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Item 1. Financial Statements

2025-07-17 compared with 2025-04-17 · 273 added, 151 removed, 863 unchanged (33% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands except share data) March 31, 2025 December 31, 2024

(in thousands except share data) June 30, 2025 December 31, 2024

Cash and due from banks $ 182,451 $ 176,501

5 unchanged sentences

Investment securities 4,608,628 4,396,115

Loans held for sale — —

Loans held for investment, mortgage finance 5,889,589 5,215,574

18 unchanged sentences

Authorized shares - 10,000,000

Issued shares - 300,000 at March 31, 2025 and December 31, 2024

Issued shares - 300,000 at June 30, 2025 and December 31, 2024

300,000 300,000

1 unchanged sentence

Authorized shares - 100,000,000

Issued shares - 51,707,542 and 51,520,315 at March 31, 2025 and December 31, 2024, respectively

Issued shares - 51,747,305 and 51,520,315 at June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 1,065,083 1,056,719

Retained earnings 2,611,401 2,495,651

Treasury stock - 5,682,609 and 5,286,503 shares at cost at March 31, 2025 and December 31, 2024, respectively

Treasury stock - 6,000,469 and 5,286,503 shares at cost at June 30, 2025 and December 31, 2024, respectively

( 354,000 ) ( 301,842 )

6 unchanged sentences

COMPREHENSIVE INCOME - UNAUDITED

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands except per share data) 2025 2024 2025 2024

18 unchanged sentences

Trading income 7,896 5,650 13,835 10,362

Available-for-sale debt securities losses ( 1,886 ) — ( 1,886 ) —

Other 9,640 7,985 17,914 14,351

32 unchanged sentences

(in thousands except share data) Shares Amount Shares Amount Capital Earnings Shares Amount Income/(Loss) Total

Balance at March 31, 2024 300,000 $ 300,000 51,420,680 $ 514 $ 1,044,669 $ 2,457,222 ( 4,434,405 ) $ ( 251,857 ) $ ( 379,886 ) $ 3,170,662

Comprehensive income/(loss):

Net income — — — — — 41,662 — — — 41,662

Change in other comprehensive income/(loss), net of taxes — — — — — — — — 12,154 12,154

Total comprehensive income

Stock-based compensation expense recognized in earnings — — — — 5,246 — — — — 5,246

Preferred stock dividend — — — — — ( 4,312 ) — — — ( 4,312 )

Issuance of stock related to stock-based awards — — 53,901 1 199 — — — — 200

Repurchase of common stock — — — — — — ( 852,098 ) ( 50,011 ) — ( 50,011 )

Balance at June 30, 2024 300,000 $ 300,000 51,474,581 $ 515 $ 1,050,114 $ 2,494,572 ( 5,286,503 ) $ ( 301,868 ) $ ( 367,732 ) $ 3,175,601

Balance at March 31, 2025 300,000 $ 300,000 51,707,542 $ 517 $ 1,060,028 $ 2,538,385 ( 5,682,609 ) $ ( 332,994 ) $ ( 136,162 ) $ 3,429,774

Comprehensive income/(loss):

Net income — — — — — 77,328 — — — 77,328

Change in other comprehensive income/(loss), net of taxes — — — — — — — — 23,231 23,231

Total comprehensive income

Stock-based compensation expense recognized in earnings — — — — 4,920 — — — — 4,920

Preferred stock dividend — — — — — ( 4,312 ) — — — ( 4,312 )

Issuance of stock related to stock-based awards — — 39,763 — 135 — — — — 135

Repurchase of common stock — — — — — — ( 317,860 ) ( 21,006 ) — ( 21,006 )

Balance at June 30, 2025 300,000 $ 300,000 51,747,305 $ 517 $ 1,065,083 $ 2,611,401 ( 6,000,469 ) $ ( 354,000 ) $ ( 112,931 ) $ 3,510,070

See accompanying notes to consolidated financial statements.

TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - UNAUDITED

Preferred Stock Common Stock Additional Treasury Stock Accumulated Other

Paid-in Retained Comprehensive

(in thousands except share data) Shares Amount Shares Amount Capital Earnings Shares Amount Income/(Loss) Total

Balance at December 31, 2023 (audited)

11 unchanged sentences

Repurchase of common stock — — — — — — ( 1,381,436 ) ( 81,534 ) — ( 81,534 )

Balance at March 31, 2024 300,000 $ 300,000 51,420,680 $ 514 $ 1,044,669 $ 2,457,222 ( 4,434,405 ) $ ( 251,857 ) $ ( 379,886 ) $ 3,170,662

Balance at June 30, 2024 300,000 $ 300,000 51,474,581 $ 515 $ 1,050,114 $ 2,494,572 ( 5,286,503 ) $ ( 301,868 ) $ ( 367,732 ) $ 3,175,601

Balance at December 31, 2024 (audited)

10 unchanged sentences

Repurchase of common stock — — — — — — ( 713,966 ) ( 52,158 ) — ( 52,158 )

Balance at March 31, 2025 300,000 $ 300,000 51,707,542 $ 517 $ 1,060,028 $ 2,538,385 ( 5,682,609 ) $ ( 332,994 ) $ ( 136,162 ) $ 3,429,774

Balance at June 30, 2025 300,000 $ 300,000 51,747,305 $ 517 $ 1,065,083 $ 2,611,401 ( 6,000,469 ) $ ( 354,000 ) $ ( 112,931 ) $ 3,510,070

See accompanying notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2025 2024

4 unchanged sentences

Depreciation and amortization 23,669 24,835

Net (gain)/loss recognized on investment securities 2,052 ( 4,034 )

Net loss on available-for-sale debt securities 1,886 —

Net loss/(gain) on equity securities 104 ( 3,975 )

Sales/(purchases) of trading securities, net ( 3,888 ) —

7 unchanged sentences

Purchases of available-for-sale debt securities ( 700,052 ) ( 693,894 )

Proceeds from sales of available-for-sale debt securities 280,402 —

Proceeds from maturities, redemptions and pay-downs of available-for-sale debt securities 238,840 416,701

12 unchanged sentences

Net increase/(decrease) in short-term borrowings 365,000 175,000

Redemption of long-term debt ( 40,435 ) ( 200,000 )

Net cash provided by financing activities 1,082,579 1,322,599

4 unchanged sentences

Cash paid during the period for interest $ 386,987 $ 464,930

Cash received during the period for income taxes

Cash paid during the period for income taxes

52,813 47,988

27 unchanged sentences

The following table presents the computation of basic and diluted earnings per share:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands except share and per share data) 2025 2024 2025 2024

16 unchanged sentences

Losses Estimated

March 31, 2025

June 30, 2025

Available-for-sale debt securities:

Treasury securities $ 282,053 $ — $ ( 1,954 ) $ 280,099

Residential mortgage-backed securities $ 3,620,954 $ 17,279 $ ( 118,713 ) $ 3,519,520

22 unchanged sentences

Total investment securities(2) $ 4,396,115

(1) Excludes accrued interest receivable of $ 14.2 million and $ 13.8 million at March 31, 2025 and December 31, 2024, respectively, related to available-for-sale debt securities and $ 1.3 million and $ 1.3 million at March 31, 2025 and December 31, 2024, respectively, related to held-to-maturity debt securities that is recorded in accrued interest receivable and other assets on the consolidated balance sheets.

(1) Excludes accrued interest receivable of $ 15.6 million and $ 13.8 million at June 30, 2025 and December 31, 2024, respectively, related to available-for-sale debt securities and $ 1.2 million and $ 1.3 million at June 30, 2025 and December 31, 2024, respectively, related to held-to-maturity debt securities that is recorded in accrued interest receivable and other assets on the consolidated balance sheets.

(2) Includes available-for-sale debt securities, equity securities and trading securities at estimated fair value and held-to-maturity debt securities at amortized cost.

Debt Securities

The Company did not sell any available-for-sale debt securities during the first three months of 2025 or 2024.

The amortized cost and estimated fair value as of March 31, 2025, excluding accrued interest receivable, of available-for-sale and held-to-maturity debt securities are presented below by contractual maturity.

During the second quarter of 2025, the Company sold available-for-sale debt securities with an amortized cost basis of $ 287.5 million, realizing a loss of $1.9 million, and repositioned the proceeds into purchases of available-for-sale residential mortgage-backed securities.

The Company did not sell any available-for-sale debt securities during the first six months of 2024.

The amortized cost and estimated fair value as of June 30, 2025, excluding accrued interest receivable, of available-for-sale and held-to-maturity debt securities are presented below by contractual maturity.

Actual maturities may differ from contractual maturities of mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without prepayment penalties.

6 unchanged sentences

Total $ 3,874,582 $ 3,774,141 $ 761,907 $ 674,663

The table below presents the weighted average yields for the Company’s available-for-sale debt securities for the three months ended March 31, 2025.

The table below presents the weighted average yields for the Company’s available-for-sale debt securities as of June 30, 2025.

Weighted average yields are calculated based on amortized cost on a tax-exempt basis assuming a 21% federal tax rate, where applicable.

Treasury securities Residential mortgage-backed securities Commercial mortgage-backed securities

Residential mortgage-backed securities Commercial mortgage-backed securities

CRT securities

7 unchanged sentences

(in thousands) Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss

March 31, 2025

Treasury securities $ — $ — $ 280,099 $ ( 1,954 ) $ 280,099 $ ( 1,954 )

June 30, 2025

Residential mortgage-backed securities $ 888,175 $ ( 3,438 ) $ 1,258,369 $ ( 115,275 ) $ 2,146,544 $ ( 118,713 )

10 unchanged sentences

Total $ 1,540,233 $ ( 23,539 ) $ 1,612,391 $ ( 153,553 ) $ 3,152,624 $ ( 177,092 )

At March 31, 2025, the Company had 55 available-for-sale debt securities in an unrealized loss position, comprised of 6 U.S.

Treasury securities, 42 residential mortgage-backed securities, 5 commercial mortgage-backed securities and two Credit Risk Transfer (“CRT”) securities.

At June 30, 2025, the Company had 49 available-for-sale debt securities in an unrealized loss position, comprised of 42 residential mortgage-backed securities, five commercial mortgage-backed securities and two Credit Risk Transfer (“CRT”) securities.

The unrealized losses on the available-for-sale debt securities were the result of changes in market interest rates compared to the date the securities were acquired rather than the credit quality of the issuers or underlying loans.

1 unchanged sentence

Held-to-maturity securities consist of government guaranteed securities for which no loss is expected.

At March 31, 2025 and December 31, 2024, no allowance for credit losses was established for available-for-sale or held-to-maturity debt securities.

At March 31, 2025 and December 31, 2024, debt securities with carrying values of approximately $ 913,000 and $ 940,000 , respectively, were pledged to secure certain customer deposits.

At June 30, 2025 and December 31, 2024, no allowance for credit losses was established for available-for-sale or held-to-maturity debt securities.

At June 30, 2025 and December 31, 2024, debt securities with carrying values of approximately $ 962,000 and $ 940,000 , respectively, were pledged to secure certain customer deposits.

Equi ty Securities

1 unchanged sentence

The following is a summary of unrealized and realized gains/(losses) recognized on equity securities included in other non-interest income on the consolidated statements of income and other comprehensive income:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

4 unchanged sentences

Loans are summarized by portfolio segment as follows:

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Loans held for investment(1):

8 unchanged sentences

Total loans held for investment, net $ 23,647,886 $ 22,178,357

(1) Excludes accrued interest receivable of $ 102.1 million and $ 107.3 million at March 31, 2025 and December 31, 2024, respectively, that is recorded in accrued interest receivable and other assets on the consolidated balance sheets.

(1) Excludes accrued interest receivable of $ 101.9 million and $ 107.3 million at June 30, 2025 and December 31, 2024, respectively, that is recorded in accrued interest receivable and other assets on the consolidated balance sheets.

The following tables summarize gross loans held for investment by year of origination and internally assigned credit grades:

1 unchanged sentence

and prior Revolving lines of credit Revolving lines of credit converted to term loans Total

March 31, 2025

June 30, 2025

(1-7) Pass $ 750,086 $ 1,440,357 $ 1,018,302 $ 1,048,253 $ 263,885 $ 196,156 $ 6,689,345 $ 30,470 $ 11,436,854

53 unchanged sentences

Finance Commercial Real Estate Consumer Total

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

Beginning balance $ 198,423 $ 2,755 $ 68,825 $ 1,706 $ 271,709

4 unchanged sentences

Ending balance $ 207,912 $ 10,630 $ 57,296 $ 1,810 $ 277,648

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Beginning balance $ 171,437 $ 4,173 $ 71,829 $ 2,534 $ 249,973

4 unchanged sentences

Ending balance $ 180,354 $ 5,618 $ 78,638 $ 2,687 $ 267,297

The Company recorded a $ 16.5 million provision for credit losses on loans for the three months ended March 31, 2025, compared to $ 24.8 million for the same period of 2024.

The $ 16.5 million provision for credit losses on loans resulted primarily from an increase in criticized loans, $ 9.8 million in net charge-offs recorded during the three months ended March 31, 2025 and uncertainty in the economic outlook.

Criticized loans totaled $ 762.9 million at March 31, 2025, compared to $714.0 million at December 31, 2024.

The Company recorded a $ 28.7 million provision for credit losses on loans for the six months ended June 30, 2025, compared to $ 40.0 million for the same period of 2024.

The $ 28.7 million provision for credit losses on loans resulted primarily from an increase in total loans held for investment and $ 22.8 million in net charge-offs recorded during the six months ended June 30, 2025, partially offset by a decline in criticized loans.

Criticized loans totaled $ 637.5 million at June 30, 2025, compared to $ 714.0 million at December 31, 2024.

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral.

At March 31, 2025, the Company had $ 21.0 million in collateral-dependent commercial loans, collateralized by business assets, and $ 33.8 million in collateral-dependent commercial real estate loans, collateralized by real estate.

At June 30, 2025, the Company had $ 4.1 million in collateral-dependent commercial loans, collateralized by business assets, and $ 22.9 million in collateral-dependent commercial real estate loans, collateralized by real estate.

The table below provides an age analysis of gross loans held for investment:

3 unchanged sentences

Due Non-accrual(1) Current Total Non-accrual With No Allowance

March 31, 2025

June 30, 2025

Commercial $ 2,418 $ 4,278 $ 1,775 $ 8,471 $ 90,357 $ 11,831,840 $ 11,930,668 $ 5,628

3 unchanged sentences

Total $ 10,056 $ 8,173 $ 2,068 $ 20,297 $ 113,609 $ 23,892,288 $ 24,026,194 $ 8,662

(1) As of March 31, 2025, $ 349,000 of non-accrual loans were earning interest income on a cash basis compared to $ 360,000 as of December 31, 2024.

Additionally, $ 64,000 of interest income was recognized on non-accrual loans for the three months ended March 31, 2025 compared to $ 18,000 for the same period in 2024.

Accrued interest of $ 7,000 and $ 487,000 was reversed during the three months ended March 31, 2025 and March 31, 2024, respectively.

(1) As of June 30, 2025, $ 848,000 of non-accrual loans were earning interest income on a cash basis compared to $ 360,000 as of December 31, 2024.

Additionally, $ 630,000 of interest income was recognized on non-accrual loans for the six months ended June 30, 2025 compared to $ 161,000 for the same period in 2024.

Accrued interest of $ 919,000 and $ 668,000 was reversed during the six months ended June 30, 2025 and June 30, 2024, respectively.

Modifications to Borrowers Experiencing Financial Difficulty

The table below details gross loans held for investment as of March 31, 2025 and March 31, 2024 made to borrowers experiencing financial difficulty that were modified during the three months ended March 31, 2025 and March 31, 2024, by type of modification granted and the financial effect of those modifications:

The table below details gross loans held for investment made to borrowers experiencing financial difficulty that were modified during the three and six months ended June 30, 2025 and June 30, 2024, by type of modification granted and the financial effect of those modifications:

Financial Statement Impact

2 unchanged sentences

Extension Payment

Extension Interest Rate

Extension Total Percentage of Loans Held for Investment Interest Rate Reduction Term Extension (in months) Payment Deferrals

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Commercial $ 9,492 $ 11,002 $ 21,580 $ 42,074 0.18 % — % 10 to 26

Total $ 9,492 $ 11,002 $ 21,580 $ 42,074 0.18 %

Three Months Ended June 30, 2024

Commercial $ 16,147 $ 253 $ 7,439 $ 23,839 0.11 % — % 3 to 13

Commercial real estate — 15,831 — 15,831 0.07 % — % 3 —

Total $ 16,147 $ 16,084 $ 7,439 $ 39,670 0.18 %

Three Months Ended March 31, 2024

Commercial $ 11,575 $ 300 $ — $ — $ 11,875 0.06 % — % 12

Six Months Ended June 30, 2025

Commercial $ 9,492 $ 12,819 $ 22,338 $ 44,649 0.19 % — % 6 to 26

Commercial real estate 17,835 — — 17,835 0.07 % — % — 369

Total $ 27,327 $ 12,819 $ 22,338 $ 62,484 0.26 %

The table below details gross loans held for investment as of March 31, 2025 and March 31, 2024 that experienced a default during the periods presented subsequent to being granted a modification in the prior twelve months.

Six Months Ended June 30, 2024

Commercial $ 24,207 $ 703 $ 7,439 $ 32,349 0.15 % — % 3 to 13

Commercial real estate — 15,831 — 15,831 0.07 % — % 3

Total $ 24,207 $ 16,534 $ 7,439 $ 48,180 0.22 %

The table below details gross loans held for investment that experienced a default during the periods presented subsequent to being granted a modification in the prior twelve months.

Default is defined as movement to nonperforming status, foreclosure or charge-off, whichever occurs first.

(in thousands)

Deferral Payment Deferral

Deferral Term

Extension Payment Deferral

and Term Extension

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Commercial $ 22,500 $ 6,537 $ — $ 29,037

1 unchanged sentence

Total $ 22,500 $ 6,537 $ — $ 29,037

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Commercial $ — $ — $ — $ —

$ — $ — $ — $ —

Six Months Ended June 30, 2025

Commercial $ 25,496 $ 6,537 $ — $ 32,033

Commercial real estate — — 13,500 13,500

Total $ 25,496 $ 6,537 $ 13,500 $ 45,533

The table below provides an age analysis of gross loans held for investment as of March 31, 2025 and March 31, 2024 made to borrowers experiencing financial difficulty that were modified in the prior twelve months:

Six Months Ended June 30, 2024

Commercial $ 3,129 $ — $ 1,756 $ 4,885

Total $ 3,129 $ — $ 1,756 $ 4,885

The table below provides an age analysis of gross loans held for investment as of June 30, 2025 and June 30, 2024 made to borrowers experiencing financial difficulty that were modified in the prior twelve months:

(in thousands) 30-89 Days

1 unchanged sentence

Past Due Non-Accrual Current Total

March 31, 2025

June 30, 2025

Commercial $ 758 $ — $ 61,005 $ 15,100 $ 76,863

2 unchanged sentences

Total $ 758 $ — $ 78,840 $ 15,100 $ 94,698

March 31, 2024

June 30, 2024

Commercial $ — $ — $ 11,297 $ 30,757 $ 42,054

4 unchanged sentences

The table below presents a summary of short-term borrowings:

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Federal Home Loan Bank borrowings

$ 1,250,000 $ 885,000

Total short-term borrowings $ 1,250,000 $ 885,000

The table below presents a summary of long-term debt:

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Bank-issued 5.25 % fixed rate subordinated notes due 2026

4 unchanged sentences

Total long-term debt $ 620,256 $ 660,346

During the second quarter of 2025, the Company partially paid down $40.5 million of the bank-issued 5.25% fixed rate subordinated notes due 2026.

(6) Financial Instruments with Off-Balance Sheet Risk

3 unchanged sentences

Real Estate Consumer Total

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

Beginning balance $ 47,907 $ 23 $ 5,351 $ 51 $ 53,332

1 unchanged sentence

Ending balance $ 51,982 $ 30 $ 4,584 $ 35 $ 56,631

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Beginning balance $ 36,040 $ 6 $ 10,147 $ 169 $ 46,362

1 unchanged sentence

Ending balance $ 37,262 $ 29 $ 7,784 $ 244 $ 45,319

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Commitments to extend credit - period end balance $ 10,488,980 $ 9,694,406

9 unchanged sentences

A financial institution with a conservation buffer of less than the required amount is subject to limitations on capital distributions, including dividend payments and stock repurchases, and certain discretionary bonus payments to executive officers.

No dividends were declared or paid on the Company’s common stock during the three months ended March 31, 2025 or during 2024.

No dividends were declared or paid on the Company’s common stock during the six months ended June 30, 2025 or during 2024.

On January 22, 2025, the Company’s board of directors authorized a new share repurchase program under which the Company may repurchase up to $ 200.0 million in shares of its outstanding common stock, which is set to expire January 31, 2026.

During the three months ended March 31, 2025, the Company repurchased 396,106 shares of its common stock for an aggregate price, including excise tax expense, of $ 31.2 million, at a weighted average price of $ 78.25 per share.

During the six months ended June 30, 2025, the Company repurchased 713,966 shares of its common stock for an aggregate price, including excise tax expense, of $ 52.2 million, at a weighted average price of $ 72.58 per share.

Because the Bank had less than $ 15.0 billion in total consolidated assets as of December 31, 2009, it is allowed to continue to classify the trust preferred securities, all of which were issued prior to May 19, 2010, as Tier 1 capital.

2 unchanged sentences

The table below summarizes the Company’s and the Bank’s actual and required capital ratios under the Basel III Capital Rules and other standards.

As shown in the table below, the Company’s and Bank’s capital ratios exceeded the regulatory definition of well capitalized as of March 31, 2025 and December 31, 2024.

March 31, 2025 December 31, 2024

As shown in the table below, the Company’s and Bank’s capital ratios exceeded the regulatory definition of well capitalized as of June 30, 2025 and December 31, 2024.

June 30, 2025 December 31, 2024

(dollars in thousands) Minimum Capital Required(2) Capital Required to be Well Capitalized Capital Amount Ratio Capital Amount Ratio

16 unchanged sentences

The table below summarizes the Company’s stock-based compensation expense:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

3 unchanged sentences

Total $ 7,627 $ 6,221 $ 20,377 $ 14,755

(in thousands except period data) March 31, 2025

(in thousands except period data) June 30, 2025

Unrecognized compensation expense related to unvested stock-settled awards $ 28,043

8 unchanged sentences

(in thousands) Level 1 Level 2 Level 3

March 31, 2025

June 30, 2025

Available-for-sale debt securities:(1)

Treasury securities $ 280,099 $ — $ —

Residential mortgage-backed securities $ — $ 3,519,520 $ —

31 unchanged sentences

(in thousands) Balance at Beginning of Period Purchases / Additions Sales / Reductions Realized Unrealized Balance at End of Period

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Available-for-sale debt securities:(1)

CRT securities $ 11,594 $ — $ ( 337 ) $ — $ 110 $ 11,367

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Available-for-sale debt securities:(1)

CRT securities $ 12,261 $ — $ ( 291 ) $ — $ 358 $ 12,328

Six Months Ended June 30, 2025

Available-for-sale debt securities:(1)

CRT securities $ 11,926 $ — $ ( 638 ) $ — $ 79 $ 11,367

Six Months Ended June 30, 2024

Available-for-sale debt securities:(1)

CRT securities $ 11,995 $ — $ ( 500 ) $ — $ 833 $ 12,328

(1) Unrealized gains/(losses) on available-for-sale debt securities are recorded in AOCI .

2 unchanged sentences

The fair value of CRT securities is based on a discounted cash flow model, which utilizes Level 3 inputs, the most significant of which were a discount rate and weighted-average life.

At March 31, 2025, the discount rates utilized ranged from 4.90 % to

6.20 % and the weighted-average life ranged from 4.31 years to 6.41 years.

On a combined amortized cost weighted-average basis a discount rate of 5.42 % and a weighted-average life of 5.15 years were utilized to determine the fair value of these securities at March 31, 2025.

At June 30, 2025, the discount rates utilized ranged from 4.54 % to 5.86 % and the weighted-average life ranged from 3.97 years to 6.16 years.

On a combined amortized cost weighted-average basis a discount rate of 5.08 % and a weighted-average life of 4.87 years were utilized to determine the fair value of these securities at June 30, 2025.

At December 31, 2024, the combined weighted-average discount rate and weighted-average life utilized were 5.63 % and 5.35 years, respectively.

1 unchanged sentence

Certain collateral-dependent loans held for investment are reported at fair value when, based upon an individual evaluation, the specific allocation of the allowance for credit losses that is deducted from the loan's amortized cost is based upon the fair value of the loan's underlying collateral.

The $ 29.2 million fair value of loans held for investment at March 31, 2025 reported above includes impaired loans with a carrying value of $ 54.8 million that were reduced by specific allowance allocations totaling $ 25.6 million based on collateral valuations utilizing Level 3 inputs.

The $ 16.2 million fair value of loans held for investment at June 30, 2025 reported above includes impaired loans with a carrying value of $ 27.1 million that were reduced by specific allowance allocations totaling $ 10.9 million based on collateral valuations utilizing Level 3 inputs.

The $ 35.3 million fair value of loans held for investment at December 31, 2024 reported above includes impaired loans with a carrying value of $ 63.6 million that were reduced by specific allowance allocations totaling $ 28.3 million based on collateral valuations utilizing Level 3 inputs.

3 unchanged sentences

(in thousands) Total Level 1 Level 2 Level 3

March 31, 2025

June 30, 2025

Financial assets:

28 unchanged sentences

The notional amounts and estimated fair values of derivative positions outstanding are presented in the following table.

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Estimated Fair Value Estimated Fair Value

20 unchanged sentences

In some cases, collateral may be required from the counterparties involved if the net value of the derivative instruments exceeds a nominal amount.

The Company’s credit exposure associated with these instruments, net of any collateral pledged, was approximately $ 39.5 million at March 31, 2025 and approximately $ 23.2 million at December 31, 2024.

The Company’s credit exposure associated with these instruments, net of any collateral pledged, was approximately $ 50.1 million at June 30, 2025 and approximately $ 23.2 million at December 31, 2024.

Collateral levels are monitored and adjusted on a regular basis for changes in the value of derivative instruments.

At March 31, 2025, the Company had $ 45.6 million in cash collateral pledged to counterparties included in interest bearing cash and cash equivalents on the consolidated balance sheet and $ 19.3 million in cash collateral received from counterparties included in interest bearing deposits on the consolidated balance sheet.

At June 30, 2025, the Company had $ 38.7 million in cash collateral pledged to counterparties included in interest bearing cash and cash equivalents on the consolidated balance sheet and $ 13.3 million in cash collateral received from counterparties included in interest bearing deposits on the consolidated balance sheet.

The comparative amounts at December 31, 2024, were $ 71.3 million in cash collateral pledged to counterparties and $ 31.0 million cash collateral received from counterparties.

1 unchanged sentence

The risk participation agreements entered into by the Company as a participant bank provide credit protection to the financial institution counterparty should the borrower fail to perform on its interest rate derivative contract with that financial institution.

The Company is party to 12 risk participation agreements where it acts as a participant bank with a notional amount of $ 193.1 million at March 31, 2025, compared to 17 risk participation agreements with a notional amount of $ 228.6 million at December 31, 2024.

The maximum estimated exposure to these agreements, assuming 100% default by all obligors, was approximately $ 2.0 million at March 31, 2025 and $ 4.1 million at December 31, 2024.

The fair value of these exposures was insignificant to the consolidated financial statements at both March 31, 2025 and December 31, 2024.

The Company is party to 17 risk participation agreements where it acts as a participant bank with a notional amount of $ 262.3 million at June 30, 2025, compared to 17 risk participation agreements with a notional amount of $ 228.6 million at December 31, 2024.

The maximum estimated exposure to these agreements, assuming 100% default by all obligors, was approximately $ 1.4 million at June 30, 2025 and $ 4.1 million at December 31, 2024.

The fair value of these exposures was insignificant to the consolidated financial statements at both June 30, 2025 and December 31, 2024.

Risk participation agreements entered into by the Company as the lead bank provide credit protection should the borrower fail to perform on its interest rate derivative contract.

The Company is party to 29 risk participation agreements where the Company acts as the lead bank having a notional amount of $ 383.5 million at March 31, 2025, compared to 25 agreements having a notional amount of $ 349.5 million at December 31, 2024.

The Company is party to 33 risk participation agreements where the Company acts as the lead bank having a notional amount of $ 423.3 million at June 30, 2025, compared to 25 agreements having a notional amount of $ 349.5 million at December 31, 2024.

Derivatives Designated as Cash Flow Hedges

The Company enters into interest rate derivative contracts that are designated as qualifying cash flow hedges to hedge the exposure to variability in expected future cash flows attributable to changes in a contractually specified interest rate.

During the three months ended March 31, 2025, the Company recorded $ 658,000 in unrealized gains to adjust its cash flow hedges to fair value, which was recorded net of tax to AOCI, and reclassified $ 8.7 million from AOCI as a decrease to interest income on loans.

Based on current market conditions, the Company estimates that during the next 12 months, an additional $ 11.2 million related to active and terminated hedges will be reclassified from AOCI as a decrease to interest income.

As of March 31, 2025, the maximum length of time over which forecasted transactions are hedged is 2.42 years.

During the six months ended June 30, 2025, the Company recorded $ 865,000 in unrealized gains to adjust its cash flow hedges to fair value, which was recorded net of tax to AOCI, and reclassified $ 17.1 million from AOCI as a decrease to interest income on loans.

Based on current market conditions, the Company estimates that during the next 12 months, an additional $ 4.7 million will be reclassified from AOCI as a decrease to interest income.

As of June 30, 2025, the maximum length of time over which forecasted transactions are hedged is 2.25 years.

(11) Accumulated Other Comprehensive Income

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(in thousands) Cash Flow Hedges Available-for-Sale Securities Held-to-Maturity Securities Total

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Beginning balance $ ( 8,020 ) $ ( 93,114 ) $ ( 35,028 ) $ ( 136,162 )

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Ending balance $ ( 1,372 ) $ ( 77,761 ) $ ( 33,798 ) $ ( 112,931 )

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Beginning balance $ ( 53,544 ) $ ( 285,238 ) $ ( 41,104 ) $ ( 379,886 )

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Ending balance $ ( 45,215 ) $ ( 283,559 ) $ ( 38,958 ) $ ( 367,732 )

Six Months Ended June 30, 2025

Beginning balance $ ( 15,275 ) $ ( 131,531 ) $ ( 36,301 ) $ ( 183,107 )

Change in unrealized gain/(loss) 865 69,452 — 70,317

Amounts reclassified into net income 17,093 — 3,233 20,326

Total other comprehensive income

17,958 69,452 3,233 90,643

Income tax expense

4,055 15,682 730 20,467

Total other comprehensive income, net of tax

13,903 53,770 2,503 70,176

Ending balance $ ( 1,372 ) $ ( 77,761 ) $ ( 33,798 ) $ ( 112,931 )

Six Months Ended June 30, 2024

Beginning balance $ ( 45,749 ) $ ( 273,806 ) $ ( 42,449 ) $ ( 362,004 )

Change in unrealized gain/(loss) ( 36,611 ) ( 19,671 ) — ( 56,282 )

Amounts reclassified into net income 36,120 — 3,413 39,533

Total other comprehensive income/(loss) ( 491 ) ( 19,671 ) 3,413 ( 16,749 )

Income tax expense/(benefit) ( 1,025 ) ( 9,918 ) ( 78 ) ( 11,021 )

Total other comprehensive income/(loss), net of tax 534 ( 9,753 ) 3,491 ( 5,728 )

Ending balance $ ( 45,215 ) $ ( 283,559 ) $ ( 38,958 ) $ ( 367,732 )

(12) New Accounting Standards

Accounting Standards Update 2025-01 “Income Statement Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date” (“ASU 2025-01”) clarifies the effective date of Accounting Standards Update 2024-03 “Income Statement Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses” (“ASU 2024-03”) to stipulate that ASU 2024-03 is effective for public business entities for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

ASU 2024-03 will be effective for the Company beginning January 1, 2027 for the Company’s annual financial statements on Form 10-K and January 1, 2028 for the Company’s quarterly financial statements on Form 10-Q and is not expected to have a significant impact on the Company’s financial statements.

Accounting Standards Update 2025-02 “Liabilities (405):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

122” (“ASU 2025-02”) amends the Accounting Standards Codification to remove the text of SEC Staff Accounting Bulletin (“SAB”) 121 “Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users” as it has been rescinded by the issuance of SAB 122.

ASU 2025-02 is effective immediately and is not expected to have an impact on the Company’s financial statements.

Accounting Standards Update 2025-03 “Business Combinations (Topic 805) and Consolidation (Topic 810):

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity” (“ASU 2025-03”) amends the guidance to improve the requirements for identifying the accounting acquirer in a business combination in which the legal acquiree is a variable interest entity (“VIE”).

The amendments require entities to consider the general accounting acquirer factors in Topic 805 when the transaction is primarily effected by the exchange of equity interests.

ASU 2025-03 will be effective for the Company beginning January 1, 2027 for the Company’s interim and annual financial statements on Forms 10-Q and 10-K, respectively and is not expected to have a significant impact on the Company’s financial statements.

Accounting Standards Update 2025-04 “Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606):

Clarifications to Share-Based Consideration Payable to a Customer” (“ASU 2025-04”) clarifies the guidance on the accounting for share-based payment awards that are granted by an entity as consideration payable to its customer, with the intent to reduce diversity in practice and improve existing guidance by revising the definition of a “performance condition” and eliminating a forfeiture policy election for service conditions associated with share-based consideration payable to a customer.

ASU 2025-04 also clarifies the guidance in Topic 606 on the variable consideration constraint does not apply to share-based consideration payable to a customer “regardless of whether an award’s grant date has occurred”.

ASU 2025-04 will be effective for the Company beginning January 1, 2027 for the Company’s interim and annual

financial statements on Forms 10Q and 10-K, respectively and is not expected to have a significant impact on the Company’s financial statements.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company’s financial condition and results of operations for the three months ended March 31, 2025 and 2024 should be read in conjunction with its audited consolidated financial statements and the related notes to the consolidated financial statements included in 2024 Form 10-K.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results for the year ending December 31, 2025 or any future period.

The following discussion and analysis of the Company’s financial condition and results of operations for the three and six months ended June 30, 2025 and 2024 should be read in conjunction with its audited consolidated financial statements and the related notes to the consolidated financial statements included in 2024 Form 10-K.

Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results for the year ending December 31, 2025 or any future period.

Forward-Looking Statements

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claims, litigation or regulatory investigations and actions that TCBI may become subject to;

severe weather, natural disasters, climate change, acts of war, terrorism, global conflict, or other external events, as well as related legislative and regulatory initiatives;

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.

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Selected income statement data and key performance indicators are presented in the table below:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(dollars in thousands except per share data) 2025 2024 2025 2024

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24,860 16,935 38,271 25,728

77,328 41,662 124,375 67,804

Preferred stock dividends 4,312 4,312 8,625 8,625

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(1) Non-interest expense divided by the sum of net interest income and non-interest income.

Three months ended March 31, 2025 compared to three months ended March 31, 2024

The Company reported net income of $47.0 million and net income available to common stockholders of $42.7 million for the three months ended March 31, 2025, compared to net income of $26.1 million and net income available to common stockholders of $21.8 million for the same period in 2024.

On a fully diluted basis, earnings per common share was $0.92 for the three months ended March 31, 2025, compared to $0.46 for the same period in 2024.

ROE was 5.56% and ROA was 0.61% for the three months ended March 31, 2025, compared to 3.03% and 0.36%, respectively, for the same period in 2024.

The increase in net income for the three months ended March 31, 2025 compared to the same period in 2024 resulted primarily from an increase in net interest income.

Three months ended June 30, 2025 compared to three months ended June 30, 2024

The Company reported net income of $77.3 million and net income available to common stockholders of $73.0 million for the second quarter of 2025, compared to net income of $41.7 million and net income available to common stockholders of $37.4 million for the second quarter of 2024.

On a fully diluted basis, earnings per common share was $1.58 for the second quarter of 2025, compared to $0.80 for the same period in 2024.

ROE was 9.17% and ROA was 0.99% for the second quarter of 2025, compared to 5.26% and 0.56%, respectively, for the same period in 2024.

The increase in net income for the second quarter of 2025 compared to the second quarter of 2024 resulted primarily from an increase in net interest income.

Six months ended June 30, 2025 compared to six months ended June 30, 2024

The Company reported net income of $124.4 million and net income available to common stockholders of $115.8 million for the six months ended June 30, 2025, compared to net income of $67.8 million and net income available to common stockholders of $59.2 million for the same period in 2024.

On a fully diluted basis, earnings per common share was $2.49 for the six months ended June 30, 2025, compared to $1.25 for the same period in 2024.

ROE was 7.40% and ROA was 0.80% for the six months ended June 30, 2025, compared to 4.14% and 0.46%, respectively, for the same period in 2024.

The increase in net income for the six months ended June 30, 2025 compared to the same period in 2024 resulted primarily from an increase in net interest income.

Details of the changes in the various components of net income are discussed below.

Taxable Equivalent Net Interest Income Analysis - Quarterly(1)

Three Months Ended June 30, 2025 Three Months Ended June 30, 2024

(dollars in thousands) Average

Balance Income/

Expense Yield/

Balance Income/

Expense Yield/

Investment securities(2) $ 4,573,164 $ 45,999 3.93 % $ 4,427,023 $ 33,584 2.80 %

Interest bearing cash and cash equivalents

2,661,037 29,218 4.40 % 3,273,069 43,233 5.31 %

Loans held for sale — — — % 28,768 683 9.55 %

Loans held for investment, mortgage finance 5,327,559 58,707 4.42 % 4,357,288 42,722 3.94 %

Loans held for investment(3) 18,018,626 306,142 6.81 % 16,750,788 301,910 7.25 %

Allowance for credit losses on loans 278,035 — — 263,145 — —

Loans held for investment, net 23,068,150 364,849 6.34 % 20,844,931 344,632 6.65 %

Total earning assets 30,302,351 440,066 5.80 % 28,573,791 422,132 5.86 %

Cash and other assets 1,117,118 1,177,061

Total assets $ 31,419,469 $ 29,750,852

Liabilities and Stockholders’ Equity

Transaction deposits $ 2,213,037 $ 13,731 2.49 % $ 2,061,622 $ 16,982 3.31 %

Savings deposits 13,727,095 134,272 3.92 % 11,981,668 143,173 4.81 %

Time deposits 2,361,525 26,795 4.55 % 1,658,899 21,125 5.12 %

Total interest bearing deposits 18,301,657 174,798 3.83 % 15,702,189 181,280 4.64 %

Short-term borrowings 306,176 3,444 4.51 % 927,253 12,749 5.53 %

Long-term debt 649,469 7,930 4.90 % 778,401 11,457 5.92 %

Total interest bearing liabilities 19,257,302 186,172 3.88 % 17,407,843 205,486 4.75 %

Non-interest bearing deposits 8,191,402 8,647,594

Other liabilities 475,724 537,754

Stockholders’ equity 3,495,041 3,157,661

Total liabilities and stockholders’ equity $ 31,419,469 $ 29,750,852

Net interest income $ 253,894 $ 216,646

Net interest margin 3.35 % 3.01 %

(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.

Taxable Equivalent Net Interest Income Analysis - Year to Date(1)

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

(dollars in thousands) Average

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The following table presents the changes in taxable equivalent net interest income and identifies the changes due to differences in the average volume of earning assets and interest bearing liabilities and the changes due to differences in the average interest rate on those assets and liabilities.

Three Months Ended March 31, Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025/2024 2025/2024

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Net Interest Income

Net interest income was $236.0 million for the three months ended March 31, 2025, compared to $215.0 million for the same period in 2024.

The increase was primarily due to an increase in average total loans held for investment and a decrease in funding costs, partially offset by an increase in average interest bearing liabilities and a decrease in earning asset yields.

Average earning assets increased $1.8 billion for the three months ended March 31, 2025, compared to the same period in 2024, which included increases of $1.5 billion in average total loans held for investment, $164.5 million in average investment securities and $204.2 million in average interest bearing cash and cash equivalents.

Average interest bearing liabilities increased $2.4 billion for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to an increase of $2.7 billion in average interest bearing deposits, partially offset by decreases of $160.6 million in average short-term borrowings and $199.1 million in average long-term debt.

Average non-interest bearing deposits for the three months ended March 31, 2025 decreased to $7.9 billion from $8.6 billion for the same period in 2024.

Net interest margin for the three months ended March 31, 2025 was 3.19%, compared to 3.03% for the same period of 2024.

The increase was primarily due to a decrease in the cost of interest bearing deposits, partially offset by lower earning asset yields, compared to the same period in 2024.

The yield on total loans held for investment decreased to 6.39% for the three months ended March 31, 2025, compared to 6.70% for the same period in 2024, and the yield on earning assets decreased to 5.76% for the three months ended March 31, 2025, compared to 5.88% for the same period in 2024.

Total cost of deposits decreased to 2.76% for the three months ended March 31, 2025 from 2.97% for the same period in 2024 and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.54% for the three months ended March 31, 2025, compared to 2.83% for the same period in 2024.

Net interest income was $253.4 million for the three months ended June 30, 2025, compared to $216.6 million for the same period in 2024.

The increase was 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.

Average earning assets for the three months ended June 30, 2025 increased $1.7 billion compared to the same period in 2024, which included increases of $2.2 billion in average total loans held for investment and $146.1 million in average investment securities, partially offset by a $612.0 million decrease in average interest bearing cash and cash equivalents.

Average interest bearing liabilities increased $1.8 billion for the three months ended June 30, 2025 compared to the same period in 2024, primarily due to a $2.6 billion increase in average interest bearing deposits, partially offset by decreases of $621.1 million in average short-term borrowings and $128.9 million in average long-term debt.

Average non-interest bearing deposits for the three months ended June 30, 2025 decreased to $8.2 billion from $8.6 billion for the same period in 2024.

Net interest margin for the three months ended June 30, 2025 was 3.35%, compared to 3.01% for the same period in 2024.

The increase in net interest margin was primarily due to a decrease in the cost of interest bearing deposits, partially offset by lower earning asset yields.

The yield on total loans held for investment decreased to 6.34% for the three months ended June 30, 2025, compared to 6.65% for the same period in 2024, and the yield on earning assets decreased to 5.80% for the three months ended June 30, 2025, compared to 5.86% for the same period in 2024.

Total cost of deposits decreased to 2.65% for the three months ended June 30, 2025 from 2.99% for the same period in 2024, and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.41% for the three months ended June 30, 2025, compared to 2.83% for the same period in 2024.

Net interest income was $489.4 million for the six months ended June 30, 2025, compared to $431.6 million for the same period in 2024.

The increase was 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.

Average earning assets increased $1.7 billion for the six months ended June 30, 2025, compared to the same period in 2024, which included increases of $1.8 billion in average total loans held for investment and $155.6 million in average investment securities, partially offset by a $208.3 million decrease in average interest bearing cash and cash equivalents.

Average interest bearing liabilities increased $2.1 billion for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to an increase of $2.7 billion in average interest bearing deposits, partially offset by decreases of $392.1 million

in average short-term borrowings and $164.0 million in average long-term debt.

Average non-interest bearing deposits for the six months ended June 30, 2025 decreased to $8.0 billion from $8.6 billion for the same period in 2024.

Net interest margin for the six months ended June 30, 2025 was 3.27%, compared to 3.02% for the same period of 2024.

The increase was primarily due to a decrease in funding costs.

The yield on total loans held for investment decreased to 6.37% for the six months ended June 30, 2025, compared to 6.68% for the same period in 2024, and the yield on earning assets decreased to 5.78% for the six months ended June 30, 2025, compared to 5.87% for the same period in 2024.

Total cost of deposits decreased to 2.70% for the six months ended June 30, 2025 from 2.98% for the same period in 2024 and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.48% for the six months ended June 30, 2025, compared to 2.83% for the same period in 2024.

Non-interest Income

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

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Trading income 7,896 5,650 13,835 10,362

Available-for-sale debt securities losses (1,886) — (1,886) —

Other 9,640 7,985 17,914 14,351

Total non-interest income $ 54,069 $ 50,424 $ 98,513 $ 91,743

Non-interest income increased $3.1 million during the three months ended March 31, 2025, compared to the same period in 2024, primarily due to increases in service charges on deposit accounts, trading income and other non-interest income, partially offset by a decrease in investment banking and advisory fees.

Non-interest income increased $3.6 million during the three months ended June 30, 2025, compared to the same period in 2024, primarily due to increases in service charges on deposit accounts, trading income and other non-interest 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 income was $98.5 million for the six months June 30, 2025, a $6.8 million increase as compared to the same period in 2024, primarily due to increases in service charges on deposit accounts, trading income and other non-interest income, partially offset by a decrease in investment banking and advisory fees and the $1.9 million loss on sale of available-for-sale debt securities mentioned above.

Non-interest Expense

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

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Total non-interest expense $ 190,276 $ 188,409 $ 393,296 $ 390,802

Non-interest expense increased $627,000 during the three months ended March 31, 2025, compared to the same period in 2024.

The increase was primarily due to increases in salaries and benefits and communications and technology expense, partially offset by a decrease in FDIC expense.

The three months ended March 31, 2024 included $3.0 million in additional FDIC special assessment expense.

Non-interest expense increased $1.9 million during the three months ended June 30, 2025, compared to the same period in 2024.

The increase was primarily due to increases in salaries and benefits, occupancy expense and communications and technology expense, partially offset by a decrease in marketing expense.

Non-interest expense was $393.3 million for the six months June 30, 2025, an increase of $2.5 million as compared to the same period in 2024, primarily due to increases in salaries and benefits and communications and technology expense, partially offset by decreases in marketing expense and FDIC insurance assessment.

FDIC insurance assessment included an additional $3.5 million FDIC special assessment expense recorded in the first six months of 2024.

Analysis of Financial Condition

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See Note 1 - Operations and Summary of Significant Accounting Policies in the 2024 Form 10-K for details of these portfolio segments.

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Commercial $ 11,930,668 $ 11,145,591

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Total loans held for investment $ 23,925,534 $ 22,450,066

Total loans held for investment were $22.4 billion at March 31, 2025, an increase of $70.3 million from December 31, 2024, as increases in commercial and commercial real estate loans were partially offset by a decrease in mortgage finance loans.

Mortgage finance loans include legal ownership interests in mortgage loans that the Company purchases from unaffiliated mortgage originators, either directly or through a special purpose entity structure, that are typically sold within 10 to 20 days and represent 21% and 23% of gross loans held for investment at March 31, 2025 and December 31, 2024, respectively.

Total loans held for investment were $23.9 billion at June 30, 2025, an increase of $1.5 billion from December 31, 2024, as increases in commercial, mortgage finance and commercial real estate loans were partially offset by a decrease in consumer loans.

Mortgage finance loans include legal ownership interests in mortgage loans that the Company purchases from unaffiliated mortgage originators, either directly or through a special purpose entity structure, that are typically sold within 10 to 20 days and represent 25% and 23% of gross loans held for investment at June 30, 2025 and December 31, 2024, respectively.

Volumes fluctuate based on the level of market demand for the product and the number of days between purchase and sale of the loans, which can be affected by changes in overall market interest rates, and tend to peak at the end of each month.

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The Company also participates in shared national credits, both as a participant and as an agent.

As of March 31, 2025, the Company had $5.8 billion in shared national credits, $1.0 billion of which the Company administered as agent.

All syndicated loans, whether the Company acts as agent or

participant, are underwritten to the same standards as all other loans the Company originates.

As of March 31, 2025, approximately $34.0 million of the Company’s shared national credits were on non-accrual.

As of June 30, 2025, the Company had $5.7 billion in shared national credits, $1.0 billion of which the Company administered as agent.

All syndicated loans, whether the Company acts as agent or participant, are underwritten to the same standards as all other loans the Company originates.

As of June 30, 2025, approximately $39.4 million of the Company’s shared national credits were on non-accrual.

Portfolio Concentrations

Although more than 50% of the Company’s total loan exposure is outside of Texas and more than 50% of deposits are sourced outside of Texas, Texas concentration remains significant.

As of March 31, 2025, a majority of the loans held for investment, excluding mortgage finance and other national lines of business, were to businesses with headquarters or operations in Texas.

As of June 30, 2025, a majority of the loans held for investment, excluding mortgage finance and other national lines of business, were to businesses with headquarters or operations in Texas.

This geographic concentration subjects the Company’s loan portfolio to the general economic conditions within this state.

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The table below summarizes non-accrual loans by portfolio segment and by type of property securing the credit.

(dollars in thousands) March 31, 2025 December 31, 2024

(dollars in thousands) June 30, 2025 December 31, 2024

Non-accrual loans held for investment

9 unchanged sentences

Office buildings

13,500 14,000

Hotel/motel buildings

Single family residences 304 —

Total commercial real estate 23,252 34,637

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The provision for credit losses, comprised of a provision for loans and off-balance sheet credit losses, is a charge to earnings to maintain the allowance for credit losses at a level consistent with management’s assessment of expected losses at each balance sheet date.

The Company recorded a provision for credit losses of $17.0 million for the three months ended March 31, 2025, compared to a provision of $19.0 million for the three months ended March 31, 2024.

The provision for credit losses for the three months ended March 31, 2025 reflects an increase in criticized loans, $9.8 million in net charge-offs recorded during the three months ended March 31, 2025 and uncertainty in the economic outlook.

Criticized loans totaled $762.9 million at March 31, 2025, compared to $714.0 million at December 31, 2024.

The Company recorded a provision for credit losses of $32.0 million for the six months ended June 30, 2025, compared to a provision of $39.0 million for the six months ended June 30, 2024.

The provision for credit losses for the six months ended June 30, 2025 reflects an increase in total loans held for investment and $22.8 million in net charge-offs recorded during the six months ended June 30, 2025, partially offset by a decline in criticized loans.

Criticized loans totaled $637.5 million at June 30, 2025, compared to $714.0 million at December 31, 2024.

The table below presents key metrics related to the Company’s credit loss experience:

March 31, 2025 March 31, 2024

June 30, 2025 June 30, 2024

Allowance for credit losses on loans to total loans held for investment 1.16 % 1.23 %

2 unchanged sentences

Total provision for credit losses to average total loans held for investment(1)(2) 0.29 % 0.20 %

(1) Ratios are calculated using average balance for the three months ended March 31, 2025 and 2024, respectively.

(2) Ratios are annualized utilizing provision for credit losses for the three months ended March 31, 2025 and 2024, respectively.

(1) Ratios are calculated using average balance for the six months ended June 30, 2025 and 2024, respectively.

(2) Ratios are annualized utilizing provision for credit losses for the six months ended June 30, 2025 and 2024, respectively.

The table below details net charge-offs/(recoveries) as a percentage of average total loans by portfolio segment:

Three Months Ended March 31,

Six Months Ended June 30,

(dollars in thousands) Net

6 unchanged sentences

Total $ 22,762 0.20 % $ 22,719 0.22 %

(1) Ratios are annualized utilizing net charge-offs for the three months ended March 31, 2025 and 2024, respectively.

(1) Ratios are annualized utilizing net charge-offs for the six months ended June 30, 2025 and 2024, respectively.

Liquidity and Capital Resources

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The Company regularly evaluates all of its various funding sources with an emphasis on accessibility, stability, reliability and cost-effectiveness.

The Company’s principal source of funding is customer deposits, supplemented by short-term borrowings, primarily from federal funds purchased and Federal Home Loan Bank (“FHLB”) borrowings, which are generally used to fund mortgage finance loans, and long-term debt.

The Company also relies on the availability of the mortgage secondary market provided by Ginnie Mae and government sponsored entities to support the liquidity of mortgage finance loans.

The following table summarizes the Company’s interest bearing cash and cash equivalents:

(dollars in thousands) March 31, 2025 December 31, 2024

(dollars in thousands) June 30, 2025 December 31, 2024

Interest bearing cash and cash equivalents $ 2,507,691 $ 3,012,307

6 unchanged sentences

The following table summarizes period-end total deposits:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(dollars in thousands) Balance % of Total Balance % of Total

2 unchanged sentences

Total deposits $ 26,064,309 100.0 % $ 25,238,599 100.0 %

Estimated uninsured deposits, including accrued interest, were 41% of total deposits at both March 31, 2025 and December 31, 2024.

Estimated uninsured deposits, including accrued interest, were 41% of total deposits at both June 30, 2025 and December 31, 2024.

The uninsured amounts are estimated based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.

1 unchanged sentence

Such borrowings are generally used to fund mortgage finance loans, due to their liquidity, short duration and interest spreads available.

These borrowing sources include federal funds purchased from downstream correspondent bank relationships (which consist of banks that are smaller than the Bank) and from upstream correspondent bank relationships (which consist of banks that are larger than the Bank), customer repurchase agreements and advances from the FHLB and the Federal Reserve.

These borrowing sources include federal funds purchased from downstream correspondent bank relationships (which consist of banks that are smaller than the Bank) and from upstream correspondent bank relationships (which consist of banks that are larger than the Bank) and advances from the FHLB and the Federal Reserve.

The following table summarizes short-term borrowings, all of which mature within one year:

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

FHLB borrowings $ 1,250,000 $ 885,000

Total short-term and other borrowings $ 750,000 $ 885,000

Total short-term borrowings

$ 1,250,000 $ 885,000

The following table summarizes the Company’s short-term borrowing capacities net of balances outstanding:

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

FHLB borrowing capacity relating to loans and pledged securities $ 1,624,083 $ 4,664,703

4 unchanged sentences

Unused revolving line of credit(2)

(1) FHLB borrowings are collateralized by a blanket floating lien on certain real estate secured loans, mortgage finance loans and certain pledged securities.

$ 75,000 $ 75,000

(1) FHLB borrowings are collateralized by a blanket floating lien on certain real estate secured loans and certain pledged securities.

(2) Unsecured revolving, non-amortizing line of credit with maturity date of February 8, 2026.

1 unchanged sentence

The loan agreement contains customary financial covenants and restrictions.

No borrowings were made against this line of credit during the three months ended March 31, 2025 or 2024.

The Company has long-term debt outstanding of $660.5 million as of March 31, 2025, comprised of trust preferred securities and subordinated notes with maturity dates ranging from January 2026 to December 2036.

No borrowings were made against this line of credit during the six months ended June 30, 2025 or 2024.

The Company has long-term debt outstanding of $620.3 million as of June 30, 2025, comprised of trust preferred securities and subordinated notes with maturity dates ranging from January 2026 to December 2036.

See Note 5 - Short-Term Borrowings and Long-Term Debt in the accompanying notes to the consolidated financial statements included elsewhere in this report for additional information.

7 unchanged sentences

Capital Resources

The Company’s equity capital averaged $3.4 billion for the three months ended March 31, 2025 compared to $3.2 billion for the same period in 2024.

The Company’s equity capital averaged $3.5 billion for the six months ended June 30, 2025 compared to $3.2 billion for the same period in 2024.

The Company has not paid any cash dividends on common stock since operations commenced and has no plans to do so in the foreseeable future.

On January 22, 2025, the Company’s board of directors authorized a share repurchase program under which the Company may repurchase up to $200.0 million in shares of its outstanding common stock, excluding the effect of excise tax expense incurred on net stock repurchases.

On January 22, 2025, the Company’s board of directors authorized a new share repurchase program under which the Company may repurchase up to $200.0 million in shares of its outstanding common stock, excluding the effect of excise tax expense incurred on net stock repurchases.

The share repurchase program expires on January 31, 2026, but may be suspended or discontinued at any time.

Remaining repurchase authorization under the January 17, 2024 share repurchase program was terminated upon authorization of this new program.

During the three months ended March 31, 2025, the Company repurchased 396,106 shares of its common stock for an aggregate purchase price, including excise tax expense, of $31.2 million, at a weighted average price of $78.25 per share.

During the six months ended June 30, 2025, the Company repurchased 713,966 shares of its common stock for an aggregate purchase price, including excise tax expense, of $52.2 million, at a weighted average price of $72.58 per share.

Any repurchases under the Company’s repurchase program will be made in accordance with applicable securities laws from time to time in open market or private transactions.

25 unchanged sentences

Management considers a range of macroeconomic scenarios in connection with the allowance estimation process.

Within the various economic scenarios considered as of March 31, 2025, the quantitative estimate of the allowance for credit loss would increase by approximately $132.8 million under sole consideration of the most severe downside scenario.

Within the various economic scenarios considered as of June 30, 2025, the quantitative estimate of the allowance for credit loss would increase by approximately $145.4 million under sole consideration of the most severe downside scenario.

The quoted sensitivity calculation reflects the sensitivity of the modeled allowance estimate to macroeconomic forecast data, but is absent of qualitative overlays and other qualitative adjustments that are part of the quarterly reserving process and does not necessarily reflect the nature and extent of future changes in the allowance for reasons including increases or decreases in qualitative adjustments, changes in the risk profile and size of the portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements