Oakworth Capital Inc. Reports Fourth Quarter and Fiscal Year 2023 Financial Results

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Jan 24, 2024, 09:00 ET

BIRMINGHAM, Ala., Jan. 24, 2024 /PRNewswire/ -- Oakworth Capital Inc. (OTCQX: OAKC) reported strong balance sheet growth in fiscal year 2023 including 30% average loan growth (28% year end 2023 vs. year end 2022) and 12% average deposit growth (21% fiscal year end 2023 vs. 2022). Earnings, which were impacted by $7.4 million, net of tax, of provisioning related to a single credit, were $4.7 million or $0.96 per share, diluted.

Oakworth's Chairman and CEO Scott Reed stated, "2023 was a year of investing in growth. We invested in all of our markets, including the opening of our Central Carolinas office, and in our infrastructure. We look forward to realizing the return on those investments in 2024 and beyond." Mr. Reed continued, "We did realize our first credit loss of significance in our 15-year history. Even though credit losses are a normal part of a bank's business, we are accustomed to pristine credit quality and take much pride in our track record. Excluding the impact of this charge-off, our profitable growth continues according to our plan."

The aforementioned credit, which was charged off late in the quarter, represented the larger of two credits in the same relationship that were moved to non-accrual status early in the fourth quarter and reported in our most recent earnings release. The smaller, $5 million, second credit is well-secured and remains Oakworth's single non-performing asset.

Wealth assets increased 12% year-over-year and 6% linked-quarter to $2.0 billion. Annual loan growth of 28% and linked-quarter loan growth of 9% represents all lending categories and deposit growth of 21% year-over-year and 15% linked-quarter is all client-related, core business.

Profitability in the quarter and year was impacted by both the re-provisioning of the charge-off noted above and approximately $1.2 million directly related to our entry into the Central Carolinas market. Oakworth expects to realize a return on this investment starting in 2024, as has been the history of significant investments in the business.

At December 31, 2023, Tier 1 Capital was 9.7%, the Total Capital Ratio was 10.7% and the Leverage Ratio was 9.3%.

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 four offices in the Southeast, including its headquarters in Birmingham, Alabama. 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 six years in a row (2018-2023) by American Banker. Additionally, Oakworth has earned a Net Promoter Score (NPS) of 96 out of 100 (FY2023) and has a client retention rate of 97% in 2023. As of Dec. 31, 2023, Oakworth had $1.6 billion in total assets, $1.2 billion in gross loans, $1.4 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
	12/31/2023	9/30/2023	6/30/2023	3/31/2023	12/31/2022	12/31/2023 vs. 9/30/2023		12/31/2023 vs. 12/31/2022

Wealth assets (non-balance sheet)	$ 2,016	$ 1,896	$ 1,987	$ 1,875	$ 1,802	$ 120	6 %	$ 214	12 %

CONSOLIDATED CONDENSED STATEMENTS OF CONDITION (Unaudited)
(in thousands)	As of					Change		Change
	12/31/2023	9/30/2023	6/30/2023	3/31/2023	12/31/2022	12/31/2023 vs. 9/30/2023		12/31/2023 vs. 12/31/2022
Assets
Cash and due from banks	$ 158,403	$ 116,065	$ 140,421	$ 69,575	$ 185,483	$ 42,338	36 %	$ (27,080)	-15 %
Federal funds sold	3,925	2,225	3,825	3,025	4,475	1,700	76 %	(550)	-12 %
Securities available for sale	143,947	137,907	135,433	136,234	132,050	6,040	4 %	11,897	9 %
Loans, net of unearned income	1,244,133	1,146,526	1,107,028	1,076,532	974,398	97,607	9 %	269,735	28 %
Allowance for loan losses	(14,652)	(13,575)	(13,144)	(12,808)	(11,692)	(1,077)	8 %	(2,960)	25 %
Loans, net	1,229,481	1,132,951	1,093,884	1,063,724	962,706	96,530	9 %	266,775	28 %
Fixed assets	4,681	4,758	4,626	3,314	3,129	(77)	-2 %	1,552	50 %
Interest receivable	6,284	5,932	4,791	4,752	4,263	352	6 %	2,021	47 %
Other assets	48,506	50,209	45,999	44,986	43,348	(1,703)	-3 %	5,158	12 %
Total assets	$ 1,595,227	$ 1,450,047	$ 1,428,979	$ 1,325,610	$ 1,335,454	$ 145,180	10 %	$ 259,773	19 %

Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing deposits	$ 319,986	$ 278,822	$ 301,821	$ 324,649	$ 315,033	$ 41,164	15 %	$ 4,953	2 %
Interest-bearing deposits	1,105,921	963,044	922,391	802,946	861,401	142,877	15 %	244,520	28 %
Total deposits	1,425,907	1,241,866	1,224,212	1,127,595	1,176,434	184,041	15 %	249,473	21 %
Total Borrowings	34,204	74,180	74,158	74,134	34,112	(39,976)	-54 %	92	0 %
Accrued interest payable	1,070	455	982	425	840	615	135 %	230	27 %
Other liabilities	23,794	21,840	17,960	14,937	20,310	1,954	9 %	3,484	17 %
Total liabilities	1,484,975	1,338,341	1,317,312	1,217,091	1,231,696	146,634	11 %	253,279	21 %
Total stockholders' equity	110,252	111,706	111,667	108,519	103,758	(1,454)	-1 %	6,494	6 %
Total liabilities and stockholders' equity	$ 1,595,227	$ 1,450,047	$ 1,428,979	$ 1,325,610	$ 1,335,454	$ 145,180	10 %	$ 259,773	19 %

OAKWORTH CAPITAL INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME *(Unaudited)*
(in thousands)	Quarter Ended					Change		Change
	12/31/2023	9/30/2023	6/30/2023	3/31/2023	12/31/2022	4Q23 vs. 3Q23		4Q23 vs. 4Q22

Interest income:
Loans, including fees	$ 20,322	$ 19,204	$ 18,193	$ 15,864	$ 13,643	$ 1,118	6 %	$ 6,679	49 %
Securities available for sale	977	899	825	811	797	78	9 %	180	23 %
Short term investments	1,463	1,608	991	909	1,161	(145)	-9 %	302	26 %
Total interest income	22,762	21,711	20,009	17,584	15,601	1,051	5 %	7,161	46 %
Interest expense:
Deposits	9,976	9,200	7,585	5,729	3,782	776	8 %	6,194	164 %
Borrowings	1,219	1,097	1,072	638	548	122	11 %	671	122 %
Total interest expense	11,195	10,297	8,657	6,367	4,330	898	9 %	6,865	159 %
Net interest income	11,567	11,414	11,352	11,217	11,271	153	1 %	296	3 %
Provision for loan losses	10,792	431	335	1,116	452	10,361	2404 %	10,340	2288 %
Net interest income after provision	775	10,983	11,017	10,101	10,819	(10,208)	-93 %	(10,044)	-93 %
for loan losses
Non-interest income	3,753	3,836	3,392	3,297	3,095	(83)	-2 %	658	21 %
Non-interest expense	11,013	10,640	10,151	9,447	9,518	373	4 %	1,495	16 %
Income before income taxes	(6,485)	4,179	4,258	3,951	4,396	(10,664)	-255 %	(10,881)	-248 %
Provision for income taxes	(1,752)	1,035	1,011	934	1,051	(2,787)	-269 %	(2,803)	-267 %
Net Income	(4,733)	3,144	3,247	3,017	3,345	(7,877)	-251 %	(8,078)	-241 %
Earnings per share - basic	$ (0.97)	$ 0.64	$ 0.66	$ 0.62	$ 0.69	$ (1.61)	-250 %	$ (1.66)	-240 %
Earnings per share - diluted	$ (0.97)	$ 0.64	$ 0.66	$ 0.62	$ 0.68	$ (1.61)	-250 %	$ (1.65)	-242 %

OAKWORTH CAPITAL INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME *(Unaudited)*
(in thousands)	YTD Period Ended
	12/31/2023	12/31/2022	Change

Interest income:
Loans, including fees	$ 73,584	$ 40,682	$ 32,902	81 %
Securities available for sale	3,510	2,849	661	23 %
Short term investments	4,971	2,094	2,877	137 %
Total interest income	82,065	45,625	36,440	80 %
Interest expense:
Deposits	32,490	5,688	26,802	471 %
Borrowings	4,025	806	3,219	399 %
Total interest expense	36,515	6,494	30,021	462 %
Net interest income	45,550	39,131	6,419	16 %
Provision for loan losses	12,675	2,376	10,299	433 %
Net interest income after provision	32,875	36,755	(3,880)	-11 %
for loan losses
Non-interest income	14,278	12,638	1,640	13 %
Non-interest expense	41,250	34,306	6,944	20 %
Income before income taxes	5,903	15,087	(9,184)	-61 %
Provision for income taxes	1,228	3,588	(2,360)	-66 %
Net Income	4,675	11,499	(6,824)	-59 %
Earnings per share - basic	$ 0.96	$ 2.38	$ (1.43)	-60 %
Earnings per share - diluted	$ 0.96	$ 2.34	$ (1.38)	-59 %