SEC Form 10-Q filed by Texas Capital Bancshares Inc.

7/18/24 4:07:02 PM ET

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tcbi-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended June 30, 2024


☐			Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from to

Commission file number 001-34657

TEXAS CAPITAL BANCSHARES, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware						75-2679109
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

2000 McKinney Avenue

Suite 700

Dallas

USA

75201

(Address of principal executive offices)

(Zip Code)

214/932-6600

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

TCBI

Nasdaq Stock Market

5.75% Non-Cumulative Perpetual Preferred Stock Series B, par value $0.01 per share

TCBIO

Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No ý

On July 17, 2024, the number of shares set forth below was outstanding with respect to each of the issuer’s classes of common stock:

Common Stock, par value $0.01 per share 46,196,722


Part I.—Financial Information
	Item 1.	Financial Statements - Unaudited	3
		Consolidated Balance Sheets	3
		Consolidated Statements of Income and Other Comprehensive Income	4
		Consolidated Statements of Stockholders' Equity	5
		Consolidated Statements of Cash Flows	7
		Notes to Consolidated Financial Statements	8
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
	Item 4.	Controls and Procedures	36

Part II.—Other Information
	Item 1.	Legal Proceedings	37
	Item 1A.	Risk Factors	37
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
	Item 6.	Exhibits	38

Signatures			39



(in thousands except share data)	June 30, 2024		December 31, 2023
Assets
Cash and due from banks	$	221,727	$	200,493
Interest bearing cash and cash equivalents	2,691,352		3,042,357
Available-for-sale debt securities	3,483,231		3,225,892
Held-to-maturity debt securities	831,513		865,477
Equity securities	74,232		51,825
Investment securities	4,388,976		4,143,194
Loans held for sale	36,785		44,105
Loans held for investment, mortgage finance	5,078,161		3,978,328
Loans held for investment	16,700,569		16,362,230
Less: Allowance for credit losses on loans	267,297		249,973
Loans held for investment, net	21,511,433		20,090,585

Premises and equipment, net	69,464		32,366
Accrued interest receivable and other assets	933,761		801,670
Goodwill and intangibles, net	1,496		1,496
Total assets	$	29,854,994	$	28,356,266
Liabilities and Stockholders’ Equity
Liabilities:
Non-interest bearing deposits	$	7,987,715	$	7,328,276
Interest bearing deposits	15,830,612		15,043,563
Total deposits	23,818,327		22,371,839
Accrued interest payable	23,841		33,234
Other liabilities	502,228		392,904
Short-term borrowings	1,675,000		1,500,000
Long-term debt	659,997		859,147
Total liabilities	26,679,393		25,157,124
Stockholders’ equity:
Preferred stock, $0.01 par value, $1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - 300,000 at June 30, 2024 and December 31, 2023	300,000		300,000
Common stock, $0.01 par value:
Authorized shares - 100,000,000
Issued shares - 51,474,581 and 51,142,979 at June 30, 2024 and December 31, 2023, respectively	515		511
Additional paid-in capital	1,050,114		1,045,576
Retained earnings	2,494,572		2,435,393
Treasury stock - 5,286,503 and 3,905,067 shares at cost at June 30, 2024 and December 31, 2023, respectively	(301,868)		(220,334)
Accumulated other comprehensive loss, net of taxes	(367,732)		(362,004)
Total stockholders’ equity	3,175,601		3,199,142
Total liabilities and stockholders’ equity	$	29,854,994	$	28,356,266



	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands except per share data)	2024		2023		2024		2023
Interest income
Interest and fees on loans	$	345,251	$	332,867	$	676,130	$	630,305
Investment securities	33,584		27,478		65,728		52,770
Interest bearing cash and cash equivalents	43,233		41,571		97,588		104,007
Total interest income	422,068		401,916		839,446		787,082
Interest expense
Deposits	181,280		137,391		356,880		257,485
Short-term borrowings	12,749		18,253		25,532		32,997
Long-term debt	11,457		14,282		25,443		29,265

Total interest expense	205,486		169,926		407,855		319,747
Net interest income	216,582		231,990		431,591		467,335
Provision for credit losses	20,000		7,000		39,000		35,000
Net interest income after provision for credit losses	196,582		224,990		392,591		432,335
Non-interest income
Service charges on deposit accounts	5,911		5,158		12,250		10,180
Wealth management and trust fee income	3,699		3,715		7,266		7,144
Brokered loan fees	2,131		2,415		4,042		4,310

Investment banking and advisory fees	25,048		19,101		43,472		33,665
Trading income	5,650		8,397		10,362		12,601



Other	7,985		7,225		14,351		15,514
Total non-interest income	50,424		46,011		91,743		83,414
Non-interest expense
Salaries and benefits	118,840		113,050		247,567		241,720
Occupancy expense	10,666		9,482		20,403		19,101
Marketing	5,996		6,367		12,032		15,411
Legal and professional	11,273		15,669		27,468		30,183
Communications and technology	22,013		20,525		43,127		38,048
Federal Deposit Insurance Corporation insurance assessment	5,570		3,693		13,991		5,863


Other	14,051		12,858		26,214		25,345
Total non-interest expense	188,409		181,644		390,802		375,671
Income before income taxes	58,597		89,357		93,532		140,078
Income tax expense	16,935		20,706		25,728		32,766
Net income	41,662		68,651		67,804		107,312
Preferred stock dividends	4,312		4,312		8,625		8,625
Net income available to common stockholders	$	37,350	$	64,339	$	59,179	$	98,687
Other comprehensive income/(loss)
Change in unrealized gain/(loss)	$	(13,939)	$	(99,731)	$	(56,282)	$	(56,778)
Amounts reclassified into net income	19,825		16,762		39,533		29,735
Other comprehensive income/(loss)	5,886		(82,969)		(16,749)		(27,043)
Income tax expense/(benefit)	(6,268)		(17,423)		(11,021)		(5,678)
Other comprehensive income/(loss), net of tax	12,154		(65,546)		(5,728)		(21,365)
Comprehensive income	$	53,816	$	3,105	$	62,076	$	85,947
Basic earnings per common share	$	0.80	$	1.34	$	1.26	$	2.05
Diluted earnings per common share	$	0.80	$	1.33	$	1.25	$	2.02


	Preferred Stock			Common Stock			Additional				Treasury Stock			Accumulated Other
							Paid-in		Retained					Comprehensive
(in thousands except share data)	Shares	Amount		Shares	Amount		Capital		Earnings		Shares	Amount		Income/(Loss)		Total
Balance at March 31, 2023	300,000	$	300,000	50,947,306	$	509	$	1,031,905	$	2,297,850	(3,095,444)	$	(175,528)	$	(374,762)	$	3,079,974

Comprehensive income/(loss):
Net income	—	—		—	—		—		68,651		—	—		—		68,651
Change in other comprehensive income/(loss), net of taxes	—	—		—	—		—		—		—	—		(65,546)		(65,546)
Total comprehensive income																3,105

Stock-based compensation expense recognized in earnings	—	—		—	—		5,069		—		—	—		—		5,069

Preferred stock dividend	—	—		—	—		—		(4,312)		—	—		—		(4,312)
Issuance of stock related to stock-based awards	—	—		140,659	2		(1,911)		—		—	—		—		(1,909)




Balance at June 30, 2023	300,000	$	300,000	51,087,965	$	511	$	1,035,063	$	2,362,189	(3,095,444)	$	(175,528)	$	(440,308)	$	3,081,927

Balance at March 31, 2024	300,000	$	300,000	51,420,680	$	514	$	1,044,669	$	2,457,222	(4,434,405)	$	(251,857)	$	(379,886)	$	3,170,662

Comprehensive income/(loss):
Net income	—	—		—	—		—		41,662		—	—		—		41,662
Change in other comprehensive income/(loss), net of taxes	—	—		—	—		—		—		—	—		12,154		12,154
Total comprehensive income																53,816

Stock-based compensation expense recognized in earnings	—	—		—	—		5,246		—		—	—		—		5,246

Preferred stock dividend	—	—		—	—		—		(4,312)		—	—		—		(4,312)
Issuance of stock related to stock-based awards	—	—		53,901	1		199		—		—	—		—		200
Repurchase of common stock	—	—		—	—		—		—		(852,098)	(50,011)		—		(50,011)



Balance at June 30, 2024	300,000	$	300,000	51,474,581	$	515	$	1,050,114	$	2,494,572	(5,286,503)	$	(301,868)	$	(367,732)	$	3,175,601



	Six Months Ended June 30,
(in thousands)	2024		2023
Operating activities
Net income	$	67,804	$	107,312
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Provision for credit losses	39,000		35,000

Depreciation and amortization	24,835		19,717

Net gain recognized on investment securities	(3,604)		(2,685)



Stock-based compensation expense	14,755		13,507


Proceeds from sales and repayments of loans held for sale	25,731		7,260



Changes in operating assets and liabilities:
Accrued interest receivable and other assets	(24,042)		(42,383)
Accrued interest payable and other liabilities	(15,017)		(47,067)
Net cash provided by operating activities	129,462		90,661
Investing activities
Purchases of available-for-sale debt securities	(693,894)		(849,391)
Proceeds from sales of available-for-sale debt securities	—		56,923
Proceeds from maturities, redemptions and pay-downs of available-for-sale debt securities	416,701		106,988
Proceeds from maturities, redemptions and pay-downs of held-to-maturity debt securities	35,712		37,075
Sales/(purchases) of equity securities, net	(18,803)		2,292
Originations of loans held for investment, mortgage finance	(37,081,520)		(35,597,043)
Proceeds from pay-offs of loans held for investment, mortgage finance	35,981,687		34,588,264

Net increase in loans held for investment, excluding mortgage finance loans	(379,469)		(1,058,046)

Purchase of premises and equipment, net	(42,246)		(4,878)


Net cash used in investing activities	(1,781,832)		(2,717,816)
Financing activities
Net increase/(decrease) in deposits	1,446,488		461,360
Issuance of stock related to stock-based awards	(8,730)		(4,035)



Preferred dividends paid	(8,625)		(8,625)
Repurchase of common stock	(81,534)		(60,218)
Net increase/(decrease) in short-term borrowings	175,000		148,858


Redemption of long-term debt	(200,000)		(75,000)

Net cash provided by financing activities	1,322,599		462,340
Net increase/(decrease) in cash and cash equivalents	(329,771)		(2,164,815)
Cash and cash equivalents at beginning of period	3,242,850		5,012,260
Cash and cash equivalents at end of period	$	2,913,079	$	2,847,445
Supplemental disclosures of cash flow information
Cash paid during the period for interest	$	464,930	$	314,089
Cash paid during the period for income taxes	47,988		43,286
Transfers of loans from held for investment to held for sale	18,411		—



	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands except share and per share data)	2024		2023		2024		2023
Numerator:
Net income	$	41,662	$	68,651	$	67,804	$	107,312
Preferred stock dividends	4,312		4,312		8,625		8,625
Net income available to common stockholders	$	37,350	$	64,339	$	59,179	$	98,687
Denominator:
Basic earnings per common share—weighted average common shares	46,546,243		47,906,624		46,925,761		48,166,977
Effect of dilutive outstanding stock-settled awards	326,255		514,652		371,569		569,405
Dilutive earnings per common share—weighted average diluted common shares	46,872,498		48,421,276		47,297,330		48,736,382
Basic earnings per common share	$	0.80	$	1.34	$	1.26	$	2.05
Diluted earnings per common share	$	0.80	$	1.33	$	1.25	$	2.02
Anti-dilutive outstanding stock-settled awards	38,461		533,363		105,680		341,728


(in thousands)	Amortized Cost(1)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2024
Available-for-sale debt securities:
U.S. Treasury securities	$	403,641	$	—	$	(15,483)	$	388,158
U.S. government agency securities	125,000		—		(18,791)		106,209
Residential mortgage-backed securities	3,307,715		6,277		(337,456)		2,976,536


CRT securities	13,136		—		(808)		12,328
Total available-for-sale debt securities	3,849,492		6,277		(372,538)		3,483,231
Held-to-maturity debt securities:
Residential mortgage-backed securities	831,513		—		(112,603)		718,910
Total held-to-maturity debt securities	831,513		—		(112,603)		718,910
Equity securities							74,232
Total investment securities(2)							$	4,388,976
December 31, 2023
Available-for-sale debt securities:
U.S. Treasury securities	$	651,112	$	—	$	(14,639)	$	636,473
U.S. government agency securities	125,000		—		(18,408)		106,592
Residential mortgage-backed securities	2,782,734		540		(312,442)		2,470,832


CRT securities	13,636		—		(1,641)		11,995
Total available-for-sale debt securities	3,572,482		540		(347,130)		3,225,892
Held-to-maturity securities:
Residential mortgage-backed securities	865,477		—		(101,633)		763,844
Total held-to-maturity securities	865,477		—		(101,633)		763,844
Equity securities							51,825
Total investment securities(2)							$	4,143,194


	Available-for-sale				Held-to-maturity
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value

Due within one year	$	—	$	—	$	—	$	—
Due after one year through five years	453,642		432,220		—		—
Due after five years through ten years	105,433		89,394		—		—
Due after ten years	3,290,417		2,961,617		831,513		718,910
Total	$	3,849,492	$	3,483,231	$	831,513	$	718,910


	Less Than 12 Months				12 Months or Longer				Total
(in thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
June 30, 2024
U.S. Treasury securities	$	—	$	—	$	388,158	$	(15,483)	$	388,158	$	(15,483)
U.S. government agency securities	—		—		106,209		(18,791)		106,209		(18,791)
Residential mortgage-backed securities	335,741		(4,305)		2,272,460		(333,151)		2,608,201		(337,456)
CRT securities	—		—		12,328		(808)		12,328		(808)
Total	$	335,741	$	(4,305)	$	2,779,155	$	(368,233)	$	3,114,896	$	(372,538)
December 31, 2023
U.S. Treasury securities	$	—	$	—	$	636,473	$	(14,639)	$	636,473	$	(14,639)
U.S. government agency securities	—		—		106,592		(18,408)		106,592		(18,408)
Residential mortgage-backed securities	910,999		(19,751)		1,501,340		(292,691)		2,412,339		(312,442)
CRT securities	—		—		11,995		(1,641)		11,995		(1,641)
Total	$	910,999	$	(19,751)	$	2,256,400	$	(327,379)	$	3,167,399	$	(347,130)


(in thousands)	2023		2022		2021		2020		2019		2018 and prior		Revolving lines of credit		Revolving lines of credit converted to term loans		Total
December 31, 2023
Commercial
(1-7) Pass	$	1,546,257	$	1,408,672	$	279,266	$	144,699	$	142,301	$	157,808	$	6,284,464	$	16,580	$	9,980,047
(8) Special mention	22,148		118,991		35,619		285		823		13,385		40,647		89		231,987
(9) Substandard - accruing	12,477		50,876		9,334		18,547		—		78		38,372		—		129,684
(9+) Non-accrual	9,395		34,229		340		2,085		15,080		7,840		79		—		69,048
Total commercial	$	1,590,277	$	1,612,768	$	324,559	$	165,616	$	158,204	$	179,111	$	6,363,562	$	16,669	$	10,410,766
Mortgage finance
(1-7) Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	3,978,328	$	—	$	3,978,328
(8) Special mention	—		—		—		—		—		—		—		—		—
(9) Substandard - accruing	—		—		—		—		—		—		—		—		—
(9+) Non-accrual	—		—		—		—		—		—		—		—		—
Total mortgage finance	$	—	$	—	$	—	$	—	$	—	$	—	$	3,978,328	$	—	$	3,978,328
Commercial real estate
(1-7) Pass	$	561,801	$	1,689,325	$	1,042,953	$	419,703	$	317,480	$	559,026	$	575,928	$	28,175	$	5,194,391
(8) Special mention	—		136,801		32,937		24,440		34,181		22,833		7,895		—		259,087
(9) Substandard - accruing	—		2,232		—		—		—		28,573		4,141		—		34,946
(9+) Non-accrual	—		—		12,350		—		—		—		—		—		12,350
Total commercial real estate	$	561,801	$	1,828,358	$	1,088,240	$	444,143	$	351,661	$	610,432	$	587,964	$	28,175	$	5,500,774
Consumer
(1-7) Pass	$	31,876	$	56,425	$	78,096	$	47,423	$	14,141	$	102,691	$	199,171	$	—	$	529,823
(8) Special mention	—		—		—		—		—		—		100		41		141
(9) Substandard - accruing	—		—		—		—		—		984		—		—		984
(9+) Non-accrual	—		—		—		—		—		—		—		—		—
Total Consumer	$	31,876	$	56,425	$	78,096	$	47,423	$	14,141	$	103,675	$	199,271	$	41	$	530,948
Total	$	2,183,954	$	3,497,551	$	1,490,895	$	657,182	$	524,006	$	893,218	$	11,129,125	$	44,885	$	20,420,816
Gross charge-offs	$	8,364	$	5,090	$	25,578	$	—	$	15,243	$	883	$	698	$	871	$	56,727


(in thousands)	Commercial		Mortgage Finance		Commercial Real Estate		Consumer		Total
Six Months Ended June 30, 2024
Beginning balance	$	171,437	$	4,173	$	71,829	$	2,534	$	249,973
Provision for credit losses on loans	26,200		1,445		12,245		153		40,043
Charge-offs	17,541		—		5,436		—		22,977
Recoveries	258		—		—		—		258
Net charge-offs (recoveries)	17,283		—		5,436		—		22,719
Ending balance	$	180,354	$	5,618	$	78,638	$	2,687	$	267,297
Six Months Ended June 30, 2023
Beginning balance	$	185,303	$	10,745	$	54,268	$	3,153	$	253,469
Provision for credit losses on loans	18,198		(3,660)		(1,730)		(785)		12,023
Charge-offs	29,584		—		—		—		29,584
Recoveries	1,430		—		—		5		1,435
Net charge-offs (recoveries)	28,154		—		—		(5)		28,149
Ending balance	$	175,347	$	7,085	$	52,538	$	2,373	$	237,343


													Financial Statement Impact
($ in thousands)	Payment Deferral		Term Extension		Payment Deferral and Term Extension		Interest Rate Reduction and Term Extension		Total		Percentage of Loans Held for Investment		Interest Rate Reduction	Term Extension (in months)	Payment Deferrals
Three Months Ended June 30, 2024
Commercial	$	16,147	$	253	$	7,439	$	—	$	23,839	0.11	%	—%	3 to 13	$	1,176

Commercial real estate	—		15,831		—		—		15,831		0.07	%	—%	3	—

Total	$	16,147	$	16,084	$	7,439	$	—	$	39,670	0.18	%
Three Months Ended June 30, 2023
Commercial	$	—	$	261	$	3,378	$	—	$	3,639	0.02	%	—%	4 to 12	$	358



Total	$	—	$	261	$	3,378	$	—	$	3,639	0.02	%

Six Months Ended June 30, 2024
Commercial	$	24,207	$	703	$	7,439	$	—	$	32,349	0.15	%	—%	3 to 13	$	1,853

Commercial real estate	—		15,831		—		—		15,831		0.07	%	—%	3	—

Total	$	24,207	$	16,534	$	7,439	$	—	$	48,180	0.22	%
Six Months Ended June 30, 2023
Commercial	$	31,356	$	1,144	$	6,562	$	14,532	$	53,594	0.25	%	0.70%	4 to 36	$	5,080



Total	$	31,356	$	1,144	$	6,562	$	14,532	$	53,594	0.25	%



(in thousands)	June 30, 2024		December 31, 2023

Bank-issued floating rate senior unsecured credit-linked notes due 2024	$	—	$	199,499
Bank-issued 5.25% fixed rate subordinated notes due 2026	174,587		174,457
Company-issued 4.00% fixed rate subordinated notes due 2031	372,004		371,785
Trust preferred floating rate subordinated debentures due 2032 to 2036	113,406		113,406
Total long-term debt	$	659,997	$	859,147


(in thousands)	Commercial		Mortgage Finance		Commercial Real Estate		Consumer		Total
Six Months Ended June 30, 2024
Beginning balance	$	36,040	$	6	$	10,147	$	169	$	46,362
Provision for off-balance sheet credit losses	1,222		23		(2,363)		75		(1,043)
Ending balance	$	37,262	$	29	$	7,784	$	244	$	45,319
Six Months Ended June 30, 2023
Beginning balance	$	16,550	$	—	$	5,222	$	21	$	21,793
Provision for off-balance sheet credit losses	17,187		—		5,693		97		22,977
Ending balance	$	33,737	$	—	$	10,915	$	118	$	44,770


(in thousands)							June 30, 2024		December 31, 2023

Commitments to extend credit - period end balance							$	8,934,459	$	9,749,085
Standby letters of credit - period end balance							518,824		595,079


(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Non-accrual(1)		Current		Total		Non-accrual With No Allowance
June 30, 2024
Commercial	$	12,050	$	6,092	$	286	$	18,428	$	83,772	$	10,431,730	$	10,533,930	$	13,035
Mortgage finance	—		—		—		—		—		5,078,161		5,078,161		—
Commercial real estate	—		—		—		—		265		5,688,829		5,689,094		—
Consumer	1,975		—		—		1,975		984		554,992		557,951		984
Total	$	14,025	$	6,092	$	286	$	20,403	$	85,021	$	21,753,712	$	21,859,136	$	14,019


(in thousands)	30-89 Days Past Due		90+ Days Past Due		Non-Accrual		Current		Total
June 30, 2024
Commercial	$	—	$	—	$	11,297	$	30,757	$	42,054

Commercial real estate	—		—		—		15,831		15,831

Total	$	—	$	—	$	11,297	$	46,588	$	57,885
June 30, 2023
Commercial	$	—	$	—	$	6,723	$	46,871	$	53,594



Total	$	—	$	—	$	6,723	$	46,871	$	53,594


					June 30, 2024				December 31, 2023
(dollars in thousands)	Minimum Capital Required(2)		Capital Required to be Well Capitalized		Capital Amount		Ratio		Capital Amount		Ratio
The Company
CET1 capital (to risk-weighted assets)	7.00	%	N/A		$	3,244,124	11.62	%	$	3,264,609	12.65	%
Tier 1 capital (to risk-weighted assets)	8.50	%	6.00	%	3,654,124		13.09	%	3,674,609		14.24	%
Total capital (to risk-weighted assets)	10.50	%	10.00	%	4,370,026		15.65	%	4,405,575		17.07	%
Tier 1 capital (to average assets)(1)	4.00	%	N/A		3,654,124		12.15	%	3,674,609		12.21	%
The Bank
CET1 capital (to risk-weighted assets)	7.00	%	6.50	%	$	3,646,438	13.16	%	$	3,599,919	14.01	%
Tier 1 capital (to risk-weighted assets)	8.50	%	8.00	%	3,646,438		13.16	%	3,599,919		14.01	%
Total capital (to risk-weighted assets)	10.50	%	10.00	%	3,990,336		14.40	%	3,959,100		15.41	%
Tier 1 capital (to average assets)(1)	4.00	%	5.00	%	3,646,438		12.21	%	3,599,919		12.00	%


(in thousands except period data)	June 30, 2024
Unrecognized compensation expense related to unvested stock-settled awards	$	25,772
Weighted average period over which stock-settled awards expense is expected to be recognized, in years	1.8
Unrecognized compensation expense related to cash-settled units	$	10,685
Weighted average period over which cash-settled units expense is expected to be recognized, in years	2.7


	Fair Value Measurements Using
(in thousands)	Level 1		Level 2		Level 3
June 30, 2024
Available-for-sale debt securities:(1)
U.S. Treasury securities	$	388,158	$	—	$	—
U.S. government agency securities	—		106,209		—
Residential mortgage-backed securities	—		2,976,536		—


CRT securities	—		—		12,328
Equity securities(1)(2)	58,197		16,035		—
Mortgage loans held for sale(3)	—		424		—
Loans held for investment(4)	—		—		18,007

Derivative assets(5)	—		11,292		—
Securities sold not yet purchased(6)	33,359		—		—
Derivative liabilities(5)	—		72,160		—
Non-qualified deferred compensation plan liabilities(7)	20,602		—		—
December 31, 2023
Available-for-sale debt securities:(1)
U.S. Treasury securities	$	636,473	$	—	$	—
U.S. government agency securities	—		106,592		—
Residential mortgage-backed securities	—		2,470,832		—


CRT securities	—		—		11,995
Equity securities(1)(2)	40,661		11,164		—
Mortgage loans held for sale(3)	—		706		—
Loans held for investment(4)	—		—		38,341
Derivative assets(5)	—		32,944		—
Securities sold not yet purchased(6)	10,602		—		—
Derivative liabilities(5)	—		70,917		—
Non-qualified deferred compensation plan liabilities(7)	20,387		—		—


							Net Gains/(Losses)
(in thousands)	Balance at Beginning of Period		Purchases / Additions		Sales / Reductions		Realized		Unrealized		Balance at End of Period
Three Months Ended June 30, 2024
Available-for-sale debt securities:(1)

CRT securities	$	12,261	$	—	$	(291)	$	—	$	358	$	12,328

Three Months Ended June 30, 2023
Available-for-sale debt securities:(1)

CRT securities	$	11,928	$	—	$	(281)	$	—	$	109	$	11,756

Six Months Ended June 30, 2024
Available-for-sale debt securities:(1)

CRT securities	$	11,995	$	—	$	(500)	$	—	$	833	$	12,328

Six Months Ended June 30, 2023
Available-for-sale debt securities:(1)

CRT securities	$	11,861	$	—	$	(487)	$	—	$	382	$	11,756


	Carrying Amount		Estimated Fair Value
(in thousands)			Total		Level 1		Level 2		Level 3
June 30, 2024
Financial assets:
Cash and cash equivalents	$	2,913,079	$	2,913,079	$	2,913,079	$	—	$	—
Available-for-sale debt securities	3,483,231		3,483,231		388,158		3,082,745		12,328
Held-to-maturity debt securities	831,513		718,910		—		718,910		—
Equity securities	74,232		74,232		58,197		16,035		—
Loans held for sale	36,785		36,785		—		9,584		27,201
Loans held for investment, net	21,511,433		21,466,288		—		—		21,466,288
Derivative assets	11,292		11,292		—		11,292		—
Financial liabilities:
Total deposits	23,818,327		23,823,172		—		—		23,823,172
Short-term borrowings	1,675,000		1,675,000		—		1,675,000		—
Long-term debt	659,997		611,134		—		611,134		—
Securities sold not yet purchased	33,359		33,359		33,359		—		—
Derivative liabilities	72,160		72,160		—		72,160		—
December 31, 2023
Financial assets:
Cash and cash equivalents	$	3,242,850	$	3,242,850	$	3,242,850	$	—	$	—
Available-for-sale debt securities	3,225,892		3,225,892		636,473		2,577,424		11,995
Held-to-maturity debt securities	865,477		763,844		—		763,844		—
Equity securities	51,825		51,825		40,661		11,164		—
Loans held for sale	44,105		44,105		15,000		29,105		—
Loans held for investment, net	20,090,585		20,050,974		—		—		20,050,974
Derivative assets	32,944		32,944		—		32,944		—
Financial liabilities:
Total deposits	22,371,839		22,379,452		—		—		22,379,452
Short-term borrowings	1,500,000		1,500,000		—		1,500,000		—
Long-term debt	859,147		801,309		—		801,309		—
Securities sold not yet purchased	10,602		10,602		10,602		—		—
Derivative liabilities	70,917		70,917		—		70,917		—


(in thousands)	Cash Flow Hedges		Available-for-Sale Securities		Held-to-Maturity Securities		Total
Three Months Ended June 30, 2024
Beginning balance	$	(53,544)	$	(285,238)	$	(41,104)	$	(379,886)
Change in unrealized gain/(loss)	(8,738)		(5,201)		—		(13,939)
Amounts reclassified into net income	18,114		—		1,711		19,825
Total other comprehensive income/(loss)	9,376		(5,201)		1,711		5,886
Income tax expense/(benefit)	1,047		(6,880)		(435)		(6,268)
Total other comprehensive income/(loss), net of tax	8,329		1,679		2,146		12,154
Ending balance	$	(45,215)	$	(283,559)	$	(38,958)	$	(367,732)
Three Months Ended June 30, 2023
Beginning balance	$	(46,916)	$	(281,063)	$	(46,783)	$	(374,762)
Change in unrealized gain/(loss)	(59,057)		(40,674)		—		(99,731)
Amounts reclassified into net income	14,919		—		1,843		16,762
Total other comprehensive income/(loss)	(44,138)		(40,674)		1,843		(82,969)
Income tax expense/(benefit)	(9,269)		(8,541)		387		(17,423)
Total other comprehensive income/(loss), net of tax	(34,869)		(32,133)		1,456		(65,546)
Ending balance	$	(81,785)	$	(313,196)	$	(45,327)	$	(440,308)

Six Months Ended June 30, 2024
Beginning balance	$	(45,749)	$	(273,806)	$	(42,449)	$	(362,004)
Change in unrealized gain/(loss)	(36,611)		(19,671)		—		(56,282)
Amounts reclassified into net income	36,120		—		3,413		39,533
Total other comprehensive income/(loss)	(491)		(19,671)		3,413		(16,749)
Income tax expense/(benefit)	(1,025)		(9,918)		(78)		(11,021)
Total other comprehensive income/(loss), net of tax	534		(9,753)		3,491		(5,728)
Ending balance	$	(45,215)	$	(283,559)	$	(38,958)	$	(367,732)
Six Months Ended June 30, 2023
Beginning balance	$	(66,394)	$	(304,309)	$	(48,240)	$	(418,943)
Change in unrealized gain/(loss)	(45,529)		(11,249)		—		(56,778)
Amounts reclassified into net income	26,048		—		3,687		29,735
Total other comprehensive income/(loss)	(19,481)		(11,249)		3,687		(27,043)
Income tax expense/(benefit)	(4,090)		(2,362)		774		(5,678)
Total other comprehensive income/(loss), net of tax	(15,391)		(8,887)		2,913		(21,365)
Ending balance	$	(81,785)	$	(313,196)	$	(45,327)	$	(440,308)



	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands except per share data)	2024			2023			2024			2023
Net interest income	$	216,582		$	231,990		$	431,591		$	467,335
Provision for credit losses	20,000			7,000			39,000			35,000
Non-interest income	50,424			46,011			91,743			83,414
Non-interest expense	188,409			181,644			390,802			375,671
Income before income taxes	58,597			89,357			93,532			140,078
Income tax expense	16,935			20,706			25,728			32,766
Net income	41,662			68,651			67,804			107,312
Preferred stock dividends	4,312			4,312			8,625			8,625
Net income available to common stockholders	$	37,350		$	64,339		$	59,179		$	98,687
Basic earnings per common share	$	0.80		$	1.34		$	1.26		$	2.05
Diluted earnings per common share	$	0.80		$	1.33		$	1.25		$	2.02
Net interest margin	3.01		%	3.29		%	3.02		%	3.31		%
Return on average assets (“ROA”)	0.56		%	0.95		%	0.46		%	0.74		%
Return on average common equity (“ROE”)	5.26		%	9.17		%	4.14		%	7.15		%
Efficiency ratio(1)	70.6		%	65.3		%	74.7		%	68.2		%
Non-interest income to average earning assets	0.71		%	0.66		%	0.65		%	0.60		%
Non-interest expense to average earning assets	2.65		%	2.61		%	2.77		%	2.69		%


	Three Months Ended June 30, 2024						Three Months Ended June 30, 2023
(in thousands except percentages)	Average Balance		Income/ Expense		Yield/ Rate		Average Balance		Income/ Expense		Yield/ Rate
Assets
Investment securities(2)	$	4,427,023	$	33,584	2.80	%	$	4,306,881	$	27,478	2.36	%
Interest-bearing cash and cash equivalents	3,273,069		43,233		5.31	%	3,286,091		41,571		5.07	%
Loans held for sale	28,768		683		9.55	%	28,414		599		8.46	%
Loans held for investment, mortgage finance(4)	4,357,288		42,722		3.94	%	4,376,235		49,425		4.53	%
Loans held for investment(3)(4)	16,750,788		301,910		7.25	%	16,217,314		282,956		7.00	%
Less: Allowance for credit losses on loans	263,145		—		—		261,027		—		—
Loans held for investment, net	20,844,931		344,632		6.65	%	20,332,522		332,381		6.56	%
Total earning assets	28,573,791		422,132		5.86	%	27,953,908		402,029		5.69	%
Cash and other assets	1,177,061						1,049,145
Total assets	$	29,750,852					$	29,003,053
Liabilities and Stockholders’ Equity
Transaction deposits	$	2,061,622	$	16,982	3.31	%	$	1,345,742	$	9,468	2.82	%
Savings deposits	11,981,668		143,173		4.81	%	10,590,558		114,275		4.33	%
Time deposits	1,658,899		21,125		5.12	%	1,531,922		13,648		3.57	%

Total interest bearing deposits	15,702,189		181,280		4.64	%	13,468,222		137,391		4.09	%
Short-term borrowings	927,253		12,749		5.53	%	1,397,253		18,253		5.24	%
Long-term debt	778,401		11,457		5.92	%	883,871		14,282		6.48	%
Total interest bearing liabilities	17,407,843		205,486		4.75	%	15,749,346		169,926		4.33	%
Non-interest bearing deposits	8,647,594						9,749,105
Other liabilities	537,754						389,155
Stockholders’ equity	3,157,661						3,115,447
Total liabilities and stockholders’ equity	$	29,750,852					$	29,003,053
Net interest income			$	216,646					$	232,103
Net interest margin					3.01	%					3.29	%

SEC Form 10-Q filed by Texas Capital Bancshares Inc.

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	Three Months Ended June 30, 2024/2023						Six Months Ended June 30, 2024/2023
	Net Change		Change Due To(1)				Net Change		Change Due To(1)
(in thousands)			Volume		Yield/Rate(2)				Volume		Yield/Rate(2)
Interest income
Investment securities	$	6,106	$	707	$	5,399	$	12,958	$	2,083	$	10,875
Interest bearing cash and cash equivalents	1,662		(165)		1,827		(6,419)		(17,138)		10,719
Loans held for sale	84		7		77		330		175		155
Loans held for investment, mortgage finance	(6,703)		(214)		(6,489)		(12,667)		2,446		(15,113)
Loans held for investment	18,954		9,310		9,644		58,020		24,824		33,196
Total interest income	20,103		9,645		10,458		52,222		12,390		39,832
Interest expense
Transaction deposits	7,514		5,033		2,481		20,519		11,197		9,322
Savings deposits	28,898		15,018		13,880		59,981		17,064		42,917
Time deposits	7,477		1,130		6,347		18,895		3,282		15,613
Short-term borrowings	(5,504)		(6,140)		636		(7,465)		(10,107)		2,642
Long-term debt	(2,825)		(1,704)		(1,121)		(3,822)		(2,879)		(943)
Total interest expense	35,560		13,337		22,223		88,108		18,557		69,551
Net interest income	$	(15,457)	$	(3,692)	$	(11,765)	$	(35,886)	$	(6,167)	$	(29,719)


	June 30, 2024		June 30, 2023
Allowance for credit losses on loans to total loans held for investment	1.23	%	1.11	%
Allowance for credit losses on loans to average total loans held for investment(1)	1.30	%	1.20	%
Total allowance for credit losses to total loans held for investment	1.44	%	1.32	%
Total provision for credit losses to average total loans held for investment(1)(2)	0.20	%	0.36	%


(in thousands)	0-3 months		4-12 months		1-3 years		3+ years		Total
Assets
Interest bearing cash and cash equivalents	$	2,691,352	$	—	$	—	$	—	$	2,691,352
Investment securities(1)	86,852		885		610,385		3,690,854		4,388,976
Variable loans	19,906,327		396,319		153,283		282,909		20,738,838
Fixed loans	41,159		147,735		195,024		773,165		1,157,083
Total loans(2)	19,947,486		544,054		348,307		1,056,074		21,895,921
Total interest sensitive assets	$	22,725,690	$	544,939	$	958,692	$	4,746,928	$	28,976,249
Liabilities
Interest bearing customer deposits	$	14,124,509	$	—	$	—	$	—	$	14,124,509
CDs	519,094		1,170,262		16,508		239		1,706,103

Total interest bearing deposits	14,643,603		1,170,262		16,508		239		15,830,612
Short-term borrowings	1,675,000		—		—		—		1,675,000
Long-term debt	113,406		—		174,587		372,004		659,997
Total borrowings	1,788,406		—		174,587		372,004		2,334,997
Total interest sensitive liabilities	$	16,432,009	$	1,170,262	$	191,095	$	372,243	$	18,165,609
GAP	$	6,293,681	$	(625,323)	$	767,597	$	4,374,685	$	—
Cumulative GAP	$	6,293,681	$	5,668,358	$	6,435,955	$	10,810,640	$	10,810,640
Non-interest bearing deposits									7,987,715
Stockholders’ equity									3,175,601
Total									$	11,163,316


	Annualized Hypothetical Change in Net Interest Income
		June 30, 2024		June 30, 2023
+ 200 basis points		4.1	%	5.2	%
+ 100 basis points		2.1	%	2.6	%
- 100 basis points		(5.0)	%	(3.8)	%
- 200 basis points		(10.0)	%	(7.8)	%


				Total Number of	Approximate Dollar Value
				Shares Purchased as Part	of Shares That May Yet
	Total Number of	Average Price Paid		of Publicly Announced	Be Purchased Under the
	Shares Purchased	per Share(1)		Plans or Programs(2)	Plans or Programs(1)(2)
First Quarter
January 2024	—	$	—	—	$	150,000,000
February 2024	112,215	58.23		112,215	143,466,072
March 2024	417,123	59.55		417,123	118,624,951
Total	529,338	$	59.27	529,338	$	118,624,951
Second Quarter
April 2024	393,914	$	58.46	393,914	$	95,596,029
May 2024	41,597	58.64		41,597	93,156,593
June 2024	416,587	57.78		416,587	69,085,247
Total	852,098	$	58.14	852,098	$	69,085,247










Year to date total	1,381,436	$	58.57	1,381,436	$	69,085,247


31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act*
31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act*
32.1			Section 1350 Certification of Chief Executive Officer**
32.2			Section 1350 Certification of Chief Financial Officer**
101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH			XBRL Taxonomy Extension Schema Document*
101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB			XBRL Taxonomy Extension Label Linkbase Document*
101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document*
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)


/s/ J. Matthew Scurlock
J. Matthew Scurlock
Chief Financial Officer
(Duly authorized officer and principal financial officer)

Date	Price Target	Rating	Analyst
10/18/2024	$73.00 → $79.00	Market Perform	Hovde Group
10/18/2024	$77.00 → $82.00	Overweight → Neutral	Piper Sandler
9/23/2024	$66.00 → $73.00	Market Perform	Hovde Group
9/17/2024	$78.00	Mkt Perform → Outperform	Raymond James
9/9/2024	$51.00 → $77.00	Underperform → Buy	BofA Securities
7/22/2024	$60.00	Neutral → Sell	Citigroup
4/19/2024	$87.50 → $61.50	Market Perform	Hovde Group
4/4/2024		Strong Buy → Mkt Perform	Raymond James