Truxton Corporation Reports Second Quarter 2021 Results
FOR IMMEDIATE RELEASE
NASHVILLE, TN, July 22, 2021 – Truxton Corporation, the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended June 30, 2021. Second quarter net income attributable to common shareholders was $3.6 million or $1.22 per diluted share compared to $2.6 million or $0.92 per diluted share for the same quarter in 2020. Net income rose by 36% for the quarter compared to the second quarter of 2020 while fully diluted earnings per share rose by 33%.
“Truxton’s second quarter 2021 performance was exceptional in many ways,” said Chairman and CEO Tom Stumb. “Wealth management revenue increased 33% from this quarter last year. Securities markets were strong, and many new families entrusted their wealth to the professionals at Truxton. Loans, excluding Paycheck Protection Program (PPP) loans, grew 18% from the end of June 2020. Our lenders continued to deepen relationships with families and businesses in our market. Nashville continues to experience very strong economic and population growth, and Truxton is a beneficiary. This quarter’s strong performance resulted in part from $254,000 in PPP loan fee recognition, which will continue to boost earnings as the remainder of these loans are forgiven over the next two quarters but is not expected to persist into next year.”
- Non-interest income grew to $3.9 million in the second quarter, an increase of 10% from the first quarter of 2021 and 33% in comparison to the second quarter of 2020. Wealth management services constituted 95% of non-interest income in the second quarter of 2021.
- Loans rose by 5% to $452 million compared to March 31, 2021, and were up 9% compared to June 30, 2020. Excluding PPP loans, loans rose by 8% compared to March 31, 2021, and 18% compared to June 30, 2020.
- Total deposits increased by 8% from March 31, 2021 to $707.4 million, and increased by 38% in comparison to June 30, 2020. 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 a fraction of typical peers.
- Net interest margin for the second quarter of 2021 was 2.71%, an increase of 7 basis points from the 2.64% experienced in the first quarter of 2021, and a decrease of 42 basis points from the second quarter of 2020. Cost of funds was 0.46% in the second quarter of 2021, down from 0.49% for the quarter ended March 31, 2021, but up from 0.36% the quarter ended June 30, 2020. The year-over-year increase was the result of the issuance of $15 million of 4.5% subordinated notes in September 2020. We continue to have excess liquidity because of the deposit growth we experienced in 2020 that has continued into the second quarter of 2021.
- Asset quality remains sound at Truxton. Truxton had $2 million in non-performing assets at June 30, 2021, 98% of which was represented by a single residential mortgage. Truxton had $1,000 of charge-offs in the quarter, $8,000 in the trailing quarter, and $8,000 in the same quarter a year ago. All of these charge-offs are from small loans acquired from a housing not-for profit.
- Allowance for loan losses was $4.6 million, $4.6 million, and $4.0 million at quarter end June 30, 2021, March 31, 2020, and June 30, 2020, respectively. For the same three periods, the Bank’s allowance was 1.00%, 1.05%, and 0.95%, respectively, of gross loans (including PPP loans) outstanding at period end.
- Tax expense increased by 27% from the March 31, 2021 quarter and by 20% from the June 30, 2020 period. Truxton believes that the effective tax rate of approximately 19% of pretax net income will persist under current state and federal law. Truxton has several sources of lightly taxed income including yield on bank-owned life insurance, the earnings of the bank’s captive insurance company, and the interest income from the bank’s tax-exempt bond portfolio that cause its effective rate to be below the combined statutory rates.
- The Bank’s capital position remains strong. Its Tier 1 leverage ratio was 9.47% at June 30, 2021, 9.39% at March 31, 2021, and 9.82% at June 30, 2020. Book value per common share was $27.35, $25.93, and $24.41 at June 30, 2021, March 31, 2021, and June 30, 2020, respectively. During the twelve months ended June 30, 2021, Truxton Corporation paid dividends of $2.16 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.