Earnings wrap: CapStar, Avenue

Tucker-led bank's assets top $1B; Samuels and team post making hay with CRE loans

The most prominent young banks in Nashville continued their fast growth in the fourth quarter, albeit not as profitably as earlier in 2012. Both CapStar Bank and Avenue Bank saw their bottom lines shrink from Q3 mainly because of higher loan loss provision.

The end of 2012 came with a notable milestone for CapStar, which opened its doors in July of 2008 and last summer acquired American Security Bank & Trust in Sumner County. The downtown-based bank finished the year by topping $1 billion in assets for the first time, adding $53 million in loans and more than $100 million in assets during the fourth quarter alone.

"This is a notable milestone to reach six months prior to our fifth anniversary," CapStar President and CEO Claire Tucker said in a statement. "The reception of the Nashville market to a local bank organized to serve small to mid-size businesses and their employees has been gratifying."

Profits during the quarter came in at $345,000 compared to an average of $1.2 million in the previous two quarters. That was due primarily to a loan loss provision of almost $2.6 million, almost double the total the bank had recorded through the first nine months of 2012. Chargeoffs also rose during the quarter.

Check out CapStar's Q4 call report, which features full-year numbers, here.

At Avenue, fourth-quarter growth was most evident in the loan book, which rose to $449 million from $406 million. In a note to NashvillePost.com, President and COO Kent Cleaver said a good bit of that growth came from commercial real estate lending. Compared to 2011, six-year-old Avenue grew its loan portfolio by 16 percent and its deposit base by 22 percent.

But a larger loan loss provision of about $550,000 also took a bite out of the quarter's profits, which came in at $495,000. During the first three quarters of 2012, Avenue's net income had averaged $745,000.

"Naturally, loan loss provision goes hand-in-hand with growth," Cleaver said. "We feel that we are appropriately reserved based on the economy and current market conditions. We are excited about the opportunities and potential of the Middle Tennessee market area, and are going into 2013 with strong momentum."

View Avenue's Q4 call report here.