GlobeNewswire Inc | Jan 21, 2021 04:03PM EST

January 21, 2021

DALLAS, Jan. 21, 2021 (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 2020.

"While 2020 was certainly a challenging year, I am pleased with our strong fourth quarter results," said Larry Helm, Executive Chairman and CEO. "I want to thank our employees for their hard work and commitment to serving our clients during this unprecedented time. Though we are still navigating the pandemic, I am confident that Texas Capital Bank is well positioned for the future due to the actions we took in 2020. Looking ahead, Rob Holmes, our new CEO, officially joins us next week. Under his leadership, I have no doubt that Texas Capital Bank will continue to enhance its level of execution and recruit and develop the best talent, enabling us to drive long term shareholder value."

-- Net income of $60.2 million ($1.14 per share) reported for the fourth quarter of 2020, an increase of $3.1 million on a linked quarter basis and a decrease of $4.2 million from the fourth quarter of 2019. -- Average mortgage finance loans held for investment ("LHI") increased 5% on a linked quarter basis and 21% from the fourth quarter of 2019. -- Credit quality improved in the fourth quarter of 2020, reflecting declines in non-performing assets and criticized loans of $40.0 million and $157.1 million, respectively, on a linked quarter basis. -- Successfully deployed $1.8 billion of excess liquidity into higher yielding investment securities in the fourth quarter of 2020.

FINANCIAL SUMMARY

(dollars and shares in thousands) 2020 2019 % ChangeANNUAL OPERATING RESULTS Net income $ 66,289 $ 312,015 (79 )%Net income available to common $ 56,539 $ 302,265 (81 )%stockholdersDiluted earnings per common share $ 1.12 $ 5.99 (81 )%Diluted shares 50,583 50,419 ? %ROA 0.18 % 1.01 % ROE 2.10 % 11.95 % QUARTERLY OPERATING RESULTS Net income $ 60,176 $ 64,420 (7 )%Net income available to common $ 57,739 $ 61,983 (7 )%stockholdersDiluted earnings per common share $ 1.14 $ 1.23 (7 )%Diluted common shares 50,794 50,462 1 %ROA 0.61 % 0.74 % ROE 8.50 % 9.26 % BALANCE SHEET Loans held for sale ("LHS") $ 283,165 $ 2,577,134 (89 )%LHI, mortgage finance 9,079,409 8,169,849 11 %LHI 15,351,451 16,476,413 (7 )%Total LHI 24,430,860 24,646,262 (1 )%Total assets 37,726,096 32,548,069 16 %Demand deposits 12,740,947 9,438,459 35 %Total deposits 30,996,589 26,478,593 17 %Stockholders? equity 2,871,224 2,801,321 2 %

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income of $66.3 million and net income available to common stockholders of $56.5 million for the year ended December 31, 2020, compared to net income of $312.0 million and net income available to common stockholders of $302.3 million for the year ended December 31, 2019. For the fourth quarter of 2020, net income was $60.2 million, compared to net income of $57.1 million for the third quarter of 2020, and net income of $64.4 million for the fourth quarter of 2019. On a fully diluted basis, earnings per common share were $1.12 for the year ended December 31, 2020 compared to $5.99 for the same period in 2019. Diluted earnings per common share were $1.14 for the quarter ended December31, 2020, compared to $1.08 for the quarter ended September 30, 2020 and $1.23 for the quarter ended December 31, 2019. The increase in net income for the fourth quarter of 2020 as compared to the third quarter of 2020 resulted primarily from a $15.4 million increase in net interest income and a $14.9 million decrease in non-interest expense, offset by a $17.5 million decrease in non-interest income.

We recorded a $32.0 million provision for credit losses for the fourth quarter of 2020 utilizing the Current Expected Credit Loss ("CECL") methodology adopted in the first quarter of 2020, compared to $30.0 million for the third quarter of 2020 and $17.0 million for the fourth quarter of 2019. We recorded $65.4 million in net charge-offs during the fourth quarter of 2020, including $27.6 million in energy net charge-offs and $34.2 million in leveraged lending net charge-offs, all of which were loans that had been previously identified as problem loans, compared to $1.6 million during the third quarter of 2020 and $12.8 million during the fourth quarter of 2019. Criticized loans totaled $918.4 million at December31, 2020, compared to $1.1 billion at September 30, 2020 and $584.1 million at December 31, 2019. Criticized loan levels have declined in the fourth quarter of 2020 as compared to the third quarter of 2020, however remain elevated when compared to 2019 due to the downgrade of loans to borrowers that have been impacted by the COVID-19 pandemic or that are in categories that are expected to be more significantly impacted by COVID-19.

Non-performing assets ("NPAs") totaled $122.0 million at December 31, 2020, a decrease of $40.0 million compared to the third quarter of 2020 and a decrease of $103.4 million compared to the fourth quarter of 2019. Non-accrual energy loans totaled $51.7 million (42% of total NPAs) at December 31, 2020, compared to $73.8 million (46% of total NPAs) at September 30, 2020 and $125.0 million (55% of total NPAs) at December 31, 2019. Non-accrual leveraged lending loans totaled $18.9 million (15% of total NPAs) at December 31, 2020, compared to $31.3 million (19% of total NPAs) at September 30, 2020 and $73.2 million (32% of total NPAs) at December 31, 2019. The ratio of total LHI NPAs to total LHI plus other real estate owned ("OREO") for the fourth quarter of 2020 was 0.50%, compared to 0.64% for the third quarter of 2020 and 0.91% for the fourth quarter of 2019.

Net interest income was $223.0 million for the fourth quarter of 2020, compared to $207.6 million for the third quarter of 2020 and $248.4 million for the fourth quarter of 2019. Net interest margin for the fourth quarter of 2020 was 2.32%, an increase of 10 basis points from the third quarter of 2020 and a decrease of 63 basis points from the fourth quarter of 2019. The shift in earning assets, primarily the increases in liquidity assets and investment securities, and decrease in LHI, excluding mortgage finance, contributed to the year-over-year decrease in net interest margin. LHI yields, excluding mortgage finance loans, increased 28 basis points from the third quarter of 2020, and decreased 104 basis points compared to the fourth quarter of 2019. LHI, mortgage finance yields for the fourth quarter of 2020 decreased 7 basis points compared to the third quarter of 2020, and increased 11 basis points compared to the fourth quarter of 2019. Additionally, total cost of deposits for the fourth quarter of 2020 decreased 5 basis points to 0.29% compared to 0.34% for the third quarter of 2020, and decreased 70 basis points from 0.99% for the fourth quarter of 2019.

Non-interest income decreased $17.5 million, or 29%, during the fourth quarter of 2020 compared to the third quarter of 2020, and increased $25.1 million, or 141%, compared to the fourth quarter of 2019. The linked quarter decrease was primarily related to a decrease in net gain/(loss) on sale of LHS, resulting primarily from decreased margins and lower sales volume. The year-over-year increase was primarily related to increases in net gain/(loss) on sale of LHS, servicing fee income and brokered loan fees. The year-over-year increase in net gain/(loss) on sale of LHS was due to lower hedge costs in the fourth quarter of 2020 as a result of holding purchased loans for shorter durations than in prior periods, and is offset by the year-over-year decline in net interest income on LHS. The year-over-year increase in servicing fee income was due to an increase in the outstanding balance of our servicing portfolio. The year-over-year increase in brokered loan fees was due to an increase in total mortgage finance volumes in the fourth quarter of 2020.

Non-interest expense for the fourth quarter of 2020 decreased $14.9 million, or 9%, compared to the third quarter of 2020, and decreased $17.3 million, or 10%, compared to the fourth quarter of 2019. The linked quarter decrease was primarily related to decreases in salaries and employee benefits and communications and technology expense, offset by an increase in servicing-related expense. The year-over-year decrease was primarily due to decreases in salaries and employee benefits, marketing and legal and profession expenses, partially offset by an increase in servicing-related expense. The linked quarter decrease in communication and technology expense was primarily due to non-recurring software expenses recorded in the third quarter of 2020. The linked-quarter and year-over-year decreases in salaries and employee benefits was the result of cost savings related to our second quarter 2020 workforce reduction. The linked-quarter and year-over-year increases in servicing-related expense was primarily due to an increase in MSR amortization, resulting primarily from an increase in the cost basis of our MSR asset.

All regulatory ratios continue to be in excess of "well-capitalized" requirements as of December31, 2020. Our CET 1, tier 1 capital, total capital and leverage ratios were 9.4%, 10.3%, 12.1% and 7.5%, respectively, at December31, 2020, compared to 9.1%, 9.9%, 11.8% and 7.6%, respectively, at September 30, 2020. At December31, 2020, our ratio of tangible common equity to total tangible assets was 7.1% compared to 6.8% at September 30, 2020.

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 parent company of Texas Capital Bank, a commercial bank that delivers highly personalized financial services to businesses and entrepreneurs. Headquartered in Dallas, the bank has full-service locations in Austin, Dallas, Fort Worth, Houston and San Antonio.

Forward Looking Statements

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding our financial condition, results of operations, business plans and future performance. These statements are not historical in nature and can generally be identified by such words as believe, expect, estimate, anticipate, plan, may, will, forecast, could, should, projects, targeted,, continue,, intend and similar expressions.

Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. A number of factors, many of which are beyond our control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.These factors include, but are not limited to, (1) the credit quality of our loan portfolio, (2) general economic conditions in the United States, globally and in our markets and the impact they may have on us and our customers,, including the continued impact on our customers from volatility in oil and gas prices, (3) the material risks and uncertainties for the U.S. and world economies, and for our business, resulting from the ongoing COVID-19 pandemic and any other pandemic, epidemic or health-related crisis, (4) expectations regarding rates of default and credit losses, (5) volatility in the mortgage industry, (6) our business strategies, (7) our expectations about future financial performance, future growth and earnings, (8) the appropriateness of our allowance for credit losses and provision for credit losses, (9) our ability to identify, attract and retain qualified employees, (10) the impact of changing regulatory requirements and legislative changes on our business, (11) increased competition from banking organizations and other financial service providers, (12) interest rate risk, (13) greater than expected costs or difficulties related to the integration of new lines of business, products or new service offerings, (14) technological changes, (15) the cost and effects of cyber incidents or other failures, interruptions or security breaches of our systems or those of third-party providers, and (16) our success at managing the risk and uncertainties involved in the foregoing items.

In addition, statements about the potential effects of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope, duration and severity of the COVID-19 pandemic, actions taken by governmental authorities and other parties in response to the COVID-19 pandemic, the scale of distribution and public acceptance of any vaccines for COVID-19 and the effectiveness of such vaccines in stemming or stopping the spread of COVID-19, and the direct and indirect impact of the COVID-19 pandemic on our customers, clients, third parties and us.

These and other factors that could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. 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 Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 2020 2020 2020 2020 2019CONSOLIDATEDSTATEMENTS OF INCOMEInterest $ 255,163 $ 243,731 $ 252,010 $ 306,008 $ 337,757 incomeInterest 32,153 36,162 42,082 77,689 89,372 expenseNet interest 223,010 207,569 209,928 228,319 248,385 incomeProvision for 32,000 30,000 100,000 96,000 17,000 credit lossesNet interestincome after 191,010 177,569 109,928 132,319 231,385 provision forcredit lossesNon-interest 42,886 60,348 70,502 11,780 17,761 incomeNon-interest 150,886 165,741 222,352 165,417 168,187 expenseIncome/(loss)before income 83,010 72,176 (41,922 ) (21,318 ) 80,959 taxesIncome taxexpense/ 22,834 15,060 (7,606 ) (4,631 ) 16,539 (benefit)Net income/ 60,176 57,116 (34,316 ) (16,687 ) 64,420 (loss)Preferredstock 2,437 2,438 2,437 2,438 2,437 dividendsNet income/(loss)available to $ 57,739 $ 54,678 $ (36,753 ) $ (19,125 ) $ 61,983 commonstockholdersDilutedearnings/ $ 1.14 $ 1.08 $ (0.73 ) $ (0.38 ) $ 1.23 (loss) percommon shareDiluted common 50,794,421 50,573,073 50,416,331 50,474,802 50,461,723 sharesCONSOLIDATEDBALANCE SHEET DATATotal assets $ 37,726,096 $ 38,432,872 $ 36,613,127 $ 35,879,416 $ 32,548,069 LHI 15,351,451 15,789,958 16,552,203 16,857,579 16,476,413 LHI, mortgage 9,079,409 9,378,104 8,972,626 7,588,803 8,169,849 financeLHS 283,165 648,009 454,581 774,064 2,577,134 Liquidity 9,032,807 10,461,544 9,540,044 9,498,189 4,263,766 assets^(1)Investment 3,196,970 1,367,313 234,969 228,784 239,871 securitiesDemand 12,740,947 12,339,212 10,835,911 9,420,303 9,438,459 depositsTotal deposits 30,996,589 31,959,487 30,187,695 27,134,263 26,478,593 Other 3,111,751 2,908,183 2,895,790 5,195,267 2,541,766 borrowingsSubordinated 282,490 282,400 282,309 282,219 282,129 notesLong-term debt 113,406 113,406 113,406 113,406 113,406 Stockholders? 2,871,224 2,800,404 2,734,755 2,772,596 2,801,321 equity End of periodshares 50,470,450 50,455,552 50,435,672 50,407,778 50,337,741 outstandingBook value $ 53.92 $ 52.53 $ 51.25 $ 52.03 $ 52.67 Tangible book $ 53.57 $ 52.18 $ 50.89 $ 51.67 $ 52.31 value^(2)SELECTEDFINANCIAL RATIOSNet interest 2.32 % 2.22 % 2.30 % 2.78 % 2.95 %marginReturn on 0.61 % 0.59 % (0.36 ) (0.20 ) 0.74 %average assets % %Return on ) )average common 8.50 % 8.24 % (5.48 % (2.85 % 9.26 %equityNon-interestincome to 0.44 % 0.64 % 0.77 % 0.14 % 0.21 %averageearning assetsEfficiency 56.7 % 61.9 % 79.3 % 68.9 % 63.2 %ratio^(3)Non-interestexpense to 1.56 % 1.76 % 2.43 % 2.00 % 1.98 %averageearning assetsTangiblecommon equityto total 7.1 % 6.8 % 7.0 % 7.3 % 8.1 %tangibleassets^(4)Common Equity 9.4 % 9.1 % 8.8 % 9.3 % 8.9 %Tier 1Tier 1 capital 10.3 % 9.9 % 9.7 % 10.2 % 9.7 %Total capital 12.1 % 11.8 % 11.6 % 12.0 % 11.4 %Leverage 7.5 % 7.6 % 7.5 % 8.5 % 8.4 % (1) Liquidity assets include Federal funds sold and interest-bearing deposits in other banks.(2) Stockholders? equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.(3) Non-interest expense divided by the sum of net interest income and non-interest income. Stockholders? equity excluding preferred stock and accumulated other(4) comprehensive income, less goodwill and intangibles, divided by total assets, less accumulated other comprehensive income and goodwill and intangibles.

TEXAS CAPITAL BANCSHARES, INC.CONSOLIDATED BALANCE SHEETS (UNAUDITED)(dollars in thousands) December 31, December 31, % 2020 2019 ChangeAssets Cash and due from banks $ 173,573 $ 161,817 7 %Interest-bearing deposits 9,032,807 4,233,766 113 %Federal funds sold and securities ? 30,000 (100 )purchased under resale agreements %Securities, available-for-sale 3,196,970 239,871 1,233 %LHS ($239.1 million and $2,571.3 )million at December 31, 2020 and 283,165 2,577,134 (89 %2019, respectively, at fair value)LHI, mortgage finance 9,079,409 8,169,849 11 %LHI (net of unearned income) 15,351,451 16,476,413 (7 ) %Less: Allowance for credit losses on 254,615 195,047 31 %loansLHI, net 24,176,245 24,451,215 (1 ) %Mortgage servicing rights, net 105,424 64,904 62 %Premises and equipment, net 24,546 31,212 (21 ) %Accrued interest receivable and other 715,699 740,051 (3 )assets %Goodwill and intangibles, net 17,667 18,099 (2 ) %Total assets $ 37,726,096 $ 32,548,069 16 % Liabilities and Stockholders? Equity Liabilities: Deposits: Non-interest bearing $ 12,740,947 $ 9,438,459 35 %Interest bearing 18,255,642 17,040,134 7 %Total deposits 30,996,589 26,478,593 17 % Accrued interest payable 11,150 12,760 (13 ) %Other liabilities 339,486 318,094 7 %Federal funds purchased and 111,751 141,766 (21 )repurchase agreements %Other borrowings 3,000,000 2,400,000 25 %Subordinated notes, net 282,490 282,129 ? %Trust preferred subordinated 113,406 113,406 ? %debenturesTotal liabilities 34,854,872 29,746,748 17 % Stockholders? equity: Preferred stock, $.01 par value, $1,000 liquidation value:Authorized shares - 10,000,000 Issued shares - 6,000,000 shares 150,000 150,000 ? %issued at December 31, 2020 and 2019Common stock, $.01 par value: Authorized shares - 100,000,000 Issued shares - 50,470,867 and50,338,158 at December 31, 2020 and 504 503 ? %2019, respectivelyAdditional paid-in capital 991,898 978,205 1 %Retained earnings 1,713,056 1,663,671 3 %Treasury stock (shares at cost: 417 (8 ) (8 ) ? %at December 31, 2020 and 2019)Accumulated other comprehensive 15,774 8,950 N/M income, net of taxesTotal stockholders? equity 2,871,224 2,801,321 2 %Total liabilities and stockholders? $ 37,726,096 $ 32,548,069 16 %equity

TEXAS CAPITAL BANCSHARES, INC.CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(dollars in thousands except per share data) Three Months Ended December Twelve Months Ended December 31, 31, 2020 2019 2020 2019Interest income Interest and fees on $ 242,776 $ 312,147 $ 1,011,175 $ 1,284,036 loansInvestment securities 9,594 2,618 17,475 8,654 Federal funds soldand securities 1 439 693 1,529 purchased underresale agreementsInterest-bearingdeposits in other 2,792 22,553 27,569 71,093 banksTotal interest income 255,163 337,757 1,056,912 1,365,312 Interest expense Deposits 23,819 70,987 146,117 293,537 Federal funds 110 1,319 1,083 11,872 purchasedOther borrowings 3,407 11,712 20,923 58,393 Subordinated notes 4,191 4,191 16,764 16,764 Trust preferredsubordinated 626 1,163 3,199 5,026 debenturesTotal interest 32,153 89,372 188,086 385,592 expenseNet interest income 223,010 248,385 868,826 979,720 Provision for credit 32,000 17,000 258,000 75,000 lossesNet interest incomeafter provision for 191,010 231,385 610,826 904,720 credit lossesNon-interest income Service charges on 3,004 2,785 11,620 11,320 deposit accountsWealth management and 2,681 2,342 9,998 8,810 trust fee incomeBrokered loan fees 12,610 8,645 46,423 29,738 Servicing income 8,834 4,030 27,029 13,439 Swap fees 473 1,559 5,182 4,387 Net gain/(loss) on 6,761 (7,757 ) 58,026 (20,259 )sale of LHSOther 8,523 6,157 27,238 45,005 Total non-interest 42,886 17,761 185,516 92,440 incomeNon-interest expense Salaries and employee 78,449 90,248 340,529 328,483 benefitsNet occupancy expense 8,373 9,075 34,955 32,989 Marketing 3,435 12,807 23,581 53,355 Legal and 12,129 21,032 52,132 52,460 professionalCommunications and 15,405 13,801 103,054 44,826 technologyFDIC insurance 6,592 5,613 25,955 20,093 assessmentServicing-related 15,867 2,960 64,625 22,573 expensesMerger-related ? 1,370 17,756 1,370 expensesOther 10,636 11,281 41,809 44,701 Total non-interest 150,886 168,187 704,396 600,850 expenseIncome before income 83,010 80,959 91,946 396,310 taxesIncome tax expense 22,834 16,539 25,657 84,295 Net income 60,176 64,420 66,289 312,015 Preferred stock 2,437 2,437 9,750 9,750 dividendsNet income availableto common $ 57,739 $ 61,983 $ 56,539 $ 302,265 stockholders Basic earnings per $ 1.14 $ 1.23 $ 1.12 $ 6.01 common shareDiluted earnings per $ 1.14 $ 1.23 $ 1.12 $ 5.99 common share

TEXAS CAPITAL BANCSHARES, INC.SUMMARY OF CREDIT LOSS EXPERIENCE(dollars in thousands) 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 2020 2020 2020 2020 2019Allowance for credit losses on loans:Beginning balance $ 290,165 $ 264,722 $ 240,958 $ 195,047 $ 190,138 Impact of CECL ? ? ? 8,585 ? adoptionLoans charged-off: Commercial 37,984 2,436 12,287 20,653 13,968 Energy 33,283 141 62,368 37,730 797 Real estate 180 ? ? ? ? Total charge-offs 71,447 2,577 74,655 58,383 14,765 Recoveries: Commercial 394 113 513 257 1,754 Energy 5,696 880 ? 423 209 Total recoveries 6,090 993 513 680 1,963 Net charge-offs 65,357 1,584 74,142 57,703 12,802 Provision for credit 29,807 27,027 97,906 95,029 17,711 losses on loansEnding balance $ 254,615 $ 290,165 $ 264,722 $ 240,958 $ 195,047 Allowance foroff-balance sheet credit losses:Beginning balance $ 15,241 $ 12,268 $ 10,174 $ 8,640 $ 9,351 Impact of CECL ? ? ? 563 ? adoptionProvision foroff-balance sheet 2,193 2,973 2,094 971 (711 )credit lossesEnding balance $ 17,434 $ 15,241 $ 12,268 $ 10,174 $ 8,640 Total allowance for $ 272,049 $ 305,406 $ 276,990 $ 251,132 $ 203,687 credit losses Total provision for $ 32,000 $ 30,000 $ 100,000 $ 96,000 $ 17,000 credit losses Allowance for creditlosses on loans to 1.04 % 1.15 % 1.04 % 0.99 % 0.79 %LHIAllowance for creditlosses on loans to 1.01 % 1.14 % 1.03 % 1.02 % 0.79 %average LHINet charge-offs to 1.03 % 0.02 % 1.16 % 0.98 % 0.21 %average LHI^(1)Net charge-offs toaverage LHI for last 0.80 % 0.59 % 0.73 % 0.53 % 0.31 %twelve months^(1)Total provision forcredit losses to 0.51 % 0.47 % 1.57 % 1.63 % 0.27 %average LHI^(1)Total allowance for 1.11 % 1.21 % 1.09 % 1.03 % 0.83 %credit losses to LHI (1) Interim period ratios are annualized.

TEXAS CAPITALBANCSHARES, INC.SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS(dollars in thousands) 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 2020 2020 2020 2020 2019

Non-performing assets (NPAs):

Non-accrual $ 121,989 $ 161,946 $ 174,031 $ 219,165 $ 225,384 loans

Other real ? ? ? ? ? estate owned(OREO) $ 121,989 $ 161,946 $ 174,031 $ 219,165 $ 225,384 Total LHI NPAs

Non-accrual 0.50 % 0.64 % 0.68 % 0.90 % 0.91 %loans to LHI

Total LHI NPAs 0.50 % 0.64 % 0.68 % 0.90 % 0.91 %to LHI plusOREO

Total LHI NPAs 0.33 % 0.43 % 0.49 % 0.63 % 0.71 %to earningassets

Allowance forcredit losses 2.1x 1.8x 1.5x 1.1x .9x on loans tonon-accrualloans

LHI past due90 days and $ 12,541 $ 15,896 $ 21,079 $ 21,274 $ 17,584 still accruing^(1)

LHI past due 0.05 % 0.06 % 0.08 % 0.09 % 0.07 %90 days to LHI

LHS $ 6,966 $ ? $ ? $ ? $ ? non-accrual^(2)

LHS past due90 days and $ 16,667 $ 15,631 $ 10,152 $ 9,014 $ 8,207 still accruing^(3) At December31, 2020, loans past due 90 days and still accruing includes premium finance loans of $6.4 million. These loans are primarily secured(1) by obligations of insurance carriers to refund premiums on canceled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date. Includes one non-accrual loan previously reported in loans HFI that was(2) transferred to loans HFS as of December 31, 2020 and subsequently sold at carrying value. Includes loans guaranteed by U.S. government agencies that were repurchased out of Ginnie Mae securities. Loans are recorded as LHS and carried at fair value on the balance sheet. Interest on these past due(3) loans accrues at the debenture rate guaranteed by the U.S. government. Also includes loans that, pursuant to Ginnie Mae servicing guidelines, we have the unilateral right, but not obligation, to repurchase and thus must record as LHS on our balance sheet regardless of whether the repurchase option has been exercised.

TEXAS CAPITAL BANCSHARES, INC.CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(dollars in thousands) 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 2020 2020 2020 2020 2019Interest income Interest and fees $ 242,776 $ 237,179 $ 247,595 $ 283,625 $ 312,147 on loansInvestment 9,594 3,674 2,024 2,183 2,618 securitiesFederal fundssold andsecurities 1 1 77 614 439 purchased underresale agreementsInterest-bearingdeposits in other 2,792 2,877 2,314 19,586 22,553 banksTotal interest 255,163 243,731 252,010 306,008 337,757 incomeInterest expense Deposits 23,819 27,830 32,294 62,174 70,987 Federal funds 110 128 176 669 1,319 purchasedOther borrowings 3,407 3,365 4,569 9,582 11,712 Subordinated 4,191 4,191 4,191 4,191 4,191 notesTrust preferredsubordinated 626 648 852 1,073 1,163 debenturesTotal interest 32,153 36,162 42,082 77,689 89,372 expenseNet interest 223,010 207,569 209,928 228,319 248,385 incomeProvision for 32,000 30,000 100,000 96,000 17,000 credit lossesNet interestincome after 191,010 177,569 109,928 132,319 231,385 provision forcredit lossesNon-interest incomeService chargeson deposit 3,004 2,864 2,459 3,293 2,785 accountsWealth managementand trust fee 2,681 2,502 2,348 2,467 2,342 incomeBrokered loan 12,610 15,034 10,764 8,015 8,645 feesServicing income 8,834 7,329 6,120 4,746 4,030 Swap fees 473 484 1,468 2,757 1,559 Net gain/(loss) 6,761 25,242 39,023 (13,000 ) (7,757 )on sale of LHSOther 8,523 6,893 8,320 3,502 6,157 Totalnon-interest 42,886 60,348 70,502 11,780 17,761 incomeNon-interest expenseSalaries and 78,449 84,096 100,791 77,193 90,248 employee benefitsNet occupancy 8,373 8,736 9,134 8,712 9,075 expenseMarketing 3,435 3,636 7,988 8,522 12,807 Legal and 12,129 11,207 11,330 17,466 21,032 professionalCommunications 15,405 31,098 42,760 13,791 13,801 and technologyFDIC insurance 6,592 6,374 7,140 5,849 5,613 assessmentServicing-related 15,867 12,287 20,117 16,354 2,960 expensesMerger-related ? ? 10,486 7,270 1,370 expensesOther 10,636 8,307 12,606 10,260 11,281 Totalnon-interest 150,886 165,741 222,352 165,417 168,187 expenseIncome/(loss)before income 83,010 72,176 (41,922 ) (21,318 ) 80,959 taxesIncome tax 22,834 15,060 (7,606 ) (4,631 ) 16,539 expense/(benefit)Net income/(loss) 60,176 57,116 (34,316 ) (16,687 ) 64,420 Preferred stock 2,437 2,438 2,437 2,438 2,437 dividendsNet income/(loss)available to $ 57,739 $ 54,678 $ (36,753 ) $ (19,125 ) $ 61,983 commonshareholders

TEXAS CAPITAL BANCSHARES, INC.CONSOLIDATED DAILY AVERAGE BALANCES, AVERAGE YIELDS AND RATES - UNAUDITED(dollars in thousands)

4th Quarter 2020 3rd Quarter 2020 2nd Quarter 2020 1st Quarter 2020 4th Quarter 2019 Average Revenue/ Yield/ Average Revenue/ Yield/ Average Revenue/ Yield/ Average Revenue/ Yield/ Average Revenue/ Yield/ Balance Expense Rate Balance Expense Rate Balance Expense Rate Balance Expense Rate Balance Expense RateAssets Investmentsecurities $ 2,137,481 $ 7,748 1.44 % $ 525,149 $ 1,905 1.44 % $ 38,829 $ 185 1.92 % $ 42,799 $ 274 2.57 % $ 40,904 $ 693 6.72 %-TaxableInvestmentsecurities- 200,781 2,337 4.63 % 190,797 2,239 4.67 % 195,806 2,327 4.78 % 195,578 2,417 4.97 % 197,591 2,437 4.89 %Non-taxable^(2)Federalfundssoldandsecurities 1,709 1 0.13 % 12,051 1 0.04 % 245,434 77 0.13 % 199,727 614 1.24 % 102,320 439 1.70 %purchasedunderresaleagreementsInterest-bearingdepositsin 10,808,548 2,792 0.10 % 11,028,962 2,877 0.10 % 10,521,240 2,314 0.09 % 6,225,948 19,586 1.27 % 5,387,000 22,553 1.66 %otherbanksLHS, atfair 410,637 2,475 2.40 % 543,606 3,867 2.83 % 380,624 2,547 2.69 % 3,136,381 27,480 3.52 % 3,567,836 33,411 3.72 %valueLHI,mortgage 9,550,119 78,906 3.29 % 9,061,984 76,464 3.36 % 8,676,521 74,518 3.45 % 7,054,682 55,324 3.15 % 7,870,888 63,114 3.18 %financeloansLHI^(1) 15,620,410 161,750 4.12 % 16,286,036 157,230 3.84 % 17,015,041 170,970 4.04 % 16,598,775 201,781 4.89 % 16,667,259 216,686 5.16 %(2)Lessallowanceforcredit 290,189 ? ? 264,769 ? ? 236,823 ? ? 201,837 ? ? 189,353 ? ? lossesonloansLHI,net of 24,880,340 240,656 3.85 % 25,083,251 233,694 3.71 % 25,454,739 245,488 3.88 % 23,451,620 257,105 4.41 % 24,348,794 279,800 4.56 %allowanceTotalearning 38,439,496 256,009 2.65 % 37,383,816 244,583 2.60 % 36,836,672 252,938 2.76 % 33,252,053 307,476 3.72 % 33,644,445 339,333 4.00 %assetsCashand 1,031,195 1,037,760 1,075,864 976,520 974,866 otherassetsTotal $ 39,470,691 $ 38,421,576 $ 37,912,536 $ 34,228,573 $ 34,619,311 assetsLiabilitiesand Stockholders?EquityTransaction $ 4,384,493 $ 6,604 0.60 % $ 4,275,574 $ 6,652 0.62 % $ 3,923,966 $ 5,998 0.61 % $ 3,773,067 $ 13,582 1.45 % $ 3,817,294 $ 16,428 1.71 %depositsSavings 12,982,189 12,671 0.39 % 12,786,719 12,808 0.40 % 12,537,467 13,510 0.43 % 11,069,429 35,961 1.31 % 11,111,326 40,603 1.45 %depositsTime 2,355,199 4,544 0.77 % 2,844,083 8,370 1.17 % 3,434,388 12,786 1.50 % 2,842,535 12,631 1.79 % 2,453,655 13,956 2.26 %depositsTotalinterest 19,721,881 23,819 0.48 % 19,906,376 27,830 0.56 % 19,895,821 32,294 0.65 % 17,685,031 62,174 1.41 % 17,382,275 70,987 1.62 %bearingdepositsOther 3,022,077 3,517 0.46 % 2,811,435 3,493 0.49 % 3,612,263 4,745 0.53 % 3,020,255 10,251 1.37 % 2,822,465 13,031 1.83 %borrowingsSubordinated 282,435 4,191 5.90 % 282,343 4,191 5.91 % 282,252 4,191 5.97 % 282,165 4,191 5.97 % 282,074 4,191 5.89 %notesTrustpreferred 113,406 626 2.20 % 113,406 648 2.28 % 113,406 852 3.02 % 113,406 1,073 3.80 % 113,406 1,163 4.07 %subordinateddebenturesTotalinterest 23,139,799 32,153 0.55 % 23,113,560 36,162 0.62 % 23,903,742 42,082 0.71 % 21,100,857 77,689 1.48 % 20,600,220 89,372 1.72 %bearingliabilitiesDemand 13,174,114 12,202,065 10,865,896 10,003,495 10,933,887 depositsOther 303,480 314,500 293,698 270,868 278,964 liabilitiesStockholders? 2,853,298 2,791,451 2,849,200 2,853,353 2,806,240 equityTotalliabilitiesand $ 39,470,691 $ 38,421,576 $ 37,912,536 $ 34,228,573 $ 34,619,311 stockholders?equityNetinterest $ 223,856 $ 208,421 $ 210,856 $ 229,787 $ 249,961 income^(2)Netinterest 2.32 % 2.22 % 2.30 % 2.78 % 2.95 %margin (1) The loan averages include loans on which the accrual of interest has been discontinued and are stated net of unearned income.(2) Taxable equivalent rates used where applicable.

INVESTOR CONTACTJulie Anderson, 214.932.6773julie.anderson@texascapitalbank.com

MEDIA CONTACTShannon Wherry, 469.399.8527shannon.wherry@texascapitalbank.com