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	q12017earningswebcast.htm
8-K - 8-K - TEXAS CAPITAL BANCSHARES INC/TX	a04192017-8k.htm

Exhibit 99.1

MEDIA & INVESTOR CONTACT

Heather Worley, 214.932.6646

heather.worley@texascapitalbank.com

TEXAS CAPITAL BANCSHARES, INC. ANNOUNCES OPERATING RESULTS FOR Q1 2017

DALLAS - April 19, 2017 - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the first quarter of 2017.

“We begin 2017 with continued solid earnings and traditional LHI growth, while experiencing the contraction in the mortgage industry attributable to rising rates and the return of seasonal trends. We remain optimistic about 2017 as we expect the new lines of business we added or expanded in 2016 will give us market share takeaway potential, coupled with our continued ability to attract new talent," said Keith Cargill, CEO. "Additionally, we remain well-positioned to take advantage of rising rates and business opportunities in a pro-growth economic environment."


•	Loans held for investment ("LHI"), excluding mortgage finance, increased 2% on a linked quarter basis, growing 10% from the first quarter of 2016.


•	Total mortgage finance loans, including MCA decreased 22% on a linked quarter basis and decreased 16% from the first quarter of 2016.


•	Demand deposits decreased 11% and total deposits decreased 2% on a linked quarter basis, decreasing 5% and growing 2%, respectively, from the first quarter of 2016.


•	Net income decreased 12% on a linked quarter basis and increased 69% from the first quarter of 2016.


•	EPS decreased 17% on a linked quarter basis and increased 63% from the first quarter of 2016.


•	ROE decreased to 8.60% from 10.82% for the fourth quarter of 2016 and increased from 6.13% for the first quarter of 2016.

FINANCIAL SUMMARY

(dollars and shares in thousands)



	Q1 2017			Q1 2016			% Change
QUARTERLY OPERATING RESULTS
Net income	$	42,542		$	25,128		69	%
Net income available to common stockholders	$	40,104		$	22,690		77	%
Diluted EPS	$	0.80		$	0.49		63	%
Diluted shares	50,234			46,354			8	%
ROA	0.83		%	0.53		%
ROE	8.60		%	6.13		%

BALANCE SHEET
Loans held for sale (MCA)	$	884,647		$	94,702		834	%
LHI, mortgage finance	3,371,598			4,981,304			(32	)%
LHI	13,298,918			12,059,849			10	%
Total LHI	16,670,516			17,041,153			(2	)%
Total loans	17,555,163			17,135,855			2	%
Total assets	20,864,874			20,210,893			3	%
Demand deposits	7,094,696			7,455,107			(5	)%
Total deposits	16,605,380			16,298,847			2	%
Stockholders’ equity	2,050,442			1,647,088			24	%

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income of $42.5 million and net income available to common stockholders of $40.1 million for the quarter ended March 31, 2017 compared to net income of $25.1 million and net income available to common stockholders of $22.7 million for the same period in 2016. On a fully diluted basis, earnings per common share were $0.80 for the quarter ended March 31, 2017 compared to $0.49 for the same period of 2016. The increase reflects the $17.4 million year over year increase in net income offset by the $0.06 per share dilutive effect of the fourth quarter 2016 common stock offering.

Return on average common equity (“ROE”) was 8.60 percent and return on average assets (“ROA”) was 0.83 percent for the first quarter of 2017, compared to 10.82 percent and 0.85 percent, respectively, for the fourth quarter of 2016 and 6.13 percent and 0.53 percent, respectively, for the first quarter of 2016. The linked quarter decrease in ROE resulted from a decrease in net revenue for the first quarter of 2017 and an increase in equity resulting from the fourth quarter 2016 common stock offering. ROA remains low as a result of continuing high liquidity asset balances. Average liquidity assets for the first quarter of 2017 totaled $3.6 billion, including $3.3 billion in deposits at the Federal Reserve Bank of Dallas, which had an average yield of 80 basis points, compared to $2.6 billion for the first quarter of 2016, which had an average yield of 50 basis points.

Net interest income was $163.4 million for the first quarter of 2017, compared to $171.2 million for the fourth quarter of 2016 and $144.8 million for the first quarter of 2016. Net interest margin for the first quarter of 2017 was 3.29 percent, an 18 basis point increase from the fourth quarter of 2016 and a 16 basis point increase from the first quarter of 2016. The linked quarter and year-over-year increases in net interest margin are due primarily to the increase in interest rates and the higher yielding loan portfolio components, including traditional LHI and loans held for sale ("LHS").

Average LHI, excluding mortgage finance loans, for the first quarter of 2017 were $13.0 billion, an increase of $278.7 million, or 2 percent, from the fourth quarter of 2016 and an increase of $1.1 billion, or 9 percent, from the first quarter of 2016. Average total mortgage finance loans (including Mortgage Correspondent Aggregation ("MCA")) for the first quarter of 2017 were $3.8 billion, a decrease of $1.5 billion, or 28 percent, from the fourth quarter of 2016 and a decrease of $28.7 million, or 1 percent, from the first quarter of 2016. Mortgage finance volumes showed decreases in average balances partially offset by an increase in MCA balances and a reduction in participation balances. The decline in average mortgage finance balances is primarily due to seasonality and the effect of higher interest rates on refinance volumes. Average LHS generated from our MCA business increased to $1.1 billion for the first quarter of 2017 from $944.5 million for the fourth quarter of 2016 and $126.1 million for the first quarter of 2016 as we continue to gain traction in that business.

Average total deposits for the first quarter of 2017 decreased $1.6 billion from the fourth quarter of 2016 and increased $1.4 billion from the first quarter of 2016. Average demand deposits for the first quarter of 2017 decreased $1.6 billion, or 17 percent, to $7.5 billion from $9.1 billion during the fourth quarter of 2016, and increased $816.8 million, or 12 percent, from $6.7 billion during the first quarter of 2016.

We recorded a $9.0 million provision for credit losses for the first quarter of 2017 compared to $9.0 million for the fourth quarter of 2016 and $30.0 million for the first quarter of 2016. The provision for the first quarter of 2017 was driven by the application of our methodology. The year-over-year decrease was primarily related to improvements in the composition of our pass-rated and classified loan portfolios, including energy loans. Overall 2016 provision levels were higher primarily related to energy exposure. The combined allowance for credit losses at March 31, 2017 decreased slightly to 1.37 percent of LHI excluding mortgage finance loans compared to 1.38 percent at December 31, 2016 and 1.43 percent at March 31, 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 decrease in non-performing assets in the first quarter of 2017 compared to levels reported in the fourth and first quarters of 2016, bringing the ratio of total non-performing assets to total LHI plus other real estate owned (“OREO”) to 0.99 percent compared to 1.07 percent for the fourth quarter of 2016 and 1.12 percent for the first quarter of 2016. The year-over-year decrease is primarily related to the decrease in energy non-accrual loans from $141.3 million at March 31, 2016 to $100.9 million at March 31, 2017. Net charge-offs for the first quarter of 2017 were $5.7 million compared to $20.8 million for the fourth quarter of 2016 and $7.4 million for the first quarter of 2016. For the first quarter of 2017, net charge-offs related to energy loans were $7.1 million compared to $16.3 million for the fourth quarter of 2016 and $5.9 million for the first quarter of 2016. For the first quarter of 2017, net charge-offs were 0.15 percent of total LHI, compared to 0.48 percent for the fourth quarter of 2016 and 0.19 percent for the same period in 2016. At March 31, 2017, total OREO was $18.8 million compared to $19.0 million at December 31, 2016 and $17.6 million at March 31, 2016.

Non-interest income increased $5.8 million, or 51 percent, during the first quarter of 2017 compared to the same period of 2016, and decreased $1.7 million, or 9 percent, compared to the fourth quarter of 2016. The year-over-year increase primarily related to an increase in servicing income, swap fees, brokered loan fees and service charges. Servicing income increased $2.2 million during the first quarter of 2017 compared to the same period of 2016 as a result of an increase in servicing assets primarily related to our MCA business. Swap fees increased $1.5 million during the first quarter of 2017 compared to the same period of 2016. These fees fluctuate from quarter to quarter based on the volume and size of transactions closed during the quarter. Brokered loan fees increased $1.0 million during the first quarter of 2017 compared to the same period of 2016 as a result of an increase in LHFS volumes. Service charges increased

$935,000 during the first quarter of 2017 compared to the same period of 2016 as a result of the increase in deposit balances and improved pricing of treasury services. The linked-quarter decrease in non-interest income primarily related to a $1.6 million, or 22 percent, decrease in brokered loan fees attributable to reduced mortgage finance activity and a $2.4 million, or 49 percent, decrease in other non-interest income, offset by a $1.3 million increase in swap fees.

Non-interest expense for the first quarter of 2017 increased $19.3 million, or 22 percent, compared to the first quarter of 2016, and decreased $429,000, or less than 1 percent, compared to the fourth quarter of 2016. The year-over-year increase is primarily related to an $11.6 million increase in salaries and employee benefits expense, a $2.1 million increase in legal and professional expense and a $1.0 million increase in marketing expense, all of which were due to general business growth. Servicing related expenses for the first quarter of 2017 increased $1.0 million compared to the same quarter in 2016 as a result of the increase in capitalized servicing assets primarily related to our MCA business from March 31, 2016 to March 31, 2017.

Stockholders’ equity increased by 24 percent from $1.6 billion at March 31, 2016 to $2.1 billion at March 31, 2017, primarily due to retention of net income and proceeds from the fourth quarter 2016 common stock offering. Texas Capital Bank is well capitalized under regulatory guidelines and at March 31, 2017, our ratio of tangible common equity to total tangible assets was 9.0 percent.

ABOUT TEXAS CAPITAL BANCSHARES, INC.

Texas Capital Bancshares, Inc. (NASDAQ®: TCBI), a member of the Russell 2000® Index and the S&P MidCap 400®, 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)
	1st Quarter			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
	2017			2016			2016			2016			2016
CONSOLIDATED STATEMENTS OF INCOME
Interest income	$	183,946		$	188,671		$	182,492		$	172,442		$	159,803
Interest expense	20,587			17,448			15,753			15,373			15,020
Net interest income	163,359			171,223			166,739			157,069			144,783
Provision for credit losses	9,000			9,000			22,000			16,000			30,000
Net interest income after provision for credit losses	154,359			162,223			144,739			141,069			114,783
Non-interest income	17,110			18,835			16,716			13,932			11,297
Non-interest expense	106,094			106,523			94,799			94,255			86,820
Income before income taxes	65,375			74,535			66,656			60,746			39,260
Income tax expense	22,833			26,149			23,931			21,866			14,132
Net income	42,542			48,386			42,725			38,880			25,128
Preferred stock dividends	2,438			2,437			2,438			2,437			2,438
Net income available to common stockholders	$	40,104		$	45,949		$	40,287		$	36,443		$	22,690

Diluted EPS	$	0.80		$	0.96		$	0.87		$	0.78		$	0.49
Diluted shares	50,234,230			47,759,548			46,509,683			46,438,132			46,354,378

CONSOLIDATED BALANCE SHEET DATA
Total assets	$	20,864,874		$	21,697,134		$	22,216,388		$	21,080,994		$	20,210,893
LHI	13,298,918			13,001,011			12,662,394			12,502,513			12,059,849
LHI, mortgage finance	3,371,598			4,497,338			4,961,159			5,260,027			4,981,304
Loans held for sale, at fair value	884,647			968,929			648,684			221,347			94,702
Liquidity assets	2,804,921			2,725,645			3,471,074			2,624,170			2,644,418
Securities	42,203			24,874			26,356			27,372			28,461
Demand deposits	7,094,696			7,994,201			8,789,740			7,984,208			7,455,107
Total deposits	16,605,380			17,016,831			18,145,123			16,703,565			16,298,847
Other borrowings	1,641,834			2,109,575			1,751,420			2,115,445			1,704,859
Subordinated notes	281,134			281,044			280,954			280,863			280,773
Long-term debt	113,406			113,406			113,406			113,406			113,406
Stockholders’ equity	2,050,442			2,009,557			1,725,782			1,684,735			1,647,088

End of period shares outstanding	49,560,100			49,503,662			46,009,495			45,952,911			45,902,489
Book value	$	38.35		$	37.56		$	34.25		$	33.40		$	32.61
Tangible book value⁽¹⁾	$	37.95		$	37.17		$	33.82		$	32.97		$	32.18

SELECTED FINANCIAL RATIOS
Net interest margin	3.29		%	3.11		%	3.14		%	3.18		%	3.13		%
Return on average assets	0.83		%	0.85		%	0.78		%	0.77		%	0.53		%
Return on average common equity	8.60		%	10.82		%	10.20		%	9.65		%	6.13		%
Non-interest income to earning assets	0.34		%	0.34		%	0.32		%	0.28		%	0.24		%
Efficiency ratio⁽²⁾	58.8		%	56.0		%	51.7		%	55.1		%	55.6		%
Non-interest expense to earning assets	2.12		%	1.93		%	1.79		%	1.91		%	1.88		%
Tangible common equity to total tangible assets⁽³⁾	9.0		%	8.5		%	7.0		%	7.2		%	7.3		%
Common Equity Tier 1	9.6		%	9.0		%	7.6		%	7.4		%	7.5		%
Tier 1 capital	10.9		%	10.2		%	8.8		%	8.6		%	8.8		%
Total capital	13.3		%	12.5		%	11.1		%	10.9		%	11.1		%
Leverage	10.3		%	9.3		%	8.4		%	8.7		%	9.1		%


(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)
	March 31, 2017			March 31, 2016			% Change
Assets
Cash and due from banks	$	116,013		$	89,277		30	%
Interest-bearing deposits	2,779,921			2,614,418			6	%
Federal funds sold and securities purchased under resale agreements	25,000			30,000			(17	)%
Securities, available-for-sale	42,203			28,461			48	%
Loans held for sale, at fair value	884,647			94,702			834	%
LHI, mortgage finance	3,371,598			4,981,304			(32	)%
LHI (net of unearned income)	13,298,918			12,059,849			10	%
Less: Allowance for loan losses	172,013			162,510			6	%
LHI, net	16,498,503			16,878,643			(2	)%
Mortgage servicing rights, net	45,526			4,253			100	%
Premises and equipment, net	20,831			22,924			(9	)%
Accrued interest receivable and other assets	432,835			428,344			1	%
Goodwill and intangibles, net	19,395			19,871			(2	)%
Total assets	$	20,864,874		$	20,210,893		3	%

Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing	$	7,094,696		$	7,455,107		(5	)%
Interest bearing	9,510,684			8,843,740			8	%
Total deposits	16,605,380			16,298,847			2	%

Accrued interest payable	3,293			2,880			14	%
Other liabilities	169,385			163,040			4	%
Federal funds purchased and repurchase agreements	141,834			100,859			41	%
Other borrowings	1,500,000			1,604,000			(6	)%
Subordinated notes, net	281,134			280,773			—
Trust preferred subordinated debentures	113,406			113,406			—
Total liabilities	18,814,432			18,563,805			1	%

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, 2017 and 2016	150,000			150,000			−
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 49,560,517 and 45,902,906 at March 31, 2017 and 2016, respectively	496			459			8	%
Additional paid-in capital	956,246			715,435			34	%
Retained earnings	943,291			780,508			21	%
Treasury stock (shares at cost: 417 at March 31, 2017 and 2016)	(8		)	(8		)	—
Accumulated other comprehensive income, net of taxes	417			694			(40	)%
Total stockholders’ equity	2,050,442			1,647,088			24	%
Total liabilities and stockholders’ equity	$	20,864,874		$	20,210,893		3	%



TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
	Three Months Ended March 31
	2017		2016
Interest income
Interest and fees on loans	$	176,624	$	155,885
Securities	225		261
Federal funds sold	530		372
Deposits in other banks	6,567		3,285
Total interest income	183,946		159,803
Interest expense
Deposits	13,293		8,822
Federal funds purchased	252		126
Repurchase agreements	1		3
Other borrowings	2,020		1,162
Subordinated notes	4,191		4,191
Trust preferred subordinated debentures	830		716
Total interest expense	20,587		15,020
Net interest income	163,359		144,783
Provision for credit losses	9,000		30,000
Net interest income after provision for credit losses	154,359		114,783
Non-interest income
Service charges on deposit accounts	3,045		2,110
Wealth management and trust fee income	1,357		813
Bank owned life insurance (BOLI) income	466		536
Brokered loan fees	5,678		4,645
Servicing income	2,201		(55		)
Swap fees	1,803		307
Other	2,560		2,941
Total non-interest income	17,110		11,297
Non-interest expense
Salaries and employee benefits	63,003		51,372
Net occupancy expense	6,111		5,812
Marketing	4,950		3,908
Legal and professional	7,453		5,324
Communications and technology	6,506		6,217
FDIC insurance assessment	5,994		5,469
Servicing related expenses	1,750		73
Other	10,327		8,645
Total non-interest expense	106,094		86,820
Income before income taxes	65,375		39,260
Income tax expense	22,833		14,132
Net income	42,542		25,128
Preferred stock dividends	2,438		2,438
Net income available to common stockholders	$	40,104	$	22,690

Basic earnings per common share	$	0.81	$	0.49
Diluted earnings per common share	$	0.80	$	0.49



TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
	1st Quarter			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
	2017			2016			2016			2016			2016
Allowance for loan losses:
Beginning balance	$	168,126		$	180,436		$	167,397		$	162,510		$	141,111
Loans charged-off:
Commercial	9,233			22,326			9,945			15,791			8,496
Real estate	—			—			—			528			—
Consumer	—			7			40			—			—
Leases	—			—			—			—			—
Total charge-offs	9,233			22,333			9,985			16,319			8,496
Recoveries:
Commercial	3,381			1,535			2,495			4,294			1,040
Real estate	50			27			15			13			8
Construction	101			—			—			34			—
Consumer	5			5			5			4			7
Leases	8			6			26			—			45
Total recoveries	3,545			1,573			2,541			4,345			1,100
Net charge-offs	5,688			20,760			7,444			11,974			7,396
Provision for loan losses	9,575			8,450			20,483			16,861			28,795
Ending balance	$	172,013		$	168,126		$	180,436		$	167,397		$	162,510

Allowance for off-balance sheet credit losses:
Beginning balance	$	11,422		$	10,872		$	9,355		$	10,216		$	9,011
Provision for off-balance sheet credit losses	(575		)	550			1,517			(861		)	1,205
Ending balance	$	10,847		$	11,422		$	10,872		$	9,355		$	10,216

Total allowance for credit losses	$	182,860		$	179,548		$	191,308		$	176,752		$	172,726

Total provision for credit losses	$	9,000		$	9,000		$	22,000		$	16,000		$	30,000

Allowance for loan losses to LHI	1.03		%	0.96		%	1.02		%	0.94		%	0.95		%
Allowance for loan losses to LHI excluding mortgage finance loans(2)	1.29		%	1.29		%	1.42		%	1.34		%	1.35		%
Allowance for loan losses to average LHI	1.09		%	0.98		%	1.05		%	1.00		%	1.04		%
Allowance for loan losses to average LHI excluding mortgage finance loans(2)	1.33		%	1.32		%	1.43		%	1.36		%	1.36		%
Net charge-offs to average LHI⁽¹⁾	0.15		%	0.48		%	0.17		%	0.29		%	0.19		%
Net charge-offs to average LHI excluding mortgage finance loans⁽¹⁾⁽²⁾	0.18		%	0.65		%	0.24		%	0.39		%	0.25		%
Net charge-offs to average LHI for last twelve months⁽¹⁾	0.28		%	0.29		%	0.18		%	0.15		%	0.10		%
Net charge-offs to average LHI, excluding mortgage finance loans, for last twelve months⁽¹⁾⁽²⁾	0.36		%	0.38		%	0.24		%	0.20		%	0.14		%
Total provision for credit losses to average LHI⁽¹⁾	0.23		%	0.21		%	0.51		%	0.39		%	0.77		%
Total provision for credit losses to average LHI excluding mortgage finance loans⁽¹⁾⁽²⁾	0.28		%	0.28		%	0.70		%	0.52		%	1.01		%
Combined allowance for credit losses to LHI	1.10		%	1.03		%	1.09		%	1.00		%	1.01		%
Combined allowance for credit losses to LHI, excluding mortgage finance loans(2)	1.37		%	1.38		%	1.51		%	1.41		%	1.43		%

Non-performing assets (NPAs):
Non-accrual loans	$	146,549		$	167,791		$	169,113		$	165,429		$	173,156
Other real estate owned (OREO)	18,833			18,961			19,009			18,727			17,585
Total	$	165,382		$	186,752		$	188,122		$	184,156		$	190,741



	1st Quarter			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
	2017			2016			2016			2016			2016

Non-accrual loans to LHI	0.88		%	0.96		%	0.96		%	0.93		%	1.02		%
Non-accrual loans to LHI excluding mortgage finance loans⁽²⁾	1.10		%	1.29		%	1.34		%	1.32		%	1.44		%
Total NPAs to LHI plus OREO	0.99		%	1.07		%	1.07		%	1.04		%	1.12		%
Total NPAs to LHI excluding mortgage finance loans plus OREO⁽²⁾	1.24		%	1.43		%	1.48		%	1.47		%	1.58		%
Total NPAs to earning assets	0.82		%	0.89		%	0.87		%	0.90		%	0.97		%
Allowance for loan losses to non-accrual loans	1.2x			1.0x			1.1x			1.0x			0.9x

Restructured loans	$	—		$	—		$	—		$	249		$	249
Loans past due 90 days and still accruing⁽³⁾	$	8,799		$	10,729		$	9,706		$	7,743		$	10,100

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


(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, 2017, loans past due 90 days and still accruing includes premium finance loans of $5.1 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)

	1st Quarter		4th Quarter		3rd Quarter		2nd Quarter		1st Quarter
	2017		2016		2016		2016		2016
Interest income
Interest and fees on loans	$	176,624	$	182,909	$	177,724	$	168,064	$	155,885
Securities	225		228		232		246		261
Federal funds sold	530		338		455		382		372
Deposits in other banks	6,567		5,196		4,081		3,750		3,285
Total interest income	183,946		188,671		182,492		172,442		159,803
Interest expense
Deposits	13,293		10,432		8,950		8,971		8,822
Federal funds purchased	252		156		126		110		126
Repurchase agreements	1		1		3		2		3
Other borrowings	2,020		1,862		1,730		1,365		1,162
Subordinated notes	4,191		4,191		4,191		4,191		4,191
Trust preferred subordinated debentures	830		806		753		734		716
Total interest expense	20,587		17,448		15,753		15,373		15,020
Net interest income	163,359		171,223		166,739		157,069		144,783
Provision for credit losses	9,000		9,000		22,000		16,000		30,000
Net interest income after provision for credit losses	154,359		162,223		144,739		141,069		114,783
Non-interest income
Service charges on deposit accounts	3,045		2,940		2,880		2,411		2,110
Wealth management and trust fee income	1,357		1,244		1,113		1,098		813
Bank owned life insurance (BOLI) income	466		481		520		536		536
Brokered loan fees	5,678		7,249		7,581		5,864		4,645
Servicing income	2,201		1,410		310		50		(55		)
Swap fees	1,803		536		918		1,105		307
Other	2,560		4,975		3,394		2,868		2,941
Total non-interest income	17,110		18,835		16,716		13,932		11,297
Non-interest expense
Salaries and employee benefits	63,003		66,081		56,722		54,810		51,372
Net occupancy expense	6,111		5,937		5,634		5,838		5,812
Marketing	4,950		4,617		4,292		4,486		3,908
Legal and professional	7,453		6,443		5,333		6,226		5,324
Communications and technology	6,506		6,334		6,620		6,391		6,217
FDIC insurance assessment	5,994		6,573		6,355		6,043		5,469
Servicing related expenses	1,750		398		620		612		73
Other	10,327		10,140		9,223		9,849		8,645
Total non-interest expense	106,094		106,523		94,799		94,255		86,820
Income before income taxes	65,375		74,535		66,656		60,746		39,260
Income tax expense	22,833		26,149		23,931		21,866		14,132
Net income	42,542		48,386		42,725		38,880		25,128
Preferred stock dividends	2,438		2,437		2,438		2,437		2,438
Net income available to common shareholders	$	40,104	$	45,949	$	40,287	$	36,443	$	22,690



TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
(Dollars in thousands)
	1st Quarter 2017						4th Quarter 2016						3rd Quarter 2016						2nd Quarter 2016						1st Quarter 2016
	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	$	31,905	$	224	2.84	%	$	25,008	$	221	3.53	%	$	26,051	$	228	3.47	%	$	27,097	$	240	3.57	%	$	28,343	$	254	3.60	%
Securities - Non-taxable⁽²⁾	224		3		4.85	%	531		9		6.37	%	564		8		5.82	%	564		8		5.87	%	759		11		5.70	%
Federal funds sold and securities purchased under resale agreements	276,910		530		0.78	%	254,008		338		0.53	%	369,215		455		0.49	%	312,832		382		0.49	%	304,425		372		0.49	%
Interest-bearing deposits in other banks	3,312,256		6,567		0.80	%	3,812,076		5,197		0.54	%	3,192,141		4,080		0.51	%	2,871,295		3,750		0.53	%	2,649,164		3,285		0.50	%
Loans held for sale, at fair value	1,064,322		9,535		3.63	%	944,484		7,903		3.33	%	430,869		3,662		3.38	%	157,898		1,350		3.44	%	126,084		1,094		3.49	%
LHI, mortgage finance loans	2,757,566		23,105		3.40	%	4,371,475		35,081		3.19	%	4,658,804		36,655		3.13	%	4,412,091		33,974		3.10	%	3,724,513		29,037		3.14	%
LHI	12,980,544		145,018		4.53	%	12,701,868		140,130		4.39	%	12,591,561		137,407		4.34	%	12,276,272		132,740		4.35	%	11,910,788		125,754		4.25	%
Less allowance for loan losses	169,318		—		—		180,727		—		—		168,086		—		—		164,316		—		—		141,125		—		—
LHI, net of allowance	15,568,792		168,123		4.38	%	16,892,616		175,211		4.13	%	17,082,279		174,062		4.05	%	16,524,047		166,714		4.06	%	15,494,176		154,791		4.02	%
Total earning assets	20,254,409		184,982		3.70	%	21,928,723		188,879		3.43	%	21,101,119		182,495		3.44	%	19,893,733		172,444		3.49	%	18,602,951		159,807		3.46	%
Cash and other assets	606,762						595,671						588,440						544,737						506,025
Total assets	$	20,861,171					$	22,524,394					$	21,689,559					$	20,438,470					$	19,108,976
Liabilities and Stockholders’ Equity
Transaction deposits	$	2,008,401	$	2,193	0.44	%	$	2,281,240	$	2,129	0.37	%	$	2,301,362	$	1,960	0.34	%	$	2,207,726	$	1,749	0.32	%	$	2,004,817	$	1,381	0.28	%
Savings deposits	6,989,748		10,483		0.61	%	6,711,083		7,592		0.45	%	6,177,681		6,228		0.40	%	6,388,133		6,494		0.41	%	6,335,425		6,714		0.43	%
Time deposits	427,770		617		0.59	%	474,548		711		0.60	%	501,701		763		0.61	%	486,610		727		0.60	%	509,762		727		0.57	%
Total interest bearing deposits	9,425,919		13,293		0.57	%	9,466,871		10,432		0.44	%	8,980,744		8,951		0.40	%	9,082,469		8,970		0.40	%	8,850,004		8,822		0.40	%
Other borrowings	1,333,685		2,273		0.69	%	1,553,010		2,017		0.52	%	1,607,613		1,860		0.46	%	1,411,387		1,476		0.42	%	1,346,998		1,292		0.39	%
Subordinated notes	281,076		4,191		6.05	%	280,985		4,191		5.93	%	280,895		4,191		5.94	%	280,805		4,191		6.00	%	280,713		4,191		6.00	%
Trust preferred subordinated debentures	113,406		830		2.97	%	113,406		806		2.83	%	113,406		752		2.64	%	113,406		735		2.61	%	113,406		716		2.54	%
Total interest bearing liabilities	11,154,086		20,587		0.75	%	11,414,272		17,446		0.61	%	10,982,658		15,754		0.57	%	10,888,067		15,372		0.57	%	10,591,121		15,021		0.57	%
Demand deposits	7,547,338						9,129,668						8,849,725						7,767,693						6,730,586
Other liabilities	117,877						141,153						135,141						113,927						148,418
Stockholders’ equity	2,041,870						1,839,301						1,722,035						1,668,783						1,638,851
Total liabilities and stockholders’ equity	$	20,861,171					$	22,524,394					$	21,689,559					$	20,438,470					$	19,108,976
Net interest income⁽²⁾			$	164,395					$	171,433					$	166,741					$	157,072					$	144,786
Net interest margin					3.29	%					3.11	%					3.14	%					3.18	%					3.13	%


(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 - April 19, 2017

Attached files

TEXAS CAPITAL BANCSHARES INC/TX Reports