TRUX - Truxton Corporation Reports Second Quarter 2019 Results

July, 18 2019 08:30 AM Truxton Corp

NASHVILLE, Tenn., July 18, 2019 (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 June 30, 2019. Second quarter net income attributable to common shareholders was $2.5 million or $0.90 per diluted share compared to $2.0 million or $0.74 per diluted share for the same quarter in 2018. Net income rose by 23% for the quarter while earnings per share rose by 22%. For the six months ended June 30, 2019, net income increased by 24% to $4.7 million from $3.8 million in the comparable period in 2018. For the six months ended June 30, 2019, earnings per diluted share rose from $1.37 to $1.69, an increase of 23%.

“Our earnings performance in 2019 has continued to be very strong,” said Truxton Trust Chairman and CEO Tom Stumb. “Tight expense control, exceptional credit quality, and continued growth in wealth management revenue were the drivers of excellent growth and return metrics this quarter. Clients continue to seek our advice for their most challenging financial decisions. Nashville, our core market, has experienced strong employment growth now for a decade.”

Key Highlights

Non-interest income grew to $3.0 million in the second quarter, an increase of 12% from the same period of 2018. Wealth management services constituted 93% of non-interest income in the period ended June 30, 2019.
Loans rose by 10% to $336 million compared to June 30, 2018, and were up 1.2% compared to December 31, 2018.
Total deposits grew by 7.7% since June 30, 2018. 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 second quarter of 2019 was 3.35%. That represents an increase of 12 basis points from the 3.23% experienced in the quarter ended March 31, 2019, but a decline of 7 basis points from the quarter ended June 30, 2018. Cost of funds decreased to 1.08% in the second quarter of 2019 from 1.14% for the quarter ended March 31, 2019, but rose from 0.63% for the quarter ended June 30, 2018. Pressure on rates has abated as the bond market has rallied and short-term money markets have stabilized.
Asset quality remains sound at Truxton. Truxton had no non-performing assets at June 30, 2019. Truxton had no charge-offs in the quarter and none in the trailing quarter, nor in the same quarter a year ago.
Allowance for loan losses was $3.4 million, $3.4 million, and $3.1 million for the June 30, 2019, March 31, 2019, and June 30, 2018, quarters, respectively. For the three periods, the bank’s allowance was 1.02%, 0.99%, and 1.03%, of gross loans outstanding at period end, respectively.
Tax expense increased by 28% from the March 31, 2019, quarter and by 39% from the June 30, 2018, period. Effective tax rate rose from the first quarter of 2019 because of partial payoffs of certain loans for which Truxton receives a direct credit against state income tax based on the year end balance of the loan. Reported effective tax rate for the rest of the year may fluctuate based on the actual balance of such loans. In addition, 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. Tier 1 leverage ratio was 11.44% for June 30, 2019, 11.15% for March 31, 2019, and 11.20% for June 30, 2018. Book value per common share was $22.47, $21.52, and $19.27 for June 30, 2019, March 31, 2019, and June 30, 2018, respectively. During the 12 months ended June 30, 2019, Truxton Corporation paid dividends of $0.94 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.

Investor Relations
Andrew May
615-515-1707
andrew.may@truxtontrust.com

Media Relations
Tamara Schoeplein
615-515-1714
tamara.schoeplein@truxtontrust.com

Truxton Corporation
Consolidated Balance Sheets
(000's)
(Unaudited)





June 30, 2019*
March 31, 2019*
June 30, 2018*
ASSETS



Cash and due from financial institutions
$
7,951

$
5,349

$
6,408

Interest bearing deposits in other financial institutions

12,712


8,061


14,212











Federal funds sold

253


120


808

Cash and cash equivalents

20,916


13,530


21,428





Time deposits in other financial institutions

12,288


14,280


4,821

Securities available for sale

102,304


111,608


101,991





Gross loans

335,639


339,176


305,223

Allowance for loan losses

(3,411
)

(3,356
)

(3,131
)
Net loans

332,228


335,820


302,092





Mortgage loans held for sale,net

480


-


-

Bank owned life insurance

9,864


9,809


9,647

Restricted equity securities

2,588


2,583


2,567

Premises and equipment, net

1,887


2,082


543

Accrued interest receivable

1,817


1,883


1,529

Deferred tax asset, net

321


653


820

Other assets

3,115


2,438


1,750





Total assets
$
487,808

$
494,686

$
447,188









LIABILITIES AND SHAREHOLDERS' EQUITY



Deposits



Non-interest bearing
$
104,475

$
107,248

$
113,486

Interest bearing

296,549


304,152


258,997

Total deposits

401,024


411,400


372,483





Federal Home Loan Bank advances

18,833


19,090


19,737

Federal Funds purchased

-


-


-

Other liabilities

5,988


4,903


2,725

Total liabilities

425,845


435,393


394,945





SHAREHOLDERS' EQUITY



Additional paid-in capital

29,066


28,882


27,722

Retained earnings

32,610


30,783


26,098

Accumulated other comprehensive income (loss)

287


(372
)

(1,577
)




Total shareholders' equity

61,963


59,293


52,243





Total liabilities and shareholders' equity
$
487,808

$
494,686

$
447,188









*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

June 30, 2019*

March 31, 2019*

June 30, 2018*

June 30, 2019*

June 30, 2018 *
Non-interest income








Wealth management services
$
2,783

$
2,672

$
2,431

$
5,456

$
4,797
Service charges on deposit accounts

74


70


88


144


172
Securities gains (losses), net

70


2


20


72


20
Bank owned life insurance income

55


54


57


109


112
Other

10


74


66


82


78
Total non-interest income

2,992


2,872


2,662


5,863


5,179










Interest income









Loans, including fees
$
4,093

$
3,921

$
3,424

$
8,014

$
6,591
Taxable securities

471


498


361


970


740
Tax-exempt securities

237


247


251


484


515
Interest bearing deposits

161


156


60


317


112
Federal funds sold

7


5


5


12


8
Other interest income

51


32


48


83


76
Total interest income

5,020


4,859


4,149


9,880


8,042










Interest expense









Deposits

1,041


1,082


494


2,122


922
Short-term borrowings

9


7


6


16


9
Long-term borrowings

111


121


109


233


200
Total interest expense

1,161


1,210


609


2,371


1,131










Net interest income

3,859


3,649


3,540


7,509


6,911










Provision for loan losses

55


0


8


55


57










Net interest income after provision for loan losses

3,804


3,649


3,532


7,454


6,854










Total revenue, net

6,796


6,521


6,194


13,317


12,033










Non interest expense









Salaries and employee benefits

2,575


2,793


2,639


5,367


5,151
Occupancy

207


197


190


405


373
Furniture and equipment

27


27


45


55


101
Data processing

278


299


287


579


564
Wealth management processing fees

110


112


111


222


240
Advertising and public relations

20


38


16


57


45
Professional services

145


115


173


260


320
FDIC insurance assessments

35


35


35


70


70
Other

212


194


173


406


479
Total non interest expense

3,609


3,810


3,669


7,421


7,343










Income before income taxes

3,187


2,711


2,525


5,896


4,690










Income tax expense

668


523


479


1,191


885










Net income
$
2,519

$
2,188

$
2,046

$
4,705

$
3,805










Earnings per share:









Basic
$
0.92

$
0.80

$
0.75

$
1.72

$
1.41
Diluted
$
0.90

$
0.78

$
0.74

$
1.69

$
1.37
*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)





June 30, 2019*
March 31, 2019*
June 30, 2018*




Pre Common Share Data



Net income attributable to shareholders, per share



Basic
$0.92
$0.80
$0.75
Diluted
$0.90
$0.78
$0.74
Book value per common share
$22.47
$21.52
$19.27
Tangible book value per common share
$22.47
$21.52
$19.27
Basic weighted average comm shares
2,675,283
2,677,947
2,624,039
Diluted weighted average common shares
2,727,375
2,729,774
2,686,117
Common shares outstanding at period end
2,758,109
2,754,788
2,710,409








Selected Balance Sheet Data



Tangible common equity (TEC) ratio
12.70%
12.00%
11.68%
Average Loans
$339,174
$332,819
$307,477
Average earning assets (1)
$470,691
$469,928
$426,041
Average total assets
$493,510
$490,230
$443,326
Average stockholders' equity
$60,524
$57,593
$51,916








Selected Asset Quality Measures



Nonaccrual loans
0
0
0
90+ days past due still accruing
0
0
0
Total nonperforming loans
0
0
0
Total nonperforming assets
0
0
0
Net charge offs (recoveries)
(2)
(2)
(1)
Nonperforming loans to assets
0.00%
0.00%
0.00%
Nonperforming assets to total assets
0.00%
0.00%
0.00%
Nonperforming assets to total loans and other real estate
0.00%
0.00%
0.00%
Allowance for loan losses to total loans
1.02%
0.99%
1.03%
Allowance for loan losses to nonperforming loans
NA
NA
NA
Net charge offs (recoveries) to average loans
0.00%
0.00%
0.00%








Capital Ratios (Bank Subsidiary Only)



Tier 1 leverage
11.44%
11.15%
11.20%
Common equity tier 1
15.06%
14.39%
14.28%
Total risk-based capital
15.97%
15.29%
15.18%




Selected Performance Ratios



Efficiency ratio
54.60%
58.53%
59.72%
Return on average assets (ROA)
2.05%
1.81%
1.85%
Return on average stockholders' equity (ROE)
16.69%
15.41%
15.80%
Return on tangible common equity (ROTCE)
16.69%
15.41%
15.80%
Net interest margin
3.35%
3.23%
3.42%



*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

June 30, 2019*

March 31, 2019*

June 30, 2018*













Average Balances
Rates/ Yields (%)
Interest Income/ Expense

Average Balances
Rates/ Yields (%)
Interest Income/ Expense

Average Balances
Rates/ Yields (%)
Interest Income/ Expense












Earning Assets











Loans
$339,175

4.81
$4,070

$332,819

4.77
$3,917

$307,477

4.48
$3,427
Loan fees
$0

0.04
$30

$0

0.02
$17

$0

0.00
$3
Loans with fees
$339,175

4.85
$4,100

$332,819

4.79
$3,935

$307,477

4.48
$3,430
Mortgage loans held for sale
$71

2.99
$1

$66

1.44
$0

$39

4.55
$1
Federal funds sold
$1,042

2.58
$7

$851

2.48
$5

$732

2.54
$5
Deposits with banks
$24,747

2.61
$161

$24,211

2.61
$156

$14,023

1.73
$60
Investment securities - taxable
$72,520

2.60
$471

$77,423

2.57
$498

$66,931

2.16
$361
Investment securities - tax-exempt
$33,136

4.27
$237

$34,558

4.26
$247

$36,838

4.06
$250
Total Earning Assets
$470,691

4.34
$4,977

$469,928

4.27
$4,841

$426,040

3.99
$4,107
Non interest earning assets











Allowance for loan losses

(3,394
)




(3,356
)




(3,129
)


Cash and due from banks
$6,381




$6,693




$5,666



Premises and equipment
$1,901




$300




$401



Accrued interest receivable
$1,630




$1,588




$1,317



Other real estate
$0




$0




$0



Other assets
$16,075




$16,456




$14,827



Unrealized gain (loss) on inv. securities

226





(1,379
)




(1,796
)


Total Assets
$493,510




$490,230




$443,326



Interest bearing liabilities











Interest bearing demand
$25,935

0.71
$46

$26,545

0.95
$62

$26,160

0.35
$23
Savings and Money Market
$331,800

1.15
$951

$339,115

1.17
$981

$295,269

0.60
$440
Time deposits - Retail
$11,368

1.35
$38

$11,465

1.14
$32

$12,716

0.75
$24
Time Deposits - Wholesale
$7,880

0.31
$6

$1,243

2.20
$7

$2,126

1.39
$7
Total interest bearing deposits
$376,983

1.11
$1,041

$378,368

1.16
$1,082

$336,271

0.59
$494
Federal home Loan Bank advances
$22,339

1.97
$111

$24,378

2.00
$122

$24,490

1.76
$109
Other borrowings
$2,924

1.27
$9

$884

3.08
$7

$1,055

2.33
$6
Total borrowed funds
$25,263

1.89
$120

$25,262

2.03
$128

$25,545

1.79
$115
Total interest bearing liabilities
$402,246

1.16
$1,161

$403,631

1.21
$1,210

$361,816

0.67
$609
Net interest rate spread

3.18
$3,816


3.06
$3,631


3.31
$3,498
Non-interest bearing deposits
$27,424




$25,445




$28,265



Other liabilities
$3,315




$3,560




$1,360



Stockholder's equity
$60,524




$57,593




$51,916



Total Liabilities and Stockholder's Equity
$493,509




$490,228




$443,357



Cost of funds

1.08



1.14



0.63

Net interest margin

3.35



3.23



3.42













*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:

Six Months Ended


Six Months Ended

June 30, 2019*


June 30, 2018*










Average Balances
Rates/ Yields (%)
Interest Income/ Expense


Average Balances
Rates/ Yields (%)
Interest Income/ Expense









Earning Assets








Loans
$336,014

4.79
$7,987


$301,029

4.43
$6,594
Loan fees
$0

0.03
$48


$0

0.00
$7
Loans with fees
$336,014

4.82
$8,035


$301,029

4.43
$6,601
Mortgage loans held for sale
$69

2.24
$1


$19

4.53
$1
Federal funds sold
$947

2.53
$12


$847

1.92
$8
Deposits with banks
$24,480

2.61
$317


$14,061

1.61
$112
Investment securities - taxable
$74,959

2.59
$969


$67,721

2.19
$740
Investment securities - tax-exempt
$33,843

3.86
$484


$37,835

4.07
$515
Total Earning Assets
$470,312

4.28
$9,818


$421,512

3.94
$7,977
Non interest earning assets








Allowance for loan losses

(3,375
)





(3,105
)


Cash and due from banks
$6,536





$5,841



Premises and equipment
$1,396





$432



Accrued interest receivable
$1,609





$1,280



Other real estate
$0





$0



Other assets
$15,973





$14,476



Unrealized gain (loss) on inv. securities

(572
)





(1,327
)


Total Assets
$491,879





$439,109



Interest bearing liabilities








Interest bearing demand
$26,238

0.83
$108


$28,369

0.37
$52
Savings and Money Market
$335,438

1.16
$1,932


$292,474

0.56
$813
Time deposits - Retail
$11,416

1.24
$70


$12,326

0.69
$42
Time Deposits - Wholesale
$4,580

0.56
$13


$2,083

1.42
$15
Total interest bearing deposits
$377,672

1.13
$2,123


$335,252

0.55
$922
Federal home Loan Bank advances
$23,353

1.98
$233


$22,858

1.74
$200
Other borrowings
$2,201

1.47
$16


$815

2.14
$9
Total borrowed funds
$25,554

1.94
$249


$23,673

1.76
$209
Total interest bearing liabilities
$403,226

1.18
$2,372


$358,925

0.63
$1,131
Net interest rate spread

3.09
$7,446



3.31
$6,846
Non-interest bearing deposits
$26,439





$27,356



Other liabilities
$3,146





$1,374



Stockholder's equity
$59,067





$51,478



Total Liabilities and Stockholder's Equity
$491,878





$439,133



Cost of funds

1.11




0.59

Net interest margin

3.26




3.40










*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.

Company Name:	Truxton Corp
Stock Symbol:	TRUX
Market:	OTC
Website:	www.truxtontrust.com

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