Texas Capital Bancshares Announces Operating Results for 2012

  Texas Capital Bancshares Announces Operating Results for 2012

Business Wire

DALLAS -- January 23, 2013

Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas
Capital Bank, announced earnings and operating results for the fourth quarter
and full year of 2012.

  *Net income increased 59% for the year, 3% decrease on a linked quarter
    basis (4% increase excluding litigation settlement) and 22% increase for
    the fourth quarter of 2012 as compared to the same quarter of 2011
  *EPS increased 51% for the year, 5% decrease on a linked quarter basis (3%
    increase excluding litigation settlement) and 13% increase for the fourth
    quarter of 2012 as compared to the same quarter of 2011
  *Results for the fourth quarter and 2012 include a pre-tax charge of $4.0
    million, or $0.06 per share after-tax, related to settlement of litigation
  *Demand deposits increased 45% and total deposits increased 34% from 2011;
    linked quarter increases of 20% and 11%, respectively
  *Loans held for investment increased 22% and total loans increased 30% from
    2011, reflecting linked quarter increases of 4% and 6%, respectively

“I am very pleased with the operating results we achieved both for this
quarter and for the full year,” said George Jones, CEO. “Our growth continues,
and we are confident in our ability to continue to generate industry-leading
results.”

FINANCIAL SUMMARY                                                
(dollars and shares in thousands)
                                                                     
                                    2012            2011           % Change
ANNUAL OPERATING RESULTS^(1)
Net Income                          $ 120,709        $ 76,102        59   %
Diluted EPS                         $ 3.01           $ 1.99          51   %
ROA                                   1.35       %     1.12      %
ROE                                   16.93      %     13.39     %
Diluted Shares                        40,166           38,333
                                                                     
QUARTERLY OPERATING RESULTS^(1)
Net Income                          $ 31,435         $ 25,745        22   %
Diluted EPS                         $ .76            $ .67           13   %
ROA                                   1.27       %     1.28      %
ROE                                   15.35      %     17.05     %
Diluted Shares                        41,505           38,609
                                                                     
BALANCE SHEET^(1)
Total Assets                        $ 10,540,542     $ 8,137,225     30   %
Demand Deposits                       2,535,375        1,751,944     45   %
Total Deposits                        7,440,804        5,556,257     34   %
Loans Held for Investment             6,785,535        5,572,371     22   %
Loans Held for Sale                   3,175,272        2,080,081     53   %
Total Loans                           9,960,807        7,652,452     30   %
Stockholders’ Equity                  836,242          616,331       36   %

(1) Operating results, assets and loans are reporting from continuing
operations

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income from continuing operations
of $120.7 million for the year ended December 31, 2012 compared to $76.1
million in 2011. For the fourth quarter of 2012, we earned $31.4 million
compared to $25.7 million for the same period in 2011. On a fully diluted
basis, earnings per common share from continuing operations were $3.01 for the
year ended December 31, 2012, compared to $1.99 for 2011. For the fourth
quarter of 2012, diluted earnings per share was $.76 compared to $.67 for the
same period in 2011. Results for the fourth quarter of 2012 include a charge
of $4.0 million related to settlement of litigation. The discussion below
relates only to continuing operations.

Return on average equity was 16.93 percent and return on average assets was
1.35 percent for the year ended December 31, 2012, compared to 13.39 percent
and 1.12 percent, respectively, 2011. Return on average equity was 15.35
percent and return on average assets was 1.27 percent for the fourth quarter
of 2012, compared to 17.05 percent and 1.28 percent, respectively, for the
fourth quarter of 2011.

Net interest income was $101.2 million for the fourth quarter of 2012,
compared to $96.9 million in the third quarter of 2012 and $88.1 million for
the fourth quarter of 2011. For 2012, net interest income reached $376.9
million compared to $302.9 million in 2011. The net interest margin in the
fourth quarter of 2012 was 4.27 percent, a 33 basis point decrease from the
fourth quarter of 2011 and a 9 basis point decrease from the third quarter of
2012. The year-to-date and quarter-to-date year over year decreases in net
interest margin are due to the growth in loans with lower yields with an
offsetting benefit of the reduction in funding costs. The growth in loans more
than compensated for the reduction in yields and produced the strong growth in
net interest income.

Average loans held for investment for the year ended December 31, 2012 were
$6.1 billion, an increase of $1.1 billion, or 22 percent, from 2011. Average
loans held for sale for the year ended December 31, 2012 were $2.3 billion, an
increase of $1.1 billion, or 90 percent. Average loans held for investment for
the fourth quarter of 2012 were $6.7 billion, an increase of $1.3 billion, or
23 percent, from the fourth quarter of 2011 and an increase of $349.6 million,
or 6 percent, from the third quarter of 2012. Average loans held for sale for
the fourth quarter of 2012 increased $564.2 million to $2.7 billion compared
to the fourth quarter of 2011 and increased $226.1 million from the third
quarter of 2012.

Average total deposits for the fourth quarter of 2012 increased $1.4 billion
from the fourth quarter of 2011 and increased $358.4 million from the third
quarter of 2012. For the same periods, the average balance of demand deposits
increased $697.6 million, or 42 percent, to $2.4 billion from $1.7 billion
during the fourth quarter of 2011 and increased $346.1 million, or 17 percent,
from the third quarter of 2012.

In the fourth quarter of 2012, we experienced decreases in the levels of
non-performing assets. Credit costs, including the provision for credit losses
and valuation charges related to other real estate owned (“OREO”) totaled $5.5
million in the fourth quarter of 2012 compared to $7.1 million in the fourth
quarter of 2011 and $3.1 million in the third quarter of 2012. We recorded a
$4.5 million provision for credit losses in the fourth quarter of 2012
compared to $6.0 million in the fourth quarter of 2011 and $3.0 million in the
third quarter of 2012. For 2012, the total provision for loan losses was $11.5
million, a decrease of 60 percent from $28.5 million in 2011. At December 31,
2012, the combined reserve decreased to 1.15 percent of loans held for
investment as compared to 1.31 percent at December 31, 2011 and 1.18 percent
at September 30, 2012. In management’s opinion, the reserve is appropriate and
is derived from consistent application of the methodology for establishing the
adequacy of reserves for Texas Capital Bank’s loan portfolio. In the fourth
quarter of 2012, net charge-offs were $3.5 million compared to net charge-offs
of $3.4 million in the fourth quarter of 2011 and net charge-offs of $1.2
million in the third quarter of 2012. For 2012, net charge-offs were $6.1
million, 0.10 percent of average loans held for investment, compared to $29.2
million and a ratio of 0.58 percent in 2011. Non-accrual loans were $55.8
million, or .82 percent of loans held for investment at the end of the fourth
quarter of 2012, $54.6 million, or .98 percent, at the end of the fourth
quarter of 2011 and $57.3 million, or .87 percent, at the end of the third
quarter 2012. At December 31, 2012, total OREO was $16.0 million compared to
$34.1 million at the end of the fourth quarter of 2011, and $19.1 million at
the end of the third quarter of 2012. The OREO balance of $16.0 million at
December 31, 2012 is stated net of a $5.6 million valuation allowance. The
valuation charge for OREO reflected in non-interest expense was $955,000 in
the fourth quarter of 2012 compared to $1.1 million in the fourth quarter of
2011 and $64,000 in the third quarter of 2012.

Non-interest income increased $3.8 million during the fourth quarter of 2012,
or 42 percent, compared to the same period of 2011 primarily related to a $1.6
million increase in brokered loan fees earned in the mortgage warehouse
lending division and $1.9 million in other income which includes swap fees and
gain on sales of OREO.

Non-interest expense for the fourth quarter of 2012 increased $9.7 million, or
19 percent, to $60.1 million from $50.4 million in the fourth quarter of 2011.
The increase is primarily related to a $4.5 million increase in salaries and
employee benefits to $31.2 million from $26.7 million, which was primarily due
to general business growth and costs of performance-based incentives resulting
from the increase in stock price. Non-interest expense for the fourth quarter
of 2012 includes a pre-tax charge of $4.0 million ($0.06 per share after tax)
for settlement of the judgment of $65.5 million against us in Oklahoma
district court. In the settlement, all litigation against us in the Oklahoma
courts and actions by us against the plaintiff in the Texas courts will be
dismissed with prejudice. Because the settlement was within policy limits of
insurance coverage maintained by the Company, we have claims against our
insurance carrier for more than the charge, and we intend to pursue those
claims aggressively. Legal and professional expense increased $958,000 from
the fourth quarter of 2011 primarily due to general business growth. Allowance
and other carrying costs for OREO expense decreased $1.0 million to $1.4
million, which included a $955,000 valuation expense during the fourth quarter
of 2012. Of the $955,000 valuation expense in the fourth quarter of 2012,
$23,000 related to direct write-downs and $932,000 related to increasing the
valuation allowance, compared to $1.1 million in valuation expense in the
fourth quarter 2011, $691,000 of which related to direct write-downs and
$400,000 related to increasing the valuation allowance.

Stockholders’ equity increased by 36 percent from $616.3 million at December
31, 2011 to $836.2 million at December 31, 2012, primarily related to the
offering of 2.3 million common shares for net proceeds of $87 million in the
third quarter of 2012 and retention of net income. In addition to the equity
offering, we also completed a subordinated debt offering in the third quarter
of 2012 of $111 million, increasing our total regulatory capital by
approximately $198 million. The Bank is well capitalized under regulatory
guidelines and at December 31, 2012, our ratio of tangible common equity to
total tangible assets was 7.7 percent.

ABOUT TEXAS CAPITAL BANCSHARES, INC.

Texas Capital Bancshares, Inc. (NASDAQ: TCBI) is the parent company of Texas
Capital Bank, a commercial bank that delivers highly personalized financial
services to businesses and private clients. Headquartered in Dallas, the Bank
has full-service locations in Austin, Dallas, Fort Worth, Houston and San
Antonio.

This news release may be deemed to include forward-looking statements which
are based on Texas Capital’s current estimates or expectations of future
events or future results. Texas Capital is under no obligation, and expressly
disclaims such obligation, to update, alter or revise its forward-looking
statements, whether as a result of new information, future events, or
otherwise. A number of factors, many of which are beyond Texas Capital’s
control, could cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, the risk of adverse impacts
from general economic conditions, competition, interest rate sensitivity and
exposure to regulatory and legislative changes. These and other factors that
could cause results to differ materially from those described in the
forward-looking statements can be found in the prospectus supplements, the
Annual Report on Form 10-K and other filings made by Texas Capital with the
Securities and Exchange Commission (SEC).

TEXAS CAPITAL BANCSHARES, INC.
                                                                                      
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
                        4^th Quarter     3^rd Quarter     2^nd Quarter     1^st Quarter     4^th Quarter
                        2012            2012            2012            2012            2011
CONSOLIDATED
STATEMENT OF INCOME
Interest income         $ 107,769        $ 102,011        $ 95,546         $ 93,131         $ 92,967
Interest expense         6,614         5,156         4,906         4,902         4,820      
Net interest income       101,155          96,855           90,640           88,229           88,147
Provision for credit     4,500         3,000         1,000         3,000         6,000      
losses
Net interest income
after provision for       96,655           93,855           89,640           85,229           82,147
credit losses
Non-interest income       12,836           10,552           10,462           9,190            8,994
Non-interest expense     60,074        53,521        53,973        52,276        50,353     
Income from
continuing operations     49,417           50,886           46,129           42,143           40,788
before income taxes
Income tax expense       17,982        18,316        16,506        15,062        15,043     
Income from               31,435           32,570           29,623           27,081           25,745
continuing operations
Income (loss) from
discontinued             (6         )   (34        )   (1         )   4             (5         )
operations
(after-tax)
Net income              $ 31,429       $ 32,536       $ 29,622       $ 27,085       $ 25,740     
Diluted EPS from        $ .76            $ .80            $ .76            $ .70            $ .67
continuing operations
Diluted EPS             $ .76            $ .80            $ .76            $ .70            $ .67
                                                                                            
Diluted shares            41,505,026       40,755,733       39,141,544       38,914,241       38,609,094
                                                                                            
CONSOLIDATED BALANCE
SHEET DATA
Total assets            $ 10,540,542     $ 9,881,362      $ 9,144,360      $ 8,559,917      $ 8,137,225
Loans held for            6,785,535        6,549,089        6,234,692        5,792,349        5,572,371
investment
Loans held for sale       3,175,272        2,818,622        2,408,032        2,255,281        2,080,081
Securities                100,195          107,288          114,964          123,828          143,710
Demand deposits           2,535,375        2,114,279        2,019,473        1,751,443        1,751,944
Total deposits            7,440,804        6,717,579        6,660,290        6,063,558        5,556,257
Other borrowings          1,947,161        2,046,169        1,609,039        1,657,728        1,768,116
Subordinated notes        111,000          111,000          –                –                –
Long-term debt            113,406          113,406          113,406          113,406          113,406
Stockholders’ equity      836,242          802,406          680,705          647,341          616,331
                                                                                            
End of period shares      40,727,579       40,580,283       38,114,012       37,912,054       37,666,291
outstanding
Book value (excluding
securities              $ 20.45          $ 19.68          $ 17.75          $ 16.96          $ 16.24
gains/losses)
Tangible book value
(excluding securities   $ 19.96          $ 19.18          $ 17.22          $ 16.42          $ 15.69
gains/losses)
                                                                                            
SELECTED FINANCIAL
RATIOS
Net interest margin       4.27       %     4.36       %     4.49       %     4.54       %     4.60       %
Return on average         1.27       %     1.40       %     1.40       %     1.33       %     1.28       %
assets
Return on average         15.35      %     17.27      %     18.08      %     17.36      %     17.05      %
equity
Non-interest income       .54        %     .47        %     .52        %     .47        %     .47        %
to earning assets
Efficiency ratio          52.7       %     49.8       %     53.4       %     53.7       %     51.8       %
Efficiency ratio
(excluding OREO           51.9       %     49.8       %     50.3       %     50.8       %     50.7       %
valuation/write-down)
Non-interest expense      2.53       %     2.40       %     2.67       %     2.69       %     2.62       %
to earning assets
Non-interest expense
to earning assets         2.49       %     2.40       %     2.52       %     2.55       %     2.57       %
(excluding OREO
valuation charge)
Tangible common
equity to total           7.7        %     7.9        %     7.2        %     7.3        %     7.3        %
tangible assets
Tier 1 capital ratio      10.1       %     10.4       %     9.5        %     9.5        %     9.6        %
Total capital ratio       12.1       %     12.6       %     10.5       %     10.4       %     10.6       %
Tier 1 leverage ratio     9.4        %     9.6        %     9.0        %     8.9        %     8.8        %
^(1)

(1) Non-GAAP measure equal to end of period shareholders’ equity less goodwill
and intangible assets divided by end of period total assets less goodwill and
intangible assets.

                                                                    
                                                                        
TEXAS CAPITAL BANCSHARES, INC.
                                                                        
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
                                       December 31,     December 31,    %
                                       2012            2011           Change
Assets
Cash and due from banks                $ 111,938        $ 79,248        41  %
Interest-bearing deposits                94,410           31,310        201 %
Securities, available-for-sale           100,195          143,710       (30 )%
Loans held for sale                      3,175,272        2,080,081     53  %
Loans held for sale from                 302              393           (23 )%
discontinued operations
Loans held for investment (net of        6,785,535        5,572,371     22  %
unearned income)
Less: Allowance for loan losses         74,337        70,295      5   %
Loans held for investment, net           6,711,198        5,502,076     22  %
Premises and equipment, net              11,445           11,457        (0  )%
Accrued interest receivable and          316,201          268,863       18  %
other assets
Goodwill and intangibles, net           19,883        20,480      (3  )%
Total assets                           $ 10,540,844   $ 8,137,618   30  %
                                                                        
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing                   $ 2,535,375      $ 1,751,944     45  %
Interest bearing                         4,576,120        3,324,040     38  %
Interest bearing in foreign branches    329,309       480,273     (31 )%
Total deposits                           7,440,804        5,556,257     34  %
                                                                        
Accrued interest payable                 650              599           9   %
Other liabilities                        91,581           82,909        10  %
Federal funds purchased                  273,179          412,249       (34 )%
Repurchase agreements                    23,936           23,801        1   %
Other borrowings                         1,650,046        1,332,066     24  %
Subordinated notes                       111,000          –             100 %
Trust preferred subordinated            113,406       113,406     -   
debentures
Total liabilities                        9,704,602        7,521,287     29  %
                                                                        
Stockholders’ equity:
Preferred stock, $.01 par value,
$1,000 liquidation value:
Authorized shares – 10,000,000
Issued shares                            –                –             -
Common stock, $.01 par value:
Authorized shares – 100,000,000
Issued shares – 40,727,996 and
37,666,708 at December 31, 2012 and      407              376           8   %
2011, respectively
Additional paid-in capital               450,116          349,458       29  %
Retained earnings                        382,455          261,783       46  %
Treasury stock (shares at cost: 417      (8         )     (8        )   -
at December 31, 2012 and 2011)
Accumulated other comprehensive         3,272         4,722       (31 )%
income, net of taxes
Total stockholders’ equity              836,242       616,331     36  %
Total liabilities and stockholders’    $ 10,540,844   $ 8,137,618   30  %
equity

                                                              
                                                                   
TEXAS CAPITAL BANCSHARES, INC.
                                                                   
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
                          Three Months Ended         Year Ended
                          December 31                December 31
                          2012         2011        2012         2011
Interest income
Interest and fees on      $ 106,653     $ 91,512     $ 393,548     $ 314,753
loans
Securities                  1,053         1,408        4,688         6,458
Federal funds sold          6             1            13            37
Deposits in other banks    57         46        208        352     
Total interest income       107,769       92,967       398,457       321,600
Interest expense
Deposits                    3,312         3,471        13,644        14,950
Federal funds purchased     190           273          979           602
Repurchase agreements       3             4            13            10
Other borrowings            615           404          2,149         528
Subordinated notes          1,829         –            2,037         –
Trust preferred            665        668       2,756      2,573   
subordinated debentures
Total interest expense     6,614      4,820     21,578     18,663  
Net interest income         101,155       88,147       376,879       302,937
Provision for credit       4,500      6,000     11,500     28,500  
losses
Net interest income
after provision for         96,655        82,147       365,379       274,437
credit losses
Non-interest income
Service charges on          1,693         1,504        6,605         6,480
deposit accounts
Trust fee income            1,260         1,108        4,822         4,219
Bank owned life             510           500          2,168         2,095
insurance (BOLI) income
Brokered loan fees          4,978         3,408        17,596        11,335
Other                      4,395      2,474     11,849     8,103   
Total non-interest          12,836        8,994        43,040        32,232
income
Non-interest expense
Salaries and employee       31,198        26,658       121,456       100,535
benefits
Net occupancy expense       3,916         3,537        14,852        13,657
Marketing                   3,980         3,798        13,449        11,109
Legal and professional      5,320         4,362        17,557        14,996
Communications and          3,070         2,468        11,158        9,608
technology
FDIC insurance              1,071         1,595        5,568         7,543
assessment
Allowance and other         1,369         2,383        9,075         9,586
carrying costs for OREO
Litigation settlement       4,000         –            4,000         –
expense
Other                      6,150      5,552     22,729     21,167  
Total non-interest         60,074     50,353    219,844    188,201 
expense
Income from continuing
operations before           49,417        40,788       188,575       118,468
income taxes
Income tax expense         17,982     15,043    67,866     42,366  
Income from continuing      31,435        25,745       120,709       76,102
operations
Loss from discontinued     (6      )   (5     )   (37     )   (126    )
operations (after-tax)
Net income                $ 31,429    $ 25,740   $ 120,672   $ 75,976  
                                                                   
Basic earnings per
common share:
Income from continuing    $ .78         $ .69        $ 3.09        $ 2.04
operations
Net income                $ .78         $ .69        $ 3.09        $ 2.03
                                                                   
Diluted earnings per
common share:
Income from continuing    $ .76         $ .67        $ 3.01        $ 1.99
operations
Net income                $ .76         $ .67        $ 3.00        $ 1.98

                                                               
                                                                     
TEXAS CAPITAL BANCSHARES, INC.
                                                                     
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
                 4^th         3^rd         2^nd         1^st         4^th
                 Quarter      Quarter      Quarter      Quarter      Quarter
                 2012        2012        2012        2012        2011
Reserve for
loan losses:
Beginning        $ 73,722     $ 72,404     $ 71,992     $ 70,295     $ 67,897
balance
Loans
charged-off:
Commercial         4,044        1,154        1,048        462          1,348
Real estate –      –            –            –            –            –
construction
Real estate –      –            284          56           559          2,438
term
Consumer           –            49           –            –            –
Leases            34        49        26        95        238    
Total              4,078        1,536        1,130        1,116        4,024
Recoveries:
Commercial         350          132          191          159          390
Real estate –      –            10           –            –            –
construction
Real estate –      226          130          348          108          45
term
Consumer           7            18           3            5            4
Leases            21        16        55        16        171    
Total             604       306       597       288       610    
recoveries
Net                3,474        1,230        533          828          3,414
charge-offs
Provision for     4,089     2,548     945       2,525     5,812  
loan losses
Ending balance   $ 74,337   $ 73,722   $ 72,404   $ 71,992   $ 70,295 
                                                                     
Reserve for
off-balance
sheet credit
losses:
Beginning        $ 3,444      $ 2,992      $ 2,937      $ 2,462      $ 2,274
balance
Provision for
off-balance       411       452       55        475       188    
sheet credit
losses
Ending balance   $ 3,855    $ 3,444    $ 2,992    $ 2,937    $ 2,462  
                                                                     
Total reserves
for credit       $ 78,192     $ 77,166     $ 75,396     $ 74,929     $ 72,757
losses
                                                                     
Total
provision for    $ 4,500      $ 3,000      $ 1,000      $ 3,000      $ 6,000
credit losses
                                                                     
Reserve to
loans held for     1.10   %     1.13   %     1.16   %     1.24   %     1.26   %
investment^(2)
Reserve to
average loans      1.12   %     1.16   %     1.22   %     1.27   %     1.30   %
held for
investment^(2)
Net
charge-offs to     .21    %     .08    %     .04    %     .06    %     .25    %
average
loans^(1)(2)
Net
charge-offs to
average loans      .10    %     .10    %     .20    %     .40    %     .58    %
for last
twelve
months^(1)(2)
Total
provision for
credit losses      .27    %     .19    %     .07    %     .21    %     .44    %
to average
loans^(1)(2)
Combined
reserves for
credit losses      1.15   %     1.18   %     1.21   %     1.29   %     1.31   %
to loans held
for
investment^(2)
                                                                     
Non-performing
assets (NPAs):
Non-accrual      $ 55,833     $ 57,275     $ 56,433     $ 50,160     $ 54,580
loans
Other real
estate owned      15,991    19,079    27,882    32,601    34,077 
(OREO)^(4)
Total            $ 71,824   $ 76,354   $ 84,315   $ 82,761   $ 88,657 
                                                                     
Non-accrual
loans to           .82    %     .87    %     .91    %     .87    %     .98    %
loans^(2)
Total NPAs to
loans plus         1.06   %     1.16   %     1.35   %     1.42   %     1.58   %
OREO^(2)
Total NPAs to      .71    %     .81    %     .97    %     1.01   %     1.14   %
earning assets
Reserve for
loan losses to   1.3x         1.3x         1.3x         1.4x         1.3x
non-accrual
loans
                                                                     
Restructured     $ 10,407     $ 9,145      $ 13,943     $ 12,582     $ 25,104
loans
Loans past due
90 days and      $ 3,674      $ 3,622      $ 4,421      $ 5,941      $ 5,467
still
accruing^(3)
                                                                     
Loans past due
90 days to         .05    %     .06    %     .07    %     .10    %     .10    %
loans^(2)

(1) Interim period ratios are annualized.
(2) Excludes loans held for sale.
(3) At December 31, 2012, loans past due 90 days and still accruing includes
premium finance loans of $2.8 million. These loans are primarily secured by
obligations of insurance carriers to refund premiums on cancelled insurance
policies. The refund of premiums from the insurance carriers can take 180 days
or longer from the cancellation date.
(4) At December 31, 2012, OREO balance is net of $5.6 million valuation
allowance.

                                                               
                                                                     
TEXAS CAPITAL BANCSHARES, INC.
                                                                     
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in thousands)
                                                                     
                 4^th          3^rd          2^nd         1^st       4^th
                 Quarter       Quarter       Quarter      Quarter    Quarter
                 2012         2012         2012        2012      2011
Interest
income
Interest and     $ 106,653     $ 100,830     $ 94,291     $ 91,774   $ 91,512
fees on loans
Securities         1,053         1,125         1,203        1,307      1,408
Federal funds      6             2             4            1          1
sold
Deposits in       57         54         48        49       46     
other banks
Total interest     107,769       102,011       95,546       93,131     92,967
income
Interest
expense
Deposits           3,312         3,378         3,482        3,472      3,471
Federal funds      190           268           240          281        273
purchased
Repurchase         3             3             4            3          4
agreements
Other              615           607           492          435        404
borrowings
Subordinated       1,829         208           –            –          –
notes
Trust
preferred         665        692        688       711      668    
subordinated
debentures
Total interest    6,614      5,156      4,906     4,902    4,820  
expense
Net interest       101,155       96,855        90,640       88,229     88,147
income
Provision for     4,500      3,000      1,000     3,000    6,000  
credit losses
Net interest
income after       96,655        93,855        89,640       85,229     82,147
provision for
credit losses
Non-interest
income
Service
charges on         1,693         1,684         1,624        1,604      1,504
deposit
accounts
Trust fee          1,260         1,216         1,232        1,114      1,108
income
Bank owned
life insurance     510           549           588          521        500
(BOLI) income
Brokered loan      4,978         4,839         4,128        3,651      3,408
fees
Other             4,395      2,264      2,890     2,300    2,474  
Total
non-interest       12,836        10,552        10,462       9,190      8,994
income
Non-interest
expense
Salaries and
employee           31,198        31,009        30,230       29,019     26,658
benefits
Net occupancy      3,916         3,653         3,679        3,604      3,537
expense
Marketing          3,980         3,472         3,174        2,823      3,798
Legal and          5,320         4,916         3,330        3,991      4,362
professional
Communications     3,070         2,885         2,720        2,483      2,468
and technology
FDIC insurance     1,071         1,332         1,596        1,569      1,595
assessment
Allowance and
other carrying     1,369         552           3,812        3,342      2,383
costs for OREO
Litigation
settlement         4,000         –             –            –          –
expense
Other             6,150      5,702      5,432     5,445    5,552  
Total
non-interest      60,074     53,521     53,973    52,276   50,353 
expense
Income from
continuing
operations         49,417        50,886        46,129       42,143     40,788
before income
taxes
Income tax        17,982     18,316     16,506    15,062   15,043 
expense
Income from
continuing         31,435        32,570        29,623       27,081     25,745
operations
Income (loss)
from
discontinued      (6      )   (34     )   (1     )   4        (5     )
operations
(after-tax)
Net income       $ 31,429    $ 32,536    $ 29,622   $ 27,085  $ 25,740 

                                                                                                                                                                     
                                                                                                                                                                                     
TEXAS CAPITAL BANCSHARES, INC.
                                                                                                                                                                                     
QUARTERLY FINANCIAL SUMMARY – UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
Continuing Operations
(Dollars in thousands)
                                                                                                                                                                                     
                  4^th Quarter 2012                  3^rd Quarter 2012                  2^nd Quarter 2012                 1^st Quarter 2012                 4^th Quarter 2011
                  Average       Revenue/    Yield/   Average       Revenue/    Yield/   Average       Revenue/   Yield/   Average       Revenue/   Yield/   Average       Revenue/   Yield/
                                                                                                                                                                          
                  Balance       Expense     Rate     Balance       Expense     Rate     Balance       Expense    Rate     Balance       Expense    Rate     Balance       Expense    Rate
                                ^(1)                               ^(1)                               ^(1)                              ^(1)                              ^(1)
Assets
Securities –      $ 78,182      $ 811       4.13 %   $ 84,583      $ 881       4.14 %   $ 91,623      $ 948      4.16 %   $ 109,003     $ 1,041    3.84 %   $ 109,761     $ 1,126    4.07 %
Taxable
Securities –        25,301        372       5.85 %     25,717        376       5.82 %     26,817        393      5.89 %     28,506        409      5.77 %     30,065        434      5.73 %
Non-taxable^(2)
Federal funds       21,617        6         0.11 %     9,360         2         0.09 %     8,077         4        0.20 %     6,848         1        0.06 %     8,505         1        0.05 %
sold
Deposits in         69,886        57        0.32 %     64,859        54        0.33 %     60,416        48       0.32 %     49,470        49       0.41 %     42,644        46       0.43 %
other banks
Loans held for      2,658,092     26,440    3.96 %     2,432,027     24,433    4.00 %     2,062,449     21,087   4.11 %     2,036,622     21,315   4.21 %     2,093,883     22,332   4.23 %
sale
Loans held for      6,662,817     80,213    4.79 %     6,313,263     76,397    4.81 %     5,950,913     73,204   4.95 %     5,660,993     70,459   5.01 %     5,395,253     69,180   5.09 %
investment
Less reserve
for loan           73,912      –        –        72,373      –        –        71,779      –       –        70,261      –       –        67,214      –       –    

losses
Loans, net of      9,246,997   106,653  4.59 %    8,672,917   100,830  4.63 %    7,941,583   94,291  4.78 %    7,627,354   91,774  4.84 %    7,421,922   91,512  4.89 %
reserve
Total earning       9,441,983     107,899   4.55 %     8,857,436     102,143   4.59 %     8,128,516     95,684   4.73 %     7,821,181     93,274   4.80 %     7,612,897     93,119   4.85 %
assets
Cash and other     427,299                           399,428                           394,086                          388,009                          382,577
assets
Total assets      $ 9,869,282                        $ 9,256,864                        $ 8,522,602                       $ 8,209,190                       $ 7,995,474
                                                                                                                                                                                     
Liabilities and
Stockholders’
Equity
Transaction       $ 941,947     $ 244       0.10 %   $ 803,776     $ 247       0.12 %   $ 694,463     $ 198      0.11 %   $ 565,319     $ 140      0.10 %   $ 429,980     $ 33       0.03 %
deposits
Savings             2,933,904     2,299     0.31 %     2,922,852     2,185     0.30 %     2,664,598     2,107    0.32 %     2,535,412     2,083    0.33 %     2,422,465     2,062    0.34 %
deposits
Time deposits       423,685       448       0.42 %     491,783       576       0.47 %     584,581       831      0.57 %     624,823       920      0.59 %     534,441       927      0.69 %
Deposits in
foreign            362,580     321      0.35 %    431,412     370      0.34 %    444,478     346     0.31 %    409,422     329     0.32 %    578,728     449     0.31 %
branches
Total interest
bearing             4,662,116     3,312     0.28 %     4,649,823     3,378     0.29 %     4,388,120     3,482    0.32 %     4,134,976     3,472    0.34 %     3,965,614     3,471    0.35 %
deposits
Other               1,725,129     808       0.19 %     1,639,953     878       0.21 %     1,428,575     736      0.21 %     1,554,716     719      0.19 %     1,588,198     681      0.17 %
borrowings
Subordinated        111,000       1,829     6.56 %     12,065        208       6.86 %     –             –        –          –             –        –          –             –        –
notes
Trust preferred
subordinated       113,406     665      2.33 %    113,406     692      2.43 %    113,406     688     2.44 %    113,406     711     2.52 %    113,406     668     2.34 %
debentures
Total interest
bearing             6,611,651     6,614     0.40 %     6,415,247     5,156     0.32 %     5,930,101     4,906    0.33 %     5,803,098     4,902    0.34 %     5,667,218     4,820    0.34 %
liabilities
Demand deposits     2,356,758                          2,010,694                          1,864,456                         1,700,390                         1,659,132
Other               86,308                             80,810                             69,076                            78,108                            70,142
liabilities
Stockholders’      814,565                           750,113                           658,969                          627,594                          598,982
equity
Total
liabilities and   $ 9,869,282                        $ 9,256,864                        $ 8,522,602                       $ 8,209,190                       $ 7,995,474
stockholders’
equity
                                                                                                                                                                                     
Net interest                    $ 101,285                          $ 96,987                           $ 90,778                          $ 88,372                          $ 88,299
income
Net interest                                4.27 %                             4.36 %                            4.49 %                            4.54 %                            4.60 %
margin

(1) The loan averages include loans on which the accrual of interest has been
discontinued and are stated net of unearned income.
(2) Taxable equivalent rates used where applicable.

Contact:

Texas Capital Bancshares, Inc.
Media Contact
Heather Worley, 214-932-6827
heather.worley@texascapitalbank.com
or
Investor Contact
Myrna Vance, 214-932-6646
myrna.vance@texascapitalbank.com
 
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