Exhibit 99.1
FOR IMMEDIATE RELEASE
April 21, 2010
April 21, 2010
INVESTOR CONTACT
Myrna Vance, 214.932.6646
myrna.vance@texascapitalbank.com
Myrna Vance, 214.932.6646
myrna.vance@texascapitalbank.com
TEXAS CAPITAL BANCSHARES ANNOUNCES OPERATING RESULTS FOR Q1 2010
DALLAS — April 21, 2010 — Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the first quarter of 2010.
• | Net income increased 18% on a linked quarter basis and 24% from Q1 2009 | ||
• | EPS increased 17% on a linked quarter basis and 24% for the first quarter of 2010 as compared to the same quarter of 2009 | ||
• | Demand deposits grew 11% and total deposits increased 7% on a linked quarter basis and grew 63% and 46%, respectively, from Q1 2009 | ||
• | Loans held for investment remained consistent on a linked quarter basis and total loans decreased 2% on a linked quarter basis; grew 11% and 13%, respectively, from Q1 2009 |
“We are pleased to report another quarter in which our core earnings power improved. We had strong deposit growth and loan growth which outpaced that of peers in Texas and throughout the nation,” said George Jones, CEO. “In a challenging environment for our industry, we have maintained solid profitability and have a strong equity capital base to support our business objectives.”
FINANCIAL SUMMARY
(dollars and shares in thousands)
(dollars and shares in thousands)
Q1 2010 | Q1 2009 | % Change | ||||||||||
QUARTERLY OPERATING RESULTS | ||||||||||||
Net Income(1) | $ | 7,600 | $ | 6,125 | 24 | % | ||||||
Net Income Available to Common Shareholders(1) | $ | 7,600 | $ | 5,195 | 46 | % | ||||||
Diluted EPS(1) | $ | .21 | $ | .17 | 24 | % | ||||||
ROA(1) | .57 | % | .48 | % | ||||||||
ROE(1) | 6.21 | % | 5.44 | % | ||||||||
Diluted Shares | 36,784 | 31,072 | ||||||||||
BALANCE SHEET | ||||||||||||
Total Assets(1) | $ | 5,499,599 | $ | 5,012,513 | 10 | % | ||||||
Demand Deposits | 994,096 | 608,939 | 63 | % | ||||||||
Total Deposits | 4,409,819 | 3,010,960 | 46 | % | ||||||||
Loans Held for Investment | 4,443,456 | 4,019,247 | 11 | % | ||||||||
Total Loans(1) | 5,035,892 | 4,446,229 | 13 | % | ||||||||
Stockholders’ Equity | 499,996 | 471,990 | 6 | % |
(1) | From continuing operations |
DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income from continuing operations of $7.6 million for the quarter ended March 31, 2010, compared to $6.1 million for the first quarter of 2009. Net income available to common shareholders from continuing operations was $7.6 million for the quarter ended March 31, 2010 compared to $5.2 million for the first quarter of 2009. On a fully diluted basis, earnings per common share from continuing operations were $.21 for the three months ended March 31, 2010 compared to $.17 for the same period last year. The discussion below relates only to continuing operations.
Return on average equity was 6.21 percent and return on average assets was .57 percent for the first quarter of 2010, compared to 5.44 percent and .48 percent, respectively for the first quarter of 2009.
The net interest margin in the first quarter of 2010 was 4.43 percent, a 104 basis point increase from the first quarter of 2009 and a 22 basis point increase from the fourth quarter of 2009 due to the significant reduction in funding costs and our ability to maintain and improve spreads on our loans. Net interest income was $55.2 million for the first quarter of 2010, compared to $41.2 million for the first quarter of 2009. The increase was due to an increase in average earning assets of $121.0 million over levels reported in the first quarter of 2009. The increase in average earning assets included a $391.8 million increase in average loans held for investment, offset by a decrease of $129.9 million in average loans held for sale and a decrease of $114.6 million in average securities.
Average total deposits for the first quarter of 2010 increased by $1.1 billion from the first quarter of 2009 and increased by $60.1 million from the fourth quarter of 2009. For the same periods, the average balance of demand deposits increased by $319.7 million, or 50 percent, to $956.4 million from $636.7 million during the first quarter of 2009 and increased $42.1 million, or 5 percent, from the fourth quarter of 2009.
As a result of the overall economic downturn, we have experienced increases in levels of non-performing assets and exposure to credit losses during the first quarter of 2010. Provision for credit losses, valuation allowance and direct write-downs related to other real estate owned (“OREO”) totaled $15.4 million in first quarter of 2010 compared to $8.5 million in the first quarter of 2009 and $16.1 million in the fourth quarter of 2009. The Company recorded a $13.5 million provision for credit losses in the first quarter of 2010, compared to $8.5 million in the first quarter of 2009 and $10.5 million in the fourth quarter of 2009. The first quarter provision resulted in an increase in the combined reserve to 1.69 percent of loans held for investment as compared to 1.31 percent at March 31, 2009, and 1.59 percent at the end of the fourth quarter of 2009. In management’s opinion, the reserve is adequate and is derived from consistent application of the methodology for establishing the adequacy of reserves for Texas Capital Bank’s loan portfolio. In the first quarter of 2010, net charge-offs were $9.3 million, compared to net charge-offs of $2.6 million in the first quarter of 2009 and net charge-offs of $8.0 million in the fourth quarter of 2009. Non-accrual loans were $115.9 million, or 2.61 percent, of loans at the end of the first quarter of 2010, compared to $50.7 million, or 1.26 percent of loans at the end of the first quarter of 2009, and $95.6 million, or 2.15 percent of loans at the end of the fourth quarter of 2009. At March 31, 2010, total OREO was $28.9 million compared to $27.5 million at the end of the first quarter of 2009, and $27.3 million at the end of the fourth quarter of 2009. The balance of $28.9 million at March 31, 2010 is stated net of an $8.5 million valuation allowance, for which we incurred a non-interest expense of $1.8 million during the first quarter of 2010. We also incurred an additional $111,000 in direct OREO write-downs during the first quarter of 2010.
Non-interest income for the first quarter of 2010 remained consistent at $6.9 million as compared to the first quarter of 2009.
Non-interest expense for the first quarter of 2010 increased $6.9 million, or 23 percent, to $37.2 million from $30.3 million in the first quarter of 2009. The increase is primarily related to a $3.9 million increase in salaries and employee benefits to $20.1 million from $16.2 million, which was primarily due to general business growth. Allowance and other carrying costs for OREO expense increased $1.1 million to $2.3 million related to deteriorating values of assets held in OREO. Of the $2.3 million expense, $1.8 million was related to increasing the valuation allowance and $111,000 related to direct write-downs of the OREO balance. Excluding the expense related to the valuation allowance increase, our efficiency ratio improved to 56.7
2
percent in the first quarter of 2010 from 59.1 percent in the fourth quarter of 2009 and from 63.0% in the first quarter of 2009.
Stockholders’ equity increased by 6 percent from $472.0 million at March 31, 2009 to $500.0 million at March 31, 2010. Contributing to the increase was retained net income and proceeds of sales of common stock. During the first quarter of 2010, we sold approximately 548,000 shares of common stock with net proceeds of $8.9 million under the discretionary equity issuance program announced in January 2010. The Bank is well capitalized under regulatory guidelines and at March 31, 2010, the Company’s ratio of tangible common equity to total tangible assets was 8.8 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 release contains forward-looking statements, which are subject to risks and uncertainties. A number of factors, many of which are beyond Texas Capital Bancshares’ control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include 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 Form 10-K and other filings made by Texas Capital Bancshares with the Securities and Exchange Commission.
3
TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
(Dollars in thousands except per share data)
1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | ||||||||||||||||
2010 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||
CONSOLIDATED STATEMENT OF INCOME | ||||||||||||||||||||
Interest income | $ | 64,306 | $ | 65,137 | $ | 62,197 | $ | 60,013 | $ | 55,806 | ||||||||||
Interest expense | 9,078 | 10,031 | 10,631 | 11,211 | 14,589 | |||||||||||||||
Net interest income | 55,228 | 55,106 | 51,566 | 48,802 | 41,217 | |||||||||||||||
Provision for credit losses | 13,500 | 10,500 | 13,500 | 11,000 | 8,500 | |||||||||||||||
Net interest income after provision for credit losses | 41,728 | 44,606 | 38,066 | 37,802 | 32,717 | |||||||||||||||
Non-interest income | 6,948 | 7,811 | 7,133 | 7,416 | 6,900 | |||||||||||||||
Non-interest expense | 37,186 | 42,796 | 37,067 | 35,373 | 30,306 | |||||||||||||||
Income from continuing operations before income taxes | 11,490 | 9,621 | 8,132 | 9,845 | 9,311 | |||||||||||||||
Income tax expense | 3,890 | 3,194 | 2,779 | 3,363 | 3,186 | |||||||||||||||
Income from continuing operations | 7,600 | 6,427 | 5,353 | 6,482 | 6,125 | |||||||||||||||
Loss from discontinued operations (after-tax) | (55 | ) | (55 | ) | (41 | ) | (44 | ) | (95 | ) | ||||||||||
Net income | 7,545 | 6,372 | 5,312 | 6,438 | 6,030 | |||||||||||||||
Preferred stock dividends | — | — | — | 4,453 | 930 | |||||||||||||||
Net income available to common shareholders | $ | 7,545 | $ | 6,372 | $ | 5,312 | $ | 1,985 | $ | 5,100 | ||||||||||
Diluted EPS from continuing operations | $ | .21 | $ | .18 | $ | .15 | $ | .06 | $ | .17 | ||||||||||
Diluted EPS | $ | .21 | $ | .18 | $ | .15 | $ | .06 | $ | .16 | ||||||||||
Diluted shares | 36,783,719 | 36,311,306 | 36,303,975 | 33,866,237 | 31,072,444 | |||||||||||||||
CONSOLIDATED BALANCE SHEET DATA | ||||||||||||||||||||
Total assets | $ | 5,499,599 | $ | 5,698,318 | $ | 5,320,401 | $ | 5,306,407 | $ | 5,012,513 | ||||||||||
Loans held for investment | 4,443,456 | 4,457,293 | 4,290,453 | 4,211,304 | 4,019,247 | |||||||||||||||
Loans held for sale | 592,436 | 693,504 | 549,787 | 544,652 | 426,982 | |||||||||||||||
Securities | 246,209 | 266,128 | 285,869 | 308,187 | 361,898 | |||||||||||||||
Demand deposits | 994,096 | 899,492 | 802,692 | 730,034 | 608,939 | |||||||||||||||
Total deposits | 4,409,819 | 4,120,725 | 3,916,568 | 3,643,582 | 3,010,960 | |||||||||||||||
Other borrowings | 452,061 | 957,029 | 790,192 | 1,059,572 | 1,386,783 | |||||||||||||||
Long-term debt | 113,406 | 113,406 | 113,406 | 113,406 | 113,406 | |||||||||||||||
Stockholders’ equity | 499,996 | 481,360 | 474,044 | 464,026 | 471,990 | |||||||||||||||
End of period shares outstanding | 36,524,313 | 35,919,524 | 35,802,068 | 35,688,243 | 31,014,158 | |||||||||||||||
Book value (excluding securities gains/losses) | $ | 13.52 | $ | 13.23 | $ | 13.05 | $ | 12.87 | $ | 12.64 | ||||||||||
Tangible book value (excluding securities gains/losses) | $ | 13.25 | $ | 12.96 | $ | 12.84 | $ | 12.66 | $ | 12.39 | ||||||||||
SELECTED FINANCIAL RATIOS | ||||||||||||||||||||
From continuing operations: | ||||||||||||||||||||
Net interest margin | 4.43 | % | 4.21 | % | 4.06 | % | 3.88 | % | 3.39 | % | ||||||||||
Return on average assets | .57 | % | .47 | % | .40 | % | .49 | % | .48 | % | ||||||||||
Return on average equity | 6.21 | % | 5.26 | % | 4.46 | % | 5.45 | % | 5.44 | % | ||||||||||
Non-interest income to earning assets | .55 | % | .59 | % | .56 | % | .59 | % | .56 | % | ||||||||||
Efficiency ratio | 59.8 | % | 68.0 | % | 63.1 | % | 62.9 | % | 63.0 | % | ||||||||||
Efficiency ratio (excluding ORE valuation/write-down) | 56.7 | % | 59.1 | % | 59.4 | % | 62.9 | % | 63.0 | % | ||||||||||
Non-interest expense to earning assets | 2.97 | % | 3.26 | % | 2.91 | % | 2.80 | % | 2.48 | % | ||||||||||
From consolidated: | ||||||||||||||||||||
Net interest margin | 4.43 | % | 4.21 | % | 4.06 | % | 3.88 | % | 3.39 | % | ||||||||||
Return on average assets | .57 | % | .46 | % | .40 | % | .48 | % | .47 | % | ||||||||||
Return on average equity | 6.17 | % | 5.21 | % | 4.43 | % | 5.41 | % | 5.36 | % | ||||||||||
Tangible common equity to total tangible assets | 8.8 | % | 8.2 | % | 8.7 | % | 8.6 | % | 7.8 | % | ||||||||||
Tier 1 capital ratio | 11.3 | % | 10.7 | % | 11.2 | % | 11.2 | % | 11.9 | % | ||||||||||
Total capital ratio | 12.5 | % | 12.0 | % | 12.5 | % | 12.3 | % | 13.0 | % | ||||||||||
Tier 1 leverage ratio | 11.0 | % | 10.5 | % | 10.8 | % | 10.6 | % | 11.0 | % |
4
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
(Dollars in thousands)
March 31, | March 31, | % | ||||||||||
2010 | 2009 | Change | ||||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 70,066 | $ | 60,631 | 16 | % | ||||||
Federal funds sold | 9,990 | 10,000 | N/M | |||||||||
Securities, available-for-sale | 246,209 | 361,898 | (32 | )% | ||||||||
Loans held for sale | 592,436 | 426,982 | 39 | % | ||||||||
Loans held for sale from discontinued operations | 583 | 591 | (1 | )% | ||||||||
Loans held for investment (net of unearned income) | 4,443,456 | 4,019,247 | 11 | % | ||||||||
Less: Allowance for loan losses | 71,705 | 50,145 | 43 | % | ||||||||
Loans held for investment, net | 4,371,751 | 3,969,102 | 10 | % | ||||||||
Premises and equipment, net | 10,773 | 8,457 | 27 | % | ||||||||
Accrued interest receivable and other assets | 188,649 | 167,795 | 11 | % | ||||||||
Goodwill and intangibles, net | 9,725 | 7,648 | 27 | % | ||||||||
Total assets | $ | 5,500,182 | $ | 5,013,104 | 10 | % | ||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Liabilities: | ||||||||||||
Deposits: | ||||||||||||
Non-interest bearing | $ | 994,096 | $ | 608,939 | 63 | % | ||||||
Interest bearing | 3,072,001 | 1,984,946 | 55 | % | ||||||||
Interest bearing in foreign branches | 343,722 | 417,075 | (18 | )% | ||||||||
Total deposits | 4,409,819 | 3,010,960 | 46 | % | ||||||||
Accrued interest payable | 2,038 | 5,181 | (61 | )% | ||||||||
Other liabilities | 22,862 | 24,784 | (8 | )% | ||||||||
Federal funds purchased | 425,939 | 514,270 | (17 | )% | ||||||||
Repurchase agreements | 21,874 | 62,892 | (65 | )% | ||||||||
Other borrowings | 4,248 | 809,621 | (99 | )% | ||||||||
Trust preferred subordinated debentures | 113,406 | 113,406 | — | |||||||||
Total liabilities | 5,000,186 | 4,541,114 | 10 | % | ||||||||
Stockholders’ equity: | ||||||||||||
Preferred stock, $.01 par value, $1,000 liquidation value: | ||||||||||||
Authorized shares — 10,000,000 | ||||||||||||
Issued shares | — | 70,984 | ||||||||||
Common stock, $.01 par value: | ||||||||||||
Authorized shares — 100,000,000 | ||||||||||||
Issued shares — 36,524,730 and 31,014,575 at March 31, 2010 and 2009, respectively | 365 | 310 | 18 | % | ||||||||
Additional paid-in capital | 337,124 | 260,647 | 29 | % | ||||||||
Retained earnings | 156,165 | 134,951 | 16 | % | ||||||||
Treasury stock (shares at cost: 417 at March 31, 2010 and 2009) | (8 | ) | (8 | ) | — | |||||||
Accumulated other comprehensive income, net of taxes | 6,350 | 5,106 | 24 | % | ||||||||
Total stockholders’ equity | 499,996 | 471,990 | 6 | % | ||||||||
Total liabilities and stockholders’ equity | $ | 5,500,182 | $ | 5,013,104 | 10 | % | ||||||
5
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
(Dollars in thousands except per share data)
Three Months Ended | ||||||||
March 31 | ||||||||
2010 | 2009 | |||||||
Interest income | ||||||||
Interest and fees on loans | $ | 61,569 | $ | 51,912 | ||||
Securities | 2,726 | 3,851 | ||||||
Federal funds sold | 9 | 15 | ||||||
Deposits in other banks | 2 | 28 | ||||||
Total interest income | 64,306 | 55,806 | ||||||
Interest expense | ||||||||
Deposits | 7,758 | 11,579 | ||||||
Federal funds purchased | 365 | 618 | ||||||
Repurchase agreements | 4 | 14 | ||||||
Other borrowings | 47 | 1,178 | ||||||
Trust preferred subordinated debentures | 904 | 1,200 | ||||||
Total interest expense | 9,078 | 14,589 | ||||||
Net interest income | 55,228 | 41,217 | ||||||
Provision for credit losses | 13,500 | 8,500 | ||||||
Net interest income after provision for credit losses | 41,728 | 32,717 | ||||||
Non-interest income | ||||||||
Service charges on deposit accounts | 1,483 | 1,525 | ||||||
Trust fee income | 954 | 884 | ||||||
Bank owned life insurance (BOLI) income | 471 | 274 | ||||||
Brokered loan fees | 1,904 | 2,032 | ||||||
Equipment rental income | 1,344 | 1,456 | ||||||
Other | 792 | 729 | ||||||
Total non-interest income | 6,948 | 6,900 | ||||||
Non-interest expense | ||||||||
Salaries and employee benefits | 20,069 | 16,219 | ||||||
Net occupancy expense | 3,014 | 2,754 | ||||||
Leased equipment depreciation | 1,059 | 1,123 | ||||||
Marketing | 787 | 555 | ||||||
Legal and professional | 1,950 | 2,251 | ||||||
Communications and data processing | 1,016 | 836 | ||||||
FDIC insurance assessment | 1,868 | 1,547 | ||||||
Allowance and other carrying costs for OREO | 2,292 | 1,200 | ||||||
Other | 5,131 | 3,821 | ||||||
Total non-interest expense | 37,186 | 30,306 | ||||||
Income from continuing operations before income taxes | 11,490 | 9,311 | ||||||
Income tax expense | 3,890 | 3,186 | ||||||
Income from continuing operations | 7,600 | 6,125 | ||||||
Loss from discontinued operations (after-tax) | (55 | ) | (95 | ) | ||||
Net income | $ | 7,545 | $ | 6,030 | ||||
Basic earnings per common share: | ||||||||
Income from continuing operations | $ | .21 | $ | .17 | ||||
Net income | $ | .21 | $ | .16 | ||||
Diluted earnings per common share: | ||||||||
Income from continuing operations | $ | .21 | $ | .17 | ||||
Net income | $ | .21 | $ | .16 |
6
TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
(Dollars in thousands)
1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | ||||||||||||||||
2010 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||
Reserve for loan losses: | ||||||||||||||||||||
Beginning balance | $ | 67,931 | $ | 65,818 | $ | 54,286 | $ | 50,145 | $ | 45,365 | ||||||||||
Loans charged-off: | ||||||||||||||||||||
Commercial | 7,551 | 2,098 | 115 | 92 | 1,695 | |||||||||||||||
Real estate — construction | 420 | 4,051 | �� | 576 | 1,821 | 60 | ||||||||||||||
Real estate — term | 766 | 1,971 | 1,239 | 1,250 | 236 | |||||||||||||||
Consumer | — | 3 | 80 | — | 419 | |||||||||||||||
Leases | 594 | — | 72 | 3,724 | 226 | |||||||||||||||
Total | 9,331 | 8,123 | 2,082 | 6,887 | 2,636 | |||||||||||||||
Recoveries: | ||||||||||||||||||||
Commercial | 18 | 34 | 21 | 48 | 21 | |||||||||||||||
Real estate — construction | — | 6 | — | — | 7 | |||||||||||||||
Real estate — term | 8 | 53 | — | — | — | |||||||||||||||
Consumer | — | 7 | 16 | 5 | — | |||||||||||||||
Leases | 25 | 34 | 20 | — | — | |||||||||||||||
Total recoveries | 51 | 134 | 57 | 53 | 28 | |||||||||||||||
Net charge-offs | 9,280 | 7,989 | 2,025 | 6,834 | 2,608 | |||||||||||||||
Provision for loan losses | 13,054 | 10,102 | 13,557 | 10,975 | 7,388 | |||||||||||||||
Ending balance | $ | 71,705 | $ | 67,931 | $ | 65,818 | $ | 54,286 | $ | 50,145 | ||||||||||
Reserve for off-balance sheet credit losses: | ||||||||||||||||||||
Beginning balance | $ | 2,948 | $ | 2,550 | $ | 2,607 | $ | 2,582 | $ | 1,470 | ||||||||||
Provision for off-balance sheet credit losses | 446 | 398 | (57 | ) | 25 | 1,112 | ||||||||||||||
Ending balance | $ | 3,394 | $ | 2,948 | $ | 2,550 | $ | 2,607 | $ | 2,582 | ||||||||||
Total reserves for credit losses | $ | 75,099 | $ | 70,879 | $ | 68,368 | $ | 56,893 | $ | 52,727 | ||||||||||
Total provision for credit losses | $ | 13,500 | $ | 10,500 | $ | 13,500 | $ | 11,000 | $ | 8,500 | ||||||||||
Reserve to loans held for investment(2) | 1.61 | % | 1.52 | % | 1.53 | % | 1.29 | % | 1.25 | % | ||||||||||
Reserve to average loans held for investment(2) | 1.63 | % | 1.55 | % | 1.54 | % | 1.32 | % | 1.25 | % | ||||||||||
Net charge-offs to average loans(1)(2) | .85 | % | .72 | % | .19 | % | .66 | % | .26 | % | ||||||||||
Net charge-offs to average loans for last twelve months(1)(2) | .61 | % | .46 | % | .41 | % | .41 | % | .34 | % | ||||||||||
Total provision for credit losses to average loans(1)(2) | 1.24 | % | .95 | % | 1.26 | % | 1.07 | % | .86 | % | ||||||||||
Combined reserves for credit losses to loans held for investment(2) | 1.69 | % | 1.59 | % | 1.59 | % | 1.35 | % | 1.31 | % | ||||||||||
Non-performing assets (NPAs): (4) | ||||||||||||||||||||
Non-accrual loans | $ | 115,926 | $ | 95,625 | $ | 85,270 | $ | 49,592 | $ | 50,683 | ||||||||||
Other real estate owned (OREO) (5) | 28,865 | 27,264 | 34,671 | 31,404 | 27,501 | |||||||||||||||
Total | $ | 144,791 | $ | 122,889 | $ | 119,941 | $ | 80,996 | $ | 78,184 | ||||||||||
Non-accrual loans to loans(2) | 2.61 | % | 2.15 | % | 1.99 | % | 1.18 | % | 1.26 | % | ||||||||||
Total NPAs to loans plus OREO(2) | 3.24 | % | 2.74 | % | 2.77 | % | 1.91 | % | 1.93 | % | ||||||||||
Reserve for loan losses to non-accrual loans | .6 | x | .7 | x | .8 | x | 1.1 | x | 1.0 | x | ||||||||||
Restructured loans | $ | 10,700 | $ | — | $ | — | $ | — | $ | — | ||||||||||
Loans past due 90 days and still accruing(3) | $ | 2,390 | $ | 6,081 | $ | 7,569 | $ | 3,539 | $ | 4,637 | ||||||||||
Loans past due 90 days to loans(2) | .05 | % | .14 | % | .18 | % | .08 | % | .12 | % |
(1) | Interim period ratios are annualized. | |
(2) | Excludes loans held for sale. | |
(3) | At March 31, 2010, loans past due 90 days and still accruing includes premium finance loans of $2.0 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date. | |
(4) | At March 31, 2010, non-performing assets include $2.6 million of mortgage warehouse loans, which were transferred to the loans held for investment portfolio at lower of cost or market, and some were subsequently moved to OREO. | |
(5) | At March 31, 2010, OREO balance is net of $8.5 million valuation allowance. |
7
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in thousands)
(Dollars in thousands)
1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | ||||||||||||||||
2010 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||
Interest income | ||||||||||||||||||||
Interest and fees on loans | $ | 61,569 | $ | 62,174 | $ | 58,959 | $ | 56,455 | $ | 51,912 | ||||||||||
Securities | 2,726 | 2,957 | 3,226 | 3,544 | 3,851 | |||||||||||||||
Federal funds sold | 9 | 2 | 5 | 9 | 15 | |||||||||||||||
Deposits in other banks | 2 | 4 | 7 | 5 | 28 | |||||||||||||||
Total interest income | 64,306 | 65,137 | 62,197 | 60,013 | 55,806 | |||||||||||||||
Interest expense | ||||||||||||||||||||
Deposits | 7,758 | 8,560 | 8,916 | 8,769 | 11,579 | |||||||||||||||
Federal funds purchased | 365 | 460 | 586 | 740 | 618 | |||||||||||||||
Repurchase agreements | 4 | 11 | 14 | 14 | 14 | |||||||||||||||
Other borrowings | 47 | 76 | 125 | 570 | 1,178 | |||||||||||||||
Trust preferred subordinated debentures | 904 | 924 | 990 | 1,118 | 1,200 | |||||||||||||||
Total interest expense | 9,078 | 10,031 | 10,631 | 11,211 | 14,589 | |||||||||||||||
Net interest income | 55,228 | 55,106 | 51,566 | 48,802 | 41,217 | |||||||||||||||
Provision for credit losses | 13,500 | 10,500 | 13,500 | 11,000 | 8,500 | |||||||||||||||
Net interest income after provision for credit losses | 41,728 | 44,606 | 38,066 | 37,802 | 32,717 | |||||||||||||||
Non-interest income | ||||||||||||||||||||
Service charges on deposit accounts | 1,483 | 1,490 | 1,658 | 1,614 | 1,525 | |||||||||||||||
Trust fee income | 954 | 979 | 1,000 | 952 | 884 | |||||||||||||||
Bank owned life insurance (BOLI) income | 471 | 464 | 418 | 423 | 274 | |||||||||||||||
Brokered loan fees | 1,904 | 2,221 | 2,120 | 2,670 | 2,032 | |||||||||||||||
Equipment rental income | 1,344 | 1,357 | 1,291 | 1,453 | 1,456 | |||||||||||||||
Other | 792 | 1,300 | 646 | 304 | 729 | |||||||||||||||
Total non-interest income | 6,948 | 7,811 | 7,133 | 7,416 | 6,900 | |||||||||||||||
Non-interest expense | ||||||||||||||||||||
Salaries and employee benefits | 20,069 | 19,631 | 19,569 | 18,000 | 16,219 | |||||||||||||||
Net occupancy expense | 3,014 | 2,986 | 3,164 | 3,387 | 2,754 | |||||||||||||||
Leased equipment depreciation | 1,059 | 1,031 | 1,050 | 1,115 | 1,123 | |||||||||||||||
Marketing | 787 | 1,119 | 705 | 655 | 555 | |||||||||||||||
Legal and professional | 1,950 | 3,030 | 3,274 | 3,291 | 2,251 | |||||||||||||||
Communications and data processing | 1,016 | 993 | 935 | 979 | 836 | |||||||||||||||
FDIC insurance assessment | 1,868 | 1,972 | 1,452 | 3,493 | 1,547 | |||||||||||||||
Allowance and other carrying costs for OREO | 2,292 | 6,377 | 2,390 | 378 | 1,200 | |||||||||||||||
Other | 5,131 | 5,657 | 4,528 | 4,075 | 3,821 | |||||||||||||||
Total non-interest expense | 37,186 | 42,796 | 37,067 | 35,373 | 30,306 | |||||||||||||||
Income from continuing operations before income taxes | 11,490 | 9,621 | 8,132 | 9,845 | 9,311 | |||||||||||||||
Income tax expense | 3,890 | 3,194 | 2,779 | 3,363 | 3,186 | |||||||||||||||
Income from continuing operations | 7,600 | 6,427 | 5,353 | 6,482 | 6,125 | |||||||||||||||
Loss from discontinued operations (after-tax) | (55 | ) | (55 | ) | (41 | ) | (44 | ) | (95 | ) | ||||||||||
Net income | 7,545 | 6,372 | 5,312 | 6,438 | 6,030 | |||||||||||||||
Preferred stock dividends | — | — | — | 4,453 | 930 | |||||||||||||||
Net income available to common stockholders | $ | 7,545 | $ | 6,372 | $ | 5,312 | $ | 1,985 | $ | 5,100 | ||||||||||
8
TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY — UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
Continuing Operations
(Dollars in thousands)
Consolidated Daily Average Balances, Average Yields and Rates
Continuing Operations
(Dollars in thousands)
1st Quarter 2010 | 4th Quarter 2009 | 3rd Quarter 2009 | 2nd Quarter 2009 | 1st Quarter 2009 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average | Revenue/ | Yield/ | Average | Revenue/ | Yield/ | Average | Average | Average | Average | Revenue/ | Yield/ | Average | Revenue/ | Yield/ | ||||||||||||||||||||||||||||||||||||||||||||||
Balance | Expense(1) | Rate | Balance | Expense(1) | Rate | Balance | Balance | Balance | Balance | Expense(1) | Rate | Balance | Expense(1) | Rate | ||||||||||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities — Taxable | $ | 211,618 | $ | 2,341 | 4.49 | % | $ | 230,686 | $ | 2,560 | 4.40 | % | $ | 247,936 | $ | 2,813 | 4.50 | % | $ | 280,372 | $ | 3,124 | 4.47 | % | $ | 321,802 | $ | 3,431 | 4.32 | % | ||||||||||||||||||||||||||||||
Securities — Non-taxable(2) | 41,654 | 592 | 5.76 | % | 42,932 | 611 | 5.65 | % | 44,642 | 635 | 5.64 | % | 45,901 | 646 | 5.64 | % | 46,055 | 646 | 5.69 | % | ||||||||||||||||||||||||||||||||||||||||
Federal funds sold | 7,471 | 9 | 0.49 | % | 5,550 | 2 | 0.14 | % | 6,782 | 5 | 0.29 | % | 5,649 | 9 | 0.64 | % | 14,923 | 15 | 0.41 | % | ||||||||||||||||||||||||||||||||||||||||
Deposits in other banks | 12,457 | 2 | 0.07 | % | 12,916 | 4 | 0.12 | % | 12,649 | 7 | 0.22 | % | 12,268 | 5 | 0.16 | % | 11,207 | 28 | 1.01 | % | ||||||||||||||||||||||||||||||||||||||||
Loans held for sale | 457,459 | 5,490 | 4.87 | % | 601,793 | 7,286 | 4.80 | % | 539,889 | 6,836 | 5.02 | % | 656,462 | 7,727 | 4.72 | % | 587,401 | 6,487 | 4.48 | % | ||||||||||||||||||||||||||||||||||||||||
Loans held for investment | 4,413,960 | 56,079 | 5.15 | % | 4,384,692 | 54,888 | 4.97 | % | 4,264,202 | 52,123 | 4.85 | % | 4,124,937 | 48,728 | 4.74 | % | 4,022,180 | 45,425 | 4.58 | % | ||||||||||||||||||||||||||||||||||||||||
Less reserve for loan losses | 66,726 | — | — | 68,177 | — | — | 56,429 | — | — | 51,601 | — | — | 46,686 | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Loans, net of reserve | 4,804,693 | 61,569 | 5.20 | % | 4,918,308 | 62,174 | 5.02 | % | 4,747,662 | 58,959 | 4.92 | % | 4,729,798 | 56,455 | 4.78 | % | 4,562,895 | 51,912 | 4.61 | % | ||||||||||||||||||||||||||||||||||||||||
Total earning assets | 5,077,893 | 64,513 | 5.15 | % | 5,210,392 | 65,351 | 4.98 | % | 5,059,671 | 62,419 | 4.89 | % | 5,073,988 | 60,239 | 4.76 | % | 4,956,882 | 56,032 | 4.58 | % | ||||||||||||||||||||||||||||||||||||||||
Cash and other assets | 311,128 | 243,823 | 245,564 | 251,960 | 238,723 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 5,389,021 | $ | 5,454,215 | $ | 5,305,235 | $ | 5,325,948 | $ | 5,195,605 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transaction deposits | $ | 365,205 | $ | 264 | 0.29 | % | $ | 180,767 | $ | 85 | 0.19 | % | $ | 144,944 | $ | 58 | 0.16 | % | $ | 135,756 | $ | 55 | 0.16 | % | $ | 129,850 | $ | 44 | 0.14 | % | ||||||||||||||||||||||||||||||
Savings deposits | 1,773,201 | 3,524 | 0.81 | % | 1,620,659 | 3,569 | 0.87 | % | 1,377,712 | 3,090 | 0.89 | % | 974,275 | 2,003 | 0.82 | % | 745,355 | 1,420 | 0.77 | % | ||||||||||||||||||||||||||||||||||||||||
Time deposits | 840,820 | 2,787 | 1.34 | % | 1,111,899 | 3,454 | 1.23 | % | 1,284,220 | 4,245 | 1.31 | % | 1,082,691 | 5,105 | 1.89 | % | 1,277,824 | 8,066 | 2.56 | % | ||||||||||||||||||||||||||||||||||||||||
Deposits in foreign branches | 353,803 | 1,183 | 1.36 | % | 401,661 | 1,452 | 1.43 | % | 404,545 | 1,523 | 1.49 | % | 394,251 | 1,606 | 1.63 | % | 444,549 | 2,049 | 1.87 | % | ||||||||||||||||||||||||||||||||||||||||
Total interest bearing deposits | 3,333,029 | 7,758 | 0.94 | % | 3,314,986 | 8,560 | 1.02 | % | 3,211,421 | 8,916 | 1.10 | % | 2,586,973 | 8,769 | 1.36 | % | 2,597,578 | 11,579 | 1.81 | % | ||||||||||||||||||||||||||||||||||||||||
Other borrowings | 461,477 | 416 | 0.37 | % | 607,731 | 547 | 0.36 | % | 724,127 | 725 | 0.40 | % | 1,404,881 | 1,324 | 0.38 | % | 1,367,691 | 1,810 | 0.54 | % | ||||||||||||||||||||||||||||||||||||||||
Trust preferred subordinated debentures | 113,406 | 904 | 3.23 | % | 113,406 | 924 | 3.23 | % | 113,406 | 990 | 3.46 | % | 113,406 | 1,118 | 3.95 | % | 113,406 | 1,200 | 4.29 | % | ||||||||||||||||||||||||||||||||||||||||
Total interest bearing liabilities | 3,907,912 | 9,078 | 0.94 | % | 4,036,123 | 10,031 | 0.99 | % | 4,048,954 | 10,631 | 1.04 | % | 4,105,260 | 11,211 | 1.10 | % | 4,078,675 | 14,589 | 1.45 | % | ||||||||||||||||||||||||||||||||||||||||
Demand deposits | 956,359 | 914,266 | 764,557 | 724,487 | 636,704 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 28,643 | 18,787 | 15,617 | 18,899 | 23,619 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ equity | 496,107 | 485,039 | 476,107 | 477,302 | 456,607 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 5,389,021 | $ | 5,454,215 | $ | 5,305,235 | $ | 5,325,948 | $ | 5,195,605 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 55,435 | $ | 55,320 | $ | 51,788 | $ | 49,028 | $ | 41,443 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin | 4.43 | % | 4.21 | % | 4.06 | % | 3.88 | % | 3.39 | % |
(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. |
9