Texas Capital reports 3Q loss after selling $1.2B of securities
Texas Capital Bancshares in Dallas, which reported a quarterly loss after repositioning its securities portfolio and incurring restructuring costs, said it is still on track to hit its long-term performance targets.
The $31.6 billion-asset company said in a press release that it lost $65.6 million in the third quarter. The results included a $179.6 million loss from selling $1.2 billion of available-for-sale debt securities. Proceeds from the sales were reinvested into higher-yielding securities.
The company, which warned last month that it would report a quarterly loss, said that repositioning its securities portfolio should contribute $35 million to $40 million in net interest income on an annualized basis.
Texas Capital said that it incurrred $5.9 million of restructuring expenses, including $2.4 million from salaries and benefits, $476,000 in occupancy expense and $3.1 million tied to communications and technology expense. The company said the restructuring should lower annual noninterest expenses by $30 million.
The company’s core operations, excluding one-time costs, topped analyst estimates as net interest income and fee revenue increased.
“We achieved significant financial milestones this quarter as our multi-year transformation is increasingly delivering financial outcomes consistent with realized success delivering our proven and differentiated strategy,” CEO Rob Holmes said in the release.
Texas Capital lowered its annual revenue guidance to low single-digit percentage growth from a previous forecast of low- to mid-single-digit growth.