Truxton Corporation Reports Third Quarter 2021 Results


NASHVILLE, Tenn., Oct. 21, 2021 (GLOBE NEWSWIRE) -- Truxton Corporation (OTCPK: TRUX), the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended September 30, 2021. Third quarter net income attributable to common shareholders was $3.9 million or $1.34 per diluted share compared to $2.5 million or $0.88 per diluted share for the same quarter in 2020. Net income rose by 53% for the quarter compared to the third quarter of 2020 while fully diluted earnings per share rose by 52%.

“Truxton’s third quarter 2021 performance was outstanding,” said Chairman and CEO Tom Stumb. “Wealth management revenue increased 37% from the third quarter of 2020. Loans were up 7% compared to September 30, 2020. Excluding amounts under the Paycheck Protection Program (PPP), loans grew 32% from the end of September 2020. This quarter’s strong performance resulted in part from recognition of $409,000 in PPP loan fees, which will continue into the final quarter of the year but at a much lower level.”

Key Highlights

  • Non-interest income grew to $4.1 million in the third quarter, an increase of 5% from the second quarter of 2021 and 39% in comparison to the third quarter of 2020. Wealth management services constituted 95% of non-interest income in the third quarter of 2021.
  • Loans rose 7% to $482 million compared to June 30, 2021, and were up 18% compared to September 30, 2020. Excluding PPP loans, loans rose by 10% compared to June 30, 2021, and 32% compared to September 30, 2020, but we expect loan growth in the fourth quarter to moderate.
  • As noted above, PPP fee recognition driven by loan forgiveness added $409 thousand in pretax income for the quarter, which equates to approximately $0.11 in earnings per diluted share. $2.65 million in PPP loans remained outstanding at quarter end with only $107 thousand in unrecognized fees, almost all of which we expect to recognize in the fourth quarter.
  • Total deposits increased 4% from June 30, 2021 to $733 million, and increased 36% in comparison to September 30, 2020. Truxton continues to fund its growth from a single banking location through superior deposit operations service and technology. As a result, occupancy expenditures and fixed asset investments are a fraction of typical peers.
  • Net interest margin for the third quarter of 2021 was 2.69%, a decrease of 2 basis points from the 2.71% experienced in the second quarter of 2021, and a decrease of 15 basis points from the third quarter of 2020. Cost of funds was 0.44% in the third quarter of 2021, down from 0.46% for the quarter ended June 30, 2021, but up from 0.35% for the quarter ended September 30, 2020. The year-over-year increase was the result of the issuance of $15 million of 4.5% subordinated notes in September 2020. We continue to have excess liquidity because the deposit growth we experienced in 2020 has persisted into the third quarter of 2021.
  • Asset quality remains sound at Truxton. Truxton had no non-performing assets at September 30, 2021, as our one problem loan was repaid including all of its associated interest.   Truxton had $2,000 of charge-offs in the third quarter of 2021, $1,000 in the trailing quarter, and $0 in the same quarter a year ago. All of these charge-offs are from small loans acquired from a housing not-for-profit.
  • Allowance for loan losses was $4.8 million, $4.6 million, and $4.3 million at quarter end September 30, 2021, June 30, 2021, and September 30, 2020, respectively. For the same three periods, the Bank’s allowance was 0.98%, 1.00%, and 1.03%, respectively, of gross loans (including PPP loans) outstanding at period end.
  • Tax expense increased by 29% from the June 30, 2021 quarter and by 36% from the September 30, 2020 period because pretax income grew. Truxton believes that the effective tax rate of approximately 19% of pretax net income will persist under current state and federal law. Truxton has several sources of lightly taxed income including yield on bank-owned life insurance, the earnings of the bank’s captive insurance company, and the interest income from the bank’s tax-exempt bond portfolio that cause its effective rate to be below the combined statutory rates.
  • The Bank’s capital position remains strong. Its Tier 1 leverage ratio was 8.99% at September 30, 2021, 9.47% at June 30, 2021, and 9.43% at September 30, 2020. Book value per common share was $28.14, $27.35, and $25.27 at September 30, 2021, June 30, 2021, and September 30, 2020, respectively. During the twelve months ended September 30, 2021, Truxton Corporation paid dividends of $2.18 per common share.

About Truxton Trust
Truxton Trust Company is a provider of private banking, wealth management, trust, 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.

 
Truxton Corporation
Consolidated Balance Sheets
(000's)
(Unaudited)
    
 September 30,
2021*
June 30,
2021*
September 30,
2020*
ASSETS   
Cash and due from financial institutions$10,556 $10,232 $12,772 
Interest bearing deposits in other financial institutions 56,505  92,671  90,836 
Federal funds sold 2,929  5,375  2,223 
Cash and cash equivalents 69,990  108,278  105,831 
    
Time deposits in other financial institutions 2,538  2,185  2,938 
Securities available for sale 269,685  235,032  156,558 
    
Gross loans, excluding Paycheck Protection Program 484,614  441,997  367,689 
Allowance for loan losses (4,779) (4,575) (4,257)
Paycheck Protection Program Loans 2,652  15,068  46,684 
Net loans 482,487  452,490  410,116 
    
Bank owned life insurance 10,338  10,288  10,132 
Restricted equity securities 3,235  3,228  3,206 
Premises and equipment, net 371  405  538 
Accrued interest receivable 2,331  2,260  2,850 
Deferred tax asset, net -  -  106 
Other assets 6,455  6,531  7,044 
    
Total assets$847,430 $820,697 $699,319 
    
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
Deposits   
Non-interest bearing$161,614 $164,176 $150,083 
Interest bearing 571,298  543,238  388,959 
Total deposits 732,912  707,414  539,042 
    
Federal Home Loan Bank advances 11,680  12,835  17,867 
Paycheck Protection Program Liquidity Facility advances -  -  46,639 
Subordinated debt 14,604  14,748  14,574 
Other liabilities 7,193  6,947  9,527 
Total liabilities 766,389  741,944  627,649 
    
SHAREHOLDERS' EQUITY   
Additional paid-in capital 31,799  31,556  30,832 
Retained earnings 46,456  43,446  38,696 
Accumulated other comprehensive income (loss) 2,786  3,751  2,142 
    
Total shareholders' equity 81,041  78,753  71,670 
    
Total liabilities and shareholders' equity$847,430 $820,697 $699,319 
    
*The information is preliminary, unaudited and based on company data available at the time of presentation.


 
Truxton Corporation
Consolidated Statements of Net Income
(000's)
(Unaudited)
          
 Three Months Ended Year To Date
 September 30,
2021*
 June 30,
2021*
 September 30,
2020*
 September 30,
2021*
 September 30,
2020*
Non-interest income         
Wealth management services$3,874 $3,726 $2,832 $11,030 $8,367
Service charges on deposit accounts 97  82  59  239  197
Securities gains (losses), net 0  0  0  0  0
Bank owned life insurance income 51  51  53  153  159
Other 76  50  13  242  197
Total non-interest income 4,098  3,909  2,957  11,664  8,920
          
Interest income         
Loans, including fees$5,026 $4,434 $4,126 $13,563 $12,585
Taxable securities 724  719  471  2,103  1,492
Tax-exempt securities 391  395  299  1,165  740
Interest bearing deposits 75  46  90  183  253
Federal funds sold 1  1  2  2  18
 Other interest income 16  47  13  83  59
Total interest income 6,233  5,642  5,001  17,099  15,147
          
Interest expense         
Deposits 590  514  389  1,630  1,490
Short-term borrowings -  -  -  -  -
Subordinated debentures 194  194  -  586  -
Long-term borrowings 61  72  134  210  353
Total interest expense 845  780  523  2,426  1,843
          
Net interest income 5,388  4,862  4,478  14,673  13,304
          
Provision for loan losses 199  -  262  291  865
          
Net interest income after provision for loan losses 5,189  4,862  4,216  14,382  12,439
          
Total revenue, net 9,287  8,771  7,173  26,046  21,359
          
Non interest expense         
Salaries and employee benefits 3,316  3,230  2,781  9,652  8,507
Occupancy 247  246  228  714  649
Furniture and equipment 33  42  46  121  107
Data processing 339  327  296  1,010  849
Wealth management processing fees 168  164  102  511  357
Advertising and public relations 25  34  30  99  97
Professional services 164  183  190  474  514
FDIC insurance assessments 57  42  45  141  98
Other 124  221  237  573  720
Total non interest expense 4,473  4,489  3,955  13,295  11,898
          
Income before income taxes 4,814  4,282  3,218  12,751  9,461
          
Income tax expense 940  731  693  2,246  1,852
          
Net income$3,874 $3,551 $2,525 $10,505 $7,609
          
Earnings per share:         
Basic$1.35 $1.23 $0.89 $3.64 $2.73
Diluted$1.34 $1.22 $0.88 $3.63 $2.70
*The information is preliminary, unaudited and based on company data available at the time of presentation.    


 
Truxton Corporation
Selected Quarterly Financial data
At Or For The Three Months Ended
(000's)
(Unaudited)
    
 September 30,
2021*
June 30,
2021*
September 30,
2020*
    
Per Common Share Data   
Net income attributable to shareholders, per share   
Basic$1.35$1.23$0.89
Diluted$1.34$1.22$0.88
Book value per common share$28.14$27.35$25.27
Tangible book value per common share$28.14$27.35$25.27
Basic weighted average common shares2,809,3072,814,1962,758,375
Diluted weighted average common shares2,822,1772,825,6682,789,562
Common shares outstanding at period end2,879,5272,879,1772,836,451
    
    
Selected Balance Sheet Data   
Tangible common equity (TEC) ratio9.56%9.60%10.25%
Average Loans$470,746$446,079$413,716
Average earning assets (1)$813,434$732,416$642,326
Average total assets$848,148$765,391$677,985
Average stockholders' equity$81,071$77,148$71,183
    
    
Selected Asset Quality Measures   
Nonaccrual loans$0$2,007$2,044
90+ days past due still accruing$6$38$0
Total nonperforming loans$6$2,045$2,044
Total nonperforming assets$6$2,045$2,044
Net charge offs$2$1$0
Nonperforming loans to assets0.00%0.24%0.29%
Nonperforming assets to total assets0.00%0.25%0.29%
Nonperforming assets to total loans and other real estate0.00%0.45%0.49%
Allowance for loan losses to total loans0.98%1.00%1.03%
Net charge offs to average loans0.00%0.00%0.00% 
    
    
Capital Ratios (Bank Subsidiary Only)   
Tier 1 leverage8.99%9.47%9.43%
Common equity tier 113.35%13.80%14.60%
Total risk-based capital14.20%14.70%15.58%
    
Selected Performance Ratios    
Efficiency ratio47.87%51.67%53.01%
Return on average assets (ROA)1.81%1.86%1.48%
Return on average stockholders' equity (ROE)18.96%18.46%14.12%
Return on tangible common equity (ROTCE)18.96%18.46%14.12%
Net interest margin2.69%2.71%2.84%
    
*The information is preliminary, unaudited and based on company data available at the time of presentation. 
    
(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, investment securities and restricted equity 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
 September 30, 2021* June 30, 2021* September 30, 2020*
            
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
            
Earning Assets          
Loans$470,746 2.87$4,586 $446,079 3.64$4,049 $413,716 3.74 $3,891 
Loan fees$0 0.37$440 $0 0.35$385 $0 0.23 $240 
Loans with fees$470,746 4.24$5,026 $446,079 3.99$4,433 $413,716 3.97 $4,131 
Mortgage loans held for sale$20 2.70$0 $108 3.16$1 $0 0.00 $0 
Federal funds sold$3,085 0.01$1 $2,124 0.06$0 $4,340 0.17 $2 
Deposits with banks$96,256 0.31$75 $53,857 0.34$46 $83,360 0.43 $90 
Investment securities - taxable$177,782 1.63$724 $164,584 1.75$719 $96,081 1.96 $471 
Investment securities - tax-exempt$65,545 3.23$391 $65,665 3.25$395 $44,829 3.61 $299 
Total Earning Assets$813,434 3.10$6,217 $732,416 3.14$5,594 $642,326 3.16 $4,993 
Non interest earning assets         
Allowance for loan losses (4,604)    (4,575)    (4,122)  
Cash and due from banks$11,045    $10,601    $11,256   
Premises and equipment$352    $403    $484   
Accrued interest receivable$1,966    $2,114    $2,502   
Other real estate$0    $0    $0   
Other assets$19,792    $20,112    $20,485   
Unrealized gain (loss) on inv. securities 6,163     4,320     5,053   
Total Assets$848,148    $765,391    $677,984   
Interest bearing liabilities         
Interest bearing demand$36,078 0.18$16 $34,695 0.18$15 $31,416 (0.03)($3)
Savings and Money Market$634,565 0.34$546 $559,805 0.34$470 $454,105 0.31 $351 
Time deposits - Retail$10,882 0.50$14 $9,920 0.61$15 $9,796 1.20 $30 
Time Deposits - Wholesale$13,080 0.44$14 $20,271 0.28$14 $15,285 0.27 $11 
Total interest bearing deposits$694,605 0.34$590 $624,691 0.33$514 $510,602 0.33 $389 
Federal home Loan Bank advances$11,853 2.01$61 $14,603 1.95$72 $25,435 1.43 $93 
Subordinated debt$14,864 5.11$194 $14,679 5.23$194 $0 0.00 $0 
Other borrowings$878 0.00$0 $1,090 0.98$0 $48,454 0.33 $41 
Total borrowed funds$27,595 3.61$255 $30,371 3.47$266 $73,889 0.71 $134 
Total interest bearing liabilities$722,200 0.46$845 $655,062 0.48$780 $584,492 0.35 $523 
Net interest rate spread 2.64$5,372  2.66$4,814  2.81 $4,470 
Non-interest bearing deposits$38,742    $28,186    $14,564   
Other liabilities$6,135    $4,995    $7,745   
Stockholder's equity$81,071    $77,148    $71,183   
Total Liabilities and Stockholder's Equity$848,148    $765,391    $677,984   
Cost of funds0.44   0.46   0.35  
Net interest margin 2.69   2.71   2.84  
            
*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.

 

 
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:         
         
         
 Nine Months Ended Nine Months Ended 
 September 30, 2021* September 30, 2020* 
         
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
 
         
Earning Assets        
Loans$448,717 3.72$12,142 $400,413 4.05$12,142 
Loan fees$0 0.32$467 $0 0.16$467 
Loans with fees$448,717 4.04$12,609 $400,413 4.21$12,609 
Mortgage loans held for sale$74 3.02$2 $69 4.07$2 
Federal funds sold$2,464 0.08$18 $4,285 0.54$18 
Deposits with banks$72,445 0.34$253 $52,832 0.64$253 
Investment securities - taxable$163,932 1.71$1,492 $91,351 2.18$1,492 
Investment securities - tax-exempt$64,543 3.25$740 $35,425 3.77$740 
Total Earning Assets$752,175 3.10$15,114 $584,375 3.51$15,114 
Non interest earning assets        
Allowance for loan losses (4,574)    (3,747)   
Cash and due from banks$10,666    $9,558    
Premises and equipment$405    $397    
Accrued interest receivable$2,096    $2,049    
Other real estate$0    $0    
Other assets$19,840    $19,824    
Unrealized gain (loss) on inv. securities 5,442     3,145    
Total Assets$786,050    $615,601    
Interest bearing liabilities        
Interest bearing demand$35,766 0.25$72 $32,453 0.29$72 
Savings and Money Market$575,310 0.34$1,256 $410,521 0.41$1,256 
Time deposits - Retail$9,707 0.60$101 $10,421 1.30$101 
Time Deposits - Wholesale$19,176 0.28$61 $7,648 1.07$61 
Total interest bearing deposits$639,959 0.34$1,490 $461,043 0.43$1,490 
Federal home Loan Bank advances$14,130 1.96$285 $27,361 1.37$285 
Subordinated debt$14,781 5.22$586 $185 0.00$0 
Other borrowings$1,034 0.86$0 $27,505 0.33$69 
Total borrowed funds$29,945 3.50$871 $55,051 0.84$354 
Total interest bearing liabilities$669,904 0.48$2,361 $516,094 0.48$1,844 
Net interest rate spread 2.61$12,753  3.03$13,270 
Non-interest bearing deposits$31,761    $24,414    
Other liabilities$5,687    $7,139    
Stockholder's equity$78,702    $67,952    
Total Liabilities and Stockholder's Equity$786,054    $615,599    
Cost of funds 0.46   0.45  
Net interest margin 2.67   3.09  
         
*The information is preliminary, unaudited and based on company data available at the time of presentation. 


Investor RelationsMedia Relations
Andrew MayTamara Schoeplein
615-515-1707615-515-1714
andrew.may@truxtontrust.com tamara.schoeplein@truxtontrust.com