Truxton Corporation Reports Second Quarter 2020 Results
NASHVILLE, TN, July 16, 2020 – 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 June 30, 2020. Second quarter net income attributable to common shareholders was $2.6 million or $0.92 per diluted share compared to $2.5 million or $0.90 per diluted share for the same quarter in 2019. Net income rose by 4% for the quarter while diluted earnings per share rose by 2%. For the six months ended June 30, 2020, net income increased by 8% to $5.1 million from $4.7 million in the comparable period in 2019. For the six months ended June 30, 2020, earnings per diluted share rose to $1.81 from $1.69, an increase of 7%.
Chairman and CEO Tom Stumb remarked, “Truxton continued to perform well as we strove to serve our customers while protecting them and our tireless staff from COVID-19. There remains significant uncertainty about the strength of the economy and the potential risks in our loan portfolio, so we have added meaningfully to our allowance for loan and lease losses.”
- Non-interest income experienced a slight decline to $2.9 million from $3.0 million in the second quarter of 2020, a decrease of 2% from the same period of 2019. Wealth management services contributed 95% of non-interest income in the quarter ended June 30, 2020.
- Loans increased by 25% to $420 million compared to June 30, 2019, and were up 15% compared to December 31, 2019.
- We ended the second quarter with $46 million in loans made pursuant to the Paycheck Protection Program (PPP) provisions of the CARES Act, assisting our small business clients to cover payrolls and other essential costs during this pandemic period.
- In the second quarter, our allowance for loan and lease losses (ALLL) increased by $411 thousand, a 12% increase from quarter ended March 31, 2020, and a 17% increase from the same quarter in 2019.
- Total deposits grew 28% since June 30, 2019, inclusive of deposits added as a result of funding PPP loans. 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 smaller than typical peers.
- Net interest margin for the second quarter of 2020 was 3.13%. That represents a decrease of 25 basis points from the 3.38% experienced in the quarter ended March 31, 2020, and a decline of 22 basis points from the quarter ended June 30, 2019. Cost of funds decreased to 0.36% in the second quarter of 2020 from 0.71% for the quarter ended March 31, 2020, and 1.08% for the quarter ended June 30, 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 June 30, 2020, up from $0 in the same quarter a year ago. A single residential mortgage comprises over 95% of our non-performing loans. Truxton had $8 thousand of charge-offs in the quarter and $2 thousand in the first quarter of 2020.
- Allowance for loan losses was $4.0 million, $3.6 million, and $3.4 million as of June 30, 2020, March 31, 2020, and June 30, 2019, respectively. For the three periods, the bank’s allowance was 0.95%, 0.95%, and 1.02%, of gross loans outstanding at period end, respectively. There is no allowance associated with the $46 million of PPP loans.
- Tax expense increased by 11% from the March 31, 2020 quarter but decreased by 9% from the June 30, 2019 quarter.
- The Bank’s capital position remains strong. Tier 1 leverage ratio was 9.82% at June 30, 2020, 11.21% at March 31, 2020, and 11.44% at June 30, 2019. The reduction in Tier 1 leverage ratio for the quarter was principally the result of the significant asset growth experienced in the quarter, which was largely driven by the PPP loans. Book value per common share was $24.41, $23.19, and $22.47 for June 30, 2020, March 31, 2020, and June 30, 2019, respectively. During the 12 months ended June 30, 2020, Truxton Corporation paid dividends of $2.06 per common share.
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.