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

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EX-99.2 - TEXAS CAPITAL BANCSHARES INC/TX	tcbiearningswebcastq3201.htm
8-K - 8-K - TEXAS CAPITAL BANCSHARES INC/TX	a10222014-8k.htm

Exhibit 99.1

October 22, 2014

MEDIA & INVESTOR CONTACT

Heather Worley, 214.932.6646

heather.worley@texascapitalbank.com

TEXAS CAPITAL BANCSHARES, INC. ANNOUNCES OPERATING RESULTS FOR Q3 2014

DALLAS - October 22, 2014 - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the third quarter of 2014.

“We are pleased to report another strong quarter of operating results and exceptional growth in loans and deposits,” said Keith Cargill, President and CEO. ”The business model is producing growth in key lines of business, with the anticipated improvements in operating leverage while maintaining a critical focus on credit quality. We are producing favorable returns for our shareholders and building liquidity as we position the Company to take advantage of opportunities in our markets and lines of business.”


•	Loans held for investment, excluding mortgage finance, increased 6% and total loans increased 5% on a linked quarter basis, growing 20% and 31%, respectively, from the third quarter of 2013.


•	Mortgage finance loans increased 2% on a linked quarter basis and 67% from the third quarter of 2013.


•	Demand deposits increased 13% and total deposits increased 9% on a linked quarter basis, growing 46% and 31%, respectively, from the third quarter of 2013.


•	Net income increased 10% on a linked quarter basis and from the third quarter of 2013.


•	EPS increased 10% on a linked quarter basis and increased 5% from the third quarter of 2013.

FINANCIAL SUMMARY

(dollars and shares in thousands)



	Q3 2014		Q3 2013		% Change
QUARTERLY OPERATING RESULTS⁽¹⁾
Net income	$	36,832	$	33,474	10%
Net income available to common stockholders	$	34,394	$	31,037	11%
Diluted EPS	$	0.78	$	0.74	5%
ROA	1.07%		1.25%
ROE	12.11%		13.74%
Diluted shares	43,850		41,792

BALANCE SHEET⁽¹⁾
Total assets	$	14,266,214	$	10,797,448	32%
Demand deposits	4,722,479		3,242,060		46%
Total deposits	11,715,808		8,957,081		31%
Loans held for investment	9,686,134		8,051,328		20%
Loans held for investment, mortgage finance	3,774,467		2,262,085		67%
Total loans	13,460,601		10,313,413		31%
Stockholders’ equity	1,297,922		1,066,629		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 $36.8 million and net income available to common stockholders of $34.4 million for the quarter ended September 30, 2014, compared to $33.5 million and $31.0 million, respectively, for the same period in 2013. On a fully diluted basis, earnings per common share from continuing operations were $.78 for the three months ended September 30, 2014, compared to $.74 for the same period in 2013. The discussion below relates only to continuing operations.

Return on average common equity (“ROE”) was 12.11 percent and return on average assets (“ROA”) was 1.07 percent for the third quarter of 2014, compared to 13.74 percent and 1.25 percent, respectively, for the third quarter of 2013. During the first quarter of 2014, we completed an equity offering of 1.9 million common shares, which increased common equity by $106.5 million. We also completed a $175 million subordinated debt offering during the first quarter of 2014. Both of these transactions had the effect of reducing ROE. The ROA decrease also resulted from a combination of reduced yields on loans and the increase in liquidity assets.

Net interest income was $125.7 million for the third quarter of 2014, compared to $108.8 million in the third quarter of 2013 and $115.4 million for the second quarter of 2014. The net interest margin in the third quarter of 2014 was 3.77 percent, a 44 basis point decrease from the third quarter of 2013 and a 10 basis point decrease from the second quarter of 2014. The 10 basis point decrease in net interest margin from the second 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, as well as an increase in liquidity assets, which includes Federal funds sold and deposits in other banks. The year-over-year decrease in net interest margin is primarily due to the growth in loans with lower yields and the increase in the average balance of liquidity assets. The cost of total deposits and borrowed funds decreased slightly to 16 basis points for the third quarter of 2014 compared to 17 basis points for the third quarter of 2013.

Average loans, excluding mortgage finance loans, for the third quarter of 2014 were $9.4 billion, an increase of $1.7 billion, or 22 percent, from the third quarter of 2013, and an increase of $439.0 million, or 5 percent, from the second quarter of 2014. Average mortgage finance loans for the third quarter of 2014 increased $1.1 billion to $3.5 billion compared to the third quarter of 2013 and increased $630.2 million from the second quarter of 2014.

Average total deposits for the third quarter of 2014 increased $2.8 billion from the third quarter of 2013 and increased $1.6 billion from the second quarter of 2014. Average demand deposits for the third quarter of 2014 increased $1.5 billion, or 49 percent, to $4.7 billion from $3.1 billion during the third quarter of 2013 and increased $1.0 billion, or 29 percent, from the second quarter of 2014.

We continued to experience decreasing levels of non-performing assets in the third quarter of 2014. Credit costs, including the provision for credit losses and valuation charges related to other real estate owned (“OREO”), totaled $6.5 million in the third quarter of 2014 compared to $5.0 million in the third quarter of 2013 and $4.0 million in the second quarter of 2014. We recorded a $6.5 million provision for credit losses in the third quarter of 2014 compared to $5.0 million in the third quarter of 2013 and $4.0 million in the second quarter of 2014. The provision for the third quarter of 2014 was primarily related to the growth in loans, excluding mortgage finance loans, during the quarter. The combined reserve at September 30, 2014 decreased to 1.06 percent of loans excluding mortgage finance loans due to continuing loan growth, as compared to 1.10 percent at September 30, 2013 and 1.06 percent at June 30, 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 third quarter of 2014, net charge-offs were $595,000 compared to net charge-offs of $46,000 in the third quarter of 2013 and net charge-offs of $2.5 million in the second quarter of 2014. Non-accrual loans were $37.3 million, or .39 percent of loans excluding mortgage finance loans as of September 30, 2014, $35.7 million, or .44 percent, as of September 30, 2013 and $41.6 million, or .45 percent, as of June 30, 2014. At September 30, 2014, total OREO was $617,000 compared to $12.8 million as of September 30, 2013, and $685,000 as of June 30, 2014. The OREO balance of $617,000 at September 30, 2014 does not include a valuation allowance. There was no valuation charge for OREO reflected in non-interest expense in the third quarter of 2014, the third quarter of 2013 or the second quarter of 2014.

Non-interest income decreased $35,000, or less than 1 percent, during the third quarter of 2014 compared to the same period of 2013. Swap fee income decreased $519,000 during the third 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 this decrease was a $562,000 increase in other non-interest income during the third quarter 2014.

Non-interest expense for the third quarter of 2014 increased $9.9 million, or 16 percent, to $71.9 million from $62.0 million in the third quarter of 2013. The increase is primarily related to a $7.2 million increase in salaries and employee benefits expense, a $937,000 increase in net occupancy expense, a $937,000 increase in legal and professional expense, a $1.2 million increase in communications and technology expense and a $1.4 million increase in other non-interest expense, all of which were due to general business growth. Offsetting these increases was a $1.6 million decrease in FDIC insurance assessment for the third quarter of 2014 as compared to the third quarter of 2013 due to a $3.0 million one-time assessment related to the reclassification of our mortgage finance assets incurred in the third quarter of 2013.

Stockholders’ equity increased by 22 percent from $1.1 billion at September 30, 2013 to $1.3 billion at September 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 September 30, 2014, 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 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)
	3^rd Quarter		2^nd Quarter		1^st Quarter		4^th Quarter		3^rd Quarter
	2014		2014		2014		2013		2013
CONSOLIDATED STATEMENTS OF INCOME
Interest income	$	135,290	$	124,813	$	116,611	$	117,965	$	115,217
Interest expense	9,629		9,406		8,296		6,490		6,441
Net interest income	125,661		115,407		108,315		111,475		108,776
Provision for credit losses	6,500		4,000		5,000		5,000		5,000
Net interest income after provision for credit losses	119,161		111,407		103,315		106,475		103,776
Non-interest income	10,396		10,533		10,356		11,184		10,431
Non-interest expense	71,915		69,768		69,321		70,291		62,009
Income from continuing operations before income taxes	57,642		52,172		44,350		47,368		52,198
Income tax expense	20,810		18,754		16,089		17,012		18,724
Income from continuing operations	36,832		33,418		28,261		30,356		33,474
Income from discontinued operations (after-tax)	−		3		4		3		2
Net income	36,832		33,421		28,265		30,359		33,476
Preferred stock dividends	2,438		2,437		2,438		2,438		2,437
Net income available to common stockholders	$	34,394	$	30,984	$	25,827	$	27,921	$	31,039
Diluted EPS from continuing operations	$	.78	$	.71	$	.60	$	.67	$	.74
Diluted EPS	$	.78	$	.71	$	.60	$	.67	$	.74

Diluted shares	43,849,838		43,845,015		43,219,961		41,888,768		41,791,674

CONSOLIDATED BALANCE SHEET DATA
Total assets	$	14,266,214	$	13,532,536	$	12,143,296	$	11,714,397	$	10,797,448
Loans held for investment	9,686,134		9,152,715		8,928,033		8,486,309		8,051,328
Loans held for investment, mortgage finance	3,774,467		3,700,253		2,688,044		2,784,265		2,262,085
Securities	43,938		49,330		52,960		63,214		67,815
Demand deposits	4,722,479		4,181,774		3,451,294		3,347,567		3,242,060
Total deposits	11,715,808		10,757,316		9,729,128		9,257,379		8,957,081
Other borrowings	735,689		1,000,548		678,026		1,025,630		449,724
Subordinated notes	286,000		286,000		286,000		111,000		111,000
Long-term debt	113,406		113,406		113,406		113,406		113,406
Stockholders’ equity	1,297,922		1,262,816		1,230,131		1,096,350		1,066,629

End of period shares outstanding	43,179,134		43,105,444		42,958,803		41,036,370		40,934,623
Book value (excluding securities gains/losses)	$	26.55	$	25.78	$	25.11	$	23.02	$	22.35
Tangible book value (excluding securities gains/losses)⁽¹⁾	$	26.07	$	25.29	$	24.62	$	22.50	$	21.82

SELECTED FINANCIAL RATIOS
Net interest margin	3.77%		3.87%		3.99%		4.21%		4.21%
Return on average assets	1.07%		1.08%		1.01%		1.10%		1.25%
Return on average common equity	12.11%		11.38%		10.20%		11.94%		13.74%
Non-interest income to earning assets	.31%		.35%		.38%		.42%		.40%
Efficiency ratio⁽²⁾	52.9%		55.4%		58.4%		57.3%		52.0%
Efficiency ratio (excluding OREO valuation/write-down)⁽³⁾	52.9%		55.4%		58.4%		56.9%		52.0%
Non-interest expense to earning assets	2.16%		2.34%		2.55%		2.65%		2.40%
Non-interest expense to earning assets (excluding OREO valuation charge)	2.16%		2.34%		2.55%		2.63%		2.40%
Tangible common equity to total tangible assets⁽⁴⁾	7.9%		8.1%		8.7%		7.9%		8.3%


(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)
	September 30, 2014		September 30, 2013		% Change
Assets
Cash and due from banks	$	102,503	$	118,268	(13)%
Interest-bearing deposits	427,199		76,690		457%
Federal funds sold and securities purchased under resale agreements	−		100		(100)%
Securities, available-for-sale	43,938		67,815		(35)%
Loans held for sale from discontinued operations	288		296		(3)%
Loans held for investment, mortgage finance	3,774,467		2,262,085		67%
Loans held for investment (net of unearned income)	9,686,134		8,051,328		20%
Less: Allowance for loan losses	96,322		84,006		15%
Loans held for investment, net	13,364,279		10,229,407		31	%
Premises and equipment, net	17,640		12,653		39%
Accrued interest receivable and other assets	289,892		271,052		7%
Goodwill and intangibles, net	20,763		21,463		(3)%
Total assets	$	14,266,502	$	10,797,744	32%

Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing	$	4,722,479	$	3,242,060	46%
Interest bearing	6,586,903		5,344,152		23%
Interest bearing in foreign branches	406,426		370,869		10%
Total deposits	11,715,808		8,957,081		31%

Accrued interest payable	1,908		743		157%
Other liabilities	115,769		99,161		17%
Federal funds purchased and repurchase agreements	285,678		199,693		43%
Other borrowings	450,011		250,031		80%
Subordinated notes	286,000		111,000		158%
Trust preferred subordinated debentures	113,406		113,406		—
Total liabilities	12,968,580		9,731,115		33%

Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - 6,000,000 shares issued at September 30, 2014 and 2013	150,000		150,000		−
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 43,179,551 and 40,935,040 at September 30, 2014 and 2013, respectively	432		409		6%
Additional paid-in capital	558,822		446,249		25%
Retained earnings	587,317		468,191		25%
Treasury stock (shares at cost: 417 at September 30, 2014 and 2013)	(8)		(8)		—
Accumulated other comprehensive income, net of taxes	1,359		1,788		(24)%
Total stockholders’ equity	1,297,922		1,066,629		22%
Total liabilities and stockholders’ equity	$	14,266,502	$	10,797,744	32%



TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
	Three Months Ended September 30				Nine Months Ended September 30
	2014		2013		2014		2013
Interest income
Interest and fees on loans	$	134,618	$	114,453	$	374,724	$	324,053
Securities	428		682		1,439		2,394
Federal funds sold	68		22		116		41
Deposits in other banks	176		60		435		172
Total interest income	135,290		115,217		376,714		326,660
Interest expense
Deposits	4,606		3,699		12,882		10,172
Federal funds purchased	82		152		292		570
Repurchase agreements	5		4		13		13
Other borrowings	68		119		321		475
Subordinated notes	4,241		1,829		11,961		5,487
Trust preferred subordinated debentures	627		638		1,862		1,905
Total interest expense	9,629		6,441		27,331		18,622
Net interest income	125,661		108,776		349,383		308,038
Provision for credit losses	6,500		5,000		15,500		14,000
Net interest income after provision for credit losses	119,161		103,776		333,883		294,038
Non-interest income
Service charges on deposit accounts	1,817		1,659		5,277		5,109
Trust fee income	1,190		1,263		3,714		3,773
Bank owned life insurance (BOLI) income	517		423		1,547		1,384
Brokered loan fees	3,821		4,078		10,002		13,600
Swap fees	464		983		2,098		3,616
Other	2,587		2,025		8,647		5,358
Total non-interest income	10,396		10,431		31,285		32,840
Non-interest expense
Salaries and employee benefits	43,189		36,012		125,141		114,744
Net occupancy expense	5,279		4,342		15,120		12,334
Marketing	4,024		3,974		11,578		12,020
Legal and professional	4,874		3,937		17,457		12,584
Communications and technology	4,928		3,696		13,213		10,165
FDIC insurance assessment	2,775		4,357		8,044		6,134
Allowance and other carrying costs for OREO	5		267		61		1,179
Other	6,841		5,424		20,390		17,283
Total non-interest expense	71,915		62,009		211,004		186,443
Income from continuing operations before income taxes	57,642		52,198		154,164		140,435
Income tax expense	20,810		18,724		55,653		49,745
Income from continuing operations	36,832		33,474		98,511		90,690
Income from discontinued operations (after-tax)	−		2		7		2
Net income	36,832		33,476		98,518		90,692
Preferred stock dividends	2,438		2,437		7,313		4,956
Net income available to common stockholders	$	34,394	$	31,039	$	91,205	$	85,736

Basic earnings per common share:
Income from continuing operations	$	.80	$	.76	$	2.13	$	2.10
Net income	$	.80	$	.76	$	2.13	$	2.10

Diluted earnings per common share:
Income from continuing operations	$	.78	$	.74	$	2.09	$	2.05
Net income	$	.78	$	.74	$	2.09	$	2.05



TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
	3^rd Quarter		2^nd Quarter		1^st Quarter		4^th Quarter		3^rd Quarter
	2014		2014		2014		2013		2013
Reserve for loan losses:
Beginning balance	$	91,114	$	90,234	$	87,604	$	84,006	$	79,428
Loans charged-off:
Commercial	992		5,190		2,336		1,605		496
Real estate	—		246		50		—		13
Consumer	—		40		61		—		—
Leases	—		—		—		—		2
Total loans charged-off	992		5,476		2,447		1,605		511
Recoveries:
Commercial	330		2,940		210		225		233
Real estate	2		35		8		60		195
Consumer	35		6		25		9		19
Leases	30		18		124		43		18
Total recoveries	397		2,999		367		337		465
Net charge-offs	595		2,477		2,080		1,268		46
Provision for loan losses	5,803		3,357		4,710		4,866		4,624
Ending balance	$	96,322	$	91,114	$	90,234	$	87,604	$	84,006

Reserve for off-balance sheet credit losses:
Beginning balance	$	5,623	$	4,980	$	4,690	$	4,556	$	4,180
Provision for off-balance sheet credit losses	697		643		290		134		376
Ending balance	$	6,320	$	5,623	$	4,980	$	4,690	$	4,556

Total reserves for credit losses	$	102,642	$	96,737	$	95,214	$	92,294	$	88,562

Total provision for credit losses	$	6,500	$	4,000	$	5,000	$	5,000	$	5,000

Reserve to loans	.72%		.71%		.78%		.78%		.81%
Reserve to loans excluding mortgage finance loans⁽²⁾	.99%		1.00%		1.01%		1.03%		1.04%
Reserve to average loans	.75%		.77%		.84%		.84%		.83%
Reserve to average loans excluding mortgage finance loans⁽²⁾	1.02%		1.01%		1.04%		1.08%		1.09%
Net charge-offs to average loans⁽¹⁾	.02%		.08%		.08%		.05%		.00%
Net charge-offs to average loans excluding mortgage finance loans⁽¹⁾⁽²⁾	.03%		.11%		.10%		.06%		.00%
Net charge-offs to average loans for last twelve months⁽¹⁾	.05%		.06%		.06%		.05%		.07%
Net charge-offs to average loans, excluding mortgage finance loans, for last twelve months⁽¹⁾⁽²⁾	.07%		.07%		.07%		.07%		.10%
Total provision for credit losses to average loans⁽¹⁾	.20%		.14%		.19%		.19%		.20%
Total provision for credit losses to average loans excluding mortgage finance loans⁽¹⁾⁽²⁾	.27%		.18%		.23%		.24%		.26%
Combined reserves for credit losses to loans	.76%		.75%		.82%		.82%		.86%
Combined reserves for credit losses to loans, excluding mortgage finance loans⁽²⁾	1.06%		1.06%		1.07%		1.09%		1.10%

Non-performing assets (NPAs):
Non-accrual loans	$	37,733	$	41,565	$	43,213	$	32,375	$	35,737
Other real estate owned (OREO)	617		685		2,420		5,110		12,805
Other repossessed assets	—		—		—		—		—
Total	$	38,350	$	42,250	$	45,633	$	37,485	$	48,542



	3^rd Quarter		2^nd Quarter		1^st Quarter		4^th Quarter		3^rd Quarter
	2014		2014		2013		2013		2013

Non-accrual loans to loans	.28%		.32%		.37%		.29%		.35%
Non-accrual loans to loans excluding mortgage finance loans⁽²⁾	.39%		.45%		.48%		.38%		.44%
Total NPAs to loans plus OREO	.28%		.33%		.39%		.33%		.47%
Total NPAs to loans excluding mortgage finance loans plus OREO⁽²⁾	.40%		.46%		.51%		.44%		.60%
Total NPAs to earning assets	.28%		.32%		.39%		.33%		.47%
Reserve for loan losses to non-accrual loans	2.6x		2.2x		2.1x		2.7x		2.4x

Restructured loans	$	1,853	$	249	$	2,825	$	1,935	$	4,691
Loans past due 90 days and still accruing⁽³⁾	$	6,102	$	4,793	$	7,869	$	9,325	$	7,510

Loans past due 90 days to loans	.05%		.04%		.07%		.08%		.07%
Loans past due 90 days to loans excluding mortgage finance loans⁽²⁾	.06%		.05%		.09%		.11%		.09%


(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 September 30, 2014, loans past due 90 days and still accruing includes premium finance loans of $5.3 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 STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands)

	3^rd Quarter		2^nd Quarter		1^st Quarter		4^th Quarter		3^rd Quarter
	2014		2014		2014		2013		2013
Interest income
Interest and fees on loans	$	134,618	$	124,234	$	115,872	$	117,261	$	114,453
Securities	428		471		540		621		682
Federal funds sold	68		8		40		24		22
Deposits in other banks	176		100		159		59		60
Total interest income	135,290		124,813		116,611		117,965		115,217
Interest expense
Deposits	4,606		4,246		4,030		3,858		3,699
Federal funds purchased	82		115		95		116		152
Repurchase agreements	5		4		4		5		4
Other borrowings	68		181		72		40		119
Subordinated notes	4,241		4,241		3,479		1,840		1,829
Trust preferred subordinated debentures	627		619		616		631		638
Total interest expense	9,629		9,406		8,296		6,490		6,441
Net interest income	125,661		115,407		108,315		111,475		108,776
Provision for credit losses	6,500		4,000		5,000		5,000		5,000
Net interest income after provision for credit losses	119,161		111,407		103,315		106,475		103,776
Non-interest income
Service charges on deposit accounts	1,817		1,764		1,696		1,674		1,659
Trust fee income	1,190		1,242		1,282		1,250		1,263
Bank owned life insurance (BOLI) income	517		521		509		533		423
Brokered loan fees	3,821		3,357		2,824		3,380		4,078
Swap fees	464		410		1,224		1,904		983
Other	2,587		3,239		2,821		2,443		2,025
Total non-interest income	10,396		10,533		10,356		11,184		10,431
Non-interest expense
Salaries and employee benefits	43,189		39,896		42,056		43,008		36,012
Net occupancy expense	5,279		5,073		4,768		4,487		4,342
Marketing	4,024		3,795		3,759		4,183		3,974
Legal and professional	4,874		7,181		5,402		5,520		3,937
Communications and technology	4,928		4,361		3,924		3,597		3,696
FDIC insurance assessment	2,775		2,544		2,725		1,923		4,357
Allowance and other carrying costs for OREO	5		11		45		609		267
Litigation settlement expense	—		—		—		—		(908)
Other	6,841		6,907		6,642		6,964		6,332
Total non-interest expense	71,915		69,768		69,321		70,291		62,009
Income from continuing operations before income taxes	57,642		52,172		44,350		47,368		52,198
Income tax expense	20,810		18,754		16,089		17,012		18,724
Income from continuing operations	36,832		33,418		28,261		30,356		33,474
Income from discontinued operations (after-tax)	—		3		4		3		2
Net income	36,832		33,421		28,265		30,359		33,476
Preferred stock dividends	2,438		2,437		2,438		2,438		2,437
Net income available to common shareholders	$	34,394	$	30,984	$	25,827	$	27,921	$	31,039



TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates Continuing Operations
(Dollars in thousands)
	3^rd Quarter 2014					2^nd Quarter 2014					1^st Quarter 2014					4^th Quarter 2013					3^rd Quarter 2013
	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	$	41,716	$	383	3.64%	$	44,216	$	410	3.72%	$	47,027	$	442	3.81%	$	50,281	$	480	3.79%	$	54,838	$	522	3.78%
Securities - Non-taxable⁽²⁾	4,697		69		5.83%	6,271		94		6.01%	10,554		151		5.80%	14,786		217		5.82%	16,879		246		5.78%
Federal funds sold and securities purchased under resale agreements	105,793		68		0.26%	14,997		8		0.21%	73,746		40		0.22%	59,409		24		0.16%	78,896		22		0.11%
Deposits in other banks	283,062		176		0.25%	183,061		100		0.22%	230,296		159		0.28%	99,185		59		0.24%	88,717		60		0.27%
Loans held for investment, mortgage finance loans	3,452,782		27,275		3.13%	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%
Loans held for investment	9,423,259		107,343		4.52%	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%
Less reserve for loan losses	91,427		—		—	90,105		—		—	87,686		—		—	84,009		—		—	79,551		—		—
Loans, net of reserve	12,784,614		134,618		4.18%	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%
Total earning assets	13,219,882		135,314		4.06%	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%
Cash and other assets	409,727					396,938					382,198					378,315					383,968
Total assets	$	13,629,609				$	12,362,168				$	11,401,368				$	10,899,266				$	10,637,766

Liabilities and Stockholders’ Equity
Transaction deposits	$	1,010,003	$	287	0.11%	$	895,827	$	170	0.08%	$	782,301	$	80	0.04%	$	787,720	$	76	0.04%	$	794,630	$	102	0.05%
Savings deposits	4,991,779		3,519		0.28%	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%
Time deposits	485,558		475		0.39%	401,024		390		0.39%	375,563		351		0.38%	385,546		394		0.41%	402,920		414		0.41%
Deposits in foreign branches	369,202		325		0.35%	350,043		291		0.33%	355,857		295		0.34%	348,240		309		0.35%	357,532		320		0.36%
Total interest bearing deposits	6,856,542		4,606		0.27%	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%
Other borrowings	309,868		155		0.20%	666,405		300		0.18%	293,012		171		0.24%	314,018		161		0.20%	539,767		275		0.20%
Subordinated notes	286,000		4,241		5.88%	286,000		4,241		5.95%	227,667		3,479		6.20%	111,000		1,840		6.58%	111,000		1,829		6.54%
Trust preferred subordinated debentures	113,406		627		2.19%	113,406		619		2.19%	113,406		616		2.20%	113,406		631		2.21%	113,406		638		2.23%
Total interest bearing liabilities	7,565,816		9,629		0.50%	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%
Demand deposits	4,669,772					3,629,941					3,381,501					3,289,307					3,124,602
Other liabilities	117,418					98,595					103,514					106,461					89,640
Stockholders’ equity	1,276,603					1,241,787					1,177,054					1,077,822					1,046,477
Total liabilities and stockholders’ equity	$	13,629,609				$	12,362,168				$	11,401,368				$	10,899,266				$	10,637,766

Net interest income⁽²⁾			$	125,685				$	115,440				$	108,368				$	111,551				$	108,862
Net interest margin					3.77%					3.87%					3.99%					4.21%					4.21%


(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 - EXHIBIT - October 23, 2014

Attached files

TEXAS CAPITAL BANCSHARES INC/TX Reports