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

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DALLAS, April 21, 2021 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the first quarter of 2021.

"In my first 90 days as CEO, we have achieved momentum in establishing the foundation from which we can move forward," said Rob C. Holmes, President and CEO. "In the first quarter alone, we were able to execute the largest capital raise in our history and close on our first warehouse lending credit risk transfer transaction, both of which position TCBI for future growth. Looking ahead, we will continue to supplement our workforce with new talent, take steps to drive shareholder value and develop our fulsome long-term strategy. As promised, I look forward to sharing it with you in the third quarter."

  • Net income of $71.9 million ($1.33 per diluted share) reported for the first quarter of 2021, an increase of $11.8 million on a linked quarter basis and an increase of $88.6 million from the first quarter of 2020.

  • Total mortgage finance loans, including mortgage correspondent aggregation ("MCA") loans held for sale ("LHS"), decreased 2% on a linked quarter basis (decreasing 15% on an average basis) and increased 10% from the first quarter of 2020 (decreasing 17% on an average basis).

  • Demand deposits increased 19% and total deposits increased 8% on a linked quarter basis (increasing 9% and 2%, respectively, on an average basis), and increased 61% and 23%, respectively, from the first quarter of 2020 (increasing 44% and 21%, respectively, on an average basis).

  • Loans held for investment ("LHI"), excluding mortgage finance loans, were flat on a linked quarter basis (decreasing 1% on an average basis) and decreased 9% from the first quarter of 2020 (decreasing 7% on an average basis).

  • Issuance of $300.0 million in 5.75% fixed rate non-cumulative perpetual preferred stock, completed in the first quarter of 2021, providing additional equity to be used for general corporate purchases, including funding regulatory capital infusions into the Bank. We also intend to use a portion of the net proceeds to redeem, subject to all applicable regulatory approvals, our existing 6.5% fixed rate non-cumulative perpetual preferred stock.

  • Issuance of $275.0 million senior unsecured credit-linked notes in the first quarter of 2021. The net proceeds of this offering will be used to expand the Bank's warehouse lending program and better serve our clients in all market environments.

FINANCIAL SUMMARY

(dollars and shares in thousands)

Q1 2021

Q1 2020

% Change

QUARTERLY OPERATING RESULTS

Net income

$

71,938

$

(16,687

)

(531

)

%

Net income available to common stockholders

$

68,159

$

(19,125

)

(456

)

%

Diluted earnings per common share

$

1.33

$

(0.38

)

(450

)

%

Diluted common shares

51,070

50,475

1

%

ROA

0.73

%

(0.20

)

%

ROE

10.08

%

(2.85

)

%

BALANCE SHEET

LHS

$

176,286

$

774,064

(77

)

%

LHI, mortgage finance

9,009,081

7,588,803

19

%

LHI

15,399,174

16,857,579

(9

)

%

Total LHI

24,408,255

24,446,382

%

Total assets

40,054,433

35,879,416

12

%

Demand deposits

15,174,642

9,420,303

61

%

Total deposits

33,391,970

27,134,263

23

%

Stockholders’ equity

3,159,482

2,772,596

14

%


DETAILED FINANCIALS

For the first quarter of 2021, net income was $71.9 million, compared to net income of $60.2 million for the fourth quarter of 2020, and net loss of $16.7 million for the first quarter of 2020. On a fully diluted basis, earnings per common share were $1.33 for the quarter ended March 31, 2021, compared to earnings per common share of $1.14 for the quarter ended December 31, 2020 and loss per common share of $0.38 for the quarter ended March 31, 2020. The increase in net income for the first quarter of 2021 as compared to the fourth quarter of 2020 resulted primarily from a $38.0 million decrease in the provision for credit losses, offset by a decrease in net interest income.

We recorded a $6.0 million negative provision for credit losses for the first quarter of 2021, compared to a $32.0 million provision for credit losses for the fourth quarter of 2020 and a $96.0 million provision for credit losses for the first quarter of 2020. The linked quarter decrease in provision for credit losses resulted primarily from a decrease in charge-offs and improvement in the economic outlook as the economy begins to recover from the impacts of the COVID-19 pandemic. We recorded $6.4 million in net charge-offs during the first quarter of 2021, including $5.0 million in energy net charge-offs on loans that had been previously identified as problem loans, compared to $65.4 million during the fourth quarter of 2020 and $57.7 million during the first quarter of 2020. Criticized loans totaled $945.1 million at March 31, 2021, compared to $918.4 million at December 31, 2020 and $675.9 million at March 31, 2020. Criticized loan levels remain elevated when compared to pre-pandemic levels due to the downgrade of loans to borrowers that have been impacted by the COVID-19 pandemic.

Non-performing assets ("NPAs") totaled $97.7 million at March 31, 2021, a decrease of $24.3 million compared to the fourth quarter of 2020 and a decrease of $121.4 million compared to the first quarter of 2020. The linked quarter change in NPAs was primarily due to a decline in non-accrual energy loans. The ratio of total LHI NPAs to total LHI plus other real estate owned ("OREO") for the first quarter of 2021 was 0.40%, compared to 0.50% for the fourth quarter of 2020 and 0.90% for the first quarter of 2020.

Net interest income was $200.1 million for the first quarter of 2021, compared to $223.0 million for the fourth quarter of 2020 and $228.3 million for the first quarter of 2020. Net interest margin for the first quarter of 2021 was 2.09%, a decrease of 23 basis points from the fourth quarter of 2020 and a decrease of 69 basis points from the first quarter of 2020. The shift in earning assets, primarily the increases in liquidity assets and investment securities coupled with a decrease in total average loans, contributed to the linked-quarter and year-over-year decreases in net interest margin. LHI yields, excluding mortgage finance loans, decreased 21 basis points from the fourth quarter of 2020, and decreased 98 basis points compared to the first quarter of 2020. LHI, mortgage finance yields for the first quarter of 2021 decreased 7 basis points compared to the fourth quarter of 2020, and increased 7 basis points compared to the first quarter of 2020. Additionally, total cost of deposits for the first quarter of 2021 decreased 5 basis points to 0.24% compared to 0.29% for the fourth quarter of 2020, and decreased 66 basis points from .90% for the first quarter of 2020.

Non-interest income for the first quarter of 2021 decreased $3.8 million, or 9%, compared to the fourth quarter of 2020, and increased $27.3 million, or 232%, compared to the first quarter of 2020. The linked quarter decrease was primarily related to decreases in brokered loans fees, net gain/(loss) on sale of LHS and other non-interest income, partially offset by an increase in service charges on deposit accounts. The year-over-year increase was primarily related to increases in net gain/(loss) on sale of LHS, servicing income and other non-interest income. The linked quarter decreases in brokered loan fees and net gain/(loss) on sale of LHS were primarily due to a decrease in total mortgage finance volumes in the first quarter of 2021. The year-over-year increase in net gain/(loss) on sale of LHS was due to lower hedge costs in the first quarter of 2021 as a result of holding purchased loans for shorter durations than in prior periods, and is offset by the year-over-year decline in net interest income on LHS.

Non-interest expense for the first quarter of 2021 decreased $570,000, or less than 1 percent, compared to the fourth quarter of 2020, and decreased $15.1 million, or 9%, compared to the first quarter of 2020. The linked quarter decrease was primarily related to decreases in marketing expense, legal and professional expense and servicing-related expenses, offset by an increase in salaries and employee benefits, which is typically higher in the first quarter due to FICA and other seasonal payroll expenses that peak in the first quarter. The year-over-year decrease was primarily due to decreases in marketing expense, legal and professional expense, servicing-related expenses and merger-related expenses, offset by increases in salaries and employee benefits and communications and technology expenses.

All regulatory ratios continue to be in excess of "well-capitalized" requirements as of March 31, 2021. Our CET 1, tier 1 capital, total capital and leverage ratios were 10.2%, 12.3%, 14.0% and 8.3%, respectively, at March 31, 2021, compared to 9.4%, 10.3%, 12.1% and 7.5%, respectively, at December 31, 2020. At March 31, 2021, our ratio of tangible common equity to total tangible assets was 6.7% compared to 7.2% at December 31, 2020.

About Texas Capital Bancshares, Inc.

Texas Capital Bancshares, Inc. (NASDAQ®: TCBI), a member of the Russell 2000® Index and the S&P MidCap 400®, is the parent company of Texas Capital Bank, a commercial bank that delivers highly personalized financial services to businesses and entrepreneurs. Headquartered in Dallas, the bank has full-service locations in Austin, Dallas, Fort Worth, Houston and San Antonio.

Forward Looking Statements

This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding our financial condition, results of operations, business plans and future performance. These statements are not historical in nature and can generally be identified by such words as “believe,” “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,” “could,” “should”, “projects,” “targeted,” “continue,” “intend” and similar expressions.

Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. A number of factors, many of which are beyond our control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, but are not limited to, (1) the credit quality of our loan portfolio, (2) general economic conditions in the United States, globally and in our markets and the impact they may have on us and our customers, including the continued impact on our customers from volatility in oil and gas prices, (3) the material risks and uncertainties for the U.S. and world economies, and for our business, resulting from the COVID-19 pandemic and any other pandemic, epidemic or health related crisis, (4) expectations regarding rates of default and credit losses, (5) volatility in the mortgage industry, (6) our business strategies, (7) our expectations about future financial performance, future growth and earnings, (8) the appropriateness of our allowance for credit losses and provision for credit losses, (9) our ability to identify, employ and retain qualified employees, (10) the impact of changing regulatory requirements and legislative changes on our business, (11) increased competition, (12) interest rate risk, (13)greater than expected costs or difficulties related to the integration and development of new lines of business, new products or service offerings and new technologies, (14) technological changes, (15) the cost and effects of cyber incidents or other failures, interruptions or security breaches of our systems or those of third party providers and (16) our success at managing the risk and uncertainties involved in the foregoing factors. In addition, statements about the effects of the COVID-19 pandemic on the firm’s business, results, financial position and liquidity are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected.

These and other factors that could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. The information contained in this communication speaks only as of its date. Except to the extent required by applicable law or regulation, we disclaim any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments.


TEXAS CAPITAL BANCSHARES, INC.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

(dollars in thousands except per share data)

1st Quarter

4th Quarter

3rd Quarter

2nd Quarter

1st Quarter

2021

2020

2020

2020

2020

CONSOLIDATED STATEMENTS OF INCOME

Interest income

$

228,412

$

255,163

$

243,731

$

252,010

$

306,008

Interest expense

28,339

32,153

36,162

42,082

77,689

Net interest income

200,073

223,010

207,569

209,928

228,319

Provision for credit losses

(6,000

)

32,000

30,000

100,000

96,000

Net interest income after provision for credit losses

206,073

191,010

177,569

109,928

132,319

Non-interest income

39,092

42,886

60,348

70,502

11,780

Non-interest expense

150,316

150,886

165,741

222,352

165,417

Income/(loss) before income taxes

94,849

83,010

72,176

(41,922

)

(21,318

)

Income tax expense/(benefit)

22,911

22,834

15,060

(7,606

)

(4,631

)

Net income/(loss)

71,938

60,176

57,116

(34,316

)

(16,687

)

Preferred stock dividends

3,779

2,437

2,438

2,437

2,438

Net income/(loss) available to common stockholders

$

68,159

$

57,739

$

54,678

$

(36,753

)

$

(19,125

)

Diluted earnings/(loss) per common share

$

1.33

$

1.14

$

1.08

$

(0.73

)

$

(0.38

)

Diluted common shares

51,069,511

50,794,421

50,573,073

50,416,331

50,474,802

CONSOLIDATED BALANCE SHEET DATA

Total assets

$

40,054,433

$

37,726,096

$

38,432,872

$

36,613,127

$

35,879,416

LHI

15,399,174

15,351,451

15,789,958

16,552,203

16,857,579

LHI, mortgage finance

9,009,081

9,079,409

9,378,104

8,972,626

7,588,803

LHS

176,286

283,165

648,009

454,581

774,064

Liquidity assets(1)

11,212,276

9,032,807

10,461,544

9,540,044

9,498,189

Investment securities

3,443,058

3,196,970

1,367,313

234,969

228,784

Demand deposits

15,174,642

12,740,947

12,339,212

10,835,911

9,420,303

Total deposits

33,391,970

30,996,589

31,959,487

30,187,695

27,134,263

Other borrowings

2,515,587

3,111,751

2,908,183

2,895,790

5,195,267

Long-term debt

664,968

395,896

395,806

395,715

395,625

Stockholders’ equity

3,159,482

2,871,224

2,800,404

2,734,755

2,772,596

End of period shares outstanding

50,557,767

50,470,450

50,455,552

50,435,672

50,407,778

Book value

$

53.59

$

53.92

$

52.53

$

51.25

$

52.03

Tangible book value(2)

$

53.24

$

53.57

$

52.18

$

50.89

$

51.67

SELECTED FINANCIAL RATIOS

Net interest margin

2.09

%

2.32

%

2.22

%

2.30

%

2.78

%

Return on average assets

0.73

%

0.61

%

0.59

%

(0.36

)

%

(0.20

)

%

Return on average common equity

10.08

%

8.50

%

8.24

%

(5.48

)

%

(2.85

)

%

Non-interest income to average earning assets

0.41

%

0.44

%

0.64

%

0.77

%

0.14

%

Efficiency ratio(3)

62.9

%

56.7

%

61.9

%

79.3

%

68.9

%

Non-interest expense to average earning assets

1.57

%

1.56

%

1.76

%

2.43

%

2.00

%

Tangible common equity to total tangible assets(4)

6.7

%

7.2

%

6.9

%

7.0

%

7.3

%

Common Equity Tier 1

10.2

%

9.4

%

9.1

%

8.8

%

9.3

%

Tier 1 capital

12.3

%

10.3

%

9.9

%

9.7

%

10.2

%

Total capital

14.0

%

12.1

%

11.8

%

11.6

%

12.0

%

Leverage

8.3

%

7.5

%

7.6

%

7.5

%

8.5

%

  1. Liquidity assets include Federal funds sold and interest-bearing deposits in other banks.

  2. Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.

  3. Non-interest expense divided by the sum of net interest income and non-interest income.

  4. Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by total assets, less goodwill and intangibles.


TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(dollars in thousands)

March 31, 2021

March 31, 2020

%
Change

Assets

Cash and due from banks

$

215,835

$

162,386

33

%

Interest-bearing deposits

11,212,276

9,468,189

18

%

Federal funds sold and securities purchased under resale agreements

30,000

(100

)

%

Securities, available-for-sale

3,443,058

228,784

N/M

LHS, at fair value

176,286

774,064

(77

)

%

LHI, mortgage finance

9,009,081

7,588,803

19

%

LHI (net of unearned income)

15,399,174

16,857,579

(9

)

%

Less: Allowance for credit losses on loans

242,484

240,958

1

%

LHI, net

24,165,771

24,205,424

%

Mortgage servicing rights, net

121,096

70,619

71

%

Premises and equipment, net

23,346

29,663

(21

)

%

Accrued interest receivable and other assets

679,199

892,305

(24

)

%

Goodwill and intangibles, net

17,566

17,982

(2

)

%

Total assets

$

40,054,433

$

35,879,416

12

%

Liabilities and Stockholders’ Equity

Liabilities:

Deposits:

Non-interest bearing

$

15,174,642

$

9,420,303

61

%

Interest bearing

18,217,328

17,713,960

3

%

Total deposits

33,391,970

27,134,263

23

%

Accrued interest payable

5,629

16,969

(67

)

%

Other liabilities

316,797

364,696

(13

)

%

Federal funds purchased and repurchase agreements

115,587

295,267

(61

)

%

Other borrowings

2,400,000

4,900,000

(51

)

%

Long-term debt

664,968

395,625

68

%

Total liabilities

36,894,951

33,106,820

11

%

Stockholders’ equity:

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

Authorized shares - 10,000,000

Issued shares - 6,300,000 and 6,000,000 shares issued at March 31, 2021 and 2020, respectively

450,000

150,000

200

%

Common stock, $.01 par value:

Authorized shares - 100,000,000

Issued shares - 50,558,184 and 50,408,195 at March 31, 2021 and 2020, respectively

505

504

%

Additional paid-in capital

984,207

979,939

%

Retained earnings

1,781,215

1,637,392

9

%

Treasury stock (shares at cost: 417 at March 31, 2021 and 2020)

(8

)

(8

)

%

Accumulated other comprehensive income/(loss), net of taxes

(56,437

)

4,769

N/M

Total stockholders’ equity

3,159,482

2,772,596

14

%

Total liabilities and stockholders’ equity

$

40,054,433

$

35,879,416

12

%


TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(dollars in thousands except per share data)

Three Months Ended March 31,

2021

2020

Interest income

Interest and fees on loans

$

215,592

$

283,625

Investment securities

9,887

2,183

Federal funds sold and securities purchased under resale agreements

1

614

Interest-bearing deposits in other banks

2,932

19,586

Total interest income

228,412

306,008

Interest expense

Deposits

20,004

62,174

Federal funds purchased

75

669

Other borrowings

2,517

9,582

Long-term debt

5,743

5,264

Total interest expense

28,339

77,689

Net interest income

200,073

228,319

Provision for credit losses

(6,000

)

96,000

Net interest income after provision for credit losses

206,073

132,319

Non-interest income

Service charges on deposit accounts

4,716

3,293

Wealth management and trust fee income

2,855

2,467

Brokered loan fees

9,311

8,015

Servicing income

9,009

4,746

Swap fees

526

2,757

Net gain/(loss) on sale of LHS

5,572

(13,000

)

Other

7,103

3,502

Total non-interest income

39,092

11,780

Non-interest expense

Salaries and employee benefits

87,522

77,193

Net occupancy expense

8,274

8,712

Marketing

1,697

8,522

Legal and professional

8,277

17,466

Communications and technology

15,969

13,791

FDIC insurance assessment

6,613

5,849

Servicing-related expenses

12,989

16,354

Merger-related expenses

7,270

Other

8,975

10,260

Total non-interest expense

150,316

165,417

Income/(loss) before income taxes

94,849

(21,318

)

Income tax expense/(benefit)

22,911

(4,631

)

Net income/(loss)

71,938

(16,687

)

Preferred stock dividends

3,779

2,438

Net income/(loss) available to common stockholders

$

68,159

$

(19,125

)

Basic earnings/(loss) per common share

$

1.35

$

(0.38

)

Diluted earnings/(loss) per common share

$

1.33

$

(0.38

)


TEXAS CAPITAL BANCSHARES, INC.

SUMMARY OF CREDIT LOSS EXPERIENCE

(dollars in thousands)

1st Quarter

4th Quarter

3rd Quarter

2nd Quarter

1st Quarter

2021

2020

2020

2020

2020

Allowance for credit losses on loans:

Beginning balance

$

254,615

$

290,165

$

264,722

$

240,958

$

195,047

Impact of CECL adoption

8,585

Loans charged-off:

Commercial

2,451

37,984

2,436

12,287

20,653

Energy

5,732

33,283

141

62,368

37,730

Real estate

180

Total charge-offs

8,183

71,447

2,577

74,655

58,383

Recoveries:

Commercial

1,050

394

113

513

257

Energy

715

5,696

880

423

Total recoveries

1,765

6,090

993

513

680

Net charge-offs

6,418

65,357

1,584

74,142

57,703

Provision for credit losses on loans

(5,713

)

29,807

27,027

97,906

95,029

Ending balance

$

242,484

$

254,615

$

290,165

$

264,722

$

240,958

Allowance for off-balance sheet credit losses:

Beginning balance

$

17,434

$

15,241

$

12,268

$

10,174

$

8,640

Impact of CECL adoption

563

Provision for off-balance sheet credit losses

(287

)

2,193

2,973

2,094

971

Ending balance

$

17,147

$

17,434

$

15,241

$

12,268

$

10,174

Total allowance for credit losses

$

259,631

$

272,049

$

305,406

$

276,990

$

251,132

Total provision for credit losses

$

(6,000

)

$

32,000

$

30,000

$

100,000

$

96,000

Allowance for credit losses on loans to LHI

0.99

%

1.04

%

1.15

%

1.04

%

0.99

%

Allowance for credit losses on loans to average LHI

1.03

%

1.01

%

1.14

%

1.03

%

1.02

%

Net charge-offs to average LHI(1)

0.11

%

1.03

%

0.02

%

1.16

%

0.98

%

Net charge-offs to average LHI for last twelve months(1)

0.59

%

0.80

%

0.59

%

0.73

%

0.53

%

Total provision for credit losses to average LHI(1)

(0.10

)

%

0.51

%

0.47

%

1.57

%

1.63

%

Total allowance for credit losses to LHI

1.06

%

1.11

%

1.21

%

1.09

%

1.03

%

  1. Interim period ratios are annualized.


TEXAS CAPITAL BANCSHARES, INC.

SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS

(dollars in thousands)

1st Quarter

4th Quarter

3rd Quarter

2nd Quarter

1st Quarter

2021

2020

2020

2020

2020

Non-performing assets (NPAs):

Non-accrual loans

$

97,730

$

121,989

$

161,946

$

174,031

$

219,165

Other real estate owned (OREO)

Total LHI NPAs

$

97,730

$

121,989

$

161,946

$

174,031

$

219,165

Non-accrual loans to LHI

0.40

%

0.50

%

0.64

%

0.68

%

0.90

%

Total LHI NPAs to LHI plus OREO

0.40

%

0.50

%

0.64

%

0.68

%

0.90

%

Total LHI NPAs to earning assets

0.25

%

0.33

%

0.43

%

0.49

%

0.63

%

Allowance for credit losses on loans to non-accrual loans

2.5x

2.1x

1.8x

1.5x

1.1x

LHI past due 90 days and still accruing(1)

$

6,187

$

12,541

$

15,896

$

21,079

$

21,274

LHI past due 90 days to LHI

0.03

%

0.05

%

0.06

%

0.08

%

0.09

%

LHS non-accrual(2)

$

$

6,966

$

$

$

LHS past due 90 days and still accruing(3)

$

16,359

$

16,667

$

15,631

$

10,152

$

9,014

  1. At March 31, 2021, loans past due 90 days and still accruing includes premium finance loans of $3.1 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on canceled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.

  2. Includes one non-accrual loan previously reported in loans HFI that was transferred to loans HFS as of December 31, 2020 and subsequently sold at carrying value.

  3. Includes loans guaranteed by U.S. government agencies that were repurchased out of Ginnie Mae securities. Loans are recorded as LHS and carried at fair value on the balance sheet. Interest on these past due loans accrues at the debenture rate guaranteed by the U.S. government. Also includes loans that, pursuant to Ginnie Mae servicing guidelines, we have the unilateral right, but not obligation, to repurchase and thus must record as LHS on our balance sheet regardless of whether the repurchase option has been exercised.


TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(dollars in thousands)

1st Quarter

4th Quarter

3rd Quarter

2nd Quarter

1st Quarter

2021

2020

2020

2020

2020

Interest income

Interest and fees on loans

$

215,592

$

242,776

$

237,179

$

247,595

$

283,625

Investment securities

9,887

9,594

3,674

2,024

2,183

Federal funds sold and securities purchased under resale agreements

1

1

1

77

614

Interest-bearing deposits in other banks

2,932

2,792

2,877

2,314

19,586

Total interest income

228,412

255,163

243,731

252,010

306,008

Interest expense

Deposits

20,004

23,819

27,830

32,294

62,174

Federal funds purchased

75

110

128

176

669

Other borrowings

2,517

3,407

3,365

4,569

9,582

Long-term debt

5,743

4,817

4,839

5,043

5,264

Total interest expense

28,339

32,153

36,162

42,082

77,689

Net interest income

200,073

223,010

207,569

209,928

228,319

Provision for credit losses

(6,000

)

32,000

30,000

100,000

96,000

Net interest income after provision for credit losses

206,073

191,010

177,569

109,928

132,319

Non-interest income

Service charges on deposit accounts

4,716

3,004

2,864

2,459

3,293

Wealth management and trust fee income

2,855

2,681

2,502

2,348

2,467

Brokered loan fees

9,311

12,610

15,034

10,764

8,015

Servicing income

9,009

8,834

7,329

6,120

4,746

Swap fees

526

473

484

1,468

2,757

Net gain/(loss) on sale of LHS

5,572

6,761

25,242

39,023

(13,000

)

Other

7,103

8,523

6,893

8,320

3,502

Total non-interest income

39,092

42,886

60,348

70,502

11,780

Non-interest expense

Salaries and employee benefits

87,522

78,449

84,096

100,791

77,193

Net occupancy expense

8,274

8,373

8,736

9,134

8,712

Marketing

1,697

3,435

3,636

7,988

8,522

Legal and professional

8,277

12,129

11,207

11,330

17,466

Communications and technology

15,969

15,405

31,098

42,760

13,791

FDIC insurance assessment

6,613

6,592

6,374

7,140

5,849

Servicing-related expenses

12,989

15,867

12,287

20,117

16,354

Merger-related expenses

10,486

7,270

Other

8,975

10,636

8,307

12,606

10,260

Total non-interest expense

150,316

150,886

165,741

222,352

165,417

Income/(loss) before income taxes

94,849

83,010

72,176

(41,922

)

(21,318

)

Income tax expense/(benefit)

22,911

22,834

15,060

(7,606

)

(4,631

)

Net income/(loss)

71,938

60,176

57,116

(34,316

)

(16,687

)

Preferred stock dividends

3,779

2,437

2,438

2,437

2,438

Net income/(loss) available to common shareholders

$

68,159

$

57,739

$

54,678

$

(36,753

)

$

(19,125

)


TEXAS CAPITAL BANCSHARES, INC.

QUARTERLY FINANCIAL SUMMARY - UNAUDITED

Consolidated Daily Average Balances, Average Yields and Rates

(dollars in thousands)

1st Quarter 2021

4th Quarter 2020

3rd Quarter 2020

2nd Quarter 2020

1st Quarter 2020

Average
Balance

Revenue/
Expense

Yield/
Rate

Average
Balance

Revenue/
Expense

Yield/
Rate

Average
Balance

Revenue/
Expense

Yield/
Rate

Average
Balance

Revenue/
Expense

Yield/
Rate

Average
Balance

Revenue/
Expense

Yield/
Rate

Assets

Investment securities - Taxable

$

3,225,786

$

8,112

1.02

%

$

2,137,481

$

7,748

1.44

%

$

525,149

$

1,905

1.44

%

$

38,829

$

185

1.92

%

$

42,799

$

274

2.57

%

Investment securities - Non-taxable(2)

196,785

2,247

4.63

%

200,781

2,337

4.63

%

190,797

2,239

4.67

%

195,806

2,327

4.78

%

195,578

2,417

4.97

%

Federal funds sold and securities purchased under resale agreements

4,605

1

0.07

%

1,709

1

0.13

%

12,051

1

0.04

%

245,434

77

0.13

%

199,727

614

1.24

%

Interest-bearing deposits in other banks

11,840,942

2,932

0.10

%

10,808,548

2,792

0.10

%

11,028,962

2,877

0.10

%

10,521,240

2,314

0.09

%

6,225,948

19,586

1.27

%

LHS, at fair value

243,326

1,595

2.66

%

410,637

2,475

2.40

%

543,606

3,867

2.83

%

380,624

2,547

2.69

%

3,136,381

27,480

3.52

%

LHI, mortgage finance loans

8,177,759

64,942

3.22

%

9,550,119

78,906

3.29

%

9,061,984

76,464

3.36

%

8,676,521

74,518

3.45

%

7,054,682

55,324

3.15

%

LHI(1)(2)

15,457,888

149,196

3.91

%

15,620,410

161,750

4.12

%

16,286,036

157,230

3.84

%

17,015,041

170,970

4.04

%

16,598,775

201,781

4.89

%

Less allowance for credit
losses on loans

254,697

290,189

264,769

236,823

201,837

LHI, net of allowance

23,380,950

214,138

3.71

%

24,880,340

240,656

3.85

%

25,083,251

233,694

3.71

%

25,454,739

245,488

3.88

%

23,451,620

257,105

4.41

%

Total earning assets

38,892,394

229,025

2.39

%

38,439,496

256,009

2.65

%

37,383,816

244,583

2.60

%

36,836,672

252,938

2.76

%

33,252,053

307,476

3.72

%

Cash and other assets

1,064,679

1,031,195

1,037,760

1,075,864

976,520

Total assets

$

39,957,073

$

39,470,691

$

38,421,576

$

37,912,536

$

34,228,573

Liabilities and Stockholders’ Equity

Transaction deposits

$

3,991,966

$

5,861

0.60

%

$

4,384,493

$

6,604

0.60

%

$

4,275,574

$

6,652

0.62

%

$

3,923,966

$

5,998

0.61

%

$

3,773,067

$

13,582

1.45

%

Savings deposits

12,889,974

10,788

0.34

%

12,982,189

12,671

0.39

%

12,786,719

12,808

0.40

%

12,537,467

13,510

0.43

%

11,069,429

35,961

1.31

%

Time deposits

2,204,242

3,355

0.62

%

2,355,199

4,544

0.77

%

2,844,083

8,370

1.17

%

3,434,388

12,786

1.50

%

2,842,535

12,631

1.79

%

Total interest bearing deposits

19,086,182

20,004

0.43

%

19,721,881

23,819

0.48

%

19,906,376

27,830

0.56

%

19,895,821

32,294

0.65

%

17,685,031

62,174

1.41

%

Other borrowings

2,686,398

2,592

0.39

%

3,022,077

3,517

0.46

%

2,811,435

3,493

0.49

%

3,612,263

4,745

0.53

%

3,020,255

10,251

1.37

%

Long-term debt

464,731

5,743

5.01

%

395,841

4,817

4.84

%

395,749

4,839

4.87

%

395,658

5,043

5.13

%

395,571

5,264

5.35

%

Total interest bearing liabilities

22,237,311

28,339

0.52

%

23,139,799

32,153

0.55

%

23,113,560

36,162

0.62

%

23,903,742

42,082

0.71

%

21,100,857

77,689

1.48

%

Demand deposits

14,421,505

13,174,114

12,202,065

10,865,896

10,003,495

Other liabilities

309,644

303,480

314,500

293,698

270,868

Stockholders’ equity

2,988,613

2,853,298

2,791,451

2,849,200

2,853,353

Total liabilities and stockholders’ equity

$

39,957,073

$

39,470,691

$

38,421,576

$

37,912,536

$

34,228,573

Net interest income(2)

$

200,686

$

223,856

$

208,421

$

210,856

$

229,787

Net interest margin

2.09

%

2.32

%

2.22

%

2.30

%

2.78

%

(1) The loan averages include loans on which the accrual of interest has been discontinued and are stated net of unearned income.
(2) Taxable equivalent rates used where applicable.


CONTACT: INVESTOR CONTACT Jamie Britton, 214.932.6721 jamie.britton@texascapitalbank.com MEDIA CONTACT Shannon Wherry, 469.399.8527 shannon.wherry@texascapitalbank.com