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home / news releases / TRUX - Truxton Corporation Reports Second Quarter 2023 Results

TRUX - Truxton Corporation Reports Second Quarter 2023 Results

Truxton Corp

NASHVILLE, Tenn., July 20, 2023 (GLOBE NEWSWIRE) -- Truxton Corporation, the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended June 30, 2023. Second quarter net income attributable to common shareholders was $4.5 million or $1.53 per diluted share compared to $4.1 million or $1.41 per diluted share for the same quarter in 2022. Net income and fully diluted earnings per share for the quarter rose by 8% and 9%, respectively, compared to the second quarter of 2022.

“Truxton had another great quarter despite the challenges facing financial institutions,” said Chairman and CEO Tom Stumb. “Net interest margin compressed but our resilient business model with significant non-interest income allowed for continued earnings growth. Our home market of Nashville continues to experience exceptional strength, supporting our growth and credit quality.”

Key Highlights

  • Non-interest income grew to $4.8 million in the second quarter, an increase of 6% from the first quarter of 2023 and 13% higher in comparison to the second quarter of 2022. Wealth management services constituted 93% of non-interest income in the second quarter of 2023 compared to 94% in the first quarter of 2023 and 95% in the second quarter of 2022.
  • Gross loans rose by less than 1% to $628 million at quarter end compared to $626 million on March 31, 2023 and were up 10% compared to $570 million on June 30, 2022.
  • Total deposits increased by 2% from $771 million at March 31, 2023, to $790 million at June 30, 2023, and were 1% higher in comparison to $782 million at June 30, 2022. Truxton continues to principally fund its growth from a single banking location led by its commitment to provide what it believes is superior deposit operations service and technology. As a result, occupancy expenditures and fixed asset investments remain a fraction of typical peers.
  • Net interest margin for the second quarter of 2023 was 2.54%, a decrease of 21 basis points from the 2.75% experienced in the quarter ended March 31, 2023, and 29 basis points lower than 2.83% in the quarter ended June 30, 2022. Cost of funds was 2.80% in the second quarter of 2023, up from 2.27% for the quarter ended March 31, 2023, and up from 0.50% for the quarter ended June 30, 2022.
  • Asset quality remains sound at Truxton. Truxton had $0 in non-performing assets on June 30, 2023. Truxton had $0 of net charge-offs in the second quarter of 2023, $2 thousand in recoveries in the trailing quarter, and $0 of net charge-offs in the second quarter of 2022.
  • Truxton adopted the mandated Current Expected Credit Loss accounting methodology for calculating its allowance for credit losses effective January 1, 2023. The Allowance for Credit Losses was $6.0 million at quarter end June 30, 2023, and at quarter end March 31, 2023, each excluding $0.5 million in allowance for unfunded commitments, compared to Allowance for Loan and Lease Losses of $5.5 million at June 30, 2022. For the same three periods, the Bank’s allowance was 0.95%, 0.95%, and 0.96%, respectively, of gross loans outstanding at period end.
  • The Bank’s capital position remains strong. Its Tier 1 leverage ratio was 10.39% at June 30, 2023, compared to 10.29% at March 31, 2023, and 9.63% at June 30, 2022. Book value per common share was $27.01, $25.71, and $24.49 at June 30, 2023, March 31, 2023, and June 30, 2022, respectively. During the six months ended June 30, 2023, Truxton Corporation paid dividends of $1.76 per common share, inclusive of a $1.00 special cash dividend.

About Truxton Trust
Truxton Trust Company is a provider of private banking, wealth management, trust, capital markets 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
Media Relations
Austin Branstetter
Swan Burrus
615-250-0783
615-250-0773
austin.branstetter@truxtontrust.com
swan.burrus@truxtontrust.com


Truxton Corporation
Consolidated Balance Sheets
(000’s)
(Unaudited)
June 30, 2023*
March 31, 2023*
June 30, 2022*
ASSETS
Cash and due from financial institutions
$
30,617
$
8,955
$
6,145
Interest bearing deposits in other financial institutions
2,848
4,322
670
Federal funds sold
1,705
10
114
Cash and cash equivalents
35,171
13,288
6,929
Time deposits in other financial institutions
250
1,260
2,283
Securities available for sale
272,474
253,372
273,689
Gross loans, excluding Paycheck Protection Program
627,576
625,626
569,969
Allowance for credit losses**
(5,982
)
(5,961
)
(5,468
)
Paycheck Protection Program Loans
80
90
121
Net loans
621,674
619,754
564,622
Bank owned life insurance
10,698
10,644
10,490
Restricted equity securities
5,011
5,391
3,258
Premises and equipment, net
575
222
223
Accrued interest receivable
11,782
9,752
2,748
Deferred tax asset, net
6,623
6,842
5,335
Other assets
1,387
1,369
7,192
Total assets
$
965,644
$
921,894
$
876,769
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Non-interest bearing
$
152,071
$
151,956
$
190,911
Interest bearing
637,595
619,542
591,081
Total deposits
789,665
771,499
781,992
Federal funds purchased
-
2,417
-
Swap counterparty cash collateral
3,780
2,860
-
Federal Home Loan Bank advances
16,500
9,500
4,500
Federal Reserve Bank Term Funding Program advances
55,000
40,000
-
Subordinated debt
14,946
14,752
14,847
Other liabilities
7,083
6,078
4,468
Total liabilities
886,974
847,106
805,807
SHAREHOLDERS’ EQUITY
Common stock, $0.10 par value
$
289
$
289
$
285
Additional paid-in capital
31,743
31,336
30,972
Retained earnings
62,627
59,281
53,070
Accumulated other comprehensive income (loss)
(15,989
)
(16,118
)
13,366
Total shareholders’ equity
78,670
74,788
97,693
Total liabilities and shareholders’ equity
$
965,644
$
921,894
$
903,500
*The information is preliminary, unaudited and based on company data available at the time of presentation.
**2022 data shows Allowance for loan losses. Truxton adopted the Current Expected Credit Loss methodology as of January 1, 2023. The total excludes reserve for credit losses on unfunded commitments recorded in Other liabilities in 2023.


Truxton Corporation
Consolidated Statements of Net Income
(000’s)
(Unaudited)
Three Months Ended
Year To Date
June 30, 2023*
March 31, 2023*
June 30, 2022*
June 30, 2023*
June 30, 2022*
Non-interest income
Wealth management services
$
4,442
$
4,171
$
4,056
$
8,613
$
8,237
Service charges on deposit accounts
139
136
106
276
205
Securities gains (losses), net
0
58
(30
)
58
(47
)
Bank owned life insurance income
54
52
51
106
101
Other
133
95
38
228
86
Total non-interest income
4,769
4,512
4,221
9,281
8,582
Interest income
Loans, including fees
$
9,107
$
8,487
$
5,473
$
17,594
$
10,311
Taxable securities
2,267
1,954
1,143
4,221
2,257
Tax-exempt securities
217
233
396
450
793
Interest bearing deposits
55
61
48
117
79
Federal funds sold
18
11
3
29
4
Other interest income
134
61
47
195
62
Total interest income
11,798
10,809
7,110
22,606
13,506
Interest expense
Deposits
4,938
4,216
807
9,155
1,393
Short-term borrowings
52
58
4
110
5
Long-term borrowings
817
237
194
1,054
388
Subordinated debentures
194
194
22
388
46
Total interest expense
6,001
4,705
1,027
10,706
1,832
Net interest income
5,797
6,103
6,083
11,900
11,674
Provision for credit losses
15
59
586
74
691
Net interest income after provision for loan losses
5,782
6,044
5,497
11,826
10,983
Total revenue, net
10,550
10,556
9,718
21,107
19,565
Non interest expense
Salaries and employee benefits
3,663
3,766
3,469
7,429
6,980
Occupancy
314
286
243
600
495
Furniture and equipment
20
25
29
45
61
Data processing
455
427
354
882
720
Wealth management processing fees
176
176
159
352
324
Advertising and public relations
35
46
21
81
53
Professional services
54
116
179
169
345
FDIC insurance assessments
75
75
57
150
114
Other
279
397
214
676
455
Total non interest expense
5,070
5,314
4,725
10,384
9,547
Income before income taxes
5,481
5,242
4,993
10,722
10,018
Income tax expense
1,028
951
883
1,979
1,681
Net income
$
4,453
$
4,291
$
4,110
$
8,743
$
8,337
Earnings per share:
Basic
$
1.53
$
1.48
$
1.41
$
3.01
$
2.87
Diluted
$
1.53
$
1.47
$
1.41
$
3.00
$
2.86
*The information is preliminary, unaudited and based on company data available at the time of presentation. Totals may not foot due to rounding.


Truxton Corporation
Selected Quarterly Financial data
At Or For The Three Months Ended
(000’s)
(Unaudited)
June 30, 2023*
March 31, 2023*
June 30, 2022*
Per Common Share Data
Net income attributable to shareholders, per share
Basic
$1.53
$1.48
$1.41
Diluted
$1.53
$1.47
$1.41
Book value per common share
$27.01
$25.71
$24.49
Tangible book value per common share
$27.01
$25.71
$24.49
Basic weighted average common shares
2,830,894
2,820,892
2,822,292
Diluted weighted average common shares
2,838,321
2,830,504
2,835,394
Common shares outstanding at period end
2,912,781
2,908,483
2,898,167
Selected Balance Sheet Data
Tangible common equity (TCE) ratio
8.15%
8.11%
8.09%
Average Loans
$629,899
$622,012
$544,496
Average earning assets (1)
$932,732
$912,603
$875,238
Average total assets
$939,007
$918,440
$890,088
Average stockholders’ equity
$76,536
$75,557
$83,192
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)
$0
$12
$0
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 credit losses to total loans**
0.95%
0.95%
0.96%
Net charge offs to average loans
0.00%
0.00%
0.00%
Capital Ratios (Bank Subsidiary Only)
Tier 1 leverage
10.39%
10.29%
9.63%
Common equity tier 1
14.25%
13.79%
12.97%
Total risk-based capital
15.18%
14.74%
13.80%
Selected Performance Ratios
Efficiency ratio
48.56%
51.32%
48.46%
Return on average assets (ROA)
1.90%
1.89%
1.85%
Return on average stockholders’ equity (ROE)
23.33%
23.05%
22.52%
Return on average tangible common equity (ROTCE)
23.33%
23.05%
22.52%
Net interest margin
2.54%
2.75%
2.83%
*The information is preliminary, unaudited and based on company data available at the time of presentation.
**2022 data shows Allowance for loan losses. Truxton adopted the Current Expected Credit Loss methodology as of January 1, 2023. 2023 ratios do not include reserve for unfunded commitments
(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, and investment 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, 2023*
March 31, 2023*
June 30, 2022*
Average Balances
Rates/Yields (%)
Interest Income/ Expense
Average Balances
Rates/Yields (%)
Interest Income/ Expense
Average Balances
Rates/Yields (%)
Interest Income/ Expense
Earning Assets
Loans
$629,899
5.72
$8,989
$622,012
5.46
$8,376
$544,496
3.90
$5,299
Loan fees
$0
0.08
$119
$0
0.07
$111
$0
0.13
$174
Loans with fees
$629,899
5.80
$9,107
$622,012
5.53
$8,487
$544,496
4.03
$5,473
Mortgage loans held for sale
$0
0.00
$0
$0
0.00
$0
$53
4.53
$1
Federal funds sold
$1,456
4.85
$18
$866
5.15
$11
$2,255
0.55
$3
Deposits with banks
$15,618
4.95
$193
$11,749
4.38
$127
$28,206
0.68
$48
Investment securities - taxable
$247,515
3.66
$2,267
$237,601
3.29
$1,954
$234,780
1.95
$1,143
Investment securities - tax-exempt
$38,243
3.39
$217
$40,376
3.45
$233
$65,448
3.27
$396
Total Earning Assets
$932,732
5.12
$11,802
$912,603
4.84
$10,812
$875,238
3.30
$7,064
Non interest earning assets
Allowance for loan losses
(5,959
)
(6,279
)
(5,105
)
Cash and due from banks
$6,092
$6,547
$9,244
Premises and equipment
$164
$202
$248
Accrued interest receivable
$3,213
$2,843
$2,278
Other real estate
$0
$0
$0
Other assets
$28,375
$28,601
$24,350
Unrealized gain (loss) on inv. securities
(25,610
)
(26,077
)
(16,166
)
Total Assets
$939,007
$918,440
$890,087
Interest bearing liabilities
Interest bearing demand
$341,780
3.14
$2,673
$366,260
2.80
$2,529
$365,521
0.05
$44
Savings and money market
$139,463
2.62
$912
$127,422
1.70
$533
$135,122
1.76
$594
Time deposits - retail
$16,758
2.40
$100
$18,256
1.93
$87
$16,400
0.87
$36
Time deposits - wholesale
$128,795
3.90
$1,254
$133,704
3.24
$1,067
$82,376
0.65
$134
Total interest bearing deposits
$626,796
3.16
$4,938
$645,642
2.65
$4,216
$599,419
0.54
$807
Federal Home Loan Bank advances
$18,907
4.27
$204
$16,844
4.09
$172
$4,500
1.98
$22
Subordinated debt
$14,876
5.16
$193,899
$15,001
5.17
$194
$14,776
5.19
$194
Other borrowings
$58,342
5.86
$858
$11,451
4.57
$123
$1,236
2.23
$4
Total borrowed funds
$92,125
4.56
$1,062
$43,296
4.52
$489
$20,512
4.25
$220
Total interest bearing liabilities
$718,921
3.34
$6,000
$688,938
2.77
$4,705
$619,931
0.66
$1,027
Net interest rate spread
1.78
$5,801
2.08
$6,107
2.64
$6,037
Non-interest bearing deposits
$139,807
$150,259
$193,872
Other liabilities
$3,743
$3,686
$3,092
Stockholder’s equity
$76,536
$75,557
$73,192
Total Liabilities and Stockholder’s Equity
$939,007
$918,440
$890,087
Cost of funds
2.80
2.27
0.50
Net interest margin
2.54
2.75
2.83
*The information is preliminary, unaudited and based on company data available at the time of presentation. Totals may not foot due to rounding.
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, 2023*
June 30, 2022*
Average Balances
Rates/Yield (%)
Interest Income/Expense
Average Balances
Rates/Yields (%)
Interest Income/Expense
Earning Assets
Loans
$625,977
5.59
$9,885
$521,752
3.85
$9,885
Loan fees
$0
0.07
$434
$0
0.17
$434
Loans with fees
$625,977
5.67
$10,319
$521,752
3.99
$10,319
Mortgage loans held for sale
$0
0.00
$1
$57
4.10
$1
Federal funds sold
$1,162
4.96
$4
$1,997
0.39
$4
Deposits with banks
$13,695
4.71
$79
$31,100
0.51
$79
Investment securities - taxable
$242,585
3.48
$2,257
$237,194
1.90
$2,257
Investment securities - tax-exempt
$39,304
3.42
$792
$66,090
3.24
$792
Total Earning Assets
$922,723
4.98
$13,452
$858,190
3.22
$13,452
Non interest earning assets
Allowance for loan losses
(6,118
)
(4,942
)
Cash and due from banks
$6,318
$8,648
Premises and equipment
$183
$272
Accrued interest receivable
$3,029
$2,172
Other real estate
$0
$0
Other assets
$28,487
$22,425
Unrealized gain (loss) on inv. securities
(25,842
)
(8,441
)
Total Assets
$928,780
$878,324
Interest bearing liabilities
Interest bearing demand
$353,953
2.96
$72
$364,279
0.04
$72
Savings and Money Market
$133,476
2.18
$1,117
$149,534
1.51
$1,117
Time deposits - Retail
$17,503
2.16
$48
$13,582
0.72
$48
Time Deposits - Wholesale
$131,236
3.57
$155
$61,202
0.51
$155
Total interest bearing deposits
$636,167
2.90
$1,393
$588,597
0.48
$1,393
Federal home Loan Bank advances
$17,881
4.19
$46
$5,384
1.69
$46
Subordinated debt
$14,939
5.16
$388
$14,820
5.20
$388
Other borrowings
$35,025
5.22
$4
$1,060
1.98
$4
Total borrowed funds
$67,845
4.55
$438
$21,264
4.10
$438
Total interest bearing liabilities
$704,012
3.06
$1,831
$609,861
0.60
$1,831
Net interest rate spread
1.92
$11,621
2.62
$11,621
Non-interest bearing deposits
$145,004
$186,821
Other liabilities
$3,715
$3,569
Stockholder’s equity
$76,049
$78,073
Total Liabilities and Stockholder’s Equity
$928,780
$878,324
Cost of funds
2.54
0.46
Net interest margin
2.65
2.79
*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.

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