Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company
of Texas Capital Bank, announced operating results for the second
quarter of 2023.
Net income available to common stockholders was
$64.3 million, or $1.33 per diluted share, for the second quarter
of 2023, compared to $34.3 million, or $0.70 per diluted share, for
the first quarter of 2023 and $29.8 million, or $0.59 per diluted
share, for the second quarter of 2022.
“Our talent, the strength of our balance sheet
and the breadth of our platform continues to be a competitive
differentiator in our markets,” said Rob C. Holmes, President and
CEO. “Steadily maturing capabilities resulted in another quarter of
improving financial results consistent with expectations. We are
steadfast in our commitment to our long-term plan and will continue
to execute on our vision to serve the best clients in our
markets.”
FINANCIAL
RESULTS |
|
|
|
|
|
(dollars and shares in
thousands) |
|
|
|
|
|
|
2nd Quarter |
|
1st Quarter |
|
2nd Quarter |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
OPERATING
RESULTS |
|
|
|
|
|
Net income |
$ |
68,651 |
|
|
$ |
38,661 |
|
|
$ |
34,159 |
|
Net income available to common stockholders |
$ |
64,339 |
|
|
$ |
34,348 |
|
|
$ |
29,847 |
|
Diluted earnings per common share |
$ |
1.33 |
|
|
$ |
0.70 |
|
|
$ |
0.59 |
|
Diluted common shares |
|
48,421 |
|
|
|
48,881 |
|
|
|
50,802 |
|
Return on average assets |
|
0.95 |
% |
|
|
0.53 |
% |
|
|
0.44 |
% |
Return on average common equity |
|
9.17 |
% |
|
|
5.06 |
% |
|
|
4.35 |
% |
|
|
|
|
|
|
BALANCE
SHEET |
|
|
|
|
|
Loans held for investment |
$ |
16,227,203 |
|
|
$ |
16,014,497 |
|
|
$ |
17,517,866 |
|
Loans held for investment, mortgage finance |
|
5,098,812 |
|
|
|
4,060,570 |
|
|
|
6,549,507 |
|
Total loans held for investment |
|
21,326,015 |
|
|
|
20,075,067 |
|
|
|
24,067,373 |
|
Loans held for sale |
|
29,097 |
|
|
|
27,608 |
|
|
|
4,266 |
|
Total assets |
|
28,976,544 |
|
|
|
28,596,653 |
|
|
|
32,338,963 |
|
Non-interest bearing deposits |
|
9,429,352 |
|
|
|
9,500,583 |
|
|
|
12,555,367 |
|
Total deposits |
|
23,318,240 |
|
|
|
22,179,697 |
|
|
|
25,440,021 |
|
Stockholders’ equity |
|
3,081,927 |
|
|
|
3,079,974 |
|
|
|
3,006,832 |
|
|
|
|
|
|
|
(1) Net interest income and non-interest expense, less
non-interest expense.
SECOND QUARTER
2023 COMPARED TO
FIRST QUARTER
2023
For the second quarter of 2023, net income
available to common stockholders was $64.3 million, or $1.33 per
diluted share, compared to $34.3 million, or $0.70 per diluted
share, for the first quarter of 2023.
Provision for credit losses for the second
quarter of 2023 was $7.0 million, compared to a $28.0 million
provision for credit losses for the first quarter of 2023. The $7.0
million provision for credit losses recorded in the second quarter
of 2023 resulted primarily from decreases in net charge-offs and
non-accrual loans, partially offset by increases in total loans
held for investment (“LHI”) and criticized loans.
Net interest income was $232.0 million for the
second quarter of 2023, compared to $235.3 million for the first
quarter of 2023. The decrease in net interest income was primarily
due to a decrease in total average earning assets and an increase
in funding costs, partially offset by an increase in yields on
average earning assets. Net interest margin for the second quarter
of 2023 was 3.29%, a decrease of 4 basis points from the first
quarter of 2023. LHI, excluding mortgage finance, yields increased
36 basis points from the first quarter of 2023 and LHI, mortgage
finance yields decreased 20 basis points from the first quarter of
2023. Total cost of deposits was 2.37% for the second quarter of
2023, a 31 basis point increase from the first quarter of 2023.
Non-interest income for the second quarter of
2023 increased $8.6 million, or 23%, compared to the first quarter
of 2023, primarily due to an increase in investment banking and
trading income.
Non-interest expense for the second quarter of
2023 decreased $12.4 million, or 6%, compared to the first quarter
of 2023, primarily due to decreases in salaries and benefits
expense, resulting from a decline in headcount, and marketing
expense, partially offset by an increase in communications and
technology expense.
SECOND QUARTER
2023 COMPARED TO
SECOND QUARTER
2022
Net income available to common stockholders was
$64.3 million, or $1.33 per diluted share, for the second quarter
of 2023, compared to $29.8 million, or $0.59 per diluted share, for
the second quarter of 2022.
The second quarter of 2023 included a $7.0
million provision for credit losses, reflecting decreases in net
charge-offs and non-accrual loans, partially offset by growth in
LHI, compared to a $22.0 million provision for credit losses for
the second quarter of 2022.
Net interest income increased to $232.0 million
for the second quarter of 2023, compared to $205.5 million for the
second quarter of 2022, primarily due to an increase in yields on
average earning assets, partially offset by an increase in funding
costs and a decrease in total average earning assets. Net interest
margin increased 61 basis points to 3.29% for the second quarter of
2023, as compared to the second quarter of 2022. LHI, excluding
mortgage finance, yields increased 326 basis points compared to the
second quarter of 2022 and LHI, mortgage finance yields decreased
10 basis points from the second quarter of 2022. Total cost of
deposits increased 204 basis points compared to the second quarter
of 2022.
Non-interest income for the second quarter of
2023 increased $19.8 million, or 75%, compared to the second
quarter of 2022. The increase was primarily due to increases in
investment banking and trading income and other non-interest
income.
Non-interest expense for the second quarter of
2023 increased $17.3 million, or 11%, compared to the second
quarter of 2022 primarily due to increases in salaries and
benefits, legal and professional and communications and technology
expenses, partially offset by a decrease in marketing expense.
CREDIT QUALITY
Net charge-offs of $8.2 million were recorded
during the second quarter of 2023, compared to net charge-offs of
$19.9 million and $2.6 million during the first quarter of 2023 and
the second quarter of 2022, respectively. Criticized loans totaled
$619.4 million at June 30, 2023, compared to $561.1 million at
March 31, 2023 and $603.5 million at June 30, 2022.
Non-accrual LHI totaled $81.0 million at June 30, 2023,
compared to $94.0 million at March 31, 2023 and $50.5 million at
June 30, 2022. The ratio of non-accrual LHI to total LHI for
the second quarter of 2023 was 0.38%, compared to 0.47% for the
first quarter of 2023 and 0.21% for the second quarter of 2022.
The ratio of total allowance for credit losses
to total LHI was 1.32% at June 30, 2023, compared to 1.41% and
1.03% at March 31, 2023 and June 30, 2022, respectively. In
the second quarter of 2023, changes were made to certain estimates
used in the Company’s current expected credit loss model, the most
significant of which are more granular estimates of historical loss
rates to incorporate probability of default and loss severities and
allocations of expected losses to outstanding loan balances and
off-balance sheet financial instruments. These changes resulted in
adjustments to the Company’s portfolio segments and in a
reallocation of the allowance for credit losses between loan
portfolio segments and allowance balances allocated to off-balance
sheet financial instruments, the results of which are included in
the Summary of Credit Loss Experience table below. The changes made
result in a higher allocation of losses to off-balance sheet
financial instruments.
REGULATORY RATIOS AND
CAPITAL
All regulatory ratios continue to be in excess
of “well capitalized” requirements as of June 30, 2023. Our
CET1, tier 1 capital, total capital and leverage ratios were 12.2%,
13.7%, 16.4% and 12.4%, respectively, at June 30, 2023,
compared to 12.4%, 14.0%, 16.9% and 12.0%, respectively, at March
31, 2023 and 10.5%, 11.9%, 14.4% and 10.7%, respectively, at
June 30, 2022. At June 30, 2023, our ratio of tangible
common equity to total tangible assets was 9.6%, compared to 9.7%
at March 31, 2023 and 8.3% at June 30, 2022.
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 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 Bank 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, credit quality and risk, the unpredictability of
economic and business conditions that may impact TCBI or its
customers, recent adverse developments in the banking industry
highlighted by high-profile bank failures and the potential impact
of such developments on customer confidence, liquidity and
regulatory responses to these developments, the Company’s ability
to effective manage its liquidity risk and any growth plans and the
availability of capital and funding, the Company’s ability to
effectively manage information technology systems, cyber incidents
or other failures, disruptions or security breaches, interest
rates, including the impact of rising rates on the Company’s
securities portfolio and funding costs, commercial and residential
real estate values, adverse or unexpected economic conditions,
including inflation, recession, the threat of recession, and market
conditions in Texas, the United States or globally, including
governmental and consumer responses to those economic and market
conditions, fund availability, accounting estimates and risk
management processes, the transition away from the London Interbank
Offered Rate (LIBOR), legislative and regulatory changes,
enforcement actions and regulatory examinations and investigations,
ratings or interpretations, business strategy execution, 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, the failure to
maintain adequate regulatory capital, environmental liability
associated with properties related to TCBI’s lending activities,
and severe weather, natural disasters, acts of war, terrorism,
global conflict, or other external events, climate change and
related legislative and regulatory initiatives as well as the risks
more fully described in TCBI’s most recent Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and in its 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 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
CONSOLIDATED
STATEMENTS OF INCOME |
|
|
|
|
|
Interest income |
$ |
401,916 |
|
$ |
385,166 |
|
$ |
371,292 |
|
$ |
322,072 |
|
$ |
242,351 |
|
Interest expense |
|
169,926 |
|
|
149,821 |
|
|
123,687 |
|
|
82,991 |
|
|
36,818 |
|
Net interest income |
|
231,990 |
|
|
235,345 |
|
|
247,605 |
|
|
239,081 |
|
|
205,533 |
|
Provision for credit losses |
|
7,000 |
|
|
28,000 |
|
|
34,000 |
|
|
12,000 |
|
|
22,000 |
|
Net interest income after
provision for credit losses |
|
224,990 |
|
|
207,345 |
|
|
213,605 |
|
|
227,081 |
|
|
183,533 |
|
Non-interest income |
|
46,011 |
|
|
37,403 |
|
|
277,667 |
|
|
25,332 |
|
|
26,240 |
|
Non-interest expense |
|
181,644 |
|
|
194,027 |
|
|
213,090 |
|
|
197,047 |
|
|
164,303 |
|
Income before income
taxes |
|
89,357 |
|
|
50,721 |
|
|
278,182 |
|
|
55,366 |
|
|
45,470 |
|
Income tax expense |
|
20,706 |
|
|
12,060 |
|
|
60,931 |
|
|
13,948 |
|
|
11,311 |
|
Net income |
|
68,651 |
|
|
38,661 |
|
|
217,251 |
|
|
41,418 |
|
|
34,159 |
|
Preferred stock dividends |
|
4,312 |
|
|
4,313 |
|
|
4,312 |
|
|
4,313 |
|
|
4,312 |
|
Net income available to common stockholders |
$ |
64,339 |
|
$ |
34,348 |
|
$ |
212,939 |
|
$ |
37,105 |
|
$ |
29,847 |
|
Diluted earnings per common share |
$ |
1.33 |
|
$ |
0.70 |
|
$ |
4.23 |
|
$ |
0.74 |
|
$ |
0.59 |
|
Diluted common shares |
|
48,421,276 |
|
|
48,880,725 |
|
|
50,282,663 |
|
|
50,417,884 |
|
|
50,801,628 |
|
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEET DATA |
|
|
|
|
|
Total assets |
$ |
28,976,544 |
|
$ |
28,596,653 |
|
$ |
28,414,642 |
|
$ |
30,408,513 |
|
$ |
32,338,963 |
|
Loans held for investment |
|
16,227,203 |
|
|
16,014,497 |
|
|
15,197,307 |
|
|
14,878,959 |
|
|
17,517,866 |
|
Loans held for investment, mortgage finance |
|
5,098,812 |
|
|
4,060,570 |
|
|
4,090,033 |
|
|
4,908,822 |
|
|
6,549,507 |
|
Loans held for sale |
|
29,097 |
|
|
27,608 |
|
|
36,357 |
|
|
3,142,178 |
|
|
4,266 |
|
Interest bearing cash and cash equivalents |
|
2,587,131 |
|
|
3,385,494 |
|
|
4,778,623 |
|
|
3,399,638 |
|
|
4,032,931 |
|
Investment securities |
|
4,226,653 |
|
|
4,345,969 |
|
|
3,585,114 |
|
|
3,369,622 |
|
|
3,552,699 |
|
Non-interest bearing deposits |
|
9,429,352 |
|
|
9,500,583 |
|
|
9,618,081 |
|
|
11,494,685 |
|
|
12,555,367 |
|
Total deposits |
|
23,318,240 |
|
|
22,179,697 |
|
|
22,856,880 |
|
|
24,498,563 |
|
|
25,440,021 |
|
Short-term borrowings |
|
1,350,000 |
|
|
2,100,000 |
|
|
1,201,142 |
|
|
1,701,480 |
|
|
2,651,536 |
|
Long-term debt |
|
857,795 |
|
|
932,119 |
|
|
931,442 |
|
|
930,766 |
|
|
917,098 |
|
Stockholders’ equity |
|
3,081,927 |
|
|
3,079,974 |
|
|
3,055,351 |
|
|
2,885,775 |
|
|
3,006,832 |
|
|
|
|
|
|
|
End of period shares outstanding |
|
47,992,521 |
|
|
47,851,862 |
|
|
48,783,763 |
|
|
49,897,726 |
|
|
49,878,041 |
|
Book value per share |
$ |
57.97 |
|
$ |
58.10 |
|
$ |
56.48 |
|
$ |
51.82 |
|
$ |
54.27 |
|
Tangible book value per
share(1) |
$ |
57.93 |
|
$ |
58.06 |
|
$ |
56.45 |
|
$ |
51.48 |
|
$ |
53.93 |
|
|
|
|
|
|
|
SELECTED FINANCIAL RATIOS |
|
|
|
|
|
Net interest margin |
|
3.29 |
% |
|
3.33 |
% |
|
3.26 |
% |
|
3.05 |
% |
|
2.68 |
% |
Return on average assets |
|
0.95 |
% |
|
0.53 |
% |
|
2.80 |
% |
|
0.52 |
% |
|
0.44 |
% |
Return on average common equity |
|
9.17 |
% |
|
5.06 |
% |
|
30.66 |
% |
|
5.36 |
% |
|
4.35 |
% |
Non-interest income to average earning assets |
|
0.66 |
% |
|
0.54 |
% |
|
3.70 |
% |
|
0.33 |
% |
|
0.34 |
% |
Efficiency ratio(2) |
|
65.3 |
% |
|
71.1 |
% |
|
40.6 |
% |
|
74.5 |
% |
|
70.9 |
% |
Non-interest expense to average earning assets |
|
2.61 |
% |
|
2.78 |
% |
|
2.84 |
% |
|
2.53 |
% |
|
2.16 |
% |
Common equity to total
assets |
|
9.6 |
% |
|
9.7 |
% |
|
9.7 |
% |
|
8.5 |
% |
|
8.4 |
% |
Tangible common equity to
total tangible assets(3) |
|
9.6 |
% |
|
9.7 |
% |
|
9.7 |
% |
|
8.5 |
% |
|
8.3 |
% |
Common Equity Tier 1 |
|
12.2 |
% |
|
12.4 |
% |
|
13.0 |
% |
|
11.1 |
% |
|
10.5 |
% |
Tier 1 capital |
|
13.7 |
% |
|
14.0 |
% |
|
14.7 |
% |
|
12.6 |
% |
|
11.9 |
% |
Total capital |
|
16.4 |
% |
|
16.9 |
% |
|
17.7 |
% |
|
15.2 |
% |
|
14.4 |
% |
Leverage |
|
12.4 |
% |
|
12.0 |
% |
|
11.5 |
% |
|
10.7 |
% |
|
10.7 |
% |
|
(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, 2023 |
June 30, 2022 |
% Change |
Assets |
|
|
|
Cash and due from banks |
$ |
260,314 |
|
$ |
242,425 |
|
7 |
% |
Interest bearing cash and cash
equivalents |
|
2,587,131 |
|
|
4,032,931 |
|
(36) |
% |
Available-for-sale debt
securities |
|
3,292,478 |
|
|
2,535,646 |
|
30 |
% |
Held-to-maturity debt
securities |
|
900,315 |
|
|
980,935 |
|
(8) |
% |
Equity securities |
|
33,860 |
|
|
36,118 |
|
(6) |
% |
Investment securities |
|
4,226,653 |
|
|
3,552,699 |
|
19 |
% |
Loans held for sale |
|
29,097 |
|
|
4,266 |
|
N/M |
Loans held for investment,
mortgage finance |
|
5,098,812 |
|
|
6,549,507 |
|
(22) |
% |
Loans held for investment |
|
16,227,203 |
|
|
17,517,866 |
|
(7) |
% |
Less: Allowance for credit
losses on loans |
|
237,343 |
|
|
229,013 |
|
4 |
% |
Loans held for investment, net |
|
21,088,672 |
|
|
23,838,360 |
|
(12) |
% |
Premises and equipment,
net |
|
26,096 |
|
|
28,722 |
|
(9) |
% |
Accrued interest receivable
and other assets |
|
757,085 |
|
|
622,501 |
|
22 |
% |
Goodwill and intangibles,
net |
|
1,496 |
|
|
17,059 |
|
(91) |
% |
Total
assets |
$ |
28,976,544 |
|
$ |
32,338,963 |
|
(10) |
% |
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
Liabilities: |
|
|
|
Non-interest bearing
deposits |
$ |
9,429,352 |
|
$ |
12,555,367 |
|
(25) |
% |
Interest bearing deposits |
|
13,888,888 |
|
|
12,884,654 |
|
8 |
% |
Total deposits |
|
23,318,240 |
|
|
25,440,021 |
|
(8) |
% |
Accrued interest payable |
|
29,658 |
|
|
8,928 |
|
N/M |
Other liabilities |
|
338,924 |
|
|
314,548 |
|
8 |
% |
Short-term borrowings |
|
1,350,000 |
|
|
2,651,536 |
|
(49) |
% |
Long-term debt |
|
857,795 |
|
|
917,098 |
|
(6) |
% |
Total
liabilities |
|
25,894,617 |
|
|
29,332,131 |
|
(12) |
% |
|
|
|
|
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, 2023 and
2022 |
|
300,000 |
|
|
300,000 |
|
— |
% |
Common stock, $.01 par value: |
|
|
|
Authorized shares - 100,000,000 |
|
|
|
Issued shares - 51,087,965 and
50,820,337 at June 30, 2023 and 2022, respectively |
|
511 |
|
|
508 |
|
1 |
% |
Additional paid-in capital |
|
1,035,063 |
|
|
1,015,105 |
|
2 |
% |
Retained earnings |
|
2,362,189 |
|
|
2,013,458 |
|
17 |
% |
Treasury stock - 3,095,444 and
942,296 shares at cost at June 30, 2023 and 2022,
respectively |
|
(175,528 |
) |
|
(50,031 |
) |
N/M |
Accumulated other comprehensive loss, net of taxes |
|
(440,308 |
) |
|
(272,208 |
) |
62 |
% |
Total stockholders’
equity |
|
3,081,927 |
|
|
3,006,832 |
|
2 |
% |
Total liabilities and
stockholders’ equity |
$ |
28,976,544 |
|
$ |
32,338,963 |
|
(10) |
% |
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, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Interest
income |
|
|
|
|
Interest and fees on
loans |
$ |
332,867 |
|
$ |
218,292 |
|
$ |
630,305 |
|
$ |
405,948 |
Investment securities |
|
27,478 |
|
|
14,665 |
|
|
52,770 |
|
|
31,967 |
Interest bearing cash and cash
equivalents |
|
41,571 |
|
|
9,394 |
|
|
104,007 |
|
|
12,965 |
Total interest income |
|
401,916 |
|
|
242,351 |
|
|
787,082 |
|
|
450,880 |
Interest
expense |
|
|
|
|
Deposits |
|
137,391 |
|
|
20,566 |
|
|
257,485 |
|
|
34,196 |
Short-term borrowings |
|
18,253 |
|
|
4,859 |
|
|
32,997 |
|
|
5,617 |
Long-term debt |
|
14,282 |
|
|
11,393 |
|
|
29,265 |
|
|
21,988 |
Total interest expense |
|
169,926 |
|
|
36,818 |
|
|
319,747 |
|
|
61,801 |
Net interest
income |
|
231,990 |
|
|
205,533 |
|
|
467,335 |
|
|
389,079 |
Provision for credit
losses |
|
7,000 |
|
|
22,000 |
|
|
35,000 |
|
|
20,000 |
Net interest income
after provision for credit losses |
|
224,990 |
|
|
183,533 |
|
|
432,335 |
|
|
369,079 |
Non-interest
income |
|
|
|
|
Service charges on deposit
accounts |
|
5,158 |
|
|
6,102 |
|
|
10,180 |
|
|
12,217 |
Wealth management and trust
fee income |
|
3,715 |
|
|
4,051 |
|
|
7,144 |
|
|
7,963 |
Brokered loan fees |
|
2,415 |
|
|
4,133 |
|
|
4,310 |
|
|
8,103 |
Investment banking and trading
income |
|
27,498 |
|
|
11,126 |
|
|
46,266 |
|
|
15,305 |
Other |
|
7,225 |
|
|
828 |
|
|
15,514 |
|
|
2,935 |
Total non-interest income |
|
46,011 |
|
|
26,240 |
|
|
83,414 |
|
|
46,523 |
Non-interest
expense |
|
|
|
|
Salaries and benefits |
|
113,050 |
|
|
103,358 |
|
|
241,720 |
|
|
203,217 |
Occupancy expense |
|
9,482 |
|
|
8,874 |
|
|
19,101 |
|
|
17,759 |
Marketing |
|
6,367 |
|
|
8,506 |
|
|
15,411 |
|
|
13,483 |
Legal and professional |
|
15,669 |
|
|
11,288 |
|
|
30,183 |
|
|
21,590 |
Communications and
technology |
|
20,525 |
|
|
15,649 |
|
|
38,048 |
|
|
30,349 |
Federal Deposit Insurance
Corporation insurance assessment |
|
3,693 |
|
|
3,318 |
|
|
5,863 |
|
|
7,299 |
Other |
|
12,858 |
|
|
13,310 |
|
|
25,345 |
|
|
23,698 |
Total non-interest expense |
|
181,644 |
|
|
164,303 |
|
|
375,671 |
|
|
317,395 |
Income before income
taxes |
|
89,357 |
|
|
45,470 |
|
|
140,078 |
|
|
98,207 |
Income tax expense |
|
20,706 |
|
|
11,311 |
|
|
32,766 |
|
|
24,398 |
Net
income |
|
68,651 |
|
|
34,159 |
|
|
107,312 |
|
|
73,809 |
Preferred stock
dividends |
|
4,312 |
|
|
4,312 |
|
|
8,625 |
|
|
8,625 |
Net income available
to common stockholders |
$ |
64,339 |
|
$ |
29,847 |
|
$ |
98,687 |
|
$ |
65,184 |
|
|
|
|
|
Basic earnings per
common share |
$ |
1.34 |
|
$ |
0.59 |
|
$ |
2.05 |
|
$ |
1.29 |
Diluted earnings per
common share |
$ |
1.33 |
|
$ |
0.59 |
|
$ |
2.02 |
|
$ |
1.28 |
TEXAS
CAPITAL BANCSHARES, INC. |
SUMMARY
OF CREDIT LOSS EXPERIENCE |
(dollars in
thousands) |
|
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
Allowance for credit
losses on loans: |
|
|
|
|
|
Beginning balance |
$ |
260,928 |
|
$ |
253,469 |
|
$ |
234,613 |
|
$ |
229,013 |
|
$ |
211,151 |
|
Loans charged-off: |
|
|
|
|
|
Commercial |
|
8,852 |
|
|
20,732 |
|
|
17,106 |
|
|
3,135 |
|
|
2,868 |
|
Total charge-offs |
|
8,852 |
|
|
20,732 |
|
|
17,106 |
|
|
3,135 |
|
|
2,868 |
|
Recoveries: |
|
|
|
|
|
Commercial |
|
611 |
|
|
819 |
|
|
2,105 |
|
|
400 |
|
|
217 |
|
Consumer |
|
2 |
|
|
3 |
|
|
2 |
|
|
2 |
|
|
2 |
|
Total recoveries |
|
613 |
|
|
822 |
|
|
2,107 |
|
|
402 |
|
|
219 |
|
Net charge-offs |
|
8,239 |
|
|
19,910 |
|
|
14,999 |
|
|
2,733 |
|
|
2,649 |
|
Provision for credit losses on
loans |
|
(15,346 |
) |
|
27,369 |
|
|
33,855 |
|
|
8,333 |
|
|
20,511 |
|
Ending balance |
$ |
237,343 |
|
$ |
260,928 |
|
$ |
253,469 |
|
$ |
234,613 |
|
$ |
229,013 |
|
|
|
|
|
|
|
Allowance for
off-balance sheet credit losses: |
|
|
|
|
|
Beginning balance |
$ |
22,424 |
|
$ |
21,793 |
|
$ |
21,648 |
|
$ |
17,981 |
|
$ |
16,492 |
|
Provision for off-balance
sheet credit losses |
|
22,346 |
|
|
631 |
|
|
145 |
|
|
3,667 |
|
|
1,489 |
|
Ending balance |
$ |
44,770 |
|
$ |
22,424 |
|
$ |
21,793 |
|
$ |
21,648 |
|
$ |
17,981 |
|
|
|
|
|
|
|
Total allowance for credit
losses |
$ |
282,113 |
|
$ |
283,352 |
|
$ |
275,262 |
|
$ |
256,261 |
|
$ |
246,994 |
|
Total provision for credit
losses |
$ |
7,000 |
|
$ |
28,000 |
|
$ |
34,000 |
|
$ |
12,000 |
|
$ |
22,000 |
|
|
|
|
|
|
|
Allowance for credit losses on
loans to total loans held for investment |
|
1.11 |
% |
|
1.30 |
% |
|
1.31 |
% |
|
1.19 |
% |
|
0.95 |
% |
Allowance for credit losses on
loans to average total loans held for investment |
|
1.15 |
% |
|
1.38 |
% |
|
1.31 |
% |
|
1.06 |
% |
|
1.02 |
% |
Net charge-offs to average
total loans held for investment(1) |
|
0.16 |
% |
|
0.43 |
% |
|
0.31 |
% |
|
0.05 |
% |
|
0.05 |
% |
Net charge-offs to average
total loans held for investment for last 12 months(1) |
|
0.23 |
% |
|
0.19 |
% |
|
0.09 |
% |
|
0.03 |
% |
|
0.03 |
% |
Total provision for credit
losses to average total loans held for investment(1) |
|
0.14 |
% |
|
0.60 |
% |
|
0.70 |
% |
|
0.22 |
% |
|
0.39 |
% |
Total allowance for credit
losses to total loans held for investment |
|
1.32 |
% |
|
1.41 |
% |
|
1.43 |
% |
|
1.30 |
% |
|
1.03 |
% |
|
(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 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
Non-accrual loans held for
investment |
$ |
81,039 |
|
$ |
93,951 |
|
$ |
48,338 |
|
$ |
35,864 |
|
$ |
50,526 |
|
Non-accrual loans held for
sale(1) |
|
— |
|
|
— |
|
|
— |
|
|
1,340 |
|
|
— |
|
Other real estate owned |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total non-performing
assets |
$ |
81,039 |
|
$ |
93,951 |
|
$ |
48,338 |
|
$ |
37,204 |
|
$ |
50,526 |
|
|
|
|
|
|
|
Non-accrual loans held for
investment to total loans held for investment |
|
0.38 |
% |
|
0.47 |
% |
|
0.25 |
% |
|
0.18 |
% |
|
0.21 |
% |
Total non-performing assets to
total assets |
|
0.28 |
% |
|
0.33 |
% |
|
0.17 |
% |
|
0.12 |
% |
|
0.16 |
% |
Allowance for credit losses on
loans to non-accrual loans held for investment |
|
2.9 |
x |
|
2.8 |
x |
|
5.2 |
x |
|
6.5 |
x |
|
4.5 |
x |
Total allowance for credit
losses to non-accrual loans held for investment |
|
3.5 |
x |
|
3.0 |
x |
|
5.7 |
x |
|
6.9 |
x |
|
4.9 |
x |
|
|
|
|
|
|
Loans held for investment past
due 90 days and still accruing |
$ |
64 |
|
$ |
3,098 |
|
$ |
131 |
|
$ |
30,664 |
|
$ |
3,206 |
|
Loans held for investment past
due 90 days to total loans held for investment |
|
— |
% |
|
0.02 |
% |
|
— |
% |
|
0.15 |
% |
|
0.01 |
% |
Loans held for sale past due
90 days and still accruing(1)(2) |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
4,877 |
|
$ |
1,602 |
|
|
(1) Third quarter
2022 includes $1.3 million in non-accrual loans and $3.1 million in
loans past due 90 days and still accruing associated to our
insurance premium finance subsidiary that were transferred from
loans held for investment to loans held for sale as of September
30, 2022. |
(2) Includes
loans guaranteed by U.S. government agencies that were repurchased
out of Ginnie Mae securities. Loans are recorded as loans held for
sale 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. |
TEXAS
CAPITAL BANCSHARES, INC. |
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
(dollars in
thousands) |
|
|
|
|
|
|
|
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
Interest
income |
|
|
|
|
|
Interest and fees on
loans |
$ |
332,867 |
|
$ |
297,438 |
|
$ |
295,372 |
|
$ |
282,474 |
|
$ |
218,292 |
Investment securities |
|
27,478 |
|
|
25,292 |
|
|
16,210 |
|
|
15,002 |
|
|
14,665 |
Interest bearing deposits in
other banks |
|
41,571 |
|
|
62,436 |
|
|
59,710 |
|
|
24,596 |
|
$ |
9,394 |
Total interest income |
|
401,916 |
|
|
385,166 |
|
|
371,292 |
|
|
322,072 |
|
|
242,351 |
Interest
expense |
|
|
|
|
|
Deposits |
|
137,391 |
|
|
120,094 |
|
|
96,150 |
|
|
60,317 |
|
|
20,566 |
Short-term borrowings |
|
18,253 |
|
|
14,744 |
|
|
13,449 |
|
|
10,011 |
|
|
4,859 |
Long-term debt |
|
14,282 |
|
|
14,983 |
|
|
14,088 |
|
|
12,663 |
|
|
11,393 |
Total interest expense |
|
169,926 |
|
|
149,821 |
|
|
123,687 |
|
|
82,991 |
|
|
36,818 |
Net interest
income |
|
231,990 |
|
|
235,345 |
|
|
247,605 |
|
|
239,081 |
|
|
205,533 |
Provision for credit
losses |
|
7,000 |
|
|
28,000 |
|
|
34,000 |
|
|
12,000 |
|
|
22,000 |
Net interest income
after provision for credit losses |
|
224,990 |
|
|
207,345 |
|
|
213,605 |
|
|
227,081 |
|
|
183,533 |
Non-interest
income |
|
|
|
|
|
Service charges on deposit
accounts |
|
5,158 |
|
|
5,022 |
|
|
5,252 |
|
|
5,797 |
|
|
6,102 |
Wealth management and trust
fee income |
|
3,715 |
|
|
3,429 |
|
|
3,442 |
|
|
3,631 |
|
|
4,051 |
Brokered loan fees |
|
2,415 |
|
|
1,895 |
|
|
2,655 |
|
|
3,401 |
|
|
4,133 |
Investment banking and trading
income |
|
27,498 |
|
|
18,768 |
|
|
11,937 |
|
|
7,812 |
|
|
11,126 |
Gain on disposal of
subsidiary |
|
— |
|
|
— |
|
|
248,526 |
|
|
— |
|
|
— |
Other |
|
7,225 |
|
|
8,289 |
|
|
5,855 |
|
|
4,691 |
|
|
828 |
Total non-interest income |
|
46,011 |
|
|
37,403 |
|
|
277,667 |
|
|
25,332 |
|
|
26,240 |
Non-interest
expense |
|
|
|
|
|
Salaries and benefits |
|
113,050 |
|
|
128,670 |
|
|
102,925 |
|
|
128,764 |
|
|
103,358 |
Occupancy expense |
|
9,482 |
|
|
9,619 |
|
|
17,030 |
|
|
9,433 |
|
|
8,874 |
Marketing |
|
6,367 |
|
|
9,044 |
|
|
10,623 |
|
|
8,282 |
|
|
8,506 |
Legal and professional |
|
15,669 |
|
|
14,514 |
|
|
37,493 |
|
|
16,775 |
|
|
11,288 |
Communications and
technology |
|
20,525 |
|
|
17,523 |
|
|
20,434 |
|
|
18,470 |
|
|
15,649 |
Federal Deposit Insurance
Corporation insurance assessment |
|
3,693 |
|
|
2,170 |
|
|
3,092 |
|
|
3,953 |
|
|
3,318 |
Other |
|
12,858 |
|
|
12,487 |
|
|
21,493 |
|
|
11,370 |
|
|
13,310 |
Total non-interest expense |
|
181,644 |
|
|
194,027 |
|
|
213,090 |
|
|
197,047 |
|
|
164,303 |
Income before income
taxes |
|
89,357 |
|
|
50,721 |
|
|
278,182 |
|
|
55,366 |
|
|
45,470 |
Income tax expense |
|
20,706 |
|
|
12,060 |
|
|
60,931 |
|
|
13,948 |
|
|
11,311 |
Net
income |
|
68,651 |
|
|
38,661 |
|
|
217,251 |
|
|
41,418 |
|
|
34,159 |
Preferred stock
dividends |
|
4,312 |
|
|
4,313 |
|
|
4,312 |
|
|
4,313 |
|
|
4,312 |
Net income available
to common shareholders |
$ |
64,339 |
|
$ |
34,348 |
|
$ |
212,939 |
|
$ |
37,105 |
|
$ |
29,847 |
TEXAS
CAPITAL BANCSHARES, INC. |
TAXABLE
EQUIVALENT NET INTEREST INCOME ANALYSIS
(UNAUDITED)(1) |
(dollars in
thousands) |
|
2nd Quarter 2023 |
|
1st Quarter 2023 |
|
4th Quarter 2022 |
|
3rd Quarter 2022 |
|
2nd Quarter 2022 |
|
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) |
$ |
4,306,881 |
$ |
27,478 |
2.36 |
% |
|
$ |
4,060,456 |
$ |
25,292 |
2.31 |
% |
|
$ |
3,385,372 |
$ |
16,210 |
1.70 |
% |
|
$ |
3,509,044 |
$ |
15,002 |
1.58 |
% |
|
$ |
3,543,576 |
$ |
15,065 |
1.60 |
% |
Interest bearing cash and cash
equivalents |
|
3,286,091 |
|
41,571 |
5.07 |
% |
|
|
5,541,341 |
|
62,436 |
4.57 |
% |
|
|
6,158,769 |
|
59,710 |
3.85 |
% |
|
|
4,453,806 |
|
24,596 |
2.19 |
% |
|
|
4,747,377 |
|
9,394 |
0.79 |
% |
Loans held for sale |
|
28,414 |
|
599 |
8.46 |
% |
|
|
43,472 |
|
938 |
8.75 |
% |
|
|
1,053,157 |
|
12,064 |
4.54 |
% |
|
|
1,029,983 |
|
11,316 |
4.36 |
% |
|
|
8,123 |
|
62 |
3.07 |
% |
Loans held for investment,
mortgage finance |
|
4,376,235 |
|
36,198 |
3.32 |
% |
|
|
3,286,804 |
|
28,528 |
3.52 |
% |
|
|
4,279,367 |
|
43,708 |
4.05 |
% |
|
|
5,287,531 |
|
52,756 |
3.96 |
% |
|
|
5,858,599 |
|
49,914 |
3.42 |
% |
Loans held for
investment(3) |
|
16,217,314 |
|
296,183 |
7.33 |
% |
|
|
15,598,854 |
|
268,131 |
6.97 |
% |
|
|
15,105,083 |
|
239,746 |
6.30 |
% |
|
|
16,843,922 |
|
218,513 |
5.15 |
% |
|
|
16,616,234 |
|
168,409 |
4.07 |
% |
Less: Allowance for credit
losses on loans |
|
261,027 |
|
— |
— |
|
|
|
252,727 |
|
— |
— |
|
|
|
233,246 |
|
— |
— |
|
|
|
229,005 |
|
— |
— |
|
|
|
211,385 |
|
— |
— |
|
Loans held for investment,
net |
|
20,332,522 |
|
332,381 |
6.56 |
% |
|
|
18,632,931 |
|
296,659 |
6.46 |
% |
|
|
19,151,204 |
|
283,454 |
5.87 |
% |
|
|
21,902,448 |
|
271,269 |
4.91 |
% |
|
|
22,263,448 |
|
218,323 |
3.93 |
% |
Total earning assets |
|
27,953,908 |
|
402,029 |
5.69 |
% |
|
|
28,278,200 |
|
385,325 |
5.45 |
% |
|
|
29,748,502 |
|
371,438 |
4.89 |
% |
|
|
30,895,281 |
|
322,183 |
4.10 |
% |
|
|
30,562,524 |
|
242,844 |
3.16 |
% |
Cash and other assets |
|
1,049,145 |
|
|
|
|
1,041,745 |
|
|
|
|
989,900 |
|
|
|
|
918,630 |
|
|
|
|
870,396 |
|
|
Total
assets |
$ |
29,003,053 |
|
|
|
$ |
29,319,945 |
|
|
|
$ |
30,738,402 |
|
|
|
$ |
31,813,911 |
|
|
|
$ |
31,432,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction deposits |
$ |
1,345,742 |
$ |
9,468 |
2.82 |
% |
|
$ |
776,500 |
$ |
3,853 |
2.01 |
% |
|
$ |
1,105,466 |
$ |
4,977 |
1.79 |
% |
|
$ |
1,444,964 |
$ |
5,239 |
1.44 |
% |
|
$ |
1,671,729 |
$ |
3,920 |
0.94 |
% |
Savings deposits |
|
10,590,558 |
|
114,275 |
4.33 |
% |
|
|
11,195,402 |
|
105,707 |
3.83 |
% |
|
|
10,563,049 |
|
80,801 |
3.03 |
% |
|
|
10,249,387 |
|
46,555 |
1.80 |
% |
|
|
8,696,819 |
|
15,462 |
0.71 |
% |
Time deposits |
|
1,531,922 |
|
13,648 |
3.57 |
% |
|
|
1,430,657 |
|
10,534 |
2.99 |
% |
|
|
1,625,857 |
|
10,372 |
2.53 |
% |
|
|
1,701,238 |
|
8,523 |
1.99 |
% |
|
|
877,399 |
|
1,184 |
0.54 |
% |
Total interest bearing
deposits |
|
13,468,222 |
|
137,391 |
4.09 |
% |
|
|
13,402,559 |
|
120,094 |
3.63 |
% |
|
|
13,294,372 |
|
96,150 |
2.87 |
% |
|
|
13,395,589 |
|
60,317 |
1.79 |
% |
|
|
11,245,947 |
|
20,566 |
0.73 |
% |
Short-term borrowings |
|
1,397,253 |
|
18,253 |
5.24 |
% |
|
|
1,242,881 |
|
14,744 |
4.81 |
% |
|
|
1,387,660 |
|
13,449 |
3.84 |
% |
|
|
1,931,537 |
|
10,011 |
2.06 |
% |
|
|
2,232,119 |
|
4,859 |
0.87 |
% |
Long-term debt |
|
883,871 |
|
14,282 |
6.48 |
% |
|
|
931,796 |
|
14,983 |
6.52 |
% |
|
|
931,107 |
|
14,088 |
6.00 |
% |
|
|
921,707 |
|
12,663 |
5.45 |
% |
|
|
929,616 |
|
11,393 |
4.92 |
% |
Total interest bearing
liabilities |
|
15,749,346 |
|
169,926 |
4.33 |
% |
|
|
15,577,236 |
|
149,821 |
3.90 |
% |
|
|
15,613,139 |
|
123,687 |
3.14 |
% |
|
|
16,248,833 |
|
82,991 |
2.03 |
% |
|
|
14,407,682 |
|
36,818 |
1.02 |
% |
Non-interest bearing
deposits |
|
9,749,105 |
|
|
|
|
10,253,731 |
|
|
|
|
11,642,969 |
|
|
|
|
12,214,531 |
|
|
|
|
13,747,876 |
|
|
Other liabilities |
|
389,155 |
|
|
|
|
436,621 |
|
|
|
|
426,543 |
|
|
|
|
305,554 |
|
|
|
|
227,701 |
|
|
Stockholders’ equity |
|
3,115,447 |
|
|
|
|
3,052,357 |
|
|
|
|
3,055,751 |
|
|
|
|
3,044,993 |
|
|
|
|
3,049,661 |
|
|
Total liabilities and
stockholders’ equity |
$ |
29,003,053 |
|
|
|
$ |
29,319,945 |
|
|
|
$ |
30,738,402 |
|
|
|
$ |
31,813,911 |
|
|
|
$ |
31,432,920 |
|
|
Net interest
income |
|
$ |
232,103 |
|
|
|
$ |
235,504 |
|
|
|
$ |
247,751 |
|
|
|
$ |
239,192 |
|
|
|
$ |
206,026 |
|
Net interest
margin |
|
|
3.29 |
% |
|
|
|
3.33 |
% |
|
|
|
3.26 |
% |
|
|
|
3.05 |
% |
|
|
|
2.68 |
% |
|
(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. |
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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