For the twelve months ended
Four | Targets | 2022 | 4Q22 | 3Q22 | 4Q21 | |||||
Annualized revenue growth | > 5% | -9.89% | 33.30% | -19.51% | -5.61% | |||||
Net interest margin | ≥ 3.60% | 3.33% | 3.44% | 3.50% | 3.14% | |||||
Efficiency ratio | ≤ 55% | 57.51% | 53.23% | 62.21% | 54.74% | |||||
Annualized net charge-offs to average loans | ≤ 0.25% | 0.02% | 0.03% | 0.02% | 0.04% |
Concurrently, the Company announced the hiring of a team of experienced SBA professionals from top 10 SBA originators to expand our SBA division and its fee contribution to the bank. Led by newly appointed director
“CapStar’s 2022 performance and results were outstanding,” said
“It is an exciting time at
Revenue
Total revenue, defined as net interest income plus noninterest income, was
As previously communicated, loans produced in our Tri-Net division since the spring have proved challenging to achieve a gain on sale. Additional production was ceased in early July. Third quarter 2022 revenue was negatively impacted by
Fourth quarter net interest income declined
Fourth quarter 2022 average earning assets remained relatively flat at
For the fourth quarter of 2022, the net interest margin decreased 6 basis points from the prior quarter to 3.44% primarily resulting from increased deposit pricing pressure and a shift into higher cost deposit categories.
The Company's average deposits totaled
Noninterest income for the fourth quarter of 2022 was
Noninterest Expense and Operating Efficiency
Noninterest expense was
The efficiency ratio was 53.23% for the quarter ended
Annualized noninterest expense, adjusted for the wire fraud, operational loss and recovery and executive incentive reversal, as a percentage of average assets increased 14 basis points to 2.20% for the quarter ended
Asset Quality
The provision for credit losses for fourth quarter totaled
Past due loans improved to
Non-performing assets to total loans and OREO increased to 0.46% at
The allowance for loan losses plus the fair value mark on acquired loans to total loans increased to 1.13% as of
Asset Quality Data: | ||||||||||
Annualized net charge-offs to average loans | 0.03% | 0.02% | 0.00% | 0.01% | 0.04% | |||||
Criticized and classified loans to total loans | 1.31% | 1.79% | 2.12% | 2.49% | 2.64% | |||||
Loans- past due to total end of period loans | 0.50% | 0.63% | 0.12% | 0.17% | 0.25% | |||||
Loans- over 90 days past due to total end of period loans | 0.44% | 0.27% | 0.02% | 0.05% | 0.11% | |||||
Non-performing assets to total loans held for investment and OREO | 0.46% | 0.30% | 0.11% | 0.18% | 0.18% | |||||
Allowance for loan losses plus fair value marks / Non-PPP Loans | 1.13% | 1.09% | 1.09% | 1.16% | 1.27% | |||||
Allowance for loan losses to non-performing loans | 222% | 333% | 974% | 596% | 666% |
Income Tax Expense
The Company’s fourth quarter effective income tax rate increased slightly to 21% when compared to 20% in the prior quarter ended
Capital
The Company continues to be well capitalized with tangible equity of
Capital ratios: | ||||||||||
Total risk based capital | 14.51% | 14.59% | 14.79% | 15.60% | 16.29% | |||||
Common equity tier 1 capital | 12.61% | 12.70% | 12.87% | 13.58% | 14.11% | |||||
Leverage | 11.40% | 11.22% | 11.10% | 10.99% | 10.69% |
As a component of the Company’s capital allocation strategy,
Dividend
On
Conference Call and Webcast Information
About
NON-GAAP MEASURES
Certain releases may include financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information may include certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations. Such measures may 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”, "Tangible common equity to tangible assets" or other measures.
Management may include 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.
Consolidated Statements of Income (unaudited) (dollars in thousands, except share data)
Fourth quarter 2022 Earnings Release
Three Months Ended | Year Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Interest income: | ||||||||||||||||
Loans, including fees | $ | 30,024 | $ | 22,284 | $ | 101,501 | $ | 89,219 | ||||||||
Securities: | ||||||||||||||||
Taxable | 2,000 | 1,682 | 7,642 | 6,573 | ||||||||||||
Tax-exempt | 310 | 335 | 1,268 | 1,408 | ||||||||||||
Federal funds sold | 45 | 9 | 76 | 21 | ||||||||||||
Restricted equity securities | 240 | 157 | 784 | 640 | ||||||||||||
Interest-bearing deposits in financial institutions | 1,187 | 192 | 2,262 | 598 | ||||||||||||
Total interest income | 33,806 | 24,659 | 113,533 | 98,459 | ||||||||||||
Interest expense: | ||||||||||||||||
Interest-bearing deposits | 2,200 | 410 | 4,479 | 1,626 | ||||||||||||
Savings and money market accounts | 2,701 | 307 | 5,102 | 1,203 | ||||||||||||
Time deposits | 3,151 | 556 | 5,421 | 2,873 | ||||||||||||
Federal funds purchased | — | — | 2 | — | ||||||||||||
401 | — | 862 | 12 | |||||||||||||
Subordinated notes | 394 | 394 | 1,575 | 1,575 | ||||||||||||
Total interest expense | 8,847 | 1,667 | 17,441 | 7,289 | ||||||||||||
Net interest income | 24,959 | 22,992 | 96,092 | 91,170 | ||||||||||||
Provision for loan losses | 1,548 | (651 | ) | 2,474 | (1,066 | ) | ||||||||||
Net interest income after provision for loan losses | 23,411 | 23,643 | 93,618 | 92,236 | ||||||||||||
Noninterest income: | ||||||||||||||||
Deposit service charges | 1,206 | 1,117 | 4,781 | 4,515 | ||||||||||||
Interchange and debit card transaction fees | 1,250 | 1,261 | 5,053 | 4,816 | ||||||||||||
Mortgage banking income | 637 | 2,740 | 5,073 | 16,058 | ||||||||||||
Tri-Net | 39 | 3,996 | 78 | 8,613 | ||||||||||||
Wealth management | 403 | 438 | 1,687 | 1,850 | ||||||||||||
SBA lending | 1,446 | 279 | 2,501 | 2,060 | ||||||||||||
Net gain on sale of securities | 1 | 8 | 8 | 28 | ||||||||||||
Other noninterest income | 1,303 | 1,295 | 5,341 | 4,741 | ||||||||||||
Total noninterest income | 6,285 | 11,134 | 24,522 | 42,681 | ||||||||||||
Noninterest expense: | ||||||||||||||||
Salaries and employee benefits | 9,875 | 10,549 | 38,065 | 41,758 | ||||||||||||
Data processing and software | 2,797 | 2,719 | 11,152 | 11,248 | ||||||||||||
Occupancy | 1,032 | 1,012 | 4,299 | 4,205 | ||||||||||||
Equipment | 753 | 867 | 2,988 | 3,507 | ||||||||||||
Professional services | 522 | 521 | 2,175 | 2,155 | ||||||||||||
Regulatory fees | 266 | 284 | 1,080 | 1,031 | ||||||||||||
Acquisition related expenses | — | — | — | 323 | ||||||||||||
Amortization of intangibles | 399 | 461 | 1,690 | 1,939 | ||||||||||||
Other noninterest expense | 984 | 2,269 | 7,921 | 7,375 | ||||||||||||
Total noninterest expense | 16,628 | 18,682 | 69,370 | 73,541 | ||||||||||||
Income before income taxes | 13,068 | 16,095 | 48,770 | 61,376 | ||||||||||||
Income tax expense | 2,735 | 3,625 | 9,753 | 12,699 | ||||||||||||
Net income | $ | 10,333 | $ | 12,470 | $ | 39,017 | $ | 48,677 | ||||||||
Per share information: | ||||||||||||||||
Basic net income per share of common stock | $ | 0.47 | $ | 0.56 | $ | 1.77 | $ | 2.20 | ||||||||
Diluted net income per share of common stock | $ | 0.47 | $ | 0.56 | $ | 1.77 | $ | 2.19 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 21,887,351 | 22,166,410 | 22,010,462 | 22,127,919 | ||||||||||||
Diluted | 21,926,821 | 22,221,989 | 22,059,855 | 22,179,461 |
This information is preliminary and based on
Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)
Fourth quarter 2022 Earnings Release
Five Quarter Comparison | ||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||
Net interest income | $ | 24,959 | $ | 25,553 | $ | 24,440 | $ | 21,140 | $ | 22,992 | ||||||||||
Provision for loan losses | 1,548 | 867 | 843 | (784 | ) | (651 | ) | |||||||||||||
Net interest income after provision for loan losses | 23,411 | 24,686 | 23,597 | 21,924 | 23,643 | |||||||||||||||
Deposit service charges | 1,206 | 1,251 | 1,182 | 1,142 | 1,117 | |||||||||||||||
Interchange and debit card transaction fees | 1,250 | 1,245 | 1,336 | 1,222 | 1,261 | |||||||||||||||
Mortgage banking | 637 | 765 | 1,705 | 1,966 | 2,740 | |||||||||||||||
Tri-Net | 39 | (2,059 | ) | (73 | ) | 2,171 | 3,996 | |||||||||||||
Wealth management | 403 | 385 | 459 | 440 | 438 | |||||||||||||||
SBA lending | 1,446 | 560 | 273 | 222 | 279 | |||||||||||||||
Net gain (loss) on sale of securities | 1 | 7 | — | — | 8 | |||||||||||||||
Other noninterest income | 1,303 | 1,118 | 994 | 1,926 | 1,295 | |||||||||||||||
Total noninterest income | 6,285 | 3,272 | 5,876 | 9,089 | 11,134 | |||||||||||||||
Salaries and employee benefits | 9,875 | 8,712 | 9,209 | 10,269 | 10,549 | |||||||||||||||
Data processing and software | 2,797 | 2,861 | 2,847 | 2,647 | 2,719 | |||||||||||||||
Occupancy | 1,032 | 1,092 | 1,076 | 1,099 | 1,012 | |||||||||||||||
Equipment | 753 | 743 | 783 | 709 | 867 | |||||||||||||||
Professional services | 522 | 468 | 506 | 679 | 521 | |||||||||||||||
Regulatory fees | 266 | 269 | 265 | 280 | 284 | |||||||||||||||
Acquisition related expenses | — | — | — | — | — | |||||||||||||||
Amortization of intangibles | 399 | 415 | 430 | 446 | 461 | |||||||||||||||
Other noninterest expense | 984 | 3,371 | 1,959 | 1,607 | 2,269 | |||||||||||||||
Total noninterest expense | 16,628 | 17,931 | 17,075 | 17,736 | 18,682 | |||||||||||||||
Net income before income tax expense | 13,068 | 10,027 | 12,398 | 13,277 | 16,095 | |||||||||||||||
Income tax expense | 2,735 | 1,988 | 2,426 | 2,604 | 3,625 | |||||||||||||||
Net income | $ | 10,333 | $ | 8,039 | $ | 9,972 | $ | 10,673 | $ | 12,470 | ||||||||||
Weighted average shares - basic | 21,887,351 | 21,938,259 | 22,022,109 | 22,198,339 | 22,166,410 | |||||||||||||||
Weighted average shares - diluted | 21,926,821 | 21,988,085 | 22,074,260 | 22,254,644 | 22,221,989 | |||||||||||||||
Net income per share, basic | $ | 0.47 | $ | 0.37 | $ | 0.45 | $ | 0.48 | $ | 0.56 | ||||||||||
Net income per share, diluted | 0.47 | 0.37 | 0.45 | 0.48 | 0.56 | |||||||||||||||
Balance Sheet Data (at period end): | ||||||||||||||||||||
Cash and cash equivalents | $ | 135,305 | $ | 199,913 | $ | 113,825 | $ | 355,981 | $ | 415,125 | ||||||||||
Securities available-for-sale | 396,416 | 401,345 | 437,420 | 460,558 | 459,396 | |||||||||||||||
Securities held-to-maturity | 1,240 | 1,762 | 1,769 | 1,775 | 1,782 | |||||||||||||||
Loans held for sale | 44,708 | 43,122 | 85,884 | 106,895 | 83,715 | |||||||||||||||
Loans held for investment | 2,312,798 | 2,290,269 | 2,234,833 | 2,047,555 | 1,965,769 | |||||||||||||||
Allowance for loan losses | (23,806 | ) | (22,431 | ) | (21,684 | ) | (20,857 | ) | (21,698 | ) | ||||||||||
Total assets | 3,117,169 | 3,165,706 | 3,096,537 | 3,190,749 | 3,133,046 | |||||||||||||||
Non-interest-bearing deposits | 512,076 | 628,846 | 717,167 | 702,172 | 725,171 | |||||||||||||||
Interest-bearing deposits | 2,167,743 | 2,004,827 | 1,913,320 | 2,053,823 | 1,959,110 | |||||||||||||||
44,666 | 149,633 | 74,599 | 29,566 | 29,532 | ||||||||||||||||
Total liabilities | 2,762,987 | 2,818,341 | 2,738,802 | 2,821,832 | 2,752,952 | |||||||||||||||
Shareholders' equity | $ | 354,182 | $ | 347,365 | $ | 357,735 | $ | 368,917 | $ | 380,094 | ||||||||||
Total shares of common stock outstanding | 21,714,380 | 21,931,624 | 21,934,554 | 22,195,071 | 22,166,129 | |||||||||||||||
Book value per share of common stock | $ | 16.31 | $ | 15.84 | $ | 16.31 | $ | 16.62 | $ | 17.15 | ||||||||||
Tangible book value per share of common stock * | 14.19 | 13.72 | 14.17 | 14.49 | 14.99 | |||||||||||||||
Tangible book value per share of common stock plus after-tax unrealized available for sale investment losses* | 16.57 | 16.16 | 15.86 | 15.53 | 15.13 | |||||||||||||||
Market value per common share | 17.66 | 18.53 | 19.62 | 21.08 | 21.03 | |||||||||||||||
Capital ratios: | ||||||||||||||||||||
Total risk based capital | 14.51 | % | 14.59 | % | 14.79 | % | 15.60 | % | 16.29 | % | ||||||||||
Tangible common equity to tangible assets* | 10.03 | % | 9.65 | % | 10.19 | % | 10.23 | % | 10.77 | % | ||||||||||
Tangible common equity to tangible assets less after-tax unrealized available for sale investment (gains) losses* | 11.52 | % | 11.17 | % | 11.27 | % | 10.88 | % | 10.86 | % | ||||||||||
Common equity tier 1 capital | 12.61 | % | 12.70 | % | 12.87 | % | 13.58 | % | 14.11 | % | ||||||||||
Leverage | 11.40 | % | 11.22 | % | 11.10 | % | 10.99 | % | 10.69 | % |
_____________________
*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
Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)
Fourth quarter 2022 Earnings Release
Five Quarter Comparison | ||||||||||||||||||||
Average Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | $ | 154,150 | $ | 154,543 | $ | 189,542 | $ | 380,262 | $ | 470,963 | ||||||||||
Investment securities | 415,414 | 450,933 | 473,167 | 483,339 | 491,135 | |||||||||||||||
Loans held for sale | 37,945 | 94,811 | 114,223 | 90,163 | 123,962 | |||||||||||||||
Loans held for investment | 2,309,349 | 2,241,355 | 2,147,750 | 2,001,740 | 1,888,094 | |||||||||||||||
Assets | 3,124,928 | 3,146,841 | 3,128,864 | 3,153,320 | 3,159,308 | |||||||||||||||
Interest-bearing deposits | 2,076,743 | 1,993,172 | 1,936,910 | 1,976,803 | 1,964,641 | |||||||||||||||
Deposits | 2,662,954 | 2,659,268 | 2,664,614 | 2,704,938 | 2,713,314 | |||||||||||||||
74,812 | 88,584 | 70,516 | 29,547 | 29,514 | ||||||||||||||||
Liabilities | 2,776,902 | 2,782,703 | 2,767,714 | 2,773,281 | 2,781,951 | |||||||||||||||
Shareholders' equity | $ | 348,027 | $ | 364,138 | $ | 361,150 | $ | 380,039 | $ | 377,357 | ||||||||||
Performance Ratios: | ||||||||||||||||||||
Annualized return on average assets | 1.31 | % | 1.01 | % | 1.28 | % | 1.37 | % | 1.57 | % | ||||||||||
Annualized return on average equity | 11.78 | % | 8.76 | % | 11.08 | % | 11.39 | % | 13.11 | % | ||||||||||
Net interest margin (1) | 3.44 | % | 3.50 | % | 3.41 | % | 2.97 | % | 3.14 | % | ||||||||||
Annualized noninterest income to average assets | 0.80 | % | 0.41 | % | 0.75 | % | 1.17 | % | 1.40 | % | ||||||||||
Efficiency ratio | 53.23 | % | 62.21 | % | 56.32 | % | 58.67 | % | 54.74 | % | ||||||||||
Loans by Type (at period end): | ||||||||||||||||||||
Commercial and industrial | $ | 496,347 | $ | 499,048 | $ | 510,987 | $ | 499,719 | $ | 497,615 | ||||||||||
Commercial real estate - owner occupied | 246,109 | 235,519 | 241,461 | 231,933 | 209,261 | |||||||||||||||
Commercial real estate - non-owner occupied | 803,611 | 832,156 | 786,610 | 652,936 | 616,023 | |||||||||||||||
Construction and development | 229,972 | 198,869 | 205,573 | 208,513 | 214,310 | |||||||||||||||
Consumer real estate | 402,615 | 386,628 | 357,849 | 327,416 | 326,412 | |||||||||||||||
Consumer | 53,382 | 52,715 | 53,227 | 48,790 | 46,811 | |||||||||||||||
Other | 80,762 | 85,334 | 79,126 | 78,248 | 55,337 | |||||||||||||||
Asset Quality Data: | ||||||||||||||||||||
Allowance for loan losses to total loans | 1.03 | % | 0.98 | % | 0.97 | % | 1.02 | % | 1.10 | % | ||||||||||
Allowance for loan losses to non-performing loans | 222 | % | 333 | % | 974 | % | 596 | % | 666 | % | ||||||||||
Nonaccrual loans | 10,714 | 6,734 | 2,225 | 3,502 | 3,258 | |||||||||||||||
Troubled debt restructurings | 344 | 344 | 86 | 1,847 | 1,832 | |||||||||||||||
Loans - over 90 days past due | 10,222 | 6,096 | 494 | 1,076 | 2,120 | |||||||||||||||
Total non-performing loans | 10,714 | 6,734 | 2,225 | 3,502 | 3,258 | |||||||||||||||
OREO and repossessed assets | - | 165 | 165 | 178 | 266 | |||||||||||||||
Total non-performing assets | $ | 10,714 | $ | 6,899 | $ | 2,390 | $ | 3,680 | $ | 3,524 | ||||||||||
Non-performing loans to total loans held for investment | 0.46 | % | 0.29 | % | 0.10 | % | 0.17 | % | 0.17 | % | ||||||||||
Non-performing assets to total assets | 0.34 | % | 0.22 | % | 0.08 | % | 0.12 | % | 0.11 | % | ||||||||||
Non-performing assets to total loans held for investment and OREO | 0.46 | % | 0.30 | % | 0.11 | % | 0.18 | % | 0.18 | % | ||||||||||
Annualized net charge-offs to average loans | 0.03 | % | 0.02 | % | 0.00 | % | 0.01 | % | 0.04 | % | ||||||||||
Net charge-offs | $ | 172 | $ | 120 | $ | 16 | $ | 59 | $ | 184 | ||||||||||
Interest Rates and Yields: | ||||||||||||||||||||
Loans | 5.03 | % | 4.62 | % | 4.25 | % | 3.97 | % | 4.47 | % | ||||||||||
Securities (1) | 2.53 | % | 2.29 | % | 2.11 | % | 1.92 | % | 1.84 | % | ||||||||||
Total interest-earning assets (1) | 4.66 | % | 4.17 | % | 3.69 | % | 3.20 | % | 3.36 | % | ||||||||||
Deposits | 1.20 | % | 0.62 | % | 0.23 | % | 0.19 | % | 0.19 | % | ||||||||||
Borrowings and repurchase agreements | 4.22 | % | 3.41 | % | 2.79 | % | 5.40 | % | 5.29 | % | ||||||||||
Total interest-bearing liabilities | 1.63 | % | 0.93 | % | 0.41 | % | 0.33 | % | 0.33 | % | ||||||||||
Other Information: | ||||||||||||||||||||
Full-time equivalent employees | 397 | 387 | 391 | 397 | 397 |
_____________________
This information is preliminary and based on
(1) Net Interest Margin, Securities yields, and Total interest-earning asset yields are calculated on a tax-equivalent basis.
Analysis of Interest Income and Expense, Rates and Yields (unaudited) (dollars in thousands)
Fourth quarter 2022 Earnings Release
For the Three Months Ended | ||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||
Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate | Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate | |||||||||||||||||||
Interest-Earning Assets | ||||||||||||||||||||||||
Loans held for investment (1) | $ | 2,309,349 | $ | 29,278 | 5.03 | % | $ | 1,888,094 | $ | 21,291 | 4.47 | % | ||||||||||||
Loans held for sale | 37,945 | 746 | 7.80 | % | 123,962 | 993 | 3.18 | % | ||||||||||||||||
Securities: | ||||||||||||||||||||||||
Taxable investment securities (2) | 361,563 | 2,239 | 2.48 | % | 432,165 | 1,839 | 1.70 | % | ||||||||||||||||
Investment securities exempt from federal income tax (3) | 53,851 | 310 | 2.91 | % | 58,970 | 335 | 2.88 | % | ||||||||||||||||
Total securities | 415,414 | 2,549 | 2.53 | % | 491,135 | 2,174 | 1.84 | % | ||||||||||||||||
Cash balances in other banks | 122,493 | 1,187 | 3.84 | % | 397,381 | 192 | 0.19 | % | ||||||||||||||||
Funds sold | 1,608 | 46 | — | 19,906 | 9 | — | ||||||||||||||||||
Total interest-earning assets | 2,886,809 | 33,806 | 4.66 | % | 2,920,478 | 24,659 | 3.36 | % | ||||||||||||||||
Noninterest-earning assets | 238,119 | 238,830 | ||||||||||||||||||||||
Total assets | $ | 3,124,928 | $ | 3,159,308 | ||||||||||||||||||||
Interest-Bearing Liabilities | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 741,347 | 2,200 | 1.18 | % | $ | 964,932 | 410 | 0.17 | % | ||||||||||||||
Savings and money market deposits | 717,999 | 2,701 | 1.49 | % | 616,610 | 307 | 0.20 | % | ||||||||||||||||
Time deposits | 617,397 | 3,151 | 2.02 | % | 383,099 | 556 | 0.58 | % | ||||||||||||||||
Total interest-bearing deposits | 2,076,743 | 8,052 | 1.54 | % | 1,964,641 | 1,273 | 0.26 | % | ||||||||||||||||
Borrowings and repurchase agreements | 74,812 | 795 | 4.22 | % | 29,514 | 394 | 5.29 | % | ||||||||||||||||
Total interest-bearing liabilities | 2,151,555 | 8,847 | 1.63 | % | 1,994,155 | 1,667 | 0.33 | % | ||||||||||||||||
Noninterest-bearing deposits | 586,211 | 748,673 | ||||||||||||||||||||||
Total funding sources | 2,737,766 | 2,742,828 | ||||||||||||||||||||||
Noninterest-bearing liabilities | 39,135 | 39,123 | ||||||||||||||||||||||
Shareholders’ equity | 348,027 | 377,357 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 3,124,928 | $ | 3,159,308 | ||||||||||||||||||||
Net interest spread (4) | 3.03 | % | 3.03 | % | ||||||||||||||||||||
Net interest income/margin (5) | $ | 24,959 | 3.44 | % | $ | 22,992 | 3.14 | % |
_____________________
(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
Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)
Fourth quarter 2022 Earnings Release
Five Quarter Comparison | ||||||||||||||||||||
Operating net income: | ||||||||||||||||||||
Net income | $ | 10,333 | $ | 8,039 | $ | 9,972 | $ | 10,673 | $ | 12,470 | ||||||||||
Add: acquisition related expenses | — | — | — | — | — | |||||||||||||||
Less: income tax impact of acquisition related expenses | — | — | — | — | — | |||||||||||||||
Operating net income | $ | 10,333 | $ | 8,039 | $ | 9,972 | $ | 10,673 | $ | 12,470 | ||||||||||
Operating diluted net income per share of common stock: | ||||||||||||||||||||
Operating net income | $ | 10,333 | $ | 8,039 | $ | 9,972 | $ | 10,673 | $ | 12,470 | ||||||||||
Weighted average shares - diluted | 21,926,821 | 21,988,085 | 22,074,260 | 22,254,644 | 22,221,989 | |||||||||||||||
Operating diluted net income per share of common stock | $ | 0.47 | $ | 0.37 | $ | 0.45 | $ | 0.48 | $ | 0.56 | ||||||||||
Operating annualized return on average assets: | ||||||||||||||||||||
Operating net income | $ | 10,333 | $ | 8,039 | $ | 9,972 | $ | 10,673 | $ | 12,470 | ||||||||||
Average assets | $ | 3,124,928 | $ | 3,146,841 | $ | 3,128,864 | $ | 3,153,320 | $ | 3,159,308 | ||||||||||
Operating annualized return on average assets | 1.31 | % | 1.01 | % | 1.28 | % | 1.37 | % | 1.57 | % | ||||||||||
Operating annualized return on average tangible equity: | ||||||||||||||||||||
Average total shareholders' equity | $ | 348,027 | $ | 364,138 | $ | 361,150 | $ | 380,039 | $ | 377,357 | ||||||||||
Less: average intangible assets | (46,328 | ) | (46,737 | ) | (47,160 | ) | (47,604 | ) | (48,054 | ) | ||||||||||
Average tangible equity | 301,699 | 317,401 | 313,990 | 332,435 | 329,303 | |||||||||||||||
Operating net income | $ | 10,333 | $ | 8,039 | $ | 9,972 | $ | 10,673 | $ | 12,470 | ||||||||||
Operating annualized return on average tangible equity | 13.59 | % | 10.05 | % | 12.74 | % | 13.02 | % | 15.02 | % | ||||||||||
Operating efficiency ratio: | ||||||||||||||||||||
Total noninterest expense | $ | 16,628 | $ | 17,931 | $ | 17,075 | $ | 17,736 | $ | 18,682 | ||||||||||
Less: acquisition related expenses | — | — | — | — | — | |||||||||||||||
Total operating noninterest expense | 16,628 | 17,931 | 17,075 | 17,736 | 18,682 | |||||||||||||||
Net interest income | 24,959 | 25,553 | 24,440 | 21,140 | 22,992 | |||||||||||||||
Total noninterest income | 6,285 | 3,272 | 5,876 | 9,089 | 11,134 | |||||||||||||||
Total revenues | $ | 31,244 | $ | 28,825 | $ | 30,316 | $ | 30,229 | $ | 34,126 | ||||||||||
Operating efficiency ratio: | 53.23 | % | 62.21 | % | 56.32 | % | 58.67 | % | 54.74 | % | ||||||||||
Operating annualized pre-tax pre-provision income to average assets: | ||||||||||||||||||||
Income before income taxes | $ | 13,068 | $ | 10,027 | $ | 12,398 | $ | 13,277 | $ | 16,095 | ||||||||||
Add: acquisition related expenses | — | — | — | — | — | |||||||||||||||
Add: provision for loan losses | 1,548 | 867 | 843 | (784 | ) | (651 | ) | |||||||||||||
Operating pre-tax pre-provision income | 14,616 | 10,894 | 13,241 | 12,493 | 15,444 | |||||||||||||||
Average assets | $ | 3,124,928 | $ | 3,146,841 | $ | 3,128,864 | $ | 3,153,320 | $ | 3,159,308 | ||||||||||
Operating annualized pre-tax pre-provision income to average assets: | 1.86 | % | 1.37 | % | 1.70 | % | 1.61 | % | 1.94 | % |
Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)
Fourth quarter 2022 Earnings Release
Five Quarter Comparison | ||||||||||||||||||||
Tangible Equity: | ||||||||||||||||||||
Total shareholders' equity | $ | 354,182 | $ | 347,365 | $ | 357,735 | $ | 368,917 | $ | 380,094 | ||||||||||
Less: intangible assets | (46,069 | ) | (46,468 | ) | (46,883 | ) | (47,313 | ) | (47,759 | ) | ||||||||||
Tangible equity | $ | 308,113 | $ | 300,897 | $ | 310,852 | $ | 321,604 | $ | 332,335 | ||||||||||
Tangible book value per share of common stock: | ||||||||||||||||||||
Tangible equity | $ | 308,113 | $ | 300,897 | $ | 310,852 | $ | 321,604 | $ | 332,335 | ||||||||||
Total shares of stock outstanding | 21,714,380 | 21,931,624 | 21,934,554 | 22,195,071 | 22,166,129 | |||||||||||||||
Tangible book value per share of common stock | $ | 14.19 | $ | 13.72 | $ | 14.17 | $ | 14.49 | $ | 14.99 | ||||||||||
Tangible book value per share of common stock plus after-tax unrealized available for sale investment losses: | ||||||||||||||||||||
Total shareholders' equity | $ | 354,182 | $ | 347,365 | $ | 357,735 | $ | 368,917 | $ | 380,094 | ||||||||||
Less: intangible assets | (46,069 | ) | (46,468 | ) | (46,883 | ) | (47,313 | ) | (47,759 | ) | ||||||||||
Add: after-tax unrealized available for sale investment (gains) losses | 51,760 | 53,488 | 37,034 | 23,041 | 2,978 | |||||||||||||||
Tangible equity plus after-tax unrealized available for sale investment (gains) losses | $ | 359,873 | $ | 354,385 | $ | 347,886 | $ | 344,645 | $ | 335,313 | ||||||||||
Total shares of common stock outstanding | 21,714,380 | 21,931,624 | 21,934,554 | 22,195,071 | 22,166,129 | |||||||||||||||
Tangible book value per share of common stock plus after-tax unrealized available for sale investment losses | $ | 16.57 | $ | 16.16 | $ | 15.86 | $ | 15.53 | $ | 15.13 | ||||||||||
Tangible common equity to tangible assets: | ||||||||||||||||||||
Tangible equity | $ | 308,113 | $ | 300,897 | $ | 310,852 | $ | 321,604 | $ | 332,335 | ||||||||||
Assets | $ | 3,117,169 | $ | 3,165,706 | $ | 3,096,537 | $ | 3,190,749 | $ | 3,133,046 | ||||||||||
Less: intangible assets | (46,069 | ) | (46,468 | ) | (46,883 | ) | (47,313 | ) | (47,759 | ) | ||||||||||
Tangible assets | $ | 3,071,100 | $ | 3,119,238 | $ | 3,049,654 | $ | 3,143,436 | $ | 3,085,287 | ||||||||||
Tangible common equity to tangible assets | 10.03 | % | 9.65 | % | 10.19 | % | 10.23 | % | 10.77 | % | ||||||||||
Tangible common equity to tangible assets plus after-tax unrealized available for sale investment losses: | ||||||||||||||||||||
Tangible equity plus after-tax unrealized available for sale investment losses | $ | 359,873 | $ | 354,385 | $ | 347,886 | $ | 344,645 | $ | 335,313 | ||||||||||
Tangible assets | $ | 3,071,100 | $ | 3,119,238 | $ | 3,049,654 | $ | 3,143,436 | $ | 3,085,287 | ||||||||||
Add: after-tax unrealized available for sale investment losses | 51,760 | 53,488 | 37,034 | 23,041 | 2,978 | |||||||||||||||
Tangible assets plus after-tax unrealized available for sale investment losses | $ | 3,122,860 | $ | 3,172,726 | $ | 3,086,688 | $ | 3,166,477 | $ | 3,088,265 | ||||||||||
Tangible common equity to tangible assets plus after-tax unrealized available for sale investment losses | 11.52 | % | 11.17 | % | 11.27 | % | 10.88 | % | 10.86 | % |
Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)
Fourth quarter 2022 Earnings Release
Average loans held for investment | $ | 2,309,349 | $ | 2,241,355 | $ | 2,147,750 | ||||||
Less: Average PPP Loans | (496 | ) | (834 | ) | (3,337 | ) | ||||||
Less: Average Tri-Net transfers from held for sale to held for investment | (115,386 | ) | (106,590 | ) | (58,757 | ) | ||||||
Loans held for investment excluding PPP loans and Tri-Net transfers | 2,193,467 | 2,133,931 | 2,085,656 | |||||||||
Annualized loans held for investment growth excluding PPP and Tri-Net transfers | 11.1 | % | 9.2 | % |
Net interest income | $ | 24,959 | $ | 25,553 | ||||
Noninterest income | 6,285 | 3,272 | ||||||
Less: Tri-Net losses | — | 2,059 | ||||||
Noninterest income excluding Tri-Net losses | 6,285 | 5,331 | ||||||
Total income excluding Tri-Net losses | 31,244 | 30,884 | ||||||
Noninterest expense | 16,628 | 17,931 | ||||||
Less: Operational recoveries (losses) | 734 | (2,197 | ) | |||||
Less: Executive incentive reversal | — | 770 | ||||||
Noninterest expense excluding operational losses and incentive reversal | 17,362 | 16,504 | ||||||
Efficiency ratio excluding Tri-Net losses, operational losses, and executive incentive reversal | 55.57 | % | 53.44 | % |
Five Quarter Comparison | ||||||||||||||||||||
Allowance for loan losses | $ | 23,806 | $ | 22,431 | $ | 21,684 | $ | 20,857 | $ | 21,698 | ||||||||||
Purchase accounting marks | 2,438 | 2,535 | 2,717 | 2,838 | 3,003 | |||||||||||||||
Allowance for loan losses and purchase accounting fair value marks | 26,244 | 24,966 | 24,401 | 23,695 | 24,701 | |||||||||||||||
Loans held for investment | 2,312,798 | 2,290,269 | 2,234,833 | 2,047,555 | 1,965,769 | |||||||||||||||
Less: PPP Loans net of deferred fees | 221 | 748 | 921 | 6,529 | 26,539 | |||||||||||||||
Non-PPP Loans | 2,312,577 | 2,289,521 | 2,233,912 | 2,041,026 | 1,939,230 | |||||||||||||||
Allowance for loan losses plus fair value marks / Non-PPP Loans | 1.13 | % | 1.09 | % | 1.09 | % | 1.16 | % | 1.27 | % |
_____________________
(1) Net interest margin and adjusted net interest margin are shown on a tax equivalent basis.
CONTACT
Chief Financial Officer
(615) 732-7404
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