Truxton Corporation Reports First Quarter 2022 Results

Rhea-AI Summary

Truxton Corporation reported strong first-quarter results for 2022, achieving a net income of $4.2 million or $1.45 per diluted share, a 37% increase from the same period in 2021. Non-interest income rose by 23% year-over-year to $4.4 million, with wealth management contributing 96%. Loans grew by 16% compared to Q1 2021, while total deposits increased by 19% year-over-year. The net interest margin improved to 2.75%. However, total deposits fell by 4% from the previous quarter. The bank's capital position remains strong, with a Tier 1 leverage ratio of 9.48%.

Positive

• Net income increased by 37% year-over-year to $4.2 million.
• Non-interest income grew by 23% compared to Q1 2021, reaching $4.4 million.
• Loans rose by 16% year-over-year, totaling $500 million.
• Net interest margin improved to 2.75%, up from 2.48% in Q4 2021.

Negative

• Total deposits decreased by 4% from Q4 2021 to $778 million.
• Book value per share declined to $25.77 from $29.19 due to bond valuation decreases.

NASHVILLE, Tenn., April 21, 2022 (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, 2022. First quarter net income attributable to common shareholders was $4.2 million or $1.45 per diluted share compared to $3.1 million or $1.06 per diluted share for the same quarter in 2021. Net income and fully diluted earnings per share for the quarter rose by 37% compared to the first quarter of 2021.

“Truxton has started strong in 2022 with our best quarter of earnings yet,” said Chairman and CEO Tom Stumb. “Our wealth management team’s continued success with new and existing clients overcame the headwinds of market volatility. The private banking team continues to grow the loan portfolio, helping to fund the growth of the Nashville area. Increasing interest rates have mostly benefitted the bank so far but a continued rapid rise could reduce our net interest margin (NIM) if deposit costs increase faster than our asset yields.”

Key Highlights

• Non-interest income grew to $4.4 million in the first quarter, an increase of 3% from the fourth quarter of 2021 and 23% in comparison to the first quarter of 2021. Wealth management services constituted 96% of non-interest income in the first quarter of 2022 as it did in fourth quarter of 2021 and first quarter of 2021.
• Loans rose by 2% to $500 million compared to December 31, 2021 and were up 16% compared to March 31, 2021. Excluding loans made under the Paycheck Protection Program (PPP), loans rose by 2% compared to December 31, 2021, and 24% compared to March 31, 2021.
• Total deposits decreased by 4% from December 31, 2021, to $778 million, and increased by 19% in comparison to March 31, 2021. 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 2022 was 2.75%, an increase of 27 basis points from the 2.48% experienced in the quarter ended December 31, 2021, and an increase of 11 basis points from the quarter ended March 31, 2021. Cost of funds was 0.42% in the first quarter of 2022, down from 0.47% for the quarter ended December 31, 2021, and down from 0.49% for the quarter ended March 31, 2021.  
• Asset quality remains sound at Truxton. Truxton had $0 in non-performing assets on March 31, 2022. Truxton had $0 of net charge-offs in the quarter, $5 thousand in the trailing quarter, and $1 thousand in the first quarter of 2021.  
• Allowance for loan losses was $4.9 million, $4.8 million, and $4.6 million at quarter end March 31, 2022, December 31, 2021, and March 31, 2021, respectively. For the same three periods, the Bank’s allowance was 0.97%, 0.97%, and 1.05%, respectively, of gross loans outstanding at period end.
• The Bank’s capital position remains strong. Its Tier 1 leverage ratio was 9.48% at March 31, 2022, 8.95% at December 31, 2021, and 9.39% at March 31, 2021. Book value per common share was $25.77, $29.19, and $25.93 at March 31, 2022, December 31, 2021, and March 31, 2021, respectively. The decline in book value from December 31, 2021, was driven by lower bond portfolio valuation due to the rapid rise in interest rates beyond the very front end of the yield curve. During the three months ended March 31, 2022, Truxton Corporation paid dividends of $1.34 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
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, 2022*			December 31, 2021			March 31, 2021*
ASSETS
Cash and due from financial institutions	$	8,837		$	9,321		$	11,101
Interest bearing deposits in other financial institutions		42,375			88,743			65,380
Federal funds sold		2,985			1,425			4,923
Cash and cash equivalents		54,197			99,489			81,404
Time deposits in other financial institutions		2,284			2,780			2,431
Securities available for sale		293,588			302,502			228,214
Gross loans, excluding Paycheck Protection Program (PPP)		504,235			494,293			408,232
PPP Loans		409			506			27,593
Allowance for loan losses		(4,881	)		(4,775	)		(4,574	)
Net loans		499,763			490,024			431,251
Bank owned life insurance		10,439			10,389			10,236
Restricted equity securities		3,250			3,242			3,221
Premises and equipment, net		267			316			468
Accrued interest receivable		2,479			2,346			2,500
Deferred tax asset, net		3,107			62			352
Other assets		5,790			6,109			6,333
Total assets	$	875,164		$	917,259		$	766,410
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest bearing	$	180,743		$	215,696		$	179,883
Interest bearing		597,310			591,779			475,616
Total deposits		778,053			807,475			655,499
Federal Home Loan Bank advances		4,500			4,500			15,533
Subordinated debt		14,653			14,628			14,554
Deferred tax liability, net		-			-			-
Other liabilities		2,789			6,605			6,016
Total liabilities		799,995			833,208			691,602
SHAREHOLDERS' EQUITY
Additional paid-in capital		32,400			32,078			31,745
Retained earnings		49,946			49,628			40,761
Accumulated other comprehensive income (loss)		(7,177	)		2,345			2,302
Total shareholders' equity		75,169			84,051			74,808
Total liabilities and shareholders' equity	$	875,164		$	917,259		$	766,410
*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, 2022*				December 31, 2021*			March 31, 2021*
Non-interest income
Wealth management services	$	4,182			$	4,072		$	3,430
Service charges on deposit accounts		99				95			59
Securities gains (losses), net		(18	)			-			-
Bank owned life insurance income		50				51			51
Other		43				28			16
Total non-interest income		4,356				4,246			3,556
Interest income
Loans, including fees	$	4,838			$	4,762		$	4,202
Taxable securities		1,114				928			660
Tax-exempt securities		396				399			379
Interest bearing deposits		31				54			62
Federal funds sold		1				1			0
Other interest income		16				40			20
Total interest income		6,396				6,184			5,323
Interest expense
Deposits		586				617			525
Short-term borrowings		1				-			-
Subordinated debentures		194				194			198
Long-term borrowings		23				101			77
Total interest expense		804				912			800
Net interest income		5,592				5,272			4,523
Provision for loan losses		105				0			92
Net interest income after provision for loan losses		5,487				5,272			4,431
Total revenue, net		9,843				9,518			7,987
Non interest expense
Salaries and employee benefits		3,511				3,595			3,106
Occupancy		252				253			221
Furniture and equipment		32				33			46
Data processing		366				281			347
Wealth management processing fees		165				133			176
Advertising and public relations		32				116			39
Professional services		166				171			127
FDIC insurance assessments		57				73			42
Other		237				203			228
Total non interest expense		4,818				4,858			4,332
Income before income taxes		5,025				4,660			3,655
Income tax expense		798				623			574
Net income	$	4,227			$	4,037		$	3,081
Earnings per share:
Basic	$	1.46			$	1.40		$	1.07
Diluted	$	1.45			$	1.39		$	1.06
*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, 2022*	December 31, 2021*	March 31, 2021*
Per Common Share Data
Net income attributable to common shareholders, per share
Basic	$1.46	$1.40	$1.07
Diluted	$1.45	$1.39	$1.06
Book value per common share	$25.77	$29.19	$25.93
Tangible book value per common share	$25.77	$29.19	$25.93
Basic weighted average common shares	2,793,014	2,807,863	2,794,175
Diluted weighted average common shares	2,807,866	2,822,942	2,806,856
Common shares outstanding at period end	2,917,044	2,879,284	2,885,233
Selected Balance Sheet Data
Tangible common equity (TCE) ratio	8.59%	9.16%	9.76%
Average loans	$498,755	$477,005	$428,864
Average earning assets (1)	$840,952	$853,925	$709,535
Average total assets	$866,432	$884,235	$743,462
Average stockholders' equity	$83,009	$82,430	$77,851
Selected Asset Quality Measures
Nonaccrual loans	$0	$0	$2,007
90+ days past due still accruing	$0	$21	$0
Total nonperforming loans	$0	$21	$2,007
Total nonperforming assets	$0	$21	$2,007
Net charge offs	$0	$5	$1
Nonperforming loans to assets	0.00%	0.00%	0.23%
Nonperforming assets to total assets	0.00%	0.00%	0.23%
Nonperforming assets to total loans and other real estate	0.00%	0.00%	0.46%
Allowance for loan losses to gross loans	0.97%	0.97%	1.05%
Net charge offs to average loans	0.00%	0.00%	0.00%
Capital Ratios (Bank Subsidiary Only)
Tier 1 leverage	9.48%	8.95%	9.39%
Common equity tier 1	14.00%	13.82%	13.99%
Total risk-based capital	14.83%	14.66%	14.92%
Selected Performance Ratios
Efficiency ratio	48.43%	51.39%	48.43%
Return on average assets (ROA)	1.98%	1.81%	1.68%
Return on average stockholders' equity (ROE)	20.64%	19.42%	16.05%
Return on average tangible common equity (ROTCE)	20.64%	19.42%	16.05%
Net interest margin	2.75%	2.48%	2.64%
*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 March 31, 2022*					Three Months Ended December 31, 2021*					Three Months Ended March 31, 2021*
	Average Balances		Rates/ Yields (%)	Interest Income/ Expense		Average Balances		Rates/ Yields (%)	Interest Income/ Expense		Average Balances		Rates/ Yields (%)	Interest Income/ Expense
Earning Assets
Loans	$498,755		3.73	$4,586		$477,005		3.75	$4,513		$428,864		3.65	$3,861
Loan fees	$0		0.20	$252		$0		0.21	$249		$0		0.32	$342
Loans with fees	$498,755		3.93	$4,837		$477,005		3.96	$4,762		$428,864		3.97	$4,203
Mortgage loans held for sale	$61		3.72	$1		$0		0.00	$0		$96		2.90	$1
Federal funds sold	$1,735		0.17	$1		$2,902		0.09	$1		$2,173		0.05	$0
Deposits with banks	$34,026		0.37	$31		$86,039		0.25	$54		$66,900		0.37	$62
Investment securities - taxable	$239,635		1.86	$1,114		$219,861		1.69	$928		$149,117		1.77	$660
Investment securities - tax-exempt	$66,739		3.21	$396		$68,118		3.17	$399		$62,385		3.29	$379
Total Earning Assets	$840,952		3.13	$6,380		$853,925		2.93	$6,144		$709,535		3.10	$5,305
Non interest earning assets
Allowance for loan losses	(4,776	)				(4,778	)				(4,541	)
Cash and due from banks	$8,046					$9,528					$10,346
Premises and equipment	$256					$302					$460
Accrued interest receivable	$2,065					$2,078					$2,209
Other real estate	$0					$0					$0
Other assets	$20,519					$19,973					$19,614
Unrealized gain (loss) on inv. securities	(630	)				3,207					5,839
Total Assets	$866,432					$884,235					$743,462
Interest bearing liabilities
Interest bearing demand	$37,019		0.32	$29		$36,480		0.06	$6		$36,530		0.39	$35
Savings and Money Market	$68,248		0.33	$523		$665,881		0.35	$583		$530,414		0.35	$464
Time deposits - Retail	$10,734		0.48	$13		$10,917		0.48	$13		$8,291		0.73	$15
Time Deposits - Wholesale	$39,793		0.22	$21		$16,466		0.37	$15		$24,299		0.19	$11
Total interest bearing deposits	$725,793		0.33	$586		$729,744		0.34	$617		$599,534		0.36	$525
Federal home Loan Bank advances	$6,278		1.48	$23		$10,683		5.27	$101		$15,981		1.93	$77
Subordinated debt	$14,863		5.22	$194		$14,757		5.15	$194		$14,798		5.34	$198
Other borrowings	$882		1.23	$1		$825		0.00	$0		$1,456		0.61	$0
Total borrowed funds	$22,023		3.96	$218		$26,265		5.05	$295		$31,918		3.44	$275
Total interest bearing liabilities	$747,817		0.43	$804		$756,009		0.50	$912		$631,452		0.51	$800
Net interest rate spread			2.70	$5,576				2.43	$5,232				2.59	$4,505
Non-interest bearing deposits	$31,724					$39,884					$28,242
Other liabilities	$3,882					$5,912					$5,916
Stockholder's equity	$83,009					$82,430					$77,851
Total Liabilities and Stockholder's Equity	$866,432					$884,235					$743,462
Cost of funds			0.42					0.47					0.49
Net interest margin			2.75					2.48					2.64
*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 earnings for Q1 2022?

Truxton Corporation reported earnings of $4.2 million or $1.45 per diluted share for Q1 2022.

How did Truxton's loans perform in the first quarter of 2022?

Loans at Truxton rose by 16% year-over-year, totaling $500 million as of March 31, 2022.

What is Truxton Corporation's net interest margin for Q1 2022?

Truxton's net interest margin for Q1 2022 was 2.75%, up from 2.48% in the previous quarter.

How has the total deposits changed for Truxton Corporation?

Total deposits decreased by 4% from the end of 2021 but increased by 19% compared to Q1 2021.

What is Truxton Corporation's capital position as of March 31, 2022?

Truxton's Tier 1 leverage ratio was 9.48% as of March 31, 2022.