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Truxton Corp
Truxton Corporation Reports Fourth Quarter 2021 Results
Business
Jan 27 2022
3 min read

Truxton Corporation Reports Fourth Quarter 2021 Results

NASHVILLE, Tenn., Jan. 27, 2022 (GLOBE NEWSWIRE) -- Truxton Corporation, the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended December 31, 2021. Fourth quarter net income attributable to common shareholders was $4.0 million or $1.39 earnings per diluted share compared to $3.5 million or $1.23 earnings per diluted share for the same quarter in 2020. Net income rose by 14% for the quarter compared to the fourth quarter of 2020 while fully diluted earnings per share rose by 13%.

For the year ended December 31, 2021, net income increased by 30% to $14.5 million from $11.1 million in 2020. For the year ended December 31, 2021, earnings per diluted share rose to $5.02 from $3.90, an increase of 29% from 2020.

“Truxton’s fourth quarter 2021 performance was outstanding and capped off another year of strong financial results,” said Chairman and CEO Tom Stumb. “Wealth management revenue increased 31% compared to the fourth quarter of 2020 and increased 32% for the year compared to 2020. Loans at year end were up 18% compared to December 31, 2020, and up 25%, excluding amounts under the Paycheck Protection Program (PPP). Our strong performance for this quarter and the full year was driven by our continued focus on deepening our existing relationships and our success in serving new families and their businesses.”  

Key Highlights

  • Non-interest income grew to $4.2 million in the fourth quarter of 2021, an increase of 3.6% from the third quarter of 2021 and 29% in comparison to the fourth quarter of 2020. Wealth management services constituted 96% of non-interest income in the fourth quarter of 2021.
  • Loans rose 2% to $495 million compared to $487 million on September 30, 2021 and were up 18% compared to December 31, 2020. Excluding PPP loans, loans rose by 2% compared to September 30, 2021, and 25% compared to December 31, 2020.
  • PPP fee recognition driven largely by loan forgiveness added $95 thousand in pretax income for the fourth quarter of 2021. Only $506 thousand in PPP loans remained outstanding with $28 thousand in unrecognized fees at the end of the fourth quarter of 2021. PPP fee recognition added $1.0 million in pretax income for the year but should not contribute meaningfully in the future.
  • Total deposits increased 10% from September 30, 2021, to $807 million at December 31, 2021, and increased 29% in comparison to December 31, 2020. Truxton continues to fund its growth from a single banking location through 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 fourth quarter of 2021 was 2.48%, a decrease of 21 basis points from the 2.69% experienced in the third quarter of 2021, and a decrease of 47 basis points from the fourth quarter of 2020. Cost of funds was 0.47% in the fourth quarter of 2021, up from 0.44% for the quarter ended September 30, 2021, and the same as in the quarter ended December 31, 2020.    
  • Asset quality remains sound at Truxton. Truxton had no non-performing assets at December 31, 2021.   Truxton had $2 thousand of charge-offs in the fourth quarter of 2021, $2 thousand in the trailing quarter, and $0 in the fourth quarter of 2020.   All of these charge-offs are from small loans acquired from a housing not-for-profit.
  • Allowance for loan losses was $4.8 million, $4.8 million, and $4.5 million at quarter end December 31, 2021, September 30, 2021, and December 31, 2020, respectively. For the same three periods, the Bank’s allowance was 0.97%, 0.98%, and 1.07%, respectively, of gross loans (including PPP loans) outstanding at period end.
  • Tax expense decreased by 34% from the September 30, 2021 quarter due to over accrual of tax expense in the first three quarters of 2021, but increased by 36% from the December 31, 2020 period due to an even greater effect of over-accrual in the first nine months of 2020. Truxton believes that the effective tax rate of approximately 17% of pretax net income will persist under current state and federal law. Truxton has several sources of lightly taxed income including yield on bank-owned life insurance, the earnings of the bank’s captive insurance company, and the interest income from the bank’s tax-exempt bond portfolio that cause its effective rate to be below the combined statutory rates.
  • The Bank’s capital position remains strong. Its Tier 1 leverage ratio was 8.95% at December 31, 2021, 8.99% at September 30, 2021, and 9.38% at December 31, 2020. Book value per common share was $29.19, $28.14, and $26.77 at December 31, 2021, September 30, 2021, and December 31, 2020, respectively. During the twelve months ended December 31, 2021, Truxton Corporation paid dividends of $2.20 per common share. In 2021, Truxton Corporation repurchased 15,164 shares of its common stock for $812 thousand total, an average price of $53.56 per share.

About Truxton Trust
Truxton Trust Company is a provider of private banking, wealth management, trust, 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 
Andrew May 
615-515-1707 
andrew.may@truxtontrust.com		Media Relations
Tamara Schoeplein
615-515-1714
tamara.schoeplein@truxtontrust.com


Truxton Corporation
Consolidated Balance Sheets
(000's)
(Unaudited)
    
 December 31,
2021*		September 30,
2021*		December 31,
2020
ASSETS   
Cash and due from financial institutions$9,321 $10,560 $9,492 
Interest bearing deposits in other financial institutions 88,743  56,257  84,435 
Federal funds sold 1,425  2,929  169 
Cash and cash equivalents 99,489  69,746  94,096 
    
Time deposits in other financial institutions 2,780  2,782  2,931 
Securities available for sale 302,502  269,685  206,318 
    
Gross loans, excluding Paycheck Protection Program 494,293  484,614  395,106 
Allowance for loan losses (4,775) (4,779) (4,490)
Paycheck Protection Program Loans 506  2,652  24,522 
Net loans 490,024  482,487  415,138 
    
Bank owned life insurance 10,389  10,338  10,185 
Restricted equity securities 3,242  3,235  3,214 
Premises and equipment, net 316  371  507 
Accrued interest receivable 2,346  2,331  2,653 
Deferred tax asset, net 62  -  - 
Other assets 6,109  6,455  6,576 
    
Total assets$917,259 $847,430 $741,618 
    
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
Deposits   
Non-interest bearing$215,696 $161,614 $170,251 
Interest bearing 591,779  571,298  453,774 
Total deposits 807,475  732,912  624,025 
    
Federal Home Loan Bank advances 4,500  11,680  17,673 
Subordinated debt 14,628  14,604  14,529 
Deferred tax liability, net -  154  479 
Other liabilities 6,605  7,039  8,254 
Total liabilities 833,208  766,389  664,960 
    
SHAREHOLDERS' EQUITY   
Additional paid-in capital 32,078  31,799  31,651 
Retained earnings 49,628  46,456  41,433 
Accumulated other comprehensive income 2,345  2,786  3,574 
    
Total shareholders' equity 84,051  81,041  76,658 
    
Total liabilities and shareholders' equity$917,259 $847,430 $741,618 
    
*The information is preliminary, unaudited and based on company data available at the time of presentation.
    


Truxton Corporation
Consolidated Statements of Net Income
(000's)
(Unaudited)
          
 Three Months Ended Year To Date
 December 31,
2021*		 September 30,
2021*		 December 31,
2020*		 December 31,
2021*		 December 31,
2020
Non-interest income         
Wealth management services$4,072 $3,874 $3,101 $15,102 $11,469
Service charges on deposit accounts 95  97  59  334  256
Securities gains (losses), net 0  0  0  0  0
Bank owned life insurance income 51  51  53  204  212
Other 28  76  65  269  262
Total non-interest income 4,246  4,098  3,278  15,909  12,199
          
Interest income         
Loans, including fees$4,762 $5,026 $4,616 $18,325 $17,201
Taxable securities 928  724  646  3,031  2,137
Tax-exempt securities 399  391  347  1,565  1,088
Interest bearing deposits 54  75  79  236  332
Federal funds sold 1  1  1  2  19
 Other interest income 40  16  35  124  94
Total interest income 6,184  6,233  5,724  23,283  20,871
          
Interest expense         
Deposits 617  590  451  2,247  1,941
Subordinated debentures 194  194  194  780  194
Long-term borrowings 101  61  115  310  468
Total interest expense 912  845  760  3,337  2,603
          
Net interest income 5,272  5,388  4,964  19,946  18,268
          
Provision for loan losses 0  199  228  291  1,093
          
Net interest income after provision for loan losses 5,272  5,189  4,736  19,655  17,175
          
Total revenue, net 9,518  9,287  8,014  35,564  29,374
          
Non interest expense         
Salaries and employee benefits 3,595  3,316  2,872  13,247  11,380
Occupancy 253  247  219  967  868
Furniture and equipment 33  33  46  154  153
Data processing 281  339  319  1,291  1,169
Wealth management processing fees 133  168  163  644  520
Advertising and public relations 116  25  66  215  163
Professional services 171  164  112  645  626
FDIC insurance assessments 73  57  52  214  150
Other 203  124  168  777  887
Total non interest expense 4,858  4,473  4,017  18,154  15,916
          
Income before income taxes 4,660  4,814  3,997  17,410  13,458
          
Income tax expense 623  940  457  2,869  2,309
          
Net income$4,037 $3,874 $3,540 $14,541 $11,149
          
Earnings per share:         
Basic$1.40 $1.35 $1.24 $5.05 $3.94
Diluted$1.39 $1.34 $1.23 $5.02 $3.90
 
*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)
    
 December 31, 2021*September 30, 2021*December 31, 2020
    
Per Common Share Data   
Net income attributable to shareholders, per share   
Basic$1.40 $1.35 $1.24 
Diluted$1.39 $1.34 $1.23 
Book value per common share$29.19 $28.14 $26.77 
Tangible book value per common share$29.19 $28.14 $26.77 
Basic weighted average common shares2,807,863 2,809,307 2,771,400 
Diluted weighted average common shares2,822,942 2,822,177 2,797,592 
Common shares outstanding at period end2,879,284 2,879,527 2,863,671 
    
    
Selected Balance Sheet Data   
Tangible common equity (TEC) ratio9.16% 9.56% 10.34% 
Average Loans$477,005 $470,746 $420,106 
Average earning assets (1)$853,925 $813,434 $683,594 
Average total assets$884,235 $848,148 $719,206 
Average stockholders' equity$82,430 $81,071 $73,764 
    
    
Selected Asset Quality Measures   
Nonaccrual loans$0 $0 $2,017 
90+ days past due still accruing$21 $6 $11 
Total nonperforming loans$21 $6 $2,028 
Total nonperforming assets$21 $6 $2,028 
Net charge offs$5 $2 $12 
Nonperforming loans to assets0.00% 0.00% 0.27% 
Nonperforming assets to total assets0.00% 0.00% 0.27% 
Nonperforming assets to total loans and other real estate0.00% 0.00% 0.48% 
Allowance for loan losses to total loans0.97% 0.98% 1.07% 
Net charge offs to average loans0.00% 0.00% 0.00% 
    
    
Capital Ratios (Bank Subsidiary Only)   
Tier 1 leverage8.95% 8.99% 9.38% 
Common equity tier 113.82% 13.35% 14.10% 
Total risk-based capital14.66% 14.20% 15.05% 
    
Selected Performance Ratios    
Efficiency ratio51.39% 47.87% 46.95% 
Return on average assets (ROA)1.81% 1.81% 1.96% 
Return on average stockholders' equity (ROE)19.42% 18.96% 19.09% 
Return on tangible common equity (ROTCE)19.42% 18.96% 19.09% 
Net interest margin2.48% 2.69% 2.95% 
    
*The information is preliminary, unaudited and based on company data available at the time of presentation. 
    
(1) Average earning assets is the daily average of earning assets. Earning assets consists of loans, mortgage loans held for sale, federal funds sold, deposits with banks, investment securities and restricted equity securities.


Truxton Corporation
Yield Tables
For The Periods Indicated
(000's)
(Unaudited)
 
The following table sets forth the amount of our average balances, interest income or interest expense for each category of interest earning assets and interest bearing liabilities and the average interest rate for interest earning assets and interest bearing liabilities, net interest spread and net interest margin for the periods indicated below:
 
  Three Months Ended Three Months Ended  Three Months Ended 
 December 31, 2021* September 30, 2021*   December 31, 2020  
 Average
Balances		Rates/
Yields (%)		Interest
Income/
Expense		 Average
Balances		Rates/
Yields (%)		Interest
Income/
Expense		 Average
Balances		Rates/
Yields (%)		Interest
Income/
Expense
            
Earning Assets           
   Loans$477,005 3.75$4,513 $470,746 3.87$4,586 $420,106 3.75 $3,891 
   Loan fees$0 0.21$249 $0 0.37$440 $0 0.63 $240 
      Loans with fees$477,005 3.96$4,762 $470,746 4.24$5,026 $420,106 4.38 $4,131 
   Mortgage loans held for sale$0 0.00$0 $20 2.70$0 $78 3.33 $0 
   Federal funds sold$2,902 0.09$1 $3,085 0.01$1 $2,581 0.14 $2 
   Deposits with banks$86,039 0.25$54 $96,256 0.31$75 $77,539 0.41 $90 
   Investment securities - taxable$219,861 1.69$928 $177,782 1.63$724 $127,864 2.02 $471 
   Investment securities - tax-exempt$68,118 3.17$399 $65,545 3.23$391 $55,425 3.39 $299 
      Total Earning Assets$853,925 2.93$6,144 $813,434 3.10$6,217 $683,593 3.39 $4,993 
Non interest earning assets           
   Allowance for loan losses (4,778)    (4,604)    (4,359)  
   Cash and due from banks$9,528    $11,045    $11,611   
   Premises and equipment$302    $352    $500   
   Accrued interest receivable$2,078    $1,966    $2,573   
   Other real estate$0    $0    $0   
   Other assets$19,973    $19,792    $20,416   
   Unrealized gain (loss) on inv. securities 3,207     6,163     4,871   
      Total Assets$884,235    $848,148    $719,205   
Interest bearing liabilities           
   Interest bearing demand$36,480 0.06$6 $36,078 0.18$16 $30,668 (0.08)($3)
   Savings and money market$665,881 0.35$583 $634,565 0.34$546 $487,041 0.34 $351 
   Time deposits - retail$10,917 0.48$13 $10,882 0.50$14 $8,538 1.13 $30 
   Time deposits - wholesale$16,466 0.37$15 $13,080 0.44$14 $22,451 0.31 $11 
      Total interest bearing deposits$729,744 0.34$617 $694,605 0.34$590 $548,698 0.33 $389 
   Federal Home Loan Bank advances$10,683 5.27$101 $11,853 2.01$61 $17,738 1.92 $93 
   Subordinated debt$14,757 5.15$194 $14,864 5.11$194 $14,629 5.19 $0 
   Other borrowings$825 0.00$0 $878 0.00$0 $31,730 1.10 $41 
      Total borrowed funds$26,265 5.05$295 $27,595 3.61$255 $64,097 1.88 $134 
      Total interest bearing liabilities$756,009 0.50$912 $722,200 0.46$845 $612,795 0.49 $523 
Net interest rate spread 2.43$5,232  2.64$5,372  2.90 $4,470 
   Non-interest bearing deposits$39,884    $38,742    $24,645   
   Other liabilities$5,912    $6,135    $7,787   
   Stockholder's equity$82,430    $81,071    $73,764   
      Total Liabilities and Stockholder's Equity$884,235    $848,148    $718,991   
Cost of funds 0.47   0.44   0.47  
Net interest margin 2.48   2.69   2.95  
            
*The information is preliminary, unaudited and based on company data available at the time of presentation.      
            
Yield Table Assumptions - Average loan balances are inclusive of nonperforming loans. Yields computed on tax-exempt instruments are on a tax equivalent basis. Net interest spread is calculated as the yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. Net interest margin is the result of net interest income calculated on a tax-equivalent basis divided by average interest earning assets for the period. Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate while rate change is change in rate times the previous volume. Changes not due solely to volume or rate changes are allocated to volume change and rate change in proportion to the relationship of the absolute dollar amounts of the change in each category.


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: 
          
 Twelve Months Ended  Twelve Months Ended 
 December 31, 2021*    December 31, 2020*   
 Average
Balances		Rates/
Yields (%)		Interest
Income/
Expense		  Average
Balances		Rates/
Yields (%)		Interest
Income/
Expense		 
          
Earning Assets         
   Loans$455,847 3.73$17,009  $405,363 3.97$16,099 
   Loan fees$0 0.29$1,314  $0 0.28$1,132 
      Loans with fees$455,847 4.02$18,323  $405,363 4.25$17,231 
   Mortgage loans held for sale$56 3.02$2  $72 3.86$3 
   Federal funds sold$2,574 0.08$2  $3,857 0.05$18 
   Deposits with banks$75,854 0.31$236  $59,043 0.56$332 
   Investment securities - taxable$178,029 1.70$3,031  $100,529 2.13$2,138 
   Investment securities - tax-exempt$65,444 3.23$1,565  $40,452 3.63$1,088 
      Total Earning Assets$777,804 3.05$23,159  $609,316 3.48$20,810 
Non interest earning assets         
   Allowance for loan losses (4,625)     (3,900)   
   Cash and due from banks$10,397     $10,074    
   Premises and equipment$379     $423    
   Accrued interest receivable$2,091     $2,181    
   Other real estate$0     $0    
   Other assets$19,874     $19,973    
   Unrealized gain (loss) on inv. securities 4,878      3,579    
      Total Assets$810,798     $641,646    
Interest bearing liabilities         
   Interest bearing demand$35,946 0.20$72  $32,004 0.20$65 
   Savings and Money Market$598,139 0.34$2,063  $429,755 0.39$1,671 
   Time deposits - retail$10,012 0.57$57  $9,948 1.26$126 
   Time deposits - wholesale$18,493 0.30$55  $11,369 0.69$79 
      Total interest bearing deposits$662,590 0.34$2,247  $483,076 0.40$1,941 
   Federal Home Loan Bank advances$13,262 2.63$310  $24,942 1.47$372 
   Subordinated debt$14,767 5.21$780  $3,816 5.00$194 
   Other borrowings$986 0.00$0  $28,566 1.50$96 
      Total borrowed funds$29,015 3.86$1,090  $57,324 1.14$662 
      Total interest bearing liabilities$691,605 0.49$3,337  $540,400 0.48$2,603 
Net interest rate spread 2.56$19,822   3.00$18,207 
   Non-interest bearing deposits$33,809     $24,472    
   Other liabilities$5,743     $7,302    
   Stockholder's equity$79,641     $69,413    
      Total Liabilities and Stockholder's Equity$810,798     $641,587    
Cost of funds 0.46    0.46  
Net interest margin 2.62    3.05  
          
*The information is preliminary, unaudited and based on company data available at the time of presentation.   
          
Yield Table Assumptions - Average loan balances are inclusive of nonperforming loans. Yields computed on tax-exempt instruments are on a tax equivalent basis. Net interest spread is calculated as the yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. Net interest margin is the result of net interest income calculated on a tax-equivalent basis divided by average interest earning assets for the period. Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate while rate change is change in rate times the previous volume. Changes not due solely to volume or rate changes are allocated to volume change and rate change in proportion to the relationship of the absolute dollar amounts of the change in each category.

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