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Texas Capital Bancshares, Inc. Announces Second Quarter 2022 Results
ソース: Nasdaq GlobeNewswire / 21 7 2022 06:00:01 America/New_York
Second quarter 2022 net income of $34.2 million and net income available to common
stockholders of $29.8 million, or $0.59 per diluted sharePre-Provision Net Revenue(1) grew $16.7 million (33%) linked quarter
Total loans held for investment increased $2.4 billion (11%) linked quarter
DALLAS, July 21, 2022 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the second quarter of 2022.
Net income available to common stockholders was $29.8 million, or $0.59 per diluted share, for the second quarter of 2022, compared to $35.3 million, or $0.69 per diluted share, for the first quarter of 2022 and $67.2 million, or $1.31 per diluted share, for the second quarter of 2021.
“We continue to execute on our strategic vision laid out nearly eleven months ago and are pleased with the early progress evidenced by strong revenue growth in our second quarter results,” said Rob C. Holmes, President and CEO. “The launch of our sales and trading platform in early May, and the restructuring and significant investment in C&I, demonstrate our commitment to delivering a full-service offering worthy of banking premier clients in our markets.”
FINANCIAL RESULTS (dollars and shares in thousands) 2nd Quarter 1st Quarter 2nd Quarter 2022 2022 2021 OPERATING RESULTS Net income $ 34,159 $ 39,650 $ 73,481 Net income available to common stockholders $ 29,847 $ 35,337 $ 67,164 Diluted earnings per common share $ 0.59 $ 0.69 $ 1.31 Diluted common shares 50,802 51,324 51,094 Return on average assets 0.44 % 0.47 % 0.76 % Return on average common equity 4.35 % 4.97 % 9.74 % BALANCE SHEET Loans held for investment $ 17,517,866 $ 15,849,434 $ 15,168,565 Loans held for investment, mortgage finance 6,549,507 5,827,965 8,772,799 Total loans held for investment 24,067,373 21,677,399 23,941,364 Loans held for sale 4,266 8,085 63,747 Total assets 32,338,963 31,085,377 35,228,542 Non-interest bearing deposits 12,555,367 13,434,723 14,228,038 Total deposits 25,440,021 25,377,938 28,839,563 Stockholders’ equity 3,006,832 3,090,038 3,114,957 (1) Net interest income and non-interest income, less non-interest expense.
SECOND QUARTER 2022 COMPARED TO FIRST QUARTER 2022
For the second quarter of 2022, net income available to common stockholders was $29.8 million, or $0.59 per diluted share, compared to $35.3 million, or $0.69 per diluted share, for the first quarter of 2022.
We recorded a $22.0 million provision for credit losses for the second quarter of 2022, compared to a $2.0 million negative provision for credit losses for the first quarter of 2022. The $22.0 million provision for credit losses recorded in the second quarter of 2022 resulted primarily from an increase in total loans held for investment (“LHI”).
Net interest income was $205.5 million for the second quarter of 2022, compared to $183.5 million for the first quarter of 2022. The increase in net interest income was primarily driven by increases in total LHI average balances and yields, partially offset by an increase in yields on deposits and short-term borrowings. Net interest margin for the second quarter of 2022 was 2.68%, an increase of 45 basis point from the first quarter of 2022. LHI, excluding mortgage finance, yields increased 34 basis points from the first quarter of 2022 and LHI, mortgage finance yields increased 35 basis points from the first quarter of 2022. Total cost of deposits was 0.33% for the second quarter of 2022, a 13 basis point increase from the first quarter of 2022.
Non-interest income for the second quarter of 2022 increased $6.0 million, or 29%, compared to the first quarter of 2022, primarily due to increases in investment banking and trading income.
Non-interest expense for the second quarter of 2022 increased $11.2 million, or 7%, compared to the first quarter of 2022. The increase was primarily due to increases in salaries and benefits expense, resulting from an increase in headcount and marketing expense.
SECOND QUARTER 2022 COMPARED TO SECOND QUARTER 2021
Net income available to common stockholders was $29.8 million, or $0.59 per diluted share, for the second quarter of 2022, compared to $67.2 million, or $1.31 per diluted share, for the second quarter of 2021.
The second quarter of 2022 included a $22.0 million provision for credit losses, resulting primarily from growth in total LHI, compared to a $19.0 million negative provision for credit losses for the second quarter of 2021.
Net interest income increased to $205.5 million for the second quarter of 2022, compared to $189.5 million for the second quarter of 2021, primarily due to an increase in yields on average earning assets, partially offset by an increase in funding costs. Net interest margin increased 66 basis points to 2.68% for the second quarter of 2022, as compared to the second quarter of 2021, primarily due to a shift in the composition of earning assets coupled with an increase in yield on earnings assets, partially offset by an increase in funding costs. LHI, excluding mortgage finance, yields increased 26 basis points compared to the second quarter of 2021 and LHI, mortgage finance yields increased 33 basis points from the second quarter of 2021. Total cost of deposits increased 13 basis points compared to the second quarter of 2021.
Non-interest income for the second quarter of 2022 decreased $11.4 million, or 30%, compared to the second quarter of 2021. The decrease was primarily due to decreases in servicing fee income, as a result of the sale of our mortgage servicing rights portfolio in 2021, and other non-interest income, partially offset by an increase in investment banking and trading income and the elimination of net losses recorded in the prior year on the sale of loans held for sale.
Non-interest expense for the second quarter of 2022 increased $15.2 million, or 10%, compared to the second quarter of 2021. The increase was primarily due to an increase in salaries and benefits expense, resulting primarily from an increase in headcount, as well as an increase in marketing expense, partially offset by a decrease in servicing-related expenses from the sale of our mortgage servicing rights portfolio in 2021.
CREDIT QUALITY
We recorded $2.6 million in net charge-offs during the second quarter of 2022, compared to net recoveries of $512,000 and net charge-offs of $2.4 million during the first quarter of 2022 and the second quarter of 2021, respectively. Criticized loans totaled $603.5 million at June 30, 2022, compared to $476.1 million at March 31, 2022 and $891.6 million at June 30, 2021. Non-accrual LHI totaled $50.5 million at June 30, 2022, compared to $59.3 million at December 31, 2021 and $86.6 million at June 30, 2021. The ratio of non-accrual LHI to total LHI for the second quarter of 2022 was 0.21%, compared to 0.27% for the first quarter of 2022 and 0.36% for the second quarter of 2021.
REGULATORY RATIOS AND CAPITAL
All regulatory ratios continue to be in excess of “well capitalized” requirements as of June 30, 2022. Our CET 1, tier 1 capital, total capital and leverage ratios were 10.5%, 11.9%, 14.4% and 10.7%, respectively, at June 30, 2022, compared to 11.5%, 13.0%, 15.7% and 9.9%, respectively, at March 31, 2022 and 10.5%, 12.1%, 14.8% and 8.4% at June 30, 2021. At June 30, 2022, our ratio of tangible common equity to total tangible assets was 8.3%, compared to 8.9% at March 31, 2022 and 7.9% at June 30, 2021.
During the second quarter of 2022, the Company repurchased 941,879 shares of its common stock for an aggregate purchase price of $50.0 million, at a weighted average price of $53.11 per share.
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 full-service financial services firm that delivers customized solutions to businesses, entrepreneurs, and individual customers. Founded in 1998, the institution is headquartered in Dallas with offices in Austin, Houston, San Antonio, and Fort Worth, and has built a network of clients across the country. With the ability to service clients through their entire lifecycles, Texas Capital Bank has established commercial banking, consumer banking, investment banking and wealth management capabilities.
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, credit quality and risk, the COVID-19 pandemic, industry and technological changes, cyber incidents or other failures, disruptions or security breaches, interest rates, commercial and residential real estate values, economic conditions, including inflation and the threat of recession, as well as market conditions in Texas, the United States or internationally, as well as governmental and consumer responses to those economic and market conditions, fund availability, accounting estimates and risk management processes, the transition away from the London Interbank Offered Rate (LIBOR), legislative and regulatory changes, business strategy execution, key personnel, competition, mortgage markets, fraud, environmental liability and severe weather, natural disasters, acts of war or terrorism or other external events.
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) 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 2022 2022 2021 2021 2021 CONSOLIDATED STATEMENTS OF INCOME Interest income $ 242,349 $ 208,530 $ 219,892 $ 216,589 $ 216,953 Interest expense 36,818 24,983 25,860 26,053 27,496 Net interest income 205,531 183,547 194,032 190,536 189,457 Provision for credit losses 22,000 (2,000 ) (10,000 ) 5,000 (19,000 ) Net interest income after provision for credit losses 183,531 185,547 204,032 185,536 208,457 Non-interest income 26,242 20,282 31,459 24,779 37,639 Non-interest expense 164,303 153,092 146,649 152,987 149,060 Income before income taxes 45,470 52,737 88,842 57,328 97,036 Income tax expense 11,311 13,087 23,712 13,938 23,555 Net income 34,159 39,650 65,130 43,390 73,481 Preferred stock dividends 4,312 4,313 4,313 4,312 6,317 Net income available to common stockholders $ 29,847 $ 35,337 $ 60,817 $ 39,078 $ 67,164 Diluted earnings per common share $ 0.59 $ 0.69 $ 1.19 $ 0.76 $ 1.31 Diluted common shares 50,801,628 51,324,027 51,208,161 51,139,555 51,093,660 CONSOLIDATED BALANCE SHEET DATA Total assets $ 32,338,963 $ 31,085,377 $ 34,731,738 $ 36,404,320 $ 35,228,542 Loans held for investment 17,517,866 15,849,434 15,331,457 15,221,404 15,168,565 Loans held for investment, mortgage finance 6,549,507 5,827,965 7,475,497 8,528,313 8,772,799 Loans held for sale 4,266 8,085 8,123 9,660 63,747 Interest-bearing cash and cash equivalents 4,032,931 5,136,680 7,765,996 8,317,926 6,768,650 Investment securities 3,552,699 3,642,015 3,583,808 3,663,874 3,798,275 Non-interest bearing deposits 12,555,367 13,434,723 13,390,370 14,970,462 14,228,038 Total deposits 25,440,021 25,377,938 28,109,365 29,813,668 28,839,563 Short-term borrowings 2,651,536 1,427,033 2,202,832 2,203,470 2,014,481 Long-term debt 917,098 929,414 928,738 928,062 927,386 Stockholders’ equity 3,006,832 3,090,038 3,209,616 3,147,752 3,114,957 End of period shares outstanding 49,878,041 50,710,441 50,618,494 50,605,626 50,592,201 Book value $ 54.27 $ 55.02 $ 57.48 $ 56.27 $ 55.64 Tangible book value(1) $ 53.93 $ 54.68 $ 57.14 $ 55.93 $ 55.29 SELECTED FINANCIAL RATIOS Net interest margin 2.68 % 2.23 % 2.12 % 2.11 % 2.02 % Return on average assets 0.44 % 0.47 % 0.69 % 0.47 % 0.76 % Return on average common equity 4.35 % 4.97 % 8.36 % 5.41 % 9.74 % Non-interest income to average earning assets 0.34 % 0.25 % 0.34 % 0.27 % 0.40 % Efficiency ratio(2) 70.9 % 75.1 % 65.0 % 71.1 % 65.6 % Non-interest expense to average earning assets 2.16 % 1.86 % 1.60 % 1.69 % 1.59 % Tangible common equity to total tangible assets(3) 8.3 % 8.9 % 8.3 % 7.8 % 7.9 % Common Equity Tier 1 10.5 % 11.5 % 11.1 % 10.7 % 10.5 % Tier 1 capital 11.9 % 13.0 % 12.6 % 12.2 % 12.1 % Total capital 14.4 % 15.7 % 15.3 % 14.9 % 14.8 % Leverage 10.7 % 9.9 % 9.0 % 9.0 % 8.4 % (1) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(2) Non-interest expense divided by the sum of net interest income and non-interest income.
(3) 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) June 30, 2022 June 30, 2021 % Change Assets Cash and due from banks $ 242,425 $ 202,549 20 % Interest-bearing cash and cash equivalents 4,032,931 6,768,650 (40 )% Available-for-sale debt securities 2,535,646 3,757,228 (33 )% Held-to-maturity debt securities 980,935 — 100 % Equity securities 36,118 41,047 (12 )% Investment securities 3,552,699 3,798,275 (6 )% Loans held for sale 4,266 63,747 (93 )% Loans held for investment, mortgage finance 6,549,507 8,772,799 (25 )% Loans held for investment 17,517,866 15,168,565 15 % Less: Allowance for credit losses on loans 229,013 221,511 3 % Loans held for investment, net 23,838,360 23,719,853 — % Mortgage servicing rights, net — 1,316 (100 )% Premises and equipment, net 28,722 21,969 31 % Accrued interest receivable and other assets 622,501 634,719 (2 )% Goodwill and intangibles, net 17,059 17,464 (2 )% Total assets $ 32,338,963 $ 35,228,542 (8 )% Liabilities and Stockholders’ Equity Liabilities: Non-interest bearing deposits $ 12,555,367 $ 14,228,038 (12 )% Interest bearing deposits 12,884,654 14,611,525 (12 )% Total deposits 25,440,021 28,839,563 (12 )% Accrued interest payable 8,928 8,116 10 % Other liabilities 314,548 324,039 (3 )% Short-term borrowings 2,651,536 2,014,481 32 % Long-term debt 917,098 927,386 (1 )% Total liabilities 29,332,131 32,113,585 (9 )% Stockholders’ equity: Preferred stock, $.01 par value, $1,000 liquidation value: Authorized shares - 10,000,000 Issued shares - 300,000 shares issued at June 30, 2022 and 2021 300,000 300,000 — % Common stock, $.01 par value: Authorized shares - 100,000,000 Issued shares - 50,820,337 and 50,592,618 at June 30, 2022 and 2021, respectively 508 506 — % Additional paid-in capital 1,015,105 992,469 2 % Retained earnings 2,013,458 1,848,379 9 % Treasury stock - 942,296 and 417 shares at cost at June 30, 2022 and 2021, respectively (50,031 ) (8 ) N/M Accumulated other comprehensive loss, net of taxes (272,208 ) (26,389 ) 932 % Total stockholders’ equity 3,006,832 3,114,957 (3 )% Total liabilities and stockholders’ equity $ 32,338,963 $ 35,228,542 (8 )% TEXAS CAPITAL BANCSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in thousands except per share data) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Interest income Interest and fees on loans $ 218,290 $ 203,074 $ 405,947 $ 413,405 Investment securities 14,665 10,918 31,967 20,805 Interest-bearing cash and cash equivalents 9,394 2,961 12,965 5,894 Total interest income 242,349 216,953 450,879 440,104 Interest expense Deposits 20,566 16,271 34,196 36,275 Short-term borrowings 4,859 502 5,617 3,094 Long-term debt 11,393 10,723 21,988 16,466 Total interest expense 36,818 27,496 61,801 55,835 Net interest income 205,531 189,457 389,078 384,269 Provision for credit losses 22,000 (19,000 ) 20,000 (25,000 ) Net interest income after provision for credit losses 183,531 208,457 369,078 409,269 Non-interest income Service charges on deposit accounts 6,003 4,634 12,025 9,350 Wealth management and trust fee income 4,051 3,143 7,963 5,998 Brokered loan fees 4,133 6,933 8,103 16,244 Servicing income 228 5,935 465 14,944 Investment banking and trading income 11,126 8,071 15,305 13,858 Net gain/(loss) on sale of loans held for sale — (3,070 ) — 2,502 Other 701 11,993 2,663 19,096 Total non-interest income 26,242 37,639 46,524 81,992 Non-interest expense Salaries and benefits 103,885 86,830 203,983 174,352 Occupancy expense 8,874 7,865 17,759 16,139 Marketing 8,506 1,900 13,483 3,597 Legal and professional 11,288 9,147 21,590 17,424 Communications and technology 15,649 14,352 30,349 30,321 Federal Deposit Insurance Corporation (“FDIC”) insurance assessment 3,318 5,226 7,299 11,839 Servicing-related expenses — 12,355 — 25,344 Other 12,783 11,385 22,932 20,360 Total non-interest expense 164,303 149,060 317,395 299,376 Income before income taxes 45,470 97,036 98,207 191,885 Income tax expense 11,311 23,555 24,398 46,466 Net income 34,159 73,481 73,809 145,419 Preferred stock dividends 4,312 6,317 8,625 10,096 Net income available to common stockholders $ 29,847 $ 67,164 $ 65,184 $ 135,323 Basic earnings per common share $ 0.59 $ 1.33 $ 1.29 $ 2.68 Diluted earnings per common share $ 0.59 $ 1.31 $ 1.28 $ 2.65 TEXAS CAPITAL BANCSHARES, INC. SUMMARY OF CREDIT LOSS EXPERIENCE (dollars in thousands) 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 2022 2022 2021 2021 2021 Allowance for credit losses on loans: Beginning balance $ 211,151 $ 211,866 $ 221,957 $ 221,511 $ 242,484 Loans charged-off: Commercial 2,868 110 3,776 4,348 1,412 Energy — — — — 686 Real estate — 350 — — 1,192 Total charge-offs 2,868 460 3,776 4,348 3,290 Recoveries: Commercial 219 217 1,933 1,104 308 Energy — 755 601 42 609 Real estate — — 205 112 — Total recoveries 219 972 2,739 1,258 917 Net charge-offs 2,649 (512 ) 1,037 3,090 2,373 Provision for credit losses on loans 20,511 (1,227 ) (9,054 ) 3,536 (18,600 ) Ending balance $ 229,013 $ 211,151 $ 211,866 $ 221,957 $ 221,511 Allowance for off-balance sheet credit losses: Beginning balance $ 16,492 $ 17,265 $ 18,211 $ 16,747 $ 17,147 Provision for off-balance sheet credit losses 1,489 (773 ) (946 ) 1,464 (400 ) Ending balance $ 17,981 $ 16,492 $ 17,265 $ 18,211 $ 16,747 Total allowance for credit losses $ 246,994 $ 227,643 $ 229,131 $ 240,168 $ 238,258 Total provision for credit losses $ 22,000 $ (2,000 ) $ (10,000 ) $ 5,000 $ (19,000 ) Allowance for credit losses on loans to total loans held for investment 0.95 % 0.97 % 0.93 % 0.93 % 0.93 % Allowance for credit losses on loans to average total loans held for investment 1.02 % 0.99 % 0.91 % 0.95 % 0.98 % Net charge-offs to average total loans held for investment(1) 0.05 % (0.01 )% 0.02 % 0.05 % 0.04 % Net charge-offs to average total loans held for investment for last 12 months(1) 0.03 % 0.03 % 0.06 % 0.33 % 0.31 % Total provision for credit losses to average total loans held for investment(1) 0.39 % (0.04 )% (0.17 )% 0.09 % (0.34 )% Total allowance for credit losses to total loans held for investment 1.03 % 1.05 % 1.00 % 1.01 % 1.00 % (1) Interim period ratios are annualized.
TEXAS CAPITAL BANCSHARES, INC. SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS (dollars in thousands) 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 2022 2022 2021 2021 2021 Non-accrual loans held for investment $ 50,526 $ 59,327 $ 72,502 $ 87,532 $ 86,636 Non-accrual loans held for sale — — — — — Other real estate owned — — — — — Total non-performing assets $ 50,526 $ 59,327 $ 72,502 $ 87,532 $ 86,636 Non-accrual loans held for investment to total loans held for investment 0.21 % 0.27 % 0.32 % 0.37 % 0.36 % Total non-performing assets to earning assets 0.16 % 0.20 % 0.21 % 0.25 % 0.25 % Allowance for credit losses on loans to non-accrual loans held for investment 4.5 x 3.6 x 2.9 x 2.5 x 2.6 x Loans held for investment past due 90 days and still accruing(1) $ 3,206 $ 6,031 $ 3,467 $ 3,405 $ 7,671 Loans held for investment past due 90 days to total loans held for investment 0.01 % 0.03 % 0.02 % 0.01 % 0.03 % Loans held for sale past due 90 days and still accruing(2) $ 1,602 $ 3,865 $ 3,986 $ 3,808 $ 2,695 (1) At June 30, 2022, loans past due 90 days and still accruing include 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 loans guaranteed by U.S. government agencies that were repurchased out of Ginnie Mae securities. Loans are recorded as loans held for sale 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.TEXAS CAPITAL BANCSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in thousands) 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 2022 2022 2021 2021 2021 Interest income Interest and fees on loans $ 218,290 $ 187,657 $ 204,379 $ 202,748 $ 203,074 Investment securities 14,665 17,302 11,780 10,235 10,918 Interest-bearing deposits in other banks 9,394 3,571 $ 3,733 $ 3,606 2,961 Total interest income 242,349 208,530 219,892 216,589 216,953 Interest expense Deposits 20,566 13,630 14,513 14,719 16,271 Short-term borrowings 4,859 758 771 748 502 Long-term debt 11,393 10,595 10,576 10,586 10,723 Total interest expense 36,818 24,983 25,860 26,053 27,496 Net interest income 205,531 183,547 194,032 190,536 189,457 Provision for credit losses 22,000 (2,000 ) (10,000 ) 5,000 (19,000 ) Net interest income after provision for credit losses 183,531 185,547 204,032 185,536 208,457 Non-interest income Service charges on deposit accounts 6,003 6,022 4,702 4,622 4,634 Wealth management and trust fee income 4,051 3,912 3,793 3,382 3,143 Brokered loan fees 4,133 3,970 5,678 6,032 6,933 Servicing income 228 237 277 292 5,935 Investment banking and trading income 11,126 4,179 6,456 4,127 8,071 Net gain/(loss) on sale of loans held for sale — — — (1,185 ) (3,070 ) Other 701 1,962 10,553 7,509 11,993 Total non-interest income 26,242 20,282 31,459 24,779 37,639 Non-interest expense Salaries and benefits 103,885 100,098 89,075 87,503 86,830 Occupancy expense 8,874 8,885 8,769 8,324 7,865 Marketing 8,506 4,977 4,286 2,123 1,900 Legal and professional 11,288 10,302 12,673 11,055 9,147 Communications and technology 15,649 14,700 16,490 28,374 14,352 FDIC insurance assessment 3,318 3,981 4,688 4,500 5,226 Servicing-related expenses — — 25 2,396 12,355 Other 12,783 10,149 10,643 8,712 11,385 Total non-interest expense 164,303 153,092 146,649 152,987 149,060 Income before income taxes 45,470 52,737 88,842 57,328 97,036 Income tax expense 11,311 13,087 23,712 13,938 23,555 Net income 34,159 39,650 65,130 43,390 73,481 Preferred stock dividends 4,312 4,313 4,313 4,312 6,317 Net income available to common shareholders $ 29,847 $ 35,337 $ 60,817 $ 39,078 $ 67,164 TEXAS CAPITAL BANCSHARES, INC. TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1) (dollars in thousands) 2nd Quarter 2022 1st Quarter 2022 4th Quarter 2021 3rd Quarter 2021 2nd Quarter 2021 Average
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RateAssets Investment securities(2) $ 3,543,576 $ 15,065 1.60 % $ 3,669.257 $ 17,743 1.91 % $ 3,608,503 $ 12,225 1.34 % $ 3,775,812 $ 10,684 1.12 % $ 3,543,270 $ 11,369 1.29 % Interest-bearing cash and cash equivalents 4,747,377 9,394 0.79 % 8,552,300 3,571 0.17 % 9,760,735 3,733 0.15 % 9,046,095 3,606 0.16 % 11,583,759 2,961 0.10 % Loans held for sale 8,123 62 3.07 % 7,633 113 6.01 % 8,348 51 2.41 % 18,791 54 1.14 % 93,164 781 3.36 % Loans held for investment, mortgage finance 5,858,599 49,914 3.42 % 5,732,901 43,466 3.07 % 7,901,534 57,949 2.91 % 7,987,521 58,913 2.93 % 7,462,223 57,401 3.09 % Loans held for investment(3) 16,616,234 168,407 4.07 % 15,686.319 144,134 3.73 % 15,348,322 146,436 3.79 % 15,266,167 143,864 3.74 % 15,242,975 144,978 3.81 % Less: Allowance for credit losses on loans 211,385 — — 212,612 — — 223,034 — — 220,984 — — 241,676 — — Loans held for investment, net 22,263,448 218,321 3.93 % 21,206,608 187,600 3.59 % 23,026,822 204,385 3.52 % 23,032,704 202,777 3.49 % 22,463,522 202,379 3.61 % Total earning assets 30,562,524 242,842 3.16 % 33,435,798 209,027 2.54 % 36,404,408 220,394 2.40 % 35,873,402 217,121 2.40 % 37,683,715 217,490 2.31 % Cash and other assets 870,396 819,486 835,293 855,555 996,946 Total assets $ 31,432,920 $ 34,255,284 $ 37,239,701 $ 36,728,957 $ 38,680,661 Liabilities and Stockholders’ Equity Transaction deposits $ 1,671,729 $ 3,920 0.94 % $ 2,432,687 $ 3,962 0.66 % $ 3,007,337 $ 4,664 0.62 % $ 3,012,547 $ 4,737 0.62 % $ 3,795,152 $ 5,395 0.57 % Savings deposits 8,696,819 15,462 0.71 % 10,420,545 8,583 0.33 % 10,529,645 8,419 0.32 % 10,044,995 8,262 0.33 % 11,296,382 8,990 0.32 % Time deposits 877,399 1,184 0.54 % 1,038,722 1,085 0.42 % 1,276,800 1,430 0.44 % 1,640,562 1,720 0.42 % 1,755,993 1,886 0.43 % Total interest bearing deposits 11,245,947 20,566 0.73 % 13,891,954 13,630 0.40 % 14,813,782 14,513 0.39 % 14,698,104 14,719 0.40 % 16,847,527 16,271 0.39 % Short-term borrowings 2,232,119 4,859 0.87 % 1,770,781 758 0.17 % 2,267,013 771 0.13 % 2,299,692 748 0.13 % 2,349,718 502 0.09 % Long-term debt 929,616 11,393 4.92 % 929,005 10,595 4.63 % 928,307 10,576 4.52 % 927,626 10,586 4.53 % 881,309 10,723 4.88 % Total interest bearing liabilities 14,407,682 36,818 1.02 % 16,591,740 24,983 0.61 % 18,009,102 25,860 0.57 % 17,925,422 26,053 0.58 % 20,078,554 27,496 0.55 % Non-interest bearing deposits 13,747,876 14,235,749 15,804,061 15,363,568 15,139,546 Other liabilities 227,701 243,141 238,833 275,317 274,401 Stockholders’ equity 3,049,661 3,184,654 3,187,705 3,164,650 3,188,160 Total liabilities and stockholders’ equity $ 31,432,920 $ 34,255,284 $ 37,239,701 $ 36,728,957 $ 38,680,661 Net interest income $ 206,024 $ 184,044 $ 194,534 $ 191,068 $ 189,994 Net interest margin 2.68 % 2.23 % 2.12 % 2.11 % 2.02 % (1) Taxable equivalent rates used where applicable.
(2) Yields on investment securities are calculated using available-for-sale securities at amortized cost.
(3) Average balances include non-accrual loans.
INVESTOR CONTACT Jocelyn Kukulka, 469.399.8544 jocelyn.kukulka@texascapitalbank.com
