Truxton Corporation Reports Fourth Quarter and Full Year 2023 Results

Published

NASHVILLE, Tenn., Jan. 25, 2024 (GLOBE NEWSWIRE) -- Truxton Corporation, the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter and year ended December 31, 2023. Fourth quarter net income attributable to common shareholders was $4.2 million, or $1.46 earnings per diluted share, compared with $4.1 million, or $1.40 earnings per diluted share, for the same quarter in 2022.

For the year ended December 31, 2023, net income increased by 4% to $17.5 million from $16.7 million in 2022. For the year ended December 31, 2023, earnings per diluted share rose to $6.02 from $5.75, an increase of 5% from 2022.

“In what was a very challenging year for all banks, we are pleased with our financial results,” said Chairman and CEO Tom Stumb. “The strength of our business model and value to our customers was once again on display as Wealth Management revenue grew 8%, helping to offset Net Interest Margin compression.   We earned a return on average equity for the year of 22.3% - an outstanding achievement in any environment.”  

Key Highlights

  • Truxton partially restructured its fixed income investment portfolio in December and realized $445 thousand in losses on the sale of $8 million of investments. This restructuring allowed Truxton to improve its interest rate risk profile and should contribute to an increase in its future earnings. The after-tax cost of these losses lowered earnings per share by approximately $0.12 per share in the fourth quarter of 2023. Excluding these losses, earnings per diluted share for the quarter would have been approximately $1.58, up from $1.57 in the third quarter of 2023 and $1.56 in the fourth quarter of 2022, excluding approximately $0.16 per share of securities restructuring realized losses in that quarter.
  • Non-interest income, excluding the restructuring losses, was $4.7 million in the fourth quarter of 2023, a decline of 4% from the third quarter of 2023 and up 8% in comparison to the fourth quarter of 2022. Wealth management services constituted 94% of non-interest income, excluding restructuring losses, in the fourth quarter of 2023.
  • Loans rose 2.5% to $658 million at year end compared to $642 million on September 30, 2023, and were up 6% compared to $619 million on December 31, 2022.
  • Total deposits increased less than 1% from September 30, 2023, to $782 million at December 31, 2023, and declined 3% in comparison to December 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 (NIM) for the fourth quarter of 2023 was 2.78%, an increase of 17 basis points from the 2.61% experienced in the third quarter of 2023, but a decline of 5 basis points from the fourth quarter of 2022. Approximately half of the increase in quarter-over-quarter NIM was driven by a one-time loan prepayment fee. Cost of funds was 3.15% in the fourth quarter of 2023, up from 3.05% for the quarter ended September 30, 2023, and an increase from 1.73% in the quarter ended December 31, 2022.   
  • Asset quality remains sound at Truxton. The Bank had no non-performing assets at December 31, 2023.   Truxton had $8 thousand of recoveries in the fourth quarter of 2023, $1 thousand in the trailing quarter, and $2 thousand in the fourth quarter of 2022.
  • Truxton adopted the mandated Current Expected Credit Loss accounting methodology for calculating its allowance for credit losses effective January 1, 2023. The Allowance for Credit Losses was $6.3 million at quarter end December 31, 2023, and $6.0 million at quarter end September 30, 2023, excluding $0.4 million and $0.5 million in allowance for unfunded commitments, respectively, compared to Allowance for Loan and Lease Losses of $5.8 million at December 31, 2022. For the same three periods, the Bank’s loan-related allowance was 0.96%, 0.94%, and 0.93%, respectively, of gross loans outstanding at period end.
  • The Bank’s capital position remains strong. The Tier 1 leverage ratio was 10.53% at December 31, 2023, 10.36% at September 30, 2023, and 9.78% at December 31, 2022. Book value per common share was $30.31, $27.43, and $25.39 at December 31, 2023, September 30, 2023, and December 31, 2022, respectively.
  • During the twelve months ended December 31, 2023, Truxton Corporation paid dividends of $2.52 per common share, inclusive of a $1 special cash dividend, and repurchased 18 thousand shares of its common stock for $1.1 million, an average price of $59.95 per share.

About Truxton Truxton Trust Company is a provider of wealth, banking, and family office services for wealthy individuals, their families and their business interests. Serving clients across the world, Truxton’s vastly experienced team of professionals provides customized solutions to its clients’ complex financial needs. Founded in 2004 in Nashville, Tennessee, Truxton 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 RelationsMedia Relations
Austin BranstetterSwan Burrus
615-250-0783615-250-0773
austin.branstetter@truxtontrust.comswan.burrus@truxtontrust.com

Truxton Corporation
Consolidated Balance Sheets
(000's)
(Unaudited)
    
 December 31, 2023*September 30, 2023*December 31, 2022
ASSETS   
Cash and due from financial institutions$4,272 $5,040 $5,405 
Interest bearing deposits in other financial institutions 3,417  7,589  1,094 
Federal funds sold 1,537  956  - 
Cash and cash equivalents 9,226  13,585  6,499 
    
Time deposits in other financial institutions 490  740  3,833 
Securities available for sale 259,926  259,543  257,257 
    
Gross loans, excluding Paycheck Protection Program 657,781  641,697  618,847 
Allowance for credit losses** (6,304) (6,031) (5,761)
Paycheck Protection Program Loans 59  69  101 
Net loans 651,536  635,735  613,187 
    
Bank owned life insurance 10,808  10,751  10,592 
Restricted equity securities 1,858  1,940  3,227 
Premises and equipment, net 189  129  209 
Accrued interest receivable 4,388  4,310  3,512 
Deferred tax asset, net 6,010  7,910  7,161 
Other assets 10,839  13,922  11,803 
    
Total assets$955,270 $948,566 $917,280 
    
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
Deposits   
Non-interest bearing$123,918 $116,918 $153,870 
Interest bearing$658,061 $663,950  653,880 
Total deposits 781,979  780,868  807,750 
    
Federal funds purchased -  -  4,933 
Swap counterparty cash collateral 4,060  4,820  4,090 
Federal Home Loan Bank advances 4,500  4,500  4,500 
Federal Reserve Bank Term Funding Program advances 53,800  55,000  - 
Subordinated debt 14,327  14,291  14,727 
Other liabilities 8,922  9,544  7,904 
Total liabilities 867,588  869,023  843,904 
    
SHAREHOLDERS' EQUITY   
Common stock, $0.10 par value$289 $288 $289 
Additional paid-in capital 31,457  31,335  31,107 
Retained earnings 51,679  52,780  42,766 
Accumulated other comprehensive income (loss) (13,279) (18,167) (17,512)
Net Income$17,536 $13,307 $16,726 
Total shareholders' equity 87,682  79,543  73,376 
    
Total liabilities and shareholders' equity$955,270 $948,566 $917,280 
    
*The information is preliminary, unaudited and based on company data available at the time of presentation.
**2022 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 recorded in Other liabilities in 2023.
    

Truxton Corporation
Consolidated Statements of Net Income
(000's)
(Unaudited)
          
 Three Months Ended Year To Date
 December 31,2023* September 30,2023* December 31,2022* December 31,2023* December 31,2022
Non-interest income         
Wealth management services$4,435  $4,608 $4,126  $17,657  $16,377 
Service charges on deposit accounts 111   123  111   461   415 
Securities gains (losses), net (445)  0  (588)  (387)  (636)
Bank owned life insurance income 56   54  51   216   203 
Other 52   146  63   309   253 
Total non-interest income 4,208   4,931  3,763   18,256   16,612 
          
Interest income         
Loans, including fees$10,495  $9,714 $8,017  $37,804  $25,125 
Taxable securities 2,554   2,575  1,620   9,350   5,247 
Tax-exempt securities 210   216  373   876   1,568 
Interest bearing deposits 194   69  303   695   469 
Federal funds sold 41   30  26   101   39 
Other interest income 63   105  59   216   156 
Total interest income 13,558   12,709  10,398   49,042   32,604 
          
Interest expense         
Deposits 6,048   5,679  3,485   20,881   6,792 
Short-term borrowings 685   61  42   2,154   52 
Long-term borrowings 23   716  72   490   141 
Subordinated debentures 187   195  194   771   776 
Total interest expense 6,943   6,650  3,793   24,296   7,761 
          
Net interest income 6,615   6,059  6,605   24,746   24,843 
          
Provision for credit losses 215   6  9   296   984 
          
Net interest income after provision for loan losses 6,400   6,053  6,596   24,450   23,859 
          
Total revenue, net 10,608   10,984  10,359   42,706   40,471 
          
Non interest expense         
Salaries and employee benefits 3,563   3,819  3,823   14,810   14,587 
Occupancy 272   313  278   1,185   1,034 
Furniture and equipment 24   7  25   76   112 
Data processing 389   470  400   1,703   1,486 
Wealth management processing fees 166   178  179   729   666 
Advertising and public relations 109   58  78   248   162 
Professional services 285   127  177   941   793 
FDIC insurance assessments 225   85  55   460   246 
Other 322   256  196   901   879 
Total non interest expense 5,355   5,314  5,211   21,053   19,965 
          
Income before income taxes 5,253   5,670  5,148   21,653   20,506 
          
Income tax expense 1,029   1,109  1,098   4,117   3,780 
          
Net income$4,225  $4,560 $4,050  $17,536  $16,726 
          
Earnings per share:         
Basic$1.46  $1.57 $1.40  $6.04  $5.78 
Diluted$1.46  $1.57 $1.40  $6.02  $5.75 
*The information is preliminary, unaudited and based on company data available at the time of presentation. Totals may not foot due to rounding.    

Truxton Corporation
Selected Quarterly Financial data
At Or For The Three Months Ended
(000's)
(Unaudited)
    
 December 31, 2023*September 30, 2023*December 31, 2022
    
Per Common Share Data   
Net income attributable to shareholders, per share   
Basic$1.46$1.57$1.40
Diluted$1.46$1.57$1.40
Book value per common share$30.31$27.43$25.39
Tangible book value per common share$30.31$27.43$25.39
Basic weighted average common shares2,821,8462,829,1392,810,702
Diluted weighted average common shares2,828,2742,836,1872,822,538
Common shares outstanding at period end2,893,0642,900,1712,887,362
    
    
Selected Balance Sheet Data   
Tangible common equity (TCE) ratio9.18%8.39%8.00%
Average Loans$653,804$634,179$616,609
Average earning assets (1)$956,793$943,584$939,763
Average total assets$960,852$949,754$943,900
Average shareholders' equity$81,759$80,535$70,128
    
    
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)($8)($1)($2)
Nonperforming loans to assets0.00%0.00%0.00%
Nonperforming assets to total assets0.00%0.00%0.00%
Nonperforming assets to total loans and other real estate0.00%0.00%0.00%
Allowance for credit losses to total loans**0.96%0.94%0.93%
Net charge offs to average loans-0.00%-0.00%-0.00%
    
    
Capital Ratios (Bank Subsidiary Only)   
Tier 1 leverage10.53%10.36%9.78%
Common equity tier 114.58%14.11%13.36%
Total risk-based capital15.53%15.04%14.20%
    
Selected Performance Ratios    
Efficiency ratio47.07%47.87%48.55%
Return on average assets (ROA)1.75%1.91%1.70%
Return on average shareholders' equity (ROE)20.52%22.48%22.92%
Return on average tangible common equity (ROTCE)20.52%22.48%22.92%
Net interest margin2.78%2.61%2.83%
    
*The information is preliminary, unaudited and based on company data available at the time of presentation.
**2022 data shows Allowance for loan losses. Truxton adopted the Current Expected Credit Loss methodology as of January 1, 2023. 2023 ratios do not include reserve for unfunded commitments
(1) Average earning assets is the daily average of earning assets. Earning assets consists of loans, mortgage loans held for sale, federal funds sold, deposits with banks, and investment securities.
    

Truxton Corporation
Yield Tables
For The Periods Indicated
(000's)
(Unaudited)
            
The following table sets forth the amount of our average balances, interest income or interest expense for each category of interest earning assets and interest bearing liabilities and the average interest rate for interest earning assets and interest bearing liabilities, net interest spread and net interest margin for the periods indicated below:
                     
                     
 Three Months Ended Three Months Ended Three Months Ended
 December 31, 2023* September, 30 2023* December 31, 2022*
            
 Average BalancesRates/ Yields (%)Interest Income/ Expense Average BalancesRates/ Yields (%)Interest Income/ Expense Average BalancesRates/ Yields (%)Interest Income/ Expense
            
Earning Assets           
   Loans$653,804 6.18$10,183 $634,179 6.01$9,602 $616,609 5.01$7,905
   Loan fees$0 0.19$312 $0 0.07$112 $0 0.07$112
      Loans with fees$653,804 6.37$10,495 $634,179 6.08$9,714 $616,609 5.16$8,017
   Mortgage loans held for sale$0 0.00$0 $0 0.00$0 $0 0.00$0
   Federal funds sold$2,985 5.41$41 $2,293 5.20$30 $2,688 3.76$26
   Deposits with banks$14,240 5.51$198 $13,213 5.34$178 $31,462 3.82$303
   Investment securities - taxable$248,778 4.11$2,554 $255,822 4.03$2,575 $228,108 2.84$1,620
   Investment securities - tax-exempt$36,986 3.39$210 $38,077 3.38$216 $60,897 3.31$372
      Total Earning Assets$956,793 5.65$13,498 $943,584 5.40$12,713 $939,764 4.43$10,338
Non interest earning assets           
   Allowance for loan losses (6,123)     (5,989)     (5,783)   
   Cash and due from banks$5,402    $5,814    $6,871   
   Premises and equipment$119    $134    $224   
   Accrued interest receivable$3,575    $3,443    $2,935   
   Other real estate$0    $0    $0   
   Other assets$30,404    $29,298    $30,251   
   Unrealized gain (loss) on inv. securities (29,318)     (26,530)     (30,362)   
      Total Assets$960,852    $949,754    $943,900   
Interest bearing liabilities           
   Interest bearing demand$345,966 3.42$2,984 $354,018 3.43$3,062 $380,638 2.23$2,140
   Savings and money market$138,244 2.95$1,027 $132,842 2.67$895 $142,369 1.44$515
   Time deposits - retail$16,343 3.18$131 $17,334 2.67$117 $24,280 1.41$86
   Time deposits - wholesale$165,756 4.56$1,906 $147,046 4.33$1,605 $128,619 2.29$744
      Total interest bearing deposits$666,309 3.6$6,048 $651,240 3.46$5,679 $675,906 2.05$3,485
   Federal Home Loan Bank advances$4,500 1.98$23 $9,337 3.79$91 $9,957 2.85$72
   Subordinated debt$14,422 5.08$187 $15,030 5.09$195 $14,827 5.12$194
   Other borrowings$60,859 4.39$685 $60,606 4.40$682 $4,760 4.33$42
      Total borrowed funds$79,781 4.39$895 $84,973 4.46$968 $29,544 4.08$308
      Total interest bearing liabilities$746,090 3.69$6,943 $736,213 3.57$6,647 $705,450 2.13$3,793
Net interest rate spread 1.96$6,555  1.83$6,066  2.30$6,545
   Non-interest bearing deposits$126,534    $127,389    $163,653   
   Other liabilities$6,469    $5,308    $4,671   
   Shareholder's equity$81,759    $80,535    $70,128   
      Total Liabilities and Shareholder's Equity$960,852    $949,445    $943,902   
Cost of funds 3.15   3.05   1.73 
Net interest margin 2.78   2.61   2.83 
            
*The information is preliminary, unaudited and based on company data available at the time of presentation. Totals may not foot due to rounding.  
            
Yield Table Assumptions - Average loan balances are inclusive of nonperforming loans. Yields computed on tax-exempt instruments are on a tax equivalent basis. Net interest spread is calculated as the yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. Net interest margin is the result of net interest income calculated on a tax-equivalent basis divided by average interest earning assets for the period. Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate while rate change is change in rate times the previous volume. Changes not due solely to volume or rate changes are allocated to volume change and rate change in proportion to the relationship of the absolute dollar amounts of the change in each category.     
                     

Truxton Corporation
Yield Tables
For The Periods Indicated
(000's)
(Unaudited)
The following table sets forth the amount of our average balances, interest income or interest expense for each category of interest earning assets and interest bearing liabilities and the average interest rate for interest earning assets and interest bearing liabilities, net interest spread and net interest margin for the periods indicated below:
               
               
 Twelve Months Ended  Twelve Months Ended
 December 31, 2023*  December 31, 2022
 Average BalancesRates/ Yields (%)Interest Income/ Expense  Average BalancesRates/ Yields (%)Interest Income/ Expense
         
Earning Assets        
   Loans$635,059 5.85$37,150  $562,647 4.35$24,470
   Loan fees$0 0.10$654  $0 0.12$654
      Loans with fees$635,059 5.95$37,804  $562,647 4.47$25,124
   Mortgage loans held for sale$0 0.00$0  $28 4.13$1
   Federal funds sold$1,907 5.21$101  $2,102 1.85$39
   Deposits with banks$13,711 5.07$695  $27,043 1.73$469
   Investment securities - taxable$247,483 3.78$9,350  $232,515 2.26$5,247
   Investment securities - tax-exempt$38,410 3.40$876  $64,684 3.28$1,568
      Total Earning Assets$936,570 5.26$48,826  $889,019 3.71$32,448
Non interest earning assets        
   Allowance for loan losses (6,087)      (5,318)   
   Cash and due from banks 5,960     $7,789   
   Premises and equipment$154     $251   
   Accrued interest receivable$3,271     $2,453   
   Other real estate$0     $0   
   Other assets$29,175     $25,359   
   Unrealized gain (loss) on inv. securities (26,891)      (17,031)   
      Total Assets$942,152     $902,522   
Interest bearing liabilities        
   Interest bearing demand$351,956 3.20$11,247  $366,943 1.19$4,350
   Savings and Money Market$134,518 2.50$3,368  $143,591 0.68$975
   Time deposits - Retail$17,168 2.53$435  $19,072 1.08$205
   Time Deposits - Wholesale$143,922 4.05$5,832  $89,916 1.40$1,262
      Total interest bearing deposits$647,564 3.22$20,882  $619,522 1.10$6,792
   Federal home Loan Bank advances$12,355 3.91$490  $6,511 2.14$141
   Subordinated debt$14,831 5.12$771  $14,853 5.21$780
   Other borrowings$47,985 4.42$2,153  $2,124 2.54$48
      Total borrowed funds$75,171 4.48$3,414  $23,488 4.07$969
      Total interest bearing liabilities$722,735 3.36$24,296  $643,010 1.20$7,761
Net interest rate spread 1.90$24,530   2.51$24,687
   Non-interest bearing deposits$135,909     $180,665   
   Other liabilities$4,810     $4,142   
   Shareholder's equity$78,619     $74,771   
      Total Liabilities and Shareholder's Equity$942,073     $902,588   
Cost of funds 2.82    0.94 
Net interest margin 2.67    2.84 
         
*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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Source: Truxton Trust Company

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