Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document
false0001077428TEXAS CAPITAL BANCSHARES INC/TX 0001077428 2020-01-22 2020-01-22 0001077428 us-gaap:CommonStockMember 2020-01-22 2020-01-22 0001077428 us-gaap:SeriesAPreferredStockMember 2020-01-22 2020-01-22
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 22, 2020
 
TEXAS CAPITAL BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
001-34657
75-2679109
(State or other jurisdiction of
incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification Number)
2000 McKinney Avenue, Suite 700, Dallas, Texas, U.S.A.
(Address of principal executive offices)
75201
(Zip Code)
Registrant's telephone number, including area code: (214) 932-6600
N/A
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, par value $0.01 per share
 
TCBI
 
Nasdaq Stock Market
6.50% Non-Cumulative Perpetual Preferred Stock Series A, par value $0.01 per share
 
TCBIP
 
Nasdaq Stock Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 




Item 2.02.
Results of Operations and Financial Condition.
(a)
On January 22, 2020, Texas Capital Bancshares, Inc. issued a press release and made a concurrent public presentation regarding its operating and financial results for its fiscal quarter and year ended December 31, 2019. A copy of the press release is attached hereto as Exhibit 99.1. A copy of the presentation is attached hereto as Exhibit 99.2.
The information in Item 2.02 of this report (including the exhibits hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.




Item 9.01.
Financial Statements and Exhibits.

(d)
Exhibits
99.1

99.2


Forward Looking Statements

This communication may be deemed to include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and the future performance of Texas Capital Bancshares, Inc. (“TCBI”). These statements are not historical in nature and can generally be identified by such words as “believe,” “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,” “could,” “projects,” “intend” and similar expressions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. 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, delays in completing the pending merger between TCBI and Independent Bank Group, Inc. (“IBTX”), the failure to obtain necessary regulatory approvals and shareholder approvals or to satisfy any of the other conditions to the merger on a timely basis or at all, the possibility that the anticipated benefits of the merger are not realized when expected or at all, 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, the inability to realize cost savings or improved revenues or to implement integration plans and other consequences associated with the proposed merger or 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, our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. The information contained in this communication speaks only as of its date. Except to the extent required by applicable law or regulation, TCBI disclaims 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.


Additional Information about the Merger and Where to Find It

In connection with the proposed merger between IBTX and TCBI, IBTX filed a registration statement on Form S-4 with the SEC on January 21, 2020 to register the shares of IBTX’s capital stock to be issued in connection with the merger. The registration statement includes a joint proxy statement/prospectus. The registration statement has not yet become effective. After the Form S-4 is effective, a definitive joint proxy statement/prospectus will be sent to the shareholders of IBTX and TCBI seeking their approval of the proposed transaction.





INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THESE DOCUMENTS DO AND WILL CONTAIN IMPORTANT INFORMATION ABOUT IBTX, TCBI AND THE PROPOSED TRANSACTION.

Investors and security holders may obtain copies of these documents free of charge through the website maintained by the SEC at www.sec.gov or from IBTX at its website, www.ibtx.com, or from TCBI at its website, www.texascapitalbank.com. Documents filed with the SEC by IBTX will be available free of charge by accessing the Investor Relations page of IBTX’s website at www.ibtx.com or, alternatively, by directing a request by telephone or mail to Independent Bank Group, Inc., 7777 Henneman Way, McKinney, Texas 75070, (972) 562-9004, and documents filed with the SEC by TCBI will be available free of charge by accessing TCBI’s website at www.texascapitalbank.com under the tab “About Us,” and then under the heading “Investor Relations” or, alternatively, by directing a request by telephone or mail to Texas Capital Bancshares, Inc., 2000 McKinney Avenue, Suite 700, Dallas, Texas 75201, (214) 932-6600.

Participants in the Solicitation

IBTX, TCBI and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of IBTX and TCBI in connection with the proposed transaction under the rules of the SEC. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the joint proxy statement/prospectus regarding the proposed transaction when it becomes available. Additional information about IBTX, and its directors and executive officers, may be found in IBTX’s definitive proxy statement relating to its 2019 Annual Meeting of Shareholders filed with the SEC on April 23, 2019, and other documents filed by IBTX with the SEC. Additional information about TCBI, and its directors and executive officers, may be found in TCBI’s definitive proxy statement relating to its 2019 Annual Meeting of Shareholders filed with the SEC on March 7, 2019, and other documents filed by TCBI with the SEC. These documents can be obtained free of charge from the sources described above.





SIGNATURE


Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:
January 22, 2020
TEXAS CAPITAL BANCSHARES, INC.
 
 
 
 
 
 
 
 
 
By:
 
/s/ Julie Anderson
 
 
 
 
 
Julie Anderson
Chief Financial Officer



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1 EARNINGS RELEASE)

Exhibit
Exhibit 99.1
402392983_tcbilogoa74.jpg
INVESTOR CONTACT
Julie Anderson, 214.932.6773
[email protected]
MEDIA CONTACT
Shannon Wherry, 469.399.8527
[email protected]
TEXAS CAPITAL BANCSHARES, INC. ANNOUNCES OPERATING RESULTS FOR 2019
DALLAS - January 22, 2020 - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the fourth quarter and full year of 2019.
“We are pleased with our 2019 results as we finished the year with a meaningful improvement in year-over-year EPS, despite headwinds from interest rate decreases, and a continued focus on proactively dealing with credit to strengthen our balance sheet and future earning power," said Keith Cargill, CEO. "Our results this year highlight the continued strength of our organic business model having gained meaningful market share over the past 7 years while more than tripling our balance sheet and more than doubling EPS. We are confident that our pending merger with Independent Bank Group will better position us to drive long-term shareholder value, improve client experience and invest even more effectively in our talent, technology and communities due to the scale advantage and complementary strengths we each offer."
Average mortgage finance loans, including mortgage correspondent aggregation ("MCA") loans held for sale ("LHS"), increased 7% on a linked quarter basis and increased 61% from the fourth quarter of 2018.
Average demand deposits and average total deposits increased 9% and 6%, respectively, on a linked quarter basis and increased 47% and 35%, respectively from the fourth quarter of 2018.
Average loans held for investment ("LHI"), excluding mortgage finance loans, decreased 1% on a linked quarter basis and increased less than 1% from the fourth quarter of 2018, reflecting planned reductions in our leveraged lending and energy balances.
Net income and EPS for full year 2019 both increased 7% compared to full year 2018.
FINANCIAL SUMMARY
(Dollars and shares in thousands)
 
2019
 
2018
 
% Change
ANNUAL OPERATING RESULTS
 
 
 
 
 
Net income
$
322,866

 
$
300,824

 
7
 %
Net income available to common stockholders
$
313,116

 
$
291,074

 
8
 %
Diluted EPS
$
6.21

 
$
5.79

 
7
 %
Diluted shares
50,419

 
50,273

 
 %
ROA
1.04
%
 
1.19
%
 
 
ROE
12.38
%
 
13.14
%
 
 
QUARTERLY OPERATING RESULTS
 
 
 
 
 
Net income
$
73,917

 
$
71,891

 
3
 %
Net income available to common stockholders
$
71,480

 
$
69,454

 
3
 %
Diluted EPS
$
1.42

 
$
1.38

 
3
 %
Diluted shares
50,462

 
50,333

 
 %
ROA
0.85
%
 
1.09
%
 
 
ROE
10.68
%
 
11.82
%
 
 
BALANCE SHEET
 
 
 
 
 
LHS
$
2,577,134

 
$
1,969,474

 
31
 %
LHI, mortgage finance
8,169,849

 
5,877,524

 
39
 %
LHI
16,476,413

 
16,690,550

 
(1
)%
Total LHI
24,646,262

 
22,568,074

 
9
 %
Total loans
27,223,396

 
24,537,548

 
11
 %
Total assets
32,548,069

 
28,257,767

 
15
 %
Demand deposits
9,438,459

 
7,317,161

 
29
 %
Total deposits
26,478,593

 
20,606,113

 
28
 %
Stockholders’ equity
2,832,258

 
2,500,394

 
13
 %





DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income of $322.9 million and net income available to common stockholders of $313.1 million for the year ended December 31, 2019, compared to net income of $300.8 million and net income available to common stockholders of $291.1 million for the year ended December 31, 2018. For the fourth quarter of 2019, net income was $73.9 million and net income available to common stockholders was $71.5 million, compared to net income of $71.9 million and net income available to common stockholders of $69.5 million for the same period in 2018. On a fully diluted basis, earnings per common share were $6.21 for the year ended December 31, 2019 compared to $5.79 for the same period in 2018. Diluted earnings per common share were $1.42 for the quarter ended December 31, 2019 compared to $1.38 for the same period of 2018. The fourth quarter of 2019 includes $1.3 million, or $.02 per common share, of merger-related expenses.
Return on common equity ("ROE") was 12.38 percent and return on average assets ("ROA") was 1.04 percent for the year ended December 31, 2019, compared to 13.14 percent and 1.19 percent, respectively, for the year ended December 31, 2018. ROE was 10.68 percent and ROA was 0.85 percent for the fourth quarter of 2019, compared to 13.22 percent and 1.06 percent, respectively, for the third quarter of 2019 and 11.82 percent and 1.09 percent, respectively, for the fourth quarter of 2018. The linked quarter decreases in ROE and ROA for the fourth quarter of 2019 resulted primarily from increases in non-interest expense and provision for credit losses, as well as from decreases in net interest and non-interest income.
Net interest income was $248.4 million for the fourth quarter of 2019, compared to $252.2 million for the third quarter of 2019 and $240.7 million for the fourth quarter of 2018. The linked quarter decrease is due primarily to decreases in loan yields and the year over year increase is primarily due to growth in total loans, offset by decreases in loan yields. Net interest margin for the fourth quarter of 2019 was 2.95 percent, a decrease of 21 basis points from the third quarter of 2019 and a decrease of 83 basis points from the fourth quarter of 2018. LHI, excluding mortgage finance loans, yields were down 37 basis points from the third quarter of 2019, and were down 56 basis points compared to the fourth quarter of 2018. Mortgage finance, excluding MCA, yields for the fourth quarter of 2019 decreased 18 basis points compared to the third quarter of 2019 and decreased 54 basis points compared to the fourth quarter of 2018. Total cost of deposits for the fourth quarter of 2019 decreased 22 basis points to 0.99 percent compared to 1.21 percent for the third quarter of 2019, and decreased 18 basis points from 1.17 percent for the fourth quarter of 2018.
Average LHI, excluding mortgage finance loans, for the year ended December 31, 2019 were $16.8 billion, an increase of $728.9 million, or 5 percent, from the same period in 2018. Average LHI, excluding mortgage finance loans, for the fourth quarter of 2019 were $16.7 billion, a decrease of $234.1 million, or 1 percent, from the third quarter of 2019 and an increase of $23.7 million, less than 1 percent, from the fourth quarter of 2018. The linked quarter decrease in average LHI, excluding mortgage finance loans, reflects slower loan growth and planned reductions in our leveraged lending and energy balances. Average total mortgage finance loans, including MCA loans, for the fourth quarter of 2019 were $11.4 billion, an increase of $765.4 million, or 7 percent, from the third quarter of 2019 and an increase of $4.3 billion, or 61 percent, from the fourth quarter of 2018. The linked quarter and year-over-year increases in total mortgage finance loans were due to increases in volumes from continued lower long-term interest rates.
Average total deposits for the year ended December 31, 2019 were $24.7 billion, an increase of $4.4 billion, or 22 percent, from the same period in 2018. Average demand deposits for the year ended December 31, 2019 were $9.0 billion, an increase of $1.1 billion, or 14 percent, from the same period in December 31, 2018. Average total deposits for the fourth quarter of 2019 increased $1.7 billion, or 6 percent, from the third quarter of 2019 and increased $7.4 billion, or 35 percent, from the fourth quarter of 2018. Average demand deposits for the fourth quarter of 2019 increased $941.5 million, or 9 percent, to $10.9 billion from $10.0 billion for the third quarter of 2019, and increased $3.5 billion, or 47 percent, from the fourth quarter of 2018.
We recorded a $17.0 million provision for credit losses for the fourth quarter of 2019 compared to $11.0 million for the third quarter of 2019 and $35.0 million for the fourth quarter of 2018. The provision for the fourth quarter of 2019 was driven by the consistent application of our methodology. The linked quarter increase in the provision resulted from an increase in non-performing assets partially offset by a decline in charge-offs, while the year-over-year decrease resulted from decreases in charge-offs and LHI, excluding mortgage finance, balances. The total allowance for credit losses at December 31, 2019 increased to 0.83 percent of total LHI, compared to 0.81 percent at September 30, 2019 and decreased from 0.90 percent at December 31, 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") increased in the fourth quarter of 2019 compared to the third quarter of 2019 and fourth quarter of 2018, primarily related to our energy and leveraged lending portfolios. The ratio of NPAs to total LHI plus other real estate owned ("OREO") for the fourth quarter of 2019 was 0.91 percent, compared to 0.49 percent for the third quarter of 2019 and 0.36 percent for the fourth quarter of 2018. Net charge-offs for the fourth quarter of 2019 were $12.8 million compared to $36.9 million for the third quarter of 2019 and $32.6 million for the fourth quarter of 2018. Of the $12.8 million charge-offs for the fourth quarter of 2019, $588,000 related to energy and $6.2 million related to leveraged lending. For the fourth quarter of 2019, net charge-offs were 0.21 percent of average total LHI, compared to 0.58 percent for the third quarter of 2019 and 0.60 percent for the same period in 2018.

2




Non-interest income decreased $2.5 million, or 13 percent, during the fourth quarter of 2019 compared to the third quarter of 2019, and increased $2.5 million, or 16 percent, compared to the fourth quarter of 2018. The linked quarter decrease is primarily related to decreases in net gain/loss on sale of LHS and other non-interest income, partially offset by increases in servicing income and swap fees. The year-over-year increase is primarily related to increases in brokered loan fees and servicing income, partially offset by a decrease in other non-interest income.
Non-interest expense for the fourth quarter of 2019 increased $9.3 million, or 6 percent, compared to the third quarter of 2019, and increased $28.8 million, or 22 percent, compared to the fourth quarter of 2018. The linked quarter increase in non-interest expense was primarily related to increases in legal and professional expense and communications and technology expense, partially offset by a decrease in servicing related expenses. The year-over-year increase was primarily due to increases in salaries and employee benefits, legal and professional expense, communications and technology expense and marketing expense. The linked quarter and year-over-year increases in legal and professional expense included $1.3 million in merger-related expenses, as well as increases related to investment in Bask Bank and new commercial loan verticals, specifically $6.0 million that is not recurring.
Stockholders’ equity increased by 13 percent from $2.5 billion at December 31, 2018 to $2.8 billion at December 31, 2019, primarily due to the retention of net income. Texas Capital Bank is well capitalized under regulatory guidelines. At December 31, 2019, our ratio of tangible common equity to total tangible assets was 8.2 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. On December 9, 2019, Texas Capital Bancshares, Inc. (“TCBI”), announced that it had entered into an Agreement and Plan of Merger with Independent Bank Group, Inc. (“IBTX”), which provides that, upon the terms and subject to the conditions set forth therein, TCBI will merge with and into IBTX (the “Merger”), with IBTX as the surviving entity in the Merger. For additional information see the related filings by TCBI with the Securities and Exchange Commission (“SEC”).
Forward Looking Statements
This communication may be deemed to include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and the future performance of TCBI. These statements are not historical in nature and can generally be identified by such words as “believe,” “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,” “could,” “projects,” “intend” and similar expressions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. 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, delays in completing the pending merger between TCBI and IBTX, the failure to obtain necessary regulatory approvals and shareholder approvals or to satisfy any of the other conditions to the merger on a timely basis or at all, the possibility that the anticipated benefits of the merger are not realized when expected or at all, 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, the inability to realize cost savings or improved revenues or to implement integration plans and other consequences associated with the proposed merger or 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, our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. The information contained in this communication speaks only as of its date. Except to the extent required by applicable law or regulation, TCBI disclaims 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.
Additional Information About the Merger and Where to Find It
In connection with the proposed merger between IBTX and TCBI, IBTX filed a registration statement on Form S-4 with the SEC on January 21, 2020 to register the shares of IBTX’s capital stock to be issued in connection with the merger. The registration statement includes a joint proxy statement/prospectus. The registration statement has not yet become effective. After the Form S-4 is effective, a definitive joint proxy statement/prospectus will be sent to the shareholders of IBTX and TCBI seeking their approval of the proposed transaction.

3




INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THESE DOCUMENTS DO AND WILL CONTAIN IMPORTANT INFORMATION ABOUT IBTX, TCBI AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain copies of these documents free of charge through the website maintained by the SEC at www.sec.gov or from IBTX at its website, www.ibtx.com, or from TCBI at its website, www.texascapitalbank.com. Documents filed with the SEC by IBTX will be available free of charge by accessing the Investor Relations page of IBTX’s website at www.ibtx.com or, alternatively, by directing a request by telephone or mail to Independent Bank Group, Inc., 7777 Henneman Way, McKinney, Texas 75070, (972) 562-9004, and documents filed with the SEC by TCBI will be available free of charge by accessing TCBI’s website at www.texascapitalbank.com under the tab “About Us,” and then under the heading “Investor Relations” or, alternatively, by directing a request by telephone or mail to Texas Capital Bancshares, Inc., 2000 McKinney Avenue, Suite 700, Dallas, Texas 75201, (214) 932-6600.
Participants in the Solicitation
IBTX, TCBI and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of IBTX and TCBI in connection with the proposed transaction under the rules of the SEC. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the joint proxy statement/prospectus regarding the proposed transaction when it becomes available. Additional information about IBTX, and its directors and executive officers, may be found in IBTX’s definitive proxy statement relating to its 2019 Annual Meeting of Shareholders filed with the SEC on April 23, 2019, and other documents filed by IBTX with the SEC. Additional information about TCBI, and its directors and executive officers, may be found in TCBI’s definitive proxy statement relating to its 2019 Annual Meeting of Shareholders filed with the SEC on March 7, 2019, and other documents filed by TCBI with the SEC. These documents can be obtained free of charge from the sources described above.

4




TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
 
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
4th Quarter
 
2019
2019
2019
2019
2018
CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
 
Interest income
$
337,757

$
355,101

$
346,893

$
325,561

$
321,718

Interest expense
89,372

102,933

103,340

89,947

81,045

Net interest income
248,385

252,168

243,553

235,614

240,673

Provision for credit losses
17,000

11,000

27,000

20,000

35,000

Net interest income after provision for credit losses
231,385

241,168

216,553

215,614

205,673

Non-interest income
17,761

20,301

24,364

30,014

15,280

Non-interest expense
158,690

149,370

141,561

140,378

129,862

Income before income taxes
90,456

112,099

99,356

105,250

91,091

Income tax expense
16,539

23,958

21,387

22,411

19,200

Net income
73,917

88,141

77,969

82,839

71,891

Preferred stock dividends
2,437

2,438

2,437

2,438

2,437

Net income available to common stockholders
$
71,480

$
85,703

$
75,532

$
80,401

$
69,454

 
 
 
 
 
 
Diluted EPS
$
1.42

$
1.70

$
1.50

$
1.60

$
1.38

Diluted shares
50,461,723

50,416,402

50,383,870

50,345,399

50,333,412

CONSOLIDATED BALANCE SHEET DATA
 
 
 
 
 
Total assets
$
32,548,069

$
33,526,437

$
29,970,384

$
28,383,111

$
28,257,767

LHI
16,476,413

16,772,824

16,924,535

17,061,590

16,690,550

LHI, mortgage finance
8,169,849

7,951,432

7,415,363

6,299,710

5,877,524

LHS
2,577,134

2,674,225

1,057,586

1,901,637

1,969,474

Liquidity assets(1)
4,263,766

4,993,185

3,480,902

2,154,155

2,865,874

Investment securities
239,871

238,022

240,851

230,749

120,216

Demand deposits
9,438,459

10,289,572

7,685,340

6,743,607

7,317,161

Total deposits
26,478,593

27,413,303

22,999,077

20,650,127

20,606,113

Other borrowings
2,541,766

2,639,967

3,607,234

4,497,892

4,541,174

Subordinated notes
282,129

282,038

281,948

281,858

281,767

Long-term debt
113,406

113,406

113,406

113,406

113,406

Stockholders’ equity
2,832,258

2,757,433

2,668,452

2,581,942

2,500,394

 
 
 
 
 
 
End of period shares outstanding
50,337,741

50,317,654

50,297,552

50,263,611

50,200,710

Book value
$
53.29

$
51.82

$
50.07

$
48.38

$
46.82

Tangible book value(2)
$
52.93

$
51.46

$
49.71

$
48.02

$
46.45

SELECTED FINANCIAL RATIOS
 
 
 
 
 
Net interest margin
2.95
%
3.16
%
3.41
%
3.73
%
3.78
%
Return on average assets
0.85
%
1.06
%
1.05
%
1.26
%
1.09
%
Return on average common equity
10.68
%
13.22
%
12.20
%
13.58
%
11.82
%
Non-interest income to average earning assets
0.21
%
0.25
%
0.34
%
0.47
%
0.24
%
Efficiency ratio(3)
59.6
%
54.8
%
52.8
%
52.8
%
50.7
%
Efficiency ratio, adjusted(4)
57.7
%
51.2
%
49.5
%
50.1
%
48.7
%
Non-interest expense to average earning assets
1.87
%
1.86
%
1.97
%
2.21
%
2.03
%
Tangible common equity to total tangible assets(5)
8.2
%
7.7
%
8.3
%
8.5
%
8.3
%
Common Equity Tier 1
8.9
%
8.6
%
8.7
%
8.6
%
8.6
%
Tier 1 capital
9.8
%
9.5
%
9.6
%
9.6
%
9.5
%
Total capital
11.4
%
11.1
%
11.3
%
11.4
%
11.3
%
Leverage
8.4
%
8.6
%
9.2
%
10.0
%
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)
Non-interest expense, excluding deposit-related marketing fees and servicing related expenses, divided by the sum of net interest income and non-interest income, net of deposit-related marketing fees and servicing related expenses. Deposit-related marketing fees totaled $9.4 million, $11.9 million, $11.6 million, $9.1 million and $7.7 million for the fourth, third, second and first quarters of 2019, as well as for the fourth quarter of 2018, respectively.
(5)
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.

5




TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
 
December 31, 2019
December 31, 2018
%
Change
Assets
 
 
 
Cash and due from banks
$
161,817

$
214,191

(24
)%
Interest-bearing deposits
4,233,766

2,815,684

50
 %
Federal funds sold and securities purchased under resale agreements
30,000

50,190

(40
)%
Securities, available-for-sale
239,871

120,216

100
 %
LHS ($2,571.3 million and $1,969.2 million at December 2019 and 2018, respectively, at fair value)
2,577,134

1,969,474

31
 %
LHI, mortgage finance
8,169,849

5,877,524

39
 %
LHI (net of unearned income)
16,476,413

16,690,550

(1
)%
Less: Allowance for loan losses
195,047

191,522

2
 %
LHI, net
24,451,215

22,376,552

9
 %
Mortgage servicing rights, net
64,904

42,474

53
 %
Premises and equipment, net
31,212

23,802

31
 %
Accrued interest receivable and other assets
740,051

626,614

18
 %
Goodwill and intangibles, net
18,099

18,570

(3
)%
Total assets
$
32,548,069

$
28,257,767

15
 %
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
Liabilities:
 
 
 
Deposits:
 
 
 
Non-interest bearing
$
9,438,459

$
7,317,161

29
 %
Interest bearing
17,040,134

13,288,952

28
 %
Total deposits
26,478,593

20,606,113

28
 %
 
 
 


Accrued interest payable
12,760

20,675

(38
)%
Other liabilities
287,157

194,238

48
 %
Federal funds purchased and repurchase agreements
141,766

641,174

(78
)%
Other borrowings
2,400,000

3,900,000

(38
)%
Subordinated notes, net
282,129

281,767

 %
Trust preferred subordinated debentures
113,406

113,406

 %
Total liabilities
29,715,811

25,757,373

15
 %
 
 
 
 
Stockholders’ equity:
 
 
 
Preferred stock, $.01 par value, $1,000 liquidation value:
 
 
 
Authorized shares - 10,000,000
 
 
 
Issued shares - 6,000,000 shares issued at December 31, 2019 and 2018
150,000

150,000

 %
Common stock, $.01 par value:
 
 
 
Authorized shares - 100,000,000
 
 
 
Issued shares - 50,338,158 and 50,201,127 at December 31, 2019 and 2018, respectively
503

502

 %
Additional paid-in capital
978,205

967,890

1
 %
Retained earnings
1,694,608

1,381,492

23
 %
Treasury stock (shares at cost: 417 at December 31, 2019 and 2018)
(8
)
(8
)
 %
Accumulated other comprehensive income, net of taxes
8,950

518

1,628
 %
Total stockholders’ equity
2,832,258

2,500,394

13
 %
Total liabilities and stockholders’ equity
$
32,548,069

$
28,257,767

15
 %

6




TEXAS CAPITAL BANCSHARES, INC.
 
 
 
 
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
 
 
 
(Dollars in thousands except per share data)
 
 
 
 
 
Three Months Ended December 31,
Year Ended December 31,
 
2019
2018
2019
2018
Interest income
 
 
 
 
Interest and fees on loans
$
312,147

$
310,470

$
1,284,036

$
1,124,970

Investment securities
2,618

1,274

8,654

2,834

Federal funds sold and securities purchased under resale agreements
439

984

1,529

3,792

Interest-bearing deposits in other banks
22,553

8,990

71,093

32,597

Total interest income
337,757

321,718

1,365,312

1,164,193

Interest expense
 
 
 
 
Deposits
70,987

61,773

293,537

185,116

Federal funds purchased
1,319

2,097

11,872

6,531

Other borrowings
11,712

11,726

58,393

36,207

Subordinated notes
4,191

4,191

16,764

16,764

Trust preferred subordinated debentures
1,163

1,258

5,026

4,715

Total interest expense
89,372

81,045

385,592

249,333

Net interest income
248,385

240,673

979,720

914,860

Provision for credit losses
17,000

35,000

75,000

87,000

Net interest income after provision for credit losses
231,385

205,673

904,720

827,860

Non-interest income
 
 
 
 
Service charges on deposit accounts
2,785

3,168

11,320

12,787

Wealth management and trust fee income
2,342

2,152

8,810

8,148

Brokered loan fees
8,645

5,408

29,738

22,532

Servicing income
4,030

2,861

13,439

18,307

Swap fees
1,559

1,356

4,387

5,625

Net gain/(loss) on sale of LHS
(7,757
)
(8,087
)
(20,259
)
(15,934
)
Other
6,157

8,422

45,005

26,559

Total non-interest income
17,761

15,280

92,440

78,024

Non-interest expense
 
 
 
 
Salaries and employee benefits
80,262

69,500

315,080

291,768

Net occupancy expense
9,075

7,390

32,989

30,342

Marketing
12,807

10,208

53,355

39,335

Legal and professional
22,402

13,042

53,830

42,990

Communications and technology
13,801

8,845

44,826

30,056

FDIC insurance assessment
5,613

5,423

20,093

24,307

Servicing related expenses
2,960

2,555

22,573

14,934

Other
11,770

12,899

47,253

51,364

Total non-interest expense
158,690

129,862

589,999

525,096

Income before income taxes
90,456

91,091

407,161

380,788

Income tax expense
16,539

19,200

84,295

79,964

Net income
73,917

71,891

322,866

300,824

Preferred stock dividends
2,437

2,437

9,750

9,750

Net income available to common stockholders
$
71,480

$
69,454

$
313,116

$
291,074

 
 
 
 
 
Basic earnings per common share
$
1.42

$
1.38

$
6.23

$
5.83

Diluted earnings per common share
$
1.42

$
1.38

$
6.21

$
5.79



7




TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
 
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
4th Quarter
 
2019
2019
2019
2019
2018
Allowance for loan losses:
 
 
 
 
 
Beginning balance
$
190,138

$
214,572

$
208,573

$
191,522

$
190,306

Loans charged-off:
 
 
 
 
 
Commercial
14,280

37,760

20,053

4,865

34,419

Real estate
485


177



Construction





Consumer





Leases

19




Total charge-offs
14,765

37,779

20,230

4,865

34,419

Recoveries:
 
 
 
 
 
Commercial
1,953

870

201

266

1,399

Real estate




26

Construction





Consumer
9

27

23

10

360

Leases
1

9


1

1

Total recoveries
1,963

906

224

277

1,786

Net charge-offs
12,802

36,873

20,006

4,588

32,633

Provision for loan losses
17,711

12,439

26,005

21,639

33,849

Ending balance
$
195,047

$
190,138

$
214,572

$
208,573

$
191,522

 
 
 
 
 
 
Allowance for off-balance sheet credit losses:
 
 
 
 
 
Beginning balance
$
9,351

$
10,790

$
9,795

$
11,434

$
10,283

Provision for off-balance sheet credit losses
(711
)
(1,439
)
995

(1,639
)
1,151

Ending balance
$
8,640

$
9,351

$
10,790

$
9,795

$
11,434

 
 
 
 
 
 
Total allowance for credit losses
$
203,687

$
199,489

$
225,362

$
218,368

$
202,956

 
 
 
 
 
 
Total provision for credit losses
$
17,000

$
11,000

$
27,000

$
20,000

$
35,000

 
 
 
 
 
 
Allowance for loan losses to LHI
0.79
%
0.77
%
0.88
%
0.89
%
0.85
%
Allowance for loan losses to average LHI
0.79
%
0.76
%
0.90
%
0.96
%
0.88
%
Net charge-offs to average LHI(1)
0.21
%
0.58
%
0.34
%
0.09
%
0.60
%
Net charge-offs to average LHI for last twelve months(1)
0.31
%
0.41
%
0.27
%
0.36
%
0.37
%
Total provision for credit losses to average LHI(1)
0.27
%
0.17
%
0.45
%
0.37
%
0.64
%
Total allowance for credit losses to LHI
0.83
%
0.81
%
0.93
%
0.93
%
0.90
%
(1)
Interim period ratios are annualized.


8




TEXAS CAPITAL BANCSHARES, INC.
 
 
 
 
 
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS (UNAUDITED)
(Dollars in thousands)
 
 
 
 
 
 
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
4th Quarter
 
2019
2019
2019
2019
2018
 
 
 
 
 
 
Non-performing assets (NPAs):
 
 
 
 
 
Non-accrual loans
$
225,384

$
120,686

$
114,084

$
133,690

$
80,375

Other real estate owned (OREO)




79

Total LHI NPAs
$
225,384

$
120,686

$
114,084

$
133,690

$
80,454

 
 
 
 
 
 
Non-accrual loans to LHI
0.91
%
0.49
%
0.47
%
0.57
%
0.36
%
Total LHI NPAs to LHI plus OREO
0.91
%
0.49
%
0.47
%
0.57
%
0.36
%
Total LHI NPAs to earning assets
0.71
%
0.37
%
0.39
%
0.49
%
0.29
%
Allowance for loan losses to non-accrual loans
.9x

1.6x

1.9x

1.6x

2.4x

 
 
 
 
 
 
Loans past due 90 days and still accruing(1)
$
17,584

$
29,648

$
15,212

$
12,245

$
9,353

Loans past due 90 days to LHI
0.07
%
0.12
%
0.06
%
0.05
%
0.04
%
LHS past due 90 days and still accruing(2)
$
8,207

$
9,187

$
11,665

$
13,693

$
16,829


(1)
At December 31, 2019, loans past due 90 days and still accruing includes premium finance loans of $8.5 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.

9





TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands)
 
 
 
 
 
 
 
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
4th Quarter
 
2019
2019
2019
2019
2018
Interest income
 
 
 
 
 
Interest and fees on loans
$
312,147

$
329,344

$
329,842

$
312,703

$
310,470

Investment securities
2,618

2,316

2,260

1,460

1,274

Federal funds sold and securities purchased under resale agreements
439

554

157

379

984

Interest-bearing deposits in other banks
22,553

22,887

14,634

11,019

8,990

Total interest income
337,757

355,101

346,893

325,561

321,718

Interest expense
 
 
 
 
 
Deposits
70,987

80,967

72,529

69,054

61,773

Federal funds purchased
1,319

1,835

5,202

3,516

2,097

Other borrowings
11,712

14,703

20,124

11,854

11,726

Subordinated notes
4,191

4,191

4,191

4,191

4,191

Trust preferred subordinated debentures
1,163

1,237

1,294

1,332

1,258

Total interest expense
89,372

102,933

103,340

89,947

81,045

Net interest income
248,385

252,168

243,553

235,614

240,673

Provision for credit losses
17,000

11,000

27,000

20,000

35,000

Net interest income after provision for credit losses
231,385

241,168

216,553

215,614

205,673

Non-interest income
 
 
 
 
 
Service charges on deposit accounts
2,785

2,707

2,849

2,979

3,168

Wealth management and trust fee income
2,342

2,330

2,129

2,009

2,152

Brokered loan fees
8,645

8,691

7,336

5,066

5,408

Servicing income
4,030

3,549

3,126

2,734

2,861

Swap fees
1,559

1,196

601

1,031

1,356

Net gain/(loss) on sale of LHS
(7,757
)
(6,011
)
(5,986
)
(505
)
(8,087
)
Other
6,157

7,839

14,309

16,700

8,422

Total non-interest income
17,761

20,301

24,364

30,014

15,280

Non-interest expense
 
 
 
 
 
Salaries and employee benefits
80,262

80,106

76,889

77,823

69,500

Net occupancy expense
9,075

8,125

7,910

7,879

7,390

Marketing
12,807

14,753

14,087

11,708

10,208

Legal and professional
22,402

11,394

10,004

10,030

13,042

Communications and technology
13,801

10,805

11,022

9,198

8,845

FDIC insurance assessment
5,613

5,220

4,138

5,122

5,423

Servicing related expenses
2,960

8,165

6,066

5,382

2,555

Other
11,770

10,802

11,445

13,236

12,899

Total non-interest expense
158,690

149,370

141,561

140,378

129,862

Income before income taxes
90,456

112,099

99,356

105,250

91,091

Income tax expense
16,539

23,958

21,387

22,411

19,200

Net income
73,917

88,141

77,969

82,839

71,891

Preferred stock dividends
2,437

2,438

2,437

2,438

2,437

Net income available to common shareholders
$
71,480

$
85,703

$
75,532

$
80,401

$
69,454



10




TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED DAILY AVERAGE BALANCES, AVERAGE YIELDS AND RATES - UNAUDITED
(Dollars in thousands)
 
4th Quarter 2019
 
3rd Quarter 2019
 
2nd Quarter 2019
 
1st Quarter 2019
 
4th 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
$
40,904

$
693

6.72
%
 
$
39,744

$
357

3.56
%
 
$
38,887

$
287

2.96
%
 
$
30,625

$
274

3.62
%
 
$
23,977

$
259

4.29
%
Investment securities - Non-taxable(2)
197,591

2,437

4.89
%
 
200,090

2,480

4.92
%
 
192,115

2,498

5.21
%
 
114,341

1,501

5.33
%
 
93,394

1,285

5.46
%
Federal funds sold and securities purchased under resale agreements
102,320

439

1.70
%
 
100,657

554

2.18
%
 
28,436

157

2.22
%
 
63,652

379

2.41
%
 
173,654

984

2.25
%
Interest-bearing deposits in other banks
5,387,000

22,553

1.66
%
 
4,184,217

22,887

2.17
%
 
2,491,827

14,634

2.36
%
 
1,823,106

11,019

2.45
%
 
1,585,763

8,990

2.25
%
LHS, at fair value
3,567,836

33,411

3.72
%
 
2,555,269

26,206

4.07
%
 
2,494,883

27,607

4.44
%
 
2,122,302

25,303

4.84
%
 
2,049,395

24,407

4.72
%
LHI, mortgage finance loans
7,870,888

63,114

3.18
%
 
8,118,025

68,660

3.36
%
 
7,032,963

63,523

3.62
%
 
4,931,879

46,368

3.81
%
 
5,046,540

47,305

3.72
%
LHI(1)(2)
16,667,259

216,686

5.16
%
 
16,901,391

235,557

5.53
%
 
16,781,733

239,829

5.73
%
 
16,866,456

242,155

5.82
%
 
16,643,559

239,995

5.72
%
Less allowance for loan
       losses
189,353



 
212,898



 
206,654



 
192,122



 
182,814



LHI, net of allowance
24,348,794

279,800

4.56
%
 
24,806,518

304,217

4.87
%
 
23,608,042

303,352

5.15
%
 
21,606,213

288,523

5.42
%
 
21,507,285

287,300

5.30
%
Total earning assets
33,644,445

339,333

4.00
%
 
31,886,495

356,701

4.44
%
 
28,854,190

348,535

4.84
%
 
25,760,239

326,999

5.15
%
 
25,433,468

323,225

5.04
%
Cash and other assets
974,866

 
 
 
1,000,117

 
 
 
940,793

 
 
 
894,797

 
 
 
828,156

 
 
Total assets
$
34,619,311

 
 
 
$
32,886,612

 
 
 
$
29,794,983

 
 
 
$
26,655,036

 
 
 
$
26,261,624

 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transaction deposits
$
3,817,294

$
16,428

1.71
%
 
$
3,577,905

$
18,442

2.04
%
 
$
3,475,404

$
18,037

2.08
%
 
$
3,263,976

$
16,001

1.99
%
 
$
3,233,960

$
15,150

1.86
%
Savings deposits
11,111,326

40,603

1.45
%
 
10,331,078

45,586

1.75
%
 
8,896,537

40,994

1.85
%
 
8,751,200

41,673

1.93
%
 
8,354,332

36,913

1.75
%
Time deposits
2,453,655

13,956

2.26
%
 
2,706,434

16,939

2.48
%
 
2,227,460

13,498

2.43
%
 
2,010,476

11,380

2.30
%
 
1,886,016

9,710

2.04
%
Total interest bearing deposits
17,382,275

70,987

1.62
%
 
16,615,417

80,967

1.93
%
 
14,599,401

72,529

1.99
%
 
14,025,652

69,054

2.00
%
 
13,474,308

61,773

1.82
%
Other borrowings
2,822,465

13,031

1.83
%
 
2,896,477

16,538

2.27
%
 
4,018,231

25,326

2.53
%
 
2,412,254

15,370

2.58
%
 
2,290,520

13,823

2.39
%
Subordinated notes
282,074

4,191

5.89
%
 
281,979

4,191

5.90
%
 
281,889

4,191

5.96
%
 
281,799

4,191

6.03
%
 
281,708

4,191

5.90
%
Trust preferred subordinated debentures
113,406

1,163

4.07
%
 
113,406

1,237

4.33
%
 
113,406

1,294

4.58
%
 
113,406

1,332

4.76
%
 
113,406

1,258

4.40
%
Total interest bearing liabilities
20,600,220

89,372

1.72
%
 
19,907,279

102,933

2.05
%
 
19,012,927

103,340

2.18
%
 
16,833,111

89,947

2.17
%
 
16,159,942

81,045

1.99
%
Demand deposits
10,933,887

 
 
 
9,992,406

 
 
 
7,929,266

 
 
 
7,047,120

 
 
 
7,462,392

 
 
Other liabilities
278,964

 
 
 
264,506

 
 
 
220,305

 
 
 
223,142

 
 
 
157,278

 
 
Stockholders’ equity
2,806,240

 
 
 
2,722,421

 
 
 
2,632,485

 
 
 
2,551,663

 
 
 
2,482,012

 
 
Total liabilities and stockholders’ equity
$
34,619,311

 
 
 
$
32,886,612

 
 
 
$
29,794,983

 
 
 
$
26,655,036

 
 
 
$
26,261,624

 
 
Net interest income(2)
 
$
249,961

 
 
 
$
253,768

 
 
 
$
245,195

 
 
 
$
237,052

 
 
 
$
242,180

 
Net interest margin
 


2.95
%
 
 
 
3.16
%
 
 
 
3.41
%
 
 
 
3.73
%
 
 
 
3.78
%
(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.

11

(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2 EARNINGS PRESENTATION)

q42019earningswebcbb5
Exhibit 99.2 TCBI Q4 2019 Earnings January 22, 2020


 
Forward Looking Statements This communication may be deemed to include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and the future performance of Texas Capital Bancshares, Inc. (“TCBI”). These statements are not historical in nature and can generally be identified by such words as “believe,” “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,” “could,” “projects,” “intend” and similar expressions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. 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, delays in completing the pending merger between TCBI and Independent Bank Group, Inc. (“IBTX”), the failure to obtain necessary regulatory approvals and shareholder approvals or to satisfy any of the other conditions to the merger on a timely basis or at all, the possibility that the anticipated benefits of the merger are not realized when expected or at all, 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, the inability to realize cost savings or improved revenues or to implement integration plans and other consequences associated with the proposed merger or 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. The information contained in this communication speaks only as of its date. Except to the extent required by applicable law or regulation, TCBI disclaims 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. Further information regarding TCBI, IBTX and factors which could affect the forward-looking statements contained herein can be found in TCBI’s Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and its other filings with the Securities and Exchange Commission (“SEC”), and in IBTX’s Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and its other filings with the SEC. 2


 
Additional Statements Additional Information about the Merger and Where to Find It In connection with the proposed merger between IBTX and TCBI, IBTX filed a registration statement on Form S-4 with the SEC on January 21, 2020 to register the shares of IBTX’s capital stock to be issued in connection with the merger. The registration statement includes a joint proxy statement/prospectus. The registration statement has not yet become effective. After the Form S-4 is effective, a definitive joint proxy statement/prospectus will be sent to the shareholders of IBTX and TCBI seeking their approval of the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THESE DOCUMENTS DO AND WILL CONTAIN IMPORTANT INFORMATION ABOUT IBTX, TCBI AND THE PROPOSED TRANSACTION. Investors and security holders may obtain copies of these documents free of charge through the website maintained by the SEC at www.sec.gov or from IBTX at its website, www.ibtx.com, or from TCBI at its website, www.texascapitalbank.com. Documents filed with the SEC by IBTX will be available free of charge by accessing the Investor Relations page of IBTX’s website at www.ibtx.com or, alternatively, by directing a request by telephone or mail to Independent Bank Group, Inc., 7777 Henneman Way, McKinney, Texas 75070, (972) 562-9004, and documents filed with the SEC by TCBI will be available free of charge by accessing TCBI’s website at www.texascapitalbank.com under the tab “About Us,” and then under the heading “Investor Relations” or, alternatively, by directing a request by telephone or mail to Texas Capital Bancshares, Inc., 2000 McKinney Avenue, Suite 700, Dallas, Texas 75201, (214) 932-6600. Participants in the Solicitation IBTX, TCBI and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of IBTX and TCBI in connection with the proposed transaction under the rules of the SEC. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the joint proxy statement/prospectus regarding the proposed transaction when it becomes available. Additional information about IBTX, and its directors and executive officers, may be found in IBTX’s definitive proxy statement relating to its 2019 Annual Meeting of Shareholders filed with the SEC on April 23, 2019, and other documents filed by IBTX with the SEC. Additional information about TCBI, and its directors and executive officers, may be found in TCBI’s definitive proxy statement relating to its 2019 Annual Meeting of Shareholders filed with the SEC on March 7, 2019, and other documents filed by TCBI with the SEC. These documents can be obtained free of charge from the sources described above. 3


 
Opening Remarks & Financial Highlights Total Loans Total Deposits Net Income EPS ROE ROA Operating HFI Results $24.6 billion $26.5 billion $73.9 million $1.42 10.68% .85% • Net interest income decreased 2% from Q3-2019 and increased 3% from Q4-2018; increased 7% for YTD Net Interest 2019 Income and • Net interest margin decreased 21 bps from Q3-2019 to 2.95% and decreased 83 bps from Q4-2018 Margin • LIBOR movement reflected in core LHI yields and mortgage finance yields • Average LHI, excluding MFLs, decreased 1% from Q3-2019 ($234.1 million); increased less than 1% Balance Sheet from Q4-2018 ($23.7 million) Growth • Average total MFLs increased 7% from Q3-2019 ($765.4 million); 61% from Q4-2018 ($4.3 billion) • Average total deposits increased 6% from Q3-2019 ($1.7 billion); 35% from Q4-2018 ($7.4 billion) M • Net revenue decreased 2% from Q3-2019 and increased 4% from Q4-2018 Operating • Non-interest expense increased 6% from Q3-2019 and 22% from Q4-2018; increased 12% for YTD 2019, Leverage which included $1.3 million in merger-related expenses and $15.2 million of investment in Bask Bank and new C&I verticals, of which $6.0 million is non-recurring • Criticized loans were $584.1 million at Q4-2019 compared to $536.3 million at Q3-2019 and $442.0 Credit million at Q4-2018 Quality • NCOs / average total LHI of .21% for Q4-2019 compared to .58% for Q3-2019 and .60% for Q4-2018 • Non-accrual loans / total LHI of .91% for Q4-2019 compared to .49% in Q3-2019 and .36% in Q4-2018 4


 
Energy and Leveraged Lending Update EnergyEnergy Outstandings Outstandings 12/31/19 Energy • Outstanding energy loans represented 5% of total loans, or $1.4 billion, at Q4-2019 compared to 6%, or $1.5 billion, at Q3- 2019 and 8%, or $1.8 billion, at Q4-2018 10% 1% Total E&P 6% • Non-accruals totaled $125.0 million at Q4-2019 compared to $63.2 million at Q3-2019 and $37.5 million at Q4-2018 Total Midstream • Criticized energy loans totaled $211.4 million (15% of outstanding energy loans) at Q4-2019 compared to $136.0 Total Salt Water Disposal million (9%) at Q3-2019 and $83.4 million (5%) at Q4-2018 • Allocated reserves of $61.8 million represents 4% of Total Other 83% outstanding energy loans C&I Leveraged C&I Leveraged Outstandings 12/31/19 • Outstanding C&I leveraged loans decreased $374.9 million, or 1300 31%, from Q4-2018; expected 25%-30% reduction for full year 1200 2019 achieved $1,216.0 $1,200.2 1100 • Outstanding C&I leveraged loans represented 3% of total 1000 $1,051.8 loans, or $841.1 million, at Q4-2019 compared to 4%, or $1.0 $1,008.1 900 billion, at Q3-2019 and 5%, or $1.2 billion, at Q4-2018 800 $841.1 • Non-accruals totaled $73.2 million (9% of outstanding C&I 700 leveraged loans) at Q4-2019, compared to $28.3 million (3%) at 600 Q3-2019 and $28.8 million (2%) at Q4-2018 500 Ending Ending ($M) Balances • Criticized loans totaled $204.0 million (24% of outstanding 400 C&I leveraged loans) at Q4-2019, compared to $177.1 million 300 (18%) at Q3-2019 and $151.0 million (12%) at Q4-2018 200 • 100 Allocated reserves of $68.4 million represents 8% of 0 outstanding C&I leveraged loans Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 • No significant concentration in any industry 5


 
Net Interest Income & Margin Average Earning Assets & Net Quarterly Change Interest Income NII ($MM) NIM (%) $5.7 $252.2 Q3 2019 3.16% $30.0 $4.5 17.1 Decrease in funding costs .21 6.3 Increase in loan balances - $2.8 $27.9 $27.4 1.8 Contribution from free funds .02 $25.0 $26.1 $1.9 $2.0 .6 Mix shift from MF to LHI .01 $23.7 $23.6 (.5) Increase in liquidity (.11) $20.0 (6.5) Decrease in MF yields (.08) $252.2 Decrease in Liquidity Asset $248.4 (7.1) (.08) yields $243.6 $240.7 $235.6 $15.0 (15.5) Decrease in LHI loan yields (.18) Portfolio Balances ($B) PortfolioBalances $248.4 Q4 2019 2.95% $10.0 Highlights • Impact of continued downward LIBOR move reflected in traditional LHI yields • Mortgage finance yields impacted by volume pricing $5.0 • MCA/LHS yields impacted by decline in mortgage rates • Total funding costs decreased 22 bps during Q4-2019 $- compared to decrease of 15 bps during Q3-2019 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 • Deposit costs decreased 22 bps during Q4-2019 Total Loans Other Earning Assets Net Interest Income compared to decrease of 8 bps during Q3-2019 6


 
Loan Growth Average Loans & Yield Loan Composition ($27.2Billion outstanding balance 12/31/19) $28.0 Business Assets $26.0 $10.7 $11.4 $9.5 27% $24.0 Energy $22.0 $7.1 $7.1 5% $20.0 $18.0 Highly Liquid Unsecured Assets 3% $16.0 $16.6 $16.9 $16.8 $16.9 $16.7 1% $14.0 Owner Occupied 5.82% R/E $12.0 5.72% 5.73% 5.53% 4% Portfolio Portfolio Balances($B) $10.0 5.16% Residential R/E $8.0 Mkt. Risk 4% $6.0 $4.0 $2.0 Total Mortgage Comml R/E Mkt. Finance $- Risk 39% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 13% Other Assets LHI (excl. MFLs) Total MFLs LHI (excl. MFL) Yield 4% Growth Highlights • Average LHI, excluding MFLs, down $234.1 million (1%) from Q3-2019 and up $23.7 million (less than 1%) from Q4-2018 • Decrease in LHI, excluding MFLs, at end of the quarter; period-end balance $190.8 million lower than Q4-2019 average balance • Increase in average total MFL balances of $765.4 million (7%) from Q3-2019 and $4.3 billion (61%) from Q4-2018 • Average total MFLs represent 41% of average total loans for Q4-2019 compared to 39% for Q3-2019 and 39% at period end 7


 
Deposit Growth Average Deposits Funding Costs 2.00% $28.0 $10.9 $26.0 $10.0 $24.0 $22.0 1.50% 1.38% 1.40% $7.9 $20.0 $7.5 $7.0 1.23% 1.25% $18.0 1.33% 1.29% 1.03% $16.0 $17.4 1.17% 1.21% $16.6 1.00% $14.0 $14.0 $14.6 0.99% $12.0 $13.5 Deposit Balances Deposit($B) Balances $10.0 $8.0 0.50% $6.0 $4.0 $2.0 $- 0.00% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Interest-Bearing Deposits DDAs Avg Cost of Deposits Total Funding Costs Growth Highlights • Deposit costs decreased 22 bps during Q4-2019 and total funding costs decreased 22 bps; compared to a decrease of 8 bps and 15 bps, respectively, in Q3-2019 • Cost of interest-bearing deposits decreased 31 bps during Q4-2019; compared to a decrease of 6 bps in Q3-2019 • Increase in linked quarter average total deposits with growth in demand deposits improving overall deposit costs • Continued focus on cost-effective deposit growth with new verticals and core client relationships • Decrease in total funding costs resulting from continued decline in rates 8


 
Non-interest Expense Quarterly Change Annual Change Increase/ Increase/ Non-interest expense ($MM) (Decrease) Non-interest expense ($MM) (Decrease) Q3 2019 $149.4 YTD 2018 $525.1 Salaries and employee benefits, includes: Salaries and employee benefits, includes: – FAS 123R (includes stock price changes) .6 – FAS 123R (includes stock price changes) .7 – non-LTI incentives and annual incentive pool (1.4) – non-LTI incentives and annual incentive pool 2.3 – severance (0.8) – MTM on deferred compensation 3.6 – MTM on deferred compensation 0.7 – salaries and benefits 16.7 – salaries and benefits 1.1 Marketing expense; variable component tied to deposits (1.9) Marketing expense; variable component tied to deposits 14.0 Legal and professional, includes: Legal and professional – merger-related 1.3 – merger-related 1.3 – Bask Bank and new C&I verticals 7.4 – Bask Bank and new C&I verticals 9.1 – variable component related to deposit services 0.7 – variable component related to deposit services 2.2 – general 1.6 – general (1.8) Communications and technology 3.0 Communications and technology 14.8 Servicing related expenses (includes MSR impairment) (5.2) Servicing related expenses (includes MSR impairment) 7.6 All other – includes occupancy and FDIC insurance 2.2 All other – includes occupancy and FDIC insurance (5.6) Q4 2019 $158.7 YTD 2019 $590.0 NIE - Efficiency • Full year 2019 efficiency ratio of 55.0% compared to prior year of 52.9%; 59.6% for Q4-2019 compared to 54.8% for Q3-2019 • Important to understand punitive impact of deposit related marketing fees and servicing expenses on efficiency ratio; adjusted ratio of 52.1% for 2019 compared to 50.7% for 2018; 2019 includes $1.3 million in merger-related expenses and $15.2 million of investment in Bask Bank and new C&I verticals, of which $6.0 million is non-recurring 9


 
Asset Quality Allowance for Credit Losses NCO/Average Total LHI $240.0 0.80% $220.0 $225.4 $218.4 $200.0 0.70% $203.0 $199.5 $203.7 $180.0 0.60% $160.0 0.93% 0.93% $140.0 0.90% 0.50% $120.0 0.81% 0.83% 0.40% 0.37% ALLL ALLL ($M) $100.0 0.29% 0.31% $80.0 0.30% $60.0 0.20% 0.16% $40.0 $20.0 0.10% 0.07% $- Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 0.00% ALLL Total Allowance for Credit Losses as % of Total LHI 2015 2016 2017 2018 2019 Criticized Loans as % of Total LHI Combined 5.00% Reserves/ .90% 1.03% .94% .90% .83% Total LHI $600.0 $629.1 $602.8 $584.1 4.00% Asset Quality Highlights $500.0 $536.3 • Credit cost of $17.0 million for Q4-2019, compared to $11.0 million in $442.0 Q3-2019 and $35.0 million in Q4-2018 $400.0 3.00% 2.58% 2.58% • NCOs $12.8 million ($588,000 energy and $6.2 million leveraged 2.37% 2.17% lending), or 21 bps of average total LHI, in Q4-2019 compared to $36.9 $300.0 1.96% 2.00% million, or 58 bps, in Q3-2019 and 60 bps in Q4-2018; YTD Q4-2019 Criticized Criticized Loans($M) NCOs $74.3 million ($32.3 million energy and $30.2 million leveraged $200.0 lending) 1.00% • NPL ratio increased to .91% of total LHI at Q4-2019 compared to .49% $100.0 at Q3-2019 and .36% at Q4-2018 $- 0.00% • Criticized loans increased to $584.1 million at Q4-2019 compared to Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 $536.3 million at Q3-2019 and $442.0 million at Q4-2018 Criticized Loans Criticized Loans as a % of Total LHI 10


 
Performance Summary - Quarterly (in thousands except per share data) Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 Net interest income $ 248,385 $ 252,168 $ 243,553 $ 235,614 $ 240,673 Non-interest income 17,761 20,301 24,364 30,014 15,280 Net revenue 266,146 272,469 267,917 265,628 255,953 Provision for credit losses 17,000 11,000 27,000 20,000 35,000 Non-interest expense 158,690 149,370 141,561 140,378 129,862 Income before income taxes 90,456 112,099 99,356 105,250 91,091 Income tax expense 16,539 23,958 21,387 22,411 19,200 Net income 73,917 88,141 77,969 82,839 71,891 Preferred stock dividends 2,437 2,438 2,437 2,438 2,437 Net income available to common shareholders $ 71,480 $ 85,703 $ 75,532 $ 80,401 $ 69,454 Diluted EPS $ 1.42 $ 1.70 $ 1.50 $ 1.60 $ 1.38 Net interest margin 2.95% 3.16% 3.41% 3.73% 3.78% ROA .85% 1.06% 1.05% 1.26% 1.09% ROE 10.68% 13.22% 12.20% 13.58% 11.82% Non-interest expense to average earning assets 1.87% 1.86% 1.97% 2.21% 2.03% Efficiency 59.6% 54.8% 52.8% 52.8% 50.7% Efficiency, adjusted(1) 57.7% 51.2% 49.5% 50.1% 48.7% (1) Non-interest expense, excluding deposit related marketing fees and servicing related expenses, divided by the sum of net interest income and non-interest income, net of deposit related marketing fees and servicing related expenses. Marketing fees totaled $9.4 million, $11.9 million, $11.6 million, $9.1 million and $7.7 million for Q4, Q3, Q2 and Q1 2019, as well as for Q4 2018, respectively. 11


 
Performance Summary - Annual (in thousands except per share data) 2019 2018 2017 2016 2015 Net interest income $ 979,720 $ 914,860 $ 761,328 $ 639,814 $ 556,530 Non-interest income 92,440 78,024 74,256 60,780 47,738 Net revenue 1,072,160 992,884 835,584 700,594 604,268 Provision for credit losses 75,000 87,000 44,000 77,000 53,250 OREO write-down - - 6,111 - - Non-interest expense 589,999 525,096 459,765 382,397 326,523 Income before income taxes 407,161 380,788 325,708 241,197 224,495 Income tax expense 84,295 79,964 128,645 86,078 79,641 Net income 322,866 300,824 197,063 155,119 144,854 Preferred stock dividends 9,750 9,750 9,750 9,750 9,750 Net income available to common shareholders $ 313,116 $ 291,074 $ 187,313 $ 145,369 $ 135,104 Diluted EPS $ 6.21 $ 5.79 $ 3.73 $ 3.11 $ 2.91 Net interest margin 3.28% 3.78% 3.49% 3.14% 3.14% ROA 1.04% 1.19% .87% .74% .79% ROE 12.38% 13.14% 9.51% 9.27% 9.65% Non-interest expense to average earning assets 1.96% 2.15% 2.12% 1.88% 1.84% Efficiency 55.0% 52.9% 55.8% 54.6% 54.0% Efficiency, adjusted(1) 52.1% 50.7% 53.2% 54.0% 53.6% (1) Non-interest expense, excluding OREO write-down, deposit related marketing fees and servicing related expenses, divided by the sum of net interest income and non-interest income, net of deposit related marketing fees and servicing related expenses. Marketing fees totaled $42.0 million, $28.1 million, $16.3 million, $6.7 million and $5.6 million for YTD 2019, 2018, 2017, 2016 and 2015, respectively. 12


 
2020 Outlook Business Driver 2020 Outlook Average LHI Mid single digit percent growth Average LHI – Mortgage High teens percent decrease Finance Loans held for sale (MCA) Low $3.0 billion average Average Deposits Flat, due to repositioning Net Revenue Low single digit percent decrease Net Interest Margin 3.05% to 3.15% Provision Expense Low to high $60 million level NIE Mid single digit percent growth Efficiency Ratio High-50s 13


 
Closing Comments • Commitment to delivering premier client experience to our clients which we believe continues to improve post merger with opportunity to leverage branch network and increase small business market share • Continued runoff in leverage and energy portfolios in Q4-2019 reducing traditional LHI balances; net growth planned in traditional LHI in 2020 with portfolio of single family mortgages sourced from MCA and launch of new C&I verticals • Assuming more normalized level of mortgage finance in 2020, while leveraging MCA channel to add duration to the balance sheet • Most significant deposit initiatives include Bask Bank and commercial escrow, both of which are expected to gain meaningful market share in 2020 • Improved level of provision for loan losses in 2019 versus 2018, with continued improvement expected in 2020; remaining vigilant on improving the overall risk profile of the portfolio and resolving problem loans • Continued focus on management of core operating expenses while continuing to be opportunistic in attracting and hiring top revenue producing talent; committed to investment in Bask Bank which we believe is even more important post merger with an almost $50 billion bank 14


 
Q&A 15


 
Appendix 16


 
Merger of Equals Progress Work Underway to Create the Premier Texas-Based Bank Progress Since Announcement • Integration planning well underway with leaders from both companies working to ensure seamless and timely transition once closing of the merger is achieved, subject to customary closing conditions • Established a joint Integration Management Office leveraging top-tier external advisors with extensive experience in transactions and deep knowledge of financial services • Continued commitment to achieving the synergies and cost savings as originally announced • Filed our registration statement; regulatory merger applications expected to be filed in January 2020 Illustrative Transaction Timeline Announced leadership, Filed registration Further updates to be provided Legal branding, headquarters, statement as work progresses Close and regulators December Today Mid-Year January 22, 2020 2019 2020 Joint Integration Management Office Special Meetings established; teams engaged in integration of Stockholders planning with help from top-tier external advisors 17


 
Focused on Results Delivering a High Performance Bank in the Country’s Best Markets • Focused on creating a high performance bank that can serve customers of any size in a combined footprint that spans five of the strongest markets in the country • Complementary nature of the two companies creates opportunities to greatly expand our offering to existing customers and to continue growing organically in our core markets • Our shared commitment to consistently delivering a high level of service to our customers will remain a core part of our shared identity once the merger is completed 18 Source: S&P Global. (1) 2025 projected population growth for MSAs with greater than 1 million people. (2) 2019 population.


 
Average Balances, Yields & Rates - Quarterly (in thousands) Q4 2019 Q3 2019 Q4 2018 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 238,495 5.21% $ 239,834 4.69% $ 117,371 5.22% Liquidity assets 5,489,320 1.66% 4,284,874 2.17% 1,759,417 2.25% Loans held for sale 3,567,836 3.72% 2,555,269 4.07% 2,049,395 4.72% LHI, mortgage finance 7,870,888 3.18% 8,118,025 3.36% 5,046,540 3.72% LHI 16,667,259 5.16% 16,901,391 5.53% 16,643,559 5.72% Total LHI, net of reserve 24,348,794 4.56% 24,806,518 4.87% 21,507,285 5.30% Total earning assets 33,644,445 4.00% 31,886,495 4.44% 25,433,468 5.04% Total assets $34,619,311 $32,886,612 $26,261,624 Liabilities and Stockholders’ Equity Total interest bearing deposits $17,382,275 1.62% $16,615,417 1.93% $13,474,308 1.82% Other borrowings 2,822,465 1.83% 2,896,477 2.27% 2,290,520 2.39% Total long-term debt 395,480 5.37% 395,385 5.45% 395,114 5.47% Total interest bearing liabilities 20,600,220 1.72% 19,907,279 2.05% 16,159,942 1.99% Demand deposits 10,933,887 9,992,406 7,462,392 Total deposits 28,316,162 0.99% 26,607,823 1.21% 20,936,700 1.17% Stockholders’ equity 2,806,240 2,722,421 2,482,012 Total liabilities and stockholders’ equity $34,619,311 1.03% $32,886,612 1.25% $26,261,624 1.23% Net interest margin 2.95% 3.16% 3.78% Total deposits and borrowed funds $31,138,627 1.07% $29,504,300 1.31% $23,227,220 1.29% 19


 
Average Balances, Yields & Rates - Annual (in thousands) 2019 2018 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 213,902 4.92% $ 70,695 4.75% Liquidity assets 3,557,200 2.04% 1,970,310 1.85% Loans held for sale 2,688,677 4.19% 1,561,530 4.56% LHI, mortgage finance 6,999,586 3.45% 4,875,860 3.72% LHI 16,803,930 5.56% 16,075,007 5.46% Total LHI, net of reserve 23,603,232 4.98% 20,767,004 5.10% Total earning assets 30,063,011 4.56% 24,369,539 4.80% Total assets $31,016,005 $25,197,689 Liabilities and Stockholders’ Equity Total interest bearing deposits $15,667,512 1.87% $12,323,299 1.50% Other borrowings 3,038,095 2.31% 2,102,404 2.03% Total long-term debt 395,342 5.51% 394,980 5.44% Total interest bearing liabilities 19,100,949 2.02% 14,820,683 1.68% Demand deposits 8,989,104 7,890,304 Total deposits 24,656,616 20,213,603 Stockholders’ equity 2,679,021 2,365,449 Total liabilities and stockholders’ equity $31,016,005 1.25% $25,197,689 .99% Net interest margin 3.28% 3.78% Total deposits and borrowed funds $27,694,711 1.31% $22,316,007 1.02% 20


 
Average Balance Sheet - Quarterly (in thousands) QTD Average Q4/Q3 YOY % Q4 2019 Q3 2019 Q4 2018 % Change Change Total assets $34,619,311 $32,886,612 $26,261,624 5% 32% Loans held for sale 3,567,836 2,555,269 2,049,395 40% 74% Loans held for investment 16,667,259 16,901,391 16,643,559 (1)% 0% Loans held for investment, mortgage 7,870,888 8,118,025 5,046,540 (3)% 56% finance Total loans held for investment 24,538,147 25,019,416 21,690,099 (2)% 13% Total loans 28,105,983 27,574,685 23,739,494 2% 18% Liquidity assets 5,489,320 4,284,874 1,759,417 28% 212% Demand deposits 10,933,887 9,992,406 7,462,392 9% 47% Total deposits 28,316,162 26,607,823 20,936,700 6% 35% Stockholders’ equity 2,806,240 2,722,421 2,482,012 3% 13% 21


 
Period End Balance Sheet (in thousands) Period End Q4/Q3 % YOY % Q4 2019 Q3 2019 Q4 2018 Change Change Total assets $32,548,069 $33,526,437 $28,257,767 (3)% 15% Loans held for sale 2,577,134 2,674,225 1,969,474 (4)% 31% Loans held for investment 16,476,413 16,772,824 16,690,550 (2)% (1)% Loans held for investment, mortgage 8,169,849 7,951,432 5,877,524 3% 39% finance Total loans held for investment 24,646,262 24,724,256 22,568,074 0% 9% Total loans 27,223,396 27,398,481 24,537,548 (1)% 11% Liquidity assets 4,263,766 4,993,185 2,865,874 (15)% 49% Demand deposits 9,438,459 10,289,572 7,317,161 (8)% 29% Total deposits 26,478,593 27,413,303 20,606,113 (3)% 28% Stockholders’ equity 2,832,258 2,757,433 2,500,394 3% 13% 22


 
(Back To Top)