Truxton Corporation Reports First Quarter 2021 Results

Rhea-AI Summary

Truxton Corporation reported strong first-quarter results for 2021, achieving a net income of $3 million ($1.06 per share), up 24% year-over-year. Wealth management drove growth, aided by new client relationships and rising asset values. Total loans increased by 15% to $431 million, while total deposits rose by 5% from the previous quarter, totaling $655.5 million. Non-interest income grew by 18% compared to Q1 2020. Despite a decrease in net interest margin to 2.64%, Truxton maintained a strong capital position with a Tier 1 leverage ratio of 9.39%. Dividends paid amounted to $2.14 per share.

Positive

• Net income for Q1 2021 was $3 million, a 24% increase from Q1 2020.
• Earnings per share rose to $1.06, up 22% year-over-year.
• Total loans increased by 15% to $431 million compared to March 31, 2020.
• Total deposits increased by 5% from the previous quarter to $655.5 million.
• Non-interest income grew by 18% year-over-year to $3.6 million.
• Strong capital position with a Tier 1 leverage ratio of 9.39%.

Negative

• Net interest margin decreased to 2.64%, down 31 basis points from the previous quarter.
• Cost of funds increased to 0.49%, up from 0.47% in the previous quarter.

NASHVILLE, Tenn., April 22, 2021 (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 March 31, 2021. First quarter net income attributable to common shareholders was $3 million or $1.06 per share compared to $2.5 million or $0.87 per share for the same quarter in 2020. Net income rose by 24% for the quarter while earnings per share rose by 22%.

“Truxton’s first quarter 2021 performance was very strong in both of our core businesses, wealth management and private banking,” said Chairman and CEO Tom Stumb. “Wealth management benefitted from rising assets under management because of new client relationships combined with increasing equity prices in 2021. Private banking found new lending opportunities as the economy in our core Nashville market continues to improve following the past year’s coronavirus impacts. Low interest rates have pressured our net interest margin; however, strong balance sheet growth has supported earnings per share and returns on equity capital.”

Key Highlights

• Non-interest income grew to $3.6 million in the first quarter, an increase of 8% from the fourth quarter of 2020 and 18% in comparison to the first quarter of 2020. Wealth management services constituted 96% of non-interest income in the first quarter of 2021.
• Loans rose by 15% to $431 million compared to March 31, 2020, and were up 4% compared to December 31, 2020. Excluding loans made under the Paycheck Protection Program (PPP), loans rose by 7.9% compared to March 31, 2020, and 3.3% compared to December 31, 2020.
• Total deposits increased by 5% from December 31, 2020 to $655.5 million, and increased by 53% in comparison to March 31, 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 first quarter of 2021 was 2.64%. A decrease of 31 basis points from the 2.95% experienced in the quarter ended December 31, 2020, and a decrease of 74 basis points from the quarter ended March 31, 2020. Cost of funds was 0.49% in the first quarter of 2021, up from 0.47% for the quarter ended December 31, 2020, but down 0.71% from the quarter ended March 31, 2020. We continue to have excess liquidity as a result of the deposit growth we experienced in 2020 that has continued into the first quarter of 2021.
• Asset quality remains sound at Truxton. Truxton had $2 million in non-performing assets at March 31, 2021, 100% of which was a single residential mortgage. Truxton had $9 thousand of charge-offs in the quarter and none in the trailing quarter, $2 thousand 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 $4.6 million, $4.5 million, and $3.6 million at quarter end March 31, 2021, December 31, 2020, and March 31, 2020, respectively. For the same three periods, the Bank’s allowance was 1.05%, 1.07%, and 0.95%, respectively, of gross loans outstanding at period end.
• Tax expense increased by 26% from the December 31, 2020 quarter and by 4% from the March 31, 2020 period. Effective tax rate in the fourth quarter of 2020 was favorably impacted by certain loans, funded late in the year, for which Truxton receives a direct credit against state income tax based on the year-end balance of the loan. 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 9.39% at March 31, 2021, 9.38% at December 31, 2020, and 11.21% at March 31, 2020. Book value per common share was $25.93, $26.77, and $23.19 at March 31, 2021, December 31, 2020, and March 31, 2020, respectively. During the twelve months ended March 31, 2021, Truxton Corporation paid dividends of $2.14 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	Media Relations
Andrew May	Tamara Schoeplein
615-515-1707	615-515-1714
andrew.may@truxtontrust.com	tamara.schoeplein@truxtontrust.com

Truxton Corporation
Consolidated Balance Sheets
(000's)
(Unaudited)
	March 31, 2021*			December 31, 2020			March 31, 2020*
ASSETS
Cash and due from financial institutions	$	11,352		$	9,742		$	6,864
Interest bearing deposits in other financial institutions		65,373			84,429			7,964
Federal funds sold		4,923			169			2,038
Cash and cash equivalents		81,648			94,340			16,866
Time deposits in other financial institutions		2,187			2,687			4,659
Securities available for sale		228,214			206,318			122,112
Gross loans, excluding Paycheck Protection Program (PPP)		408,232			395,106			379,072
PPP Loans		27,593			24,522			-
Allowance for loan losses		(4,574	)		(4,490	)		(3,592	)
Net loans		431,251			415,138			375,480
Bank owned life insurance		10,236			10,185			10,026
Restricted equity securities		3,221			3,214			2,605
Premises and equipment, net		468			507			376
Accrued interest receivable		2,500			2,653			1,865
Deferred tax asset, net		352			-			802
Other assets		6,333			6,576			6,767
Total assets	$	766,410		$	741,618		$	541,558
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest bearing	$	179,883		$	170,251		$	120,269
Interest bearing		475,616			453,774			309,032
Total deposits		655,499			624,025			429,301
Federal Home Loan Bank advances		15,533			17,673			38,262
Federal Funds purchased		-			-			-
Subordinated debt		14,554			14,529			-
Deferred tax liability, net					479
Other liabilities		6,016			8,254			8,648
Total liabilities		691,602			664,960			476,211
SHAREHOLDERS' EQUITY
Additional paid-in capital		31,745			31,651			30,362
Retained earnings		40,761			41,433			35,151
Accumulated other comprehensive income (loss)		2,302			3,574			(166	)
Total shareholders' equity		74,808			76,658			65,347
Total liabilities and shareholders' equity	$	766,410		$	741,618		$	541,558
*The information is 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
	March 31, 2021*			December 31, 2020*			March 31, 2020*
Non-interest income
Wealth management services	$	3,430		$	3,101		$	2,742
Service charges on deposit accounts		59			59			79
Securities gains (losses), net		-			-			-
Bank owned life insurance income		51			53			54
Other		16			65			148
Total non-interest income		3,556			3,278			3,023
Interest income
Loans, including fees	$	4,202		$	4,616		$	4,177
Taxable securities		660			646			534
Tax-exempt securities		379			347			196
Interest bearing deposits		62			79			109
Federal funds sold		0			1			14
Other interest income		20			35			12
Total interest income		5,323			5,724			5,042
Interest expense
Deposits		525			451			732
Short-term borrowings		-			-			-
Subordinated debentures		198			194			-
Long-term borrowings		77			115			91
Total interest expense		800			760			823
Net interest income		4,523			4,964			4,219
Provision for loan losses		92			228			185
Net interest income after provision for loan losses		4,431			4,736			4,034
Total revenue, net		7,987			8,014			7,057
Non interest expense
Salaries and employee benefits		3,106			2,872			2,928
Occupancy		221			219			199
Furniture and equipment		46			46			26
Data processing		347			319			263
Wealth management processing fees		176			163			124
Advertising and public relations		39			66			43
Professional services		127			112			168
FDIC insurance assessments		42			52			15
Other		228			168			264
Total non interest expense		4,332			4,017			4,030
Income before income taxes		3,655			3,997			3,027
Income tax expense		574			457			550
Net income	$	3,081		$	3,540		$	2,477
Earnings per share:
Basic	$	1.07		$	1.25		$	0.88
Diluted	$	1.06		$	1.23		$	0.87
*The information is 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)
	March 31, 2021*	December 31, 2020*	March 31, 2020*
Per Common Share Data
Net income attributable to common shareholders, per share
Basic	$1.07	$1.25	$0.88
Diluted	$1.06	$1.23	$0.87
Book value per common share	$25.93	$26.77	$23.19
Tangible book value per common share	$25.93	$26.77	$23.19
Basic weighted average common shares	2,794,175	2,768,270	2,728,667
Diluted weighted average common shares	2,806,856	2,794,461	2,761,139
Common shares outstanding at period end	2,885,233	2,863,671	2,817,354
Selected Balance Sheet Data
Tangible common equity (TCE) ratio	9.76%	10.34%	12.07%
Average loans	$428,864	$420,106	$368,017
Average earning assets (1)	$709,535	$683,594	$510,886
Average total assets	$743,462	$719,206	$538,336
Average stockholders' equity	$77,851	$73,764	$65,434
Selected Asset Quality Measures
Nonaccrual loans	$2,007	$2,017	$0
90+ days past due still accruing	$0	$11	$0
Total nonperforming loans	$2,007	$2,017	$0
Total nonperforming assets	$2,007	$2,017	$0
Net charge offs	$1	$12	$2
Nonperforming loans to assets	0.26%	0.27%	0.00%
Nonperforming assets to total assets	0.26%	0.27%	0.00%
Nonperforming assets to total loans and other real estate	0.46%	0.48%	0.00%
Allowance for loan losses to gross loans	1.05%	1.07%	0.95%
Net charge offs to average loans	0.00%	0.00%	0.00%
Capital Ratios (Bank Subsidiary Only)
Tier 1 leverage	9.39%	9.38%	11.21%
Common equity tier 1	13.99%	14.10%	13.41%
Total risk-based capital	14.92%	15.05%	14.21%
Selected Performance Ratios
Efficiency ratio	53.62%	48.74%	55.65%
Return on average assets (ROA)	1.68%	1.96%	1.85%
Return on average stockholders' equity (ROE)	16.05%	19.09%	15.22%
Return on tangible common equity (ROTCE)	16.05%	19.09%	15.22%
Net interest margin	2.64%	2.95%	3.38%
*The information is 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
	March 31, 2021*								December 31, 2020*									March 31, 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	$428,864			3.65		$3,861			$420,106			3.75		$3,957				$368,017			4.55		$4,159
Loan fees	$0			0.32		$342			$0			0.63		$665				$0			0.04		$34
Loans with fees	$428,864			3.97		$4,203			$420,106			4.38		$4,622				$368,017			4.58		$4,193
Mortgage loans held for sale	$96			2.90		$1			$78			3.33		$1				$122			3.23		$1
Federal funds sold	$2,173			0.05		$0			$2,581			0.14		$1				$3,143			1.75		$14
Deposits with banks	$66,900			0.37		$62			$77,539			0.41		$79				$24,224			1.82		$109
Investment securities - taxable	$149,117			1.77		$660			$127,864			2.02		$646				$87,665			2.44		$534
Investment securities - tax-exempt	$62,385			3.29		$379			$55,425			3.39		$347				$26,939			3.93		$196
Total Earning Assets	$709,535			3.10		$5,305			$683,593			3.39		$5,696				$510,110			4.03		$5,048
Non interest earning assets
Allowance for loan losses		(4,541	)							(4,359	)								(3,411	)
Cash and due from banks	$10,346								$11,611									$9,399
Premises and equipment	$460								$500									$1,728
Accrued interest receivable	$2,209								$2,573									$1,651
Other real estate	$0								$0									$0
Other assets	$19,614								$20,416									$16,829
Unrealized gain (loss) on inv. securities		5,839								4,871									2,028
Total Assets	$743,462								$719,205									$538,334
Interest bearing liabilities
Interest bearing demand	$36,530			0.39		$35			$30,668			(0.08	)		($6	)		$32,868			0.69		$56
Savings and Money Market	$530,414			0.35		$464			$487,041			0.34		$415				$368,211			0.66		$605
Time deposits - Retail	$8,291			0.73		$15			$8,538			1.13		$24				$10,497			1.46		$38
Time Deposits - Wholesale	$24,299			0.19		$11			$22,451			0.31		$18				$5,488			2.38		$32
Total interest bearing deposits	$599,534			0.36		$525			$548,698			0.33		$451				$417,075			0.71		$732
Federal home Loan Bank advances	$15,981			1.93		$77			$17,738			1.92		$87				$20,950			1.72		$91
Subordinated debt	$14,798			5.34		$198			$14,629			5.19		$194				$0
Other borrowings	$1,456			0.61		$0			$31,730			1.10		$28				$1,456			0.04		$0
Total borrowed funds	$31,918			3.44		$275			$64,097			1.88		$309				$22,405			1.61		$91
Total interest bearing liabilities	$631,452			0.51		$800			$612,795			0.49		$760				$439,480			0.75		$823
Net interest rate spread				2.59		$4,505						2.90		$4,936							3.28		$4,225
Non-interest bearing deposits	$28,242								$24,645									$27,470
Other liabilities	$5,916								$7,787									$5,938
Stockholder's equity	$77,851								$73,764									$64,434
Total Liabilities and Stockholder's Equity	$743,462								$718,991									$538,323
Cost of funds				0.49								0.47									0.71
Net interest margin				2.64								2.95									3.38
*The information is 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.

FAQ

What were Truxton Corporation's Q1 2021 earnings results?

Truxton Corporation reported a net income of $3 million or $1.06 per share for Q1 2021, marking a 24% increase in net income compared to the same quarter in 2020.

How much did Truxton's total loans increase in Q1 2021?

Total loans rose by 15% to $431 million compared to March 31, 2020.

What was the net interest margin for Truxton Corporation in Q1 2021?

The net interest margin for the first quarter of 2021 was 2.64%, reflecting a decrease from previous quarters.

What is Truxton Corporation's Tier 1 leverage ratio as of March 31, 2021?

Truxton's Tier 1 leverage ratio was 9.39% as of March 31, 2021.

How much did Truxton Corporation pay in dividends for the year ending March 31, 2021?

Truxton Corporation paid dividends of $2.14 per common share during the twelve months ended March 31, 2021.