Oct. 21, 2009 (Business Wire) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the third quarter of 2009.
- Loans held for investment increased 2% and total loans increased 2% on a linked quarter basis and grew 12% and 16%, respectively, from Q3 2008
- Demand deposits grew 10% and total deposits increased 7% on a linked quarter basis and grew 43% and 16%, respectively, from Q3 2008
- Net income before preferred dividends decreased 17% on a linked quarter basis and decreased 29% from Q3 2008
- EPS increased 150% on a linked quarter basis, due to the reduction in preferred stock dividends related to the TARP that was repaid in Q2, and decreased 44% from Q3 2008
“Our core earnings power improved, even in the overall economic downturn and the increased pressure on credit,” said George Jones, CEO. “Our growth in loans, demand deposits and the improvement in net interest margin are indicators of success in this challenging environment.”
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| FINANCIAL SUMMARY | | | | | | |
| (dollars and shares in thousands) | | | | | | |
| | | | | | | |
| | | Q3 2009 | | Q3 2008 | | % Change |
| QUARTERLY OPERATING RESULTS | | | | | | |
| Net Income | | $ | 5,353 | | | $ | 7,565 | | | (29 | )% |
| Diluted EPS | | $ | .15 | | | $ | .27 | | | (44 | )% |
| ROA | | | .40 | % | | | .65 | % | | |
| ROE | | | 4.46 | % | | | 9.12 | % | | |
| Diluted Shares | | | 36,304 | | | | 27,793 | | | |
| | | | | | | |
| BALANCE SHEET | | | | | | |
| Total Assets | | $ | 5,317,851 | | | $ | 4,742,043 | | | 12 | % |
| Demand Deposits | | | 802,692 | | | | 561,227 | | | 43 | % |
| Total Deposits | | | 3,916,568 | | | | 3,388,963 | | | 16 | % |
| Loans Held for Investment | | | 4,290,453 | | | | 3,840,172 | | | 12 | % |
| Total Loans | | | 4,840,240 | | | | 4,183,174 | | | 16 | % |
| Stockholders’ Equity | | | 474,044 | | | | 380,858 | | | 24 | % |
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DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income from continuing operations of $5.4 million for the quarter ended September 30, 2009 compared to $7.6 million for the third quarter of 2008. On a fully diluted basis, earnings per common share from continuing operations were $.15 for the three months ended September 30, 2009, compared to $.27 for the same quarter last year. The discussion below relates only to continuing operations.
Return on average equity was 4.46 percent and return on average assets was .40 percent for the third quarter of 2009, compared to 9.12 percent and .65 percent, respectively for the third quarter of 2008. The reduction in the ROE resulted from the 24 percent increase in stockholders’ equity from two equity offerings since September 2008 and reduced earnings.
Net interest income was $51.6 million for the third quarter of 2009, compared to $38.3 million for the third quarter of 2008. The increase was due to an increase in average earning assets of $645.3 million over levels reported in the third quarter of 2008. The increase in average earning assets included a $482.9 million increase in average loans held for investment and an increase of $251.8 million in average loans held for sale, offset by a decrease of $80.0 million in average securities.
The net interest margin in the third quarter of 2009 was 4.06 percent, a 59 basis point increase from the third quarter of 2008 and an 18 basis point increase from the second 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 $529.2 million from the third quarter of 2008 and increased by $664.5 million from the second quarter of 2009. For the same periods, the average balance of demand deposits increased by $196.6 million, or 35 percent, to $764.6 million from $567.9 million during the third quarter of 2008 and increased $40.1 million, or 6 percent, from the second 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. Provision for loan losses and valuation allowance related to OREO totaled $15.7 million in third quarter of 2009 compared to $4.0 million in the third quarter of 2008 and $11.0 million in the second quarter of 2009. The Company recorded a $13.5 million provision for loan losses in the third quarter of 2009, compared to $4.0 million in the third quarter of 2008 and $11.0 million in the second quarter of 2009. The third quarter provision resulted in an increase in the reserve to 1.59 percent of loans held for investment as compared to 1.07 percent at September 30, 2008, and 1.35 percent at the end of the second 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 third quarter of 2009, net charge-offs were $2.0 million, compared to net charge-offs of $1.5 million in the third quarter of 2008 and net charge-offs of $6.8 million in the second quarter of 2009. Non-accrual loans were $85.3 million, or 1.99 percent, of loans at the end of the third quarter of 2009, compared to $46.6 million, or 1.21 percent of loans at the end of the third quarter of 2008, and $49.6 million, or 1.18 percent of loans at the end of the second quarter of 2009. At September 30, 2009, total other real estate owned (OREO) was $34.7 million compared to $5.8 million at the end of the third quarter of 2008, and $31.4 million at the end of the second quarter of 2009. The balance of $34.7 million at September 30, 2009 is stated net of a valuation allowance for which the Company incurred a non-interest expense of $2.2 million during the third quarter of 2009.
Non-interest income for the third quarter of 2009 increased $2.2 million, or 45 percent, to $7.1 million from $4.9 million in the third quarter of 2008. The increase is primarily related to a $1.1 million increase in brokered loan fees and a $497,000 increase in service charge income, offset by a $234,000 decrease in trust fee income. Additionally, other non-interest income increased $1.0 million due to a $1.0 million charge associated with customer fraud on certain mortgage loans that was recorded in other non-interest income in the third quarter of 2008.
Non-interest expense for the third quarter of 2009 increased $9.4 million, or 34 percent, to $37.1 million from $27.7 million in the third quarter of 2008. The increase is primarily related to a $3.6 increase in salaries and employee benefits to $19.6 million from $16.0 million, which was primarily due to general business growth. Valuation allowance for foreclosed assets and other carrying costs expense increased $2.2 million related to establishing a valuation allowance of $2.2 million. The expense related to the valuation allowance increased our efficiency ratio from 59.4 percent to 63.1 percent for the third quarter. Additionally, legal and professional expense and FDIC assessment expense increased $916,000 and $1.0 million, respectively, from the third quarter 2008.
Stockholders’ equity increased by 24 percent from $380.9 million in September 2008 to $474.0 million at the end of the third quarter of 2009. Contributing to the increase was retained net income of $21.4 million and proceeds of sales of common stock totaling $114.4 million. The Bank is well capitalized under regulatory guidelines and at September 30, 2009, the Company’s ratio of tangible common equity to total tangible assets was 8.7 percent.
ABOUT TEXAS CAPITAL BANCSHARES, INC.
Texas Capital Bancshares, Inc. (NASDAQ: TCBI) is the parent company of Texas Capital Bank, a commercial bank that delivers highly personalized financial services to businesses and private clients. Headquartered in Dallas, the Bank has full-service locations in Austin, Dallas, Fort Worth, Houston and San Antonio.
This release contains forward-looking statements, which are subject to risks and uncertainties. A number of factors, many of which are beyond Texas Capital Bancshares’ control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include the risk of adverse impacts from general economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. These and other factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Form 10-K and other filings made by Texas Capital Bancshares with the Securities and Exchange Commission.
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| TEXAS CAPITAL BANCSHARES, INC. |
| |
| SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) |
| (Dollars in thousands except per share data) |
| | | 3rd Quarter | | 2nd Quarter | | 1st Quarter | | 4th Quarter | | 3rd Quarter |
| | | 2009 | | 2009 | | 2009 | | 2008 | | 2008 |
| CONSOLIDATED STATEMENT OF INCOME | | | | | | | | | | |
| Interest income | | $ | 62,197 | | | $ | 60,013 | | | $ | 55,806 | | | $ | 58,873 | | | $ | 62,240 | |
| Interest expense | | | 10,631 | | | | 11,211 | | | | 14,589 | | | | 20,161 | | | | 23,974 | |
| Net interest income | | | 51,566 | | | | 48,802 | | | | 41,217 | | | | 38,712 | | | | 38,266 | |
| Provision for loan losses | | | 13,500 | | | | 11,000 | | | | 8,500 | | | | 11,000 | | | | 4,000 | |
| Net interest income after provision for loan losses | | | 38,066 | | | | 37,802 | | | | 32,717 | | | | 27,712 | | | | 34,266 | |
| Non-interest income | | | 7,133 | | | | 7,416 | | | | 6,900 | | | | 5,950 | | | | 4,885 | |
| Non-interest expense | | | 37,067 | | | | 35,373 | | | | 30,306 | | | | 28,443 | | | | 27,675 | |
| Income from continuing operations before income taxes | | | 8,132 | | | | 9,845 | | | | 9,311 | | | | 5,219 | | | | 11,476 | |
| Income tax expense | | | 2,779 | | | | 3,363 | | | | 3,186 | | | | 1,732 | | | | 3,911 | |
| Income from continuing operations | | | 5,353 | | | | 6,482 | | | | 6,125 | | | | 3,487 | | | | 7,565 | |
| Loss from discontinued operations (after-tax) | | | (41 | ) | | | (44 | ) | | | (95 | ) | | | (100 | ) | | | (252 | ) |
| Net income | | | 5,312 | | | | 6,438 | | | | 6,030 | | | | 3,387 | | | | 7,313 | |
| Preferred stock dividends | | | – | | | | 4,453 | | | | 930 | | | | – | | | | – | |
| Net income available to common shareholders | | $ | 5,312 | | | $ | 1,985 | | | $ | 5,100 | | | $ | 3,387 | | | $ | 7,313 | |
| Diluted EPS from continuing operations | | $ | .15 | | | $ | .06 | | | $ | .17 | | | $ | .11 | | | $ | .27 | |
| Diluted EPS | | $ | .15 | | | $ | .06 | | | $ | .16 | | | $ | .11 | | | $ | .26 | |
| | | | | | | | | | | |
| Diluted shares | | | 36,303,975 | | | | 33,866,237 | | | | 31,072,444 | | | | 31,037,610 | | | | 27,792,938 | |
| | | | | | | | | | | |
| CONSOLIDATED BALANCE SHEET DATA | | | | | | | | | | |
| Total assets | | $ | 5,317,851 | | | $ | 5,303,800 | | | $ | 5,009,931 | | | $ | 5,139,564 | | | $ | 4,742,043 | |
| Loans held for investment | | | 4,290,453 | | | | 4,211,304 | | | | 4,019,247 | | | | 4,027,871 | | | | 3,840,172 | |
| Loans held for sale | | | 549,787 | | | | 544,652 | | | | 426,982 | | | | 496,351 | | | | 343,002 | |
| Securities | | | 285,869 | | | | 308,187 | | | | 361,898 | | | | 378,752 | | | | 365,145 | |
| Demand deposits | | | 802,692 | | | | 730,034 | | | | 608,939 | | | | 587,161 | | | | 561,227 | |
| Total deposits | | | 3,916,568 | | | | 3,643,582 | | | | 3,010,960 | | | | 3,333,187 | | | | 3,388,963 | |
| Other borrowings | | | 790,192 | | | | 1,059,572 | | | | 1,386,783 | | | | 1,280,607 | | | | 835,025 | |
| Long-term debt | | | 113,406 | | | | 113,406 | | | | 113,406 | | | | 113,406 | | | | 113,406 | |
| Stockholders’ equity | | | 474,044 | | | | 464,026 | | | | 471,990 | | | | 387,073 | | | | 380,858 | |
| | | | | | | | | | | |
| End of period shares | | | 35,802,485 | | | | 35,688,661 | | | | 31,014,575 | | | | 30,971,189 | | | | 30,844,202 | |
| Book value (excluding securities gains/losses) | | $ | 13.05 | | | $ | 12.87 | | | $ | 12.64 | | | $ | 12.44 | | | $ | 12.33 | |
| Tangible book value (excluding securities gains/losses) | | $ | 12.84 | | | $ | 12.66 | | | $ | 12.39 | | | $ | 12.19 | | | $ | 12.08 | |
| | | | | | | | | | | |
| SELECTED FINANCIAL RATIOS | | | | | | | | | | |
| From continuing operations: | | | | | | | | | | |
| Net interest margin | | | 4.06 | % | | | 3.88 | % | | | 3.39 | % | | | 3.41 | % | | | 3.47 | % |
| Return on average assets | | | .40 | % | | | .49 | % | | | .48 | % | | | .29 | % | | | .65 | % |
| Return on average equity | | | 4.46 | % | | | 5.45 | % | | | 5.44 | % | | | 3.61 | % | | | 9.12 | % |
| Non-interest income to earning assets | | | .56 | % | | | .59 | % | | | .56 | % | | | .52 | % | | | .44 | % |
| Efficiency ratio | | | 63.1 | % | | | 62.9 | % | | | 63.0 | % | | | 63.7 | % | | | 64.1 | % |
| Non-interest expense to earning assets | | | 2.91 | % | | | 2.80 | % | | | 2.48 | % | | | 2.49 | % | | | 2.49 | % |
| From consolidated: | | | | | | | | | | |
| Net interest margin | | | 4.06 | % | | | 3.88 | % | | | 3.39 | % | | | 3.41 | % | | | 3.47 | % |
| Return on average assets | | | .40 | % | | | .48 | % | | | .47 | % | | | .28 | % | | | .63 | % |
| Return on average equity | | | 4.43 | % | | | 5.41 | % | | | 5.36 | % | | | 3.50 | % | | | 8.81 | % |
| | | | | | | | | | | |
| Tangible common equity to total tangible assets | | | 8.7 | % | | | 8.6 | % | | | 7.8 | % | | | 7.4 | % | | | 7.9 | % |
| Tier 1 capital ratio | | | 11.2 | % | | | 11.2 | % | | | 11.9 | % | | | 10.0 | % | | | 10.5 | % |
| Total capital ratio | | | 12.5 | % | | | 12.3 | % | | | 13.0 | % | | | 10.9 | % | | | 11.4 | % |
| Tier 1 leverage ratio | | | 10.8 | % | | | 10.6 | % | | | 11.0 | % | | | 10.2 | % | | | 10.5 | % |
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| TEXAS CAPITAL BANCSHARES, INC. |
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| CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
| (Dollars in thousands) |
| | | September 30, | | September 30, | | % |
| | | 2009 | | 2008 | | Change |
| Assets | | | | | | |
| Cash and due from banks | | $ | 60,365 | | | $ | 64,738 | | | (7 | )% |
| Federal funds sold | | | 240 | | | | 3,050 | | | (92 | )% |
| Securities, available-for-sale | | | 285,869 | | | | 365,145 | | | (22 | )% |
| Loans held for sale | | | 549,787 | | | | 343,002 | | | 60 | % |
| Loans held for sale from discontinued operations | | | 589 | | | | 648 | | | (9 | )% |
| Loans held for investment (net of unearned income) | | | 4,290,453 | | | | 3,840,172 | | | 12 | % |
| Less: Allowance for loan losses | | | 68,368 | | | | 40,998 | | | 67 | % |
| Loans held for investment, net | | | 4,222,085 | | | | 3,799,174 | | | 11 | % |
| Premises and equipment, net | | | 11,473 | | | | 6,081 | | | 89 | % |
| Accrued interest receivable and other assets | | | 180,465 | | | | 153,124 | | | 18 | % |
| Goodwill and intangibles, net | | | 7,567 | | | | 7,729 | | | (2 | )% |
| Total assets | | $ | 5,318,440 | | | $ | 4,742,691 | | | 12 | % |
| | | | | | | |
| Liabilities and Stockholders’ Equity | | | | | | |
| Liabilities: | | | | | | |
| Deposits: | | | | | | |
| Non-interest bearing | | $ | 802,692 | | | $ | 561,227 | | | 43 | % |
| Interest bearing | | | 2,720,011 | | | | 2,143,944 | | | 27 | % |
| Interest bearing in foreign branches | | | 393,865 | | | | 683,792 | | | (42 | )% |
| Total deposits | | | 3,916,568 | | | | 3,388,963 | | | 16 | % |
| | | | | | | |
| Accrued interest payable | | | 2,516 | | | | 5,508 | | | (54 | )% |
| Other liabilities | | | 21,714 | | | | 18,931 | | | 15 | % |
| Federal funds purchased | | | 616,029 | | | | 240,405 | | | 156 | % |
| Repurchase agreements | | | 65,422 | | | | 42,032 | | | 56 | % |
| Other short-term borrowings | | | 108,741 | | | | 552,588 | | | (80 | )% |
| Trust preferred subordinated debentures | | | 113,406 | | | | 113,406 | | | - | |
| Total liabilities | | | 4,844,396 | | | | 4,368,833 | | | 11 | % |
| | | | | | | |
| Stockholders’ equity: | | | | | | |
| Common stock, $.01 par value: | | | | | | |
| Authorized shares – 100,000,000 | | | | | | |
| Issued shares – 35,802,485 and 30,844,202 at September 30, 2009 and 2008, respectively | | | 358 | | | | 308 | | | 16 | % |
| Additional paid-in capital | | | 324,724 | | | | 253,599 | | | 28 | % |
| Retained earnings | | | 142,248 | | | | 126,464 | | | 12 | % |
| Treasury stock (shares at cost: 417 at September 30, 2009 and 84,691 at September 30, 2008) | | | (8 | ) | | | (581 | ) | | (99 | )% |
| Deferred compensation | | | – | | | | 573 | | | (100 | )% |
| Accumulated other comprehensive income, net of taxes | | | 6,722 | | | | 495 | | | N/M | |
| Total stockholders’ equity | | | 474,044 | | | | 380,858 | | | 24 | % |
| Total liabilities and stockholders’ equity | | $ | 5,318,440 | | | $ | 4,742,691 | | | 12 | % |
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| TEXAS CAPITAL BANCSHARES, INC. | | | | | | | | |
| | | | | | | | | |
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | | | | | | | | |
| (Dollars in thousands except per share data) | | | | | | | | |
| | | Three Months Ended | | Nine Months Ended |
| | | September 30 | | September 30 |
| | | 2009 | | 2008 | | 2009 | | 2008 |
| Interest income | | | | | | | | |
| Interest and fees on loans | | $ | 58,959 | | | $ | 57,909 | | | $ | 167,326 | | | $ | 176,195 | |
| Securities | | | 3,226 | | | | 4,281 | | | | 10,621 | | | | 13,691 | |
| Federal funds sold | | | 5 | | | | 40 | | | | 29 | | | | 141 | |
| Deposits in other banks | | | 7 | | | | 10 | | | | 40 | | | | 30 | |
| Total interest income | | | 62,197 | | | | 62,240 | | | | 178,016 | | | | 190,057 | |
| Interest expense | | | | | | | | |
| Deposits | | | 8,916 | | | | 18,338 | | | | 29,264 | | | | 56,777 | |
| Federal funds purchased | | | 586 | | | | 2,273 | | | | 1,944 | | | | 7,186 | |
| Repurchase agreements | | | 14 | | | | 86 | | | | 42 | | | | 462 | |
| Other borrowings | | | 125 | | | | 1,791 | | | | 1,873 | | | | 7,770 | |
| Trust preferred subordinated debentures | | | 990 | | | | 1,486 | | | | 3,308 | | | | 4,837 | |
| Total interest expense | | | 10,631 | | | | 23,974 | | | | 36,431 | | | | 77,032 | |
| Net interest income | | | 51,566 | | | | 38,266 | | | | 141,585 | | | | 113,025 | |
| Provision for loan losses | | | 13,500 | | | | 4,000 | | | | 33,000 | | | | 15,750 | |
| Net interest income after provision for loan losses | | | 38,066 | | | | 34,266 | | | | 108,585 | | | | 97,275 | |
| Non-interest income | | | | | | | | |
| Service charges on deposit accounts | | | 1,658 | | | | 1,161 | | | | 4,797 | | | | 3,566 | |
| Trust fee income | | | 1,000 | | | | 1,234 | | | | 2,836 | | | | 3,656 | |
| Bank owned life insurance (BOLI) income | | | 418 | | | | 299 | | | | 1,115 | | | | 925 | |
| Brokered loan fees | | | 2,120 | | | | 1,024 | | | | 6,822 | | | | 2,168 | |
| Equipment rental income | | | 1,291 | | | | 1,487 | | | | 4,200 | | | | 4,513 | |
| Other | | | 646 | | | | (320 | ) | | | 1,679 | | | | 1,692 | |
| Total non-interest income | | | 7,133 | | | | 4,885 | | | | 21,449 | | | | 16,520 | |
| Non-interest expense | | | | | | | | |
| Salaries and employee benefits | | | 19,569 | | | | 16,039 | | | | 53,788 | | | | 46,750 | |
| Net occupancy expense | | | 3,164 | | | | 2,300 | | | | 9,305 | | | | 7,097 | |
| Leased equipment depreciation | | | 1,050 | | | | 1,153 | | | | 3,288 | | | | 3,525 | |
| Marketing | | | 705 | | | | 521 | | | | 1,915 | | | | 1,847 | |
| Legal and professional | | | 3,274 | | | | 2,358 | | | | 8,816 | | | | 6,829 | |
| Communications and data processing | | | 935 | | | | 858 | | | | 2,750 | | | | 2,482 | |
| FDIC insurance assessment | | | 1,452 | | | | 432 | | | | 6,492 | | | | 1,154 | |
| Allowance and other carrying costs for OREO | | | 2,390 | | | | 239 | | | | 3,968 | | | | 668 | |
| Other | | | 4,528 | | | | 3,775 | | | | 12,424 | | | | 10,856 | |
| Total non-interest expense | | | 37,067 | | | | 27,675 | | | | 102,746 | | | | 81,208 | |
| Income from continuing operations before income taxes | | | 8,132 | | | | 11,476 | | | | 27,288 | | | | 32,587 | |
| Income tax expense | | | 2,779 | | | | 3,911 | | | | 9,328 | | | | 11,192 | |
| Income from continuing operations | | | 5,353 | | | | 7,565 | | | | 17,960 | | | | 21,395 | |
| Loss from discontinued operations (after-tax) | | | (41 | ) | | | (252 | ) | | | (180 | ) | | | (516 | ) |
| Net income | | | 5,312 | | | | 7,313 | | | | 17,780 | | | | 20,879 | |
| Preferred stock dividends | | | – | | | | – | | | | 5,383 | | | | – | |
| Net income available to common stockholders | | $ | 5,312 | | | $ | 7,313 | | | $ | 12,397 | | | $ | 20,879 | |
| | | | | | | | | |
| Basic earnings per common share: | | | | | | | | |
| Income from continuing operations | | $ | .15 | | | $ | .27 | | | $ | .38 | | | $ | .79 | |
| Net income | | $ | .15 | | | $ | .26 | | | $ | .37 | | | $ | .77 | |
| | | | | | | | | |
| Diluted earnings per common share: | | | | | | | | |
| Income from continuing operations | | $ | .15 | | | $ | .27 | | | $ | .37 | | | $ | .79 | |
| Net income | | $ | .15 | | | $ | .26 | | | $ | .37 | | | $ | .77 | |
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| TEXAS CAPITAL BANCSHARES, INC. |
| |
| SUMMARY OF LOAN LOSS EXPERIENCE |
| (Dollars in thousands) |
| | | 3rd Quarter | | 2nd Quarter | | 1st Quarter | | 4th Quarter | | 3rd Quarter |
| | | 2009 | | 2009 | | 2009 | | 2008 | | 2008 |
| | | | | | | | | | | |
| Beginning balance | | $ | 56,893 | | | $ | 52,727 | | | $ | 46,835 | | | $ | 40,998 | | | $ | 38,460 | |
| Loans charged-off: | | | | | | | | | | |
| Commercial | | | 115 | | | | 92 | | | | 1,695 | | | | 535 | | | | 592 | |
| Real estate – construction | | | 576 | | | | 1,821 | | | | 60 | | | | 1,195 | | | | 553 | |
| Real estate – term | | | 1,239 | | | | 1,250 | | | | 236 | | | | 3,432 | | | | 267 | |
| Consumer | | | 80 | | | | – | | | | 419 | | | | 64 | | | | 129 | |
| Leases | | | 72 | | | | 3,724 | | | | 226 | | | | – | | | | – | |
| Total | | | 2,082 | | | | 6,887 | | | | 2,636 | | | | 5,226 | | | | 1,541 | |
| Recoveries: | | | | | | | | | | |
| Commercial | | | 21 | | | | 48 | | | | 21 | | | | 43 | | | | 27 | |
| Consumer | | | 16 | | | | 5 | | | | – | | | | – | | | | 13 | |
| Leases | | | 20 | | | | – | | | | – | | | | – | | | | 12 | |
| Real estate – construction | | | – | | | | – | | | | 7 | | | | – | | | | – | |
| Real estate – term | | | – | | | | – | | | | – | | | | 20 | | | | 27 | |
| Total recoveries | | | 57 | | | | 53 | | | | 28 | | | | 63 | | | | 79 | |
| Net charge-offs | | | 2,025 | | | | 6,834 | | | | 2,608 | | | | 5,163 | | | | 1,462 | |
| Provision for loan losses | | | 13,500 | | | | 11,000 | | | | 8,500 | | | | 11,000 | | | | 4,000 | |
| Ending balance | | $ | 68,368 | | | $ | 56,893 | | | $ | 52,727 | | | $ | 46,835 | | | $ | 40,998 | |
| | | | | | | | | | | |
| Reserve to loans held for investment(2) | | | 1.59 | % | | | 1.35 | % | | | 1.31 | % | | | 1.16 | % | | | 1.07 | % |
| Reserve to average loans held for investment(2) | | | 1.60 | % | | | 1.38 | % | | | 1.31 | % | | | 1.21 | % | | | 1.08 | % |
| Net charge-offs to average loans(1)(2) | | | .19 | % | | | .66 | % | | | .26 | % | | | .53 | % | | | .15 | % |
| Net charge-offs to average loans for last twelve months(1)(2) | | | .41 | % | | | .41 | % | | | .34 | % | | | .35 | % | | | .28 | % |
| Provision for loan losses to average loans(1)(2) | | | 1.26 | % | | | 1.07 | % | | | .85 | % | | | 1.13 | % | | | .42 | % |
| | | | | | | | | | | |
| Non-performing assets (NPAs): (4) | | | | | | | | | | |
| Non-accrual loans | | $ | 85,270 | | | $ | 49,592 | | | $ | 50,683 | | | $ | 47,499 | | | $ | 46,579 | |
| Other real estate owned (OREO) (5) | | | 34,671 | | | | 31,404 | | | | 27,501 | | | | 25,904 | | | | 5,792 | |
| Total | | $ | 119,941 | | | $ | 80,996 | | | $ | 78,184 | | | $ | 73,403 | | | $ | 52,371 | |
| | | | | | | | | | | |
| Non-accrual loans to loans(2) | | | 1.99 | % | | | 1.18 | % | | | 1.26 | % | | | 1.18 | % | | | 1.21 | % |
| Total NPAs to loans plus OREO | | | 2.77 | % | | | 1.91 | % | | | 1.93 | % | | | 1.81 | % | | | 1.36 | % |
| Reserve to non-accrual loans | | .8x | | 1.1x | | 1.0x | | 1.0x | | .9x |
| | | | | | | | | | | |
| Loans past due 90 days and still accruing(3) | | $ | 7,569 | | | $ | 3,539 | | | $ | 4,637 | | | $ | 4,115 | | | $ | 2,970 | |
| | | | | | | | | | | |
| Loans past due 90 days to loans(2) | | | .18 | % | | | .08 | % | | | .12 | % | | | .10 | % | | | .08 | % |
(1) Interim period ratios are annualized.
(2) Excludes loans held for sale.
(3) At September 30, 2009, loans past due 90 days and still accruing includes premium finance loans of $2.6 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 September 30, 2009, non-performing assets include $3.1 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.
(5) At September 30, 2009, OREO balance is net of $2.2 million valuation allowance.
| |
| TEXAS CAPITAL BANCSHARES, INC. |
| |
| CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) |
| (Dollars in thousands) |
| | | | | | | | | | | |
| | | 3rd Quarter | | 2nd Quarter | | 1st Quarter | | 4th Quarter | | 3rd Quarter |
| | | 2009 | | 2009 | | 2009 | | 2008 | | 2008 |
| Interest income | | | | | | | | | | |
| Interest and fees on loans | | $ | 58,959 | | | $ | 56,455 | | | $ | 51,912 | | | $ | 54,814 | | | $ | 57,909 | |
| Securities | | | 3,226 | | | | 3,544 | | | | 3,851 | | | | 4,031 | | | | 4,281 | |
| Federal funds sold | | | 5 | | | | 9 | | | | 15 | | | | 27 | | | | 40 | |
| Deposits in other banks | | | 7 | | | | 5 | | | | 28 | | | | 1 | | | | 10 | |
| Total interest income | | | 62,197 | | | | 60,013 | | | | 55,806 | | | | 58,873 | | | | 62,240 | |
| Interest expense | | | | | | | | | | |
| Deposits | | | 8,916 | | | | 8,769 | | | | 11,579 | | | | 16,075 | | | | 18,338 | |
| Federal funds purchased | | | 586 | | | | 740 | | | | 618 | | | | 1,046 | | | | 2,273 | |
| Repurchase agreements | | | 14 | | | | 14 | | | | 14 | | | | 79 | | | | 86 | |
| Other borrowings | | | 125 | | | | 570 | | | | 1,178 | | | | 1,353 | | | | 1,791 | |
| Trust preferred subordinated debentures | | | 990 | | | | 1,118 | | | | 1,200 | | | | 1,608 | | | | 1,486 | |
| Total interest expense | | | 10,631 | | | | 11,211 | | | | 14,589 | | | | 20,161 | | | | 23,974 | |
| Net interest income | | | 51,566 | | | | 48,802 | | | | 41,217 | | | | 38,712 | | | | 38,266 | |
| Provision for loan losses | | | 13,500 | | | | 11,000 | | | | 8,500 | | | | 11,000 | | | | 4,000 | |
| Net interest income after provision for loan losses | | | 38,066 | | | | 37,802 | | | | 32,717 | | | | 27,712 | | | | 34,266 | |
| Non-interest income | | | | | | | | | | |
| Service charges on deposit accounts | | | 1,658 | | | | 1,614 | | | | 1,525 | | | | 1,133 | | | | 1,161 | |
| Trust fee income | | | 1,000 | | | | 952 | | | | 884 | | | | 1,036 | | | | 1,234 | |
| Bank owned life insurance (BOLI) income | | | 418 | | | | 423 | | | | 274 | | | | 315 | | | | 299 | |
| Brokered loan fees | | | 2,120 | | | | 2,670 | | | | 2,032 | | | | 1,074 | | | | 1,024 | |
| Equipment rental income | | | 1,291 | | | | 1,453 | | | | 1,456 | | | | 1,482 | | | | 1,487 | |
| Other | | | 646 | | | | 304 | | | | 729 | | | | 910 | | | | (320 | ) |
| Total non-interest income | | | 7,133 | | | | 7,416 | | | | 6,900 | | | | 5,950 | | | | 4,885 | |
| Non-interest expense | | | | | | | | | | |
| Salaries and employee benefits | | | 19,569 | | | | 18,000 | | | | 16,219 | | | | 14,688 | | | | 16,039 | |
| Net occupancy expense | | | 3,164 | | | | 3,387 | | | | 2,754 | | | | 2,534 | | | | 2,300 | |
| Leased equipment depreciation | | | 1,050 | | | | 1,115 | | | | 1,123 | | | | 1,142 | | | | 1,153 | |
| Marketing | | | 705 | | | | 655 | | | | 555 | | | | 882 | | | | 521 | |
| Legal and professional | | | 3,274 | | | | 3,291 | | | | 2,251 | | | | 2,793 | | | | 2,358 | |
| Communications and data processing | | | 935 | | | | 979 | | | | 836 | | | | 832 | | | | 858 | |
| FDIC insurance assessment | | | 1,452 | | | | 3,493 | | | | 1,547 | | | | 643 | | | | 432 | |
| Allowance and other carrying costs for OREO | | | 2,390 | | | | 378 | | | | 1,200 | | | | 873 | | | | 239 | |
| Other | | | 4,528 | | | | 4,075 | | | | 3,821 | | | | 4,056 | | | | 3,775 | |
| Total non-interest expense | | | 37,067 | | | | 35,373 | | | | 30,306 | | | | 28,443 | | | | 27,675 | |
| Income from continuing operations before income taxes | | | 8,132 | | | | 9,845 | | | | 9,311 | | | | 5,219 | | | | 11,476 | |
| Income tax expense | | | 2,779 | | | | 3,363 | | | | 3,186 | | | | 1,732 | | | | 3,911 | |
| Income from continuing operations | | | 5,353 | | | | 6,482 | | | | 6,125 | | | | 3,487 | | | | 7,565 | |
| Loss from discontinued operations (after-tax) | | | (41 | ) | | | (44 | ) | | | (95 | ) | | | (100 | ) | | | (252 | ) |
| Net income | | | 5,312 | | | | 6,438 | | | | 6,030 | | | | 3,387 | | | | 7,313 | |
| Preferred stock dividends | | | – | | | | 4,453 | | | | 930 | | | | – | | | | – | |
| Net income available to common stockholders | | $ | 5,312 | | | $ | 1,985 | | | $ | 5,100 | | | $ | 3,387 | | | $ | 7,313 | |
| |
| TEXAS CAPITAL BANCSHARES, INC. |
| |
| QUARTERLY FINANCIAL SUMMARY – UNAUDITED |
| Consolidated Daily Average Balances, Average Yields and Rates |
| Continuing Operations |
| (Dollars in thousands) |
| |
| | | 3rd Quarter 2009 | | 2nd Quarter 2009 | | 1st Quarter 2009 | | 4th Quarter 2008 | | 3rd 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 | | $ | 247,936 | | $ | 2,813 | | 4.50 | % | | $ | 280,372 | | $ | 3,124 | | 4.47 | % | | $ | 321,802 | | $ | 3,431 | | 4.32 | % | | $ | 313,992 | | $ | 3,610 | | 4.57 | % | | $ | 325,317 | | $ | 3,852 | | 4.71 | % |
| Securities – Non-taxable(2) | | | 44,642 | | | 635 | | 5.64 | % | | | 45,901 | | | 646 | | 5.64 | % | | | 46,055 | | | 646 | | 5.69 | % | | | 46,272 | | | 648 | | 5.57 | % | | | 47,271 | | | 660 | | 5.55 | % |
| Federal funds sold | | | 6,782 | | | 5 | | 0.29 | % | | | 5,649 | | | 9 | | 0.64 | % | | | 14,923 | | | 15 | | 0.41 | % | | | 23,050 | | | 27 | | 0.47 | % | | | 8,001 | | | 40 | | 1.99 | % |
| Deposits in other banks | | | 12,649 | | | 7 | | 0.22 | % | | | 12,268 | | | 5 | | 0.16 | % | | | 11,207 | | | 28 | | 1.01 | % | | | 5,761 | | | 1 | | 0.07 | % | | | 2,554 | | | 10 | | 1.56 | % |
| Loans held for sale | | | 539,889 | | | 6,881 | | 5.06 | % | | | 656,462 | | | 7,775 | | 4.75 | % | | | 587,401 | | | 6,487 | | 4.48 | % | | | 316,409 | | | 4,441 | | 5.58 | % | | | 288,103 | | | 4,137 | | 5.71 | % |
| Loans held for investment | | | 4,264,202 | | | 52,078 | | 4.85 | % | | | 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 | % |
| Less reserve for loan losses | | | 56,429 | | | – | | – | | | | 51,601 | | | – | | – | | | | 46,686 | | | – | | – | | | | 38,145 | | | – | | – | | | | 38,180 | | | – | | – | |
| Loans, net of reserve | | | 4,747,662 | | | 58,959 | | 4.93 | % | | | 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 | % |
| Total earning assets | | | 5,059,671 | | | 62,419 | | 4.89 | % | | | 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 | % |
| Cash and other assets | | | 245,564 | | | | | | | 251,960 | | | | | | | 238,723 | | | | | | | 218,335 | | | | | | | 201,589 | | | | |
| Total assets | | $ | 5,305,235 | | | | | | $ | 5,325,948 | | | | | | $ | 5,195,605 | | | | | | $ | 4,761,260 | | | | | | $ | 4,615,944 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Transaction deposits | | $ | 144,944 | | $ | 58 | | 0.16 | % | | $ | 135,756 | | $ | 55 | | 0.16 | % | | $ | 129,850 | | $ | 44 | | 0.14 | % | | $ | 103,111 | | $ | 67 | | 0.26 | % | | $ | 103,905 | | $ | 122 | | 0.47 | % |
| Savings deposits | | | 1,377,712 | | | 3,090 | | 0.89 | % | | | 974,275 | | | 2,003 | | 0.82 | % | | | 745,355 | | | 1,420 | | 0.77 | % | | | 729,337 | | | 2,350 | | 1.28 | % | | | 778,956 | | | 3,371 | | 1.72 | % |
| Time deposits | | | 1,284,220 | | | 4,245 | | 1.31 | % | | | 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 | % |
| Deposits in foreign branches | | | 404,545 | | | 1,523 | | 1.49 | % | | | 394,251 | | | 1,606 | | 1.63 | % | | | 444,549 | | | 2,049 | | 1.87 | % | | | 555,573 | | | 3,055 | | 2.19 | % | | | 720,211 | | | 4,321 | | 2.39 | % |
| Total interest bearing deposits | | | 3,211,421 | | | 8,916 | | 1.10 | % | | | 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 | % |
| Other borrowings | | | 724,127 | | | 725 | | 0.40 | % | | | 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 | % |
| Trust preferred subordinated debentures | | | 113,406 | | | 990 | | 3.46 | % | | | 113,406 | | | 1,118 | | 3.95 | % | | | 113,406 | | | 1,200 | | 4.29 | % | | | 113,406 | | | 1,608 | | 5.64 | % | | | 113,406 | | | 1,486 | | 5.21 | % |
| Total interest bearing liabilities | | | 4,048,954 | | | 10,631 | | 1.04 | % | | | 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 | % |
| Demand deposits | | | 764,557 | | | | | | | 724,487 | | | | | | | 636,704 | | | | | | | 566,513 | | | | | | | 567,914 | | | | |
| Other liabilities | | | 15,617 | | | | | | | 18,899 | | | | | | | 23,619 | | | | | | | 21,323 | | | | | | | 16,452 | | | | |
| Stockholders’ equity | | | 476,107 | | | | | | | 477,302 | | | | | | | 456,607 | | | | | | | 384,703 | | | | | | | 330,145 | | | | |
| Total liabilities and stockholders’ equity | | $ | 5,305,235 | | | | | | $ | 5,325,948 | | | | | | $ | 5,195,605 | | | | | | $ | 4,761,260 | | | | | | $ | 4,615,944 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | | $ | 51,788 | | | | | | $ | 49,028 | | | | | | $ | 41,443 | | | | | | $ | 38,939 | | | | | | $ | 38,497 | | |
| Net interest margin | | | | | | 4.06 | % | | | | | | 3.88 | % | | | | | | 3.39 | % | | | | | | 3.41 | % | | | | | | 3.47 | % |
(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.
