TCBI Texas Capital Bancshares Inc

Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the third quarter of 2024.

Net loss available to common stockholders was $65.6 million, or $1.41 net loss per diluted share, for the third quarter of 2024, compared to net income available to common stockholders of $37.4 million, or $0.80 net income per diluted share, and $57.4 million, or $1.18 per diluted share, for the for the second quarter of 2024 and third quarter of 2023, respectively.

The third quarter of 2024 included a $179.6 million loss on sale of available-for-sale debt securities ($2.92 net loss per diluted share) and restructuring expense of $5.9 million ($0.10 net loss per diluted share), partially offset by a $651,000 release of Federal Deposit Insurance Corporation (“FDIC”) special assessment accrual ($0.01 net income per diluted share).

“We achieved significant financial milestones this quarter as our multi-year transformation is increasingly delivering financial outcomes consistent with realized success delivering our proven and differentiated strategy,” said Rob C. Holmes, President and CEO. “Our current business momentum coupled with our sustained leading capital and liquidity levels positions us well to effectively drive execution through 2025.”

FINANCIAL RESULTS
(dollars and shares in thousands)
	3rd Quarter				2nd Quarter				3rd Quarter
		2024				2024				2023
OPERATING RESULTS
Net income/(loss)	$	(61,319	)		$	41,662			$	61,679
Net income/(loss) available to common stockholders	$	(65,632	)		$	37,350			$	57,366
Diluted earnings/(loss) per common share	$	(1.41	)		$	0.80			$	1.18
Diluted common shares		46,609				46,872				48,529
Return on average assets	(0.78)%					0.56	%			0.81	%
Return on average common equity	(8.87)%					5.26	%			8.08	%
BALANCE SHEET
Loans held for investment	$	16,764,512			$	16,700,569			$	16,183,882
Loans held for investment, mortgage finance		5,529,659				5,078,161				4,429,489
Total loans held for investment		22,294,171				21,778,730				20,613,371
Loans held for sale		9,022				36,785				155,073
Total assets		31,629,299				29,854,994				29,628,249
Non-interest bearing deposits		9,070,804				7,987,715				9,352,883
Total deposits		25,865,255				23,818,327				23,878,978
Stockholders’ equity		3,354,044				3,175,601				3,077,700

(1)	Fee areas of focus include service charges on deposit accounts, wealth managment and trust fee income, investment banking and advisory fees and trading income.
(2)	Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.

THIRD QUARTER 2024 COMPARED TO SECOND QUARTER 2024

For the third quarter of 2024, net loss available to common stockholders was $65.6 million, or $1.41 net loss per diluted share, compared to net income available to common stockholders of $37.4 million, or $0.80 net income per diluted share, for the second quarter of 2024. The net loss for the third quarter of 2024 resulted primarily from the $179.6 million loss on the sale of available-for-sale debt securities ($2.92 net loss per diluted share).

Provision for credit losses for the third quarter of 2024 was $10.0 million, compared to $20.0 million for the second quarter of 2024. The $10.0 million provision for credit losses recorded in the third quarter of 2024 resulted primarily from growth in total loans held for investment (“LHI”) and $6.1 million in net charge-offs.

Net interest income was $240.1 million for the third quarter of 2024, compared to $216.6 million for the second quarter of 2024, as increases in average earning assets and yields on average earning assets were partially offset by an increase in average interest bearing deposits. Net interest margin for the third quarter of 2024 was 3.16%, an increase of 15 basis points from the second quarter of 2024. LHI, excluding mortgage finance, yields increased 1 basis point from the second quarter of 2024 and LHI, mortgage finance, yields increased 26 basis points from the second quarter of 2024. Total cost of deposits was 2.94% for the third quarter of 2024, a 5 basis point decrease from the second quarter of 2024.

Non-interest income for the third quarter of 2024 decreased $165.2 million compared to the second quarter of 2024, primarily due to the $179.6 million loss on sale of available-for-sale debt securities recognized during the third quarter of 2024, partially offset by increases in investment banking and advisory fees and other non-interest income.

Non-interest expense for the third quarter of 2024 increased $6.9 million, or 4%, compared to the second quarter of 2024, primarily due to increases in salaries and benefits, occupancy expense and communications and technology expense, partially offset by decreases in FDIC assessment expense and other non-interest expense. The third quarter of 2024 included restructuring expenses of $2.4 million recorded in salaries and benefits, $476,000 recorded in occupancy expense and $3.1 million recorded in communications and technology expense. The third quarter of 2024 also included a $651,000 release of FDIC special assessment accrual.

THIRD QUARTER 2024 COMPARED TO THIRD QUARTER 2023

Net loss available to common stockholders was $65.6 million, or $1.41 net loss per diluted share, for the third quarter of 2024, compared to net income available to common stockholders of $57.4 million, or $1.18 net income per diluted share, for the third quarter of 2023.

The third quarter of 2024 included a $10.0 million provision for credit losses, reflecting growth in total LHI and $6.1 million in net charge-offs, compared to an $18.0 million provision for the third quarter of 2023.

Net interest income increased to $240.1 million for the third quarter of 2024, compared to $232.1 million for the third quarter of 2023, primarily due to increases in average total LHI and yields on average earning assets, partially offset by an increase in average interest bearing liabilities. Net interest margin increased 3 basis points to 3.16% for the third quarter of 2024 compared to the third quarter of 2023. LHI, excluding mortgage finance, yields increased 12 basis points compared to the third quarter of 2023 and LHI, mortgage finance yields decreased 9 basis points from the third quarter of 2023. Total cost of deposits increased 32 basis points compared to the third quarter of 2023.

Non-interest income for the third quarter of 2024 decreased $161.6 million compared to the third quarter of 2023. The decrease was primarily due to the $179.6 million loss on sale of available-for-sale debt securities recognized during the third quarter of 2024, partially offset by increases in investment banking and advisory fees and other non-interest income.

Non-interest expense for the third quarter of 2024 increased $15.4 million, or 9%, compared to the third quarter of 2023, primarily due to increases in salaries and benefits, occupancy expense and communications and technology expense, partially offset by decreases in legal and professional expense.

CREDIT QUALITY

Net charge-offs of $6.1 million were recorded during the third quarter of 2024, compared to net charge-offs of $12.0 million and $8.9 million during the second quarter of 2024 and the third quarter of 2023, respectively. Criticized loans totaled $897.7 million at September 30, 2024, compared to $859.7 million at June 30, 2024 and $677.4 million at September 30, 2023. Non-accrual LHI totaled $89.0 million at September 30, 2024, compared to $85.0 million at June 30, 2024 and $63.1 million at September 30, 2023. The ratio of non-accrual LHI to total LHI for the third quarter of 2024 was 0.40%, compared to 0.39% for the second quarter of 2024 and 0.31% for the third quarter of 2023. The ratio of total allowance for credit losses to total LHI was 1.43% at September 30, 2024, compared to 1.44% and 1.41% at June 30, 2024 and September 30, 2023, respectively.

REGULATORY RATIOS AND CAPITAL

All regulatory ratios continue to be in excess of “well capitalized” requirements as of September 30, 2024. CET1, tier 1 capital, total capital and leverage ratios were 11.2%, 12.6%, 15.2% and 11.4%, respectively, at September 30, 2024, compared to 11.6%, 13.1%, 15.7% and 12.2%, respectively, at June 30, 2024 and 12.7%, 14.3%, 17.1% and 12.1%, respectively, at September 30, 2023. At September 30, 2024, our ratio of tangible common equity to total tangible assets was 9.7%, compared to 9.6% at June 30, 2024 and 9.4% at September 30, 2023.

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 its strategic plan and 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)
	3rd Quarter			2nd Quarter			1st Quarter			4th Quarter			3rd Quarter
		2024			2024			2024			2023			2023
CONSOLIDATED STATEMENTS OF INCOME
Interest income	$	452,533		$	422,068		$	417,378		$	417,072		$	425,769
Interest expense		212,431			205,486			202,369			202,355			193,698
Net interest income		240,102			216,582			215,009			214,717			232,071
Provision for credit losses		10,000			20,000			19,000			19,000			18,000
Net interest income after provision for credit losses		230,102			196,582			196,009			195,717			214,071
Non-interest income		(114,771	)		50,424			41,319			31,133			46,872
Non-interest expense		195,324			188,409			202,393			201,385			179,891
Income/(loss) before income taxes		(79,993	)		58,597			34,935			25,465			81,052
Income tax expense/(benefit)		(18,674	)		16,935			8,793			5,315			19,373
Net income/(loss)		(61,319	)		41,662			26,142			20,150			61,679
Preferred stock dividends		4,313			4,312			4,313			4,312			4,313
Net income/(loss) available to common stockholders	$	(65,632	)	$	37,350		$	21,829		$	15,838		$	57,366
Diluted earnings/(loss) per common share	$	(1.41	)	$	0.80		$	0.46		$	0.33		$	1.18
Diluted common shares		46,608,742			46,872,498			47,711,192			48,097,517			48,528,698
CONSOLIDATED BALANCE SHEET DATA
Total assets	$	31,629,299		$	29,854,994		$	29,180,585		$	28,356,266		$	29,628,249
Loans held for investment		16,764,512			16,700,569			16,677,691			16,362,230			16,183,882
Loans held for investment, mortgage finance		5,529,659			5,078,161			4,153,313			3,978,328			4,429,489
Loans held for sale		9,022			36,785			37,750			44,105			155,073
Interest bearing cash and cash equivalents		3,894,537			2,691,352			3,148,157			3,042,357			3,975,860
Investment securities		4,405,520			4,388,976			4,414,280			4,143,194			4,069,717
Non-interest bearing deposits		9,070,804			7,987,715			8,478,215			7,328,276			9,352,883
Total deposits		25,865,255			23,818,327			23,954,037			22,371,839			23,878,978
Short-term borrowings		1,035,000			1,675,000			750,000			1,500,000			1,400,000
Long-term debt		660,172			659,997			859,823			859,147			858,471
Stockholders’ equity		3,354,044			3,175,601			3,170,662			3,199,142			3,077,700
End of period shares outstanding		46,207,757			46,188,078			46,986,275			47,237,912			48,015,003
Book value per share	$	66.09		$	62.26		$	61.10		$	61.37		$	57.85
Tangible book value per share(1)	$	66.06		$	62.23		$	61.06		$	61.34		$	57.82
SELECTED FINANCIAL RATIOS
Net interest margin		3.16	%		3.01	%		3.03	%		2.93	%		3.13	%
Return on average assets	(0.78)%				0.56	%		0.36	%		0.27	%		0.81	%
Return on average common equity	(8.87)%				5.26	%		3.03	%		2.25	%		8.08	%
Non-interest income to average earning assets	(1.52)%				0.71	%		0.59	%		0.43	%		0.64	%
Efficiency ratio(2)		155.8	%		70.6	%		79.0	%		81.9	%		64.5	%
Non-interest expense to average earning assets		2.59	%		2.65	%		2.89	%		2.79	%		2.46	%
Common equity to total assets		9.7	%		9.6	%		9.8	%		10.2	%		9.4	%
Tangible common equity to total tangible assets(3)		9.7	%		9.6	%		9.8	%		10.2	%		9.4	%
Common Equity Tier 1		11.2	%		11.6	%		12.4	%		12.6	%		12.7	%
Tier 1 capital		12.6	%		13.1	%		13.9	%		14.2	%		14.3	%
Total capital		15.2	%		15.7	%		16.6	%		17.1	%		17.1	%
Leverage		11.4	%		12.2	%		12.4	%		12.2	%		12.1	%

(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, 2024			September 30, 2023			% Change
Assets
Cash and due from banks	$	297,048		$	216,916		37	%
Interest bearing cash and cash equivalents		3,894,537			3,975,860		(2)%
Available-for-sale debt securities		3,518,662			3,147,865		12	%
Held-to-maturity debt securities		812,432			881,352		(8)%
Equity securities		74,426			40,500		84	%
Investment securities		4,405,520			4,069,717		8	%
Loans held for sale		9,022			155,073		(94)%
Loans held for investment, mortgage finance		5,529,659			4,429,489		25	%
Loans held for investment		16,764,512			16,183,882		4	%
Less: Allowance for credit losses on loans		273,143			244,902		12	%
Loans held for investment, net		22,021,028			20,368,469		8	%
Premises and equipment, net		81,577			31,050		163	%
Accrued interest receivable and other assets		919,071			809,668		14	%
Goodwill and intangibles, net		1,496			1,496		—	%
Total assets	$	31,629,299		$	29,628,249		7	%
Liabilities and Stockholders’ Equity
Liabilities:
Non-interest bearing deposits	$	9,070,804		$	9,352,883		(3)%
Interest bearing deposits		16,794,451			14,526,095		16	%
Total deposits		25,865,255			23,878,978		8	%
Accrued interest payable		18,679			31,149		(40)%
Other liabilities		696,149			381,951		82	%
Short-term borrowings		1,035,000			1,400,000		(26)%
Long-term debt		660,172			858,471		(23)%
Total liabilities		28,275,255			26,550,549		6	%
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, 2024 and 2023		300,000			300,000		—	%
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 51,494,260 and 51,110,447 at September 30, 2024 and 2023, respectively		515			511		1	%
Additional paid-in capital		1,054,614			1,039,074		1	%
Retained earnings		2,428,940			2,419,555		—	%
Treasury stock - 5,286,503 and 3,095,444 shares at cost at September 30, 2024 and 2023, respectively		(301,868	)		(175,528	)	72	%
Accumulated other comprehensive loss, net of taxes		(128,157	)		(505,912	)	(75)%
Total stockholders’ equity		3,354,044			3,077,700		9	%
Total liabilities and stockholders’ equity	$	31,629,299		$	29,628,249		7	%

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,
		2024			2023		2024			2023
Interest income
Interest and fees on loans	$	361,407		$	345,138	$	1,037,537		$	975,443
Investment securities		38,389			27,070		104,117			79,840
Interest bearing cash and cash equivalents		52,737			53,561		150,325			157,568
Total interest income		452,533			425,769		1,291,979			1,212,851
Interest expense
Deposits		190,255			160,117		547,135			417,602
Short-term borrowings		13,784			19,576		39,316			52,573
Long-term debt		8,392			14,005		33,835			43,270
Total interest expense		212,431			193,698		620,286			513,445
Net interest income		240,102			232,071		671,693			699,406
Provision for credit losses		10,000			18,000		49,000			53,000
Net interest income after provision for credit losses		230,102			214,071		622,693			646,406
Non-interest income
Service charges on deposit accounts		6,307			5,297		18,557			15,477
Wealth management and trust fee income		4,040			3,509		11,306			10,653
Brokered loan fees		2,400			2,532		6,442			6,842
Investment banking and advisory fees		34,753			23,099		78,225			56,764
Trading income		5,786			6,092		16,148			18,693
Available-for-sale debt securities gains/(losses), net		(179,581	)		—		(179,581	)		489
Other		11,524			6,343		25,875			21,368
Total non-interest income		(114,771	)		46,872		(23,028	)		130,286
Non-interest expense
Salaries and benefits		121,138			110,010		368,705			351,730
Occupancy expense		12,937			9,910		33,340			29,011
Marketing		5,863			4,757		17,895			20,168
Legal and professional		11,135			17,614		38,603			47,797
Communications and technology		25,951			19,607		69,078			57,655
Federal Deposit Insurance Corporation insurance assessment		4,906			5,769		18,897			11,632
Other		13,394			12,224		39,608			37,569
Total non-interest expense		195,324			179,891		586,126			555,562
Income/(loss) before income taxes		(79,993	)		81,052		13,539			221,130
Income tax expense/(benefit)		(18,674	)		19,373		7,054			52,139
Net income/(loss)		(61,319	)		61,679		6,485			168,991
Preferred stock dividends		4,313			4,313		12,938			12,938
Net income/(loss) available to common stockholders	$	(65,632	)	$	57,366	$	(6,453	)	$	156,053
Basic earnings/(loss) per common share	$	(1.42	)	$	1.19	$	(0.14	)	$	3.24
Diluted earnings/(loss) per common share	$	(1.41	)	$	1.18	$	(0.14	)	$	3.20

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
	3rd Quarter			2nd Quarter			1st Quarter			4th Quarter			3rd Quarter
		2024			2024			2024			2023			2023
Allowance for credit losses on loans:
Beginning balance	$	267,297		$	263,962		$	249,973		$	244,902		$	237,343
Allowance established for acquired purchase credit deterioration loans		2,579			—			—			—			—
Loans charged-off:
Commercial		6,120			9,997			7,544			8,356			13,246
Commercial real estate		262			2,111			3,325			5,500			—
Consumer		30			—			—			—			41
Total charge-offs		6,412			12,108			10,869			13,856			13,287
Recoveries:
Commercial		329			153			105			15			4,346
Commercial real estate		—			—			—			4			—
Consumer		—			—			—			—			—
Total recoveries		329			153			105			19			4,346
Net charge-offs		6,083			11,955			10,764			13,837			8,941
Provision for credit losses on loans		9,350			15,290			24,753			18,908			16,500
Ending balance	$	273,143		$	267,297		$	263,962		$	249,973		$	244,902
Allowance for off-balance sheet credit losses:
Beginning balance	$	45,319		$	40,609		$	46,362		$	46,270		$	44,770
Provision for off-balance sheet credit losses		650			4,710			(5,753	)		92			1,500
Ending balance	$	45,969		$	45,319		$	40,609		$	46,362		$	46,270
Total allowance for credit losses	$	319,112		$	312,616		$	304,571		$	296,335		$	291,172
Total provision for credit losses	$	10,000		$	20,000		$	19,000		$	19,000		$	18,000
Allowance for credit losses on loans to total loans held for investment		1.23	%		1.23	%		1.27	%		1.23	%		1.19	%
Allowance for credit losses on loans to average total loans held for investment		1.24	%		1.27	%		1.32	%		1.24	%		1.17	%
Net charge-offs to average total loans held for investment(1)		0.11	%		0.23	%		0.22	%		0.27	%		0.17	%
Net charge-offs to average total loans held for investment for last 12 months(1)		0.20	%		0.22	%		0.20	%		0.25	%		0.26	%
Total provision for credit losses to average total loans held for investment(1)		0.18	%		0.38	%		0.38	%		0.37	%		0.34	%
Total allowance for credit losses to total loans held for investment		1.43	%		1.44	%		1.46	%		1.46	%		1.41	%

(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
		2024			2024			2024			2023			2023
Non-accrual loans held for investment	$	88,960		$	85,021		$	92,849		$	81,398		$	63,129
Non-accrual loans held for sale(1)		—			—			9,250			—			—
Other real estate owned		—			—			—			—			—
Total non-performing assets	$	88,960		$	85,021		$	102,099		$	81,398		$	63,129
Non-accrual loans held for investment to total loans held for investment		0.40	%		0.39	%		0.45	%		0.40	%		0.31	%
Total non-performing assets to total assets		0.28	%		0.28	%		0.35	%		0.29	%		0.21	%
Allowance for credit losses on loans to non-accrual loans held for investment	3.1x			3.1x			2.8x			3.1x			3.9x
Total allowance for credit losses to non-accrual loans held for investment	3.6x			3.7x			3.3x			3.6x			4.6x
Loans held for investment past due 90 days and still accruing	$	5,281		$	286		$	3,674		$	19,523		$	4,602
Loans held for investment past due 90 days to total loans held for investment		0.02	%		—	%		0.02	%		0.10	%		0.02	%
Loans held for sale past due 90 days and still accruing	$	—		$	64		$	147		$	—		$	—

(1)	First quarter 2024 includes one non-accrual loan previously reported in loans held for investment that was transferred at fair value to held for sale as of March 31, 2024.

 

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)
	3rd Quarter			2nd Quarter		1st Quarter		4th Quarter		3rd Quarter
		2024			2024		2023		2023		2023
Interest income
Interest and fees on loans	$	361,407		$	345,251	$	330,879	$	325,210	$	345,138
Investment securities		38,389			33,584		32,144		28,454		27,070
Interest bearing deposits in other banks		52,737			43,233		54,355		63,408		53,561
Total interest income		452,533			422,068		417,378		417,072		425,769
Interest expense
Deposits		190,255			181,280		175,600		170,173		160,117
Short-term borrowings		13,784			12,749		12,783		18,069		19,576
Long-term debt		8,392			11,457		13,986		14,113		14,005
Total interest expense		212,431			205,486		202,369		202,355		193,698
Net interest income		240,102			216,582		215,009		214,717		232,071
Provision for credit losses		10,000			20,000		19,000		19,000		18,000
Net interest income after provision for credit losses		230,102			196,582		196,009		195,717		214,071
Non-interest income
Service charges on deposit accounts		6,307			5,911		6,339		5,397		5,297
Wealth management and trust fee income		4,040			3,699		3,567		3,302		3,509
Brokered loan fees		2,400			2,131		1,911		2,076		2,532
Investment banking and advisory fees		34,753			25,048		18,424		6,906		23,099
Trading income		5,786			5,650		4,712		3,819		6,092
Available-for-sale debt securities gains/(losses), net		(179,581	)		—		—		—		—
Other		11,524			7,985		6,366		9,633		6,343
Total non-interest income		(114,771	)		50,424		41,319		31,133		46,872
Non-interest expense
Salaries and benefits		121,138			118,840		128,727		107,970		110,010
Occupancy expense		12,937			10,666		9,737		9,483		9,910
Marketing		5,863			5,996		6,036		5,686		4,757
Legal and professional		11,135			11,273		16,195		17,127		17,614
Communications and technology		25,951			22,013		21,114		23,607		19,607
Federal Deposit Insurance Corporation insurance assessment		4,906			5,570		8,421		25,143		5,769
Other		13,394			14,051		12,163		12,369		12,224
Total non-interest expense		195,324			188,409		202,393		201,385		179,891
Income/(loss) before income taxes		(79,993	)		58,597		34,935		25,465		81,052
Income tax expense/(benefit)		(18,674	)		16,935		8,793		5,315		19,373
Net income/(loss)		(61,319	)		41,662		26,142		20,150		61,679
Preferred stock dividends		4,313			4,312		4,313		4,312		4,313
Net income/(loss) available to common shareholders	$	(65,632	)	$	37,350	$	21,829	$	15,838	$	57,366

TEXAS CAPITAL BANCSHARES, INC.
TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1)
(dollars in thousands)
	3rd Quarter 2024							2nd Quarter 2024							1st Quarter 2024							4th Quarter 2023							3rd Quarter 2023
	AverageBalance		Income/Expense		Yield/Rate			AverageBalance		Income/Expense		Yield/Rate			AverageBalance		Income/Expense		Yield/Rate			AverageBalance		Income/Expense		Yield/Rate			AverageBalance		Income/Expense		Yield/Rate
Assets
Investment securities(2)	$	4,314,834	$	38,389	3.34	%		$	4,427,023	$	33,584	2.80	%		$	4,299,368	$	32,144	2.77	%		$	4,078,975	$	28,454	2.48	%		$	4,204,749	$	27,070	2.33	%
Interest bearing cash and cash equivalents		3,958,843		52,737	5.30	%			3,273,069		43,233	5.31	%			4,051,627		54,355	5.40	%			4,637,374		63,408	5.42	%			3,965,045		53,561	5.36	%
Loans held for sale		23,793		565	9.44	%			28,768		683	9.55	%			51,164		1,184	9.31	%			29,071		672	9.17	%			31,878		647	8.06	%
Loans held for investment, mortgage finance(4)		5,152,317		54,371	4.20	%			4,357,288		42,722	3.94	%			3,517,707		31,455	3.60	%			3,946,280		33,709	3.39	%			4,697,702		50,813	4.29	%
Loans held for investment(3)(4)		16,792,446		306,541	7.26	%			16,750,788		301,910	7.25	%			16,522,089		298,306	7.26	%			16,164,233		290,897	7.14	%			16,317,324		293,750	7.14	%
Less: Allowance for credit losses on loans		266,915		—	—				263,145		—	—				249,936		—	—				244,287		—	—				238,883		—	—
Loans held for investment, net		21,677,848		360,912	6.62	%			20,844,931		344,632	6.65	%			19,789,860		329,761	6.70	%			19,866,226		324,606	6.48	%			20,776,143		344,563	6.58	%
Total earning assets		29,975,318		452,603	5.96	%			28,573,791		422,132	5.86	%			28,192,019		417,444	5.88	%			28,611,646		417,140	5.69	%			28,977,815		425,841	5.75	%
Cash and other assets		1,239,855							1,177,061							1,058,463							1,120,354							1,106,031
Total assets	$	31,215,173						$	29,750,852						$	29,250,482						$	29,732,000						$	30,083,846
Liabilities and Stockholders’ Equity
Transaction deposits	$	1,988,688	$	15,972	3.20	%		$	2,061,622	$	16,982	3.31	%		$	2,006,493	$	16,858	3.38	%		$	1,972,324	$	15,613	3.14	%		$	1,755,451	$	13,627	3.08	%
Savings deposits		12,240,616		147,770	4.80	%			11,981,668		143,173	4.81	%			11,409,677		136,790	4.82	%			11,043,155		132,801	4.77	%			10,858,306		127,323	4.65	%
Time deposits		2,070,537		26,513	5.09	%			1,658,899		21,125	5.12	%			1,719,325		21,952	5.14	%			1,716,812		21,759	5.03	%			1,610,235		19,167	4.72	%
Total interest bearing deposits		16,299,841		190,255	4.64	%			15,702,189		181,280	4.64	%			15,135,495		175,600	4.67	%			14,732,291		170,173	4.58	%			14,223,992		160,117	4.47	%
Short-term borrowings		1,012,608		13,784	5.42	%			927,253		12,749	5.53	%			912,088		12,783	5.64	%			1,257,609		18,069	5.70	%			1,393,478		19,576	5.57	%
Long-term debt		660,098		8,392	5.06	%			778,401		11,457	5.92	%			859,509		13,986	6.54	%			858,858		14,113	6.52	%			858,167		14,005	6.47	%
Total interest bearing liabilities		17,972,547		212,431	4.70	%			17,407,843		205,486	4.75	%			16,907,092		202,369	4.81	%			16,848,758		202,355	4.76	%			16,475,637		193,698	4.66	%
Non-interest bearing deposits		9,439,020							8,647,594							8,637,775							9,247,491							10,016,579
Other liabilities		558,368							537,754							509,286							541,162							474,869
Stockholders’ equity		3,245,238							3,157,661							3,196,329							3,094,589							3,116,761
Total liabilities and stockholders’ equity	$	31,215,173						$	29,750,852						$	29,250,482						$	29,732,000						$	30,083,846
Net interest income			$	240,172						$	216,646						$	215,075						$	214,785						$	232,143
Net interest margin					3.16	%						3.01	%						3.03	%						2.93	%						3.13	%

(1)	Taxable equivalent rates used where applicable.
(2)	Yields on investment securities are calculated using available-for-sale securities at amortized cost.
(3)	Average balances include non-accrual loans.
(4)	In the first quarter of 2024, enhancements were made to our methodology for applying relationship pricing credits to mortgage client loans. To conform to the current period presentation, certain prior period interest income amounts have been reclassified from loans held for investment, mortgage finance to loans held for investment and related yields have been adjusted accordingly.

INVESTOR CONTACT
Jocelyn Kukulka, 469.399.8544
jocelyn.kukulka@texascapitalbank.com

MEDIA CONTACT
Julia Monter, 469.399.8425
julia.monter@texascapitalbank.com