Oakworth Capital Inc. Reports Fourth Quarter and Fiscal Year 2023 Financial Results

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Oakworth Capital Inc. (OAKC) reported strong balance sheet growth in fiscal year 2023, with 30% average loan growth and 12% average deposit growth. Earnings were $4.7 million or $0.96 per share, diluted, impacted by $7.4 million of provisioning related to a single credit. The company's Chairman and CEO, Scott Reed, highlighted investments in growth and infrastructure, with plans to realize returns in 2024. Despite a significant credit loss, profitable growth continues according to plan. Wealth assets increased 12% year-over-year to $2.0 billion, and Tier 1 Capital was 9.7% at the end of 2023.

BIRMINGHAM, Ala., Jan. 24, 2024 /PRNewswire/ -- Oakworth Capital Inc. (OTCQX: OAKC) reported strong balance sheet growth in fiscal year 2023 including 30% average loan growth (28% year end 2023 vs. year end 2022) and 12% average deposit growth (21% fiscal year end 2023 vs. 2022).  Earnings, which were impacted by $7.4 million, net of tax, of provisioning related to a single credit, were $4.7 million or $0.96 per share, diluted. 

Oakworth's Chairman and CEO Scott Reed stated, "2023 was a year of investing in growth. We invested in all of our markets, including the opening of our Central Carolinas office, and in our infrastructure. We look forward to realizing the return on those investments in 2024 and beyond." Mr. Reed continued, "We did realize our first credit loss of significance in our 15-year history. Even though credit losses are a normal part of a bank's business, we are accustomed to pristine credit quality and take much pride in our track record.  Excluding the impact of this charge-off, our profitable growth continues according to our plan."

The aforementioned credit, which was charged off late in the quarter, represented the larger of two credits in the same relationship that were moved to non-accrual status early in the fourth quarter and reported in our most recent earnings release. The smaller, $5 million, second credit is well-secured and remains Oakworth's single non-performing asset. 

Wealth assets increased 12% year-over-year and 6% linked-quarter to $2.0 billion. Annual loan growth of 28% and linked-quarter loan growth of 9% represents all lending categories and deposit growth of 21% year-over-year and 15% linked-quarter is all client-related, core business.

Profitability in the quarter and year was impacted by both the re-provisioning of the charge-off noted above and approximately $1.2 million directly related to our entry into the Central Carolinas market. Oakworth expects to realize a return on this investment starting in 2024, as has been the history of significant investments in the business. 

At December 31, 2023, Tier 1 Capital was 9.7%, the Total Capital Ratio was 10.7% and the Leverage Ratio was 9.3%.

About Oakworth Capital Inc. and Oakworth Capital Bank
Oakworth Capital, Inc. operates as the bank holding company for Oakworth Capital Bank (Oakworth) (OTCQX: OAKC). Oakworth was founded in 2008 and operates four offices in the Southeast, including its headquarters in Birmingham, Alabama. Oakworth provides commercial and private banking, wealth management and advisory services to clients across the United States.

Oakworth has been named the #1 "Best Bank to Work for" for the past six years in a row (2018-2023) by American Banker. Additionally, Oakworth has earned a Net Promoter Score (NPS) of 96 out of 100 (FY2023) and has a client retention rate of 97% in 2023. As of Dec. 31, 2023, Oakworth had $1.6 billion in total assets, $1.2 billion in gross loans, $1.4 billion in deposits and $2.0 billion in wealth and trust assets under management. For more information, visit www.oakworth.com.

 

OAKWORTH CAPITAL INC.
WEALTH AND TRUST (Unaudited)
(In millions)		As of										Change				Change
		12/31/2023		9/30/2023		6/30/2023		3/31/2023		12/31/2022		12/31/2023 vs. 9/30/2023				12/31/2023 vs. 12/31/2022
Wealth assets (non-balance sheet)		$           2,016		$           1,896		$           1,987		$           1,875		$           1,802		$              120		6 %		$             214		12 %
CONSOLIDATED CONDENSED STATEMENTS OF CONDITION (Unaudited)
(in thousands)		As of										Change				Change
		12/31/2023		9/30/2023		6/30/2023		3/31/2023		12/31/2022		12/31/2023 vs. 9/30/2023				12/31/2023 vs. 12/31/2022
Assets
Cash and due from banks		$       158,403		$       116,065		$       140,421		$         69,575		$       185,483		$         42,338		36 %		$       (27,080)		-15 %
Federal funds sold		3,925		2,225		3,825		3,025		4,475		1,700		76 %		(550)		-12 %
Securities available for sale		143,947		137,907		135,433		136,234		132,050		6,040		4 %		11,897		9 %
Loans, net of unearned income		1,244,133		1,146,526		1,107,028		1,076,532		974,398		97,607		9 %		269,735		28 %
Allowance for loan losses		(14,652)		(13,575)		(13,144)		(12,808)		(11,692)		(1,077)		8 %		(2,960)		25 %
Loans, net		1,229,481		1,132,951		1,093,884		1,063,724		962,706		96,530		9 %		266,775		28 %
Fixed assets		4,681		4,758		4,626		3,314		3,129		(77)		-2 %		1,552		50 %
Interest receivable		6,284		5,932		4,791		4,752		4,263		352		6 %		2,021		47 %
Other assets		48,506		50,209		45,999		44,986		43,348		(1,703)		-3 %		5,158		12 %
Total assets		$    1,595,227		$    1,450,047		$    1,428,979		$    1,325,610		$    1,335,454		$       145,180		10 %		$       259,773		19 %
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing deposits		$       319,986		$       278,822		$       301,821		$       324,649		$       315,033		$         41,164		15 %		$           4,953		2 %
Interest-bearing deposits		1,105,921		963,044		922,391		802,946		861,401		142,877		15 %		244,520		28 %
Total deposits		1,425,907		1,241,866		1,224,212		1,127,595		1,176,434		184,041		15 %		249,473		21 %
Total Borrowings		34,204		74,180		74,158		74,134		34,112		(39,976)		-54 %		92		0 %
Accrued interest payable		1,070		455		982		425		840		615		135 %		230		27 %
Other liabilities		23,794		21,840		17,960		14,937		20,310		1,954		9 %		3,484		17 %
Total liabilities		1,484,975		1,338,341		1,317,312		1,217,091		1,231,696		146,634		11 %		253,279		21 %
Total stockholders' equity		110,252		111,706		111,667		108,519		103,758		(1,454)		-1 %		6,494		6 %
Total liabilities and stockholders' equity		$    1,595,227		$    1,450,047		$    1,428,979		$    1,325,610		$    1,335,454		$       145,180		10 %		$       259,773		19 %

 

OAKWORTH CAPITAL INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
(in thousands)		Quarter Ended										Change				Change
		12/31/2023		9/30/2023		6/30/2023		3/31/2023		12/31/2022		4Q23 vs. 3Q23				4Q23 vs. 4Q22
Interest income:
Loans, including fees		$         20,322		$         19,204		$         18,193		$         15,864		$         13,643		$           1,118		6 %		$           6,679		49 %
Securities available for sale		977		899		825		811		797		78		9 %		180		23 %
Short term investments		1,463		1,608		991		909		1,161		(145)		-9 %		302		26 %
Total interest income		22,762		21,711		20,009		17,584		15,601		1,051		5 %		7,161		46 %
Interest expense:
Deposits		9,976		9,200		7,585		5,729		3,782		776		8 %		6,194		164 %
Borrowings		1,219		1,097		1,072		638		548		122		11 %		671		122 %
Total interest expense		11,195		10,297		8,657		6,367		4,330		898		9 %		6,865		159 %
Net interest income		11,567		11,414		11,352		11,217		11,271		153		1 %		296		3 %
Provision for loan losses		10,792		431		335		1,116		452		10,361		2404 %		10,340		2288 %
Net interest income after provision		775		10,983		11,017		10,101		10,819		(10,208)		-93 %		(10,044)		-93 %
for loan losses
Non-interest income		3,753		3,836		3,392		3,297		3,095		(83)		-2 %		658		21 %
Non-interest expense		11,013		10,640		10,151		9,447		9,518		373		4 %		1,495		16 %
Income before income taxes		(6,485)		4,179		4,258		3,951		4,396		(10,664)		-255 %		(10,881)		-248 %
Provision for income taxes		(1,752)		1,035		1,011		934		1,051		(2,787)		-269 %		(2,803)		-267 %
Net Income		(4,733)		3,144		3,247		3,017		3,345		(7,877)		-251 %		(8,078)		-241 %
Earnings per share - basic		$           (0.97)		$             0.64		$             0.66		$             0.62		$             0.69		$           (1.61)		-250 %		$           (1.66)		-240 %
Earnings per share - diluted		$           (0.97)		$             0.64		$             0.66		$             0.62		$             0.68		$           (1.61)		-250 %		$           (1.65)		-242 %

 

OAKWORTH CAPITAL INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
(in thousands)		YTD Period Ended
		12/31/2023			12/31/2022		Change
Interest income:
Loans, including fees		$         73,584			$         40,682		$         32,902		81 %
Securities available for sale		3,510			2,849		661		23 %
Short term investments		4,971			2,094		2,877		137 %
Total interest income		82,065			45,625		36,440		80 %
Interest expense:
Deposits		32,490			5,688		26,802		471 %
Borrowings		4,025			806		3,219		399 %
Total interest expense		36,515			6,494		30,021		462 %
Net interest income		45,550			39,131		6,419		16 %
Provision for loan losses		12,675			2,376		10,299		433 %
Net interest income after provision		32,875			36,755		(3,880)		-11 %
for loan losses
Non-interest income		14,278			12,638		1,640		13 %
Non-interest expense		41,250			34,306		6,944		20 %
Income before income taxes		5,903			15,087		(9,184)		-61 %
Provision for income taxes		1,228			3,588		(2,360)		-66 %
Net Income		4,675			11,499		(6,824)		-59 %
Earnings per share - basic		$            0.96			$             2.38		$           (1.43)		-60 %
Earnings per share - diluted		$            0.96			$             2.34		$           (1.38)		-59 %

 

For more information contact:
Jenifer Kimbrough
Phone:  205-263-4704
Email: jenifer.kimbrough@oakworth.com

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SOURCE Oakworth Capital Inc.

FAQ

What was Oakworth Capital Inc.'s average loan growth in fiscal year 2023?

Oakworth Capital Inc. reported 30% average loan growth in fiscal year 2023.

What was the impact on earnings in fiscal year 2023?

Earnings were $4.7 million or $0.96 per share, diluted, impacted by $7.4 million of provisioning related to a single credit.

What were the key highlights mentioned by Chairman and CEO Scott Reed?

Scott Reed highlighted investments in growth and infrastructure, with plans to realize returns in 2024.

What was the percentage increase in wealth assets year-over-year?

Wealth assets increased 12% year-over-year to $2.0 billion.

What were the Tier 1 Capital, Total Capital Ratio, and Leverage Ratio at the end of 2023?

At December 31, 2023, Tier 1 Capital was 9.7%, the Total Capital Ratio was 10.7%, and the Leverage Ratio was 9.3%.