Texas Capital Bancshares Announces Operating Results for Q2 2009

Wednesday, July 22, 2009 4:11 PM

Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the second quarter of 2009.

Loans held for investment increased 5% and total loans increased 7% on a linked quarter basis and grew 14% and 18%, respectively, from Q2 2008
Demand deposits grew 20% and total deposits increased 21% on a linked quarter basis and grew 20% and 1%, respectively, from Q2 2008
Net income increased 6% on a linked quarter basis and increased 12% from Q2 2008
Net income available to common shareholders decreased 61% on a linked quarter basis and decreased 65% from Q2 2008 as a result of the TARP repurchase
EPS decreased 65% on a linked quarter basis and decreased 73% from Q2 2008

"We are pleased to report another good quarter with strong core earnings and exceptional growth in demand deposits," said George Jones, CEO. "With our continued quality growth in loans and an improved net interest margin, we are confident that our business model is producing the results we expect. As we go forward and add new people and relationships, we will continue to build a growing bank with a profitable future."

FINANCIAL SUMMARY
(dollars and shares in thousands)

	Q2 2009			Q2 2008			% Change
QUARTERLY OPERATING RESULTS
Net Income⁽¹⁾	$	6,482		$	5,800		12	%
Net Income Available to Common Shareholders⁽¹⁾	$	2,029		$	5,800		(65	)%
Diluted EPS⁽¹⁾	$	.06		$	.22		(73	)%
ROA⁽¹⁾		.49	%		.53	%
ROE⁽¹⁾		5.45	%		7.40	%
Diluted Shares		33,866			26,805

BALANCE SHEET
Total Assets⁽¹⁾	$	5,303,800		$	4,662,507		14	%
Demand Deposits		730,034			610,629		20	%
Total Deposits		3,643,582			3,593,077		1	%
Loans Held for Investment		4,211,304			3,704,262		14	%
Total Loans⁽¹⁾		4,755,956			4,033,100		18	%
Stockholders’ Equity		464,026			314,917		47	%

(1) From continuing operations

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income from continuing operations of $6.5 million for the quarter ended June 30, 2009 compared to $5.8 million for the second quarter of 2008. During the quarter, we repurchased all outstanding preferred stock that was previously issued to the Treasury. As a result of the repurchase, the $3.9 million accelerated deemed dividend, combined with the previously scheduled preferred dividend of $523,000 resulted in a total dividend of $4.4 million during the second quarter of 2009. As a result, net income available to common shareholders from continuing operations was $2.0 million for the quarter compared to $5.8 million for the second quarter of 2008. On a fully diluted basis, earnings per common share from continuing operations were $.06 for the three months ended June 30, 2009, compared to $.22 for the same quarter last year. The effect of the TARP preferred stock dividends net of income earned on the TARP proceeds reduced earnings per share by $.13 for the three months ended June 30, 2009. Shares for the second quarter of 2009 were also affected by the issuance of 4 million shares in September 2008 and an additional 4.6 million shares in May 2009. Diluted shares increased by 26 percent from the second quarter of 2008 and 9 percent from the first quarter of 2009. The discussion below relates only to continuing operations.

Return on average equity was 5.45 percent and return on average assets was .49 percent for the second quarter of 2009, compared to 7.40 percent and .53 percent, respectively for the second quarter of 2008. The reduction in the ROE resulted from the 47 percent increase in stockholders’ equity from two equity offerings since June 30, 2008.

Net interest income was $48.8 million for the second quarter of 2009, compared to $38.2 million for the second quarter of 2008. The increase was due to an increase in average earning assets of $847.0 million over levels reported in the second quarter of 2008. The increase in average earning assets included a $527.6 million increase in average loans held for investment and an increase of $410.4 million in average loans held for sale, offset by a decrease of $78.3 million in average securities. The net interest margin in the second quarter of 2009 was 3.88 percent, a 23 basis point increase from the second quarter of 2008 and a 49 basis point increase from the first quarter of 2009 due to low funding costs and our ability to maintain and improve yields on our earning assets.

Average total deposits increased by $159.3 million from the second quarter of 2008 and increased by $77.2 million from the first quarter of 2009. For the same periods, the average balance of demand deposits increased by $211.2 million, or 41 percent, to $724.5 million from $513.3 million during the second quarter of 2008 and increased $87.8 million, or 14 percent, from the first 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. The Company recorded an $11.0 million provision for loan losses in the second quarter of 2009, compared to $8.0 million in the second quarter of 2008 and $8.5 million in the first quarter of 2009. The second quarter provision resulted in an increase in the reserve to 1.35 percent of loans held for investment as compared to 1.04 percent at June 30, 2008, and 1.31 percent at the end of the first 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 second quarter of 2009, net charge-offs were $6.8 million, compared to net charge-offs of $3.6 million in the second quarter of 2008 and net charge-offs of $2.6 million in the first quarter of 2009. Non-accrual loans were $49.6 million, or 1.18 percent, of loans at the end of the second quarter of 2009, compared to $16.8 million, or .45 percent of loans at the end of the second quarter of 2008, and $50.7 million, or 1.26 percent of loans at the end of the first quarter of 2009. At June 30, 2009, total other real estate owned was $31.4 million compared to $5.6 million at the end of the second quarter of 2008, and $27.5 million at the end of the first quarter of 2009.

Non-interest income for the second quarter of 2009 increased $1.4 million, or 23 percent, to $7.4 million from $6.0 million in the second quarter of 2008. The increase is primarily related to a $2.0 million increase in brokered loan fees and a $326,000 increase in service charge income, offset by a $254,000 decrease in trust fee income.

Non-interest expense for the second quarter of 2009 increased $8.1 million, or 30 percent, to $35.4 million from $27.3 million in the second quarter of 2008. The increase is primarily related to a $2.6 increase in salaries and employee benefits to $18.0 million from $15.4 million, which was primarily due to general business growth. Additionally, FDIC assessment expense increased $3.1 million from the second quarter 2008, and the second quarter 2009 includes a special FDIC assessment of $ $2.4 million, or $0.05 per share, after tax.

Stockholders equity increased by 47 percent from $314.9 million in June 2008 to $464.0 million at the end of the second quarter of 2009. Contributing to the increase was retained net income of $24.3 million and proceeds of sales of common stock totaling $114.4 million. In September 2008, we raised $55.0 million in common equity from institutional investors and in May 2009 we completed a public offering totaling $59.4 million. In January 2009, we completed the issuance of $75.0 million of perpetual preferred stock and related warrants under the U.S. Department of Treasury’s voluntary Capital Purchase Program (“the Program”), but repurchased the preferred stock in May 2009. The Bank is well capitalized under regulatory guidelines and at June 30, 2009, the Company’s ratio of tangible common equity to total tangible assets was 8.6%

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)
	2^nd Quarter			1^st Quarter			4^th Quarter			3^rd Quarter			2^nd Quarter
		2009			2009			2008			2008			2008
CONSOLIDATED STATEMENT OF INCOME
Interest income	$	60,013		$	55,806		$	58,873		$	62,240		$	61,008
Interest expense		11,211			14,589			20,161			23,974			22,848
Net interest income		48,802			41,217			38,712			38,266			38,160
Provision for loan losses		11,000			8,500			11,000			4,000			8,000
Net interest income after provision for loan losses		37,802			32,717			27,712			34,266			30,160
Non-interest income		7,416			6,900			5,950			4,885			5,952
Non-interest expense		35,373			30,306			28,443			27,675			27,256
Income from continuing operations before income taxes		9,845			9,311			5,219			11,476			8,856
Income tax expense		3,363			3,186			1,732			3,911			3,056
Income from continuing operations		6,482			6,125			3,487			7,565			5,800
Loss from discontinued operations (after-tax)		(44	)		(95	)		(100	)		(252	)		(116	)
Net income		6,438			6,030			3,387			7,313			5,684
Preferred stock dividends		4,453			930			–			–			–
Net income available to common shareholders	$	1,985		$	5,100		$	3,387		$	7,313		$	5,684
Diluted EPS from continuing operations	$	.06		$	.17		$	.11		$	.27		$	.22
Diluted EPS	$	.06		$	.16		$	.11		$	.26		$	.21

Diluted shares		33,866,237			31,072,444			31,037,610			27,792,938			26,805,358

CONSOLIDATED BALANCE SHEET DATA
Total assets	$	5,303,800		$	5,009,931		$	5,139,564		$	4,742,043		$	4,662,507
Loans held for investment		4,211,304			4,019,247			4,027,871			3,840,172			3,704,262
Loans held for sale		544,652			426,982			496,351			343,002			328,838
Securities		308,187			361,898			378,752			365,145			390,223
Demand deposits		730,034			608,939			587,161			561,227			610,629
Total deposits		3,643,582			3,010,960			3,333,187			3,388,963			3,593,077
Other borrowings		1,059,572			1,386,783			1,280,607			835,025			621,127
Long-term debt		113,406			113,406			113,406			113,406			113,406
Stockholders’ equity		464,026			471,990			387,073			380,858			314,917

End of period shares		35,688,661			31,014,575			30,971,189			30,844,202			26,780,386
Book value (excluding securities gains/losses)	$	12.87		$	12.64		$	12.44		$	12.33		$	11.80
Tangible book value (excluding securities gains/losses)	$	12.66		$	12.39		$	12.19		$	12.08		$	11.51

SELECTED FINANCIAL RATIOS
From continuing operations
Net interest margin		3.88	%		3.39	%		3.41	%		3.47	%		3.65	%
Return on average assets		.49	%		.48	%		.29	%		.65	%		.53	%
Return on average equity		5.45	%		5.44	%		3.61	%		9.12	%		7.40	%
Non-interest income to earning assets		.59	%		.56	%		.52	%		.44	%		.57	%
Efficiency ratio		62.9	%		63.0	%		63.7	%		64.1	%		61.8	%
Non-interest expense to earning assets		2.80	%		2.48	%		2.49	%		2.49	%		2.59	%
From consolidated
Net interest margin		3.88	%		3.39	%		3.41	%		3.47	%		3.65	%
Return on average assets		.48	%		.47	%		.28	%		.63	%		.52	%
Return on average equity		5.41	%		5.36	%		3.50	%		8.81	%		7.25	%

Tangible common equity to total tangible assets		8.6	%		7.8	%		7.4	%		7.9	%		6.6	%
Tier 1 capital ratio		11.2	%		11.9	%		10.0	%		10.5	%		9.3	%
Total capital ratio		12.3	%		13.0	%		10.9	%		11.4	%		10.3	%
Tier 1 leverage ratio		10.6	%		11.0	%		10.2	%		10.5	%		9.3	%


TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
	June 30, 2009			June 30, 2008			% Change
Assets
Cash and due from banks	$	74,478		$	97,835		(24	)%
Federal funds sold		6,000			17,350		(65	)%
Securities, available-for-sale		308,187			390,223		(21	)%
Loans held for sale		544,652			328,838		66	%
Loans held for sale from discontinued operations		578			729		(21	)%
Loans held for investment (net of unearned income)		4,211,304			3,704,262		14	%
Less: Allowance for loan losses		56,893			38,460		45	%
Loans held for investment, net		4,154,411			3,665,802		13	%
Premises and equipment, net		11,088			5,839		90	%
Accrued interest receivable and other assets		197,376			148,850		34	%
Goodwill and intangibles, net		7,608			7,770		(2	)%
Total assets	$	5,304,378		$	4,663,236		14	%

Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing	$	730,034		$	610,629		20	%
Interest bearing		2,530,562			2,234,277		13	%
Interest bearing in foreign branches		382,986			748,171		(49	)%
Total deposits		3,643,582			3,593,077		1	%

Accrued interest payable		2,900			6,130		(53	)%
Other liabilities		20,892			14,579		55	%
Federal funds purchased		632,945			398,178		59	%
Repurchase agreements		61,816			19,412		218	%
Other short-term borrowings		364,811			203,537		79	%
Trust preferred subordinated debentures		113,406			113,406		-
Total liabilities		4,840,352			4,348,319		11	%

Stockholders’ equity:
Common stock, $.01 par value:
Authorized shares – 100,000,000
Issued shares – 35,688,661 and 26,780,386 at June 30, 2009 and 2008, respectively		357			268		33	%
Additional paid-in capital		321,987			196,710		64	%
Retained earnings		136,936			119,151		15	%
Treasury stock (shares at cost: 417 at June 30, 2009 and 84,691 at June 30, 2008)		(8	)		(581	)	(99	)%
Deferred compensation		–			573		(100	)%
Accumulated other comprehensive income (loss), net of taxes		4,754			(1,204	)	495	%
Total stockholders’ equity		464,026			314,917		48	%
Total liabilities and stockholders’ equity	$	5,304,378		$	4,663,236		14	%


TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
	Three Months Ended June 30						Six Months Ended June 30
		2009			2008			2009			2008
Interest income
Interest and fees on loans	$	56,455		$	56,389		$	108,367		$	118,286
Securities		3,544			4,550			7,395			9,410
Federal funds sold		9			61			24			101
Deposits in other banks		5			8			33			20
Total interest income		60,013			61,008			115,819			127,817
Interest expense
Deposits		8,769			16,715			20,348			38,439
Federal funds purchased		740			1,963			1,358			4,913
Repurchase agreements		14			54			28			376
Other borrowings		570			2,652			1,748			5,979
Trust preferred subordinated debentures		1,118			1,464			2,318			3,351
Total interest expense		11,211			22,848			25,800			53,058
Net interest income		48,802			38,160			90,019			74,759
Provision for loan losses		11,000			8,000			19,500			11,750
Net interest income after provision for loan losses		37,802			30,160			70,519			63,009
Non-interest income
Service charges on deposit accounts		1,614			1,288			3,139			2,405
Trust fee income		952			1,206			1,836			2,422
Bank owned life insurance (BOLI) income		423			315			697			626
Brokered loan fees		2,670			671			4,702			1,144
Equipment rental income		1,453			1,510			2,909			3,026
Other		304			962			1,033			2,012
Total non-interest income		7,416			5,952			14,316			11,635
Non-interest expense
Salaries and employee benefits		18,000			15,369			34,219			30,711
Net occupancy expense		3,387			2,432			6,141			4,797
Leased equipment depreciation		1,115			1,179			2,238			2,372
Marketing		655			649			1,210			1,326
Legal and professional		3,106			2,645			5,177			4,471
Communications and data processing		979			770			1,815			1,624
FDIC insurance assessment		3,493			359			5,040			722
Other		4,638			3,853			9,839			7,510
Total non-interest expense		35,373			27,256			65,679			53,533
Income from continuing operations before income taxes		9,845			8,856			19,156			21,111
Income tax expense		3,363			3,056			6,549			7,281
Income from continuing operations		6,482			5,800			12,607			13,830
Loss from discontinued operations (after-tax)		(44	)		(116	)		(139	)		(264	)
Net income		6,438			5,684			12,468			13,566
Preferred stock dividends		4,453			–			5,383			–
Net income available to common stockholders	$	1,985		$	5,684		$	7,085		$	13,566

Basic earnings per common share:
Income from continuing operations	$	.06		$	.22		$	.22		$	.52
Net income	$	.06		$	.21		$	.22		$	.51

Diluted earnings per common share:
Income from continuing operations	$	.06		$	.22		$	.22		$	.52
Net income	$	.06		$	.21		$	.22		$	.51


TEXAS CAPITAL BANCSHARES, INC.

SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
	2^nd Quarter			1^st Quarter			4^th Quarter			3^rd Quarter			2^nd Quarter
		2009			2009			2008			2008			2008

Beginning balance	$	52,727		$	46,835		$	40,998		$	38,460		$	34,021
Loans charged-off:
Commercial		1,913			1,695			535			592			3,165
Real estate – construction		–			60			1,195			553			118
Real estate – term		1,250			236			3,432			267			464
Consumer		–			419			64			129			–
Leases		3,724			226			–			–			–
Total		6,887			2,636			5,226			1,541			3,747
Recoveries:
Commercial		48			21			43			27			165
Consumer		5			–			–			13			–
Leases		–			7			–			12			21
Real estate – construction		–			–			–			–			–
Real estate – term		–			–			20			27			–
Total recoveries		53			28			63			79			186
Net charge-offs		6,834			2,608			5,163			1,462			3,561
Provision for loan losses		11,000			8,500			11,000			4,000			8,000
Ending balance	$	56,893		$	52,727		$	46,835		$	40,998		$	38,460

Reserve to loans held for investment⁽²⁾		1.35	%		1.31	%		1.16	%		1.07	%		1.04	%
Reserve to average loans held for investment⁽²⁾		1.38	%		1.31	%		1.21	%		1.08	%		1.07	%
Net charge-offs to average loans⁽¹⁾⁽²⁾		.66	%		.26	%		.53	%		.15	%		.40	%
Net charge-offs to average loans for last twelve months⁽¹⁾⁽²⁾		.41	%		.34	%		.35	%		.28	%		.25	%
Provision for loan losses to average loans⁽¹⁾⁽²⁾		1.07	%		.85	%		1.13	%		.42	%		.89	%

Non-performing assets (NPAs):
Non-accrual loans⁽⁴⁾	$	49,592		$	50,683		$	47,499		$	46,579		$	16,753
Other real estate owned (OREO)		31,404			27,501			25,904			5,792			5,615
Total	$	80,996		$	78,184		$	73,403		$	52,371		$	22,368

Non-accrual loans to loans⁽²⁾		1.18	%		1.26	%		1.18	%		1.21	%		.45	%
Total NPAs to loans plus OREO		1.91	%		1.93	%		1.81	%		1.36	%		0.60	%
Reserve to non-accrual loans	1.1x			1.0x			1.0x			.9x			2.3x

Loans past due 90 days and still accruing⁽³⁾	$	3,539		$	4,637		$	4,115		$	2,970		$	22,763

Loans past due 90 days to loans⁽²⁾		.08	%		.12	%		.10	%		.08	%		.61	%

(1) Interim period ratios are annualized.

(2) Excludes loans held for sale.

(3) At June 30, 2009, loans past due 90 days and still accruing includes premium finance loans of $2.3 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 June 30, 2009, non-performing assets include $3.0 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 other real estate owned.

TEXAS CAPITAL BANCSHARES, INC.

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

	2^nd Quarter			1^st Quarter			4^th Quarter			3^rd Quarter			2^nd Quarter
		2009			2009			2008			2008			2008
Interest income
Interest and fees on loans	$	56,455		$	51,912		$	54,814		$	57,909		$	56,389
Securities		3,544			3,851			4,031			4,281			4,550
Federal funds sold		9			15			27			40			61
Deposits in other banks		5			28			1			10			8
Total interest income		60,013			55,806			58,873			62,240			61,008
Interest expense
Deposits		8,769			11,579			16,075			18,338			16,715
Federal funds purchased		740			618			1,046			2,273			1,963
Repurchase agreements		14			14			79			86			54
Other borrowings		570			1,178			1,353			1,791			2,652
Trust preferred subordinated debentures		1,118			1,200			1,608			1,486			1,464
Total interest expense		11,211			14,589			20,161			23,974			22,848
Net interest income		48,802			41,217			38,712			38,266			38,160
Provision for loan losses		11,000			8,500			11,000			4,000			8,000
Net interest income after provision for loan losses		37,802			32,717			27,712			34,266			30,160
Non-interest income
Service charges on deposit accounts		1,614			1,525			1,133			1,161			1,288
Trust fee income		952			884			1,036			1,234			1,206
Bank owned life insurance (BOLI) income		423			274			315			299			315
Brokered loan fees		2,670			2,032			1,074			1,024			671
Equipment rental income		1,453			1,456			1,482			1,487			1,510
Other		304			729			910			(320	)		962
Total non-interest income		7,416			6,900			5,950			4,885			5,952
Non-interest expense
Salaries and employee benefits		18,000			16,219			14,688			16,039			15,369
Net occupancy expense		3,387			2,754			2,534			2,300			2,432
Leased equipment depreciation		1,115			1,123			1,142			1,153			1,179
Marketing		655			555			882			521			649
Legal and professional		3,106			2,071			2,793			2,358			2,645
Communications and data processing		979			836			832			858			770
FDIC insurance assessment		3,493			1,547			643			432			359
Other		4,638			5,201			4,929			4,014			3,853
Total non-interest expense		35,373			30,306			28,443			27,675			27,256
Income from continuing operations before income taxes		9,845			9,311			5,219			11,476			8,856
Income tax expense		3,363			3,186			1,732			3,911			3,056
Income from continuing operations		6,482			6,125			3,487			7,565			5,800
Loss from discontinued operations (after-tax)		(44	)		(95	)		(100	)		(252	)		(116	)
Net income		6,438			6,030			3,387			7,313			5,684
Preferred stock dividends		4,453			930			–			–			–
Net income available to common stockholders	$	1,985		$	5,100		$	3,387		$	7,313		$	5,684


TEXAS CAPITAL BANCSHARES, INC.

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

	2^nd Quarter 2009						1^st Quarter 2009						4^th Quarter 2008						3^rd Quarter 2008						2^nd Quarter 2008
	Average Balance		Revenue/ Expense ⁽¹⁾		Yield/ Rate		Average Balance		Revenue/ Expense ⁽¹⁾		Yield/ Rate		Average Balance		Average Balance		Average Balance		Average Balance		Revenue/ Expense ⁽¹⁾		Yield/ Rate		Average Balance		Revenue/ Expense ⁽¹⁾		Yield/ Rate
Assets
Securities – Taxable	$	280,372	$	3,124	4.47	%	$	321,802	$	3,431	4.32	%	$	313,992	$	3,610	4.57	%	$	325,317	$	3,852	4.71	%	$	356,445	$	4,114	4.64	%
Securities – Non-taxable⁽²⁾		45,901		646	5.64	%		46,055		646	5.69	%		46,272		648	5.57	%		47,271		660	5.55	%		48,129		671	5.61	%
Federal funds sold		5,649		9	0.64	%		14,923		15	0.41	%		23,050		27	0.47	%		8,001		40	1.99	%		11,127		61	2.20	%
Deposits in other banks		12,268		5	0.16	%		11,207		28	1.01	%		5,761		1	0.07	%		2,554		10	1.56	%		1,103		8	2.92	%
Loans held for sale		656,462		7,775	4.75	%		587,401		6,487	4.48	%		316,409		4,441	5.58	%		288,103		4,137	5.78	%		246,026		3,654	5.97	%
Loans held for investment		4,124,937		48,680	4.73	%		4,022,180		45,425	4.58	%		3,875,586		50,373	5.17	%		3,781,289		53,772	5.66	%		3,597,342		52,735	5.90	%
Less reserve for loan losses		51,601		–	–			46,686		–	–			38,145		–	–			38,180		–	–			33,181		–	–
Loans, net of reserve		4,729,798		56,455	4.79	%		4,562,895		51,912	4.61	%		4,153,850		54,814	5.25	%		4,031,212		57,909	5.71	%		3,810,187		56,389	5.95	%
Total earning assets		5,073,988		60,239	4.76	%		4,956,882		56,032	4.58	%		4,542,925		59,100	5.18	%		4,414,355		62,471	5.63	%		4,226,991		61,243	5.83	%
Cash and other assets		251,960						238,723						218,335						201,589						198,946
Total assets	$	5,325,948					$	5,195,605					$	4,761,260					$	4,615,944					$	4,425,937

Liabilities and Stockholders’ Equity
Transaction deposits	$	135,756	$	55	0.16	%	$	129,850	$	44	0.14	%	$	103,111	$	67	0.26	%	$	103,905	$	122	0.47	%	$	111,587	$	129	0.46	%
Savings deposits		974,275		2,003	0.82	%		745,355		1,420	0.77	%		729,337		2,350	1.28	%		778,956		3,371	1.72	%		840,933		3,563	1.70	%
Time deposits		1,082,691		5,105	1.89	%		1,277,824		8,066	2.56	%		1,405,426		10,603	3.00	%		1,275,798		10,524	3.28	%		930,698		8,345	3.61	%
Deposits in foreign branches		394,251		1,606	1.63	%		444,549		2,049	1.87	%		555,573		3,055	2.19	%		720,211		4,321	2.39	%		755,593		4,678	2.49	%
Total interest bearing deposits		2,586,973		8,769	1.36	%		2,597,578		11,579	1.81	%		2,793,447		16,075	2.29	%		2,878,870		18,338	2.53	%		2,638,811		16,715	2.55	%
Other borrowings		1,404,881		1,324	0.38	%		1,367,691		1,810	0.54	%		881,868		2,478	1.12	%		709,157		4,150	2.33	%		830,482		4,669	2.26	%
Trust preferred subordinated debentures		113,406		1,118	3.95	%		113,406		1,200	4.29	%		113,406		1,608	5.64	%		113,406		1,486	5.21	%		113,406		1,464	5.19	%
Total interest bearing liabilities		4,105,260		11,211	1.10	%		4,078,675		14,589	1.45	%		3,788,721		20,161	2.12	%		3,701,433		23,974	2.58	%		3,582,699		22,848	2.56	%
Demand deposits		724,487						636,704						566,513						567,914						513,327
Other liabilities		18,899						23,619						21,323						16,452						14,613
Stockholders’ equity		477,302						456,607						384,703						330,145						315,298
Total liabilities and stockholders’ equity	$	5,325,948					$	5,195,605					$	4,761,260					$	4,615,944					$	4,425,937

Net interest income			$	49,028					$	41,443					$	38,939					$	38,497					$	38,395
Net interest margin					3.88	%					3.39	%					3.41	%					3.47	%					3.65	%

(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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