DALLAS, July 17, 2019 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the second quarter of 2019.

“We’re pleased with our solid operating results for the first half of 2019," said Keith Cargill, CEO. “We continue to make progress in delivering on our key strategic initiatives to diversify and improve our funding mix while maintaining focus on delivering a premier client experience. Taking great care of our clients and being diligent about developing new clients who desire a broad relationship is positioning us for long-term financial success."

• Loans held for investment ("LHI"), excluding mortgage finance loans, decreased 1% on a linked quarter basis (decreasing 1% on an average basis) and increased 2% from the second quarter of 2018 (increasing 6% on an average basis).
• Total mortgage finance loans, including mortgage correspondent aggregation ("MCA") loans held for sale ("LHS"), increased 3% on a linked quarter basis (increasing 35% on an average basis) and increased 18% from the second quarter of 2018 (increasing 49% on an average basis).
• Demand deposits increased 14% and total deposits increased 11% on a linked quarter basis (increased 13% and 7%, respectively, on an average basis), and remained flat and increased 13%, respectively, from the second quarter of 2018 (decreased 1% and increased 15%, respectively, on an average basis).
• Net income decreased 6% on a linked quarter basis and increased 9% from the second quarter of 2018.
• EPS decreased 6% on a linked quarter basis and increased 9% from the second quarter of 2018.

FINANCIAL SUMMARY
(Dollars and shares in thousands)
	Q2 2019				Q2 2018				% Change
QUARTERLY OPERATING RESULTS
Net income	$	77,969			$	71,436			9		%
Net income available to common stockholders	$	75,532			$	68,999			9		%
Diluted EPS	$	1.50			$	1.38			9		%
Diluted shares	50,384				50,096				1		%
ROA	1.05		%		1.16		%
ROE	12.20		%		12.72		%
BALANCE SHEET
LHS	$	1,057,586			$	1,276,768			(17	)	%
LHI, mortgage finance	7,415,363				5,923,058				25		%
LHI	16,924,535				16,536,721				2		%
Total LHI	24,339,898				22,459,779				8		%
Total loans	25,397,484				23,736,547				7		%
Total assets	29,970,384				27,781,910				8		%
Demand deposits	7,685,340				7,648,125				—		%
Total deposits	22,999,077				20,334,871				13		%
Stockholders’ equity	2,668,452				2,343,530				14		%

DETAILED FINANCIALS
For the second quarter of 2019, net income was $78.0 million and net income available to common stockholders was $75.5 million, compared to net income of $71.4 million and net income available to common stockholders of $69.0 million for the same period in 2018. On a fully diluted basis, earnings per common share were $1.50 for the quarter ended June 30, 2019 compared to $1.38 for the same period of 2018. The increases reflect a $6.5 million increase in net income primarily driven by increases in net interest income and non-interest income for the second quarter of 2019 compared to the second quarter of 2018, partially offset by an increase in non-interest expense.

Return on common equity ("ROE") was 12.20 percent and return on average assets ("ROA") was 1.05 percent for the second quarter of 2019, compared to 13.58 percent and 1.26 percent, respectively, for the first quarter of 2019 and 12.72 percent and 1.16 percent, respectively, for the second quarter of 2018. The linked quarter decreases in ROE and ROA for the second quarter of 2019 resulted primarily from an increase in the provision for credit losses and a decrease in non-interest income, partially offset by an increase in net interest income.

Net interest income was $243.6 million for the second quarter of 2019, compared to $235.6 million for the first quarter of 2019 and $231.7 million for the second quarter of 2018. The linked quarter increase in net interest income was due primarily to growth in average mortgage finance loans and an increase in day count for the second quarter of 2019 compared to the first quarter of 2019, partially offset by an increase in average interest-bearing liabilities. The year-over-year increase in net interest income was due primarily to growth in average total loans, partially offset by increases in average interest-bearing liabilities and funding costs. Net interest margin for the second quarter of 2019 was 3.41 percent, a decrease of 32 basis points from the first quarter of 2019 and a decrease of 52 basis points from the second quarter of 2018. LHI, excluding mortgage finance loans, yields decreased 9 basis points from the first quarter of 2019, and increased 26 basis points compared to the second quarter of 2018. Mortgage finance loans, excluding MCA loans, yields for the second quarter of 2019 decreased 19 basis points compared to the first quarter of 2019 and decreased 23 basis points compared to the second quarter of 2018. Total cost of deposits for the second quarter of 2019 decreased 4 basis points to 1.29 percent compared to 1.33 percent for the first quarter of 2019, and increased 48 basis points from 0.81 percent for the second quarter of 2018.

Average LHI, excluding mortgage finance loans, for the second quarter of 2019 were $16.8 billion, a decrease of $84.7 million, or 1 percent, from the first quarter of 2019 and an increase of $898.4 million, or 6 percent, from the second quarter of 2018. Average total mortgage finance loans, including MCA loans, for the second quarter of 2019 were $9.5 billion, an increase of $2.5 billion, or 35 percent, from the first quarter of 2019 and an increase of $3.1 billion, or 49 percent, from the second quarter of 2018. The linked quarter and year-over-year increases were due to increases in volumes related to lower long-term interest rates.

Average total deposits for the second quarter of 2019 increased $1.5 billion, or 7 percent, from the first quarter of 2019 and increased $2.9 billion, or 15 percent, from the second quarter of 2018. Average demand deposits for the second quarter of 2019 increased $882.1 million, or 13 percent, to $7.9 billion from $7.0 billion for the first quarter of 2019, and decreased $88.3 million, or 1 percent, from the second quarter of 2018.

We recorded a $27.0 million provision for credit losses for the second quarter of 2019 compared to $20.0 million for the first quarter of 2019 and $27.0 million for the second quarter of 2018. The provision for the second quarter of 2019 was driven by the consistent application of our methodology. The linked quarter increase resulted from an increase in criticized loans and charge-offs, primarily related to energy. The total allowance for credit losses at June 30, 2019 was 0.93 percent of LHI, compared to 0.93 percent at March 31, 2019 and 0.84 percent at June 30, 2018. In management’s opinion, the allowance is appropriate and is derived from consistent application of the methodology for establishing reserves for the loan portfolio.

Non-performing assets ("NPAs") decreased in the second quarter of 2019 compared to the first quarter of 2019 and increased compared to the second quarter of 2018. The ratio of NPAs to total LHI plus other real estate owned ("OREO") for the second quarter of 2019 was 0.47 percent, compared to 0.57 percent for the first quarter of 2019 and 0.41 percent for the second quarter of 2018. Net charge-offs for the second quarter of 2019 were $20.0 million compared to $4.6 million for the first quarter of 2019 and $38.0 million for the second quarter of 2018. For the second quarter of 2019, net charge-offs were 0.34 percent of average total LHI, compared to 0.09 percent for the first quarter of 2019 and 0.73 percent for the same period in 2018.

Non-interest income decreased $5.7 million, or 19 percent, during the second quarter of 2019 compared to the first quarter of 2019, and increased $7.1 million, or 41 percent, compared to the second quarter of 2018. The linked quarter decrease is primarily related to decreases in the net gain on sale of loans held for sale and other non-interest income, partially offset by an increase in brokered loan fees. The year-over-year increase is primarily related to increases in brokered loan fees and other non-interest income, partially offset by a decrease in servicing income attributable to a decrease in mortgage servicing rights associated with our MCA program.

Non-interest expense for the second quarter of 2019 increased $1.2 million, or 1 percent, compared to the first quarter of 2019, and increased $9.4 million, or 7 percent, compared to the second quarter of 2018. The linked quarter increase in non-interest expense was primarily related to increases in marketing and communications and technology expenses, partially offset by decreases in salaries and employee benefits expense, FDIC insurance assessment and other non-interest expense. The year-over-year increase was primarily due to increases in salaries and employee benefits, marketing, communications and technology expenses and servicing related expenses, offset by decreases in legal and professional expenses, FDIC insurance assessment and other non-interest expense.

Stockholders’ equity increased by 14 percent from $2.3 billion at June 30, 2018 to $2.7 billion at June 30, 2019, primarily due to the retention of net income. Texas Capital Bank is well capitalized under regulatory guidelines. At June 30, 2019, our ratio of tangible common equity to total tangible assets was 8.3% percent.

ABOUT TEXAS CAPITAL BANCSHARES, INC.
Texas Capital Bancshares, Inc. (NASDAQ®: TCBI), a member of the Russell 1000® Index and the S&P MidCap 400®, is the parent company of Texas Capital Bank, a commercial bank that delivers highly personalized financial services to businesses and entrepreneurs. Headquartered in Dallas, the bank has full-service locations in Austin, Dallas, Fort Worth, Houston and San Antonio.

This news release may be deemed to include forward-looking statements which are based on management’s current estimates or expectations of future events or future results. These statements are not historical in nature and can generally be identified by such words as “believe,” “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “intend” and similar expressions. 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 risks and uncertainties include, but are not limited to, the credit quality of our loan portfolio, general economic conditions in the United States and in our markets, including the continued impact on our customers from volatility in oil and gas prices, expectations regarding rates of default and loan losses, volatility in the mortgage industry, our business strategies and our expectations about future financial performance, future growth and earnings, the appropriateness of our allowance for loan losses and provision for credit losses, the impact of changing regulatory requirements and legislative changes on our business, increased competition, interest rate risk, new lines of business, new product or service offerings and new technologies. 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 and in other filings we make with the Securities and Exchange Commission. The information contained in this release speaks only as of its date. We are under no obligation, and expressly disclaim such obligation, to update, alter or revise our forward-looking statements, whether as a result of new information, future events, or otherwise.

TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
	2nd Quarter			1st Quarter			4th Quarter			3rd Quarter			2nd Quarter
	2019			2019			2018			2018			2018
CONSOLIDATED STATEMENTS OF INCOME
Interest income	$	346,893		$	325,561		$	321,718		$	301,754		$	286,852
Interest expense	103,340			89,947			81,045			69,579			55,140
Net interest income	243,553			235,614			240,673			232,175			231,712
Provision for credit losses	27,000			20,000			35,000			13,000			27,000
Net interest income after provision for credit losses	216,553			215,614			205,673			219,175			204,712
Non-interest income	24,364			30,014			15,280			25,518			17,279
Non-interest expense	141,561			140,378			129,862			136,143			132,131
Income before income taxes	99,356			105,250			91,091			108,550			89,860
Income tax expense	21,387			22,411			19,200			22,998			18,424
Net income	77,969			82,839			71,891			85,552			71,436
Preferred stock dividends	2,437			2,438			2,437			2,438			2,437
Net income available to common stockholders	$	75,532		$	80,401		$	69,454		$	83,114		$	68,999
Diluted EPS	$	1.50		$	1.60		$	1.38		$	1.65		$	1.38
Diluted shares	50,383,870			50,345,399			50,333,412			50,381,349			50,096,015
CONSOLIDATED BALANCE SHEET DATA
Total assets	$	29,970,384		$	28,383,111		$	28,257,767		$	27,127,107		$	27,781,910
LHI	16,924,535			17,061,590			16,690,550			16,569,538			16,536,721
LHI, mortgage finance	7,415,363			6,299,710			5,877,524			5,477,787			5,923,058
LHS	1,057,586			1,901,637			1,969,474			1,651,930			1,276,768
Liquidity assets(1)	3,480,902			2,154,155			2,865,874			2,615,570			3,288,107
Investment securities	240,851			230,749			120,216			117,389			24,408
Demand deposits	7,685,340			6,743,607			7,317,161			7,031,460			7,648,125
Total deposits	22,999,077			20,650,127			20,606,113			20,385,637			20,334,871
Other borrowings	3,607,234			4,497,892			4,541,174			3,686,818			4,520,849
Subordinated notes	281,948			281,858			281,767			281,677			281,586
Long-term debt	113,406			113,406			113,406			113,406			113,406
Stockholders’ equity	2,668,452			2,581,942			2,500,394			2,426,442			2,343,530
End of period shares outstanding	50,297,552			50,263,611			50,200,710			50,177,260			50,151,064
Book value	$	50.07		$	48.38		$	46.82		$	45.37		$	43.74
Tangible book value(2)	$	49.71		$	48.02		$	46.45		$	45.00		$	43.36
SELECTED FINANCIAL RATIOS
Net interest margin	3.41		%	3.73		%	3.78		%	3.70		%	3.93		%
Return on average assets	1.05		%	1.26		%	1.09		%	1.31		%	1.16		%
Return on average common equity	12.20		%	13.58		%	11.82		%	14.68		%	12.72		%
Non-interest income to average earning assets	0.34		%	0.47		%	0.24		%	0.40		%	0.29		%
Efficiency ratio(3)	52.8		%	52.8		%	50.7		%	52.8		%	53.1		%
Non-interest expense to average earning assets	1.97		%	2.21		%	2.03		%	2.15		%	2.23		%
Tangible common equity to total tangible assets(4)	8.3		%	8.5		%	8.3		%	8.3		%	7.8		%
Common Equity Tier 1	8.7		%	8.6		%	8.6		%	8.6		%	8.3		%
Tier 1 capital	9.6		%	9.6		%	9.5		%	9.6		%	9.3		%
Total capital	11.3		%	11.4		%	11.3		%	11.5		%	11.1		%
Leverage	9.2		%	10.0		%	9.9		%	9.7		%	9.9		%

(1)			Liquidity assets include Federal funds sold and interest-bearing deposits in other banks.
(2)			Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(3)			Non-interest expense divided by the sum of net interest income and non-interest income.
(4)			Stockholders’ equity excluding preferred stock and accumulated other comprehensive income less goodwill and intangibles divided by total assets less accumulated other comprehensive income and goodwill and intangibles.

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
							%
	June 30, 2019			June 30, 2018			Change
Assets
Cash and due from banks	$	163,675		$	174,687		(6	)	%
Interest-bearing deposits	3,446,902			3,249,107			6		%
Federal funds sold and securities purchased under resale agreements	34,000			39,000			(13	)	%
Securities, available-for-sale	240,851			24,408			887		%
LHS ($1,056.5 million and $1,275.5 million at June 30, 2019 and 2018, respectively, at fair value)	1,057,586			1,276,768			(17	)	%
LHI, mortgage finance	7,415,363			5,923,058			25		%
LHI (net of unearned income)	16,924,535			16,536,721			2		%
Less: Allowance for loan losses	214,572			179,096			20		%
LHI, net	24,125,326			22,280,683			8		%
Mortgage servicing rights, net	47,785			82,776			(42	)	%
Premises and equipment, net	28,197			26,175			8		%
Accrued interest receivable and other assets	807,728			609,501			33		%
Goodwill and intangibles, net	18,334			18,805			(3	)	%
Total assets	$	29,970,384		$	27,781,910		8		%
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing	$	7,685,340		$	7,648,125		—		%
Interest bearing	15,313,737			12,686,746			21		%
Total deposits	22,999,077			20,334,871			13		%
Accrued interest payable	23,115			11,268			105		%
Other liabilities	277,152			176,400			57		%
Federal funds purchased and repurchase agreements	507,234			520,849			(3	)	%
Other borrowings	3,100,000			4,000,000			(23	)	%
Subordinated notes, net	281,948			281,586			—		%
Trust preferred subordinated debentures	113,406			113,406			—		%
Total liabilities	27,301,932			25,438,380			7		%
Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - 6,000,000 shares issued at June 30, 2019 and 2018	150,000			150,000			—		%
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 50,297,969 and 50,151,481 at June 30, 2019 and 2018, respectively	503			502			—		%
Additional paid-in capital	972,219			963,732			1		%
Retained earnings	1,537,425			1,228,924			25		%
Treasury stock (shares at cost: 417 at June 30, 2019 and 2018)	(8		)	(8		)	—		%
Accumulated other comprehensive income, net of taxes	8,313			380			N/M
Total stockholders’ equity	2,668,452			2,343,530			14		%
Total liabilities and stockholders’ equity	$	29,970,384		$	27,781,910		8		%

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Interest income
Interest and fees on loans	$	329,842		$	279,447		$	642,545		$	523,311
Investment securities	2,260			193			3,720			399
Federal funds sold and securities purchased under resale agreements	157			745			536			1,790
Interest-bearing deposits in other banks	14,634			6,467			25,653			15,221
Total interest income	346,893			286,852			672,454			540,721
Interest expense
Deposits	72,529			39,607			141,583			71,309
Federal funds purchased	5,202			1,665			8,718			2,634
Other borrowings	20,124			8,484			31,978			14,164
Subordinated notes	4,191			4,191			8,382			8,382
Trust preferred subordinated debentures	1,294			1,193			2,626			2,220
Total interest expense	103,340			55,140			193,287			98,709
Net interest income	243,553			231,712			479,167			442,012
Provision for credit losses	27,000			27,000			47,000			39,000
Net interest income after provision for credit losses	216,553			204,712			432,167			403,012
Non-interest income
Service charges on deposit accounts	2,849			3,005			5,828			6,142
Wealth management and trust fee income	2,129			2,007			4,138			3,931
Brokered loan fees	7,336			5,815			12,402			10,983
Servicing income	3,126			4,967			5,860			10,459
Swap fees	601			1,352			1,632			2,914
Net gain/(loss) on sale of LHS	(5,986		)	(5,230		)	(6,491		)	(7,403		)
Other	14,309			5,363			31,009			10,200
Total non-interest income	24,364			17,279			54,378			37,226
Non-interest expense
Salaries and employee benefits	76,889			72,404			154,712			144,941
Net occupancy expense	7,910			7,356			15,789			14,590
Marketing	14,087			10,236			25,795			18,913
Legal and professional	10,004			11,654			20,034			19,184
Communications and technology	11,022			7,143			20,220			13,776
FDIC insurance assessment	4,138			6,257			9,260			12,360
Servicing related expenses	6,066			4,367			11,448			8,172
Allowance and other carrying costs for OREO	—			176			—			2,331
Other	11,445			12,538			24,681			24,824
Total non-interest expense	141,561			132,131			281,939			259,091
Income before income taxes	99,356			89,860			204,606			181,147
Income tax expense	21,387			18,424			43,798			37,766
Net income	77,969			71,436			160,808			143,381
Preferred stock dividends	2,437			2,437			4,875			4,875
Net income available to common stockholders	$	75,532		$	68,999		$	155,933		$	138,506
Basic earnings per common share	$	1.50		$	1.39		$	3.10		$	2.79
Diluted earnings per common share	$	1.50		$	1.38		$	3.10		$	2.76

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
	2nd Quarter			1st Quarter				4th Quarter			3rd Quarter				2nd Quarter
	2019			2019				2018			2018				2018
Allowance for loan losses:
Beginning balance	$	208,573		$	191,522			$	190,306		$	179,096			$	190,898
Loans charged-off:
Commercial	20,053			4,865				34,419			1,301				38,305
Real estate	177			—				—			—				—
Construction	—			—				—			—				—
Consumer	—			—				—			767				—
Leases	—			—				—			319				—
Total charge-offs	20,230			4,865				34,419			2,387				38,305
Recoveries:
Commercial	201			266				1,399			389				320
Real estate	—			—				26			11				8
Construction	—			—				—			—				—
Consumer	23			10				360			10				9
Leases	—			1				1			12				1
Total recoveries	224			277				1,786			422				338
Net charge-offs	20,006			4,588				32,633			1,965				37,967
Provision for loan losses	26,005			21,639				33,849			13,175				26,165
Ending balance	$	214,572		$	208,573			$	191,522		$	190,306			$	179,096
Allowance for off-balance sheet credit losses:
Beginning balance	$	9,795		$	11,434			$	10,283		$	10,458			$	9,623
Provision for off-balance sheet credit losses	995			(1,639		)		1,151			(175		)		835
Ending balance	$	10,790		$	9,795			$	11,434		$	10,283			$	10,458
Total allowance for credit losses	$	225,362		$	218,368			$	202,956		$	200,589			$	189,554
Total provision for credit losses	$	27,000		$	20,000			$	35,000		$	13,000			$	27,000
Allowance for loan losses to LHI	0.88		%	0.89			%	0.85		%	0.86			%	0.80		%
Allowance for loan losses to average LHI	0.90		%	0.96			%	0.88		%	0.87			%	0.86		%
Net charge-offs to average LHI(1)	0.34		%	0.09			%	0.60		%	0.04			%	0.73		%
Net charge-offs to average LHI for last twelve months(1)	0.27		%	0.36			%	0.37		%	0.22			%	0.28		%
Total provision for credit losses to average LHI(1)	0.45		%	0.37			%	0.64		%	0.24			%	0.52		%
Total allowance for credit losses to LHI	0.93		%	0.93			%	0.90		%	0.91			%	0.84		%

(1)			Interim period ratios are annualized.

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS
(Dollars in thousands)
	2nd Quarter			1st Quarter			4th Quarter			3rd Quarter			2nd Quarter
	2019			2019			2018			2018			2018
Non-performing assets (NPAs):
Non-accrual loans	$	114,084		$	133,690		$	80,375		$	107,532		$	83,295
Other real estate owned (OREO)	—			—			79			79			9,526
Total LHI NPAs	$	114,084		$	133,690		$	80,454		$	107,611		$	92,821
Non-accrual loans to LHI	0.47		%	0.57		%	0.36		%	0.49		%	0.37		%
Total LHI NPAs to LHI plus OREO	0.47		%	0.57		%	0.36		%	0.49		%	0.41		%
Total LHI NPAs to earning assets	0.39		%	0.49		%	0.29		%	0.41		%	0.35		%
Allowance for loan losses to non-accrual loans	1.9x			1.6x			2.4x			1.8x			2.2x
Loans past due 90 days and still accruing(1)	$	15,212		$	12,245		$	9,353		$	11,295		$	7,357
Loans past due 90 days to LHI	0.06		%	0.05		%	0.04		%	0.05		%	0.03		%
LHS past due 90 days and still accruing(2)	$	11,665		$	13,693		$	16,829		$	25,238		$	27,858

(1)			At June 30, 2019, loans past due 90 days and still accruing includes premium finance loans of $9.8 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 LHS 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. Also includes loans that, pursuant to Ginnie Mae servicing guidelines, we have the unilateral right, but not obligation, to repurchase and thus must record as LHS 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)
	2nd Quarter			1st Quarter			4th Quarter			3rd Quarter			2nd Quarter
	2019			2019			2018			2018			2018
Interest income
Interest and fees on loans	$	329,842		$	312,703		$	310,470		$	291,189		$	279,447
Investment securities	2,260			1,460			1,274			1,161			193
Federal funds sold and securities purchased under resale agreements	157			379			984			1,018			745
Interest-bearing deposits in other banks	14,634			11,019			8,990			8,386			6,467
Total interest income	346,893			325,561			321,718			301,754			286,852
Interest expense
Deposits	72,529			69,054			61,773			52,034			39,607
Federal funds purchased	5,202			3,516			2,097			1,800			1,665
Other borrowings	20,124			11,854			11,726			10,317			8,484
Subordinated notes	4,191			4,191			4,191			4,191			4,191
Trust preferred subordinated debentures	1,294			1,332			1,258			1,237			1,193
Total interest expense	103,340			89,947			81,045			69,579			55,140
Net interest income	243,553			235,614			240,673			232,175			231,712
Provision for credit losses	27,000			20,000			35,000			13,000			27,000
Net interest income after provision for credit losses	216,553			215,614			205,673			219,175			204,712
Non-interest income
Service charges on deposit accounts	2,849			2,979			3,168			3,477			3,005
Wealth management and trust fee income	2,129			2,009			2,152			2,065			2,007
Brokered loan fees	7,336			5,066			5,408			6,141			5,815
Servicing income	3,126			2,734			2,861			4,987			4,967
Swap fees	601			1,031			1,356			1,355			1,352
Net gain/(loss) on sale of LHS	(5,986		)	(505		)	(8,087		)	(444		)	(5,230		)
Other	14,309			16,700			8,422			7,937			5,363
Total non-interest income	24,364			30,014			15,280			25,518			17,279
Non-interest expense
Salaries and employee benefits	76,889			77,823			69,500			77,327			72,404
Net occupancy expense	7,910			7,879			7,390			8,362			7,356
Marketing	14,087			11,708			10,208			10,214			10,236
Legal and professional	10,004			10,030			13,042			10,764			11,654
Communications and technology	11,022			9,198			8,845			7,435			7,143
FDIC insurance assessment	4,138			5,122			5,423			6,524			6,257
Servicing related expenses	6,066			5,382			2,555			4,207			4,367
Allowance and other carrying costs for OREO	—			—			7			(1,864		)	176
Other	11,445			13,236			12,892			13,174			12,538
Total non-interest expense	141,561			140,378			129,862			136,143			132,131
Income before income taxes	99,356			105,250			91,091			108,550			89,860
Income tax expense	21,387			22,411			19,200			22,998			18,424
Net income	77,969			82,839			71,891			85,552			71,436
Preferred stock dividends	2,437			2,438			2,437			2,438			2,437
Net income available to common shareholders	$	75,532		$	80,401		$	69,454		$	83,114		$	68,999

TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
(Dollars in thousands)
	2nd Quarter 2019									1st Quarter 2019									4th Quarter 2018									3rd Quarter 2018									2nd Quarter 2018
	Average Balance			Revenue/ Expense			Yield/ Rate			Average Balance			Revenue/ Expense			Yield/ Rate			Average Balance			Revenue/ Expense			Yield/ Rate			Average Balance			Revenue/ Expense			Yield/ Rate			Average Balance			Revenue/ Expense			Yield/ Rate
Assets
Investment securities - Taxable	$	38,887		$	287		2.96	%		$	30,625		$	274		3.62	%		$	23,977		$	259		4.29	%		$	24,221		$	191		3.14	%		$	24,514		$	193		3.15	%
Investment securities - Non-taxable(2)	192,115			2,498			5.21	%		114,341			1,501			5.33	%		93,394			1,285			5.46	%		91,298			1,228			5.33	%		—			—			—	%
Federal funds sold and securities purchased under resale agreements	28,436			157			2.22	%		63,652			379			2.41	%		173,654			984			2.25	%		203,972			1,018			1.98	%		166,613			745			1.79	%
Interest-bearing deposits in other banks	2,491,827			14,634			2.36	%		1,823,106			11,019			2.45	%		1,585,763			8,990			2.25	%		1,697,787			8,386			1.96	%		1,498,474			6,467			1.73	%
LHS, at fair value	2,494,883			27,607			4.44	%		2,122,302			25,303			4.84	%		2,049,395			24,407			4.72	%		1,484,459			17,272			4.62	%		1,516,047			17,026			4.50	%
LHI, mortgage finance loans	7,032,963			63,523			3.62	%		4,931,879			46,368			3.81	%		5,046,540			47,305			3.72	%		5,443,829			49,715			3.62	%		4,898,411			47,056			3.85	%
LHI(1)(2)	16,781,733			239,829			5.73	%		16,866,456			242,155			5.82	%		16,643,559			239,995			5.72	%		16,331,622			225,604			5.48	%		15,883,317			216,755			5.47	%
Less allowance for loan losses	206,654			—			—			192,122			—			—			182,814			—			—			179,227			—			—			189,238			—			—
LHI, net of allowance	23,608,042			303,352			5.15	%		21,606,213			288,523			5.42	%		21,507,285			287,300			5.30	%		21,596,224			275,319			5.06	%		20,592,490			263,811			5.14	%
Total earning assets	28,854,190			348,535			4.84	%		25,760,239			326,999			5.15	%		25,433,468			323,225			5.04	%		25,097,961			303,414			4.80	%		23,798,138			288,242			4.86	%
Cash and other assets	940,793									894,797									828,156									877,954									808,099
Total assets	$	29,794,983								$	26,655,036								$	26,261,624								$	25,975,915								$	24,606,237
Liabilities and Stockholders’ Equity
Transaction deposits	$	3,475,404		$	18,037		2.08	%		$	3,263,976		$	16,001		1.99	%		$	3,233,960		$	15,150		1.86	%		$	3,253,310		$	13,642		1.66	%		$	2,889,834		$	10,295		1.43	%
Savings deposits	8,896,537			40,994			1.85	%		8,751,200			41,673			1.93	%		8,354,332			36,913			1.75	%		7,820,742			29,930			1.52	%		7,784,937			25,454			1.31	%
Time deposits	2,227,460			13,498			2.43	%		2,010,476			11,380			2.30	%		1,886,016			9,710			2.04	%		1,778,831			8,462			1.89	%		979,735			3,858			1.58	%
Total interest bearing deposits	14,599,401			72,529			1.99	%		14,025,652			69,054			2.00	%		13,474,308			61,773			1.82	%		12,852,883			52,034			1.61	%		11,654,506			39,607			1.36	%
Other borrowings	4,018,231			25,326			2.53	%		2,412,254			15,370			2.58	%		2,290,520			13,823			2.39	%		2,275,640			12,117			2.11	%		2,113,391			10,149			1.93	%
Subordinated notes	281,889			4,191			5.96	%		281,799			4,191			6.03	%		281,708			4,191			5.90	%		281,619			4,191			5.90	%		281,527			4,191			5.97	%
Trust preferred subordinated debentures	113,406			1,294			4.58	%		113,406			1,332			4.76	%		113,406			1,258			4.40	%		113,406			1,237			4.33	%		113,406			1,193			4.22	%
Total interest bearing liabilities	19,012,927			103,340			2.18	%		16,833,111			89,947			2.17	%		16,159,942			81,045			1.99	%		15,523,548			69,579			1.78	%		14,162,830			55,140			1.56	%
Demand deposits	7,929,266									7,047,120									7,462,392									7,940,503									8,017,578
Other liabilities	220,305									223,142									157,278									116,302									100,074
Stockholders’ equity	2,632,485									2,551,663									2,482,012									2,395,562									2,325,755
Total liabilities and stockholders’ equity	$	29,794,983								$	26,655,036								$	26,261,624								$	25,975,915								$	24,606,237
Net interest income(2)				$	245,195								$	237,052								$	242,180								$	233,835								$	233,102
Net interest margin							3.41	%								3.73	%								3.78	%								3.70	%								3.93	%

(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.

INVESTOR CONTACT
Heather Worley, 214.932.6646
[email protected]

Press Releases

Texas Capital Bancshares (TCBI) Misses Q2 EPS by 2cJuly 17, 2019 4:03 PM