Texas Capital Bancshares Announces Operating Results for 2006

Texas Capital Bancshares, Inc. (Nasdaq:TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the fourth quarter and full year of 2006. EPS increased 15% for the quarter and the year Net income increased 8% for the quarter and 9% for the year Loans held for investment grew 31% Total deposits grew 23% "We are pleased to report another strong quarter and year in terms of growth in loans and deposits,” said Jody Grant, chairman and CEO. "With a good Texas economy, we are well positioned for profitable, quality growth in the coming year.” FINANCIAL SUMMARY (dollars and shares in thousands)   Q4 2006 Q4 2005 % Change  QUARTERLY OPERATING RESULTS Net Income(1) $ 8,058  $ 7,489  8% Diluted EPS(1)(2) $.31  $.27  15% ROA(1) .90% 1.02% ROE(1) 13.09% 14.05% Diluted Shares 26,374  26,737    2006  2005  % Change  ANNUAL OPERATING RESULTS Net Income(1) $ 29,184  $ 26,776  9% Diluted EPS(1)(2) $1.10  $.96  15% ROA(1) .88% .97% ROE(1) 12.70% 13.09% Diluted Shares 26,469  26,645    BALANCE SHEET Total Assets(1) $3,675,349  $3,003,430  22% Demand Deposits 513,930  512,294  –  Total Deposits 3,069,330  2,495,179  23% Loans Held for Investment 2,722,097  2,075,961  31% Total Loans(1) 2,937,955  2,148,344  37% Stockholders’ Equity 250,668  215,523  16% (1) From continuing operations (2) 2005 EPS assuming adoption of FAS 123R in 2005, which equated to $0.01 DETAILED FINANCIALS Texas Capital Bancshares, Inc. reported net income and income from continuing operations of $8.1 million for the fourth quarter of 2006 compared to reported net income of $7.7 million and $7.5 million from continuing operations for the fourth quarter of 2005. Net income from continuing operations for the year ended 2006 was $29.2 million, compared to $26.8 million for the year ended 2005. On a fully diluted basis, earnings per share from continuing operations were $.31 for the three months ended December 31, 2006, compared to $.28 for the same quarter last year, an increase of 11 percent. On a fully diluted basis, assuming FAS 123R had been adopted during 2005, earnings per share in the fourth quarter of 2006 would have represented an increase of 15 percent on a continuing operations basis compared to $.27 for the fourth quarter of 2005. FAS 123R expense for the fourth quarter of 2006 is approximately $984,000, $649,000 after tax, representing $.02 on a fully diluted basis. Results of discontinued operations were $12,000 and $256,000 for the fourth quarter 2006 and 2005, respectively, and a net loss of $260,000 and net income of $416,000 for the year-to-date periods of 2006 and 2005, respectively. Due to the minor differences between reported earnings and income from continuing operations, the discussion below relates only to continuing operations. Return on average equity was 13.09 percent and return on average assets was .90 percent for the fourth quarter of 2006, compared to 14.05 and 1.02 percent, respectively, for the fourth quarter of 2005. For the year-ended 2006, return on average equity was 12.70 percent and return on average assets was .88 percent for 2006, compared to 13.09 percent and .97 percent, respectively for 2005. Net interest income was $31.9 million for the fourth quarter of 2006, compared to $26.3 million for the fourth quarter of 2005. The increase was due to an increase in average earning assets of $594.7 million over levels reported in the fourth quarter of 2005. The increase in average earning assets included a $614.2 million increase in average loans held for investment and an increase of $108.0 million in average loans held for sale, offset by a decrease of $108.4 million in average securities. The net interest margin in the fourth quarter of 2006 was 3.84 percent, a 3 basis point decrease from the fourth quarter of 2005 and a 4 basis point increase from the third quarter of 2006. Average total deposits increased by $580.4 million from the fourth quarter of 2005 and by $99.2 from the third quarter of 2006. For the same periods, the average balance of demand deposits increased to $470.7 million from $458.7 million and increased $6.1 million from the third quarter of 2006. Average interest bearing liabilities increased $583.7 million from the fourth quarter of 2005, net of a $53.4 million decrease in other borrowings. Key measures of credit quality remained favorable and consistent with previous guidance for 2006 operating results. In the fourth quarter of 2006, net charge-offs were $838,000, compared to net charge-offs of $11,000 in the fourth quarter of 2005 and net recoveries of $445,000 in the third quarter of 2006. For the most recent 12-month period, the net charge-off ratio was .08 percent. Non-accrual loans were $9.1 million, or .33 percent of loans, at the end of the fourth quarter of 2006, compared to $5.7 million, or .27 percent of loans, at the end of fourth quarter of 2005, and $6.4 million, or .25 percent at the end of the third quarter of 2006. Loans 90 days past due and still accruing were $2.2 million at the end of the fourth quarter of 2006 compared to $2.8 million at the end of the fourth quarter of 2005. At year-end 2006, the $2.2 million of past due loans included $1.5 million in premium finance loans and $571,000 of loans fully guaranteed by the U.S. Department of Agriculture. The premium finance 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 up to 180 days from the cancellation date. The Company recorded a $1 million provision for loan losses in the fourth quarter of 2006. Reserve coverage of historical losses, non-performing assets and classified loans remains strong. In management’s opinion, the reserve is sufficient to cover all reasonably expected losses in the portfolio and is derived from consistent application of the methodology for establishing the adequacy of reserves for Texas Capital Bank’s loan portfolio. Non-interest income for the fourth quarter of 2006 increased $2.5 million, or 65 percent, to $6.3 million from $3.8 million in the fourth quarter of 2005. The increase is related to a $922,000 increase in insurance commission income from $648,000 to $1.6 million due to increased focus on the insurance business. Rental income on leased equipment increased $1.3 million related to expansion of our operating lease portfolio. Non-interest expense for the fourth quarter of 2006 increased $6.2 million, or 33 percent, to $25.1 million from $18.8 million in the fourth quarter of 2005. The increase is primarily related to a $3.7 million increase in salaries and employee benefits to $14.5 million from $10.7 million, of which $984,000 relates to FAS 123R. The remaining increase in salaries and employee benefits resulted from an increase in commissions and incentives for insurance lines of business, the total number of employees related to the addition of the premium finance business and general business growth. Leased equipment depreciation increased $854,000 from $148,000 to $1.0 million in the fourth quarter of 2006 related to expansion of our operating lease portfolio. Occupancy expense increased $609,000 from $1.6 million to $2.2 million in the fourth quarter of 2006 relating to our general business growth. ABOUT TEXAS CAPITAL BANCSHARES, INC. Texas Capital Bancshares, Inc. (Nasdaq: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 release contains forward-looking statements, which are subject to risks and uncertainties. A number of factors, many of which are beyond Texas Capital Bancshares’ control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include 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 Form 10-K and other filings made by Texas Capital Bancshares with the Securities and Exchange Commission. TEXAS CAPITAL BANCSHARES, INC.   SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) (Dollars in thousands except per share data) 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 2006  2006  2006  2006  2005  CONSOLIDATED STATEMENT OF OPERATIONS Interest income $ 66,576  $ 62,848  $ 57,434  $ 50,666  $ 46,815  Interest expense 34,657  32,747  28,421  23,799  20,494  Net interest income 31,919  30,101  29,013  26,867  26,321  Provision for loan losses 1,000  750  2,250  –  –  Net interest income after provision for loan losses 30,919  29,351  26,763  26,867  26,321  Non-interest income 6,343  5,406  4,675  4,418  3,845  Non-interest expense 25,070  22,563  21,968  20,893  18,844  Income from continuing operations before income taxes 12,192  12,194  9,470  10,392  11,322  Income tax expense 4,134  4,157  3,230  3,543  3,833  Net income from continuing operations (after-tax) 8,058  8,037  6,240  6,849  7,489  Income (loss) from discontinued operations (after-tax) 12  (167) 101  (206) 256  Net income $ 8,070  $ 7,870  $ 6,341  $ 6,643  $ 7,745  Diluted EPS from continuing operations(1) $ .31  $ .30  $ .24  $ .26  $ .27  Diluted EPS(1) $ .31  $ .30  $ .24  $ .25  $ .28    Diluted shares 26,373,726  26,411,834  26,524,552  26,567,893  26,736,858    CONSOLIDATED BALANCE SHEET DATA(2) Total assets $3,675,349  $3,463,009  $3,381,099  $3,158,044  $3,003,430  Loans held for investment 2,722,097  2,543,059  2,417,814  2,263,007  2,075,961  Loans held for sale 215,858  151,255  133,112  95,397  72,383  Securities 532,053  554,732  573,053  604,987  630,482  Demand deposits 513,930  467,750  532,130  481,410  512,294  Total deposits 3,069,330  2,776,648  2,922,494  2,463,719  2,495,179  Other borrowings 211,559  338,801  173,730  441,991  265,721  Long-term debt 113,406  113,406  72,168  46,394  46,394  Stockholders’ equity 250,668  239,792  224,693  221,766  215,523    End of period shares 26,065,124  26,031,829  25,940,874  25,854,651  25,771,718  Book value (excluding securities gains/losses) $ 9.82  $ 9.50  $ 9.20  $ 8.94  $ 8.68    SELECTED FINANCIAL RATIOS From continuing operations Net interest margin 3.84% 3.80% 3.87% 3.87% 3.87% Return on average assets .90% .94% .77% .91% 1.02% Return on average equity 13.09% 13.83% 11.21% 12.60% 14.05% Non-interest income to earning assets .76% .68% .62% .63% .56% Efficiency ratio 65.5% 63.5% 65.2% 66.8% 62.5% Non-interest expense to earning assets 3.00% 2.83% 2.91% 2.98% 2.74% From consolidated Net interest margin 3.84% 4.01% 4.10% 4.09% 4.13% Return on average assets .90% .91% .78% .88% 1.04% Return on average equity 13.11% 13.54% 11.39% 12.22% 14.53%   Tier 1 capital ratio 9.7% 11.1% 10.1% 9.6% 10.1% Total capital ratio 11.2% 11.8% 10.7% 10.3% 10.8% Tier 1 leverage ratio 9.2% 10.2% 9.1% 8.6% 8.7% (1) 2005 EPS assuming adoption of FAS 123R in 2005, which equated to $0.01 (2) From continuing operations TEXAS CAPITAL BANCSHARES, INC.   CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in thousands) December 31,2006 December 31,2005 % Change  Assets Cash and due from banks $ 93,716  $ 137,840  (32)% Securities, available-for-sale 532,053  630,482  (16)% Loans held for sale 215,858  72,383  N/M  Loans held for sale from discontinued operations –  38,795  (100)% Loans held for investment (net of unearned income) 2,722,097  2,075,961  31% Less: Allowance for loan losses 21,003  18,897  11% Loans held for investment, net 2,701,094  2,057,064  31% Premises and equipment, net 33,818  21,632  56% Accrued interest receivable and other assets 85,821  71,395  20% Goodwill and intangibles, net 12,989  12,634  3% Total assets $ 3,675,349  $ 3,042,225  21%   Liabilities and Stockholders’ Equity Liabilities: Deposits: Non-interest bearing $ 513,930  $ 512,294  N/M  Interest bearing 1,670,956  1,436,111  16% Interest bearing in foreign branches 884,444  546,774  62% Total deposits 3,069,330  2,495,179  23%   Accrued interest payable 5,781  4,778  21% Other liabilities 24,605  14,630  68% Federal funds purchased 165,955  103,497  60% Repurchase agreements 43,359  108,357  (60)% Other borrowings 2,245  53,867  (96)% Long-term debt 113,406  46,394  N/M  Total liabilities 3,424,681  2,826,702  21%   Stockholders’ equity: Common stock, $.01 par value: Authorized shares – 100,000,000 Issued shares – 26,065,124 and 25,771,718 at December 31, 2006 and 2005, respectively 261  258  Additional paid-in capital 179,474  176,131  Retained earnings 76,163  47,239  Treasury stock (shares at cost: 84,274 at December 31, 2006 and 2005, respectively) (573) (573) Deferred compensation 573  573  Accumulated other comprehensive loss (5,230) (8,105)   Total stockholders’ equity 250,668  215,523  16% Total liabilities and stockholders’ equity $ 3,675,349  $ 3,042,225  21% TEXAS CAPITAL BANCSHARES, INC.   CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands except per share data) Three Months Ended December 31 Twelve Months Ended December 31 2006  2005    2006  2005  Interest income Interest and fees on loans $ 60,280  $ 39,535  $ 211,092  $ 127,989  Securities 6,266  7,087  26,311  30,712  Federal funds sold 14  183  65  611  Deposits in other banks 16  10    56  147  Total interest income 66,576  46,815  237,524  159,459  Interest expense Deposits 29,487  16,991  99,500  50,028  Federal funds purchased 2,104  919  8,198  3,588  Repurchase agreements 587  1,727  4,016  8,978  Other borrowings 393  68  2,471  877  Long-term debt 2,086  789    5,439  1,858  Total interest expense 34,657  20,494    119,624  65,329  Net interest income 31,919  26,321  117,900  94,130  Provision for loan losses 1,000  –    4,000  –  Net interest income after provision for loan losses 30,919  26,321  113,900  94,130  Non-interest income Service charges on deposit accounts 865  833  3,306  3,223  Trust fee income 1,073  760  3,790  2,739  Bank owned life insurance (BOLI) income 301  290  1,134  1,136  Brokered loan fees 521  178  2,029  1,759  Insurance commissions 1,570  648  4,158  1,047  Equipment rental income 1,433  178  3,908  236  Other 580  958    2,517  2,415  Total non-interest income 6,343  3,845  20,842  12,555  Non-interest expense Salaries and employee benefits 14,480  10,740  53,130  38,896  Net occupancy expense 2,170  1,561  8,184  6,056  Leased equipment depreciation 1,002  148  3,097  194  Marketing 809  806  3,161  2,974  Legal and professional 2,109  1,783  6,576  5,166  Communications and data processing 876  673  3,192  2,900  Franchise taxes 58  134  281  273  Other 3,566  2,999    12,873  9,667  Total non-interest expense 25,070  18,844    90,494  66,126  Income from continuing operations before income taxes 12,192  11,322  44,248  40,559  Income tax expense 4,134  3,833    15,064  13,783  Income from continuing operations (after-tax) 8,058  7,489  29,184  26,776  Income (loss) from discontinued operations (after-tax) 12  256    (260) 416  Net income $ 8,070  $ 7,745    $ 28,924  $ 27,192    Basic earnings per share: Income from continuing operations(1) $ .31  $ .28  $ 1.12  $ 1.01  Net income(1) $ .31  $ .29  $ 1.11  $ 1.02    Diluted earnings per share: Income from continuing operations(1) $ .31  $ .27  $ 1.10  $ .96  Net income(1) $ .31  $ .28  $ 1.09  $ .98  (1) 2005 EPS assuming adoption of FAS 123R in 2005, which equated to $0.01 TEXAS CAPITAL BANCSHARES, INC.   SUMMARY OF LOAN LOSS EXPERIENCE (Dollars in thousands)     4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter   2006  2006  2006  2006  2005    Beginning balance $ 20,841  $ 19,646  $ 18,909  $ 18,897  $ 18,908  Loans charged-off: Commercial 837  70  1,618  –  60  Real estate –  –  –  –  –  Consumer –  –  –  3  8  Leases 36  –  30  10  6  Total 873  70  1,648  13  74  Recoveries: Commercial 12  441  5  4  3  Consumer –  –  –  1  –  Leases 23  74  130  20  60  Total recoveries 35  515  135  25  63  Net charge-offs (recoveries) 838  (445) 1,513  (12) 11  Provision for loan losses 1,000  750  2,250  –  –  Ending balance $ 21,003  $ 20,841  $ 19,646  $ 18,909  $ 18,897    Reserve to loans held for investment (2) .77% .82% .81% .84% .91% Reserve to average loans held for investment (2) .80% .84% .83% .87% .94% Net charge-offs (recoveries) to average loans (1) (2) .13% (.07)% .26% (.00)% .00% Net charge-offs (recoveries) to average loans for last twelve months(1) (2) .08% .05% .07% (.01)% (.01)% Provision for loan losses to average loans (1) (2) .15% .12% .38% –  –  Recoveries to gross charge-offs 4.01% 735.71% 8.19% 192.31% 85.14% Reserve as a multiple of net charge-offs 25.1x  N/M  13.0x  N/M  1,717.9x    Non-performing loans: Loans past due (90 days) (3) $ 2,192  $ 2,627  $ 2,746  $ 2,824  $ 2,795  Non-accrual 9,088  6,432  5,063  6,032  5,657  Total $ 11,280  $ 9,059  $ 7,809  $ 8,856  $ 8,452    Other real estate owned $ 882  $ 882  $ 89  $ 89  $ –    Reserve to non-performing loans 1.9x  2.3x  2.5x  2.1x  2.2x  Reserve to non-accrual loans 2.3x  3.2x  3.9x  3.1x  3.3x  Reserve to non-performing assets 1.7x  2.1x  2.5x  2.1x  2.2x  Non-accrual loans to loans(2) .33% .25% .21% .27% .27% Loans past due 90 days to loans(2) .08% .10% .11% .12% .13% Non-performing loans to loans(2) .41% .36% .32% .39% .41% (1) Interim period ratios are annualized. (2) Excludes loans held for sale. (3) At December 31, 2006, loans past due 90 days and still accruing includes premium finance loans of $1.5 million (69% of total). 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 up to 180 days from the cancellation date. The total also includes $571,000 of loans fully guaranteed by the U.S. Department of Agriculture. TEXAS CAPITAL BANCSHARES, INC.   CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) (Dollars in thousands)   4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 2006  2006  2006  2006  2005  Interest income Interest and fees on loans $ 60,280  $ 56,320  $ 50,692  $ 43,800  $ 39,535  Securities 6,266  6,488  6,726  6,831  7,087  Federal funds sold 14  24  3  24  183  Deposits in other banks 16  16  13  11  10  Total interest income 66,576  62,848  57,434  50,666  46,815  Interest expense Deposits 29,487  28,337  22,369  19,307  16,991  Federal funds purchased 2,104  1,753  2,433  1,908  919  Repurchase agreements 587  665  1,562  1,202  1,727  Other borrowings 393  634  890  554  68  Long-term debt 2,086  1,358  1,167  828  789  Total interest expense 34,657  32,747  28,421  23,799  20,494  Net interest income 31,919  30,101  29,013  26,867  26,321  Provision for loan losses 1,000  750  2,250  –  –  Net interest income after provision for loan losses 30,919  29,351  26,763  26,867  26,321  Non-interest income Service charges on deposit accounts 865  780  805  856  833  Trust fee income 1,073  1,008  866  843  760  Bank owned life insurance (BOLI) income 301  255  292  286  290  Brokered loan fees 521  656  483  369  178  Insurance commissions 1,570  1,057  808  723  648  Equipment rental income 1,433  1,147  815  513  178  Other 580  503  606  828  958  Total non-interest income 6,343  5,406  4,675  4,418  3,845  Non-interest expense Salaries and employee benefits 14,480  13,181  13,067  12,402  10,740  Net occupancy expense 2,170  1,960  1,984  2,070  1,561  Leased equipment depreciation 1,002  928  786  381  148  Marketing 809  712  924  716  806  Legal and professional 2,109  1,634  1,365  1,468  1,783  Communications and data processing 876  861  756  699  673  Franchise taxes 58  58  104  61  134  Other 3,566  3,229  2,982  3,096  2,999  Total non-interest expense 25,070  22,563  21,968  20,893  18,844  Income from continuing operations before income taxes 12,192  12,194  9,470  10,392  11,322  Income tax expense 4,134  4,157  3,230  3,543  3,833  Income from continuing operations (after-tax) 8,058  8,037  6,240  6,849  7,489  Income (loss) from discontinued operations (after-tax) 12  (167) 101  (206) 256  Net income $ 8,070  $ 7,870  $ 6,341  $ 6,643  $ 7,745  TEXAS CAPITAL BANCSHARES, INC.   QUARTERLY FINANCIAL SUMMARY – UNAUDITED Consolidated Daily Average Balances, Average Yields and Rates Continuing Operations (Dollars in thousands)   4th Quarter 2006 3rd Quarter 2006 2nd Quarter 2006 1st Quarter 2006 4th Quarter 2005 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 $ 490,001  $ 5,830  4.72% $ 507,156  $ 6,055  4.74% $ 537,934  $ 6,291  4.69% $ 567,653  $ 6,396  4.57% $ 598,280  $ 6,653  4.41% Securities – Non-taxable(2) 48,573  669  5.46% 48,595  666  5.44% 48,614  669  5.52% 48,635  669  5.58% 48,655  668  5.45% Federal funds sold 1,004  14  5.53% 1,750  24  5.44% 200  3  6.02% 2,233  24  4.36% 18,553  183  3.91% Deposits in other banks 1,207  16  5.26% 1,498  16  4.24% 908  13  5.74% 1,079  11  4.13% 980  10  4.05% Loans held for sale 178,383  3,189  7.09% 150,225  2,747  7.25% 103,483  1,752  6.79% 71,282  1,154  6.57% 70,355  1,141  6.43% Loans held for investment 2,620,307  57,091  8.64% 2,479,057  53,573  8.57% 2,360,189  48,940  8.32% 2,168,410  42,646  7.98% 2,006,132  38,394  7.59% Less reserve for loan losses 20,751  –  –  19,823  –  –  19,129  –  –  18,898  –  –  18,924  –  –  Loans, net of reserve 2,777,939  60,280  8.61% 2,609,459  56,320  8.56% 2,444,543  50,692  8.32% 2,220,794  43,800  8.00% 2,057,563  39,535  7.62% Total earning assets 3,318,724  66,809  7.99% 3,168,458  63,081  7.90% 3,032,199  57,668  7.63% 2,840,394  50,900  7.27% 2,724,031  47,049  6.85% Cash and other assets 225,092  217,663  208,502  205,999  189,004  Total assets $3,543,816  $3,386,121  $3,240,701  $3,046,393  $2,913,035    Liabilities and Stockholders’ Equity Transaction deposits $ 97,428  $ 276  1.12% $ 99,549  $ 284  1.13% $ 112,046  $ 310  1.11% $ 117,685  $ 312  1.08% $ 108,245  $ 282  1.03% Savings deposits 879,452  10,063  4.54% 769,271  8,703  4.49% 701,007  7,257  4.15% 671,102  6,195  3.74% 691,575  5,800  3.33% Time deposits 598,258  7,658  5.08% 643,708  8,069  4.97% 684,630  7,784  4.56% 635,250  6,664  4.25% 564,405  5,561  3.91% Deposits in foreign branches 875,851  11,490  5.20% 845,338  11,281  5.29% 562,223  7,018  5.01% 541,084  6,136  4.60% 518,316  5,348  4.09% Total interest bearing deposits 2,450,989  29,487  4.77% 2,357,866  28,337  4.77% 2,059,906  22,369  4.36% 1,965,121  19,307  3.98% 1,882,541  16,991  3.58% Other borrowings 242,407  3,084  5.05% 238,350  3,052  5.08% 405,424  4,885  4.83% 350,084  3,664  4.24% 295,823  2,714  3.64% Long-term debt 113,406  2,086  7.30% 73,064  1,358  7.37% 64,521  1,167  7.25% 46,394  828  7.24% 44,716  789  7.00% Total interest bearing liabilities 2,806,802  34,657  4.90% 2,669,280  32,747  4.87% 2,529,851  28,421  4.51% 2,361,599  23,799  4.09% 2,223,080  20,494  3.66% Demand deposits 470,701  464,645  468,449  445,012  458,743  Other liabilities 22,106  21,633  19,055  19,309  19,701  Stockholders’ equity 244,207  230,563  223,346  220,473  211,511  Total liabilities and stockholders’ equity $3,543,816  $3,386,121  $3,240,701  $3,046,393  $2,913,035    Net interest income $ 32,152  $ 30,334  $ 29,247  $ 27,101  $ 26,555  Net interest margin 3.84% 3.80% 3.87% 3.87% 3.87%   Additional information from discontinued operations: Loans held for sale $ 27,422  $ 33,806  $ 30,748  $ 29,527  Borrowed funds 27,422  33,806  30,748  29,527  Net interest income $ 1,972  $ 2,113  $ 1,854  $ 2,140  Net interest margin – consolidated 4.01% 4.10% 4.09% 4.13%   (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.