EX-99.1 2 a1021-2015exhibit991.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1
October 21, 2015
MEDIA & INVESTOR CONTACT
Heather Worley, 214.932.6646
heather.worley@texascapitalbank.com

TEXAS CAPITAL BANCSHARES, INC. ANNOUNCES OPERATING RESULTS FOR Q3 2015

DALLAS - October 21, 2015 - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the third quarter of 2015.

“We are pleased to report another good quarter of growth in loans, deposits and earnings," said Keith Cargill, CEO. "We experienced quality growth in core loans held for investment during the quarter with the expected solid performance in our mortgage finance business. While we continue to monitor credit very closely, we experienced some improvement in non-performing levels in the third quarter. We launched our Mortgage Correspondent Aggregation ("MCA") program late in the quarter after completing the pilot phase."

•
Loans held for investment ("LHI"), excluding mortgage finance, increased 4% and total LHI decreased 1% on a linked quarter basis, growing 19% and 18%, respectively, from the third quarter of 2014.
•
Mortgage finance loans decreased 12% on a linked quarter basis and increased 14% from the third quarter of 2014.
•
Demand deposits increased 1% and total deposits increased 7% on a linked quarter basis, growing 39% and 29%, respectively, from the third quarter of 2014.
•
Net income decreased 2% on a linked quarter basis and increased 1% from the third quarter of 2014.
•
EPS decreased 1% on a linked quarter basis, and decreased 4% from the third quarter of 2014.

FINANCIAL SUMMARY
(dollars and shares in thousands)
 
 Q3 2015
 
Q3 2014
 
% Change
QUARTERLY OPERATING RESULTS
 
 
 
 
 
Net income
$
37,114

 
$
36,832

 
1
 %
Net income available to common stockholders
$
34,676

 
$
34,394

 
1
 %
Diluted EPS
$
0.75

 
$
0.78

 
(4
)%
Diluted shares
46,471

 
43,850

 
6
 %
ROA
0.79
%
 
1.07
%
 
 
ROE
9.69
%
 
12.11
%
 
 
 
 
 
 
 
 
BALANCE SHEET
 
 
 
 
 
Total assets
$
18,665,995

 
$
14,268,561

 
31
 %
Demand deposits
6,545,273

 
4,722,479

 
39
 %
Total deposits
15,165,345

 
11,715,808

 
29
 %
LHI
11,562,828

 
9,686,422

 
19
 %
LHI, mortgage finance
4,312,790

 
3,774,467

 
14
 %
Total LHI
15,875,618

 
13,460,889

 
18
 %
Stockholders’ equity
1,590,051

 
1,297,922

 
23
 %
Tangible book value per share
$
30.98

 
$
26.10

 
19
 %




DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income of $37.1 million and net income available to common stockholders of $34.7 million for the quarter ended September 30, 2015 compared to net income of $36.8 million and net income available to common stockholders of $34.4 million for the same period in 2014. On a fully diluted basis, earnings per common share were $0.75 for the quarter ended September 30, 2015 compared to $0.78 for the same period of 2014. The decrease is related to the dilutive effect of the fourth quarter 2014 offering of 2.5 million common shares for net proceeds of $149.6 million.

Return on average common equity (“ROE”) was 9.69 percent and return on average assets (“ROA”) was 0.79 percent for the third quarter of 2015, compared to 12.11 percent and 1.07 percent, respectively, for the third quarter of 2014. The ROE decrease resulted from the 23 percent year-over-year increase in average common equity, reflecting the impact of the common stock offering completed in the fourth quarter of 2014. The ROA decrease resulted from a combination of reduced yields on loans and a $2.5 billion increase in average liquidity assets, which include Federal funds sold and deposits in other banks, from the third quarter of 2014 to the third quarter of 2015. The majority of the liquidity assets relates to deposits at the Federal Reserve Bank of Dallas, which have an average yield of 0.25 percent for the third quarter of 2015, consistent with the same period of 2014.

Net interest income was $142.0 million for the third quarter of 2015, compared to $125.7 million for the third quarter of 2014 and $142.3 million for the second quarter of 2015. The net interest margin for the third quarter of 2015 was 3.12 percent, a 65 basis point decrease from the third quarter of 2014 and a 10 basis point decrease from the second quarter of 2015. The year-over-year decrease in net interest margin is due primarily to a substantial increase in liquidity assets, as well as the growth in loans with lower average yields. The cost of total deposits and borrowed funds was 17 basis points for the third quarter of 2015, compared to 16 basis points for the third quarter of 2014 and second quarter of 2015.

Average LHI, excluding mortgage finance loans, for the third quarter of 2015 were $11.3 billion, an increase of $1.9 billion, or 20 percent, from the third quarter of 2014, and an increase of $361.2 million, or 3 percent, from the second quarter of 2015. Average mortgage finance loans for the third quarter of 2015 were $4.0 billion, an increase of $528.9 million, or 15 percent, from the third quarter of 2014 and a decrease of $591.7 million, or 13 percent, from the second quarter of 2015.

As announced we successfully launched our MCA business late in the quarter after completing the pilot phase. Due to the delayed launch, the ramp up of production will be slower than expected. As expected, the offering is providing for increases in yields and reduction in capital risk weight, however competition among non-banks attempting to build servicing portfolios is driving fees to exceptionally low levels. We anticipate increasing the rate of loan growth to drive higher net interest income at higher risk-adjusted returns.

Average total deposits for the third quarter of 2015 increased $3.4 billion from the third quarter of 2014 and increased $368.3 million from the second quarter of 2015. Average demand deposits for the third quarter of 2015 increased $2.0 billion, or 42 percent, to $6.6 billion from $4.7 billion during the third quarter of 2014 and decreased $183.8 million, or 3 percent, from the second quarter of 2015.

We recorded a $13.8 million provision for credit losses in the third quarter of 2015 compared to $6.5 million in the third quarter of 2014 and $14.5 million in the second quarter of 2015. The provision for the third quarter of 2015 was driven by the application of our methodology. The year-over-year increase was primarily related to the growth in traditional LHI, excluding mortgage finance loans, as well as 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 loan portfolio. The combined reserve at September 30, 2015 increased to 1.19 percent of LHI excluding mortgage finance loans due to continuing loan growth and increases in the provision in 2015, as compared to 1.06 percent at September 30, 2014 and 1.14 percent at June 30, 2015. In management’s opinion, the reserve is appropriate and is derived from consistent application of the methodology for establishing the adequacy of reserves for Texas Capital Bank’s loan portfolio.

We experienced a decrease in non-performing asset totals in the third quarter of 2015 on a linked quarter basis, bringing the ratio of total non-performing assets to total LHI plus other real estate owned (“OREO”) to 0.69 percent compared to 0.28 percent in the third quarter of 2014 and .77 percent in the second quarter of 2015. Net charge-offs for the third quarter of 2015 were $2.3 million compared to net charge-offs of $595,000 in the third quarter of 2014 and net charge-offs of $3.7 million in the second quarter of 2015. For the third quarter of 2015, net charge-offs were 0.06 percent of total LHI, compared to 0.02 percent for the same period in 2014 and 0.10 percent for the second quarter of 2015.

Non-interest income increased $984,000, or 9 percent, during the third quarter of 2015 compared to the same period of 2014. Brokered loan fees and service charges increased $1.1 million and $279,000, respectively, during the third quarter of 2015 compared to the same period of 2014. The increase in brokered loan fees was a result of an increase in mortgage finance volumes. The increase in service charge income was a result of an increase in the deposit balances for the quarter ended September 30, 2015 compared to the quarter ended September 30, 2014. Offsetting these increases was a $210,000 decrease in swap fees income during the third quarter of 2015 compared to the same period of 2014. These fees fluctuate from quarter to quarter based on the number and volume of transactions closed during the quarter.

Non-interest expense for the third quarter of 2015 increased $9.8 million, or 14 percent, compared to the third quarter of 2014. The increase is primarily related to a $5.4 million increase in salaries and employee benefits expense, a $1.2 million increase in other non-

2



interest expense, a $636,000 increase in legal and professional expense, a $595,000 increase in net occupancy expense, and a $252,000 increase in communications and technology expense, all of which were due to general business growth. FDIC insurance assessment expense for the third quarter of 2015 increased $1.7 million compared to the same quarter in 2014 as a result of the increase in total assets from September 30, 2014 to September 30, 2015.

Stockholders’ equity increased by 23 percent from $1.3 billion at September 30, 2014 to $1.6 billion at September 30, 2015, primarily due to the offering of 2.5 million common shares for net proceeds of $149.6 million in the fourth quarter of 2014 and retention of net income. Texas Capital Bank is well capitalized under regulatory guidelines and at September 30, 2015, our ratio of tangible common equity to total tangible assets was 7.6 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, deterioration of the credit quality of our loan portfolio, the effects of recent declines in oil and gas prices on our customers, increased defaults and loan losses, the risk of adverse impacts from general economic conditions, volatility in the mortgage industry, 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, as well as a discussion of the risks and uncertainties that may affect 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.



3



TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
 
3rd Quarter
2nd Quarter
1st Quarter
4th Quarter
3rd Quarter
 
2015
2015
2015
2014
2014
CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
 
Interest income
$
153,856

$
153,374

$
140,908

$
137,833

$
135,290

Interest expense
11,808

11,089

10,899

10,251

9,629

Net interest income
142,048

142,285

130,009

127,582

125,661

Provision for credit losses
13,750

14,500

11,000

6,500

6,500

Net interest income after provision for credit losses
128,298

127,785

119,009

121,082

119,161

Non-interest income
11,380

12,771

12,267

11,226

10,396

Non-interest expense
81,688

81,276

76,517

74,117

71,915

Income before income taxes
57,990

59,280

54,759

58,191

57,642

Income tax expense
20,876

21,343

19,709

20,357

20,810

Net income
37,114

37,937

35,050

37,834

36,832

Preferred stock dividends
2,438

2,437

2,438

2,437

2,438

Net income available to common stockholders
$
34,676

$
35,500

$
32,612

$
35,397

$
34,394

 
 
 
 
 
 
Diluted EPS
$
.75

$
.76

$
.70

$
.78

$
.78

Diluted shares
46,471,390

46,443,413

46,367,870

45,092,511

43,849,838

 
 
 
 
 
 
CONSOLIDATED BALANCE SHEET DATA
 
 
 
 
 
Total assets
$
18,665,995

$
17,817,338

$
17,325,458

$
15,899,946

$
14,268,561

LHI
11,562,828

11,123,325

10,760,978

10,154,887

9,686,422

LHI, mortgage finance
4,312,790

4,906,415

5,408,750

4,102,125

3,774,467

Loans held for sale, at fair value
1,062

—

—

—

—

Liquidity assets
2,345,192

1,337,364

734,945

1,233,990

427,199

Securities
31,998

35,361

37,649

41,719

43,938

Demand deposits
6,545,273

6,479,073

6,050,817

5,011,619

4,722,479

Total deposits
15,165,345

14,188,276

14,122,306

12,673,300

11,715,808

Other borrowings
1,353,834

1,509,007

1,125,458

1,192,681

735,689

Subordinated notes
286,000

286,000

286,000

286,000

286,000

Long-term debt
113,406

113,406

113,406

113,406

113,406

Stockholders’ equity
1,590,051

1,554,529

1,517,958

1,484,190

1,297,922

 
 
 
 
 
 
End of period shares outstanding
45,839,364

45,812,971

45,772,245

45,735,007

43,179,134

Book value
$
31.42

$
30.66

$
29.89

$
29.14

$
26.59

Tangible book value(1)
$
30.98

$
30.22

$
29.44

$
28.69

$
26.10

 
 
 
 
 
 
SELECTED FINANCIAL RATIOS
 
 
 
 
 
Net interest margin
3.12
%
3.22
%
3.22
%
3.56
%
3.77
%
Return on average assets
0.79
%
0.83
%
0.84
%
1.03
%
1.07
%
Return on average common equity
9.69
%
10.32
%
9.82
%
11.41
%
12.11
%
Non-interest income to earning assets
0.25
%
0.29
%
0.30
%
0.31
%
0.31
%
Efficiency ratio(2)
53.2
%
52.4
%
53.8
%
53.4
%
52.9
%
Non-interest expense to earning assets
1.80
%
1.84
%
1.89
%
2.07
%
2.16
%
Tangible common equity to total tangible assets(3)
7.6
%
7.8
%
7.8
%
8.3
%
7.9
%
Common Equity Tier 1(1)
7.7
%
7.4
%
7.2
%
7.9
%
7.2
%
Tier 1 capital
9.1
%
8.8
%
8.6
%
9.5
%
8.8
%
Total capital
11.4
%
11.0
%
10.7
%
11.8
%
11.3
%
Leverage
9.1
%
9.0
%
9.5
%
10.8
%
10.2
%
(1)
Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(2)
Non-interest expense divided by the sum of net interest income and non-interest income.
(3)
Stockholders’ equity excluding preferred stock and accumulated other comprehensive income less goodwill and intangibles divided by total assets less accumulated other comprehensive income and goodwill and intangibles.


4



TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
 
September 30,
2015
September 30,
2014
%
Change
Assets
 
 
 
Cash and due from banks
$
101,758

$
102,503

(1
)%
Interest-bearing deposits
2,320,192

427,199

443
 %
Federal funds sold and securities purchased under resale agreements
25,000

—

100
 %
Securities, available-for-sale
31,998

43,938

(27
)%
Loans held for sale, at fair value
1,062

—

100
 %
LHI, mortgage finance
4,312,790

3,774,467

14
 %
LHI (net of unearned income)
11,562,828

9,686,422

19
 %
Less: Allowance for loan losses
130,540

96,322

36
 %
LHI, net
15,745,078

13,364,567

18
 %
Premises and equipment, net
17,772

17,640

1
 %
Accrued interest receivable and other assets
403,040

291,951

38
 %
Goodwill and intangibles, net
20,095

20,763

(3
)%
Total assets
$
18,665,995

$
14,268,561

31
 %
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
Liabilities:
 
 
 
Deposits:
 
 
 
Non-interest bearing
$
6,545,273

$
4,722,479

39
 %
Interest bearing
8,620,072

6,586,903

31
 %
Interest bearing in foreign branches
—

406,426

(100
)%
Total deposits
15,165,345

11,715,808

29
 %
 
 
 


Accrued interest payable
2,694

1,908

41
 %
Other liabilities
154,665

117,828

31
 %
Federal funds purchased and repurchase agreements
103,834

285,678

(64
)%
Other borrowings
1,250,000

450,011

178
 %
Subordinated notes
286,000

286,000

—

Trust preferred subordinated debentures
113,406

113,406

—

Total liabilities
17,075,944

12,970,639

32
 %
 
 
 
 
Stockholders’ equity:
 
 
 
Preferred stock, $.01 par value, $1,000 liquidation value:
 
 
 
Authorized shares - 10,000,000
 
 
 
Issued shares - 6,000,000 shares issued at September 30, 2015 and 2014
150,000

150,000

−

Common stock, $.01 par value:
 
 
 
Authorized shares - 100,000,000
 
 
 
Issued shares - 45,839,781 and 43,179,551 at September 30, 2015 and 2014, respectively
458

432

6
 %
Additional paid-in capital
713,209

558,822

28
 %
Retained earnings
725,502

587,317

24
 %
Treasury stock (shares at cost: 417 at September 30, 2015 and 2014)
(8
)
(8
)
—

Accumulated other comprehensive income, net of taxes
890

1,359

(35
)%
Total stockholders’ equity
1,590,051

1,297,922

23
 %
Total liabilities and stockholders’ equity
$
18,665,995

$
14,268,561

31
 %

5



TEXAS CAPITAL BANCSHARES, INC.
 
 
 
 
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
 
 
 
(Dollars in thousands except per share data)
 
 
 
 
 
Three Months Ended September 30
Nine Months Ended
September 30
 
2015
2014
2015
2014
Interest income
 
 
 
 
Interest and fees on loans
$
151,749

$
134,618

$
442,529

$
374,724

Securities
298

428

979

1,439

Federal funds sold
193

68

427

116

Deposits in other banks
1,616

176

4,203

435

Total interest income
153,856

135,290

448,138

376,714

Interest expense
 
 
 
 
Deposits
6,240

4,606

17,510

12,882

Federal funds purchased
56

82

217

292

Repurchase agreements
6

5

14

13

Other borrowings
672

68

1,590

321

Subordinated notes
4,191

4,241

12,573

11,961

Trust preferred subordinated debentures
643

627

1,892

1,862

Total interest expense
11,808

9,629

33,796

27,331

Net interest income
142,048

125,661

414,342

349,383

Provision for credit losses
13,750

6,500

39,250

15,500

Net interest income after provision for credit losses
128,298

119,161

375,092

333,883

Non-interest income
 
 
 
 
Service charges on deposit accounts
2,096

1,817

6,339

5,277

Trust fee income
1,222

1,190

3,709

3,714

Bank owned life insurance (BOLI) income
484

517

1,444

1,547

Brokered loan fees
4,885

3,821

14,394

10,002

Swap fees
254

464

3,275

2,098

Other
2,439

2,587

7,257

8,647

Total non-interest income
11,380

10,396

36,418

31,285

Non-interest expense
 
 
 
 
Salaries and employee benefits
48,583

43,189

142,611

125,141

Net occupancy expense
5,874

5,279

17,373

15,120

Marketing
3,999

4,024

12,142

11,578

Legal and professional
5,510

4,874

15,176

17,457

Communications and technology
5,180

4,928

15,905

13,213

FDIC insurance assessment
4,489

2,775

12,490

8,044

Allowance and other carrying costs for OREO
1

5

16

61

Other
8,052

6,841

23,768

20,383

Total non-interest expense
81,688

71,915

239,481

210,997

Income before income taxes
57,990

57,642

172,029

154,171

Income tax expense
20,876

20,810

61,928

55,653

Net income
37,114

36,832

110,101

98,518

Preferred stock dividends
2,438

2,438

7,313

7,313

Net income available to common stockholders
$
34,676

$
34,394

$
102,788

$
91,205

 
 
 
 
 
Basic earnings per common share
$
0.76

$
0.80

$
2.24

$
2.13

Diluted earnings per common share
$
0.75

$
0.78

$
2.21

$
2.09



6



TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
 
3rd Quarter
2nd Quarter
1st Quarter
4th Quarter
3rd Quarter
 
2015
2015
2015
2014
2014
Reserve for loan losses:
 
 
 
 
 
Beginning balance
$
118,770

$
108,078

$
100,954

$
96,322

$
91,114

Loans charged-off:
 
 
 
 
 
Commercial
2,758

5,418

3,102

1,285

992

Real estate
—

—

346

—

—

Consumer
—

—

62

165

—

Leases
25

—

—

—

—

Total charge-offs
2,783

5,418

3,510

1,450

992

Recoveries:
 
 
 
 
 
Commercial
388

1,424

286

190

329

Real estate
8

12

8

34

2

Construction
42

272

83

—

—

Consumer
9

6

4

96

35

Leases
4

15

8

2

31

Total recoveries
451

1,729

389

322

397

Net charge-offs
2,332

3,689

3,121

1,128

595

Provision for loan losses
14,102

14,381

10,245

5,760

5,803

Ending balance
$
130,540

$
118,770

$
108,078

$
100,954

$
96,322

 
 
 
 
 
 
Reserve for off-balance sheet credit losses:
 
 
 
 
 
Beginning balance
$
7,934

$
7,815

$
7,060

$
6,320

$
5,623

Provision for off-balance sheet credit losses
(352
)
119

755

740

697

Ending balance
$
7,582

$
7,934

$
7,815

$
7,060

$
6,320

 
 
 
 
 
 
Total reserves for credit losses
$
138,122

$
126,704

$
115,893

$
108,014

$
102,642

 
 
 
 
 
 
Total provision for credit losses
$
13,750

$
14,500

$
11,000

$
6,500

$
6,500

 
 
 
 
 
 
Reserve to LHI
0.82
%
0.74
%
0.67
%
0.71
%
0.72
%
Reserve to LHI excluding mortgage finance loans(2)
1.13
%
1.07
%
1.00
%
0.99
%
0.99
%
Reserve to average LHI
0.85
%
0.77
%
0.76
%
0.75
%
0.75
%
Reserve to average LHI excluding mortgage finance loans(2)
1.15
%
1.09
%
1.03
%
1.02
%
1.02
%
Net charge-offs to average LHI(1)
0.06
%
0.10
%
0.09
%
0.03
%
0.02
%
Net charge-offs to average LHI excluding mortgage finance loans(1)(2)
0.08
%
0.14
%
0.12
%
0.05
%
0.03
%
Net charge-offs to average LHI for last twelve months(1)
0.07
%
0.06
%
0.06
%
0.05
%
0.05
%
Net charge-offs to average LHI, excluding mortgage finance loans, for last twelve months(1)(2)
0.10
%
0.08
%
0.08
%
0.07
%
0.07
%
Total provision for credit losses to average LHI(1)
0.36
%
0.37
%
0.31
%
0.19
%
0.20
%
Total provision for credit losses to average LHI excluding mortgage finance loans(1)(2)
0.48
%
0.53
%
0.42
%
0.26
%
0.27
%
Combined reserves for credit losses to LHI
0.87
%
0.79
%
0.72
%
0.76
%
0.76
%
Combined reserves for credit losses to LHI, excluding mortgage finance loans(2)
1.19
%
1.14
%
1.08
%
1.06
%
1.06
%
 
 
 
 
 
 
Non-performing assets (NPAs):
 
 
 
 
 
Non-accrual loans
$
109,674

$
122,920

$
68,307

$
43,304

$
37,733

Other real estate owned (OREO)
187

609

605

568

617

Total
$
109,861

$
123,529

$
68,912

$
43,872

$
38,350

 
 
 
 
 
 

7



 
3rd Quarter
2nd Quarter
1st Quarter
4th Quarter
3rd Quarter
 
2015
2015
2015
2014
2014
 
 
 
 
 
 
Non-accrual loans to LHI
0.69
%
0.77
%
0.42
%
0.30
%
0.28
%
Non-accrual loans to LHI excluding mortgage finance loans(2)
0.95
%
1.11
%
0.63
%
0.43
%
0.39
%
Total NPAs to LHI plus OREO
0.69
%
0.77
%
0.43
%
0.31
%
0.28
%
Total NPAs to LHI excluding mortgage finance loans plus OREO(2)
0.95
%
1.11
%
0.64
%
0.43
%
0.40
%
Total NPAs to earning assets
0.61
%
0.72
%
0.41
%
0.28
%
0.28
%
Reserve for loan losses to non-accrual loans
1.2x

1.0x

1.6x

2.3x

2.6x

 
 
 
 
 
 
Restructured loans
$
249

$
249

$
319

$
1,806

$
1,853

Loans past due 90 days and still accruing(3)
$
7,558

$
5,482

$
2,971

$
5,274

$
6,102

 
 
 
 
 
 
Loans past due 90 days to LHI
0.05
%
0.03
%
0.02
%
0.04
%
0.05
%
Loans past due 90 days to LHI excluding mortgage finance loans(2)
0.07
%
0.05
%
0.03
%
0.05
%
0.06
%
(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 September 30, 2015, loans past due 90 days and still accruing includes premium finance loans of $6.2 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.


8



TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands)
 
 
 
 
 
 
 
3rd Quarter
2nd Quarter
1st Quarter
4th Quarter
3rd Quarter
 
2015
2015
2015
2014
2014
Interest income
 
 
 
 
 
Interest and fees on loans
$
151,749

$
151,606

$
139,174

$
136,882

$
134,618

Securities
298

323

358

389

428

Federal funds sold
193

118

116

91

68

Deposits in other banks
1,616

1,327

1,260

471

176

Total interest income
153,856

153,374

140,908

137,833

135,290

Interest expense
 
 
 
 
 
Deposits
6,240

5,642

5,628

5,263

4,606

Federal funds purchased
56

93

68

81

82

Repurchase agreements
6

4

4

4

5

Other borrowings
672

528

390

35

68

Subordinated notes
4,191

4,191

4,191

4,241

4,241

Trust preferred subordinated debentures
643

631

618

627

627

Total interest expense
11,808

11,089

10,899

10,251

9,629

Net interest income
142,048

142,285

130,009

127,582

125,661

Provision for credit losses
13,750

14,500

11,000

6,500

6,500

Net interest income after provision for credit losses
128,298

127,785

119,009

121,082

119,161

Non-interest income
 
 
 
 
 
Service charges on deposit accounts
2,096

2,149

2,094

1,976

1,817

Trust fee income
1,222

1,287

1,200

1,223

1,190

Bank owned life insurance (BOLI) income
484

476

484

520

517

Brokered loan fees
4,885

5,277

4,232

3,979

3,821

Swap fees
254

1,035

1,986

894

464

Other
2,439

2,547

2,271

2,634

2,587

Total non-interest income
11,380

12,771

12,267

11,226

10,396

Non-interest expense
 
 
 
 
 
Salaries and employee benefits
48,583

48,200

45,828

43,910

43,189

Net occupancy expense
5,874

5,808

5,691

5,746

5,279

Marketing
3,999

3,925

4,218

4,411

4,024

Legal and professional
5,510

5,618

4,048

3,725

4,874

Communications and technology
5,180

5,647

5,078

5,454

4,928

FDIC insurance assessment
4,489

4,211

3,790

2,875

2,775

Allowance and other carrying costs for OREO
1

6

9

24

5

Other
8,052

7,861

7,855

7,972

6,841

Total non-interest expense
81,688

81,276

76,517

74,117

71,915

Income before income taxes
57,990

59,280

54,759

58,191

57,642

Income tax expense
20,876

21,343

19,709

20,357

20,810

Net income
37,114

37,937

35,050

37,834

36,832

Preferred stock dividends
2,438

2,437

2,438

2,437

2,438

Net income available to common shareholders
$
34,676

$
35,500

$
32,612

$
35,397

$
34,394





9



TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
(Dollars in thousands)
 
3rd Quarter 2015
 
2nd Quarter 2015
 
1st Quarter 2015
 
4th Quarter 2014
 
3rd Quarter 2014
 
Average
Balance
Revenue/
Expense (1)
Yield/
Rate
 
Average
Balance
Revenue/
Expense (1)
Yield/
Rate
 
Average
Balance
Revenue/
Expense (1)
Yield/
Rate
 
Average
Balance
Revenue/
Expense (1)
Yield/
Rate
 
Average
Balance
Revenue/
Expense (1)
Yield/
Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities - Taxable
$
32,358

$
287

3.52
%
 
$
35,081

$
311

3.56
%
 
$
37,145

$
332

3.62
%
 
$
39,258

$
355

3.59
%
 
$
41,716

$
383

3.64
%
Securities - Non-taxable(2)
1,162

17

5.80
%
 
1,427

18

5.06
%
 
2,785

40

5.82
%
 
3,257

52

6.33
%
 
4,697

69

5.83
%
Federal funds sold and securities purchased under resale agreements
308,822

193

0.25
%
 
200,690

118

0.24
%
 
191,297

116

0.25
%
 
139,761

91

0.26
%
 
105,793

68

0.26
%
Deposits in other banks
2,537,033

1,616

0.25
%
 
2,103,732

1,327

0.25
%
 
2,019,567

1,260

0.25
%
 
742,240

471

0.25
%
 
283,062

176

0.25
%
Loans held for sale, at fair value
570

6

4.18
%
 
—

—

—

 
—

—

—

 
—

—

—

 
—

—

—

LHI, mortgage finance loans
3,981,731

30,427

3.03
%
 
4,573,478

33,773

2.96
%
 
3,746,938

27,631

2.99
%
 
3,471,737

26,773

3.06
%
 
3,452,782

27,275

3.13
%
LHI
11,302,248

121,316

4.26
%
 
10,941,029

117,833

4.32
%
 
10,502,172

111,543

4.31
%
 
9,921,611

110,109

4.40
%
 
9,423,548

107,343

4.52
%
Less reserve for loan
       losses
118,543

—

—

 
109,086

—

—

 
101,042

—

—

 
96,139

—

—

 
91,427

—

—

LHI, net of reserve
15,165,436

151,743

3.97
%
 
15,405,421

151,606

3.95
%
 
14,148,068

139,174

3.99
%
 
13,297,209

136,882

4.08
%
 
12,784,903

134,618

4.18
%
Total earning assets
18,045,381

153,862

3.38
%
 
17,746,351

153,380

3.47
%
 
16,398,862

140,922

3.49
%
 
14,221,725

137,851

3.85
%
 
13,220,171

135,314

4.06
%
Cash and other assets
486,846

 
 
 
493,034

 
 
 
459,030

 
 
 
409,635

 
 
 
409,727

 
 
Total assets
$
18,532,227

 
 
 
$
18,239,385

 
 
 
$
16,857,892

 
 
 
$
14,631,360

 
 
 
$
13,629,898

 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transaction deposits
$
1,754,940

$
763

0.17
%
 
$
1,404,521

$
458

0.13
%
 
$
1,401,626

$
444

0.13
%
 
$
1,150,530

$
401

0.14
%
 
$
1,010,003

$
287

0.11
%
Savings deposits
5,858,381

4,616

0.31
%
 
5,610,277

4,332

0.31
%
 
5,891,344

4,420

0.30
%
 
5,479,395

4,121

0.30
%
 
4,991,779

3,519

0.28
%
Time deposits
536,531

723

0.53
%
 
516,582

657

0.51
%
 
447,681

506

0.46
%
 
406,040

413

0.40
%
 
485,558

475

0.39
%
Deposits in foreign branches
179,731

138

0.30
%
 
246,035

195

0.32
%
 
304,225

258

0.34
%
 
369,471

328

0.35
%
 
369,202

325

0.35
%
Total interest bearing deposits
8,329,583

6,240

0.30
%
 
7,777,415

5,642

0.29
%
 
8,044,876

5,628

0.28
%
 
7,405,436

5,263

0.28
%
 
6,856,542

4,606

0.27
%
Other borrowings
1,459,864

734

0.20
%
 
1,565,874

625

0.16
%
 
1,172,675

462

0.16
%
 
251,737

120

0.19
%
 
310,157

155

0.20
%
Subordinated notes
286,000

4,191

5.81
%
 
286,000

4,191

5.88
%
 
286,000

4,191

5.94
%
 
286,000

4,241

5.88
%
 
286,000

4,241

5.88
%
Trust preferred subordinated debentures
113,406

643

2.25
%
 
113,406

631

2.23
%
 
113,406

618

2.21
%
 
113,406

627

2.19
%
 
113,406

627

2.19
%
Total interest bearing liabilities
10,188,853

11,808

0.46
%
 
9,742,695

11,089

0.46
%
 
9,616,957

10,899

0.46
%
 
8,056,579

10,251

0.50
%
 
7,566,105

9,629

0.50
%
Demand deposits
6,621,159

 
 
 
6,804,994

 
 
 
5,592,124

 
 
 
5,047,876

 
 
 
4,669,772

 
 
Other liabilities
152,154

 
 
 
161,614

 
 
 
152,639

 
 
 
146,259

 
 
 
117,418

 
 
Stockholders’ equity
1,570,061

 
 
 
1,530,082

 
 
 
1,496,172

 
 
 
1,380,646

 
 
 
1,276,603

 
 
Total liabilities and stockholders’ equity
$
18,532,227

 
 
 
$
18,239,385

 
 
 
$
16,857,892

 
 
 
$
14,631,360

 
 
 
$
13,629,898

 
 
Net interest income(2)
 
$
142,054

 
 
 
$
142,291

 
 
 
$
130,023

 
 
 
$
127,600

 
 
 
$
125,685

 
Net interest margin
 
 
3.12
%
 
 
 
3.22
%
 
 
 
3.22
%
 
 
 
3.56
%
 
 
 
3.77
%
(1)
The loan averages include loans on which the accrual of interest has been discontinued and are stated net of unearned income.
(2)
Taxable equivalent rates used where applicable.

10