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Texas Capital Bancshares, Inc. Announces First Quarter 2022 Results
ソース: Nasdaq GlobeNewswire / 20 4 2022 16:00:01 America/New_York
First quarter 2022 net income of $39.7 million, or $0.69 per diluted share
Declines in mortgage finance loans driven by rapid increase in interest rates
Loans held for investment, excluding mortgage finance and PPP, increased $577.7 million, or 15% annualized
DALLAS, April 20, 2022 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the first quarter of 2022.
Net income was $39.7 million, or $0.69 per diluted share, for the first quarter of 2022, compared to $65.1 million, or $1.19 per diluted share, for the fourth quarter of 2021 and $71.9 million, or $1.33 per diluted share, for the first quarter of 2021.
“A key objective of our strategic plan to transform Texas Capital Bank is to create greater balance through focused growth initiatives across the platform to reduce reliance on our leading Mortgage Finance franchise. While we continue to be committed to our mature Mortgage Finance business, the first quarter impact from the increase in long-term rates on this business is evidence as to why we have embarked on this strategy,” said Rob C. Holmes, President and CEO. “We are progressing against our plan, and just beginning to realize the benefits from focused investments in core product offerings and key talent acquisition. With short-term rates rising, we continue to take deliberate actions to position our asset-sensitive balance sheet to perform more favorably through the rate cycle.”
FINANCIAL RESULTS (dollars and shares in thousands) 1st Quarter 4th Quarter 1st Quarter 2022 2021 2021 OPERATING RESULTS Net income $ 39,650 $ 65,130 $ 71,938 Net income available to common stockholders $ 35,337 $ 60,817 $ 68,159 Diluted earnings per common share $ 0.69 $ 1.19 $ 1.33 Diluted common shares 51,324 51,208 51,070 Return on average assets 0.47 % 0.69 % 0.73 % Return on average common equity 4.97 % 8.36 % 10.08 % BALANCE SHEET Loans held for investment $ 15,849,434 $ 15,331,457 $ 15,399,174 Loans held for investment, mortgage finance 5,827,965 7,475,497 9,009,081 Total loans held for investment 21,677,399 22,806,954 24,408,255 Loans held for sale 8,085 8,123 176,286 Total assets 31,085,377 34,731,738 40,054,433 Non-interest bearing deposits 13,434,723 13,390,370 15,174,642 Total deposits 25,377,938 28,109,365 33,391,970 Stockholders’ equity 3,090,038 3,209,616 3,159,482 FIRST QUARTER 2022 COMPARED TO FOURTH QUARTER 2021
For the first quarter of 2022, net income was $39.7 million, or $0.69 per diluted share, compared to $65.1 million, or $1.19 per diluted share, for the fourth quarter of 2021.
We recorded a $2.0 million negative provision for credit losses for the first quarter of 2022, compared to a $10.0 million negative provision for credit losses for the fourth quarter of 2021, as a decrease in criticized loans was partially offset by growth in loans held for investment, excluding mortgage finance.
Net interest income was $183.5 million for the first quarter of 2022, compared to $194.0 million for the fourth quarter of 2021. The decrease in net interest income was primarily driven by a decrease in average loans held for investment (“LHI”), mortgage finance, partially offset by an increase in investment securities yields. Net interest margin for the first quarter of 2022 was 2.23%, an increase of 11 basis point from the fourth quarter of 2021. LHI, excluding mortgage finance, yields decreased 6 basis points from the fourth quarter of 2021 and LHI, mortgage finance yields increased 16 basis points from the fourth quarter of 2021. Total cost of deposits was 0.20% for the first quarter of 2022, a 1 basis point increase from the fourth quarter of 2021.
Non-interest income for the first quarter of 2022 decreased $11.2 million, or 36%, compared to the fourth quarter of 2021. The decrease was primarily related to decreases in investment banking and trading income, resulting from a decrease in loan syndication fees, and other non-interest income. The decrease in other non-interest income resulted from a non-recurring gain recognized in the fourth quarter of 2021 on the sale of a foreclosed asset.
Non-interest expense for the first quarter of 2022 increased $6.4 million, or 4%, compared to the fourth quarter of 2021. The increase was primarily due to increases in salaries and benefits expense, partially offset by decreases in legal and profession and communications and technology expenses. The increase in salaries and benefits expense was primarily due to an increase in headcount and the effect of seasonal payroll expenses that peak in the first quarter.
FIRST QUARTER 2022 COMPARED TO FIRST QUARTER 2021
Net income was $39.7 million, or $0.69 per diluted share, for the first quarter of 2022, compared to $71.9 million, or $1.33 per diluted share, for the first quarter of 2021.
The first quarter of 2022 included a $2.0 million negative provision for credit losses, compared to a $6.0 million negative provision for credit losses for the first quarter of 2021. The $2.0 million negative provision for credit losses recorded in the first quarter of 2022 resulted from a decline in criticized loans, partially offset by an increase in loans held for investment, excluding mortgage finance.
Net interest income decreased to $183.5 million for the first quarter of 2022, compared to $194.8 million for the first quarter of 2021, primarily due to a decrease in average LHI, mortgage finance, partially offset by an increase in investment securities yields. Net interest margin increased 19 basis points to 2.23% for the first quarter of 2022, as compared to the first quarter of 2021, primarily due to a shift in the composition of earning assets, primarily declines in interest-bearing cash and cash equivalents and LHI, mortgage finance. LHI, excluding mortgage finance, yields decreased 5 basis points compared to the first quarter of 2021 and LHI, mortgage finance yields decreased 15 basis points from the first quarter of 2021. Total cost of deposits decreased 4 basis points compared to the first quarter of 2021.
Non-interest income for the first quarter of 2022 decreased $24.1 million, or 54%, compared to the first quarter of 2021, as brokered loan fees, servicing fee income and net gain/(loss) on sale of loans held for sale all decreased as a result of the sale of our mortgage servicing rights portfolio and transition of the mortgage correspondent program in 2021. The decline in brokered loan fees was also impacted by lower mortgage finance volumes in the first quarter of 2022 as compared to 2021.
Non-interest expense for the first quarter of 2022 increased $2.8 million, or 2%, compared to the first quarter of 2021. The increase was primarily due to increases in salaries and benefits, primarily due to an increase in headcount, partially offset by a decrease in servicing-related expenses from the sale of our mortgage servicing rights portfolio in 2021.
CREDIT QUALITY
We recorded $512,000 in net recoveries during the first quarter of 2022, compared to net charge-offs of $1.0 million and $6.4 million during the fourth quarter of 2021 and the first quarter of 2021, respectively. Criticized loans totaled $476.1 million at March 31, 2022, compared to $582.9 million at December 31, 2021 and $945.1 million at March 31, 2021. Non-accrual loans HFI totaled $59.3 million at March 31, 2022, compared to $72.5 million at December 31, 2021 and $97.7 million at March 31, 2021. The ratio of non-accrual LHI to total LHI for the first quarter of 2022 was 0.27%, compared to 0.32% for the fourth quarter of 2021 and 0.40% for the first quarter of 2021.
CAPITAL RATIOS
All regulatory ratios continue to be in excess of “well-capitalized” requirements as of March 31, 2022. Our CET 1, tier 1 capital, total capital and leverage ratios were 11.5%, 13.0%, 15.7% and 9.9%, respectively, at March 31, 2022, compared to 11.1%, 12.6%, 15.3% and 9.0%, respectively, at December 31, 2021 and 10.2%, 12.2%, 14.0% and 8.3% at March 31, 2021. At March 31, 2022, our ratio of tangible common equity to total tangible assets was 8.9%, compared to 8.3% at December 31, 2021 and 6.7% at March 31, 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, 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 and market conditions in Texas, the United States or internationally, 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) 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 2022 2021 2021 2021 2021 CONSOLIDATED STATEMENTS OF INCOME Interest income $ 208,530 $ 219,892 $ 216,589 $ 216,953 $ 223,151 Interest expense 24,983 25,860 26,053 27,496 28,339 Net interest income 183,547 194,032 190,536 189,457 194,812 Provision for credit losses (2,000 ) (10,000 ) 5,000 (19,000 ) (6,000 ) Net interest income after provision for credit losses 185,547 204,032 185,536 208,457 200,812 Non-interest income 20,282 31,459 24,779 37,639 44,353 Non-interest expense 153,092 146,649 152,987 149,060 150,316 Income before income taxes 52,737 88,842 57,328 97,036 94,849 Income tax expense 13,087 23,712 13,938 23,555 22,911 Net income 39,650 65,130 43,390 73,481 71,938 Preferred stock dividends 4,313 4,313 4,312 6,317 3,779 Net income available to common stockholders $ 35,337 $ 60,817 $ 39,078 $ 67,164 $ 68,159 Diluted earnings per common share $ 0.69 $ 1.19 $ 0.76 $ 1.31 $ 1.33 Diluted common shares 51,324,027 51,208,161 51,139,555 51,093,660 51,069,511 CONSOLIDATED BALANCE SHEET DATA Total assets $ 31,085,377 $ 34,731,738 $ 36,404,320 $ 35,228,542 $ 40,054,433 Loan held for investment 15,849,434 15,331,457 15,221,404 15,168,565 15,399,174 Loans held for investment, mortgage finance 5,827,965 7,475,497 8,528,313 8,772,799 9,009,081 Loans held for sale 8,085 8,123 9,660 63,747 176,286 Interest-bearing cash and cash equivalents 5,136,680 7,765,996 8,317,926 6,768,650 11,212,276 Investment securities 3,642,015 3,583,808 3,663,874 3,798,275 3,443,058 Non-interest bearing deposits 13,434,723 13,390,370 14,970,462 14,228,038 15,174,642 Total deposits 25,377,938 28,109,365 29,813,668 28,839,563 33,391,970 Short-term borrowings 1,427,033 2,202,832 2,203,470 2,014,481 2,515,587 Long-term debt 929,414 928,738 928,062 927,386 664,968 Stockholders’ equity 3,090,038 3,209,616 3,147,752 3,114,957 3,159,482 End of period shares outstanding 50,710,441 50,618,494 50,605,626 50,592,201 50,557,767 Book value $ 55.02 $ 57.48 $ 56.27 $ 55.64 $ 53.59 Tangible book value(1) $ 54.68 $ 57.14 $ 55.93 $ 55.29 $ 53.24 SELECTED FINANCIAL RATIOS Net interest margin 2.23 % 2.12 % 2.11 % 2.02 % 2.04 % Return on average assets 0.47 % 0.69 % 0.47 % 0.76 % 0.73 % Return on average common equity 4.97 % 8.36 % 5.41 % 9.74 % 10.08 % Non-interest income to average earning assets 0.25 % 0.34 % 0.27 % 0.40 % 0.46 % Efficiency ratio(2) 75.1 % 65.0 % 71.1 % 65.6 % 62.9 % Non-interest expense to average earning assets 1.86 % 1.60 % 1.69 % 1.59 % 1.57 % Tangible common equity to total tangible assets(3) 8.9 % 8.3 % 7.8 % 7.9 % 6.7 % Common Equity Tier 1 11.5 % 11.1 % 10.7 % 10.5 % 10.2 % Tier 1 capital 13.0 % 12.6 % 12.2 % 12.1 % 12.2 % Total capital 15.7 % 15.3 % 14.9 % 14.8 % 14.0 % Leverage 9.9 % 9.0 % 9.0 % 8.4 % 8.3 % (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) March 31, 2022 March 31, 2021 % Change Assets Cash and due from banks $ 234,853 $ 215,835 9 % Interest-bearing cash and cash equivalents 5,136,680 11,212,276 (54 )% Available-for-sale debt securities 2,591,218 3,408,658 (24 )% Held-to-maturity debt securities 1,009,972 — 100 % Equity securities 40,825 34,400 19 % Investment securities 3,642,015 3,443,058 6 % Loans held for sale 8,085 176,286 (95 )% Loans held for investment, mortgage finance 5,827,965 9,009,081 (35 )% Loans held for investment 15,849,434 15,399,174 3 % Less: Allowance for credit losses on loans 211,151 242,484 (13 )% Loans held for investment, net 21,466,248 24,165,771 (11 )% Mortgage servicing rights, net — 121,096 (100 )% Premises and equipment, net 24,181 23,346 4 % Accrued interest receivable and other assets 556,154 679,199 (18 )% Goodwill and intangibles, net 17,161 17,566 (2 )% Total assets $ 31,085,377 $ 40,054,433 (22 )% Liabilities and Stockholders’ Equity Liabilities: Non-interest bearing $ 13,434,723 $ 15,174,642 (11 )% Interest bearing 11,943,215 18,217,328 (34 )% Total deposits 25,377,938 33,391,970 (24 )% Accrued interest payable 8,560 5,629 52 % Other liabilities 252,394 316,797 (20 )% Short-term borrowings 1,427,033 2,515,587 (43 )% Long-term debt 929,414 664,968 40 % Total liabilities 27,995,339 36,894,951 (24 )% Stockholders’ equity: Preferred stock, $.01 par value, $1,000 liquidation value: Authorized shares - 10,000,000 Issued shares - 300,000 and 6,300,000 shares issued at March 31, 2022 and 2021, respectively 300,000 450,000 (33 )% Common stock, $.01 par value: Authorized shares - 100,000,000 Issued shares - 50,710,858 and 50,558,184 at March 31, 2022 and 2021, respectively 507 505 — % Additional paid-in capital 1,011,353 984,207 3 % Retained earnings 1,983,611 1,781,215 11 % Treasury stock - 417 shares at cost at March 31, 2022 and 2021 (8 ) (8 ) — % Accumulated other comprehensive loss, net of taxes (205,425 ) (56,437 ) 264 % Total stockholders’ equity 3,090,038 3,159,482 (2 )% Total liabilities and stockholders’ equity $ 31,085,377 $ 40,054,433 (22 )% TEXAS CAPITAL BANCSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in thousands except per share data) Three Months Ended March 31, 2022 2021 Interest income Interest and fees on loans $ 187,657 $ 210,331 Investment securities 17,302 9,887 Interest-bearing cash and cash equivalents 3,571 2,933 Total interest income 208,530 223,151 Interest expense Deposits 13,630 20,004 Short-term borrowings 758 2,592 Long-term debt 10,595 5,743 Total interest expense 24,983 28,339 Net interest income 183,547 194,812 Provision for credit losses (2,000 ) (6,000 ) Net interest income after provision for credit losses 185,547 200,812 Non-interest income Service charges on deposit accounts 6,022 4,716 Wealth management and trust fee income 3,912 2,855 Brokered loan fees 3,970 9,311 Servicing income 237 9,009 Investment banking and trading income 4,179 5,787 Net gain/(loss) on sale of loans held for sale — 5,572 Other 1,962 7,103 Total non-interest income 20,282 44,353 Non-interest expense Salaries and benefits 100,098 87,522 Occupancy expense 8,885 8,274 Marketing 4,977 1,697 Legal and professional 10,302 8,277 Communications and technology 14,700 15,969 FDIC insurance assessment 3,981 6,613 Servicing-related expenses — 12,989 Other 10,149 8,975 Total non-interest expense 153,092 150,316 Income before income taxes 52,737 94,849 Income tax expense 13,087 22,911 Net income 39,650 71,938 Preferred stock dividends 4,313 3,779 Net income available to common stockholders $ 35,337 $ 68,159 Basic earnings per common share $ 0.70 $ 1.35 Diluted earnings per common share $ 0.69 $ 1.33 TEXAS CAPITAL BANCSHARES, INC. SUMMARY OF CREDIT LOSS EXPERIENCE (dollars in thousands) 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 2022 2021 2021 2021 2021 Allowance for credit losses on loans: Beginning balance $ 211,866 $ 221,957 $ 221,511 $ 242,484 $ 254,615 Loans charged-off: Commercial 110 3,776 4,348 1,412 2,451 Energy — — — 686 5,732 Real estate 350 — — 1,192 — Total charge-offs 460 3,776 4,348 3,290 8,183 Recoveries: Commercial 217 1,933 1,104 308 1,050 Energy 755 601 42 609 715 Real estate — 205 112 — — Total recoveries 972 2,739 1,258 917 1,765 Net charge-offs (512 ) 1,037 3,090 2,373 6,418 Provision for credit losses on loans (1,227 ) (9,054 ) 3,536 (18,600 ) (5,713 ) Ending balance $ 211,151 $ 211,866 $ 221,957 $ 221,511 $ 242,484 Allowance for off-balance sheet credit losses: Beginning balance $ 17,265 $ 18,211 $ 16,747 $ 17,147 $ 17,434 Provision for off-balance sheet credit losses (773 ) (946 ) 1,464 (400 ) (287 ) Ending balance $ 16,492 $ 17,265 $ 18,211 $ 16,747 $ 17,147 Total allowance for credit losses $ 227,643 $ 229,131 $ 240,168 $ 238,258 $ 259,631 Total provision for credit losses $ (2,000 ) $ (10,000 ) $ 5,000 $ (19,000 ) $ (6,000 ) Allowance for credit losses on loans to total loans held for investment 0.97 % 0.93 % 0.93 % 0.93 % 0.99 % Allowance for credit losses on loans to average total loans held for investment 0.99 % 0.91 % 0.95 % 0.98 % 1.03 % Net charge-offs to average total loans held for investment(1) (0.01 )% 0.02 % 0.05 % 0.04 % 0.11 % Net charge-offs to average total loans held for investment for last 12 months(1) 0.03 % 0.06 % 0.33 % 0.31 % 0.59 % Total provision for credit losses to average total loans held for investment(1) (0.04 )% (0.17 )% 0.09 % (0.34 )% (0.10 )% Total allowance for credit losses to total loans held for investment 1.05 % 1.00 % 1.01 % 1.00 % 1.06 % (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 2022 2021 2021 2021 2021 Non-accrual loans held for investment $ 59,327 $ 72,502 $ 87,532 $ 86,636 $ 97,730 Non-accrual loans held for sale — — — — — Other real estate owned (OREO) — — — — — Total non-performing assets $ 59,327 $ 72,502 $ 87,532 $ 86,636 $ 97,730 Non-accrual loans held for investment to total loans held for investment 0.27 % 0.32 % 0.37 % 0.36 % 0.40 % Total non-performing assets to earning assets 0.20 % 0.21 % 0.25 % 0.25 % 0.25 % Allowance for credit losses on loans to non-accrual loans held for investment 3.6 x 2.9 x 2.5 x 2.6 x 2.5 x Loans held for investment past due 90 days and still accruing(1) $ 6,031 $ 3,467 $ 3,405 $ 7,671 $ 6,187 Loans held for investment past due 90 days to total loans held for investment 0.03 % 0.02 % 0.01 % 0.03 % 0.03 % Loans held for sale past due 90 days and still accruing(2) $ 3,865 $ 3,986 $ 3,808 $ 2,695 $ 16,359 (1) At March 31, 2022, loans past due 90 days and still accruing included premium finance loans of $3.2 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. The first quarter of 2021 also includes loans that, pursuant to Ginnie Mae servicing guidelines, we have the unilateral right, but not obligation, to repurchase and thus must record 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 2022 2021 2021 2021 2021 Interest income Interest and fees on loans $ 187,657 $ 204,379 $ 202,748 $ 203,074 $ 210,331 Investment securities 17,302 11,780 10,235 10,918 9,887 Interest-bearing deposits in other banks 3,571 $ 3,733 $ 3,606 2,961 2,933 Total interest income 208,530 219,892 216,589 216,953 223,151 Interest expense Deposits 13,630 14,513 14,719 16,271 20,004 Short-term borrowings 758 771 748 502 2,592 Long-term debt 10,595 10,576 10,586 10,723 5,743 Total interest expense 24,983 25,860 26,053 27,496 28,339 Net interest income 183,547 194,032 190,536 189,457 194,812 Provision for credit losses (2,000 ) (10,000 ) 5,000 (19,000 ) (6,000 ) Net interest income after provision for credit losses 185,547 204,032 185,536 208,457 200,812 Non-interest income Service charges on deposit accounts 6,022 4,702 4,622 4,634 4,716 Wealth management and trust fee income 3,912 3,793 3,382 3,143 2,855 Brokered loan fees 3,970 5,678 6,032 6,933 9,311 Servicing income 237 277 292 5,935 9,009 Investment banking and trading income 4,179 6,456 4,127 8,071 5,787 Net gain/(loss) on sale of loans held for sale — — (1,185 ) (3,070 ) 5,572 Other 1,962 10,553 7,509 11,993 7,103 Total non-interest income 20,282 31,459 24,779 37,639 44,353 Non-interest expense Salaries and benefits 100,098 89,075 87,503 86,830 87,522 Occupancy expense 8,885 8,769 8,324 7,865 8,274 Marketing 4,977 4,286 2,123 1,900 1,697 Legal and professional 10,302 12,673 11,055 9,147 8,277 Communications and technology 14,700 16,490 28,374 14,352 15,969 FDIC insurance assessment 3,981 4,688 4,500 5,226 6,613 Servicing-related expenses — 25 2,396 12,355 12,989 Other 10,149 10,643 8,712 11,385 8,975 Total non-interest expense 153,092 146,649 152,987 149,060 150,316 Income before income taxes 52,737 88,842 57,328 97,036 94,849 Income tax expense 13,087 23,712 13,938 23,555 22,911 Net income 39,650 65,130 43,390 73,481 71,938 Preferred stock dividends 4,313 4,313 4,312 6,317 3,779 Net income available to common shareholders $ 35,337 $ 60,817 $ 39,078 $ 67,164 $ 68,159 TEXAS CAPITAL BANCSHARES, INC. TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED) (dollars in thousands) 1st Quarter 2022 4th Quarter 2021 3rd Quarter 2021 2nd Quarter 2021 1st Quarter 2021 Average
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RateAssets Investment securities(1) $ 3,669,257 $ 17,743 1.96 % $ 3,608,503 $ 12,225 1.34 % $ 3,775,812 $ 10,684 1.12 % $ 3,543,270 $ 11,369 1.29 % $ 3,422,571 $ 10,359 1.23 % Interest-bearing cash and cash equivalents 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 % 11,845,547 2,933 0.10 % Loans held for sale 7,633 113 6.01 % 8,348 51 2.41 % 18,791 54 1.14 % 93,164 781 3.36 % 243,326 1,595 2.66 % Loans held for investment, mortgage finance 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 % 8,177,759 64,942 3.22 % Loans held for investment(1)(2) 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 % 15,457,888 143,935 3.78 % Less: Allowance for credit losses on loans 212,612 — — 223,034 — — 220,984 — — 241,676 — — 254,697 — — Loans held for investment, net 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 % 23,380,950 208,877 3.62 % Total earning assets 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 % 38,892,394 223,764 2.33 % Cash and other assets 819,486 835,293 855,555 996,946 1,064,679 Total assets $ 34,255,284 $ 37,239,701 $ 36,728,957 $ 38,680,661 $ 39,957,073 Liabilities and Stockholders’ Equity Transaction deposits $ 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 % $ 3,991,966 $ 5,861 0.60 % Savings deposits 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 % 12,889,974 10,788 0.34 % Time deposits 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 % 2,204,242 3,355 0.62 % Total interest bearing deposits 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 % 19,086,182 20,004 0.43 % Short-term borrowings 1,770,781 758 0.17 % 2,267,013 771 0.13 % 2,299,692 748 0.13 % 2,349,718 502 0.09 % 2,686,398 2,592 0.39 % Long-term debt 929,005 10,595 4.63 % 928,307 10,576 4.52 % 927,626 10,586 4.53 % 881,309 10,723 4.88 % 464,731 5,743 5.01 % Total interest bearing liabilities 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 % 22,237,311 28,339 0.52 % Non-interest bearing deposits 14,235,749 15,804,061 15,363,568 15,139,546 14,421,505 Other liabilities 243,141 238,833 275,317 274,401 309,644 Stockholders’ equity 3,184,654 3,187,705 3,164,650 3,188,160 2,988,613 Total liabilities and stockholders’ equity $ 34,255,284 $ 37,239,701 $ 36,728,957 $ 38,680,661 $ 39,957,073 Net interest income(1) $ 184,044 $ 194,534 $ 191,068 $ 189,994 $ 195,425 Net interest margin 2.23 % 2.12 % 2.11 % 2.02 % 2.04 % (1) Taxable equivalent rates used where applicable.
(2) Average balances include non-accrual loans which are stated net of unearned income.
INVESTOR CONTACT Jocelyn Kukulka, 469.399.8544 jocelyn.kukulka@texascapitalbank.com MEDIA CONTACT Shannon Wherry, 469.399.8527 shannon.wherry@texascapitalbank.com
