Truxton Corporation Reports Fourth Quarter 2020 Results
FOR IMMEDIATE RELEASE
NASHVILLE, TN, January 28, 2021 – Truxton Corporation (OTCPK: TRUX), the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended December 31, 2020. Fourth quarter net income attributable to common shareholders was $3.5 million or $1.23 per diluted share compared to $2.5 million or $0.88 per diluted share for the same quarter in 2019. Net income increased by 43.2% and earnings per diluted share increased by 39.7% for the quarter compared to the fourth quarter of 2019. For the twelve months ended December 31, 2020, net income increased by 14.4% to $11.1 million from $9.7 million in the comparable period in 2019. For the twelve months ended December 31, 2020, earnings per diluted share rose to $3.90 from $3.46, an increase of 12.7% from the comparable period in 2019.
During the fourth quarter, Truxton received notice from the Small Business Administration (SBA) that 134 loans totaling $22.2 million had been forgiven under the terms of the Paycheck Protection Program (PPP). Truxton recognized as income in the quarter the unamortized fees associated with these loans. In the quarter ended December 31, 2020, Truxton recognized $670 thousand of income from PPP fees. As of December 31, 2020, Truxton had $24.5 million in PPP loans outstanding with $429 thousand in unamortized fees. In addition, Truxton made loans in the quarter which qualify for tax credits under the Community Investment Tax Credit (CITC) program of the State of Tennessee. These credits reduced Truxton’s state tax provision by $325 thousand in the final quarter of 2020.
Chairman and CEO Tom Stumb remarked, “Truxton appreciates the patience and loyalty of our clients and the courage and dedication of our remarkable team of employees during a trying year. We were able to deliver a 16.1% return on our average equity capital (ROAE) for the full year, the highest in our history because Truxton performed superbly for clients throughout the year. Whether it was working nights and weekends to master the intricacies of the PPP loan program, or assisting families in managing wealth during a period of economic and political uncertainty, the Truxton team enhanced business and personal relationships with wonderful families and the businesses they own.”
- Wealth management revenue rose 19.5% in the fourth quarter of 2020 compared to the fourth quarter of 2019. Wealth management services constituted 95% of non-interest income in the fourth quarter ended December 31, 2020.
- Loans rose by 15.4% to $420 million compared to December 31, 2019 and were up 1.3% compared to September 30, 2020.
- We ended the fourth quarter with $24.5 million in loans outstanding pursuant to the Paycheck Protection Program (PPP) provisions of the CARES Act. These loans assisted our small business clients in covering payrolls and other essential costs during the pandemic period.
- Total deposits grew to $624 million or 39.3% since December 31, 2019, inclusive of deposits added as a result of funding PPP loans and new business growth. Truxton continues to fund its growth from a single banking location through superior deposit operations service and technology. As a result, occupancy expenditures and fixed asset investments are significantly less than many of our peers.
- Net interest margin for the fourth quarter of 2020 was 2.95%. That represents an increase of 11 basis points from the 2.84% experienced in the quarter ended September 30, 2020, and a decline of 26 basis points from the quarter ended December 31, 2019. Cost of funds increased to 0.47% in the fourth quarter of 2020 from 0.35% for the quarter ended September 30, 2020 but declined from 0.95% for the quarter ended December 31, 2019. Net interest margin was negatively impacted by the PPP loans, which carry a 1% interest rate.
- Asset quality remains sound at Truxton. Truxton had $2.0 million in non-performing assets at December 31, 2020, up from $0 at December 31, 2019. A single residential mortgage comprises over 95% of our non-performing loans.
- Provision for loan losses was $228 thousand for the quarter ended December 31, 2020, an increase from no provision in the same quarter in 2019 and down from $262 thousand in the quarter ended September 30, 2020. Allowance for loan losses was $4.5 million, $4.3 million, and $3.4 million as of December 31, 2020, September 30, 2020, and December 31, 2019, respectively. For the three periods, the bank’s allowance was 1.07%, 1.03%, and 0.94%, of gross loans outstanding at period end, respectively. There is no allowance associated with the $24.5 million of PPP loans outstanding at December 31, 2020.
- The Bank’s capital position remains strong. Tier 1 leverage ratio was 9.38% at December 31, 2020, 9.43% at September 30, 2020, and 11.30% at December 31, 2019. The reduction in Tier 1 leverage ratio for the year was principally the result of the significant asset growth experienced in the year. Book value per common share was $26.77, $25.27, and $22.84 at December 31, 2020, September 30, 2020, and December 31, 2019, respectively. During the 12 months ended December 31, 2020, Truxton Corporation paid dividends of $2.12 per common share.
- With the onset of the pandemic in March 2020, Truxton began providing borrowers interest and/or principal payment deferrals for up to 180 days in an amount eventually impacting $63.6 million in loans, or 17% of non-PPP total loan balances. As of December 31, 2020, those loans still receiving borrower payment deferrals totaled $5.8 million or 1.47% of non-PPP loans.
About Truxton Trust
Truxton Trust Company is a provider of private banking, wealth management, trust, and family office services for wealthy individuals, their families and their business interests. Serving clients across the world, Truxton’s vastly experienced team of professionals provides customized solutions to its clients’ complex financial needs. Founded in 2004 in Nashville, Tennessee, Truxton Trust upholds its original guiding principle: do the right thing. Truxton Trust Company is a subsidiary of financial holding company, Truxton Corporation (OTCPK: TRUX). For more information, visit truxtontrust.com.