TEXAS CAPITAL BANCSHARES INC/TX - FORM 8-K - EX-99.1

Attached files

file	filename
8-K - 8-K - TEXAS CAPITAL BANCSHARES INC/TX	d659976d8k.htm
EX-99.2 - EX-99.2 - TEXAS CAPITAL BANCSHARES INC/TX	d659976dex992.htm
EX-99.3 - EX-99.3 - TEXAS CAPITAL BANCSHARES INC/TX	d659976dex993.htm
EX-99.4 - EX-99.4 - TEXAS CAPITAL BANCSHARES INC/TX	d659976dex994.htm

Exhibit 99.1

LOGO

MEDIA CONTACT

Heather Worley, 214.932.6827

heather.worley@texascapitalbank.com

INVESTOR CONTACT

Myrna Vance, 214.932.6646

myrna.vance@texascapitalbank.com

TEXAS CAPITAL BANCSHARES ANNOUNCES OPERATING RESULTS FOR 2013

DALLAS – January 22, 2014 – Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the fourth quarter and full year of 2013.

•

Net income decreased 9% on a linked quarter basis and decreased 3% from the fourth quarter of 2012

•

EPS decreased 9% on a linked quarter basis and decreased 12% from the fourth quarter of 2012

•

Demand deposits increased 3% and total deposits increased 3% on a linked quarter basis, growing 32% and 24%, respectively, from the fourth quarter of 2012

•

Loans held for investment, excluding mortgage finance, increased 5% and total loans increased 9% on a linked quarter basis, growing 25% and 13%, respectively, from the fourth quarter of 2012

“2013 has been an extraordinary year for Texas Capital as we continue to build our business consistent with our successful, long-standing model,” said Keith Cargill, CEO. “As we win top client-facing talent and the critically important people who deliver outstanding service, products and support, we build growing earnings power for the future. This is consistent with our upcoming capital raise to support our anticipated strong growth.”

FINANCIAL SUMMARY

(dollars and shares in thousands)


	2013			2012			% Change
ANNUAL OPERATING RESULTS⁽¹⁾
Net Income	$	121,046		$	120,709			0	%
Net Income Available to Common Shareholders	$	113,652		$	120,709			(6	)%
Diluted EPS	$	2.72		$	3.01			(10	)%
ROA		1.17	%		1.35	%
ROE		12.82	%		16.93	%
Diluted Shares		41,780			40,166
QUARTERLY OPERATING RESULTS⁽¹⁾
Net Income	$	30,356		$	31,435			(3	)%
Net Income Available to Common Shareholders	$	27,918		$	31,435			(11	)%
Diluted EPS	$	.67		$	.76			(12	)%
ROA		1.10	%		1.27	%
ROE		11.94	%		15.35	%
Diluted Shares		41,889			41,505
BALANCE SHEET⁽¹⁾
Total Assets	$	11,714,397		$	10,540,542			11	%
Demand Deposits		3,347,567			2,535,375			32	%
Total Deposits		9,257,379			7,440,804			24	%
Loans Held for Investment		8,486,309			6,785,535			25	%
Loans Held for Investment, Mortgage Finance		2,784,265			3,175,272			(12	)%
Total Loans		11,270,574			9,960,807			13	%
Stockholders’ Equity		1,096,350			836,242			31	%

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

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income from continuing operations of $121.0 million and net income available to common shareholders of $113.7 million for the year ended December 31, 2013 compared to $120.7 million for both net income from continuing operations and net income available to common shareholders for the year ended December 31, 2012. For the fourth quarter of 2013, net income from continuing operations was $30.4 million and net income available to common shareholders was $27.9 million, compared to $31.4 million for both net income from continuing operations and net income available to common shareholders for the same period in 2012. On a fully diluted basis, earnings per common share from continuing operations were $2.72 for the year ended December 31, 2013, compared to $3.01 for the same period in 2012. For the fourth quarter of 2013, diluted earnings per share was $.67 compared to $.76 for the same period in 2012. The discussion below relates only to continuing operations.

Return on average common equity was 12.82 percent and return on average assets was 1.17 percent for the year ended December 31, 2013, compared to 16.93 percent and 1.35 percent, respectively, for 2012. Return on average common equity was 11.94 percent and return on average assets was 1.10 percent for the fourth quarter of 2013, compared to 15.35 percent and 1.27 percent, respectively, for the fourth quarter of 2012.

Net interest income was $111.5 million for the fourth quarter of 2013, compared to $108.8 million in the third quarter of 2013 and $101.2 million for the fourth quarter of 2012. For 2013, net interest income reached $419.5 million compared to $376.9 million in 2012. The net interest margin in the fourth quarter of 2013 was 4.21 percent, a 6 basis point decrease from the fourth quarter of 2012 and consistent with the third quarter of 2013. The year-to-date decrease in net interest margin is due to the growth in loans with lower yields offset with a reduction in the total cost of deposits and borrowed funds.

Average loans, excluding mortgage finance, for the year ended December 31, 2013 were $7.5 billion, an increase of $1.4 billion, or 23 percent, from 2012. Average mortgage finance loans for the year ended December 31, 2013 were $2.3 billion, consistent with 2012. Average loans, excluding mortgage finance, for the fourth quarter of 2013 were $8.1 billion, an increase of $1.4 billion, or 21 percent, from the fourth quarter of 2012 and an increase of $410.7 million, or 5 percent, from the third quarter of 2013. Average mortgage finance loans for the fourth quarter of 2013 decreased $419.4 million to $2.2 billion compared to the fourth quarter of 2012 and decreased $123.4 million from the third quarter of 2013.

Average total deposits for the fourth quarter of 2013 increased $2.2 billion from the fourth quarter of 2012 and increased $439.1 million from the third quarter of 2013. For the same periods, the average balance of demand deposits increased $932.5 million, or 40 percent, to $3.3 billion from $2.4 billion during the fourth quarter of 2012 and increased $164.7 million, or 5 percent, from the third quarter of 2013.

In the fourth quarter of 2013, we experienced decreases in the levels of non-performing assets. Credit costs, including the provision for credit losses and valuation charges related to other real estate owned (“OREO”) totaled $5.5 million in the fourth quarter of 2013 compared to $5.5 million in the fourth quarter of 2012 and $5.0 million in the third quarter of 2013. We recorded a $5.0 million provision for credit losses in the fourth quarter of 2013 compared to $4.5 million in the fourth quarter of 2012 and $5.0 million in the third quarter of 2013. For 2013, the total provision for credit losses was $19.0 million, an increase of 65 percent from $11.5 million in 2012. The substantial majority of the provision for the year ended December 31, 2013 was directly related to the significant growth in loans excluding mortgage finance loans during the year. Due to growth and improving credit quality, at December 31, 2013, the combined reserve decreased to 1.09 percent of loans excluding mortgage finance loans as compared to 1.15 percent at December 31, 2012 and 1.10 percent at September 30, 2013. 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 fourth quarter of 2013, net charge-offs were $1.3 million compared to net charge-offs of $3.5 million in the fourth quarter of 2012 and net charge-offs of $46,000 in the third quarter of 2013. For 2013, net charge-offs were $4.9 million, .07 percent of average loans, excluding mortgage finance loans, compared to $6.1 million and a ratio of .10 percent in 2012. Non-accrual loans were $32.4 million, or .38 percent of loans excluding mortgage finance loans as of December 31, 2013, $55.8 million, or .82 percent, as of December 31, 2012 and $35.7 million, or .44 percent, as of September 30, 2013. At December 31, 2013, total

OREO was $5.1 million compared to $16.0 million as of December 31, 2012, and $12.8 million as of September 30, 2013. The OREO balance of $5.1 million at December 31, 2013 does not have a valuation allowance. The valuation charge for OREO reflected in non-interest expense was $466,000 in the fourth quarter of 2013 compared to $955,000 in the fourth quarter of 2012 and none in the third quarter of 2013.

Non-interest income decreased $1.7 million during the fourth quarter of 2013, or 13 percent, compared to the same period of 2012 primarily related to a $1.6 million decrease in brokered loan fees as a result of declining mortgage finance volumes during the fourth quarter of 2013 as compared to the fourth of 2012.

Non-interest expense for the fourth quarter of 2013 increased $10.2 million, or 17 percent, to $70.3 million from $60.1 million in the fourth quarter of 2012. The increase is primarily related to an $11.8 million increase in salaries and employee benefits to $43.0 million for the fourth quarter of 2013 from $31.2 million for the same period in 2012, which was primarily due to general business growth and an increase in cost of incentives tied to stock price.

Stockholders’ equity increased by 31 percent from $836.2 million at December 31, 2012 to $1.1 billion at December 31, 2013, primarily due to the offering of 6.0 million preferred shares for net proceeds of $145.1 million in the first quarter of 2013 and retained income during 2013. The Bank is well capitalized under regulatory guidelines and at December 31, 2013, our ratio of tangible common equity to total tangible assets was 7.9 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 individual 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 supplements, the Annual Report on Form 10-K and other filings made by Texas Capital with the Securities and Exchange Commission (SEC).

TEXAS CAPITAL BANCSHARES, INC.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

(Dollars in thousands except per share data)


	4^th Quarter 2013			3^rd Quarter 2013			2^nd Quarter 2013			1^st Quarter 2013			4^th Quarter 2012
CONSOLIDATED STATEMENT OF INCOME
Interest income	$	117,965		$	115,217		$	107,264		$	104,179		$	107,769
Interest expense		6,490			6,441			6,044			6,137			6,614

Net interest income		111,475			108,776			101,220			98,042			101,155
Provision for credit losses		5,000			5,000			7,000			2,000			4,500

Net interest income after provision for credit losses		106,475			103,776			94,220			96,042			96,655
Non-interest income		11,184			10,431			11,128			11,281			12,836
Non-interest expense		70,291			62,009			68,734			55,700			60,074

Income from continuing operations before income taxes		47,368			52,198			36,614			51,623			49,417
Income tax expense		17,012			18,724			12,542			18,479			17,982

Income from continuing operations		30,356			33,474			24,072			33,144			31,435
Income (loss) from discontinued operations (after-tax)		3			2			1			(1	)		(6	)

Net income		30,359			33,476			24,073			33,143			31,429
Preferred stock dividends		2,438			2,437			2,438			81			–

Net income available to common shareholders	$	27,921		$	31,039		$	21,635		$	33,062		$	31,429

Diluted EPS from continuing operations	$	.67		$	.74		$	.52		$	.80		$	.76
Diluted EPS	$	.67		$	.74		$	.52		$	.80		$	.76
Diluted shares		41,888,768			41,791,674			41,723,525			41,429,244			41,505,026
CONSOLIDATED BALANCE SHEET DATA
Total assets	$	11,714,397		$	10,797,448		$	10,977,990		$	10,020,565		$	10,540,542
Loans held for investment		8,486,309			8,051,328			7,510,662			6,920,011			6,785,535
Loans held for investment, mortgage finance		2,784,265			2,262,085			2,838,234			2,577,830			3,175,272
Securities		63,214			67,815			75,861			87,527			100,195
Demand deposits		3,347,567			3,242,060			2,928,735			2,628,446			2,535,375
Total deposits		9,257,379			8,957,081			7,980,598			7,745,831			7,440,804
Other borrowings		1,025,630			449,724			1,634,630			938,134			1,947,161
Subordinated notes		111,000			111,000			111,000			111,000			111,000
Long-term debt		113,406			113,406			113,406			113,406			113,406
Stockholders’ equity		1,096,350			1,066,629			1,034,955			1,013,195			836,242
End of period shares outstanding		41,036,370			40,934,623			40,862,481			40,771,414			40,727,579
Book value (excluding securities gains/losses)	$	23.02		$	22.35		$	21.60		$	21.10		$	20.45
Tangible book value (excluding securities gains/losses)	$	22.50		$	21.82		$	21.08		$	20.62		$	19.96
SELECTED FINANCIAL RATIOS
Net interest margin		4.21	%		4.21	%		4.19	%		4.27	%		4.27	%
Return on average assets		1.10	%		1.25	%		0.95	%		1.38	%		1.27	%
Return on average common equity		11.94	%		13.74	%		9.94	%		15.82	%		15.35	%
Non-interest income to earning assets		.42	%		.40	%		.46	%		.49	%		.54	%
Efficiency ratio		57.3	%		52.0	%		61.2	%		50.9	%		52.7	%
Efficiency ratio (excluding OREO valuation/write-down)		56.9	%		52.0	%		60.8	%		50.9	%		51.9	%
Non-interest expense to earning assets		2.65	%		2.40	%		2.84	%		2.42	%		2.53	%
Non-interest expense to earning assets (excluding OREO valuation charge)		2.63	%		2.40	%		2.83	%		2.42	%		2.49	%
Tangible common equity to total tangible assets		7.9	%		8.3	%		7.9	%		8.4	%		7.7	%

TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)


	December 31, 2013			December 31, 2012			% Change
Assets
Cash and due from banks	$	92,484		$	111,938			(17	)%
Interest-bearing deposits		61,337			94,410			(35	)%
Federal funds sold		90			—			100	%
Securities, available-for-sale		63,214			100,195			(37	)%
Loans held for sale from discontinued operations		294			302			(3	)%
Loans held for investment, mortgage finance		2,784,265			3,175,272			(12	)%
Loans held for investment (net of unearned income)		8,486,309			6,785,535			25	%
Less: Allowance for loan losses		87,604			74,337			18	%

Loans held for investment, net		11,182,970			9,886,470			13	%
Premises and equipment, net		11,482			11,445			(0	)%
Accrued interest receivable and other assets		281,534			316,201			(11	)%
Goodwill and intangibles, net		21,286			19,883			7	%

Total assets	$	11,714,691		$	10,540,844			11	%

Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing	$	3,347,567		$	2,535,375			32	%
Interest bearing		5,579,505			4,576,120			22	%
Interest bearing in foreign branches		330,307			329,309			0	%

Total deposits		9,257,379			7,440,804			24	%
Accrued interest payable		749			650			15	%
Other liabilities		110,177			91,581			20	%
Federal funds purchased		148,650			273,179			(46	)%
Repurchase agreements		21,954			23,936			(8	)%
Other borrowings		855,026			1,650,046			(48	)%
Subordinated notes		111,000			111,000			—
Trust preferred subordinated debentures		113,406			113,406			—

Total liabilities		10,618,341			9,704,602			9	%
Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares – 10,000,000
Issued shares		150,000			—			100	%
Common stock, $.01 par value:
Authorized shares – 100,000,000
Issued shares – 41,036,787 and 40,727,996 at December 31, 2013 and 2012, respectively		410			407			1	%
Additional paid-in capital		448,208			450,116			(0	)%
Retained earnings		496,112			382,455			30	%
Treasury stock (shares at cost: 417 at December 31, 2013 and 2012)		(8	)		(8	)		—
Accumulated other comprehensive income, net of taxes		1,628			3,272			(50	)%

Total stockholders’ equity		1,096,350			836,242			31	%

Total liabilities and stockholders’ equity	$	11,714,691		$	10,540,844			11	%

TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands except per share data)


	Three Months Ended December 31					Year Ended December 31
	2013		2012			2013		2012
Interest income
Interest and fees on loans	$	117,261	$	106,653		$	441,314	$	393,548
Securities		621		1,053			3,015		4,688
Federal funds sold		24		6			65		13
Deposits in other banks		59		57			231		208

Total interest income		117,965		107,769			444,625		398,457
Interest expense
Deposits		3,858		3,312			14,030		13,644
Federal funds purchased		116		190			686		979
Repurchase agreements		5		3			18		13
Other borrowings		40		615			515		2,149
Subordinated notes		1,840		1,829			7,327		2,037
Trust preferred subordinated debentures		631		665			2,536		2,756

Total interest expense		6,490		6,614			25,112		21,578

Net interest income		111,475		101,155			419,513		376,879
Provision for credit losses		5,000		4,500			19,000		11,500

Net interest income after provision for credit losses		106,475		96,655			400,513		365,379
Non-interest income
Service charges on deposit accounts		1,674		1,693			6,783		6,605
Trust fee income		1,250		1,260			5,023		4,822
Bank owned life insurance (BOLI) income		533		510			1,917		2,168
Brokered loan fees		3,380		4,978			16,980		17,596
Swap fees		1,904		2,093			5,520		4,909
Other		2,443		2,302			7,801		6,940

Total non-interest income		11,184		12,836			44,024		43,040
Non-interest expense
Salaries and employee benefits		43,008		31,198			157,752		121,456
Net occupancy expense		4,487		3,916			16,821		14,852
Marketing		4,183		3,980			16,203		13,449
Legal and professional		5,520		5,320			18,104		17,557
Communications and technology		3,597		3,070			13,762		11,158
FDIC insurance assessment		1,923		1,071			8,057		5,568
Allowance and other carrying costs for OREO		609		1,369			1,788		9,075
Litigation settlement expense		—		4,000			—		4,000
Other		6,964		6,150			24,247		22,729

Total non-interest expense		70,291		60,074			256,734		219,844

Income from continuing operations before income taxes		47,368		49,417			187,803		188,575
Income tax expense		17,012		17,982			66,757		67,866

Income from continuing operations		30,356		31,435			121,046		120,709
Loss from discontinued operations (after-tax)		3		(6	)		5		(37	)

Net income		30,359		31,429			121,051		120,672
Preferred stock dividends		2,438		—			7,394		—

Net income available to common shareholders	$	27,921	$	31,429		$	113,657	$	120,672

Basic earnings per common share:
Income from continuing operations	$	.68	$	.78		$	2.78	$	3.09
Net income	$	.68	$	.78		$	2.78	$	3.09
Diluted earnings per common share:
Income from continuing operations	$	.67	$	.76		$	2.72	$	3.01
Net income	$	.67	$	.76		$	2.72	$	3.00

TEXAS CAPITAL BANCSHARES, INC.

SUMMARY OF LOAN LOSS EXPERIENCE

(Dollars in thousands)


	4^th Quarter 2013			3^rd Quarter 2013			2^nd Quarter 2013			1^st Quarter 2013			4^th Quarter 2012
Reserve for loan losses:
Beginning balance	$	84,006		$	79,428		$	75,000		$	74,337		$	73,722
Loans charged-off:
Commercial		1,605			496			2,826			1,648			4,044
Real estate – term		—			13			26			105			—
Consumer		—			—			26			19			—
Leases		—			2			—			—			34

Total loans charged-off		1,605			511			2,878			1,772			4,078
Recoveries:
Commercial		225			233			348			397			350
Real estate – term		60			195			7			8			226
Consumer		9			19			15			30			7
Leases		43			18			140			121			21

Total recoveries		337			465			510			556			604

Net charge-offs		1,268			46			2,368			1,216			3,474
Provision for loan losses		4,866			4,624			6,796			1,879			4,089

Ending balance	$	87,604		$	84,006		$	79,428		$	75,000		$	74,337

Reserve for off-balance sheet credit losses:
Beginning balance	$	4,556		$	4,180		$	3,976		$	3,855		$	3,444
Provision for off-balance sheet credit losses		134			376			204			121			411

Ending balance	$	4,690		$	4,556		$	4,180		$	3,976		$	3,855

Total reserves for credit losses	$	92,294		$	88,562		$	83,608		$	78,976		$	78,192
Total provision for credit losses	$	5,000		$	5,000		$	7,000		$	2,000		$	4,500
Reserve to loans		.78	%		.81	%		.77	%		.79	%		.75	%
Reserve to loans excluding mortgage finance loans⁽²⁾		1.03	%		1.04	%		1.06	%		1.08	%		1.10	%
Reserve to average loans		.84	%		.83	%		.83	%		.81	%		.88	%
Reserve to average loans excluding mortgage finance loans⁽²⁾		1.08	%		1.09	%		1.11	%		1.10	%		1.12	%
Net charge-offs to average loans⁽¹⁾		.05	%		.00	%		.10	%		.05	%		.15	%
Net charge-offs to average loans excluding mortgage finance loans⁽¹⁾⁽²⁾		.06	%		.00	%		.13	%		.07	%		.21	%
Net charge-offs to average loans for last twelve months⁽¹⁾		.05	%		.07	%		.09	%		.07	%		.07	%
Net charge-offs to average loans, excluding mortgage finance loans, for last twelve months⁽¹⁾⁽²⁾		.07	%		.10	%		.12	%		.10	%		.10	%
Total provision for credit losses to average loans⁽¹⁾		.19	%		.20	%		.29	%		.09	%		.19	%
Total provision for credit losses to average loans excluding mortgage finance loans⁽¹⁾⁽²⁾		.24	%		.26	%		.39	%		.12	%		.27	%
Combined reserves for credit losses to loans		.82	%		.86	%		.81	%		.83	%		.78	%
Combined reserves for credit losses to loans, excluding mortgage finance loans⁽²⁾		1.09	%		1.10	%		1.11	%		1.14	%		1.15	%
Non-performing assets (NPAs):
Non-accrual loans	$	32,375		$	35,737		$	38,450		$	43,424		$	55,833
Other real estate owned (OREO)⁽⁴⁾		5,110			12,805			13,053			14,426			15,991
Other repossessed assets		—			—			19			—			42

Total	$	37,485		$	48,542		$	51,522		$	57,850		$	71,866


Non-accrual loans to loans		.29	%		.35	%		.37	%		.46	%		.56	%
Non-accrual loans to loans excluding mortgage finance loans⁽²⁾		.38	%		.44	%		.51	%		.63	%		.82	%
Total NPAs to loans plus OREO		.33	%		.47	%		.50	%		.61	%		.72	%
Total NPAs to loans excluding mortgage finance loans plus OREO⁽²⁾		.44	%		.60	%		.68	%		.83	%		1.06	%
Total NPAs to earning assets		.33	%		.47	%		.49	%		.60	%		.71	%
Reserve for loan losses to non-accrual loans		2.7x			2.4x			2.1x			1.7x			1.3x
Restructured loans	$	1,935		$	4,691		$	4,765		$	11,755		$	10,407
Loans past due 90 days and still accruing⁽³⁾	$	9,325		$	7,510		$	7,633		$	12,614		$	3,674
Loans past due 90 days to loans		.08	%		.07	%		.07	%		.13	%		.04	%
Loans past due 90 days to loans excluding mortgage finance loans⁽²⁾		.11	%		.09	%		.10	%		.18	%		.05	%

(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 December 31, 2013, loans past due 90 days and still accruing includes premium finance loans of $3.8 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 December 31, 2013, there is no valuation allowance recorded against the OREO balance.

TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

(Dollars in thousands)


	4^th Quarter 2013		3^rd Quarter 2013			2^nd Quarter 2013		1^st Quarter 2013			4^th Quarter 2012
Interest income
Interest and fees on loans	$	117,261	$	114,453		$	106,418	$	103,182		$	106,653
Securities		621		682			773		939			1,053
Federal funds sold		24		22			13		6			6
Deposits in other banks		59		60			60		52			57

Total interest income		117,965		115,217			107,264		104,179			107,769
Interest expense
Deposits		3,858		3,699			3,228		3,245			3,312
Federal funds purchased		116		152			206		212			190
Repurchase agreements		5		4			5		4			3
Other borrowings		40		119			143		213			615
Subordinated notes		1,840		1,829			1,829		1,829			1,829
Trust preferred subordinated debentures		631		638			633		634			665

Total interest expense		6,490		6,441			6,044		6,137			6,614

Net interest income		111,475		108,776			101,220		98,042			101,155
Provision for credit losses		5,000		5,000			7,000		2,000			4,500

Net interest income after provision for credit losses		106,475		103,776			94,220		96,042			96,655
Non-interest income
Service charges on deposit accounts		1,674		1,659			1,749		1,701			1,693
Trust fee income		1,250		1,263			1,269		1,241			1,260
Bank owned life insurance (BOLI) income		533		423			463		498			510
Brokered loan fees		3,380		4,078			4,778		4,744			4,978
Swap fees		1,904		983			981		1,652			2,093
Other		2,443		2,025			1,888		1,445			2,302

Total non-interest income		11,184		10,431			11,128		11,281			12,836
Non-interest expense
Salaries and employee benefits		43,008		36,012			45,191		33,541			31,198
Net occupancy expense		4,487		4,342			4,135		3,857			3,916
Marketing		4,183		3,974			4,074		3,972			3,980
Legal and professional		5,520		3,937			4,707		3,940			5,320
Communications and technology		3,597		3,696			3,347		3,122			3,070
FDIC insurance assessment		1,923		4,357			699		1,078			1,071
Allowance and other carrying costs for OREO		609		267			482		430			1,369
Litigation settlement expense		—		(908	)		—		—			4,000
Other		6,964		6,332			6,099		5,760			6,150

Total non-interest expense		70,291		62,009			68,734		55,700			60,074

Income from continuing operations before income taxes		47,368		52,198			36,614		51,623			49,417
Income tax expense		17,012		18,724			12,542		18,479			17,982

Income from continuing operations		30,356		33,474			24,072		33,144			31,435
Income (loss) from discontinued operations (after-tax)		3		2			1		(1	)		(6	)

Net income		30,359		33,476			24,073		33,143			31,429
Preferred stock dividends		2,438		2,437			2,438		81			—

Net income available to common shareholders	$	27,921	$	31,039		$	21,635	$	33,062		$	31,429

TEXAS CAPITAL BANCSHARES, INC.

QUARTERLY FINANCIAL SUMMARY – UNAUDITED

Consolidated Daily Average Balances, Average Yields and Rates

Continuing Operations

(Dollars in thousands)


	4^th Quarter 2013							3^rd Quarter 2013							2^nd Quarter 2013							1^st Quarter 2013							4^th 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	$	50,281	$	480		3.79	%	$	54,838	$	522		3.78	%	$	60,063	$	594		3.97	%	$	71,220	$	729		4.15	%	$	78,182	$	811		4.13	%
Securities – Non-taxable⁽²⁾		14,786		217		5.82	%		16,879		246		5.78	%		18,843		275		5.85	%		22,174		323		5.91	%		25,301		372		5.85	%
Federal funds sold and securities purchased under resale agreements		59,409		24		0.16	%		78,896		22		0.11	%		54,448		13		0.10	%		24,785		6		0.10	%		21,617		6		0.11	%
Deposits in other banks		99,185		59		0.24	%		88,717		60		0.27	%		91,177		60		0.26	%		78,718		52		0.27	%		69,886		57		0.32	%
Loans held for investment, mortgage finance loans		2,238,730		20,236		3.59	%		2,362,118		22,547		3.79	%		2,406,246		22,440		3.74	%		2,362,646		22,641		3.89	%		2,658,092		26,440		3.96	%
Loans held for investment		8,142,569		97,025		4.73	%		7,731,901		91,906		4.72	%		7,152,323		83,978		4.71	%		6,842,766		80,541		4.77	%		6,662,817		80,213		4.79	%
Less reserve for loan losses		84,009		—		—			79,551		—		—			75,006		—		—			74,442		—		—			73,912		—		—

Loans, net of reserve		10,297,290		117,261		4.52	%		10,014,468		114,453		4.53	%		9,483,563		106,418		4.50	%		9,130,970		103,182		4.58	%		9,246,997		106,653		4.59	%

Total earning assets		10,520,951		118,041		4.45	%		10,253,798		115,303		4.46	%		9,708,094		107,360		4.44	%		9,327,867		104,292		4.53	%		9,441,983		107,899		4.55	%
Cash and other assets		378,315							383,968							402,898							401,692							427,299

Total assets	$	10,899,266						$	10,637,766						$	10,110,992						$	9,729,559						$	9,869,282

Liabilities and Stockholders’ Equity
Transaction deposits	$	787,720	$	76		0.04	%	$	794,630	$	102		0.05	%	$	1,051,199	$	233		0.09	%	$	1,003,735	$	253		0.10	%	$	941,947	$	244		0.10	%
Savings deposits		4,365,746		3,079		0.28	%		4,057,792		2,863		0.28	%		3,340,420		2,292		0.28	%		3,246,675		2,297		0.29	%		2,933,904		2,299		0.31	%
Time deposits		385,546		394		0.41	%		402,920		414		0.41	%		397,868		407		0.41	%		403,113		414		0.42	%		423,685		448		0.42	%
Deposits in foreign branches		348,240		309		0.35	%		357,532		320		0.36	%		340,713		296		0.35	%		335,265		281		0.34	%		362,580		321		0.35	%

Total interest bearing deposits		5,887,252		3,858		0.26	%		5,612,874		3,699		0.26	%		5,130,200		3,228		0.25	%		4,988,788		3,245		0.26	%		4,662,116		3,312		0.28	%
Other borrowings		314,018		161		0.20	%		539,767		275		0.20	%		727,158		354		0.20	%		1,041,573		429		0.17	%		1,725,129		808		0.19	%
Subordinated notes		111,000		1,840		6.58	%		111,000		1,829		6.54	%		111,000		1,829		6.61	%		111,000		1,829		6.68	%		111,000		1,829		6.56	%
Trust preferred subordinated debentures		113,406		631		2.21	%		113,406		638		2.23	%		113,406		633		2.24	%		113,406		634		2.27	%		113,406		665		2.33	%

Total interest bearing liabilities		6,425,676		6,490		0.40	%		6,377,047		6,441		0.40	%		6,081,764		6,044		0.40	%		6,254,767		6,137		0.40	%		6,611,651		6,614		0.40	%
Demand deposits		3,289,307							3,124,602							2,914,341							2,529,927							2,356,758
Other liabilities		106,461							89,640							91,608							90,538							86,308
Stockholders’ equity		1,077,822							1,046,477							1,023,279							854,327							814,565

Total liabilities and stockholders’ equity	$	10,899,266						$	10,637,766						$	10,110,992						$	9,729,559						$	9,869,282

Net interest income			$	111,551						$	108,862						$	101,316						$	98,155						$	101,285
Net interest margin						4.21	%						4.21	%						4.19	%						4.27	%						4.27	%

(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.

TEXAS CAPITAL BANCSHARES INC/TX - FORM 8-K - EX-99.1 - January 23, 2014

Attached files

TEXAS CAPITAL BANCSHARES INC/TX Reports