Document

Exhibit 99.1



INVESTOR CONTACT		MEDIA CONTACT
Julie Anderson, 214.932.6673		Shannon Wherry, 469.399.8527
[email protected]		[email protected]

TEXAS CAPITAL BANCSHARES, INC. ANNOUNCES OPERATING RESULTS FOR Q2 2020

DALLAS - July 22, 2020 - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the second quarter of 2020.

"As we navigate these unprecedented times with a focus on protecting our employees and our clients, we continue to position the Company for long-term, sustainable earnings growth," said Larry Helm, Executive Chairman and CEO. "Our significant investments in infrastructure and technology over the past few years enabled meaningful cost realignment during the second quarter. We remain vigilant in managing credit, while continuing to selectively recruit and acquire frontline talent."


•	In response to pressures of the current economic environment and a refinement of our strategy, we took actions during the second quarter of 2020 which are expected to decrease our non-interest expenses, including a workforce reduction and write-offs of certain software assets.

•

We reported a net loss of $34.3 million, or $0.73 per diluted share, for the second quarter of 2020, a $17.6 million decline from the first quarter of 2020, resulting from a $40.3 million increase in revenue, comprised of a $58.7 million increase in non-interest income and an $18.4 million decrease in net interest income, offset by a $56.9 million increase to non-interest expense. Significant transactions affecting our income statement during the second quarter of 2020 included:


•	$100.0 million ($1.55 per share) provision for credit losses; driven by an increase in charge-offs and reserve build related to higher criticized loan levels and continued economic uncertainty from the COVID-19 pandemic,


•	$26.6 million ($0.41 per share) in non-recurring software expenses; including $20.7 million in write-offs of certain software assets and $5.9 million in technology expense related to the roll-out of our Paycheck Protection Program capabilities,


•	$18.0 million ($0.28 per share) in severance accruals related to the workforce reduction referenced above,


•	$10.5 million ($0.16 per share) in final merger-related expenses, and


•	$9.1 million ($0.14 per share) in mortgage servicing rights ("MSR") impairment.

While these expenses had a significant impact on our second quarter operating results, we believe that we are better positioned to improve our core profitability going forward as the non-interest expense items are not expected to recur in future periods.

•

In response to the COVID-19 pandemic over 90% of employees have been working virtually since early March with limited impact on the execution of our business and client experience. Additionally, we funded $717.5 million in loans under the Paycheck Protection Program and implemented a short-term loan modification program that complies with the CARES act to provide temporary relief to certain borrowers who meet the program's qualifications.

FINANCIAL SUMMARY



(Dollars and shares in thousands)	Q2 2020			Q2 2019			% Change
QUARTERLY OPERATING RESULTS
Net income/(loss)	$	(34,316	)	$	77,812		(144	)%
Net income/(loss) available to common stockholders	$	(36,753	)	$	75,375		(149	)%
Diluted earnings/(loss) per common share	$	(0.73	)	$	1.50		(149	)%
Diluted common shares	50,416			50,384			—	%
ROA	(0.36		)%	1.05		%
ROE	(5.48		)%	12.20		%
BALANCE SHEET
Loans held for sale ("LHS")	$	454,581		$	1,057,586		(57	)%
Loans held for investment ("LHI"), mortgage finance	8,972,626			7,415,363			21	%
LHI	16,552,203			16,924,535			(2	)%
Total LHI	25,524,829			24,339,898			5	%
Total assets	36,613,127			29,970,384			22	%
Demand deposits	10,835,911			7,685,340			41	%
Total deposits	30,187,695			22,999,077			31	%
Stockholders’ equity	2,734,755			2,647,071			3	%

DETAILED FINANCIALS

During the second quarter of 2020, we have continued to face unprecedented challenges as our country grapples with the continuing impact of the COVID-19 pandemic. Actions by U.S. federal, state and foreign governments to address the pandemic, including travel bans, business and entertainment venue closures and rapid changes in business and consumer behavior, have resulted in continuing high levels of uncertainty. economic weakness and market volatility. Due to these events, on May 22, 2020, we and Independent Bank Group, Inc. ("IBTX"), agreed to mutually terminate our merger agreement. The termination was approved by each company's board of directors after careful consideration of the significant impact of the COVID-19 pandemic on global markets and on the companies' ability to fully realize the benefits expected to be achieved through the merger.

We continue to focus on balance sheet strength and while we intend to operate with above-average liquidity in response to this uncertain economic environment, we believe opportunities exist to improve core earnings by reducing or replacing higher-cost funding sources and improving the earning asset mix. In the first few weeks of July 2020, we began to utilize low-yielding liquidity assets to increase the balance of our securities portfolio in an effort to improve yields during the second half of 2020.

For the second quarter of 2020, we reported a net loss of $34.3 million and net loss available to common stockholders of $36.8 million, compared to net income of $77.8 million and net income available to common stockholders of $75.4 million for the same period in 2019. On a fully diluted basis, earnings/(loss) per common share were $(0.73) for the quarter ended June 30, 2020 compared to $1.50 for the same period of 2019. The decline in net income for the second quarter of 2020 as compared to the same period in 2019 resulted primarily from a $73.0 million increase in the provision for credit losses, as well as an $80.6 million increase in non-interest expense, driven by the significant second quarter 2020 expenses described below, offset by a $46.1 million increase in non-interest income resulting primarily from a $45.0 million increase in net gain/(loss) on sale of loans held for sale.

We recorded a $100.0 million provision for credit losses for the second quarter of 2020 utilizing the Current Expected Credit Loss ("CECL") methodology adopted in the first quarter of 2020, compared to $96.0 million for the first quarter of 2020 and $27.0 million for the second quarter of 2019. The increase in provision for credit losses resulted primarily from an increase in charge-offs and reserve build related to higher criticized loan levels and continued economic uncertainty from the COVID-19 pandemic. We recorded $74.1 million in net charge-offs during the second quarter of 2020, including $62.4 million in energy net charge-offs and $8.1 million in leveraged lending net charge-offs, all of which were loans that had been previously identified as problem loans, compared to $57.7 million during the first quarter of 2020 and $20.0 million during the second quarter of 2019. Criticized loans totaled $1.0 billion at June 30, 2020, compared to $675.9 million at March 31, 2020 and $629.1 million at June 30, 2019. The increase in criticized loans was predominantly in special mention and was primarily due to the continued downgrade of loans that have been impacted by the COVID-19 pandemic or that are in categories that are expected to be more significantly impacted by COVID-19.

Non-performing assets ("NPAs") totaled $174.0 million at June 30, 2020, a decrease of $45.1 million compared to the first quarter of 2020 and an increase of $59.9 million compared to the second quarter of 2019. The linked quarter decrease is primarily related to charge-offs of energy and leveraged lending loans in the second quarter of 2020. Non-accrual energy loans totaled $103.9 million (60% of total NPAs) at June 30, 2020, $39.8 million of which relates to two loans that have been charged down to final resolution value and are expected to close in the third quarter of 2020, compared to $151.9 million at March 31, 2020. Non-accrual leveraged lending loans totaled $24.8 million (14% of total NPAs) at June 30, 2020, compared to $50.0 million at March 31, 2020. The ratio of NPAs to total LHI plus other real estate owned ("OREO") for the second quarter of 2020 was 0.68 percent, compared to 0.90 percent for the first quarter of 2020 and 0.47 percent for the second quarter of 2019.

In response to the COVID-19 pandemic, we implemented a short-term loan modification program in late March 2020 to provide temporary payment relief to borrowers who meet the program's qualifications. This program allows for a deferral of payments for 90 days, which we may extend for an additional 90 days, for a maximum of 180 days on a cumulative basis. The deferred payments along with interest accrued during the deferral period are due and payable on the maturity date of the existing loan. As of June 30, 2020, we have granted temporary modifications on 482 loans (336 during the second quarter of 2020) with a total outstanding loan balance of $1.2 billion, resulting in the deferral of $10.8 million ($7.1 million in the second quarter of 2020) in interest payments.

Net interest income was $209.9 million for the second quarter of 2020, compared to $228.3 million for the first quarter of 2020 and $243.6 million for the second quarter of 2019. The linked quarter decrease in net interest income was due primarily to a decrease in average LHS, as a result of holding purchased loans for shorter durations, as well as decreases in yields on LHI, excluding mortgage finance, and liquidity assets offset by an increase in yields on LHI, mortgage finance, and a decrease in funding costs. The decline in net interest income on LHS resulting from shorter hold times was offset by an increase in non-interest income as noted below. Net interest margin for the second quarter of 2020 was 2.30 percent, a decrease of 48 basis points from the first quarter of 2020 and a decrease of 111 basis points from the second quarter of 2019. The shift in earning assets, primarily the increase in liquidity assets and decrease in loans held for sale, significantly contributed to the decrease in net interest margin. LHI yields, excluding mortgage finance loans, decreased 85 basis points from the first quarter of 2020, and decreased 169 basis points compared to the second quarter of 2019. LHI, mortgage finance yields for the second quarter of 2020 increased 30 basis

points compared to the first quarter of 2020 as a result of decreases in incentive pricing in the second quarter of 2020, and decreased 17 basis points compared to the second quarter of 2019. Additionally, total cost of deposits for the second quarter of 2020 decreased 48 basis points to 0.42 percent compared to 0.90 percent for the first quarter of 2020, and decreased 87 basis points from 1.29 percent for the second quarter of 2019.

Non-interest income increased $58.7 million during the second quarter of 2020 compared to the first quarter of 2020, and increased $46.1 million compared to the second quarter of 2019. The linked quarter increase was primarily related to an increase in net gain/(loss) on sale of LHS, as well as increases in brokered loans fees and other non-interest income. The year-over-year increase was primarily related to an increase in net gain/(loss) on sale of LHS, as well as increases in brokered loan fees and servicing income, partially offset by a decrease in other non-interest income. The linked quarter and year-over-year increase in net gain/(loss) on sale of LHS was due to lower hedge costs in the second quarter of 2020 as a result of holding purchased loans for shorter durations than in prior periods, and is offset by the decline in net interest income on LHS noted above.

Non-interest expense for the second quarter of 2020 increased $56.9 million, or 34 percent, compared to the first quarter of 2020, and increased $80.6 million, or 57 percent, compared to the second quarter of 2019. The linked quarter increase was primarily related to increases in salaries and employee benefits and communications and technology expense. The year-over-year increase was primarily due to increases in salaries and employee benefits, communications and technology expense, servicing-related expenses and merger-related expenses. The year-over-year and linked quarter increases in salaries and employee benefits and communication and technology expense were primarily due to the severance accruals and non-recurring software expenses, respectively, discussed above. The year-over-year increase in servicing-related expenses was primarily due to an increase in MSR amortization, resulting primarily from an increase in the cost basis of our MSR asset as well as from higher mortgage prepayment rates, and an increase in impairment expense.

Texas Capital Bank is well capitalized under regulatory guidelines as of June 30, 2020. Our CET 1, tier 1 capital, total capital and leverage ratios were 8.9%, 9.8%, 11.6% and 7.5%, respectively, at June 30, 2020, compared to 9.3%, 10.2%, 12.0% and 8.5%, respectively, at March 31, 2020. At June 30, 2020, our ratio of tangible common equity to total tangible assets was 7.0% percent compared to 7.3% at March 31, 2020.

About Texas Capital Bancshares, Inc.

Texas Capital Bancshares, Inc. (NASDAQ®: TCBI), a member of the Russell 2000® Index and the S&P MidCap 400®, is the parent company of Texas Capital Bank, a commercial bank that delivers highly personalized financial services to businesses and entrepreneurs. Headquartered in Dallas, the bank has full-service locations in Austin, Dallas, Fort Worth, Houston and San Antonio.

Forward Looking Statements

This communication may be deemed to include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding our financial condition, results of operations, business plans and future performance. These statements are not historical in nature and can generally be identified by such words as “believe,” “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,” “could,” “projects,” “intend” and similar expressions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. A number of factors, many of which are beyond our control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the credit quality of our loan portfolio, general economic conditions in the United States and in our markets, including the continued impact on our customers from volatility in oil and gas prices, the material risks and uncertainties for the U.S. and world economies, and for our business, resulting from the COVID-19 pandemic, expectations regarding rates of default and credit losses, volatility in the mortgage industry, our business strategies, our expectations about future financial performance, future growth and earnings, the appropriateness of our allowance for credit losses and provision for credit losses, our ability to identify, employ and retain a successor chief executive officer, the impact of changing regulatory requirements and legislative changes on our business, increased competition, interest rate risk, new lines of business, new product or service offerings and new technologies. These and other factors that could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. The information contained in this communication speaks only as of its date. Except to the extent required by applicable law or regulation, we disclaim any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments.



TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
	2nd Quarter			1st Quarter			4th Quarter			3rd Quarter			2nd Quarter
	2020			2020			2019			2019			2019
CONSOLIDATED STATEMENTS OF INCOME
Interest income	$	252,010		$	306,008		$	337,757		$	355,101		$	346,893
Interest expense	42,082			77,689			89,372			102,933			103,340
Net interest income	209,928			228,319			248,385			252,168			243,553
Provision for credit losses	100,000			96,000			17,000			11,000			27,000
Net interest income after provision for credit losses	109,928			132,319			231,385			241,168			216,553
Non-interest income	70,502			11,780			17,761			20,301			24,364
Non-interest expense	222,352			165,417			168,187			149,429			141,718
Income/(loss) before income taxes	(41,922		)	(21,318		)	80,959			112,040			99,199
Income tax expense/(benefit)	(7,606		)	(4,631		)	16,539			23,958			21,387
Net income/(loss)	(34,316		)	(16,687		)	64,420			88,082			77,812
Preferred stock dividends	2,437			2,438			2,437			2,438			2,437
Net income/(loss) available to common stockholders	$	(36,753	)	$	(19,125	)	$	61,983		$	85,644		$	75,375
Diluted earnings/(loss) per common share	$	(0.73	)	$	(0.38	)	$	1.23		$	1.70		$	1.50
Diluted common shares	50,416,331			50,474,802			50,461,723			50,416,402			50,383,870
CONSOLIDATED BALANCE SHEET DATA
Total assets	$	36,613,127		$	35,879,416		$	32,548,069		$	33,526,437		$	29,970,384
LHI	16,552,203			16,857,579			16,476,413			16,772,824			16,924,535
LHI, mortgage finance	8,972,626			7,588,803			8,169,849			7,951,432			7,415,363
LHS	454,581			774,064			2,577,134			2,674,225			1,057,586
Liquidity assets⁽¹⁾	9,540,044			9,498,189			4,263,766			4,993,185			3,480,902
Investment securities	234,969			228,784			239,871			238,022			240,851
Demand deposits	10,835,911			9,420,303			9,438,459			10,289,572			7,685,340
Total deposits	30,187,695			27,134,263			26,478,593			27,413,303			22,999,077
Other borrowings	2,895,790			5,195,267			2,541,766			2,639,967			3,607,234
Subordinated notes	282,309			282,219			282,129			282,038			281,948
Long-term debt	113,406			113,406			113,406			113,406			113,406
Stockholders’ equity	2,734,755			2,803,533			2,801,321			2,735,993			2,647,071

End of period shares outstanding	50,435,672			50,407,778			50,337,741			50,317,654			50,297,552
Book value	$	51.25		$	52.64		$	52.67		$	51.39		$	49.65
Tangible book value⁽²⁾	$	50.89		$	52.28		$	52.31		$	51.03		$	49.28
SELECTED FINANCIAL RATIOS
Net interest margin	2.30		%	2.78		%	2.95		%	3.16		%	3.41		%
Return on average assets	(0.36		)%	(0.20		)%	0.85		%	1.06		%	1.05		%
Return on average common equity	(5.48		)%	(2.85		)%	10.68		%	13.22		%	12.20		%
Non-interest income to average earning assets	0.77		%	0.14		%	0.21		%	0.25		%	0.34		%
Efficiency ratio⁽³⁾	79.3		%	68.9		%	63.2		%	54.8		%	52.9		%
Efficiency ratio, adjusted⁽⁴⁾	77.5		%	65.8		%	61.4		%	51.3		%	49.6		%
Non-interest expense to average earning assets	2.43		%	2.00		%	1.98		%	1.86		%	1.98		%
Tangible common equity to total tangible assets⁽⁵⁾	7.0		%	7.3		%	8.1		%	7.6		%	8.3		%
Common Equity Tier 1	8.9		%	9.3		%	8.9		%	8.6		%	8.7		%
Tier 1 capital	9.8		%	10.2		%	9.7		%	9.4		%	9.6		%
Total capital	11.6		%	12.0		%	11.4		%	11.0		%	11.3		%
Leverage	7.5		%	8.5		%	8.4		%	8.6		%	9.2		%


(1)	Liquidity assets include Federal funds sold and interest-bearing deposits in other banks.


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


(3)	Non-interest expense divided by the sum of net interest income and non-interest income.

(4)

Non-interest expense, excluding deposit-related marketing fees and servicing related expenses, divided by the sum of net interest income and non-interest income, net of deposit-related marketing fees and servicing related expenses. Deposit-related marketing fees totaled $1.7 million, $5.2 million, $9.4 million, $11.9 million and $11.6 million for the second and first quarters of 2020, as well as the fourth, third and second quarters of 2019, respectively.


(5)	Stockholders’ equity excluding preferred stock and accumulated other comprehensive income, less goodwill and intangibles, divided by total assets, less accumulated other comprehensive income and goodwill and intangibles.



TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
	June 30, 2020			June 30, 2019			% Change
Assets
Cash and due from banks	$	176,540		$	163,675		8	%
Interest-bearing deposits	9,490,044			3,446,902			175	%
Federal funds sold and securities purchased under resale agreements	50,000			34,000			47	%
Securities, available-for-sale	234,969			240,851			(2	)%
LHS, at fair value ($454.6 million at June 30, 2020 and $1,056.5 million at June 30, 2019)	454,581			1,057,586			(57	)%
LHI, mortgage finance	8,972,626			7,415,363			21	%
LHI (net of unearned income)	16,552,203			16,924,535			(2	)%
Less: Allowance for credit losses on loans	264,722			214,572			23	%
LHI, net	25,260,107			24,125,326			5	%
Mortgage servicing rights, net	75,451			47,785			58	%
Premises and equipment, net	28,603			28,197			1	%
Accrued interest receivable and other assets	824,963			807,728			2	%
Goodwill and intangibles, net	17,869			18,334			(3	)%
Total assets	$	36,613,127		$	29,970,384		22	%

Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing	$	10,835,911		$	7,685,340		41	%
Interest bearing	19,351,784			15,313,737			26	%
Total deposits	30,187,695			22,999,077			31	%

Accrued interest payable	20,314			23,115			(12	)%
Other liabilities	372,145			276,432			35	%
Federal funds purchased and repurchase agreements	195,790			507,234			(61	)%
Other borrowings	2,700,000			3,100,000			(13	)%
Subordinated notes, net	282,309			281,948			—	%
Trust preferred subordinated debentures	113,406			113,406			—	%
Total liabilities	33,871,659			27,301,212			24	%

Redeemable non-controlling interest	6,713			22,101			(70	)%

Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - 6,000,000 shares issued at June 30, 2020 and 2019	150,000			150,000			—	%
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 50,436,089 and 50,297,969 at June 30, 2020 and 2019, respectively	504			503			—	%
Additional paid-in capital	983,144			972,219			1	%
Retained earnings	1,600,639			1,516,044			6	%
Treasury stock (shares at cost: 417 at June 30, 2020 and 2019)	(8		)	(8		)	—	%
Accumulated other comprehensive income, net of taxes	476			8,313			N/M
Total stockholders’ equity	2,734,755			2,647,071			3	%
Total liabilities and stockholders’ equity	$	36,613,127		$	29,970,384		22	%



TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Interest income
Interest and fees on loans	$	247,595		$	329,842		$	531,220		$	642,545
Investment securities	2,024			2,260			4,207			3,720
Federal funds sold and securities purchased under resale agreements	77			157			691			536
Interest-bearing deposits in other banks	2,314			14,634			21,900			25,653
Total interest income	252,010			346,893			558,018			672,454
Interest expense
Deposits	32,294			72,529			94,468			141,583
Federal funds purchased	176			5,202			845			8,718
Other borrowings	4,569			20,124			14,151			31,978
Subordinated notes	4,191			4,191			8,382			8,382
Trust preferred subordinated debentures	852			1,294			1,925			2,626
Total interest expense	42,082			103,340			119,771			193,287
Net interest income	209,928			243,553			438,247			479,167
Provision for credit losses	100,000			27,000			196,000			47,000
Net interest income after provision for credit losses	109,928			216,553			242,247			432,167
Non-interest income
Service charges on deposit accounts	2,459			2,849			5,752			5,828
Wealth management and trust fee income	2,348			2,129			4,815			4,138
Brokered loan fees	10,764			7,336			18,779			12,402
Servicing income	6,120			3,126			10,866			5,860
Swap fees	1,468			601			4,225			1,632
Net gain/(loss) on sale of LHS	39,023			(5,986		)	26,023			(6,491		)
Other	8,320			14,309			11,822			31,009
Total non-interest income	70,502			24,364			82,282			54,378
Non-interest expense
Salaries and employee benefits	100,255			76,889			176,922			154,712
Net occupancy expense	9,134			7,910			17,846			15,789
Marketing	7,988			14,087			16,510			25,795
Legal and professional	11,330			10,004			28,796			20,034
Communications and technology	42,760			11,022			56,551			20,220
FDIC insurance assessment	7,140			4,138			12,989			9,260
Servicing-related expenses	20,117			6,066			36,471			11,448
Merger-related expenses	10,486			—			17,756			—
Other	13,142			11,602			23,928			25,976
Total non-interest expense	222,352			141,718			387,769			283,234
Income/(loss) before income taxes	(41,922		)	99,199			(63,240		)	203,311
Income tax expense/(benefit)	(7,606		)	21,387			(12,237		)	43,798
Net income/(loss)	(34,316		)	77,812			(51,003		)	159,513
Preferred stock dividends	2,437			2,437			4,875			4,875
Net income/(loss) available to common stockholders	$	(36,753	)	$	75,375		$	(55,878	)	$	154,638

Basic earnings/(loss) per common share	$	(0.73	)	$	1.50		$	(1.11	)	$	3.07
Diluted earnings/(loss) per common share	$	(0.73	)	$	1.50		$	(1.11	)	$	3.07



TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(Dollars in thousands)
	2nd Quarter			1st Quarter			4th Quarter			3rd Quarter			2nd Quarter
	2020			2020			2019			2019			2019
Allowance for credit losses on loans:
Beginning balance	$	240,958		$	195,047		$	190,138		$	214,572		$	208,573
Impact of CECL adoption	—			8,585			—			—			—
Loans charged-off:
Commercial	12,287			20,653			13,968			21,124			4,880
Energy	62,368			37,730			797			16,655			15,173
Real estate	—			—			—			—			177
Total charge-offs	74,655			58,383			14,765			37,779			20,230
Recoveries:
Commercial	513			257			1,754			799			224
Energy	—			423			209			107			—
Total recoveries	513			680			1,963			906			224
Net charge-offs	74,142			57,703			12,802			36,873			20,006
Provision for credit losses on loans	97,906			95,029			17,711			12,439			26,005
Ending balance	$	264,722		$	240,958		$	195,047		$	190,138		$	214,572

Allowance for off-balance sheet credit losses:
Beginning balance	$	10,174		$	8,640		$	9,351		$	10,790		$	9,795
Impact of CECL adoption	—			563			—			—			—
Provision for off-balance sheet credit losses	2,094			971			(711		)	(1,439		)	995
Ending balance	$	12,268		$	10,174		$	8,640		$	9,351		$	10,790

Total allowance for credit losses	$	276,990		$	251,132		$	203,687		$	199,489		$	225,362

Total provision for credit losses	$	100,000		$	96,000		$	17,000		$	11,000		$	27,000

Allowance for credit losses on loans to LHI	1.04		%	0.99		%	0.79		%	0.77		%	0.88		%
Allowance for credit losses on loans to average LHI	1.03		%	1.02		%	0.79		%	0.76		%	0.90		%
Net charge-offs to average LHI⁽¹⁾	1.16		%	0.98		%	0.21		%	0.58		%	0.34		%
Net charge-offs to average LHI for last twelve months⁽¹⁾	0.73		%	0.53		%	0.31		%	0.41		%	0.27		%
Total provision for credit losses to average LHI⁽¹⁾	1.57		%	1.63		%	0.27		%	0.17		%	0.45		%
Total allowance for credit losses to LHI	1.09		%	1.03		%	0.83		%	0.81		%	0.93		%


(1)	Interim period ratios are annualized.



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

Non-performing assets (NPAs):
Non-accrual loans	$	174,031		$	219,165		$	225,384		$	120,686		$	114,084
Other real estate owned (OREO)	—			—			—			—			—
Total LHI NPAs	$	174,031		$	219,165		$	225,384		$	120,686		$	114,084

Non-accrual loans to LHI	0.68		%	0.90		%	0.91		%	0.49		%	0.47		%
Total LHI NPAs to LHI plus OREO	0.68		%	0.90		%	0.91		%	0.49		%	0.47		%
Total LHI NPAs to earning assets	0.49		%	0.63		%	0.71		%	0.37		%	0.39		%
Allowance for credit losses on loans to non-accrual loans	1.5x			1.1x			.9x			1.6x			1.9x

LHI past due 90 days and still accruing⁽¹⁾	$	21,079		$	21,274		$	17,584		$	29,648		$	15,212
LHI past due 90 days to LHI	0.08		%	0.09		%	0.07		%	0.12		%	0.06		%
LHS past due 90 days and still accruing⁽²⁾	$	10,152		$	9,014		$	8,207		$	9,187		$	11,665


(1)	At June 30, 2020, loans past due 90 days and still accruing includes premium finance loans of $14.8 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on canceled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.

(2)

Includes loans guaranteed by U.S. government agencies that were repurchased out of Ginnie Mae securities. Loans are recorded as LHS and carried at fair value on the balance sheet. Interest on these past due loans accrues at the debenture rate guaranteed by the U.S. government. Also includes loans that, pursuant to Ginnie Mae servicing guidelines, we have the unilateral right, but not obligation, to repurchase and thus must record as LHS on our balance sheet regardless of whether the repurchase option has been exercised.



TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands)

	2nd Quarter			1st Quarter			4th Quarter			3rd Quarter			2nd Quarter
	2020			2020			2019			2019			2019
Interest income
Interest and fees on loans	$	247,595		$	283,625		$	312,147		$	329,344		$	329,842
Investment securities	2,024			2,183			2,618			2,316			2,260
Federal funds sold and securities purchased under resale agreements	77			614			439			554			157
Interest-bearing deposits in other banks	2,314			19,586			22,553			22,887			14,634
Total interest income	252,010			306,008			337,757			355,101			346,893
Interest expense
Deposits	32,294			62,174			70,987			80,967			72,529
Federal funds purchased	176			669			1,319			1,835			5,202
Other borrowings	4,569			9,582			11,712			14,703			20,124
Subordinated notes	4,191			4,191			4,191			4,191			4,191
Trust preferred subordinated debentures	852			1,073			1,163			1,237			1,294
Total interest expense	42,082			77,689			89,372			102,933			103,340
Net interest income	209,928			228,319			248,385			252,168			243,553
Provision for credit losses	100,000			96,000			17,000			11,000			27,000
Net interest income after provision for credit losses	109,928			132,319			231,385			241,168			216,553
Non-interest income
Service charges on deposit accounts	2,459			3,293			2,785			2,707			2,849
Wealth management and trust fee income	2,348			2,467			2,342			2,330			2,129
Brokered loan fees	10,764			8,015			8,645			8,691			7,336
Servicing income	6,120			4,746			4,030			3,549			3,126
Swap fees	1,468			2,757			1,559			1,196			601
Net gain/(loss) on sale of LHS	39,023			(13,000		)	(7,757		)	(6,011		)	(5,986		)
Other	8,320			3,502			6,157			7,839			14,309
Total non-interest income	70,502			11,780			17,761			20,301			24,364
Non-interest expense
Salaries and employee benefits	100,255			76,667			80,262			80,106			76,889
Net occupancy expense	9,134			8,712			9,075			8,125			7,910
Marketing	7,988			8,522			12,807			14,753			14,087
Legal and professional	11,330			17,466			21,032			11,394			10,004
Communications and technology	42,760			13,791			13,801			10,805			11,022
FDIC insurance assessment	7,140			5,849			5,613			5,220			4,138
Servicing-related expenses	20,117			16,354			2,960			8,165			6,066
Merger-related expenses	10,486			7,270			1,370			—			—
Other	13,142			10,786			21,267			10,861			11,602
Total non-interest expense	222,352			165,417			168,187			149,429			141,718
Income/(loss) before income taxes	(41,922		)	(21,318		)	80,959			112,040			99,199
Income tax expense/(benefit)	(7,606		)	(4,631		)	16,539			23,958			21,387
Net income/(loss)	(34,316		)	(16,687		)	64,420			88,082			77,812
Preferred stock dividends	2,437			2,438			2,437			2,438			2,437
Net income/(loss) available to common shareholders	$	(36,753	)	$	(19,125	)	$	61,983		$	85,644		$	75,375



TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
(Dollars in thousands)
	2nd Quarter 2020						1st Quarter 2020						4th Quarter 2019						3rd Quarter 2019						2nd Quarter 2019
	Average Balance		Revenue/ Expense		Yield/ Rate		Average Balance		Revenue/ Expense		Yield/ Rate		Average Balance		Revenue/ Expense		Yield/ Rate		Average Balance		Revenue/ Expense		Yield/ Rate		Average Balance		Revenue/ Expense		Yield/ Rate
Assets
Investment securities - Taxable	$	38,829	$	185	1.92	%	$	42,799	$	274	2.57	%	$	40,904	$	693	6.72	%	$	39,744	$	357	3.56	%	$	38,887	$	287	2.96	%
Investment securities - Non-taxable⁽²⁾	195,806		2,327		4.78	%	195,578		2,417		4.97	%	197,591		2,437		4.89	%	200,090		2,480		4.92	%	192,115		2,498		5.21	%
Federal funds sold and securities purchased under resale agreements	245,434		77		0.13	%	199,727		614		1.24	%	102,320		439		1.70	%	100,657		554		2.18	%	28,436		157		2.22	%
Interest-bearing deposits in other banks	10,521,240		2,314		0.09	%	6,225,948		19,586		1.27	%	5,387,000		22,553		1.66	%	4,184,217		22,887		2.17	%	2,491,827		14,634		2.36	%
LHS, at fair value	380,624		2,547		2.69	%	3,136,381		27,480		3.52	%	3,567,836		33,411		3.72	%	2,555,269		26,206		4.07	%	2,494,883		27,607		4.44	%
LHI, mortgage finance loans	8,676,521		74,518		3.45	%	7,054,682		55,324		3.15	%	7,870,888		63,114		3.18	%	8,118,025		68,660		3.36	%	7,032,963		63,523		3.62	%
LHI⁽¹⁾⁽²⁾	17,015,041		170,970		4.04	%	16,598,775		201,781		4.89	%	16,667,259		216,686		5.16	%	16,901,391		235,557		5.53	%	16,781,733		239,829		5.73	%
Less allowance for credit losses on loans	236,823		—		—		201,837		—		—		189,353		—		—		212,898		—		—		206,654		—		—
LHI, net of allowance	25,454,739		245,488		3.88	%	23,451,620		257,105		4.41	%	24,348,794		279,800		4.56	%	24,806,518		304,217		4.87	%	23,608,042		303,352		5.15	%
Total earning assets	36,836,672		252,938		2.76	%	33,252,053		307,476		3.72	%	33,644,445		339,333		4.00	%	31,886,495		356,701		4.44	%	28,854,190		348,535		4.84	%
Cash and other assets	1,075,864						976,520						974,866						1,000,117						940,793
Total assets	$	37,912,536					$	34,228,573					$	34,619,311					$	32,886,612					$	29,794,983
Liabilities and Stockholders’ Equity
Transaction deposits	$	3,923,966	$	5,998	0.61	%	$	3,773,067	$	13,582	1.45	%	$	3,817,294	$	16,428	1.71	%	$	3,577,905	$	18,442	2.04	%	$	3,475,404	$	18,037	2.08	%
Savings deposits	12,537,467		13,510		0.43	%	11,069,429		35,961		1.31	%	11,111,326		40,603		1.45	%	10,331,078		45,586		1.75	%	8,896,537		40,994		1.85	%
Time deposits	3,434,388		12,786		1.50	%	2,842,535		12,631		1.79	%	2,453,655		13,956		2.26	%	2,706,434		16,939		2.48	%	2,227,460		13,498		2.43	%
Total interest bearing deposits	19,895,821		32,294		0.65	%	17,685,031		62,174		1.41	%	17,382,275		70,987		1.62	%	16,615,417		80,967		1.93	%	14,599,401		72,529		1.99	%
Other borrowings	3,612,263		4,745		0.53	%	3,020,255		10,251		1.37	%	2,822,465		13,031		1.83	%	2,896,477		16,538		2.27	%	4,018,231		25,326		2.53	%
Subordinated notes	282,252		4,191		5.97	%	282,165		4,191		5.97	%	282,074		4,191		5.89	%	281,979		4,191		5.90	%	281,889		4,191		5.96	%
Trust preferred subordinated debentures	113,406		852		3.02	%	113,406		1,073		3.80	%	113,406		1,163		4.07	%	113,406		1,237		4.33	%	113,406		1,294		4.58	%
Total interest bearing liabilities	23,903,742		42,082		0.71	%	21,100,857		77,689		1.48	%	20,600,220		89,372		1.72	%	19,907,279		102,933		2.05	%	19,012,927		103,340		2.18	%
Demand deposits	10,865,896						10,003,495						10,933,887						9,992,406						7,929,266
Other liabilities	293,698						270,868						278,964						264,506						220,305
Stockholders’ equity	2,849,200						2,853,353						2,806,240						2,722,421						2,632,485
Total liabilities and stockholders’ equity	$	37,912,536					$	34,228,573					$	34,619,311					$	32,886,612					$	29,794,983
Net interest income⁽²⁾			$	210,856					$	229,787					$	249,961					$	253,768					$	245,195
Net interest margin					2.30	%					2.78	%					2.95	%					3.16	%					3.41	%


(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.

Q2-2020 Earnings July 22, 2020

Forward Looking Statements This communication may be deemed to include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding our financial condition, results of operations, business plans and future performance. These statements are not historical in nature and can generally be identified by such words as “believe,” “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,” “could,” “projects,” “intend” and similar expressions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. A number of factors, many of which are beyond our control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the credit quality of our loan portfolio, general economic conditions in the United States and in our markets, including the continued impact on our customers from volatility in oil and gas prices, the material risks and uncertainties for the U.S. and world economies, and for our business, resulting from the COVID-19 pandemic, expectations regarding rates of default and credit losses, volatility in the mortgage industry, our business strategies, our expectations about future financial performance, future growth and earnings, the appropriateness of our allowance for credit losses and provision for credit losses, our ability to identify, employ and retain a successor chief executive officer, the impact of changing regulatory requirements and legislative changes on our business, increased competition, interest rate risk, new lines of business, new product or service offerings and new technologies. These and other factors that could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. The information contained in this communication speaks only as of its date. Except to the extent required by applicable law or regulation, we disclaim any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. 2

Positioned for Growth TCBI Overview Financial Positioning  Unique branch-lite, commercially-focused, organic growth model built Capital 2007–2019 Annual Avg. Q1 2020 Q2 2020 over 20 years by hand-selecting top banking talent  During a period (’16-’19) of favorable economic conditions and rising 12.0% 11.6% 11.1% interest rates, we invested aggressively in efficiency focused technology, 10.2% 9.8% 9.3% 9.5% a best-in-class digital platform, and complimentary C&I offerings 8.9%  Successful completion of this multi-year infrastructure and capability 8.0% build has positioned the bank for a period without necessary outsized Common Equity Tier 1 Tier 1 Capital Total Capital investments and properly situated to harvest broad profitability gains  Capitalizing on this foundation and focusing future expense on front-line Liquidity talent will continue to deepen middle-market commercial bank 28% 27% relationships, diversifying both revenue and funding composition 117% 90%  Counter-cyclical, volume-driven Mortgage Finance provides flexibility 85% while generating strong risk-adjusted returns and fortifying already 9% meaningful capital and liquidity levels  With these advantages in place, Texas Capital stands ready to serve our Cash + Securities / Assets Loans HFI / Deposits clients and gain market share as we have in prior downturns 1  Net loss of $34.3 million ($0.73 per share) driven by significant one-time items ($0.99 Revenue $280M per share) and provision for credit losses ($1.55 per share). Significant one-time items $268M 2Q-2020 primarily relate to deliberate actions taken to improve future core earnings outlook Earnings  Revenue 1 grew $12.5 million, or 4.7%, Y-o-Y demonstrating earnings resilience despite $240M Summary interest rate declines  Continued strong capital levels well in excess of regulatory thresholds and a highly liquid balance sheet provide flexibility in current environment Q2 2019 Q1 2020 Q2 2020 1 Net interest income and non-interest income 3

Second Quarter Actions and Impact Resetting the Cost Base  Decisions in late Q2-2020 signify an acceleration of actions started pre- MOE to narrow the strategic focus and realize efficiencies in the operating $387.8M $39.4M model. Reduction to annual non-interest expense of ~$30 million, with $17.8M $11 million impacting 2H-2020 financials $19.2M $9.1M $302.3M Savings ($M) 2H 2020 Comments Salaries $10 Reduction in salaries and benefits expense immediately improves operating leverage while focusing future incremental spend on revenue production Cap Ex $1 $21MM write-off of certain software assets reduces capitalized expense. Opportunities for additional reductions in Q3-2020 Total Savings $11 1H 2020 Organizational Merger MSR PPP related Normalized 2H2020 NIE Guidance Low $290s Reported NIE changes expenses impairment & other 1H 2020 NIE 1X expense  Additional non-FTE related G&A expense saves targeted for 2H-2020 and FY-2021 Credit Cycle Management  MSR hedging program should limit volatility in dynamic rate environment  Proactive problem identification and resolution  Charge-off of previously identified Energy and Leveraged 2007–2019 Annual Avg. Q1 2020 Q2 2020 Lending credits contributed to ~20% decline in NPAs 1  $ of total loans in sectors most severely impacted by COVID-19  CRE2 – $0.4B Hospitality, $0.3B Retail 1.43% 1.60%  C&I3 – $1.1B Energy, $0.5B Real Estate, $0.2B Accommodation 1.19% 1.08% & Food Service, $0.1B Retail Trade 0.93% 0.99% 1.04% 0.63%  Additional build to the allowance for credit losses (“ACL”) could be 0.49% required in future quarters if impact of COVID-19 on the economy deviates from current economic forecast ACL on Loans / Loans HFI ACL on Loans / NPAs / Earning Assets Loans HFI excl MFLs 1 Q2-2020 NPAs include $40 million of Energy Loans that have been charged down to final resolution value and are pending close in Q3-2020 4 2 Detailed on slide 12 3 Includes Leveraged Lending, Energy, PPP Loans, and other Commercial Loans

Q2-2020 Financial Results

Loan Portfolio Growth Outlook  Average LHI (excluding MFLs) increased $416 million (3%) from Q1-2020, while ending LHI (excluding MFLs) decreasing $305 million (2%) from Q1- 2020 due to the following factors:  Continuation of deliberate multi-quarter reductions in Energy and Leverage Lending; down 14% and 5%, respectively, from Q1-2020 and 33% and 40%, respectively, from YE 2018  Return to more normalized utilization rates in the low 50’s down from the high 50’s at the end of Q1-2020  Participation in Cares Act – PPP, Deferrals, and Main Street Lending Program  Period end PPP loans totaled $717 million, with $16 million in deferred fees remaining to be recognized in interest income in future periods. Deferrals granted to borrowers with loans totaling $1.2 billion, of which $0.9 billion (75%) reside in sectors most severely impacted by COVID- 19  Average total MFLs of $9.1 billion for Q2-2020 were down $1.1 billion (11%) from Q1-2020, as an increase in average MFLs, excluding MCA LHS, resulting from continued demand was more than offset by a reduction in average MCA LHS from market economics favoring shorter loan hold times  The Q-o-Q decline in LHI (excluding MFLs) yields (85bps) and mix shift contributed to the decline in NIM, as total loan spread increased slightly to 3.43% from 3.35% in the prior quarter. Liquidity build drove a Q-o-Q margin decline, but core earnings generation remains stable Period-End Loan Composition 1 Average Loans & Total Loan Spread 2 3 2 $26.0B in balances LHI (excl. MFLs) Total MFLs Total Loan Spread Business Assets Energy 26% $10.7B $11.4B 4% $9.5B $10.2B $9.1B Highly Liquid Assets Unsecured 1% 3% $16.9B $17.0B Owner Occupied R/E $16.8B $16.7B $16.6B 5% Residential R/E 3.61% 3.48% Mkt. Risk Total Mortgage 3.38% 3.35% 3.43% 4% Finance 36% Comml R/E Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Mkt. Risk 15% Other Assets Total Loan 5.09% 4.79% 4.45% 4.30% 3.86% 6% Yield 1 Includes total LHI and LHS 2 Total Loan Spread = Yield on total loans (HFI & HFS) – Total cost of deposits and other borrowings 6 3 Total MFLs include LHI, mortgage finance, and MCA LHS

Deposits and Fundings Highlights Funding Costs  Ending deposits increased $3.1 billion as clients built on-balance sheet cash amidst economic uncertainty, keeping low-earning liquidity balances at historical highs 1.40%  Continued focus on cost-effective deposit growth within 1.25% verticals and core client relationships 1.03%  1.29% 0.92% Brokered deposit balances decreased modestly. Laddered 1.21% maturities will allow for ongoing reduction in costs, even as 0.99% balances expected to remain stable through the near-term 0.90% 0.45%  Decrease in total funding costs of 47 bps resulting from full-quarter benefit of Fed moves  Immediate repricing down of $10.4 billion in indexed 0.42% deposits helped offset yield declines to maintain spreads  Initiatives already directed at other interest-bearing deposits Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 have achieved 59 bps in savings and more is expected Avg Cost of Deposits Total Funding Costs Period-End Deposits Balances Upcoming Maturities CD Maturity FHLB Maturity 7

Q2-2020 Earnings Overview Net Interest Income & Margin Commentary Net Interest Margin Detail (bps)  A mix shift towards lower yielding assets weighed on NIM, but a $243.6M decline in funding costs and stable $228.3M $209.9M Warehouse yields offset impacts  Average liquidity assets increased ~70% Q-o-Q, coupling with the full impact of the Fed moves to further 3.41% pressure NIM 2.78% 2.30%  Meaningful decrease in funding costs. Opportunities to reduce concentrations as excess liquidity Net Net Interest Income reduced Q2 2019 Q1 2020 Q2 2020  Lower LHS interest income from Other Costs Loans Yields Yields Funding shorter hold times more than offset Q12020 Q22020 Balances (net PPP) (net PPP Loans by GOS in non-interest income Liquid Asset Liquid Asset Provision for Credit Losses Commentary Criticized Loans  Economic fundamentals and higher $100.0M $1,014.0M $96.0M criticized loan levels driving Q2-2020 CECL provisioning higher ($1.55 per share) $676.0M  Energy and Leveraged charge-offs $629.1M 3.97% ($62.4 million and $8.1 million, respectively) on previously identified 2.54% 2.77% $27.0M loans  Increase in criticized loans predominantly in special mention Credit Expense  Additional ACL build could be required Q2 2019 Q1 2020 Q2 2020 in future quarters if impact of COVID-19 Q2 2019 Q1 2020 Q2 2020 on the economy deviates from current Criticized Loans economic forecast Criticized Loans % Total LHI 8

Q2-2020 Earnings Overview Non-interest Income Commentary Fee Income Details  Market continues to exhibit favorable economics for LHS sales. Continue to $8.5M $70.5M optimize portfolio between GOS and interest income $2.8M $6.3M  Seasonal increase in already high $5.6M Warehouse volumes drove significant $0.6M $1.5M brokered loan fees ($2.7 million Q-o-Q) $2.5M $2.1M $24.4M  Focus on diversifying non-interest $2.3M $11.8M income streams continues with steady $3.3M Q-o-Q results. 1H-2020 swap fees $2.6 $2.8M $2.5M million higher than in 1H-2019 Non - interestincome  Q2 2019 Q1 2020 Q2 2020 Despite price volatility, Wealth Q2 2019 Q1 2020 Q2 2020 Management Fees in line with recent Swap Fees quarterly performance ($2.3 million) Wealth Management Fees Deposit Service Charges Non-interest Expense Commentary Salary and Employee Benefits  As noted, Q2-2020 impacted by $222.4M significant one-time items (e.g., $100.3M headcount reduction costs, software $165.4M write-offs, merger costs) $76.9M $76.7M $141.7M  Other expense categories remained at manageable levels, with Legal & Professional showing a decline of $6.1 million from Q1-2020  Disciplined core expense management, with modest investments focused on front-line Non - interestexpense Q2 2019 Q1 2020 Q2 2020 hires, will remain a key strategic Q2 2019 Q1 2020 Q2 2020 priority 9

LOB Detail

Loan Portfolio Detail – Mortgage Finance Commentary MWH + MCA Annualized Revenue  Q2-2020 average MFLs (excluding MCA LHS) increased 23% Y-o-Y as the Bank optimized business mix to take advantage of industry volumes and GOS opportunities in MCA $174M  When combined with MCA, annualized quarterly revenue increased +108.0% ~40% from Q2-2019. A favorable outlook suggests continued near- $84M term opportunity to provide substantial risk-adjusted returns acting +67.7% as a counter-cyclical hedge to the traditional LHI portfolio $50M  Mortgage Finance’s relationship-driven pricing approach allowed for +19.3% $321M +34.3% $269M yield resilience despite the full-quarter impact of the declining rate $200M environment. Modest contraction anticipated in 2H-2020  Proven track-record of adjusting risk profile based on market Q2 2018 Q2 2019 Q2 2020 liquidity; underlying portfolio quality remains the priority Mortgage Warehouse Mortgage Correspondent Aggregation Average Mortgage Warehouse Loans and Yields $9.0B 6.0% $8.0B 5.0% $7.0B 4.0% $6.0B 3.0% $5.0B 2.0% $4.0B 1.0% $3.0B 0.0% Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Mortgage Warehouse Yield 10YR 1M LIBOR 11

Loan Portfolio Detail – CRE Commentary Moderating Late Cycle Growth Thru-cycle Credit Performance  Track record of proactive portfolio management evidenced by 40% % Loan Growth * 4.5% NCO Rate * changes in growth rates thru-cycle and strong credit performance TCBI TCBI 35% 1 4.0% 1 during periods of stress Peer Average Peer Average 30% 3.5% 3.0%  25% CRE managed as a line of business facilitating achievement of 2.5% 20% concentration objectives by product and geography. Underwriting 2.0% 15% focus on strong sponsors and developers with significant upfront cash 1.5% 10% equity 1.0% 5%  Construction in most markets where projects are being financed is 0.5% 0% considered essential, and related construction continues to progress 0.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 largely on schedule 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020 Q1 2020 Property Types 2 Statistics Commentary Criticized Avg LTV  $2.1B Commit, $1.2B Bal Portfolio focus on newly developed, generally Class A properties yielding benefits $14.7M 46% Multi Family 31% Total CRE  Rent collection rates remain high; virtual leasing could slow project lease up  $0.8B Commit, $0.6B Bal Office occupancies expected to soften as tenants revisit their space needs; initial $0 Office 15% Total CRE borrower feedback remains positive for rent collection from anchor tenants 57% $0.6B Commit, $0.4B Bal  Performance expected to remain consistent due to continued shift to e-commerce $2.5M Industrial 10% Total CRE  Average loan-to-cost even lower than portfolio average of ~65% 47% $0.6B Commit, $0.4B Bal  Primarily construction which is deemed “essential” and progressing as planned $27.9M 54% Senior Housing 9% Total CRE  Occupancy / leasing slowing modestly as a result of COVID protocols in facilities $0.4B Commit, $0.4B Bal  Most impacted portfolio to-date; proactively addressing issues through downgrades $149.1M 53% Hospitality 9% Total CRE  Loss exposure limited by low loan-to-values $0.4B Commit, $0.3B Bal  Strong performance during the Great Recession; anticipate similar results during this $0 Self Storage 9% Total CRE cycle 65% $0.3B Commit, $0.3B Bal  Smallest exposure; performance as expected with quality of anchor/essential tenants $14.0M Retail 8% Total CRE (i.e., large grocery stores) in most properties a risk mitigating factor 54% * Source: S&P Market Intelligence as of Q1-2020. Based on regulatory definition of Total CRE Balances 1 Peers include: ASB, BXS, BKU, BOKF, CBSH, CFR, FHN, FINN, FULT, HWC, IBKC, ISBC, SNV, UMBF, WBS, WTFC 12 2 Other collateral types comprise ~10% of total outstanding balances

Loan Portfolio Detail – Energy Commentary Portfolio Management  Continued loan balance contraction driven by resolution of  ~70% of E&P production hedged in 2020, ~60% in 2021 1 previously disclosed outsized problem credits resulting in a more  This compares favorably to the 2015-2016 downturn granular portfolio with lower inherent loss potential  Spring borrowing base redeterminations (~87% complete) resulted  Total Y-o-Y loan balances down ~$500 million, or 30%, in 18% reduction in borrowing bases from $1.6 billion to $1.1 billion  Modest increase to ACL but no change to expectations for thru-  Average loan sizes have also decreased, down from $17.5 cycle credit performance million at Q1-2020 to $15.3 million at Q2-2020  At Q2-2020 total ACL assigned to energy loans was 9.2%, which is  Portfolio composition remains focused on privately held or private comparable to the total cumulative losses from 2014-2019 equity backed E&P clients  $39.8 million of the $103.9 million in non-accrual energy loans  Energy Banking President now reporting directly to CEO relates to two loans that have been charged down to final resolution value and are pending close in Q3-2020 Period-End Portfolio Composition ACL Build $1.1B in balances 2 Criticized Total ACL% $324M $248M $211M 8.8% 9.2% $151M $136M 4.3% 3.1% 3.0% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 NPAs % 2 3.9% 4.1% 8.8% 11.4% 9.1% 1 Hedge % calculated based on production volumes 2 Ratios calculated as a % of total energy loans 13

Loan Portfolio Detail – Leveraged Lending Commentary Portfolio Management  Diversified portfolio with some exposure to industries believed to be  Senior leverage typically in the 3.0x-4.0x range; leverage trends most impacted by COVID-19; others may be affected depending on continue to be in line with previous quarters but proactively their varying degrees of either reliance on consumer spending or monitoring for signs of weakness supply chain risks  Significant reductions in originations in the past 12 months, coupled with meaningful runoff, has reduced overall exposure by  Due to requirements for sponsor-owned clients, this portfolio had over 30%; as expected, this contraction has slowed modestly in less PPP participation than originally anticipated. Additional clarity the current environment, a trend which could continue until should emerge in Q3-2020 on the potential impacts of Main Street economic activity begins to normalize Lending Program  Allocated ACL is 6.2%; percentages can fluctuate as identified issues are resolved which may result in charge-offs  Includes $83 million of ABL loans which generally have good  Multi-period reduction in NPAs; no new inflows this quarter collateral coverage and are further governed by a borrowing base. Of the $82 million in outstanding loans to Mining, Quarrying, and Oil and Gas Extraction, $57 million benefit from the ABL structure Period-End Portfolio Composition ACL Build $0.7B in balances 1 Criticized Total ACL% $222M $204M $197M $188M $177M 8.1% 6.6% 6.3% 6.2% 6.2% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 NPAs % 1 2.4% 2.8% 8.7% 6.4% 5.2% 1 Ratios calculated as a % of total leveraged lending loans 14

Conclusion

Summary & Outlook  Diverse, well-established lines of business balanced between differentiated national verticals and core market offerings reflective of the relationship banking approach synonymous with TCBI since inception  Organic growth model developed by hand selecting top talent fosters unique cultural alignment, innovation mindset, and Franchise client-centric focus. Bias towards action enables rapid transformation consistent with dynamic market Overview  Branch-lite since formation, a limited physical footprint enables capital allocation for core treasury focus, scalable deposit verticals, and digital offerings - compatible with accelerating customer preferences  Best-in-class Mortgage Finance business provides balance sheet optionality, strong risk-adjusted returns, and natural hedge to asset-sensitive commercially-oriented model  Leverage momentum from Q2-2020 actions to further position the company for Sustainably Higher Core Earnings  Harvest productivity gains after period of outsized investment in technology, products, and process  Continue to invest in and acquire top front-line talent; deliver on improved middle-market capabilities Strategic  Effective Credit Cycle Management Priorities  Continue forward-looking, proactive approach to Energy and Leveraged Lending  Sustain legacy of peer credit outperformance in the remainder of the loan portfolio  Realizing structural profitability improvements positions TCBI for expanded strategic optionality when economic uncertainty subsides  Actions taken this quarter set the foundation for improvements in profitability beginning in the 2H-2020 and into 2021. Completed infrastructure and technology build-out limits potential for necessary future outsized investment  2H-2020 Non-Interest Expense of low $290 millions, down from an adjusted $302 million in 1H-2020  Commitment to proactive problem identification and resolution remains; however, absent significant economic 2H-2020 deterioration, we believe we are adequately reserved for the losses inherent in our portfolio. Anticipate moderating Outlook provision expense in 2H-2020  Elevated contribution from Mortgage Warehouse will persist against the backdrop of favorable market conditions  Improving earnings generation in excess of future credit needs should result in increased capital ratios. Liquidity position likely to remain elevated given deposit growth; multi-quarter remix of cash into securities will provide earnings benefit while retaining balance sheet flexibility 16



Delaware	001-34657	75-2679109
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)



☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



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
6.50% Non-Cumulative Perpetual Preferred Stock Series A, par value $0.01 per share	TCBIP	Nasdaq Stock Market



Date:	July 22, 2020	TEXAS CAPITAL BANCSHARES, INC.

		By:	/s/ Julie Anderson
			Julie Anderson Chief Financial Officer


(a)	On July 22, 2020, Texas Capital Bancshares, Inc. issued a press release and made available presentation slides regarding its operating and financial results for its fiscal quarter ended June 30, 2020. A copy of the press release is attached hereto as Exhibit 99.1. A copy of the presentation is attached hereto as Exhibit 99.2.


99.1	Press Release, dated July 22, 2020 announcing Texas Capital Bancshares, Inc.'s operating and financial results for its fiscal quarter ended June 30, 2020


99.2	Presentation dated July 22, 2020 discussing Texas Capital Bancshares, Inc.’s operating and financial results for its fiscal quarter ended June 30, 2020


Item 2.02.	Results of Operations and Financial Condition.


Item 9.01.	Financial Statements and Exhibits.


(d)	Exhibits