Truxton Corporation Reports First Quarter 2023 Results
NASHVILLE, Tenn., April 20, 2023 (GLOBE NEWSWIRE) — Truxton Corporation, the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended March 31, 2023. First quarter net income attributable to common shareholders was $4.3 million or $1.47 per diluted share compared to $4.2 million or $1.45 per diluted share for the same quarter in 2022. Net income and fully diluted earnings per share for the quarter rose by 2% and 1%, respectively, compared to the first quarter of 2022.
“Truxton performed well in the first quarter of 2023 despite continued financial market turbulence,” said Chairman and CEO Tom Stumb. “In light of recent banking industry turmoil, it is important to highlight that our conservative asset liability management has always been a key pillar of strength for our business. Volatility in stock and bond markets also continues to be a headwind. Wealth Management Services revenue was down only $10 thousand for the quarter compared to first quarter 2022 while many market indices were down more than 10% over the same period. Net interest margin for the quarter held steady year-over-year despite a dramatic shift in the interest rate environment during the same period. The market environment remains challenging, but we continue to seek to serve our shareholders well by striving to serve our clients well.”
Key Highlights
- Non-interest income, excluding gains and losses on the sale of securities, grew to $4.5 million in the first quarter, an increase of 2% from the fourth quarter of 2022 and 2% higher in comparison to the first quarter of 2022. Wealth management services constituted 94% of non-interest income, excluding those same gains and losses, in the first quarter of 2023 compared to 95% in the fourth quarter of 2022 and 96% in the first quarter of 2022.
- Loans rose by 1% to $626 million at quarter end compared to $619 million on December 31, 2022 and were up 24% compared to $505 million on March 31, 2022.
- Total deposits decreased by 4% from $808 million at December 31, 2022, to $771 million at March 31, 2023, and were less than 1% lower in comparison to $778 million at March 31, 2022. 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. As a result, occupancy expenditures and fixed asset investments are a fraction of typical peers.
- Net interest margin for the first quarter of 2023 was 2.75%, a decrease of 8 basis points from the 2.83% experienced in the quarter ended December 31, 2022, and the same as in the quarter ended March 31, 2022. Cost of funds was 2.27% in the first quarter of 2023, up from 1.73% for the quarter ended December 31, 2022, and up from 0.42% for the quarter ended March 31, 2022.
- Asset quality remains sound at Truxton. Truxton had $0 in non-performing assets on March 31, 2023. Truxton had $12 thousand of net charge-offs in the first quarter of 2023, $2 thousand in recoveries in the trailing quarter, and $0 in the first quarter of 2022.
- Truxton adopted the mandated Current Expected Credit Loss accounting methodology for calculating its allowance for credit losses effective January 1, 2023. Allowance for credit losses, excluding $507 thousand for unfunded commitments, was $6.0 million at quarter end March 31, 2023, compared to Allowance for loans losses of $5.8 million at December 31, 2022, and $4.9 million at March 31, 2022. For the same three periods, the Bank’s allowance was 0.95%, 0.93%, and 0.97%, respectively, of gross loans outstanding at period end.
- The Bank’s capital position remains strong. Its Tier 1 leverage ratio was 10.29% at March 31, 2023, compared to 9.78% at December 31, 2022, and 9.48% at March 31, 2022. Book value per common share was $25.71, $25.39, and $25.77 at March 31, 2023, December 31, 2022, and March 31, 2022, respectively. During the three months ended March 31, 2023, Truxton Corporation paid dividends of $1.38 per common share, inclusive of a $1.00 special cash dividend paid on March 25, 2023.
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 |
| Austin Branstetter | Swan Burrus |
| 615-250-0783 | 615-250-0773 |
| austin.branstetter@truxtontrust.com | swan.burrus@truxtontrust.com |
| Truxton Corporation | |||||||||
| Consolidated Balance Sheets | |||||||||
| (000’s) | |||||||||
| (Unaudited) | |||||||||
| March 31, 2023* | December 31, 2022* | March 31, 2022* | |||||||
| ASSETS | |||||||||
| Cash and due from financial institutions | $ | 8,955 | $ | 5,405 | $ | 8,837 | |||
| Interest bearing deposits in other financial institutions | 4,322 | 1,094 | 42,375 | ||||||
| Federal funds sold | 10 | – | 2,985 | ||||||
| Cash and cash equivalents | 13,288 | 6,499 | 54,197 | ||||||
| Time deposits in other financial institutions | 1,260 | 3,833 | 2,284 | ||||||
| Securities available for sale | 253,372 | 257,257 | 293,588 | ||||||
| Gross loans, excluding Paycheck Protection Program | 625,626 | 618,847 | 504,235 | ||||||
| Allowance for credit losses** | (5,961 | ) | (5,761 | ) | (4,881 | ) | |||
| Paycheck Protection Program Loans | 90 | 101 | 409 | ||||||
| Net loans | 619,754 | 613,187 | 499,763 | ||||||
| Bank owned life insurance | 10,644 | 10,592 | 10,439 | ||||||
| Restricted equity securities | 5,391 | 3,227 | 3,250 | ||||||
| Premises and equipment, net | 222 | 209 | 267 | ||||||
| Accrued interest receivable | 9,752 | 3,512 | 2,479 | ||||||
| Deferred tax asset, net | 6,842 | 7,161 | 3,107 | ||||||
| Other assets | 1,369 | 11,803 | 5,790 | ||||||
| Total assets | $ | 921,894 | $ | 917,280 | $ | 875,164 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
| Deposits | |||||||||
| Non-interest bearing | $ | 151,956 | $ | 153,870 | $ | 180,743 | |||
| Interest bearing | 619,542 | 653,880 | 597,310 | ||||||
| Total deposits | 771,499 | 807,750 | 778,053 | ||||||
| Federal funds purchased | 2,417 | 4,933 | – | ||||||
| Swap counterparty cash collateral | 2,860 | 4,090 | – | ||||||
| Federal Home Loan Bank advances | 9,500 | 4,500 | 4,500 | ||||||
| Federal Reserve Bank Term Funding Program advances | 40,000 | – | – | ||||||
| Subordinated debt | 14,752 | 14,727 | 14,653 | ||||||
| Other liabilities | 6,078 | 7,904 | 2,789 | ||||||
| Total liabilities | 847,106 | 843,904 | 799,995 | ||||||
| SHAREHOLDERS’ EQUITY | |||||||||
| Common stock, $0.10 par value | $ | 289 | $ | 289 | $ | 287 | |||
| Additional paid-in capital | 31,336 | 31,107 | 32,113 | ||||||
| Retained earnings | 59,281 | 59,492 | 49,946 | ||||||
| Accumulated other comprehensive income (loss) | (16,118 | ) | (17,512 | ) | (7,177 | ) | |||
| Total shareholders’ equity | 74,788 | 73,376 | 75,169 | ||||||
| Total liabilities and shareholders’ equity | $ | 921,894 | $ | 917,280 | $ | 875,164 | |||
| *The information is preliminary, unaudited and based on company data available at the time of presentation. **Prior quarter data shows Allowance for loan losses. Truxton adopted the Current Expected Credit Loss methodology as of January 1, 2023. The total excludes reserve for credit losses on unfunded commitments of $507, recorded in Other liabilities, as of March 31, 2023. | |||||||||
| Truxton Corporation | |||||||||||
| Consolidated Statements of Net Income | |||||||||||
| (000’s) | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| March 31, 2023* | December 31, 2022* | March 31, 2022* | |||||||||
| Non-interest income | |||||||||||
| Wealth management services | $ | 4,171 | $ | 4,126 | $ | 4,182 | |||||
| Service charges on deposit accounts | 136 | 111 | 99 | ||||||||
| Securities gains (losses), net | 58 | (588 | ) | (18 | ) | ||||||
| Bank owned life insurance income | 52 | 51 | 50 | ||||||||
| Other | 91 | 63 | 48 | ||||||||
| Total non-interest income | 4,508 | 3,763 | 4,361 | ||||||||
| Interest income | |||||||||||
| Loans, including fees | $ | 8,487 | $ | 8,017 | $ | 4,838 | |||||
| Taxable securities | 1,954 | 1,620 | 1,114 | ||||||||
| Tax-exempt securities | 233 | 373 | 396 | ||||||||
| Interest bearing deposits | 61 | 303 | 31 | ||||||||
| Federal funds sold | 11 | 26 | 1 | ||||||||
| Other interest income | 65 | 59 | 16 | ||||||||
| Total interest income | 10,812 | 10,398 | 6,396 | ||||||||
| Interest expense | |||||||||||
| Deposits | 4,216 | 3,485 | 586 | ||||||||
| Short-term borrowings | 58 | 42 | 194 | ||||||||
| Long-term borrowings | 237 | 72 | 23 | ||||||||
| Subordinated debentures | 194 | 194 | 1 | ||||||||
| Total interest expense | 4,705 | 3,793 | 804 | ||||||||
| Net interest income | 6,107 | 6,605 | 5,592 | ||||||||
| Provision for credit losses | 59 | 9 | 105 | ||||||||
| Net interest income after provision for loan losses | 6,048 | 6,596 | 5,487 | ||||||||
| Total revenue, net | 10,556 | 0 | 10,359 | 9,848 | |||||||
| Non interest expense | |||||||||||
| Salaries and employee benefits | 3,766 | 3,823 | 3,511 | ||||||||
| Occupancy | 286 | 278 | 252 | ||||||||
| Furniture and equipment | 25 | 25 | 32 | ||||||||
| Data processing | 427 | 400 | 366 | ||||||||
| Wealth management processing fees | 176 | 179 | 165 | ||||||||
| Advertising and public relations | 46 | 78 | 32 | ||||||||
| Professional services | 116 | 177 | 166 | ||||||||
| FDIC insurance assessments | 75 | 55 | 57 | ||||||||
| Other | 397 | 196 | 242 | ||||||||
| Total non interest expense | 5,314 | 5,211 | 4,823 | ||||||||
| Income before income taxes | 5,242 | 5,148 | 5,025 | ||||||||
| Income tax expense | 951 | 1,098 | 798 | ||||||||
| Net income | $ | 4,291 | $ | 4,050 | $ | 4,227 | |||||
| Earnings per share: | |||||||||||
| Basic | $ | 1.48 | $ | 1.40 | $ | 1.46 | |||||
| Diluted | $ | 1.47 | $ | 1.40 | $ | 1.45 | |||||
| *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) | |||
| March 31, 2023* | December 31, 2022* | March 31, 2022* | |
| Per Common Share Data | |||
| Net income attributable to shareholders, per share | |||
| Basic | $1.48 | $1.40 | $1.46 |
| Diluted | $1.47 | $1.40 | $1.45 |
| Book value per common share | $25.71 | $25.39 | $25.77 |
| Tangible book value per common share | $25.71 | $25.39 | $25.77 |
| Basic weighted average common shares | 2,820,892 | 2,810,702 | 2,793,014 |
| Diluted weighted average common shares | 2,830,504 | 2,822,538 | 2,807,866 |
| Common shares outstanding at period end | 2,908,483 | 2,887,362 | 2,917,044 |
| Selected Balance Sheet Data | |||
| Tangible common equity (TCE) ratio | 8.11% | 8.00% | 8.59% |
| Average Loans | $622,012 | $616,609 | $498,755 |
| Average earning assets (1) | $912,603 | $939,763 | $840,952 |
| Average total assets | $918,440 | $943,900 | $866,432 |
| Average stockholders’ equity | $75,557 | $70,128 | $83,009 |
| 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) | $12 | ($2) | $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** | 0.95% | 0.93% | 0.97% |
| Net charge offs to average loans | 0.00% | 0.00% | 0.00% |
| Capital Ratios (Bank Subsidiary Only) | |||
| Tier 1 leverage | 10.29% | 9.78% | 9.48% |
| Common equity tier 1 | 13.79% | 13.36% | 14.00% |
| Total risk-based capital | 14.74% | 14.20% | 14.83% |
| Selected Performance Ratios | |||
| Efficiency ratio | 51.32% | 48.55% | 48.46% |
| Return on average assets (ROA) | 1.89% | 1.70% | 1.98% |
| Return on average stockholders’ equity (ROE) | 23.05% | 22.92% | 20.64% |
| Return on average tangible common equity (ROTCE) | 23.05% | 22.92% | 20.64% |
| Net interest margin | 2.75% | 2.83% | 2.75% |
| *The information is preliminary, unaudited and based on company data available at the time of presentation. | |||
| **Prior quarter data shows Allowance for loan losses. Truxton adopted the Current Expected Credit Loss methodology as of January 1, 2023. March 31, 2023 ratio does not include $507 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 | ||||||||||||||||||
| March 31, 2023* | December 31, 2022* | March 31, 2022* | ||||||||||||||||||
| Average Balances | Rates/ Yields (%) | Interest Income/ Expense | Average Balances | Rates/ Yields (%) | Interest Income/ Expense | Average Balances | Rates/ Yields (%) | Interest Income/ Expense | ||||||||||||
| Earning Assets | ||||||||||||||||||||
| Loans | $622,012 | 5.46 | $8,376 | $616,609 | 5.01 | $7,905 | $498,755 | 3.73 | $4,586 | |||||||||||
| Loan fees | $0 | 0.07 | $111 | $0 | 0.07 | $112 | $0 | 0.20 | $252 | |||||||||||
| Loans with fees | $622,012 | 5.53 | $8,487 | $616,609 | 5.16 | $8,017 | $498,755 | 3.93 | $4,837 | |||||||||||
| Mortgage loans held for sale | $0 | 0.00 | $0 | $0 | 0.00 | $0 | $61 | 3.72 | $1 | |||||||||||
| Federal funds sold | $866 | 5.15 | $11 | $2,688 | 3.76 | $26 | $1,735 | 0.17 | $1 | |||||||||||
| Deposits with banks | $11,749 | 4.38 | $127 | $31,462 | 3.82 | $303 | $34,026 | 0.37 | $31 | |||||||||||
| Investment securities – taxable | $237,601 | 3.29 | $1,954 | $228,108 | 2.84 | $1,620 | $239,635 | 1.86 | $1,114 | |||||||||||
| Investment securities – tax-exempt | $40,376 | 3.45 | $233 | $60,897 | 3.31 | $372 | $66,739 | 3.21 | $396 | |||||||||||
| Total Earning Assets | $912,603 | 4.84 | $10,812 | $939,764 | 4.43 | $10,338 | $840,952 | 3.13 | $6,380 | |||||||||||
| Non interest earning assets | ||||||||||||||||||||
| Allowance for loan losses | (6,279 | ) | (5,783 | ) | (4,776 | ) | ||||||||||||||
| Cash and due from banks | $6,547 | $6,871 | $8,046 | |||||||||||||||||
| Premises and equipment | $202 | $224 | $256 | |||||||||||||||||
| Accrued interest receivable | $2,843 | $2,935 | $2,065 | |||||||||||||||||
| Other real estate | $0 | $0 | $0 | |||||||||||||||||
| Other assets | $28,601 | $30,251 | $20,519 | |||||||||||||||||
| Unrealized gain (loss) on inv. securities | (26,077 | ) | (30,362 | ) | (630 | ) | ||||||||||||||
| Total Assets | $918,440 | $943,900 | $866,432 | |||||||||||||||||
| Interest bearing liabilities | ||||||||||||||||||||
| Interest bearing demand | $366,260 | 2.80 | $2,529 | $380,638 | 2.23 | $2,140 | $37,019 | 0.32 | $29 | |||||||||||
| Savings and money market | $127,422 | 1.70 | $533 | $142,369 | 1.44 | $515 | $68,248 | 0.33 | $523 | |||||||||||
| Time deposits – retail | $18,256 | 1.93 | $87 | $24,280 | 1.41 | $86 | $10,734 | 0.48 | $13 | |||||||||||
| Time deposits – wholesale | $133,704 | 3.24 | $1,067 | $128,619 | 2.29 | $744 | $39,793 | 0.22 | $21 | |||||||||||
| Total interest bearing deposits | $645,642 | 2.65 | $4,216 | $675,906 | 2.05 | $3,485 | $725,793 | 0.33 | $586 | |||||||||||
| Federal Home Loan Bank advances | $16,844 | 4.09 | $172 | $9,957 | 2.85 | $72 | $6,278 | 1.48 | $23 | |||||||||||
| Subordinated debt | $15,001 | 5.17 | $194 | $14,827 | 5.12 | $194 | $14,863 | 5.22 | $194 | |||||||||||
| Other borrowings | $11,451 | 4.29 | $123 | $4,760 | 4.33 | $42 | $882 | 1.23 | $1 | |||||||||||
| Total borrowed funds | $43,296 | 4.52 | $489 | $29,544 | 4.08 | $308 | $22,023 | 3.96 | $218 | |||||||||||
| Total interest bearing liabilities | $688,938 | 2.77 | $4,705 | $705,450 | 2.13 | $3,793 | $747,817 | 0.43 | $804 | |||||||||||
| Net interest rate spread | 2.08 | $6,107 | 2.30 | $6,545 | 2.70 | $5,576 | ||||||||||||||
| Non-interest bearing deposits | $150,259 | $163,653 | $31,724 | |||||||||||||||||
| Other liabilities | $3,686 | $4,671 | $3,882 | |||||||||||||||||
| Stockholder’s equity | $75,557 | $70,128 | $83,009 | |||||||||||||||||
| Total Liabilities and Stockholder’s Equity | $918,440 | $943,902 | $866,432 | |||||||||||||||||
| Cost of funds | 2.27 | 1.73 | 0.42 | |||||||||||||||||
| Net interest margin | 2.75 | 2.83 | 2.75 | |||||||||||||||||
| *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. | ||||||||||||||||||||
