Delaware (State or other jurisdiction of incorporation or organization) |
001-34657 (Commission File Number) |
75-2679109 (I.R.S. Employer Identification Number) |
(a) | On April 20, 2011, Texas Capital Bancshares, Inc. issued a press release and made a concurrent public presentation regarding its operating and financial results for its fiscal quarter ended March 31, 2011. A copy of the press release is attached hereto as Exhibit 99.1. A copy of the presentation is attached hereto as Exhibit 99.2. |
(d) | Exhibits |
99.1
|
Press Release, dated April 20, 2011, of Texas Capital Bancshares, Inc., announcing its operating and financial results for its fiscal quarter ended March 31, 2011 | |
99.2
|
Presentation given April 20, 2011 discussing Texas Capital Bancshares, Inc.s operating and financial results for its fiscal quarter ended March 31, 2011 |
Date: April 21, 2011 | TEXAS CAPITAL BANCSHARES, INC. |
|||
By: | /s/ Peter B. Bartholow | |||
Peter B. Bartholow | ||||
Chief Financial Officer |
Exhibit | Description | |
99.1
|
Press Release, dated April 20, 2011, of Texas Capital Bancshares, Inc., announcing its operating and financial results for its fiscal quarter ended March 31, 2011 | |
99.2
|
Presentation given April 20, 2011 discussing Texas Capital Bancshares, Inc.s operating and financial results for its fiscal quarter ended March 31, 2011 |
| Net income decreased 1% on a linked quarter basis and increased 57% from Q1 2010 | ||
| EPS decreased 3% on a linked quarter basis and increased 48% for the first quarter of 2011 as compared to the same quarter of 2010 | ||
| Demand deposits grew 2% and total deposits decreased 4% on a linked quarter basis and grew 49% and 18%, respectively, from Q1 2010 | ||
| Loans held for investment remained consistent on a linked quarter basis and total loans decreased 6% on a linked quarter basis; grew 6% and 10%, respectively, from Q1 2010 |
Q1 2011 | Q1 2010 | % Change | ||||||||||
QUARTERLY OPERATING RESULTS(1) |
||||||||||||
Net Income |
$ | 11,939 | $ | 7,600 | 57 | % | ||||||
Diluted EPS |
$ | .31 | $ | .21 | 48 | % | ||||||
ROA |
.78 | % | .57 | % | ||||||||
ROE |
8.91 | % | 6.21 | % | ||||||||
Diluted Shares |
38,342 | 36,784 | ||||||||||
BALANCE SHEET(1) |
||||||||||||
Total Assets |
$ | 6,061,046 | $ | 5,499,599 | 10 | % | ||||||
Demand Deposits |
1,480,695 | 994,096 | 49 | % | ||||||||
Total Deposits |
5,221,991 | 4,409,819 | 18 | % | ||||||||
Loans Held for Investment |
4,711,424 | 4,443,456 | 6 | % | ||||||||
Total Loans |
5,522,824 | 5,035,892 | 10 | % | ||||||||
Stockholders Equity |
544,925 | 499,996 | 9 | % |
(1) | Operating results, assets and loans are reporting from continuing operations |
2
3
1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | ||||||||||||||||
2011 | 2010 | 2010 | 2010 | 2010 | ||||||||||||||||
CONSOLIDATED STATEMENT OF INCOME |
||||||||||||||||||||
Interest income |
$ | 70,111 | $ | 75,432 | $ | 72,600 | $ | 67,472 | $ | 64,306 | ||||||||||
Interest expense |
5,613 | 9,477 | 9,994 | 9,587 | 9,078 | |||||||||||||||
Net interest income |
64,498 | 65,955 | 62,606 | 57,885 | 55,228 | |||||||||||||||
Provision for credit losses |
7,500 | 12,000 | 13,500 | 14,500 | 13,500 | |||||||||||||||
Net interest income after provision for credit losses |
56,998 | 53,955 | 49,106 | 43,385 | 41,728 | |||||||||||||||
Non-interest income |
7,684 | 9,178 | 8,101 | 8,036 | 6,948 | |||||||||||||||
Non-interest expense |
46,399 | 44,582 | 42,602 | 39,118 | 37,186 | |||||||||||||||
Income from continuing operations before income taxes |
18,283 | 18,551 | 14,605 | 12,303 | 11,490 | |||||||||||||||
Income tax expense |
6,344 | 6,475 | 5,074 | 4,187 | 3,890 | |||||||||||||||
Income from continuing operations |
11,939 | 12,076 | 9,531 | 8,116 | 7,600 | |||||||||||||||
Loss from discontinued operations (after-tax) |
(60 | ) | (22 | ) | (5 | ) | (54 | ) | (55 | ) | ||||||||||
Net income |
$ | 11,879 | $ | 12,054 | $ | 9,526 | $ | 8,062 | $ | 7,545 | ||||||||||
Diluted EPS from continuing operations |
$ | .31 | $ | .32 | $ | .25 | $ | .22 | $ | .21 | ||||||||||
Diluted EPS |
$ | .31 | $ | .32 | $ | .25 | $ | .22 | $ | .21 | ||||||||||
Diluted shares |
38,341,679 | 37,658,396 | 37,444,516 | 37,486,785 | 36,783,719 | |||||||||||||||
CONSOLIDATED BALANCE SHEET DATA |
||||||||||||||||||||
Total assets |
$ | 6,061,046 | $ | 6,448,179 | $ | 6,344,916 | $ | 5,961,472 | $ | 5,499,599 | ||||||||||
Loans held for investment |
4,711,424 | 4,711,330 | 4,483,204 | 4,462,830 | 4,443,456 | |||||||||||||||
Loans held for sale |
811,400 | 1,194,209 | 1,399,208 | 997,150 | 592,436 | |||||||||||||||
Securities |
171,990 | 185,424 | 202,177 | 227,029 | 246,209 | |||||||||||||||
Demand deposits |
1,480,695 | 1,451,307 | 1,195,093 | 1,120,664 | 994,096 | |||||||||||||||
Total deposits |
5,221,991 | 5,455,401 | 5,407,033 | 4,926,069 | 4,409,819 | |||||||||||||||
Other borrowings |
133,995 | 300,387 | 270,628 | 376,646 | 452,061 | |||||||||||||||
Long-term debt |
113,406 | 113,406 | 113,406 | 113,406 | 113,406 | |||||||||||||||
Stockholders equity |
544,925 | 528,319 | 515,618 | 514,078 | 499,996 | |||||||||||||||
End of period shares outstanding |
37,216,929 | 36,956,688 | 36,792,030 | 36,776,836 | 36,524,313 | |||||||||||||||
Book value (excluding securities gains/losses) |
$ | 14.50 | $ | 14.15 | $ | 13.84 | $ | 13.79 | $ | 13.52 | ||||||||||
Tangible book value (excluding securities
gains/losses) |
$ | 14.25 | $ | 13.89 | $ | 13.58 | $ | 13.53 | $ | 13.25 | ||||||||||
SELECTED FINANCIAL RATIOS |
||||||||||||||||||||
From continuing operations: |
||||||||||||||||||||
Net interest margin |
4.46 | % | 4.12 | % | 4.27 | % | 4.32 | % | 4.43 | % | ||||||||||
Return on average assets |
.78 | % | .72 | % | .62 | % | .58 | % | .57 | % | ||||||||||
Return on average equity |
8.91 | % | 9.04 | % | 7.23 | % | 6.33 | % | 6.21 | % | ||||||||||
Non-interest income to earning assets |
.53 | % | .57 | % | .55 | % | .60 | % | .55 | % | ||||||||||
Efficiency ratio |
64.3 | % | 59.3 | % | 60.3 | % | 59.3 | % | 59.8 | % | ||||||||||
Efficiency ratio (excluding OREO
valuation/write-down) |
59.7 | % | 56.2 | % | 55.1 | % | 58.5 | % | 56.7 | % | ||||||||||
Non-interest expense to earning assets |
3.20 | % | 2.78 | % | 2.90 | % | 2.91 | % | 2.97 | % | ||||||||||
From consolidated: |
||||||||||||||||||||
Net interest margin |
4.46 | % | 4.12 | % | 4.27 | % | 4.32 | % | 4.43 | % | ||||||||||
Return on average assets |
.78 | % | .72 | % | .62 | % | .57 | % | .57 | % | ||||||||||
Return on average equity |
8.87 | % | 9.02 | % | 7.23 | % | 6.29 | % | 6.17 | % | ||||||||||
Tangible common equity to total tangible assets |
8.8 | % | 8.0 | % | 7.9 | % | 8.4 | % | 8.8 | % | ||||||||||
Tier 1 capital ratio |
11.2 | % | 10.6 | % | 10.7 | % | 11.0 | % | 11.3 | % | ||||||||||
Total capital ratio |
12.5 | % | 11.8 | % | 11.9 | % | 12.3 | % | 12.5 | % | ||||||||||
Tier 1 leverage ratio |
10.3 | % | 9.4 | % | 10.0 | % | 10.7 | % | 11.0 | % |
4
March 31, | March 31, | % | ||||||||||
2011 | 2010 | Change | ||||||||||
Assets |
||||||||||||
Cash and due from banks |
$ | 213,480 | $ | 70,066 | 205 | % | ||||||
Federal funds sold |
10,240 | 9,990 | 3 | % | ||||||||
Securities, available-for-sale |
171,990 | 246,209 | (30 | )% | ||||||||
Loans held for sale |
811,400 | 592,436 | 37 | % | ||||||||
Loans held for sale from discontinued operations |
488 | 583 | (16 | )% | ||||||||
Loans held for investment (net of unearned income) |
4,711,424 | 4,443,456 | 6 | % | ||||||||
Less: Allowance for loan losses |
70,248 | 71,705 | (2 | )% | ||||||||
Loans held for investment, net |
4,641,176 | 4,371,751 | 6 | % | ||||||||
Premises and equipment, net |
11,652 | 10,773 | 8 | % | ||||||||
Accrued interest receivable and other assets |
191,706 | 188,649 | 3 | % | ||||||||
Goodwill and intangibles, net |
9,402 | 9,725 | (3 | )% | ||||||||
Total assets |
$ | 6,061,534 | $ | 5,500,182 | 10 | % | ||||||
Liabilities and Stockholders Equity |
||||||||||||
Liabilities: |
||||||||||||
Deposits: |
||||||||||||
Non-interest bearing |
$ | 1,480,695 | $ | 994,096 | 49 | % | ||||||
Interest bearing |
3,429,358 | 3,072,001 | 12 | % | ||||||||
Interest bearing in foreign branches |
311,938 | 343,722 | (9 | )% | ||||||||
Total deposits |
5,221,991 | 4,409,819 | 18 | % | ||||||||
Accrued interest payable |
1,662 | 2,038 | (18 | )% | ||||||||
Other liabilities |
45,555 | 22,862 | 99 | % | ||||||||
Federal funds purchased |
115,870 | 425,939 | (73 | )% | ||||||||
Repurchase agreements |
14,716 | 21,874 | (33 | )% | ||||||||
Other borrowings |
3,409 | 4,248 | (20 | )% | ||||||||
Trust preferred subordinated debentures |
113,406 | 113,406 | | |||||||||
Total liabilities |
5,516,609 | 5,000,186 | 10 | % | ||||||||
Stockholders equity: |
||||||||||||
Preferred stock, $.01 par value, $1,000 liquidation value: |
||||||||||||
Authorized shares 10,000,000 |
||||||||||||
Issued shares |
| | ||||||||||
Common stock, $.01 par value: |
||||||||||||
Authorized shares 100,000,000 |
||||||||||||
Issued shares 37,217,346 and 36,524,730 at March
31, 2011 and 2010, respectively |
372 | 365 | 2 | % | ||||||||
Additional paid-in capital |
341,680 | 337,124 | 1 | % | ||||||||
Retained earnings |
197,686 | 156,165 | 27 | % | ||||||||
Treasury stock (shares at cost: 417 at March 31, 2011 and
2010, respectively) |
(8 | ) | (8 | ) | | |||||||
Accumulated other comprehensive income, net of taxes |
5,195 | 6,350 | (18 | )% | ||||||||
Total stockholders equity |
544,925 | 499,996 | 9 | % | ||||||||
Total liabilities and stockholders equity |
$ | 6,061,534 | $ | 5,500,182 | 10 | % | ||||||
5
Three Months Ended | ||||||||
March 31 | ||||||||
2011 | 2010 | |||||||
Interest income |
||||||||
Interest and fees on loans |
$ | 68,040 | $ | 61,569 | ||||
Securities |
1,846 | 2,726 | ||||||
Federal funds sold |
28 | 9 | ||||||
Deposits in other banks |
197 | 2 | ||||||
Total interest income |
70,111 | 64,306 | ||||||
Interest expense |
||||||||
Deposits |
4,871 | 7,758 | ||||||
Federal funds purchased |
107 | 365 | ||||||
Repurchase agreements |
2 | 4 | ||||||
Other borrowings |
| 47 | ||||||
Trust preferred subordinated debentures |
633 | 904 | ||||||
Total interest expense |
5,613 | 9,078 | ||||||
Net interest income |
64,498 | 55,228 | ||||||
Provision for credit losses |
7,500 | 13,500 | ||||||
Net interest income after provision for credit losses |
56,998 | 41,728 | ||||||
Non-interest income |
||||||||
Service charges on deposit accounts |
1,783 | 1,483 | ||||||
Trust fee income |
954 | 954 | ||||||
Bank owned life insurance (BOLI) income |
523 | 471 | ||||||
Brokered loan fees |
2,520 | 1,904 | ||||||
Equipment rental income |
783 | 1,344 | ||||||
Other |
1,121 | 792 | ||||||
Total non-interest income |
7,684 | 6,948 | ||||||
Non-interest expense |
||||||||
Salaries and employee benefits |
24,172 | 20,069 | ||||||
Net occupancy expense |
3,310 | 3,014 | ||||||
Leased equipment depreciation |
556 | 1,059 | ||||||
Marketing |
2,123 | 787 | ||||||
Legal and professional |
2,723 | 1,950 | ||||||
Communications and technology |
2,347 | 1,926 | ||||||
FDIC insurance assessment |
2,511 | 1,868 | ||||||
Allowance and other carrying costs for OREO |
4,030 | 2,292 | ||||||
Other |
4,627 | 4,221 | ||||||
Total non-interest expense |
46,399 | 37,186 | ||||||
Income from continuing operations before income taxes |
18,283 | 11,490 | ||||||
Income tax expense |
6,344 | 3,890 | ||||||
Income from continuing operations |
11,939 | 7,600 | ||||||
Loss from discontinued operations (after-tax) |
(60 | ) | (55 | ) | ||||
Net income |
$ | 11,879 | $ | 7,545 | ||||
Basic earnings per common share: |
||||||||
Income from continuing operations |
$ | .32 | $ | .21 | ||||
Net income |
$ | .32 | $ | .21 | ||||
Diluted earnings per common share: |
||||||||
Income from continuing operations |
$ | .31 | $ | .21 | ||||
Net income |
$ | .31 | $ | .21 |
6
1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | ||||||||||||||||
2011 | 2010 | 2010 | 2010 | 2010 | ||||||||||||||||
Reserve for loan losses: |
||||||||||||||||||||
Beginning balance |
$ | 71,510 | $ | 75,655 | $ | 74,881 | $ | 71,705 | $ | 67,931 | ||||||||||
Loans charged-off: |
||||||||||||||||||||
Commercial |
1,993 | 11,135 | 2,384 | 6,653 | 7,551 | |||||||||||||||
Real estate construction |
| | 6,229 | 5,789 | 420 | |||||||||||||||
Real estate term |
7,364 | 5,751 | 3,000 | | 766 | |||||||||||||||
Consumer |
34 | 216 | | | | |||||||||||||||
Leases |
532 | 148 | 595 | 218 | 594 | |||||||||||||||
Total |
9,923 | 17,250 | 12,208 | 12,660 | 9,331 | |||||||||||||||
Recoveries: |
||||||||||||||||||||
Commercial |
546 | 47 | 76 | 30 | 23 | |||||||||||||||
Real estate construction |
243 | | 1 | | | |||||||||||||||
Real estate term |
31 | 101 | 7 | 22 | 8 | |||||||||||||||
Consumer |
1 | 2 | 2 | | | |||||||||||||||
Leases |
150 | 75 | 8 | 55 | 20 | |||||||||||||||
Total recoveries |
971 | 225 | 94 | 107 | 51 | |||||||||||||||
Net charge-offs |
8,952 | 17,025 | 12,114 | 12,553 | 9,280 | |||||||||||||||
Provision for loan losses |
7,690 | 12,880 | 12,888 | 15,729 | 13,054 | |||||||||||||||
Ending balance |
$ | 70,248 | $ | 71,510 | $ | 75,655 | $ | 74,881 | $ | 71,705 | ||||||||||
Reserve for off-balance sheet credit losses: |
||||||||||||||||||||
Beginning balance |
$ | 1,897 | $ | 2,777 | $ | 2,165 | $ | 3,394 | $ | 2,948 | ||||||||||
Provision (benefit) for off-balance sheet credit losses |
(190 | ) | (880 | ) | 612 | (1,229 | ) | 446 | ||||||||||||
Ending balance |
$ | 1,707 | $ | 1,897 | $ | 2,777 | $ | 2,165 | $ | 3,394 | ||||||||||
Total reserves for credit losses |
$ | 71,955 | $ | 73,407 | $ | 78,432 | $ | 77,046 | $ | 75,099 | ||||||||||
Total provision for credit losses |
$ | 7,500 | 12,000 | $ | 13,500 | $ | 14,500 | $ | 13,500 | |||||||||||
Reserve to loans held for investment(2) |
1.49 | % | 1.52 | % | 1.69 | % | 1.68 | % | 1.61 | % | ||||||||||
Reserve to average loans held for investment(2) |
1.49 | % | 1.58 | % | 1.68 | % | 1.68 | % | 1.63 | % | ||||||||||
Net charge-offs to average loans(1)(2) |
.77 | % | 1.49 | % | 1.07 | % | 1.13 | % | .85 | % | ||||||||||
Net charge-offs to average loans for last twelve
months(1)(2) |
1.11 | % | 1.14 | % | .95 | % | .73 | % | .61 | % | ||||||||||
Total provision for credit losses to average loans(1)(2) |
.64 | % | 1.05 | % | 1.19 | % | 1.30 | % | 1.24 | % | ||||||||||
Combined reserves for credit losses to loans held for
investment(2) |
1.53 | % | 1.56 | % | 1.75 | % | 1.73 | % | 1.69 | % | ||||||||||
Non-performing assets (NPAs): |
||||||||||||||||||||
Non-accrual loans |
$ | 116,479 | $ | 112,090 | $ | 127,054 | $ | 138,236 | $ | 115,926 | ||||||||||
Other real estate owned (OREO) (4) |
26,172 | 42,261 | 38,646 | 42,077 | 28,865 | |||||||||||||||
Total |
$ | 142,651 | $ | 154,351 | $ | 165,700 | $ | 180,313 | $ | 144,791 | ||||||||||
Non-accrual loans to loans(2) |
2.47 | % | 2.38 | % | 2.83 | % | 3.10 | % | 2.61 | % | ||||||||||
Total NPAs to loans plus OREO(2) |
3.01 | % | 3.25 | % | 3.66 | % | 4.00 | % | 3.24 | % | ||||||||||
Reserve for loan losses to non-accrual loans |
.6 | x | .6 | x | .6 | x | .5 | x | .6 | x | ||||||||||
Restructured loans |
$ | 22,219 | $ | 4,319 | $ | | $ | | $ | 10,700 | ||||||||||
Loans past due 90 days and still accruing(3) |
$ | 2,529 | $ | 6,706 | $ | 2,428 | $ | 13,962 | $ | 2,390 | ||||||||||
Loans past due 90 days to loans(2) |
.05 | % | .14 | % | .05 | % | .31 | % | .05 | % |
(1) | Interim period ratios are annualized. | |
(2) | Excludes loans held for sale. | |
(3) | At March 31, 2011, loans past due 90 days and still accruing includes premium finance loans of $2.4 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date. | |
(4) | At March 31, 2011, OREO balance is net of $10.4 million valuation allowance. |
7
1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | ||||||||||||||||
2011 | 2010 | 2010 | 2010 | 2010 | ||||||||||||||||
Interest income |
||||||||||||||||||||
Interest and fees on loans |
$ | 68,040 | $ | 73,206 | $ | 70,293 | $ | 64,935 | $ | 61,569 | ||||||||||
Securities |
1,846 | 2,018 | 2,246 | 2,491 | 2,726 | |||||||||||||||
Federal funds sold |
28 | 118 | 50 | 40 | 2 | |||||||||||||||
Deposits in other banks |
197 | 90 | 11 | 6 | 9 | |||||||||||||||
Total interest income |
70,111 | 75,432 | 72,600 | 67,472 | 64,306 | |||||||||||||||
Interest expense |
||||||||||||||||||||
Deposits |
4,871 | 8,371 | 8,760 | 8,420 | 7,758 | |||||||||||||||
Federal funds purchased |
107 | 229 | 259 | 244 | 365 | |||||||||||||||
Repurchase agreements |
2 | 1 | 3 | 2 | 4 | |||||||||||||||
Other borrowings |
| | | 1 | 47 | |||||||||||||||
Trust preferred subordinated debentures |
633 | 876 | 972 | 920 | 904 | |||||||||||||||
Total interest expense |
5,613 | 9,477 | 9,994 | 9,587 | 9,078 | |||||||||||||||
Net interest income |
64,498 | 65,955 | 62,606 | 57,885 | 55,228 | |||||||||||||||
Provision for credit losses |
7,500 | 12,000 | 13,500 | 14,500 | 13,500 | |||||||||||||||
Net interest income after provision for credit losses |
56,998 | 53,955 | 49,106 | 43,385 | 41,728 | |||||||||||||||
Non-interest income |
||||||||||||||||||||
Service charges on deposit accounts |
1,783 | 1,708 | 1,662 | 1,539 | 1,483 | |||||||||||||||
Trust fee income |
954 | 899 | 1,013 | 980 | 954 | |||||||||||||||
Bank owned life insurance (BOLI) income |
523 | 482 | 455 | 481 | 471 | |||||||||||||||
Brokered loan fees |
2,520 | 3,793 | 3,272 | 2,221 | 1,904 | |||||||||||||||
Equipment rental income |
783 | 802 | 792 | 1,196 | 1,344 | |||||||||||||||
Other |
1,121 | 1,494 | 907 | 1,619 | 792 | |||||||||||||||
Total non-interest income |
7,684 | 9,178 | 8,101 | 8,036 | 6,948 | |||||||||||||||
Non-interest expense |
||||||||||||||||||||
Salaries and employee benefits |
24,172 | 21,964 | 21,872 | 21,393 | 20,069 | |||||||||||||||
Net occupancy expense |
3,310 | 3,140 | 3,128 | 3,032 | 3,014 | |||||||||||||||
Leased equipment depreciation |
556 | 623 | 580 | 1,035 | 1,059 | |||||||||||||||
Marketing |
2,123 | 2,198 | 1,333 | 1,101 | 787 | |||||||||||||||
Legal and professional |
2,723 | 3,884 | 2,705 | 3,298 | 1,950 | |||||||||||||||
Communications and technology |
2,347 | 2,143 | 2,256 | 2,186 | 1,926 | |||||||||||||||
FDIC insurance assessment |
2,511 | 2,611 | 2,482 | 2,241 | 1,868 | |||||||||||||||
Allowance and other carrying costs for OREO |
4,030 | 3,233 | 4,071 | 808 | 2,292 | |||||||||||||||
Other |
4,627 | 4,786 | 4,175 | 4,024 | 4,221 | |||||||||||||||
Total non-interest expense |
46,399 | 44,582 | 42,602 | 39,118 | 37,186 | |||||||||||||||
Income from continuing operations before income taxes |
18,283 | 18,551 | 14,605 | 12,303 | 11,490 | |||||||||||||||
Income tax expense |
6,344 | 6,475 | 5,074 | 4,187 | 3,890 | |||||||||||||||
Income from continuing operations |
11,939 | 12,076 | 9,531 | 8,116 | 7,600 | |||||||||||||||
Loss from discontinued operations (after-tax) |
(60 | ) | (22 | ) | (5 | ) | (54 | ) | (55 | ) | ||||||||||
Net income |
$ | 11,879 | $ | 12,054 | $ | 9,526 | $ | 8,062 | $ | 7,545 | ||||||||||
8
1st Quarter 2011 | 4th Quarter 2010 | 3rd Quarter 2010 | 2nd Quarter 2010 | 1st Quarter 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average | Revenue/ | Yield/ | Average | Revenue/ | Yield/ | Average | Revenue/ | Yield/ | Average | Revenue/ | Yield/ | Average | Revenue/ | Yield/ | ||||||||||||||||||||||||||||||||||||||||||||||
Balance | Expense (1) | Rate | Balance | Expense (1) | Rate | Balance | Expense (1) | Rate | Balance | Expense (1) | Rate | Balance | Expense (1) | Rate | ||||||||||||||||||||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Taxable |
$ | 140,007 | $ | 1,500 | 4.35 | % | $ | 155,180 | $ | 1,666 | 4.26 | % | $ | 173,835 | $ | 1,890 | 4.31 | % | $ | 193,542 | $ | 2,126 | 4.41 | % | $ | 211,618 | $ | 2,341 | 4.49 | % | ||||||||||||||||||||||||||||||
Securities Non-taxable(2) |
37,154 | 532 | 5.81 | % | 37,848 | 541 | 5.67 | % | 38,357 | 548 | 5.67 | % | 39,635 | 562 | 5.69 | % | 41,654 | 592 | 5.76 | % | ||||||||||||||||||||||||||||||||||||||||
Federal funds sold |
44,322 | 28 | 0.26 | % | 241,907 | 118 | 0.19 | % | 107,404 | 50 | 0.18 | % | 91,564 | 40 | 0.18 | % | 7,471 | 2 | 0.11 | % | ||||||||||||||||||||||||||||||||||||||||
Deposits in other banks |
277,228 | 197 | 0.29 | % | 144,650 | 90 | 0.25 | % | 18,766 | 11 | 0.23 | % | 12,449 | 6 | 0.19 | % | 12,457 | 9 | 0.29 | % | ||||||||||||||||||||||||||||||||||||||||
Loans held for sale |
735,682 | 8,677 | 4.78 | % | 1,324,264 | 15,314 | 4.59 | % | 1,074,309 | 12,760 | 4.71 | % | 664,474 | 8,244 | 4.98 | % | 457,459 | 5,490 | 4.87 | % | ||||||||||||||||||||||||||||||||||||||||
Loans held for investment |
4,721,928 | 59,363 | 5.10 | % | 4,533,501 | 57,892 | 5.07 | % | 4,493,998 | 57,533 | 5.08 | % | 4,459,790 | 56,691 | 5.10 | % | 4,413,960 | 56,079 | 5.15 | % | ||||||||||||||||||||||||||||||||||||||||
Less reserve for loan losses |
70,142 | | | 74,580 | | | 74,810 | | | 71,536 | | | 66,726 | | | |||||||||||||||||||||||||||||||||||||||||||||
Loans, net of reserve |
5,387,468 | 68,040 | 5.12 | % | 5,783,185 | 73,206 | 5.02 | % | 5,493,497 | 70,293 | 5.08 | % | 5,052,728 | 64,935 | 5.15 | % | 4,804,693 | 61,569 | 5.20 | % | ||||||||||||||||||||||||||||||||||||||||
Total earning assets |
5,886,179 | 70,297 | 4.84 | % | 6,362,770 | 75,621 | 4.72 | % | 5,831,859 | 72,792 | 4.95 | % | 5,389,918 | 67,669 | 5.04 | % | 5,077,893 | 64,513 | 5.15 | % | ||||||||||||||||||||||||||||||||||||||||
Cash and other assets |
297,060 | 285,566 | 267,923 | 261,668 | 311,128 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 6,183,239 | $ | 6,648,336 | $ | 6,099,782 | $ | 5,651,586 | $ | 5,389,021 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities and Stockholders Equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transaction deposits |
$ | 345,978 | $ | 55 | 0.06 | % | $ | 434,160 | $ | 132 | 0.12 | % | $ | 465,370 | $ | 189 | 0.16 | % | $ | 484,900 | $ | 389 | 0.32 | % | $ | 365,205 | $ | 264 | 0.29 | % | ||||||||||||||||||||||||||||||
Savings deposits |
2,469,435 | 2,371 | 0.39 | % | 2,511,343 | 3,978 | 0.63 | % | 2,222,431 | 4,228 | 0.75 | % | 2,054,199 | 4,047 | 0.79 | % | 1,773,201 | 3,524 | 0.81 | % | ||||||||||||||||||||||||||||||||||||||||
Time deposits |
709,604 | 1,921 | 1.10 | % | 1,022,509 | 3,068 | 1.19 | % | 955,703 | 3,044 | 1.26 | % | 832,973 | 2,808 | 1.35 | % | 840,820 | 2,787 | 1.34 | % | ||||||||||||||||||||||||||||||||||||||||
Deposits in foreign branches |
376,570 | 524 | 0.56 | % | 451,088 | 1,193 | 1.05 | % | 418,112 | 1,299 | 1.23 | % | 380,361 | 1,176 | 1.24 | % | 353,803 | 1,183 | 1.36 | % | ||||||||||||||||||||||||||||||||||||||||
Total interest bearing deposits |
3,901,587 | 4,871 | 0.51 | % | 4,419,100 | 8,371 | 0.75 | % | 4,061,616 | 8,760 | 0.86 | % | 3,752,433 | 8,420 | 0.90 | % | 3,333,029 | 7,758 | 0.94 | % | ||||||||||||||||||||||||||||||||||||||||
Other borrowings |
159,450 | 109 | 0.28 | % | 212,939 | 230 | 0.43 | % | 230,043 | 262 | 0.45 | % | 222,427 | 247 | 0.45 | % | 461,477 | 416 | 0.37 | % | ||||||||||||||||||||||||||||||||||||||||
Trust preferred subordinated debentures |
113,406 | 633 | 2.26 | % | 113,406 | 876 | 3.06 | % | 113,406 | 972 | 3.40 | % | 113,406 | 920 | 3.25 | % | 113,406 | 904 | 3.23 | % | ||||||||||||||||||||||||||||||||||||||||
Total interest bearing liabilities |
4,174,443 | 5,613 | 0.55 | % | 4,745,445 | 9,477 | 0.79 | % | 4,405,065 | 9,994 | 0.90 | % | 4,088,266 | 9,587 | 0.94 | % | 3,907,912 | 9,078 | 0.94 | % | ||||||||||||||||||||||||||||||||||||||||
Demand deposits |
1,417,734 | 1,337,213 | 1,142,735 | 1,024,292 | 956,359 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities |
47,753 | 35,589 | 28,997 | 24,693 | 28,643 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders equity |
543,309 | 530,089 | 522,985 | 514,335 | 496,107 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders
equity |
$ | 6,183,239 | $ | 6,648,336 | $ | 6,099,782 | $ | 5,651,586 | $ | 5,389,021 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income |
$ | 64,684 | $ | 66,144 | $ | 62,798 | $ | 58,082 | $ | 55,435 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin |
4.46 | % | 4.12 | % | 4.27 | % | 4.32 | % | 4.43 | % |
(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. |
9
TCBI Q1 2011 Earnings April 20, 2011 |
Certain matters discussed on this call may contain forward-looking statements, which are subject to risks and uncertainties. A number of factors, many of which are beyond Texas Capital Bancshares' control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include 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 for the year ended December 31, 2010, and other filings made by Texas Capital Bancshares with the Securities and Exchange Commission. |
3 Opening Remarks Another quarter of solid earnings Expansion of NIM driven by improved funding costs Continued demand deposit growth Planned reduction in interest bearing deposits; part of strategy to reduce excess liquidity Credit costs consistent with expectations and showing improved trajectory; expected to continue throughout 2011 Growth of 4% in LHI averages from Q4-2010 with pipeline strong for Q2-2011 Expected reduction in LHS balances; good growth in quality customer base Continue to be very well positioned in best economy in US |
Net Income and EPS Strong growth comparisons in net income and EPS as compared to Q1-2010 Operating Leverage, Core Earnings Power & NIM Growth of Net Revenue - 16% as compared to Q1-2010 Linked quarter slightly down due to fewer days in Q1-2011 and expected decline in LHS LHS returning to more normalized levels at quarter end Growth in average LHI on a linked quarter basis Stable loan spreads Increased pace of reduction in funding costs in Q1-2011 with more to come NIM expansion of 34 bps from Q4-2010 Expense growth Normal increase in Q1-2011 NIE as a result of FICA related to annual incentives Recruiting to support growth achieved and expected with recovery Continued expansion in regions and lines of business to strengthen position Workout and collection expense still high, but will improve with asset quality Valuation expense for OREO $3.3 million for the quarter with modest charge for sale of the largest OREO property during Q1-2011 Financial Review 4 |
Loan Growth Growth in average LHI on a linked quarter basis as a result of loan growth at the end of Q4-2010 Decline in linked quarter LHS as expected with slowdown of refinancing activity Organic growth model clearly improving TCB's market share Deposit Growth Strong growth in demand deposits Consistent reductions in funding costs in Q1-2011 with planned reductions in interest bearing deposits due to excess liquidity Credit Costs Total credit costs of $10.8 million Consistent with expectations for improved trajectory started in last half of 2010 Provision of $7.5 million compared to $12.0 million in Q4-2010 OREO valuation cost of $3.3 million compared to $2.3 million in Q4-2010 due to completed and pending sales NCOs of $9 million, down sharply from Q4-2010 Improvement in level of NPAs with sale of OREO Reduction of credit costs and NPAs anticipated during balance of 2011 Financial Review 5 |
6 6 Income Statement (in thousands) Excluding OREO valuation/write-down expense |
7 QTD Average Balances, Yields and Rates (in thousands) (in thousands) (in thousands) |
8 8 Financial Summary (in thousands) |
9 Financial Summary (in thousands) (in thousands) (in thousands) |
10 2006 2007 2008 2009 2010 Q1 2011 Non Interest Expense 86912 98606 109651 137733 154984 172316 2006 2007 2008 2009 2010 Q1 2011 Net Interest Income 117170 139752 151737 196691 241674 257992 Non Interest Income 17684 20627 22470 29260 32263 30736 2006 2007 2008 2009* 2010* ($ in thousands) 2011*^ 134,854 160,379 174,207 225,951 273,937 288,728 Operating Revenue CAGR: 20% Net Interest Income CAGR: 20% Non-interest Income CAGR: 14% Non-interest Expense CAGR: 17% Revenue and Expense Growth *Excludes OREO valuation expenses ^Annualized based on 3/31/11 data. Net Interest Income Non-interest Income Non-interest Expense |
11 Deposit and Loan Growth 2006 2007 2008 2009 2010 Q1-2011 Demand Deposits 514 529 587 899 1451 1481 Interest Bearing Deposits 2555 2537 2746 3222 4004 3741 Loans HFI* Interest Bearing Deposits Demand Deposits * Excludes loans held for sale. 2006 2007 2008 2009 2010 Q1-2011 Loans Held for Investment 2722 3462 4028 4457 4711 4711 2006 2007 2008 2009 2010 ($ in millions) Q1-2011 Demand Deposit CAGR: 28% Total Deposit CAGR: 13% Loans Held for Investment CAGR: 14% |
12 Loan Portfolio Statistics Loan Portfolio Statistics Total Loans $5,522,824 All numbers in thousands. |
13 Credit Quality Credit experience remains consistent with expectations Total credit cost of $10.8 million for Q1-2011 Decreased $3.5 million from Q4-2010, reflecting better trend; lowest level since Q1-2009 Substantial reduction in NCOs to $9.0 million, representing 77 bps compared to 114 bps for 2010; lowest level in 5 quarters Provision of $7.5 million for Q1-2011 compared to $12.0 million for Q4-2010; lowest level since Q3-2008 OREO valuation charge of $3.3 million for the quarter to address actual and pending sales Credit costs consistent with more aggressive efforts to reduce NPAs Non-performing asset levels remain manageable due to strong earnings power With reduction of $16.1 million in OREO, NPAs decreased $11.7 million with NPA ratio of 3.01% NPA ratio at lowest level since Q4-2009 and 99 bps below peak in Q2-2010 Non-accrual loans of $116.5 million, up $4.4 million from Q4-2010 at 2.47% of LHI Potential for continued reduction in credit costs and NPAs throughout 2011 |
14 Credit Quality Reserve / Loans* 1.53% 1.56% 1.59% 1.16% .95% Non-accrual loans + OREO to loans* + OREO 3.01% 3.25% 2.74% 1.81% .69% Reserve to non-accruals .6x .6x .7x 1.0x 1.5x Net Charge-offs / Average Loans YTD 2011 2010 2009 2008 2007 * Excludes loans held for sale. |
15 Closing Comments Strong core earnings power continues in 2011 Exceptional DDA growth in Q1-2011 with significant improvement in margin Maintaining strong capital position Credit costs as expected with improvements from prior quarters; improvements expected to continue throughout 2011 Well positioned to take advantage of market opportunities as economic conditions improve |
Q&A |
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