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CapStar Financial Holdings, Inc. Reports Second Quarter 2020 Results
Strong Pre-tax Pre-provision Income led by Record Mortgage Results

NASHVILLE, Tenn., July 23, 2020 (GLOBE NEWSWIRE) -- CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) today reported second quarter net income of $6.2 million and pre-tax pre-provision income of $9.6 million.  Diluted earnings per share were $0.34, an increase of $0.03 from the second quarter of 2019. Excluding merger-related charges, diluted operating(1) earnings per share were $0.36, a decline of $0.02 from the second quarter of 2019. Return on average assets and return on average equity for the second quarter of 2020 were 1.06% and 8.83%, respectively.  On an operating basis, return on average assets was 1.11% and return on average tangible common equity was 11.02%.  Net income for the quarter included provision for loan losses of $1.6 million, severance expense of $1.4 million, and merger related expenses of $448,000.

“I am proud of the CapStar team for their remarkable dedication during an extremely challenging operating environment,” said Timothy K. Schools, CapStar’s president and CEO.  “In keeping with our vision, mission and values, we have been unwavering in our commitment to support our employees, clients and communities through the public health crisis. Our non-financial center work force mobilized to working 100% remotely and continues to provide outstanding service. Importantly, we prioritized client assistance by offering loan deferrals and took a leadership position in facilitating PPP loans to protect all local business – both clients and non-clients – as they navigate the challenges presented by COVID-19.  Our inclusive and response-driven approach is supporting our communities and presents the prospect for many new and expanded relationships.”

“In the second quarter, we delivered solid financial results with strong pre-tax pre-provision revenue led by our mortgage and Tri-Net divisions,” continued Schools.  “During the quarter, we saw a significant rise in both loans related to PPP and in deposits which will bring short-term compression to our net interest margin and we continued to actively monitor our portfolio to identify potential weaknesses.  On July 1, we completed our merger with The Bank of Waynesboro and The First National Bank of Manchester, creating an approximately $3 billion financial institution which will enhance our funding profile, diversify our loan portfolio, expand our geographic reach, and improve our net interest margin, efficiency ratio, and return on assets."

Soundness

  • Allowance for loan losses to total loans was 1.32% at June 30, 2020 compared to 0.90% at June 30, 2019.
  • Annualized net charge-offs to average loans were 0.18% for the three months ended June 30, 2020 compared to 0.02% for the same period in 2019.
  • Non-performing assets to total loans and OREO were 0.20% at June 30, 2020 compared to 0.16% at June 30, 2019.
  • The leverage ratio was 10.08% at June 30, 2020 compared to 11.01% at June 30, 2019.
  • The total risk based capital ratio was 16.76% at June 30, 2020 compared to 13.29% at June 30, 2019.                                                            

Profitability

  • Operating annualized return on average assets for the three months ended June 30, 2020 was 1.11% compared to 1.40% for the same period in 2019.
  • Operating annualized return on average tangible equity for the three months ended June 30, 2020 was 11.02% compared to 13.05% for the same period in 2019.
  • Net interest margin for the three months ended June 30, 2020 was 3.23% compared to 3.68% for the same period in 2019; approximately 17 bps of the decline is attributed to the impact of PPP loans and an increase in cash due to significant deposit growth during the quarter.
  • The operating efficiency ratio for the three months ended June 30, 2020 was 64.87% compared to 61.39% for the same period in 2019.
  • Operating annualized pre-tax pre-provision income to average assets for the three months ended June 30, 2020 was 1.71% compared to 1.86% for the same period in 2019.

Growth

  • Average deposits for the quarter ended June 30, 2020 increased 21.1% to $2.03 billion, compared to $1.68 billion for the same period in 2019.
  • Average gross loans for the quarter ended June 30, 2020 increased 6.3% to $1.56 billion, compared to $1.47 billion for the same period in 2019.
  • Pre-tax pre-provision earnings for the quarter ended June 30, 2020 increased 26.3% to $9.6 million, compared to $7.6 million for the quarter ended June 30, 2019.
  • Tangible book value per share for the quarter ended June 30, 2020 increased 9.7% to $13.02, compared to $11.87 for the quarter ended June 30, 2019.

Dividend

On July 23, 2020, the board of directors of CapStar approved a quarterly dividend of $0.05 per common share that will be paid on August 27, 2020 to shareholders of record of CapStar’s common stock as of the close of business on August 13, 2020.

Conference Call and Webcast Information

CapStar will host a conference call and webcast at 9:00 a.m. Central Time on Friday, July 24, 2020. During the call, management will review the second quarter results and operational highlights. Interested parties may listen to the call by dialing (844) 412-1002. The conference ID number is 4376815. 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 June 30, 2020, on a consolidated basis, CapStar had total assets of $2.45 billion, gross loans of $1.59 billion, total deposits of $2.10 billion, and shareholders’ equity of $282.0 million. Visit www.capstarbank.com for more information.

FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements, as defined by federal securities laws, including statements about CapStar and its financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of our operations and future financial performance. Our operations and such performance involves risks and uncertainties, including but in no way limited to the effect of the COVID-19 pandemic, that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to CapStar’s filings with the Securities and Exchange Commission, including its 2019 Annual Report on Form 10-K under the sections entitled “Forward-Looking Statements” and “Item 1A Risk Factors.”  Forward-looking statements speak only as of the date they are made, and except as otherwise required by applicable law, we undertake no obligation to update or revise forward-looking statements.

NON-GAAP MEASURES
This release includes financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations. Such measures include: “Efficiency ratio – operating,” “Expenses – operating,” “Earnings per share – operating,” “Diluted earnings per share – operating,” “Tangible book value per share,” “Return on common equity – operating,” “Return on tangible common equity – operating,” “Return on assets – operating,” and “Tangible common equity to tangible assets.”

Management has included these non-GAAP measures because it believes these measures may provide useful supplemental information for evaluating CapStar’s underlying performance trends. Further, management uses these measures in managing and evaluating CapStar’s business and intends to refer to them in discussions about our operations and performance. Operating performance measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in the ‘Non-GAAP Reconciliation Tables’ included in the exhibits to this presentation.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Income (unaudited) (dollars in thousands, except share data)
Second quarter 2020 Earnings Release

    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2020     2019     2020     2019  
Interest income:                                
Loans, including fees   $ 19,086     $ 20,999     $ 38,823     $ 41,591  
Securities:                                
Taxable     1,096       1,165       2,272       2,512  
Tax-exempt     312       363       633       739  
Federal funds sold           6             25  
Restricted equity securities     140       214       282       401  
Interest-bearing deposits in financial institutions     107       411       469       857  
Total interest income     20,741       23,158       42,479       46,125  
Interest expense:                                
Interest-bearing deposits     831       1,827       2,732       3,420  
Savings and money market accounts     731       1,782       2,283       3,500  
Time deposits     1,416       2,217       2,897       4,030  
Federal funds purchased                       4  
Securities sold under agreements to repurchase                       5  
Federal Home Loan Bank advances     88       324       231       1,156  
Total interest expense     3,066       6,150       8,143       12,115  
Net interest income     17,675       17,008       34,336       34,010  
Provision for loan losses     1,624             9,177       886  
Net interest income after provision for loan losses     16,051       17,008       25,159       33,124  
Noninterest income:                                
Treasury management and other deposit service charges     691       813       1,466       1,611  
Net gain (loss) on sale of securities     13       (121 )     40       (108 )
Tri-Net fees     1,260       1,024       1,860       1,664  
Mortgage banking income     7,123       3,087       9,376       4,472  
Wealth management fees     374       334       781       639  
Interchange and debit card transaction fees     729       991       1,454       1,569  
Other noninterest income     633       904       1,720       1,920  
Total noninterest income     10,823       7,032       16,697       11,767  
Noninterest expense:                                
Salaries and employee benefits     12,305       8,563       20,307       16,995  
Data processing and software     2,100       1,862       3,964       3,336  
Professional fees     581       501       1,216       1,043  
Occupancy     797       809       1,616       1,692  
Equipment     680       1,026       1,431       1,878  
Regulatory fees     333       272       496       546  
Merger related expenses     448       1,711       738       2,305  
Amortization of intangibles     375       419       761       850  
Other operating     1,315       1,307       2,616       2,551  
Total noninterest expense     18,934       16,470       33,145       31,196  
Income before income taxes     7,940       7,570       8,711       13,695  
Income tax expense     1,759       1,814       1,184       3,160  
Net income   $ 6,181     $ 5,756     $ 7,527     $ 10,535  
Per share information:                                
Basic net income per share of common stock   $ 0.34     $ 0.33     $ 0.41     $ 0.59  
Diluted net income per share of common stock   $ 0.34     $ 0.31     $ 0.41     $ 0.56  
Weighted average shares outstanding:                                
Basic     18,307,083       17,663,992       18,349,998       17,723,286  
Diluted     18,320,006       18,650,706       18,381,866       18,740,322  

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)
Second quarter 2020 Earnings Release

    Five Quarter Comparison  
    6/30/20     3/31/20     12/31/19     9/30/19     6/30/19  
Income Statement Data:                                        
Net interest income   $ 17,675     $ 16,661     $ 16,581     $ 17,156     $ 17,008  
Provision for loan losses     1,624       7,553             (125 )      
Net interest income after provision for loan losses     16,051       9,108       16,581       17,281       17,008  
Treasury management and other deposit service charges     691       775       736       788       813  
Net gain (loss) on sale of securities     13       27       9             (121 )
Tri-Net fees     1,260       599       274       847       1,024  
Mortgage banking income     7,123       2,253       2,316       2,679       3,087  
Wealth management fees     374       407       407       379       334  
Interchange and debit card transaction fees     729       724       928       754       991  
Other noninterest income     633       1,089       1,049       1,341       904  
Total noninterest income     10,823       5,874       5,719       6,788       7,032  
Salaries and employee benefits     12,305       8,002       9,318       9,229       8,563  
Data processing and software     2,100       1,864       1,835       1,790       1,862  
Professional fees     581       636       531       528       501  
Occupancy     797       820       795       858       809  
Equipment     680       751       834       1,012       1,026  
Regulatory fees     333       163       28       18       272  
Merger related expenses     448       290       163       187       1,711  
Amortization of intangibles     375       386       397       408       419  
Other operating     1,315       1,299       1,365       1,501       1,307  
Total noninterest expense     18,934       14,211       15,266       15,531       16,470  
Net income before income tax expense     7,940       771       7,034       8,538       7,570  
Income tax (benefit) expense     1,759       (575 )     1,613       2,072       1,814  
Net income   $ 6,181     $ 1,346     $ 5,421     $ 6,466     $ 5,756  
Weighted average shares - basic     18,307,083       18,392,913       18,350,994       17,741,778       17,663,992  
Weighted average shares - diluted     18,320,006       18,443,725       18,443,916       18,532,479       18,650,706  
Net income per share, basic   $ 0.34     $ 0.07     $ 0.30     $ 0.36     $ 0.33  
Net income per share, diluted     0.34       0.07       0.29       0.35       0.31  
Balance Sheet Data (at period end):                                        
Cash and cash equivalents   $ 368,820     $ 91,450     $ 101,269     $ 154,021     $ 156,085  
Securities available-for-sale     223,034       219,213       213,129       203,500       194,957  
Securities held-to-maturity     2,699       3,306       3,313       3,319       3,721  
Loans held for sale     129,807       186,937       168,222       129,613       89,629  
Total loans     1,592,725       1,446,835       1,420,102       1,411,768       1,440,617  
Allowance for loan losses     (21,035 )     (20,114 )     (12,604 )     (12,828 )     (12,903 )
Total assets     2,445,172       2,072,585       2,037,201       2,033,911       2,018,421  
Non-interest-bearing deposits     546,974       442,789       312,096       352,266       326,550  
Interest-bearing deposits     1,548,591       1,320,920       1,417,355       1,379,497       1,396,220  
Federal Home Loan Bank advances and other borrowings     39,464       10,000       10,000       10,000       10,000  
Total liabilities     2,163,222       1,796,795       1,764,155       1,765,829       1,755,757  
Shareholders' equity   $ 281,950     $ 275,790     $ 273,046     $ 268,082     $ 262,664  
Total shares of common stock outstanding     18,302,188       18,307,802       18,361,922       18,343,403       17,561,476  
Total shares of preferred stock outstanding                             878,048  
Book value per share of common stock   $ 15.41     $ 15.06     $ 14.87     $ 14.61     $ 14.44  
Tangible book value per share of common stock*     13.02       12.66       12.45       12.17       11.87  
Market value per share of common stock   $ 12.00     $ 9.89     $ 16.65     $ 16.58     $ 15.15  
Capital ratios:                                        
Total risk based capital     16.76 %     13.68 %     13.45 %     13.46 %     13.29 %
Tier 1 risk based capital     13.76 %     12.56 %     12.73 %     12.71 %     12.53 %
Common equity tier 1 capital     13.76 %     12.56 %     12.73 %     12.71 %     12.01 %
Leverage     10.08 %     11.23 %     11.37 %     11.24 %     11.01 %

_____________________
*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)
Second quarter 2020 Earnings Release

     Five Quarter Comparison  
    6/30/20     3/31/20     12/31/19     9/30/19     6/30/19  
Average Balance Sheet Data:                                        
Cash and cash equivalents   $ 257,709     $ 114,272     $ 115,100     $ 129,114     $ 93,523  
Investment securities     238,762       226,537       225,265       211,460       228,283  
Loans held for sale     176,193       180,401       140,731       101,835       91,585  
Loans     1,560,626       1,421,256       1,431,027       1,445,755       1,469,210  
Assets     2,350,021       2,059,306       2,030,231       2,005,950       2,004,207  
Interest bearing deposits     1,519,877       1,411,666       1,388,496       1,370,988       1,364,211  
Deposits     2,031,924       1,735,635       1,711,021       1,704,873       1,678,240  
Federal Home Loan Bank advances and other borrowings     10,966       20,989       22,391       12,174       42,088  
Liabilities     2,068,408       1,780,756       1,758,663       1,739,509       1,743,010  
Shareholders' equity     281,614       278,550       271,568       266,441       261,197  
Performance Ratios:                                        
Annualized return on average assets     1.06 %     0.26 %     1.06 %     1.28 %     1.15 %
Annualized return on average equity     8.83 %     1.94 %     7.92 %     9.63 %     8.84 %
Net interest margin (1)     3.23 %     3.50 %     3.49 %     3.66 %     3.68 %
Annualized Noninterest income to average assets     1.85 %     1.15 %     1.12 %     1.34 %     1.41 %
Efficiency ratio     66.44 %     63.06 %     68.46 %     64.87 %     68.51 %
Loans by Type (at period end):                                        
Commercial and industrial   $ 621,541     $ 447,311     $ 394,408     $ 382,816     $ 404,745  
Commercial real estate - owner occupied     147,682       166,652       172,456       169,370       173,316  
Commercial real estate - non-owner occupied     408,402       378,170       387,443       407,378       421,496  
Construction and development     117,830       141,087       143,111       132,222       123,901  
Consumer real estate     238,696       248,243       256,097       254,736       255,043  
Consumer     27,542       27,739       28,426       29,059       26,704  
Other     31,032       37,633       38,161       36,187       35,412  
Asset Quality Data:                                        
Allowance for loan losses to total loans     1.32 %     1.39 %     0.89 %     0.91 %     0.90 %
Allowance for loan losses to non-performing loans     705 %     550 %     861 %     754 %     894 %
Nonaccrual loans   $ 2,982     $ 3,658     $ 1,464     $ 1,701     $ 1,443  
Troubled debt restructurings     1,228       1,306       2,717       2,725       1,238  
Loans - over 89 days past due and accruing     639       399       38       551       302  
Total non-performing loans     2,982       3,658       1,464       1,701       1,443  
OREO and repossessed assets     147       147       1,044       914       914  
Total non-performing assets     3,129       3,805       2,508       2,615       2,357  
Non-performing loans to total loans     0.19 %     0.25 %     0.10 %     0.12 %     0.10 %
Non-performing assets to total assets     0.13 %     0.18 %     0.12 %     0.13 %     0.12 %
Non-performing assets to total loans and OREO     0.20 %     0.26 %     0.18 %     0.19 %     0.16 %
Annualized net charge-offs (recoveries) to average loans     0.18 %     0.01 %     0.06 %     (0.01 )%     0.02 %
Net charge-offs (recoveries)   $ 703     $ 43     $ 224     $ (50 )   $ 56  
Interest Rates and Yields:                                        
Loans     4.50 %     5.10 %     5.24 %     5.48 %     5.44 %
Securities (1)     2.73 %     3.04 %     3.00 %     3.14 %     3.22 %
Total interest-earning assets (1)     3.78 %     4.56 %     4.67 %     4.95 %     5.00 %
Deposits     0.59 %     1.14 %     1.27 %     1.38 %     1.39 %
Borrowings and repurchase agreements     3.16 %     2.77 %     2.88 %     4.12 %     3.09 %
Total interest-bearing liabilities     0.81 %     1.43 %     1.58 %     1.74 %     1.75 %
Other Information:                                        
Full-time equivalent employees     286       288       289       290       290  

_____________________

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)
Second quarter 2020 Earnings Release

     For the Three Months Ended June 30,  
    2020     2019  
    Average
Outstanding
Balance
    Interest
Income/
Expense
    Average
Yield/
Rate
    Average
Outstanding
Balance
    Interest
Income/
Expense
    Average
Yield/
Rate
 
Interest-Earning Assets                                                
Loans (1)   $ 1,560,626     $ 17,459       4.50 %   $ 1,469,210     $ 19,931       5.44 %
Loans held for sale     176,193       1,627       3.71 %     91,585       1,068       4.68 %
Securities:                                                
Taxable investment securities (2)     194,876       1,236       2.54 %     175,742       1,379       3.14 %
Investment securities exempt from
  federal income tax (3)
    43,886       312       3.60 %     52,541       363       3.50 %
Total securities     238,762       1,548       2.73 %     228,283       1,742       3.22 %
Cash balances in other banks     237,738       107       0.18 %     75,485       411       2.18 %
Funds sold     1             1.27 %     767       6       2.96 %
Total interest-earning assets     2,213,320       20,741       3.78 %     1,865,330       23,158       5.00 %
Noninterest-earning assets     136,701                       138,877                  
Total assets   $ 2,350,021                     $ 2,004,207                  
Interest-Bearing Liabilities                                                
Interest-bearing deposits:                                                
Interest-bearing transaction accounts   $ 691,063       831       0.48 %   $ 467,326       1,827       1.57 %
Savings and money market deposits     492,682       731       0.60 %     479,012       1,782       1.49 %
Time deposits     336,132       1,416       1.69 %     417,873       2,217       2.13 %
Total interest-bearing deposits     1,519,877       2,978       0.79 %     1,364,211       5,826       1.71 %
Borrowings and repurchase agreements     11,131       88       3.16 %     42,117       324       3.09 %
Total interest-bearing liabilities     1,531,008       3,066       0.81 %     1,406,328       6,150       1.75 %
Noninterest-bearing deposits     512,046                       314,029                  
Total funding sources     2,043,054                       1,720,357                  
Noninterest-bearing liabilities     25,353                       22,653                  
Shareholders’ equity     281,614                       261,197                  
Total liabilities and shareholders’ equity   $ 2,350,021                     $ 2,004,207                  
Net interest spread (4)                     2.98 %                     3.25 %
Net interest income/margin (5)           $ 17,675       3.23 %           $ 17,008       3.68 %

                                               

  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)
Second quarter 2020 Earnings Release

    Three Months Ended  
    June 30,
2020
    March 31,
2020
    December 31,
2019
    September 30,
2019
    June 30,
2019
 
Operating net income:                                        
Net income   $ 6,181     $ 1,346     $ 5,421     $ 6,466     $ 5,756  
Add:  merger related expenses     448       290       163       187       1,711  
Less: income tax impact of merger related expenses     (117 )     (76 )     (43 )     (49 )     (447 )
Operating net income   $ 6,512     $ 1,560     $ 5,541     $ 6,604     $ 7,020  
                                         
Operating diluted net income per
  share of common stock:
                                       
Operating net income   $ 6,512     $ 1,560     $ 5,541     $ 6,604     $ 7,020  
Weighted average shares - diluted     18,320,006       18,443,725       18,443,916       18,532,479       18,650,706  
Operating diluted net income
  per share of common stock
  $ 0.36     $ 0.08     $ 0.30     $ 0.36     $ 0.38  
                                         
Operating annualized return on average assets:                                        
Operating net income   $ 6,512     $ 1,560     $ 5,541     $ 6,604     $ 7,020  
Average assets   $ 2,350,021     $ 2,059,306     $ 2,030,231     $ 2,005,950     $ 2,004,207  
Operating annualized return on
  average assets
    1.11 %     0.30 %     1.08 %     1.31 %     1.40 %
                                         
Operating annualized return on
  average tangible equity:
                                       
Average total shareholders' equity   $ 281,614     $ 278,550     $ 271,568     $ 266,441     $ 261,197  
Less: average intangible assets     (43,871 )     (44,253 )     (44,646 )     (45,050 )     (45,456 )
Average tangible equity     237,743       234,297       226,922       221,391       215,741  
Operating net income   $ 6,512     $ 1,560     $ 5,541     $ 6,604     $ 7,020  
Operating annualized return on
  average tangible equity
    11.02 %     2.68 %     9.69 %     11.83 %     13.05 %
                                         
Operating efficiency ratio:                                        
Total noninterest expense   $ 18,934     $ 14,211     $ 15,266     $ 15,531     $ 16,470  
Less:  merger related expenses     (448 )     (290 )     (163 )     (187 )     (1,711 )
Total operating noninterest expense     18,486       13,921       15,103       15,344       14,759  
Net interest income     17,675       16,661       16,581       17,156       17,008  
Total noninterest income     10,823       5,874       5,719       6,788       7,032  
Total revenues   $ 28,498     $ 22,535     $ 22,300     $ 23,944     $ 24,040  
Operating efficiency ratio:     64.87 %     61.78 %     67.73 %     64.08 %     61.39 %
                                         
Operating annualized pre-tax pre-provision income to average assets:                                        
Income before income taxes   $ 7,940     $ 771     $ 7,034     $ 8,538     $ 7,570  
Add:  merger related expenses     448       290       163       187       1,711  
Add: provision for loan losses     1,624       7,553             (125 )      
Operating pre-tax pre-provision income     10,012       8,614       7,197       8,600       9,281  
Average assets   $ 2,350,021     $ 2,059,306     $ 2,030,231     $ 2,005,950     $ 2,004,207  
Operating annualized pre-tax pre-provision income to
average assets:
    1.71 %     1.68 %     1.41 %     1.70 %     1.86 %
                                         
    June 30,
2020
    March 31,
2020
    December 31,
2019
    September 30,
2019
    June 30,
2019
 
Tangible Equity:                                        
Total shareholders' equity   $ 281,950     $ 275,790     $ 273,046     $ 268,082     $ 262,664  
Less: intangible assets     (43,633 )     (44,008 )     (44,393 )     (44,790 )     (45,199 )
Tangible equity   $ 238,317     $ 231,782     $ 228,653     $ 223,292     $ 217,465  
                                         
Tangible Common Equity:                                        
Tangible equity   $ 238,317     $ 231,782     $ 228,653     $ 223,292     $ 217,465  
Less: preferred equity                             (9,000 )
Tangible common equity   $ 238,317     $ 231,782     $ 228,653     $ 223,292     $ 208,465  
                                         
Tangible Book Value per Share of Common Stock:                                        
Tangible common equity   $ 238,317     $ 231,782     $ 228,653     $ 223,292     $ 208,465  
Total shares of common stock outstanding     18,302,188       18,307,802       18,361,922       18,343,403       17,561,476  
Tangible book value per share of common stock   $ 13.02     $ 12.66     $ 12.45     $ 12.17     $ 11.87  


CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)
Second quarter 2020 Earnings Release

    Six Months Ended  
    June 30, 2020     June 30, 2019  
Operating net income:                
Net income   $ 7,527     $ 10,535  
Add:  merger related expenses     738       2,305  
Less: income tax impact of merger related expenses     (193 )     (603 )
Operating net income   $ 8,072     $ 12,237  
                 
Operating diluted net income per
  share of common stock:
               
Operating net income   $ 8,072     $ 12,237  
Weighted average shares - diluted     18,381,866       18,740,322  
Operating diluted net income
  per share of common stock
  $ 0.44     $ 0.65  
                 
Operating annualized return on average assets:                
Operating net income   $ 8,072     $ 12,237  
Average assets   $ 2,204,663     $ 1,996,386  
Operating annualized return on
  average assets
    0.74 %     1.24 %
                 
Operating annualized return on
  average tangible equity:
               
Average total shareholders' equity   $ 280,082     $ 259,162  
Less: average intangible assets     (44,062 )     (45,672 )
Average tangible equity     236,020       213,490  
Operating net income   $ 8,072     $ 12,237  
Operating annualized return on
  average tangible equity
    6.88 %     11.56 %
                 
Operating efficiency ratio:                
Total noninterest expense   $ 33,145     $ 31,196  
Less:  merger related expenses     (738 )     (2,305 )
Total operating noninterest expense     32,407       28,891  
Net interest income     34,336       34,010  
Total noninterest income     16,697       11,767  
Total revenues   $ 51,033     $ 45,777  
  Operating efficiency ratio:     63.50 %     63.11 %


CONTACT

Mike Fowler
Chief Financial Officer
(615) 732-7404


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Source: CapStar Financial Holdings, Inc.

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