Texas Capital Bancshares (TCBI) 8-K Texas Capital Bancshares, Inc. Announces Operating Results for Q1 2015

Exhibit 99.1

April 22, 2015

MEDIA & INVESTOR CONTACT

Heather Worley, 214.932.6646

heather.worley@texascapitalbank.com

TEXAS CAPITAL BANCSHARES, INC. ANNOUNCES OPERATING RESULTS FOR Q1 2015

DALLAS - April 22, 2015 - Texas Capital Bancshares, Inc. (NASDAQ: TCBI), the parent company of Texas Capital Bank, announced earnings and operating results for the first quarter of 2015.

“Our strong start in 2015 is highlighted with outstanding loan and deposit growth, and related earnings,” said Keith Cargill, CEO. “We experienced solid growth in core loans held for investment during the quarter and benefitted from the increase in refinancing activity in our mortgage finance business. The growth in demand and total deposits was exceptional and reflects continued success in our strategy to extend the duration of our low-cost funding. We are encouraged about prospects for the remainder of the year as we work to leverage our talent and capital to produce improving returns for our stockholders.”

• Loans held for investment, excluding mortgage finance, increased 6% and total loans increased 13% on a linked quarter basis, growing 21% and 39%, respectively, from the first quarter of 2014.

• Mortgage finance loans increased 32% on a linked quarter basis and 101% from the first quarter of 2014.

• Demand deposits increased 21% and total deposits increased 11% on a linked quarter basis, growing 75% and 45%, respectively, from the first quarter of 2014.

• Net income decreased 7% on a linked quarter basis and increased 24% from the first quarter of 2014.

EPS decreased 10% on a linked quarter basis, and increased 17% from the first quarter of 2014.

FINANCIAL SUMMARY

(dollars and shares in thousands)

	Q1 2015			Q1 2014			% Change
QUARTERLY OPERATING RESULTS
Net income	$	35,050		$	28,265		24	%
Net income available to common stockholders	$	32,612		$	25,827		26	%
Diluted EPS	$	0.70		$	0.60		17	%
ROA	0.84		%	1.01		%
ROE	9.82		%	10.2		%
Diluted shares	46,368			43,220
BALANCE SHEET
Total assets	$	17,325,458		$	12,147,070		43	%
Demand deposits	6,050,817			3,451,294			75	%
Total deposits	14,122,306			9,729,128			45	%
Loans held for investment	10,760,978			8,928,325			21	%
Loans held for investment, mortgage finance	5,408,750			2,688,044			101	%
Total loans	16,169,728			11,616,369			39	%
Stockholders’ equity	1,517,958			1,230,131			23	%

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income of $35.1 million and net income available to common stockholders of $32.6 million for the quarter ended March 31, 2015 compared to net income of $28.3 million and net income available to common stockholders of $25.8 million for the same period in 2014. On a fully diluted basis, earnings per common share were $.70 for the three months ended March 31, 2015 compared to $.60 for the first quarter of 2014 and $.78 for the fourth quarter of 2014. The sale of 2.5 million shares of common stock in the fourth quarter of 2014 increased diluted shares outstanding, contributing to the linked quarter decrease.

Return on average common equity (“ROE”) was 9.82 percent and return on average assets (“ROA”) was .84 percent for the first quarter of 2015, compared to 10.20 percent and 1.01 percent, respectively, for the first quarter of 2014. The ROE decrease resulted from the 8.4% increase in average common equity, reflecting the first full quarter impact of the common stock offering completed in the fourth quarter of 2014. The ROA decrease resulted from a combination of reduced yields on loans and a $1.9 billion increase in average liquidity assets, which include Federal funds sold and deposits in other banks, from the first quarter of 2014 to the first quarter of 2015.

Net interest income was $130.0 million for the first quarter of 2015, compared to $108.3 million in the first quarter of 2014 and $127.6 million for the fourth quarter of 2014. The net interest margin in the first quarter of 2015 was 3.22 percent, a 77 basis point decrease from the first quarter of 2014 and a 34 basis point decrease from the fourth quarter of 2014. The quarterly and year-over-year decreases in net interest margin are due primarily to a substantial increase in liquidity assets, as well as the growth in loans with lower average yields. The cost of total deposits and borrowed funds was 17 basis points for the first quarter of 2015, consistent with the first quarter of 2014.

Average loans, excluding mortgage finance loans, for the first quarter of 2015 were $10.5 billion, an increase of $1.8 billion, or 20 percent, from the first quarter of 2014, and an increase of $580.8 million, or 6 percent, from the fourth quarter of 2014. Average mortgage finance loans for the first quarter of 2015 were $3.7 billion, an increase of $1.7 billion, or 85 percent, from the first quarter of 2014 and an increase of $275.2 million, or 8 percent, from the fourth quarter of 2014.

Average total deposits for the first quarter of 2015 increased $4.2 billion from the first quarter of 2014 and increased $1.2 billion from the fourth quarter of 2014. Average demand deposits for the first quarter of 2015 increased $2.2 billion, or 65 percent, to $5.6 billion from $3.4 billion during the first quarter of 2014 and increased $544.2 million, or 11 percent, from the fourth quarter of 2014.

We recorded an $11.0 million provision for credit losses in the first quarter of 2015 compared to $5.0 million in the first quarter of 2014 and $6.5 million in the fourth quarter of 2014. The provision for the first quarter of 2015 was driven by the application of our methodology. The increase was primarily related to the growth in traditional loans held for investment and the anticipated downgrades in energy credits. The combined reserve at March 31, 2015 increased to 1.08 percent of loans excluding mortgage finance loans due to continuing loan growth, as compared to 1.07 percent at March 31, 2014 and 1.06 percent at December 31, 2014. 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. We experienced an increase in non-performing asset totals in the first quarter of 2015, bringing the ratio of total non-performing assets to total loans plus other real estate owned (“OREO”) to .43 percent compared to .39 percent in the first quarter of 2014 and .31 percent in the fourth quarter of 2014. Net charge-offs for the first quarter of 2015 were $3.1 million compared to net charge-offs of $2.1 million in the first quarter of 2014 and net charge-offs of $1.1 million in the fourth quarter of 2014. For the first quarter of 2015, net charge-offs were .09 percent of total loans, compared to .08 percent for the same period in 2014. At March 31, 2015, non-performing assets included OREO of $605,000 compared to $2.4 million as of March 31, 2014 and $568,000 as of December 31, 2014.

Non-interest income increased $1.9 million, or 18 percent, during the first quarter of 2015 compared to the same period of 2014. Service charges, brokered loan fees and swap fees increased $398,000, $1.4 million and $762,000, respectively, during the first quarter of 2015 compared to the same period of 2014. The increase in brokered loan fees was a result of an increase in mortgage finance volumes. Swap fees fluctuate from quarter to quarter based on the number and volume of transactions closed during the quarter. Offsetting these increases was a $550,000 decrease in other non-interest income during the first quarter of 2015 compared to the same period of 2014.

Non-interest expense for the first quarter of 2015 increased $7.2 million, or 10 percent, to $76.5 million from $69.3 million in the first quarter of 2014. The increase is primarily related to a $3.8 million increase in salaries and employee benefits expense, a $923,000 increase in net occupancy expense, a $459,000 increase in marketing expense, a $1.2 million increase in communications and technology expense and a $1.2 million increase in other non-interest expense, all of which were due to general business growth. FDIC insurance assessment expense for the first quarter of 2015 increased $1.1 million compared to the same quarter in 2014 as a result of the increase in total assets from March 31, 2014 to March 31, 2015. Partially offsetting these increases was a $1.4 million decrease in legal and professional expense during the first quarter of 2015.

Stockholders’ equity increased by 23 percent from $1.2 billion at March 31, 2014 to $1.5 billion at March 31, 2015, primarily due to the offering of 2.5 million common shares for net proceeds of $149.6 million in the fourth quarter of 2014 and retention of net income. Texas Capital Bank is well capitalized under regulatory guidelines and at March 31, 2015, our ratio of tangible common equity to total tangible assets was 7.8 percent.

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ABOUT TEXAS CAPITAL BANCSHARES, INC.

Texas Capital Bancshares, Inc. (NASDAQ®: TCBI), a member of the Russell 2000® Index and the S&P SmallCap 600®, 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. 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. 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, deterioration of the credit quality of our loan portfolio, the effects of recent declines in oil and gas prices on our customers, increased defaults and loan losses, 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 our Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.

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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
	2015			2014			2014			2014			2014
CONSOLIDATED STATEMENTS OF INCOME
Interest income	$	140,908		$	137,833		$	135,290		$	124,813		$	116,611
Interest expense	10,899			10,251			9,629			9,406			8,296
Net interest income	130,009			127,582			125,661			115,407			108,315
Provision for credit losses	11,000			6,500			6,500			4,000			5,000
Net interest income after provision for credit losses	119,009			121,082			119,161			111,407			103,315
Non-interest income	12,267			11,226			10,396			10,533			10,356
Non-interest expense	76,517			74,117			71,915			69,765			69,317
Income before income taxes	54,759			58,191			57,642			52,175			44,354
Income tax expense	19,709			20,357			20,810			18,754			16,089
Net income	35,050			37,834			36,832			33,421			28,265
Preferred stock dividends	2,438			2,437			2,438			2,437			2,438
Net income available to common stockholders	$	32,612		$	35,397		$	34,394		$	30,984		$	25,827
Diluted EPS	$	.70		$	.78		$	.78		$	.71		$	.60
Diluted shares	46,367,870			45,092,511			43,849,838			43,845,015			43,219,961
CONSOLIDATED BALANCE SHEET DATA
Total assets	$	17,325,458		$	15,899,946		$	14,268,561		$	13,534,352		$	12,147,070
Loans held for investment	10,760,978			10,154,887			9,686,422			9,153,005			8,928,325
Loans held for investment, mortgage finance	5,408,750			4,102,125			3,774,467			3,700,253			2,688,044
Securities	37,649			41,719			43,938			49,330			52,960
Demand deposits	6,050,817			5,011,619			4,722,479			4,181,774			3,451,294
Total deposits	14,122,306			12,673,300			11,715,808			10,757,316			9,729,128
Other borrowings	1,125,458			1,192,681			735,689			1,000,548			678,026
Subordinated notes	286,000			286,000			286,000			286,000			286,000
Long-term debt	113,406			113,406			113,406			113,406			113,406
Stockholders’ equity	1,517,958			1,484,190			1,297,922			1,262,816			1,230,131
End of period shares outstanding	45,772,245			45,735,007			43,179,134			43,105,444			42,958,803
Book value	$	29.89		$	29.14		$	26.59		$	25.82		$	25.14
Tangible book value(1)	$	29.44		$	28.69		$	26.1		$	25.33		$	24.65
SELECTED FINANCIAL RATIOS
Net interest margin	3.22		%	3.56		%	3.77		%	3.87		%	3.99		%
Return on average assets	0.84		%	1.03		%	1.07		%	1.08		%	1.01		%
Return on average common equity	9.82		%	11.41		%	12.11		%	11.38		%	10.2		%
Non-interest income to earning assets	0.30		%	0.31		%	0.31		%	0.35		%	0.38		%
Efficiency ratio(2)	53.8		%	53.4		%	52.9		%	55.4		%	58.4		%
Non-interest expense to earning assets	1.89		%	2.07		%	2.16		%	2.34		%	2.55		%
Tangible common equity to total tangible assets(4)	7.8		%	8.3		%	7.9		%	8.1		%	8.7		%

(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 and accumulated other comprehensive income less goodwill and intangibles divided by total assets less accumulated other comprehensive income and goodwill and intangibles.

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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
	March 31, 2015			March 31, 2014			% Change
Assets
Cash and due from banks	$	99,602		$	111,594		(11	)%
Interest-bearing deposits	734,945			146,205			403	%
Securities, available-for-sale	37,649			52,960			(29	)%
Loans held for investment, mortgage finance	5,408,750			2,688,044			101	%
Loans held for investment (net of unearned income)	10,760,978			8,928,325			21	%
Less: Allowance for loan losses	108,078			90,234			20	%
Loans held for investment, net	16,061,650			11,526,135			39	%
Premises and equipment, net	16,037			11,767			36	%
Accrued interest receivable and other assets	355,163			277,294			28	%
Goodwill and intangibles, net	20,412			21,115			(3	)%
Total assets	$	17,325,458		$	12,147,070		43	%
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest bearing	$	6,050,817		$	3,451,294		75	%
Interest bearing	7,816,310			5,886,363			33	%
Interest bearing in foreign branches	255,179			391,471			(35	)%
Total deposits	14,122,306			9,729,128			45	%
Accrued interest payable	2,545			2,304			10	%
Other liabilities	157,785			108,075			47	%
Federal funds purchased and repurchase agreements	125,458			143,573			(13	)%
Other borrowings	1,000,000			534,453			87	%
Subordinated notes	286,000			286,000			—
Trust preferred subordinated debentures	113,406			113,406			—
Total liabilities	15,807,500			10,916,939			45	%
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, 2015 and 2014	150,000			150,000			−
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 45,772,662 and 42,959,220 at March 31, 2015 and 2014, respectively	457			430			6	%
Additional paid-in capital	710,943			556,247			28	%
Retained earnings	655,326			521,939			26	%
Treasury stock (shares at cost: 417 at March 31, 2015 and 2014)	(8		)	(8		)	—
Accumulated other comprehensive income, net of taxes	1,240			1,523			(19	)%
Total stockholders’ equity	1,517,958			1,230,131			23	%
Total liabilities and stockholders’ equity	$	17,325,458		$	12,147,070		43	%

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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share data)
	Three Months Ended March 31
	2015		2014
Interest income
Interest and fees on loans	$	139,174	$	115,872
Securities	358		540
Federal funds sold	116		40
Deposits in other banks	1,260		159
Total interest income	140,908		116,611
Interest expense
Deposits	5,628		4,030
Federal funds purchased	68		95
Repurchase agreements	4		4
Other borrowings	390		72
Subordinated notes	4,191		3,479
Trust preferred subordinated debentures	618		616
Total interest expense	10,899		8,296
Net interest income	130,009		108,315
Provision for credit losses	11,000		5,000
Net interest income after provision for credit losses	119,009		103,315
Non-interest income
Service charges on deposit accounts	2,094		1,696
Trust fee income	1,200		1,282
Bank owned life insurance (BOLI) income	484		509
Brokered loan fees	4,232		2,824
Swap fees	1,986		1,224
Other	2,271		2,821
Total non-interest income	12,267		10,356
Non-interest expense
Salaries and employee benefits	45,828		42,056
Net occupancy expense	5,691		4,768
Marketing	4,218		3,759
Legal and professional	4,048		5,402
Communications and technology	5,078		3,924
FDIC insurance assessment	3,790		2,725
Allowance and other carrying costs for OREO	9		45
Other	7,855		6,638
Total non-interest expense	76,517		69,317
Income before income taxes	54,759		44,354
Income tax expense	19,709		16,089
Net income	35,050		28,265
Preferred stock dividends	2,438		2,438
Net income available to common stockholders	$	32,612	$	25,827
Basic earnings per common share:	$	0.71	$	0.61
Diluted earnings per common share:	$	0.70	$	0.60

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TEXAS CAPITAL BANCSHARES, INC.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
	1st Quarter			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
	2015			2014			2014			2014			2014
Reserve for loan losses:
Beginning balance	$	100,954		$	96,322		$	91,114		$	90,234		$	87,604
Loans charged-off:
Commercial	3,102			1,285			992			5,190			2,336
Real estate	346			—			—			246			50
Consumer	62			165			—			40			61
Leases	3,510			1,450			992			5,476			2,447
Total loans charged-off
Recoveries:	286			190			329			2,033			210
Commercial	8			34			2			35			8
Real estate	83			—			—			—			—
Consumer	4			96			35			6			25
Leases	8			2			31			925			124
Total recoveries	389			322			397			2,999			367
Net charge-offs	3,121			1,128			595			2,477			2,080
Provision for loan losses	10,245			5,760			5,803			3,357			4,710
Ending balance	$	108,078		$	100,954		$	96,322		$	91,114		$	90,234
Reserve for off-balance sheet credit losses:
Beginning balance	$	7,060		$	6,320		$	5,623		$	4,980		$	4,690
Provision for off-balance sheet credit losses	755			740			697			643			290
Ending balance	$	7,815		$	7,060		$	6,320		$	5,623		$	4,980
Total reserves for credit losses	$	115,893		$	108,014		$	102,642		$	96,737		$	95,214
Total provision for credit losses	$	11,000		$	6,500		$	6,500		$	4,000		$	5,000
Reserve to loans	0.67		%	0.71		%	0.72		%	0.71		%	0.78		%
Reserve to loans excluding mortgage finance loans(2)	1.00		%	0.99		%	0.99		%	1.00		%	1.01		%
Reserve to average loans	0.76		%	0.75		%	0.75		%	0.77		%	0.84		%
Reserve to average loans excluding mortgage finance loans(2)	1.03		%	1.02		%	1.02		%	1.01		%	1.04		%
Net charge-offs to average loans(1)	0.09		%	0.03		%	0.02		%	0.08		%	0.08		%
Net charge-offs to average loans excluding mortgage finance loans(1)(2)	0.12		%	0.05		%	0.03		%	0.11		%	0.10		%
Net charge-offs to average loans for last twelve months(1)	0.06		%	0.05		%	0.05		%	0.06		%	0.06		%
Net charge-offs to average loans, excluding mortgage finance loans, for last twelve months(1)(2)	0.08		%	0.07		%	0.07		%	0.07		%	0.07		%
Total provision for credit losses to average loans(1)	0.31		%	0.19		%	0.20		%	0.14		%	0.19		%
Total provision for credit losses to average loans excluding mortgage finance loans(1)(2)	0.42		%	0.26		%	0.27		%	0.18		%	0.23		%
Combined reserves for credit losses to loans	0.72		%	0.76		%	0.76		%	0.75		%	0.82		%
Combined reserves for credit losses to loans, excluding mortgage finance loans(2)	1.08		%	1.06		%	1.06		%	1.06		%	1.07		%
Non-performing assets (NPAs):
Non-accrual loans	$	68,307		$	43,304		$	37,733		$	41,565		$	43,213
Other real estate owned (OREO)	605			568			617			685			2,420
Total	$	68,912		$	43,872		$	38,350		$	42,250		$	45,633

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	1st Quarter			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
	2015			2014			2014			2014			2014
Non-accrual loans to loans	0.42		%	0.30		%	0.28		%	0.32		%	0.37		%
Non-accrual loans to loans excluding mortgage finance loans(2)	0.63		%	0.43		%	0.39		%	0.45		%	0.48		%
Total NPAs to loans plus OREO	0.43		%	0.31		%	0.28		%	0.33		%	0.39		%
Total NPAs to loans excluding mortgage finance loans plus OREO(2)	0.64		%	0.43		%	0.40		%	0.46		%	0.51		%
Total NPAs to earning assets	0.41		%	0.28		%	0.28		%	0.32		%	0.39		%
Reserve for loan losses to non-accrual loans	1.6x			2.3x			2.6x			2.2x			2.1x
Restructured loans	$	319		$	1,806		$	1,853		$	249		$	2,825
Loans past due 90 days and still accruing(3)	$	2,971		$	5,274		$	6,102		$	4,793		$	7,869
Loans past due 90 days to loans	0.02		%	0.04		%	0.05		%	0.04		%	0.07		%
Loans past due 90 days to loans excluding mortgage finance loans(2)	0.03		%	0.05		%	0.06		%	0.05		%	0.09		%

(1) Interim period ratios are annualized.

(2) The indicated ratios are presented with and excluding the mortgage finance loans because the risk profile of our mortgage finance loans is different than our other loans held for investment. No provision for credit losses is allocated to these loans based on the internal risk grade assigned.

(3) At March 31, 2015, loans past due 90 days and still accruing includes premium finance loans of $2.8 million. These loans are primarily secured by obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date.

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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands)
	1st Quarter		4th Quarter		3rd Quarter		2nd Quarter		1st Quarter
	2015		2014		2014		2014		2014
Interest income
Interest and fees on loans	$	139,174	$	136,882	$	134,618	$	124,234	$	115,872
Securities	358		389		428		471		540
Federal funds sold	116		91		68		8		40
Deposits in other banks	1,260		471		176		100		159
Total interest income	140,908		137,833		135,290		124,813		116,611
Interest expense
Deposits	5,628		5,263		4,606		4,246		4,030
Federal funds purchased	68		81		82		115		95
Repurchase agreements	4		4		5		4		4
Other borrowings	390		35		68		181		72
Subordinated notes	4,191		4,241		4,241		4,241		3,479
Trust preferred subordinated debentures	618		627		627		619		616
Total interest expense	10,899		10,251		9,629		9,406		8,296
Net interest income	130,009		127,582		125,661		115,407		108,315
Provision for credit losses	11,000		6,500		6,500		4,000		5,000
Net interest income after provision for credit losses	119,009		121,082		119,161		111,407		103,315
Non-interest income
Service charges on deposit accounts	2,094		1,976		1,817		1,764		1,696
Trust fee income	1,200		1,223		1,190		1,242		1,282
Bank owned life insurance (BOLI) income	484		520		517		521		509
Brokered loan fees	4,232		3,979		3,821		3,357		2,824
Swap fees	1,986		894		464		410		1,224
Other	2,271		2,634		2,587		3,239		2,821
Total non-interest income	12,267		11,226		10,396		10,533		10,356
Non-interest expense
Salaries and employee benefits	45,828		43,910		43,189		39,896		42,056
Net occupancy expense	5,691		5,746		5,279		5,073		4,768
Marketing	4,218		4,411		4,024		3,795		3,759
Legal and professional	4,048		3,725		4,874		7,181		5,402
Communications and technology	5,078		5,454		4,928		4,361		3,924
FDIC insurance assessment	3,790		2,875		2,775		2,544		2,725
Allowance and other carrying costs for OREO	9		24		5		11		45
Other	7,855		7,972		6,841		6,904		6,638
Total non-interest expense	76,517		74,117		71,915		69,765		69,317
Income before income taxes	54,759		58,191		57,642		52,175		44,354
Income tax expense	19,709		20,357		20,810		18,754		16,089
Net income	35,050		37,834		36,832		33,421		28,265
Preferred stock dividends	2,438		2,437		2,438		2,437		2,438
Net income available to common shareholders	$	32,612	$	35,397	$	34,394	$	30,984	$	25,827

9

TEXAS CAPITAL BANCSHARES, INC.
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates Continuing Operations
(Dollars in thousands)
	1st Quarter 2015						4th Quarter 2014						3rd Quarter 2014						2nd Quarter 2014						1st Quarter 2014
	Average Balance		Revenue/ Expense (1)		Yield/ Rate		Average Balance		Revenue/ Expense (1)		Yield/ Rate		Average Balance		Revenue/ Expense (1)		Yield/ Rate		Average Balance		Revenue/ Expense (1)		Yield/ Rate		Average Balance		Revenue/ Expense (1)		Yield/ Rate
Assets
Securities - Taxable	$	37,145	$	332	3.62	%	$	39,258	$	355	3.59	%	$	41,716	$	383	3.64	%	$	44,216	$	410	3.72	%	$	47,027	$	442	3.81	%
Securities - Non-taxable(2)	2,785		40		5.82	%	3,257		52		6.33	%	4,697		69		5.83	%	6,271		94		6.01	%	10,554		151		5.80	%
Federal funds sold and securities purchased under resale agreements	191,297		116		0.25	%	139,761		91		0.26	%	105,793		68		0.26	%	14,997		8		0.21	%	73,746		40		0.22	%
Deposits in other banks	2,019,567		1,260		0.25	%	742,240		471		0.25	%	283,062		176		0.25	%	183,061		100		0.22	%	230,296		159		0.28	%
Loans held for investment, mortgage finance loans	3,746,938		27,631		2.99	%	3,471,737		26,773		3.06	%	3,452,782		27,275		3.13	%	2,822,560		23,231		3.30	%	2,027,264		16,782		3.36	%
Loans held for investment	10,502,172		111,543		4.31	%	9,921,323		110,109		4.40	%	9,423,259		107,343		4.52	%	8,984,230		101,003		4.51	%	8,717,969		99,090		4.61	%
Less reserve for loan        losses	101,042		—		—		96,139		—		—		91,427		—		—		90,105		—		—		87,686		—		—
Loans, net of reserve	14,148,068		139,174		3.99	%	13,296,921		136,882		4.08	%	12,784,614		134,618		4.18	%	11,716,685		124,234		4.25	%	10,657,547		115,872		4.41	%
Total earning assets	16,398,862		140,922		3.49	%	14,221,437		137,851		3.85	%	13,219,882		135,314		4.06	%	11,965,230		124,846		4.19	%	11,019,170		116,664		4.29	%
Cash and other assets	459,030						409,635						409,727						396,938						382,198
Total assets	$	16,857,892					$	14,631,072					$	13,629,609					$	12,362,168					$	11,401,368
Liabilities and Stockholders’ Equity
Transaction deposits	$	1,401,626	$	444	0.13	%	$	1,150,530	$	401	0.14	%	$	1,010,003	$	287	0.11	%	$	895,827	$	170	0.08	%	$	782,301	$	80	0.04	%
Savings deposits	5,891,344		4,420		0.30	%	5,479,395		4,121		0.30	%	4,991,779		3,519		0.28	%	4,679,140		3,395		0.29	%	4,591,493		3,304		0.29	%
Time deposits	447,681		506		0.46	%	406,040		413		0.40	%	485,558		475		0.39	%	401,024		390		0.39	%	375,563		351		0.38	%
Deposits in foreign branches	304,225		258		0.34	%	369,471		328		0.35	%	369,202		325		0.35	%	350,043		291		0.33	%	355,857		295		0.34	%
Total interest bearing deposits	8,044,876		5,628		0.28	%	7,405,436		5,263		0.28	%	6,856,542		4,606		0.27	%	6,326,034		4,246		0.27	%	6,105,214		4,030		0.27	%
Other borrowings	1,172,675		462		0.16	%	251,449		120		0.19	%	309,868		155		0.20	%	666,405		300		0.18	%	293,012		171		0.24	%
Subordinated notes	286,000		4,191		5.94	%	286,000		4,241		5.88	%	286,000		4,241		5.88	%	286,000		4,241		5.95	%	227,667		3,479		6.20	%
Trust preferred subordinated debentures	113,406		618		2.21	%	113,406		627		2.19	%	113,406		627		2.19	%	113,406		619		2.19	%	113,406		616		2.20	%
Total interest bearing liabilities	9,616,957		10,899		0.46	%	8,056,291		10,251		0.50	%	7,565,816		9,629		0.50	%	7,391,845		9,406		0.51	%	6,739,299		8,296		0.50	%
Demand deposits	5,592,124						5,047,876						4,669,772						3,629,941						3,381,501
Other liabilities	152,639						146,259						117,418						98,595						103,514
Stockholders’ equity	1,496,172						1,380,646						1,276,603						1,241,787						1,177,054
Total liabilities and stockholders’ equity	$	16,857,892					$	14,631,072					$	13,629,609					$	12,362,168					$	11,401,368
Net interest income(2)			$	130,023					$	127,600					$	125,685					$	115,440					$	108,368
Net interest margin					3.22	%					3.56	%					3.77	%					3.87	%					3.99	%

(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.

10