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CapStar Reports Fully Diluted EPS of $0.29 and Fully Diluted Operating EPS of $0.30 for Q4 2019

NASHVILLE, Tenn., Jan. 23, 2020 (GLOBE NEWSWIRE) -- CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) reported net income of $5.42 million, or $0.29 per share on a fully diluted basis, for the three months ended December 31, 2019, compared to a net loss of ($0.71) million, or ($0.04) per share on a fully diluted basis, for the three months ended December 31, 2018.  Operating(1) net income was $5.54 million, or $0.30 per share on a fully diluted basis, for the three months ended December 31, 2019, compared to $6.24 million, or $0.33 per share on a fully diluted basis, for the three months ended December 31, 2018.  Included in the fourth quarter 2019 results is a one-time charge of $289K associated with the early retirement of four employees, which reduces annualized non-interest expense by $582K.   

Net income was $22.42 million, or $1.20 per share on a fully diluted basis, for the twelve months ended December 31, 2019, compared to net income of $9.66 million, or $0.67 per share on a fully diluted basis, for the twelve months ended December 31, 2018.  Operating net income was $24.38 million, or $1.31 per share on a fully diluted basis, for the twelve months ended December 31, 2019, compared to $17.25 million, or $1.19 per share on a fully diluted basis, for the twelve months ended December 31, 2018. 

“I am pleased with everything that the CapStar team was able to accomplish in 2019 and am excited about the outlook for 2020,” said Timothy K. Schools, CapStar’s president and CEO.  “We believe we are in a good position from a credit perspective and have improved the quality of our loan portfolio, by reducing the percentage of shared national credits and highly leveraged loans in our portfolio,” continued Mr. Schools.  “In addition, both our Tri-Net and Mortgage teams had record years and we successfully integrated Athens Federal.”

“Further, we are thrilled to enter the Knoxville market under the leadership of King Purnell and Amy Pangelinan and look forward to demonstrating our differentiated delivery of financial services and establishing ourselves as a leader in Knoxville” said Mr. Schools. 

Soundness

  • Non-performing assets as a percentage of total assets were 0.12% at December 31, 2019 compared to 0.16% at December 31, 2018.
  • Annualized net charge-offs to average loans were 0.06% for the three months ended December 31, 2019 compared to 1.27% for the same period in 2018.
  • The total risk based capital ratio was 13.45% at December 31, 2019 compared to 12.84% at December 31, 2018.                                                           

Profitability

  • Operating annualized return on average assets for the three months ended December 31, 2019 was 1.08% compared to 1.27% for the same period in 2018.
  • Operating annualized return on average tangible equity for the three months ended December 31, 2019 was 9.69% compared to 12.36% for the same period in 2018.
  • Net interest margin for the three months ended December 31, 2019 was 3.49% compared to 3.89% for the same period in 2018.
  • The operating efficiency ratio for the three months ended December 31, 2019 was 67.73% compared to 61.83% for the same period in 2018.

“While fourth quarter profitability metrics were less than the prior year, we took a one-time charge of $289K associated with the early retirement of four employees, which reduces annualized non-interest expense by $582K.  Additionally, a flattening yield curve and the three rate cuts that the FOMC made in the second half of 2019 also impacted the quarter,” said Rob Anderson, chief financial officer and chief administrative officer of CapStar.

Growth

  • Average gross loans for the quarter ended December 31, 2019 fell 0.60% to $1.43 billion, compared to $1.44 billion for the same period in 2018.
  • Average deposits for the quarter ended December 31, 2019 increased 8.34% to $1.71 billion, compared to $1.58 billion for the same period in 2018.

Dividend

On January 23, 2020, the board of directors of CapStar approved a quarterly dividend of $0.05 per common share that will be paid on February 21, 2020 to shareholders of record of CapStar’s common stock as of the close of business on February 7, 2020.

Conference Call and Webcast Information

CapStar will host a conference call and webcast at 8:30 a.m. Central Time on Friday January 24, 2020.  During the call, management will review the fourth quarter results and operational highlights.  Interested parties may listen to the call by dialing (844) 412-1002.  The conference ID number is 6275611.  A simultaneous webcast may be accessed on CapStar’s website at ir.capstarbank.com by clicking on “News & Events.”  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 December 31, 2019, on a consolidated basis, CapStar had total assets of $2.04 billion, gross loans of $1.42 billion, total deposits of $1.73 billion, and shareholders’ equity of $273.05 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, CapStar’s assets, business, cash flows, condition (financial or otherwise), credit quality, financial performance, liquidity, short and long-term performance goals, prospects, results of operations, strategic initiatives and the timing, benefits, costs and synergies of recently completed and future acquisition, disposition and other growth opportunities, including, without limitation, those relating to a projected increase in liquidity for our shareholders, improvements in our loan production and deposit gathering capabilities, managing interest rate risk, the acceptance by customers of Athens of CapStar’s products and services, the ability of CapStar to meet expectations regarding the benefits, costs, synergies, and financial and operational impact of the Athens merger, the possibility that any of the anticipated benefits, costs, synergies and financial and operational improvements of the Athens merger will not be realized or will not be realized as expected and the opportunities to enhance market share in certain markets and market acceptance of CapStar are generally in new markets. 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,” “aspire,” “achieve,” “estimate,” “intend,” “plan,” “project,” “projection,” “forecast,” “roadmap,” “goal,” “guidance,” “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 not limited to, any factors identified in this earnings release as well as those factors that are detailed from time to time in CapStar’s periodic and current reports filed with the Securities and Exchange Commission, including those factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 under the headings “Item 1A. Risk Factors” and “Cautionary Note Regarding Forward Looking Statements” and in the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.  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 its 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.

Non-GAAP Disclaimer

This earnings release includes the following financial measures that were prepared other than in accordance with generally accepted accounting principles in the United States (“non-GAAP financial measure”): operating net income, operating diluted net income per share, operating return on average assets, operating return on average tangible equity, tangible book value per share and operating efficiency ratio. These non-GAAP financial measures (i) provide useful information to management and investors that is supplementary to CapStar’s financial condition, results of operations and cash flows computed in accordance with GAAP, (ii) enable a more complete understanding of factors and trends affecting CapStar’s business, and (iii) allow investors to evaluate CapStar’s performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators. However, CapStar acknowledges that these non-GAAP financial measures have a number of limitations.  As such, you should not view these non-GAAP financial measures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use.  See below for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure. 

(1) For a discussion and reconciliation of the Non-GAAP operating measures that exclude merger-related costs unrelated to CapStar’s normal operations, see the section titled “Non-GAAP Disclaimer” and the Non-GAAP financial measures section of the financial statements.

CONTACT

Rob Anderson
Chief Financial Officer and Chief Administrative Officer
(615) 732-6470

 

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statements of Income (unaudited) (dollars in thousands, except share data)

Fourth Quarter 2019 Earnings Release 

    Three Months Ended     Year Ended  
    December 31,     December 31,  
    2019     2018     2019     2018  
Interest income:                                
Loans, including fees   $ 20,233     $ 20,554     $ 82,828     $ 60,751  
Securities:                                
Taxable     1,077       1,411       4,619       4,184  
Tax-exempt     347       416       1,438       1,201  
Federal funds sold           8       26       63  
Restricted equity securities     171       181       755       571  
Interest-bearing deposits in financial institutions     377       330       1,881       1,011  
Total interest income     22,205       22,900       91,547       67,781  
Interest expense:                                
Interest-bearing deposits     2,015       1,371       7,538       4,164  
Savings and money market accounts     1,821       1,619       7,266       5,446  
Time deposits     1,626       1,472       7,542       3,940  
Federal funds purchased                 4       3  
Securities sold under agreements to repurchase           3       5       3  
Federal Home Loan Bank advances     162       719       1,444       2,533  
Total interest expense     5,624       5,184       23,799       16,089  
Net interest income     16,581       17,716       67,748       51,692  
Provision for loan losses           1,514       761       2,842  
Net interest income after provision for loan losses     16,581       16,202       66,987       48,850  
Noninterest income:                                
Treasury management and other deposit service charges     736       793       3,135       2,150  
Net gain (loss) on sale of securities     9       1       (99 )     3  
Tri-Net fees     274       276       2,785       1,503  
Mortgage banking income     2,316       1,324       9,467       5,653  
Other noninterest income     2,384       3,993       8,986       6,150  
Total noninterest income     5,719       6,387       24,274       15,459  
Noninterest expense:                                
Salaries and employee benefits     9,318       9,475       35,542       28,586  
Data processing and software     1,835       1,424       6,961       3,835  
Professional fees     531       534       2,102       1,608  
Occupancy     795       736       3,345       2,336  
Equipment     834       810       3,723       2,471  
Regulatory fees     28       364       591       1,028  
Merger related expenses     163       8,929       2,654       9,803  
Amortization of intangibles     397       442       1,655       465  
Other operating     1,365       1,118       5,422       3,355  
Total noninterest expense     15,266       23,832       61,995       53,487  
Income (loss) before income taxes     7,034       (1,243 )     29,266       10,822  
Income tax expense (benefit)     1,613       (535 )     6,844       1,167  
Net income (loss)   $ 5,421     $ (708 )   $ 22,422     $ 9,655  
Per share information:                                
Basic net income (loss) per share of common stock   $ 0.3     $ (0.04 )   $ 1.25     $ 0.73  
Diluted net income (loss) per share of common stock   $ 0.29     $ (0.04 )   $ 1.2     $ 0.67  
Weighted average shares outstanding:                                
Basic     18,350,994       17,509,525       17,886,164       13,277,614  
Diluted     18,443,916       18,716,562       18,613,224       14,480,347  
                                 

This information is preliminary and based on CapStar data available at the time of this earnings release.


CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)

Fourth Quarter 2019 Earnings Release

    Five Quarter Comparison  
    12/31/19     9/30/19     6/30/19     3/31/19     12/31/18  
Income Statement Data:                                        
Net interest income   $ 16,581     $ 17,156     $ 17,008     $ 17,002     $ 17,715  
Provision for loan losses           (125 )           886       1,514  
Net interest income after provision for loan losses     16,581       17,281       17,008       16,116       16,201  
Treasury management and other deposit service charges     736       788       813       798       793  
Net gain (loss) on sale of securities     9             (121 )     12       1  
Tri-Net fees     274       847       1,024       641       276  
Mortgage banking income     2,316       2,679       3,087       1,385       1,324  
Other noninterest income     2,384       2,474       2,229       1,899       3,993  
Total noninterest income     5,719       6,788       7,032       4,735       6,387  
Salaries and employee benefits     9,318       9,229       8,563       8,432       9,475  
Data processing and software     1,835       1,790       1,862       1,474       1,424  
Professional fees     531       528       501       543       534  
Occupancy     795       858       809       883       736  
Equipment     834       1,012       1,026       852       810  
Regulatory fees     28       18       272       274       364  
Merger related expenses     163       187       1,711       594       8,929  
Amortization of intangibles     397       408       419       430       442  
Other operating     1,365       1,501       1,307       1,243       1,117  
Total noninterest expense     15,266       15,531       16,470       14,725       23,831  
Net income (loss) before income tax expense     7,034       8,538       7,570       6,126       (1,243 )
Income tax (benefit) expense     1,613       2,072       1,814       1,346       (535 )
Net income (loss)   $ 5,421     $ 6,466     $ 5,756     $ 4,780     $ (708 )
Weighted average shares - basic     18,350,994       17,741,778       17,663,992       17,783,239       17,509,525  
Weighted average shares - diluted     18,443,916       18,532,479       18,650,706       18,830,933       18,716,562  
Net income (loss) per share, basic   $ 0.3     $ 0.36     $ 0.33     $ 0.27     $ (0.04 )
Net income (loss) per share, diluted     0.29       0.35       0.31       0.25       (0.04 )
Balance Sheet Data (at period end):                                        
Cash and cash equivalents   $ 101,269     $ 154,021     $ 156,085     $ 120,321     $ 105,443  
Securities available-for-sale     213,129       203,500       194,957       233,691       243,808  
Securities held-to-maturity     3,313       3,319       3,721       3,727       3,734  
Loans held for sale     168,222       129,613       89,629       72,870       57,618  
Total loans     1,420,102       1,411,768       1,440,617       1,467,786       1,429,794  
Allowance for loan losses     (12,604 )     (12,828 )     (12,903 )     (12,959 )     (12,113 )
Total assets     2,037,201       2,033,911       2,018,421       2,035,811       1,963,883  
Non-interest-bearing deposits     312,096       352,266       326,550       312,597       289,552  
Interest-bearing deposits     1,417,355       1,379,497       1,396,220       1,366,205       1,280,456  
Federal Home Loan Bank advances     10,000       10,000       10,000       75,000       125,000  
Total liabilities     1,764,155       1,765,829       1,755,757       1,776,060       1,709,504  
Shareholders' equity   $ 273,046     $ 268,082     $ 262,664     $ 259,751     $ 254,379  
Total shares of common stock outstanding     18,361,922       18,343,403       17,561,476       17,765,124       17,724,721  
Total shares of preferred stock outstanding                 878,048       878,048       878,048  
Book value per share of common stock   $ 14.87     $ 14.61     $ 14.44     $ 14.11     $ 13.84  
Tangible book value per share of common stock *     12.45       12.17       11.87       11.55       11.25  
Market value per common share   $ 16.65     $ 16.58     $ 15.15     $ 14.44     $ 14.73  
Capital ratios:                                        
Total risk based capital     13.45 %     13.46 %     13.29 %     12.64 %     12.84 %
Tier 1 risk based capital     12.73 %     12.71 %     12.53 %     11.9 %     12.13 %
Common equity tier 1 capital     12.73 %     12.71 %     12.01 %     11.4 %     11.61 %
Leverage     11.37 %     11.24 %     11.01 %     10.97 %     11.06 %

_____________________
*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. AND SUBSIDIARY

Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)

Fourth Quarter 2019 Earnings Release

    Five Quarter Comparison  
    12/31/19     9/30/19     6/30/19     3/31/19     12/31/18  
Average Balance Sheet Data:                                        
Cash and cash equivalents   $ 115,100     $ 129,114     $ 93,523     $ 83,689     $ 83,560  
Investment securities     225,265       211,460       228,283       251,631       256,595  
Loans held for sale     140,731       101,835       91,585       66,880       52,131  
Loans     1,431,027       1,445,755       1,469,210       1,461,696       1,439,652  
Assets     2,030,231       2,005,950       2,004,207       1,988,478       1,940,991  
Interest bearing deposits     1,388,496       1,370,988       1,364,211       1,299,205       1,271,602  
Deposits     1,711,021       1,704,873       1,678,240       1,588,317       1,579,250  
Federal Home Loan Bank advances     22,391       12,174       42,088       117,278       102,304  
Liabilities     1,758,663       1,739,509       1,743,010       1,731,373       1,695,181  
Shareholders' equity   $ 271,568     $ 266,441     $ 261,197     $ 257,105     $ 245,811  
Performance Ratios:                                        
Annualized return on average assets     1.06 %     1.28 %     1.15 %     0.97 %     (0.14 )%
Annualized return on average equity     7.92 %     9.63 %     8.84 %     7.54 %     (1.14 )%
Net interest margin (1)     3.49 %     3.66 %     3.68 %     3.75 %     3.89 %
Annualized noninterest income to average assets     1.12 %     1.34 %     1.41 %     0.97 %     1.31 %
Efficiency ratio     68.46 %     64.87 %     68.51 %     67.74 %     98.88 %
Loans by Type (at period end):                                        
Commercial and industrial   $ 394,408     $ 382,816     $ 404,745     $ 419,941     $ 404,600  
Commercial real estate - owner occupied     172,456       169,370       173,316       170,558       141,931  
Commercial real estate - non-owner occupied     387,443       407,378       421,496       403,443       408,515  
Construction and development     143,111       132,222       123,901       162,237       174,670  
Consumer real estate     256,097       254,736       255,043       248,943       253,562  
Consumer     28,426       29,059       26,704       26,241       25,615  
Other     38,161       36,187       35,412       36,423       20,901  
Asset Quality Data:                                        
Allowance for loan losses to total loans     0.89 %     0.91 %     0.90 %     0.88 %     0.85 %
Allowance for loan losses to non-performing loans     861 %     754 %     894 %     757 %     583 %
Nonaccrual loans   $ 1,464     $ 1,701     $ 1,443     $ 1,712     $ 2,078  
Troubled debt restructurings     2,717       2,725       1,238       1,255       1,391  
Loans - over 89 days past due and accruing     38       551       302             214  
Total non-performing loans     1,464       1,701       1,443       1,712       2,078  
OREO and repossessed assets     1,044       914       914       1,038       988  
Total non-performing assets   $ 2,508     $ 2,615     $ 2,357     $ 2,750     $ 3,066  
Non-performing loans to total loans     0.10 %     0.12 %     0.10 %     0.12 %     0.15 %
Non-performing assets to total assets     0.12 %     0.13 %     0.12 %     0.14 %     0.16 %
Non-performing assets to total loans and OREO     0.18 %     0.19 %     0.16 %     0.19 %     0.21 %
Annualized net charge-offs (recoveries) to average loans     0.06 %     (0.01 )%     0.02 %     0.01 %     1.27 %
Net charge-offs (recoveries)   $ 224     $ (50 )   $ 56     $ 40     $ 4,620  
Interest Rates and Yields:                                        
Loans     5.24 %     5.48 %     5.44 %     5.49 %     5.49 %
Securities (1)     3.00 %     3.14 %     3.22 %     3.20 %     3.30 %
Total interest-earning assets (1)     4.67 %     4.95 %     5.00 %     5.06 %     5.02 %
Deposits     1.27 %     1.38 %     1.39 %     1.31 %     1.12 %
Borrowings and repurchase agreements     2.88 %     4.12 %     3.09 %     2.85 %     2.76 %
Total interest-bearing liabilities     1.58 %     1.74 %     1.75 %     1.71 %     1.50 %
Other Information:                                        
Full-time equivalent employees     289       290       290       289       286  

_____________________

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. AND SUBSIDIARY

Analysis of Interest Income and Expense, Rates and Yields (unaudited) (dollars in thousands)

Fourth Quarter 2019 Earnings Release

    For the Three Months Ended December 31,  
    2019     2018  
    Average     Interest     Average     Average     Interest     Average  
Outstanding Income/ Yield/ Outstanding Income/ Yield/
Balance Expense Rate Balance Expense Rate
Interest-Earning Assets                                                
Loans (1)   $ 1,431,027     $ 18,884       5.24 %   $ 1,439,652     $ 19,904       5.49 %
Loans held for sale     140,731       1,349       3.8 %     52,131       650       4.95 %
Securities:                                                
Taxable investment securities (2)     175,750       1,248       2.84 %     198,799       1,592       3.20 %
Investment securities exempt from     49,515       347       3.55 %     57,796       416       3.64 %
  federal income tax (3)
Total securities     225,265       1,595       3.00 %     256,595       2,008       3.30 %
Cash balances in other banks     96,125       377       1.56 %     67,880       330       1.93 %
Funds sold     45             3.75 %     1,047       8       2.92 %
Total interest-earning assets     1,893,193       22,205       4.67 %     1,817,305       22,900       5.02 %
Noninterest-earning assets     137,038                       123,686                  
Total assets   $ 2,030,231                     $ 1,940,991                  
Interest-Bearing Liabilities                                                
Interest-bearing deposits:                                                
Interest-bearing transaction accounts   $ 566,869       2,015       1.41 %   $ 437,656       1,371       1.24 %
Savings and money market deposits     514,896       1,821       1.40 %     496,319       1,619       1.29 %
Time deposits     306,731       1,626       2.10 %     337,628       1,472       1.73 %
Total interest-bearing deposits     1,388,496       5,462       1.56 %     1,271,603       4,462       1.39 %
Borrowings and repurchase agreements     22,391       162       2.88 %     103,655       722       2.76 %
Total interest-bearing liabilities     1,410,887       5,624       1.58 %     1,375,258       5,184       1.50 %
Noninterest-bearing deposits     322,524                       307,648                  
Total funding sources     1,733,411                       1,682,905                  
Noninterest-bearing liabilities     25,252                       12,275                  
Shareholders’ equity     271,568                       245,811                  
Total liabilities and shareholders’ equity   $ 2,030,231                     $ 1,940,991                  
Net interest spread (4)                     3.09 %                     3.53 %
Net interest income/margin (5)           $ 16,581       3.49 %           $ 17,716       3.89 %
                                                 

                                           

(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. AND SUBSIDIARY

Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)

Fourth Quarter 2019 Earnings Release

    Three Months Ended  
    December
31, 2019
    September
30, 2019
    June 30,
2019
    March 31,
2019
    December
31, 2018
 
Operating net income:                                        
Net income (loss)   $ 5,421     $ 6,466     $ 5,756     $ 4,780     $ (708 )
Add: merger related expenses     163       187       1,711       594       8,929  
Less: income tax impact of merger related expenses     (43 )     (49 )     (447 )     (155 )     (1,985 )
Operating net income   $ 5,541     $ 6,604     $ 7,020     $ 5,219     $ 6,236  
                                         
Operating diluted net income per                                        
  share of common stock:
Operating net income   $ 5,541     $ 6,604     $ 7,020     $ 5,219     $ 6,236  
Weighted average shares - diluted     18,443,916       18,532,479       18,650,706       18,830,933       18,716,562  
Operating diluted net income   $ 0.30     $ 0.36     $ 0.38     $ 0.28     $ 0.33  
  per share of common stock
                                         
Operating annualized return on average assets:                                        
Operating net income   $ 5,541     $ 6,604     $ 7,020     $ 5,219     $ 6,236  
Average assets   $ 2,030,231     $ 2,005,950     $ 2,004,207     $ 1,988,478     $ 1,940,991  
Operating annualized return on     1.08 %     1.31 %     1.4 %     1.06 %     1.27 %
  average assets
                                         
Operating annualized return on                                        
  average tangible equity:
Average total shareholders' equity   $ 271,568     $ 266,441     $ 261,197     $ 257,105     $ 245,811  
Less: average intangible assets     (44,646 )     (45,050 )     (45,456 )     (45,890 )     (45,687 )
Average tangible equity     226,922       221,391       215,741       211,215       200,124  
Operating net income   $ 5,541     $ 6,604     $ 7,020     $ 5,219     $ 6,236  
Operating annualized return on     9.69 %     11.83 %     13.05 %     10.02 %     12.36 %
  average tangible equity
                                         
Operating efficiency ratio:                                        
Total noninterest expense   $ 15,266     $ 15,531     $ 16,470     $ 14,725     $ 23,831  
Less: merger related expenses     (163 )     (187 )     (1,711 )     (594 )     (8,929 )
Total operating noninterest expense     15,103       15,344       14,759       14,131       14,902  
Net interest income     16,581       17,156       17,008       17,002       17,715  
Total noninterest income     5,719       6,788       7,032       4,735       6,387  
Total revenues   $ 22,300     $ 23,944     $ 24,040     $ 21,737     $ 24,102  
Operating efficiency ratio:     67.73 %     64.08 %     61.39 %     65.01 %     61.83 %
                                         
    December
31, 2019
    September
30, 2019
    June 30,
2019
    March 31,
2019
    December
31, 2018
 
Tangible Equity:                                        
Total shareholders' equity   $ 273,046     $ 268,082     $ 262,664     $ 259,751     $ 254,379  
Less: intangible assets     (44,393 )     (44,790 )     (45,199 )     (45,618 )     (46,048 )
Tangible equity   $ 228,653     $ 223,292     $ 217,465     $ 214,133     $ 208,331  
                                         
Tangible Common Equity:                                        
Tangible equity   $ 228,653     $ 223,292     $ 217,465     $ 214,133     $ 208,331  
Less: preferred equity                 (9,000 )     (9,000 )     (9,000 )
Tangible common equity   $ 228,653     $ 223,292     $ 208,465     $ 205,133     $ 199,331  
                                         
Tangible Book Value per Share of Common Stock:                                        
Tangible common equity   $ 228,653     $ 223,292     $ 208,465     $ 205,133     $ 199,331  
Total shares of common stock outstanding     18,361,922       18,343,403       17,561,476       17,765,124       17,724,721  
Tangible book value per share of common stock   $ 12.45     $ 12.17     $ 11.87     $ 11.55     $ 11.25  
                                         


CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)

Fourth Quarter 2019 Earnings Release

    Year Ended  
    December 31, 2019
    December 31, 2018
 
Operating net income:                
Net income   $ 22,422     $ 9,655  
Add: merger related expenses     2,654       9,803  
Less: income tax impact of merger related expenses     (694 )     (2,213 )
Operating net income   $ 24,382     $ 17,245  
                 
Operating diluted net income per                
  share of common stock:
Operating net income   $ 24,382     $ 17,245  
Weighted average shares - diluted     18,613,224       14,480,347  
Operating diluted net income   $ 1.31     $ 1.19  
  per share of common stock
                 
Operating annualized return on average assets:                
Operating net income   $ 24,382     $ 17,245  
Average assets   $ 2,007,327     $ 1,528,915  
Operating annualized return on     1.21 %     1.13 %
  average assets
                 
Operating annualized return on                
  average tangible equity:
Average total shareholders' equity   $ 264,124     $ 175,686  
Less: average intangible assets     (45,256 )     (16,174 )
Average tangible equity     218,868       159,512  
Operating net income   $ 24,382     $ 17,245  
Operating annualized return on     11.14 %     10.81 %
  average tangible equity            
                 
Operating efficiency ratio:                
Total noninterest expense   $ 61,995     $ 53,487  
Less: merger related expenses     (2,654 )     (9,803 )
Total operating noninterest expense     59,341       43,684  
Net interest income     67,748       51,692  
Total noninterest income     24,274       15,459  
Total revenues   $ 92,022     $ 67,151  
Operating efficiency ratio:     64.49 %     65.05 %
                 

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Source: CapStar Financial Holdings, Inc.

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