TEXAS CAPITAL BANCSHARES INC/TX - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - FORM 8-K - TEXAS CAPITAL BANCSHARES INC/TX	d472911d8k.htm
EX-99.2 - PRESENTATION - TEXAS CAPITAL BANCSHARES INC/TX	d472911dex992.htm

Exhibit 99.1

LOGO

MEDIA CONTACT

Heather Worley, 214.932.6827

heather.worley@texascapitalbank.com

INVESTOR CONTACT

Myrna Vance, 214.932.6646

myrna.vance@texascapitalbank.com

TEXAS CAPITAL BANCSHARES ANNOUNCES OPERATING RESULTS FOR 2012

DALLAS – January 23, 2013 – 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 2012.

•

Net income increased 59% for the year, 3% decrease on a linked quarter basis (4% increase excluding litigation settlement) and 22% increase for the fourth quarter of 2012 as compared to the same quarter of 2011

•

EPS increased 51% for the year, 5% decrease on a linked quarter basis (3% increase excluding litigation settlement) and 13% increase for the fourth quarter of 2012 as compared to the same quarter of 2011

•

Results for the fourth quarter and 2012 include a pre-tax charge of $4.0 million, or $0.06 per share after-tax, related to settlement of litigation

•

Demand deposits increased 45% and total deposits increased 34% from 2011; linked quarter increases of 20% and 11%, respectively

•

Loans held for investment increased 22% and total loans increased 30% from 2011, reflecting linked quarter increases of 4% and 6%, respectively

“I am very pleased with the operating results we achieved both for this quarter and for the full year,” said George Jones, CEO. “Our growth continues, and we are confident in our ability to continue to generate industry-leading results.”

FINANCIAL SUMMARY

(dollars and shares in thousands)


	*2012*			*2011*			*% Change*
ANNUAL OPERATING RESULTS⁽¹⁾
Net Income	$	120,709		$	76,102			59	%
Diluted EPS	$	3.01		$	1.99			51	%
ROA		1.35	%		1.12	%
ROE		16.93	%		13.39	%
Diluted Shares		40,166			38,333

QUARTERLY OPERATING RESULTS⁽¹⁾
Net Income	$	31,435		$	25,745			22	%
Diluted EPS	$	.76		$	.67			13	%
ROA		1.27	%		1.28	%
ROE		15.35	%		17.05	%
Diluted Shares		41,505			38,609

BALANCE SHEET⁽¹⁾
Total Assets	$	10,540,542		$	8,137,225			30	%
Demand Deposits		2,535,375			1,751,944			45	%
Total Deposits		7,440,804			5,556,257			34	%
Loans Held for Investment		6,785,535			5,572,371			22	%
Loans Held for Sale		3,175,272			2,080,081			53	%
Total Loans		9,960,807			7,652,452			30	%
Stockholders’ Equity		836,242			616,331			36	%

(1)	Operating results, assets and loans are reporting from continuing operations

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income from continuing operations of $120.7 million for the year ended December 31, 2012 compared to $76.1 million in 2011. For the fourth quarter of 2012, we earned $31.4 million compared to $25.7 million for the same period in 2011. On a fully diluted basis, earnings per common share from continuing operations were $3.01 for the year ended December 31, 2012, compared to $1.99 for 2011. For the fourth quarter of 2012, diluted earnings per share was $.76 compared to $.67 for the same period in 2011. Results for the fourth quarter of 2012 include a charge of $4.0 million related to settlement of litigation. The discussion below relates only to continuing operations.

Return on average equity was 16.93 percent and return on average assets was 1.35 percent for the year ended December 31, 2012, compared to 13.39 percent and 1.12 percent, respectively, 2011. Return on average equity was 15.35 percent and return on average assets was 1.27 percent for the fourth quarter of 2012, compared to 17.05 percent and 1.28 percent, respectively, for the fourth quarter of 2011.

Net interest income was $101.2 million for the fourth quarter of 2012, compared to $96.9 million in the third quarter of 2012 and $88.1 million for the fourth quarter of 2011. For 2012, net interest income reached $376.9 million compared to $302.9 million in 2011. The net interest margin in the fourth quarter of 2012 was 4.27 percent, a 33 basis point decrease from the fourth quarter of 2011 and a 9 basis point decrease from the third quarter of 2012. The year-to-date and quarter-to-date year over year decreases in net interest margin are due to the growth in loans with lower yields with an offsetting benefit of the reduction in funding costs. The growth in loans more than compensated for the reduction in yields and produced the strong growth in net interest income.

Average loans held for investment for the year ended December 31, 2012 were $6.1 billion, an increase of $1.1 billion, or 22 percent, from 2011. Average loans held for sale for the year ended December 31, 2012 were $2.3 billion, an increase of $1.1 billion, or 90 percent. Average loans held for investment for the fourth quarter of 2012 were $6.7 billion, an increase of $1.3 billion, or 23 percent, from the fourth quarter of 2011 and an increase of $349.6 million, or 6 percent, from the third quarter of 2012. Average loans held for sale for the fourth quarter of 2012 increased $564.2 million to $2.7 billion compared to the fourth quarter of 2011 and increased $226.1 million from the third quarter of 2012.

Average total deposits for the fourth quarter of 2012 increased $1.4 billion from the fourth quarter of 2011 and increased $358.4 million from the third quarter of 2012. For the same periods, the average balance of demand deposits increased $697.6 million, or 42 percent, to $2.4 billion from $1.7 billion during the fourth quarter of 2011 and increased $346.1 million, or 17 percent, from the third quarter of 2012.

In the fourth quarter of 2012, we experienced decreases in the levels of non-performing assets. Credit costs, including the provision for credit losses and valuation charges related to other real estate owned (“OREO”) totaled $5.5 million in the fourth quarter of 2012 compared to $7.1 million in the fourth quarter of 2011 and $3.1 million in the third quarter of 2012. We recorded a $4.5 million provision for credit losses in the fourth quarter of 2012 compared to $6.0 million in the fourth quarter of 2011 and $3.0 million in the third quarter of 2012. For 2012, the total provision for loan losses was $11.5 million, a decrease of 60 percent from $28.5 million in 2011. At December 31, 2012, the combined reserve decreased to 1.15 percent of loans held for investment as compared to 1.31 percent at December 31, 2011 and 1.18 percent at September 30, 2012. 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. In the fourth quarter of 2012, net charge-offs were $3.5 million compared to net charge-offs of $3.4 million in the fourth quarter of 2011 and net charge-offs of $1.2 million in the third quarter of 2012. For 2012, net charge-offs were $6.1 million, 0.10 percent of average loans held for investment, compared to $29.2 million and a ratio of 0.58 percent in 2011. Non-accrual loans were $55.8 million, or .82 percent of loans held for investment at the end of the fourth quarter of 2012, $54.6 million, or .98 percent, at the end of the fourth quarter of 2011 and $57.3 million, or .87 percent, at the end of the third quarter 2012. At December 31, 2012, total OREO was $16.0 million compared to $34.1 million at the end of the fourth quarter of 2011, and $19.1 million at the end of the third quarter of 2012. The OREO balance of $16.0 million at December 31, 2012 is stated net of a $5.6 million valuation allowance. The valuation charge for OREO reflected in non-interest expense was $955,000 in the fourth quarter of 2012 compared to $1.1 million in the fourth quarter of 2011 and $64,000 in the third quarter of 2012.

Non-interest income increased $3.8 million during the fourth quarter of 2012, or 42 percent, compared to the same period of 2011 primarily related to a $1.6 million increase in brokered loan fees earned in the mortgage warehouse lending division and $1.9 million in other income which includes swap fees and gain on sales of OREO.

Non-interest expense for the fourth quarter of 2012 increased $9.7 million, or 19 percent, to $60.1 million from $50.4 million in the fourth quarter of 2011. The increase is primarily related to a $4.5 million increase in salaries and employee benefits to $31.2 million from $26.7 million, which was primarily due to general business growth and costs of performance-based incentives resulting from the increase in stock price. Non-interest expense for the fourth quarter of 2012 includes a pre-tax charge of $4.0 million ($0.06 per share after tax) for settlement of the judgment of $65.5 million against us in Oklahoma district court. In the settlement, all litigation against us in the Oklahoma courts and actions by us against the plaintiff in the Texas courts will be dismissed with prejudice. Because the settlement was within policy limits of insurance coverage maintained by the Company, we have claims against our insurance carrier for more than the charge, and we intend to pursue those claims aggressively. Legal and professional expense increased $958,000 from the fourth quarter of 2011 primarily due to general business growth. Allowance and other carrying costs for OREO expense decreased $1.0 million to $1.4 million, which included a $955,000 valuation expense during the fourth quarter of 2012. Of the $955,000 valuation expense in the fourth quarter of 2012, $23,000 related to direct write-downs and $932,000 related to increasing the valuation allowance, compared to $1.1 million in valuation expense in the fourth quarter 2011, $691,000 of which related to direct write-downs and $400,000 related to increasing the valuation allowance.

Stockholders’ equity increased by 36 percent from $616.3 million at December 31, 2011 to $836.2 million at December 31, 2012, primarily related to the offering of 2.3 million common shares for net proceeds of $87 million in the third quarter of 2012 and retention of net income. In addition to the equity offering, we also completed a subordinated debt offering in the third quarter of 2012 of $111 million, increasing our total regulatory capital by approximately $198 million. The Bank is well capitalized under regulatory guidelines and at December 31, 2012, our ratio of tangible common equity to total tangible assets was 7.7 percent.

ABOUT TEXAS CAPITAL BANCSHARES, INC.

Texas Capital Bancshares, Inc. (NASDAQ: TCBI) is the parent company of Texas Capital Bank, a commercial bank that delivers highly personalized financial services to businesses and private clients. 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 Texas Capital’s current estimates or expectations of future events or future results. Texas Capital is under no obligation, and expressly disclaims such obligation, to update, alter or revise its forward-looking statements, whether as a result of new information, future events, or otherwise. A number of factors, many of which are beyond Texas Capital’s control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the 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 the prospectus supplements, the Annual Report on Form 10-K and other filings made by Texas Capital with the Securities and Exchange Commission (SEC).

TEXAS CAPITAL BANCSHARES, INC.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

(Dollars in thousands except per share data)


	4^th Quarter 2012			3^rd Quarter 2012			2^nd Quarter 2012			1^st Quarter 2012			4^th Quarter 2011
*CONSOLIDATED STATEMENT OF INCOME*
Interest income	$	107,769		$	102,011		$	95,546		$	93,131		$	92,967
Interest expense		6,614			5,156			4,906			4,902			4,820

Net interest income		101,155			96,855			90,640			88,229			88,147
Provision for credit losses		4,500			3,000			1,000			3,000			6,000

Net interest income after provision for credit losses		96,655			93,855			89,640			85,229			82,147
Non-interest income		12,836			10,552			10,462			9,190			8,994
Non-interest expense		60,074			53,521			53,973			52,276			50,353

Income from continuing operations before income taxes		49,417			50,886			46,129			42,143			40,788
Income tax expense		17,982			18,316			16,506			15,062			15,043

Income from continuing operations		31,435			32,570			29,623			27,081			25,745
Income (loss) from discontinued operations (after-tax)		(6	)		(34	)		(1	)		4			(5	)

Net income	$	31,429		$	32,536		$	29,622		$	27,085		$	25,740

Diluted EPS from continuing operations	$	.76		$	.80		$	.76		$	.70		$	.67
Diluted EPS	$	.76		$	.80		$	.76		$	.70		$	.67

Diluted shares		41,505,026			40,755,733			39,141,544			38,914,241			38,609,094

*CONSOLIDATED BALANCE SHEET DATA*
Total assets	$	10,540,542		$	9,881,362		$	9,144,360		$	8,559,917		$	8,137,225
Loans held for investment		6,785,535			6,549,089			6,234,692			5,792,349			5,572,371
Loans held for sale		3,175,272			2,818,622			2,408,032			2,255,281			2,080,081
Securities		100,195			107,288			114,964			123,828			143,710
Demand deposits		2,535,375			2,114,279			2,019,473			1,751,443			1,751,944
Total deposits		7,440,804			6,717,579			6,660,290			6,063,558			5,556,257
Other borrowings		1,947,161			2,046,169			1,609,039			1,657,728			1,768,116
Subordinated notes		111,000			111,000			—			—			—
Long-term debt		113,406			113,406			113,406			113,406			113,406
Stockholders’ equity		836,242			802,406			680,705			647,341			616,331

End of period shares outstanding		40,727,579			40,580,283			38,114,012			37,912,054			37,666,291
Book value (excluding securities gains/losses)	$	20.45		$	19.68		$	17.75		$	16.96		$	16.24
Tangible book value (excluding securities gains/losses)	$	19.96		$	19.18		$	17.22		$	16.42		$	15.69

*SELECTED FINANCIAL RATIOS*
Net interest margin		4.27	%		4.36	%		4.49	%		4.54	%		4.60	%
Return on average assets		1.27	%		1.40	%		1.40	%		1.33	%		1.28	%
Return on average equity		15.35	%		17.27	%		18.08	%		17.36	%		17.05	%
Non-interest income to earning assets		.54	%		.47	%		.52	%		.47	%		.47	%
Efficiency ratio		52.7	%		49.8	%		53.4	%		53.7	%		51.8	%
Efficiency ratio (excluding OREO valuation/write-down)		51.9	%		49.8	%		50.3	%		50.8	%		50.7	%
Non-interest expense to earning assets		2.53	%		2.40	%		2.67	%		2.69	%		2.62	%
Non-interest expense to earning assets (excluding OREO valuation charge)		2.49	%		2.40	%		2.52	%		2.55	%		2.57	%
Tangible common equity to total tangible assets		7.7	%		7.9	%		7.2	%		7.3	%		7.3	%
Tier 1 capital ratio		10.1	%		10.4	%		9.5	%		9.5	%		9.6	%
Total capital ratio		12.1	%		12.6	%		10.5	%		10.4	%		10.6	%
Tier 1 leverage ratio ⁽¹⁾		9.4	%		9.6	%		9.0	%		8.9	%		8.8	%

(1)	Non-GAAP measure equal to end of period shareholders’ equity less goodwill and intangible assets divided by end of period total assets less goodwill and intangible assets.

TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)


	December 31, 2012			December 31, 2011			% Change
*Assets*
Cash and due from banks	$	111,938		$	79,248			41	%
Interest-bearing deposits		94,410			31,310			201	%
Securities, available-for-sale		100,195			143,710			(30	)%
Loans held for sale		3,175,272			2,080,081			53	%
Loans held for sale from discontinued operations		302			393			(23	)%
Loans held for investment (net of unearned income)		6,785,535			5,572,371			22	%
Less: Allowance for loan losses		74,337			70,295			5	%

Loans held for investment, net		6,711,198			5,502,076			22	%
Premises and equipment, net		11,445			11,457			(0	)%
Accrued interest receivable and other assets		316,201			268,863			18	%
Goodwill and intangibles, net		19,883			20,480			(3	)%

Total assets	$	10,540,844		$	8,137,618			30	%

*Liabilities and Stockholders’ Equity*
Liabilities:
Deposits:
Non-interest bearing	$	2,535,375		$	1,751,944			45	%
Interest bearing		4,576,120			3,324,040			38	%
Interest bearing in foreign branches		329,309			480,273			(31	)%

Total deposits		7,440,804			5,556,257			34	%

Accrued interest payable		650			599			9	%
Other liabilities		91,581			82,909			10	%
Federal funds purchased		273,179			412,249			(34	)%
Repurchase agreements		23,936			23,801			1	%
Other borrowings		1,650,046			1,332,066			24	%
Subordinated notes		111,000			—			100	%
Trust preferred subordinated debentures		113,406			113,406			—

Total liabilities		9,704,602			7,521,287			29	%

Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares – 10,000,000
Issued shares		—			—			—
Common stock, $.01 par value:
Authorized shares – 100,000,000
Issued shares – 40,727,996 and 37,666,708 at December 31, 2012 and 2011, respectively		407			376			8	%
Additional paid-in capital		450,116			349,458			29	%
Retained earnings		382,455			261,783			46	%
Treasury stock (shares at cost: 417 at December 31, 2012 and 2011)		(8	)		(8	)		—
Accumulated other comprehensive income, net of taxes		3,272			4,722			(31	)%

Total stockholders’ equity		836,242			616,331			36	%

Total liabilities and stockholders’ equity	$	10,540,844		$	8,137,618			30	%

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
	2012			2011			2012			2011
*Interest income*
Interest and fees on loans	$	106,653		$	91,512		$	393,548		$	314,753
Securities		1,053			1,408			4,688			6,458
Federal funds sold		6			1			13			37
Deposits in other banks		57			46			208			352

Total interest income		107,769			92,967			398,457			321,600
*Interest expense*
Deposits		3,312			3,471			13,644			14,950
Federal funds purchased		190			273			979			602
Repurchase agreements		3			4			13			10
Other borrowings		615			404			2,149			528
Subordinated notes		1,829			—			2,037			—
Trust preferred subordinated debentures		665			668			2,756			2,573

Total interest expense		6,614			4,820			21,578			18,663

*Net interest income*		101,155			88,147			376,879			302,937
*Provision for credit losses*		4,500			6,000			11,500			28,500

*Net interest income after provision for credit losses*		96,655			82,147			365,379			274,437
*Non-interest income*
Service charges on deposit accounts		1,693			1,504			6,605			6,480
Trust fee income		1,260			1,108			4,822			4,219
Bank owned life insurance (BOLI) income		510			500			2,168			2,095
Brokered loan fees		4,978			3,408			17,596			11,335
Other		4,395			2,474			11,849			8,103

Total non-interest income		12,836			8,994			43,040			32,232
*Non-interest expense*
Salaries and employee benefits		31,198			26,658			121,456			100,535
Net occupancy expense		3,916			3,537			14,852			13,657
Marketing		3,980			3,798			13,449			11,109
Legal and professional		5,320			4,362			17,557			14,996
Communications and technology		3,070			2,468			11,158			9,608
FDIC insurance assessment		1,071			1,595			5,568			7,543
Allowance and other carrying costs for OREO		1,369			2,383			9,075			9,586
Litigation settlement expense		4,000			—			4,000			—
Other		6,150			5,552			22,729			21,167

Total non-interest expense		60,074			50,353			219,844			188,201

*Income from continuing operations before income taxes*		49,417			40,788			188,575			118,468
Income tax expense		17,982			15,043			67,866			42,366

*Income from continuing operations*		31,435			25,745			120,709			76,102
*Loss from discontinued operations (after-tax)*		(6	)		(5	)		(37	)		(126	)

*Net income*	$	31,429		$	25,740		$	120,672		$	75,976

*Basic earnings per common share:*
Income from continuing operations	$	.78		$	.69		$	3.09		$	2.04
Net income	$	.78		$	.69		$	3.09		$	2.03

*Diluted earnings per common share:*
Income from continuing operations	$	.76		$	.67		$	3.01		$	1.99
Net income	$	.76		$	.67		$	3.00		$	1.98

TEXAS CAPITAL BANCSHARES, INC.

SUMMARY OF LOAN LOSS EXPERIENCE

(Dollars in thousands)


	4^th Quarter 2012			3^rd Quarter 2012			2^nd Quarter 2012			1^st Quarter 2012			4^th Quarter 2011
Reserve for loan losses:
Beginning balance	$	73,722		$	72,404		$	71,992		$	70,295		$	67,897
Loans charged-off:
Commercial		4,044			1,154			1,048			462			1,348
Real estate – construction		—			—			—			—			—
Real estate – term		—			284			56			559			2,438
Consumer		—			49			—			—			—
Leases		34			49			26			95			238

Total		4,078			1,536			1,130			1,116			4,024
Recoveries:
Commercial		350			132			191			159			390
Real estate – construction		—			10			—			—			—
Real estate – term		226			130			348			108			45
Consumer		7			18			3			5			4
Leases		21			16			55			16			171

Total recoveries		604			306			597			288			610

Net charge-offs		3,474			1,230			533			828			3,414
Provision for loan losses		4,089			2,548			945			2,525			5,812

Ending balance	$	74,337		$	73,722		$	72,404		$	71,992		$	70,295

Reserve for off-balance sheet credit losses:
Beginning balance	$	3,444		$	2,992		$	2,937		$	2,462		$	2,274
Provision for off-balance sheet credit losses		411			452			55			475			188

Ending balance	$	3,855		$	3,444		$	2,992		$	2,937		$	2,462

Total reserves for credit losses	$	78,192		$	77,166		$	75,396		$	74,929		$	72,757

Total provision for credit losses	$	4,500		$	3,000		$	1,000		$	3,000		$	6,000

Reserve to loans held for investment⁽²⁾		1.10	%		1.13	%		1.16	%		1.24	%		1.26	%
Reserve to average loans held for investment⁽²⁾		1.12	%		1.16	%		1.22	%		1.27	%		1.30	%
Net charge-offs to average loans⁽¹⁾⁽²⁾		.21	%		.08	%		.04	%		.06	%		.25	%
Net charge-offs to average loans for last twelve months⁽¹⁾⁽²⁾		.10	%		.10	%		.20	%		.40	%		.58	%
Total provision for credit losses to average loans⁽¹⁾⁽²⁾		.27	%		.19	%		.07	%		.21	%		.44	%
Combined reserves for credit losses to loans held for investment⁽²⁾		1.15	%		1.18	%		1.21	%		1.29	%		1.31	%

Non-performing assets (NPAs):
Non-accrual loans	$	55,833		$	57,275		$	56,433		$	50,160		$	54,580
Other real estate owned (OREO)⁽⁴⁾		15,991			19,079			27,882			32,601			34,077

Total	$	71,824		$	76,354		$	84,315		$	82,761		$	88,657

Non-accrual loans to loans⁽²⁾		.82	%		.87	%		.91	%		.87	%		.98	%
Total NPAs to loans plus OREO⁽²⁾		1.06	%		1.16	%		1.35	%		1.42	%		1.58	%
Total NPAs to earning assets		.71	%		.81	%		.97	%		1.01	%		1.14	%
Reserve for loan losses to non-accrual loans		1.3x			1.3x			1.3x			1.4x			1.3x

Restructured loans	$	10,407		$	9,145		$	13,943		$	12,582		$	25,104
Loans past due 90 days and still accruing⁽³⁾	$	3,674		$	3,622		$	4,421		$	5,941		$	5,467

Loans past due 90 days to loans⁽²⁾		.05	%		.06	%		.07	%		.10	%		.10	%

(1)	Interim period ratios are annualized.

(2)	Excludes loans held for sale.

(3)

At December 31, 2012, loans past due 90 days and still accruing includes premium finance loans of $2.8 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.

(4)	At December 31, 2012, OREO balance is net of $5.6 million valuation allowance.

TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

(Dollars in thousands)


	4^th Quarter 2012			3^rd Quarter 2012			2^nd Quarter 2012			1^st Quarter 2012		4^th Quarter 2011
*Interest income*
Interest and fees on loans	$	106,653		$	100,830		$	94,291		$	91,774	$	91,512
Securities		1,053			1,125			1,203			1,307		1,408
Federal funds sold		6			2			4			1		1
Deposits in other banks		57			54			48			49		46

Total interest income		107,769			102,011			95,546			93,131		92,967
*Interest expense*
Deposits		3,312			3,378			3,482			3,472		3,471
Federal funds purchased		190			268			240			281		273
Repurchase agreements		3			3			4			3		4
Other borrowings		615			607			492			435		404
Subordinated notes		1,829			208			—			—		—
Trust preferred subordinated debentures		665			692			688			711		668

Total interest expense		6,614			5,156			4,906			4,902		4,820

*Net interest income*		101,155			96,855			90,640			88,229		88,147
*Provision for credit losses*		4,500			3,000			1,000			3,000		6,000

*Net interest income after provision for credit losses*		96,655			93,855			89,640			85,229		82,147
*Non-interest income*
Service charges on deposit accounts		1,693			1,684			1,624			1,604		1,504
Trust fee income		1,260			1,216			1,232			1,114		1,108
Bank owned life insurance (BOLI) income		510			549			588			521		500
Brokered loan fees		4,978			4,839			4,128			3,651		3,408
Other		4,395			2,264			2,890			2,300		2,474

Total non-interest income		12,836			10,552			10,462			9,190		8,994
*Non-interest expense*
Salaries and employee benefits		31,198			31,009			30,230			29,019		26,658
Net occupancy expense		3,916			3,653			3,679			3,604		3,537
Marketing		3,980			3,472			3,174			2,823		3,798
Legal and professional		5,320			4,916			3,330			3,991		4,362
Communications and technology		3,070			2,885			2,720			2,483		2,468
FDIC insurance assessment		1,071			1,332			1,596			1,569		1,595
Allowance and other carrying costs for OREO		1,369			552			3,812			3,342		2,383
Litigation settlement expense		4,000			—			—			—		—
Other		6,150			5,702			5,432			5,445		5,552

Total non-interest expense		60,074			53,521			53,973			52,276		50,353

*Income from continuing operations before income taxes*		49,417			50,886			46,129			42,143		40,788
Income tax expense		17,982			18,316			16,506			15,062		15,043

*Income from continuing operations*		31,435			32,570			29,623			27,081		25,745
*Income (loss) from discontinued operations (after-tax)*		(6	)		(34	)		(1	)		4		(5	)

*Net income*	$	31,429		$	32,536		$	29,622		$	27,085	$	25,740

TEXAS CAPITAL BANCSHARES, INC.

QUARTERLY FINANCIAL SUMMARY - UNAUDITED

Consolidated Daily Average Balances, Average Yields and Rates

Continuing Operations

(Dollars in thousands)


	4^th Quarter 2012							3^rd Quarter 2012							2^nd Quarter 2012							1^st Quarter 2012							4^th Quarter 2011
	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	$	78,182	$	811		4.13	%	$	84,583	$	881		4.14	%	$	91,623	$	948		4.16	%	$	109,003	$	1,041		3.84	%	$	109,761	$	1,126		4.07	%
Securities – Non-taxable⁽²⁾		25,301		372		5.85	%		25,717		376		5.82	%		26,817		393		5.89	%		28,506		409		5.77	%		30,065		434		5.73	%
Federal funds sold		21,617		6		0.11	%		9,360		2		0.09	%		8,077		4		0.20	%		6,848		1		0.06	%		8,505		1		0.05	%
Deposits in other banks		69,886		57		0.32	%		64,859		54		0.33	%		60,416		48		0.32	%		49,470		49		0.41	%		42,644		46		0.43	%
Loans held for sale		2,658,092		26,440		3.96	%		2,432,027		24,433		4.00	%		2,062,449		21,087		4.11	%		2,036,622		21,315		4.21	%		2,093,883		22,332		4.23	%
Loans held for investment		6,662,817		80,213		4.79	%		6,313,263		76,397		4.81	%		5,950,913		73,204		4.95	%		5,660,993		70,459		5.01	%		5,395,253		69,180		5.09	%
Less reserve for loan losses		73,912		—		—			72,373		—		—			71,779		—		—			70,261		—		—			67,214		—		—

Loans, net of reserve		9,246,997		106,653		4.59	%		8,672,917		100,830		4.63	%		7,941,583		94,291		4.78	%		7,627,354		91,774		4.84	%		7,421,922		91,512		4.89	%

Total earning assets		9,441,983		107,899		4.55	%		8,857,436		102,143		4.59	%		8,128,516		95,684		4.73	%		7,821,181		93,274		4.80	%		7,612,897		93,119		4.85	%
Cash and other assets		427,299							399,428							394,086							388,009							382,577

Total assets	$	9,869,282						$	9,256,864						$	8,522,602						$	8,209,190						$	7,995,474

Liabilities and Stockholders’ Equity
Transaction deposits	$	941,947	$	244		0.10	%	$	803,776	$	247		0.12	%	$	694,463	$	198		0.11	%	$	565,319	$	140		0.10	%	$	429,980	$	33		0.03	%
Savings deposits		2,933,904		2,299		0.31	%		2,922,852		2,185		0.30	%		2,664,598		2,107		0.32	%		2,535,412		2,083		0.33	%		2,422,465		2,062		0.34	%
Time deposits		423,685		448		0.42	%		491,783		576		0.47	%		584,581		831		0.57	%		624,823		920		0.59	%		534,441		927		0.69	%
Deposits in foreign branches		362,580		321		0.35	%		431,412		370		0.34	%		444,478		346		0.31	%		409,422		329		0.32	%		578,728		449		0.31	%

Total interest bearing deposits		4,662,116		3,312		0.28	%		4,649,823		3,378		0.29	%		4,388,120		3,482		0.32	%		4,134,976		3,472		0.34	%		3,965,614		3,471		0.35	%
Other borrowings		1,725,129		808		0.19	%		1,639,953		878		0.21	%		1,428,575		736		0.21	%		1,554,716		719		0.19	%		1,588,198		681		0.17	%
Subordinated notes		111,000		1,829		6.56	%		12,065		208		6.86	%		—		—		—			—		—		—			—		—		—
Trust preferred subordinated debentures		113,406		665		2.33	%		113,406		692		2.43	%		113,406		688		2.44	%		113,406		711		2.52	%		113,406		668		2.34	%

Total interest bearing liabilities		6,611,651		6,614		0.40	%		6,415,247		5,156		0.32	%		5,930,101		4,906		0.33	%		5,803,098		4,902		0.34	%		5,667,218		4,820		0.34	%
Demand deposits		2,356,758							2,010,694							1,864,456							1,700,390							1,659,132
Other liabilities		86,308							80,810							69,076							78,108							70,142
Stockholders’ equity		814,565							750,113							658,969							627,594							598,982

Total liabilities and stockholders’ equity	$	9,869,282						$	9,256,864						$	8,522,602						$	8,209,190						$	7,995,474

Net interest income			$	101,285						$	96,987						$	90,778						$	88,372						$	88,299
Net interest margin						4.27	%						4.36	%						4.49	%						4.54	%						4.60	%

(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.

Attached files

TEXAS CAPITAL BANCSHARES INC/TX Reports

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