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Texas Capital Bancshares, Inc. Announces First Quarter 2022 Results

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Texas Capital Bancshares (NASDAQ: TCBI) reported a first quarter 2022 net income of $39.7 million, or $0.69 per diluted share, down from $65.1 million in Q4 2021 and $71.9 million in Q1 2021. The decline was attributed to a decrease in mortgage finance loans attributed to rising interest rates. Loans held for investment, excluding mortgage finance and PPP, increased by $577.7 million (15% annualized). The bank's total deposits fell to $25.4 billion, a decline compared to previous quarters. Regulatory capital ratios remain robust.

Positive
  • Loans held for investment, excluding mortgage finance and PPP, rose by $577.7 million (15% annualized).
  • Capital ratios exceed 'well-capitalized' requirements: CET1 at 11.5%, tier 1 at 13.0%, total capital at 15.7%.
  • Net recoveries were reported at $512,000, indicating improved credit quality.
Negative
  • Net income decreased 39% from Q4 2021 and 45% from Q1 2021.
  • Non-interest income declined by $11.2 million (36%) compared to Q4 2021, mainly due to lower investment banking and trading income.
  • Total deposits decreased to $25.4 billion, down from $28.1 billion in Q4 2021.

First quarter 2022 net income of $39.7 million, or $0.69 per diluted share

Declines in mortgage finance loans driven by rapid increase in interest rates

Loans held for investment, excluding mortgage finance and PPP, increased $577.7 million, or 15% annualized

DALLAS, April 20, 2022 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the first quarter of 2022.

Net income was $39.7 million, or $0.69 per diluted share, for the first quarter of 2022, compared to $65.1 million, or $1.19 per diluted share, for the fourth quarter of 2021 and $71.9 million, or $1.33 per diluted share, for the first quarter of 2021.

“A key objective of our strategic plan to transform Texas Capital Bank is to create greater balance through focused growth initiatives across the platform to reduce reliance on our leading Mortgage Finance franchise. While we continue to be committed to our mature Mortgage Finance business, the first quarter impact from the increase in long-term rates on this business is evidence as to why we have embarked on this strategy,” said Rob C. Holmes, President and CEO. “We are progressing against our plan, and just beginning to realize the benefits from focused investments in core product offerings and key talent acquisition. With short-term rates rising, we continue to take deliberate actions to position our asset-sensitive balance sheet to perform more favorably through the rate cycle.”

FINANCIAL RESULTS     
(dollars and shares in thousands)     
 1st Quarter 4th Quarter 1st Quarter
  2022   2021   2021 
OPERATING RESULTS     
Net income$39,650  $65,130  $71,938 
Net income available to common stockholders$35,337  $60,817  $68,159 
Diluted earnings per common share$0.69  $1.19  $1.33 
Diluted common shares 51,324   51,208   51,070 
Return on average assets 0.47%  0.69%  0.73%
Return on average common equity 4.97%  8.36%  10.08%
      
BALANCE SHEET     
Loans held for investment$15,849,434  $15,331,457  $15,399,174 
Loans held for investment, mortgage finance 5,827,965   7,475,497   9,009,081 
Total loans held for investment 21,677,399   22,806,954   24,408,255 
Loans held for sale 8,085   8,123   176,286 
Total assets 31,085,377   34,731,738   40,054,433 
Non-interest bearing deposits 13,434,723   13,390,370   15,174,642 
Total deposits 25,377,938   28,109,365   33,391,970 
Stockholders’ equity 3,090,038   3,209,616   3,159,482 


 

FIRST QUARTER 2022 COMPARED TO FOURTH QUARTER 2021

For the first quarter of 2022, net income was $39.7 million, or $0.69 per diluted share, compared to $65.1 million, or $1.19 per diluted share, for the fourth quarter of 2021.

We recorded a $2.0 million negative provision for credit losses for the first quarter of 2022, compared to a $10.0 million negative provision for credit losses for the fourth quarter of 2021, as a decrease in criticized loans was partially offset by growth in loans held for investment, excluding mortgage finance.

Net interest income was $183.5 million for the first quarter of 2022, compared to $194.0 million for the fourth quarter of 2021. The decrease in net interest income was primarily driven by a decrease in average loans held for investment (“LHI”), mortgage finance, partially offset by an increase in investment securities yields. Net interest margin for the first quarter of 2022 was 2.23%, an increase of 11 basis point from the fourth quarter of 2021. LHI, excluding mortgage finance, yields decreased 6 basis points from the fourth quarter of 2021 and LHI, mortgage finance yields increased 16 basis points from the fourth quarter of 2021. Total cost of deposits was 0.20% for the first quarter of 2022, a 1 basis point increase from the fourth quarter of 2021.

Non-interest income for the first quarter of 2022 decreased $11.2 million, or 36%, compared to the fourth quarter of 2021. The decrease was primarily related to decreases in investment banking and trading income, resulting from a decrease in loan syndication fees, and other non-interest income. The decrease in other non-interest income resulted from a non-recurring gain recognized in the fourth quarter of 2021 on the sale of a foreclosed asset.

Non-interest expense for the first quarter of 2022 increased $6.4 million, or 4%, compared to the fourth quarter of 2021. The increase was primarily due to increases in salaries and benefits expense, partially offset by decreases in legal and profession and communications and technology expenses. The increase in salaries and benefits expense was primarily due to an increase in headcount and the effect of seasonal payroll expenses that peak in the first quarter.

FIRST QUARTER 2022 COMPARED TO FIRST QUARTER 2021

Net income was $39.7 million, or $0.69 per diluted share, for the first quarter of 2022, compared to $71.9 million, or $1.33 per diluted share, for the first quarter of 2021.

The first quarter of 2022 included a $2.0 million negative provision for credit losses, compared to a $6.0 million negative provision for credit losses for the first quarter of 2021. The $2.0 million negative provision for credit losses recorded in the first quarter of 2022 resulted from a decline in criticized loans, partially offset by an increase in loans held for investment, excluding mortgage finance.

Net interest income decreased to $183.5 million for the first quarter of 2022, compared to $194.8 million for the first quarter of 2021, primarily due to a decrease in average LHI, mortgage finance, partially offset by an increase in investment securities yields. Net interest margin increased 19 basis points to 2.23% for the first quarter of 2022, as compared to the first quarter of 2021, primarily due to a shift in the composition of earning assets, primarily declines in interest-bearing cash and cash equivalents and LHI, mortgage finance. LHI, excluding mortgage finance, yields decreased 5 basis points compared to the first quarter of 2021 and LHI, mortgage finance yields decreased 15 basis points from the first quarter of 2021. Total cost of deposits decreased 4 basis points compared to the first quarter of 2021.

Non-interest income for the first quarter of 2022 decreased $24.1 million, or 54%, compared to the first quarter of 2021, as brokered loan fees, servicing fee income and net gain/(loss) on sale of loans held for sale all decreased as a result of the sale of our mortgage servicing rights portfolio and transition of the mortgage correspondent program in 2021. The decline in brokered loan fees was also impacted by lower mortgage finance volumes in the first quarter of 2022 as compared to 2021.

Non-interest expense for the first quarter of 2022 increased $2.8 million, or 2%, compared to the first quarter of 2021. The increase was primarily due to increases in salaries and benefits, primarily due to an increase in headcount, partially offset by a decrease in servicing-related expenses from the sale of our mortgage servicing rights portfolio in 2021.

CREDIT QUALITY

We recorded $512,000 in net recoveries during the first quarter of 2022, compared to net charge-offs of $1.0 million and $6.4 million during the fourth quarter of 2021 and the first quarter of 2021, respectively. Criticized loans totaled $476.1 million at March 31, 2022, compared to $582.9 million at December 31, 2021 and $945.1 million at March 31, 2021. Non-accrual loans HFI totaled $59.3 million at March 31, 2022, compared to $72.5 million at December 31, 2021 and $97.7 million at March 31, 2021. The ratio of non-accrual LHI to total LHI for the first quarter of 2022 was 0.27%, compared to 0.32% for the fourth quarter of 2021 and 0.40% for the first quarter of 2021.

CAPITAL RATIOS

All regulatory ratios continue to be in excess of “well-capitalized” requirements as of March 31, 2022. Our CET 1, tier 1 capital, total capital and leverage ratios were 11.5%, 13.0%, 15.7% and 9.9%, respectively, at March 31, 2022, compared to 11.1%, 12.6%, 15.3% and 9.0%, respectively, at December 31, 2021 and 10.2%, 12.2%, 14.0% and 8.3% at March 31, 2021. At March 31, 2022, our ratio of tangible common equity to total tangible assets was 8.9%, compared to 8.3% at December 31, 2021 and 6.7% at March 31, 2021.

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, our 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 “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,” “could,” “should,” “projects,” “targeted,” “continue,” “become,” “intend” and similar expressions.

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. 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 factors include, but are not limited to, credit quality and risk, the COVID-19 pandemic, industry and technological changes, cyber incidents or other failures, disruptions or security breaches, interest rates, commercial and residential real estate values, economic and market conditions in Texas, the United States or internationally, fund availability, accounting estimates and risk management processes, the transition away from the London Interbank Offered Rate (LIBOR), legislative and regulatory changes, business strategy execution, key personnel, competition, mortgage markets, fraud, environmental liability and severe weather, natural disasters, acts of war or terrorism or other external events.

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, we disclaim any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments.


TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(dollars in thousands except per share data)
 1st Quarter4th Quarter3rd Quarter2nd Quarter1st Quarter
  2022  2021  2021  2021  2021 
CONSOLIDATED STATEMENTS OF INCOME     
Interest income$208,530 $219,892 $216,589 $216,953 $223,151 
Interest expense 24,983  25,860  26,053  27,496  28,339 
Net interest income 183,547  194,032  190,536  189,457  194,812 
Provision for credit losses (2,000) (10,000) 5,000  (19,000) (6,000)
Net interest income after provision for credit losses 185,547  204,032  185,536  208,457  200,812 
Non-interest income 20,282  31,459  24,779  37,639  44,353 
Non-interest expense 153,092  146,649  152,987  149,060  150,316 
Income before income taxes 52,737  88,842  57,328  97,036  94,849 
Income tax expense 13,087  23,712  13,938  23,555  22,911 
Net income 39,650  65,130  43,390  73,481  71,938 
Preferred stock dividends 4,313  4,313  4,312  6,317  3,779 
Net income available to common stockholders$35,337 $60,817 $39,078 $67,164 $68,159 
Diluted earnings per common share$0.69 $1.19 $0.76 $1.31 $1.33 
Diluted common shares 51,324,027  51,208,161  51,139,555  51,093,660  51,069,511 
      
CONSOLIDATED BALANCE SHEET DATA     
Total assets$31,085,377 $34,731,738 $36,404,320 $35,228,542 $40,054,433 
Loan held for investment 15,849,434  15,331,457  15,221,404  15,168,565  15,399,174 
Loans held for investment, mortgage finance 5,827,965  7,475,497  8,528,313  8,772,799  9,009,081 
Loans held for sale 8,085  8,123  9,660  63,747  176,286 
Interest-bearing cash and cash equivalents 5,136,680  7,765,996  8,317,926  6,768,650  11,212,276 
Investment securities 3,642,015  3,583,808  3,663,874  3,798,275  3,443,058 
Non-interest bearing deposits 13,434,723  13,390,370  14,970,462  14,228,038  15,174,642 
Total deposits 25,377,938  28,109,365  29,813,668  28,839,563  33,391,970 
Short-term borrowings 1,427,033  2,202,832  2,203,470  2,014,481  2,515,587 
Long-term debt 929,414  928,738  928,062  927,386  664,968 
Stockholders’ equity 3,090,038  3,209,616  3,147,752  3,114,957  3,159,482 
      
End of period shares outstanding 50,710,441  50,618,494  50,605,626  50,592,201  50,557,767 
Book value$55.02 $57.48 $56.27 $55.64 $53.59 
Tangible book value(1)$54.68 $57.14 $55.93 $55.29 $53.24 
      
SELECTED FINANCIAL RATIOS     
Net interest margin 2.23% 2.12% 2.11% 2.02% 2.04%
Return on average assets 0.47% 0.69% 0.47% 0.76% 0.73%
Return on average common equity 4.97% 8.36% 5.41% 9.74% 10.08%
Non-interest income to average earning assets 0.25% 0.34% 0.27% 0.40% 0.46%
Efficiency ratio(2) 75.1% 65.0% 71.1% 65.6% 62.9%
Non-interest expense to average earning assets 1.86% 1.60% 1.69% 1.59% 1.57%
Tangible common equity to total tangible assets(3) 8.9% 8.3% 7.8% 7.9% 6.7%
Common Equity Tier 1 11.5% 11.1% 10.7% 10.5% 10.2%
Tier 1 capital 13.0% 12.6% 12.2% 12.1% 12.2%
Total capital 15.7% 15.3% 14.9% 14.8% 14.0%
Leverage 9.9% 9.0% 9.0% 8.4% 8.3%

(1) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(2) Non-interest expense divided by the sum of net interest income and non-interest income.
(3) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by total assets, less goodwill and intangibles.
        

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
 March 31, 2022March 31, 2021% Change
Assets   
Cash and due from banks$234,853 $215,835 9%
Interest-bearing cash and cash equivalents 5,136,680  11,212,276 (54)%
Available-for-sale debt securities 2,591,218  3,408,658 (24)%
Held-to-maturity debt securities 1,009,972   100%
Equity securities 40,825  34,400 19%
Investment securities 3,642,015  3,443,058 6%
Loans held for sale 8,085  176,286 (95)%
Loans held for investment, mortgage finance 5,827,965  9,009,081 (35)%
Loans held for investment 15,849,434  15,399,174 3%
Less: Allowance for credit losses on loans 211,151  242,484 (13)%
Loans held for investment, net 21,466,248  24,165,771 (11)%
Mortgage servicing rights, net   121,096 (100)%
Premises and equipment, net 24,181  23,346 4%
Accrued interest receivable and other assets 556,154  679,199 (18)%
Goodwill and intangibles, net 17,161  17,566 (2)%
Total assets$31,085,377 $40,054,433 (22)%
    
Liabilities and Stockholders’ Equity   
Liabilities:   
Non-interest bearing$13,434,723 $15,174,642         (11)%
Interest bearing 11,943,215  18,217,328         (34)%
Total deposits 25,377,938  33,391,970         (24)%
Accrued interest payable 8,560  5,629 52%
Other liabilities 252,394  316,797 (20)%
Short-term borrowings 1,427,033  2,515,587 (43)%
Long-term debt 929,414  664,968 40%
Total liabilities 27,995,339  36,894,951 (24)%
     
Stockholders’ equity:    
Preferred stock, $.01 par value, $1,000 liquidation value:    
Authorized shares - 10,000,000    
Issued shares - 300,000 and 6,300,000 shares issued at March 31, 2022 and 2021, respectively 300,000  450,000         (33)%
Common stock, $.01 par value:   
Authorized shares - 100,000,000   
Issued shares - 50,710,858 and 50,558,184 at March 31, 2022 and 2021, respectively 507  505 %
Additional paid-in capital 1,011,353  984,207 3%
Retained earnings 1,983,611  1,781,215 11%
Treasury stock - 417 shares at cost at March 31, 2022 and 2021 (8) (8)%
Accumulated other comprehensive loss, net of taxes (205,425) (56,437)264%
Total stockholders’ equity 3,090,038  3,159,482         (2)%
Total liabilities and stockholders’ equity$31,085,377 $40,054,433         (22)%


TEXAS CAPITAL BANCSHARES, INC.  
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)  
(dollars in thousands except per share data)  
 Three Months Ended March 31,
  2022  2021 
Interest income  
Interest and fees on loans$187,657 $210,331 
Investment securities 17,302  9,887 
Interest-bearing cash and cash equivalents 3,571  2,933 
Total interest income 208,530  223,151 
Interest expense  
Deposits 13,630  20,004 
Short-term borrowings 758  2,592 
Long-term debt 10,595  5,743 
Total interest expense 24,983  28,339 
Net interest income 183,547  194,812 
Provision for credit losses (2,000) (6,000)
Net interest income after provision for credit losses 185,547  200,812 
Non-interest income  
Service charges on deposit accounts 6,022  4,716 
Wealth management and trust fee income 3,912  2,855 
Brokered loan fees 3,970  9,311 
Servicing income 237  9,009 
Investment banking and trading income 4,179  5,787 
Net gain/(loss) on sale of loans held for sale   5,572 
Other 1,962  7,103 
Total non-interest income 20,282  44,353 
Non-interest expense  
Salaries and benefits 100,098  87,522 
Occupancy expense 8,885  8,274 
Marketing 4,977  1,697 
Legal and professional 10,302  8,277 
Communications and technology 14,700  15,969 
FDIC insurance assessment 3,981  6,613 
Servicing-related expenses   12,989 
Other 10,149  8,975 
Total non-interest expense 153,092  150,316 
Income before income taxes 52,737  94,849 
Income tax expense 13,087  22,911 
Net income 39,650  71,938 
Preferred stock dividends 4,313  3,779 
Net income available to common stockholders$35,337 $68,159 
   
Basic earnings per common share$0.70 $1.35 
Diluted earnings per common share$0.69 $1.33 


TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
 1st Quarter4th Quarter3rd Quarter2nd Quarter1st Quarter
  2022  2021  2021  2021  2021 
Allowance for credit losses on loans:     
Beginning balance$211,866 $221,957 $221,511 $242,484 $254,615 
Loans charged-off:     
Commercial 110  3,776  4,348  1,412  2,451 
Energy       686  5,732 
Real estate 350      1,192   
Total charge-offs 460  3,776  4,348  3,290  8,183 
Recoveries:     
Commercial 217  1,933  1,104  308  1,050 
Energy 755  601  42  609  715 
Real estate   205  112     
Total recoveries 972  2,739  1,258  917  1,765 
Net charge-offs (512) 1,037  3,090  2,373  6,418 
Provision for credit losses on loans (1,227) (9,054) 3,536  (18,600) (5,713)
Ending balance$211,151 $211,866 $221,957 $221,511 $242,484 
      
Allowance for off-balance sheet credit losses:     
Beginning balance$17,265 $18,211 $16,747 $17,147 $17,434 
Provision for off-balance sheet credit losses (773) (946) 1,464  (400) (287)
Ending balance$16,492 $17,265 $18,211 $16,747 $17,147 
      
Total allowance for credit losses$227,643 $229,131 $240,168 $238,258 $259,631 
Total provision for credit losses$(2,000)$(10,000)$5,000 $(19,000)$(6,000)
      
Allowance for credit losses on loans to total loans held for investment 0.97% 0.93% 0.93% 0.93% 0.99%
Allowance for credit losses on loans to average total loans held for investment 0.99% 0.91% 0.95% 0.98% 1.03%
Net charge-offs to average total loans held for investment(1)(0.01)% 0.02% 0.05% 0.04% 0.11%
Net charge-offs to average total loans held for investment for last 12 months(1) 0.03% 0.06% 0.33% 0.31% 0.59%
Total provision for credit losses to average total loans held for investment(1)(0.04)%(0.17)% 0.09%(0.34)%(0.10)%
Total allowance for credit losses to total loans held for investment 1.05% 1.00% 1.01% 1.00% 1.06%

(1) Interim period ratios are annualized.

TEXAS CAPITAL BANCSHARES, INC.     
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS   
(dollars in thousands)     
 1st Quarter4th Quarter3rd Quarter2nd Quarter1st Quarter
  2022  2021  2021  2021  2021 
Non-accrual loans held for investment$59,327 $72,502 $87,532 $86,636 $97,730 
Non-accrual loans held for sale          
Other real estate owned (OREO)          
Total non-performing assets$59,327 $72,502 $87,532 $86,636 $97,730 
      
Non-accrual loans held for investment to total loans held for investment 0.27% 0.32% 0.37% 0.36% 0.40%
Total non-performing assets to earning assets 0.20% 0.21% 0.25% 0.25% 0.25%
Allowance for credit losses on loans to non-accrual loans held for investment3.6x2.9x2.5x2.6x2.5x
      
Loans held for investment past due 90 days and still accruing(1)$6,031 $3,467 $3,405 $7,671 $6,187 
Loans held for investment past due 90 days to total loans held for investment 0.03% 0.02% 0.01% 0.03% 0.03%
Loans held for sale past due 90 days and still accruing(2)$3,865 $3,986 $3,808 $2,695 $16,359 

(1) At March 31, 2022, loans past due 90 days and still accruing included premium finance loans of $3.2 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 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. The first quarter of 2021 also includes loans that, pursuant to Ginnie Mae servicing guidelines, we have the unilateral right, but not obligation, to repurchase and thus must record on our balance sheet regardless of whether the repurchase option has been exercised.

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)
      
 1st Quarter4th Quarter3rd Quarter2nd Quarter1st Quarter
  2022  2021  2021  2021  2021 
Interest income     
Interest and fees on loans$187,657 $204,379 $202,748 $203,074 $210,331 
Investment securities 17,302  11,780  10,235  10,918  9,887 
Interest-bearing deposits in other banks 3,571 $3,733 $3,606  2,961  2,933 
Total interest income 208,530  219,892  216,589  216,953  223,151 
Interest expense     
Deposits 13,630  14,513  14,719  16,271  20,004 
Short-term borrowings 758  771  748  502  2,592 
Long-term debt 10,595  10,576  10,586  10,723  5,743 
Total interest expense 24,983  25,860  26,053  27,496  28,339 
Net interest income 183,547  194,032  190,536  189,457  194,812 
Provision for credit losses (2,000) (10,000) 5,000  (19,000) (6,000)
Net interest income after provision for credit losses 185,547  204,032  185,536  208,457  200,812 
Non-interest income     
Service charges on deposit accounts 6,022  4,702  4,622  4,634  4,716 
Wealth management and trust fee income 3,912  3,793  3,382  3,143  2,855 
Brokered loan fees 3,970  5,678  6,032  6,933  9,311 
Servicing income 237  277  292  5,935  9,009 
Investment banking and trading income 4,179  6,456  4,127  8,071  5,787 
Net gain/(loss) on sale of loans held for sale     (1,185) (3,070) 5,572 
Other 1,962  10,553  7,509  11,993  7,103 
Total non-interest income 20,282  31,459  24,779  37,639  44,353 
Non-interest expense     
Salaries and benefits 100,098  89,075  87,503  86,830  87,522 
Occupancy expense 8,885  8,769  8,324  7,865  8,274 
Marketing 4,977  4,286  2,123  1,900  1,697 
Legal and professional 10,302  12,673  11,055  9,147  8,277 
Communications and technology 14,700  16,490  28,374  14,352  15,969 
FDIC insurance assessment 3,981  4,688  4,500  5,226  6,613 
Servicing-related expenses   25  2,396  12,355  12,989 
Other 10,149  10,643  8,712  11,385  8,975 
Total non-interest expense 153,092  146,649  152,987  149,060  150,316 
Income before income taxes 52,737  88,842  57,328  97,036  94,849 
Income tax expense 13,087  23,712  13,938  23,555  22,911 
Net income 39,650  65,130  43,390  73,481  71,938 
Preferred stock dividends 4,313  4,313  4,312  6,317  3,779 
Net income available to common shareholders$35,337 $60,817 $39,078 $67,164 $68,159 


TEXAS CAPITAL BANCSHARES, INC.
TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)
(dollars in thousands)
 1st Quarter 2022 4th Quarter 2021 3rd Quarter 2021 2nd Quarter 2021 1st 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(1)$3,669,257$17,7431.96% $3,608,503$12,2251.34% $3,775,812$10,6841.12% $3,543,270$11,3691.29% $3,422,571$10,3591.23%
Interest-bearing cash and cash equivalents 8,552,300 3,5710.17%  9,760,735 3,7330.15%  9,046,095 3,6060.16%  11,583,759 2,9610.10%  11,845,547 2,9330.10%
Loans held for sale 7,633 1136.01%  8,348 512.41%  18,791 541.14%  93,164 7813.36%  243,326 1,5952.66%
Loans held for investment, mortgage finance 5,732,901 43,4663.07%  7,901,534 57,9492.91%  7,987,521 58,9132.93%  7,462,223 57,4013.09%  8,177,759 64,9423.22%
Loans held for investment(1)(2) 15,686,319 144,1343.73%  15,348,322 146,4363.79%  15,266,167 143,8643.74%  15,242,975 144,9783.81%  15,457,888 143,9353.78%
Less: Allowance for credit losses on loans 212,612    223,034    220,984    241,676    254,697  
Loans held for investment, net 21,206,608 187,6003.59%  23,026,822 204,3853.52%  23,032,704 202,7773.49%  22,463,522 202,3793.61%  23,380,950 208,8773.62%
Total earning assets 33,435,798 209,0272.54%  36,404,408 220,3942.40%  35,873,402 217,1212.40%  37,683,715 217,4902.31%  38,892,394 223,7642.33%
Cash and other assets 819,486    835,293    855,555    996,946    1,064,679  
Total assets$34,255,284   $37,239,701   $36,728,957   $38,680,661   $39,957,073  
                    
Liabilities and Stockholders’ Equity                   
Transaction deposits$2,432,687$3,9620.66% $3,007,337$4,6640.62% $3,012,547$4,7370.62% $3,795,152$5,3950.57% $3,991,966$5,8610.60%
Savings deposits 10,420,545 8,5830.33%  10,529,645 8,4190.32%  10,044,995 8,2620.33%  11,296,382 8,9900.32%  12,889,974 10,7880.34%
Time deposits 1,038,722 1,0850.42%  1,276,800 1,4300.44%  1,640,562 1,7200.42%  1,755,993 1,8860.43%  2,204,242 3,3550.62%
Total interest bearing deposits 13,891,954 13,6300.40%  14,813,782 14,5130.39%  14,698,104 14,7190.40%  16,847,527 16,2710.39%  19,086,182 20,0040.43%
Short-term borrowings 1,770,781 7580.17%  2,267,013 7710.13%  2,299,692 7480.13%  2,349,718 5020.09%  2,686,398 2,5920.39%
Long-term debt 929,005 10,5954.63%  928,307 10,5764.52%  927,626 10,5864.53%  881,309 10,7234.88%  464,731 5,7435.01%
Total interest bearing liabilities 16,591,740 24,9830.61%  18,009,102 25,8600.57%  17,925,422 26,0530.58%  20,078,554 27,4960.55%  22,237,311 28,3390.52%
Non-interest bearing deposits 14,235,749    15,804,061    15,363,568    15,139,546    14,421,505  
Other liabilities 243,141    238,833    275,317    274,401    309,644  
Stockholders’ equity 3,184,654    3,187,705    3,164,650    3,188,160    2,988,613  
Total liabilities and stockholders’ equity$34,255,284   $37,239,701   $36,728,957   $38,680,661   $39,957,073  
Net interest income(1) $184,044   $194,534   $191,068   $189,994   $195,425 
Net interest margin  2.23%   2.12%   2.11%   2.02%   2.04%

(1) Taxable equivalent rates used where applicable.
(2) Average balances include non-accrual loans which are stated net of unearned income.

 


FAQ

What were Texas Capital Bancshares' first quarter 2022 earnings?

Texas Capital Bancshares reported a net income of $39.7 million, or $0.69 per diluted share, for Q1 2022.

How did interest rates affect Texas Capital Bancshares' mortgage finance loans?

The rapid increase in interest rates led to a decline in mortgage finance loans, impacting overall income.

What is the current status of Texas Capital Bancshares' deposits as of Q1 2022?

Total deposits decreased to $25.4 billion in Q1 2022, down from $28.1 billion in the previous quarter.

What improvements were reported in credit quality for Texas Capital Bancshares?

The bank reported net recoveries of $512,000 during Q1 2022, with criticized loans decreasing to $476.1 million.

What are the capital ratios for Texas Capital Bancshares as of March 31, 2022?

As of March 31, 2022, the CET1 ratio was 11.5%, tier 1 capital was 13.0%, and total capital was 15.7%.

Texas Capital Bancshares, Inc.

NASDAQ:TCBI

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Banks - Regional
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