CapitalMark 2nd Quarter Earnings Remain Strong

Friday, July 25, 2014

CapitalMark Bank & Trust on Friday reported earnings for the second quarter ended June 30, 2014. Net income for the six months ended was $3.3 million, an increase of 39% from the same period in 2013. Net income per fully diluted common share increased 41% from the same six month period last year to $0.41.

“CapitalMark had another quarter of strong results fueled by exceptional loan and non-interest bearing deposit growth.  Loans grew 25% year-over-year while non-interest bearing deposits grew 29% over the same period. With $879 million in total assets, we continue to build core earnings capacity and an operating profile that positions CapitalMark well for the future,” said R. Craig Holley, CapitalMark’s chairman, president and CEO.

“The growth in core earnings noted below was fueled by additional banker teams in the Chattanooga and Knoxville markets and a strategic restructuring of the balance sheet.  Management redeployed assets from lower yielding securities into higher yielding loans. This strategy supported the growth in our markets for high quality business lending. CapitalMark will continue to add experienced bankers to our team. The markets we serve have responded positively to our approach of personal service,” Mr. Holley said.

SECOND QUARTER HIGHLIGHTS:

· Net income was $3.3 million for the six months ended June 30, 2014, compared to net income of $2.4 million for the six months ended June 30, 2013, an increase of 38.8% year-over-year.  Net income for the quarter ended June 30, 2014 was $1.63 million, compared to $1.69 million in the first quarter of 2014 and $1.56 million for the second quarter 2013.

· Net Income per fully diluted common share was $0.41 for the six months ended June 30, 2014, compared to net income per fully diluted common share of $0.29 for the six months ended June 30, 2013, an increase of 41.4% year-over-year.

· Total Assets grew to $879 million, or 13.5% since June 30, 2013.

CORE EARNINGS: 

· Gross loans grew at an annualized rate of 22.5% or $65.7 million for the first six months of 2014.

· Deposits increased to $736 million, or 10.1% year-over-year.

· Non-interest bearing deposits grew to $135 million, a 29.1% increase year-over-year.  Non-interest bearing deposits comprise 18.3% of total deposits at the end of the second quarter 2014. 

· Revenues for the six months ended June 30, 2014 grew to a record $16.7 million, a growth rate of 13.1% year-over-year.  Revenues for the quarter ended June 30, 2014 were also a record $8.5 million, a $190 thousand increase from quarter ended March 31, 2014.  Revenues increased 10.1% from the quarter ended June 30, 2013.

· Return on average assets for the six months ended June 30, 2014 increased 26.2% to 0.77% compared to the same period in 2013.

ASSET QUALITY:

· Ratio of past due loans > 30 days to total loans decreased to 0.07% for the second quarter of 2014 when compared to 0.25% for the first quarter of 2014.  The ratio of past due loans > 30 days to total loans slightly increased when compared to 0.00% for the same period of 2014.

· The ratio of allowance for loan losses to total loans has been steady at 1.25% for June 30, 2014, compared to 1.24% the same period in 2013.

· Non-performing assets to total loans plus foreclosed real estate decreased to 0.83% in the second quarter of 2014, compared to 1.08% on June 30, 2013.

· Net charge offs to average loans decreased at June 30, 2014 to 0.09% from 0.42% in the same period of 2013.  Net charge offs to average loans increased slightly when compared to a negative 0.11% for the first quarter 2014.

OTHER HIGHLIGHTS: 

· Tier 1 Leverage Ratio continues to be strong at 10.52% for the second quarter 2014.

· Non-interest expense decreased $53 thousand or 1.0% from the previous quarter.

· Non-interest revenue from the Wealth and Trust Department has increased 15.1% in the second quarter of 2014 when compared to the first quarter of 2014.

· Non-interest revenue generated from net gains on sale of Mortgages remained flat decreasing $1 thousand when compared to the previous quarter.

· Efficiency ratio has improved 9.9% to 59.79% for the six months ended June 30, 2014 when compared to the same period in 2013.



Michelle Consiglio-Young Joins Courts As Legislative Liaison, Assistant General Counsel

   Michelle Consiglio-Young has been named legislative liaison and assistant general counsel for the Tennessee Administrative Office of the Courts. In this role, she will be drafting and tracking legislation for the judiciary, following other proposed legislation, assisting members of the General Assembly with information about Tennessee courts, informing members of the ... (click for more)

Supreme Court Affirms Disability Award For Employee With High-Frequency Hearing Loss

The Tennessee Supreme Court has ruled that an employee is entitled to the full amount of workers’ compensation benefits awarded to him by a trial court. In  2009, Orville Lambdin retired from Goodyear Tire & Rubber Company where he had worked as a tire builder for over 35 years. He later sought workers’ compensation benefits based upon his loss of hearing. At trial, ... (click for more)

Appeals Court Rules Against WWTA In Lawsuit Brought By Apartment Complex Over $8 Monthly Charges To Units

The Tennessee Court of Appeals has ruled in favor of an apartment complex that sued the Hamilton County Water and Wastewater Authority (WWTA) over an $8 monthly charge per apartment unit for preparing private service laterals. The court overturned a granting of summary judgment in favor of WWTA by former Judge Jackie Bolton. The appeals court said American Heritage Apartments, ... (click for more)

1 Dies In House Fire In Rhea County

Rhea County Fire Department officials said one person died in an early-morning house fire on Saturday. The call came at about 6:30 a.m. The brick residence is on Fisher Road. S tate arson investigators were on their way. (click for more)

It's Time To Insure Tennessee - And Response

Tennessee has a problem.  What is the value of saving the lives of 1,000 Tennesseans each year? That is exactly what can be expected if 176,000 Tennesseans gain health insurance through Insure Tennessee. A New England Journal of Medicine study showed that expansion of Medicaid was associated with a 6% reduction in yearly mortality for people in the 34-65 age group. Statistically, ... (click for more)

Roy Exum: Boots, Idiots & Guns

As the month of February was born this morning, allow me to hurriedly share three leftovers that were still in last month’s basket: * * * A first-grade teacher had endured a long day and was helping her students bundle up for the trip home when one of the little boys asked for help getting on his boots. Soon she could see why. Even with her pulling, and him pushing, the ... (click for more)