AP NEWS
Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

CapStar Reports Fully Diluted EPS of $0.29 and Fully Diluted Operating EPS of $0.30 for Q4 2019

January 23, 2020 GMT

NASHVILLE, Tenn., Jan. 23, 2020 (GLOBE NEWSWIRE) -- CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) reported net income of $5.42 million, or $0.29 per share on a fully diluted basis, for the three months ended December 31, 2019, compared to a net loss of ($0.71) million, or ($0.04) per share on a fully diluted basis, for the three months ended December 31, 2018. Operating(1) net income was $5.54 million, or $0.30 per share on a fully diluted basis, for the three months ended December 31, 2019, compared to $6.24 million, or $0.33 per share on a fully diluted basis, for the three months ended December 31, 2018. Included in the fourth quarter 2019 results is a one-time charge of $289K associated with the early retirement of four employees, which reduces annualized non-interest expense by $582K.

Net income was $22.42 million, or $1.20 per share on a fully diluted basis, for the twelve months ended December 31, 2019, compared to net income of $9.66 million, or $0.67 per share on a fully diluted basis, for the twelve months ended December 31, 2018. Operating net income was $24.38 million, or $1.31 per share on a fully diluted basis, for the twelve months ended December 31, 2019, compared to $17.25 million, or $1.19 per share on a fully diluted basis, for the twelve months ended December 31, 2018.

“I am pleased with everything that the CapStar team was able to accomplish in 2019 and am excited about the outlook for 2020,” said Timothy K. Schools, CapStar’s president and CEO. “We believe we are in a good position from a credit perspective and have improved the quality of our loan portfolio, by reducing the percentage of shared national credits and highly leveraged loans in our portfolio,” continued Mr. Schools. “In addition, both our Tri-Net and Mortgage teams had record years and we successfully integrated Athens Federal.”

“Further, we are thrilled to enter the Knoxville market under the leadership of King Purnell and Amy Pangelinan and look forward to demonstrating our differentiated delivery of financial services and establishing ourselves as a leader in Knoxville” said Mr. Schools.

Soundness

-- Non-performing assets as a percentage of total assets were 0.12% at December 31, 2019 compared to 0.16% at December 31, 2018. -- Annualized net charge-offs to average loans were 0.06% for the three months ended December 31, 2019 compared to 1.27% for the same period in 2018. -- The total risk based capital ratio was 13.45% at December 31, 2019 compared to 12.84% at December 31, 2018.

Profitability

-- Operating annualized return on average assets for the three months ended December 31, 2019 was 1.08% compared to 1.27% for the same period in 2018. -- Operating annualized return on average tangible equity for the three months ended December 31, 2019 was 9.69% compared to 12.36% for the same period in 2018. -- Net interest margin for the three months ended December 31, 2019 was 3.49% compared to 3.89% for the same period in 2018. -- The operating efficiency ratio for the three months ended December 31, 2019 was 67.73% compared to 61.83% for the same period in 2018.

“While fourth quarter profitability metrics were less than the prior year, we took a one-time charge of $289K associated with the early retirement of four employees, which reduces annualized non-interest expense by $582K. Additionally, a flattening yield curve and the three rate cuts that the FOMC made in the second half of 2019 also impacted the quarter,” said Rob Anderson, chief financial officer and chief administrative officer of CapStar.

Growth

-- Average gross loans for the quarter ended December 31, 2019 fell 0.60% to $1.43 billion, compared to $1.44 billion for the same period in 2018. -- Average deposits for the quarter ended December 31, 2019 increased 8.34% to $1.71 billion, compared to $1.58 billion for the same period in 2018.

Dividend

On January 23, 2020, the board of directors of CapStar approved a quarterly dividend of $0.05 per common share that will be paid on February 21, 2020 to shareholders of record of CapStar’s common stock as of the close of business on February 7, 2020.

Conference Call and Webcast Information

CapStar will host a conference call and webcast at 8:30 a.m. Central Time on Friday January 24, 2020. During the call, management will review the fourth quarter results and operational highlights. Interested parties may listen to the call by dialing (844) 412-1002. The conference ID number is 6275611. A simultaneous webcast may be accessed on CapStar’s website at ir.capstarbank.com by clicking on “News & Events.” An archived version of the webcast will be available in the same location shortly after the live call has ended.

About CapStar Financial Holdings, Inc.

CapStar Financial Holdings, Inc. is a bank holding company headquartered in Nashville, Tennessee and operates primarily through its wholly owned subsidiary, CapStar Bank, a Tennessee-chartered state bank. CapStar Bank is a commercial bank that seeks to establish and maintain comprehensive relationships with its clients by delivering customized and creative banking solutions and superior client service. As of December 31, 2019, on a consolidated basis, CapStar had total assets of $2.04 billion, gross loans of $1.42 billion, total deposits of $1.73 billion, and shareholders’ equity of $273.05 million. Visit www.capstarbank.com for more information.

Forward-Looking Statements

Certain statements in this earnings release are forward-looking statements that reflect CapStar’s current views with respect to, among other things, CapStar’s assets, business, cash flows, condition (financial or otherwise), credit quality, financial performance, liquidity, short and long-term performance goals, prospects, results of operations, strategic initiatives and the timing, benefits, costs and synergies of recently completed and future acquisition, disposition and other growth opportunities, including, without limitation, those relating to a projected increase in liquidity for our shareholders, improvements in our loan production and deposit gathering capabilities, managing interest rate risk, the acceptance by customers of Athens of CapStar’s products and services, the ability of CapStar to meet expectations regarding the benefits, costs, synergies, and financial and operational impact of the Athens merger, the possibility that any of the anticipated benefits, costs, synergies and financial and operational improvements of the Athens merger will not be realized or will not be realized as expected and the opportunities to enhance market share in certain markets and market acceptance of CapStar are generally in new markets. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “aspire,” “achieve,” “estimate,” “intend,” “plan,” “project,” “projection,” “forecast,” “roadmap,” “goal,” “guidance,” “target,” “would,” and “outlook,” or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about CapStar’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond CapStar’s control. The inclusion of these forward-looking statements should not be regarded as a representation by CapStar or any other person that such expectations, estimates and projections will be achieved. Accordingly, CapStar cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although CapStar believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be important factors that could cause CapStar’s actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, any factors identified in this earnings release as well as those factors that are detailed from time to time in CapStar’s periodic and current reports filed with the Securities and Exchange Commission, including those factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 under the headings “Item 1A. Risk Factors” and “Cautionary Note Regarding Forward Looking Statements” and in the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if CapStar’s underlying assumptions prove to be incorrect, actual results may differ materially from its forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this earnings release, and CapStar does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for CapStar to predict their occurrence or how they will affect CapStar.

Non-GAAP Disclaimer

This earnings release includes the following financial measures that were prepared other than in accordance with generally accepted accounting principles in the United States (“non-GAAP financial measure”): operating net income, operating diluted net income per share, operating return on average assets, operating return on average tangible equity, tangible book value per share and operating efficiency ratio. These non-GAAP financial measures (i) provide useful information to management and investors that is supplementary to CapStar’s financial condition, results of operations and cash flows computed in accordance with GAAP, (ii) enable a more complete understanding of factors and trends affecting CapStar’s business, and (iii) allow investors to evaluate CapStar’s performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators. However, CapStar acknowledges that these non-GAAP financial measures have a number of limitations. As such, you should not view these non-GAAP financial measures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. See below for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure.

(1) For a discussion and reconciliation of the Non-GAAP operating measures that exclude merger-related costs unrelated to CapStar’s normal operations, see the section titled “Non-GAAP Disclaimer” and the Non-GAAP financial measures section of the financial statements.

CONTACT

Rob Anderson Chief Financial Officer and Chief Administrative Officer (615) 732-6470

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statements of Income (unaudited) (dollars in thousands, except share data)

Fourth Quarter 2019 Earnings Release

Three Months Ended Year Ended December 31, December 31, --------------------------- ---------------------------- 2019 2018 2019 2018 ------------ ------------ ------------ ------------ Interest income: Loans, including fees $ 20,233 $ 20,554 $ 82,828 $ 60,751 Securities: Taxable 1,077 1,411 4,619 4,184 Tax-exempt 347 416 1,438 1,201 Federal funds sold — 8 26 63 Restricted equity securities 171 181 755 571 Interest-bearing deposits in financial 377 330 1,881 1,011 institutions - ---------- - ---------- - ---------- - ---------- Total interest income 22,205 22,900 91,547 67,781 - ---------- - ---------- - ---------- - ---------- Interest expense: Interest-bearing deposits 2,015 1,371 7,538 4,164 Savings and money market accounts 1,821 1,619 7,266 5,446 Time deposits 1,626 1,472 7,542 3,940 Federal funds purchased — — 4 3 Securities sold under agreements to repurchase — 3 5 3 Federal Home Loan Bank advances 162 719 1,444 2,533 - ---------- - ---------- - ---------- - ---------- Total interest expense 5,624 5,184 23,799 16,089 - ---------- - ---------- - ---------- - ---------- Net interest income 16,581 17,716 67,748 51,692 Provision for loan losses — 1,514 761 2,842 - ---------- - ---------- - ---------- - ---------- Net interest income after provision for loan 16,581 16,202 66,987 48,850 losses - ---------- - ---------- - ---------- - ---------- Noninterest income: Treasury management and other deposit service 736 793 3,135 2,150 charges Net gain (loss) on sale of securities 9 1 (99 ) 3 Tri-Net fees 274 276 2,785 1,503 Mortgage banking income 2,316 1,324 9,467 5,653 Other noninterest income 2,384 3,993 8,986 6,150 - ---------- - ---------- - ---------- - ---------- Total noninterest income 5,719 6,387 24,274 15,459 - ---------- - ---------- - ---------- - ---------- Noninterest expense: Salaries and employee benefits 9,318 9,475 35,542 28,586 Data processing and software 1,835 1,424 6,961 3,835 Professional fees 531 534 2,102 1,608 Occupancy 795 736 3,345 2,336 Equipment 834 810 3,723 2,471 Regulatory fees 28 364 591 1,028 Merger related expenses 163 8,929 2,654 9,803 Amortization of intangibles 397 442 1,655 465 Other operating 1,365 1,118 5,422 3,355 - ---------- - ---------- - ---------- - ---------- Total noninterest expense 15,266 23,832 61,995 53,487 - ---------- - ---------- - ---------- - ---------- Income (loss) before income taxes 7,034 (1,243 ) 29,266 10,822 Income tax expense (benefit) 1,613 (535 ) 6,844 1,167 - ---------- - ---------- - ---------- - ---------- Net income (loss) $ 5,421 $ (708 ) $ 22,422 $ 9,655 - ---------- - ---------- - ---------- - ---------- Per share information: Basic net income (loss) per share of common $ 0.3 $ (0.04 ) $ 1.25 $ 0.73 stock - ---------- - ---------- - ---------- - ---------- Diluted net income (loss) per share of common $ 0.29 $ (0.04 ) $ 1.2 $ 0.67 stock - ---------- - ---------- - ---------- - ---------- Weighted average shares outstanding: Basic 18,350,994 17,509,525 17,886,164 13,277,614 - ---------- - ---------- - - ---------- - - ---------- Diluted 18,443,916 18,716,562 18,613,224 14,480,347 - ---------- - ---------- - - ---------- - - ----------

This information is preliminary and based on CapStar data available at the time of this earnings release.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)

Fourth Quarter 2019 Earnings Release

Five Quarter Comparison ---------------------------------------------------------------------------- 12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 ------------ ------------ ------------ ------------ ------------ Income Statement Data: Net interest income $ 16,581 $ 17,156 $ 17,008 $ 17,002 $ 17,715 Provision for loan losses — (125 ) — 886 1,514 - ---------- - ---------- - ---------- - ---------- - ---------- Net interest income after 16,581 17,281 17,008 16,116 16,201 provision for loan losses - ---------- - ---------- - ---------- - ---------- - ---------- Treasury management and other 736 788 813 798 793 deposit service charges Net gain (loss) on sale of 9 — (121 ) 12 1 securities Tri-Net fees 274 847 1,024 641 276 Mortgage banking income 2,316 2,679 3,087 1,385 1,324 Other noninterest income 2,384 2,474 2,229 1,899 3,993 - ---------- - ---------- - ---------- - ---------- - ---------- Total noninterest income 5,719 6,788 7,032 4,735 6,387 - ---------- - ---------- - ---------- - ---------- - ---------- Salaries and employee benefits 9,318 9,229 8,563 8,432 9,475 Data processing and software 1,835 1,790 1,862 1,474 1,424 Professional fees 531 528 501 543 534 Occupancy 795 858 809 883 736 Equipment 834 1,012 1,026 852 810 Regulatory fees 28 18 272 274 364 Merger related expenses 163 187 1,711 594 8,929 Amortization of intangibles 397 408 419 430 442 Other operating 1,365 1,501 1,307 1,243 1,117 - ---------- - ---------- - ---------- - ---------- - ---------- Total noninterest expense 15,266 15,531 16,470 14,725 23,831 - ---------- - ---------- - ---------- - ---------- - ---------- Net income (loss) before 7,034 8,538 7,570 6,126 (1,243 ) income tax expense Income tax (benefit) expense 1,613 2,072 1,814 1,346 (535 ) - ---------- - ---------- - ---------- - ---------- - ---------- Net income (loss) $ 5,421 $ 6,466 $ 5,756 $ 4,780 $ (708 ) - ---------- - ---------- - ---------- - ---------- - ---------- Weighted average shares - 18,350,994 17,741,778 17,663,992 17,783,239 17,509,525 basic Weighted average shares - 18,443,916 18,532,479 18,650,706 18,830,933 18,716,562 diluted Net income (loss) per share, $ 0.3 $ 0.36 $ 0.33 $ 0.27 $ (0.04 ) basic Net income (loss) per share, 0.29 0.35 0.31 0.25 (0.04 ) diluted Balance Sheet Data (at period end): Cash and cash equivalents $ 101,269 $ 154,021 $ 156,085 $ 120,321 $ 105,443 Securities available-for-sale 213,129 203,500 194,957 233,691 243,808 Securities held-to-maturity 3,313 3,319 3,721 3,727 3,734 Loans held for sale 168,222 129,613 89,629 72,870 57,618 Total loans 1,420,102 1,411,768 1,440,617 1,467,786 1,429,794 Allowance for loan losses (12,604 ) (12,828 ) (12,903 ) (12,959 ) (12,113 ) Total assets 2,037,201 2,033,911 2,018,421 2,035,811 1,963,883 Non-interest-bearing deposits 312,096 352,266 326,550 312,597 289,552 Interest-bearing deposits 1,417,355 1,379,497 1,396,220 1,366,205 1,280,456 Federal Home Loan Bank 10,000 10,000 10,000 75,000 125,000 advances Total liabilities 1,764,155 1,765,829 1,755,757 1,776,060 1,709,504 Shareholders’ equity $ 273,046 $ 268,082 $ 262,664 $ 259,751 $ 254,379 Total shares of common stock 18,361,922 18,343,403 17,561,476 17,765,124 17,724,721 outstanding Total shares of preferred — — 878,048 878,048 878,048 stock outstanding Book value per share of common $ 14.87 $ 14.61 $ 14.44 $ 14.11 $ 13.84 stock Tangible book value per share 12.45 12.17 11.87 11.55 11.25 of common stock * Market value per common share $ 16.65 $ 16.58 $ 15.15 $ 14.44 $ 14.73 Capital ratios: Total risk based capital 13.45 % 13.46 % 13.29 % 12.64 % 12.84 % Tier 1 risk based capital 12.73 % 12.71 % 12.53 % 11.9 % 12.13 % Common equity tier 1 capital 12.73 % 12.71 % 12.01 % 11.4 % 11.61 % Leverage 11.37 % 11.24 % 11.01 % 10.97 % 11.06 %

_____________________*This metric is a non-GAAP financial measure. See Non-GAAP disclaimer in this earnings release and below for discussion and reconciliation to the most directly comparable GAAP financial measure.

This information is preliminary and based on CapStar data available at the time of this earnings release.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Selected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)

Fourth Quarter 2019 Earnings Release

Five Quarter Comparison ------------------------------------------------------------------------ 12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 ----------- ----------- ----------- ----------- ----------- Average Balance Sheet Data: Cash and cash equivalents $ 115,100 $ 129,114 $ 93,523 $ 83,689 $ 83,560 Investment securities 225,265 211,460 228,283 251,631 256,595 Loans held for sale 140,731 101,835 91,585 66,880 52,131 Loans 1,431,027 1,445,755 1,469,210 1,461,696 1,439,652 Assets 2,030,231 2,005,950 2,004,207 1,988,478 1,940,991 Interest bearing deposits 1,388,496 1,370,988 1,364,211 1,299,205 1,271,602 Deposits 1,711,021 1,704,873 1,678,240 1,588,317 1,579,250 Federal Home Loan Bank advances 22,391 12,174 42,088 117,278 102,304 Liabilities 1,758,663 1,739,509 1,743,010 1,731,373 1,695,181 Shareholders’ equity $ 271,568 $ 266,441 $ 261,197 $ 257,105 $ 245,811 Performance Ratios: Annualized return on average 1.06 % 1.28 % 1.15 % 0.97 % (0.14 )% assets Annualized return on average 7.92 % 9.63 % 8.84 % 7.54 % (1.14 )% equity Net interest margin (1) 3.49 % 3.66 % 3.68 % 3.75 % 3.89 % Annualized noninterest income to 1.12 % 1.34 % 1.41 % 0.97 % 1.31 % average assets Efficiency ratio 68.46 % 64.87 % 68.51 % 67.74 % 98.88 % Loans by Type (at period end): Commercial and industrial $ 394,408 $ 382,816 $ 404,745 $ 419,941 $ 404,600 Commercial real estate - owner 172,456 169,370 173,316 170,558 141,931 occupied Commercial real estate - 387,443 407,378 421,496 403,443 408,515 non-owner occupied Construction and development 143,111 132,222 123,901 162,237 174,670 Consumer real estate 256,097 254,736 255,043 248,943 253,562 Consumer 28,426 29,059 26,704 26,241 25,615 Other 38,161 36,187 35,412 36,423 20,901 Asset Quality Data: Allowance for loan losses to 0.89 % 0.91 % 0.90 % 0.88 % 0.85 % total loans Allowance for loan losses to 861 % 754 % 894 % 757 % 583 % non-performing loans Nonaccrual loans $ 1,464 $ 1,701 $ 1,443 $ 1,712 $ 2,078 Troubled debt restructurings 2,717 2,725 1,238 1,255 1,391 Loans - over 89 days past due and 38 551 302 — 214 accruing Total non-performing loans 1,464 1,701 1,443 1,712 2,078 OREO and repossessed assets 1,044 914 914 1,038 988 Total non-performing assets $ 2,508 $ 2,615 $ 2,357 $ 2,750 $ 3,066 Non-performing loans to total 0.10 % 0.12 % 0.10 % 0.12 % 0.15 % loans Non-performing assets to total 0.12 % 0.13 % 0.12 % 0.14 % 0.16 % assets Non-performing assets to total 0.18 % 0.19 % 0.16 % 0.19 % 0.21 % loans and OREO Annualized net charge-offs 0.06 % (0.01 )% 0.02 % 0.01 % 1.27 % (recoveries) to average loans Net charge-offs (recoveries) $ 224 $ (50 ) $ 56 $ 40 $ 4,620 Interest Rates and Yields: Loans 5.24 % 5.48 % 5.44 % 5.49 % 5.49 % Securities (1) 3.00 % 3.14 % 3.22 % 3.20 % 3.30 % Total interest-earning assets (1) 4.67 % 4.95 % 5.00 % 5.06 % 5.02 % Deposits 1.27 % 1.38 % 1.39 % 1.31 % 1.12 % Borrowings and repurchase 2.88 % 4.12 % 3.09 % 2.85 % 2.76 % agreements Total interest-bearing 1.58 % 1.74 % 1.75 % 1.71 % 1.50 % liabilities Other Information: Full-time equivalent employees 289 290 290 289 286

_____________________

This information is preliminary and based on CapStar data available at the time of this earnings release.

(1) Net Interest Margin, Securities yields, and Total interest-earning asset yields are calculated on a tax-equivalent basis

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Analysis of Interest Income and Expense, Rates and Yields (unaudited) (dollars in thousands)

Fourth Quarter 2019 Earnings Release

For the Three Months Ended December 31, -------------------------------------------------------------------------------- 2019 2018 ----------------------------------------- ----------------------------------- Average Interest Averag Average Interest Averag e e Outstanding Income/ Yield/ Outsta Income/ Yield/ nding Balance Expense Rate Balanc Expense Rate e ----------- ------- ------ ----- ----------- ------ Interest-Earning Assets Loans (1) $ 1,431,027 $ 18,884 5.24 % $ 1,439,652 $ 19,904 5.49 % Loans held for sale 140,731 1,349 3.8 % 52,131 650 4.95 % Securities: Taxable investment 175,750 1,248 2.84 % 198,799 1,592 3.20 % securities (2) Investment securities exempt from 49,515 347 3.55 % 57,796 416 3.64 % federal income tax (3) - --------- - ------ ---- - --------- - ------ ---- Total securities 225,265 1,595 3.00 % 256,595 2,008 3.30 % Cash balances in other 96,125 377 1.56 % 67,880 330 1.93 % banks Funds sold 45 — 3.75 % 1,047 8 2.92 % - --------- - ------ ---- - --------- - ------ ---- Total interest-earning 1,893,193 22,205 4.67 % 1,817,305 22,900 5.02 % assets Noninterest-earning assets 137,038 123,686 - --------- - --------- Total assets $ 2,030,231 $ 1,940,991 - --------- - --------- Interest-Bearing Liabilities Interest-bearing deposits: Interest-bearing $ 566,869 2,015 1.41 % $ 437,656 1,371 1.24 % transaction accounts Savings and money market 514,896 1,821 1.40 % 496,319 1,619 1.29 % deposits Time deposits 306,731 1,626 2.10 % 337,628 1,472 1.73 % - --------- - ------ ---- - --------- - ------ ---- Total interest-bearing 1,388,496 5,462 1.56 % 1,271,603 4,462 1.39 % deposits Borrowings and repurchase 22,391 162 2.88 % 103,655 722 2.76 % agreements - --------- - ------ ---- - --------- - ------ ---- Total interest-bearing 1,410,887 5,624 1.58 % 1,375,258 5,184 1.50 % liabilities Noninterest-bearing 322,524 307,648 deposits - --------- - --------- Total funding sources 1,733,411 1,682,905 Noninterest-bearing 25,252 12,275 liabilities Shareholders’ equity 271,568 245,811 - --------- - --------- Total liabilities and $ 2,030,231 $ 1,940,991 shareholders’ equity - --------- - --------- Net interest spread (4) 3.09 % 3.53 % - ------ - ------ Net interest income/margin $ 16,581 3.49 % $ 17,716 3.89 % (5) - ------ - ------

(1) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs. (2) Taxable investment securities include restricted equity securities. (3) Yields on tax exempt securities, total securities, and total interest-earning assets are shown on a tax equivalent basis. (4) Net interest spread is the average yield on total average interest-earning assets minus the average rate on total average interest-bearing liabilities. (5) Net interest margin is annualized net interest income calculated on a tax equivalent basis divided by total average interest-earning assets for the period.

This information is preliminary and based on CapStar data available at the time of this earnings release.

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)

Fourth Quarter 2019 Earnings Release

Three Months Ended ---------------------------------------------------------------------------- December September June 30, March 31, December 31, 2019 30, 2019 2019 2019 31, 2018 ------------ ------------ ------------ ------------ ------------ Operating net income: Net income (loss) $ 5,421 $ 6,466 $ 5,756 $ 4,780 $ (708 ) Add: merger related expenses 163 187 1,711 594 8,929 Less: income tax impact of (43 ) (49 ) (447 ) (155 ) (1,985 ) merger related expenses - ---------- - ---------- - ---------- - ---------- - ---------- Operating net income $ 5,541 $ 6,604 $ 7,020 $ 5,219 $ 6,236 - ---------- - ---------- - ---------- - ---------- - ---------- Operating diluted net income per share of common stock: Operating net income $ 5,541 $ 6,604 $ 7,020 $ 5,219 $ 6,236 Weighted average shares - 18,443,916 18,532,479 18,650,706 18,830,933 18,716,562 diluted - ---------- - ---------- - ---------- - ---------- - ---------- Operating diluted net income $ 0.30 $ 0.36 $ 0.38 $ 0.28 $ 0.33 per share of common stock - ---------- - ---------- - ---------- - ---------- - ---------- Operating annualized return on average assets: Operating net income $ 5,541 $ 6,604 $ 7,020 $ 5,219 $ 6,236 Average assets $ 2,030,231 $ 2,005,950 $ 2,004,207 $ 1,988,478 $ 1,940,991 - ---------- - ---------- - ---------- - ---------- - ---------- Operating annualized return on 1.08 % 1.31 % 1.4 % 1.06 % 1.27 % average assets - ---------- - ---------- - ---------- - ---------- - ---------- Operating annualized return on average tangible equity: Average total shareholders’ $ 271,568 $ 266,441 $ 261,197 $ 257,105 $ 245,811 equity Less: average intangible (44,646 ) (45,050 ) (45,456 ) (45,890 ) (45,687 ) assets - ---------- - ---------- - ---------- - ---------- - ---------- Average tangible equity 226,922 221,391 215,741 211,215 200,124 - ---------- - ---------- - ---------- - ---------- - ---------- Operating net income $ 5,541 $ 6,604 $ 7,020 $ 5,219 $ 6,236 - ---------- - ---------- - ---------- - ---------- - ---------- Operating annualized return on 9.69 % 11.83 % 13.05 % 10.02 % 12.36 % average tangible equity - ---------- - ---------- - ---------- - ---------- - ---------- Operating efficiency ratio: Total noninterest expense $ 15,266 $ 15,531 $ 16,470 $ 14,725 $ 23,831 Less: merger related expenses (163 ) (187 ) (1,711 ) (594 ) (8,929 ) - ---------- - ---------- - ---------- - ---------- - ---------- Total operating noninterest 15,103 15,344 14,759 14,131 14,902 expense - ---------- - ---------- - ---------- - ---------- - ---------- Net interest income 16,581 17,156 17,008 17,002 17,715 Total noninterest income 5,719 6,788 7,032 4,735 6,387 - ---------- - ---------- - ---------- - ---------- - ---------- Total revenues $ 22,300 $ 23,944 $ 24,040 $ 21,737 $ 24,102 - ---------- - ---------- - ---------- - ---------- - ---------- Operating efficiency ratio: 67.73 % 64.08 % 61.39 % 65.01 % 61.83 % - ---------- - ---------- - ---------- - ---------- - ---------- December September June 30, March 31, December 31, 2019 30, 2019 2019 2019 31, 2018 ------------ ------------ ------------ ------------ ------------ Tangible Equity: Total shareholders’ equity $ 273,046 $ 268,082 $ 262,664 $ 259,751 $ 254,379 Less: intangible assets (44,393 ) (44,790 ) (45,199 ) (45,618 ) (46,048 ) - ---------- - ---------- - ---------- - ---------- - ---------- Tangible equity $ 228,653 $ 223,292 $ 217,465 $ 214,133 $ 208,331 - ---------- - ---------- - ---------- - ---------- - ---------- Tangible Common Equity: Tangible equity $ 228,653 $ 223,292 $ 217,465 $ 214,133 $ 208,331 Less: preferred equity — — (9,000 ) (9,000 ) (9,000 ) - ---------- - ---------- - ---------- - ---------- - ---------- Tangible common equity $ 228,653 $ 223,292 $ 208,465 $ 205,133 $ 199,331 - ---------- - ---------- - ---------- - ---------- - ---------- Tangible Book Value per Share of Common Stock: Tangible common equity $ 228,653 $ 223,292 $ 208,465 $ 205,133 $ 199,331 Total shares of common stock 18,361,922 18,343,403 17,561,476 17,765,124 17,724,721 outstanding - ---------- - ---------- - ---------- - ---------- - ---------- Tangible book value per share $ 12.45 $ 12.17 $ 11.87 $ 11.55 $ 11.25 of common stock - ---------- - ---------- - ---------- - ---------- - ----------

CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARY

Non-GAAP Financial Measures (unaudited) (dollars in thousands except share data)

Fourth Quarter 2019 Earnings Release

Year Ended ---------------------------- December 31, December 31, 2019 2018 ------------ ------------ Operating net income: Net income $ 22,422 $ 9,655 Add: merger related expenses 2,654 9,803 Less: income tax impact of merger related expenses (694 ) (2,213 ) - ---------- - ---------- Operating net income $ 24,382 $ 17,245 - ---------- - ---------- Operating diluted net income per share of common stock: Operating net income $ 24,382 $ 17,245 Weighted average shares - diluted 18,613,224 14,480,347 - ---------- - ---------- Operating diluted net income $ 1.31 $ 1.19 per share of common stock - ---------- - ---------- Operating annualized return on average assets: Operating net income $ 24,382 $ 17,245 Average assets $ 2,007,327 $ 1,528,915 - ---------- - ---------- Operating annualized return on 1.21 % 1.13 % average assets - ---------- - ---------- Operating annualized return on average tangible equity: Average total shareholders’ equity $ 264,124 $ 175,686 Less: average intangible assets (45,256 ) (16,174 ) - ---------- - ---------- Average tangible equity 218,868 159,512 - ---------- - ---------- Operating net income $ 24,382 $ 17,245 - ---------- - ---------- Operating annualized return on 11.14 % 10.81 % - ---------- - ---------- average tangible equity Operating efficiency ratio: Total noninterest expense $ 61,995 $ 53,487 Less: merger related expenses (2,654 ) (9,803 ) - ---------- - ---------- Total operating noninterest expense 59,341 43,684 - ---------- - ---------- Net interest income 67,748 51,692 Total noninterest income 24,274 15,459 - ---------- - ---------- Total revenues $ 92,022 $ 67,151 - ---------- - ---------- Operating efficiency ratio: 64.49 % 65.05 % - ---------- - ----------