Texas Capital Bancshares, Inc. (Nasdaq:TCBI), the parent company of
Texas Capital Bank, announced earnings and operating results for
the second quarter of 2014.
- Loans held for investment, excluding mortgage finance,
increased 3% and total loans increased 11% on a linked quarter
basis, growing 22% and 24%, respectively, from the second quarter
of 2013.
- Mortgage finance loans increased 38% on a linked quarter basis
and 30% from the second quarter of 2013.
- Demand deposits increased 21% and total deposits increased 11%
on a linked quarter basis, growing 43% and 35%, respectively, from
the second quarter of 2013.
- Net income increased 18% on a linked quarter basis and
increased 39% from the second quarter of 2013.
- EPS increased 18% on a linked quarter basis and increased 37%
from the second quarter of 2013.
"We are pleased to report another quarter of strong operating
results with solid growth in both loans and deposits. Our success
continues to result from leveraging our recruiting efforts and
ability to increase market share," said Keith Cargill, President
and CEO. "Our business model is producing growth and earnings for
our shareholders in a challenging rate and regulatory environment,
while positioning us to take advantage of future increases in
short-term rates."
FINANCIAL
SUMMARY |
(dollars and shares in
thousands) |
|
|
|
|
|
Q2
2014 |
Q2
2013 |
%
Change |
QUARTERLY OPERATING RESULTS(1) |
|
|
|
Net income |
$33,418 |
$24,072 |
39% |
Net income available to common
stockholders |
$30,981 |
$21,634 |
43% |
Diluted EPS |
$.71 |
$.52 |
37% |
ROA |
1.08% |
.95% |
|
ROE |
11.38% |
9.94% |
|
Diluted shares |
43,845 |
41,724 |
|
|
|
|
|
BALANCE SHEET(1) |
|
|
|
Total assets |
$13,532,536 |
$10,977,990 |
23% |
Demand deposits |
4,181,774 |
2,928,735 |
43% |
Total deposits |
10,757,316 |
7,980,598 |
35% |
Loans held for investment |
9,152,715 |
7,510,662 |
22% |
Loans held for investment, mortgage
finance |
3,700,253 |
2,838,234 |
30% |
Total loans |
12,852,968 |
10,348,896 |
24% |
Stockholders' equity |
1,262,816 |
1,034,955 |
22% |
|
|
|
|
(1) Operating results, assets and
loans are reported from continuing operations |
DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income from
continuing operations of $33.4 million and net income available to
common stockholders of $31.0 million for the quarter ended June 30,
2014, compared to $24.1 million and $21.6 million, respectively,
for the same period in 2013. On a fully diluted basis, earnings per
common share from continuing operations were $.71 for the three
months ended June 30, 2014, compared to $.52 for the same period in
2013. The discussion below relates only to continuing
operations.
Return on average common equity ("ROE") was 11.38 percent and
return on average assets was 1.08 percent for the second quarter of
2014, compared to 9.94 percent and .95 percent, respectively, for
the second quarter of 2013.
Net interest income was $115.4 million for the second quarter of
2014, compared to $101.2 million in the second quarter of 2013 and
$108.3 million for the first quarter of 2014. The net interest
margin in the second quarter of 2014 was 3.87 percent, a 32 basis
point decrease from the second quarter of 2013 and a 12 basis point
decrease from the first quarter of 2014. The 12 basis point
decrease in net interest margin from the first quarter of 2014 is
due to the growth in loans with lower yields, primarily due to the
increased proportion of mortgage finance loans to total loans. The
year-over-year decrease in net interest margin is due to the growth
in loans with lower yields, the first full-quarter impact of the
subordinated note offering in January 2014 and the increase in the
average balance of liquidity assets, which includes Federal funds
sold and deposits from other banks, and the growth in loans. The
cost of total deposits and borrowed funds increased slightly to 17
basis points for the second quarter of 2014 compared to 16 basis
points for the second quarter of 2013.
Average loans, excluding mortgage finance loans, for the second
quarter of 2014 were $9.0 billion, an increase of $1.9 billion, or
26 percent, from the second quarter of 2013, and an increase of
$266.3 million, or 3 percent, from the first quarter of 2014.
Average mortgage finance loans for the second quarter of 2014
increased $416.3 million to $2.8 billion compared to the second
quarter of 2013 and increased $795.3 million from the first quarter
of 2014.
Average total deposits for the second quarter of 2014 increased
$1.9 billion from the second quarter of 2013 and increased $469.3
million from the first quarter of 2014. Average demand deposits for
the second quarter of 2014 increased $715.6 million, or 25 percent,
to $3.6 billion from $2.9 billion during the second quarter of 2013
and increased $248.4 million, or 7 percent, from the first quarter
of 2014.
We continued to experience decreasing levels of non-performing
assets in the second quarter of 2014. Credit costs, including the
provision for credit losses and valuation charges related to other
real estate owned ("OREO"), totaled $4.0 million in the second
quarter of 2014 compared to $7.4 million in the second quarter of
2013 and $5.0 million in the first quarter of 2014. We recorded a
$4.0 million provision for credit losses in the second quarter of
2014 compared to $7.0 million in the second quarter of 2013 and
$5.0 million in the first quarter of 2014. The provision for the
second quarter of 2014 was primarily related to the growth in
loans, excluding mortgage finance loans, during the quarter. The
combined reserve at June 30, 2014 decreased to 1.06 percent of
loans excluding mortgage finance loans due to continuing loan
growth, as compared to 1.11 percent at June 30, 2013 and 1.07
percent at March 31, 2014. 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 second quarter of 2014, net
charge-offs were $2.5 million compared to net charge-offs of $2.4
million in the second quarter of 2013 and net charge-offs of $2.1
million in the first quarter of 2014. Non-accrual loans were $41.6
million, or .45 percent of loans excluding mortgage finance loans
as of June 30, 2014, $38.5 million, or .51 percent, as of June 30,
2013 and $43.2 million, or .48 percent, as of March 31, 2014. At
June 30, 2014, total OREO was $685,000 compared to $13.1 million as
of June 30, 2013, and $2.4 million as of March 31, 2014. The OREO
balance of $685,000 at June 30, 2014 does not include a valuation
allowance. There was no valuation charge for OREO reflected in
non-interest expense in the second quarter of 2014 compared to
$383,000 in the second quarter of 2013 and none in the first
quarter of 2014.
Non-interest income decreased $595,000, or 5 percent, during the
second quarter of 2014 compared to the same period of 2013
primarily related to a $1.4 million decrease in brokered loan fees
as a result of lower per loan fees during the second quarter
of 2014 as compared to the second quarter of 2013. Swap fee income
decreased $571,000 during the second quarter of 2014 compared to
the same period of 2013. These fees fluctuate from quarter to
quarter based on the number and volume of transactions closed
during the quarter. Offsetting these decreases was a $1.4 million
increase in other non-interest income during the second quarter
2014.
Non-interest expense for the second quarter of 2014 increased
$1.1 million, or 1 percent, to $69.8 million from $68.7 million in
the second quarter of 2013. The increase is primarily related to a
$2.5 million increase in legal and professional expense due to
general business growth, including additional regulatory costs.
FDIC insurance assessment increased $1.8 million to $2.5 million in
the second quarter of 2014 as a result of the higher rates applied
to banks with over $10 billion in assets. Communications and data
processing expense increased $1.0 million to $4.4 million in the
second quarter of 2014 due to general business growth. Offsetting
these increases was a $5.3 million decrease in salaries and
employee benefits for the second quarter of 2014, as compared to
the second quarter of 2013 included expenses of $7.7 million
related to the succession announced last year.
Stockholders' equity increased by 22 percent from $1.0 billion
at June 30, 2013 to $1.3 billion at June 30, 2014, primarily due to
the offering of 1.9 million common shares for net proceeds of
$106.5 million in the first quarter of 2014 and retention of net
income. The Bank is well capitalized under regulatory guidelines
and at June 30, 2014, our ratio of tangible common equity to total
tangible assets was 8.1 percent.
ABOUT TEXAS CAPITAL BANCSHARES, INC.
Texas Capital Bancshares, Inc. (Nasdaq:TCBI), a member of the
Russell 2000® Index and the S&P SmallCap 600®, is the parent
company of Texas Capital Bank, a commercial bank that delivers
highly personalized financial services to businesses and
entrepreneurs. Headquartered in Dallas, the bank has full-service
locations in Austin, Dallas, Fort Worth, Houston and San
Antonio.
This news release may be deemed to include forward-looking
statements which are based on management's current estimates or
expectations of future events or future results. We are under no
obligation, and expressly disclaim such obligation, to update,
alter or revise our forward-looking statements, whether as a result
of new information, future events, or otherwise. A number of
factors, many of which are beyond our control, could cause actual
results to differ materially from future results expressed or
implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, deterioration of the
credit quality of our loan portfolio, increased defaults and loan
losses, 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 our Annual Report
on Form 10-K and in other filings made by Texas Capital with the
Securities and Exchange Commission.
TEXAS CAPITAL BANCSHARES,
INC. |
SELECTED FINANCIAL
HIGHLIGHTS (UNAUDITED) |
(Dollars in thousands except per
share data) |
|
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
|
2014 |
2014 |
2013 |
2013 |
2013 |
CONSOLIDATED STATEMENT OF
INCOME |
|
|
|
|
|
Interest income |
$124,813 |
$116,611 |
$117,965 |
$115,217 |
$107,264 |
Interest expense |
9,406 |
8,296 |
6,490 |
6,441 |
6,044 |
Net interest income |
115,407 |
108,315 |
111,475 |
108,776 |
101,220 |
Provision for credit losses |
4,000 |
5,000 |
5,000 |
5,000 |
7,000 |
Net interest income after provision for
credit losses |
111,407 |
103,315 |
106,475 |
103,776 |
94,220 |
Non-interest income |
10,533 |
10,356 |
11,184 |
10,431 |
11,128 |
Non-interest expense |
69,768 |
69,321 |
70,291 |
62,009 |
68,734 |
Income from continuing operations before
income taxes |
52,172 |
44,350 |
47,368 |
52,198 |
36,614 |
Income tax expense |
18,754 |
16,089 |
17,012 |
18,724 |
12,542 |
Income from continuing operations |
33,418 |
28,261 |
30,356 |
33,474 |
24,072 |
Income (loss) from discontinued operations
(after-tax) |
3 |
4 |
3 |
2 |
1 |
Net income |
33,421 |
28,265 |
30,359 |
33,476 |
24,073 |
Preferred stock dividends |
2,437 |
2,438 |
2,438 |
2,437 |
2,438 |
Net income available to common
stockholders |
$30,984 |
$25,827 |
$27,921 |
$31,039 |
$21,635 |
Diluted EPS from continuing operations |
$.71 |
$.60 |
$.67 |
$.74 |
$.52 |
Diluted EPS |
$.71 |
$.60 |
$.67 |
$.74 |
$.52 |
|
|
|
|
|
|
Diluted shares |
43,845,015 |
43,219,961 |
41,888,768 |
41,791,674 |
41,723,525 |
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEET
DATA |
|
|
|
|
|
Total assets |
$13,532,536 |
$12,143,296 |
$11,714,397 |
$10,797,448 |
$10,977,990 |
Loans held for investment |
9,152,715 |
8,928,033 |
8,486,309 |
8,051,328 |
7,510,662 |
Loans held for investment, mortgage
finance |
3,700,253 |
2,688,044 |
2,784,265 |
2,262,085 |
2,838,234 |
Securities |
49,330 |
52,960 |
63,214 |
67,815 |
75,861 |
Demand deposits |
4,181,774 |
3,451,294 |
3,347,567 |
3,242,060 |
2,928,735 |
Total deposits |
10,757,316 |
9,729,128 |
9,257,379 |
8,957,081 |
7,980,598 |
Other borrowings |
1,000,548 |
678,026 |
1,025,630 |
449,724 |
1,634,630 |
Subordinated notes |
286,000 |
286,000 |
111,000 |
111,000 |
111,000 |
Long-term debt |
113,406 |
113,406 |
113,406 |
113,406 |
113,406 |
Stockholders' equity |
1,262,816 |
1,230,131 |
1,096,350 |
1,066,629 |
1,034,955 |
|
|
|
|
|
|
End of period shares outstanding |
43,105,444 |
42,958,803 |
41,036,370 |
40,934,623 |
40,862,481 |
Book value (excluding securities
gains/losses) |
$25.78 |
$25.11 |
$23.02 |
$22.35 |
$21.60 |
Tangible book value (excluding securities
gains/losses)(1) |
$25.29 |
$24.62 |
$22.50 |
$21.82 |
$21.08 |
|
|
|
|
|
|
SELECTED FINANCIAL
RATIOS |
|
|
|
|
|
Net interest margin |
3.87% |
3.99% |
4.21% |
4.21% |
4.19% |
Return on average assets |
1.08% |
1.01% |
1.10% |
1.25% |
0.95% |
Return on average common equity |
11.38% |
10.20% |
11.94% |
13.74% |
9.94% |
Non-interest income to earning assets |
.35% |
.38% |
.42% |
.40% |
.46% |
Efficiency ratio(2) |
55.4% |
58.4% |
57.3% |
52.0% |
61.2% |
Efficiency ratio (excluding OREO
valuation/write-down)(3) |
55.4% |
58.4% |
56.9% |
52.0% |
60.8% |
Non-interest expense to earning assets |
2.34% |
2.55% |
2.65% |
2.40% |
2.84% |
Non-interest expense to earning assets
(excluding OREO valuation charge) |
2.34% |
2.55% |
2.63% |
2.40% |
2.83% |
Tangible common equity to total tangible
assets(4) |
8.1% |
8.7% |
7.9% |
8.3% |
7.9% |
(1) Stockholders' equity
excluding preferred stock and accumulated other comprehensive
income, less goodwill and intangibles, divided by shares
outstanding at period end. |
(2) Non-interest expense
divided by the sum of net interest income and non-interest
income. |
(3) Non-interest expense
excluding OREO valuation/write-down expenses divided by the sum of
net interest income and non-interest income. |
(4) Stockholders' equity
excluding preferred stock and accumulated other comprehensive
income less goodwill and intangibles divided by total assets less
accumulated other comprehensive income and goodwill and
intangibles. |
|
|
TEXAS CAPITAL BANCSHARES,
INC. |
CONSOLIDATED BALANCE
SHEETS (UNAUDITED) |
(Dollars in thousands) |
|
June 30, |
June 30, |
% |
|
2014 |
2013 |
Change |
Assets |
|
|
|
Cash and due from banks |
$116,525 |
$90,992 |
28% |
Interest-bearing deposits |
240,617 |
142,928 |
68% |
Federal funds sold and securities purchased
under resale agreements |
− |
85,120 |
100% |
Securities, available-for-sale |
49,330 |
75,861 |
(35)% |
Loans held for sale from discontinued
operations |
290 |
298 |
(3)% |
Loans held for investment, mortgage
finance |
3,700,253 |
2,838,234 |
30% |
Loans held for investment (net of unearned
income) |
9,152,715 |
7,510,662 |
22% |
Less: Allowance for loan losses |
91,114 |
79,428 |
15% |
Loans held for investment, net |
12,761,854 |
10,269,468 |
24% |
Premises and equipment, net |
15,762 |
11,915 |
32% |
Accrued interest receivable and other
assets |
327,510 |
280,067 |
17% |
Goodwill and intangibles, net |
20,938 |
21,639 |
(3)% |
Total assets |
$13,532,826 |
$10,978,288 |
23% |
|
|
|
|
Liabilities and Stockholders'
Equity |
|
|
|
Liabilities: |
|
|
|
Deposits: |
|
|
|
Non-interest
bearing |
$4,181,774 |
$2,928,735 |
43% |
Interest
bearing |
6,233,357 |
4,702,902 |
33% |
Interest bearing
in foreign branches |
342,185 |
348,961 |
(2)% |
Total deposits |
10,757,316 |
7,980,598 |
35% |
|
|
|
|
Accrued interest payable |
4,671 |
1,023 |
357% |
Other liabilities |
108,069 |
102,676 |
5% |
Federal funds purchased and
repurchase agreements |
300,532 |
334,594 |
(10)% |
Other borrowings |
700,016 |
1,300,036 |
(46)% |
Subordinated notes |
286,000 |
111,000 |
158% |
Trust preferred subordinated
debentures |
113,406 |
113,406 |
-- |
Total liabilities |
12,270,010 |
9,943,333 |
23% |
|
|
|
|
Stockholders' equity: |
|
|
|
Preferred stock, $.01 par
value, $1,000 liquidation value: |
|
|
|
Authorized shares
– 10,000,000 |
|
|
|
Issued shares –
6,000,000 shares issued at June 30, 2014 and 2013 |
150,000 |
150,000 |
− |
Common stock, $.01 par
value: |
|
|
|
Authorized shares
– 100,000,000 |
|
|
|
Issued shares –
43,105,861 and 40,862,898 at June 30, 2014 and 2013,
respectively |
431 |
408 |
6% |
Additional paid-in capital |
557,919 |
445,270 |
25% |
Retained earnings |
552,923 |
437,152 |
26% |
Treasury stock (shares at cost:
417 at June 30, 2014 and 2013) |
(8) |
(8) |
-- |
Accumulated other comprehensive
income, net of taxes |
1,551 |
2,133 |
(27)% |
Total stockholders' equity |
1,262,816 |
1,034,955 |
22% |
Total liabilities and stockholders'
equity |
$13,532,826 |
$10,978,288 |
23% |
|
|
|
|
|
|
|
|
TEXAS CAPITAL BANCSHARES,
INC. |
|
|
|
|
|
CONSOLIDATED STATEMENTS
OF INCOME (UNAUDITED) |
(Dollars in thousands except per
share data) |
|
Three Months Ended |
Six Months Ended |
|
June 30 |
June 30 |
|
2014 |
2013 |
2014 |
2013 |
Interest income |
|
|
|
|
Interest and fees on loans |
$124,234 |
$106,418 |
$240,106 |
$209,600 |
Securities |
471 |
773 |
1,011 |
1,712 |
Federal funds sold |
8 |
13 |
48 |
19 |
Deposits in other banks |
100 |
60 |
259 |
112 |
Total interest income |
124,813 |
107,264 |
241,424 |
211,443 |
Interest expense |
|
|
|
|
Deposits |
4,246 |
3,228 |
8,276 |
6,473 |
Federal funds purchased |
115 |
206 |
210 |
418 |
Repurchase agreements |
4 |
5 |
8 |
9 |
Other borrowings |
181 |
143 |
253 |
356 |
Subordinated notes |
4,241 |
1,829 |
7,720 |
3,658 |
Trust preferred subordinated debentures |
619 |
633 |
1,235 |
1,267 |
Total interest expense |
9,406 |
6,044 |
17,702 |
12,181 |
Net interest income |
115,407 |
101,220 |
223,722 |
199,262 |
Provision for credit
losses |
4,000 |
7,000 |
9,000 |
9,000 |
Net interest income after provision
for credit losses |
111,407 |
94,220 |
214,722 |
190,262 |
Non-interest income |
|
|
|
|
Service charges on deposit accounts |
1,764 |
1,749 |
3,460 |
3,450 |
Trust fee income |
1,242 |
1,269 |
2,524 |
2,510 |
Bank owned life insurance (BOLI) income |
521 |
463 |
1,030 |
961 |
Brokered loan fees |
3,357 |
4,778 |
6,181 |
9,522 |
Swap fees |
410 |
981 |
1,634 |
2,633 |
Other |
3,239 |
1,888 |
6,060 |
3,333 |
Total non-interest income |
10,533 |
11,128 |
20,889 |
22,409 |
Non-interest expense |
|
|
|
|
Salaries and employee benefits |
39,896 |
45,191 |
81,952 |
78,732 |
Net occupancy expense |
5,073 |
4,135 |
9,841 |
7,992 |
Marketing |
3,795 |
4,074 |
7,554 |
8,046 |
Legal and professional |
7,181 |
4,707 |
12,583 |
8,647 |
Communications and technology |
4,361 |
3,347 |
8,285 |
6,469 |
FDIC insurance assessment |
2,544 |
699 |
5,269 |
1,777 |
Allowance and other carrying costs for
OREO |
11 |
482 |
56 |
912 |
Other |
6,907 |
6,099 |
13,549 |
11,859 |
Total non-interest expense |
69,768 |
68,734 |
139,089 |
124,434 |
Income from continuing operations
before income taxes |
52,172 |
36,614 |
96,522 |
88,237 |
Income tax expense |
18,754 |
12,542 |
34,843 |
31,021 |
Income from continuing
operations |
33,418 |
24,072 |
61,679 |
57,216 |
Income from discontinued operations
(after-tax) |
3 |
1 |
7 |
– |
Net income |
33,421 |
24,073 |
61,686 |
57,216 |
Preferred stock
dividends |
2,437 |
2,438 |
4,875 |
2,519 |
Net income available to common
stockholders |
$30,984 |
$21,635 |
$56,811 |
$54,697 |
|
|
|
|
|
Basic earnings per common
share: |
|
|
|
|
Income from continuing operations |
$.72 |
$.53 |
$1.33 |
$1.34 |
Net income |
$.72 |
$.53 |
$1.33 |
$1.34 |
|
|
|
|
|
Diluted earnings per common
share: |
|
|
|
|
Income from continuing operations |
$.71 |
$.52 |
$1.30 |
$1.31 |
Net income |
$.71 |
$.52 |
$1.30 |
$1.31 |
|
|
|
|
|
|
|
|
|
|
TEXAS CAPITAL BANCSHARES,
INC. |
SUMMARY OF LOAN LOSS
EXPERIENCE |
(Dollars in thousands) |
|
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
|
2014 |
2014 |
2013 |
2013 |
2013 |
Reserve for loan losses: |
|
|
|
|
|
Beginning balance |
$90,234 |
$87,604 |
$84,006 |
$79,428 |
$75,000 |
Loans charged-off: |
|
|
|
|
|
Commercial |
5,190 |
2,336 |
1,605 |
496 |
2,826 |
Real estate – term |
246 |
50 |
– |
13 |
26 |
Consumer |
40 |
61 |
– |
– |
26 |
Leases |
– |
– |
– |
2 |
– |
Total loans charged-off |
5,476 |
2,447 |
1,605 |
511 |
2,878 |
Recoveries: |
|
|
|
|
|
Commercial |
2,940 |
210 |
225 |
233 |
348 |
Real estate – term |
35 |
8 |
60 |
195 |
7 |
Consumer |
6 |
25 |
9 |
19 |
15 |
Leases |
18 |
124 |
43 |
18 |
140 |
Total recoveries |
2,999 |
367 |
337 |
465 |
510 |
Net charge-offs |
2,477 |
2,080 |
1,268 |
46 |
2,368 |
Provision for loan losses |
3,357 |
4,710 |
4,866 |
4,624 |
6,796 |
Ending balance |
$91,114 |
$90,234 |
$87,604 |
$84,006 |
$79,428 |
|
|
|
|
|
|
Reserve for off-balance sheet credit
losses: |
|
|
|
|
|
Beginning balance |
$4,980 |
$4,690 |
$4,556 |
$4,180 |
$3,976 |
Provision for off-balance sheet credit
losses |
643 |
290 |
134 |
376 |
204 |
Ending balance |
$5,623 |
$4,980 |
$4,690 |
$4,556 |
$4,180 |
|
|
|
|
|
|
Total reserves for credit losses |
$96,737 |
$95,214 |
$92,294 |
$88,562 |
$83,608 |
|
|
|
|
|
|
Total provision for credit losses |
$4,000 |
$5,000 |
$5,000 |
$5,000 |
$7,000 |
|
|
|
|
|
|
Reserve to loans |
.71% |
.78% |
.78% |
.81% |
.77% |
Reserve to loans excluding mortgage finance
loans(2) |
1.00% |
1.01% |
1.03% |
1.04% |
1.06% |
Reserve to average loans |
.77% |
.84% |
.84% |
.83% |
.83% |
Reserve to average loans excluding mortgage
finance loans(2) |
1.01% |
1.04% |
1.08% |
1.09% |
1.11% |
Net charge-offs to average loans(1) |
.08% |
.08% |
.05% |
.00% |
.10% |
Net charge-offs to average loans excluding
mortgage finance loans(1)(2) |
.11% |
.10% |
.06% |
.00% |
.13% |
Net charge-offs to average loans for last
twelve months(1) |
.06% |
.06% |
.05% |
.07% |
.09% |
Net charge-offs to average loans, excluding
mortgage finance loans, for last twelve months(1)(2) |
.07% |
.07% |
.07% |
.10% |
.12% |
Total provision for credit losses to average
loans(1) |
.14% |
.19% |
.19% |
.20% |
.29% |
Total provision for credit losses to average
loans excluding mortgage finance loans(1)(2) |
.18% |
.23% |
.24% |
.26% |
.39% |
Combined reserves for credit losses to
loans |
.75% |
.82% |
.82% |
.86% |
.81% |
Combined reserves for credit losses to loans,
excluding mortgage finance loans(2) |
1.06% |
1.07% |
1.09% |
1.10% |
1.11% |
|
|
|
|
|
|
Non-performing assets (NPAs): |
|
|
|
|
|
Non-accrual loans |
$41,565 |
$43,213 |
$32,375 |
$35,737 |
$38,450 |
Other real estate owned
(OREO) |
685 |
2,420 |
5,110 |
12,805 |
13,053 |
Other repossessed assets |
– |
– |
– |
– |
19 |
Total |
$42,250 |
$45,633 |
$37,485 |
$48,542 |
$51,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
|
2014 |
2013 |
2013 |
2013 |
2013 |
|
|
|
|
|
|
Non-accrual loans to loans |
.32% |
.37% |
.29% |
.35% |
.37% |
Non-accrual loans to loans excluding mortgage
finance loans(2) |
.45% |
.48% |
.38% |
.44% |
.51% |
Total NPAs to loans plus OREO |
.33% |
.39% |
.33% |
.47% |
.50% |
Total NPAs to loans excluding mortgage
finance loans plus OREO(2) |
.46% |
.51% |
.44% |
.60% |
.68% |
Total NPAs to earning assets |
.33% |
.39% |
.33% |
.47% |
.49% |
Reserve for loan losses to non-accrual
loans |
2.2x |
2.1x |
2.7x |
2.4x |
2.1x |
|
|
|
|
|
|
Restructured loans |
$249 |
$2,825 |
$1,935 |
$4,691 |
$4,765 |
Loans past due 90 days and still
accruing(3) |
$4,793 |
$7,869 |
$9,325 |
$7,510 |
$7,633 |
|
|
|
|
|
|
Loans past due 90 days to loans |
.04% |
.07% |
.08% |
.07% |
.07% |
Loans past due 90 days to loans excluding
mortgage finance loans(2) |
.05% |
.09% |
.11% |
.09% |
.10% |
|
|
|
|
|
|
(1) Interim period ratios are
annualized. |
(2) Mortgage finance loans were
previously classified as loans held for sale but have been
reclassified as loans held for investment. The indicated ratios are
presented with and excluding the mortgage finance loans because the
risk profile of our mortgage finance loans is different than our
other loans held for investment. No provision for credit losses is
allocated to these loans based on the internal risk grade
assigned. |
(3) At June 30, 2014, loans past due 90
days and still accruing includes premium finance loans of $4.6
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. |
|
TEXAS CAPITAL BANCSHARES,
INC. |
CONSOLIDATED STATEMENT OF
INCOME (UNAUDITED) |
(Dollars in thousands) |
|
|
|
|
|
|
|
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
|
2014 |
2014 |
2013 |
2013 |
2013 |
Interest income |
|
|
|
|
|
Interest and fees on loans |
$124,234 |
$115,872 |
$117,261 |
$114,453 |
$106,418 |
Securities |
471 |
540 |
621 |
682 |
773 |
Federal funds sold |
8 |
40 |
24 |
22 |
13 |
Deposits in other banks |
100 |
159 |
59 |
60 |
60 |
Total interest income |
124,813 |
116,611 |
117,965 |
115,217 |
107,264 |
Interest expense |
|
|
|
|
|
Deposits |
4,246 |
4,030 |
3,858 |
3,699 |
3,228 |
Federal funds purchased |
115 |
95 |
116 |
152 |
206 |
Repurchase agreements |
4 |
4 |
5 |
4 |
5 |
Other borrowings |
181 |
72 |
40 |
119 |
143 |
Subordinated notes |
4,241 |
3,479 |
1,840 |
1,829 |
1,829 |
Trust preferred subordinated debentures |
619 |
616 |
631 |
638 |
633 |
Total interest expense |
9,406 |
8,296 |
6,490 |
6,441 |
6,044 |
Net interest income |
115,407 |
108,315 |
111,475 |
108,776 |
101,220 |
Provision for credit
losses |
4,000 |
5,000 |
5,000 |
5,000 |
7,000 |
Net interest income after provision
for credit losses |
111,407 |
103,315 |
106,475 |
103,776 |
94,220 |
Non-interest income |
|
|
|
|
|
Service charges on deposit accounts |
1,764 |
1,696 |
1,674 |
1,659 |
1,749 |
Trust fee income |
1,242 |
1,282 |
1,250 |
1,263 |
1,269 |
Bank owned life insurance (BOLI) income |
521 |
509 |
533 |
423 |
463 |
Brokered loan fees |
3,357 |
2,824 |
3,380 |
4,078 |
4,778 |
Swap fees |
410 |
1,224 |
1,904 |
983 |
981 |
Other |
3,239 |
2,821 |
2,443 |
2,025 |
1,888 |
Total non-interest income |
10,533 |
10,356 |
11,184 |
10,431 |
11,128 |
Non-interest expense |
|
|
|
|
|
Salaries and employee benefits |
39,896 |
42,056 |
43,008 |
36,012 |
45,191 |
Net occupancy expense |
5,073 |
4,768 |
4,487 |
4,342 |
4,135 |
Marketing |
3,795 |
3,759 |
4,183 |
3,974 |
4,074 |
Legal and professional |
7,181 |
5,402 |
5,520 |
3,937 |
4,707 |
Communications and technology |
4,361 |
3,924 |
3,597 |
3,696 |
3,347 |
FDIC insurance assessment |
2,544 |
2,725 |
1,923 |
4,357 |
699 |
Allowance and other carrying costs for
OREO |
11 |
45 |
609 |
267 |
482 |
Litigation settlement expense |
– |
– |
– |
(908) |
– |
Other |
6,907 |
6,642 |
6,964 |
6,332 |
6,099 |
Total non-interest expense |
69,768 |
69,321 |
70,291 |
62,009 |
68,734 |
Income from continuing operations
before income taxes |
52,172 |
44,350 |
47,368 |
52,198 |
36,614 |
Income tax expense |
18,754 |
16,089 |
17,012 |
18,724 |
12,542 |
Income from continuing
operations |
33,418 |
28,261 |
30,356 |
33,474 |
24,072 |
Income (loss) from discontinued
operations (after-tax) |
3 |
4 |
3 |
2 |
1 |
Net income |
33,421 |
28,265 |
30,359 |
33,476 |
24,073 |
Preferred stock
dividends |
2,437 |
2,438 |
2,438 |
2,437 |
2,438 |
Net income available to common
shareholders |
$30,984 |
$25,827 |
$27,921 |
$31,039 |
$21,635 |
|
|
|
|
|
|
|
|
|
|
|
|
TEXAS CAPITAL
BANCSHARES, INC. |
QUARTERLY FINANCIAL
SUMMARY – UNAUDITED |
Consolidated Daily Average
Balances, Average Yields and Rates |
Continuing Operations |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd Quarter
2014 |
1st Quarter
2014 |
4th Quarter
2013 |
3rd Quarter
2013 |
2nd Quarter
2013 |
|
Average |
Revenue/ |
Yield/ |
Average |
Revenue/ |
Yield/ |
Average |
Revenue/ |
Yield/ |
Average |
Revenue/ |
Yield/ |
Average |
Revenue/ |
Yield/ |
|
Balance |
Expense (1) |
Rate |
Balance |
Expense (1) |
Rate |
Balance |
Expense (1) |
Rate |
Balance |
Expense (1) |
Rate |
Balance |
Expense (1) |
Rate |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities – Taxable |
$44,216 |
$410 |
3.72% |
$47,027 |
$442 |
3.81% |
$50,281 |
$480 |
3.79% |
$54,838 |
$522 |
3.78% |
$60,063 |
$594 |
3.97% |
Securities – Non-taxable(2) |
6,271 |
94 |
6.01% |
10,554 |
151 |
5.80% |
14,786 |
217 |
5.82% |
16,879 |
246 |
5.78% |
18,843 |
275 |
5.85% |
Federal funds sold and securities purchased
under resale agreements |
14,997 |
8 |
0.21% |
73,746 |
40 |
0.22% |
59,409 |
24 |
0.16% |
78,896 |
22 |
0.11% |
54,448 |
13 |
0.10% |
Deposits in other banks |
183,061 |
100 |
0.22% |
230,296 |
159 |
0.28% |
99,185 |
59 |
0.24% |
88,717 |
60 |
0.27% |
91,177 |
60 |
0.26% |
Loans held for investment, mortgage finance
loans |
2,822,560 |
23,231 |
3.30% |
2,027,264 |
16,782 |
3.36% |
2,238,730 |
20,236 |
3.59% |
2,362,118 |
22,547 |
3.79% |
2,406,246 |
22,440 |
3.74% |
Loans held for investment |
8,984,230 |
101,003 |
4.51% |
8,717,969 |
99,090 |
4.61% |
8,142,569 |
97,025 |
4.73% |
7,731,901 |
91,906 |
4.72% |
7,152,323 |
83,978 |
4.71% |
Less reserve for loan losses |
90,105 |
– |
– |
87,686 |
– |
– |
84,009 |
– |
– |
79,551 |
– |
– |
75,006 |
– |
– |
Loans, net of reserve |
11,716,685 |
124,234 |
4.25% |
10,657,547 |
115,872 |
4.41% |
10,297,290 |
117,261 |
4.52% |
10,014,468 |
114,453 |
4.53% |
9,483,563 |
106,418 |
4.50% |
Total earning assets |
11,965,230 |
124,846 |
4.19% |
11,019,170 |
116,664 |
4.29% |
10,520,951 |
118,041 |
4.45% |
10,253,798 |
115,303 |
4.46% |
9,708,094 |
107,360 |
4.44% |
Cash and other assets |
396,938 |
|
|
382,198 |
|
|
378,315 |
|
|
383,968 |
|
|
402,898 |
|
|
Total assets |
$12,362,168 |
|
|
$11,401,368 |
|
|
$10,899,266 |
|
|
$10,637,766 |
|
|
$10,110,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction deposits |
$895,827 |
$170 |
0.08% |
$782,301 |
$80 |
0.04% |
$787,720 |
$76 |
0.04% |
$794,630 |
$102 |
0.05% |
$1,051,199 |
$233 |
0.09% |
Savings deposits |
4,679,140 |
3,395 |
0.29% |
4,591,493 |
3,304 |
0.29% |
4,365,746 |
3,079 |
0.28% |
4,057,792 |
2,863 |
0.28% |
3,340,420 |
2,292 |
0.28% |
Time deposits |
401,024 |
390 |
0.39% |
375,563 |
351 |
0.38% |
385,546 |
394 |
0.41% |
402,920 |
414 |
0.41% |
397,868 |
407 |
0.41% |
Deposits in foreign branches |
350,043 |
291 |
0.33% |
355,857 |
295 |
0.34% |
348,240 |
309 |
0.35% |
357,532 |
320 |
0.36% |
340,713 |
296 |
0.35% |
Total interest bearing deposits |
6,326,034 |
4,246 |
0.27% |
6,105,214 |
4,030 |
0.27% |
5,887,252 |
3,858 |
0.26% |
5,612,874 |
3,699 |
0.26% |
5,130,200 |
3,228 |
0.25% |
Other borrowings |
666,405 |
300 |
0.18% |
293,012 |
171 |
0.24% |
314,018 |
161 |
0.20% |
539,767 |
275 |
0.20% |
727,158 |
354 |
0.20% |
Subordinated notes |
286,000 |
4,241 |
5.95% |
227,667 |
3,479 |
6.20% |
111,000 |
1,840 |
6.58% |
111,000 |
1,829 |
6.54% |
111,000 |
1,829 |
6.61% |
Trust preferred subordinated debentures |
113,406 |
619 |
2.19% |
113,406 |
616 |
2.20% |
113,406 |
631 |
2.21% |
113,406 |
638 |
2.23% |
113,406 |
633 |
2.24% |
Total interest bearing liabilities |
7,391,845 |
9,406 |
0.51% |
6,739,299 |
8,296 |
0.50% |
6,425,676 |
6,490 |
0.40% |
6,377,047 |
6,441 |
0.40% |
6,081,764 |
6,044 |
0.40% |
Demand deposits |
3,629,941 |
|
|
3,381,501 |
|
|
3,289,307 |
|
|
3,124,602 |
|
|
2,914,341 |
|
|
Other liabilities |
98,595 |
|
|
103,514 |
|
|
106,461 |
|
|
89,640 |
|
|
91,608 |
|
|
Stockholders' equity |
1,241,787 |
|
|
1,177,054 |
|
|
1,077,822 |
|
|
1,046,477 |
|
|
1,023,279 |
|
|
Total liabilities and stockholders'
equity |
$12,362,168 |
|
|
$11,401,368 |
|
|
$10,899,266 |
|
|
$10,637,766 |
|
|
$10,110,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income(2) |
|
$115,440 |
|
|
$108,368 |
|
|
$111,551 |
|
|
$108,862 |
|
|
$101,316 |
|
Net interest margin |
|
|
3.87% |
|
|
3.99% |
|
|
4.21% |
|
|
4.21% |
|
|
4.19% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
CONTACT: MEDIA & INVESTOR CONTACT
Heather Worley, 214.932.6646
heather.worley@texascapitalbank.com
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