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 Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | ||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||
| 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.
