ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The Company repurchased shares of its common stock in the open market during the six months ended June 30, 2024 as follows: | --- | --- | --- | --- | --- | --- | --- | --- | |--------------------------|------------------------------------------|-------|-------------|-------------------------|-------------------------------------------------------------------------------------------------------------|-----------------------------|----------- ...

Texas Capital Bancshares, Inc. (NASDAQ:TCBI) Q2 2024 Earnings Conference Call July 18, 2024 9:00 AM ET Company Participants Jocelyn Kukulka - Head of IR Rob Holmes - President and CEO Matt Scurlock - CFO Conference Call Participants Ben Gerlinger - Citi Stephen Scouten - Piper Sandler Matt Olney - Stephens Woody Lay - KBW Jon Arfstrom - RBC Operator Good morning all. I would like to welcome you all to the Texas Capital Bancshares, Inc. Q2 2024 Earnings Call. My name is Breka, and I will be your moderator fo ...

Q2 2024 Earnings Release [Financial Highlights](index=1&type=section&id=Financial%20Highlights) TCBI reported Q2 2024 net income of **$37.4 million**, achieving record book and tangible book value per share while repurchasing **$50.0 million** in common stock Q2 2024 Key Operating Results | Financial Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Net Income Available to Common Stockholders | $37.4 million | $21.8 million | $64.3 million | | Diluted Earnings Per Common Share | $0.80 | $0.46 | $1.33 | | Return on Average Assets | 0.56% | 0.36% | 0.95% | | Return on Average Common Equity | 5.26% | 3.03% | 9.17% | - The company repurchased **$50.0 million** of its common stock during the quarter, while Book Value and Tangible Book Value per share both increased by **1.9%** to record levels[13](index=13&type=chunk)[18](index=18&type=chunk) - CEO Rob C. Holmes stated, "Building a platform resilient to market and rate cycles is a foundational tenant of our strategic plan," emphasizing the focus on realizing the platform's strategic value through enhanced financial performance[2](index=2&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) This section analyzes quarterly and annual financial performance, highlighting sequential net income growth from lower expenses and higher non-interest income, alongside a year-over-year decline due to reduced net interest income and increased provisions [Q2 2024 vs. Q1 2024 Comparison](index=2&type=section&id=Q2%202024%20vs.%20Q1%202024%20Comparison) Net income significantly increased quarter-over-quarter, driven by a **$14.0 million** decrease in non-interest expenses and a **$9.1 million** increase in non-interest income - Net income available to common stockholders increased to **$37.4 million** from **$21.8 million** in Q1 2024[4](index=4&type=chunk) - Non-interest expense decreased by **$14.0 million**, primarily due to a **$9.9 million** drop in salaries and benefits (related to seasonal payroll expenses) and lower legal and FDIC assessment costs[4](index=4&type=chunk) - Non-interest income increased by **$9.1 million**, mainly from higher investment banking and advisory fees[4](index=4&type=chunk) - Net interest income was stable at **$216.6 million**, with a net interest margin of **3.01%**, a slight decrease of **2 basis points**[4](index=4&type=chunk) [Q2 2024 vs. Q2 2023 Comparison](index=2&type=section&id=Q2%202024%20vs.%20Q2%202023%20Comparison) Net income declined year-over-year to **$37.4 million**, primarily due to a **$15.4 million** decrease in net interest income and a **$13.0 million** increase in credit loss provisions - Net interest income decreased to **$216.6 million** from **$232.0 million** in Q2 2023, as the net interest margin contracted by **28 basis points** to **3.01%**[16](index=16&type=chunk) - The provision for credit losses increased significantly to **$20.0 million**, compared to **$7.0 million** in Q2 2023[5](index=5&type=chunk) - Non-interest expense increased by **$6.8 million (4%)** year-over-year, driven by higher salaries, occupancy, and technology costs[16](index=16&type=chunk) [Credit Quality](index=2&type=section&id=Credit%20Quality) Credit quality metrics showed mixed results, with net charge-offs increasing to **$12.0 million** and criticized loans remaining stable sequentially but rising year-over-year Credit Quality Indicators | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Net Charge-offs | $12.0 million | $10.8 million | $8.2 million | | Criticized Loans | $859.7 million | $859.5 million | $619.4 million | | Non-accrual LHI | $85.0 million | $92.8 million | $81.0 million | | Non-accrual LHI / Total LHI | 0.39% | 0.45% | 0.38% | | Allowance for Credit Losses / Total LHI | 1.44% | 1.46% | 1.32% | [Regulatory Ratios and Capital](index=2&type=section&id=Regulatory%20Ratios%20and%20Capital) The company maintained capital ratios above 'well capitalized' requirements, despite a sequential decline in CET1 to **11.6%** due to **$275.0 million** note redemption and **$50.0 million** share repurchase Regulatory Capital Ratios | Ratio | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | CET1 | 11.6% | 12.4% | 12.2% | | Tier 1 Capital | 13.1% | 13.9% | 13.7% | | Total Capital | 15.7% | 16.6% | 16.4% | | Leverage | 12.2% | 12.4% | 12.4% | - The decline in regulatory ratios from Q1 2024 was primarily due to the redemption of **$275.0 million** in bank-issued senior unsecured credit-linked notes[18](index=18&type=chunk) - During Q2 2024, the company repurchased **852,098 shares** of its common stock for an aggregate price of **$50.0 million**[18](index=18&type=chunk) [About Texas Capital Bancshares, Inc. & Forward-Looking Statements](index=3&type=section&id=About%20Texas%20Capital%20Bancshares%2C%20Inc.%20%26%20Forward-Looking%20Statements) This section provides a corporate overview of Texas Capital Bancshares, Inc. as a full-service financial firm and includes standard legal disclaimers regarding forward-looking statements - TCBI is a full-service financial services firm founded in 1998, headquartered in Dallas, offering commercial banking, consumer banking, investment banking, and wealth management capabilities[19](index=19&type=chunk) - The report contains forward-looking statements that are subject to various risks and uncertainties, and the company disclaims any obligation to update these statements[20](index=20&type=chunk) Financial Statements and Data [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) This section details Q2 2024 income statement figures, including net interest income of **$216.6 million**, non-interest income of **$50.4 million**, and net income of **$41.7 million** Consolidated Statements of Income (Unaudited, in thousands) | | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Net interest income | $216,582 | $215,009 | $231,990 | | Provision for credit losses | $20,000 | $19,000 | $7,000 | | Non-interest income | $50,424 | $41,319 | $46,011 | | Non-interest expense | $188,409 | $202,393 | $181,644 | | Net income | $41,662 | $26,142 | $68,651 | | Net income available to common stockholders | $37,350 | $21,829 | $64,339 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section presents the balance sheet as of June 30, 2024, showing total assets grew **3%** year-over-year to **$29.9 billion**, with loans and deposits also increasing Consolidated Balance Sheet Highlights (Unaudited, in thousands) | | June 30, 2024 | June 30, 2023 | % Change | | :--- | :--- | :--- | :--- | | Total assets | $29,854,994 | $28,976,544 | 3% | | Loans held for investment, net | $21,511,433 | $21,088,672 | 2% | | Total deposits | $23,818,327 | $23,318,240 | 2% | | Total liabilities | $26,679,393 | $25,894,617 | 3% | | Total stockholders' equity | $3,175,601 | $3,081,927 | 3% | [Analysis of Net Interest Income](index=10&type=section&id=Analysis%20of%20Net%20Interest%20Income) This section details net interest income analysis, showing a Q2 2024 net interest margin of **3.01%**, a decrease from both the prior quarter and prior year due to funding cost pressures Net Interest Margin Analysis | | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Average Earning Assets | $28,573,791 | $28,192,019 | $27,953,908 | | Net Interest Income (tax-equivalent) | $216,646 | $215,075 | $232,103 | | Net Interest Margin | 3.01% | 3.03% | 3.29% | | Yield on Earning Assets | 5.86% | 5.88% | 5.69% | | Rate on Interest Bearing Liabilities | 4.75% | 4.81% | 4.33% | [Summary of Credit Loss Experience](index=7&type=section&id=Summary%20of%20Credit%20Loss%20Experience) This section details credit loss experience, with a Q2 2024 provision for credit losses of **$20.0 million** and net charge-offs of **$12.0 million**, increasing the total allowance to **$312.6 million** Credit Loss Experience (Unaudited, in thousands) | | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Beginning Allowance for Credit Losses | $304,571 | $296,335 | $282,113 | | Total Charge-offs | $12,108 | $10,869 | $8,852 | | Total Recoveries | $153 | $105 | $613 | | Net Charge-offs | $11,955 | $10,764 | $8,239 | | Total Provision for Credit Losses | $20,000 | $19,000 | $7,000 | | Ending Allowance for Credit Losses | $312,616 | $304,571 | $282,113 | [Summary of Non-Performing Assets](index=8&type=section&id=Summary%20of%20Non-Performing%20Assets) This section summarizes non-performing assets, with total NPAs at **$85.0 million** in Q2 2024, a decrease from the prior quarter, and non-accrual loans at **0.39%** of total LHI Non-Performing Assets (Unaudited, in thousands) | | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Non-accrual loans held for investment | $85,021 | $92,849 | $81,039 | | Total non-performing assets | $85,021 | $102,099 | $81,039 | | NPA / Total Assets | 0.28% | 0.35% | 0.28% | | Non-accrual LHI / Total LHI | 0.39% | 0.45% | 0.38% |

CREDIT QUALITY SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) CONSOLIDATED BALANCE SHEET DATA | --- | --- | --- | --- | --- | --- | |------------------------------------------------------------------------------------------------------------------|-----------------|-------|-----------------|---------|-------| | Issued shares - 300,000 shares issued at June 30, 2024 and 2023 | 300,000 | | 300,000 | — | % | | Common stock, $.01 par value: | | | | | | | Authorized shares - 100,000,000 | | | | | | | Issued shares - ...

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Texas Capital (TCBI) due to lower revenues, with a focus on how actual results compare to estimates impacting stock price [1] Earnings Estimates - The consensus EPS estimate for Texas Capital has been revised 1.09% lower in the last 30 days, indicating a reassessment by analysts [3] - The expected earnings per share for Texas Capital in the upcoming report is $0.87, reflecting a year-over-year decrease of 34.6% [14] Earnings Surprise Prediction - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate being more recent and potentially more accurate [4] - Texas Capital has an Earnings ESP of -5.28%, suggesting analysts have become bearish on the company's earnings prospects [16] - The company has beaten consensus EPS estimates three times in the last four quarters, indicating some potential for positive surprises [10] Industry Comparison - First Horizon, another player in the banking industry, has a consensus EPS estimate revised 2.1% higher, with an Earnings ESP of 1.59%, suggesting a higher likelihood of beating estimates [12] - First Horizon is expected to post earnings of $0.37 per share, indicating a year-over-year change of -5.1%, with revenues expected to be $819.82 million, down 20.5% from the previous year [21] Conclusion - Texas Capital does not appear to be a compelling earnings-beat candidate, and investors should consider other factors before making decisions regarding the stock [20]

The increase in interest rates to fight inflation has led to Texas Capital's asset yields to rise from under 3% to nearly 6% in three years. Consequently, borrowing yields have risen from under 1% to nearing 5% over the same period. While the rise in borrowing yields has been stronger, causing the net interest spread to plunge, the net interest margin has rallied over the same time and is currently sitting above pandemic levels. The net interest margin is a more important measure because it demonstrates the ...

Based in Houston, Texas, Fenn will lead a skilled team of bankers across five cities within the state, with a focus on cultivating strong client relationships and driving the company's growth. In his role, he will continue the firm's leadership in delivering to Business Banking clients best-in-class products and solutions with a strong focus on client service. Fenn will report directly to Jay Clingman, Managing Director, Head of Commercial Banking, who oversees commercial strategy and client base expansion. ...

Based in Houston, Texas, Fenn will lead a skilled team of bankers across five cities within the state, with a focus on cultivating strong client relationships and driving the company's growth. In his role, he will continue the firm's leadership in delivering to Business Banking clients best-in-class products and solutions with a strong focus on client service. Fenn will report directly to Jay Clingman, Managing Director, Head of Commercial Banking, who oversees commercial strategy and client base expansion. ...

DALLAS, June 26, 2024 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ:TCBI), the parent company of Texas Capital, today announced it will open a new financial center in Southlake, Texas next month. It will be the first location of its kind for the firm, transforming its retail strategy to meet the evolving needs of the clients within the markets it serves across Texas. "At Texas Capital, our goal is to deliver high touch, personalized service while pairing it with the right products and solutions ...

Texas Capital Bancshares, Inc.'s (TCBI) increase in net interest income (NII) and steady loan growth will continue to support its financials. Given the company's strong liquidity position, its capital distribution activities seem sustainable. However, an elevated expense base and deteriorating asset quality are a major concern. Texas Capital is focused on growing organically. An elevated level of investment banking, trading income and higher NII drove revenues to witness a compound annual growth rate (CAGR) ...