Texas Capital Bancshares in Dallas reported an increase in third-quarter earnings, as higher lending compensated for lower yields.

The $14.3 billion-asset bank earned $36.8 million, or 10% more than in the same period last year. Its diluted earnings per share were 78 cents, beating a Bloomberg analyst poll by two cents.

Strong performance in the bank's loan portfolio boosted earnings. Total loans grew 31%, to $13.5 billion.

Net interest income climbed 16%, to $125 million. The net interest margin dropped 44 basis points, to 3.77%, mostly because of lower loan yields and an increase in liquid assets.

Meanwhile, the bank increased its provision for bad loans by 30%, to $6.5 million.

Noninterest income held steady from a year earlier, at $10.4 million. Service-charge revenue increased, but was offset by lower swap fees.

Operating expenses rose 16%, to $71.9 million.

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