Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company
of Texas Capital Bank, announced operating results for the first
quarter of 2021.
"In my first 90 days as CEO, we have achieved
momentum in establishing the foundation from which we can move
forward," said Rob C. Holmes, President and CEO. "In the first
quarter alone, we were able to execute the largest capital raise in
our history and close on our first warehouse lending credit risk
transfer transaction, both of which position TCBI for future
growth. Looking ahead, we will continue to supplement our workforce
with new talent, take steps to drive shareholder value and develop
our fulsome long-term strategy. As promised, I look forward to
sharing it with you in the third quarter."
- Net income of $71.9 million ($1.33 per
diluted share) reported for the first quarter of 2021, an increase
of $11.8 million on a linked quarter basis and an increase of $88.6
million from the first quarter of 2020.
- Total mortgage finance loans, including
mortgage correspondent aggregation ("MCA") loans held for sale
("LHS"), decreased 2% on a linked quarter basis (decreasing 15% on
an average basis) and increased 10% from the first quarter of 2020
(decreasing 17% on an average basis).
- Demand deposits increased 19% and total
deposits increased 8% on a linked quarter basis (increasing 9% and
2%, respectively, on an average basis), and increased 61% and 23%,
respectively, from the first quarter of 2020 (increasing 44% and
21%, respectively, on an average basis).
- Loans held for investment ("LHI"),
excluding mortgage finance loans, were flat on a linked quarter
basis (decreasing 1% on an average basis) and decreased 9% from the
first quarter of 2020 (decreasing 7% on an average basis).
- Issuance of $300.0 million in 5.75%
fixed rate non-cumulative perpetual preferred stock, completed in
the first quarter of 2021, providing additional equity to be used
for general corporate purchases, including funding regulatory
capital infusions into the Bank. We also intend to use a portion of
the net proceeds to redeem, subject to all applicable regulatory
approvals, our existing 6.5% fixed rate non-cumulative perpetual
preferred stock.
- Issuance of $275.0 million senior
unsecured credit-linked notes in the first quarter of 2021. The net
proceeds of this offering will be used to expand the Bank's
warehouse lending program and better serve our clients in all
market environments.
FINANCIAL SUMMARY
(dollars and shares in
thousands) |
Q1 2021 |
|
Q1 2020 |
|
% Change |
QUARTERLY OPERATING
RESULTS |
|
|
|
|
|
Net income |
$ |
71,938 |
|
|
$ |
(16,687 |
) |
|
|
(531 |
) |
% |
Net income available to common stockholders |
$ |
68,159 |
|
|
$ |
(19,125 |
) |
|
|
(456 |
) |
% |
Diluted earnings per common share |
$ |
1.33 |
|
|
$ |
(0.38 |
) |
|
|
(450 |
) |
% |
Diluted common shares |
51,070 |
|
|
50,475 |
|
|
|
1 |
|
% |
ROA |
0.73 |
% |
|
(0.20 |
) |
% |
|
|
ROE |
10.08 |
% |
|
(2.85 |
) |
% |
|
|
BALANCE
SHEET |
|
|
|
|
|
LHS |
$ |
176,286 |
|
|
$ |
774,064 |
|
|
|
(77 |
) |
% |
LHI, mortgage finance |
9,009,081 |
|
|
7,588,803 |
|
|
|
19 |
|
% |
LHI |
15,399,174 |
|
|
16,857,579 |
|
|
|
(9 |
) |
% |
Total LHI |
24,408,255 |
|
|
24,446,382 |
|
|
|
— |
|
% |
Total assets |
40,054,433 |
|
|
35,879,416 |
|
|
|
12 |
|
% |
Demand deposits |
15,174,642 |
|
|
9,420,303 |
|
|
|
61 |
|
% |
Total deposits |
33,391,970 |
|
|
27,134,263 |
|
|
|
23 |
|
% |
Stockholders’ equity |
3,159,482 |
|
|
2,772,596 |
|
|
|
14 |
|
% |
DETAILED FINANCIALS
For the first quarter of 2021, net income was
$71.9 million, compared to net income of $60.2 million for the
fourth quarter of 2020, and net loss of $16.7 million for the first
quarter of 2020. On a fully diluted basis, earnings per common
share were $1.33 for the quarter ended March 31, 2021,
compared to earnings per common share of $1.14 for the quarter
ended December 31, 2020 and loss per common share of $0.38 for the
quarter ended March 31, 2020. The increase in net income for the
first quarter of 2021 as compared to the fourth quarter of 2020
resulted primarily from a $38.0 million decrease in the provision
for credit losses, offset by a decrease in net interest income.
We recorded a $6.0 million negative provision
for credit losses for the first quarter of 2021, compared to a
$32.0 million provision for credit losses for the fourth quarter of
2020 and a $96.0 million provision for credit losses for the first
quarter of 2020. The linked quarter decrease in provision for
credit losses resulted primarily from a decrease in charge-offs and
improvement in the economic outlook as the economy begins to
recover from the impacts of the COVID-19 pandemic. We recorded $6.4
million in net charge-offs during the first quarter of 2021,
including $5.0 million in energy net charge-offs on loans that had
been previously identified as problem loans, compared to $65.4
million during the fourth quarter of 2020 and $57.7 million during
the first quarter of 2020. Criticized loans totaled $945.1 million
at March 31, 2021, compared to $918.4 million at December 31, 2020
and $675.9 million at March 31, 2020. Criticized loan levels remain
elevated when compared to pre-pandemic levels due to the downgrade
of loans to borrowers that have been impacted by the COVID-19
pandemic.
Non-performing assets ("NPAs") totaled $97.7
million at March 31, 2021, a decrease of $24.3 million
compared to the fourth quarter of 2020 and a decrease of $121.4
million compared to the first quarter of 2020. The linked quarter
change in NPAs was primarily due to a decline in non-accrual energy
loans. The ratio of total LHI NPAs to total LHI plus other real
estate owned ("OREO") for the first quarter of 2021 was 0.40%,
compared to 0.50% for the fourth quarter of 2020 and 0.90% for the
first quarter of 2020.
Net interest income was $200.1 million for the
first quarter of 2021, compared to $223.0 million for the fourth
quarter of 2020 and $228.3 million for the first quarter of 2020.
Net interest margin for the first quarter of 2021 was 2.09%, a
decrease of 23 basis points from the fourth quarter of 2020 and a
decrease of 69 basis points from the first quarter of 2020. The
shift in earning assets, primarily the increases in liquidity
assets and investment securities coupled with a decrease in total
average loans, contributed to the linked-quarter and year-over-year
decreases in net interest margin. LHI yields, excluding mortgage
finance loans, decreased 21 basis points from the fourth quarter of
2020, and decreased 98 basis points compared to the first quarter
of 2020. LHI, mortgage finance yields for the first quarter of 2021
decreased 7 basis points compared to the fourth quarter of 2020,
and increased 7 basis points compared to the first quarter of 2020.
Additionally, total cost of deposits for the first quarter of 2021
decreased 5 basis points to 0.24% compared to 0.29% for the fourth
quarter of 2020, and decreased 66 basis points from .90% for the
first quarter of 2020.
Non-interest income for the first quarter of
2021 decreased $3.8 million, or 9%, compared to the fourth quarter
of 2020, and increased $27.3 million, or 232%, compared to the
first quarter of 2020. The linked quarter decrease was primarily
related to decreases in brokered loans fees, net gain/(loss) on
sale of LHS and other non-interest income, partially offset by an
increase in service charges on deposit accounts. The year-over-year
increase was primarily related to increases in net gain/(loss) on
sale of LHS, servicing income and other non-interest income. The
linked quarter decreases in brokered loan fees and net gain/(loss)
on sale of LHS were primarily due to a decrease in total mortgage
finance volumes in the first quarter of 2021. The year-over-year
increase in net gain/(loss) on sale of LHS was due to lower hedge
costs in the first quarter of 2021 as a result of holding purchased
loans for shorter durations than in prior periods, and is offset by
the year-over-year decline in net interest income on LHS.
Non-interest expense for the first quarter of
2021 decreased $570,000, or less than 1 percent, compared to the
fourth quarter of 2020, and decreased $15.1 million, or 9%,
compared to the first quarter of 2020. The linked quarter decrease
was primarily related to decreases in marketing expense, legal and
professional expense and servicing-related expenses, offset by an
increase in salaries and employee benefits, which is typically
higher in the first quarter due to FICA and other seasonal payroll
expenses that peak in the first quarter. The year-over-year
decrease was primarily due to decreases in marketing expense, legal
and professional expense, servicing-related expenses and
merger-related expenses, offset by increases in salaries and
employee benefits and communications and technology expenses.
All regulatory ratios continue to be in excess
of "well-capitalized" requirements as of March 31, 2021. Our
CET 1, tier 1 capital, total capital and leverage ratios were
10.2%, 12.3%, 14.0% and 8.3%, respectively, at March 31, 2021,
compared to 9.4%, 10.3%, 12.1% and 7.5%, respectively, at December
31, 2020. At March 31, 2021, our ratio of tangible common
equity to total tangible assets was 6.7% compared to 7.2% at
December 31, 2020.
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.
Forward Looking Statements
This communication contains “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995 regarding our financial condition, results of
operations, business plans and future performance. These statements
are not historical in nature and can generally be identified by
such words as “believe,” “expect,” “estimate,” “anticipate,”
“plan,” “may,” “will,” “forecast,” “could,” “should”, “projects,”
“targeted,” “continue,” “intend” and similar expressions.
Because forward-looking statements relate to future results and
occurrences, they are subject to inherent uncertainties, risks, and
changes in circumstances that are difficult to predict. 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 factors include,
but are not limited to, (1) the credit quality of our loan
portfolio, (2) general economic conditions in the United States,
globally and in our markets and the impact they may have on us and
our customers, including the continued impact on our customers from
volatility in oil and gas prices, (3) the material risks and
uncertainties for the U.S. and world economies, and for our
business, resulting from the COVID-19 pandemic and any other
pandemic, epidemic or health related crisis, (4) expectations
regarding rates of default and credit losses, (5) volatility in the
mortgage industry, (6) our business strategies, (7) our
expectations about future financial performance, future growth and
earnings, (8) the appropriateness of our allowance for credit
losses and provision for credit losses, (9) our ability to
identify, employ and retain qualified employees, (10) the impact of
changing regulatory requirements and legislative changes on our
business, (11) increased competition, (12) interest rate risk,
(13)greater than expected costs or difficulties related to the
integration and development of new lines of business, new products
or service offerings and new technologies, (14) technological
changes, (15) the cost and effects of cyber incidents or other
failures, interruptions or security breaches of our systems or
those of third party providers and (16) our success at managing the
risk and uncertainties involved in the foregoing factors. In
addition, statements about the effects of the COVID-19 pandemic on
the firm’s business, results, financial position and liquidity are
subject to the risk that the actual impact may differ, possibly
materially, from what is currently expected.
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, our Quarterly Reports on Form 10-Q and in other filings we
make with the Securities and Exchange Commission. The information
contained in this communication speaks only as of its date. Except
to the extent required by applicable law or regulation, we disclaim
any obligation to update such factors or to publicly announce the
results of any revisions to any of the forward-looking statements
included herein to reflect future events or developments.
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 |
|
2021 |
2020 |
2020 |
2020 |
2020 |
CONSOLIDATED
STATEMENTS OF INCOME |
|
|
|
|
|
Interest income |
$ |
228,412 |
|
|
$ |
255,163 |
|
$ |
243,731 |
|
$ |
252,010 |
|
|
$ |
306,008 |
|
|
Interest expense |
28,339 |
|
|
32,153 |
|
36,162 |
|
42,082 |
|
|
77,689 |
|
|
Net interest income |
200,073 |
|
|
223,010 |
|
207,569 |
|
209,928 |
|
|
228,319 |
|
|
Provision for credit losses |
(6,000 |
) |
|
32,000 |
|
30,000 |
|
100,000 |
|
|
96,000 |
|
|
Net interest income after
provision for credit losses |
206,073 |
|
|
191,010 |
|
177,569 |
|
109,928 |
|
|
132,319 |
|
|
Non-interest income |
39,092 |
|
|
42,886 |
|
60,348 |
|
70,502 |
|
|
11,780 |
|
|
Non-interest expense |
150,316 |
|
|
150,886 |
|
165,741 |
|
222,352 |
|
|
165,417 |
|
|
Income/(loss) before income
taxes |
94,849 |
|
|
83,010 |
|
72,176 |
|
(41,922 |
) |
|
(21,318 |
) |
|
Income tax expense/(benefit) |
22,911 |
|
|
22,834 |
|
15,060 |
|
(7,606 |
) |
|
(4,631 |
) |
|
Net income/(loss) |
71,938 |
|
|
60,176 |
|
57,116 |
|
(34,316 |
) |
|
(16,687 |
) |
|
Preferred stock dividends |
3,779 |
|
|
2,437 |
|
2,438 |
|
2,437 |
|
|
2,438 |
|
|
Net income/(loss) available to common stockholders |
$ |
68,159 |
|
|
$ |
57,739 |
|
$ |
54,678 |
|
$ |
(36,753 |
) |
|
$ |
(19,125 |
) |
|
Diluted earnings/(loss) per common share |
$ |
1.33 |
|
|
$ |
1.14 |
|
$ |
1.08 |
|
$ |
(0.73 |
) |
|
$ |
(0.38 |
) |
|
Diluted common shares |
51,069,511 |
|
|
50,794,421 |
|
50,573,073 |
|
50,416,331 |
|
|
50,474,802 |
|
|
CONSOLIDATED BALANCE
SHEET DATA |
|
|
|
|
|
Total assets |
$ |
40,054,433 |
|
|
$ |
37,726,096 |
|
$ |
38,432,872 |
|
$ |
36,613,127 |
|
|
$ |
35,879,416 |
|
|
LHI |
15,399,174 |
|
|
15,351,451 |
|
15,789,958 |
|
16,552,203 |
|
|
16,857,579 |
|
|
LHI, mortgage finance |
9,009,081 |
|
|
9,079,409 |
|
9,378,104 |
|
8,972,626 |
|
|
7,588,803 |
|
|
LHS |
176,286 |
|
|
283,165 |
|
648,009 |
|
454,581 |
|
|
774,064 |
|
|
Liquidity assets(1) |
11,212,276 |
|
|
9,032,807 |
|
10,461,544 |
|
9,540,044 |
|
|
9,498,189 |
|
|
Investment securities |
3,443,058 |
|
|
3,196,970 |
|
1,367,313 |
|
234,969 |
|
|
228,784 |
|
|
Demand deposits |
15,174,642 |
|
|
12,740,947 |
|
12,339,212 |
|
10,835,911 |
|
|
9,420,303 |
|
|
Total deposits |
33,391,970 |
|
|
30,996,589 |
|
31,959,487 |
|
30,187,695 |
|
|
27,134,263 |
|
|
Other borrowings |
2,515,587 |
|
|
3,111,751 |
|
2,908,183 |
|
2,895,790 |
|
|
5,195,267 |
|
|
Long-term debt |
664,968 |
|
|
395,896 |
|
395,806 |
|
395,715 |
|
|
395,625 |
|
|
Stockholders’ equity |
3,159,482 |
|
|
2,871,224 |
|
2,800,404 |
|
2,734,755 |
|
|
2,772,596 |
|
|
|
|
|
|
|
|
End of period shares outstanding |
50,557,767 |
|
|
50,470,450 |
|
50,455,552 |
|
50,435,672 |
|
|
50,407,778 |
|
|
Book value |
$ |
53.59 |
|
|
$ |
53.92 |
|
$ |
52.53 |
|
$ |
51.25 |
|
|
$ |
52.03 |
|
|
Tangible book value(2) |
$ |
53.24 |
|
|
$ |
53.57 |
|
$ |
52.18 |
|
$ |
50.89 |
|
|
$ |
51.67 |
|
|
SELECTED FINANCIAL RATIOS |
|
|
|
|
|
Net interest margin |
2.09 |
|
% |
2.32 |
% |
2.22 |
% |
2.30 |
|
% |
2.78 |
|
% |
Return on average assets |
0.73 |
|
% |
0.61 |
% |
0.59 |
% |
(0.36 |
) |
% |
(0.20 |
) |
% |
Return on average common equity |
10.08 |
|
% |
8.50 |
% |
8.24 |
% |
(5.48 |
) |
% |
(2.85 |
) |
% |
Non-interest income to average earning assets |
0.41 |
|
% |
0.44 |
% |
0.64 |
% |
0.77 |
|
% |
0.14 |
|
% |
Efficiency ratio(3) |
62.9 |
|
% |
56.7 |
% |
61.9 |
% |
79.3 |
|
% |
68.9 |
|
% |
Non-interest expense to average earning assets |
1.57 |
|
% |
1.56 |
% |
1.76 |
% |
2.43 |
|
% |
2.00 |
|
% |
Tangible common equity to
total tangible assets(4) |
6.7 |
|
% |
7.2 |
% |
6.9 |
% |
7.0 |
|
% |
7.3 |
|
% |
Common Equity Tier 1 |
10.2 |
|
% |
9.4 |
% |
9.1 |
% |
8.8 |
|
% |
9.3 |
|
% |
Tier 1 capital |
12.3 |
|
% |
10.3 |
% |
9.9 |
% |
9.7 |
|
% |
10.2 |
|
% |
Total capital |
14.0 |
|
% |
12.1 |
% |
11.8 |
% |
11.6 |
|
% |
12.0 |
|
% |
Leverage |
8.3 |
|
% |
7.5 |
% |
7.6 |
% |
7.5 |
|
% |
8.5 |
|
% |
- Liquidity assets include Federal funds sold and
interest-bearing deposits in other banks.
- Stockholders’ equity excluding preferred stock, less goodwill
and intangibles, divided by shares outstanding at period end.
- Non-interest expense divided by the sum of net interest income
and non-interest income.
- Stockholders’ equity excluding preferred stock, less goodwill
and intangibles, divided by total assets, less goodwill and
intangibles.
TEXAS
CAPITAL BANCSHARES, INC. |
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
(dollars in
thousands) |
|
March 31, 2021 |
March 31, 2020 |
%Change |
Assets |
|
|
|
Cash and due from banks |
$ |
215,835 |
|
|
$ |
162,386 |
|
|
33 |
|
% |
Interest-bearing deposits |
11,212,276 |
|
|
9,468,189 |
|
|
18 |
|
% |
Federal funds sold and
securities purchased under resale agreements |
— |
|
|
30,000 |
|
|
(100 |
) |
% |
Securities,
available-for-sale |
3,443,058 |
|
|
228,784 |
|
|
N/M |
LHS, at fair value |
176,286 |
|
|
774,064 |
|
|
(77 |
) |
% |
LHI, mortgage finance |
9,009,081 |
|
|
7,588,803 |
|
|
19 |
|
% |
LHI (net of unearned
income) |
15,399,174 |
|
|
16,857,579 |
|
|
(9 |
) |
% |
Less: Allowance for credit
losses on loans |
242,484 |
|
|
240,958 |
|
|
1 |
|
% |
LHI, net |
24,165,771 |
|
|
24,205,424 |
|
|
— |
|
% |
Mortgage servicing rights,
net |
121,096 |
|
|
70,619 |
|
|
71 |
|
% |
Premises and equipment,
net |
23,346 |
|
|
29,663 |
|
|
(21 |
) |
% |
Accrued interest receivable
and other assets |
679,199 |
|
|
892,305 |
|
|
(24 |
) |
% |
Goodwill and intangibles,
net |
17,566 |
|
|
17,982 |
|
|
(2 |
) |
% |
Total assets |
$ |
40,054,433 |
|
|
$ |
35,879,416 |
|
|
12 |
|
% |
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
Liabilities: |
|
|
|
Deposits: |
|
|
|
Non-interest bearing |
$ |
15,174,642 |
|
|
$ |
9,420,303 |
|
|
61 |
|
% |
Interest bearing |
18,217,328 |
|
|
17,713,960 |
|
|
3 |
|
% |
Total deposits |
33,391,970 |
|
|
27,134,263 |
|
|
23 |
|
% |
|
|
|
|
Accrued interest payable |
5,629 |
|
|
16,969 |
|
|
(67 |
) |
% |
Other liabilities |
316,797 |
|
|
364,696 |
|
|
(13 |
) |
% |
Federal funds purchased and
repurchase agreements |
115,587 |
|
|
295,267 |
|
|
(61 |
) |
% |
Other borrowings |
2,400,000 |
|
|
4,900,000 |
|
|
(51 |
) |
% |
Long-term debt |
664,968 |
|
|
395,625 |
|
|
68 |
|
% |
Total liabilities |
36,894,951 |
|
|
33,106,820 |
|
|
11 |
|
% |
|
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock, $.01 par
value, $1,000 liquidation value: |
|
|
|
Authorized shares -
10,000,000 |
|
|
|
Issued shares - 6,300,000 and
6,000,000 shares issued at March 31, 2021 and 2020,
respectively |
450,000 |
|
|
150,000 |
|
|
200 |
|
% |
Common stock, $.01 par value: |
|
|
|
Authorized shares -
100,000,000 |
|
|
|
Issued shares - 50,558,184 and
50,408,195 at March 31, 2021 and 2020, respectively |
505 |
|
|
504 |
|
|
— |
|
% |
Additional paid-in capital |
984,207 |
|
|
979,939 |
|
|
— |
|
% |
Retained earnings |
1,781,215 |
|
|
1,637,392 |
|
|
9 |
|
% |
Treasury stock (shares at
cost: 417 at March 31, 2021 and 2020) |
(8 |
) |
|
(8 |
) |
|
— |
|
% |
Accumulated other comprehensive income/(loss), net of taxes |
(56,437 |
) |
|
4,769 |
|
|
N/M |
Total stockholders’
equity |
3,159,482 |
|
|
2,772,596 |
|
|
14 |
|
% |
Total liabilities and
stockholders’ equity |
$ |
40,054,433 |
|
|
$ |
35,879,416 |
|
|
12 |
|
% |
TEXAS CAPITAL
BANCSHARES, INC. |
|
|
CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED) |
|
|
(dollars in thousands except
per share data) |
|
|
|
Three Months Ended March 31, |
|
2021 |
2020 |
Interest income |
|
|
Interest and fees on loans |
$ |
215,592 |
|
|
$ |
283,625 |
|
|
Investment securities |
9,887 |
|
|
2,183 |
|
|
Federal funds sold and securities purchased under resale
agreements |
1 |
|
|
614 |
|
|
Interest-bearing deposits in other banks |
2,932 |
|
|
19,586 |
|
|
Total interest income |
228,412 |
|
|
306,008 |
|
|
Interest expense |
|
|
Deposits |
20,004 |
|
|
62,174 |
|
|
Federal funds purchased |
75 |
|
|
669 |
|
|
Other borrowings |
2,517 |
|
|
9,582 |
|
|
Long-term debt |
5,743 |
|
|
5,264 |
|
|
Total interest expense |
28,339 |
|
|
77,689 |
|
|
Net interest income |
200,073 |
|
|
228,319 |
|
|
Provision for credit losses |
(6,000 |
) |
|
96,000 |
|
|
Net interest income after provision for credit
losses |
206,073 |
|
|
132,319 |
|
|
Non-interest income |
|
|
Service charges on deposit accounts |
4,716 |
|
|
3,293 |
|
|
Wealth management and trust fee income |
2,855 |
|
|
2,467 |
|
|
Brokered loan fees |
9,311 |
|
|
8,015 |
|
|
Servicing income |
9,009 |
|
|
4,746 |
|
|
Swap fees |
526 |
|
|
2,757 |
|
|
Net gain/(loss) on sale of LHS |
5,572 |
|
|
(13,000 |
) |
|
Other |
7,103 |
|
|
3,502 |
|
|
Total non-interest income |
39,092 |
|
|
11,780 |
|
|
Non-interest expense |
|
|
Salaries and employee benefits |
87,522 |
|
|
77,193 |
|
|
Net occupancy expense |
8,274 |
|
|
8,712 |
|
|
Marketing |
1,697 |
|
|
8,522 |
|
|
Legal and professional |
8,277 |
|
|
17,466 |
|
|
Communications and technology |
15,969 |
|
|
13,791 |
|
|
FDIC insurance assessment |
6,613 |
|
|
5,849 |
|
|
Servicing-related expenses |
12,989 |
|
|
16,354 |
|
|
Merger-related expenses |
— |
|
|
7,270 |
|
|
Other |
8,975 |
|
|
10,260 |
|
|
Total non-interest
expense |
150,316 |
|
|
165,417 |
|
|
Income/(loss) before income taxes |
94,849 |
|
|
(21,318 |
) |
|
Income tax expense/(benefit) |
22,911 |
|
|
(4,631 |
) |
|
Net income/(loss) |
71,938 |
|
|
(16,687 |
) |
|
Preferred stock dividends |
3,779 |
|
|
2,438 |
|
|
Net income/(loss) available to common
stockholders |
$ |
68,159 |
|
|
$ |
(19,125 |
) |
|
|
|
|
Basic earnings/(loss) per common share |
$ |
1.35 |
|
|
$ |
(0.38 |
) |
|
Diluted earnings/(loss) per common share |
$ |
1.33 |
|
|
$ |
(0.38 |
) |
|
TEXAS
CAPITAL BANCSHARES, INC. |
SUMMARY
OF CREDIT LOSS EXPERIENCE |
(dollars in
thousands) |
|
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
1st Quarter |
|
2021 |
2020 |
2020 |
2020 |
2020 |
Allowance for credit losses on
loans: |
|
|
|
|
|
Beginning balance |
$ |
254,615 |
|
|
$ |
290,165 |
|
$ |
264,722 |
|
$ |
240,958 |
|
$ |
195,047 |
|
Impact of CECL adoption |
— |
|
|
— |
|
— |
|
— |
|
8,585 |
|
Loans charged-off: |
|
|
|
|
|
Commercial |
2,451 |
|
|
37,984 |
|
2,436 |
|
12,287 |
|
20,653 |
|
Energy |
5,732 |
|
|
33,283 |
|
141 |
|
62,368 |
|
37,730 |
|
Real estate |
— |
|
|
180 |
|
— |
|
— |
|
— |
|
Total charge-offs |
8,183 |
|
|
71,447 |
|
2,577 |
|
74,655 |
|
58,383 |
|
Recoveries: |
|
|
|
|
|
Commercial |
1,050 |
|
|
394 |
|
113 |
|
513 |
|
257 |
|
Energy |
715 |
|
|
5,696 |
|
880 |
|
— |
|
423 |
|
Total recoveries |
1,765 |
|
|
6,090 |
|
993 |
|
513 |
|
680 |
|
Net charge-offs |
6,418 |
|
|
65,357 |
|
1,584 |
|
74,142 |
|
57,703 |
|
Provision for credit losses on
loans |
(5,713 |
) |
|
29,807 |
|
27,027 |
|
97,906 |
|
95,029 |
|
Ending balance |
$ |
242,484 |
|
|
$ |
254,615 |
|
$ |
290,165 |
|
$ |
264,722 |
|
$ |
240,958 |
|
|
|
|
|
|
|
Allowance for off-balance
sheet credit losses: |
|
|
|
|
|
Beginning balance |
$ |
17,434 |
|
|
$ |
15,241 |
|
$ |
12,268 |
|
$ |
10,174 |
|
$ |
8,640 |
|
Impact of CECL adoption |
— |
|
|
— |
|
— |
|
— |
|
563 |
|
Provision for off-balance
sheet credit losses |
(287 |
) |
|
2,193 |
|
2,973 |
|
2,094 |
|
971 |
|
Ending balance |
$ |
17,147 |
|
|
$ |
17,434 |
|
$ |
15,241 |
|
$ |
12,268 |
|
$ |
10,174 |
|
|
|
|
|
|
|
Total allowance for credit
losses |
$ |
259,631 |
|
|
$ |
272,049 |
|
$ |
305,406 |
|
$ |
276,990 |
|
$ |
251,132 |
|
|
|
|
|
|
|
Total provision for credit
losses |
$ |
(6,000 |
) |
|
$ |
32,000 |
|
$ |
30,000 |
|
$ |
100,000 |
|
$ |
96,000 |
|
|
|
|
|
|
|
Allowance for credit losses on
loans to LHI |
0.99 |
|
% |
1.04 |
% |
1.15 |
% |
1.04 |
% |
0.99 |
% |
Allowance for credit losses on
loans to average LHI |
1.03 |
|
% |
1.01 |
% |
1.14 |
% |
1.03 |
% |
1.02 |
% |
Net charge-offs to average
LHI(1) |
0.11 |
|
% |
1.03 |
% |
0.02 |
% |
1.16 |
% |
0.98 |
% |
Net charge-offs to average LHI
for last twelve months(1) |
0.59 |
|
% |
0.80 |
% |
0.59 |
% |
0.73 |
% |
0.53 |
% |
Total provision for credit
losses to average LHI(1) |
(0.10 |
) |
% |
0.51 |
% |
0.47 |
% |
1.57 |
% |
1.63 |
% |
Total allowance for credit
losses to LHI |
1.06 |
|
% |
1.11 |
% |
1.21 |
% |
1.09 |
% |
1.03 |
% |
- Interim period ratios are annualized.
TEXAS CAPITAL
BANCSHARES, INC. |
|
|
|
|
|
SUMMARY OF
NON-PERFORMING ASSETS AND PAST DUE LOANS |
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
1st Quarter |
|
2021 |
2020 |
2020 |
2020 |
2020 |
|
|
|
|
|
|
Non-performing assets
(NPAs): |
|
|
|
|
|
Non-accrual loans |
$ |
97,730 |
|
$ |
121,989 |
|
$ |
161,946 |
|
$ |
174,031 |
|
$ |
219,165 |
|
Other real estate owned
(OREO) |
— |
|
— |
|
— |
|
— |
|
— |
|
Total LHI NPAs |
$ |
97,730 |
|
$ |
121,989 |
|
$ |
161,946 |
|
$ |
174,031 |
|
$ |
219,165 |
|
|
|
|
|
|
|
Non-accrual loans to LHI |
0.40 |
% |
0.50 |
% |
0.64 |
% |
0.68 |
% |
0.90 |
% |
Total LHI NPAs to LHI plus
OREO |
0.40 |
% |
0.50 |
% |
0.64 |
% |
0.68 |
% |
0.90 |
% |
Total LHI NPAs to earning
assets |
0.25 |
% |
0.33 |
% |
0.43 |
% |
0.49 |
% |
0.63 |
% |
Allowance for credit losses on
loans to non-accrual loans |
2.5x |
2.1x |
1.8x |
1.5x |
1.1x |
|
|
|
|
|
|
LHI past due 90 days and still
accruing(1) |
$ |
6,187 |
|
$ |
12,541 |
|
$ |
15,896 |
|
$ |
21,079 |
|
$ |
21,274 |
|
LHI past due 90 days to
LHI |
0.03 |
% |
0.05 |
% |
0.06 |
% |
0.08 |
% |
0.09 |
% |
LHS non-accrual(2) |
$ |
— |
|
$ |
6,966 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
LHS past due 90 days and still
accruing(3) |
$ |
16,359 |
|
$ |
16,667 |
|
$ |
15,631 |
|
$ |
10,152 |
|
$ |
9,014 |
|
- At March 31, 2021, loans past due 90 days and still
accruing includes premium finance loans of $3.1 million. These
loans are primarily secured by obligations of insurance carriers to
refund premiums on canceled insurance policies. The refund of
premiums from the insurance carriers can take 180 days or longer
from the cancellation date.
- Includes one non-accrual loan previously reported in loans HFI
that was transferred to loans HFS as of December 31, 2020 and
subsequently sold at carrying value.
- Includes loans guaranteed by U.S. government agencies that were
repurchased out of Ginnie Mae securities. Loans are recorded as LHS
and carried at fair value on the balance sheet. Interest on these
past due loans accrues at the debenture rate guaranteed by the U.S.
government. Also includes loans that, pursuant to Ginnie Mae
servicing guidelines, we have the unilateral right, but not
obligation, to repurchase and thus must record as LHS on our
balance sheet regardless of whether the repurchase option has been
exercised.
TEXAS
CAPITAL BANCSHARES, INC. |
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
(dollars in
thousands) |
|
|
|
|
|
|
|
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
1st Quarter |
|
2021 |
2020 |
2020 |
2020 |
2020 |
Interest income |
|
|
|
|
|
Interest and fees on loans |
$ |
215,592 |
|
|
$ |
242,776 |
|
$ |
237,179 |
|
$ |
247,595 |
|
|
$ |
283,625 |
|
|
Investment securities |
9,887 |
|
|
9,594 |
|
3,674 |
|
2,024 |
|
|
2,183 |
|
|
Federal funds sold and securities purchased under resale
agreements |
1 |
|
|
1 |
|
1 |
|
77 |
|
|
614 |
|
|
Interest-bearing deposits in other banks |
2,932 |
|
|
2,792 |
|
2,877 |
|
2,314 |
|
|
19,586 |
|
|
Total interest income |
228,412 |
|
|
255,163 |
|
243,731 |
|
252,010 |
|
|
306,008 |
|
|
Interest expense |
|
|
|
|
|
Deposits |
20,004 |
|
|
23,819 |
|
27,830 |
|
32,294 |
|
|
62,174 |
|
|
Federal funds purchased |
75 |
|
|
110 |
|
128 |
|
176 |
|
|
669 |
|
|
Other borrowings |
2,517 |
|
|
3,407 |
|
3,365 |
|
4,569 |
|
|
9,582 |
|
|
Long-term debt |
5,743 |
|
|
4,817 |
|
4,839 |
|
5,043 |
|
|
5,264 |
|
|
Total interest expense |
28,339 |
|
|
32,153 |
|
36,162 |
|
42,082 |
|
|
77,689 |
|
|
Net interest income |
200,073 |
|
|
223,010 |
|
207,569 |
|
209,928 |
|
|
228,319 |
|
|
Provision for credit losses |
(6,000 |
) |
|
32,000 |
|
30,000 |
|
100,000 |
|
|
96,000 |
|
|
Net interest income after provision for credit
losses |
206,073 |
|
|
191,010 |
|
177,569 |
|
109,928 |
|
|
132,319 |
|
|
Non-interest income |
|
|
|
|
|
Service charges on deposit accounts |
4,716 |
|
|
3,004 |
|
2,864 |
|
2,459 |
|
|
3,293 |
|
|
Wealth management and trust fee income |
2,855 |
|
|
2,681 |
|
2,502 |
|
2,348 |
|
|
2,467 |
|
|
Brokered loan fees |
9,311 |
|
|
12,610 |
|
15,034 |
|
10,764 |
|
|
8,015 |
|
|
Servicing income |
9,009 |
|
|
8,834 |
|
7,329 |
|
6,120 |
|
|
4,746 |
|
|
Swap fees |
526 |
|
|
473 |
|
484 |
|
1,468 |
|
|
2,757 |
|
|
Net gain/(loss) on sale of LHS |
5,572 |
|
|
6,761 |
|
25,242 |
|
39,023 |
|
|
(13,000 |
) |
|
Other |
7,103 |
|
|
8,523 |
|
6,893 |
|
8,320 |
|
|
3,502 |
|
|
Total non-interest income |
39,092 |
|
|
42,886 |
|
60,348 |
|
70,502 |
|
|
11,780 |
|
|
Non-interest expense |
|
|
|
|
|
Salaries and employee benefits |
87,522 |
|
|
78,449 |
|
84,096 |
|
100,791 |
|
|
77,193 |
|
|
Net occupancy expense |
8,274 |
|
|
8,373 |
|
8,736 |
|
9,134 |
|
|
8,712 |
|
|
Marketing |
1,697 |
|
|
3,435 |
|
3,636 |
|
7,988 |
|
|
8,522 |
|
|
Legal and professional |
8,277 |
|
|
12,129 |
|
11,207 |
|
11,330 |
|
|
17,466 |
|
|
Communications and technology |
15,969 |
|
|
15,405 |
|
31,098 |
|
42,760 |
|
|
13,791 |
|
|
FDIC insurance assessment |
6,613 |
|
|
6,592 |
|
6,374 |
|
7,140 |
|
|
5,849 |
|
|
Servicing-related expenses |
12,989 |
|
|
15,867 |
|
12,287 |
|
20,117 |
|
|
16,354 |
|
|
Merger-related expenses |
— |
|
|
— |
|
— |
|
10,486 |
|
|
7,270 |
|
|
Other |
8,975 |
|
|
10,636 |
|
8,307 |
|
12,606 |
|
|
10,260 |
|
|
Total non-interest expense |
150,316 |
|
|
150,886 |
|
165,741 |
|
222,352 |
|
|
165,417 |
|
|
Income/(loss) before income taxes |
94,849 |
|
|
83,010 |
|
72,176 |
|
(41,922 |
) |
|
(21,318 |
) |
|
Income tax expense/(benefit) |
22,911 |
|
|
22,834 |
|
15,060 |
|
(7,606 |
) |
|
(4,631 |
) |
|
Net income/(loss) |
71,938 |
|
|
60,176 |
|
57,116 |
|
(34,316 |
) |
|
(16,687 |
) |
|
Preferred stock dividends |
3,779 |
|
|
2,437 |
|
2,438 |
|
2,437 |
|
|
2,438 |
|
|
Net income/(loss) available to common
shareholders |
$ |
68,159 |
|
|
$ |
57,739 |
|
$ |
54,678 |
|
$ |
(36,753 |
) |
|
$ |
(19,125 |
) |
|
TEXAS
CAPITAL BANCSHARES, INC. |
QUARTERLY
FINANCIAL SUMMARY - UNAUDITED |
Consolidated
Daily Average Balances, Average Yields and Rates |
(dollars in
thousands) |
|
1st Quarter 2021 |
|
4th Quarter 2020 |
|
3rd Quarter 2020 |
|
2nd Quarter 2020 |
|
1st Quarter 2020 |
|
AverageBalance |
Revenue/Expense |
Yield/Rate |
|
AverageBalance |
Revenue/Expense |
Yield/Rate |
|
AverageBalance |
Revenue/Expense |
Yield/Rate |
|
AverageBalance |
Revenue/Expense |
Yield/Rate |
|
AverageBalance |
Revenue/Expense |
Yield/Rate |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities - Taxable |
$ |
3,225,786 |
|
$ |
8,112 |
|
1.02 |
% |
|
$ |
2,137,481 |
|
$ |
7,748 |
|
1.44 |
% |
|
$ |
525,149 |
|
$ |
1,905 |
|
1.44 |
% |
|
$ |
38,829 |
|
$ |
185 |
|
1.92 |
% |
|
$ |
42,799 |
|
$ |
274 |
|
2.57 |
% |
Investment securities -
Non-taxable(2) |
196,785 |
|
2,247 |
|
4.63 |
% |
|
200,781 |
|
2,337 |
|
4.63 |
% |
|
190,797 |
|
2,239 |
|
4.67 |
% |
|
195,806 |
|
2,327 |
|
4.78 |
% |
|
195,578 |
|
2,417 |
|
4.97 |
% |
Federal funds sold and
securities purchased under resale agreements |
4,605 |
|
1 |
|
0.07 |
% |
|
1,709 |
|
1 |
|
0.13 |
% |
|
12,051 |
|
1 |
|
0.04 |
% |
|
245,434 |
|
77 |
|
0.13 |
% |
|
199,727 |
|
614 |
|
1.24 |
% |
Interest-bearing deposits in
other banks |
11,840,942 |
|
2,932 |
|
0.10 |
% |
|
10,808,548 |
|
2,792 |
|
0.10 |
% |
|
11,028,962 |
|
2,877 |
|
0.10 |
% |
|
10,521,240 |
|
2,314 |
|
0.09 |
% |
|
6,225,948 |
|
19,586 |
|
1.27 |
% |
LHS, at fair value |
243,326 |
|
1,595 |
|
2.66 |
% |
|
410,637 |
|
2,475 |
|
2.40 |
% |
|
543,606 |
|
3,867 |
|
2.83 |
% |
|
380,624 |
|
2,547 |
|
2.69 |
% |
|
3,136,381 |
|
27,480 |
|
3.52 |
% |
LHI, mortgage finance
loans |
8,177,759 |
|
64,942 |
|
3.22 |
% |
|
9,550,119 |
|
78,906 |
|
3.29 |
% |
|
9,061,984 |
|
76,464 |
|
3.36 |
% |
|
8,676,521 |
|
74,518 |
|
3.45 |
% |
|
7,054,682 |
|
55,324 |
|
3.15 |
% |
LHI(1)(2) |
15,457,888 |
|
149,196 |
|
3.91 |
% |
|
15,620,410 |
|
161,750 |
|
4.12 |
% |
|
16,286,036 |
|
157,230 |
|
3.84 |
% |
|
17,015,041 |
|
170,970 |
|
4.04 |
% |
|
16,598,775 |
|
201,781 |
|
4.89 |
% |
Less allowance for credit losses on loans |
254,697 |
|
— |
|
— |
|
|
290,189 |
|
— |
|
— |
|
|
264,769 |
|
— |
|
— |
|
|
236,823 |
|
— |
|
— |
|
|
201,837 |
|
— |
|
— |
|
LHI, net of allowance |
23,380,950 |
|
214,138 |
|
3.71 |
% |
|
24,880,340 |
|
240,656 |
|
3.85 |
% |
|
25,083,251 |
|
233,694 |
|
3.71 |
% |
|
25,454,739 |
|
245,488 |
|
3.88 |
% |
|
23,451,620 |
|
257,105 |
|
4.41 |
% |
Total earning assets |
38,892,394 |
|
229,025 |
|
2.39 |
% |
|
38,439,496 |
|
256,009 |
|
2.65 |
% |
|
37,383,816 |
|
244,583 |
|
2.60 |
% |
|
36,836,672 |
|
252,938 |
|
2.76 |
% |
|
33,252,053 |
|
307,476 |
|
3.72 |
% |
Cash and other assets |
1,064,679 |
|
|
|
|
1,031,195 |
|
|
|
|
1,037,760 |
|
|
|
|
1,075,864 |
|
|
|
|
976,520 |
|
|
|
Total assets |
$ |
39,957,073 |
|
|
|
|
$ |
39,470,691 |
|
|
|
|
$ |
38,421,576 |
|
|
|
|
$ |
37,912,536 |
|
|
|
|
$ |
34,228,573 |
|
|
|
Liabilities and Stockholders’
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction deposits |
$ |
3,991,966 |
|
$ |
5,861 |
|
0.60 |
% |
|
$ |
4,384,493 |
|
$ |
6,604 |
|
0.60 |
% |
|
$ |
4,275,574 |
|
$ |
6,652 |
|
0.62 |
% |
|
$ |
3,923,966 |
|
$ |
5,998 |
|
0.61 |
% |
|
$ |
3,773,067 |
|
$ |
13,582 |
|
1.45 |
% |
Savings deposits |
12,889,974 |
|
10,788 |
|
0.34 |
% |
|
12,982,189 |
|
12,671 |
|
0.39 |
% |
|
12,786,719 |
|
12,808 |
|
0.40 |
% |
|
12,537,467 |
|
13,510 |
|
0.43 |
% |
|
11,069,429 |
|
35,961 |
|
1.31 |
% |
Time deposits |
2,204,242 |
|
3,355 |
|
0.62 |
% |
|
2,355,199 |
|
4,544 |
|
0.77 |
% |
|
2,844,083 |
|
8,370 |
|
1.17 |
% |
|
3,434,388 |
|
12,786 |
|
1.50 |
% |
|
2,842,535 |
|
12,631 |
|
1.79 |
% |
Total interest bearing
deposits |
19,086,182 |
|
20,004 |
|
0.43 |
% |
|
19,721,881 |
|
23,819 |
|
0.48 |
% |
|
19,906,376 |
|
27,830 |
|
0.56 |
% |
|
19,895,821 |
|
32,294 |
|
0.65 |
% |
|
17,685,031 |
|
62,174 |
|
1.41 |
% |
Other borrowings |
2,686,398 |
|
2,592 |
|
0.39 |
% |
|
3,022,077 |
|
3,517 |
|
0.46 |
% |
|
2,811,435 |
|
3,493 |
|
0.49 |
% |
|
3,612,263 |
|
4,745 |
|
0.53 |
% |
|
3,020,255 |
|
10,251 |
|
1.37 |
% |
Long-term debt |
464,731 |
|
5,743 |
|
5.01 |
% |
|
395,841 |
|
4,817 |
|
4.84 |
% |
|
395,749 |
|
4,839 |
|
4.87 |
% |
|
395,658 |
|
5,043 |
|
5.13 |
% |
|
395,571 |
|
5,264 |
|
5.35 |
% |
Total interest bearing
liabilities |
22,237,311 |
|
28,339 |
|
0.52 |
% |
|
23,139,799 |
|
32,153 |
|
0.55 |
% |
|
23,113,560 |
|
36,162 |
|
0.62 |
% |
|
23,903,742 |
|
42,082 |
|
0.71 |
% |
|
21,100,857 |
|
77,689 |
|
1.48 |
% |
Demand deposits |
14,421,505 |
|
|
|
|
13,174,114 |
|
|
|
|
12,202,065 |
|
|
|
|
10,865,896 |
|
|
|
|
10,003,495 |
|
|
|
Other liabilities |
309,644 |
|
|
|
|
303,480 |
|
|
|
|
314,500 |
|
|
|
|
293,698 |
|
|
|
|
270,868 |
|
|
|
Stockholders’ equity |
2,988,613 |
|
|
|
|
2,853,298 |
|
|
|
|
2,791,451 |
|
|
|
|
2,849,200 |
|
|
|
|
2,853,353 |
|
|
|
Total liabilities and
stockholders’ equity |
$ |
39,957,073 |
|
|
|
|
$ |
39,470,691 |
|
|
|
|
$ |
38,421,576 |
|
|
|
|
$ |
37,912,536 |
|
|
|
|
$ |
34,228,573 |
|
|
|
Net interest income(2) |
|
$ |
200,686 |
|
|
|
|
$ |
223,856 |
|
|
|
|
$ |
208,421 |
|
|
|
|
$ |
210,856 |
|
|
|
|
$ |
229,787 |
|
|
Net interest margin |
|
|
2.09 |
% |
|
|
|
2.32 |
% |
|
|
|
2.22 |
% |
|
|
|
2.30 |
% |
|
|
|
2.78 |
% |
(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.
INVESTOR CONTACT
Jamie Britton, 214.932.6721
jamie.britton@texascapitalbank.com
MEDIA CONTACT
Shannon Wherry, 469.399.8527
shannon.wherry@texascapitalbank.com
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