Core Insights - Texas Capital (TCBI) reported revenue of $307.46 million for Q2 2025, marking a year-over-year increase of 15.2% and exceeding the Zacks Consensus Estimate by 3.09% [1] - The earnings per share (EPS) for the same quarter was $1.63, a significant increase from $0.80 a year ago, resulting in an EPS surprise of 27.34% compared to the consensus estimate of $1.28 [1] Financial Performance Metrics - Efficiency Ratio stood at 61.9%, better than the five-analyst average estimate of 66.6% [4] - Net interest margin was reported at 3.4%, surpassing the average estimate of 3.2% [4] - Net charge-offs to average total loans held for investment for the last 12 months remained at 0.2%, matching the average estimate [4] - Average balance of total earning assets was $30.3 billion, slightly below the four-analyst average estimate of $30.98 billion [4] - Total non-performing assets were $113.61 million, higher than the average estimate of $96.88 million [4] - Non-accrual loans held for investment also totaled $113.61 million, compared to the average estimate of $96.88 million [4] - Net Interest Income was reported at $253.4 million, exceeding the average estimate of $245.58 million [4] - Total Non-Interest Income reached $54.07 million, above the five-analyst average estimate of $52.56 million [4] - Net Interest Income (FTE) was $253.89 million, compared to the four-analyst average estimate of $246.85 million [4] - Wealth management and trust fee income was $3.73 million, below the average estimate of $4.02 million [4] - Brokered loan fees amounted to $2.4 million, exceeding the average estimate of $1.99 million [4] - Service charges on deposit accounts were reported at $8.18 million, slightly above the average estimate of $8.12 million [4] Stock Performance - Texas Capital shares have returned +13.1% over the past month, outperforming the Zacks S&P 500 composite's +4.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Adjusted total revenue increased by 16% year-over-year, amounting to $42.3 million, with net interest income growing by 17% and adjusted fee-based revenue by 11% [10] - Adjusted net income to common rose by 100% year-over-year to $75.5 million, while adjusted earnings per share expanded by 104% [11] - Adjusted return on average assets reached 1.02%, approaching the 1.1% goal set for 2025 [5] Business Line Data and Key Metrics Changes - Commercial loans grew by 5% linked quarter and 13% year-over-year, reflecting effective competition for client relationships [5] - Treasury product fees increased by 37% year-over-year, marking a record high for the firm [7] - Investment banking and trading income rose by 43% quarter-over-quarter and 4% year-over-year, driven by a rebound in capital markets activity [8] Market Data and Key Metrics Changes - Average commercial loan balances increased by 4% during the quarter, with year-over-year balances up approximately $1.4 billion or 13% [12] - Interest-bearing deposits grew by $2.8 billion or 19% year-over-year, while the ratio of average mortgage finance deposits to average mortgage finance loans improved to 91% [13][14] Company Strategy and Development Direction - The company is focused on building a diversified and client-centric institution, enhancing client journeys, and driving operational efficiency [9] - Continued investments in technology and client service models are expected to enhance profitability and support growth [14] - The firm aims to maintain a strong capital position, with CET1 finishing the quarter at 11.45%, despite robust loan growth [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of the diversified earnings platform and the ability to drive consistent client engagement [19] - The outlook for full-year average balances in mortgage finance is expected to grow by 10%, supported by a $1.9 trillion origination market [51] - Management remains cautious about the macroeconomic environment but believes in the strength of the firm's credit portfolio and client selection [58] Other Important Information - The allowance for credit loss increased to $334 million, representing 1.79% of loans held for investment, which is among the top decile in the peer group [16] - The firm repurchased approximately 318,000 shares for a total of $21 million at a weighted average price of $65.5 per share [18] Q&A Session Summary Question: Insights on investment banking and trading pipeline - Management noted that despite capital markets being closed in April and May, investment banking and trading income exceeded guidance, supported by strong syndication fees and sales growth [24] Question: Expectations for ROA and future performance - Management indicated that while the aspiration is not solely to achieve a 1.1% ROA, the strategy is working well, and client acceptance has been strong [28][29] Question: Commentary on restructuring charges and expense guidance - Management highlighted ongoing efforts to drive structural efficiencies and match expenses with fee income areas, maintaining a focus on investment banking trends [32] Question: Impact of regulatory tone on excess capital - Management stated that the regulatory outlook does not affect their view on excess capital, which is seen as a strategic advantage [35] Question: Revenue trends and guidance adjustments - Management expressed confidence in moving towards the high end of revenue guidance due to strong net interest income momentum and client engagement [39] Question: Commercial customer behavior during the quarter - Management observed continued strong client acquisition and a stable line utilization, with expectations for growth in bank debt demand [48][49] Question: Progress on wealth management build-out - Management is optimistic about the wealth management segment, noting improvements in client journey and performance compared to other wealth managers [61]

Financial Data and Key Metrics Changes - Adjusted total revenue increased by 16% year-over-year, amounting to $42.3 million, with net interest income growing by 17% and adjusted fee-based revenue by 11% [10] - Adjusted net income to common rose by 100% year-over-year to $75.5 million, while adjusted earnings per share expanded by 104% [11] - Adjusted return on average assets reached 1.02%, approaching the 1.1% goal set for 2025 [5] Business Line Data and Key Metrics Changes - Commercial loans grew by 5% linked quarter and 13% year-over-year, reflecting effective competition for client relationships [5] - Treasury product fees increased by 37% year-over-year, marking a record high for the firm [7] - Investment banking and trading income rose by 43% quarter-over-quarter and 4% year-over-year, driven by a rebound in capital markets activity [8] Market Data and Key Metrics Changes - Average commercial loan balances increased by 4% during the quarter, with year-over-year balances up approximately $1.4 billion [12] - Interest-bearing deposits grew by $2.8 billion or 19% year-over-year, while the ratio of average mortgage finance deposits to average mortgage finance loans improved to 91% [13][14] Company Strategy and Development Direction - The company is focused on building a diversified and client-centric institution, enhancing client journeys, and driving operational efficiency [9] - Continued investments in technology and client service models are expected to enhance profitability and support growth in various business lines [8][44] - The firm aims to maintain a strong capital position, with a CET1 ratio of 11.45%, and views excess capital as a strategic advantage [17][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of the diversified earnings platform and the ability to drive consistent client engagement across market conditions [19] - The outlook for revenue growth is reaffirmed at low double-digit percentages, with non-interest expense growth expected to be mid to high single digits [19] - Management remains cautious about the mortgage outlook for the remainder of 2025, anticipating a 10% increase in full-year average balances [13] Other Important Information - The allowance for credit loss increased to $334 million, representing 1.79% of loans held for investment, with a strong reserve coverage ratio [16] - The firm repurchased approximately 318,000 shares for a total of $21 million at a weighted average price of $65.5 per share [18] Q&A Session Summary Question: Insights on investment banking and trading pipeline - Management noted that despite capital markets being closed in April and May, investment banking and trading income exceeded guidance, supported by strong syndication fees and sales growth [24] Question: Expectations for ROA and future performance - Management indicated that while the aspiration is not solely to achieve a 1.1% ROA, the strategy is working well, and client acceptance has been strong [28][29] Question: Commentary on restructuring charges - Management highlighted ongoing efforts to drive structural efficiencies and reposition expenses against fee income areas [32] Question: Impact of regulatory tone on excess capital - Management stated that the regulatory outlook does not affect their view on excess capital, which is seen as a competitive advantage [35] Question: Revenue trends and guidance adjustments - Management expressed confidence in moving towards the high end of the revenue guidance due to strong net interest income momentum [39] Question: Commercial customer behavior during the quarter - Management reported continued strong client acquisition and a 20% annualized growth in commercial and industrial loans, with no significant changes in line utilization [48] Question: Progress on wealth management build-out - Management is optimistic about the wealth management segment, noting improvements in client journey and performance compared to other wealth managers [61]

Financial Data and Key Metrics Changes - Adjusted total revenue increased by $42.3 million or 16% year-over-year, supported by a 17% growth in net interest income and an 11% growth in adjusted fee-based revenue [10][11] - Adjusted net income to common rose to $75.5 million, a 100% increase compared to the same quarter last year, with adjusted earnings per share expanding by 104% [11][12] - The adjusted return on average assets reached 1.02%, nearing the 1.1% goal set for 2025 [5][11] Business Line Data and Key Metrics Changes - Commercial loans grew by 5% linked quarter and 13% year-over-year, reflecting effective competition for holistic client relationships [5][12] - Treasury product fees increased by 37% year-over-year, marking a record high for the firm [6][12] - Investment banking and trading income rose by 43% quarter-over-quarter and 4% year-over-year, driven by a rebound in capital markets activity [8][12] Market Data and Key Metrics Changes - Average commercial loan balances increased by 4% or $399 million during the quarter, with year-over-year balances up approximately $1.4 billion or 13% [12] - Client interest-bearing deposits grew by $2.8 billion or 19% year-over-year, while deposit betas increased to 81% [13][14] - The allowance for credit loss increased to $334 million, representing 1.79% of loans held for investment, which is among the top decile in the peer group [16][17] Company Strategy and Development Direction - The company is focused on building a diversified and client-centric institution, enhancing client journeys, and driving operational efficiency [9][10] - Continued investments in technology and capabilities are expected to support growth in investment banking and trading [25][66] - The firm aims to maintain a strong capital position, with a CET1 ratio of 11.45%, allowing for onboarding of new clients [17][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of the diversified earnings platform and the ability to drive consistent client engagement across various market conditions [20][41] - The firm anticipates continued earnings momentum and aims to achieve a quarterly return on average assets of 1.1% in the second half of the year [20][41] - Management remains cautious about the mortgage outlook for the remainder of 2025, expecting a 10% increase in full-year average balances [13][52] Other Important Information - The company repurchased approximately 318,000 shares for a total of $21 million at a weighted average price of $65.5 per share [19] - The firm is focused on maintaining strong credit quality, with a 26% reduction in year-over-year criticized loans [61][62] Q&A Session Summary Question: Insights on investment banking and trading pipeline - Management noted that despite capital markets being closed in April and May, investment banking and trading income exceeded guidance, supported by strong syndication fees and growth in sales and trading [25] Question: Commentary on restructuring charges - Management highlighted ongoing efforts to drive structural efficiencies and match expenses with fee income areas of focus [34] Question: Guidance on revenue trends - Management indicated that net interest income momentum could support moving to the high end of the current revenue guidance [41] Question: Update on wealth management build-out - Management expressed optimism about the wealth management segment, noting improvements in client journey and performance compared to other wealth managers [66]

Financial Performance Highlights - Net interest income increased by $174 million QoQ, supported by continued LHI growth and further reduction in funding costs[35] - Net interest margin expanded by 16 bps QoQ, and 34 bps YoY[35] - Adjusted non-interest expense increased $09 million YoY to $1889 million, reflecting continued repositioning of the expense base in support of defined growth objectives[35] - The company sold $2823 million of available for sale securities with a book yield of 31% in the quarter for a pre-tax loss of $19 million[28] Balance Sheet and Capital Position - Total assets reached $31944 billion, a 7% increase YoY[9] - Total deposits reached $26064 billion[9] - Tangible book value per share increased by $217 or 3% QoQ to $7014 as a result of income generated, share repurchase activity and AOCI accretion[57] - The company repurchased 318 thousand shares in Q2, 07% of year end 2024 shares outstanding, for a total of $21 million at a weighted average price of approximately 96% of prior month tangible book value per share[57] Asset Quality - Total ACL increased $20 million QoQ to $3343 million[44] - Criticized LHI declined $2222 million or 26% YoY, with the percentage of total LHI declining 129 bps to 266%[45] - Special mention LHI declined $1443 million or 30% linked quarter[45] Strategic Performance and Guidance - Full year 2024 adjusted total revenue was $1119 million[58] - The company expects mid to high single-digit percent growth for adjusted non-interest expense[58] - The company expects provisions / average LHI, excl mortgage finance LHI to be 30 bps - 35 bps[58] - The company expects CET1 Ratio to be greater than 11%[58]

[Executive Summary & Business Overview](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Overview) This section provides an overview of Texas Capital Bancshares' strong Q2 2025 financial performance, CEO insights on strategic success, and a brief introduction to the company's business model [Second Quarter 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Highlights) Texas Capital Bancshares, Inc. reported strong financial results for the second quarter of 2025, with significant year-over-year increases in net income, EPS, total loans, and book value per share, reaching record levels Second Quarter 2025 Performance Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | YoY % Change | | :-------------------------------- | :---------- | :---------- | :--------- | :----------- | | Net income | $77.3 million | $41.7 million | $35.6 million | 86% | | Net income available to common stockholders | $73.0 million | $37.4 million | $35.6 million | 95% | | Diluted EPS | $1.58 | $0.80 | $0.78 | 98% | | Adjusted Diluted EPS | $1.63 | $0.80 | $0.83 | 104% | | Total loans (QoQ) | $23.9 billion | $21.8 billion | $2.1 billion | 7% (QoQ) | | Total loans (YoY) | $23.9 billion | $21.8 billion | $2.1 billion | 10% (YoY) | | Book Value per share (YoY) | $70.17 | $62.26 | $7.91 | 13% | | Tangible Book Value per share (YoY) | $70.14 | $62.23 | $7.91 | 13% | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) Rob C. Holmes, Chairman, President & CEO, highlighted the success of the company's multi-year strategy to build a differentiated, full-service financial services firm, which has strengthened its client franchise and structurally enhanced earnings power, positioning the company for durable results - The company's multi-year focus on building a differentiated, full-service financial services firm has strengthened its client franchise and consistently delivered high-quality outcomes, driving strong financial performance[2](index=2&type=chunk) - Strategic actions have structurally enhanced earnings power, positioning the company to deliver durable, through-cycle results for clients and shareholders in the second half of the year[2](index=2&type=chunk) [About Texas Capital Bancshares, Inc.](index=3&type=section&id=About%20Texas%20Capital%20Bancshares%2C%20Inc.) Texas Capital Bancshares, Inc. (NASDAQ: TCBI) is the parent company of Texas Capital Bank, operating as a full-service financial services firm. Founded in 1998 and headquartered in Dallas, it provides customized solutions across commercial banking, consumer banking, investment banking, and wealth management - Texas Capital Bancshares, Inc. (NASDAQ: TCBI) is the parent company of Texas Capital Bank, a full-service financial services firm[17](index=17&type=chunk) - The company delivers customized solutions to businesses, entrepreneurs, and individual customers, with capabilities in commercial banking, consumer banking, investment banking, and wealth management[17](index=17&type=chunk) - Founded in 1998, Texas Capital is headquartered in Dallas with offices in Austin, Houston, San Antonio, and Fort Worth, serving clients nationwide[17](index=17&type=chunk) [Financial Performance Analysis - Quarterly Comparisons](index=2&type=section&id=Financial%20Performance%20Analysis%20-%20Quarterly%20Comparisons) This section analyzes Texas Capital Bancshares' financial performance by comparing key metrics for Q2 2025 against prior quarters, highlighting trends in income, expenses, and profitability [Q2 2025 vs Q1 2025 Performance](index=2&type=section&id=Q2%202025%20vs%20Q1%202025%20Performance) The second quarter of 2025 saw significant sequential improvements, with net income available to common stockholders increasing by 70.9% and diluted EPS by 71.7%. This growth was driven by higher net interest income, increased non-interest income, and a decrease in non-interest expense, partially offset by a lower provision for credit losses [Net Income and EPS (QoQ)](index=2&type=section&id=Net%20Income%20and%20EPS%20(QoQ)) Net Income and EPS (QoQ) | Metric | Q2 2025 | Q1 2025 | QoQ Change | QoQ % Change | | :-------------------------------- | :---------- | :---------- | :--------- | :----------- | | Net income available to common stockholders | $73.0 million | $42.7 million | $30.3 million | 70.9% | | Diluted EPS | $1.58 | $0.92 | $0.66 | 71.7% | [Provision for Credit Losses (QoQ)](index=2&type=section&id=Provision%20for%20Credit%20Losses%20(QoQ)) Provision for Credit Losses (QoQ) | Metric | Q2 2025 | Q1 2025 | QoQ Change | | :------------------------ | :---------- | :---------- | :--------- | | Provision for credit losses | $15.0 million | $17.0 million | -$2.0 million | - The provision for credit losses in Q2 2025 was primarily due to an increase in total loans held for investment (LHI) and **$13.0 million in net charge-offs**, partially offset by a decrease in criticized loans[5](index=5&type=chunk) [Net Interest Income and Margin (QoQ)](index=2&type=section&id=Net%20Interest%20Income%20and%20Margin%20(QoQ)) Net Interest Income and Margin (QoQ) | Metric | Q2 2025 | Q1 2025 | QoQ Change | QoQ % Change | | :---------------- | :---------- | :---------- | :--------- | :----------- | | Net interest income | $253.4 million | $236.0 million | $17.4 million | 7.4% | | Net interest margin | 3.35% | 3.19% | 16 bps | - | - Increase in net interest income primarily due to increases in average earning assets and earning asset yields, a decrease in average short-term borrowings, and the impact of one additional day[6](index=6&type=chunk) - LHI (excluding mortgage finance) yields decreased **4 basis points**, while LHI (mortgage finance) yields increased **49 basis points**. Total cost of deposits decreased **11 basis points to 2.65%**[6](index=6&type=chunk) [Non-Interest Income (QoQ)](index=2&type=section&id=Non-Interest%20Income%20(QoQ)) Non-Interest Income (QoQ) | Metric | Q2 2025 | Q1 2025 | QoQ Change | QoQ % Change | | :--------------- | :---------- | :---------- | :--------- | :----------- | | Non-interest income | $54.1 million | $44.4 million | $9.7 million | 21.8% | - Increase primarily due to increases in investment banking and advisory fees and trading income, partially offset by a **$1.9 million loss on sale of available-for-sale debt securities**[7](index=7&type=chunk) [Non-Interest Expense (QoQ)](index=2&type=section&id=Non-Interest%20Expense%20(QoQ)) Non-Interest Expense (QoQ) | Metric | Q2 2025 | Q1 2025 | QoQ Change | QoQ % Change | | :--------------- | :---------- | :---------- | :--------- | :----------- | | Non-interest expense | $190.3 million | $203.0 million | -$12.7 million | -6.3% | - Decrease primarily due to decreases in salaries and benefits (related to seasonal payroll expenses peaking in Q1) and legal and professional expense, partially offset by an increase in other non-interest expense[8](index=8&type=chunk) [Q2 2025 vs Q2 2024 Performance](index=2&type=section&id=Q2%202025%20vs%20Q2%202024%20Performance) Year-over-year performance for Q2 2025 showed substantial growth, with net income available to common stockholders increasing by 95% and diluted EPS by 97.5%. This was driven by a significant increase in net interest income and margin, and a lower provision for credit losses, despite a modest increase in non-interest expense [Net Income and EPS (YoY)](index=2&type=section&id=Net%20Income%20and%20EPS%20(YoY)) Net Income and EPS (YoY) | Metric | Q2 2025 | Q2 2024 | YoY Change | YoY % Change | | :-------------------------------- | :---------- | :---------- | :--------- | :----------- | | Net income available to common stockholders | $73.0 million | $37.4 million | $35.6 million | 95% | | Diluted EPS | $1.58 | $0.80 | $0.78 | 97.5% | [Provision for Credit Losses (YoY)](index=2&type=section&id=Provision%20for%20Credit%20Losses%20(YoY)) Provision for Credit Losses (YoY) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :------------------------ | :---------- | :---------- | :--------- | | Provision for credit losses | $15.0 million | $20.0 million | -$5.0 million | - The Q2 2025 provision reflected an increase in total LHI and **$13.0 million in net charge-offs**, partially offset by a decline in criticized loans[10](index=10&type=chunk) [Net Interest Income and Margin (YoY)](index=2&type=section&id=Net%20Interest%20Income%20and%20Margin%20(YoY)) Net Interest Income and Margin (YoY) | Metric | Q2 2025 | Q2 2024 | YoY Change | YoY % Change | | :---------------- | :---------- | :---------- | :--------- | :----------- | | Net interest income | $253.4 million | $216.6 million | $36.8 million | 17.0% | | Net interest margin | 3.35% | 3.01% | 34 bps | - | - Increase in net interest income primarily due to an increase in average earning assets and a decrease in funding costs, partially offset by an increase in average interest-bearing liabilities[11](index=11&type=chunk) - LHI (excluding mortgage finance) yields decreased **44 basis points**, while LHI (mortgage finance) yields increased **48 basis points**. Total cost of deposits decreased **34 basis points**[11](index=11&type=chunk) [Non-Interest Income (YoY)](index=2&type=section&id=Non-Interest%20Income%20(YoY)) Non-Interest Income (YoY) | Metric | Q2 2025 | Q2 2024 | YoY Change | YoY % Change | | :--------------- | :---------- | :---------- | :--------- | :----------- | | Non-interest income | $54.1 million | $50.4 million | $3.7 million | 7.3% | - Increase primarily due to increases in service charges on deposit accounts, trading income, and other non-interest income, partially offset by the loss on sale of available-for-sale debt securities[12](index=12&type=chunk) [Non-Interest Expense (YoY)](index=2&type=section&id=Non-Interest%20Expense%20(YoY)) Non-Interest Expense (YoY) | Metric | Q2 2025 | Q2 2024 | YoY Change | YoY % Change | | :--------------- | :---------- | :---------- | :--------- | :----------- | | Non-interest expense | $190.3 million | $188.4 million | $1.9 million | 1.0% | - Increase primarily due to increases in salaries and benefits, occupancy expense, and communications and technology expense, partially offset by a decrease in marketing expense[13](index=13&type=chunk) [Asset Quality and Capital Management](index=2&type=section&id=Asset%20Quality%20and%20Capital%20Management) This section evaluates the company's asset quality through credit metrics and details its robust regulatory capital position and share repurchase activities [Credit Quality Overview](index=2&type=section&id=Credit%20Quality%20Overview) Credit quality metrics showed mixed trends in Q2 2025. Net charge-offs increased sequentially and year-over-year, while criticized loans decreased significantly. Non-accrual loans held for investment increased, leading to a higher non-accrual LHI ratio, but the allowance for credit losses to total LHI ratio slightly decreased Credit Quality Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change | YoY Change | | :------------------------------------------ | :---------- | :---------- | :---------- | :--------- | :--------- | | Net charge-offs | $13.0 million | $9.8 million | $12.0 million | +$3.2 million | +$1.0 million | | Criticized loans | $637.5 million | $762.9 million | $859.7 million | -$125.4 million | -$222.2 million | | Non-accrual LHI | $113.6 million | $93.6 million | $85.0 million | +$20.0 million | +$28.6 million | | Non-accrual LHI to total LHI | 0.47% | 0.42% | 0.39% | +0.05% | +0.08% | | Total allowance for credit losses to total LHI | 1.40% | 1.48% | 1.44% | -0.08% | -0.04% | [Regulatory Capital and Share Repurchases](index=2&type=section&id=Regulatory%20Capital%20and%20Share%20Repurchases) Texas Capital Bancshares maintained strong regulatory capital ratios, all exceeding 'well capitalized' requirements as of June 30, 2025. The company also repurchased 317,860 shares of common stock during the quarter - All regulatory ratios remain in excess of 'well capitalized' requirements as of June 30, 2025[15](index=15&type=chunk) Regulatory Capital Ratios | Regulatory Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------- | :------ | :------ | :------ | | CET1 | 11.4% | 11.6% | 11.6% | | Tier 1 capital | 12.9% | 13.1% | 13.1% | | Total capital | 15.3% | 15.6% | 15.7% | | Leverage ratio | 11.8% | 11.8% | 12.2% | | Tangible common equity to total tangible assets | 10.1% | 10.0% | 9.6% | - During Q2 2025, the Company repurchased **317,860 shares of its common stock** for an aggregate purchase price of **$21.0 million**, at a weighted average price of **$65.50 per share**[16](index=16&type=chunk) [Detailed Financial Statements](index=4&type=section&id=Detailed%20Financial%20Statements) This section presents comprehensive financial statements and detailed analyses of balance sheet, income statement, credit loss experience, and net interest income for various periods [Selected Financial Highlights (Summary Tables)](index=4&type=section&id=Selected%20Financial%20Highlights%20(Summary%20Tables)) This section provides a multi-quarter summary of key consolidated financial data, including income statement figures, balance sheet items, and selected financial ratios, offering a quick overview of performance and financial position trends Consolidated Financial Highlights (in thousands) **Consolidated Statements of Income Highlights (Q2 2025 vs Q1 2025 vs Q2 2024):** | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------------------ | :---------- | :---------- | :---------- | | Net interest income | $253,395 | $236,034 | $216,582 | | Provision for credit losses | $15,000 | $17,000 | $20,000 | | Non-interest income | $54,069 | $44,444 | $50,424 | | Non-interest expense | $190,276 | $203,020 | $188,409 | | Net income available to common stockholders | $73,016 | $42,734 | $37,350 | | Diluted earnings per common share | $1.58 | $0.92 | $0.80 | **Consolidated Balance Sheet Data Highlights (June 30, 2025 vs March 31, 2025 vs June 30, 2024):** | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------- | :-------------- | :--------------- | :-------------- | | Total assets | $31,943,535 | $31,375,749 | $29,854,994 | | Total loans held for investment | $23,925,534 | $22,379,784 | $21,778,730 | | Total deposits | $26,064,309 | $26,053,034 | $23,818,327 | | Stockholders' equity | $3,510,070 | $3,429,774 | $3,175,601 | **Selected Financial Ratios Highlights (Q2 2025 vs Q1 2025 vs Q2 2024):** | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | :------ | | Net interest margin | 3.35% | 3.19% | 3.01% | | Return on average assets | 0.99% | 0.61% | 0.56% | | Return on average common equity | 9.17% | 5.56% | 5.26% | | Efficiency ratio | 61.9% | 72.4% | 70.6% | | Common Equity Tier 1 | 11.4% | 11.6% | 11.6% | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section presents a detailed breakdown of the company's assets, liabilities, and stockholders' equity over five quarters, providing a comprehensive view of its financial position and structural changes Consolidated Balance Sheet Data (in thousands) | Item | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | **Assets:** | | | | | | | Total assets | $31,943,535 | $31,375,749 | $30,731,883 | $31,629,299 | $29,854,994 | | Loans held for investment, net | $23,647,886 | $22,101,405 | $22,178,357 | $22,021,028 | $21,511,433 | | Investment securities | $4,608,628 | $4,531,219 | $4,396,115 | $4,405,520 | $4,388,976 | | **Liabilities:** | | | | | | | Total deposits | $26,064,309 | $26,053,034 | $25,238,599 | $25,865,255 | $23,818,327 | | Non-interest bearing deposits | $7,718,006 | $7,874,780 | $7,485,428 | $9,070,804 | $7,987,715 | | Short-term borrowings | $1,250,000 | $750,000 | $885,000 | $1,035,000 | $1,675,000 | | Long-term debt | $620,256 | $660,521 | $660,346 | $660,172 | $659,997 | | **Stockholders' Equity:** | | | | | | | Total stockholders' equity | $3,510,070 | $3,429,774 | $3,367,936 | $3,354,044 | $3,175,601 | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) This section provides detailed consolidated statements of income, presenting revenue and expense components for the three and six months ended June 30, 2025 and 2024, as well as a quarterly trend over five periods, highlighting the drivers of net income Consolidated Statements of Income (in thousands) **Consolidated Statements of Income (Three Months Ended June 30, in thousands):** | Item | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Total interest income | $439,567 | $422,068 | | Total interest expense | $186,172 | $205,486 | | Net interest income | $253,395 | $216,582 | | Provision for credit losses | $15,000 | $20,000 | | Total non-interest income | $54,069 | $50,424 | | Total non-interest expense | $190,276 | $188,409 | | Net income available to common stockholders | $73,016 | $37,350 | | Diluted earnings per common share | $1.58 | $0.80 | **Consolidated Statements of Income (Six Months Ended June 30, in thousands):** | Item | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Total interest income | $866,856 | $839,446 | | Total interest expense | $377,427 | $407,855 | | Net interest income | $489,429 | $431,591 | | Provision for credit losses | $32,000 | $39,000 | | Total non-interest income | $98,513 | $91,743 | | Total non-interest expense | $393,296 | $390,802 | | Net income available to common stockholders | $115,750 | $59,179 | | Diluted earnings per common share | $2.49 | $1.25 | **Key Interest Income/Expense Components (Q2 2025 vs Q1 2025 vs Q2 2024, in thousands):** | Item | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------------------ | :----- | :----- | :----- | | Interest and fees on loans | $364,358 | $334,150 | $345,251 | | Interest expense on deposits | $174,798 | $174,936 | $181,280 | | Investment banking and advisory fees | $24,109 | $16,478 | $25,048 | | Salaries and benefits expense | $120,154 | $131,641 | $118,840 | [Summary of Credit Loss Experience](index=7&type=section&id=Summary%20of%20Credit%20Loss%20Experience) This section details the allowance for credit losses, including beginning and ending balances, charge-offs, recoveries, and provision for credit losses, categorized by loan type. It also provides key ratios related to credit loss experience Allowance for Credit Losses and Key Ratios (in thousands) **Allowance for Credit Losses on Loans (in thousands):** | Item | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------------------ | :----- | :----- | :----- | | Beginning balance | $278,379 | $271,709 | $263,962 | | Total charge-offs | $13,451 | $10,697 | $12,108 | | Total recoveries | $486 | $900 | $153 | | Net charge-offs | $12,965 | $9,797 | $11,955 | | Provision for credit losses on loans | $12,234 | $16,467 | $15,290 | | Ending balance | $277,648 | $278,379 | $267,297 | **Key Ratios:** | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------------------------- | :------ | :------ | :------ | | Allowance for credit losses on loans to total LHI | 1.16% | 1.24% | 1.23% | | Net charge-offs to average total LHI (annualized) | 0.22% | 0.18% | 0.23% | | Total provision for credit losses to average total LHI (annualized) | 0.26% | 0.32% | 0.38% | [Non-Performing Assets and Criticized Loans](index=8&type=section&id=Non-Performing%20Assets%20and%20Criticized%20Loans) This section provides a detailed breakdown of non-performing assets, past due loans, and criticized loans, along with their respective ratios, offering insights into the overall asset quality and potential credit risks Non-Performing Assets and Criticized Loans (in thousands) **Non-Performing Assets (in thousands):** | Item | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------------------ | :----- | :----- | :----- | | Non-accrual loans held for investment | $113,609 | $93,565 | $85,021 | | Total non-performing assets | $113,609 | $93,565 | $85,021 | **Non-Performing Asset Ratios:** | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------------------------- | :------ | :------ | :------ | | Non-accrual LHI to total LHI | 0.47% | 0.42% | 0.39% | | Total non-performing assets to total assets | 0.36% | 0.30% | 0.28% | | Allowance for credit losses on loans to non-accrual LHI | 2.4x | 3.0x | 3.1x | **Criticized Loans (in thousands):** | Item | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------------------ | :----- | :----- | :----- | | Criticized loans | $637,462 | $762,887 | $859,671 | | Criticized loans to total LHI | 2.66% | 3.41% | 3.95% | | Special mention loans | $339,923 | $484,165 | $593,305 | | Special mention loans to total LHI | 1.42% | 2.16% | 2.72% | [Taxable Equivalent Net Interest Income Analysis](index=10&type=section&id=Taxable%20Equivalent%20Net%20Interest%20Income%20Analysis) This analysis provides a detailed breakdown of average balances, interest income/expense, and corresponding yields/rates for earning assets and interest-bearing liabilities, presented on a taxable equivalent basis, for various quarterly and year-to-date periods Taxable Equivalent Net Interest Income Analysis (in thousands) | Item | Q2 2025 Avg Balance (in thousands) | Q2 2025 Income/Expense (in thousands) | Q2 2025 Yield/Rate | Q1 2025 Avg Balance (in thousands) | Q1 2025 Income/Expense (in thousands) | Q1 2025 Yield/Rate | Q2 2024 Avg Balance (in thousands) | Q2 2024 Income/Expense (in thousands) | Q2 2024 Yield/Rate | | :------------------------------------ | :------------------ | :------------------- | :----------------- | :------------------ | :------------------- | :----------------- | :------------------ | :------------------- | :----------------- | | **Earning Assets:** | | | | | | | | | | | Investment securities | $4,573,164 | $45,999 | 3.93% | $4,463,876 | $46,565 | 4.10% | $4,427,023 | $33,584 | 2.80% | | Interest bearing cash and cash equivalents | $2,661,037 | $29,218 | 4.40% | $4,255,796 | $46,574 | 4.44% | $3,273,069 | $43,233 | 5.31% | | Loans held for investment, net | $23,068,150 | $364,849 | 6.34% | $21,226,418 | $334,618 | 6.39% | $20,844,931 | $344,632 | 6.65% | | Total earning assets | $30,302,351 | $440,066 | 5.80% | $29,946,425 | $427,759 | 5.76% | $28,573,791 | $422,132 | 5.86% | | **Interest Bearing Liabilities:** | | | | | | | | | | | Total interest bearing deposits | $18,301,657 | $174,798 | 3.83% | $17,849,877 | $174,936 | 3.97% | $15,702,189 | $181,280 | 4.64% | | Short-term borrowings | $306,176 | $3,444 | 4.51% | $751,500 | $8,246 | 4.45% | $927,253 | $12,749 | 5.53% | | Long-term debt | $649,469 | $7,930 | 4.90% | $660,445 | $8,073 | 4.96% | $778,401 | $11,457 | 5.92% | | Total interest bearing liabilities | $19,257,302 | $186,172 | 3.88% | $19,261,822 | $191,255 | 4.03% | $17,407,843 | $205,486 | 4.75% | | Net interest income (taxable equivalent) | | $253,894 | | | $236,504 | | | $216,646 | | | Net interest margin | | 3.35% | | | 3.19% | | | 3.01% | | [Non-GAAP Reconciliations & Disclosures](index=3&type=section&id=Non-GAAP%20Reconciliations%20%26%20Disclosures) This section provides reconciliations of non-GAAP financial measures to GAAP and includes important disclosures regarding forward-looking statements and associated risks [GAAP to Non-GAAP Reconciliations](index=11&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section provides reconciliations of various non-GAAP financial measures, such as adjusted net income, adjusted EPS, and adjusted efficiency ratio, to their most directly comparable GAAP measures. Management uses these adjusted measures to evaluate operating results and financial strength, believing they offer meaningful additional information to investors - Non-GAAP financial measures are adjusted for certain items that management believes are non-operating in nature and not representative of actual operating performance[35](index=35&type=chunk) - Management believes these non-GAAP measures provide meaningful additional information for evaluating operating results, financial strength, business performance, and capital position[35](index=35&type=chunk) Reconciliation of Non-GAAP Financial Measures (in thousands except per share data) | Metric | Q2 2025 (GAAP) | Q2 2025 (Adjusted) | Q1 2025 (GAAP) | Q1 2025 (Adjusted) | Q2 2024 (GAAP) | Q2 2024 (Adjusted) | | :------------------------------------ | :------------- | :----------------- | :------------- | :----------------- | :------------- | :----------------- | | Net income | $77,328 | $79,841 | $47,047 | $47,047 | $41,662 | $42,020 | | Net income to common stockholders | $73,016 | $75,529 | $42,734 | $42,734 | $37,350 | $37,708 | | Diluted earnings per common share | $1.58 | $1.63 | $0.92 | $0.92 | $0.80 | $0.80 | | Pre-provision net revenue (PPNR) | $117,188 | $120,475 | $77,458 | $77,458 | $78,597 | $79,059 | | Return on average assets | 0.99% | 1.02% | 0.61% | 0.61% | 0.56% | 0.57% | | Return on average common equity | 9.17% | 9.48% | 5.56% | 5.56% | 5.26% | 5.31% | | Efficiency ratio | 61.9% | 61.1% | 72.4% | 72.4% | 70.6% | 70.4% | [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section serves as a disclaimer, indicating that the communication contains forward-looking statements subject to inherent uncertainties, risks, and changes in circumstances. It advises that actual results could differ materially from those projected due to various factors, including economic conditions, regulatory changes, and operational risks - The communication contains forward-looking statements regarding TCBI's financial condition, results of operations, business plans, and future performance, which are not historical in nature[18](index=18&type=chunk) - These statements are subject to inherent and various uncertainties, risks, and changes in circumstances that are difficult to predict and are not guarantees of future results[19](index=19&type=chunk) - Important risks include economic conditions, credit quality developments, liquidity management, regulatory compliance, IT systems, interest rate changes, and external events, as detailed in SEC filings[19](index=19&type=chunk)

Second quarter 2025 net income of $77.3 million and net income available to common stockholders of $73.0 million, up 86% and 95%, respectively, year-over-year Second quarter 2025 EPS of $1.58 per diluted share and adjusted EPS(1) of $1.63 per diluted share, up 98% and 104%, respectively, year-over-year Strong balance sheet growth with total loans increasing 7% quarter-over-quarter and 10% year-over-year Book Value and Tangible Book Value(2) per share both increasing 13% year-over-year, reaching record level ...

Core Viewpoint - Analysts project Texas Capital (TCBI) will report quarterly earnings of $1.28 per share, a 60% increase year over year, with revenues expected to reach $298.24 million, an 11.7% increase from the same quarter last year [1]. Earnings Projections - The consensus EPS estimate has been revised downward by 0.7% in the past 30 days, indicating a reassessment by covering analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Key Financial Metrics - Analysts estimate the 'Efficiency Ratio' to be 66.6%, down from 70.6% a year ago [4]. - The 'Net Interest Margin' is expected to be 3.2%, up from 3.0% in the same quarter last year [5]. - The 'Average Balance - Total earning assets' is projected at $30.98 billion, compared to $28.57 billion a year ago [5]. - 'Total Non-Performing Assets' are estimated at $96.88 million, up from $85.02 million a year ago [5][6]. Income Projections - 'Net Interest Income' is forecasted to reach $245.58 million, compared to $216.58 million last year [6]. - 'Total Non-Interest Income' is expected to be $52.56 million, up from $50.42 million a year ago [6]. - 'Net Interest Income (FTE)' is estimated at $246.85 million, compared to $216.65 million in the same quarter last year [7]. - 'Wealth Management and Trust Fee Income' is projected at $4.02 million, up from $3.70 million last year [7]. Additional Income Metrics - 'Service Charges on Deposit Accounts' are expected to reach $8.12 million, compared to $5.91 million a year ago [8]. - 'Other Non-Interest Income' is projected at $8.22 million, up from $7.99 million last year [8]. - 'Trading Income' is expected to be $6.12 million, compared to $5.65 million in the same quarter last year [9]. Stock Performance - Texas Capital shares have returned +14.6% over the past month, outperforming the Zacks S&P 500 composite's +4% change [9].

Core Viewpoint - The market anticipates Texas Capital (TCBI) will report a year-over-year increase in earnings driven by higher revenues for the quarter ended June 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Texas Capital is expected to post quarterly earnings of $1.28 per share, reflecting a +60% year-over-year change, with revenues projected at $298.24 million, an increase of 11.7% from the previous year [3]. - The earnings report is scheduled for release on July 17, and better-than-expected results could lead to a stock price increase, while disappointing results may cause a decline [2]. Estimate Revisions - The consensus EPS estimate has been revised 0.73% lower in the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Texas Capital is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +3.47%, suggesting a bullish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. - Texas Capital currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Texas Capital was expected to earn $0.99 per share but reported $0.92, resulting in a surprise of -7.07% [13]. - Over the past four quarters, Texas Capital has surpassed consensus EPS estimates two times [14]. Industry Context - In the Zacks Banks - Southwest industry, First Horizon National (FHN) is expected to report earnings of $0.41 per share for the same quarter, indicating a +13.9% year-over-year change, with revenues projected at $826.37 million, up 1.4% from the previous year [18]. - First Horizon's consensus EPS estimate has been revised down by 1.7% over the last 30 days, but it has an Earnings ESP of +2.94%, although its Zacks Rank of 4 complicates predictions for an earnings beat [19].

Group 1 - Texas Capital Bancshares (NASDAQ: TCBI) is a regional bank focused on metropolitan areas in Texas, offering both common and preferred shares [1] - The bank's preferred share issuance is listed under NASDAQ: TCBIO [1] Group 2 - The author has a beneficial long position in TCBIO through stock ownership, options, or other derivatives [2] - The article expresses the author's own opinions and is not compensated beyond Seeking Alpha [2]