Bay Street News

Texas Capital Bancshares, Inc. Announces First Quarter 2024 Results

First quarter 2024 net income of $26.1 million and net income available to common stockholders of $21.8 million,
or 
$0.46 per diluted share

First quarter 2024 growth in loans held for investment of 2.4% and in total deposits of 7.1%

Capital ratios continue to be strong, including 12.4% CET1 and 16.6% Total Capital

DALLAS, April 18, 2024 (GLOBE NEWSWIRE) — Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the first quarter of 2024.

Net income available to common stockholders was $21.8 million, or $0.46 per diluted share, for the first quarter of 2024, compared to $15.8 million, or $0.33 per diluted share, for the fourth quarter of 2023 and $34.3 million, or $0.70 per diluted share, for the first quarter of 2023. The first quarter of 2024 included a $5.0 million ($0.08 per diluted share) legal settlement expense, Federal Deposit Insurance Corporation (“FDIC”) special assessment expense of $3.0 million ($0.05 per diluted share) and $2.0 million ($0.03 per diluted share) of restructuring expenses.

“We continue to leverage our unique balance sheet positioning and maturing product capabilities to build an enduring and valuable franchise,” said Rob C. Holmes, President and CEO. “Quality quarterly growth in areas of focus coupled with strong firm-wide pipelines signal emerging momentum moving into the second quarter.”

FINANCIAL RESULTS          
(dollars and shares in thousands)          
  1st Quarter   4th Quarter   1st Quarter
    2024       2023       2023  
OPERATING RESULTS          
Net income $ 26,142     $ 20,150     $ 38,661  
Net income available to common stockholders $ 21,829     $ 15,838     $ 34,348  
Diluted earnings per common share $ 0.46     $ 0.33     $ 0.70  
Diluted common shares   47,711       48,098       48,881  
Return on average assets   0.36 %     0.27 %     0.53 %
Return on average common equity   3.03 %     2.25 %     5.06 %
           
BALANCE SHEET          
Loans held for investment $ 16,677,691     $ 16,362,230     $ 16,014,497  
Loans held for investment, mortgage finance   4,153,313       3,978,328       4,060,570  
Total loans held for investment   20,831,004       20,340,558       20,075,067  
Loans held for sale   37,750       44,105       27,608  
Total assets   29,180,585       28,356,266       28,596,653  
Non-interest bearing deposits   8,478,215       7,328,276       9,500,583  
Total deposits   23,954,037       22,371,839       22,179,697  
Stockholders’ equity   3,170,662       3,199,142       3,079,974  
           


FIRST
QUARTER 2024 COMPARED TO FOURTH QUARTER 2023

For the first quarter of 2024, net income available to common stockholders was $21.8 million, or $0.46 per diluted share, compared to $15.8 million, or $0.33 per diluted share, for the fourth quarter of 2023.

Provision for credit losses for the first quarter of 2024 was $19.0 million, compared to $19.0 million for the fourth quarter of 2023. The $19.0 million provision for credit losses recorded in the first quarter of 2024 resulted primarily from increases in criticized and non-accrual loans, growth in loans held for investment (“LHI”) and $10.8 million in net charge-offs.

Net interest income was $215.0 million for the first quarter of 2024, compared to $214.7 million for the fourth quarter of 2023, as an increase in yields on earning assets was offset by a decrease in average earning assets. Net interest margin for the first quarter of 2024 was 3.03%, an increase of 10 basis points from the fourth quarter of 2023. LHI, excluding mortgage finance, yields increased 12 basis points from the fourth quarter of 2023 and LHI, mortgage finance yields increased 21 basis points from the fourth quarter of 2023. Total cost of deposits was 2.97% for the first quarter of 2024, a 15 basis point increase from the fourth quarter of 2023.

Non-interest income for the first quarter of 2024 increased $10.2 million, or 33%, compared to the fourth quarter of 2023, primarily due to an increase in investment banking and advisory fees, partially offset by a decrease in other non-interest income.

Non-interest expense for the first quarter of 2024 increased $1.0 million, or 1%, compared to the fourth quarter of 2023, primarily due to an increase in salaries and benefits, primarily as a result of the effect of seasonal payroll expenses that peak in the first quarter and $2.0 million of restructuring expenses, partially offset by decreases in legal and professional expense, communications and technology expense and FDIC insurance assessment. The fourth quarter of 2023 included $19.9 million in FDIC special assessment expense and the first quarter of 2024 included an additional special assessment expense of $3.0 million. Legal and professional expense in the first quarter of 2024 included a $5.0 million legal settlement expense, which was more than offset by declines in professional services.

FIRST QUARTER 2024 COMPARED TO FIRST QUARTER 2023

Net income available to common stockholders was $21.8 million, or $0.46 per diluted share, for the first quarter of 2024, compared to $34.3 million, or $0.70 per diluted share, for the first quarter of 2023.

The first quarter of 2024 included a $19.0 million provision for credit losses, reflecting increases in criticized and non-accrual loans, growth in LHI and $10.8 million in net charge-offs, compared to a $28.0 million provision for the first quarter of 2023.

Net interest income decreased to $215.0 million for the first quarter of 2024, compared to $235.3 million for the first quarter of 2023, primarily due to an increase in funding costs, partially offset by an increase in yields on average earning assets. Net interest margin decreased 30 basis points to 3.03% for the first quarter of 2024, as compared to the first quarter of 2023. LHI, excluding mortgage finance, yields increased 52 basis points compared to the first quarter of 2023 and LHI, mortgage finance yields decreased 102 basis points from the first quarter of 2023. Total cost of deposits increased 91 basis points compared to the first quarter of 2023.

Non-interest income for the first quarter of 2024 increased $3.9 million, or 10%, compared to the first quarter of 2023. The increase was primarily due to an increase in investment banking and advisory fees.

Non-interest expense for the first quarter of 2024 increased $8.4 million, or 4%, compared to the first quarter of 2023, primarily due to increases in legal and professional expense, communications and technology expense and FDIC insurance assessment resulting from an additional $3.0 million FDIC special assessment recorded in the first quarter of 2024, partially offset by a decrease in marketing expense. The increase in legal and professional expense in the first quarter of 2024 resulted from a $5.0 million legal settlement expense, partially offset by declines in professional services.

CREDIT QUALITY

Net charge-offs of $10.8 million were recorded during the first quarter of 2024, compared to net charge-offs of $13.8 million and $19.9 million during the fourth quarter of 2023 and the first quarter of 2023, respectively. Criticized loans totaled $859.5 million at March 31, 2024, compared to $738.2 million at December 31, 2023 and $561.1 million at March 31, 2023. Non-accrual LHI totaled $92.8 million at March 31, 2024, compared to $81.4 million at December 31, 2023 and $94.0 million at March 31, 2023. The ratio of non-accrual LHI to total LHI for the first quarter of 2024 was 0.45%, compared to 0.40% for the fourth quarter of 2023 and 0.47% for the first quarter of 2023. The ratio of total allowance for credit losses to total LHI was 1.46% at March 31, 2024, compared to 1.46% and 1.41% at September 30, 2023 and March 31, 2023, respectively.

REGULATORY RATIOS AND CAPITAL

All regulatory ratios continue to be in excess of “well capitalized” requirements as of March 31, 2024. Our CET1, tier 1 capital, total capital and leverage ratios were 12.4%, 13.9%, 16.6% and 12.4%, respectively, at March 31, 2024, compared to 12.6%, 14.2%, 17.1% and 12.2%, respectively, at December 31, 2023 and 12.4%, 14.0%, 16.9% and 12.0%, respectively, at March 31, 2023. At March 31, 2024, our ratio of tangible common equity to total tangible assets was 9.8%, compared to 10.2% at December 31, 2023 and 9.7% at March 31, 2023.

During the first quarter of 2024, the Company repurchased 529,338 shares of its common stock for an aggregate purchase price, including excise tax expense, of $31.5 million, at a weighted average price of $59.27 per share.

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, 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 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; 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)
  1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
    2024     2023     2023     2023     2023  
CONSOLIDATED STATEMENTS OF INCOME          
Interest income $ 417,378   $ 417,072   $ 425,769   $ 401,916   $ 385,166  
Interest expense   202,369     202,355     193,698     169,926     149,821  
Net interest income   215,009     214,717     232,071     231,990     235,345  
Provision for credit losses   19,000     19,000     18,000     7,000     28,000  
Net interest income after provision for credit losses   196,009     195,717     214,071     224,990     207,345  
Non-interest income   41,319     31,133     46,872     46,011     37,403  
Non-interest expense   202,393     201,385     179,891     181,644     194,027  
Income before income taxes   34,935     25,465     81,052     89,357     50,721  
Income tax expense   8,793     5,315     19,373     20,706     12,060  
Net income   26,142     20,150     61,679     68,651     38,661  
Preferred stock dividends   4,313     4,312     4,313     4,312     4,313  
Net income available to common stockholders $ 21,829   $ 15,838   $ 57,366   $ 64,339   $ 34,348  
Diluted earnings per common share $ 0.46   $ 0.33   $ 1.18   $ 1.33   $ 0.70  
Diluted common shares   47,711,192     48,097,517     48,528,698     48,421,276     48,880,725  
           
CONSOLIDATED BALANCE SHEET DATA          
Total assets $ 29,180,585   $ 28,356,266   $ 29,628,249   $ 28,976,544   $ 28,596,653  
Loans held for investment   16,677,691     16,362,230     16,183,882     16,227,203     16,014,497  
Loans held for investment, mortgage finance   4,153,313     3,978,328     4,429,489     5,098,812     4,060,570  
Loans held for sale   37,750     44,105     155,073     29,097     27,608  
Interest bearing cash and cash equivalents   3,148,157     3,042,357     3,975,860     2,587,131     3,385,494  
Investment securities   4,414,280     4,143,194     4,069,717     4,226,653     4,345,969  
Non-interest bearing deposits   8,478,215     7,328,276     9,352,883     9,429,352     9,500,583  
Total deposits   23,954,037     22,371,839     23,878,978     23,318,240     22,179,697  
Short-term borrowings   750,000     1,500,000     1,400,000     1,350,000     2,100,000  
Long-term debt   859,823     859,147     858,471     857,795     932,119  
Stockholders’ equity   3,170,662     3,199,142     3,077,700     3,081,927     3,079,974  
           
End of period shares outstanding   46,986,275     47,237,912     48,015,003     47,992,521     47,851,862  
Book value per share $ 61.10   $ 61.37   $ 57.85   $ 57.97   $ 58.10  
Tangible book value per share(1) $ 61.06   $ 61.34   $ 57.82   $ 57.93   $ 58.06  
           
SELECTED FINANCIAL RATIOS          
Net interest margin   3.03 %   2.93 %   3.13 %   3.29 %   3.33 %
Return on average assets   0.36 %   0.27 %   0.81 %   0.95 %   0.53 %
Return on average common equity   3.03 %   2.25 %   8.08 %   9.17 %   5.06 %
Non-interest income to average earning assets   0.59 %   0.43 %   0.64 %   0.66 %   0.54 %
Efficiency ratio(2)   79.0 %   81.9 %   64.5 %   65.3 %   71.1 %
Non-interest expense to average earning assets   2.89 %   2.79 %   2.46 %   2.61 %   2.78 %
Common equity to total assets   9.8 %   10.2 %   9.4 %   9.6 %   9.7 %
Tangible common equity to total tangible assets(3)   9.8 %   10.2 %   9.4 %   9.6 %   9.7 %
Common Equity Tier 1   12.4 %   12.6 %   12.7 %   12.2 %   12.4 %
Tier 1 capital   13.9 %   14.2 %   14.3 %   13.7 %   14.0 %
Total capital   16.6 %   17.1 %   17.1 %   16.4 %   16.9 %
Leverage   12.4 %   12.2 %   12.1 %   12.4 %   12.0 %
 
(1) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(2) Non-interest expense divided by the sum of net interest income and non-interest income.
(3) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by total assets, less goodwill and intangibles.
 
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
  March 31, 2024 March 31, 2023 % Change
Assets      
Cash and due from banks $ 167,985   $ 264,211   (36) %
Interest bearing cash and cash equivalents   3,148,157     3,385,494   (7) %
Available-for-sale debt securities   3,491,510     3,394,293   3 %
Held-to-maturity debt securities   849,283     918,962   (8) %
Equity securities   73,487     32,714   125 %
Investment securities   4,414,280     4,345,969   2 %
Loans held for sale   37,750     27,608   37 %
Loans held for investment, mortgage finance   4,153,313     4,060,570   2 %
Loans held for investment   16,677,691     16,014,497   4 %
Less: Allowance for credit losses on loans   263,962     260,928   1 %
Loans held for investment, net   20,567,042     19,814,139   4 %
Premises and equipment, net   49,899     25,268   97 %
Accrued interest receivable and other assets   793,976     732,468   8 %
Goodwill and intangibles, net   1,496     1,496   %
Total assets $ 29,180,585   $ 28,596,653   2 %
       
Liabilities and Stockholders’ Equity      
Liabilities:      
Non-interest bearing deposits $ 8,478,215   $ 9,500,583   (11) %
Interest bearing deposits   15,475,822     12,679,114   22 %
Total deposits   23,954,037     22,179,697   8 %
Accrued interest payable   32,352     31,198   4 %
Other liabilities   413,711     273,665   51 %
Short-term borrowings   750,000     2,100,000   (64) %
Long-term debt   859,823     932,119   (8) %
Total liabilities   26,009,923     25,516,679   2 %
       
Stockholders’ equity:      
Preferred stock, $.01 par value, $1,000 liquidation value:      
Authorized shares – 10,000,000      
Issued shares – 300,000 shares issued at March 31, 2024 and 2023   300,000     300,000   %
Common stock, $.01 par value:      
Authorized shares – 100,000,000      
Issued shares – 51,420,680 and 50,947,306 at March 31, 2024 and 2023, respectively   514     509   1 %
Additional paid-in capital   1,044,669     1,031,905   1 %
Retained earnings   2,457,222     2,297,850   7 %
Treasury stock – 4,434,405 and 3,095,444 shares at cost at March 31, 2024 and 2023, respectively   (251,857 )   (175,528 ) 43 %
Accumulated other comprehensive loss, net of taxes   (379,886 )   (374,762 ) 1 %
Total stockholders’ equity   3,170,662     3,079,974   3 %
Total liabilities and stockholders’ equity $ 29,180,585   $ 28,596,653   2 %
 
TEXAS CAPITAL BANCSHARES, INC.    
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)    
(dollars in thousands except per share data)    
  Three Months Ended March 31,
    2024   2023  
Interest income    
Interest and fees on loans $ 330,879 $ 297,438  
Investment securities   32,144   25,292  
Interest bearing cash and cash equivalents   54,355   62,436  
Total interest income   417,378   385,166  
Interest expense    
Deposits   175,600   120,094  
Short-term borrowings   12,783   14,744  
Long-term debt   13,986   14,983  
Total interest expense   202,369   149,821  
Net interest income   215,009   235,345  
Provision for credit losses   19,000   28,000  
Net interest income after provision for credit losses   196,009   207,345  
Non-interest income    
Service charges on deposit accounts   6,339   5,022  
Wealth management and trust fee income   3,567   3,429  
Brokered loan fees   1,911   1,895  
Investment banking and advisory fees   18,424   14,564  
Trading income   4,712   4,204  
Other   6,366   8,289  
Total non-interest income   41,319   37,403  
Non-interest expense    
Salaries and benefits   128,727   128,670  
Occupancy expense   9,737   9,619  
Marketing   6,036   9,044  
Legal and professional   16,195   14,514  
Communications and technology   21,114   17,523  
Federal Deposit Insurance Corporation insurance assessment   8,421   2,170  
Other   12,163   12,487  
Total non-interest expense   202,393   194,027  
Income before income taxes   34,935   50,721  
Income tax expense   8,793   12,060  
Net income   26,142   38,661  
Preferred stock dividends   4,313   4,313  
Net income available to common stockholders $ 21,829 $ 34,348  
     
Basic earnings per common share $ 0.46 $ 0.71  
Diluted earnings per common share $ 0.46 $ 0.70  
           
TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
  1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
    2024     2023     2023     2023     2023  
Allowance for credit losses on loans:          
Beginning balance $ 249,973   $ 244,902   $ 237,343   $ 260,928   $ 253,469  
Loans charged-off:          
Commercial   7,544     8,356     13,246     8,852     20,732  
Commercial real estate   3,325     5,500              
Consumer           41          
Total charge-offs   10,869     13,856     13,287     8,852     20,732  
Recoveries:          
Commercial   105     15     4,346     611     819  
Commercial real estate       4              
Consumer               2     3  
Total recoveries   105     19     4,346     613     822  
Net charge-offs   10,764     13,837     8,941     8,239     19,910  
Provision for credit losses on loans   24,753     18,908     16,500     (15,346 )   27,369  
Ending balance $ 263,962   $ 249,973   $ 244,902   $ 237,343   $ 260,928  
           
Allowance for off-balance sheet credit losses:          
Beginning balance $ 46,362   $ 46,270   $ 44,770   $ 22,424   $ 21,793  
Provision for off-balance sheet credit losses   (5,753 )   92     1,500     22,346     631  
Ending balance $ 40,609   $ 46,362   $ 46,270   $ 44,770   $ 22,424  
           
Total allowance for credit losses $ 304,571   $ 296,335   $ 291,172   $ 282,113   $ 283,352  
Total provision for credit losses $ 19,000   $ 19,000   $ 18,000   $ 7,000   $ 28,000  
           
Allowance for credit losses on loans to total loans held for investment   1.27 %   1.23 %   1.19 %   1.11 %   1.30 %
Allowance for credit losses on loans to average total loans held for investment   1.32 %   1.24 %   1.17 %   1.15 %   1.38 %
Net charge-offs to average total loans held for investment(1)   0.22 %   0.27 %   0.17 %   0.16 %   0.43 %
Net charge-offs to average total loans held for investment for last 12 months(1)   0.20 %   0.25 %   0.26 %   0.23 %   0.19 %
Total provision for credit losses to average total loans held for investment(1)   0.38 %   0.37 %   0.34 %   0.14 %   0.60 %
Total allowance for credit losses to total loans held for investment   1.46 %   1.46 %   1.41 %   1.32 %   1.41 %
                               
(1) Interim period ratios are annualized.
                               
TEXAS CAPITAL BANCSHARES, INC.          
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS      
(dollars in thousands)          
  1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
    2024     2023     2023     2023     2023  
Non-accrual loans held for investment $ 92,849   $ 81,398   $ 63,129   $ 81,039   $ 93,951  
Non-accrual loans held for sale(1)   9,250                  
Other real estate owned                    
Total non-performing assets $ 102,099   $ 81,398   $ 63,129   $ 81,039   $ 93,951  
           
Non-accrual loans held for investment to total loans held for investment   0.45 %   0.40 %   0.31 %   0.38 %   0.47 %
Total non-performing assets to total assets   0.35 %   0.29 %   0.21 %   0.28 %   0.33 %
Allowance for credit losses on loans to non-accrual loans held for investment   2.8x     3.1x     3.9x     2.9x     2.8x  
Total allowance for credit losses to non-accrual loans held for investment   3.3x     3.6x     4.6x     3.5x     3.0x  
           
Loans held for investment past due 90 days and still accruing $ 3,674   $ 19,523   $ 4,602   $ 64   $ 3,098  
Loans held for investment past due 90 days to total loans held for investment   0.02 %   0.10 %   0.02 %   %   0.02 %
Loans held for sale past due 90 days and still accruing $ 147   $   $   $   $  
                               
(1) First quarter 2024 includes one non-accrual loan previously reported in loans held for investment that was transferred at fair value to held for sale as of March 31, 2024.
                               
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)
           
  1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
    2024   2023   2023   2023   2023  
Interest income          
Interest and fees on loans $ 330,879 $ 325,210 $ 345,138 $ 332,867 $ 297,438  
Investment securities   32,144   28,454   27,070   27,478   25,292  
Interest bearing deposits in other banks   54,355   63,408   53,561   41,571   62,436  
Total interest income   417,378   417,072   425,769   401,916   385,166  
Interest expense          
Deposits   175,600   170,173   160,117   137,391   120,094  
Short-term borrowings   12,783   18,069   19,576   18,253   14,744  
Long-term debt   13,986   14,113   14,005   14,282   14,983  
Total interest expense   202,369   202,355   193,698   169,926   149,821  
Net interest income   215,009   214,717   232,071   231,990   235,345  
Provision for credit losses   19,000   19,000   18,000   7,000   28,000  
Net interest income after provision for credit losses   196,009   195,717   214,071   224,990   207,345  
Non-interest income          
Service charges on deposit accounts   6,339   5,397   5,297   5,158   5,022  
Wealth management and trust fee income   3,567   3,302   3,509   3,715   3,429  
Brokered loan fees   1,911   2,076   2,532   2,415   1,895  
Investment banking and advisory fees   18,424   6,906   23,099   19,101   14,564  
Trading income   4,712   3,819   6,092   8,397   4,204  
Other   6,366   9,633   6,343   7,225   8,289  
Total non-interest income   41,319   31,133   46,872   46,011   37,403  
Non-interest expense          
Salaries and benefits   128,727   107,970   110,010   113,050   128,670  
Occupancy expense   9,737   9,483   9,910   9,482   9,619  
Marketing   6,036   5,686   4,757   6,367   9,044  
Legal and professional   16,195   17,127   17,614   15,669   14,514  
Communications and technology   21,114   23,607   19,607   20,525   17,523  
Federal Deposit Insurance Corporation insurance assessment   8,421   25,143   5,769   3,693   2,170  
Other   12,163   12,369   12,224   12,858   12,487  
Total non-interest expense   202,393   201,385   179,891   181,644   194,027  
Income before income taxes   34,935   25,465   81,052   89,357   50,721  
Income tax expense   8,793   5,315   19,373   20,706   12,060  
Net income   26,142   20,150   61,679   68,651   38,661  
Preferred stock dividends   4,313   4,312   4,313   4,312   4,313  
Net income available to common shareholders $ 21,829 $ 15,838 $ 57,366 $ 64,339 $ 34,348  
 
TEXAS CAPITAL BANCSHARES, INC.
TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1)
(dollars in thousands)
  1st Quarter 2024   4th Quarter 2023   3rd Quarter 2023   2nd Quarter 2023   1st Quarter 2023
  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) $ 4,299,368 $ 32,144 2.77 %   $ 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 %
Interest bearing cash and cash equivalents   4,051,627   54,355 5.40 %     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 %
Loans held for sale   51,164   1,184 9.31 %     29,071   672 9.17 %     31,878   647 8.06 %     28,414   599 8.46 %     43,472   938 8.75 %
Loans held for investment, mortgage finance(4)   3,517,707   31,455 3.60 %     3,946,280   33,709 3.39 %     4,697,702   50,813 4.29 %     4,376,235   49,425 4.53 %     3,286,804   37,419 4.62 %
Loans held for investment(3)(4)   16,522,089   298,306 7.26 %     16,164,233   290,897 7.14 %     16,317,324   293,750 7.14 %     16,217,314   282,956 7.00 %     15,598,854   259,240 6.74 %
Less: Allowance for credit losses on loans   249,936         244,287         238,883         261,027         252,727    
Loans held for investment, net   19,789,860   329,761 6.70 %     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 %
Total earning assets   28,192,019   417,444 5.88 %     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 %
Cash and other assets   1,058,463         1,120,354         1,106,031         1,049,145         1,041,745    
Total assets $ 29,250,482       $ 29,732,000       $ 30,083,846       $ 29,003,053       $ 29,319,945    
                                       
Liabilities and Stockholders’ Equity                                      
Transaction deposits $ 2,006,493 $ 16,858 3.38 %   $ 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 %
Savings deposits   11,409,677   136,790 4.82 %     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 %
Time deposits   1,719,325   21,952 5.14 %     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 %
Total interest bearing deposits   15,135,495   175,600 4.67 %     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 %
Short-term borrowings   912,088   12,783 5.64 %     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 %
Long-term debt   859,509   13,986 6.54 %     858,858   14,113 6.52 %     858,167   14,005 6.47 %     883,871   14,282 6.48 %     931,796   14,983 6.52 %
Total interest bearing liabilities   16,907,092   202,369 4.81 %     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 %
Non-interest bearing deposits   8,637,775         9,247,491         10,016,579         9,749,105         10,253,731    
Other liabilities   509,286         541,162         474,869         389,155         436,621    
Stockholders’ equity   3,196,329         3,094,589         3,116,761         3,115,447         3,052,357    
Total liabilities and stockholders’ equity $ 29,250,482       $ 29,732,000       $ 30,083,846       $ 29,003,053       $ 29,319,945    
Net interest income   $ 215,075       $ 214,785       $ 232,143       $ 232,103       $ 235,504  
Net interest margin     3.03 %       2.93 %       3.13 %       3.29 %       3.33 %
 
(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.
(4) In the first quarter of 2024, enhancements were made to our methodology for applying relationship pricing credits to mortgage client loans. To conform to the current period presentation, certain prior period interest income amounts have been reclassified from loans held for investment, mortgage finance to loans held for investment and related yields have been adjusted accordingly.
 


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