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Texas Capital Bancshares, Inc. Announces Fourth Quarter and Full Year 2022 Results

Fourth quarter 2022 net income of $217.3 million and net income available to common stockholders of $212.9 million, or $4.23 per diluted share

Repurchased $65.3 million shares of common stock at tangible book value

Completed the sale of BankDirect Capital Finance, LLC recognizing $248.5 million pre-tax gain on sale

Record level regulatory capital ratios, including 13.0% CET 1 and 17.7% Total Capital

DALLAS, Jan. 18, 2023 (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 2022.

Net income available to common stockholders was $212.9 million, or $4.23 per diluted share, for the fourth quarter of 2022, compared to $37.1 million, or $0.74 per diluted share, for the third quarter of 2022 and $60.8 million, or $1.19 per diluted share, for the fourth quarter of 2021. The fourth quarter of 2022 included a $248.5 million ($3.83 per diluted share) gain and $13.0 million ($-0.20 per diluted share) in expenses related to the sale of the Company’s insurance premium finance subsidiary, BankDirect Capital Finance, LLC (“BDCF”), $9.8 million ($-0.15 per diluted share) in restructuring reserves related to the continued deployment of our target operating model and $8.0 million ($-0.12 per diluted share) in charitable contributions to the newly formed Texas Capital Bank Foundation.

“The quarterly financial results coupled with the strategic and transformative actions taken during 2022 position the Firm to execute on the unique opportunity in front of us, while serving the best clients in the best markets,” said Rob C. Holmes, President and CEO. “The financial resilience created over the last two years by the aggregate, focused actions taken have built the foundation of the Firm which will be our strategic advantage allowing us to both support our clients during times of market stress while delivering financial progress to all of our stakeholders.”

FINANCIAL RESULTS         
(dollars and shares in thousands)         
 4th Quarter 3rd Quarter 4th Quarter Full Year Full Year
  2022   2022   2021   2022   2021 
OPERATING RESULTS         
Net income$217,251  $41,418  $65,130  $332,478  $253,939 
Net income available to common stockholders$212,939  $37,105  $60,817  $315,228  $235,218 
Diluted earnings per common share$4.23  $0.74  $1.19  $6.18  $4.60 
Diluted common shares 50,283   50,418   51,208   51,047   51,141 
Return on average assets 2.80%  0.52%  0.69%  1.04%  0.67%
Return on average common equity 30.66%  5.36%  8.36%  11.33%  8.35%
          
BALANCE SHEET         
Loans held for investment$15,197,307  $14,878,959  $15,331,457     
Loans held for investment, mortgage finance 4,090,033   4,908,822   7,475,497     
Total loans held for investment 19,287,340   19,787,781   22,806,954     
Loans held for sale 36,357   3,142,178   8,123     
Total assets 28,414,642   30,408,513   34,731,738     
Non-interest bearing deposits 9,618,081   11,494,685   13,390,370     
Total deposits 22,856,880   24,498,563   28,109,365     
Stockholders’ equity 3,055,351   2,885,775   3,209,616     


 

FOURTH QUARTER 2022 COMPARED TO THIRD QUARTER 2022

For the fourth quarter of 2022, net income available to common stockholders was $212.9 million, or $4.23 per diluted share, compared to $37.1 million, or $0.74 per diluted share, for the third quarter of 2022.

Provision for credit losses for the fourth quarter of 2022 was $34.0 million, compared to a $12.0 million provision for credit losses for the third quarter of 2022. The $34.0 million provision for credit losses recorded in the fourth quarter of 2022 resulted primarily from increases in net charge-offs, criticized loans and loans held for investment (“LHI”), excluding mortgage finance.

Net interest income was $247.6 million for the fourth quarter of 2022, compared to $239.1 million for the third quarter of 2022. The increase in net interest income was primarily due to an increase in yields on earning assets, partially offset by a decline in total average loans and an increase in funding costs. Net interest margin for the fourth quarter of 2022 was 3.26%, an increase of 21 basis points from the third quarter of 2022. LHI, excluding mortgage finance, yields increased 115 basis points from the third quarter of 2022 and LHI, mortgage finance yields increased 9 basis points from the third quarter of 2022. Total cost of deposits was 1.53% for the fourth quarter of 2022, a 60 basis point increase from the third quarter of 2022.

Non-interest income for the fourth quarter of 2022 increased $252.3 million, compared to the third quarter of 2022, primarily due to a $248.5 million gain recognized on the sale of our insurance premium finance subsidiary as well as an increase in investment banking and trading income.

Non-interest expense for the fourth quarter of 2022 increased $16.0 million, or 8%, compared to the third quarter of 2022. Fourth quarter expenses included $13.0 million in legal and professional expense related to the sale of BDCF, restructuring reserves of $9.8 million, primarily related to occupancy expense, reflecting the expected costs of the continued implementation of the Company’s target operating model and $8.0 million in charitable contributions to the newly formed Texas Capital Bank Foundation recorded in other non-interest expense. Third quarter expenses included $3.1 million in legal and professional expense and $13.7 million in salaries and benefits expense related to the sale of BDCF.

FOURTH QUARTER 2022 COMPARED TO FOURTH QUARTER 2021

Net income available to common stockholders was $212.9 million, or $4.23 per diluted share, for the fourth quarter of 2022, compared to $60.8 million, or $1.19 per diluted share, for the fourth quarter of 2021.

The fourth quarter of 2022 included a $34.0 million provision for credit losses, resulting primarily from updated views on the downside risks to the economic forecast and an increase in net charge-offs, compared to a $10.0 million negative provision for credit losses for the fourth quarter of 2021.

Net interest income increased to $247.6 million for the fourth quarter of 2022, compared to $194.0 million for the fourth quarter of 2021, primarily due to an increase in yields on average earning assets, partially offset by an increase in funding costs. Net interest margin increased 114 basis points to 3.26% for the fourth quarter of 2022, as compared to the fourth quarter of 2021. LHI, excluding mortgage finance, yields increased 251 basis points compared to the fourth quarter of 2021 and LHI, mortgage finance yields increased 114 basis points from the fourth quarter of 2021. Total cost of deposits increased 134 basis points compared to the fourth quarter of 2021.

Non-interest income for the fourth quarter of 2022 increased $246.2 million, compared to the fourth quarter of 2021. The increase was primarily due to a $248.5 million gain recognized on the sale of BDCF, as well as an increase in investment banking and trading income, partially offset by a decrease in brokered loan fees.

Non-interest expense for the fourth quarter of 2022 increased $66.4 million, or 45%, compared to the fourth quarter of 2021. The fourth quarter of 2022 included $13.0 million in legal and professional expense related to the sale of BDCF, restructuring reserves totaling $9.8 million and charitable contributions of $8.0 million, all of which are discussed above. Also contributing to the increase in non-interest expense was an increase in salaries and benefits expense, resulting from an increase in headcount as compared to the fourth quarter of 2021.

CREDIT QUALITY

Net charge-offs of $15.0 million were recorded during the fourth quarter of 2022, as expected losses on certain legacy credits have moved closer to resolution, compared to net charge-offs of $2.7 million and $1.0 million during the third quarter of 2022 and the fourth quarter of 2021, respectively. Criticized loans totaled $513.2 million at December 31, 2022, compared to $484.0 million at September 30, 2022 and $582.9 million at December 31, 2021. Non-accrual LHI totaled $48.3 million at December 31, 2022, compared to $35.9 million at September 30, 2022 and $72.5 million at December 31, 2021. The ratio of non-accrual LHI to total LHI for the fourth quarter of 2022 was 0.25%, compared to 0.18% for the third quarter of 2022 and 0.32% for the fourth quarter of 2021. The ratio of total allowance for credit losses to total LHI was 1.43% at December 31, 2022, compared to 1.30% and 1.00% at September 30, 2022 and December 31, 2021, respectively.

REGULATORY RATIOS AND CAPITAL

All regulatory ratios continue to be in excess of “well capitalized” requirements as of December 31, 2022. Our CET 1, tier 1 capital, total capital and leverage ratios were 13.0%, 14.7%, 17.7% and 11.5%, respectively, at December 31, 2022, compared to 11.1%, 12.6%, 15.2% and 10.7%, respectively, at September 30, 2022 and 11.1%, 12.6%, 15.3% and 9.0% at December 31, 2021. At December 31, 2022, our ratio of tangible common equity to total tangible assets was 9.7%, compared to 8.5% at September 30, 2022 and 8.3% at December 31, 2021.

During the fourth quarter of 2022, the Company repurchased 1,141,239 shares of its common stock for an aggregate purchase price of $65.3 million, at a weighted average price of $57.20 per share. On January 18, 2023, 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 our outstanding common stock.

About Texas Capital Bancshares, Inc.

Texas Capital Bancshares, Inc. (NASDAQ: TCBI), a member of the Russell 2000 Index and the S&P MidCap 400, is the parent company of Texas Capital Bank, a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs, and individual customers. Founded in 1998, the institution is headquartered in Dallas with offices in Austin, Houston, San Antonio, and Fort Worth, and has built a network of clients across the country. With the ability to service clients through their entire lifecycles, Texas Capital Bank has established commercial banking, consumer banking, investment banking and wealth management capabilities.

Forward Looking Statements

This communication contains “forward-looking statements” within the meaning of and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, 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, 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. Several 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. These factors include, but are not limited to, credit quality and risk, the unpredictability of economic and business conditions that may impact TCBI or its customers, the COVID-19 pandemic, the Company’s ability to effective manage its liquidity risk and any growth plans and the availability of capital and funding, the Company’s ability to effectively manage information technology systems, cyber incidents or other failures, disruptions or security breaches, interest rates, commercial and residential real estate values, adverse or unexpected economic conditions, including inflation, recession, the threat of recession, and market conditions in Texas, the United States or globally, including governmental and consumer responses to those economic and market conditions, fund availability, accounting estimates and risk management processes, the transition away from the London Interbank Offered Rate (LIBOR), legislative and regulatory changes, ratings or interpretations, business strategy execution, the failure to identify, attract and retain key personnel, increased or expanded competition from banks and other financial service providers in TCBI’s markets, the failure to maintain adequate regulatory capital, environmental liability associated with properties related to TCBI’s lending activities, and severe weather, natural disasters, acts of war, terrorism, global conflict or other external events, climate change and related legislative and regulatory initiatives.

These and other factors that could cause actual results for TCBI on a consolidated basis to differ materially from those described in the forward-looking statements, including a discussion of the risks and uncertainties that may affect TCBI’s business, can be found in TCBI’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in 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 Quarter3rd Quarter2nd Quarter1st Quarter4th Quarter
  2022  2022  2022  2022  2021 
CONSOLIDATED STATEMENTS OF INCOME     
Interest income$371,287 $322,071 $242,349 $208,530 $219,892 
Interest expense 123,687  82,991  36,818  24,983  25,860 
Net interest income 247,600  239,080  205,531  183,547  194,032 
Provision for credit losses 34,000  12,000  22,000  (2,000) (10,000)
Net interest income after provision for credit losses 213,600  227,080  183,531  185,547  204,032 
Non-interest income 277,672  25,333  26,242  20,282  31,459 
Non-interest expense 213,090  197,047  164,303  153,092  146,649 
Income before income taxes 278,182  55,366  45,470  52,737  88,842 
Income tax expense 60,931  13,948  11,311  13,087  23,712 
Net income 217,251  41,418  34,159  39,650  65,130 
Preferred stock dividends 4,312  4,313  4,312  4,313  4,313 
Net income available to common stockholders$212,939 $37,105 $29,847 $35,337 $60,817 
Diluted earnings per common share$4.23 $0.74 $0.59 $0.69 $1.19 
Diluted common shares 50,282,663  50,417,884  50,801,628  51,324,027  51,208,161 
      
CONSOLIDATED BALANCE SHEET DATA     
Total assets$28,414,642 $30,408,513 $32,338,963 $31,085,377 $34,731,738 
Loans held for investment 15,197,307  14,878,959  17,517,866  15,849,434  15,331,457 
Loans held for investment, mortgage finance 4,090,033  4,908,822  6,549,507  5,827,965  7,475,497 
Loans held for sale 36,357  3,142,178  4,266  8,085  8,123 
Interest bearing cash and cash equivalents 4,778,623  3,399,638  4,032,931  5,136,680  7,765,996 
Investment securities 3,585,114  3,369.622  3,552.699  3,642,015  3,583,808 
Non-interest bearing deposits 9,618,081  11,494,685  12,555,367  13,434,723  13,390,370 
Total deposits 22,856,880  24,498,563  25,440,021  25,377,938  28,109,365 
Short-term borrowings 1,201,142  1,701,480  2,651,536  1,427,033  2,202,832 
Long-term debt 931,442  930,766  917,098  929,414  928,738 
Stockholders’ equity 3,055,351  2,885,775  3,006,832  3,090,038  3,209,616 
      
End of period shares outstanding 48,783,763  49,897,726  49,878,041  50,710,441  50,618,494 
Book value per share$56.48 $51.82 $54.27 $55.02 $57.48 
Tangible book value per share(1)$56.45 $51.48 $53.93 $54.68 $57.14 
      
SELECTED FINANCIAL RATIOS     
Net interest margin 3.26% 3.05% 2.68% 2.23% 2.12%
Return on average assets 2.80% 0.52% 0.44% 0.47% 0.69%
Return on average common equity 30.66% 5.36% 4.35% 4.97% 8.36%
Non-interest income to average earning assets 3.70% 0.33% 0.34% 0.25% 0.34%
Efficiency ratio(2) 40.6% 74.5% 70.9% 75.1% 65.0%
Non-interest expense to average earning assets 2.84% 2.53% 2.16% 1.86% 1.60%
Common equity to total assets 9.7% 8.5% 8.4% 9.0% 8.4%
Tangible common equity to total tangible assets(3) 9.7% 8.5% 8.3% 8.9% 8.3%
Common Equity Tier 1 13.0% 11.1% 10.5% 11.5% 11.1%
Tier 1 capital 14.7% 12.6% 11.9% 13.0% 12.6%
Total capital 17.7% 15.2% 14.4% 15.7% 15.3%
Leverage 11.5% 10.7% 10.7% 9.9% 9.0%

(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)
 December 31, 2022December 31, 2021% Change
Assets   
Cash and due from banks$233,637 $180,663 29%
Interest bearing cash and cash equivalents 4,778,623  7,765,996 (38)    %
Available-for-sale debt securities 2,615,644  3,538,201 (26)    %
Held-to-maturity debt securities 935,514   100%
Equity securities 33,956  45,607 (26)    %
Investment securities 3,585,114  3,583,808 %
Loans held for sale 36,357  8,123 N/M
Loans held for investment, mortgage finance 4,090,033  7,475,497 (45)    %
Loans held for investment 15,197,307  15,331,457 (1)    %
Less: Allowance for credit losses on loans 253,469  211,866 20%
Loans held for investment, net 19,033,871  22,595,088 (16)    %
Premises and equipment, net 26,382  20,901 26%
Accrued interest receivable and other assets 719,162  559,897 28%
Goodwill and intangibles, net 1,496  17,262 (91)    %
Total assets$28,414,642 $34,731,738 (18)    %
    
Liabilities and Stockholders’ Equity   
Liabilities:   
Non-interest bearing deposits$9,618,081 $13,390,370 (28)    %
Interest bearing deposits 13,238,799  14,718,995 (10)    %
Total deposits 22,856,880  28,109,365 (19)    %
Accrued interest payable 24,000  7,699 N/M
Other liabilities 345,827  273,488 26%
Short-term borrowings 1,201,142  2,202,832 (45)    %
Long-term debt 931,442  928,738 %
Total liabilities 25,359,291  31,522,122 (20)    %
    
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, 2022 and 2021 300,000  300,000 %
Common stock, $.01 par value:   
Authorized shares - 100,000,000   
Issued shares - 50,867,298 and 50,618,911 at December 31, 2022 and 2021, respectively 509  506 1%
Additional paid-in capital 1,025,593  1,008,559 2%
Retained earnings 2,263,502  1,948,274 16%
Treasury stock - 2,083,535 and 417 shares at cost at December 31, 2022 and 2021, respectively (115,310) (8)N/M
Accumulated other comprehensive loss, net of taxes (418,943) (47,715)N/M
Total stockholders’ equity 3,055,351  3,209,616 (5)    %
Total liabilities and stockholders’ equity$28,414,642 $34,731,738 (18)    %


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,
  2022  2021  2022  2021 
Interest income    
Interest and fees on loans$295,367 $204,379 $983,787 $820,532 
Investment securities 16,210  11,780  63,179  42,820 
Interest bearing cash and cash equivalents 59,710  3,733  97,271  13,233 
Total interest income 371,287  219,892  1,144,237  876,585 
Interest expense    
Deposits 96,150  14,513  190,663  65,507 
Short-term borrowings 13,449  771  29,077  4,613 
Long-term debt 14,088  10,576  48,739  37,628 
Total interest expense 123,687  25,860  268,479  107,748 
Net interest income 247,600  194,032  875,758  768,837 
Provision for credit losses 34,000  (10,000) 66,000  (30,000)
Net interest income after provision for credit losses 213,600  204,032  809,758  798,837 
Non-interest income    
Service charges on deposit accounts 5,150  4,702  22,876  18,674 
Wealth management and trust fee income 3,442  3,793  15,036  13,173 
Brokered loan fees 2,655  5,678  14,159  27,954 
Servicing income 180  277  857  15,513 
Investment banking and trading income 11,937  6,456  35,054  24,441 
Net gain/(loss) on sale of loans held for sale (990)   (990) 1,317 
Gain on disposal of subsidiary 248,526    248,526   
Other 6,772  10,553  14,011  37,158 
Total non-interest income 277,672  31,459  349,529  138,230 
Non-interest expense    
Salaries and benefits 103,490  89,075  436,809  350,930 
Occupancy expense 17,030  8,769  44,222  33,232 
Marketing 10,623  4,286  32,388  10,006 
Legal and professional 37,493  12,673  75,858  41,152 
Communications and technology 20,434  16,490  69,253  75,185 
Federal Deposit Insurance Corporation insurance assessment 3,092  4,688  14,344  21,027 
Servicing-related expenses   25    27,765 
Other 20,928  10,643  54,658  39,715 
Total non-interest expense 213,090  146,649  727,532  599,012 
Income before income taxes 278,182  88,842  431,755  338,055 
Income tax expense 60,931  23,712  99,277  84,116 
Net income 217,251  65,130  332,478  253,939 
Preferred stock dividends 4,312  4,313  17,250  18,721 
Net income available to common stockholders$212,939 $60,817 $315,228 $235,218 
     
Basic earnings per common share$4.28 $1.20 $6.25 $4.65 
Diluted earnings per common share$4.23 $1.19 $6.18 $4.60 


TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
 4th Quarter3rd Quarter2nd Quarter1st Quarter4th Quarter
  2022  2022  2022  2022  2021 
Allowance for credit losses on loans:     
Beginning balance$234,613 $229,013 $211,151 $211,866 $221,957 
Loans charged-off:     
Commercial 14,404  232  2,868  110  3,776 
Energy 2,702  2,903       
Real estate       350   
Total charge-offs 17,106  3,135  2,868  460  3,776 
Recoveries:     
Commercial 133  113  219  217  1,933 
Energy 1,974  289    755  601 
Real estate         205 
Total recoveries 2,107  402  219  972  2,739 
Net charge-offs 14,999  2,733  2,649  (512) 1,037 
Provision for credit losses on loans 33,855  8,333  20,511  (1,227) (9,054)
Ending balance$253,469 $234,613 $229,013 $211,151 $211,866 
      
Allowance for off-balance sheet credit losses:     
Beginning balance$21,648 $17,981 $16,492 $17,265 $18,211 
Provision for off-balance sheet credit losses 145  3,667  1,489  (773) (946)
Ending balance$21,793 $21,648 $17,981 $16,492 $17,265 
      
Total allowance for credit losses$275,262 $256,261 $246,994 $227,643 $229,131 
Total provision for credit losses$34,000 $12,000 $22,000 $(2,000)$(10,000)
      
Allowance for credit losses on loans to total loans held for investment 1.31% 1.19% 0.95% 0.97% 0.93%
Allowance for credit losses on loans to average total loans held for investment 1.31% 1.06% 1.02% 0.99% 0.91%
Net charge-offs to average total loans held for investment(1) 0.31% 0.05% 0.05%(0.01)        % 0.02%
Net charge-offs to average total loans held for investment for last 12 months(1) 0.09% 0.03% 0.03% 0.03% 0.06%
Total provision for credit losses to average total loans held for investment(1) 0.70% 0.22% 0.39%(0.04)        %(0.17)        %
Total allowance for credit losses to total loans held for investment 1.43% 1.30% 1.03% 1.05% 1.00%

(1)   Interim period ratios are annualized.

TEXAS CAPITAL BANCSHARES, INC.     
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS   
(dollars in thousands)     
 4th Quarter3rd Quarter2nd Quarter1st Quarter4th Quarter
  2022  2022  2022  2022  2021 
Non-accrual loans held for investment$48,338 $35,864 $50,526 $59,327 $72,502 
Non-accrual loans held for sale(1)   1,340       
Other real estate owned          
Total non-performing assets$48,338 $37,204 $50,526 $59,327 $72,502 
      
Non-accrual loans held for investment to total loans held for investment 0.25% 0.18% 0.21% 0.27% 0.32%
Total non-performing assets to total assets 0.17% 0.12% 0.16% 0.19% 0.21%
Allowance for credit losses on loans to non-accrual loans held for investment5.2x6.5x4.5x3.6x2.9x
      
Loans held for investment past due 90 days and still accruing$131 $30,664 $3,206 $6,031 $3,467 
Loans held for investment past due 90 days to total loans held for investment % 0.15% 0.01% 0.03% 0.02%
Loans held for sale past due 90 days and still accruing(1)(2)$ $4,877 $1,602 $3,865 $3,986 

(1)   Third quarter 2022 includes $1.3 million in non-accrual loans and $3.1 million in loans past due 90 days and still accruing associated to our insurance premium finance subsidiary that were transferred from loans held for investment to loans held for sale as of September 30, 2022.
(2)   Includes loans guaranteed by U.S. government agencies that were repurchased out of Ginnie Mae securities. Loans are recorded as loans held for sale and carried at fair value on the balance sheet. Interest on these past due loans accrues at the debenture rate guaranteed by the U.S. government.


TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)
      
 4th Quarter3rd Quarter2nd Quarter1st Quarter4th Quarter
  2022  2022 2022 2022  2021 
Interest income     
Interest and fees on loans$295,367 $282,473$218,290$187,657 $204,379 
Investment securities 16,210  15,002 14,665 17,302  11,780 
Interest bearing deposits in other banks 59,710  24,596 9,394$3,571 $3,733 
Total interest income 371,287  322,071 242,349 208,530  219,892 
Interest expense     
Deposits 96,150  60,317 20,566 13,630  14,513 
Short-term borrowings 13,449  10,011 4,859 758  771 
Long-term debt 14,088  12,663 11,393 10,595  10,576 
Total interest expense 123,687  82,991 36,818 24,983  25,860 
Net interest income 247,600  239,080 205,531 183,547  194,032 
Provision for credit losses 34,000  12,000 22,000 (2,000) (10,000)
Net interest income after provision for credit losses 213,600  227,080 183,531 185,547  204,032 
Non-interest income     
Service charges on deposit accounts 5,150  5,701 6,003 6,022  4,702 
Wealth management and trust fee income 3,442  3,631 4,051 3,912  3,793 
Brokered loan fees 2,655  3,401 4,133 3,970  5,678 
Servicing income 180  212 228 237  277 
Investment banking and trading income 11,937  7,812 11,126 4,179  6,456 
Net gain/(loss) on sale of loans held for sale (990)      
Gain on disposal of subsidiary 248,526       
Other 6,772  4,576 701 1,962  10,553 
Total non-interest income 277,672  25,333 26,242 20,282  31,459 
Non-interest expense     
Salaries and benefits 103,490  129,336 103,885 100,098  89,075 
Occupancy expense 17,030  9,433 8,874 8,885  8,769 
Marketing 10,623  8,282 8,506 4,977  4,286 
Legal and professional 37,493  16,775 11,288 10,302  12,673 
Communications and technology 20,434  18,470 15,649 14,700  16,490 
Federal Deposit Insurance Corporation insurance assessment 3,092  3,953 3,318 3,981  4,688 
Servicing-related expenses       25 
Other 20,928  10,798 12,783 10,149  10,643 
Total non-interest expense 213,090  197,047 164,303 153,092  146,649 
Income before income taxes 278,182  55,366 45,470 52,737  88,842 
Income tax expense 60,931  13,948 11,311 13,087  23,712 
Net income 217,251  41,418 34,159 39,650  65,130 
Preferred stock dividends 4,312  4,313 4,312 4,313  4,313 
Net income available to common shareholders$212,939 $37,105$29,847$35,337 $60,817 


TEXAS CAPITAL BANCSHARES, INC.
TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1)
(dollars in thousands)
 4th Quarter 2022 3rd Quarter 2022 2nd Quarter 2022 1st Quarter 2022 4th Quarter 2021
 Average
Balance
Income/
Expense
Yield/
Rate
 Average
Balance
Income/
Expense
Yield/
Rate
 Average
Balance
Income/
Expense
Yield/
Rate
 Average
Balance
Income/
Expense
Yield/
Rate
 Average
Balance
Income/
Expense
Yield/
Rate
Assets                   
Investment securities(2)$3,385,372$16,2101.70% $3,509,044$15,0021.58% $3,543,576$15,0651.60% $3,669,257$17,7431.91% $3,608,503$12,2251.34%
Interest bearing cash and cash equivalents 6,158,769 59,7103.85%  4,453,806 24,5962.19%  4,747,377 9,3940.79%  8,552,300 3,5710.17%  9,760,735 3,7330.15%
Loans held for sale 1,053,157 12,0644.54%  1,029,983 11,3164.36%  8,123 623.07%  7,633 1136.01%  8,348 512.41%
Loans held for investment, mortgage finance 4,279,367 43,7084.05%  5,287,531 52,7563.96%  5,858,599 49,9143.42%  5,732,901 43,4663.07%  7,901,534 57,9492.91%
Loans held for investment(3) 15,105,083 239,7416.30%  16,843,922 218,5125.15%  16,616,234 168,4074.07%  15,686,319 144.1343.73%  15,348,322 146,4363.79%
Less: Allowance for credit losses on loans 233,246    229,005    211,385    212,612    223,034  
Loans held for investment, net 19,151,204 283,4495.87%  21,902,448 271,2684.91%  22,263,448 218,3213.93%  21,206,608 187,6003.59%  23,026,822 204,3853.52%
Total earning assets 29,748,502 371,4334.89%  30,895,281 322,1824.10%  30,562,524 242,8423.16%  33,435,798 209.0272.54%  36,404,408 220,3942.40%
Cash and other assets 989,900    918,630    870,396    819,486    835,293  
Total assets$30,738,402   $31,813,911   $31,432,920   $34,255,284   $37,239,701  
                    
Liabilities and Stockholders’ Equity                   
Transaction deposits$1,105,466$4,9771.79% $1,444,964$5,2391.44% $1,671,729$3,9200.94% $2,432,687$3,9620.66% $3,007,337$4,6640.62%
Savings deposits 10,563,049 80,8013.03%  10,249,387 46,5551.80%  8,696,819 15,4620.71%  10,420,545 8,5830.33%  10,529,645 8,4190.32%
Time deposits 1,625,857 10,3722.53%  1,701,238 8,5231.99%  877,399 1,1840.54%  1,038,722 1,0850.42%  1,276,800 1,4300.44%
Total interest bearing deposits 13,294,372 96,1502.87%  13,395,589 60,3171.79%  11,245,947 20,5660.73%  13,891,954 13,6300.40%  14,813,782 14,5130.39%
Short-term borrowings 1,387,660 13,4493.84%  1,931,537 10,0112.06%  2,232,119 4,8590.87%  1,770,781 7580.17%  2,267,013 7710.13%
Long-term debt 931,107 14,0886.00%  921,707 12,6635.45%  929,616 11,3934.92%  929,005 10,5954.63%  928,307 10,5764.52%
Total interest bearing liabilities 15,613,139 123,6873.14%  16,248,833 82,9912.03%  14,407,682 36,8181.02%  16,591,740 24,9830.61%  18,009,102 25,8600.57%
Non-interest bearing deposits 11,642,969    12,214,531    13,747,876    14,235,749    15,804,061  
Other liabilities 426,543    305,554    227,701    243,141    238,833  
Stockholders’ equity 3,055,751    3,044,993    3,049,661    3,184,654    3,187,705  
Total liabilities and stockholders’ equity$30,738,402   $31,813,911   $31,432,920   $34,255,284   $37,239,701  
Net interest income $247,746   $239,191   $206,024   $184,044   $194,534 
Net interest margin  3.26%   3.05%   2.68%   2.23%   2.12%

(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.

 


INVESTOR CONTACT
Jocelyn Kukulka, 469.399.8544
jocelyn.kukulka@texascapitalbank.com

MEDIA CONTACT
Julia Monter, 469.399.8425
julia.monter@texascapitalbank.com

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