Oakworth Capital Inc. Reports 27% Increase in First Half 2023 Diluted EPS

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Jul 31, 2023, 10:10 ET

Linked-quarter, annualized deposit growth of 34%, wealth asset growth of 24% and loan growth of 11%

BIRMINGHAM, Ala., July 31, 2023 /PRNewswire/ -- Oakworth Capital Inc. (Oakworth) (OTCQX: OAKC) reported 27% higher diluted earnings per share and 26% higher earnings year-to-date June 30, 2023 compared to the same period of 2022. Pre-tax, pre-provision income increased 24% in the same period. First half 2023 return on average equity was 11.6% and return on average assets was 1.0%.

Oakworth's Chairman and CEO Scott Reed stated, "Oakworth continues to execute on our plan to bring a unique approach to financial services in all of our markets as demonstrated by balanced growth across our core disciplines. The growth in deposits is notable given the industry turmoil in the first half of 2023 related to the failure of three large regional banks. This deposit growth is tangible evidence that Oakworth is viewed as a stable and safe institution for its clients. I am also pleased with the return of our wealth book to its previous record level of nearly $2 billion in assets which is the result of our team's ability to add nearly $70 million in new wealth assets along with some amount of market value recovery."

Mr. Reed continued, "In addition to maintaining a 96 Net Promoter Score over the past 12 months, we have been preparing for a successful opening of our Central Carolinas office in the third quarter. We continue to attract associates who embody our core values and who will provide the consistent, high level of service that has become synonymous with Oakworth. The reception Oakworth has experienced to date is exciting, and we look forward to executing our business model in another dynamic market."

Net income for the quarter was $3.2 million with total revenue of $14.7 million. Quarterly earnings per share were $0.66 on a diluted basis, up from $0.55 one year earlier and $0.62 in the prior quarter. Net interest income increased 22% compared to second quarter 2022 and 1% linked-quarter. The second quarter 2023 net interest margin was 3.45% compared to 3.31% one year ago and 3.64% in the prior quarter. The margin contraction in the most recent quarter is attributed to faster deposit growth, higher overall deposit interest rates, and moderated loan growth. Wealth fees were steady both linked quarter and compared to second quarter 2022. Wealth assets were $1.99 billion at June 30, 2023.

Oakworth's credit quality remains pristine with continued $0 charge-offs, $0 non-performing assets and $0 90-day past due loans as of and for the quarter ended June 30, 2023.

Oakworth's capital position remains strong. At June 30, 2023, Tier 1 Capital was 10.2%, the Total Capital Ratio was 11.2% and the Leverage Ratio was 9.6%.

About Oakworth Capital Inc. and Oakworth Capital Bank
Oakworth Capital, Inc. operates as the bank holding company for Oakworth Capital Bank (Oakworth) (OTCQX: OAKC). Oakworth was founded in 2008 and operates three offices in the Southeast, including its headquarters in Birmingham, Alabama and plans to open a fourth office in 2023. Oakworth provides commercial and private banking, wealth management and advisory services to clients across the United States.

Oakworth has been named the #1 "Best Bank to Work For" for the past five years in a row (2018-2022) by American Banker. Additionally, Oakworth has earned a Net Promoter Score (NPS) of 96 out of 100 (June 2022 to June 2023) and has a client retention rate of 95% in 2022. As of June 30, 2023, Oakworth had $1.4 billion in total assets, $1.1 billion in gross loans, $1.2 billion in deposits and $2.0 billion in wealth and trust assets under management. For more information, visit www.oakworth.com .

OAKWORTH CAPITAL INC.

WEALTH AND TRUST (Unaudited)
(In millions)	As of					Change		Change
	6/30/2023	3/31/2023	12/31/2022	9/30/2022	6/30/2022	6/30/2023 vs. 3/31/2023		6/30/2023 vs. 6/30/2022

Wealth assets (non-balance sheet)	$ 1,987	$ 1,875	$ 1,802	$ 1,738	$ 1,783	$ 112	6.0 %	$ 204	11 %

CONSOLIDATED CONDENSED STATEMENTS OF CONDITION (Unaudited)
(in thousands)	As of					Change		Change
	6/30/2023	3/31/2023	12/31/2022	9/30/2022	6/30/2022	6/30/2023 vs. 3/31/2023		6/30/2023 vs. 6/30/2022
Assets
Cash and due from banks	$ 140,421	$ 69,575	$ 185,483	$ 115,950	$ 114,252	$ 70,846	102 %	$ 26,169	23 %
Federal funds sold	3,825	3,025	4,475	2,650	5,300	800	26 %	(1,475)	-28 %
Securities available for sale	135,433	136,234	132,050	130,722	130,093	(801)	-1 %	5,340	4 %
Loans, net of unearned income	1,107,028	1,076,532	974,398	934,003	854,432	30,496	3 %	252,596	30 %
Allowance for loan losses	(13,144)	(12,808)	(11,692)	(11,240)	(10,612)	(336)	3 %	(2,532)	24 %
Loans, net	1,093,884	1,063,724	962,706	922,763	843,820	30,160	3 %	250,064	30 %
Fixed assets	4,626	3,314	3,129	3,136	3,242	1,312	40 %	1,384	43 %
Interest receivable	4,791	4,752	4,263	2,957	2,605	39	1 %	2,186	84 %
Other assets	45,999	44,986	43,348	42,228	40,931	1,013	2 %	5,068	12 %
Total assets	$ 1,428,979	$ 1,325,610	$ 1,335,454	$ 1,220,406	$ 1,140,243	$ 103,369	8 %	$ 288,736	25 %

Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing deposits	$ 301,821	$ 324,649	$ 315,033	$ 319,828	$ 329,684	$ (22,828)	-7 %	$ (27,863)	-8 %
Interest-bearing deposits	922,391	802,946	861,401	751,026	695,837	119,445	15 %	226,554	33 %
Total deposits	1,224,212	1,127,595	1,176,434	1,070,854	1,025,521	96,617	9 %	198,691	19 %
Total Borrowings	74,158	74,134	34,112	34,105	-	24	0 %	74,158	NA
Accrued interest payable	982	425	840	294	27	557	131 %	955	3537 %
Other liabilities	17,960	14,937	20,310	15,160	14,124	3,023	20 %	3,836	27 %
Total liabilities	1,317,312	1,217,091	1,231,696	1,120,413	1,039,672	100,221	8 %	277,640	27 %
Total stockholders' equity	111,667	108,519	103,758	99,993	100,571	3,148	3 %	11,096	11 %
Total liabilities and stockholders' equity	$ 1,428,979	$ 1,325,610	$ 1,335,454	$ 1,220,406	$ 1,140,243	$ 103,369	8 %	$ 288,736	25 %

OAKWORTH CAPITAL INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
(in thousands)	Quarter Ended					Change		Change
	6/30/2023	3/31/2023	12/31/2022	9/30/2022	6/30/2022	2Q23 vs. 1Q23		2Q23 vs. 2Q22

Interest income:
Loans, including fees	$ 18,193	$ 15,864	$ 13,643	$ 11,065	$ 8,605	$ 2,329	15 %	$ 9,588	111 %
Securities available for sale	825	811	797	774	696	14	2 %	129	19 %
Short term investments	991	909	1,161	496	314	82	9 %	677	216 %
Total interest income	20,009	17,584	15,601	12,335	9,615	2,425	14 %	10,394	108 %
Interest expense:
Deposits	7,585	5,729	3,782	1,286	343	1,856	32 %	7,242	2111 %
Borrowings	1,072	638	548	258	-	434	68 %	1,072	NA
Total interest expense	8,657	6,367	4,330	1,544	343	2,290	36 %	8,314	2424 %
Net interest income	11,352	11,217	11,271	10,791	9,272	135	1 %	2,080	22 %
Provision for loan losses	335	1,116	452	628	931	(781)	-70 %	(596)	-64 %
Net interest income after provision	11,017	10,101	10,819	10,163	8,341	916	9 %	2,676	32 %
for loan losses
Non-interest income	3,392	3,297	3,095	3,136	3,159	95	3 %	233	7 %
Non-interest expense	10,151	9,447	9,518	9,098	7,948	704	7 %	2,203	28 %
Income before income taxes	4,258	3,951	4,396	4,201	3,552	307	8 %	706	20 %
Provision for income taxes	1,011	934	1,051	1,008	846	77	8 %	165	20 %
Net Income	3,247	3,017	3,345	3,193	2,706	230	8 %	541	20 %
Earnings per share - basic	$ 0.66	$ 0.62	$ 0.69	$ 0.66	$ 0.56	$ 0.05	7 %	$ 0.10	18 %
Earnings per share - diluted	$ 0.66	$ 0.62	$ 0.68	$ 0.65	$ 0.55	$ 0.05	8 %	$ 0.12	21 %

OAKWORTH CAPITAL INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
(in thousands)	YTD Period Ended
	6/30/2023	6/30/2022	Change

Interest income:
Loans, including fees	$ 34,057	$ 15,974	$ 18,083	113 %
Securities available for sale	1,635	1,279	356	28 %
Short term investments	1,900	437	1,463	335 %
Total interest income	37,592	17,690	19,902	113 %
Interest expense:
Deposits	13,314	620	12,694	2047 %
Borrowings	1,709	-	1,709	NA
Total interest expense	15,023	620	14,403	2323 %
Net interest income	22,569	17,070	5,499	32 %
Provision for loan losses	1,452	1,297	155	12 %
Net interest income after provision	21,117	15,773	5,344	34 %
for loan losses
Non-interest income	6,690	6,407	283	4 %
Non-interest expense	19,598	15,689	3,909	25 %
Income before income taxes	8,209	6,491	1,718	26 %
Provision for income taxes	1,945	1,529	416	27 %
Net Income	6,264	4,962	1,302	26 %
Earnings per share - basic	$ 1.28	$ 1.03	$ 0.25	25 %
Earnings per share - diluted	$ 1.28	$ 1.01	$ 0.27	27 %