Truxton Corporation Reports Second Quarter 2024 Results

Rhea-AI Summary

Truxton reported strong Q2 2024 results, with net income attributable to common shareholders at $4.51 million, or $1.55 per diluted share, up 1% from Q2 2023. Non-interest income grew to $5.5 million, with wealth management constituting 94% of it. Despite a 2% decline in loans to $648 million and a 1% decrease in total deposits to $840 million, the company's net interest margin improved to 2.75%. The Bank's Tier 1 leverage ratio remained strong at 10.45%. However, non-interest expenses increased due to fraud losses of $733 thousand and higher costs related to headquarters relocation.

Positive

• Net income and earnings per share increased by 1% compared to Q2 2023
• Non-interest income grew to $5.5 million, up $763 thousand from Q2 2023
• Wealth management constituted 94% of non-interest income
• Net interest margin improved to 2.75%, up 21 basis points from Q2 2023
• Total deposits increased by 6% compared to June 30, 2023
• Book value per common share increased to $31.85 from $27.01 in Q2 2023

Negative

• Loans declined by 2% to $648 million compared to Q1 2024
• Total deposits declined by 1% from $850 million in Q1 2024 to $840 million
• Non-interest expenses increased by $712 thousand compared to the prior quarter
• Fraud losses of $733 thousand were reported in Q2 2024
• Cost of funds increased to 3.32% from 2.80% in Q2 2023

NASHVILLE, Tenn., July 18, 2024 (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, 2024. Second quarter net income attributable to common shareholders was $4.51 million, or $1.55 per diluted share, compared to $4.45 million, or $1.53 per diluted share, for the same quarter in 2023. Net income and fully diluted earnings per share for the quarter both rose by 1% compared to the second quarter of 2023.

“Truxton’s second quarter performance was strong in our core businesses, especially our wealth management component,” said Chairman and CEO Tom Stumb. “The durability of our model and the value of our service to clients were again emphasized as we grew earnings despite a number of one-time items that were a net negative to our bottom line.”  

Key Highlights

• Non-interest income grew to $5.5 million in the second quarter of 2024, which was up $395 thousand over the first quarter of 2024 and $763 thousand over the second quarter of 2023. Wealth management constituted 94% of non-interest income in the second quarter of 2024, compared to 96% and 93%, for the first quarter of 2024 and second quarter of 2023, respectively. Non-interest income for the quarter included hedge termination fees received by the bank that more than offset the loss on the sale of the hedged security.
• Non-interest expense in the second quarter of 2024 increased by $712 thousand compared to the prior quarter, driven by fraud losses of $733 thousand. Almost all this expense was related to a wire fraud incident for which the Bank is pursuing recovery.
• Our headquarters relocation in late May drove occupancy and professional services higher for the second quarter, while the depreciation of leasehold improvements, furniture and equipment will remain higher going forward.
• Loans declined by 2% to $648 million at quarter end compared to $660 million on March 31, 2024, and were up 3% compared to $628 million on June 30, 2023.
• Total deposits declined by 1% from $850 million at March 31, 2024, to $840 million at June 30, 2024, but were 6% higher in comparison to $790 million at June 30, 2023. Truxton continues to fund its growth from a single banking location led by its commitment to provide what it believes is superior deposit operations service and technology.
• Net interest margin for the second quarter of 2024 was 2.75%, an increase of 13 basis points from the 2.62% experienced in the quarter ended March 31, 2024, and an increase of 21 basis points from the 2.54% recorded in the quarter ended June 30, 2023. Cost of funds was 3.32% in the second quarter of 2024, down from 3.33% for the quarter ended March 31, 2024, and up from 2.80% for the quarter ended June 30, 2023.
• Allowance for credit losses, excluding that for unfunded commitments, was $6.2 million at quarter end June 30, 2024, compared to $6.3 million at March 31, 2024, and $6.0 million at June 30, 2023. For those three periods, such allowance amounts were 0.96%, 0.96%, and 0.95%, respectively, of gross loans outstanding at period end. For the same three periods, the Bank’s allowance for unfunded commitments was $438 thousand, $374 thousand, and $511 thousand, respectively.
• The Bank’s capital position remains strong. Its Tier 1 leverage ratio was 10.45% at June 30, 2024, compared to 10.40% at March 31, 2024, and 10.39% at June 30, 2023. Book value per common share was $31.85, $30.62, and $27.01 at June 30, 2024, March 31, 2024, and June 30, 2023, respectively.
• During the six months ended June 30, 2024, Truxton Corporation paid dividends of $1.86 per common share, inclusive of a $1.00 special cash dividend, and repurchased 15 thousand shares of its common stock for $964 thousand, an average price of $63.79 per share.
  

About Truxton
Truxton is a premier provider of wealth, banking, 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 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 Austin Branstetter 615-250-0783 austin.branstetter@truxtontrust.com	Media Relations Swan Burrus 615-250-0773 swan.burrus@truxtontrust.com

Truxton Corporation
Consolidated Balance Sheets
(000's)
(Unaudited)
	June 30, 2024*			March 31, 2024*			June 30, 2023*
ASSETS
Cash and due from financial institutions	$	8,494		$	4,909		$	30,617
Interest bearing deposits in other financial institutions		3,851			34,361			2,848
Federal funds sold		-			6,733			1,705
Cash and cash equivalents		12,345			46,003			35,171
Time deposits in other financial institutions		490			490			250
Securities available for sale		286,977			256,517			272,474
Gross loans, excluding Paycheck Protection Program		648,300			659,622			627,576
Allowance for credit losses		(6,234	)		(6,324	)		(5,982	)
Paycheck Protection Program Loans		38			48			80
Net loans		642,104			653,346			621,674
Bank owned life insurance		11,512			10,865			10,698
Restricted equity securities		1,802			1,822			5,011
Premises and equipment, net		3,406			2,089			575
Accrued interest receivable		4,744			4,522			11,782
Deferred tax asset, net		5,386			5,576			6,623
Other assets		16,633			16,484			1,387
Total assets	$	985,399		$	997,714		$	965,644
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest bearing	$	115,699		$	126,838		$	152,071
Interest bearing		724,251			723,645			637,595
Total deposits		839,950			850,483			789,665
Federal funds purchased		283			-			-
Swap counterparty cash collateral		5,000			5,570			3,780
Federal Home Loan Bank advances		2,250			3,250			16,500
Federal Reserve Bank Term Funding Program advances		20,000			22,700			55,000
Subordinated debt		14,213			14,514			14,946
Other liabilities		10,919			11,712			7,083
Total liabilities		892,615			908,229			886,974
SHAREHOLDERS' EQUITY
Common stock, $0.10 par value	$	290		$	290		$	289
Additional paid-in capital		31,381			31,881			31,743
Retained earnings		63,782			65,035			53,884
Accumulated other comprehensive income (loss)		(11,517	)		(12,055	)		(15,989	)
Net Income	$	8,848		$	4,334		$	8,743
Total shareholders' equity		92,784			89,485			78,670
Total liabilities and shareholders' equity	$	985,399		$	997,714		$	965,644
*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
	June 30, 2024*				March 31, 2024*				June 30, 2023*				June 30, 2024*				June 30, 2023*
Non-interest income
Wealth management services	$	5,206			$	4,907			$	4,442			$	10,113			$	8,613
Service charges on deposit accounts		91				91				139				182				276
Securities gains (losses), net		(213	)			0				0				(213	)			58
Bank owned life insurance income		62				58				54				120				106
Other		387				81				133				468				228
Total non-interest income		5,532				5,137				4,769				10,670				9,281
Interest income
Loans, including fees	$	10,459			$	10,357			$	9,107			$	20,816			$	17,594
Taxable securities		2,933				2,599				2,267				5,532				4,221
Tax-exempt securities		207				188				217				395				450
Interest bearing deposits		408				231				55				639				117
Federal funds sold		60				41				18				101				29
Other interest income		52				27				134				79				195
Total interest income		14,119				13,441				11,798				27,559				22,606
Interest expense
Deposits		6,939				6,450				4,938				13,389				9,155
Short-term borrowings		327				618				52				945				110
Long-term borrowings		13				15				817				28				1,054
Subordinated debentures		188				188				194				376				388
Total interest expense		7,467				7,270				6,001				14,737				10,706
Net interest income		6,652				6,171				5,797				12,822				11,900
Provision for credit losses		(27	)			(6	)			15				(33	)			74
Net interest income after provision for loan losses		6,679				6,177				5,782				12,855				11,826
Total revenue, net		12,211				11,315				10,550				23,526				21,107
Non interest expense
Salaries and employee benefits		3,897				4,076				3,663				7,973				7,429
Occupancy		484				453				314				937				600
Furniture and equipment		73				4				20				77				45
Data processing		439				418				455				857				882
Wealth management processing fees		208				214				176				422				352
Advertising and public relations		48				34				35				82				81
Professional services		272				209				54				481				169
FDIC insurance assessments		120				190				75				310				150
Other		1,048				278				279				1,326				676
Total non interest expense		6,589				5,877				5,070				12,466				10,384
Income before income taxes		5,621				5,438				5,481				11,059				10,722
Income tax expense		1,107				1,104				1,028				2,211				1,979
Net income	$	4,514			$	4,334			$	4,453			$	8,848			$	8,743
Earnings per share:
Basic	$	1.55			$	1.49			$	1.53			$	3.03			$	3.01
Diluted	$	1.55			$	1.48			$	1.53			$	3.03			$	3.00
*The information is preliminary, unaudited and based on company data available at the time of presentation. Totals may not foot due to rounding.

Truxton Corporation
Selected Quarterly Financial Data
At Or For The Three Months Ended
(000's)
(Unaudited)
	June 30, 2024*			March 31, 2024*			June 30, 2023*
Per Common Share Data
Net income attributable to shareholders, per share:
Basic	$1.55			$1.49			$1.53
Diluted	$1.55			$1.48			$1.53
Book value per common share	$31.85			$30.62			$27.01
Tangible book value per common share	$31.85			$30.62			$27.01
Basic weighted average common shares		2,834,023			2,831,217			2,830,894
Diluted weighted average common shares		2,839,086			2,838,003			2,838,321
Common shares outstanding at period end		2,913,478			2,922,761			2,912,781
Selected Balance Sheet Data
Tangible common equity (TCE) ratio		9.42%			8.97%			8.15%
Average Loans	$655,486			$656,790			$629,899
Average earning assets (1)	$980,123			$958,138			$932,732
Average total assets	$998,799			$970,227			$939,007
Average shareholders' equity	$90,929			$89,441			$76,536
Selected Asset Quality Measures
Nonaccrual loans	$0			$0			$0
90+ days past due still accruing	$0			$0			$0
Total nonperforming loans	$0			$0			$0
Total nonperforming assets	$0			$0			$0
Net charge offs (recoveries)	($1)			$11			$0
Nonperforming loans to assets		0.00%			0.00%			0.00%
Nonperforming assets to total assets		0.00%			0.00%			0.00%
Nonperforming assets to total loans and other real estate		0.00%			0.00%			0.00%
Allowance for credit losses to total loans**		0.96%			0.96%			0.95%
Net charge offs to average loans		0.00%			0.00%			0.00%
Capital Ratios (Bank Subsidiary Only)
Tier 1 leverage		10.45%			10.40%			10.39%
Common equity tier 1		14.62%			14.26%			14.25%
Total risk-based capital		15.54%			15.19%			15.18%
Selected Performance Ratios
Efficiency ratio		52.72%			51.55%			48.56%
Return on average assets (ROA)		1.82%			1.80%			1.90%
Return on average shareholders' equity (ROE)		19.97%			19.49%			23.33%
Return on average tangible common equity (ROTCE)		19.97%			19.49%			23.33%
Net interest margin		2.75%			2.62%			2.54%
*The information is preliminary, unaudited and based on company data available at the time of presentation.
**Ratios do not include reserve for unfunded commitments
(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, and investment 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, 2024*							March 31, 2024*							June, 30 2023*
	Average Balances		Rates/ Yields (%)		Interest Income/ Expense			Average Balances		Rates/ Yields (%)		Interest Income/ Expense			Average Balances		Rates/ Yields (%)		Interest Income/ Expense
Earning Assets
Loans	$655,486		6.34		$10,332			$656,790		6.28		$10,261			$629,899		5.72		$8,989
Loan fees	$0		0.08		$127			$0		0.06		$96			$0		0.08		$119
Loans with fees	$655,486		6.42		$10,459			$656,790		6.34		$10,357			$629,899		5.8		$9,107
Mortgage loans held for sale	$0		0.00		$0			$0		0.00		$0			$0		0.00		$0
Federal funds sold	$4,476		5.32		$60			$3,255		4.93		$41			$1,456		4.85		$18
Deposits with banks	$27,887		5.88		$408			$19,536		4.75		$231			$15,618		4.95		$193
Investment securities - taxable	$257,470		4.56		$2,933			$245,516		4.23		$2,599			$247,515		3.66		$2,267
Investment securities - tax-exempt	$34,804		3.56		$207			$33,041		3.4		$188			$38,243		3.39		$217
Total Earning Assets	$980,123		5.81		$14,067			$958,138		5.66		$13,416			$932,732		5.12		$11,802
Non interest earning assets
Allowance for loan losses	(6,306)							(6,309)							(5,959)
Cash and due from banks	$6,856							$5,270							$6,092
Premises and equipment	$2,698							$1,260							$164
Accrued interest receivable	$3,975							$3,478							$3,213
Other real estate	$0							$0							$0
Other assets	$32,919							$30,494							$28,375
Unrealized gain (loss) on inv. securities	(21,466)							(22,103)							(25,610)
Total Assets	$998,799							$970,227							$939,007
Interest bearing liabilities
Interest bearing demand	$340,187		3.62		$3,062			$330,343		3.53		$2,898			$341,780		3.14		$2,673
Savings and money market	$175,264		3.55		$1,546			$162,640		3.4		$1,375			$139,463		2.62		$912
Time deposits - retail	$14,887		3.4		$126			$15,557		3.43		$133			$16,758		2.4		$100
Time deposits - wholesale	$201,005		4.41		$2,205			$173,570		4.74		$2,044			$128,795		3.9		$1,254
Total interest bearing deposits	$731,343		3.82		$6,939			$682,110		3.8		$6,450			$626,796		3.16		$4,938
Federal Home Loan Bank advances	$3,173		1.64		$13			$3,401		1.7		$15			$18,907		4.27		$204
Subordinated debt	$14,471		5.14		$188			$14,610		5.09		$188			$14,876		5.16		$194
Other borrowings	$30,973		4.18		$327			$57,060		4.28		$618			$58,342		5.86		$664
Total borrowed funds	$48,617		4.30		$528			$75,071		4.32		$821			$92,125		4.56		$1,062
Total interest bearing liabilities	$779,960		3.85		$7,467			$757,181		3.85		$7,271			$718,921		3.34		$6,000
Net interest rate spread			1.96		$6,600					1.81		$6,145					1.78		$5,801
Non-interest bearing deposits	$124,029							$118,809							$139,807
Other liabilities	$3,881							$4,796							$3,743
Shareholder's equity	$90,929							$89,441							$76,536
Total Liabilities and Shareholder's Equity	$998,799							$970,227							$939,007
Cost of funds			3.32							3.33							2.80
Net interest margin			2.75							2.62							2.54
*The information is preliminary, unaudited and based on company data available at the time of presentation. Totals may not foot due to rounding.
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, 2024*							June 30, 2023*
	Average Balances		Rates/ Yields (%)		Interest Income/ Expense			Average Balances		Rates/ Yields (%)		Interest Income/ Expense
Earning Assets
Loans	$656,138		6.31		$20,593			$625,977		5.59		$17,364
Loan fees	$0		0.07		$223			$0		0.07		$232
Loans with fees	$656,138		6.38		$20,816			$625,977		5.67		$17,596
Mortgage loans held for sale	$0		0.00		$0			$0		0.00		$0
Federal funds sold	$3,865		5.16		$101			$1,162		4.96		$29
Deposits with banks	$23,712		5.41		$638			$13,695		4.71		$320
Investment securities - taxable	$251,493		4.4		$5,532			$242,585		3.48		$4,221
Investment securities - tax-exempt	$33,922		3.48		$395			$39,304		3.42		$450
Total Earning Assets	$969,130		5.74		$27,482			$922,723		4.98		$22,616
Non interest earning assets
Allowance for loan losses	(6,308)							(6,118)
Cash and due from banks	$6,064							$6,318
Premises and equipment	$1,979							$183
Accrued interest receivable	$3,726							$3,029
Other real estate	$0							$0
Other assets	$31,706							$28,487
Unrealized gain (loss) on inv. securities	(21,784)							(25,842)
Total Assets	$984,513							$928,780
Interest bearing liabilities
Interest bearing demand	$335,265		3.58		$5,961			$353,953		2.96		$5,201
Savings and Money Market	$168,952		3.48		$2,920			$133,476		2.18		$1,445
Time deposits - Retail	$15,222		3.42		$259			$17,503		2.16		$187
Time Deposits - Wholesale	$187,287		4.56		$4,249			$131,236		3.57		$2,321
Total interest bearing deposits	$706,726		3.81		$13,389			$636,167		2.9		$9,154
Federal home Loan Bank advances	$3,287		1.67		$28			$17,881		4.19		$376
Subordinated debt	$14,541		5.11		$376			$14,939		5.16		$388
Other borrowings	$44,016		4.25		$944			$35,025		4.45		$787
Total borrowed funds	$61,844		4.31		$1,348			$67,845		4.55		$1,551
Total interest bearing liabilities	$768,570		3.85		$14,737			$704,012		3.06		$10,705
Net interest rate spread			1.89		$12,745					1.92		$11,911
Non-interest bearing deposits	$121,419							$145,004
Other liabilities	$4,339							$3,715
Shareholder's equity	$90,185							$76,049
Total Liabilities and Shareholder's Equity	$984,513							$928,780
Cost of funds			3.32							2.54
Net interest margin			2.68							2.65
*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 was Truxton 's (TRUX) net income for Q2 2024?

Truxton 's net income attributable to common shareholders for Q2 2024 was $4.51 million, or $1.55 per diluted share.

How did Truxton's (TRUX) non-interest income perform in Q2 2024?

Non-interest income grew to $5.5 million in Q2 2024, up $395 thousand from Q1 2024 and $763 thousand from Q2 2023.

What was Truxton's (TRUX) loan balance at the end of Q2 2024?

Truxton's loan balance at the end of Q2 2024 was $648 million, down 2% from $660 million on March 31, 2024.

How did Truxton's (TRUX) deposits change in Q2 2024?

Total deposits declined by 1% from $850 million at March 31, 2024, to $840 million at June 30, 2024, but were 6% higher compared to June 30, 2023.

What was Truxton's (TRUX) net interest margin in Q2 2024?

Truxton's net interest margin for Q2 2024 was 2.75%, an increase of 13 basis points from Q1 2024 and 21 basis points from Q2 2023.