Texas Capital Bancshares, Inc. (NASDAQ:TCBI), the parent company of
Texas Capital Bank, announced earnings and operating results for
the first quarter of 2016.
“We started 2016 with good core loan growth, and
a solid mortgage finance quarter," said Keith Cargill, CEO. "As
energy prices remain low across the futures curve, we have
accelerated planned loan loss provisions but continue to believe
that full-year guidance provided in January will accommodate first
quarter provision and potential exposure for the remainder of 2016.
Our MCA business continues to gain traction, positioning it to
contribute more significantly in the last half of 2016."
- Loans held for investment ("LHI"), excluding mortgage finance,
increased 3% and total LHI increased 2% on a linked quarter basis,
growing 12% and 5%, respectively, from the first quarter of
2015.
- Mortgage finance loans increased less than 1% on a linked
quarter basis and decreased 8% from the first quarter of 2015.
- Demand deposits increased 17% and total deposits increased 8%
on a linked quarter basis, growing 23% and 15%, respectively, from
the first quarter of 2015.
- Net income decreased 28% on a linked quarter basis and
decreased 28% from the first quarter of 2015.
- EPS decreased 30% on a linked quarter basis, and decreased 30%
from the first quarter of 2015.
FINANCIAL SUMMARY |
(dollars
and shares in thousands) |
|
|
|
Q1 2016 |
|
Q1 2015 |
|
% Change |
QUARTERLY OPERATING
RESULTS |
|
|
|
|
|
|
Net income |
|
$ |
25,128 |
|
|
$ |
35,050 |
|
|
(28 |
)% |
Net income available to
common stockholders |
|
$ |
22,690 |
|
|
$ |
32,612 |
|
|
(30 |
)% |
Diluted EPS |
|
$ |
0.49 |
|
|
$ |
0.70 |
|
|
(30 |
)% |
Diluted shares |
|
46,354 |
|
|
46,368 |
|
|
— |
% |
ROA |
|
0.53 |
% |
|
0.84 |
% |
|
|
ROE |
|
6.13 |
% |
|
9.82 |
% |
|
|
|
|
|
|
|
|
|
BALANCE SHEET |
|
|
|
|
|
|
Loans held for
sale |
|
$ |
94,702 |
|
|
$ |
— |
|
|
100 |
% |
LHI, mortgage
finance |
|
4,981,304 |
|
|
5,408,750 |
|
|
(8 |
)% |
LHI |
|
12,059,849 |
|
|
10,760,978 |
|
|
12 |
% |
Total LHI |
|
17,041,153 |
|
|
16,169,728 |
|
|
5 |
% |
Total assets |
|
20,210,893 |
|
|
17,326,260 |
|
|
17 |
% |
Demand deposits |
|
7,455,107 |
|
|
6,050,817 |
|
|
23 |
% |
Total deposits |
|
16,298,847 |
|
|
14,122,306 |
|
|
15 |
% |
Stockholders’
equity |
|
1,647,088 |
|
|
1,517,958 |
|
|
9 |
% |
Tangible book value per
share |
|
$ |
32.18 |
|
|
$ |
29.44 |
|
|
9 |
% |
DETAILED FINANCIALSTexas Capital Bancshares,
Inc. reported net income of $25.1 million and net income available
to common stockholders of $22.7 million for the quarter ended
March 31, 2016 compared to net income of $35.1 million and net
income available to common stockholders of $32.6 million for the
same period in 2015. On a fully diluted basis, earnings per common
share were $0.49 for the quarter ended March 31, 2016 compared
to $0.70 for the same period of 2015. The decrease reflects a $9.9
million decrease in net income, primarily related to the increased
provision for credit losses described in more detail below.
Return on average common equity (“ROE”) was 6.13
percent and return on average assets (“ROA”) was 0.53 percent for
the first quarter of 2016, compared to 9.82 percent and 0.84
percent, respectively, for the first quarter of 2015. The decrease
in ROE resulted from the increased provision for credit losses. The
decrease in ROA resulted from the increased provision for credit
losses, reduced yields on loans held for investment, excluding
mortgage finance loans, and a $742.7 million increase in average
liquidity assets, which include Federal funds sold and deposits in
other banks. Average liquidity assets for the first quarter of 2016
totaled $3.0 billion, including $2.6 billion in deposits at the
Federal Reserve Bank of Dallas, which had an average yield of 50
basis points, compared to $2.0 billion, which had an average yield
of 25 basis points for the first quarter of 2015.
Net interest income was $144.8 million for the
first quarter of 2016, compared to $130.0 million for the first
quarter of 2015 and $142.2 million for the fourth quarter of 2015.
Net interest margin for the first quarter of 2016 was 3.13 percent,
a 9 basis point decrease from the first quarter of 2015 and a 12
basis point increase from the fourth quarter of 2015. The
year-over-year decrease in net interest margin is due primarily to
the increase in liquidity assets, as well as an increase in
deposits and borrowings with higher average cost. The cost of total
deposits and borrowed funds was 24 basis points for the first
quarter of 2016, compared to 17 basis points for the first quarter
of 2015 and 18 basis points for the fourth quarter of 2015.
Average LHI, excluding mortgage finance loans,
for the first quarter of 2016 were $11.9 billion, an increase of
$1.4 billion, or 13 percent, from the first quarter of 2015, and an
increase of $217.3 million, or 2 percent, from the fourth quarter
of 2015. Average mortgage finance loans for the first quarter of
2016 were $3.7 billion, a decrease of $22.4 million, or less than 1
percent, from the first quarter of 2015 and an increase of $55.5
million, or 2 percent, from the fourth quarter of 2015.
As previously announced, we successfully launched our Mortgage
Correspondent Aggregation ("MCA") business late in the third
quarter of 2015. As expected, the acquired mortgage assets are
providing increases in yields and we anticipate that the MCA
business will provide larger balances of loans held for sale and
more efficient use of regulatory capital over time. Average loans
held for sale for the quarter ended March 31, 2016 increased
$101.4 million to $126.1 million compared to $24.7 million for the
fourth quarter of 2015.
Average total deposits for the first quarter of
2016 increased $1.9 billion from the first quarter of 2015 and
decreased $181.4 million from the fourth quarter of 2015. Average
demand deposits for the first quarter of 2016 increased $1.1
billion, or 20 percent, to $6.7 billion from $5.6 billion during
the first quarter of 2015 and decreased $25.0 million, or less than
1 percent, from the fourth quarter of 2015.
We recorded a $30.0 million provision for credit
losses for the first quarter of 2016 compared to $11.0 million for
the first quarter of 2015 and $14.0 million for the fourth quarter
of 2015. The provision for the first quarter of 2016 was driven by
the application of our methodology. The year-over-year increase was
primarily related to a change in applied risk weights, which are
based in part on historical loss experience, as well as changes in
the composition of our pass-rated and classified loan portfolios,
primarily related to energy loans, and growth in traditional LHI,
excluding mortgage finance loans. The combined allowance for credit
losses at March 31, 2016 increased to 1.43 percent of LHI
excluding mortgage finance loans as compared to 1.08 percent at
March 31, 2015 and 1.28 percent at December 31, 2015. The
increase derived from increases in the provision for credit losses
primarily related to energy as well as continuing loan growth in
2016. In management’s opinion, the allowance is appropriate
and is derived from consistent application of the methodology for
establishing reserves for Texas Capital Bank’s loan portfolio.
We experienced a slight increase in
non-performing assets in the first quarter of 2016 on a linked
quarter basis, bringing the ratio of total non-performing assets to
total LHI plus other real estate owned (“OREO”) to 1.12 percent
compared to 0.43 percent for the first quarter of 2015 and 1.08
percent for the fourth quarter of 2015. The increase is primarily
related to energy loans, which was expected as energy prices remain
low. Net charge-offs for the first quarter of 2016 were $7.4
million compared to net charge-offs of $3.1 million for the first
quarter of 2015 and net charge-offs of $2.0 million for the fourth
quarter of 2015. For the first quarter of 2016, total charge-offs
related to energy loans were $5.9 million. For the first quarter of
2016, net charge-offs were 0.19 percent of total LHI, compared to
0.09 percent for the same period in 2015 and 0.05 percent for the
fourth quarter of 2015. At March 31, 2016, total OREO was
$17.6 million compared to $605,000 at March 31, 2015 and
$278,000 at December 31, 2015. The increase was due to foreclosure
of a single commercial property during the first quarter of
2016.
Non-interest income decreased $970,000, or 8
percent, during the first quarter of 2016 compared to the same
period of 2015, primarily related to a decrease in swap fees. Swap
fees decreased $1.7 million during the first quarter of 2016
compared to the same period of 2015. These fees fluctuate from
quarter to quarter based on the number and volume of transactions
closed during the quarter.
Non-interest expense for the first quarter of
2016 increased $10.3 million, or 13 percent, compared to the first
quarter of 2015. The increase is primarily related to a $5.5
million increase in salaries and employee benefits expense, a $1.3
million increase in legal and professional expense and a $1.1
million increase in communications and technology expense, all of
which were due to general business growth. FDIC insurance
assessment expense for the first quarter of 2016 increased $1.7
million compared to the same quarter in 2015 as a result of the
increase in total assets from March 31, 2015 to March 31,
2016.
Stockholders’ equity increased by 9 percent from
$1.5 billion at March 31, 2015 to $1.6 billion at
March 31, 2016, primarily due to retention of net income.
Texas Capital Bank is well capitalized under regulatory guidelines
and at March 31, 2016, our ratio of tangible common equity to
total tangible assets was 7.3 percent.
ABOUT TEXAS CAPITAL BANCSHARES,
INC.Texas Capital Bancshares, Inc. (NASDAQ:TCBI), a member
of the Russell 2000® Index and the S&P SmallCap 600®, is the
parent company of Texas Capital Bank, a commercial bank that
delivers highly personalized financial services to businesses and
entrepreneurs. Headquartered in Dallas, the bank has full-service
locations in Austin, Dallas, Fort Worth, Houston and San
Antonio.
This news release may be deemed to include forward-looking
statements which are based on management’s current estimates or
expectations of future events or future results. These statements
are not historical in nature and can generally be identified by
such words as “believe,” “expect,” “estimate,” “anticipate,”
“plan,” “may,” “will,” “intend” and similar expressions. A number
of factors, many of which are beyond our control, could cause
actual results to differ materially from future results expressed
or implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, the credit quality
of our loan portfolio, general economic conditions in the United
States and in our markets, including the continued impact on our
customers from declines and volatility in oil and gas prices, rates
of default or loan losses, volatility in the mortgage industry, the
success or failure of our business strategies, future financial
performance, future growth and earnings, the appropriateness of our
allowance for loan losses and provision for credit losses, the
impact of increased regulatory requirements and legislative changes
on our business, increased competition, interest rate risk, the
success or failure of new lines of business and new product or
service offerings and the impact of new technologies. These and
other factors that could cause results to differ materially from
those described in the forward-looking statements, as well as a
discussion of the risks and uncertainties that may affect our
business, can be found in our Annual Report on Form 10-K and in
other filings we make with the Securities and Exchange Commission.
The information contained in this release speaks only as of its
date. We are under no obligation, and expressly disclaim such
obligation, to update, alter or revise our forward-looking
statements, whether as a result of new information, future events,
or otherwise.
TEXAS CAPITAL BANCSHARES, INC. |
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) |
(Dollars
in thousands except per share data) |
|
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
1st Quarter |
|
2016 |
2015 |
2015 |
2015 |
2015 |
CONSOLIDATED
STATEMENTS OF INCOME |
|
|
|
|
|
Interest income |
$ |
159,803 |
|
$ |
154,820 |
|
$ |
153,856 |
|
$ |
153,374 |
|
$ |
140,908 |
|
Interest expense |
15,020 |
|
12,632 |
|
11,808 |
|
11,089 |
|
10,899 |
|
Net
interest income |
144,783 |
|
142,188 |
|
142,048 |
|
142,285 |
|
130,009 |
|
Provision for credit losses |
30,000 |
|
14,000 |
|
13,750 |
|
14,500 |
|
11,000 |
|
Net interest income
after provision for credit losses |
114,783 |
|
128,188 |
|
128,298 |
|
127,785 |
|
119,009 |
|
Non-interest income |
11,297 |
|
11,320 |
|
11,380 |
|
12,771 |
|
12,267 |
|
Non-interest expense |
86,820 |
|
87,042 |
|
81,688 |
|
81,276 |
|
76,517 |
|
Income before income
taxes |
39,260 |
|
52,466 |
|
57,990 |
|
59,280 |
|
54,759 |
|
Income tax expense |
14,132 |
|
17,713 |
|
20,876 |
|
21,343 |
|
19,709 |
|
Net
income |
25,128 |
|
34,753 |
|
37,114 |
|
37,937 |
|
35,050 |
|
Preferred stock dividends |
2,438 |
|
2,437 |
|
2,438 |
|
2,437 |
|
2,438 |
|
Net
income available to common stockholders |
$ |
22,690 |
|
$ |
32,316 |
|
$ |
34,676 |
|
$ |
35,500 |
|
$ |
32,612 |
|
|
|
|
|
|
|
Diluted EPS |
$ |
.49 |
|
$ |
.70 |
|
$ |
.75 |
|
$ |
.76 |
|
$ |
.70 |
|
Diluted shares |
46,354,378 |
|
46,479,845 |
|
46,471,390 |
|
46,443,413 |
|
46,367,870 |
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEET DATA |
|
|
|
|
|
Total
assets |
$ |
20,210,893 |
|
$ |
18,903,821 |
|
$ |
18,666,708 |
|
$ |
17,818,030 |
|
$ |
17,326,260 |
|
LHI |
12,059,849 |
|
11,745,674 |
|
11,562,828 |
|
11,123,325 |
|
10,760,978 |
|
LHI,
mortgage finance |
4,981,304 |
|
4,966,276 |
|
4,312,790 |
|
4,906,415 |
|
5,408,750 |
|
Loans
held for sale, at fair value |
94,702 |
|
86,075 |
|
1,062 |
|
— |
|
— |
|
Liquidity assets |
2,644,418 |
|
1,681,374 |
|
2,345,192 |
|
1,337,364 |
|
734,945 |
|
Securities |
28,461 |
|
29,992 |
|
31,998 |
|
35,361 |
|
37,649 |
|
Demand deposits |
7,455,107 |
|
6,386,911 |
|
6,545,273 |
|
6,479,073 |
|
6,050,817 |
|
Total
deposits |
16,298,847 |
|
15,084,619 |
|
15,165,345 |
|
14,188,276 |
|
14,122,306 |
|
Other
borrowings |
1,704,859 |
|
1,643,051 |
|
1,353,834 |
|
1,509,007 |
|
1,125,458 |
|
Subordinated notes |
280,773 |
|
280,682 |
|
280,592 |
|
280,501 |
|
280,411 |
|
Long-term debt |
113,406 |
|
113,406 |
|
113,406 |
|
113,406 |
|
113,406 |
|
Stockholders’ equity |
1,647,088 |
|
1,623,533 |
|
1,590,051 |
|
1,554,529 |
|
1,517,958 |
|
|
|
|
|
|
|
End
of period shares outstanding |
45,902,489 |
|
45,873,807 |
|
45,839,364 |
|
45,812,971 |
|
45,772,245 |
|
Book
value |
$ |
32.61 |
|
$ |
32.12 |
|
$ |
31.42 |
|
$ |
30.66 |
|
$ |
29.89 |
|
Tangible book
value(1) |
$ |
32.18 |
|
$ |
31.69 |
|
$ |
30.98 |
|
$ |
30.22 |
|
$ |
29.44 |
|
|
|
|
|
|
|
SELECTED FINANCIAL RATIOS |
|
|
|
|
|
Net
interest margin |
3.13 |
% |
3.01 |
% |
3.12 |
% |
3.22 |
% |
3.22 |
% |
Return on average assets |
0.53 |
% |
0.72 |
% |
0.79 |
% |
0.83 |
% |
0.84 |
% |
Return on average common equity |
6.13 |
% |
8.82 |
% |
9.69 |
% |
10.32 |
% |
9.82 |
% |
Non-interest income to earning assets |
0.24 |
% |
0.24 |
% |
0.25 |
% |
0.29 |
% |
0.30 |
% |
Efficiency ratio(2) |
55.6 |
% |
56.7 |
% |
53.2 |
% |
52.4 |
% |
53.8 |
% |
Non-interest expense to earning assets |
1.88 |
% |
1.84 |
% |
1.80 |
% |
1.84 |
% |
1.89 |
% |
Tangible common equity
to total tangible assets(3) |
7.3 |
% |
7.7 |
% |
7.6 |
% |
7.8 |
% |
7.8 |
% |
Common Equity Tier
1 |
7.5 |
% |
7.5 |
% |
7.7 |
% |
7.4 |
% |
7.2 |
% |
Tier 1 capital |
8.8 |
% |
8.8 |
% |
9.1 |
% |
8.8 |
% |
8.6 |
% |
Total capital |
11.1 |
% |
11.1 |
% |
11.4 |
% |
11.0 |
% |
10.7 |
% |
Leverage |
9.1 |
% |
8.9 |
% |
9.1 |
% |
9.0 |
% |
9.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
(1) Stockholders’ equity excluding preferred stock, less
goodwill and intangibles, divided by shares outstanding at period
end.(2) Non-interest expense divided by the sum of net interest
income and non-interest income.(3) Stockholders’ equity excluding
preferred stock and accumulated other comprehensive income less
goodwill and intangibles divided by total assets less accumulated
other comprehensive income and goodwill and intangibles.
TEXAS CAPITAL BANCSHARES, INC. |
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
(Dollars in
thousands) |
|
|
March 31, 2016 |
|
|
March 31, 2015 |
|
%Change |
Assets |
|
|
|
Cash and due from
banks |
$ |
89,277 |
|
$ |
99,602 |
|
(10 |
)% |
Interest-bearing
deposits |
2,614,418 |
|
734,945 |
|
256 |
% |
Federal funds sold and
securities purchased under resale agreements |
30,000 |
|
— |
|
100 |
% |
Securities,
available-for-sale |
28,461 |
|
37,649 |
|
(24 |
)% |
Loans held for sale, at
fair value |
94,702 |
|
— |
|
100 |
% |
LHI, mortgage
finance |
4,981,304 |
|
5,408,750 |
|
(8 |
)% |
LHI (net of unearned
income) |
12,059,849 |
|
10,760,978 |
|
12 |
% |
Less: Allowance
for loan losses |
162,510 |
|
108,078 |
|
50 |
% |
LHI, net |
16,878,643 |
|
16,061,650 |
|
5 |
% |
Mortgage servicing
rights, net |
4,253 |
|
— |
|
100 |
% |
Premises and equipment,
net |
22,924 |
|
22,428 |
|
2 |
% |
Accrued interest
receivable and other assets |
428,344 |
|
349,574 |
|
23 |
% |
Goodwill and
intangibles, net |
19,871 |
|
20,412 |
|
(3 |
)% |
Total assets |
$ |
20,210,893 |
|
$ |
17,326,260 |
|
17 |
% |
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
Liabilities: |
|
|
|
Deposits: |
|
|
|
Non-interest
bearing |
$ |
7,455,107 |
|
$ |
6,050,817 |
|
23 |
% |
Interest bearing |
8,843,740 |
|
7,816,310 |
|
13 |
% |
Interest bearing in
foreign branches |
— |
|
255,179 |
|
(100 |
)% |
Total
deposits |
16,298,847 |
|
14,122,306 |
|
15 |
% |
|
|
|
|
Accrued interest
payable |
2,880 |
|
2,545 |
|
13 |
% |
Other liabilities |
163,040 |
|
164,176 |
|
(1 |
)% |
Federal funds purchased
and repurchase agreements |
100,859 |
|
125,458 |
|
(20 |
)% |
Other borrowings |
1,604,000 |
|
1,000,000 |
|
60 |
% |
Subordinated notes |
280,773 |
|
280,411 |
|
— |
|
Trust preferred
subordinated debentures |
113,406 |
|
113,406 |
|
— |
|
Total liabilities |
18,563,805 |
|
15,808,302 |
|
17 |
% |
|
|
|
|
Stockholders’
equity: |
|
|
|
Preferred stock, $.01
par value, $1,000 liquidation value: |
|
|
|
Authorized shares -
10,000,000 |
|
|
|
Issued shares - 6,000,000 shares issued at March 31, 2016 and
2015 |
150,000 |
|
150,000 |
|
− |
Common stock, $.01 par value: |
|
|
|
Authorized shares -
100,000,000 |
|
|
|
Issued shares -
45,902,906 and 45,772,662 at March 31, 2016 and 2015,
respectively |
459 |
|
457 |
|
— |
% |
Additional paid-in capital |
715,435 |
|
710,943 |
|
1 |
% |
Retained earnings |
780,508 |
|
655,326 |
|
19 |
% |
Treasury stock (shares
at cost: 417 at March 31, 2016 and 2015) |
(8 |
) |
(8 |
) |
— |
|
Accumulated other comprehensive income, net of taxes |
694 |
|
1,240 |
|
(44 |
)% |
Total stockholders’
equity |
1,647,088 |
|
1,517,958 |
|
9 |
% |
Total liabilities and
stockholders’ equity |
$ |
20,210,893 |
|
$ |
17,326,260 |
|
17 |
% |
TEXAS CAPITAL
BANCSHARES, INC. |
|
|
CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED) |
|
|
(Dollars in thousands
except per share data) |
|
|
|
Three Months EndedMarch 31 |
|
2016 |
|
2015 |
Interest
Income |
|
Interest and fees on loans |
$ |
155,885 |
|
$ |
139,174 |
|
Securities |
261 |
|
358 |
|
Federal funds sold |
372 |
|
116 |
|
Deposits in other banks |
3,285 |
|
1,260 |
|
Total
interest income |
159,803 |
|
140,908 |
|
Interest expense |
|
|
Deposits |
8,822 |
|
5,628 |
|
Federal funds purchased |
126 |
|
68 |
|
Repurchase agreements |
3 |
|
4 |
|
Other
borrowings |
1,162 |
|
390 |
|
Subordinated notes |
4,191 |
|
4,191 |
|
Trust
preferred subordinated debentures |
716 |
|
618 |
|
Total
interest expense |
15,020 |
|
10,899 |
|
Net interest income |
144,783 |
|
130,009 |
|
Provision for credit losses |
30,000 |
|
11,000 |
|
Net interest income after provision for credit
losses |
114,783 |
|
119,009 |
|
Non-interest income |
|
|
Service charges on deposit accounts |
2,110 |
|
2,094 |
|
Trust
fee income |
813 |
|
1,200 |
|
Bank
owned life insurance (BOLI) income |
536 |
|
484 |
|
Brokered loan fees |
4,645 |
|
4,232 |
|
Swap
fees |
307 |
|
1,986 |
|
Other |
2,886 |
|
2,271 |
|
Total
non-interest income |
11,297 |
|
12,267 |
|
Non-interest expense |
|
|
Salaries and employee benefits |
51,372 |
|
45,828 |
|
Net
occupancy expense |
5,812 |
|
5,691 |
|
Marketing |
3,908 |
|
4,218 |
|
Legal
and professional |
5,324 |
|
4,048 |
|
Communications and technology |
6,217 |
|
5,078 |
|
FDIC
insurance assessment |
5,469 |
|
3,790 |
|
Allowance and other carrying costs for OREO |
236 |
|
9 |
|
Other |
8,482 |
|
7,855 |
|
Total non-interest
expense |
86,820 |
|
76,517 |
|
Income before income taxes |
39,260 |
|
54,759 |
|
Income tax expense |
14,132 |
|
19,709 |
|
Net income |
25,128 |
|
35,050 |
|
Preferred stock dividends |
2,438 |
|
2,438 |
|
Net income available to common stockholders |
$ |
22,690 |
|
$ |
32,612 |
|
|
|
|
Basic earnings per common share |
$ |
0.49 |
|
$ |
0.71 |
|
Diluted earnings per common share |
$ |
0.49 |
|
$ |
0.70 |
|
TEXAS CAPITAL BANCSHARES, INC. |
SUMMARY OF LOAN LOSS EXPERIENCE |
(Dollars
in thousands) |
|
1st Quarter |
|
4th Quarter |
|
3rd
Quarter |
|
2nd
Quarter |
1st
Quarter |
|
2016 |
|
2015 |
|
2015 |
|
2015 |
|
2015 |
Allowance
for loan losses: |
|
|
|
|
|
|
|
|
|
Beginning
balance |
$ |
141,111 |
|
$ |
130,540 |
|
$ |
118,770 |
|
$ |
108,078 |
|
$ |
100,954 |
|
Loans
charged-off: |
|
|
|
|
|
|
|
|
|
Commercial |
8,496 |
|
4,976 |
|
2,758 |
|
5,418 |
|
3,102 |
|
Real
estate |
— |
|
43 |
|
— |
|
— |
|
346 |
|
Consumer |
— |
|
— |
|
— |
|
— |
|
62 |
|
Leases |
— |
|
— |
|
25 |
|
— |
|
— |
|
Total
charge-offs |
8,496 |
|
5,019 |
|
2,783 |
|
5,418 |
|
3,510 |
|
Recoveries: |
|
|
|
|
|
Commercial |
1,040 |
|
2,846 |
|
388 |
|
1,424 |
|
286 |
|
Real
estate |
8 |
|
5 |
|
8 |
|
12 |
|
8 |
|
Construction |
— |
|
3 |
|
42 |
|
272 |
|
83 |
|
Consumer |
7 |
|
154 |
|
9 |
|
6 |
|
4 |
|
Leases |
45 |
|
11 |
|
4 |
|
15 |
|
8 |
|
Total
recoveries |
1,100 |
|
3,019 |
|
451 |
|
1,729 |
|
389 |
|
Net
charge-offs |
7,396 |
|
2,000 |
|
2,332 |
|
3,689 |
|
3,121 |
|
Provision
for loan losses |
28,795 |
|
12,571 |
|
14,102 |
|
14,381 |
|
10,245 |
|
Ending
balance |
$ |
162,510 |
|
$ |
141,111 |
|
$ |
130,540 |
|
$ |
118,770 |
|
$ |
108,078 |
|
|
|
|
|
|
|
Allowance
for off-balance sheet credit losses: |
|
|
|
|
|
Beginning
balance |
$ |
9,011 |
|
$ |
7,582 |
|
$ |
7,934 |
|
$ |
7,815 |
|
$ |
7,060 |
|
Provision
for off-balance sheet credit losses |
1,205 |
|
1,429 |
|
(352 |
) |
119 |
|
755 |
|
Ending
balance |
$ |
10,216 |
|
$ |
9,011 |
|
$ |
7,582 |
|
$ |
7,934 |
|
$ |
7,815 |
|
|
|
|
|
|
|
Total
allowance for credit losses |
$ |
172,726 |
|
$ |
150,122 |
|
$ |
138,122 |
|
$ |
126,704 |
|
$ |
115,893 |
|
|
|
|
|
|
|
Total
provision for credit losses |
$ |
30,000 |
|
$ |
14,000 |
|
$ |
13,750 |
|
$ |
14,500 |
|
$ |
11,000 |
|
|
|
|
|
|
|
Allowance
for loan losses to LHI |
0.95 |
% |
0.84 |
% |
0.82 |
% |
0.74 |
% |
0.67 |
% |
Allowance
for loan losses to LHI excluding mortgage finance loans(2) |
1.35 |
% |
1.20 |
% |
1.13 |
% |
1.07 |
% |
1.00 |
% |
Allowance
for loan losses to average LHI |
1.04 |
% |
0.92 |
% |
0.85 |
% |
0.77 |
% |
0.76 |
% |
Allowance
for loan losses to average LHI excluding mortgage finance
loans(2) |
1.36 |
% |
1.21 |
% |
1.15 |
% |
1.09 |
% |
1.03 |
% |
Net
charge-offs to average LHI(1) |
0.19 |
% |
0.05 |
% |
0.06 |
% |
0.10 |
% |
0.09 |
% |
Net
charge-offs to average LHI excluding mortgage finance
loans(1)(2) |
0.25 |
% |
0.07 |
% |
0.08 |
% |
0.14 |
% |
0.12 |
% |
Net
charge-offs to average LHI for last twelve months(1) |
0.10 |
% |
0.07 |
% |
0.07 |
% |
0.06 |
% |
0.06 |
% |
Net
charge-offs to average LHI, excluding mortgage finance loans, for
last twelve months(1)(2) |
0.14 |
% |
0.10 |
% |
0.10 |
% |
0.08 |
% |
0.08 |
% |
Total
provision for credit losses to average LHI(1) |
0.77 |
% |
0.36 |
% |
0.36 |
% |
0.37 |
% |
0.31 |
% |
Total
provision for credit losses to average LHI excluding mortgage
finance loans(1)(2) |
1.01 |
% |
0.47 |
% |
0.48 |
% |
0.53 |
% |
0.42 |
% |
Combined
allowance for credit losses to LHI |
1.01 |
% |
0.90 |
% |
0.87 |
% |
0.79 |
% |
0.72 |
% |
Combined
allowance for credit losses to LHI, excluding mortgage finance
loans(2) |
1.43 |
% |
1.28 |
% |
1.19 |
% |
1.14 |
% |
1.08 |
% |
|
|
|
|
|
|
Non-performing assets (NPAs): |
|
|
|
|
|
Non-accrual loans |
$ |
173,156 |
|
$ |
179,788 |
|
$ |
109,674 |
|
$ |
122,920 |
|
$ |
68,307 |
|
Other real
estate owned (OREO) |
17,585 |
|
278 |
|
187 |
|
609 |
|
605 |
|
Total |
$ |
190,741 |
|
$ |
180,066 |
|
$ |
109,861 |
|
$ |
123,529 |
|
$ |
68,912 |
|
|
|
|
|
|
|
|
1st Quarter |
|
4th Quarter |
|
3rd
Quarter |
|
2nd
Quarter |
|
1st
Quarter |
|
2016 |
|
2015 |
|
2015 |
|
2015 |
|
2015 |
Non-accrual loans to
LHI |
1.02 |
% |
1.08 |
% |
0.69 |
% |
0.77 |
% |
0.42 |
% |
Non-accrual loans to
LHI excluding mortgage finance loans(2) |
1.44 |
% |
1.53 |
% |
0.95 |
% |
1.11 |
% |
0.63 |
% |
Total NPAs to LHI plus
OREO |
1.12 |
% |
1.08 |
% |
0.69 |
% |
0.77 |
% |
0.43 |
% |
Total NPAs to LHI
excluding mortgage finance loans plus OREO(2) |
1.58 |
% |
1.53 |
% |
0.95 |
% |
1.11 |
% |
0.64 |
% |
Total NPAs to earning
assets |
0.97 |
% |
0.99 |
% |
0.61 |
% |
0.72 |
% |
0.41 |
% |
Allowance for loan
losses to non-accrual loans |
0.9 |
x |
0.8 |
x |
1.2 |
x |
1.0 |
x |
1.6 |
x |
|
|
|
|
|
|
|
|
|
|
|
Restructured loans |
$ |
249 |
|
$ |
249 |
|
$ |
249 |
|
$ |
249 |
|
$ |
319 |
|
Loans past due 90 days
and still accruing(3) |
$ |
10,100 |
|
$ |
7,013 |
|
$ |
7,558 |
|
$ |
5,482 |
|
$ |
2,971 |
|
|
|
|
|
|
|
Loans past due 90 days
to LHI |
0.06 |
% |
0.04 |
% |
0.05 |
% |
0.03 |
% |
0.02 |
% |
Loans past due 90 days
to LHI excluding mortgage finance loans(2) |
0.08 |
% |
0.06 |
% |
0.07 |
% |
0.05 |
% |
0.03 |
% |
|
|
|
|
|
|
|
|
|
|
|
(1) Interim period ratios are annualized.(2) The indicated
ratios are presented with and excluding the mortgage finance loans
because the risk profile of our mortgage finance loans is different
than our other loans held for investment. No provision for credit
losses is allocated to these loans based on the internal risk grade
assigned.(3) At March 31, 2016, loans past due 90 days and
still accruing includes premium finance loans of $6.1 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.
TEXAS CAPITAL BANCSHARES, INC. |
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
(Dollars
in thousands) |
|
|
|
|
|
|
|
1st Quarter |
|
4th
Quarter |
|
3rd
Quarter |
|
2nd
Quarter |
|
1st
Quarter |
|
2016 |
|
2015 |
|
2015 |
|
2015 |
|
2015 |
Interest income |
|
|
|
|
|
Interest and fees on loans |
$ |
155,885 |
|
$ |
152,200 |
|
$ |
151,749 |
|
$ |
151,606 |
|
$ |
139,174 |
|
Securities |
261 |
|
275 |
|
298 |
|
323 |
|
358 |
|
Federal funds sold |
372 |
|
255 |
|
193 |
|
118 |
|
116 |
|
Deposits in other banks |
3,285 |
|
2,090 |
|
1,616 |
|
1,327 |
|
1,260 |
|
Total interest income |
159,803 |
|
154,820 |
|
153,856 |
|
153,374 |
|
140,908 |
|
Interest expense |
|
|
|
|
|
Deposits |
8,822 |
|
7,068 |
|
6,240 |
|
5,642 |
|
5,628 |
|
Federal funds purchased |
126 |
|
67 |
|
56 |
|
93 |
|
68 |
|
Repurchase agreements |
3 |
|
5 |
|
6 |
|
4 |
|
4 |
|
Other borrowings |
1,162 |
|
642 |
|
672 |
|
528 |
|
390 |
|
Subordinated notes |
4,191 |
|
4,191 |
|
4,191 |
|
4,191 |
|
4,191 |
|
Trust preferred subordinated debentures |
716 |
|
659 |
|
643 |
|
631 |
|
618 |
|
Total interest expense |
15,020 |
|
12,632 |
|
11,808 |
|
11,089 |
|
10,899 |
|
Net interest income |
144,783 |
|
142,188 |
|
142,048 |
|
142,285 |
|
130,009 |
|
Provision for credit losses |
30,000 |
|
14,000 |
|
13,750 |
|
14,500 |
|
11,000 |
|
Net interest income after provision for credit
losses |
114,783 |
|
128,188 |
|
128,298 |
|
127,785 |
|
119,009 |
|
Non-interest income |
|
|
|
|
|
Service charges on deposit accounts |
2,110 |
|
1,984 |
|
2,096 |
|
2,149 |
|
2,094 |
|
Trust fee income |
813 |
|
1,313 |
|
1,222 |
|
1,287 |
|
1,200 |
|
Bank owned life insurance (BOLI) income |
536 |
|
567 |
|
484 |
|
476 |
|
484 |
|
Brokered loan fees |
4,645 |
|
4,267 |
|
4,885 |
|
5,277 |
|
4,232 |
|
Swap fees |
307 |
|
1,000 |
|
254 |
|
1,035 |
|
1,986 |
|
Other |
2,886 |
|
2,189 |
|
2,439 |
|
2,547 |
|
2,271 |
|
Total non-interest income |
11,297 |
|
11,320 |
|
11,380 |
|
12,771 |
|
12,267 |
|
Non-interest expense |
|
|
|
|
|
Salaries and employee benefits |
51,372 |
|
49,999 |
|
48,583 |
|
48,200 |
|
45,828 |
|
Net occupancy expense |
5,812 |
|
5,809 |
|
5,874 |
|
5,808 |
|
5,691 |
|
Marketing |
3,908 |
|
4,349 |
|
3,999 |
|
3,925 |
|
4,218 |
|
Legal and professional |
5,324 |
|
6,974 |
|
5,510 |
|
5,618 |
|
4,048 |
|
Communications and technology |
6,217 |
|
5,520 |
|
5,180 |
|
5,647 |
|
5,078 |
|
FDIC insurance assessment |
5,469 |
|
4,741 |
|
4,489 |
|
4,211 |
|
3,790 |
|
Allowance and other carrying costs for OREO |
236 |
|
6 |
|
1 |
|
6 |
|
9 |
|
Other |
8,482 |
|
9,644 |
|
8,052 |
|
7,861 |
|
7,855 |
|
Total non-interest expense |
86,820 |
|
87,042 |
|
81,688 |
|
81,276 |
|
76,517 |
|
Income before income taxes |
39,260 |
|
52,466 |
|
57,990 |
|
59,280 |
|
54,759 |
|
Income tax expense |
14,132 |
|
17,713 |
|
20,876 |
|
21,343 |
|
19,709 |
|
Net income |
25,128 |
|
34,753 |
|
37,114 |
|
37,937 |
|
35,050 |
|
Preferred stock dividends |
2,438 |
|
2,437 |
|
2,438 |
|
2,437 |
|
2,438 |
|
Net income available to common
shareholders |
$ |
22,690 |
|
$ |
32,316 |
|
$ |
34,676 |
|
$ |
35,500 |
|
$ |
32,612 |
|
TEXAS CAPITAL BANCSHARES, INC. |
QUARTERLY FINANCIAL SUMMARY - UNAUDITED |
Consolidated Daily Average Balances, Average Yields and Rates |
(Dollars
in thousands) |
|
1st Quarter 2016 |
|
4th Quarter 2015 |
|
3rd Quarter 2015 |
|
2nd Quarter 2015 |
|
1st Quarter 2015 |
|
AverageBalance |
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 |
$ |
28,343 |
|
$ |
254 |
|
3.60 |
% |
|
$ |
29,973 |
|
$ |
267 |
|
3.53 |
% |
|
$ |
32,358 |
|
$ |
287 |
|
3.52 |
% |
|
$ |
35,081 |
|
$ |
311 |
|
3.56 |
% |
|
$ |
37,145 |
|
$ |
332 |
|
3.62 |
% |
Securities - Non-taxable(2) |
759 |
|
11 |
|
5.70 |
% |
|
829 |
|
12 |
|
5.74 |
% |
|
1,162 |
|
17 |
|
5.80 |
% |
|
1,427 |
|
18 |
|
5.06 |
% |
|
2,785 |
|
40 |
|
5.82 |
% |
Federal funds sold
andsecurities purchased underresale agreements |
304,425 |
|
372 |
|
0.49 |
% |
|
375,181 |
|
255 |
|
0.27 |
% |
|
308,822 |
|
193 |
|
0.25 |
% |
|
200,690 |
|
118 |
|
0.24 |
% |
|
191,297 |
|
116 |
|
0.25 |
% |
Deposits in other
banks |
2,649,164 |
|
3,285 |
|
0.50 |
% |
|
3,081,882 |
|
2,090 |
|
0.27 |
% |
|
2,537,033 |
|
1,616 |
|
0.25 |
% |
|
2,103,732 |
|
1,327 |
|
0.25 |
% |
|
2,019,567 |
|
1,260 |
|
0.25 |
% |
Loans held for sale, at
fair value |
126,084 |
|
1,094 |
|
3.49 |
% |
|
24,658 |
|
237 |
|
3.81 |
% |
|
570 |
|
6 |
|
4.18 |
% |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
— |
|
LHI, mortgage finance
loans |
3,724,513 |
|
29,037 |
|
3.14 |
% |
|
3,669,022 |
|
27,846 |
|
3.01 |
% |
|
3,981,731 |
|
30,427 |
|
3.03 |
% |
|
4,573,478 |
|
33,773 |
|
2.96 |
% |
|
3,746,938 |
|
27,631 |
|
2.99 |
% |
LHI |
11,910,788 |
|
125,754 |
|
4.25 |
% |
|
11,693,464 |
|
124,117 |
|
4.21 |
% |
|
11,302,248 |
|
121,316 |
|
4.26 |
% |
|
10,941,029 |
|
117,833 |
|
4.32 |
% |
|
10,502,172 |
|
111,543 |
|
4.31 |
% |
Less allowance for loan
losses |
141,125 |
|
— |
|
— |
|
|
130,822 |
|
— |
|
— |
|
|
118,543 |
|
— |
|
— |
|
|
109,086 |
|
— |
|
— |
|
|
101,042 |
|
— |
|
— |
|
LHI, net of
allowance |
15,494,176 |
|
154,791 |
|
4.02 |
% |
|
15,231,664 |
|
151,963 |
|
3.96 |
% |
|
15,165,436 |
|
151,743 |
|
3.97 |
% |
|
15,405,421 |
|
151,606 |
|
3.95 |
% |
|
14,148,068 |
|
139,174 |
|
3.99 |
% |
Total earning
assets |
18,602,951 |
|
159,807 |
|
3.46 |
% |
|
18,744,187 |
|
154,824 |
|
3.28 |
% |
|
18,045,381 |
|
153,862 |
|
3.38 |
% |
|
17,746,351 |
|
153,380 |
|
3.47 |
% |
|
16,398,862 |
|
140,922 |
|
3.49 |
% |
Cash and other
assets |
506,025 |
|
|
|
|
499,712 |
|
|
|
|
481,378 |
|
|
|
|
487,475 |
|
|
|
|
453,381 |
|
|
|
Total assets |
$ |
19,108,976 |
|
|
|
|
$ |
19,243,899 |
|
|
|
|
$ |
18,526,759 |
|
|
|
|
$ |
18,233,826 |
|
|
|
|
$ |
16,852,243 |
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction
deposits |
$ |
2,004,817 |
|
$ |
1,381 |
|
0.28 |
% |
|
$ |
2,150,740 |
|
$ |
950 |
|
0.18 |
% |
|
$ |
1,754,940 |
|
$ |
763 |
|
0.17 |
% |
|
$ |
1,404,521 |
|
$ |
458 |
|
0.13 |
% |
|
$ |
1,401,626 |
|
$ |
444 |
|
0.13 |
% |
Savings deposits |
6,335,425 |
|
6,714 |
|
0.43 |
% |
|
6,316,191 |
|
5,370 |
|
0.34 |
% |
|
5,858,381 |
|
4,616 |
|
0.31 |
% |
|
5,610,277 |
|
4,332 |
|
0.31 |
% |
|
5,891,344 |
|
4,420 |
|
0.30 |
% |
Time deposits |
509,762 |
|
727 |
|
0.57 |
% |
|
539,421 |
|
748 |
|
0.55 |
% |
|
536,531 |
|
723 |
|
0.53 |
% |
|
516,582 |
|
657 |
|
0.51 |
% |
|
447,681 |
|
506 |
|
0.46 |
% |
Deposits in foreign
branches |
— |
|
— |
|
— |
% |
|
— |
|
— |
|
— |
% |
|
179,731 |
|
138 |
|
0.30 |
% |
|
246,035 |
|
195 |
|
0.32 |
% |
|
304,225 |
|
258 |
|
0.34 |
% |
Total interest bearing
deposits |
8,850,004 |
|
8,822 |
|
0.40 |
% |
|
9,006,352 |
|
7,068 |
|
0.31 |
% |
|
8,329,583 |
|
6,240 |
|
0.30 |
% |
|
7,777,415 |
|
5,642 |
|
0.29 |
% |
|
8,044,876 |
|
5,628 |
|
0.28 |
% |
Other borrowings |
1,346,998 |
|
1,292 |
|
0.39 |
% |
|
1,327,087 |
|
714 |
|
0.21 |
% |
|
1,459,864 |
|
734 |
|
0.20 |
% |
|
1,565,874 |
|
625 |
|
0.16 |
% |
|
1,172,675 |
|
462 |
|
0.16 |
% |
Subordinated notes |
280,713 |
|
4,191 |
|
6.00 |
% |
|
280,622 |
|
4,191 |
|
5.93 |
% |
|
280,532 |
|
4,191 |
|
5.93 |
% |
|
280,441 |
|
4,191 |
|
5.99 |
% |
|
280,351 |
|
4,191 |
|
6.06 |
% |
Trust preferred
subordinated debentures |
113,406 |
|
716 |
|
2.54 |
% |
|
113,406 |
|
659 |
|
2.31 |
% |
|
113,406 |
|
643 |
|
2.25 |
% |
|
113,406 |
|
631 |
|
2.23 |
% |
|
113,406 |
|
618 |
|
2.21 |
% |
Total interest bearing
liabilities |
10,591,121 |
|
15,021 |
|
0.57 |
% |
|
10,727,467 |
|
12,632 |
|
0.47 |
% |
|
10,183,385 |
|
11,808 |
|
0.46 |
% |
|
9,737,136 |
|
11,089 |
|
0.46 |
% |
|
9,611,308 |
|
10,899 |
|
0.46 |
% |
Demand deposits |
6,730,586 |
|
|
|
|
6,755,615 |
|
|
|
|
6,621,159 |
|
|
|
|
6,804,994 |
|
|
|
|
5,592,124 |
|
|
|
Other liabilities |
148,418 |
|
|
|
|
157,425 |
|
|
|
|
152,154 |
|
|
|
|
161,614 |
|
|
|
|
152,639 |
|
|
|
Stockholders’
equity |
1,638,851 |
|
|
|
|
1,603,392 |
|
|
|
|
1,570,061 |
|
|
|
|
1,530,082 |
|
|
|
|
1,496,172 |
|
|
|
Total liabilities and
stockholders’ equity |
$ |
19,108,976 |
|
|
|
|
$ |
19,243,899 |
|
|
|
|
$ |
18,526,759 |
|
|
|
|
$ |
18,233,826 |
|
|
|
|
$ |
16,852,243 |
|
|
|
Net interest income(2) |
|
$ |
144,786 |
|
|
|
|
$ |
142,192 |
|
|
|
|
$ |
142,054 |
|
|
|
|
$ |
142,291 |
|
|
|
|
$ |
130,023 |
|
|
Net interest
margin |
|
|
3.13 |
% |
|
|
|
3.01 |
% |
|
|
|
3.12 |
% |
|
|
|
3.22 |
% |
|
|
|
3.22 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
MEDIA & INVESTOR CONTACT
Heather Worley, 214.932.6646
heather.worley@texascapitalbank.com
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