tcbi-20220721
TEXAS CAPITAL BANCSHARES INC/TX0001077428false00010774282022-07-212022-07-210001077428us-gaap:CommonStockMember2022-07-212022-07-210001077428us-gaap:SeriesBPreferredStockMember2022-07-212022-07-21

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): July 21, 2022
TEXAS CAPITAL BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Delaware001-3465775-2679109
(State or other jurisdiction of
incorporation)		(Commission
File Number)		(I.R.S. Employer
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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareTCBINasdaq Stock Market
5.75% Non-Cumulative Perpetual Preferred Stock Series B, par value $0.01 per shareTCBIONasdaq 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.
(a)On July 21, 2022, 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 June 30, 2022. 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 8.01.    Other Events.
As previously announced, the Company will host a conference call and live webcast today at 11:00 a.m. EDT to review the Company’s financial results for the period ended June 30, 2022.
Item 9.01.    Financial Statements and Exhibits.

(d)    Exhibits
99.1    Press Release, dated July 21, 2022 announcing Texas Capital Bancshares, Inc.'s operating and financial results for its fiscal quarter ended June 30, 2022

99.2    Presentation dated July 21, 2022 discussing Texas Capital Bancshares, Inc.’s operating and financial results for its fiscal quarter ended June 30, 2022

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:July 21, 2022TEXAS CAPITAL BANCSHARES, INC.
 By: /s/ J. Matthew Scurlock
  J. Matthew Scurlock
Chief Financial Officer



Exhibit 99.1
tcbicolorlogoforrelease.jpg
INVESTOR CONTACT
Jocelyn Kukulka, 469.399.8544
[email protected]

TEXAS CAPITAL BANCSHARES, INC. ANNOUNCES SECOND QUARTER 2022 RESULTS
Second quarter 2022 net income of $34.2 million and net income available to common
stockholders of $29.8 million, or $0.59 per diluted share
Pre-Provision Net Revenue(1) grew $16.7 million (33%) linked quarter
Total loans held for investment increased $2.4 billion (11%) linked quarter

DALLAS - July 21, 2022 - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the second quarter of 2022.
Net income available to common stockholders was $29.8 million, or $0.59 per diluted share, for the second quarter of 2022, compared to $35.3 million, or $0.69 per diluted share, for the first quarter of 2022 and $67.2 million, or $1.31 per diluted share, for the second quarter of 2021.
“We continue to execute on our strategic vision laid out nearly eleven months ago and are pleased with the early progress evidenced by strong revenue growth in our second quarter results,” said Rob C. Holmes, President and CEO. “The launch of our sales and trading platform in early May, and the restructuring and significant investment in C&I, demonstrate our commitment to delivering a full-service offering worthy of banking premier clients in our markets.”

FINANCIAL RESULTS
(dollars and shares in thousands)
2nd Quarter1st Quarter2nd Quarter
202220222021
OPERATING RESULTS
Net income$34,159 $39,650 $73,481 
Net income available to common stockholders$29,847 $35,337 $67,164 
Diluted earnings per common share$0.59 $0.69 $1.31 
Diluted common shares50,802 51,324 51,094 
Return on average assets0.44 %0.47 %0.76 %
Return on average common equity4.35 %4.97 %9.74 %
BALANCE SHEET
Loans held for investment$17,517,866 $15,849,434 $15,168,565 
Loans held for investment, mortgage finance6,549,507 5,827,965 8,772,799 
Total loans held for investment24,067,373 21,677,399 23,941,364 
Loans held for sale4,266 8,085 63,747 
Total assets32,338,963 31,085,377 35,228,542 
Non-interest bearing deposits12,555,367 13,434,723 14,228,038 
Total deposits25,440,021 25,377,938 28,839,563 
Stockholders’ equity3,006,832 3,090,038 3,114,957 
(1)     Net interest income and non-interest income, less non-interest expense.


SECOND QUARTER 2022 COMPARED TO FIRST QUARTER 2022
For the second quarter of 2022, net income available to common stockholders was $29.8 million, or $0.59 per diluted share, compared to $35.3 million, or $0.69 per diluted share, for the first quarter of 2022.
We recorded a $22.0 million provision for credit losses for the second quarter of 2022, compared to a $2.0 million negative provision for credit losses for the first quarter of 2022. The $22.0 million provision for credit losses recorded in the second quarter of 2022 resulted primarily from an increase in total loans held for investment (“LHI”).
Net interest income was $205.5 million for the second quarter of 2022, compared to $183.5 million for the first quarter of 2022. The increase in net interest income was primarily driven by increases in total LHI average balances and yields, partially offset by an increase in yields on deposits and short-term borrowings. Net interest margin for the second quarter of 2022 was 2.68%, an increase of 45 basis point from the first quarter of 2022. LHI, excluding mortgage finance, yields increased 34 basis points from the first quarter of 2022 and LHI, mortgage finance yields increased 35 basis points from the first quarter of 2022. Total cost of deposits was 0.33% for the second quarter of 2022, a 13 basis point increase from the first quarter of 2022.
Non-interest income for the second quarter of 2022 increased $6.0 million, or 29%, compared to the first quarter of 2022, primarily due to increases in investment banking and trading income.
Non-interest expense for the second quarter of 2022 increased $11.2 million, or 7%, compared to the first quarter of 2022. The increase was primarily due to increases in salaries and benefits expense, resulting from an increase in headcount and marketing expense.
SECOND QUARTER 2022 COMPARED TO SECOND QUARTER 2021
Net income available to common stockholders was $29.8 million, or $0.59 per diluted share, for the second quarter of 2022, compared to $67.2 million, or $1.31 per diluted share, for the second quarter of 2021.
The second quarter of 2022 included a $22.0 million provision for credit losses, resulting primarily from growth in total LHI, compared to a $19.0 million negative provision for credit losses for the second quarter of 2021.
Net interest income increased to $205.5 million for the second quarter of 2022, compared to $189.5 million for the second quarter of 2021, primarily due to an increase in yields on average earning assets, partially offset by an increase in funding costs. Net interest margin increased 66 basis points to 2.68% for the second quarter of 2022, as compared to the second quarter of 2021, primarily due to a shift in the composition of earning assets coupled with an increase in yield on earnings assets, partially offset by an increase in funding costs. LHI, excluding mortgage finance, yields increased 26 basis points compared to the second quarter of 2021 and LHI, mortgage finance yields increased 33 basis points from the second quarter of 2021. Total cost of deposits increased 13 basis points compared to the second quarter of 2021.
Non-interest income for the second quarter of 2022 decreased $11.4 million, or 30%, compared to the second quarter of 2021. The decrease was primarily due to decreases in servicing fee income, as a result of the sale of our mortgage servicing rights portfolio in 2021, and other non-interest income, partially offset by an increase in investment banking and trading income and the elimination of net losses recorded in the prior year on the sale of loans held for sale.
Non-interest expense for the second quarter of 2022 increased $15.2 million, or 10%, compared to the second quarter of 2021. The increase was primarily due to an increase in salaries and benefits expense, resulting primarily from an increase in headcount, as well as an increase in marketing expense, partially offset by a decrease in servicing-related expenses from the sale of our mortgage servicing rights portfolio in 2021.
CREDIT QUALITY
We recorded $2.6 million in net charge-offs during the second quarter of 2022, compared to net recoveries of $512,000 and net charge-offs of $2.4 million during the first quarter of 2022 and the second quarter of 2021, respectively. Criticized loans totaled $603.5 million at June 30, 2022, compared to $476.1 million at March 31, 2022 and $891.6 million at June 30, 2021. Non-accrual LHI totaled $50.5 million at June 30, 2022, compared to $59.3 million at December 31, 2021 and $86.6 million at June 30, 2021. The ratio of non-accrual LHI to total LHI for the second quarter of 2022 was 0.21%, compared to 0.27% for the first quarter of 2022 and 0.36% for the second quarter of 2021.
REGULATORY RATIOS AND CAPITAL
All regulatory ratios continue to be in excess of “well capitalized” requirements as of June 30, 2022. Our CET 1, tier 1 capital, total capital and leverage ratios were 10.5%, 11.9%, 14.4% and 10.7%, respectively, at June 30, 2022, compared to 11.5%, 13.0%, 15.7% and 9.9%, respectively, at March 31, 2022 and 10.5%, 12.1%, 14.8% and 8.4% at June 30, 2021. At June 30, 2022, our ratio of tangible common equity to total tangible assets was 8.3%, compared to 8.9% at March 31, 2022 and 7.9% at June 30, 2021.
During the second quarter of 2022, the Company repurchased 941,879 shares of its common stock for an aggregate purchase price of $50.0 million, at a weighted average price of $53.11 per share.

2

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 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 Bank has established commercial banking, consumer banking, investment banking and wealth management capabilities.
Forward Looking Statements
This communication contains “forward-looking statements” within the meaning of and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, our 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 “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,” “could,” “should,” “projects,” “targeted,” “continue,” “become,” “intend” and similar expressions.
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. 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 factors include, but are not limited to, credit quality and risk, the COVID-19 pandemic, industry and technological changes, cyber incidents or other failures, disruptions or security breaches, interest rates, commercial and residential real estate values, economic conditions, including inflation and the threat of recession, as well as market conditions in Texas, the United States or internationally, as well as governmental and consumer responses to those economic and market conditions, fund availability, accounting estimates and risk management processes, the transition away from the London Interbank Offered Rate (LIBOR), legislative and regulatory changes, business strategy execution, key personnel, competition, mortgage markets, fraud, environmental liability and severe weather, natural disasters, acts of war or terrorism or other external events.
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.



3

TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(dollars in thousands except per share data)
2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
20222022202120212021
CONSOLIDATED STATEMENTS OF INCOME
Interest income$242,349 $208,530 $219,892 $216,589 $216,953 
Interest expense36,818 24,983 25,860 26,053 27,496 
Net interest income205,531 183,547 194,032 190,536 189,457 
Provision for credit losses22,000 (2,000)(10,000)5,000 (19,000)
Net interest income after provision for credit losses183,531 185,547 204,032 185,536 208,457 
Non-interest income26,242 20,282 31,459 24,779 37,639 
Non-interest expense164,303 153,092 146,649 152,987 149,060 
Income before income taxes45,470 52,737 88,842 57,328 97,036 
Income tax expense11,311 13,087 23,712 13,938 23,555 
Net income34,159 39,650 65,130 43,390 73,481 
Preferred stock dividends4,312 4,313 4,313 4,312 6,317 
Net income available to common stockholders$29,847 $35,337 $60,817 $39,078 $67,164 
Diluted earnings per common share$0.59 $0.69 $1.19 $0.76 $1.31 
Diluted common shares50,801,628 51,324,027 51,208,161 51,139,555 51,093,660 
CONSOLIDATED BALANCE SHEET DATA
Total assets$32,338,963 $31,085,377 $34,731,738 $36,404,320 $35,228,542 
Loans held for investment17,517,866 15,849,434 15,331,457 15,221,404 15,168,565 
Loans held for investment, mortgage finance6,549,507 5,827,965 7,475,497 8,528,313 8,772,799 
Loans held for sale4,266 8,085 8,123 9,660 63,747 
Interest-bearing cash and cash equivalents4,032,931 5,136,680 7,765,996 8,317,926 6,768,650 
Investment securities3,552,699 3,642,015 3,583,808 3,663,874 3,798,275 
Non-interest bearing deposits12,555,367 13,434,723 13,390,370 14,970,462 14,228,038 
Total deposits25,440,021 25,377,938 28,109,365 29,813,668 28,839,563 
Short-term borrowings2,651,536 1,427,033 2,202,832 2,203,470 2,014,481 
Long-term debt917,098 929,414 928,738 928,062 927,386 
Stockholders’ equity3,006,832 3,090,038 3,209,616 3,147,752 3,114,957 
End of period shares outstanding49,878,041 50,710,441 50,618,494 50,605,626 50,592,201 
Book value$54.27 $55.02 $57.48 $56.27 $55.64 
Tangible book value(1)
$53.93 $54.68 $57.14 $55.93 $55.29 
SELECTED FINANCIAL RATIOS
Net interest margin2.68 %2.23 %2.12 %2.11 %2.02 %
Return on average assets0.44 %0.47 %0.69 %0.47 %0.76 %
Return on average common equity4.35 %4.97 %8.36 %5.41 %9.74 %
Non-interest income to average earning assets0.34 %0.25 %0.34 %0.27 %0.40 %
Efficiency ratio(2)
70.9 %75.1 %65.0 %71.1 %65.6 %
Non-interest expense to average earning assets2.16 %1.86 %1.60 %1.69 %1.59 %
Tangible common equity to total tangible assets(3)
8.3 %8.9 %8.3 %7.8 %7.9 %
Common Equity Tier 110.5 %11.5 %11.1 %10.7 %10.5 %
Tier 1 capital11.9 %13.0 %12.6 %12.2 %12.1 %
Total capital14.4 %15.7 %15.3 %14.9 %14.8 %
Leverage10.7 %9.9 %9.0 %9.0 %8.4 %
(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.
    
4

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
June 30, 2022June 30, 2021% Change
Assets
Cash and due from banks$242,425 $202,549 20 %
Interest-bearing cash and cash equivalents4,032,931 6,768,650 (40)%
Available-for-sale debt securities2,535,646 3,757,228 (33)%
Held-to-maturity debt securities980,935 — 100 %
Equity securities36,118 41,047 (12)%
Investment securities3,552,699 3,798,275 (6)%
Loans held for sale4,266 63,747 (93)%
Loans held for investment, mortgage finance6,549,507 8,772,799 (25)%
Loans held for investment17,517,866 15,168,565 15 %
Less: Allowance for credit losses on loans229,013 221,511 3 %
Loans held for investment, net23,838,360 23,719,853 — %
Mortgage servicing rights, net— 1,316 (100)%
Premises and equipment, net28,722 21,969 31 %
Accrued interest receivable and other assets622,501 634,719 (2)%
Goodwill and intangibles, net17,059 17,464 (2)%
Total assets$32,338,963 $35,228,542 (8)%
Liabilities and Stockholders’ Equity
Liabilities:
Non-interest bearing deposits$12,555,367 $14,228,038 (12)%
Interest bearing deposits12,884,654 14,611,525 (12)%
Total deposits25,440,021 28,839,563 (12)%
Accrued interest payable8,928 8,116 10 %
Other liabilities314,548 324,039 (3)%
Short-term borrowings2,651,536 2,014,481 32 %
Long-term debt917,098 927,386 (1)%
Total liabilities29,332,131 32,113,585 (9)%
Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - 300,000 shares issued at June 30, 2022 and 2021
300,000 300,000 — %
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 50,820,337 and 50,592,618 at June 30, 2022 and 2021, respectively
508 506 — %
Additional paid-in capital1,015,105 992,469 2 %
Retained earnings2,013,458 1,848,379 9 %
Treasury stock - 942,296 and 417 shares at cost at June 30, 2022 and 2021, respectively
(50,031)(8)N/M
Accumulated other comprehensive loss, net of taxes(272,208)(26,389)932 %
Total stockholders’ equity3,006,832 3,114,957 (3)%
Total liabilities and stockholders’ equity$32,338,963 $35,228,542 (8)%
5

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,
2022202120222021
Interest income
Interest and fees on loans$218,290 $203,074 $405,947 $413,405 
Investment securities14,665 10,918 31,967 20,805 
Interest-bearing cash and cash equivalents9,394 2,961 12,965 5,894 
Total interest income242,349 216,953 450,879 440,104 
Interest expense
Deposits20,566 16,271 34,196 36,275 
Short-term borrowings4,859 502 5,617 3,094 
Long-term debt11,393 10,723 21,988 16,466 
Total interest expense36,818 27,496 61,801 55,835 
Net interest income205,531 189,457 389,078 384,269 
Provision for credit losses22,000 (19,000)20,000 (25,000)
Net interest income after provision for credit losses183,531 208,457 369,078 409,269 
Non-interest income
Service charges on deposit accounts6,003 4,634 12,025 9,350 
Wealth management and trust fee income4,051 3,143 7,963 5,998 
Brokered loan fees4,133 6,933 8,103 16,244 
Servicing income228 5,935 465 14,944 
Investment banking and trading income11,126 8,071 15,305 13,858 
Net gain/(loss) on sale of loans held for sale— (3,070)— 2,502 
Other701 11,993 2,663 19,096 
Total non-interest income26,242 37,639 46,524 81,992 
Non-interest expense
Salaries and benefits103,885 86,830 203,983 174,352 
Occupancy expense8,874 7,865 17,759 16,139 
Marketing8,506 1,900 13,483 3,597 
Legal and professional11,288 9,147 21,590 17,424 
Communications and technology15,649 14,352 30,349 30,321 
Federal Deposit Insurance Corporation (“FDIC”) insurance assessment3,318 5,226 7,299 11,839 
Servicing-related expenses— 12,355 — 25,344 
Other12,783 11,385 22,932 20,360 
Total non-interest expense164,303 149,060 317,395 299,376 
Income before income taxes45,470 97,036 98,207 191,885 
Income tax expense11,311 23,555 24,398 46,466 
Net income34,159 73,481 73,809 145,419 
Preferred stock dividends4,312 6,317 8,625 10,096 
Net income available to common stockholders$29,847 $67,164 $65,184 $135,323 
Basic earnings per common share$0.59 $1.33 $1.29 $2.68 
Diluted earnings per common share$0.59 $1.31 $1.28 $2.65 
6

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF CREDIT LOSS EXPERIENCE
(dollars in thousands)
2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
20222022202120212021
Allowance for credit losses on loans:
Beginning balance$211,151 $211,866 $221,957 $221,511 $242,484 
Loans charged-off:
Commercial2,868 110 3,776 4,348 1,412 
Energy— — — — 686 
Real estate— 350 — — 1,192 
Total charge-offs2,868 460 3,776 4,348 3,290 
Recoveries:
Commercial219 217 1,933 1,104 308 
Energy— 755 601 42 609 
Real estate— — 205 112 — 
Total recoveries219 972 2,739 1,258 917 
Net charge-offs2,649 (512)1,037 3,090 2,373 
Provision for credit losses on loans20,511 (1,227)(9,054)3,536 (18,600)
Ending balance$229,013 $211,151 $211,866 $221,957 $221,511 
Allowance for off-balance sheet credit losses:
Beginning balance$16,492 $17,265 $18,211 $16,747 $17,147 
Provision for off-balance sheet credit losses1,489 (773)(946)1,464 (400)
Ending balance$17,981 $16,492 $17,265 $18,211 $16,747 
Total allowance for credit losses$246,994 $227,643 $229,131 $240,168 $238,258 
Total provision for credit losses$22,000 $(2,000)$(10,000)$5,000 $(19,000)
Allowance for credit losses on loans to total loans held for investment0.95 %0.97 %0.93 %0.93 %0.93 %
Allowance for credit losses on loans to average total loans held for investment1.02 %0.99 %0.91 %0.95 %0.98 %
Net charge-offs to average total loans held for investment(1)
0.05 %(0.01)%0.02 %0.05 %0.04 %
Net charge-offs to average total loans held for investment for last 12 months(1)
0.03 %0.03 %0.06 %0.33 %0.31 %
Total provision for credit losses to average total loans held for investment(1)
0.39 %(0.04)%(0.17)%0.09 %(0.34)%
Total allowance for credit losses to total loans held for investment
1.03 %1.05 %1.00 %1.01 %1.00 %
(1)Interim period ratios are annualized.
7

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS
(dollars in thousands)
2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
20222022202120212021
Non-accrual loans held for investment$50,526 $59,327 $72,502 $87,532 $86,636 
Non-accrual loans held for sale— — — — — 
Other real estate owned— — — — — 
Total non-performing assets$50,526 $59,327 $72,502 $87,532 $86,636 
Non-accrual loans held for investment to total loans held for investment0.21 %0.27 %0.32 %0.37 %0.36 %
Total non-performing assets to earning assets0.16 %0.20 %0.21 %0.25 %0.25 %
Allowance for credit losses on loans to non-accrual loans held for investment4.5x3.6x2.9x2.5x2.6x
Loans held for investment past due 90 days and still accruing(1)
$3,206 $6,031 $3,467 $3,405 $7,671 
Loans held for investment past due 90 days to total loans held for investment0.01 %0.03 %0.02 %0.01 %0.03 %
Loans held for sale past due 90 days and still accruing(2)
$1,602 $3,865 $3,986 $3,808 $2,695 
(1)At June 30, 2022, loans past due 90 days and still accruing include premium finance loans of $3.1 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 loans held for sale 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.
8

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands)
2nd Quarter1st Quarter4th Quarter3rd Quarter2nd Quarter
20222022202120212021
Interest income
Interest and fees on loans$218,290 $187,657 $204,379 $202,748 $203,074 
Investment securities14,665 17,302 11,780 10,235 10,918 
Interest-bearing deposits in other banks9,394 3,571 $3,733 $3,606 2,961 
Total interest income242,349 208,530 219,892 216,589 216,953 
Interest expense
Deposits20,566 13,630 14,513 14,719 16,271 
Short-term borrowings4,859 758 771 748 502 
Long-term debt11,393 10,595 10,576 10,586 10,723 
Total interest expense36,818 24,983 25,860 26,053 27,496 
Net interest income205,531 183,547 194,032 190,536 189,457 
Provision for credit losses22,000 (2,000)(10,000)5,000 (19,000)
Net interest income after provision for credit losses183,531 185,547 204,032 185,536 208,457 
Non-interest income
Service charges on deposit accounts6,003 6,022 4,702 4,622 4,634 
Wealth management and trust fee income4,051 3,912 3,793 3,382 3,143 
Brokered loan fees4,133 3,970 5,678 6,032 6,933 
Servicing income228 237 277 292 5,935 
Investment banking and trading income11,126 4,179 6,456 4,127 8,071 
Net gain/(loss) on sale of loans held for sale— — — (1,185)(3,070)
Other701 1,962 10,553 7,509 11,993 
Total non-interest income26,242 20,282 31,459 24,779 37,639 
Non-interest expense
Salaries and benefits103,885 100,098 89,075 87,503 86,830 
Occupancy expense8,874 8,885 8,769 8,324 7,865 
Marketing8,506 4,977 4,286 2,123 1,900 
Legal and professional11,288 10,302 12,673 11,055 9,147 
Communications and technology15,649 14,700 16,490 28,374 14,352 
FDIC insurance assessment3,318 3,981 4,688 4,500 5,226 
Servicing-related expenses— — 25 2,396 12,355 
Other 12,783 10,149 10,643 8,712 11,385 
Total non-interest expense164,303 153,092 146,649 152,987 149,060 
Income before income taxes45,470 52,737 88,842 57,328 97,036 
Income tax expense11,311 13,087 23,712 13,938 23,555 
Net income34,159 39,650 65,130 43,390 73,481 
Preferred stock dividends4,312 4,313 4,313 4,312 6,317 
Net income available to common shareholders$29,847 $35,337 $60,817 $39,078 $67,164 

9

TEXAS CAPITAL BANCSHARES, INC.
TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1)
(dollars in thousands)
2nd Quarter 20221st Quarter 20224th Quarter 20213rd Quarter 20212nd Quarter 2021
Average
Balance		Income/
Expense		Yield/
Rate		Average
Balance		Income/
Expense		Yield/
Rate		Average
Balance		Income/
Expense		Yield/
Rate		Average
Balance		Income/
Expense		Yield/
Rate		Average
Balance		Income/
Expense		Yield/
Rate
Assets
Investment securities(2)
$3,543,576 $15,065 1.60 %$3,669.257 $17,743 1.91 %$3,608,503 $12,225 1.34 %$3,775,812 $10,684 1.12 %$3,543,270 $11,369 1.29 %
Interest-bearing cash and cash equivalents4,747,377 9,394 0.79 %8,552,300 3,571 0.17 %9,760,735 3,733 0.15 %9,046,095 3,606 0.16 %11,583,759 2,961 0.10 %
Loans held for sale8,123 62 3.07 %7,633 113 6.01 %8,348 51 2.41 %18,791 54 1.14 %93,164 781 3.36 %
Loans held for investment, mortgage finance5,858,599 49,914 3.42 %5,732,901 43,466 3.07 %7,901,534 57,949 2.91 %7,987,521 58,913 2.93 %7,462,223 57,401 3.09 %
Loans held for investment(3)
16,616,234 168,407 4.07 %15,686.319 144,134 3.73 %15,348,322 146,436 3.79 %15,266,167 143,864 3.74 %15,242,975 144,978 3.81 %
Less: Allowance for credit losses on loans
211,385 — — 212,612 — — 223,034 — — 220,984 — — 241,676 — — 
Loans held for investment, net22,263,448 218,321 3.93 %21,206,608 187,600 3.59 %23,026,822 204,385 3.52 %23,032,704 202,777 3.49 %22,463,522 202,379 3.61 %
Total earning assets30,562,524 242,842 3.16 %33,435,798 209,027 2.54 %36,404,408 220,394 2.40 %35,873,402 217,121 2.40 %37,683,715 217,490 2.31 %
Cash and other assets870,396 819,486 835,293 855,555 996,946 
Total assets$31,432,920 $34,255,284 $37,239,701 $36,728,957 $38,680,661 
Liabilities and Stockholders’ Equity
Transaction deposits$1,671,729 $3,920 0.94 %$2,432,687 $3,962 0.66 %$3,007,337 $4,664 0.62 %$3,012,547 $4,737 0.62 %$3,795,152 $5,395 0.57 %
Savings deposits8,696,819 15,462 0.71 %10,420,545 8,583 0.33 %10,529,645 8,419 0.32 %10,044,995 8,262 0.33 %11,296,382 8,990 0.32 %
Time deposits877,399 1,184 0.54 %1,038,722 1,085 0.42 %1,276,800 1,430 0.44 %1,640,562 1,720 0.42 %1,755,993 1,886 0.43 %
Total interest bearing deposits11,245,947 20,566 0.73 %13,891,954 13,630 0.40 %14,813,782 14,513 0.39 %14,698,104 14,719 0.40 %16,847,527 16,271 0.39 %
Short-term borrowings2,232,119 4,859 0.87 %1,770,781 758 0.17 %2,267,013 771 0.13 %2,299,692 748 0.13 %2,349,718 502 0.09 %
Long-term debt929,616 11,393 4.92 %929,005 10,595 4.63 %928,307 10,576 4.52 %927,626 10,586 4.53 %881,309 10,723 4.88 %
Total interest bearing liabilities14,407,682 36,818 1.02 %16,591,740 24,983 0.61 %18,009,102 25,860 0.57 %17,925,422 26,053 0.58 %20,078,554 27,496 0.55 %
Non-interest bearing deposits13,747,876 14,235,749 15,804,061 15,363,568 15,139,546 
Other liabilities227,701 243,141 238,833 275,317 274,401 
Stockholders’ equity3,049,661 3,184,654 3,187,705 3,164,650 3,188,160 
Total liabilities and stockholders’ equity$31,432,920 $34,255,284 $37,239,701 $36,728,957 $38,680,661 
Net interest income
$206,024 $184,044 $194,534 $191,068 $189,994 
Net interest margin2.68 %2.23 %2.12 %2.11 %2.02 %
(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.
10
© 2022 Texas Capital Bank Member FDIC July 21, 2022 Q2-2022 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, our 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 “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,” “could,” “should,” “projects,” “targeted,” “continue,” “become,” “intend” and similar expressions. 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. 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 factors include, but are not limited to, credit quality and risk, the COVID-19 pandemic, industry and technological changes, cyber incidents or other failures, disruptions or security breaches, interest rates, commercial and residential real estate values, economic conditions, including inflation and the threat of recession, as well as market conditions in Texas, the United States or internationally, as well as governmental and consumer responses to those economic and market conditions, fund availability, accounting estimates and risk management processes, the transition away from the London Interbank Offered Rate (LIBOR), legislative and regulatory changes, business strategy execution, key personnel, competition, mortgage markets, fraud, environmental liability and severe weather, natural disasters, acts of war or terrorism or other external events. 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.

 
3 Serving strong core Texas markets with expanded coverage and a complete set of capabilities Improving client relevance and diversifying our revenue base Attracting high-quality talent with significant experience Our Distinct Opportunity Operating from a de-risked position of financial strength

 
4 Performance Metrics Return on Average Assets 0.18% 0.67% 0.45% >1.10% Return on Average Tangible Common Equity5 2.1% 8.4% 4.7% >12.5% CET1 9.4% 11.1% 10.5% 9%–10% Where We Started Where We Are Going Balance Sheet 2020 2021 YTD 2022 2025 FY Average Liquidity Assets4 (% of Total Average Assets) 28% 37% 29% >20% FY Average Indexed Deposits (% of Total Deposits) 36% 27% 22% <15% Where We Started Where We Are Going Income Statement 2020 2021 YTD 2022 2025 Investment Banking and Trading Income (% of Total Revenue)1 2.5% 2.8% 3.5% ~10% Treasury Product Fees2 (% of Total Revenue)1 1.6% 2.6% 3.4% ~5% Non-interest Income3 (% of Total Revenue)1 11.2% 13.4% 10.7% 15%–20% Strategic Performance Drivers Announced September 1st Talent Frontline Talent Growth 1.0x 1.4x 1.6x 2.3x

 
5 Our Path Forward Operating Model Aligned to our Vision, Grounded in our Values Clear Strategic Direction and Fortitude to Deliver Organized Around Client Delivery  Product & Industry Specialization  Frontline Growth  Technology New Products and Services  Treasury Solutions  Private Wealth  Investment Banking Expanding Coverage  Business Banking  Middle Market Banking  Corporate Banking Evaluating Opportunities for Growth  Disciplined Capital Management  Structured Criteria Guiding Programmatic Investment  Optimizing Capital Allocation Across the Portfolio Committed to Financial Resilience Resulting business model poised to generate structurally higher, more sustainable earnings through enhanced fee income and decreased thru-cycle asset sensitivity Our ability to serve our clients, access markets, and support our community through cycles is a strategic multiplier Risk Management  Granular Risk Rating System  Values Driven Culture  Improved Portfolio Positioning Capital and Liquidity  2Q22 CET1: 10.5%  2Q22 Avg. Liquidity Assets4: 23% of Avg. Assets  YoY TBV6 per Share Growth: -2.5%

 
6 Expanding Coverage and Enhanced Product and Services Financial Performance Q2’ 21 Q3’ 21 Q4’ 21 Q1’ 22 Q2’ 22 YoY Assets Under Management ($B) $2.2 $2.5 $2.7 $2.7 $2.6 19% Treasury Product Fees2 ($M) $5.7 $5.8 $6.0 $7.4 $7.6 33% Wealth Management & Trust Fee Income ($M) $3.1 $3.4 $3.8 $3.9 $4.1 29% Investment Banking and Trading Income ($M) $8.1 $4.1 $6.5 $4.2 $11.1 38% Income From Areas of Focus ($M) $16.9 $13.4 $16.3 $15.5 $22.8 35% Financial Performance (Period End) Q2’ 21 Q3’ 21 Q4’ 21 Q1’ 22 Q2’ 22 YoY Business, Middle Market, and Corporate Banking Talent 1.2x 1.4x 1.7x 2.1x 2.3x Business, Middle Market, and Corporate Banking Deposits ($B) $7.0 $7.0 $7.7 $7.1 $7.3 5% C&I Loans7 ($B) $9.3 $9.9 $10.5 $11.0 $12.5 34% Real Estate Loans ($B) $5.6 $5.2 $4.8 $4.9 $5.1 (8%) Treasury Solutions Private Wealth Investment Banking Business Banking Middle Market Banking Corporate Banking  Strong growth trends in core operating deposits; Treasury Product Fees up 33%, YoY  Gross PxV trending upwards driven by increased balances and new products gaining traction with clients  AUM increased 19% YoY; continue to experience $35 to $50M in net organic flows monthly  Focused investment across the platform in products, client experience, and talent  Platform expanding on schedule; Mortgage Sales & Trading activities began in early May  Strong Q2 performance in Capital Solutions and Syndicated Finance  Defined risk appetite, efficient underwriting, and focused client selection process  Leadership in place across each market; 80% of targeted front-line positions filled  Majority of growth coming from new client acquisition; loans are up 10% QoQ  Partnership with the Texas Capital Securities resulting in additional mandates across capabilities  Industry vertical segmentation established and beginning to produce pipelines consistent with strategy  Non-credit fee income is ramping; gross PxV is up 37% YoY

 
7 Focused on the Future Current Financial Priorities 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

 
8 Financial Performance Financial Highlights ($M) Q2 2021 Q1 2022 Q2 2022 Net Interest Income $189.5 $183.5 $205.5 Non-Interest Revenue 37.6 20.3 26.2 Total Revenue 227.1 203.8 231.8 Non-Interest Expense 149.1 153.1 164.3 PPNR8 78.0 50.7 67.5 Provision for Credit Losses (19.0) (2.0) 22.0 Income Tax Expense 23.6 13.1 11.3 Net Income 73.5 39.7 34.2 Preferred Stock Dividends 6.3 4.3 4.3 Net Income to Common 67.2 35.3 29.8 Key Performance Metrics Return on Average Assets 0.76% 0.47% 0.44% PPNR8 / Average Assets 0.81% 0.60% 0.86% Efficiency Ratio9 65.6% 75.1% 70.9% Return on Average Common Equity 9.74% 4.97% 4.35% Earnings per Share $1.31 $0.69 $0.59 Tangible Book Value per Share $55.29 $54.68 $53.93  Continued execution on defined growth initiatives coupled with rising market rates drove an increase in total revenue of 14% QoQ  Strategic focus on expanding products and services producing growth in several fee categories  Wealth management fees and investment banking fees are higher both QoQ and YoY (29% and 38% YoY, respectively)  Service charges on deposits flat QoQ but up 30% YoY as growth in operating accounts comes from both new and existing clients  Non-interest expense continues to grow as anticipated, with a larger-portion increasingly allocated to higher-value activities directly supporting our defined strategy including compensation and technology supporting both infrastructure and new product development  Total NIE up $15.2 million, or 10% YoY, with salaries and benefits up $17.1 million, or 20%, as front-line C&I banking talent up 2.3x  Marketing expense increased $3.5 million attributable to business development and digitally-focused deposit initiatives  Provision expense of $22.0 million was predominantly related to QoQ LHI growth of $2.4 billion  Exclusive of one $144.6 million downgraded Mortgage Finance relationship, criticized loan balances and non-performing assets remain stable near cyclical lows  Overall, criticized loans increased $127.5 million QoQ to 2.51% of LHI; excluding the $144.6 million downgraded credit, criticized loans decreased $17.1 million QoQ to 1.91% of LHI  Non-performing assets declined $8.8 million QoQ to 0.21% of LHI as legacy problem credits slowly work through the system  Book value impacted both by a QoQ decline in AOCI of $66.8 million due primarily to the accelerated rise in the mid-range of the treasury yield curve and share repurchases totaling $50.0 million during the quarter

 
9 Q2 2022 EOP $10.0B $8.4B $7.6B $8.0B $7.9B $5.7B $5.9B $6.6B Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 MFLs $5.6B $5.2B $4.8B $4.9B $5.1B Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 $9.3B $9.9B $10.5B $11.0B $12.5B Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Loan Portfolio 11 Average Mortgage Finance Loans11 Period End Loan Trends (excl. PPP) Utilization Rates10  C&I7 Loans grew 14% QoQ reflecting continued realization of client-focused coverage buildout; pipelines remain strong, however, quarterly growth should moderate over the remainder of the year  Real Estate Loans grew modestly at 4% QoQ and were tempered by increasing paydowns QoQ which are expected to be elevated for the remainder of the year  In the contracting market, average MFLs11 rose 2% QoQ through market share gains and modestly higher dwell times C&I Loans7 Real Estate Loans 50% LTM Average 52% 47% 49% 51% 53% 55% 57% 59% 61%

 
10 Q2 2022 EOP $17.9B $17.5B $15.7B $13.6B $13.9B $13.2B $10.7B $11.7B $1.8B $1.6B $1.2B $1.1B $0.9B $0.7B $0.6B $1.2B $13.2B $14.4B $15.1B $15.4B $15.8B $14.2B $13.7B $12.5B Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Interest-bearing Core Interest-bearing Brokered Non-interest Bearing Q2 2022 EOP $15.1B $14.2B $13.7B $12.5B $7.8B $6.9B $6.6B $8.4B $9.1B $7.0B $4.7B $4.5B Q2 2021 Q1 2022 Q2 2022 0.20% 0.19% 0.19% 0.20% 0.33% 0.29% 0.28% 0.28% 0.30% 0.47% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Avg Cost of Deposits Total Cost of Funds Deposits and Fundings Funding CostsDeposit Composition (Average) Non-interest Bearing Indexed  Funding base continuing multi-year transition to target state composition  NIB balances began gradual repositioning into interest-bearing accounts  Mortgage Finance deposits remain depressed with lower refinance rates  High-beta indexed deposits were further reduced during the quarter by $1.5B  Average Cost of deposits increased 13 bps QoQ; a beta of 18% since the 1st rate increase  57% cumulative beta in the last tightening cycle (Sep-15 to Jun-19) Interest Bearing Average Deposit Trends 29% 24% 47% 18% 33% 49% $32.0B $28.1B $25.0B $25.4B $32.9B $33.5B $32.0B $30.1B $30.6B $28.1B $25.0B $25.4B 0.0% 0.5% 1.0% 1.5% 2.0% Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Current Cycle Rates Paid Betas12 IB Rate IB excl. Indexed Rate Fed Funds Upper Target 42% Cumulative Beta 25% Cumulative Beta Q1 2022 Q2 20 Total Deposit Rate 18% Cumulative Beta 25% 24% 51% 19% 26% 55%

 
11 3.3% 9.5% 9.9%10.9% 20.0% 17.7% Q2 2021 Q1 2022 Q2 2022 +100bps Shock +200bps Shock Net Interest Income Sensitivity Standard Model Assumptions 100bp & 200bp Parallel Shocks  Loan Balances: Static  Deposit Balances: Static  Indexed Deposits: Ratio held constant at 18%  Loan Spreads: Current Levels  Total Deposit Beta: ~50%  Investment Portfolio: Ratio held constant Loan Repricing Detail // Gross LHI Excl. MFLs11 TCBI NII Sensitivity  The asset sensitivity profile of the bank has increased QoQ as a majority of loans rose off their floors during the quarter  $750 million in fixed rate swaps added during the quarter reduced asset sensitivity by approximately 1%  LHI excl. MFLs11: 18% fixed / 82% variable  $5.0 billion (28%) of LHI excl. MFLs11 have contractual floors  Approximately $600 million of these loans remain at their floors ($17.6B) Q2 2022 Fixed 18% Prime 18% 1 Month 52% 3 Month 3% 6 Month 1% 12+ Month 8% Variable 82% Total 100%  MFLs11 represent 27% of the total loan portfolio with the majority tied to 1 month LIBOR which rose 133 bps in Q2 2022  Overall Mortgage Finance NII will not be as sensitive to changes in index rates as the rest of the portfolio  Bank’s overall NII sensitivity (9.9%, $91M and 17.7%, $163M for Q2 2022) inclusive of Mortgage Finance NII impact $24M $79M $71M $149M $91M $163M Base NII13 $729M $745M $920M

 
12 2.19% 2.22% 2.04% 2.02% 2.11% 2.12% 2.23% 2.68% Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 $8.1M $11.1M $3.1M $4.1M$4.6M $6.0M $37.6M $20.3M $26.2M Q2 2021 Q1 2022 Q2 2022 Non-Interest Income Walk ($M)Fee Income DetailNon-Interest Income Q2-2022 Earnings Overview % of Total Revenue 17% 10% 11% Deposit Service Charges Investment Banking and Trading Wealth Management Q2 2021 Q2 2022 Q 1 20 22 D ep os it Se rv ic e C ha rg es W ea lth M an ag em en t Q 2 20 22 Br ok er ed L oa n Fe es In ve st m en t B an ki ng & Tr ad in g O th er In co m e +30% +29% +38% Net Interest Income $3.3M Correspondent Lending14 $34.3M Net Interest Margin $20.3 $26.2 -$0.0 $0.1 $0.2 $6.9 -$1.3 $183.5M $9.7M $20.8M $0.1M $3.2M -$6.9M -$4.9M $205.5M Q1 2022 Loan Volume Loan Yield Loan Fees Investment Securities & Cash Deposits Borrowings Q2 2022

 
13 10.53% 11.46% 10.46% 10.00% 1.52% 1.57% 1.45% 2.72% 2.65% 2.51% 37% 54% 38% 24% 11% 6% 4% 52% 40% 34% Q2 2021 Q1 2022 Q2 2022 Commercial Mortgage Energy Real Estate $83.7M $100.1M $103.9M $48.1M $53.0M $60.4M$17.3M Q2 2021 Q1 2022 Q2 2022 Criticized Composition | YoYCredit Quality Q2-2022 Earnings Overview 32%$892M $604M  Expense base continues to be repositioned into front, middle, and back-office structure consistent with future scale  Capital remains above historical averages with Total Capital Ratio and TCE6/total assets in excess of peer15 medians  Repurchased 942K shares (2% of common stock) at a weighted average price of $53.11  Organization realignment and new enterprise disciplines supporting a values-driven credit culture, driving criticized loans down 32% YoY despite the $144.6 million mortgage finance downgrade CET1 Tier 1 Capital Tier 2 Capital $149.1M $153.1M $164.3M Salaries & Benefits Other NIE Correspondent Lending NIE14 Non-interest Expense $476M Regulatory Capital Levels 63%56% 37% 32% 12% 65% 35% Q2 2021 Q1 2022 Q2 2022 Medium-term CET1 Target 14.77% 14.42% Q2 2021 Q2 2022 1.43% 2.6x 1.27% 3.6x 1.20% 4.5x ACL on Loans / Loans HFI excl MFLs ACL on Loans / NPAs 0.25% 0.25% 0.21% 0.20% 0.16% 2.60% 2.05% 1.72% 1.57% 1.92% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 NPAs / Earning Assets Criticized / Earning Assets Asset Quality Ratios Q1 2022 15.68%

 
14 Full Year Guidance Full Year 2022 Guidance Average MFLs11 Decline Low 30s Decline Revenue Growth Mid to High Single Digit Non-interest Expense Growth Low to Mid Double Digit Achieve Quarterly Operating Leverage (YoY Growth in Quarterly PPNR8) Q4 2022  Forward curve assuming 2022 terminal rate of 3.75% Fed Funds  The expected realization of financial targets ahead of prior guidance is due to:  The balance sheet transformation weighted toward C&I clients  The rising rate environment benefiting net interest margin  Offset by the industry-wide adverse results the tightening actions had on the mortgage industry  We will continue to reposition and accelerate the required investments in support of our Strategic Plan

 
15 1. Total Revenue in 2020 and 2021 excludes Correspondent Lending; See slide: Appendix // Correspondent Lending Historical Contribution 2. Includes service charges on deposit accounts, as well as fees related to our commercial card program, merchant transactions, wire fees, and FX transactions, all of which are included in other non-interest income and totaled $3.1M for FY 2020, $4.4M for 2021, $2.9M for Q2-YTD 2022 and $1.1M, $1.2M, $1.3M, $1.3M, and $1.6M for Q2 2021, Q3 2021, Q4 2021, Q1 2022, and Q2 2022 respectively 3. Non-interest Income for 2020 and 2021 excludes Correspondent Lending; See slide: Appendix // Correspondent Lending Historical Contribution 4. Includes interest-bearing cash and cash equivalents, available-for-sale debt securities, and equity securities 5. See slide: Appendix // Return on Average Tangible Common Equity (ROTCE) 6. Stockholders’ equity excluding preferred stock, less goodwill and intangibles 7. C&I Loans includes Commercial and Energy loans and excludes PPP loans 8. Net interest income and non-interest income, less non-interest expense 9. Non-interest expense divided by the sum of net interest income and non-interest income 10. Outstanding loans divided by total commitments excluding Mortgage Finance Loans and leases 11. Total Mortgage Finance Loans (MFLs) include Mortgage Warehouse loans and Correspondent Lending LHS 12. Beta taken as the difference of June 2022 and January 2022 cost of total deposits, cost of interest-bearing deposits, and cost of indexed deposits divided by the change in fed funds upper target over the same period 13. Baseline scenarios hold constant balances, market rates, and assumptions as of period end reporting 14. See slide: Appendix // Correspondent Lending Historical Contribution 15. Compared to peer banks with $20-100B in assets for Q1 2022 results Source: S&P Capital IQ Pro Appendix // Footnotes

 
16 Appendix // Correspondent Lending Historical Contribution Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 LHS (Average) LHS (Period-end) $70.6M $75.5M $95.3M $105.4M $121.1M $1.3M $1.2M $0.0M Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 MSR (Period-end) Risk Weighted ~50% Risk Weighted 250% ($M) Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 Net Interest Income 24.5 1.5 2.8 1.4 30.2 0.9 0.3 0.0 0.0 1.2 Non-interest Income Brokered Loan Fees 2.6 2.8 5.8 3.9 15.1 2.2 0.7 0.0 0.0 2.9 Servicing Income 4.6 5.9 7.1 8.6 26.2 8.8 5.7 0.0 0.0 14.5 Gain/(Loss) on Sale of LHS (13.0) 39.0 25.2 6.8 58.0 5.6 (3.1) (1.2) 0.0 1.3 Non-Interest Expense Salaries & Benefits 3.6 3.5 4.5 3.4 15.0 3.0 3.1 0.4 0.3 6.8 Marketing 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Legal & Professional 0.8 0.6 0.8 0.9 3.1 1.0 0.8 0.3 0.2 2.3 Communications & Tech 0.7 1.4 1.0 1.0 4.1 0.4 0.3 1.3 0.5 2.5 Servicing-Related Expenses 16.4 20.1 12.3 15.9 64.7 13.0 12.4 2.4 0.0 27.8 Other Expense 0.5 0.5 0.4 0.7 2.1 0.7 0.6 0.6 0.2 2.1

 
17 Appendix // Return on Average Tangible Common Equity (ROTCE) ROTCE is a non-GAAP financial measure. ROTCE represents the measure of net income available to common shareholders as a percentage of average tangible common equity. ROTCE is used by management in assessing financial performance and use of equity. A reconcilement of ROTCE to the most directly comparable U.S. GAAP measure, ROCE, for all periods presented below. (1) Ratios are annualized 2020 ($000s) YTD 20221 ($000s) Net Income Available to Common Stockholders Average Common Equity Less: Average Goodwill and Intangibles Average Tangible Common Equity ROCE ROTCE $56,539 $2,686,747 17,857 $2,668,890 2.1% 2.1% $65,184 $2,816,785 17,143 $2,799,642 4.7% 4.7% 2021 ($000s) $235,218 $2,815,656 17,447 $2,798,209 8.4% 8.4%