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

October 23, 2009 | About:
10qk

10qk

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Texas Capital Bancshares Inc. (TCBI) filed Quarterly Report for the period ended 2009-09-30.

Texas Capital Bancshares' primary subsidiary is Texas Capital Bank a commercial bank that delivers highly personalized financial services to Texas-based businesses and private client individuals. Headquartered in Dallas the bank has full-service locations in Austin Dallas Fort Worth Houston Plano and San Antonio. Texas Capital Bancshares Inc. has a market cap of $544.8 million; its shares were traded at around $15.8 with a P/E ratio of 25.5 and P/S ratio of 2. Texas Capital Bancshares Inc. had an annual average earning growth of 32.2% over the past 5 years.

Highlight of Business Operations:

We reported net income of $5.4 million, or $.15 per diluted common share, for the third quarter of 2009 compared to $7.6 million, or $.27 per diluted common share, for the third quarter of 2008. Return on average equity was 4.46% and return on average assets was .40% for the third quarter of 2009, compared to 9.12% and .65%, respectively, for the third quarter of 2008. Net income for the nine months ended September 30, 2009, totaled $18.0 million compared to $21.4 million for the same period in 2008. Net income available to common shareholders was $12.6 million, or $.37 per diluted common share, for the nine months ended September 30, 2009, compared to $21.4 million, or $.79 per diluted common share, for the same period in 2008. Return on average equity was 5.11% and return on average assets was .46% for the nine months ended September 30, 2009 compared to 9.03% and .64%, respectively, for the same period in 2008.

Net income decreased $2.2 million, or 29%, for the three months ended September 30, 2009, and decreased $3.4 million, or 16%, respectively, for the nine months ended September 30, 2009 compared to the same period in 2008; and net income available to common shareholders for the nine months ended September 30, 2009 decreased $8.8 million, or 41%, compared to the same period in 2008. The $2.2 million decrease during the three months ended September 30, 2009 was primarily the result of a $9.5 million increase in the provision for loan losses and a $9.4 million increase in non-interest expense, offset by a $13.3 million increase in net interest income, a $2.2 million increase in non-interest income and a $1.1 million decrease in income tax expense. The $3.4 million decrease during the nine months ended September 30, 2009 was primarily the result of a $17.2 million increase in the provision for loan losses and a $21.5 million increase in non-interest expense, offset by a $28.6 million increase in net interest income, a $4.9 million increase in non-interest income and a $1.9 million decrease in income tax expense.

Average non-interest bearing deposits increased from $196.6 million for the third quarter of 2008 to $764.6 million, and average stockholders equity increased from $330.1 million to $476.1 million for the same periods. Average interest bearing liabilities increased $347.5 million from the third quarter of 2008, which included a $332.6 million increase in interest bearing deposits and a $14.9 million increase in other borrowings. The significant increase in average other borrowings is a result of the combined effects of maturities of transaction-specific deposits and growth in loans during the third quarter of 2009. The average cost of interest bearing liabilities decreased from 2.58% for the quarter ended September 30, 2008 to 1.04% for the same period of 2009.

Net interest income was $141.6 million for the nine months ended September 30, 2009, compared to $113.0 million for the same period of 2008. The increase was due to an increase in average earning assets of $797.3 million as compared to the third quarter of 2008. The increase in average earning assets included a $516.6 million increase in average loans held for investment and an increase of $359.0 million in loans held for sale, offset by a $73.1 million decrease in average securities. For the nine months ended September 30, 2009, average net loans and securities represented 93% and 7%, respectively, of average earning assets compared to 90% and 10% in the same period of 2008.

Average non-interest bearing deposits increased from $517.0 million for the first nine months of 2008 to $709.1 million, and average stockholders equity increased from $316.3 million to $470.1 million for the same periods. Average interest bearing liabilities increased $492.7 million compared to the first nine months of 2008, which included a $100.1 million increase in interest bearing deposits and a $392.5 million increase in other borrowings. The significant increase in average other borrowings is a result of the combined effects of maturities of transaction-specific deposits and growth in loans during the first nine months of 2009. The average cost of interest bearing liabilities decreased from 2.87% for the nine months ended September 30, 2008 to 1.19% for the same period of 2009.

The aggregate loan portfolio at September 30, 2009 increased $294.5 million from December 31, 2008 to $4.8 billion. Commercial loans, construction loans, real estate loans, leases and loans held for sale increased $118.1 million, $44.5 million, $96.4 million, $10.7 million and $53.4 million, respectively. Consumer loans decreased $6.3 million. We anticipate that overall loan growth during the remainder of 2009 will be down from prior years as a result of tightened credit standards and reduced demand for credit due to overall economic conditions.

Read the The complete ReportTCBI is in the portfolios of NWQ Managers of NWQ Investment Management Co.

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10qk
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