Truxton Corporation Reports Fourth Quarter 2021 Results

Rhea-AI Summary

Truxton Corporation reported strong Q4 2021 results with a net income of $4.0 million, up 14% from Q4 2020, and earnings per diluted share of $1.39, a 13% increase. For the full year, net income rose 30% to $14.5 million, and earnings per share grew by 29% to $5.02. Wealth management revenue surged 31% year-over-year. Total deposits increased by 10% from Q3 2021, reaching $807 million. However, the net interest margin decreased to 2.48%, down 21 basis points from the previous quarter. The bank maintains a strong capital position with no non-performing assets.

Positive

• Net income increased by 30% to $14.5 million for the year.
• Earnings per diluted share rose by 29% to $5.02.
• Wealth management revenue up 31% year-over-year.
• Total deposits grew by 10% from Q3 2021 to $807 million.
• No non-performing assets as of December 31, 2021.

Negative

• Net interest margin decreased to 2.48%, down 21 basis points from Q3 2021.

NASHVILLE, Tenn., Jan. 27, 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 December 31, 2021. Fourth quarter net income attributable to common shareholders was $4.0 million or $1.39 earnings per diluted share compared to $3.5 million or $1.23 earnings per diluted share for the same quarter in 2020. Net income rose by 14% for the quarter compared to the fourth quarter of 2020 while fully diluted earnings per share rose by 13%.

For the year ended December 31, 2021, net income increased by 30% to $14.5 million from $11.1 million in 2020. For the year ended December 31, 2021, earnings per diluted share rose to $5.02 from $3.90, an increase of 29% from 2020.

“Truxton’s fourth quarter 2021 performance was outstanding and capped off another year of strong financial results,” said Chairman and CEO Tom Stumb. “Wealth management revenue increased 31% compared to the fourth quarter of 2020 and increased 32% for the year compared to 2020. Loans at year end were up 18% compared to December 31, 2020, and up 25%, excluding amounts under the Paycheck Protection Program (PPP). Our strong performance for this quarter and the full year was driven by our continued focus on deepening our existing relationships and our success in serving new families and their businesses.”  

Key Highlights

• Non-interest income grew to $4.2 million in the fourth quarter of 2021, an increase of 3.6% from the third quarter of 2021 and 29% in comparison to the fourth quarter of 2020. Wealth management services constituted 96% of non-interest income in the fourth quarter of 2021.
• Loans rose 2% to $495 million compared to $487 million on September 30, 2021 and were up 18% compared to December 31, 2020. Excluding PPP loans, loans rose by 2% compared to September 30, 2021, and 25% compared to December 31, 2020.
• PPP fee recognition driven largely by loan forgiveness added $95 thousand in pretax income for the fourth quarter of 2021. Only $506 thousand in PPP loans remained outstanding with $28 thousand in unrecognized fees at the end of the fourth quarter of 2021. PPP fee recognition added $1.0 million in pretax income for the year but should not contribute meaningfully in the future.
• Total deposits increased 10% from September 30, 2021, to $807 million at December 31, 2021, and increased 29% in comparison to December 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 fourth quarter of 2021 was 2.48%, a decrease of 21 basis points from the 2.69% experienced in the third quarter of 2021, and a decrease of 47 basis points from the fourth quarter of 2020. Cost of funds was 0.47% in the fourth quarter of 2021, up from 0.44% for the quarter ended September 30, 2021, and the same as in the quarter ended December 31, 2020.    
• Asset quality remains sound at Truxton. Truxton had no non-performing assets at December 31, 2021.   Truxton had $2 thousand of charge-offs in the fourth quarter of 2021, $2 thousand in the trailing quarter, and $0 in the fourth quarter of 2020.   All of these charge-offs are from small loans acquired from a housing not-for-profit.
• Allowance for loan losses was $4.8 million, $4.8 million, and $4.5 million at quarter end December 31, 2021, September 30, 2021, and December 31, 2020, respectively. For the same three periods, the Bank’s allowance was 0.97%, 0.98%, and 1.07%, respectively, of gross loans (including PPP loans) outstanding at period end.
• Tax expense decreased by 34% from the September 30, 2021 quarter due to over accrual of tax expense in the first three quarters of 2021, but increased by 36% from the December 31, 2020 period due to an even greater effect of over-accrual in the first nine months of 2020. Truxton believes that the effective tax rate of approximately 17% 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 8.95% at December 31, 2021, 8.99% at September 30, 2021, and 9.38% at December 31, 2020. Book value per common share was $29.19, $28.14, and $26.77 at December 31, 2021, September 30, 2021, and December 31, 2020, respectively. During the twelve months ended December 31, 2021, Truxton Corporation paid dividends of $2.20 per common share. In 2021, Truxton Corporation repurchased 15,164 shares of its common stock for $812 thousand total, an average price of $53.56 per 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  Andrew May  615-515-1707  andrew.may@truxtontrust.com

Media Relations Tamara Schoeplein 615-515-1714 tamara.schoeplein@truxtontrust.com

Truxton Corporation
Consolidated Balance Sheets
(000's)
(Unaudited)
	December 31, 2021*			September 30, 2021*			December 31, 2020
ASSETS
Cash and due from financial institutions	$	9,321		$	10,560		$	9,492
Interest bearing deposits in other financial institutions		88,743			56,257			84,435
Federal funds sold		1,425			2,929			169
Cash and cash equivalents		99,489			69,746			94,096
Time deposits in other financial institutions		2,780			2,782			2,931
Securities available for sale		302,502			269,685			206,318
Gross loans, excluding Paycheck Protection Program		494,293			484,614			395,106
Allowance for loan losses		(4,775	)		(4,779	)		(4,490	)
Paycheck Protection Program Loans		506			2,652			24,522
Net loans		490,024			482,487			415,138
Bank owned life insurance		10,389			10,338			10,185
Restricted equity securities		3,242			3,235			3,214
Premises and equipment, net		316			371			507
Accrued interest receivable		2,346			2,331			2,653
Deferred tax asset, net		62			-			-
Other assets		6,109			6,455			6,576
Total assets	$	917,259		$	847,430		$	741,618
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest bearing	$	215,696		$	161,614		$	170,251
Interest bearing		591,779			571,298			453,774
Total deposits		807,475			732,912			624,025
Federal Home Loan Bank advances		4,500			11,680			17,673
Subordinated debt		14,628			14,604			14,529
Deferred tax liability, net		-			154			479
Other liabilities		6,605			7,039			8,254
Total liabilities		833,208			766,389			664,960
SHAREHOLDERS' EQUITY
Additional paid-in capital		32,078			31,799			31,651
Retained earnings		49,628			46,456			41,433
Accumulated other comprehensive income		2,345			2,786			3,574
Total shareholders' equity		84,051			81,041			76,658
Total liabilities and shareholders' equity	$	917,259		$	847,430		$	741,618
*The information is preliminary, 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									Year To Date
	December 31, 2021*			September 30, 2021*			December 31, 2020*			December 31, 2021*			December 31, 2020
Non-interest income
Wealth management services	$	4,072		$	3,874		$	3,101		$	15,102		$	11,469
Service charges on deposit accounts		95			97			59			334			256
Securities gains (losses), net		0			0			0			0			0
Bank owned life insurance income		51			51			53			204			212
Other		28			76			65			269			262
Total non-interest income		4,246			4,098			3,278			15,909			12,199
Interest income
Loans, including fees	$	4,762		$	5,026		$	4,616		$	18,325		$	17,201
Taxable securities		928			724			646			3,031			2,137
Tax-exempt securities		399			391			347			1,565			1,088
Interest bearing deposits		54			75			79			236			332
Federal funds sold		1			1			1			2			19
Other interest income		40			16			35			124			94
Total interest income		6,184			6,233			5,724			23,283			20,871
Interest expense
Deposits		617			590			451			2,247			1,941
Subordinated debentures		194			194			194			780			194
Long-term borrowings		101			61			115			310			468
Total interest expense		912			845			760			3,337			2,603
Net interest income		5,272			5,388			4,964			19,946			18,268
Provision for loan losses		0			199			228			291			1,093
Net interest income after provision for loan losses		5,272			5,189			4,736			19,655			17,175
Total revenue, net		9,518			9,287			8,014			35,564			29,374
Non interest expense
Salaries and employee benefits		3,595			3,316			2,872			13,247			11,380
Occupancy		253			247			219			967			868
Furniture and equipment		33			33			46			154			153
Data processing		281			339			319			1,291			1,169
Wealth management processing fees		133			168			163			644			520
Advertising and public relations		116			25			66			215			163
Professional services		171			164			112			645			626
FDIC insurance assessments		73			57			52			214			150
Other		203			124			168			777			887
Total non interest expense		4,858			4,473			4,017			18,154			15,916
Income before income taxes		4,660			4,814			3,997			17,410			13,458
Income tax expense		623			940			457			2,869			2,309
Net income	$	4,037		$	3,874		$	3,540		$	14,541		$	11,149
Earnings per share:
Basic	$	1.40		$	1.35		$	1.24		$	5.05		$	3.94
Diluted	$	1.39		$	1.34		$	1.23		$	5.02		$	3.90
*The information is preliminary, 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)
	December 31, 2021*		September 30, 2021*		December 31, 2020
Per Common Share Data
Net income attributable to shareholders, per share
Basic	$1.40		$1.35		$1.24
Diluted	$1.39		$1.34		$1.23
Book value per common share	$29.19		$28.14		$26.77
Tangible book value per common share	$29.19		$28.14		$26.77
Basic weighted average common shares	2,807,863		2,809,307		2,771,400
Diluted weighted average common shares	2,822,942		2,822,177		2,797,592
Common shares outstanding at period end	2,879,284		2,879,527		2,863,671
Selected Balance Sheet Data
Tangible common equity (TEC) ratio	9.16%		9.56%		10.34%
Average Loans	$477,005		$470,746		$420,106
Average earning assets (1)	$853,925		$813,434		$683,594
Average total assets	$884,235		$848,148		$719,206
Average stockholders' equity	$82,430		$81,071		$73,764
Selected Asset Quality Measures
Nonaccrual loans	$0		$0		$2,017
90+ days past due still accruing	$21		$6		$11
Total nonperforming loans	$21		$6		$2,028
Total nonperforming assets	$21		$6		$2,028
Net charge offs	$5		$2		$12
Nonperforming loans to assets	0.00%		0.00%		0.27%
Nonperforming assets to total assets	0.00%		0.00%		0.27%
Nonperforming assets to total loans and other real estate	0.00%		0.00%		0.48%
Allowance for loan losses to total loans	0.97%		0.98%		1.07%
Net charge offs to average loans	0.00%		0.00%		0.00%
Capital Ratios (Bank Subsidiary Only)
Tier 1 leverage	8.95%		8.99%		9.38%
Common equity tier 1	13.82%		13.35%		14.10%
Total risk-based capital	14.66%		14.20%		15.05%
Selected Performance Ratios
Efficiency ratio	51.39%		47.87%		46.95%
Return on average assets (ROA)	1.81%		1.81%		1.96%
Return on average stockholders' equity (ROE)	19.42%		18.96%		19.09%
Return on tangible common equity (ROTCE)	19.42%		18.96%		19.09%
Net interest margin	2.48%		2.69%		2.95%
*The information is preliminary, 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
	December 31, 2021*							September 30, 2021*							December 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	$477,005			3.75	$4,513			$470,746			3.87	$4,586			$420,106			3.75		$3,891
Loan fees	$0			0.21	$249			$0			0.37	$440			$0			0.63		$240
Loans with fees	$477,005			3.96	$4,762			$470,746			4.24	$5,026			$420,106			4.38		$4,131
Mortgage loans held for sale	$0			0.00	$0			$20			2.70	$0			$78			3.33		$0
Federal funds sold	$2,902			0.09	$1			$3,085			0.01	$1			$2,581			0.14		$2
Deposits with banks	$86,039			0.25	$54			$96,256			0.31	$75			$77,539			0.41		$90
Investment securities - taxable	$219,861			1.69	$928			$177,782			1.63	$724			$127,864			2.02		$471
Investment securities - tax-exempt	$68,118			3.17	$399			$65,545			3.23	$391			$55,425			3.39		$299
Total Earning Assets	$853,925			2.93	$6,144			$813,434			3.10	$6,217			$683,593			3.39		$4,993
Non interest earning assets
Allowance for loan losses		(4,778	)						(4,604	)						(4,359	)
Cash and due from banks	$9,528							$11,045							$11,611
Premises and equipment	$302							$352							$500
Accrued interest receivable	$2,078							$1,966							$2,573
Other real estate	$0							$0							$0
Other assets	$19,973							$19,792							$20,416
Unrealized gain (loss) on inv. securities		3,207							6,163							4,871
Total Assets	$884,235							$848,148							$719,205
Interest bearing liabilities
Interest bearing demand	$36,480			0.06	$6			$36,078			0.18	$16			$30,668			(0.08	)	($3		)
Savings and money market	$665,881			0.35	$583			$634,565			0.34	$546			$487,041			0.34		$351
Time deposits - retail	$10,917			0.48	$13			$10,882			0.50	$14			$8,538			1.13		$30
Time deposits - wholesale	$16,466			0.37	$15			$13,080			0.44	$14			$22,451			0.31		$11
Total interest bearing deposits	$729,744			0.34	$617			$694,605			0.34	$590			$548,698			0.33		$389
Federal Home Loan Bank advances	$10,683			5.27	$101			$11,853			2.01	$61			$17,738			1.92		$93
Subordinated debt	$14,757			5.15	$194			$14,864			5.11	$194			$14,629			5.19		$0
Other borrowings	$825			0.00	$0			$878			0.00	$0			$31,730			1.10		$41
Total borrowed funds	$26,265			5.05	$295			$27,595			3.61	$255			$64,097			1.88		$134
Total interest bearing liabilities	$756,009			0.50	$912			$722,200			0.46	$845			$612,795			0.49		$523
Net interest rate spread				2.43	$5,232						2.64	$5,372						2.90		$4,470
Non-interest bearing deposits	$39,884							$38,742							$24,645
Other liabilities	$5,912							$6,135							$7,787
Stockholder's equity	$82,430							$81,071							$73,764
Total Liabilities and Stockholder's Equity	$884,235							$848,148							$718,991
Cost of funds				0.47							0.44							0.47
Net interest margin				2.48							2.69							2.95
*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.

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:
	Twelve Months Ended								Twelve Months Ended
	December 31, 2021*								December 31, 2020*
	Average Balances			Rates/ Yields (%)	Interest Income/ Expense				Average Balances			Rates/ Yields (%)	Interest Income/ Expense
Earning Assets
Loans	$455,847			3.73	$17,009				$405,363			3.97	$16,099
Loan fees	$0			0.29	$1,314				$0			0.28	$1,132
Loans with fees	$455,847			4.02	$18,323				$405,363			4.25	$17,231
Mortgage loans held for sale	$56			3.02	$2				$72			3.86	$3
Federal funds sold	$2,574			0.08	$2				$3,857			0.05	$18
Deposits with banks	$75,854			0.31	$236				$59,043			0.56	$332
Investment securities - taxable	$178,029			1.70	$3,031				$100,529			2.13	$2,138
Investment securities - tax-exempt	$65,444			3.23	$1,565				$40,452			3.63	$1,088
Total Earning Assets	$777,804			3.05	$23,159				$609,316			3.48	$20,810
Non interest earning assets
Allowance for loan losses		(4,625	)							(3,900	)
Cash and due from banks	$10,397								$10,074
Premises and equipment	$379								$423
Accrued interest receivable	$2,091								$2,181
Other real estate	$0								$0
Other assets	$19,874								$19,973
Unrealized gain (loss) on inv. securities		4,878								3,579
Total Assets	$810,798								$641,646
Interest bearing liabilities
Interest bearing demand	$35,946			0.20	$72				$32,004			0.20	$65
Savings and Money Market	$598,139			0.34	$2,063				$429,755			0.39	$1,671
Time deposits - retail	$10,012			0.57	$57				$9,948			1.26	$126
Time deposits - wholesale	$18,493			0.30	$55				$11,369			0.69	$79
Total interest bearing deposits	$662,590			0.34	$2,247				$483,076			0.40	$1,941
Federal Home Loan Bank advances	$13,262			2.63	$310				$24,942			1.47	$372
Subordinated debt	$14,767			5.21	$780				$3,816			5.00	$194
Other borrowings	$986			0.00	$0				$28,566			1.50	$96
Total borrowed funds	$29,015			3.86	$1,090				$57,324			1.14	$662
Total interest bearing liabilities	$691,605			0.49	$3,337				$540,400			0.48	$2,603
Net interest rate spread				2.56	$19,822							3.00	$18,207
Non-interest bearing deposits	$33,809								$24,472
Other liabilities	$5,743								$7,302
Stockholder's equity	$79,641								$69,413
Total Liabilities and Stockholder's Equity	$810,798								$641,587
Cost of funds				0.46								0.46
Net interest margin				2.62								3.05
*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.

FAQ

What were Truxton Corporation's Q4 2021 financial results?

Truxton Corporation reported a Q4 2021 net income of $4.0 million, with earnings per diluted share of $1.39.

How much did Truxton's net income increase in 2021?

Truxton's net income increased by 30% to $14.5 million for the year ended December 31, 2021.

What percentage increase did Truxton's wealth management revenue see in Q4 2021?

Truxton's wealth management revenue saw a 31% increase in Q4 2021 compared to Q4 2020.

What is Truxton Corporation's current net interest margin?

Truxton Corporation's net interest margin for Q4 2021 was 2.48%.

How much did Truxton Corporation grow its deposits by in Q4 2021?

Deposits at Truxton Corporation increased by 10% from Q3 2021 to $807 million.