Attached files
| file | filename |
|---|---|
| 8-K - 8-K - TEXAS CAPITAL BANCSHARES INC/TX | a04232015-8k.htm |
| EX-99.2 - EXHIBIT 99.2 - TEXAS CAPITAL BANCSHARES INC/TX | q12015earningswebcast.htm |
Exhibit 99.1
April 22, 2015
MEDIA & INVESTOR CONTACT
Heather Worley, 214.932.6646
heather.worley@texascapitalbank.com
TEXAS CAPITAL BANCSHARES, INC. ANNOUNCES OPERATING RESULTS FOR Q1 2015
DALLAS - April 22, 2015 - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the first quarter of 2015.
“Our strong start in 2015 is highlighted with outstanding loan and deposit growth, and related earnings,” said Keith Cargill, CEO. “We experienced solid growth in core loans held for investment during the quarter and benefitted from the increase in refinancing activity in our mortgage finance business. The growth in demand and total deposits was exceptional and reflects continued success in our strategy to extend the duration of our low-cost funding. We are encouraged about prospects for the remainder of the year as we work to leverage our talent and capital to produce improving returns for our stockholders.”
• | Loans held for investment, excluding mortgage finance, increased 6% and total loans increased 13% on a linked quarter basis, growing 21% and 39%, respectively, from the first quarter of 2014. |
• | Mortgage finance loans increased 32% on a linked quarter basis and 101% from the first quarter of 2014. |
• | Demand deposits increased 21% and total deposits increased 11% on a linked quarter basis, growing 75% and 45%, respectively, from the first quarter of 2014. |
• | Net income decreased 7% on a linked quarter basis and increased 24% from the first quarter of 2014. |
EPS decreased 10% on a linked quarter basis, and increased 17% from the first quarter of 2014.
FINANCIAL SUMMARY
(dollars and shares in thousands)
Q1 2015 | Q1 2014 | % Change | ||||||||
QUARTERLY OPERATING RESULTS | ||||||||||
Net income | $ | 35,050 | $ | 28,265 | 24 | % | ||||
Net income available to common stockholders | $ | 32,612 | $ | 25,827 | 26 | % | ||||
Diluted EPS | $ | 0.70 | $ | 0.60 | 17 | % | ||||
ROA | 0.84 | % | 1.01 | % | ||||||
ROE | 9.82 | % | 10.2 | % | ||||||
Diluted shares | 46,368 | 43,220 | ||||||||
BALANCE SHEET | ||||||||||
Total assets | $ | 17,325,458 | $ | 12,147,070 | 43 | % | ||||
Demand deposits | 6,050,817 | 3,451,294 | 75 | % | ||||||
Total deposits | 14,122,306 | 9,729,128 | 45 | % | ||||||
Loans held for investment | 10,760,978 | 8,928,325 | 21 | % | ||||||
Loans held for investment, mortgage finance | 5,408,750 | 2,688,044 | 101 | % | ||||||
Total loans | 16,169,728 | 11,616,369 | 39 | % | ||||||
Stockholders’ equity | 1,517,958 | 1,230,131 | 23 | % | ||||||
DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income of $35.1 million and net income available to common stockholders of $32.6 million for the quarter ended March 31, 2015 compared to net income of $28.3 million and net income available to common stockholders of $25.8 million for the same period in 2014. On a fully diluted basis, earnings per common share were $.70 for the three months ended March 31, 2015 compared to $.60 for the first quarter of 2014 and $.78 for the fourth quarter of 2014. The sale of 2.5 million shares of common stock in the fourth quarter of 2014 increased diluted shares outstanding, contributing to the linked quarter decrease.
Return on average common equity (“ROE”) was 9.82 percent and return on average assets (“ROA”) was .84 percent for the first quarter of 2015, compared to 10.20 percent and 1.01 percent, respectively, for the first quarter of 2014. The ROE decrease resulted from the 8.4% increase in average common equity, reflecting the first full quarter impact of the common stock offering completed in the fourth quarter of 2014. The ROA decrease resulted from a combination of reduced yields on loans and a $1.9 billion increase in average liquidity assets, which include Federal funds sold and deposits in other banks, from the first quarter of 2014 to the first quarter of 2015.
Net interest income was $130.0 million for the first quarter of 2015, compared to $108.3 million in the first quarter of 2014 and $127.6 million for the fourth quarter of 2014. The net interest margin in the first quarter of 2015 was 3.22 percent, a 77 basis point decrease from the first quarter of 2014 and a 34 basis point decrease from the fourth quarter of 2014. The quarterly and year-over-year decreases in net interest margin are due primarily to a substantial increase in liquidity assets, as well as the growth in loans with lower average yields. The cost of total deposits and borrowed funds was 17 basis points for the first quarter of 2015, consistent with the first quarter of 2014.
Average loans, excluding mortgage finance loans, for the first quarter of 2015 were $10.5 billion, an increase of $1.8 billion, or 20 percent, from the first quarter of 2014, and an increase of $580.8 million, or 6 percent, from the fourth quarter of 2014. Average mortgage finance loans for the first quarter of 2015 were $3.7 billion, an increase of $1.7 billion, or 85 percent, from the first quarter of 2014 and an increase of $275.2 million, or 8 percent, from the fourth quarter of 2014.
Average total deposits for the first quarter of 2015 increased $4.2 billion from the first quarter of 2014 and increased $1.2 billion from the fourth quarter of 2014. Average demand deposits for the first quarter of 2015 increased $2.2 billion, or 65 percent, to $5.6 billion from $3.4 billion during the first quarter of 2014 and increased $544.2 million, or 11 percent, from the fourth quarter of 2014.
We recorded an $11.0 million provision for credit losses in the first quarter of 2015 compared to $5.0 million in the first quarter of 2014 and $6.5 million in the fourth quarter of 2014. The provision for the first quarter of 2015 was driven by the application of our methodology. The increase was primarily related to the growth in traditional loans held for investment and the anticipated downgrades in energy credits. The combined reserve at March 31, 2015 increased to 1.08 percent of loans excluding mortgage finance loans due to continuing loan growth, as compared to 1.07 percent at March 31, 2014 and 1.06 percent at December 31, 2014. In management’s opinion, the reserve is appropriate and is derived from consistent application of the methodology for establishing the adequacy of reserves for Texas Capital Bank’s loan portfolio. We experienced an increase in non-performing asset totals in the first quarter of 2015, bringing the ratio of total non-performing assets to total loans plus other real estate owned (“OREO”) to .43 percent compared to .39 percent in the first quarter of 2014 and .31 percent in the fourth quarter of 2014. Net charge-offs for the first quarter of 2015 were $3.1 million compared to net charge-offs of $2.1 million in the first quarter of 2014 and net charge-offs of $1.1 million in the fourth quarter of 2014. For the first quarter of 2015, net charge-offs were .09 percent of total loans, compared to .08 percent for the same period in 2014. At March 31, 2015, non-performing assets included OREO of $605,000 compared to $2.4 million as of March 31, 2014 and $568,000 as of December 31, 2014.
Non-interest income increased $1.9 million, or 18 percent, during the first quarter of 2015 compared to the same period of 2014. Service charges, brokered loan fees and swap fees increased $398,000, $1.4 million and $762,000, respectively, during the first quarter of 2015 compared to the same period of 2014. The increase in brokered loan fees was a result of an increase in mortgage finance volumes. Swap fees fluctuate from quarter to quarter based on the number and volume of transactions closed during the quarter. Offsetting these increases was a $550,000 decrease in other non-interest income during the first quarter of 2015 compared to the same period of 2014.
Non-interest expense for the first quarter of 2015 increased $7.2 million, or 10 percent, to $76.5 million from $69.3 million in the first quarter of 2014. The increase is primarily related to a $3.8 million increase in salaries and employee benefits expense, a $923,000 increase in net occupancy expense, a $459,000 increase in marketing expense, a $1.2 million increase in communications and technology expense and a $1.2 million increase in other non-interest expense, all of which were due to general business growth. FDIC insurance assessment expense for the first quarter of 2015 increased $1.1 million compared to the same quarter in 2014 as a result of the increase in total assets from March 31, 2014 to March 31, 2015. Partially offsetting these increases was a $1.4 million decrease in legal and professional expense during the first quarter of 2015.
Stockholders’ equity increased by 23 percent from $1.2 billion at March 31, 2014 to $1.5 billion at March 31, 2015, primarily due to the offering of 2.5 million common shares for net proceeds of $149.6 million in the fourth quarter of 2014 and retention of net income. Texas Capital Bank is well capitalized under regulatory guidelines and at March 31, 2015, our ratio of tangible common equity to total tangible assets was 7.8 percent.
2
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. These statements are not historical in nature and can generally be identified by such words as “believe,” “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “intend” and similar expressions. The information contained in this release speaks only as of its date. 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, the effects of recent declines in oil and gas prices on our customers, 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 we make with the Securities and Exchange Commission.
3
TEXAS CAPITAL BANCSHARES, INC. | |||||||||||||||
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
(Dollars in thousands except per share data) | |||||||||||||||
1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | |||||||||||
2015 | 2014 | 2014 | 2014 | 2014 | |||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
Interest income | $ | 140,908 | $ | 137,833 | $ | 135,290 | $ | 124,813 | $ | 116,611 | |||||
Interest expense | 10,899 | 10,251 | 9,629 | 9,406 | 8,296 | ||||||||||
Net interest income | 130,009 | 127,582 | 125,661 | 115,407 | 108,315 | ||||||||||
Provision for credit losses | 11,000 | 6,500 | 6,500 | 4,000 | 5,000 | ||||||||||
Net interest income after provision for credit losses | 119,009 | 121,082 | 119,161 | 111,407 | 103,315 | ||||||||||
Non-interest income | 12,267 | 11,226 | 10,396 | 10,533 | 10,356 | ||||||||||
Non-interest expense | 76,517 | 74,117 | 71,915 | 69,765 | 69,317 | ||||||||||
Income before income taxes | 54,759 | 58,191 | 57,642 | 52,175 | 44,354 | ||||||||||
Income tax expense | 19,709 | 20,357 | 20,810 | 18,754 | 16,089 | ||||||||||
Net income | 35,050 | 37,834 | 36,832 | 33,421 | 28,265 | ||||||||||
Preferred stock dividends | 2,438 | 2,437 | 2,438 | 2,437 | 2,438 | ||||||||||
Net income available to common stockholders | $ | 32,612 | $ | 35,397 | $ | 34,394 | $ | 30,984 | $ | 25,827 | |||||
Diluted EPS | $ | .70 | $ | .78 | $ | .78 | $ | .71 | $ | .60 | |||||
Diluted shares | 46,367,870 | 45,092,511 | 43,849,838 | 43,845,015 | 43,219,961 | ||||||||||
CONSOLIDATED BALANCE SHEET DATA | |||||||||||||||
Total assets | $ | 17,325,458 | $ | 15,899,946 | $ | 14,268,561 | $ | 13,534,352 | $ | 12,147,070 | |||||
Loans held for investment | 10,760,978 | 10,154,887 | 9,686,422 | 9,153,005 | 8,928,325 | ||||||||||
Loans held for investment, mortgage finance | 5,408,750 | 4,102,125 | 3,774,467 | 3,700,253 | 2,688,044 | ||||||||||
Securities | 37,649 | 41,719 | 43,938 | 49,330 | 52,960 | ||||||||||
Demand deposits | 6,050,817 | 5,011,619 | 4,722,479 | 4,181,774 | 3,451,294 | ||||||||||
Total deposits | 14,122,306 | 12,673,300 | 11,715,808 | 10,757,316 | 9,729,128 | ||||||||||
Other borrowings | 1,125,458 | 1,192,681 | 735,689 | 1,000,548 | 678,026 | ||||||||||
Subordinated notes | 286,000 | 286,000 | 286,000 | 286,000 | 286,000 | ||||||||||
Long-term debt | 113,406 | 113,406 | 113,406 | 113,406 | 113,406 | ||||||||||
Stockholders’ equity | 1,517,958 | 1,484,190 | 1,297,922 | 1,262,816 | 1,230,131 | ||||||||||
End of period shares outstanding | 45,772,245 | 45,735,007 | 43,179,134 | 43,105,444 | 42,958,803 | ||||||||||
Book value | $ | 29.89 | $ | 29.14 | $ | 26.59 | $ | 25.82 | $ | 25.14 | |||||
Tangible book value(1) | $ | 29.44 | $ | 28.69 | $ | 26.1 | $ | 25.33 | $ | 24.65 | |||||
SELECTED FINANCIAL RATIOS | |||||||||||||||
Net interest margin | 3.22 | % | 3.56 | % | 3.77 | % | 3.87 | % | 3.99 | % | |||||
Return on average assets | 0.84 | % | 1.03 | % | 1.07 | % | 1.08 | % | 1.01 | % | |||||
Return on average common equity | 9.82 | % | 11.41 | % | 12.11 | % | 11.38 | % | 10.2 | % | |||||
Non-interest income to earning assets | 0.30 | % | 0.31 | % | 0.31 | % | 0.35 | % | 0.38 | % | |||||
Efficiency ratio(2) | 53.8 | % | 53.4 | % | 52.9 | % | 55.4 | % | 58.4 | % | |||||
Non-interest expense to earning assets | 1.89 | % | 2.07 | % | 2.16 | % | 2.34 | % | 2.55 | % | |||||
Tangible common equity to total tangible assets(4) | 7.8 | % | 8.3 | % | 7.9 | % | 8.1 | % | 8.7 | % | |||||
(1) | Stockholders’ equity excluding preferred stock, 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) | 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. |
4
TEXAS CAPITAL BANCSHARES, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
(Dollars in thousands) | ||||||||
March 31, 2015 | March 31, 2014 | % Change | ||||||
Assets | ||||||||
Cash and due from banks | $ | 99,602 | $ | 111,594 | (11 | )% | ||
Interest-bearing deposits | 734,945 | 146,205 | 403 | % | ||||
Securities, available-for-sale | 37,649 | 52,960 | (29 | )% | ||||
Loans held for investment, mortgage finance | 5,408,750 | 2,688,044 | 101 | % | ||||
Loans held for investment (net of unearned income) | 10,760,978 | 8,928,325 | 21 | % | ||||
Less: Allowance for loan losses | 108,078 | 90,234 | 20 | % | ||||
Loans held for investment, net | 16,061,650 | 11,526,135 | 39 | % | ||||
Premises and equipment, net | 16,037 | 11,767 | 36 | % | ||||
Accrued interest receivable and other assets | 355,163 | 277,294 | 28 | % | ||||
Goodwill and intangibles, net | 20,412 | 21,115 | (3 | )% | ||||
Total assets | $ | 17,325,458 | $ | 12,147,070 | 43 | % | ||
Liabilities and Stockholders’ Equity | ||||||||
Liabilities: | ||||||||
Deposits: | ||||||||
Non-interest bearing | $ | 6,050,817 | $ | 3,451,294 | 75 | % | ||
Interest bearing | 7,816,310 | 5,886,363 | 33 | % | ||||
Interest bearing in foreign branches | 255,179 | 391,471 | (35 | )% | ||||
Total deposits | 14,122,306 | 9,729,128 | 45 | % | ||||
Accrued interest payable | 2,545 | 2,304 | 10 | % | ||||
Other liabilities | 157,785 | 108,075 | 47 | % | ||||
Federal funds purchased and repurchase agreements | 125,458 | 143,573 | (13 | )% | ||||
Other borrowings | 1,000,000 | 534,453 | 87 | % | ||||
Subordinated notes | 286,000 | 286,000 | — | |||||
Trust preferred subordinated debentures | 113,406 | 113,406 | — | |||||
Total liabilities | 15,807,500 | 10,916,939 | 45 | % | ||||
Stockholders’ equity: | ||||||||
Preferred stock, $.01 par value, $1,000 liquidation value: | ||||||||
Authorized shares - 10,000,000 | ||||||||
Issued shares - 6,000,000 shares issued at March 31, 2015 and 2014 | 150,000 | 150,000 | − | |||||
Common stock, $.01 par value: | ||||||||
Authorized shares - 100,000,000 | ||||||||
Issued shares - 45,772,662 and 42,959,220 at March 31, 2015 and 2014, respectively | 457 | 430 | 6 | % | ||||
Additional paid-in capital | 710,943 | 556,247 | 28 | % | ||||
Retained earnings | 655,326 | 521,939 | 26 | % | ||||
Treasury stock (shares at cost: 417 at March 31, 2015 and 2014) | (8 | ) | (8 | ) | — | |||
Accumulated other comprehensive income, net of taxes | 1,240 | 1,523 | (19 | )% | ||||
Total stockholders’ equity | 1,517,958 | 1,230,131 | 23 | % | ||||
Total liabilities and stockholders’ equity | $ | 17,325,458 | $ | 12,147,070 | 43 | % | ||
5
TEXAS CAPITAL BANCSHARES, INC. | ||||||
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||
(Dollars in thousands except per share data) | ||||||
Three Months Ended March 31 | ||||||
2015 | 2014 | |||||
Interest income | ||||||
Interest and fees on loans | $ | 139,174 | $ | 115,872 | ||
Securities | 358 | 540 | ||||
Federal funds sold | 116 | 40 | ||||
Deposits in other banks | 1,260 | 159 | ||||
Total interest income | 140,908 | 116,611 | ||||
Interest expense | ||||||
Deposits | 5,628 | 4,030 | ||||
Federal funds purchased | 68 | 95 | ||||
Repurchase agreements | 4 | 4 | ||||
Other borrowings | 390 | 72 | ||||
Subordinated notes | 4,191 | 3,479 | ||||
Trust preferred subordinated debentures | 618 | 616 | ||||
Total interest expense | 10,899 | 8,296 | ||||
Net interest income | 130,009 | 108,315 | ||||
Provision for credit losses | 11,000 | 5,000 | ||||
Net interest income after provision for credit losses | 119,009 | 103,315 | ||||
Non-interest income | ||||||
Service charges on deposit accounts | 2,094 | 1,696 | ||||
Trust fee income | 1,200 | 1,282 | ||||
Bank owned life insurance (BOLI) income | 484 | 509 | ||||
Brokered loan fees | 4,232 | 2,824 | ||||
Swap fees | 1,986 | 1,224 | ||||
Other | 2,271 | 2,821 | ||||
Total non-interest income | 12,267 | 10,356 | ||||
Non-interest expense | ||||||
Salaries and employee benefits | 45,828 | 42,056 | ||||
Net occupancy expense | 5,691 | 4,768 | ||||
Marketing | 4,218 | 3,759 | ||||
Legal and professional | 4,048 | 5,402 | ||||
Communications and technology | 5,078 | 3,924 | ||||
FDIC insurance assessment | 3,790 | 2,725 | ||||
Allowance and other carrying costs for OREO | 9 | 45 | ||||
Other | 7,855 | 6,638 | ||||
Total non-interest expense | 76,517 | 69,317 | ||||
Income before income taxes | 54,759 | 44,354 | ||||
Income tax expense | 19,709 | 16,089 | ||||
Net income | 35,050 | 28,265 | ||||
Preferred stock dividends | 2,438 | 2,438 | ||||
Net income available to common stockholders | $ | 32,612 | $ | 25,827 | ||
Basic earnings per common share: | $ | 0.71 | $ | 0.61 | ||
Diluted earnings per common share: | $ | 0.70 | $ | 0.60 | ||
6
TEXAS CAPITAL BANCSHARES, INC. | |||||||||||||||
SUMMARY OF LOAN LOSS EXPERIENCE | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | |||||||||||
2015 | 2014 | 2014 | 2014 | 2014 | |||||||||||
Reserve for loan losses: | |||||||||||||||
Beginning balance | $ | 100,954 | $ | 96,322 | $ | 91,114 | $ | 90,234 | $ | 87,604 | |||||
Loans charged-off: | |||||||||||||||
Commercial | 3,102 | 1,285 | 992 | 5,190 | 2,336 | ||||||||||
Real estate | 346 | — | — | 246 | 50 | ||||||||||
Consumer | 62 | 165 | — | 40 | 61 | ||||||||||
Leases | 3,510 | 1,450 | 992 | 5,476 | 2,447 | ||||||||||
Total loans charged-off | |||||||||||||||
Recoveries: | 286 | 190 | 329 | 2,033 | 210 | ||||||||||
Commercial | 8 | 34 | 2 | 35 | 8 | ||||||||||
Real estate | 83 | — | — | — | — | ||||||||||
Consumer | 4 | 96 | 35 | 6 | 25 | ||||||||||
Leases | 8 | 2 | 31 | 925 | 124 | ||||||||||
Total recoveries | 389 | 322 | 397 | 2,999 | 367 | ||||||||||
Net charge-offs | 3,121 | 1,128 | 595 | 2,477 | 2,080 | ||||||||||
Provision for loan losses | 10,245 | 5,760 | 5,803 | 3,357 | 4,710 | ||||||||||
Ending balance | $ | 108,078 | $ | 100,954 | $ | 96,322 | $ | 91,114 | $ | 90,234 | |||||
Reserve for off-balance sheet credit losses: | |||||||||||||||
Beginning balance | $ | 7,060 | $ | 6,320 | $ | 5,623 | $ | 4,980 | $ | 4,690 | |||||
Provision for off-balance sheet credit losses | 755 | 740 | 697 | 643 | 290 | ||||||||||
Ending balance | $ | 7,815 | $ | 7,060 | $ | 6,320 | $ | 5,623 | $ | 4,980 | |||||
Total reserves for credit losses | $ | 115,893 | $ | 108,014 | $ | 102,642 | $ | 96,737 | $ | 95,214 | |||||
Total provision for credit losses | $ | 11,000 | $ | 6,500 | $ | 6,500 | $ | 4,000 | $ | 5,000 | |||||
Reserve to loans | 0.67 | % | 0.71 | % | 0.72 | % | 0.71 | % | 0.78 | % | |||||
Reserve to loans excluding mortgage finance loans(2) | 1.00 | % | 0.99 | % | 0.99 | % | 1.00 | % | 1.01 | % | |||||
Reserve to average loans | 0.76 | % | 0.75 | % | 0.75 | % | 0.77 | % | 0.84 | % | |||||
Reserve to average loans excluding mortgage finance loans(2) | 1.03 | % | 1.02 | % | 1.02 | % | 1.01 | % | 1.04 | % | |||||
Net charge-offs to average loans(1) | 0.09 | % | 0.03 | % | 0.02 | % | 0.08 | % | 0.08 | % | |||||
Net charge-offs to average loans excluding mortgage finance loans(1)(2) | 0.12 | % | 0.05 | % | 0.03 | % | 0.11 | % | 0.10 | % | |||||
Net charge-offs to average loans for last twelve months(1) | 0.06 | % | 0.05 | % | 0.05 | % | 0.06 | % | 0.06 | % | |||||
Net charge-offs to average loans, excluding mortgage finance loans, for last twelve months(1)(2) | 0.08 | % | 0.07 | % | 0.07 | % | 0.07 | % | 0.07 | % | |||||
Total provision for credit losses to average loans(1) | 0.31 | % | 0.19 | % | 0.20 | % | 0.14 | % | 0.19 | % | |||||
Total provision for credit losses to average loans excluding mortgage finance loans(1)(2) | 0.42 | % | 0.26 | % | 0.27 | % | 0.18 | % | 0.23 | % | |||||
Combined reserves for credit losses to loans | 0.72 | % | 0.76 | % | 0.76 | % | 0.75 | % | 0.82 | % | |||||
Combined reserves for credit losses to loans, excluding mortgage finance loans(2) | 1.08 | % | 1.06 | % | 1.06 | % | 1.06 | % | 1.07 | % | |||||
Non-performing assets (NPAs): | |||||||||||||||
Non-accrual loans | $ | 68,307 | $ | 43,304 | $ | 37,733 | $ | 41,565 | $ | 43,213 | |||||
Other real estate owned (OREO) | 605 | 568 | 617 | 685 | 2,420 | ||||||||||
Total | $ | 68,912 | $ | 43,872 | $ | 38,350 | $ | 42,250 | $ | 45,633 | |||||
7
1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | |||||||||||
2015 | 2014 | 2014 | 2014 | 2014 | |||||||||||
Non-accrual loans to loans | 0.42 | % | 0.30 | % | 0.28 | % | 0.32 | % | 0.37 | % | |||||
Non-accrual loans to loans excluding mortgage finance loans(2) | 0.63 | % | 0.43 | % | 0.39 | % | 0.45 | % | 0.48 | % | |||||
Total NPAs to loans plus OREO | 0.43 | % | 0.31 | % | 0.28 | % | 0.33 | % | 0.39 | % | |||||
Total NPAs to loans excluding mortgage finance loans plus OREO(2) | 0.64 | % | 0.43 | % | 0.40 | % | 0.46 | % | 0.51 | % | |||||
Total NPAs to earning assets | 0.41 | % | 0.28 | % | 0.28 | % | 0.32 | % | 0.39 | % | |||||
Reserve for loan losses to non-accrual loans | 1.6x | 2.3x | 2.6x | 2.2x | 2.1x | ||||||||||
Restructured loans | $ | 319 | $ | 1,806 | $ | 1,853 | $ | 249 | $ | 2,825 | |||||
Loans past due 90 days and still accruing(3) | $ | 2,971 | $ | 5,274 | $ | 6,102 | $ | 4,793 | $ | 7,869 | |||||
Loans past due 90 days to loans | 0.02 | % | 0.04 | % | 0.05 | % | 0.04 | % | 0.07 | % | |||||
Loans past due 90 days to loans excluding mortgage finance loans(2) | 0.03 | % | 0.05 | % | 0.06 | % | 0.05 | % | 0.09 | % | |||||
(1) | Interim period ratios are annualized. |
(2) | 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 March 31, 2015, loans past due 90 days and still accruing includes premium finance loans of $2.8 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. |
8
TEXAS CAPITAL BANCSHARES, INC. | |||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | |||||||||||
2015 | 2014 | 2014 | 2014 | 2014 | |||||||||||
Interest income | |||||||||||||||
Interest and fees on loans | $ | 139,174 | $ | 136,882 | $ | 134,618 | $ | 124,234 | $ | 115,872 | |||||
Securities | 358 | 389 | 428 | 471 | 540 | ||||||||||
Federal funds sold | 116 | 91 | 68 | 8 | 40 | ||||||||||
Deposits in other banks | 1,260 | 471 | 176 | 100 | 159 | ||||||||||
Total interest income | 140,908 | 137,833 | 135,290 | 124,813 | 116,611 | ||||||||||
Interest expense | |||||||||||||||
Deposits | 5,628 | 5,263 | 4,606 | 4,246 | 4,030 | ||||||||||
Federal funds purchased | 68 | 81 | 82 | 115 | 95 | ||||||||||
Repurchase agreements | 4 | 4 | 5 | 4 | 4 | ||||||||||
Other borrowings | 390 | 35 | 68 | 181 | 72 | ||||||||||
Subordinated notes | 4,191 | 4,241 | 4,241 | 4,241 | 3,479 | ||||||||||
Trust preferred subordinated debentures | 618 | 627 | 627 | 619 | 616 | ||||||||||
Total interest expense | 10,899 | 10,251 | 9,629 | 9,406 | 8,296 | ||||||||||
Net interest income | 130,009 | 127,582 | 125,661 | 115,407 | 108,315 | ||||||||||
Provision for credit losses | 11,000 | 6,500 | 6,500 | 4,000 | 5,000 | ||||||||||
Net interest income after provision for credit losses | 119,009 | 121,082 | 119,161 | 111,407 | 103,315 | ||||||||||
Non-interest income | |||||||||||||||
Service charges on deposit accounts | 2,094 | 1,976 | 1,817 | 1,764 | 1,696 | ||||||||||
Trust fee income | 1,200 | 1,223 | 1,190 | 1,242 | 1,282 | ||||||||||
Bank owned life insurance (BOLI) income | 484 | 520 | 517 | 521 | 509 | ||||||||||
Brokered loan fees | 4,232 | 3,979 | 3,821 | 3,357 | 2,824 | ||||||||||
Swap fees | 1,986 | 894 | 464 | 410 | 1,224 | ||||||||||
Other | 2,271 | 2,634 | 2,587 | 3,239 | 2,821 | ||||||||||
Total non-interest income | 12,267 | 11,226 | 10,396 | 10,533 | 10,356 | ||||||||||
Non-interest expense | |||||||||||||||
Salaries and employee benefits | 45,828 | 43,910 | 43,189 | 39,896 | 42,056 | ||||||||||
Net occupancy expense | 5,691 | 5,746 | 5,279 | 5,073 | 4,768 | ||||||||||
Marketing | 4,218 | 4,411 | 4,024 | 3,795 | 3,759 | ||||||||||
Legal and professional | 4,048 | 3,725 | 4,874 | 7,181 | 5,402 | ||||||||||
Communications and technology | 5,078 | 5,454 | 4,928 | 4,361 | 3,924 | ||||||||||
FDIC insurance assessment | 3,790 | 2,875 | 2,775 | 2,544 | 2,725 | ||||||||||
Allowance and other carrying costs for OREO | 9 | 24 | 5 | 11 | 45 | ||||||||||
Other | 7,855 | 7,972 | 6,841 | 6,904 | 6,638 | ||||||||||
Total non-interest expense | 76,517 | 74,117 | 71,915 | 69,765 | 69,317 | ||||||||||
Income before income taxes | 54,759 | 58,191 | 57,642 | 52,175 | 44,354 | ||||||||||
Income tax expense | 19,709 | 20,357 | 20,810 | 18,754 | 16,089 | ||||||||||
Net income | 35,050 | 37,834 | 36,832 | 33,421 | 28,265 | ||||||||||
Preferred stock dividends | 2,438 | 2,437 | 2,438 | 2,437 | 2,438 | ||||||||||
Net income available to common shareholders | $ | 32,612 | $ | 35,397 | $ | 34,394 | $ | 30,984 | $ | 25,827 | |||||
9
TEXAS CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||||||||||||||||||||||
QUARTERLY FINANCIAL SUMMARY - UNAUDITED | ||||||||||||||||||||||||||||||||||||||||||||
Consolidated Daily Average Balances, Average Yields and Rates Continuing Operations | ||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
1st Quarter 2015 | 4th Quarter 2014 | 3rd Quarter 2014 | 2nd Quarter 2014 | 1st Quarter 2014 | ||||||||||||||||||||||||||||||||||||||||
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 | $ | 37,145 | $ | 332 | 3.62 | % | $ | 39,258 | $ | 355 | 3.59 | % | $ | 41,716 | $ | 383 | 3.64 | % | $ | 44,216 | $ | 410 | 3.72 | % | $ | 47,027 | $ | 442 | 3.81 | % | ||||||||||||||
Securities - Non-taxable(2) | 2,785 | 40 | 5.82 | % | 3,257 | 52 | 6.33 | % | 4,697 | 69 | 5.83 | % | 6,271 | 94 | 6.01 | % | 10,554 | 151 | 5.80 | % | ||||||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 191,297 | 116 | 0.25 | % | 139,761 | 91 | 0.26 | % | 105,793 | 68 | 0.26 | % | 14,997 | 8 | 0.21 | % | 73,746 | 40 | 0.22 | % | ||||||||||||||||||||||||
Deposits in other banks | 2,019,567 | 1,260 | 0.25 | % | 742,240 | 471 | 0.25 | % | 283,062 | 176 | 0.25 | % | 183,061 | 100 | 0.22 | % | 230,296 | 159 | 0.28 | % | ||||||||||||||||||||||||
Loans held for investment, mortgage finance loans | 3,746,938 | 27,631 | 2.99 | % | 3,471,737 | 26,773 | 3.06 | % | 3,452,782 | 27,275 | 3.13 | % | 2,822,560 | 23,231 | 3.30 | % | 2,027,264 | 16,782 | 3.36 | % | ||||||||||||||||||||||||
Loans held for investment | 10,502,172 | 111,543 | 4.31 | % | 9,921,323 | 110,109 | 4.40 | % | 9,423,259 | 107,343 | 4.52 | % | 8,984,230 | 101,003 | 4.51 | % | 8,717,969 | 99,090 | 4.61 | % | ||||||||||||||||||||||||
Less reserve for loan losses | 101,042 | — | — | 96,139 | — | — | 91,427 | — | — | 90,105 | — | — | 87,686 | — | — | |||||||||||||||||||||||||||||
Loans, net of reserve | 14,148,068 | 139,174 | 3.99 | % | 13,296,921 | 136,882 | 4.08 | % | 12,784,614 | 134,618 | 4.18 | % | 11,716,685 | 124,234 | 4.25 | % | 10,657,547 | 115,872 | 4.41 | % | ||||||||||||||||||||||||
Total earning assets | 16,398,862 | 140,922 | 3.49 | % | 14,221,437 | 137,851 | 3.85 | % | 13,219,882 | 135,314 | 4.06 | % | 11,965,230 | 124,846 | 4.19 | % | 11,019,170 | 116,664 | 4.29 | % | ||||||||||||||||||||||||
Cash and other assets | 459,030 | 409,635 | 409,727 | 396,938 | 382,198 | |||||||||||||||||||||||||||||||||||||||
Total assets | $ | 16,857,892 | $ | 14,631,072 | $ | 13,629,609 | $ | 12,362,168 | $ | 11,401,368 | ||||||||||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||
Transaction deposits | $ | 1,401,626 | $ | 444 | 0.13 | % | $ | 1,150,530 | $ | 401 | 0.14 | % | $ | 1,010,003 | $ | 287 | 0.11 | % | $ | 895,827 | $ | 170 | 0.08 | % | $ | 782,301 | $ | 80 | 0.04 | % | ||||||||||||||
Savings deposits | 5,891,344 | 4,420 | 0.30 | % | 5,479,395 | 4,121 | 0.30 | % | 4,991,779 | 3,519 | 0.28 | % | 4,679,140 | 3,395 | 0.29 | % | 4,591,493 | 3,304 | 0.29 | % | ||||||||||||||||||||||||
Time deposits | 447,681 | 506 | 0.46 | % | 406,040 | 413 | 0.40 | % | 485,558 | 475 | 0.39 | % | 401,024 | 390 | 0.39 | % | 375,563 | 351 | 0.38 | % | ||||||||||||||||||||||||
Deposits in foreign branches | 304,225 | 258 | 0.34 | % | 369,471 | 328 | 0.35 | % | 369,202 | 325 | 0.35 | % | 350,043 | 291 | 0.33 | % | 355,857 | 295 | 0.34 | % | ||||||||||||||||||||||||
Total interest bearing deposits | 8,044,876 | 5,628 | 0.28 | % | 7,405,436 | 5,263 | 0.28 | % | 6,856,542 | 4,606 | 0.27 | % | 6,326,034 | 4,246 | 0.27 | % | 6,105,214 | 4,030 | 0.27 | % | ||||||||||||||||||||||||
Other borrowings | 1,172,675 | 462 | 0.16 | % | 251,449 | 120 | 0.19 | % | 309,868 | 155 | 0.20 | % | 666,405 | 300 | 0.18 | % | 293,012 | 171 | 0.24 | % | ||||||||||||||||||||||||
Subordinated notes | 286,000 | 4,191 | 5.94 | % | 286,000 | 4,241 | 5.88 | % | 286,000 | 4,241 | 5.88 | % | 286,000 | 4,241 | 5.95 | % | 227,667 | 3,479 | 6.20 | % | ||||||||||||||||||||||||
Trust preferred subordinated debentures | 113,406 | 618 | 2.21 | % | 113,406 | 627 | 2.19 | % | 113,406 | 627 | 2.19 | % | 113,406 | 619 | 2.19 | % | 113,406 | 616 | 2.20 | % | ||||||||||||||||||||||||
Total interest bearing liabilities | 9,616,957 | 10,899 | 0.46 | % | 8,056,291 | 10,251 | 0.50 | % | 7,565,816 | 9,629 | 0.50 | % | 7,391,845 | 9,406 | 0.51 | % | 6,739,299 | 8,296 | 0.50 | % | ||||||||||||||||||||||||
Demand deposits | 5,592,124 | 5,047,876 | 4,669,772 | 3,629,941 | 3,381,501 | |||||||||||||||||||||||||||||||||||||||
Other liabilities | 152,639 | 146,259 | 117,418 | 98,595 | 103,514 | |||||||||||||||||||||||||||||||||||||||
Stockholders’ equity | 1,496,172 | 1,380,646 | 1,276,603 | 1,241,787 | 1,177,054 | |||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 16,857,892 | $ | 14,631,072 | $ | 13,629,609 | $ | 12,362,168 | $ | 11,401,368 | ||||||||||||||||||||||||||||||||||
Net interest income(2) | $ | 130,023 | $ | 127,600 | $ | 125,685 | $ | 115,440 | $ | 108,368 | ||||||||||||||||||||||||||||||||||
Net interest margin | 3.22 | % | 3.56 | % | 3.77 | % | 3.87 | % | 3.99 | % | ||||||||||||||||||||||||||||||||||
(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. |
10