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     104  0 Kommentare Texas Capital Bancshares, Inc. Announces Operating Results for Q4 and Full Year 2020

    DALLAS, Jan. 21, 2021 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the fourth quarter and full year of 2020.

    "While 2020 was certainly a challenging year, I am pleased with our strong fourth quarter results," said Larry Helm, Executive Chairman and CEO. "I want to thank our employees for their hard work and commitment to serving our clients during this unprecedented time. Though we are still navigating the pandemic, I am confident that Texas Capital Bank is well positioned for the future due to the actions we took in 2020. Looking ahead, Rob Holmes, our new CEO, officially joins us next week. Under his leadership, I have no doubt that Texas Capital Bank will continue to enhance its level of execution and recruit and develop the best talent, enabling us to drive long term shareholder value."

    • Net income of $60.2 million ($1.14 per share) reported for the fourth quarter of 2020, an increase of $3.1 million on a linked quarter basis and a decrease of $4.2 million from the fourth quarter of 2019.
    • Average mortgage finance loans held for investment ("LHI") increased 5% on a linked quarter basis and 21% from the fourth quarter of 2019.
    • Credit quality improved in the fourth quarter of 2020, reflecting declines in non-performing assets and criticized loans of $40.0 million and $157.1 million, respectively, on a linked quarter basis.
    • Successfully deployed $1.8 billion of excess liquidity into higher yielding investment securities in the fourth quarter of 2020.

    FINANCIAL SUMMARY

    (dollars and shares in thousands) 2020   2019   % Change
    ANNUAL OPERATING RESULTS          
    Net income $ 66,289     $ 312,015     (79 )%
    Net income available to common stockholders $ 56,539     $ 302,265     (81 )%
    Diluted earnings per common share $ 1.12     $ 5.99     (81 )%
    Diluted shares 50,583     50,419     %
    ROA 0.18 %   1.01 %    
    ROE 2.10 %   11.95 %    
    QUARTERLY OPERATING RESULTS          
    Net income $ 60,176     $ 64,420     (7 )%
    Net income available to common stockholders $ 57,739     $ 61,983     (7 )%
    Diluted earnings per common share $ 1.14     $ 1.23     (7 )%
    Diluted common shares 50,794     50,462     1 %
    ROA 0.61 %   0.74 %    
    ROE 8.50 %   9.26 %    
    BALANCE SHEET          
    Loans held for sale ("LHS") $ 283,165     $ 2,577,134     (89 )%
    LHI, mortgage finance 9,079,409     8,169,849     11 %
    LHI 15,351,451     16,476,413     (7 )%
    Total LHI 24,430,860     24,646,262     (1 )%
    Total assets 37,726,096     32,548,069     16 %
    Demand deposits 12,740,947     9,438,459     35 %
    Total deposits 30,996,589     26,478,593     17 %
    Stockholders’ equity 2,871,224     2,801,321     2 %
                     

    DETAILED FINANCIALS

    Texas Capital Bancshares, Inc. reported net income of $66.3 million and net income available to common stockholders of $56.5 million for the year ended December 31, 2020, compared to net income of $312.0 million and net income available to common stockholders of $302.3 million for the year ended December 31, 2019. For the fourth quarter of 2020, net income was $60.2 million, compared to net income of $57.1 million for the third quarter of 2020, and net income of $64.4 million for the fourth quarter of 2019. On a fully diluted basis, earnings per common share were $1.12 for the year ended December 31, 2020 compared to $5.99 for the same period in 2019. Diluted earnings per common share were $1.14 for the quarter ended December 31, 2020, compared to $1.08 for the quarter ended September 30, 2020 and $1.23 for the quarter ended December 31, 2019. The increase in net income for the fourth quarter of 2020 as compared to the third quarter of 2020 resulted primarily from a $15.4 million increase in net interest income and a $14.9 million decrease in non-interest expense, offset by a $17.5 million decrease in non-interest income.

    We recorded a $32.0 million provision for credit losses for the fourth quarter of 2020 utilizing the Current Expected Credit Loss ("CECL") methodology adopted in the first quarter of 2020, compared to $30.0 million for the third quarter of 2020 and $17.0 million for the fourth quarter of 2019. We recorded $65.4 million in net charge-offs during the fourth quarter of 2020, including $27.6 million in energy net charge-offs and $34.2 million in leveraged lending net charge-offs, all of which were loans that had been previously identified as problem loans, compared to $1.6 million during the third quarter of 2020 and $12.8 million during the fourth quarter of 2019. Criticized loans totaled $918.4 million at December 31, 2020, compared to $1.1 billion at September 30, 2020 and $584.1 million at December 31, 2019. Criticized loan levels have declined in the fourth quarter of 2020 as compared to the third quarter of 2020, however remain elevated when compared to 2019 due to the downgrade of loans to borrowers that have been impacted by the COVID-19 pandemic or that are in categories that are expected to be more significantly impacted by COVID-19.

    Non-performing assets ("NPAs") totaled $122.0 million at December 31, 2020, a decrease of $40.0 million compared to the third quarter of 2020 and a decrease of $103.4 million compared to the fourth quarter of 2019. Non-accrual energy loans totaled $51.7 million (42% of total NPAs) at December 31, 2020, compared to $73.8 million (46% of total NPAs) at September 30, 2020 and $125.0 million (55% of total NPAs) at December 31, 2019. Non-accrual leveraged lending loans totaled $18.9 million (15% of total NPAs) at December 31, 2020, compared to $31.3 million (19% of total NPAs) at September 30, 2020 and $73.2 million (32% of total NPAs) at December 31, 2019. The ratio of total LHI NPAs to total LHI plus other real estate owned ("OREO") for the fourth quarter of 2020 was 0.50%, compared to 0.64% for the third quarter of 2020 and 0.91% for the fourth quarter of 2019.

    Net interest income was $223.0 million for the fourth quarter of 2020, compared to $207.6 million for the third quarter of 2020 and $248.4 million for the fourth quarter of 2019. Net interest margin for the fourth quarter of 2020 was 2.32%, an increase of 10 basis points from the third quarter of 2020 and a decrease of 63 basis points from the fourth quarter of 2019. The shift in earning assets, primarily the increases in liquidity assets and investment securities, and decrease in LHI, excluding mortgage finance, contributed to the year-over-year decrease in net interest margin. LHI yields, excluding mortgage finance loans, increased 28 basis points from the third quarter of 2020, and decreased 104 basis points compared to the fourth quarter of 2019. LHI, mortgage finance yields for the fourth quarter of 2020 decreased 7 basis points compared to the third quarter of 2020, and increased 11 basis points compared to the fourth quarter of 2019. Additionally, total cost of deposits for the fourth quarter of 2020 decreased 5 basis points to 0.29% compared to 0.34% for the third quarter of 2020, and decreased 70 basis points from 0.99% for the fourth quarter of 2019.

    Non-interest income decreased $17.5 million, or 29%, during the fourth quarter of 2020 compared to the third quarter of 2020, and increased $25.1 million, or 141%, compared to the fourth quarter of 2019. The linked quarter decrease was primarily related to a decrease in net gain/(loss) on sale of LHS, resulting primarily from decreased margins and lower sales volume. The year-over-year increase was primarily related to increases in net gain/(loss) on sale of LHS, servicing fee income and brokered loan fees. The year-over-year increase in net gain/(loss) on sale of LHS was due to lower hedge costs in the fourth quarter of 2020 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. The year-over-year increase in servicing fee income was due to an increase in the outstanding balance of our servicing portfolio. The year-over-year increase in brokered loan fees was due to an increase in total mortgage finance volumes in the fourth quarter of 2020.

    Non-interest expense for the fourth quarter of 2020 decreased $14.9 million, or 9%, compared to the third quarter of 2020, and decreased $17.3 million, or 10%, compared to the fourth quarter of 2019. The linked quarter decrease was primarily related to decreases in salaries and employee benefits and communications and technology expense, offset by an increase in servicing-related expense. The year-over-year decrease was primarily due to decreases in salaries and employee benefits, marketing and legal and profession expenses, partially offset by an increase in servicing-related expense. The linked quarter decrease in communication and technology expense was primarily due to non-recurring software expenses recorded in the third quarter of 2020. The linked-quarter and year-over-year decreases in salaries and employee benefits was the result of cost savings related to our second quarter 2020 workforce reduction. The linked-quarter and year-over-year increases in servicing-related expense was primarily due to an increase in MSR amortization, resulting primarily from an increase in the cost basis of our MSR asset.

    All regulatory ratios continue to be in excess of "well-capitalized" requirements as of December 31, 2020. Our CET 1, tier 1 capital, total capital and leverage ratios were 9.4%, 10.3%, 12.1% and 7.5%, respectively, at December 31, 2020, compared to 9.1%, 9.9%, 11.8% and 7.6%, respectively, at September 30, 2020. At December 31, 2020, our ratio of tangible common equity to total tangible assets was 7.1% compared to 6.8% at September 30, 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 ongoing 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, attract and retain qualified employees, (10) the impact of changing regulatory requirements and legislative changes on our business, (11) increased competition from banking organizations and other financial service providers, (12) interest rate risk, (13) greater than expected costs or difficulties related to the integration of new lines of business, products or new service offerings, (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 items.

    In addition, statements about the potential effects of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope, duration and severity of the COVID-19 pandemic, actions taken by governmental authorities and other parties in response to the COVID-19 pandemic, the scale of distribution and public acceptance of any vaccines for COVID-19 and the effectiveness of such vaccines in stemming or stopping the spread of COVID-19, and the direct and indirect impact of the COVID-19 pandemic on our customers, clients, third parties and us.

    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)
          4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter
          2020 2020 2020 2020 2019
    CONSOLIDATED STATEMENTS OF INCOME          
    Interest income $ 255,163   $ 243,731   $ 252,010     $ 306,008     $ 337,757  
    Interest expense 32,153   36,162   42,082     77,689     89,372  
    Net interest income 223,010   207,569   209,928     228,319     248,385  
    Provision for credit losses 32,000   30,000   100,000     96,000     17,000  
    Net interest income after provision for credit losses 191,010   177,569   109,928     132,319     231,385  
    Non-interest income 42,886   60,348   70,502     11,780     17,761  
    Non-interest expense 150,886   165,741   222,352     165,417     168,187  
    Income/(loss) before income taxes 83,010   72,176   (41,922 )   (21,318 )   80,959  
    Income tax expense/(benefit) 22,834   15,060   (7,606 )   (4,631 )   16,539  
    Net income/(loss) 60,176   57,116   (34,316 )   (16,687 )   64,420  
    Preferred stock dividends 2,437   2,438   2,437     2,438     2,437  
    Net income/(loss) available to common stockholders $ 57,739   $ 54,678   $ (36,753 )   $ (19,125 )   $ 61,983  
    Diluted earnings/(loss) per common share $ 1.14   $ 1.08   $ (0.73 )   $ (0.38 )   $ 1.23  
    Diluted common shares 50,794,421   50,573,073   50,416,331     50,474,802     50,461,723  
    CONSOLIDATED BALANCE SHEET DATA          
    Total assets $ 37,726,096   $ 38,432,872   $ 36,613,127     $ 35,879,416     $ 32,548,069  
    LHI 15,351,451   15,789,958   16,552,203     16,857,579     16,476,413  
    LHI, mortgage finance 9,079,409   9,378,104   8,972,626     7,588,803     8,169,849  
    LHS 283,165   648,009   454,581     774,064     2,577,134  
    Liquidity assets(1) 9,032,807   10,461,544   9,540,044     9,498,189     4,263,766  
    Investment securities 3,196,970   1,367,313   234,969     228,784     239,871  
    Demand deposits 12,740,947   12,339,212   10,835,911     9,420,303     9,438,459  
    Total deposits 30,996,589   31,959,487   30,187,695     27,134,263     26,478,593  
    Other borrowings 3,111,751   2,908,183   2,895,790     5,195,267     2,541,766  
    Subordinated notes 282,490   282,400   282,309     282,219     282,129  
    Long-term debt 113,406   113,406   113,406     113,406     113,406  
    Stockholders’ equity 2,871,224   2,800,404   2,734,755     2,772,596     2,801,321  
                   
    End of period shares outstanding 50,470,450   50,455,552   50,435,672     50,407,778     50,337,741  
    Book value $ 53.92   $ 52.53   $ 51.25     $ 52.03     $ 52.67  
    Tangible book value(2) $ 53.57   $ 52.18   $ 50.89     $ 51.67     $ 52.31  
    SELECTED FINANCIAL RATIOS          
    Net interest margin 2.32 % 2.22 % 2.30 %   2.78 %   2.95 %
    Return on average assets 0.61 % 0.59 % (0.36 )%   (0.20 )%   0.74 %
    Return on average common equity 8.50 % 8.24 % (5.48 )%   (2.85 )%   9.26 %
    Non-interest income to average earning assets 0.44 % 0.64 % 0.77 %   0.14 %   0.21 %
    Efficiency ratio(3) 56.7 % 61.9 % 79.3 %   68.9 %   63.2 %
    Non-interest expense to average earning assets 1.56 % 1.76 % 2.43 %   2.00 %   1.98 %
    Tangible common equity to total tangible assets(4) 7.1 % 6.8 % 7.0 %   7.3 %   8.1 %
    Common Equity Tier 1 9.4 % 9.1 % 8.8 %   9.3 %   8.9 %
    Tier 1 capital 10.3 % 9.9 % 9.7 %   10.2 %   9.7 %
    Total capital 12.1 % 11.8 % 11.6 %   12.0 %   11.4 %
    Leverage 7.5 % 7.6 % 7.5 %   8.5 %   8.4 %
         
    (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 and accumulated other comprehensive income, less goodwill and intangibles, divided by total assets, less accumulated other comprehensive income and goodwill and intangibles.


     
    TEXAS CAPITAL BANCSHARES, INC.
    CONSOLIDATED BALANCE SHEETS (UNAUDITED)
    (dollars in thousands)
      December 31, 2020 December 31, 2019 %
    Change
    Assets      
    Cash and due from banks $ 173,573     $ 161,817     7 %
    Interest-bearing deposits 9,032,807     4,233,766     113 %
    Federal funds sold and securities purchased under resale agreements     30,000     (100 )%
    Securities, available-for-sale 3,196,970     239,871     1,233 %
    LHS ($239.1 million and $2,571.3 million at December 31, 2020 and 2019, respectively, at fair value) 283,165     2,577,134     (89 )%
    LHI, mortgage finance 9,079,409     8,169,849     11 %
    LHI (net of unearned income) 15,351,451     16,476,413     (7 )%
    Less: Allowance for credit losses on loans 254,615     195,047     31 %
    LHI, net 24,176,245     24,451,215     (1 )%
    Mortgage servicing rights, net 105,424     64,904     62 %
    Premises and equipment, net 24,546     31,212     (21 )%
    Accrued interest receivable and other assets 715,699     740,051     (3 )%
    Goodwill and intangibles, net 17,667     18,099     (2 )%
    Total assets $ 37,726,096     $ 32,548,069     16 %
           
    Liabilities and Stockholders’ Equity      
    Liabilities:      
    Deposits:      
    Non-interest bearing $ 12,740,947     $ 9,438,459     35 %
    Interest bearing 18,255,642     17,040,134     7 %
    Total deposits 30,996,589     26,478,593     17 %
           
    Accrued interest payable 11,150     12,760     (13 )%
    Other liabilities 339,486     318,094     7 %
    Federal funds purchased and repurchase agreements 111,751     141,766     (21 )%
    Other borrowings 3,000,000     2,400,000     25 %
    Subordinated notes, net 282,490     282,129     %
    Trust preferred subordinated debentures 113,406     113,406     %
    Total liabilities 34,854,872     29,746,748     17 %
           
    Stockholders’ equity:      
    Preferred stock, $.01 par value, $1,000 liquidation value:      
    Authorized shares - 10,000,000      
    Issued shares - 6,000,000 shares issued at December 31, 2020 and 2019 150,000     150,000     %
    Common stock, $.01 par value:      
    Authorized shares - 100,000,000      
    Issued shares - 50,470,867 and 50,338,158 at December 31, 2020 and 2019, respectively 504     503     %
    Additional paid-in capital 991,898     978,205     1 %
    Retained earnings 1,713,056     1,663,671     3 %
    Treasury stock (shares at cost: 417 at December 31, 2020 and 2019) (8 )   (8 )   %
    Accumulated other comprehensive income, net of taxes 15,774     8,950     N/M  
    Total stockholders’ equity 2,871,224     2,801,321     2 %
    Total liabilities and stockholders’ equity $ 37,726,096     $ 32,548,069     16 %


    TEXAS CAPITAL BANCSHARES, INC.
    CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
    (dollars in thousands except per share data)
      Three Months Ended December 31, Twelve Months Ended December 31,
      2020 2019 2020 2019
    Interest income        
    Interest and fees on loans $ 242,776     $ 312,147     $ 1,011,175     $ 1,284,036  
    Investment securities 9,594     2,618     17,475     8,654  
    Federal funds sold and securities purchased under resale agreements 1     439     693     1,529  
    Interest-bearing deposits in other banks 2,792     22,553     27,569     71,093  
    Total interest income 255,163     337,757     1,056,912     1,365,312  
    Interest expense        
    Deposits 23,819     70,987     146,117     293,537  
    Federal funds purchased 110     1,319     1,083     11,872  
    Other borrowings 3,407     11,712     20,923     58,393  
    Subordinated notes 4,191     4,191     16,764     16,764  
    Trust preferred subordinated debentures 626     1,163     3,199     5,026  
    Total interest expense 32,153     89,372     188,086     385,592  
    Net interest income 223,010     248,385     868,826     979,720  
    Provision for credit losses 32,000     17,000     258,000     75,000  
    Net interest income after provision for credit losses 191,010     231,385     610,826     904,720  
    Non-interest income        
    Service charges on deposit accounts 3,004     2,785     11,620     11,320  
    Wealth management and trust fee income 2,681     2,342     9,998     8,810  
    Brokered loan fees 12,610     8,645     46,423     29,738  
    Servicing income 8,834     4,030     27,029     13,439  
    Swap fees 473     1,559     5,182     4,387  
    Net gain/(loss) on sale of LHS 6,761     (7,757 )   58,026     (20,259 )
    Other 8,523     6,157     27,238     45,005  
    Total non-interest income 42,886     17,761     185,516     92,440  
    Non-interest expense        
    Salaries and employee benefits 78,449     90,248     340,529     328,483  
    Net occupancy expense 8,373     9,075     34,955     32,989  
    Marketing 3,435     12,807     23,581     53,355  
    Legal and professional 12,129     21,032     52,132     52,460  
    Communications and technology 15,405     13,801     103,054     44,826  
    FDIC insurance assessment 6,592     5,613     25,955     20,093  
    Servicing-related expenses 15,867     2,960     64,625     22,573  
    Merger-related expenses     1,370     17,756     1,370  
    Other 10,636     11,281     41,809     44,701  
    Total non-interest expense 150,886     168,187     704,396     600,850  
    Income before income taxes 83,010     80,959     91,946     396,310  
    Income tax expense 22,834     16,539     25,657     84,295  
    Net income 60,176     64,420     66,289     312,015  
    Preferred stock dividends 2,437     2,437     9,750     9,750  
    Net income available to common stockholders $ 57,739     $ 61,983     $ 56,539     $ 302,265  
             
    Basic earnings per common share $ 1.14     $ 1.23     $ 1.12     $ 6.01  
    Diluted earnings per common share $ 1.14     $ 1.23     $ 1.12     $ 5.99  


                                       
    TEXAS CAPITAL BANCSHARES, INC.
    SUMMARY OF CREDIT LOSS EXPERIENCE
    (dollars in thousands)
          4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter
          2020 2020 2020 2020 2019
    Allowance for credit losses on loans:          
    Beginning balance $ 290,165   $ 264,722   $ 240,958   $ 195,047   $ 190,138  
    Impact of CECL adoption       8,585    
    Loans charged-off:          
    Commercial 37,984   2,436   12,287   20,653   13,968  
    Energy 33,283   141   62,368   37,730   797  
    Real estate 180          
    Total charge-offs 71,447   2,577   74,655   58,383   14,765  
    Recoveries:          
    Commercial 394   113   513   257   1,754  
    Energy 5,696   880     423   209  
    Total recoveries 6,090   993   513   680   1,963  
    Net charge-offs 65,357   1,584   74,142   57,703   12,802  
    Provision for credit losses on loans 29,807   27,027   97,906   95,029   17,711  
    Ending balance $ 254,615   $ 290,165   $ 264,722   $ 240,958   $ 195,047  
                   
    Allowance for off-balance sheet credit losses:          
    Beginning balance $ 15,241   $ 12,268   $ 10,174   $ 8,640   $ 9,351  
    Impact of CECL adoption       563    
    Provision for off-balance sheet credit losses 2,193   2,973   2,094   971   (711 )
    Ending balance $ 17,434   $ 15,241   $ 12,268   $ 10,174   $ 8,640  
                   
    Total allowance for credit losses $ 272,049   $ 305,406   $ 276,990   $ 251,132   $ 203,687  
                   
    Total provision for credit losses $ 32,000   $ 30,000   $ 100,000   $ 96,000   $ 17,000  
                   
    Allowance for credit losses on loans to LHI 1.04 % 1.15 % 1.04 % 0.99 % 0.79 %
    Allowance for credit losses on loans to average LHI 1.01 % 1.14 % 1.03 % 1.02 % 0.79 %
    Net charge-offs to average LHI(1) 1.03 % 0.02 % 1.16 % 0.98 % 0.21 %
    Net charge-offs to average LHI for last twelve months(1) 0.80 % 0.59 % 0.73 % 0.53 % 0.31 %
    Total provision for credit losses to average LHI(1) 0.51 % 0.47 % 1.57 % 1.63 % 0.27 %
    Total allowance for credit losses to LHI 1.11 % 1.21 % 1.09 % 1.03 % 0.83 %
                             
    (1)   Interim period ratios are annualized.


                                       
    TEXAS CAPITAL BANCSHARES, INC.          
    SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS      
    (dollars in thousands)          
          4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter
          2020 2020 2020 2020 2019
                   

    Non-performing assets (NPAs):
             

    Non-accrual loans
    $ 121,989   $ 161,946   $ 174,031   $ 219,165   $ 225,384  

    Other real estate owned (OREO)
             

    Total LHI NPAs
    $ 121,989   $ 161,946   $ 174,031   $ 219,165   $ 225,384  
                   

    Non-accrual loans to LHI
    0.50 % 0.64 % 0.68 % 0.90 % 0.91 %

    Total LHI NPAs to LHI plus OREO
    0.50 % 0.64 % 0.68 % 0.90 % 0.91 %

    Total LHI NPAs to earning assets
    0.33 % 0.43 % 0.49 % 0.63 % 0.71 %

    Allowance for credit losses on loans to non-accrual loans
      2.1x     1.8x     1.5x     1.1x     .9x  
                                       

    LHI past due 90 days and still accruing(1)
    $ 12,541   $ 15,896   $ 21,079   $ 21,274   $ 17,584  

    LHI past due 90 days to LHI
    0.05 % 0.06 % 0.08 % 0.09 % 0.07 %
                   

    LHS non-accrual(2)
    $ 6,966   $   $   $   $  

    LHS past due 90 days and still accruing(3)
    $ 16,667   $ 15,631   $ 10,152   $ 9,014   $ 8,207  
                                       
    (1)   At December 31, 2020, loans past due 90 days and still accruing includes premium finance loans of $6.4 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)
               
      4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter
      2020 2020 2020 2020 2019
    Interest income          
    Interest and fees on loans $ 242,776   $ 237,179   $ 247,595     $ 283,625     $ 312,147  
    Investment securities 9,594   3,674   2,024     2,183     2,618  
    Federal funds sold and securities purchased under resale agreements 1   1   77     614     439  
    Interest-bearing deposits in other banks 2,792   2,877   2,314     19,586     22,553  
    Total interest income 255,163   243,731   252,010     306,008     337,757  
    Interest expense          
    Deposits 23,819   27,830   32,294     62,174     70,987  
    Federal funds purchased 110   128   176     669     1,319  
    Other borrowings 3,407   3,365   4,569     9,582     11,712  
    Subordinated notes 4,191   4,191   4,191     4,191     4,191  
    Trust preferred subordinated debentures 626   648   852     1,073     1,163  
    Total interest expense 32,153   36,162   42,082     77,689     89,372  
    Net interest income 223,010   207,569   209,928     228,319     248,385  
    Provision for credit losses 32,000   30,000   100,000     96,000     17,000  
    Net interest income after provision for credit losses 191,010   177,569   109,928     132,319     231,385  
    Non-interest income          
    Service charges on deposit accounts 3,004   2,864   2,459     3,293     2,785  
    Wealth management and trust fee income 2,681   2,502   2,348     2,467     2,342  
    Brokered loan fees 12,610   15,034   10,764     8,015     8,645  
    Servicing income 8,834   7,329   6,120     4,746     4,030  
    Swap fees 473   484   1,468     2,757     1,559  
    Net gain/(loss) on sale of LHS 6,761   25,242   39,023     (13,000 )   (7,757 )
    Other 8,523   6,893   8,320     3,502     6,157  
    Total non-interest income 42,886   60,348   70,502     11,780     17,761  
    Non-interest expense          
    Salaries and employee benefits 78,449   84,096   100,791     77,193     90,248  
    Net occupancy expense 8,373   8,736   9,134     8,712     9,075  
    Marketing 3,435   3,636   7,988     8,522     12,807  
    Legal and professional 12,129   11,207   11,330     17,466     21,032  
    Communications and technology 15,405   31,098   42,760     13,791     13,801  
    FDIC insurance assessment 6,592   6,374   7,140     5,849     5,613  
    Servicing-related expenses 15,867   12,287   20,117     16,354     2,960  
    Merger-related expenses     10,486     7,270     1,370  
    Other 10,636   8,307   12,606     10,260     11,281  
    Total non-interest expense 150,886   165,741   222,352     165,417     168,187  
    Income/(loss) before income taxes 83,010   72,176   (41,922 )   (21,318 )   80,959  
    Income tax expense/(benefit) 22,834   15,060   (7,606 )   (4,631 )   16,539  
    Net income/(loss) 60,176   57,116   (34,316 )   (16,687 )   64,420  
    Preferred stock dividends 2,437   2,438   2,437     2,438     2,437  
    Net income/(loss) available to common shareholders $ 57,739   $ 54,678   $ (36,753 )   $ (19,125 )   $ 61,983  


                                                                                                 
    TEXAS CAPITAL BANCSHARES, INC.
    CONSOLIDATED DAILY AVERAGE BALANCES, AVERAGE YIELDS AND RATES - UNAUDITED
    (dollars in thousands)
     
          4th Quarter 2020   3rd Quarter 2020   2nd Quarter 2020   1st Quarter 2020   4th Quarter 2019
          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 $ 2,137,481   $ 7,748   1.44 %   $ 525,149   $ 1,905   1.44 %   $ 38,829   $ 185   1.92 %   $ 42,799   $ 274   2.57 %   $ 40,904   $ 693   6.72 %
    Investment securities - Non-taxable(2) 200,781   2,337   4.63 %   190,797   2,239   4.67 %   195,806   2,327   4.78 %   195,578   2,417   4.97 %   197,591   2,437   4.89 %
    Federal funds sold and securities purchased under resale agreements 1,709   1   0.13 %   12,051   1   0.04 %   245,434   77   0.13 %   199,727   614   1.24 %   102,320   439   1.70 %
    Interest-bearing deposits in other banks 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 %   5,387,000   22,553   1.66 %
    LHS, at fair value 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 %   3,567,836   33,411   3.72 %
    LHI, mortgage finance loans 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 %   7,870,888   63,114   3.18 %
    LHI(1)(2) 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 %   16,667,259   216,686   5.16 %
    Less allowance for credit
    losses on loans
    290,189         264,769         236,823         201,837         189,353      
    LHI, net of allowance 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 %   24,348,794   279,800   4.56 %
    Total earning assets 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 %   33,644,445   339,333   4.00 %
    Cash and other assets 1,031,195         1,037,760         1,075,864         976,520         974,866      
    Total assets $ 39,470,691         $ 38,421,576         $ 37,912,536         $ 34,228,573         $ 34,619,311      
    Liabilities and Stockholders’ Equity                                      
    Transaction deposits $ 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 %   $ 3,817,294   $ 16,428   1.71 %
    Savings deposits 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 %   11,111,326   40,603   1.45 %
    Time deposits 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 %   2,453,655   13,956   2.26 %
    Total interest bearing deposits 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 %   17,382,275   70,987   1.62 %
    Other borrowings 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 %   2,822,465   13,031   1.83 %
    Subordinated notes 282,435   4,191   5.90 %   282,343   4,191   5.91 %   282,252   4,191   5.97 %   282,165   4,191   5.97 %   282,074   4,191   5.89 %
    Trust preferred subordinated debentures 113,406   626   2.20 %   113,406   648   2.28 %   113,406   852   3.02 %   113,406   1,073   3.80 %   113,406   1,163   4.07 %
    Total interest bearing liabilities 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 %   20,600,220   89,372   1.72 %
    Demand deposits 13,174,114         12,202,065         10,865,896         10,003,495         10,933,887      
    Other liabilities 303,480         314,500         293,698         270,868         278,964      
    Stockholders’ equity 2,853,298         2,791,451         2,849,200         2,853,353         2,806,240      
    Total liabilities and stockholders’ equity $ 39,470,691         $ 38,421,576         $ 37,912,536         $ 34,228,573         $ 34,619,311      
    Net interest income(2)   $ 223,856         $ 208,421         $ 210,856         $ 229,787         $ 249,961    
    Net interest margin     2.32 %       2.22 %       2.30 %       2.78 %       2.95 %
                                                         
    (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.


    CONTACT: INVESTOR CONTACT
    Julie Anderson, 214.932.6773
    julie.anderson@texascapitalbank.com
    
    MEDIA CONTACT
    Shannon Wherry, 469.399.8527
    shannon.wherry@texascapitalbank.com



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    Texas Capital Bancshares, Inc. Announces Operating Results for Q4 and Full Year 2020 DALLAS, Jan. 21, 2021 (GLOBE NEWSWIRE) - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the fourth quarter and full year of 2020. "While 2020 was certainly a …