Texas Capital Bancshares (TCBI) 8-K Texas Capital Bancshares, Inc. Announces Operating Results for Q2 2014

July 23, 2014

TCBI Q2 2014

Earnings

Exhibit 99.2

Certain matters discussed on this call may contain forward-looking statements, which are subject to risks and uncertainties

and 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 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 Annual Report

on Form 10-K and other filings made by Texas Capital with the Securities and Exchange Commission.

2

Opening Remarks & Financial Highlights

3

Core

Earnings

Power

Strong

Balanced

Growth

Credit

Quality

•

Solid growth in traditional LHI balances despite highly competitive C&I market

•

Exceptional growth in Mortgage finance loans (MFLs)

•

Continued strong growth in deposits, improving low-cost funding composition

•

Asset sensitive position enhanced

•

Average DDA growth particularly strong in Q2-2014

•

Growth in total loans produced strong growth in net revenue

•

Operating leverage improved with rate of growth in net revenue greater than NIE

•

Business

model

focused

on

organic

growth

demonstrates

ability

to

produce

high

returns on invested capital following offerings in Q1-2014

•

Growth driven by improvement in market share with increased capacity resulting from

success in recruiting and product extension

•

Credit metrics remain strong

•

NCOs at 11 bps in Q2-2014

•

NPAs well below pre-crisis levels

•

High allowance coverage ratios

•

Provision primarily related to growth in core LHI

0

100,000

200,000

300,000

400,000

500,000

2009

2010

2011

2012

2013

Q2-2014*

Non-interest Income

Net Interest Income

Non-interest Expense

Revenue & Expense

4

•

Strong capacity for net revenue

•

Growth in total loans at spreads above 4.00%

•

Increased 6% from Q1-2014

•

Increased 12% from Q2-2013 despite increased sub

debt expense

•

High returns maintained

•

Modest reduction in margin as a result of loan

growth and higher proportion of MF loans to

total loans

•

Improved operating leverage in Q2-2014 with

more modest growth in non-interest expense

•

Continued build-out expense related to

recruiting, product extension and support

costs associated with growth

•

Provision expense related to growth

represents net interest income contribution of

loan growth for 3+ months

•

Organic growth produced improvements in

ROA and ROE

Revenue & Expense Trends

Revenue & Expense Highlights

Operating Revenue CAGR: 19%

Net

Interest

Income

CAGR:

20%

Non-interest Income CAGR: 8%

Non-interest Expense CAGR: 15%

Net Income CAGR: 43%

* Annualized based on 6/30/14 data.

Net Interest Income & Margin

5

•

Net interest income growth of 7%

from Q1-2014 and 14% from Q2-

2013

•

Yields on traditional LHI down

modestly with solid growth

•

Benefit of MFL growth on NII

•

Growth in MFLs and change in

composition of total loans had

impact of 4 bps on NIM

•

Core funding costs -

deposits and

borrowed funds -

stable at 17 bps

•

Effective utilization of liquidity

growth in Q1-2014

•

Emphasis on building liquidity will

continue

Net Interest Income & Margin Trends

NIM Highlights

Net Interest income ($MM)

Net Interest Margin (%)

Earning Asset Yield (%)

Total Loan Spread (%)

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

6.00%

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Analysis of Net Interest Income & Expenses

6

NII ($MM)

NIM (%)

$108.4

Q1 2014

3.99%

(2.4)

Decrease in LHI net loan yields

(.08)

(1.3)

Mix shift from LHI to MF

(.04)

(.9)

Full quarter of sub debt expense

(.03)

(.4)

Decrease in MF loan yields

(.01)

1.3

Impact of increase in day count

-

10.3

Impact of increase in earning

assets

-

-

Decrease in liquidity

.03

.4

Other

.01

$115.4

Q2 2014

3.87%

Non interest expense ($MM)

Linked quarter

increases/

(decreases)

Q1 2014

$69.3

FICA

(1.9)

FAS 123R change (related to price)

(1.6)

Legal and professional (varies by

quarter)

1.8

Incentive (normal ramp-up)

1.4

Salaries (continued build out)

1.0

All other

(.2)

Q2 2014

$69.8

Performance Summary

7

(in thousands)

Q2 2014

Q1 2014

Q4 2013

Q3 2013

Q2 2013

Net interest income

$  115,407

$  108,315

$  111,475

$  108,776

$  101,220

Non-interest income

10,533

10,356

11,184

10,431

11,128

Net revenue

125,940

118,671

122,659

119,207

112,348

Provision for credit losses

4,000

5,000

5,000

5,000

7,000

OREO valuation and write-down expense

-

-

466

-

383

Total provision  and OREO valuation

4,000

5,000

5,466

5,000

7,383

Non-interest expense

69,768

69,321

69,825

62,009

68,351

Income before income taxes

52,172

44,350

47,368

52,198

36,614

Income tax expense

18,754

16,089

17,012

18,724

12,542

Net income

33,418

28,261

30,356

33,474

24,072

Preferred stock dividends

2,437

2,438

2,438

2,437

2,438

Net income available to common shareholders

$   30,981

$   25,823

$   27,918

$   31,037

$   21,634

Diluted EPS

$         .71

$         .60

$         .67

$         .74

$         .52

Net interest margin

3.87%

3.99%

4.21%

4.21%

4.19%

ROA

1.08%

1.01%

1.10%

1.25%

0.95%

ROE

11.38%

10.20%

11.94%

13.74%

9.94%

Efficiency

(1)

55.4%

58.4%

56.9%

52.0%

60.8%

(1)  Excludes OREO valuation charge

2014 Outlook

8

Business Driver

2014 Outlook v. 2013 Results

Changes since June 10, 2014

Average  LHI

Low 20s percent growth, pace declining

Increased from mid to high teens

Average LHI-

Mortgage

Finance

Flat to slight increase, outperforming

industry

Increased from flat to down

Average Deposits

Low 20's percent growth

Increased from high teens to low 20’s

Liquidity Assets

Growth with 5-8 bps  impact on NIM;

impact increasing in second half of 2014

with minimal impact on net interest

income

Increased from 5bps or less

Net Interest Income

Low double digit percent growth

-

Net Interest Margin

3.80% to 3.90%, driven by growth and

above peer

-

Net Charge-Offs

Less than 0.15%, and continued strong

credit quality

-

NIE

High single-digit to low double-digit

percent growth

-

Efficiency Ratio

Less than 55%, slight reduction from

2013

-

Loan & Deposit Growth

9

•

Broad-based

growth

in

average

traditional

LHI

–

Growth

of

$266.3

million

(3%)

from

Q1-2014

and

$1.8

billion

(26%)

from Q2-2013.  Period-end balance $168.5 million higher than Q2-2014 average balance and 22% above Q2-2013 period-

end balance.  Quarter-end balance is 22% above average for all of 2013

•

MF performance exceeded industry trends with increase in averages of 39% from Q1-2014

•

Average DDA increased 7% from Q1-2014 and 25% from Q2-2013; total average deposits increased 5% from Q1-2014

and 24% from Q2-2013

Growth Highlights

Balance Trends

Total Loan Composition

($12.9 Billion at 6/30/14)

Demand Deposit CAGR: 41%

Total Deposit CAGR: 24%

Loans Held for Investment CAGR: 17%

0

2,000

4,000

6,000

8,000

10,000

12,000

2009

2010

2011

2012

2013

2014

Business

Assets

29%

Energy

6%

Highly Liquid

Assets

1%

Mortgage 

Finance

22%

Other Assets

3%

Comml. R/E

Mkt. Risk

17%

Residential

R/E Mkt. Risk

8%

Owner

Occupied R/E

5%

Unsecured

2%

Demand Deposits

Interest Bearing Deposits

Loans HFI

Asset Quality

10

•

Total credit cost of $4.0 million for Q2-2014,

compared

to

$5.0

million

in

Q1-2014

and

$7.4

million

in Q2-2013

•

NCOs $2.5 million, or 11 bps, in Q2-2014 compared

to

10

bps

in

Q1-2014

and

13

bps

in

Q2-2013

•

No OREO valuation charge in Q2-2014 or Q1-2014

compared to $383,000 in Q2-2013

•

Reduction in NPAs and ORE now less than $1 million

Asset Quality Highlights

Non-accrual loans

Q2-2014

Commercial

$         25,545

Construction

–

Real estate

15,998

Consumer

–

Equipment leases

22

Total non-accrual loans

41,565

Non-accrual loans as % of loans

excluding MF

.45%

Non-accrual loans as % of total

loans

.32%

OREO

685

Total Non-accruals + OREO

$         42,250

Non-accrual loans + OREO as %

of loans excluding MF + OREO

.46%

Reserve to non-accrual loans

2.2x

NCO / Average Traditional LHI

1.14%

0.58%

0.10%

0.07%

0.10%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

2010

2011

2012

2013

2014

EPS Growth

11

2009^

2010

2011

2012

2013

YTD

6/30/2014

^Excludes $.15 effect of preferred TARP dividend during

2009. Reported EPS was $0.56.

EPS Growth

(5-yr CAGR of 41%)

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$0.71

$1.00

$1.99

$3.01

$2.72

$1.30

Closing Comments

•

Proven organic growth business model continues to produce in challenging

environment

•

Solid core earnings power and strong asset growth expected to continue in

2014 and beyond

•

Continue to be highly asset sensitive based on how we run our business; now

better positioned to take advantage of increases in short-term rates

•

Successful track record of talent acquisition

•

Excellent credit quality position maintained

•

Mortgage Finance clearly exceeding industry trends with improved

market

position

12

Q&A

13

Appendix

14

Average Balances, Yields & Rates -

Quarterly

15

(in thousands)

Q2 2014

Q1 2014

Q2 2013

Avg. Bal.

Yield Rate

Avg. Bal.

Yield Rate

Avg. Bal.

Yield Rate

Assets

Securities

$      50,487

4.00%

$      57,581

4.18%

$        78,906

4.42%

Fed funds sold & liquidity investments

198,058

.22%

304,042

.27%

145,625

.20%

Loans held for investment, mortgage finance

2,822,560

3.30%

2,027,264

3.36%

2,406,246

3.74%

Loans held for investment

8,984,230

4.51%

8,717,969

4.61%

7,152,323

4.71%

Total loans, net of reserve

11,716,685

4.25%

10,657,547

4.41%

9,483,563

4.50%

Total earning assets

11,965,230

4.19%

11,019,170

4.29%

8,708,094

4.44%

Total assets

$12,362,168

$11,401,368

$10,110,992

Liabilities and Stockholders’

Equity

Total interest bearing deposits

$  6,326,034

.27%

$  6,105,214

.27%

$  5,130,200

.25%

Other borrowings

666,405

.18%

293,012

.24%

727,158

.20%

Subordinated notes

286,000

5.95%

227,667

6.20%

111,000

6.61%

Long-term debt

113,406

2.19%

113,406

2.20%

113,406

2.24%

Total interest bearing liabilities

7,391,845

.51%

6,739,299

.50%

6,081,764

.40%

Demand deposits

3,629,941

3,381,501

2,914,341

Stockholders’

equity

1,241,787

1,177,054

1,023,279

Total liabilities and stockholders’

equity

$12,362,168

.31%

$11,401,368

.30%

$10,110,992

.24%

Net interest margin

3.87%

3.99%

4.19%

Total deposits and borrowed funds

$10,622,380

.17%

$ 9,779,727

.17%

$  8,771,699

.16%

Loan spread

4.08%

4.24%

4.34%

Average Balance Sheet -

Quarterly

16

(in thousands)

QTD Average

Q2/Q1 %

Change

YOY %

Change

Q2 2014

Q1 2014

Q2 2013

Total assets

$12,362,168

$11,401,368

$10,110,992

8%

22%

Loans held for investment

8,984,230

8,717,969

7,152,323

3%

26%

Loans held for investment, mortgage

finance

2,822,560

2,027,264

2,406,246

39%

17%

Total loans

11,806,790

10,745,233

9,558,569

10%

24%

Securities

50,487

57,581

78,906

(12)%

(36)%

Demand deposits

3,629,941

3,381,501

2,914,341

7%

25%

Total deposits

9,955,975

9,486,715

8,044,541

5%

24%

Stockholders’

equity

1,241,787

1,177,054

1,023,279

5%

21%

Ending Balance Sheet -

Quarterly

17

(in thousands)

Period End

Q2/Q1 %

Change

YOY %

Change

Q2 2014

Q1 2014

Q2 2013

Total assets

$13,532,536

$12,143,296

$10,977,990

11%

23%

Loans held for investment

9,152,715

8,928,033

7,510,662

3%

22%

Loans held for investment, mortgage

finance

3,700,253

2,688,044

2,838,234

38%

30%

Total loans

12,852,968

11,616,077

10,348,896

11%

24%

Securities

49,330

52,960

75,861

(7)%

(35)%

Demand deposits

4,181,774

3,451,294

2,928,735

21%

43%

Total deposits

10,757,316

9,729,128

7,980,598

11%

35%

Stockholders’

equity

1,262,816

1,230,131

1,034,955

3%

22%