Press Release

Texas Capital Bancshares Announces Operating Results for Q3 2010

Company Release - 10/20/2010 4:02 PM ET

DALLAS--(BUSINESS WIRE)-- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the third quarter of 2010.

  • Net income increased 17% on a linked quarter basis and increased 78% from Q3 2009
  • EPS increased 14% on a linked quarter basis and increased 67% for the third quarter of 2010 as compared to the same quarter of 2009
  • Demand deposits grew 7% and total deposits increased 10% on a linked quarter basis and grew 49% and 38%, respectively, from Q3 2009
  • Loans held for investment remained consistent on a linked quarter basis and total loans increased 8% on a linked quarter basis; grew 4% and 22%, respectively, from Q3 2009

"We are pleased to report another good quarter demonstrating strong growth in net revenue, earnings, loans and deposits,” said George Jones, CEO. “Net income of $9.5 million for the quarter is a record for Texas Capital, and achieving that result in a most-challenging economic environment for the banking industry is especially gratifying. The ability to produce good results under difficult conditions affirms our belief that our business model can produce the right combination of growth and returns for our shareholders.”

FINANCIAL SUMMARY

     

(dollars and shares in thousands)

Q3 2010 Q3 2009 % Change
QUARTERLY OPERATING RESULTS(1)
Net Income $ 9,531 $ 5,353 78 %
Diluted EPS $ .25 $ .15 67 %

ROA

.62 % .40 %
ROE 7.23 % 4.46 %
Diluted Shares 37,445 36,304
 
BALANCE SHEET(1)
Total Assets $ 6,344,916 $ 5,320,401 19 %

Demand Deposits

1,195,093 802,692 49 %
Total Deposits 5,407,033 3,916,568 38 %
Loans Held for Investment 4,483,204 4,290,453 4 %
Total Loans 5,882,412 4,840,240 22 %
Stockholders’ Equity 515,618 474,044 9 %

(1) Operating results, assets and loans are reporting from continuing operations

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income from continuing operations of $9.5 million for the quarter ended September 30, 2010, compared to $5.4 million for the third quarter of 2009. On a fully diluted basis, earnings per common share from continuing operations were $.25 for the three months ended September 30, 2010 compared to $.15 for the same period last year. The discussion below relates only to continuing operations.

Return on average equity was 7.23 percent and return on average assets was .62 percent for the third quarter of 2010, compared to 4.46 percent and .40 percent, respectively, for the third quarter of 2009.

The net interest margin in the third quarter of 2010 was 4.27 percent, a 21 basis point increase from the third quarter of 2009 and a 5 basis point decrease from the second quarter of 2010. The year over year increase is due to the significant reduction in funding costs and our ability to maintain and improve spreads on our loans. On a linked quarter basis, we reported a slight decrease in margin from 4.32% to 4.27%, compared to the significant increases in margin that we reported in the first six months of 2010. Growth in earning assets, including loans held for sale and liquidity assets, produced net spreads for the third quarter of 2010 which were below the net interest margin for the second quarter, thereby reducing net interest margin without an adverse effect on net interest income. Due to changes in rates on mortgage loans, the yield on loans held for sale fell by 27 bps, but the reduction in rate was more than offset by the growth in balances. The decrease in net interest margin was also due to the reduction in the use of borrowed funds at costs which would have been lower than rates paid on increased balances of customer deposits. Additionally, the level of our nonaccrual loans has negatively affected both our margin and net interest income. Net interest income was $62.6 million for the third quarter of 2010, compared to $51.6 million for the third quarter of 2009. The increase was due to an increase in average earning assets of $772.2 million over levels reported in the third quarter of 2009. The increase in average earning assets included a $229.8 million increase in average loans held for investment and a $534.4 million increase in average loans held for sale, offset by a decrease of $80.4 million in average securities.

Average total deposits for the third quarter of 2010 increased by $1.2 billion from the third quarter of 2009 and increased by $427.6 million from the second quarter of 2010. For the same periods, the average balance of demand deposits increased by $378.2 million, or 49 percent, to $1.1 billion from $764.6 million during the third quarter of 2009 and increased $118.4 million, or 12 percent, from the second quarter of 2010.

As a result of the overall economic downturn, we have continued to experience increases in levels of non-performing assets and exposure to credit losses during the third quarter of 2010. Provision for credit losses, valuation allowance and direct write-downs related to other real estate owned (“OREO”) totaled $17.2 million in third quarter of 2010 compared to $15.7 million in the third quarter of 2009 and $15.1 million in the second quarter of 2010. The Company recorded a $13.5 million provision for credit losses in the third quarter of 2010, compared to $13.5 million in the third quarter of 2009 and $14.5 million in the second quarter of 2010. The third quarter provision resulted in an increase in the combined reserve to 1.75 percent of loans held for investment as compared to 1.59 percent at September 30, 2009, and 1.73 percent at the end of the second quarter of 2010. In management’s opinion, the reserve is adequate and is derived from consistent application of the methodology for establishing the adequacy of reserves for Texas Capital Bank’s loan portfolio. In the third quarter of 2010, net charge-offs were $12.1 million, compared to net charge-offs of $2.0 million in the third quarter of 2009 and net charge-offs of $12.6 million in the second quarter of 2010. Non-accrual loans were $127.1 million, or 2.83 percent, of loans at the end of the third quarter of 2010, compared to $85.3 million, or 1.99 percent of loans at the end of the third quarter of 2009, and $138.2 million, or 3.10 percent of loans at the end of the second quarter of 2010. At September 30, 2010, total OREO was $38.6 million compared to $34.7 million at the end of the third quarter of 2009, and $42.1 million at the end of the second quarter of 2010. The balance of $38.6 million at September 30, 2010 is stated net of a $12.5 million valuation allowance, for which we incurred a non-interest expense of $3.7 million during the third quarter of 2010.

Non-interest income increased $968,000 during the third quarter of 2010, or 14%, compared to the same period of 2009 primarily related to a $1.2 million increase in brokered loan fees. Offsetting this increase was a $499,000 decrease equipment rental income related to a decline in the leased equipment portfolio.

Non-interest expense for the third quarter of 2010 increased $5.5 million, or 15 percent, to $42.6 million from $37.1 million in the third quarter of 2009. The increase is primarily related to a $2.3 million increase in salaries and employee benefits to $21.9 million from $19.6 million, which was primarily due to general business growth. Allowance and other carrying costs for OREO expense increased $1.7 million to $4.1 million related to deteriorating values of assets held in OREO. Of the $4.1 million expense, $3.7 million was related to an increase in the valuation allowance.

Stockholders’ equity increased by 9 percent from $474.0 million at September 30, 2009 to $515.6 million at September 30, 2010. Contributing to the increase was retained net income and proceeds of sales of common stock. During the third quarter of 2010, we sold approximately 2,600 shares of common stock with net proceeds of $45,000 under the discretionary equity issuance program announced in January 2010. The Bank is well capitalized under regulatory guidelines and at September 30, 2010, the Company’s ratio of tangible common equity to total tangible assets was 7.9 percent.

ABOUT TEXAS CAPITAL BANCSHARES, INC.

Texas Capital Bancshares, Inc. (NASDAQ: TCBI) is the parent company of Texas Capital Bank, a commercial bank that delivers highly personalized financial services to businesses and private clients. Headquartered in Dallas, the Bank has full-service locations in Austin, Dallas, Fort Worth, Houston and San Antonio.

This release contains forward-looking statements, which are subject to risks and uncertainties. A number of factors, many of which are beyond Texas Capital Bancshares’ control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include the risk of adverse impacts from general economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. These and other factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Form 10-K and other filings made by Texas Capital Bancshares with the Securities and Exchange Commission.

 
TEXAS CAPITAL BANCSHARES, INC.
 

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

(Dollars in thousands except per share data)

  3rd Quarter   2nd Quarter   1st Quarter   4th Quarter   3rd Quarter
2010 2010 2010 2009 2009
CONSOLIDATED STATEMENT OF INCOME
Interest income $ 72,600 $ 67,472 $ 64,306 $ 65,137 $ 62,197
Interest expense   9,994     9,587     9,078     10,031     10,631  
Net interest income 62,606 57,885 55,228 55,106 51,566
Provision for credit losses   13,500     14,500     13,500     10,500     13,500  
Net interest income after provision for credit losses 49,106 43,385 41,728 44,606 38,066
Non-interest income 8,101 8,036 6,948 7,811 7,133
Non-interest expense   42,602     39,118     37,186     42,796     37,067  
Income from continuing operations before income taxes

14,605

12,303

11,490

9,621

8,132

Income tax expense   5,074     4,187     3,890     3,194     2,779  
Income from continuing operations 9,531 8,116 7,600 6,427 5,353
Loss from discontinued operations (after-tax)   (5 )   (54 )   (55 )   (55 )   (41 )
Net income 9,526 8,062 7,545 6,372 5,312
Preferred stock dividends                    
Net income available to common shareholders $ 9,526   $ 8,062   $ 7,545   $ 6,372   $ 5,312  
Diluted EPS from continuing operations $ .25 $ .22 $ .21 $ .18 $ .15
Diluted EPS $ .25 $ .22 $ .21 $ .18 $ .15
 
Diluted shares 37,444,516 37,486,785 36,783,719 36,311,306 36,303,975
 
CONSOLIDATED BALANCE SHEET DATA
Total assets $ 6,344,916 $ 5,961,472 $ 5,499,599 $ 5,698,318 $ 5,320,401
Loans held for investment 4,483,204 4,462,830 4,443,456 4,457,293 4,290,453
Loans held for sale 1,399,208 997,150 592,436 693,504 549,787
Securities 202,177 227,029 246,209 266,128 285,869
Demand deposits 1,195,093 1,120,664 994,096 899,492 802,692
Total deposits 5,407,033 4,926,069 4,409,819 4,120,725 3,916,568
Other borrowings 270,628 376,646 452,061 957,029 790,192
Long-term debt 113,406 113,406 113,406 113,406 113,406
Stockholders’ equity 515,618 514,078 499,996 481,360 474,044
 
End of period shares outstanding 36,792,030 36,776,836 36,524,313 35,919,524 35,802,068
Book value (excluding securities gains/losses) $ 13.84 $ 13.79 $ 13.52 $ 13.23 $ 13.05
Tangible book value (excluding securities gains/losses)

$

13.58

$

13.53

$

13.25

$

12.96

$

12.84

 
SELECTED FINANCIAL RATIOS
From continuing operations:
Net interest margin 4.27 % 4.32 % 4.43 % 4.21 % 4.06 %
Return on average assets .62 % .58 % .57 % .47 % .40 %
Return on average equity 7.23 % 6.33 % 6.21 % 5.26 % 4.46 %
Non-interest income to earning assets .55 % .60 % .55 % .59 % .56 %
Efficiency ratio 60.3 % 59.3 % 59.8 % 68.0 % 63.1 %
Efficiency ratio (excluding ORE valuation/write-down)

55.1

%

58.5

%

56.7

%

59.1

%

59.4

%

Non-interest expense to earning assets 2.90 % 2.91 % 2.97 % 3.26 % 2.91 %
From consolidated:
Net interest margin 4.27 % 4.32 % 4.43 % 4.21 % 4.06 %
Return on average assets .62 % .57 % .57 % .46 % .40 %
Return on average equity 7.23 % 6.29 % 6.17 % 5.21 % 4.43 %
 
Tangible common equity to total tangible assets 7.9 % 8.4 % 8.8 % 8.2 % 8.7 %
Tier 1 capital ratio 10.7 % 11.0 % 11.3 % 10.7 % 11.2 %
Total capital ratio 11.9 % 12.3 % 12.5 % 12.0 % 12.5 %
Tier 1 leverage ratio 10.0 % 10.7 % 11.0 % 10.5 % 10.8 %
 
TEXAS CAPITAL BANCSHARES, INC.
 
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
  September 30,   September 30,   %
2010 2009 Change
Assets
Cash and due from banks $ 90,354 $ 60,365 50 %
Federal funds sold 13,710 240 N/M
Securities, available-for-sale 202,177 285,869 (29 )%
Loans held for sale 1,399,208 549,787 155 %
Loans held for sale from discontinued operations 580 589 (2 )%
Loans held for investment (net of unearned income) 4,483,204 4,290,453 4 %
Less: Allowance for loan losses   75,655     65,818   16 %
Loans held for investment, net 4,407,549 4,224,635 4 %
Premises and equipment, net 12,461 11,473 9 %
Accrued interest receivable and other assets 209,893 180,465 16 %
Goodwill and intangibles, net   9,564     7,567   26 %
Total assets $ 6,345,496   $ 5,320,990   19 %
 
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing $ 1,195,093 $ 802,692 49 %
Interest bearing 3,761,450 2,720,011 38 %
Interest bearing in foreign branches   450,490     393,865   14 %
Total deposits 5,407,033 3,916,568 38 %
 
Accrued interest payable 2,830 2,516 12 %
Other liabilities 35,981 24,264 48 %
Federal funds purchased 249,463 616,029 (60 )%
Repurchase agreements 18,171 65,422 (72 )%
Other borrowings 2,994 108,741 (97 )%
Trust preferred subordinated debentures   113,406     113,406   -  
Total liabilities 5,829,878 4,846,946 20 %
 
Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares – 10,000,000
Issued shares
Common stock, $.01 par value:
Authorized shares – 100,000,000
Issued shares – 36,792,447 and 35,802,485 at September 30, 2010 and 2009, respectively

368

358

3

%

Additional paid-in capital 335,057 324,724 3 %
Retained earnings 173,753 142,248 22 %
Treasury stock (shares at cost: 417 at September 30, 2010 and 2009)

(8

)

(8

)

-

Accumulated other comprehensive income, net of taxes   6,448     6,722   (4 )%
Total stockholders’ equity   515,618     474,044   9 %
Total liabilities and stockholders’ equity $ 6,345,496   $ 5,320,990   19 %
       
TEXAS CAPITAL BANCSHARES, INC.
 
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
2010 2009 2010 2009
Interest income
Interest and fees on loans $ 70,293 $ 58,959 $ 196,797 $ 167,326
Securities 2,246 3,226 7,463 10,621
Federal funds sold 50 5 92 29
Deposits in other banks   11     7     26     40  
Total interest income 72,600 62,197 204,378 178,016
Interest expense
Deposits 8,760 8,916 24,938 29,264
Federal funds purchased 259 586 868 1,944
Repurchase agreements 3 14 9 42
Other borrowings 125 48 1,873
Trust preferred subordinated debentures   972     990     2,796     3,308  
Total interest expense   9,994     10,631     28,659     36,431  
Net interest income 62,606 51,566 175,719 141,585
Provision for credit losses   13,500     13,500     41,500     33,000  
Net interest income after provision for credit losses 49,106 38,066 134,219 108,585
Non-interest income
Service charges on deposit accounts 1,662 1,658 4,684 4,797
Trust fee income 1,013 1,000 2,947 2,836
Bank owned life insurance (BOLI) income 455 418 1,407 1,115
Brokered loan fees 3,272 2,120 7,397 6,822
Equipment rental income 792 1,291 3,332 4,200
Other   907     646     3,318     1,679  
Total non-interest income 8,101 7,133 23,085 21,449
Non-interest expense
Salaries and employee benefits 21,872 19,569 63,334 53,788
Net occupancy expense 3,128 3,164 9,174 9,305
Leased equipment depreciation 580 1,050 2,674 3,288
Marketing 1,333 705 3,221 1,915
Legal and professional 2,705 3,274 7,953 8,816
Communications and data processing 1,142 935 3,069 2,750
FDIC insurance assessment 2,482 1,452 6,591 6,492
Allowance and other carrying costs for OREO 4,071 2,390 7,171 3,968
Other   5,289     4,528     15,719     12,424  
Total non-interest expense   42,602     37,067     118,906     102,746  
Income from continuing operations before income taxes 14,605 8,132 38,398 27,288
Income tax expense   5,074     2,779     13,151     9,328  
Income from continuing operations 9,531 5,353 25,247 17,960
Loss from discontinued operations (after-tax)   (5 )   (41 )   (114 )   (180 )
Net income 9,526 5,312 25,133 17,780
Preferred dividends             5,383  
Net income available to common stockholders $ 9,526   $ 5,312   $ 25,133   $ 12,397  
 
Basic earnings per common share:
Income from continuing operations $ .26 $ .15 $ .69 $ .38
Net income $ .26 $ .15 $ .69 $ .37
 
Diluted earnings per common share:
Income from continuing operations $ .25 $ .15 $ .68 $ .37
Net income $ .25 $ .15 $ .67 $ .37
 
TEXAS CAPITAL BANCSHARES, INC.
 
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
  3rd Quarter   2nd Quarter   1st Quarter   4th Quarter   3rd Quarter
2010 2010 2010 2009 2009
Reserve for loan losses:
Beginning balance $ 74,881 $ 71,705 $ 67,931 $ 65,818 $ 54,286
Loans charged-off:
Commercial 2,384 6,653 7,551 2,098 115
Real estate – construction 6,229 5,789 420 4,051 576
Real estate – term 3,000 766 1,971 1,239
Consumer 3 80
Leases   595     218     594         72  
Total 12,208 12,660 9,331 8,123 2,082
Recoveries:
Commercial 76 30 23 34 21
Real estate – construction 1 6
Real estate – term 7 22 8 53
Consumer 2 7 16
Leases   8     55     20     34     20  
Total recoveries   94     107     51     134     57  
Net charge-offs 12,114 12,553 9,280 7,989 2,025
Provision for loan losses   12,888     15,729     13,054     10,102     13,557  
Ending balance $ 75,655   $ 74,881   $ 71,705   $ 67,931   $ 65,818  
 
Reserve for off-balance sheet credit losses:
Beginning balance $ 2,165 $ 3,394 $ 2,948 $ 2,550 $ 2,607
Provision (benefit) for off-balance sheet credit losses   612     (1,229 )   446     398     (57 )
Ending balance $ 2,777   $ 2,165   $ 3,394   $ 2,948   $ 2,550  
 
Total reserves for credit losses $ 78,432 $ 77,046 $ 75,099 $ 70,879 $ 68,368
 
Total provision for credit losses $ 13,500 $ 14,500 $ 13,500 $ 10,500 $ 13,500
 
Reserve to loans held for investment(2) 1.69 % 1.68 % 1.61 % 1.52 % 1.53 %
Reserve to average loans held for investment(2) 1.68 % 1.68 % 1.63 % 1.55 % 1.54 %
Net charge-offs to average loans(1)(2) 1.07 % 1.13 % .85 % .72 % .19 %
Net charge-offs to average loans for last twelve months(1)(2) .95 % .73 % .61 % .46 % .41 %
Total provision for credit losses to average loans(1)(2) 1.19 % 1.30 % 1.24 % .95 % 1.26 %
Combined reserves for credit losses to loans held for investment(2)

1.75

%

1.73

%

1.69

%

1.59

%

1.59

%

 
Non-performing assets (NPAs): (4)
Non-accrual loans $ 127,054 $ 138,236 $ 115,926 $ 95,625 $ 85,270
Other real estate owned (OREO) (5)   38,646     42,077     28,865     27,264     34,671  
Total $ 165,700   $ 180,313   $ 144,791   $ 122,889   $ 119,941  
 
Non-accrual loans to loans(2) 2.83 % 3.10 % 2.61 % 2.15 % 1.99 %
Total NPAs to loans plus OREO(2) 3.66 % 4.00 % 3.24 % 2.74 % 2.77 %
Reserve for loan losses to non-accrual loans .6x .5x .6x .7x .8x
 
Restructured loans(6) $ $ $ 10,700 $ $
Loans past due 90 days and still accruing(3) $ 2,428 $ 13,962 $ 2,390 $ 6,081 $ 7,569
 
Loans past due 90 days to loans(2) .05 % .31 % .05 % .14 % .18 %
 
(1) Interim period ratios are annualized.
(2) Excludes loans held for sale.
(3) At September 30, 2010, loans past due 90 days and still accruing includes premium finance loans of $1.6 million. These loans are primarily secured by
obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days
or longer from the cancellation date.
(4) At September 30, 2010, non-performing assets include $1.6 million of mortgage warehouse loans, which were transferred to the loans held for investment
portfolio at lower of cost or market, and some were subsequently moved to OREO.
(5) At September 30, 2010, OREO balance is net of $12.5 million valuation allowance.
(6) Loan was restructured in Q1-10 and was still accruing. During Q2-10, conditions related to this credit deteriorated and it is now included in nonaccruals.
 
TEXAS CAPITAL BANCSHARES, INC.
 
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in thousands)
         
3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter
2010 2010 2010 2009 2009
Interest income
Interest and fees on loans $ 70,293 $ 64,935 $ 61,569 $ 62,174 $ 58,959
Securities 2,246 2,491 2,726 2,957 3,226
Federal funds sold 50 40 2 2 5
Deposits in other banks   11     6     9     4     7  
Total interest income 72,600 67,472 64,306 65,137 62,197
Interest expense
Deposits 8,760 8,420 7,758 8,560 8,916
Federal funds purchased 259 244 365 460 586
Repurchase agreements 3 2 4 11 14
Other borrowings 1 47 76 125
Trust preferred subordinated debentures   972     920     904     924     990  
Total interest expense   9,994     9,587     9,078     10,031     10,631  
Net interest income 62,606 57,885 55,228 55,106 51,566
Provision for credit losses   13,500     14,500     13,500     10,500     13,500  
Net interest income after provision for credit losses 49,106 43,385 41,728 44,606 38,066
Non-interest income
Service charges on deposit accounts 1,662 1,539 1,483 1,490 1,658
Trust fee income 1,013 980 954 979 1,000
Bank owned life insurance (BOLI) income 455 481 471 464 418
Brokered loan fees 3,272 2,221 1,904 2,221 2,120
Equipment rental income 792 1,196 1,344 1,357 1,291
Other   907     1,619     792     1,300     646  
Total non-interest income 8,101 8,036 6,948 7,811 7,133
Non-interest expense
Salaries and employee benefits 21,872 21,393 20,069 19,631 19,569
Net occupancy expense 3,128 3,032 3,014 2,986 3,164
Leased equipment depreciation 580 1,035 1,059 1,031 1,050
Marketing 1,333 1,101 787 1,119 705
Legal and professional 2,705 3,298 1,950 3,030 3,274
Communications and data processing 1,142 911 1,016 993 935
FDIC insurance assessment 2,482 2,241 1,868 1,972 1,452
Allowance and other carrying costs for OREO 4,071 808 2,292 6,377 2,390
Other   5,289     5,299     5,131     5,657     4,528  
Total non-interest expense   42,602     39,118     37,186     42,796     37,067  
Income from continuing operations before income taxes

14,605

12,303

11,490

9,621

8,132

Income tax expense   5,074     4,187     3,890     3,194     2,779  
Income from continuing operations 9,531 8,116 7,600 6,427 5,353
Loss from discontinued operations (after-tax)   (5 )   (54 )   (55 )   (55 )   (41 )
Net income 9,526 8,062 7,545 6,372 5,312
Preferred stock dividends                    
Net income available to common stockholders

$

9,526

 

$

8,062

 

$

7,545

 

$

6,372

 

$

5,312

 
 
TEXAS CAPITAL BANCSHARES, INC.
 
QUARTERLY FINANCIAL SUMMARY – UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
Continuing Operations
(Dollars in thousands)
 
  3rd Quarter 2010   2nd Quarter 2010   1st Quarter 2010   4th Quarter 2009   3rd Quarter 2009
Average

Balance

 

Revenue/

Expense (1)

  Yield/

Rate

Average

Balance

 

Revenue/

Expense (1)

  Yield/

Rate

Average

Balance

  Revenue/

Expense (1)

  Average

Balance

Average

Balance

  Revenue/

Expense (1)

  Yield/

Rate

Average

Balance

  Revenue/

Expense (1)

  Yield/

Rate

Assets
Securities – Taxable $ 173,835 $ 1,890 4.31 % $ 193,542 $ 2,126 4.41 % $ 211,618 $ 2,341 4.49 % $ 230,686 $ 2,560 4.40 % $ 247,936 $ 2,813 4.50 %
Securities – Non-taxable(2) 38,357 548 5.67 % 39,635 562 5.69 % 41,654 592 5.76 % 42,932 611 5.65 % 44,642 635 5.64 %
Federal funds sold 107,404 50 0.18 % 91,564 40 0.18 % 7,471 2 0.11 % 5,550 2 0.14 % 6,782 5 0.29 %
Deposits in other banks 18,766 11 0.23 % 12,449 6 0.19 % 12,457 9 0.29 % 12,916 4 0.12 % 12,649 7 0.22 %
Loans held for sale 1,074,309 12,760 4.71 % 664,474 8,244 4.98 % 457,459 5,490 4.87 % 601,793 7,286 4.80 % 539,889 6,836 5.02 %
Loans held for investment 4,493,998 57,533 5.08 % 4,459,790

56,691

5.10 % 4,413,960 56,079 5.15 % 4,384,692 54,888 4.97 % 4,264,202 52,123 4.85 %
Less reserve for loan losses   74,810  

    71,536  

   

66,726

 

    68,177  

    56,429  

 
Loans, net of reserve   5,493,497   70,293 5.08 %   5,052,728   64,935 5.15 %   4,804,693   61,569 5.20 %   4,918,308   62,174 5.02 %   4,747,662   58,959 4.92 %
Total earning assets 5,831,859 72,792 4.95 % 5,389,918 67,669 5.04 % 5,077,893 64,513 5.15 % 5,210,392 65,351 4.98 % 5,059,671 62,419 4.89 %
Cash and other assets   267,923   261,668   311,128   243,823   245,564
Total assets $ 6,099,782 $ 5,651,586 $ 5,389,021 $ 5,454,215 $ 5,305,235
 
Liabilities and Stockholders’ Equity
Transaction deposits $ 465,370 $ 189 0.16 % $ 484,900 $ 389 0.32 % $ 365,205 $ 264 0.29 % $ 180,767 $ 85 0.19 % $ 144,944 $ 58 0.16 %
Savings deposits 2,222,431 4,228 0.75 % 2,054,199 4,047 0.79 % 1,773,201 3,524 0.81 % 1,620,659 3,569 0.87 % 1,377,712 3,090 0.89 %
Time deposits 955,703 3,044 1.26 % 832,973 2,808 1.35 % 840,820 2,787 1.34 % 1,111,899 3,454 1.23 % 1,284,220 4,245 1.31 %
Deposits in foreign branches   418,112   1,299 1.23 %   380,361   1,176 1.24 %   353,803   1,183 1.36 %   401,661   1,452 1.43 %   404,545   1,523 1.49 %
Total interest bearing deposits 4,061,616

8,760

0.86

%

3,752,433

8,420

0.90

%

3,333,029

7,758

0.94

%

3,314,986

8,560

1.02

%

3,211,421

8,916

1.10

%

Other borrowings 230,043 262 0.45 % 222,427 247 0.45 % 461,477 416 0.37 % 607,731 547 0.36 % 724,127 725 0.40 %
Trust preferred subordinated debentures   113,406  

972

3.40

%

  113,406  

920

3.25

%

  113,406  

904

3.23

%

  113,406  

924

3.23

%

 

113,406

 

990

3.46

%

Total interest bearing liabilities 4,405,065

9,994

0.90

%

4,088,266

9,587

0.94

%

3,907,912

9,078

0.94

%

4,036,123

10,031

0.99

%

4,048,954

10,631

1.04

%

Demand deposits 1,142,735 1,024,292 956,359 914,266 764,557
Other liabilities 28,997 24,693 28,643 18,787 15,617
Stockholders’ equity   522,985   514,335   496,107   485,039   476,107
Total liabilities and stockholders’ equity $ 6,099,782 $ 5,651,586 $ 5,389,021 $ 5,454,215 $ 5,305,235
 
Net interest income $ 62,798 $ 58,082 $ 55,435 $ 55,320 $ 51,788
Net interest margin 4.27 % 4.32 % 4.43 % 4.21 % 4.06 %
(1)   The loan averages include loans on which the accrual of interest has been discontinued and are stated net of unearned income.
(2) Taxable equivalent rates used where applicable.

Source: Texas Capital Bancshares, Inc.

Contact:

Texas Capital Bancshares, Inc.

Myrna Vance, 214-32-6646

myrna.vance@texascapitalbank.com

Contact Information

Texas Capital Bancshares, Inc.,
2000 McKinney Avenue
Suite 700
Dallas, TX 75201
(214) 932-6600

Investor Relations Contact
Heather Worley
(214) 932-6646
heather.worley@
texascapitalbank.com

Transfer Agent
Computershare Investor Services LLC
Two North Lasalle Street
Third Floor
Chicago, IL 60602
(800) 568-3476
(312) 588-4990

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