Texas Capital Bancshares, Inc. Announces Fourth Quarter and Full Year 2024 Results

Income in fee areas of focus(1) increased 38% year-over-year Strong balance sheet growth with total deposits increasing 13% and total loans growing 10% year-over-year Book Value and Tangible Book Value(2) per share both increased 8% year-over-year, reaching record levels Capital ratios continue to be strong, including 11.4% CET1 and 15.4% Total Capital DALLAS, Jan. 23, 2025 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the fourth quarter and full year of 2024. “For the past four years, our team steadily pursued the strategy we laid out in 2021, positioning Texas Capital to serve the best clients in all our markets,” said Rob C. Holmes, President and CEO. “Given full year 2024 financial results, the successful execution of significant strategic milestones and the realization of client adoption trends, the firm has proven that it is poised to deliver in 2025.” 4th Quarter 3rd Quarter 4th Quarter Full Year Full Year(dollars in thousands except per share data) 2024 2024 2023 2024 2023 OPERATING RESULTS Net income/(loss)$71,023 $(61,319) $20,150 $77,508 $189,141 Net income/(loss) available to common stockholders$66,711 $(65,632) $15,838 $60,258 $171,891 Pre-provision net revenue(4)$111,522 $(69,993) $44,465 $174,061 $318,595 Diluted earnings/(loss) per common share$1.43 $(1.41) $0.33 $1.28 $3.54 Diluted common shares 46,770,961 46,608,742 48,097,517 46,989,204 48,610,206 Return on average assets 0.88% (0.78) % 0.27% 0.25% 0.64%Return on average common equity 8.50% (8.87) % 2.25% 2.04% 6.15% OPERATING RESULTS, ADJUSTED(3) Net income/(loss)$71,023 $78,654 $35,403 $225,595 $204,394 Net income/(loss) available to common stockholders$66,711 $74,341 $31,091 $208,345 $187,144 Pre-provision net revenue(4)$111,522 $114,860 $64,351 $369,394 $338,481 Diluted earnings/(loss) per common share$1.43 $1.59 $0.65 $4.43 $3.85 Diluted common shares 46,770,961 46,608,742 48,097,517 46,989,204 48,610,206 Return on average assets 0.88% 1.00% 0.47% 0.74% 0.69%Return on average common equity 8.50% 10.04% 4.41% 7.05% 6.70% BALANCE SHEET Loans held for investment$17,234,492 $16,764,512 $16,362,230 Loans held for investment, mortgage finance 5,215,574 5,529,659 3,978,328 Total loans held for investment 22,450,066 22,294,171 20,340,558 Loans held for sale — 9,022 44,105 Total assets 30,731,883 31,629,299 28,356,266 Non-interest bearing deposits 7,485,428 9,070,804 7,328,276 Total deposits 25,238,599 25,865,255 22,371,839 Stockholders’ equity 3,367,936 3,354,044 3,199,142 (1) Fee areas of focus include service charges on deposit accounts, wealth management 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.(3) These adjusted measures are non-GAAP measures. Please refer to “GAAP to Non-GAAP Reconciliations” for the computations of these adjusted measures and the reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.(4) Net interest income plus non-interest income, less non-interest expense. FOURTH QUARTER 2024 COMPARED TO THIRD QUARTER 2024 For the fourth quarter of 2024, net income available to common stockholders was $66.7 million, or $1.43 net income per diluted share, compared to net loss available to common stockholders of $65.6 million, or $1.41 net loss per diluted share, for the third quarter of 2024. Provision for credit losses for the fourth quarter of 2024 was $18.0 million, compared to $10.0 million for the third quarter of 2024. The $18.0 million provision for credit losses recorded in the fourth quarter of 2024 resulted primarily from growth in total loans held for investment (“LHI”) and $12.1 million in net charge-offs. Net interest income was $229.6 million for the fourth quarter of 2024, compared to $240.1 million for the third quarter of 2024, as a decrease in yields on average earning assets and an increase in average interest bearing deposits were partially offset by an increase in average total LHI and a decrease in funding costs. Net interest margin for the fourth quarter of 2024 was 2.93%, a decrease of 23 basis points from the third quarter of 2024, reflecting the impact of decreases in interest rates during the fourth quarter of 2024. LHI, excluding mortgage finance, yields decreased 44 basis points from the third quarter of 2024 and LHI, mortgage finance, yields decreased 47 basis points from the third quarter of 2024. Total cost of deposits was 2.81% for the fourth quarter of 2024, a 13 basis point decrease from the third quarter of 2024. Non-interest income for the fourth quarter of 2024 increased $168.8 million compared to the third quarter of 2024 primarily due to the inclusion of a $179.6 million loss on sale of available-for-sale debt securities recognized during the third quarter of 2024, partially offset by decreases in investment banking and advisory fees and other non-interest income. Non-interest expense for the fourth quarter of 2024 decreased $23.2 million, or 12%, compared to the third quarter of 2024, primarily due to a decrease in salaries and benefits resulting from restructuring expenses recognized in the third quarter of 2024, as well as reductions in headcount and adjustments to compensation accruals. FOURTH QUARTER 2024 COMPARED TO FOURTH QUARTER 2023 Net income available to common stockholders was $66.7 million, or $1.43 per diluted share, for the fourth quarter of 2024, compared to net income available to common stockholders of $15.8 million, or $0.33 per diluted share, for the fourth quarter of 2023. The fourth quarter of 2024 included a $18.0 million provision for credit losses, reflecting growth in total LHI and $12.1 million in net charge-offs, compared to a $19.0 million provision for credit losses for the fourth quarter of 2023. Net interest income increased to $229.6 million for the fourth quarter of 2024, compared to $214.7 million for the fourth quarter of 2023, primarily due to an increase in average total LHI and a decrease in funding costs, partially offset by an increase in average interest bearing liabilities. Net interest margin was unchanged at 2.93% for the fourth quarter of 2024, as compared to the fourth quarter of 2023. LHI, excluding mortgage finance, yields decreased 32 basis points compared to the fourth quarter of 2023 and LHI, mortgage finance yields increased 34 basis points from the fourth quarter of 2023. Total cost of deposits decreased 1 basis point compared to the fourth quarter of 2023. Non-interest income for the fourth quarter of 2024 increased $22.9 million compared to the fourth quarter of 2023 primarily due to an increase in investment banking and advisory fees. Non-interest expense for the fourth quarter of 2024 decreased $29.2 million, or 15%, compared to the fourth quarter of 2023, primarily due to decreases in salaries and benefits, primarily from lower headcount, and Federal Deposit Insurance Corporation (“FDIC”) expense. The fourth quarter of 2023 included $19.9 million in FDIC special assessment expense. CREDIT QUALITY Net charge-offs of $12.1 million were recorded during the fourth quarter of 2024, compared to net charge-offs of $6.1 million and $13.8 million during the third quarter of 2024 and the fourth quarter of 2023, respectively. Criticized loans totaled $714.0 million at December 31, 2024, compared to $897.7 million at September 30, 2024 and $738.2 million at December 31, 2023. Non-accrual LHI totaled $111.2 million at December 31, 2024, compared to $89.0 million at September 30, 2024 and $81.4 million at December 31, 2023. The ratio of non-accrual LHI to total LHI for the fourth quarter of 2024 was 0.50%, compared to 0.40% for the third quarter of 2024 and 0.40% for the fourth quarter of 2023. The ratio of total allowance for credit losses to total LHI was 1.45% at December 31, 2024, compared to 1.43% and 1.46% at September 30, 2024 and December 31, 2023, respectively. REGULATORY RATIOS AND CAPITAL All regulatory ratios continue to be in excess of “well capitalized” requirements as of December 31, 2024. CET1, tier 1 capital, total capital and leverage ratios were 11.4%, 12.8%, 15.4% and 11.3%, respectively, at December 31, 2024, compared to 11.2%, 12.6%, 15.2% and 11.4%, respectively, at September 30, 2024 and 12.6%, 14.2%, 17.1% and 12.2%, respectively, at December 31, 2023. At December 31, 2024, our ratio of tangible common equity to total tangible assets was 10.0%, compared to 9.7% at September 30, 2024 and 10.2% at December 31, 2023. On January 22, 2025, the Company’s board of directors authorized a new share repurchase program under which the Company may repurchase up to $200.0 million in shares of its outstanding common stock through January 31, 2026. Remaining repurchase authorization under the January 17, 2024 share repurchase program was terminated upon authorization of this new program. About Texas Capital Bancshares, Inc. Texas Capital Bancshares, Inc. (NASDAQ: TCBI), a member of the Russell 2000® Index and the S&P MidCap 400®, 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; increased or expanded competition from banks and other financial service providers in TCBI’s markets; 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 and potential strategic acquisitions; 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; TCBI’s ability to use technology to provide products and services to its customers; risks related to the development and use of artificial intelligence; 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; 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) 4th Quarter3rd Quarter2nd Quarter1st Quarter4th Quarter 2024 2024 2024 2024 2023 CONSOLIDATED STATEMENTS OF INCOME Interest income$437,571 $452,533 $422,068 $417,378 $417,072 Interest expense 207,964 212,431 205,486 202,369 202,355 Net interest income 229,607 240,102 216,582 215,009 214,717 Provision for credit losses 18,000 10,000 20,000 19,000 19,000 Net interest income after provision for credit losses 211,607 230,102 196,582 196,009 195,717 Non-interest income 54,074 (114,771) 50,424 41,319 31,133 Non-interest expense 172,159 195,324 188,409 202,393 201,385 Income/(loss) before income taxes 93,522 (79,993) 58,597 34,935 25,465 Income tax expense/(benefit) 22,499 (18,674) 16,935 8,793 5,315 Net income/(loss) 71,023 (61,319) 41,662 26,142 20,150 Preferred stock dividends 4,312 4,313 4,312 4,313 4,312 Net income/(loss) available to common stockholders$66,711 $(65,632)$37,350 $21,829 $15,838 Diluted earnings/(loss) per common share$1.43 $(1.41)$0.80 $0.46 $0.33 Diluted common shares 46,770,961 46,608,742 46,872,498 47,711,192 48,097,517 CONSOLIDATED BALANCE SHEET DATA Total assets$30,731,883 $31,629,299 $29,854,994 $29,180,585 $28,356,266 Loans held for investment 17,234,492 16,764,512 16,700,569 16,677,691 16,362,230 Loans held for investment, mortgage finance 5,215,574 5,529,659 5,078,161 4,153,313 3,978,328 Loans held for sale — 9,022 36,785 37,750 44,105 Interest bearing cash and cash equivalents 3,012,307 3,894,537 2,691,352 3,148,157 3,042,357 Investment securities 4,396,115 4,405,520 4,388,976 4,414,280 4,143,194 Non-interest bearing deposits 7,485,428 9,070,804 7,987,715 8,478,215 7,328,276 Total deposits 25,238,599 25,865,255 23,818,327 23,954,037 22,371,839 Short-term borrowings 885,000 1,035,000 1,675,000 750,000 1,500,000 Long-term debt 660,346 660,172 659,997 859,823 859,147 Stockholders’ equity 3,367,936 3,354,044 3,175,601 3,170,662 3,199,142 End of period shares outstanding 46,233,812 46,207,757 46,188,078 46,986,275 47,237,912 Book value per share$66.36 $66.09 $62.26 $61.10 $61.37 Tangible book value per share(1)$66.32 $66.06 $62.23 $61.06 $61.34 SELECTED FINANCIAL RATIOS Net interest margin 2.93% 3.16% 3.01% 3.03% 2.93%Return on average assets 0.88%(0.78)% 0.56% 0.36% 0.27%Return on average assets, adjusted(4) 0.88% 1.00% 0.57% 0.47% 0.47%Return on average common equity 8.50%(8.87)% 5.26% 3.03% 2.25%Return on average common equity, adjusted(4) 8.50% 10.04% 5.31% 4.11% 4.41%Efficiency ratio(2) 60.7% 155.8% 70.6% 79.0% 81.9%Efficiency ratio, adjusted(2)(4) 60.7% 62.3% 70.4% 75.1% 73.8%Non-interest income to average earning assets 0.69%(1.52)% 0.71% 0.59% 0.43%Non-interest income to average earning assets, adjusted(4) 0.69% 0.86% 0.71% 0.59% 0.43%Non-interest expense to average earning assets 2.21% 2.59% 2.65% 2.89% 2.79%Non-interest expense to average earning assets, adjusted(4) 2.21% 2.52% 2.65% 2.74% 2.52%Common equity to total assets 10.0% 9.7% 9.6% 9.8% 10.2%Tangible common equity to total tangible assets(3) 10.0% 9.7% 9.6% 9.8% 10.2%Common Equity Tier 1 11.4% 11.2% 11.6% 12.4% 12.6%Tier 1 capital 12.8% 12.6% 13.1% 13.9% 14.2%Total capital 15.4% 15.2% 15.7% 16.6% 17.1%Leverage 11.3% 11.4% 12.2% 12.4% 12.2% (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.(4) These adjusted measures are non-GAAP measures. Please refer to “GAAP to Non-GAAP Reconciliations” for the computations of these adjusted measures and the reconciliation of these non-GAAP measures to the most directly comparable GAAP measure. TEXAS CAPITAL BANCSHARES, INC.CONSOLIDATED BALANCE SHEETS (UNAUDITED)(dollars in thousands) December 31, 2024December 31, 2023% ChangeAssets Cash and due from banks$176,501 $200,493 (12)%Interest bearing cash and cash equivalents 3,012,307 3,042,357 (1)%Available-for-sale debt securities 3,524,686 3,225,892 9%Held-to-maturity debt securities 796,168 865,477 (8)%Equity securities 75,261 51,825 45%Investment securities 4,396,115 4,143,194 6%Loans held for sale — 44,105 (100)%Loans held for investment, mortgage finance 5,215,574 3,978,328 31%Loans held for investment 17,234,492 16,362,230 5%Less: Allowance for credit losses on loans 271,709 249,973 9%Loans held for investment, net 22,178,357 20,090,585 10%Premises and equipment, net 85,443 32,366 164%Accrued interest receivable and other assets 881,664 801,670 10%Goodwill and intangibles, net 1,496 1,496 —%Total assets$30,731,883 $28,356,266 8% Liabilities and Stockholders’ Equity Liabilities: Non-interest bearing deposits$7,485,428 $7,328,276 2%Interest bearing deposits 17,753,171 15,043,563 18%Total deposits 25,238,599 22,371,839 13%Accrued interest payable 23,680 33,234 (29)%Other liabilities 556,322 392,904 42%Short-term borrowings 885,000 1,500,000 (41)%Long-term debt 660,346 859,147 (23)%Total liabilities 27,363,947 25,157,124 9% Stockholders’ equity: Preferred stock, $.01 par value, $1,000 liquidation value: Authorized shares - 10,000,000 Issued shares - 300,000 shares issued at December 31, 2024 and 2023 300,000 300,000 —%Common stock, $.01 par value: Authorized shares - 100,000,000 Issued shares - 51,520,315 and 51,142,979 at December 31, 2024 and 2023, respectively 515 511 1%Additional paid-in capital 1,056,719 1,045,576 1%Retained earnings 2,495,651 2,435,393 2%Treasury stock - 5,286,503 and 3,905,067 shares at cost at December 31, 2024 and 2023, respectively (301,842) (220,334)37%Accumulated other comprehensive loss, net of taxes (183,107) (362,004)(49)%Total stockholders’ equity 3,367,936 3,199,142 5%Total liabilities and stockholders’ equity$30,731,883 $28,356,266 8% TEXAS CAPITAL BANCSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in thousands except per share data) Three Months Ended December 31,Year Ended December 31, 2024 2023 2024 2023Interest income Interest and fees on loans$340,388$325,210$1,377,925 $1,300,653Investment securities 44,102 28,454 148,219 108,294Interest bearing cash and cash equivalents 53,081 63,408 203,406 220,976Total interest income 437,571 417,072 1,729,550 1,629,923Interest expense Deposits 189,061 170,173 736,196 587,775Short-term borrowings 10,678 18,069 49,994 70,642Long-term debt 8,225 14,113 42,060 57,383Total interest expense 207,964 202,355 828,250 715,800Net interest income 229,607 214,717 901,300 914,123Provision for credit losses 18,000 19,000 67,000 72,000Net interest income after provision for credit losses 211,607 195,717 834,300 842,123Non-interest income Service charges on deposit accounts 6,989 5,397 25,546 20,874Wealth management and trust fee income 4,009 3,302 15,315 13,955Brokered loan fees 2,519 2,076 8,961 8,918Investment banking and advisory fees 26,740 6,906 104,965 63,670Trading income 5,487 3,819 21,635 22,512Available-for-sale debt securities gains/(losses), net — — (179,581) 489Other 8,330 9,633 34,205 31,001Total non-interest income 54,074 31,133 31,046 161,419Non-interest expense Salaries and benefits 97,873 107,970 466,578 459,700Occupancy expense 11,926 9,483 45,266 38,494Marketing 4,454 5,686 22,349 25,854Legal and professional 15,180 17,127 53,783 64,924Communications and technology 24,007 23,607 93,085 81,262Federal Deposit Insurance Corporation insurance assessment 4,454 25,143 23,351 36,775Other 14,265 12,369 53,873 49,938Total non-interest expense 172,159 201,385 758,285 756,947Income before income taxes 93,522 25,465 107,061 246,595Income tax expense 22,499 5,315 29,553 57,454Net income 71,023 20,150 77,508 189,141Preferred stock dividends 4,312 4,312 17,250 17,250Net income available to common stockholders$66,711$15,838$60,258 $171,891 Basic earnings per common share$1.44$0.33$1.29 $3.58Diluted earnings per common share$1.43$0.33$1.28 $3.54 TEXAS CAPITAL BANCSHARES, INC.SUMMARY OF CREDIT LOSS EXPERIENCE(dollars in thousands) 4th Quarter3rd Quarter2nd Quarter1st Quarter4th Quarter 2024 2024 2024 2024 2023 Allowance for credit losses on loans: Beginning balance$273,143 $267,297 $263,962 $249,973 $244,902 Allowance established for acquired purchase credit deterioration loans — 2,579 — — — Loans charged-off: Commercial 14,100 6,120 9,997 7,544 8,356 Commercial real estate 2,566 262 2,111 3,325 5,500 Consumer — 30 — — — Total charge-offs 16,666 6,412 12,108 10,869 13,856 Recoveries: Commercial 4,562 329 153 105 15 Commercial real estate 18 — — — 4 Consumer 15 — — — — Total recoveries 4,595 329 153 105 19 Net charge-offs 12,071 6,083 11,955 10,764 13,837 Provision for credit losses on loans 10,637 9,350 15,290 24,753 18,908 Ending balance$271,709 $273,143 $267,297 $263,962 $249,973 Allowance for off-balance sheet credit losses: Beginning balance$45,969 $45,319 $40,609 $46,362 $46,270 Provision for off-balance sheet credit losses 7,363 650 4,710 (5,753) 92 Ending balance$53,332 $45,969 $45,319 $40,609 $46,362 Total allowance for credit losses$325,041 $319,112 $312,616 $304,571 $296,335 Total provision for credit losses$18,000 $10,000 $20,000 $19,000 $19,000 Allowance for credit losses on loans to total loans held for investment 1.21% 1.23% 1.23% 1.27% 1.23%Allowance for credit losses on loans to average total loans held for investment 1.22% 1.24% 1.27% 1.32% 1.24%Net charge-offs to average total loans held for investment(1) 0.22% 0.11% 0.23% 0.22% 0.27%Net charge-offs to average total loans held for investment for last 12 months(1) 0.19% 0.20% 0.22% 0.20% 0.25%Total provision for credit losses to average total loans held for investment(1) 0.32% 0.18% 0.38% 0.38% 0.37%Total allowance for credit losses to total loans held for investment 1.45% 1.43% 1.44% 1.46% 1.46% (1) Interim period ratios are annualized. TEXAS CAPITAL BANCSHARES, INC. SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS (dollars in thousands) 4th Quarter3rd Quarter2nd Quarter1st Quarter4th Quarter 2024 2024 2024 2024 2023 Non-accrual loans held for investment$111,165 $88,960 $85,021 $92,849 $81,398 Non-accrual loans held for sale(1) — — — 9,250 — Other real estate owned — — — — — Total non-performing assets$111,165 $88,960 $85,021 $102,099 $81,398 Non-accrual loans held for investment to total loans held for investment 0.50% 0.40% 0.39% 0.45% 0.40%Total non-performing assets to total assets 0.36% 0.28% 0.28% 0.35% 0.29%Allowance for credit losses on loans to non-accrual loans held for investment2.4x 3.1x 3.1x 2.8x 3.1x Total allowance for credit losses to non-accrual loans held for investment2.9x 3.6x 3.7x 3.3x 3.6x Loans held for investment past due 90 days and still accruing$4,265 $5,281 $286 $3,674 $19,523 Loans held for investment past due 90 days to total loans held for investment 0.02% 0.02% —% 0.02% 0.10%Loans held for sale past due 90 days and still accruing$— $— $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) 4th Quarter3rd Quarter2nd Quarter1st Quarter4th Quarter 2024 2024 202420242023Interest income Interest and fees on loans$340,388$361,407 $345,251$330,879$325,210Investment securities 44,102 38,389 33,584 32,144 28,454Interest bearing deposits in other banks 53,081 52,737 43,233 54,355 63,408Total interest income 437,571 452,533 422,068 417,378 417,072Interest expense Deposits 189,061 190,255 181,280 175,600 170,173Short-term borrowings 10,678 13,784 12,749 12,783 18,069Long-term debt 8,225 8,392 11,457 13,986 14,113Total interest expense 207,964 212,431 205,486 202,369 202,355Net interest income 229,607 240,102 216,582 215,009 214,717Provision for credit losses 18,000 10,000 20,000 19,000 19,000Net interest income after provision for credit losses 211,607 230,102 196,582 196,009 195,717Non-interest income Service charges on deposit accounts 6,989 6,307 5,911 6,339 5,397Wealth management and trust fee income 4,009 4,040 3,699 3,567 3,302Brokered loan fees 2,519 2,400 2,131 1,911 2,076Investment banking and advisory fees 26,740 34,753 25,048 18,424 6,906Trading income 5,487 5,786 5,650 4,712 3,819Available-for-sale debt securities losses, net — (179,581) — — —Other 8,330 11,524 7,985 6,366 9,633Total non-interest income 54,074 (114,771) 50,424 41,319 31,133Non-interest expense Salaries and benefits 97,873 121,138 118,840 128,727 107,970Occupancy expense 11,926 12,937 10,666 9,737 9,483Marketing 4,454 5,863 5,996 6,036 5,686Legal and professional 15,180 11,135 11,273 16,195 17,127Communications and technology 24,007 25,951 22,013 21,114 23,607Federal Deposit Insurance Corporation insurance assessment 4,454 4,906 5,570 8,421 25,143Other 14,265 13,394 14,051 12,163 12,369Total non-interest expense 172,159 195,324 188,409 202,393 201,385Income/(loss) before income taxes 93,522 (79,993) 58,597 34,935 25,465Income tax expense/(benefit) 22,499 (18,674) 16,935 8,793 5,315Net income/(loss) 71,023 (61,319) 41,662 26,142 20,150Preferred stock dividends 4,312 4,313 4,312 4,313 4,312Net income/(loss) available to common shareholders$66,711$(65,632)$37,350$21,829$15,838 TEXAS CAPITAL BANCSHARES, INC.TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1)(dollars in thousands) 4th Quarter 2024 3rd Quarter 2024 2nd Quarter 2024 1st Quarter 2024 4th Quarter 2023 AverageBalanceIncome/ExpenseYield/Rate AverageBalanceIncome/ExpenseYield/Rate AverageBalanceIncome/ExpenseYield/Rate AverageBalanceIncome/ExpenseYield/Rate AverageBalanceIncome/ExpenseYield/RateAssets Investment securities(2)$4,504,101$44,1023.79% $4,314,834$38,3893.34% $4,427,023$33,5842.80% $4,299,368$32,1442.77% $4,078,975$28,4542.48%Interest bearing cash and cash equivalents 4,472,772 53,0814.72% 3,958,843 52,7375.30% 3,273,069 43,2335.31% 4,051,627 54,3555.40% 4,637,374 63,4085.42%Loans held for sale — ——% 23,793 5659.44% 28,768 6839.55% 51,164 1,1849.31% 29,071 6729.17%Loans held for investment, mortgage finance(4) 5,409,980 50,6853.73% 5,152,317 54,3714.20% 4,357,288 42,7223.94% 3,517,707 31,4553.60% 3,946,280 33,7093.39%Loans held for investment(3)(4) 16,919,925 289,9166.82% 16,792,446 306,5417.26% 16,750,788 301,9107.25% 16,522,089 298,3067.26% 16,164,233 290,8977.14%Less: Allowance for credit losses on loans 272,975 —— 266,915 —— 263,145 —— 249,936 —— 244,287 —— Loans held for investment, net 22,056,930 340,6016.14% 21,677,848 360,9126.62% 20,844,931 344,6326.65% 19,789,860 329,7616.70% 19,866,226 324,6066.48%Total earning assets 31,033,803 437,7845.59% 29,975,318 452,6035.96% 28,573,791 422,1325.86% 28,192,019 417,4445.88% 28,611,646 417,1405.69%Cash and other assets 1,178,284 1,239,855 1,177,061 1,058,463 1,120,354 Total assets$32,212,087 $31,215,173 $29,750,852 $29,250,482 $29,732,000 Liabilities and Stockholders’ Equity Transaction deposits$2,141,739$15,4032.86% $1,988,688$15,9723.20% $2,061,622$16,9823.31% $2,006,493$16,8583.38% $1,972,324$15,6133.14%Savings deposits 12,932,458 144,3934.44% 12,240,616 147,7704.80% 11,981,668 143,1734.81% 11,409,677 136,7904.82% 11,043,155 132,8014.77%Time deposits 2,331,009 29,2654.99% 2,070,537 26,5135.09% 1,658,899 21,1255.12% 1,719,325 21,9525.14% 1,716,812 21,7595.03%Total interest bearing deposits 17,405,206 189,0614.32% 16,299,841 190,2554.64% 15,702,189 181,2804.64% 15,135,495 175,6004.67% 14,732,291 170,1734.58%Short-term borrowings 883,326 10,6784.81% 1,012,608 13,7845.42% 927,253 12,7495.53% 912,088 12,7835.64% 1,257,609 18,0695.70%Long-term debt 660,270 8,2254.96% 660,098 8,3925.06% 778,401 11,4575.92% 859,509 13,9866.54% 858,858 14,1136.52%Total interest bearing liabilities 18,948,802 207,9644.37% 17,972,547 212,4314.70% 17,407,843 205,4864.75% 16,907,092 202,3694.81% 16,848,758 202,3554.76%Non-interest bearing deposits 9,319,711 9,439,020 8,647,594 8,637,775 9,247,491 Other liabilities 522,641 558,368 537,754 509,286 541,162 Stockholders’ equity 3,420,933 3,245,238 3,157,661 3,196,329 3,094,589 Total liabilities and stockholders’ equity$32,212,087 $31,215,173 $29,750,852 $29,250,482 $29,732,000 Net interest income $229,820 $240,172 $216,646 $215,075 $214,785 Net interest margin 2.93% 3.16% 3.01% 3.03% 2.93% (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. GAAP TO NON-GAAP RECONCILIATIONS The following items are non-GAAP financial measures: adjusted net income, adjusted net income available to common stockholders, adjusted pre-provision net revenue (“PPNR”), adjusted diluted earnings/(loss) per common share, adjusted return on average assets, adjusted return on average common equity, adjusted efficiency ratio, adjusted non-interest income to average earning assets and adjusted non-interest expense to average earning assets. These are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. The table below provides a reconciliation of these non-GAAP financial measures to the most comparable GAAP measures. These non-GAAP financial measures are adjusted for certain items, listed below, that management believes are non-operating in nature and not representative of its actual operating performance. Management believes that these non-GAAP financial measures provide meaningful additional information about Texas Capital Bancshares, Inc. to assist management and investors in evaluating operating results, financial strength, business performance and capital position. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. As such, these non-GAAP financial measures should not be considered in isolation or as a substitute for analyses of operating results or capital position as reported under GAAP. Reconciliation of Non-GAAP Financial Measures (dollars in thousands except per share data)4th Quarter20243rd Quarter20242nd Quarter20241st Quarter20244th Quarter2023Full Year 2024Full Year 2023Net interest income$229,607 $240,102 $216,582 $215,009 $214,717 $901,300 $914,123 Non-interest income 54,074 (114,771) 50,424 41,319 31,133 31,046 161,419 Available-for-sale debt securities losses, net — 179,581 — — — 179,581 — Non-interest income, adjusted 54,074 64,810 50,424 41,319 31,133 210,627 161,419 Non-interest expense 172,159 195,324 188,409 202,393 201,385 758,285 756,947 FDIC special assessment — 651 (462) (3,000) (19,886) (2,811) (19,886)Restructuring expenses — (5,923) — (2,018) — (7,941) — Legal Settlement — — — (5,000) — (5,000) — Non-interest expense, adjusted 172,159 190,052 187,947 192,375 181,499 742,533 737,061 Provision for credit losses 18,000 10,000 20,000 19,000 19,000 67,000 72,000 Income tax expense/(benefit) 22,499 (18,674) 16,935 8,793 5,315 29,553 57,454 Tax effect of adjustments — 44,880 104 2,262 4,633 47,246 4,633 Income tax expense/(benefit), adjusted 22,499 26,206 17,039 11,055 9,948 76,799 62,087 Net income/(loss)(1)$71,023 $(61,319)$41,662 $26,142 $20,150 $77,508 $189,141 Net income/(loss), adjusted(1)$71,023 $78,654 $42,020 $33,898 $35,403 $225,595 $204,394 Preferred stock dividends 4,312 4,313 4,312 4,313 4,312 17,250 17,250 Net income/(loss) to common stockholders(2)$66,711 $(65,632)$37,350 $21,829 $15,838 $60,258 $171,891 Net income/(loss) to common stockholders, adjusted(2)$66,711 $74,341 $37,708 $29,585 $31,091 $208,345 $187,144 PPNR(3)$111,522 $(69,993)$78,597 $53,935 $44,465 $174,061 $318,595 PPNR(3), adjusted$111,522 $114,860 $79,059 $63,953 $64,351 $369,394 $338,481 Weighted average common shares outstanding, diluted 46,770,961 46,608,742 46,872,498 47,711,192 48,097,517 46,989,204 48,610,206 Diluted earnings/(loss) per common share$1.43 $(1.41)$0.80 $0.46 $0.33 $1.28 $3.54 Diluted earnings/(loss) per common share, adjusted$1.43 $1.59 $0.80 $0.62 $0.65 $4.43 $3.85 Average total assets$32,212,087 $31,215,173 $29,750,852 $29,250,482 $29,732,000 $30,613,195 $29,537,344 Return on average assets 0.88%(0.78)% 0.56% 0.36% 0.27% 0.25% 0.64%Return on average assets, adjusted 0.88% 1.00% 0.57% 0.47% 0.47% 0.74% 0.69% Average common equity$3,120,933 $2,945,238 $2,857,661 $2,896,329 $2,794,589 $2,955,467 $2,794,964 Return on average common equity 8.50%(8.87)% 5.26% 3.03% 2.25% 2.04% 6.15%Return on average common equity, adjusted 8.50% 10.04% 5.31% 4.11% 4.41% 7.05% 6.70% Efficiency ratio(4) 60.7% 155.8% 70.6% 79.0% 81.9% 81.3% 70.4%Efficiency ratio, adjusted(4) 60.7% 62.3% 70.4% 75.1% 73.8% 66.8% 68.5% Average earning assets$31,033,803 $29,975,318 $28,573,791 $28,192,019 $28,611,646 $29,449,530 $28,457,737 Non-interest income to average earning assets 0.69%(1.52)% 0.71% 0.59% 0.43% 0.11% 0.57%Non-interest income to average earning assets, adjusted 0.69% 0.86% 0.71% 0.59% 0.43% 0.72% 0.57%Non-interest expense to average earning assets 2.21% 2.59% 2.65% 2.89% 2.79% 2.57% 2.66%Non-interest expense to average earning assets, adjusted 2.21% 2.52% 2.65% 2.74% 2.52% 2.52% 2.59% (1) Net interest income plus non-interest income, less non-interest expense, provision for credit losses and income tax expense/(benefit). On an adjusted basis, net interest income plus non-interest income, adjusted, less non-interest expense, adjusted, provision for credit losses and income tax expense/(benefit), adjusted.(2) Net income/(loss), less preferred stock dividends. On an adjusted basis, net income/(loss), adjusted, less preferred stock dividends.(3) Net interest income plus non-interest income, less non-interest expense. On an adjusted basis, net interest income plus non-interest income, adjusted, less non-interest expense, adjusted.(4) Non-interest expense divided by the sum of net interest income and non-interest income. On an adjusted basis, non-interest expense, adjusted, divided by the sum of net interest income and non-interest income, adjusted.

Texas Capital Bancshares, Inc. Announces Fourth Quarter and Full Year 2024 Results

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