Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company
of Texas Capital Bank, announced operating results for the second
quarter of 2024.
Net income available to common stockholders was
$37.4 million, or $0.80 per diluted share, for the second quarter
of 2024, compared to $21.8 million, or $0.46 per diluted share, for
the first quarter of 2024 and $64.3 million, or $1.33 per diluted
share, for the second quarter of 2023.
“Building a platform resilient to market and
rate cycles is a foundational tenant of our strategic plan,” said
Rob C. Holmes, President and CEO. “We continue to deliver
differentiated solutions for clients across our markets and areas
of industry focus at a pace that exceeds observed market behavior.
We remain focused on realizing the clear strategic value of our
platform through enhanced financial performance.”
FINANCIAL
RESULTS |
|
|
|
|
|
(dollars and shares in
thousands) |
|
|
|
|
|
|
2nd Quarter |
|
1st Quarter |
|
2nd Quarter |
|
2024 |
|
2024 |
|
2023 |
OPERATING
RESULTS |
|
|
|
|
|
Net income |
$ |
41,662 |
|
|
$ |
26,142 |
|
|
$ |
68,651 |
|
Net income available to common stockholders |
$ |
37,350 |
|
|
$ |
21,829 |
|
|
$ |
64,339 |
|
Diluted earnings per common share |
$ |
0.80 |
|
|
$ |
0.46 |
|
|
$ |
1.33 |
|
Diluted common shares |
|
46,872 |
|
|
|
47,711 |
|
|
|
48,421 |
|
Return on average assets |
|
0.56 |
% |
|
|
0.36 |
% |
|
|
0.95 |
% |
Return on average common equity |
|
5.26 |
% |
|
|
3.03 |
% |
|
|
9.17 |
% |
|
|
|
|
|
|
BALANCE
SHEET |
|
|
|
|
|
Loans held for investment |
$ |
16,700,569 |
|
|
$ |
16,677,691 |
|
|
$ |
16,227,203 |
|
Loans held for investment, mortgage finance |
|
5,078,161 |
|
|
|
4,153,313 |
|
|
|
5,098,812 |
|
Total loans held for investment |
|
21,778,730 |
|
|
|
20,831,004 |
|
|
|
21,326,015 |
|
Loans held for sale |
|
36,785 |
|
|
|
37,750 |
|
|
|
29,097 |
|
Total assets |
|
29,854,994 |
|
|
|
29,180,585 |
|
|
|
28,976,544 |
|
Non-interest bearing deposits |
|
7,987,715 |
|
|
|
8,478,215 |
|
|
|
9,429,352 |
|
Total deposits |
|
23,818,327 |
|
|
|
23,954,037 |
|
|
|
23,318,240 |
|
Stockholders’ equity |
|
3,175,601 |
|
|
|
3,170,662 |
|
|
|
3,081,927 |
|
|
|
|
|
|
|
(1)
Stockholders’ equity excluding preferred stock, less goodwill and
intangibles, divided by shares outstanding at period end. |
SECOND QUARTER
2024 COMPARED TO
FIRST QUARTER
2024
For the second quarter of 2024, net income
available to common stockholders was $37.4 million, or $0.80 per
diluted share, compared to $21.8 million, or $0.46 per diluted
share, for the first quarter of 2024.
Provision for credit losses for the second
quarter of 2024 was $20.0 million, compared to $19.0 million for
the first quarter of 2024. The $20.0 million provision for credit
losses recorded in the second quarter of 2024 resulted primarily
from growth in total loans held for investment (“LHI”) and $12.0
million in net charge-offs.
Net interest income was $216.6 million for the
second quarter of 2024, compared to $215.0 million for the first
quarter of 2024, as an increase in average earning assets and a
decline in funding costs was partially offset by an increase in
average interest bearing deposits. Net interest margin for the
second quarter of 2024 was 3.01%, a decrease of 2 basis points from
the first quarter of 2024. LHI, excluding mortgage finance, yields
decreased 1 basis point from the first quarter of 2024 and LHI,
mortgage finance, yields increased 34 basis points from the first
quarter of 2024. Total cost of deposits was 2.99% for the second
quarter of 2024, a 2 basis point increase from the first quarter of
2024.
Non-interest income for the second quarter of
2024 increased $9.1 million, or 22%, compared to the first quarter
of 2024, primarily due to increases in investment banking and
advisory fees and other non-interest income.
Non-interest expense for the second quarter of
2024 decreased $14.0 million, or 7%, compared to the first quarter
of 2024, primarily due to a $9.9 million decrease in salaries and
benefits, related to the effect of seasonal payroll expenses that
peak in the first quarter, as well as decreases in legal and
professional expense and Federal Deposit Insurance Corporation
(“FDIC”) insurance assessment expense, partially offset by an
increase in other non-interest expense. The second quarter of 2024
included $460,000 in FDIC special assessment expense, as compared
to $3.0 million in the first quarter of 2024. Legal and
professional expense in the first quarter of 2024 included a $5.0
million legal settlement expense.
SECOND QUARTER
2024 COMPARED TO
SECOND QUARTER
2023
Net income available to common stockholders was
$37.4 million, or $0.80 per diluted share, for the second quarter
of 2024, compared to $64.3 million, or $1.33 per diluted share, for
the second quarter of 2023.
The second quarter of 2024 included a $20.0
million provision for credit losses, reflecting growth in total LHI
and $12.0 million in net charge-offs, compared to a $7.0 million
provision for the second quarter of 2023.
Net interest income decreased to $216.6 million
for the second quarter of 2024, compared to $232.0 million for the
second quarter of 2023, primarily due to increases in funding costs
and average interest bearing deposits, partially offset by
increases in yields on average earning assets and average LHI,
excluding mortgage finance. Net interest margin decreased 28 basis
points to 3.01% for the second quarter of 2024 compared to the
second quarter of 2023. LHI, excluding mortgage finance, yields
increased 25 basis points compared to the second quarter of 2023
and LHI, mortgage finance yields decreased 59 basis points from the
second quarter of 2023. Total cost of deposits increased 62 basis
points compared to the second quarter of 2023.
Non-interest income for the second quarter of
2024 increased $4.4 million, or 10%, compared to the second quarter
of 2023. The increase was primarily due to an increase in
investment banking and advisory fees, partially offset by a
decrease in trading income.
Non-interest expense for the second quarter of
2024 increased $6.8 million, or 4%, compared to the second quarter
of 2023, primarily due to increases in salaries and benefits,
occupancy expense, communications and technology expense, FDIC
insurance assessment expense and other non-interest expense,
partially offset by a decrease in legal and professional
expense.
CREDIT QUALITY
Net charge-offs of $12.0 million were recorded
during the second quarter of 2024, compared to net charge-offs of
$10.8 million and $8.2 million during the first quarter of 2024 and
the second quarter of 2023, respectively. Criticized loans totaled
$859.7 million at June 30, 2024, compared to $859.5 million at
March 31, 2024 and $619.4 million at June 30, 2023.
Non-accrual LHI totaled $85.0 million at June 30, 2024,
compared to $92.8 million at March 31, 2024 and $81.0 million at
June 30, 2023. The ratio of non-accrual LHI to total LHI for
the second quarter of 2024 was 0.39%, compared to 0.45% for the
first quarter of 2024 and 0.38% for the second quarter of 2023. The
ratio of total allowance for credit losses to total LHI was 1.44%
at June 30, 2024, compared to 1.46% and 1.32% at March 31,
2024 and June 30, 2023, respectively.
REGULATORY RATIOS AND
CAPITAL
All regulatory ratios continue to be in excess
of “well capitalized” requirements as of June 30, 2024. CET1,
tier 1 capital, total capital and leverage ratios were 11.6%,
13.1%, 15.7% and 12.2%, respectively, at June 30, 2024,
compared to 12.4%, 13.9%, 16.6% and 12.4%, respectively, at March
31, 2024 and 12.2%, 13.7%, 16.4% and 12.4%, respectively, at
June 30, 2023. The second quarter 2024 decline in regulatory
ratios resulted primarily from the redemption in full of the
bank-issued senior unsecured credit-linked notes of $275.0 million
in the second quarter of 2024. At June 30, 2024, our ratio of
tangible common equity to total tangible assets was 9.6%, compared
to 9.8% at March 31, 2024 and 9.6% at June 30, 2023.
During the second quarter of 2024, the Company
repurchased 852,098 shares of its common stock for an aggregate
purchase price, including excise tax expense, of $50.0 million, at
a weighted average price of $58.14 per share.
About Texas Capital Bancshares,
Inc.
Texas Capital Bancshares, Inc. (NASDAQ: TCBI), a
member of the Russell 2000® Index and the S&P MidCap 400®, the
parent company of Texas Capital Bank d/b/a Texas Capital, is a
full-service financial services firm that delivers customized
solutions to businesses, entrepreneurs and individual customers.
Founded in 1998, the institution is headquartered in Dallas with
offices in Austin, Houston, San Antonio, and Fort Worth, and has
built a network of clients across the country. With the ability to
service clients through their entire lifecycles, Texas Capital has
established commercial banking, consumer banking, investment
banking and wealth management capabilities.
Forward Looking Statements
This communication contains “forward-looking
statements” within the meaning of and pursuant to the Private
Securities Litigation Reform Act of 1995 regarding, among other
things, TCBI’s financial condition, results of operations, business
plans and future performance. These statements are not historical
in nature and may often be identified by the use of words such as
“believes,” “projects,” “expects,” “may,” “estimates,” “should,”
“plans,” “targets,” “intends” “could,” “would,” “anticipates,”
“potential,” “confident,” “optimistic” or the negative thereof, or
other variations thereon, or comparable terminology, or by
discussions of strategy, objectives, estimates, trends, guidance,
expectations and future plans.
Because forward-looking statements relate to
future results and occurrences, they are subject to inherent and
various uncertainties, risks, and changes in circumstances that are
difficult to predict, may change over time, are based on
management’s expectations and assumptions at the time the
statements are made and are not guarantees of future results.
Numerous risks and other factors, many of which are beyond
management’s control, could cause actual results to differ
materially from future results expressed or implied by such
forward-looking statements. While there can be no assurance that
any list of risks is complete, important risks and other factors
that could cause actual results to differ materially from those
contemplated by forward-looking statements include, but are not
limited to: economic or business conditions in Texas, the United
States or globally that impact TCBI or its customers; negative
credit quality developments arising from the foregoing or other
factors; TCBI’s ability to effectively manage its liquidity and
maintain adequate regulatory capital to support its businesses;
TCBI’s ability to pursue and execute upon growth plans, whether as
a function of capital, liquidity or other limitations; TCBI’s
ability to successfully execute its business strategy, including
developing and executing new lines of business and new products and
services; the extensive regulations to which TCBI is subject and
its ability to comply with applicable governmental regulations,
including legislative and regulatory changes; TCBI’s ability to
effectively manage information technology systems, including third
party vendors, cyber or data privacy incidents or other failures,
disruptions or security breaches; elevated or further changes in
interest rates, including the impact of interest rates on TCBI’s
securities portfolio and funding costs, as well as related balance
sheet implications stemming from the fair value of our assets and
liabilities; the effectiveness of TCBI’s risk management processes
strategies and monitoring; fluctuations in commercial and
residential real estate values, especially as they relate to the
value of collateral supporting TCBI’s loans; the failure to
identify, attract and retain key personnel and other employees;
increased or expanded competition from banks and other financial
service providers in TCBI’s markets; adverse developments in the
banking industry and the potential impact of such developments on
customer confidence, liquidity and regulatory responses to these
developments, including in the context of regulatory examinations
and related findings and actions; negative press and social media
attention with respect to the banking industry or TCBI, in
particular; claims, litigation or regulatory investigations and
actions that TCBI may become subject to; severe weather, natural
disasters, climate change, acts of war, terrorism, global conflict
(including those already reported by the media, as well as others
that may arise), or other external events, as well as related
legislative and regulatory initiatives; and the risks and factors
more fully described in TCBI’s most recent Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and other documents and
filings with the SEC. 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) |
|
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
|
2024 |
2024 |
2023 |
2023 |
2023 |
CONSOLIDATED
STATEMENTS OF INCOME |
|
|
|
|
|
Interest income |
$ |
422,068 |
|
$ |
417,378 |
|
$ |
417,072 |
|
$ |
425,769 |
|
$ |
401,916 |
|
Interest expense |
|
205,486 |
|
|
202,369 |
|
|
202,355 |
|
|
193,698 |
|
|
169,926 |
|
Net interest income |
|
216,582 |
|
|
215,009 |
|
|
214,717 |
|
|
232,071 |
|
|
231,990 |
|
Provision for credit losses |
|
20,000 |
|
|
19,000 |
|
|
19,000 |
|
|
18,000 |
|
|
7,000 |
|
Net interest income after
provision for credit losses |
|
196,582 |
|
|
196,009 |
|
|
195,717 |
|
|
214,071 |
|
|
224,990 |
|
Non-interest income |
|
50,424 |
|
|
41,319 |
|
|
31,133 |
|
|
46,872 |
|
|
46,011 |
|
Non-interest expense |
|
188,409 |
|
|
202,393 |
|
|
201,385 |
|
|
179,891 |
|
|
181,644 |
|
Income before income
taxes |
|
58,597 |
|
|
34,935 |
|
|
25,465 |
|
|
81,052 |
|
|
89,357 |
|
Income tax expense |
|
16,935 |
|
|
8,793 |
|
|
5,315 |
|
|
19,373 |
|
|
20,706 |
|
Net income |
|
41,662 |
|
|
26,142 |
|
|
20,150 |
|
|
61,679 |
|
|
68,651 |
|
Preferred stock dividends |
|
4,312 |
|
|
4,313 |
|
|
4,312 |
|
|
4,313 |
|
|
4,312 |
|
Net income available to common stockholders |
$ |
37,350 |
|
$ |
21,829 |
|
$ |
15,838 |
|
$ |
57,366 |
|
$ |
64,339 |
|
Diluted earnings per common share |
$ |
0.80 |
|
$ |
0.46 |
|
$ |
0.33 |
|
$ |
1.18 |
|
$ |
1.33 |
|
Diluted common shares |
|
46,872,498 |
|
|
47,711,192 |
|
|
48,097,517 |
|
|
48,528,698 |
|
|
48,421,276 |
|
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEET DATA |
|
|
|
|
|
Total assets |
$ |
29,854,994 |
|
$ |
29,180,585 |
|
$ |
28,356,266 |
|
$ |
29,628,249 |
|
$ |
28,976,544 |
|
Loans held for investment |
|
16,700,569 |
|
|
16,677,691 |
|
|
16,362,230 |
|
|
16,183,882 |
|
|
16,227,203 |
|
Loans held for investment, mortgage finance |
|
5,078,161 |
|
|
4,153,313 |
|
|
3,978,328 |
|
|
4,429,489 |
|
|
5,098,812 |
|
Loans held for sale |
|
36,785 |
|
|
37,750 |
|
|
44,105 |
|
|
155,073 |
|
|
29,097 |
|
Interest bearing cash and cash equivalents |
|
2,691,352 |
|
|
3,148,157 |
|
|
3,042,357 |
|
|
3,975,860 |
|
|
2,587,131 |
|
Investment securities |
|
4,388,976 |
|
|
4,414,280 |
|
|
4,143,194 |
|
|
4,069,717 |
|
|
4,226,653 |
|
Non-interest bearing deposits |
|
7,987,715 |
|
|
8,478,215 |
|
|
7,328,276 |
|
|
9,352,883 |
|
|
9,429,352 |
|
Total deposits |
|
23,818,327 |
|
|
23,954,037 |
|
|
22,371,839 |
|
|
23,878,978 |
|
|
23,318,240 |
|
Short-term borrowings |
|
1,675,000 |
|
|
750,000 |
|
|
1,500,000 |
|
|
1,400,000 |
|
|
1,350,000 |
|
Long-term debt |
|
659,997 |
|
|
859,823 |
|
|
859,147 |
|
|
858,471 |
|
|
857,795 |
|
Stockholders’ equity |
|
3,175,601 |
|
|
3,170,662 |
|
|
3,199,142 |
|
|
3,077,700 |
|
|
3,081,927 |
|
|
|
|
|
|
|
End of period shares outstanding |
|
46,188,078 |
|
|
46,986,275 |
|
|
47,237,912 |
|
|
48,015,003 |
|
|
47,992,521 |
|
Book value per share |
$ |
62.26 |
|
$ |
61.10 |
|
$ |
61.37 |
|
$ |
57.85 |
|
$ |
57.97 |
|
Tangible book value per
share(1) |
$ |
62.23 |
|
$ |
61.06 |
|
$ |
61.34 |
|
$ |
57.82 |
|
$ |
57.93 |
|
|
|
|
|
|
|
SELECTED FINANCIAL RATIOS |
|
|
|
|
|
Net interest margin |
|
3.01 |
% |
|
3.03 |
% |
|
2.93 |
% |
|
3.13 |
% |
|
3.29 |
% |
Return on average assets |
|
0.56 |
% |
|
0.36 |
% |
|
0.27 |
% |
|
0.81 |
% |
|
0.95 |
% |
Return on average common equity |
|
5.26 |
% |
|
3.03 |
% |
|
2.25 |
% |
|
8.08 |
% |
|
9.17 |
% |
Non-interest income to average earning assets |
|
0.71 |
% |
|
0.59 |
% |
|
0.43 |
% |
|
0.64 |
% |
|
0.66 |
% |
Efficiency ratio(2) |
|
70.6 |
% |
|
79.0 |
% |
|
81.9 |
% |
|
64.5 |
% |
|
65.3 |
% |
Non-interest expense to average earning assets |
|
2.65 |
% |
|
2.89 |
% |
|
2.79 |
% |
|
2.46 |
% |
|
2.61 |
% |
Common equity to total
assets |
|
9.6 |
% |
|
9.8 |
% |
|
10.2 |
% |
|
9.4 |
% |
|
9.6 |
% |
Tangible common equity to
total tangible assets(3) |
|
9.6 |
% |
|
9.8 |
% |
|
10.2 |
% |
|
9.4 |
% |
|
9.6 |
% |
Common Equity Tier 1 |
|
11.6 |
% |
|
12.4 |
% |
|
12.6 |
% |
|
12.7 |
% |
|
12.2 |
% |
Tier 1 capital |
|
13.1 |
% |
|
13.9 |
% |
|
14.2 |
% |
|
14.3 |
% |
|
13.7 |
% |
Total capital |
|
15.7 |
% |
|
16.6 |
% |
|
17.1 |
% |
|
17.1 |
% |
|
16.4 |
% |
Leverage |
|
12.2 |
% |
|
12.4 |
% |
|
12.2 |
% |
|
12.1 |
% |
|
12.4 |
% |
|
(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, less goodwill and intangibles,
divided by total assets, less goodwill and intangibles. |
|
TEXAS
CAPITAL BANCSHARES, INC. |
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
(dollars in
thousands) |
|
June 30, 2024 |
June 30, 2023 |
% Change |
Assets |
|
|
|
Cash and due from banks |
$ |
221,727 |
|
$ |
260,314 |
|
(15 |
)% |
Interest bearing cash and cash equivalents |
|
2,691,352 |
|
|
2,587,131 |
|
4 |
% |
Available-for-sale debt
securities |
|
3,483,231 |
|
|
3,292,478 |
|
6 |
% |
Held-to-maturity debt
securities |
|
831,513 |
|
|
900,315 |
|
(8 |
)% |
Equity securities |
|
74,232 |
|
|
33,860 |
|
119 |
% |
Investment securities |
|
4,388,976 |
|
|
4,226,653 |
|
4 |
% |
Loans held for sale |
|
36,785 |
|
|
29,097 |
|
26 |
% |
Loans held for investment,
mortgage finance |
|
5,078,161 |
|
|
5,098,812 |
|
— |
% |
Loans held for investment |
|
16,700,569 |
|
|
16,227,203 |
|
3 |
% |
Less: Allowance for credit
losses on loans |
|
267,297 |
|
|
237,343 |
|
13 |
% |
Loans held for investment, net |
|
21,511,433 |
|
|
21,088,672 |
|
2 |
% |
Premises and equipment,
net |
|
69,464 |
|
|
26,096 |
|
166 |
% |
Accrued interest receivable
and other assets |
|
933,761 |
|
|
757,085 |
|
23 |
% |
Goodwill and intangibles,
net |
|
1,496 |
|
|
1,496 |
|
— |
% |
Total
assets |
$ |
29,854,994 |
|
$ |
28,976,544 |
|
3 |
% |
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
Liabilities: |
|
|
|
Non-interest bearing
deposits |
$ |
7,987,715 |
|
$ |
9,429,352 |
|
(15 |
)% |
Interest bearing deposits |
|
15,830,612 |
|
|
13,888,888 |
|
14 |
% |
Total deposits |
|
23,818,327 |
|
|
23,318,240 |
|
2 |
% |
Accrued interest payable |
|
23,841 |
|
|
29,658 |
|
(20 |
)% |
Other liabilities |
|
502,228 |
|
|
338,924 |
|
48 |
% |
Short-term borrowings |
|
1,675,000 |
|
|
1,350,000 |
|
24 |
% |
Long-term debt |
|
659,997 |
|
|
857,795 |
|
(23 |
)% |
Total
liabilities |
|
26,679,393 |
|
|
25,894,617 |
|
3 |
% |
|
|
|
|
Stockholders’
equity: |
|
|
|
Preferred stock, $.01 par
value, $1,000 liquidation value: |
|
|
|
Authorized shares - 10,000,000 |
|
|
|
Issued shares - 300,000 shares issued at June 30, 2024 and
2023 |
|
300,000 |
|
|
300,000 |
|
— |
% |
Common stock, $.01 par value: |
|
|
|
Authorized shares - 100,000,000 |
|
|
|
Issued shares - 51,474,581 and
51,087,965 at June 30, 2024 and 2023, respectively |
|
515 |
|
|
511 |
|
1 |
% |
Additional paid-in capital |
|
1,050,114 |
|
|
1,035,063 |
|
1 |
% |
Retained earnings |
|
2,494,572 |
|
|
2,362,189 |
|
6 |
% |
Treasury stock - 5,286,503 and
3,095,444 shares at cost at June 30, 2024 and 2023,
respectively |
|
(301,868 |
) |
|
(175,528 |
) |
72 |
% |
Accumulated other comprehensive loss, net of taxes |
|
(367,732 |
) |
|
(440,308 |
) |
(16 |
)% |
Total stockholders’
equity |
|
3,175,601 |
|
|
3,081,927 |
|
3 |
% |
Total liabilities and
stockholders’ equity |
$ |
29,854,994 |
|
$ |
28,976,544 |
|
3 |
% |
|
TEXAS CAPITAL
BANCSHARES, INC. |
|
|
|
|
CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED) |
|
|
|
|
(dollars in thousands except
per share data) |
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Interest
income |
|
|
|
|
Interest and fees on
loans |
$ |
345,251 |
$ |
332,867 |
$ |
676,130 |
$ |
630,305 |
Investment securities |
|
33,584 |
|
27,478 |
|
65,728 |
|
52,770 |
Interest bearing cash and cash
equivalents |
|
43,233 |
|
41,571 |
|
97,588 |
|
104,007 |
Total interest income |
|
422,068 |
|
401,916 |
|
839,446 |
|
787,082 |
Interest
expense |
|
|
|
|
Deposits |
|
181,280 |
|
137,391 |
|
356,880 |
|
257,485 |
Short-term borrowings |
|
12,749 |
|
18,253 |
|
25,532 |
|
32,997 |
Long-term debt |
|
11,457 |
|
14,282 |
|
25,443 |
|
29,265 |
Total interest expense |
|
205,486 |
|
169,926 |
|
407,855 |
|
319,747 |
Net interest
income |
|
216,582 |
|
231,990 |
|
431,591 |
|
467,335 |
Provision for credit
losses |
|
20,000 |
|
7,000 |
|
39,000 |
|
35,000 |
Net interest income
after provision for credit losses |
|
196,582 |
|
224,990 |
|
392,591 |
|
432,335 |
Non-interest
income |
|
|
|
|
Service charges on deposit
accounts |
|
5,911 |
|
5,158 |
|
12,250 |
|
10,180 |
Wealth management and trust
fee income |
|
3,699 |
|
3,715 |
|
7,266 |
|
7,144 |
Brokered loan fees |
|
2,131 |
|
2,415 |
|
4,042 |
|
4,310 |
Investment banking and
advisory fees |
|
25,048 |
|
19,101 |
|
43,472 |
|
33,665 |
Trading income |
|
5,650 |
|
8,397 |
|
10,362 |
|
12,601 |
Other |
|
7,985 |
|
7,225 |
|
14,351 |
|
15,514 |
Total non-interest income |
|
50,424 |
|
46,011 |
|
91,743 |
|
83,414 |
Non-interest
expense |
|
|
|
|
Salaries and benefits |
|
118,840 |
|
113,050 |
|
247,567 |
|
241,720 |
Occupancy expense |
|
10,666 |
|
9,482 |
|
20,403 |
|
19,101 |
Marketing |
|
5,996 |
|
6,367 |
|
12,032 |
|
15,411 |
Legal and professional |
|
11,273 |
|
15,669 |
|
27,468 |
|
30,183 |
Communications and
technology |
|
22,013 |
|
20,525 |
|
43,127 |
|
38,048 |
Federal Deposit Insurance
Corporation insurance assessment |
|
5,570 |
|
3,693 |
|
13,991 |
|
5,863 |
Other |
|
14,051 |
|
12,858 |
|
26,214 |
|
25,345 |
Total non-interest expense |
|
188,409 |
|
181,644 |
|
390,802 |
|
375,671 |
Income before income
taxes |
|
58,597 |
|
89,357 |
|
93,532 |
|
140,078 |
Income tax expense |
|
16,935 |
|
20,706 |
|
25,728 |
|
32,766 |
Net
income |
|
41,662 |
|
68,651 |
|
67,804 |
|
107,312 |
Preferred stock
dividends |
|
4,312 |
|
4,312 |
|
8,625 |
|
8,625 |
Net income available
to common stockholders |
$ |
37,350 |
$ |
64,339 |
$ |
59,179 |
$ |
98,687 |
|
|
|
|
|
Basic earnings per
common share |
$ |
0.80 |
$ |
1.34 |
$ |
1.26 |
$ |
2.05 |
Diluted earnings per
common share |
$ |
0.80 |
$ |
1.33 |
$ |
1.25 |
$ |
2.02 |
|
TEXAS
CAPITAL BANCSHARES, INC. |
SUMMARY
OF CREDIT LOSS EXPERIENCE |
(dollars in
thousands) |
|
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
|
2024 |
2024 |
2023 |
2023 |
2023 |
Allowance for credit
losses on loans: |
|
|
|
|
|
Beginning balance |
$ |
263,962 |
|
$ |
249,973 |
|
$ |
244,902 |
|
$ |
237,343 |
|
$ |
260,928 |
|
Loans charged-off: |
|
|
|
|
|
Commercial |
|
9,997 |
|
|
7,544 |
|
|
8,356 |
|
|
13,246 |
|
|
8,852 |
|
Commercial real estate |
|
2,111 |
|
|
3,325 |
|
|
5,500 |
|
|
— |
|
|
— |
|
Consumer |
|
— |
|
|
— |
|
|
— |
|
|
41 |
|
|
— |
|
Total charge-offs |
|
12,108 |
|
|
10,869 |
|
|
13,856 |
|
|
13,287 |
|
|
8,852 |
|
Recoveries: |
|
|
|
|
|
Commercial |
|
153 |
|
|
105 |
|
|
15 |
|
|
4,346 |
|
|
611 |
|
Commercial real estate |
|
— |
|
|
— |
|
|
4 |
|
|
— |
|
|
— |
|
Consumer |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2 |
|
Total recoveries |
|
153 |
|
|
105 |
|
|
19 |
|
|
4,346 |
|
|
613 |
|
Net charge-offs |
|
11,955 |
|
|
10,764 |
|
|
13,837 |
|
|
8,941 |
|
|
8,239 |
|
Provision for credit losses on
loans |
|
15,290 |
|
|
24,753 |
|
|
18,908 |
|
|
16,500 |
|
|
(15,346 |
) |
Ending balance |
$ |
267,297 |
|
$ |
263,962 |
|
$ |
249,973 |
|
$ |
244,902 |
|
$ |
237,343 |
|
|
|
|
|
|
|
Allowance for
off-balance sheet credit losses: |
|
|
|
|
|
Beginning balance |
$ |
40,609 |
|
$ |
46,362 |
|
$ |
46,270 |
|
$ |
44,770 |
|
$ |
22,424 |
|
Provision for off-balance
sheet credit losses |
|
4,710 |
|
|
(5,753 |
) |
|
92 |
|
|
1,500 |
|
|
22,346 |
|
Ending balance |
$ |
45,319 |
|
$ |
40,609 |
|
$ |
46,362 |
|
$ |
46,270 |
|
$ |
44,770 |
|
|
|
|
|
|
|
Total allowance for credit
losses |
$ |
312,616 |
|
$ |
304,571 |
|
$ |
296,335 |
|
$ |
291,172 |
|
$ |
282,113 |
|
Total provision for credit
losses |
$ |
20,000 |
|
$ |
19,000 |
|
$ |
19,000 |
|
$ |
18,000 |
|
$ |
7,000 |
|
|
|
|
|
|
|
Allowance for credit losses on
loans to total loans held for investment |
|
1.23 |
% |
|
1.27 |
% |
|
1.23 |
% |
|
1.19 |
% |
|
1.11 |
% |
Allowance for credit losses on
loans to average total loans held for investment |
|
1.27 |
% |
|
1.32 |
% |
|
1.24 |
% |
|
1.17 |
% |
|
1.15 |
% |
Net charge-offs to average
total loans held for investment(1) |
|
0.23 |
% |
|
0.22 |
% |
|
0.27 |
% |
|
0.17 |
% |
|
0.16 |
% |
Net charge-offs to average
total loans held for investment for last 12 months(1) |
|
0.22 |
% |
|
0.20 |
% |
|
0.25 |
% |
|
0.26 |
% |
|
0.23 |
% |
Total provision for credit
losses to average total loans held for investment(1) |
|
0.38 |
% |
|
0.38 |
% |
|
0.37 |
% |
|
0.34 |
% |
|
0.14 |
% |
Total allowance for credit
losses to total loans held for investment |
|
1.44 |
% |
|
1.46 |
% |
|
1.46 |
% |
|
1.41 |
% |
|
1.32 |
% |
|
(1) Interim
period ratios are annualized. |
|
TEXAS CAPITAL
BANCSHARES, INC. |
|
|
|
|
|
SUMMARY OF
NON-PERFORMING ASSETS AND PAST DUE LOANS |
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
|
2024 |
2024 |
2023 |
2023 |
2023 |
Non-accrual loans held for investment |
$ |
85,021 |
|
$ |
92,849 |
|
$ |
81,398 |
|
$ |
63,129 |
|
$ |
81,039 |
|
Non-accrual loans held for
sale(1) |
|
— |
|
|
9,250 |
|
|
— |
|
|
— |
|
|
— |
|
Other real estate owned |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total non-performing
assets |
$ |
85,021 |
|
$ |
102,099 |
|
$ |
81,398 |
|
$ |
63,129 |
|
$ |
81,039 |
|
|
|
|
|
|
|
Non-accrual loans held for
investment to total loans held for investment |
|
0.39 |
% |
|
0.45 |
% |
|
0.40 |
% |
|
0.31 |
% |
|
0.38 |
% |
Total non-performing assets to
total assets |
|
0.28 |
% |
|
0.35 |
% |
|
0.29 |
% |
|
0.21 |
% |
|
0.28 |
% |
Allowance for credit losses on
loans to non-accrual loans held for investment |
|
3.1 |
x |
|
2.8 |
x |
|
3.1 |
x |
|
3.9 |
x |
|
2.9 |
x |
Total allowance for credit
losses to non-accrual loans held for investment |
|
3.7 |
x |
|
3.3 |
x |
|
3.6 |
x |
|
4.6 |
x |
|
3.5 |
x |
|
|
|
|
|
|
Loans held for investment past
due 90 days and still accruing |
$ |
286 |
|
$ |
3,674 |
|
$ |
19,523 |
|
$ |
4,602 |
|
$ |
64 |
|
Loans held for investment past
due 90 days to total loans held for investment |
|
— |
% |
|
0.02 |
% |
|
0.10 |
% |
|
0.02 |
% |
|
— |
% |
Loans held for sale past due
90 days and still accruing |
$ |
64 |
|
$ |
147 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
(1) First quarter
2024 includes one non-accrual loan previously reported in loans
held for investment that was transferred at fair value to held for
sale as of March 31, 2024. |
|
|
TEXAS
CAPITAL BANCSHARES, INC. |
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
(dollars in
thousands) |
|
|
|
|
|
|
|
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
|
2024 |
2024 |
2023 |
2023 |
2023 |
Interest
income |
|
|
|
|
|
Interest and fees on loans |
$ |
345,251 |
$ |
330,879 |
$ |
325,210 |
$ |
345,138 |
$ |
332,867 |
Investment securities |
|
33,584 |
|
32,144 |
|
28,454 |
|
27,070 |
|
27,478 |
Interest bearing deposits in
other banks |
|
43,233 |
|
54,355 |
|
63,408 |
|
53,561 |
|
41,571 |
Total interest income |
|
422,068 |
|
417,378 |
|
417,072 |
|
425,769 |
|
401,916 |
Interest
expense |
|
|
|
|
|
Deposits |
|
181,280 |
|
175,600 |
|
170,173 |
|
160,117 |
|
137,391 |
Short-term borrowings |
|
12,749 |
|
12,783 |
|
18,069 |
|
19,576 |
|
18,253 |
Long-term debt |
|
11,457 |
|
13,986 |
|
14,113 |
|
14,005 |
|
14,282 |
Total interest expense |
|
205,486 |
|
202,369 |
|
202,355 |
|
193,698 |
|
169,926 |
Net interest
income |
|
216,582 |
|
215,009 |
|
214,717 |
|
232,071 |
|
231,990 |
Provision for credit
losses |
|
20,000 |
|
19,000 |
|
19,000 |
|
18,000 |
|
7,000 |
Net interest income
after provision for credit losses |
|
196,582 |
|
196,009 |
|
195,717 |
|
214,071 |
|
224,990 |
Non-interest
income |
|
|
|
|
|
Service charges on deposit
accounts |
|
5,911 |
|
6,339 |
|
5,397 |
|
5,297 |
|
5,158 |
Wealth management and trust
fee income |
|
3,699 |
|
3,567 |
|
3,302 |
|
3,509 |
|
3,715 |
Brokered loan fees |
|
2,131 |
|
1,911 |
|
2,076 |
|
2,532 |
|
2,415 |
Investment banking and
advisory fees |
|
25,048 |
|
18,424 |
|
6,906 |
|
23,099 |
|
19,101 |
Trading income |
|
5,650 |
|
4,712 |
|
3,819 |
|
6,092 |
|
8,397 |
Other |
|
7,985 |
|
6,366 |
|
9,633 |
|
6,343 |
|
7,225 |
Total non-interest income |
|
50,424 |
|
41,319 |
|
31,133 |
|
46,872 |
|
46,011 |
Non-interest
expense |
|
|
|
|
|
Salaries and benefits |
|
118,840 |
|
128,727 |
|
107,970 |
|
110,010 |
|
113,050 |
Occupancy expense |
|
10,666 |
|
9,737 |
|
9,483 |
|
9,910 |
|
9,482 |
Marketing |
|
5,996 |
|
6,036 |
|
5,686 |
|
4,757 |
|
6,367 |
Legal and professional |
|
11,273 |
|
16,195 |
|
17,127 |
|
17,614 |
|
15,669 |
Communications and
technology |
|
22,013 |
|
21,114 |
|
23,607 |
|
19,607 |
|
20,525 |
Federal Deposit Insurance
Corporation insurance assessment |
|
5,570 |
|
8,421 |
|
25,143 |
|
5,769 |
|
3,693 |
Other |
|
14,051 |
|
12,163 |
|
12,369 |
|
12,224 |
|
12,858 |
Total non-interest expense |
|
188,409 |
|
202,393 |
|
201,385 |
|
179,891 |
|
181,644 |
Income before income
taxes |
|
58,597 |
|
34,935 |
|
25,465 |
|
81,052 |
|
89,357 |
Income tax expense |
|
16,935 |
|
8,793 |
|
5,315 |
|
19,373 |
|
20,706 |
Net
income |
|
41,662 |
|
26,142 |
|
20,150 |
|
61,679 |
|
68,651 |
Preferred stock
dividends |
|
4,312 |
|
4,313 |
|
4,312 |
|
4,313 |
|
4,312 |
Net income available
to common shareholders |
$ |
37,350 |
$ |
21,829 |
$ |
15,838 |
$ |
57,366 |
$ |
64,339 |
|
TEXAS
CAPITAL BANCSHARES, INC. |
TAXABLE
EQUIVALENT NET INTEREST INCOME ANALYSIS
(UNAUDITED)(1) |
(dollars in
thousands) |
|
|
2nd Quarter 2024 |
|
1st Quarter 2024 |
|
4th Quarter 2023 |
|
3rd Quarter 2023 |
|
2nd Quarter 2023 |
|
AverageBalance |
Income/Expense |
Yield/Rate |
|
AverageBalance |
Income/Expense |
Yield/Rate |
|
AverageBalance |
Income/Expense |
Yield/Rate |
|
AverageBalance |
Income/Expense |
Yield/Rate |
|
AverageBalance |
Income/Expense |
Yield/Rate |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities(2) |
$ |
4,427,023 |
$ |
33,584 |
2.80 |
% |
|
$ |
4,299,368 |
$ |
32,144 |
2.77 |
% |
|
$ |
4,078,975 |
$ |
28,454 |
2.48 |
% |
|
$ |
4,204,749 |
$ |
27,070 |
2.33 |
% |
|
$ |
4,306,881 |
$ |
27,478 |
2.36 |
% |
Interest bearing cash and cash
equivalents |
|
3,273,069 |
|
43,233 |
5.31 |
% |
|
|
4,051,627 |
|
54,355 |
5.40 |
% |
|
|
4,637,374 |
|
63,408 |
5.42 |
% |
|
|
3,965,045 |
|
53,561 |
5.36 |
% |
|
|
3,286,091 |
|
41,571 |
5.07 |
% |
Loans held for sale |
|
28,768 |
|
683 |
9.55 |
% |
|
|
51,164 |
|
1,184 |
9.31 |
% |
|
|
29,071 |
|
672 |
9.17 |
% |
|
|
31,878 |
|
647 |
8.06 |
% |
|
|
28,414 |
|
599 |
8.46 |
% |
Loans held for investment,
mortgage finance(4) |
|
4,357,288 |
|
42,722 |
3.94 |
% |
|
|
3,517,707 |
|
31,455 |
3.60 |
% |
|
|
3,946,280 |
|
33,709 |
3.39 |
% |
|
|
4,697,702 |
|
50,813 |
4.29 |
% |
|
|
4,376,235 |
|
49,425 |
4.53 |
% |
Loans held for
investment(3)(4) |
|
16,750,788 |
|
301,910 |
7.25 |
% |
|
|
16,522,089 |
|
298,306 |
7.26 |
% |
|
|
16,164,233 |
|
290,897 |
7.14 |
% |
|
|
16,317,324 |
|
293,750 |
7.14 |
% |
|
|
16,217,314 |
|
282,956 |
7.00 |
% |
Less: Allowance for credit
losses on loans |
|
263,145 |
|
— |
— |
|
|
|
249,936 |
|
— |
— |
|
|
|
244,287 |
|
— |
— |
|
|
|
238,883 |
|
— |
— |
|
|
|
261,027 |
|
— |
— |
|
Loans held for investment,
net |
|
20,844,931 |
|
344,632 |
6.65 |
% |
|
|
19,789,860 |
|
329,761 |
6.70 |
% |
|
|
19,866,226 |
|
324,606 |
6.48 |
% |
|
|
20,776,143 |
|
344,563 |
6.58 |
% |
|
|
20,332,522 |
|
332,381 |
6.56 |
% |
Total earning assets |
|
28,573,791 |
|
422,132 |
5.86 |
% |
|
|
28,192,019 |
|
417,444 |
5.88 |
% |
|
|
28,611,646 |
|
417,140 |
5.69 |
% |
|
|
28,977,815 |
|
425,841 |
5.75 |
% |
|
|
27,953,908 |
|
402,029 |
5.69 |
% |
Cash and other assets |
|
1,177,061 |
|
|
|
|
1,058,463 |
|
|
|
|
1,120,354 |
|
|
|
|
1,106,031 |
|
|
|
|
1,049,145 |
|
|
Total
assets |
$ |
29,750,852 |
|
|
|
$ |
29,250,482 |
|
|
|
$ |
29,732,000 |
|
|
|
$ |
30,083,846 |
|
|
|
$ |
29,003,053 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction deposits |
$ |
2,061,622 |
$ |
16,982 |
3.31 |
% |
|
$ |
2,006,493 |
$ |
16,858 |
3.38 |
% |
|
$ |
1,972,324 |
$ |
15,613 |
3.14 |
% |
|
$ |
1,755,451 |
$ |
13,627 |
3.08 |
% |
|
$ |
1,345,742 |
$ |
9,468 |
2.82 |
% |
Savings deposits |
|
11,981,668 |
|
143,173 |
4.81 |
% |
|
|
11,409,677 |
|
136,790 |
4.82 |
% |
|
|
11,043,155 |
|
132,801 |
4.77 |
% |
|
|
10,858,306 |
|
127,323 |
4.65 |
% |
|
|
10,590,558 |
|
114,275 |
4.33 |
% |
Time deposits |
|
1,658,899 |
|
21,125 |
5.12 |
% |
|
|
1,719,325 |
|
21,952 |
5.14 |
% |
|
|
1,716,812 |
|
21,759 |
5.03 |
% |
|
|
1,610,235 |
|
19,167 |
4.72 |
% |
|
|
1,531,922 |
|
13,648 |
3.57 |
% |
Total interest bearing
deposits |
|
15,702,189 |
|
181,280 |
4.64 |
% |
|
|
15,135,495 |
|
175,600 |
4.67 |
% |
|
|
14,732,291 |
|
170,173 |
4.58 |
% |
|
|
14,223,992 |
|
160,117 |
4.47 |
% |
|
|
13,468,222 |
|
137,391 |
4.09 |
% |
Short-term borrowings |
|
927,253 |
|
12,749 |
5.53 |
% |
|
|
912,088 |
|
12,783 |
5.64 |
% |
|
|
1,257,609 |
|
18,069 |
5.70 |
% |
|
|
1,393,478 |
|
19,576 |
5.57 |
% |
|
|
1,397,253 |
|
18,253 |
5.24 |
% |
Long-term debt |
|
778,401 |
|
11,457 |
5.92 |
% |
|
|
859,509 |
|
13,986 |
6.54 |
% |
|
|
858,858 |
|
14,113 |
6.52 |
% |
|
|
858,167 |
|
14,005 |
6.47 |
% |
|
|
883,871 |
|
14,282 |
6.48 |
% |
Total interest bearing
liabilities |
|
17,407,843 |
|
205,486 |
4.75 |
% |
|
|
16,907,092 |
|
202,369 |
4.81 |
% |
|
|
16,848,758 |
|
202,355 |
4.76 |
% |
|
|
16,475,637 |
|
193,698 |
4.66 |
% |
|
|
15,749,346 |
|
169,926 |
4.33 |
% |
Non-interest bearing
deposits |
|
8,647,594 |
|
|
|
|
8,637,775 |
|
|
|
|
9,247,491 |
|
|
|
|
10,016,579 |
|
|
|
|
9,749,105 |
|
|
Other liabilities |
|
537,754 |
|
|
|
|
509,286 |
|
|
|
|
541,162 |
|
|
|
|
474,869 |
|
|
|
|
389,155 |
|
|
Stockholders’ equity |
|
3,157,661 |
|
|
|
|
3,196,329 |
|
|
|
|
3,094,589 |
|
|
|
|
3,116,761 |
|
|
|
|
3,115,447 |
|
|
Total liabilities and
stockholders’ equity |
$ |
29,750,852 |
|
|
|
$ |
29,250,482 |
|
|
|
$ |
29,732,000 |
|
|
|
$ |
30,083,846 |
|
|
|
$ |
29,003,053 |
|
|
Net interest
income |
|
$ |
216,646 |
|
|
|
$ |
215,075 |
|
|
|
$ |
214,785 |
|
|
|
$ |
232,143 |
|
|
|
$ |
232,103 |
|
Net interest
margin |
|
|
3.01 |
% |
|
|
|
3.03 |
% |
|
|
|
2.93 |
% |
|
|
|
3.13 |
% |
|
|
|
3.29 |
% |
|
(1) Taxable
equivalent rates used where applicable. |
(2) Yields on
investment securities are calculated using available-for-sale
securities at amortized cost. |
(3) Average
balances include non-accrual loans. |
(4) In the first
quarter of 2024, enhancements were made to our methodology for
applying relationship pricing credits to mortgage client loans. To
conform to the current period presentation, certain prior period
interest income amounts have been reclassified from loans held for
investment, mortgage finance to loans held for investment and
related yields have been adjusted accordingly. |
INVESTOR CONTACT
Jocelyn Kukulka, 469.399.8544
jocelyn.kukulka@texascapitalbank.com
MEDIA CONTACT
Julia Monter, 469.399.8425
julia.monter@texascapitalbank.com
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