Spirit of Texas Bancshares, Inc. Reports Strong Third Quarter 2020 Financial Results

CONROE, Texas, Oct. 20, 2020 /PRNewswire/ -- Spirit of Texas Bancshares, Inc. (NASDAQ: STXB) ("Spirit", the "Company", "we", "our", or "us"), reported net income of $7.1 million in the third quarter of 2020, representing diluted earnings per share of $0.41, compared to net income of $5.3 million in the third quarter of 2019, representing diluted earnings per share of $0.34. Strong financial results for the third quarter of 2020 were assisted by $1.3 million net accretion of origination fees on Paycheck Protection Program ("PPP") loans offset by increased provision expense for potential loan losses related to the COVID-19 pandemic.

Third Quarter 2020 Financial and Operational Highlights

  • Declared first quarterly cash dividend of $0.07 per share.
  • Successfully completed the core system conversion associated with the acquisition of Citizens State Bank.
  • Capital remained strong with a Tier 1 leverage ratio of 9.91% at Spirit of Texas Bank, SSB (the "Bank") and 9.62% at the Company on a consolidated basis at September 30, 2020.
  • Net interest margin for the third quarter of 2020 as reported and on a tax equivalent basis(1) was 3.90% and 3.97%, respectively.
  • At September 30, 2020, return on average assets was 0.96% annualized.
  • Book value per share increased to $20.30 at September 30, 2020 and tangible book value per share(1) increased to $15.31 at the same date.
  • At September 30, 2020, total stockholders' equity to total assets was 12.02% and tangible stockholders' equity to tangible assets(1) was 9.34%.

Dean Bass, Spirit's Chairman and Chief Executive Officer, stated, "We are extremely excited to have reached a historic milestone in the evolution of our Company.  During the quarter we declared our first quarterly cash dividend of $0.07 per share.  The decision was made given our strong and stable capital position and the strength and consistency of our core earnings.  We believe we are providing a level of dividend that represents a solid dividend yield for our investors while still allowing us to pursue growth opportunities through strategic partnerships.

"Although there is a great deal of uncertainty surrounding the economic impact of the COVID-19 pandemic, our Company posted a strong third quarter. Our team's ability to perform at a high level, deliver outstanding service, and continue to execute on our strategic vision in a very difficult operating environment, is exceptional. I am confident that our company is well positioned to continue navigating this uncertain environment with our core earnings, solid capital position, and excellent liquidity. Our focus will continue to be on the needs of our clients and the safety and welfare of our employees," Mr. Bass concluded.

Loan Portfolio and Composition

During the third quarter of 2020, gross loans grew to $2.45 billion, an increase of 1.0% from $2.43 billion as of June 30, 2020, and an increase of 64.9% from $1.49 billion as of September 30, 2019.   Our loan pipeline continues to build back to pre-COVID-19 levels. We continue to see some loan growth, but we do not expect to see our pre-COVID-19 loan growth until uncertainty surrounding the effects of the global pandemic and the timeline of a vaccine lessens.  However, we are committed to lending in these times and are in regular contact with prospective borrowers regarding future plans and funding needs.

Many of the industries in our loan portfolio that we have been monitoring have begun to show signs of improvement.  Specifically, we expect restaurants, which comprise $33.7 million, or 1.4%, of our loan portfolio, to benefit from recently opened dining rooms and an easing of occupancy restrictions.  Additionally, retail strip centers, which comprise $164.7 million, or 6.7%, of our loan portfolio, appear to be benefiting from increased retail sales and movements to support local small businesses.  We will continue to monitor trends in these portfolio segments, but our primary short-term focus is on the hospitality segment, which is still under stress as business and leisure travel has yet to return to pre-COVID-19 levels.  At September 30, 2020, our total exposure in the hospitality segment consisted of $97.6 million, or 4.0%, of our loan portfolio. Oil and gas prices appear to have stabilized, however, we continue to closely monitoring our exposure in this segment which at September 30, 2020 was $66.5 million, or 2.7%, of our loan portfolio.

Asset Quality

Asset quality continues to remain strong in the third quarter of 2020. We have enhanced monitoring processes throughout the Bank to quickly identify problem loans and/or negative industry trends in order to ensure timely downgrades, charge-offs, and qualitative factor adjustments.  Based on the results of these enhanced processes, we are pleased that downgrades and increases in impaired loans appear to be due to borrower specific events and not systemic weakness. The provision for loan losses recorded for the third quarter of 2020 was $2.8 million, which served to increase the allowance to $12.2 million, or 0.50% of the $2.45 billion in gross loans outstanding as of September 30, 2020. The coverage ratio on the organic portfolio was 0.94% of the $1.29 billion in organic loans outstanding, excluding PPP loans which are fully guaranteed and not reserved for as of September 30, 2020. The majority of the provision expense for the third quarter of 2020 related to annual updates to the allowance model as opposed to a deterioration in credit quality or an increase in impaired loan balances. 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 continues to remain low as of September 30, 2020 at 0.36% compared to 0.31% as of June 30, 2020, and 0.61% as of September 30, 2019. Annualized net charge-offs were 8 basis points for the third quarter of 2020, compared to 17 basis points for the third quarter of 2019.

As of September 30, 2020, the vast majority of our 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 $520.6 million.  Approximately 81% of the approved deferrals have exited the 90 day deferral period, and 98.5% of these borrowers have resumed regularly scheduled payments. 

Deposits and Borrowings

Deposits totaled $2.29 billion as of September 30, 2020, a decrease of 5.3% from $2.41 billion as of June 30, 2020, and an increase of 44.3% from $1.59 billion as of September 30, 2019.  Noninterest-bearing demand deposits decreased $78.4 million, or 10.5%, from June 30, 2020, and increased $301.0 million, or 82.2% from September 30, 2019. The decrease in noninterest-bearing deposits is partially due to deposit accounts related to PPP loan funding.  PPP related deposit accounts totaled $39.4 million at September 30, 2020. Noninterest-bearing demand deposits represented 29.2% of total deposits as of September 30, 2020, down from 30.9% of total deposits as of June 30, 2020, and up from 23.1% of total deposits as of September 30, 2019.  Due to seasonal fluctuations of public funds, we also saw a $31.0 million decrease in public funds during the quarter.  The average cost of deposits was 0.57% for the third quarter of 2020, representing a 10 basis point decrease from the second quarter of 2020 and a 46 basis point decrease from the third quarter of 2019.

Borrowings increased by $84.7 million during the third quarter of 2020 to $277.7 million due primarily to increased borrowings of $78.9 million under the Paycheck Protection Program Lending Facility with the Board of Governors of the Federal Reserve System and to the issuance of $37.0 million of subordinated notes, offset by paydowns of $21.0 million of FHLB borrowings and the payoff of our third-party holding company line of credit of $10.0 million.  Borrowings totaled 9.5% of total assets at September 30, 2020, compared to 6.5% at June 30, 2020 and 3.8% at September 30, 2019.

Net Interest Margin and Net Interest Income

The net interest margin for the third quarter of 2020 was 3.90%, a decrease of 5 basis points from the second quarter of 2020 and a decrease of 69 basis points from the third quarter of 2019. The tax equivalent net interest margin(1) for the third quarter of 2020 was 3.97%, a decrease of 3 basis points from the second quarter of 2020 and a decrease of 66 basis points from the third quarter of 2019.  The decline from the second quarter of 2020 is primarily due to remaining rate resets on interest-earning assets as a result of decreases in interest rates set by the Federal Open Market Committee during the first quarter of 2020 and PPP loans which yield 1.00%. Excluding the impact of PPP loans, net interest margin and tax equivalent net interest margin for the third quarter of 2020 were 4.20% and 4.28%, respectively.

Net interest income totaled $26.2 million for the third quarter of 2020, an increase of 28.0% from $20.5 million for the third quarter of 2019.  Interest income totaled $30.5 million for the third quarter of 2020, an increase of 21.9% from $25.0 million for the third quarter of 2019.  Interest and fees on loans remained constant compared to the second quarter of 2020, and increased by $6.8 million, or 29.6%, from the third quarter of 2019. Interest expense was $4.3 million for the third quarter of 2020, a decrease of 5.2% from $4.5 million for the second quarter of 2020 and a decrease of 5.6% from $4.5 million for the third quarter of 2019. 

Noninterest Income and Noninterest Expense

Noninterest income totaled $4.8 million for the third quarter of 2020, compared to $2.6 million for the second quarter of 2020. U.S. Small Business Administration loan servicing fees increased $363 thousand, quarter over quarter, as a result of a favorable servicing asset valuation. Additionally, during the third quarter of 2020, gain on sale of loans increased $286 thousand as small business lending demand has slowly begun to rebound.  During the quarter, we took a gain on the sale of securities of $1.0 million in order to offset the prepayment penalties of $436 thousand associated with inefficient leverage held at the FHLB.

Noninterest expense totaled $19.3 million in the third quarter of 2020, an increase of 19.8% from $16.1 million in the second quarter of 2020, primarily due to an increase in salaries and benefits. Salaries and benefits increased $3.4 million in the third quarter of 2020 given that the prior quarter included deferred salaries related to PPP loan origination.

The efficiency ratio was 62.2% in the third quarter of 2020, compared to 56.3% in the second quarter of 2020, and 67.2% in the third quarter of 2019. The second quarter efficiency ratio was assisted by the deferral of $4.9 million of salary expense related to PPP loan originations.

Subsequent Events

On October 16, 2020, we closed the previously announced sale of our Clear Lake Branch to Moody National Bank (the "Clear Lake Branch Sale"), which resulted in the sale of deposits of approximately $24.2 million.  Final settlement on the sale will occur during the fourth quarter of 2020 and is expected to result in a gain on sale of approximately $700 thousand and a reduction in rental and personnel expenses of $350 thousand. We continue to focus on expense reductions going into the fourth quarter through the optimization of our branch network. On October 20, 2020, the Bank entered into a Branch Purchase and Assumption Agreement with First State Bank, pursuant to which First State Bank will purchase certain assets and assume certain liabilities (the "Jacksboro Branch Sale" and together with the Clear Lake Branch Sale, the "Branch Sales") associated with the Bank's branch located at 1220 North Main Street, Jacksboro, Texas 76458 (the "Jacksboro Branch").

_______________________________________________________

(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 earnings 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 earnings release when comparing such non-GAAP financial measures. Please see a reconciliation to the nearest respective GAAP measures at the end of this earnings release.

Conference Call

Spirit of Texas Bancshares has scheduled a conference call to discuss its third quarter 2020 results, which will be broadcast live over the Internet, on Wednesday, October 21, 2020 at 10:00 a.m. Eastern Time / 9:00 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 October 28, 2020, and may be accessed by dialing 201-612-7415 and using pass code 13711787#. 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 38 locations in the Houston, Dallas/Fort Worth, Bryan/College Station, Austin, San Antonio, Corpus Christi and Tyler metropolitan areas, along with offices in North Central and South 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.  Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events.  Factors that could cause our actual results to differ materially from those  described in the forward-looking statements include, among others: (i) changes in general business, industry or economic conditions, or competition; (ii) the impact of the COVID-19 pandemic on the Bank's business, including the impact of actions taken by governmental and regulatory authorities in response to such pandemic, such as the Coronavirus Aid, Relief, and Economic Security Act and the programs established thereunder, and the Bank's participation in such programs, (iii) changes in any applicable law, rule, regulation, policy, guideline, or practice governing or affecting bank holding companies and their subsidiaries or with respect to tax or accounting principles or otherwise; (iv) adverse changes or conditions in capital and financial markets; (v) changes in interest rates; (vi) the possibility that any of the anticipated benefits of the Clear Lake Branch Sale and the proposed Jacksboro Branch Sale will not be realized or will not be realized within the expected time period; (vii) the risk that converting the operations of the Jacksboro Branch to First State Bank will be materially delayed or will be more difficult than expected; (viii) the effect of the announcement of the Jacksboro Branch Sale on customer relationships and operating results; (ix) the possibility that the Branch Sales may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (x) higher-than-expected costs or other difficulties related to integration of combined or merged businesses; (xi) the inability to realize expected cost savings or achieve other anticipated benefits in connection with business combinations and other acquisitions; (xii) changes in the quality or composition of our loan and investment portfolios; (xii) adequacy of loan loss reserves; (xiii) increased competition; (xiv) loss of certain key officers; (xv) continued relationships with major customers; (xvi) deposit attrition; (xvii) rapidly changing technology; (xviii) unanticipated regulatory or judicial proceedings and liabilities and other costs; (xix) changes in the cost of funds, demand for loan products, or demand for financial services; (xx) other economic, competitive, governmental, or technological factors affecting our operations, markets, products, services, and prices; and (xxi) our success at managing the foregoing items.   For a discussion of additional factors that could cause our actual results to differ materially from those described in the forward-looking statements, please see the risk factors discussed in our most recent 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, its Quarterly Reports on Form 10-Q 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

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

(Dollars in thousands, except per share data)

Interest income:

Interest and fees on loans

$                            29,901

$                            29,912

$                            27,409

$                            25,160

$                            23,064

Interest and dividends on investment securities

465

457

504

997

1,143

Other interest income

115

185

900

918

794

Total interest income

30,481

30,554

28,813

27,075

25,001

Interest expense:

Interest on deposits

3,392

3,945

4,507

4,434

4,097

Interest on FHLB advances and other borrowings

875

558

508

416

425

Total interest expense

4,267

4,503

5,015

4,850

4,522

Net interest income

26,214

26,051

23,798

22,225

20,479

Provision for loan losses

2,831

2,838

1,171

775

900

Net interest income after provision for loan losses

23,383

23,213

22,627

21,450

19,579

Noninterest income:

Service charges and fees

1,525

1,270

1,311

1,146

866

SBA loan servicing fees, net

619

256

10

391

234

Mortgage referral fees

428

357

202

232

173

Gain on sales of loans, net

612

326

464

675

1,151

Gain (loss) on sales of investment securities

1,031

-

-

2,448

-

Other noninterest income

604

356

725

162

257

Total noninterest income

4,819

2,565

2,712

5,054

2,681

Noninterest expense:

Salaries and employee benefits

11,365

7,946

11,789

10,684

9,502

Occupancy and equipment expenses

2,222

2,761

2,315

2,222

1,710

Professional services

555

716

895

1,200

791

Data processing and network

1,002

849

743

936

884

Regulatory assessments and insurance

517

379

402

265

(256)

Amortization of intangibles

919

919

946

1,006

1,015

Advertising

333

119

153

225

134

Marketing

18

38

160

131

136

Telephone expense

563

483

407

226

289

Conversion expense

279

69

1,477

180

314

Other operating expenses

1,520

1,825

1,673

1,584

1,037

Total noninterest expense

19,293

16,104

20,960

18,659

15,556

Income before income tax expense

8,909

9,674

4,379

7,845

6,704

Income tax expense

1,821

1,980

305

1,676

1,374

Net income

$                              7,088

$                              7,694

$                              4,074

$                              6,169

$                              5,330

Earnings per common share:

Basic

$                                0.41

$                                0.44

$                                0.22

$                                0.35

$                                0.35

Diluted

0.41

0.44

0.22

$                                0.35

$                                0.34

Weighted average common shares outstanding: 

Basic

17,340,898

17,581,959

18,184,110

17,434,954

15,370,480

Diluted

17,383,427

17,612,919

18,441,977

17,830,538

15,771,249

 

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Consolidated Balance Sheets

(Unaudited)

As of

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
 2019

September 30,
 2019

(Dollars in thousands)

Assets:

Cash and due from banks

$          29,345

$          35,248

$             33,946

$             32,490

$             28,822

Interest-bearing deposits in other banks

121,739

200,096

193,707

293,467

122,721

      Total cash and cash equivalents

151,084

235,344

227,653

325,957

151,543

Time deposits in other banks

-

-

245

490

1,225

Investment securities:

Available for sale securities, at fair value

119,814

90,878

94,963

96,937

166,669

      Total investment securities

119,814

90,878

94,963

96,937

166,669

Loans held for sale

4,287

7,718

7,765

3,989

2,784

Loans:

Loans held for investment

2,452,353

2,427,292

2,013,367

1,767,182

1,487,602

Less: allowance for loan and lease losses

(12,207)

(9,905)

(7,620)

(6,737)

(6,565)

Loans, net

2,440,146

2,417,387

2,005,747

1,760,445

1,481,037

Premises and equipment, net

82,734

79,156

78,594

75,150

65,144

Accrued interest receivable

11,612

12,188

7,314

6,507

6,319

Other real estate owned and repossessed assets

302

3,743

3,731

3,653

1,042

Goodwill

77,681

77,966

79,009

68,503

43,086

Core deposit intangible

8,698

9,617

10,536

11,472

11,628

SBA servicing asset

3,051

3,115

3,055

3,355

3,548

Deferred tax asset, net

494

-

-

-

-

Bank-owned life insurance

15,878

15,787

15,699

15,610

15,521

Federal Home Loan Bank and other bank stock, at cost

5,709

5,696

5,660

8,310

6,233

Other assets

3,580

4,423

4,526

4,244

4,005

      Total assets

$     2,925,070

$     2,963,018

$        2,544,497

$        2,384,622

$        1,959,784

Liabilities and Stockholders' Equity

Liabilities:

Deposits:

Transaction accounts:

Noninterest-bearing

$        667,199

$        745,646

$           487,060

$           444,822

$           366,209

Interest-bearing

940,930

946,969

878,279

803,557

593,064

      Total transaction accounts

1,608,129

1,692,615

1,365,339

1,248,379

959,273

Time deposits

679,387

722,376

711,968

679,747

625,940

      Total deposits

2,287,516

2,414,991

2,077,307

1,928,126

1,585,213

Accrued interest payable

1,321

1,025

1,218

1,219

1,002

Short-term borrowings

10,000

104,830

10,000

-

-

Long-term borrowings

267,746

88,246

103,276

105,140

74,165

Deferred tax liability, net

-

405

1,706

672

215

Other liabilities

6,966

5,943

5,173

3,760

2,451

      Total liabilities

2,573,549

2,615,440

2,198,680

2,038,917

1,663,046

Stockholders' Equity:

Common stock

298,509

298,176

297,966

297,188

251,875

Retained earnings

65,783

59,907

52,213

48,139

41,970

Accumulated other comprehensive income (loss)

(237)

1,272

732

667

3,091

Treasury stock

(12,534)

(11,777)

(5,094)

(289)

(198)

      Total stockholders' equity

351,521

347,578

345,817

345,705

296,738

      Total liabilities and stockholders' equity

$     2,925,070

$     2,963,018

$        2,544,497

$        2,384,622

$        1,959,784

 

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Loan Composition

(Unaudited)

As of

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

September 30,
2019

(Dollars in thousands)

Loans:

Commercial and industrial loans (1)(2)

$                     690,009

$                     724,913

$                     320,418

$                     282,949

$                     248,745

Real estate:

1-4 single family residential loans

373,220

372,445

382,900

375,743

321,044

Construction, land and development loans

402,476

390,068

405,661

259,384

233,830

Commercial real estate loans (including multifamily)

906,134

835,614

821,952

753,812

597,415

Consumer loans and leases

12,977

19,159

22,398

22,769

17,663

Municipal and other loans

67,537

85,092

60,038

72,525

68,905

Total loans held in portfolio

$                  2,452,353

$                  2,427,292

$                  2,013,367

$                  1,767,182

$                  1,487,602

(1) Balance includes $72.7 million, $75.1 million, $75.3 million, $74.2 million, and $78.7 million of the unguaranteed portion of SBA loans as of September 30, 2020, June 30, 2020, March 31, 2020,

December 31, 2019, and September 30, 2019, respectively. 

(2) Balance includes $421.1 million of PPP loans as of September 30, 2020. 

 

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Deposit Composition

(Unaudited)

As of

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

September 30,
2019

(Dollars in thousands)

Deposits:

Noninterest-bearing demand deposits

$                     667,199

$                     745,646

$                     487,060

$                     444,822

$                     366,209

Interest-bearing demand deposits

391,396

360,282

334,302

370,467

303,037

Interest-bearing NOW accounts

8,655

31,132

28,376

28,204

8,626

Savings and money market accounts

540,879

555,555

515,601

404,886

281,401

Time deposits

679,387

722,376

711,968

679,747

625,940

Total deposits

$                  2,287,516

$                  2,414,991

$                  2,077,307

$                  1,928,126

$                  1,585,213

 

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Average Balances and Yields

(Unaudited)

Three Months Ended
September 30,

2020

2019

Average
Balance (1)

Interest/
Expense

Annualized
Yield/Rate

Average
Balance (1)

Interest/
Expense

Annualized
Yield/Rate

(Dollars in thousands)

Interest-earning assets:

Interest-earning deposits in other banks

$     134,573

$           101

0.30%

$     135,460

$           750

2.20%

Loans, including loans held for sale (2)

2,436,667

29,901

4.87%

1,458,603

23,064

6.27%

Investment securities and other

93,115

479

2.04%

175,369

1,187

2.69%

Total interest-earning assets

2,664,355

30,481

4.54%

1,769,432

25,001

5.61%

Noninterest-earning assets

265,462

150,139

Total assets

$  2,929,817

$  1,919,571

Interest-bearing liabilities:

Interest-bearing demand deposits

$     375,421

$           176

0.19%

$     285,306

$           349

0.49%

Interest-bearing NOW accounts

14,644

7

0.19%

7,846

3

0.15%

Savings and money market accounts

541,681

621

0.45%

273,662

579

0.84%

Time deposits

713,618

2,588

1.44%

630,969

3,166

1.99%

FHLB advances and other borrowings

211,214

875

1.64%

65,358

425

2.58%

Total interest-bearing liabilities

1,856,578

4,267

0.91%

1,263,141

4,522

1.42%

Noninterest-bearing liabilities and
shareholders' equity:

Noninterest-bearing demand deposits

715,783

380,997

Other liabilities

8,451

4,232

Stockholders' equity

349,005

271,201

Total liabilities and stockholders' equity

$  2,929,817

$  1,919,571

Net interest rate spread

3.63%

4.19%

Net interest income and margin

$      26,214

3.90%

$      20,479

4.59%

Net interest income and margin (tax equivalent)(3)

$      26,660

3.97%

$      20,632

4.63%

(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 September 30, 2020 and 2019, respectively.

 

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Average Balances and Yields

(Unaudited)

Three Months Ended

September 30, 2020

June 30, 2020

Average
Balance (1)

Interest/
Expense

Annualized
Yield/Rate

Average
Balance (1)

Interest/
Expense

Annualized
Yield/Rate

(Dollars in thousands)

Interest-earning assets:

Interest-earning deposits in other banks

134,573

$           101

0.30%

$     220,940

$           148

0.27%

Loans, including loans held for sale (2)

2,436,667

29,901

4.87%

2,332,707

29,911

5.14%

Investment securities and other

93,115

479

2.04%

93,256

495

2.13%

Total interest-earning assets

2,664,355

30,481

4.54%

2,646,903

30,554

4.63%

Noninterest-earning assets

265,462

228,203

Total assets

$  2,929,817

$  2,875,106

Interest-bearing liabilities:

Interest-bearing demand deposits

$     375,421

$           176

0.19%

$     346,220

$           175

0.20%

Interest-bearing NOW accounts

14,644

7

0.19%

29,087

18

0.25%

Savings and money market accounts

541,681

621

0.45%

539,533

825

0.61%

Time deposits

713,618

2,588

1.44%

719,498

2,927

1.63%

FHLB advances and other borrowings

211,214

875

1.64%

150,388

558

1.49%

Total interest-bearing liabilities

1,856,578

4,267

0.91%

1,784,726

4,503

1.01%

Noninterest-bearing liabilities and
shareholders' equity:

Noninterest-bearing demand deposits

715,783

742,542

Other liabilities

8,451

2,236

Stockholders' equity

349,005

345,602

Total liabilities and stockholders' equity

$  2,929,817

$  2,875,106

Net interest rate spread

3.63%

3.62%

Net interest income and margin

$      26,214

3.90%

$      26,051

3.95%

Net interest income and margin (tax equivalent)(3)

$      26,660

3.97%

$      26,424

4.00%

(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 September 30, 2020 and June 30, 2020, 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

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

(Dollars in thousands, except per share data)

Basic and diluted earnings per share - GAAP basis:

Net income available to common stockholders

$                               7,088

$                               7,694

$                               4,074

$                               6,169

$                               5,330

Weighted average number of common shares - basic

17,340,898

17,581,959

18,184,110

17,434,954

15,370,480

Weighted average number of common shares - diluted

17,383,427

17,612,919

18,441,977

17,830,538

15,771,249

Basic earnings per common share

$                                 0.41

$                                 0.44

$                                 0.22

$                                 0.35

$                                 0.35

Diluted earnings per common share

$                                 0.41

$                                 0.44

$                                 0.22

$                                 0.35

$                                 0.34

Basic and diluted earnings per share - Non-GAAP basis:

Net income

$                               7,088

$                               7,694

$                               4,074

$                               6,169

$                               5,330

Pre-tax adjustments:

Noninterest income

Gain on sale of investment securities

(1,031)

-

-

(2,448)

-

Noninterest expense

Merger related expenses

342

69

1,614

821

1,094

Taxes:

   NOL Carryback

-

(575)

Tax effect of adjustments

145

(14)

(331)

467

(193)

Adjusted net income

$                               6,544

$                               7,749

$                               4,782

$                               5,009

$                               6,231

Weighted average number of common shares - basic

17,340,898

17,581,959

18,184,110

17,434,954

15,370,480

Weighted average number of common shares - diluted

17,383,427

17,612,919

18,441,977

17,830,538

15,771,249

Basic earnings per common share - Non-GAAP basis

$                                 0.38

$                                 0.44

$                                 0.26

$                                 0.29

$                                 0.41

Diluted earnings per common share - Non-GAAP basis

$                                 0.38

$                                 0.44

$                                 0.26

$                                 0.28

$                                 0.40

 

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

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

(Dollars in thousands, except per share data)

Net interest margin - GAAP basis:

Net interest income

$                        26,214

$                        26,051

$                        23,798

$                        22,225

$                        20,479

Average interest-earning assets

2,664,355

2,646,903

2,179,501

2,003,868

1,769,432

Net interest margin

3.90%

3.95%

4.38%

4.40%

4.59%

Net interest margin - Non-GAAP basis:

Net interest income

$                        26,214

$                        26,051

$                        23,798

$                        22,225

$                        20,479

Plus:

Impact of fully taxable equivalent adjustment

446

373

92

127

153

Net interest income on a fully taxable equivalent basis

$                        26,660

$                        26,424

$                        23,890

$                        22,352

$                        20,632

Average interst-earning assets

2,664,355

2,646,903

2,179,501

2,003,868

1,769,432

Net interest margin on a fully taxable equivalent basis - Non-GAAP basis

3.97%

4.00%

4.40%

4.43%

4.63%

 

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Reconciliation of Non-GAAP Financial Measures - Tangible Book Value Per Share

(Unaudited)

As of

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

(Dollars in thousands, except per share data)

Total stockholders' equity

$                    351,521

$                    347,578

$                    345,817

$                    345,705

$                    296,738

Less:

Goodwill and other intangible assets

86,379

87,583

89,545

79,975

54,714

Tangible stockholders' equity

$                    265,142

$                    259,995

$                    256,272

$                    265,730

$                    242,024

Shares outstanding

17,316,313

17,368,573

17,969,012

18,258,222

16,121,479

Book value per share

$                        20.30

$                        20.01

$                        19.25

$                        18.93

$                        18.41

Less:

Goodwill and other intangible assets per share

$                          4.99

$                          5.04

$                          4.99

4.38

3.40

Tangible book value per share

$                        15.31

$                        14.97

$                        14.26

$                        14.55

$                        15.01

 

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Reconciliation of Non-GAAP Financial Measures - Tangible Equity to Tangible Assets

(Unaudited)

As of 

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

(Dollars in thousands)

Total stockholders' equity to total assets - GAAP basis:

Total stockholders' equity (numerator)

$                     351,521

$                     347,578

$                     345,817

$                     345,705

$                     296,738

Total assets (denominator)

2,925,070

2,963,018

2,544,497

2,384,622

1,959,784

Total stockholders' equity to total assets

12.02%

11.73%

13.59%

14.50%

15.14%

Tangible equity to tangible assets - Non-GAAP basis:

Tangible equity:

Total stockholders' equity

$                     351,521

$                     347,578

$                     345,817

$                     345,705

$                     296,738

Less:

Goodwill and other intangible assets

86,379

87,583

89,545

79,975

54,714

Total tangible common equity (numerator)

$                     265,142

$                     259,995

$                     256,272

$                     265,730

$                     242,024

Tangible assets:

Total assets

2,925,070

2,963,018

2,544,497

2,384,622

1,959,784

Less:

Goodwill and other intangible assets

86,379

87,583

89,545

79,975

54,714

Total tangible assets (denominator)

$                  2,838,691

$                  2,875,435

$                  2,454,952

$                  2,304,647

$                  1,905,070

Tangible equity to tangible assets

9.34%

9.04%

10.44%

11.53%

12.70%

 

Cision View original content:http://www.prnewswire.com/news-releases/spirit-of-texas-bancshares-inc-reports-strong-third-quarter-2020-financial-results-301156241.html

SOURCE Spirit of Texas Bancshares, Inc.