DALLAS--(BUSINESS WIRE)--Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the first quarter of 2013.
- Net income increased 5% on a linked quarter basis and 22% from the first quarter of 2012
- EPS increased 5% on a linked quarter basis and 14% from the first quarter of 2012
- Demand deposits increased 4% and total deposits increased 4% on a linked quarter basis; grew 50% and 28%, respectively, from the first quarter of 2012
- Loans held for investment increased 2% and total loans decreased 5% on a linked quarter basis; both grew 19% and 18%, respectively, from the first quarter of 2012
“I am pleased to report another strong quarter for Texas Capital, a quarter in which we maintained superior profitability, returns and credit trends in light of a very competitive environment and an expected seasonal decline in loans held for sale,” said George Jones, CEO. “We are in a strong capital position and have the resources and potential to continue our growth.”
| FINANCIAL SUMMARY | |||||||||||||
|
(dollars and shares in thousands) |
|||||||||||||
| Q1 2013 | Q1 2012 | % Change | |||||||||||
| QUARTERLY OPERATING RESULTS(1) | |||||||||||||
| Net Income | $ | 33,144 | $ | 27,081 | 22 | % | |||||||
| Net Income Available to Common Shareholders | $ | 33,063 | $ | 27,081 | 22 | % | |||||||
| Diluted EPS | $ | .80 | $ | .70 | 14 | % | |||||||
| ROA | 1.38 | % | 1.33 | % | |||||||||
| ROE | 15.82 | % | 17.36 | % | |||||||||
| Diluted Shares | 41,429 | 38,914 | |||||||||||
| BALANCE SHEET(1) | |||||||||||||
| Total Assets | $ | 10,020,565 | $ | 8,559,917 | 17 | % | |||||||
| Demand Deposits | 2,628,446 | 1,751,443 | 50 | % | |||||||||
| Total Deposits | 7,745,831 | 6,063,558 | 28 | % | |||||||||
| Loans Held for Investment | 6,920,011 | 5,792,349 | 19 | % | |||||||||
| Loans Held for Sale | 2,577,830 | 2,255,281 | 14 | % | |||||||||
| Total Loans | 9,497,841 | 8,047,630 | 18 | % | |||||||||
| Stockholders’ Equity | 1,013,195 | 647,341 | 57 | % | |||||||||
(1) Operating results, assets and loans are reporting from continuing operations
DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income from continuing operations and net income available to common shareholders of $33.1 million for the quarter ended March 31, 2013 compared to $27.1 million for the first quarter of 2012. On a fully diluted basis, earnings per common share from continuing operations were $.80 for the three months ended March 31, 2013, compared to $.70 for the same period last year. The discussion below relates only to continuing operations.
Return on average common equity was 15.82 percent and return on average assets was 1.38 percent for the first quarter of 2013, compared to 17.36 percent and 1.33 percent, respectively, for the first quarter of 2012.
Net interest income was $98.0 million for the first quarter of 2013, compared to $101.2 million in the fourth quarter of 2012 and $88.2 million for the first quarter of 2012. The net interest margin in the first quarter of 2013 was 4.27 percent, a 27 basis point decrease from the first quarter of 2012 and level with the fourth quarter of 2012. The year over year decrease in net interest margin is due to the growth in loans with lower yields with an offsetting benefit of the reduction in funding costs. The year over year growth in loans more than compensated for the reduction in yields and produced strong growth in net interest income.
Average loans held for investment for the first quarter of 2013 were $6.8 billion, an increase of $1.2 billion from the first quarter of 2012 and $179.9 million from the fourth quarter of 2012. Average loans held for sale for the first quarter of 2013 increased $326.0 million compared to the first quarter of 2012 and decreased $295.4 million from the fourth quarter of 2012 due to seasonal trends.
Average total deposits for the first quarter of 2013 increased by $1.7 billion from the first quarter of 2012 and increased by $499.8 million from the fourth quarter of 2012. For the same periods, the average balance of demand deposits increased by $829.5 million, or 49 percent, to $2.5 billion from $1.7 billion during the first quarter of 2012 and increased $173.2 million from the fourth quarter of 2012.
In the first quarter of 2013, we experienced decreases in levels of non-performing assets. Credit costs, including the provision for credit losses and valuation charges related to other real estate owned (“OREO”) totaled $2.1 million in the first quarter of 2013 compared to $5.7 million in the first quarter of 2012 and $5.5 million in the fourth quarter of 2012. We recorded a $2.0 million provision for credit losses in the first quarter of 2013 compared to $3.0 million in the first quarter of 2012 and $4.5 million in the fourth quarter of 2012. Due to growth and improving credit quality, at March 31, 2013, the combined reserve decreased to 1.14 percent of loans held for investment as compared to 1.29 percent at March 31, 2012 and 1.15 percent at December 31, 2012. In management’s opinion, the reserve is appropriate and is derived from consistent application of the methodology for establishing the adequacy of reserves for Texas Capital Bank’s loan portfolio. In the first quarter of 2013, net charge-offs were $1.2 million, compared to net charge-offs of $828,000 in the first quarter of 2012 and net charge-offs of $3.5 million in the fourth quarter of 2012. Non-accrual loans were $43.4 million, or .63 percent of loans held for investment at the end of the first quarter of 2013, $50.2 million, or .87 percent, at the end of the first quarter of 2012 and $55.8 million, or .82 percent, at the end of the fourth quarter 2012. At March 31, 2013, total OREO was $14.4 million compared to $32.6 million at the end of the first quarter of 2012, and $16.0 million at the end of the fourth quarter of 2012. The OREO balance of $14.4 million at March 31, 2013 is stated net of a $4.5 million valuation allowance. The valuation charge for OREO reflected in non-interest expense was $71,000 in the first quarter of 2013 compared to $2.7 million in the first quarter of 2012 and $955,000 in the fourth quarter of 2012.
Non-interest income increased $2.1 million during the first quarter of 2013, or 23 percent, compared to the same period of 2012 primarily related to a $1.1 million increase in brokered loan fees earned in the mortgage warehouse lending division. Swap fee income increased $855,000 during the first quarter of 2013 due to an increase in swap transactions as compared to the same period in 2012.
Non-interest expense for the first quarter of 2013 increased $3.4 million, or 7 percent, to $55.7 million from $52.3 million in the first quarter of 2012. The increase is primarily related to a $4.5 million increase in salaries and employee benefits to $33.5 million from $29.0 million, which was primarily due to general business growth and costs of performance-based incentives resulting from the increase in stock price. Marketing expense increased $1.1 million from the first quarter of 2012 due to expansion of customer bases in both loans and deposits. Allowance and other carrying costs for OREO expense decreased $2.9 million to $430,000, which included a $71,000 valuation expense. The $71,000 valuation expense in the first quarter of 2013 relates to direct write-downs of the OREO balance, compared to $1.9 million related to direct write-downs and $856,000 related to increasing the valuation allowance for the first quarter of 2012.
Stockholders’ equity increased 57 percent from $647.3 million at March 31, 2012 to $1.0 billion at March 31, 2013, primarily related to the offering of 2.3 million common shares for net proceeds of $87 million in the third quarter of 2012, the offering of 6.0 million shares of preferred shares for proceeds of $145.1 million in the first quarter of 2013 and retained net income. The Bank is well capitalized under regulatory guidelines and at March 31, 2013, the Company’s ratio of tangible common equity to total tangible assets was 8.4 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) | |||||||||||||||||||||||||
| 1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | |||||||||||||||||||||
| 2013 | 2012 | 2012 | 2012 | 2012 | |||||||||||||||||||||
| CONSOLIDATED STATEMENT OF INCOME | |||||||||||||||||||||||||
| Interest income | $ | 104,179 | $ | 107,769 | $ | 102,011 | $ | 95,546 | $ | 93,131 | |||||||||||||||
| Interest expense | 6,137 | 6,614 | 5,156 | 4,906 | 4,902 | ||||||||||||||||||||
| Net interest income | 98,042 | 101,155 | 96,855 | 90,640 | 88,229 | ||||||||||||||||||||
| Provision for credit losses | 2,000 | 4,500 | 3,000 | 1,000 | 3,000 | ||||||||||||||||||||
| Net interest income after provision for credit losses | 96,042 | 96,655 | 93,855 | 89,640 | 85,229 | ||||||||||||||||||||
| Non-interest income | 11,281 | 12,836 | 10,552 | 10,462 | 9,190 | ||||||||||||||||||||
| Non-interest expense | 55,700 | 60,074 | 53,521 | 53,973 | 52,276 | ||||||||||||||||||||
| Income from continuing operations before income taxes |
51,623 |
49,417 |
50,886 |
46,129 |
42,143 |
||||||||||||||||||||
| Income tax expense | 18,479 | 17,982 | 18,316 | 16,506 | 15,062 | ||||||||||||||||||||
| Income from continuing operations | 33,144 | 31,435 | 32,570 | 29,623 | 27,081 | ||||||||||||||||||||
|
Income (loss) from discontinued operations (after-tax) |
(1 |
) |
(6 |
) |
(34 |
) |
(1 |
) |
4 |
||||||||||||||||
| Net income | $ | 33,143 | $ | 31,429 | $ | 32,536 | $ | 29,622 | $ | 27,085 | |||||||||||||||
| Preferred stock dividends | 81 | – | – | – | – | ||||||||||||||||||||
| Net income available to common shareholders | $ | 33,062 | $ | 31,429 | $ | 32,536 | $ | 29,622 | $ | 27,085 | |||||||||||||||
| Diluted EPS from continuing operations | $ | .80 | $ | .76 | $ | .80 | $ | .76 | $ | .70 | |||||||||||||||
| Diluted EPS | $ | .80 | $ | .76 | $ | .80 | $ | .76 | $ | .70 | |||||||||||||||
| Diluted shares | 41,429,244 | 41,505,026 | 40,755,733 | 39,141,544 | 38,914,241 | ||||||||||||||||||||
| CONSOLIDATED BALANCE SHEET DATA | |||||||||||||||||||||||||
| Total assets | $ | 10,020,565 | $ | 10,540,542 | $ | 9,881,362 | $ | 9,144,360 | $ | 8,559,917 | |||||||||||||||
| Loans held for investment | 6,920,011 | 6,785,535 | 6,549,089 | 6,234,692 | 5,792,349 | ||||||||||||||||||||
| Loans held for sale | 2,577,830 | 3,175,272 | 2,818,622 | 2,408,032 | 2,255,281 | ||||||||||||||||||||
| Securities | 87,527 | 100,195 | 107,288 | 114,964 | 123,828 | ||||||||||||||||||||
| Demand deposits | 2,628,446 | 2,535,375 | 2,114,279 | 2,019,473 | 1,751,443 | ||||||||||||||||||||
| Total deposits | 7,745,831 | 7,440,804 | 6,717,579 | 6,660,290 | 6,063,558 | ||||||||||||||||||||
| Other borrowings | 938,134 | 1,947,161 | 2,046,169 | 1,609,039 | 1,657,728 | ||||||||||||||||||||
| Subordinated notes | 111,000 | 111,000 | 111,000 | – | – | ||||||||||||||||||||
| Long-term debt | 113,406 | 113,406 | 113,406 | 113,406 | 113,406 | ||||||||||||||||||||
| Stockholders’ equity | 1,013,195 | 836,242 | 802,406 | 680,705 | 647,341 | ||||||||||||||||||||
| End of period shares outstanding | 40,771,414 | 40,727,579 | 40,580,283 | 38,114,012 | 37,912,054 | ||||||||||||||||||||
| Book value (excluding securities gains/losses) | $ | 21.10 | $ | 20.45 | $ | 19.68 | $ | 17.75 | $ | 16.96 | |||||||||||||||
| Tangible book value (excluding securities gains/losses) |
$ |
20.62 |
$ |
19.96 |
$ |
19.18 |
$ |
17.22 |
$ |
16.42 |
|||||||||||||||
| SELECTED FINANCIAL RATIOS | |||||||||||||||||||||||||
| Net interest margin | 4.27 | % | 4.27 | % | 4.36 | % | 4.49 | % | 4.54 | % | |||||||||||||||
| Return on average assets | 1.38 | % | 1.27 | % | 1.40 | % | 1.40 | % | 1.33 | % | |||||||||||||||
| Return on average common equity | 15.82 | % | 15.35 | % | 17.27 | % | 18.08 | % | 17.36 | % | |||||||||||||||
| Non-interest income to earning assets | .49 | % | .54 | % | .47 | % | .52 | % | .47 | % | |||||||||||||||
| Efficiency ratio | 50.9 | % | 52.7 | % | 49.8 | % | 53.4 | % | 53.7 | % | |||||||||||||||
| Efficiency ratio (excluding OREO valuation/write-down) |
50.9 |
% |
51.9 |
% |
49.8 |
% |
50.3 |
% |
50.8 |
% |
|||||||||||||||
| Non-interest expense to earning assets | 2.42 | % | 2.53 | % | 2.40 | % | 2.67 | % | 2.69 | % | |||||||||||||||
| Non-interest expense to earning assets (excluding OREO valuation charge) |
2.42 |
% |
2.49 |
% |
2.40 |
% |
2.52 |
% |
2.55 |
% |
|||||||||||||||
| Tangible common equity to total tangible assets | 8.4 | % | 7.7 | % | 7.9 | % | 7.2 | % | 7.3 | % | |||||||||||||||
| TEXAS CAPITAL BANCSHARES, INC. | ||||||||||||||
| CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||||||||
| (Dollars in thousands) | ||||||||||||||
|
March 31,
2013 |
March 31,
2012 |
%
Change |
||||||||||||
| Assets | ||||||||||||||
| Cash and due from banks | $ | 80,440 | $ | 66,806 | 20 | % | ||||||||
| Interest-bearing deposits | 86,003 | 61,324 | 40 | % | ||||||||||
| Federal funds sold and securities purchased under resale agreements |
25,000 |
20,680 |
21 |
% |
||||||||||
| Securities, available-for-sale | 87,527 | 123,828 | (29 | )% | ||||||||||
| Loans held for sale | 2,577,830 | 2,255,281 | 14 | % | ||||||||||
| Loans held for sale from discontinued operations | 301 | 390 | (23 | )% | ||||||||||
| Loans held for investment (net of unearned income) | 6,920,011 | 5,792,349 | 19 | % | ||||||||||
| Less: Allowance for loan losses | 75,000 | 71,992 | 4 | % | ||||||||||
| Loans held for investment, net | 6,845,011 | 5,720,357 | 20 | % | ||||||||||
| Premises and equipment, net | 11,249 | 11,445 | (2 | )% | ||||||||||
| Accrued interest receivable and other assets | 287,771 | 279,866 | 3 | % | ||||||||||
| Goodwill and intangibles, net | 19,734 | 20,330 | (3 | )% | ||||||||||
| Total assets | $ | 10,020,866 | $ | 8,560,307 | 17 | % | ||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||
| Liabilities: | ||||||||||||||
| Deposits: | ||||||||||||||
| Non-interest bearing | $ | 2,628,446 | $ | 1,751,443 | 50 | % | ||||||||
| Interest bearing | 4,739,067 | 3,902,123 | 21 | % | ||||||||||
| Interest bearing in foreign branches | 378,318 | 409,992 | (8 | )% | ||||||||||
| Total deposits | 7,745,831 | 6,063,558 | 28 | % | ||||||||||
| Accrued interest payable | 1,013 | 893 | 13 | % | ||||||||||
| Other liabilities | 98,287 | 77,381 | 27 | % | ||||||||||
| Federal funds purchased | 452,998 | 383,927 | 18 | % | ||||||||||
| Repurchase agreements | 35,095 | 23,740 | 48 | % | ||||||||||
| Other borrowings | 450,041 | 1,250,061 | (64 | )% | ||||||||||
| Subordinated notes | 111,000 | – | 100 | % | ||||||||||
| Trust preferred subordinated debentures | 113,406 | 113,406 | - | |||||||||||
| Total liabilities | 9,007,671 | 7,912,966 | 14 | % | ||||||||||
| Stockholders’ equity: | ||||||||||||||
| Preferred stock | 150,000 | – | 100 | % | ||||||||||
| Common stock, $.01 par value: | ||||||||||||||
| Authorized shares – 100,000,000 | ||||||||||||||
| Issued shares – 40,771,831 and 37,912,054 at March 31, 2013 and 2012, respectively |
408 |
379 |
8 |
% |
||||||||||
| Additional paid-in capital | 444,477 | 353,567 | 26 | % | ||||||||||
| Retained earnings | 415,517 | 288,868 | 44 | % | ||||||||||
| Treasury stock (shares at cost: 417 at March 31, 2013 and 2012, respectively) |
(8 |
) |
(8 |
) |
- |
|||||||||
| Accumulated other comprehensive income, net of taxes | 2,801 | 4,535 | (38 | )% | ||||||||||
| Total stockholders’ equity | 1,013,195 | 647,341 | 57 | % | ||||||||||
| Total liabilities and stockholders’ equity | $ | 10,020,866 | $ | 8,560,307 | 17 | % | ||||||||
| TEXAS CAPITAL BANCSHARES, INC. | |||||||||
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||
| (Dollars in thousands except per share data) | |||||||||
|
Three Months Ended
March 31 |
|||||||||
| 2013 | 2012 | ||||||||
| Interest income | |||||||||
| Loans | $ | 103,182 | $ | 91,774 | |||||
| Securities | 939 | 1,307 | |||||||
| Federal funds sold | 6 | 1 | |||||||
| Deposits in other banks | 52 | 49 | |||||||
| Total interest income | 104,179 | 93,131 | |||||||
| Interest expense | |||||||||
| Deposits | 3,245 | 3,472 | |||||||
| Federal funds purchased | 212 | 281 | |||||||
| Repurchase agreements | 4 | 3 | |||||||
| Other borrowings | 213 | 435 | |||||||
| Subordinated notes | 1,829 | – | |||||||
| Trust preferred subordinated debentures | 634 | 711 | |||||||
| Total interest expense | 6,137 | 4,902 | |||||||
| Net interest income | 98,042 | 88,229 | |||||||
| Provision for credit losses | 2,000 | 3,000 | |||||||
| Net interest income after provision for credit losses | 96,042 | 85,229 | |||||||
| Non-interest income | |||||||||
| Service charges on deposit accounts | 1,701 | 1,604 | |||||||
| Trust fee income | 1,241 | 1,114 | |||||||
| Bank owned life insurance (BOLI) income | 498 | 521 | |||||||
| Brokered loan fees | 4,744 | 3,651 | |||||||
| Swap fees | 1,652 | 797 | |||||||
| Other | 1,445 | 1,503 | |||||||
| Total non-interest income | 11,281 | 9,190 | |||||||
| Non-interest expense | |||||||||
| Salaries and employee benefits | 33,541 | 29,019 | |||||||
| Net occupancy expense | 3,857 | 3,604 | |||||||
| Marketing | 3,972 | 2,823 | |||||||
| Legal and professional | 3,940 | 3,991 | |||||||
| Communications and technology | 3,122 | 2,483 | |||||||
| Allowance and other carrying costs for OREO | 430 | 3,342 | |||||||
| Other | 6,838 | 7,014 | |||||||
| Total non-interest expense | 55,700 | 52,276 | |||||||
| Income from continuing operations before income taxes | 51,623 | 42,143 | |||||||
| Income tax expense | 18,479 | 15,062 | |||||||
| Income from continuing operations | 33,144 | 27,081 | |||||||
| Income (loss) from discontinued operations (after-tax) | (1 | ) | 4 | ||||||
| Net income | 33,143 | $ | 27,085 | ||||||
| Preferred stock dividends | 81 | – | |||||||
| Net income available to common shareholders | $ | 33,062 | $ | 27,085 | |||||
| Basic earnings per common share: | |||||||||
| Income from continuing operations | $ | .82 | $ | .72 | |||||
| Net income | $ | .82 | $ | .72 | |||||
| Diluted earnings per common share: | |||||||||
| Income from continuing operations | $ | .80 | $ | .70 | |||||
| Net income | $ | .80 | $ | .70 | |||||
| TEXAS CAPITAL BANCSHARES, INC. | |||||||||||||||||||||||||
| SUMMARY OF LOAN LOSS EXPERIENCE | |||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||
| 1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | |||||||||||||||||||||
| 2013 | 2012 | 2012 | 2012 | 2012 | |||||||||||||||||||||
| Reserve for loan losses: | |||||||||||||||||||||||||
| Beginning balance | $ | 74,337 | $ | 73,722 | $ | 72,404 | $ | 71,992 | $ | 70,295 | |||||||||||||||
| Loans charged-off: | |||||||||||||||||||||||||
| Commercial | 1,648 | 4,044 | 1,154 | 1,048 | 462 | ||||||||||||||||||||
| Real estate – construction | – | – | – | – | – | ||||||||||||||||||||
| Real estate – term | 105 | – | 284 | 56 | 559 | ||||||||||||||||||||
| Consumer | 19 | – | 49 | – | – | ||||||||||||||||||||
| Leases | – | 34 | 49 | 26 | 95 | ||||||||||||||||||||
| Total loans charged-off | 1,772 | 4,078 | 1,536 | 1,130 | 1,116 | ||||||||||||||||||||
| Recoveries: | |||||||||||||||||||||||||
| Commercial | 397 | 350 | 132 | 191 | 159 | ||||||||||||||||||||
| Real estate – construction | – | – | 10 | – | – | ||||||||||||||||||||
| Real estate – term | 8 | 226 | 130 | 348 | 108 | ||||||||||||||||||||
| Consumer | 30 | 7 | 18 | 3 | 5 | ||||||||||||||||||||
| Leases | 121 | 21 | 16 | 55 | 16 | ||||||||||||||||||||
| Total recoveries | 556 | 604 | 306 | 597 | 288 | ||||||||||||||||||||
| Net charge-offs | 1,216 | 3,474 | 1,230 | 533 | 828 | ||||||||||||||||||||
| Provision for loan losses | 1,879 | 4,089 | 2,548 | 945 | 2,525 | ||||||||||||||||||||
| Ending balance | $ | 75,000 | $ | 74,337 | $ | 73,722 | $ | 72,404 | $ | 71,992 | |||||||||||||||
| Reserve for off-balance sheet credit losses: | |||||||||||||||||||||||||
| Beginning balance | $ | 3,855 | $ | 3,444 | $ | 2,992 | $ | 2,937 | $ | 2,462 | |||||||||||||||
| Provision (benefit) for off-balance sheet credit losses | 121 | 411 | 452 | 55 | 475 | ||||||||||||||||||||
| Ending balance | $ | 3,976 | $ | 3,855 | $ | 3,444 | $ | 2,992 | $ | 2,937 | |||||||||||||||
| Total reserves for credit losses | $ | 78,976 | $ | 78,192 | $ | 77,166 | $ | 75,396 | $ | 74,929 | |||||||||||||||
| Total provision for credit losses | $ | 2,000 | $ | 4,500 | $ | 3,000 | $ | 1,000 | $ | 3,000 | |||||||||||||||
| Reserve to loans held for investment(2) | 1.08 | % | 1.10 | % | 1.13 | % | 1.16 | % | 1.24 | % | |||||||||||||||
| Reserve to average loans held for investment(2) | 1.10 | % | 1.12 | % | 1.16 | % | 1.22 | % | 1.27 | % | |||||||||||||||
| Net charge-offs to average loans(1)(2) | .07 | % | .21 | % | .08 | % | .04 | % | .06 | % | |||||||||||||||
| Net charge-offs to average loans for last twelve months(1)(2) | .10 | % | .10 | % | .10 | % | .20 | % | .40 | % | |||||||||||||||
| Total provision for credit losses to average loans(1)(2) | .12 | % | .27 | % | .19 | % | .07 | % | .21 | % | |||||||||||||||
| Combined reserves for credit losses to loans held for investment(2) |
1.14 |
% |
1.15 |
% |
1.18 |
% |
1.21 |
% |
1.29 |
% |
|||||||||||||||
| Non-performing assets (NPAs): | |||||||||||||||||||||||||
| Non-accrual loans | $ | 43,424 | $ | 55,833 | $ | 57,275 | $ | 56,433 | $ | 50,160 | |||||||||||||||
|
Other real estate owned (OREO)(4) |
14,426 | 15,991 | 19,079 | 27,882 | 32,601 | ||||||||||||||||||||
| Total | $ | 57,850 | $ | 71,824 | $ | 76,354 | $ | 84,315 | $ | 82,761 | |||||||||||||||
| Non-accrual loans to loans(2) | .63 | % | .82 | % | .87 | % | .91 | % | .87 | % | |||||||||||||||
| Total NPAs to loans plus OREO(2) | .83 | % | 1.06 | % | 1.16 | % | 1.35 | % | 1.42 | % | |||||||||||||||
| Total NPAs to earning assets | .60 | % | .71 | % | .81 | % | .97 | % | 1.01 | % | |||||||||||||||
| Reserve for loan losses to non-accrual loans |
1.7 |
x |
1.3 |
x |
1.3 |
x |
1.3 |
x |
1.4 |
x |
|||||||||||||||
| Restructured loans | $ | 11,755 | $ | 10,407 | $ | 9,145 | $ | 13,943 | $ | 12,582 | |||||||||||||||
| Loans past due 90 days and still accruing(3) | $ | 12,614 | $ | 3,674 | $ | 3,622 | $ | 4,421 | $ | 5,941 | |||||||||||||||
| Loans past due 90 days to loans(2) | .18 | % | .05 | % | .06 | % | .07 | % | .10 | % | |||||||||||||||
| (1) | Interim period ratios are annualized. | |
| (2) | Excludes loans held for sale. | |
| (3) | At March 31, 2013, loans past due 90 days and still accruing includes premium finance loans of $4.4 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 March 31, 2013, OREO balance is net of $4.5 million valuation allowance. | |
| TEXAS CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) | ||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| 1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | ||||||||||||||||||||
| 2013 | 2012 | 2012 | 2012 | 2012 | ||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||
| Interest and fees on loans | $ | 103,182 | $ | 106,653 | $ | 100,830 | $ | 94,291 | $ | 91,774 | ||||||||||||||
| Securities | 939 | 1,053 | 1,125 | 1,203 | 1,307 | |||||||||||||||||||
| Federal funds sold | 6 | 6 | 2 | 4 | 1 | |||||||||||||||||||
| Deposits in other banks | 52 | 57 | 54 | 48 | 49 | |||||||||||||||||||
| Total interest income | 104,179 | 107,769 | 102,011 | 95,546 | 93,131 | |||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||
| Deposits | 3,245 | 3,312 | 3,378 | 3,482 | 3,472 | |||||||||||||||||||
| Federal funds purchased | 212 | 190 | 268 | 240 | 281 | |||||||||||||||||||
| Repurchase agreements | 4 | 3 | 3 | 4 | 3 | |||||||||||||||||||
| Other borrowings | 213 | 615 | 607 | 492 | 435 | |||||||||||||||||||
| Subordinated notes | 1,829 | 1,829 | 208 | – | – | |||||||||||||||||||
| Trust preferred subordinated debentures | 634 | 665 | 692 | 688 | 711 | |||||||||||||||||||
| Total interest expense | 6,137 | 6,614 | 5,156 | 4,906 | 4,902 | |||||||||||||||||||
| Net interest income | 98,042 | 101,155 | 96,855 | 90,640 | 88,229 | |||||||||||||||||||
| Provision for credit losses | 2,000 | 4,500 | 3,000 | 1,000 | 3,000 | |||||||||||||||||||
| Net interest income after provision for credit losses | 96,042 | 96,655 | 93,855 | 89,640 | 85,229 | |||||||||||||||||||
| Non-interest income | ||||||||||||||||||||||||
| Service charges on deposit accounts | 1,701 | 1,693 | 1,684 | 1,624 | 1,604 | |||||||||||||||||||
| Trust fee income | 1,241 | 1,260 | 1,216 | 1,232 | 1,114 | |||||||||||||||||||
| Bank owned life insurance (BOLI) income | 498 | 510 | 549 | 588 | 521 | |||||||||||||||||||
| Brokered loan fees | 4,744 | 4,978 | 4,839 | 4,128 | 3,651 | |||||||||||||||||||
| Swap fees | 1,652 | 2,093 | 1,397 | 622 | 797 | |||||||||||||||||||
| Other | 1,445 | 2,302 | 867 | 2,268 | 1,503 | |||||||||||||||||||
| Total non-interest income | 11,281 | 12,836 | 10,552 | 10,462 | 9,190 | |||||||||||||||||||
| Non-interest expense | ||||||||||||||||||||||||
| Salaries and employee benefits | 33,541 | 31,198 | 31,009 | 30,230 | 29,019 | |||||||||||||||||||
| Net occupancy expense | 3,857 | 3,916 | 3,653 | 3,679 | 3,604 | |||||||||||||||||||
| Marketing | 3,972 | 3,980 | 3,472 | 3,174 | 2,823 | |||||||||||||||||||
| Legal and professional | 3,940 | 5,320 | 4,916 | 3,330 | 3,991 | |||||||||||||||||||
| Communications and technology | 3,122 | 3,070 | 2,885 | 2,720 | 2,483 | |||||||||||||||||||
| Allowance and other carrying costs for OREO | 430 | 1,369 | 552 | 3,812 | 3,342 | |||||||||||||||||||
| Litigation settlement expense | – | 4,000 | – | – | – | |||||||||||||||||||
| Other | 6,838 | 7,221 | 7,034 | 7,028 | 7,014 | |||||||||||||||||||
| Total non-interest expense | 55,700 | 60,074 | 53,521 | 53,973 | 52,276 | |||||||||||||||||||
| Income from continuing operations before income taxes |
51,623 |
49,417 |
50,886 |
46,129 |
42,143 |
|||||||||||||||||||
| Income tax expense | 18,479 | 17,982 | 18,316 | 16,506 | 15,062 | |||||||||||||||||||
| Income from continuing operations | 33,144 | 31,435 | 32,570 | 29,623 | 27,081 | |||||||||||||||||||
| Income (loss) from discontinued operations (after-tax) |
(1 |
) |
(6 |
) |
(34 |
) |
(1 |
) |
4 |
|||||||||||||||
| Net income | 33,143 | $ | 31,429 | $ | 32,536 | $ | 29,622 | $ | 27,085 | |||||||||||||||
| Preferred stock dividends | 81 | – | – | – | – | |||||||||||||||||||
| Net income available to common shareholders | $ | 33,062 | $ | 31,429 | $ | 32,536 | $ | 29,622 | $ | 27,085 | ||||||||||||||
| TEXAS CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| QUARTERLY FINANCIAL SUMMARY – UNAUDITED | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
Consolidated Daily Average Balances, Average Yields and Rates
Continuing Operations |
||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 1st Quarter 2013 | 4th Quarter 2012 | 3rd Quarter 2012 | 2nd Quarter 2012 | 1st Quarter 2012 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Average
Balance |
Revenue/
Expense (1) |
Yield/
Rate |
Average
Balance |
Revenue/
Expense (1) |
Yield/
Rate |
Average
Balance |
Revenue/
Expense (1) |
Yield/
Rate |
Average
Balance |
Revenue/
Expense (1) |
Yield/
Rate |
Average
Balance |
Revenue/
Expense (1) |
Yield/
Rate |
||||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities – Taxable | $ | 71,220 | $ | 729 | 4.15 | % | $ | 78,182 | $ | 811 | 4.13 | % | $ | 84,583 | $ | 881 | 4.14 | % | $ | 91,623 | $ | 948 | 4.16 | % | $ | 109,003 | $ | 1,041 | 3.84 | % | ||||||||||||||||||||
| Securities – Non-taxable(2) | 22,174 | 323 | 5.91 | % | 25,301 | 372 | 5.85 | % | 25,717 | 376 | 5.82 | % | 26,817 | 393 | 5.89 | % | 28,506 | 409 | 5.77 | % | ||||||||||||||||||||||||||||||
| Federal funds sold and securities purchased under resale agreements | 24,785 |
6 |
0.10 |
% |
21,617 |
6 |
0.11 |
% |
9,360 |
2 |
0.09 |
% |
8,077 |
4 |
0.20 |
% |
6,848 |
1 |
0.06 |
% |
||||||||||||||||||||||||||||||
| Deposits in other banks | 78,718 | 52 | 0.27 | % | 69,886 | 57 | 0.32 | % | 64,859 | 54 | 0.33 | % | 60,416 | 48 | 0.32 | % | 49,470 | 49 | 0.41 | % | ||||||||||||||||||||||||||||||
| Loans held for sale | 2,362,646 | 22,641 | 3.89 | % | 2,658,092 | 26,440 | 3.96 | % | 2,432,027 | 24,433 | 4.00 | % | 2,062,449 | 21,087 | 4.11 | % | 2,036,622 | 21,315 | 4.21 | % | ||||||||||||||||||||||||||||||
| Loans held for investment | 6,842,766 | 80,541 | 4.77 | % | 6,662,817 | 80,213 | 4.79 | % | 6,313,263 | 76,397 | 4.81 | % | 5,950,913 | 73,204 | 4.95 | % | 5,660,993 | 70,459 | 5.01 | % | ||||||||||||||||||||||||||||||
|
Less reserve for loan losses |
74,442 |
– |
– |
73,912 |
– |
– |
72,373 |
– |
– |
71,779 |
– |
– |
70,261 |
– |
– |
|||||||||||||||||||||||||||||||||||
| Loans, net of reserve | 9,130,970 | 103,182 | 4.58 | % | 9,246,997 | 106,653 | 4.59 | % | 8,672,917 | 100,830 | 4.63 | % | 7,941,583 | 94,291 | 4.78 | % | 7,627,354 | 91,774 | 4.84 | % | ||||||||||||||||||||||||||||||
| Total earning assets | 9,327,867 | 104,292 | 4.53 | % | 9,441,983 | 107,899 | 4.55 | % | 8,857,436 | 102,143 | 4.59 | % | 8,128,516 | 95,684 | 4.73 | % | 7,821,181 | 93,274 | 4.80 | % | ||||||||||||||||||||||||||||||
| Cash and other assets | 401,692 | 427,299 | 399,428 | 394,086 | 388,009 | |||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 9,729,559 | $ | 9,869,282 | $ | 9,256,864 | $ | 8,522,602 | $ | 8,209,190 | ||||||||||||||||||||||||||||||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Transaction deposits | $ | 1,003,735 | $ | 253 | 0.10 | % | $ | 941,947 | $ | 244 | 0.10 | % | $ | 803,776 | $ | 247 | 0.12 | % | $ | 694,463 | $ | 198 | 0.11 | % | $ | 565,319 | $ | 140 | 0.10 | % | ||||||||||||||||||||
| Savings deposits | 3,246,675 | 2,297 | 0.29 | % | 2,933,904 | 2,299 | 0.31 | % | 2,922,852 | 2,185 | 0.30 | % | 2,664,598 | 2,107 | 0.32 | % | 2,535,412 | 2,083 | 0.33 | % | ||||||||||||||||||||||||||||||
| Time deposits | 403,113 | 414 | 0.42 | % | 423,685 | 448 | 0.42 | % | 491,783 | 576 | 0.47 | % | 584,581 | 831 | 0.57 | % | 624,823 | 920 | 0.59 | % | ||||||||||||||||||||||||||||||
| Deposits in foreign branches | 335,265 | 281 | 0.34 | % | 362,580 | 321 | 0.35 | % | 431,412 | 370 | 0.34 | % | 444,478 | 346 | 0.31 | % | 409,422 | 329 | 0.32 | % | ||||||||||||||||||||||||||||||
| Total interest bearing deposits | 4,988,788 |
3,245 |
0.26 |
% |
4,662,116 |
3,312 |
0.28 |
% |
4,649,823 |
3,378 |
0.29 |
% |
4,388,120 |
3,482 |
0.32 |
% |
4,134,976 |
3,472 |
0.34 |
% |
||||||||||||||||||||||||||||||
| Other borrowings | 1,041,573 | 429 | 0.17 | % | 1,725,129 | 808 | 0.19 | % | 1,639,953 | 878 | 0.21 | % | 1,428,575 | 736 | 0.21 | % | 1,554,716 | 719 | 0.19 | % | ||||||||||||||||||||||||||||||
| Subordinated notes | 111,000 | 1,829 | 6.68 | % | 111,000 | 1,829 | 6.56 | % | 12,065 | 208 | 6.86 | % | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||
| Trust preferred subordinated debentures | 113,406 |
634 |
2.27 |
% |
113,406 |
665 |
2.33 |
% |
113,406 |
692 |
2.43 |
% |
113,406 |
688 |
2.44 |
% |
113,406 |
711 |
2.52 |
% |
||||||||||||||||||||||||||||||
| Total interest bearing liabilities | 6,254,767 |
6,137 |
0.40 |
% |
6,611,651 |
6,614 |
0.40 |
% |
6,415,247 |
5,156 |
0.32 |
% |
5,930,101 |
4,906 |
0.33 |
% |
5,803,098 |
4,902 |
0.34 |
% |
||||||||||||||||||||||||||||||
| Demand deposits | 2,529,927 | 2,356,758 | 2,010,694 | 1,864,456 | 1,700,390 | |||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 90,538 | 86,308 | 80,810 | 69,076 | 78,108 | |||||||||||||||||||||||||||||||||||||||||||||
| Stockholders’ equity | 854,327 | 814,565 | 750,113 | 658,969 | 627,594 | |||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 9,729,559 | $ | 9,869,282 | $ | 9,256,864 | $ | 8,522,602 | $ | 8,209,190 | ||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 98,155 | $ | 101,285 | $ | 96,987 | $ | 90,778 | $ | 88,372 | ||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 4.27 | % | 4.27 | % | 4.36 | % | 4.49 | % | 4.54 | % | ||||||||||||||||||||||||||||||||||||||||
| (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. |