EX-99.1 2 a10192023exhibit991.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 THIRD QUARTER 2023 RESULTS
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 - October 19, 2023 - 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 Quarter2nd Quarter3rd Quarter
202320232022
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 shares48,529 48,421 50,418 
Return on average assets0.81 %0.95 %0.52 %
Return on average common equity8.08 %9.17 %5.36 %
BALANCE SHEET
Loans held for investment$16,183,882 $16,227,203 $14,878,959 
Loans held for investment, mortgage finance4,429,489 5,098,812 4,908,822 
Total loans held for investment20,613,371 21,326,015 19,787,781 
Loans held for sale155,073 29,097 3,142,178 
Total assets29,628,249 28,976,544 30,408,513 
Non-interest bearing deposits9,352,883 9,429,352 11,494,685 
Total deposits23,878,978 23,318,240 24,498,563 
Stockholders’ equity3,077,700 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
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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.


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TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(dollars in thousands except per share data)
3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
20232023202320222022
CONSOLIDATED STATEMENTS OF INCOME
Interest income$425,769 $401,916 $385,166 $371,292 $322,072 
Interest expense193,698 169,926 149,821 123,687 82,991 
Net interest income232,071 231,990 235,345 247,605 239,081 
Provision for credit losses18,000 7,000 28,000 34,000 12,000 
Net interest income after provision for credit losses214,071 224,990 207,345 213,605 227,081 
Non-interest income46,872 46,011 37,403 277,667 25,332 
Non-interest expense179,891 181,644 194,027 213,090 197,047 
Income before income taxes81,052 89,357 50,721 278,182 55,366 
Income tax expense19,373 20,706 12,060 60,931 13,948 
Net income61,679 68,651 38,661 217,251 41,418 
Preferred stock dividends4,313 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 shares48,528,698 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 investment16,183,882 16,227,203 16,014,497 15,197,307 14,878,959 
Loans held for investment, mortgage finance4,429,489 5,098,812 4,060,570 4,090,033 4,908,822 
Loans held for sale155,073 29,097 27,608 36,357 3,142,178 
Interest bearing cash and cash equivalents3,975,860 2,587,131 3,385,494 4,778,623 3,399,638 
Investment securities4,069,717 4,226,653 4,345,969 3,585,114 3,369,622 
Non-interest bearing deposits9,352,883 9,429,352 9,500,583 9,618,081 11,494,685 
Total deposits23,878,978 23,318,240 22,179,697 22,856,880 24,498,563 
Short-term borrowings1,400,000 1,350,000 2,100,000 1,201,142 1,701,480 
Long-term debt858,471 857,795 932,119 931,442 930,766 
Stockholders’ equity3,077,700 3,081,927 3,079,974 3,055,351 2,885,775 
End of period shares outstanding48,015,003 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 margin3.13 %3.29 %3.33 %3.26 %3.05 %
Return on average assets0.81 %0.95 %0.53 %2.80 %0.52 %
Return on average common equity8.08 %9.17 %5.06 %30.66 %5.36 %
Non-interest income to average earning assets0.64 %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 assets2.46 %2.61 %2.78 %2.84 %2.53 %
Common equity to total assets9.4 %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 112.7 %12.2 %12.4 %13.0 %11.1 %
Tier 1 capital14.3 %13.7 %14.0 %14.7 %12.6 %
Total capital17.1 %16.4 %16.9 %17.7 %15.2 %
Leverage12.1 %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.
    
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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
September 30, 2023September 30, 2022% Change
Assets
Cash and due from banks$216,916 $240,609 (10)%
Interest bearing cash and cash equivalents3,975,860 3,399,638 17 %
Available-for-sale debt securities3,147,865 2,380,774 32 %
Held-to-maturity debt securities881,352 955,875 (8)%
Equity securities40,500 32,973 23 %
Investment securities4,069,717 3,369,622 21 %
Loans held for sale155,073 3,142,178 (95)%
Loans held for investment, mortgage finance4,429,489 4,908,822 (10)%
Loans held for investment16,183,882 14,878,959 9 %
Less: Allowance for credit losses on loans244,902 234,613 4 %
Loans held for investment, net20,368,469 19,553,168 4 %
Premises and equipment, net31,050 27,180 14 %
Accrued interest receivable and other assets809,668 648,172 25 %
Other assets held for sale— 26,450 (100)%
Goodwill and intangibles, net1,496 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 deposits14,526,095 13,003,878 12 %
Total deposits23,878,978 24,498,563 (3)%
Accrued interest payable31,149 18,465 69 %
Other liabilities381,951 297,900 28 %
Other liabilities held for sale— 75,564 (100)%
Short-term borrowings1,400,000 1,701,480 (18)%
Long-term debt858,471 930,766 (8)%
Total liabilities26,550,549 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 capital1,039,074 1,020,153 2 %
Retained earnings2,419,555 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’ equity3,077,700 2,885,775 7 %
Total liabilities and stockholders’ equity$29,628,249 $30,408,513 (3)%
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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,
2023202220232022
Interest income
Interest and fees on loans$345,138 $282,474 $975,443 $688,422 
Investment securities27,070 15,002 79,840 46,969 
Interest bearing cash and cash equivalents53,561 24,596 157,568 37,561 
Total interest income425,769 322,072 1,212,851 772,952 
Interest expense
Deposits160,117 60,317 417,602 94,513 
Short-term borrowings19,576 10,011 52,573 15,628 
Long-term debt14,005 12,663 43,270 34,651 
Total interest expense193,698 82,991 513,445 144,792 
Net interest income232,071 239,081 699,406 628,160 
Provision for credit losses18,000 12,000 53,000 32,000 
Net interest income after provision for credit losses214,071 227,081 646,406 596,160 
Non-interest income
Service charges on deposit accounts5,297 5,797 15,477 18,014 
Wealth management and trust fee income3,509 3,631 10,653 11,594 
Brokered loan fees2,532 3,401 6,842 11,504 
Investment banking and trading income29,191 7,812 75,457 23,117 
Other6,343 4,691 21,857 7,626 
Total non-interest income46,872 25,332 130,286 71,855 
Non-interest expense
Salaries and benefits110,010 128,764 351,730 331,981 
Occupancy expense9,910 9,433 29,011 27,192 
Marketing4,757 8,282 20,168 21,765 
Legal and professional17,614 16,775 47,797 38,365 
Communications and technology19,607 18,470 57,655 48,819 
Federal Deposit Insurance Corporation insurance assessment5,769 3,953 11,632 11,252 
Other12,224 11,370 37,569 35,068 
Total non-interest expense179,891 197,047 555,562 514,442 
Income before income taxes81,052 55,366 221,130 153,573 
Income tax expense19,373 13,948 52,139 38,346 
Net income61,679 41,418 168,991 115,227 
Preferred stock dividends4,313 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 
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TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
20232023202320222022
Allowance for credit losses on loans:
Beginning balance$237,343 $260,928 $253,469 $234,613 $229,013 
Loans charged-off:
Commercial13,246 8,852 20,732 17,106 3,135 
Consumer41 — — — — 
Total charge-offs13,287 8,852 20,732 17,106 3,135 
Recoveries:
Commercial4,346 611 819 2,105 400 
Consumer— 2 3 2 2 
Total recoveries4,346 613 822 2,107 402 
Net charge-offs8,941 8,239 19,910 14,999 2,733 
Provision for credit losses on loans16,500 (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 losses1,500 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 investment1.19 %1.11 %1.30 %1.31 %1.19 %
Allowance for credit losses on loans to average total loans held for investment1.17 %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.
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TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS
(dollars in thousands)
3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
20232023202320222022
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 investment0.31 %0.38 %0.47 %0.25 %0.18 %
Total non-performing assets to total assets0.21 %0.28 %0.33 %0.17 %0.12 %
Allowance for credit losses on loans to non-accrual loans held for investment3.9x2.9x2.8x5.2x6.5x
Total allowance for credit losses to non-accrual loans held for investment4.6x3.5x3.0x5.7x6.9x
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 investment0.02 %— %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.
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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)
3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
20232023202320222022
Interest income
Interest and fees on loans$345,138 $332,867 $297,438 $295,372 $282,474 
Investment securities27,070 27,478 25,292 16,210 15,002 
Interest bearing deposits in other banks53,561 41,571 62,436 59,710 24,596 
Total interest income425,769 401,916 385,166 371,292 322,072 
Interest expense
Deposits160,117 137,391 120,094 96,150 60,317 
Short-term borrowings19,576 18,253 14,744 13,449 10,011 
Long-term debt14,005 14,282 14,983 14,088 12,663 
Total interest expense193,698 169,926 149,821 123,687 82,991 
Net interest income232,071 231,990 235,345 247,605 239,081 
Provision for credit losses18,000 7,000 28,000 34,000 12,000 
Net interest income after provision for credit losses214,071 224,990 207,345 213,605 227,081 
Non-interest income
Service charges on deposit accounts5,297 5,158 5,022 5,252 5,797 
Wealth management and trust fee income3,509 3,715 3,429 3,442 3,631 
Brokered loan fees2,532 2,415 1,895 2,655 3,401 
Investment banking and trading income29,191 27,498 18,768 11,937 7,812 
Gain on disposal of subsidiary— — — 248,526 — 
Other6,343 7,225 8,289 5,855 4,691 
Total non-interest income46,872 46,011 37,403 277,667 25,332 
Non-interest expense
Salaries and benefits110,010 113,050 128,670 102,925 128,764 
Occupancy expense9,910 9,482 9,619 17,030 9,433 
Marketing4,757 6,367 9,044 10,623 8,282 
Legal and professional17,614 15,669 14,514 37,493 16,775 
Communications and technology19,607 20,525 17,523 20,434 18,470 
Federal Deposit Insurance Corporation insurance assessment5,769 3,693 2,170 3,092 3,953 
Other 12,224 12,858 12,487 21,493 11,370 
Total non-interest expense179,891 181,644 194,027 213,090 197,047 
Income before income taxes81,052 89,357 50,721 278,182 55,366 
Income tax expense19,373 20,706 12,060 60,931 13,948 
Net income61,679 68,651 38,661 217,251 41,418 
Preferred stock dividends4,313 4,312 4,313 4,312 4,313 
Net income available to common shareholders$57,366 $64,339 $34,348 $212,939 $37,105 

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TEXAS CAPITAL BANCSHARES, INC.
TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1)
(dollars in thousands)
3rd Quarter 20232nd Quarter 20231st Quarter 20234th Quarter 20223rd 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 equivalents3,965,045 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 sale31,878 647 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 finance4,697,702 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, net20,776,143 344,563 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 assets28,977,815 425,841 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 assets1,106,031 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 deposits10,858,306 127,323 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 deposits1,610,235 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 deposits14,223,992 160,117 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 borrowings1,393,478 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 debt858,167 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 liabilities16,475,637 193,698 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 deposits10,016,579 9,749,105 10,253,731 11,642,969 12,214,531 
Other liabilities474,869 389,155 436,621 426,543 305,554 
Stockholders’ equity3,116,761 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 margin3.13 %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.
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