First quarter 2024 net income of $26.1 million and net income available to common stockholders of $21.8 million, or $0.46 per diluted share First quarter 2024 growth in loans held for investment of 2.4% and in total deposits of 7.1% Capital ratios continue to be strong, including 12.4% CET1 and 16.6% Total Capital DALLAS, April 18, 2024 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ:TCBI), the parent company of Texas Capital Bank, announced operating results for the first quarter of 2024. Net income available to common stockholders was $21.8 million, or $0.46 per diluted share, for the first quarter of 2024, compared to $15.8 million, or $0.33 per diluted share, for the fourth quarter of 2023 and $34.3 million, or $0.70 per diluted share, for the first quarter of 2023. The first quarter of 2024 included a $5.0 million ($0.08 per diluted share) legal settlement expense, Federal Deposit Insurance Corporation ("FDIC") special assessment expense of $3.0 million ($0.05 per diluted share) and $2.0 million ($0.03 per diluted share) of restructuring expenses. "We continue to leverage our unique balance sheet positioning and maturing product capabilities to build an enduring and valuable franchise," said Rob C. Holmes, President and CEO. "Quality quarterly growth in areas of focus coupled with strong firm-wide pipelines signal emerging momentum moving into the second quarter." FINANCIAL RESULTS           (dollars and shares in thousands)             1st Quarter   4th Quarter   1st Quarter     2024       2023       2023   OPERATING RESULTS           Net income $ 26,142     $ 20,150     $ 38,661   Net income available to common stockholders $ 21,829     $ 15,838     $ 34,348   Diluted earnings per common share $ 0.46     $ 0.33     $ 0.70   Diluted common shares   47,711       48,098       48,881   Return on average assets   0.36 %     0.27 %     0.53 % Return on average common equity   3.03 %     2.25 %     5.06 %             BALANCE SHEET           Loans held for investment $ 16,677,691     $ 16,362,230     $ 16,014,497   Loans held for investment, mortgage finance   4,153,313       3,978,328       4,060,570   Total loans held for investment   20,831,004       20,340,558       20,075,067   Loans held for sale   37,750       44,105       27,608   Total assets   29,180,585       28,356,266       28,596,653   Non-interest bearing deposits   8,478,215       7,328,276       9,500,583   Total deposits   23,954,037       22,371,839       22,179,697   Stockholders' equity   3,170,662       3,199,142       3,079,974               FIRST QUARTER 2024 COMPARED TO FOURTH QUARTER 2023 For the first quarter of 2024, net income available to common stockholders was $21.8 million, or $0.46 per diluted share, compared to $15.8 million, or $0.33 per diluted share, for the fourth quarter of 2023. Provision for credit losses for the first quarter of 2024 was $19.0 million, compared to $19.0 million for the fourth quarter of 2023. The $19.0 million provision for credit losses recorded in the first quarter of 2024 resulted primarily from increases in criticized and non-accrual loans, growth in loans held for investment ("LHI") and $10.8 million in net charge-offs. Net interest income was $215.0 million for the first quarter of 2024, compared to $214.7 million for the fourth quarter of 2023, as an increase in yields on earning assets was offset by a decrease in average earning assets. Net interest margin for the first quarter of 2024 was 3.03%, an increase of 10 basis points from the fourth quarter of 2023. LHI, excluding mortgage finance, yields increased 12 basis points from the fourth quarter of 2023 and LHI, mortgage finance yields increased 21 basis points from the fourth quarter of 2023. Total cost of deposits was 2.97% for the first quarter of 2024, a 15 basis point increase from the fourth quarter of 2023. Non-interest income for the first quarter of 2024 increased $10.2 million, or 33%, compared to the fourth quarter of 2023, primarily due to an increase in investment banking and advisory fees, partially offset by a decrease in other non-interest income. Non-interest expense for the first quarter of 2024 increased $1.0 million, or 1%, compared to the fourth quarter of 2023, primarily due to an increase in salaries and benefits, primarily as a result of the effect of seasonal payroll expenses that peak in the first quarter and $2.0 million of restructuring expenses, partially offset by decreases in legal and professional expense, communications and technology expense and FDIC insurance assessment. The fourth quarter of 2023 included $19.9 million in FDIC special assessment expense and the first quarter of 2024 included an additional special assessment expense of $3.0 million. Legal and professional expense in the first quarter of 2024 included a $5.0 million legal settlement expense, which was more than offset by declines in professional services. FIRST QUARTER 2024 COMPARED TO FIRST QUARTER 2023 Net income available to common stockholders was $21.8 million, or $0.46 per diluted share, for the first quarter of 2024, compared to $34.3 million, or $0.70 per diluted share, for the first quarter of 2023. The first quarter of 2024 included a $19.0 million provision for credit losses, reflecting increases in criticized and non-accrual loans, growth in LHI and $10.8 million in net charge-offs, compared to a $28.0 million provision for the first quarter of 2023. Net interest income decreased to $215.0 million for the first quarter of 2024, compared to $235.3 million for the first quarter of 2023, primarily due to an increase in funding costs, partially offset by an increase in yields on average earning assets. Net interest margin decreased 30 basis points to 3.03% for the first quarter of 2024, as compared to the first quarter of 2023. LHI, excluding mortgage finance, yields increased 52 basis points compared to the first quarter of 2023 and LHI, mortgage finance yields decreased 102 basis points from the first quarter of 2023. Total cost of deposits increased 91 basis points compared to the first quarter of 2023. Non-interest income for the first quarter of 2024 increased $3.9 million, or 10%, compared to the first quarter of 2023. The increase was primarily due to an increase in investment banking and advisory fees. Non-interest expense for the first quarter of 2024 increased $8.4 million, or 4%, compared to the first quarter of 2023, primarily due to increases in legal and professional expense, communications and technology expense and FDIC insurance assessment resulting from an additional $3.0 million FDIC special assessment recorded in the first quarter of 2024, partially offset by a decrease in marketing expense. The increase in legal and professional expense in the first quarter of 2024 resulted from a $5.0 million legal settlement expense, partially offset by declines in professional services. CREDIT QUALITY Net charge-offs of $10.8 million were recorded during the first quarter of 2024, compared to net charge-offs of $13.8 million and $19.9 million during the fourth quarter of 2023 and the first quarter of 2023, respectively. Criticized loans totaled $859.5 million at March 31, 2024, compared to $738.2 million at December 31, 2023 and $561.1 million at March 31, 2023. Non-accrual LHI totaled $92.8 million at March 31, 2024, compared to $81.4 million at December 31, 2023 and $94.0 million at March 31, 2023. The ratio of non-accrual LHI to total LHI for the first quarter of 2024 was 0.45%, compared to 0.40% for the fourth quarter of 2023 and 0.47% for the first quarter of 2023. The ratio of total allowance for credit losses to total LHI was 1.46% at March 31, 2024, compared to 1.46% and 1.41% at September 30, 2023 and March 31, 2023, respectively. REGULATORY RATIOS AND CAPITAL All regulatory ratios continue to be in excess of "well capitalized" requirements as of March 31, 2024. Our CET1, tier 1 capital, total capital and leverage ratios were 12.4%, 13.9%, 16.6% and 12.4%, respectively, at March 31, 2024, compared to 12.6%, 14.2%, 17.1% and 12.2%, respectively, at December 31, 2023 and 12.4%, 14.0%, 16.9% and 12.0%, respectively, at March 31, 2023. At March 31, 2024, our ratio of tangible common equity to total tangible assets was 9.8%, compared to 10.2% at December 31, 2023 and 9.7% at March 31, 2023. During the first quarter of 2024, the Company repurchased 529,338 shares of its common stock for an aggregate purchase price, including excise tax expense, of $31.5 million, at a weighted average price of $59.27 per share. 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 holding company of Texas Capital, a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs and individual customers. Founded in 1998, the firm is headquartered in Dallas with offices in Austin, Houston, San Antonio, and Fort Worth, and has built a network of clients across the country. With the ability to service clients through their entire lifecycles, Texas Capital has established commercial banking, consumer banking, investment banking and wealth management capabilities. Forward Looking Statements This communication contains "forward-looking statements" within the meaning of and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, TCBI's financial condition, results of operations, business plans and future performance. These statements are not historical in nature and may often be identified by the use of words such as "believes," "projects," "expects," "may," "estimates," "should," "plans," "targets," "intends" "could," "would," "anticipates," "potential," "confident," "optimistic" or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, trends, guidance, expectations and future plans. Because forward-looking statements relate to future results and occurrences, they are subject to inherent and various uncertainties, risks, and changes in circumstances that are difficult to predict, may change over time, are based on management's expectations and assumptions at the time the statements are made and are not guarantees of future results. Numerous risks and other factors, many of which are beyond management's control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. While there can be no assurance that any list of risks is complete, important risks and other factors that could cause actual results to differ materially from those contemplated by forward-looking statements include, but are not limited to: economic or business conditions in Texas, the United States or globally that impact TCBI or its customers; negative credit quality developments arising from the foregoing or other factors; TCBI's ability to effectively manage its liquidity and maintain adequate regulatory capital to support its businesses; TCBI's ability to pursue and execute upon growth plans, whether as a function of capital, liquidity or other limitations; TCBI's ability to successfully execute its business strategy, including developing and executing new lines of business and new products and services; the extensive regulations to which TCBI is subject and its ability to comply with applicable governmental regulations, including legislative and regulatory changes; TCBI's ability to effectively manage information technology systems, including third party vendors, cyber or data privacy incidents or other failures, disruptions or security breaches; elevated or further changes in interest rates, including the impact of interest rates on TCBI's securities portfolio and funding costs, as well as related balance sheet implications stemming from the fair value of our assets and liabilities; the effectiveness of TCBI's risk management processes strategies and monitoring; fluctuations in commercial and residential real estate values, especially as they relate to the value of collateral supporting TCBI's loans; the failure to identify, attract and retain key personnel and other employees; increased or expanded competition from banks and other financial service providers in TCBI's markets; adverse developments in the banking industry and the potential impact of such developments on customer confidence, liquidity and regulatory responses to these developments, including in the context of regulatory examinations and related findings and actions; negative press and social media attention with respect to the banking industry or TCBI, in particular; claims, litigation or regulatory investigations and actions that TCBI may become subject to; severe weather, natural disasters, climate change, acts of war, terrorism, global conflict (including those already reported by the media, as well as others that may arise), or other external events, as well as related legislative and regulatory initiatives; and the risks and factors more fully described in TCBI's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents and filings with the SEC. The information contained in this communication speaks only as of its date. Except to the extent required by applicable law or regulation, we disclaim any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. TEXAS CAPITAL BANCSHARES, INC. SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) (dollars in thousands except per share data)   1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter     2024     2023     2023     2023     2023   CONSOLIDATED STATEMENTS OF INCOME           Interest income $ 417,378   $ 417,072   $ 425,769   $ 401,916   $ 385,166   Interest expense   202,369     202,355     193,698     169,926     149,821   Net interest income   215,009     214,717     232,071     231,990     235,345   Provision for credit losses   19,000     19,000     18,000     7,000     28,000   Net interest income after provision for credit losses   196,009     195,717     214,071     224,990     207,345   Non-interest income   41,319     31,133     46,872     46,011     37,403   Non-interest expense   202,393     201,385     179,891     181,644     194,027   Income before income taxes   34,935     25,465     81,052     89,357     50,721   Income tax expense   8,793     5,315     19,373     20,706     12,060   Net income   26,142     20,150     61,679     68,651     38,661   Preferred stock dividends   4,313     4,312     4,313     4,312     4,313   Net income available to common stockholders $ 21,829   $ 15,838   $ 57,366   $ 64,339   $ 34,348   Diluted earnings per common share $ 0.46   $ 0.33   $ 1.18   $ 1.33   $ 0.70   Diluted common shares   47,711,192     48,097,517     48,528,698     48,421,276     48,880,725               CONSOLIDATED BALANCE SHEET DATA           Total assets $ 29,180,585   $ 28,356,266   $ 29,628,249   $ 28,976,544   $ 28,596,653   Loans held for investment   16,677,691     16,362,230     16,183,882     16,227,203     16,014,497   Loans held for investment, mortgage finance   4,153,313     3,978,328     4,429,489     5,098,812     4,060,570   Loans held for sale   37,750     44,105     155,073     29,097     27,608   Interest bearing cash and cash equivalents   3,148,157     3,042,357     3,975,860     2,587,131     3,385,494   Investment securities   4,414,280     4,143,194     4,069,717     4,226,653     4,345,969   Non-interest bearing deposits   8,478,215     7,328,276     9,352,883     9,429,352     9,500,583   Total deposits   23,954,037     22,371,839     23,878,978     23,318,240     22,179,697   Short-term borrowings   750,000     1,500,000     1,400,000     1,350,000     2,100,000   Long-term debt   859,823     859,147     858,471     857,795     932,119   Stockholders' equity   3,170,662     3,199,142     3,077,700     3,081,927     3,079,974               End of period shares outstanding   46,986,275     47,237,912     48,015,003     47,992,521     47,851,862   Book value per share $ 61.10   $ 61.37   $ 57.85   $ 57.97   $ 58.10   Tangible book value per share(1) $ 61.06   $ 61.34   $ 57.82   $ 57.93   $ 58.06               SELECTED FINANCIAL RATIOS           Net interest margin   3.03 %   2.93 %   3.13 %   3.29 %   3.33 % Return on average assets   0.36 %   0.27 %   0.81 %   0.95 %   0.53 % Return on average common equity   3.03 %   2.25 %   8.08 %   9.17 %   5.06 % Non-interest income to average earning assets   0.59 %   0.43 %   0.64 %   0.66 %   0.54 % Efficiency ratio(2)   79.0 %   81.9 %   64.5 %   65.3 %   71.1 % Non-interest expense to average earning assets   2.89 %   2.79 %   2.46 %   2.61 %   2.78 % Common equity to total assets   9.8 %   10.2 %   9.4 %   9.6 %   9.7 % Tangible common equity to total tangible assets(3)   9.8 %   10.2 %   9.4 %   9.6 %   9.7 % Common Equity Tier 1   12.4 %   12.6 %   12.7 %   12.2 %   12.4 % Tier 1 capital   13.9 %   14.2 %   14.3 %   13.7 %   14.0 % Total capital   16.6 %   17.1 %   17.1 %   16.4 %   16.9 % Leverage   12.4 %   12.2 %   12.1 %   12.4 %   12.0 %   (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' ...