NASHVILLE, Tenn., Jan. 25, 2018 (GLOBE NEWSWIRE) --

CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) reported unaudited net income of $91,000, or $0.01 per share on a fully diluted basis, for the three months ended December 31, 2017. As a result of the Tax Cuts and Jobs Act of 2017 that was signed into law last month, CapStar revalued its net deferred tax asset position. CapStar currently expects that the revaluation will result in a one-time, non-cash charge of approximately $3.6 million, or $0.27 per share on a fully diluted basis. Reconciliations of non-GAAP measures are provided in the tables that follow. Adjusted net income was $3.7 million, or $0.28 per share on a fully diluted basis for the three months ended December 31, 2017, compared to net income of $2.9 million, or $0.23 per share on a fully diluted basis, for the three months ended December 31, 2016.

“We remain focused on delivering consistent financial results for our shareholders through sound, profitable growth,” said Claire W. Tucker, CapStar’s president and chief executive officer. “The recent addition of a SBA team is intended to augment financial results by expanding market penetration and enhancing fee income.”

Soundness

• The allowance for loan losses represented 1.45% of total loans at December 31, 2017 compared to 1.24% at December 31, 2016.
  
  
• Non-performing assets as a percentage of total loans and other real estate owned was 0.28% at December 31, 2017 compared to 0.39% at December 31, 2016.
  
  
• Annualized net charge-offs (recoveries) to average loans was 0.15% for the three months ended December 31, 2017 compared to (0.02%) for the same period in 2016.
  
  
• The total risk based capital ratio was 12.50% at December 31, 2017 compared to 12.60% at December 31, 2016.

Profitability

• Return on average assets ("ROAA") for the three months ended December 31, 2017 was 0.03% compared to 0.88% for the same period in 2016.
  • Adjusting for the impact for tax reform, our adjusted ROAA was 1.09%.
  
  
• The net interest margin (“NIM”) for the three months ended December 31, 2017 was 3.26% compared to 3.17% for the same period in 2016.
  
  
• The efficiency ratio for the three months ended December 31, 2017 was 65.6% compared to 65.8% for the same period in 2016. 
  

Growth

• Average demand deposits for the quarter ended December 31, 2017 increased 29.5%, to $253.6 million, compared to $195.9 million for the same period in 2016.
  
  
• Average gross loans for the quarter ended December 31, 2017 increased 1.9%, to $956.4 million, compared to $938.9 million for the same period in 2016.
  
  
• Average total assets for the quarter ended December 31, 2017 increased 0.4%, to $1.33 billion, compared to $1.32 billion for the same period in 2016.

“Although 2017 presented some challenges, there are many positives that have us excited about our prospects for 2018,” said Rob Anderson, chief financial officer and chief administrative officer of CapStar. “Banking is a relationship business, and our bankers continue to have success growing core relationships, as over half of our deposit book is now in DDA or NOW checking accounts. In addition, our treasury management and other deposit service charges increased 38% over prior year.”

Conference Call and Webcast Information

CapStar will host a conference call and webcast at 8:30 a.m. Central Time on Friday, January 26, 2018. During the call, management will review the fourth quarter results and operational highlights. Interested parties may listen to the call by dialing (844) 412-1002. The conference ID number is 8989947. 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 December 31, 2017, on a consolidated basis, CapStar had total assets of $1.3 billion, gross loans of $947.5 million, total deposits of $1.1 billion, and shareholders’ equity of $146.9 million. Visit www.capstarbank.com for more information.

Forward-Looking Statements

Certain statements in this earnings release are forward-looking statements that reflect CapStar’s current views with respect to, among other things, future events and CapStar’s financial and operational 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,” “achieve,” “estimate,” “intend,” “plan,” “project,” “projection,” “forecast,” “roadmap,” “goal,” “guidance”, “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 CapStar’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond CapStar’s control. The inclusion of these forward-looking statements should not be regarded as a representation by CapStar or any other person that such expectations, estimates and projections will be achieved. Accordingly, CapStar cautions 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 CapStar believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, 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 CapStar’s actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, any factors identified in this earnings release as well as those factors that are detailed from time to time in CapStar’s periodic and current reports filed with the Securities and Exchange Commission, 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 CapStar’s 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 earnings release, and CapStar does 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 CapStar to predict their occurrence or how they will affect CapStar.

Non-GAAP Disclaimer

This earnings release includes the following financial measures that were prepared other than in accordance with generally accepted accounting principles in the United States (“non-GAAP financial measure”): adjusted net income, adjusted diluted net income per share, adjusted return on average assets, adjusted return on average tangible common equity and tangible book value per share. These non-GAAP financial measures (i) provide useful information to management and investors that is supplementary to CapStar’s financial condition, results of operations and cash flows computed in accordance with GAAP, (ii) enable a more complete understanding of factors and trends affecting CapStar’s business, and (iii) allow investors to evaluate CapStar’s performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators; however, CapStar acknowledges that these non-GAAP financial measures have a number of limitations. As such, you should not view these non-GAAP financial measures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. See below for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Income (unaudited) (dollars in thousands, except share data)
Fourth Quarter 2017 Earnings Release
		Three Months Ended								Year Ended
		December 31,								December 31,
		2017				2016				2017				2016
Interest income:
Loans, including fees		$	11,666			$	10,681			$	45,601			$	40,213
Securities:
Taxable			855				852				3,682				3,448
Tax-exempt			300				317				1,244				1,158
Federal funds sold			15				7				41				19
Restricted equity securities			125				71				396				281
Interest-bearing deposits in financial institutions			163				79				551				276
Total interest income			13,124				12,007				51,515				45,395
Interest expense:
Interest-bearing deposits			608				393				2,447				1,489
Savings and money market accounts			827				719				3,188				2,859
Time deposits			694				518				2,445				2,085
Federal funds purchased			—				1				13				22
Securities sold under agreements to repurchase			—				—				—				1
Federal Home Loan Bank advances			477				196				1,559				475
Total interest expense			2,606				1,827				9,652				6,931
Net interest income			10,518				10,180				41,863				38,464
Provision for loan losses			(30	)			70				12,870				2,829
Net interest income after provision for loan losses			10,548				10,110				28,993				35,635
Noninterest income:
Treasury management and other deposit service charges			419				303				1,516				1,108
Loan commitment fees			124				217				771				1,118
Net gain (loss) on sale of securities			(108	)			—				(66	)			121
Tri-Net fees			254				125				1,002				125
Mortgage banking income			1,621				2,033				6,238				7,375
Other noninterest income			426				276				1,447				1,237
Total noninterest income			2,736				2,954				10,908				11,084
Noninterest expense:
Salaries and employee benefits			5,411				5,185				20,400				20,461
Data processing and software			746				542				2,786				2,373
Professional fees			473				406				1,522				1,554
Occupancy			507				366				2,025				1,498
Equipment			467				443				2,071				1,743
Regulatory fees			234				348				1,111				1,091
Other operating			861				1,352				3,850				4,409
Total noninterest expense			8,699				8,642				33,765				33,129
Income before income taxes			4,585				4,422				6,136				13,590
Income tax expense			4,494				1,495				4,635				4,493
Net income		$	91			$	2,927			$	1,501			$	9,097
Per share information:
Basic net income per share of common stock		$	0.01			$	0.26			$	0.13			$	0.98
Diluted net income per share of common stock		$	0.01			$	0.23			$	0.12			$	0.81
Weighted average shares outstanding:
Basic			11,403,689				11,194,534				11,280,580				9,328,236
Diluted			12,938,288				12,787,677				12,803,511				11,212,026

 This information is preliminary and based on company data available at the time of the presentation.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)
Fourth Quarter 2017 Earnings Release
		Five Quarter Comparison
		12/31/17				9/30/17				6/30/17				3/31/17				12/31/16
Income Statement Data:
Net interest income		$	10,518			$	10,843			$	10,571			$	9,932			$	10,180
Provision for loan losses			(30	)			(195	)			9,690				3,405				70
Net interest income after provision for loan losses			10,548				11,038				881				6,527				10,110
Treasury management and other deposit service charges			419				427				342				329				303
Loan commitment fees			124				223				187				236				217
Net gain (loss) on sale of securities			(108	)			9				40				(6	)			—
Tri-Net fees			254				367				297				84				125
Mortgage banking income			1,621				2,030				1,370				1,216				2,033
Other noninterest income			426				316				430				274				276
Total noninterest income			2,736				3,372				2,666				2,133				2,954
Salaries and employee benefits			5,411				5,119				4,784				5,086				5,185
Data processing and software			746				709				711				621				542
Professional fees			473				336				350				365				406
Occupancy			507				531				539				449				366
Equipment			467				564				544				496				443
Regulatory fees			234				270				301				307				348
Other operating			861				946				988				1,052				1,352
Total noninterest expense			8,699				8,475				8,217				8,376				8,642
Net income (loss) before income tax expense			4,585				5,935				(4,670	)			284				4,422
Income tax (benefit) expense			4,494				1,516				(1,328	)			(47	)			1,495
Net income (loss)		$	91			$	4,419			$	(3,342	)		$	331			$	2,927
Weighted average shares - basic			11,403,689				11,279,364				11,226,216				11,210,948				11,194,534
Weighted average shares - diluted			12,938,288				12,750,423				12,740,104				12,784,117				12,787,677
Net income (loss) per share, basic		$	0.01			$	0.39			$	(0.30	)		$	0.03			$	0.26
Net income (loss) per share, diluted			0.01				0.35				(0.26	)			0.03				0.23
Balance Sheet Data (at period end):
Cash and cash equivalents		$	82,797			$	69,789			$	48,093			$	60,039			$	80,111
Securities available-for-sale			192,621				146,600				155,663				188,516				182,355
Securities held-to-maturity			3,759				45,635				46,458				46,855				46,864
Loans held for sale			74,093				53,225				73,573				35,371				42,111
Total loans			947,537				974,530				996,617				1,003,434				935,251
Allowance for loan losses			(13,721	)			(14,122	)			(12,454	)			(13,997	)			(11,634	)
Total assets			1,344,429				1,338,559				1,371,626				1,381,703				1,333,675
Non-interest-bearing deposits			301,742				250,007				231,169				223,450				197,788
Interest-bearing deposits			818,124				841,488				889,816				934,545				930,935
Federal Home Loan Bank advances			70,000				95,000				105,000				75,000				55,000
Total liabilities			1,197,483				1,194,355				1,233,596				1,241,491				1,194,468
Shareholders' equity		$	146,946			$	144,204			$	138,030			$	140,211			$	139,207
Total shares of common stock outstanding			11,582,026				11,346,498				11,235,255				11,218,328				11,204,515
Total shares of preferred stock outstanding			878,049				878,049				878,049				878,049				878,049
Book value per share of common stock		$	11.91			$	11.92			$	11.48			$	11.70			$	11.62
Tangible book value per share of common stock *			11.37				11.36				10.93				11.14				11.06
Market value per common share		$	20.77			$	19.58			$	17.74			$	19.07			$	21.96
Capital ratios:
Total risk based capital			12.50	%			12.42	%			11.51	%			12.13	%			12.60	%
Tier 1 risk based capital			11.39	%			11.28	%			10.54	%			11.01	%			11.61	%
Common equity tier 1 capital			10.68	%			10.58	%			9.86	%			10.32	%			10.90	%
Leverage			10.75	%			10.36	%			9.77	%			10.37	%			10.46	%

_____________________
*This metric is a non-GAAP financial measure.  See below for a reconciliation to the most directly comparable GAAP financial measure.

This information is preliminary and based on company data available at the time of the presentation.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)
Fourth Quarter 2017 Earnings Release
		Five Quarter Comparison
		12/31/17				9/30/17				6/30/17				3/31/17				12/31/16
Average Balance Sheet Data:
Cash and cash equivalents		$	64,850			$	59,352			$	62,002			$	58,925			$	66,758
Investment securities			202,818				207,926				227,431				237,084				226,033
Loans held for sale			66,311				67,886				34,690				28,359				52,483
Loans			956,441				991,238				1,028,968				974,350				938,887
Assets			1,329,621				1,367,993				1,393,331				1,340,237				1,324,620
Interest bearing deposits			827,733				857,344				882,722				933,328				942,923
Deposits			1,081,380				1,094,500				1,111,833				1,143,636				1,138,779
Federal Home Loan Bank advances			92,554				123,315				128,901				43,837				33,478
Liabilities			1,181,954				1,226,438				1,250,544				1,198,686				1,185,091
Shareholders' equity		$	147,667			$	141,556			$	142,787			$	141,551			$	139,529
Performance Ratios:
Annualized return on average assets			0.03	%			1.28	%			(0.96	)%			0.10	%			0.88	%
Annualized return on average equity			0.25	%			12.38	%			(9.39	)%			0.95	%			8.35	%
Net interest margin			3.26	%			3.26	%			3.15	%			3.12	%			3.17	%
Annualized Non-interest income to average assets			0.82	%			0.98	%			0.77	%			0.65	%			0.89	%
Efficiency ratio			65.6	%			59.6	%			62.1	%			69.4	%			65.8	%
Loans by Type (at period end):
Commercial and industrial		$	373,248			$	394,600			$	406,636			$	420,825			$	379,620
Commercial real estate - owner occupied			101,132				103,183				97,635				92,213				106,735
Commercial real estate - non-owner occupied			249,490				263,595				288,123				268,742				195,587
Construction and development			82,586				79,951				62,152				74,007				94,491
Consumer real estate			102,581				100,811				99,751				99,952				97,015
Consumer			6,862				6,289				4,096				4,495				5,974
Other		$	31,983			$	26,460			$	38,783			$	43,983			$	56,796
Asset Quality Data:
Allowance for loan losses to total loans			1.45	%			1.45	%			1.25	%			1.39	%			1.24	%
Allowance for loan losses to non-performing loans			509	%			446	%			386	%			103	%			321	%
Nonaccrual loans		$	2,695			$	3,165			$	3,229			$	13,624			$	3,619
Troubled debt restructurings			1,206				1,222				1,239				1,256				1,272
Loans - 90 days past due & still accruing			231				27				15				-				-
Total non-performing loans			2,695				3,165				3,229				13,624				3,619
OREO and repossessed assets			-				-				-				-				-
Total non-performing assets		$	2,695			$	3,165			$	3,229			$	13,624			$	3,619
Non-performing loans to total loans			0.28	%			0.32	%			0.32	%			1.36	%			0.39	%
Non-performing assets to total assets			0.20	%			0.24	%			0.24	%			0.99	%			0.27	%
Non-performing assets to total loans and OREO			0.28	%			0.32	%			0.32	%			1.36	%			0.39	%
Annualized net charge-offs (recoveries) to average loans			0.15	%			(0.75	)%			4.38	%			0.43	%			(0.02	)%
Net charge-offs (recoveries)		$	372			$	(1,863	)		$	11,233			$	1,041			$	(53	)
Interest Rates and Yields:
Loans			4.54	%			4.55	%			4.29	%			4.24	%			4.32	%
Securities			2.53	%			2.40	%			2.44	%			2.37	%			2.19	%
Total interest-earning assets			4.06	%			4.07	%			3.85	%			3.77	%			3.74	%
Deposits			0.78	%			0.77	%			0.70	%			0.67	%			0.57	%
Borrowings and repurchase agreements			2.04	%			1.81	%			1.18	%			1.30	%			2.32	%
Total interest-bearing liabilities			1.12	%			1.08	%			0.92	%			0.85	%			0.74	%
Other Information:
Full-time equivalent employees			175				168				169				168				170

This information is preliminary and based on company data available at the time of the presentation.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Analysis of Interest Income and Expense, Rates and Yields (unaudited) (dollars in thousands)
Fourth Quarter 2017 Earnings Release
		For the Three Months Ended December 31,
		2017												2016
		Average Outstanding Balance				Interest Income/ Expense				Average Yield/ Rate				Average Outstanding Balance				Interest Income/ Expense				Average Yield/ Rate
Interest-Earning Assets
Loans (1)		$	956,441			$	10,950				4.54	%		$	938,887			$	10,198				4.32	%
Loans held for sale			66,311				716				4.28	%			52,483				483				3.66	%
Securities:
Taxable investment securities (2)			153,955				980				2.55	%			172,771				923				2.14	%
Investment securities exempt from   federal income tax (3)			48,863				300				2.46	%			53,262				317				2.38	%
Total securities			202,818				1,280				2.53	%			226,033				1,240				2.19	%
Cash balances in other banks			52,988				163				1.22	%			56,263				79				0.56	%
Funds sold			2,989				15				2.04	%			2,449				7				1.15	%
Total interest-earning assets			1,281,547				13,124				4.06	%			1,276,115				12,007				3.74	%
Noninterest-earning assets			48,074												48,505
Total assets		$	1,329,621											$	1,324,620
Interest-Bearing Liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts		$	281,881				608				0.86	%		$	286,572				393				0.55	%
Savings and money market deposits			346,639				827				0.95	%			455,201				719				0.63	%
Time deposits			199,212				694				1.38	%			201,151				518				1.03	%
Total interest-bearing deposits			827,732				2,129				1.02	%			942,924				1,630				0.69	%
Borrowings and repurchase agreements			92,554				477				2.04	%			33,694				197				2.32	%
Total interest-bearing liabilities			920,286				2,606				1.12	%			976,618				1,827				0.74	%
Noninterest-bearing deposits			253,647												195,856
Total funding sources			1,173,934												1,172,474
Noninterest-bearing liabilities			8,020												12,617
Shareholders’ equity			147,667												139,529
Total liabilities and shareholders’ equity		$	1,329,621											$	1,324,620
Net interest spread (4)											2.94	%											3.00	%
Net interest income/margin (5)						$	10,518				3.26	%						$	10,180				3.17	%

_____________________
(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) Balances for investment securities exempt from federal income tax are not calculated 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 net interest income divided by total average interest-earning assets and is presented in the table above on an annualized basis.

This information is preliminary and based on company data available at the time of the presentation.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Analysis of Interest Income and Expense, Rates and Yields (unaudited) (dollars in thousands)
Fourth Quarter 2017 Earnings Release
		For the Year Ended December 31,
		2017												2016
(Amounts in thousands)		Average Outstanding Balance				Interest Income/ Expense				Average Yield/ Rate				Average Outstanding Balance				Interest Income/ Expense				Average Yield/ Rate
Interest-Earning Assets
Loans (1)		$	987,710			$	43,531				4.41	%		$	888,541			$	38,450				4.33	%
Loans held for sale			49,466				2,070				4.19	%			47,303				1,763				3.73	%
Securities:
Taxable investment securities (2)			166,561				4,078				2.45	%			176,977				3,729				2.11	%
Investment securities exempt from   federal income tax (3)			52,130				1,244				2.39	%			47,353				1,158				2.45	%
Total securities			218,691				5,322				2.43	%			224,330				4,887				2.18	%
Cash balances in other banks			49,990				551				1.10	%			51,147				276				0.54	%
Funds sold			2,518				41				1.63	%			2,153				19				0.89	%
Total interest-earning assets			1,308,375				51,515				3.94	%			1,213,475				45,395				3.74	%
Noninterest-earning assets			49,419												49,288
Total assets		$	1,357,794											$	1,262,763
Interest-Bearing Liabilities
Interest-bearing deposits:
Interest-bearing transaction accounts		$	301,411				2,447				0.81	%		$	269,113				1,489				0.55	%
Savings and money market deposits			378,640				3,188				0.84	%			445,873				2,859				0.64	%
Time deposits			194,892				2,445				1.25	%			193,881				2,085				1.08	%
Total interest-bearing deposits			874,943				8,080				0.92	%			908,867				6,433				0.71	%
Borrowings and repurchase agreements			98,289				1,572				1.60	%			32,371				498				1.54	%
Total interest-bearing liabilities			973,232				9,652				0.99	%			941,238				6,931				0.74	%
Noninterest-bearing deposits			232,687												189,270
Total funding sources			1,205,919												1,130,507
Noninterest-bearing liabilities			8,473												12,133
Shareholders’ equity			143,402												120,123
Total liabilities and shareholders’ equity		$	1,357,794											$	1,262,763
Net interest spread (4)											2.95	%											3.00	%
Net interest income/margin (5)						$	41,863				3.20	%						$	38,464				3.17	%

_____________________
(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) Balances for investment securities exempt from federal income tax are not calculated 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 net interest income divided by total average interest-earning assets and is presented in the table above on an annualized basis.

This information is preliminary and based on company data available at the time of the presentation.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Non-GAAP Financial Measures (unaudited) (dollars in thousands)
Fourth Quarter 2017 Earnings Release
		Three Months Ended								Year Ended
		December 31,								December 31,
		2017				2016				2017				2016
Average Tangible Equity:
Average Total shareholders' equity		$	147,667			$	139,529			$	143,402			$	120,123
Less: average intangible assets			(6,248	)			(6,298	)			(6,265	)			(6,318	)
Average Tangible equity		$	141,419			$	133,231			$	137,137			$	113,805
Average Tangible Common Equity:
Average tangible equity		$	141,419			$	133,231			$	137,137			$	113,805
Less: average preferred equity			(9,000	)			(9,000	)			(9,000	)			(14,533	)
Average tangible common equity		$	132,419			$	124,231			$	128,137			$	99,272
Annualized Return on Average Tangible Common   Equity (ROATCE):
Average tangible common equity		$	132,419			$	124,231			$	128,137			$	99,272
Net income		$	91			$	2,927			$	1,501			$	9,097
Annualized return on average tangible   common equity (ROATCE)			0.27	%			9.37	%			1.17	%			9.16	%
		12/31/17				12/31/16
Tangible Equity:
Total shareholders' equity		$	146,946			$	139,207
Less: intangible assets			(6,242	)			(6,290	)
Tangible equity		$	140,704			$	132,917
Tangible Common Equity:
Tangible equity		$	140,704			$	132,917
Less: preferred equity			(9,000	)			(9,000	)
Tangible common equity		$	131,704			$	123,917
Tangible Book Value per Share of Common Stock:
Tangible common equity		$	131,704			$	123,917
Total shares of common stock outstanding			11,582,026				11,204,515
Tangible book value per share of common stock		$	11.37			$	11.06

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Non-GAAP Financial Measures (unaudited) (dollars in thousands)
Fourth Quarter 2017 Earnings Release
		Three Months Ended								Year Ended
		December 31,								December 31,
		2017				2016				2017				2016
Adjusted Net Income:
Reported net income		$	91			$	2,927			$	1,501			$	9,097
Impact of tax reform*			(3,562	)			—				(3,562	)			—
Adjusted net income		$	3,653			$	2,927			$	5,063			$	9,097
Adjusted Diluted Net Income per Share of Common Stock:
Reported diluted net income per share of common stock		$	0.01			$	0.23			$	0.12			$	0.81
Impact of tax reform*			(0.27	)			—				(0.28	)			—
Adjusted diluted net income per share of common stock		$	0.28			$	0.23			$	0.40			$	0.81
Adjusted Return on Average Assets (ROAA):
Reported ROAA			0.03	%			0.88	%			0.11	%			0.72	%
Impact of tax reform*			(1.06	)%			—				(0.26	)%			—
Adjusted ROAA			1.09	%			0.88	%			0.37	%			0.72	%

_____________________
* As a result of the Tax Cuts and Jobs Act of 2017, which included a Federal corporate tax rate change from 35% to 21%, we revalued our deferred tax assets, which resulted in a $3.6 million increase in income tax expense for 2017.  The adjusted non-GAAP amounts and ratios above have excluded the impact of this transaction.

CONTACT

Rob Anderson
Chief Financial Officer and Chief Administrative Officer
(615) 732-6470

Source: CapStar Financial Holdings, Inc.