Texas Capital Bancshares, Inc. Announces Operating Results for 2013

GlobeNewswire

DALLAS, Jan. 22, 2014 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the fourth quarter and full year of 2013.

  • Net income decreased 9% on a linked quarter basis and decreased 3% from the fourth quarter of 2012
  • EPS decreased 9% on a linked quarter basis and decreased 12% from the fourth quarter of 2012
  • Demand deposits increased 3% and total deposits increased 3% on a linked quarter basis, growing 32% and 24%, respectively, from the fourth quarter of 2012
  • Loans held for investment, excluding mortgage finance, increased 5% and total loans increased 9% on a linked quarter basis, growing 25% and 13%, respectively, from the fourth quarter of 2012

"2013 has been an extraordinary year for Texas Capital as we continue to build our business consistent with our successful, long-standing model," said Keith Cargill, CEO. "As we win top client-facing talent and the critically important people who deliver outstanding service, products and support, we build growing earnings power for the future. This is consistent with our upcoming capital raise to support our anticipated strong growth."

FINANCIAL SUMMARY


(dollars and shares in thousands)







2013 2012 % Change
ANNUAL OPERATING RESULTS(1)


Net Income $121,046 $120,709 0%
Net Income Available to Common Shareholders $113,652 $120,709 (6)%
Diluted EPS $2.72 $3.01 (10)%
ROA 1.17% 1.35%
ROE 12.82% 16.93%
Diluted Shares 41,780 40,166




QUARTERLY OPERATING RESULTS(1)


Net Income $30,356 $31,435 (3)%
Net Income Available to Common Shareholders $27,918 $31,435 (11)%
Diluted EPS $.67 $.76 (12)%
ROA 1.10% 1.27%
ROE 11.94% 15.35%
Diluted Shares 41,889 41,505




BALANCE SHEET(1)


Total Assets $11,714,397 $10,540,542 11%
Demand Deposits 3,347,567 2,535,375 32%
Total Deposits 9,257,379 7,440,804 24%
Loans Held for Investment 8,486,309 6,785,535 25%
Loans Held for Investment, Mortgage Finance 2,784,265 3,175,272 (12)%
Total Loans 11,270,574 9,960,807 13%
Stockholders' Equity 1,096,350 836,242 31%




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

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income from continuing operations of $121.0 million and net income available to common shareholders of $113.7 million for the year ended December 31, 2013 compared to $120.7 million for both net income from continuing operations and net income available to common shareholders for the year ended December 31, 2012. For the fourth quarter of 2013, net income from continuing operations was $30.4 million and net income available to common shareholders was $27.9 million, compared to $31.4 million for both net income from continuing operations and net income available to common shareholders for the same period in 2012. On a fully diluted basis, earnings per common share from continuing operations were $2.72 for the year ended December 31, 2013, compared to $3.01 for the same period in 2012. For the fourth quarter of 2013, diluted earnings per share was $.67 compared to $.76 for the same period in 2012. The discussion below relates only to continuing operations.

Return on average common equity was 12.82 percent and return on average assets was 1.17 percent for the year ended December 31, 2013, compared to 16.93 percent and 1.35 percent, respectively, for 2012. Return on average common equity was 11.94 percent and return on average assets was 1.10 percent for the fourth quarter of 2013, compared to 15.35 percent and 1.27 percent, respectively, for the fourth quarter of 2012.

Net interest income was $111.5 million for the fourth quarter of 2013, compared to $108.8 million in the third quarter of 2013 and $101.2 million for the fourth quarter of 2012. For 2013, net interest income reached $419.5 million compared to $376.9 million in 2012. The net interest margin in the fourth quarter of 2013 was 4.21 percent, a 6 basis point decrease from the fourth quarter of 2012 and consistent with the third quarter of 2013. The year-to-date decrease in net interest margin is due to the growth in loans with lower yields offset with a reduction in the total cost of deposits and borrowed funds.

Average loans, excluding mortgage finance, for the year ended December 31, 2013 were $7.5 billion, an increase of $1.4 billion, or 23 percent, from 2012. Average mortgage finance loans for the year ended December 31, 2013 were $2.3 billion, consistent with 2012. Average loans, excluding mortgage finance, for the fourth quarter of 2013 were $8.1 billion, an increase of $1.4 billion, or 21 percent, from the fourth quarter of 2012 and an increase of $410.7 million, or 5 percent, from the third quarter of 2013. Average mortgage finance loans for the fourth quarter of 2013 decreased $419.4 million to $2.2 billion compared to the fourth quarter of 2012 and decreased $123.4 million from the third quarter of 2013.

Average total deposits for the fourth quarter of 2013 increased $2.2 billion from the fourth quarter of 2012 and increased $439.1 million from the third quarter of 2013. For the same periods, the average balance of demand deposits increased $932.5 million, or 40 percent, to $3.3 billion from $2.4 billion during the fourth quarter of 2012 and increased $164.7 million, or 5 percent, from the third quarter of 2013.

In the fourth quarter of 2013, 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 2013 compared to $5.5 million in the fourth quarter of 2012 and $5.0 million in the third quarter of 2013. We recorded a $5.0 million provision for credit losses in the fourth quarter of 2013 compared to $4.5 million in the fourth quarter of 2012 and $5.0 million in the third quarter of 2013. For 2013, the total provision for credit losses was $19.0 million, an increase of 65 percent from $11.5 million in 2012. The substantial majority of the provision for the year ended December 31, 2013 was directly related to the significant growth in loans excluding mortgage finance loans during the year. Due to growth and improving credit quality, at December 31, 2013, the combined reserve decreased to 1.09 percent of loans excluding mortgage finance loans as compared to 1.15 percent at December 31, 2012 and 1.10 percent at September 30, 2013. 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 2013, net charge-offs were $1.3 million compared to net charge-offs of $3.5 million in the fourth quarter of 2012 and net charge-offs of $46,000 in the third quarter of 2013. For 2013, net charge-offs were $4.9 million, .07 percent of average loans, excluding mortgage finance loans, compared to $6.1 million and a ratio of .10 percent in 2012. Non-accrual loans were $32.4 million, or .38 percent of loans excluding mortgage finance loans as of December 31, 2013, $55.8 million, or .82 percent, as of December 31, 2012 and $35.7 million, or .44 percent, as of September 30, 2013. At December 31, 2013, total OREO was $5.1 million compared to $16.0 million as of December 31, 2012, and $12.8 million as of September 30, 2013. The OREO balance of $5.1 million at December 31, 2013 does not have a valuation allowance. The valuation charge for OREO reflected in non-interest expense was $466,000 in the fourth quarter of 2013 compared to $955,000 in the fourth quarter of 2012 and none in the third quarter of 2013.

Non-interest income decreased $1.7 million during the fourth quarter of 2013, or 13 percent, compared to the same period of 2012 primarily related to a $1.6 million decrease in brokered loan fees as a result of declining mortgage finance volumes during the fourth quarter of 2013 as compared to the fourth of 2012.

Non-interest expense for the fourth quarter of 2013 increased $10.2 million, or 17 percent, to $70.3 million from $60.1 million in the fourth quarter of 2012. The increase is primarily related to an $11.8 million increase in salaries and employee benefits to $43.0 million for the fourth quarter of 2013 from $31.2 million for the same period in 2012, which was primarily due to general business growth and an increase in cost of incentives tied to stock price.

Stockholders' equity increased by 31 percent from $836.2 million at December 31, 2012 to $1.1 billion at December 31, 2013, primarily due to the offering of 6.0 million preferred shares for net proceeds of $145.1 million in the first quarter of 2013 and retained income during 2013. The Bank is well capitalized under regulatory guidelines and at December 31, 2013, our ratio of tangible common equity to total tangible assets was 7.9 percent.

ABOUT TEXAS CAPITAL BANCSHARES, INC.

Texas Capital Bancshares, Inc. (TCBI), a member of the Russell 2000(R) Index and the S&P SmallCap 600(R), is the parent company of Texas Capital Bank, a commercial bank that delivers highly personalized financial services to businesses and individual 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

2013 2013 2013 2013 2012
CONSOLIDATED STATEMENT OF INCOME




Interest income $117,965 $115,217 $107,264 $104,179 $107,769
Interest expense 6,490 6,441 6,044 6,137 6,614
Net interest income 111,475 108,776 101,220 98,042 101,155
Provision for credit losses 5,000 5,000 7,000 2,000 4,500
Net interest income after provision for credit losses 106,475 103,776 94,220 96,042 96,655
Non-interest income 11,184 10,431 11,128 11,281 12,836
Non-interest expense 70,291 62,009 68,734 55,700 60,074
Income from continuing operations before income taxes 47,368 52,198 36,614 51,623 49,417
Income tax expense 17,012 18,724 12,542 18,479 17,982
Income from continuing operations 30,356 33,474 24,072 33,144 31,435
Income (loss) from discontinued operations (after-tax) 3 2 1 (1) (6)
Net income 30,359 33,476 24,073 33,143 31,429
Preferred stock dividends 2,438 2,437 2,438 81 --
Net income available to common shareholders $27,921 $31,039 $21,635 $33,062 $31,429
Diluted EPS from continuing operations $.67 $.74 $.52 $.80 $.76
Diluted EPS $.67 $.74 $.52 $.80 $.76






Diluted shares 41,888,768 41,791,674 41,723,525 41,429,244 41,505,026






CONSOLIDATED BALANCE SHEET DATA




Total assets $11,714,397 $10,797,448 $10,977,990 $10,020,565 $10,540,542
Loans held for investment 8,486,309 8,051,328 7,510,662 6,920,011 6,785,535
Loans held for investment, mortgage finance 2,784,265 2,262,085 2,838,234 2,577,830 3,175,272
Securities 63,214 67,815 75,861 87,527 100,195
Demand deposits 3,347,567 3,242,060 2,928,735 2,628,446 2,535,375
Total deposits 9,257,379 8,957,081 7,980,598 7,745,831 7,440,804
Other borrowings 1,025,630 449,724 1,634,630 938,134 1,947,161
Subordinated notes 111,000 111,000 111,000 111,000 111,000
Long-term debt 113,406 113,406 113,406 113,406 113,406
Stockholders' equity 1,096,350 1,066,629 1,034,955 1,013,195 836,242






End of period shares outstanding 41,036,370 40,934,623 40,862,481 40,771,414 40,727,579
Book value (excluding securities gains/losses) $23.02 $22.35 $21.60 $21.10 $20.45
Tangible book value (excluding securities gains/losses) $22.50 $21.82 $21.08 $20.62 $19.96






SELECTED FINANCIAL RATIOS




Net interest margin 4.21% 4.21% 4.19% 4.27% 4.27%
Return on average assets 1.10% 1.25% 0.95% 1.38% 1.27%
Return on average common equity 11.94% 13.74% 9.94% 15.82% 15.35%
Non-interest income to earning assets .42% .40% .46% .49% .54%
Efficiency ratio 57.3% 52.0% 61.2% 50.9% 52.7%
Efficiency ratio (excluding OREO valuation/write-down) 56.9% 52.0% 60.8% 50.9% 51.9%
Non-interest expense to earning assets 2.65% 2.40% 2.84% 2.42% 2.53%
Non-interest expense to earning assets (excluding OREO valuation charge) 2.63% 2.40% 2.83% 2.42% 2.49%
Tangible common equity to total tangible assets 7.9% 8.3% 7.9% 8.4% 7.7%

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)

December 31, December 31, %

2013 2012 Change
Assets


Cash and due from banks $92,484 $111,938 (17)%
Interest-bearing deposits 61,337 94,410 (35)%
Federal funds sold 90 -- 100%
Securities, available-for-sale 63,214 100,195 (37)%
Loans held for sale from discontinued operations 294 302 (3)%
Loans held for investment, mortgage finance 2,784,265 3,175,272 (12)%
Loans held for investment (net of unearned income) 8,486,309 6,785,535 25%
Less: Allowance for loan losses 87,604 74,337 18%
Loans held for investment, net 11,182,970 9,886,470 13%
Premises and equipment, net 11,482 11,445 (0)%
Accrued interest receivable and other assets 281,534 316,201 (11)%
Goodwill and intangibles, net 21,286 19,883 7%
Total assets $11,714,691 $10,540,844 11%




Liabilities and Stockholders' Equity


Liabilities:


Deposits:


Non-interest bearing $3,347,567 $2,535,375 32%
Interest bearing 5,579,505 4,576,120 22%
Interest bearing in foreign branches 330,307 329,309 0%
Total deposits 9,257,379 7,440,804 24%




Accrued interest payable 749 650 15%
Other liabilities 110,177 91,581 20%
Federal funds purchased 148,650 273,179 (46)%
Repurchase agreements 21,954 23,936 (8)%
Other borrowings 855,026 1,650,046 (48)%
Subordinated notes 111,000 111,000 --
Trust preferred subordinated debentures 113,406 113,406 --
Total liabilities 10,618,341 9,704,602 9%




Stockholders' equity:


Preferred stock, $.01 par value, $1,000 liquidation value:


Authorized shares -- 10,000,000


Issued shares 150,000 -- 100%
Common stock, $.01 par value:


Authorized shares -- 100,000,000


Issued shares -- 41,036,787 and 40,727,996 at December 31, 2013 and 2012, respectively 410 407 1%
Additional paid-in capital 448,208 450,116 (0)%
Retained earnings 496,112 382,455 30%
Treasury stock (shares at cost: 417 at December 31, 2013 and 2012) (8) (8) --
Accumulated other comprehensive income, net of taxes 1,628 3,272 (50)%
Total stockholders' equity 1,096,350 836,242 31%
Total liabilities and stockholders' equity $11,714,691 $10,540,844 11%

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

2013 2012 2013 2012
Interest income



Interest and fees on loans $117,261 $106,653 $441,314 $393,548
Securities 621 1,053 3,015 4,688
Federal funds sold 24 6 65 13
Deposits in other banks 59 57 231 208
Total interest income 117,965 107,769 444,625 398,457
Interest expense



Deposits 3,858 3,312 14,030 13,644
Federal funds purchased 116 190 686 979
Repurchase agreements 5 3 18 13
Other borrowings 40 615 515 2,149
Subordinated notes 1,840 1,829 7,327 2,037
Trust preferred subordinated debentures 631 665 2,536 2,756
Total interest expense 6,490 6,614 25,112 21,578
Net interest income 111,475 101,155 419,513 376,879
Provision for credit losses 5,000 4,500 19,000 11,500
Net interest income after provision for credit losses 106,475 96,655 400,513 365,379
Non-interest income



Service charges on deposit accounts 1,674 1,693 6,783 6,605
Trust fee income 1,250 1,260 5,023 4,822
Bank owned life insurance (BOLI) income 533 510 1,917 2,168
Brokered loan fees 3,380 4,978 16,980 17,596
Swap fees 1,904 2,093 5,520 4,909
Other 2,443 2,302 7,801 6,940
Total non-interest income 11,184 12,836 44,024 43,040
Non-interest expense



Salaries and employee benefits 43,008 31,198 157,752 121,456
Net occupancy expense 4,487 3,916 16,821 14,852
Marketing 4,183 3,980 16,203 13,449
Legal and professional 5,520 5,320 18,104 17,557
Communications and technology 3,597 3,070 13,762 11,158
FDIC insurance assessment 1,923 1,071 8,057 5,568
Allowance and other carrying costs for OREO 609 1,369 1,788 9,075
Litigation settlement expense -- 4,000 -- 4,000
Other 6,964 6,150 24,247 22,729
Total non-interest expense 70,291 60,074 256,734 219,844
Income from continuing operations before income taxes 47,368 49,417 187,803 188,575
Income tax expense 17,012 17,982 66,757 67,866
Income from continuing operations 30,356 31,435 121,046 120,709
Loss from discontinued operations (after-tax) 3 (6) 5 (37)
Net income 30,359 31,429 121,051 120,672
Preferred stock dividends 2,438 -- 7,394 --
Net income available to common shareholders $27,921 $31,429 $113,657 $120,672





Basic earnings per common share:



Income from continuing operations $.68 $.78 $2.78 $3.09
Net income $.68 $.78 $2.78 $3.09





Diluted earnings per common share:



Income from continuing operations $.67 $.76 $2.72 $3.01
Net income $.67 $.76 $2.72 $3.00

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)

4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter

2013 2013 2013 2013 2012
Reserve for loan losses:




Beginning balance $84,006 $79,428 $75,000 $74,337 $73,722
Loans charged-off:




Commercial 1,605 496 2,826 1,648 4,044
Real estate -- term -- 13 26 105 --
Consumer -- -- 26 19 --
Leases -- 2 -- -- 34
Total loans charged-off 1,605 511 2,878 1,772 4,078
Recoveries:




Commercial 225 233 348 397 350
Real estate -- term 60 195 7 8 226
Consumer 9 19 15 30 7
Leases 43 18 140 121 21
Total recoveries 337 465 510 556 604
Net charge-offs 1,268 46 2,368 1,216 3,474
Provision for loan losses 4,866 4,624 6,796 1,879 4,089
Ending balance $87,604 $84,006 $79,428 $75,000 $74,337






Reserve for off-balance sheet credit losses:




Beginning balance $4,556 $4,180 $3,976 $3,855 $3,444
Provision for off-balance sheet credit losses 134 376 204 121 411
Ending balance $4,690 $4,556 $4,180 $3,976 $3,855






Total reserves for credit losses $92,294 $88,562 $83,608 $78,976 $78,192






Total provision for credit losses $5,000 $5,000 $7,000 $2,000 $4,500






Reserve to loans .78% .81% .77% .79% .75%
Reserve to loans excluding mortgage finance loans(2) 1.03% 1.04% 1.06% 1.08% 1.10%
Reserve to average loans .84% .83% .83% .81% .88%
Reserve to average loans excluding mortgage finance loans(2) 1.08% 1.09% 1.11% 1.10% 1.12%
Net charge-offs to average loans(1) .05% .00% .10% .05% .15%
Net charge-offs to average loans excluding mortgage finance loans(1)(2) .06% .00% .13% .07% .21%
Net charge-offs to average loans for last twelve months(1) .05% .07% .09% .07% .07%
Net charge-offs to average loans, excluding mortgage finance loans, for last twelve months(1)(2) .07% .10% .12% .10% .10%
Total provision for credit losses to average loans(1) .19% .20% .29% .09% .19%
Total provision for credit losses to average loans excluding mortgage finance loans(1)(2) .24% .26% .39% .12% .27%
Combined reserves for credit losses to loans .82% .86% .81% .83% .78%
Combined reserves for credit losses to loans, excluding mortgage finance loans(2) 1.09% 1.10% 1.11% 1.14% 1.15%






Non-performing assets (NPAs):




Non-accrual loans $32,375 $35,737 $38,450 $43,424 $55,833
Other real estate owned (OREO) (4) 5,110 12,805 13,053 14,426 15,991
Other repossessed assets -- -- 19 -- 42
Total $37,485 $48,542 $51,522 $57,850 $71,866






Non-accrual loans to loans .29% .35% .37% .46% .56%
Non-accrual loans to loans excluding mortgage finance loans(2) .38% .44% .51% .63% .82%
Total NPAs to loans plus OREO .33% .47% .50% .61% .72%
Total NPAs to loans excluding mortgage finance loans plus OREO(2) .44% .60% .68% .83% 1.06%
Total NPAs to earning assets .33% .47% .49% .60% .71%
Reserve for loan losses to non-accrual loans 2.7x 2.4x 2.1x 1.7x 1.3x






Restructured loans $1,935 $4,691 $4,765 $11,755 $10,407
Loans past due 90 days and still accruing(3) $9,325 $7,510 $7,633 $12,614 $3,674






Loans past due 90 days to loans .08% .07% .07% .13% .04%
Loans past due 90 days to loans excluding mortgage finance loans(2) .11% .09% .10% .18% .05%






(1) Interim period ratios are annualized.
(2) Mortgage finance loans were previously classified as loans held for sale but have been reclassified as loans held for investment. The indicated ratios are presented with and excluding the mortgage finance loans because the risk profile of our mortgage finance loans is different than our other loans held for investment. No provision for credit losses is allocated to these loans based on the internal risk grade assigned.
(3) At December 31, 2013, loans past due 90 days and still accruing includes premium finance loans of $3.8 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, 2013, there is no valuation allowance recorded against the OREO balance.

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in thousands)







4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter

2013 2013 2013 2013 2012
Interest income




Interest and fees on loans $117,261 $114,453 $106,418 $103,182 $106,653
Securities 621 682 773 939 1,053
Federal funds sold 24 22 13 6 6
Deposits in other banks 59 60 60 52 57
Total interest income 117,965 115,217 107,264 104,179 107,769
Interest expense




Deposits 3,858 3,699 3,228 3,245 3,312
Federal funds purchased 116 152 206 212 190
Repurchase agreements 5 4 5 4 3
Other borrowings 40 119 143 213 615
Subordinated notes 1,840 1,829 1,829 1,829 1,829
Trust preferred subordinated debentures 631 638 633 634 665
Total interest expense 6,490 6,441 6,044 6,137 6,614
Net interest income 111,475 108,776 101,220 98,042 101,155
Provision for credit losses 5,000 5,000 7,000 2,000 4,500
Net interest income after provision for credit losses 106,475 103,776 94,220 96,042 96,655
Non-interest income




Service charges on deposit accounts 1,674 1,659 1,749 1,701 1,693
Trust fee income 1,250 1,263 1,269 1,241 1,260
Bank owned life insurance (BOLI) income 533 423 463 498 510
Brokered loan fees 3,380 4,078 4,778 4,744 4,978
Swap fees 1,904 983 981 1,652 2,093
Other 2,443 2,025 1,888 1,445 2,302
Total non-interest income 11,184 10,431 11,128 11,281 12,836
Non-interest expense




Salaries and employee benefits 43,008 36,012 45,191 33,541 31,198
Net occupancy expense 4,487 4,342 4,135 3,857 3,916
Marketing 4,183 3,974 4,074 3,972 3,980
Legal and professional 5,520 3,937 4,707 3,940 5,320
Communications and technology 3,597 3,696 3,347 3,122 3,070
FDIC insurance assessment 1,923 4,357 699 1,078 1,071
Allowance and other carrying costs for OREO 609 267 482 430 1,369
Litigation settlement expense -- (908) -- -- 4,000
Other 6,964 6,332 6,099 5,760 6,150
Total non-interest expense 70,291 62,009 68,734 55,700 60,074
Income from continuing operations before income taxes 47,368 52,198 36,614 51,623 49,417
Income tax expense 17,012 18,724 12,542 18,479 17,982
Income from continuing operations 30,356 33,474 24,072 33,144 31,435
Income (loss) from discontinued operations (after-tax) 3 2 1 (1) (6)
Net income 30,359 33,476 24,073 33,143 31,429
Preferred stock dividends 2,438 2,437 2,438 81 --
Net income available to common shareholders $27,921 $31,039 $21,635 $33,062 $31,429

TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY -- UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
Continuing Operations
(Dollars in thousands)

















4th Quarter 2013 3rd Quarter 2013 2nd Quarter 2013 1st Quarter 2013 4th Quarter 2012

Average Revenue/ Yield/ Average Revenue/ Yield/ Average Revenue/ Yield/ Average Revenue/ Yield/ Average Revenue/ Yield/

Balance Expense (1) Rate Balance Expense (1) Rate Balance Expense (1) Rate Balance Expense (1) Rate Balance Expense (1) Rate
Assets














Securities -- Taxable $50,281 $480 3.79% $54,838 $522 3.78% $60,063 $594 3.97% $71,220 $729 4.15% $78,182 $811 4.13%
Securities -- Non-taxable(2) 14,786 217 5.82% 16,879 246 5.78% 18,843 275 5.85% 22,174 323 5.91% 25,301 372 5.85%
Federal funds sold and securities purchased under resale agreements 59,409 24 0.16% 78,896 22 0.11% 54,448 13 0.10% 24,785 6 0.10% 21,617 6 0.11%
Deposits in other banks 99,185 59 0.24% 88,717 60 0.27% 91,177 60 0.26% 78,718 52 0.27% 69,886 57 0.32%
Loans held for investment, mortgage finance loans 2,238,730 20,236 3.59% 2,362,118 22,547 3.79% 2,406,246 22,440 3.74% 2,362,646 22,641 3.89% 2,658,092 26,440 3.96%
Loans held for investment 8,142,569 97,025 4.73% 7,731,901 91,906 4.72% 7,152,323 83,978 4.71% 6,842,766 80,541 4.77% 6,662,817 80,213 4.79%
Less reserve for loan losses 84,009 -- -- 79,551 -- -- 75,006 -- -- 74,442 -- -- 73,912 -- --
Loans, net of reserve 10,297,290 117,261 4.52% 10,014,468 114,453 4.53% 9,483,563 106,418 4.50% 9,130,970 103,182 4.58% 9,246,997 106,653 4.59%
Total earning assets 10,520,951 118,041 4.45% 10,253,798 115,303 4.46% 9,708,094 107,360 4.44% 9,327,867 104,292 4.53% 9,441,983 107,899 4.55%
Cash and other assets 378,315

383,968

402,898

401,692

427,299

Total assets $10,899,266

$10,637,766

$10,110,992

$9,729,559

$9,869,282

















Liabilities and Stockholders' Equity














Transaction deposits $787,720 $76 0.04% $794,630 $102 0.05% $1,051,199 $233 0.09% $1,003,735 $253 0.10% $941,947 $244 0.10%
Savings deposits 4,365,746 3,079 0.28% 4,057,792 2,863 0.28% 3,340,420 2,292 0.28% 3,246,675 2,297 0.29% 2,933,904 2,299 0.31%
Time deposits 385,546 394 0.41% 402,920 414 0.41% 397,868 407 0.41% 403,113 414 0.42% 423,685 448 0.42%
Deposits in foreign branches 348,240 309 0.35% 357,532 320 0.36% 340,713 296 0.35% 335,265 281 0.34% 362,580 321 0.35%
Total interest bearing deposits 5,887,252 3,858 0.26% 5,612,874 3,699 0.26% 5,130,200 3,228 0.25% 4,988,788 3,245 0.26% 4,662,116 3,312 0.28%
Other borrowings 314,018 161 0.20% 539,767 275 0.20% 727,158 354 0.20% 1,041,573 429 0.17% 1,725,129 808 0.19%
Subordinated notes 111,000 1,840 6.58% 111,000 1,829 6.54% 111,000 1,829 6.61% 111,000 1,829 6.68% 111,000 1,829 6.56%
Trust preferred subordinated debentures 113,406 631 2.21% 113,406 638 2.23% 113,406 633 2.24% 113,406 634 2.27% 113,406 665 2.33%
Total interest bearing liabilities 6,425,676 6,490 0.40% 6,377,047 6,441 0.40% 6,081,764 6,044 0.40% 6,254,767 6,137 0.40% 6,611,651 6,614 0.40%
Demand deposits 3,289,307

3,124,602

2,914,341

2,529,927

2,356,758

Other liabilities 106,461

89,640

91,608

90,538

86,308

Stockholders' equity 1,077,822

1,046,477

1,023,279

854,327

814,565

Total liabilities and stockholders' equity $10,899,266

$10,637,766

$10,110,992

$9,729,559

$9,869,282

















Net interest income
$111,551

$108,862

$101,316

$98,155

$101,285
Net interest margin

4.21%

4.21%

4.19%

4.27%

4.27%
















(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:
MEDIA CONTACT
Heather Worley, 214.932.6827
heather.worley@texascapitalbank.com
INVESTOR CONTACT
Myrna Vance, 214.932.6646
myrna.vance@texascapitalbank.com
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