DALLAS, April 17, 2019 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the first quarter of 2019.

“We begin 2019 with strong operating results," said Keith Cargill, CEO. "Our first quarter earnings highlight improvements in key performance metrics, including positive operating leverage which we attribute to strategic initiatives put in place last year. We are confident in continuing to deliver on key strategic initiatives to diversify and reduce the cost of our deposits and build on our reputation for delivering a premier client experience, not simply transactions."

• Loans held for investment ("LHI"), excluding mortgage finance loans, increased 2% on a linked quarter basis (increasing 1% on an average basis) and 8% from the first quarter of 2018 (increasing 9% on an average basis).
• Total mortgage finance loans, including mortgage correspondent aggregation ("MCA") loans held for sale ("LHS"), increased 5% on a linked quarter basis (decreasing 1% on an average basis) and increased 42% from the first quarter of 2018 (increasing 33% on an average basis).
• Demand deposits decreased 8% and total deposits remained flat on a linked quarter basis (decreased 6% and increased 1%, respectively, on an average basis), and decreased 9% and increased 10%, respectively, from the first quarter of 2018 (decreased 14% and increased 8%, respectively, on an average basis).
• Net income increased 15% on a linked quarter basis and increased 15% from the first quarter of 2018.
• EPS increased 16% on a linked quarter basis and increased 16% from the first quarter of 2018.

FINANCIAL SUMMARY
(Dollars and shares in thousands)

	Q1 2019				Q1 2018				% Change
QUARTERLY OPERATING RESULTS
Net income	$	82,839			$	71,945			15	%
Net income available to common stockholders	$	80,401			$	69,507			16	%
Diluted EPS	$	1.60			$	1.38			16	%
Diluted shares	50,345				50,353				—	%
ROA	1.26		%		1.22		%
ROE	13.58		%		13.39		%
BALANCE SHEET
LHS	$	1,901,637			$	1,088,565			75	%
LHI, mortgage finance	6,299,710				4,689,938				34	%
LHI	17,061,590				15,741,772				8	%
Total LHI	23,361,300				20,431,710				14	%
Total loans	25,262,937				21,520,275				17	%
Total assets	28,383,111				24,449,147				16	%
Demand deposits	6,743,607				7,413,340				(9	)%
Total deposits	20,650,127				18,764,533				10	%
Stockholders’ equity	2,581,942				2,273,429				14	%

DETAILED FINANCIALS
For the first quarter of 2019, net income was $82.8 million and net income available to common stockholders was $80.4 million, compared to net income of $71.9 million and net income available to common stockholders of $69.5 million for the same period in 2018. On a fully diluted basis, earnings per common share were $1.60 for the quarter ended March 31, 2019 compared to $1.38 for the same period of 2018. The increases reflect a $10.9 million increase in net income primarily driven by increases in net interest income and non-interest income for the first quarter of 2019 compared to the first quarter of 2018, partially offset by increases in the provision for credit losses and non-interest expense.

Return on common equity ("ROE") was 13.58 percent and return on average assets ("ROA") was 1.26 percent for the first quarter of 2019, compared to 11.82 percent and 1.09 percent, respectively, for the fourth quarter of 2018 and 13.39 percent and 1.22 percent, respectively, for the first quarter of 2018. The linked quarter increases in ROE and ROA for the first quarter of 2019 resulted primarily from the decrease in the provision for credit losses and increase in non-interest income, offset by the increase in non-interest expense.

Net interest income was $235.6 million for the first quarter of 2019, compared to $240.7 million for the fourth quarter of 2018 and $210.3 million for the first quarter of 2018. The linked quarter decrease in net interest income was due primarily to the decrease in day count in the quarter. The year-over-year increase in net interest income was due primarily to increases in loan yields and growth in average total loans, partially offset by increases in average interest-bearing deposits and cost of deposits. Net interest margin for the first quarter of 2019 was 3.73 percent, a decrease of 5 basis points from the fourth quarter of 2018 and an increase of 2 basis points from the first quarter of 2018. LHI, excluding mortgage finance loans, yields increased 10 basis points from the fourth quarter of 2018, and increased 68 basis points compared to the first quarter of 2018. Mortgage finance loans, excluding MCA loans, yields for the first quarter of 2019 increased 9 basis points compared to the fourth quarter of 2018 and increased 11 basis points compared to the first quarter of 2018. Total cost of deposits for the first quarter of 2019 increased 16 basis points to 1.33 percent compared to 1.17 percent for the fourth quarter of 2018, and increased 67 basis points from 0.66 percent for the first quarter of 2018.

Average LHI, excluding mortgage finance loans, for the first quarter of 2019 were $16.9 billion, an increase of $222.9 million, or 1 percent, from the fourth quarter of 2018 and an increase of $1.4 billion, or 9 percent, from the first quarter of 2018. Average total mortgage finance loans, including MCA loans, for the first quarter of 2019 were $7.1 billion, a decrease of $41.8 million, or 1 percent, from the fourth quarter of 2018 and an increase of $1.8 billion, or 33 percent, from the first quarter of 2018.

Average total deposits for the first quarter of 2019 increased $136.1 million, or 1 percent, from the fourth quarter of 2018 and increased $1.6 billion, or 8 percent, from the first quarter of 2018. Average demand deposits for the first quarter of 2019 decreased $415.3 million, or 6 percent, to $7.0 billion from $7.5 billion for the fourth quarter of 2018, and decreased $1.1 billion, or 14 percent, from the first quarter of 2018 as a result of the rising interest rate environment and the shift to interest-bearing deposits.

We recorded a $20.0 million provision for credit losses for the first quarter of 2019 compared to $35.0 million for the fourth quarter of 2018 and $12.0 million for the first quarter of 2018. The provision for the first quarter of 2019 was driven by the consistent application of our methodology. The linked quarter decrease resulted from a decrease in charge-offs during the first quarter of 2019 compared to the fourth quarter of 2018, partially offset by an increase in non-accrual loans. The total allowance for credit losses at March 31, 2019 increased to 0.93 percent of LHI, compared to 0.90 percent at December 31, 2018 and decreased from 0.98 percent at March 31, 2018. In management’s opinion, the allowance is appropriate and is derived from consistent application of the methodology for establishing reserves for the loan portfolio.

We experienced an increase in non-performing assets ("NPAs") in the first quarter of 2019 compared to the fourth quarter of 2018 and first quarter of 2018. The ratio of total NPAs to total LHI plus other real estate owned ("OREO") for the first quarter of 2019 was 0.57 percent, compared to 0.36 percent for the fourth quarter of 2018 and 0.65 percent for the first quarter of 2018. Net charge-offs for the first quarter of 2019 were $4.6 million compared to $32.6 million for the fourth quarter of 2018 and $5.2 million for the first quarter of 2018. For the first quarter of 2019, net charge-offs were 0.09 percent of average total LHI, compared to 0.60 percent for the fourth quarter of 2018 and 0.11 percent for the same period in 2018.

Non-interest income increased $14.7 million, or 96 percent, during the first quarter of 2019 compared to the fourth quarter of 2018, and increased $10.1 million, or 50 percent, compared to the first quarter of 2018. The linked quarter increase is primarily related to increases in the net gain on sale of loans held for sale and other non-interest income, primarily due to an $8.5 million legal claim settled during the first quarter of 2019. The year-over-year increase primarily related to increases in the net gain on sale of loans and other non-interest income, primarily due to an $8.5 million legal claim settled during the first quarter of 2019, offset by a decrease in servicing income.

Non-interest expense for the first quarter of 2019 increased $10.5 million, or 8 percent, compared to the fourth quarter of 2018, and increased $13.4 million, or 11 percent, compared to the first quarter of 2018. The linked quarter increase in non-interest expense was primarily related to increases in salaries and employee benefits, marketing and servicing related expenses, offset by a decrease in legal and professional expenses. The year-over-year increase was primarily due to increases in salaries and employee benefits, marketing, legal and professional and communications and technology expenses, offset by a $2.2 million decrease in allowance and other carrying costs for OREO related to the decline in OREO properties held.

Stockholders’ equity increased by 14 percent from $2.3 billion at March 31, 2018 to $2.6 billion at March 31, 2019, primarily due to the retention of net income. Texas Capital Bank is well capitalized under regulatory guidelines. At March 31, 2019, our ratio of tangible common equity to total tangible assets was 8.5% percent.

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, a commercial bank that delivers highly personalized financial services to businesses and entrepreneurs. 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 management’s current estimates or expectations of future events or future results. These statements are not historical in nature and can generally be identified by such words as “believe,” “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “intend” and similar expressions. A number of factors, many of which are beyond our 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 credit quality of our loan portfolio, general economic conditions in the United States and in our markets, including the continued impact on our customers from volatility in oil and gas prices, expectations regarding rates of default and loan losses, volatility in the mortgage industry, our business strategies and our expectations about future financial performance, future growth and earnings, the appropriateness of our allowance for loan losses and provision for credit losses, the impact of changing regulatory requirements and legislative changes on our business, increased competition, interest rate risk, new lines of business, new product or service offerings and new technologies. These and other factors that could cause results to differ materially from those described in the forward-looking statements, as well as a discussion of the risks and uncertainties that may affect our business, can be found in our Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission. The information contained in this release speaks only as of its date. We are under no obligation, and expressly disclaim such obligation, to update, alter or revise our forward-looking statements, whether as a result of new information, future events, or otherwise.

TEXAS CAPITAL BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)
	1st Quarter			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
	2019			2018			2018			2018			2018
CONSOLIDATED STATEMENTS OF INCOME
Interest income	$	325,561		$	321,718		$	301,754		$	286,852		$	253,869
Interest expense	89,947			81,045			69,579			55,140			43,569
Net interest income	235,614			240,673			232,175			231,712			210,300
Provision for credit losses	20,000			35,000			13,000			27,000			12,000
Net interest income after provision for credit losses	215,614			205,673			219,175			204,712			198,300
Non-interest income	30,014			15,280			25,518			17,279			19,947
Non-interest expense	140,378			129,862			136,143			132,131			126,960
Income before income taxes	105,250			91,091			108,550			89,860			91,287
Income tax expense	22,411			19,200			22,998			18,424			19,342
Net income	82,839			71,891			85,552			71,436			71,945
Preferred stock dividends	2,438			2,437			2,438			2,437			2,438
Net income available to common stockholders	$	80,401		$	69,454		$	83,114		$	68,999		$	69,507
Diluted EPS	$	1.60		$	1.38		$	1.65		$	1.38		$	1.38
Diluted shares	50,345,399			50,333,412			50,381,349			50,096,015			50,353,497
CONSOLIDATED BALANCE SHEET DATA
Total assets	$	28,383,111		$	28,257,767		$	27,127,107		$	27,781,910		$	24,449,147
LHI	17,061,590			16,690,550			16,569,538			16,536,721			15,741,772
LHI, mortgage finance	6,299,710			5,877,524			5,477,787			5,923,058			4,689,938
LHS	1,901,637			1,969,474			1,651,930			1,276,768			1,088,565
Liquidity assets(1)	2,154,155			2,865,874			2,615,570			3,288,107			2,296,673
Investment securities	230,749			120,216			117,389			24,408			24,929
Demand deposits	6,743,607			7,317,161			7,031,460			7,648,125			7,413,340
Total deposits	20,650,127			20,606,113			20,385,637			20,334,871			18,764,533
Other borrowings	4,497,892			4,541,174			3,686,818			4,520,849			2,835,540
Subordinated notes	281,858			281,767			281,677			281,586			281,496
Long-term debt	113,406			113,406			113,406			113,406			113,406
Stockholders’ equity	2,581,942			2,500,394			2,426,442			2,343,530			2,273,429
End of period shares outstanding	50,263,611			50,200,710			50,177,260			50,151,064			49,669,774
Book value	$	48.38		$	46.82		$	45.37		$	43.74		$	42.75
Tangible book value(2)	$	48.02		$	46.45		$	45.00		$	43.36		$	42.37
SELECTED FINANCIAL RATIOS
Net interest margin	3.73		%	3.78		%	3.70		%	3.93		%	3.71		%
Return on average assets	1.26		%	1.09		%	1.31		%	1.16		%	1.22		%
Return on average common equity	13.58		%	11.82		%	14.68		%	12.72		%	13.39		%
Non-interest income to average earning assets	0.47		%	0.24		%	0.40		%	0.29		%	0.35		%
Efficiency ratio(3)	52.8		%	50.7		%	52.8		%	53.1		%	55.1		%
Non-interest expense to average earning assets	2.21		%	2.03		%	2.15		%	2.23		%	2.23		%
Tangible common equity to total tangible assets(4)	8.5		%	8.3		%	8.3		%	7.8		%	8.6		%
Common Equity Tier 1	8.6		%	8.6		%	8.6		%	8.3		%	8.8		%
Tier 1 capital	9.6		%	9.5		%	9.6		%	9.3		%	9.9		%
Total capital	11.4		%	11.3		%	11.5		%	11.1		%	11.9		%
Leverage	10.0		%	9.9		%	9.7		%	9.9		%	9.9		%

(1)  Liquidity assets include Federal funds sold and interest-bearing deposits in other banks.
(2)  Stockholders’ equity excluding preferred stock, less goodwill and intangibles, divided by shares outstanding at period end.
(3)  Non-interest expense divided by the sum of net interest income and non-interest income.
(4)  Stockholders’ equity excluding preferred stock and accumulated other comprehensive income less goodwill and intangibles divided by total assets less accumulated other comprehensive income and goodwill and intangibles.

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
	March 31, 2019			March 31, 2018			% Change
Assets
Cash and due from banks	$	177,137		$	154,497		15	%
Interest-bearing deposits	2,129,155			2,271,673			(6	)%
Federal funds sold and securities purchased under resale agreements	25,000			25,000			—	%
Securities, available-for-sale	230,749			24,929			826	%
LHS, at fair value	1,901,637			1,088,565			75	%
LHI, mortgage finance	6,299,710			4,689,938			34	%
LHI (net of unearned income)	17,061,590			15,741,772			8	%
Less:  Allowance for loan losses	208,573			190,898			9	%
LHI, net	23,152,727			20,240,812			14	%
Mortgage servicing rights, net	44,088			76,561			(42	)%
Premises and equipment, net	24,200			27,564			(12	)%
Accrued interest receivable and other assets	679,966			520,624			31	%
Goodwill and intangibles, net	18,452			18,922			(2	)%
Total assets	$	28,383,111		$	24,449,147		16	%
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing	$	6,743,607		$	7,413,340		(9	)%
Interest bearing	13,906,520			11,351,193			23	%
Total deposits	20,650,127			18,764,533			10	%
Accrued interest payable	24,488			5,174			373	%
Other liabilities	233,398			175,569			33	%
Federal funds purchased and repurchase agreements	897,892			535,540			68	%
Other borrowings	3,600,000			2,300,000			57	%
Subordinated notes, net	281,858			281,496			—	%
Trust preferred subordinated debentures	113,406			113,406			—	%
Total liabilities	25,801,169			22,175,718			16	%
Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - 6,000,000 shares issued at March 31, 2019 and 2018	150,000			150,000			—	%
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 50,264,028 and 49,670,191 at March 31, 2019 and 2018, respectively	503			497			1	%
Additional paid-in capital	969,079			962,553			1	%
Retained earnings	1,461,893			1,159,925			26	%
Treasury stock (shares at cost: 417 at March 31, 2019 and 2018)	(8		)	(8		)	—	%
Accumulated other comprehensive income, net of taxes	475			462			3	%
Total stockholders’ equity	2,581,942			2,273,429			14	%
Total liabilities and stockholders’ equity	$	28,383,111		$	24,449,147		16	%

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
	Three Months Ended March 31,
	2019			2018
Interest income
Interest and fees on loans	$	312,703		$	243,864
Investment securities	1,460			206
Federal funds sold and securities purchased under resale agreements	379			1,045
Interest-bearing deposits in other banks	11,019			8,754
Total interest income	325,561			253,869
Interest expense
Deposits	69,054			31,702
Federal funds purchased	3,516			969
Other borrowings	11,854			5,680
Subordinated notes	4,191			4,191
Trust preferred subordinated debentures	1,332			1,027
Total interest expense	89,947			43,569
Net interest income	235,614			210,300
Provision for credit losses	20,000			12,000
Net interest income after provision for credit losses	215,614			198,300
Non-interest income
Service charges on deposit accounts	2,979			3,137
Wealth management and trust fee income	2,009			1,924
Brokered loan fees	5,066			5,168
Servicing income	2,734			5,492
Swap fees	1,031			1,562
Net gain/(loss) on sale of LHS	(505		)	(2,173		)
Other	16,700			4,837
Total non-interest income	30,014			19,947
Non-interest expense
Salaries and employee benefits	77,823			72,537
Net occupancy expense	7,879			7,234
Marketing	11,708			8,677
Legal and professional	10,030			7,530
Communications and technology	9,198			6,633
FDIC insurance assessment	5,122			6,103
Servicing related expenses	5,382			3,805
Allowance and other carrying costs for OREO	—			2,155
Other	13,236			12,286
Total non-interest expense	140,378			126,960
Income before income taxes	105,250			91,287
Income tax expense	22,411			19,342
Net income	82,839			71,945
Preferred stock dividends	2,438			2,438
Net income available to common stockholders	$	80,401		$	69,507
Basic earnings per common share	$	1.60		$	1.40
Diluted earnings per common share	$	1.60		$	1.38

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
	1st Quarter			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
	2019			2018			2018			2018			2018
Allowance for loan losses:
Beginning balance	$	191,522		$	190,306		$	179,096		$	190,898		$	184,655
Loans charged-off:
Commercial	4,865			34,419			1,301			38,305			5,667
Real estate	—			—			—			—			—
Construction	—			—			—			—			—
Consumer	—			—			767			—			—
Leases	—			—			319			—			—
Total charge-offs	4,865			34,419			2,387			38,305			5,667
Recoveries:
Commercial	266			1,399			389			320			360
Real estate	—			26			11			8			24
Construction	—			—			—			—			—
Consumer	10			360			10			9			59
Leases	1			1			12			1			19
Total recoveries	277			1,786			422			338			462
Net charge-offs	4,588			32,633			1,965			37,967			5,205
Provision for loan losses	21,639			33,849			13,175			26,165			11,448
Ending balance	$	208,573		$	191,522		$	190,306		$	179,096		$	190,898
Allowance for off-balance sheet credit losses:
Beginning balance	$	11,434		$	10,283		$	10,458		$	9,623		$	9,071
Provision for off-balance sheet credit losses	(1,639		)	1,151			(175		)	835			552
Ending balance	$	9,795		$	11,434		$	10,283		$	10,458		$	9,623
Total allowance for credit losses	$	218,368		$	202,956		$	200,589		$	189,554		$	200,521
Total provision for credit losses	$	20,000		$	35,000		$	13,000		$	27,000		$	12,000
Allowance for loan losses to LHI	0.89		%	0.85		%	0.86		%	0.80		%	0.93		%
Allowance for loan losses to average LHI	0.96		%	0.88		%	0.87		%	0.86		%	0.98		%
Net charge-offs to average LHI(1)	0.09		%	0.60		%	0.04		%	0.73		%	0.11		%
Net charge-offs to average LHI for last twelve months(1)	0.36		%	0.37		%	0.22		%	0.28		%	0.15		%
Total provision for credit losses to average LHI(1)	0.37		%	0.64		%	0.24		%	0.52		%	0.25		%
Total allowance for credit losses to LHI	0.93		%	0.90		%	0.91		%	0.84		%	0.98		%

(1)  Interim period ratios are annualized.

TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF NON-PERFORMING ASSETS AND PAST DUE LOANS
(Dollars in thousands)
	1st Quarter			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
	2019			2018			2018			2018			2018
Non-performing assets (NPAs):
Non-accrual loans	$	133,690		$	80,375		$	107,532		$	83,295		$	123,542
Other real estate owned (OREO)	—			79			79			9,526			9,558
Total LHI NPAs	$	133,690		$	80,454		$	107,611		$	92,821		$	133,100
Non-accrual loans to LHI	0.57		%	0.36		%	0.49		%	0.37		%	0.60		%
Total LHI NPAs to LHI plus OREO	0.57		%	0.36		%	0.49		%	0.41		%	0.65		%
Total LHI NPAs to earning assets	0.49		%	0.29		%	0.41		%	0.35		%	0.56		%
Allowance for loan losses to non-accrual loans		1.6x			2.4x			1.8x			2.2x			1.5x
Loans past due 90 days and still accruing(1)	$	12,245		$	9,353		$	11,295		$	7,357		$	13,563
Loans past due 90 days to LHI	0.05		%	0.04		%	0.05		%	0.03		%	0.07		%
LHS past due 90 days and still accruing(2)	$	13,693		$	16,829		$	25,238		$	27,858		$	35,226

(1)  At March 31, 2019, loans past due 90 days and still accruing includes premium finance loans of $12.0 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on canceled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.
(2)  Includes loans guaranteed by U.S. government agencies that were repurchased out of Ginnie Mae securities. Loans are recorded as LHS and carried at fair value on the balance sheet. Interest on these past due loans accrues at the debenture rate guaranteed by the U.S. government. Also includes loans that, pursuant to Ginnie Mae servicing guidelines, we have the unilateral right, but not obligation, to repurchase and thus must record as LHS on our balance sheet regardless of whether the repurchase option has been exercised.

TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands)
	1st Quarter			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
	2019			2018			2018			2018			2018
Interest income
Interest and fees on loans	$	312,703		$	310,470		$	291,189		$	279,447		$	243,864
Investment securities	1,460			1,274			1,161			193			206
Federal funds sold and securities purchased under resale agreements	379			984			1,018			745			1,045
Interest-bearing deposits in other banks	11,019			8,990			8,386			6,467			8,754
Total interest income	325,561			321,718			301,754			286,852			253,869
Interest expense
Deposits	69,054			61,773			52,034			39,607			31,702
Federal funds purchased	3,516			2,097			1,800			1,665			969
Other borrowings	11,854			11,726			10,317			8,484			5,680
Subordinated notes	4,191			4,191			4,191			4,191			4,191
Trust preferred subordinated debentures	1,332			1,258			1,237			1,193			1,027
Total interest expense	89,947			81,045			69,579			55,140			43,569
Net interest income	235,614			240,673			232,175			231,712			210,300
Provision for credit losses	20,000			35,000			13,000			27,000			12,000
Net interest income after provision for credit losses	215,614			205,673			219,175			204,712			198,300
Non-interest income
Service charges on deposit accounts	2,979			3,168			3,477			3,005			3,137
Wealth management and trust fee income	2,009			2,152			2,065			2,007			1,924
Brokered loan fees	5,066			5,408			6,141			5,815			5,168
Servicing income	2,734			2,861			4,987			4,967			5,492
Swap fees	1,031			1,356			1,355			1,352			1,562
Net gain/(loss) on sale of LHS	(505		)	(8,087		)	(444		)	(5,230		)	(2,173		)
Other	16,700			8,422			7,937			5,363			4,837
Total non-interest income	30,014			15,280			25,518			17,279			19,947
Non-interest expense
Salaries and employee benefits	77,823			69,500			77,327			72,404			72,537
Net occupancy expense	7,879			7,390			8,362			7,356			7,234
Marketing	11,708			10,208			10,214			10,236			8,677
Legal and professional	10,030			13,042			10,764			11,654			7,530
Communications and technology	9,198			8,845			7,435			7,143			6,633
FDIC insurance assessment	5,122			5,423			6,524			6,257			6,103
Servicing related expenses	5,382			2,555			4,207			4,367			3,805
Allowance and other carrying costs for OREO	—			7			(1,864		)	176			2,155
Other	13,236			12,892			13,174			12,538			12,286
Total non-interest expense	140,378			129,862			136,143			132,131			126,960
Income before income taxes	105,250			91,091			108,550			89,860			91,287
Income tax expense	22,411			19,200			22,998			18,424			19,342
Net income	82,839			71,891			85,552			71,436			71,945
Preferred stock dividends	2,438			2,437			2,438			2,437			2,438
Net income available to common shareholders	$	80,401		$	69,454		$	83,114		$	68,999		$	69,507

TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
(Dollars in thousands)
	1st Quarter 2019									4th Quarter 2018									3rd Quarter 2018									2nd Quarter 2018									1st Quarter 2018
	Average Balance			Revenue/ Expense			Yield/ Rate			Average Balance			Revenue/ Expense			Yield/ Rate			Average Balance			Revenue/ Expense			Yield/ Rate			Average Balance			Revenue/ Expense			Yield/ Rate			Average Balance			Revenue/ Expense			Yield/ Rate
Assets
Investment securities - Taxable	$	30,625		$	274		3.62	%		$	23,977		$	259		4.29	%		$	24,221		$	191		3.14	%		$	24,514		$	193		3.15	%		$	23,854		$	206		3.50	%
Investment securities - Non-taxable(2)	114,341			1,501			5.33	%		93,394			1,285			5.46	%		91,298			1,228			5.33	%		—			—			—	%		—			—			—	%
Federal funds sold and securities purchased under resale agreements	63,652			379			2.41	%		173,654			984			2.25	%		203,972			1,018			1.98	%		166,613			745			1.79	%		261,641			1,045			1.62	%
Interest-bearing deposits in other banks	1,823,106			11,019			2.45	%		1,585,763			8,990			2.25	%		1,697,787			8,386			1.96	%		1,498,474			6,467			1.73	%		2,302,938			8,754			1.54	%
LHS, at fair value	2,122,302			25,303			4.84	%		2,049,395			24,407			4.72	%		1,484,459			17,272			4.62	%		1,516,047			17,026			4.50	%		1,187,594			12,535			4.28	%
LHI, mortgage finance loans	4,931,879			46,368			3.81	%		5,046,540			47,305			3.72	%		5,443,829			49,715			3.62	%		4,898,411			47,056			3.85	%		4,097,995			37,362			3.70	%
LHI(1)(2)	16,866,456			242,155			5.82	%		16,643,559			239,995			5.72	%		16,331,622			225,604			5.48	%		15,883,317			216,755			5.47	%		15,425,323			195,333			5.14	%
Less allowance for loan losses	192,122			—			—			182,814			—			—			179,227			—			—			189,238			—			—			184,238			—			—
LHI, net of allowance	21,606,213			288,523			5.42	%		21,507,285			287,300			5.30	%		21,596,224			275,319			5.06	%		20,592,490			263,811			5.14	%		19,339,080			232,695			4.88	%
Total earning assets	25,760,239			326,999			5.15	%		25,433,468			323,225			5.04	%		25,097,961			303,414			4.80	%		23,798,138			288,242			4.86	%		23,115,107			255,235			4.48	%
Cash and other assets	894,797									828,156									877,954									808,099									797,506
Total assets	$	26,655,036								$	26,261,624								$	25,975,915								$	24,606,237								$	23,912,613
Liabilities and Stockholders’ Equity
Transaction deposits	$	3,263,976		$	16,001		1.99	%		$	3,233,960		$	15,150		1.86	%		$	3,253,310		$	13,642		1.66	%		$	2,889,834		$	10,295		1.43	%		$	2,792,954		$	8,651		1.26	%
Savings deposits	8,751,200			41,673			1.93	%		8,354,332			36,913			1.75	%		7,820,742			29,930			1.52	%		7,784,937			25,454			1.31	%		7,982,256			21,958			1.12	%
Time deposits	2,010,476			11,380			2.30	%		1,886,016			9,710			2.04	%		1,778,831			8,462			1.89	%		979,735			3,858			1.58	%		506,375			1,093			0.88	%
Total interest bearing deposits	14,025,652			69,054			2.00	%		13,474,308			61,773			1.82	%		12,852,883			52,034			1.61	%		11,654,506			39,607			1.36	%		11,281,585			31,702			1.14	%
Other borrowings	2,412,254			15,370			2.58	%		2,290,520			13,823			2.39	%		2,275,640			12,117			2.11	%		2,113,391			10,149			1.93	%		1,721,914			6,649			1.57	%
Subordinated notes	281,799			4,191			6.03	%		281,708			4,191			5.90	%		281,619			4,191			5.90	%		281,527			4,191			5.97	%		281,437			4,191			6.04	%
Trust preferred subordinated debentures	113,406			1,332			4.76	%		113,406			1,258			4.40	%		113,406			1,237			4.33	%		113,406			1,193			4.22	%		113,406			1,027			3.67	%
Total interest bearing liabilities	16,833,111			89,947			2.17	%		16,159,942			81,045			1.99	%		15,523,548			69,579			1.78	%		14,162,830			55,140			1.56	%		13,398,342			43,569			1.32	%
Demand deposits	7,047,120									7,462,392									7,940,503									8,017,578									8,147,721
Other liabilities	223,142									157,278									116,302									100,074									110,698
Stockholders’ equity	2,551,663									2,482,012									2,395,562									2,325,755									2,255,852
Total liabilities and stockholders’ equity	$	26,655,036								$	26,261,624								$	25,975,915								$	24,606,237								$	23,912,613
Net interest income(2)				$	237,052								$	242,180								$	233,835								$	233,102								$	211,666
Net interest margin							3.73	%								3.78	%								3.70	%								3.93	%								3.71	%

(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.

INVESTOR CONTACT
Heather Worley, 214.932.6646
heather.worley@texascapitalbank.com