Texas Capital Bancshares, Inc. (NASDAQ:TCBI), the parent company of
Texas Capital Bank, announced earnings and operating results for
the first quarter of 2017.
“We begin 2017 with continued solid earnings and
traditional LHI growth, while experiencing the contraction in the
mortgage industry attributable to rising rates and the return of
seasonal trends. We remain optimistic about 2017 as we expect the
new lines of business we added or expanded in 2016 will give us
market share takeaway potential, coupled with our continued ability
to attract new talent," said Keith Cargill, CEO. "Additionally, we
remain well-positioned to take advantage of rising rates and
business opportunities in a pro-growth economic environment."
- Loans held for investment ("LHI"), excluding mortgage finance,
increased 2% on a linked quarter basis, growing 10% from the first
quarter of 2016.
- Total mortgage finance loans, including MCA decreased 22% on a
linked quarter basis and decreased 16% from the first quarter of
2016.
- Demand deposits decreased 11% and total deposits decreased 2%
on a linked quarter basis, decreasing 5% and growing 2%,
respectively, from the first quarter of 2016.
- Net income decreased 12% on a linked quarter basis and
increased 69% from the first quarter of 2016.
- EPS decreased 17% on a linked quarter basis and increased 63%
from the first quarter of 2016.
- ROE decreased to 8.60% from 10.82% for the fourth quarter of
2016 and increased from 6.13% for the first quarter of 2016.
FINANCIAL
SUMMARY (dollars and shares in thousands) |
|
|
|
|
|
|
Q1 2017 |
|
Q1 2016 |
|
% Change |
QUARTERLY OPERATING
RESULTS |
|
|
|
|
|
Net income |
$ |
42,542 |
|
|
$ |
25,128 |
|
|
69 |
% |
Net income available to
common stockholders |
$ |
40,104 |
|
|
$ |
22,690 |
|
|
77 |
% |
Diluted EPS |
$ |
0.80 |
|
|
$ |
0.49 |
|
|
63 |
% |
Diluted shares |
50,234 |
|
|
46,354 |
|
|
8 |
% |
ROA |
0.83 |
% |
|
0.53 |
% |
|
|
ROE |
8.60 |
% |
|
6.13 |
% |
|
|
|
|
|
|
|
|
BALANCE SHEET |
|
|
|
|
|
Loans held for sale
(MCA) |
$ |
884,647 |
|
|
$ |
94,702 |
|
|
834 |
% |
LHI, mortgage
finance |
3,371,598 |
|
|
4,981,304 |
|
|
(32 |
)% |
LHI |
13,298,918 |
|
|
12,059,849 |
|
|
10 |
% |
Total LHI |
16,670,516 |
|
|
17,041,153 |
|
|
(2 |
)% |
Total loans |
17,555,163 |
|
|
17,135,855 |
|
|
2 |
% |
Total assets |
20,864,874 |
|
|
20,210,893 |
|
|
3 |
% |
Demand deposits |
7,094,696 |
|
|
7,455,107 |
|
|
(5 |
)% |
Total deposits |
16,605,380 |
|
|
16,298,847 |
|
|
2 |
% |
Stockholders’
equity |
2,050,442 |
|
|
1,647,088 |
|
|
24 |
% |
DETAILED FINANCIALS Texas
Capital Bancshares, Inc. reported net income of $42.5 million and
net income available to common stockholders of $40.1 million for
the quarter ended March 31, 2017 compared to net income of
$25.1 million and net income available to common stockholders of
$22.7 million for the same period in 2016. On a fully diluted
basis, earnings per common share were $0.80 for the quarter ended
March 31, 2017 compared to $0.49 for the same period of 2016.
The increase reflects the $17.4 million year over year increase in
net income offset by the $0.06 per share dilutive effect of the
fourth quarter 2016 common stock offering.
Return on average common equity (“ROE”) was 8.60
percent and return on average assets (“ROA”) was 0.83 percent for
the first quarter of 2017, compared to 10.82 percent and 0.85
percent, respectively, for the fourth quarter of 2016 and 6.13
percent and 0.53 percent, respectively, for the first quarter of
2016. The linked quarter decrease in ROE resulted from a decrease
in net revenue for the first quarter of 2017 and an increase in
equity resulting from the fourth quarter 2016 common stock
offering. ROA remains low as a result of continuing high liquidity
asset balances. Average liquidity assets for the first quarter of
2017 totaled $3.6 billion, including $3.3 billion in deposits at
the Federal Reserve Bank of Dallas, which had an average yield of
80 basis points, compared to $2.6 billion for the first quarter of
2016, which had an average yield of 50 basis points.
Net interest income was $163.4 million for the
first quarter of 2017, compared to $171.2 million for the fourth
quarter of 2016 and $144.8 million for the first quarter of 2016.
Net interest margin for the first quarter of 2017 was 3.29 percent,
an 18 basis point increase from the fourth quarter of 2016 and a 16
basis point increase from the first quarter of 2016. The linked
quarter and year-over-year increases in net interest margin are due
primarily to the increase in interest rates and the higher yielding
loan portfolio components, including traditional LHI and loans held
for sale ("LHS").
Average LHI, excluding mortgage finance loans,
for the first quarter of 2017 were $13.0 billion, an increase of
$278.7 million, or 2 percent, from the fourth quarter of 2016 and
an increase of $1.1 billion, or 9 percent, from the first quarter
of 2016. Average total mortgage finance loans (including Mortgage
Correspondent Aggregation ("MCA")) for the first quarter of 2017
were $3.8 billion, a decrease of $1.5 billion, or 28 percent, from
the fourth quarter of 2016 and a decrease of $28.7 million, or 1
percent, from the first quarter of 2016. Mortgage finance volumes
showed decreases in average balances partially offset by an
increase in MCA balances and a reduction in participation balances.
The decline in average mortgage finance balances is primarily due
to seasonality and the effect of higher interest rates on refinance
volumes. Average LHS generated from our MCA business increased to
$1.1 billion for the first quarter of 2017 from $944.5 million for
the fourth quarter of 2016 and $126.1 million for the first quarter
of 2016 as we continue to gain traction in that business.
Average total deposits for the first quarter of
2017 decreased $1.6 billion from the fourth quarter of 2016 and
increased $1.4 billion from the first quarter of 2016. Average
demand deposits for the first quarter of 2017 decreased $1.6
billion, or 17 percent, to $7.5 billion from $9.1 billion during
the fourth quarter of 2016, and increased $816.8 million, or 12
percent, from $6.7 billion during the first quarter of 2016.
We recorded a $9.0 million provision for credit
losses for the first quarter of 2017 compared to $9.0 million for
the fourth quarter of 2016 and $30.0 million for the first quarter
of 2016. The provision for the first quarter of 2017 was driven by
the application of our methodology. The year-over-year decrease was
primarily related to improvements in the composition of our
pass-rated and classified loan portfolios, including energy loans.
Overall 2016 provision levels were higher primarily related to
energy exposure. The combined allowance for credit losses at
March 31, 2017 decreased slightly to 1.37 percent of LHI
excluding mortgage finance loans compared to 1.38 percent at
December 31, 2016 and 1.43 percent at March 31, 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 decrease in non-performing
assets in the first quarter of 2017 compared to levels reported in
the fourth and first quarters of 2016, bringing the ratio of total
non-performing assets to total LHI plus other real estate owned
(“OREO”) to 0.99 percent compared to 1.07 percent for the fourth
quarter of 2016 and 1.12 percent for the first quarter of 2016. The
year-over-year decrease is primarily related to the decrease in
energy non-accrual loans from $141.3 million at March 31, 2016
to $100.9 million at March 31, 2017. Net charge-offs for the
first quarter of 2017 were $5.7 million compared to $20.8 million
for the fourth quarter of 2016 and $7.4 million for the first
quarter of 2016. For the first quarter of 2017, net charge-offs
related to energy loans were $7.1 million compared to $16.3 million
for the fourth quarter of 2016 and $5.9 million for the first
quarter of 2016. For the first quarter of 2017, net charge-offs
were 0.15 percent of total LHI, compared to 0.48 percent for the
fourth quarter of 2016 and 0.19 percent for the same period in
2016. At March 31, 2017, total OREO was $18.8 million compared
to $19.0 million at December 31, 2016 and $17.6 million at
March 31, 2016.
Non-interest income increased $5.8 million, or
51 percent, during the first quarter of 2017 compared to the same
period of 2016, and decreased $1.7 million, or 9 percent, compared
to the fourth quarter of 2016. The year-over-year increase
primarily related to an increase in servicing income, swap fees,
brokered loan fees and service charges. Servicing income increased
$2.2 million during the first quarter of 2017 compared to the same
period of 2016 as a result of an increase in servicing assets
primarily related to our MCA business. Swap fees increased $1.5
million during the first quarter of 2017 compared to the same
period of 2016. These fees fluctuate from quarter to quarter based
on the volume and size of transactions closed during the quarter.
Brokered loan fees increased $1.0 million during the first quarter
of 2017 compared to the same period of 2016 as a result of an
increase in LHFS volumes. Service charges increased $935,000 during
the first quarter of 2017 compared to the same period of 2016 as a
result of the increase in deposit balances and improved pricing of
treasury services. The linked-quarter decrease in non-interest
income primarily related to a $1.6 million, or 22 percent, decrease
in brokered loan fees attributable to reduced mortgage finance
activity and a $2.4 million, or 49 percent, decrease in other
non-interest income, offset by a $1.3 million increase in swap
fees.
Non-interest expense for the first quarter of
2017 increased $19.3 million, or 22 percent, compared to the first
quarter of 2016, and decreased $429,000, or less than 1 percent,
compared to the fourth quarter of 2016. The year-over-year increase
is primarily related to an $11.6 million increase in salaries and
employee benefits expense, a $2.1 million increase in legal and
professional expense and a $1.0 million increase in marketing
expense, all of which were due to general business growth.
Servicing related expenses for the first quarter of 2017 increased
$1.0 million compared to the same quarter in 2016 as a result of
the increase in capitalized servicing assets primarily related to
our MCA business from March 31, 2016 to March 31,
2017.
Stockholders’ equity increased by 24 percent
from $1.6 billion at March 31, 2016 to $2.1 billion at
March 31, 2017, primarily due to retention of net income and
proceeds from the fourth quarter 2016 common stock offering. Texas
Capital Bank is well capitalized under regulatory guidelines and at
March 31, 2017, our ratio of tangible common equity to total
tangible assets was 9.0 percent.
ABOUT TEXAS CAPITAL BANCSHARES,
INC. Texas Capital Bancshares, Inc. (NASDAQ®:TCBI), a
member of the Russell 2000® Index and the S&P MidCap 400®, 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 |
|
2017 |
2016 |
2016 |
2016 |
2016 |
CONSOLIDATED
STATEMENTS OF INCOME |
|
|
|
|
|
Interest income |
$ |
183,946 |
|
$ |
188,671 |
|
$ |
182,492 |
|
$ |
172,442 |
|
$ |
159,803 |
|
Interest expense |
20,587 |
|
17,448 |
|
15,753 |
|
15,373 |
|
15,020 |
|
Net
interest income |
163,359 |
|
171,223 |
|
166,739 |
|
157,069 |
|
144,783 |
|
Provision for credit losses |
9,000 |
|
9,000 |
|
22,000 |
|
16,000 |
|
30,000 |
|
Net interest income
after provision for credit losses |
154,359 |
|
162,223 |
|
144,739 |
|
141,069 |
|
114,783 |
|
Non-interest income |
17,110 |
|
18,835 |
|
16,716 |
|
13,932 |
|
11,297 |
|
Non-interest expense |
106,094 |
|
106,523 |
|
94,799 |
|
94,255 |
|
86,820 |
|
Income before income
taxes |
65,375 |
|
74,535 |
|
66,656 |
|
60,746 |
|
39,260 |
|
Income tax expense |
22,833 |
|
26,149 |
|
23,931 |
|
21,866 |
|
14,132 |
|
Net
income |
42,542 |
|
48,386 |
|
42,725 |
|
38,880 |
|
25,128 |
|
Preferred stock dividends |
2,438 |
|
2,437 |
|
2,438 |
|
2,437 |
|
2,438 |
|
Net
income available to common stockholders |
$ |
40,104 |
|
$ |
45,949 |
|
$ |
40,287 |
|
$ |
36,443 |
|
$ |
22,690 |
|
|
|
|
|
|
|
Diluted EPS |
$ |
0.80 |
|
$ |
0.96 |
|
$ |
0.87 |
|
$ |
0.78 |
|
$ |
0.49 |
|
Diluted shares |
50,234,230 |
|
47,759,548 |
|
46,509,683 |
|
46,438,132 |
|
46,354,378 |
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEET DATA |
|
|
|
|
|
Total
assets |
$ |
20,864,874 |
|
$ |
21,697,134 |
|
$ |
22,216,388 |
|
$ |
21,080,994 |
|
$ |
20,210,893 |
|
LHI |
13,298,918 |
|
13,001,011 |
|
12,662,394 |
|
12,502,513 |
|
12,059,849 |
|
LHI,
mortgage finance |
3,371,598 |
|
4,497,338 |
|
4,961,159 |
|
5,260,027 |
|
4,981,304 |
|
Loans
held for sale, at fair value |
884,647 |
|
968,929 |
|
648,684 |
|
221,347 |
|
94,702 |
|
Liquidity assets |
2,804,921 |
|
2,725,645 |
|
3,471,074 |
|
2,624,170 |
|
2,644,418 |
|
Securities |
42,203 |
|
24,874 |
|
26,356 |
|
27,372 |
|
28,461 |
|
Demand deposits |
7,094,696 |
|
7,994,201 |
|
8,789,740 |
|
7,984,208 |
|
7,455,107 |
|
Total
deposits |
16,605,380 |
|
17,016,831 |
|
18,145,123 |
|
16,703,565 |
|
16,298,847 |
|
Other
borrowings |
1,641,834 |
|
2,109,575 |
|
1,751,420 |
|
2,115,445 |
|
1,704,859 |
|
Subordinated notes |
281,134 |
|
281,044 |
|
280,954 |
|
280,863 |
|
280,773 |
|
Long-term debt |
113,406 |
|
113,406 |
|
113,406 |
|
113,406 |
|
113,406 |
|
Stockholders’ equity |
2,050,442 |
|
2,009,557 |
|
1,725,782 |
|
1,684,735 |
|
1,647,088 |
|
|
|
|
|
|
|
End
of period shares outstanding |
49,560,100 |
|
49,503,662 |
|
46,009,495 |
|
45,952,911 |
|
45,902,489 |
|
Book
value |
$ |
38.35 |
|
$ |
37.56 |
|
$ |
34.25 |
|
$ |
33.40 |
|
$ |
32.61 |
|
Tangible book
value(1) |
$ |
37.95 |
|
$ |
37.17 |
|
$ |
33.82 |
|
$ |
32.97 |
|
$ |
32.18 |
|
|
|
|
|
|
|
SELECTED FINANCIAL RATIOS |
|
|
|
|
|
Net
interest margin |
3.29 |
% |
3.11 |
% |
3.14 |
% |
3.18 |
% |
3.13 |
% |
Return on average assets |
0.83 |
% |
0.85 |
% |
0.78 |
% |
0.77 |
% |
0.53 |
% |
Return on average common equity |
8.60 |
% |
10.82 |
% |
10.20 |
% |
9.65 |
% |
6.13 |
% |
Non-interest income to earning assets |
0.34 |
% |
0.34 |
% |
0.32 |
% |
0.28 |
% |
0.24 |
% |
Efficiency ratio(2) |
58.8 |
% |
56.0 |
% |
51.7 |
% |
55.1 |
% |
55.6 |
% |
Non-interest expense to earning assets |
2.12 |
% |
1.93 |
% |
1.79 |
% |
1.91 |
% |
1.88 |
% |
Tangible common equity
to total tangible assets(3) |
9.0 |
% |
8.5 |
% |
7.0 |
% |
7.2 |
% |
7.3 |
% |
Common Equity Tier
1 |
9.6 |
% |
9.0 |
% |
7.6 |
% |
7.4 |
% |
7.5 |
% |
Tier 1 capital |
10.9 |
% |
10.2 |
% |
8.8 |
% |
8.6 |
% |
8.8 |
% |
Total capital |
13.3 |
% |
12.5 |
% |
11.1 |
% |
10.9 |
% |
11.1 |
% |
Leverage |
10.3 |
% |
9.3 |
% |
8.4 |
% |
8.7 |
% |
9.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
(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, 2017 |
March 31, 2016 |
%Change |
Assets |
|
|
|
Cash and due from
banks |
$ |
116,013 |
|
$ |
89,277 |
|
30 |
% |
Interest-bearing
deposits |
2,779,921 |
|
2,614,418 |
|
6 |
% |
Federal funds sold and
securities purchased under resale agreements |
25,000 |
|
30,000 |
|
(17 |
)% |
Securities,
available-for-sale |
42,203 |
|
28,461 |
|
48 |
% |
Loans held for sale, at
fair value |
884,647 |
|
94,702 |
|
834 |
% |
LHI, mortgage
finance |
3,371,598 |
|
4,981,304 |
|
(32 |
)% |
LHI (net of unearned
income) |
13,298,918 |
|
12,059,849 |
|
10 |
% |
Less: Allowance
for loan losses |
172,013 |
|
162,510 |
|
6 |
% |
LHI, net |
16,498,503 |
|
16,878,643 |
|
(2 |
)% |
Mortgage servicing
rights, net |
45,526 |
|
4,253 |
|
100 |
% |
Premises and equipment,
net |
20,831 |
|
22,924 |
|
(9 |
)% |
Accrued interest
receivable and other assets |
432,835 |
|
428,344 |
|
1 |
% |
Goodwill and
intangibles, net |
19,395 |
|
19,871 |
|
(2 |
)% |
Total assets |
$ |
20,864,874 |
|
$ |
20,210,893 |
|
3 |
% |
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
Liabilities: |
|
|
|
Deposits: |
|
|
|
Non-interest
bearing |
$ |
7,094,696 |
|
$ |
7,455,107 |
|
(5 |
)% |
Interest bearing |
9,510,684 |
|
8,843,740 |
|
8 |
% |
Total
deposits |
16,605,380 |
|
16,298,847 |
|
2 |
% |
|
|
|
|
Accrued interest
payable |
3,293 |
|
2,880 |
|
14 |
% |
Other liabilities |
169,385 |
|
163,040 |
|
4 |
% |
Federal funds purchased
and repurchase agreements |
141,834 |
|
100,859 |
|
41 |
% |
Other borrowings |
1,500,000 |
|
1,604,000 |
|
(6 |
)% |
Subordinated notes,
net |
281,134 |
|
280,773 |
|
— |
|
Trust preferred
subordinated debentures |
113,406 |
|
113,406 |
|
— |
|
Total liabilities |
18,814,432 |
|
18,563,805 |
|
1 |
% |
|
|
|
|
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, 2017 and
2016 |
150,000 |
|
150,000 |
|
− |
Common stock, $.01 par value: |
|
|
|
Authorized shares -
100,000,000 |
|
|
|
Issued shares -
49,560,517 and 45,902,906 at March 31, 2017 and 2016,
respectively |
496 |
|
459 |
|
8 |
% |
Additional paid-in capital |
956,246 |
|
715,435 |
|
34 |
% |
Retained earnings |
943,291 |
|
780,508 |
|
21 |
% |
Treasury stock (shares
at cost: 417 at March 31, 2017 and 2016) |
(8 |
) |
(8 |
) |
— |
|
Accumulated other comprehensive income, net of taxes |
417 |
|
694 |
|
(40 |
)% |
Total stockholders’
equity |
2,050,442 |
|
1,647,088 |
|
24 |
% |
Total liabilities and
stockholders’ equity |
$ |
20,864,874 |
|
$ |
20,210,893 |
|
3 |
% |
TEXAS CAPITAL
BANCSHARES, INC. |
|
|
CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED) |
|
|
(Dollars in thousands
except per share data) |
|
|
|
Three Months Ended March 31 |
|
2017 |
2016 |
Interest income |
|
|
Interest and fees on loans |
$ |
176,624 |
|
$ |
155,885 |
|
Securities |
225 |
|
261 |
|
Federal funds sold |
530 |
|
372 |
|
Deposits in other banks |
6,567 |
|
3,285 |
|
Total
interest income |
183,946 |
|
159,803 |
|
Interest expense |
|
|
Deposits |
13,293 |
|
8,822 |
|
Federal funds purchased |
252 |
|
126 |
|
Repurchase agreements |
1 |
|
3 |
|
Other
borrowings |
2,020 |
|
1,162 |
|
Subordinated notes |
4,191 |
|
4,191 |
|
Trust
preferred subordinated debentures |
830 |
|
716 |
|
Total
interest expense |
20,587 |
|
15,020 |
|
Net interest income |
163,359 |
|
144,783 |
|
Provision for credit losses |
9,000 |
|
30,000 |
|
Net interest income after provision for credit
losses |
154,359 |
|
114,783 |
|
Non-interest income |
|
|
Service charges on deposit accounts |
3,045 |
|
2,110 |
|
Wealth management and trust fee income |
1,357 |
|
813 |
|
Bank
owned life insurance (BOLI) income |
466 |
|
536 |
|
Brokered loan fees |
5,678 |
|
4,645 |
|
Servicing income |
2,201 |
|
(55 |
) |
Swap
fees |
1,803 |
|
307 |
|
Other |
2,560 |
|
2,941 |
|
Total
non-interest income |
17,110 |
|
11,297 |
|
Non-interest expense |
|
|
Salaries and employee benefits |
63,003 |
|
51,372 |
|
Net
occupancy expense |
6,111 |
|
5,812 |
|
Marketing |
4,950 |
|
3,908 |
|
Legal
and professional |
7,453 |
|
5,324 |
|
Communications and technology |
6,506 |
|
6,217 |
|
FDIC
insurance assessment |
5,994 |
|
5,469 |
|
Servicing related expenses |
1,750 |
|
73 |
|
Other |
10,327 |
|
8,645 |
|
Total non-interest
expense |
106,094 |
|
86,820 |
|
Income before income taxes |
65,375 |
|
39,260 |
|
Income tax expense |
22,833 |
|
14,132 |
|
Net income |
42,542 |
|
25,128 |
|
Preferred stock dividends |
2,438 |
|
2,438 |
|
Net income available to common stockholders |
$ |
40,104 |
|
$ |
22,690 |
|
|
|
|
Basic earnings per common share |
$ |
0.81 |
|
$ |
0.49 |
|
Diluted earnings per common share |
$ |
0.80 |
|
$ |
0.49 |
|
TEXAS CAPITAL BANCSHARES, INC. |
SUMMARY OF LOAN LOSS EXPERIENCE |
(Dollars
in thousands) |
|
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
1st Quarter |
|
2017 |
2016 |
2016 |
2016 |
2016 |
Allowance for loan
losses: |
|
|
|
|
|
Beginning balance |
$ |
168,126 |
|
$ |
180,436 |
|
$ |
167,397 |
|
$ |
162,510 |
|
$ |
141,111 |
|
Loans charged-off: |
|
|
|
|
|
Commercial |
9,233 |
|
22,326 |
|
9,945 |
|
15,791 |
|
8,496 |
|
Real estate |
— |
|
— |
|
— |
|
528 |
|
— |
|
Consumer |
— |
|
7 |
|
40 |
|
— |
|
— |
|
Leases |
— |
|
— |
|
— |
|
— |
|
— |
|
Total charge-offs |
9,233 |
|
22,333 |
|
9,985 |
|
16,319 |
|
8,496 |
|
Recoveries: |
|
|
|
|
|
Commercial |
3,381 |
|
1,535 |
|
2,495 |
|
4,294 |
|
1,040 |
|
Real estate |
50 |
|
27 |
|
15 |
|
13 |
|
8 |
|
Construction |
101 |
|
— |
|
— |
|
34 |
|
— |
|
Consumer |
5 |
|
5 |
|
5 |
|
4 |
|
7 |
|
Leases |
8 |
|
6 |
|
26 |
|
— |
|
45 |
|
Total recoveries |
3,545 |
|
1,573 |
|
2,541 |
|
4,345 |
|
1,100 |
|
Net charge-offs |
5,688 |
|
20,760 |
|
7,444 |
|
11,974 |
|
7,396 |
|
Provision for loan
losses |
9,575 |
|
8,450 |
|
20,483 |
|
16,861 |
|
28,795 |
|
Ending balance |
$ |
172,013 |
|
$ |
168,126 |
|
$ |
180,436 |
|
$ |
167,397 |
|
$ |
162,510 |
|
|
|
|
|
|
|
Allowance for
off-balance sheet credit losses: |
|
|
|
|
|
Beginning balance |
$ |
11,422 |
|
$ |
10,872 |
|
$ |
9,355 |
|
$ |
10,216 |
|
$ |
9,011 |
|
Provision for
off-balance sheet credit losses |
(575 |
) |
550 |
|
1,517 |
|
(861 |
) |
1,205 |
|
Ending balance |
$ |
10,847 |
|
$ |
11,422 |
|
$ |
10,872 |
|
$ |
9,355 |
|
$ |
10,216 |
|
|
|
|
|
|
|
Total allowance for
credit losses |
$ |
182,860 |
|
$ |
179,548 |
|
$ |
191,308 |
|
$ |
176,752 |
|
$ |
172,726 |
|
|
|
|
|
|
|
Total provision for
credit losses |
$ |
9,000 |
|
$ |
9,000 |
|
$ |
22,000 |
|
$ |
16,000 |
|
$ |
30,000 |
|
|
|
|
|
|
|
Allowance for loan
losses to LHI |
1.03 |
% |
0.96 |
% |
1.02 |
% |
0.94 |
% |
0.95 |
% |
Allowance for loan
losses to LHI excluding mortgage finance loans(2) |
1.29 |
% |
1.29 |
% |
1.42 |
% |
1.34 |
% |
1.35 |
% |
Allowance for loan
losses to average LHI |
1.09 |
% |
0.98 |
% |
1.05 |
% |
1.00 |
% |
1.04 |
% |
Allowance for loan
losses to average LHI excluding mortgage finance loans(2) |
1.33 |
% |
1.32 |
% |
1.43 |
% |
1.36 |
% |
1.36 |
% |
Net charge-offs to
average LHI(1) |
0.15 |
% |
0.48 |
% |
0.17 |
% |
0.29 |
% |
0.19 |
% |
Net charge-offs to
average LHI excluding mortgage finance loans(1)(2) |
0.18 |
% |
0.65 |
% |
0.24 |
% |
0.39 |
% |
0.25 |
% |
Net charge-offs to
average LHI for last twelve months(1) |
0.28 |
% |
0.29 |
% |
0.18 |
% |
0.15 |
% |
0.10 |
% |
Net charge-offs to
average LHI, excluding mortgage finance loans, for last twelve
months(1)(2)
|
0.36 |
% |
0.38 |
% |
0.24 |
% |
0.20 |
% |
0.14 |
% |
Total provision for
credit losses to average LHI(1) |
0.23 |
% |
0.21 |
% |
0.51 |
% |
0.39 |
% |
0.77 |
% |
Total provision for
credit losses to average LHI excluding mortgage finance
loans(1)(2) |
0.28 |
% |
0.28 |
% |
0.70 |
% |
0.52 |
% |
1.01 |
% |
Combined allowance for
credit losses to LHI |
1.10 |
% |
1.03 |
% |
1.09 |
% |
1.00 |
% |
1.01 |
% |
Combined allowance for
credit losses to LHI, excluding mortgage finance loans(2) |
1.37 |
% |
1.38 |
% |
1.51 |
% |
1.41 |
% |
1.43 |
% |
|
|
|
|
|
|
Non-performing assets
(NPAs): |
|
|
|
|
|
Non-accrual loans |
$ |
146,549 |
|
$ |
167,791 |
|
$ |
169,113 |
|
$ |
165,429 |
|
$ |
173,156 |
|
Other real estate owned
(OREO) |
18,833 |
|
18,961 |
|
19,009 |
|
18,727 |
|
17,585 |
|
Total |
$ |
165,382 |
|
$ |
186,752 |
|
$ |
188,122 |
|
$ |
184,156 |
|
$ |
190,741 |
|
|
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
1st Quarter |
|
2017 |
2016 |
2016 |
2016 |
2016 |
|
|
|
|
|
|
Non-accrual loans to
LHI |
0.88 |
% |
0.96 |
% |
0.96 |
% |
0.93 |
% |
1.02 |
% |
Non-accrual loans to
LHI excluding mortgage finance loans(2) |
1.10 |
% |
1.29 |
% |
1.34 |
% |
1.32 |
% |
1.44 |
% |
Total NPAs to LHI plus
OREO |
0.99 |
% |
1.07 |
% |
1.07 |
% |
1.04 |
% |
1.12 |
% |
Total NPAs to LHI
excluding mortgage finance loans plus OREO(2)
|
1.24 |
% |
1.43 |
% |
1.48 |
% |
1.47 |
% |
1.58 |
% |
Total NPAs to earning
assets |
0.82 |
% |
0.89 |
% |
0.87 |
% |
0.90 |
% |
0.97 |
% |
Allowance for loan
losses to non-accrual loans |
1.2x |
1.0x |
1.1x |
1.0x |
0.9x |
|
|
|
|
|
|
Restructured loans |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
249 |
|
$ |
249 |
|
Loans past due 90 days
and still accruing(3) |
$ |
8,799 |
|
$ |
10,729 |
|
$ |
9,706 |
|
$ |
7,743 |
|
$ |
10,100 |
|
|
|
|
|
|
|
Loans past due 90 days
to LHI |
0.05 |
% |
0.06 |
% |
0.06 |
% |
0.04 |
% |
0.06 |
% |
Loans past due 90 days
to LHI excluding mortgage finance loans(2) |
0.07 |
% |
0.08 |
% |
0.08 |
% |
0.06 |
% |
0.08 |
% |
|
(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, 2017, loans past due 90 days and still accruing
includes premium finance loans of $5.1 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 |
|
2017 |
2016 |
2016 |
2016 |
2016 |
Interest income |
|
|
|
|
|
Interest and fees on loans |
$ |
176,624 |
|
$ |
182,909 |
|
$ |
177,724 |
|
$ |
168,064 |
|
$ |
155,885 |
|
Securities |
225 |
|
228 |
|
232 |
|
246 |
|
261 |
|
Federal funds sold |
530 |
|
338 |
|
455 |
|
382 |
|
372 |
|
Deposits in other banks |
6,567 |
|
5,196 |
|
4,081 |
|
3,750 |
|
3,285 |
|
Total
interest income |
183,946 |
|
188,671 |
|
182,492 |
|
172,442 |
|
159,803 |
|
Interest expense |
|
|
|
|
|
Deposits |
13,293 |
|
10,432 |
|
8,950 |
|
8,971 |
|
8,822 |
|
Federal funds purchased |
252 |
|
156 |
|
126 |
|
110 |
|
126 |
|
Repurchase agreements |
1 |
|
1 |
|
3 |
|
2 |
|
3 |
|
Other
borrowings |
2,020 |
|
1,862 |
|
1,730 |
|
1,365 |
|
1,162 |
|
Subordinated notes |
4,191 |
|
4,191 |
|
4,191 |
|
4,191 |
|
4,191 |
|
Trust
preferred subordinated debentures |
830 |
|
806 |
|
753 |
|
734 |
|
716 |
|
Total
interest expense |
20,587 |
|
17,448 |
|
15,753 |
|
15,373 |
|
15,020 |
|
Net interest income |
163,359 |
|
171,223 |
|
166,739 |
|
157,069 |
|
144,783 |
|
Provision for credit losses |
9,000 |
|
9,000 |
|
22,000 |
|
16,000 |
|
30,000 |
|
Net interest income after provision for credit
losses |
154,359 |
|
162,223 |
|
144,739 |
|
141,069 |
|
114,783 |
|
Non-interest income |
|
|
|
|
|
Service charges on deposit accounts |
3,045 |
|
2,940 |
|
2,880 |
|
2,411 |
|
2,110 |
|
Wealth management and trust fee income |
1,357 |
|
1,244 |
|
1,113 |
|
1,098 |
|
813 |
|
Bank
owned life insurance (BOLI) income |
466 |
|
481 |
|
520 |
|
536 |
|
536 |
|
Brokered loan fees |
5,678 |
|
7,249 |
|
7,581 |
|
5,864 |
|
4,645 |
|
Servicing income |
2,201 |
|
1,410 |
|
310 |
|
50 |
|
(55 |
) |
Swap
fees |
1,803 |
|
536 |
|
918 |
|
1,105 |
|
307 |
|
Other |
2,560 |
|
4,975 |
|
3,394 |
|
2,868 |
|
2,941 |
|
Total
non-interest income |
17,110 |
|
18,835 |
|
16,716 |
|
13,932 |
|
11,297 |
|
Non-interest expense |
|
|
|
|
|
Salaries and employee benefits |
63,003 |
|
66,081 |
|
56,722 |
|
54,810 |
|
51,372 |
|
Net
occupancy expense |
6,111 |
|
5,937 |
|
5,634 |
|
5,838 |
|
5,812 |
|
Marketing |
4,950 |
|
4,617 |
|
4,292 |
|
4,486 |
|
3,908 |
|
Legal
and professional |
7,453 |
|
6,443 |
|
5,333 |
|
6,226 |
|
5,324 |
|
Communications and technology |
6,506 |
|
6,334 |
|
6,620 |
|
6,391 |
|
6,217 |
|
FDIC
insurance assessment |
5,994 |
|
6,573 |
|
6,355 |
|
6,043 |
|
5,469 |
|
Servicing related expenses |
1,750 |
|
398 |
|
620 |
|
612 |
|
73 |
|
Other |
10,327 |
|
10,140 |
|
9,223 |
|
9,849 |
|
8,645 |
|
Total
non-interest expense |
106,094 |
|
106,523 |
|
94,799 |
|
94,255 |
|
86,820 |
|
Income before income taxes |
65,375 |
|
74,535 |
|
66,656 |
|
60,746 |
|
39,260 |
|
Income tax expense |
22,833 |
|
26,149 |
|
23,931 |
|
21,866 |
|
14,132 |
|
Net income |
42,542 |
|
48,386 |
|
42,725 |
|
38,880 |
|
25,128 |
|
Preferred stock dividends |
2,438 |
|
2,437 |
|
2,438 |
|
2,437 |
|
2,438 |
|
Net income available to common shareholders |
$ |
40,104 |
|
$ |
45,949 |
|
$ |
40,287 |
|
$ |
36,443 |
|
$ |
22,690 |
|
TEXAS CAPITAL BANCSHARES, INC. |
QUARTERLY FINANCIAL SUMMARY - UNAUDITED |
Consolidated Daily Average Balances, Average Yields and Rates |
(Dollars
in thousands) |
|
1st Quarter 2017 |
|
4th Quarter 2016 |
|
3rd Quarter 2016 |
|
2nd Quarter 2016 |
|
1st Quarter 2016 |
|
AverageBalance |
Revenue/Expense (1) |
Yield/Rate |
|
Average Balance |
Revenue/ Expense (1) |
Yield/ Rate |
|
AverageBalance |
Revenue/Expense (1) |
Yield/Rate |
|
Average Balance |
Revenue/ Expense (1) |
Yield/ Rate |
|
Average Balance |
Revenue/ Expense (1) |
Yield/ Rate |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities -
Taxable |
$ |
31,905 |
|
$ |
224 |
|
2.84 |
% |
|
$ |
25,008 |
|
$ |
221 |
|
3.53 |
% |
|
$ |
26,051 |
|
$ |
228 |
|
3.47 |
% |
|
$ |
27,097 |
|
$ |
240 |
|
3.57 |
% |
|
$ |
28,343 |
|
$ |
254 |
|
3.60 |
% |
Securities - Non-taxable(2) |
224 |
|
3 |
|
4.85 |
% |
|
531 |
|
9 |
|
6.37 |
% |
|
564 |
|
8 |
|
5.82 |
% |
|
564 |
|
8 |
|
5.87 |
% |
|
759 |
|
11 |
|
5.70 |
% |
Federal funds sold and
securities purchased under resale agreements |
276,910 |
|
530 |
|
0.78 |
% |
|
254,008 |
|
338 |
|
0.53 |
% |
|
369,215 |
|
455 |
|
0.49 |
% |
|
312,832 |
|
382 |
|
0.49 |
% |
|
304,425 |
|
372 |
|
0.49 |
% |
Interest-bearing
deposits in other banks |
3,312,256 |
|
6,567 |
|
0.80 |
% |
|
3,812,076 |
|
5,197 |
|
0.54 |
% |
|
3,192,141 |
|
4,080 |
|
0.51 |
% |
|
2,871,295 |
|
3,750 |
|
0.53 |
% |
|
2,649,164 |
|
3,285 |
|
0.50 |
% |
Loans held for sale, at
fair value |
1,064,322 |
|
9,535 |
|
3.63 |
% |
|
944,484 |
|
7,903 |
|
3.33 |
% |
|
430,869 |
|
3,662 |
|
3.38 |
% |
|
157,898 |
|
1,350 |
|
3.44 |
% |
|
126,084 |
|
1,094 |
|
3.49 |
% |
LHI, mortgage finance
loans |
2,757,566 |
|
23,105 |
|
3.40 |
% |
|
4,371,475 |
|
35,081 |
|
3.19 |
% |
|
4,658,804 |
|
36,655 |
|
3.13 |
% |
|
4,412,091 |
|
33,974 |
|
3.10 |
% |
|
3,724,513 |
|
29,037 |
|
3.14 |
% |
LHI |
12,980,544 |
|
145,018 |
|
4.53 |
% |
|
12,701,868 |
|
140,130 |
|
4.39 |
% |
|
12,591,561 |
|
137,407 |
|
4.34 |
% |
|
12,276,272 |
|
132,740 |
|
4.35 |
% |
|
11,910,788 |
|
125,754 |
|
4.25 |
% |
Less
allowance for loan losses |
169,318 |
|
— |
|
— |
|
|
180,727 |
|
— |
|
— |
|
|
168,086 |
|
— |
|
— |
|
|
164,316 |
|
— |
|
— |
|
|
141,125 |
|
— |
|
— |
|
LHI, net of
allowance |
15,568,792 |
|
168,123 |
|
4.38 |
% |
|
16,892,616 |
|
175,211 |
|
4.13 |
% |
|
17,082,279 |
|
174,062 |
|
4.05 |
% |
|
16,524,047 |
|
166,714 |
|
4.06 |
% |
|
15,494,176 |
|
154,791 |
|
4.02 |
% |
Total earning
assets |
20,254,409 |
|
184,982 |
|
3.70 |
% |
|
21,928,723 |
|
188,879 |
|
3.43 |
% |
|
21,101,119 |
|
182,495 |
|
3.44 |
% |
|
19,893,733 |
|
172,444 |
|
3.49 |
% |
|
18,602,951 |
|
159,807 |
|
3.46 |
% |
Cash and other
assets |
606,762 |
|
|
|
|
595,671 |
|
|
|
|
588,440 |
|
|
|
|
544,737 |
|
|
|
|
506,025 |
|
|
|
Total assets |
$ |
20,861,171 |
|
|
|
|
$ |
22,524,394 |
|
|
|
|
$ |
21,689,559 |
|
|
|
|
$ |
20,438,470 |
|
|
|
|
$ |
19,108,976 |
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction
deposits |
$ |
2,008,401 |
|
$ |
2,193 |
|
0.44 |
% |
|
$ |
2,281,240 |
|
$ |
2,129 |
|
0.37 |
% |
|
$ |
2,301,362 |
|
$ |
1,960 |
|
0.34 |
% |
|
$ |
2,207,726 |
|
$ |
1,749 |
|
0.32 |
% |
|
$ |
2,004,817 |
|
$ |
1,381 |
|
0.28 |
% |
Savings deposits |
6,989,748 |
|
10,483 |
|
0.61 |
% |
|
6,711,083 |
|
7,592 |
|
0.45 |
% |
|
6,177,681 |
|
6,228 |
|
0.40 |
% |
|
6,388,133 |
|
6,494 |
|
0.41 |
% |
|
6,335,425 |
|
6,714 |
|
0.43 |
% |
Time deposits |
427,770 |
|
617 |
|
0.59 |
% |
|
474,548 |
|
711 |
|
0.60 |
% |
|
501,701 |
|
763 |
|
0.61 |
% |
|
486,610 |
|
727 |
|
0.60 |
% |
|
509,762 |
|
727 |
|
0.57 |
% |
Total interest bearing
deposits |
9,425,919 |
|
13,293 |
|
0.57 |
% |
|
9,466,871 |
|
10,432 |
|
0.44 |
% |
|
8,980,744 |
|
8,951 |
|
0.40 |
% |
|
9,082,469 |
|
8,970 |
|
0.40 |
% |
|
8,850,004 |
|
8,822 |
|
0.40 |
% |
Other borrowings |
1,333,685 |
|
2,273 |
|
0.69 |
% |
|
1,553,010 |
|
2,017 |
|
0.52 |
% |
|
1,607,613 |
|
1,860 |
|
0.46 |
% |
|
1,411,387 |
|
1,476 |
|
0.42 |
% |
|
1,346,998 |
|
1,292 |
|
0.39 |
% |
Subordinated notes |
281,076 |
|
4,191 |
|
6.05 |
% |
|
280,985 |
|
4,191 |
|
5.93 |
% |
|
280,895 |
|
4,191 |
|
5.94 |
% |
|
280,805 |
|
4,191 |
|
6.00 |
% |
|
280,713 |
|
4,191 |
|
6.00 |
% |
Trust preferred
subordinated debentures |
113,406 |
|
830 |
|
2.97 |
% |
|
113,406 |
|
806 |
|
2.83 |
% |
|
113,406 |
|
752 |
|
2.64 |
% |
|
113,406 |
|
735 |
|
2.61 |
% |
|
113,406 |
|
716 |
|
2.54 |
% |
Total interest bearing
liabilities |
11,154,086 |
|
20,587 |
|
0.75 |
% |
|
11,414,272 |
|
17,446 |
|
0.61 |
% |
|
10,982,658 |
|
15,754 |
|
0.57 |
% |
|
10,888,067 |
|
15,372 |
|
0.57 |
% |
|
10,591,121 |
|
15,021 |
|
0.57 |
% |
Demand deposits |
7,547,338 |
|
|
|
|
9,129,668 |
|
|
|
|
8,849,725 |
|
|
|
|
7,767,693 |
|
|
|
|
6,730,586 |
|
|
|
Other liabilities |
117,877 |
|
|
|
|
141,153 |
|
|
|
|
135,141 |
|
|
|
|
113,927 |
|
|
|
|
148,418 |
|
|
|
Stockholders’
equity |
2,041,870 |
|
|
|
|
1,839,301 |
|
|
|
|
1,722,035 |
|
|
|
|
1,668,783 |
|
|
|
|
1,638,851 |
|
|
|
Total liabilities and
stockholders’ equity |
$ |
20,861,171 |
|
|
|
|
$ |
22,524,394 |
|
|
|
|
$ |
21,689,559 |
|
|
|
|
$ |
20,438,470 |
|
|
|
|
$ |
19,108,976 |
|
|
|
Net
interest income(2) |
|
$ |
164,395 |
|
|
|
|
$ |
171,433 |
|
|
|
|
$ |
166,741 |
|
|
|
|
$ |
157,072 |
|
|
|
|
$ |
144,786 |
|
|
Net interest
margin |
|
|
3.29 |
% |
|
|
|
3.11 |
% |
|
|
|
3.14 |
% |
|
|
|
3.18 |
% |
|
|
|
3.13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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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