There were 1,883 press releases posted in the last 24 hours and 400,005 in the last 365 days.

Texas Capital Bancshares, Inc. Announces Operating Results for Q2 2018

DALLAS, July 18, 2018 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ:TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the second quarter of 2018.

“We are pleased with our continued strong operating results in the second quarter, including solid growth in traditional LHI and mortgage finance balances," said Keith Cargill, CEO. "We are highly focused on credit quality, as well as driving efficiencies and improving client experience to position us for long-term success."

  • Loans held for investment ("LHI"), excluding mortgage finance, increased 5% on a linked quarter basis, growing 16% from the second quarter of 2017.
  • Total mortgage finance loans, including mortgage correspondent aggregation ("MCA") loans, increased 25% on a linked quarter basis, growing 19% from the second quarter of 2017.
  • Demand deposits increased 3% and total deposits increased 8% on a linked quarter basis, decreasing 6% and increasing 18%, respectively, from the second quarter of 2017.
  • Net income decreased 1% on a linked quarter basis as a result of higher loan loss provisioning and increased 40% from the second quarter of 2017.
  • EPS remained flat on a linked quarter basis as a result of higher loan loss provisioning and increased 42% from the second quarter of 2017.

FINANCIAL SUMMARY
(dollars and shares in thousands)

  Q2 2018   Q2 2017   % Change
QUARTERLY OPERATING RESULTS          
Net income $ 71,436   $ 51,095   40%  
Net income available to common stockholders $ 68,999   $ 48,658   42%  
Diluted EPS $ 1.38   $ 0.97   42%  
Diluted shares 50,096   50,230   —%  
ROA 1.16%   0.96%    
ROE 12.72%   10.08%    
           
BALANCE SHEET          
Loans held for sale (LHS), MCA $ 1,275,466   $ 843,164   51%  
LHI, mortgage finance 5,923,058   5,183,600   14%  
LHI 16,536,721   14,280,353   16%  
Total LHI 22,459,779   19,463,953   15%  
Total loans 23,736,547   20,309,970   17%  
Total assets 27,781,910   23,119,713   20%  
Demand deposits 7,648,125   8,174,830   (6)%  
Total deposits 20,334,871   17,292,223   18%  
Stockholders’ equity 2,343,530   2,100,553   12%  
             
             

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income of $71.4 million and net income available to common stockholders of $69.0 million for the quarter ended June 30, 2018 compared to net income of $51.1 million and net income available to common stockholders of $48.7 million for the same period in 2017. On a fully diluted basis, earnings per common share were $1.38 for the quarter ended June 30, 2018 compared to $0.97 for the same period of 2017. The increase reflects a $20.3 million year-over-year increase in net income caused by an increase in net interest income for the second quarter of 2018 compared to the second quarter of 2017 and a decrease in income tax rates as a result of the Tax Cuts and Jobs Act which became effective on January 1, 2018, offset by an increase in the provision for credit losses and non-interest expense.

Return on average common equity (“ROE”) was 12.72 percent and return on average assets (“ROA”) was 1.16 percent for the second quarter of 2018, compared to 13.39 percent and 1.22 percent, respectively, for the first quarter of 2018 and 10.08 percent and 0.96 percent, respectively, for the second quarter of 2017. The linked quarter decreases in ROE and ROA resulted primarily from increases in the provision for credit losses.

Net interest income was $231.7 million for the second quarter of 2018, compared to $210.3 million for the first quarter of 2018 and $183.0 million for the second quarter of 2017. The linked quarter and year-over-year increases in net interest income were primarily due to increases in total mortgage finance loans (including MCA) and traditional LHI loans, improved earning asset composition and the effect of increases in interest rates on loan yields attributable to our asset-sensitive balance sheet. Net interest margin for the second quarter of 2018 was 3.93 percent, an increase of 22 basis points from the first quarter of 2018 and an increase of 36 basis points from the second quarter of 2017. We experienced significant improvement in traditional LHI yields, reporting a 33 basis point increase for the second quarter of 2018 compared to the first quarter of 2018 and a 75 basis point increase compared to the second quarter of 2017. In contrast, total cost of deposits for the second quarter of 2018 was up only 15 basis points to 0.81 percent compared to 0.66 percent for the first quarter of 2018, and was up 43 basis points from 0.38 percent for the second quarter of 2017.

Average LHI, excluding mortgage finance loans, for the second quarter of 2018 were $15.9 billion, an increase of $458.0 million, or 3 percent, from the first quarter of 2018 and an increase of $2.2 billion, or 16 percent, from the second quarter of 2017. Average total mortgage finance loans for the second quarter of 2018 were $6.4 billion, an increase of $1.1 billion, or 21 percent, from the first quarter of 2018 and an increase of $1.8 billion, or 38 percent, from the second quarter of 2017. Total mortgage finance volumes for the second quarter of 2018 showed increases in average balances from the seasonal lower volumes in the first quarter of 2018.

Average total deposits for the second quarter of 2018 increased $242.8 million from the first quarter of 2018 and increased $2.4 billion from the second quarter of 2017. Average demand deposits for the second quarter of 2018 decreased $130.1 million, or 2 percent, to $8.0 billion from $8.1 billion during the first quarter of 2018, and increased $154.2 million, or 2 percent, from the second quarter of 2017.

We recorded a $27.0 million provision for credit losses for the second quarter of 2018 compared to $12.0 million for the first quarter of 2018 and $13.0 million for the second quarter of 2017. The provision for the second quarter of 2018 was driven by the consistent application of our methodology. The linked-quarter increase was primarily related to traditional LHI growth, as well as credit deterioration in four loans, all of which were identified as non-accrual as of March 31, 2018. The total allowance for credit losses decreased to 1.15 percent of LHI excluding mortgage finance loans at June 30, 2018 compared to 1.27 percent at March 31, 2018 and 1.28 percent at June 30, 2017. In management’s opinion, the allowance is appropriate and is derived from consistent application of the methodology for establishing reserves for the loan portfolio.

We experienced a decrease in non-performing assets ("NPAs") in the second quarter of 2018, decreasing the ratio of total non-performing assets to total LHI plus other real estate owned (“OREO”) to 0.41 percent compared to 0.65 percent for the first quarter of 2018 and 0.73 percent for the second quarter of 2017. Net charge-offs for the second quarter of 2018 were $38.0 million compared to $5.2 million for the first quarter of 2018 and $12.4 million for the second quarter of 2017. The elevated charge-offs for the second quarter of 2018 were primarily related to the four loans referred to above. One of the loans is energy-related, two are leveraged health care and one is general commercial and industrial. For the second quarter of 2018, net charge-offs were 0.73 percent of average total LHI, compared to 0.11 percent for the first quarter of 2018 and 0.28 percent for the same period in 2017. At June 30, 2018, total OREO was $9.5 million compared to $9.6 million at March 31, 2018 and $18.7 million at June 30, 2017. We did not record an OREO valuation allowance during the second quarter of 2018, compared to a valuation allowance of $2.0 million recorded during the first quarter of 2018.

Non-interest income decreased $1.5 million, or 8 percent, during the second quarter of 2018 compared to the same period of 2017, and decreased $2.7 million, or 13 percent, compared to the first quarter of 2018. The year-over-year decrease primarily related to a $3.9 million decrease in other non-interest income attributable to a decrease in gain on sale of MCA loans, offset by a $1.3 million increase in servicing income attributable to an increase in mortgage servicing rights ("MSRs") associated with our MCA program.

Non-interest expense for the second quarter of 2018 increased $20.3 million, or 18 percent, compared to the second quarter of 2017, and increased $5.2 million, or 4 percent, compared to the first quarter of 2018. The year-over-year increase is primarily related to increases in salaries and employee benefits, marketing, legal and professional, FDIC insurance assessment and other non-interest expenses, all of which were attributable to general business growth. Servicing related expenses for the second quarter of 2018 increased $1.7 million compared to the second quarter of 2017 primarily due to an increase in MSRs, which are being amortized. Offsetting these increases was a $4.8 million decrease in communications and technology expense related to a technology write-off taken in the second quarter of 2017. The linked quarter increase in non-interest expense is primarily related to increases in marketing, legal and professional, communications and technology and servicing related expenses, offset by a decrease in allowance and other carrying costs for OREO.

Stockholders’ equity increased by 12 percent from $2.1 billion at June 30, 2017 to $2.3 billion at June 30, 2018, due to retention of net income. Texas Capital Bank is well capitalized under regulatory guidelines and at June 30, 2018, our ratio of tangible common equity to total tangible assets was 7.8 percent.

ABOUT TEXAS CAPITAL BANCSHARES, INC.
Texas Capital Bancshares, Inc. (NASDAQ:TCBI), a member of the Russell 1000® 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, the financial impact of the Tax Cuts and Jobs Act on our results of operations, rates of default or loan losses, volatility in the mortgage industry, the success or failure of our business strategies, future financial performance, future growth and earnings, the appropriateness of our allowance for loan losses and provision for credit losses, the impact of increased regulatory requirements and legislative changes on our business, increased competition, interest rate risk, the success or failure of new lines of business and new product or service offerings and the impact of new technologies. These and other factors that could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission. The information contained in this release speaks only as of its date. We are under no obligation, and expressly disclaim such obligation, to update, alter or revise our forward-looking statements, whether as a result of new information, future events, or otherwise.

TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
  2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter
  2018 2018 2017 2017 2017
CONSOLIDATED STATEMENTS OF INCOME          
Interest income $ 286,852   $ 253,869   $ 249,519   $ 237,643   $ 208,191  
Interest expense 55,140   43,569   38,870   33,282   25,232  
Net interest income 231,712   210,300   210,649   204,361   182,959  
Provision for credit losses 27,000   12,000   2,000   20,000   13,000  
Net interest income after provision for credit losses 204,712   198,300   208,649   184,361   169,959  
Non-interest income 17,279   19,947   19,374   19,003   18,769  
Non-interest expense 132,131   126,960   133,138   114,830   111,814  
Income before income taxes 89,860   91,287   94,885   88,534   76,914  
Income tax expense 18,424   19,342   50,143   29,850   25,819  
Net income 71,436   71,945   44,742   58,684   51,095  
Preferred stock dividends 2,437   2,438   2,437   2,438   2,437  
Net income available to common stockholders $ 68,999   $ 69,507   $ 42,305   $ 56,246   $ 48,658  
           
Diluted EPS $ 1.38   $ 1.38   $ 0.84   $ 1.12   $ 0.97  
Diluted shares 50,096,015   50,353,497   50,311,962   50,250,866   50,229,670  
           
CONSOLIDATED BALANCE SHEET DATA          
Total assets $ 27,781,910   $ 24,449,147   $ 25,075,645   $ 24,400,998   $ 23,119,713  
LHI 16,536,721   15,741,772   15,366,252   14,828,406   14,280,353  
LHI, mortgage finance 5,923,058   4,689,938   5,308,160   5,642,285   5,183,600  
LHS 1,276,768   1,088,565   1,011,004   955,983   846,017  
Liquidity assets(1) 3,288,107   2,296,673   2,727,581   2,357,537   2,142,658  
Investment securities 24,408   24,929   23,511   24,224   119,043  
Demand deposits 7,648,125   7,413,340   7,812,660   8,263,202   8,174,830  
Total deposits 20,334,871   18,764,533   19,123,180   19,081,257   17,292,223  
Other borrowings 4,520,849   2,835,540   3,165,040   2,583,496   3,162,224  
Subordinated notes 281,586   281,496   281,406   281,315   281,225  
Long-term debt 113,406   113,406   113,406   113,406   113,406  
Stockholders’ equity 2,343,530   2,273,429   2,202,721   2,158,363   2,100,553  
           
End of period shares outstanding 50,151,064   49,669,774   49,643,344   49,621,825   49,595,252  
Book value $ 43.74   $ 42.75   $ 41.35   $ 40.47   $ 39.33  
Tangible book value(2) $ 43.36   $ 42.37   $ 40.97   $ 40.09   $ 38.94  
           
SELECTED FINANCIAL RATIOS          
Net interest margin 3.93%   3.71%   3.47%   3.59%   3.57%  
Return on average assets 1.16%   1.22%   0.71%   0.99%   0.96%  
Return on average common equity 12.72%   13.39%   8.18%   11.20%   10.08%  
Non-interest income to average earning assets 0.29%   0.35%   0.32%   0.33%   0.36%  
Efficiency ratio(3) 53.1%   55.1%   57.9%   51.4%   55.4%  
Efficiency ratio, excluding OREO write-down(3) 53.1%   54.3%   55.2%   51.4%   55.4%  
Non-interest expense to average earning assets 2.23%   2.23%   2.17%   2.00%   2.17%  
Tangible common equity to total tangible assets(4) 7.8%   8.6%   8.1%   8.2%   8.4%  
Common Equity Tier 1 8.3%   8.8%   8.5%   8.4%   8.6%  
Tier 1 capital 9.3%   9.9%   9.5%   9.4%   9.8%  
Total capital 11.1%   11.9%   11.5%   11.4%   11.8%  
Leverage 9.9%   9.9%   9.2%   9.6%   10.3%  


(1)       Liquidity assets include Federal funds sold and interest-bearing deposits in other banks.
(2)       Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(3)       Non-interest expense divided by the sum of net interest income and non-interest income.
(4)       Stockholders’ equity excluding preferred stock and accumulated other comprehensive income less goodwill and intangibles divided by total assets less accumulated other comprehensive income and goodwill and intangibles.


TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
  June 30, 2018 June 30, 2017 %
Change
Assets      
Cash and due from banks $ 174,687   $ 126,977   38%  
Interest-bearing deposits in other banks 3,249,107   2,117,658   53%  
Federal funds sold and securities purchased under resale agreements 39,000   25,000   56%  
Investment securities 24,408   119,043   (79)%  
LHS ($1,275.5 million and $843.2 million at June 30, 2018 and June 30, 2017, respectively, at fair value) 1,276,768   846,017   51%  
LHI, mortgage finance 5,923,058   5,183,600   14%  
LHI (net of unearned income) 16,536,721   14,280,353   16%  
Less:  Allowance for loan losses 179,096   174,225   3%  
LHI, net 22,280,683   19,289,728   16%  
Mortgage servicing rights, net 82,776   63,023   31%  
Premises and equipment, net 26,175   20,750   26%  
Accrued interest receivable and other assets 609,501   492,240   24%  
Goodwill and intangibles, net 18,805   19,277   (2)%  
Total assets $ 27,781,910   $ 23,119,713   20%  
       
Liabilities and Stockholders’ Equity      
Liabilities:      
Deposits:      
Non-interest bearing $ 7,648,125   $ 8,174,830   (6)%  
Interest bearing 12,686,746   9,117,393   39%  
Total deposits 20,334,871   17,292,223   18%  
       
Accrued interest payable 11,268   6,246   80%  
Other liabilities 176,400   163,836   8%  
Federal funds purchased and repurchase agreements 520,849   462,224   13%  
Other borrowings 4,000,000   2,700,000   48%  
Subordinated notes, net 281,586   281,225    
Trust preferred subordinated debentures 113,406   113,406    
Total liabilities 25,438,380   21,019,160   21%  
       
Stockholders’ equity:      
Preferred stock, $.01 par value, $1,000 liquidation value:      
Authorized shares - 10,000,000      
Issued shares - 6,000,000 shares issued at June 30, 2018 and 2017 150,000   150,000  
Common stock, $.01 par value:      
Authorized shares - 100,000,000      
Issued shares - 50,151,481 and 49,595,669 at June 30, 2018 and 2017, respectively 502   496   1%  
Additional paid-in capital 963,732   957,721   1%  
Retained earnings 1,228,924   991,949   24%  
Treasury stock (shares at cost: 417 at June 30, 2018 and 2017) (8)   (8)    
Accumulated other comprehensive income, net of taxes 380   395   (4)%  
Total stockholders’ equity 2,343,530   2,100,553   12%  
Total liabilities and stockholders’ equity $ 27,781,910   $ 23,119,713   20%  


TEXAS CAPITAL BANCSHARES, INC.        
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)        
(Dollars in thousands except per share data)        
  Three Months Ended
June 30
Six Months Ended
June 30
  2018 2017 2018 2017
Interest income        
Interest and fees on loans $ 279,447   $ 201,646   $ 523,311   $ 378,270  
Investment securities 193   287   399   512  
Federal funds sold and securities purchased under resale agreements 745   434   1,790   964  
Interest-bearing deposits in other banks 6,467   5,824   15,221   12,391  
Total interest income 286,852   208,191   540,721   392,137  
Interest expense        
Deposits 39,607   16,533   71,309   29,826  
Federal funds purchased 1,665   726   2,634   978  
Other borrowings 8,484   2,901   14,164   4,922  
Subordinated notes 4,191   4,191   8,382   8,382  
Trust preferred subordinated debentures 1,193   881   2,220   1,711  
Total interest expense 55,140   25,232   98,709   45,819  
Net interest income 231,712   182,959   442,012   346,318  
Provision for credit losses 27,000   13,000   39,000   22,000  
Net interest income after provision for credit losses 204,712   169,959   403,012   324,318  
Non-interest income        
Service charges on deposit accounts 3,005   3,067   6,142   6,112  
Wealth management and trust fee income 2,007   1,402   3,931   2,759  
Bank owned life insurance (BOLI) income 657   481   1,316   947  
Brokered loan fees 5,815   5,809   10,983   11,487  
Servicing income 4,967   3,700   10,459   5,901  
Swap fees 1,352   954   2,914   2,757  
Other (524)   3,356   1,481   5,916  
Total non-interest income 17,279   18,769   37,226   35,879  
Non-interest expense        
Salaries and employee benefits 72,404   63,154   144,941   126,157  
Net occupancy expense 7,356   6,515   14,590   12,626  
Marketing 10,236   6,157   18,913   11,107  
Legal and professional 11,654   7,127   19,184   14,580  
Communications and technology 7,143   11,906   13,776   18,412  
FDIC insurance assessment 6,257   4,603   12,360   10,597  
Servicing related expenses 4,367   2,682   8,172   4,432  
Allowance and other carrying costs for OREO 176   71   2,331   210  
Other 12,538   9,599   24,824   19,787  
Total non-interest expense 132,131   111,814   259,091   217,908  
Income before income taxes 89,860   76,914   181,147   142,289  
Income tax expense 18,424   25,819   37,766   48,652  
Net income 71,436   51,095   143,381   93,637  
Preferred stock dividends 2,437   2,437   4,875   4,875  
Net income available to common stockholders $ 68,999   $ 48,658   $ 138,506   $ 88,762  
         
Basic earnings per common share $ 1.39   $ 0.98   $ 2.79   $ 1.79  
Diluted earnings per common share $ 1.38   $ 0.97   $ 2.76   $ 1.77  


TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
  2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter
  2018 2018 2017 2017 2017
Allowance for loan losses:          
Beginning balance $ 190,898   $ 184,655   $ 182,929   $ 174,225   $ 172,013  
Loans charged-off:          
Commercial 38,305   5,667   1,999   10,603   12,310  
Real estate       250   40  
Construction       59    
Consumer         180  
Total charge-offs 38,305   5,667   1,999   10,912   12,530  
Recoveries:          
Commercial 320   360   1,019   132   61  
Real estate 8   24   1   21   3  
Construction       3    
Consumer 9   59   14   15   36  
Leases 1   19   1   1    
Total recoveries 338   462   1,035   172   100  
Net charge-offs 37,967   5,205   964   10,740   12,430  
Provision for loan losses 26,165   11,448   2,690   19,444   14,642  
Ending balance $ 179,096   $ 190,898   $ 184,655   $ 182,929   $ 174,225  
           
Allowance for off-balance sheet credit losses:          
Beginning balance $ 9,623   $ 9,071   $ 9,761   $ 9,205   $ 10,847  
Provision for off-balance sheet credit losses 835   552   (690)   556   (1,642)  
Ending balance $ 10,458   $ 9,623   $ 9,071   $ 9,761   $ 9,205  
           
Total allowance for credit losses $ 189,554   $ 200,521   $ 193,726   $ 192,690   $ 183,430  
           
Total provision for credit losses $ 27,000   $ 12,000   $ 2,000   $ 20,000   $ 13,000  
           
Allowance for loan losses to LHI 0.80%   0.93%   0.89%   0.89%   0.90%  
Allowance for loan losses to LHI excluding mortgage finance loans(2) 1.08%   1.21%   1.20%   1.23%   1.22%  
Allowance for loan losses to average LHI 0.86%   0.98%   0.92%   0.95%   0.99%  
Allowance for loan losses to average LHI excluding mortgage finance loans(2) 1.13%   1.24%   1.23%   1.27%   1.27%  
Net charge-offs to average LHI(1) 0.73%   0.11%   0.02%   0.22%   0.28%  
Net charge-offs to average LHI excluding mortgage finance loans(1)(2) 0.96%   0.14%   0.03%   0.30%   0.36%  
Net charge-offs to average LHI for last twelve months(1) 0.28%   0.15%   0.16%   0.29%   0.27%  
Net charge-offs to average LHI excluding mortgage finance loans for last twelve months(1)(2) 0.36%   0.20%   0.21%   0.37%   0.36%  
Total provision for credit losses to average LHI(1) 0.52%   0.25%   0.04%   0.41%   0.30%  
Total provision for credit losses to average LHI excluding mortgage finance loans(1)(2) 0.68%   0.32%   0.05%   0.55%   0.38%  
Total allowance for credit losses to LHI 0.84%   0.98%   0.94%   0.94%   0.94%  
Total allowance for credit losses to LHI excluding mortgage finance loans(1)(2) 1.15%   1.27%   1.26%   1.30%   1.28%  


(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.


TEXAS CAPITAL BANCSHARES, INC.          
SUMMARY OF LOAN LOSS EXPERIENCE          
(Dollars in thousands)          
  2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter
  2018 2018 2017 2017 2017
           
Non-accrual loans $ 83,295 $ 123,542 $ 101,444 $ 118,205 $ 123,730
Other real estate owned (OREO)(2) 9,526 9,558 11,742 18,131 18,689
Total LHI NPAs $ 92,821 $ 133,100 $ 113,186 $ 136,336 $ 142,419
           
Non-accrual loans to LHI 0.37% 0.60% 0.49% 0.58% 0.64%
Non-accrual loans to LHI excluding mortgage finance loans(1) 0.50% 0.78% 0.66% 0.80% 0.87%
Total NPAs to LHI plus OREO 0.41% 0.65% 0.55% 0.67% 0.73%
Total NPAs to LHI excluding mortgage finance loans plus OREO(1) 0.56% 0.85% 0.74% 0.92% 1.00%
Total NPAs to earning assets 0.35% 0.56% 0.47% 0.58% 0.64%
Allowance for loan losses to non-accrual loans 2.2x 1.5x 1.8x 1.5x 1.4x
           
Loans past due 90 days and still accruing(3) $ 7,357 $ 13,563 $ 8,429 $ 8,892 $ 11,077
           
Loans past due 90 days to LHI 0.03% 0.07% 0.14% 0.04% 0.06%
Loans past due 90 days to LHI excluding mortgage finance loans(1) 0.04% 0.09% 0.18% 0.06% 0.08%
           
LHS past due 90 days and still accruing(4) $ 27,858 $ 35,226 $ 19,737 $ $


(1)       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.
(2)       At June 30, 2018, there was a $2.0 million valuation allowance recorded against the OREO balance.
(3)       At June 30, 2018, loans past due 90 days and still accruing includes premium finance loans of $6.0 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.
(4)       Includes loans guaranteed by U.S. government agencies that were repurchased out of Ginnie Mae securities. Loans are recorded as LHS and carried at fair value on the balance sheet. Interest on these past due loans accrues at the debenture rate guaranteed by the U.S. government. Also includes loans that, pursuant to Ginnie Mae servicing guidelines, we have the unilateral right, but not obligation, to repurchase and thus must record as LHS on the balance sheet regardless of whether the repurchase option has been exercised.


TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands)
  2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter
  2018 2018 2017 2017 2017
Interest income          
Interest and fees on loans $ 279,447   $ 243,864   $ 238,906   $ 229,116   $ 201,646  
Investment securities 193   206   213   341   287  
Federal funds sold and securities purchased under resale agreements 745   1,045   936   642   434  
Interest-bearing deposits in other banks 6,467   8,754   9,464   7,544   5,824  
Total interest income 286,852   253,869   249,519   237,643   208,191  
Interest expense          
Deposits 39,607   31,702   27,625   22,435   16,533  
Federal funds purchased 1,665   969   723   891   726  
Other borrowings 8,484   5,680   5,380   4,835   2,901  
Subordinated notes 4,191   4,191   4,191   4,191   4,191  
Trust preferred subordinated debentures 1,193   1,027   951   930   881  
Total interest expense 55,140   43,569   38,870   33,282   25,232  
Net interest income 231,712   210,300   210,649   204,361   182,959  
Provision for credit losses 27,000   12,000   2,000   20,000   13,000  
Net interest income after provision for credit losses 204,712   198,300   208,649   184,361   169,959  
Non-interest income          
Service charges on deposit accounts 3,005   3,137   3,109   3,211   3,067  
Wealth management and trust fee income 2,007   1,924   1,767   1,627   1,402  
Bank owned life insurance (BOLI) income 657   659   698   615   481  
Brokered loan fees 5,815   5,168   5,692   6,152   5,809  
Servicing income 4,967   5,492   5,270   4,486   3,700  
Swap fees 1,352   1,562   586   647   954  
Other (524 ) 2,005   2,252   2,265   3,356  
Total non-interest income 17,279   19,947   19,374   19,003   18,769  
Non-interest expense          
Salaries and employee benefits 72,404   72,537   70,192   67,882   63,154  
Net occupancy expense 7,356   7,234   6,749   6,436   6,515  
Marketing 10,236   8,677   8,438   7,242   6,157  
Legal and professional 11,654   7,530   8,756   6,395   7,127  
Communications and technology 7,143   6,633   6,590   6,002   11,906  
FDIC insurance assessment 6,257   6,103   6,710   6,203   4,603  
Servicing related expenses 4,367   3,805   7,177   3,897   2,682  
Allowance and other carrying costs for OREO 176   2,155   6,122   105   71  
Other 12,538   12,286   12,404   10,668   9,599  
Total non-interest expense 132,131   126,960   133,138   114,830   111,814  
Income before income taxes 89,860   91,287   94,885   88,534   76,914  
Income tax expense 18,424   19,342   50,143   29,850   25,819  
Net income 71,436   71,945   44,742   58,684   51,095  
Preferred stock dividends 2,437   2,438   2,437   2,438   2,437  
Net income available to common shareholders $ 68,999   $ 69,507   $ 42,305   $ 56,246   $ 48,658  


TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
(Dollars in thousands)
  2nd Quarter 2018   1st Quarter 2018   4th Quarter 2017   3rd Quarter 2017   2nd Quarter 2017
  Average
Balance
Revenue/
Expense
Yield/
Rate
  Average
Balance
Revenue/
Expense
Yield/
Rate
  Average
Balance
Revenue/
Expense
Yield/
Rate
  Average
Balance
Revenue/
Expense
Yield/
Rate
  Average
Balance
Revenue/
Expense
Yield/
Rate
Assets                                      
Investment securities - Taxable $ 24,514   $ 193   3.15%   $ 23,854   $ 206   3.50%   $ 23,678   $ 213   3.57%   $ 86,087   $ 340   1.57%   $ 65,049   $ 287   1.77%  
Investment securities - Non-taxable(2)     —%       —%       —%       —%       —%  
Federal funds sold and securities purchased under resale agreements 166,613   745   1.79%   261,641   1,045   1.62%   292,544   936   1.27%   205,938   642   1.24%   174,264   434   1.00%  
Interest-bearing deposits in other banks 1,498,474   6,467   1.73%   2,302,938   8,754   1.54%   2,924,942   9,464   1.28%   2,383,060   7,544   1.26%   2,250,330   5,824   1.04%  
LHS, at fair value 1,516,047   17,026   4.50%   1,187,594   12,535   4.28%   1,144,124   11,507   3.99%   1,009,703   9,882   3.88%   845,623   8,235   3.91%  
LHI, mortgage finance loans 4,898,411   47,056   3.85%   4,097,995   37,362   3.70%   5,102,107   44,477   3.46%   4,847,530   42,294   3.46%   3,805,831   33,399   3.52%  
LHI(1)(2) 15,883,317   216,755   5.47%   15,425,323   195,333   5.14%   15,010,041   185,039   4.89%   14,427,980   178,839   4.92%   13,718,739   161,369   4.72%  
Less allowance for loan
  losses
189,238       184,238       183,233       172,774       170,957      
LHI, net of allowance 20,592,490   263,811   5.14%   19,339,080   232,695   4.88%   19,928,915   229,516   4.57%   19,102,736   221,133   4.59%   17,353,613   194,768   4.50%  
Total earning assets 23,798,138   288,242   4.86%   23,115,107   255,235   4.48%   24,314,203   251,636   4.11%   22,787,524   239,541   4.17%   20,688,879   209,548   4.06%  
Cash and other assets 808,099         797,506         766,622         713,778         632,097      
Total assets $ 24,606,237         $ 23,912,613         $ 25,080,825         $ 23,501,302         $ 21,320,976      
Liabilities and Stockholders’ Equity                                      
Transaction deposits $ 2,889,834   $ 10,295   1.43%   $ 2,792,954   $ 8,651   1.26%   $ 2,469,984   $ 5,845   0.94%   $ 2,145,324   $ 4,359   0.81%   $ 2,008,872   $ 2,893   0.58%  
Savings deposits 7,784,937   25,454   1.31%   7,982,256   21,958   1.12%   8,403,473   20,655   0.98%   7,618,843   17,152   0.89%   6,952,317   12,940   0.75%  
Time deposits 979,735   3,858   1.58%   506,375   1,093   0.88%   533,312   1,125   0.84%   496,076   924   0.74%   455,542   700   0.62%  
Total interest bearing deposits 11,654,506   39,607   1.36%   11,281,585   31,702   1.14%   11,406,769   27,625   0.96%   10,260,243   22,435   0.87%   9,416,731   16,533   0.70%  
Other borrowings 2,113,391   10,149   1.93%   1,721,914   6,649   1.57%   1,852,750   6,103   1.31%   1,821,837   5,726   1.25%   1,456,737   3,627   1.00%  
Subordinated notes 281,527   4,191   5.97%   281,437   4,191   6.04%   281,348   4,191   5.91%   281,256   4,191   5.91%   281,167   4,191   5.98%  
Trust preferred subordinated debentures 113,406   1,193   4.22%   113,406   1,027   3.67%   113,406   951   3.33%   113,406   930   3.25%   113,406   881   3.12%  
Total interest bearing liabilities 14,162,830   55,140   1.56%   13,398,342   43,569   1.32%   13,654,273   38,870   1.13%   12,476,742   33,282   1.06%   11,268,041   25,232   0.90%  
Demand deposits 8,017,578         8,147,721         9,085,819         8,764,263         7,863,402      
Other liabilities 100,074         110,698         138,050         116,998         102,653      
Stockholders’ equity 2,325,755         2,255,852         2,202,683         2,143,299         2,086,880      
Total liabilities and stockholders’ equity $ 24,606,237         $ 23,912,613         $ 25,080,825         $ 23,501,302         $ 21,320,976      
Net interest income(2)   $ 233,102         $ 211,666         $ 212,766         $ 206,259         $ 184,316    
Net interest margin     3.93%       3.71%       3.47%       3.59%       3.57%  


(1)       The loan averages include non-accrual loans and are stated net of unearned income.
(2)       Taxable equivalent rates used where applicable.
         

INVESTOR CONTACT
Heather Worley, 214.932.6646
heather.worley@texascapitalbank.com

Primary Logo