• Texas Capital Bancshares, Inc. Announces Operating Results for Q3 2021

    المصدر: Nasdaq GlobeNewswire / 20 أكتوبر 2021 16:00:01   America/New_York

    DALLAS, Oct. 20, 2021 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the third quarter of 2021.

    “I am very pleased by the important actions taken this quarter,” said Rob C. Holmes, President and CEO. “We have communicated a transformative vision for the future of our company which we believe will lead to higher quality, more sustainable earnings for our shareholders. I am encouraged by the support we have received thus far, and with a vastly improved balance sheet, a strengthening loan portfolio, and a highly motivated management team and employee base, we are focused on what needs to be done to become the flagship financial services firm headquartered in Texas.”

    • Net income of $43.4 million ($0.76 per diluted share) reported for the third quarter of 2021, a decrease of $30.1 million on a linked quarter basis and a decrease of $13.7 million from the third quarter of 2020.
    • Provision for credit losses of $5.0 million for the third quarter of 2021, compared to a negative provision of $19.0 million for the second quarter of 2021 and a provision of $30.0 million for the third quarter of 2020.
    • During the third quarter of 2021, we recorded a $12.0 million write-off of certain software assets to reposition our capitalized technology investment to align with the long-term strategy as announced by management in the third quarter of 2021.
    • Loans held for investment (“LHI”), excluding mortgage finance loans, increased $52.8 million (less than 1%) on a linked quarter basis and decreased $568.6 million (4)% from the third quarter of 2020.
    • LHI, mortgage finance loans decreased 3% on a linked quarter basis and decreased 9% from the third quarter of 2020.
    • Demand deposits increased 5% and total deposits increased 3% on a linked quarter basis, and increased 21% and decreased 7%, respectively, from the third quarter of 2020.

    FINANCIAL SUMMARY

    (dollars and shares in thousands)Q3 2021 Q3 2020 % Change
    QUARTERLY OPERATING RESULTS     
    Net income$43,390  $57,116  (24)%
    Net income available to common stockholders$39,078  $54,678  (29)%
    Diluted earnings per common share$0.76  $1.08  (30)%
    Diluted common shares51,140  50,573  1 %
    Return on average assets0.47% 0.59%  
    Return on average common equity5.41% 8.24%  
    BALANCE SHEET     
    Loans held for sale (“LHS”)$9,660  $648,009  (99)%
    LHI, mortgage finance8,528,313  9,378,104  (9)%
    LHI15,221,404  15,789,958  (4)%
    Total LHI23,749,717  25,168,062  (6)%
    Total assets36,404,320  38,432,872  (5)%
    Demand deposits14,970,462  12,339,212  21 %
    Total deposits29,813,668  31,959,487  (7)%
    Stockholders’ equity3,147,752  2,800,404  12 %
              

    DETAILED FINANCIALS

    For the third quarter of 2021, net income was $43.4 million, compared to $73.5 million for the second quarter of 2021 and $57.1 million for the third quarter of 2020. On a fully diluted basis, earnings per common share were $0.76 for the quarter ended September 30, 2021, compared to $1.31 for the quarter ended June 30, 2021 and $1.08 for the quarter ended September 30, 2020.

    We recorded a $5.0 million provision for credit losses for the third quarter of 2021, compared to a $19.0 million negative provision for credit losses for the second quarter of 2021 and a $30.0 million provision for credit losses for the third quarter of 2020. The $5.0 million provision for credit losses recorded in the third quarter of 2021 resulted from our view of the economic outlook remaining consistent as compared to the prior quarter and an increase in LHI, excluding mortgage finance. We recorded $3.1 million in net charge-offs during the third quarter of 2021, compared to $2.4 million during the second quarter of 2021 and $1.6 million during the third quarter of 2020. Criticized loans totaled $728.9 million at September 30, 2021, compared to $891.6 million at June 30, 2021 and $1.1 billion at September 30, 2020.

    Non-performing assets (“NPAs”) totaled $87.5 million at September 30, 2021, compared to $86.6 million at June 30, 2021 and $161.9 million at September 30, 2020. The ratio of total LHI NPAs to total LHI plus other real estate owned for the third quarter of 2021 was 0.37%, compared to 0.36% for the second quarter of 2021 and 0.64% for the third quarter of 2020.

    Net interest income was $194.1 million for the third quarter of 2021, compared to $197.0 million for the second quarter of 2021 and $207.6 million for the third quarter of 2020. The linked-quarter decrease in net interest income was primarily driven by a decline in loan fees, partially offset by a decrease in average interest-bearing deposits. The year-over-year decrease was primarily due to declines in total average loans and earning asset yields, partially offset by increases in average investment securities and loan fees, as well as declining cost of funds. Net interest margin for the third quarter of 2021 was 2.15%, an increase of 5 basis points from the second quarter of 2021 and a decrease of 7 basis points from the third quarter of 2020. LHI yields, excluding mortgage finance loans, decreased 18 basis points from the second quarter of 2021, and decreased 1 basis point compared to the third quarter of 2020. LHI, mortgage finance yields for the third quarter of 2021 decreased 16 basis points compared to the second quarter of 2021, and decreased 43 basis points compared to the third quarter of 2020. Additionally, total cost of deposits for the third quarter of 2021 decreased 1 basis point to 0.19% compared to 0.20% for the second quarter of 2021, and decreased 15 basis points from 0.34% for the third quarter of 2020.

    Non-interest income for the third quarter of 2021 decreased $8.9 million, or 30%, compared to the second quarter of 2021, and decreased $39.1 million, or 65%, compared to the third quarter of 2020. The linked quarter decrease was primarily related to decreases in servicing income, due to the second quarter sale of our mortgage servicing rights (“MSR”) portfolio, and other non-interest income. The year-over-year decrease was primarily related to decreases in net gain/(loss) on sale of LHS, brokered loan fees and servicing income, all resulting from the second quarter 2021 sale of our MSR portfolio and transition of the mortgage correspondent aggregation MCA program to a third-party.

    Non-interest expense for the third quarter of 2021 increased $3.9 million, or 3 percent, compared to the second quarter of 2021, and decreased $12.8 million, or 8%, compared to the third quarter of 2020. The linked quarter increase was primarily due to an increase in communications and technology expense, partially offset by a decrease in servicing-related expenses due to the second quarter sale of our MSR portfolio. The year-over-year decrease was primarily due to decreases in communications and technology expense and servicing-related expenses, partially offset by an increase in salaries and employee benefits. Included in communication and technology expense for the third quarter of 2021 was a $12.0 million write-off of certain software assets as discussed above, compared to none in the second quarter and $15.4 million in the third quarter of 2020.

    All regulatory ratios continue to be in excess of “well-capitalized” requirements as of September 30, 2021. Our CET 1, tier 1 capital, total capital and leverage ratios were 10.7%, 12.2%, 14.9% and 9.0%, respectively, at September 30, 2021, compared to 10.5%, 12.1%, 14.8% and 8.4%, respectively, at June 30, 2021. At September 30, 2021, our ratio of tangible common equity to total tangible assets was 7.8% compared to 7.9% at June 30, 2021.

    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 (the “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 and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, our financial condition, results of operations, business plans and future performance. These statements are not historical in nature and may often be identified by the use of words such as “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,” “could,” “should,” “projects,” “targeted,” “continue,” “become,” “intend” and similar expressions.

    Because forward-looking statements relate to future results and occurrences, they are subject to inherent and various uncertainties, risks, and changes in circumstances that are difficult to predict, may change over time, are based on management’s expectations and assumptions at the time the statements are made and are not guarantees of future results. 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 and related material risks and uncertainties 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 as well as the continued impact of the COVID-19 pandemic (and any other pandemic, epidemic or health-related crisis), (3) technological changes, including the increased focus on information technology and cybersecurity and our ability to manage such information systems and the effects of cyber-incidents (including failures, disruptions or security breaches) or those of third-party providers, (4) changes in interest rates and changes in the value of commercial and residential real estate securing our loans, (5) adverse economic or market conditions that could affect the credit quality of our loan portfolio or our operating performance, (6) expectations regarding rates of default and credit losses and the appropriateness of our allowance for credit losses and provision for credit losses, (7) unexpected market conditions, regulatory changes or changes in our credit ratings that could, among other things, cause access to capital market transactions and other sources of funding to become more difficult, (8) the inadequacy of our available funds to meet our obligations, (9) the failure to effectively balance our funding sources with cash demands by depositors and borrowers, (10) material failures of our accounting estimates and risk management processes based on management judgment, (11) failure of our risk management strategies and procedures, including failure or circumvention of our controls, (12) the failure to effectively manage risk, (13) uncertainty regarding alternatives to the London Interbank Offered Rate and our ability to successfully implement any new interest rate benchmarks, (14) the impact of changing regulatory requirements and legislative changes on our business, (15) the failure to successfully execute our business strategy, including completing planned merger, acquisition or sale transactions, (16) the failure to identify, attract and retain key personnel or the loss of such personnel, (17) increased or more effective competition from banks or other financial service providers in our markets, (18) structural changes in the markets for origination, sale and servicing of residential mortgages, (19) certainty in the pricing of mortgage loans that we purchase, and later sell or securitize, (20) volatility in the market price of our common stock, (21) credit risk resulting from our exposure to counterparties, (22) an increase in the incidence or severity of fraud, illegal payments, security breaches and other illegal acts impacting us, (23) the failure to maintain adequate regulatory capital to support our business, (24) environmental liability or other environmental, social or governance factors that may materially negatively impact the company, (25) severe weather, natural disasters, acts of war or terrorism and other external events and (26) our success at managing the risk and uncertainties involved in the foregoing factors.

    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)
     3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
     20212021202120202020
    CONSOLIDATED STATEMENTS OF INCOME     
    Interest income$220,148 $224,490  $228,412  $255,163 $243,731 
    Interest expense26,053 27,496  28,339  32,153 36,162 
    Net interest income194,095 196,994  200,073  223,010 207,569 
    Provision for credit losses5,000 (19,000) (6,000) 32,000 30,000 
    Net interest income after provision for credit losses189,095 215,994  206,073  191,010 177,569 
    Non-interest income21,220 30,102  39,092  42,863 60,348 
    Non-interest expense152,987 149,060  150,316  150,863 165,741 
    Income before income taxes57,328 97,036  94,849  83,010 72,176 
    Income tax expense13,938 23,555  22,911  22,834 15,060 
    Net income43,390 73,481  71,938  60,176 57,116 
    Preferred stock dividends4,312 6,317  3,779  2,437 2,438 
    Net income available to common stockholders$39,078 $67,164  $68,159  $57,739 $54,678 
    Diluted earnings per common share$0.76 $1.31  $1.33  $1.14 $1.08 
    Diluted common shares51,139,555 51,093,660  51,069,511  50,794,421 50,573,073 
    CONSOLIDATED BALANCE SHEET DATA     
    Total assets$36,404,320 $35,228,542  $40,054,433  $37,726,096 $38,432,872 
    LHI15,221,404 15,168,565  15,399,174  15,351,451 15,789,958 
    LHI, mortgage finance8,528,313 8,772,799  9,009,081  9,079,409 9,378,104 
    LHS9,660 63,747  176,286  283,165 648,009 
    Liquidity assets(1)8,317,926 6,768,650  11,212,276  9,032,807 10,461,544 
    Investment securities3,663,874 3,798,275  3,443,058  3,196,970 1,367,313 
    Demand deposits14,970,462 14,228,038  15,174,642  12,740,947 12,339,212 
    Total deposits29,813,668 28,839,563  33,391,970  30,996,589 31,959,487 
    Other borrowings2,203,470 2,014,481  2,515,587  3,111,751 2,908,183 
    Long-term debt928,062 927,386  664,968  395,896 395,806 
    Stockholders’ equity3,147,752 3,114,957  3,159,482  2,871,224 2,800,404 
          
    End of period shares outstanding50,605,626 50,592,201  50,557,767  50,470,450 50,455,552 
    Book value$56.27 $55.64  $53.59  $53.92 $52.53 
    Tangible book value(2)$55.93 $55.29  $53.24  $53.57 $52.18 
    SELECTED FINANCIAL RATIOS     
    Net interest margin2.15%2.10 %2.09 %2.32%2.22%
    Return on average assets0.47%0.76 %0.73 %0.61%0.59%
    Return on average common equity5.41%9.74 %10.08 %8.50%8.24%
    Non-interest income to average earning assets0.23%0.32 %0.41 %0.44%0.64%
    Efficiency ratio(3)71.1%65.6 %62.9 %56.7%61.9%
    Non-interest expense to average earning assets1.69%1.59 %1.57 %1.56%1.76%
    Tangible common equity to total tangible assets(4)7.8%7.9 %6.7 %7.2%6.9%
    Common Equity Tier 110.7%10.5 %10.2 %9.4%9.1%
    Tier 1 capital12.2%12.1 %12.2 %10.3%9.9%
    Total capital14.9%14.8 %14.0 %12.1%11.8%
    Leverage9.0%8.4 %8.3 %7.5%7.6%

    (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)
     September 30, 2021September 30, 2020%
    Change
    Assets   
    Cash and due from banks$217,125  $185,242  17 %
    Interest-bearing deposits8,317,926  10,461,544  (20)%
    Securities, available-for-sale3,663,874  1,367,313  N/M  
    LHS ($8.4 million and $639.0 million at September 30, 2021 and 2020, respectively, at fair value)9,660  648,009  (99)%
    LHI, mortgage finance8,528,313  9,378,104  (9)%
    LHI (net of unearned income)15,221,404  15,789,958  (4)%
    Less: Allowance for credit losses on loans221,957  290,165  (24)%
    LHI, net23,527,760  24,877,897  (5)%
    Mortgage servicing rights, net1,158  95,323  (99)%
    Premises and equipment, net21,119  26,653  (21)%
    Accrued interest receivable and other assets628,335  753,123  (17)%
    Goodwill and intangibles, net17,363  17,768  (2)%
    Total assets$36,404,320  $38,432,872  (5)%
        
    Liabilities and Stockholders’ Equity   
    Liabilities:   
    Deposits:   
    Non-interest bearing$14,970,462  $12,339,212  21 %
    Interest bearing14,843,206  19,620,275  (24)%
    Total deposits29,813,668  31,959,487  (7)%
        
    Accrued interest payable8,920  14,674  (39)%
    Other liabilities302,448  354,318  (15)%
    Federal funds purchased and repurchase agreements3,470  208,183  (98)%
    Other borrowings2,200,000  2,700,000  (19)%
    Long-term debt928,062  395,806  134 %
    Total liabilities33,256,568  35,632,468  (7)%
        
    Stockholders’ equity:   
    Preferred stock, $.01 par value, $1,000 liquidation value:   
    Authorized shares - 10,000,000   
    Issued shares - 300,000 and 6,000,000 shares issued at September 30, 2021 and 2020, respectively300,000  150,000  100 %
    Common stock, $.01 par value:   
    Authorized shares - 100,000,000   
    Issued shares - 50,606,043 and 50,455,969 at September 30, 2021 and 2020, respectively506  504  — %
    Additional paid-in capital1,000,509  987,754  1 %
    Retained earnings1,887,457  1,655,317  14 %
    Treasury stock (shares at cost: 417 at September 30, 2021 and 2020)(8) (8) — %
    Accumulated other comprehensive income/(loss), net of taxes(40,712) 6,837  N/M  
    Total stockholders’ equity3,147,752  2,800,404  12 %
    Total liabilities and stockholders’ equity$36,404,320  $38,432,872  (5)%


         
    TEXAS CAPITAL BANCSHARES, INC.    
    CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)    
    (dollars in thousands except per share data)    
     Three Months Ended September 30,Nine Months Ended September 30,
     2021202020212020
    Interest income    
    Interest and fees on loans$206,307  $237,179 $632,510  $768,399 
    Investment securities10,235  3,674 31,040  7,881 
    Federal funds sold and securities purchased under resale agreements—  1 1  692 
    Interest-bearing deposits in other banks3,606  2,877 9,499  24,777 
    Total interest income220,148  243,731 673,050  801,749 
    Interest expense    
    Deposits14,719  27,830 50,994  122,298 
    Federal funds purchased5  128 131  973 
    Other borrowings743  3,365 3,711  17,516 
    Long-term debt10,586  4,839 27,052  15,146 
    Total interest expense26,053  36,162 81,888  155,933 
    Net interest income194,095  207,569 591,162  645,816 
    Provision for credit losses5,000  30,000 (20,000) 226,000 
    Net interest income after provision for credit losses189,095  177,569 611,162  419,816 
    Non-interest income    
    Service charges on deposit accounts4,622  2,864 13,972  8,616 
    Wealth management and trust fee income3,382  2,502 9,380  7,317 
    Brokered loan fees6,032  15,034 22,276  33,813 
    Servicing income292  7,329 15,236  18,195 
    Swap fees568  484 1,628  4,709 
    Net gain/(loss) on sale of LHS(1,185) 25,242 1,317  51,265 
    Other7,509  6,893 26,605  18,698 
    Total non-interest income21,220  60,348 90,414  142,613 
    Non-interest expense    
    Salaries and employee benefits87,503  84,096 261,855  262,080 
    Net occupancy expense8,324  8,736 24,463  26,582 
    Marketing2,123  3,636 5,720  20,146 
    Legal and professional11,055  11,207 28,479  40,003 
    Communications and technology28,374  31,098 58,695  87,649 
    FDIC insurance assessment4,500  6,374 16,339  19,363 
    Servicing-related expenses2,396  12,287 27,740  48,741 
    Merger-related expenses—  — —  17,756 
    Other8,712  8,307 29,072  31,173 
    Total non-interest expense152,987  165,741 452,363  553,493 
    Income before income taxes57,328  72,176 249,213  8,936 
    Income tax expense13,938  15,060 60,404  2,823 
    Net income43,390  57,116 188,809  6,113 
    Preferred stock dividends4,312  2,438 14,408  7,313 
    Net income/(loss) available to common stockholders$39,078  $54,678 $174,401  $(1,200)
         
    Basic earnings/(loss) per common share$0.77  $1.08 $3.45  $(0.02)
    Diluted earnings/(loss) per common share$0.76  $1.08 $3.41  $(0.02)


     
    TEXAS CAPITAL BANCSHARES, INC.
    SUMMARY OF CREDIT LOSS EXPERIENCE
    (dollars in thousands)
     3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
     20212021202120202020
    Allowance for credit losses on loans:     
    Beginning balance$221,511 $242,484  $254,615  $290,165 $264,722 
    Loans charged-off:     
    Commercial4,348 1,412  2,451  37,984 2,436 
    Energy— 686  5,732  33,283 141 
    Real estate— 1,192  —  180 — 
    Total charge-offs4,348 3,290  8,183  71,447 2,577 
    Recoveries:     
    Commercial1,104 308  1,050  394 113 
    Energy42 609  715  5,696 880 
    Real estate112 —  —  — — 
    Total recoveries1,258 917  1,765  6,090 993 
    Net charge-offs3,090 2,373  6,418  65,357 1,584 
    Provision for credit losses on loans3,536 (18,600) (5,713) 29,807 27,027 
    Ending balance$221,957 $221,511  $242,484  $254,615 $290,165 
          
    Allowance for off-balance sheet credit losses:     
    Beginning balance$16,747 $17,147  $17,434  $15,241 $12,268 
    Provision for off-balance sheet credit losses1,464 (400) (287) 2,193 2,973 
    Ending balance$18,211 $16,747  $17,147  $17,434 $15,241 
          
    Total allowance for credit losses$240,168 $238,258  $259,631  $272,049 $305,406 
          
    Total provision for credit losses$5,000 $(19,000) $(6,000) $32,000 $30,000 
          
    Allowance for credit losses on loans to LHI0.93%0.93 %0.99 %1.04%1.15%
    Allowance for credit losses on loans to average LHI0.95%0.98 %1.03 %1.01%1.14%
    Net charge-offs to average LHI(1)0.05%0.04 %0.11 %1.03%0.02%
    Net charge-offs to average LHI for last twelve months(1)0.33%0.31 %0.59 %0.80%0.59%
    Total provision for credit losses to average LHI(1)0.09%(0.34)%(0.10)%0.51%0.47%
    Total allowance for credit losses to LHI1.01%1.00 %1.06 %1.11%1.21%

    (1)  Interim period ratios are annualized.

          
    TEXAS CAPITAL BANCSHARES, INC.     
    SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS   
    (dollars in thousands)     
     3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
     20212021202120202020
          
    Non-performing assets (NPAs):     
    Non-accrual loans$87,532  $86,636  $97,730  $121,989  $161,946  
    Other real estate owned (OREO)—  —  —  —  —  
    Total LHI NPAs$87,532  $86,636  $97,730  $121,989  $161,946  
          
    Non-accrual loans to LHI0.37 %0.36 %0.40 %0.50 %0.64 %
    Total LHI NPAs to LHI plus OREO0.37 %0.36 %0.40 %0.50 %0.64 %
    Total LHI NPAs to earning assets0.25 %0.25 %0.25 %0.33 %0.43 %
    Allowance for credit losses on loans to non-accrual loans2.5x 2.6x 2.5x 2.1x 1.8x 
          
    LHI past due 90 days and still accruing(1)$3,405  $7,671  $6,187  $12,541  $15,896  
    LHI past due 90 days to LHI0.01 %0.03 %0.03 %0.05 %0.06 %
    LHS non-accrual(2)$—  $—  $—  $6,966  $—  
    LHS past due 90 days and still accruing(3)$3,808  $2,695  $16,359  $16,667  $15,631  


    (1)At September 30, 2021, loans past due 90 days and still accruing included premium finance loans of $2.3 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. The first quarter of 2021 and fourth and third quarters of 2020 also include 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)
          
     3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
     20212021202120202020
    Interest income     
    Interest and fees on loans$206,307  $210,611  $215,592  $242,776 $237,179
    Investment securities10,235  10,918  9,887  9,594 3,674
    Federal funds sold and securities purchased under resale agreements—  —  1  1 1
    Interest-bearing deposits in other banks3,606  2,961  2,932  2,792 2,877
    Total interest income220,148  224,490  228,412  255,163 243,731
    Interest expense     
    Deposits14,719  16,271  20,004  23,819 27,830
    Federal funds purchased5  51  75  110 128
    Other borrowings743  451  2,517  3,407 3,365
    Long-term debt10,586  10,723  5,743  4,817 4,839
    Total interest expense26,053  27,496  28,339  32,153 36,162
    Net interest income194,095  196,994  200,073  223,010 207,569
    Provision for credit losses5,000  (19,000) (6,000) 32,000 30,000
    Net interest income after provision for credit losses189,095  215,994  206,073  191,010 177,569
    Non-interest income     
    Service charges on deposit accounts4,622  4,634  4,716  3,004 2,864
    Wealth management and trust fee income3,382  3,143  2,855  2,681 2,502
    Brokered loan fees6,032  6,933  9,311  12,610 15,034
    Servicing income292  5,935  9,009  8,834 7,329
    Swap fees568  534  526  473 484
    Net gain/(loss) on sale of LHS(1,185) (3,070) 5,572  6,761 25,242
    Other7,509  11,993  7,103  8,500 6,893
    Total non-interest income21,220  30,102  39,092  42,863 60,348
    Non-interest expense     
    Salaries and employee benefits87,503  86,830  87,522  78,449 84,096
    Net occupancy expense8,324  7,865  8,274  8,373 8,736
    Marketing2,123  1,900  1,697  3,435 3,636
    Legal and professional11,055  9,147  8,277  12,129 11,207
    Communications and technology28,374  14,352  15,969  15,405 31,098
    FDIC insurance assessment4,500  5,226  6,613  6,592 6,374
    Servicing-related expenses2,396  12,355  12,989  15,844 12,287
    Other8,712  11,385  8,975  10,636 8,307
    Total non-interest expense152,987  149,060  150,316  150,863 165,741
    Income before income taxes57,328  97,036  94,849  83,010 72,176
    Income tax expense13,938  23,555  22,911  22,834 15,060
    Net income43,390  73,481  71,938  60,176 57,116
    Preferred stock dividends4,312  6,317  3,779  2,437 2,438
    Net income available to common shareholders$39,078  $67,164  $68,159  $57,739 $54,678


    TEXAS CAPITAL BANCSHARES, INC.
    QUARTERLY FINANCIAL SUMMARY - UNAUDITED
    Consolidated Daily Average Balances, Average Yields and Rates
    (dollars in thousands)
     3rd Quarter 2021 2nd Quarter 2021 1st Quarter 2021 4th Quarter 2020 3rd 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$3,590,591 $8,546 0.94% $3,361,696 $9,222 1.10% $3,225,786 $8,112 1.02% $2,137,481 $7,748 1.44% $525,149 $1,905 1.44%
    Investment securities - non-taxable(2)185,221 2,138 4.58% 181,574 2,147 4.74% 196,785 2,247 4.63% 200,781 2,337 4.63% 190,797 2,239 4.67%
    Federal funds sold and securities purchased under resale agreements653 — 0.12% 713 — 0.18% 4,605 1 0.07% 1,709 1 0.13% 12,051 1 0.04%
    Interest-bearing deposits in other banks9,045,442 3,606 0.16% 11,583,046 2,961 0.10% 11,840,942 2,932 0.10% 10,808,548 2,792 0.10% 11,028,962 2,877 0.10%
    LHS, at fair value18,791 54 1.14% 93,164 781 3.36% 243,326 1,595 2.66% 410,637 2,475 2.40% 543,606 3,867 2.83%
    LHI, mortgage finance loans7,987,521 58,913 2.93% 7,462,223 57,401 3.09% 8,177,759 64,942 3.22% 9,550,119 78,906 3.29% 9,061,984 76,464 3.36%
    LHI(1)(2)15,266,167 147,423 3.83% 15,242,975 152,515 4.01% 15,457,888 149,196 3.91% 15,620,410 161,750 4.12% 16,286,036 157,230 3.84%
    Less allowance for credit
    losses on loans    		220,984 — —  241,676 — —  254,697 — —  290,189 — —  264,769 — — 
    LHI, net of allowance23,032,704 206,336 3.55% 22,463,522 209,916 3.75% 23,380,950 214,138 3.71% 24,880,340 240,656 3.85% 25,083,251 233,694 3.71%
    Total earning assets35,873,402 220,680 2.44% 37,683,715 225,027 2.40% 38,892,394 229,025 2.39% 38,439,496 256,009 2.65% 37,383,816 244,583 2.60%
    Cash and other assets855,555    996,946    1,064,679    1,031,195    1,037,760   
    Total assets$36,728,957    $38,680,661    $39,957,073    $39,470,691    $38,421,576   
    Liabilities and Stockholders’ Equity                   
    Transaction deposits$3,012,547 $4,737 0.62% $3,795,152 $5,395 0.57% $3,991,966 $5,861 0.60% $4,384,493 $6,604 0.60% $4,275,574 $6,652 0.62%
    Savings deposits10,044,995 8,262 0.33% 11,296,382 8,990 0.32% 12,889,974 10,788 0.34% 12,982,189 12,671 0.39% 12,786,719 12,808 0.40%
    Time deposits1,640,562 1,720 0.42% 1,755,993 1,886 0.43% 2,204,242 3,355 0.62% 2,355,199 4,544 0.77% 2,844,083 8,370 1.17%
    Total interest bearing deposits14,698,104 14,719 0.40% 16,847,527 16,271 0.39% 19,086,182 20,004 0.43% 19,721,881 23,819 0.48% 19,906,376 27,830 0.56%
    Other borrowings2,299,692 748 0.13% 2,349,718 502 0.09% 2,686,398 2,592 0.39% 3,022,077 3,517 0.46% 2,811,435 3,493 0.49%
    Long-term debt927,626 10,586 4.53% 881,309 10,723 4.88% 464,731 5,743 5.01% 395,841 4,817 4.84% 395,749 4,839 4.87%
    Total interest bearing liabilities17,925,422 26,053 0.58% 20,078,554 27,496 0.55% 22,237,311 28,339 0.52% 23,139,799 32,153 0.55% 23,113,560 36,162 0.62%
    Demand deposits15,363,568    15,139,546    14,421,505    13,174,114    12,202,065   
    Other liabilities275,317    274,401    309,644    303,480    314,500   
    Stockholders’ equity3,164,650    3,188,160    2,988,613    2,853,298    2,791,451   
    Total liabilities and stockholders’ equity$36,728,957    $38,680,661    $39,957,073    $39,470,691    $38,421,576   
    Net interest income(2) $194,627    $197,531    $200,686    $223,856    $208,421  
    Net interest margin  2.15%   2.10%   2.09%   2.32%   2.22%

    (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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