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

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EX-99.2 - EXHIBIT 99.2 EARNINGS PRESENTATION - TEXAS CAPITAL BANCSHARES INC/TX	q22016earningswebcast.pdf
8-K - 8-K - TEXAS CAPITAL BANCSHARES INC/TX	a07202016-8k.htm

Exhibit 99.1

July 20, 2016

MEDIA & INVESTOR CONTACT

Heather Worley, 214.932.6646

heather.worley@texascapitalbank.com

TEXAS CAPITAL BANCSHARES, INC. ANNOUNCES OPERATING RESULTS FOR Q2 2016

DALLAS - July 20, 2016 - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the second quarter of 2016.

“We are extremely pleased with our second quarter results, highlighted with strong loan and deposit growth and much improved earnings," said Keith Cargill, CEO. "Our focus on proactively managing credit is ongoing. Our continued ability to attract great talent drives our growth and solidifies our outlook for a bright future, despite the challenging environment."


•	Loans held for investment ("LHI"), excluding mortgage finance, increased 4% and total LHI increased 4% on a linked quarter basis, growing 12% and 11%, respectively, from the second quarter of 2015.


•	Mortgage finance loans increased 6% on a linked quarter basis and increased 7% from the second quarter of 2015.


•	Demand deposits increased 7% and total deposits increased 2% on a linked quarter basis, growing 23% and 18%, respectively, from the second quarter of 2015.


•	Net income increased 55% on a linked quarter basis and increased 2% from the second quarter of 2015.


•	EPS increased 59% on a linked quarter basis and increased 3% from the second quarter of 2015.

FINANCIAL SUMMARY

(dollars and shares in thousands)



	Q2 2016			Q2 2015			% Change
QUARTERLY OPERATING RESULTS
Net income	$	38,880		$	37,937		2	%
Net income available to common stockholders	$	36,443		$	35,500		3	%
Diluted EPS	$	0.78		$	0.76		3	%
Diluted shares	46,438			46,443			—	%
ROA	0.77		%	0.83		%
ROE	9.65		%	10.32		%

BALANCE SHEET
Loans held for sale	$	221,347		$	—		100	%
LHI, mortgage finance	5,260,027			4,906,415			7	%
LHI	12,502,513			11,123,325			12	%
Total LHI	17,762,540			16,029,740			11	%
Total assets	21,080,994			17,818,030			18	%
Demand deposits	7,984,208			6,479,073			23	%
Total deposits	16,703,565			14,188,276			18	%
Stockholders’ equity	1,684,735			1,554,529			8	%
Tangible book value per share	$	32.97		$	30.22		9	%

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income of $38.9 million and net income available to common stockholders of $36.4 million for the quarter ended June 30, 2016 compared to net income of $37.9 million and net income available to common stockholders of $35.5 million for the same period in 2015. On a fully diluted basis, earnings per common share were $0.78 for the quarter ended June 30, 2016 compared to $0.76 for the same period of 2015.

Return on average common equity (“ROE”) was 9.65 percent and return on average assets (“ROA”) was 0.77 percent for the second quarter of 2016, compared to 6.13 percent and 0.53 percent, respectively, for the first quarter of 2016 and 10.32 percent and 0.83 percent, respectively, for the second quarter of 2015. The linked quarter increase in ROE resulted from a decrease in the provision for credit losses for the second quarter of 2016, and the year-over-year decrease resulted from continued overall low interest rates which have limited our net interest income expansion. The linked quarter increase in ROA resulted from a decrease in the provision for credit losses for the second quarter of 2016, and the year-over-year decrease resulted from continued low interest rates, as well as an $879.7 million increase in average liquidity assets, which include Federal funds sold and deposits in other banks. Average liquidity assets for the second quarter of 2016 totaled $3.2 billion, including $2.9 billion in deposits at the Federal Reserve Bank of Dallas, which had an average yield of 53 basis points, compared to $2.1 billion for the second quarter of 2015, which had an average yield of 25 basis points.

Net interest income was $157.1 million for the second quarter of 2016, compared to $144.8 million for the first quarter of 2016 and $142.3 million for the second quarter of 2015. Net interest margin for the second quarter of 2016 was 3.18 percent, a 5 basis point increase from the first quarter of 2016 and a 4 basis point decrease from the second quarter of 2015. The linked quarter increase in net interest margin is due primarily to growth in traditional LHI with higher yields. The year-over-year decrease in net interest margin is due primarily to the increase in liquidity assets as well as an increase in deposits and borrowings with higher average cost.

Average LHI, excluding mortgage finance loans, for the second quarter of 2016 were $12.3 billion, an increase of $365.5 million, or 3 percent, from the first quarter of 2016 and an increase of $1.3 billion, or 12 percent, from the second quarter of 2015. Average mortgage finance loans for the second quarter of 2016 were $4.4 billion, an increase of $687.6 million, or 18 percent, from the first quarter of 2016 and a decrease of $161.4 million, or 4 percent, from the second quarter of 2015. Average loans held for sale generated from our Mortgage Correspondent Aggregation business increased to $157.9 million for the second quarter of 2016 from $126.1 million for the first quarter of 2016 as we continue to gain traction in that business.

Average total deposits for the second quarter of 2016 increased $1.3 billion from the first quarter of 2016 and increased $2.3 billion from the second quarter of 2015. Average demand deposits for the second quarter of 2016 increased to $7.8 billion, a $1.1 billion increase, or 15 percent, from $6.7 billion from the first quarter of 2016, and a $1.0 billion increase, or 14 percent, from $6.8 billion during the second quarter of 2015.

We recorded a $16.0 million provision for credit losses for the second quarter of 2016 compared to $30.0 million for the first quarter of 2016 and $14.5 million for the second quarter of 2015. The provision for the second quarter of 2016 was driven by the application of our methodology. The year-over-year increase was primarily related to a change in applied risk weights, which are based in part on historical loss experience, as well as changes in the composition of our pass-rated and classified loan portfolios, primarily related to energy loans, and growth in traditional LHI, excluding mortgage finance loans. The combined allowance for credit losses at June 30, 2016 decreased to 1.41 percent of LHI excluding mortgage finance loans as compared to 1.43 percent at March 31, 2016 and increased from 1.14 percent at June 30, 2015. The year-over-year increase derived from increases in the provision for credit losses primarily related to energy as well as continuing loan growth in 2016. In management’s opinion, the allowance is appropriate and is derived from consistent application of the methodology for establishing reserves for Texas Capital Bank’s loan portfolio.

We experienced a slight decrease in non-performing assets in the second quarter of 2016 on a linked quarter basis, bringing the ratio of total non-performing assets to total LHI plus other real estate owned (“OREO”) to 1.04 percent compared 1.12 percent for the first quarter of 2016 and 0.77 percent for the second quarter of 2015. The year-over-year increase is primarily related to energy loans, which was expected as energy prices remained low through 2015 and the first half of 2016. Net charge-offs for the second quarter of 2016 were $12.0 million compared to $7.4 million for the first quarter of 2016 and $3.7 million for the second quarter of 2015. The increase in net charge-offs resulted from realizing losses for which reserves had been provided in previous quarters. For the second quarter of 2016, total charge-offs related to energy loans were $12.1 million compared to $5.9 million for the first quarter of 2016. For the second quarter of 2016, net charge-offs were 0.29 percent of total LHI, compared to 0.19 percent for the first quarter of 2016 and 0.10 percent for the same period in 2015. At June 30, 2016, total OREO was $18.7 million compared to $17.6 million at March 31, 2016 and $609,000 at June 30, 2015. The year-over-year increase was due primarily to the foreclosure of a commercial property during the first quarter of 2016.

Non-interest income increased $1.2 million, or 9 percent, during the second quarter of 2016 compared to the same period of 2015, primarily related to an increase in brokered loan fees and service charges. Brokered loan fees increased $587,000 during the second quarter of 2016 compared to the same period of 2015 as a result of an increase in mortgage finance volumes. Service charges increased $262,000 during the second quarter of 2016 compared to the same period of 2015 as a result of the increase in deposit balances and improved pricing.

Non-interest expense for the second quarter of 2016 increased $13.0 million, or 16 percent, compared to the second quarter of 2015. The increase is primarily related to a $6.6 million increase in salaries and employee benefits expense, a $561,000 increase in marketing expense, a $608,000 increase in legal and professional expense and a $744,000 increase in communications and technology expense, all of which were due to general business growth. FDIC insurance assessment expense for the second quarter of 2016 increased $1.8 million compared to the same quarter in 2015 as a result of the increase in total assets from June 30, 2015 to June 30, 2016.

Stockholders’ equity increased by 8 percent from $1.5 billion at June 30, 2015 to $1.7 billion at June 30, 2016, primarily due to retention of net income. Texas Capital Bank is well capitalized under regulatory guidelines and at June 30, 2016, our ratio of tangible common equity to total tangible assets was 7.2 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. 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. 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, the credit quality of our loan portfolio, general economic conditions in the United States and in our markets, including the continued impact on our customers from declines and volatility in oil and gas prices, rates of default or loan losses, volatility in the mortgage industry, the success or failure of our business strategies, future financial performance, future growth and earnings, the appropriateness of our allowance for loan losses and provision for credit losses, the impact of increased regulatory requirements and legislative changes on our business, increased competition, interest rate risk, the success or failure of new lines of business and new product or service offerings and the impact of new technologies. These and other factors that could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission. 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.



TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
	2nd Quarter			1st Quarter			4th Quarter			3rd Quarter			2nd Quarter
	2016			2016			2015			2015			2015
CONSOLIDATED STATEMENTS OF INCOME
Interest income	$	172,442		$	159,803		$	154,820		$	153,856		$	153,374
Interest expense	15,373			15,020			12,632			11,808			11,089
Net interest income	157,069			144,783			142,188			142,048			142,285
Provision for credit losses	16,000			30,000			14,000			13,750			14,500
Net interest income after provision for credit losses	141,069			114,783			128,188			128,298			127,785
Non-interest income	13,932			11,297			11,320			11,380			12,771
Non-interest expense	94,255			86,820			87,042			81,688			81,276
Income before income taxes	60,746			39,260			52,466			57,990			59,280
Income tax expense	21,866			14,132			17,713			20,876			21,343
Net income	38,880			25,128			34,753			37,114			37,937
Preferred stock dividends	2,437			2,438			2,437			2,438			2,437
Net income available to common stockholders	$	36,443		$	22,690		$	32,316		$	34,676		$	35,500

Diluted EPS	$	0.78		$	0.49		$	0.70		$	0.75		$	0.76
Diluted shares	46,438,132			46,354,378			46,479,845			46,471,390			46,443,413

CONSOLIDATED BALANCE SHEET DATA
Total assets	$	21,080,994		$	20,210,893		$	18,903,821		$	18,666,708		$	17,818,030
LHI	12,502,513			12,059,849			11,745,674			11,562,828			11,123,325
LHI, mortgage finance	5,260,027			4,981,304			4,966,276			4,312,790			4,906,415
Loans held for sale, at fair value	221,347			94,702			86,075			1,062			—
Liquidity assets	2,624,170			2,644,418			1,681,374			2,345,192			1,337,364
Securities	27,372			28,461			29,992			31,998			35,361
Demand deposits	7,984,208			7,455,107			6,386,911			6,545,273			6,479,073
Total deposits	16,703,565			16,298,847			15,084,619			15,165,345			14,188,276
Other borrowings	2,115,445			1,704,859			1,643,051			1,353,834			1,509,007
Subordinated notes	280,863			280,773			280,682			280,592			280,501
Long-term debt	113,406			113,406			113,406			113,406			113,406
Stockholders’ equity	1,684,735			1,647,088			1,623,533			1,590,051			1,554,529

End of period shares outstanding	45,952,911			45,902,489			45,873,807			45,839,364			45,812,971
Book value	$	33.40		$	32.61		$	32.12		$	31.42		$	30.66
Tangible book value⁽¹⁾	$	32.97		$	32.18		$	31.69		$	30.98		$	30.22

SELECTED FINANCIAL RATIOS
Net interest margin	3.18		%	3.13		%	3.01		%	3.12		%	3.22		%
Return on average assets	0.77		%	0.53		%	0.72		%	0.79		%	0.83		%
Return on average common equity	9.65		%	6.13		%	8.82		%	9.69		%	10.32		%
Non-interest income to earning assets	0.28		%	0.24		%	0.24		%	0.25		%	0.29		%
Efficiency ratio⁽²⁾	55.1		%	55.6		%	56.7		%	53.2		%	52.4		%
Non-interest expense to earning assets	1.91		%	1.88		%	1.84		%	1.80		%	1.84		%
Tangible common equity to total tangible assets⁽³⁾	7.2		%	7.3		%	7.7		%	7.6		%	7.8		%
Common Equity Tier 1	7.4		%	7.5		%	7.5		%	7.7		%	7.4		%
Tier 1 capital	8.6		%	8.8		%	8.8		%	9.1		%	8.8		%
Total capital	10.9		%	11.1		%	11.1		%	11.4		%	11.0		%
Leverage	8.7		%	9.1		%	8.9		%	9.1		%	9.0		%


(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.



TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
	June 30, 2016			June 30, 2015			% Change
Assets
Cash and due from banks	$	98,807		$	117,387		(16	)%
Interest-bearing deposits	2,594,170			1,321,064			96	%
Federal funds sold and securities purchased under resale agreements	30,000			16,300			100	%
Securities, available-for-sale	27,372			35,361			(23	)%
Loans held for sale, at fair value	221,347			—			100	%
LHI, mortgage finance	5,260,027			4,906,415			7	%
LHI (net of unearned income)	12,502,513			11,123,325			12	%
Less: Allowance for loan losses	167,397			118,770			41	%
LHI, net	17,595,143			15,910,970			11	%
Mortgage servicing rights, net	8,543			—			100	%
Premises and equipment, net	21,766			24,141			(10	)%
Accrued interest receivable and other assets	464,098			372,570			25	%
Goodwill and intangibles, net	19,748			20,237			(2	)%
Total assets	$	21,080,994		$	17,818,030		18	%

Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing	$	7,984,208		$	6,479,073		23	%
Interest bearing	8,719,357			7,502,937			16	%
Interest bearing in foreign branches	—			206,266			(100	)%
Total deposits	16,703,565			14,188,276			18	%

Accrued interest payable	5,339			4,905			9	%
Other liabilities	177,641			167,405			6	%
Federal funds purchased and repurchase agreements	95,982			109,007			(12	)%
Other borrowings	2,019,463			1,400,000			44	%
Subordinated notes	280,863			280,502			—
Trust preferred subordinated debentures	113,406			113,406			—
Total liabilities	19,396,259			16,263,501			19	%

Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - 6,000,000 shares issued at June 30, 2016 and 2015	150,000			150,000			−
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 45,953,328 and 45,813,388 at June 30, 2016 and 2015, respectively	460			458			—	%
Additional paid-in capital	716,652			712,222			1	%
Retained earnings	816,951			690,826			18	%
Treasury stock (shares at cost: 417 at June 30, 2016 and 2015)	(8		)	(8		)	—
Accumulated other comprehensive income, net of taxes	680			1,031			(34	)%
Total stockholders’ equity	1,684,735			1,554,529			8	%
Total liabilities and stockholders’ equity	$	21,080,994		$	17,818,030		18	%



TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
	Three Months Ended June 30				Six Months Ended June 30
	2016		2015		2016		2015
Interest income
Interest and fees on loans	$	168,064	$	151,606	$	323,949	$	290,780
Securities	246		323		507		681
Federal funds sold	382		118		754		234
Deposits in other banks	3,750		1,327		7,035		2,587
Total interest income	172,442		153,374		332,245		294,282
Interest expense
Deposits	8,971		5,642		17,793		11,270
Federal funds purchased	110		93		236		161
Repurchase agreements	2		4		5		8
Other borrowings	1,365		528		2,527		918
Subordinated notes	4,191		4,191		8,382		8,382
Trust preferred subordinated debentures	734		631		1,450		1,249
Total interest expense	15,373		11,089		30,393		21,988
Net interest income	157,069		142,285		301,852		272,294
Provision for credit losses	16,000		14,500		46,000		25,500
Net interest income after provision for credit losses	141,069		127,785		255,852		246,794
Non-interest income
Service charges on deposit accounts	2,411		2,149		4,521		4,243
Trust fee income	1,098		1,287		1,911		2,487
Bank owned life insurance (BOLI) income	536		476		1,072		960
Brokered loan fees	5,864		5,277		10,509		9,509
Swap fees	1,105		1,035		1,412		3,021
Other	2,918		2,547		5,804		4,818
Total non-interest income	13,932		12,771		25,229		25,038
Non-interest expense
Salaries and employee benefits	54,810		48,200		106,182		94,028
Net occupancy expense	5,838		5,808		11,650		11,499
Marketing	4,486		3,925		8,394		8,143
Legal and professional	6,226		5,618		11,550		9,666
Communications and technology	6,391		5,647		12,608		10,725
FDIC insurance assessment	6,043		4,211		11,512		8,001
Allowance and other carrying costs for OREO	260		6		496		15
Other	10,201		7,861		18,683		15,716
Total non-interest expense	94,255		81,276		181,075		157,793
Income before income taxes	60,746		59,280		100,006		114,039
Income tax expense	21,866		21,343		35,998		41,052
Net income	38,880		37,937		64,008		72,987
Preferred stock dividends	2,437		2,437		4,875		4,875
Net income available to common stockholders	$	36,443	$	35,500	$	59,133	$	68,112

Basic earnings per common share	$	0.79	$	0.78	$	1.29	$	1.49
Diluted earnings per common share	$	0.78	$	0.76	$	1.27	$	1.47



TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
	2nd Quarter			1st Quarter			4th Quarter			3rd Quarter			2nd Quarter
	2016			2016			2015			2015			2015
Allowance for loan losses:
Beginning balance	$	162,510		$	141,111		$	130,540		$	118,770		$	108,078
Loans charged-off:
Commercial	15,791			8,496			4,976			2,758			5,418
Real estate	528			—			43			—			—
Consumer	—			—			—			—			—
Leases	—			—			—			25			—
Total charge-offs	16,319			8,496			5,019			2,783			5,418
Recoveries:
Commercial	4,294			1,040			2,846			388			1,424
Real estate	13			8			5			8			12
Construction	34			—			3			42			272
Consumer	4			7			154			9			6
Leases	—			45			11			4			15
Total recoveries	4,345			1,100			3,019			451			1,729
Net charge-offs	11,974			7,396			2,000			2,332			3,689
Provision for loan losses	16,861			28,795			12,571			14,102			14,381
Ending balance	$	167,397		$	162,510		$	141,111		$	130,540		$	118,770

Allowance for off-balance sheet credit losses:
Beginning balance	$	10,216		$	9,011		$	7,582		$	7,934		$	7,815
Provision for off-balance sheet credit losses	(861		)	1,205			1,429			(352		)	119
Ending balance	$	9,355		$	10,216		$	9,011		$	7,582		$	7,934

Total allowance for credit losses	$	176,752		$	172,726		$	150,122		$	138,122		$	126,704

Total provision for credit losses	$	16,000		$	30,000		$	14,000		$	13,750		$	14,500

Allowance for loan losses to LHI	0.94		%	0.95		%	0.84		%	0.82		%	0.74		%
Allowance for loan losses to LHI excluding mortgage finance loans(2)	1.34		%	1.35		%	1.20		%	1.13		%	1.07		%
Allowance for loan losses to average LHI	1.00		%	1.04		%	0.92		%	0.85		%	0.77		%
Allowance for loan losses to average LHI excluding mortgage finance loans(2)	1.36		%	1.36		%	1.21		%	1.15		%	1.09		%
Net charge-offs to average LHI⁽¹⁾	0.29		%	0.19		%	0.05		%	0.06		%	0.10		%
Net charge-offs to average LHI excluding mortgage finance loans⁽¹⁾⁽²⁾	0.39		%	0.25		%	0.07		%	0.08		%	0.14		%
Net charge-offs to average LHI for last twelve months⁽¹⁾	0.15		%	0.10		%	0.07		%	0.07		%	0.06		%
Net charge-offs to average LHI, excluding mortgage finance loans, for last twelve months⁽¹⁾⁽²⁾	0.20		%	0.14		%	0.10		%	0.10		%	0.08		%
Total provision for credit losses to average LHI⁽¹⁾	0.39		%	0.77		%	0.36		%	0.36		%	0.37		%
Total provision for credit losses to average LHI excluding mortgage finance loans⁽¹⁾⁽²⁾	0.52		%	1.01		%	0.47		%	0.48		%	0.53		%
Combined allowance for credit losses to LHI	1.00		%	1.01		%	0.90		%	0.87		%	0.79		%
Combined allowance for credit losses to LHI, excluding mortgage finance loans(2)	1.41		%	1.43		%	1.28		%	1.19		%	1.14		%

Non-performing assets (NPAs):
Non-accrual loans	$	165,429		$	173,156		$	179,788		$	109,674		$	122,920
Other real estate owned (OREO)	18,727			17,585			278			187			609
Total	$	184,156		$	190,741		$	180,066		$	109,861		$	123,529



	2nd Quarter			1st Quarter			4th Quarter			3rd Quarter			2nd Quarter
	2016			2016			2015			2015			2015

Non-accrual loans to LHI	0.93		%	1.02		%	1.08		%	0.69		%	0.77		%
Non-accrual loans to LHI excluding mortgage finance loans⁽²⁾	1.32		%	1.44		%	1.53		%	0.95		%	1.11		%
Total NPAs to LHI plus OREO	1.04		%	1.12		%	1.08		%	0.69		%	0.77		%
Total NPAs to LHI excluding mortgage finance loans plus OREO⁽²⁾	1.47		%	1.58		%	1.53		%	0.95		%	1.11		%
Total NPAs to earning assets	0.90		%	0.97		%	0.99		%	0.61		%	0.72		%
Allowance for loan losses to non-accrual loans	1.0x			0.9x			0.8x			1.2x			1.0x

Restructured loans	$	249		$	249		$	249		$	249		$	249
Loans past due 90 days and still accruing⁽³⁾	$	7,743		$	10,100		$	7,013		$	7,558		$	5,482

Loans past due 90 days to LHI	0.04		%	0.06		%	0.04		%	0.05		%	0.03		%
Loans past due 90 days to LHI excluding mortgage finance loans⁽²⁾	0.06		%	0.08		%	0.06		%	0.07		%	0.05		%


(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 June 30, 2016, loans past due 90 days and still accruing includes premium finance loans of $5.0 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)

	2nd Quarter		1st Quarter		4th Quarter		3rd Quarter		2nd Quarter
	2016		2016		2015		2015		2015
Interest income
Interest and fees on loans	$	168,064	$	155,885	$	152,200	$	151,749	$	151,606
Securities	246		261		275		298		323
Federal funds sold	382		372		255		193		118
Deposits in other banks	3,750		3,285		2,090		1,616		1,327
Total interest income	172,442		159,803		154,820		153,856		153,374
Interest expense
Deposits	8,971		8,822		7,068		6,240		5,642
Federal funds purchased	110		126		67		56		93
Repurchase agreements	2		3		5		6		4
Other borrowings	1,365		1,162		642		672		528
Subordinated notes	4,191		4,191		4,191		4,191		4,191
Trust preferred subordinated debentures	734		716		659		643		631
Total interest expense	15,373		15,020		12,632		11,808		11,089
Net interest income	157,069		144,783		142,188		142,048		142,285
Provision for credit losses	16,000		30,000		14,000		13,750		14,500
Net interest income after provision for credit losses	141,069		114,783		128,188		128,298		127,785
Non-interest income
Service charges on deposit accounts	2,411		2,110		1,984		2,096		2,149
Trust fee income	1,098		813		1,313		1,222		1,287
Bank owned life insurance (BOLI) income	536		536		567		484		476
Brokered loan fees	5,864		4,645		4,267		4,885		5,277
Swap fees	1,105		307		1,000		254		1,035
Other	2,918		2,886		2,189		2,439		2,547
Total non-interest income	13,932		11,297		11,320		11,380		12,771
Non-interest expense
Salaries and employee benefits	54,810		51,372		49,999		48,583		48,200
Net occupancy expense	5,838		5,812		5,809		5,874		5,808
Marketing	4,486		3,908		4,349		3,999		3,925
Legal and professional	6,226		5,324		6,974		5,510		5,618
Communications and technology	6,391		6,217		5,520		5,180		5,647
FDIC insurance assessment	6,043		5,469		4,741		4,489		4,211
Allowance and other carrying costs for OREO	260		236		6		1		6
Other	10,201		8,482		9,644		8,052		7,861
Total non-interest expense	94,255		86,820		87,042		81,688		81,276
Income before income taxes	60,746		39,260		52,466		57,990		59,280
Income tax expense	21,866		14,132		17,713		20,876		21,343
Net income	38,880		25,128		34,753		37,114		37,937
Preferred stock dividends	2,437		2,438		2,437		2,438		2,437
Net income available to common shareholders	$	36,443	$	22,690	$	32,316	$	34,676	$	35,500



TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
(Dollars in thousands)
	2nd Quarter 2016						1st Quarter 2016						4th Quarter 2015						3rd Quarter 2015						2nd Quarter 2015
	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	$	27,097	$	240	3.57	%	$	28,343	$	254	3.60	%	$	29,973	$	267	3.53	%	$	32,358	$	287	3.52	%	$	35,081	$	311	3.56	%
Securities - Non-taxable⁽²⁾	564		8		5.87	%	759		11		5.70	%	829		12		5.74	%	1,162		17		5.80	%	1,427		18		5.06	%
Federal funds sold and securities purchased under resale agreements	312,832		382		0.49	%	304,425		372		0.49	%	375,181		255		0.27	%	308,822		193		0.25	%	200,690		118		0.24	%
Deposits in other banks	2,871,295		3,750		0.53	%	2,649,164		3,285		0.50	%	3,081,882		2,090		0.27	%	2,537,033		1,616		0.25	%	2,103,732		1,327		0.25	%
Loans held for sale, at fair value	157,898		1,350		3.44	%	126,084		1,094		3.49	%	24,658		237		3.81	%	570		6		0.04		—		—		—
LHI, mortgage finance loans	4,412,091		33,974		3.10	%	3,724,513		29,037		3.14	%	3,669,022		27,846		3.01	%	3,981,731		30,427		3.03	%	4,573,478		33,773		2.96	%
LHI	12,276,272		132,740		4.35	%	11,910,788		125,754		4.25	%	11,693,464		124,117		4.21	%	11,302,248		121,316		4.26	%	10,941,029		117,833		4.32	%
Less allowance for loan losses	164,316		—		—		141,125		—		—		130,822		—		—		118,543		—		—		109,086		—		—
LHI, net of allowance	16,524,047		166,714		4.06	%	15,494,176		154,791		4.02	%	15,231,664		151,963		3.96	%	15,165,436		151,743		3.97	%	15,405,421		151,606		3.95	%
Total earning assets	19,893,733		172,444		3.49	%	18,602,951		159,807		3.46	%	18,744,187		154,824		3.28	%	18,045,381		153,862		3.38	%	17,746,351		153,380		3.47	%
Cash and other assets	544,737						506,025						499,712						481,378						487,475
Total assets	$	20,438,470					$	19,108,976					$	19,243,899					$	18,526,759					$	18,233,826
Liabilities and Stockholders’ Equity
Transaction deposits	$	2,207,726	$	1,749	0.32	%	$	2,004,817	$	1,381	0.28	%	$	2,150,740	$	950	0.18	%	$	1,754,940	$	763	0.17	%	$	1,404,521	$	458	0.13	%
Savings deposits	6,388,133		6,494		0.41	%	6,335,425		6,714		0.43	%	6,316,191		5,370		0.34	%	5,858,381		4,616		0.31	%	5,610,277		4,332		0.31	%
Time deposits	486,610		727		0.60	%	509,762		727		0.57	%	539,421		748		0.55	%	536,531		723		0.53	%	516,582		657		0.51	%
Deposits in foreign branches	—		—		—	%	—		—		—	%	—		—		—	%	179,731		138		0.30	%	246,035		195		0.32	%
Total interest bearing deposits	9,082,469		8,970		0.40	%	8,850,004		8,822		0.40	%	9,006,352		7,068		0.31	%	8,329,583		6,240		0.30	%	7,777,415		5,642		0.29	%
Other borrowings	1,411,387		1,476		0.42	%	1,346,998		1,292		0.39	%	1,327,087		714		0.21	%	1,459,864		734		0.20	%	1,565,874		625		0.16	%
Subordinated notes	280,805		4,191		6.00	%	280,713		4,191		6.00	%	280,622		4,191		5.93	%	280,532		4,191		5.93	%	280,441		4,191		5.99	%
Trust preferred subordinated debentures	113,406		735		2.61	%	113,406		716		2.54	%	113,406		659		2.31	%	113,406		643		2.25	%	113,406		631		2.23	%
Total interest bearing liabilities	10,888,067		15,372		0.57	%	10,591,121		15,021		0.57	%	10,727,467		12,632		0.47	%	10,183,385		11,808		0.46	%	9,737,136		11,089		0.46	%
Demand deposits	7,767,693						6,730,586						6,755,615						6,621,159						6,804,994
Other liabilities	113,927						148,418						157,425						152,154						161,614
Stockholders’ equity	1,668,783						1,638,851						1,603,392						1,570,061						1,530,082
Total liabilities and stockholders’ equity	$	20,438,470					$	19,108,976					$	19,243,899					$	18,526,759					$	18,233,826
Net interest income⁽²⁾			$	157,072					$	144,786					$	142,192					$	142,054					$	142,291
Net interest margin					3.18	%					3.13	%					3.01	%					3.12	%					3.22	%


(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 99.1 EARNINGS RELEASE - July 20, 2016

Attached files

TEXAS CAPITAL BANCSHARES INC/TX Reports