Exhibit 99.1
For immediate release
October 17, 2007
October 17, 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 Q3 2007
DALLAS — October 17, 2007 — Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the third quarter of 2007.
• | EPS increased 10% for the quarter | ||
• | Net income increased 10% | ||
• | Loans held for investment grew 30% | ||
• | Total deposits grew 19% |
“We are pleased to report another very solid quarter highlighted by record growth in loans,” said Jody Grant, chairman and CEO. “This extraordinary loan growth, plus our success in controlling our growth in non-interest expenses, has significantly contributed to the growth in earnings per share. These results reflect the underlying strength and diversity of the Texas economy, which have more than offset any weakness in a particular sector.”
FINANCIAL SUMMARY
(dollars and shares in thousands)
(dollars and shares in thousands)
Q3 2007 | Q3 2006 | % Change | ||||||||||
QUARTERLY OPERATING RESULTS | ||||||||||||
Net Income(1) | $ | 8,844 | $ | 8,037 | 10 | % | ||||||
Diluted EPS(1) | $ | .33 | $ | .30 | 10 | % | ||||||
ROA(1) | .88 | % | .94 | % | ||||||||
ROE(1) | 12.73 | % | 13.83 | % | ||||||||
Diluted Shares | 26,767 | 26,412 | ||||||||||
BALANCE SHEET | ||||||||||||
Total Assets(1) | $ | 4,077,290 | $ | 3,463,009 | 18 | % | ||||||
Demand Deposits | 471,109 | 467,750 | 1 | % | ||||||||
Total Deposits | 3,295,707 | 2,776,648 | 19 | % | ||||||||
Loans Held for Investment | 3,296,039 | 2,543,059 | 30 | % | ||||||||
Total Loans(1) | 3,414,260 | 2,694,314 | 27 | % | ||||||||
Stockholders’ Equity | 284,209 | 239,792 | 19 | % |
(1) | From continuing operations |
1
DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income from continuing operations of $8.8 million for the third quarter of 2007 compared to $8.0 million for the third quarter of 2006. On a fully diluted basis, earnings per share from continuing operations were $.33 for the three months ended September 30, 2007, compared to $.30 for the same quarter last year, an increase of 10 percent. Results of discontinued operations were net losses of $602,000 and $167,000 for the third quarters 2007 and 2006, respectively. The discussion below relates only to continuing operations.
Texas Capital Bancshares, Inc. reported net income from continuing operations of $8.8 million for the third quarter of 2007 compared to $8.0 million for the third quarter of 2006. On a fully diluted basis, earnings per share from continuing operations were $.33 for the three months ended September 30, 2007, compared to $.30 for the same quarter last year, an increase of 10 percent. Results of discontinued operations were net losses of $602,000 and $167,000 for the third quarters 2007 and 2006, respectively. The discussion below relates only to continuing operations.
Return on average equity was 12.73 percent and return on average assets was .88 percent for the third quarter of 2007, compared to 13.83 and .94 percent, respectively, for the third quarter of 2006.
Net interest income was $36.8 million for the third quarter of 2007, compared to $30.1 million for the third quarter of 2006. The increase was due to an increase in average earning assets of $635.9 million over levels reported in the third quarter of 2006. The increase in average earning assets included a $716.4 million increase in average loans held for investment offset by a slight decrease in average loans held for sale and a decrease of $75.0 million in average securities. The net interest margin in the third quarter of 2007 was 3.86 percent, a 6 basis point increase from the third quarter of 2006 and a 3 basis point increase from the second quarter of 2007.
Average total deposits increased by $390.1 million from the third quarter of 2006 and increased by $244.2 million from the second quarter of 2007. For the same periods, the average balance of demand deposits increased by 1 percent to $469.6 million from $464.6 million during the third quarter of 2006 and increased $11.5 million, or 3 percent, from the second quarter of 2007. Average interest bearing liabilities increased $555.9 million from the third quarter of 2006, which included a $130.5 million increase in other borrowings.
Key measures of credit quality remained favorable. In the third quarter of 2007, net charge-offs were $59,000, compared to net recoveries of $445,000 in the third quarter of 2006 and net charge-offs of $27,000 in the second quarter of 2007. For the year-to-date, the Company has realized a net recovery of $300,000, and for the most recent 12-months, net charge-offs were $538,000. Non-accrual loans were $8.7 million, or .26 percent of loans at the end of the third quarter of 2007, compared to $6.4 million, or .25 percent of loans at the end of third quarter of 2006, and $8.7 million, or .28 percent at the end of the second quarter of 2007. Loans 90 days past due and still accruing were $4.4 million at the end of the third quarter of 2007 compared to $2.6 million at the end of the third quarter of 2006. At September 30, 2007, the $4.4 million of past due loans included $1.3 million in premium finance loans. The premium finance loans are generally 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. The Company recorded a $2.0 million provision for loan losses in the third quarter of 2007, compared to $750,000 in the third quarter of 2006 and $1.5 million in the second quarter of 2007. Reserve coverage of historical losses and non-performing assets remains strong. 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.
Non-interest income for the third quarter of 2007 increased $169,000, or 4 percent, to $4.6 million from $4.5 million in the third quarter of 2006. The increase is primarily related to a $434,000 increase in rental income on leased equipment from $1.1 million to $1.6 million related to expansion of our operating lease portfolio. Service charge income
2
increased $309,000 and trust fee income increased $174,000. Offsetting these increases was reduced contribution from mortgage warehouse, including brokered loan fees and mark to market.
Non-interest expense for the third quarter of 2007 increased $4.3 million, or 20 percent, to $25.9 million from $21.6 million in the third quarter of 2006. The increase is primarily related to a $2.8 million increase in salaries and employee benefits to $15.3 million from $12.5 million, of which $558,000 relates to an increase in FAS 123R expense. The remaining increase in salaries and employee benefits resulted from growth, including higher level of variable incentives. Expansion of the operating lease portfolio resulted in an increase of $383,000 in equipment depreciation expense to $1.3 million in the third quarter of 2007 from $928,000 in the third quarter of 2006.
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.
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)
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | ||||||||||||||||
2007 | 2007 | 2007 | 2006 | 2006 | ||||||||||||||||
CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||||||||
Interest income | $ | 76,368 | $ | 72,419 | $ | 67,163 | $ | 66,178 | $ | 62,848 | ||||||||||
Interest expense | 39,609 | 37,948 | 35,496 | 34,346 | 32,747 | |||||||||||||||
Net interest income | 36,759 | 34,471 | 31,667 | 31,832 | 30,101 | |||||||||||||||
Provision for loan losses | 2,000 | 1,500 | 1,200 | 1,000 | 750 | |||||||||||||||
Net interest income after provision for loan losses | 34,759 | 32,971 | 30,467 | 30,832 | 29,351 | |||||||||||||||
Non-interest income | 4,647 | 5,288 | 5,136 | 4,833 | 4,478 | |||||||||||||||
Non-interest expense | 25,894 | 25,411 | 24,095 | 23,993 | 21,635 | |||||||||||||||
Income from continuing operations before income taxes | 13,512 | 12,848 | 11,508 | 11,672 | 12,194 | |||||||||||||||
Income tax expense | 4,668 | 4,463 | 3,922 | 3,958 | 4,157 | |||||||||||||||
Net income from continuing operations | 8,844 | 8,385 | 7,586 | 7,714 | 8,037 | |||||||||||||||
Income (loss) from discontinued operations (after-tax) | (602 | ) | (180 | ) | 36 | 356 | (167 | ) | ||||||||||||
Net income | $ | 8,242 | $ | 8,205 | $ | 7,622 | $ | 8,070 | $ | 7,870 | ||||||||||
Diluted EPS from continuing operations | $ | .33 | $ | .31 | $ | .29 | $ | .29 | $ | .30 | ||||||||||
Diluted EPS | $ | .31 | $ | .31 | $ | .29 | $ | .31 | $ | .30 | ||||||||||
Diluted shares | 26,766,788 | 26,711,437 | 26,440,556 | 26,373,726 | 26,411,834 | |||||||||||||||
CONSOLIDATED BALANCE SHEET DATA(1) | ||||||||||||||||||||
Total assets | $ | 4,077,290 | $ | 3,943,518 | $ | 3,807,232 | $ | 3,658,505 | $ | 3,463,009 | ||||||||||
Loans held for investment | 3,296,039 | 3,091,657 | 2,885,963 | 2,722,097 | 2,543,059 | |||||||||||||||
Loans held for sale | 118,221 | 176,022 | 208,074 | 199,014 | 151,255 | |||||||||||||||
Securities | 476,448 | 490,967 | 508,296 | 532,053 | 554,732 | |||||||||||||||
Demand deposits | 471,109 | 495,010 | 507,686 | 513,930 | 467,750 | |||||||||||||||
Total deposits | 3,295,707 | 3,112,560 | 3,086,737 | 3,069,330 | 2,776,648 | |||||||||||||||
Other borrowings | 358,510 | 421,668 | 331,118 | 211,559 | 338,801 | |||||||||||||||
Long-term debt | 113,406 | 113,406 | 113,406 | 113,406 | 113,406 | |||||||||||||||
Stockholders’ equity | 284,209 | 270,097 | 263,616 | 253,515 | 239,792 | |||||||||||||||
End of period shares | 26,243,149 | 26,189,562 | 26,101,994 | 26,065,124 | 26,031,829 | |||||||||||||||
Book value (excluding securities gains/losses) | $ | 11.00 | $ | 10.64 | $ | 10.27 | $ | 9.93 | $ | 9.50 | ||||||||||
Tangible book value | $ | 10.53 | $ | 10.01 | $ | 9.79 | $ | 9.23 | $ | 8.71 | ||||||||||
SELECTED FINANCIAL RATIOS | ||||||||||||||||||||
From continuing operations | ||||||||||||||||||||
Net interest margin | 3.86 | % | 3.83 | % | 3.78 | % | 3.86 | % | 3.80 | % | ||||||||||
Return on average assets | .88 | % | .88 | % | .84 | % | .87 | % | .94 | % | ||||||||||
Return on average equity | 12.73 | % | 12.59 | % | 12.12 | % | 12.53 | % | 13.83 | % | ||||||||||
Non-interest income to earning assets | .48 | % | .58 | % | .61 | % | .58 | % | .56 | % | ||||||||||
Efficiency ratio | 62.5 | % | 63.9 | % | 65.5 | % | 65.4 | % | 62.6 | % | ||||||||||
Non-interest expense to earning assets | 2.70 | % | 2.80 | % | 2.86 | % | 2.89 | % | 2.71 | % | ||||||||||
From consolidated | ||||||||||||||||||||
Net interest margin | 3.86 | % | 3.84 | % | 3.77 | % | 3.84 | % | 4.01 | % | ||||||||||
Return on average assets | .82 | % | .86 | % | .84 | % | .90 | % | .91 | % | ||||||||||
Return on average equity | 11.86 | % | 12.32 | % | 12.18 | % | 13.11 | % | 13.54 | % | ||||||||||
Tier 1 capital ratio | 9.6 | % | 9.8 | % | 9.8 | % | 9.7 | % | 11.1 | % | ||||||||||
Total capital ratio | 10.7 | % | 10.9 | % | 11.1 | % | 11.2 | % | 11.8 | % | ||||||||||
Tier 1 leverage ratio | 9.4 | % | 9.4 | % | 9.5 | % | 9.2 | % | 10.2 | % |
(1) | From continuing operations |
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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
September 30, | September 30, | % | ||||||||||
2007 | 2006 | Change | ||||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 75,724 | $ | 113,461 | (33 | )% | ||||||
Securities, available-for-sale | 476,448 | 554,732 | (14 | )% | ||||||||
Loans held for sale | 118,221 | 151,255 | (22 | )% | ||||||||
Loans held for sale from discontinued operations | 863 | 31,004 | (97 | )% | ||||||||
Loans held for investment (net of unearned income) | 3,296,039 | 2,543,059 | 30 | % | ||||||||
Less: Allowance for loan losses | 26,003 | 20,841 | 25 | % | ||||||||
Loans held for investment, net | 3,270,036 | 2,522,218 | 30 | % | ||||||||
Premises and equipment, net | 42,224 | 31,605 | 34 | % | ||||||||
Accrued interest receivable and other assets | 86,746 | 76,616 | 13 | % | ||||||||
Goodwill and intangibles, net | 7,891 | 13,122 | (40 | )% | ||||||||
Total assets | $ | 4,078,153 | $ | 3,494,013 | 17 | % | ||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Liabilities: | ||||||||||||
Deposits: | ||||||||||||
Non-interest bearing | $ | 471,109 | $ | 467,750 | 1 | % | ||||||
Interest bearing | 1,788,809 | 1,490,010 | 20 | % | ||||||||
Interest bearing in foreign branches | 1,035,789 | 818,888 | 26 | % | ||||||||
Total deposits | 3,295,707 | 2,776,648 | 19 | % | ||||||||
Accrued interest payable | 7,312 | 5,188 | 41 | % | ||||||||
Other liabilities | 19,009 | 20,178 | (6 | )% | ||||||||
Federal funds purchased | 216,744 | 181,780 | 19 | % | ||||||||
Repurchase agreements | 7,820 | 55,844 | (86 | )% | ||||||||
Other borrowings | 133,946 | 101,177 | 32 | % | ||||||||
Long-term debt | 113,406 | 113,406 | — | |||||||||
Total liabilities | 3,793,944 | 3,254,221 | 17 | % | ||||||||
Stockholders’ equity: | ||||||||||||
Common stock, $.01 par value: | ||||||||||||
Authorized shares — 100,000,000 | ||||||||||||
Issued shares — 26,243,149 and 26,031,829 at September 30, 2007 and 2006, respectively | 263 | 261 | ||||||||||
Additional paid-in capital | 188,265 | 179,017 | ||||||||||
Retained earnings | 100,232 | 68,093 | ||||||||||
Treasury stock (shares at cost: 84,691 and 84,274 at September 30, 2007 and 2006, respectively) | (581 | ) | (573 | ) | ||||||||
Deferred compensation | 573 | 573 | ||||||||||
Accumulated other comprehensive loss | (4,543 | ) | (7,579 | ) | ||||||||
Total stockholders’ equity | 284,209 | 239,792 | 19 | % | ||||||||
Total liabilities and stockholders’ equity | $ | 4,078,153 | $ | 3,494,013 | 17 | % | ||||||
5
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands except per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30 | September 30 | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Interest income | ||||||||||||||||
Interest and fees on loans | $ | 70,719 | $ | 56,320 | $ | 198,419 | $ | 150,812 | ||||||||
Securities | 5,623 | 6,488 | 17,460 | 20,045 | ||||||||||||
Federal funds sold | 12 | 24 | 27 | 51 | ||||||||||||
Deposits in other banks | 14 | 16 | 44 | 40 | ||||||||||||
Total interest income | 76,368 | 62,848 | 215,950 | 170,948 | ||||||||||||
Interest expense | ||||||||||||||||
Deposits | 32,690 | 28,337 | 93,311 | 70,013 | ||||||||||||
Federal funds purchased | 3,554 | 1,753 | 9,474 | 6,094 | ||||||||||||
Repurchase agreements | 175 | 665 | 839 | 3,429 | ||||||||||||
Other borrowings | 1,102 | 634 | 3,231 | 2,078 | ||||||||||||
Long-term debt | 2,088 | 1,358 | 6,198 | 3,353 | ||||||||||||
Total interest expense | 39,609 | 32,747 | 113,053 | 84,967 | ||||||||||||
Net interest income | 36,759 | 30,101 | 102,897 | 85,981 | ||||||||||||
Provision for loan losses | 2,000 | 750 | 4,700 | 3,000 | ||||||||||||
Net interest income after provision for loan losses | 34,759 | 29,351 | 98,197 | 82,981 | ||||||||||||
Non-interest income | ||||||||||||||||
Service charges on deposit accounts | 1,089 | 780 | 2,935 | 2,441 | ||||||||||||
Trust fee income | 1,182 | 1,008 | 3,453 | 2,717 | ||||||||||||
Bank owned life insurance (BOLI) income | 288 | 255 | 887 | 833 | ||||||||||||
Brokered loan fees | 452 | 656 | 1,505 | 1,508 | ||||||||||||
Equipment rental income | 1,581 | 1,147 | 4,533 | 2,475 | ||||||||||||
Other | 55 | 632 | 1,758 | 2,234 | ||||||||||||
Total non-interest income | 4,647 | 4,478 | 15,071 | 12,208 | ||||||||||||
Non-interest expense | ||||||||||||||||
Salaries and employee benefits | 15,254 | 12,542 | 44,573 | 36,871 | ||||||||||||
Net occupancy expense | 2,194 | 1,907 | 6,269 | 5,872 | ||||||||||||
Leased equipment depreciation | 1,311 | 928 | 3,722 | 2,095 | ||||||||||||
Marketing | 669 | 690 | 2,154 | 2,298 | ||||||||||||
Legal and professional | 1,799 | 1,590 | 5,202 | 4,402 | ||||||||||||
Communications and data processing | 849 | 843 | 2,519 | 2,268 | ||||||||||||
Franchise taxes | 46 | 58 | 176 | 223 | ||||||||||||
Other | 3,772 | 3,077 | 10,785 | 8,890 | ||||||||||||
Total non-interest expense | 25,894 | 21,635 | 75,400 | 62,919 | ||||||||||||
Income from continuing operations before income taxes | 13,512 | 12,194 | 37,868 | 32,270 | ||||||||||||
Income tax expense | 4,668 | 4,157 | 13,053 | 11,003 | ||||||||||||
Income from continuing operations (after-tax) | 8,844 | 8,037 | 24,815 | 21,267 | ||||||||||||
Income (loss) from discontinued operations (after-tax) | (602 | ) | (167 | ) | (746 | ) | (413 | ) | ||||||||
Net income | $ | 8,242 | $ | 7,870 | $ | 24,069 | $ | 20,854 | ||||||||
Basic earnings per share: | ||||||||||||||||
Income from continuing operations | $ | .34 | $ | .31 | $ | .95 | $ | .82 | ||||||||
Net income | $ | .31 | $ | .30 | $ | .92 | $ | .80 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Income from continuing operations | $ | .33 | $ | .30 | $ | .93 | $ | .80 | ||||||||
Net income | $ | .31 | $ | .30 | $ | .90 | $ | .79 |
6
TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
(Dollars in thousands)
3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | ||||||||||||||||
2007 | 2007 | 2007 | 2006 | 2006 | ||||||||||||||||
Beginning balance | $ | 24,062 | $ | 22,589 | $ | 21,003 | $ | 20,841 | $ | 19,646 | ||||||||||
Loans charged-off: | ||||||||||||||||||||
Commercial | 100 | 93 | 146 | 837 | 70 | |||||||||||||||
Consumer | 45 | 3 | — | — | — | |||||||||||||||
Leases | 10 | 58 | — | 36 | — | |||||||||||||||
Total | 155 | 154 | 146 | 873 | 70 | |||||||||||||||
Recoveries: | ||||||||||||||||||||
Commercial | 72 | 49 | 504 | 12 | 441 | |||||||||||||||
Consumer | 1 | — | 13 | — | — | |||||||||||||||
Leases | 23 | 78 | 15 | 23 | 74 | |||||||||||||||
Total recoveries | 96 | 127 | 532 | 35 | 515 | |||||||||||||||
Net charge-offs (recoveries) | 59 | 27 | (386 | ) | 838 | (445 | ) | |||||||||||||
Provision for loan losses | 2,000 | 1,500 | 1,200 | 1,000 | 750 | |||||||||||||||
Ending balance | $ | 26,003 | $ | 24,062 | $ | 22,589 | $ | 21,003 | $ | 20,841 | ||||||||||
Reserve to loans held for investment(2) | .79 | % | .78 | % | .78 | % | .77 | % | .82 | % | ||||||||||
Reserve to average loans held for investment(2) | .81 | % | .81 | % | .82 | % | .80 | % | .84 | % | ||||||||||
Net charge-offs (recoveries) to average loans (1) (2) | .01 | % | .00 | % | (.06 | )% | .13 | % | (.07 | )% | ||||||||||
Net charge-offs (recoveries) to average loans for last twelve months(1) (2) | .02 | % | .00 | % | .06 | % | .08 | % | .05 | % | ||||||||||
Provision for loan losses to average loans(1) (2) | .25 | % | .20 | % | .18 | % | .15 | % | .12 | % | ||||||||||
Non-performing loans: | ||||||||||||||||||||
Loans past due (90 days)(3) (4) | $ | 4,356 | $ | 1,860 | $ | 4,828 | $ | 2,142 | $ | 2,627 | ||||||||||
Non-accrual(4) | 8,690 | 8,718 | 8,843 | 9,088 | 6,432 | |||||||||||||||
Total | $ | 13,046 | $ | 10,578 | $ | 13,671 | $ | 11,230 | $ | 9,059 | ||||||||||
Other real estate owned(4) | $ | 501 | $ | 89 | $ | 89 | $ | 882 | $ | 882 | ||||||||||
Reserve to non-performing loans | 2.0x | 2.3x | 1.7x | 1.9x | 2.3x | |||||||||||||||
Reserve to non-accrual loans | 3.0x | 2.8x | 2.6x | 2.3x | 3.2x | |||||||||||||||
Reserve to non-performing assets | 1.9x | 2.3x | 1.6x | 1.7x | 2.1x | |||||||||||||||
Non-accrual loans to loans(2) | .26 | % | .28 | % | .31 | % | .33 | % | .25 | % | ||||||||||
Loans past due 90 days to loans(2) | .13 | % | .06 | % | .17 | % | .08 | % | .10 | % | ||||||||||
Non-performing loans to loans(2) | .40 | % | .34 | % | .47 | % | .41 | % | .36 | % |
(1) | Interim period ratios are annualized. | |
(2) | Excludes loans held for sale. | |
(3) | At September 30, 2007, loans past due 90 days and still accruing includes premium finance loans of $1.3 million. These loans are generally 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. The total also includes $274,000 USDA guaranteed loans. | |
(4) | Non-performing assets include $2.4 million of mortgage warehouse loans. |
7
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(Dollars in thousands)
(Dollars in thousands)
3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | ||||||||||||||||
2007 | 2007 | 2007 | 2006 | 2006 | ||||||||||||||||
Interest income | ||||||||||||||||||||
Interest and fees on loans | $ | 70,719 | $ | 66,526 | $ | 61,174 | $ | 59,882 | $ | 56,320 | ||||||||||
Securities | 5,623 | 5,868 | 5,969 | 6,266 | 6,488 | |||||||||||||||
Federal funds sold | 12 | 10 | 5 | 14 | 24 | |||||||||||||||
Deposits in other banks | 14 | 15 | 15 | 16 | 16 | |||||||||||||||
Total interest income | 76,368 | 72,419 | 67,163 | 66,178 | 62,848 | |||||||||||||||
Interest expense | ||||||||||||||||||||
Deposits | 32,690 | 29,731 | 30,890 | 29,487 | 28,337 | |||||||||||||||
Federal funds purchased | 3,554 | 3,767 | 2,153 | 1,793 | 1,753 | |||||||||||||||
Repurchase agreements | 175 | 270 | 394 | 587 | 665 | |||||||||||||||
Other borrowings | 1,102 | 2,117 | 12 | 393 | 634 | |||||||||||||||
Long-term debt | 2,088 | 2,063 | 2,047 | 2,086 | 1,358 | |||||||||||||||
Total interest expense | 39,609 | 37,948 | 35,496 | 34,346 | 32,747 | |||||||||||||||
Net interest income | 36,759 | 34,471 | 31,667 | 31,832 | 30,101 | |||||||||||||||
Provision for loan losses | 2,000 | 1,500 | 1,200 | 1,000 | 750 | |||||||||||||||
Net interest income after provision for loan losses | 34,759 | 32,971 | 30,467 | 30,832 | 29,351 | |||||||||||||||
Non-interest income | ||||||||||||||||||||
Service charges on deposit accounts | 1,089 | 953 | 893 | 865 | 780 | |||||||||||||||
Trust fee income | 1,182 | 1,194 | 1,077 | 1,073 | 1,008 | |||||||||||||||
Bank owned life insurance (BOLI) income | 288 | 301 | 298 | 301 | 255 | |||||||||||||||
Brokered loan fees | 452 | 574 | 479 | 521 | 656 | |||||||||||||||
Equipment rental income | 1,581 | 1,493 | 1,459 | 1,433 | 1,147 | |||||||||||||||
Other | 55 | 773 | 930 | 640 | 632 | |||||||||||||||
Total non-interest income | 4,647 | 5,288 | 5,136 | 4,833 | 4,478 | |||||||||||||||
Non-interest expense | ||||||||||||||||||||
Salaries and employee benefits | 15,254 | 14,762 | 14,557 | 13,711 | 12,542 | |||||||||||||||
Net occupancy expense | 2,194 | 2,055 | 2,020 | 2,111 | 1,907 | |||||||||||||||
Leased equipment depreciation | 1,311 | 1,204 | 1,207 | 1,002 | 928 | |||||||||||||||
Marketing | 669 | 728 | 757 | 785 | 690 | |||||||||||||||
Legal and professional | 1,799 | 1,742 | 1,661 | 2,084 | 1,590 | |||||||||||||||
Communications and data processing | 849 | 838 | 832 | 862 | 843 | |||||||||||||||
Franchise taxes | 46 | 89 | 41 | 58 | 58 | |||||||||||||||
Other | 3,772 | 3,993 | 3,020 | 3,380 | 3,077 | |||||||||||||||
Total non-interest expense | 25,894 | 25,411 | 24,095 | 23,993 | 21,635 | |||||||||||||||
Income from continuing operations before income taxes | 13,512 | 12,848 | 11,508 | 11,672 | 12,194 | |||||||||||||||
Income tax expense | 4,668 | 4,463 | 3,922 | 3,958 | 4,157 | |||||||||||||||
Income from continuing operations (after-tax) | 8,844 | 8,385 | 7,586 | 7,714 | 8,037 | |||||||||||||||
Income (loss) from discontinued operations (after-tax) | (602 | ) | (180 | ) | 36 | 356 | (167 | ) | ||||||||||||
Net income | $ | 8,242 | $ | 8,205 | $ | 7,622 | $ | 8,070 | $ | 7,870 | ||||||||||
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)
3rd Quarter 2007 | 2nd Quarter 2007 | 1st Quarter 2007 | 4th Quarter 2006 | 3rd Quarter 2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 432,595 | $ | 5,187 | 4.76 | % | $ | 452,118 | $ | 5,435 | 4.82 | % | $ | 467,219 | $ | 5,535 | 4.80 | % | $ | 490,001 | $ | 5,830 | 4.72 | % | $ | 507,156 | $ | 6,055 | 4.74 | % | ||||||||||||||||||||||||||||||
Securities — Non-taxable(2) | 48,173 | 671 | 5.53 | % | 48,291 | 666 | 5.53 | % | 48,549 | 668 | 5.58 | % | 48,573 | 669 | 5.46 | % | 48,595 | 666 | 5.44 | % | ||||||||||||||||||||||||||||||||||||||||
Federal funds sold | 885 | 12 | 5.38 | % | 768 | 10 | 5.22 | % | 418 | 5 | 4.85 | % | 1,004 | 14 | 5.53 | % | 1,750 | 24 | 5.44 | % | ||||||||||||||||||||||||||||||||||||||||
Deposits in other banks | 1,217 | 14 | 4.56 | % | 1,264 | 15 | 4.76 | % | 1,097 | 15 | 5.55 | % | 1,207 | 16 | 5.26 | % | 1,498 | 16 | 4.24 | % | ||||||||||||||||||||||||||||||||||||||||
Loans held for sale | 150,031 | 2,618 | 6.92 | % | 191,979 | 3,440 | 7.19 | % | 156,400 | 2,791 | 7.24 | % | 155,620 | 2,791 | 7.12 | % | 150,225 | 2,747 | 7.25 | % | ||||||||||||||||||||||||||||||||||||||||
Loans held for investment | 3,195,480 | 68,101 | 8.46 | % | 2,964,863 | 63,086 | 8.53 | % | 2,767,834 | 58,383 | 8.55 | % | 2,620,307 | 57,091 | 8.64 | % | 2,479,057 | 53,573 | 8.57 | % | ||||||||||||||||||||||||||||||||||||||||
Less reserve for loan losses | 24,065 | — | — | 22,633 | — | — | 21,001 | — | — | 20,751 | — | — | 19,823 | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Loans, net of reserve | 3,321,446 | 70,719 | 8.45 | % | 3,134,209 | 66,526 | 8.51 | % | 2,903,233 | 61,174 | 8.55 | % | 2,755,176 | 59,882 | 8.62 | % | 2,609,459 | 56,320 | 8.56 | % | ||||||||||||||||||||||||||||||||||||||||
Total earning assets | 3,804,316 | 76,603 | 7.99 | % | 3,636,650 | 72,652 | 8.01 | % | 3,420,516 | 67,397 | 7.99 | % | 3,295,961 | 66,411 | 7.99 | % | 3,168,458 | 63,081 | 7.90 | % | ||||||||||||||||||||||||||||||||||||||||
Cash and other assets | 188,356 | 205,011 | 231,412 | 225,092 | 217,663 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 3,992,672 | $ | 3,841,661 | $ | 3,651,928 | $ | 3,521,053 | $ | 3,386,121 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transaction deposits | $ | 95,870 | $ | 239 | 0.99 | % | $ | 93,488 | $ | 236 | 1.01 | % | $ | 105,592 | $ | 282 | 1.08 | % | $ | 97,428 | $ | 276 | 1.12 | % | $ | 99,549 | $ | 284 | 1.13 | % | ||||||||||||||||||||||||||||||
Savings deposits | 848,760 | 9,393 | 4.39 | % | 794,668 | 8,792 | 4.44 | % | 821,526 | 9,175 | 4.53 | % | 879,452 | 10,063 | 4.54 | % | 769,271 | 8,703 | 4.49 | % | ||||||||||||||||||||||||||||||||||||||||
Time deposits | 760,511 | 9,877 | 5.15 | % | 655,440 | 8,416 | 5.15 | % | 769,485 | 9,756 | 5.14 | % | 598,258 | 7,658 | 5.08 | % | 643,708 | 8,069 | 4.97 | % | ||||||||||||||||||||||||||||||||||||||||
Deposits in foreign branches | 1,037,813 | 13,181 | 5.04 | % | 966,686 | 12,287 | 5.10 | % | 915,229 | 11,677 | 5.17 | % | 875,851 | 11,490 | 5.20 | % | 845,338 | 11,281 | 5.29 | % | ||||||||||||||||||||||||||||||||||||||||
Total interest bearing deposits | 2,742,954 | 32,690 | 4.73 | % | 2,510,282 | 29,731 | 4.75 | % | 2,611,832 | 30,890 | 4.80 | % | 2,450,989 | 29,487 | 4.77 | % | 2,357,866 | 28,337 | 4.77 | % | ||||||||||||||||||||||||||||||||||||||||
Other borrowings | 368,824 | 4,831 | 5.20 | % | 469,999 | 6,154 | 5.25 | % | 207,303 | 2,559 | 5.01 | % | 219,644 | 2,773 | 5.01 | % | 238,350 | 3,052 | 5.08 | % | ||||||||||||||||||||||||||||||||||||||||
Long-term debt | 113,406 | 2,088 | 7.30 | % | 113,406 | 2,063 | 7.30 | % | 113,406 | 2,047 | 7.32 | % | 113,406 | 2,086 | 7.30 | % | 73,064 | 1,358 | 7.37 | % | ||||||||||||||||||||||||||||||||||||||||
Total interest bearing liabilities | 3,225,184 | 39,609 | 4.87 | % | 3,093,687 | 37,948 | 4.92 | % | 2,932,541 | 35,496 | 4.91 | % | 2,784,039 | 34,346 | 4.89 | % | 2,669,280 | 32,747 | 4.87 | % | ||||||||||||||||||||||||||||||||||||||||
Demand deposits | 469,610 | 458,096 | 439,071 | 470,701 | 464,645 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 22,173 | 22,650 | 26,494 | 22,106 | 21,633 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ equity | 275,705 | 267,228 | 253,822 | 244,207 | 230,563 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 3,992,672 | $ | 3,841,661 | $ | 3,651,928 | $ | 3,521,053 | $ | 3,386,121 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 36,994 | $ | 34,704 | $ | 31,901 | $ | 32,065 | $ | 30,334 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin | 3.86 | % | 3.83 | % | 3.78 | % | 3.86 | % | 3.80 | % |
(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. |
Additional information from discontinued operations:
Loans held for sale | $ | 1,259 | $ | 4,155 | $ | 12,068 | $ | 22,763 | $ | 27,422 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowed funds | 1,259 | 4,155 | 12,068 | 22,763 | 27,422 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 5 | $ | 115 | $ | 46 | $ | 87 | $ | 1,972 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin — consolidated | 3.86 | % | 3.84 | % | 3.77 | % | 3.84 | % | 4.01 | % |
9