Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the fourth quarter and full year of 2011.

  • Net income increased 104% for the year, 19% on a linked quarter basis and 113% for the fourth quarter of 2011 as compared to the same quarter of 2010
  • EPS increased 99% for the year, 20% on a linked quarter basis and 109% for the fourth quarter of 2011 as compared to the same quarter of 2010
  • Demand deposits increased 21% and total deposits increased 2% from 2010; linked quarter increases of 5% and 1%, respectively
  • Loans held for investment increased 18% and total loans increased 30% from 2010, reflecting linked quarter increases of 5% and 6%, respectively

"We are pleased to report another year of industry-leading growth and record profitability for Texas Capital," said George Jones, CEO. "Especially noteworthy are improvements in operating leverage, credit quality and market share gains in key lines of business. We believe the performance has been exceptional in light of what remains a challenging environment for the banking industry."Texas Capital Bancshares, Inc.

FINANCIAL SUMMARY

    

(dollars and shares in thousands)

 
  2011     2010   % Change  
ANNUAL OPERATING RESULTS(1)
Net Income $ 76,102 $ 37,323 104 %
Diluted EPS $ 1.99 $ 1.00 99 %
ROA 1.12 % .63 %
ROE 13.39 % 7.23 %
Diluted Shares 38,333 37,346
 
QUARTERLY OPERATING RESULTS(1)
Net Income $ 25,745 $ 12,076 113 %
Diluted EPS $ .67 $ .32 109 %
ROA 1.28 % .72 %
ROE 17.05 % 9.04 %
Diluted Shares 38,609 37,658
 
BALANCE SHEET(1)
Total Assets $ 8,137,225 $ 6,445,679 26 %
Demand Deposits 1,751,944 1,451,307 21 %
Total Deposits 5,556,257 5,455,401 2 %
Loans Held for Investment 5,572,371 4,711,330 18 %
Total Loans 7,652,452 5,905,539 30 %
Stockholders' Equity 616,331 528,319 17 %
 

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

 

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income from continuing operations of $76.1 million for the year ended December 31, 2011 compared to $37.3 million in 2010. For the fourth quarter of 2011, we earned $25.7 million compared to $12.1 million for the same period in 2010. On a fully diluted basis, earnings per common share from continuing operations were $1.99 for the year ended December 31, 2011, compared to $1.00 for 2010. For the fourth quarter of 2011, diluted earnings per share was $.67 compared to $.32 for the same period in 2010. The discussion below relates only to continuing operations.

Return on average equity was 13.39 percent and return on average assets was 1.12 percent for the year ended December 31, 2011, compared to 7.23 percent and .63 percent, respectively for 2010. Return on average equity was 17.05 percent and return on average assets was 1.28 percent for the fourth quarter of 2011, compared to 9.04 percent and .72 percent, respectively, for the fourth quarter of 2010.

Net interest income was $88.1 million for the fourth quarter of 2011, compared to $79.2 million in the third quarter of 2011 and $66.0 million for the fourth quarter of 2010. For 2011, net interest income reached $302.9 million compared to $241.7 million in 2010. For 2011 compared to 2010, the increases in net interest margin and net interest income are due to the growth and improved spreads in loans and the substantial reduction in funding costs. The net interest margin in the fourth quarter of 2011 was 4.60 percent, a 48 basis point increase from the fourth quarter of 2010 and a 21 basis point decrease from the third quarter of 2011. The 21 basis point reduction in net interest margin from the third quarter of 2011 related primarily to the $902.5 million growth in average loans held for sale, which experienced reduced rates during the fourth quarter. In addition, the yield on average loans held for investment, which grew $175.8 million from the third quarter, decreased slightly. While the growth in average loans and decreases in yields caused a reduction in the net interest margin, the growth produced a substantial increase in net interest income in the fourth quarter.

Average loans held for investment for the year ended December 31, 2011 were $5.1 billion, an increase of $583.5 million, or 13%, from 2010. Average loans held for sale for the year ended December 31, 2011 increased $327.9 million, or 37%, compared to 2010. Average loans held for investment for the fourth quarter of 2011 were $5.4 billion, an increase of $861.8 million from the fourth quarter of 2010 and increased $175.8 million from the third quarter of 2011. Average loans held for sale for the fourth quarter of 2011 increased $769.6 million compared to the fourth quarter of 2010 and increased $902.5 million from the third quarter of 2011.

Average total deposits for the fourth quarter of 2011 decreased by $131.6 million from the fourth quarter of 2010 and increased by $377.9 million from the third quarter of 2011. For the same periods, the average balance of demand deposits increased by $321.9 million, or 24 percent, to $1.7 billion from $1.3 billion during the fourth quarter of 2010 and increased $134.0 million, or 9 percent, from the third quarter of 2011.

In the fourth quarter of 2011, we experienced decreases in levels of non-performing assets and credit losses. Credit costs, including the provision for credit losses and valuation charges related to other real estate owned ("OREO") totaled $7.1 million in the fourth quarter of 2011 compared to $14.3 million in the fourth quarter of 2010 and $8.7 million in the third quarter of 2011. We recorded a $6.0 million provision for credit losses in the fourth quarter of 2011 compared to $12.0 million in the fourth quarter of 2010 and $7.0 million in the third quarter of 2011. At December 31, 2011, the combined reserve decreased to 1.31 percent of loans held for investment as compared to 1.56 percent at December 31, 2010 and 1.32 percent at September 30, 2011. In management's opinion, the reserve is appropriate and is derived from consistent application of the methodology for establishing the adequacy of reserves for Texas Capital Bank's loan portfolio. In the fourth quarter of 2011, net charge-offs were $3.4 million, compared to net charge-offs of $17.0 million in the fourth quarter of 2010 and net charge-offs of $6.3 million in the third quarter of 2011. Non-accrual loans were $54.6 million, or .98 percent of loans held for investment at the end of the fourth quarter of 2011, $112.1 million, or 2.38 percent, at the end of the fourth quarter of 2010 and $66.7 million, or 1.26 percent, at the end of the third quarter 2011. At December 31, 2011, total OREO was $34.1 million compared to $42.3 million at the end of the fourth quarter of 2010, and $35.8 million at the end of the third quarter of 2011. The OREO balance of $34.1 million at December 31, 2011 is stated net of a $10.7 million valuation allowance. The valuation charge for OREO reflected in non-interest expense was $1.1 million in the fourth quarter of 2011 compared to $2.3 million in the fourth quarter of 2010 and $1.7 million in the third quarter of 2011.

For the year ended December 31, 2011, non-interest income was $32.2 million, a slight decrease from $32.3 million in 2010. For the fourth quarter of 2011, non-interest income increased to $9.0 million compared to $7.6 million in the third quarter and decreased $184,000 from $9.2 million in the fourth quarter of 2010.

Non-interest expense for the fourth quarter of 2011 increased $5.8 million, or 13 percent, to $50.4 million from $44.6 million in the fourth quarter of 2010. The increase is primarily related to a $4.7 million increase in salaries and employee benefits to $26.7 million from $22.0 million, which was primarily due to general business growth. Marketing expense increased $1.6 million from the fourth quarter of 2010 due to expansion of customer bases in both loans and deposits. Additionally, legal and professional expense increased $478,000 from the fourth quarter of 2010. Allowance and other carrying costs for OREO expense decreased $850,000 to $2.4 million, which included a $1.1 million valuation expense. Of the $1.1 million valuation expense in the fourth quarter of 2011, $691,000 related to direct write-downs of the OREO balance and $400,000 related to increasing the valuation allowance, compared to $1.8 million and $544,000, respectively, in the same period of 2010. Additionally, FDIC insurance expense decreased $1.0 million from the fourth quarter of 2010.

Stockholders' equity increased by 17 percent from $528.3 million at December 31, 2010 to $616.3 million at December 31, 2011. Contributing to the increase is primarily retained net income. The Bank is well capitalized under regulatory guidelines and at December 31, 2011, the Company's ratio of tangible common equity to total tangible assets was 7.3 percent.

ABOUT TEXAS CAPITAL BANCSHARES, INC.

Texas Capital Bancshares, Inc. (NASDAQ: TCBI) is the parent company of Texas Capital Bank, a commercial bank that delivers highly personalized financial services to businesses and private clients. Headquartered in Dallas, the Bank has full-service locations in Austin, Dallas, Fort Worth, Houston and San Antonio.

This release contains forward-looking statements, which are subject to risks and uncertainties. A number of factors, many of which are beyond Texas Capital Bancshares' control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include the risk of adverse impacts from general economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. These and other factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Form 10-K and other filings made by Texas Capital Bancshares with the Securities and Exchange Commission.

 
TEXAS CAPITAL BANCSHARES, INC.
 
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
  4th Quarter   3rd Quarter   2nd Quarter   1st Quarter   4th Quarter
  2011       2011       2011       2011       2010  
CONSOLIDATED STATEMENT OF INCOME
Interest income $ 92,967 $ 83,263 $ 75,259 $ 70,111 $ 75,432
Interest expense   4,820       4,065       4,165       5,613       9,477  
Net interest income 88,147 79,198 71,094 64,498 65,955
Provision for credit losses   6,000       7,000       8,000       7,500       12,000  
Net interest income after provision for credit losses 82,147 72,198 63,094 56,998 53,955
Non-interest income 8,994 7,603 7,951 7,684 9,178
Non-interest expense   50,353       46,186       45,263       46,399       44,582  
Income from continuing operations before income taxes

40,788

33,615

25,782

18,283

18,551

Income tax expense   15,043       11,905       9,074       6,344       6,475  
Income from continuing operations 25,745 21,710 16,708 11,939 12,076
Loss from discontinued operations (after-tax)   (5 )     (7 )     (54 )     (60 )     (22 )
Net income $ 25,740     $ 21,703     $ 16,654     $ 11,879     $ 12,054  
Diluted EPS from continuing operations $ .67 $ .56 $ .44 $ .31 $ .32
Diluted EPS $ .67 $ .56 $ .43 $ .31 $ .32
 
Diluted shares 38,609,094 38,435,386 38,332,888 38,341,679 37,658,396
 
CONSOLIDATED BALANCE SHEET DATA
Total assets $ 8,137,225 $ 7,705,372 $ 6,709,338 $ 6,061,046 $ 6,445,679
Loans held for investment 5,572,371 5,302,584 5,164,293 4,711,424 4,711,330
Loans held for sale 2,080,081 1,909,567 1,122,330 811,400 1,194,209
Securities 143,710 142,895 157,821 171,990 185,424
Demand deposits 1,751,944 1,661,125 1,483,159 1,480,695 1,451,307
Total deposits 5,556,257 5,486,463 5,421,726 5,221,991 5,455,401
Other borrowings 1,768,116 1,451,894 561,902 133,995 297,887
Long-term debt 113,406 113,406 113,406 113,406 113,406
Stockholders' equity 616,331 587,944 563,924 544,925 528,319
 
End of period shares outstanding 37,666,291 37,457,762 37,329,726 37,216,929 36,956,688
Book value (excluding securities gains/losses) $ 16.24 $ 15.56 $ 14.97 $ 14.50 $ 14.15
Tangible book value (excluding securities gains/losses)

$

15.69

$

15.01

$

14.41

$

14.25

$

13.89

 
SELECTED FINANCIAL RATIOS
From continuing operations
Net interest margin 4.60 % 4.81 % 4.86 % 4.46 % 4.12 %
Return on average assets 1.28 % 1.25 % 1.08 % .78 % .72 %
Return on average equity 17.05 % 14.93 % 12.13 % 8.91 % 9.04 %
Non-interest income to earning assets .47 % .46 % .54 % .53 % .57 %
Efficiency ratio 51.8 % 53.2 % 57.3 % 64.3 % 59.3 %
Efficiency ratio (excluding OREO valuation charge) 50.7 % 51.3 % 56.3 % 59.7 % 56.2 %
Non-interest expense to earning assets 2.62 % 2.80 % 3.08 % 3.20 % 2.78 %
Non-interest expense to earning assets (excluding OREO valuation charge)

2.57

%

2.70

%

3.03

%

2.97

%

2.63

%

 
Tangible common equity to total tangible assets 7.3 % 7.3 % 8.0 % 8.8 % 8.0 %
Tier 1 capital ratio 9.6 % 9.7 % 10.2 % 11.2 % 10.6 %
Total capital ratio 10.6 % 10.7 % 11.3 % 12.5 % 11.8 %
Tier 1 leverage ratio 8.8 % 9.8 % 10.5 % 10.3 % 9.4 %
 
TEXAS CAPITAL BANCSHARES, INC.
 
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
  December 31,   December 31,   %
  2011       2010     Change
Assets
Cash and due from banks $ 101,258 $ 104,866 (3 )%
Federal funds sold - 75,000 (100 )%
Securities, available-for-sale 143,710 185,424 (22 )%
Loans held for sale 2,080,081 1,194,209 74 %
Loans held for sale from discontinued operations 393 490 (20 )%
Loans held for investment (net of unearned income) 5,572,371 4,711,330 18 %
Less: Allowance for loan losses   70,295       71,510     2 %
Loans held for investment, net 5,502,076 4,639,820 19 %
Premises and equipment, net 11,457 11,568 (1 )%
Accrued interest receivable and other assets 278,163 225,309 22 %
Goodwill and intangibles, net   20,480       9,483     116 %
Total assets $ 8,137,618     $ 6,446,169     26 %
 
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing $ 1,751,944 $ 1,451,307 21 %
Interest bearing 3,324,040 3,545,146 (6 )%
Interest bearing in foreign branches   480,273       458,948     5 %
Total deposits 5,556,257 5,455,401 2 %
 
Accrued interest payable 599 2,579 (77 )%
Other liabilities 82,909 48,577 63 %
Federal funds purchased 412,249 283,781 45 %
Repurchase agreements 23,801 10,920 118 %
Other borrowings 1,332,066 3,186 N/M
Trust preferred subordinated debentures   113,406       113,406     -  
Total liabilities 7,521,287 5,917,850 27 %
 
Stockholders' equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - - -
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 37,666,708 and 36,957,104 at December 31, 2011 and 2010, respectively

376

369

2

%

Additional paid-in capital 349,458 336,796 4 %
Retained earnings 261,783 185,807 41 %
Treasury stock (shares at cost: 417 at December 31, 2011 and 2010, respectively)

(8

)

(8

)

-

Accumulated other comprehensive income, net of taxes   4,722       5,355     (12 )%
Total stockholders' equity   616,331       528,319     17 %
Total liabilities and stockholders' equity $ 8,137,618     $ 6,446,169     26 %
 
TEXAS CAPITAL BANCSHARES, INC.        
 
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
Three Months Ended

December 31

Year Ended

December 31

  2011       2010       2011       2010  
Interest income
Interest and fees on loans $ 91,512 $ 73,206 $ 314,753 $ 270,003
Securities 1,408 2,018 6,458 9,481
Federal funds sold 1 118 37 210
Deposits in other banks   46       90       352       116  
Total interest income 92,967 75,432 321,600 279,810
Interest expense
Deposits 3,471 8,371 14,950 33,309
Federal funds purchased 273 229 602 1,097
Repurchase agreements 4 1 10 10
Other borrowings 404 - 528 48
Trust preferred subordinated debentures   668       876       2,573       3,672  
Total interest expense   4,820       9,477       18,663       38,136  
Net interest income 88,147 65,955 302,937 241,674
Provision for credit losses   6,000       12,000       28,500       53,500  
Net interest income after provision for credit losses 82,147 53,955 274,437 188,174
Non-interest income
Service charges on deposit accounts 1,504 1,708 6,480 6,392
Trust fee income 1,108 899 4,219 3,846
Bank owned life insurance (BOLI) income 500 482 2,095 1,889
Brokered loan fees 3,408 3,793 11,335 11,190
Equipment rental income 223 802 1,905 4,134
Other   2,251       1,494       6,198       4,812  
Total non-interest income 8,994 9,178 32,232 32,263
Non-interest expense
Salaries and employee benefits 26,658 21,964 100,535 85,298
Net occupancy expense 3,537 3,140 13,657 12,314
Leased equipment depreciation 198 623 1,482 3,297
Marketing 3,798 2,198 11,109 5,419
Legal and professional 4,362 3,884 14,996 11,837
Communications and technology 2,468 2,143 9,608 8,511
FDIC insurance assessment 1,595 2,611 7,543 9,202
Allowance and other carrying costs for OREO 2,383 3,233 9,586 10,404
Other   5,354       4,786       19,685       17,206  
Total non-interest expense   50,353       44,582       188,201       163,488  
Income from continuing operations before income taxes 40,788 18,551 118,468 56,949
Income tax expense   15,043       6,475       42,366       19,626  
Income from continuing operations 25,745 12,076 76,102 37,323
Loss from discontinued operations (after-tax)   (5 )     (22 )     (126 )     (136 )
Net income $ 25,740     $ 12,054     $ 75,976     $ 37,187  
 
Basic earnings per common share:
Income from continuing operations $ .69 $ .33 $ 2.04 $ 1.02
Net income $ .69 $ .33 $ 2.03 $ 1.02
 
Diluted earnings per common share:
Income from continuing operations $ .67 $ .32 $ 1.99 $ 1.00
Net income $ .67 $ .32 $ 1.98 $ 1.00
 
TEXAS CAPITAL BANCSHARES, INC.
 
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
  4th Quarter   3rd Quarter   2nd Quarter   1st Quarter   4th Quarter
  2011       2011       2011       2011       2010  
Reserve for loan losses:
Beginning balance $ 67,897 $ 67,748 $ 70,248 $ 71,510 $ 75,655
Loans charged-off:
Commercial 1,348 1,523 3,654 1,993 11,135
Real estate - construction - - - - -
Real estate - term 2,438 5,049 6,424 7,364 5,751
Consumer - - 283 34 216
Leases   238       (16 )     464       532       148  
Total 4,024 6,556 10,825 9,923 17,250
Recoveries:
Commercial 390 109 143 546 47
Real estate - construction - 5 - 243 -
Real estate - term 45 152 122 31 101
Consumer 4 1 3 1 2
Leases   171       36       26       150       75  
Total recoveries   610       303       294       971       225  
Net charge-offs 3,414 6,253 10,531 8,952 17,025
Provision for loan losses   5,812       6,402       8,031       7,690       12,880  
Ending balance $ 70,295     $ 67,897     $ 67,748     $ 70,248     $ 71,510  
 
Reserve for off-balance sheet credit losses:
Beginning balance $ 2,274 $ 1,676 $ 1,707 $ 1,897 $ 2,777
Provision (benefit) for off-balance sheet credit losses   188       598       (31 )     (190 )     (880 )
Ending balance $ 2,462     $ 2,274     $ 1,676     $ 1,707     $ 1,897  
 
Total reserves for credit losses $ 72,757 $ 70,171 $ 69,424 $ 71,955 $ 73,407
 
Total provision for credit losses $ 6,000 $ 7,000 $ 8,000 $ 7,500 $ 12,000
 
Reserve to loans held for investment(2) 1.26 % 1.28 % 1.31 % 1.49 % 1.52 %
Reserve to average loans held for investment(2) 1.30 % 1.30 % 1.39 % 1.49 % 1.58 %
Net charge-offs to average loans(1)(2) .25 % .48 % .86 % .77 % 1.49 %
Net charge-offs to average loans for last twelve months(1)(2) .58 % .90 % 1.06 % 1.11 % 1.14 %
Total provision for credit losses to average loans(1)(2) .44 % .53 % .66 % .64 % 1.05 %
Combined reserves for credit losses to loans held for investment(2)

1.31

%

1.32

%

1.34

%

1.53

%

1.56

%

 
Non-performing assets (NPAs):
Non-accrual loans $ 54,580 $ 66,714 $ 77,884 $ 116,479 $ 112,090
Other real estate owned (OREO) (4)   34,077       35,796       27,285       26,172       42,261  
Total $ 88,657     $ 102,510     $ 105,169     $ 142,651     $ 154,351  
 
Non-accrual loans to loans(2) .98 % 1.26 % 1.51 % 2.47 % 2.38 %
Total NPAs to loans plus OREO(2) 1.58 % 1.92 % 2.03 % 3.01 % 3.25 %
Reserve for loan losses to non-accrual loans 1.3x 1.0x .9x .6x .6x
 
Restructured loans $ 25,104 $ 24,963 $ 23,540 $ 22,219 $ 4,319
Loans past due 90 days and still accruing(3) $ 5,467 $ 3,003 $ 10,333 $ 2,529 $ 6,706
 
Loans past due 90 days to loans(2) .10 % .06 % .20 % .05 % .14 %

(1) Interim period ratios are annualized.

(2) Excludes loans held for sale.

(3) At December 31, 2011, loans past due 90 days and still accruing includes premium finance loans of $2.5 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.

(4) At December 31, 2011, OREO balance is net of $10.7 million valuation allowance.

 
TEXAS CAPITAL BANCSHARES, INC.
 
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in thousands)
         
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter
  2011       2011       2011       2011       2010  
Interest income
Interest and fees on loans $ 91,512 $ 81,692 $ 73,509 $ 68,040 $ 73,206
Securities 1,408 1,524 1,680 1,846 2,018
Federal funds sold 1 3 5 28 118
Deposits in other banks   46       44       65       197       90  
Total interest income 92,967 83,263 75,259 70,111 75,432
Interest expense
Deposits 3,471 3,191 3,417 4,871 8,371
Federal funds purchased 273 128 94 107 229
Repurchase agreements 4 2 2 2 1
Other borrowings 404 110 14 - -
Trust preferred subordinated debentures   668       634       638       633       876  
Total interest expense   4,820       4,065       4,165       5,613       9,477  
Net interest income 88,147 79,198 71,094 64,498 65,955
Provision for credit losses   6,000       7,000       8,000       7,500       12,000  
Net interest income after provision for credit losses 82,147 72,198 63,094 56,998 53,955
Non-interest income
Service charges on deposit accounts 1,504 1,585 1,608 1,783 1,708
Trust fee income 1,108 1,091 1,066 954 899
Bank owned life insurance (BOLI) income 500 533 539 523 482
Brokered loan fees 3,408 2,849 2,558 2,520 3,793
Equipment rental income 223 223 676 783 802
Other   2,251       1,322       1,504       1,121       1,494  
Total non-interest income 8,994 7,603 7,951 7,684 9,178
Non-interest expense
Salaries and employee benefits 26,658 25,596 24,109 24,172 21,964
Net occupancy expense 3,537 3,367 3,443 3,310 3,140
Leased equipment depreciation 198 281 447 556 623
Marketing 3,798 2,455 2,733 2,123 2,198
Legal and professional 4,362 3,647 4,264 2,723 3,884
Communications and technology 2,468 2,210 2,584 2,347 2,143
FDIC insurance assessment 1,595 1,465 1,972 2,511 2,611
Allowance and other carrying costs for OREO 2,383 2,150 1,023 4,030 3,233
Other   5,354       5,015       4,688       4,627       4,786  
Total non-interest expense   50,353       46,186       45,263       46,399       44,582  
Income from continuing operations before income taxes

40,788

33,615

25,782

18,283

18,551

Income tax expense   15,043       11,905       9,074       6,344       6,475  
Income from continuing operations 25,745 21,710 16,708 11,939 12,076
Loss from discontinued operations (after-tax)   (5 )     (7 )     (54 )     (60 )     (22 )
Net income $ 25,740     $ 21,703     $ 16,654     $ 11,879     $ 12,054  
 

TEXAS CAPITAL BANCSHARES, INC.

 

QUARTERLY FINANCIAL SUMMARY - UNAUDITED

Consolidated Daily Average Balances, Average Yields and Rates

Continuing Operations

(Dollars in thousands)
 
  4th Quarter 2011   3rd Quarter 2011   2nd Quarter 2011   1st Quarter 2011   4th Quarter 2010
Average

Balance

  Revenue/

Expense (1)

   Yield/

Rate

Average

Balance

  Revenue/

Expense (1)

   Yield/

Rate

Average

Balance

  Revenue/

Expense (1)

   Yield/

Rate

Average

Balance

  Revenue/

Expense (1)

   Yield/

Rate

Average

Balance

  Revenue/

Expense (1)

   Yield/

Rate

Assets                    
Securities - Taxable $ 109,761 $ 1,126 4.07 % $ 115,871 $ 1,214 4.16 % $ 127,269 $ 1,346 4.24 % $ 140,007 $ 1,500 4.35 % $ 155,180 $ 1,666 4.26 %
Securities - Non-taxable(2) 30,065 434 5.73 % 33,051 477 5.73 % 35,804 514 5.76 % 37,154 532 5.81 % 37,848 541 5.67 %
Federal funds sold 8,505 1 0.05 % 20,864 3 0.06 % 14,303 5 0.14 % 44,322 28 0.26 % 241,907 118 0.19 %
Deposits in other banks 42,644 46 0.43 % 36,495 44 0.48 % 77,928 65 0.33 % 277,228 197 0.29 % 144,650 90 0.25 %
Loans held for sale 2,093,883 22,332 4.23 % 1,191,375 13,340 4.44 % 808,165 9,591 4.76 % 735,682 8,677 4.78 % 1,324,264 15,314 4.59 %
Loans held for investment 5,395,253 69,180 5.09 % 5,219,496 68,352 5.20 % 4,890,696 63,918 5.24 % 4,721,928 59,363 5.10 % 4,533,501 57,892 5.07 %
Less reserve for loan

losses

  67,214    

-

 

-

    66,215    

-

 

-

    68,031    

-

 

-

    70,142    

-

 

-

    74,580    

-

 

-

 
Loans, net of reserve   7,421,922     91,512   4.89 %   6,344,656     81,692   5.11 %   5,630,830     73,509   5.24 %   5,387,468     68,040   5.12 %   5,783,185     73,206   5.02 %
Total earning assets 7,612,897 93,119 4.85 % 6,550,937 83,430 5.05 % 5,886,134 75,439 5.14 % 5,886,179 70,297 4.84 % 6,362,770 75,621 4.72 %
Cash and other assets   382,577   333,563   306,372   297,060   285,566
Total assets $ 7,995,474 $ 6,884,500 $ 6,192,506 $ 6,183,239 $ 6,648,336
 
Liabilities and Stockholders' Equity
Transaction deposits $ 429,980 $ 33 0.03 % $ 412,203 $ 52 0.05 % $ 375,084 $ 55 0.06 % $ 345,978 $ 55 0.06 % $ 434,160 $ 132 0.12 %
Savings deposits 2,422,465 2,062 0.34 % 2,253,123 1,664 0.29 % 2,465,118 1,700 0.28 % 2,469,435 2,371 0.39 % 2,511,343 3,978 0.63 %
Time deposits 534,441 927 0.69 % 468,196 1,032 0.87 % 541,337 1,351 1.00 % 709,604 1,921 1.10 % 1,022,509 3,068 1.19 %
Deposits in foreign branches   578,728     449   0.31 %   588,221     443   0.30 %   415,998     311   0.30 %   376,570     524   0.56 %   451,088     1,193   1.05 %
Total interest bearing deposits 3,965,614

3,471

0.35

%

3,721,743

3,191

0.34

%

3,797,537

3,417

0.36

%

3,901,587

4,871

0.51

%

4,419,100

8,371

0.75

%

Other borrowings 1,588,198 681 0.17 % 894,073 240 0.11 % 233,388 110 0.19 % 159,450 109 0.28 % 212,939 230 0.43 %
Trust preferred subordinated debentures   113,406    

668

 

2.34

%

  113,406    

634

 

2.22

%

  113,406    

638

 

2.26

%

  113,406    

633

 

2.26

%

  113,406    

876

 

3.06

%

Total interest bearing liabilities 5,667,218

4,820

0.34

%

4,729,222

4,065

0.34

%

4,144,331

4,165

0.40

%

4,174,443

5,613

0.55

%

4,745,445

9,477

0.79

%

Demand deposits 1,659,132 1,525,087 1,455,366 1,417,734 1,337,213
Other liabilities 70,142 53,233 40,177 47,753 35,589
Stockholders' equity   598,982   576,958   552,632   543,309   530,089
Total liabilities and stockholders' equity $ 7,995,474 $ 6,884,500 $ 6,192,506 $ 6,183,239 $ 6,648,336
 
Net interest income $ 88,299 $ 79,365 $ 71,274 $ 64,684 $ 66,144
Net interest margin 4.60 % 4.81 % 4.86 % 4.46 % 4.12 %

(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.

Texas Capital Bancshares, Inc.
Myrna Vance, 214-932-6646
myrna.vance@texascapitalbank.com