Texas Capital Bancshares Announces Operating Results for Q3 2012

DALLAS--(BUSINESS WIRE)--

Texas Capital Bancshares, Inc. TCBI, the parent company of Texas Capital Bank, announced earnings and operating results for the third quarter of 2012.

• Net income increased 10% on a linked quarter basis and increased 50% from Q3 2011
• EPS increased 5% on a linked quarter basis and increased 43% for the third quarter of 2012 as compared to the same quarter of 2011
• Demand deposits increased 5% and total deposits increased 1% on a linked quarter basis and grew 27% and 22%, respectively, from Q3 2011
• Loans held for investment increased 5% and total loans increased 8% on a linked quarter basis and grew 24% and 30%, respectively, from Q3 2011

“Texas Capital experienced outstanding results for the third quarter of 2012,” said George Jones, CEO. “During the quarter we successfully completed offerings of equity and debt capital. By leveraging the new capital effectively with strong growth in loans, we have produced record earnings and excellent returns. We believe we are demonstrating the value of our business model and why Texas Capital has become the Best Business Bank in Texas.^®”

FINANCIAL SUMMARY
(dollars and shares in thousands)
		Q3 2012				Q3 2011				% Change
QUARTERLY OPERATING RESULTS(1)
Net Income		$	32,570			$	21,710			50	%
Diluted EPS		$	.80			$	.56			43	%
ROA			1.40	%			1.25	%
ROE			17.27	%			14.93	%
Diluted Shares			40,756				38,435
BALANCE SHEET(1)
Total Assets		$	9,881,362			$	7,705,372			28	%
Demand Deposits			2,114,279				1,661,125			27	%
Total Deposits			6,717,579				5,486,463			22	%
Loans Held for Investment			6,549,089				5,302,584			24	%
Loans Held for Sale			2,818,622				1,909,567			48	%
Total Loans			9,367,711				7,212,151			30	%
Stockholders' Equity			802,406				587,944			36	%

(1) Operating results, assets and loans are reporting from continuing operations

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income from continuing operations of $32.6 million for the third quarter of 2012 compared to $21.7 million for the third quarter of 2011. On a fully diluted basis, earnings per common share from continuing operations were $.80 for the three months ended September 30, 2012, compared to $.56 for the same period last year. During the third quarter of 2012, we completed an equity offering of 2.3 million shares. The diluted share effect for the quarter was to increase diluted shares by 1.5 million shares, or 4 percent. The discussion below relates only to continuing operations.

Return on average equity was 17.27 percent and return on average assets was 1.40 percent for the third quarter of 2012, compared to 14.93 percent and 1.25 percent, respectively, for the third quarter of 2011.

Net interest income was $96.9 million for the third quarter of 2012, compared to $90.6 million in the second quarter of 2012 and $79.2 million for the third quarter of 2011. The net interest margin in the third quarter of 2012 was 4.36 percent, a 45 basis point decrease from the third quarter of 2011 and a 13 basis point decrease from the second quarter of 2012. The year over year decrease in net interest margin is due to the growth in loans with lower yields with an offsetting benefit of the reduction in funding costs. The growth in loans more than compensated for the reduction in yields and produced the strong growth in net interest income.

Average loans held for investment for the third quarter of 2012 were $6.3 billion, an increase of $1.1 billion, or 21 percent, from the third quarter of 2011 and an increase of $362.4 million, or 6 percent, from the second quarter of 2012. Average loans held for sale for the third quarter of 2012 increased $1.2 billion to $2.4 billion compared to the third quarter of 2011 and increased $369.6 million from the second quarter of 2012.

Average total deposits for the third quarter of 2012 increased $1.4 billion from the third quarter of 2011 and increased $407.9 million from the second quarter of 2012. For the same periods, the average balance of demand deposits increased $485.6 million, or 32 percent, to $2.0 billion from $1.5 billion during the third quarter of 2011 and increased $146.2 million, or 8 percent, from the second quarter of 2012.

In the third quarter of 2012, we experienced decreases in the ratios of non-performing assets and credit losses to loans held for investment. Credit costs, including the provision for credit losses and valuation charges related to other real estate owned (“OREO”) totaled $3.1 million in the third quarter of 2012 compared to $8.7 million in the third quarter of 2011 and $4.1 million in the second quarter of 2012. We recorded a $3.0 million provision for credit losses in the third quarter of 2012 compared to $7.0 million in the third quarter of 2011 and $1.0 million in the second quarter of 2012. At September 30, 2012, the combined reserve decreased to 1.18 percent of loans held for investment as compared to 1.32 percent at September 30, 2011 and 1.21 percent at June 30, 2012. In management's opinion, the reserve is appropriate and is derived from consistent application of the methodology for establishing the adequacy of reserves for Texas Capital Bank's loan portfolio. In the third quarter of 2012, net charge-offs were $1.2 million compared to net charge-offs of $6.3 million in the third quarter of 2011 and net charge-offs of $533,000 in the second quarter of 2012. Non-accrual loans were $57.3 million, or .87 percent of loans held for investment at the end of the third quarter of 2012, $66.7 million, or 1.26 percent, at the end of the third quarter of 2011 and $56.4 million, or .91 percent, at the end of the second quarter 2012. At September 30, 2012, total OREO was $19.1 million compared to $35.8 million at the end of the third quarter of 2011, and $27.9 million at the end of the second quarter of 2012. The OREO balance of $19.1 million at September 30, 2012 is stated net of a $4.7 million valuation allowance. The valuation charge for OREO reflected in non-interest expense was $64,000 in the third quarter of 2012 compared to $1.7 million in the third quarter of 2011 and $3.1 million in the second quarter of 2012.

Non-interest income increased $2.9 million during the third quarter of 2012, or 39 percent, compared to the same period of 2011 primarily related to a $2.0 million increase in brokered loan fees earned in the mortgage warehouse lending division.

Non-interest expense for the third quarter of 2012 increased $7.3 million, or 16 percent, to $53.5 million from $46.2 million in the third quarter of 2011. The increase is primarily related to a $5.4 million increase in salaries and employee benefits to $31.0 million from $25.6 million, which was primarily due to general business growth and costs of performance-based incentives resulting from the increase in stock price. Marketing expense and legal and professional expense increased $1.0 million and $1.3 million, respectively, from the third quarter of 2011 primarily due to general business growth. Allowance and other carrying costs for OREO expense decreased $1.6 million to $552,000, which included a $64,000 valuation expense during the third quarter of 2012. The $64,000 valuation expense in the third quarter of 2012 related to direct write-downs, compared to $1.7 million in valuation expense in the third quarter 2011, $61,000 of which related to direct write-downs and $1.6 million related to increasing the valuation allowance.

Stockholders' equity increased by 36 percent from $587.9 million at September 30, 2011 to $802.4 million at September 30, 2012, primarily related to the offering of 2.3 million common shares for net proceeds of $87 million and retention of net income. In addition to the equity offering, we also completed a subordinated debt offering of $111 million, increasing our total regulatory capital by approximately $198 million. The Bank is well capitalized under regulatory guidelines and at September 30, 2012, the Company's ratio of tangible common equity to total tangible assets was 7.9 percent.

ABOUT TEXAS CAPITAL BANCSHARES, INC.

Texas Capital Bancshares, Inc. 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 and San Antonio.

This news release may be deemed to include forward-looking statements which are based on Texas Capital's current estimates or expectations of future events or future results. Texas Capital is under no obligation, and expressly disclaims such obligation, to update, alter or revise its forward-looking statements, whether as a result of new information, future events, or otherwise. A number of factors, many of which are beyond Texas Capital's 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 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 prospectus supplements, the Annual Report on Form 10-K and other filings made by Texas Capital with the Securities and Exchange Commission (SEC).

TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
		3rd Quarter				2nd Quarter				1st Quarter				4th Quarter				3rd Quarter
			2012				2012				2012				2011				2011
CONSOLIDATED STATEMENT OF INCOME
Interest income		$	102,011			$	95,546			$	93,131			$	92,967			$	83,263
Interest expense			5,156				4,906				4,902				4,820				4,065
Net interest income			96,855				90,640				88,229				88,147				79,198
Provision for credit losses			3,000				1,000				3,000				6,000				7,000
Net interest income after provision for credit losses			93,855				89,640				85,229				82,147				72,198
Non-interest income			10,552				10,462				9,190				8,994				7,603
Non-interest expense			53,521				53,973				52,276				50,353				46,186
Income from continuing operations before income taxes			50,886				46,129				42,143				40,788				33,615
Income tax expense			18,316				16,506				15,062				15,043				11,905
Income from continuing operations			32,570				29,623				27,081				25,745				21,710
Income (loss) from discontinued operations (after-tax)			(34	)			(1	)			4				(5	)			(7	)
Net income		$	32,536			$	29,622			$	27,085			$	25,740			$	21,703
Diluted EPS from continuing operations		$	.80			$	.76			$	.70			$	.67			$	.56
Diluted EPS		$	.80			$	.76			$	.70			$	.67			$	.56
Diluted shares			40,755,733				39,141,544				38,914,241				38,609,094				38,435,386
CONSOLIDATED BALANCE SHEET DATA
Total assets		$	9,881,362			$	9,144,360			$	8,559,917			$	8,137,225			$	7,705,372
Loans held for investment			6,549,089				6,234,692				5,792,349				5,572,371				5,302,584
Loans held for sale			2,818,622				2,408,032				2,255,281				2,080,081				1,909,567
Securities			107,288				114,964				123,828				143,710				142,895
Demand deposits			2,114,279				2,019,473				1,751,443				1,751,944				1,661,125
Total deposits			6,717,579				6,660,290				6,063,558				5,556,257				5,486,463
Other borrowings			2,046,169				1,609,039				1,657,728				1,768,116				1,451,894
Subordinated notes			111,000				–				–				–				–
Long-term debt			113,406				113,406				113,406				113,406				113,406
Stockholders' equity			802,406				680,705				647,341				616,331				587,944
End of period shares outstanding			40,580,283				38,114,012				37,912,054				37,666,291				37,457,762
Book value (excluding securities gains/losses)		$	19.68			$	17.75			$	16.96			$	16.24			$	15.56
Tangible book value (excluding securities gains/losses)		$	19.18			$	17.22			$	16.42			$	15.69			$	15.01
SELECTED FINANCIAL RATIOS
Net interest margin			4.36	%			4.49	%			4.54	%			4.60	%			4.81	%
Return on average assets			1.40	%			1.40	%			1.33	%			1.28	%			1.25	%
Return on average equity			17.27	%			18.08	%			17.36	%			17.05	%			14.93	%
Non-interest income to earning assets			.47	%			.52	%			.47	%			.47	%			.46	%
Efficiency ratio			49.8	%			53.4	%			53.7	%			51.8	%			53.2	%
Efficiency ratio (excluding OREO valuation/write-down)			49.8	%			50.3	%			50.8	%			50.7	%			51.3	%
Non-interest expense to earning assets			2.40	%			2.67	%			2.69	%			2.62	%			2.80	%
Non-interest expense to earning assets (excluding OREO valuation charge)			2.40	%			2.52	%			2.55	%			2.57	%			2.70	%
Tangible common equity to total tangible assets			7.9	%			7.2	%			7.3	%			7.3	%			7.3	%
Tier 1 capital ratio			10.4	%			9.5	%			9.5	%			9.6	%			9.7	%
Total capital ratio			12.6	%			10.5	%			10.4	%			10.6	%			10.7	%
Tier 1 leverage ratio (1)			9.6	%			9.0	%			8.9	%			8.8	%			9.8	%

(1) Non-GAAP measure equal to end of period shareholders' equity less goodwill and intangible assets divided by end of period total assets less goodwill and intangible assets.

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
		September 30,				September 30,				%
			2012				2011			Change
Assets
Cash and due from banks		$	88,220			$	83,489			6	%
Interest-bearing deposits			60,971				37,080			64	%
Securities, available-for-sale			107,288				142,895			(25	)%
Loans held for sale			2,818,622				1,909,567			48	%
Loans held for sale from discontinued operations			304				395			(23	)%
Loans held for investment (net of unearned income)			6,549,089				5,302,584			24	%
Less: Allowance for loan losses			73,722				67,897			9	%
Loans held for investment, net			6,475,367				5,234,687			24	%
Premises and equipment, net			11,280				11,596			(3	)%
Accrued interest receivable and other assets			299,582				265,412			13	%
Goodwill and intangibles, net			20,032				20,646			(3	)%
Total assets		$	9,881,666			$	7,705,767			28	%
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing		$	2,114,279			$	1,661,125			27	%
Interest bearing			4,171,405				3,204,985			30	%
Interest bearing in foreign branches			431,895				620,353			(30	)%
Total deposits			6,717,579				5,486,463			22	%
Accrued interest payable			1,039				671			55	%
Other liabilities			90,067				65,389			38	%
Federal funds purchased			473,330				321,930			47	%
Repurchase agreements			22,788				27,059			(16	)%
Other borrowings			1,550,051				1,102,905			41	%
Subordinated notes			111,000				–			100	%
Trust preferred subordinated debentures			113,406				113,406			-
Total liabilities			9,079,260				7,117,823			28	%
Stockholders' equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares – 10,000,000
Issued shares			–				–			–
Common stock, $.01 par value:
Authorized shares – 100,000,000
Issued shares – 40,580,700 and 37,458,179 at September 30, 2012 and 2011, respectively			406				374			9	%
Additional paid-in capital			447,104				346,405			29	%
Retained earnings			351,026				236,043			49	%
Treasury stock (shares at cost: 417 at September 30, 2012 and 2011)			(8	)			(8	)		-
Accumulated other comprehensive income, net of taxes			3,878				5,130			(24	)%
Total stockholders' equity			802,406				587,944			36	%
Total liabilities and stockholders' equity		$	9,881,666			$	7,705,767			28	%

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
		Three Months Ended								Nine Months Ended
		September 30								September 30
			2012				2011				2012				2011
Interest income
Interest and fees on loans		$	100,830			$	81,692			$	286,895			$	223,241
Securities			1,125				1,524				3,635				5,050
Federal funds sold			2				3				7				36
Deposits in other banks			54				44				151				306
Total interest income			102,011				83,263				290,688				228,633
Interest expense
Deposits			3,378				3,191				10,332				11,479
Federal funds purchased			268				128				789				329
Repurchase agreements			3				2				10				6
Other borrowings			607				110				1,534				124
Subordinated notes			208				–				208				–
Trust preferred subordinated debentures			692				634				2,091				1,905
Total interest expense			5,156				4,065				14,964				13,843
Net interest income			96,855				79,198				275,724				214,790
Provision for credit losses			3,000				7,000				7,000				22,500
Net interest income after provision for credit losses			93,855				72,198				268,724				192,290
Non-interest income
Service charges on deposit accounts			1,684				1,585				4,912				4,976
Trust fee income			1,216				1,091				3,562				3,111
Bank owned life insurance (BOLI) income			549				533				1,658				1,595
Brokered loan fees			4,839				2,849				12,618				7,927
Other			2,264				1,545				7,454				5,629
Total non-interest income			10,552				7,603				30,204				23,238
Non-interest expense
Salaries and employee benefits			31,009				25,596				90,258				73,877
Net occupancy expense			3,653				3,367				10,936				10,120
Marketing			3,472				2,455				9,469				7,311
Legal and professional			4,916				3,647				12,237				10,634
Communications and technology			2,885				2,210				8,088				7,141
FDIC insurance assessment			1,332				1,465				4,497				5,948
Allowance and other carrying costs for OREO			552				2,150				7,706				7,203
Other			5,702				5,296				16,579				15,614
Total non-interest expense			53,521				46,186				159,770				137,848
Income from continuing operations before income taxes			50,886				33,615				139,158				77,680
Income tax expense			18,316				11,905				49,884				27,323
Income from continuing operations			32,570				21,710				89,274				50,357
Income (loss) from discontinued operations (after-tax)			(34	)			(7	)			(31	)			(121	)
Net income		$	32,536			$	21,703			$	89,243			$	50,236
Basic earnings per common share:
Income from continuing operations		$	.82			$	.58			$	2.32			$	1.35
Net income		$	.82			$	.58			$	2.32			$	1.35
Diluted earnings per common share:
Income from continuing operations		$	.80			$	.56			$	2.25			$	1.31
Net income		$	.80			$	.56			$	2.25			$	1.31

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
		3rd Quarter				2nd Quarter				1st Quarter				4th Quarter				3rd Quarter
			2012				2012				2012				2011				2011
Reserve for loan losses:
Beginning balance		$	72,404			$	71,992			$	70,295			$	67,897			$	67,748
Loans charged-off:
Commercial			1,154				1,048				462				1,348				1,523
Real estate – construction			–				–				–				–				–
Real estate – term			284				56				559				2,438				5,049
Consumer			49				–				–				–				–
Leases			49				26				95				238				(16	)
Total			1,536				1,130				1,116				4,024				6,556
Recoveries:
Commercial			132				191				159				390				109
Real estate – construction			10				–				–				–				5
Real estate – term			130				348				108				45				152
Consumer			18				3				5				4				1
Leases			16				55				16				171				36
Total recoveries			306				597				288				610				303
Net charge-offs			1,230				533				828				3,414				6,253
Provision for loan losses			2,548				945				2,525				5,812				6,402
Ending balance		$	73,722			$	72,404			$	71,992			$	70,295			$	67,897
Reserve for off-balance sheet credit losses:
Beginning balance		$	2,992			$	2,937			$	2,462			$	2,274			$	1,676
Provision for off-balance sheet credit losses			452				55				475				188				598
Ending balance		$	3,444			$	2,992			$	2,937			$	2,462			$	2,274
Total reserves for credit losses		$	77,166			$	75,396			$	74,929			$	72,757			$	70,171
Total provision for credit losses		$	3,000			$	1,000			$	3,000			$	6,000			$	7,000
Reserve to loans held for investment(2)			1.13	%			1.16	%			1.24	%			1.26	%			1.28	%
Reserve to average loans held for investment(2)			1.16	%			1.22	%			1.27	%			1.30	%			1.30	%
Net charge-offs to average loans(1)(2)			.08	%			.04	%			.06	%			.25	%			.48	%
Net charge-offs to average loans for last twelve months(1)(2)			.10	%			.20	%			.40	%			.58	%			.90	%
Total provision for credit losses to average loans(1)(2)			.19	%			.07	%			.21	%			.44	%			.53	%
Combined reserves for credit losses to loans held for investment(2)			1.18	%			1.21	%			1.29	%			1.31	%			1.32	%
Non-performing assets (NPAs):
Non-accrual loans		$	57,275			$	56,433			$	50,160			$	54,580			$	66,714
Other real estate owned (OREO)(4)			19,079				27,882				32,601				34,077				35,796
Total		$	76,354			$	84,315			$	82,761			$	88,657			$	102,510
Non-accrual loans to loans(2)			.87	%			.91	%			.87	%			.98	%			1.26	%
Total NPAs to loans plus OREO(2)			1.16	%			1.35	%			1.42	%			1.58	%			1.92	%
Total NPAs to earning assets			.81	%			.97	%			1.01	%			1.14	%			1.40	%
Reserve for loan losses to non-accrual loans		1.3x				1.3x				1.4x				1.3x				1.0x
Restructured loans		$	9,145			$	13,943			$	12,582			$	25,104			$	24,963
Loans past due 90 days and still accruing(3)		$	3,622			$	4,421			$	5,941			$	5,467			$	3,003
Loans past due 90 days to loans(2)			.06	%			.07	%			.10	%			.10	%			.06	%

(1) Interim period ratios are annualized.
(2) Excludes loans held for sale.
(3) At September 30, 2012, loans past due 90 days and still accruing includes premium finance loans of $2.7 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.
(4) At September 30, 2012, OREO balance is net of $4.7 million valuation allowance.

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in thousands)
		3rd Quarter				2nd Quarter				1st Quarter			4th Quarter				3rd Quarter
			2012				2012				2012			2011				2011
Interest income
Interest and fees on loans		$	100,830			$	94,291			$	91,774		$	91,512			$	81,692
Securities			1,125				1,203				1,307			1,408				1,524
Federal funds sold			2				4				1			1				3
Deposits in other banks			54				48				49			46				44
Total interest income			102,011				95,546				93,131			92,967				83,263
Interest expense
Deposits			3,378				3,482				3,472			3,471				3,191
Federal funds purchased			268				240				281			273				128
Repurchase agreements			3				4				3			4				2
Other borrowings			607				492				435			404				110
Subordinated notes			208				–				–			–				–
Trust preferred subordinated debentures			692				688				711			668				634
Total interest expense			5,156				4,906				4,902			4,820				4,065
Net interest income			96,855				90,640				88,229			88,147				79,198
Provision for credit losses			3,000				1,000				3,000			6,000				7,000
Net interest income after provision for credit losses			93,855				89,640				85,229			82,147				72,198
Non-interest income
Service charges on deposit accounts			1,684				1,624				1,604			1,504				1,585
Trust fee income			1,216				1,232				1,114			1,108				1,091
Bank owned life insurance (BOLI) income			549				588				521			500				533
Brokered loan fees			4,839				4,128				3,651			3,408				2,849
Other			2,264				2,890				2,300			2,474				1,545
Total non-interest income			10,552				10,462				9,190			8,994				7,603
Non-interest expense
Salaries and employee benefits			31,009				30,230				29,019			26,658				25,596
Net occupancy expense			3,653				3,679				3,604			3,537				3,367
Marketing			3,472				3,174				2,823			3,798				2,455
Legal and professional			4,916				3,330				3,991			4,362				3,647
Communications and technology			2,885				2,720				2,483			2,468				2,210
FDIC insurance assessment			1,332				1,596				1,569			1,595				1,465
Allowance and other carrying costs for OREO			552				3,812				3,342			2,383				2,150
Other			5,702				5,432				5,306			5,552				5,296
Total non-interest expense			53,521				53,973				52,276			50,353				46,186
Income from continuing operations before income taxes			50,886				46,129				42,143			40,788				33,615
Income tax expense			18,316				16,506				15,062			15,043				11,905
Income from continuing operations			32,570				29,623				27,081			25,745				21,710
Income (loss) from discontinued operations (after-tax)			(34	)			(1	)			4			(5	)			(7	)
Net income		$	32,536			$	29,622			$	27,085		$	25,740			$	21,703

TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY – UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
Continuing Operations
(Dollars in thousands)
		3rd Quarter 2012									2nd Quarter 2012									1st Quarter 2012									4th Quarter 2011									3rd Quarter 2011
		Average Balance			Revenue/ Expense (1)			Yield/ Rate			Average Balance			Revenue/ Expense (1)			Yield/ Rate			Average Balance			Revenue/ Expense (1)			Yield/ Rate			Average Balance			Revenue/ Expense (1)			Yield/ Rate			Average Balance			Revenue/ Expense (1)			Yield/ Rate
Assets
Securities – Taxable		$	84,583		$	881		4.14	%		$	91,623		$	948		4.16	%		$	109,003		$	1,041		3.84	%		$	109,761		$	1,126		4.07	%		$	115,871		$	1,214		4.16	%
Securities – Non-taxable(2)			25,717			376		5.82	%			26,817			393		5.89	%			28,506			409		5.77	%			30,065			434		5.73	%			33,051			477		5.73	%
Federal funds sold			9,360			2		0.09	%			8,077			4		0.20	%			6,848			1		0.06	%			8,505			1		0.05	%			20,864			3		0.06	%
Deposits in other banks			64,859			54		0.33	%			60,416			48		0.32	%			49,470			49		0.41	%			42,644			46		0.43	%			36,495			44		0.48	%
Loans held for sale			2,432,027			24,433		4.00	%			2,062,449			21,087		4.11	%			2,036,622			21,315		4.21	%			2,093,883			22,332		4.23	%			1,191,375			13,340		4.44	%
Loans held for investment			6,313,263			76,397		4.81	%			5,950,913			73,204		4.95	%			5,660,993			70,459		5.01	%			5,395,253			69,180		5.09	%			5,219,496			68,352		5.20	%
Less reserve for loan losses			72,373			–		–				71,779			–		–				70,261			–		–				67,214			–		–				66,215			–		–
Loans, net of reserve			8,672,917			100,830		4.63	%			7,941,583			94,291		4.78	%			7,627,354			91,774		4.84	%			7,421,922			91,512		4.89	%			6,344,656			81,692		5.11	%
Total earning assets			8,857,436			102,143		4.59	%			8,128,516			95,684		4.73	%			7,821,181			93,274		4.80	%			7,612,897			93,119		4.85	%			6,550,937			83,430		5.05	%
Cash and other assets			399,428									394,086									388,009									382,577									333,563
Total assets		$	9,256,864								$	8,522,602								$	8,209,190								$	7,995,474								$	6,884,500
Liabilities and Stockholders' Equity
Transaction deposits		$	803,776		$	247		0.12	%		$	694,463		$	198		0.11	%		$	565,319		$	140		0.10	%		$	429,980		$	33		0.03	%		$	412,203		$	52		0.05	%
Savings deposits			2,922,852			2,185		0.30	%			2,664,598			2,107		0.32	%			2,535,412			2,083		0.33	%			2,422,465			2,062		0.34	%			2,253,123			1,664		0.29	%
Time deposits			491,783			576		0.47	%			584,581			831		0.57	%			624,823			920		0.59	%			534,441			927		0.69	%			468,196			1,032		0.87	%
Deposits in foreign branches			431,412			370		0.34	%			444,478			346		0.31	%			409,422			329		0.32	%			578,728			449		0.31	%			588,221			443		0.30	%
Total interest bearing deposits			4,649,823			3,378		0.29	%			4,388,120			3,482		0.32	%			4,134,976			3,472		0.34	%			3,965,614			3,471		0.35	%			3,721,743			3,191		0.34	%
Other borrowings			1,639,953			878		0.21	%			1,428,575			736		0.21	%			1,554,716			719		0.19	%			1,588,198			681		0.17	%			894,073			240		0.11	%
Subordinated notes			12,065			208		6.86	%			–			–		–				–			–		–				–			–		–				–			–		–
Trust preferred subordinated debentures			113,406			692		2.43	%			113,406			688		2.44	%			113,406			711		2.52	%			113,406			668		2.34	%			113,406			634		2.22	%
Total interest bearing liabilities			6,415,247			5,156		0.32	%			5,930,101			4,906		0.33	%			5,803,098			4,902		0.34	%			5,667,218			4,820		0.34	%			4,729,222			4,065		0.34	%
Demand deposits			2,010,694									1,864,456									1,700,390									1,659,132									1,525,087
Other liabilities			80,810									69,076									78,108									70,142									53,233
Stockholders' equity			750,113									658,969									627,594									598,982									576,958
Total liabilities and stockholders' equity		$	9,256,864								$	8,522,602								$	8,209,190								$	7,995,474								$	6,884,500
Net interest income					$	96,987								$	90,778								$	88,372								$	88,299								$	79,365
Net interest margin								4.36	%								4.49	%								4.54	%								4.60	%								4.81	%

(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.