Spirit of Texas Bancshares, Inc. Reports First Quarter 2020 Financial Results
CONROE, Texas, April 29, 2020 /PRNewswire/ -- Spirit of Texas Bancshares, Inc. (NASDAQ: STXB) ("Spirit" or the "Company"), reported net income of $4.1 million in the first quarter of 2020 representing diluted earnings per share of $0.22, compared to net income of $3.8 million in the first quarter of 2019, representing diluted earnings per share of $0.30. Net income for the first quarter of 2020 was impacted by $1.6 million of merger related expenses, $486 thousand of one-time employee related expenses and an increased provision for loan losses related to the COVID-19 pandemic, partially offset by a $575 thousand tax benefit.
Our Response to COVID-19
Dean Bass, Spirit's Chairman and Chief Executive Officer, stated, "For over a decade we have cultivated a culture where each employee is viewed as a valued family member and each customer is appreciated and respected. We view the current environment as an opportunity to demonstrate through action our commitment to provide a pillar of strength upon which our customers and employees may lean in their time of need and to be the bedrock upon which our communities can rebuild when challenging times recede. We have taken the necessary measures outlined below to protect our valued employees while still serving our customers and our communities:
-- Lobbies are closed and all banking activities are performed by
appointment and/or via drive thru transactions;
-- All of our employees are encouraged to work remotely when possible and
are provided paid sick leave to ensure that they stay home when ill
without fear of financial stress;
-- All of our customers have access to funds via online banking, drive thru
windows, and a network of over 55,000 ATM's nationwide;
-- We are committed to supporting our customers by lending in good times
and in bad and are currently working with all loan customers to address
their needs and concerns; and
-- We have and will continue to work diligently to connect our customers
with government assistance programs as they become available.
"While the measures outlined above are only a small part of our efforts to ease the distress felt by our employees, customers, and communities, we are committed to taking whatever steps are necessary in the future to not only persevere, but thrive," concluded Bass.
First Quarter 2020 Financial and Operational Highlights
-- Successfully completed the branch acquisition with Simmons Bank (the
"branch acquisition") to expand our footprint into the San Antonio-New
Braunfels, Tilden and Austin markets. The transaction added
approximately, $261 million in loans and $139 million in deposits.
-- Capital continues to remain strong with a Tier 1 capital leverage ratio
of 10.79% at Spirit of Texas Bank SSB (the "Bank") and 10.96% at the
Company on a consolidated basis.
-- At March 31, 2020, reported and tax equivalent net interest margin((1))
were 4.38% and 4.40%, respectively.
-- At March 31, 2020, return on average asset was 0.68% annualized,
primarily due to merger related expenses and increased provision for
loan losses for the first quarter of 2020 related to COVID-19.
-- At March 31, 2020, book value per share was $19.25 and tangible book
value per share((1)) was $14.28.
-- At March 31, 2020, total stockholders' equity to total assets was 13.59%
and tangible stockholders' equity to tangible assets((1)) was 10.44%.
Loan Portfolio and Composition
During the first quarter of 2020, gross loans grew to $2.01 billion, an increase of 13.9% from $1.77 billion as of December 31, 2019, and an increase of 78.8% from $1.13 billion as of March 31, 2019. Loan growth, quarter over quarter, was primarily driven by the recent branch acquisition, which added $260.7 million in loans to the acquired loan portfolio. Organic loans growth during the first quarter of 2020 was $8.8 million which includes new originations of $59.0 million, or 19.9% annualized and participations sold of $50.2 million.
We have identified and are monitoring the industries in our loan portfolio that will be significantly impacted by the COVID-19 pandemic. The industries and related exposures currently being monitored by our credit administration personnel include: retail strip centers, hospitality, restaurants and direct and indirect oil exposure. Retail strip centers consisted of $116.2 million, or 5.8% of the loan portfolio, at March 31, 2020. Hospitality exposure consisted of $90.1 million, or 4.5% of the loan portfolio, at March 31, 2020. At March 31, 2020, restaurant exposure totaled $50.6 million, or 2.5% of the loan portfolio. Finally, total oil exposure in the loan portfolio at March 31, 2020, was $73.4 million, or 3.6% of the loan portfolio.
Subsequent to quarter end, we have approved and funded approximately $500 million of Paycheck Protection Program ("PPP") loans under the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"). This program has allowed us to assist roughly 3,000 of our customers and has the potential to have saved as many as 60,000 jobs. We intend to continue accepting and processing PPP loan applications for as long as funding for the program remains available. We are currently utilizing the Federal Reserve's PPP Liquidity Facility to fund these PPP loans, which is neutral to our capital position.
Asset Quality
Asset quality continued to remain strong in the first quarter of 2020. The provision for loan losses recorded for the first quarter of 2020 was $1.2 million, which served to increase the allowance to $7.6 million, or 0.38% of the $2.01 billion in gross loans outstanding as of March 31, 2020. The majority of the provision expense for the first quarter of 2020 related to increasing qualitative reserves in response to the current economic environment as opposed to a deterioration in credit quality or an increase in impaired loan balances. The coverage ratio on the organic portfolio was 0.63% of the $1.20 billion in organic loans outstanding as of March 31, 2020. As an emerging growth company, we have opted to delay the adoption of CECL until 2023. Under our current incurred loss model, our reserves are based upon an estimate of loss events which have occurred as opposed to forecasting future loss events.
Nonperforming loans to loans held for investment ratio as of March 31, 2020 was 0.38% compared to 0.37% as of December 31, 2019, and 0.52% as of March 31, 2019. Annualized net charge-offs were six basis points for the first quarter of 2020, compared to 21 basis points for the first quarter of 2019.
As of the date of this release, we have received and approved COVID-19 related loan relief requests, including periods of interest only payments, full payment deferrals, and escrow deferrals associated with loans with an unpaid principal balance of approximately $418 million. While these approvals were initially given for a period of 90 days to ease the impact of business closures and reduced demand, we continue to stay in contact with our borrowers and monitor their long-term financial stability and our collateral position.
Deposits and Borrowings
Deposits totaled $2.08 billion as of March 31, 2020, an increase of 7.7% from $1.93 billion as of December 31, 2019, and an increase of 72.6% from $1.20 billion as of March 31, 2019. Noninterest-bearing demand deposits increased $42.2 million, or 9.5%, from December 31, 2019, and increased $228.6 million, or 88.5% from March 31, 2019. Noninterest-bearing demand deposits represented 23.4% of total deposits as of March 31, 2020, up slightly from 23.1% of total deposits as of December 31, 2019, and 21.5% of total deposits as of March 31, 2019. The average cost of deposits was 0.93% for the first quarter of 2020, representing a five basis point decrease from the fourth quarter of 2019 and a twelve basis point decrease from the first quarter of 2019.
Borrowings increased by $8.1 million during the first quarter of 2020 to $113.3 million due primarily to drawing down on our holding company's third-party line of credit to support the Company's stock repurchase plan. Borrowings totaled 4.5% of total assets at March 31, 2020, compared to 4.4% at December 31, 2019 and 5.1% at March 31, 2019.
Net Interest Margin and Net Interest Income
The net interest margin for the first quarter of 2020 was 4.38%, a decrease of two basis points from the fourth quarter of 2019 and 27 basis points from the first quarter of 2019. The tax equivalent net interest margin((1)) for the first quarter of 2020 was 4.40%, a decrease of three basis points from the fourth quarter of 2019 and a decrease of 29 basis points from the first quarter of 2019. The decline from the fourth quarter of 2019 is primarily due to rate resets on interest-earning assets as a result of decreases in interest rates set by the Federal Open Market Committee during the fourth quarter of 2019 and in March 2020, partially offset by the migration of our low-yielding excess cash into higher yielding loans through our recent branch acquisition.
Net interest income totaled $23.8 million for the first quarter of 2020, an increase of 7.1% from $22.2 million for the fourth quarter of 2019, and an increase of 54.2% from $15.4 million for the first quarter of 2019. Interest income totaled $28.8 million for the first quarter of 2020, an increase of 6.4% from $27.1 million for the fourth quarter of 2019, and an increase of 52.6% from $18.9 million for the first quarter of 2019. Interest and fees on loans increased by $2.2 million, or 8.9% from the fourth quarter of 2019, and increased by $10.3 million, or 60.1%, from the first quarter of 2019 due to organic and acquired growth in the loan portfolio. Interest expense was $5.0 million for the first quarter of 2020, an increase of 3.4% from $4.9 million for the fourth quarter of 2019, and an increase of 45.4% from $3.4 million for the first quarter of 2019. The increase in interest expense for the first quarter of 2020 was primarily due to growth in the deposit base from acquisitions partially offset by a decrease in the rate paid on interest-bearing liabilities.
Noninterest Income and Noninterest Expense
Noninterest income totaled $2.7 million for the first quarter of 2020, compared to $5.1 million for the fourth quarter of 2019; noting that the fourth quarter of 2019 contained $2.4 million in gain on sales of investment securities. Service charges and fees increased $165 thousand, quarter over quarter, primarily as a result of the recent branch acquisition. Additionally, during the first quarter of 2020, we began offering our customers interest rate swaps which are administered by a third-party correspondent bank. The Bank is not a counterparty in the swap, but instead earns a referral fee when our customer enters into the interest rate swap with the correspondent bank. This new product generated $580 thousand in fee income, which assisted in offsetting the decline in loan sales for the first quarter of 2020. SBA servicing fees, net were down $381 thousand, quarter over quarter, due to prepayments and fair value adjustments.
Noninterest expense totaled $21.0 million in the first quarter of 2020, an increase of 12.3% from $18.7 million in the fourth quarter of 2019. Of the $21.0 million of noninterest expense, $1.6 million was related to merger related expenses and $486 thousand was attributed to one-time employee related expenses.
The efficiency ratio was 79.06% in the first quarter of 2020, which included $1.6 million of merger related expenses and $486 thousand of one-time employee related expenses, compared to 68.40% in the fourth quarter of 2019, and 70.32% in the first quarter of 2019.
_______________________________________________________
(1) Adjusted Basic and Diluted Earnings Per Share, Tax Equivalent Net Interest Margin, Tangible Book Value Per Share, and Tangible
Stockholders' Equity to Tangible Assets Ratio are all non-GAAP measures. Spirit believes that for Adjusted Basic and Diluted
Earnings Per Share, the adjustments made to net income allow investors and analysts to better assess its basic and diluted earnings
per common share by removing the volatility that is associated with merger-related expenses and gain on sale of investment
securities that are unrelated to its core business. In Spirit's judgment, regarding Tax Equivalent Net Interest Margin, the fully
tax equivalent basis is the preferred industry measurement basis for net interest margin and that it enhances comparability of net
interest income arising from taxable and tax-exempt sources. Regarding Tangible Book Value Per Share and Tangible Stockholders'
Equity To Tangible Assets, Spirit believes that that these measures are important to many investors in the marketplace who are
interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill and other
intangible assets have the effect of increasing total book value while not increasing its tangible book value. The non-GAAP
financial measures that we discuss in this news release should not be considered in isolation or as a substitute for the most
directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the
non-GAAP financial measures that it discusses in this news release may differ from that of other banking organizations reporting
measures with similar names. You should understand how such other banking organizations calculate their financial measures similar or
with names similar to the non-GAAP financial measures Spirit has discussed in this news release when comparing such non-GAAP
financial measures. Please see a reconciliation to the nearest respective GAAP measures at the end of this news release.
Conference Call
Spirit of Texas Bancshares has scheduled a conference call to discuss its first quarter 2020 results, which will be broadcast live over the Internet, on Thursday, April 30, 2020 at 12:00 p.m. Eastern Time / 11:00 a.m. Central Time. To participate in the call, dial 201-389-0867 and ask for the Spirit of Texas call at least 10 minutes prior to the start time, or access it live over the Internet at https://ir.sotb.com/news-events/ir-calendar. For those who cannot listen to the live call, a replay will be available through May 7, 2020 and may be accessed by dialing 201-612-7415 and using pass code 13702026#. Also, an archive of the webcast will be available shortly after the call at https://ir.sotb.com/news-events/ir-calendar for 90 days.
About Spirit of Texas Bancshares, Inc.
Spirit, through its wholly-owned subsidiary, Spirit of Texas Bank, provides a wide range of relationship-driven commercial banking products and services tailored to meet the needs of businesses, professionals and individuals. Spirit of Texas Bank has 41 locations in the Houston, Dallas/Fort Worth, Bryan/College Station, Austin, San Antonio-New Braunfels, Corpus Christi and Tyler metropolitan areas, along with offices in North Central Texas. Please visit https://www.sotb.com for more information.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended. Any statements about our expectations, beliefs, plans, predictions, protections, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Forward-looking statements are typically, but not exclusively, identified by the use of forward-looking terminology such as "believes," "expects," "could," "may," "will, "should," "seeks," "likely," "intends" "plans," "pro forma," "projects," "estimates" or "anticipates" or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: risks relating to the possibility that the expected benefits and synergies related to recent acquisitions may not materialize as expected; difficulty retaining key employees; business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; risks related to the integration of acquired businesses and any future acquisitions; our ability to successfully identify and address the risks associated with our recent, pending and possible future acquisitions; changes in management personnel; interest rate risk; credit risk associated with our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates and projections; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures and those of companies we acquire; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; the impact and duration of the COVID-19 pandemic; our participation in and execution of government programs related to the COVID-19 pandemic; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, and their application by our regulators; governmental monetary and fiscal policies; increases in our capital requirements; and other risks identified in Spirit's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the U.S. Securities and Exchange Commission (the "SEC") on March 16, 2020, and its other filings with the SEC.
While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.
Contacts:
Dennard Lascar Investor Relations
Ken Dennard / Natalie Hairston
(713) 529-6600
STXB@dennardlascar.com
SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
For the Three Months Ended
March 31, 2020
December 31, 2019
September 30, 2019
June 30, 2019
March 31, 2019
(Dollars in thousands, except per share data)
Interest income:
Interest and fees on loans $27,409 $25,160 $23,064 $22,204 $17,118
Interest and dividends on
investment securities 504 997 1,143 1,302 1,182
Other interest income 900 918 794 794 584
Total interest income 28,813 27,075 25,001 24,300 18,884
Interest expense:
Interest on deposits 4,507 4,434 4,097 3,938 3,071
Interest on FHLB advances and
other borrowings 508 416 425 611 378
Total interest expense 5,015 4,850 4,522 4,549 3,449
Net interest income 23,798 22,225 20,479 19,751 15,435
Provision for loan losses 1,171 775 900 332 849
Net interest income after
provision for loan losses 22,627 21,450 19,579 19,419 14,586
Noninterest income:
Service charges and fees 1,311 1,146 866 969 729
SBA loan servicing fees, net 10 391 234 40 264
Mortgage referral fees 202 232 173 198 110
Gain on sales of loans, net 464 675 1,151 1,384 804
Gain (loss) on sales of
investment securities 2,448 1,053 1,081
Other noninterest income 725 162 257 131 69
Total noninterest income 2,712 5,054 2,681 3,775 3,057
Noninterest expense:
Salaries and employee benefits 11,789 10,684 9,502 8,765 7,124
Occupancy and equipment
expenses 2,315 2,222 1,710 1,690 1,262
Professional services 895 1,200 791 1,022 1,041
Data processing and network 743 936 884 731 485
Regulatory assessments and
insurance 402 265 (256) 315 98
Amortization of intangibles 946 1,006 1,015 1,006 603
Advertising 153 225 134 167 97
Marketing 160 131 136 132 139
Telephone expense 407 226 289 338 140
Conversion expense 1,477 180 314 453 1,151
Other operating expenses 1,673 1,584 1,037 1,206 864
Total noninterest expense 20,960 18,659 15,556 15,825 13,004
Income before income tax
expense 4,379 7,845 6,704 7,369 4,639
Income tax expense 305 1,676 1,374 1,542 829
Net income $4,074 $6,169 $5,330 $5,827 $3,810
Earnings per common share:
Basic $0.22 $0.35 $0.35 $0.42 $0.31
Diluted $0.22 $0.35 $0.34 $0.41 $0.30
Weighted average common shares
outstanding:
Basic 18,184,110 17,434,954 15,370,480 13,765,929 12,152,558
Diluted 18,441,977 17,830,538 15,771,249 14,236,244 12,607,445
SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
As of
March 31,
December 31,
September 30,
June 30, March 31,
2020 2019 2019 2019 2019
(Dollars in thousands)
Assets:
Cash and due from banks $33,946 $32,490 $28,822 $26,150 $19,397
Interest-bearing deposits in other banks 193,707 293,467 122,721 137,008 103,265
Total cash and cash equivalents 227,653 325,957 151,543 163,158 122,662
Time deposits in other banks 245 490 1,225 1,225
Investment securities:
Available for sale
securities, at
fair value 94,963 96,937 166,669 171,058 131,068
Total investment securities 94,963 96,937 166,669 171,058 131,068
Loans held for sale 7,765 3,989 2,784 2,583 6,300
Loans:
Loans held for investment 2,013,367 1,767,182 1,487,602 1,418,211 1,125,855
Less: allowance for loan and lease losses (7,620) (6,737) (6,565) (6,277) (6,569)
Loans, net 2,005,747 1,760,445 1,481,037 1,411,934 1,119,286
Premises and equipment, net 78,594 75,150 65,144 62,815 55,237
Accrued interest receivable 7,314 6,507 6,319 7,039 4,849
Other real estate owned and repossessed assets 3,731 3,653 1,042 1,324 518
Goodwill 79,009 68,503 43,086 43,889 18,253
Core deposit intangible 10,536 11,472 11,628 12,583 7,954
SBA servicing asset 3,055 3,355 3,548 3,570 3,747
Deferred tax asset, net 48
Bank-owned life insurance 15,699 15,610 15,521 15,432 7,442
Federal Home Loan Bank and other bank stock, at
cost 5,660 8,310 6,233 6,190 5,264
Other assets 4,526 4,603 4,005 4,485 4,464
Total assets $2,544,497 $2,384,622 $1,959,784 $1,907,333 $1,487,044
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Transaction
accounts:
Noninterest-
bearing $487,060 $444,822 $366,209 $367,892 $258,440
Interest-bearing 878,279 803,557 593,064 569,839 363,326
Total transaction accounts 1,365,339 1,248,379 959,273 937,731 621,766
Time deposits 711,968 679,747 625,940 632,873 581,486
Total deposits 2,077,307 1,928,126 1,585,213 1,570,604 1,203,252
Accrued interest payable 1,218 1,219 1,002 1,134 737
Short-term borrowings 10,000
Long-term borrowings 103,276 105,140 74,165 89,398 75,536
Deferred tax liability, net 1,706 672 215 449
Other liabilities 5,173 3,760 2,451 2,087 3,094
Total liabilities 2,198,680 2,038,917 1,663,046 1,663,223 1,283,068
Stockholders' Equity:
Common stock 297,966 297,188 251,875 204,974 171,159
Retained earnings 52,213 48,139 41,970 36,640 30,813
Accumulated other comprehensive income (loss) 732 667 3,091 2,496 2,004
Treasury stock (5,094) (289) (198)
Total stockholders' equity 345,817 345,705 296,738 244,110 203,976
Total liabilities and stockholders'
equity $2,544,497 $2,384,622 $1,959,784 $1,907,333 $1,487,044
SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY
Loan Composition
(Unaudited)
As of
March 31,
December 31,
September 30, June 30, March 31,
2020 2019 2019 2019 2019
(Dollars in thousands)
Loans:
Commercial and industrial loans (1) $320,418 $282,949 $248,745 $197,774 $162,934
Real estate:
1-4 single family residential loans 382,900 375,743 321,044 281,514 284,780
Construction, land and development loans 405,661 259,384 233,830 176,567 169,919
Commercial real estate loans (including
multifamily) 821,952 753,812 597,415 671,900 423,900
Consumer loans and leases 22,398 22,769 17,663 20,745 21,631
Municipal and other loans 60,038 72,525 68,905 69,711 62,691
Total loans held in portfolio $2,013,367 $1,767,182 $1,487,602 $1,418,211 $1,125,855
(1) Balance includes $75.3
million, $74.2 million, $78.7
million, $71.3 million, and $73.5
million of the unguaranteed
portion of SBA loans as of March
31, 2020, December 31, 2019,
September 30, 2019,
June 30, 2019, and March 31,
2019, respectively.
SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY
Deposit Composition
(Unaudited)
As of
March 31,
December 31,
September 30, June 30, March 31,
2020 2019 2019 2019 2019
(Dollars in thousands)
Deposits:
Noninterest-bearing demand deposits $487,060 $444,822 $366,209 $367,892 $258,440
Interest-bearing demand deposits 334,302 370,467 303,037 292,550 127,182
Interest-bearing NOW accounts 28,376 28,204 8,626 7,638 7,509
Savings and money market accounts 515,601 404,886 281,401 269,651 228,635
Time deposits 712,011 679,747 625,940 632,873 581,486
Total deposits $2,077,307 $1,928,126 $1,585,213 $1,570,604 $1,203,252
SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY
Average Balances and Yields
(Unaudited)
Three Months Ended
March 31,
2020 2019
Average Interest/ Annualized
Average Interest/ Annualized
Balance (1) Expense Yield/Rate Balance (1) Expense Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Interest-earning deposits in other banks $231,616 $852 1.48% $92,892 $546 2.38%
Loans, including loans held for sale (2) 1,851,879 27,409 5.94% 1,105,177 17,118 6.28%
Investment securities and other 96,006 552 2.31% 148,035 1,220 3.34%
Total interest-earning assets 2,179,501 28,813 5.30% 1,346,104 18,884 5.69%
Noninterest-earning assets 217,060 110,334
Total assets $2,396,561 $1,456,438
Interest-bearing liabilities:
Interest-bearing demand deposits $335,669 $225 0.27% $128,059 $167 0.53%
Interest-bearing NOW accounts 27,632 26 0.38% 7,354 3 0.15%
Savings and money market accounts 443,449 1,012 0.92% 235,148 442 0.76%
Time deposits 685,689 3,244 1.90% 561,435 2,459 1.78%
FHLB advances and other borrowings 86,809 508 2.35% 67,149 378 2.29%
Total interest-bearing liabilities 1,579,248 5,015 1.27% 999,145 3,449 1.40%
Noninterest-bearing liabilities and
shareholders' equity:
Noninterest-bearing demand deposits 459,156 250,204
Other liabilities 12,265 5,232
Stockholders' equity 345,892 201,857
Total liabilities and stockholders' equity $2,396,561 $1,456,438
Net interest rate spread 3.99% 4.29%
Net interest income and margin $23,798 4.38% $15,435 4.65%
Net interest income and margin (tax equivalent)(3) $23,890 4.40% $15,573 4.69%
(1) Average balances presented
are derived from daily average
balances.
(2) Includes loans on nonaccrual
status.
(3) In order to make pretax
income and resultant yields on
tax-exempt loans comparable to
those on taxable loans, a tax-
equivalent adjustment has been
computed using a federal tax
rate of 21% for the three
months ended March 31, 2020 and
2019, respectively.
SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY
Average Balances and Yields
(Unaudited)
Three Months Ended
March 31, 2020
December 31, 2019
Average Interest/ Annualized
Average Interest/ Annualized
Balance (1) Expense Yield/Rate Balance (1) Expense Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Interest-earning deposits in other
banks 231,616 $852 1.48% $191,822 $854 1.77%
Loans, including loans held for sale
(2) 1,851,879 27,409 5.94% 1,655,206 25,160 6.03%
Investment securities and other 96,006 552 2.31% 156,840 1,061 2.68%
Total interest-earning assets 2,179,501 28,813 5.30% 2,003,868 27,075 5.36%
Noninterest-earning assets 217,060 196,873
Total assets $2,396,561 $2,200,741
Interest-bearing liabilities:
Interest-bearing demand deposits $335,669 $225 0.27% $334,819 $271 0.32%
Interest-bearing NOW accounts 27,632 26 0.38% 21,430 20 0.37%
Savings and money market accounts 443,449 1,012 0.92% 358,054 890 0.99%
Time deposits 685,689 3,244 1.90% 664,435 3,253 1.94%
FHLB advances and other borrowings 86,809 508 2.35% 79,174 416 2.08%
Total interest-bearing liabilities 1,579,248 5,015 1.27% 1,457,912 4,850 1.32%
Noninterest-bearing liabilities and
shareholders' equity:
Noninterest-bearing demand deposits 459,156 421,375
Other liabilities 12,265 3,795
Stockholders' equity 345,892 317,659
Total liabilities and stockholders'
equity $2,396,561 $2,200,741
Net interest rate spread 3.99% 4.04%
Net interest income and margin $23,798 4.38% $22,225 4.40%
Net interest income and margin (tax equivalent)(3) $23,890 4.40% $22,352 4.43%
(1) Average balances presented
are derived from daily average
balances.
(2) Includes loans on nonaccrual
status.
(3) In order to make pretax
income and resultant yields on
tax-exempt loans comparable to
those on taxable loans, a tax-
equivalent adjustment has been
computed using a federal tax
rate of 21% for the three
months ended March 31, 2020 and
December 31, 2019,
respectively.
SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures - Adjusted Net Income and Adjusted Basic and Diluted Earnings Per Share
(Unaudited)
As of or for the Three Months Ended
March 31, 2020
December 31, 2019
September 30, 2019
June 30, 2019
March 31, 2019
(Dollars in thousands, except per share data)
Basic and diluted earnings per
share -GAAP basis:
Net income available to common
stockholders $4,074 $6,169 $5,330 $5,827 $3,810
Weighted average number of
common shares -basic 18,184,110 17,434,954 15,370,480 13,765,929 12,152,558
Weighted average number of
common shares -diluted 18,441,977 17,830,538 15,771,249 14,236,244 12,607,445
Basic earnings per common share $0.22 $0.35 $0.35 $0.42 $0.31
Diluted earnings per common
share $0.22 $0.35 $0.34 $0.41 $0.30
Basic and diluted earnings per
share - Non-GAAP basis:
Net income $4,074 $6,169 $5,330 $5,827 $3,810
Pre-tax adjustments:
Noninterest income
Gain on sale of investment
securities (2,448) (1,053) (1,081)
Noninterest expense
Merger related expenses 1,614 821 1,094 1,165 1,778
Taxes:
NOL Carryback (575)
Tax effect of adjustments (331) 467 (193) 53 (146)
Adjusted net income $4,782 $5,009 $6,231 $5,992 $4,361
Weighted average number of
common shares -basic 18,184,110 17,434,954 15,370,480 13,765,929 12,152,558
Weighted average number of
common shares -diluted 18,441,977 17,830,538 15,771,249 14,236,244 12,607,445
Basic earnings per common share
- Non-GAAP basis $0.26 $0.29 $0.41 $0.44 $0.36
Diluted earnings per common
share - Non-GAAP basis $0.26 $0.28 $0.40 $0.42 $0.35
SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures - Net Interest Margin on a Fully Taxable Equivalent Basis
(Unaudited)
As of or for the Three Months Ended
March 31, 2020
December 31, 2019
September 30, 2019
June 30, 2019
March 31, 2019
(Dollars in thousands, except per share data)
Net interest margin -
GAAP basis:
Net interest income $23,798 $22,225 $20,479 $19,751 $15,435
Average interst-earning
assets 2,179,501 2,003,868 1,769,432 1,716,799 1,346,104
Net interest margin 4.38% 4.40% 4.59% 4.61% 4.65%
Net interest margin -
Non-GAAP basis:
Net interest income $23,798 $22,225 $20,479 $19,751 $15,435
Plus:
Impact of fully taxable
equivalent adjustment 92 127 153 112 138
Net interest income on a
fully taxable equivalent
basis $23,890 $22,352 $20,632 $19,863 $15,573
Average interst-earning
assets 2,179,501 2,003,868 1,769,432 1,716,799 1,346,104
Net interest margin on a
fully taxable equivalent
basis - Non-GAAP basis 4.40% 4.43% 4.63% 4.64% 4.69%
SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures - Tangible Book Value Per Share
(Unaudited)
As of
March 31, 2020
December 31, 2019
September 30, 2019
June 30, 2019
March 31, 2019
(Dollars in thousands, except per share data)
Total stockholders'
equity $346,022 $345,705 $296,738 $244,110 $203,976
Less:
Goodwill and other
intangible assets 89,545 79,975 54,714 56,472 26,207
Tangible stockholders'
equity $256,477 $265,730 $242,024 $187,638 $177,769
Shares outstanding 17,969,012 18,258,222 16,121,479 13,790,332 12,195,891
Book value per share $19.26 $18.93 $18.41 $17.70 $16.72
Less:
Goodwill and other
intangible assets per
share $4.98 4.38 3.40 4.09 2.14
Tangible book value per
share $14.28 $14.55 $15.01 $13.61 $14.58
SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures - Tangible Equity to Tangible Assets
(Unaudited)
As of
March 31, 2020
December 31, 2019
September 30, 2019
June 30, 2019
March 31, 2019
(Dollars in thousands)
Total stockholders' equity to
total assets -GAAP basis:
Total stockholders' equity
(numerator) $346,022 $345,705 $296,738 $244,110 $203,976
Total assets (denominator) 2,544,497 2,384,622 1,959,784 1,907,333 1,487,044
Total stockholders' equity to
total assets 13.60% 14.50% 15.14% 12.80% 13.72%
Tangible equity to tangible
assets - Non-GAAP basis:
Tangible equity:
Total stockholders' equity $346,022 $345,705 $296,738 $244,110 $203,976
Less:
Goodwill and other intangible
assets 89,545 79,975 54,714 56,472 26,207
Total tangible common equity
(numerator) $256,477 $265,730 $242,024 $187,638 $177,769
Tangible assets:
Total assets 2,544,497 2,384,622 1,959,784 1,907,333 1,487,044
Less:
Goodwill and other intangible
assets 89,545 79,975 54,714 56,472 26,207
Total tangible assets
(denominator) $2,454,952 $2,304,647 $1,905,070 $1,850,861 $1,460,837
Tangible equity to tangible
assets 10.45% 11.53% 12.70% 10.14% 12.17%
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SOURCE Spirit of Texas Bancshares, Inc.
