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Texas Capital Bancshares, Inc. Announces First Quarter 2025 Results
Source: Nasdaq GlobeNewswire / 17 Apr 2025 05:00:01 America/Chicago
First quarter 2025 net income of $47.0 million and net income available to common
stockholders of $42.7 million, or $0.92 per diluted shareStrong balance sheet growth with total deposits increasing 9% and total loans growing 7% year-over-year
Book Value and Tangible Book Value(1) per share both increasing 11% year-over-year, reaching record levels
Capital ratios continue to be strong, including 11.6% CET1 and 15.6% Total Capital
DALLAS, April 17, 2025 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the first quarter of 2025.
“We continue to leverage our diversified product suite and financially resilient balance sheet to effectively support our clients’ objectives,” said Rob C. Holmes, Chairman, President & CEO. “With significant year-over-year improvements to many key financial and operating metrics, we remain focused on achieving published financial targets in the back-half of this year.”
1st Quarter 4th Quarter 1st Quarter (dollars in thousands except per share data) 2025 2024 2024 OPERATING RESULTS Net income $ 47,047 $ 71,023 $ 26,142 Net income available to common stockholders $ 42,734 $ 66,711 $ 21,829 Pre-provision net revenue(3) $ 77,458 $ 111,522 $ 53,935 Diluted earnings per common share $ 0.92 $ 1.43 $ 0.46 Diluted common shares 46,616,704 46,770,961 47,711,192 Return on average assets 0.61 % 0.88 % 0.36 % Return on average common equity 5.56 % 8.50 % 3.03 % OPERATING RESULTS, ADJUSTED(2) Net income $ 47,047 $ 71,023 $ 33,898 Net income available to common stockholders $ 42,734 $ 66,711 $ 29,585 Pre-provision net revenue(3) $ 77,458 $ 111,522 $ 63,953 Diluted earnings per common share $ 0.92 $ 1.43 $ 0.62 Diluted common shares 46,616,704 46,770,961 47,711,192 Return on average assets 0.61 % 0.88 % 0.47 % Return on average common equity 5.56 % 8.50 % 4.11 % BALANCE SHEET Loans held for investment $ 17,654,243 $ 17,234,492 $ 16,677,691 Loans held for investment, mortgage finance 4,725,541 5,215,574 4,153,313 Total loans held for investment 22,379,784 22,450,066 20,831,004 Loans held for sale — — 37,750 Total assets 31,375,749 30,731,883 29,180,585 Non-interest bearing deposits 7,874,780 7,485,428 8,478,215 Total deposits 26,053,034 25,238,599 23,954,037 Stockholders’ equity 3,429,774 3,367,936 3,170,662 (1) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(2) These adjusted measures are non-GAAP measures. Please refer to “GAAP to Non-GAAP Reconciliations” for the computations of these adjusted measures and the reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.
(3) Net interest income plus non-interest income, less non-interest expense.FIRST QUARTER 2025 COMPARED TO FOURTH QUARTER 2024
For the first quarter of 2025, net income available to common stockholders was $42.7 million, or $0.92 per diluted share, compared to $66.7 million, or $1.43 per diluted share, for the fourth quarter of 2024.
Provision for credit losses for the first quarter of 2025 was $17.0 million, compared to $18.0 million for the fourth quarter of 2024. The $17.0 million provision for credit losses recorded in the first quarter of 2025 resulted primarily from an increase in criticized loans and $9.8 million in net charge-offs, as well as uncertainty in the economic outlook.
Net interest income was $236.0 million for the first quarter of 2025, compared to $229.6 million for the fourth quarter of 2024, as a decrease in funding costs was partially offset by a decrease in average earning assets. Net interest margin for the first quarter of 2025 was 3.19%, an increase of 26 basis points from the fourth quarter of 2024. LHI, excluding mortgage finance, yields increased 3 basis points from the fourth quarter of 2024 and LHI, mortgage finance, yields increased 20 basis points from the fourth quarter of 2024. Total cost of deposits was 2.76% for the first quarter of 2025, a 5 basis point decrease from the fourth quarter of 2024.
Non-interest income for the first quarter of 2025 decreased $9.6 million compared to the fourth quarter of 2024 primarily due to a decrease in investment banking and advisory fees.
Non-interest expense for the first quarter of 2025 increased $30.9 million, or 18%, compared to the fourth quarter of 2024, 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.
FIRST QUARTER 2025 COMPARED TO FIRST QUARTER 2024
Net income available to common stockholders was $42.7 million, or $0.92 per diluted share, for the first quarter of 2025, compared to $21.8 million, or $0.46 per diluted share, for the first quarter of 2024.
The first quarter of 2025 included a $17.0 million provision for credit losses, reflecting an increase in criticized loans, $9.8 million in net charge-offs and uncertainty in the economic outlook, compared to a $19.0 million provision for credit losses for the first quarter of 2024.
Net interest income increased to $236.0 million for the first quarter of 2025, compared to $215.0 million for the first quarter of 2024, primarily due to an increase in average total LHI and a decrease in funding costs, partially offset by an increase in average interest bearing liabilities and a decrease in earning asset yields. Net interest margin increased 16 basis points to 3.19% for the first quarter of 2025, as compared to the first quarter of 2024. LHI, excluding mortgage finance, yields decreased 41 basis points compared to the first quarter of 2024 and LHI, mortgage finance yields increased 33 basis points from the first quarter of 2024. Total cost of deposits decreased 21 basis points compared to the first quarter of 2024.
Non-interest income for the first quarter of 2025 increased $3.1 million compared to the first quarter of 2024 primarily due to increases in service charges on deposit accounts, trading income and other non-interest income, partially offset by a decrease in investment banking and advisory fees.
Non-interest expense for the first quarter of 2025 increased $627,000 compared to the first quarter of 2024, primarily due to increases in salaries and benefits and communications and technology expense, partially offset by a decrease in Federal Deposit Insurance Corporation (“FDIC”) expense. The first quarter of 2024 included $3.0 million in additional FDIC special assessment expense.
CREDIT QUALITY
Net charge-offs of $9.8 million were recorded during the first quarter of 2025, compared to net charge-offs of $12.1 million and $10.8 million during the fourth quarter of 2024 and the first quarter of 2024, respectively. Criticized loans totaled $762.9 million at March 31, 2025, compared to $714.0 million at December 31, 2024 and $859.5 million at March 31, 2024. Non-accrual LHI totaled $93.6 million at March 31, 2025, compared to $111.2 million at December 31, 2024 and $92.8 million at March 31, 2024. The ratio of non-accrual LHI to total LHI for the first quarter of 2025 was 0.42%, compared to 0.50% for the fourth quarter of 2024 and 0.45% for the first quarter of 2024. The ratio of total allowance for credit losses to total LHI was 1.48% at March 31, 2025, compared to 1.45% and 1.46% at December 31, 2024 and March 31, 2024, respectively.
REGULATORY RATIOS AND CAPITAL
All regulatory ratios continue to be in excess of “well capitalized” requirements as of March 31, 2025. CET1, tier 1 capital, total capital and leverage ratios were 11.6%, 13.1%, 15.6% and 11.8%, respectively, at March 31, 2025, compared to 11.4%, 12.8%, 15.4% and 11.3%, respectively, at December 31, 2024 and 12.4%, 13.9%, 16.6% and 12.4%, respectively, at March 31, 2024. At March 31, 2025, our ratio of tangible common equity to total tangible assets was 10.0%, compared to 10.0% at December 31, 2024 and 9.8% at March 31, 2024.
During the first quarter of 2025, the Company repurchased 396,106 shares of its common stock for an aggregate purchase price, including excise tax expense, of $31.2 million, at a weighted average price of $78.25 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 parent company of Texas Capital Bank (“TCB”). Texas Capital is the collective brand name for TCB and its separate, non-bank affiliates and wholly-owned subsidiaries. Texas Capital is a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs and individual customers. Founded in 1998, the institution is headquartered in Dallas with offices in Austin, Houston, San Antonio, and Fort Worth, and has built a network of clients across the country. With the ability to service clients through their entire lifecycles, Texas Capital 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, including recent trade policies and their impact on our customers; 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 its strategic plan and developing and executing new lines of business and new products and services and potential strategic acquisitions; 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; TCBI’s ability to use technology to provide products and services to its customers; risks related to the development and use of artificial intelligence; 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; 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 2025 2024 2024 2024 2024 CONSOLIDATED STATEMENTS OF INCOME Interest income $ 427,289 $ 437,571 $ 452,533 $ 422,068 $ 417,378 Interest expense 191,255 207,964 212,431 205,486 202,369 Net interest income 236,034 229,607 240,102 216,582 215,009 Provision for credit losses 17,000 18,000 10,000 20,000 19,000 Net interest income after provision for credit losses 219,034 211,607 230,102 196,582 196,009 Non-interest income 44,444 54,074 (114,771 ) 50,424 41,319 Non-interest expense 203,020 172,159 195,324 188,409 202,393 Income/(loss) before income taxes 60,458 93,522 (79,993 ) 58,597 34,935 Income tax expense/(benefit) 13,411 22,499 (18,674 ) 16,935 8,793 Net income/(loss) 47,047 71,023 (61,319 ) 41,662 26,142 Preferred stock dividends 4,313 4,312 4,313 4,312 4,313 Net income/(loss) available to common stockholders $ 42,734 $ 66,711 $ (65,632 ) $ 37,350 $ 21,829 Diluted earnings/(loss) per common share $ 0.92 $ 1.43 $ (1.41 ) $ 0.80 $ 0.46 Diluted common shares 46,616,704 46,770,961 46,608,742 46,872,498 47,711,192 CONSOLIDATED BALANCE SHEET DATA Total assets $ 31,375,749 $ 30,731,883 $ 31,629,299 $ 29,854,994 $ 29,180,585 Loans held for investment 17,654,243 17,234,492 16,764,512 16,700,569 16,677,691 Loans held for investment, mortgage finance 4,725,541 5,215,574 5,529,659 5,078,161 4,153,313 Loans held for sale — — 9,022 36,785 37,750 Interest bearing cash and cash equivalents 3,600,969 3,012,307 3,894,537 2,691,352 3,148,157 Investment securities 4,531,219 4,396,115 4,405,520 4,388,976 4,414,280 Non-interest bearing deposits 7,874,780 7,485,428 9,070,804 7,987,715 8,478,215 Total deposits 26,053,034 25,238,599 25,865,255 23,818,327 23,954,037 Short-term borrowings 750,000 885,000 1,035,000 1,675,000 750,000 Long-term debt 660,521 660,346 660,172 659,997 859,823 Stockholders’ equity 3,429,774 3,367,936 3,354,044 3,175,601 3,170,662 End of period shares outstanding 46,024,933 46,233,812 46,207,757 46,188,078 46,986,275 Book value per share $ 68.00 $ 66.36 $ 66.09 $ 62.26 $ 61.10 Tangible book value per share(1) $ 67.97 $ 66.32 $ 66.06 $ 62.23 $ 61.06 SELECTED FINANCIAL RATIOS Net interest margin 3.19 % 2.93 % 3.16 % 3.01 % 3.03 % Return on average assets 0.61 % 0.88 % (0.78 )% 0.56 % 0.36 % Return on average assets, adjusted(4) 0.61 % 0.88 % 1.00 % 0.57 % 0.47 % Return on average common equity 5.56 % 8.50 % (8.87 )% 5.26 % 3.03 % Return on average common equity, adjusted(4) 5.56 % 8.50 % 10.04 % 5.31 % 4.11 % Efficiency ratio(2) 72.4 % 60.7 % 155.8 % 70.6 % 79.0 % Efficiency ratio, adjusted(2)(4) 72.4 % 60.7 % 62.3 % 70.4 % 75.1 % Non-interest income to average earning assets 0.60 % 0.69 % (1.52 )% 0.71 % 0.59 % Non-interest income to average earning assets, adjusted(4) 0.60 % 0.69 % 0.86 % 0.71 % 0.59 % Non-interest expense to average earning assets 2.75 % 2.21 % 2.59 % 2.65 % 2.89 % Non-interest expense to average earning assets, adjusted(4) 2.75 % 2.21 % 2.52 % 2.65 % 2.74 % Common equity to total assets 10.0 % 10.0 % 9.7 % 9.6 % 9.8 % Tangible common equity to total tangible assets(3) 10.0 % 10.0 % 9.7 % 9.6 % 9.8 % Common Equity Tier 1 11.6 % 11.4 % 11.2 % 11.6 % 12.4 % Tier 1 capital 13.1 % 12.8 % 12.6 % 13.1 % 13.9 % Total capital 15.6 % 15.4 % 15.2 % 15.7 % 16.6 % Leverage 11.8 % 11.3 % 11.4 % 12.2 % 12.4 % (1) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(2) Non-interest expense divided by the sum of net interest income and non-interest income.
(3) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by total assets, less goodwill and intangibles.
(4) These adjusted measures are non-GAAP measures. Please refer to “GAAP to Non-GAAP Reconciliations” for the computations of these adjusted measures and the reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.TEXAS CAPITAL BANCSHARES, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) (dollars in thousands) March 31,
2025December 31,
2024September 30,
2024June 30,
2024March 31,
2024Assets Cash and due from banks $ 201,504 $ 176,501 $ 297,048 $ 221,727 $ 167,985 Interest bearing cash and cash equivalents 3,600,969 3,012,307 3,894,537 2,691,352 3,148,157 Available-for-sale debt securities 3,678,378 3,524,686 3,518,662 3,483,231 3,491,510 Held-to-maturity debt securities 779,354 796,168 812,432 831,513 849,283 Equity securities 71,679 75,261 74,426 74,232 73,487 Trading securities 1,808 — — — — Investment securities 4,531,219 4,396,115 4,405,520 4,388,976 4,414,280 Loans held for sale — — 9,022 36,785 37,750 Loans held for investment, mortgage finance 4,725,541 5,215,574 5,529,659 5,078,161 4,153,313 Loans held for investment 17,654,243 17,234,492 16,764,512 16,700,569 16,677,691 Less: Allowance for credit losses on loans 278,379 271,709 273,143 267,297 263,962 Loans held for investment, net 22,101,405 22,178,357 22,021,028 21,511,433 20,567,042 Premises and equipment, net 84,575 85,443 81,577 69,464 49,899 Accrued interest receivable and other assets 854,581 881,664 919,071 933,761 793,976 Goodwill and intangibles, net 1,496 1,496 1,496 1,496 1,496 Total assets $ 31,375,749 $ 30,731,883 $ 31,629,299 $ 29,854,994 $ 29,180,585 Liabilities and Stockholders’ Equity Liabilities: Non-interest bearing deposits $ 7,874,780 $ 7,485,428 $ 9,070,804 $ 7,987,715 $ 8,478,215 Interest bearing deposits 18,178,254 17,753,171 16,794,451 15,830,612 15,475,822 Total deposits 26,053,034 25,238,599 25,865,255 23,818,327 23,954,037 Accrued interest payable 25,270 23,680 18,679 23,841 32,352 Other liabilities 457,150 556,322 696,149 502,228 413,711 Short-term borrowings 750,000 885,000 1,035,000 1,675,000 750,000 Long-term debt 660,521 660,346 660,172 659,997 859,823 Total liabilities 27,945,975 27,363,947 28,275,255 26,679,393 26,009,923 Stockholders’ equity: Preferred stock, $.01 par value, $1,000 liquidation value: Authorized shares - 10,000,000 Issued shares(1) 300,000 300,000 300,000 300,000 300,000 Common stock, $.01 par value: Authorized shares - 100,000,000 Issued shares(2) 517 515 515 515 514 Additional paid-in capital 1,060,028 1,056,719 1,054,614 1,050,114 1,044,669 Retained earnings 2,538,385 2,495,651 2,428,940 2,494,572 2,457,222 Treasury stock(3) (332,994 ) (301,842 ) (301,868 ) (301,868 ) (251,857 ) Accumulated other comprehensive loss, net of taxes (136,162 ) (183,107 ) (128,157 ) (367,732 ) (379,886 ) Total stockholders’ equity 3,429,774 3,367,936 3,354,044 3,175,601 3,170,662 Total liabilities and stockholders’ equity $ 31,375,749 $ 30,731,883 $ 31,629,299 $ 29,854,994 $ 29,180,585 (1)Preferred stock - issued shares 300,000 300,000 300,000 300,000 300,000 (2)Common stock - issued shares 51,707,542 51,520,315 51,494,260 51,474,581 51,420,680 (3)Treasury stock - shares at cost 5,682,609 5,286,503 5,286,503 5,286,503 4,434,405 TEXAS CAPITAL BANCSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in thousands except per share data) Three Months Ended March 31, 2025 2024 Interest income Interest and fees on loans $ 334,150 $ 330,879 Investment securities 46,565 32,144 Interest bearing cash and cash equivalents 46,574 54,355 Total interest income 427,289 417,378 Interest expense Deposits 174,936 175,600 Short-term borrowings 8,246 12,783 Long-term debt 8,073 13,986 Total interest expense 191,255 202,369 Net interest income 236,034 215,009 Provision for credit losses 17,000 19,000 Net interest income after provision for credit losses 219,034 196,009 Non-interest income Service charges on deposit accounts 7,840 6,339 Wealth management and trust fee income 3,964 3,567 Brokered loan fees 1,949 1,911 Investment banking and advisory fees 16,478 18,424 Trading income 5,939 4,712 Other 8,274 6,366 Total non-interest income 44,444 41,319 Non-interest expense Salaries and benefits 131,641 128,727 Occupancy expense 10,844 9,737 Marketing 5,009 6,036 Legal and professional 14,989 16,195 Communications and technology 23,642 21,114 Federal Deposit Insurance Corporation insurance assessment 5,341 8,421 Other 11,554 12,163 Total non-interest expense 203,020 202,393 Income before income taxes 60,458 34,935 Income tax expense 13,411 8,793 Net income 47,047 26,142 Preferred stock dividends 4,313 4,313 Net income available to common stockholders $ 42,734 $ 21,829 Basic earnings per common share $ 0.93 $ 0.46 Diluted earnings per common share $ 0.92 $ 0.46 TEXAS CAPITAL BANCSHARES, INC. SUMMARY OF CREDIT LOSS EXPERIENCE (dollars in thousands) 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 2025 2024 2024 2024 2024 Allowance for credit losses on loans: Beginning balance $ 271,709 $ 273,143 $ 267,297 $ 263,962 $ 249,973 Allowance established for acquired purchase credit deterioration loans — — 2,579 — — Loans charged-off: Commercial 10,197 14,100 6,120 9,997 7,544 Commercial real estate 500 2,566 262 2,111 3,325 Consumer — — 30 — — Total charge-offs 10,697 16,666 6,412 12,108 10,869 Recoveries: Commercial 483 4,562 329 153 105 Commercial real estate 413 18 — — — Consumer 4 15 — — — Total recoveries 900 4,595 329 153 105 Net charge-offs 9,797 12,071 6,083 11,955 10,764 Provision for credit losses on loans 16,467 10,637 9,350 15,290 24,753 Ending balance $ 278,379 $ 271,709 $ 273,143 $ 267,297 $ 263,962 Allowance for off-balance sheet credit losses: Beginning balance $ 53,332 $ 45,969 $ 45,319 $ 40,609 $ 46,362 Provision for off-balance sheet credit losses 533 7,363 650 4,710 (5,753 ) Ending balance $ 53,865 $ 53,332 $ 45,969 $ 45,319 $ 40,609 Total allowance for credit losses $ 332,244 $ 325,041 $ 319,112 $ 312,616 $ 304,571 Total provision for credit losses $ 17,000 $ 18,000 $ 10,000 $ 20,000 $ 19,000 Allowance for credit losses on loans to total loans held for investment 1.24 % 1.21 % 1.23 % 1.23 % 1.27 % Allowance for credit losses on loans to average total loans held for investment 1.29 % 1.22 % 1.24 % 1.27 % 1.32 % Net charge-offs to average total loans held for investment(1) 0.18 % 0.22 % 0.11 % 0.23 % 0.22 % Net charge-offs to average total loans held for investment for last 12 months(1) 0.18 % 0.19 % 0.20 % 0.22 % 0.20 % Total provision for credit losses to average total loans held for investment(1) 0.32 % 0.32 % 0.18 % 0.38 % 0.38 % Total allowance for credit losses to total loans held for investment 1.48 % 1.45 % 1.43 % 1.44 % 1.46 % (1) Interim period ratios are annualized.
TEXAS CAPITAL BANCSHARES, INC. NON-PERFORMING ASSETS, PAST DUE LOANS AND CRITICIZED LOANS (dollars in thousands) 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 2025 2024 2024 2024 2024 NON-PERFORMING ASSETS Non-accrual loans held for investment $ 93,565 $ 111,165 $ 88,960 $ 85,021 $ 92,849 Non-accrual loans held for sale(1) — — — — 9,250 Other real estate owned — — — — — Total non-performing assets $ 93,565 $ 111,165 $ 88,960 $ 85,021 $ 102,099 Non-accrual loans held for investment to total loans held for investment 0.42 % 0.50 % 0.40 % 0.39 % 0.45 % Total non-performing assets to total assets 0.30 % 0.36 % 0.28 % 0.28 % 0.35 % Allowance for credit losses on loans to non-accrual loans held for investment 3.0x 2.4x 3.1x 3.1x 2.8x Total allowance for credit losses to non-accrual loans held for investment 3.6x 2.9x 3.6x 3.7x 3.3x LOANS PAST DUE Loans held for investment past due 90 days and still accruing $ 791 $ 4,265 $ 5,281 $ 286 $ 3,674 Loans held for investment past due 90 days to total loans held for investment — % 0.02 % 0.02 % — % 0.02 % Loans held for sale past due 90 days and still accruing $ — $ — $ — $ 64 $ 147 CRITICIZED LOANS Criticized loans $ 762,887 $ 713,951 $ 897,727 $ 859,671 $ 859,539 Criticized loans to total loans held for investment 3.41 % 3.18 % 4.03 % 3.95 % 4.13 % Special mention loans $ 484,165 $ 435,626 $ 579,802 $ 593,305 $ 584,528 Special mention loans to total loans held for investment 2.16 % 1.94 % 2.60 % 2.72 % 2.81 % (1) First quarter 2024 includes one non-accrual loan previously reported in loans held for investment that was transferred at fair value to held for sale as of March 31, 2024.
TEXAS CAPITAL BANCSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in thousands) 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 2025 2024 2024 2024 2024 Interest income Interest and fees on loans $ 334,150 $ 340,388 $ 361,407 $ 345,251 $ 330,879 Investment securities 46,565 44,102 38,389 33,584 32,144 Interest bearing deposits in other banks 46,574 53,081 52,737 43,233 54,355 Total interest income 427,289 437,571 452,533 422,068 417,378 Interest expense Deposits 174,936 189,061 190,255 181,280 175,600 Short-term borrowings 8,246 10,678 13,784 12,749 12,783 Long-term debt 8,073 8,225 8,392 11,457 13,986 Total interest expense 191,255 207,964 212,431 205,486 202,369 Net interest income 236,034 229,607 240,102 216,582 215,009 Provision for credit losses 17,000 18,000 10,000 20,000 19,000 Net interest income after provision for credit losses 219,034 211,607 230,102 196,582 196,009 Non-interest income Service charges on deposit accounts 7,840 6,989 6,307 5,911 6,339 Wealth management and trust fee income 3,964 4,009 4,040 3,699 3,567 Brokered loan fees 1,949 2,519 2,400 2,131 1,911 Investment banking and advisory fees 16,478 26,740 34,753 25,048 18,424 Trading income 5,939 5,487 5,786 5,650 4,712 Available-for-sale debt securities losses, net — — (179,581 ) — — Other 8,274 8,330 11,524 7,985 6,366 Total non-interest income 44,444 54,074 (114,771 ) 50,424 41,319 Non-interest expense Salaries and benefits 131,641 97,873 121,138 118,840 128,727 Occupancy expense 10,844 11,926 12,937 10,666 9,737 Marketing 5,009 4,454 5,863 5,996 6,036 Legal and professional 14,989 15,180 11,135 11,273 16,195 Communications and technology 23,642 24,007 25,951 22,013 21,114 Federal Deposit Insurance Corporation insurance assessment 5,341 4,454 4,906 5,570 8,421 Other 11,554 14,265 13,394 14,051 12,163 Total non-interest expense 203,020 172,159 195,324 188,409 202,393 Income/(loss) before income taxes 60,458 93,522 (79,993 ) 58,597 34,935 Income tax expense/(benefit) 13,411 22,499 (18,674 ) 16,935 8,793 Net income/(loss) 47,047 71,023 (61,319 ) 41,662 26,142 Preferred stock dividends 4,313 4,312 4,313 4,312 4,313 Net income/(loss) available to common shareholders $ 42,734 $ 66,711 $ (65,632 ) $ 37,350 $ 21,829 TEXAS CAPITAL BANCSHARES, INC. TAXABLE EQUIVALENT NET INTEREST INCOME ANALYSIS (UNAUDITED)(1) (dollars in thousands) 1st Quarter 2025 4th Quarter 2024 1st Quarter 2024 Average
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BalanceIncome/
ExpenseYield/
RateAssets Investment securities(2) $ 4,463,876 $ 46,565 4.10 % $ 4,504,101 $ 44,102 3.79 % $ 4,299,368 $ 32,144 2.77 % Interest bearing cash and cash equivalents 4,255,796 46,574 4.44 % 4,472,772 53,081 4.72 % 4,051,627 54,355 5.40 % Loans held for sale 335 2 2.97 % — — — % 51,164 1,184 9.31 % Loans held for investment, mortgage finance 3,972,106 38,527 3.93 % 5,409,980 50,685 3.73 % 3,517,707 31,455 3.60 % Loans held for investment(3) 17,527,070 296,091 6.85 % 16,919,925 289,916 6.82 % 16,522,089 298,306 7.26 % Less: Allowance for credit losses on loans 272,758 — — % 272,975 — — 249,936 — — % Loans held for investment, net 21,226,418 334,618 6.39 % 22,056,930 340,601 6.14 % 19,789,860 329,761 6.70 % Total earning assets 29,946,425 427,759 5.76 % 31,033,803 437,784 5.59 % 28,192,019 417,444 5.88 % Cash and other assets 1,157,184 1,178,284 1,058,463 Total assets $ 31,103,609 $ 32,212,087 $ 29,250,482 Liabilities and Stockholders’ Equity Transaction deposits $ 2,163,250 $ 13,908 2.61 % $ 2,141,739 $ 15,403 2.86 % $ 2,006,493 $ 16,858 3.38 % Savings deposits 13,357,243 133,577 4.06 % 12,932,458 144,393 4.44 % 11,409,677 136,790 4.82 % Time deposits 2,329,384 27,451 4.78 % 2,331,009 29,265 4.99 % 1,719,325 21,952 5.14 % Total interest bearing deposits 17,849,877 174,936 3.97 % 17,405,206 189,061 4.32 % 15,135,495 175,600 4.67 % Short-term borrowings 751,500 8,246 4.45 % 883,326 10,678 4.81 % 912,088 12,783 5.64 % Long-term debt 660,445 8,073 4.96 % 660,270 8,225 4.96 % 859,509 13,986 6.54 % Total interest bearing liabilities 19,261,822 191,255 4.03 % 18,948,802 207,964 4.37 % 16,907,092 202,369 4.81 % Non-interest bearing deposits 7,875,244 9,319,711 8,637,775 Other liabilities 552,154 522,641 509,286 Stockholders’ equity 3,414,389 3,420,933 3,196,329 Total liabilities and stockholders’ equity $ 31,103,609 $ 32,212,087 $ 29,250,482 Net interest income $ 236,504 $ 229,820 $ 215,075 Net interest margin 3.19 % 2.93 % 3.03 % (1) Taxable equivalent rates used where applicable.
(2) Yields on investment securities are calculated using available-for-sale securities at amortized cost.
(3) Average balances include non-accrual loans.GAAP TO NON-GAAP RECONCILIATIONS
The following items are non-GAAP financial measures: adjusted non-interest income, adjusted non-interest expense, adjusted net income, adjusted net income available to common stockholders, adjusted pre-provision net revenue (“PPNR”), adjusted diluted earnings/(loss) per common share, adjusted return on average assets, adjusted return on average common equity, adjusted efficiency ratio, adjusted non-interest income to average earning assets and adjusted non-interest expense to average earning assets. These are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. The table below provides a reconciliation of these non-GAAP financial measures to the most comparable GAAP measures.
These non-GAAP financial measures are adjusted for certain items, listed below, that management believes are non-operating in nature and not representative of its actual operating performance. Management believes that these non-GAAP financial measures provide meaningful additional information about Texas Capital Bancshares, Inc. to assist management and investors in evaluating operating results, financial strength, business performance and capital position. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. As such, these non-GAAP financial measures should not be considered in isolation or as a substitute for analyses of operating results or capital position as reported under GAAP.
Reconciliation of Non-GAAP Financial Measures (dollars in thousands except per share data) 1st Quarter
20254th Quarter
20243rd Quarter
20242nd Quarter
20241st Quarter
2024Net interest income $ 236,034 $ 229,607 $ 240,102 $ 216,582 $ 215,009 Non-interest income 44,444 54,074 (114,771 ) 50,424 41,319 Available-for-sale debt securities losses, net — — 179,581 — — Non-interest income, adjusted 44,444 54,074 64,810 50,424 41,319 Non-interest expense 203,020 172,159 195,324 188,409 202,393 FDIC special assessment — — 651 (462 ) (3,000 ) Restructuring expenses — — (5,923 ) — (2,018 ) Legal Settlement — — — — (5,000 ) Non-interest expense, adjusted 203,020 172,159 190,052 187,947 192,375 Provision for credit losses 17,000 18,000 10,000 20,000 19,000 Income tax expense/(benefit) 13,411 22,499 (18,674 ) 16,935 8,793 Tax effect of adjustments — — 44,880 104 2,262 Income tax expense/(benefit), adjusted 13,411 22,499 26,206 17,039 11,055 Net income/(loss)(1) $ 47,047 $ 71,023 $ (61,319 ) $ 41,662 $ 26,142 Net income/(loss), adjusted(1) $ 47,047 $ 71,023 $ 78,654 $ 42,020 $ 33,898 Preferred stock dividends 4,313 4,312 4,313 4,312 4,313 Net income/(loss) to common stockholders(2) $ 42,734 $ 66,711 $ (65,632 ) $ 37,350 $ 21,829 Net income/(loss) to common stockholders, adjusted(2) $ 42,734 $ 66,711 $ 74,341 $ 37,708 $ 29,585 PPNR(3) $ 77,458 $ 111,522 $ (69,993 ) $ 78,597 $ 53,935 PPNR(3), adjusted $ 77,458 $ 111,522 $ 114,860 $ 79,059 $ 63,953 Weighted average common shares outstanding, diluted 46,616,704 46,770,961 46,608,742 46,872,498 47,711,192 Diluted earnings/(loss) per common share $ 0.92 $ 1.43 $ (1.41 ) $ 0.80 $ 0.46 Diluted earnings/(loss) per common share, adjusted $ 0.92 $ 1.43 $ 1.59 $ 0.80 $ 0.62 Average total assets $ 31,103,609 $ 32,212,087 $ 31,215,173 $ 29,750,852 $ 29,250,482 Return on average assets 0.61 % 0.88 % (0.78 )% 0.56 % 0.36 % Return on average assets, adjusted 0.61 % 0.88 % 1.00 % 0.57 % 0.47 % Average common equity $ 3,114,389 $ 3,120,933 $ 2,945,238 $ 2,857,661 $ 2,896,329 Return on average common equity 5.56 % 8.50 % (8.87 )% 5.26 % 3.03 % Return on average common equity, adjusted 5.56 % 8.50 % 10.04 % 5.31 % 4.11 % Efficiency ratio(4) 72.4 % 60.7 % 155.8 % 70.6 % 79.0 % Efficiency ratio, adjusted(4) 72.4 % 60.7 % 62.3 % 70.4 % 75.1 % Average earning assets $ 29,946,425 $ 31,033,803 $ 29,975,318 $ 28,573,791 $ 28,192,019 Non-interest income to average earning assets 0.60 % 0.69 % (1.52 )% 0.71 % 0.59 % Non-interest income to average earning assets, adjusted 0.60 % 0.69 % 0.86 % 0.71 % 0.59 % Non-interest expense to average earning assets 2.75 % 2.21 % 2.59 % 2.65 % 2.89 % Non-interest expense to average earning assets, adjusted 2.75 % 2.21 % 2.52 % 2.65 % 2.74 % (1) Net interest income plus non-interest income, less non-interest expense, provision for credit losses and income tax expense/(benefit). On an adjusted basis, net interest income plus non-interest income, adjusted, less non-interest expense, adjusted, provision for credit losses and income tax expense/(benefit), adjusted.
(2) Net income/(loss), less preferred stock dividends. On an adjusted basis, net income/(loss), adjusted, less preferred stock dividends.
(3) Net interest income plus non-interest income, less non-interest expense. On an adjusted basis, net interest income plus non-interest income, adjusted, less non-interest expense, adjusted.
(4) Non-interest expense divided by the sum of net interest income and non-interest income. On an adjusted basis, non-interest expense, adjusted, divided by the sum of net interest income and non-interest income, adjusted.
INVESTOR CONTACT Jocelyn Kukulka, 469.399.8544 jocelyn.kukulka@texascapitalbank.com MEDIA CONTACT Julia Monter, 469.399.8425 julia.monter@texascapitalbank.com
