Texas Capital Bancshares Announces Operating Results for Q1 2013

  Texas Capital Bancshares Announces Operating Results for Q1 2013

Business Wire

DALLAS -- April 24, 2013

Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas
Capital Bank, announced earnings and operating results for the first quarter
of 2013.

  *Net income increased 5% on a linked quarter basis and 22% from the first
    quarter of 2012
  *EPS increased 5% on a linked quarter basis and 14% from the first quarter
    of 2012
  *Demand deposits increased 4% and total deposits increased 4% on a linked
    quarter basis; grew 50% and 28%, respectively, from the first quarter of
    2012
  *Loans held for investment increased 2% and total loans decreased 5% on a
    linked quarter basis; both grew 19% and 18%, respectively, from the first
    quarter of 2012

“I am pleased to report another strong quarter for Texas Capital, a quarter in
which we maintained superior profitability, returns and credit trends in light
of a very competitive environment and an expected seasonal decline in loans
held for sale,” said George Jones, CEO. “We are in a strong capital position
and have the resources and potential to continue our growth.”

FINANCIAL SUMMARY
(dollars and shares in thousands)
                                                                
                                 Q1 2013            Q1 2012           % Change
QUARTERLY OPERATING
RESULTS^(1)
Net Income                       $ 33,144           $ 27,081          22   %
Net Income Available to Common   $ 33,063           $ 27,081          22   %
Shareholders
Diluted EPS                      $ .80              $ .70             14   %
ROA                                1.38       %       1.33      %
ROE                                15.82      %       17.36     %
Diluted Shares                     41,429             38,914
                                                                      
BALANCE SHEET^(1)
Total Assets                     $ 10,020,565       $ 8,559,917       17   %
Demand Deposits                    2,628,446          1,751,443       50   %
Total Deposits                     7,745,831          6,063,558       28   %
Loans Held for Investment          6,920,011          5,792,349       19   %
Loans Held for Sale                2,577,830          2,255,281       14   %
Total Loans                        9,497,841          8,047,630       18   %
Stockholders’ Equity               1,013,195          647,341         57   %

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

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income from continuing operations
and net income available to common shareholders of $33.1 million for the
quarter ended March 31, 2013 compared to $27.1 million for the first quarter
of 2012. On a fully diluted basis, earnings per common share from continuing
operations were $.80 for the three months ended March 31, 2013, compared to
$.70 for the same period last year. The discussion below relates only to
continuing operations.

Return on average common equity was 15.82 percent and return on average assets
was 1.38 percent for the first quarter of 2013, compared to 17.36 percent and
1.33 percent, respectively, for the first quarter of 2012.

Net interest income was $98.0 million for the first quarter of 2013, compared
to $101.2 million in the fourth quarter of 2012 and $88.2 million for the
first quarter of 2012. The net interest margin in the first quarter of 2013
was 4.27 percent, a 27 basis point decrease from the first quarter of 2012 and
level with the fourth quarter of 2012. The year over year decrease in net
interest margin is due to the growth in loans with lower yields with an
offsetting benefit of the reduction in funding costs. The year over year
growth in loans more than compensated for the reduction in yields and produced
strong growth in net interest income.

Average loans held for investment for the first quarter of 2013 were $6.8
billion, an increase of $1.2 billion from the first quarter of 2012 and $179.9
million from the fourth quarter of 2012. Average loans held for sale for the
first quarter of 2013 increased $326.0 million compared to the first quarter
of 2012 and decreased $295.4 million from the fourth quarter of 2012 due to
seasonal trends.

Average total deposits for the first quarter of 2013 increased by $1.7 billion
from the first quarter of 2012 and increased by $499.8 million from the fourth
quarter of 2012. For the same periods, the average balance of demand deposits
increased by $829.5 million, or 49 percent, to $2.5 billion from $1.7 billion
during the first quarter of 2012 and increased $173.2 million from the fourth
quarter of 2012.

In the first quarter of 2013, we experienced decreases in levels of
non-performing assets. Credit costs, including the provision for credit losses
and valuation charges related to other real estate owned (“OREO”) totaled $2.1
million in the first quarter of 2013 compared to $5.7 million in the first
quarter of 2012 and $5.5 million in the fourth quarter of 2012. We recorded a
$2.0 million provision for credit losses in the first quarter of 2013 compared
to $3.0 million in the first quarter of 2012 and $4.5 million in the fourth
quarter of 2012. Due to growth and improving credit quality, at March 31,
2013, the combined reserve decreased to 1.14 percent of loans held for
investment as compared to 1.29 percent at March 31, 2012 and 1.15 percent at
December 31, 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 first
quarter of 2013, net charge-offs were $1.2 million, compared to net
charge-offs of $828,000 in the first quarter of 2012 and net charge-offs of
$3.5 million in the fourth quarter of 2012. Non-accrual loans were $43.4
million, or .63 percent of loans held for investment at the end of the first
quarter of 2013, $50.2 million, or .87 percent, at the end of the first
quarter of 2012 and $55.8 million, or .82 percent, at the end of the fourth
quarter 2012. At March 31, 2013, total OREO was $14.4 million compared to
$32.6 million at the end of the first quarter of 2012, and $16.0 million at
the end of the fourth quarter of 2012. The OREO balance of $14.4 million at
March 31, 2013 is stated net of a $4.5 million valuation allowance. The
valuation charge for OREO reflected in non-interest expense was $71,000 in the
first quarter of 2013 compared to $2.7 million in the first quarter of 2012
and $955,000 in the fourth quarter of 2012.

Non-interest income increased $2.1 million during the first quarter of 2013,
or 23 percent, compared to the same period of 2012 primarily related to a $1.1
million increase in brokered loan fees earned in the mortgage warehouse
lending division. Swap fee income increased $855,000 during the first quarter
of 2013 due to an increase in swap transactions as compared to the same period
in 2012.

Non-interest expense for the first quarter of 2013 increased $3.4 million, or
7 percent, to $55.7 million from $52.3 million in the first quarter of 2012.
The increase is primarily related to a $4.5 million increase in salaries and
employee benefits to $33.5 million from $29.0 million, which was primarily due
to general business growth and costs of performance-based incentives resulting
from the increase in stock price. Marketing expense increased $1.1 million
from the first quarter of 2012 due to expansion of customer bases in both
loans and deposits. Allowance and other carrying costs for OREO expense
decreased $2.9 million to $430,000, which included a $71,000 valuation
expense. The $71,000 valuation expense in the first quarter of 2013 relates to
direct write-downs of the OREO balance, compared to $1.9 million related to
direct write-downs and $856,000 related to increasing the valuation allowance
for the first quarter of 2012.

Stockholders’ equity increased 57 percent from $647.3 million at March 31,
2012 to $1.0 billion at March 31, 2013, primarily related to the offering of
2.3 million common shares for net proceeds of $87 million in the third quarter
of 2012, the offering of 6.0 million shares of preferred shares for proceeds
of $145.1 million in the first quarter of 2013 and retained net income. The
Bank is well capitalized under regulatory guidelines and at March 31, 2013,
the Company’s ratio of tangible common equity to total tangible assets was 8.4
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 release contains forward-looking statements, which are subject to risks
and uncertainties. A number of factors, many of which are beyond Texas Capital
Bancshares’ control, could cause actual results to differ materially from
future results expressed or implied by such forward-looking statements. These
risks and uncertainties include 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 Form 10-K and other filings made by Texas
Capital Bancshares with the Securities and Exchange Commission.


TEXAS CAPITAL BANCSHARES, INC.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
                        1^st Quarter     4^th Quarter     3^rd Quarter     2^nd Quarter     1^st Quarter
                          2013             2012             2012             2012             2012
CONSOLIDATED
STATEMENT OF INCOME
Interest income           $ 104,179          $ 107,769          $ 102,011          $ 95,546           $ 93,131
Interest expense           6,137          6,614          5,156          4,906          4,902      
Net interest income         98,042             101,155            96,855             90,640             88,229
Provision for credit       2,000          4,500          3,000          1,000          3,000      
losses
Net interest income
after provision for         96,042             96,655             93,855             89,640             85,229
credit losses
Non-interest income         11,281             12,836             10,552             10,462             9,190
Non-interest expense       55,700         60,074         53,521         53,973         52,276     
Income from
continuing operations       51,623             49,417             50,886             46,129             42,143
before income taxes
Income tax expense         18,479         17,982         18,316         16,506         15,062     
Income from                 33,144             31,435             32,570             29,623             27,081
continuing operations
Income (loss) from
discontinued               (1         )    (6         )    (34        )    (1         )    4          
operations
(after-tax)
Net income                $ 33,143           $ 31,429           $ 32,536           $ 29,622           $ 27,085
Preferred stock            81             –              –              –              –          
dividends
Net income available
to common                 $ 33,062        $ 31,429        $ 32,536        $ 29,622        $ 27,085     
shareholders
Diluted EPS from          $ .80              $ .76              $ .80              $ .76              $ .70
continuing operations
Diluted EPS               $ .80              $ .76              $ .80              $ .76              $ .70
                                                                                                      
Diluted shares              41,429,244         41,505,026         40,755,733         39,141,544         38,914,241
                                                                                                      
CONSOLIDATED BALANCE
SHEET DATA
Total assets              $ 10,020,565       $ 10,540,542       $ 9,881,362        $ 9,144,360        $ 8,559,917
Loans held for              6,920,011          6,785,535          6,549,089          6,234,692          5,792,349
investment
Loans held for sale         2,577,830          3,175,272          2,818,622          2,408,032          2,255,281
Securities                  87,527             100,195            107,288            114,964            123,828
Demand deposits             2,628,446          2,535,375          2,114,279          2,019,473          1,751,443
Total deposits              7,745,831          7,440,804          6,717,579          6,660,290          6,063,558
Other borrowings            938,134            1,947,161          2,046,169          1,609,039          1,657,728
Subordinated notes          111,000            111,000            111,000            –                  –
Long-term debt              113,406            113,406            113,406            113,406            113,406
Stockholders’ equity        1,013,195          836,242            802,406            680,705            647,341
                                                                                                      
End of period shares        40,771,414         40,727,579         40,580,283         38,114,012         37,912,054
outstanding
Book value (excluding
securities                $ 21.10            $ 20.45            $ 19.68            $ 17.75            $ 16.96
gains/losses)
Tangible book value
(excluding securities     $ 20.62            $ 19.96            $ 19.18            $ 17.22            $ 16.42
gains/losses)
                                                                                                      
SELECTED FINANCIAL
RATIOS
Net interest margin         4.27       %       4.27       %       4.36       %       4.49       %       4.54       %
Return on average           1.38       %       1.27       %       1.40       %       1.40       %       1.33       %
assets
Return on average           15.82      %       15.35      %       17.27      %       18.08      %       17.36      %
common equity
Non-interest income         .49        %       .54        %       .47        %       .52        %       .47        %
to earning assets
Efficiency ratio            50.9       %       52.7       %       49.8       %       53.4       %       53.7       %
Efficiency ratio
(excluding OREO             50.9       %       51.9       %       49.8       %       50.3       %       50.8       %
valuation/write-down)
Non-interest expense        2.42       %       2.53       %       2.40       %       2.67       %       2.69       %
to earning assets
Non-interest expense
to earning assets           2.42       %       2.49       %       2.40       %       2.52       %       2.55       %
(excluding OREO
valuation charge)
Tangible common
equity to total             8.4        %       7.7        %       7.9        %       7.2        %       7.3        %
tangible assets
                                                                                                                   


TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
                                   March 31,          March 31,         %
                                                                 
                                   2013               2012              Change
Assets                                                             
Cash and due from banks            $ 80,440           $ 66,806          20  %
Interest-bearing deposits            86,003             61,324          40  %
Federal funds sold and
securities purchased under           25,000             20,680          21  %
resale agreements
Securities, available-for-sale       87,527             123,828         (29 )%
Loans held for sale                  2,577,830          2,255,281       14  %
Loans held for sale from             301                390             (23 )%
discontinued operations
Loans held for investment (net       6,920,011          5,792,349       19  %
of unearned income)
Less: Allowance for loan            75,000         71,992       4   %
losses
Loans held for investment, net       6,845,011          5,720,357       20  %
Premises and equipment, net          11,249             11,445          (2  )%
Accrued interest receivable          287,771            279,866         3   %
and other assets
Goodwill and intangibles, net       19,734         20,330       (3  )%
Total assets                       $ 10,020,866    $ 8,560,307    17  %
                                                                        
Liabilities and Stockholders’
Equity
Liabilities:
Deposits:
Non-interest bearing               $ 2,628,446        $ 1,751,443       50  %
Interest bearing                     4,739,067          3,902,123       21  %
Interest bearing in foreign         378,318        409,992      (8  )%
branches
Total deposits                       7,745,831          6,063,558       28  %
                                                                        
Accrued interest payable             1,013              893             13  %
Other liabilities                    98,287             77,381          27  %
Federal funds purchased              452,998            383,927         18  %
Repurchase agreements                35,095             23,740          48  %
Other borrowings                     450,041            1,250,061       (64 )%
Subordinated notes                   111,000            –               100 %
Trust preferred subordinated        113,406        113,406      -   
debentures
Total liabilities                    9,007,671          7,912,966       14  %
                                                                        
Stockholders’ equity:
Preferred stock                      150,000            –               100 %
Common stock, $.01 par value:
Authorized shares –
100,000,000
Issued shares – 40,771,831 and
37,912,054 at March 31, 2013         408                379             8   %
and 2012, respectively
Additional paid-in capital           444,477            353,567         26  %
Retained earnings                    415,517            288,868         44  %
Treasury stock (shares at
cost: 417 at March 31, 2013          (8         )       (8        )     -
and 2012, respectively)
Accumulated other
comprehensive income, net of        2,801          4,535        (38 )%
taxes
Total stockholders’ equity          1,013,195      647,341      57  %
Total liabilities and              $ 10,020,866    $ 8,560,307    17  %
stockholders’ equity
                                                                        

                                                                 
TEXAS CAPITAL BANCSHARES, INC.
                                                                      
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
                                                      Three Months Ended

                                                      March 31
                                                      2013          2012
Interest income
Loans                                                 $ 103,182       $ 91,774
Securities                                              939             1,307
Federal funds sold                                      6               1
Deposits in other banks                                52          49
Total interest income                                   104,179         93,131
Interest expense
Deposits                                                3,245           3,472
Federal funds purchased                                 212             281
Repurchase agreements                                   4               3
Other borrowings                                        213             435
Subordinated notes                                      1,829           –
Trust preferred subordinated debentures                634         711
Total interest expense                                 6,137       4,902
Net interest income                                     98,042          88,229
Provision for credit losses                            2,000       3,000
Net interest income after provision for credit          96,042          85,229
losses
Non-interest income
Service charges on deposit accounts                     1,701           1,604
Trust fee income                                        1,241           1,114
Bank owned life insurance (BOLI) income                 498             521
Brokered loan fees                                      4,744           3,651
Swap fees                                               1,652           797
Other                                                  1,445       1,503
Total non-interest income                               11,281          9,190
Non-interest expense
Salaries and employee benefits                          33,541          29,019
Net occupancy expense                                   3,857           3,604
Marketing                                               3,972           2,823
Legal and professional                                  3,940           3,991
Communications and technology                           3,122           2,483
Allowance and other carrying costs for OREO             430             3,342
Other                                                  6,838       7,014
Total non-interest expense                             55,700      52,276
Income from continuing operations before income         51,623          42,143
taxes
Income tax expense                                     18,479      15,062
Income from continuing operations                       33,144          27,081
Income (loss) from discontinued operations             (1      )    4
(after-tax)
Net income                                              33,143        $ 27,085
Preferred stock dividends                              81          –
Net income available to common shareholders           $ 33,062     $ 27,085
                                                                      
Basic earnings per common share:
Income from continuing operations                     $ .82           $ .72
Net income                                            $ .82           $ .72
                                                                      
Diluted earnings per common share:
Income from continuing operations                     $ .80           $ .70
Net income                                            $ .80           $ .70
                                                                        


TEXAS CAPITAL BANCSHARES, INC.

SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
                 1^st         4^th         3^rd         2^nd         1^st
                   Quarter        Quarter        Quarter        Quarter        Quarter
                   2013         2012         2012         2012         2012
Reserve for
loan losses:
Beginning          $ 74,337       $ 73,722       $ 72,404       $ 71,992       $ 70,295
balance
Loans
charged-off:
Commercial           1,648          4,044          1,154          1,048          462
Real estate –        –              –              –              –              –
construction
Real estate –        105            –              284            56             559
term
Consumer             19             –              49             –              –
Leases              –          34         49         26         95     
Total loans          1,772          4,078          1,536          1,130          1,116
charged-off
Recoveries:
Commercial           397            350            132            191            159
Real estate –        –              –              10             –              –
construction
Real estate –        8              226            130            348            108
term
Consumer             30             7              18             3              5
Leases              121        21         16         55         16     
Total               556        604        306        597        288    
recoveries
Net                  1,216          3,474          1,230          533            828
charge-offs
Provision for       1,879      4,089      2,548      945        2,525  
loan losses
Ending balance     $ 75,000    $ 74,337    $ 73,722    $ 72,404    $ 71,992 
                                                                                        
Reserve for
off-balance
sheet credit
losses:
Beginning          $ 3,855        $ 3,444        $ 2,992        $ 2,937        $ 2,462
balance
Provision
(benefit) for
off-balance         121        411        452        55         475    
sheet credit
losses
Ending balance     $ 3,976     $ 3,855     $ 3,444     $ 2,992     $ 2,937  
                                                                                        
Total reserves
for credit         $ 78,976       $ 78,192       $ 77,166       $ 75,396       $ 74,929
losses
                                                                                        
Total
provision for      $ 2,000        $ 4,500        $ 3,000        $ 1,000        $ 3,000
credit losses
                                                                                        
Reserve to
loans held for       1.08   %       1.10   %       1.13   %       1.16   %       1.24   %
investment^(2)
Reserve to
average loans        1.10   %       1.12   %       1.16   %       1.22   %       1.27   %
held for
investment^(2)
Net
charge-offs to       .07    %       .21    %       .08    %       .04    %       .06    %
average
loans^(1)(2)
Net
charge-offs to
average loans        .10    %       .10    %       .10    %       .20    %       .40    %
for last
twelve
months^(1)(2)
Total
provision for
credit losses        .12    %       .27    %       .19    %       .07    %       .21    %
to average
loans^(1)(2)
Combined
reserves for
credit losses        1.14   %       1.15   %       1.18   %       1.21   %       1.29   %
to loans held
for
investment^(2)
                                                                                        
Non-performing
assets (NPAs):
Non-accrual        $ 43,424       $ 55,833       $ 57,275       $ 56,433       $ 50,160
loans
Other real
estate owned        14,426     15,991     19,079     27,882     32,601 
(OREO)^(4)
Total              $ 57,850    $ 71,824    $ 76,354    $ 84,315    $ 82,761 
                                                                                        
Non-accrual
loans to             .63    %       .82    %       .87    %       .91    %       .87    %
loans^(2)
Total NPAs to
loans plus           .83    %       1.06   %       1.16   %       1.35   %       1.42   %
OREO^(2)
Total NPAs to        .60    %       .71    %       .81    %       .97    %       1.01   %
earning assets
Reserve for
loan losses to     1.7      x     1.3      x     1.3      x     1.3      x     1.4      x
non-accrual
loans
                                                                                        
Restructured       $ 11,755       $ 10,407       $ 9,145        $ 13,943       $ 12,582
loans
Loans past due
90 days and        $ 12,614       $ 3,674        $ 3,622        $ 4,421        $ 5,941
still
accruing^(3)
                                                                                        
Loans past due
90 days to           .18    %       .05    %       .06    %       .07    %       .10    %
loans^(2)

(1)  Interim period ratios are annualized.
(2)   Excludes loans held for sale.
      At March 31, 2013, loans past due 90 days and still accruing includes
      premium finance loans of $4.4 million. These loans are primarily secured
(3)   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 March 31, 2013, OREO balance is net of $4.5 million valuation
      allowance.
      


TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in thousands)
                 1^st          4^th          3^rd          2^nd         1^st
                   Quarter         Quarter         Quarter         Quarter        Quarter
                   2013          2012          2012          2012         2012
Interest
income
Interest and       $ 103,182       $ 106,653       $ 100,830       $ 94,291       $ 91,774
fees on loans
Securities           939             1,053           1,125           1,203          1,307
Federal funds        6               6               2               4              1
sold
Deposits in         52          57          54          48         49
other banks
Total interest       104,179         107,769         102,011         95,546         93,131
income
Interest
expense
Deposits             3,245           3,312           3,378           3,482          3,472
Federal funds        212             190             268             240            281
purchased
Repurchase           4               3               3               4              3
agreements
Other                213             615             607             492            435
borrowings
Subordinated         1,829           1,829           208             –              –
notes
Trust
preferred           634         665         692         688        711
subordinated
debentures
Total interest      6,137       6,614       5,156       4,906      4,902
expense
Net interest         98,042          101,155         96,855          90,640         88,229
income
Provision for       2,000       4,500       3,000       1,000      3,000
credit losses
Net interest
income after         96,042          96,655          93,855          89,640         85,229
provision for
credit losses
Non-interest
income
Service
charges on           1,701           1,693           1,684           1,624          1,604
deposit
accounts
Trust fee            1,241           1,260           1,216           1,232          1,114
income
Bank owned
life insurance       498             510             549             588            521
(BOLI) income
Brokered loan        4,744           4,978           4,839           4,128          3,651
fees
Swap fees            1,652           2,093           1,397           622            797
Other               1,445       2,302       867         2,268      1,503
Total
non-interest         11,281          12,836          10,552          10,462         9,190
income
Non-interest
expense
Salaries and
employee             33,541          31,198          31,009          30,230         29,019
benefits
Net occupancy        3,857           3,916           3,653           3,679          3,604
expense
Marketing            3,972           3,980           3,472           3,174          2,823
Legal and            3,940           5,320           4,916           3,330          3,991
professional
Communications       3,122           3,070           2,885           2,720          2,483
and technology
Allowance and
other carrying       430             1,369           552             3,812          3,342
costs for OREO
Litigation
settlement           –               4,000           –               –              –
expense
Other               6,838       7,221       7,034       7,028      7,014
Total
non-interest        55,700      60,074      53,521      53,973     52,276
expense
Income from
continuing
operations           51,623          49,417          50,886          46,129         42,143
before income
taxes
Income tax          18,479      17,982      18,316      16,506     15,062
expense
Income from
continuing           33,144          31,435          32,570          29,623         27,081
operations
Income (loss)
from
discontinued        (1      )    (6      )    (34     )    (1     )    4
operations
(after-tax)
Net income           33,143        $ 31,429        $ 32,536        $ 29,622       $ 27,085
Preferred
stock               81          –           –           –          –
dividends
Net income
available to       $ 33,062     $ 31,429     $ 32,536     $ 29,622    $ 27,085
common
shareholders
                                                                                  


TEXAS CAPITAL BANCSHARES, INC.

QUARTERLY FINANCIAL SUMMARY – UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates

Continuing Operations
(Dollars in thousands)

                  1^st Quarter 2013                  4^th Quarter 2012                  3^rd Quarter 2012                  2^nd Quarter 2012                 1^st Quarter 2012
                    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 –        $ 71,220      $ 729       4.15 %     $ 78,182      $ 811       4.13 %     $ 84,583      $ 881       4.14 %     $ 91,623      $ 948      4.16 %     $ 109,003     $ 1,041    3.84 %
Taxable
Securities –          22,174        323       5.91 %       25,301        372       5.85 %       25,717        376       5.82 %       26,817        393      5.89 %       28,506        409      5.77 %
Non-taxable^(2)
Federal funds
sold and                                                                                                                                                                               
securities            24,785                               21,617                               9,360                                8,077                               6,848
purchased under                     6         0.10 %                     6         0.11 %                     2         0.09 %                     4        0.20 %                     1        0.06 %
resale
agreements
Deposits in           78,718        52        0.27 %       69,886        57        0.32 %       64,859        54        0.33 %       60,416        48       0.32 %       49,470        49       0.41 %
other banks
Loans held for        2,362,646     22,641    3.89 %       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 %
sale
Loans held for        6,842,766     80,541    4.77 %       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 %
investment
Less reserve         74,442      –        –          73,912      –        –          72,373      –        –          71,779      –       –          70,261      –       –    
for loan losses
Loans, net of        9,130,970   103,182  4.58 %      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 %
reserve
Total earning         9,327,867     104,292   4.53 %       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 %
assets
Cash and other       401,692                             427,299                             399,428                             394,086                            388,009
assets
Total assets        $ 9,729,559                          $ 9,869,282                          $ 9,256,864                          $ 8,522,602                         $ 8,209,190
                                                                                                                                                                                                
Liabilities and
Stockholders’
Equity
Transaction         $ 1,003,735   $ 253       0.10 %     $ 941,947     $ 244       0.10 %     $ 803,776     $ 247       0.12 %     $ 694,463     $ 198      0.11 %     $ 565,319     $ 140      0.10 %
deposits
Savings               3,246,675     2,297     0.29 %       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 %
deposits
Time deposits         403,113       414       0.42 %       423,685       448       0.42 %       491,783       576       0.47 %       584,581       831      0.57 %       624,823       920      0.59 %
Deposits in
foreign              335,265     281      0.34 %      362,580     321      0.35 %      431,412     370      0.34 %      444,478     346     0.31 %      409,422     329     0.32 %
branches
Total interest
bearing               4,988,788     3,245     0.26 %       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 %
deposits
Other                 1,041,573     429       0.17 %       1,725,129     808       0.19 %       1,639,953     878       0.21 %       1,428,575     736      0.21 %       1,554,716     719      0.19 %
borrowings
Subordinated          111,000       1,829     6.68 %       111,000       1,829     6.56 %       12,065        208       6.86 %       –             –        –            –             –        –
notes
Trust preferred
subordinated         113,406     634      2.27 %      113,406     665      2.33 %      113,406     692      2.43 %      113,406     688     2.44 %      113,406     711     2.52 %
debentures
Total interest
bearing               6,254,767     6,137     0.40 %       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 %
liabilities
Demand deposits       2,529,927                            2,356,758                            2,010,694                            1,864,456                           1,700,390
Other                 90,538                               86,308                               80,810                               69,076                              78,108
liabilities
Stockholders’        854,327                             814,565                             750,113                             658,969                            627,594
equity
Total
liabilities and     $ 9,729,559                          $ 9,869,282                          $ 9,256,864                          $ 8,522,602                         $ 8,209,190
stockholders’
equity
                                                                                                                                                                                                
Net interest                      $ 98,155                             $ 101,285                            $ 96,987                             $ 90,778                            $ 88,372
income
Net interest                                  4.27 %                               4.27 %                               4.36 %                              4.49 %                              4.54 %
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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