Texas Capital Bancshares Announces Operating Results for 2008

Wednesday, January 28, 2009 4:17 PM

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 2008.

Loans held for investment grew 16% and total loans grew 24%
Demand deposits grew 11% and total deposits grew 9%

Net income decreased 21% for the year and 47% for the quarter
EPS decreased 25% for the year and 54% for the quarter

“We experienced good loan growth in the fourth quarter, despite the economic downturn and issues affecting our industry,” said George Jones, CEO. “With the substantial increase in capital, we enter 2009 in a position to take advantage of opportunities in our marketplace while maintaining our focus on credit quality. Our business model is intact, and we are well positioned to extend our growth strategy. However, the challenging economic conditions affecting the nation and the banking industry make it difficult to formalize guidance for net income for 2009 at this time.”

FINANCIAL SUMMARY (dollars and shares in thousands)

	2008			2007			% Change
ANNUAL OPERATING RESULTS
Net Income⁽¹⁾	$	24,882		$	31,353		(21	%)
Diluted EPS⁽¹⁾	$	.89		$	1.18		(25	%)
ROA⁽¹⁾		.55	%		.80	%
ROE⁽¹⁾		7.46	%		11.51	%
Diluted Shares		28,049			26,679

	Q4 2008			Q4 2007			% Change
QUARTERLY OPERATING RESULTS
Net Income⁽¹⁾	$	3,487		$	6,538		(47	%)
Diluted EPS⁽¹⁾	$	.11		$	.24		(54	%)
ROA⁽¹⁾		.29	%		.63	%
ROE⁽¹⁾		3.61	%		8.88	%
Diluted Shares		31,038			26,791

	2008			2007			% Change
BALANCE SHEET
Total Assets⁽¹⁾	$	5,139,564		$	4,286,718		20	%
Demand Deposits		587,161			529,334		11	%
Total Deposits		3,333,187			3,066,377		9	%
Loans Held for Investment		4,027,871			3,462,608		16	%
Total Loans⁽¹⁾		4,524,222			3,636,774		24	%
Stockholders’ Equity		387,073			295,138		31	%

(1) From continuing operations

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income from continuing operations of $24.9 million for the year ended December 31, 2008 and $3.5 million for the fourth quarter of 2008 compared to $31.4 million and $6.5 million for the year ended and fourth quarter of 2007, respectively. On a fully diluted basis, earnings per share from continuing operations were $.89 for the year ended December 31, 2008 and $.11 for the three months ended December 31, 2008, compared to $1.18 for 2007 and $.24 for the same quarter last year. Shares for the fourth quarter of 2008 and full year were affected by the issuance of 4 million shares in September 2008. Results of discontinued operations were net losses of $616,000 and $1.9 million for 2008 and 2007 and net losses of $100,000 and $1.2 million for the fourth quarter 2008 and 2007, respectively. The discussion below relates only to continuing operations.

Return on average equity was 7.46 percent and return on average assets was .55 percent for 2008, compared to 11.51 percent and .80 percent, respectively for 2007. Return on average equity was 3.61 percent and return on average assets was .29 percent for the fourth quarter of 2008, compared to 8.88 and .63 percent, respectively, for the fourth quarter of 2007.

Net interest income was $38.7 million for the fourth quarter of 2008, compared to $37.5 million for the fourth quarter of 2007. The increase was due to an increase in average earning assets of $651.7 million over levels reported in the fourth quarter of 2007. The increase in average earning assets included a $537.6 million increase in average loans held for investment and an increase of $194.2 million in average loans held for sale, offset by a decrease of $90.1 million in average securities. The net interest margin in the fourth quarter of 2008 was 3.41 percent, a 44 basis point decrease from the fourth quarter of 2007 and a 6 basis point decrease from the third quarter of 2008 due to asset sensitivity, funding costs associated with growth and the impact of the increase in non-accrual loans.

Average total deposits increased by $242.9 million from the fourth quarter of 2007 and decreased by $86.8 million from the third quarter of 2008. For the same periods, the average balance of demand deposits increased by $81.3 million or 17 percent to $566.5 million from $485.2 million during the fourth quarter of 2007 and decreased $1.4 million, or less than 1 percent, from the third quarter of 2008.

As a result of the overall economic downturn, we have experienced increases in levels of non-performing assets and charge-offs. In the fourth quarter of 2008, net charge-offs were $5.2 million, compared to net charge-offs of $2.5 million in the fourth quarter of 2007 and net charge-offs of $1.5 million in the third quarter of 2008. Non-accrual loans were $47.5 million or 1.18 percent of loans at the end of the fourth quarter of 2008, compared to $21.4 million, or .62 percent of loans at year-end 2007, and $46.6 million, or 1.21 percent of loans at the end of the third quarter of 2008. Loans 90 days past due and still accruing were $4.1 million at the end of the fourth quarter of 2008 compared to $4.1 million at the end of 2007, and $3.0 million at the end of the third quarter of 2008. At December 31, 2008, the $4.1 million of past due loans included $2.1 million in premium finance loans. At December 31, 2008, total other real estate owned was $25.9 million compared to $2.7 million at the end of 2007, and $5.8 million at the end of the third quarter of 2008. The Company recorded an $11.0 million provision for loan losses in the fourth quarter of 2008, compared to $9.3 million in the fourth quarter of 2007 and $4.0 million in the third quarter of 2008. The increase in the fourth quarter provision resulted in an increase in the reserve to 1.16 percent of loans held for investment as compared to .95 percent at December 31, 2007, and 1.07 percent at the end of the third quarter of 2008. The increase in the provision was due primarily to the effect of the increase in non-performing assets (NPAs) and current quarter loan growth. 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 fourth quarter of 2008 increased $1.1 million, or 22 percent, to $6.0 million from $4.9 million in the fourth quarter of 2007. The increase is primarily related to a $709,000 increase in brokered loan fees.

Non-interest expense for the fourth quarter of 2008 increased $5.2 million, or 22 percent, to $28.4 million from $23.2 million in the fourth quarter of 2007. The increase is primarily related to a $2.7 million increase in salaries and employee benefits, which was primarily due to general business growth. Additionally, other non-interest expense increased $1.5 million to $5.6 million and included an increase in ORE-related expenses of approximately $840,000.

On January 16, 2009, we completed the issuance of $75 million of perpetual preferred stock and related warrants under the U.S. Department of Treasury’s voluntary Capital Purchase Program. In November 2008, we applied for up to $130 million of additional capital under the Program. After receiving approval for the $130 million, we determined that we would accept $75 million under the Program. This capital will supplement the $55 million of common equity we raised in September 2008, strengthening our position in a difficult economic environment. We were well capitalized under regulatory guidelines prior to the capital additions, but the $130 million from the two transactions will add strength to our already well capitalized position and position us to grow organically with the addition of quality loan and deposit relationships.

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.

TEXAS CAPITAL BANCSHARES, INC.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
	4^th Quarter			3^rd Quarter			2^nd Quarter			1^st Quarter			4^th Quarter
	2008			2008			2008			2008			2007
CONSOLIDATED STATEMENT OF OPERATIONS
Interest income	$	58,873		$	62,240		$	61,008		$	66,809		$	74,018
Interest expense		20,161			23,974			22,848			30,210			36,487
Net interest income		38,712			38,266			38,160			36,599			37,531
Provision for loan losses		11,000			4,000			8,000			3,750			9,300
Net interest income after provision for loan losses		27,712			34,266			30,160			32,849			28,231
Non-interest income		5,950			4,885			5,952			5,683			4,880
Non-interest expense		28,443			27,675			27,256			26,277			23,206
Income from continuing operations before income taxes		5,219			11,476			8,856			12,255			9,905
Income tax expense		1,732			3,911			3,056			4,225			3,367
Income from continuing operations		3,487			7,565			5,800			8,030			6,538
Loss from discontinued operations (after-tax)		(100	)		(252	)		(116	)		(148	)		(1,185	)
Net income	$	3,387		$	7,313		$	5,684		$	7,882		$	5,353
Diluted EPS from continuing operations	$	.11		$	.27		$	.22		$	.30		$	.24
Diluted EPS	$	.11		$	.26		$	.21		$	.30		$	.20

Diluted shares		31,037,610			27,792,938			26,805,358			26,527,904			26,790,685

CONSOLIDATED BALANCE SHEET DATA
Total assets	$	5,139,564		$	4,742,043		$	4,662,507		$	4,351,514		$	4,286,718
Loans held for investment		4,027,871			3,840,172			3,704,262			3,493,631			3,462,608
Loans held for sale		496,351			343,002			328,838			239,860			174,166
Securities		378,752			365,145			390,223			425,513			440,119
Demand deposits		587,161			561,227			610,629			503,554			529,334
Total deposits		3,333,187			3,388,963			3,593,077			3,155,313			3,066,377
Other borrowings		1,280,607			835,025			621,127			751,482			783,851
Long-term debt		113,406			113,406			113,406			113,406			113,406
Stockholders’ equity		387,073			380,858			314,917			312,016			295,138

End of period shares		30,971,189			30,844,202			26,780,386			26,631,763			26,389,548
Book value (excluding securities gains/losses)	$	12.44		$	12.33		$	11.80		$	11.55		$	11.22
Tangible book value	$	12.25		$	12.10		$	11.47		$	11.42		$	10.89

SELECTED FINANCIAL RATIOS
From continuing operations
Net interest margin		3.41	%		3.47	%		3.65	%		3.65	%		3.85	%
Return on average assets		.29	%		.65	%		.53	%		.76	%		.63	%
Return on average equity		3.61	%		9.12	%		7.40	%		10.64	%		8.88	%
Non-interest income to earning assets		.52	%		.44	%		.57	%		.56	%		.50	%
Efficiency ratio		63.7	%		64.1	%		61.8	%		62.1	%		54.7	%
Non-interest expense to earning assets		2.49	%		2.49	%		2.59	%		2.61	%		2.37	%
From consolidated
Net interest margin		3.41	%		3.47	%		3.65	%		3.65	%		3.85	%
Return on average assets		.28	%		.63	%		.52	%		.74	%		.52	%
Return on average equity		3.50	%		8.81	%		7.25	%		10.45	%		7.27	%

Tier 1 capital ratio		10.0	%		10.5	%		9.3	%		9.7	%		9.4	%
Total capital ratio		10.9	%		11.4	%		10.3	%		10.8	%		10.6	%
Tier 1 leverage ratio		10.2	%		10.5	%		9.3	%		9.4	%		9.4	%

TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
	December 31, 2008			December 31, 2007			% Change
Assets
Cash and due from banks	$	77,887		$	89,463		(13	)%
Federal funds sold		4,140			–		100	%
Securities, available-for-sale		378,752			440,119		(14	)%
Loans held for sale		496,351			174,166		185	%
Loans held for sale from discontinued operations		648			731		(11	)%
Loans held for investment (net of unearned income)		4,027,871			3,462,608		16	%
Less: Allowance for loan losses		46,835			32,821		43	%
Loans held for investment, net		3,981,036			3,429,787		16	%
Premises and equipment, net		9,467			6,491		46	%
Accrued interest receivable and other assets		184,242			138,841		33	%
Goodwill and intangibles, net		7,689			7,851		(2	)%
Total assets	$	5,140,212		$	4,287,449		20	%

Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing	$	587,161		$	529,334		11	%
Interest bearing		2,245,991			1,569,546		43	%
Interest bearing in foreign branches		500,035			967,497		(48	)%
Total deposits		3,333,187			3,066,377		9	%

Accrued interest payable		6,421			5,630		14	%
Other liabilities		19,518			23,047		(15	)%
Federal funds purchased		350,155			344,813		2	%
Repurchase agreements		77,732			7,148		NM
Other short-term borrowings		812,720			431,890		88	%
Long-term borrowings		40,000			–		100	%
Trust preferred subordinated debentures		113,406			113,406		-
Total liabilities		4,753,139			3,992,311		19	%

Stockholders’ equity:
Common stock, $.01 par value:
Authorized shares – 100,000,000
Issued shares – 30,971,189 and 26,389,548 at December 31, 2008 and 2007, respectively		310			264
Additional paid-in capital		255,051			190,175
Retained earnings		129,851			105,585
Treasury stock (shares at cost: 84,691 at December 31, 2008 and 2007)		(581	)		(581	)
Deferred compensation		573			573
Accumulated other comprehensive income (loss)		1,869			(878	)
Total stockholders’ equity		387,073			295,138		31	%
Total liabilities and stockholders’ equity	$	5,140,212		$	4,287,449		20	%

TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands except per share data)
	Three Months Ended December 31						Twelve Months Ended December 31
	2008			2007			2008			2007
Interest income
Interest and fees on loans	$	54,814		$	68,752		$	231,009		$	267,171
Securities		4,031			5,191			17,722			21,975
Federal funds sold		27			65			168			92
Deposits in other banks		1			10			31			54
Total interest income		58,873			74,018			248,930			289,292
Interest expense
Deposits		16,075			27,934			72,852			121,245
Federal funds purchased		1,046			3,580			8,232			13,054
Repurchase agreements		79			76			541			915
Other borrowings		1,353			2,838			9,123			6,069
Trust preferred subordinated debentures		1,608			2,059			6,445			8,257
Total interest expense		20,161			36,487			97,193			149,540
Net interest income		38,712			37,531			151,737			139,752
Provision for loan losses		11,000			9,300			26,750			14,000
Net interest income after provision for loan losses		27,712			28,231			124,987			125,752
Non-interest income
Service charges on deposit accounts		1,133			1,156			4,699			4,091
Trust fee income		1,036			1,238			4,692			4,691
Bank owned life insurance (BOLI) income		315			311			1,240			1,198
Brokered loan fees		1,074			365			3,242			1,870
Equipment rental income		1,482			1,605			5,995			6,138
Other		910			205			2,602			2,639
Total non-interest income		5,950			4,880			22,470			20,627
Non-interest expense
Salaries and employee benefits		14,688			12,035			61,438			56,608
Net occupancy expense		2,534			2,161			9,631			8,430
Leased equipment depreciation		1,142			1,236			4,667			4,958
Marketing		882			850			2,729			3,004
Legal and professional		2,793			2,043			9,622			7,245
Communications and data processing		832			838			3,314			3,357
Other		5,572			4,043			18,250			15,004
Total non-interest expense		28,443			23,206			109,651			98,606
Income from continuing operations before income taxes		5,219			9,905			37,806			47,773
Income tax expense		1,732			3,367			12,924			16,420
Income from continuing operations		3,487			6,538			24,882			31,353
Loss from discontinued operations (after-tax)		(100	)		(1,185	)		(616	)		(1,931	)
Net income	$	3,387		$	5,353		$	24,266		$	29,422

Basic earnings per share:
Income from continuing operations	$	.11		$	.25		$	.89		$	1.20
Net income	$	.11		$	.20		$	.87		$	1.12

Diluted earnings per share:
Income from continuing operations	$	.11		$	.24		$	.89		$	1.18
Net income	$	.11		$	.20		$	.87		$	1.10

TEXAS CAPITAL BANCSHARES, INC.

SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
	4^th Quarter			3^rd Quarter			2^nd Quarter			1^st Quarter			4^th Quarter
	2008			2008			2008			2008			2007

Beginning balance	$	40,998		$	38,460		$	34,021		$	32,821		$	26,003
Loans charged-off:
Commercial		535			592			3,165			3,086			2,189
Real estate – construction		1,195			553			118			–			313
Real estate – permanent		3,432			267			464			5			–
Consumer		64			129			–			–			–
Leases		–			–			–			29			13
Total		5,226			1,541			3,747			3,120			2,515
Recoveries:
Commercial		43			27			165			524			17
Consumer		–			13			–			–			1
Leases		–			12			21			46			15
Real estate – permanent		20			27			–			–			–
Total recoveries		63			79			186			570			33
Net charge-offs		5,163			1,462			3,561			2,550			2,482
Provision for loan losses		11,000			4,000			8,000			3,750			9,300
Ending balance	$	46,835		$	40,998		$	38,460		$	34,021		$	32,821

Reserve to loans held for investment ⁽²⁾		1.16	%		1.07	%		1.04	%		.97	%		.95	%
Reserve to average loans held for investment ⁽²⁾		1.21	%		1.08	%		1.07	%		.98	%		.98	%
Net charge-offs to average loans ^{(1) (2)}		.53	%		.15	%		.40	%		.29	%		.30	%
Net charge-offs to average loans for last twelve months^{(1) (2)}		.35	%		.28	%		.25	%		.16	%		.07	%
Provision for loan losses to average loans ^{(1) (2)}		1.13	%		.42	%		.89	%		.43	%		1.11	%

Non-performing loans:
Loans past due 90 days and still accruing ^{(3) (4)}	$	4,115		$	2,970		$	22,763		$	5,199		$	4,147
Non-accrual ⁽⁴⁾		47,499			46,579			16,753			13,564			21,385
Total	$	51,614		$	49,549		$	39,516		$	18,763		$	25,532

Other real estate owned	$	25,904		$	5,792		$	5,615		$	3,126		$	2,671

Reserve to non-performing loans	.9		x	.8		x	1.0		x	1.8		x	1.3		x
Reserve to non-accrual loans	1.0		x	.9		x	2.3		x	2.5		x	1.5		x
Reserve to non-performing assets	.6		x	.7		x	.9		x	1.6		x	1.2		x
Non-accrual loans to loans ⁽²⁾		1.18	%		1.21	%		.45	%		.39	%		.62	%
Loans past due 90 days to loans ⁽²⁾		.10	%		.08	%		.61	%		.15	%		.12	%
Non-performing loans to loans ⁽²⁾		1.28	%		1.29	%		1.07	%		.54	%		.74	%

(1) Interim period ratios are annualized.

(2) Excludes loans held for sale.

(3) At December 31, 2008, loans past due 90 days and still accruing includes premium finance loans of $2.1 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) Non-performing assets include $4.4 million of mortgage warehouse loans.

TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(Dollars in thousands)

	4^th Quarter			3^rd Quarter			2^nd Quarter			1^st Quarter			4^th Quarter
	2008			2008			2008			2008			2007
Interest income
Interest and fees on loans	$	54,814		$	57,909		$	56,389		$	61,897		$	68,752
Securities		4,031			4,281			4,550			4,860			5,191
Federal funds sold		27			40			61			40			65
Deposits in other banks		1			10			8			12			10
Total interest income		58,873			62,240			61,008			66,809			74,018
Interest expense
Deposits		16,075			18,338			16,715			21,724			27,934
Federal funds purchased		1,046			2,273			1,963			2,950			3,580
Repurchase agreements		79			86			54			322			76
Other borrowings		1,353			1,791			2,652			3,327			2,838
Trust preferred subordinated debentures		1,608			1,486			1,464			1,887			2,059
Total interest expense		20,161			23,974			22,848			30,210			36,487
Net interest income		38,712			38,266			38,160			36,599			37,531
Provision for loan losses		11,000			4,000			8,000			3,750			9,300
Net interest income after provision for loan losses		27,712			34,266			30,160			32,849			28,231
Non-interest income
Service charges on deposit accounts		1,133			1,161			1,288			1,117			1,156
Trust fee income		1,036			1,234			1,206			1,216			1,238
Bank owned life insurance (BOLI) income		315			299			315			311			311
Brokered loan fees		1,074			1,024			671			473			365
Equipment rental income		1,482			1,487			1,510			1,516			1,605
Other		910			(320	)		962			1,050			205
Total non-interest income		5,950			4,885			5,952			5,683			4,880
Non-interest expense
Salaries and employee benefits		14,688			16,039			15,369			15,342			12,035
Net occupancy expense		2,534			2,300			2,432			2,365			2,161
Leased equipment depreciation		1,142			1,153			1,179			1,193			1,236
Marketing		882			521			649			677			850
Legal and professional		2,793			2,358			2,645			1,826			2,043
Communications and data processing		832			858			770			854			838
Other		5,572			4,446			4,212			4,020			4,043
Total non-interest expense		28,443			27,675			27,256			26,277			23,206
Income from continuing operations before income taxes		5,219			11,476			8,856			12,255			9,905
Income tax expense		1,732			3,911			3,056			4,225			3,367
Income from continuing operations		3,487			7,565			5,800			8,030			6,538
Loss from discontinued operations (after-tax)		(100	)		(252	)		(116	)		(148	)		(1,185	)
Net income	$	3,387		$	7,313		$	5,684		$	7,882		$	5,353

TEXAS CAPITAL BANCSHARES, INC.

QUARTERLY FINANCIAL SUMMARY – UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates Continuing Operations
(Dollars in thousands)

	4^th Quarter 2008						3^rd Quarter 2008						2^nd Quarter 2008						1^st Quarter 2008						4^th Quarter 2007
	Average Balance		Revenue/ Expense ⁽¹⁾		Yield/ Rate		Average Balance		Revenue/ Expense ⁽¹⁾		Yield/ Rate		Average Balance		Revenue/ Expense ⁽¹⁾		Yield/ Rate		Average Balance		Revenue/ Expense ⁽¹⁾		Yield/ Rate		Average Balance		Revenue/ Expense ⁽¹⁾		Yield/ Rate
Assets
Securities – Taxable	$	313,992	$	3,610	4.57	%	$	325,317	$	3,852	4.71	%	$	356,445	$	4,114	4.64	%	$	380,257	$	4,424	4.68	%	$	402,240	$	4,755	4.69	%
Securities – Non-taxable⁽²⁾		46,272		648	5.57	%		47,271		660	5.55	%		48,129		671	5.61	%		48,144		671	5.61	%		48,158		671	5.53	%
Federal funds sold		23,050		27	0.47	%		8,001		40	1.99	%		11,127		61	2.20	%		4,714		40	3.41	%		5,495		65	4.69	%
Deposits in other banks		5,761		1	0.07	%		2,554		10	1.56	%		1,103		8	2.92	%		1,251		12	3.86	%		1,121		10	3.54	%
Loans held for sale		316,409		4,441	5.58	%		288,103		4,137	5.78	%		246,026		3,654	5.97	%		171,672		2,610	6.11	%		122,205		1,872	6.08	%
Loans held for investment		3,875,586		50,373	5.17	%		3,781,289		53,772	5.66	%		3,597,342		52,735	5.90	%		3,483,840		59,287	6.84	%		3,337,968		66,880	7.95	%
Less reserve for loan losses		38,145		–	–			38,180		–	–			33,181		–	–			33,519		–	–			25,958		–	–
Loans, net of reserve		4,153,850		54,814	5.25	%		4,031,212		57,909	5.71	%		3,810,187		56,389	5.95	%		3,621,993		61,897	6.87	%		3,434,215		68,752	7.94	%
Total earning assets		4,542,925		59,100	5.18	%		4,414,355		62,471	5.63	%		4,226,991		61,243	5.83	%		4,056,359		67,044	6.65	%		3,891,229		74,253	7.57	%
Cash and other assets		218,335						201,589						198,946						207,595						215,853
Total assets	$	4,761,260					$	4,615,944					$	4,425,937					$	4,263,954					$	4,107,082

Liabilities and Stockholders’ Equity
Transaction deposits	$	103,111	$	67	0.26	%	$	103,905	$	122	0.47	%	$	111,587	$	129	0.46	%	$	108,349	$	145	0.54	%	$	97,798	$	166	0.67	%
Savings deposits		729,337		2,350	1.28	%		778,956		3,371	1.72	%		840,933		3,563	1.70	%		790,185		5,118	2.61	%		859,914		8,127	3.75	%
Time deposits		1,405,426		10,603	3.00	%		1,275,798		10,524	3.28	%		930,698		8,345	3.61	%		727,494		7,875	4.35	%		624,509		7,734	4.91	%
Deposits in foreign branches		555,573		3,055	2.19	%		720,211		4,321	2.39	%		755,593		4,678	2.49	%		956,603		8,586	3.61	%		1,049,645		11,907	4.50	%
Total interest bearing deposits		2,793,447		16,075	2.29	%		2,878,870		18,338	2.53	%		2,638,811		16,715	2.55	%		2,582,631		21,724	3.38	%		2,631,866		27,934	4.21	%
Other borrowings		881,868		2,478	1.12	%		709,157		4,150	2.33	%		830,482		4,669	2.26	%		773,149		6,599	3.43	%		560,523		6,494	4.60	%
Trust preferred subordinated debentures		113,406		1,608	5.64	%		113,406		1,486	5.21	%		113,406		1,464	5.19	%		113,406		1,887	6.69	%		113,406		2,059	7.20	%
Total interest bearing liabilities		3,788,721		20,161	2.12	%		3,701,433		23,974	2.58	%		3,582,699		22,848	2.56	%		3,469,186		30,210	3.50	%		3,305,795		36,487	4.38	%
Demand deposits		566,513						567,914						513,327						469,299						485,211
Other liabilities		21,323						16,452						14,613						22,071						23,999
Stockholders’ equity		384,703						330,145						315,298						303,398						292,076
Total liabilities and stockholders’ equity	$	4,761,260					$	4,615,944					$	4,425,937					$	4,263,954					$	4,107,082

Net interest income			$	38,939					$	38,497					$	38,395					$	36,834					$	37,766
Net interest margin					3.41	%					3.47	%					3.65	%					3.65	%					3.85	%

(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.

Texas Capital Bancshares, Inc.
Myrna Vance, 214-932-6646
myrna.vance@texascapitalbank.com

(Source: Business Wire )

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