EX-99.1 2 a7202023exhibit991.htm EX-99.1 EARNINGS RELEASE Document

Exhibit 99.1
tcbicolorlogoforrelease.jpg
INVESTOR CONTACT
Jocelyn Kukulka, 469.399.8544
jocelyn.kukulka@texascapitalbank.com
MEDIA CONTACT
Julia Monter, 469.399.8425
julia.monter@texascapitalbank.com
TEXAS CAPITAL BANCSHARES, INC. ANNOUNCES SECOND QUARTER 2023 RESULTS
Net Income doubled to $68.7 million in the second quarter of 2023, as compared to second quarter 2022
Second quarter 2023 Pre-Provision Net Revenue(1) grew $28.9 million (43%) compared to second quarter 2022
Capital and liquidity positions continue to be strong
DALLAS - July 20, 2023 - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the second quarter of 2023.
Net income available to common stockholders was $64.3 million, or $1.33 per diluted share, for the second quarter of 2023, compared to $34.3 million, or $0.70 per diluted share, for the first quarter of 2023 and $29.8 million, or $0.59 per diluted share, for the second quarter of 2022.
“Our talent, the strength of our balance sheet and the breadth of our platform continues to be a competitive differentiator in our markets,” said Rob C. Holmes, President and CEO. “Steadily maturing capabilities resulted in another quarter of improving financial results consistent with expectations. We are steadfast in our commitment to our long-term plan and will continue to execute on our vision to serve the best clients in our markets.”
FINANCIAL RESULTS
(dollars and shares in thousands)
2nd Quarter1st Quarter2nd Quarter
202320232022
OPERATING RESULTS
Net income$68,651 $38,661 $34,159 
Net income available to common stockholders$64,339 $34,348 $29,847 
Diluted earnings per common share$1.33 $0.70 $0.59 
Diluted common shares48,421 48,881 50,802 
Return on average assets0.95 %0.53 %0.44 %
Return on average common equity9.17 %5.06 %4.35 %
BALANCE SHEET
Loans held for investment$16,227,203 $16,014,497 $17,517,866 
Loans held for investment, mortgage finance5,098,812 4,060,570 6,549,507 
Total loans held for investment21,326,015 20,075,067 24,067,373 
Loans held for sale29,097 27,608 4,266 
Total assets28,976,544 28,596,653 32,338,963 
Non-interest bearing deposits9,429,352 9,500,583 12,555,367 
Total deposits23,318,240 22,179,697 25,440,021 
Stockholders’ equity3,081,927 3,079,974 3,006,832 
(1)    Net interest income and non-interest expense, less non-interest expense.


SECOND QUARTER 2023 COMPARED TO FIRST QUARTER 2023
For the second quarter of 2023, net income available to common stockholders was $64.3 million, or $1.33 per diluted share, compared to $34.3 million, or $0.70 per diluted share, for the first quarter of 2023.
Provision for credit losses for the second quarter of 2023 was $7.0 million, compared to a $28.0 million provision for credit losses for the first quarter of 2023. The $7.0 million provision for credit losses recorded in the second quarter of 2023 resulted primarily from decreases in net charge-offs and non-accrual loans, partially offset by increases in total loans held for investment (“LHI”) and criticized loans.
Net interest income was $232.0 million for the second quarter of 2023, compared to $235.3 million for the first quarter of 2023. The decrease in net interest income was primarily due to a decrease in total average earning assets and an increase in funding costs, partially offset by an increase in yields on average earning assets. Net interest margin for the second quarter of 2023 was 3.29%, a decrease of 4 basis points from the first quarter of 2023. LHI, excluding mortgage finance, yields increased 36 basis points from the first quarter of 2023 and LHI, mortgage finance yields decreased 20 basis points from the first quarter of 2023. Total cost of deposits was 2.37% for the second quarter of 2023, a 31 basis point increase from the first quarter of 2023.
Non-interest income for the second quarter of 2023 increased $8.6 million, or 23%, compared to the first quarter of 2023, primarily due to an increase in investment banking and trading income.
Non-interest expense for the second quarter of 2023 decreased $12.4 million, or 6%, compared to the first quarter of 2023, primarily due to decreases in salaries and benefits expense, resulting from a decline in headcount, and marketing expense, partially offset by an increase in communications and technology expense.
SECOND QUARTER 2023 COMPARED TO SECOND QUARTER 2022
Net income available to common stockholders was $64.3 million, or $1.33 per diluted share, for the second quarter of 2023, compared to $29.8 million, or $0.59 per diluted share, for the second quarter of 2022.
The second quarter of 2023 included a $7.0 million provision for credit losses, reflecting decreases in net charge-offs and non-accrual loans, partially offset by growth in LHI, compared to a $22.0 million provision for credit losses for the second quarter of 2022.
Net interest income increased to $232.0 million for the second quarter of 2023, compared to $205.5 million for the second quarter of 2022, primarily due to an increase in yields on average earning assets, partially offset by an increase in funding costs and a decrease in total average earning assets. Net interest margin increased 61 basis points to 3.29% for the second quarter of 2023, as compared to the second quarter of 2022. LHI, excluding mortgage finance, yields increased 326 basis points compared to the second quarter of 2022 and LHI, mortgage finance yields decreased 10 basis points from the second quarter of 2022. Total cost of deposits increased 204 basis points compared to the second quarter of 2022.
Non-interest income for the second quarter of 2023 increased $19.8 million, or 75%, compared to the second quarter of 2022. The increase was primarily due to increases in investment banking and trading income and other non-interest income.
Non-interest expense for the second quarter of 2023 increased $17.3 million, or 11%, compared to the second quarter of 2022 primarily due to increases in salaries and benefits, legal and professional and communications and technology expenses, partially offset by a decrease in marketing expense.
CREDIT QUALITY
Net charge-offs of $8.2 million were recorded during the second quarter of 2023, compared to net charge-offs of $19.9 million and $2.6 million during the first quarter of 2023 and the second quarter of 2022, respectively. Criticized loans totaled $619.4 million at June 30, 2023, compared to $561.1 million at March 31, 2023 and $603.5 million at June 30, 2022. Non-accrual LHI totaled $81.0 million at June 30, 2023, compared to $94.0 million at March 31, 2023 and $50.5 million at June 30, 2022. The ratio of non-accrual LHI to total LHI for the second quarter of 2023 was 0.38%, compared to 0.47% for the first quarter of 2023 and 0.21% for the second quarter of 2022.
The ratio of total allowance for credit losses to total LHI was 1.32% at June 30, 2023, compared to 1.41% and 1.03% at March 31, 2023 and June 30, 2022, respectively. In the second quarter of 2023, changes were made to certain estimates used in the Company’s current expected credit loss model, the most significant of which are more granular estimates of historical loss rates to incorporate probability of default and loss severities and allocations of expected losses to outstanding loan balances and off-balance sheet financial instruments. These changes resulted in adjustments to the Company’s portfolio segments and in a reallocation of the allowance for credit losses between loan portfolio segments and allowance balances allocated to off-balance sheet financial instruments, the results of which are included in the Summary of Credit Loss Experience table below. The changes made result in a higher allocation of losses to off-balance sheet financial instruments.
REGULATORY RATIOS AND CAPITAL
All regulatory ratios continue to be in excess of “well capitalized” requirements as of June 30, 2023. Our CET1, tier 1 capital, total capital and leverage ratios were 12.2%, 13.7%, 16.4% and 12.4%, respectively, at June 30, 2023, compared to 12.4%, 14.0%, 16.9%
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and 12.0%, respectively, at March 31, 2023 and 10.5%, 11.9%, 14.4% and 10.7%, respectively, at June 30, 2022. At June 30, 2023, our ratio of tangible common equity to total tangible assets was 9.6%, compared to 9.7% at March 31, 2023 and 8.3% at June 30, 2022.
About Texas Capital Bancshares, Inc.
Texas Capital Bancshares, Inc. (NASDAQ: TCBI), a member of the Russell 2000 Index and the S&P MidCap 400, is the parent company of Texas Capital Bank, a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs, and individual customers. Founded in 1998, the institution is headquartered in Dallas with offices in Austin, Houston, San Antonio, and Fort Worth, and has built a network of clients across the country. With the ability to service clients through their entire lifecycles, Texas Capital Bank has established commercial banking, consumer banking, investment banking and wealth management capabilities.
Forward Looking Statements
This communication contains “forward-looking statements” within the meaning of and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, TCBI’s financial condition, results of operations, business plans and future performance. These statements are not historical in nature and may often be identified by the use of words such as “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “plans,” “targets,” “intends” “could,” “would,” “anticipates,” “potential,” “confident,” “optimistic” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, trends, guidance, expectations and future plans.
Because forward-looking statements relate to future results and occurrences, they are subject to inherent and various uncertainties, risks, and changes in circumstances that are difficult to predict, may change over time, are based on management’s expectations and assumptions at the time the statements are made and are not guarantees of future results. Numerous risks and other factors, many of which are beyond management’s control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. While there can be no assurance that any list of risks is complete, important risks and other factors that could cause actual results to differ materially from those contemplated by forward-looking statements include, but are not limited to, credit quality and risk, the unpredictability of economic and business conditions that may impact TCBI or its customers, recent adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity and regulatory responses to these developments, the Company’s ability to effective manage its liquidity risk and any growth plans and the availability of capital and funding, the Company’s ability to effectively manage information technology systems, cyber incidents or other failures, disruptions or security breaches, interest rates, including the impact of rising rates on the Company’s securities portfolio and funding costs, commercial and residential real estate values, adverse or unexpected economic conditions, including inflation, recession, the threat of recession, and market conditions in Texas, the United States or globally, including governmental and consumer responses to those economic and market conditions, fund availability, accounting estimates and risk management processes, the transition away from the London Interbank Offered Rate (LIBOR), legislative and regulatory changes, enforcement actions and regulatory examinations and investigations, ratings or interpretations, business strategy execution, the failure to identify, attract and retain key personnel, and other employees, increased or expanded competition from banks and other financial service providers in TCBI’s markets, the failure to maintain adequate regulatory capital, environmental liability associated with properties related to TCBI’s lending activities, and severe weather, natural disasters, acts of war, terrorism, global conflict, or other external events, climate change and related legislative and regulatory initiatives as well as the risks more fully described in TCBI’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in its other documents and filings with the SEC. The information contained in this communication speaks only as of its date. Except to the extent required by applicable law or regulation, we disclaim any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments.



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TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(dollars in thousands except per share data)
2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
20232023202220222022
CONSOLIDATED STATEMENTS OF INCOME
Interest income$401,916 $385,166 $371,292 $322,072 $242,351 
Interest expense169,926 149,821 123,687 82,991 36,818 
Net interest income231,990 235,345 247,605 239,081 205,533 
Provision for credit losses7,000 28,000 34,000 12,000 22,000 
Net interest income after provision for credit losses224,990 207,345 213,605 227,081 183,533 
Non-interest income46,011 37,403 277,667 25,332 26,240 
Non-interest expense181,644 194,027 213,090 197,047 164,303 
Income before income taxes89,357 50,721 278,182 55,366 45,470 
Income tax expense20,706 12,060 60,931 13,948 11,311 
Net income68,651 38,661 217,251 41,418 34,159 
Preferred stock dividends4,312 4,313 4,312 4,313 4,312 
Net income available to common stockholders$64,339 $34,348 $212,939 $37,105 $29,847 
Diluted earnings per common share$1.33 $0.70 $4.23 $0.74 $0.59 
Diluted common shares48,421,276 48,880,725 50,282,663 50,417,884 50,801,628 
CONSOLIDATED BALANCE SHEET DATA
Total assets$28,976,544 $28,596,653 $28,414,642 $30,408,513 $32,338,963 
Loans held for investment16,227,203 16,014,497 15,197,307 14,878,959 17,517,866 
Loans held for investment, mortgage finance5,098,812 4,060,570 4,090,033 4,908,822 6,549,507 
Loans held for sale29,097 27,608 36,357 3,142,178 4,266 
Interest bearing cash and cash equivalents2,587,131 3,385,494 4,778,623 3,399,638 4,032,931 
Investment securities4,226,653 4,345,969 3,585,114 3,369,622 3,552,699 
Non-interest bearing deposits9,429,352 9,500,583 9,618,081 11,494,685 12,555,367 
Total deposits23,318,240 22,179,697 22,856,880 24,498,563 25,440,021 
Short-term borrowings1,350,000 2,100,000 1,201,142 1,701,480 2,651,536 
Long-term debt857,795 932,119 931,442 930,766 917,098 
Stockholders’ equity3,081,927 3,079,974 3,055,351 2,885,775 3,006,832 
End of period shares outstanding47,992,521 47,851,862 48,783,763 49,897,726 49,878,041 
Book value per share$57.97 $58.10 $56.48 $51.82 $54.27 
Tangible book value per share(1)
$57.93 $58.06 $56.45 $51.48 $53.93 
SELECTED FINANCIAL RATIOS
Net interest margin3.29 %3.33 %3.26 %3.05 %2.68 %
Return on average assets0.95 %0.53 %2.80 %0.52 %0.44 %
Return on average common equity9.17 %5.06 %30.66 %5.36 %4.35 %
Non-interest income to average earning assets0.66 %0.54 %3.70 %0.33 %0.34 %
Efficiency ratio(2)
65.3 %71.1 %40.6 %74.5 %70.9 %
Non-interest expense to average earning assets2.61 %2.78 %2.84 %2.53 %2.16 %
Common equity to total assets9.6 %9.7 %9.7 %8.5 %8.4 %
Tangible common equity to total tangible assets(3)
9.6 %9.7 %9.7 %8.5 %8.3 %
Common Equity Tier 112.2 %12.4 %13.0 %11.1 %10.5 %
Tier 1 capital13.7 %14.0 %14.7 %12.6 %11.9 %
Total capital16.4 %16.9 %17.7 %15.2 %14.4 %
Leverage12.4 %12.0 %11.5 %10.7 %10.7 %
(1)     Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(2)    Non-interest expense divided by the sum of net interest income and non-interest income.
(3)    Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by total assets, less goodwill and intangibles.
    
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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
June 30, 2023June 30, 2022% Change
Assets
Cash and due from banks$260,314 $242,425 7 %
Interest bearing cash and cash equivalents2,587,131 4,032,931 (36)%
Available-for-sale debt securities3,292,478 2,535,646 30 %
Held-to-maturity debt securities900,315 980,935 (8)%
Equity securities33,860 36,118 (6)%
Investment securities4,226,653 3,552,699 19 %
Loans held for sale29,097 4,266 N/M
Loans held for investment, mortgage finance5,098,812 6,549,507 (22)%
Loans held for investment16,227,203 17,517,866 (7)%
Less: Allowance for credit losses on loans237,343 229,013 4 %
Loans held for investment, net21,088,672 23,838,360 (12)%
Premises and equipment, net26,096 28,722 (9)%
Accrued interest receivable and other assets757,085 622,501 22 %
Goodwill and intangibles, net1,496 17,059 (91)%
Total assets$28,976,544 $32,338,963 (10)%
Liabilities and Stockholders’ Equity
Liabilities:
Non-interest bearing deposits$9,429,352 $12,555,367 (25)%
Interest bearing deposits13,888,888 12,884,654 8 %
Total deposits23,318,240 25,440,021 (8)%
Accrued interest payable29,658 8,928 N/M
Other liabilities338,924 314,548 8 %
Short-term borrowings1,350,000 2,651,536 (49)%
Long-term debt857,795 917,098 (6)%
Total liabilities25,894,617 29,332,131 (12)%
Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - 300,000 shares issued at June 30, 2023 and 2022
300,000 300,000 — %
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 51,087,965 and 50,820,337 at June 30, 2023 and 2022, respectively
511 508 1 %
Additional paid-in capital1,035,063 1,015,105 2 %
Retained earnings2,362,189 2,013,458 17 %
Treasury stock - 3,095,444 and 942,296 shares at cost at June 30, 2023 and 2022, respectively
(175,528)(50,031)N/M
Accumulated other comprehensive loss, net of taxes(440,308)(272,208)62 %
Total stockholders’ equity3,081,927 3,006,832 2 %
Total liabilities and stockholders’ equity$28,976,544 $32,338,963 (10)%
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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands except per share data)
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Interest income
Interest and fees on loans$332,867 $218,292 $630,305 $405,948 
Investment securities27,478 14,665 52,770 31,967 
Interest bearing cash and cash equivalents41,571 9,394 104,007 12,965 
Total interest income401,916 242,351 787,082 450,880 
Interest expense
Deposits137,391 20,566 257,485 34,196 
Short-term borrowings18,253 4,859 32,997 5,617 
Long-term debt14,282 11,393 29,265 21,988 
Total interest expense169,926 36,818 319,747 61,801 
Net interest income231,990 205,533 467,335 389,079 
Provision for credit losses7,000 22,000 35,000 20,000 
Net interest income after provision for credit losses224,990 183,533 432,335 369,079 
Non-interest income
Service charges on deposit accounts5,158 6,102 10,180 12,217 
Wealth management and trust fee income3,715 4,051 7,144 7,963 
Brokered loan fees2,415 4,133 4,310 8,103 
Investment banking and trading income27,498 11,126 46,266 15,305 
Other7,225 828 15,514 2,935 
Total non-interest income46,011 26,240 83,414 46,523 
Non-interest expense
Salaries and benefits113,050 103,358 241,720 203,217 
Occupancy expense9,482 8,874 19,101 17,759 
Marketing6,367 8,506 15,411 13,483 
Legal and professional15,669 11,288 30,183 21,590 
Communications and technology20,525 15,649 38,048 30,349 
Federal Deposit Insurance Corporation insurance assessment3,693 3,318 5,863 7,299 
Other12,858 13,310 25,345 23,698 
Total non-interest expense181,644 164,303 375,671 317,395 
Income before income taxes89,357 45,470 140,078 98,207 
Income tax expense20,706 11,311 32,766 24,398 
Net income68,651 34,159 107,312 73,809 
Preferred stock dividends4,312 4,312 8,625 8,625 
Net income available to common stockholders$64,339 $29,847 $98,687 $65,184 
Basic earnings per common share$1.34 $0.59 $2.05 $1.29 
Diluted earnings per common share$1.33 $0.59 $2.02 $1.28 
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TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
20232023202220222022
Allowance for credit losses on loans:
Beginning balance$260,928 $253,469 $234,613 $229,013 $211,151 
Loans charged-off:
Commercial8,852 20,732 17,106 3,135 2,868 
Total charge-offs8,852 20,732 17,106 3,135 2,868 
Recoveries:
Commercial611 819 2,105 400 217 
Consumer2 3 2 2 2 
Total recoveries613 822 2,107 402 219 
Net charge-offs8,239 19,910 14,999 2,733 2,649 
Provision for credit losses on loans(15,346)27,369 33,855 8,333 20,511 
Ending balance$237,343 $260,928 $253,469 $234,613 $229,013 
Allowance for off-balance sheet credit losses:
Beginning balance$22,424 $21,793 $21,648 $17,981 $16,492 
Provision for off-balance sheet credit losses22,346 631 145 3,667 1,489 
Ending balance$44,770 $22,424 $21,793 $21,648 $17,981 
Total allowance for credit losses$282,113 $283,352 $275,262 $256,261 $246,994 
Total provision for credit losses$7,000 $28,000 $34,000 $12,000 $22,000 
Allowance for credit losses on loans to total loans held for investment1.11 %1.30 %1.31 %1.19 %0.95 %
Allowance for credit losses on loans to average total loans held for investment1.15 %1.38 %1.31 %1.06 %1.02 %
Net charge-offs to average total loans held for investment(1)
0.16 %0.43 %0.31 %0.05 %0.05 %
Net charge-offs to average total loans held for investment for last 12 months(1)
0.23 %0.19 %0.09 %0.03 %0.03 %
Total provision for credit losses to average total loans held for investment(1)
0.14 %0.60 %0.70 %0.22 %0.39 %
Total allowance for credit losses to total loans held for investment
1.32 %1.41 %1.43 %1.30 %1.03 %
(1)Interim period ratios are annualized.
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TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS
(dollars in thousands)
2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
20232023202220222022
Non-accrual loans held for investment$81,039 $93,951 $48,338 $35,864 $50,526 
Non-accrual loans held for sale(1)
— — — 1,340 — 
Other real estate owned— — — — — 
Total non-performing assets$81,039 $93,951 $48,338 $37,204 $50,526 
Non-accrual loans held for investment to total loans held for investment0.38 %0.47 %0.25 %0.18 %0.21 %
Total non-performing assets to total assets0.28 %0.33 %0.17 %0.12 %0.16 %
Allowance for credit losses on loans to non-accrual loans held for investment2.9x2.8x5.2x6.5x4.5x
Total allowance for credit losses to non-accrual loans held for investment3.5x3.0x5.7x6.9x4.9x
Loans held for investment past due 90 days and still accruing
$64 $3,098 $131 $30,664 $3,206 
Loans held for investment past due 90 days to total loans held for investment— %0.02 %— %0.15 %0.01 %
Loans held for sale past due 90 days and still accruing(1)(2)
$— $— $— $4,877 $1,602 
(1)Third quarter 2022 includes $1.3 million in non-accrual loans and $3.1 million in loans past due 90 days and still accruing associated to our insurance premium finance subsidiary that were transferred from loans held for investment to loans held for sale as of September 30, 2022.
(2)Includes loans guaranteed by U.S. government agencies that were repurchased out of Ginnie Mae securities. Loans are recorded as loans held for sale and carried at fair value on the balance sheet. Interest on these past due loans accrues at the debenture rate guaranteed by the U.S. government.
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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)
2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
20232023202220222022
Interest income
Interest and fees on loans$332,867 $297,438 $295,372 $282,474 $218,292 
Investment securities27,478 25,292 16,210 15,002 14,665 
Interest bearing deposits in other banks41,571 62,436 59,710 24,596 $9,394 
Total interest income401,916 385,166 371,292 322,072 242,351 
Interest expense
Deposits137,391 120,094 96,150 60,317 20,566 
Short-term borrowings18,253 14,744 13,449 10,011 4,859 
Long-term debt14,282 14,983 14,088 12,663 11,393 
Total interest expense169,926 149,821 123,687 82,991 36,818 
Net interest income231,990 235,345 247,605 239,081 205,533 
Provision for credit losses7,000 28,000 34,000 12,000 22,000 
Net interest income after provision for credit losses224,990 207,345 213,605 227,081 183,533 
Non-interest income
Service charges on deposit accounts5,158 5,022 5,252 5,797 6,102 
Wealth management and trust fee income3,715 3,429 3,442 3,631 4,051 
Brokered loan fees2,415 1,895 2,655 3,401 4,133 
Investment banking and trading income27,498 18,768 11,937 7,812 11,126 
Gain on disposal of subsidiary— — 248,526 — — 
Other7,225 8,289 5,855 4,691 828 
Total non-interest income46,011 37,403 277,667 25,332 26,240 
Non-interest expense
Salaries and benefits113,050 128,670 102,925 128,764 103,358 
Occupancy expense9,482 9,619 17,030 9,433 8,874 
Marketing6,367 9,044 10,623 8,282 8,506 
Legal and professional15,669 14,514 37,493 16,775 11,288 
Communications and technology20,525 17,523 20,434 18,470 15,649 
Federal Deposit Insurance Corporation insurance assessment3,693 2,170 3,092 3,953 3,318 
Other 12,858 12,487 21,493 11,370 13,310 
Total non-interest expense181,644 194,027 213,090 197,047 164,303 
Income before income taxes89,357 50,721 278,182 55,366 45,470 
Income tax expense20,706 12,060 60,931 13,948 11,311 
Net income68,651 38,661 217,251 41,418 34,159 
Preferred stock dividends4,312 4,313 4,312 4,313 4,312 
Net income available to common shareholders$64,339 $34,348 $212,939 $37,105 $29,847 

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TEXAS CAPITAL BANCSHARES, INC.
TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1)
(dollars in thousands)
2nd Quarter 20231st Quarter 20234th Quarter 20223rd Quarter 20222nd Quarter 2022
Average
Balance		Income/
Expense		Yield/
Rate		Average
Balance		Income/
Expense		Yield/
Rate		Average
Balance		Income/
Expense		Yield/
Rate		Average
Balance		Income/
Expense		Yield/
Rate		Average
Balance		Income/
Expense		Yield/
Rate
Assets
Investment securities(2)
$4,306,881 $27,478 2.36 %$4,060,456 $25,292 2.31 %$3,385,372 $16,210 1.70 %$3,509,044 $15,002 1.58 %$3,543,576 $15,065 1.60 %
Interest bearing cash and cash equivalents3,286,091 41,571 5.07 %5,541,341 62,436 4.57 %6,158,769 59,710 3.85 %4,453,806 24,596 2.19 %4,747,377 9,394 0.79 %
Loans held for sale28,414 599 8.46 %43,472 938 8.75 %1,053,157 12,064 4.54 %1,029,983 11,316 4.36 %8,123 62 3.07 %
Loans held for investment, mortgage finance4,376,235 36,198 3.32 %3,286,804 28,528 3.52 %4,279,367 43,708 4.05 %5,287,531 52,756 3.96 %5,858,599 49,914 3.42 %
Loans held for investment(3)
16,217,314 296,183 7.33 %15,598,854 268,131 6.97 %15,105,083 239,746 6.30 %16,843,922 218,513 5.15 %16,616,234 168,409 4.07 %
Less: Allowance for credit losses on loans
261,027 — — 252,727 — — 233,246 — — 229,005 — — 211,385 — — 
Loans held for investment, net20,332,522 332,381 6.56 %18,632,931 296,659 6.46 %19,151,204 283,454 5.87 %21,902,448 271,269 4.91 %22,263,448 218,323 3.93 %
Total earning assets27,953,908 402,029 5.69 %28,278,200 385,325 5.45 %29,748,502 371,438 4.89 %30,895,281 322,183 4.10 %30,562,524 242,844 3.16 %
Cash and other assets1,049,145 1,041,745 989,900 918,630 870,396 
Total assets$29,003,053 $29,319,945 $30,738,402 $31,813,911 $31,432,920 
Liabilities and Stockholders’ Equity
Transaction deposits$1,345,742 $9,468 2.82 %$776,500 $3,853 2.01 %$1,105,466 $4,977 1.79 %$1,444,964 $5,239 1.44 %$1,671,729 $3,920 0.94 %
Savings deposits10,590,558 114,275 4.33 %11,195,402 105,707 3.83 %10,563,049 80,801 3.03 %10,249,387 46,555 1.80 %8,696,819 15,462 0.71 %
Time deposits1,531,922 13,648 3.57 %1,430,657 10,534 2.99 %1,625,857 10,372 2.53 %1,701,238 8,523 1.99 %877,399 1,184 0.54 %
Total interest bearing deposits13,468,222 137,391 4.09 %13,402,559 120,094 3.63 %13,294,372 96,150 2.87 %13,395,589 60,317 1.79 %11,245,947 20,566 0.73 %
Short-term borrowings1,397,253 18,253 5.24 %1,242,881 14,744 4.81 %1,387,660 13,449 3.84 %1,931,537 10,011 2.06 %2,232,119 4,859 0.87 %
Long-term debt883,871 14,282 6.48 %931,796 14,983 6.52 %931,107 14,088 6.00 %921,707 12,663 5.45 %929,616 11,393 4.92 %
Total interest bearing liabilities15,749,346 169,926 4.33 %15,577,236 149,821 3.90 %15,613,139 123,687 3.14 %16,248,833 82,991 2.03 %14,407,682 36,818 1.02 %
Non-interest bearing deposits9,749,105 10,253,731 11,642,969 12,214,531 13,747,876 
Other liabilities389,155 436,621 426,543 305,554 227,701 
Stockholders’ equity3,115,447 3,052,357 3,055,751 3,044,993 3,049,661 
Total liabilities and stockholders’ equity$29,003,053 $29,319,945 $30,738,402 $31,813,911 $31,432,920 
Net interest income
$232,103 $235,504 $247,751 $239,192 $206,026 
Net interest margin3.29 %3.33 %3.26 %3.05 %2.68 %
(1)    Taxable equivalent rates used where applicable.
(2)    Yields on investment securities are calculated using available-for-sale securities at amortized cost.
(3)    Average balances include non-accrual loans.
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