CapStar Reports First Quarter 2022 Results and Increase in Quarterly Dividend
Four Key Drivers | Targets | 1Q22 | 4Q21 | 1Q21 | ||||
Annualized revenue growth | > 5% | -46.31% | -5.61% | -22.41% | ||||
Net interest margin | ≥ 3.60% | 2.97% | 3.14% | 3.13% | ||||
Efficiency ratio | ≤ 55% | 58.67% | 54.74% | 54.08% | ||||
Annualized net charge-offs to average loans | ≤ 0.25% | 0.01% | 0.04% | 0.00% |
"CapStar’s first quarter results demonstrate continued progress and momentum in strengthening non-mortgage related profitability and growth in addition to executing a disciplined capital allocation strategy,” said
"As we transition from the potential credit-related risks of the recent pandemic to current supply chain, inflation, and interest rate risks, we are optimistic about the continued strength of our local economy and markets.
Revenue
Total revenue, defined as net interest income plus noninterest income, totaled
First quarter 2022 average earning assets remained relatively flat at
For the first quarter of 2022, the net interest margin decreased 17 basis points from the prior quarter to 2.97 percent primarily resulting from the aforementioned deferred expense adjustment. Excluding the deferred expense adjustment, influence of PPP and excess liquidity accumulated during the pandemic, the Company estimates its first quarter 2022 net interest margin was 3.32 percent, an 8 basis point decrease compared to the fourth quarter of 2021. While the Company is managing to a more neutral interest rate risk profile over time in order to enhance earnings consistency, net interest income is expected to benefit modestly from rising rates in 2022.
The Company's average deposits totaled
Noninterest income during the quarter decreased
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 expenses decreased
For the quarter ended
Asset Quality
Strong asset quality is a core tenant of the Company’s culture. Continued sound risk management and an improving economy led to continued low net charge-offs and strong credit metrics. Annualized net charge offs to average loans for the three months ended
In addition to providing reserves for the strong loan growth experienced during the first quarter, the allowance for loan losses declined
Asset Quality Data: | ||||||||||||||||||||
Annualized net charge-offs to average loans | 0.01 | % | 0.04 | % | 0.05 | % | 0.01 | % | 0.00 | % | ||||||||||
Criticized and classified loans to total loans | 2.49 | % | 2.64 | % | 2.85 | % | 3.95 | % | 4.39 | % | ||||||||||
Loans- past due to total end of period loans | 0.17 | % | 0.25 | % | 0.31 | % | 0.49 | % | 0.44 | % | ||||||||||
Loans- over 89 days past due to total end of period loans | 0.05 | % | 0.11 | % | 0.12 | % | 0.13 | % | 0.14 | % | ||||||||||
Non-performing assets to total loans held for investment and OREO | 0.18 | % | 0.18 | % | 0.20 | % | 0.22 | % | 0.30 | % | ||||||||||
Allowance for loan losses plus fair value marks / Non-PPP Loans | 1.16 | % | 1.27 | % | 1.41 | % | 1.47 | % | 1.59 | % | ||||||||||
Allowance for loan losses to non-performing loans | 596 | % | 666 | % | 657 | % | 571 | % | 446 | % |
Income Tax Expense
The Company’s first quarter effective income tax rate decreased to approximately 19.6 percent compared to 22.5 percent for the prior quarter ended
Capital
The Company continues to be well capitalized with tangible equity of
Capital ratios: | ||||||||||||||||||||
Total risk-based capital | 15.60 | % | 16.29 | % | 16.23 | % | 16.13 | % | 16.29 | % | ||||||||||
Common equity tier 1 capital | 13.58 | % | 14.11 | % | 13.95 | % | 13.78 | % | 13.79 | % | ||||||||||
Leverage | 10.99 | % | 10.69 | % | 10.28 | % | 10.17 | % | 9.78 | % |
In the first quarter of 2022, the Company repurchased
Dividend
On
Conference Call and Webcast Information
CapStar will host a conference call and webcast at
About CapStar Financial Holdings, Inc. (CSTR)
CapStar Financial Holdings, Inc. (CSTR) is a bank holding company headquartered in
NON-GAAP MEASURES
This release includes financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations. Such measures 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,” and “Tangible common equity to tangible assets.”
Management has included 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. (CSTR) AND SUBSIDIARY
Consolidated Statements of Income (unaudited) (dollars in thousands, except share data)
First quarter 2022 Earnings Release
Three Months Ended | ||||||||
2022 | 2021 | |||||||
Interest income: | ||||||||
Loans, including fees | $ | 20,367 | $ | 22,014 | ||||
Securities: | ||||||||
Taxable | 1,754 | 1,596 | ||||||
Tax-exempt | 325 | 373 | ||||||
Federal funds sold | 10 | — | ||||||
Restricted equity securities | 156 | 161 | ||||||
Interest-bearing deposits in financial institutions | 172 | 134 | ||||||
Total interest income | 22,784 | 24,278 | ||||||
Interest expense: | ||||||||
Interest-bearing deposits | 436 | 446 | ||||||
Savings and money market accounts | 331 | 313 | ||||||
Time deposits | 484 | 931 | ||||||
Federal Home Loan Bank advances | — | 12 | ||||||
Subordinated notes | 393 | 394 | ||||||
Total interest expense | 1,644 | 2,096 | ||||||
Net interest income | 21,140 | 22,182 | ||||||
Provision for loan losses | (784 | ) | 650 | |||||
Net interest income after provision for loan losses | 21,924 | 21,532 | ||||||
Noninterest income: | ||||||||
Deposit service charges | 1,142 | 1,102 | ||||||
Interchange and debit card transaction fees | 1,222 | 1,092 | ||||||
Mortgage banking | 1,966 | 4,716 | ||||||
Tri-Net | 2,171 | 1,143 | ||||||
Wealth management | 440 | 459 | ||||||
SBA lending | 222 | 492 | ||||||
Net gain on sale of securities | — | 26 | ||||||
Other noninterest income | 1,926 | 984 | ||||||
Total noninterest income | 9,089 | 10,014 | ||||||
Noninterest expense: | ||||||||
Salaries and employee benefits | 10,269 | 9,427 | ||||||
Data processing and software | 2,647 | 2,827 | ||||||
Occupancy | 1,099 | 1,108 | ||||||
Equipment | 709 | 899 | ||||||
Professional services | 679 | 704 | ||||||
Regulatory fees | 280 | 257 | ||||||
Acquisition related expenses | — | 67 | ||||||
Amortization of intangibles | 446 | 508 | ||||||
Other operating | 1,607 | 1,616 | ||||||
Total noninterest expense | 17,736 | 17,413 | ||||||
Income before income taxes | 13,277 | 14,133 | ||||||
Income tax expense | 2,604 | 3,103 | ||||||
Net income | $ | 10,673 | $ | 11,030 | ||||
Per share information: | ||||||||
Basic net income per share of common stock | $ | 0.48 | $ | 0.50 | ||||
Diluted net income per share of common stock | $ | 0.48 | $ | 0.50 | ||||
Weighted average shares outstanding: | ||||||||
Basic | 22,198,339 | 22,045,501 | ||||||
Diluted | 22,254,644 | 22,076,600 |
This information is preliminary and based on CapStar data available at the time of this earnings release.
CAPSTAR FINANCIAL HOLDINGS, INC. (CSTR) AND SUBSIDIARY
Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)
First quarter 2022 Earnings Release
Five Quarter Comparison | ||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||
Net interest income | $ | 21,140 | $ | 22,992 | $ | 22,964 | $ | 23,032 | $ | 22,182 | ||||||||||
Provision for loan losses | (784 | ) | (651 | ) | — | (1,065 | ) | 650 | ||||||||||||
Net interest income after provision for loan losses | 21,924 | 23,643 | 22,964 | 24,097 | 21,532 | |||||||||||||||
Deposit service charges | 1,142 | 1,117 | 1,187 | 1,109 | 1,102 | |||||||||||||||
Interchange and debit card transaction fees | 1,222 | 1,261 | 1,236 | 1,227 | 1,092 | |||||||||||||||
Mortgage banking | 1,966 | 2,740 | 4,693 | 3,910 | 4,716 | |||||||||||||||
Tri-Net | 2,171 | 3,996 | 1,939 | 1,536 | 1,143 | |||||||||||||||
Wealth management | 440 | 438 | 481 | 471 | 459 | |||||||||||||||
SBA lending | 222 | 279 | 911 | 377 | 492 | |||||||||||||||
Net gain (loss) on sale of securities | — | 8 | 7 | (13 | ) | 26 | ||||||||||||||
Other noninterest income | 1,926 | 1,295 | 1,197 | 1,266 | 984 | |||||||||||||||
Total noninterest income | 9,089 | 11,134 | 11,651 | 9,883 | 10,014 | |||||||||||||||
Salaries and employee benefits | 10,269 | 10,549 | 10,980 | 10,803 | 9,427 | |||||||||||||||
Data processing and software | 2,647 | 2,719 | 2,632 | 3,070 | 2,827 | |||||||||||||||
Occupancy | 1,099 | 1,012 | 1,028 | 1,057 | 1,108 | |||||||||||||||
Equipment | 709 | 867 | 760 | 980 | 899 | |||||||||||||||
Professional services | 679 | 521 | 469 | 460 | 704 | |||||||||||||||
Regulatory fees | 280 | 284 | 279 | 211 | 257 | |||||||||||||||
Acquisition related expenses | — | — | — | 256 | 67 | |||||||||||||||
Amortization of intangibles | 446 | 461 | 477 | 493 | 508 | |||||||||||||||
Other noninterest expense | 1,607 | 2,269 | 1,741 | 1,750 | 1,616 | |||||||||||||||
Total noninterest expense | 17,736 | 18,682 | 18,366 | 19,080 | 17,413 | |||||||||||||||
Net income before income tax expense | 13,277 | 16,095 | 16,249 | 14,900 | 14,133 | |||||||||||||||
Income tax expense | 2,604 | 3,625 | 3,147 | 2,824 | 3,103 | |||||||||||||||
Net income | $ | 10,673 | $ | 12,470 | $ | 13,102 | $ | 12,076 | $ | 11,030 | ||||||||||
Weighted average shares - basic | 22,198,339 | 22,166,410 | 22,164,278 | 22,133,759 | 22,045,501 | |||||||||||||||
Weighted average shares - diluted | 22,254,644 | 22,221,989 | 22,218,402 | 22,198,829 | 22,076,600 | |||||||||||||||
Net income per share, basic | $ | 0.48 | $ | 0.56 | $ | 0.59 | $ | 0.55 | $ | 0.50 | ||||||||||
Net income per share, diluted | 0.48 | 0.56 | 0.59 | 0.54 | 0.50 | |||||||||||||||
Balance Sheet Data (at period end): | ||||||||||||||||||||
Cash and cash equivalents | $ | 355,981 | $ | 415,125 | $ | 359,267 | $ | 449,267 | $ | 390,565 | ||||||||||
Securities available-for-sale | 460,558 | 459,396 | 483,778 | 500,339 | 474,788 | |||||||||||||||
Securities held-to-maturity | 1,775 | 1,782 | 1,788 | 2,395 | 2,401 | |||||||||||||||
Loans held for sale | 106,895 | 83,715 | 176,488 | 158,234 | 171,660 | |||||||||||||||
Loans held for investment | 2,047,555 | 1,965,769 | 1,894,249 | 1,897,838 | 1,931,687 | |||||||||||||||
Allowance for loan losses | (20,857 | ) | (21,698 | ) | (22,533 | ) | (22,754 | ) | (23,877 | ) | ||||||||||
Total assets | 3,190,749 | 3,133,046 | 3,112,127 | 3,212,390 | 3,150,457 | |||||||||||||||
Non-interest-bearing deposits | 702,172 | 725,171 | 718,299 | 782,170 | 711,606 | |||||||||||||||
Interest-bearing deposits | 2,053,823 | 1,959,110 | 1,956,093 | 1,998,024 | 2,039,595 | |||||||||||||||
Federal Home Loan Bank advances and other borrowings | 29,566 | 29,532 | 29,499 | 29,487 | 29,455 | |||||||||||||||
Total liabilities | 2,821,832 | 2,752,952 | 2,741,799 | 2,852,639 | 2,806,513 | |||||||||||||||
Shareholders' equity | $ | 368,917 | $ | 380,094 | $ | 370,328 | $ | 359,752 | $ | 343,944 | ||||||||||
Total shares of common stock outstanding | 22,195,071 | 22,166,129 | 22,165,760 | 22,165,547 | 22,089,873 | |||||||||||||||
Book value per share of common stock | $ | 16.62 | $ | 17.15 | $ | 16.71 | $ | 16.23 | $ | 15.57 | ||||||||||
Tangible book value per share of common stock* | 14.49 | 14.99 | 14.53 | 14.03 | 13.34 | |||||||||||||||
Market value per share of common stock | $ | 21.08 | $ | 21.03 | $ | 21.24 | $ | 20.50 | $ | 17.25 | ||||||||||
Capital ratios: | ||||||||||||||||||||
Total risk-based capital | 15.60 | % | 16.29 | % | 16.23 | % | 16.13 | % | 16.29 | % | ||||||||||
Tier 1 risk-based capital | 13.58 | % | 14.11 | % | 13.95 | % | 13.78 | % | 13.79 | % | ||||||||||
Common equity tier 1 capital | 13.58 | % | 14.11 | % | 13.95 | % | 13.78 | % | 13.79 | % | ||||||||||
Leverage | 10.99 | % | 10.69 | % | 10.28 | % | 10.17 | % | 9.78 | % |
_____________________
*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. (CSTR) AND SUBSIDIARY
Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)
First quarter 2022 Earnings Release
Five Quarter Comparison | ||||||||||||||||||||
Average Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | $ | 380,262 | $ | 470,963 | $ | 411,101 | $ | 301,773 | $ | 341,092 | ||||||||||
Investment securities | 483,339 | 491,135 | 515,877 | 508,595 | 496,035 | |||||||||||||||
Loans held for sale | 90,163 | 123,962 | 173,402 | 147,912 | 164,867 | |||||||||||||||
Loans held for investment | 2,001,740 | 1,888,094 | 1,884,935 | 1,938,818 | 1,929,343 | |||||||||||||||
Assets | 3,153,320 | 3,159,308 | 3,171,182 | 3,078,748 | 3,078,745 | |||||||||||||||
Interest bearing deposits | 1,976,803 | 1,964,641 | 1,980,304 | 1,940,442 | 1,986,621 | |||||||||||||||
Deposits | 2,704,938 | 2,713,314 | 2,732,165 | 2,662,192 | 2,663,551 | |||||||||||||||
Federal Home Loan Bank advances and other borrowings | 29,547 | 29,514 | 29,495 | 29,467 | 33,879 | |||||||||||||||
Liabilities | 2,773,281 | 2,781,951 | 2,803,375 | 2,719,898 | 2,728,064 | |||||||||||||||
Shareholders' equity | 380,039 | 377,357 | 367,807 | 358,850 | 350,681 | |||||||||||||||
Performance Ratios: | ||||||||||||||||||||
Annualized return on average assets | 1.37 | % | 1.57 | % | 1.64 | % | 1.57 | % | 1.45 | % | ||||||||||
Annualized return on average equity | 11.39 | % | 13.11 | % | 14.13 | % | 13.50 | % | 12.76 | % | ||||||||||
Net interest margin (1) | 2.97 | % | 3.14 | % | 3.12 | % | 3.26 | % | 3.13 | % | ||||||||||
Annualized noninterest income to average assets | 1.17 | % | 1.40 | % | 1.46 | % | 1.29 | % | 1.32 | % | ||||||||||
Efficiency ratio | 58.67 | % | 54.74 | % | 53.06 | % | 57.97 | % | 54.08 | % | ||||||||||
Loans by Type (at period end): | ||||||||||||||||||||
Commercial and industrial | $ | 499,719 | $ | 497,615 | $ | 478,279 | $ | 536,279 | $ | 609,896 | ||||||||||
Commercial real estate - owner occupied | 231,933 | 209,261 | 193,139 | 200,725 | 197,758 | |||||||||||||||
Commercial real estate - non-owner occupied | 652,936 | 616,023 | 579,857 | 538,520 | 505,252 | |||||||||||||||
Construction and development | 208,513 | 214,310 | 210,516 | 198,448 | 170,965 | |||||||||||||||
Consumer real estate | 327,416 | 326,412 | 328,262 | 331,580 | 336,496 | |||||||||||||||
Consumer | 48,790 | 46,811 | 45,669 | 45,898 | 45,481 | |||||||||||||||
Other | 78,248 | 55,337 | 58,527 | 46,387 | 65,839 | |||||||||||||||
Asset Quality Data: | ||||||||||||||||||||
Allowance for loan losses to total loans | 1.02 | % | 1.10 | % | 1.19 | % | 1.20 | % | 1.24 | % | ||||||||||
Allowance for loan losses to non-performing loans | 596 | % | 666 | % | 657 | % | 571 | % | 446 | % | ||||||||||
Nonaccrual loans | $ | 3,502 | $ | 3,258 | $ | 3,431 | $ | 3,985 | $ | 5,355 | ||||||||||
Troubled debt restructurings | 1,847 | 1,832 | 1,859 | 1,895 | 1,914 | |||||||||||||||
Loans - over 89 days past due | 1,076 | 2,120 | 2,333 | 2,389 | 2,720 | |||||||||||||||
Total non-performing loans | 3,502 | 3,258 | 3,431 | 3,985 | 5,355 | |||||||||||||||
OREO and repossessed assets | 178 | 266 | 349 | 184 | 523 | |||||||||||||||
Total non-performing assets | 3,680 | 3,524 | 3,780 | 4,169 | 5,878 | |||||||||||||||
Non-performing loans to total loans held for investment | 0.17 | % | 0.17 | % | 0.18 | % | 0.21 | % | 0.28 | % | ||||||||||
Non-performing assets to total assets | 0.12 | % | 0.11 | % | 0.12 | % | 0.13 | % | 0.19 | % | ||||||||||
Non-performing assets to total loans held for investment and OREO | 0.18 | % | 0.18 | % | 0.20 | % | 0.22 | % | 0.30 | % | ||||||||||
Annualized net charge-offs to average loans | 0.01 | % | 0.04 | % | 0.05 | % | 0.01 | % | 0.00 | % | ||||||||||
Net charge-offs | $ | 59 | $ | 184 | $ | 221 | $ | 59 | $ | 18 | ||||||||||
Interest Rates and Yields: | ||||||||||||||||||||
Loans | 3.97 | % | 4.47 | % | 4.41 | % | 4.43 | % | 4.36 | % | ||||||||||
Securities (1) | 1.92 | % | 1.84 | % | 1.75 | % | 1.77 | % | 1.80 | % | ||||||||||
Total interest-earning assets (1) | 3.20 | % | 3.36 | % | 3.35 | % | 3.51 | % | 3.42 | % | ||||||||||
Deposits | 0.19 | % | 0.19 | % | 0.19 | % | 0.21 | % | 0.26 | % | ||||||||||
Borrowings and repurchase agreements | 5.40 | % | 5.29 | % | 5.30 | % | 5.36 | % | 4.85 | % | ||||||||||
Total interest-bearing liabilities | 0.33 | % | 0.33 | % | 0.34 | % | 0.37 | % | 0.42 | % | ||||||||||
Other Information: | ||||||||||||||||||||
Full-time equivalent employees | 397 | 397 | 392 | 383 | 379 |
_____________________
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. (CSTR) AND SUBSIDIARY
Analysis of Interest Income and Expense, Rates and Yields (unaudited) (dollars in thousands)
First quarter 2022 Earnings Release
For the Three Months Ended | ||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||
Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate | Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate | |||||||||||||||||||
Interest-Earning Assets | ||||||||||||||||||||||||
Loans (1) | $ | 2,001,740 | $ | 19,599 | 3.97 | % | $ | 1,929,342 | $ | 20,723 | 4.47 | % | ||||||||||||
Loans held for sale | 90,163 | 768 | 3.46 | % | 164,867 | 1,291 | 3.56 | % | ||||||||||||||||
Securities: | ||||||||||||||||||||||||
Taxable investment securities (2) | 426,144 | 1,909 | 1.79 | % | 431,406 | 1,757 | 1.63 | % | ||||||||||||||||
Investment securities exempt from federal income tax (3) | 57,195 | 326 | 2.89 | % | 64,629 | 373 | 2.92 | % | ||||||||||||||||
Total securities | 483,339 | 2,235 | 1.92 | % | 496,035 | 2,130 | 1.80 | % | ||||||||||||||||
Cash balances in other banks | 305,922 | 172 | 0.23 | % | 298,722 | 134 | 0.18 | % | ||||||||||||||||
Funds sold | 20,149 | 10 | 0.19 | % | 153 | — | 1.27 | % | ||||||||||||||||
Total interest-earning assets | 2,901,313 | 22,784 | 3.20 | % | 2,889,119 | 24,278 | 3.42 | % | ||||||||||||||||
Noninterest-earning assets | 252,007 | 189,626 | ||||||||||||||||||||||
Total assets | $ | 3,153,320 | $ | 3,078,745 | ||||||||||||||||||||
Interest-Bearing Liabilities | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 949,313 | 436 | 0.19 | % | $ | 944,651 | 446 | 0.19 | % | ||||||||||||||
Savings and money market deposits | 660,721 | 331 | 0.20 | % | 583,590 | 313 | 0.22 | % | ||||||||||||||||
Time deposits | 366,769 | 484 | 0.54 | % | 458,380 | 931 | 0.82 | % | ||||||||||||||||
Total interest-bearing deposits | 1,976,803 | 1,251 | 0.26 | % | 1,986,621 | 1,690 | 0.35 | % | ||||||||||||||||
Borrowings and repurchase agreements | 29,547 | 393 | 5.40 | % | 33,879 | 406 | 4.85 | % | ||||||||||||||||
Total interest-bearing liabilities | 2,006,350 | 1,644 | 0.33 | % | 2,020,500 | 2,096 | 0.42 | % | ||||||||||||||||
Noninterest-bearing deposits | 728,134 | 676,929 | ||||||||||||||||||||||
Total funding sources | 2,734,484 | 2,697,429 | ||||||||||||||||||||||
Noninterest-bearing liabilities | 38,797 | 30,635 | ||||||||||||||||||||||
Shareholders’ equity | 380,039 | 350,681 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 3,153,320 | $ | 3,078,745 | ||||||||||||||||||||
Net interest spread (4) | 2.86 | % | 3.00 | % | ||||||||||||||||||||
Net interest income/margin (5) | $ | 21,140 | 2.97 | % | $ | 22,182 | 3.13 | % |
_____________________
(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. (CSTR) AND SUBSIDIARY
Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)
First quarter 2022 Earnings Release
Five Quarter Comparison | ||||||||||||||||||||
Operating net income: | ||||||||||||||||||||
Net income | $ | 10,673 | $ | 12,470 | $ | 13,102 | $ | 12,076 | $ | 11,030 | ||||||||||
Add: acquisition related expenses | — | — | — | 256 | 67 | |||||||||||||||
Less: income tax impact of acquisition related expenses | — | — | — | (67 | ) | (18 | ) | |||||||||||||
Operating net income | $ | 10,673 | $ | 12,470 | $ | 13,102 | $ | 12,265 | $ | 11,079 | ||||||||||
Operating diluted net income per share of common stock: | ||||||||||||||||||||
Operating net income | $ | 10,673 | $ | 12,470 | $ | 13,102 | $ | 12,265 | $ | 11,079 | ||||||||||
Weighted average shares - diluted | 22,254,644 | 22,221,989 | 22,218,402 | 22,198,829 | 22,076,600 | |||||||||||||||
Operating diluted net income per share of common stock | $ | 0.48 | $ | 0.56 | $ | 0.59 | $ | 0.55 | $ | 0.50 | ||||||||||
Operating annualized return on average assets: | ||||||||||||||||||||
Operating net income | $ | 10,673 | $ | 12,470 | $ | 13,102 | $ | 12,265 | $ | 11,079 | ||||||||||
Average assets | 3,153,320 | 3,159,308 | 3,171,182 | 3,078,748 | 3,078,745 | |||||||||||||||
Operating annualized return on average assets | 1.37 | % | 1.57 | % | 1.64 | % | 1.60 | % | 1.46 | % | ||||||||||
Operating annualized return on average tangible equity: | ||||||||||||||||||||
Average total shareholders' equity | $ | 380,039 | $ | 377,357 | $ | 367,807 | $ | 358,850 | $ | 350,681 | ||||||||||
Less: average intangible assets | (47,604 | ) | (48,054 | ) | (48,527 | ) | (49,012 | ) | (49,514 | ) | ||||||||||
Average tangible equity | 332,435 | 329,303 | 319,280 | 309,838 | 301,167 | |||||||||||||||
Operating net income | $ | 10,673 | $ | 12,470 | $ | 13,102 | $ | 12,265 | $ | 11,079 | ||||||||||
Operating annualized return on average tangible equity | 13.02 | % | 15.02 | % | 16.28 | % | 15.88 | % | 14.92 | % | ||||||||||
Operating efficiency ratio: | ||||||||||||||||||||
Total noninterest expense | $ | 17,736 | $ | 18,682 | $ | 18,366 | $ | 19,080 | $ | 17,413 | ||||||||||
Less: acquisition related expenses | — | — | — | (256 | ) | (67 | ) | |||||||||||||
Total operating noninterest expense | 17,736 | 18,682 | 18,366 | 18,824 | 17,346 | |||||||||||||||
Net interest income | 21,140 | 22,992 | 22,964 | 23,032 | 22,182 | |||||||||||||||
Total noninterest income | 9,089 | 11,134 | 11,651 | 9,883 | 10,014 | |||||||||||||||
Total revenues | $ | 30,229 | $ | 34,126 | $ | 34,615 | $ | 32,915 | $ | 32,196 | ||||||||||
Operating efficiency ratio: | 58.67 | % | 54.74 | % | 53.06 | % | 57.19 | % | 53.88 | % | ||||||||||
Operating annualized pre-tax pre-provision income to average assets: | ||||||||||||||||||||
Income before income taxes | $ | 13,277 | $ | 16,095 | $ | 16,249 | $ | 14,900 | $ | 14,133 | ||||||||||
Add: acquisition related expenses | — | — | — | 256 | 67 | |||||||||||||||
Add: provision for loan losses | (784 | ) | (651 | ) | — | (1,065 | ) | 650 | ||||||||||||
Operating pre-tax pre-provision income | 12,493 | 15,444 | 16,249 | 14,091 | 14,850 | |||||||||||||||
Average assets | $ | 3,153,320 | $ | 3,159,308 | $ | 3,171,182 | $ | 3,078,748 | $ | 3,078,745 | ||||||||||
Operating annualized pre-tax pre-provision income to average assets: | 1.61 | % | 1.94 | % | 2.03 | % | 1.84 | % | 1.96 | % | ||||||||||
Tangible Equity: | ||||||||||||||||||||
Total shareholders' equity | $ | 368,917 | $ | 380,094 | $ | 370,328 | $ | 359,752 | $ | 343,944 | ||||||||||
Less: intangible assets | (47,313 | ) | (47,759 | ) | (48,220 | ) | (48,697 | ) | (49,190 | ) | ||||||||||
Tangible equity | $ | 321,604 | $ | 332,335 | $ | 322,108 | $ | 311,055 | $ | 294,754 | ||||||||||
Tangible Book Value per Share of Common Stock: | ||||||||||||||||||||
Tangible common equity | $ | 321,604 | $ | 332,335 | $ | 322,108 | $ | 311,055 | $ | 294,754 | ||||||||||
Total shares of common stock outstanding | 22,195,071 | 22,166,129 | 22,165,760 | 22,165,547 | 22,089,873 | |||||||||||||||
Tangible book value per share of common stock | $ | 14.49 | $ | 14.99 | $ | 14.53 | $ | 14.03 | $ | 13.34 |
CAPSTAR FINANCIAL HOLDINGS, INC. (CSTR) AND SUBSIDIARY
Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)
First quarter 2022 Earnings Release
Five Quarter Comparison | ||||||||||||||||||||
Net interest income | $ | 21,140 | $ | 22,992 | $ | 22,964 | $ | 23,032 | $ | 22,182 | ||||||||||
Less: PPP loan income | (493 | ) | (1,691 | ) | (1,897 | ) | (2,686 | ) | (2,260 | ) | ||||||||||
Less: Excess liquidity interest income | (437 | ) | (479 | ) | (545 | ) | (545 | ) | (504 | ) | ||||||||||
Plus: Impact of deferred cost adjustment | 545 | — | — | — | — | |||||||||||||||
Adjusted net interest income | 20,755 | 20,822 | 20,522 | 19,801 | 19,418 | |||||||||||||||
Average interest earning assets | 2,901,313 | 2,920,478 | 2,931,134 | 2,848,857 | 2,889,119 | |||||||||||||||
Less: Average PPP loans | (14,144 | ) | (42,055 | ) | (95,257 | ) | (173,733 | ) | (204,459 | ) | ||||||||||
Less: Excess liquidity | (348,535 | ) | (447,548 | ) | (411,926 | ) | (301,325 | ) | (334,109 | ) | ||||||||||
Adjusted interest earning assets | 2,538,634 | 2,430,875 | 2,423,951 | 2,373,799 | 2,350,551 | |||||||||||||||
Net interest margin (1) | 2.97 | % | 3.14 | % | 3.12 | % | 3.26 | % | 3.13 | % | ||||||||||
Adjusted Net interest margin (1) | 3.32 | % | 3.40 | % | 3.36 | % | 3.36 | % | 3.35 | % |
Five Quarter Comparison | ||||||||||||||||||||
Allowance for loan losses | $ | 20,857 | $ | 21,698 | $ | 22,533 | $ | 22,754 | $ | 23,877 | ||||||||||
Purchase accounting marks | 2,838 | 3,003 | 3,288 | 3,533 | 3,615 | |||||||||||||||
Allowance for loan losses and purchase accounting fair value marks | 23,695 | 24,701 | 25,821 | 26,287 | 27,492 | |||||||||||||||
Loans held for investment | 2,047,555 | 1,965,769 | 1,894,249 | 1,897,838 | 1,931,687 | |||||||||||||||
Less: PPP Loans net of deferred fees | 6,529 | 26,539 | 64,188 | 109,940 | 210,810 | |||||||||||||||
Non-PPP Loans | 2,041,026 | 1,939,230 | 1,830,061 | 1,787,898 | 1,720,877 | |||||||||||||||
Allowance for loan losses plus fair value marks / Non-PPP Loans | 1.16 | % | 1.27 | % | 1.41 | % | 1.47 | % | 1.59 | % |
_____________________
(1) Net interest margin and adjusted net interest margin are shown on a tax equivalent basis.
CONTACT
Chief Financial Officer
(615) 732-7404
Image: https://ml.globenewswire.com/media/NzlhYzY0MWItZDA2ZC00OWY3LTliMGQtZTQzNTZiMzQ2ZGMyLTEwOTI1MTY=/tiny/CapStar-Financial-Holdings-Inc.png
Image: Primary Logo
Source: CapStar Financial Holdings, Inc. (CSTR)