Texas Capital Bancshares Announces Operating Results For 2003
January 21, 2004
Contact:
Tricia Linderman, 214.932.6798
tricia.linderman@texascapitalbank.com
Dallas, Texas - January 21, 2004 - Texas Capital Bancshares (Nasdaq: TCBI), the
parent company of Texas Capital Bank, continued its strong growth in 2003 as
compared to 2002.
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EPS increased 88%
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Net income increased 88%
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Loans grew 23%
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Deposits grew 21%
"2003 was a significant year for the Bank as we completed a successful IPO,
celebrated our five year anniversary, reached $2.2 billion in assets, entered
Houston, our fifth targeted market, and continued to deliver on our financial
commitments," said Jody Grant, Chairman and CEO. "It was also a great year for
attracting talent, including a number of new Relationship Managers, which is
critical to the Company's future growth and profitability."
DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income of $3.6 million for the
fourth quarter of 2003 compared to $1.9 million for the fourth quarter of 2002.
On a fully diluted basis, earnings per share were $.14 for the three months
ended December 31, 2003 compared to $.08 for the same period last year,
representing an increase of 75 percent. Net income for the year ended December
31, 2003 was $13.8 million compared to $7.3 million for the same period in
2002. Earnings per share on a fully diluted basis for the year ended December
31, 2003 were $.60 versus $.32 for the same period in 2002, an increase of 88%.
Return on average equity was 8.55 percent and return on average assets was .68
percent for the fourth quarter of 2003 compared to 6.07 percent and .45
percent, respectively, for the fourth quarter of 2002. The increase in net
income and continued improvement in returns on equity and assets in 2003 are
attributed to growth in net interest income and improvement in non-interest
income. Capital adequacy remained sound and was enhanced with proceeds of the
IPO during the third quarter of 2003.
Net interest income was $15.4 million for the fourth quarter of 2003, compared
to $11.8 million for the fourth quarter of 2002. The increase was due to an
increase in average earning assets of $424.1 million as compared to the fourth
quarter of 2002, with a 9 basis point increase in net interest margin. The
increase in average earning assets included a $156.8 million increase in
average net loans and a $272.8 million increase in average securities. Growth
in our core loan portfolio (excluding loans held for sale) totaled $104 million
during the fourth quarter.
Average interest bearing liabilities increased $335.8 million from the fourth
quarter of 2002, which included a $201.6 million increase in interest bearing
deposits and a $118.3 million increase in other borrowings. The increase in
interest bearing deposits includes the purchase of deposit accounts from
Bluebonnet Savings Bank, FSB in August 2003. The increase in average borrowings
was primarily related to an increase in federal funds purchased and securities
sold under repurchase agreements, and was used to supplement deposits in
funding the purchase of securities and the growth in loans. The average cost of
interest bearing liabilities decreased from 2.44 percent for the quarter ended
December 31, 2002 to 1.80 percent for the same period of 2003, reflecting the
reduction in market interest rates.
In management's opinion, overall portfolio quality remained at an appropriate
level at this stage of the economic cycle and in comparison to regional peers.
The Company reported improvements in both the level of non-performing loans and
net charge-offs from third quarter 2003 levels. In 2003, net charge-offs of
$836,000 represented .07 percent of average loans, compared to net-charge-offs
of $3.7 million, or .38% of average loans, in 2002. The provision for possible
loan losses and the reserve reflect consistent application of the methodology
for establishing management's assessment of the risks in Texas Capital Bank's
loan portfolio.
Non-interest expense for the fourth quarter of 2003 increased $1.6 million or 16
percent, to $11.6 million in the fourth quarter of 2003 from $10.0 million in
the fourth quarter of 2002, which included $1.2 million in IPO expenses. The
increase is primarily related to a $2.3 million increase in salaries and
employee benefits to $6.6 million from $4.3 million. This increase was offset
in part by the $1.2 million in IPO costs incurred in 2002. The increase in
salaries and employee benefits resulted from an increase in the total number of
employees. The increase related to general continued growth, staffing for the
new Houston office and the start-up of the residential mortgage origination
group.
During the fourth quarter, management modestly increased asset sensitivity,
positioning the Company to benefit from an improving economy and rising
interest rates. The interest sensitivity is largely due to the concentration of
assets in variable rate loans.
EARNINGS CALL
These results will be discussed today at 4:30 p.m. EST. The earnings call is
being webcast to both institutional and individual investors. Institutional
investors can access the call via CCBN's password-protected event management
site at www.streetevents.com.
Individual investors can participate in the call through CCBN's individual
investor center at www.fulldisclosure.com.
The conference call only portion may be accessed through the following numbers:
Domestic
Dial-in 800.901.5241
International
Dial-in 617.786.2963
Passcode TCBI
A replay of the conference call will be available from January 22 through
January 28 and can be accessed at the following numbers:
Domestic
Dial-in 888.286.8010
International
Dial-in 617.801.6888
Passcode 93708527
About Texas Capital Bank
Texas Capital Bancshares (Nasdaq: TCBI) is the parent company of Texas Capital
Bank, a commercial bank that delivers highly personalized financial services to
businesses and private clients. Headquartered in Dallas, the Bank has
full-service locations in Austin, Dallas, Fort Worth, Houston, Plano, and San
Antonio.
This release contains forward-looking statements, which are subject to risks and
uncertainties. A number of factors, many of which are beyond Texas Capital
Bancshares' control, could cause actual results to differ materially from
future results expressed or implied by such forward-looking statements. These
risks and uncertainties include the risk of adverse impacts from general
economic conditions, competition, interest rate sensitivity and exposure to
regulatory and legislative changes. These and other factors that could cause
results to differ materially from those described in the forward-looking
statements can be found in the registration statement on Form S-3, as amended,
relating to the initial public offering and other filings made by Texas Capital
Bancshares with the Securities and Exchange Commission.
Click to View Financial Statements (requires Free Acrobat Reader)
