Exhibit 99.1
![(TEXAS CAPITAL BANCSHARES, INC. LOGO)](https://capedge.com/proxy/8-K/0000950134-07-001216/d43006d4300601.gif)
For immediate release
January 24, 2007
January 24, 2007
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 2006
DALLAS — January 24, 2007 — 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 2006.
• | EPS increased 15% for the quarter and the year | ||
• | Net income increased 8% for the quarter and 9% for the year | ||
• | Loans held for investment grew 31% | ||
• | Total deposits grew 23% |
“We are pleased to report another strong quarter and year in terms of growth in loans and deposits,” said Jody Grant, chairman and CEO. “With a good Texas economy, we are well positioned for profitable, quality growth in the coming year.”
FINANCIAL SUMMARY
(dollars and shares in thousands)
(dollars and shares in thousands)
Q4 2006 | Q4 2005 | % Change | ||||||||||
QUARTERLY OPERATING RESULTS | ||||||||||||
Net Income(1) | $ | 8,058 | $ | 7,489 | 8 | % | ||||||
Diluted EPS(1)(2) | $ | .31 | $ | .27 | 15 | % | ||||||
ROA(1) | .90 | % | 1.02 | % | ||||||||
ROE(1) | 13.09 | % | 14.05 | % | ||||||||
Diluted Shares | 26,374 | 26,737 |
2006 | 2005 | % Change | ||||||||||
ANNUAL OPERATING RESULTS | ||||||||||||
Net Income(1) | $ | 29,184 | $ | 26,776 | 9 | % | ||||||
Diluted EPS(1)(2) | $ | 1.10 | $ | .96 | 15 | % | ||||||
ROA(1) | .88 | % | .97 | % | ||||||||
ROE(1) | 12.70 | % | 13.09 | % | ||||||||
Diluted Shares | 26,469 | 26,645 | ||||||||||
BALANCE SHEET | ||||||||||||
Total Assets(1) | $ | 3,675,349 | $ | 3,003,430 | 22 | % | ||||||
Demand Deposits | 513,930 | 512,294 | — | |||||||||
Total Deposits | 3,069,330 | 2,495,179 | 23 | % | ||||||||
Loans Held for Investment | 2,722,097 | 2,075,961 | 31 | % | ||||||||
Total Loans(1) | 2,937,955 | 2,148,344 | 37 | % | ||||||||
Stockholders’ Equity | 250,668 | 215,523 | 16 | % |
(1) | From continuing operations | |
(2) | 2005 EPS assuming adoption of FAS 123R in 2005, which equated to $0.01 |
1
DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income and income from continuing operations of $8.1 million for the fourth quarter of 2006 compared to reported net income of $7.7 million and $7.5 million from continuing operations for the fourth quarter of 2005. Net income from continuing operations for the year ended 2006 was $29.2 million, compared to $26.8 million for the year ended 2005. On a fully diluted basis, earnings per share from continuing operations were $.31 for the three months ended December 31, 2006, compared to $.28 for the same quarter last year, an increase of 11 percent. On a fully diluted basis, assuming FAS 123R had been adopted during 2005, earnings per share in the fourth quarter of 2006 would have represented an increase of 15 percent on a continuing operations basis compared to $.27 for the fourth quarter of 2005. FAS 123R expense for the fourth quarter of 2006 is approximately $984,000, $649,000 after tax, representing $.02 on a fully diluted basis. Results of discontinued operations were $12,000 and $256,000 for the fourth quarter 2006 and 2005, respectively, and a net loss of $260,000 and net income of $416,000 for the year-to-date periods of 2006 and 2005, respectively. Due to the minor differences between reported earnings and income from continuing operations, the discussion below relates only to continuing operations.
Return on average equity was 13.09 percent and return on average assets was .90 percent for the fourth quarter of 2006, compared to 14.05 and 1.02 percent, respectively, for the fourth quarter of 2005. For the year-ended 2006, return on average equity was 12.70 percent and return on average assets was .88 percent for 2006, compared to 13.09 percent and .97 percent, respectively for 2005.
Net interest income was $31.9 million for the fourth quarter of 2006, compared to $26.3 million for the fourth quarter of 2005. The increase was due to an increase in average earning assets of $594.7 million over levels reported in the fourth quarter of 2005. The increase in average earning assets included a $614.2 million increase in average loans held for investment and an increase of $108.0 million in average loans held for sale, offset by a decrease of $108.4 million in average securities. The net interest margin in the fourth quarter of 2006 was 3.84 percent, a 3 basis point decrease from the fourth quarter of 2005 and a 4 basis point increase from the third quarter of 2006.
Average total deposits increased by $580.4 million from the fourth quarter of 2005 and by $99.2 from the third quarter of 2006. For the same periods, the average balance of demand deposits increased to $470.7 million from $458.7 million and increased $6.1 million from the third quarter of 2006. Average interest bearing liabilities increased $583.7 million from the fourth quarter of 2005, net of a $53.4 million decrease in other borrowings.
Key measures of credit quality remained favorable and consistent with previous guidance for 2006 operating results. In the fourth quarter of 2006, net charge-offs were $838,000, compared to net charge-offs of $11,000 in the fourth quarter of 2005 and net recoveries of $445,000 in the third quarter of 2006. For the most recent 12-month period, the net charge-off ratio was .08 percent. Non-accrual loans were $9.1 million, or .33 percent of loans, at the end of the fourth quarter of 2006, compared to $5.7 million, or .27 percent of loans, at the end of fourth quarter of 2005, and $6.4 million, or .25 percent at the end of the third quarter of 2006. Loans 90 days past due and still accruing were $2.2 million at the end of the fourth quarter of 2006 compared to $2.8 million at the end of the fourth quarter of 2005. At year-end 2006, the $2.2 million of past due loans included $1.5 million in premium finance loans and $571,000 of loans fully guaranteed by the U.S. Department of Agriculture. The premium finance 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 up to 180 days from the cancellation date. The Company recorded a $1 million provision for loan losses in the fourth quarter of 2006. Reserve coverage of historical losses, non-performing assets and classified loans remains strong. In management’s opinion, the reserve is sufficient to cover all reasonably expected losses in the portfolio and is derived from consistent application of the methodology for establishing the adequacy of reserves for Texas Capital Bank’s loan portfolio.
2
Non-interest income for the fourth quarter of 2006 increased $2.5 million, or 65 percent, to $6.3 million from $3.8 million in the fourth quarter of 2005. The increase is related to a $922,000 increase in insurance commission income from $648,000 to $1.6 million due to increased focus on the insurance business. Rental income on leased equipment increased $1.3 million related to expansion of our operating lease portfolio.
Non-interest expense for the fourth quarter of 2006 increased $6.2 million, or 33 percent, to $25.1 million from $18.8 million in the fourth quarter of 2005. The increase is primarily related to a $3.7 million increase in salaries and employee benefits to $14.5 million from $10.7 million, of which $984,000 relates to FAS 123R. The remaining increase in salaries and employee benefits resulted from an increase in commissions and incentives for insurance lines of business, the total number of employees related to the addition of the premium finance business and general business growth. Leased equipment depreciation increased $854,000 from $148,000 to $1.0 million in the fourth quarter of 2006 related to expansion of our operating lease portfolio. Occupancy expense increased $609,000 from $1.6 million to $2.2 million in the fourth quarter of 2006 relating to our general business growth.
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)
4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | ||||||||||||||||
2006 | 2006 | 2006 | 2006 | 2005 | ||||||||||||||||
CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||||||||
Interest income | $ | 66,576 | $ | 62,848 | $ | 57,434 | $ | 50,666 | $ | 46,815 | ||||||||||
Interest expense | 34,657 | 32,747 | 28,421 | 23,799 | 20,494 | |||||||||||||||
Net interest income | 31,919 | 30,101 | 29,013 | 26,867 | 26,321 | |||||||||||||||
Provision for loan losses | 1,000 | 750 | 2,250 | — | — | |||||||||||||||
Net interest income after provision for loan losses | 30,919 | 29,351 | 26,763 | 26,867 | 26,321 | |||||||||||||||
Non-interest income | 6,343 | 5,406 | 4,675 | 4,418 | 3,845 | |||||||||||||||
Non-interest expense | 25,070 | 22,563 | 21,968 | 20,893 | 18,844 | |||||||||||||||
Income from continuing operations before income taxes | 12,192 | 12,194 | 9,470 | 10,392 | 11,322 | |||||||||||||||
Income tax expense | 4,134 | 4,157 | 3,230 | 3,543 | 3,833 | |||||||||||||||
Net income from continuing operations (after-tax) | 8,058 | 8,037 | 6,240 | 6,849 | 7,489 | |||||||||||||||
Income (loss) from discontinued operations (after-tax) | 12 | (167 | ) | 101 | (206 | ) | 256 | |||||||||||||
Net income | $ | 8,070 | $ | 7,870 | $ | 6,341 | $ | 6,643 | $ | 7,745 | ||||||||||
Diluted EPS from continuing operations(1) | $ | .31 | $ | .30 | $ | .24 | $ | .26 | $ | .27 | ||||||||||
Diluted EPS(1) | $ | .31 | $ | .30 | $ | .24 | $ | .25 | $ | .28 | ||||||||||
Diluted shares | 26,373,726 | 26,411,834 | 26,524,552 | 26,567,893 | 26,736,858 | |||||||||||||||
CONSOLIDATED BALANCE SHEET DATA(2) | ||||||||||||||||||||
Total assets | $ | 3,675,349 | $ | 3,463,009 | $ | 3,381,099 | $ | 3,158,044 | $ | 3,003,430 | ||||||||||
Loans held for investment | 2,722,097 | 2,543,059 | 2,417,814 | 2,263,007 | 2,075,961 | |||||||||||||||
Loans held for sale | 215,858 | 151,255 | 133,112 | 95,397 | 72,383 | |||||||||||||||
Securities | 532,053 | 554,732 | 573,053 | 604,987 | 630,482 | |||||||||||||||
Demand deposits | 513,930 | 467,750 | 532,130 | 481,410 | 512,294 | |||||||||||||||
Total deposits | 3,069,330 | 2,776,648 | 2,922,494 | 2,463,719 | 2,495,179 | |||||||||||||||
Other borrowings | 211,559 | 338,801 | 173,730 | 441,991 | 265,721 | |||||||||||||||
Long-term debt | 113,406 | 113,406 | 72,168 | 46,394 | 46,394 | |||||||||||||||
Stockholders’ equity | 250,668 | 239,792 | 224,693 | 221,766 | 215,523 | |||||||||||||||
End of period shares | 26,065,124 | 26,031,829 | 25,940,874 | 25,854,651 | 25,771,718 | |||||||||||||||
Book value (excluding securities gains/losses) | $ | 9.82 | $ | 9.50 | $ | 9.20 | $ | 8.94 | $ | 8.68 | ||||||||||
SELECTED FINANCIAL RATIOS | ||||||||||||||||||||
From continuing operations | ||||||||||||||||||||
Net interest margin | 3.84 | % | 3.80 | % | 3.87 | % | 3.87 | % | 3.87 | % | ||||||||||
Return on average assets | .90 | % | .94 | % | .77 | % | .91 | % | 1.02 | % | ||||||||||
Return on average equity | 13.09 | % | 13.83 | % | 11.21 | % | 12.60 | % | 14.05 | % | ||||||||||
Non-interest income to earning assets | .76 | % | .68 | % | .62 | % | .63 | % | .56 | % | ||||||||||
Efficiency ratio | 65.5 | % | 63.5 | % | 65.2 | % | 66.8 | % | 62.5 | % | ||||||||||
Non-interest expense to earning assets | 3.00 | % | 2.83 | % | 2.91 | % | 2.98 | % | 2.74 | % | ||||||||||
From consolidated | ||||||||||||||||||||
Net interest margin | 3.84 | % | 4.01 | % | 4.10 | % | 4.09 | % | 4.13 | % | ||||||||||
Return on average assets | .90 | % | .91 | % | .78 | % | .88 | % | 1.04 | % | ||||||||||
Return on average equity | 13.11 | % | 13.54 | % | 11.39 | % | 12.22 | % | 14.53 | % | ||||||||||
Tier 1 capital ratio | 9.7 | % | 11.1 | % | 10.1 | % | 9.6 | % | 10.1 | % | ||||||||||
Total capital ratio | 11.2 | % | 11.8 | % | 10.7 | % | 10.3 | % | 10.8 | % | ||||||||||
Tier 1 leverage ratio | 9.2 | % | 10.2 | % | 9.1 | % | 8.6 | % | 8.7 | % |
(1) | 2005 EPS assuming adoption of FAS 123R in 2005, which equated to $0.01 | |
(2) | From continuing operations |
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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
(Dollars in thousands)
December 31, | December 31, | % | ||||||||||
2006 | 2005 | Change | ||||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 93,716 | $ | 137,840 | (32 | )% | ||||||
Securities, available-for-sale | 532,053 | 630,482 | (16 | )% | ||||||||
Loans held for sale | 215,858 | 72,383 | N/M | |||||||||
Loans held for sale from discontinued operations | — | 38,795 | (100 | )% | ||||||||
Loans held for investment (net of unearned income) | 2,722,097 | 2,075,961 | 31 | % | ||||||||
Less: Allowance for loan losses | 21,003 | 18,897 | 11 | % | ||||||||
Loans held for investment, net | 2,701,094 | 2,057,064 | 31 | % | ||||||||
Premises and equipment, net | 33,818 | 21,632 | 56 | % | ||||||||
Accrued interest receivable and other assets | 85,821 | 71,395 | 20 | % | ||||||||
Goodwill and intangibles, net | 12,989 | 12,634 | 3 | % | ||||||||
Total assets | $ | 3,675,349 | $ | 3,042,225 | 21 | % | ||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Liabilities: | ||||||||||||
Deposits: | ||||||||||||
Non-interest bearing | $ | 513,930 | $ | 512,294 | N/M | |||||||
Interest bearing | 1,670,956 | 1,436,111 | 16 | % | ||||||||
Interest bearing in foreign branches | 884,444 | 546,774 | 62 | % | ||||||||
Total deposits | 3,069,330 | 2,495,179 | 23 | % | ||||||||
Accrued interest payable | 5,781 | 4,778 | 21 | % | ||||||||
Other liabilities | 24,605 | 14,630 | 68 | % | ||||||||
Federal funds purchased | 165,955 | 103,497 | 60 | % | ||||||||
Repurchase agreements | 43,359 | 108,357 | (60 | )% | ||||||||
Other borrowings | 2,245 | 53,867 | (96 | )% | ||||||||
Long-term debt | 113,406 | 46,394 | N/M | |||||||||
Total liabilities | 3,424,681 | 2,826,702 | 21 | % | ||||||||
Stockholders’ equity: | ||||||||||||
Common stock, $.01 par value: | ||||||||||||
Authorized shares – 100,000,000 | ||||||||||||
Issued shares – 26,065,124 and 25,771,718 at December 31, 2006 and 2005, respectively | 261 | 258 | ||||||||||
Additional paid-in capital | 179,474 | 176,131 | ||||||||||
Retained earnings | 76,163 | 47,239 | ||||||||||
Treasury stock (shares at cost: 84,274 at December 31, 2006 and 2005, respectively) | (573 | ) | (573 | ) | ||||||||
Deferred compensation | 573 | 573 | ||||||||||
Accumulated other comprehensive loss | (5,230 | ) | (8,105 | ) | ||||||||
Total stockholders’ equity | 250,668 | 215,523 | 16 | % | ||||||||
Total liabilities and stockholders’ equity | $ | 3,675,349 | $ | 3,042,225 | 21 | % | ||||||
5
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands except per share data)
(In thousands except per share data)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31 | December 31 | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Interest income | ||||||||||||||||
Interest and fees on loans | $ | 60,280 | $ | 39,535 | $ | 211,092 | $ | 127,989 | ||||||||
Securities | 6,266 | 7,087 | 26,311 | 30,712 | ||||||||||||
Federal funds sold | 14 | 183 | 65 | 611 | ||||||||||||
Deposits in other banks | 16 | 10 | 56 | 147 | ||||||||||||
Total interest income | 66,576 | 46,815 | 237,524 | 159,459 | ||||||||||||
Interest expense | ||||||||||||||||
Deposits | 29,487 | 16,991 | 99,500 | 50,028 | ||||||||||||
Federal funds purchased | 2,104 | 919 | 8,198 | 3,588 | ||||||||||||
Repurchase agreements | 587 | 1,727 | 4,016 | 8,978 | ||||||||||||
Other borrowings | 393 | 68 | 2,471 | 877 | ||||||||||||
Long-term debt | 2,086 | 789 | 5,439 | 1,858 | ||||||||||||
Total interest expense | 34,657 | 20,494 | 119,624 | 65,329 | ||||||||||||
Net interest income | 31,919 | 26,321 | 117,900 | 94,130 | ||||||||||||
Provision for loan losses | 1,000 | — | 4,000 | — | ||||||||||||
Net interest income after provision for loan losses | 30,919 | 26,321 | 113,900 | 94,130 | ||||||||||||
Non-interest income | ||||||||||||||||
Service charges on deposit accounts | 865 | 833 | 3,306 | 3,223 | ||||||||||||
Trust fee income | 1,073 | 760 | 3,790 | 2,739 | ||||||||||||
Bank owned life insurance (BOLI) income | 301 | 290 | 1,134 | 1,136 | ||||||||||||
Brokered loan fees | 521 | 178 | 2,029 | 1,759 | ||||||||||||
Insurance commissions | 1,570 | 648 | 4,158 | 1,047 | ||||||||||||
Equipment rental income | 1,433 | 178 | 3,908 | 236 | ||||||||||||
Other | 580 | 958 | 2,517 | 2,415 | ||||||||||||
Total non-interest income | 6,343 | 3,845 | 20,842 | 12,555 | ||||||||||||
Non-interest expense | ||||||||||||||||
Salaries and employee benefits | 14,480 | 10,740 | 53,130 | 38,896 | ||||||||||||
Net occupancy expense | 2,170 | 1,561 | 8,184 | 6,056 | ||||||||||||
Leased equipment depreciation | 1,002 | 148 | 3,097 | 194 | ||||||||||||
Marketing | 809 | 806 | 3,161 | 2,974 | ||||||||||||
Legal and professional | 2,109 | 1,783 | 6,576 | 5,166 | ||||||||||||
Communications and data processing | 876 | 673 | 3,192 | 2,900 | ||||||||||||
Franchise taxes | 58 | 134 | 281 | 273 | ||||||||||||
Other | 3,566 | 2,999 | 12,873 | 9,667 | ||||||||||||
Total non-interest expense | 25,070 | 18,844 | 90,494 | 66,126 | ||||||||||||
Income from continuing operations before income taxes | 12,192 | 11,322 | 44,248 | 40,559 | ||||||||||||
Income tax expense | 4,134 | 3,833 | 15,064 | 13,783 | ||||||||||||
Income from continuing operations (after-tax) | 8,058 | 7,489 | 29,184 | 26,776 | ||||||||||||
Income (loss) from discontinued operations (after-tax) | 12 | 256 | (260 | ) | 416 | |||||||||||
Net income | $ | 8,070 | $ | 7,745 | $ | 28,924 | $ | 27,192 | ||||||||
Basic earnings per share: | ||||||||||||||||
Income from continuing operations(1) | $ | .31 | $ | .28 | $ | 1.12 | $ | 1.01 | ||||||||
Net income(1) | $ | .31 | $ | .29 | $ | 1.11 | $ | 1.02 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Income from continuing operations(1) | $ | .31 | $ | .27 | $ | 1.10 | $ | .96 | ||||||||
Net income(1) | $ | .31 | $ | .28 | $ | 1.09 | $ | .98 |
(1) | 2005 EPS assuming adoption of FAS 123R in 2005, which equated to $0.01 |
6
TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
(Dollars in thousands)
4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | ||||||||||||||||
2006 | 2006 | 2006 | 2006 | 2005 | ||||||||||||||||
Beginning balance | $ | 20,841 | $ | 19,646 | $ | 18,909 | $ | 18,897 | $ | 18,908 | ||||||||||
Loans charged-off: | ||||||||||||||||||||
Commercial | 837 | 70 | 1,618 | — | 60 | |||||||||||||||
Real estate | — | — | — | — | — | |||||||||||||||
Consumer | — | — | — | 3 | 8 | |||||||||||||||
Leases | 36 | — | 30 | 10 | 6 | |||||||||||||||
Total | 873 | 70 | 1,648 | 13 | 74 | |||||||||||||||
Recoveries: | ||||||||||||||||||||
Commercial | 12 | 441 | 5 | 4 | 3 | |||||||||||||||
Consumer | — | — | — | 1 | — | |||||||||||||||
Leases | 23 | 74 | 130 | 20 | 60 | |||||||||||||||
Total recoveries | 35 | 515 | 135 | 25 | 63 | |||||||||||||||
Net charge-offs (recoveries) | 838 | (445 | ) | 1,513 | (12 | ) | 11 | |||||||||||||
Provision for loan losses | 1,000 | 750 | 2,250 | — | — | |||||||||||||||
Ending balance | $ | 21,003 | $ | 20,841 | $ | 19,646 | $ | 18,909 | $ | 18,897 | ||||||||||
Reserve to loans held for investment(2) | .77 | % | .82 | % | .81 | % | .84 | % | .91 | % | ||||||||||
Reserve to average loans held for investment(2) | .80 | % | .84 | % | .83 | % | .87 | % | .94 | % | ||||||||||
Net charge-offs (recoveries) to average loans(1) (2) | .13 | % | (.07 | )% | .26 | % | (.00 | )% | .00 | % | ||||||||||
Net charge-offs (recoveries) to average loans for last twelve months(1) (2) | .08 | % | .05 | % | .07 | % | (.01 | )% | (.01 | )% | ||||||||||
Provision for loan losses to average loans(1) (2) | .15 | % | .12 | % | .38 | % | — | — | ||||||||||||
Recoveries to gross charge-offs | 4.01 | % | 735.71 | % | 8.19 | % | 192.31 | % | 85.14 | % | ||||||||||
Reserve as a multiple of net charge-offs | 25.1 | x | N/M | 13.0 | x | N/M | 1,717.9 | x | ||||||||||||
Non-performing loans: | ||||||||||||||||||||
Loans past due (90 days)(3) | $ | 2,192 | $ | 2,627 | $ | 2,746 | $ | 2,824 | $ | 2,795 | ||||||||||
Non-accrual | 9,088 | 6,432 | 5,063 | 6,032 | 5,657 | |||||||||||||||
Total | $ | 11,280 | $ | 9,059 | $ | 7,809 | $ | 8,856 | $ | 8,452 | ||||||||||
Other real estate owned | $ | 882 | $ | 882 | $ | 89 | $ | 89 | $ | — | ||||||||||
Reserve to non-performing loans | 1.9 | x | 2.3 | x | 2.5 | x | 2.1 | x | 2.2 | x | ||||||||||
Reserve to non-accrual loans | 2.3 | x | 3.2 | x | 3.9 | x | 3.1 | x | 3.3 | x | ||||||||||
Reserve to non-performing assets | 1.7 | x | 2.1 | x | 2.5 | x | 2.1 | x | 2.2 | x | ||||||||||
Non-accrual loans to loans(2) | .33 | % | .25 | % | .21 | % | .27 | % | .27 | % | ||||||||||
Loans past due 90 days to loans(2) | .08 | % | .10 | % | .11 | % | .12 | % | .13 | % | ||||||||||
Non-performing loans to loans(2) | .41 | % | .36 | % | .32 | % | .39 | % | .41 | % |
(1) | Interim period ratios are annualized. | |
(2) | Excludes loans held for sale. | |
(3) | At December 31, 2006, loans past due 90 days and still accruing includes premium finance loans of $1.5 million (69% of total). 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 up to 180 days from the cancellation date. The total also includes $571,000 of loans fully guaranteed by the U.S. Department of Agriculture. |
7
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(Dollars in thousands)
(Dollars in thousands)
4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | ||||||||||||||||
2006 | 2006 | 2006 | 2006 | 2005 | ||||||||||||||||
Interest income | ||||||||||||||||||||
Interest and fees on loans | $ | 60,280 | $ | 56,320 | $ | 50,692 | $ | 43,800 | $ | 39,535 | ||||||||||
Securities | 6,266 | 6,488 | 6,726 | 6,831 | 7,087 | |||||||||||||||
Federal funds sold | 14 | 24 | 3 | 24 | 183 | |||||||||||||||
Deposits in other banks | 16 | 16 | 13 | 11 | 10 | |||||||||||||||
Total interest income | 66,576 | 62,848 | 57,434 | 50,666 | 46,815 | |||||||||||||||
Interest expense | ||||||||||||||||||||
Deposits | 29,487 | 28,337 | 22,369 | 19,307 | 16,991 | |||||||||||||||
Federal funds purchased | 2,104 | 1,753 | 2,433 | 1,908 | 919 | |||||||||||||||
Repurchase agreements | 587 | 665 | 1,562 | 1,202 | 1,727 | |||||||||||||||
Other borrowings | 393 | 634 | 890 | 554 | 68 | |||||||||||||||
Long-term debt | 2,086 | 1,358 | 1,167 | 828 | 789 | |||||||||||||||
Total interest expense | 34,657 | 32,747 | 28,421 | 23,799 | 20,494 | |||||||||||||||
Net interest income | 31,919 | 30,101 | 29,013 | 26,867 | 26,321 | |||||||||||||||
Provision for loan losses | 1,000 | 750 | 2,250 | – | – | |||||||||||||||
Net interest income after provision for loan losses | 30,919 | 29,351 | 26,763 | 26,867 | 26,321 | |||||||||||||||
Non-interest income | ||||||||||||||||||||
Service charges on deposit accounts | 865 | 780 | 805 | 856 | 833 | |||||||||||||||
Trust fee income | 1,073 | 1,008 | 866 | 843 | 760 | |||||||||||||||
Bank owned life insurance (BOLI) income | 301 | 255 | 292 | 286 | 290 | |||||||||||||||
Brokered loan fees | 521 | 656 | 483 | 369 | 178 | |||||||||||||||
Insurance commissions | 1,570 | 1,057 | 808 | 723 | 648 | |||||||||||||||
Equipment rental income | 1,433 | 1,147 | 815 | 513 | 178 | |||||||||||||||
Other | 580 | 503 | 606 | 828 | 958 | |||||||||||||||
Total non-interest income | 6,343 | 5,406 | 4,675 | 4,418 | 3,845 | |||||||||||||||
Non-interest expense | ||||||||||||||||||||
Salaries and employee benefits | 14,480 | 13,181 | 13,067 | 12,402 | 10,740 | |||||||||||||||
Net occupancy expense | 2,170 | 1,960 | 1,984 | 2,070 | 1,561 | |||||||||||||||
Leased equipment depreciation | 1,002 | 928 | 786 | 381 | 148 | |||||||||||||||
Marketing | 809 | 712 | 924 | 716 | 806 | |||||||||||||||
Legal and professional | 2,109 | 1,634 | 1,365 | 1,468 | 1,783 | |||||||||||||||
Communications and data processing | 876 | 861 | 756 | 699 | 673 | |||||||||||||||
Franchise taxes | 58 | 58 | 104 | 61 | 134 | |||||||||||||||
Other | 3,566 | 3,229 | 2,982 | 3,096 | 2,999 | |||||||||||||||
Total non-interest expense | 25,070 | 22,563 | 21,968 | 20,893 | 18,844 | |||||||||||||||
Income from continuing operations before income taxes | 12,192 | 12,194 | 9,470 | 10,392 | 11,322 | |||||||||||||||
Income tax expense | 4,134 | 4,157 | 3,230 | 3,543 | 3,833 | |||||||||||||||
Income from continuing operations (after-tax) | 8,058 | 8,037 | 6,240 | 6,849 | 7,489 | |||||||||||||||
Income (loss) from discontinued operations (after-tax) | 12 | (167 | ) | 101 | (206 | ) | 256 | |||||||||||||
Net income | $ | 8,070 | $ | 7,870 | $ | 6,341 | $ | 6,643 | $ | 7,745 | ||||||||||
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)
4th Quarter 2006 | 3rd Quarter 2006 | 2nd Quarter 2006 | 1st Quarter 2006 | 4th Quarter 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average | Revenue/ | Yield/ | Average | Revenue/ | Yield/ | Average | Revenue/ | Yield/ | Average | Revenue/ | Yield/ | Average | Revenue/ | Yield/ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance | Expense(1) | Rate | Balance | Expense(1) | Rate | Balance | Expense(1) | Rate | Balance | Expense(1) | Rate | Balance | Expense(1) | Rate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities – Taxable | $ | 490,001 | $ | 5,830 | 4.72 | % | $ | 507,156 | $ | 6,055 | 4.74 | % | $ | 537,934 | $ | 6,291 | 4.69 | % | $ | 567,653 | $ | 6,396 | 4.57 | % | $ | 598,280 | $ | 6,653 | 4.41 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Securities – Non-taxable(2) | 48,573 | 669 | 5.46 | % | 48,595 | 666 | 5.44 | % | 48,614 | 669 | 5.52 | % | 48,635 | 669 | 5.58 | % | 48,655 | 668 | 5.45 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal funds sold | 1,004 | 14 | 5.53 | % | 1,750 | 24 | 5.44 | % | 200 | 3 | 6.02 | % | 2,233 | 24 | 4.36 | % | 18,553 | 183 | 3.91 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits in other banks | 1,207 | 16 | 5.26 | % | 1,498 | 16 | 4.24 | % | 908 | 13 | 5.74 | % | 1,079 | 11 | 4.13 | % | 980 | 10 | 4.05 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans held for sale | 178,383 | 3,189 | 7.09 | % | 150,225 | 2,747 | 7.25 | % | 103,483 | 1,752 | 6.79 | % | 71,282 | 1,154 | 6.57 | % | 70,355 | 1,141 | 6.43 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans held for investment | 2,620,307 | 57,091 | 8.64 | % | 2,479,057 | 53,573 | 8.57 | % | 2,360,189 | 48,940 | 8.32 | % | 2,168,410 | 42,646 | 7.98 | % | 2,006,132 | 38,394 | 7.59 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less reserve for loan losses | 20,751 | – | – | 19,823 | – | – | 19,129 | – | – | 18,898 | – | – | 18,924 | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans, net of reserve | 2,777,939 | 60,280 | 8.61 | % | 2,609,459 | 56,320 | 8.56 | % | 2,444,543 | 50,692 | 8.32 | % | 2,220,794 | 43,800 | 8.00 | % | 2,057,563 | 39,535 | 7.62 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total earning assets | 3,318,724 | 66,809 | 7.99 | % | 3,168,458 | 63,081 | 7.90 | % | 3,032,199 | 57,668 | 7.63 | % | 2,840,394 | 50,900 | 7.27 | % | 2,724,031 | 47,049 | 6.85 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and other assets | 225,092 | 217,663 | 208,502 | 205,999 | 189,004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 3,543,816 | $ | 3,386,121 | $ | 3,240,701 | $ | 3,046,393 | $ | 2,913,035 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transaction deposits | $ | 97,428 | $ | 276 | 1.12 | % | $ | 99,549 | $ | 284 | 1.13 | % | $ | 112,046 | $ | 310 | 1.11 | % | $ | 117,685 | $ | 312 | 1.08 | % | $ | 108,245 | $ | 282 | 1.03 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Savings deposits | 879,452 | 10,063 | 4.54 | % | 769,271 | 8,703 | 4.49 | % | 701,007 | 7,257 | 4.15 | % | 671,102 | 6,195 | 3.74 | % | 691,575 | 5,800 | 3.33 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Time deposits | 598,258 | 7,658 | 5.08 | % | 643,708 | 8,069 | 4.97 | % | 684,630 | 7,784 | 4.56 | % | 635,250 | 6,664 | 4.25 | % | 564,405 | 5,561 | 3.91 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits in foreign branches | 875,851 | 11,490 | 5.20 | % | 845,338 | 11,281 | 5.29 | % | 562,223 | 7,018 | 5.01 | % | 541,084 | 6,136 | 4.60 | % | 518,316 | 5,348 | 4.09 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total interest bearing deposits | 2,450,989 | 29,487 | 4.77 | % | 2,357,866 | 28,337 | 4.77 | % | 2,059,906 | 22,369 | 4.36 | % | 1,965,121 | 19,307 | 3.98 | % | 1,882,541 | 16,991 | 3.58 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other borrowings | 242,407 | 3,084 | 5.05 | % | 238,350 | 3,052 | 5.08 | % | 405,424 | 4,885 | 4.83 | % | 350,084 | 3,664 | 4.24 | % | 295,823 | 2,714 | 3.64 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | 113,406 | 2,086 | 7.30 | % | 73,064 | 1,358 | 7.37 | % | 64,521 | 1,167 | 7.25 | % | 46,394 | 828 | 7.24 | % | 44,716 | 789 | 7.00 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total interest bearing liabilities | 2,806,802 | 34,657 | 4.90 | % | 2,669,280 | 32,747 | 4.87 | % | 2,529,851 | 28,421 | 4.51 | % | 2,361,599 | 23,799 | 4.09 | % | 2,223,080 | 20,494 | 3.66 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Demand deposits | 470,701 | 464,645 | 468,449 | 445,012 | 458,743 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 22,106 | 21,633 | 19,055 | 19,309 | 19,701 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ equity | 244,207 | 230,563 | 223,346 | 220,473 | 211,511 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 3,543,816 | $ | 3,386,121 | $ | 3,240,701 | $ | 3,046,393 | $ | 2,913,035 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 32,152 | $ | 30,334 | $ | 29,247 | $ | 27,101 | $ | 26,555 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin | 3.84 | % | 3.80 | % | 3.87 | % | 3.87 | % | 3.87 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional information from discontinued operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans held for sale | $ | 27,422 | $ | 33,806 | $ | 30,748 | $ | 29,527 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowed funds | 27,422 | 33,806 | 30,748 | 29,527 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 1,972 | $ | 2,113 | $ | 1,854 | $ | 2,140 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin – consolidated | 4.01 | % | 4.10 | % | 4.09 | % | 4.13 | % |
(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. |