[Part I: Financial Information](index=3&type=section&id=Part%20I.%E2%80%94Financial%20Information) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements%20-%20Unaudited) The company's financial position weakened due to decreased assets and deposits, with a key event being the sale of its BDCF subsidiary - On September 6, 2022, the company announced the sale of its insurance premium finance subsidiary, BankDirect Capital Finance (BDCF), for approximately **$3.4 billion** in an all-cash transaction[16](index=16&type=chunk) - The sale includes a loan portfolio of about **$3.1 billion**, which has been reclassified as held for sale[16](index=16&type=chunk) [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets declined significantly, driven by reductions in both loans held for investment and total deposits Consolidated Balance Sheet Highlights (Unaudited) | (in thousands) | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Total assets | $30,408,513 | $34,731,738 | | Loans held for investment, net | $19,553,168 | $22,595,088 | | Loans held for sale | $3,142,178 | $8,123 | | **Liabilities & Equity** | | | | Total deposits | $24,498,563 | $28,109,365 | | Total liabilities | $27,522,738 | $31,522,122 | | Total stockholders' equity | $2,885,775 | $3,209,616 | - Total assets decreased by approximately **$4.3 billion** from year-end 2021, largely driven by a **$3.6 billion** decrease in total deposits and a **$3.0 billion** net decrease in loans held for investment[7](index=7&type=chunk) [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Other%20Comprehensive%20Income%2F(Loss)) Net interest income grew, but higher credit loss provisions and non-interest expenses led to a decline in net income Consolidated Income Statement Highlights (Unaudited) | (in thousands except per share data) | Three months ended Sep 30, 2022 | Three months ended Sep 30, 2021 | Nine months ended Sep 30, 2022 | Nine months ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $239,080 | $190,536 | $628,158 | $574,805 | | Provision for credit losses | $12,000 | $5,000 | $32,000 | $(20,000) | | Total non-interest income | $25,333 | $24,779 | $71,857 | $106,771 | | Total non-interest expense | $197,047 | $152,987 | $514,442 | $452,363 | | Net income | $41,418 | $43,390 | $115,227 | $188,809 | | Diluted earnings per common share | $0.74 | $0.76 | $2.00 | $3.41 | - Net interest income **increased by 25.5% YoY for Q3 2022**, driven by a rising interest rate environment[9](index=9&type=chunk) - This was offset by a **$7 million increase** in the provision for credit losses and a **$44.1 million increase** in non-interest expense, leading to a slight decline in net income[9](index=9&type=chunk) - For the nine months ended September 30, 2022, **net income decreased by 39% YoY**, primarily due to a **$52 million** swing in the provision for credit losses and a **$34.9 million** decrease in non-interest income[9](index=9&type=chunk) [Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased due to significant unrealized losses on securities and common stock repurchases - Total stockholders' equity decreased from **$3.21 billion** at December 31, 2021, to **$2.89 billion** at September 30, 2022[7](index=7&type=chunk)[12](index=12&type=chunk) - The decrease was primarily driven by a significant increase in Accumulated Other Comprehensive Loss from **$(47.7) million to $(435.4) million** and the repurchase of **$50.0 million** of common stock[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) A significant net decrease in cash resulted from major outflows in financing activities, mainly deposit reductions Net Cash Flow Summary (Unaudited) | (in thousands) | Nine months ended Sep 30, 2022 | Nine months ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $214,100 | $546,313 | | Net cash provided by/(used in) investing activities | $(341,189) | $223,015 | | Net cash used in financing activities | $(4,179,323) | $(1,440,657) | | **Net decrease in cash and cash equivalents** | **$(4,306,412)** | **$(671,329)** | - A significant use of cash in financing activities was driven by a **$3.6 billion net decrease in deposits** and **$50.0 million** of common stock repurchases[13](index=13&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes cover securities transfers, improved credit quality with fewer criticized loans, and strong capital adequacy - In Q1 2022, the company transferred **$1.0 billion** of available-for-sale debt securities to held-to-maturity in response to rising interest rates[25](index=25&type=chunk) - Criticized loans totaled **$484.0 million** at September 30, 2022, a decrease from **$582.9 million** at December 31, 2021[39](index=39&type=chunk) - The company and its bank subsidiary meet all capital adequacy requirements and are considered **well capitalized** as of September 30, 2022[52](index=52&type=chunk)[53](index=53&type=chunk) [Item 2. Management's Discussion and Analysis (MD&A)](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Rising interest rates expanded the net interest margin, but higher credit provisions and expenses reduced overall profitability [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Higher net interest income was offset by increased credit loss provisions and non-interest expenses, impacting net income Key Performance Indicators | | Three months ended Sep 30, 2022 | Three months ended Sep 30, 2021 | Nine months ended Sep 30, 2022 | Nine months ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net interest margin | 3.05% | 2.11% | 2.64% | 2.06% | | Return on average assets (ROA) | 0.52% | 0.47% | 0.47% | 0.66% | | Return on average common equity (ROE) | 5.36% | 5.41% | 4.90% | 8.35% | | Efficiency ratio | 74.5% | 71.1% | 73.5% | 66.4% | - Q3 2022 net income decreased slightly YoY, as a **$48.6 million increase** in net interest income was offset by higher provision for credit losses and non-interest expense[89](index=89&type=chunk) - Non-interest expense for Q3 2022 **increased by $44.1 million YoY**, including costs related to the sale of the insurance premium finance subsidiary[111](index=111&type=chunk) [Analysis of Financial Condition](index=31&type=section&id=Analysis%20of%20Financial%20Condition) The loan portfolio decreased due to a major divestiture, while credit quality improved and funding remained deposit-focused - Total loans held for investment **decreased by $3.0 billion** from year-end 2021, primarily due to a **$3.1 billion** reclassification of the insurance premium finance loan portfolio to 'loans held for sale'[113](index=113&type=chunk) Non-Performing Assets (NPAs) | (in thousands) | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total non-accrual loans held for investment | $35,864 | $72,502 | | Total non-performing assets | $37,204 | $72,502 | | NPAs to total assets | 0.12% | 0.21% | - The company's primary source of funding is customer deposits, which comprised **94.7% of total deposits** at September 30, 2022[125](index=125&type=chunk)[127](index=127&type=chunk) - During the nine months ended September 30, 2022, the company repurchased **941,879 shares** of its common stock for an aggregate price of **$50.0 million**[138](index=138&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is significantly asset-sensitive to interest rate changes and is actively managing the transition from LIBOR Interest Rate Sensitivity Impact on Net Interest Income (Next 12 Months) | (in thousands) | September 30, 2022 | | :--- | :--- | | 200 bps Increase | $134,859 | | 100 bps Increase | $76,688 | | 100 bps Decrease | $(103,564) | - The company has significant exposure to LIBOR-dependent financial instruments and **ceased originating new LIBOR-based products** in December 2021[159](index=159&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective with no material changes - Management concluded that **disclosure controls and procedures were effective** as of the end of the period covered by the report[161](index=161&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter[162](index=162&type=chunk) [Part II: Other Information](index=40&type=section&id=Part%20II.%E2%80%94Other%20Information) [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal matters are not expected to have a material adverse effect on the company's financial condition - The company states that it does not expect the disposition of any current legal matters to have a **material adverse impact** on its financial statements or operations[164](index=164&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have been identified since the last annual report - **No material changes** in risk factors were reported compared to the 2021 Form 10-K[165](index=165&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company executed stock repurchases under its authorized program, with significant capacity remaining Common Stock Repurchases (Nine Months Ended Sep 30, 2022) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining Under Program | | :--- | :--- | :--- | :--- | | May 2022 | 902,418 | $53.22 | $101,975,648 | | June 2022 | 39,461 | $50.66 | $99,976,436 | | Jul-Sep 2022 | — | — | $99,976,436 | | **Total** | **941,879** | **$53.11** | **$99,976,436** | - On April 19, 2022, the board authorized a new share repurchase program for up to **$150.0 million** of outstanding common stock[166](index=166&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists key filed documents, including the BDCF sale agreement and required CEO/CFO certifications - Key exhibits filed include the **Purchase Agreement for the sale of BDCF**, CEO/CFO certifications under Rule 13a-14(a), and Section 1350 certifications[168](index=168&type=chunk)

Financial Data and Key Metrics Changes - Total revenue increased by $32.6 million or 14% linked quarter, and $49.1 million or 23% year-over-year [27] - Net interest income rose by $33.6 million, primarily due to benefits from an asset-sensitive balance sheet and continued C&I loan growth [27] - Net income to common was $37.1 million for the quarter, up 24%, and $49.6 million excluding transaction expenses, up 66% compared to the second quarter [31] - PPNR excluding transaction expenses increased by 25% linked quarter to $84.1 million, achieving year-over-year quarterly growth one quarter earlier than previously guided [30] Business Line Data and Key Metrics Changes - C&I loans increased by $569 million or 6% linked quarter, and are up 38% year-over-year [34] - Treasury product fees increased by 27% year-over-year, driven by improvements in deposit service charges and growth in new products [10] - Real estate balances declined by $100 million or 2% in the quarter due to elevated payoffs and moderated new origination pace [37] Market Data and Key Metrics Changes - Commercial deposit accounts increased by 18% year-over-year, reflecting a focused strategy to generate core operating account growth [44] - Total ending period deposits declined by 4% quarter-over-quarter, with noninterest-bearing deposits down 8% linked quarter [43] Company Strategy and Development Direction - The company is transitioning from a concentrated build phase to execution, focusing on a client-centric offering [8] - A strategic divestiture of the insurance premium finance portfolio is expected to close in the fourth quarter, increasing tangible book value per share by approximately 6.5% [17] - The company aims to enhance its private wealth business and improve its digital client experience through a new onboarding platform [12][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledges inflationary pressures and a challenging rate environment as potential headwinds for businesses [22] - The company is well-prepared for a potential economic downturn, emphasizing client selection and maintaining a conservative credit risk posture [24][120] - Management remains optimistic about market share gains despite economic uncertainties, focusing on value-driven relationships [123] Other Important Information - The company has seen strong organic inflows, with year-to-date net organic inflows over $225 million [14] - The loan portfolio composition is expected to be more representative of core C&I, comprising approximately 50% of the total portfolio post-divestiture [19] - The company is committed to managing its capital base in a disciplined manner, with CET1 and total risk-based capital finishing the quarter at 11.08% and 15.25% respectively [57] Q&A Session Summary Question: Insights on deposit costs and flexibility - Management indicated that beta is a function of the need to raise or retain deposits to support asset growth, with a focus on driving core operating deposits [68][70] Question: When might deposits stabilize? - Management believes the deliberate actions to remix the deposit base are largely complete, and a stabilization is expected as they continue to drive core operating deposits [72][73] Question: Clarification on net interest income sensitivity - Management confirmed that the net interest income sensitivity scenario includes the impact of the pending divestiture and assumes proceeds are parked in cash [81] Question: Future expense growth expectations - Management anticipates that the period of incurring significant costs without corresponding revenue is largely behind them, with continued build-out expected but supported by revenue [92] Question: Thoughts on stock buybacks - Management remains cautious about buybacks in the current economic environment, focusing on organic growth and strategic investments [96][98] Question: Timing and impact of the insurance premium sale - Management expects the sale to close in the fourth quarter, with an associated $36 million in operating expenses expected to fall out following the sale [106][107]

Texas Capital Bancshares, Inc. (NASDAQ:TCBI) Q2 2022 Results Conference Call July 21, 2022 11:00 AM ET Company Participants Jocelyn Kukulka - Head, IR Rob Holmes - President, CEO Matt Scurlock - CFO Conference Call Participants Brad Milsaps - Piper Sandler Brady Gailey - KBW Michael Rose - Raymond James Operator Hello, and welcome to today's TCBI Q2 2022 Earnings Conference Call. My name is Elliot, and I will be coordinating your call today. [Operator Instructions] I would now like to hand the call over to ...

Q2-2022 Earnings July 21, 2022 © 2022 Texas Capital Bank Member FDIC Forward-looking Statements 2 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," "m ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended June 30, 2022 ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from to Commission file number 001-34657 TEXAS CAPITAL BANCSHARES, INC. (Exact name of registrant as specified in its charter) Delaware 75-2679109 (State or other jurisdiction ...

Texas Capital Bancshares, Inc. (NASDAQ:TCBI) Q1 2022 Earnings Conference Call April 21, 2022 4:30 PM ET Company Participants Jocelyn Kukulka - Head, IR Rob Holmes - President and CEO Matt Scurlock - CFO Conference Call Participants Brady Gailey - KBW Brock Vandervliet - UBS Jennifer Demba - Truist Michael Rose - Raymond James Brad Milsaps - Piper Sandler Operator Good afternoon. Thank you for attending today’s TCBI Q1 2022 Earnings Call. My name is Hannah and I will be your moderator for today’s call [Opera ...

Q1-2022 Earnings April 20, 2022 © 2022 Texas Capital Bank Member FDIC Forward-looking Statements 2 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," " ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from to Commission file number 001-34657 TEXAS CAPITAL BANCSHARES, INC. (Exact name of registrant as specified in its charter) Delaware 75-2679109 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 2000 McKinney Avenue Form 10-Q ☒ Quarterly Report pursuant to Section 13 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the fiscal year ended December 31, 2021 ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from to Commission file number 001-34657 TEXAS CAPITAL BANCSHARES, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 75-2679109 (State or other ...

Q4-2021 Earnings January 20, 2022 © 2022 Texas Capital Bank Member FDIC Forward-looking Statements 2 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," ...