Exhibit 99.1

 

LOGO

     

 NEWS RELEASE

 

   Contacts:   

Dennard Lascar Investor Relations

Ken Dennard / Natalie Hairston

(713) 529-6600

STXB@dennardlascar.com

SPIRIT OF TEXAS BANCSHARES, INC. REPORTS STRONG

THIRD QUARTER 2020 FINANCIAL RESULTS

CONROE, TX – October 20, 2020 – 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.

 

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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.

 

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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.

 

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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

 

5


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.

 

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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 interst-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