Texas Capital Bancshares, Inc. Announces Third Quarter 2022 Results

Dallas, Texas, UNITED STATES


Third quarter 2022 net income of $41.4 million and net income available to common stockholders of $37.1 million, or $0.74 per diluted share

Achieved year-over-year operating leverage ahead of guidance

DALLAS, Oct. 19, 2022 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the third quarter of 2022.

Net income available to common stockholders was $37.1 million, or $0.74 per diluted share, for the third quarter of 2022, compared to $29.8 million, or $0.59 per diluted share, for the second quarter of 2022 and $39.1 million, or $0.76 per diluted share, for the third quarter of 2021.

“The quarterly financial results demonstrate dedication towards our stated goals as we achieved year-over-year quarterly operating leverage,” said Rob C. Holmes, President and CEO. “Additionally, we calibrated our capital and expenses and built a financially resilient balance sheet with strong reserves and capital geared towards supporting our clients through market and rate driven cycles.”

FINANCIAL RESULTS     
(dollars and shares in thousands)     
 3rd Quarter 2nd Quarter 3rd Quarter
  2022   2022   2021 
OPERATING RESULTS     
Net income$41,418  $34,159  $43,390 
Net income available to common stockholders$37,105  $29,847  $39,078 
Diluted earnings per common share$0.74  $0.59  $0.76 
Diluted common shares 50,418   50,802   51,140 
Return on average assets 0.52%  0.44%  0.47%
Return on average common equity 5.36%  4.35%  5.41%
      
BALANCE SHEET     
Loans held for investment$14,878,959  $17,517,866  $15,221,404 
Loans held for investment, mortgage finance 4,908,822   6,549,507   8,528,313 
Total loans held for investment 19,787,781   24,067,373   23,749,717 
Loans held for sale 3,142,178   4,266   9,660 
Total assets 30,408,513   32,338,963   36,404,320 
Non-interest bearing deposits 11,494,685   12,555,367   14,970,462 
Total deposits 24,498,563   25,440,021   29,813,668 
Stockholders’ equity 2,885,775   3,006,832   3,147,752 


 

THIRD QUARTER 2022 COMPARED TO SECOND QUARTER 2022

For the third quarter of 2022, net income available to common stockholders was $37.1 million, or $0.74 per diluted share, compared to $29.8 million, or $0.59 per diluted share, for the second quarter of 2022.

We recorded a $12.0 million provision for credit losses for the third quarter of 2022, compared to a $22.0 million provision for credit losses for the second quarter of 2022. The $12.0 million provision for credit losses recorded in the third quarter of 2022 resulted primarily from updated views on the downside risks to the economic forecast, partially offset by a decline in criticized loans.

Net interest income was $239.1 million for the third quarter of 2022, compared to $205.5 million for the second quarter of 2022. The increase in net interest income was primarily due to an increase in yields on earning assets, partially offset by an increase in funding costs. Net interest margin for the third quarter of 2022 was 3.05%, an increase of 37 basis points from the second quarter of 2022. Loans held for investment (“LHI”), excluding mortgage finance, yields increased 108 basis points from the second quarter of 2022 and LHI, mortgage finance yields increased 54 basis points from the second quarter of 2022. Total cost of deposits was 0.93% for the third quarter of 2022, a 60 basis point increase from the second quarter of 2022.

Non-interest income for the third quarter of 2022 decreased $909,000, or 3%, compared to the second quarter of 2022, primarily due to decreases in brokered loan fees and investment banking and trading income, partially offset by an increase in other non-interest income.

Non-interest expense for the third quarter of 2022 increased $32.7 million, or 20%, compared to the second quarter of 2022. The third quarter of 2022 included $13.7 million in salaries and benefits expense and $3.0 million in legal and professional expense related to the sale of our insurance premium finance subsidiary. The remaining increase in non-interest expense for the third quarter of 2022 was primarily due to an increase in salaries and benefits expense resulting from an increase in headcount.

THIRD QUARTER 2022 COMPARED TO THIRD QUARTER 2021

Net income available to common stockholders was $37.1 million, or $0.74 per diluted share, for the third quarter of 2022, compared to $39.1 million, or $0.76 per diluted share, for the third quarter of 2021.

The third quarter of 2022 included a $12.0 million provision for credit losses, resulting primarily from updated views on the downside risks to the economic forecast, partially offset by a decline in criticized loans, compared to a $5.0 million provision for credit losses for the third quarter of 2021.

Net interest income increased to $239.1 million for the third quarter of 2022, compared to $190.5 million for the third quarter of 2021, primarily due to an increase in yields on average earning assets, partially offset by an increase in funding costs. Net interest margin increased 94 basis points to 3.05% for the third quarter of 2022, as compared to the third quarter of 2021. LHI, excluding mortgage finance, yields increased 141 basis points compared to the third quarter of 2021 and LHI, mortgage finance yields increased 103 basis points from the third quarter of 2021. Total cost of deposits increased 74 basis points compared to the third quarter of 2021.

Non-interest income for the third quarter of 2022 increased $554,000, or 2%, compared to the third quarter of 2021. The increase was primarily due to increases in service charges on deposit accounts and investment banking and trading income, as well as the elimination of net losses recorded in the prior year on the sale of loans held for sale, partially offset by decreases in brokered loan fees and other non-interest income.

Non-interest expense for the third quarter of 2022 increased $44.1 million, or 29%, compared to the third quarter of 2021. The third quarter of 2022 included $13.7 million in salaries and benefits expense and $3.0 million in legal and professional expense related to the sale of our insurance premium finance subsidiary. Also contributing to the increase in non-interest expense were increases in salaries and benefits expense, resulting from an increase in headcount, and marketing expense, partially offset by a decrease in communications and technology expense related to the elimination of write-offs of certain software assets recorded in the prior year.

CREDIT QUALITY

We recorded $2.7 million in net charge-offs during the third quarter of 2022, compared to net charge-offs of $2.6 million and of $3.1 million during the second quarter of 2022 and the third quarter of 2021, respectively. Criticized loans totaled $484.0 million at September 30, 2022, compared to $603.5 million at June 30, 2022 and $728.9 million at September 30, 2021. Non-accrual LHI totaled $35.9 million at September 30, 2022, compared to $50.5 million at June 30, 2022 and $87.5 million at September 30, 2021. The ratio of non-accrual LHI to total LHI for the third quarter of 2022 was 0.18%, compared to 0.21% for the second quarter of 2022 and 0.37% for the third quarter of 2021.

REGULATORY RATIOS AND CAPITAL

All regulatory ratios continue to be in excess of “well capitalized” requirements as of September 30, 2022. Our CET 1, tier 1 capital, total capital and leverage ratios were 11.1%, 12.6%, 15.2% and 10.7%, respectively, at September 30, 2022, compared to 10.5%, 11.9%, 14.4% and 10.7%, respectively, at June 30, 2022 and 10.7%, 12.2%, 14.9% and 9.0% at September 30, 2021. At September 30, 2022, our ratio of tangible common equity to total tangible assets was 8.5%, compared to 8.3% at June 30, 2022 and 7.8% at September 30, 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, a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs, and individual customers. Founded in 1998, the institution is headquartered in Dallas with offices in Austin, Houston, San Antonio, and Fort Worth, and has built a network of clients across the country. With the ability to service clients through their entire lifecycles, Texas Capital Bank has established commercial banking, consumer banking, investment banking and wealth management capabilities.

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, TCBI’s 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,” “become,” “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. Several factors, many of which are beyond management’s 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, credit quality and risk, the COVID-19 pandemic, industry and technological changes, uncertainties related to our sale of BankDirect Capital Finance, LLC, cyber incidents or other failures, disruptions or security breaches, interest rates, commercial and residential real estate values, economic conditions, including inflation, recession, the threat of recession, and market conditions in Texas, the United States or globally, including governmental and consumer responses to those economic and market conditions, fund availability, accounting estimates and risk management processes, the transition away from the London Interbank Offered Rate (LIBOR), legislative and regulatory changes, ratings or interpretations, business strategy execution, key personnel, competition, mortgage markets, fraud, environmental liability and severe weather, natural disasters, acts of war, terrorism, global conflict or other external events.

These and other factors that could cause actual results for TCBI on a consolidated basis to differ materially from those described in the forward-looking statements, including a discussion of the risks and uncertainties that may affect TCBI’s business, can be found in TCBI’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in other documents and filings with the SEC. 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)
 3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
  2022  2022  2022  2021  2021 
CONSOLIDATED STATEMENTS OF INCOME     
Interest income$322,071 $242,349 $208,530 $219,892 $216,589 
Interest expense 82,991  36,818  24,983  25,860  26,053 
Net interest income 239,080  205,531  183,547  194,032  190,536 
Provision for credit losses 12,000  22,000  (2,000) (10,000) 5,000 
Net interest income after provision for credit losses 227,080  183,531  185,547  204,032  185,536 
Non-interest income 25,333  26,242  20,282  31,459  24,779 
Non-interest expense 197,047  164,303  153,092  146,649  152,987 
Income before income taxes 55,366  45,470  52,737  88,842  57,328 
Income tax expense 13,948  11,311  13,087  23,712  13,938 
Net income 41,418  34,159  39,650  65,130  43,390 
Preferred stock dividends 4,313  4,312  4,313  4,313  4,312 
Net income available to common stockholders$37,105 $29,847 $35,337 $60,817 $39,078 
Diluted earnings per common share$0.74 $0.59 $0.69 $1.19 $0.76 
Diluted common shares 50,417,884  50,801,628  51,324,027  51,208,161  51,139,555 
      
CONSOLIDATED BALANCE SHEET DATA     
Total assets$30,408,513 $32,338,963 $31,085,377 $34,731,738 $36,404,320 
Loans held for investment 14,878,959  17,517,866  15,849,434  15,331,457  15,221,404 
Loans held for investment, mortgage finance 4,908,822  6,549,507  5,827,965  7,475,497  8,528,313 
Loans held for sale 3,142,178  4,266  8,085  8,123  9,660 
Interest bearing cash and cash equivalents 3,399,638  4,032,931  5,136,680  7,765,996  8,317,926 
Investment securities 3,369,622  3,552.699  3,642,015  3,583,808  3,663,874 
Non-interest bearing deposits 11,494,685  12,555,367  13,434,723  13,390,370  14,970,462 
Total deposits 24,498,563  25,440,021  25,377,938  28,109,365  29,813,668 
Short-term borrowings 1,701,480  2,651,536  1,427,033  2,202,832  2,203,470 
Long-term debt 930,766  917,098  929,414  928,738  928,062 
Stockholders’ equity 2,885,775  3,006,832  3,090,038  3,209,616  3,147,752 
      
End of period shares outstanding 49,897,726  49,878,041  50,710,441  50,618,494  50,605,626 
Book value$51.82 $54.27 $55.02 $57.48 $56.27 
Tangible book value(1)$51.48 $53.93 $54.68 $57.14 $55.93 
      
SELECTED FINANCIAL RATIOS     
Net interest margin 3.05% 2.68% 2.23% 2.12% 2.11%
Return on average assets 0.52% 0.44% 0.47% 0.69% 0.47%
Return on average common equity 5.36% 4.35% 4.97% 8.36% 5.41%
Non-interest income to average earning assets 0.33% 0.34% 0.25% 0.34% 0.27%
Efficiency ratio(2) 74.5% 70.9% 75.1% 65.0% 71.1%
Non-interest expense to average earning assets 2.53% 2.16% 1.86% 1.60% 1.69%
Tangible common equity to total tangible assets(3) 8.5% 8.3% 8.9% 8.3% 7.8%
Common Equity Tier 1 11.1% 10.5% 11.5% 11.1% 10.7%
Tier 1 capital 12.6% 11.9% 13.0% 12.6% 12.2%
Total capital 15.2% 14.4% 15.7% 15.3% 14.9%
Leverage 10.7% 10.7% 9.9% 9.0% 9.0%

(1) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(2) Non-interest expense divided by the sum of net interest income and non-interest income.
(3) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by total assets, less goodwill and intangibles.
        

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
 September 30, 2022September 30, 2021% Change
Assets   
Cash and due from banks$240,609 $217,125 11%
Interest bearing cash and cash equivalents 3,399,638  8,317,926 (59)%
Available-for-sale debt securities 2,380,774  3,623,266 (34)%
Held-to-maturity debt securities 955,875   100%
Equity securities 32,973  40,608 (19)%
Investment securities 3,369,622  3,663,874 (8)%
Loans held for sale 3,142,178  9,660 N/M 
Loans held for investment, mortgage finance 4,908,822  8,528,313 (42)%
Loans held for investment 14,878,959  15,221,404 (2)%
Less: Allowance for credit losses on loans 234,613  221,957 6%
Loans held for investment, net 19,553,168  23,527,760 (17)%
Mortgage servicing rights, net   1,158 (100)%
Premises and equipment, net 27,180  21,119 29%
Accrued interest receivable and other assets 648,172  628,335 3%
Other assets held for sale 26,450   100%
Goodwill and intangibles, net 1,496  17,363 (91)%
Total assets$30,408,513 $36,404,320 (16)%
    
Liabilities and Stockholders’ Equity   
Liabilities:   
Non-interest bearing deposits$11,494,685 $14,970,462 (23)%
Interest bearing deposits 13,003,878  14,843,206 (12)%
Total deposits 24,498,563  29,813,668 (18)%
Accrued interest payable 18,465  8,920 107%
Other liabilities 297,900  302,448 (2)%
Other liabilities held for sale 75,564   100%
Short-term borrowings 1,701,480  2,203,470 (23)%
Long-term debt 930,766  928,062 %
Total liabilities 27,522,738  33,256,568 (17)%
    
Stockholders’ equity:   
Preferred stock, $.01 par value, $1,000 liquidation value:   
Authorized shares - 10,000,000   
Issued shares - 300,000 shares issued at September 30, 2022 and 2021 300,000  300,000 %
Common stock, $.01 par value:   
Authorized shares - 100,000,000   
Issued shares - 50,840,022 and 50,606,043 at September 30, 2022 and 2021, respectively 509  506 1%
Additional paid-in capital 1,020,153  1,000,509 2%
Retained earnings 2,050,563  1,887,457 9%
Treasury stock - 942,296 and 417 shares at cost at September 30, 2022 and 2021, respectively (50,031) (8)N/M 
Accumulated other comprehensive loss, net of taxes (435,419) (40,712)N/M 
Total stockholders’ equity 2,885,775  3,147,752 (8)%
Total liabilities and stockholders’ equity$30,408,513 $36,404,320 (16)%


TEXAS CAPITAL BANCSHARES, INC.    
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)    
(dollars in thousands except per share data)    
 Three Months Ended September 30,Nine Months Ended September 30,
  2022 2021  2022 2021 
Interest income    
Interest and fees on loans$282,473$202,748 $688,420$616,153 
Investment securities 15,002 10,235  46,969 31,040 
Interest bearing cash and cash equivalents 24,596 3,606  37,561 9,500 
Total interest income 322,071 216,589  772,950 656,693 
Interest expense    
Deposits 60,317 14,719  94,513 50,994 
Short-term borrowings 10,011 748  15,628 3,842 
Long-term debt 12,663 10,586  34,651 27,052 
Total interest expense 82,991 26,053  144,792 81,888 
Net interest income 239,080 190,536  628,158 574,805 
Provision for credit losses 12,000 5,000  32,000 (20,000)
Net interest income after provision for credit losses 227,080 185,536  596,158 594,805 
Non-interest income    
Service charges on deposit accounts 5,701 4,622  17,726 13,972 
Wealth management and trust fee income 3,631 3,382  11,594 9,380 
Brokered loan fees 3,401 6,032  11,504 22,276 
Servicing income 212 292  677 15,236 
Investment banking and trading income 7,812 4,127  23,117 17,985 
Net gain/(loss) on sale of loans held for sale  (1,185)  1,317 
Other 4,576 7,509  7,239 26,605 
Total non-interest income 25,333 24,779  71,857 106,771 
Non-interest expense    
Salaries and benefits 129,336 87,503  333,319 261,855 
Occupancy expense 9,433 8,324  27,192 24,463 
Marketing 8,282 2,123  21,765 5,720 
Legal and professional 16,775 11,055  38,365 28,479 
Communications and technology 18,470 28,374  48,819 58,695 
Federal Deposit Insurance Corporation insurance assessment 3,953 4,500  11,252 16,339 
Servicing-related expenses  2,396   27,740 
Other 10,798 8,712  33,730 29,072 
Total non-interest expense 197,047 152,987  514,442 452,363 
Income before income taxes 55,366 57,328  153,573 249,213 
Income tax expense 13,948 13,938  38,346 60,404 
Net income 41,418 43,390  115,227 188,809 
Preferred stock dividends 4,313 4,312  12,938 14,408 
Net income available to common stockholders$37,105$39,078 $102,289$174,401 
     
Basic earnings per common share$0.74$0.77 $2.03$3.45 
Diluted earnings per common share$0.74$0.76 $2.00$3.41 


TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
 3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
  2022  2022  2022  2021  2021 
Allowance for credit losses on loans:     
Beginning balance$229,013 $211,151 $211,866 $221,957 $221,511 
Loans charged-off:     
Commercial 232  2,868  110  3,776  4,348 
Energy 2,903         
Real estate     350     
Total charge-offs 3,135  2,868  460  3,776  4,348 
Recoveries:     
Commercial 113  219  217  1,933  1,104 
Energy 289    755  601  42 
Real estate       205  112 
Total recoveries 402  219  972  2,739  1,258 
Net charge-offs 2,733  2,649  (512) 1,037  3,090 
Provision for credit losses on loans 8,333  20,511  (1,227) (9,054) 3,536 
Ending balance$234,613 $229,013 $211,151 $211,866 $221,957 
      
Allowance for off-balance sheet credit losses:     
Beginning balance$17,981 $16,492 $17,265 $18,211 $16,747 
Provision for off-balance sheet credit losses 3,667  1,489  (773) (946) 1,464 
Ending balance$21,648 $17,981 $16,492 $17,265 $18,211 
      
Total allowance for credit losses$256,261 $246,994 $227,643 $229,131 $240,168 
Total provision for credit losses$12,000 $22,000 $(2,000)$(10,000)$5,000 
      
Allowance for credit losses on loans to total loans held for investment 1.19% 0.95% 0.97% 0.93% 0.93%
Allowance for credit losses on loans to average total loans held for investment 1.06% 1.02% 0.99% 0.91% 0.95%
Net charge-offs to average total loans held for investment(1) 0.05% 0.05%(0.01)% 0.02% 0.05%
Net charge-offs to average total loans held for investment for last 12 months(1) 0.03% 0.03% 0.03% 0.06% 0.33%
Total provision for credit losses to average total loans held for investment(1) 0.22% 0.39%(0.04)%(0.17)% 0.09%
Total allowance for credit losses to total loans held for investment 1.30% 1.03% 1.05% 1.00% 1.01%

(1) Interim period ratios are annualized.

TEXAS CAPITAL BANCSHARES, INC.     
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS   
(dollars in thousands)     
 3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
  2022  2022  2022  2021  2021 
Non-accrual loans held for investment$35,864 $50,526 $59,327 $72,502 $87,532 
Non-accrual loans held for sale(1) 1,340         
Other real estate owned          
Total non-performing assets$37,204 $50,526 $59,327 $72,502 $87,532 
      
Non-accrual loans held for investment to total loans held for investment 0.18% 0.21% 0.27% 0.32% 0.37%
Total non-performing assets to total assets 0.12% 0.16% 0.19% 0.21% 0.24%
Allowance for credit losses on loans to non-accrual loans held for investment6.5x 4.5x 3.6x 2.9x 2.5x 
      
Loans held for investment past due 90 days and still accruing$30,664 $3,206 $6,031 $3,467 $3,405 
Loans held for investment past due 90 days to total loans held for investment 0.15% 0.01% 0.03% 0.02% 0.01%
Loans held for sale past due 90 days and still accruing(1)(2)$4,877 $1,602 $3,865 $3,986 $3,808 

(1) Third quarter 2022 includes $1.3 million in non-accrual loans and $3.1 million in loans past due 90 days and still accruing associated to our insurance premium finance subsidiary that were transferred from loans held for investment to loans held for sale as of September 30, 2022.
(2) Includes loans guaranteed by U.S. government agencies that were repurchased out of Ginnie Mae securities. Loans are recorded as loans held for sale 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.

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)
      
 3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
  2022 2022 2022  2021  2021 
Interest income     
Interest and fees on loans$282,473$218,290$187,657 $204,379 $202,748 
Investment securities 15,002 14,665 17,302  11,780  10,235 
Interest bearing deposits in other banks 24,596 9,394 3,571 $3,733 $3,606 
Total interest income 322,071 242,349 208,530  219,892  216,589 
Interest expense     
Deposits 60,317 20,566 13,630  14,513  14,719 
Short-term borrowings 10,011 4,859 758  771  748 
Long-term debt 12,663 11,393 10,595  10,576  10,586 
Total interest expense 82,991 36,818 24,983  25,860  26,053 
Net interest income 239,080 205,531 183,547  194,032  190,536 
Provision for credit losses 12,000 22,000 (2,000) (10,000) 5,000 
Net interest income after provision for credit losses 227,080 183,531 185,547  204,032  185,536 
Non-interest income     
Service charges on deposit accounts 5,701 6,003 6,022  4,702  4,622 
Wealth management and trust fee income 3,631 4,051 3,912  3,793  3,382 
Brokered loan fees 3,401 4,133 3,970  5,678  6,032 
Servicing income 212 228 237  277  292 
Investment banking and trading income 7,812 11,126 4,179  6,456  4,127 
Net gain/(loss) on sale of loans held for sale       (1,185)
Other 4,576 701 1,962  10,553  7,509 
Total non-interest income 25,333 26,242 20,282  31,459  24,779 
Non-interest expense     
Salaries and benefits 129,336 103,885 100,098  89,075  87,503 
Occupancy expense 9,433 8,874 8,885  8,769  8,324 
Marketing 8,282 8,506 4,977  4,286  2,123 
Legal and professional 16,775 11,288 10,302  12,673  11,055 
Communications and technology 18,470 15,649 14,700  16,490  28,374 
Federal Deposit Insurance Corporation insurance assessment 3,953 3,318 3,981  4,688  4,500 
Servicing-related expenses     25  2,396 
Other 10,798 12,783 10,149  10,643  8,712 
Total non-interest expense 197,047 164,303 153,092  146,649  152,987 
Income before income taxes 55,366 45,470 52,737  88,842  57,328 
Income tax expense 13,948 11,311 13,087  23,712  13,938 
Net income 41,418 34,159 39,650  65,130  43,390 
Preferred stock dividends 4,313 4,312 4,313  4,313  4,312 
Net income available to common shareholders$37,105$29,847$35,337 $60,817 $39,078 


TEXAS CAPITAL BANCSHARES, INC.
TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1)
(dollars in thousands)
 3rd Quarter 2022 2nd Quarter 2022 1st Quarter 2022 4th Quarter 2021 3rd Quarter 2021
 Average
Balance
Income/
Expense
Yield/
Rate
 Average
Balance
Income/
Expense
Yield/
Rate
 Average
Balance
Income/
Expense
Yield/
Rate
 Average
Balance
Income/
Expense
Yield/
Rate
 Average
Balance
Income/
Expense
Yield/
Rate
Assets                   
Investment securities(2)$3,509,044$15,0021.58% $3,543,576$15,0651.60% $3,669.257$17,7431.91% $3,608,503$12,2251.34% $3,775,812$10,6841.12%
Interest bearing cash and cash equivalents 4,453,806 24,5962.19%  4,747,377 9,3940.79%  8,552,300 3,5710.17%  9,760,735 3,7330.15%  9,046,095 3,6060.16%
Loans held for sale 1,029,983 11,3164.36%  8,123 623.07%  7,633 1136.01%  8,348 512.41%  18,791 541.14%
Loans held for investment, mortgage finance 5,287,531 52,7563.96%  5,858,599 49,9143.42%  5,732,901 43,4663.07%  7,901,534 57,9492.91%  7,987,521 58,9132.93%
Loans held for investment(3) 16,843,922 218,5125.15%  16,616,234 168,4074.07%  15,686.319 144,1343.73%  15,348,322 146,4363.79%  15,266,167 143,8643.74%
Less: Allowance for credit losses on loans 229,005    211,385    212,612    223,034    220,984  
Loans held for investment, net 21,902,448 271,2684.91%  22,263,448 218,3213.93%  21,206,608 187,6003.59%  23,026,822 204,3853.52%  23,032,704 202,7773.49%
Total earning assets 30,895,281 322,1824.10%  30,562,524 242,8423.16%  33,435,798 209,0272.54%  36,404,408 220,3942.40%  35,873,402 217,1212.40%
Cash and other assets 918,630    870,396    819,486    835,293    855,555  
Total assets$31,813,911   $31,432,920   $34,255,284   $37,239,701   $36,728,957  
                    
Liabilities and Stockholders’ Equity                   
Transaction deposits$1,444,964$5,2391.44% $1,671,729$3,9200.94% $2,432,687$3,9620.66% $3,007,337$4,6640.62% $3,012,547$4,7370.62%
Savings deposits 10,249,387 46,5551.80%  8,696,819 15,4620.71%  10,420,545 8,5830.33%  10,529,645 8,4190.32%  10,044,995 8,2620.33%
Time deposits 1,701,238 8,5231.99%  877,399 1,1840.54%  1,038,722 1,0850.42%  1,276,800 1,4300.44%  1,640,562 1,7200.42%
Total interest bearing deposits 13,395,589 60,3171.79%  11,245,947 20,5660.73%  13,891,954 13,6300.40%  14,813,782 14,5130.39%  14,698,104 14,7190.40%
Short-term borrowings 1,931,537 10,0112.06%  2,232,119 4,8590.87%  1,770,781 7580.17%  2,267,013 7710.13%  2,299,692 7480.13%
Long-term debt 921,707 12,6635.45%  929,616 11,3934.92%  929,005 10,5954.63%  928,307 10,5764.52%  927,626 10,5864.53%
Total interest bearing liabilities 16,248,833 82,9912.03%  14,407,682 36,8181.02%  16,591,740 24,9830.61%  18,009,102 25,8600.57%  17,925,422 26,0530.58%
Non-interest bearing deposits 12,214,531    13,747,876    14,235,749    15,804,061    15,363,568  
Other liabilities 305,554    227,701    243,141    238,833    275,317  
Stockholders’ equity 3,044,993    3,049,661    3,184,654    3,187,705    3,164,650  
Total liabilities and stockholders’ equity$31,813,911   $31,432,920   $34,255,284   $37,239,701   $36,728,957  
Net interest income $239,191   $206,024   $184,044   $194,534   $191,068 
Net interest margin  3.05%   2.68%   2.23%   2.12%   2.11%

(1) Taxable equivalent rates used where applicable.
(2) Yields on investment securities are calculated using available-for-sale securities at amortized cost.
(3) Average balances include non-accrual loans.

 

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