Fourth quarter 2023 net income of $20.2 million and net income available to common stockholders of $15.8 million, or $0.33 per diluted share

Book Value and Tangible Book Value⁽¹⁾per share both increased 6.1%, reaching record levels, after giving effect to the repurchase of $44.8 million in shares

Capital ratios continue to be strong, including 12.6% CET1 and 17.1% Total Capital

DALLAS, Jan. 18, 2024 (GLOBE NEWSWIRE) — Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the fourth quarter and full year of 2023.

Net income available to common stockholders was $15.8 million, or $0.33 per diluted share, for the fourth quarter of 2023, compared to $57.4 million, or $1.18 per diluted share, for the third quarter of 2023 and $212.9 million, or $4.23 per diluted share, for the fourth quarter of 2022. The fourth quarter of 2023 included Federal Deposit Insurance Corporation (“FDIC”) special assessment expense of $19.9 million ($0.32 per diluted share).

“The firm continued to execute on its strategic plan to deliver something unique and differentiated for our clients in the midst of tremendous industry pressure in 2023,” said Rob C. Holmes, President and CEO. “Continued client adoption of our broad platform coupled with significant structural improvements in our operating model and near record levels of capital and liquidity provide the foundation for long-term value creation.”

FINANCIAL RESULTS
(dollars and shares in thousands)
	4th Quarter				3rd Quarter				4th Quarter				Full Year				Full Year
		2023				2023				2022				2023				2022
OPERATING RESULTS
Net income	$	20,150			$	61,679			$	217,251			$	189,141			$	332,478
Net income available to common stockholders	$	15,838			$	57,366			$	212,939			$	171,891			$	315,228
Diluted earnings per common share	$	0.33			$	1.18			$	4.23			$	3.54			$	6.18
Diluted common shares		48,098				48,529				50,283				48,610				51,047
Return on average assets		0.27	%			0.81	%			2.80	%			0.64	%			1.04	%
Return on average common equity		2.25	%			8.08	%			30.66	%			6.15	%			11.33	%
BALANCE SHEET
Loans held for investment	$	16,362,230			$	16,183,882			$	15,197,307
Loans held for investment, mortgage finance		3,978,328				4,429,489				4,090,033
Total loans held for investment		20,340,558				20,613,371				19,287,340
Loans held for sale		44,105				155,073				36,357
Total assets		28,356,266				29,628,249				28,414,642
Non-interest bearing deposits		7,328,276				9,352,883				9,618,081
Total deposits		22,371,839				23,878,978				22,856,880
Stockholders’ equity		3,199,142				3,077,700				3,055,351

_{⁽¹⁾ Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.}

FOURTH QUARTER 2023 COMPARED TO THIRD QUARTER 2023

For the fourth quarter of 2023, net income available to common stockholders was $15.8 million, or $0.33 per diluted share, compared to $57.4 million, or $1.18 per diluted share, for the third quarter of 2023.

Provision for credit losses for the fourth quarter of 2023 was $19.0 million, compared to $18.0 million for the third quarter of 2023. The $19.0 million provision for credit losses recorded in the fourth quarter of 2023 resulted primarily from increases in criticized and non-accrual loans, as well as $13.8 million in net charge-offs.

Net interest income was $214.7 million for the fourth quarter of 2023, compared to $232.1 million for the third quarter of 2023. The decrease in net interest income was primarily due to a decrease in loans held for investment (“LHI”), mortgage finance yields, as well as increases in funding costs and average interest-bearing liabilities. Net interest margin for the fourth quarter of 2023 was 2.93%, a decrease of 20 basis points from the third quarter of 2023. LHI, excluding mortgage finance, yields increased 7 basis points from the third quarter of 2023 and LHI, mortgage finance yields decreased 152 basis points from the third quarter of 2023. Total cost of deposits was 2.82% for the fourth quarter of 2023, a 20 basis point increase from the third quarter of 2023.

Non-interest income for the fourth quarter of 2023 decreased $15.7 million, or 34%, compared to the third quarter of 2023, primarily due to a decrease in investment banking and trading income.

Non-interest expense for the fourth quarter of 2023 increased $21.5 million, or 12%, compared to the third quarter of 2023, primarily due to an increase in FDIC insurance assessment expense, which included $19.9 million in special assessment expense recorded in the fourth quarter of 2023.

FOURTH QUARTER 2023 COMPARED TO FOURTH QUARTER 2022

Net income available to common stockholders was $15.8 million, or $0.33 per diluted share, for the fourth quarter of 2023, compared to $212.9 million, or $4.23 per diluted share, for the fourth quarter of 2022.

The fourth quarter of 2023 included a $19.0 million provision for credit losses, reflecting increases in criticized and non-accrual loans and net charge-offs of $13.8 million, compared to a $34.0 million provision for credit losses for the fourth quarter of 2022.

Net interest income decreased to $214.7 million for the fourth quarter of 2023, compared to $247.6 million for the fourth quarter of 2022, primarily due to an increase in funding costs and a decrease in average earning assets, partially offset by an increase in yields on average earning assets. Net interest margin decreased 33 basis points to 2.93% for the fourth quarter of 2023, as compared to the fourth quarter of 2022. LHI, excluding mortgage finance, yields increased 139 basis points compared to the fourth quarter of 2022 and LHI, mortgage finance yields decreased 293 basis points from the fourth quarter of 2022. Total cost of deposits increased 129 basis points compared to the fourth quarter of 2022.

Non-interest income for the fourth quarter of 2023 decreased $246.5 million, or 89%, compared to the fourth quarter of 2022. The decrease was primarily due to a non-recurring $248.5 million gain related to the sale of our premium finance subsidiary recorded in the fourth quarter of 2022.

Non-interest expense for the fourth quarter of 2023 decreased $11.7 million, or 5%, compared to the fourth quarter of 2022, primarily due to decreases in occupancy, marketing, legal and professional and other expenses, partially offset by an increase in FDIC insurance assessment expense, resulting from the FDIC special assessment described above. The fourth quarter of 2022 included $13.0 million in legal and professional expense related to the sale of our premium finance subsidiary, $9.8 million in restructuring reserves, primarily related to occupancy expense, and $8.0 million in charitable contributions recorded in other non-interest expense.

CREDIT QUALITY

Net charge-offs of $13.8 million were recorded during the fourth quarter of 2023, compared to net charge-offs of $8.9 million and $15.0 million during the third quarter of 2023 and the fourth quarter of 2022, respectively. Criticized loans totaled $738.2 million at December 31, 2023, compared to $677.4 million at September 30, 2023 and $513.2 million at December 31, 2022. Non-accrual LHI totaled $81.4 million at December 31, 2023, compared to $63.1 million at September 30, 2023 and $48.3 million at December 31, 2022. The ratio of non-accrual LHI to total LHI for the fourth quarter of 2023 was 0.40%, compared to 0.31% for the third quarter of 2023 and 0.25% for the fourth quarter of 2022. The ratio of total allowance for credit losses to total LHI was 1.46% at December 31, 2023, compared to 1.41% and 1.43% at September 30, 2023 and December 31, 2022, respectively.

REGULATORY RATIOS AND CAPITAL

All regulatory ratios continue to be in excess of “well capitalized” requirements as of December 31, 2023. Our CET1, tier 1 capital, total capital and leverage ratios were 12.6%, 14.2%, 17.1% and 12.2%, respectively, at December 31, 2023, compared to 12.7%, 14.3%, 17.1% and 12.1%, respectively, at September 30, 2023 and 13.0%, 14.7%, 17.7% and 11.5%, respectively, at December 31, 2022. At December 31, 2023, our ratio of tangible common equity to total tangible assets was 10.2%, compared to 9.4% at September 30, 2023 and 9.7% at December 31, 2022.

During the fourth quarter of 2023, the Company repurchased 809,623 shares of its common stock for an aggregate purchase price, including excise tax expense, of $44.8 million, at a weighted average price of $54.90 per share. On January 17, 2024, the Company’s board of directors authorized a new share repurchase program under which the Company may repurchase up to $150.0 million in shares of its outstanding common stock through January 31, 2025. Remaining repurchase authorization under the January 18, 2023 share repurchase program was terminated upon authorization of this new program.

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 holding 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 firm 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: 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; legislative and regulatory changes; 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.

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
		2023			2023			2023			2023			2022
CONSOLIDATED STATEMENTS OF INCOME
Interest income	$	417,072		$	425,769		$	401,916		$	385,166		$	371,292
Interest expense		202,355			193,698			169,926			149,821			123,687
Net interest income		214,717			232,071			231,990			235,345			247,605
Provision for credit losses		19,000			18,000			7,000			28,000			34,000
Net interest income after provision for credit losses		195,717			214,071			224,990			207,345			213,605
Non-interest income		31,133			46,872			46,011			37,403			277,667
Non-interest expense		201,385			179,891			181,644			194,027			213,090
Income before income taxes		25,465			81,052			89,357			50,721			278,182
Income tax expense		5,315			19,373			20,706			12,060			60,931
Net income		20,150			61,679			68,651			38,661			217,251
Preferred stock dividends		4,312			4,313			4,312			4,313			4,312
Net income available to common stockholders	$	15,838		$	57,366		$	64,339		$	34,348		$	212,939
Diluted earnings per common share	$	0.33		$	1.18		$	1.33		$	0.70		$	4.23
Diluted common shares		48,097,517			48,528,698			48,421,276			48,880,725			50,282,663
CONSOLIDATED BALANCE SHEET DATA
Total assets	$	28,356,266		$	29,628,249		$	28,976,544		$	28,596,653		$	28,414,642
Loans held for investment		16,362,230			16,183,882			16,227,203			16,014,497			15,197,307
Loans held for investment, mortgage finance		3,978,328			4,429,489			5,098,812			4,060,570			4,090,033
Loans held for sale		44,105			155,073			29,097			27,608			36,357
Interest bearing cash and cash equivalents		3,042,357			3,975,860			2,587,131			3,385,494			4,778,623
Investment securities		4,143,194			4,069,717			4,226,653			4,345,969			3,585,114
Non-interest bearing deposits		7,328,276			9,352,883			9,429,352			9,500,583			9,618,081
Total deposits		22,371,839			23,878,978			23,318,240			22,179,697			22,856,880
Short-term borrowings		1,500,000			1,400,000			1,350,000			2,100,000			1,201,142
Long-term debt		859,147			858,471			857,795			932,119			931,442
Stockholders’ equity		3,199,142			3,077,700			3,081,927			3,079,974			3,055,351
End of period shares outstanding		47,237,912			48,015,003			47,992,521			47,851,862			48,783,763
Book value per share	$	61.37		$	57.85		$	57.97		$	58.10		$	56.48
Tangible book value per share(1)	$	61.34		$	57.82		$	57.93		$	58.06		$	56.45
SELECTED FINANCIAL RATIOS
Net interest margin		2.93	%		3.13	%		3.29	%		3.33	%		3.26	%
Return on average assets		0.27	%		0.81	%		0.95	%		0.53	%		2.80	%
Return on average common equity		2.25	%		8.08	%		9.17	%		5.06	%		30.66	%
Non-interest income to average earning assets		0.43	%		0.64	%		0.66	%		0.54	%		3.70	%
Efficiency ratio(2)		81.9	%		64.5	%		65.3	%		71.1	%		40.6	%
Non-interest expense to average earning assets		2.79	%		2.46	%		2.61	%		2.78	%		2.84	%
Common equity to total assets		10.2	%		9.4	%		9.6	%		9.7	%		9.7	%
Tangible common equity to total tangible assets(3)		10.2	%		9.4	%		9.6	%		9.7	%		9.7	%
Common Equity Tier 1		12.6	%		12.7	%		12.2	%		12.4	%		13.0	%
Tier 1 capital		14.2	%		14.3	%		13.7	%		14.0	%		14.7	%
Total capital		17.1	%		17.1	%		16.4	%		16.9	%		17.7	%
Leverage		12.2	%		12.1	%		12.4	%		12.0	%		11.5	%

_{⁽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.}
        

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
	December 31, 2023			December 31, 2022			% Change
Assets
Cash and due from banks	$	200,493		$	233,637		(14)%
Interest bearing cash and cash equivalents		3,042,357			4,778,623		(36)%
Available-for-sale debt securities		3,225,892			2,615,644		23	%
Held-to-maturity debt securities		865,477			935,514		(7)%
Equity securities		51,825			33,956		53	%
Investment securities		4,143,194			3,585,114		16	%
Loans held for sale		44,105			36,357		21	%
Loans held for investment, mortgage finance		3,978,328			4,090,033		(3)%
Loans held for investment		16,362,230			15,197,307		8	%
Less: Allowance for credit losses on loans		249,973			253,469		(1)%
Loans held for investment, net		20,090,585			19,033,871		6	%
Premises and equipment, net		32,366			26,382		23	%
Accrued interest receivable and other assets		801,670			719,162		11	%
Goodwill and intangibles, net		1,496			1,496		—	%
Total assets	$	28,356,266		$	28,414,642		—	%
Liabilities and Stockholders’ Equity
Liabilities:
Non-interest bearing deposits	$	7,328,276		$	9,618,081		(24)%
Interest bearing deposits		15,043,563			13,238,799		14	%
Total deposits		22,371,839			22,856,880		(2)%
Accrued interest payable		33,234			24,000		38	%
Other liabilities		392,904			345,827		14	%
Short-term borrowings		1,500,000			1,201,142		25	%
Long-term debt		859,147			931,442		(8)%
Total liabilities		25,157,124			25,359,291		(1)%
Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares – 10,000,000
Issued shares – 300,000 shares issued at December 31, 2023 and 2022		300,000			300,000		—	%
Common stock, $.01 par value:
Authorized shares – 100,000,000
Issued shares – 51,142,979 and 50,867,298 at December 31, 2023 and 2022, respectively		511			509		—	%
Additional paid-in capital		1,045,576			1,025,593		2	%
Retained earnings		2,435,393			2,263,502		8	%
Treasury stock – 3,905,067 and 2,083,535 shares at cost at December 31, 2023 and 2022, respectively		(220,334	)		(115,310	)	91	%
Accumulated other comprehensive loss, net of taxes		(362,004	)		(418,943	)	(14)%
Total stockholders’ equity		3,199,142			3,055,351		5	%
Total liabilities and stockholders’ equity	$	28,356,266		$	28,414,642		—	%

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands except per share data)
	Three Months Ended December 31,				Twelve Months Ended December 31,
	2023		2022		2023		2022
Interest income
Interest and fees on loans	$	325,210	$	295,372	$	1,300,653	$	983,794
Investment securities		28,454		16,210		108,294		63,179
Interest bearing cash and cash equivalents		63,408		59,710		220,976		97,271
Total interest income		417,072		371,292		1,629,923		1,144,244
Interest expense
Deposits		170,173		96,150		587,775		190,663
Short-term borrowings		18,069		13,449		70,642		29,077
Long-term debt		14,113		14,088		57,383		48,739
Total interest expense		202,355		123,687		715,800		268,479
Net interest income		214,717		247,605		914,123		875,765
Provision for credit losses		19,000		34,000		72,000		66,000
Net interest income after provision for credit losses		195,717		213,605		842,123		809,765
Non-interest income
Service charges on deposit accounts		5,397		5,252		20,874		23,266
Wealth management and trust fee income		3,302		3,442		13,955		15,036
Brokered loan fees		2,076		2,655		8,918		14,159
Investment banking and trading income		10,725		11,937		86,182		35,054
Gain on disposal of subsidiary		—		248,526		—		248,526
Other		9,633		5,855		31,490		13,481
Total non-interest income		31,133		277,667		161,419		349,522
Non-interest expense
Salaries and benefits		107,970		102,925		459,700		434,906
Occupancy expense		9,483		17,030		38,494		44,222
Marketing		5,686		10,623		25,854		32,388
Legal and professional		17,127		37,493		64,924		75,858
Communications and technology		23,607		20,434		81,262		69,253
Federal Deposit Insurance Corporation insurance assessment		25,143		3,092		36,775		14,344
Other		12,369		21,493		49,938		56,561
Total non-interest expense		201,385		213,090		756,947		727,532
Income before income taxes		25,465		278,182		246,595		431,755
Income tax expense		5,315		60,931		57,454		99,277
Net income		20,150		217,251		189,141		332,478
Preferred stock dividends		4,312		4,312		17,250		17,250
Net income available to common stockholders	$	15,838	$	212,939	$	171,891	$	315,228
Basic earnings per common share	$	0.33	$	4.28	$	3.58	$	6.25
Diluted earnings per common share	$	0.33	$	4.23	$	3.54	$	6.18

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
	4th Quarter			3rd Quarter			2nd Quarter			1st Quarter			4th Quarter
		2023			2023			2023			2023			2022
Allowance for credit losses on loans:
Beginning balance	$	244,902		$	237,343		$	260,928		$	253,469		$	234,613
Loans charged-off:
Commercial		8,356			13,246			8,852			20,732			17,106
Commercial real estate		5,500			—			—			—			—
Consumer		—			41			—			—			—
Total charge-offs		13,856			13,287			8,852			20,732			17,106
Recoveries:
Commercial		15			4,346			611			819			2,105
Commercial real estate		4			—			—			—			—
Consumer		—			—			2			3			2
Total recoveries		19			4,346			613			822			2,107
Net charge-offs		13,837			8,941			8,239			19,910			14,999
Provision for credit losses on loans		18,908			16,500			(15,346	)		27,369			33,855
Ending balance	$	249,973		$	244,902		$	237,343		$	260,928		$	253,469
Allowance for off-balance sheet credit losses:
Beginning balance	$	46,270		$	44,770		$	22,424		$	21,793		$	21,648
Provision for off-balance sheet credit losses		92			1,500			22,346			631			145
Ending balance	$	46,362		$	46,270		$	44,770		$	22,424		$	21,793
Total allowance for credit losses	$	296,335		$	291,172		$	282,113		$	283,352		$	275,262
Total provision for credit losses	$	19,000		$	18,000		$	7,000		$	28,000		$	34,000
Allowance for credit losses on loans to total loans held for investment		1.23	%		1.19	%		1.11	%		1.30	%		1.31	%
Allowance for credit losses on loans to average total loans held for investment		1.24	%		1.17	%		1.15	%		1.38	%		1.31	%
Net charge-offs to average total loans held for investment(1)		0.27	%		0.17	%		0.16	%		0.43	%		0.31	%
Net charge-offs to average total loans held for investment for last 12 months(1)		0.25	%		0.26	%		0.23	%		0.19	%		0.09	%
Total provision for credit losses to average total loans held for investment(1)		0.37	%		0.34	%		0.14	%		0.60	%		0.70	%
Total allowance for credit losses to total loans held for investment		1.46	%		1.41	%		1.32	%		1.41	%		1.43	%

_{⁽¹⁾ Interim period ratios are annualized.}

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS
(dollars in thousands)
	4th Quarter			3rd Quarter			2nd Quarter			1st Quarter			4th Quarter
		2023			2023			2023			2023			2022
Non-accrual loans held for investment	$	81,398		$	63,129		$	81,039		$	93,951		$	48,338
Non-accrual loans held for sale		—			—			—			—			—
Other real estate owned		—			—			—			—			—
Total non-performing assets	$	81,398		$	63,129		$	81,039		$	93,951		$	48,338
Non-accrual loans held for investment to total loans held for investment		0.40	%		0.31	%		0.38	%		0.47	%		0.25	%
Total non-performing assets to total assets		0.29	%		0.21	%		0.28	%		0.33	%		0.17	%
Allowance for credit losses on loans to non-accrual loans held for investment	3.1x			3.9x			2.9x			2.8x			5.2x
Total allowance for credit losses to non-accrual loans held for investment	3.6x			4.6x			3.5x			3.0x			5.7x
Loans held for investment past due 90 days and still accruing	$	19,523		$	4,602		$	64		$	3,098		$	131
Loans held for investment past due 90 days to total loans held for investment		0.10	%		0.02	%		—	%		0.02	%		—	%
Loans held for sale past due 90 days and still accruing	$	—		$	—		$	—		$	—		$	—

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)
	4th Quarter		3rd Quarter		2nd Quarter		1st Quarter		4th Quarter
	2023		2023		2023		2023		2022
Interest income
Interest and fees on loans	$	325,210	$	345,138	$	332,867	$	297,438	$	295,372
Investment securities		28,454		27,070		27,478		25,292		16,210
Interest bearing deposits in other banks		63,408		53,561		41,571		62,436		59,710
Total interest income		417,072		425,769		401,916		385,166		371,292
Interest expense
Deposits		170,173		160,117		137,391		120,094		96,150
Short-term borrowings		18,069		19,576		18,253		14,744		13,449
Long-term debt		14,113		14,005		14,282		14,983		14,088
Total interest expense		202,355		193,698		169,926		149,821		123,687
Net interest income		214,717		232,071		231,990		235,345		247,605
Provision for credit losses		19,000		18,000		7,000		28,000		34,000
Net interest income after provision for credit losses		195,717		214,071		224,990		207,345		213,605
Non-interest income
Service charges on deposit accounts		5,397		5,297		5,158		5,022		5,252
Wealth management and trust fee income		3,302		3,509		3,715		3,429		3,442
Brokered loan fees		2,076		2,532		2,415		1,895		2,655
Investment banking and trading income		10,725		29,191		27,498		18,768		11,937
Gain on disposal of subsidiary		—		—		—		—		248,526
Other		9,633		6,343		7,225		8,289		5,855
Total non-interest income		31,133		46,872		46,011		37,403		277,667
Non-interest expense
Salaries and benefits		107,970		110,010		113,050		128,670		102,925
Occupancy expense		9,483		9,910		9,482		9,619		17,030
Marketing		5,686		4,757		6,367		9,044		10,623
Legal and professional		17,127		17,614		15,669		14,514		37,493
Communications and technology		23,607		19,607		20,525		17,523		20,434
Federal Deposit Insurance Corporation insurance assessment		25,143		5,769		3,693		2,170		3,092
Other		12,369		12,224		12,858		12,487		21,493
Total non-interest expense		201,385		179,891		181,644		194,027		213,090
Income before income taxes		25,465		81,052		89,357		50,721		278,182
Income tax expense		5,315		19,373		20,706		12,060		60,931
Net income		20,150		61,679		68,651		38,661		217,251
Preferred stock dividends		4,312		4,313		4,312		4,313		4,312
Net income available to common shareholders	$	15,838	$	57,366	$	64,339	$	34,348	$	212,939

TEXAS CAPITAL BANCSHARES, INC.
TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1)
(dollars in thousands)
	4th Quarter 2023							3rd Quarter 2023							2nd Quarter 2023							1st Quarter 2023							4th 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)	$	4,078,975	$	28,454	2.48	%		$	4,204,749	$	27,070	2.33	%		$	4,306,881	$	27,478	2.36	%		$	4,060,456	$	25,292	2.31	%		$	3,385,372	$	16,210	1.70	%
Interest bearing cash and cash equivalents		4,637,374		63,408	5.42	%			3,965,045		53,561	5.36	%			3,286,091		41,571	5.07	%			5,541,341		62,436	4.57	%			6,158,769		59,710	3.85	%
Loans held for sale		29,071		672	9.17	%			31,878		647	8.06	%			28,414		599	8.46	%			43,472		938	8.75	%			1,053,157		12,064	4.54	%
Loans held for investment, mortgage finance		3,946,280		11,168	1.12	%			4,697,702		31,217	2.64	%			4,376,235		36,198	3.32	%			3,286,804		28,528	3.52	%			4,279,367		43,708	4.05	%
Loans held for investment(3)		16,164,233		313,438	7.69	%			16,317,324		313,346	7.62	%			16,217,314		296,183	7.33	%			15,598,854		268,131	6.97	%			15,105,083		239,746	6.30	%
Less: Allowance for credit losses on loans		244,287		—	—				238,883		—	—				261,027		—	—				252,727		—	—				233,246		—	—
Loans held for investment, net		19,866,226		324,606	6.48	%			20,776,143		344,563	6.58	%			20,332,522		332,381	6.56	%			18,632,931		296,659	6.46	%			19,151,204		283,454	5.87	%
Total earning assets		28,611,646		417,140	5.69	%			28,977,815		425,841	5.75	%			27,953,908		402,029	5.69	%			28,278,200		385,325	5.45	%			29,748,502		371,438	4.89	%
Cash and other assets		1,120,354							1,106,031							1,049,145							1,041,745							989,900
Total assets	$	29,732,000						$	30,083,846						$	29,003,053						$	29,319,945						$	30,738,402
Liabilities and Stockholders’ Equity
Transaction deposits	$	1,972,324	$	15,613	3.14	%		$	1,755,451	$	13,627	3.08	%		$	1,345,742	$	9,468	2.82	%		$	776,500	$	3,853	2.01	%		$	1,105,466	$	4,977	1.79	%
Savings deposits		11,043,155		132,801	4.77	%			10,858,306		127,323	4.65	%			10,590,558		114,275	4.33	%			11,195,402		105,707	3.83	%			10,563,049		80,801	3.03	%
Time deposits		1,716,812		21,759	5.03	%			1,610,235		19,167	4.72	%			1,531,922		13,648	3.57	%			1,430,657		10,534	2.99	%			1,625,857		10,372	2.53	%
Total interest bearing deposits		14,732,291		170,173	4.58	%			14,223,992		160,117	4.47	%			13,468,222		137,391	4.09	%			13,402,559		120,094	3.63	%			13,294,372		96,150	2.87	%
Short-term borrowings		1,257,609		18,069	5.70	%			1,393,478		19,576	5.57	%			1,397,253		18,253	5.24	%			1,242,881		14,744	4.81	%			1,387,660		13,449	3.84	%
Long-term debt		858,858		14,113	6.52	%			858,167		14,005	6.47	%			883,871		14,282	6.48	%			931,796		14,983	6.52	%			931,107		14,088	6.00	%
Total interest bearing liabilities		16,848,758		202,355	4.76	%			16,475,637		193,698	4.66	%			15,749,346		169,926	4.33	%			15,577,236		149,821	3.90	%			15,613,139		123,687	3.14	%
Non-interest bearing deposits		9,247,491							10,016,579							9,749,105							10,253,731							11,642,969
Other liabilities		541,162							474,869							389,155							436,621							426,543
Stockholders’ equity		3,094,589							3,116,761							3,115,447							3,052,357							3,055,751
Total liabilities and stockholders’ equity	$	29,732,000						$	30,083,846						$	29,003,053						$	29,319,945						$	30,738,402
Net interest income			$	214,785						$	232,143						$	232,103						$	235,504						$	247,751
Net interest margin					2.93	%						3.13	%						3.29	%						3.33	%						3.26	%

_{⁽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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