Press Release

Texas Capital Bancshares Announces Operating Results for Q2 2009

Company Release - 7/22/2009 4:02 PM ET

DALLAS--(BUSINESS WIRE)-- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the second quarter of 2009.

    --  Loans held for investment increased 5% and total loans increased 7% on a
        linked quarter basis and grew 14% and 18%, respectively, from Q2 2008
    --  Demand deposits grew 20% and total deposits increased 21% on a linked
        quarter basis and grew 20% and 1%, respectively, from Q2 2008
    --  Net income increased 6% on a linked quarter basis and increased 12% from
        Q2 2008
    --  Net income available to common shareholders decreased 61% on a linked
        quarter basis and decreased 65% from Q2 2008 as a result of the TARP
        repurchase
    --  EPS decreased 65% on a linked quarter basis and decreased 73% from Q2
        2008

"We are pleased to report another good quarter with strong core earnings and exceptional growth in demand deposits," said George Jones, CEO. "With our continued quality growth in loans and an improved net interest margin, we are confident that our business model is producing the results we expect. As we go forward and add new people and relationships, we will continue to build a growing bank with a profitable future."

FINANCIAL SUMMARY
(dollars and shares in thousands)


                                Q2 2009        Q2 2008        % Change

QUARTERLY OPERATING RESULTS

Net Income(1)                   $ 6,482        $ 5,800        12  %

Net Income Available to Common  $ 2,029        $ 5,800        (65 )%
Shareholders(1)

Diluted EPS(1)                  $ .06          $ .22          (73 )%

ROA(1)                            .49       %    .53       %

ROE(1)                            5.45      %    7.40      %

Diluted Shares                    33,866         26,805

BALANCE SHEET

Total Assets(1)                 $ 5,303,800    $ 4,662,507    14  %

Demand Deposits                   730,034        610,629      20  %

Total Deposits                    3,643,582      3,593,077    1   %

Loans Held for Investment         4,211,304      3,704,262    14  %

Total Loans(1)                    4,755,956      4,033,100    18  %

Stockholders' Equity              464,026        314,917      47  %



(1) From continuing operations

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income from continuing operations of $6.5 million for the quarter ended June 30, 2009 compared to $5.8 million for the second quarter of 2008. During the quarter, we repurchased all outstanding preferred stock that was previously issued to the Treasury. As a result of the repurchase, the $3.9 million accelerated deemed dividend, combined with the previously scheduled preferred dividend of $523,000 resulted in a total dividend of $4.4 million during the second quarter of 2009. As a result, net income available to common shareholders from continuing operations was $2.0 million for the quarter compared to $5.8 million for the second quarter of 2008. On a fully diluted basis, earnings per common share from continuing operations were $.06 for the three months ended June 30, 2009, compared to $.22 for the same quarter last year. The effect of the TARP preferred stock dividends net of income earned on the TARP proceeds reduced earnings per share by $.13 for the three months ended June 30, 2009. Shares for the second quarter of 2009 were also affected by the issuance of 4 million shares in September 2008 and an additional 4.6 million shares in May 2009. Diluted shares increased by 26 percent from the second quarter of 2008 and 9 percent from the first quarter of 2009. The discussion below relates only to continuing operations.

Return on average equity was 5.45 percent and return on average assets was .49 percent for the second quarter of 2009, compared to 7.40 percent and .53 percent, respectively for the second quarter of 2008. The reduction in the ROE resulted from the 47 percent increase in stockholders' equity from two equity offerings since June 30, 2008.

Net interest income was $48.8 million for the second quarter of 2009, compared to $38.2 million for the second quarter of 2008. The increase was due to an increase in average earning assets of $847.0 million over levels reported in the second quarter of 2008. The increase in average earning assets included a $527.6 million increase in average loans held for investment and an increase of $410.4 million in average loans held for sale, offset by a decrease of $78.3 million in average securities. The net interest margin in the second quarter of 2009 was 3.88 percent, a 23 basis point increase from the second quarter of 2008 and a 49 basis point increase from the first quarter of 2009 due to low funding costs and our ability to maintain and improve yields on our earning assets.

Average total deposits increased by $159.3 million from the second quarter of 2008 and increased by $77.2 million from the first quarter of 2009. For the same periods, the average balance of demand deposits increased by $211.2 million, or 41 percent, to $724.5 million from $513.3 million during the second quarter of 2008 and increased $87.8 million, or 14 percent, from the first quarter of 2009.

As a result of the overall economic downturn, we have experienced increases in levels of non-performing assets and exposure to credit losses. The Company recorded an $11.0 million provision for loan losses in the second quarter of 2009, compared to $8.0 million in the second quarter of 2008 and $8.5 million in the first quarter of 2009. The second quarter provision resulted in an increase in the reserve to 1.35 percent of loans held for investment as compared to 1.04 percent at June 30, 2008, and 1.31 percent at the end of the first quarter of 2009. In management's opinion, the reserve is adequate and is derived from consistent application of the methodology for establishing the adequacy of reserves for Texas Capital Bank's loan portfolio. In the second quarter of 2009, net charge-offs were $6.8 million, compared to net charge-offs of $3.6 million in the second quarter of 2008 and net charge-offs of $2.6 million in the first quarter of 2009. Non-accrual loans were $49.6 million, or 1.18 percent, of loans at the end of the second quarter of 2009, compared to $16.8 million, or .45 percent of loans at the end of the second quarter of 2008, and $50.7 million, or 1.26 percent of loans at the end of the first quarter of 2009. At June 30, 2009, total other real estate owned was $31.4 million compared to $5.6 million at the end of the second quarter of 2008, and $27.5 million at the end of the first quarter of 2009.

Non-interest income for the second quarter of 2009 increased $1.4 million, or 23 percent, to $7.4 million from $6.0 million in the second quarter of 2008. The increase is primarily related to a $2.0 million increase in brokered loan fees and a $326,000 increase in service charge income, offset by a $254,000 decrease in trust fee income.

Non-interest expense for the second quarter of 2009 increased $8.1 million, or 30 percent, to $35.4 million from $27.3 million in the second quarter of 2008. The increase is primarily related to a $2.6 increase in salaries and employee benefits to $18.0 million from $15.4 million, which was primarily due to general business growth. Additionally, FDIC assessment expense increased $3.1 million from the second quarter 2008, and the second quarter 2009 includes a special FDIC assessment of $ $2.4 million, or $0.05 per share, after tax.

Stockholders equity increased by 47 percent from $314.9 million in June 2008 to $464.0 million at the end of the second quarter of 2009. Contributing to the increase was retained net income of $24.3 million and proceeds of sales of common stock totaling $114.4 million. In September 2008, we raised $55.0 million in common equity from institutional investors and in May 2009 we completed a public offering totaling $59.4 million. In January 2009, we completed the issuance of $75.0 million of perpetual preferred stock and related warrants under the U.S. Department of Treasury's voluntary Capital Purchase Program ("the Program"), but repurchased the preferred stock in May 2009. The Bank is well capitalized under regulatory guidelines and at June 30, 2009, the Company's ratio of tangible common equity to total tangible assets was 8.6%

ABOUT TEXAS CAPITAL BANCSHARES, INC.

Texas Capital Bancshares, Inc. (NASDAQ: TCBI) is the parent company of Texas Capital Bank, a commercial bank that delivers highly personalized financial services to businesses and private clients. Headquartered in Dallas, the Bank has full-service locations in Austin, Dallas, Fort Worth, Houston and San Antonio.

This release contains forward-looking statements, which are subject to risks and uncertainties. A number of factors, many of which are beyond Texas Capital Bancshares' control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include the risk of adverse impacts from general economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. These and other factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Form 10-K and other filings made by Texas Capital Bancshares with the Securities and Exchange Commission.


TEXAS CAPITAL BANCSHARES, INC.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

(Dollars in thousands except per share data)

               2nd Quarter     1st Quarter     4th Quarter     3rd Quarter     2nd Quarter

                 2009            2009            2008            2008            2008

CONSOLIDATED
STATEMENT OF
INCOME

Interest       $ 60,013        $ 55,806        $ 58,873        $ 62,240        $ 61,008
income

Interest         11,211          14,589          20,161          23,974          22,848
expense

Net interest     48,802          41,217          38,712          38,266          38,160
income

Provision for    11,000          8,500           11,000          4,000           8,000
loan losses

Net interest
income after     37,802          32,717          27,712          34,266          30,160
provision for
loan losses

Non-interest     7,416           6,900           5,950           4,885           5,952
income

Non-interest     35,373          30,306          28,443          27,675          27,256
expense

Income from
continuing
operations       9,845           9,311           5,219           11,476          8,856
before income
taxes

Income tax       3,363           3,186           1,732           3,911           3,056
expense

Income from
continuing       6,482           6,125           3,487           7,565           5,800
operations

Loss from
discontinued     (44        )    (95        )    (100       )    (252       )    (116       )
operations
(after-tax)

Net income       6,438           6,030           3,387           7,313           5,684

Preferred
stock            4,453           930             -               -               -
dividends

Net income
available to   $ 1,985         $ 5,100         $ 3,387         $ 7,313         $ 5,684
common
shareholders

Diluted EPS
from           $ .06           $ .17           $ .11           $ .27           $ .22
continuing
operations

Diluted EPS    $ .06           $ .16           $ .11           $ .26           $ .21

Diluted          33,866,237      31,072,444      31,037,610      27,792,938      26,805,358
shares

CONSOLIDATED
BALANCE SHEET
DATA

Total assets   $ 5,303,800     $ 5,009,931     $ 5,139,564     $ 4,742,043     $ 4,662,507

Loans held
for              4,211,304       4,019,247       4,027,871       3,840,172       3,704,262
investment

Loans held       544,652         426,982         496,351         343,002         328,838
for sale

Securities       308,187         361,898         378,752         365,145         390,223

Demand           730,034         608,939         587,161         561,227         610,629
deposits

Total            3,643,582       3,010,960       3,333,187       3,388,963       3,593,077
deposits

Other            1,059,572       1,386,783       1,280,607       835,025         621,127
borrowings

Long-term        113,406         113,406         113,406         113,406         113,406
debt

Stockholders'    464,026         471,990         387,073         380,858         314,917
equity

End of period    35,688,661      31,014,575      30,971,189      30,844,202      26,780,386
shares

Book value
(excluding     $ 12.87         $ 12.64         $ 12.44         $ 12.33         $ 11.80
securities
gains/losses)

Tangible book
value
(excluding     $ 12.66         $ 12.39         $ 12.19         $ 12.08         $ 11.51
securities
gains/losses)

SELECTED
FINANCIAL
RATIOS

From
continuing
operations

Net interest     3.88       %    3.39       %    3.41       %    3.47       %    3.65       %
margin

Return on
average          .49        %    .48        %    .29        %    .65        %    .53        %
assets

Return on
average          5.45       %    5.44       %    3.61       %    9.12       %    7.40       %
equity

Non-interest
income to        .59        %    .56        %    .52        %    .44        %    .57        %
earning
assets

Efficiency       62.9       %    63.0       %    63.7       %    64.1       %    61.8       %
ratio

Non-interest
expense to       2.80       %    2.48       %    2.49       %    2.49       %    2.59       %
earning
assets

From
consolidated

Net interest     3.88       %    3.39       %    3.41       %    3.47       %    3.65       %
margin

Return on
average          .48        %    .47        %    .28        %    .63        %    .52        %
assets

Return on
average          5.41       %    5.36       %    3.50       %    8.81       %    7.25       %
equity

Tangible
common equity
to total         8.6        %    7.8        %    7.4        %    7.9        %    6.6        %
tangible
assets

Tier 1           11.2       %    11.9       %    10.0       %    10.5       %    9.3        %
capital ratio

Total capital    12.3       %    13.0       %    10.9       %    11.4       %    10.3       %
ratio

Tier 1
leverage         10.6       %    11.0       %    10.2       %    10.5       %    9.3        %
ratio




TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

                                           June 30,       June 30,       %

                                           2009           2008           Change

Assets

Cash and due from banks                    $ 74,478       $ 97,835       (24  )%

Federal funds sold                           6,000          17,350       (65  )%

Securities, available-for-sale               308,187        390,223      (21  )%

Loans held for sale                          544,652        328,838      66   %

Loans held for sale from discontinued        578            729          (21  )%
operations

Loans held for investment (net of            4,211,304      3,704,262    14   %
unearned income)

Less: Allowance for loan losses              56,893         38,460       45   %

Loans held for investment, net               4,154,411      3,665,802    13   %

Premises and equipment, net                  11,088         5,839        90   %

Accrued interest receivable and other        197,376        148,850      34   %
assets

Goodwill and intangibles, net                7,608          7,770        (2   )%

Total assets                               $ 5,304,378    $ 4,663,236    14   %

Liabilities and Stockholders' Equity

Liabilities:

Deposits:

Non-interest bearing                       $ 730,034      $ 610,629      20   %

Interest bearing                             2,530,562      2,234,277    13   %

Interest bearing in foreign branches         382,986        748,171      (49  )%

Total deposits                               3,643,582      3,593,077    1    %

Accrued interest payable                     2,900          6,130        (53  )%

Other liabilities                            20,892         14,579       55   %

Federal funds purchased                      632,945        398,178      59   %

Repurchase agreements                        61,816         19,412       218  %

Other short-term borrowings                  364,811        203,537      79   %

Trust preferred subordinated debentures      113,406        113,406      -

Total liabilities                            4,840,352      4,348,319    11   %

Stockholders' equity:

Common stock, $.01 par value:

Authorized shares - 100,000,000

Issued shares - 35,688,661 and 26,780,386    357            268          33   %
at June 30, 2009 and 2008, respectively

Additional paid-in capital                   321,987        196,710      64   %

Retained earnings                            136,936        119,151      15   %

Treasury stock (shares at cost: 417 at
June 30, 2009 and 84,691 at June 30,         (8        )    (581      )  (99  )%
2008)

Deferred compensation                        -              573          (100 )%

Accumulated other comprehensive income       4,754          (1,204    )  495  %
(loss), net of taxes

Total stockholders' equity                   464,026        314,917      48   %

Total liabilities and stockholders'        $ 5,304,378    $ 4,663,236    14   %
equity




TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands except per share data)

                                Three Months Ended      Six Months Ended

                                June 30                 June 30

                                  2009        2008        2009         2008

Interest income

Interest and fees on loans      $ 56,455    $ 56,389    $ 108,367    $ 118,286

Securities                        3,544       4,550       7,395        9,410

Federal funds sold                9           61          24           101

Deposits in other banks           5           8           33           20

Total interest income             60,013      61,008      115,819      127,817

Interest expense

Deposits                          8,769       16,715      20,348       38,439

Federal funds purchased           740         1,963       1,358        4,913

Repurchase agreements             14          54          28           376

Other borrowings                  570         2,652       1,748        5,979

Trust preferred subordinated      1,118       1,464       2,318        3,351
debentures

Total interest expense            11,211      22,848      25,800       53,058

Net interest income               48,802      38,160      90,019       74,759

Provision for loan losses         11,000      8,000       19,500       11,750

Net interest income after         37,802      30,160      70,519       63,009
provision for loan losses

Non-interest income

Service charges on deposit        1,614       1,288       3,139        2,405
accounts

Trust fee income                  952         1,206       1,836        2,422

Bank owned life insurance         423         315         697          626
(BOLI) income

Brokered loan fees                2,670       671         4,702        1,144

Equipment rental income           1,453       1,510       2,909        3,026

Other                             304         962         1,033        2,012

Total non-interest income         7,416       5,952       14,316       11,635

Non-interest expense

Salaries and employee benefits    18,000      15,369      34,219       30,711

Net occupancy expense             3,387       2,432       6,141        4,797

Leased equipment depreciation     1,115       1,179       2,238        2,372

Marketing                         655         649         1,210        1,326

Legal and professional            3,106       2,645       5,177        4,471

Communications and data           979         770         1,815        1,624
processing

FDIC insurance assessment         3,493       359         5,040        722

Other                             4,638       3,853       9,839        7,510

Total non-interest expense        35,373      27,256      65,679       53,533

Income from continuing            9,845       8,856       19,156       21,111
operations before income taxes

Income tax expense                3,363       3,056       6,549        7,281

Income from continuing            6,482       5,800       12,607       13,830
operations

Loss from discontinued            (44    )    (116   )    (139    )    (264    )
operations (after-tax)

Net income                        6,438       5,684       12,468       13,566

Preferred stock dividends         4,453       -           5,383        -

Net income available to common  $ 1,985     $ 5,684     $ 7,085      $ 13,566
stockholders

Basic earnings per common
share:

Income from continuing          $ .06       $ .22       $ .22        $ .52
operations

Net income                      $ .06       $ .21       $ .22        $ .51

Diluted earnings per common
share:

Income from continuing          $ .06       $ .22       $ .22        $ .52
operations

Net income                      $ .06       $ .21       $ .22        $ .51




TEXAS CAPITAL BANCSHARES, INC.

SUMMARY OF LOAN LOSS EXPERIENCE

(Dollars in thousands)

                 2nd Quarter  1st Quarter  4th Quarter  3rd Quarter  2nd Quarter

                   2009         2009         2008         2008         2008

Beginning        $ 52,727     $ 46,835     $ 40,998     $ 38,460     $ 34,021
balance

Loans
charged-off:

Commercial         1,913        1,695        535          592          3,165

Real estate -      -            60           1,195        553          118
construction

Real estate -      1,250        236          3,432        267          464
term

Consumer           -            419          64           129          -

Leases             3,724        226          -            -            -

Total              6,887        2,636        5,226        1,541        3,747

Recoveries:

Commercial         48           21           43           27           165

Consumer           5            -            -            13           -

Leases             -            7            -            12           21

Real estate -      -            -            -            -            -
construction

Real estate -      -            -            20           27           -
term

Total              53           28           63           79           186
recoveries

Net charge-offs    6,834        2,608        5,163        1,462        3,561

Provision for      11,000       8,500        11,000       4,000        8,000
loan losses

Ending balance   $ 56,893     $ 52,727     $ 46,835     $ 40,998     $ 38,460

Reserve to
loans held for     1.35   %     1.31   %     1.16   %     1.07   %     1.04   %
investment(2)

Reserve to
average loans      1.38   %     1.31   %     1.21   %     1.08   %     1.07   %
held for
investment(2)

Net charge-offs
to average         .66    %     .26    %     .53    %     .15    %     .40    %
loans(1)(2)

Net charge-offs
to average
loans for last     .41    %     .34    %     .35    %     .28    %     .25    %
twelve months
(1)(2)

Provision for
loan losses to     1.07   %     .85    %     1.13   %     .42    %     .89    %
average loans
(1)(2)

Non-performing
assets (NPAs):

Non-accrual      $ 49,592     $ 50,683     $ 47,499     $ 46,579     $ 16,753
loans(4)

Other real
estate owned       31,404       27,501       25,904       5,792        5,615
(OREO)

Total            $ 80,996     $ 78,184     $ 73,403     $ 52,371     $ 22,368

Non-accrual
loans to loans     1.18   %     1.26   %     1.18   %     1.21   %     .45    %
(2)

Total NPAs to      1.91   %     1.93   %     1.81   %     1.36   %     0.60   %
loans plus OREO

Reserve to
non-accrual      1.1x         1.0x         1.0x         .9x          2.3x
loans

Loans past due
90 days and      $ 3,539      $ 4,637      $ 4,115      $ 2,970      $ 22,763
still accruing
(3)

Loans past due
90 days to         .08    %     .12    %     .10    %     .08    %     .61    %
loans(2)



(1) Interim period ratios are annualized.

(2) Excludes loans held for sale.

(3) At June 30, 2009, loans past due 90 days and still accruing includes premium finance loans of $2.3 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.

(4) At June 30, 2009, non-performing assets include $3.0 million of mortgage warehouse loans which were transferred to the loans held for investment portfolio at lower of cost or market, and some were subsequently moved to other real estate owned.


TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

(Dollars in thousands)

                 2nd Quarter  1st Quarter  4th Quarter  3rd Quarter  2nd Quarter

                   2009         2009         2008         2008         2008

Interest income

Interest and     $ 56,455     $ 51,912     $ 54,814     $ 57,909     $ 56,389
fees on loans

Securities         3,544        3,851        4,031        4,281        4,550

Federal funds      9            15           27           40           61
sold

Deposits in        5            28           1            10           8
other banks

Total interest     60,013       55,806       58,873       62,240       61,008
income

Interest
expense

Deposits           8,769        11,579       16,075       18,338       16,715

Federal funds      740          618          1,046        2,273        1,963
purchased

Repurchase         14           14           79           86           54
agreements

Other              570          1,178        1,353        1,791        2,652
borrowings

Trust preferred
subordinated       1,118        1,200        1,608        1,486        1,464
debentures

Total interest     11,211       14,589       20,161       23,974       22,848
expense

Net interest       48,802       41,217       38,712       38,266       38,160
income

Provision for      11,000       8,500        11,000       4,000        8,000
loan losses

Net interest
income after       37,802       32,717       27,712       34,266       30,160
provision for
loan losses

Non-interest
income

Service charges
on deposit         1,614        1,525        1,133        1,161        1,288
accounts

Trust fee          952          884          1,036        1,234        1,206
income

Bank owned life
insurance          423          274          315          299          315
(BOLI) income

Brokered loan      2,670        2,032        1,074        1,024        671
fees

Equipment          1,453        1,456        1,482        1,487        1,510
rental income

Other              304          729          910          (320   )     962

Total
non-interest       7,416        6,900        5,950        4,885        5,952
income

Non-interest
expense

Salaries and
employee           18,000       16,219       14,688       16,039       15,369
benefits

Net occupancy      3,387        2,754        2,534        2,300        2,432
expense

Leased
equipment          1,115        1,123        1,142        1,153        1,179
depreciation

Marketing          655          555          882          521          649

Legal and          3,106        2,071        2,793        2,358        2,645
professional

Communications
and data           979          836          832          858          770
processing

FDIC insurance     3,493        1,547        643          432          359
assessment

Other              4,638        5,201        4,929        4,014        3,853

Total
non-interest       35,373       30,306       28,443       27,675       27,256
expense

Income from
continuing
operations         9,845        9,311        5,219        11,476       8,856
before income
taxes

Income tax         3,363        3,186        1,732        3,911        3,056
expense

Income from
continuing         6,482        6,125        3,487        7,565        5,800
operations

Loss from
discontinued       (44    )     (95    )     (100   )     (252   )     (116   )
operations
(after-tax)

Net income         6,438        6,030        3,387        7,313        5,684

Preferred stock    4,453        930          -            -            -
dividends

Net income
available to     $ 1,985      $ 5,100      $ 3,387      $ 7,313      $ 5,684
common
stockholders




TEXAS CAPITAL BANCSHARES, INC.

QUARTERLY FINANCIAL SUMMARY - UNAUDITED

Consolidated Daily Average Balances, Average Yields and Rates

Continuing Operations

(Dollars in thousands)

               2nd Quarter 2009               1st Quarter 2009               4th Quarter 2008                3rd Quarter 2008               2nd Quarter 2008

               Average      Revenue/  Yield/  Average      Revenue/  Yield/  Average      Average   Average  Average      Revenue/  Yield/  Average      Revenue/  Yield/

               Balance      Expense   Rate    Balance      Expense   Rate    Balance      Balance   Balance  Balance      Expense   Rate    Balance      Expense   Rate
                            (1)                            (1)                                                            (1)                            (1)

Assets

Securities -   $ 280,372    $ 3,124   4.47 %  $ 321,802    $ 3,431   4.32 %  $ 313,992    $ 3,610   4.57 %   $ 325,317    $ 3,852   4.71 %  $ 356,445    $ 4,114   4.64 %
Taxable

Securities -
Non-taxable      45,901       646     5.64 %    46,055       646     5.69 %    46,272       648     5.57 %     47,271       660     5.55 %    48,129       671     5.61 %
(2)

Federal funds    5,649        9       0.64 %    14,923       15      0.41 %    23,050       27      0.47 %     8,001        40      1.99 %    11,127       61      2.20 %
sold

Deposits in      12,268       5       0.16 %    11,207       28      1.01 %    5,761        1       0.07 %     2,554        10      1.56 %    1,103        8       2.92 %
other banks

Loans held       656,462      7,775   4.75 %    587,401      6,487   4.48 %    316,409      4,441   5.58 %     288,103      4,137   5.78 %    246,026      3,654   5.97 %
for sale

Loans held
for              4,124,937    48,680  4.73 %    4,022,180    45,425  4.58 %    3,875,586    50,373  5.17 %     3,781,289    53,772  5.66 %    3,597,342    52,735  5.90 %
investment

Less reserve
for loan         51,601       -       -         46,686       -       -         38,145       -       -          38,180       -       -         33,181       -       -
losses

Loans, net of    4,729,798    56,455  4.79 %    4,562,895    51,912  4.61 %    4,153,850    54,814  5.25 %     4,031,212    57,909  5.71 %    3,810,187    56,389  5.95 %
reserve

Total earning    5,073,988    60,239  4.76 %    4,956,882    56,032  4.58 %    4,542,925    59,100  5.18 %     4,414,355    62,471  5.63 %    4,226,991    61,243  5.83 %
assets

Cash and         251,960                        238,723                        218,335                         201,589                        198,946
other assets

Total assets   $ 5,325,948                    $ 5,195,605                    $ 4,761,260                     $ 4,615,944                    $ 4,425,937

Liabilities
and
Stockholders'
Equity

Transaction    $ 135,756    $ 55      0.16 %  $ 129,850    $ 44      0.14 %  $ 103,111    $ 67      0.26 %   $ 103,905    $ 122     0.47 %  $ 111,587    $ 129     0.46 %
deposits

Savings          974,275      2,003   0.82 %    745,355      1,420   0.77 %    729,337      2,350   1.28 %     778,956      3,371   1.72 %    840,933      3,563   1.70 %
deposits

Time deposits    1,082,691    5,105   1.89 %    1,277,824    8,066   2.56 %    1,405,426    10,603  3.00 %     1,275,798    10,524  3.28 %    930,698      8,345   3.61 %

Deposits in
foreign          394,251      1,606   1.63 %    444,549      2,049   1.87 %    555,573      3,055   2.19 %     720,211      4,321   2.39 %    755,593      4,678   2.49 %
branches

Total
interest         2,586,973    8,769   1.36 %    2,597,578    11,579  1.81 %    2,793,447    16,075  2.29 %     2,878,870    18,338  2.53 %    2,638,811    16,715  2.55 %
bearing
deposits

Other            1,404,881    1,324   0.38 %    1,367,691    1,810   0.54 %    881,868      2,478   1.12 %     709,157      4,150   2.33 %    830,482      4,669   2.26 %
borrowings

Trust
preferred        113,406      1,118   3.95 %    113,406      1,200   4.29 %    113,406      1,608   5.64 %     113,406      1,486   5.21 %    113,406      1,464   5.19 %
subordinated
debentures

Total
interest         4,105,260    11,211  1.10 %    4,078,675    14,589  1.45 %    3,788,721    20,161  2.12 %     3,701,433    23,974  2.58 %    3,582,699    22,848  2.56 %
bearing
liabilities

Demand           724,487                        636,704                        566,513                         567,914                        513,327
deposits

Other            18,899                         23,619                         21,323                          16,452                         14,613
liabilities

Stockholders'    477,302                        456,607                        384,703                         330,145                        315,298
equity

Total
liabilities
and            $ 5,325,948                    $ 5,195,605                    $ 4,761,260                     $ 4,615,944                    $ 4,425,937
stockholders'
equity

Net interest                $ 49,028                       $ 41,443                       $ 38,939                        $ 38,497                       $ 38,395
income

Net interest                          3.88 %                         3.39 %                         3.41 %                          3.47 %                         3.65 %
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.


    Source: Texas Capital Bancshares, Inc.
Contact: Texas Capital Bancshares, Inc. Myrna Vance, 214-932-6646 myrna.vance@texascapitalbank.com

Contact Information

Texas Capital Bancshares, Inc.,
2000 McKinney Avenue
Suite 700
Dallas, TX 75201
(214) 932-6600

Investor Relations Contact
Heather Worley
(214) 932-6646
heather.worley@
texascapitalbank.com

Transfer Agent
Computershare Investor Services LLC
Two North Lasalle Street
Third Floor
Chicago, IL 60602
(800) 568-3476
(312) 588-4990

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