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 (GLOBE NEWSWIRE) -- 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 Quarter   1st Quarter   2nd Quarter   2024   2024   2023 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 shares   46,872       47,711       48,421   Return on average assets   0.56 %     0.36 %     0.95 % Return on average common equity   5.26 %     3.03 %     9.17 %             BALANCE SHEET           Loans held for investment $ 16,700,569     $ 16,677,691     $ 16,227,203   Loans held for investment, mortgage finance   5,078,161       4,153,313       5,098,812   Total loans held for investment   21,778,730       20,831,004       21,326,015   Loans held for sale   36,785       37,750       29,097   Total assets   29,854,994       29,180,585       28,976,544   Non-interest bearing deposits   7,987,715       8,478,215       9,429,352   Total deposits   23,818,327       23,954,037       23,318,240   Stockholders' equity   3,175,601       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. 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. TEXAS CAPITAL BANCSHARES, INC. SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) (dollars in thousands except per share data)   2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter   2024 2024 2023 2023 2023 CONSOLIDATED STATEMENTS OF INCOME           Interest income $ 422,068   $ 417,378   $ 417,072   $ 425,769   $ 401,916   Interest expense   205,486     202,369     202,355     193,698     169,926   Net interest income   216,582     215,009     214,717     232,071     231,990   Provision for credit losses   20,000     19,000     19,000     18,000     7,000   Net interest income after provision for credit losses   196,582     196,009     195,717     214,071     224,990   Non-interest income   50,424     41,319     31,133     46,872     46,011   Non-interest expense   188,409     202,393     201,385     179,891     181,644   Income before income taxes   58,597     34,935     25,465     81,052     89,357   Income tax expense   16,935     8,793     5,315     19,373     20,706   Net income   41,662     26,142     20,150     61,679     68,651   Preferred stock dividends   4,312     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 shares   46,872,498     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 investment   16,700,569     16,677,691     16,362,230     16,183,882     16,227,203   Loans held for investment, mortgage finance   5,078,161     4,153,313     3,978,328     4,429,489     5,098,812   Loans held for sale   36,785     37,750     44,105     155,073     29,097   Interest bearing cash and cash equivalents   2,691,352     3,148,157     3,042,357     3,975,860     2,587,131   Investment securities   4,388,976     4,414,280     4,143,194     4,069,717     4,226,653   Non-interest bearing deposits   7,987,715     8,478,215     7,328,276     9,352,883     9,429,352   Total deposits   23,818,327     23,954,037     22,371,839     23,878,978     23,318,240   Short-term borrowings   1,675,000     750,000     1,500,000     1,400,000     1,350,000   Long-term debt   659,997     859,823     859,147     858,471     857,795   Stockholders' equity   3,175,601     3,170,662     3,199,142     3,077,700     3,081,927               End of period shares outstanding   46,188,078     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 margin   3.01 %   3.03 %   2.93 %   3.13 %   3.29 % Return on average assets   0.56 %   0.36 %   0.27 %   0.81 %   0.95 % Return on average common equity   5.26 %   3.03 %   2.25 %   8.08 %   9.17 % Non-interest income to average earning assets   0.71 %   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 assets   2.65 %   2.89 %   2.79 %   2.46 %   2.61 % Common equity to total assets   9.6 %   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 1   11.6 %   12.4 %   12.6 %   12.7 %   12.2 % Tier 1 capital   13.1 %   13.9 %   14.2 %   14.3 %   13.7 % Total capital   15.7 %   16.6 %   17.1 %   17.1 %   16.4 % Leverage   12.2 %   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.            TEXAS CAPITAL BANCSHARES, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) (dollars in thousands)   June 30, 2024 June 30, 2023 % Change Assets       Cash and due from banks $ 221,727   $ 260,314   (15 )% Interest bearing cash and cash equivalents   2,691,352     2,587,131