Texas Capital Bancshares in Dallas reported higher net income because of an increase in correspondent lending income and a wider net interest margin.

Keith Cargill, CEO of Texas Capital Bancshares.
Texas Capital, led by CEO Keith Cargill, had fewer headaches tied to energy lending during the second quarter.

The $23 billion-asset company said in a press release Wednesday that its second-quarter profit rose 31% from a year earlier to $51.1 million, or 97 cents a share.

Net interest income rose 16.5% to $183 million. Total loans increased by 13% to $20.3 billion, while the net interest margin widened by 39 basis points to 3.57%. The loan-loss provision fell 19% to $13 million.

Net chargeoffs increased by 3.3% to $12.4 million. Net chargeoffs tied to energy loans fell by 47% to $6.4 million.

Noninterest income rose 35% to $18.8 million, largely reflecting $3.7 million in servicing income tied to a correspondent lending business the company formed in late 2015. Service charges on deposit accounts increased by 27% to $3.1 million; wealth management and trust fees were up 28% to $1.4 million.

Noninterest expenses increased by 19% to $111.8 million. Communications and technology costs increased by 86% to $11.9 million.

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Allison Prang

Allison Prang

Allison Prang is a reporter for American Banker, where she writes about community banks.