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Texas Capital Bancshares, Inc. Announces Fourth Quarter and Full Year 2023 Results

Fourth quarter 2023 net income of $20.2 million and net income available to common stockholders of $15.8 million, or $0.33 per diluted share

Book Value and Tangible Book Value(1) per share both increased 6.1%, reaching record levels, after giving effect to the repurchase of $44.8 million in shares

Capital ratios continue to be strong, including 12.6% CET1 and 17.1% Total Capital

DALLAS, Jan. 18, 2024 (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 2023.

Net income available to common stockholders was $15.8 million, or $0.33 per diluted share, for the fourth quarter of 2023, compared to $57.4 million, or $1.18 per diluted share, for the third quarter of 2023 and $212.9 million, or $4.23 per diluted share, for the fourth quarter of 2022. The fourth quarter of 2023 included Federal Deposit Insurance Corporation (“FDIC”) special assessment expense of $19.9 million ($0.32 per diluted share).

“The firm continued to execute on its strategic plan to deliver something unique and differentiated for our clients in the midst of tremendous industry pressure in 2023,” said Rob C. Holmes, President and CEO. “Continued client adoption of our broad platform coupled with significant structural improvements in our operating model and near record levels of capital and liquidity provide the foundation for long-term value creation.”

FINANCIAL RESULTS         
(dollars and shares in thousands)         
 4th Quarter 3rd Quarter 4th Quarter Full Year Full Year
  2023   2023   2022   2023   2022 
OPERATING RESULTS         
Net income$20,150  $61,679  $217,251  $189,141  $332,478 
Net income available to common stockholders$15,838  $57,366  $212,939  $171,891  $315,228 
Diluted earnings per common share$0.33  $1.18  $4.23  $3.54  $6.18 
Diluted common shares 48,098   48,529   50,283   48,610   51,047 
Return on average assets 0.27%  0.81%  2.80%  0.64%  1.04%
Return on average common equity 2.25%  8.08%  30.66%  6.15%  11.33%
          
BALANCE SHEET         
Loans held for investment$16,362,230  $16,183,882  $15,197,307     
Loans held for investment, mortgage finance 3,978,328   4,429,489   4,090,033     
Total loans held for investment 20,340,558   20,613,371   19,287,340     
Loans held for sale 44,105   155,073   36,357     
Total assets 28,356,266   29,628,249   28,414,642     
Non-interest bearing deposits 7,328,276   9,352,883   9,618,081     
Total deposits 22,371,839   23,878,978   22,856,880     
Stockholders’ equity 3,199,142   3,077,700   3,055,351     
          

(1) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.

FOURTH QUARTER 2023 COMPARED TO THIRD QUARTER 2023

For the fourth quarter of 2023, net income available to common stockholders was $15.8 million, or $0.33 per diluted share, compared to $57.4 million, or $1.18 per diluted share, for the third quarter of 2023.

Provision for credit losses for the fourth quarter of 2023 was $19.0 million, compared to $18.0 million for the third quarter of 2023. The $19.0 million provision for credit losses recorded in the fourth quarter of 2023 resulted primarily from increases in criticized and non-accrual loans, as well as $13.8 million in net charge-offs.

Net interest income was $214.7 million for the fourth quarter of 2023, compared to $232.1 million for the third quarter of 2023. The decrease in net interest income was primarily due to a decrease in loans held for investment (“LHI”), mortgage finance yields, as well as increases in funding costs and average interest-bearing liabilities. Net interest margin for the fourth quarter of 2023 was 2.93%, a decrease of 20 basis points from the third quarter of 2023. LHI, excluding mortgage finance, yields increased 7 basis points from the third quarter of 2023 and LHI, mortgage finance yields decreased 152 basis points from the third quarter of 2023. Total cost of deposits was 2.82% for the fourth quarter of 2023, a 20 basis point increase from the third quarter of 2023.

Non-interest income for the fourth quarter of 2023 decreased $15.7 million, or 34%, compared to the third quarter of 2023, primarily due to a decrease in investment banking and trading income.

Non-interest expense for the fourth quarter of 2023 increased $21.5 million, or 12%, compared to the third quarter of 2023, primarily due to an increase in FDIC insurance assessment expense, which included $19.9 million in special assessment expense recorded in the fourth quarter of 2023.

FOURTH QUARTER 2023 COMPARED TO FOURTH QUARTER 2022

Net income available to common stockholders was $15.8 million, or $0.33 per diluted share, for the fourth quarter of 2023, compared to $212.9 million, or $4.23 per diluted share, for the fourth quarter of 2022.

The fourth quarter of 2023 included a $19.0 million provision for credit losses, reflecting increases in criticized and non-accrual loans and net charge-offs of $13.8 million, compared to a $34.0 million provision for credit losses for the fourth quarter of 2022.

Net interest income decreased to $214.7 million for the fourth quarter of 2023, compared to $247.6 million for the fourth quarter of 2022, primarily due to an increase in funding costs and a decrease in average earning assets, partially offset by an increase in yields on average earning assets. Net interest margin decreased 33 basis points to 2.93% for the fourth quarter of 2023, as compared to the fourth quarter of 2022. LHI, excluding mortgage finance, yields increased 139 basis points compared to the fourth quarter of 2022 and LHI, mortgage finance yields decreased 293 basis points from the fourth quarter of 2022. Total cost of deposits increased 129 basis points compared to the fourth quarter of 2022.

Non-interest income for the fourth quarter of 2023 decreased $246.5 million, or 89%, compared to the fourth quarter of 2022. The decrease was primarily due to a non-recurring $248.5 million gain related to the sale of our premium finance subsidiary recorded in the fourth quarter of 2022.

Non-interest expense for the fourth quarter of 2023 decreased $11.7 million, or 5%, compared to the fourth quarter of 2022, primarily due to decreases in occupancy, marketing, legal and professional and other expenses, partially offset by an increase in FDIC insurance assessment expense, resulting from the FDIC special assessment described above. The fourth quarter of 2022 included $13.0 million in legal and professional expense related to the sale of our premium finance subsidiary, $9.8 million in restructuring reserves, primarily related to occupancy expense, and $8.0 million in charitable contributions recorded in other non-interest expense.

CREDIT QUALITY

Net charge-offs of $13.8 million were recorded during the fourth quarter of 2023, compared to net charge-offs of $8.9 million and $15.0 million during the third quarter of 2023 and the fourth quarter of 2022, respectively. Criticized loans totaled $738.2 million at December 31, 2023, compared to $677.4 million at September 30, 2023 and $513.2 million at December 31, 2022. Non-accrual LHI totaled $81.4 million at December 31, 2023, compared to $63.1 million at September 30, 2023 and $48.3 million at December 31, 2022. The ratio of non-accrual LHI to total LHI for the fourth quarter of 2023 was 0.40%, compared to 0.31% for the third quarter of 2023 and 0.25% for the fourth quarter of 2022. The ratio of total allowance for credit losses to total LHI was 1.46% at December 31, 2023, compared to 1.41% and 1.43% at September 30, 2023 and December 31, 2022, respectively.

REGULATORY RATIOS AND CAPITAL

All regulatory ratios continue to be in excess of “well capitalized” requirements as of December 31, 2023. Our CET1, tier 1 capital, total capital and leverage ratios were 12.6%, 14.2%, 17.1% and 12.2%, respectively, at December 31, 2023, compared to 12.7%, 14.3%, 17.1% and 12.1%, respectively, at September 30, 2023 and 13.0%, 14.7%, 17.7% and 11.5%, respectively, at December 31, 2022. At December 31, 2023, our ratio of tangible common equity to total tangible assets was 10.2%, compared to 9.4% at September 30, 2023 and 9.7% at December 31, 2022.

During the fourth quarter of 2023, the Company repurchased 809,623 shares of its common stock for an aggregate purchase price, including excise tax expense, of $44.8 million, at a weighted average price of $54.90 per share. On January 17, 2024, the Company’s board of directors authorized a new share repurchase program under which the Company may repurchase up to $150.0 million in shares of its outstanding common stock through January 31, 2025. Remaining repurchase authorization under the January 18, 2023 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, is the holding company of Texas Capital Bank, a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs and individual customers. Founded in 1998, the firm 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 Bank has established commercial banking, consumer banking, investment banking and wealth management capabilities.

Forward Looking Statements

This communication contains “forward-looking statements” within the meaning of and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, TCBI’s financial condition, results of operations, business plans and future performance. These statements are not historical in nature and may often be identified by the use of words such as “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “plans,” “targets,” “intends” “could,” “would,” “anticipates,” “potential,” “confident,” “optimistic” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, trends, guidance, expectations and future plans.

Because forward-looking statements relate to future results and occurrences, they are subject to inherent and various uncertainties, risks, and changes in circumstances that are difficult to predict, may change over time, are based on management’s expectations and assumptions at the time the statements are made and are not guarantees of future results. Numerous risks and other factors, many of which are beyond management’s control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. While there can be no assurance that any list of risks is complete, important risks and other factors that could cause actual results to differ materially from those contemplated by forward-looking statements include, but are not limited to: economic or business conditions in Texas, the United States or globally that impact TCBI or its customers; negative credit quality developments arising from the foregoing or other factors; TCBI’s ability to effectively manage its liquidity and maintain adequate regulatory capital to support its businesses; TCBI’s ability to pursue and execute upon growth plans, whether as a function of capital, liquidity or other limitations; TCBI’s ability to successfully execute its business strategy, including developing and executing new lines of business and new products and services; the extensive regulations to which TCBI is subject and its ability to comply with applicable governmental regulations, including legislative and regulatory changes; TCBI’s ability to effectively manage information technology systems, including third party vendors, cyber or data privacy incidents or other failures, disruptions or security breaches; elevated or further changes in interest rates, including the impact of interest rates on TCBI’s securities portfolio and funding costs, as well as related balance sheet implications stemming from the fair value of our assets and liabilities; the effectiveness of TCBI’s risk management processes strategies and monitoring; fluctuations in commercial and residential real estate values, especially as they relate to the value of collateral supporting TCBI’s loans; the failure to identify, attract and retain key personnel and other employees; increased or expanded competition from banks and other financial service providers in TCBI’s markets; adverse developments in the banking industry and the potential impact of such developments on customer confidence, liquidity and regulatory responses to these developments, including in the context of regulatory examinations and related findings and actions; negative press and social media attention with respect to the banking industry or TCBI, in particular; claims, litigation or regulatory investigations and actions that TCBI may become subject to; legislative and regulatory changes; 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
  2023  2023  2023  2023  2022 
CONSOLIDATED STATEMENTS OF INCOME     
Interest income$417,072 $425,769 $401,916 $385,166 $371,292 
Interest expense 202,355  193,698  169,926  149,821  123,687 
Net interest income 214,717  232,071  231,990  235,345  247,605 
Provision for credit losses 19,000  18,000  7,000  28,000  34,000 
Net interest income after provision for credit losses 195,717  214,071  224,990  207,345  213,605 
Non-interest income 31,133  46,872  46,011  37,403  277,667 
Non-interest expense 201,385  179,891  181,644  194,027  213,090 
Income before income taxes 25,465  81,052  89,357  50,721  278,182 
Income tax expense 5,315  19,373  20,706  12,060  60,931 
Net income 20,150  61,679  68,651  38,661  217,251 
Preferred stock dividends 4,312  4,313  4,312  4,313  4,312 
Net income available to common stockholders$15,838 $57,366 $64,339 $34,348 $212,939 
Diluted earnings per common share$0.33 $1.18 $1.33 $0.70 $4.23 
Diluted common shares 48,097,517  48,528,698  48,421,276  48,880,725  50,282,663 
      
CONSOLIDATED BALANCE SHEET DATA     
Total assets$28,356,266 $29,628,249 $28,976,544 $28,596,653 $28,414,642 
Loans held for investment 16,362,230  16,183,882  16,227,203  16,014,497  15,197,307 
Loans held for investment, mortgage finance 3,978,328  4,429,489  5,098,812  4,060,570  4,090,033 
Loans held for sale 44,105  155,073  29,097  27,608  36,357 
Interest bearing cash and cash equivalents 3,042,357  3,975,860  2,587,131  3,385,494  4,778,623 
Investment securities 4,143,194  4,069,717  4,226,653  4,345,969  3,585,114 
Non-interest bearing deposits 7,328,276  9,352,883  9,429,352  9,500,583  9,618,081 
Total deposits 22,371,839  23,878,978  23,318,240  22,179,697  22,856,880 
Short-term borrowings 1,500,000  1,400,000  1,350,000  2,100,000  1,201,142 
Long-term debt 859,147  858,471  857,795  932,119  931,442 
Stockholders’ equity 3,199,142  3,077,700  3,081,927  3,079,974  3,055,351 
      
End of period shares outstanding 47,237,912  48,015,003  47,992,521  47,851,862  48,783,763 
Book value per share$61.37 $57.85 $57.97 $58.10 $56.48 
Tangible book value per share(1)$61.34 $57.82 $57.93 $58.06 $56.45 
      
SELECTED FINANCIAL RATIOS     
Net interest margin 2.93% 3.13% 3.29% 3.33% 3.26%
Return on average assets 0.27% 0.81% 0.95% 0.53% 2.80%
Return on average common equity 2.25% 8.08% 9.17% 5.06% 30.66%
Non-interest income to average earning assets 0.43% 0.64% 0.66% 0.54% 3.70%
Efficiency ratio(2) 81.9% 64.5% 65.3% 71.1% 40.6%
Non-interest expense to average earning assets 2.79% 2.46% 2.61% 2.78% 2.84%
Common equity to total assets 10.2% 9.4% 9.6% 9.7% 9.7%
Tangible common equity to total tangible assets(3) 10.2% 9.4% 9.6% 9.7% 9.7%
Common Equity Tier 1 12.6% 12.7% 12.2% 12.4% 13.0%
Tier 1 capital 14.2% 14.3% 13.7% 14.0% 14.7%
Total capital 17.1% 17.1% 16.4% 16.9% 17.7%
Leverage 12.2% 12.1% 12.4% 12.0% 11.5%

(1) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(2) Non-interest expense divided by the sum of net interest income and non-interest income.
(3) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by total assets, less goodwill and intangibles.
        

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
 December 31, 2023December 31, 2022% Change
Assets   
Cash and due from banks$200,493 $233,637 (14)%
Interest bearing cash and cash equivalents 3,042,357  4,778,623 (36)%
Available-for-sale debt securities 3,225,892  2,615,644 23%
Held-to-maturity debt securities 865,477  935,514 (7)%
Equity securities 51,825  33,956 53%
Investment securities 4,143,194  3,585,114 16%
Loans held for sale 44,105  36,357 21%
Loans held for investment, mortgage finance 3,978,328  4,090,033 (3)%
Loans held for investment 16,362,230  15,197,307 8%
Less: Allowance for credit losses on loans 249,973  253,469 (1)%
Loans held for investment, net 20,090,585  19,033,871 6%
Premises and equipment, net 32,366  26,382 23%
Accrued interest receivable and other assets 801,670  719,162 11%
Goodwill and intangibles, net 1,496  1,496 %
Total assets$28,356,266 $28,414,642 %
    
Liabilities and Stockholders’ Equity   
Liabilities:   
Non-interest bearing deposits$7,328,276 $9,618,081 (24)%
Interest bearing deposits 15,043,563  13,238,799 14%
Total deposits 22,371,839  22,856,880 (2)%
Accrued interest payable 33,234  24,000 38%
Other liabilities 392,904  345,827 14%
Short-term borrowings 1,500,000  1,201,142 25%
Long-term debt 859,147  931,442 (8)%
Total liabilities 25,157,124  25,359,291 (1)%
    
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, 2023 and 2022 300,000  300,000 %
Common stock, $.01 par value:   
Authorized shares - 100,000,000   
Issued shares - 51,142,979 and 50,867,298 at December 31, 2023 and 2022, respectively 511  509 %
Additional paid-in capital 1,045,576  1,025,593 2%
Retained earnings 2,435,393  2,263,502 8%
Treasury stock - 3,905,067 and 2,083,535 shares at cost at December 31, 2023 and 2022, respectively (220,334) (115,310)91%
Accumulated other comprehensive loss, net of taxes (362,004) (418,943)(14)%
Total stockholders’ equity 3,199,142  3,055,351 5%
Total liabilities and stockholders’ equity$28,356,266 $28,414,642 %


TEXAS CAPITAL BANCSHARES, INC.    
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)    
(dollars in thousands except per share data)    
 Three Months Ended December 31,Twelve Months Ended December 31,
 2023202220232022
Interest income    
Interest and fees on loans$325,210$295,372$1,300,653$983,794
Investment securities 28,454 16,210 108,294 63,179
Interest bearing cash and cash equivalents 63,408 59,710 220,976 97,271
Total interest income 417,072 371,292 1,629,923 1,144,244
Interest expense    
Deposits 170,173 96,150 587,775 190,663
Short-term borrowings 18,069 13,449 70,642 29,077
Long-term debt 14,113 14,088 57,383 48,739
Total interest expense 202,355 123,687 715,800 268,479
Net interest income 214,717 247,605 914,123 875,765
Provision for credit losses 19,000 34,000 72,000 66,000
Net interest income after provision for credit losses 195,717 213,605 842,123 809,765
Non-interest income    
Service charges on deposit accounts 5,397 5,252 20,874 23,266
Wealth management and trust fee income 3,302 3,442 13,955 15,036
Brokered loan fees 2,076 2,655 8,918 14,159
Investment banking and trading income 10,725 11,937 86,182 35,054
Gain on disposal of subsidiary  248,526  248,526
Other 9,633 5,855 31,490 13,481
Total non-interest income 31,133 277,667 161,419 349,522
Non-interest expense    
Salaries and benefits 107,970 102,925 459,700 434,906
Occupancy expense 9,483 17,030 38,494 44,222
Marketing 5,686 10,623 25,854 32,388
Legal and professional 17,127 37,493 64,924 75,858
Communications and technology 23,607 20,434 81,262 69,253
Federal Deposit Insurance Corporation insurance assessment 25,143 3,092 36,775 14,344
Other 12,369 21,493 49,938 56,561
Total non-interest expense 201,385 213,090 756,947 727,532
Income before income taxes 25,465 278,182 246,595 431,755
Income tax expense 5,315 60,931 57,454 99,277
Net income 20,150 217,251 189,141 332,478
Preferred stock dividends 4,312 4,312 17,250 17,250
Net income available to common stockholders$15,838$212,939$171,891$315,228
     
Basic earnings per common share$0.33$4.28$3.58$6.25
Diluted earnings per common share$0.33$4.23$3.54$6.18
         


TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
 4th Quarter3rd Quarter2nd Quarter1st Quarter4th Quarter
  2023  2023  2023  2023  2022 
Allowance for credit losses on loans:     
Beginning balance$244,902 $237,343 $260,928 $253,469 $234,613 
Loans charged-off:     
Commercial 8,356  13,246  8,852  20,732  17,106 
Commercial real estate 5,500         
Consumer   41       
Total charge-offs 13,856  13,287  8,852  20,732  17,106 
Recoveries:     
Commercial 15  4,346  611  819  2,105 
Commercial real estate 4         
Consumer     2  3  2 
Total recoveries 19  4,346  613  822  2,107 
Net charge-offs 13,837  8,941  8,239  19,910  14,999 
Provision for credit losses on loans 18,908  16,500  (15,346) 27,369  33,855 
Ending balance$249,973 $244,902 $237,343 $260,928 $253,469 
      
Allowance for off-balance sheet credit losses:     
Beginning balance$46,270 $44,770 $22,424 $21,793 $21,648 
Provision for off-balance sheet credit losses 92  1,500  22,346  631  145 
Ending balance$46,362 $46,270 $44,770 $22,424 $21,793 
      
Total allowance for credit losses$296,335 $291,172 $282,113 $283,352 $275,262 
Total provision for credit losses$19,000 $18,000 $7,000 $28,000 $34,000 
      
Allowance for credit losses on loans to total loans held for investment 1.23% 1.19% 1.11% 1.30% 1.31%
Allowance for credit losses on loans to average total loans held for investment 1.24% 1.17% 1.15% 1.38% 1.31%
Net charge-offs to average total loans held for investment(1) 0.27% 0.17% 0.16% 0.43% 0.31%
Net charge-offs to average total loans held for investment for last 12 months(1) 0.25% 0.26% 0.23% 0.19% 0.09%
Total provision for credit losses to average total loans held for investment(1) 0.37% 0.34% 0.14% 0.60% 0.70%
Total allowance for credit losses to total loans held for investment 1.46% 1.41% 1.32% 1.41% 1.43%

(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
  2023  2023  2023  2023  2022 
Non-accrual loans held for investment$81,398 $63,129 $81,039 $93,951 $48,338 
Non-accrual loans held for sale          
Other real estate owned          
Total non-performing assets$81,398 $63,129 $81,039 $93,951 $48,338 
      
Non-accrual loans held for investment to total loans held for investment 0.40% 0.31% 0.38% 0.47% 0.25%
Total non-performing assets to total assets 0.29% 0.21% 0.28% 0.33% 0.17%
Allowance for credit losses on loans to non-accrual loans held for investment3.1x3.9x2.9x2.8x5.2x
Total allowance for credit losses to non-accrual loans held for investment3.6x4.6x3.5x3.0x5.7x
      
Loans held for investment past due 90 days and still accruing$19,523 $4,602 $64 $3,098 $131 
Loans held for investment past due 90 days to total loans held for investment 0.10% 0.02% % 0.02% %
Loans held for sale past due 90 days and still accruing$ $ $ $ $ 
                


TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)
      
 4th Quarter3rd Quarter2nd Quarter1st Quarter4th Quarter
 20232023202320232022
Interest income     
Interest and fees on loans$325,210$345,138$332,867$297,438$295,372
Investment securities 28,454 27,070 27,478 25,292 16,210
Interest bearing deposits in other banks 63,408 53,561 41,571 62,436 59,710
Total interest income 417,072 425,769 401,916 385,166 371,292
Interest expense     
Deposits 170,173 160,117 137,391 120,094 96,150
Short-term borrowings 18,069 19,576 18,253 14,744 13,449
Long-term debt 14,113 14,005 14,282 14,983 14,088
Total interest expense 202,355 193,698 169,926 149,821 123,687
Net interest income 214,717 232,071 231,990 235,345 247,605
Provision for credit losses 19,000 18,000 7,000 28,000 34,000
Net interest income after provision for credit losses 195,717 214,071 224,990 207,345 213,605
Non-interest income     
Service charges on deposit accounts 5,397 5,297 5,158 5,022 5,252
Wealth management and trust fee income 3,302 3,509 3,715 3,429 3,442
Brokered loan fees 2,076 2,532 2,415 1,895 2,655
Investment banking and trading income 10,725 29,191 27,498 18,768 11,937
Gain on disposal of subsidiary     248,526
Other 9,633 6,343 7,225 8,289 5,855
Total non-interest income 31,133 46,872 46,011 37,403 277,667
Non-interest expense     
Salaries and benefits 107,970 110,010 113,050 128,670 102,925
Occupancy expense 9,483 9,910 9,482 9,619 17,030
Marketing 5,686 4,757 6,367 9,044 10,623
Legal and professional 17,127 17,614 15,669 14,514 37,493
Communications and technology 23,607 19,607 20,525 17,523 20,434
Federal Deposit Insurance Corporation insurance assessment 25,143 5,769 3,693 2,170 3,092
Other 12,369 12,224 12,858 12,487 21,493
Total non-interest expense 201,385 179,891 181,644 194,027 213,090
Income before income taxes 25,465 81,052 89,357 50,721 278,182
Income tax expense 5,315 19,373 20,706 12,060 60,931
Net income 20,150 61,679 68,651 38,661 217,251
Preferred stock dividends 4,312 4,313 4,312 4,313 4,312
Net income available to common shareholders$15,838$57,366$64,339$34,348$212,939
           


TEXAS CAPITAL BANCSHARES, INC.
TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1)
(dollars in thousands)
 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022
 Average
Balance
Income/
Expense
Yield/
Rate
 Average
Balance
Income/
Expense
Yield/
Rate
 Average
Balance
Income/
Expense
Yield/
Rate
 Average
Balance
Income/
Expense
Yield/
Rate
 Average
Balance
Income/
Expense
Yield/
Rate
Assets                   
Investment securities(2)$4,078,975$28,4542.48% $4,204,749$27,0702.33% $4,306,881$27,4782.36% $4,060,456$25,2922.31% $3,385,372$16,2101.70%
Interest bearing cash and cash equivalents 4,637,374 63,4085.42%  3,965,045 53,5615.36%  3,286,091 41,5715.07%  5,541,341 62,4364.57%  6,158,769 59,7103.85%
Loans held for sale 29,071 6729.17%  31,878 6478.06%  28,414 5998.46%  43,472 9388.75%  1,053,157 12,0644.54%
Loans held for investment, mortgage finance 3,946,280 11,1681.12%  4,697,702 31,2172.64%  4,376,235 36,1983.32%  3,286,804 28,5283.52%  4,279,367 43,7084.05%
Loans held for investment(3) 16,164,233 313,4387.69%  16,317,324 313,3467.62%  16,217,314 296,1837.33%  15,598,854 268,1316.97%  15,105,083 239,7466.30%
Less: Allowance for credit losses on loans 244,287    238,883    261,027    252,727    233,246  
Loans held for investment, net 19,866,226 324,6066.48%  20,776,143 344,5636.58%  20,332,522 332,3816.56%  18,632,931 296,6596.46%  19,151,204 283,4545.87%
Total earning assets 28,611,646 417,1405.69%  28,977,815 425,8415.75%  27,953,908 402,0295.69%  28,278,200 385,3255.45%  29,748,502 371,4384.89%
Cash and other assets 1,120,354    1,106,031    1,049,145    1,041,745    989,900  
Total assets$29,732,000   $30,083,846   $29,003,053   $29,319,945   $30,738,402  
                    
Liabilities and Stockholders’ Equity                   
Transaction deposits$1,972,324$15,6133.14% $1,755,451$13,6273.08% $1,345,742$9,4682.82% $776,500$3,8532.01% $1,105,466$4,9771.79%
Savings deposits 11,043,155 132,8014.77%  10,858,306 127,3234.65%  10,590,558 114,2754.33%  11,195,402 105,7073.83%  10,563,049 80,8013.03%
Time deposits 1,716,812 21,7595.03%  1,610,235 19,1674.72%  1,531,922 13,6483.57%  1,430,657 10,5342.99%  1,625,857 10,3722.53%
Total interest bearing deposits 14,732,291 170,1734.58%  14,223,992 160,1174.47%  13,468,222 137,3914.09%  13,402,559 120,0943.63%  13,294,372 96,1502.87%
Short-term borrowings 1,257,609 18,0695.70%  1,393,478 19,5765.57%  1,397,253 18,2535.24%  1,242,881 14,7444.81%  1,387,660 13,4493.84%
Long-term debt 858,858 14,1136.52%  858,167 14,0056.47%  883,871 14,2826.48%  931,796 14,9836.52%  931,107 14,0886.00%
Total interest bearing liabilities 16,848,758 202,3554.76%  16,475,637 193,6984.66%  15,749,346 169,9264.33%  15,577,236 149,8213.90%  15,613,139 123,6873.14%
Non-interest bearing deposits 9,247,491    10,016,579    9,749,105    10,253,731    11,642,969  
Other liabilities 541,162    474,869    389,155    436,621    426,543  
Stockholders’ equity 3,094,589    3,116,761    3,115,447    3,052,357    3,055,751  
Total liabilities and stockholders’ equity$29,732,000   $30,083,846   $29,003,053   $29,319,945   $30,738,402  
Net interest income $214,785   $232,143   $232,103   $235,504   $247,751 
Net interest margin  2.93%   3.13%   3.29%   3.33%   3.26%

(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.


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

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

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