Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the fourth quarter and full year of 2012.

  • Net income increased 59% for the year, 3% decrease on a linked quarter basis (4% increase excluding litigation settlement) and 22% increase for the fourth quarter of 2012 as compared to the same quarter of 2011
  • EPS increased 51% for the year, 5% decrease on a linked quarter basis (3% increase excluding litigation settlement) and 13% increase for the fourth quarter of 2012 as compared to the same quarter of 2011
  • Results for the fourth quarter and 2012 include a pre-tax charge of $4.0 million, or $0.06 per share after-tax, related to settlement of litigation
  • Demand deposits increased 45% and total deposits increased 34% from 2011; linked quarter increases of 20% and 11%, respectively
  • Loans held for investment increased 22% and total loans increased 30% from 2011, reflecting linked quarter increases of 4% and 6%, respectively

"I am very pleased with the operating results we achieved both for this quarter and for the full year," said George Jones, CEO. "Our growth continues, and we are confident in our ability to continue to generate industry-leading results."

FINANCIAL SUMMARY

      

(dollars and shares in thousands)

 
2012   2011   % Change
ANNUAL OPERATING RESULTS(1)
Net Income $ 120,709 $ 76,102 59 %
Diluted EPS $ 3.01 $ 1.99 51 %
ROA 1.35 % 1.12 %
ROE 16.93 % 13.39 %
Diluted Shares 40,166 38,333
 
QUARTERLY OPERATING RESULTS(1)
Net Income $ 31,435 $ 25,745 22 %
Diluted EPS $ .76 $ .67 13 %
ROA 1.27 % 1.28 %
ROE 15.35 % 17.05 %
Diluted Shares 41,505 38,609
 
BALANCE SHEET(1)
Total Assets $ 10,540,542 $ 8,137,225 30 %
Demand Deposits 2,535,375 1,751,944 45 %
Total Deposits 7,440,804 5,556,257 34 %
Loans Held for Investment 6,785,535 5,572,371 22 %
Loans Held for Sale 3,175,272 2,080,081 53 %
Total Loans 9,960,807 7,652,452 30 %
Stockholders' Equity 836,242 616,331 36 %

(1) Operating results, assets and loans are reporting from continuing operations

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income from continuing operations of $120.7 million for the year ended December 31, 2012 compared to $76.1 million in 2011. For the fourth quarter of 2012, we earned $31.4 million compared to $25.7 million for the same period in 2011. On a fully diluted basis, earnings per common share from continuing operations were $3.01 for the year ended December 31, 2012, compared to $1.99 for 2011. For the fourth quarter of 2012, diluted earnings per share was $.76 compared to $.67 for the same period in 2011. Results for the fourth quarter of 2012 include a charge of $4.0 million related to settlement of litigation. The discussion below relates only to continuing operations.

Return on average equity was 16.93 percent and return on average assets was 1.35 percent for the year ended December 31, 2012, compared to 13.39 percent and 1.12 percent, respectively, 2011. Return on average equity was 15.35 percent and return on average assets was 1.27 percent for the fourth quarter of 2012, compared to 17.05 percent and 1.28 percent, respectively, for the fourth quarter of 2011.

Net interest income was $101.2 million for the fourth quarter of 2012, compared to $96.9 million in the third quarter of 2012 and $88.1 million for the fourth quarter of 2011. For 2012, net interest income reached $376.9 million compared to $302.9 million in 2011. The net interest margin in the fourth quarter of 2012 was 4.27 percent, a 33 basis point decrease from the fourth quarter of 2011 and a 9 basis point decrease from the third quarter of 2012. The year-to-date and quarter-to-date year over year decreases in net interest margin are due to the growth in loans with lower yields with an offsetting benefit of the reduction in funding costs. The growth in loans more than compensated for the reduction in yields and produced the strong growth in net interest income.

Average loans held for investment for the year ended December 31, 2012 were $6.1 billion, an increase of $1.1 billion, or 22 percent, from 2011. Average loans held for sale for the year ended December 31, 2012 were $2.3 billion, an increase of $1.1 billion, or 90 percent. Average loans held for investment for the fourth quarter of 2012 were $6.7 billion, an increase of $1.3 billion, or 23 percent, from the fourth quarter of 2011 and an increase of $349.6 million, or 6 percent, from the third quarter of 2012. Average loans held for sale for the fourth quarter of 2012 increased $564.2 million to $2.7 billion compared to the fourth quarter of 2011 and increased $226.1 million from the third quarter of 2012.

Average total deposits for the fourth quarter of 2012 increased $1.4 billion from the fourth quarter of 2011 and increased $358.4 million from the third quarter of 2012. For the same periods, the average balance of demand deposits increased $697.6 million, or 42 percent, to $2.4 billion from $1.7 billion during the fourth quarter of 2011 and increased $346.1 million, or 17 percent, from the third quarter of 2012.

In the fourth quarter of 2012, we experienced decreases in the levels of non-performing assets. Credit costs, including the provision for credit losses and valuation charges related to other real estate owned ("OREO") totaled $5.5 million in the fourth quarter of 2012 compared to $7.1 million in the fourth quarter of 2011 and $3.1 million in the third quarter of 2012. We recorded a $4.5 million provision for credit losses in the fourth quarter of 2012 compared to $6.0 million in the fourth quarter of 2011 and $3.0 million in the third quarter of 2012. For 2012, the total provision for loan losses was $11.5 million, a decrease of 60 percent from $28.5 million in 2011. At December 31, 2012, the combined reserve decreased to 1.15 percent of loans held for investment as compared to 1.31 percent at December 31, 2011 and 1.18 percent at September 30, 2012. In management's opinion, the reserve is appropriate and is derived from consistent application of the methodology for establishing the adequacy of reserves for Texas Capital Bank's loan portfolio. In the fourth quarter of 2012, net charge-offs were $3.5 million compared to net charge-offs of $3.4 million in the fourth quarter of 2011 and net charge-offs of $1.2 million in the third quarter of 2012. For 2012, net charge-offs were $6.1 million, 0.10 percent of average loans held for investment, compared to $29.2 million and a ratio of 0.58 percent in 2011. Non-accrual loans were $55.8 million, or .82 percent of loans held for investment at the end of the fourth quarter of 2012, $54.6 million, or .98 percent, at the end of the fourth quarter of 2011 and $57.3 million, or .87 percent, at the end of the third quarter 2012. At December 31, 2012, total OREO was $16.0 million compared to $34.1 million at the end of the fourth quarter of 2011, and $19.1 million at the end of the third quarter of 2012. The OREO balance of $16.0 million at December 31, 2012 is stated net of a $5.6 million valuation allowance. The valuation charge for OREO reflected in non-interest expense was $955,000 in the fourth quarter of 2012 compared to $1.1 million in the fourth quarter of 2011 and $64,000 in the third quarter of 2012.

Non-interest income increased $3.8 million during the fourth quarter of 2012, or 42 percent, compared to the same period of 2011 primarily related to a $1.6 million increase in brokered loan fees earned in the mortgage warehouse lending division and $1.9 million in other income which includes swap fees and gain on sales of OREO.

Non-interest expense for the fourth quarter of 2012 increased $9.7 million, or 19 percent, to $60.1 million from $50.4 million in the fourth quarter of 2011. The increase is primarily related to a $4.5 million increase in salaries and employee benefits to $31.2 million from $26.7 million, which was primarily due to general business growth and costs of performance-based incentives resulting from the increase in stock price. Non-interest expense for the fourth quarter of 2012 includes a pre-tax charge of $4.0 million ($0.06 per share after tax) for settlement of the judgment of $65.5 million against us in Oklahoma district court. In the settlement, all litigation against us in the Oklahoma courts and actions by us against the plaintiff in the Texas courts will be dismissed with prejudice. Because the settlement was within policy limits of insurance coverage maintained by the Company, we have claims against our insurance carrier for more than the charge, and we intend to pursue those claims aggressively. Legal and professional expense increased $958,000 from the fourth quarter of 2011 primarily due to general business growth. Allowance and other carrying costs for OREO expense decreased $1.0 million to $1.4 million, which included a $955,000 valuation expense during the fourth quarter of 2012. Of the $955,000 valuation expense in the fourth quarter of 2012, $23,000 related to direct write-downs and $932,000 related to increasing the valuation allowance, compared to $1.1 million in valuation expense in the fourth quarter 2011, $691,000 of which related to direct write-downs and $400,000 related to increasing the valuation allowance.

Stockholders' equity increased by 36 percent from $616.3 million at December 31, 2011 to $836.2 million at December 31, 2012, primarily related to the offering of 2.3 million common shares for net proceeds of $87 million in the third quarter of 2012 and retention of net income. In addition to the equity offering, we also completed a subordinated debt offering in the third quarter of 2012 of $111 million, increasing our total regulatory capital by approximately $198 million. The Bank is well capitalized under regulatory guidelines and at December 31, 2012, our ratio of tangible common equity to total tangible assets was 7.7 percent.

ABOUT TEXAS CAPITAL BANCSHARES, INC.

Texas Capital Bancshares, Inc. (NASDAQ: TCBI) is the parent company of Texas Capital Bank, a commercial bank that delivers highly personalized financial services to businesses and private clients. Headquartered in Dallas, the Bank has full-service locations in Austin, Dallas, Fort Worth, Houston and San Antonio.

This news release may be deemed to include forward-looking statements which are based on Texas Capital's current estimates or expectations of future events or future results. Texas Capital is under no obligation, and expressly disclaims such obligation, to update, alter or revise its forward-looking statements, whether as a result of new information, future events, or otherwise. A number of factors, many of which are beyond Texas Capital's control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risk of adverse impacts from general economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. These and other factors that could cause results to differ materially from those described in the forward-looking statements can be found in the prospectus supplements, the Annual Report on Form 10-K and other filings made by Texas Capital with the Securities and Exchange Commission (SEC).

TEXAS CAPITAL BANCSHARES, INC.
         
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter
2012   2012   2012   2012   2011
CONSOLIDATED STATEMENT OF INCOME
Interest income $ 107,769 $ 102,011 $ 95,546 $ 93,131 $ 92,967
Interest expense   6,614       5,156       4,906       4,902       4,820  
Net interest income 101,155 96,855 90,640 88,229 88,147
Provision for credit losses   4,500       3,000       1,000       3,000       6,000  
Net interest income after provision for credit losses 96,655 93,855 89,640 85,229 82,147
Non-interest income 12,836 10,552 10,462 9,190 8,994
Non-interest expense   60,074       53,521       53,973       52,276       50,353  
Income from continuing operations before income taxes

49,417

50,886

46,129

42,143

40,788

Income tax expense   17,982       18,316       16,506       15,062       15,043  
Income from continuing operations 31,435 32,570 29,623 27,081 25,745

Income (loss) from discontinued operations (after-tax)

 

(6

)

   

(34

)

   

(1

)

   

4

     

(5

)

Net income $ 31,429     $ 32,536     $ 29,622     $ 27,085     $ 25,740  
Diluted EPS from continuing operations $ .76 $ .80 $ .76 $ .70 $ .67
Diluted EPS $ .76 $ .80 $ .76 $ .70 $ .67
 
Diluted shares 41,505,026 40,755,733 39,141,544 38,914,241 38,609,094
 
CONSOLIDATED BALANCE SHEET DATA
Total assets $ 10,540,542 $ 9,881,362 $ 9,144,360 $ 8,559,917 $ 8,137,225
Loans held for investment 6,785,535 6,549,089 6,234,692 5,792,349 5,572,371
Loans held for sale 3,175,272 2,818,622 2,408,032 2,255,281 2,080,081
Securities 100,195 107,288 114,964 123,828 143,710
Demand deposits 2,535,375 2,114,279 2,019,473 1,751,443 1,751,944
Total deposits 7,440,804 6,717,579 6,660,290 6,063,558 5,556,257
Other borrowings 1,947,161 2,046,169 1,609,039 1,657,728 1,768,116
Subordinated notes 111,000 111,000 - - -
Long-term debt 113,406 113,406 113,406 113,406 113,406
Stockholders' equity 836,242 802,406 680,705 647,341 616,331
 
End of period shares outstanding 40,727,579 40,580,283 38,114,012 37,912,054 37,666,291
Book value (excluding securities gains/losses) $ 20.45 $ 19.68 $ 17.75 $ 16.96 $ 16.24
Tangible book value (excluding securities gains/losses)

$

19.96

$

19.18

$

17.22

$

16.42

$

15.69

 
SELECTED FINANCIAL RATIOS
Net interest margin 4.27 % 4.36 % 4.49 % 4.54 % 4.60 %
Return on average assets 1.27 % 1.40 % 1.40 % 1.33 % 1.28 %
Return on average equity 15.35 % 17.27 % 18.08 % 17.36 % 17.05 %
Non-interest income to earning assets .54 % .47 % .52 % .47 % .47 %
Efficiency ratio 52.7 % 49.8 % 53.4 % 53.7 % 51.8 %
Efficiency ratio (excluding OREO valuation/write-down)

51.9

%

49.8

%

50.3

%

50.8

%

50.7

%

Non-interest expense to earning assets 2.53 % 2.40 % 2.67 % 2.69 % 2.62 %
Non-interest expense to earning assets (excluding OREO valuation charge)

2.49

%

2.40

%

2.52

%

2.55

%

2.57

%

Tangible common equity to total tangible assets 7.7 % 7.9 % 7.2 % 7.3 % 7.3 %
Tier 1 capital ratio 10.1 % 10.4 % 9.5 % 9.5 % 9.6 %
Total capital ratio 12.1 % 12.6 % 10.5 % 10.4 % 10.6 %
Tier 1 leverage ratio (1) 9.4 % 9.6 % 9.0 % 8.9 % 8.8 %

(1) Non-GAAP measure equal to end of period shareholders' equity less goodwill and intangible assets divided by end of period total assets less goodwill and intangible assets.

     
 
TEXAS CAPITAL BANCSHARES, INC.
 
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
December 31, December 31, %
2012   2011   Change
Assets
Cash and due from banks $ 111,938 $ 79,248 41 %
Interest-bearing deposits 94,410 31,310 201 %
Securities, available-for-sale 100,195 143,710 (30 )%
Loans held for sale 3,175,272 2,080,081 53 %
Loans held for sale from discontinued operations 302 393 (23 )%
Loans held for investment (net of unearned income) 6,785,535 5,572,371 22 %
Less: Allowance for loan losses   74,337       70,295     5 %
Loans held for investment, net 6,711,198 5,502,076 22 %
Premises and equipment, net 11,445 11,457 (0 )%
Accrued interest receivable and other assets 316,201 268,863 18 %
Goodwill and intangibles, net   19,883       20,480     (3 )%
Total assets $ 10,540,844     $ 8,137,618     30 %
 
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing $ 2,535,375 $ 1,751,944 45 %
Interest bearing 4,576,120 3,324,040 38 %
Interest bearing in foreign branches   329,309       480,273     (31 )%
Total deposits 7,440,804 5,556,257 34 %
 
Accrued interest payable 650 599 9 %
Other liabilities 91,581 82,909 10 %
Federal funds purchased 273,179 412,249 (34 )%
Repurchase agreements 23,936 23,801 1 %
Other borrowings 1,650,046 1,332,066 24 %
Subordinated notes 111,000 - 100 %
Trust preferred subordinated debentures   113,406       113,406     -  
Total liabilities 9,704,602 7,521,287 29 %
 
Stockholders' equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - - -
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 40,727,996 and 37,666,708 at December 31, 2012 and 2011, respectively

407

376

8

%

Additional paid-in capital 450,116 349,458 29 %
Retained earnings 382,455 261,783 46 %
Treasury stock (shares at cost: 417 at December 31, 2012 and 2011)

(8

)

(8

)

-

Accumulated other comprehensive income, net of taxes   3,272       4,722     (31 )%
Total stockholders' equity   836,242       616,331     36 %
Total liabilities and stockholders' equity $ 10,540,844     $ 8,137,618     30 %
       
 
TEXAS CAPITAL BANCSHARES, INC.
 
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
Three Months Ended Year Ended
December 31 December 31
2012   2011   2012   2011
Interest income
Interest and fees on loans $ 106,653 $ 91,512 $ 393,548 $ 314,753
Securities 1,053 1,408 4,688 6,458
Federal funds sold 6 1 13 37
Deposits in other banks   57       46       208       352  
Total interest income 107,769 92,967 398,457 321,600
Interest expense
Deposits 3,312 3,471 13,644 14,950
Federal funds purchased 190 273 979 602
Repurchase agreements 3 4 13 10
Other borrowings 615 404 2,149 528
Subordinated notes 1,829 - 2,037 -
Trust preferred subordinated debentures   665       668       2,756       2,573  
Total interest expense   6,614       4,820       21,578       18,663  
Net interest income 101,155 88,147 376,879 302,937
Provision for credit losses   4,500       6,000       11,500       28,500  
Net interest income after provision for credit losses 96,655 82,147 365,379 274,437
Non-interest income
Service charges on deposit accounts 1,693 1,504 6,605 6,480
Trust fee income 1,260 1,108 4,822 4,219
Bank owned life insurance (BOLI) income 510 500 2,168 2,095
Brokered loan fees 4,978 3,408 17,596 11,335
Other   4,395       2,474       11,849       8,103  
Total non-interest income 12,836 8,994 43,040 32,232
Non-interest expense
Salaries and employee benefits 31,198 26,658 121,456 100,535
Net occupancy expense 3,916 3,537 14,852 13,657
Marketing 3,980 3,798 13,449 11,109
Legal and professional 5,320 4,362 17,557 14,996
Communications and technology 3,070 2,468 11,158 9,608
FDIC insurance assessment 1,071 1,595 5,568 7,543
Allowance and other carrying costs for OREO 1,369 2,383 9,075 9,586
Litigation settlement expense 4,000 - 4,000 -
Other   6,150       5,552       22,729       21,167  
Total non-interest expense   60,074       50,353       219,844       188,201  
Income from continuing operations before income taxes 49,417 40,788 188,575 118,468
Income tax expense   17,982       15,043       67,866       42,366  
Income from continuing operations 31,435 25,745 120,709 76,102
Loss from discontinued operations (after-tax)   (6 )     (5 )     (37 )     (126 )
Net income $ 31,429     $ 25,740     $ 120,672     $ 75,976  
 
Basic earnings per common share:
Income from continuing operations $ .78 $ .69 $ 3.09 $ 2.04
Net income $ .78 $ .69 $ 3.09 $ 2.03
 
Diluted earnings per common share:
Income from continuing operations $ .76 $ .67 $ 3.01 $ 1.99
Net income $ .76 $ .67 $ 3.00 $ 1.98
         
 
TEXAS CAPITAL BANCSHARES, INC.
 
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)

4th Quarter

3rd Quarter

2nd Quarter

1st Quarter

4th Quarter

2012   2012   2012   2012   2011
Reserve for loan losses:
Beginning balance $ 73,722 $ 72,404 $ 71,992 $ 70,295 $ 67,897
Loans charged-off:
Commercial 4,044 1,154 1,048 462 1,348
Real estate - construction - - - - -
Real estate - term - 284 56 559 2,438
Consumer - 49 - - -
Leases   34       49       26       95       238  
Total 4,078 1,536 1,130 1,116 4,024
Recoveries:
Commercial 350 132 191 159 390
Real estate - construction - 10 - - -
Real estate - term 226 130 348 108 45
Consumer 7 18 3 5 4
Leases   21       16       55       16       171  
Total recoveries   604       306       597       288       610  
Net charge-offs 3,474 1,230 533 828 3,414
Provision for loan losses   4,089       2,548       945       2,525       5,812  
Ending balance $ 74,337     $ 73,722     $ 72,404     $ 71,992     $ 70,295  
 
Reserve for off-balance sheet credit losses:
Beginning balance $ 3,444 $ 2,992 $ 2,937 $ 2,462 $ 2,274
Provision for off-balance sheet credit losses   411       452       55       475       188  
Ending balance $ 3,855     $ 3,444     $ 2,992     $ 2,937     $ 2,462  
 
Total reserves for credit losses $ 78,192 $ 77,166 $ 75,396 $ 74,929 $ 72,757
 
Total provision for credit losses $ 4,500 $ 3,000 $ 1,000 $ 3,000 $ 6,000
 
Reserve to loans held for investment(2) 1.10 % 1.13 % 1.16 % 1.24 % 1.26 %
Reserve to average loans held for investment(2) 1.12 % 1.16 % 1.22 % 1.27 % 1.30 %
Net charge-offs to average loans(1)(2) .21 % .08 % .04 % .06 % .25 %
Net charge-offs to average loans for last twelve months(1)(2) .10 % .10 % .20 % .40 % .58 %
Total provision for credit losses to average loans(1)(2) .27 % .19 % .07 % .21 % .44 %
Combined reserves for credit losses to loans held for investment(2)

1.15

%

1.18

%

1.21

%

1.29

%

1.31

%

 
Non-performing assets (NPAs):
Non-accrual loans $ 55,833 $ 57,275 $ 56,433 $ 50,160 $ 54,580
Other real estate owned (OREO)(4)   15,991       19,079       27,882       32,601       34,077  
Total $ 71,824     $ 76,354     $ 84,315     $ 82,761     $ 88,657  
 
Non-accrual loans to loans(2) .82 % .87 % .91 % .87 % .98 %
Total NPAs to loans plus OREO(2) 1.06 % 1.16 % 1.35 % 1.42 % 1.58 %
Total NPAs to earning assets .71 % .81 % .97 % 1.01 % 1.14 %
Reserve for loan losses to non-accrual loans 1.3x 1.3x 1.3x 1.4x 1.3x
 
Restructured loans $ 10,407 $ 9,145 $ 13,943 $ 12,582 $ 25,104
Loans past due 90 days and still accruing(3) $ 3,674 $ 3,622 $ 4,421 $ 5,941 $ 5,467
 
Loans past due 90 days to loans(2) .05 % .06 % .07 % .10 % .10 %

(1) Interim period ratios are annualized.
(2) Excludes loans held for sale.
(3) At December 31, 2012, loans past due 90 days and still accruing includes premium finance loans of $2.8 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.
(4) At December 31, 2012, OREO balance is net of $5.6 million valuation allowance.

         
 
TEXAS CAPITAL BANCSHARES, INC.
 
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in thousands)
 
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter
2012   2012   2012   2012   2011
Interest income
Interest and fees on loans $ 106,653 $ 100,830 $ 94,291 $ 91,774 $ 91,512
Securities 1,053 1,125 1,203 1,307 1,408
Federal funds sold 6 2 4 1 1
Deposits in other banks   57       54       48       49     46  
Total interest income 107,769 102,011 95,546 93,131 92,967
Interest expense
Deposits 3,312 3,378 3,482 3,472 3,471
Federal funds purchased 190 268 240 281 273
Repurchase agreements 3 3 4 3 4
Other borrowings 615 607 492 435 404
Subordinated notes 1,829 208 - - -
Trust preferred subordinated debentures   665       692       688       711     668  
Total interest expense   6,614       5,156       4,906       4,902     4,820  
Net interest income 101,155 96,855 90,640 88,229 88,147
Provision for credit losses   4,500       3,000       1,000       3,000     6,000  
Net interest income after provision for credit losses 96,655 93,855 89,640 85,229 82,147
Non-interest income
Service charges on deposit accounts 1,693 1,684 1,624 1,604 1,504
Trust fee income 1,260 1,216 1,232 1,114 1,108
Bank owned life insurance (BOLI) income 510 549 588 521 500
Brokered loan fees 4,978 4,839 4,128 3,651 3,408
Other   4,395       2,264       2,890       2,300     2,474  
Total non-interest income 12,836 10,552 10,462 9,190 8,994
Non-interest expense
Salaries and employee benefits 31,198 31,009 30,230 29,019 26,658
Net occupancy expense 3,916 3,653 3,679 3,604 3,537
Marketing 3,980 3,472 3,174 2,823 3,798
Legal and professional 5,320 4,916 3,330 3,991 4,362
Communications and technology 3,070 2,885 2,720 2,483 2,468
FDIC insurance assessment 1,071 1,332 1,596 1,569 1,595
Allowance and other carrying costs for OREO 1,369 552 3,812 3,342 2,383
Litigation settlement expense 4,000 - - - -
Other   6,150       5,702       5,432       5,445     5,552  
Total non-interest expense   60,074       53,521       53,973       52,276     50,353  
Income from continuing operations before income taxes

49,417

50,886

46,129

42,143

40,788

Income tax expense   17,982       18,316       16,506       15,062     15,043  
Income from continuing operations 31,435 32,570 29,623 27,081 25,745
Income (loss) from discontinued operations (after-tax)  

(6

)

   

(34

)

   

(1

)

   

4

   

(5

)

Net income $ 31,429     $ 32,536     $ 29,622     $ 27,085   $ 25,740  
                             
 
TEXAS CAPITAL BANCSHARES, INC.
 
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
Continuing Operations
(Dollars in thousands)
 
4th Quarter 2012 3rd Quarter 2012 2nd Quarter 2012 1st Quarter 2012 4th Quarter 2011
Average

Balance

  Revenue/

Expense (1)

   Yield/

Rate

Average

Balance

  Revenue/

Expense (1)

   Yield/

Rate

Average

Balance

  Revenue/

Expense (1)

   Yield/

Rate

Average

Balance

  Revenue/

Expense (1)

   Yield/

Rate

Average

Balance

  Revenue/

Expense (1)

   Yield/

Rate

Assets
Securities - Taxable $ 78,182 $ 811 4.13 % $ 84,583 $ 881 4.14 % $ 91,623 $ 948 4.16 % $ 109,003 $ 1,041 3.84 % $ 109,761 $ 1,126 4.07 %
Securities - Non-taxable(2) 25,301 372 5.85 % 25,717 376 5.82 % 26,817 393 5.89 % 28,506 409 5.77 % 30,065 434 5.73 %
Federal funds sold 21,617 6 0.11 % 9,360 2 0.09 % 8,077 4 0.20 % 6,848 1 0.06 % 8,505 1 0.05 %
Deposits in other banks 69,886 57 0.32 % 64,859 54 0.33 % 60,416 48 0.32 % 49,470 49 0.41 % 42,644 46 0.43 %
Loans held for sale 2,658,092 26,440 3.96 % 2,432,027 24,433 4.00 % 2,062,449 21,087 4.11 % 2,036,622 21,315 4.21 % 2,093,883 22,332 4.23 %
Loans held for investment 6,662,817 80,213 4.79 % 6,313,263 76,397 4.81 % 5,950,913 73,204 4.95 % 5,660,993 70,459 5.01 % 5,395,253 69,180 5.09 %
Less reserve for loan

losses

  73,912    

-

 

-

    72,373    

-

 

-

    71,779    

-

 

-

    70,261    

-

 

-

    67,214    

-

 

-

 
Loans, net of reserve   9,246,997     106,653   4.59 %   8,672,917     100,830   4.63 %   7,941,583     94,291   4.78 %   7,627,354     91,774   4.84 %   7,421,922     91,512   4.89 %
Total earning assets 9,441,983 107,899 4.55 % 8,857,436 102,143 4.59 % 8,128,516 95,684 4.73 % 7,821,181 93,274 4.80 % 7,612,897 93,119 4.85 %
Cash and other assets   427,299   399,428   394,086   388,009   382,577
Total assets $ 9,869,282 $ 9,256,864 $ 8,522,602 $ 8,209,190 $ 7,995,474
 
Liabilities and Stockholders' Equity
Transaction deposits $ 941,947 $ 244 0.10 % $ 803,776 $ 247 0.12 % $ 694,463 $ 198 0.11 % $ 565,319 $ 140 0.10 % $ 429,980 $ 33 0.03 %
Savings deposits 2,933,904 2,299 0.31 % 2,922,852 2,185 0.30 % 2,664,598 2,107 0.32 % 2,535,412 2,083 0.33 % 2,422,465 2,062 0.34 %
Time deposits 423,685 448 0.42 % 491,783 576 0.47 % 584,581 831 0.57 % 624,823 920 0.59 % 534,441 927 0.69 %
Deposits in foreign branches   362,580     321   0.35 %   431,412     370   0.34 %   444,478     346   0.31 %   409,422     329   0.32 %   578,728     449   0.31 %
Total interest bearing deposits 4,662,116

3,312

0.28

%

4,649,823

3,378

0.29

%

4,388,120

3,482

0.32

%

4,134,976

3,472

0.34

%

3,965,614

3,471

0.35

%

Other borrowings 1,725,129 808 0.19 % 1,639,953 878 0.21 % 1,428,575 736 0.21 % 1,554,716 719 0.19 % 1,588,198 681 0.17 %
Subordinated notes 111,000 1,829 6.56 % 12,065 208 6.86 % - - - - - - - - -
Trust preferred subordinated debentures   113,406    

665

 

2.33

%

  113,406    

692

 

2.43

%

  113,406    

688

 

2.44

%

  113,406    

711

 

2.52

%

  113,406    

668

 

2.34

%

Total interest bearing liabilities 6,611,651

6,614

0.40

%

6,415,247

5,156

0.32

%

5,930,101

4,906

0.33

%

5,803,098

4,902

0.34

%

5,667,218

4,820

0.34

%

Demand deposits 2,356,758 2,010,694 1,864,456 1,700,390 1,659,132
Other liabilities 86,308 80,810 69,076 78,108 70,142
Stockholders' equity   814,565   750,113   658,969   627,594   598,982
Total liabilities and stockholders' equity $ 9,869,282 $ 9,256,864 $ 8,522,602 $ 8,209,190 $ 7,995,474
 
Net interest income $ 101,285 $ 96,987 $ 90,778 $ 88,372 $ 88,299
Net interest margin 4.27 % 4.36 % 4.49 % 4.54 % 4.60 %

(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.

Texas Capital Bancshares, Inc.
Media Contact
Heather Worley, 214-932-6827
heather.worley@texascapitalbank.com
or
Investor Contact
Myrna Vance, 214-932-6646
myrna.vance@texascapitalbank.com