DALLAS, Jan. 21, 2015 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (Nasdaq:TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the fourth quarter and full year of 2014.
"Our 2014 results are highlighted with outstanding loan and deposit growth and strong earnings amidst a challenging time for our industry," said Keith Cargill, CEO. "As we enter 2015, we will continue to execute our strategy of leveraging our talent to grow our business while maintaining focus on credit quality. Our fourth quarter capital raise and the buildup of liquidity have positioned us to take advantage of opportunities in 2015 and beyond. "
- Loans held for investment, excluding mortgage finance, increased 5% and total loans increased 6% on a linked quarter basis, growing 20% and 26%, respectively, from the fourth quarter of 2013.
- Mortgage finance loans increased 9% on a linked quarter basis and 47% from the fourth quarter of 2013.
- Demand deposits increased 6% and total deposits increased 8% on a linked quarter basis, growing 50% and 37%, respectively, from the fourth quarter of 2013.
- Net income increased 3% on a linked quarter basis and 25% from the fourth quarter of 2013.
- EPS remained at $.78, flat on a linked quarter basis, impacted by the increase in shares outstanding from the common stock offering completed in the fourth quarter of 2014, and increased 16% from the fourth quarter of 2013.
| FINANCIAL SUMMARY | |||
| (dollars and shares in thousands) | |||
| 2014 | 2013 | % Change | |
| ANNUAL OPERATING RESULTS | |||
| Net income | $ 136,352 | $ 121,051 | 13% |
| Net income available to common stockholders | $ 126,602 | $ 113,657 | 11% |
| Diluted EPS | $ 2.88 | $ 2.72 | 6% |
| ROA | 1.05% | 1.17% | |
| ROE | 11.31% | 12.82% | |
| Diluted shares | 44,003 | 41,780 | |
| QUARTERLY OPERATING RESULTS | |||
| Net income | $ 37,834 | $ 30,359 | 25% |
| Net income available to common stockholders | $ 35,397 | $ 27,921 | 27% |
| Diluted EPS | $ .78 | $ .67 | 16% |
| ROA | 1.03% | 1.10% | |
| ROE | 11.41% | 11.94% | |
| Diluted shares | 45,093 | 41,889 | |
| BALANCE SHEET | |||
| Total assets | $ 15,899,946 | $ 11,720,064 | 36% |
| Demand deposits | 5,011,619 | 3,347,567 | 50% |
| Total deposits | 12,673,300 | 9,257,379 | 37% |
| Loans held for investment | 10,154,887 | 8,486,603 | 20% |
| Loans held for investment, mortgage finance | 4,102,125 | 2,784,265 | 47% |
| Total loans | 14,257,012 | 11,270,868 | 26% |
| Stockholders' equity | 1,484,190 | 1,096,350 | 35% |
DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income of $136.4 million and net income available to common stockholders of $126.6 million for the year ended December 31, 2014 compared to net income of $121.0 million and net income available to common stockholders of $113.7 million for the year ended December 31, 2013. For the fourth quarter of 2014, net income was $37.8 million and net income available to common stockholders was $35.4 million, compared to $30.4 million and $27.9 million, respectively, for the same period in 2013. On a fully diluted basis, earnings per common share were $2.88 for the year ended December 31, 2014 compared to $2.72 for the same period in 2013. Diluted earnings per common share were $.78 for the three months ended December 31, 2014, compared to $.67 for the same period in 2013. Earnings per share results were impacted during 2014 compared to 2013 as a result of common stock offerings that added 4.4 million shares to the base of 41.0 million shares at December 31, 2013.
Return on average common equity ("ROE") was 11.31 percent and return on average assets ("ROA") was 1.05 percent for the year ended December 31, 2014, compared to 12.82 percent and 1.17 percent, respectively, for the year ended December 31, 2013. ROE was 11.41 percent and ROA was 1.03 percent for the fourth quarter of 2014, compared to 11.94 percent and 1.10 percent for the fourth quarter of 2013. During the first quarter of 2014, we completed an equity offering of 1.9 million common shares, which increased common equity by $106.5 million. We also completed a $175 million subordinated debt offering during the first quarter of 2014. During the fourth quarter of 2014, we completed an equity offering of 2.5 million common shares, which increased common equity by $149.6 million. These transactions had the effect of reducing ROE. The ROA decrease resulted from the debt offering and from a combination of reduced yields on loans and a $723.4 million increase in average liquidity assets, which include Federal funds sold and deposits in other banks, from the fourth quarter of 2013 to the fourth quarter of 2014.
Net interest income was $127.6 million for the fourth quarter of 2014, compared to $111.5 million in the fourth quarter of 2013 and $125.7 million for the third quarter of 2014. The net interest margin in the fourth quarter of 2014 was 3.56 percent, a 65 basis point decrease from the fourth quarter of 2013 and a 21 basis point decrease from the third quarter of 2014. The quarterly and year-over-year decreases in net interest margin are due to the growth in loans with lower yields, as well as a substantial increase in liquidity assets. The cost of total deposits and borrowed funds was 17 basis points for the fourth quarter of 2014, consistent with the fourth quarter of 2013.
Average loans, excluding mortgage finance loans, for the year ended December 31, 2014 were $9.3 billion, an increase of $1.8 billion, or 24 percent, from 2013. Average loans, excluding mortgage finance loans, for the fourth quarter of 2014 were $9.9 billion, an increase of $1.8 billion, or 22 percent, from the fourth quarter of 2013, and an increase of $498.1 million, or 5 percent, from the third quarter of 2014. Average mortgage finance loans for the year ended December 31, 2014 were $2.9 billion, an increase of $606.8 million, or 26 percent, from 2013. Average mortgage finance loans for the fourth quarter of 2014 were $3.5 billion, an increase of $1.2 billion, or 52%, from the fourth quarter of 2013 and increased $19.0 million from the third quarter of 2014.
Average total deposits for the year ended December 31, 2014 were $10.9 billion, an increase of $2.5 billion, or 30 percent, from 2013. Average total deposits for the fourth quarter of 2014 increased $3.3 billion from the fourth quarter of 2013 and increased $927.0 million from the third quarter of 2014. Average demand deposits for the year ended December 31, 2014 were $4.2 billion, an increase of $1.2 billion, or 41 percent, from 2013. Average demand deposits for the fourth quarter of 2014 increased $1.8 billion, or 53 percent, to $5.0 billion from $3.3 billion during the fourth quarter of 2013 and increased $378.1 million, or 8 percent, from the third quarter of 2014.
Credit costs, including the provision for credit losses, totaled $6.5 million in the fourth quarter of 2014 compared to $5.5 million for the fourth quarter of 2013 and $6.5 million for the third quarter of 2014. We recorded a $6.5 million provision for credit losses in the fourth quarter of 2014 compared to $5.0 million in the fourth quarter of 2013 and $6.5 million in the third quarter of 2014. The provision for the fourth quarter of 2014 was primarily related to the growth in loans, excluding mortgage finance loans, during the quarter. The combined reserve at December 31, 2014 decreased to 1.06 percent of loans excluding mortgage finance loans due to continuing loan growth, as compared to 1.09 percent at December 31, 2013 and 1.06 percent at September 30, 2014. 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 modest increase in non-performing asset totals in the fourth quarter of 2014, bringing the ratio of total non-performing assets to loans excluding mortgage finance loans plus other real estate owned ("OREO") to .43 percent compared to .44 percent in the fourth quarter of 2013 and .40 percent in the third quarter of 2014. Net charge-offs for the fourth quarter of 2014 were $1.1 million compared to net charge-offs of $1.3 million in the fourth quarter of 2013 and net charge-offs of $595,000 in the third quarter of 2014. For 2014, net charge-offs were .07 percent of total loans, consistent with .07 for 2013. At December 31, 2014, non-performing assets included OREO of $568,000 compared to $5.1 million as of December 31, 2013 and $617,000 as of September 30, 2014.
Non-interest income increased $42,000, or less than 1 percent, during the fourth quarter of 2014 compared to the same period of 2013. Service charges and brokered loan fees increased $302,000 and $599,000, respectively, during the fourth quarter of 2014 compared to the same period of 2013. Offsetting these increases was a $1.0 million decrease in swap fee income during the fourth quarter of 2014 compared to the same period of 2013. These fees fluctuate from quarter to quarter based on the number and volume of transactions closed during the quarter.
Non-interest expense for the fourth quarter of 2014 increased $3.8 million, or 5 percent, to $74.1 million from $70.3 million in the fourth quarter of 2013. The increase is primarily related to a $902,000 increase in salaries and employee benefits expense, a $1.3 million increase in net occupancy expense, a $1.9 million increase in communications and technology expense and a $1.0 million increase in other non-interest expense, all of which were due to general business growth. FDIC insurance assessment expense for the fourth quarter of 2014 increased $952,000 compared to the same quarter in 2013 as a result of the difference in rates applied to banks with over $10 billion in assets. Offsetting these increases was a $1.8 million decrease in legal and professional expense during the fourth quarter of 2014.
Stockholders' equity increased by 35 percent from $1.1 billion at December 31, 2013 to $1.5 billion at December 31, 2014, primarily due to the offering of 1.9 million common shares for net proceeds of $106.5 million in the first quarter of 2014, 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 December 31, 2014, our ratio of tangible common equity to total tangible assets was 8.3 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. 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. 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, 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 and in other filings we make with the Securities and Exchange Commission.
| TEXAS CAPITAL BANCSHARES, INC. | |||||
| SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||
| (Dollars in thousands except per share data) | |||||
| 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | |
| 2014 | 2014 | 2014 | 2014 | 2013 | |
| CONSOLIDATED STATEMENTS OF INCOME | |||||
| Interest income | $ 137,833 | $ 135,290 | $ 124,813 | $ 116,611 | $ 117,965 |
| Interest expense | 10,251 | 9,629 | 9,406 | 8,296 | 6,490 |
| Net interest income | 127,582 | 125,661 | 115,407 | 108,315 | 111,475 |
| Provision for credit losses | 6,500 | 6,500 | 4,000 | 5,000 | 5,000 |
| Net interest income after provision for credit losses | 121,082 | 119,161 | 111,407 | 103,315 | 106,475 |
| Non-interest income | 11,226 | 10,396 | 10,533 | 10,356 | 11,184 |
| Non-interest expense | 74,117 | 71,915 | 69,765 | 69,317 | 70,288 |
| Income before income taxes | 58,191 | 57,642 | 52,175 | 44,354 | 47,371 |
| Income tax expense | 20,357 | 20,810 | 18,754 | 16,089 | 17,012 |
| Net income | 37,834 | 36,832 | 33,421 | 28,265 | 30,359 |
| Preferred stock dividends | 2,437 | 2,438 | 2,437 | 2,438 | 2,438 |
| Net income available to common stockholders | $ 35,397 | $ 34,394 | $ 30,984 | $ 25,827 | $ 27,921 |
| Diluted EPS | $ .78 | $ .78 | $ .71 | $ .60 | $ .67 |
| Diluted shares | 45,092,511 | 43,849,838 | 43,845,015 | 43,219,961 | 41,888,768 |
| CONSOLIDATED BALANCE SHEET DATA | |||||
| Total assets | $15,899,946 | $14,266,503 | $13,532,826 | $12,143,588 | $11,720,064 |
| Loans held for investment | 10,154,887 | 9,686,422 | 9,153,005 | 8,928,325 | 8,486,603 |
| Loans held for investment, mortgage finance | 4,102,125 | 3,774,467 | 3,700,253 | 2,688,044 | 2,784,265 |
| Securities | 41,719 | 43,938 | 49,330 | 52,960 | 63,214 |
| Demand deposits | 5,011,619 | 4,722,479 | 4,181,774 | 3,451,294 | 3,347,567 |
| Total deposits | 12,673,300 | 11,715,808 | 10,757,316 | 9,729,128 | 9,257,379 |
| Other borrowings | 1,192,681 | 735,689 | 1,000,548 | 678,026 | 1,025,630 |
| Subordinated notes | 286,000 | 286,000 | 286,000 | 286,000 | 111,000 |
| Long-term debt | 113,406 | 113,406 | 113,406 | 113,406 | 113,406 |
| Stockholders' equity | 1,484,190 | 1,297,922 | 1,262,816 | 1,230,131 | 1,096,350 |
| End of period shares outstanding | 45,735,007 | 43,179,134 | 43,105,444 | 42,958,803 | 41,036,370 |
| Book value (excluding securities gains/losses) | $ 29.14 | $ 26.55 | $ 25.78 | $ 25.11 | $ 23.02 |
| Tangible book value (excluding securities gains/losses)(1) | $ 28.69 | $ 26.07 | $ 25.29 | $ 24.62 | $ 22.50 |
| SELECTED FINANCIAL RATIOS | |||||
| Net interest margin | 3.56% | 3.77% | 3.87% | 3.99% | 4.21% |
| Return on average assets | 1.03% | 1.07% | 1.08% | 1.01% | 1.10% |
| Return on average common equity | 11.41% | 12.11% | 11.38% | 10.20% | 11.94% |
| Non-interest income to earning assets | .31% | .31% | .35% | .38% | .42% |
| Efficiency ratio(2) | 53.4% | 52.9% | 55.4% | 58.4% | 57.3% |
| Efficiency ratio (excluding OREO valuation/write-down)(3) | 53.4% | 52.9% | 55.4% | 58.4% | 56.9% |
| Non-interest expense to earning assets | 2.07% | 2.16% | 2.34% | 2.55% | 2.65% |
| Non-interest expense to earning assets (excluding OREO valuation charge) | 2.07% | 2.16% | 2.34% | 2.55% | 2.63% |
| Tangible common equity to total tangible assets(4) | 8.3% | 7.9% | 8.1% | 8.7% | 7.9% |
| (1) Stockholders' equity excluding preferred stock and accumulated other comprehensive income, 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) Non-interest expense excluding OREO valuation/write-down expenses 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) | |||
|
December 31, 2014 |
December 31, 2013 |
% Change |
|
| Assets | |||
| Cash and due from banks | $ 96,524 | $ 92,484 | 4% |
| Interest-bearing deposits | 1,233,990 | 61,337 | 1,912% |
| Federal funds sold and securities purchased under resale agreements | − | 90 | (100)% |
| Securities, available-for-sale | 41,719 | 63,214 | (34)% |
| Loans held for investment, mortgage finance | 4,102,125 | 2,784,265 | 47% |
| Loans held for investment (net of unearned income) | 10,154,887 | 8,486,603 | 20% |
| Less: Allowance for loan losses | 100,954 | 87,604 | 15% |
| Loans held for investment, net | 14,156,058 | 11,183,264 | 27% |
| Premises and equipment, net | 17,368 | 11,482 | 51% |
| Accrued interest receivable and other assets | 333,699 | 286,907 | 16% |
| Goodwill and intangibles, net | 20,588 | 21,286 | (3)% |
| Total assets | $ 15,899,946 | $ 11,720,064 | 36% |
| Liabilities and Stockholders' Equity | |||
| Liabilities: | |||
| Deposits: | |||
| Non-interest bearing | $ 5,011,619 | $ 3,347,567 | 50% |
| Interest bearing | 7,348,972 | 5,579,505 | 32% |
| Interest bearing in foreign branches | 312,709 | 330,307 | (5)% |
| Total deposits | 12,673,300 | 9,257,379 | 37% |
| Accrued interest payable | 4,747 | 749 | 534% |
| Other liabilities | 145,622 | 115,550 | 26% |
| Federal funds purchased and repurchase agreements | 92,676 | 170,604 | (46)% |
| Other borrowings | 1,100,005 | 855,026 | 29% |
| Subordinated notes | 286,000 | 111,000 | 158% |
| Trust preferred subordinated debentures | 113,406 | 113,406 | -- |
| Total liabilities | 14,415,756 | 10,623,714 | 36% |
| Stockholders' equity: | |||
| Preferred stock, $.01 par value, $1,000 liquidation value: | |||
| Authorized shares – 10,000,000 | |||
| Issued shares – 6,000,000 shares issued at December 31, 2014 and 2013 | 150,000 | 150,000 | − |
| Common stock, $.01 par value: | |||
| Authorized shares – 100,000,000 | |||
| Issued shares – 45,735,424 and 41,036,787 at December 31, 2014 and 2013, respectively | 457 | 410 | 11% |
| Additional paid-in capital | 709,738 | 448,208 | 58% |
| Retained earnings | 622,714 | 496,112 | 26% |
| Treasury stock (shares at cost: 417 at December 31, 2014 and 2013) | (8) | (8) | -- |
| Accumulated other comprehensive income, net of taxes | 1,289 | 1,628 | (21)% |
| Total stockholders' equity | 1,484,190 | 1,096,350 | 35% |
| Total liabilities and stockholders' equity | $ 15,899,946 | $ 11,720,064 | 36% |
| TEXAS CAPITAL BANCSHARES, INC. | ||||
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||
| (Dollars in thousands except per share data) | ||||
|
Three Months Ended December 31 |
Year Ended December 31 |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Interest income | ||||
| Interest and fees on loans | $ 136,882 | $ 117,261 | $ 511,606 | $ 441,314 |
| Securities | 389 | 621 | 1,828 | 3,015 |
| Federal funds sold | 91 | 24 | 207 | 65 |
| Deposits in other banks | 471 | 59 | 906 | 231 |
| Total interest income | 137,833 | 117,965 | 514,547 | 444,625 |
| Interest expense | ||||
| Deposits | 5,263 | 3,858 | 18,145 | 14,030 |
| Federal funds purchased | 81 | 116 | 373 | 686 |
| Repurchase agreements | 4 | 5 | 17 | 18 |
| Other borrowings | 35 | 40 | 356 | 515 |
| Subordinated notes | 4,241 | 1,840 | 16,202 | 7,327 |
| Trust preferred subordinated debentures | 627 | 631 | 2,489 | 2,536 |
| Total interest expense | 10,251 | 6,490 | 37,582 | 25,112 |
| Net interest income | 127,582 | 111,475 | 476,965 | 419,513 |
| Provision for credit losses | 6,500 | 5,000 | 22,000 | 19,000 |
| Net interest income after provision for credit losses | 121,082 | 106,475 | 454,965 | 400,513 |
| Non-interest income | ||||
| Service charges on deposit accounts | 1,976 | 1,674 | 7,253 | 6,783 |
| Trust fee income | 1,223 | 1,250 | 4,937 | 5,023 |
| Bank owned life insurance (BOLI) income | 520 | 533 | 2,067 | 1,917 |
| Brokered loan fees | 3,979 | 3,380 | 13,981 | 16,980 |
| Swap fees | 894 | 1,904 | 2,992 | 5,520 |
| Other | 2,634 | 2,443 | 11,281 | 7,801 |
| Total non-interest income | 11,226 | 11,184 | 42,511 | 44,024 |
| Non-interest expense | ||||
| Salaries and employee benefits | 43,910 | 43,008 | 169,051 | 157,752 |
| Net occupancy expense | 5,746 | 4,487 | 20,866 | 16,821 |
| Marketing | 4,411 | 4,183 | 15,989 | 16,203 |
| Legal and professional | 3,725 | 5,520 | 21,182 | 18,104 |
| Communications and technology | 5,454 | 3,597 | 18,667 | 13,762 |
| FDIC insurance assessment | 2,875 | 1,923 | 10,919 | 8,057 |
| Allowance and other carrying costs for OREO | 24 | 609 | 85 | 1,788 |
| Other | 7,972 | 6,961 | 28,355 | 24,242 |
| Total non-interest expense | 74,117 | 70,288 | 285,114 | 256,729 |
| Income before income taxes | 58,191 | 47,371 | 212,362 | 187,808 |
| Income tax expense | 20,357 | 17,012 | 76,010 | 66,757 |
| Net income | 37,834 | 30,359 | 136,352 | 121,051 |
| Preferred stock dividends | 2,437 | 2,438 | 9,750 | 7,394 |
| Net income available to common stockholders | $ 35,397 | $ 27,921 | $ 126,602 | $ 113,657 |
| Basic earnings per common share | $ .80 | $ .68 | $ 2.93 | $ 2.78 |
| Diluted earnings per common share | $ .78 | $ .67 | $ 2.88 | $ 2.72 |
| TEXAS CAPITAL BANCSHARES, INC. | |||||
| SUMMARY OF LOAN LOSS EXPERIENCE | |||||
| (Dollars in thousands) | |||||
| 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | |
| 2014 | 2014 | 2014 | 2014 | 2013 | |
| Reserve for loan losses: | |||||
| Beginning balance | $ 96,322 | $ 91,114 | $ 90,234 | $ 87,604 | $ 84,006 |
| Loans charged-off: | |||||
| Commercial | 1,285 | 992 | 5,190 | 2,336 | 1,605 |
| Real estate | – | – | 246 | 50 | – |
| Consumer | 165 | – | 40 | 61 | – |
| Total loans charged-off | 1,450 | 992 | 5,476 | 2,447 | 1,605 |
| Recoveries: | |||||
| Commercial | 190 | 329 | 2,033 | 210 | 225 |
| Real estate | 34 | 2 | 35 | 8 | 60 |
| Consumer | 96 | 35 | 6 | 25 | 9 |
| Leases | 2 | 31 | 925 | 124 | 43 |
| Total recoveries | 322 | 397 | 2,999 | 367 | 337 |
| Net charge-offs | 1,128 | 595 | 2,477 | 2,080 | 1,268 |
| Provision for loan losses | 5,760 | 5,803 | 3,357 | 4,710 | 4,866 |
| Ending balance | $ 100,954 | $ 96,322 | $ 91,114 | $ 90,234 | $ 87,604 |
| Reserve for off-balance sheet credit losses: | |||||
| Beginning balance | $ 6,320 | $ 5,623 | $ 4,980 | $ 4,690 | $ 4,556 |
| Provision for off-balance sheet credit losses | 740 | 697 | 643 | 290 | 134 |
| Ending balance | $ 7,060 | $ 6,320 | $ 5,623 | $ 4,980 | $ 4,690 |
| Total reserves for credit losses | $ 108,014 | $ 102,642 | $ 96,737 | $ 95,214 | $ 92,294 |
| Total provision for credit losses | $ 6,500 | $ 6,500 | $ 4,000 | $ 5,000 | $ 5,000 |
| Reserve to loans | .71% | .72% | .71% | .78% | .78% |
| Reserve to loans excluding mortgage finance loans(2) | .99% | .99% | 1.00% | 1.01% | 1.03% |
| Reserve to average loans | .75% | .75% | .77% | .84% | .84% |
| Reserve to average loans excluding mortgage finance loans(2) | 1.02% | 1.02% | 1.01% | 1.04% | 1.08% |
| Net charge-offs to average loans(1) | .03% | .02% | .08% | .08% | .05% |
| Net charge-offs to average loans excluding mortgage finance loans(1)(2) | .05% | .03% | .11% | .10% | .06% |
| Net charge-offs to average loans for last twelve months(1) | .05% | .05% | .06% | .06% | .05% |
| Net charge-offs to average loans, excluding mortgage finance loans, for last twelve months(1)(2) | .07% | .07% | .07% | .07% | .07% |
| Total provision for credit losses to average loans(1) | .19% | .20% | .14% | .19% | .19% |
| Total provision for credit losses to average loans excluding mortgage finance loans(1)(2) | .26% | .27% | .18% | .23% | .24% |
| Combined reserves for credit losses to loans | .76% | .76% | .75% | .82% | .82% |
| Combined reserves for credit losses to loans, excluding mortgage finance loans(2) | 1.06% | 1.06% | 1.06% | 1.07% | 1.09% |
| Non-performing assets (NPAs): | |||||
| Non-accrual loans | $ 43,304 | $ 37,733 | $ 41,565 | $ 43,213 | $ 32,375 |
| Other real estate owned (OREO) | 568 | 617 | 685 | 2,420 | 5,110 |
| Total | $ 43,872 | $ 38,350 | $ 42,250 | $ 45,633 | $ 37,485 |
| Non-accrual loans to loans | .30% | .28% | .32% | .37% | .29% |
| Non-accrual loans to loans excluding mortgage finance loans(2) | .43% | .39% | .45% | .48% | .38% |
| Total NPAs to loans plus OREO | .31% | .28% | .33% | .39% | .33% |
| Total NPAs to loans excluding mortgage finance loans plus OREO(2) | .43% | .40% | .46% | .51% | .44% |
| Total NPAs to earning assets | .28% | .28% | .32% | .39% | .33% |
| Reserve for loan losses to non-accrual loans | 2.3x | 2.6x | 2.2x | 2.1x | 2.7x |
| Restructured loans | $ 1,806 | $ 1,853 | $ 249 | $ 2,825 | $ 1,935 |
| Loans past due 90 days and still accruing(3) | $ 5,274 | $ 6,102 | $ 4,793 | $ 7,869 | $ 9,325 |
| Loans past due 90 days to loans | .04% | .05% | .04% | .07% | .08% |
| Loans past due 90 days to loans excluding mortgage finance loans(2) | .05% | .06% | .05% | .09% | .11% |
| (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 December 31, 2014, loans past due 90 days and still accruing includes premium finance loans of $3.7 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date. | |||||
| TEXAS CAPITAL BANCSHARES, INC. | |||||
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||
| (Dollars in thousands) | |||||
| 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | |
| 2014 | 2014 | 2014 | 2014 | 2013 | |
| Interest income | |||||
| Interest and fees on loans | $ 136,882 | $ 134,618 | $ 124,234 | $ 115,872 | $ 117,261 |
| Securities | 389 | 428 | 471 | 540 | 621 |
| Federal funds sold | 91 | 68 | 8 | 40 | 24 |
| Deposits in other banks | 471 | 176 | 100 | 159 | 59 |
| Total interest income | 137,833 | 135,290 | 124,813 | 116,611 | 117,965 |
| Interest expense | |||||
| Deposits | 5,263 | 4,606 | 4,246 | 4,030 | 3,858 |
| Federal funds purchased | 81 | 82 | 115 | 95 | 116 |
| Repurchase agreements | 4 | 5 | 4 | 4 | 5 |
| Other borrowings | 35 | 68 | 181 | 72 | 40 |
| Subordinated notes | 4,241 | 4,241 | 4,241 | 3,479 | 1,840 |
| Trust preferred subordinated debentures | 627 | 627 | 619 | 616 | 631 |
| Total interest expense | 10,251 | 9,629 | 9,406 | 8,296 | 6,490 |
| Net interest income | 127,582 | 125,661 | 115,407 | 108,315 | 111,475 |
| Provision for credit losses | 6,500 | 6,500 | 4,000 | 5,000 | 5,000 |
| Net interest income after provision for credit losses | 121,082 | 119,161 | 111,407 | 103,315 | 106,475 |
| Non-interest income | |||||
| Service charges on deposit accounts | 1,976 | 1,817 | 1,764 | 1,696 | 1,674 |
| Trust fee income | 1,223 | 1,190 | 1,242 | 1,282 | 1,250 |
| Bank owned life insurance (BOLI) income | 520 | 517 | 521 | 509 | 533 |
| Brokered loan fees | 3,979 | 3,821 | 3,357 | 2,824 | 3,380 |
| Swap fees | 894 | 464 | 410 | 1,224 | 1,904 |
| Other | 2,634 | 2,587 | 3,239 | 2,821 | 2,443 |
| Total non-interest income | 11,226 | 10,396 | 10,533 | 10,356 | 11,184 |
| Non-interest expense | |||||
| Salaries and employee benefits | 43,910 | 43,189 | 39,896 | 42,056 | 43,008 |
| Net occupancy expense | 5,746 | 5,279 | 5,073 | 4,768 | 4,487 |
| Marketing | 4,411 | 4,024 | 3,795 | 3,759 | 4,183 |
| Legal and professional | 3,725 | 4,874 | 7,181 | 5,402 | 5,520 |
| Communications and technology | 5,454 | 4,928 | 4,361 | 3,924 | 3,597 |
| FDIC insurance assessment | 2,875 | 2,775 | 2,544 | 2,725 | 1,923 |
| Allowance and other carrying costs for OREO | 24 | 5 | 11 | 45 | 609 |
| Other | 7,972 | 6,841 | 6,904 | 6,638 | 6,961 |
| Total non-interest expense | 74,117 | 71,915 | 69,765 | 69,317 | 70,288 |
| Income before income taxes | 58,191 | 57,642 | 52,175 | 44,354 | 47,371 |
| Income tax expense | 20,357 | 20,810 | 18,754 | 16,089 | 17,012 |
| Net income | 37,834 | 36,832 | 33,421 | 28,265 | 30,359 |
| Preferred stock dividends | 2,437 | 2,438 | 2,437 | 2,438 | 2,438 |
| Net income available to common shareholders | $ 35,397 | $ 34,394 | $ 30,984 | $ 25,827 | $ 27,921 |
| TEXAS CAPITAL BANCSHARES, INC. | |||||||||||||||
| QUARTERLY FINANCIAL SUMMARY – UNAUDITED | |||||||||||||||
| Consolidated Daily Average Balances, Average Yields and Rates | |||||||||||||||
| Continuing Operations | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||
| 4th Quarter 2014 | 3rd Quarter 2014 | 2nd Quarter 2014 | 1st Quarter 2014 | 4th Quarter 2013 | |||||||||||
|
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 | $ 39,258 | $ 355 | 3.59% | $ 41,716 | $ 383 | 3.64% | $ 44,216 | $ 410 | 3.72% | $ 47,027 | $ 442 | 3.81% | $ 50,281 | $ 480 | 3.79% |
| Securities – Non-taxable(2) | 3,257 | 52 | 6.33% | 4,697 | 69 | 5.83% | 6,271 | 94 | 6.01% | 10,554 | 151 | 5.80% | 14,786 | 217 | 5.82% |
| Federal funds sold and securities purchased under resale agreements | 139,761 | 91 | 0.26% | 105,793 | 68 | 0.26% | 14,997 | 8 | 0.21% | 73,746 | 40 | 0.22% | 59,409 | 24 | 0.16% |
| Deposits in other banks | 742,240 | 471 | 0.25% | 283,062 | 176 | 0.25% | 183,061 | 100 | 0.22% | 230,296 | 159 | 0.28% | 99,185 | 59 | 0.24% |
| Loans held for investment, mortgage finance loans | 3,471,737 | 26,773 | 3.06% | 3,452,782 | 27,275 | 3.13% | 2,822,560 | 23,231 | 3.30% | 2,027,264 | 16,782 | 3.36% | 2,238,730 | 20,236 | 3.59% |
| Loans held for investment | 9,921,323 | 110,109 | 4.40% | 9,423,259 | 107,343 | 4.52% | 8,984,230 | 101,003 | 4.51% | 8,717,969 | 99,090 | 4.61% | 8,142,569 | 97,025 | 4.73% |
| Less reserve for loan losses | 96,139 | – | – | 91,427 | – | – | 90,105 | – | – | 87,686 | – | – | 84,009 | – | – |
| Loans, net of reserve | 13,296,921 | 136,882 | 4.08% | 12,784,614 | 134,618 | 4.18% | 11,716,685 | 124,234 | 4.25% | 10,657,547 | 115,872 | 4.41% | 10,297,290 | 117,261 | 4.52% |
| Total earning assets | 14,221,437 | 137,851 | 3.85% | 13,219,882 | 135,314 | 4.06% | 11,965,230 | 124,846 | 4.19% | 11,019,170 | 116,664 | 4.29% | 10,520,951 | 118,041 | 4.45% |
| Cash and other assets | 409,635 | 409,727 | 396,938 | 382,198 | 378,315 | ||||||||||
| Total assets | $14,631,072 | $13,629,609 | $12,362,168 | $11,401,368 | $10,899,266 | ||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||
| Transaction deposits | $ 1,150,530 | $ 401 | 0.14% | $ 1,010,003 | $ 287 | 0.11% | $ 895,827 | $ 170 | 0.08% | $ 782,301 | $ 80 | 0.04% | $ 787,720 | $ 76 | 0.04% |
| Savings deposits | 5,479,395 | 4,121 | 0.30% | 4,991,779 | 3,519 | 0.28% | 4,679,140 | 3,395 | 0.29% | 4,591,493 | 3,304 | 0.29% | 4,365,746 | 3,079 | 0.28% |
| Time deposits | 406,040 | 413 | 0.40% | 485,558 | 475 | 0.39% | 401,024 | 390 | 0.39% | 375,563 | 351 | 0.38% | 385,546 | 394 | 0.41% |
| Deposits in foreign branches | 369,471 | 328 | 0.35% | 369,202 | 325 | 0.35% | 350,043 | 291 | 0.33% | 355,857 | 295 | 0.34% | 348,240 | 309 | 0.35% |
| Total interest bearing deposits | 7,405,436 | 5,263 | 0.28% | 6,856,542 | 4,606 | 0.27% | 6,326,034 | 4,246 | 0.27% | 6,105,214 | 4,030 | 0.27% | 5,887,252 | 3,858 | 0.26% |
| Other borrowings | 251,449 | 120 | 0.19% | 309,868 | 155 | 0.20% | 666,405 | 300 | 0.18% | 293,012 | 171 | 0.24% | 314,018 | 161 | 0.20% |
| Subordinated notes | 286,000 | 4,241 | 5.88% | 286,000 | 4,241 | 5.88% | 286,000 | 4,241 | 5.95% | 227,667 | 3,479 | 6.20% | 111,000 | 1,840 | 6.58% |
| Trust preferred subordinated debentures | 113,406 | 627 | 2.19% | 113,406 | 627 | 2.19% | 113,406 | 619 | 2.19% | 113,406 | 616 | 2.20% | 113,406 | 631 | 2.21% |
| Total interest bearing liabilities | 8,056,291 | 10,251 | 0.50% | 7,565,816 | 9,629 | 0.50% | 7,391,845 | 9,406 | 0.51% | 6,739,299 | 8,296 | 0.50% | 6,425,676 | 6,490 | 0.40% |
| Demand deposits | 5,047,876 | 4,669,772 | 3,629,941 | 3,381,501 | 3,289,307 | ||||||||||
| Other liabilities | 146,259 | 117,418 | 98,595 | 103,514 | 106,461 | ||||||||||
| Stockholders' equity | 1,380,646 | 1,276,603 | 1,241,787 | 1,177,054 | 1,077,822 | ||||||||||
| Total liabilities and stockholders' equity | $14,631,072 | $13,629,609 | $12,362,168 | $11,401,368 | $10,899,266 | ||||||||||
| Net interest income(2) | $ 127,600 | $ 125,685 | $ 115,440 | $ 108,368 | $ 111,551 | ||||||||||
| Net interest margin | 3.56% | 3.77% | 3.87% | 3.99% | 4.21% | ||||||||||
| (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. | |||||||||||||||