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Texas Capital Bancshares Inc. Reports Operating Results (10-Q)

October 21, 2010 | About:
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10qk

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Texas Capital Bancshares Inc. (TCBI) filed Quarterly Report for the period ended 2010-09-30.

Texas Capital Bancshares Inc. has a market cap of $644.3 million; its shares were traded at around $17.52 with a P/E ratio of 23.1 and P/S ratio of 2.4. TCBI is in the portfolios of NWQ Managers of NWQ Investment Management Co, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

We reported net income of $9.5 million, or $.25 per diluted common share, for the third quarter of 2010 compared to $5.4 million, or $.15 per diluted common share, for the third quarter of 2009. Return on average equity was 7.23% and return on average assets was .62% for the third quarter of 2010, compared to 4.46% and .40%, respectively, for the third quarter of 2009. Net income for the nine months ended September 30, 2010, totaled $25.2 million, or $.67 per diluted common share, compared to $18.0 million, or $.37 per diluted

Net income increased $4.2 million, or 78%, for the three months ended September 30, 2010, and increased $7.3 million, or 41%, for the nine months ended September 30, 2010 compared to the same period in 2009. The $4.2 million increase during the three months ended September 30, 2010 was primarily the result of an $11.0 million increase in net interest income and $968,000 increase in non-interest income, offset by a $5.5 million increase in non-interest expense and a $2.3 million increase in income tax expense. The $7.3 million increase during the nine months ended September 30, 2010 was primarily the result of a $34.1 million increase in net interest income and a $1.6 million increase in non-interest income, offset by an $8.5 million increase in the provision for credit losses, a $16.2 million increase in non-interest expense and a $3.8 million increase in income tax expense.

Net interest income was $62.6 million for the third quarter of 2010, compared to $51.6 million for the third quarter of 2009. The increase was due to an increase in average earning assets of $772.2 million as compared to the third quarter of 2009 and an increase in the net interest margin from 4.06% to 4.27%. The increase in average earning assets included a $229.8 million increase in average loans held for investment and a $534.4 million increase in loans held for sale, offset by a $80.4 million decrease in average securities. For the quarter ended September 30, 2010, average net loans and securities represented 95% and 4%, respectively, of average earning assets compared to 94% and 6% in the same quarter of 2009.

Net interest income was $175.7 million for the nine months ended September 30, 2010, compared to $141.6 million for the same period of 2009. The increase was due to an increase in average earning assets of $405.4 million as compared to September 30, 2009 and an increase in the net interest margin from 3.78% to 4.34%. The increase in average earning assets included a $318.2 million increase in average loans held for investment and a $139.9 million increase in loans held for sale, offset by a $95.9 million decrease in average securities. For the nine months ended September 30, 2010, average net loans and securities represented 95% and 4%, respectively, of average earning assets compared to 93% and 7% in the same period of 2009.

Non-interest expense for the third quarter of 2010 increased $5.5 million, or 15%, to $42.6 million from $37.1 million in the third quarter of 2009. The increase is primarily attributable to a $2.3 million increase in salaries and employee benefits to $21.9 million from $19.6 million, which was primarily due to general business growth.

Non-interest expense for the first nine months of 2010 increased $16.2 million, or 16%, to $118.9 million from $102.7 million for the same period of 2009. The increase is primarily attributable to a $9.5 million increase in salaries and employee benefits to $63.3 million from $53.8 million, which was primarily due to general business growth.

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