Fourth quarter 2023 net income of $20.2 million and net income available to common stockholders of $15.8 million, or $0.33 per diluted share
Book Value and Tangible Book Value(1) per share both increased 6.1%, reaching record levels, after giving effect to the repurchase of $44.8 million in shares
Capital ratios continue to be strong, including 12.6% CET1 and 17.1% Total Capital
DALLAS, Jan. 18, 2024 (GLOBE NEWSWIRE) — Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the fourth quarter and full year of 2023.
Net income available to common stockholders was $15.8 million, or $0.33 per diluted share, for the fourth quarter of 2023, compared to $57.4 million, or $1.18 per diluted share, for the third quarter of 2023 and $212.9 million, or $4.23 per diluted share, for the fourth quarter of 2022. The fourth quarter of 2023 included Federal Deposit Insurance Corporation (“FDIC”) special assessment expense of $19.9 million ($0.32 per diluted share).
“The firm continued to execute on its strategic plan to deliver something unique and differentiated for our clients in the midst of tremendous industry pressure in 2023,” said Rob C. Holmes, President and CEO. “Continued client adoption of our broad platform coupled with significant structural improvements in our operating model and near record levels of capital and liquidity provide the foundation for long-term value creation.”
| FINANCIAL RESULTS | |||||||||||||||||||
| (dollars and shares in thousands) | |||||||||||||||||||
| 4th Quarter | 3rd Quarter | 4th Quarter | Full Year | Full Year | |||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| OPERATING RESULTS | |||||||||||||||||||
| Net income | $ | 20,150 | $ | 61,679 | $ | 217,251 | $ | 189,141 | $ | 332,478 | |||||||||
| Net income available to common stockholders | $ | 15,838 | $ | 57,366 | $ | 212,939 | $ | 171,891 | $ | 315,228 | |||||||||
| Diluted earnings per common share | $ | 0.33 | $ | 1.18 | $ | 4.23 | $ | 3.54 | $ | 6.18 | |||||||||
| Diluted common shares | 48,098 | 48,529 | 50,283 | 48,610 | 51,047 | ||||||||||||||
| Return on average assets | 0.27 | % | 0.81 | % | 2.80 | % | 0.64 | % | 1.04 | % | |||||||||
| Return on average common equity | 2.25 | % | 8.08 | % | 30.66 | % | 6.15 | % | 11.33 | % | |||||||||
| BALANCE SHEET | |||||||||||||||||||
| Loans held for investment | $ | 16,362,230 | $ | 16,183,882 | $ | 15,197,307 | |||||||||||||
| Loans held for investment, mortgage finance | 3,978,328 | 4,429,489 | 4,090,033 | ||||||||||||||||
| Total loans held for investment | 20,340,558 | 20,613,371 | 19,287,340 | ||||||||||||||||
| Loans held for sale | 44,105 | 155,073 | 36,357 | ||||||||||||||||
| Total assets | 28,356,266 | 29,628,249 | 28,414,642 | ||||||||||||||||
| Non-interest bearing deposits | 7,328,276 | 9,352,883 | 9,618,081 | ||||||||||||||||
| Total deposits | 22,371,839 | 23,878,978 | 22,856,880 | ||||||||||||||||
| Stockholders’ equity | 3,199,142 | 3,077,700 | 3,055,351 | ||||||||||||||||
(1) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
FOURTH QUARTER 2023 COMPARED TO THIRD QUARTER 2023
For the fourth quarter of 2023, net income available to common stockholders was $15.8 million, or $0.33 per diluted share, compared to $57.4 million, or $1.18 per diluted share, for the third quarter of 2023.
Provision for credit losses for the fourth quarter of 2023 was $19.0 million, compared to $18.0 million for the third quarter of 2023. The $19.0 million provision for credit losses recorded in the fourth quarter of 2023 resulted primarily from increases in criticized and non-accrual loans, as well as $13.8 million in net charge-offs.
Net interest income was $214.7 million for the fourth quarter of 2023, compared to $232.1 million for the third quarter of 2023. The decrease in net interest income was primarily due to a decrease in loans held for investment (“LHI”), mortgage finance yields, as well as increases in funding costs and average interest-bearing liabilities. Net interest margin for the fourth quarter of 2023 was 2.93%, a decrease of 20 basis points from the third quarter of 2023. LHI, excluding mortgage finance, yields increased 7 basis points from the third quarter of 2023 and LHI, mortgage finance yields decreased 152 basis points from the third quarter of 2023. Total cost of deposits was 2.82% for the fourth quarter of 2023, a 20 basis point increase from the third quarter of 2023.
Non-interest income for the fourth quarter of 2023 decreased $15.7 million, or 34%, compared to the third quarter of 2023, primarily due to a decrease in investment banking and trading income.
Non-interest expense for the fourth quarter of 2023 increased $21.5 million, or 12%, compared to the third quarter of 2023, primarily due to an increase in FDIC insurance assessment expense, which included $19.9 million in special assessment expense recorded in the fourth quarter of 2023.
FOURTH QUARTER 2023 COMPARED TO FOURTH QUARTER 2022
Net income available to common stockholders was $15.8 million, or $0.33 per diluted share, for the fourth quarter of 2023, compared to $212.9 million, or $4.23 per diluted share, for the fourth quarter of 2022.
The fourth quarter of 2023 included a $19.0 million provision for credit losses, reflecting increases in criticized and non-accrual loans and net charge-offs of $13.8 million, compared to a $34.0 million provision for credit losses for the fourth quarter of 2022.
Net interest income decreased to $214.7 million for the fourth quarter of 2023, compared to $247.6 million for the fourth quarter of 2022, primarily due to an increase in funding costs and a decrease in average earning assets, partially offset by an increase in yields on average earning assets. Net interest margin decreased 33 basis points to 2.93% for the fourth quarter of 2023, as compared to the fourth quarter of 2022. LHI, excluding mortgage finance, yields increased 139 basis points compared to the fourth quarter of 2022 and LHI, mortgage finance yields decreased 293 basis points from the fourth quarter of 2022. Total cost of deposits increased 129 basis points compared to the fourth quarter of 2022.
Non-interest income for the fourth quarter of 2023 decreased $246.5 million, or 89%, compared to the fourth quarter of 2022. The decrease was primarily due to a non-recurring $248.5 million gain related to the sale of our premium finance subsidiary recorded in the fourth quarter of 2022.
Non-interest expense for the fourth quarter of 2023 decreased $11.7 million, or 5%, compared to the fourth quarter of 2022, primarily due to decreases in occupancy, marketing, legal and professional and other expenses, partially offset by an increase in FDIC insurance assessment expense, resulting from the FDIC special assessment described above. The fourth quarter of 2022 included $13.0 million in legal and professional expense related to the sale of our premium finance subsidiary, $9.8 million in restructuring reserves, primarily related to occupancy expense, and $8.0 million in charitable contributions recorded in other non-interest expense.
CREDIT QUALITY
Net charge-offs of $13.8 million were recorded during the fourth quarter of 2023, compared to net charge-offs of $8.9 million and $15.0 million during the third quarter of 2023 and the fourth quarter of 2022, respectively. Criticized loans totaled $738.2 million at December 31, 2023, compared to $677.4 million at September 30, 2023 and $513.2 million at December 31, 2022. Non-accrual LHI totaled $81.4 million at December 31, 2023, compared to $63.1 million at September 30, 2023 and $48.3 million at December 31, 2022. The ratio of non-accrual LHI to total LHI for the fourth quarter of 2023 was 0.40%, compared to 0.31% for the third quarter of 2023 and 0.25% for the fourth quarter of 2022. The ratio of total allowance for credit losses to total LHI was 1.46% at December 31, 2023, compared to 1.41% and 1.43% at September 30, 2023 and December 31, 2022, respectively.
REGULATORY RATIOS AND CAPITAL
All regulatory ratios continue to be in excess of “well capitalized” requirements as of December 31, 2023. Our CET1, tier 1 capital, total capital and leverage ratios were 12.6%, 14.2%, 17.1% and 12.2%, respectively, at December 31, 2023, compared to 12.7%, 14.3%, 17.1% and 12.1%, respectively, at September 30, 2023 and 13.0%, 14.7%, 17.7% and 11.5%, respectively, at December 31, 2022. At December 31, 2023, our ratio of tangible common equity to total tangible assets was 10.2%, compared to 9.4% at September 30, 2023 and 9.7% at December 31, 2022.
During the fourth quarter of 2023, the Company repurchased 809,623 shares of its common stock for an aggregate purchase price, including excise tax expense, of $44.8 million, at a weighted average price of $54.90 per share. On January 17, 2024, the Company’s board of directors authorized a new share repurchase program under which the Company may repurchase up to $150.0 million in shares of its outstanding common stock through January 31, 2025. Remaining repurchase authorization under the January 18, 2023 share repurchase program was terminated upon authorization of this new program.
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 holding 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 firm 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, TCBI’s 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 “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “plans,” “targets,” “intends” “could,” “would,” “anticipates,” “potential,” “confident,” “optimistic” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, trends, guidance, expectations and future plans.
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. Numerous risks and other factors, many of which are beyond management’s control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. While there can be no assurance that any list of risks is complete, important risks and other factors that could cause actual results to differ materially from those contemplated by forward-looking statements include, but are not limited to: economic or business conditions in Texas, the United States or globally that impact TCBI or its customers; negative credit quality developments arising from the foregoing or other factors; TCBI’s ability to effectively manage its liquidity and maintain adequate regulatory capital to support its businesses; TCBI’s ability to pursue and execute upon growth plans, whether as a function of capital, liquidity or other limitations; TCBI’s ability to successfully execute its business strategy, including developing and executing new lines of business and new products and services; the extensive regulations to which TCBI is subject and its ability to comply with applicable governmental regulations, including legislative and regulatory changes; TCBI’s ability to effectively manage information technology systems, including third party vendors, cyber or data privacy incidents or other failures, disruptions or security breaches; elevated or further changes in interest rates, including the impact of interest rates on TCBI’s securities portfolio and funding costs, as well as related balance sheet implications stemming from the fair value of our assets and liabilities; the effectiveness of TCBI’s risk management processes strategies and monitoring; fluctuations in commercial and residential real estate values, especially as they relate to the value of collateral supporting TCBI’s loans; the failure to identify, attract and retain key personnel and other employees; increased or expanded competition from banks and other financial service providers in TCBI’s markets; adverse developments in the banking industry and the potential impact of such developments on customer confidence, liquidity and regulatory responses to these developments, including in the context of regulatory examinations and related findings and actions; negative press and social media attention with respect to the banking industry or TCBI, in particular; claims, litigation or regulatory investigations and actions that TCBI may become subject to; legislative and regulatory changes; severe weather, natural disasters, climate change, acts of war, terrorism, global conflict (including those already reported by the media, as well as others that may arise), or other external events, as well as related legislative and regulatory initiatives; and the risks and factors more fully described in TCBI’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents and filings with the SEC. 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) | |||||||||||||||
| 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | |||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
| Interest income | $ | 417,072 | $ | 425,769 | $ | 401,916 | $ | 385,166 | $ | 371,292 | |||||
| Interest expense | 202,355 | 193,698 | 169,926 | 149,821 | 123,687 | ||||||||||
| Net interest income | 214,717 | 232,071 | 231,990 | 235,345 | 247,605 | ||||||||||
| Provision for credit losses | 19,000 | 18,000 | 7,000 | 28,000 | 34,000 | ||||||||||
| Net interest income after provision for credit losses | 195,717 | 214,071 | 224,990 | 207,345 | 213,605 | ||||||||||
| Non-interest income | 31,133 | 46,872 | 46,011 | 37,403 | 277,667 | ||||||||||
| Non-interest expense | 201,385 | 179,891 | 181,644 | 194,027 | 213,090 | ||||||||||
| Income before income taxes | 25,465 | 81,052 | 89,357 | 50,721 | 278,182 | ||||||||||
| Income tax expense | 5,315 | 19,373 | 20,706 | 12,060 | 60,931 | ||||||||||
| Net income | 20,150 | 61,679 | 68,651 | 38,661 | 217,251 | ||||||||||
| Preferred stock dividends | 4,312 | 4,313 | 4,312 | 4,313 | 4,312 | ||||||||||
| Net income available to common stockholders | $ | 15,838 | $ | 57,366 | $ | 64,339 | $ | 34,348 | $ | 212,939 | |||||
| Diluted earnings per common share | $ | 0.33 | $ | 1.18 | $ | 1.33 | $ | 0.70 | $ | 4.23 | |||||
| Diluted common shares | 48,097,517 | 48,528,698 | 48,421,276 | 48,880,725 | 50,282,663 | ||||||||||
| CONSOLIDATED BALANCE SHEET DATA | |||||||||||||||
| Total assets | $ | 28,356,266 | $ | 29,628,249 | $ | 28,976,544 | $ | 28,596,653 | $ | 28,414,642 | |||||
| Loans held for investment | 16,362,230 | 16,183,882 | 16,227,203 | 16,014,497 | 15,197,307 | ||||||||||
| Loans held for investment, mortgage finance | 3,978,328 | 4,429,489 | 5,098,812 | 4,060,570 | 4,090,033 | ||||||||||
| Loans held for sale | 44,105 | 155,073 | 29,097 | 27,608 | 36,357 | ||||||||||
| Interest bearing cash and cash equivalents | 3,042,357 | 3,975,860 | 2,587,131 | 3,385,494 | 4,778,623 | ||||||||||
| Investment securities | 4,143,194 | 4,069,717 | 4,226,653 | 4,345,969 | 3,585,114 | ||||||||||
| Non-interest bearing deposits | 7,328,276 | 9,352,883 | 9,429,352 | 9,500,583 | 9,618,081 | ||||||||||
| Total deposits | 22,371,839 | 23,878,978 | 23,318,240 | 22,179,697 | 22,856,880 | ||||||||||
| Short-term borrowings | 1,500,000 | 1,400,000 | 1,350,000 | 2,100,000 | 1,201,142 | ||||||||||
| Long-term debt | 859,147 | 858,471 | 857,795 | 932,119 | 931,442 | ||||||||||
| Stockholders’ equity | 3,199,142 | 3,077,700 | 3,081,927 | 3,079,974 | 3,055,351 | ||||||||||
| End of period shares outstanding | 47,237,912 | 48,015,003 | 47,992,521 | 47,851,862 | 48,783,763 | ||||||||||
| Book value per share | $ | 61.37 | $ | 57.85 | $ | 57.97 | $ | 58.10 | $ | 56.48 | |||||
| Tangible book value per share(1) | $ | 61.34 | $ | 57.82 | $ | 57.93 | $ | 58.06 | $ | 56.45 | |||||
| SELECTED FINANCIAL RATIOS | |||||||||||||||
| Net interest margin | 2.93 | % | 3.13 | % | 3.29 | % | 3.33 | % | 3.26 | % | |||||
| Return on average assets | 0.27 | % | 0.81 | % | 0.95 | % | 0.53 | % | 2.80 | % | |||||
| Return on average common equity | 2.25 | % | 8.08 | % | 9.17 | % | 5.06 | % | 30.66 | % | |||||
| Non-interest income to average earning assets | 0.43 | % | 0.64 | % | 0.66 | % | 0.54 | % | 3.70 | % | |||||
| Efficiency ratio(2) | 81.9 | % | 64.5 | % | 65.3 | % | 71.1 | % | 40.6 | % | |||||
| Non-interest expense to average earning assets | 2.79 | % | 2.46 | % | 2.61 | % | 2.78 | % | 2.84 | % | |||||
| Common equity to total assets | 10.2 | % | 9.4 | % | 9.6 | % | 9.7 | % | 9.7 | % | |||||
| Tangible common equity to total tangible assets(3) | 10.2 | % | 9.4 | % | 9.6 | % | 9.7 | % | 9.7 | % | |||||
| Common Equity Tier 1 | 12.6 | % | 12.7 | % | 12.2 | % | 12.4 | % | 13.0 | % | |||||
| Tier 1 capital | 14.2 | % | 14.3 | % | 13.7 | % | 14.0 | % | 14.7 | % | |||||
| Total capital | 17.1 | % | 17.1 | % | 16.4 | % | 16.9 | % | 17.7 | % | |||||
| Leverage | 12.2 | % | 12.1 | % | 12.4 | % | 12.0 | % | 11.5 | % | |||||
(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) | ||||||||
| December 31, 2023 | December 31, 2022 | % Change | ||||||
| Assets | ||||||||
| Cash and due from banks | $ | 200,493 | $ | 233,637 | (14)% | |||
| Interest bearing cash and cash equivalents | 3,042,357 | 4,778,623 | (36)% | |||||
| Available-for-sale debt securities | 3,225,892 | 2,615,644 | 23 | % | ||||
| Held-to-maturity debt securities | 865,477 | 935,514 | (7)% | |||||
| Equity securities | 51,825 | 33,956 | 53 | % | ||||
| Investment securities | 4,143,194 | 3,585,114 | 16 | % | ||||
| Loans held for sale | 44,105 | 36,357 | 21 | % | ||||
| Loans held for investment, mortgage finance | 3,978,328 | 4,090,033 | (3)% | |||||
| Loans held for investment | 16,362,230 | 15,197,307 | 8 | % | ||||
| Less: Allowance for credit losses on loans | 249,973 | 253,469 | (1)% | |||||
| Loans held for investment, net | 20,090,585 | 19,033,871 | 6 | % | ||||
| Premises and equipment, net | 32,366 | 26,382 | 23 | % | ||||
| Accrued interest receivable and other assets | 801,670 | 719,162 | 11 | % | ||||
| Goodwill and intangibles, net | 1,496 | 1,496 | — | % | ||||
| Total assets | $ | 28,356,266 | $ | 28,414,642 | — | % | ||
| Liabilities and Stockholders’ Equity | ||||||||
| Liabilities: | ||||||||
| Non-interest bearing deposits | $ | 7,328,276 | $ | 9,618,081 | (24)% | |||
| Interest bearing deposits | 15,043,563 | 13,238,799 | 14 | % | ||||
| Total deposits | 22,371,839 | 22,856,880 | (2)% | |||||
| Accrued interest payable | 33,234 | 24,000 | 38 | % | ||||
| Other liabilities | 392,904 | 345,827 | 14 | % | ||||
| Short-term borrowings | 1,500,000 | 1,201,142 | 25 | % | ||||
| Long-term debt | 859,147 | 931,442 | (8)% | |||||
| Total liabilities | 25,157,124 | 25,359,291 | (1)% | |||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $.01 par value, $1,000 liquidation value: | ||||||||
| Authorized shares – 10,000,000 | ||||||||
| Issued shares – 300,000 shares issued at December 31, 2023 and 2022 | 300,000 | 300,000 | — | % | ||||
| Common stock, $.01 par value: | ||||||||
| Authorized shares – 100,000,000 | ||||||||
| Issued shares – 51,142,979 and 50,867,298 at December 31, 2023 and 2022, respectively | 511 | 509 | — | % | ||||
| Additional paid-in capital | 1,045,576 | 1,025,593 | 2 | % | ||||
| Retained earnings | 2,435,393 | 2,263,502 | 8 | % | ||||
| Treasury stock – 3,905,067 and 2,083,535 shares at cost at December 31, 2023 and 2022, respectively | (220,334 | ) | (115,310 | ) | 91 | % | ||
| Accumulated other comprehensive loss, net of taxes | (362,004 | ) | (418,943 | ) | (14)% | |||
| Total stockholders’ equity | 3,199,142 | 3,055,351 | 5 | % | ||||
| Total liabilities and stockholders’ equity | $ | 28,356,266 | $ | 28,414,642 | — | % | ||
| TEXAS CAPITAL BANCSHARES, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||
| (dollars in thousands except per share data) | ||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||
| 2023 | 2022 | 2023 | 2022 | |||||
| Interest income | ||||||||
| Interest and fees on loans | $ | 325,210 | $ | 295,372 | $ | 1,300,653 | $ | 983,794 |
| Investment securities | 28,454 | 16,210 | 108,294 | 63,179 | ||||
| Interest bearing cash and cash equivalents | 63,408 | 59,710 | 220,976 | 97,271 | ||||
| Total interest income | 417,072 | 371,292 | 1,629,923 | 1,144,244 | ||||
| Interest expense | ||||||||
| Deposits | 170,173 | 96,150 | 587,775 | 190,663 | ||||
| Short-term borrowings | 18,069 | 13,449 | 70,642 | 29,077 | ||||
| Long-term debt | 14,113 | 14,088 | 57,383 | 48,739 | ||||
| Total interest expense | 202,355 | 123,687 | 715,800 | 268,479 | ||||
| Net interest income | 214,717 | 247,605 | 914,123 | 875,765 | ||||
| Provision for credit losses | 19,000 | 34,000 | 72,000 | 66,000 | ||||
| Net interest income after provision for credit losses | 195,717 | 213,605 | 842,123 | 809,765 | ||||
| Non-interest income | ||||||||
| Service charges on deposit accounts | 5,397 | 5,252 | 20,874 | 23,266 | ||||
| Wealth management and trust fee income | 3,302 | 3,442 | 13,955 | 15,036 | ||||
| Brokered loan fees | 2,076 | 2,655 | 8,918 | 14,159 | ||||
| Investment banking and trading income | 10,725 | 11,937 | 86,182 | 35,054 | ||||
| Gain on disposal of subsidiary | — | 248,526 | — | 248,526 | ||||
| Other | 9,633 | 5,855 | 31,490 | 13,481 | ||||
| Total non-interest income | 31,133 | 277,667 | 161,419 | 349,522 | ||||
| Non-interest expense | ||||||||
| Salaries and benefits | 107,970 | 102,925 | 459,700 | 434,906 | ||||
| Occupancy expense | 9,483 | 17,030 | 38,494 | 44,222 | ||||
| Marketing | 5,686 | 10,623 | 25,854 | 32,388 | ||||
| Legal and professional | 17,127 | 37,493 | 64,924 | 75,858 | ||||
| Communications and technology | 23,607 | 20,434 | 81,262 | 69,253 | ||||
| Federal Deposit Insurance Corporation insurance assessment | 25,143 | 3,092 | 36,775 | 14,344 | ||||
| Other | 12,369 | 21,493 | 49,938 | 56,561 | ||||
| Total non-interest expense | 201,385 | 213,090 | 756,947 | 727,532 | ||||
| Income before income taxes | 25,465 | 278,182 | 246,595 | 431,755 | ||||
| Income tax expense | 5,315 | 60,931 | 57,454 | 99,277 | ||||
| Net income | 20,150 | 217,251 | 189,141 | 332,478 | ||||
| Preferred stock dividends | 4,312 | 4,312 | 17,250 | 17,250 | ||||
| Net income available to common stockholders | $ | 15,838 | $ | 212,939 | $ | 171,891 | $ | 315,228 |
| Basic earnings per common share | $ | 0.33 | $ | 4.28 | $ | 3.58 | $ | 6.25 |
| Diluted earnings per common share | $ | 0.33 | $ | 4.23 | $ | 3.54 | $ | 6.18 |
| TEXAS CAPITAL BANCSHARES, INC. | |||||||||||||||
| SUMMARY OF CREDIT LOSS EXPERIENCE | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | |||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||
| Allowance for credit losses on loans: | |||||||||||||||
| Beginning balance | $ | 244,902 | $ | 237,343 | $ | 260,928 | $ | 253,469 | $ | 234,613 | |||||
| Loans charged-off: | |||||||||||||||
| Commercial | 8,356 | 13,246 | 8,852 | 20,732 | 17,106 | ||||||||||
| Commercial real estate | 5,500 | — | — | — | — | ||||||||||
| Consumer | — | 41 | — | — | — | ||||||||||
| Total charge-offs | 13,856 | 13,287 | 8,852 | 20,732 | 17,106 | ||||||||||
| Recoveries: | |||||||||||||||
| Commercial | 15 | 4,346 | 611 | 819 | 2,105 | ||||||||||
| Commercial real estate | 4 | — | — | — | — | ||||||||||
| Consumer | — | — | 2 | 3 | 2 | ||||||||||
| Total recoveries | 19 | 4,346 | 613 | 822 | 2,107 | ||||||||||
| Net charge-offs | 13,837 | 8,941 | 8,239 | 19,910 | 14,999 | ||||||||||
| Provision for credit losses on loans | 18,908 | 16,500 | (15,346 | ) | 27,369 | 33,855 | |||||||||
| Ending balance | $ | 249,973 | $ | 244,902 | $ | 237,343 | $ | 260,928 | $ | 253,469 | |||||
| Allowance for off-balance sheet credit losses: | |||||||||||||||
| Beginning balance | $ | 46,270 | $ | 44,770 | $ | 22,424 | $ | 21,793 | $ | 21,648 | |||||
| Provision for off-balance sheet credit losses | 92 | 1,500 | 22,346 | 631 | 145 | ||||||||||
| Ending balance | $ | 46,362 | $ | 46,270 | $ | 44,770 | $ | 22,424 | $ | 21,793 | |||||
| Total allowance for credit losses | $ | 296,335 | $ | 291,172 | $ | 282,113 | $ | 283,352 | $ | 275,262 | |||||
| Total provision for credit losses | $ | 19,000 | $ | 18,000 | $ | 7,000 | $ | 28,000 | $ | 34,000 | |||||
| Allowance for credit losses on loans to total loans held for investment | 1.23 | % | 1.19 | % | 1.11 | % | 1.30 | % | 1.31 | % | |||||
| Allowance for credit losses on loans to average total loans held for investment | 1.24 | % | 1.17 | % | 1.15 | % | 1.38 | % | 1.31 | % | |||||
| Net charge-offs to average total loans held for investment(1) | 0.27 | % | 0.17 | % | 0.16 | % | 0.43 | % | 0.31 | % | |||||
| Net charge-offs to average total loans held for investment for last 12 months(1) | 0.25 | % | 0.26 | % | 0.23 | % | 0.19 | % | 0.09 | % | |||||
| Total provision for credit losses to average total loans held for investment(1) | 0.37 | % | 0.34 | % | 0.14 | % | 0.60 | % | 0.70 | % | |||||
| Total allowance for credit losses to total loans held for investment | 1.46 | % | 1.41 | % | 1.32 | % | 1.41 | % | 1.43 | % | |||||
(1) Interim period ratios are annualized.
| TEXAS CAPITAL BANCSHARES, INC. | |||||||||||||||
| SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | |||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||
| Non-accrual loans held for investment | $ | 81,398 | $ | 63,129 | $ | 81,039 | $ | 93,951 | $ | 48,338 | |||||
| Non-accrual loans held for sale | — | — | — | — | — | ||||||||||
| Other real estate owned | — | — | — | — | — | ||||||||||
| Total non-performing assets | $ | 81,398 | $ | 63,129 | $ | 81,039 | $ | 93,951 | $ | 48,338 | |||||
| Non-accrual loans held for investment to total loans held for investment | 0.40 | % | 0.31 | % | 0.38 | % | 0.47 | % | 0.25 | % | |||||
| Total non-performing assets to total assets | 0.29 | % | 0.21 | % | 0.28 | % | 0.33 | % | 0.17 | % | |||||
| Allowance for credit losses on loans to non-accrual loans held for investment | 3.1x | 3.9x | 2.9x | 2.8x | 5.2x | ||||||||||
| Total allowance for credit losses to non-accrual loans held for investment | 3.6x | 4.6x | 3.5x | 3.0x | 5.7x | ||||||||||
| Loans held for investment past due 90 days and still accruing | $ | 19,523 | $ | 4,602 | $ | 64 | $ | 3,098 | $ | 131 | |||||
| Loans held for investment past due 90 days to total loans held for investment | 0.10 | % | 0.02 | % | — | % | 0.02 | % | — | % | |||||
| Loans held for sale past due 90 days and still accruing | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
| TEXAS CAPITAL BANCSHARES, INC. | ||||||||||
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||
| (dollars in thousands) | ||||||||||
| 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | ||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | ||||||
| Interest income | ||||||||||
| Interest and fees on loans | $ | 325,210 | $ | 345,138 | $ | 332,867 | $ | 297,438 | $ | 295,372 |
| Investment securities | 28,454 | 27,070 | 27,478 | 25,292 | 16,210 | |||||
| Interest bearing deposits in other banks | 63,408 | 53,561 | 41,571 | 62,436 | 59,710 | |||||
| Total interest income | 417,072 | 425,769 | 401,916 | 385,166 | 371,292 | |||||
| Interest expense | ||||||||||
| Deposits | 170,173 | 160,117 | 137,391 | 120,094 | 96,150 | |||||
| Short-term borrowings | 18,069 | 19,576 | 18,253 | 14,744 | 13,449 | |||||
| Long-term debt | 14,113 | 14,005 | 14,282 | 14,983 | 14,088 | |||||
| Total interest expense | 202,355 | 193,698 | 169,926 | 149,821 | 123,687 | |||||
| Net interest income | 214,717 | 232,071 | 231,990 | 235,345 | 247,605 | |||||
| Provision for credit losses | 19,000 | 18,000 | 7,000 | 28,000 | 34,000 | |||||
| Net interest income after provision for credit losses | 195,717 | 214,071 | 224,990 | 207,345 | 213,605 | |||||
| Non-interest income | ||||||||||
| Service charges on deposit accounts | 5,397 | 5,297 | 5,158 | 5,022 | 5,252 | |||||
| Wealth management and trust fee income | 3,302 | 3,509 | 3,715 | 3,429 | 3,442 | |||||
| Brokered loan fees | 2,076 | 2,532 | 2,415 | 1,895 | 2,655 | |||||
| Investment banking and trading income | 10,725 | 29,191 | 27,498 | 18,768 | 11,937 | |||||
| Gain on disposal of subsidiary | — | — | — | — | 248,526 | |||||
| Other | 9,633 | 6,343 | 7,225 | 8,289 | 5,855 | |||||
| Total non-interest income | 31,133 | 46,872 | 46,011 | 37,403 | 277,667 | |||||
| Non-interest expense | ||||||||||
| Salaries and benefits | 107,970 | 110,010 | 113,050 | 128,670 | 102,925 | |||||
| Occupancy expense | 9,483 | 9,910 | 9,482 | 9,619 | 17,030 | |||||
| Marketing | 5,686 | 4,757 | 6,367 | 9,044 | 10,623 | |||||
| Legal and professional | 17,127 | 17,614 | 15,669 | 14,514 | 37,493 | |||||
| Communications and technology | 23,607 | 19,607 | 20,525 | 17,523 | 20,434 | |||||
| Federal Deposit Insurance Corporation insurance assessment | 25,143 | 5,769 | 3,693 | 2,170 | 3,092 | |||||
| Other | 12,369 | 12,224 | 12,858 | 12,487 | 21,493 | |||||
| Total non-interest expense | 201,385 | 179,891 | 181,644 | 194,027 | 213,090 | |||||
| Income before income taxes | 25,465 | 81,052 | 89,357 | 50,721 | 278,182 | |||||
| Income tax expense | 5,315 | 19,373 | 20,706 | 12,060 | 60,931 | |||||
| Net income | 20,150 | 61,679 | 68,651 | 38,661 | 217,251 | |||||
| Preferred stock dividends | 4,312 | 4,313 | 4,312 | 4,313 | 4,312 | |||||
| Net income available to common shareholders | $ | 15,838 | $ | 57,366 | $ | 64,339 | $ | 34,348 | $ | 212,939 |
| TEXAS CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||||||||||||
| TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1) | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||
| 4th Quarter 2023 | 3rd Quarter 2023 | 2nd Quarter 2023 | 1st Quarter 2023 | 4th Quarter 2022 | ||||||||||||||||||||||||||||||
| 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(2) | $ | 4,078,975 | $ | 28,454 | 2.48 | % | $ | 4,204,749 | $ | 27,070 | 2.33 | % | $ | 4,306,881 | $ | 27,478 | 2.36 | % | $ | 4,060,456 | $ | 25,292 | 2.31 | % | $ | 3,385,372 | $ | 16,210 | 1.70 | % | ||||
| Interest bearing cash and cash equivalents | 4,637,374 | 63,408 | 5.42 | % | 3,965,045 | 53,561 | 5.36 | % | 3,286,091 | 41,571 | 5.07 | % | 5,541,341 | 62,436 | 4.57 | % | 6,158,769 | 59,710 | 3.85 | % | ||||||||||||||
| Loans held for sale | 29,071 | 672 | 9.17 | % | 31,878 | 647 | 8.06 | % | 28,414 | 599 | 8.46 | % | 43,472 | 938 | 8.75 | % | 1,053,157 | 12,064 | 4.54 | % | ||||||||||||||
| Loans held for investment, mortgage finance | 3,946,280 | 11,168 | 1.12 | % | 4,697,702 | 31,217 | 2.64 | % | 4,376,235 | 36,198 | 3.32 | % | 3,286,804 | 28,528 | 3.52 | % | 4,279,367 | 43,708 | 4.05 | % | ||||||||||||||
| Loans held for investment(3) | 16,164,233 | 313,438 | 7.69 | % | 16,317,324 | 313,346 | 7.62 | % | 16,217,314 | 296,183 | 7.33 | % | 15,598,854 | 268,131 | 6.97 | % | 15,105,083 | 239,746 | 6.30 | % | ||||||||||||||
| Less: Allowance for credit losses on loans | 244,287 | — | — | 238,883 | — | — | 261,027 | — | — | 252,727 | — | — | 233,246 | — | — | |||||||||||||||||||
| Loans held for investment, net | 19,866,226 | 324,606 | 6.48 | % | 20,776,143 | 344,563 | 6.58 | % | 20,332,522 | 332,381 | 6.56 | % | 18,632,931 | 296,659 | 6.46 | % | 19,151,204 | 283,454 | 5.87 | % | ||||||||||||||
| Total earning assets | 28,611,646 | 417,140 | 5.69 | % | 28,977,815 | 425,841 | 5.75 | % | 27,953,908 | 402,029 | 5.69 | % | 28,278,200 | 385,325 | 5.45 | % | 29,748,502 | 371,438 | 4.89 | % | ||||||||||||||
| Cash and other assets | 1,120,354 | 1,106,031 | 1,049,145 | 1,041,745 | 989,900 | |||||||||||||||||||||||||||||
| Total assets | $ | 29,732,000 | $ | 30,083,846 | $ | 29,003,053 | $ | 29,319,945 | $ | 30,738,402 | ||||||||||||||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||||
| Transaction deposits | $ | 1,972,324 | $ | 15,613 | 3.14 | % | $ | 1,755,451 | $ | 13,627 | 3.08 | % | $ | 1,345,742 | $ | 9,468 | 2.82 | % | $ | 776,500 | $ | 3,853 | 2.01 | % | $ | 1,105,466 | $ | 4,977 | 1.79 | % | ||||
| Savings deposits | 11,043,155 | 132,801 | 4.77 | % | 10,858,306 | 127,323 | 4.65 | % | 10,590,558 | 114,275 | 4.33 | % | 11,195,402 | 105,707 | 3.83 | % | 10,563,049 | 80,801 | 3.03 | % | ||||||||||||||
| Time deposits | 1,716,812 | 21,759 | 5.03 | % | 1,610,235 | 19,167 | 4.72 | % | 1,531,922 | 13,648 | 3.57 | % | 1,430,657 | 10,534 | 2.99 | % | 1,625,857 | 10,372 | 2.53 | % | ||||||||||||||
| Total interest bearing deposits | 14,732,291 | 170,173 | 4.58 | % | 14,223,992 | 160,117 | 4.47 | % | 13,468,222 | 137,391 | 4.09 | % | 13,402,559 | 120,094 | 3.63 | % | 13,294,372 | 96,150 | 2.87 | % | ||||||||||||||
| Short-term borrowings | 1,257,609 | 18,069 | 5.70 | % | 1,393,478 | 19,576 | 5.57 | % | 1,397,253 | 18,253 | 5.24 | % | 1,242,881 | 14,744 | 4.81 | % | 1,387,660 | 13,449 | 3.84 | % | ||||||||||||||
| Long-term debt | 858,858 | 14,113 | 6.52 | % | 858,167 | 14,005 | 6.47 | % | 883,871 | 14,282 | 6.48 | % | 931,796 | 14,983 | 6.52 | % | 931,107 | 14,088 | 6.00 | % | ||||||||||||||
| Total interest bearing liabilities | 16,848,758 | 202,355 | 4.76 | % | 16,475,637 | 193,698 | 4.66 | % | 15,749,346 | 169,926 | 4.33 | % | 15,577,236 | 149,821 | 3.90 | % | 15,613,139 | 123,687 | 3.14 | % | ||||||||||||||
| Non-interest bearing deposits | 9,247,491 | 10,016,579 | 9,749,105 | 10,253,731 | 11,642,969 | |||||||||||||||||||||||||||||
| Other liabilities | 541,162 | 474,869 | 389,155 | 436,621 | 426,543 | |||||||||||||||||||||||||||||
| Stockholders’ equity | 3,094,589 | 3,116,761 | 3,115,447 | 3,052,357 | 3,055,751 | |||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 29,732,000 | $ | 30,083,846 | $ | 29,003,053 | $ | 29,319,945 | $ | 30,738,402 | ||||||||||||||||||||||||
| Net interest income | $ | 214,785 | $ | 232,143 | $ | 232,103 | $ | 235,504 | $ | 247,751 | ||||||||||||||||||||||||
| Net interest margin | 2.93 | % | 3.13 | % | 3.29 | % | 3.33 | % | 3.26 | % | ||||||||||||||||||||||||
(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.
