EX-99.1

EX-99.1 2 d879513dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Spirit Of Texas Bancshares, Inc. Reports Fourth Quarter 2019 Financial Results

Organic loan growth of $35.9 million for the quarter

CONROE, Texas, Jan. 29, 2020 /PRNewswire/ — Spirit of Texas Bancshares, Inc. (NASDAQ: STXB) (“Spirit” or the “Company”), reported net income of $6.2 million in the fourth quarter of 2019 representing diluted earnings per share of $0.35. Net income and diluted earnings per share increased over the same period in the prior year by 148% and 59%, respectively.

Fourth Quarter 2019 Financial and Operational Highlights

•

Successfully completed the acquisition of Chandler Bancorp, Inc. and its subsidiary, Citizens State Bank, (together, “Citizens”) on November 5, 2019. The acquisition added approximately $321 million of total assets and seven full-service branches serving the East Texas region.

•

Strong organic loan growth of $35.9 million for the three months ended December 31, 2019, or 9.6% annualized.

•

Return on average assets was 1.11% annualized, which was unchanged from prior quarter and a 33 basis point increase from the fourth quarter of 2018.

•

At December 31, 2019, book value per share was $18.93 and tangible book value per share⁽¹⁾ was $14.56.

•

At December 31, 2019, total stockholders’ equity to total assets was 14.50% and tangible stockholders’ equity to tangible assets⁽¹⁾ was 11.54%.

•

Diluted earnings per share were $0.35 for the fourth quarter of 2019, compared to $0.22 for the fourth quarter of 2018. Adjusted diluted earnings per share⁽¹⁾ were $0.28 for the fourth quarter of 2019. The pre-tax, non-GAAP adjustments for the fourth quarter of 2019 consisted of a $2.4 million gain on the sale of investment securities and $821 thousand in merger related expenses.

•

Entered into a Branch Purchase and Assumption Agreement with Simmons Bank to purchase four branch offices and one mortgage loan office located in Austin, San Antonio and Tilden, Texas. The branch acquisition which will include related loan and deposit accounts is expected to close during the first quarter of 2020.

Dean Bass, Spirit’s Chairman and Chief Executive Officer, stated, “Our fourth quarter results continue to support and validate our acquisition and market diversification strategy across Texas. Since our IPO nearly two years ago, we will have expanded the Spirit’s presence from 15 locations to 41 locations after we close the Simmons branch acquisition this quarter. We continue to believe we are well positioned to take advantage of more opportunities in our markets, while providing the highest quality of service to our vibrant and growing customer base.”

Loan Portfolio and Composition

During the fourth quarter of 2019, gross loans grew to $1.77 billion as of December 31, 2019, an increase of 18.8% from $1.49 billion as of September 30, 2019, and an increase of 60.2% from $1.10 billion as of December 31, 2018. Loan growth during the fourth quarter of 2019 was primarily driven by the Citizens acquisition which added $247.3 million in loans to the acquired loan portfolio. During the third and fourth quarter of 2019, the Company executed strategic banker lift-outs that significantly contributed to the strong organic loan growth during the fourth quarter of $35.9 million. We expect these professionals will generate and maintain meaningful portfolios, while also continuing our focus on increasing core deposits to fund loan growth. We intend to continue to seek out talented bankers that are a good cultural fit and have long standing business relationships in our markets to continue to drive organic loan growth.

Additionally, with the Simmons branch acquisitions, we will expand our presence into the dynamic Austin market and strengthen our presence in the San Antonio-New Braunfels market. The acquisition will provide a strong loan portfolio and deposit base and will complement our franchise. Completion of this transaction, which is expected in the first quarter of 2020, will allow us to expand our footprint to serve all major Texas metropolitan areas.

Asset Quality

Asset quality continued to remain strong in the fourth quarter of 2019. The provision for loan losses recorded for the fourth quarter of 2019 was $775 thousand which served to increase the allowance to $6.7 million, or 0.38% of the $1.77 billion in loans outstanding as of December 31, 2019. The coverage ratio on the organic portfolio was 0.57% of the $1.18 billion in organic loans outstanding as of December 31, 2019. The nonperforming loans to loans held for investment ratio as of December 31, 2019 decreased to 0.37% from 0.61% as of September 30, 2019, and 0.46% at December 31, 2018. Annualized net charge-offs were 14 basis points for the fourth quarter of 2019, compared to 22 basis points for the fourth quarter of 2018.

Deposits and Borrowings

Deposits totaled $1.93 billion as of December 31, 2019, an increase of 21.6% from $1.59 billion as of September 30, 2019, and an increase of 63.0% from $1.18 billion as of December 31, 2018. Noninterest-bearing demand deposits increased $78.6 million, or 21.5%, from September 30, 2019, and increased $188.0 million, or 73.2% from December 31, 2018. Noninterest-bearing demand deposits represented 23.1% of total deposits as of December 31, 2019, which was unchanged from September 30, 2019, and 21.7% of total deposits as of December 30, 2018. The average cost of deposits was 0.98% for the fourth quarter of 2019, representing a five basis point decrease from the third quarter of 2019 and a four basis point decrease from the fourth quarter of 2018.

Net Interest Margin and Net Interest Income

The net interest margin for the fourth quarter of 2019 was 4.39%, a decrease of 20 basis points from the third quarter of 2019 and from the fourth quarter of 2018. The tax equivalent net interest margin⁽¹⁾ for the fourth quarter of 2019 was 4.41%, a decrease of 22 basis points from the third quarter of 2019 and a decrease of 21 basis points from the fourth quarter of 2018. The decline from the third quarter of 2019 is primarily due to rate resets on interest-earning assets as a result of decreases in interest rates set by the Federal Open Market Committee during the third quarter of 2019.

Net interest income totaled $22.2 million for the fourth quarter of 2019, an increase of 60.3% from $13.9 million for the fourth quarter of 2018. Interest income totaled $27.1 million for the fourth quarter of 2019, an increase of 60.0% from $16.9 million in the same period in 2018. Interest and fees on loans increased by $9.3 million, or 59.1%, from the fourth quarter of 2018 due to organic and acquired growth in the loan portfolio. Interest expense was $4.9 million for the fourth quarter of 2019, an increase of 58.5% from $3.1 million for the same period in 2018. The increase from the fourth quarter of 2018 was primarily due to growth in the deposit base from acquisitions partially offset by a decrease in the rate paid on interest-bearing liabilities of six basis points.

Noninterest Income and Noninterest Expense

Noninterest income totaled $5.1 million for the fourth quarter of 2019, compared to $3.0 million for the fourth quarter of 2018. The primary components of noninterest income for the fourth quarter of 2019 were gain on sales of securities of $2.4 million, gain on sales of loans of $675 thousand, and net and service charges and fees of $1.1 million. Noninterest expense totaled $18.7 million in the fourth quarter of 2019, an increase of 37.5% from $13.6 million in the same period of the prior year. This increase was primarily driven by increased salaries and employee benefits resulting from the Citizen’s acquisition as well as an investment in strategic banker lift-outs and the amortization of core deposit intangibles related to the acquisitions of The Comanche National Bank, The First National Bank of Beeville, and Citizens.

The efficiency ratio was 68.40% in the fourth quarter of 2019, compared to 80.36% in the fourth quarter of 2018.

(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 news 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 news release when comparing such non-GAAP financial measures. Please see a reconciliation to the nearest respective GAAP measures at the end of this news release.

Conference Call

Spirit of Texas Bancshares has scheduled a conference call to discuss its fourth quarter 2019 results, which will be broadcast live over the Internet, on Thursday, January 30, 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 http://ir.sotb.com/events-presentations. For those who cannot listen to the live call, a replay will be available through February 6, 2020 and may be accessed by dialing 201-612-7415 and using pass code 13698207#. Also, an archive of the webcast will be available shortly after the call at http://ir.sotb.com/events-presentations for 90 days.

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 36 locations in the Houston, Dallas/Fort Worth, Bryan/College Station, San Antonio-New Braunfels, Corpus Christi and Tyler metropolitan areas, along with offices in North Central 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. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: risks relating to the possibility that the expected benefits and synergies and our projections related to the Citizens acquisition and the Simmons branch acquisitions may not materialize as expected; that prior to the completion of the pending Simmons branch acquisition, the target branches could experience disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities; difficulty retaining key employees; business and economic conditions generally and in the bank and non-bank financial services industries, nationally and

within our local market areas; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; risks related to the integration of acquired businesses and any future acquisitions; our ability to successfully identify and address the risks associated with our recent, pending and possible future acquisitions; changes in management personnel; interest rate risk; credit risk associated with our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates and projections; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures and those of companies we acquire; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, and their application by our regulators; governmental monetary and fiscal policies; increases in our capital requirements; and other risks identified in Spirit’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 15, 2019, its Quarterly Report on Form 10-Q for the periods ended March 31, 2019, June 30, 2019, and September 30, 2019 filed with the SEC on May 10, 2019, August 9, 2019, and November 8, 2019, respectively, 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.


Contacts:		Dennard Lascar Investor Relations
		Ken Dennard / Natalie Hairston
		(713) 529-6600
		STXB@dennardlascar.com

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Income

(Unaudited)


	For the Three Months Ended
	December 31, 2019		September 30, 2019			June 30, 2019		March 31, 2019		December 31, 2018
	(Dollars in thousands, except per share data)
Interest income:

Interest and fees on loans	$	25,160	$	23,064		$	22,204	$	17,118	$	15,817
Interest and dividends on investment securities		997		1,143			1,302		1,182		897
Other interest income		918		794			794		584		208

Total interest income		27,075		25,001			24,300		18,884		16,922

Interest expense:

Interest on deposits		4,434		4,097			3,938		3,071		2,613
Interest on FHLB advances and other borrowings		416		425			611		378		447

Total interest expense		4,850		4,522			4,549		3,449		3,060

Net interest income		22,225		20,479			19,751		15,435		13,862
Provision for loan losses		775		900			332		849		700

Net interest income after provision for loan losses		21,450		19,579			19,419		14,586		13,162

Noninterest income:

Service charges and fees		1,146		866			969		729		649
SBA loan servicing fees		391		234			40		264		1,026
Mortgage referral fees		232		173			198		110		97
Gain on sales of loans, net		675		1,151			1,384		804		1,236
Gain (loss) on sales of investment securities		2,448		—			1,053		1,081		—
Other noninterest income		162		257			131		69		23

Total noninterest income		5,054		2,681			3,775		3,057		3,031

Noninterest expense:
Salaries and employee benefits		10,684		9,502			8,765		7,124		7,988
Occupancy and equipment expenses		2,222		1,710			1,690		1,262		1,479
Professional services		1,200		791			1,022		1,041		1,806
Data processing and network		936		884			731		485		340
Regulatory assessments and insurance		265		(256	)		315		98		307
Amortization of intangibles		1,006		1,015			1,006		603		390
Advertising		225		134			167		97		81
Marketing		131		136			132		139		154
Telephone expense		226		289			338		140		82
Conversion expense		180		314			453		1,151		160
Other operating expenses		1,584		1,037			1,206		864		789

Total noninterest expense		18,659		15,556			15,825		13,004		13,576

Income before income tax expense		7,845		6,704			7,369		4,639		2,617
Income tax expense		1,676		1,374			1,542		829		104

Net income	$	6,169	$	5,330		$	5,827	$	3,810	$	2,513

Earnings per common share:
Basic	$	0.35	$	0.35		$	0.42	$	0.31	$	0.23
Diluted	$	0.35	$	0.34		$	0.41	$	0.30	$	0.22

Weighted average common shares outstanding:
Basic		17,434,954		15,370,480			13,765,929		12,152,558		10,994,467
Diluted		17,830,538		15,771,249			14,236,244		12,607,445		11,450,552

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Consolidated Balance Sheets

(Unaudited)


	As of
	December 31, 2019			September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018
	(Dollars in thousands)
Assets:
Cash and due from banks	$	32,490		$	28,822		$	26,150		$	19,397		$	22,664
Interest-bearing deposits in other banks		293,467			122,721			137,008			103,265			66,351

Total cash and cash equivalents		325,957			151,543			163,158			122,662			89,015

Time deposits in other banks		490			1,225			1,225			—			—
Investment securities:
Available for sale securities, at fair value		96,937			166,669			171,058			131,068			179,461

Total investment securities		96,937			166,669			171,058			131,068			179,461

Loans held for sale		3,989			2,784			2,583			6,300			3,945
Loans:
Loans held for investment		1,767,182			1,487,602			1,418,211			1,125,855			1,102,808
Less: allowance for loan and lease losses		(6,737	)		(6,565	)		(6,277	)		(6,569	)		(6,286	)

Loans, net		1,760,445			1,481,037			1,411,934			1,119,286			1,096,522

Premises and equipment, net		75,150			65,144			62,815			55,237			53,877
Accrued interest receivable		6,507			6,319			7,039			4,849			4,934
Other real estate owned and repossessed assets		3,653			1,042			1,324			518			782
Goodwill		68,324			43,086			43,889			18,253			18,253
Core deposit intangible		11,472			11,628			12,583			7,954			8,558
SBA servicing asset		3,355			3,548			3,570			3,747			3,965
Deferred tax asset, net		—			—			48			—			328
Bank-owned life insurance		15,610			15,521			15,432			7,442			7,401
Federal Home Loan Bank and other bank stock, at cost		8,310			6,233			6,190			5,264			5,304
Other assets		4,603			4,005			4,485			4,464			4,276

Total assets	$	2,384,802		$	1,959,784		$	1,907,333		$	1,487,044		$	1,476,621

Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Transaction accounts:
Noninterest-bearing	$	444,822		$	366,209		$	367,892		$	258,440		$	256,784
Interest-bearing		803,557			593,064			569,839			363,326			378,822

Total transaction accounts		1,248,379			959,273			937,731			621,766			635,606
Time deposits		679,747			625,940			632,873			581,486			547,042

Total deposits		1,928,126			1,585,213			1,570,604			1,203,252			1,182,648
Accrued interest payable		1,219			1,002			1,134			737			702
Short-term borrowings		—			—			—			—			12,500
Long-term borrowings		105,140			74,165			89,398			75,536			77,784
Deferred tax liability, net		852			215			—			449			—
Other liabilities		3,760			2,451			2,087			3,094			4,191

Total liabilities		2,039,097			1,663,046			1,663,223			1,283,068			1,277,825

Stockholders’ Equity:
Common stock		297,188			251,875			204,974			171,159			169,939
Retained earnings		48,139			41,970			36,640			30,813			27,003
Accumulated other comprehensive income (loss)		667			3,091			2,496			2,004			1,854
Treasury stock		(289	)		(198	)		—			—			—

Total stockholders’ equity		345,705			296,738			244,110			203,976			198,796

Total liabilities and stockholders’ equity	$	2,384,802		$	1,959,784		$	1,907,333		$	1,487,044		$	1,476,621

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Loan Composition

(Unaudited)


	As of
	December 31, 2019		September 30, 2019		June 30, 2019		March 31, 2019		December 31, 2018
	(Dollars in thousands)
Loans:
Commercial and industrial loans (1)	$	282,949	$	248,745	$	197,774	$	162,934	$	173,892
Real estate:
1-4 single family residential loans		375,743		321,044		281,514		284,780		279,665
Construction, land and development loans		259,384		233,830		176,567		169,919		159,734
Commercial real estate loans (including multifamily)		753,812		597,415		671,900		423,900		403,800
Consumer loans and leases		22,769		17,663		20,745		21,631		24,378
Municipal and other loans		72,525		68,905		69,711		62,691		61,339

Total loans held in portfolio	$	1,767,182	$	1,487,602	$	1,418,211	$	1,125,855	$	1,102,808

(1)	Balance includes $74.2 million, $78.7 million, $71.3 million, $73.5 million and $76.9 million of the unguaranteed portion of SBA loans as of December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively.

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Deposit Composition

(Unaudited)


	As of
	December 31, 2019		September 30, 2019		June 30, 2019		March 31, 2019		December 31, 2018
	(Dollars in thousands)
Deposits:
Noninterest-bearing demand deposits	$	444,822	$	366,209	$	367,892	$	258,440	$	256,784
Interest-bearing demand deposits		370,467		303,037		292,550		127,182		124,933
Interest-bearing NOW accounts		28,204		8,626		7,638		7,509		7,961
Savings and money market accounts		404,886		281,401		269,651		228,635		245,928
Time deposits		679,747		625,940		625,940		581,486		547,042

Total deposits	$	1,928,126	$	1,585,213	$	1,563,671	$	1,203,252	$	1,182,648

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Average Balances and Yields

(Unaudited)


	Three Months Ended December 31,
	2019							2018
	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	$	191,822	$	854		1.77	%	$	19,828	$	120		2.40	%
Loans, including loans held for sale (2)		1,655,206		25,160		6.03	%		1,045,628		15,817		6.00	%
Investment securities and other		156,840		1,061		2.68	%		133,669		985		2.92	%

Total interest-earning assets		2,003,868		27,075		5.36	%		1,199,125		16,922		5.60	%

Noninterest-earning assets		196,873							84,889

Total assets	$	2,200,741						$	1,284,014

Interest-bearing liabilities:
Interest-bearing demand deposits	$	334,819	$	271		0.32	%	$	78,237	$	100		0.51	%
Interest-bearing NOW accounts		21,430		20		0.37	%		8,521		3		0.15	%
Savings and money market accounts		358,054		890		0.99	%		221,937		368		0.66	%
Time deposits		664,435		3,253		1.94	%		487,811		2,142		1.74	%
FHLB advances and other borrowings		79,174		416		2.08	%		82,716		447		2.14	%

Total interest-bearing liabilities		1,457,912		4,850		1.32	%		879,222		3,060		1.38	%

Noninterest-bearing liabilities and shareholders’ equity:
Noninterest-bearing demand deposits		421,375							226,976
Other liabilities		3,795							3,281
Stockholders’ equity		317,659							174,535

Total liabilities and stockholders’ equity	$	2,200,741						$	1,284,014

Net interest rate spread						4.04	%						4.22	%

Net interest income and margin			$	22,225		4.40	%			$	13,862		4.59	%

Net interest income and margin (tax equivalent)(3)			$	22,352		4.43	%			$	14,076		4.62	%

(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 December 31, 2019 and 2018, respectively.

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Average Balances and Yields

(Unaudited)


	Three Months Ended
	December 31, 2019							September 30, 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		191,822	$	854		1.77	%	$	135,460	$	750		2.20	%
Loans, including loans held for sale (2)		1,655,206		25,160		6.03	%		1,458,603		23,064		6.27	%
Investment securities and other		156,840		1,061		2.68	%		175,369		1,187		2.69	%

Total interest-earning assets		2,003,868		27,075		5.36	%		1,769,432		25,001		5.61	%

Noninterest-earning assets		196,873							150,139

Total assets	$	2,200,741						$	1,919,571

Interest-bearing liabilities:
Interest-bearing demand deposits	$	334,819	$	271		0.32	%	$	285,306	$	349		0.49	%
Interest-bearing NOW accounts		21,430		20		0.37	%		7,846		3		0.15	%
Savings and money market accounts		358,054		890		0.99	%		273,662		579		0.84	%
Time deposits		664,435		3,253		1.94	%		630,969		3,166		1.99	%
FHLB advances and other borrowings		79,174		416		2.08	%		65,358		425		2.58	%

Total interest-bearing liabilities		1,457,912		4,850		1.32	%		1,263,141		4,522		1.42	%

Noninterest-bearing liabilities and shareholders’ equity:
Noninterest-bearing demand deposits		421,375							380,997
Other liabilities		3,795							4,232
Stockholders’ equity		317,659							271,201

Total liabilities and stockholders’ equity	$	2,200,741						$	1,919,571

Net interest rate spread						4.04	%						4.19	%

Net interest income and margin			$	22,225		4.40	%			$	20,479		4.59	%

Net interest income and margin (tax equivalent)(3)			$	22,352		4.43	%			$	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 December 31, 2019 and September 30, 2019, 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
	December 31, 2019			September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018
	(Dollars in thousands, except per share data)
Basic and diluted earnings per share - GAAP basis:
Net income available to common stockholders	$	6,169		$	5,330		$	5,827		$	3,810		$	2,513

Weighted average number of common shares - basic		17,434,954			15,370,480			13,765,929			12,152,558			10,994,467
Weighted average number of common shares - diluted		17,830,538			15,771,249			14,236,244			12,607,445			11,450,552
Basic earnings per common share	$	0.35		$	0.35		$	0.42		$	0.31		$	0.23

Diluted earnings per common share	$	0.35		$	0.34		$	0.41		$	0.30		$	0.22

Basic and diluted earnings per share - Non-GAAP basis:
Net income	$	6,169		$	5,330		$	5,827		$	3,810		$	2,513
Pre-tax adjustments:
Noninterest income
Gain on sale of investment securities		(2,448	)		—			(1,053	)		(1,081	)		—
Noninterest expense
Merger related expenses		821			1,094			1,165			1,778			1,447
Taxes:
Tax effect of adjustments		467			(193	)		53			(146	)		(149	)

Adjusted net income	$	5,009		$	6,231		$	5,992		$	4,361		$	3,811

Weighted average number of common shares - basic		17,434,954			15,370,480			13,765,929			12,152,558			10,994,467
Weighted average number of common shares - diluted		17,830,538			15,771,249			14,236,244			12,607,445			11,450,552
Basic earnings per common share - Non-GAAP basis	$	0.29		$	0.41		$	0.44		$	0.36		$	0.35

Diluted earnings per common share - Non-GAAP basis	$	0.28		$	0.40		$	0.42		$	0.35		$	0.33

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
	December 31, 2019			September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018
	(Dollars in thousands, except per share data)
Net interest margin - GAAP basis:
Net interest income	$	22,225		$	20,479		$	19,751		$	15,435		$	13,862
Average interest-earning assets		2,003,868			1,769,432			1,716,799			1,346,104			1,199,125
Net interest margin		4.40	%		4.59	%		4.61	%		4.65	%		4.59	%
Net interest margin - Non-GAAP basis:
Net interest income	$	22,225		$	20,479		$	19,751		$	15,435		$	13,862
Plus:
Impact of fully taxable equivalent adjustment		127			153			112			138			114

Net interest income on a fully taxable equivalent basis	$	22,352		$	20,632		$	19,863		$	15,573		$	13,976

Average interest-earning assets		2,003,868			1,769,432			1,716,799			1,346,104			1,199,125
Net interest margin on a fully taxable equivalent basis - Non-GAAP basis		4.43	%		4.63	%		4.64	%		4.69	%		4.62	%

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Reconciliation of Non-GAAP Financial Measures - Tangible Book Value Per Share

(Unaudited)


	As of
	December 31, 2019		September 30, 2019		June 30, 2019		March 31, 2019		December 31, 2018
	(Dollars in thousands, except per share data)
Total stockholders’ equity	$	345,705	$	296,738	$	244,110	$	203,976	$	198,796
Less:
Goodwill and other intangible assets		79,796		54,714		56,472		26,207		26,811

Tangible stockholders’ equity	$	265,909	$	242,024	$	187,638	$	177,769	$	171,985

Shares outstanding		18,258,222		16,121,479		13,790,332		12,195,891		12,103,753
Book value per share	$	18.93	$	18.41	$	17.70	$	16.72	$	16.42
Less:
Goodwill and other intangible assets per share		4.37		3.40		4.09		2.14		2.21

Tangible book value per share	$	14.56	$	15.01	$	13.61	$	14.58	$	14.21

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Reconciliation of Non-GAAP Financial Measures - Tangible Equity to Tangible Assets

(Unaudited)


	As of
	December 31, 2019			September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018
	(Dollars in thousands)
Total stockholders’ equity to total assets - GAAP basis:
Total stockholders’ equity (numerator)	$	345,705		$	296,738		$	244,110		$	203,976		$	198,796
Total assets (denominator)		2,384,802			1,959,784			1,907,333			1,487,044			1,476,621
Total stockholders’ equity to total assets		14.50	%		15.14	%		12.80	%		13.72	%		13.46	%
Tangible equity to tangible assets - Non-GAAP basis:
Tangible equity:
Total stockholders’ equity	$	345,705		$	296,738		$	244,110		$	203,976		$	198,796
Less:
Goodwill and other intangible assets		79,796			54,714			56,472			26,207			26,811

Total tangible common equity (numerator)	$	265,909		$	242,024		$	187,638		$	177,769		$	171,985

Tangible assets:
Total assets		2,384,802			1,959,784			1,907,333			1,487,044			1,476,621
Less:
Goodwill and other intangible assets		79,796			54,714			56,472			26,207			26,811

Total tangible assets (denominator)	$	2,305,006		$	1,905,070		$	1,850,861		$	1,460,837		$	1,449,810

Tangible equity to tangible assets		11.54	%		12.70	%		10.14	%		12.17	%		11.86	%