Texas Capital Bancshares, Inc. Announces Operating Results for Q2 2021


DALLAS, July 21, 2021 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the second quarter of 2021.

“I continue to be pleased with the progress we're making in these first six months of 2021,” said Rob C. Holmes, President and CEO. “Building on an incredibly productive first quarter, second quarter successes included executing our largest capital markets transaction to-date with a $375.0 million subordinated note issuance, making the strategic decision to sell our portfolio of mortgage servicing rights to better align resources for the future and continuing to add new talent in key strategic areas at a record-setting pace. All of these actions, combined with the necessary and much appreciated hard work being done by our team internally every day, are laying a lasting foundation to support our long-term strategy, which we are looking forward to sharing with you during the third quarter.”

  • Net income of $73.5 million ($1.31 per diluted share) reported for the second quarter of 2021, an increase of $1.5 million on a linked quarter basis and an increase of $107.8 million from the second quarter of 2020.
  • Loans held for investment (“LHI”), excluding mortgage finance loans, decreased 1% on a linked quarter basis and decreased 8% from the second quarter of 2020. PPP loans continue to pay off, as expected, and contributed $363.7 million to the linked quarter decrease in LHI, excluding mortgage finance loans.
  • Total mortgage finance loans, including mortgage correspondent aggregation (“MCA”) loans held for sale (“LHS”), decreased 4% on a linked quarter basis and decreased 6% from the second quarter of 2020. The decrease in MCA LHS is consistent with the previously announced transition of the MCA program.
  • Demand deposits decreased 6% and total deposits decreased 14% on a linked quarter basis, and increased 31% and decreased 4%, respectively, from the second quarter of 2020. The linked-quarter declines were the result of targeted actions to reduce high-cost indexed deposits.
  • Issuance of $375.0 million in 4.00% fixed rate subordinated notes, completed in the second quarter of 2021, providing additional capital to be used for general corporate purposes. A portion of the proceeds were used for the redemption of our existing 6.50% fixed rate subordinated notes.

FINANCIAL SUMMARY

(dollars and shares in thousands)Q2 2021 Q2 2020 % Change
QUARTERLY OPERATING RESULTS     
Net income$73,481   $(34,316)  314  %
Net income available to common stockholders$67,164   $(36,753)  283  %
Diluted earnings per common share$1.31   $(0.73)  279  %
Diluted common shares51,094   50,416     %
Return on average assets0.76 % (0.36)%  
Return on average common equity9.74 % (5.48)%  
BALANCE SHEET     
LHS$63,747   $454,581    (86)%
LHI, mortgage finance8,772,799   8,972,626    (2)%
LHI15,168,565   16,552,203    (8)%
Total LHI23,941,364   25,524,829    (6)%
Total assets35,228,542   36,613,127    (4)%
Demand deposits14,228,038   10,835,911    31  %
Total deposits28,839,563   30,187,695    (4)%
Stockholders’ equity3,114,957   2,734,755    14  %


 

DETAILED FINANCIALS

For the second quarter of 2021, net income was $73.5 million, compared to net income of $71.9 million for the first quarter of 2021, and net loss of $34.3 million for the second quarter of 2020. On a fully diluted basis, earnings per common share were $1.31 for the quarter ended June 30, 2021, compared to earnings per common share of $1.33 for the quarter ended March 31, 2021 and loss per common share of $0.73 for the quarter ended June 30, 2020.

We recorded a $19.0 million negative provision for credit losses for the second quarter of 2021, compared to a $6.0 million negative provision for credit losses for the first quarter of 2021 and a $100.0 million provision for credit losses for the second quarter of 2020. The linked quarter decrease in provision for credit losses resulted primarily from decreases in charge-offs and criticized loans, as well as an improvement in the economic outlook as the economy continues to recover from the impacts of the COVID-19 pandemic. We recorded $2.4 million in net charge-offs during the second quarter of 2021, compared to $6.4 million during the first quarter of 2021 and $74.1 million during the second quarter of 2020. Criticized loans totaled $891.6 million at June 30, 2021, compared to $945.1 million at March 31, 2021 and $1.0 billion at June 30, 2020.

Non-performing assets (“NPAs”) totaled $86.6 million at June 30, 2021, a decrease of $11.1 million compared to the first quarter of 2021 and a decrease of $87.4 million compared to the second quarter of 2020. The ratio of total LHI NPAs to total LHI plus other real estate owned for the second quarter of 2021 was 0.36%, compared to 0.40% for the first quarter of 2021 and 0.68% for the second quarter of 2020.

Net interest income was $197.0 million for the second quarter of 2021, compared to $200.1 million for the first quarter of 2021 and $209.9 million for the second quarter of 2020. The linked-quarter and year-over-year decreases in net interest income were primarily driven by a decrease in total average loans, partially offset by increases in loan fees. Net interest margin for the second quarter of 2021 was 2.10%, an increase of 1 basis point from the first quarter of 2021 and a decrease of 20 basis points from the second quarter of 2020. LHI yields, excluding mortgage finance loans, increased 10 basis points from the first quarter of 2021, and decreased 3 basis points compared to the second quarter of 2020. LHI, mortgage finance yields for the second quarter of 2021 decreased 13 basis points compared to the first quarter of 2021, and decreased 36 basis points compared to the second quarter of 2020. Additionally, total cost of deposits for the second quarter of 2021 decreased 4 basis points to 0.20% compared to 0.24% for the first quarter of 2021, and decreased 22 basis points from 0.42% for the second quarter of 2020.

Non-interest income for the second quarter of 2021 decreased $9.0 million, or 23%, compared to the first quarter of 2021, and decreased $40.4 million, or 57%, compared to the second quarter of 2020. The linked quarter decrease was primarily related to decreases in brokered loans fees, servicing income and net gain/(loss) on sale of LHS, partially offset by an increase in other non-interest income. The year-over-year decrease was primarily related to decreases in net gain/(loss) on sale of LHS and brokered loan fees, offset by increases in service charges on deposit accounts and other non-interest income. The linked quarter and year-over-year decreases in brokered loan fees and net gain/(loss) on sale of LHS, as well as the linked quarter decline in servicing income, were primarily due to the second quarter 2021 sale of our portfolio of MSRs and transition of the MCA program to a third-party.

Non-interest expense for the second quarter of 2021 decreased $1.3 million, or 1 percent, compared to the first quarter of 2021, and decreased $73.3 million, or 33%, compared to the second quarter of 2020. The year-over-year decrease was primarily due to decreases in marketing expense, communications and technology expense, servicing-related expenses and merger-related expenses.

All regulatory ratios continue to be in excess of “well-capitalized” requirements as of June 30, 2021. Our CET 1, tier 1 capital, total capital and leverage ratios were 10.5%, 12.1%, 14.8% and 8.4%, respectively, at June 30, 2021, compared to 10.2%, 12.2%, 14.0% and 8.3%, respectively, at March 31, 2021. At June 30, 2021, our ratio of tangible common equity to total tangible assets was 7.9% compared to 6.7% at March 31, 2021.

About Texas Capital Bancshares, Inc.

Texas Capital Bancshares, Inc. (NASDAQ: TCBI), a member of the Russell 2000 Index and the S&P MidCap 400, is the parent company of Texas Capital Bank (the “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.

Forward Looking Statements

This communication contains “forward-looking statements” within the meaning of and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, our financial condition, results of operations, business plans and future performance. These statements are not historical in nature and may often be identified by the use of words such as “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,” “could,” “should,” “projects,” “targeted,” “continue,” “intend” and similar expressions.

Because forward-looking statements relate to future results and occurrences, they are subject to inherent and various uncertainties, risks, and changes in circumstances that are difficult to predict, may change over time, are based on management’s expectations and assumptions at the time the statements are made and are not guarantees of future results. 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 factors include, but are not limited to, (1) the credit quality of our loan portfolio, (2) general economic conditions and related material risks and uncertainties in the United States, globally and in our markets and the impact they may have on us and our customers, including the continued impact on our customers from volatility in oil and gas prices as well as the continued impact of the COVID-19 pandemic (and any other pandemic, epidemic or health-related crisis), (3) technological changes, including the increased focus on information technology and cybersecurity and our ability to manage such information systems and the effects of cyber-incidents (including failures, disruptions or security breaches) or those of third-party providers, (4) changes in interest rates and changes in the value of commercial and residential real estate securing our loans, (5) adverse economic or market conditions that could affect the credit quality of our loan portfolio or our operating performance, (6) expectations regarding rates of default and credit losses and the appropriateness of our allowance for credit losses and provision for credit losses, (7) unexpected market conditions, regulatory changes or changes in our credit ratings that could, among other things, cause access to capital market transactions and other sources of funding to become more difficult, (8) the inadequacy of our available funds to meet our obligations, (9) the failure to effectively balance our funding sources with cash demands by depositors and borrowers, (10) material failures of our accounting estimates and risk management processes based on management judgment, (11) failure of our risk management strategies and procedures, including failure or circumvention of our controls, (12) the failure to effectively manage risk, (13) uncertainty regarding the London Interbank Offered Rate and our ability to successfully implement any new interest rate benchmarks, (14) the impact of changing regulatory requirements and legislative changes on our business, (15) the failure to successfully execute our business strategy, including completing planned merger, acquisition or sale transactions, (16) the failure to identify, attract and retain key personnel or the loss of such personnel, (17) increased or more effective competition from banks or other financial service providers in our markets, (18) structural changes in the markets for origination, sale and servicing of residential mortgages, (19) certainty in the pricing of mortgage loans that we purchase, and later sell or securitize, (20) volatility in the market price of our common stock, (21) credit risk resulting from our exposure to counterparties, (22) an increase in the incidence or severity of fraud, illegal payments, security breaches and other illegal acts impacting us, (23) the failure to maintain adequate regulatory capital to support our business, (24) environmental liability or other environmental, social or governance factors that may materially negatively impact the company, (25) severe weather, natural disasters, acts of war or terrorism and other external events and (26) our success at managing the risk and uncertainties involved in the foregoing factors.

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, our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. The information contained in this communication speaks only as of its date. Except to the extent required by applicable law or regulation, we disclaim any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments.

TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(dollars in thousands except per share data)
 2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
 20212021202020202020
CONSOLIDATED STATEMENTS OF INCOME     
Interest income$224,490   $228,412   $255,163  $243,731  $252,010   
Interest expense27,496   28,339   32,153  36,162  42,082   
Net interest income196,994   200,073   223,010  207,569  209,928   
Provision for credit losses(19,000) (6,000) 32,000  30,000  100,000   
Net interest income after provision for credit losses215,994   206,073   191,010  177,569  109,928   
Non-interest income30,102   39,092   42,863  60,348  70,485   
Non-interest expense149,060   150,316   150,863  165,741  222,335   
Income/(loss) before income taxes97,036   94,849   83,010  72,176  (41,922) 
Income tax expense/(benefit)23,555   22,911   22,834  15,060  (7,606) 
Net income/(loss)73,481   71,938   60,176  57,116  (34,316) 
Preferred stock dividends6,317   3,779   2,437  2,438  2,437   
Net income/(loss) available to common stockholders$67,164   $68,159   $57,739  $54,678  $(36,753) 
Diluted earnings/(loss) per common share$1.31   $1.33   $1.14  $1.08  $(0.73) 
Diluted common shares51,093,660   51,069,511   50,794,421  50,573,073  50,416,331   
CONSOLIDATED BALANCE SHEET DATA     
Total assets$35,228,542   $40,054,433   $37,726,096  $38,432,872  $36,613,127   
LHI15,168,565   15,399,174   15,351,451  15,789,958  16,552,203   
LHI, mortgage finance8,772,799   9,009,081   9,079,409  9,378,104  8,972,626   
LHS63,747   176,286   283,165  648,009  454,581   
Liquidity assets(1)6,768,650   11,212,276   9,032,807  10,461,544  9,540,044   
Investment securities3,798,275   3,443,058   3,196,970  1,367,313  234,969   
Demand deposits14,228,038   15,174,642   12,740,947  12,339,212  10,835,911   
Total deposits28,839,563   33,391,970   30,996,589  31,959,487  30,187,695   
Other borrowings2,014,481   2,515,587   3,111,751  2,908,183  2,895,790   
Long-term debt927,386   664,968   395,896  395,806  395,715   
Stockholders’ equity3,114,957   3,159,482   2,871,224  2,800,404  2,734,755   
      
End of period shares outstanding50,592,201   50,557,767   50,470,450  50,455,552  50,435,672   
Book value$55.64   $53.59   $53.92  $52.53  $51.25   
Tangible book value(2)$55.29   $53.24   $53.57  $52.18  $50.89   
SELECTED FINANCIAL RATIOS     
Net interest margin2.10  %2.09  %2.32 %2.22 %2.30  %
Return on average assets0.76  %0.73  %0.61 %0.59 %(0.36)%
Return on average common equity9.74  %10.08  %8.50 %8.24 %(5.48)%
Non-interest income to average earning assets0.32  %0.41  %0.44 %0.64 %0.77  %
Efficiency ratio(3)65.6  %62.9  %56.7 %61.9 %79.3  %
Non-interest expense to average earning assets1.59  %1.57  %1.56 %1.76 %2.43  %
Tangible common equity to total tangible assets(4)7.9  %6.7  %7.2 %6.9 %7.0  %
Common Equity Tier 110.5  %10.2  %9.4 %9.1 %8.8  %
Tier 1 capital12.1  %12.2  %10.3 %9.9 %9.7  %
Total capital14.8  %14.0  %12.1 %11.8 %11.6  %
Leverage8.4  %8.3  %7.5 %7.6 %7.5  %

(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, less goodwill and intangibles, divided by total assets, less goodwill and intangibles.


TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
 June 30, 2021June 30, 2020%
Change
Assets   
Cash and due from banks$202,549   $176,540   15  %
Interest-bearing deposits6,768,650   9,490,044   (29)%
Federal funds sold and securities purchased under resale agreements—   50,000   (100)%
Securities, available-for-sale3,798,275   234,969   N/M  
LHS, at fair value63,747   454,581   (86)%
LHI, mortgage finance8,772,799   8,972,626   (2)%
LHI (net of unearned income)15,168,565   16,552,203   (8)%
Less: Allowance for credit losses on loans221,511   264,722   (16)%
LHI, net23,719,853   25,260,107   (6)%
Mortgage servicing rights, net1,316   75,451   (98)%
Premises and equipment, net21,969   28,603   (23)%
Accrued interest receivable and other assets634,719   824,963   (23)%
Goodwill and intangibles, net17,464   17,869   (2)%
Total assets$35,228,542   $36,613,127   (4)%
    
Liabilities and Stockholders’ Equity   
Liabilities:   
Deposits:   
Non-interest bearing$14,228,038   $10,835,911   31  %
Interest bearing14,611,525   19,351,784   (24)%
Total deposits28,839,563   30,187,695   (4)%
    
Accrued interest payable8,116   20,314   (60)%
Other liabilities324,039   378,858   (14)%
Federal funds purchased and repurchase agreements14,481   195,790   (93)%
Other borrowings2,000,000   2,700,000   (26)%
Long-term debt927,386   395,715   134  %
Total liabilities32,113,585   33,878,372   (5)%
    
Stockholders’ equity:   
Preferred stock, $.01 par value, $1,000 liquidation value:   
Authorized shares - 10,000,000   
Issued shares - 300,000 and 6,000,000 shares issued at June 30, 2021 and 2020, respectively300,000   150,000   100  %
Common stock, $.01 par value:   
Authorized shares - 100,000,000   
Issued shares - 50,592,618 and 50,436,089 at June 30, 2021 and 2020, respectively506   504   —  %
Additional paid-in capital992,469   983,144    %
Retained earnings1,848,379   1,600,639   15  %
Treasury stock (shares at cost: 417 at June 30, 2021 and 2020)(8) (8) —  %
Accumulated other comprehensive income/(loss), net of taxes(26,389) 476   N/M  
Total stockholders’ equity3,114,957   2,734,755   14  %
Total liabilities and stockholders’ equity$35,228,542   $36,613,127   (4)%


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,
 2021202020212020
Interest income    
Interest and fees on loans$210,611   $247,595   $426,203   $531,220   
Investment securities10,918   2,024   20,805   4,207   
Federal funds sold and securities purchased under resale agreements—   77     691   
Interest-bearing deposits in other banks2,961   2,314   5,893   21,900   
Total interest income224,490   252,010   452,902   558,018   
Interest expense    
Deposits16,271   32,294   36,275   94,468   
Federal funds purchased51   176   126   845   
Other borrowings451   4,569   2,968   14,151   
Long-term debt10,723   5,043   16,466   10,307   
Total interest expense27,496   42,082   55,835   119,771   
Net interest income196,994   209,928   397,067   438,247   
Provision for credit losses(19,000) 100,000   (25,000) 196,000   
Net interest income after provision for credit losses215,994   109,928   422,067   242,247   
Non-interest income    
Service charges on deposit accounts4,634   2,459   9,350   5,752   
Wealth management and trust fee income3,143   2,348   5,998   4,815   
Brokered loan fees6,933   10,764   16,244   18,779   
Servicing income5,935   6,120   14,944   10,866   
Swap fees534   1,468   1,060   4,225   
Net gain/(loss) on sale of LHS(3,070) 39,023   2,502   26,023   
Other11,993   8,303   19,096   11,805   
Total non-interest income30,102   70,485   69,194   82,265   
Non-interest expense    
Salaries and employee benefits86,830   100,791   174,352   177,984   
Net occupancy expense7,865   9,134   16,139   17,846   
Marketing1,900   7,988   3,597   16,510   
Legal and professional9,147   11,330   17,424   28,796   
Communications and technology14,352   42,760   30,321   56,551   
FDIC insurance assessment5,226   7,140   11,839   12,989   
Servicing-related expenses12,355   20,100   25,344   36,454   
Merger-related expenses—   10,486   —   17,756   
Other11,385   12,606   20,360   22,866   
Total non-interest expense149,060   222,335   299,376   387,752   
Income/(loss) before income taxes97,036   (41,922) 191,885   (63,240) 
Income tax expense/(benefit)23,555   (7,606) 46,466   (12,237) 
Net income/(loss)73,481   (34,316) 145,419   (51,003) 
Preferred stock dividends6,317   2,437   10,096   4,875   
Net income/(loss) available to common stockholders$67,164   $(36,753) $135,323   $(55,878) 
     
Basic earnings/(loss) per common share$1.33   $(0.73) $2.68   $(1.11) 
Diluted earnings/(loss) per common share$1.31   $(0.73) $2.65   $(1.11) 


TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
 2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
 20212021202020202020
Allowance for credit losses on loans:     
Beginning balance$242,484   $254,615   $290,165  $264,722  $240,958  
Loans charged-off:     
Commercial1,412   2,451   37,984  2,436  12,287  
Energy686   5,732   33,283  141  62,368  
Real estate1,192   —   180  —  —  
Total charge-offs3,290   8,183   71,447  2,577  74,655  
Recoveries:     
Commercial308   1,050   394  113  513  
Energy609   715   5,696  880  —  
Total recoveries917   1,765   6,090  993  513  
Net charge-offs2,373   6,418   65,357  1,584  74,142  
Provision for credit losses on loans(18,600) (5,713) 29,807  27,027  97,906  
Ending balance$221,511   $242,484   $254,615  $290,165  $264,722  
      
Allowance for off-balance sheet credit losses:     
Beginning balance$17,147   $17,434   $15,241  $12,268  $10,174  
Provision for off-balance sheet credit losses(400) (287) 2,193  2,973  2,094  
Ending balance$16,747   $17,147   $17,434  $15,241  $12,268  
      
Total allowance for credit losses$238,258   $259,631   $272,049  $305,406  $276,990  
      
Total provision for credit losses$(19,000) $(6,000) $32,000  $30,000  $100,000  
      
Allowance for credit losses on loans to LHI0.93  %0.99  %1.04 %1.15 %1.04 %
Allowance for credit losses on loans to average LHI0.98  %1.03  %1.01 %1.14 %1.03 %
Net charge-offs to average LHI(1)0.04  %0.11  %1.03 %0.02 %1.16 %
Net charge-offs to average LHI for last twelve months(1)0.31  %0.59  %0.80 %0.59 %0.73 %
Total provision for credit losses to average LHI(1)(0.34)%(0.10)%0.51 %0.47 %1.57 %
Total allowance for credit losses to LHI1.00  %1.06  %1.11 %1.21 %1.09 %

(1) Interim period ratios are annualized.


TEXAS CAPITAL BANCSHARES, INC.     
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS   
(dollars in thousands)     
 2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
 20212021202020202020
      
Non-performing assets (NPAs):     
Non-accrual loans$86,636  $97,730  $121,989  $161,946  $174,031  
Other real estate owned (OREO)—  —  —  —  —  
Total LHI NPAs$86,636  $97,730  $121,989  $161,946  $174,031  
      
Non-accrual loans to LHI0.36 %0.40 %0.50 %0.64 %0.68 %
Total LHI NPAs to LHI plus OREO0.36 %0.40 %0.50 %0.64 %0.68 %
Total LHI NPAs to earning assets0.25 %0.25 %0.33 %0.43 %0.49 %
Allowance for credit losses on loans to non-accrual loans 2.6x   2.5x   2.1x   1.8x   1.5x  
      
LHI past due 90 days and still accruing(1)$7,671  $6,187  $12,541  $15,896  $21,079  
LHI past due 90 days to LHI0.03 %0.03 %0.05 %0.06 %0.08 %
LHS non-accrual(2)$—  $—  $6,966  $—  $—  
LHS past due 90 days and still accruing(3)$2,695  $16,359  $16,667  $15,631  $10,152  

(1) At June 30, 2021, loans past due 90 days and still accruing includes premium finance loans of $3.0 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on canceled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.
(2) Includes one non-accrual loan previously reported in loans HFI that was transferred to loans HFS as of December 31, 2020 and subsequently sold at carrying value.
(3) 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 our balance sheet regardless of whether the repurchase option has been exercised.


TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)
      
 2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
 20212021202020202020
Interest income     
Interest and fees on loans$210,611   $215,592   $242,776  $237,179  $247,595   
Investment securities10,918   9,887   9,594  3,674  2,024   
Federal funds sold and securities purchased under resale agreements—       77   
Interest-bearing deposits in other banks2,961   2,932   2,792  2,877  2,314   
Total interest income224,490   228,412   255,163  243,731  252,010   
Interest expense     
Deposits16,271   20,004   23,819  27,830  32,294   
Federal funds purchased51   75   110  128  176   
Other borrowings451   2,517   3,407  3,365  4,569   
Long-term debt10,723   5,743   4,817  4,839  5,043   
Total interest expense27,496   28,339   32,153  36,162  42,082   
Net interest income196,994   200,073   223,010  207,569  209,928   
Provision for credit losses(19,000) (6,000) 32,000  30,000  100,000   
Net interest income after provision for credit losses215,994   206,073   191,010  177,569  109,928   
Non-interest income     
Service charges on deposit accounts4,634   4,716   3,004  2,864  2,459   
Wealth management and trust fee income3,143   2,855   2,681  2,502  2,348   
Brokered loan fees6,933   9,311   12,610  15,034  10,764   
Servicing income5,935   9,009   8,834  7,329  6,120   
Swap fees534   526   473  484  1,468   
Net gain/(loss) on sale of LHS(3,070) 5,572   6,761  25,242  39,023   
Other11,993   7,103   8,500  6,893  8,303   
Total non-interest income30,102   39,092   42,863  60,348  70,485   
Non-interest expense     
Salaries and employee benefits86,830   87,522   78,449  84,096  100,791   
Net occupancy expense7,865   8,274   8,373  8,736  9,134   
Marketing1,900   1,697   3,435  3,636  7,988   
Legal and professional9,147   8,277   12,129  11,207  11,330   
Communications and technology14,352   15,969   15,405  31,098  42,760   
FDIC insurance assessment5,226   6,613   6,592  6,374  7,140   
Servicing-related expenses12,355   12,989   15,844  12,287  20,100   
Merger-related expenses—   —   —  —  10,486   
Other11,385   8,975   10,636  8,307  12,606   
Total non-interest expense149,060   150,316   150,863  165,741  222,335   
Income/(loss) before income taxes97,036   94,849   83,010  72,176  (41,922) 
Income tax expense/(benefit)23,555   22,911   22,834  15,060  (7,606) 
Net income/(loss)73,481   71,938   60,176  57,116  (34,316) 
Preferred stock dividends6,317   3,779   2,437  2,438  2,437   
Net income/(loss) available to common shareholders$67,164   $68,159   $57,739  $54,678  $(36,753) 


TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
(dollars in thousands)
 2nd Quarter 2021 1st Quarter 2021 4th Quarter 2020 3rd Quarter 2020 2nd Quarter 2020
 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$3,361,696  $9,222  1.10 % $3,225,786  $8,112  1.02 % $2,137,481  $7,748  1.44 % $525,149  $1,905  1.44 % $38,829  $185  1.92 %
Investment securities - non-taxable(2)181,574  2,147  4.74 % 196,785  2,247  4.63 % 200,781  2,337  4.63 % 190,797  2,239  4.67 % 195,806  2,327  4.78 %
Federal funds sold and securities purchased under resale agreements713  —  0.18 % 4,605   0.07 % 1,709   0.13 % 12,051   0.04 % 245,434  77  0.13 %
Interest-bearing deposits in other banks11,583,046  2,961  0.10 % 11,840,942  2,932  0.10 % 10,808,548  2,792  0.10 % 11,028,962  2,877  0.10 % 10,521,240  2,314  0.09 %
LHS, at fair value93,164  781  3.36 % 243,326  1,595  2.66 % 410,637  2,475  2.40 % 543,606  3,867  2.83 % 380,624  2,547  2.69 %
LHI, mortgage finance loans7,462,223  57,401  3.09 % 8,177,759  64,942  3.22 % 9,550,119  78,906  3.29 % 9,061,984  76,464  3.36 % 8,676,521  74,518  3.45 %
LHI(1)(2)15,242,975  152,515  4.01 % 15,457,888  149,196  3.91 % 15,620,410  161,750  4.12 % 16,286,036  157,230  3.84 % 17,015,041  170,970  4.04 %
Less allowance for credit
losses on loans
241,676  —  —   254,697  —  —   290,189  —  —   264,769  —  —   236,823  —  —  
LHI, net of allowance22,463,522  209,916  3.75 % 23,380,950  214,138  3.71 % 24,880,340  240,656  3.85 % 25,083,251  233,694  3.71 % 25,454,739  245,488  3.88 %
Total earning assets37,683,715  225,027  2.40 % 38,892,394  229,025  2.39 % 38,439,496  256,009  2.65 % 37,383,816  244,583  2.60 % 36,836,672  252,938  2.76 %
Cash and other assets996,946     1,064,679     1,031,195     1,037,760     1,075,864    
Total assets$38,680,661     $39,957,073     $39,470,691     $38,421,576     $37,912,536    
Liabilities and Stockholders’ Equity                   
Transaction deposits$3,795,152  $5,395  0.57 % $3,991,966  $5,861  0.60 % $4,384,493  $6,604  0.60 % $4,275,574  $6,652  0.62 % $3,923,966  $5,998  0.61 %
Savings deposits11,296,382  8,990  0.32 % 12,889,974  10,788  0.34 % 12,982,189  12,671  0.39 % 12,786,719  12,808  0.40 % 12,537,467  13,510  0.43 %
Time deposits1,755,993  1,886  0.43 % 2,204,242  3,355  0.62 % 2,355,199  4,544  0.77 % 2,844,083  8,370  1.17 % 3,434,388  12,786  1.50 %
Total interest bearing deposits16,847,527  16,271  0.39 % 19,086,182  20,004  0.43 % 19,721,881  23,819  0.48 % 19,906,376  27,830  0.56 % 19,895,821  32,294  0.65 %
Other borrowings2,349,718  502  0.09 % 2,686,398  2,592  0.39 % 3,022,077  3,517  0.46 % 2,811,435  3,493  0.49 % 3,612,263  4,745  0.53 %
Long-term debt881,309  10,723  4.88 % 464,731  5,743  5.01 % 395,841  4,817  4.84 % 395,749  4,839  4.87 % 395,658  5,043  5.13 %
Total interest bearing liabilities20,078,554  27,496  0.55 % 22,237,311  28,339  0.52 % 23,139,799  32,153  0.55 % 23,113,560  36,162  0.62 % 23,903,742  42,082  0.71 %
Demand deposits15,139,546     14,421,505     13,174,114     12,202,065     10,865,896    
Other liabilities274,401     309,644     303,480     314,500     293,698    
Stockholders’ equity3,188,160     2,988,613     2,853,298     2,791,451     2,849,200    
Total liabilities and stockholders’ equity$38,680,661     $39,957,073     $39,470,691     $38,421,576     $37,912,536    
Net interest income(2) $197,531     $200,686     $223,856     $208,421     $210,856   
Net interest margin  2.10 %   2.09 %   2.32 %   2.22 %   2.30 %

(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.

 

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