CryptoStar Corp. Q4 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

  • EPS & Profitability: Q4 2022 earnings per share (EPS) of $0.47 and full-year 2022 EPS of $1.77. Return on Average Assets (ROA) stood at 1.31%, and Return on Tangible Equity at 13.6%.
  • Operational Items: Q4 included a $732K recovery from one of two Q3 2022 operational losses. The second loss (related to a wire fraud incident) is still pending recovery, with authorities actively pursuing the fraudster.

Loan & Deposit Trends

  • Loan Growth: Average loan growth for Q4 2022 was 11.1% annualized, and 8.6% ex-TriNet. Production was $150M for the quarter, with a healthy pipeline of $450M.
  • Loan Yield: Increased by 41 bps in Q4 to 5.39%. New production yields range between 6–7% depending on the term and structure.
  • Loan spreads: Back to 2.39% on a match-funded basis, up from ~170 bps earlier in 2022.
  • Deposit Pressure: Total deposits were flat in Q4. Depositors moved funds to U.S. Treasuries, causing $156M in customer balance decline, replaced with $160M in brokered deposits.
  • Deposit Cost: Increased 58bps Q/Q to 1.20%. Deposit beta rose to ~40% in Q4.
  • Loan-to-Deposit Ratio: Reported ~86%, though adjusted customer loan-to-deposit ratio is ~95% when excluding brokered CDs.

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Operator: Good morning, everyone, and welcome to CapStar Financial Holdings Fourth Quarter 2022 Earnings Conference Call. Hosting the call today from CapStar are Tim Schools, President and Chief Executive Officer; Mike Fowler, Chief Financial Officer; Chris Tietz, Chief Credit Policy Officer, Executive VP of Specialty Bank. Please note that today's call is being recorded. Replay of the call and the earnings release and presentation materials will be available on the Investor Relations page of the company's website at capstarbank.com. During the presentation, we may make comments, which constitute forward-looking statements within the meaning of the federal security laws. All forward-looking statements are subject to risks and uncertainties and other factors that may cause the actual results and performance or achievements of CapStar to differ materially from those expressed or implied by such forward-looking statements. Listeners are cautioned not to place undue reliance on forward-looking statements. A more detailed description of these and other risks, uncertainties and factors are contained in CapStar's filing with the Securities and Exchange Commission except as otherwise required by applicable law. CapStar disclaims any obligation to update or revise any forward-looking statements made during this presentation. We would also refer you to Page 2 of the presentation slides for disclaimers regarding forward-looking statements, non-GAAP financial measures and other informati

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