for-sale  486,215   308,337   223,034   219,213   213,129 
Securities held-to-maturity  2,407   2,413   2,699   3,306   3,313 
Loans held for sale  179,669   198,603   129,807   186,937   168,222 
Total loans  1,891,019   1,906,603   1,592,725   1,446,835   1,420,102 
Allowance for loan losses  (23,245)  (23,167)  (21,035)  (20,114)  (12,604)
Total assets  2,984,102   3,024,348   2,445,172   2,072,585   2,037,201 
Non-interest-bearing deposits  662,934   716,707   546,974   442,789   312,096 
Interest-bearing deposits  1,905,067   1,900,835   1,548,592   1,320,920   1,417,355 
Federal Home Loan Bank advances and borrowings  39,423   39,418   39,464   10,000   10,000 
Total liabilities  2,640,616   2,690,453   2,163,222   1,796,795   1,764,155 
Shareholders' equity $343,486  $333,895  $281,950  $275,790  $273,046 
Total shares of common stock outstanding  21,988,803   21,947,805   18,302,188   18,307,802   18,361,922 
Book value per share of common stock $15.62  $15.21  $15.41  $15.06  $14.87 
Tangible book value per share of common stock *  13.36   12.92   13.02   12.66   12.45 
Market value per common share  14.75   9.81   12.00   9.89   16.65 
Capital ratios:                    
Total risk based capital  16.03%  15.96%  16.76%  13.68%  13.45%
Tier 1 risk based capital  13.52%  13.39%  13.76%  12.56%  12.73%
Common equity tier 1 capital  13.52%  13.39%  13.76%  12.56%  12.73%
Leverage  9.60%  9.23%  10.08%  11.23%  11.37%

_____________________
*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)
Fourth quarter 2020 Earnings Release

  Five Quarter Comparison 
  12/31/20  9/30/20  6/30/20  3/31/20  12/31/19 
Average Balance Sheet Data:                    
Cash and cash equivalents $427,086  $526,409  $257,709  $114,272  $115,100 
Investment securities  407,622   323,689   238,762   226,537   225,265 
Loans held for sale  165,441   156,123   176,193   180,401   140,731 
Loans  1,891,202   1,906,449   1,560,626   1,421,256   1,431,027 
Assets  3,028,225   3,043,847   2,350,021   2,059,306   2,030,231 
Interest bearing deposits  1,909,692   1,957,259   1,519,877   1,411,666   1,388,496 
Deposits  2,613,080   2,648,465   2,031,924   1,735,635   1,711,021 
Federal Home Loan Bank advances and other borrowings  39,428   39,431   10,966   20,989   22,391 
Liabilities  2,687,516   2,722,341   2,068,408   1,780,756   1,758,663 
Shareholders' equity $340,709  $321,506  $281,614  $278,550  $271,568 
Performance Ratios:                    
Annualized return on average assets  1.27%  0.98%  1.06%  0.26%  1.06%
Annualized return on average equity  11.30%  9.26%  8.83%  1.94%  7.92%
Net interest margin (1)  3.12%  2.72%  3.23%  3.50%  3.49%
Annualized noninterest income to average assets  1.54%  1.93%  1.85%  1.15%  1.12%
Efficiency ratio  63.02%  65.99%  66.44%  63.06%  68.46%
Loans by Type (at period end):                    
Commercial and industrial $630,775  $648,018  $621,541  $447,311  $394,408 
Commercial real estate - owner occupied  162,603   164,336   147,682   166,652   172,456 
Commercial real estate - non-owner occupied  481,229   480,106   408,402   378,170   387,443 
Construction and development  174,859   176,751   117,830   141,087   143,111 
Consumer real estate  343,791   350,238   238,696   248,243   256,097 
Consumer  44,279   42,104   27,542   27,739   28,426 
Other  53,483   45,050   31,032   37,633   38,161 
Asset Quality Data:                    
Allowance for loan losses to total loans  1.23%  1.22%  1.32%  1.39%  0.89%
Allowance for loan losses to non-performing loans  483%  787%  705%  550%  861%
Nonaccrual loans $4,817  $2,945  $2,982  $3,658  $1,464 
Troubled debt restructurings  1,928   1,886   1,228   1,306   2,717 
Loans - over 89 days past due  4,367   541   639   399   38 
Total non-performing loans  4,817   2,945   2,982   3,658   1,464 
OREO and repossessed assets  523   171   147   147   1,044 
Total non-performing assets $5,340  $3,116  $3,129  $3,805  $2,508 
Non-performing loans to total loans  0.25%  0.15%  0.19%  0.25%  0.10%
Non-performing assets to total assets  0.18%  0.10%  0.13%  0.18%  0.12%
Non-performing assets to total loans and OREO  0.28%  0.16%  0.20%  0.26%  0.18%
Annualized net charge-offs to average loans  0.02%  0.0%  0.18%  0.01%  0.06%
Net charge-offs (recoveries) $106  $(13) $703  $43  $224 
Interest Rates and Yields:                    
Loans  4.48%  4.47%  4.50%  5.10%  5.24%
Securities (1)  1.98%  2.18%  2.73%  3.04%  3.00%
Total interest-earning assets (1)  3.45%  3.41%  3.78%  4.56%  4.67%
Deposits  0.30%  0.67%  0.59%  1.14%  1.27%
Borrowings and repurchase agreements  4.09%  5.14%  3.16%  2.77%  2.88%
Total interest-bearing liabilities  0.49%  0.99%  0.81%  1.43%  1.58%
Other Information:                    
Full-time equivalent employees  380   403   286   288   289 

_____________________

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)
Fourth quarter 2020 Earnings Release

  For the Three Months Ended December 31, 
  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) $1,891,202  $21,305   4.48% $1,431,027  $18,884   5.24%
Loans held for sale  165,441   1,348   3.24%  140,731   1,349   3.80%
Securities:                        
Taxable investment securities (2)  350,644   1,567   1.79%  175,750   1,248   2.84%
Investment securities exempt from federal income tax (3)  56,978   354   3.14%  49,515   347   3.55%
Total securities  407,622   1,921   1.98%  225,265   1,595   3.00%
Cash balances in other banks  394,831   158   0.16%  96,125   377   1.56%
Funds sold  —   —   —   45   —   3.75%
Total interest-earning assets  2,859,096   24,732   3.45%  1,893,193   22,205   4.67%
Noninterest-earning assets  169,129           137,038         
Total assets $3,028,225          $2,030,231         
Interest-Bearing Liabilities                        
Interest-bearing deposits:                        
Interest-bearing transaction accounts $828,740   497   0.24% $566,869   2,015   1.41%
Savings and money market deposits  593,236   377   0.25%  514,896   1,821   1.40%
Time deposits  487,716   1,121   0.91%  306,731   1,626   2.10%
Total interest-bearing deposits  1,909,692   1,995   0.42%  1,388,496   5,462   1.56%
Borrowings and repurchase agreements  39,428   406   4.09%  22,391   162   2.88%
Total interest-bearing liabilities  1,949,120   2,401   0.49%  1,410,887   5,624   1.58%
Noninterest-bearing deposits  703,388           322,524         
Total funding sources  2,652,508           1,733,411         
Noninterest-bearing liabilities  35,008           25,252         
Shareholders’ equity  340,709           271,568         
Total liabilities and shareholders’ equity $3,028,225          $2,030,231         
Net interest spread (4)          2.96%          3.09%
Net interest income/margin (5)     $22,331   3.12%     $16,580   3.49%

_____________________

(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)
Fourth quarter 2020 Earnings Release

  Five Quarter Comparison 
  12/31/20  9/30/20  6/30/20  3/31/20  12/31/19 
Operating net income:                    
Net income $9,681  $7,487  $6,181  $1,346  $5,421 
Add: merger related expenses  2,105   2,548   448   290   163 
Less: income tax impact of merger related expenses  (550)  (666)  (117)  (76)  (43)
Operating net income $11,236  $9,369  $6,512  $1,560  $5,541 
                     
Operating diluted net income per
share of common stock:		                    
Operating net income $11,236  $9,369  $6,512  $1,560  $5,541 
Weighted average shares - diluted  21,978,925   21,960,490   18,320,006   18,443,725   18,443,916 
Operating diluted net income per share of common stock $0.51  $0.43  $0.36  $0.08  $0.30 
                     
Operating annualized return on average assets:                    
Operating net income $11,236  $9,369  $6,512  $1,560  $5,541 
Average assets $3,028,225  $3,043,847  $2,350,021  $2,059,306  $2,030,231 
Operating annualized return on average assets  1.48%  1.22%  1.11%  0.30%  1.08%
                     
Operating annualized return on average tangible equity:                    
Average total shareholders' equity $340,709  $321,506  $281,614  $278,550  $271,568 
Less: average intangible assets  (50,038)  (50,577)  (43,871)  (44,253)  (44,646)
Average tangible equity  290,671   270,929   237,743   234,297   226,922 
Operating net income $11,236  $9,369  $6,512  $1,560  $5,541 
Operating annualized return on average tangible equity  15.38%  13.76%  11.02%  2.68%  9.69%
                     
Operating efficiency ratio:                    
Total noninterest expense $21,478  $22,739  $18,934  $14,211  $15,266 
Less: merger related expenses  (2,105)  (2,548)  (448)  (290)  (163)
Total operating noninterest expense  19,373   20,191   18,486   13,921   15,103 
Net interest income  22,331   19,656   17,675   16,661   16,581 
Total noninterest income  11,748   14,804   10,823   5,874   5,719 
Total revenues $34,079  $34,460  $28,498  $22,535  $22,300 
Operating efficiency ratio:  56.85%  58.59%  64.87%  61.78%  67.73%
                     
Operating annualized pre-tax pre-provision income to average assets:                    
Income before income taxes $12,417  $9,602  $7,940  $771  $7,034 
Add: merger related expenses  2,105   2,548   448   290   163 
Add: provision for loan losses  184   2,119   1,624   7,553   — 
Operating pre-tax pre-provision income  14,706   14,269   10,012   8,614   7,197 
Average assets $3,028,225  $3,043,847  $2,350,021  $2,059,306  $2,030,231 
Operating annualized pre-tax pre-provision income to average assets:  1.93%  1.86%  1.71%  1.68%  1.41%
                     
Tangible Equity:                    
Total shareholders' equity $343,486  $333,895  $281,950  $275,790  $273,046 
Less: intangible assets  (49,698)  (50,222)  (43,633)  (44,008)  (44,393)
Tangible equity $293,788  $283,673  $238,317  $231,782  $228,653 
                     
Tangible Book Value per Share of Common Stock:                    
Tangible common equity $293,788  $283,673  $238,317  $231,782  $228,653 
Total shares of common stock outstanding  21,988,803   21,947,805   18,302,188   18,307,802   18,361,922 
Tangible book value per share of common stock $13.36  $12.92  $13.02  $12.66  $12.45 


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

  Five Quarter Comparison 
  12/31/20  9/30/20  6/30/20  3/31/20  12/31/19 
Allowance for loan losses $23,245  $23,167  $21,035  $20,114  $12,604 
Purchase accounting marks  3,663   4,013   2,790   3,178   3,473 
Allowance for loan losses and purchase accounting fair value marks  26,908   27,180   23,825   23,292   16,077 
                     
Loans  1,891,019   1,906,603   1,592,725   1,446,835   1,420,102 
Less: PPP Loans net of deferred fees  181,601   216,799   213,064   —   — 
Non-PPP Loans  1,709,418   1,689,804   1,379,661   1,446,835   1,420,102 
                     
Allowance for loan losses plus fair value marks / Non-PPP Loans  1.57%  1.61%  1.73%  1.61%  1.13%


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

  Year Ended 
  December 31, 2020  December 31, 2020 
Operating net income:        
Net income $24,696  $22,422 
Add: merger related expenses  5,390   2,654 
Less: income tax impact of merger related expenses  (1,409)  (694)
Operating net income $28,677  $24,382 
         
Operating diluted net income per
share of common stock:		        
Operating net income $28,677  $24,382 
Weighted average shares - diluted  20,185,589   18,613,224 
Operating diluted net income per share of common stock $1.42  $1.31 
         
Operating return on average assets:        
Operating net income $28,677  $24,382 
Average assets $2,622,635  $2,007,327 
Operating return on average assets  1.09%  1.21%
         
Operating return on average tangible equity:        
Average total shareholders' equity $305,748  $264,124 
Less: average intangible assets  (47,202)  (45,256)
Average tangible equity  258,546   218,868 
Operating net income $28,677  $24,382 
Operating return on average tangible equity  11.09%  11.14%
         
Operating efficiency ratio:        
Total noninterest expense $77,361  $61,995 
Less: merger related expenses  (5,390)  (2,654)
Total operating noninterest expense  71,971   59,341 
Net interest income  76,323   67,748 
Total noninterest income  43,248   24,274 
Total revenues $119,571  $92,022 
Operating efficiency ratio:  60.19%  64.49%

CONTACT

Denis J. Duncan
Chief Financial Officer
(615) 732-7492