GlobeNewswire Inc | Oct 20, 2021 04:00PM EDT

October 20, 2021

DALLAS, Oct. 20, 2021 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the third quarter of 2021.

I am very pleased by the important actions taken this quarter, said Rob C. Holmes, President and CEO. We have communicated a transformative vision for the future of our company which we believe will lead to higher quality, more sustainable earnings for our shareholders. I am encouraged by the support we have received thus far, and with a vastly improved balance sheet, a strengthening loan portfolio, and a highly motivated management team and employee base, we are focused on what needs to be done to become the flagship financial services firm headquartered in Texas.

-- Net income of $43.4 million ($0.76 per diluted share) reported for the third quarter of 2021, a decrease of $30.1 million on a linked quarter basis and a decrease of $13.7 million from the third quarter of 2020. -- Provision for credit losses of $5.0 million for the third quarter of 2021, compared to a negative provision of $19.0 million for the second quarter of 2021 and a provision of $30.0 million for the third quarter of 2020. -- During the third quarter of 2021, we recorded a $12.0 million write-off of certain software assets to reposition our capitalized technology investment to align with the long-term strategy as announced by management in the third quarter of 2021. -- Loans held for investment (LHI), excluding mortgage finance loans, increased $52.8 million (less than 1%) on a linked quarter basis and decreased $568.6 million (4)% from the third quarter of 2020. -- LHI, mortgage finance loans decreased 3% on a linked quarter basis and decreased 9% from the third quarter of 2020. -- Demand deposits increased 5% and total deposits increased 3% on a linked quarter basis, and increased 21% and decreased 7%, respectively, from the third quarter of 2020.

FINANCIAL SUMMARY

(dollars and shares in thousands) Q3 2021 Q3 2020 % ChangeQUARTERLY OPERATING RESULTS Net income $ 43,390 $ 57,116 (24 ) %Net income available to common $ 39,078 $ 54,678 (29 ) %stockholdersDiluted earnings per common share $ 0.76 $ 1.08 (30 ) %Diluted common shares 51,140 50,573 1 %Return on average assets 0.47 % 0.59 % Return on average common equity 5.41 % 8.24 % BALANCE SHEET Loans held for sale (?LHS?) $ 9,660 $ 648,009 (99 ) %LHI, mortgage finance 8,528,313 9,378,104 (9 ) %LHI 15,221,404 15,789,958 (4 ) %Total LHI 23,749,717 25,168,062 (6 ) %Total assets 36,404,320 38,432,872 (5 ) %Demand deposits 14,970,462 12,339,212 21 %Total deposits 29,813,668 31,959,487 (7 ) %Stockholders? equity 3,147,752 2,800,404 12 %

DETAILED FINANCIALS

For the third quarter of 2021, net income was $43.4 million, compared to $73.5 million for the second quarter of 2021 and $57.1 million for the third quarter of 2020. On a fully diluted basis, earnings per common share were $0.76 for the quarter ended September30, 2021, compared to $1.31 for the quarter ended June 30, 2021 and $1.08 for the quarter ended September 30, 2020.

We recorded a $5.0 million provision for credit losses for the third quarter of 2021, compared to a $19.0 million negative provision for credit losses for the second quarter of 2021 and a $30.0 million provision for credit losses for the third quarter of 2020. The $5.0 million provision for credit losses recorded in the third quarter of 2021 resulted from our view of the economic outlook remaining consistent as compared to the prior quarter and an increase in LHI, excluding mortgage finance. We recorded $3.1 million in net charge-offs during the third quarter of 2021, compared to $2.4 million during the second quarter of 2021 and $1.6 million during the third quarter of 2020. Criticized loans totaled $728.9 million at September 30, 2021, compared to $891.6 million at June 30, 2021 and $1.1 billion at September 30, 2020.

Non-performing assets (NPAs) totaled $87.5 million at September30, 2021, compared to $86.6 million at June 30, 2021 and $161.9 million at September30, 2020. The ratio of total LHI NPAs to total LHI plus other real estate owned for the third quarter of 2021 was 0.37%, compared to 0.36% for the second quarter of 2021 and 0.64% for the third quarter of 2020.

Net interest income was $194.1 million for the third quarter of 2021, compared to $197.0 million for the second quarter of 2021 and $207.6 million for the third quarter of 2020. The linked-quarter decrease in net interest income was primarily driven by a decline in loan fees, partially offset by a decrease in average interest-bearing deposits. The year-over-year decrease was primarily due to declines in total average loans and earning asset yields, partially offset by increases in average investment securities and loan fees, as well as declining cost of funds. Net interest margin for the third quarter of 2021 was 2.15%, an increase of 5 basis points from the second quarter of 2021 and a decrease of 7 basis points from the third quarter of 2020. LHI yields, excluding mortgage finance loans, decreased 18 basis points from the second quarter of 2021, and decreased 1 basis point compared to the third quarter of 2020. LHI, mortgage finance yields for the third quarter of 2021 decreased 16 basis points compared to the second quarter of 2021, and decreased 43 basis points compared to the third quarter of 2020. Additionally, total cost of deposits for the third quarter of 2021 decreased 1 basis point to 0.19% compared to 0.20% for the second quarter of 2021, and decreased 15 basis points from 0.34% for the third quarter of 2020.

Non-interest income for the third quarter of 2021 decreased $8.9 million, or 30%, compared to the second quarter of 2021, and decreased $39.1 million, or 65%, compared to the third quarter of 2020. The linked quarter decrease was primarily related to decreases in servicing income, due to the second quarter sale of our mortgage servicing rights (MSR) portfolio, and other non-interest income. The year-over-year decrease was primarily related to decreases in net gain/(loss) on sale of LHS, brokered loan fees and servicing income, all resulting from the second quarter 2021 sale of our MSR portfolio and transition of the mortgage correspondent aggregation MCA program to a third-party.

Non-interest expense for the third quarter of 2021 increased $3.9 million, or 3 percent, compared to the second quarter of 2021, and decreased $12.8 million, or 8%, compared to the third quarter of 2020. The linked quarter increase was primarily due to an increase in communications and technology expense, partially offset by a decrease in servicing-related expenses due to the second quarter sale of our MSR portfolio. The year-over-year decrease was primarily due to decreases in communications and technology expense and servicing-related expenses, partially offset by an increase in salaries and employee benefits. Included in communication and technology expense for the third quarter of 2021 was a $12.0 million write-off of certain software assets as discussed above, compared to none in the second quarter and $15.4 million in the third quarter of 2020.

All regulatory ratios continue to be in excess of well-capitalized requirements as of September30, 2021. Our CET 1, tier 1 capital, total capital and leverage ratios were 10.7%, 12.2%, 14.9% and 9.0%, respectively, at September30, 2021, compared to 10.5%, 12.1%, 14.8% and 8.4%, respectively, at June 30, 2021. At September30, 2021, our ratio of tangible common equity to total tangible assets was 7.8% compared to 7.9% at June 30, 2021.

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 (the 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 and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, our 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 expect, estimate, anticipate, plan, may, will, forecast, could, should, projects, targeted, continue, become, intend and similar expressions.

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 managements expectations and assumptions at the time the statements are made and are not guarantees of future results. 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 and related material risks and uncertainties 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 as well as the continued impact of the COVID-19 pandemic (and any other pandemic, epidemic or health-related crisis), (3) technological changes, including the increased focus on information technology and cybersecurity and our ability to manage such information systems and the effects of cyber-incidents (including failures, disruptions or security breaches) or those of third-party providers, (4) changes in interest rates and changes in the value of commercial and residential real estate securing our loans, (5) adverse economic or market conditions that could affect the credit quality of our loan portfolio or our operating performance, (6) expectations regarding rates of default and credit losses and the appropriateness of our allowance for credit losses and provision for credit losses, (7) unexpected market conditions, regulatory changes or changes in our credit ratings that could, among other things, cause access to capital market transactions and other sources of funding to become more difficult, (8) the inadequacy of our available funds to meet our obligations, (9) the failure to effectively balance our funding sources with cash demands by depositors and borrowers, (10) material failures of our accounting estimates and risk management processes based on management judgment, (11) failure of our risk management strategies and procedures, including failure or circumvention of our controls, (12) the failure to effectively manage risk, (13) uncertainty regarding alternatives to the London Interbank Offered Rate and our ability to successfully implement any new interest rate benchmarks, (14) the impact of changing regulatory requirements and legislative changes on our business, (15) the failure to successfully execute our business strategy, including completing planned merger, acquisition or sale transactions, (16) the failure to identify, attract and retain key personnel or the loss of such personnel, (17) increased or more effective competition from banks or other financial service providers in our markets, (18) structural changes in the markets for origination, sale and servicing of residential mortgages, (19) certainty in the pricing of mortgage loans that we purchase, and later sell or securitize, (20) volatility in the market price of our common stock, (21) credit risk resulting from our exposure to counterparties, (22) an increase in the incidence or severity of fraud, illegal payments, security breaches and other illegal acts impacting us, (23) the failure to maintain adequate regulatory capital to support our business, (24) environmental liability or other environmental, social or governance factors that may materially negatively impact the company, (25) severe weather, natural disasters, acts of war or terrorism and other external events and (26) our success at managing the risk and uncertainties involved in the foregoing factors.

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) 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2021 2021 2021 2020 2020CONSOLIDATEDSTATEMENTS OF INCOMEInterest $ 220,148 $ 224,490 $ 228,412 $ 255,163 $ 243,731 incomeInterest 26,053 27,496 28,339 32,153 36,162 expenseNet interest 194,095 196,994 200,073 223,010 207,569 incomeProvision for 5,000 (19,000 ) (6,000 ) 32,000 30,000 credit lossesNet interestincome after 189,095 215,994 206,073 191,010 177,569 provision forcredit lossesNon-interest 21,220 30,102 39,092 42,863 60,348 incomeNon-interest 152,987 149,060 150,316 150,863 165,741 expenseIncome before 57,328 97,036 94,849 83,010 72,176 income taxesIncome tax 13,938 23,555 22,911 22,834 15,060 expenseNet income 43,390 73,481 71,938 60,176 57,116 Preferredstock 4,312 6,317 3,779 2,437 2,438 dividendsNet incomeavailable to $ 39,078 $ 67,164 $ 68,159 $ 57,739 $ 54,678 commonstockholdersDilutedearnings per $ 0.76 $ 1.31 $ 1.33 $ 1.14 $ 1.08 common shareDiluted 51,139,555 51,093,660 51,069,511 50,794,421 50,573,073 common sharesCONSOLIDATEDBALANCE SHEET DATATotal assets $ 36,404,320 $ 35,228,542 $ 40,054,433 $ 37,726,096 $ 38,432,872 LHI 15,221,404 15,168,565 15,399,174 15,351,451 15,789,958 LHI, mortgage 8,528,313 8,772,799 9,009,081 9,079,409 9,378,104 financeLHS 9,660 63,747 176,286 283,165 648,009 Liquidity 8,317,926 6,768,650 11,212,276 9,032,807 10,461,544 assets^(1)Investment 3,663,874 3,798,275 3,443,058 3,196,970 1,367,313 securitiesDemand 14,970,462 14,228,038 15,174,642 12,740,947 12,339,212 depositsTotal 29,813,668 28,839,563 33,391,970 30,996,589 31,959,487 depositsOther 2,203,470 2,014,481 2,515,587 3,111,751 2,908,183 borrowingsLong-term 928,062 927,386 664,968 395,896 395,806 debtStockholders? 3,147,752 3,114,957 3,159,482 2,871,224 2,800,404 equity End of periodshares 50,605,626 50,592,201 50,557,767 50,470,450 50,455,552 outstandingBook value $ 56.27 $ 55.64 $ 53.59 $ 53.92 $ 52.53 Tangible book $ 55.93 $ 55.29 $ 53.24 $ 53.57 $ 52.18 value^(2)SELECTEDFINANCIAL RATIOSNet interest 2.15 % 2.10 % 2.09 % 2.32 % 2.22 %marginReturn onaverage 0.47 % 0.76 % 0.73 % 0.61 % 0.59 %assetsReturn onaverage 5.41 % 9.74 % 10.08 % 8.50 % 8.24 %common equityNon-interestincome toaverage 0.23 % 0.32 % 0.41 % 0.44 % 0.64 %earningassetsEfficiency 71.1 % 65.6 % 62.9 % 56.7 % 61.9 %ratio^(3)Non-interestexpense toaverage 1.69 % 1.59 % 1.57 % 1.56 % 1.76 %earningassetsTangiblecommon equityto total 7.8 % 7.9 % 6.7 % 7.2 % 6.9 %tangibleassets^(4)Common Equity 10.7 % 10.5 % 10.2 % 9.4 % 9.1 %Tier 1Tier 1 12.2 % 12.1 % 12.2 % 10.3 % 9.9 %capitalTotal capital 14.9 % 14.8 % 14.0 % 12.1 % 11.8 %Leverage 9.0 % 8.4 % 8.3 % 7.5 % 7.6 %

(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.(4) 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, September 30, % 2021 2020 ChangeAssets Cash and due from banks $ 217,125 $ 185,242 17 %Interest-bearing deposits 8,317,926 10,461,544 (20 ) %Securities, available-for-sale 3,663,874 1,367,313 N/M LHS ($8.4 million and $639.0 millionat September 30, 2021 and 2020, 9,660 648,009 (99 ) %respectively, at fair value)LHI, mortgage finance 8,528,313 9,378,104 (9 ) %LHI (net of unearned income) 15,221,404 15,789,958 (4 ) %Less: Allowance for credit losses on 221,957 290,165 (24 ) %loansLHI, net 23,527,760 24,877,897 (5 ) %Mortgage servicing rights, net 1,158 95,323 (99 ) %Premises and equipment, net 21,119 26,653 (21 ) %Accrued interest receivable and other 628,335 753,123 (17 ) %assetsGoodwill and intangibles, net 17,363 17,768 (2 ) %Total assets $ 36,404,320 $ 38,432,872 (5 ) % Liabilities and Stockholders? Equity Liabilities: Deposits: Non-interest bearing $ 14,970,462 $ 12,339,212 21 %Interest bearing 14,843,206 19,620,275 (24 ) %Total deposits 29,813,668 31,959,487 (7 ) % Accrued interest payable 8,920 14,674 (39 ) %Other liabilities 302,448 354,318 (15 ) %Federal funds purchased and 3,470 208,183 (98 ) %repurchase agreementsOther borrowings 2,200,000 2,700,000 (19 ) %Long-term debt 928,062 395,806 134 %Total liabilities 33,256,568 35,632,468 (7 ) % Stockholders? equity: Preferred stock, $.01 par value, $1,000 liquidation value:Authorized shares - 10,000,000 Issued shares - 300,000 and 6,000,000shares issued at September30, 2021 300,000 150,000 100 %and 2020, respectivelyCommon stock, $.01 par value: Authorized shares - 100,000,000 Issued shares - 50,606,043 and50,455,969 at September30, 2021 and 506 504 ? %2020, respectivelyAdditional paid-in capital 1,000,509 987,754 1 %Retained earnings 1,887,457 1,655,317 14 %Treasury stock (shares at cost: 417 (8 ) (8 ) ? %at September30, 2021 and 2020)Accumulated other comprehensive (40,712 ) 6,837 N/M income/(loss), net of taxesTotal stockholders? equity 3,147,752 2,800,404 12 %Total liabilities and stockholders? $ 36,404,320 $ 38,432,872 (5 ) %equity

TEXAS CAPITAL BANCSHARES, INC.CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(dollars in thousands except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Interest income Interest and fees on loans $ 206,307 $ 237,179 $ 632,510 $ 768,399 Investment securities 10,235 3,674 31,040 7,881 Federal funds sold andsecurities purchased under ? 1 1 692 resale agreementsInterest-bearing deposits 3,606 2,877 9,499 24,777 in other banksTotal interest income 220,148 243,731 673,050 801,749 Interest expense Deposits 14,719 27,830 50,994 122,298 Federal funds purchased 5 128 131 973 Other borrowings 743 3,365 3,711 17,516 Long-term debt 10,586 4,839 27,052 15,146 Total interest expense 26,053 36,162 81,888 155,933 Net interest income 194,095 207,569 591,162 645,816 Provision for credit losses 5,000 30,000 (20,000 ) 226,000 Net interest income after 189,095 177,569 611,162 419,816 provision for credit lossesNon-interest income Service charges on deposit 4,622 2,864 13,972 8,616 accountsWealth management and trust 3,382 2,502 9,380 7,317 fee incomeBrokered loan fees 6,032 15,034 22,276 33,813 Servicing income 292 7,329 15,236 18,195 Swap fees 568 484 1,628 4,709 Net gain/(loss) on sale of (1,185 ) 25,242 1,317 51,265 LHSOther 7,509 6,893 26,605 18,698 Total non-interest income 21,220 60,348 90,414 142,613 Non-interest expense Salaries and employee 87,503 84,096 261,855 262,080 benefitsNet occupancy expense 8,324 8,736 24,463 26,582 Marketing 2,123 3,636 5,720 20,146 Legal and professional 11,055 11,207 28,479 40,003 Communications and 28,374 31,098 58,695 87,649 technologyFDIC insurance assessment 4,500 6,374 16,339 19,363 Servicing-related expenses 2,396 12,287 27,740 48,741 Merger-related expenses ? ? ? 17,756 Other 8,712 8,307 29,072 31,173 Total non-interest expense 152,987 165,741 452,363 553,493 Income before income taxes 57,328 72,176 249,213 8,936 Income tax expense 13,938 15,060 60,404 2,823 Net income 43,390 57,116 188,809 6,113 Preferred stock dividends 4,312 2,438 14,408 7,313 Net income/(loss) available $ 39,078 $ 54,678 $ 174,401 $ (1,200 )to common stockholders Basic earnings/(loss) per $ 0.77 $ 1.08 $ 3.45 $ (0.02 )common shareDiluted earnings/(loss) per $ 0.76 $ 1.08 $ 3.41 $ (0.02 )common share

TEXAS CAPITAL BANCSHARES, INC.SUMMARY OF CREDIT LOSS EXPERIENCE(dollars in thousands) 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2021 2021 2021 2020 2020Allowance forcredit losses on loans:Beginning $ 221,511 $ 242,484 $ 254,615 $ 290,165 $ 264,722 balanceLoans charged-off:Commercial 4,348 1,412 2,451 37,984 2,436 Energy ? 686 5,732 33,283 141 Real estate ? 1,192 ? 180 ? Total 4,348 3,290 8,183 71,447 2,577 charge-offsRecoveries: Commercial 1,104 308 1,050 394 113 Energy 42 609 715 5,696 880 Real estate 112 ? ? ? ? Total 1,258 917 1,765 6,090 993 recoveriesNet charge-offs 3,090 2,373 6,418 65,357 1,584 Provision forcredit losses 3,536 (18,600 ) (5,713 ) 29,807 27,027 on loansEnding balance $ 221,957 $ 221,511 $ 242,484 $ 254,615 $ 290,165 Allowance foroff-balance sheet creditlosses:Beginning $ 16,747 $ 17,147 $ 17,434 $ 15,241 $ 12,268 balanceProvision foroff-balance 1,464 (400 ) (287 ) 2,193 2,973 sheet creditlossesEnding balance $ 18,211 $ 16,747 $ 17,147 $ 17,434 $ 15,241 Total allowancefor credit $ 240,168 $ 238,258 $ 259,631 $ 272,049 $ 305,406 losses Total provisionfor credit $ 5,000 $ (19,000 ) $ (6,000 ) $ 32,000 $ 30,000 losses Allowance forcredit losses 0.93 % 0.93 % 0.99 % 1.04 % 1.15 %on loans to LHIAllowance forcredit losses 0.95 % 0.98 % 1.03 % 1.01 % 1.14 %on loans toaverage LHINet charge-offsto average LHI^ 0.05 % 0.04 % 0.11 % 1.03 % 0.02 %(1)Net charge-offsto average LHI 0.33 % 0.31 % 0.59 % 0.80 % 0.59 %for last twelvemonths^(1)Total provisionfor credit 0.09 % (0.34 ) % (0.10 ) % 0.51 % 0.47 %losses toaverage LHI^(1)Total allowancefor credit 1.01 % 1.00 % 1.06 % 1.11 % 1.21 %losses to LHI

(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 2021 2021 2021 2020 2020 Non-performing assets (NPAs):Non-accrual loans $ 87,532 $ 86,636 $ 97,730 $ 121,989 $ 161,946 Other real estate ? ? ? ? ? owned (OREO)Total LHI NPAs $ 87,532 $ 86,636 $ 97,730 $ 121,989 $ 161,946 Non-accrual loans 0.37 % 0.36 % 0.40 % 0.50 % 0.64 %to LHITotal LHI NPAs to 0.37 % 0.36 % 0.40 % 0.50 % 0.64 %LHI plus OREOTotal LHI NPAs to 0.25 % 0.25 % 0.25 % 0.33 % 0.43 %earning assetsAllowance forcredit losses on 2.5x 2.6x 2.5x 2.1x 1.8x loans tonon-accrual loans LHI past due 90days and still $ 3,405 $ 7,671 $ 6,187 $ 12,541 $ 15,896 accruing^(1)LHI past due 90 0.01 % 0.03 % 0.03 % 0.05 % 0.06 %days to LHILHS non-accrual^ $ ? $ ? $ ? $ 6,966 $ ? (2)LHS past due 90days and still $ 3,808 $ 2,695 $ 16,359 $ 16,667 $ 15,631 accruing^(3)

At September30, 2021, loans past due 90 days and still accruing included premium finance loans of $2.3 million. These loans are primarily secured by(1) 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 loans accrues at the(3) debenture rate guaranteed by the U.S. government. The first quarter of 2021 and fourth and third quarters of 2020 also include 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) 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2021 2021 2021 2020 2020Interest income Interest and fees $ 206,307 $ 210,611 $ 215,592 $ 242,776 $ 237,179on loansInvestment 10,235 10,918 9,887 9,594 3,674securitiesFederal fundssold andsecurities ? ? 1 1 1purchased underresale agreementsInterest-bearingdeposits in other 3,606 2,961 2,932 2,792 2,877banksTotal interest 220,148 224,490 228,412 255,163 243,731incomeInterest expense Deposits 14,719 16,271 20,004 23,819 27,830Federal funds 5 51 75 110 128purchasedOther borrowings 743 451 2,517 3,407 3,365Long-term debt 10,586 10,723 5,743 4,817 4,839Total interest 26,053 27,496 28,339 32,153 36,162expenseNet interest 194,095 196,994 200,073 223,010 207,569incomeProvision for 5,000 (19,000 ) (6,000 ) 32,000 30,000credit lossesNet interestincome after 189,095 215,994 206,073 191,010 177,569provision forcredit lossesNon-interest incomeService chargeson deposit 4,622 4,634 4,716 3,004 2,864accountsWealth managementand trust fee 3,382 3,143 2,855 2,681 2,502incomeBrokered loan 6,032 6,933 9,311 12,610 15,034feesServicing income 292 5,935 9,009 8,834 7,329Swap fees 568 534 526 473 484Net gain/(loss) (1,185 ) (3,070 ) 5,572 6,761 25,242on sale of LHSOther 7,509 11,993 7,103 8,500 6,893Totalnon-interest 21,220 30,102 39,092 42,863 60,348incomeNon-interest expenseSalaries and 87,503 86,830 87,522 78,449 84,096employee benefitsNet occupancy 8,324 7,865 8,274 8,373 8,736expenseMarketing 2,123 1,900 1,697 3,435 3,636Legal and 11,055 9,147 8,277 12,129 11,207professionalCommunications 28,374 14,352 15,969 15,405 31,098and technologyFDIC insurance 4,500 5,226 6,613 6,592 6,374assessmentServicing-related 2,396 12,355 12,989 15,844 12,287expensesOther 8,712 11,385 8,975 10,636 8,307Totalnon-interest 152,987 149,060 150,316 150,863 165,741expenseIncome before 57,328 97,036 94,849 83,010 72,176income taxesIncome tax 13,938 23,555 22,911 22,834 15,060expenseNet income 43,390 73,481 71,938 60,176 57,116Preferred stock 4,312 6,317 3,779 2,437 2,438dividendsNet incomeavailable to $ 39,078 $ 67,164 $ 68,159 $ 57,739 $ 54,678commonshareholders

TEXAS CAPITAL BANCSHARES, INC.QUARTERLY FINANCIAL SUMMARY - UNAUDITEDConsolidated Daily Average Balances, Average Yields and Rates(dollars in thousands) 3rd Quarter 2021 2nd Quarter 2021 1st Quarter 2021 4th Quarter 2020 3rd Quarter 2020 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 - $ 3,590,591 $ 8,546 0.94 % $ 3,361,696 $ 9,222 1.10 % $ 3,225,786 $ 8,112 1.02 % $ 2,137,481 $ 7,748 1.44 % $ 525,149 $ 1,905 1.44 %taxableInvestmentsecurities - 185,221 2,138 4.58 % 181,574 2,147 4.74 % 196,785 2,247 4.63 % 200,781 2,337 4.63 % 190,797 2,239 4.67 %non-taxable^(2)Federal fundssold andsecurities 653 ? 0.12 % 713 ? 0.18 % 4,605 1 0.07 % 1,709 1 0.13 % 12,051 1 0.04 %purchased underresaleagreementsInterest-bearingdeposits in 9,045,442 3,606 0.16 % 11,583,046 2,961 0.10 % 11,840,942 2,932 0.10 % 10,808,548 2,792 0.10 % 11,028,962 2,877 0.10 %other banksLHS, at fair 18,791 54 1.14 % 93,164 781 3.36 % 243,326 1,595 2.66 % 410,637 2,475 2.40 % 543,606 3,867 2.83 %valueLHI, mortgage 7,987,521 58,913 2.93 % 7,462,223 57,401 3.09 % 8,177,759 64,942 3.22 % 9,550,119 78,906 3.29 % 9,061,984 76,464 3.36 %finance loansLHI^(1)(2) 15,266,167 147,423 3.83 % 15,242,975 152,515 4.01 % 15,457,888 149,196 3.91 % 15,620,410 161,750 4.12 % 16,286,036 157,230 3.84 %Less allowancefor credit 220,984 ? ? 241,676 ? ? 254,697 ? ? 290,189 ? ? 264,769 ? ? losses on loansLHI, net of 23,032,704 206,336 3.55 % 22,463,522 209,916 3.75 % 23,380,950 214,138 3.71 % 24,880,340 240,656 3.85 % 25,083,251 233,694 3.71 %allowanceTotal earning 35,873,402 220,680 2.44 % 37,683,715 225,027 2.40 % 38,892,394 229,025 2.39 % 38,439,496 256,009 2.65 % 37,383,816 244,583 2.60 %assetsCash and other 855,555 996,946 1,064,679 1,031,195 1,037,760 assetsTotal assets $ 36,728,957 $ 38,680,661 $ 39,957,073 $ 39,470,691 $ 38,421,576 Liabilities andStockholders? EquityTransaction $ 3,012,547 $ 4,737 0.62 % $ 3,795,152 $ 5,395 0.57 % $ 3,991,966 $ 5,861 0.60 % $ 4,384,493 $ 6,604 0.60 % $ 4,275,574 $ 6,652 0.62 %depositsSavings deposits 10,044,995 8,262 0.33 % 11,296,382 8,990 0.32 % 12,889,974 10,788 0.34 % 12,982,189 12,671 0.39 % 12,786,719 12,808 0.40 %Time deposits 1,640,562 1,720 0.42 % 1,755,993 1,886 0.43 % 2,204,242 3,355 0.62 % 2,355,199 4,544 0.77 % 2,844,083 8,370 1.17 %Total interest 14,698,104 14,719 0.40 % 16,847,527 16,271 0.39 % 19,086,182 20,004 0.43 % 19,721,881 23,819 0.48 % 19,906,376 27,830 0.56 %bearing depositsOther borrowings 2,299,692 748 0.13 % 2,349,718 502 0.09 % 2,686,398 2,592 0.39 % 3,022,077 3,517 0.46 % 2,811,435 3,493 0.49 %Long-term debt 927,626 10,586 4.53 % 881,309 10,723 4.88 % 464,731 5,743 5.01 % 395,841 4,817 4.84 % 395,749 4,839 4.87 %Total interestbearing 17,925,422 26,053 0.58 % 20,078,554 27,496 0.55 % 22,237,311 28,339 0.52 % 23,139,799 32,153 0.55 % 23,113,560 36,162 0.62 %liabilitiesDemand deposits 15,363,568 15,139,546 14,421,505 13,174,114 12,202,065 Other 275,317 274,401 309,644 303,480 314,500 liabilitiesStockholders? 3,164,650 3,188,160 2,988,613 2,853,298 2,791,451 equityTotalliabilities and $ 36,728,957 $ 38,680,661 $ 39,957,073 $ 39,470,691 $ 38,421,576 stockholders?equityNet interest $ 194,627 $ 197,531 $ 200,686 $ 223,856 $ 208,421 income^(2)Net interest 2.15 % 2.10 % 2.09 % 2.32 % 2.22 %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 CONTACTJamie Britton, 214.932.6721jamie.britton@texascapitalbank.com

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