Truxton Corporation Reports Second Quarter 2022 Results

Rhea-AI Summary

Truxton Corporation reported strong Q2 2022 results with net income of $4.1 million, or $1.41 per diluted share, marking a 16% increase from Q2 2021. Wealth management revenue rose 9% year-over-year. The bank achieved record loan growth, with total loans increasing 11% from Q1 2022 and 25% from Q2 2021. However, the company anticipates ongoing market turbulence could challenge earnings in the latter half of the year. The capital position remains solid, with a Tier 1 leverage ratio of 9.63% and zero non-performing assets.

Positive

• Net income rose to $4.1 million, a 16% increase from Q2 2021.
• Wealth management revenue increased by 9% year-over-year.
• Loans increased by 11% from Q1 2022 and 25% year-over-year.
• Pre-Provision Net Revenue (PPNR) rose 30.3% year-over-year.
• No non-performing assets, indicating sound asset quality.

Negative

• Non-interest income decreased by 3% from Q1 2022.
• Book value per common share decreased from $27.35 in Q2 2021 to $24.49.

NASHVILLE, Tenn., July 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 June 30, 2022. Second quarter net income attributable to common shareholders was $4.1 million or $1.41 per diluted share compared to $3.6 million or $1.22 per diluted share for the same quarter in 2021. Net income and fully diluted earnings per share for the quarter rose by 16% compared to the second quarter of 2021.

“Truxton’s second quarter 2022 performance was exceptional despite market turbulence,” said Chairman and CEO Tom Stumb. “Wealth management revenue increased 9% from the same quarter last year as our team continued to earn the opportunity to serve new clients. The private banking team produced a record quarter of loan growth by finding creative lending solutions for our clients while maintaining our focus on credit quality. We expect the volatile market conditions we are currently experiencing to continue to create a challenging operating environment and to pressure earnings for the remainder of the year.”

Key Highlights

• Pre-Provision Net Revenue (PPNR) for the second quarter was $5.58 million, an increase of 8.8% from the first quarter of 2022 and an increase of 30.3% compared to the second quarter of 2021. PPNR for the first half of 2022 was 33.4% higher than the first half of 2021.
• Non-interest income was $4.2 million in the second quarter, a decrease of 3% from the first quarter of 2022 but an 8% increase compared to the second quarter of 2021. Wealth management services constituted 96% of non-interest income in the second quarter of 2022.
• Loans rose by 11% to $565 million compared to March 31, 2022, and were up 25% compared to June 30, 2021. Excluding the $121 thousand in PPP loans on June 30, 2022, gross loans rose by 29% compared to June 30, 2021, when we had $15.1 million in PPP loans on the balance sheet.
• Total deposits increased by 0.50% from March 31, 2022, to $782 million on June 30, 2022, and increased by 11% in comparison to June 30, 2021. Wholesale and brokered deposits were a larger percentage of the funding mix in the second quarter of 2022 and contributed to increased deposit betas.
• Net interest margin for the second quarter of 2022 was 2.83%, an increase of 8 basis points from the 2.75% experienced in the first quarter of 2022, and an increase of 12 basis points from the second quarter of 2021. Cost of funds was 0.50% in the second quarter of 2022, up from 0.42% for the quarter ended March 31, 2022, and up from 0.46% for the quarter ended June 30, 2021.   
• Asset quality remains sound at Truxton. Truxton had $0 in non-performing assets on June 30, 2022. Truxton also had $0 of net charge-offs in the quarter, $0 in the first quarter of 2022, and $2 thousand in the second quarter of 2021.
• Allowance for loan losses was $5.5 million, $4.8 million, and $4.6 million at quarter end June 30, 2022, March 31, 2022, and June 30, 2021, respectively. For the same three periods, the Bank’s allowance was 0.96%, 0.97%, and 1.00%, respectively, of gross loans (including PPP loans) outstanding at period end.
• The Bank’s capital position remains strong. Its Tier 1 leverage ratio was 9.63% at June 30, 2022, 9.48% at March 31, 2022, and 9.47% at June 30, 2021. Book value per common share was $24.49, $25.77, and $27.35 at June 30, 2022, March 31, 2022, and June 30, 2021, respectively. Lower bond portfolio valuations caused largely by the rising interest rate environment continued to drive the decline in book value.
• During the second quarter of 2022, Truxton Corporation repurchased 22,000 shares of its common stock for $1.54 million, an average price of $70.05 per share. During the six months ended June 30, 2022, Truxton Corporation paid dividends of $1.68 per common share.
  

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)
	June 30, 2022*			March 31, 2022*			June 30, 2021*
ASSETS
Cash and due from financial institutions	$	6,145		$	8,837		$	10,274
Interest bearing deposits in other financial institutions		670			42,375			92,384
Federal funds sold		114			2,985			5,376
Cash and cash equivalents		6,929			54,197			108,034
Time deposits in other financial institutions		2,283			2,284			2,429
Securities available for sale		273,689			293,588			235,032
Gross loans, excluding Paycheck Protection Program (PPP)		569,969			504,235			441,997
PPP Loans		121			409			15,068
Allowance for loan losses		(5,468	)		(4,881	)		(4,575	)
Net loans		564,622			499,763			452,490
Bank owned life insurance		10,490			10,439			10,288
Restricted equity securities		3,258			3,250			3,228
Premises and equipment, net		223			267			405
Accrued interest receivable		2,748			2,479			2,260
Deferred tax asset, net		5,335			3,107			-
Other assets		7,192			5,790			6,531
Total assets	$	876,769		$	875,164		$	820,697
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest bearing	$	190,911		$	180,743		$	164,176
Interest bearing		591,081			597,310			543,238
Total deposits		781,992			778,053			707,414
Federal Home Loan Bank advances		4,500			4,500			12,835
Subordinated debt		14,847			14,653			14,748
Deferred tax liability, net		-			-			161
Other liabilities		4,468			2,789			6,786
Total liabilities		805,807			799,995			741,944
SHAREHOLDERS' EQUITY
Additional paid-in capital		31,258			32,400			31,556
Retained earnings		53,070			49,946			43,446
Accumulated other comprehensive income (loss)		(13,366	)		(7,177	)		3,751
Total shareholders' equity		70,962			75,169			78,753
Total liabilities and shareholders' equity	$	876,769		$	875,164		$	820,697
*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												Year To Date
	June 30, 2022*				March 31, 2022*				June 30, 2021*				June 30, 2022*				June 30, 2021*
Non-interest income
Wealth management services	$	4,056			$	4,182			$	3,726			$	8,237			$	7,156
Service charges on deposit accounts		106				99				82				205				141
Securities gains (losses), net		(30	)			(18	)			-				(47	)			0
Bank owned life insurance income		51				50				51				101				102
Other		38				48				37				86				77
Total non-interest income		4,221				4,361				3,896				8,582				7,476
Interest income
Loans, including fees	$	5,473			$	4,838			$	4,434			$	10,311			$	8,636
Taxable securities		1,143				1,114				719				2,257				1,380
Tax-exempt securities		396				396				395				793				774
Interest bearing deposits		48				31				46				79				108
Federal funds sold		3				1				0				4				1
Other interest income		47				16				48				62				67
Total interest income		7,110				6,396				5,642				13,506				10,966
Interest expense
Deposits		807				586				514				1,393				1,039
Short-term borrowings		4				1				-				5				-
Subordinated debentures		194				194				194				388				392
Long-term borrowings		22				23				72				46				149
Total interest expense		1,027				804				780				1,832				1,580
Net interest income		6,083				5,592				4,862				11,674				9,386
Provision for loan losses		586				105				0				691				92
Net interest income after provision for loan losses		5,497				5,487				4,862				10,983				9,294
Total revenue, net		9,718				9,848				8,758				19,565				16,770
Non interest expense
Salaries and employee benefits		3,469				3,511				3,230				6,980				6,336
Occupancy		243				252				246				495				467
Furniture and equipment		29				32				42				61				88
Data processing		354				366				327				720				671
Wealth management processing fees		159				165				164				324				343
Advertising and public relations		21				32				35				53				74
Professional services		179				166				183				345				310
FDIC insurance assessments		57				57				42				114				84
Other		214				242				208				455				460
Total non interest expense		4,725				4,823				4,477				9,547				8,833
Income before income taxes		4,993				5,025				4,281				10,018				7,937
Income tax expense		883				798				731				1,681				1,305
Net income	$	4,110			$	4,227			$	3,550			$	8,337			$	6,632
Earnings per share:
Basic	$	1.41			$	1.46			$	1.23			$	2.87			$	2.30
Diluted	$	1.41			$	1.45			$	1.22			$	2.86			$	2.29
*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)
	June 30, 2022*	March 31, 2022*	June 30, 2021*
Per Common Share Data
Net income attributable to common shareholders, per share
Basic	$1.41	$1.46	$1.23
Diluted	$1.41	$1.45	$1.22
Book value per common share	$24.49	$25.77	$27.35
Tangible book value per common share	$24.49	$25.77	$27.35
Basic weighted average common shares	2,822,292	2,793,014	2,814,196
Diluted weighted average common shares	2,835,394	2,807,866	2,825,668
Common shares outstanding at period end	2,898,167	2,917,044	2,879,177
Selected Balance Sheet Data
Tangible common equity (TCE) ratio	8.09%	8.59%	9.60%
Average loans	$544,496	$498,755	$446,079
Average earning assets (1)	$875,238	$840,952	$732,416
Average total assets	$890,088	$866,432	$765,391
Average stockholders' equity	$83,192	$83,009	$77,148
Selected Asset Quality Measures
Nonaccrual loans	$0	$0	2007
90+ days past due still accruing	$0	$0	38
Total nonperforming loans	$0	$0	2045
Total nonperforming assets	$0	$0	2045
Net charge offs	$0	$0	$1
Nonperforming loans to assets	0.00%	0.00%	0.24%
Nonperforming assets to total assets	0.00%	0.00%	0.25%
Nonperforming assets to total loans and other real estate	0.00%	0.00%	0.44%
Allowance for loan losses to gross loans	0.96%	0.97%	1.00%
Net charge offs to average loans	0.00%	0.00%	0.00%
Capital Ratios (Bank Subsidiary Only)
Tier 1 leverage	9.63%	9.48%	9.47%
Common equity tier 1	12.97%	14.00%	13.80%
Total risk-based capital	13.80%	14.83%	14.70%
Selected Performance Ratios
Efficiency ratio	45.86%	48.46%	51.67%
Return on average assets (ROA)	1.85%	1.98%	1.86%
Return on average stockholders' equity (ROE)	22.52%	20.64%	18.46%
Return on average tangible common equity (ROTCE)	22.52%	20.64%	18.46%
Net interest margin	2.83%	2.75%	2.71%
*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
	June 30, 2022*							March 31, 2022*							June 30, 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	$544,496			3.90	$5,299			$498,755			3.73	$4,586			$446,079			3.64	$4,049
Loan fees	$0			0.13	$174			$0			0.21	$259			$0			0.35	$385
Loans with fees	$544,496			4.03	$5,473			$498,755			3.94	$4,845			$446,079			3.99	$4,433
Mortgage loans held for sale	$53			4.53	$1			$61			3.72	$1			$108			3.16	$1
Federal funds sold	$2,255			0.55	$3			$1,735			0.17	$1			$2,124			0.06	$0
Deposits with banks	$28,206			0.68	$48			$34,026			0.37	$31			$53,857			0.34	$46
Investment securities - taxable	$234,780			1.95	$1,143			$239,635			1.86	$1,114			$164,584			1.75	$719
Investment securities - tax-exempt	$65,448			3.27	$396			$66,739			3.21	$396			$65,665			3.25	$395
Total Earning Assets	$875,238			3.30	$7,064			$840,952			3.14	$6,388			$732,416			3.14	$5,594
Non interest earning assets
Allowance for loan losses		(5,105	)						(4,776	)						(4,575	)
Cash and due from banks	$9,244							$8,046							$10,601
Premises and equipment	$248							$256							$403
Accrued interest receivable	$2,278							$2,065							$2,114
Other real estate	$0							$0							$0
Other assets	$24,350							$20,519							$20,112
Unrealized gain (loss) on inv. securities		(16,166	)						(630	)						4,320
Total Assets	$890,087							$866,432							$765,391
Interest bearing liabilities
Interest bearing demand	$365,521			0.05	$44			$363,022			0.03	$29			$308,736			0.02	$15
Savings and Money Market	$135,122			1.76	$594			$164,107			1.29	$523			$148,895			1.27	$470
Time deposits - Retail	$16,400			0.87	$36			$10,734			0.48	$13			$9,920			0.61	$15
Time Deposits - Wholesale	$82,376			0.65	$134			$39,793			0.22	$21			$20,271			0.28	$14
Total interest bearing deposits	$599,419			0.54	$807			$577,655			0.41	$586			$487,822			0.42	$514
Federal home Loan Bank advances	$4,500			1.98	$22			$6,278			1.48	$23			$14,603			1.95	$72
Subordinated debt	$14,776			5.19	$194			$14,863			5.22	$194			$14,679			5.23	$194
Other borrowings	$1,236			2.23	$4			$882			1.23	$1			$1,090			0.98	$0
Total borrowed funds	$20,512			4.25	$220			$22,023			3.96	$218			$30,371			3.47	$266
Total interest bearing liabilities	$619,931			0.66	$1,027			$599,678			0.54	$804			$518,193			0.60	$780
Net interest rate spread				2.64	$6,037						2.60	$5,584						2.54	$4,814
Non-interest bearing deposits	$193,872							$179,691							$164,831
Other liabilities	$3,092							$4,054							$5,219
Stockholder's equity	$73,192							$83,009							$77,148
Total Liabilities and Stockholder's Equity	$890,087							$866,432							$765,391
Cost of funds				0.50							0.42							0.46
Net interest margin				2.83							2.75							2.71
*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.

 

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:
	Six Months Ended								Six Months Ended
	June 30, 2022*								June 30, 2021*
	Average Balances			Rates/ Yields (%)	Interest Income/ Expense				Average Balances			Rates/ Yields (%)	Interest Income/ Expense
Earning Assets
Loans	$521,752			3.85	$9,885				$437,519			3.65	$7,909
Loan fees	$0			0.17	$434				$0			0.34	$728
Loans with fees	$521,752			3.99	$10,319				$437,519			3.98	$8,637
Mortgage loans held for sale	$57			4.10	$1				$102			3.03	$1
Federal funds sold	$1,997			0.39	$4				$2,148			0.06	$1
Deposits with banks	$31,100			0.51	$79				$60,342			0.36	$108
Investment securities - taxable	$237,194			1.90	$2,257				$156,893			1.76	$1,380
Investment securities - tax-exempt	$66,090			3.24	$792				$64,034			3.27	$774
Total Earning Assets	$858,190			3.22	$13,452				$721,038			3.12	$10,901
Non interest earning assets
Allowance for loan losses		(4,942	)							(4,558	)
Cash and due from banks	$8,648								$10,474
Premises and equipment	$272								$470
Accrued interest receivable	$2,172								$2,162
Other real estate	$0								$0
Other assets	$22,425								$19,826
Unrealized gain (loss) on inv. securities		(8,441	)							5,075
Total Assets	$878,324								$754,487
Interest bearing liabilities
Interest bearing demand	$364,279			0.04	$72				$309,031			0.03	$50
Savings and Money Market	$149,534			1.51	$1,117				$137,069			1.37	$933
Time deposits - Retail	$13,582			0.72	$48				$9,110			0.67	$30
Time Deposits - Wholesale	$61,202			0.51	$155				$22,274			0.23	$25
Total interest bearing deposits	$588,597			0.48	$1,393				$477,484			0.44	$1,039
Federal home Loan Bank advances	$5,384			1.69	$46				$15,288			1.94	$149
Subordinated debt	$14,820			5.20	$388				$14,738			5.28	$392
Other borrowings	$1,060			1.98	$4				$1,114			0.86	$0
Total borrowed funds	$21,264			4.10	$438				$31,140			3.45	$541
Total interest bearing liabilities	$609,861			0.60	$1,831				$508,624			0.62	$1,580
Net interest rate spread				2.62	$11,621							2.50	$9,321
Non-interest bearing deposits	$186,821								$162,771
Other liabilities	$3,569								$5,595
Stockholder's equity	$78,073								$77,497
Total Liabilities and Stockholder's Equity	$878,324								$754,487
Cost of funds				0.46								0.47
Net interest margin				2.79								2.68
*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 Q2 2022 earnings results?

Truxton Corporation reported net income of $4.1 million, or $1.41 per diluted share, a 16% increase from Q2 2021.

How did wealth management revenue perform in Q2 2022 for TRUX?

Wealth management revenue increased by 9% compared to the same quarter in 2021.

What was the loan growth percentage for Truxton Corporation in Q2 2022?

Total loans rose by 11% from Q1 2022 and 25% compared to Q2 2021.

What is Truxton Corporation's Tier 1 leverage ratio as of June 30, 2022?

Truxton Corporation's Tier 1 leverage ratio was 9.63% as of June 30, 2022.

Did Truxton Corporation experience any non-performing assets in Q2 2022?

Truxton Corporation reported zero non-performing assets for the quarter.