Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - TEXAS CAPITAL BANCSHARES INC/TX | d385041d8k.htm |
| EX-99.2 - PRESENTATION - TEXAS CAPITAL BANCSHARES INC/TX | d385041dex992.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
July 25, 2012
INVESTOR CONTACT
Myrna Vance, 214.932.6646
myrna.vance@texascapitalbank.com
TEXAS CAPITAL BANCSHARES ANNOUNCES OPERATING RESULTS FOR Q2 2012
DALLAS – July 25, 2012 – Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the second quarter of 2012.
| • | Net income increased 9% on a linked quarter basis and increased 77% from Q2 2011 |
| • | EPS increased 9% on a linked quarter basis and increased 73% for the second quarter of 2012 as compared to the same quarter of 2011 |
| • | Demand deposits increased 15% and total deposits increased 10% on a linked quarter basis and grew 36% and 23%, respectively, from Q2 2011 |
| • | Loans held for investment increased 8% and total loans increased 7% on a linked quarter basis; and grew 21% and 37%, respectively, from Q2 2011 |
“This has been another outstanding quarter for Texas Capital,” said George Jones, CEO. “Along with achieving dramatic improvements in ROE and ROA, we experienced good growth in total loans, deposits and earnings and have a strong pipeline in place to continue that trend.”
FINANCIAL SUMMARY
(dollars and shares in thousands)
| Q2 2012 | Q2 2011 | % Change | ||||||||||
| QUARTERLY OPERATING RESULTS(1) |
||||||||||||
| Net Income |
$ | 29,623 | $ | 16,708 | 77 | % | ||||||
| Diluted EPS |
$ | .76 | $ | .44 | 73 | % | ||||||
| ROA |
1.40 | % | 1.08 | % | ||||||||
| ROE |
18.08 | % | 12.13 | % | ||||||||
| Diluted Shares |
39,142 | 38,333 | ||||||||||
| BALANCE SHEET(1) |
||||||||||||
| Total Assets |
$ | 9,144,360 | $ | 6,709,338 | 36 | % | ||||||
| Demand Deposits |
2,019,473 | 1,483,159 | 36 | % | ||||||||
| Total Deposits |
6,660,290 | 5,421,726 | 23 | % | ||||||||
| Loans Held for Investment |
6,234,692 | 5,164,293 | 21 | % | ||||||||
| Total Loans |
8,642,724 | 6,286,623 | 37 | % | ||||||||
| Stockholders’ Equity |
680,705 | 563,924 | 21 | % | ||||||||
| (1) | Operating results, assets and loans are reporting from continuing operations |
DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income from continuing operations of $29.6 million for the quarter ended June 30, 2012 compared to $16.7 million for the second quarter of 2011. On a fully diluted basis, earnings per common share from continuing operations were $.76 for the three months ended June 30, 2012, compared to $.44 for the same period last year. The discussion below relates only to continuing operations.
Return on average equity was 18.08 percent and return on average assets was 1.40 percent for the second quarter of 2012, compared to 12.13 percent and 1.08 percent, respectively, for the second quarter of 2011.
Net interest income was $90.6 million for the second quarter of 2012, compared to $88.2 million in the first quarter of 2012 and $71.1 million for the second quarter of 2011. The net interest margin in the second quarter of 2012 was 4.49 percent, a 37 basis point decrease from the second quarter of 2011 and a 5 basis point decrease from the first quarter of 2012. The year over year decrease in net interest margin is due to the growth in loans with incremental yields that are less than the prior year net interest margin with an offsetting benefit of the reduction in funding costs. The growth in loans more than compensated for the reduction in yields and produced the strong growth in net interest income.
Average loans held for investment for the second quarter of 2012 were $6.0 billion, an increase of $1.1 billion from the second quarter of 2011 and an increase of $289.9 million from the first quarter of 2012. Average loans held for sale for the second quarter of 2012 increased $1.3 billion compared to the second quarter of 2011 and increased $25.8 million from the first quarter of 2012.
Average total deposits for the second quarter of 2012 increased $999.7 million from the second quarter of 2011 and increased $417.2 million from the first quarter of 2012. For the same periods, the average balance of demand deposits increased $409.1 million, or 28 percent, to $1.9 billion from $1.5 billion during the second quarter of 2011 and increased $164.1 million, or 10 percent, from the first quarter of 2012.
In the second quarter of 2012, we experienced decreases in the ratios of non-performing assets and credit losses to loans held for investment. Credit costs, including the provision for credit losses and valuation charges related to other real estate owned (“OREO”) totaled $4.1 million in the second quarter of 2012 compared to $8.7 million in the second quarter of 2011 and $5.7 million in the first quarter of 2012. We recorded a $1.0 million provision for credit losses in the second quarter of 2012 compared to $8.0 million in the second quarter of 2011 and $3.0 million in the first quarter of 2012. At June 30, 2012, the combined reserve decreased to 1.21 percent of loans held for investment as compared to 1.34 percent at June 30, 2011 and 1.29 percent at March 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 second quarter of 2012, net charge-offs were $533,000, compared to net charge-offs of $10.5 million in the second quarter of 2011 and net charge-offs of $828,000 in the first quarter of 2012. Non-accrual loans were $56.4 million, or .91 percent of loans held for investment at the end of the second quarter of 2012, $77.9 million, or 1.51 percent, at the end of the second quarter of 2011 and $50.2 million, or .87 percent, at the end of the first quarter 2012. At June 30, 2012, total OREO was $27.9 million compared to $27.3 million at the end of the second quarter of 2011, and $32.6 million at the end of the first quarter of 2012. The OREO balance of $27.9 million at June 30, 2012 is stated net of a $9.0 million valuation allowance. The valuation charge for OREO reflected in non-interest expense was $3.1 million in the second quarter of 2012 compared to $725,000 in the second quarter of 2011 and $2.7 million in the first quarter of 2012. We realized a profit of $433,000 on sales of OREO during the second quarter of 2012, which is included in non-interest income, but offsets the OREO valuation expense of $3.1 million included in non-interest expense during the quarter.
Non-interest income increased $2.5 million during the second quarter of 2012, or 32 percent, compared to the same period of 2011 primarily related to a $1.6 million increase in brokered loan fees earned in the mortgage warehouse lending division.
2
Non-interest expense for the second quarter of 2012 increased $8.7 million, or 19 percent, to $54.0 million from $45.3 million in the second quarter of 2011. The increase is primarily related to a $6.1 million increase in salaries and employee benefits to $30.2 million from $24.1 million, which was primarily due to general business growth and costs of performance-based incentives resulting from the increase in stock price. Allowance and other carrying costs for OREO expense increased $2.8 million to $3.8 million, which included a $3.1 million valuation expense during the second quarter of 2012. Of the $3.1 million valuation expense in the second quarter of 2012, $2.7 million related to increasing the valuation allowance and $423,000 related to direct write-downs of the OREO balance, compared to $725,000 related to direct write-downs in the same period of 2011.
Stockholders’ equity increased by 21 percent from $563.9 million at June 30, 2011 to $680.7 million at June 30, 2012, primarily related to retained net income. The Bank is well capitalized under regulatory guidelines and at June 30, 2012, the Company’s ratio of tangible common equity to total tangible assets was 7.2 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 news release may be deemed to include forward-looking statements which are based on Texas Capital’s current estimates or expectations of future events or future results. Texas Capital is under no obligation, and expressly disclaims such obligation, to update, alter or revise its forward-looking statements, whether as a result of new information, future events, or otherwise. A number of factors, many of which are beyond Texas Capital’s 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, 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 prospectus supplement relating to the offering and the Annual Report on Form 10-K and other filings made by Texas Capital with the Securities and Exchange Commission (SEC).
This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.
3
TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
| 2nd Quarter 2012 |
1st Quarter 2012 |
4th Quarter 2011 |
3rd Quarter 2011 |
2nd Quarter 2011 |
||||||||||||||||
| CONSOLIDATED STATEMENT OF INCOME |
||||||||||||||||||||
| Interest income |
$ | 95,546 | $ | 93,131 | $ | 92,967 | $ | 83,263 | $ | 75,259 | ||||||||||
| Interest expense |
4,906 | 4,902 | 4,820 | 4,065 | 4,165 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income |
90,640 | 88,229 | 88,147 | 79,198 | 71,094 | |||||||||||||||
| Provision for credit losses |
1,000 | 3,000 | 6,000 | 7,000 | 8,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income after provision for credit losses |
89,640 | 85,229 | 82,147 | 72,198 | 63,094 | |||||||||||||||
| Non-interest income |
10,462 | 9,190 | 8,994 | 7,603 | 7,951 | |||||||||||||||
| Non-interest expense |
53,973 | 52,276 | 50,353 | 46,186 | 45,263 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income from continuing operations before income taxes |
46,129 | 42,143 | 40,788 | 33,615 | 25,782 | |||||||||||||||
| Income tax expense |
16,506 | 15,062 | 15,043 | 11,905 | 9,074 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income from continuing operations |
29,623 | 27,081 | 25,745 | 21,710 | 16,708 | |||||||||||||||
| Income (loss) from discontinued operations (after-tax) |
(1 | ) | 4 | (5 | ) | (7 | ) | (54 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income |
$ | 29,622 | $ | 27,085 | $ | 25,740 | $ | 21,703 | $ | 16,654 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Diluted EPS from continuing operations |
$ | .76 | $ | .70 | $ | .67 | $ | .56 | $ | .44 | ||||||||||
| Diluted EPS |
$ | .76 | $ | .70 | $ | .67 | $ | .56 | $ | .43 | ||||||||||
| Diluted shares |
39,141,544 | 38,914,241 | 38,609,094 | 38,435,386 | 38,332,888 | |||||||||||||||
| CONSOLIDATED BALANCE SHEET DATA |
||||||||||||||||||||
| Total assets |
$ | 9,144,360 | $ | 8,559,917 | $ | 8,137,225 | $ | 7,705,372 | $ | 6,709,338 | ||||||||||
| Loans held for investment |
6,234,692 | 5,792,349 | 5,572,371 | 5,302,584 | 5,164,293 | |||||||||||||||
| Loans held for sale |
2,408,032 | 2,255,281 | 2,080,081 | 1,909,567 | 1,122,330 | |||||||||||||||
| Securities |
114,964 | 123,828 | 143,710 | 142,895 | 157,821 | |||||||||||||||
| Demand deposits |
2,019,473 | 1,751,443 | 1,751,944 | 1,661,125 | 1,483,159 | |||||||||||||||
| Total deposits |
6,660,290 | 6,063,558 | 5,556,257 | 5,486,463 | 5,421,726 | |||||||||||||||
| Other borrowings |
1,609,039 | 1,657,728 | 1,768,116 | 1,451,894 | 561,902 | |||||||||||||||
| Long-term debt |
113,406 | 113,406 | 113,406 | 113,406 | 113,406 | |||||||||||||||
| Stockholders’ equity |
680,705 | 647,341 | 616,331 | 587,944 | 563,924 | |||||||||||||||
| End of period shares outstanding |
38,114,012 | 37,912,054 | 37,666,291 | 37,457,762 | 37,329,726 | |||||||||||||||
| Book value (excluding securities gains/losses) |
$ | 17.75 | $ | 16.96 | $ | 16.24 | $ | 15.56 | $ | 14.97 | ||||||||||
| Tangible book value (excluding securities gains/losses) |
$ | 17.22 | $ | 16.42 | $ | 15.69 | $ | 15.01 | $ | 14.41 | ||||||||||
| SELECTED FINANCIAL RATIOS |
||||||||||||||||||||
| From continuing operations |
||||||||||||||||||||
| Net interest margin |
4.49 | % | 4.54 | % | 4.60 | % | 4.81 | % | 4.86 | % | ||||||||||
| Return on average assets |
1.40 | % | 1.33 | % | 1.28 | % | 1.25 | % | 1.08 | % | ||||||||||
| Return on average equity |
18.08 | % | 17.36 | % | 17.05 | % | 14.93 | % | 12.13 | % | ||||||||||
| Non-interest income to earning assets |
.52 | % | .47 | % | .47 | % | .46 | % | .54 | % | ||||||||||
| Efficiency ratio |
53.4 | % | 53.7 | % | 51.8 | % | 53.2 | % | 57.3 | % | ||||||||||
| Efficiency ratio (excluding OREO valuation/write-down) |
50.3 | % | 50.8 | % | 50.7 | % | 51.3 | % | 56.3 | % | ||||||||||
| Non-interest expense to earning assets |
2.67 | % | 2.69 | % | 2.62 | % | 2.80 | % | 3.08 | % | ||||||||||
| Non-interest expense to earning assets (excluding OREO valuation charge) |
2.52 | % | 2.55 | % | 2.57 | % | 2.70 | % | 3.03 | % | ||||||||||
| Tangible common equity to total tangible assets |
7.2 | % | 7.3 | % | 7.3 | % | 7.3 | % | 8.0 | % | ||||||||||
| Tier 1 capital ratio |
9.5 | % | 9.5 | % | 9.6 | % | 9.7 | % | 10.2 | % | ||||||||||
| Total capital ratio |
10.5 | % | 10.4 | % | 10.6 | % | 10.7 | % | 11.3 | % | ||||||||||
| Tier 1 leverage ratio |
9.0 | % | 8.9 | % | 8.8 | % | 9.8 | % | 10.5 | % | ||||||||||
4
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
| June 30, 2012 |
June 30, 2011 |
% Change |
||||||||||
| Assets |
||||||||||||
| Cash and due from banks |
$ | 93,377 | $ | 70,751 | 32 | % | ||||||
| Interest-bearing deposits |
49,254 | 18,575 | 165 | % | ||||||||
| Federal funds sold |
20 | — | 100 | % | ||||||||
| Securities, available-for-sale |
114,964 | 157,821 | (27 | )% | ||||||||
| Loans held for sale |
2,408,032 | 1,122,330 | 115 | % | ||||||||
| Loans held for sale from discontinued operations |
388 | 396 | (2 | )% | ||||||||
| Loans held for investment (net of unearned income) |
6,234,692 | 5,164,293 | 21 | % | ||||||||
| Less: Allowance for loan losses |
72,404 | 67,748 | 7 | % | ||||||||
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|
|||||||
| Loans held for investment, net |
6,162,288 | 5,096,545 | 21 | % | ||||||||
| Premises and equipment, net |
12,037 | 12,118 | (1 | )% | ||||||||
| Accrued interest receivable and other assets |
284,207 | 210,406 | 35 | % | ||||||||
| Goodwill and intangibles, net |
20,181 | 20,792 | (3 | )% | ||||||||
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| Total assets |
$ | 9,144,748 | $ | 6,709,734 | 36 | % | ||||||
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|||||||
| Liabilities and Stockholders’ Equity |
||||||||||||
| Liabilities: |
||||||||||||
| Deposits: |
||||||||||||
| Non-interest bearing |
$ | 2,019,473 | $ | 1,483,159 | 36 | % | ||||||
| Interest bearing |
4,230,806 | 3,196,108 | 32 | % | ||||||||
| Interest bearing in foreign branches |
410,011 | 742,459 | (45 | )% | ||||||||
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|
|||||||
| Total deposits |
6,660,290 | 5,421,726 | 23 | % | ||||||||
| Accrued interest payable |
887 | 1,032 | (14 | )% | ||||||||
| Other liabilities |
80,421 | 47,744 | 68 | % | ||||||||
| Federal funds purchased |
271,835 | 203,969 | 33 | % | ||||||||
| Repurchase agreements |
22,148 | 14,634 | 51 | % | ||||||||
| Other borrowings |
1,315,056 | 343,299 | N/M | |||||||||
| Trust preferred subordinated debentures |
113,406 | 113,406 | — | |||||||||
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|
|
|
|
|
|||||||
| Total liabilities |
8,464,043 | 6,145,810 | 38 | % | ||||||||
| 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 – 38,114,429 and 37,330,143 at June 30, 2012 and 2011, respectively |
381 | 373 | 2 | % | ||||||||
| Additional paid-in capital |
357,713 | 343,997 | 4 | % | ||||||||
| Retained earnings |
318,490 | 214,340 | 49 | % | ||||||||
| Treasury stock (shares at cost: 417 at June 30, 2012 and 2011, respectively) |
(8 | ) | (8 | ) | — | |||||||
| Accumulated other comprehensive income, net of taxes |
4,129 | 5,222 | (21 | )% | ||||||||
|
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|
|||||||
| Total stockholders’ equity |
680,705 | 563,924 | 21 | % | ||||||||
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|
|||||||
| Total liabilities and stockholders’ equity |
$ | 9,144,748 | $ | 6,709,734 | 36 | % | ||||||
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5
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
| Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Interest income |
||||||||||||||||
| Interest and fees on loans |
$ | 94,291 | $ | 73,509 | $ | 186,065 | $ | 141,549 | ||||||||
| Securities |
1,203 | 1,680 | 2,510 | 3,526 | ||||||||||||
| Federal funds sold |
4 | 5 | 5 | 33 | ||||||||||||
| Deposits in other banks |
48 | 65 | 97 | 262 | ||||||||||||
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|
|||||||||
| Total interest income |
95,546 | 75,259 | 188,677 | 145,370 | ||||||||||||
| Interest expense |
||||||||||||||||
| Deposits |
3,482 | 3,417 | 6,954 | 8,288 | ||||||||||||
| Federal funds purchased |
240 | 94 | 521 | 201 | ||||||||||||
| Repurchase agreements |
4 | 2 | 7 | 4 | ||||||||||||
| Other borrowings |
492 | 14 | 927 | 14 | ||||||||||||
| Trust preferred subordinated debentures |
688 | 638 | 1,399 | 1,271 | ||||||||||||
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|
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|
|
|||||||||
| Total interest expense |
4,906 | 4,165 | 9,808 | 9,778 | ||||||||||||
|
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|
|
|
|
|
|
|||||||||
| Net interest income |
90,640 | 71,094 | 178,869 | 135,592 | ||||||||||||
| Provision for credit losses |
1,000 | 8,000 | 4,000 | 15,500 | ||||||||||||
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|
|||||||||
| Net interest income after provision for credit losses |
89,640 | 63,094 | 174,869 | 120,092 | ||||||||||||
| Non-interest income |
||||||||||||||||
| Service charges on deposit accounts |
1,624 | 1,608 | 3,228 | 3,391 | ||||||||||||
| Trust fee income |
1,232 | 1,066 | 2,346 | 2,020 | ||||||||||||
| Bank owned life insurance (BOLI) income |
588 | 539 | 1,109 | 1,062 | ||||||||||||
| Brokered loan fees |
4,128 | 2,558 | 7,779 | 5,078 | ||||||||||||
| Equipment rental income |
172 | 676 | 333 | 1,459 | ||||||||||||
| Other |
2,718 | 1,504 | 4,857 | 2,625 | ||||||||||||
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|
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|
|||||||||
| Total non-interest income |
10,462 | 7,951 | 19,652 | 15,635 | ||||||||||||
| Non-interest expense |
||||||||||||||||
| Salaries and employee benefits |
30,230 | 24,109 | 59,249 | 48,281 | ||||||||||||
| Net occupancy expense |
3,679 | 3,443 | 7,283 | 6,753 | ||||||||||||
| Leased equipment depreciation |
143 | 447 | 282 | 1,003 | ||||||||||||
| Marketing |
3,174 | 2,733 | 5,997 | 4,856 | ||||||||||||
| Legal and professional |
3,330 | 4,264 | 7,321 | 6,987 | ||||||||||||
| Communications and technology |
2,720 | 2,584 | 5,203 | 4,931 | ||||||||||||
| FDIC insurance assessment |
1,596 | 1,972 | 3,165 | 4,483 | ||||||||||||
| Allowance and other carrying costs for OREO |
3,812 | 1,023 | 7,154 | 5,053 | ||||||||||||
| Other |
5,289 | 4,688 | 10,595 | 9,315 | ||||||||||||
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|
|||||||||
| Total non-interest expense |
53,973 | 45,263 | 106,249 | 91,662 | ||||||||||||
|
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|
|
|
|
|
|
|||||||||
| Income from continuing operations before income taxes |
46,129 | 25,782 | 88,272 | 44,065 | ||||||||||||
| Income tax expense |
16,506 | 9,074 | 31,568 | 15,418 | ||||||||||||
|
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|
|
|
|
|
|
|||||||||
| Income from continuing operations |
29,623 | 16,708 | 56,704 | 28,647 | ||||||||||||
| Income (loss) from discontinued operations (after-tax) |
(1 | ) | (54 | ) | 3 | (114 | ) | |||||||||
|
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|
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|
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|
|||||||||
| Net income |
$ | 29,622 | $ | 16,654 | $ | 56,707 | $ | 28,533 | ||||||||
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|||||||||
| Basic earnings per common share: |
||||||||||||||||
| Income from continuing operations |
$ | .78 | $ | .45 | $ | 1.50 | $ | .77 | ||||||||
| Net income |
$ | .78 | $ | .45 | $ | 1.50 | $ | .77 | ||||||||
| Diluted earnings per common share: |
||||||||||||||||
| Income from continuing operations |
$ | .76 | $ | .44 | $ | 1.45 | $ | .75 | ||||||||
| Net income |
$ | .76 | $ | .43 | $ | 1.45 | $ | .74 | ||||||||
6
TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
| 2nd Quarter 2012 |
1st Quarter 2012 |
4th Quarter 2011 |
3rd Quarter 2011 |
2nd Quarter 2011 |
||||||||||||||||
| Reserve for loan losses: |
||||||||||||||||||||
| Beginning balance |
$ | 71,992 | $ | 70,295 | $ | 67,897 | $ | 67,748 | $ | 70,248 | ||||||||||
| Loans charged-off: |
||||||||||||||||||||
| Commercial |
1,048 | 462 | 1,348 | 1,523 | 3,654 | |||||||||||||||
| Real estate – construction |
— | — | — | — | — | |||||||||||||||
| Real estate – term |
56 | 559 | 2,438 | 5,049 | 6,424 | |||||||||||||||
| Consumer |
— | — | — | — | 283 | |||||||||||||||
| Leases |
26 | 95 | 238 | (16 | ) | 464 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
1,130 | 1,116 | 4,024 | 6,556 | 10,825 | |||||||||||||||
| Recoveries: |
||||||||||||||||||||
| Commercial |
191 | 159 | 390 | 109 | 143 | |||||||||||||||
| Real estate – construction |
— | — | — | 5 | — | |||||||||||||||
| Real estate – term |
348 | 108 | 45 | 152 | 122 | |||||||||||||||
| Consumer |
3 | 5 | 4 | 1 | 3 | |||||||||||||||
| Leases |
55 | 16 | 171 | 36 | 26 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total recoveries |
597 | 288 | 610 | 303 | 294 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net charge-offs |
533 | 828 | 3,414 | 6,253 | 10,531 | |||||||||||||||
| Provision for loan losses |
945 | 2,525 | 5,812 | 6,402 | 8,031 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Ending balance |
$ | 72,404 | $ | 71,992 | $ | 70,295 | $ | 67,897 | $ | 67,748 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Reserve for off-balance sheet credit losses: |
||||||||||||||||||||
| Beginning balance |
$ | 2,937 | $ | 2,462 | $ | 2,274 | $ | 1,676 | $ | 1,707 | ||||||||||
| Provision (benefit) for off-balance sheet credit losses |
55 | 475 | 188 | 598 | (31 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Ending balance |
$ | 2,992 | $ | 2,937 | $ | 2,462 | $ | 2,274 | $ | 1,676 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total reserves for credit losses |
$ | 75,396 | $ | 74,929 | $ | 72,757 | $ | 70,171 | $ | 69,424 | ||||||||||
| Total provision for credit losses |
$ | 1,000 | $ | 3,000 | $ | 6,000 | $ | 7,000 | $ | 8,000 | ||||||||||
| Reserve to loans held for investment(2) |
1.16 | % | 1.24 | % | 1.26 | % | 1.28 | % | 1.31 | % | ||||||||||
| Reserve to average loans held for investment(2) |
1.22 | % | 1.27 | % | 1.30 | % | 1.30 | % | 1.39 | % | ||||||||||
| Net charge-offs to average loans(1)(2) |
.04 | % | .06 | % | .25 | % | .48 | % | .86 | % | ||||||||||
| Net charge-offs to average loans for last twelve months(1)(2) |
.20 | % | .40 | % | .58 | % | .90 | % | 1.06 | % | ||||||||||
| Total provision for credit losses to average loans(1)(2) |
.07 | % | .21 | % | .44 | % | .53 | % | .66 | % | ||||||||||
| Combined reserves for credit losses to loans held for investment(2) |
1.21 | % | 1.29 | % | 1.31 | % | 1.32 | % | 1.34 | % | ||||||||||
| Non-performing assets (NPAs): |
||||||||||||||||||||
| Non-accrual loans |
$ | 56,433 | $ | 50,160 | $ | 54,580 | $ | 66,714 | $ | 77,884 | ||||||||||
| Other real estate owned (OREO) (4) |
27,882 | 32,601 | 34,077 | 35,796 | 27,285 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 84,315 | $ | 82,761 | $ | 88,657 | $ | 102,510 | $ | 105,169 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Non-accrual loans to loans(2) |
.91 | % | .87 | % | .98 | % | 1.26 | % | 1.51 | % | ||||||||||
| Total NPAs to loans plus OREO(2) |
1.35 | % | 1.42 | % | 1.58 | % | 1.92 | % | 2.03 | % | ||||||||||
| Total NPAs to earning assets(2) |
.97 | % | 1.01 | % | 1.14 | % | 1.40 | % | 1.64 | % | ||||||||||
| Reserve for loan losses to non-accrual loans |
1.3x | 1.4x | 1.3x | 1.0x | .9x | |||||||||||||||
| Restructured loans |
$ | 13,943 | $ | 12,582 | $ | 25,104 | $ | 24,963 | $ | 23,540 | ||||||||||
| Loans past due 90 days and still accruing(3) |
$ | 4,421 | $ | 5,941 | $ | 5,467 | $ | 3,003 | $ | 10,333 | ||||||||||
| Loans past due 90 days to loans(2) |
.07 | % | .10 | % | .10 | % | .06 | % | .20 | % | ||||||||||
| (1) | Interim period ratios are annualized. |
| (2) | Excludes loans held for sale. |
| (3) | At June 30, 2012, loans past due 90 days and still accruing includes premium finance loans of $3.2 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 June 30, 2012, OREO balance is net of $9.0 million valuation allowance. |
7
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in thousands)
| 2nd Quarter 2012 |
1st Quarter 2012 |
4th Quarter 2011 |
3rd Quarter 2011 |
2nd Quarter 2011 |
||||||||||||||||
| Interest income |
||||||||||||||||||||
| Interest and fees on loans |
$ | 94,291 | $ | 91,774 | $ | 91,512 | $ | 81,692 | $ | 73,509 | ||||||||||
| Securities |
1,203 | 1,307 | 1,408 | 1,524 | 1,680 | |||||||||||||||
| Federal funds sold |
4 | 1 | 1 | 3 | 5 | |||||||||||||||
| Deposits in other banks |
48 | 49 | 46 | 44 | 65 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest income |
95,546 | 93,131 | 92,967 | 83,263 | 75,259 | |||||||||||||||
| Interest expense |
||||||||||||||||||||
| Deposits |
3,482 | 3,472 | 3,471 | 3,191 | 3,417 | |||||||||||||||
| Federal funds purchased |
240 | 281 | 273 | 128 | 94 | |||||||||||||||
| Repurchase agreements |
4 | 3 | 4 | 2 | 2 | |||||||||||||||
| Other borrowings |
492 | 435 | 404 | 110 | 14 | |||||||||||||||
| Trust preferred subordinated debentures |
688 | 711 | 668 | 634 | 638 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest expense |
4,906 | 4,902 | 4,820 | 4,065 | 4,165 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income |
90,640 | 88,229 | 88,147 | 79,198 | 71,094 | |||||||||||||||
| Provision for credit losses |
1,000 | 3,000 | 6,000 | 7,000 | 8,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income after provision for credit losses |
89,640 | 85,229 | 82,147 | 72,198 | 63,094 | |||||||||||||||
| Non-interest income |
||||||||||||||||||||
| Service charges on deposit accounts |
1,624 | 1,604 | 1,504 | 1,585 | 1,608 | |||||||||||||||
| Trust fee income |
1,232 | 1,114 | 1,108 | 1,091 | 1,066 | |||||||||||||||
| Bank owned life insurance (BOLI) income |
588 | 521 | 500 | 533 | 539 | |||||||||||||||
| Brokered loan fees |
4,128 | 3,651 | 3,408 | 2,849 | 2,558 | |||||||||||||||
| Equipment rental income |
172 | 161 | 223 | 223 | 676 | |||||||||||||||
| Other |
2,718 | 2,139 | 2,251 | 1,322 | 1,504 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-interest income |
10,462 | 9,190 | 8,994 | 7,603 | 7,951 | |||||||||||||||
| Non-interest expense |
||||||||||||||||||||
| Salaries and employee benefits |
30,230 | 29,019 | 26,658 | 25,596 | 24,109 | |||||||||||||||
| Net occupancy expense |
3,679 | 3,604 | 3,537 | 3,367 | 3,443 | |||||||||||||||
| Leased equipment depreciation |
143 | 139 | 198 | 281 | 447 | |||||||||||||||
| Marketing |
3,174 | 2,823 | 3,798 | 2,455 | 2,733 | |||||||||||||||
| Legal and professional |
3,330 | 3,991 | 4,362 | 3,647 | 4,264 | |||||||||||||||
| Communications and technology |
2,720 | 2,483 | 2,468 | 2,210 | 2,584 | |||||||||||||||
| FDIC insurance assessment |
1,596 | 1,569 | 1,595 | 1,465 | 1,972 | |||||||||||||||
| Allowance and other carrying costs for OREO |
3,812 | 3,342 | 2,383 | 2,150 | 1,023 | |||||||||||||||
| Other |
5,289 | 5,306 | 5,354 | 5,015 | 4,688 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-interest expense |
53,973 | 52,276 | 50,353 | 46,186 | 45,263 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income from continuing operations before income taxes |
46,129 | 42,143 | 40,788 | 33,615 | 25,782 | |||||||||||||||
| Income tax expense |
16,506 | 15,062 | 15,043 | 11,905 | 9,074 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income from continuing operations |
29,623 | 27,081 | 25,745 | 21,710 | 16,708 | |||||||||||||||
| Income (loss) from discontinued operations (after-tax) |
(1 | ) | 4 | (5 | ) | (7 | ) | (54 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income |
$ | 29,622 | $ | 27,085 | $ | 25,740 | $ | 21,703 | $ | 16,654 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
8
TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY – UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
Continuing Operations
(Dollars in thousands)
| 2nd Quarter 2012 | 1st Quarter 2012 | 4th Quarter 2011 | 3rd Quarter 2011 | 2nd Quarter 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 |
$ | 91,623 | $ | 948 | 4.16 | % | $ | 109,003 | $ | 1,041 | 3.84 | % | $ | 109,761 | $ | 1,126 | 4.07 | % | $ | 115,871 | $ | 1,214 | 4.16 | % | $ | 127,269 | $ | 1,346 | 4.24 | % | ||||||||||||||||||||||||||||||
| Securities – Non-taxable(2) |
26,817 | 393 | 5.89 | % | 28,506 | 409 | 5.77 | % | 30,065 | 434 | 5.73 | % | 33,051 | 477 | 5.73 | % | 35,804 | 514 | 5.76 | % | ||||||||||||||||||||||||||||||||||||||||
| Federal funds sold |
8,077 | 4 | 0.20 | % | 6,848 | 1 | 0.06 | % | 8,505 | 1 | 0.05 | % | 20,864 | 3 | 0.06 | % | 14,303 | 5 | 0.14 | % | ||||||||||||||||||||||||||||||||||||||||
| Deposits in other banks |
60,416 | 48 | 0.32 | % | 49,470 | 49 | 0.41 | % | 42,644 | 46 | 0.43 | % | 36,495 | 44 | 0.48 | % | 77,928 | 65 | 0.33 | % | ||||||||||||||||||||||||||||||||||||||||
| Loans held for sale |
2,062,449 | 21,087 | 4.11 | % | 2,036,622 | 21,315 | 4.21 | % | 2,093,883 | 22,332 | 4.23 | % | 1,191,375 | 13,340 | 4.44 | % | 808,165 | 9,591 | 4.76 | % | ||||||||||||||||||||||||||||||||||||||||
| Loans held for investment |
5,950,913 | 73,204 | 4.95 | % | 5,660,993 | 70,459 | 5.01 | % | 5,395,253 | 69,180 | 5.09 | % | 5,219,496 | 68,352 | 5.20 | % | 4,890,696 | 63,918 | 5.24 | % | ||||||||||||||||||||||||||||||||||||||||
| Less reserve for loan losses |
71,779 | — | — | 70,261 | — | — | 67,214 | — | — | 66,215 | — | — | 68,031 | — | — | |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Loans, net of reserve |
7,941,583 | 94,291 | 4.78 | % | 7,627,354 | 91,774 | 4.84 | % | 7,421,922 | 91,512 | 4.89 | % | 6,344,656 | 81,692 | 5.11 | % | 5,630,830 | 73,509 | 5.24 | % | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total earning assets |
8,128,516 | 95,684 | 4.73 | % | 7,821,181 | 93,274 | 4.80 | % | 7,612,897 | 93,119 | 4.85 | % | 6,550,937 | 83,430 | 5.05 | % | 5,886,134 | 75,439 | 5.14 | % | ||||||||||||||||||||||||||||||||||||||||
| Cash and other assets |
394,086 | 388,009 | 382,577 | 333,563 | 306,372 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets |
$ | 8,522,602 | $ | 8,209,190 | $ | 7,995,474 | $ | 6,884,500 | $ | 6,192,506 | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and Stockholders’ Equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Transaction deposits |
$ | 694,463 | $ | 198 | 0.11 | % | $ | 565,319 | $ | 140 | 0.10 | % | $ | 429,980 | $ | 33 | 0.03 | % | $ | 412,203 | $ | 52 | 0.05 | % | $ | 375,084 | $ | 55 | 0.06 | % | ||||||||||||||||||||||||||||||
| Savings deposits |
2,664,598 | 2,107 | 0.32 | % | 2,535,412 | 2,083 | 0.33 | % | 2,422,465 | 2,062 | 0.34 | % | 2,253,123 | 1,664 | 0.29 | % | 2,465,118 | 1,700 | 0.28 | % | ||||||||||||||||||||||||||||||||||||||||
| Time deposits |
584,581 | 831 | 0.57 | % | 624,823 | 920 | 0.59 | % | 534,441 | 927 | 0.69 | % | 468,196 | 1,032 | 0.87 | % | 541,337 | 1,351 | 1.00 | % | ||||||||||||||||||||||||||||||||||||||||
| Deposits in foreign branches |
444,478 | 346 | 0.31 | % | 409,422 | 329 | 0.32 | % | 578,728 | 449 | 0.31 | % | 588,221 | 443 | 0.30 | % | 415,998 | 311 | 0.30 | % | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total interest bearing deposits |
4,388,120 | 3,482 | 0.32 | % | 4,134,976 | 3,472 | 0.34 | % | 3,965,614 | 3,471 | 0.35 | % | 3,721,743 | 3,191 | 0.34 | % | 3,797,537 | 3,417 | 0.36 | % | ||||||||||||||||||||||||||||||||||||||||
| Other borrowings |
1,428,575 | 736 | 0.21 | % | 1,554,716 | 719 | 0.19 | % | 1,588,198 | 681 | 0.17 | % | 894,073 | 240 | 0.11 | % | 233,388 | 110 | 0.19 | % | ||||||||||||||||||||||||||||||||||||||||
| Trust preferred subordinated debentures |
113,406 | 688 | 2.44 | % | 113,406 | 711 | 2.52 | % | 113,406 | 668 | 2.34 | % | 113,406 | 634 | 2.22 | % | 113,406 | 638 | 2.26 | % | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total interest bearing liabilities |
5,930,101 | 4,906 | 0.33 | % | 5,803,098 | 4,902 | 0.34 | % | 5,667,218 | 4,820 | 0.34 | % | 4,729,222 | 4,065 | 0.34 | % | 4,144,331 | 4,165 | 0.40 | % | ||||||||||||||||||||||||||||||||||||||||
| Demand deposits |
1,864,456 | 1,700,390 | 1,659,132 | 1,525,087 | 1,455,366 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities |
69,076 | 78,108 | 70,142 | 53,233 | 40,177 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders’ equity |
658,969 | 627,594 | 598,982 | 576,958 | 552,632 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity |
$ | 8,522,602 | $ | 8,209,190 | $ | 7,995,474 | $ | 6,884,500 | $ | 6,192,506 | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income |
$ | 90,778 | $ | 88,372 | $ | 88,299 | $ | 79,365 | $ | 71,274 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest margin |
4.49 | % | 4.54 | % | 4.60 | % | 4.81 | % | 4.86 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (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. |
9