UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
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(Exact name of registrant as specified in its charter)
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(Commission File Number) |
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(IRS Employer Identification No.)
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(Address of principal executive offices) |
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Registrant’s telephone number, including area code (
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Exchange Act: |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On April 20, 2023, CapStar Financial Holdings, Inc. (the “Company”) issued an earnings release announcing its financial results for the first quarter ended March 31, 2023. A copy of the earnings release is furnished as Exhibit 99.1 to this Current Report on Form 8-K (this “Report”) and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
The information disclosed under Item 2.02 of this Report is incorporated by reference into this Item 7.01.
The Company will conduct a conference call at 10:30 a.m. (Central Time) on April 21, 2023 to discuss its financial results for the first quarter ended March 31, 2023. During the call, management will make reference to the presentation that is furnished as Exhibit 99.2 to this Current Report on form 8-K.
Item 9.01. Financial Statements and Exhibits.
Exhibit Number |
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Description |
99.1 |
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Earnings release issued on April 20, 2023 by CapStar Financial Holdings, Inc. |
99.2 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CAPSTAR FINANCIAL HOLDINGS, INC. |
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By: |
/s/ Michael J. Fowler |
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Michael J. Fowler |
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Chief Financial Officer |
Date: April 21, 2023
3
Exhibit 99.1
EARNINGS RELEASE
CONTACT
Michael J. Fowler
Chief Financial Officer
(615) 732-7404
CapStar Reports First Quarter 2023 Results and 10% Dividend Increase
NASHVILLE, TN, April 20, 2023 (GLOBE NEWSWIRE) - CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) today reported net income of $6.4 million or $0.30 per diluted share, for the quarter ended March 31, 2023, compared with net income of $10.3 million or $0.47 per diluted share, for the quarter ended December 31, 2022, and net income of $10.7 million or $0.48 per diluted share, for the quarter ended March 31, 2022. Annualized return on average assets and return on average equity for the quarter ended March 31, 2023 was 0.83% and 7.41%, respectively. First quarter results include a $2.0 million loss, or $0.07 per share, related to Signature Bank subordinated debt.
Four Key Drivers |
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Targets |
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1Q23 |
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4Q22 |
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1Q22 |
Annualized revenue growth |
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> 5% |
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-22.72% |
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33.30% |
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-46.31% |
Net interest margin |
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≥ 3.60% |
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3.24% |
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3.44% |
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2.97% |
Efficiency ratio |
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≤ 55% |
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64.60% |
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53.23% |
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58.67% |
Annualized net charge-offs to average loans |
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≤ 0.25% |
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0.03% |
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0.03% |
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0.01% |
Revenue
Total revenue, defined as net interest income plus noninterest income, was $29.5 million in the first quarter of 2023 compared to the fourth quarter of 2022 revenue of $31.2 million.
First quarter net interest income decreased $1.7 million from the prior quarter to $23.2 million while noninterest income remained unchanged at $6.3 million.
First quarter 2023 average earning assets increased $29.7 million to $2.92 billion compared to the fourth quarter 2022. The growth in average earnings assets was attributed to a $38.8 million, or 7% linked-quarter annualized, increase in loans held for investment offset by a decline of $8.4 million in loans held for sale. while the related yield increased 46 basis points from the prior quarter to 5.49%. The current loan pipeline declined to approximately $220.0 million due to lower market demand and the Company's reduced CRE emphasis. CapStar continues to focus on maintaining a diversified business mix of established, known customers in our communities in line with our balanced and disciplined approach to capital, liquidity, and asset quality.
The net interest margin decreased 20 basis points from the prior quarter to 3.24%. The decline in net interest margin was principally related to increased pricing pressure and a $78.3 million decline in average customer deposits balances; $107.4 million growth in higher cost brokered CDs and other wholesale average funding balances; and average loan yields that are increasing at a slower rate than overall funding cost. Compared to the fourth quarter, total customer deposit cost rose 41 basis points, brokered CDs cost rose 98 basis points, and loan yields rose 46 basis points.
First quarter noninterest income benefited from increased deposit service charge and mortgage noninterest income offset by declines in interchange and SBA. Mortgage gain on sale spreads and originations increased modestly in March and are anticipated to continue in that range in a 6 to 6.5% 30-year fixed rate mortgage environment. In addition to $1.1 million in SBA gain on sale revenues, approximately $0.4 million of gain on sale revenue was deferred into the second quarter of 2023 due to closing delays and another $0.4 million in future fee revenue was originated related to owner-occupied construction loans that will be ready for sale in second half of 2023 as the projects complete. The Company’s Tri-Net business continues to remain disciplined awaiting a return to rational market pricing. More recently, pricing has been normalizing toward CapStar’s internal hurdle allowing for the first loan closing since August of 2022 which has since been sold at a premium.
Noninterest Expense and Operating Efficiency
Noninterest expense was $19.1 million for the first quarter of 2023, compared to $16.6 million in the fourth quarter of 2022. Fourth quarter 2022 expenses included a $0.7 million recovery of a third quarter 2022 operational loss. Compared to the fourth quarter of 2022, first quarter included increases of $0.3 million of payroll taxes, $0.2 million for the FDIC's increased assessment fees, and $0.2 million of compensation for recent SBA hires.
The efficiency ratio was 64.60% for the quarter ended March 31, 2023 and 53.23% for the quarter ended December 31, 2022. Annualized noninterest expense as a percentage of average assets was 2.45% for the quarter ended March 31, 2023 which is an increase of 34 basis points compared to the quarter ended December 31, 2022, or 25 basis points when adjusted for fourth quarter operational recoveries. Assets per employee increased to $8.1 million as of March 31, 2023 compared to $7.9 million in the previous quarter.
Asset Quality
The Company adopted ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (“CECL”) on January 1, 2023. Results for reporting periods beginning January 1, 2023 are presented under CECL, while prior period amounts continue to be reported in accordance with previously applicable GAAP. As a result of adopting CECL, the Company increased its allowance for credit losses $4.9 million, comprised $1.5 million for loans and $3.4 million for unfunded commitments.
The provision for credit losses for first quarter totaled $2.4 million compared to $1.5 million in the fourth quarter of 2022, principally comprised of a $2.0 million loss on Signature Bank subordinated debt. Net loan charge-offs in first quarter totaled $0.2 million or 0.03% annualized of average loans held for investment.
Past due loans improved to $8.5 million or 0.35% of total loans held for investment at March 31, 2023 compared to $11.6 million or 0.50% of total loans held for investment at December 31, 2022. The improvement was related to three relationships which were greater than 90 days past due and brought current during the quarter. First quarter past dues are largely comprised of one relationship totaling $5.8 million with loans for which the Company believes at this time there is nominal risk of loss.
Non-performing assets to total loans held for investment and OREO were 0.42% at March 31, 2023 compared to 0.46% at December 31, 2022. Non-performing assets will continue to contain the aforementioned three relationships until six consecutive payments occur.
The allowance for credit losses related to loans increased to 1.05% as of March 31, 2023 compared to 1.03% as of December 31, 2022. The allowance for credit losses related to unfunded commitments increased with the adoption of CECL to 0.47% of available balances from 0.04% at December 31, 2022.
Asset Quality Data: |
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3/31/2023 |
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12/31/2022 |
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9/30/2022 |
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6/30/2022 |
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3/31/2022 |
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Annualized net charge-offs to average loans |
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0.03 |
% |
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0.03 |
% |
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0.02 |
% |
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0.00 |
% |
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0.01 |
% |
Criticized and classified loans to total loans |
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1.76 |
% |
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1.31 |
% |
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1.79 |
% |
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2.12 |
% |
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2.49 |
% |
Loans- past due to total end of period loans |
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0.35 |
% |
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0.50 |
% |
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0.63 |
% |
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0.12 |
% |
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0.17 |
% |
Loans-over 90 days past due to total period end loans |
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0.05 |
% |
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0.44 |
% |
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0.27 |
% |
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0.02 |
% |
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0.05 |
% |
Non-performing assets to total loans held for investment and OREO |
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0.42 |
% |
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0.46 |
% |
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0.30 |
% |
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0.11 |
% |
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0.18 |
% |
Allowance for credit losses on loans to non-performing loans |
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249 |
% |
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222 |
% |
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333 |
% |
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974 |
% |
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596 |
% |
Income Tax Expense
The Company’s first quarter effective income tax rate decreased slightly to 19.4% when compared to 20.9% in the prior quarter ended December 31, 2022 and remains relatively stable compared to the rate of 19.6% for the quarter ended March 31, 2022. The Company expects its effective tax rate for 2023 to be approximately 20.0%.
Capital
The Company continues to be strongly capitalized with equity of $353.9 million and tangible equity of $308.2 million at March 31, 2023. At March 31, 2023, CapStar’s Leverage Ratio was 11.40%, Common Equity Tier I ratio was 12.61%, and its Total Risk-Based Capital ratio was 14.51%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation
Book value per share of common stock as of March 31, 2023 was $16.57 while tangible book value per share of common stock was $14.43 as of March 31, 2023 compared to $14.19 and $14.49 for the quarters ended December 31, 2022 and March 31, 2022. Excluding the impact of after-tax unrealized gain or loss within the available for sale investment portfolio, tangible book value per share of common stock for the quarter ended March 31, 2023 was $16.56 compared to $16.57 and $15.53 for the quarters ended December 31, 2022 and March 31, 2022, respectively.
Capital ratios: |
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3/31/2023 |
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12/31/2022 |
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9/30/2022 |
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6/30/2022 |
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3/31/2022 |
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Total risk-based capital |
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14.20 |
% |
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14.51 |
% |
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14.59 |
% |
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14.79 |
% |
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15.60 |
% |
Common equity tier 1 capital |
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12.07 |
% |
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12.61 |
% |
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12.70 |
% |
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12.87 |
% |
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13.58 |
% |
Leverage |
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11.20 |
% |
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11.40 |
% |
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11.22 |
% |
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11.10 |
% |
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10.99 |
% |
As a component of the Company’s capital allocation strategy, $9.8 million was returned to shareholders in the first quarter of 2023 in the form of share repurchases and dividends. In total, 465,834 shares were repurchased at an average price of $16.37. The Board of Directors of the Company renewed a common stock share repurchase authorization of up to $10 million on January 18, 2023. The Plan will terminate on the earlier of the date on which the maximum authorized dollar amount of shares of common stock has been repurchased or January 31, 2024. As of March 31, 2023, the Company could repurchase approximately 360 thousand shares under the current plan.
Liquidity
The Company has a diversified deposit portfolio comprised 86% of customer deposits and 14% of brokered deposits. Among customer deposits, the largest concentration by industry is $45.0 million, or 1.9%, and the largest banking market accounts for $568.7 million or 23.9%. Correspondent Banking customers account for 10.1% of customer deposits. As of March 31, 2023 66.1% of deposits were insured or collateralized.
Liquidity sources total $1.6 billion as of March 31, 2023 which include cash and equivalents of $175.6 million, unpledged securities of $173.5 million, remaining borrowing capacity with the FHLB of $462.4 million, borrowing capacity with the Federal Reserve Discount Window of $315.7 million, the ability to issue an additional $188.2 million of brokered CDs based on internal limits and federal funds lines of $145.0 million.
Dividend
On April 19, 2023, the Board of Directors of the Company approved a 10% quarterly dividend increase to $0.11 per common share payable on May 24, 2023 to shareholders of record of CapStar’s common stock as of the close of business on May 10, 2023.
Conference Call and Webcast Information
CapStar will host a conference call and webcast at 10:30 a.m. Central Time on Friday, April 21, 2023. During the call, management will review the first quarter results and operational highlights. Interested parties may listen to the call by registering here to access the live call, including for participants who plan to ask a question during the call. A simultaneous webcast may be accessed on CapStar’s website at ir.capstarbank.com by clicking on “News & Events.” An archived version of the webcast will be available in the same location shortly after the live call has ended.
CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Income (unaudited) (dollars in thousands, except share data)
First quarter 2023 Earnings Release
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Three Months Ended |
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March 31, |
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2023 |
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2022 |
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Interest income: |
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Loans, including fees |
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$ |
31,959 |
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$ |
20,367 |
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Securities: |
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Taxable |
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1,951 |
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1,754 |
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Tax-exempt |
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314 |
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325 |
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Federal funds sold |
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55 |
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10 |
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Restricted equity securities |
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240 |
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156 |
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Interest-bearing deposits in financial institutions |
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1,264 |
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|
172 |
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Total interest income |
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35,783 |
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|
22,784 |
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Interest expense: |
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Interest-bearing deposits |
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2,946 |
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436 |
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Savings and money market accounts |
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|
3,259 |
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|
331 |
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Time deposits |
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|
5,573 |
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|
|
484 |
|
Federal Home Loan Bank advances |
|
|
392 |
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|
|
— |
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Subordinated notes |
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|
394 |
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|
|
393 |
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Total interest expense |
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|
12,564 |
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|
|
1,644 |
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Net interest income |
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|
23,219 |
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|
|
21,140 |
|
Provision for credit losses: |
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|
|
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Provision for (recovery of) credit losses on loans |
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51 |
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|
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(784 |
) |
Provision for credit losses on available-for-sale securities |
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|
2,000 |
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|
|
— |
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Provision for credit losses on unfunded commitments |
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391 |
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|
|
— |
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Total provision for credit losses |
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2,442 |
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|
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(784 |
) |
Net interest income after provision for credit losses |
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|
20,777 |
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|
|
21,924 |
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Noninterest income: |
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|
|
|
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Deposit service charges |
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1,368 |
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|
|
1,142 |
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Interchange and debit card transaction fees |
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|
1,038 |
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|
|
1,222 |
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Mortgage banking |
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|
1,293 |
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|
|
1,966 |
|
Tri-Net |
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|
— |
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|
|
2,171 |
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Wealth management |
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|
374 |
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|
|
440 |
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SBA lending |
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|
1,091 |
|
|
|
222 |
|
Net gain on sale of securities |
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|
5 |
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|
|
— |
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Other noninterest income |
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|
1,106 |
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|
|
1,926 |
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Total noninterest income |
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|
6,275 |
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|
|
9,089 |
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Noninterest expense: |
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|
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Salaries and employee benefits |
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|
10,341 |
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|
10,269 |
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Data processing and software |
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3,211 |
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2,647 |
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Occupancy |
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1,193 |
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|
1,099 |
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Equipment |
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|
822 |
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|
709 |
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Professional services |
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|
788 |
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|
679 |
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Regulatory fees |
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|
413 |
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|
280 |
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Amortization of intangibles |
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|
384 |
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|
446 |
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Other operating |
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|
1,902 |
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|
|
1,607 |
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Total noninterest expense |
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|
19,054 |
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|
17,736 |
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Income before income taxes |
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|
7,998 |
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|
13,277 |
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Income tax expense |
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|
1,552 |
|
|
|
2,604 |
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Net income |
|
$ |
6,446 |
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|
$ |
10,673 |
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Per share information: |
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Basic net income per share of common stock |
|
$ |
0.30 |
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|
$ |
0.48 |
|
Diluted net income per share of common stock |
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$ |
0.30 |
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|
$ |
0.48 |
|
Weighted average shares outstanding: |
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Basic |
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|
21,561,007 |
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|
|
22,198,339 |
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Diluted |
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|
21,595,182 |
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|
|
22,254,644 |
|
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)
First quarter 2023 Earnings Release
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Five Quarter Comparison |
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|
3/31/2023 |
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12/31/2022 |
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|
9/30/2022 |
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|
6/30/2022 |
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|
3/31/2022 |
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Income Statement Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net interest income |
|
$ |
23,219 |
|
|
$ |
24,959 |
|
|
$ |
25,553 |
|
|
$ |
24,440 |
|
|
$ |
21,140 |
|
Provision for (recovery of) credit losses |
|
|
2,442 |
|
|
|
1,548 |
|
|
|
867 |
|
|
|
843 |
|
|
|
(784 |
) |
Net interest income after provision for credit losses |
|
|
20,777 |
|
|
|
23,411 |
|
|
|
24,686 |
|
|
|
23,597 |
|
|
|
21,924 |
|
Deposit service charges |
|
|
1,368 |
|
|
|
1,206 |
|
|
|
1,251 |
|
|
|
1,182 |
|
|
|
1,142 |
|
Interchange and debit card transaction fees |
|
|
1,038 |
|
|
|
1,250 |
|
|
|
1,245 |
|
|
|
1,336 |
|
|
|
1,222 |
|
Mortgage banking |
|
|
1,293 |
|
|
|
637 |
|
|
|
765 |
|
|
|
1,705 |
|
|
|
1,966 |
|
Tri-Net |
|
|
— |
|
|
|
39 |
|
|
|
(2,059 |
) |
|
|
(73 |
) |
|
|
2,171 |
|
Wealth management |
|
|
374 |
|
|
|
403 |
|
|
|
385 |
|
|
|
459 |
|
|
|
440 |
|
SBA lending |
|
|
1,091 |
|
|
|
1,446 |
|
|
|
560 |
|
|
|
273 |
|
|
|
222 |
|
Net gain on sale of securities |
|
|
5 |
|
|
|
1 |
|
|
|
7 |
|
|
|
— |
|
|
|
— |
|
Other noninterest income |
|
|
1,106 |
|
|
|
1,303 |
|
|
|
1,118 |
|
|
|
994 |
|
|
|
1,926 |
|
Total noninterest income |
|
|
6,275 |
|
|
|
6,285 |
|
|
|
3,272 |
|
|
|
5,876 |
|
|
|
9,089 |
|
Salaries and employee benefits |
|
|
10,341 |
|
|
|
9,875 |
|
|
|
8,712 |
|
|
|
9,209 |
|
|
|
10,269 |
|
Data processing and software |
|
|
3,211 |
|
|
|
2,797 |
|
|
|
2,861 |
|
|
|
2,847 |
|
|
|
2,647 |
|
Occupancy |
|
|
1,193 |
|
|
|
1,032 |
|
|
|
1,092 |
|
|
|
1,076 |
|
|
|
1,099 |
|
Equipment |
|
|
822 |
|
|
|
753 |
|
|
|
743 |
|
|
|
783 |
|
|
|
709 |
|
Professional services |
|
|
788 |
|
|
|
522 |
|
|
|
468 |
|
|
|
506 |
|
|
|
679 |
|
Regulatory fees |
|
|
413 |
|
|
|
266 |
|
|
|
269 |
|
|
|
265 |
|
|
|
280 |
|
Amortization of intangibles |
|
|
384 |
|
|
|
399 |
|
|
|
415 |
|
|
|
430 |
|
|
|
446 |
|
Other noninterest expense |
|
|
1,902 |
|
|
|
984 |
|
|
|
3,371 |
|
|
|
1,959 |
|
|
|
1,607 |
|
Total noninterest expense |
|
|
19,054 |
|
|
|
16,628 |
|
|
|
17,931 |
|
|
|
17,075 |
|
|
|
17,736 |
|
Net income before income tax expense |
|
|
7,998 |
|
|
|
13,068 |
|
|
|
10,027 |
|
|
|
12,398 |
|
|
|
13,277 |
|
Income tax expense |
|
|
1,552 |
|
|
|
2,735 |
|
|
|
1,988 |
|
|
|
2,426 |
|
|
|
2,604 |
|
Net income |
|
$ |
6,446 |
|
|
$ |
10,333 |
|
|
$ |
8,039 |
|
|
$ |
9,972 |
|
|
$ |
10,673 |
|
Weighted average shares - basic |
|
|
21,561,007 |
|
|
|
21,887,351 |
|
|
|
21,938,259 |
|
|
|
22,022,109 |
|
|
|
22,198,339 |
|
Weighted average shares - diluted |
|
|
21,595,182 |
|
|
|
21,926,821 |
|
|
|
21,988,085 |
|
|
|
22,074,260 |
|
|
|
22,254,644 |
|
Net income per share, basic |
|
$ |
0.30 |
|
|
$ |
0.47 |
|
|
$ |
0.37 |
|
|
$ |
0.45 |
|
|
$ |
0.48 |
|
Net income per share, diluted |
|
|
0.30 |
|
|
|
0.47 |
|
|
|
0.37 |
|
|
|
0.45 |
|
|
|
0.48 |
|
Balance Sheet Data (at period end): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents |
|
$ |
175,557 |
|
|
$ |
135,305 |
|
|
$ |
199,913 |
|
|
$ |
113,825 |
|
|
$ |
355,981 |
|
Securities available-for-sale |
|
|
391,547 |
|
|
|
396,416 |
|
|
|
401,345 |
|
|
|
437,420 |
|
|
|
460,558 |
|
Securities held-to-maturity |
|
|
1,232 |
|
|
|
1,240 |
|
|
|
1,762 |
|
|
|
1,769 |
|
|
|
1,775 |
|
Loans held for sale |
|
|
31,501 |
|
|
|
44,708 |
|
|
|
43,122 |
|
|
|
85,884 |
|
|
|
106,895 |
|
Loans held for investment |
|
|
2,407,328 |
|
|
|
2,312,798 |
|
|
|
2,290,269 |
|
|
|
2,234,833 |
|
|
|
2,047,555 |
|
Allowance for credit losses on loans |
|
|
(25,189 |
) |
|
|
(23,806 |
) |
|
|
(22,431 |
) |
|
|
(21,684 |
) |
|
|
(20,857 |
) |
Total assets |
|
|
3,232,751 |
|
|
|
3,117,169 |
|
|
|
3,165,706 |
|
|
|
3,096,537 |
|
|
|
3,190,749 |
|
Non-interest-bearing deposits |
|
|
463,243 |
|
|
|
512,076 |
|
|
|
628,846 |
|
|
|
717,167 |
|
|
|
702,172 |
|
Interest-bearing deposits |
|
|
2,286,844 |
|
|
|
2,167,743 |
|
|
|
2,004,827 |
|
|
|
1,913,320 |
|
|
|
2,053,823 |
|
Federal Home Loan Bank advances and other borrowings |
|
|
85,199 |
|
|
|
44,666 |
|
|
|
149,633 |
|
|
|
74,599 |
|
|
|
29,566 |
|
Total liabilities |
|
|
2,878,840 |
|
|
|
2,762,987 |
|
|
|
2,818,341 |
|
|
|
2,738,802 |
|
|
|
2,821,832 |
|
Shareholders' equity |
|
|
353,911 |
|
|
|
354,182 |
|
|
|
347,365 |
|
|
|
357,735 |
|
|
|
368,917 |
|
Total shares of common stock outstanding |
|
|
21,361,614 |
|
|
|
21,714,380 |
|
|
|
21,931,624 |
|
|
|
21,934,554 |
|
|
|
22,195,071 |
|
Book value per share of common stock |
|
$ |
16.57 |
|
|
$ |
16.31 |
|
|
$ |
15.84 |
|
|
$ |
16.31 |
|
|
$ |
16.62 |
|
Tangible book value per share of common stock* |
|
|
14.43 |
|
|
|
14.19 |
|
|
|
13.72 |
|
|
|
14.17 |
|
|
|
14.49 |
|
Tangible book value per share of common stock less after-tax unrealized available for sale investment losses* |
|
|
16.56 |
|
|
|
16.57 |
|
|
|
16.16 |
|
|
|
15.86 |
|
|
|
15.53 |
|
Market value per share of common stock |
|
|
15.15 |
|
|
|
17.66 |
|
|
|
18.53 |
|
|
|
19.62 |
|
|
|
21.08 |
|
Capital ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total risk-based capital |
|
|
14.20 |
% |
|
|
14.51 |
% |
|
|
14.59 |
% |
|
|
14.79 |
% |
|
|
15.60 |
% |
Tangible common equity to tangible assets* |
|
|
9.67 |
% |
|
|
10.03 |
% |
|
|
9.65 |
% |
|
|
10.19 |
% |
|
|
10.23 |
% |
Tangible common equity to tangible assets less after-tax unrealized available for sale investment losses* |
|
|
10.94 |
% |
|
|
11.52 |
% |
|
|
11.17 |
% |
|
|
11.27 |
% |
|
|
10.88 |
% |
Common equity tier 1 capital |
|
|
12.07 |
% |
|
|
12.61 |
% |
|
|
12.70 |
% |
|
|
12.87 |
% |
|
|
13.58 |
% |
Leverage |
|
|
11.20 |
% |
|
|
11.40 |
% |
|
|
11.22 |
% |
|
|
11.10 |
% |
|
|
10.99 |
% |
_____________________
*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)
First quarter 2023 Earnings Release
|
|
Five Quarter Comparison |
|
|||||||||||||||||
|
|
3/31/2023 |
|
|
12/31/2022 |
|
|
9/30/2022 |
|
|
6/30/2022 |
|
|
3/31/2022 |
|
|||||
Average Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents |
|
$ |
153,464 |
|
|
$ |
154,150 |
|
|
$ |
154,543 |
|
|
$ |
189,542 |
|
|
$ |
380,262 |
|
Investment securities |
|
|
410,371 |
|
|
|
415,414 |
|
|
|
450,933 |
|
|
|
473,167 |
|
|
|
483,339 |
|
Loans held for sale |
|
|
29,578 |
|
|
|
37,945 |
|
|
|
94,811 |
|
|
|
114,223 |
|
|
|
90,163 |
|
Loans held for investment |
|
|
2,348,100 |
|
|
|
2,309,349 |
|
|
|
2,241,355 |
|
|
|
2,147,750 |
|
|
|
2,001,740 |
|
Assets |
|
|
3,150,436 |
|
|
|
3,124,928 |
|
|
|
3,146,841 |
|
|
|
3,128,864 |
|
|
|
3,153,320 |
|
Interest bearing deposits |
|
|
2,176,542 |
|
|
|
2,076,743 |
|
|
|
1,993,172 |
|
|
|
1,936,910 |
|
|
|
1,976,803 |
|
Deposits |
|
|
2,691,108 |
|
|
|
2,662,954 |
|
|
|
2,659,268 |
|
|
|
2,664,615 |
|
|
|
2,704,937 |
|
Federal Home Loan Bank advances and other borrowings |
|
|
62,585 |
|
|
|
74,812 |
|
|
|
88,584 |
|
|
|
70,516 |
|
|
|
29,547 |
|
Liabilities |
|
|
2,797,442 |
|
|
|
2,776,902 |
|
|
|
2,782,703 |
|
|
|
2,767,714 |
|
|
|
2,773,281 |
|
Shareholders' equity |
|
|
352,994 |
|
|
|
348,027 |
|
|
|
364,138 |
|
|
|
361,150 |
|
|
|
380,039 |
|
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Annualized return on average assets |
|
|
0.83 |
% |
|
|
1.31 |
% |
|
|
1.01 |
% |
|
|
1.28 |
% |
|
|
1.37 |
% |
Annualized return on average equity |
|
|
7.41 |
% |
|
|
11.78 |
% |
|
|
8.76 |
% |
|
|
11.08 |
% |
|
|
11.39 |
% |
Net interest margin (1) |
|
|
3.24 |
% |
|
|
3.44 |
% |
|
|
3.50 |
% |
|
|
3.41 |
% |
|
|
2.97 |
% |
Annualized noninterest income to average assets |
|
|
0.81 |
% |
|
|
0.80 |
% |
|
|
0.41 |
% |
|
|
0.75 |
% |
|
|
1.17 |
% |
Efficiency ratio |
|
|
64.60 |
% |
|
|
53.23 |
% |
|
|
62.21 |
% |
|
|
56.32 |
% |
|
|
58.67 |
% |
Loans by Type (at period end): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial and industrial |
|
$ |
534,521 |
|
|
$ |
496,347 |
|
|
$ |
499,048 |
|
|
$ |
510,987 |
|
|
$ |
499,719 |
|
Commercial real estate - owner occupied |
|
|
276,515 |
|
|
|
246,109 |
|
|
|
235,519 |
|
|
|
241,461 |
|
|
|
231,933 |
|
Commercial real estate - non-owner occupied |
|
|
840,755 |
|
|
|
803,611 |
|
|
|
832,156 |
|
|
|
786,610 |
|
|
|
652,936 |
|
Construction and development |
|
|
209,556 |
|
|
|
229,972 |
|
|
|
198,869 |
|
|
|
205,573 |
|
|
|
208,513 |
|
Consumer real estate |
|
|
425,649 |
|
|
|
402,615 |
|
|
|
386,628 |
|
|
|
357,849 |
|
|
|
327,416 |
|
Consumer |
|
|
55,125 |
|
|
|
53,382 |
|
|
|
52,715 |
|
|
|
53,227 |
|
|
|
48,790 |
|
Other |
|
|
65,207 |
|
|
|
80,762 |
|
|
|
85,334 |
|
|
|
79,126 |
|
|
|
78,248 |
|
Asset Quality Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for credit losses on loans to total loans |
|
|
1.05 |
% |
|
|
1.03 |
% |
|
|
0.98 |
% |
|
|
0.97 |
% |
|
|
1.02 |
% |
Allowance for credit losses on loans to non-performing loans |
|
|
249 |
% |
|
|
222 |
% |
|
|
333 |
% |
|
|
974 |
% |
|
|
596 |
% |
Nonaccrual loans |
|
$ |
10,123 |
|
|
$ |
10,714 |
|
|
$ |
6,734 |
|
|
$ |
2,225 |
|
|
$ |
3,502 |
|
Loans - over 90 days past due |
|
|
1,182 |
|
|
|
10,222 |
|
|
|
6,096 |
|
|
|
494 |
|
|
|
1,076 |
|
Total non-performing loans |
|
|
10,123 |
|
|
|
10,714 |
|
|
|
6,734 |
|
|
|
2,225 |
|
|
|
3,502 |
|
OREO and repossessed assets |
|
|
— |
|
|
|
— |
|
|
|
165 |
|
|
|
165 |
|
|
|
178 |
|
Total non-performing assets |
|
|
10,123 |
|
|
|
10,714 |
|
|
|
6,899 |
|
|
|
2,390 |
|
|
|
3,680 |
|
Non-performing loans to total loans held for investment |
|
|
0.42 |
% |
|
|
0.46 |
% |
|
|
0.29 |
% |
|
|
0.10 |
% |
|
|
0.17 |
% |
Non-performing assets to total assets |
|
|
0.31 |
% |
|
|
0.34 |
% |
|
|
0.22 |
% |
|
|
0.08 |
% |
|
|
0.12 |
% |
Non-performing assets to total loans held for investment and OREO |
|
|
0.42 |
% |
|
|
0.46 |
% |
|
|
0.30 |
% |
|
|
0.11 |
% |
|
|
0.18 |
% |
Annualized net charge-offs to average loans |
|
|
0.03 |
% |
|
|
0.03 |
% |
|
|
0.02 |
% |
|
|
0.00 |
% |
|
|
0.01 |
% |
Net charge-offs |
|
$ |
165 |
|
|
$ |
172 |
|
|
$ |
120 |
|
|
$ |
16 |
|
|
$ |
59 |
|
Interest Rates and Yields: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans |
|
|
5.49 |
% |
|
|
5.03 |
% |
|
|
4.62 |
% |
|
|
4.25 |
% |
|
|
3.97 |
% |
Securities (1) |
|
|
2.52 |
% |
|
|
2.53 |
% |
|
|
2.29 |
% |
|
|
2.11 |
% |
|
|
1.92 |
% |
Total interest-earning assets (1) |
|
|
4.99 |
% |
|
|
4.66 |
% |
|
|
4.17 |
% |
|
|
3.69 |
% |
|
|
3.20 |
% |
Deposits |
|
|
1.77 |
% |
|
|
1.20 |
% |
|
|
0.62 |
% |
|
|
0.23 |
% |
|
|
0.19 |
% |
Borrowings and repurchase agreements |
|
|
5.09 |
% |
|
|
4.22 |
% |
|
|
3.41 |
% |
|
|
2.79 |
% |
|
|
5.40 |
% |
Total interest-bearing liabilities |
|
|
2.28 |
% |
|
|
1.63 |
% |
|
|
0.93 |
% |
|
|
0.41 |
% |
|
|
0.33 |
% |
Other Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Full-time equivalent employees |
|
|
401 |
|
|
|
397 |
|
|
|
387 |
|
|
|
391 |
|
|
|
397 |
|
_____________________
This information is preliminary and based on CapStar data available at the time of this earnings release.
CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Analysis of Interest Income and Expense, Rates and Yields (unaudited) (dollars in thousands)
First quarter 2023 Earnings Release
|
|
For the Three Months Ended March 31, |
|
|||||||||||||||||||||
|
|
2023 |
|
|
2022 |
|
||||||||||||||||||
|
|
Average |
|
|
Interest |
|
|
Average |
|
|
Average |
|
|
Interest |
|
|
Average |
|
||||||
Interest-Earning Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loans (1) |
|
$ |
2,348,100 |
|
|
$ |
31,801 |
|
|
|
5.49 |
% |
|
$ |
2,001,740 |
|
|
$ |
19,599 |
|
|
|
3.97 |
% |
Loans held for sale |
|
|
29,578 |
|
|
|
158 |
|
|
|
2.17 |
% |
|
|
90,163 |
|
|
|
768 |
|
|
|
3.46 |
% |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Taxable investment securities (2) |
|
|
356,137 |
|
|
|
2,191 |
|
|
|
2.46 |
% |
|
|
426,144 |
|
|
|
1,909 |
|
|
|
1.79 |
% |
Investment securities exempt from |
|
|
54,234 |
|
|
|
314 |
|
|
|
2.93 |
% |
|
|
57,195 |
|
|
|
326 |
|
|
|
2.89 |
% |
Total securities |
|
|
410,371 |
|
|
|
2,505 |
|
|
|
2.52 |
% |
|
|
483,339 |
|
|
|
2,235 |
|
|
|
1.92 |
% |
Cash balances in other banks |
|
|
124,984 |
|
|
|
1,264 |
|
|
|
4.10 |
% |
|
|
305,922 |
|
|
|
172 |
|
|
|
0.23 |
% |
Funds sold |
|
|
3,490 |
|
|
|
55 |
|
|
|
6.39 |
% |
|
|
20,149 |
|
|
|
10 |
|
|
|
0.19 |
% |
Total interest-earning assets |
|
|
2,916,523 |
|
|
|
35,783 |
|
|
|
4.99 |
% |
|
|
2,901,313 |
|
|
|
22,784 |
|
|
|
3.20 |
% |
Noninterest-earning assets |
|
|
233,913 |
|
|
|
|
|
|
|
|
|
252,007 |
|
|
|
|
|
|
|
||||
Total assets |
|
$ |
3,150,436 |
|
|
|
|
|
|
|
|
$ |
3,153,320 |
|
|
|
|
|
|
|
||||
Interest-Bearing Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing transaction accounts |
|
$ |
757,480 |
|
|
|
2,946 |
|
|
|
1.58 |
% |
|
$ |
949,313 |
|
|
|
436 |
|
|
|
0.19 |
% |
Savings and money market deposits |
|
|
678,288 |
|
|
|
3,259 |
|
|
|
1.95 |
% |
|
|
660,721 |
|
|
|
331 |
|
|
|
0.20 |
% |
Time deposits |
|
|
740,774 |
|
|
|
5,573 |
|
|
|
3.05 |
% |
|
|
366,769 |
|
|
|
484 |
|
|
|
0.54 |
% |
Total interest-bearing deposits |
|
|
2,176,542 |
|
|
|
11,778 |
|
|
|
2.19 |
% |
|
|
1,976,803 |
|
|
|
1,251 |
|
|
|
0.26 |
% |
Borrowings and repurchase agreements |
|
|
62,585 |
|
|
|
786 |
|
|
|
5.09 |
% |
|
|
29,547 |
|
|
|
393 |
|
|
|
5.40 |
% |
Total interest-bearing liabilities |
|
|
2,239,127 |
|
|
|
12,564 |
|
|
|
2.28 |
% |
|
|
2,006,350 |
|
|
|
1,644 |
|
|
|
0.33 |
% |
Noninterest-bearing deposits |
|
|
514,566 |
|
|
|
|
|
|
|
|
|
728,134 |
|
|
|
|
|
|
|
||||
Total funding sources |
|
|
2,753,693 |
|
|
|
|
|
|
|
|
|
2,734,484 |
|
|
|
|
|
|
|
||||
Noninterest-bearing liabilities |
|
|
43,749 |
|
|
|
|
|
|
|
|
|
38,797 |
|
|
|
|
|
|
|
||||
Shareholders’ equity |
|
|
352,994 |
|
|
|
|
|
|
|
|
|
380,039 |
|
|
|
|
|
|
|
||||
Total liabilities and shareholders’ equity |
|
$ |
3,150,436 |
|
|
|
|
|
|
|
|
$ |
3,153,320 |
|
|
|
|
|
|
|
||||
Net interest spread (4) |
|
|
|
|
|
|
|
|
2.71 |
% |
|
|
|
|
|
|
|
|
2.86 |
% |
||||
Net interest income/margin (5) |
|
|
|
|
$ |
23,219 |
|
|
|
3.24 |
% |
|
|
|
|
$ |
21,140 |
|
|
|
2.97 |
% |
||
_____________________
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)
First quarter 2023 Earnings Release
|
|
For the three months ended |
|
|||||||||||||||||
|
|
3/31/2023 |
|
|
12/31/2022 |
|
|
9/30/2022 |
|
|
6/30/2022 |
|
|
3/31/2022 |
|
|||||
Annualized pretax preprovision return on assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Annualized return on assets (GAAP) |
|
|
0.83 |
% |
|
|
1.31 |
% |
|
|
1.01 |
% |
|
|
1.28 |
% |
|
|
1.37 |
% |
Effect of income tax and provision expense |
|
|
0.51 |
% |
|
|
0.55 |
% |
|
|
0.36 |
% |
|
|
0.42 |
% |
|
|
0.24 |
% |
Annualized pretax preprovision return on assets |
|
|
1.34 |
% |
|
|
1.86 |
% |
|
|
1.37 |
% |
|
|
1.70 |
% |
|
|
1.61 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Annualized return on tangible common equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Annualized return on equity (GAAP) |
|
|
7.41 |
% |
|
|
11.78 |
% |
|
|
8.76 |
% |
|
|
11.08 |
% |
|
|
11.39 |
% |
Effect of goodwill and other intangibles |
|
|
1.10 |
% |
|
|
1.81 |
% |
|
|
1.29 |
% |
|
|
1.66 |
% |
|
|
1.63 |
% |
Return on tangible common equity |
|
|
8.51 |
% |
|
|
13.59 |
% |
|
|
10.05 |
% |
|
|
12.74 |
% |
|
|
13.02 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tangible book value per share of common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Book value per share of common stock (GAAP) |
|
$ |
16.57 |
|
|
$ |
16.31 |
|
|
$ |
15.84 |
|
|
$ |
16.31 |
|
|
$ |
16.62 |
|
Effect of goodwill and other intangibles |
|
|
(2.14 |
) |
|
|
(2.12 |
) |
|
|
(2.12 |
) |
|
|
(2.14 |
) |
|
|
(2.13 |
) |
Tangible book value per share of common stock |
|
$ |
14.43 |
|
|
$ |
14.19 |
|
|
$ |
13.72 |
|
|
$ |
14.17 |
|
|
$ |
14.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tangible book value per share of common stock less after-tax unrealized available for sale investment losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tangible book value per share of common stock |
|
$ |
14.43 |
|
|
$ |
14.19 |
|
|
$ |
13.72 |
|
|
$ |
14.17 |
|
|
$ |
14.49 |
|
Effect of after-tax unrealized losses |
|
|
2.13 |
|
|
|
2.38 |
|
|
|
2.44 |
|
|
|
1.69 |
|
|
|
1.04 |
|
Tangible book value per share of |
|
$ |
16.56 |
|
|
$ |
16.57 |
|
|
$ |
16.16 |
|
|
$ |
15.86 |
|
|
$ |
15.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tangible common equity to tangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity to Assets (GAAP) |
|
|
10.95 |
% |
|
|
11.36 |
% |
|
|
10.97 |
% |
|
|
11.55 |
% |
|
|
11.56 |
% |
Effect of goodwill and other intangibles |
|
|
(1.28 |
)% |
|
|
(1.33 |
)% |
|
|
(1.32 |
)% |
|
|
(1.36 |
)% |
|
|
(1.33 |
)% |
Tangible common equity to tangible assets |
|
|
9.67 |
% |
|
|
10.03 |
% |
|
|
9.65 |
% |
|
|
10.19 |
% |
|
|
10.23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tangible common equity to tangible assets less after-tax unrealized available for sale investment losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tangible common equity to tangible assets |
|
|
9.67 |
% |
|
|
10.03 |
% |
|
|
9.65 |
% |
|
|
10.19 |
% |
|
|
10.23 |
% |
Effect of after-tax unrealized losses |
|
|
1.27 |
% |
|
|
1.49 |
% |
|
|
1.52 |
% |
|
|
1.08 |
% |
|
|
0.65 |
% |
Tangible common equity to tangible assets less after-tax unrealized available for sale investment losses |
|
|
10.94 |
% |
|
|
11.52 |
% |
|
|
11.17 |
% |
|
|
11.27 |
% |
|
|
10.88 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted annualized noninterest expense as a percentage of average assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Annualized noninterest expense as a percentage of average assets |
|
|
2.45 |
% |
|
|
2.11 |
% |
|
|
2.26 |
% |
|
|
2.19 |
% |
|
|
2.28 |
% |
Effect of operational recoveries (losses) |
|
|
0.00 |
% |
|
|
0.09 |
% |
|
|
-0.28 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
Effect of the reversal of executive incentives |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.10 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
Adjusted annualized noninterest expense as a percentage of average assets |
|
|
2.45 |
% |
|
|
2.20 |
% |
|
|
2.08 |
% |
|
|
2.19 |
% |
|
|
2.28 |
% |
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 March 31, 2023, on a consolidated basis, CapStar had total assets of $3.2 billion, total loans of $2.4 billion, total deposits of $2.8 billion, and shareholders’ equity of $353.9 million. Visit www.capstarbank.com for more information.
NON-GAAP MEASURES
Certain releases may include financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information may include certain operating performance measures, which exclude charges that are not considered part of recurring operations. Such measures may include: “Annualized pre-tax pre-provision return on assets”, “Annualized return on tangible common equity”, “Tangible book value per share of common stock,” “Tangible book value per share of common stock less after-tax unrealized losses”, “Tangible common equity to tangible assets”, “Tangible common equity to tangible assets less after-tax unrealized available for sale investment losses”, “Adjusted annualized noninterest expense as a percentage of average assets”, or other measures.
Management may include 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.
FORWARD-LOOKING STATEMENTS
This investor presentation contains forward-looking statements, as defined by federal securities laws, including statements about CapStar Financial Holdings, Inc. (“CapStar”) and its financial outlook and business environment. All statements, other than statements of historical fact, included in this release and any oral statements made regarding the subject of this release, including in the conference call referenced herein, that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are “forward-looking statements“ within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1955. The words “expect“, “anticipate”, “intend”, “may”, “should”, “plan”, “believe”, “seek“, “estimate“ and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (I) deterioration in the financial condition of borrowers of the Company and its subsidiaries, resulting in significant increases in loan losses and provisions for those losses; (II) the ability to grow and retain low-cost, core deposits and retain large, uninsured deposits, including during times when the Company is seeking to lower rates it pays on deposits; (III) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on the Company’s results, including as a result of compression to net interest margin; (IV) fluctuations or differences in interest rates on loans or deposits from those that the Company is modeling or anticipating, including as a result of the Company’s inability to better match deposit rates with the changes in the short term rate environment, or that affect the yield curve; (V) difficulties and delays in integrating required businesses or fully realizing cost savings or other benefits from acquisitions; (VI) the Company‘s ability to profitably grow its business and successfully execute on its business plans; (VII) any matter that would cause the Company to conclude that there was impairment of any asset, including goodwill or other intangible assets; (VIII) the vulnerability of the Company’s network and online banking portals, and the systems of customers or parties with whom the Company contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (IX) the availability of and access to capital; and (X) general competitive, economic, political and market conditions. Additional factors which could affect the forward-looking statements can be found in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, filed with the SEC. The Company disclaims any obligation to update or revise any forward-looking statements contained in this press release (we speak only as of the date hereof ), whether as a result of new information, future events, or otherwise.
First Quarter 2023 Earnings Call April 21, 2023
FORWARD-LOOKING STATEMENTS This investor presentation contains forward-looking statements, as defined by federal securities laws, including statements about CapStar Financial Holdings, Inc. (“CapStar”) and its financial outlook and business environment. All statements, other than statements of historical fact, included in this release and any oral statements made regarding the subject of this release, including in the conference call referenced herein, that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are “forward-looking statements“ within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1955. The words “expect“, “anticipate”, “intend”, “may”, “should”, “plan”, “believe”, “seek“, “estimate“ and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (I) deterioration in the financial condition of borrowers of the Company and its subsidiaries, resulting in significant increases in loan losses and provisions for those losses; (II) the effects of the emergence of widespread health emergencies or pandemics, including the magnitude and duration of the Covid-19 pandemic and its impact on general economic and financial market conditions and on the Company’s customer’s business, results of operations, asset quality and financial condition; (III) the ability to grow and retain low-cost, core deposits and retain large, uninsured deposits, including during times when the Company is seeking to lower rates it pays on deposits; (IV) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on the Company’s results, including as a result of compression to net interest margin; (V) fluctuations or differences in interest rates on loans or deposits from those that the Company is modeling or anticipating, including as a result of the Company’s inability to better match deposit rates with the changes in the short term rate environment, or that affect the yield curve; (VI) difficulties and delays in integrating required businesses or fully realizing cost savings or other benefits from acquisitions; (VII) the Company‘s ability to profitably grow its business and successfully execute on its business plans; (VIII) any matter that would cause the Company to conclude that there was impairment of any asset, including goodwill or other intangible assets; (IX) the vulnerability of the Company’s network and online banking portals, and the systems of customers or parties with whom the Company contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (X) the availability of and access to capital; (XI) adverse results (including costs, fines, reputational harm, inability to obtain necessary approvals, and/or other negative affects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company’s participation in and execution of government programs related to the Covid-19 pandemic; and (XII) general competitive, economic, political and market conditions. Additional factors which could affect the forward-looking statements can be found in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, filed with the SEC. The Company disclaims any obligation to update or revise any forward-looking statements contained in this press release (we speak only as of the date hereof ), whether as a result of new information, future events, or otherwise. NON-GAAP MEASURES This investor presentation includes financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information may include certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations. Such measures may 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”, "Tangible common equity to tangible assets" or other measures. Management may include 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. Disclosures
1Q23 results Earnings per share of $0.30 and ROE of 7.41% Includes $2MM provision for credit losses on Signature Bank sub debt, adversely impacting EPS by $0.07 Continued low credit cost Focus on deposits and liquidity sources Liquidity sources remain strong with $1.5 billion of on or off-balance sheet liquidity sources Total Deposits increased $70MM or 11% annualized for the quarter driven by $57MM in customer deposits and $13MM in wholesale funding 66.1% of deposits are insured (59.3%) or collateralized (6.8%) Proactively managing risk Managing through a complex operating environment In the current environment, deposit rates have risen faster than earning asset yields which could continue Asset quality remains strong with isolated past dues and low criticized and classified levels; tightening underwriting criteria and increasing monitoring with uncertain economic outlook Deploying capital in a disciplined manner Asheville, Chattanooga, Knoxville expansions performing well having approached $450MM in loans Returned $9.8MM to shareholders in the first quarter through share repurchases and dividends Highlights
Liquidity Position $ in millions 1Q23 On-Balance Sheet: Cash & Equivalents $ 176 Unpledged AFS Securities 173 Loans Held for Sale 32 Total On-Balance Sheet $ 381 Off Balance Sheet Capacity: FHLB $ 462 Fed Funds Lines 145 Brokered CDs 188 Fed Discount Window 316 Total Off-Balance Sheet $ 1,111 Temporary 12-24 Month Lift from Federal Reserve Bank Term Lending Facility 60 Total Available Sources $ 1,552 Available liquidity sources of $1.6 billion Securities portfolio is 12% of total assets and 99.7% categorized as available for sale Strong capital levels TCE 9.67% Leverage 11.20% CET1 12.07% Total Risk-based 14.20% $125MM of TriNet unintended use of liquidity EOP Brokered CDs were $372.8MM, an increase of $14.6MM over December 31, 2022 EOP FHLB borrowings were $55.5MM, an increase of $40.5MM Have not accessed the Bank Term Funding Program
Deposit Portfolio Growth Stabilizing deposit balances for the quarter: EOP Customer Deposits increased $57MM or 10% annualized vs. 4Q22 Average Customer deposits declined $78MM or 13% annualized vs. 4Q22 Opened 583 new accounts during 1Q23 with average account size increasing slightly Stable funding from Correspondent banking Solid pipeline as we continue to focus on operating relationships and deposit growth opportunities Average Balance/Account by Segment In thousands 1Q22 2Q22 3Q22 4Q22 1Q23 Consumer $ 22 $ 21 $ 21 $ 20 $ 20 Commercial 147 144 136 126 126 Correspondent 5,126 3,868 2,766 2,840 2,823 Total Customer Deposits $ 48 $ 45 $ 45 $ 46 $ 47
As of March 31, 2023, total Sub-Debt of $66MM book value, $5.2MM unrealized loss All were purchased with and currently have investment grade ratings Began purchasing in 2019 as bridge to transition away from SNCs and participations until developed internal loan origination capabilities Most recent purchase was in April 2022 as we continued to purchase to put excess deposits in lower duration securities Conservative underwriting guidelines: Investment grade Strong franchise Diversity by issuer; small limit with $2.2MM average holding by issuer with $5MM being the largest Geographic diversification: 19 states Credit, capital, liquidity, profitability thresholds No First Republic, Western Alliance, etc. Bank Subordinated Debt Portfolio
1Q23 Financial Results
Financial Results (Dollars in millions, except per share data) GAAP 1Q23 Favorable/(Unfavorable) 4Q22 1Q22 Net Interest Income $23.22 -7% 10% Noninterest Income $6.27 0% -31% Revenue $29.49 -6% -2% Noninterest Expense $19.05 -15% -7% Pre-tax Pre-provision Income $10.44 -29% -16% Provision for Credit Losses $2.44 -58% -411% Net Income $6.45 -38% -40% Diluted Earnings per Share $0.30 -37% -38%
1Q23 4Q22 1Q22 Profitability Net Interest Margin(1) 3.24% 3.44% 2.97% Efficiency Ratio(2) 64.60% 53.23% 58.67% Pretax Preprovision Income / Assets(3) 1.34% 1.86% 1.61% Return on Average Assets 0.83% 1.31% 1.37% Return on Average Tangible Equity 8.51% 13.59% 13.02% Growth Total Assets (Avg) $3,150 $3,125 $3,153 Growth Total Deposits (Avg) $2,691 $2,663 $2,705 Total Loans HFI (Avg) $2,348 $2,309 $2,002 Diluted Earnings per Share $0.30 $0.47 $0.48 Tangible Book Value per Share $14.43 $14.19 $14.49 Soundness Net Charge-Offs to Average Loans (Annualized) 0.03% 0.03% 0.01% Non-Performing Assets / Loans + OREO 0.42% 0.46% 0.18% Allowance for Credit Losses on Loans 1.05% 1.03% 1.02% Common Equity Tier 1 Capital 12.07% 12.61% 13.58% Total Risk Based Capital 14.20% 14.51% 15.60% Key Performance Indicators Calculated on a tax equivalent basis. Efficiency ratio is Noninterest expense divided by the sum of net interest income and noninterest income. Pre-tax Pre-provision ROA calculated as ROA excluding the effect of income tax expense and provision expense. (Dollars in millions, except for per share data)
Loan Portfolio Growth Average HFI loan growth of 6.8% and 16.6% EOP linked-quarter annualized 1Q23 production of $128MM (annualized $521MM) in HFI loans 1Q23 - $128MM 2022 - $721MM 2021 - $674MM 2020 - $445MM New origination yields Fixed – 6.77% Variable – 7.37% Total - 7.08% Commercial loan pipeline has slowed due to reduced market demand and our cutback in CRE; current pipeline approximately $220MM Loan HFI Composition (EOP) End of Period Balances as of March 31, 2023 (1) Commercial and Industrial includes owner occupied commercial real estate (1)
Net Interest Income / Margin(1) Calculated on a tax equivalent basis. 1Q23 NIM of 3.24% declined 20 bps vs 4Q22 due to increased deposit pricing pressure Deposit costs increased 58 bps vs 4Q22 1Q23 loan yield increased 46 bps vs 4Q22 Disciplined pricing with 1Q23 spread of ~2.18% vs. FHLB funds transfer pricing NII and NIM outlook Continued NIM pressure reflecting accelerating deposit betas due to elevated competitive pricing and deposit shift into higher cost categories
Loan Portfolio Performance (1) Net charge-offs remained low totaling $165K, or 0.03% for the first quarter 2023 Within delinquencies: $5.8MM related to one relationship which are 30 days past due and the company believes there is nominal risk Total Criticized and Classified loans increased 45 bps due to a single credit. Loan is current and fully collateralized
Allowance for Credit Losses on Loans As a result of adopting CECL on January 1, 2023, increased the allowance on credit losses on loans by $1.5MM and the reserve for off-balance sheet exposures by $3.4MM. Provision for Credit Losses of $2.44MM for the quarter comprised of: $2.0MM provision for sub-debt loss (Signature Bank) $0.1MM provision due to change in loan composition $0.4MM provision for unfunded commitments The Allowance for Unfunded Commitments as of 1Q23 was $4.1MM, or 0.47% of unfunded commitments
Noninterest Income Three Months Ended Three Months Ended (Dollars in thousands) March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 Noninterest Income Deposit Service Charges $ 1,368 $ 1,206 $ 1,251 $ 1,182 $ 1,142 Interchange and Debit Transaction Fees 1,038 1,250 1,245 1,336 1,222 Mortgage Banking 1,293 637 765 1,705 1,966 Tri-Net - 39 (2,059) (73) 2,171 Wealth Management 374 403 385 459 440 SBA Lending 1,091 1,446 560 273 222 Net Gain on Sale of Securities 5 1 7 0 0 Other 1,106 1,303 1,118 994 1,926 Total Noninterest Income $ 6,275 $ 6,285 $ 3,272 $ 5,876 $ 9,089 Average Assets $ 3,150,436 $ 3,124,928 $ 3,146,841 $ 3,128,864 $ 3,153,320 Noninterest Income / Average Assets 0.81% 0.80% 0.41% 0.75% 1.17% Revenue 29,494 31,244 28,825 $ 30,316 $ 30,229 % of Revenue 21% 20% 11% 19% 30% Stable deposit service charge and interchange revenue Mortgage gain on sale revenue improvement beginning to reflect return to more normalized margins and modestly increasing originations Tri-Net successfully completed a single origination that was sold at a premium in early 2Q23 1Q23 SBA Lending originations include approximately $750K of additional fees to be recognized likely in 2Q23 and 3Q23 Other down due to lower SBIC income Q1 ($209K) and Gain on Sale of OREO in 4Q22 of $95K
Residential Mortgage Income Mortgage origination volumes have increased 19% from 4Q22 Anticipated to stay in this range in the present interest rate environment Our primary focus continue to be on purchase money volume Mortgage banking revenue increased $656K in 1Q23 with margins returning to more normal levels at 2.42% despite normal winter seasonality
SBA Expansion Target Borrower Profile: Business Acquisition Owner Occupied Real Estate Business Expansion Target Experience: Consistent BDO Origination >$20MM/year 10+ years line and support experience with a well-run SBA lender Risk Management: Robust servicing according to SBA requirements Robust SBA specific loan review by an external loan review firm on a regular basis Primarily originate variable rate term loans through the SBA 7(a) program generally with a guaranty of 75% of principal Four Revenue Drivers: Interest Income Gain on Sale Fees Servicing Income Packaging Income
Noninterest Expense Three Months Ended Three Months Ended (Dollars in thousands) March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 Noninterest Expense Salaries and Employee Benefits $ 10,341 $ 9,875 $ 8,712 $ 9,209 $ 10,269 Data Processing and Software 3,211 2,797 2,861 2,847 2,647 Occupancy 1,193 1,032 1,092 1,076 1,099 Equipment 822 753 743 783 709 Professional Services 788 522 468 506 679 Regulatory Fees 413 266 269 265 280 Amortization of Intangibles 384 399 415 430 446 Other 1,904 984 3,371 1,959 1,607 Total Noninterest Expense $ 19,054 $ 16,628 $ 17,931 $ 17,075 $ 17,736 Efficiency Ratio 64.60% 53.23% 62.21% 56.32% 58.67% Average Assets $ 3,150,436 $ 3,124,928 $ 3,146,841 $ 3,128,864 $ 3,153,320 Noninterest Expense / Average Assets 2.45% 2.11% 2.26% 2.19% 2.28% FTE 401 397 387 391 397 Salaries and Employee Benefits increase includes the SBA expansion ($180K), increased payroll tax expense ($314K), lower deferred loan expense ($111K) Regulatory Fees increase due to increased FDIC expense Other expense increase due to $700K recovery in 4Q22 for operational loss and timing of marketing expenses.
Internal Investment Primary Focus – investing in our core business Seeking organic growth that meets or exceeds our cost of capital Chattanooga, Knoxville, Asheville and Rutherford/Williamson markets current loan outstandings ~$690MM Dividends Targeting 20-30% payout ratio Announced $0.11 dividend in 1Q23 Share Repurchase At times, our stock is our best investment Purchased 465,834 shares through March 31, 2023 Announced a new $10.0MM buyback authorization with $5.4MM remaining M&A Must have strong strategic rationale Disciplined pricing Capital Allocation Strategies 1 2 3 (1) (1) (1) (1) (1) Source: S&P Capital IQ, Peer Medians based on Selected Nationwide Major Exchange Banks and Thrifts with Assets $2.0 Billion - $6.5 Billion as of 4Q22. 4
Portfolio Diversification and CRE Detail
Focused on small to medium-sized businesses and consumer lending Diversified by type, industry and geography Experienced lenders and underwriters Collateral and personal guaranties standard Participations avoided Big bets discouraged Balanced Loan Portfolio Loan Composition (EOP) End of Period Balances as of March 31, 2023 Total of $2.4B (1) Commercial & Industrial includes owner occupied real estate
CRE Unfunded Funded $ in millions End of Period Balances as of March 31, 2023 $944MM End of Period Balances as of March 31, 2023 $209MM
$130MM portfolio, with over 99% of balances in-market Average loan size of $2.8MM Only 11% of loan balances are in Central Business Districts Market data: Chattanooga – 15% of portfolio CBD – 78% Non-CBD – 22% Knoxville – 3% of portfolio CBD – 0% Non-CBD – 100% Nashville – 64% of portfolio CBD – 15% Non-CBD – 85% Other – 18% of portfolio CBD – 6% Non-CBD – 94% CRE Office Portfolio (nonowner occupied)
Larger projects, typically with professional developers or specialized R/E types (i.e. multi-family, hotels) Equity of 35-45% Amortization terms up to 30 years Single location projects limited to $20 mil maximum DSC minimum of 1.15x for multi-family; 1.20x and above for other property types Usually limited guaranties; non-recourse is not uncommon upon stabilization. Smaller projects, generally less than $5 mil Equity of 20% or more Amortization terms typically 20 years or less Single location projects limited to $20 mil maximum DSC minimum of 1.25x or more, depending on property type Full guaranties New originations are packaged and sold, but sometimes strategically kept on the balance sheet Only credit grade tenants with leases of 10 or more years Average equity of 30-35% Amortization up to 30 years DSC target of 1.4x to 1.7x Full and limited guaranties CRE General Underwriting Guidelines by Line of Business CRE Division $501MM (53%) Markets $338MM (36%) Tri-Net $105MM (11%) Outstanding balances as of 3/31/2023.
CRE Maturity Schedule $ In millions Maturity Schedule CRE Category 2023 2024 2025 >2025 MultiFamily $2.2 $73.6 $90.4 $156.3 Retail 3.1 16.1 18.7 195.3 Hospitality 52.2 7.2 20.0 62.9 Office 11.2 7.1 15.9 103.2 Land 63.9 25.3 24.3 22.3 Warehouse/Industrial 0.3 0.0 14.0 71.9 Storage 0.0 0.3 0.0 43.6 Healthcare 0.0 4.6 2.8 21.3 Other 4.9 0.2 5.8 12.1 Total $137.7 $134.4 $192.1 $688.8
Annual reviews are done for all relationships with at least $1.5 mil in total bank exposure External Loan Reviews are performed two times per year Leases are reviewed during underwriting and periodically thereafter. Rollover risk is analyzed at inception and during annual reviews. Detailed market studies are reviewed during underwriting Repayment capacity is stressed for interest rate and occupancy sensitivity during underwriting Concentration limits are specified for various types of CRE loans and each segment is reviewed on a monthly basis CRE Review Process
Appendix: Other Financial Results and Non-GAAP Reconciliations
(Dollars in thousands, except per share information) March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 TANGIBLE EQUITY Total Shareholders’ Equity $ 353,911 $ 354,182 $ 347,365 $ 357,735 $ 368,917 Less: Intangible Assets 45,685 46,069 46,468 46,883 47,313 Tangible Equity 308,226 308,113 300,897 310,852 321,604 TANGIBLE EQUITY TO TANGIBLE ASSETS Tangible Equity $ 308,226 $ 308,113 $ 300,897 $ 310,852 $ 321,604 Total Assets 3,232,751 3,117,169 3,165,706 3,096,537 3,190,749 Less: Intangible Assets 45,685 46,069 46,468 46,883 47,313 Tangible Assets 3,187,066 3,071,100 3,119,238 3,049,654 3,143,436 Tangible Equity to Tangible Assets 9.67% 10.03% 9.65% 10.19% 10.23% TANGIBLE BOOK VALUE PER SHARE, REPORTED Tangible Equity $ 308,226 $ 308,113 $ 300,897 $ 310,852 $ 321,604 Shares of Common Stock Outstanding 21,361,614 21,714,380 21,931,624 21,934,554 22,195,071 Tangible Book Value Per Share, Reported $ 14.43 $ 14.19 $ 13.72 $14.17 $14.49 Non-GAAP Financial Measures
Three Months Ended Three Months Ended (Dollars in thousands, except per share information) March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 RETURN ON AVERAGE TANGIBLE EQUITY (ROATE) Total Average Shareholders’ Equity $ 352,994 $ 348,027 $ 364,138 $ 361,150 $ 380,039 Less: Average Intangible Assets 45,935 46,328 46,737 47,160 47,604 Average Tangible Equity 307,059 301,699 317,401 313,990 332,435 Net Income 6,446 10,333 8,039 9,972 10,673 Return on Average Tangible Equity (ROATE) 8.51% 13.59% 10.05% 12.74% 13.02% Non-GAAP Financial Measures
Three Months Ended Three Months Ended (Dollars in thousands, except per share information) March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 ADJUSTED NET INCOME Net Income $ 6,446 $ 10,333 $ 8,039 $ 9,972 $ 10,673 Add: Operational Losses / (Recoveries) (734) 2,197 - - Add: Tri-Net Losses 2,059 - - Less: Executive Incentive Reversal (770) - - Less: Income Tax Impact 143 (680) - - Adjusted Net Income $ 6,446 $ 9,742 $ 10,846 $ 9,972 $ 10,673 ADJUSTED DILUTED NET INCOME PER SHARE Adjusted Net Income $ 6,446 $ 9,742 $ 10,846 $ 9,972 $ 10,673 Average Diluted Shares Outstanding 21,595,182 21,926,821 21,988,085 22,074,260 22,254,644 Adjusted Diluted Net Income per Share $0.30 $0.44 $0.49 $0.45 $0.48 ADJUSTED RETURN ON AVERAGE ASSETS (ROAA) Adjusted Net Income $ 6,446 $ 9,742 $ 10,846 $ 9,972 $ 10,673 Total Average Assets 3,150,436 3,124,928 3,146,841 3,128,864 3,153,320 Adjusted Return on Average Assets (ROAA) 0.83% 1.24% 1.37% 1.28% 1.37% Non-GAAP Financial Measures Adjusted results are non-GAAP financial measures that adjust GAAP reported net income and other metrics for certain income and expense items as outlined in the non-GAAP reconciliation calculations above using an income tax rate of 19.50%.
Three Months Ended Three Months Ended (Dollars in thousands, except per share information) March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 ADJUSTED NONINTEREST EXPENSE Noninterest Expense $ 19,054 $ 16,628 $ 17,931 $ 17,075 $ 17,736 Less: Operational (Losses) / Recoveries 734 (2,197) - - Add: Executive Incentive Reversal - - 770 - - Adjusted Noninterest Expense $ 19,054 $ 17,362 $ 16,504 $ 17,075 $ 17,736 ADJUSTED NONINTEREST INCOME Noninterest Income $ 6,275 $ 6,285 $ 3,272 $ 5,876 $ 9,089 Add: Tri-Net Loss - - 2,059 - - Adjusted Noninterest Income $ 6,275 $ 6,285 $ 5,331 $ 5,876 $ 9,089 ADJUSTED EFFICIENCY RATIO Adjusted Noninterest Expense $ 19,054 $ 17,362 $ 16,504 $ 17,075 $ 17,736 Net Interest Income 23,219 24,959 25,553 24,440 21,140 Adjusted Noninterest Income 6,275 6,285 5,331 5,876 9,089 Adjusted Total Revenues 29,494 31,244 30,884 30,316 30,229 Adjusted Efficiency Ratio 64.60% 55.57% 53.44% 56.32% 58.67% Non-GAAP Financial Measures Adjusted results are non-GAAP financial measures that adjust GAAP reported net income and other metrics for certain income and expense items as outlined in the non-GAAP reconciliation calculations above using an income tax rate of 19.50%.
CapStar Financial Holdings, Inc. 1201 Demonbreun Street, Suite 700 Nashville, TN 37203 Mail: P.O. Box 305065 Nashville, TN 37230-5065 (615) 732-6400 Telephone www.capstarbank.com (615) 732-6455 Email: ir@capstarbank.com Contact Information Investor Relations Executive Leadership Mike Fowler Chief Financial Officer CapStar Financial Holdings, Inc. (615) 732-7404 Email: mike.fowler@capstarbank.com Corporate Headquarters
