UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2017
OR
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______ to ________.
Commission File Number: 001-37886
CAPSTAR FINANCIAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Tennessee |
81-1527911 |
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
|
|
1201 Demonbreun Street, Suite 700 Nashville, Tennessee (Address of principal executive office) |
37203 (zip code) |
(615) 732-6400
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer |
☐ |
|
Accelerated Filer |
☐ |
Non-Accelerated Filer |
☒ |
(Do not check if a smaller reporting company) |
Smaller Reporting Company |
☐ |
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Emerging Growth Company |
☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 28, 2017, there were 11,241,619 shares of common stock, $1.00 par value per share, issued and outstanding.
CAPSTAR FINANCIAL HOLDINGS, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
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Page |
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PART I – FINANCIAL INFORMATION |
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Item 1. |
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5 |
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Consolidated Balance Sheets as of June 30, 2017 (Unaudited) and December 31, 2016 |
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5 |
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6 |
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7 |
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8 |
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Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2017 and 2016 |
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9 |
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10 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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30 |
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Item 3. |
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41 |
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Item 4. |
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41 |
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42 |
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Item 1. |
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42 |
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Item 1A. |
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42 |
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Item 2. |
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42 |
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Item 6. |
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43 |
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44 |
2
The terms “we,” “our,” “us,” “the Company,” “CSTR” and “CapStar” that appear in this Quarterly Report on Form 10-Q (this “Report”) refer to CapStar Financial Holdings, Inc. and its wholly-owned subsidiary, CapStar Bank. The terms “CapStar Bank,” “the Bank” and “our Bank” that appear in this Report refer to CapStar Bank.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements reflect our current views with respect to, among other things, future events and our 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,” “aspire,” “roadmap,” “achieve,” “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 our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. The inclusion of these forward-looking statements should not be regarded as a representation by us or any other person that such expectations, estimates and projections will be achieved. Accordingly, we caution 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 we believe that the expectations reflected in these forward-looking statements are reasonable as of the date of this Report, 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 our actual results to differ materially from those indicated in these forward-looking statements, including, but are not limited to, the following:
Economic conditions (including interest rate environment, government economic and monetary policies, the strength of global financial markets and inflation and deflation) that impact the financial services industry as a whole and/or our business; the concentration of our business in the Nashville metropolitan statistical area (“MSA”) and the effect of changes in the economic, political and environmental conditions on this market; increased competition in the financial services industry, locally, regionally or nationally, which may adversely affect pricing and the other terms offered to our clients; our dependence on our management team and board of directors and changes in our management and board composition; our reputation in the community; our ability to execute our strategy and to achieve loan and deposit growth through organic growth and strategic acquisitions; credit risks related to the size of our borrowers and our ability to adequately identify, assess and limit our credit risk; our concentration of large loans to a small number of borrowers; the significant portion of our loan portfolio that originated during the past two years and therefore may less reliably predict future collectability than older loans; the adequacy of reserves (including our allowance for loan losses) and the appropriateness of our methodology for calculating such reserves; non-performing loans and leases; non-performing assets; charge-offs, non-accruals, troubled-debt restructurings, impairments and other credit issues; adverse trends in the healthcare service industry, which is an integral component of our market’s economy; our management of risks inherent in our commercial real estate loan portfolio, and the risk of a prolonged downturn in the real estate market, which could impair the value of our collateral and our ability to sell collateral upon any foreclosure; governmental legislation and regulation, including changes in the nature and timing of the adoption and effectiveness of new requirements under the Dodd-Frank Act of 2010, as amended, Basel guidelines, capital requirements, accounting regulation or standards and other applicable laws and regulations; the loss of large depositor relationships, which could force us to fund our business through more expensive and less stable sources; operational and liquidity risks associated with our business, including liquidity risks inherent in correspondent banking; volatility in interest rates and our overall management of interest rate risk, including managing the sensitivity of our interest-earning assets and interest-bearing liabilities to interest rates, and the impact to our earnings from a change in interest rates; the potential for our Bank’s regulatory lending limits and other factors related to our size to restrict our growth and prevent us from effectively implementing our business strategy; strategic acquisitions we may undertake to achieve our goals; the sufficiency of our capital, including sources of capital and the extent to which we may be required to raise additional capital to meet our goals; fluctuations to the fair value of our investment securities that are beyond our control; deterioration in the fiscal position of the U.S. government and downgrades in Treasury and federal agency securities; potential exposure to fraud, negligence, computer theft and cyber-crime; the adequacy of our risk management framework; our dependence on our information technology and telecommunications systems and the potential for any systems failures or interruptions; our dependence upon outside third parties for the processing and handling of our records and data; our ability to adapt to technological change; the financial soundness of other financial institutions; our exposure to environmental liability risk associated with our lending activities; our engagement in derivative transactions; our involvement from time to time in legal proceedings and examinations and remedial actions by regulators; the susceptibility of our market to natural disasters and acts of God; and the effectiveness of our internal controls over financial reporting and our ability to remediate any future material weakness in our internal controls over financial reporting.
3
The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are detailed from time to time in the Company’s periodic and current reports filed with the Securities and Exchange Commission (the “SEC”), including those factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 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 our 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 Report, and we do 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 us to predict their occurrence or how they will affect us.
4
Item 1. Consolidated Financial Statements
CAPSTAR FINANCIAL HOLDINGS, INC. & SUBSIDIARY
(Dollars in thousands, except share data)
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June 30, 2017 |
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(unaudited) |
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December 31, 2016 |
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Assets |
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Cash and due from banks |
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$ |
6,508 |
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$ |
9,134 |
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Interest-bearing deposits in financial institutions |
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41,585 |
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54,323 |
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Federal funds sold |
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— |
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16,654 |
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Total cash and cash equivalents |
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48,093 |
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80,111 |
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Securities available-for-sale, at fair value |
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155,663 |
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182,355 |
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Securities held-to-maturity, fair value of $49,902, and $49,731 at June 30, 2017 and December 31, 2016, respectively |
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46,458 |
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46,864 |
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Loans held for sale |
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73,573 |
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|
42,111 |
|
Loans and leases |
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996,617 |
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935,251 |
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Less allowance for loan and lease losses |
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(12,454 |
) |
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(11,634 |
) |
Loans and leases, net |
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984,163 |
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923,617 |
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Premises and equipment, net |
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6,066 |
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5,350 |
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Restricted equity securities |
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8,292 |
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6,032 |
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Accrued interest receivable |
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3,571 |
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3,942 |
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Goodwill |
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6,219 |
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6,219 |
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Core deposit intangible |
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44 |
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71 |
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Deferred tax assets |
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11,886 |
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12,956 |
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Bank owned life insurance |
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22,189 |
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21,900 |
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Other assets |
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5,409 |
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2,147 |
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Total assets |
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$ |
1,371,626 |
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$ |
1,333,675 |
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Liabilities and Shareholders’ Equity |
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Deposits: |
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Non-interest-bearing |
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$ |
231,169 |
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$ |
197,788 |
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Interest-bearing |
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321,153 |
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299,621 |
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Savings and money market accounts |
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376,130 |
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|
447,686 |
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Time |
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192,533 |
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183,628 |
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Total deposits |
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1,120,985 |
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|
1,128,723 |
|
Federal Home Loan Bank advances |
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105,000 |
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55,000 |
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Accrued interest payable |
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286 |
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|
|
212 |
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Other liabilities |
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7,325 |
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10,533 |
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Total liabilities |
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1,233,596 |
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1,194,468 |
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Shareholders’ equity: |
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|
|
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Series A convertible preferred stock, $1 par value; 5,000,000 shares authorized; 878,049 shares issued and outstanding at June 30, 2017 and December 31, 2016 |
|
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878 |
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|
878 |
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Common stock, voting, $1 par value; 20,000,000 shares authorized; 11,235,255 and 11,204,515 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively |
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11,235 |
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11,205 |
|
Additional paid-in capital |
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116,556 |
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116,143 |
|
Retained earnings |
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14,122 |
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17,132 |
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Accumulated other comprehensive loss, net of income tax |
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|
(4,761 |
) |
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|
(6,151 |
) |
Total shareholders’ equity |
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138,030 |
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|
139,207 |
|
Total liabilities and shareholders’ equity |
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$ |
1,371,626 |
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|
$ |
1,333,675 |
|
See accompanying notes to consolidated financial statements (unaudited).
5
CAPSTAR FINANCIAL HOLDINGS, INC. & SUBSIDIARY
Consolidated Statements of Income (Loss) (Unaudited)
(Dollars in thousands, except share data)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2017 |
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2016 |
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2017 |
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2016 |
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Interest income: |
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|
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|
|
|
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Loans, including fees |
|
$ |
11,373 |
|
|
$ |
9,605 |
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|
$ |
21,840 |
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|
$ |
18,873 |
|
Securities: |
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|
|
|
|
|
|
|
|
|
|
|
|
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Taxable |
|
|
983 |
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|
|
911 |
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|
|
1,987 |
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|
|
1,810 |
|
Tax-exempt |
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|
317 |
|
|
|
268 |
|
|
|
642 |
|
|
|
549 |
|
Federal funds sold |
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16 |
|
|
|
4 |
|
|
|
18 |
|
|
|
9 |
|
Restricted equity securities |
|
|
86 |
|
|
|
70 |
|
|
|
163 |
|
|
|
139 |
|
Interest-bearing deposits in financial institutions |
|
|
115 |
|
|
|
56 |
|
|
|
219 |
|
|
|
133 |
|
Total interest income |
|
|
12,890 |
|
|
|
10,914 |
|
|
|
24,869 |
|
|
|
21,513 |
|
Interest expense: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
|
586 |
|
|
|
390 |
|
|
|
1,204 |
|
|
|
692 |
|
Savings and money market accounts |
|
|
773 |
|
|
|
719 |
|
|
|
1,587 |
|
|
|
1,451 |
|
Time deposits |
|
|
574 |
|
|
|
506 |
|
|
|
1,046 |
|
|
|
1,020 |
|
Federal funds purchased |
|
|
7 |
|
|
|
6 |
|
|
|
11 |
|
|
|
8 |
|
Securities sold under agreements to repurchase |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Federal Home Loan Bank advances |
|
|
379 |
|
|
|
92 |
|
|
|
519 |
|
|
|
183 |
|
Total interest expense |
|
|
2,319 |
|
|
|
1,713 |
|
|
|
4,367 |
|
|
|
3,355 |
|
Net interest income |
|
|
10,571 |
|
|
|
9,201 |
|
|
|
20,502 |
|
|
|
18,158 |
|
Provision for loan losses |
|
|
9,690 |
|
|
|
183 |
|
|
|
13,094 |
|
|
|
1,120 |
|
Net interest income after provision for loan losses |
|
|
881 |
|
|
|
9,018 |
|
|
|
7,408 |
|
|
|
17,038 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
|
342 |
|
|
|
303 |
|
|
|
670 |
|
|
|
529 |
|
Loan commitment fees |
|
|
187 |
|
|
|
142 |
|
|
|
423 |
|
|
|
572 |
|
Net gain on sale of securities |
|
|
40 |
|
|
|
86 |
|
|
|
34 |
|
|
|
125 |
|
Tri-Net fees |
|
|
297 |
|
|
|
— |
|
|
|
382 |
|
|
|
— |
|
Mortgage banking income |
|
|
1,370 |
|
|
|
1,655 |
|
|
|
2,587 |
|
|
|
3,002 |
|
Other noninterest income |
|
|
430 |
|
|
|
382 |
|
|
|
703 |
|
|
|
711 |
|
Total noninterest income |
|
|
2,666 |
|
|
|
2,568 |
|
|
|
4,799 |
|
|
|
4,939 |
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
4,784 |
|
|
|
4,938 |
|
|
|
9,870 |
|
|
|
10,156 |
|
Data processing and software |
|
|
711 |
|
|
|
635 |
|
|
|
1,331 |
|
|
|
1,203 |
|
Professional fees |
|
|
350 |
|
|
|
426 |
|
|
|
714 |
|
|
|
757 |
|
Occupancy |
|
|
539 |
|
|
|
371 |
|
|
|
987 |
|
|
|
781 |
|
Equipment |
|
|
544 |
|
|
|
436 |
|
|
|
1,040 |
|
|
|
843 |
|
Regulatory fees |
|
|
301 |
|
|
|
265 |
|
|
|
608 |
|
|
|
492 |
|
Other operating |
|
|
988 |
|
|
|
880 |
|
|
|
2,042 |
|
|
|
1,729 |
|
Total noninterest expense |
|
|
8,217 |
|
|
|
7,951 |
|
|
|
16,592 |
|
|
|
15,961 |
|
Income (loss) before income taxes |
|
|
(4,670 |
) |
|
|
3,635 |
|
|
|
(4,385 |
) |
|
|
6,016 |
|
Income tax expense (benefit) |
|
|
(1,328 |
) |
|
|
1,159 |
|
|
|
(1,375 |
) |
|
|
1,956 |
|
Net income (loss) |
|
$ |
(3,342 |
) |
|
$ |
2,476 |
|
|
$ |
(3,010 |
) |
|
$ |
4,060 |
|
Per share information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share of common stock |
|
$ |
(0.30 |
) |
|
$ |
0.29 |
|
|
$ |
(0.27 |
) |
|
$ |
0.47 |
|
Diluted net income (loss) per share of common stock |
|
$ |
(0.26 |
) |
|
$ |
0.23 |
|
|
$ |
(0.24 |
) |
|
$ |
0.38 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
11,226,216 |
|
|
|
8,682,438 |
|
|
|
11,218,624 |
|
|
|
8,655,561 |
|
Diluted |
|
|
12,740,104 |
|
|
|
10,675,916 |
|
|
|
12,761,989 |
|
|
|
10,624,004 |
|
See accompanying notes to consolidated financial statements (unaudited).
6
CAPSTAR FINANCIAL HOLDINGS, INC. & SUBSIDIARY
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(Dollars in thousands)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||
Net income (loss) |
|
$ |
(3,342 |
) |
|
$ |
2,476 |
|
|
$ |
(3,010 |
) |
|
$ |
4,060 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on securities available-for-sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized holding gains arising during the period |
|
|
1,333 |
|
|
|
1,435 |
|
|
|
1,908 |
|
|
|
3,573 |
|
Reclassification adjustment for gains included in net income |
|
|
(40 |
) |
|
|
(86 |
) |
|
|
(34 |
) |
|
|
(125 |
) |
Tax effect |
|
|
(495 |
) |
|
|
(517 |
) |
|
|
(717 |
) |
|
|
(1,320 |
) |
Net of tax |
|
|
798 |
|
|
|
832 |
|
|
|
1,157 |
|
|
|
2,128 |
|
Unrealized losses on securities transferred to held-to-maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification adjustment for losses included in net income |
|
|
42 |
|
|
|
42 |
|
|
|
83 |
|
|
|
83 |
|
Tax effect |
|
|
(16 |
) |
|
|
(16 |
) |
|
|
(32 |
) |
|
|
(32 |
) |
Net of tax |
|
|
26 |
|
|
|
26 |
|
|
|
51 |
|
|
|
51 |
|
Unrealized gains (losses) on cash flow hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized holding losses arising during the period |
|
|
(211 |
) |
|
|
(344 |
) |
|
|
(213 |
) |
|
|
(1,846 |
) |
Reclassification adjustment for losses included in net income |
|
|
158 |
|
|
|
87 |
|
|
|
313 |
|
|
|
173 |
|
Tax effect |
|
|
81 |
|
|
|
132 |
|
|
|
82 |
|
|
|
707 |
|
Net of tax |
|
|
28 |
|
|
|
(125 |
) |
|
|
182 |
|
|
|
(966 |
) |
Other comprehensive income |
|
|
852 |
|
|
|
733 |
|
|
|
1,390 |
|
|
|
1,213 |
|
Comprehensive income (loss) |
|
$ |
(2,490 |
) |
|
$ |
3,209 |
|
|
$ |
(1,620 |
) |
|
$ |
5,273 |
|
See accompanying notes to consolidated financial statements (unaudited).
7
CAPSTAR FINANCIAL HOLDINGS, INC. & SUBSIDIARY
Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)
(Dollars in thousands, except share data)
|
|
Preferred |
|
|
Common Stock |
|
|
Additional paid-in |
|
|
Retained |
|
|
Accumulated other comprehensive |
|
|
Total shareholders’ |
|
||||||||||
|
|
stock |
|
|
Shares |
|
|
Amount |
|
|
capital |
|
|
earnings |
|
|
loss |
|
|
equity |
|
|||||||
Balance December 31, 2015 |
|
$ |
1,610 |
|
|
|
8,577,051 |
|
|
$ |
8,577 |
|
|
$ |
95,277 |
|
|
$ |
8,036 |
|
|
$ |
(4,914 |
) |
|
$ |
108,586 |
|
Issuance of restricted common stock, net of forfeitures and withholdings to satisfy employee tax obligations |
|
|
— |
|
|
|
105,851 |
|
|
|
106 |
|
|
|
(106 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
431 |
|
|
|
— |
|
|
|
— |
|
|
|
431 |
|
Excess tax benefit from stock compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
18 |
|
|
|
— |
|
|
|
— |
|
|
|
18 |
|
Exercise of common stock warrants |
|
|
— |
|
|
|
1,000 |
|
|
|
1 |
|
|
|
9 |
|
|
|
— |
|
|
|
— |
|
|
|
10 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,060 |
|
|
|
— |
|
|
|
4,060 |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,213 |
|
|
|
1,213 |
|
Balance June 30, 2016 |
|
$ |
1,610 |
|
|
|
8,683,902 |
|
|
$ |
8,684 |
|
|
$ |
95,629 |
|
|
$ |
12,096 |
|
|
$ |
(3,701 |
) |
|
$ |
114,318 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2016 |
|
$ |
878 |
|
|
|
11,204,515 |
|
|
$ |
11,205 |
|
|
$ |
116,143 |
|
|
$ |
17,132 |
|
|
$ |
(6,151 |
) |
|
$ |
139,207 |
|
Issuance of restricted common stock, net of forfeitures and withholdings to satisfy employee tax obligations |
|
|
— |
|
|
|
4,244 |
|
|
|
4 |
|
|
|
(215 |
) |
|
|
— |
|
|
|
— |
|
|
|
(211 |
) |
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
484 |
|
|
|
— |
|
|
|
— |
|
|
|
484 |
|
Exercise of employee common stock options |
|
|
— |
|
|
|
15,117 |
|
|
|
15 |
|
|
|
65 |
|
|
|
— |
|
|
|
— |
|
|
|
80 |
|
Exercise of common stock warrants |
|
|
— |
|
|
|
11,379 |
|
|
|
11 |
|
|
|
79 |
|
|
|
— |
|
|
|
— |
|
|
|
90 |
|
Net income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,010 |
) |
|
|
— |
|
|
|
(3,010 |
) |
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,390 |
|
|
|
1,390 |
|
Balance June 30, 2017 |
|
$ |
878 |
|
|
|
11,235,255 |
|
|
$ |
11,235 |
|
|
$ |
116,556 |
|
|
$ |
14,122 |
|
|
$ |
(4,761 |
) |
|
$ |
138,030 |
|
See accompanying notes to consolidated financial statements (unaudited).
8
CAPSTAR FINANCIAL HOLDINGS, INC. & SUBSIDIARY
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
|
|
Six Months Ended |
|
|||||
|
|
June 30, |
|
|||||
|
|
2017 |
|
|
2016 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(3,010 |
) |
|
$ |
4,060 |
|
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Provision for loan and lease losses |
|
|
13,094 |
|
|
|
1,120 |
|
Accretion of discounts on acquired loans and deferred fees |
|
|
(274 |
) |
|
|
(751 |
) |
Depreciation and amortization |
|
|
232 |
|
|
|
223 |
|
Net amortization of premiums on investment securities |
|
|
663 |
|
|
|
680 |
|
Securities gains, net |
|
|
(34 |
) |
|
|
(125 |
) |
Mortgage banking income |
|
|
(2,587 |
) |
|
|
(3,002 |
) |
Tri-Net fees |
|
|
(382 |
) |
|
|
— |
|
Net gain on sale of loans |
|
|
(66 |
) |
|
|
— |
|
Net loss on disposal of premises and equipment |
|
|
137 |
|
|
|
— |
|
Net gain on sale of other real estate owned |
|
|
— |
|
|
|
(157 |
) |
Stock-based compensation |
|
|
484 |
|
|
|
431 |
|
Excess tax benefit from stock compensation |
|
|
— |
|
|
|
(18 |
) |
Deferred income tax expense |
|
|
402 |
|
|
|
510 |
|
Origination of loans held for sale |
|
|
(267,954 |
) |
|
|
(236,915 |
) |
Proceeds from loans held for sale |
|
|
239,527 |
|
|
|
215,809 |
|
Net increase in accrued interest receivable and other assets |
|
|
(3,107 |
) |
|
|
(2,004 |
) |
Net increase in accrued interest payable and other liabilities |
|
|
(3,108 |
) |
|
|
(878 |
) |
Net cash used in operating activities |
|
|
(25,983 |
) |
|
|
(21,017 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Activities in securities available for sale: |
|
|
|
|
|
|
|
|
Purchases |
|
|
(11,754 |
) |
|
|
(39,528 |
) |
Sales |
|
|
29,968 |
|
|
|
34,139 |
|
Maturities, prepayments and calls |
|
|
9,762 |
|
|
|
10,369 |
|
Activities in securities held to maturity: |
|
|
|
|
|
|
|
|
Maturities, prepayments and calls |
|
|
451 |
|
|
|
806 |
|
Purchase of restricted equity securities |
|
|
(2,260 |
) |
|
|
(104 |
) |
Net increase in loans |
|
|
(73,366 |
) |
|
|
(83,746 |
) |
Purchase of premises and equipment |
|
|
(1,060 |
) |
|
|
(44 |
) |
Proceeds from the sale of premises and equipment |
|
|
3 |
|
|
|
— |
|
Proceeds from sale of other real estate |
|
|
— |
|
|
|
373 |
|
Net cash used in investing activities |
|
|
(48,256 |
) |
|
|
(77,735 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Net (decrease) increase in deposits |
|
|
(7,738 |
) |
|
|
104,840 |
|
Proceeds from Federal Home Loan Bank advances |
|
|
60,000 |
|
|
|
— |
|
Payments on Federal Home Loan Bank advances |
|
|
(10,000 |
) |
|
|
(5,000 |
) |
Exercise of common stock options and warrants, net of repurchase of restricted shares |
|
|
(41 |
) |
|
|
10 |
|
Excess tax benefit from stock compensation |
|
|
— |
|
|