Third quarter 2023 net income of $61.7 million and net income available to common stockholders of $57.4 million, or $1.18 per diluted share

Top tier capital ratios, including 12.7% CET1 and 17.1% Total Capital

DALLAS, Oct. 19, 2023 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ:TCBI), the parent company of Texas Capital Bank, announced operating results for the third quarter of 2023.

Net income available to common stockholders was $57.4 million, or $1.18 per diluted share, for the third quarter of 2023, compared to $64.3 million, or $1.33 per diluted share, for the second quarter of 2023 and $37.1 million, or $0.74 per diluted share, for the third quarter of 2022.

"Our quarterly results demonstrate the power of the platform we built over the last two years," said Rob C. Holmes, President and CEO. "Our capability and expertise to provide solutions for our clients extends well beyond traditional lending products and is complimented by near record levels of capital and liquidity."

FINANCIAL RESULTS
(dollars and shares in thousands)
	3rd Quarter			2nd Quarter			3rd Quarter
		2023			2023			2022
OPERATING RESULTS
Net income	$	61,679		$	68,651		$	41,418
Net income available to common stockholders	$	57,366		$	64,339		$	37,105
Diluted earnings per common share	$	1.18		$	1.33		$	0.74
Diluted common shares		48,529			48,421			50,418
Return on average assets		0.81	%		0.95	%		0.52	%
Return on average common equity		8.08	%		9.17	%		5.36	%

BALANCE SHEET
Loans held for investment	$	16,183,882		$	16,227,203		$	14,878,959
Loans held for investment, mortgage finance		4,429,489			5,098,812			4,908,822
Total loans held for investment		20,613,371			21,326,015			19,787,781
Loans held for sale		155,073			29,097			3,142,178
Total assets		29,628,249			28,976,544			30,408,513
Non-interest bearing deposits		9,352,883			9,429,352			11,494,685
Total deposits		23,878,978			23,318,240			24,498,563
Stockholders' equity		3,077,700			3,081,927			2,885,775

THIRD QUARTER 2023 COMPARED TO SECOND QUARTER 2023

For the third quarter of 2023, net income available to common stockholders was $57.4 million, or $1.18 per diluted share, compared to $64.3 million, or $1.33 per diluted share, for the second quarter of 2023.

Provision for credit losses for the third quarter of 2023 was $18.0 million, compared to $7.0 million for the second quarter of 2023. The $18.0 million provision for credit losses recorded in the third quarter of 2023 resulted primarily from an increase in criticized loans, partially offset by decreases in total loans held for investment ("LHI") and non-accrual loans.

Net interest income of $232.1 million for the third quarter of 2023 was relatively flat as compared to $232.0 million for the second quarter of 2023, as increases in average earning assets and yields on average earning assets were offset by increases in funding costs and average interest-bearing liabilities. Net interest margin for the third quarter of 2023 was 3.13%, a decrease of 16 basis points from the second quarter of 2023. LHI, excluding mortgage finance, yields increased 29 basis points from the second quarter of 2023 and LHI, mortgage finance yields decreased 68 basis points from the second quarter of 2023. Total cost of deposits was 2.62% for the third quarter of 2023, a 25 basis point increase from the second quarter of 2023.

Non-interest income for the third quarter of 2023 increased $861,000, or 2%, compared to the second quarter of 2023, primarily due to an increase in investment banking and trading income, partially offset by a decrease in other non-interest income.

Non-interest expense for the third quarter of 2023 decreased $1.8 million, or 1%, compared to the second quarter of 2023, primarily due to decreases in salaries and benefits and marketing expenses, partially offset by increases in legal and professional and Federal Deposit Insurance Corporation ("FDIC") insurance assessment expenses.

THIRD QUARTER 2023 COMPARED TO THIRD QUARTER 2022

Net income available to common stockholders was $57.4 million, or $1.18 per diluted share, for the third quarter of 2023, compared to $37.1 million, or $0.74 per diluted share, for the third quarter of 2022.

The third quarter of 2023 included a $18.0 million provision for credit losses, reflecting an increase in criticized loans, partially offset by decreases in total LHI and non-accrual loans, compared to a $12.0 million provision for credit losses for the third quarter of 2022.

Net interest income decreased to $232.1 million for the third quarter of 2023, compared to $239.1 million for the third 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 increased 8 basis points to 3.13% for the third quarter of 2023, as compared to the third quarter of 2022. LHI, excluding mortgage finance, yields increased 247 basis points compared to the third quarter of 2022 and LHI, mortgage finance yields decreased 132 basis points from the third quarter of 2022. Total cost of deposits increased 169 basis points compared to the third quarter of 2022.

Non-interest income for the third quarter of 2023 increased $21.5 million, or 85%, compared to the third quarter of 2022. The increase was primarily due to an increase in investment banking and trading income.

Non-interest expense for the third quarter of 2023 decreased $17.2 million, or 9%, compared to the third quarter of 2022, primarily due to decreases in salaries and benefits and marketing expenses, partially offset by increases in communications and technology and FDIC insurance assessment expenses. The third quarter of 2022 included $13.7 million in salaries and benefits expense related to the sale of our premium finance subsidiary.

CREDIT QUALITY

Net charge-offs of $8.9 million were recorded during the third quarter of 2023, compared to net charge-offs of $8.2 million and $2.7 million during the second quarter of 2023 and the third quarter of 2022, respectively. Criticized loans totaled $677.4 million at September 30, 2023, compared to $619.4 million at June 30, 2023 and $484.0 million at September 30, 2022. Non-accrual LHI totaled $63.1 million at September 30, 2023, compared to $81.0 million at June 30, 2023 and $35.9 million at September 30, 2022. The ratio of non-accrual LHI to total LHI for the third quarter of 2023 was 0.31%, compared to 0.38% for the second quarter of 2023 and 0.18% for the third quarter of 2022. The ratio of total allowance for credit losses to total LHI was 1.41% at September 30, 2023, compared to 1.32% and 1.30% at June 30, 2023 and September 30, 2022, respectively.

REGULATORY RATIOS AND CAPITAL

All regulatory ratios continue to be in excess of "well capitalized" requirements as of September 30, 2023. Our CET1, tier 1 capital, total capital and leverage ratios were 12.7%, 14.3%, 17.1% and 12.1%, respectively, at September 30, 2023, compared to 12.2%, 13.7%, 16.4% and 12.4%, respectively, at June 30, 2023 and 11.1%, 12.6%, 15.2% and 10.7%, respectively, at September 30, 2022. At September 30, 2023, our ratio of tangible common equity to total tangible assets was 9.4%, compared to 9.6% at June 30, 2023 and 8.5% at September 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 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; 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, including in the context of regulatory examinations and related findings and actions; TCBI's ability to effectively manage its liquidity; TCBI's ability to pursue and execute upon growth plans, whether as a function of capital, liquidity or other limitations; 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; TCBI's ability to successfully execute its business strategy, including developing and executing new lines of business and new products and services; 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; negative press and social media attention with respect to the banking industry or TCBI, in particular; the transition away from the London Interbank Offered Rate (LIBOR); 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)
	3rd Quarter			2nd Quarter			1st Quarter			4th Quarter			3rd Quarter
		2023			2023			2023			2022			2022
CONSOLIDATED STATEMENTS OF INCOME
Interest income	$	425,769		$	401,916		$	385,166		$	371,292		$	322,072
Interest expense		193,698			169,926			149,821			123,687			82,991
Net interest income		232,071			231,990			235,345			247,605			239,081
Provision for credit losses		18,000			7,000			28,000			34,000			12,000
Net interest income after provision for credit losses		214,071			224,990			207,345			213,605			227,081
Non-interest income		46,872			46,011			37,403			277,667			25,332
Non-interest expense		179,891			181,644			194,027			213,090			197,047
Income before income taxes		81,052			89,357			50,721			278,182			55,366
Income tax expense		19,373			20,706			12,060			60,931			13,948
Net income		61,679			68,651			38,661			217,251			41,418
Preferred stock dividends		4,313			4,312			4,313			4,312			4,313
Net income available to common stockholders	$	57,366		$	64,339		$	34,348		$	212,939		$	37,105
Diluted earnings per common share	$	1.18		$	1.33		$	0.70		$	4.23		$	0.74
Diluted common shares		48,528,698			48,421,276			48,880,725			50,282,663			50,417,884

CONSOLIDATED BALANCE SHEET DATA
Total assets	$	29,628,249		$	28,976,544		$	28,596,653		$	28,414,642		$	30,408,513
Loans held for investment		16,183,882			16,227,203			16,014,497			15,197,307			14,878,959
Loans held for investment, mortgage finance		4,429,489			5,098,812			4,060,570			4,090,033			4,908,822
Loans held for sale		155,073			29,097			27,608			36,357			3,142,178
Interest bearing cash and cash equivalents		3,975,860			2,587,131			3,385,494			4,778,623			3,399,638
Investment securities		4,069,717			4,226,653			4,345,969			3,585,114			3,369,622
Non-interest bearing deposits		9,352,883			9,429,352			9,500,583			9,618,081			11,494,685
Total deposits		23,878,978			23,318,240			22,179,697			22,856,880			24,498,563
Short-term borrowings		1,400,000			1,350,000			2,100,000			1,201,142			1,701,480
Long-term debt		858,471			857,795			932,119			931,442			930,766
Stockholders' equity		3,077,700			3,081,927			3,079,974			3,055,351			2,885,775

End of period shares outstanding		48,015,003			47,992,521			47,851,862			48,783,763			49,897,726
Book value per share	$	57.85		$	57.97		$	58.10		$	56.48		$	51.82
Tangible book value per share⁽¹⁾	$	57.82		$	57.93		$	58.06		$	56.45		$	51.48

SELECTED FINANCIAL RATIOS
Net interest margin		3.13	%		3.29	%		3.33	%		3.26	%		3.05	%
Return on average assets		0.81	%		0.95	%		0.53	%		2.80	%		0.52	%
Return on average common equity		8.08	%		9.17	%		5.06	%		30.66	%		5.36	%
Non-interest income to average earning assets		0.64	%		0.66	%		0.54	%		3.70	%		0.33	%
Efficiency ratio⁽²⁾		64.5	%		65.3	%		71.1	%		40.6	%		74.5	%
Non-interest expense to average earning assets		2.46	%		2.61	%		2.78	%		2.84	%		2.53	%
Common equity to total assets		9.4	%		9.6	%		9.7	%		9.7	%		8.5	%
Tangible common equity to total tangible assets⁽³⁾		9.4	%		9.6	%		9.7	%		9.7	%		8.5	%
Common Equity Tier 1		12.7	%		12.2	%		12.4	%		13.0	%		11.1	%
Tier 1 capital		14.3	%		13.7	%		14.0	%		14.7	%		12.6	%
Total capital		17.1	%		16.4	%		16.9	%		17.7	%		15.2	%
Leverage		12.1	%		12.4	%		12.0	%		11.5	%		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.



TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
	September 30, 2023			September 30, 2022			% Change
Assets
Cash and due from banks	$	216,916		$	240,609		(10	)%
Interest bearing cash and cash equivalents		3,975,860			3,399,638		17	%
Available-for-sale debt securities		3,147,865			2,380,774		32	%
Held-to-maturity debt securities		881,352			955,875		(8	)%
Equity securities		40,500			32,973		23	%
Investment securities		4,069,717			3,369,622		21	%
Loans held for sale		155,073			3,142,178		(95	)%
Loans held for investment, mortgage finance		4,429,489			4,908,822		(10	)%
Loans held for investment		16,183,882			14,878,959		9	%
Less: Allowance for credit losses on loans		244,902			234,613		4	%
Loans held for investment, net		20,368,469			19,553,168		4	%
Premises and equipment, net		31,050			27,180		14	%
Accrued interest receivable and other assets		809,668			648,172		25	%
Other assets held for sale		—			26,450		(100	)%
Goodwill and intangibles, net		1,496			1,496		—	%
Total assets	$	29,628,249		$	30,408,513		(3	)%

Liabilities and Stockholders' Equity
Liabilities:
Non-interest bearing deposits	$	9,352,883		$	11,494,685		(19	)%
Interest bearing deposits		14,526,095			13,003,878		12	%
Total deposits		23,878,978			24,498,563		(3	)%
Accrued interest payable		31,149			18,465		69	%
Other liabilities		381,951			297,900		28	%
Other liabilities held for sale		—			75,564		(100	)%
Short-term borrowings		1,400,000			1,701,480		(18	)%
Long-term debt		858,471			930,766		(8	)%
Total liabilities		26,550,549			27,522,738		(4	)%

Stockholders' equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - 300,000 shares issued at September 30, 2023 and 2022		300,000			300,000		—	%
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 51,110,447 and 50,840,022 at September 30, 2023 and 2022, respectively		511			509		—	%
Additional paid-in capital		1,039,074			1,020,153		2	%
Retained earnings		2,419,555			2,050,563		18	%
Treasury stock - 3,095,444 and 942,296 shares at cost at September 30, 2023 and 2022, respectively		(175,528	)		(50,031	)	N/M
Accumulated other comprehensive loss, net of taxes		(505,912	)		(435,419	)	16	%
Total stockholders' equity		3,077,700			2,885,775		7	%
Total liabilities and stockholders' equity	$	29,628,249		$	30,408,513		(3	)%



TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands except per share data)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Interest income
Interest and fees on loans	$	345,138	$	282,474	$	975,443	$	688,422
Investment securities		27,070		15,002		79,840		46,969
Interest bearing cash and cash equivalents		53,561		24,596		157,568		37,561
Total interest income		425,769		322,072		1,212,851		772,952
Interest expense
Deposits		160,117		60,317		417,602		94,513
Short-term borrowings		19,576		10,011		52,573		15,628
Long-term debt		14,005		12,663		43,270		34,651
Total interest expense		193,698		82,991		513,445		144,792
Net interest income		232,071		239,081		699,406		628,160
Provision for credit losses		18,000		12,000		53,000		32,000
Net interest income after provision for credit losses		214,071		227,081		646,406		596,160
Non-interest income
Service charges on deposit accounts		5,297		5,797		15,477		18,014
Wealth management and trust fee income		3,509		3,631		10,653		11,594
Brokered loan fees		2,532		3,401		6,842		11,504
Investment banking and trading income		29,191		7,812		75,457		23,117
Other		6,343		4,691		21,857		7,626
Total non-interest income		46,872		25,332		130,286		71,855
Non-interest expense
Salaries and benefits		110,010		128,764		351,730		331,981
Occupancy expense		9,910		9,433		29,011		27,192
Marketing		4,757		8,282		20,168		21,765
Legal and professional		17,614		16,775		47,797		38,365
Communications and technology		19,607		18,470		57,655		48,819
Federal Deposit Insurance Corporation insurance assessment		5,769		3,953		11,632		11,252
Other		12,224		11,370		37,569		35,068
Total non-interest expense		179,891		197,047		555,562		514,442
Income before income taxes		81,052		55,366		221,130		153,573
Income tax expense		19,373		13,948		52,139		38,346
Net income		61,679		41,418		168,991		115,227
Preferred stock dividends		4,313		4,313		12,938		12,938
Net income available to common stockholders	$	57,366	$	37,105	$	156,053	$	102,289

Basic earnings per common share	$	1.19	$	0.74	$	3.24	$	2.03
Diluted earnings per common share	$	1.18	$	0.74	$	3.20	$	2.00



TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
	3rd Quarter			2nd Quarter			1st Quarter			4th Quarter			3rd Quarter
		2023			2023			2023			2022			2022
Allowance for credit losses on loans:
Beginning balance	$	237,343		$	260,928		$	253,469		$	234,613		$	229,013
Loans charged-off:
Commercial		13,246			8,852			20,732			17,106			3,135
Consumer		41			—			—			—			—
Total charge-offs		13,287			8,852			20,732			17,106			3,135
Recoveries:
Commercial		4,346			611			819			2,105			400
Consumer		—			2			3			2			2
Total recoveries		4,346			613			822			2,107			402
Net charge-offs		8,941			8,239			19,910			14,999			2,733
Provision for credit losses on loans		16,500			(15,346	)		27,369			33,855			8,333
Ending balance	$	244,902		$	237,343		$	260,928		$	253,469		$	234,613

Allowance for off-balance sheet credit losses:
Beginning balance	$	44,770		$	22,424		$	21,793		$	21,648		$	17,981
Provision for off-balance sheet credit losses		1,500			22,346			631			145			3,667
Ending balance	$	46,270		$	44,770		$	22,424		$	21,793		$	21,648

Total allowance for credit losses	$	291,172		$	282,113		$	283,352		$	275,262		$	256,261
Total provision for credit losses	$	18,000		$	7,000		$	28,000		$	34,000		$	12,000

Allowance for credit losses on loans to total loans held for investment		1.19	%		1.11	%		1.30	%		1.31	%		1.19	%
Allowance for credit losses on loans to average total loans held for investment		1.17	%		1.15	%		1.38	%		1.31	%		1.06	%
Net charge-offs to average total loans held for investment⁽¹⁾		0.17	%		0.16	%		0.43	%		0.31	%		0.05	%
Net charge-offs to average total loans held for investment for last 12 months⁽¹⁾		0.26	%		0.23	%		0.19	%		0.09	%		0.03	%
Total provision for credit losses to average total loans held for investment⁽¹⁾		0.34	%		0.14	%		0.60	%		0.70	%		0.22	%
Total allowance for credit losses to total loans held for investment		1.41	%		1.32	%		1.41	%		1.43	%		1.30	%

(1) Interim period ratios are annualized.



TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS
(dollars in thousands)
	3rd Quarter			2nd Quarter			1st Quarter			4th Quarter			3rd Quarter
		2023			2023			2023			2022			2022
Non-accrual loans held for investment	$	63,129		$	81,039		$	93,951		$	48,338		$	35,864
Non-accrual loans held for sale⁽¹⁾		—			—			—			—			1,340
Other real estate owned		—			—			—			—			—
Total non-performing assets	$	63,129		$	81,039		$	93,951		$	48,338		$	37,204

Non-accrual loans held for investment to total loans held for investment		0.31	%		0.38	%		0.47	%		0.25	%		0.18	%
Total non-performing assets to total assets		0.21	%		0.28	%		0.33	%		0.17	%		0.12	%
Allowance for credit losses on loans to non-accrual loans held for investment		3.9	x		2.9	x		2.8	x		5.2	x		6.5	x
Total allowance for credit losses to non-accrual loans held for investment		4.6	x		3.5	x		3.0	x		5.7	x		6.9	x

Loans held for investment past due 90 days and still accruing	$	4,602		$	64		$	3,098		$	131		$	30,664
Loans held for investment past due 90 days to total loans held for investment		0.02	%		—	%		0.02	%		—	%		0.15	%
Loans held for sale past due 90 days and still accruing⁽¹⁾⁽²⁾	$	—		$	—		$	—		$	—		$	4,877

(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.



TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)

	3rd Quarter		2nd Quarter		1st Quarter		4th Quarter		3rd Quarter
	2023		2023		2023		2022		2022
Interest income
Interest and fees on loans	$	345,138	$	332,867	$	297,438	$	295,372	$	282,474
Investment securities		27,070		27,478		25,292		16,210		15,002
Interest bearing deposits in other banks		53,561		41,571		62,436		59,710		24,596
Total interest income		425,769		401,916		385,166		371,292		322,072
Interest expense
Deposits		160,117		137,391		120,094		96,150		60,317
Short-term borrowings		19,576		18,253		14,744		13,449		10,011
Long-term debt		14,005		14,282		14,983		14,088		12,663
Total interest expense		193,698		169,926		149,821		123,687		82,991
Net interest income		232,071		231,990		235,345		247,605		239,081
Provision for credit losses		18,000		7,000		28,000		34,000		12,000
Net interest income after provision for credit losses		214,071		224,990		207,345		213,605		227,081
Non-interest income
Service charges on deposit accounts		5,297		5,158		5,022		5,252		5,797
Wealth management and trust fee income		3,509		3,715		3,429		3,442		3,631
Brokered loan fees		2,532		2,415		1,895		2,655		3,401
Investment banking and trading income		29,191		27,498		18,768		11,937		7,812
Gain on disposal of subsidiary		—		—		—		248,526		—
Other		6,343		7,225		8,289		5,855		4,691
Total non-interest income		46,872		46,011		37,403		277,667		25,332
Non-interest expense
Salaries and benefits		110,010		113,050		128,670		102,925		128,764
Occupancy expense		9,910		9,482		9,619		17,030		9,433
Marketing		4,757		6,367		9,044		10,623		8,282
Legal and professional		17,614		15,669		14,514		37,493		16,775
Communications and technology		19,607		20,525		17,523		20,434		18,470
Federal Deposit Insurance Corporation insurance assessment		5,769		3,693		2,170		3,092		3,953
Other		12,224		12,858		12,487		21,493		11,370
Total non-interest expense		179,891		181,644		194,027		213,090		197,047
Income before income taxes		81,052		89,357		50,721		278,182		55,366
Income tax expense		19,373		20,706		12,060		60,931		13,948
Net income		61,679		68,651		38,661		217,251		41,418
Preferred stock dividends		4,313		4,312		4,313		4,312		4,313
Net income available to common shareholders	$	57,366	$	64,339	$	34,348	$	212,939	$	37,105



TEXAS CAPITAL BANCSHARES, INC.
TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)⁽¹⁾
(dollars in thousands)
	3rd Quarter 2023						2nd Quarter 2023						1st Quarter 2023						4th Quarter 2022						3rd 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⁾	$	4,204,749	$	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	%	$	3,509,044	$	15,002	1.58	%
Interest bearing cash and cash equivalents		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	%		4,453,806		24,596	2.19	%
Loans held for sale		31,878		647	8.06	%		28,414		599	8.46	%		43,472		938	8.75	%		1,053,157		12,064	4.54	%		1,029,983		11,316	4.36	%
Loans held for investment, mortgage finance		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	%		5,287,531		52,756	3.96	%
Loans held for investment⁽³⁾		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	%		16,843,922		218,513	5.15	%
Less: Allowance for credit losses on loans		238,883		—	—			261,027		—	—			252,727		—	—			233,246		—	—			229,005		—	—
Loans held for investment, net		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	%		21,902,448		271,269	4.91	%
Total earning assets		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	%		30,895,281		322,183	4.10	%
Cash and other assets		1,106,031						1,049,145						1,041,745						989,900						918,630
Total assets	$	30,083,846					$	29,003,053					$	29,319,945					$	30,738,402					$	31,813,911

Liabilities and Stockholders' Equity
Transaction deposits	$	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	%	$	1,444,964	$	5,239	1.44	%
Savings deposits		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	%		10,249,387		46,555	1.80	%
Time deposits		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	%		1,701,238		8,523	1.99	%
Total interest bearing deposits		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	%		13,395,589		60,317	1.79	%
Short-term borrowings		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	%		1,931,537		10,011	2.06	%
Long-term debt		858,167		14,005	6.47	%		883,871		14,282	6.48	%		931,796		14,983	6.52	%		931,107		14,088	6.00	%		921,707		12,663	5.45	%
Total interest bearing liabilities		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	%		16,248,833		82,991	2.03	%
Non-interest bearing deposits		10,016,579						9,749,105						10,253,731						11,642,969						12,214,531
Other liabilities		474,869						389,155						436,621						426,543						305,554
Stockholders' equity		3,116,761						3,115,447						3,052,357						3,055,751						3,044,993
Total liabilities and stockholders' equity	$	30,083,846					$	29,003,053					$	29,319,945					$	30,738,402					$	31,813,911
Net interest income			$	232,143					$	232,103					$	235,504					$	247,751					$	239,192
Net interest margin					3.13	%					3.29	%					3.33	%					3.26	%					3.05	%

(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.

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 Third Quarter 2023 Results