• Texas Capital Bancshares, Inc. Announces Operating Results for Q1 2021

    Source: Nasdaq GlobeNewswire / 21 Apr 2021 15:03:01   America/Chicago

    DALLAS, April 21, 2021 (GLOBE NEWSWIRE) -- 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 shares51,070   50,475     %
    ROA0.73 % (0.20)%  
    ROE10.08 % (2.85)%  
    BALANCE SHEET     
    LHS$176,286   $774,064    (77)%
    LHI, mortgage finance9,009,081   7,588,803    19  %
    LHI15,399,174   16,857,579    (9)%
    Total LHI24,408,255   24,446,382    —  %
    Total assets40,054,433   35,879,416    12  %
    Demand deposits15,174,642   9,420,303    61  %
    Total deposits33,391,970   27,134,263    23  %
    Stockholders’ equity3,159,482   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 Quarter4th Quarter3rd Quarter2nd Quarter1st Quarter
     20212020202020202020
    CONSOLIDATED STATEMENTS OF INCOME     
    Interest income$228,412  $255,163 $243,731 $252,010  $306,008  
    Interest expense28,339  32,153 36,162 42,082  77,689  
    Net interest income200,073  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 losses206,073  191,010 177,569 109,928  132,319  
    Non-interest income39,092  42,886 60,348 70,502  11,780  
    Non-interest expense150,316  150,886 165,741 222,352  165,417  
    Income/(loss) before income taxes94,849  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 dividends3,779  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 shares51,069,511  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  
    LHI15,399,174  15,351,451 15,789,958 16,552,203  16,857,579  
    LHI, mortgage finance9,009,081  9,079,409 9,378,104 8,972,626  7,588,803  
    LHS176,286  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 securities3,443,058  3,196,970 1,367,313 234,969  228,784  
    Demand deposits15,174,642  12,740,947 12,339,212 10,835,911  9,420,303  
    Total deposits33,391,970  30,996,589 31,959,487 30,187,695  27,134,263  
    Other borrowings2,515,587  3,111,751 2,908,183 2,895,790  5,195,267  
    Long-term debt664,968  395,896 395,806 395,715  395,625  
    Stockholders’ equity3,159,482  2,871,224 2,800,404 2,734,755  2,772,596  
          
    End of period shares outstanding50,557,767  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 margin2.09 %2.32%2.22%2.30 %2.78 %
    Return on average assets0.73 %0.61%0.59%(0.36)%(0.20)%
    Return on average common equity10.08 %8.50%8.24%(5.48)%(2.85)%
    Non-interest income to average earning assets0.41 %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 assets1.57 %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 110.2 %9.4%9.1%8.8 %9.3 %
    Tier 1 capital12.3 %10.3%9.9%9.7 %10.2 %
    Total capital14.0 %12.1%11.8%11.6 %12.0 %
    Leverage8.3 %7.5%7.6%7.5 %8.5 %
    1. Liquidity assets include Federal funds sold and interest-bearing deposits in other banks.
    2. Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
    3. Non-interest expense divided by the sum of net interest income and non-interest income.
    4. 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, 2021March 31, 2020%
    Change
    Assets   
    Cash and due from banks$215,835   $162,386   33  %
    Interest-bearing deposits11,212,276   9,468,189   18  %
    Federal funds sold and securities purchased under resale agreements—   30,000   (100)%
    Securities, available-for-sale3,443,058   228,784   N/M
    LHS, at fair value176,286   774,064   (77)%
    LHI, mortgage finance9,009,081   7,588,803   19  %
    LHI (net of unearned income)15,399,174   16,857,579   (9)%
    Less: Allowance for credit losses on loans242,484   240,958    %
    LHI, net24,165,771   24,205,424   —  %
    Mortgage servicing rights, net121,096   70,619   71  %
    Premises and equipment, net23,346   29,663   (21)%
    Accrued interest receivable and other assets679,199   892,305   (24)%
    Goodwill and intangibles, net17,566   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 bearing18,217,328   17,713,960    %
    Total deposits33,391,970   27,134,263   23  %
        
    Accrued interest payable5,629   16,969   (67)%
    Other liabilities316,797   364,696   (13)%
    Federal funds purchased and repurchase agreements115,587   295,267   (61)%
    Other borrowings2,400,000   4,900,000   (51)%
    Long-term debt664,968   395,625   68  %
    Total liabilities36,894,951   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, respectively450,000   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, respectively505   504   —  %
    Additional paid-in capital984,207   979,939   —  %
    Retained earnings1,781,215   1,637,392    %
    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’ equity3,159,482   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,
     20212020
    Interest income  
    Interest and fees on loans$215,592  $283,625  
    Investment securities9,887  2,183  
    Federal funds sold and securities purchased under resale agreements1  614  
    Interest-bearing deposits in other banks2,932  19,586  
    Total interest income228,412  306,008  
    Interest expense  
    Deposits20,004  62,174  
    Federal funds purchased75  669  
    Other borrowings2,517  9,582  
    Long-term debt5,743  5,264  
    Total interest expense28,339  77,689  
    Net interest income200,073  228,319  
    Provision for credit losses(6,000) 96,000  
    Net interest income after provision for credit losses206,073  132,319  
    Non-interest income  
    Service charges on deposit accounts4,716  3,293  
    Wealth management and trust fee income2,855  2,467  
    Brokered loan fees9,311  8,015  
    Servicing income9,009  4,746  
    Swap fees526  2,757  
    Net gain/(loss) on sale of LHS5,572  (13,000) 
    Other7,103  3,502  
    Total non-interest income39,092  11,780  
    Non-interest expense  
    Salaries and employee benefits87,522  77,193  
    Net occupancy expense8,274  8,712  
    Marketing1,697  8,522  
    Legal and professional8,277  17,466  
    Communications and technology15,969  13,791  
    FDIC insurance assessment6,613  5,849  
    Servicing-related expenses12,989  16,354  
    Merger-related expenses  7,270  
    Other8,975  10,260  
    Total non-interest expense150,316  165,417  
    Income/(loss) before income taxes94,849  (21,318) 
    Income tax expense/(benefit)22,911  (4,631) 
    Net income/(loss)71,938  (16,687) 
    Preferred stock dividends3,779  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 Quarter4th Quarter3rd Quarter2nd Quarter1st Quarter
     20212020202020202020
    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:     
    Commercial2,451  37,984 2,436 12,287 20,653 
    Energy5,732  33,283 141 62,368 37,730 
    Real estate  180    
    Total charge-offs8,183  71,447 2,577 74,655 58,383 
    Recoveries:     
    Commercial1,050  394 113 513 257 
    Energy715  5,696 880  423 
    Total recoveries1,765  6,090 993 513 680 
    Net charge-offs6,418  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 LHI0.99 %1.04%1.15%1.04%0.99%
    Allowance for credit losses on loans to average LHI1.03 %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 LHI1.06 %1.11%1.21%1.09%1.03%
    1. Interim period ratios are annualized.


    TEXAS CAPITAL BANCSHARES, INC.     
    SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS   
    (dollars in thousands)     
     1st Quarter4th Quarter3rd Quarter2nd Quarter1st Quarter
     20212020202020202020
          
    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 LHI0.40%0.50%0.64%0.68%0.90%
    Total LHI NPAs to LHI plus OREO0.40%0.50%0.64%0.68%0.90%
    Total LHI NPAs to earning assets0.25%0.33%0.43%0.49%0.63%
    Allowance for credit losses on loans to non-accrual loans2.5x2.1x1.8x1.5x1.1x
          
    LHI past due 90 days and still accruing(1)$6,187 $12,541 $15,896 $21,079 $21,274 
    LHI past due 90 days to LHI0.03%0.05%0.06%0.08%0.09%
    LHS non-accrual(2)$ $6,966 $ $ $ 
    LHS past due 90 days and still accruing(3)$16,359 $16,667 $15,631 $10,152 $9,014 
    1. 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.
    2. 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.
    3. 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 Quarter4th Quarter3rd Quarter2nd Quarter1st Quarter
     20212020202020202020
    Interest income     
    Interest and fees on loans$215,592  $242,776 $237,179 $247,595  $283,625  
    Investment securities9,887  9,594 3,674 2,024  2,183  
    Federal funds sold and securities purchased under resale agreements1  1 1 77  614  
    Interest-bearing deposits in other banks2,932  2,792 2,877 2,314  19,586  
    Total interest income228,412  255,163 243,731 252,010  306,008  
    Interest expense     
    Deposits20,004  23,819 27,830 32,294  62,174  
    Federal funds purchased75  110 128 176  669  
    Other borrowings2,517  3,407 3,365 4,569  9,582  
    Long-term debt5,743  4,817 4,839 5,043  5,264  
    Total interest expense28,339  32,153 36,162 42,082  77,689  
    Net interest income200,073  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 losses206,073  191,010 177,569 109,928  132,319  
    Non-interest income     
    Service charges on deposit accounts4,716  3,004 2,864 2,459  3,293  
    Wealth management and trust fee income2,855  2,681 2,502 2,348  2,467  
    Brokered loan fees9,311  12,610 15,034 10,764  8,015  
    Servicing income9,009  8,834 7,329 6,120  4,746  
    Swap fees526  473 484 1,468  2,757  
    Net gain/(loss) on sale of LHS5,572  6,761 25,242 39,023  (13,000) 
    Other7,103  8,523 6,893 8,320  3,502  
    Total non-interest income39,092  42,886 60,348 70,502  11,780  
    Non-interest expense     
    Salaries and employee benefits87,522  78,449 84,096 100,791  77,193  
    Net occupancy expense8,274  8,373 8,736 9,134  8,712  
    Marketing1,697  3,435 3,636 7,988  8,522  
    Legal and professional8,277  12,129 11,207 11,330  17,466  
    Communications and technology15,969  15,405 31,098 42,760  13,791  
    FDIC insurance assessment6,613  6,592 6,374 7,140  5,849  
    Servicing-related expenses12,989  15,867 12,287 20,117  16,354  
    Merger-related expenses    10,486  7,270  
    Other8,975  10,636 8,307 12,606  10,260  
    Total non-interest expense150,316  150,886 165,741 222,352  165,417  
    Income/(loss) before income taxes94,849  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 dividends3,779  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
     Average
    Balance
    Revenue/
    Expense
    Yield/
    Rate
     Average
    Balance
    Revenue/
    Expense
    Yield/
    Rate
     Average
    Balance
    Revenue/
    Expense
    Yield/
    Rate
     Average
    Balance
    Revenue/
    Expense
    Yield/
    Rate
     Average
    Balance
    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 agreements4,605 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 banks11,840,942 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 value243,326 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 loans8,177,759 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 allowance23,380,950 214,138 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 assets38,892,394 229,025 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 assets1,064,679    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 deposits12,889,974 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 deposits2,204,242 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 deposits19,086,182 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 borrowings2,686,398 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 debt464,731 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 liabilities22,237,311 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 deposits14,421,505    13,174,114    12,202,065    10,865,896    10,003,495   
    Other liabilities309,644    303,480    314,500    293,698    270,868   
    Stockholders’ equity2,988,613    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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