8-K
TEXAS CAPITAL BANCSHARES INC/TX (TCBI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 17, 2024
TEXAS CAPITAL BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-34657 | 75-2679109 |
|---|---|---|
| (State or other jurisdiction of<br>incorporation) | (Commission<br>File Number) | (I.R.S. Employer<br>Identification Number) |
2000 McKinney Avenue, Suite 700, Dallas, Texas, U.S.A.
(Address of principal executive offices)
75201
(Zip Code)
Registrant’s telephone number, including area code: (214) 932-6600
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | 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)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | TCBI | Nasdaq Stock Market |
| 5.75% Non-Cumulative Perpetual Preferred Stock Series B, par value $0.01 per share | TCBIO | Nasdaq Stock Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On October 17, 2024, Texas Capital Bancshares, Inc. (the “Company”) issued a press release and made available presentation slides regarding its operating and financial results for its fiscal quarter ended September 30, 2024. 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.
The information in Item 2.02 of this report (including Exhibits 99.1 and 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 Press Release, datedOctober 17, 2024 announcing Texas Capital Bancshares, Inc.'s operating and financial results for its fiscal quarter endedSeptember 30, 2024
99.2 Presentation datedOctober 17, 2024 discussing Texas Capital Bancshares, Inc.’s operating and financial results for its fiscal quarter endedSeptember30, 2024
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | October 17, 2024 | TEXAS CAPITAL BANCSHARES, INC. | |
|---|---|---|---|
| By: | /s/ J. Matthew Scurlock | ||
| J. Matthew Scurlock<br>Chief Financial Officer |
Document
Exhibit 99.1
| INVESTOR CONTACT |
|---|
| Jocelyn Kukulka, 469.399.8544 |
| jocelyn.kukulka@texascapitalbank.com |
| MEDIA CONTACT |
| Julia Monter, 469.399.8425 |
| julia.monter@texascapitalbank.com |
TEXAS CAPITAL BANCSHARES, INC. ANNOUNCES THIRD QUARTER 2024 RESULTS
Record level of income in fee areas of focus(1)
Quarterly strategic actions include acquisition of $332 million commercial loan portfolio and balance sheet
repositioning of the proceeds from $1.2 billion sale of lower-yielding available-for-sale securities into higher yielding securities
Book Value and Tangible Book Value(2) per share both increased 14% year over year, reaching record levels
Capital ratios continue to be strong, including 11.2% CET1 and 15.2% Total Capital
DALLAS - October 17, 2024 - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the third quarter of 2024.
Net loss available to common stockholders was $65.6 million, or $1.41 net loss per diluted share, for the third quarter of 2024, compared to net income available to common stockholders of $37.4 million, or $0.80 net income per diluted share, and $57.4 million, or $1.18 per diluted share, for the for the second quarter of 2024 and third quarter of 2023, respectively.
The third quarter of 2024 included a $179.6 million loss on sale of available-for-sale debt securities ($2.92 net loss per diluted share) and restructuring expense of $5.9 million ($0.10 net loss per diluted share), partially offset by a $651,000 release of Federal Deposit Insurance Corporation (“FDIC”) special assessment accrual ($0.01 net income per diluted share).
“We achieved significant financial milestones this quarter as our multi-year transformation is increasingly delivering financial outcomes consistent with realized success delivering our proven and differentiated strategy,” said Rob C. Holmes, President and CEO. “Our current business momentum coupled with our sustained leading capital and liquidity levels positions us well to effectively drive execution through 2025.”
| FINANCIAL RESULTS | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (dollars and shares in thousands) | |||||||||
| 3rd Quarter | 2nd Quarter | 3rd Quarter | |||||||
| 2024 | 2024 | 2023 | |||||||
| OPERATING RESULTS | |||||||||
| Net income/(loss) | $ | (61,319) | $ | 41,662 | $ | 61,679 | |||
| Net income/(loss) available to common stockholders | $ | (65,632) | $ | 37,350 | $ | 57,366 | |||
| Diluted earnings/(loss) per common share | $ | (1.41) | $ | 0.80 | $ | 1.18 | |||
| Diluted common shares | 46,609 | 46,872 | 48,529 | ||||||
| Return on average assets | (0.78) | % | 0.56 | % | 0.81 | % | |||
| Return on average common equity | (8.87) | % | 5.26 | % | 8.08 | % | |||
| BALANCE SHEET | |||||||||
| Loans held for investment | $ | 16,764,512 | $ | 16,700,569 | $ | 16,183,882 | |||
| Loans held for investment, mortgage finance | 5,529,659 | 5,078,161 | 4,429,489 | ||||||
| Total loans held for investment | 22,294,171 | 21,778,730 | 20,613,371 | ||||||
| Loans held for sale | 9,022 | 36,785 | 155,073 | ||||||
| Total assets | 31,629,299 | 29,854,994 | 29,628,249 | ||||||
| Non-interest bearing deposits | 9,070,804 | 7,987,715 | 9,352,883 | ||||||
| Total deposits | 25,865,255 | 23,818,327 | 23,878,978 | ||||||
| Stockholders’ equity | 3,354,044 | 3,175,601 | 3,077,700 |
(1) Fee areas of focus include service charges on deposit accounts, wealth managment and trust fee income, investment banking and advisory fees and trading income.
(2) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
THIRD QUARTER 2024 COMPARED TO SECOND QUARTER 2024
For the third quarter of 2024, net loss available to common stockholders was $65.6 million, or $1.41 net loss per diluted share, compared to net income available to common stockholders of $37.4 million, or $0.80 net income per diluted share, for the second quarter of 2024. The net loss for the third quarter of 2024 resulted primarily from the $179.6 million loss on the sale of available-for-sale debt securities ($2.92 net loss per diluted share).
Provision for credit losses for the third quarter of 2024 was $10.0 million, compared to $20.0 million for the second quarter of 2024. The $10.0 million provision for credit losses recorded in the third quarter of 2024 resulted primarily from growth in total loans held for investment (“LHI”) and $6.1 million in net charge-offs.
Net interest income was $240.1 million for the third quarter of 2024, compared to $216.6 million for the second quarter of 2024, as increases in average earning assets and yields on average earning assets were partially offset by an increase in average interest bearing deposits. Net interest margin for the third quarter of 2024 was 3.16%, an increase of 15 basis points from the second quarter of 2024. LHI, excluding mortgage finance, yields increased 1 basis point from the second quarter of 2024 and LHI, mortgage finance, yields increased 26 basis points from the second quarter of 2024. Total cost of deposits was 2.94% for the third quarter of 2024, a 5 basis point decrease from the second quarter of 2024.
Non-interest income for the third quarter of 2024 decreased $165.2 million compared to the second quarter of 2024, primarily due to the $179.6 million loss on sale of available-for-sale debt securities recognized during the third quarter of 2024, partially offset by increases in investment banking and advisory fees and other non-interest income.
Non-interest expense for the third quarter of 2024 increased $6.9 million, or 4%, compared to the second quarter of 2024, primarily due to increases in salaries and benefits, occupancy expense and communications and technology expense, partially offset by decreases in FDIC assessment expense and other non-interest expense. The third quarter of 2024 included restructuring expenses of $2.4 million recorded in salaries and benefits, $476,000 recorded in occupancy expense and $3.1 million recorded in communications and technology expense. The third quarter of 2024 also included a $651,000 release of FDIC special assessment accrual.
THIRD QUARTER 2024 COMPARED TO THIRD QUARTER 2023
Net loss available to common stockholders was $65.6 million, or $1.41 net loss per diluted share, for the third quarter of 2024, compared to net income available to common stockholders of $57.4 million, or $1.18 net income per diluted share, for the third quarter of 2023.
The third quarter of 2024 included a $10.0 million provision for credit losses, reflecting growth in total LHI and $6.1 million in net charge-offs, compared to an $18.0 million provision for the third quarter of 2023.
Net interest income increased to $240.1 million for the third quarter of 2024, compared to $232.1 million for the third quarter of 2023, primarily due to increases in average total LHI and yields on average earning assets, partially offset by an increase in average interest bearing liabilities. Net interest margin increased 3 basis points to 3.16% for the third quarter of 2024 compared to the third quarter of 2023. LHI, excluding mortgage finance, yields increased 12 basis points compared to the third quarter of 2023 and LHI, mortgage finance yields decreased 9 basis points from the third quarter of 2023. Total cost of deposits increased 32 basis points compared to the third quarter of 2023.
Non-interest income for the third quarter of 2024 decreased $161.6 million compared to the third quarter of 2023. The decrease was primarily due to the $179.6 million loss on sale of available-for-sale debt securities recognized during the third quarter of 2024, partially offset by increases in investment banking and advisory fees and other non-interest income.
Non-interest expense for the third quarter of 2024 increased $15.4 million, or 9%, compared to the third quarter of 2023, primarily due to increases in salaries and benefits, occupancy expense and communications and technology expense, partially offset by decreases in legal and professional expense.
CREDIT QUALITY
Net charge-offs of $6.1 million were recorded during the third quarter of 2024, compared to net charge-offs of $12.0 million and $8.9 million during the second quarter of 2024 and the third quarter of 2023, respectively. Criticized loans totaled $897.7 million at September 30, 2024, compared to $859.7 million at June 30, 2024 and $677.4 million at September 30, 2023. Non-accrual LHI totaled $89.0 million at September 30, 2024, compared to $85.0 million at June 30, 2024 and $63.1 million at September 30, 2023. The ratio of non-accrual LHI to total LHI for the third quarter of 2024 was 0.40%, compared to 0.39% for the second quarter of 2024 and 0.31% for the third quarter of 2023. The ratio of total allowance for credit losses to total LHI was 1.43% at September 30, 2024, compared to 1.44% and 1.41% at June 30, 2024 and September 30, 2023, respectively.
REGULATORY RATIOS AND CAPITAL
All regulatory ratios continue to be in excess of “well capitalized” requirements as of September 30, 2024. CET1, tier 1 capital, total capital and leverage ratios were 11.2%, 12.6%, 15.2% and 11.4%, respectively, at September 30, 2024, compared to 11.6%, 13.1%, 15.7% and 12.2%, respectively, at June 30, 2024 and 12.7%, 14.3%, 17.1% and 12.1%, respectively, at September 30, 2023. At
September 30, 2024, our ratio of tangible common equity to total tangible assets was 9.7%, compared to 9.6% at June 30, 2024 and 9.4% at September 30, 2023.
About Texas Capital Bancshares, Inc.
Texas Capital Bancshares, Inc. (NASDAQ: TCBI), a member of the Russell 2000® Index and the S&P MidCap 400®, the parent company of Texas Capital Bank d/b/a Texas Capital, is a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs and individual customers. Founded in 1998, the institution is headquartered in Dallas with offices in Austin, Houston, San Antonio, and Fort Worth, and has built a network of clients across the country. With the ability to service clients through their entire lifecycles, Texas Capital has established commercial banking, consumer banking, investment banking and wealth management capabilities.
Forward Looking Statements
This communication contains “forward-looking statements” within the meaning of and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, TCBI’s financial condition, results of operations, business plans and future performance. These statements are not historical in nature and may often be identified by the use of words such as “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “plans,” “targets,” “intends” “could,” “would,” “anticipates,” “potential,” “confident,” “optimistic” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, trends, guidance, expectations and future plans.
Because forward-looking statements relate to future results and occurrences, they are subject to inherent and various uncertainties, risks, and changes in circumstances that are difficult to predict, may change over time, are based on management’s expectations and assumptions at the time the statements are made and are not guarantees of future results. Numerous risks and other factors, many of which are beyond management’s control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. While there can be no assurance that any list of risks is complete, important risks and other factors that could cause actual results to differ materially from those contemplated by forward-looking statements include, but are not limited to: economic or business conditions in Texas, the United States or globally that impact TCBI or its customers; negative credit quality developments arising from the foregoing or other factors; TCBI’s ability to effectively manage its liquidity and maintain adequate regulatory capital to support its businesses; TCBI’s ability to pursue and execute upon growth plans, whether as a function of capital, liquidity or other limitations; TCBI’s ability to successfully execute its business strategy, including its strategic plan and developing and executing new lines of business and new products and services; the extensive regulations to which TCBI is subject and its ability to comply with applicable governmental regulations, including legislative and regulatory changes; TCBI’s ability to effectively manage information technology systems, including third party vendors, cyber or data privacy incidents or other failures, disruptions or security breaches; elevated or further changes in interest rates, including the impact of interest rates on TCBI’s securities portfolio and funding costs, as well as related balance sheet implications stemming from the fair value of our assets and liabilities; the effectiveness of TCBI’s risk management processes strategies and monitoring; fluctuations in commercial and residential real estate values, especially as they relate to the value of collateral supporting TCBI’s loans; the failure to identify, attract and retain key personnel and other employees; increased or expanded competition from banks and other financial service providers in TCBI’s markets; adverse developments in the banking industry and the potential impact of such developments on customer confidence, liquidity and regulatory responses to these developments, including in the context of regulatory examinations and related findings and actions; negative press and social media attention with respect to the banking industry or TCBI, in particular; claims, litigation or regulatory investigations and actions that TCBI may become subject to; severe weather, natural disasters, climate change, acts of war, terrorism, global conflict (including those already reported by the media, as well as others that may arise), or other external events, as well as related legislative and regulatory initiatives; and the risks and factors more fully described in TCBI’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents and filings with the SEC. The information contained in this communication speaks only as of its date. Except to the extent required by applicable law or regulation, we disclaim any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments.
| TEXAS CAPITAL BANCSHARES, INC. | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
| (dollars in thousands except per share data) | |||||||||||||||
| 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | |||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
| Interest income | $ | 452,533 | $ | 422,068 | $ | 417,378 | $ | 417,072 | $ | 425,769 | |||||
| Interest expense | 212,431 | 205,486 | 202,369 | 202,355 | 193,698 | ||||||||||
| Net interest income | 240,102 | 216,582 | 215,009 | 214,717 | 232,071 | ||||||||||
| Provision for credit losses | 10,000 | 20,000 | 19,000 | 19,000 | 18,000 | ||||||||||
| Net interest income after provision for credit losses | 230,102 | 196,582 | 196,009 | 195,717 | 214,071 | ||||||||||
| Non-interest income | (114,771) | 50,424 | 41,319 | 31,133 | 46,872 | ||||||||||
| Non-interest expense | 195,324 | 188,409 | 202,393 | 201,385 | 179,891 | ||||||||||
| Income/(loss) before income taxes | (79,993) | 58,597 | 34,935 | 25,465 | 81,052 | ||||||||||
| Income tax expense/(benefit) | (18,674) | 16,935 | 8,793 | 5,315 | 19,373 | ||||||||||
| Net income/(loss) | (61,319) | 41,662 | 26,142 | 20,150 | 61,679 | ||||||||||
| Preferred stock dividends | 4,313 | 4,312 | 4,313 | 4,312 | 4,313 | ||||||||||
| Net income/(loss) available to common stockholders | $ | (65,632) | $ | 37,350 | $ | 21,829 | $ | 15,838 | $ | 57,366 | |||||
| Diluted earnings/(loss) per common share | $ | (1.41) | $ | 0.80 | $ | 0.46 | $ | 0.33 | $ | 1.18 | |||||
| Diluted common shares | 46,608,742 | 46,872,498 | 47,711,192 | 48,097,517 | 48,528,698 | ||||||||||
| CONSOLIDATED BALANCE SHEET DATA | |||||||||||||||
| Total assets | $ | 31,629,299 | $ | 29,854,994 | $ | 29,180,585 | $ | 28,356,266 | $ | 29,628,249 | |||||
| Loans held for investment | 16,764,512 | 16,700,569 | 16,677,691 | 16,362,230 | 16,183,882 | ||||||||||
| Loans held for investment, mortgage finance | 5,529,659 | 5,078,161 | 4,153,313 | 3,978,328 | 4,429,489 | ||||||||||
| Loans held for sale | 9,022 | 36,785 | 37,750 | 44,105 | 155,073 | ||||||||||
| Interest bearing cash and cash equivalents | 3,894,537 | 2,691,352 | 3,148,157 | 3,042,357 | 3,975,860 | ||||||||||
| Investment securities | 4,405,520 | 4,388,976 | 4,414,280 | 4,143,194 | 4,069,717 | ||||||||||
| Non-interest bearing deposits | 9,070,804 | 7,987,715 | 8,478,215 | 7,328,276 | 9,352,883 | ||||||||||
| Total deposits | 25,865,255 | 23,818,327 | 23,954,037 | 22,371,839 | 23,878,978 | ||||||||||
| Short-term borrowings | 1,035,000 | 1,675,000 | 750,000 | 1,500,000 | 1,400,000 | ||||||||||
| Long-term debt | 660,172 | 659,997 | 859,823 | 859,147 | 858,471 | ||||||||||
| Stockholders’ equity | 3,354,044 | 3,175,601 | 3,170,662 | 3,199,142 | 3,077,700 | ||||||||||
| End of period shares outstanding | 46,207,757 | 46,188,078 | 46,986,275 | 47,237,912 | 48,015,003 | ||||||||||
| Book value per share | $ | 66.09 | $ | 62.26 | $ | 61.10 | $ | 61.37 | $ | 57.85 | |||||
| Tangible book value per share(1) | $ | 66.06 | $ | 62.23 | $ | 61.06 | $ | 61.34 | $ | 57.82 | |||||
| SELECTED FINANCIAL RATIOS | |||||||||||||||
| Net interest margin | 3.16 | % | 3.01 | % | 3.03 | % | 2.93 | % | 3.13 | % | |||||
| Return on average assets | (0.78) | % | 0.56 | % | 0.36 | % | 0.27 | % | 0.81 | % | |||||
| Return on average common equity | (8.87) | % | 5.26 | % | 3.03 | % | 2.25 | % | 8.08 | % | |||||
| Non-interest income to average earning assets | (1.52) | % | 0.71 | % | 0.59 | % | 0.43 | % | 0.64 | % | |||||
| Efficiency ratio(2) | 155.8 | % | 70.6 | % | 79.0 | % | 81.9 | % | 64.5 | % | |||||
| Non-interest expense to average earning assets | 2.59 | % | 2.65 | % | 2.89 | % | 2.79 | % | 2.46 | % | |||||
| Common equity to total assets | 9.7 | % | 9.6 | % | 9.8 | % | 10.2 | % | 9.4 | % | |||||
| Tangible common equity to total tangible assets(3) | 9.7 | % | 9.6 | % | 9.8 | % | 10.2 | % | 9.4 | % | |||||
| Common Equity Tier 1 | 11.2 | % | 11.6 | % | 12.4 | % | 12.6 | % | 12.7 | % | |||||
| Tier 1 capital | 12.6 | % | 13.1 | % | 13.9 | % | 14.2 | % | 14.3 | % | |||||
| Total capital | 15.2 | % | 15.7 | % | 16.6 | % | 17.1 | % | 17.1 | % | |||||
| Leverage | 11.4 | % | 12.2 | % | 12.4 | % | 12.2 | % | 12.1 | % |
(1) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(2) Non-interest expense divided by the sum of net interest income and non-interest income.
(3) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by total assets, less goodwill and intangibles.
| TEXAS CAPITAL BANCSHARES, INC. | |||||
|---|---|---|---|---|---|
| CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||
| (dollars in thousands) | |||||
| September 30, 2023 | % Change | ||||
| Assets | |||||
| Cash and due from banks | 297,048 | $ | 216,916 | 37 | % |
| Interest bearing cash and cash equivalents | 3,975,860 | (2) | % | ||
| Available-for-sale debt securities | 3,147,865 | 12 | % | ||
| Held-to-maturity debt securities | 881,352 | (8) | % | ||
| Equity securities | 40,500 | 84 | % | ||
| Investment securities | 4,069,717 | 8 | % | ||
| Loans held for sale | 155,073 | (94) | % | ||
| Loans held for investment, mortgage finance | 4,429,489 | 25 | % | ||
| Loans held for investment | 16,183,882 | 4 | % | ||
| Less: Allowance for credit losses on loans | 244,902 | 12 | % | ||
| Loans held for investment, net | 20,368,469 | 8 | % | ||
| Premises and equipment, net | 31,050 | 163 | % | ||
| Accrued interest receivable and other assets | 809,668 | 14 | % | ||
| Goodwill and intangibles, net | 1,496 | — | % | ||
| Total assets | 31,629,299 | $ | 29,628,249 | 7 | % |
| Liabilities and Stockholders’ Equity | |||||
| Liabilities: | |||||
| Non-interest bearing deposits | 9,070,804 | $ | 9,352,883 | (3) | % |
| Interest bearing deposits | 14,526,095 | 16 | % | ||
| Total deposits | 23,878,978 | 8 | % | ||
| Accrued interest payable | 31,149 | (40) | % | ||
| Other liabilities | 381,951 | 82 | % | ||
| Short-term borrowings | 1,400,000 | (26) | % | ||
| Long-term debt | 858,471 | (23) | % | ||
| Total liabilities | 26,550,549 | 6 | % | ||
| Stockholders’ equity: | |||||
| Preferred stock, .01 par value, 1,000 liquidation value: | |||||
| Authorized shares - 10,000,000 | |||||
| Issued shares - 300,000 shares issued at September 30, 2024 and 2023 | 300,000 | — | % | ||
| Common stock, .01 par value: | |||||
| Authorized shares - 100,000,000 | |||||
| Issued shares - 51,494,260 and 51,110,447 at September 30, 2024 and 2023, respectively | 511 | 1 | % | ||
| Additional paid-in capital | 1,039,074 | 1 | % | ||
| Retained earnings | 2,419,555 | — | % | ||
| Treasury stock - 5,286,503 and 3,095,444 shares at cost at September 30, 2024 and 2023, respectively | (175,528) | 72 | % | ||
| Accumulated other comprehensive loss, net of taxes | (505,912) | (75) | % | ||
| Total stockholders’ equity | 3,077,700 | 9 | % | ||
| Total liabilities and stockholders’ equity | 31,629,299 | $ | 29,628,249 | 7 | % |
All values are in US Dollars.
| TEXAS CAPITAL BANCSHARES, INC. | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||
| (dollars in thousands except per share data) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Interest income | |||||||||||||||
| Interest and fees on loans | $ | 361,407 | $ | 345,138 | $ | 1,037,537 | $ | 975,443 | |||||||
| Investment securities | 38,389 | 27,070 | 104,117 | 79,840 | |||||||||||
| Interest bearing cash and cash equivalents | 52,737 | 53,561 | 150,325 | 157,568 | |||||||||||
| Total interest income | 452,533 | 425,769 | 1,291,979 | 1,212,851 | |||||||||||
| Interest expense | |||||||||||||||
| Deposits | 190,255 | 160,117 | 547,135 | 417,602 | |||||||||||
| Short-term borrowings | 13,784 | 19,576 | 39,316 | 52,573 | |||||||||||
| Long-term debt | 8,392 | 14,005 | 33,835 | 43,270 | |||||||||||
| Total interest expense | 212,431 | 193,698 | 620,286 | 513,445 | |||||||||||
| Net interest income | 240,102 | 232,071 | 671,693 | 699,406 | |||||||||||
| Provision for credit losses | 10,000 | 18,000 | 49,000 | 53,000 | |||||||||||
| Net interest income after provision for credit losses | 230,102 | 214,071 | 622,693 | 646,406 | |||||||||||
| Non-interest income | |||||||||||||||
| Service charges on deposit accounts | 6,307 | 5,297 | 18,557 | 15,477 | |||||||||||
| Wealth management and trust fee income | 4,040 | 3,509 | 11,306 | 10,653 | |||||||||||
| Brokered loan fees | 2,400 | 2,532 | 6,442 | 6,842 | |||||||||||
| Investment banking and advisory fees | 34,753 | 23,099 | 78,225 | 56,764 | |||||||||||
| Trading income | 5,786 | 6,092 | 16,148 | 18,693 | |||||||||||
| Available-for-sale debt securities gains/(losses), net | (179,581) | — | (179,581) | 489 | |||||||||||
| Other | 11,524 | 6,343 | 25,875 | 21,368 | |||||||||||
| Total non-interest income | (114,771) | 46,872 | (23,028) | 130,286 | |||||||||||
| Non-interest expense | |||||||||||||||
| Salaries and benefits | 121,138 | 110,010 | 368,705 | 351,730 | |||||||||||
| Occupancy expense | 12,937 | 9,910 | 33,340 | 29,011 | |||||||||||
| Marketing | 5,863 | 4,757 | 17,895 | 20,168 | |||||||||||
| Legal and professional | 11,135 | 17,614 | 38,603 | 47,797 | |||||||||||
| Communications and technology | 25,951 | 19,607 | 69,078 | 57,655 | |||||||||||
| Federal Deposit Insurance Corporation insurance assessment | 4,906 | 5,769 | 18,897 | 11,632 | |||||||||||
| Other | 13,394 | 12,224 | 39,608 | 37,569 | |||||||||||
| Total non-interest expense | 195,324 | 179,891 | 586,126 | 555,562 | |||||||||||
| Income/(loss) before income taxes | (79,993) | 81,052 | 13,539 | 221,130 | |||||||||||
| Income tax expense/(benefit) | (18,674) | 19,373 | 7,054 | 52,139 | |||||||||||
| Net income/(loss) | (61,319) | 61,679 | 6,485 | 168,991 | |||||||||||
| Preferred stock dividends | 4,313 | 4,313 | 12,938 | 12,938 | |||||||||||
| Net income/(loss) available to common stockholders | $ | (65,632) | $ | 57,366 | $ | (6,453) | $ | 156,053 | |||||||
| Basic earnings/(loss) per common share | $ | (1.42) | $ | 1.19 | $ | (0.14) | $ | 3.24 | |||||||
| Diluted earnings/(loss) per common share | $ | (1.41) | $ | 1.18 | $ | (0.14) | $ | 3.20 | |||||||
| TEXAS CAPITAL BANCSHARES, INC. | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| SUMMARY OF CREDIT LOSS EXPERIENCE | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | |||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||
| Allowance for credit losses on loans: | |||||||||||||||
| Beginning balance | $ | 267,297 | $ | 263,962 | $ | 249,973 | $ | 244,902 | $ | 237,343 | |||||
| Allowance established for acquired purchase credit deterioration loans | 2,579 | — | — | — | — | ||||||||||
| Loans charged-off: | |||||||||||||||
| Commercial | 6,120 | 9,997 | 7,544 | 8,356 | 13,246 | ||||||||||
| Commercial real estate | 262 | 2,111 | 3,325 | 5,500 | — | ||||||||||
| Consumer | 30 | — | — | — | 41 | ||||||||||
| Total charge-offs | 6,412 | 12,108 | 10,869 | 13,856 | 13,287 | ||||||||||
| Recoveries: | |||||||||||||||
| Commercial | 329 | 153 | 105 | 15 | 4,346 | ||||||||||
| Commercial real estate | — | — | — | 4 | — | ||||||||||
| Consumer | — | — | — | — | — | ||||||||||
| Total recoveries | 329 | 153 | 105 | 19 | 4,346 | ||||||||||
| Net charge-offs | 6,083 | 11,955 | 10,764 | 13,837 | 8,941 | ||||||||||
| Provision for credit losses on loans | 9,350 | 15,290 | 24,753 | 18,908 | 16,500 | ||||||||||
| Ending balance | $ | 273,143 | $ | 267,297 | $ | 263,962 | $ | 249,973 | $ | 244,902 | |||||
| Allowance for off-balance sheet credit losses: | |||||||||||||||
| Beginning balance | $ | 45,319 | $ | 40,609 | $ | 46,362 | $ | 46,270 | $ | 44,770 | |||||
| Provision for off-balance sheet credit losses | 650 | 4,710 | (5,753) | 92 | 1,500 | ||||||||||
| Ending balance | $ | 45,969 | $ | 45,319 | $ | 40,609 | $ | 46,362 | $ | 46,270 | |||||
| Total allowance for credit losses | $ | 319,112 | $ | 312,616 | $ | 304,571 | $ | 296,335 | $ | 291,172 | |||||
| Total provision for credit losses | $ | 10,000 | $ | 20,000 | $ | 19,000 | $ | 19,000 | $ | 18,000 | |||||
| Allowance for credit losses on loans to total loans held for investment | 1.23 | % | 1.23 | % | 1.27 | % | 1.23 | % | 1.19 | % | |||||
| Allowance for credit losses on loans to average total loans held for investment | 1.24 | % | 1.27 | % | 1.32 | % | 1.24 | % | 1.17 | % | |||||
| Net charge-offs to average total loans held for investment(1) | 0.11 | % | 0.23 | % | 0.22 | % | 0.27 | % | 0.17 | % | |||||
| Net charge-offs to average total loans held for investment for last 12 months(1) | 0.20 | % | 0.22 | % | 0.20 | % | 0.25 | % | 0.26 | % | |||||
| Total provision for credit losses to average total loans held for investment(1) | 0.18 | % | 0.38 | % | 0.38 | % | 0.37 | % | 0.34 | % | |||||
| Total allowance for credit losses to total loans held for investment | 1.43 | % | 1.44 | % | 1.46 | % | 1.46 | % | 1.41 | % |
(1)Interim period ratios are annualized.
| TEXAS CAPITAL BANCSHARES, INC. | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | |||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||
| Non-accrual loans held for investment | $ | 88,960 | $ | 85,021 | $ | 92,849 | $ | 81,398 | $ | 63,129 | |||||
| Non-accrual loans held for sale(1) | — | — | 9,250 | — | — | ||||||||||
| Other real estate owned | — | — | — | — | — | ||||||||||
| Total non-performing assets | $ | 88,960 | $ | 85,021 | $ | 102,099 | $ | 81,398 | $ | 63,129 | |||||
| Non-accrual loans held for investment to total loans held for investment | 0.40 | % | 0.39 | % | 0.45 | % | 0.40 | % | 0.31 | % | |||||
| Total non-performing assets to total assets | 0.28 | % | 0.28 | % | 0.35 | % | 0.29 | % | 0.21 | % | |||||
| Allowance for credit losses on loans to non-accrual loans held for investment | 3.1x | 3.1x | 2.8x | 3.1x | 3.9x | ||||||||||
| Total allowance for credit losses to non-accrual loans held for investment | 3.6x | 3.7x | 3.3x | 3.6x | 4.6x | ||||||||||
| Loans held for investment past due 90 days and still accruing | $ | 5,281 | $ | 286 | $ | 3,674 | $ | 19,523 | $ | 4,602 | |||||
| Loans held for investment past due 90 days to total loans held for investment | 0.02 | % | — | % | 0.02 | % | 0.10 | % | 0.02 | % | |||||
| Loans held for sale past due 90 days and still accruing | $ | — | $ | 64 | $ | 147 | $ | — | $ | — |
(1) First quarter 2024 includes one non-accrual loan previously reported in loans held for investment that was transferred at fair value to held for sale as of March 31, 2024.
| TEXAS CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||
| 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | ||||||||||||||||||||||||||
| 2024 | 2024 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 361,407 | $ | 345,251 | $ | 330,879 | $ | 325,210 | $ | 345,138 | ||||||||||||||||||||
| Investment securities | 38,389 | 33,584 | 32,144 | 28,454 | 27,070 | |||||||||||||||||||||||||
| Interest bearing deposits in other banks | 52,737 | 43,233 | 54,355 | 63,408 | 53,561 | |||||||||||||||||||||||||
| Total interest income | 452,533 | 422,068 | 417,378 | 417,072 | 425,769 | |||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||
| Deposits | 190,255 | 181,280 | 175,600 | 170,173 | 160,117 | |||||||||||||||||||||||||
| Short-term borrowings | 13,784 | 12,749 | 12,783 | 18,069 | 19,576 | |||||||||||||||||||||||||
| Long-term debt | 8,392 | 11,457 | 13,986 | 14,113 | 14,005 | |||||||||||||||||||||||||
| Total interest expense | 212,431 | 205,486 | 202,369 | 202,355 | 193,698 | |||||||||||||||||||||||||
| Net interest income | 240,102 | 216,582 | 215,009 | 214,717 | 232,071 | |||||||||||||||||||||||||
| Provision for credit losses | 10,000 | 20,000 | 19,000 | 19,000 | 18,000 | |||||||||||||||||||||||||
| Net interest income after provision for credit losses | 230,102 | 196,582 | 196,009 | 195,717 | 214,071 | |||||||||||||||||||||||||
| Non-interest income | ||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 6,307 | 5,911 | 6,339 | 5,397 | 5,297 | |||||||||||||||||||||||||
| Wealth management and trust fee income | 4,040 | 3,699 | 3,567 | 3,302 | 3,509 | |||||||||||||||||||||||||
| Brokered loan fees | 2,400 | 2,131 | 1,911 | 2,076 | 2,532 | |||||||||||||||||||||||||
| Investment banking and advisory fees | 34,753 | 25,048 | 18,424 | 6,906 | 23,099 | |||||||||||||||||||||||||
| Trading income | 5,786 | 5,650 | 4,712 | 3,819 | 6,092 | |||||||||||||||||||||||||
| Available-for-sale debt securities gains/(losses), net | (179,581) | — | — | — | — | |||||||||||||||||||||||||
| Other | 11,524 | 7,985 | 6,366 | 9,633 | 6,343 | |||||||||||||||||||||||||
| Total non-interest income | (114,771) | 50,424 | 41,319 | 31,133 | 46,872 | |||||||||||||||||||||||||
| Non-interest expense | ||||||||||||||||||||||||||||||
| Salaries and benefits | 121,138 | 118,840 | 128,727 | 107,970 | 110,010 | |||||||||||||||||||||||||
| Occupancy expense | 12,937 | 10,666 | 9,737 | 9,483 | 9,910 | |||||||||||||||||||||||||
| Marketing | 5,863 | 5,996 | 6,036 | 5,686 | 4,757 | |||||||||||||||||||||||||
| Legal and professional | 11,135 | 11,273 | 16,195 | 17,127 | 17,614 | |||||||||||||||||||||||||
| Communications and technology | 25,951 | 22,013 | 21,114 | 23,607 | 19,607 | |||||||||||||||||||||||||
| Federal Deposit Insurance Corporation insurance assessment | 4,906 | 5,570 | 8,421 | 25,143 | 5,769 | |||||||||||||||||||||||||
| Other | 13,394 | 14,051 | 12,163 | 12,369 | 12,224 | |||||||||||||||||||||||||
| Total non-interest expense | 195,324 | 188,409 | 202,393 | 201,385 | 179,891 | |||||||||||||||||||||||||
| Income/(loss) before income taxes | (79,993) | 58,597 | 34,935 | 25,465 | 81,052 | |||||||||||||||||||||||||
| Income tax expense/(benefit) | (18,674) | 16,935 | 8,793 | 5,315 | 19,373 | |||||||||||||||||||||||||
| Net income/(loss) | (61,319) | 41,662 | 26,142 | 20,150 | 61,679 | |||||||||||||||||||||||||
| Preferred stock dividends | 4,313 | 4,312 | 4,313 | 4,312 | 4,313 | |||||||||||||||||||||||||
| Net income/(loss) available to common shareholders | $ | (65,632) | $ | 37,350 | $ | 21,829 | $ | 15,838 | $ | 57,366 | ||||||||||||||||||||
| TEXAS CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1) | ||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||
| 3rd Quarter 2024 | 2nd Quarter 2024 | 1st Quarter 2024 | 4th Quarter 2023 | 3rd Quarter 2023 | ||||||||||||||||||||||||||
| Average<br>Balance | Income/<br>Expense | Yield/<br>Rate | Average<br>Balance | Income/<br>Expense | Yield/<br>Rate | Average<br>Balance | Income/<br>Expense | Yield/<br>Rate | Average<br>Balance | Income/<br>Expense | Yield/<br>Rate | Average<br>Balance | Income/<br>Expense | Yield/<br>Rate | ||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||
| Investment securities(2) | $ | 4,314,834 | $ | 38,389 | 3.34 | % | $ | 4,427,023 | $ | 33,584 | 2.80 | % | $ | 4,299,368 | $ | 32,144 | 2.77 | % | $ | 4,078,975 | $ | 28,454 | 2.48 | % | $ | 4,204,749 | $ | 27,070 | 2.33 | % |
| Interest bearing cash and cash equivalents | 3,958,843 | 52,737 | 5.30 | % | 3,273,069 | 43,233 | 5.31 | % | 4,051,627 | 54,355 | 5.40 | % | 4,637,374 | 63,408 | 5.42 | % | 3,965,045 | 53,561 | 5.36 | % | ||||||||||
| Loans held for sale | 23,793 | 565 | 9.44 | % | 28,768 | 683 | 9.55 | % | 51,164 | 1,184 | 9.31 | % | 29,071 | 672 | 9.17 | % | 31,878 | 647 | 8.06 | % | ||||||||||
| Loans held for investment, mortgage finance(4) | 5,152,317 | 54,371 | 4.20 | % | 4,357,288 | 42,722 | 3.94 | % | 3,517,707 | 31,455 | 3.60 | % | 3,946,280 | 33,709 | 3.39 | % | 4,697,702 | 50,813 | 4.29 | % | ||||||||||
| Loans held for investment(3)(4) | 16,792,446 | 306,541 | 7.26 | % | 16,750,788 | 301,910 | 7.25 | % | 16,522,089 | 298,306 | 7.26 | % | 16,164,233 | 290,897 | 7.14 | % | 16,317,324 | 293,750 | 7.14 | % | ||||||||||
| Less: Allowance for credit losses on loans | 266,915 | — | — | 263,145 | — | — | 249,936 | — | — | 244,287 | — | — | 238,883 | — | — | |||||||||||||||
| Loans held for investment, net | 21,677,848 | 360,912 | 6.62 | % | 20,844,931 | 344,632 | 6.65 | % | 19,789,860 | 329,761 | 6.70 | % | 19,866,226 | 324,606 | 6.48 | % | 20,776,143 | 344,563 | 6.58 | % | ||||||||||
| Total earning assets | 29,975,318 | 452,603 | 5.96 | % | 28,573,791 | 422,132 | 5.86 | % | 28,192,019 | 417,444 | 5.88 | % | 28,611,646 | 417,140 | 5.69 | % | 28,977,815 | 425,841 | 5.75 | % | ||||||||||
| Cash and other assets | 1,239,855 | 1,177,061 | 1,058,463 | 1,120,354 | 1,106,031 | |||||||||||||||||||||||||
| Total assets | $ | 31,215,173 | $ | 29,750,852 | $ | 29,250,482 | $ | 29,732,000 | $ | 30,083,846 | ||||||||||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||
| Transaction deposits | $ | 1,988,688 | $ | 15,972 | 3.20 | % | $ | 2,061,622 | $ | 16,982 | 3.31 | % | $ | 2,006,493 | $ | 16,858 | 3.38 | % | $ | 1,972,324 | $ | 15,613 | 3.14 | % | $ | 1,755,451 | $ | 13,627 | 3.08 | % |
| Savings deposits | 12,240,616 | 147,770 | 4.80 | % | 11,981,668 | 143,173 | 4.81 | % | 11,409,677 | 136,790 | 4.82 | % | 11,043,155 | 132,801 | 4.77 | % | 10,858,306 | 127,323 | 4.65 | % | ||||||||||
| Time deposits | 2,070,537 | 26,513 | 5.09 | % | 1,658,899 | 21,125 | 5.12 | % | 1,719,325 | 21,952 | 5.14 | % | 1,716,812 | 21,759 | 5.03 | % | 1,610,235 | 19,167 | 4.72 | % | ||||||||||
| Total interest bearing deposits | 16,299,841 | 190,255 | 4.64 | % | 15,702,189 | 181,280 | 4.64 | % | 15,135,495 | 175,600 | 4.67 | % | 14,732,291 | 170,173 | 4.58 | % | 14,223,992 | 160,117 | 4.47 | % | ||||||||||
| Short-term borrowings | 1,012,608 | 13,784 | 5.42 | % | 927,253 | 12,749 | 5.53 | % | 912,088 | 12,783 | 5.64 | % | 1,257,609 | 18,069 | 5.70 | % | 1,393,478 | 19,576 | 5.57 | % | ||||||||||
| Long-term debt | 660,098 | 8,392 | 5.06 | % | 778,401 | 11,457 | 5.92 | % | 859,509 | 13,986 | 6.54 | % | 858,858 | 14,113 | 6.52 | % | 858,167 | 14,005 | 6.47 | % | ||||||||||
| Total interest bearing liabilities | 17,972,547 | 212,431 | 4.70 | % | 17,407,843 | 205,486 | 4.75 | % | 16,907,092 | 202,369 | 4.81 | % | 16,848,758 | 202,355 | 4.76 | % | 16,475,637 | 193,698 | 4.66 | % | ||||||||||
| Non-interest bearing deposits | 9,439,020 | 8,647,594 | 8,637,775 | 9,247,491 | 10,016,579 | |||||||||||||||||||||||||
| Other liabilities | 558,368 | 537,754 | 509,286 | 541,162 | 474,869 | |||||||||||||||||||||||||
| Stockholders’ equity | 3,245,238 | 3,157,661 | 3,196,329 | 3,094,589 | 3,116,761 | |||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 31,215,173 | $ | 29,750,852 | $ | 29,250,482 | $ | 29,732,000 | $ | 30,083,846 | ||||||||||||||||||||
| Net interest income | $ | 240,172 | $ | 216,646 | $ | 215,075 | $ | 214,785 | $ | 232,143 | ||||||||||||||||||||
| Net interest margin | 3.16 | % | 3.01 | % | 3.03 | % | 2.93 | % | 3.13 | % |
(1) Taxable equivalent rates used where applicable.
(2) Yields on investment securities are calculated using available-for-sale securities at amortized cost.
(3) Average balances include non-accrual loans.
(4) In the first quarter of 2024, enhancements were made to our methodology for applying relationship pricing credits to mortgage client loans. To conform to the current period presentation, certain prior period interest income amounts have been reclassified from loans held for investment, mortgage finance to loans held for investment and related yields have been adjusted accordingly.
10
a3q2024_earningsxpresent
© 2024 Texas Capital Bank Member FDIC October 17, 2024 Q3-2024 Earnings
2 Forward-Looking Statements This communication contains “forward-looking statements” within the meaning of and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, TCBI’s financial condition, results of operations, business plans and future performance. These statements are not historical in nature and may often be identified by the use of words such as “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “plans,” “targets,” “intends” “could,” “would,” “anticipates,” “potential,” “confident,” “optimistic” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, trends, guidance, expectations and future plans. Because forward-looking statements relate to future results and occurrences, they are subject to inherent and various uncertainties, risks, and changes in circumstances that are difficult to predict, may change over time, are based on management’s expectations and assumptions at the time the statements are made and are not guarantees of future results. Numerous risks and other factors, many of which are beyond management’s control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. While there can be no assurance that any list of risks is complete, important risks and other factors that could cause actual results to differ materially from those contemplated by forward- looking statements include, but are not limited to: economic or business conditions in Texas, the United States or globally that impact TCBI or its customers; negative credit quality developments arising from the foregoing or other factors; TCBI’s ability to effectively manage its liquidity and maintain adequate regulatory capital to support its businesses; TCBI’s ability to pursue and execute upon growth plans, whether as a function of capital, liquidity or other limitations; TCBI’s ability to successfully execute its business strategy, including its strategic plan and developing and executing new lines of business and new products and services; the extensive regulations to which TCBI is subject and its ability to comply with applicable governmental regulations, including legislative and regulatory changes; TCBI’s ability to effectively manage information technology systems, including third party vendors, cyber or data privacy incidents or other failures, disruptions or security breaches; elevated or further changes in interest rates, including the impact of interest rates on TCBI’s securities portfolio and funding costs, as well as related balance sheet implications stemming from the fair value of our assets and liabilities; the effectiveness of TCBI’s risk management processes strategies and monitoring; fluctuations in commercial and residential real estate values, especially as they relate to the value of collateral supporting TCBI’s loans; the failure to identify, attract and retain key personnel and other employees; increased or expanded competition from banks and other financial service providers in TCBI’s markets; adverse developments in the banking industry and the potential impact of such developments on customer confidence, liquidity and regulatory responses to these developments, including in the context of regulatory examinations and related findings and actions; negative press and social media attention with respect to the banking industry or TCBI, in particular; claims, litigation or regulatory investigations and actions that TCBI may become subject to; severe weather, natural disasters, climate change, acts of war, terrorism, global conflict (including those already reported by the media, as well as others that may arise), or other external events, as well as related legislative and regulatory initiatives; and the risks and factors more fully described in TCBI’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10- Q and other documents and filings with the SEC. The information contained in this communication speaks only as of its date. Except to the extent required by applicable law or regulation, we disclaim any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments.
3 Foundational Tenants of Value Creation in Place Financial Priorities Described 9/1/2021 Building Tangible Book Value // Reinvesting organically generated capital to improve client relevance and create a more valuable franchise Investment // Re-aligning the expense base to directly support the business and investing aggressively to take advantage of market opportunities that we are uniquely positioned to serve Revenue Growth // Growing top- line revenue as a result of expanded banking capabilities for best-in-class clients in our Texas and national markets Flagship Results Proactive, disciplined engagement with the best clients in our markets to provide the talent, products, and offerings they need through their entire life-cycles Structurally higher, more sustainable earnings driving greater performance and lower annual variability Consistent communication, enhanced accountability, and a bias for action ensure execution and delivery Commitment to financial resilience allowing us to serve clients, access markets, and support communities through all cycles Higher quality earnings and a lower cost of capital drive a significant expansion in incremental shareholder returns
4 Where We Are Going Where We Started Where We Are Going Where We Started 2025 YTD 2024 FY 2023 FY 2022 FY 2021 FY 2020Performance Metrics2025 YTD 2024 FY 2023 FY 2022 FY 2021 FY 2020Income Statement >1.10%0.03%0.64%1.04%0.67%0.18%Return on Average Assets~10%14.5%8.0%2.9%2.7%2.2% Investment Banking and Trading Income (% of Total Revenue) >12.5%(0.3%)6.2%11.4%8.4%2.1%Return on Average Tangible Common Equity3~5%4.0%2.8%2.4%2.5%1.4%Treasury Product Fees1 (% of Total Revenue) >1.10%0.69%0.69%0.55%0.69%0.33%Adj. Return on Average Assets415%–20% (3.6%)15.0%28.5%15.2%19.3%Non-Interest Income (% of Total Revenue) >12.5%6.5%6.7%5.8%8.7%4.2%Adj. Return on Average Tangible Common Equity315%–20%18.9%15.0%10.3%13.4%11.2%Adj. Non-Interest Income2 (% of Adj. Total Revenue2) >10%11.2%12.6%13.0%11.1%9.4%CET1Balance Sheet >20%28%30%30%38%29%Average Cash & Securities (% of Total Average Assets) <15%7%7%16%27%36%Average Indexed Deposits (% of Total Deposits) 2021 Strategic Performance Drivers Treasury Solutions Private Wealth Investment Banking Treasury product fees reached record levels, up 7% QoQ, and 16% YoY, supported by broad product contributions Continued growth in primary operating relationships; non-interest bearing deposits, excl MF9 increased $121 million or 4% QoQ Investment Banking Fees achieved another record quarter driven by Capital Markets, Syndications, and Sales & Trading After consecutive record quarters, expect modest pullback as pipeline rebuilds for a strong 2025 YoY GrowthQ3 ‘24Q2 ‘24Q1 ‘24Q4 ‘23Q3 ‘23Financial Performance 11%$4.1$4.0$4.0$3.8$3.7Assets Under Management5 ($bn) 16%$9.1 $8.5 $8.7 $7.8 $7.8 Treasury Product Fees1 ($mm) 15%$4.0 $3.7 $3.6 $3.3 $3.5 Wealth Management & Trust Fee Income ($mm) 39%$40.5 $30.7 $23.1 $10.7 $29.2 Investment Banking & Trading Income ($mm) 32%$53.7 $42.9 $35.4 $21.8 $40.5 Income from Areas of Focus ($mm) Assets under management increased 11% YoY with wealth fees growing for the third consecutive quarter, up 15% YoY Enhanced platform build is on track for completion this quarter and is expected to drive accelerated client adoption in ‘25
5 Financial Performance // Income Statement Adjusted (Non-GAAP4) Adjusted (Non-GAAP4) Adjusted (Non-GAAP4) Adjusted (Non-GAAP4)Financial Highlights ($mm) Q3 2024Q3 2024Q2 2024Q2 2024Q3 2023YTD 2024YTD 202420232023 $240.1 $240.1 $216.6 $216.6 $232.1 $671.7 $671.7 $914.1$914.1Net Interest Income 64.8 (114.8)50.4 50.4 46.9 156.6 (23.0)161.4161.4Non-Interest Revenue 304.9 125.3 267.0 267.0 278.9 828.2 648.7 1,075.51,075.5Total Revenue 190.1 195.3 187.9 188.4 179.9 570.4 586.1 737.1756.9Non-Interest Expense 114.9 (70.0)79.1 78.6 99.1 257.9 62.5 338.5318.6PPNR6 10.0 10.0 20.0 20.0 18.0 49.0 49.0 72.072.0Provision for Credit Losses 26.2 (18.7)17.0 16.9 19.4 54.3 7.1 62.157.5Income Tax Expense 78.7 (61.3)42.0 41.7 61.7 154.6 6.5 204.4189.1Net Income 4.3 4.3 4.3 4.3 4.3 12.9 12.9 17.317.3Preferred Stock Dividends 74.3 (65.6)37.7 37.4 57.4 141.6 (6.5)187.1171.9Net Income to Common Performance Metrics 1.00% (0.78%)0.57% 0.56% 0.81% 0.69% 0.03% 0.69%0.64%Return on Average Assets 1.46% (0.89%)1.07% 1.06% 1.31% 1.15% 0.28% 1.15%1.08%PPNR6 / Average Assets 62.3% 155.8% 70.4% 70.6% 64.5% 68.9% 90.4% 68.5%70.4%Efficiency Ratio7 10.0% (8.9%)5.3% 5.3% 8.1% 6.5% (0.3%)6.7%6.2%Return on Average Common Equity3 $1.59 ($1.41)$0.80 $0.80 $1.18 $3.01 ($0.14)$3.85$3.54Earnings Per Share Q3 2024Q2 2024Non-GAAP4 Adjustments ($mm) (114.8)50.4 Non-Interest Income 179.60.0Loss on AFS Securities Sale 64.8 50.4 Non-Interest Income, Adj. 195.3188.4Non-Interest Expense (0.7)0.5FDIC Special Assessment 5.90.0Restructuring Expenses 0.00.0Legal Settlement 190.1187.9 Non-Interest Expense, Adj. YTD 20242023Non-GAAP4 Adjustments ($mm) (23.0)161.4Non-Interest Income 179.60.0Loss on AFS Securities Sale 156.6 161.4Non-Interest Income, Adj. 586.1756.9Non-Interest Expense 2.819.9FDIC Special Assessment 7.90.0Restructuring Expenses 5.00.0Legal Settlement 570.4737.1Non-Interest Expense, Adj.
6 Balance Sheet Highlights ($mm) Ending Balances QoQQ3 2024Q2 2024Q3 2023 Assets 44% 4,192 2,913 4,193 Cash and Equivalents 0% 4,406 4,389 4,070 Total Securities 4% 10,968 10,534 10,366 Commercial Loans 9% 5,530 5,078 4,429 Mortgage Finance Loans (7%)5,315 5,689 5,359 CRE Loans 2% 569 558 537 Consumer Loans 2% 22,381 21,859 20,691 Gross LHI 2% (273)(267)(245)Allowance for Credit Losses on Loans 6% 31,629 29,855 29,628 Total Assets Financial Performance // Quarterly Balance Sheet Highlights Performance Metrics 27% 24% 28% Cash & Securities % of Assets 49% 48% 50% Commercial Loans % of Gross LHI (319)(313)(291)Total Allowance for Credit Losses ($mm) 1.43% 1.44% 1.41% Total ACL / Total LHI QoQQ3 2024Q2 2024Q3 2023 Liabilities 14% 9,071 7,988 9,353 Non-Interest Bearing Deposits 6% 16,794 15,831 14,526 Interest Bearing Deposits 9% 25,865 23,818 23,879 Total Deposits (38%)1,035 1,675 1,400 FHLB Borrowings 6% 28,275 26,679 26,551 Total Liabilities Equity (2%)3,182 3,243 3,284 Common Equity, Excl AOCI (65%)(128)(368)(506)AOCI 6% 3,354 3,176 3,078 Total Shareholder’s Equity 0% 46,207,757 46,188,078 48,015,003 Common Shares Outstanding 86% 91% 86% Total LHI % of Deposits 35% 34% 39% Non-Interest Bearing % of Deposits $66.09 $62.26 $57.85 Book Value Per Share $66.06 $62.23 $57.82 Tangible Book Value Per Share8
7 $4.3 $3.3 $4.4 $4.7 $3.9 $3.5 $4.4 $5.2 $4.1 $4.1 $5.1 $4.4 $4.0 $4.2 $5.1 $5.5 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $5.4 $5.5 $5.8 $5.7 $5.3 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $10.4 $10.4 $10.4 $10.5 $11.0 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Commercial loans increased $434mm or 4% QoQ Predominantly related to approx. $330 million of funded balances in the healthcare loan portfolio acquired at quarter end Commercial real estate loans decreased $374mm QoQ as payoff rates remain elevated Multi-family comprises $2.3bn or 44% of CRE loans Over 55% located in Texas and total portfolio avg. LTV of 47% Office balances declined to $408mm or 8% of CRE loans as several properties experienced paydowns or payoffs Mortgage Finance loan balances driven by anticipated Q3 seasonality resulted in a $795mm, or 18%, QoQ increase on an average basis, compared to a 7% increase in the comparable quarter last year Period end balances increased $451mm, or 9% Modest mortgage rate improvements nationwide in mid-August and September resulted in increased activity Loan Portfolio Composition Mortgage Finance Loans ($bn) Average Period End Commercial Loans ($bn) Commercial Real Estate Loans ($bn)
8 2.62% 2.82% 2.97% 2.99% 2.94% 2.60% 2.75% 2.83% 2.83% 2.76% 4.47% 4.58% 4.67% 4.64% 4.64% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $4.0 $3.6 $3.4 $3.4 $3.5 $3.4 $6.0 $5.6 $5.2 $5.2 $6.0 $5.6 $12.8 $13.6 $14.4 $15.1 $15.8 $16.3 $1.4 $1.1 $0.8 $0.6 $0.5 $0.5 $24.2 $24.0 $23.8 $24.3 $25.7 $25.9 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2024 Q3 2024 EOP Deposit and Funding Composition Total deposit balances increased $2bn or 9% QoQ Excluding MF9 non-interest bearing and brokered deposits, QoQ growth of $1.1bn or 6% resulting from sustained focus on growing client relationships Non-interest bearing, excl MF9 deposits grew $121 million or 4% QoQ as the firm continues to both onboard new clients and strengthen existing relationships through expanded product and service offerings Average MF9 non-interest bearing deposits increased by $770mm, with the ratio to average mortgage finance loans declining to 116% in Q3 compared to 120% in Q2 End of period balances increased by $962mm QoQ or 21% consistent with historical seasonal trends The majority of MF9 non-interest bearing deposits are compensated through relationship pricing which results in application of an interest credit to either the client’s mortgage finance or commercial loan yield Average cost of interest bearing deposits remained flat at 4.64%, while average cost of total deposits declined by 5bps QoQ Average Deposit Trends ($bn) Period End Deposit Flows ($mm) Funding Costs Non-Interest Bearing, excl MF9 MF9 Non-Interest Bearing Interest Bearing Interest Bearing Brokered Change %$Q3 2024Q2 2024 4% 121 3,444 3,323 Non-Interest Bearing, excl MF9 21% 962 5,627 4,665 MF9 Non-Interest Bearing 14% 1,083 9,071 7,988 Total Non-Interest Bearing 6% 969 16,276 15,307 Interest Bearing (1%)($5)$518 $524 Brokered Deposits 6% 964 16,794 15,831 Total Interest Bearing 9% $2,047 $25,865 $23,818 Total Deposits Total Cost of Funds Avg Cost of Int. Bearing Deposits Avg Cost of Total Deposits
9 (10.0%) (13.5%) (5.0%) (6.5%) 2.1% 3.1% 4.1% 6.1% (10.0%) (8.0%) (6.0%) (4.0%) (2.0%) 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Q2 2024 Q3 2024 -200bps Shock -100bps Shock +100bps Shock +200bps Shock Net Interest Income Sensitivity Standard Model Assumptions10 100bp & 200bp Parallel Shocks Loan Balances: Static Deposit Balances: Static Loan Spreads: Current Levels Up Scenario Int. Bearing Deposit Beta: ~80% Down Scenario Int. Bearing Deposit Beta: ~60% Investment Portfolio: Ratio held constant Hedging Profile Net Interest Income Sensitivity – Static Balance Sheet ($mm) $925mm$992mmBase NII11 Earning Assets Profile (Average) Q3 2024Q2 2024 YieldBalance ($mm)YieldBalance ($mm) 5.30% $3,959 5.31% $3,273 Interest Bearing Cash and Equivalents 3.34% 4,315 2.80% 4,427 Securities 9.44% 24 9.55% 29 Loans Held for Sale 7.26% 16,792 7.25% 16,751 LHI excl Mortgage Finance LHI 4.20% 5,152 3.94% 4,357 Mortgage Finance LHI --(267)--(263)ACL on Loans 5.96% $29,975 5.86% $28,574 Earning Assets 93% of LHI excluding Mortgage Finance LHI are variable rate $1.1bn of loans, or 7%, are fixed with 11% maturing or repricing in the next 12 months During the quarter, the firm restructured a portion of the AFS securities portfolio Sold $1.24bn of securities with a yield of 1.23% and reinvested proceeds into securities with a yield of 5.26% Securities portfolio duration ~4 years Loan hedges reduced interest income by $18.3 million this quarter and $54.4 million year to date Impacts of Mortgage Finance Mortgage Finance represents 23% of the average total LHI portfolio with the majority tied to 1-month SOFR which declined 49bps in Q3 Given the current rate outlook and seasonality factors, the average Mortgage Finance self funding ratio is expected to decline modestly during Q4 Firm’s overall net interest income sensitivity (per the chart above) is inclusive of Mortgage Finance NII impact on a flat balance sheet and does not account for changes in warehouse volumes in either a lower or higher rate environment $40 $20 ($49) ($99) $56 $29 ($60) ($125) Receive Rate Average Notional Balance ($bn) 3.66%2.9 Q3 2024 3.60%2.6 Q4 2024 3.60%2.6 Q1 2025 3.43%2.4 Q2 2025 3.09%1.3 Q3 2025 3.31%0.4 Q4 2025
10 $216.6 $0.6 $1.7 $8.3 $3.4 $2.2 $14.3 ($6.9) ($2.1) $2.0 $240.1 Q2 2024 Loans Excl MF Volume Loans Excl MF Yield MF Loan Volume MF Yield Loan Fees Investment Securities & Cash Interest Bearing Deposits Volume Interest Bearing Deposit Cost Borrowings Q3 2024 $232.1 $214.7 $215.0 $216.6 $240.1 3.13% 2.93% 3.03% 3.01% 3.16% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Net Interest Income Net Interest Margin $46.9 $31.1 $41.3 $50.4 ($114.8) $64.8 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $110.0 $108.0 $126.7 $118.8 $118.7 $69.9 $73.5 $65.7 $69.1 $71.3 $19.9 $10.0 $0.5 $5.3 $179.9 $201.4 $202.4 $188.4 $195.3 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 10% 5% 0% 39% 36% 61% 54% 63% 63% Q3-2024 Earnings Overview Net Interest Margin ($mm)Net Interest Income ($mm) Non-Interest Income ($mm) Non-Interest Expense ($mm) Salaries & Benefits Non-Recurring Items4Other NIE 60% Net interest income increased $23.5mm QoQ from higher average loan balances for the quarter and securities interest income related to the AFS bond repositioning beginning in mid-August Excluding the loss on sale of AFS securities4, non-interest income increased 29% QoQ Record level of income in the fee areas of focus Quarterly non-interest expense excluding non-recurring items4 increased $2.1mm to $190.1mm with salaries and benefits declining QoQ 9 9 9 9 37% 3% 37%32% % of Total Revenue, Adj.4 17% 13% 16% 19% 21% Non-Interest Income Non-Interest Income, Adj.4
11 60% 47% 50% 52% 75% 40% 53% 50% 48% 25% $431.8 $491.2 $584.5 $593.3 $579.8 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Commercial Mortgage Finance Real Estate Consumer 0.21% 0.29% 0.35% 0.28% 0.28% 0.17% 0.27% 0.22% 0.23% 0.11% 3.29% 3.63% 4.13% 3.95% 4.03% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 78% 81% 79% 80% 73% 22% 19% 21% 19% 26%1% 1% $245.6 $247.0 $275.0 $266.4 $317.9 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Commercial Mortgage Finance Real Estate Consumer Q3 2023 Q2 2024 Q3 2024Total ACL, ex MF9 / LHI ex MF9 Total ACL / LHI 4.6x 3.7x 3.6x 1.41% 1.44% 1.43% 1.76% 1.84% 1.87% Q3 2023 Q2 2024 Q3 2024 Asset Quality Trends Allowance for Credit Loss Reserve Ratios Asset Quality Ratios Special Mention Composition ($mm) Substandard Composition ($mm) $6.1$12.0$10.8$13.8$8.9Net Charge-Offs ($mm) NPAs/Total Assets Criticized/LHI NCOs/Avg. LHI Total ACL / Non- accrual Loans HFI ACL on Loans increased $5.8mm QoQ to $273mm, a continued build in the reserve to an all time high Total ACL, excl. MF9 increased to $314mm in Q3 from $307mm in Q2 Total ACL, excl. MF9 to LHI, excl. MF9 in the top 5 percent among Peers12 Total ACL to LHI ratio $6.1mm of net charge-offs, 0.11% of average LHI, related to several small commercial credits Year-to-date annualized provision expense as a percentage of average LHI is 31bps, or 39bps when excl. MF Criticized / LHI remained stable at 4.03% with total criticized loans increasing $38mm Special mention loans declined $13.5mm QoQ to $580mm as material payoffs and upgrades in the real estate portfolio were offset by migration of certain commercial credits Substandard loans increased $51.6mm QoQ to $318mm Non-performing assets increased $3.9 million QoQ, flat at 0.28% of total assets
12 12.70% 12.65% 12.38% 11.62% 11.19% >11.00% 1.58% 1.59% 1.56% 1.47% 1.44% 2.81% 2.83% 2.70% 2.56% 2.54% 17.09% 17.07% 16.64% 15.65% 15.17% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 2024 YE Target $57.82 $61.34 $61.06 $62.23 $66.06 $57.85 $61.37 $61.10 $62.26 $66.09 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 9.37% 10.22% 9.83% 9.63% 9.65% 9.38% 10.22% 9.84% 9.63% 9.66% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 2024 YE Target Capital Position and Trends Regulatory capital ratios remain exceptionally strong Total capital ratio of 15.17%, in the top quartile of the peer group12, and CET1 ratio of 11.19% CET1 declined 43bps QoQ primarily related to the loss on sale from repositioning AFS securities Tangible common equity / tangible assets13 ended the quarter at 9.65%, an important characteristic of our financially resilient business model and a key metric as we manage the balance sheet through- cycle Tangible common equity / tangible assets13 in top quintile of peer group12 Tangible book value per share8 increased by $3.83 driven by net income excluding the loss on the AFS securities portfolio transaction and additional AOCI improvement from end of period rate movements TBVPS of $66.06 is an all-time high for the Firm Regulatory Capital Levels Tangible Common Equity / Tangible Assets13 Tangible Book Value per Share8 Period End AOCI ($mm) ($128)($368)($380)($362)($506) AOCI per Share ($2.77)($7.96)($8.09)($7.66)($10.54) Tangible Common Equity / Tangible Assets13 Common Equity / Total Assets Peer12 Tangible Common Equity / Tangible Assets13 7.63%7.63%7.65%7.11% Tangible Book Value per Share8 Book Value per Share CET1 Tier 2 CapitalTier 1 Capital
13 Full Year 2024 Guidance FY 2023 Adjusted (Non-GAAP4) Low single-digit % growth$1,075.5mmTotal Revenue Low to mid single-digit % growth: Full Year Consensus$737.1mmNon-Interest Expense, Adjusted4 Maintained in Q4--Quarterly Operating Leverage (YoY Growth in Quarterly PPNR6, Adjusted4) >20%30%Average Cash & Total Securities (% of Average Total Assets) >11%12.6%CET1 Ratio Full Year 2024 Guidance Forward curve14 assumes a 2024 exit rate of 4.25% Total Revenue, Adjusted2 guidance decreased from low to mid single-digit percent annual growth Non-Interest Expense, Adjusted4, remains unchanged Quarterly Operating Leverage achieved in Q3 and expect to maintain in Q4 Average Cash & Total Securities remains unchanged CET1 ratio target remains unchanged Guidance Commentary
14 1. Includes service charges on deposit accounts, as well as fees related to our commercial card program, merchant transactions, and FX transactions, all of which are included in other non-interest income and totaled $2.8 million for FY 2020, $4.0 million for FY 2021, $6.1 million for FY 2022, $9.4 million for FY 2023, $7.7 million for YTD 2024, and $2.5 million, $2.4 million, $2.4 million, $2.5 million, and $2.8 million for Q3 2023, Q4 2023, Q1 2024, Q2 2024, and Q3 2024 respectively 2. Non-GAAP Reconciliation // Adjusted Non-Interest Income and Total Revenue 3. See slide: Non-GAAP Reconciliation // Return on Average Tangible Common Equity (ROATCE) 4. See slide: Non-GAAP Reconciliation // Adjusted Earnings & Ratios 5. Assets Under Management includes non-discretionary brokerage assets that the Firm earns wealth management and trust fee income on 6. “PPNR” used as an abbreviation for Pre-Provision Net Revenue which is the sum of net interest income and non-interest income, less non-interest expense 7. Non-interest expense divided by the sum of net interest income and non-interest income 8. Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end 9. “MF” used as abbreviation for Mortgage Finance 10. Model assumptions are only for Q3 2024; See prior TCBI Earnings Materials for prior model assumptions 11. Baseline scenarios hold constant balances, market rates, and assumptions as of period end reporting 12. Major exchange traded US peer banks with $20-100 billion in total assets, excluding PR headquartered banks and merger targets; Source: S&P Capital IQ Pro; Data as of Q2 2024 13. Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by total assets, less goodwill and intangibles 14. Forward curve as of October 4, 2024 YTD 2024 ($M)2023 ($M)2022 ($M)2021 ($M)2020 ($M) Adjusted3As Reported Adjusted As Reported Adjusted2As Reported Adjusted1As Reported Adjusted1As Reported $671.7 $671.7 $914.1 $914.1 $875.8 $875.8 $767.6 $768.8 $821.1 $851.3 Net Interest Income 156.6 (23.0)161.4 161.4 101.0 349.5 119.5 138.3 103.7 203.0 Non-Interest Income $828.2 $648.7 $1,075.5 $1,075.5 $976.8 $1,225.3 $887.1 $907.1 $924.8 $1,054.3 Total Revenue 18.9%(3.6%)15.0%15.0%10.3%28.5%13.4%15.2%11.2%19.3%Non-Interest Income % of Total Revenue 1) Adjusted to remove revenue contribution of exited Correspondent Lending Line of Business 2) Adjusted to remove non-recurring gain on sale of Insurance Premium Finance Loan Portfolio 3) Adjusted to remove non-recurring loss on sale of AFS securities Appendix // Footnotes
15 2024 YTD ($mm)2023 ($mm)2022 ($mm)2021 ($mm)2020 ($mm) Adjusted1As Reported Adjusted1As Reported Adjusted1As Reported Adjusted1As Reported Adjusted1As Reported $141.6 ($6.5)$187.1$171.9$159.5$315.2$244.5$235.2$112.6$56.5Net Income to Common $2,899.9 $2,899.9 $2,795.0$2,795.0$2,783.3$2,783.3$2,815.7$2,815.7$2,686.7$2,686.7Average Common Equity 1.5 1.5 1.51.514.514.517.417.417.917.9Less: Average Goodwill & Intangibles $2,898.4 $2,898.4 $2,793.5$2,793.5$2,768.8$2,768.8$2,798.3$2,798.3$2,668.8$2,668.8Average Tangible Common Equity 6.5%(0.3%)6.7%6.2%5.7%11.3%8.7%8.4%4.2%2.1%ROACE 6.5%(0.3%)6.7%6.2%5.8%11.4%8.7%8.4%4.2%2.1%ROATCE Non-GAAP Reconciliation // Return on Average Tangible Common Equity (ROATCE) ROATCE is a non-GAAP financial measure. ROATCE represents the measure of net income available to common shareholders as a percentage of average tangible common equity. ROATCE is used by management in assessing financial performance and use of equity. A reconcilement of ROATCE to the most directly comparable U.S. GAAP measure, ROACE, for all periods is presented below. (1) See slide Non-GAAP Reconciliation // Adjusted Earnings & Ratios
16 YTD 2024 FY 2023 FY 2022 FY 2021 FY 2020 Q3 2024 Q2 2024 ($mm, Except per Share) $671.7 $914.1 $875.8 $768.8 $851.3 $240.1 $216.6 Net Interest Income (23.0)161.4 349.5 138.3 203.0 (114.8)50.4 Non-Interest Revenue Adjustments for Non Recurring Items: --(248.5)----Gain on Sale of Insur. Prem. Finance 179.6----179.6-Loss on AFS Securities Sale 156.6 161.4 101.0 138.3 203.064.8 50.4 Non-Interest Revenue, Adjusted 586.1 756.9 727.5 599.0 704.4 195.3 188.4 Non-Interest Expense Adjustments: --(29.6)-(17.8)--Transaction Costs (7.9)-(9.8)(12.0)(54.0)(5.9)-Restructuring Expense (5.0)------Legal Settlement --(8.0)----Charitable Contribution (2.8)(19.9)---0.7 (0.5)FDIC Special Assessment 570.4 737.1 680.1 587.0 632.6 190.1 187.9 Non-Interest Expense, Adjusted 62.5 318.6 497.8 308.1 349.9 (70.0)78.6 PPNR6 257.9 338.5 296.6 320.1 421.7 114.9 79.1 PPNR6, Adjusted 49.0 72.0 66.0 (30.0)258.0 10.0 20.0 Provision for Credit Losses 7.1 57.5 99.3 84.1 25.7 (18.7)16.9 Income Tax Expenses 47.2 4.6 (45.4)2.7 15.6 44.9 0.1 Tax Impact of Adjustments Above 54.3 62.1 53.9 86.8 41.3 26.2 17.0 Income Tax Expenses, Adjusted 6.5 189.1 332.5 253.9 66.3 (61.3)41.7 Net Income 154.6 204.4 176.8 263.2 122.4 78.7 42.0 Net Income, Adjusted 12.9 17.3 17.3 18.7 9.8 4.3 4.3 Preferred Stock Dividends (6.5)171.9 315.2 235.2 56.5 (65.6)37.4 Net Income to Common 141.6 187.1 159.5 244.5 112.6 74.3 37.7 Net Income to Common, Adjusted $30,076.3 $29,537.3 $32,049.8 $38,140.3 $37,516.2 $31,215.2 $29,750.9 Average Assets 0.03% 0.64%1.04%0.67%0.18%(0.78%)0.56% Return on Average Assets 0.69% 0.69%0.55%0.69%0.33%1.00% 0.57% Return on Average Assets, Adjusted 0.28% 1.08%1.55%0.81%0.93%(0.89%)1.06% PPNR6 / Average Assets 1.15% 1.15%0.93%0.84%1.12%1.46% 1.07% PPNR6, Adjusted / Average Assets $2,899.9 $2,795.0 $2,783.3 $2,815.7 $2,686.7 $2,945.2 $2,857.7 Average Common Equity (0.30%)6.15%11.33%8.35%2.10%(8.87%)5.26% Return on Average Common Equity 6.52% 6.70%5.73%8.68%4.19%10.04% 5.31% Return on Average Common Equity, Adjusted 47,053,717 48,610,206 51,046,742 51,140,974 50,582,979 46,608,742 46,872,498 Diluted Common Shares ($0.14)$3.54 $6.18 $4.60 $1.12 ($1.41)$0.80 Earnings per Share $3.01 $3.85 $3.13 $4.78 $2.23 $1.59 $0.80 Earnings per Share, Adjusted Non-GAAP Reconciliation // Adjusted Earnings & Ratios Adjusted line items are non-GAAP financial measures that management believes aids in the discussion of results. A reconcilement of these adjusted items to the most directly comparable U.S. GAAP measures for all periods is presented below. Periods not presented below did not have adjustments.