EX-99.1 2 a7182024exhibit991.htm EX-99.1 EARNINGS RELEASE Document

Exhibit 99.1
tcbicolorlogoforreleasea.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 2024 RESULTS
Second quarter 2024 net income of $41.7 million and net income available to common
stockholders of $37.4 million, or $0.80 per diluted share
Book Value and Tangible Book Value(1) per share both increased 1.9%, reaching record levels,
after giving effect to the repurchase of $50.0 million in shares
Capital ratios continue to be strong, including 11.6% CET1 and 15.7% Total Capital
DALLAS - July 18, 2024 - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the second quarter of 2024.
Net income available to common stockholders was $37.4 million, or $0.80 per diluted share, for the second quarter of 2024, compared to $21.8 million, or $0.46 per diluted share, for the first quarter of 2024 and $64.3 million, or $1.33 per diluted share, for the second quarter of 2023.
“Building a platform resilient to market and rate cycles is a foundational tenant of our strategic plan,” said Rob C. Holmes, President and CEO. “We continue to deliver differentiated solutions for clients across our markets and areas of industry focus at a pace that exceeds observed market behavior. We remain focused on realizing the clear strategic value of our platform through enhanced financial performance.”

FINANCIAL RESULTS
(dollars and shares in thousands)
2nd Quarter1st Quarter2nd Quarter
202420242023
OPERATING RESULTS
Net income$41,662 $26,142 $68,651 
Net income available to common stockholders$37,350 $21,829 $64,339 
Diluted earnings per common share$0.80 $0.46 $1.33 
Diluted common shares46,872 47,711 48,421 
Return on average assets0.56 %0.36 %0.95 %
Return on average common equity5.26 %3.03 %9.17 %
BALANCE SHEET
Loans held for investment$16,700,569 $16,677,691 $16,227,203 
Loans held for investment, mortgage finance5,078,161 4,153,313 5,098,812 
Total loans held for investment21,778,730 20,831,004 21,326,015 
Loans held for sale36,785 37,750 29,097 
Total assets29,854,994 29,180,585 28,976,544 
Non-interest bearing deposits7,987,715 8,478,215 9,429,352 
Total deposits23,818,327 23,954,037 23,318,240 
Stockholders’ equity3,175,601 3,170,662 3,081,927 
(1)    Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.


SECOND QUARTER 2024 COMPARED TO FIRST QUARTER 2024
For the second quarter of 2024, net income available to common stockholders was $37.4 million, or $0.80 per diluted share, compared to $21.8 million, or $0.46 per diluted share, for the first quarter of 2024.
Provision for credit losses for the second quarter of 2024 was $20.0 million, compared to $19.0 million for the first quarter of 2024. The $20.0 million provision for credit losses recorded in the second quarter of 2024 resulted primarily from growth in total loans held for investment (“LHI”) and $12.0 million in net charge-offs.
Net interest income was $216.6 million for the second quarter of 2024, compared to $215.0 million for the first quarter of 2024, as an increase in average earning assets and a decline in funding costs was partially offset by an increase in average interest bearing deposits. Net interest margin for the second quarter of 2024 was 3.01%, a decrease of 2 basis points from the first quarter of 2024. LHI, excluding mortgage finance, yields decreased 1 basis point from the first quarter of 2024 and LHI, mortgage finance, yields increased 34 basis points from the first quarter of 2024. Total cost of deposits was 2.99% for the second quarter of 2024, a 2 basis point increase from the first quarter of 2024.
Non-interest income for the second quarter of 2024 increased $9.1 million, or 22%, compared to the first quarter of 2024, primarily due to increases in investment banking and advisory fees and other non-interest income.
Non-interest expense for the second quarter of 2024 decreased $14.0 million, or 7%, compared to the first quarter of 2024, primarily due to a $9.9 million decrease in salaries and benefits, related to the effect of seasonal payroll expenses that peak in the first quarter, as well as decreases in legal and professional expense and Federal Deposit Insurance Corporation (“FDIC”) insurance assessment expense, partially offset by an increase in other non-interest expense. The second quarter of 2024 included $460,000 in FDIC special assessment expense, as compared to $3.0 million in the first quarter of 2024. Legal and professional expense in the first quarter of 2024 included a $5.0 million legal settlement expense.
SECOND QUARTER 2024 COMPARED TO SECOND QUARTER 2023
Net income available to common stockholders was $37.4 million, or $0.80 per diluted share, for the second quarter of 2024, compared to $64.3 million, or $1.33 per diluted share, for the second quarter of 2023.
The second quarter of 2024 included a $20.0 million provision for credit losses, reflecting growth in total LHI and $12.0 million in net charge-offs, compared to a $7.0 million provision for the second quarter of 2023.
Net interest income decreased to $216.6 million for the second quarter of 2024, compared to $232.0 million for the second quarter of 2023, primarily due to increases in funding costs and average interest bearing deposits, partially offset by increases in yields on average earning assets and average LHI, excluding mortgage finance. Net interest margin decreased 28 basis points to 3.01% for the second quarter of 2024 compared to the second quarter of 2023. LHI, excluding mortgage finance, yields increased 25 basis points compared to the second quarter of 2023 and LHI, mortgage finance yields decreased 59 basis points from the second quarter of 2023. Total cost of deposits increased 62 basis points compared to the second quarter of 2023.
Non-interest income for the second quarter of 2024 increased $4.4 million, or 10%, compared to the second quarter of 2023. The increase was primarily due to an increase in investment banking and advisory fees, partially offset by a decrease in trading income.
Non-interest expense for the second quarter of 2024 increased $6.8 million, or 4%, compared to the second quarter of 2023, primarily due to increases in salaries and benefits, occupancy expense, communications and technology expense, FDIC insurance assessment expense and other non-interest expense, partially offset by a decrease in legal and professional expense.
CREDIT QUALITY
Net charge-offs of $12.0 million were recorded during the second quarter of 2024, compared to net charge-offs of $10.8 million and $8.2 million during the first quarter of 2024 and the second quarter of 2023, respectively. Criticized loans totaled $859.7 million at June 30, 2024, compared to $859.5 million at March 31, 2024 and $619.4 million at June 30, 2023. Non-accrual LHI totaled $85.0 million at June 30, 2024, compared to $92.8 million at March 31, 2024 and $81.0 million at June 30, 2023. The ratio of non-accrual LHI to total LHI for the second quarter of 2024 was 0.39%, compared to 0.45% for the first quarter of 2024 and 0.38% for the second quarter of 2023. The ratio of total allowance for credit losses to total LHI was 1.44% at June 30, 2024, compared to 1.46% and 1.32% at March 31, 2024 and June 30, 2023, respectively.
REGULATORY RATIOS AND CAPITAL
All regulatory ratios continue to be in excess of “well capitalized” requirements as of June 30, 2024. CET1, tier 1 capital, total capital and leverage ratios were 11.6%, 13.1%, 15.7% and 12.2%, respectively, at June 30, 2024, compared to 12.4%, 13.9%, 16.6% and 12.4%, respectively, at March 31, 2024 and 12.2%, 13.7%, 16.4% and 12.4%, respectively, at June 30, 2023. The second quarter 2024 decline in regulatory ratios resulted primarily from the redemption in full of the bank-issued senior unsecured credit-linked notes of $275.0 million in the second quarter of 2024. At June 30, 2024, our ratio of tangible common equity to total tangible assets was 9.6%, compared to 9.8% at March 31, 2024 and 9.6% at June 30, 2023.
During the second quarter of 2024, the Company repurchased 852,098 shares of its common stock for an aggregate purchase price, including excise tax expense, of $50.0 million, at a weighted average price of $58.14 per share.
2

About Texas Capital Bancshares, Inc.
Texas Capital Bancshares, Inc. (NASDAQ: TCBI), a member of the Russell 2000® Index and the S&P MidCap 400®, the parent company of Texas Capital Bank d/b/a Texas Capital, is 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 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: economic or business conditions in Texas, the United States or globally that impact TCBI or its customers; negative credit quality developments arising from the foregoing or other factors; TCBI’s ability to effectively manage its liquidity and maintain adequate regulatory capital to support its businesses; TCBI’s ability to pursue and execute upon growth plans, whether as a function of capital, liquidity or other limitations; TCBI’s ability to successfully execute its business strategy, including developing and executing new lines of business and new products and services; the extensive regulations to which TCBI is subject and its ability to comply with applicable governmental regulations, including legislative and regulatory changes; TCBI’s ability to effectively manage information technology systems, including third party vendors, cyber or data privacy incidents or other failures, disruptions or security breaches; elevated or further changes in interest rates, including the impact of interest rates on TCBI’s securities portfolio and funding costs, as well as related balance sheet implications stemming from the fair value of our assets and liabilities; the effectiveness of TCBI’s risk management processes strategies and monitoring; fluctuations in commercial and residential real estate values, especially as they relate to the value of collateral supporting TCBI’s loans; 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; adverse developments in the banking industry and the potential impact of such developments on customer confidence, liquidity and regulatory responses to these developments, including in the context of regulatory examinations and related findings and actions; negative press and social media attention with respect to the banking industry or TCBI, in particular; claims, litigation or regulatory investigations and actions that TCBI may become subject to; severe weather, natural disasters, climate change, acts of war, terrorism, global conflict (including those already reported by the media, as well as others that may arise), or other external events, as well as related legislative and regulatory initiatives; and the risks and factors more fully described in TCBI’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and 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.


3

TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(dollars in thousands except per share data)
2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
20242024202320232023
CONSOLIDATED STATEMENTS OF INCOME
Interest income$422,068 $417,378 $417,072 $425,769 $401,916 
Interest expense205,486 202,369 202,355 193,698 169,926 
Net interest income216,582 215,009 214,717 232,071 231,990 
Provision for credit losses20,000 19,000 19,000 18,000 7,000 
Net interest income after provision for credit losses196,582 196,009 195,717 214,071 224,990 
Non-interest income50,424 41,319 31,133 46,872 46,011 
Non-interest expense188,409 202,393 201,385 179,891 181,644 
Income before income taxes58,597 34,935 25,465 81,052 89,357 
Income tax expense16,935 8,793 5,315 19,373 20,706 
Net income41,662 26,142 20,150 61,679 68,651 
Preferred stock dividends4,312 4,313 4,312 4,313 4,312 
Net income available to common stockholders$37,350 $21,829 $15,838 $57,366 $64,339 
Diluted earnings per common share$0.80 $0.46 $0.33 $1.18 $1.33 
Diluted common shares46,872,498 47,711,192 48,097,517 48,528,698 48,421,276 
CONSOLIDATED BALANCE SHEET DATA
Total assets$29,854,994 $29,180,585 $28,356,266 $29,628,249 $28,976,544 
Loans held for investment16,700,569 16,677,691 16,362,230 16,183,882 16,227,203 
Loans held for investment, mortgage finance5,078,161 4,153,313 3,978,328 4,429,489 5,098,812 
Loans held for sale36,785 37,750 44,105 155,073 29,097 
Interest bearing cash and cash equivalents2,691,352 3,148,157 3,042,357 3,975,860 2,587,131 
Investment securities4,388,976 4,414,280 4,143,194 4,069,717 4,226,653 
Non-interest bearing deposits7,987,715 8,478,215 7,328,276 9,352,883 9,429,352 
Total deposits23,818,327 23,954,037 22,371,839 23,878,978 23,318,240 
Short-term borrowings1,675,000 750,000 1,500,000 1,400,000 1,350,000 
Long-term debt659,997 859,823 859,147 858,471 857,795 
Stockholders’ equity3,175,601 3,170,662 3,199,142 3,077,700 3,081,927 
End of period shares outstanding46,188,078 46,986,275 47,237,912 48,015,003 47,992,521 
Book value per share$62.26 $61.10 $61.37 $57.85 $57.97 
Tangible book value per share(1)
$62.23 $61.06 $61.34 $57.82 $57.93 
SELECTED FINANCIAL RATIOS
Net interest margin3.01 %3.03 %2.93 %3.13 %3.29 %
Return on average assets0.56 %0.36 %0.27 %0.81 %0.95 %
Return on average common equity5.26 %3.03 %2.25 %8.08 %9.17 %
Non-interest income to average earning assets0.71 %0.59 %0.43 %0.64 %0.66 %
Efficiency ratio(2)
70.6 %79.0 %81.9 %64.5 %65.3 %
Non-interest expense to average earning assets2.65 %2.89 %2.79 %2.46 %2.61 %
Common equity to total assets9.6 %9.8 %10.2 %9.4 %9.6 %
Tangible common equity to total tangible assets(3)
9.6 %9.8 %10.2 %9.4 %9.6 %
Common Equity Tier 111.6 %12.4 %12.6 %12.7 %12.2 %
Tier 1 capital13.1 %13.9 %14.2 %14.3 %13.7 %
Total capital15.7 %16.6 %17.1 %17.1 %16.4 %
Leverage12.2 %12.4 %12.2 %12.1 %12.4 %
(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.
    
4

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
June 30, 2024June 30, 2023% Change
Assets
Cash and due from banks$221,727 $260,314 (15)%
Interest bearing cash and cash equivalents2,691,352 2,587,131 4 %
Available-for-sale debt securities3,483,231 3,292,478 6 %
Held-to-maturity debt securities831,513 900,315 (8)%
Equity securities74,232 33,860 119 %
Investment securities4,388,976 4,226,653 4 %
Loans held for sale36,785 29,097 26 %
Loans held for investment, mortgage finance5,078,161 5,098,812 — %
Loans held for investment16,700,569 16,227,203 3 %
Less: Allowance for credit losses on loans267,297 237,343 13 %
Loans held for investment, net21,511,433 21,088,672 2 %
Premises and equipment, net69,464 26,096 166 %
Accrued interest receivable and other assets933,761 757,085 23 %
Goodwill and intangibles, net1,496 1,496 — %
Total assets$29,854,994 $28,976,544 3 %
Liabilities and Stockholders’ Equity
Liabilities:
Non-interest bearing deposits$7,987,715 $9,429,352 (15)%
Interest bearing deposits15,830,612 13,888,888 14 %
Total deposits23,818,327 23,318,240 2 %
Accrued interest payable23,841 29,658 (20)%
Other liabilities502,228 338,924 48 %
Short-term borrowings1,675,000 1,350,000 24 %
Long-term debt659,997 857,795 (23)%
Total liabilities26,679,393 25,894,617 3 %
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, 2024 and 2023
300,000 300,000 — %
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 51,474,581 and 51,087,965 at June 30, 2024 and 2023, respectively
515 511 1 %
Additional paid-in capital1,050,114 1,035,063 1 %
Retained earnings2,494,572 2,362,189 6 %
Treasury stock - 5,286,503 and 3,095,444 shares at cost at June 30, 2024 and 2023, respectively
(301,868)(175,528)72 %
Accumulated other comprehensive loss, net of taxes(367,732)(440,308)(16)%
Total stockholders’ equity3,175,601 3,081,927 3 %
Total liabilities and stockholders’ equity$29,854,994 $28,976,544 3 %
5

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,
2024202320242023
Interest income
Interest and fees on loans$345,251 $332,867 $676,130 $630,305 
Investment securities33,584 27,478 65,728 52,770 
Interest bearing cash and cash equivalents43,233 41,571 97,588 104,007 
Total interest income422,068 401,916 839,446 787,082 
Interest expense
Deposits181,280 137,391 356,880 257,485 
Short-term borrowings12,749 18,253 25,532 32,997 
Long-term debt11,457 14,282 25,443 29,265 
Total interest expense205,486 169,926 407,855 319,747 
Net interest income216,582 231,990 431,591 467,335 
Provision for credit losses20,000 7,000 39,000 35,000 
Net interest income after provision for credit losses196,582 224,990 392,591 432,335 
Non-interest income
Service charges on deposit accounts5,911 5,158 12,250 10,180 
Wealth management and trust fee income3,699 3,715 7,266 7,144 
Brokered loan fees2,131 2,415 4,042 4,310 
Investment banking and advisory fees25,048 19,101 43,472 33,665 
Trading income5,650 8,397 10,362 12,601 
Other7,985 7,225 14,351 15,514 
Total non-interest income50,424 46,011 91,743 83,414 
Non-interest expense
Salaries and benefits118,840 113,050 247,567 241,720 
Occupancy expense10,666 9,482 20,403 19,101 
Marketing5,996 6,367 12,032 15,411 
Legal and professional11,273 15,669 27,468 30,183 
Communications and technology22,013 20,525 43,127 38,048 
Federal Deposit Insurance Corporation insurance assessment5,570 3,693 13,991 5,863 
Other14,051 12,858 26,214 25,345 
Total non-interest expense188,409 181,644 390,802 375,671 
Income before income taxes58,597 89,357 93,532 140,078 
Income tax expense16,935 20,706 25,728 32,766 
Net income41,662 68,651 67,804 107,312 
Preferred stock dividends4,312 4,312 8,625 8,625 
Net income available to common stockholders$37,350 $64,339 $59,179 $98,687 
Basic earnings per common share$0.80 $1.34 $1.26 $2.05 
Diluted earnings per common share$0.80 $1.33 $1.25 $2.02 
6

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
20242024202320232023
Allowance for credit losses on loans:
Beginning balance$263,962 $249,973 $244,902 $237,343 $260,928 
Loans charged-off:
Commercial9,997 7,544 8,356 13,246 8,852 
Commercial real estate2,111 3,325 5,500 — — 
Consumer— — — 41 — 
Total charge-offs12,108 10,869 13,856 13,287 8,852 
Recoveries:
Commercial153 105 15 4,346 611 
Commercial real estate— — 4 — — 
Consumer— — — — 2 
Total recoveries153 105 19 4,346 613 
Net charge-offs11,955 10,764 13,837 8,941 8,239 
Provision for credit losses on loans15,290 24,753 18,908 16,500 (15,346)
Ending balance$267,297 $263,962 $249,973 $244,902 $237,343 
Allowance for off-balance sheet credit losses:
Beginning balance$40,609 $46,362 $46,270 $44,770 $22,424 
Provision for off-balance sheet credit losses4,710 (5,753)92 1,500 22,346 
Ending balance$45,319 $40,609 $46,362 $46,270 $44,770 
Total allowance for credit losses$312,616 $304,571 $296,335 $291,172 $282,113 
Total provision for credit losses$20,000 $19,000 $19,000 $18,000 $7,000 
Allowance for credit losses on loans to total loans held for investment1.23 %1.27 %1.23 %1.19 %1.11 %
Allowance for credit losses on loans to average total loans held for investment1.27 %1.32 %1.24 %1.17 %1.15 %
Net charge-offs to average total loans held for investment(1)
0.23 %0.22 %0.27 %0.17 %0.16 %
Net charge-offs to average total loans held for investment for last 12 months(1)
0.22 %0.20 %0.25 %0.26 %0.23 %
Total provision for credit losses to average total loans held for investment(1)
0.38 %0.38 %0.37 %0.34 %0.14 %
Total allowance for credit losses to total loans held for investment
1.44 %1.46 %1.46 %1.41 %1.32 %
(1)Interim period ratios are annualized.
7

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS
(dollars in thousands)
2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
20242024202320232023
Non-accrual loans held for investment$85,021 $92,849 $81,398 $63,129 $81,039 
Non-accrual loans held for sale(1)— 9,250 — — — 
Other real estate owned— — — — — 
Total non-performing assets$85,021 $102,099 $81,398 $63,129 $81,039 
Non-accrual loans held for investment to total loans held for investment0.39 %0.45 %0.40 %0.31 %0.38 %
Total non-performing assets to total assets0.28 %0.35 %0.29 %0.21 %0.28 %
Allowance for credit losses on loans to non-accrual loans held for investment3.1x2.8x3.1x3.9x2.9x
Total allowance for credit losses to non-accrual loans held for investment3.7x3.3x3.6x4.6x3.5x
Loans held for investment past due 90 days and still accruing
$286 $3,674 $19,523 $4,602 $64 
Loans held for investment past due 90 days to total loans held for investment— %0.02 %0.10 %0.02 %— %
Loans held for sale past due 90 days and still accruing
$64 $147 $— $— $— 
(1)    First quarter 2024 includes one non-accrual loan previously reported in loans held for investment that was transferred at fair value to held for sale as of March 31, 2024.

8

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)
2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
20242024202320232023
Interest income
Interest and fees on loans$345,251 $330,879 $325,210 $345,138 $332,867 
Investment securities33,584 32,144 28,454 27,070 27,478 
Interest bearing deposits in other banks43,233 54,355 63,408 53,561 41,571 
Total interest income422,068 417,378 417,072 425,769 401,916 
Interest expense
Deposits181,280 175,600 170,173 160,117 137,391 
Short-term borrowings12,749 12,783 18,069 19,576 18,253 
Long-term debt11,457 13,986 14,113 14,005 14,282 
Total interest expense205,486 202,369 202,355 193,698 169,926 
Net interest income216,582 215,009 214,717 232,071 231,990 
Provision for credit losses20,000 19,000 19,000 18,000 7,000 
Net interest income after provision for credit losses196,582 196,009 195,717 214,071 224,990 
Non-interest income
Service charges on deposit accounts5,911 6,339 5,397 5,297 5,158 
Wealth management and trust fee income3,699 3,567 3,302 3,509 3,715 
Brokered loan fees2,131 1,911 2,076 2,532 2,415 
Investment banking and advisory fees25,048 18,424 6,906 23,099 19,101 
Trading income5,650 4,712 3,819 6,092 8,397 
Other7,985 6,366 9,633 6,343 7,225 
Total non-interest income50,424 41,319 31,133 46,872 46,011 
Non-interest expense
Salaries and benefits118,840 128,727 107,970 110,010 113,050 
Occupancy expense10,666 9,737 9,483 9,910 9,482 
Marketing5,996 6,036 5,686 4,757 6,367 
Legal and professional11,273 16,195 17,127 17,614 15,669 
Communications and technology22,013 21,114 23,607 19,607 20,525 
Federal Deposit Insurance Corporation insurance assessment5,570 8,421 25,143 5,769 3,693 
Other 14,051 12,163 12,369 12,224 12,858 
Total non-interest expense188,409 202,393 201,385 179,891 181,644 
Income before income taxes58,597 34,935 25,465 81,052 89,357 
Income tax expense16,935 8,793 5,315 19,373 20,706 
Net income41,662 26,142 20,150 61,679 68,651 
Preferred stock dividends4,312 4,313 4,312 4,313 4,312 
Net income available to common shareholders$37,350 $21,829 $15,838 $57,366 $64,339 

9

TEXAS CAPITAL BANCSHARES, INC.
TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1)
(dollars in thousands)
2nd Quarter 20241st Quarter 20244th Quarter 20233rd Quarter 20232nd Quarter 2023
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)
$4,427,023 $33,584 2.80 %$4,299,368 $32,144 2.77 %$4,078,975 $28,454 2.48 %$4,204,749 $27,070 2.33 %$4,306,881 $27,478 2.36 %
Interest bearing cash and cash equivalents3,273,069 43,233 5.31 %4,051,627 54,355 5.40 %4,637,374 63,408 5.42 %3,965,045 53,561 5.36 %3,286,091 41,571 5.07 %
Loans held for sale28,768 683 9.55 %51,164 1,184 9.31 %29,071 672 9.17 %31,878 647 8.06 %28,414 599 8.46 %
Loans held for investment, mortgage finance(4)
4,357,288 42,722 3.94 %3,517,707 31,455 3.60 %3,946,280 33,709 3.39 %4,697,702 50,813 4.29 %4,376,235 49,425 4.53 %
Loans held for investment(3)(4)
16,750,788 301,910 7.25 %16,522,089 298,306 7.26 %16,164,233 290,897 7.14 %16,317,324 293,750 7.14 %16,217,314 282,956 7.00 %
Less: Allowance for credit losses on loans
263,145 — — 249,936 — — 244,287 — — 238,883 — — 261,027 — — 
Loans held for investment, net20,844,931 344,632 6.65 %19,789,860 329,761 6.70 %19,866,226 324,606 6.48 %20,776,143 344,563 6.58 %20,332,522 332,381 6.56 %
Total earning assets28,573,791 422,132 5.86 %28,192,019 417,444 5.88 %28,611,646 417,140 5.69 %28,977,815 425,841 5.75 %27,953,908 402,029 5.69 %
Cash and other assets1,177,061 1,058,463 1,120,354 1,106,031 1,049,145 
Total assets$29,750,852 $29,250,482 $29,732,000 $30,083,846 $29,003,053 
Liabilities and Stockholders’ Equity
Transaction deposits$2,061,622 $16,982 3.31 %$2,006,493 $16,858 3.38 %$1,972,324 $15,613 3.14 %$1,755,451 $13,627 3.08 %$1,345,742 $9,468 2.82 %
Savings deposits11,981,668 143,173 4.81 %11,409,677 136,790 4.82 %11,043,155 132,801 4.77 %10,858,306 127,323 4.65 %10,590,558 114,275 4.33 %
Time deposits1,658,899 21,125 5.12 %1,719,325 21,952 5.14 %1,716,812 21,759 5.03 %1,610,235 19,167 4.72 %1,531,922 13,648 3.57 %
Total interest bearing deposits15,702,189 181,280 4.64 %15,135,495 175,600 4.67 %14,732,291 170,173 4.58 %14,223,992 160,117 4.47 %13,468,222 137,391 4.09 %
Short-term borrowings927,253 12,749 5.53 %912,088 12,783 5.64 %1,257,609 18,069 5.70 %1,393,478 19,576 5.57 %1,397,253 18,253 5.24 %
Long-term debt778,401 11,457 5.92 %859,509 13,986 6.54 %858,858 14,113 6.52 %858,167 14,005 6.47 %883,871 14,282 6.48 %
Total interest bearing liabilities17,407,843 205,486 4.75 %16,907,092 202,369 4.81 %16,848,758 202,355 4.76 %16,475,637 193,698 4.66 %15,749,346 169,926 4.33 %
Non-interest bearing deposits8,647,594 8,637,775 9,247,491 10,016,579 9,749,105 
Other liabilities537,754 509,286 541,162 474,869 389,155 
Stockholders’ equity3,157,661 3,196,329 3,094,589 3,116,761 3,115,447 
Total liabilities and stockholders’ equity$29,750,852 $29,250,482 $29,732,000 $30,083,846 $29,003,053 
Net interest income
$216,646 $215,075 $214,785 $232,143 $232,103 
Net interest margin3.01 %3.03 %2.93 %3.13 %3.29 %
(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.
(4)    In the first quarter of 2024, enhancements were made to our methodology for applying relationship pricing credits to mortgage client loans. To conform to the current period presentation, certain prior period interest income amounts have been reclassified from loans held for investment, mortgage finance to loans held for investment and related yields have been adjusted accordingly.
10