Entering Cycle with Strong Balance Sheet Position
NASHVILLE, April 27, 2020 (GLOBE NEWSWIRE) — CapStar Financial Holdings, Inc. (“CapStar”) (NASDAQ:CSTR) reported first quarter net income of $1.3 million, pre-tax pre-provision income of $8.3 million, and increased its allowance for loan losses $7.5 million based on an initial assessment of the range of potential impacts from the COVID-19 pandemic to its loan portfolio. As a result, CapStar’s allowance for loan losses to total loans increased during the quarter from 0.89 percent to 1.39 percent at March 31, 2020. Fully diluted earnings per share were $0.07, compared to $0.25 from a year ago. Excluding merger-related and other charges, operating⁽¹⁾ earnings per share were $0.08.“I am pleased with the quality and improvement in our first quarter pre-tax pre-provision earnings, given how challenging the industry’s outlook was for 2020,” said Timothy K. Schools, CapStar’s president and chief executive officer. “Mid-quarter, our attention quickly and unexpectedly pivoted to addressing the impacts of COVID-19. I could not be prouder of what our teammates have accomplished working together to support each other, clients, and communities. It is unimaginable that over the last forty-five days we mobilized 100% of our non-branch employees to work from home, served our clients solely through online banking and drive thru locations, and responded and processed approximately 1,700 applications for the Small Business Administration’s Paycheck Protection Program.”“Importantly, our leadership team proactively enacted well thought out pandemic procedures,” Schools continued. “Forward thinking in technology investments, liquidity planning, credit administration, and capital planning positions us well as we enter the current cycle. We believe in and are excited about our communities and look forward to continuing to be a leader as we all work together to navigate this environment. While we will face uncertain challenges in the near-term and loan losses are likely, we are cautiously optimistic with the initial assessment of our credit risk.”Soundness
Annualized net charge-offs to average loans were 0.01% for the three months ended March 31, 2020 compared to 0.01% for the same period in 2019.Non-performing assets to total loans and OREO were 0.26% at March 31, 2020 compared to 0.19% at March 31, 2019.The leverage ratio was 11.19% at March 31, 2020 compared to 10.97% at March 31, 2019.The total risk based capital ratio was 13.64% at March 31, 2020 compared to 12.64% at March 31, 2019.                                             Profitability
Net interest margin for the three months ended March 31, 2020 was 3.50% compared to 3.75% for the same period in 2019.The operating efficiency ratio for the three months ended March 31, 2020 was 61.78% compared to 65.01% for the same period in 2019.Operating annualized pre-tax pre-provision income to average assets for the three months ended March 31, 2020 was 1.68% compared to 1.55% for the same period in 2019.Operating annualized return on average assets for the three months ended March 31, 2020 was 0.30% compared to 1.06% for the same period in 2019.Operating annualized return on average tangible equity for the three months ended March 31, 2020 was 2.68% compared to 10.02% for the same period in 2019.Growth
Average deposits for the quarter ended March 31, 2020 increased 9.3% to $1.74 billion, compared to $1.59 billion for the same period in 2019.Average gross loans for the quarter ended March 31, 2020 fell 2.8% to $1.42 billion, compared to $1.46 billion for the same period in 2019.Pre-tax pre-provision earnings for the quarter ended March 31, 2020 increased 18.7% to $8.3 million, compared to $7.0 million for the quarter ended March 31, 2019.Tangible book value per share for the quarter ended March 31, 2020 increased 9.6% to $12.66, compared to $11.55 for the quarter ended March 31, 2019.DividendAs previously announced on April 22, 2020, the board of directors of CapStar approved a quarterly dividend of $0.05 per common share that will be paid on May 29, 2020 to shareholders of record of CapStar’s common stock as of the close of business on May 15, 2020.Conference Call and Webcast InformationCapStar will host a conference call and webcast at 8:30 a.m. Central Time on Tuesday, April 28, 2020. During the call, management will review the first quarter results and operational highlights. Interested parties may listen to the call by dialing (844) 412-1002. The conference ID number is 2681305. 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 March 31, 2020, on a consolidated basis, CapStar had total assets of $2.07 billion, gross loans of $1.45 billion, total deposits of $1.76 billion, and shareholders’ equity of $275.8 million. Visit www.capstarbank.com for more information.FORWARD-LOOKING STATEMENTSThis release contains forward-looking statements, as defined by federal securities laws, including statements about CapStar Financial Holdings, Inc. (“CapStar”) and its financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of our operations and future financial performance. Our operations and such performance involves risks and uncertainties, including but in no way limited to the effect of the COVID-19 pandemic, that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to CapStar’s filings with the Securities and Exchange Commission, including its 2019 Annual Report on Form 10-K under the sections entitled “Forward-Looking Statements” and “Item 1A Risk Factors.”  Forward-looking statements speak only as of the date they are made, and except as otherwise required by applicable law, we undertake no obligation to update or revise forward-looking statements.NON-GAAP MEASURESThis release includes financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations. Such measures include: “Efficiency ratio – operating,” “Expenses – operating,” “Earnings per share – operating,” “Diluted earnings per share – operating,” “Tangible book value per share,” “Return on common equity – operating,” “Return on tangible common equity – operating,” “Return on assets – operating,” and “Tangible common equity to tangible assets.”Management has included these non-GAAP measures because it believes these measures may provide useful supplemental information for evaluating CapStar’s underlying performance trends. Further, management uses these measures in managing and evaluating CapStar’s business and intends to refer to them in discussions about our operations and performance. Operating performance measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in the ‘Non-GAAP Reconciliation Tables’ included in the exhibits to this presentation.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)
First Quarter 2020 Earnings ReleaseThis 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)
First Quarter 2020 Earnings Release_____________________
*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)
First Quarter 2020 Earnings Release_____________________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)
First Quarter 2020 Earnings Release                                               Average loan balances include nonaccrual loans.  Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.Taxable investment securities include restricted equity securities.Yields on tax exempt securities, total securities, and total interest-earning assets are shown on a tax equivalent basis.Net interest spread is the average yield on total average interest-earning assets minus the average rate on total average interest-bearing liabilities.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)
First Quarter 2020 Earnings Release 

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