Spirit of Texas Bancshares (STXB) 8-K Results of Operations and Financial Condition

Exhibit 99.1

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

SPIRIT OF TEXAS BANCSHARES, INC. REPORTS

FIRST QUARTER 2021 FINANCIAL RESULTS

CONROE, TX – April 21, 2021 – Spirit of Texas Bancshares, Inc. (NASDAQ: STXB) (“Spirit,” the “Company,” “we,” “our,” or “us”), reported net income of $10.1 million in the first quarter of 2021, representing diluted earnings per share of $0.58, compared to net income of $4.1 million in the first quarter of 2020, representing diluted earnings per share of $0.22. Strong financial results for the first quarter of 2021 were assisted by $1.8 million net accretion of origination fees on Paycheck Protection Program (“PPP”) loans, and $2.2 million of deferred costs on newly originated PPP loans.

First Quarter 2021 Financial and Operational Highlights

• Originated 1,301 PPP loans during the first quarter of 2021 with a total funded amount of $148.9 million and deferred loan fees, net of $4.8 million which will be recognized over the life of the loans.

• Net interest margin for the first quarter of 2021 as reported and on a tax equivalent basis⁽¹⁾ was 3.94% and 3.98%, respectively.

• At March 31, 2021, return on average assets was 1.32% annualized.

• Book value per share increased to $21.34 at March 31, 2021 and tangible book value per share⁽¹⁾ increased to $16.40 at the same date.

• At March 31, 2021, total stockholders’ equity to total assets was 11.54% and tangible stockholders’ equity to tangible assets⁽¹⁾ was 9.11%.

Dean Bass, Spirit’s Chairman and Chief Executive Officer, stated, “We continue to have success assisting our borrowers obtain funding through government stimulus programs. I am delighted that our customers have placed their faith in our talented group of bankers to help navigate these government programs and obtain critical funding to keep businesses and projects operating. Our strong results for the first quarter of 2021 were also due to cost cutting initiatives that were implemented towards the end of 2020 and have begun to positively impact our financial results. We will continuously look for new, exciting investments and expense saving directives to provide for earnings growth in the coming quarters.

“Asset quality has returned to pre-pandemic levels and we believe that quarters with significantly elevated provision expense are behind us. We will continue to work with the borrowers who need additional assistance due to the ongoing COVID-19 pandemic; however, ultimately we believe that the elevated risk factors appear to be behind us and we can now focus on new growth opportunities,” Mr. Bass concluded.

Loan Portfolio and Composition

During the first quarter of 2021, gross loans increased to $2.43 billion as of March 31, 2021, an increase of 1.7% from $2.39 billion as of December 31, 2020, and an increase of 20.7% from $2.0 billion as of March 31, 2020. During the first quarter of 2021, $60.3 million of the PPP loans we originated during 2020 were forgiven by the U.S. Small Business Administration (“SBA”) and we originated $148.9 million of new PPP loans. Excluding the effect of PPP loan forgiveness and origination, the loan portfolio as of March 31, 2021 declined by $43.6 million, or 7.4% annualized from December 31, 2020. During the first quarter of 2021, we sold $45.2 million of participations out of our commercial real estate portfolio in order to improve concentration percentages. The loan pipeline remains strong to fuel future growth in the portfolio and we anticipate higher loan growth in the second and third quarters of 2021.

Asset Quality

Asset quality remained strong in the first quarter of 2021. Overall, our borrowers continue to recover from the effects of the ongoing COVID-19 pandemic as additional pandemic-related restrictions have been lifted, a meaningful percent of the population in Texas has now been vaccinated, and consumers have received an additional stimulus payment. The provision for loan losses recorded for the first quarter of 2021 was $1.1 million, which served to increase the allowance to $16.3 million, or 0.67% of the $2.43 billion in gross loans outstanding as of March 31, 2021. Provision expense for the first quarter of 2021 related primarily to newly impaired loans.

Nonperforming loans to loans held for investment ratio continues to remain low as of March 31, 2021 at 0.41%, which increased from 0.36% at December 31, 2020, and 0.38% as of March 31, 2020. Annualized net charge-offs were 14 basis points for the first quarter of 2021 compared to 9 basis points for the fourth quarter of 2020.

Borrowers in active deferral periods has declined significantly, with 97% of loans previously on deferment exiting the deferral period and resuming regularly scheduled payments. At March 31, 2021, only $11.6 million of loans remain on deferral.

Deposits and Borrowings

Deposits totaled $2.60 billion as of March 31, 2021, an increase of 5.6% from $2.46 billion as of December 31, 2020, and an increase of 25.0% from $2.08 billion as of March 31, 2020. Noninterest-bearing demand deposits increased $72.7 million, or 10.0%, from December 31, 2020, and increased $313.2 million, or 64.3%, from March 31, 2020. The increase in noninterest-bearing deposits is primarily deposit accounts related to PPP loan funding. Noninterest-bearing demand deposits represented 30.8% of total deposits as of March 31, 2021, up from 29.6% of total deposits as of December 31, 2020, and up from 23.4% of total deposits as of March 31, 2020. Savings and Money Market deposits increased $43.4 million or 7.1%, from December 31, 2020 primarily due to the seasonality of public funds. The average cost of deposits was 0.38% for the first quarter of 2021, representing an 8 basis point decrease from the fourth quarter of 2020 and a 54 basis point decrease from the first quarter of 2020. The decrease in average cost of deposits was due primarily to the repricing of certificates of deposit during the first quarter of 2021.

Borrowings decreased by $61.0 million during the first quarter of 2021 to $191.7 million due primarily to repayment of advances under the Paycheck Protection Program Liquidity Facility with the Board of Governors of the Federal Reserve System. Borrowings totaled 6.1% of total assets at March 31, 2021, compared to 8.2% at December 31, 2020 and 4.5% at March 31, 2020.

Net Interest Margin and Net Interest Income

The net interest margin for the first quarter of 2021 was 3.94%, a decrease of 42 basis points from the fourth quarter of 2020 and a decrease of 44 basis points from the first quarter of 2020. The tax equivalent net interest margin⁽¹⁾ for the first quarter of 2021 was 3.98%, a decrease of 46 basis points from the fourth quarter of 2020 and 42 basis points from the first quarter of 2020. Excluding the impact of PPP loans, the tax equivalent net interest margin for the first quarter of 2021 was 4.02% compared to 4.21% for the fourth quarter of 2020. The decrease in net interest margin and tax equivalent net interest margin compared to prior year and prior quarter is primarily due to the origination of additional PPP loans which yield 1% and lower levels of forgiveness than those experienced in the fourth quarter of 2020. Approximately $6.7 million of net deferred fees remain unamortized at March 31, 2021. During the first quarter of 2021, we moved approximately $200 million of cash into higher yielding securities which should help to improve the net interest margin during the second quarter of 2021. The yield on loans for the first quarter of 2021 was 5.09% compared to 5.42% at December 31, 2020. Excluding the impact of PPP loans, the yield on loans for the first quarter of 2021 was 5.29% compared to 5.30% at December 31, 2020.

Net interest income totaled $27.8 million for the first quarter of 2021, an increase of 17.0% from $23.8 million for the first quarter of 2020. Interest income totaled $31.2 million for the first quarter of 2021, an increase of 8.2% from $28.8 million for the first quarter of 2020. Interest and fees on loans decreased $2.9 million, or 8.8%, compared to the fourth quarter of 2020, and increased by $2.4 million, or 8.8%, from the first quarter of 2020. Interest expense was $3.3 million for the first quarter of 2021, a decrease of 12.9% from $3.8 million for the fourth quarter of 2020 and a decrease of 33.6% from $5.0 million for the first quarter of 2020.

Noninterest Income and Noninterest Expense

Noninterest income totaled $2.6 million for the first quarter of 2021, compared to $8.8 million for the fourth quarter of 2020. This decrease was primarily driven by declines in gain on sale of SBA loans, service charges and fees, and mortgage referral fees of $264 thousand, $120 thousand, and $73 thousand, respectively, partially offset by an increase in SBA servicing fees of $17 thousand. Gain on sale of loans originated through the Main Street Lending Program (the “Main Street Loans”) in the fourth quarter of 2020 of $3.6 million was also nonrecurring given that the program ended during the early first quarter of 2021. Additionally, swap fees were $121 thousand for the first quarter of 2021, compared to $2.4 million for the fourth quarter of 2020.

Noninterest expense totaled $16.6 million in the first quarter of 2021, a decrease of 9.7 % from $18.4 million in the fourth quarter of 2020, primarily due to a decrease in salaries and benefits. The decrease in salaries and benefits was primarily due to deferred costs on PPP loan origination of $2.2 million.

The efficiency ratio was 54.6% in the first quarter of 2021, compared to 47.7% in the fourth quarter of 2020, and 79.1% in the first quarter of 2020. The first quarter of 2021 efficiency ratio was assisted by PPP origination fees immediately recognized at the time of forgiveness by the SBA, and the deferral of salary costs associated with newly originated PPP loans.

(1) Tax Equivalent Net Interest Margin, Tangible Book Value Per Share, Tangible Stockholders’ Equity to Tangible Assets Ratio and certain PPP-related figures are all non-GAAP measures. 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. Furthermore, Spirit believes that the PPP-related figures are important to investors due to the anticipated short-term nature of the PPP loans and the expected forgiveness in the coming quarters. The non-GAAP financial measures that we discuss in this earnings 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 discussed in this earnings 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 earnings release when comparing such non-GAAP financial measures. Please see a reconciliation to the nearest respective GAAP measures at the end of this earnings release.

Conference Call

Spirit of Texas Bancshares, Inc. has scheduled a conference call to discuss its first quarter 2021 results, which will be broadcast live over the Internet, on Thursday, April 22, 2021 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 https://ir.sotb.com/news-events/ir-calendar. For those who cannot listen to the live call, a replay will be available through April 29, 2021, and may be accessed by dialing 201-612-7415 and using pass code 13718707#. Also, an archive of the webcast will be available shortly after the call at https://ir.sotb.com/news-events/ir-calendar for 90 days.

About Spirit of Texas Bancshares, Inc.

Spirit, through its wholly-owned subsidiary, Spirit of Texas Bank SSB (the “Bank”), provides a wide range of relationship-driven commercial banking products and services tailored to meet the needs of businesses, professionals and individuals. The Bank has 38 locations in the Houston, Dallas/Fort Worth, Bryan/College Station, Austin, San Antonio-New Braunfels, Corpus Christi, Austin and Tyler metropolitan areas, along with offices in North Central and South 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. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Factors that could cause our actual results to differ materially from those described in the forward-looking statements include, among others: (i) changes in

general business, industry or economic conditions, or competition; (ii) the impact of the ongoing COVID-19 pandemic on the Bank’s business, including the impact of actions taken by governmental and regulatory authorities in response to such pandemic, such as the Coronavirus Aid, Relief, and Economic Security Act and the programs established thereunder, and the Bank’s participation in such programs, (iii) changes in any applicable law, rule, regulation, policy, guideline, or practice governing or affecting bank holding companies and their subsidiaries or with respect to tax or accounting principles or otherwise; (iv) adverse changes or conditions in capital and financial markets; (v) changes in interest rates; (vi) higher-than-expected costs or other difficulties related to integration of combined or merged businesses; (vii) the inability to realize expected cost savings or achieve other anticipated benefits in connection with business combinations and other acquisitions; (viii) changes in the quality or composition of our loan and investment portfolios; (ix) adequacy of loan loss reserves; (x) increased competition; (xi) loss of certain key officers; (xii) continued relationships with major customers; (xiii) deposit attrition; (xiv) rapidly changing technology; (xv) unanticipated regulatory or judicial proceedings and liabilities and other costs; (xvi) changes in the cost of funds, demand for loan products, or demand for financial services; (xvii) other economic, competitive, governmental, or technological factors affecting our operations, markets, products, services, and prices; and (xviii) our success at managing the foregoing items. For a discussion of additional factors that could cause our actual results to differ materially from those described in the forward-looking statements, please see the risk factors discussed in our most recent Annual Report on Form 10-K for the year ended December 31, 2020, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 5, 2021, and our 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.

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Income

(Unaudited)

	For the Three Months Ended
	March 31, 2021			December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2020
				(Dollars in thousands, except per share data)
Interest income:
Interest and fees on loans	$	29,829		$	32,682	$	29,901	$	29,912	$	27,409	$	32,682
Interest and dividends on investment securities		1,115			914		465		457		504		914
Other interest income		225			101		115		185		900		101
Total interest income		31,169			33,697		30,481		30,554		28,813		33,697
Interest expense:
Interest on deposits		2,327			2,726		3,392		3,945		4,507		2,726
Interest on FHLB advances and other borrowings		1,003			1,099		875		558		508		1,099
Total interest expense		3,330			3,825		4,267		4,503		5,015		3,825
Net interest income		27,839			29,872		26,214		26,051		23,798		29,872
Provision for loan losses		1,086			4,417		2,831		2,838		1,171		4,417
Net interest income after provision for loan losses		26,753			25,455		23,383		23,213		22,627		25,455
Noninterest income:
Service charges and fees		1,434			1,554		1,525		1,270		1,311		1,554
SBA loan servicing fees, net		324			307		619		256		10		307
Mortgage referral fees		274			347		428		357		202		347
Gain on sales of loans, net		155			419		612		326		464		419
Gain (loss) on sales of investment securities		5			—		1,031		—		—		—
Other noninterest income		427			6,153		604		356		725		6,153
Total noninterest income		2,619			8,780		4,819		2,565		2,712		8,780
Noninterest expense:
Salaries and employee benefits		9,220			10,656		11,365		7,946		11,789		10,656
Occupancy and equipment expenses		2,662			2,749		2,222		2,761		2,315		2,749
Professional services		524			521		555		716		895		521
Data processing and network		1,229			1,379		1,002		849		743		1,379
Regulatory assessments and insurance		535			549		517		379		402		549
Amortization of intangibles		823			879		919		919		946		879
Advertising		78			74		333		119		153		74
Marketing		93			60		18		38		160		60
Telephone expense		499			560		563		483		407		560
Conversion expense		—			16		279		69		1,477		16
Other operating expenses		971			984		1,520		1,825		1,673		984
Total noninterest expense		16,634			18,427		19,293		16,104		20,960		18,427
Income before income tax expense		12,738			15,808		8,909		9,674		4,379		15,808
Income tax expense		2,652			3,353		1,821		1,980		305		3,353
Net income	$	10,086		$	12,455	$	7,088	$	7,694	$	4,074	$	12,455
Normalized Adjustments:
Gain on sale of securities	$	(4	)	$	—	$	1,031	$	—	$	—	$	—
Merger related expenses, net		0			19		270		1,283		55		19.00
Adjusted net income		10,082			12,455		6,783		8,977		3,554		12,474
Earnings per common share:
Basic	$	0.59		$	0.73	$	0.41	$	0.44	$	0.22	$	0.73
Diluted		0.58			0.72		0.41		0.44		0.22		0.72
Adjusted Basic		0.59			0.73		0.26		0.44		0.26		0.73
Adjusted Diluted		0.58			0.72		0.26		0.44		0.26		0.72
Weighted average common shares outstanding:
Basic		17,103,981			17,168,091		17,340,898		17,581,959		15,370,480		17,168,091
Diluted		17,518,029			17,336,484		17,383,427		17,612,919		15,771,249		17,336,484

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Consolidated Balance Sheets

(Unaudited)

	March 31, 2021			December 31, 2020			As of September 30, 2020			June 30, 2020			March 31, 2020
	(Dollars in thousands)
Assets:
Cash and due from banks	$	28,879		$	31,396		$	29,345		$	35,248		$	33,946
Interest-bearing deposits in other banks		40,687			231,638			121,739			200,096			193,707
Total cash and cash equivalents		69,566			263,034			151,084			235,344			227,653
Time deposits in other banks		—			—			—			—			245
Investment securities:
Available for sale securities, at fair value		442,576			212,420			119,814			90,878			94,963
Equity investments, at fair value		23,741			24,000			—			—			—
Total investment securities		466,317			236,420			119,814			90,878			94,963
Loans held for sale		1,192			1,470			4,287			7,718			7,765
Loans:
Loans held for investment		2,430,594			2,388,532			2,452,353			2,427,292			2,013,367
Less: allowance for loan and lease losses		(16,314	)		(16,026	)		(12,207	)		(9,905	)		(7,620	)
Loans, net		2,414,280			2,372,506			2,440,146			2,417,387			2,005,747
Premises and equipment, net		81,379			83,348			82,734			79,156			78,594
Accrued interest receivable		10,588			11,199			11,612			12,188			7,314
Other real estate owned and repossessed assets		—			133			302			3,743			3,731
Goodwill		77,681			77,681			77,681			77,966			79,009
Core deposit intangible		6,995			7,818			8,698			9,617			10,536
SBA servicing asset		2,821			2,953			3,051			3,115			3,055
Deferred tax asset, net		2,213			1,085			494			—			—
Bank-owned life insurance		16,057			15,969			15,878			15,787			15,699
Federal Home Loan Bank and other bank stock, at cost		5,727			5,718			5,709			5,696			5,660
Right of use assets		6,058			—			—			—			—
Other assets		9,338			5,425			3,580			4,423			4,526
Total assets	$	3,170,212		$	3,084,759		$	2,925,070		$	2,963,018		$	2,544,497
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Transaction accounts:
Noninterest-bearing	$	800,233		$	727,543		$	667,199		$	745,646		$	487,060
Interest-bearing		1,149,781			1,092,934			940,930			946,969			878,279
Total transaction accounts		1,950,014			1,820,477			1,608,129			1,692,615			1,365,339
Time deposits		647,536			638,658			679,387			722,376			711,968
Total deposits		2,597,550			2,459,135			2,287,516			2,414,991			2,077,307
Accrued interest payable		1,160			1,303			1,321			1,025			1,218
Short-term borrowings		—			10,000			10,000			104,830			10,000
Long-term borrowings		191,687			242,020			267,746			88,246			103,276
Deferred tax liability, net		—			—			—			405			1,706
Operating lease liability		6,231			—			—			—			—
Other liabilities		7,827			11,522			6,966			5,943			5,173
Total liabilities		2,804,455			2,723,980			2,573,549			2,615,440			2,198,680
Stockholders’ Equity:
Common stock		300,591			298,850			298,509			298,176			297,966
Retained earnings		85,246			76,683			65,783			59,907			52,213
Accumulated other comprehensive income (loss)		(3,225	)		1,005			(237	)		1,272			732
Treasury stock		(16,855	)		(15,759	)		(12,534	)		(11,777	)		(5,094	)
Total stockholders’ equity		365,757			360,779			351,521			347,578			345,817
Total liabilities and stockholders’ equity	$	3,170,212		$	3,084,759		$	2,925,070		$	2,963,018		$	2,544,497

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Loan Composition

(Unaudited)

	As of
	March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020
	(Dollars in thousands)
Loans:
Commercial and industrial loans (1)(2)	$	699,896	$	574,986	$	690,009	$	717,280	$	320,418
Real estate:
1-4 single family residential loans		348,908		364,139		373,220		372,445		382,900
Construction, land and development loans		344,557		415,488		402,476		390,068		405,661
Commercial real estate loans (including multifamily)		964,342		956,743		906,134		843,247		821,952
Consumer loans and leases		9,619		11,738		12,977		19,159		22,398
Municipal and other loans		63,272		65,438		67,537		85,092		60,038
Total loans held in portfolio	$	2,430,594	$	2,388,532	$	2,452,353	$	2,427,292	$	2,013,367

(1) Balance includes $67.4 million, $70.8 million, $72.7 million, $75.1 million, and $75.3 million of the unguaranteed portion of SBA loans as of March 31, 2021 December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, respectively.

(2) Balance includes $366.5 million, $276.1 million, $421.1 million, and $384.6 million of PPP loans as of March 31, 2021, December 31, 2020, September 30, 2020, and June 30, 2020, respectively.

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Deposit Composition

(Unaudited)

	As of
	March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020
	(Dollars in thousands)
Deposits:
Noninterest-bearing demand deposits	$	800,233	$	727,543	$	667,199	$	745,646	$	487,060
Interest-bearing demand deposits		485,863		472,075		391,396		360,282		334,302
Interest-bearing NOW accounts		9,904		10,288		8,655		31,132		28,376
Savings and money market accounts		654,014		610,571		540,879		555,555		515,601
Time deposits		647,536		638,658		679,387		722,376		711,968
Total deposits	$	2,597,550	$	2,459,135	$	2,287,516	$	2,414,991	$	2,077,307

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Average Balances and Yields

(Unaudited)

	Three Months Ended
	March 31, 2021							March 31, 2020
	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	$	150,583	$	76		0.20	%	$	231,616	$	852		1.48	%
Loans, including loans held for sale (2)		2,376,657		29,829		5.09	%		1,851,879		27,409		5.94	%
Investment securities and other		339,859		1,264		1.51	%		96,006		552		2.31	%
Total interest-earning assets		2,867,099		31,169		4.41	%		2,179,501		28,813		5.30	%
Noninterest-earning assets		234,544							217,060
Total assets	$	3,101,643						$	2,396,561
Interest-bearing liabilities:
Interest-bearing demand deposits	$	469,287	$	155		0.13	%	$	335,669	$	225		0.27	%
Interest-bearing NOW accounts		10,232		1		0.04	%		27,632		26		0.38	%
Savings and money market accounts		634,828		657		0.42	%		443,449		1,012		0.92	%
Time deposits		643,906		1,514		0.95	%		685,689		3,244		1.90	%
FHLB advances and other borrowings		213,483		1,003		1.91	%		86,809		508		2.35	%
Total interest-bearing liabilities		1,971,736		3,330		0.68	%		1,579,248		5,015		1.27	%
Noninterest-bearing liabilities and shareholders’ equity:
Noninterest-bearing demand deposits		748,785							459,156
Other liabilities		19,072							12,265
Stockholders’ equity		362,050							345,892
Total liabilities and stockholders’ equity	$	3,101,643						$	2,396,561
Net interest rate spread						3.72	%						4.03	%
Net interest income and margin			$	27,839		3.94	%			$	23,798		4.38	%
Net interest income and margin (tax equivalent)(3)			$	28,168		3.98	%			$	23,890		4.40	%

(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 March 31, 2021 and December 31, 2020, respectively.

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

Average Balances and Yields

(Unaudited)

	Three Months Ended
	March 31, 2021							December 31, 2020
	Average Balance (1)		Interest/ Expense		Annualized Yield/Rate			Average Balance (1)		Interest/ Expense		Annualized Yield/Rate
	(Dollars in thousands)							(Dollars in thousands)
Interest-earning assets:
Interest-earning deposits in other banks	$	150,583	$	76		0.20	%	$	144,349	$	101		0.28	%
Loans, including loans held for sale (2)		2,376,657		29,829		5.09	%		2,394,431		32,682		5.42	%
Investment securities and other		339,859		1,264		1.51	%		177,816		914		2.04	%
Total interest-earning assets		2,867,099		31,169		4.41	%		2,716,596		33,697		4.92	%
Noninterest-earning assets		234,544							274,170
Total assets	$	3,101,643						$	2,990,766
Interest-bearing liabilities:
Interest-bearing demand deposits	$	469,287	$	155		0.13	%	$	413,956	$	156		0.15	%
Interest-bearing NOW accounts		10,232		1		0.04	%		9,510		2		0.08	%
Savings and money market accounts		634,828		657		0.42	%		580,216		648		0.44	%
Time deposits		643,906		1,514		0.95	%		657,726		1,920		1.16	%
FHLB advances and other borrowings		213,483		1,003		1.91	%		263,486		1,099		1.65	%
Total interest-bearing liabilities		1,971,736		3,330		0.68	%		1,924,894		3,825		0.79	%
Noninterest-bearing liabilities and shareholders’ equity:
Noninterest-bearing demand deposits		748,785							702,250
Other liabilities		19,072							7,722
Stockholders’ equity		362,050							355,900
Total liabilities and stockholders’ equity	$	3,101,643						$	2,990,766
Net interest rate spread						3.72	%						4.13	%
Net interest income and margin			$	27,839		3.94	%			$	29,872		4.36	%
Net interest income and margin (tax equivalent)(3)			$	28,168		3.98	%			$	30,384		4.44	%

(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 March 31, 2021 and December 31, 2020, 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
	March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020
	(Dollars in thousands, except per share data)
Basic and diluted earnings per share - GAAP basis:
Net income available to common stockholders	$	10,086		$	12,455		$	7,088		$	7,694		$	4,074
Weighted average number of common shares - basic		17,103,981			17,168,091			17,340,898			17,581,959			18,184,110
Weighted average number of common shares - diluted		17,518,029			17,336,484			17,383,427			17,612,919			18,441,977
Basic earnings per common share	$	0.59		$	0.73		$	0.41		$	0.44		$	0.22
Diluted earnings per common share	$	0.58		$	0.72		$	0.41		$	0.44		$	0.22
Basic and diluted earnings per share - Non-GAAP basis:
Net income	$	10,086		$	12,455		$	7,088		$	7,694		$	4,074
Pre-tax adjustments:
Noninterest income
Gain on sale of investment securities		(5	)		—			(1,031	)		—			—
Noninterest expense
Merger related expenses		—			24			342			69			1,614
Taxes:
NOL Carryback		—									—			(575	)
Tax effect of adjustments		1			(5	)		145			(14	)		(331	)
Adjusted net income	$	10,082		$	12,474		$	6,544		$	7,749		$	4,782
Weighted average number of common shares - basic		17,103,981			17,168,091			17,340,898			17,581,959			18,184,110
Weighted average number of common shares - diluted		17,518,029			17,336,484			17,383,427			17,612,919			18,441,977
Basic earnings per common share - Non-GAAP basis	$	0.59		$	0.73		$	0.38		$	0.44		$	0.26
Diluted earnings per common share - Non-GAAP basis	$	0.58		$	0.72		$	0.38		$	0.44		$	0.26

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
	March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020
	(Dollars in thousands, except per share data)
Net interest margin - GAAP basis:
Net interest income	$	27,839		$	29,872		$	26,214		$	26,051		$	23,798
Average interst-earning assets		2,867,099			2,716,596			2,664,355			2,646,903			2,179,501
Net interest margin		3.94	%		4.36	%		3.90	%		3.95	%		4.38	%
Net interest margin - Non-GAAP basis:
Net interest income	$	27,839		$	29,872		$	26,214		$	26,051		$	23,798
Plus:
Impact of fully taxable equivalent adjustment		329			512			446			373			92
Net interest income on a fully taxable equivalent basis	$	28,168		$	30,384		$	26,660		$	26,424		$	23,890
Average interst-earning assets	$	2,867,099		$	2,716,596		$	2,664,355		$	2,646,903		$	2,179,501
Net interest margin on a fully taxable equivalent basis - Non-GAAP basis		3.98	%		4.44	%		3.97	%		4.00	%		4.40	%

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

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

(Unaudited)

	As of
	March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020
	(Dollars in thousands, except per share data)
Total stockholders’ equity	$	365,757	$	360,779	$	351,521	$	347,578	$	345,817
Less:
Goodwill and other intangible assets		84,676		85,499		86,379		87,583		89,595
Tangible stockholders’ equity	$	281,081	$	275,280	$	265,142	$	259,995	$	256,272
Shares outstanding		17,136,553		17,081,831		17,316,313		17,368,573		17,969,012
Book value per share	$	21.34	$	21.12	$	20.30	$	20.01	$	19.25
Less:
Goodwill and other intangible assets per share		4.94		5.01		4.99		5.04		4.99
Tangible book value per share	$	16.40	$	16.11	$	15.31	$	14.97	$	14.26

SPIRIT OF TEXAS BANCSHARES, INC. AND SUBSIDIARY

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

(Unaudited)

	As of
	March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020
	(Dollars in thousands)
Total stockholders’ equity to total assets - GAAP basis:
Total stockholders’ equity (numerator)	$	365,757		$	360,779		$	351,521		$	347,578		$	345,817
Total assets (denominator)		3,170,212			3,084,759			2,925,070			2,963,018			2,544,497
Total stockholders’ equity to total assets		11.54	%		11.70	%		12.02	%		11.73	%		13.59	%
Tangible equity to tangible assets - Non-GAAP basis:
Tangible equity:
Total stockholders’ equity	$	365,757		$	360,779		$	351,521		$	347,578		$	345,817
Less:
Goodwill and other intangible assets		84,676			85,499			86,379			87,583			89,545
Total tangible common equity (numerator)	$	281,081		$	275,280		$	265,142		$	259,995		$	256,272
Tangible assets:
Total assets	$	3,170,212		$	3,084,759		$	2,925,070		$	2,963,018		$	2,544,497
Less:
Goodwill and other intangible assets		84,676			85,499			86,379			87,583			89,545
Total tangible assets (denominator)	$	3,085,536		$	2,999,260		$	2,838,691		$	2,875,435		$	2,454,952
Tangible equity to tangible assets		9.11	%		9.18	%		9.34	%		9.04	%		10.44	%