CapStar Financial Holdings, Inc. (“CapStar”)
(NASDAQ:CSTR) today reported net income of $8.2 million or
$0.37 per diluted share, for the quarter ended September 30, 2022,
compared with net income of $10.0 million or $0.45 per diluted
share, for the quarter ended June 30, 2022, and net income of $13.1
million or $0.59 per diluted share, for the quarter ended September
30, 2021. Annualized return on average assets and return on average
equity for the quarter ended September 30, 2022 were 1.03 percent
and 8.93 percent, respectively. Third quarter results include $2.1
million in losses related to Tri-Net loans, $2.2 million in two
operational loss incidents, which occurred during the quarter and
for which the bank is seeking a potential recovery, and $0.8
million of voluntary executive incentive reversals.
For the nine months ended September 30, 2022, the Company
reported net income of $28.8 million or $1.30 per diluted share,
compared with $36.2 million or $1.63 per diluted share, for the
same period of 2021. Year to date 2022 annualized return on average
assets and return on average equity were 1.23 percent and 10.47
percent, respectively.
Four Key Drivers |
|
Targets |
|
3Q22 |
|
2Q22 |
|
3Q21 |
Annualized revenue growth |
|
> 5% |
|
-19.51% |
|
1.15% |
|
20.49% |
Net interest margin |
|
≥ 3.60% |
|
3.50% |
|
3.41% |
|
3.12% |
Efficiency ratio |
|
≤ 55% |
|
61.53% |
|
56.32% |
|
53.06% |
Annualized net charge-offs to average loans |
|
≤ 0.25% |
|
0.02% |
|
0.00% |
|
0.05% |
|
|
|
|
|
|
|
|
|
"CapStar's third quarter earnings did not meet our expectations
nor represent CapStar's continued strong performance," said Timothy
K. Schools, CapStar President and Chief Executive Officer. "As we
previously communicated, loans produced in our Tri-Net division
since the spring have proved challenging to achieve a gain on sale.
Additional production was ceased in early July, and this quarter
the Company experienced realized and unrealized losses totaling
$2.1 million related to the remaining loans in process. Currently,
no further Tri-Net loans exist in loans held for sale and of the
$2.3 million of related losses recorded since second quarter,
$900,000 are unrealized where there is a high probability that it
will be recovered over time through accretion. Additionally, the
Company experienced a $1.5 million wire fraud and $0.7 million
operational loss for which the Company is pursuing possible
recoveries."
"Whereas the current market has proved challenging for Tri-Net
and we are disappointed in these operational losses, the underlying
quarterly performance of the bank was outstanding. Adjusting for
these items, we experienced strong operating leverage with revenue
rising $600,000 and expenses declining $800,000, our net interest
margin expanded to 3.50%, efficiency ratio improved to 52.81%, and
charge-offs remained low at 0.02%, resulting in a return on assets
of 1.39% all with no contribution from our mortgage or Tri-Net
divisions. While the current interest rate environment is
presenting certain challenges to industry loan demand, mortgage
banking, and deposits, we are proactively managing our loan
portfolio for a potential economic slowdown and remain excited
about our improved profitability, expanded high-growth markets, and
strengthened sales teams."
Revenue
Total revenue, defined as net interest income plus noninterest
income, was $28.8 million in the third quarter. Second and third
quarter revenues were negatively impacted by $0.2 million and $2.1
million, respectively, as the Company liquidated and transferred
the remaining balance of its Tri-Net loans held for sale to loans
held for investment. Adjusting for the impact of the $2.1
million Tri-Net loss, net interest income and noninterest income
totaled $25.6 million and $5.4 million, an increase of $1.1 million
and a decrease of $0.7 million, respectively, from the second
quarter of 2022. Rising interest rates and a positive mix shift in
average earning assets contributed to the increase in net interest
income, while noninterest income declined due to lower Tri-Net and
mortgage division revenues.
Third quarter 2022 average earning assets remained flat at $2.91
billion compared to June 30, 2022 as strong loan growth was
principally funded from cash. Average loans held for investment,
excluding Tri-Net loan transfers from held for sale, increased
$48.2 million, or 9.2 percent linked-quarter annualized. The
current commercial loan pipeline remains strong, exceeding $550
million; however, during the quarter, the Company limited
commercial real estate lending to established, existing customers
as a result of a softening economic outlook and in an effort to
balance loan demand with an increasingly challenging deposit
environment.
For the third quarter of 2022, the net interest margin increased
9 basis points from the prior quarter to 3.50 percent primarily
resulting from continued increases in interest rates and the
positive mix shift in average earning assets.
The Company's average deposits totaled $2.66 billion in the
third quarter of 2022, flat compared to the second quarter of 2022.
During the quarter, the Company experienced a $39.4 million
increase in average savings and money market accounts and a $111.1
million increase in higher cost average time deposits, primarily a
result of brokered deposit issuances. These increases were
partially offset by a $94.3 million decrease in interest-bearing
transaction accounts, creating an overall net increase of $56.3
million in average interest-bearing deposits when compared to the
second quarter of 2022. During the quarter, the Company’s lowest
cost deposit category, noninterest-bearing, decreased 2.3 percent
to 25.0 percent of total average deposits as of September 30, 2022.
Total deposit costs increased 39 basis points to 0.62 percent
compared to 0.23 percent for the prior quarter. A key longer-term
strategic initiative is to create a stronger deposit-led culture
with an emphasis on lower cost relationship-based deposits.
Noninterest income for the third quarter was $3.3 million.
Noninterest income when adjusted for the Tri-Net losses during the
quarter, decreased $0.5 million from the second quarter ended June
30, 2022. This decrease was attributable to a $0.9 million decline
in mortgage revenue partially offset by a $0.3 million improvement
in the Company’s SBA division. The Company’s mortgage division
experienced a reduction in demand due to higher market rates and
anticipates a difficult environment at least until the 2023 buying
season returns. Tri-Net production remains halted until interest
rates and the associated market stabilizes.
Noninterest Expense and Operating
Efficiency
Improving productivity and operating efficiency is a key focus
of the Company. During the quarter, the Company continued to
exhibit strong expense discipline. Noninterest expense was $17.7
million for the third quarter. Noninterest expense when adjusted
for the previously discussed $2.2 million in operational losses and
$0.8 million executive incentive reversal, decreased $0.8 million
from the second quarter of 2022 to $16.3 million in the third
quarter of 2022. Additionally, as a result of the challenging
mortgage environment, annualized mortgage expenses were reduced by
approximately $0.4 million in the third quarter with the majority
of the benefit to begin in fourth quarter of 2022.
For the quarter ended September 30, 2022, the efficiency ratio
was 61.53%. The efficiency ratio adjusted for the operational
losses, executive incentive reversal, and Tri-Net losses, was
52.81% percent, an improvement from 56.32 percent in the second
quarter of 2022. Annualized noninterest expense, adjusted for the
operational losses and executive incentive reversal, as a
percentage of average assets decreased 13 basis points to 2.06
percent for the quarter ended September 30, 2022 compared to 2.19
percent for the quarter ended June 30, 2022. Assets per employee
improved to $8.2 million as of September 30, 2022 compared to $7.9
million in the previous quarter. The continued discipline in
productivity metrics demonstrates the Company's commitment to
outstanding performance.
Asset Quality
Strong asset quality is a core tenant of the Company’s
culture. Sound risk management led to continued low net
charge-offs and strong credit metrics. Annualized net
charge-offs to average loans for the three months ended September
30, 2022 were 0.02 percent. Criticized and classified loans
continued to improve to $41.1 million or 1.79 percent of total
loans at September 30, 2022, a $6.3 million or 33 basis point
improvement from June 30, 2022, and included an upgrade of the
Company's largest substandard shared national credit of $11.5
million. Past due loans increased to $14.4 million or 0.63
percent of total loans held for investment at September 30, 2022
compared to a record $2.6 million or 0.12 percent of total loans
held for investment at June 30, 2022. The increase in past dues is
principally related to two relationships totaling $8.3 million, of
which the Company feels the risk of loss is nominal, $1.6 million
of matured loans, which were not renewed by quarter end, and $0.4
million for three PPP loans, which are fully guaranteed.
Non-performing assets to total loans and OREO increased to 0.30
percent at September 30, 2022 compared to 0.11 percent at June 30,
2022. The increase in non-performing assets is solely related
to one of the two previously cited relationships.
The Company recorded a provision for loan losses of $0.9 million
during the quarter as a result of continued strong loan growth and
other qualitative factors. The allowance for loan losses plus the
fair value mark on acquired loans to total loans, less PPP loans,
was flat at 1.09 percent as of September 30, 2022 compared to June
30, 2022.
Asset Quality
Data: |
|
9/30/2022 |
|
|
6/30/2022 |
|
|
3/31/2022 |
|
|
12/31/2021 |
|
|
9/30/2021 |
|
Annualized net charge-offs to average loans |
|
|
0.02 |
% |
|
|
0.00 |
% |
|
|
0.01 |
% |
|
|
0.04 |
% |
|
|
0.05 |
% |
Criticized and classified loans to total loans |
|
|
1.79 |
% |
|
|
2.12 |
% |
|
|
2.49 |
% |
|
|
2.64 |
% |
|
|
2.85 |
% |
Loans- past due to total end of period loans |
|
|
0.63 |
% |
|
|
0.12 |
% |
|
|
0.17 |
% |
|
|
0.25 |
% |
|
|
0.31 |
% |
Loans- over 90 days past due to total end of period loans |
|
|
0.27 |
% |
|
|
0.02 |
% |
|
|
0.05 |
% |
|
|
0.11 |
% |
|
|
0.12 |
% |
Non-performing assets to total loans held for investment and
OREO |
|
|
0.30 |
% |
|
|
0.11 |
% |
|
|
0.18 |
% |
|
|
0.18 |
% |
|
|
0.20 |
% |
Allowance for loan losses plus fair value marks / Non-PPP
Loans |
|
|
1.09 |
% |
|
|
1.09 |
% |
|
|
1.16 |
% |
|
|
1.27 |
% |
|
|
1.41 |
% |
Allowance for loan losses to non-performing loans |
|
|
333 |
% |
|
|
974 |
% |
|
|
596 |
% |
|
|
666 |
% |
|
|
657 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
The Company’s third quarter effective income tax rate remained
flat at 20 percent when compared to the prior quarter ended June
30, 2022. The Company anticipates its effective tax rate for 2022
to be approximately 20 percent.
Capital
The Company continues to be well capitalized with tangible
equity of $302.1 million at September 30, 2022. Tangible book
value per share of common stock for the quarter ended September 30,
2022 was $13.73 compared to $14.17 and $14.53 for the quarters
ended June 30, 2022 and September 30, 2021, respectively, with the
changes being attributable to a decline in the value of the
investment portfolio related to an increase in market interest
rates, partially offset by ongoing earnings. Excluding the
impact of after-tax gain or loss within the available for sale
investment portfolio, tangible book value per share of common stock
for the quarter ended September 30, 2022 was $16.22 compared to
$15.86 and $14.59 for the quarters ended June 30, 2022 and
September 30, 2021, respectively.
Capital
ratios: |
|
9/30/2022 |
|
|
6/30/2022 |
|
|
3/31/2022 |
|
|
12/31/2021 |
|
|
9/30/2021 |
|
Total risk-based capital |
|
|
14.59 |
% |
|
|
14.79 |
% |
|
|
15.60 |
% |
|
|
16.29 |
% |
|
|
16.23 |
% |
Common equity tier 1 capital |
|
|
12.70 |
% |
|
|
12.87 |
% |
|
|
13.58 |
% |
|
|
14.11 |
% |
|
|
13.95 |
% |
Leverage |
|
|
11.22 |
% |
|
|
11.10 |
% |
|
|
10.99 |
% |
|
|
10.69 |
% |
|
|
10.28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company did not repurchase common stock in the third quarter
of 2022. The total remaining authorization for future purchases was
$23.9 million as of September 30, 2022. The Plan will terminate on
the earlier of the date on which the maximum authorized dollar
amount of shares of common stock has been repurchased or January
31, 2023.
Dividend
On October 19, 2022, the Board of Directors of the Company
approved a quarterly dividend of $0.10 per common share payable on
November 23, 2022 to shareholders of record of CapStar’s common
stock as of the close of business on November 9, 2022.
Conference Call and Webcast Information
CapStar will host a conference call and webcast at 9:00 a.m.
Central Time on Friday, October 21, 2022. During the call,
management will review the third quarter results and operational
highlights. Interested parties may listen to the call by
registering here to access the live call, including for
participants who plan to ask a question during the call. A
simultaneous webcast may be accessed on CapStar’s website
at ir.capstarbank.com by clicking on “News & Events.” An
archived version of the webcast will be available in the same
location shortly after the live call has ended.
About CapStar Financial Holdings, Inc.
CapStar Financial Holdings, Inc. is a bank holding company
headquartered in Nashville, Tennessee and operates primarily
through its wholly owned subsidiary, CapStar Bank, a
Tennessee-chartered state bank. CapStar Bank is a commercial bank
that seeks to establish and maintain comprehensive relationships
with its clients by delivering customized and creative banking
solutions and superior client service. As of September 30, 2022, on
a consolidated basis, CapStar had total assets of $3.2 billion,
total loans of $2.3 billion, total deposits of $2.6 billion, and
shareholders’ equity of $347.5 million. Visit
www.capstarbank.com for more information.
NON-GAAP MEASURES
Certain releases may include financial information determined by
methods other than in accordance with generally accepted accounting
principles (“GAAP”). This financial information may include certain
operating performance measures, which exclude merger-related and
other charges that are not considered part of recurring operations.
Such measures may include: “Efficiency ratio – operating,”
“Expenses – operating,” “Earnings per share – operating,” “Diluted
earnings per share – operating,” “Tangible book value per share,”
“Return on common equity – operating,” “Return on tangible common
equity – operating,” “Return on assets – operating”, "Tangible
common equity to tangible assets" or other measures.
Management may include these non-GAAP measures because it
believes these measures may provide useful supplemental information
for evaluating CapStar’s underlying performance trends. Further,
management uses these measures in managing and evaluating CapStar’s
business and intends to refer to them in discussions about our
operations and performance. Operating performance measures should
be viewed in addition to, and not as an alternative to or
substitute for, measures determined in accordance with GAAP, and
are not necessarily comparable to non-GAAP measures that may be
presented by other companies. To the extent applicable,
reconciliations of these non-GAAP measures to the most directly
comparable GAAP measures can be found in the ‘Non-GAAP
Reconciliation Tables’ included in the exhibits to this
presentation.
|
|
CAPSTAR FINANCIAL HOLDINGS, INC. AND
SUBSIDIARYConsolidated Statements of Income (unaudited)
(dollars in thousands, except share data)Third quarter 2022
Earnings Release |
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
27,335 |
|
|
$ |
22,350 |
|
|
$ |
71,476 |
|
|
$ |
66,936 |
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
1,966 |
|
|
|
1,655 |
|
|
|
5,643 |
|
|
|
4,900 |
|
Tax-exempt |
|
|
314 |
|
|
|
344 |
|
|
|
958 |
|
|
|
1,065 |
|
Federal funds sold |
|
|
7 |
|
|
|
9 |
|
|
|
31 |
|
|
|
12 |
|
Restricted equity securities |
|
|
215 |
|
|
|
161 |
|
|
|
544 |
|
|
|
482 |
|
Interest-bearing deposits in financial institutions |
|
|
617 |
|
|
|
171 |
|
|
|
1,076 |
|
|
|
405 |
|
Total interest income |
|
|
30,454 |
|
|
|
24,690 |
|
|
|
79,728 |
|
|
|
73,800 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
|
1,205 |
|
|
|
390 |
|
|
|
2,279 |
|
|
|
1,216 |
|
Savings and money market accounts |
|
|
1,603 |
|
|
|
288 |
|
|
|
2,401 |
|
|
|
896 |
|
Time deposits |
|
|
1,332 |
|
|
|
654 |
|
|
|
2,271 |
|
|
|
2,317 |
|
Federal funds purchased |
|
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
Federal Home Loan Bank advances |
|
|
365 |
|
|
|
— |
|
|
|
461 |
|
|
|
12 |
|
Subordinated notes |
|
|
394 |
|
|
|
394 |
|
|
|
1,181 |
|
|
|
1,181 |
|
Total interest expense |
|
|
4,901 |
|
|
|
1,726 |
|
|
|
8,595 |
|
|
|
5,622 |
|
Net interest income |
|
|
25,553 |
|
|
|
22,964 |
|
|
|
71,133 |
|
|
|
68,178 |
|
Provision for loan losses |
|
|
867 |
|
|
|
— |
|
|
|
926 |
|
|
|
(415 |
) |
Net interest income after provision for loan losses |
|
|
24,686 |
|
|
|
22,964 |
|
|
|
70,207 |
|
|
|
68,593 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposit service charges |
|
|
1,251 |
|
|
|
1,187 |
|
|
|
3,575 |
|
|
|
3,398 |
|
Interchange and debit card transaction fees |
|
|
1,245 |
|
|
|
1,236 |
|
|
|
3,803 |
|
|
|
3,555 |
|
Mortgage banking |
|
|
765 |
|
|
|
4,693 |
|
|
|
4,436 |
|
|
|
13,318 |
|
Tri-Net |
|
|
(2,059 |
) |
|
|
1,939 |
|
|
|
39 |
|
|
|
4,618 |
|
Wealth management |
|
|
385 |
|
|
|
481 |
|
|
|
1,284 |
|
|
|
1,412 |
|
SBA lending |
|
|
560 |
|
|
|
911 |
|
|
|
1,054 |
|
|
|
1,781 |
|
Net gain on sale of securities |
|
|
7 |
|
|
|
7 |
|
|
|
8 |
|
|
|
20 |
|
Other noninterest income |
|
|
1,118 |
|
|
|
1,197 |
|
|
|
4,038 |
|
|
|
3,446 |
|
Total noninterest income |
|
|
3,272 |
|
|
|
11,651 |
|
|
|
18,237 |
|
|
|
31,548 |
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
8,235 |
|
|
|
10,980 |
|
|
|
27,713 |
|
|
|
31,210 |
|
Data processing and software |
|
|
2,861 |
|
|
|
2,632 |
|
|
|
8,355 |
|
|
|
8,530 |
|
Occupancy |
|
|
1,092 |
|
|
|
1,028 |
|
|
|
3,266 |
|
|
|
3,193 |
|
Equipment |
|
|
743 |
|
|
|
760 |
|
|
|
2,235 |
|
|
|
2,640 |
|
Professional services |
|
|
468 |
|
|
|
469 |
|
|
|
1,653 |
|
|
|
1,634 |
|
Regulatory fees |
|
|
269 |
|
|
|
279 |
|
|
|
814 |
|
|
|
746 |
|
Acquisition related expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
323 |
|
Amortization of intangibles |
|
|
415 |
|
|
|
477 |
|
|
|
1,291 |
|
|
|
1,478 |
|
Other operating |
|
|
3,652 |
|
|
|
1,741 |
|
|
|
7,218 |
|
|
|
5,105 |
|
Total noninterest expense |
|
|
17,735 |
|
|
|
18,366 |
|
|
|
52,545 |
|
|
|
54,859 |
|
Income before income taxes |
|
|
10,223 |
|
|
|
16,249 |
|
|
|
35,899 |
|
|
|
45,282 |
|
Income tax expense |
|
|
2,030 |
|
|
|
3,147 |
|
|
|
7,060 |
|
|
|
9,075 |
|
Net income |
|
$ |
8,193 |
|
|
$ |
13,102 |
|
|
$ |
28,839 |
|
|
$ |
36,207 |
|
Per share information: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per share of common stock |
|
$ |
0.37 |
|
|
$ |
0.59 |
|
|
$ |
1.31 |
|
|
$ |
1.64 |
|
Diluted net income per share of common stock |
|
$ |
0.37 |
|
|
$ |
0.59 |
|
|
$ |
1.30 |
|
|
$ |
1.63 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
21,938,259 |
|
|
|
22,164,278 |
|
|
|
22,051,950 |
|
|
|
22,114,948 |
|
Diluted |
|
|
21,988,085 |
|
|
|
22,218,402 |
|
|
|
22,104,687 |
|
|
|
22,165,130 |
|
This
information is preliminary and based on CapStar data available at
the time of this earnings release. |
CAPSTAR
FINANCIAL HOLDINGS, INC. AND SUBSIDIARYSelected
Quarterly Financial Data (unaudited) (dollars in thousands, except
share data)Third quarter 2022 Earnings
Release |
|
|
|
Five Quarter Comparison |
|
|
|
9/30/2022 |
|
|
6/30/2022 |
|
|
3/31/2022 |
|
|
12/31/2021 |
|
|
9/30/2021 |
|
Income Statement
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
25,553 |
|
|
$ |
24,440 |
|
|
$ |
21,140 |
|
|
$ |
22,992 |
|
|
$ |
22,964 |
|
Provision for loan losses |
|
|
867 |
|
|
|
843 |
|
|
|
(784 |
) |
|
|
(651 |
) |
|
|
— |
|
Net interest income after provision for loan losses |
|
|
24,686 |
|
|
|
23,597 |
|
|
|
21,924 |
|
|
|
23,643 |
|
|
|
22,964 |
|
Deposit service charges |
|
|
1,251 |
|
|
|
1,182 |
|
|
|
1,142 |
|
|
|
1,117 |
|
|
|
1,187 |
|
Interchange and debit card transaction fees |
|
|
1,245 |
|
|
|
1,336 |
|
|
|
1,222 |
|
|
|
1,261 |
|
|
|
1,236 |
|
Mortgage banking |
|
|
765 |
|
|
|
1,705 |
|
|
|
1,966 |
|
|
|
2,740 |
|
|
|
4,693 |
|
Tri-Net |
|
|
(2,059 |
) |
|
|
(73 |
) |
|
|
2,171 |
|
|
|
3,996 |
|
|
|
1,939 |
|
Wealth management |
|
|
385 |
|
|
|
459 |
|
|
|
440 |
|
|
|
438 |
|
|
|
481 |
|
SBA lending |
|
|
560 |
|
|
|
273 |
|
|
|
222 |
|
|
|
279 |
|
|
|
911 |
|
Net gain (loss) on sale of securities |
|
|
7 |
|
|
|
— |
|
|
|
— |
|
|
|
8 |
|
|
|
7 |
|
Other noninterest income |
|
|
1,118 |
|
|
|
994 |
|
|
|
1,926 |
|
|
|
1,295 |
|
|
|
1,197 |
|
Total noninterest income |
|
|
3,272 |
|
|
|
5,876 |
|
|
|
9,089 |
|
|
|
11,134 |
|
|
|
11,651 |
|
Salaries and employee benefits |
|
|
8,235 |
|
|
|
9,209 |
|
|
|
10,269 |
|
|
|
10,549 |
|
|
|
10,980 |
|
Data processing and software |
|
|
2,861 |
|
|
|
2,847 |
|
|
|
2,647 |
|
|
|
2,719 |
|
|
|
2,632 |
|
Occupancy |
|
|
1,092 |
|
|
|
1,076 |
|
|
|
1,099 |
|
|
|
1,012 |
|
|
|
1,028 |
|
Equipment |
|
|
743 |
|
|
|
783 |
|
|
|
709 |
|
|
|
867 |
|
|
|
760 |
|
Professional services |
|
|
468 |
|
|
|
506 |
|
|
|
679 |
|
|
|
521 |
|
|
|
469 |
|
Regulatory fees |
|
|
269 |
|
|
|
265 |
|
|
|
280 |
|
|
|
284 |
|
|
|
279 |
|
Acquisition related expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Amortization of intangibles |
|
|
415 |
|
|
|
430 |
|
|
|
446 |
|
|
|
461 |
|
|
|
477 |
|
Other noninterest expense |
|
|
3,652 |
|
|
|
1,959 |
|
|
|
1,607 |
|
|
|
2,269 |
|
|
|
1,741 |
|
Total noninterest expense |
|
|
17,735 |
|
|
|
17,075 |
|
|
|
17,736 |
|
|
|
18,682 |
|
|
|
18,366 |
|
Net income before income tax expense |
|
|
10,223 |
|
|
|
12,398 |
|
|
|
13,277 |
|
|
|
16,095 |
|
|
|
16,249 |
|
Income tax expense |
|
|
2,030 |
|
|
|
2,426 |
|
|
|
2,604 |
|
|
|
3,625 |
|
|
|
3,147 |
|
Net income |
|
$ |
8,193 |
|
|
$ |
9,972 |
|
|
$ |
10,673 |
|
|
$ |
12,470 |
|
|
$ |
13,102 |
|
Weighted average shares - basic |
|
|
21,938,259 |
|
|
|
22,022,109 |
|
|
|
22,198,339 |
|
|
|
22,166,410 |
|
|
|
22,164,278 |
|
Weighted average shares - diluted |
|
|
21,988,085 |
|
|
|
22,074,260 |
|
|
|
22,254,644 |
|
|
|
22,221,989 |
|
|
|
22,218,402 |
|
Net income per share, basic |
|
$ |
0.37 |
|
|
$ |
0.45 |
|
|
$ |
0.48 |
|
|
$ |
0.56 |
|
|
$ |
0.59 |
|
Net income per share, diluted |
|
|
0.37 |
|
|
|
0.45 |
|
|
|
0.48 |
|
|
|
0.56 |
|
|
|
0.59 |
|
Balance Sheet Data (at
period end): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
199,913 |
|
|
$ |
113,825 |
|
|
$ |
355,981 |
|
|
$ |
415,125 |
|
|
$ |
359,267 |
|
Securities available-for-sale |
|
|
401,345 |
|
|
|
437,420 |
|
|
|
460,558 |
|
|
|
459,396 |
|
|
|
483,778 |
|
Securities held-to-maturity |
|
|
1,762 |
|
|
|
1,769 |
|
|
|
1,775 |
|
|
|
1,782 |
|
|
|
1,788 |
|
Loans held for sale |
|
|
43,122 |
|
|
|
85,884 |
|
|
|
106,895 |
|
|
|
83,715 |
|
|
|
176,488 |
|
Loans held for investment |
|
|
2,292,781 |
|
|
|
2,234,833 |
|
|
|
2,047,555 |
|
|
|
1,965,769 |
|
|
|
1,894,249 |
|
Allowance for loan losses |
|
|
(22,431 |
) |
|
|
(21,684 |
) |
|
|
(20,857 |
) |
|
|
(21,698 |
) |
|
|
(22,533 |
) |
Total assets |
|
|
3,166,687 |
|
|
|
3,096,537 |
|
|
|
3,190,749 |
|
|
|
3,133,046 |
|
|
|
3,112,127 |
|
Non-interest-bearing deposits |
|
|
629,556 |
|
|
|
717,167 |
|
|
|
702,172 |
|
|
|
725,171 |
|
|
|
718,299 |
|
Interest-bearing deposits |
|
|
2,004,827 |
|
|
|
1,913,320 |
|
|
|
2,053,823 |
|
|
|
1,959,110 |
|
|
|
1,956,093 |
|
Federal Home Loan Bank advances and other borrowings |
|
|
149,633 |
|
|
|
74,599 |
|
|
|
29,566 |
|
|
|
29,532 |
|
|
|
29,499 |
|
Total liabilities |
|
|
2,819,169 |
|
|
|
2,738,802 |
|
|
|
2,821,832 |
|
|
|
2,752,952 |
|
|
|
2,741,799 |
|
Shareholders' equity |
|
$ |
347,518 |
|
|
$ |
357,735 |
|
|
$ |
368,917 |
|
|
$ |
380,094 |
|
|
$ |
370,328 |
|
Total shares of common stock outstanding |
|
|
21,931,624 |
|
|
|
21,934,554 |
|
|
|
22,195,071 |
|
|
|
22,166,129 |
|
|
|
22,165,760 |
|
Book value per share of common stock |
|
$ |
15.85 |
|
|
$ |
16.31 |
|
|
$ |
16.62 |
|
|
$ |
17.15 |
|
|
$ |
16.71 |
|
Tangible book value per share of common stock* |
|
|
13.73 |
|
|
|
14.17 |
|
|
|
14.49 |
|
|
|
14.99 |
|
|
|
14.53 |
|
Tangible book value per share of common stock less after-tax
unrealized available for sale investment (gains) losses* |
|
|
16.17 |
|
|
|
15.86 |
|
|
|
15.53 |
|
|
|
15.13 |
|
|
|
14.59 |
|
Market value per share of common stock |
|
$ |
18.53 |
|
|
$ |
19.62 |
|
|
$ |
21.08 |
|
|
$ |
21.03 |
|
|
$ |
21.24 |
|
Capital
ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital |
|
|
14.59 |
% |
|
|
14.79 |
% |
|
|
15.60 |
% |
|
|
16.29 |
% |
|
|
16.23 |
% |
Tangible common equity to tangible assets* |
|
|
9.65 |
% |
|
|
10.19 |
% |
|
|
10.23 |
% |
|
|
10.77 |
% |
|
|
10.51 |
% |
Tangible common equity to tangible assets less after-tax unrealized
available for sale investment (gains) losses* |
|
|
11.17 |
% |
|
|
11.27 |
% |
|
|
10.88 |
% |
|
|
10.86 |
% |
|
|
10.55 |
% |
Common equity tier 1 capital |
|
|
12.70 |
% |
|
|
12.87 |
% |
|
|
13.58 |
% |
|
|
14.11 |
% |
|
|
13.95 |
% |
Leverage |
|
|
11.22 |
% |
|
|
11.10 |
% |
|
|
10.99 |
% |
|
|
10.69 |
% |
|
|
10.28 |
% |
_____________________*This metric is a non-GAAP financial measure.
See Non-GAAP disclaimer in this earnings release and below for
discussion and reconciliation to the most directly comparable GAAP
financial measure.This information is preliminary and based on
CapStar data available at the time of this earnings release. |
CAPSTAR
FINANCIAL HOLDINGS, INC. AND SUBSIDIARYSelected
Quarterly Financial Data (unaudited) (dollars in thousands, except
share data)Third quarter 2022 Earnings
Release |
|
|
|
Five Quarter Comparison |
|
|
|
9/30/2022 |
|
|
6/30/2022 |
|
|
3/31/2022 |
|
|
12/31/2021 |
|
|
9/30/2021 |
|
Average Balance Sheet
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
154,543 |
|
|
$ |
189,542 |
|
|
$ |
380,262 |
|
|
$ |
470,963 |
|
|
$ |
411,101 |
|
Investment securities |
|
|
450,933 |
|
|
|
473,167 |
|
|
|
483,339 |
|
|
|
491,135 |
|
|
|
515,877 |
|
Loans held for sale |
|
|
94,811 |
|
|
|
114,223 |
|
|
|
90,163 |
|
|
|
123,962 |
|
|
|
173,402 |
|
Loans held for investment |
|
|
2,241,382 |
|
|
|
2,147,750 |
|
|
|
2,001,740 |
|
|
|
1,888,094 |
|
|
|
1,884,935 |
|
Assets |
|
|
3,146,852 |
|
|
|
3,128,864 |
|
|
|
3,153,320 |
|
|
|
3,159,308 |
|
|
|
3,171,182 |
|
Interest bearing deposits |
|
|
1,993,172 |
|
|
|
1,936,910 |
|
|
|
1,976,803 |
|
|
|
1,964,641 |
|
|
|
1,980,304 |
|
Deposits |
|
|
2,659,275 |
|
|
|
2,664,614 |
|
|
|
2,704,938 |
|
|
|
2,713,314 |
|
|
|
2,732,165 |
|
Federal Home Loan Bank
advances and other borrowings |
|
|
88,584 |
|
|
|
70,516 |
|
|
|
29,547 |
|
|
|
29,514 |
|
|
|
29,495 |
|
Liabilities |
|
|
2,782,712 |
|
|
|
2,767,714 |
|
|
|
2,773,281 |
|
|
|
2,781,951 |
|
|
|
2,803,375 |
|
Shareholders' equity |
|
|
364,140 |
|
|
|
361,150 |
|
|
|
380,039 |
|
|
|
377,357 |
|
|
|
367,807 |
|
Performance
Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized return on average
assets |
|
|
1.03 |
% |
|
|
1.28 |
% |
|
|
1.37 |
% |
|
|
1.57 |
% |
|
|
1.64 |
% |
Annualized return on average
equity |
|
|
8.93 |
% |
|
|
11.08 |
% |
|
|
11.39 |
% |
|
|
13.11 |
% |
|
|
14.13 |
% |
Net interest margin (1) |
|
|
3.50 |
% |
|
|
3.41 |
% |
|
|
2.97 |
% |
|
|
3.14 |
% |
|
|
3.12 |
% |
Annualized noninterest income
to average assets |
|
|
0.41 |
% |
|
|
0.75 |
% |
|
|
1.17 |
% |
|
|
1.40 |
% |
|
|
1.46 |
% |
Efficiency ratio |
|
|
61.53 |
% |
|
|
56.32 |
% |
|
|
58.67 |
% |
|
|
54.74 |
% |
|
|
53.06 |
% |
Loans by Type (at
period end): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
$ |
499,048 |
|
|
$ |
510,987 |
|
|
$ |
499,719 |
|
|
$ |
497,615 |
|
|
$ |
478,279 |
|
Commercial real estate - owner
occupied |
|
|
235,519 |
|
|
|
241,461 |
|
|
|
231,933 |
|
|
|
209,261 |
|
|
|
193,139 |
|
Commercial real estate -
non-owner occupied |
|
|
833,686 |
|
|
|
786,610 |
|
|
|
652,936 |
|
|
|
616,023 |
|
|
|
579,857 |
|
Construction and
development |
|
|
198,869 |
|
|
|
205,573 |
|
|
|
208,513 |
|
|
|
214,310 |
|
|
|
210,516 |
|
Consumer real estate |
|
|
386,628 |
|
|
|
357,849 |
|
|
|
327,416 |
|
|
|
326,412 |
|
|
|
328,262 |
|
Consumer |
|
|
52,715 |
|
|
|
53,227 |
|
|
|
48,790 |
|
|
|
46,811 |
|
|
|
45,669 |
|
Other |
|
|
86,316 |
|
|
|
79,126 |
|
|
|
78,248 |
|
|
|
55,337 |
|
|
|
58,527 |
|
Asset Quality
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses to
total loans |
|
|
0.98 |
% |
|
|
0.97 |
% |
|
|
1.02 |
% |
|
|
1.10 |
% |
|
|
1.19 |
% |
Allowance for loan losses to
non-performing loans |
|
|
974 |
% |
|
|
974 |
% |
|
|
596 |
% |
|
|
666 |
% |
|
|
657 |
% |
Nonaccrual loans |
|
$ |
6,734 |
|
|
$ |
2,225 |
|
|
$ |
3,502 |
|
|
$ |
3,258 |
|
|
$ |
3,431 |
|
Troubled debt
restructurings |
|
|
344 |
|
|
|
86 |
|
|
|
1,847 |
|
|
|
1,832 |
|
|
|
1,859 |
|
Loans - over 90 days past
due |
|
|
6,096 |
|
|
|
494 |
|
|
|
1,076 |
|
|
|
2,120 |
|
|
|
2,333 |
|
Total non-performing
loans |
|
|
6,734 |
|
|
|
2,225 |
|
|
|
3,502 |
|
|
|
3,258 |
|
|
|
3,431 |
|
OREO and repossessed
assets |
|
|
165 |
|
|
|
165 |
|
|
|
178 |
|
|
|
266 |
|
|
|
349 |
|
Total non-performing
assets |
|
|
6,899 |
|
|
|
2,390 |
|
|
|
3,680 |
|
|
|
3,524 |
|
|
|
3,780 |
|
Non-performing loans to total
loans held for investment |
|
|
0.29 |
% |
|
|
0.10 |
% |
|
|
0.17 |
% |
|
|
0.17 |
% |
|
|
0.18 |
% |
Non-performing assets to total
assets |
|
|
0.22 |
% |
|
|
0.08 |
% |
|
|
0.12 |
% |
|
|
0.11 |
% |
|
|
0.12 |
% |
Non-performing assets to total
loans held for investment and OREO |
|
|
0.30 |
% |
|
|
0.11 |
% |
|
|
0.18 |
% |
|
|
0.18 |
% |
|
|
0.20 |
% |
Annualized net charge-offs to
average loans |
|
|
0.02 |
% |
|
|
0.00 |
% |
|
|
0.01 |
% |
|
|
0.04 |
% |
|
|
0.05 |
% |
Net charge-offs |
|
$ |
120 |
|
|
$ |
16 |
|
|
$ |
59 |
|
|
$ |
184 |
|
|
$ |
221 |
|
Interest Rates and
Yields: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
|
4.62 |
% |
|
|
4.25 |
% |
|
|
3.97 |
% |
|
|
4.47 |
% |
|
|
4.41 |
% |
Securities (1) |
|
|
2.29 |
% |
|
|
2.11 |
% |
|
|
1.92 |
% |
|
|
1.84 |
% |
|
|
1.75 |
% |
Total interest-earning assets
(1) |
|
|
4.17 |
% |
|
|
3.69 |
% |
|
|
3.20 |
% |
|
|
3.36 |
% |
|
|
3.35 |
% |
Deposits |
|
|
0.62 |
% |
|
|
0.23 |
% |
|
|
0.19 |
% |
|
|
0.19 |
% |
|
|
0.19 |
% |
Borrowings and repurchase
agreements |
|
|
3.41 |
% |
|
|
2.79 |
% |
|
|
5.40 |
% |
|
|
5.29 |
% |
|
|
5.30 |
% |
Total interest-bearing
liabilities |
|
|
0.93 |
% |
|
|
0.41 |
% |
|
|
0.33 |
% |
|
|
0.33 |
% |
|
|
0.34 |
% |
Other Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full-time equivalent
employees |
|
|
387 |
|
|
|
391 |
|
|
|
397 |
|
|
|
397 |
|
|
|
392 |
|
_____________________This information is preliminary and based on
CapStar data available at the time of this earnings release.(1) Net
Interest Margin, Securities yields, and Total interest-earning
asset yields are calculated on a tax-equivalent basis. |
CAPSTAR FINANCIAL HOLDINGS, INC. AND
SUBSIDIARYAnalysis of Interest Income and Expense,
Rates and Yields (unaudited) (dollars in
thousands)Third quarter 2022 Earnings
Release |
|
|
|
For the Three Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
AverageOutstand-ingBalance |
|
|
InterestIncome/Expense |
|
|
AverageYield/Rate |
|
|
AverageOutstand-ingBalance |
|
|
InterestIncome/Expense |
|
|
AverageYield/Rate |
|
Interest-Earning Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1) |
|
$ |
2,241,382 |
|
|
$ |
26,128 |
|
|
|
4.62 |
% |
|
$ |
1,884,935 |
|
|
$ |
20,942 |
|
|
|
4.41 |
% |
Loans held for sale |
|
|
94,811 |
|
|
|
1,207 |
|
|
|
5.05 |
% |
|
|
173,402 |
|
|
|
1,408 |
|
|
|
3.22 |
% |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable investment securities (2) |
|
|
396,358 |
|
|
|
2,181 |
|
|
|
2.20 |
% |
|
|
455,583 |
|
|
|
1,816 |
|
|
|
1.59 |
% |
Investment securities exempt from federal income tax (3) |
|
|
54,575 |
|
|
|
314 |
|
|
|
2.92 |
% |
|
|
60,294 |
|
|
|
344 |
|
|
|
2.90 |
% |
Total securities |
|
|
450,933 |
|
|
|
2,495 |
|
|
|
2.29 |
% |
|
|
515,877 |
|
|
|
2,160 |
|
|
|
1.75 |
% |
Cash balances in other banks |
|
|
120,624 |
|
|
|
617 |
|
|
|
2.03 |
% |
|
|
337,011 |
|
|
|
171 |
|
|
|
0.20 |
% |
Funds sold |
|
|
755 |
|
|
|
7 |
|
|
|
3.65 |
% |
|
|
19,909 |
|
|
|
9 |
|
|
|
0.18 |
% |
Total interest-earning
assets |
|
|
2,908,505 |
|
|
|
30,454 |
|
|
|
4.17 |
% |
|
|
2,931,134 |
|
|
|
24,690 |
|
|
|
3.35 |
% |
Noninterest-earning assets |
|
|
238,347 |
|
|
|
|
|
|
|
|
|
240,048 |
|
|
|
|
|
|
|
Total assets |
|
$ |
3,146,852 |
|
|
|
|
|
|
|
|
$ |
3,171,182 |
|
|
|
|
|
|
|
Interest-Bearing
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing transaction accounts |
|
$ |
821,545 |
|
|
|
1,205 |
|
|
|
0.58 |
% |
|
$ |
984,874 |
|
|
|
390 |
|
|
|
0.16 |
% |
Savings and money market deposits |
|
|
709,591 |
|
|
|
1,603 |
|
|
|
0.90 |
% |
|
|
589,101 |
|
|
|
288 |
|
|
|
0.19 |
% |
Time deposits |
|
|
462,036 |
|
|
|
1,332 |
|
|
|
1.14 |
% |
|
|
406,329 |
|
|
|
654 |
|
|
|
0.64 |
% |
Total interest-bearing deposits |
|
|
1,993,172 |
|
|
|
4,140 |
|
|
|
0.82 |
% |
|
|
1,980,304 |
|
|
|
1,332 |
|
|
|
0.27 |
% |
Borrowings and repurchase agreements |
|
|
88,584 |
|
|
|
761 |
|
|
|
3.41 |
% |
|
|
29,495 |
|
|
|
394 |
|
|
|
5.30 |
% |
Total interest-bearing
liabilities |
|
|
2,081,756 |
|
|
|
4,901 |
|
|
|
0.93 |
% |
|
|
2,009,799 |
|
|
|
1,726 |
|
|
|
0.34 |
% |
Noninterest-bearing deposits |
|
|
666,104 |
|
|
|
|
|
|
|
|
|
751,862 |
|
|
|
|
|
|
|
Total funding sources |
|
|
2,747,860 |
|
|
|
|
|
|
|
|
|
2,761,661 |
|
|
|
|
|
|
|
Noninterest-bearing liabilities |
|
|
34,852 |
|
|
|
|
|
|
|
|
|
41,714 |
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
364,140 |
|
|
|
|
|
|
|
|
|
367,807 |
|
|
|
|
|
|
|
Total liabilities and
shareholders’ equity |
|
$ |
3,146,852 |
|
|
|
|
|
|
|
|
$ |
3,171,182 |
|
|
|
|
|
|
|
Net interest spread (4) |
|
|
|
|
|
|
|
|
3.23 |
% |
|
|
|
|
|
|
|
|
3.01 |
% |
Net interest income/margin
(5) |
|
|
|
|
$ |
25,553 |
|
|
|
3.50 |
% |
|
|
|
|
$ |
22,964 |
|
|
|
3.12 |
% |
_____________________(1) Average loan balances include nonaccrual
loans. Interest income on loans includes amortization of deferred
loan fees, net of deferred loan costs.(2) Taxable investment
securities include restricted equity securities.(3) Yields on tax
exempt securities, total securities, and total interest-earning
assets are shown on a tax equivalent basis.(4) Net interest spread
is the average yield on total average interest-earning assets minus
the average rate on total average interest-bearing liabilities.(5)
Net interest margin is annualized net interest income calculated on
a tax equivalent basis divided by total average interest-earning
assets for the period.This information is preliminary and based on
CapStar data available at the time of this earnings release. |
CAPSTAR FINANCIAL HOLDINGS, INC. AND
SUBSIDIARYNon-GAAP Financial Measures (unaudited)
(dollars in thousands except share data)Third
quarter 2022 Earnings Release |
|
|
|
Five Quarter Comparison |
|
|
|
9/30/2022 |
|
|
6/30/2022 |
|
|
3/31/2022 |
|
|
12/31/2021 |
|
|
9/30/2021 |
|
Operating net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
8,193 |
|
|
$ |
9,972 |
|
|
$ |
10,673 |
|
|
$ |
12,470 |
|
|
$ |
13,102 |
|
Add: acquisition related expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Less: income tax impact of acquisition related expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Operating net income |
|
$ |
8,193 |
|
|
$ |
9,972 |
|
|
$ |
10,673 |
|
|
$ |
12,470 |
|
|
$ |
13,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating diluted net income
per share of common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating net income |
|
$ |
8,193 |
|
|
$ |
9,972 |
|
|
$ |
10,673 |
|
|
$ |
12,470 |
|
|
$ |
13,102 |
|
Weighted average shares - diluted |
|
|
21,988,085 |
|
|
|
22,074,260 |
|
|
|
22,254,644 |
|
|
|
22,221,989 |
|
|
|
22,218,402 |
|
Operating diluted net income per share of common stock |
|
$ |
0.37 |
|
|
$ |
0.45 |
|
|
$ |
0.48 |
|
|
$ |
0.56 |
|
|
$ |
0.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating annualized return on
average assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating net income |
|
$ |
8,193 |
|
|
$ |
9,972 |
|
|
$ |
10,673 |
|
|
$ |
12,470 |
|
|
$ |
13,102 |
|
Average assets |
|
|
3,146,852 |
|
|
|
3,128,864 |
|
|
|
3,153,320 |
|
|
|
3,159,308 |
|
|
|
3,171,182 |
|
Operating annualized return on average assets |
|
|
1.03 |
% |
|
|
1.28 |
% |
|
|
1.37 |
% |
|
|
1.57 |
% |
|
|
1.64 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating annualized return on
average tangible equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total shareholders' equity |
|
$ |
364,140 |
|
|
$ |
361,150 |
|
|
$ |
380,039 |
|
|
$ |
377,357 |
|
|
$ |
367,807 |
|
Less: average intangible assets |
|
|
(46,737 |
) |
|
|
(47,160 |
) |
|
|
(47,604 |
) |
|
|
(48,054 |
) |
|
|
(48,527 |
) |
Average tangible equity |
|
|
317,403 |
|
|
|
313,990 |
|
|
|
332,435 |
|
|
|
329,303 |
|
|
|
319,280 |
|
Operating net income |
|
$ |
8,193 |
|
|
$ |
9,972 |
|
|
$ |
10,673 |
|
|
$ |
12,470 |
|
|
$ |
13,102 |
|
Operating annualized return on average tangible equity |
|
|
10.24 |
% |
|
|
12.74 |
% |
|
|
13.02 |
% |
|
|
15.02 |
% |
|
|
16.28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating efficiency
ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest expense |
|
$ |
17,735 |
|
|
$ |
17,075 |
|
|
$ |
17,736 |
|
|
$ |
18,682 |
|
|
$ |
18,366 |
|
Less: acquisition related expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total operating noninterest expense |
|
|
17,735 |
|
|
|
17,075 |
|
|
|
17,736 |
|
|
|
18,682 |
|
|
|
18,366 |
|
Net interest income |
|
|
25,553 |
|
|
|
24,440 |
|
|
|
21,140 |
|
|
|
22,992 |
|
|
|
22,964 |
|
Total noninterest income |
|
|
3,272 |
|
|
|
5,876 |
|
|
|
9,089 |
|
|
|
11,134 |
|
|
|
11,651 |
|
Total revenues |
|
$ |
28,825 |
|
|
$ |
30,316 |
|
|
$ |
30,229 |
|
|
$ |
34,126 |
|
|
$ |
34,615 |
|
Operating efficiency ratio: |
|
|
61.53 |
% |
|
|
56.32 |
% |
|
|
58.67 |
% |
|
|
54.74 |
% |
|
|
53.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating annualized pre-tax
pre-provision income to average assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
$ |
10,223 |
|
|
$ |
12,398 |
|
|
$ |
13,277 |
|
|
$ |
16,095 |
|
|
$ |
16,249 |
|
Add: acquisition related expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Add: provision for loan losses |
|
|
867 |
|
|
|
843 |
|
|
|
(784 |
) |
|
|
(651 |
) |
|
|
— |
|
Operating pre-tax pre-provision income |
|
|
11,090 |
|
|
|
13,241 |
|
|
|
12,493 |
|
|
|
15,444 |
|
|
|
16,249 |
|
Average assets |
|
$ |
3,146,852 |
|
|
$ |
3,128,864 |
|
|
$ |
3,153,320 |
|
|
$ |
3,159,308 |
|
|
$ |
3,171,182 |
|
Operating annualized pre-tax pre-provision income to average
assets: |
|
|
1.40 |
% |
|
|
1.70 |
% |
|
|
1.61 |
% |
|
|
1.94 |
% |
|
|
2.03 |
% |
CAPSTAR FINANCIAL HOLDINGS, INC. AND
SUBSIDIARYNon-GAAP Financial Measures (unaudited)
(dollars in thousands except share data)Third
quarter 2022 Earnings Release |
|
|
|
Five Quarter Comparison |
|
|
|
9/30/2022 |
|
|
6/30/2022 |
|
|
3/31/2022 |
|
|
12/31/2021 |
|
|
9/30/2021 |
|
Tangible Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
$ |
347,518 |
|
|
$ |
357,735 |
|
|
$ |
368,917 |
|
|
$ |
380,094 |
|
|
$ |
370,328 |
|
Less: intangible assets |
|
|
(46,468 |
) |
|
|
(46,883 |
) |
|
|
(47,313 |
) |
|
|
(47,759 |
) |
|
|
(48,220 |
) |
Tangible equity |
|
$ |
301,050 |
|
|
$ |
310,852 |
|
|
$ |
321,604 |
|
|
$ |
332,335 |
|
|
$ |
322,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per share
of common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible equity |
|
$ |
301,050 |
|
|
$ |
310,852 |
|
|
$ |
321,604 |
|
|
$ |
332,335 |
|
|
$ |
322,108 |
|
Total shares of stock outstanding |
|
|
21,931,624 |
|
|
|
21,934,554 |
|
|
|
22,195,071 |
|
|
|
22,166,129 |
|
|
|
22,165,760 |
|
Tangible book value per share of common stock |
|
$ |
13.73 |
|
|
$ |
14.17 |
|
|
$ |
14.49 |
|
|
$ |
14.99 |
|
|
$ |
14.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per share
of common stock less after-tax unrealized available for sale
investment (gains) losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
$ |
347,518 |
|
|
$ |
357,735 |
|
|
$ |
368,917 |
|
|
$ |
380,094 |
|
|
$ |
370,328 |
|
Less: intangible assets |
|
|
(46,468 |
) |
|
|
(46,883 |
) |
|
|
(47,313 |
) |
|
|
(47,759 |
) |
|
|
(48,220 |
) |
Add: after-tax unrealized available for sale investment (gains)
losses |
|
|
53,488 |
|
|
|
37,034 |
|
|
|
23,041 |
|
|
|
2,978 |
|
|
|
1,209 |
|
Tangible equity less after-tax unrealized available for sale
investment (gains) losses |
|
$ |
354,538 |
|
|
$ |
347,886 |
|
|
$ |
344,645 |
|
|
$ |
335,313 |
|
|
$ |
323,317 |
|
Total shares of common stock outstanding |
|
|
21,931,624 |
|
|
|
21,934,554 |
|
|
|
22,195,071 |
|
|
|
22,166,129 |
|
|
|
22,165,760 |
|
Tangible book value per share of common stock less after-tax
unrealized available for sale investment (gains) losses |
|
$ |
16.17 |
|
|
$ |
15.86 |
|
|
$ |
15.53 |
|
|
$ |
15.13 |
|
|
$ |
14.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity to
tangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible equity |
|
$ |
301,050 |
|
|
$ |
310,852 |
|
|
$ |
321,604 |
|
|
$ |
332,335 |
|
|
$ |
322,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
$ |
3,166,687 |
|
|
$ |
3,096,537 |
|
|
$ |
3,190,749 |
|
|
$ |
3,133,046 |
|
|
$ |
3,112,127 |
|
Less: intangible assets |
|
|
(46,468 |
) |
|
|
(46,883 |
) |
|
|
(47,313 |
) |
|
|
(47,759 |
) |
|
|
(48,220 |
) |
Tangible assets |
|
$ |
3,120,219 |
|
|
$ |
3,049,654 |
|
|
$ |
3,143,436 |
|
|
$ |
3,085,287 |
|
|
$ |
3,063,907 |
|
Tangible common equity to tangible assets |
|
|
9.65 |
% |
|
|
10.19 |
% |
|
|
10.23 |
% |
|
|
10.77 |
% |
|
|
10.51 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity to
tangible assets less after-tax unrealized available for sale
investment (gains) losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible equity less after-tax unrealized available for sale
investment (gains) losses |
|
$ |
354,538 |
|
|
$ |
347,886 |
|
|
$ |
344,645 |
|
|
$ |
335,313 |
|
|
$ |
323,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets |
|
$ |
3,120,219 |
|
|
$ |
3,049,654 |
|
|
$ |
3,143,436 |
|
|
$ |
3,085,287 |
|
|
$ |
3,063,907 |
|
Add: after-tax unrealized available for sale investment (gains)
losses |
|
|
53,488 |
|
|
|
37,034 |
|
|
|
23,041 |
|
|
|
2,978 |
|
|
|
1,209 |
|
Tangible assets less after-tax unrealized available for sale
investment (gains) losses |
|
$ |
3,173,707 |
|
|
$ |
3,086,688 |
|
|
$ |
3,166,477 |
|
|
$ |
3,088,265 |
|
|
$ |
3,065,116 |
|
Tangible common equity to tangible assets less after-tax unrealized
available for sale investment (gains) losses |
|
|
11.17 |
% |
|
|
11.27 |
% |
|
|
10.88 |
% |
|
|
10.86 |
% |
|
|
10.55 |
% |
CAPSTAR FINANCIAL HOLDINGS, INC. AND
SUBSIDIARYNon-GAAP Financial Measures (unaudited)
(dollars in thousands except share data)Third
quarter 2022 Earnings Release |
|
|
|
Nine Months Ended |
|
|
|
9/30/2022 |
|
|
9/30/2021 |
|
Operating net income: |
|
|
|
|
|
|
Net income |
|
$ |
28,839 |
|
|
$ |
36,207 |
|
Add: acquisition related expenses |
|
|
— |
|
|
|
323 |
|
Less: income tax impact of acquisition related expenses |
|
|
— |
|
|
|
(84 |
) |
Operating net income |
|
$ |
28,839 |
|
|
$ |
36,446 |
|
|
|
|
|
|
|
|
Operating diluted net income
per share of common stock: |
|
|
|
|
|
|
Operating net income |
|
$ |
28,839 |
|
|
$ |
36,446 |
|
Weighted average shares - diluted |
|
|
22,104,687 |
|
|
|
22,165,130 |
|
Operating diluted net income per share of common stock |
|
$ |
1.30 |
|
|
$ |
1.64 |
|
|
|
|
|
|
|
|
Operating annualized return on
average assets: |
|
|
|
|
|
|
Operating net income |
|
$ |
28,839 |
|
|
$ |
36,446 |
|
Average assets |
|
$ |
3,142,988 |
|
|
$ |
3,109,897 |
|
Operating annualized return on average assets |
|
|
1.23 |
% |
|
|
1.57 |
% |
|
|
|
|
|
|
|
Operating annualized return on
average tangible equity: |
|
|
|
|
|
|
Average total shareholders' equity |
|
$ |
368,385 |
|
|
$ |
359,176 |
|
Less: average intangible assets |
|
|
(47,164 |
) |
|
|
(49,014 |
) |
Average tangible equity |
|
|
321,221 |
|
|
|
310,162 |
|
Operating net income |
|
$ |
28,839 |
|
|
$ |
36,446 |
|
Operating annualized return on average tangible equity |
|
|
12.00 |
% |
|
|
15.71 |
% |
|
|
|
|
|
|
|
Operating efficiency
ratio: |
|
|
|
|
|
|
Total noninterest expense |
|
$ |
52,545 |
|
|
$ |
54,859 |
|
Less: acquisition related expenses |
|
|
— |
|
|
|
(323 |
) |
Total operating noninterest expense |
|
|
52,545 |
|
|
|
54,536 |
|
Net interest income |
|
|
71,133 |
|
|
|
68,178 |
|
Total noninterest income |
|
|
18,237 |
|
|
|
31,548 |
|
Total revenues |
|
$ |
89,370 |
|
|
$ |
99,726 |
|
Operating efficiency ratio: |
|
|
58.79 |
% |
|
|
54.69 |
% |
CAPSTAR
FINANCIAL HOLDINGS, INC. AND SUBSIDIARYNon-GAAP
Financial Measures (unaudited) (dollars in thousands except share
data)Third quarter 2022 Earnings
Release |
|
|
|
9/30/2022 |
|
|
6/30/2022 |
|
Average loans held for investment |
|
$ |
2,241,382 |
|
|
$ |
2,147,750 |
|
Less: Average PPP Loans |
|
|
(834 |
) |
|
|
(3,337 |
) |
Less: Average Tri-Net transfers from held for sale to held for
investment |
|
|
(106,590 |
) |
|
|
(58,757 |
) |
Loans held for investment excluding PPP loans and Tri-Net
transfers |
|
|
2,133,958 |
|
|
|
2,085,656 |
|
|
|
|
|
|
|
|
Annualized loans held for investment growth excluding PPP and
Tri-Net transfers |
|
|
9.2 |
% |
|
|
|
|
|
9/30/2022 |
|
Net interest income |
|
$ |
25,553 |
|
|
|
|
|
Noninterest income |
|
|
3,272 |
|
Less: Tri-Net losses |
|
|
2,059 |
|
Noninterest income excluding Tri-Net losses |
|
|
5,331 |
|
|
|
|
|
Total income excluding Tri-Net losses |
|
|
30,884 |
|
|
|
|
|
Noninterest expense |
|
|
17,735 |
|
Less: Operational losses |
|
|
(2,197 |
) |
Less: Executive incentive reversal |
|
|
770 |
|
Noninterest expense excluding operational losses and incentive
reversal |
|
|
16,308 |
|
|
|
|
|
Efficiency ratio excluding Tri-Net losses, operational losses, and
executive incentive reversal |
|
|
52.81 |
% |
|
|
Five Quarter Comparison |
|
|
|
9/30/2022 |
|
|
6/30/2022 |
|
|
3/31/2022 |
|
|
12/31/2021 |
|
|
9/30/2021 |
|
Allowance for loan losses |
|
$ |
22,431 |
|
|
$ |
21,684 |
|
|
$ |
20,857 |
|
|
$ |
21,698 |
|
|
$ |
22,533 |
|
Purchase accounting marks |
|
|
2,535 |
|
|
|
2,717 |
|
|
|
2,838 |
|
|
|
3,003 |
|
|
|
3,288 |
|
Allowance for loan losses and purchase accounting fair value
marks |
|
|
24,966 |
|
|
|
24,401 |
|
|
|
23,695 |
|
|
|
24,701 |
|
|
|
25,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for investment |
|
|
2,292,781 |
|
|
|
2,234,833 |
|
|
|
2,047,555 |
|
|
|
1,965,769 |
|
|
|
1,894,249 |
|
Less: PPP Loans net of deferred fees |
|
|
748 |
|
|
|
921 |
|
|
|
6,529 |
|
|
|
26,539 |
|
|
|
64,188 |
|
Non-PPP Loans |
|
|
2,292,033 |
|
|
|
2,233,912 |
|
|
|
2,041,026 |
|
|
|
1,939,230 |
|
|
|
1,830,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses plus fair value marks / Non-PPP
Loans |
|
|
1.09 |
% |
|
|
1.09 |
% |
|
|
1.16 |
% |
|
|
1.27 |
% |
|
|
1.41 |
% |
_____________________(1) Net interest margin and adjusted net
interest margin are shown on a tax equivalent basis. |
|
|
CONTACT
Michael J. FowlerChief Financial
Officer(615) 732-7404
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