CapStar Financial Holdings, Inc. Announces Third Quarter 2016 Results

CapStar Financial Holdings, Inc. Announces Third Quarter 2016 Results

PR Newswire

NASHVILLE, Tenn., Oct. 27, 2016 /PRNewswire/ -- CapStar Financial Holdings, Inc. ("CapStar") (NASDAQ: CSTR) reported net income of $2.1 million, or $0.20 per diluted common share for the three months ended September 30, 2016, compared to $2.0 million, or $0.20 per diluted common share, for the three months ended September 30, 2015.  For the nine months ended September 30, 2016, CapStar reported net income of $6.2 million, or $0.58 per diluted common share, compared to $5.5 million, or $0.53 per diluted common share, for the nine months ended September 30, 2015.

CapStar Financial Holdings, Inc. Logo (PRNewsFoto/CapStar Financial Holdings, Inc.)

"Our emphasis has always been on the principles of sound, profitable growth, which is evident in CapStar's results this quarter," said Claire Tucker president and chief executive officer of CapStar Financial Holdings, Inc.  "With the completion of our initial public offering on September 27, 2016 and the injection of new capital, we will continue to emphasize the importance of these principles in order to realize our future growth objectives and enhance long-term shareholder value."

Soundness

  • The allowance for loan and lease losses represented 1.25% of total loans at September 30, 2016 compared to 1.24% at September 30, 2015.
  • Non-performing assets as a percent of gross loans and other real estate owned was 0.45% at September 30, 2016 compared to 0.42% at September 30, 2015.
  • Net charge-offs (quarters annualized) totaled 0.25% for the three months ended September 30, 2016, compared to -0.10% for the same period in 2015.
  • The total risk based capital ratio increased to 12.45% at September 30, 2016, compared to 11.43% at September 30, 2015.

"While the third quarter is typically one of our strongest performances of the year due to the seasonality in our mortgage business, we are pleased with the core earnings of the company," said Rob Anderson, chief financial officer and chief administrative officer.   

Profitability

  • Return on average assets for the three months ended September 30, 2016 was 0.65% compared to 0.71% for the same period in 2015.
  • Return on average equity for the three months ended September 30, 2016 was 7.15% compared to 7.50% for the same period in 2015.
  • The net interest margin ("NIM") for the three months ended September 30, 2016 was 3.23% compared to 3.45% for the same period in 2015. Additionally, the NIM was up 14 basis points over the linked quarter.
  • The efficiency ratio for the three months ended September 30, 2016 was 64.0% compared to 71.4% for the same period in 2015.

Growth

  • Average gross loans and leases (including loans held for sale) increased 27%, to $982 million at September 30, 2016 compared to $774 million at September 30, 2015.
  • Average total deposits increased 17%, to $1.1 billion at September 30, 2016 compared to $971 million at September 30, 2015.
  • Non-interest bearing and NOW deposits increased 53%, to $491 million at September 30, 2016 compared to $321 million at September 30, 2015.
  • Originations of mortgage loans held for sale increased 51%, to $156 million at September 30, 2016 compared to $103 million at September 30, 2015.

Conference Call and Webcast Information

CapStar will host a conference call and webcast at 9:00 a.m. Central Time on Friday, October 28, 2016.  During the call, management will review the third quarter results and operational highlights.  Interested parties may listen to the call by dialing (844) 412-1102.  The conference ID number is 96905694.  A simultaneous webcast may be accessed on CapStar's website at www.capstarbank.com.  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, 2016, on a consolidated basis, CapStar had total assets of $1.3 billion, net loans of $912.5 million, total deposits of $1.1 billion, and shareholders' equity of $138.0 million.  Visit www.capstarbank.com for more information.

Forward-Looking Statements

Certain statements in this earnings release are forward-looking statements that reflect CapStar's current views with respect to, among other things, future events and CapStar's financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "project," "projection," "forecast," "goal," "target," "would," and "outlook," or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about CapStar's industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond CapStar's control. The inclusion of these forward-looking statements should not be regarded as a representation by CapStar or any other person that such expectations, estimates and projections will be achieved. Accordingly, CapStar cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although CapStar believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be important factors that could cause CapStar's actual results to differ materially from those indicated in these forward-looking statements, including, but are not limited to, the risk factors previously disclosed in the "Risk Factors" section included in our prospectus filed with the SEC on September 23, 2016 pursuant to Rule 424(b)(4) under the Securities Act.   If one or more events related to these or other risks or uncertainties materialize, or if CapStar's underlying assumptions prove to be incorrect, actual results may differ materially from our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this earnings release, and CapStar does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for CapStar to predict their occurrence or how they will affect CapStar.


CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statements of Income (unaudited)

Third Quarter 2016 Earnings Release




Three Months Ended



Nine Months Ended




September 30,



September 30,




2016



2015



2016



2015


Interest income:

















Loans, including fees


$

10,658,758



$

9,428,826



$

29,531,404



$

25,834,421


Securities:

















Taxable



787,076




993,485




2,596,059




3,277,535


Tax-exempt



291,110




277,365




841,264




802,029


Federal funds sold



3,597




3,089




12,107




13,138


Restricted equity securities



70,609




67,528




209,654




200,174


Interest-bearing deposits in financial institutions



63,455




32,354




197,033




105,063


Total interest income



11,874,605




10,802,647




33,387,521




30,232,360


Interest expense:

















Interest-bearing deposits



404,040




184,162




1,095,984




533,747


Savings and money market accounts



689,382




650,735




2,140,405




2,039,751


Time deposits



545,733




492,178




1,566,373




1,564,751


Federal funds purchased



13,097




7,510




20,917




14,604


Securities sold under agreements to repurchase






3,715




1,311




12,731


Federal Home Loan Bank advances



96,838




47,333




279,586




131,000


Total interest expense



1,749,090




1,385,633




5,104,576




4,296,584


Net interest income



10,125,515




9,417,014




28,282,945




25,935,776


Provision for loan and lease losses



1,638,669




580,000




2,758,749




1,300,675


Net interest income after provision for loan and lease losses



8,486,846




8,837,014




25,524,196




24,635,101


Noninterest income:

















Service charges on deposit accounts



276,751




235,035




805,322




667,415


Loan commitment fees



328,785




306,231




901,524




631,130


Net gain (loss) on sale of securities



(3,964)




38,673




120,873




95,584


Net gain on sale of loans



2,339,310




1,748,883




5,341,605




4,699,177


Other noninterest income



250,581




305,837




961,103




872,047


Total noninterest income



3,191,463




2,634,659




8,130,427




6,965,353


Noninterest expense:

















Salaries and employee benefits



5,119,356




5,205,896




15,275,494




14,628,293


Data processing and software



627,335




562,544




1,830,553




1,776,955


Professional fees



390,862




374,496




1,147,733




1,113,776


Occupancy



351,691




381,522




1,132,664




1,172,163


Equipment



458,053




442,899




1,300,793




1,201,084


Regulatory fees



250,424




227,053




742,308




688,965


Other real estate expense






6,562




13,880




33,812


Other operating



1,329,084




1,402,927




3,043,915




3,038,706


Total noninterest expense



8,526,805




8,603,899




24,487,340




23,653,754


Income before income taxes



3,151,504




2,867,774




9,167,283




7,946,700


Income tax expense



1,042,282




831,307




2,997,965




2,480,231


Net income


$

2,109,222



$

2,036,467



$

6,169,318



$

5,466,469


Per share information:

















Basic net income per common share


$

0.24



$

0.24



$

0.71



$

0.64


Diluted net income per common share


$

0.20



$

0.20



$

0.58



$

0.53


Weighted average shares outstanding:

















Basic



8,792,665




8,554,802




8,701,596




8,526,840


Diluted



10,799,536




10,407,721




10,682,976




10,364,278



This information is preliminary and based on company data available at the time of the presentation.

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Selected Quarterly Financial Data (unaudited)

Third Quarter 2016 Earnings Release




Five Quarter Comparison




9/30/16



6/30/16



3/31/16



12/31/15



9/30/15


Income Statement Data:





















Net interest income


$

10,125,515



$

9,201,155



$

8,956,275



$

8,837,446



$

9,417,014


Provision for loan and lease losses



1,638,669




182,863




937,216




350,000




580,000


Net interest income after provision for loan and lease losses



8,486,845




9,018,292




8,019,059




8,487,446




8,837,014


Service charges on deposit accounts



276,751




303,144




225,427




242,282




235,035


Loan commitment fees



328,785




142,618




430,122




191,032




306,231


Net gain (loss) on sale of securities



(3,964)




85,876




38,961




(40,561)




38,673


Net gain on sale of loans



2,339,310




1,654,843




1,347,452




1,262,590




1,748,883


Other noninterest income



250,582




381,711




328,809




262,814




305,837


Total noninterest income



3,191,463




2,568,192




2,370,772




1,918,157




2,634,659


Salaries and employee benefits



5,119,356




4,938,383




5,217,755




4,650,035




5,205,896


Data processing and software



627,335




634,742




568,477




539,752




562,544


Professional fees



390,862




426,132




330,738




355,255




374,496


Occupancy



351,691




371,092




409,881




365,994




381,522


Equipment



458,053




436,168




406,571




397,072




442,899


Regulatory fees



250,424




264,625




227,260




225,994




227,053


Other real estate expense



0




6,080




7,800




1,784




6,562


Other operating



1,329,084




873,572




841,259




787,134




1,402,927


Total noninterest expense



8,526,805




7,950,794




8,009,741




7,323,020




8,603,899


Net income before income tax expense



3,151,504




3,635,690




2,380,090




3,082,583




2,867,773


Income tax expense



1,042,282




1,159,438




796,245




989,615




831,307


Net income


$

2,109,222



$

2,476,252



$

1,583,845



$

2,092,968



$

2,036,467


Weighted average shares - basic



8,792,665




8,682,438




8,628,683




8,574,965




8,554,803


Weighted average shares - diluted



10,799,536




10,675,916




10,572,193




10,434,171




10,407,722


Net income per share, basic


$

0.24



$

0.29



$

0.18



$

0.24



$

0.24


Net income per share, diluted



0.20




0.23




0.15




0.20




0.20


Balance Sheet Data (at period end):





















Cash and cash equivalents


$

73,450,735



$

97,546,046



$

76,706,579



$

100,184,841



$

64,133,775


Securities available for sale



167,213,109




171,336,596




189,807,985




173,382,957




170,219,581


Securities held to maturity



46,227,968




43,331,042




42,953,364




43,093,951




43,322,469


Loans held for sale



61,251,662




57,014,256




29,530,174




35,729,353




28,769,990


Total loans and leases



924,030,515




887,437,485




837,690,395




808,396,064




782,436,559


Allowance for loan and lease losses



(11,510,464)




(10,453,603)




(10,298,559)




(10,131,729)




(9,700,040)


Total assets



1,318,057,325




1,310,417,841




1,223,179,646




1,206,800,280




1,135,471,317


Non-interest-bearing deposits



191,469,462




193,541,662




220,686,364




190,580,468




187,104,757


Interest-bearing deposits



944,590,330




949,759,113




865,650,400




847,879,843




787,906,354


Federal Home Loan Bank advances



30,000,000




40,000,000




15,000,000




45,000,000




35,000,000


Total liabilities



1,179,630,825




1,196,099,660




1,112,320,842




1,098,214,173




1,027,765,928


Shareholders' equity



138,426,500




114,318,181




110,858,804




108,586,107




107,705,389


Total common shares outstanding



11,191,021




8,683,902




8,677,902




8,577,051




8,565,051


Total preferred shares outstanding



878,049




1,609,756




1,609,756




1,609,756




1,609,756


Book value per common share



11.57




11.26




10.87




10.74




10.65


Market value per common share (1)



16.92




-




-




-




-


Capital ratios:





















Total risk based capital



12.45

%



10.67

%



11.26

%



11.42

%



11.43

%

Tier 1 risk based capital



11.46

%



9.73

%



10.26

%



10.41

%



10.44

%

Common equity tier 1 capital



10.75

%



8.34

%



8.75

%



8.89

%



8.88

%

Leverage



10.47

%



8.90

%



9.16

%



9.33

%



9.18

%











































(1) CapStar Financial Holdings, Inc. completed its initial public offering during the third quarter of 2016.  As such, market values per share of common stock are not provided for previous periods.


This information is preliminary and based on company data available at the time of the presentation.

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Selected Quarterly Financial Data (unaudited)

Third Quarter 2016 Earnings Release




Five Quarter Comparison




9/30/16



6/30/16



3/31/16



12/31/15



9/30/15


Average Balance Sheet Data:





















Average cash and cash equivalents



55,054,076




56,458,924




67,706,162




63,187,062




65,209,244


Average investment securities



218,462,999




232,587,954




220,281,801




216,982,746




252,504,136


Average loans held for sale



63,640,373




43,055,160




29,798,738




27,338,722




32,836,386


Average loans and leases



918,301,556




873,984,373




822,111,590




790,899,319




741,454,925


Average assets



1,296,870,515




1,247,076,866




1,181,427,683




1,140,126,959




1,134,200,077


Average interest bearing deposits



944,794,017




909,027,610




837,952,639




781,893,266




788,820,905


Average total deposits



1,132,037,604




1,093,452,418




1,027,457,215




973,109,277




971,402,676


Average Federal Home Loan Bank advances



29,565,217




27,417,582




28,021,978




39,891,304




35,000,000


Average liabilities



1,179,480,497




1,134,506,177




1,070,607,967




1,030,995,222




1,026,417,411


Average shareholders' equity



117,390,018




112,570,689




110,819,715




109,131,737




107,782,666


Performance Ratios:





















Annualized return on average assets



0.65

%



0.80

%



0.54

%



0.73

%



0.71

%

Annualized return on average equity



7.15

%



8.85

%



5.75

%



7.61

%



7.50

%

Net interest margin



3.23

%



3.09

%



3.18

%



3.22

%



3.45

%

Annualized Non-interest income to average assets



0.98

%



0.83

%



0.81

%



0.67

%



0.92

%

Efficiency ratio



64.0

%



67.6

%



70.7

%



68.1

%



71.4

%

Loans by Type:





















Commercial and industrial



389,717,893




389,087,927




381,548,046




353,442,069




350,023,393


Commercial real estate - owner occupied



108,920,619




104,345,021




104,243,080




108,132,048




95,118,531


Commercial real estate - non-owner occupied



163,625,512




171,426,074




161,466,867




143,064,438




138,486,067


Construction and development



91,366,437




63,744,151




52,479,785




52,521,802




48,928,400


Consumer real estate



96,918,661




91,090,508




90,393,165




93,785,260




92,240,059


Consumer



7,045,978




7,486,178




8,291,223




8,668,242




8,813,950


Other



67,805,899




61,669,965




40,698,880




50,196,845




50,114,909


Asset Quality Data:





















Allowance for loan and lease losses to total loans



1.25

%



1.18

%



1.23

%



1.25

%



1.24

%

Allowance for loan and lease losses to non-performing loans



279

%



179

%



184

%



377

%



328

%

Nonaccrual loans



4,122,942




5,829,423




5,586,503




2,689,000




2,961,529


Troubled debt restructurings



1,288,324




-




-




125,000




133,326


Loans - 90 days past due & still accruing



-




-




-




-




-


Total non-performing loans



4,122,942




5,829,423




5,586,503




2,689,000




2,961,529


OREO and repossessed assets



-




-




-




216,254




335,254


Total non-performing assets



4,122,942




5,829,423




5,586,503




2,905,000




3,296,783


Non-performing loans to total loans



0.45

%



0.66

%



0.67

%



0.33

%



0.38

%

Non-performing assets to total assets



0.31

%



0.44

%



0.46

%



0.24

%



0.29

%

Non-performing assets to total loans and OREO



0.45

%



0.66

%



0.67

%



0.36

%



0.42

%

Annualized net charge-offs to average loans



0.25

%



0.01

%



0.38

%



-0.04

%



-0.10

%

Net charge-offs (recoveries)



581,809




27,819




770,386




(81,689)




(181,522)


Other Information:





















Full-time equivalent employees


168



166



163



162



159



This information is preliminary and based on company data available at the time of the presentation.

 

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SOURCE CapStar Financial Holdings, Inc.

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