Texas Capital Bancshares, Inc. Announces Second Quarter 2025 Results

Second quarter 2025 net income of $77.3 million and net income available to common stockholders
of $73.0 million, up 86% and 95%, respectively, year-over-year

Second quarter 2025 EPS of $1.58 per diluted share and adjusted EPS⁽¹⁾ of $1.63 per
diluted share, up 98% and 104%, respectively, year-over-year

Strong balance sheet growth with total loans increasing 7% quarter-over-quarter and 10% year-over-year

Book Value and Tangible Book Value⁽²⁾ per share both increasing 13% year-over-year, reaching record levels

DALLAS, July 17, 2025 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced operating results for the second quarter of 2025.

“Our multi-year focus on building a differentiated, full-service financial services firm has strengthened our client franchise and consistently delivered high-quality outcomes across our platform, driving strong financial performance this quarter,” said Rob C. Holmes, Chairman, President & CEO. “The strategic actions we’ve taken have structurally enhanced our earnings power, and as we enter the second half of the year, the breadth of our capabilities and the strength of our balance sheet position us to deliver durable, through-cycle results for both clients and shareholders.”

(1) 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.
(2) Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(3) Net interest income plus non-interest income, less non-interest expense.

SECOND QUARTER 2025 COMPARED TO FIRST QUARTER 2025

For the second quarter of 2025, net income available to common stockholders was $73.0 million, or $1.58 per diluted share, compared to $42.7 million, or $0.92 per diluted share, for the first quarter of 2025.

Provision for credit losses for the second quarter of 2025 was $15.0 million, compared to $17.0 million for the first quarter of 2025. The $15.0 million provision for credit losses recorded in the second quarter of 2025 resulted primarily from an increase in total loans held for investment (“LHI”) and $13.0 million in net charge-offs, partially offset by a decrease in criticized loans.

Net interest income was $253.4 million for the second quarter of 2025, compared to $236.0 million for the first quarter of 2025, primarily due to increases in average earning assets and earning asset yields, a decrease in average short-term borrowings and the impact of one additional day in the second quarter. Net interest margin for the second quarter of 2025 was 3.35%, an increase of 16 basis points from the first quarter of 2025. LHI, excluding mortgage finance, yields decreased 4 basis points from the first quarter of 2025 and LHI, mortgage finance, yields increased 49 basis points from the first quarter of 2025. Total cost of deposits was 2.65% for the second quarter of 2025, an 11 basis point decrease from the first quarter of 2025.

Non-interest income for the second quarter of 2025 increased $9.6 million compared to the first quarter of 2025 primarily due to increases in investment banking and advisory fees and trading income, partially offset by a $1.9 million loss on sale of available-for-sale debt securities recognized during the second quarter of 2025.

Non-interest expense for the second quarter of 2025 decreased $12.7 million compared to the first quarter of 2025, primarily due to decreases in salaries and benefits, related to the effect of seasonal payroll expenses that peak in the first quarter, and legal and professional expense, partially offset by an increase in other non-interest expense.

SECOND QUARTER 2025 COMPARED TO SECOND QUARTER 2024

Net income available to common stockholders was $73.0 million, or $1.58 per diluted share, for the second quarter of 2025, compared to $37.4 million, or $0.80 per diluted share, for the second quarter of 2024.

The second quarter of 2025 included a $15.0 million provision for credit losses, reflecting an increase in total LHI and $13.0 million in net charge-offs, partially offset by a decline in criticized loans, compared to a $20.0 million provision for credit losses for the second quarter of 2024.

Net interest income increased to $253.4 million for the second quarter of 2025, compared to $216.6 million for the second quarter of 2024, primarily due to an increase in average earning assets and a decrease in funding costs, partially offset by an increase in average interest bearing liabilities. Net interest margin increased 34 basis points to 3.35% for the second quarter of 2025, as compared to the second quarter of 2024. LHI, excluding mortgage finance, yields decreased 44 basis points compared to the second quarter of 2024 and LHI, mortgage finance yields increased 48 basis points from the second quarter of 2024. Total cost of deposits decreased 34 basis points compared to the second quarter of 2024.

Non-interest income for the second quarter of 2025 increased $3.6 million compared to the second quarter of 2024 primarily due to increases in service charges on deposit accounts, trading income and other non-interest income, partially offset by the loss on sale of available-for-sale debt securities mentioned above.

Non-interest expense for the second quarter of 2025 increased $1.9 million compared to the second quarter of 2024, primarily due to increases in salaries and benefits, occupancy expense and communications and technology expense, partially offset by a decrease in marketing expense.

CREDIT QUALITY

Net charge-offs of $13.0 million were recorded during the second quarter of 2025, compared to net charge-offs of $9.8 million and $12.0 million during the first quarter of 2025 and the second quarter of 2024, respectively. Criticized loans totaled $637.5 million at June 30, 2025, compared to $762.9 million at March 31, 2025 and $859.7 million at June 30, 2024. Non-accrual LHI totaled $113.6 million at June 30, 2025, compared to $93.6 million at March 31, 2025 and $85.0 million at June 30, 2024. The ratio of non-accrual LHI to total LHI for the second quarter of 2025 was 0.47%, compared to 0.42% for the first quarter of 2025 and 0.39% for the second quarter of 2024. The ratio of total allowance for credit losses to total LHI was 1.40% at June 30, 2025, compared to 1.48% and 1.44% at March 31, 2025 and June 30, 2024, respectively.

REGULATORY RATIOS AND CAPITAL

All regulatory ratios continue to be in excess of “well capitalized” requirements as of June 30, 2025. CET1, tier 1 capital, total capital and leverage ratios were 11.4%, 12.9%, 15.3% and 11.8%, respectively, at June 30, 2025, compared to 11.6%, 13.1%, 15.6% and 11.8%, respectively, at March 31, 2025 and 11.6%, 13.1%, 15.7% and 12.2%, respectively, at June 30, 2024. At June 30, 2025, our ratio of tangible common equity to total tangible assets was 10.1%, compared to 10.0% at March 31, 2025 and 9.6% at June 30, 2024.

During the second quarter of 2025, the Company repurchased 317,860 shares of its common stock for an aggregate purchase price, including excise tax expense, of $21.0 million, at a weighted average price of $65.50 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 or other geopolitical conflicts, 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.

(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.

(1) Interim period ratios are annualized.

(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.

(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.

CONTACT: INVESTOR CONTACT
Jocelyn Kukulka, 469.399.8544
[email protected]

MEDIA CONTACT
Julia Monter, 469.399.8425
[email protected]