What changed in this filing

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Item 1. Financial Statements

2025-10-23 compared with 2025-07-17 · 233 added, 222 removed, 914 unchanged (33% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS - UNAUDITED

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

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

Cash and due from banks $ 212,438 $ 176,501

25 unchanged sentences

Authorized shares - 10,000,000

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

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

300,000 300,000

1 unchanged sentence

Authorized shares - 100,000,000

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

Issued shares - 51,767,419 and 51,520,315 at September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 1,069,582 1,056,719

Retained earnings 2,712,298 2,495,651

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

Treasury stock - 6,087,556 and 5,286,503 shares at cost at September 30, 2025 and December 31, 2024, respectively

( 361,076 ) ( 301,842 )

6 unchanged sentences

COMPREHENSIVE INCOME - UNAUDITED

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

Three Months Ended September 30, Nine Months Ended September 30,

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

30 unchanged sentences

Total non-interest expense 190,575 195,324 583,871 586,126

Income before income taxes 102,188 58,597 162,646 93,532

Income tax expense 24,860 16,935 38,271 25,728

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

Income/(loss) before income taxes 137,779 ( 79,993 ) 300,425 13,539

Income tax expense/(benefit) 32,569 ( 18,674 ) 70,840 7,054

Net income/(loss) 105,210 ( 61,319 ) 229,585 6,485

Preferred stock dividends 4,313 4,313 12,938 12,938

Net income available to common stockholders $ 73,016 $ 37,350 $ 115,750 $ 59,179

Net income/(loss) available to common stockholders $ 100,897 $ ( 65,632 ) $ 216,647 $ ( 6,453 )

Other comprehensive income/(loss)

2 unchanged sentences

6,172 199,599 26,498 239,132

Other comprehensive income/(loss) 30,005 5,886 90,643 ( 16,749 )

Income tax expense/(benefit) 6,774 ( 6,268 ) 20,467 ( 11,021 )

Other comprehensive income/(loss), net of tax 23,231 12,154 70,176 ( 5,728 )

Comprehensive income $ 100,559 $ 53,816 $ 194,551 $ 62,076

Basic earnings per common share

Other comprehensive income

37,081 309,448 127,724 292,699

Diluted earnings per common share

Income tax expense

8,374 69,873 28,841 58,852

Other comprehensive income, net of tax

28,707 239,575 98,883 233,847

Comprehensive income $ 133,917 $ 178,256 $ 328,468 $ 240,332

Basic earnings/(loss) per common share $ 2.21 $ ( 1.42 ) $ 4.72 $ ( 0.14 )

Diluted earnings/(loss) per common share $ 2.18 $ ( 1.41 ) $ 4.67 $ ( 0.14 )

See accompanying notes to consolidated financial statements.

4 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

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

Comprehensive income/(loss):

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

Net loss — — — — — ( 61,319 ) — — — ( 61,319 )

Change in other comprehensive income/(loss), net of taxes — — — — — — — — 239,575 239,575

3 unchanged sentences

Issuance of stock related to stock-based awards — — 19,679 — ( 457 ) — — — — ( 457 )

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

Balance at September 30, 2024 300,000 $ 300,000 51,494,260 $ 515 $ 1,054,614 $ 2,428,940 ( 5,286,503 ) $ ( 301,868 ) $ ( 128,157 ) $ 3,354,044

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

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):

6 unchanged sentences

Repurchase of common stock — — — — — — ( 87,087 ) ( 7,076 ) — ( 7,076 )

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

Balance at September 30, 2025 300,000 $ 300,000 51,767,419 $ 518 $ 1,069,582 $ 2,712,298 ( 6,087,556 ) $ ( 361,076 ) $ ( 84,224 ) $ 3,637,098

See accompanying notes to consolidated financial statements.

17 unchanged sentences

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

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 September 30, 2024 300,000 $ 300,000 51,494,260 $ 515 $ 1,054,614 $ 2,428,940 ( 5,286,503 ) $ ( 301,868 ) $ ( 128,157 ) $ 3,354,044

Balance at December 31, 2024 (audited)

10 unchanged sentences

Repurchase of common stock — — — — — — ( 801,053 ) ( 59,234 ) — ( 59,234 )

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

Balance at September 30, 2025 300,000 $ 300,000 51,767,419 $ 518 $ 1,069,582 $ 2,712,298 ( 6,087,556 ) $ ( 361,076 ) $ ( 84,224 ) $ 3,637,098

See accompanying notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2025 2024

5 unchanged sentences

Net loss on available-for-sale debt securities 1,886 179,581

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

Net gain on equity securities ( 2,265 ) ( 6,727 )

Sales/(purchases) of trading securities, net ( 2,219 ) —

17 unchanged sentences

Financing activities

Net increase/(decrease) in deposits 825,710 1,446,488

Net increase in deposits 2,266,799 3,493,416

Issuance of stock related to stock-based awards ( 7,559 ) ( 9,187 )

1 unchanged sentence

Repurchase of common stock ( 59,234 ) ( 81,534 )

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

Net decrease in short-term borrowings ( 610,000 ) ( 465,000 )

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

Net cash provided by financing activities 1,536,633 2,724,757

Net increase in cash and cash equivalents ( 498,666 ) ( 329,771 )

Net increase/(decrease) in cash and cash equivalents ( 123,983 ) 948,735

Cash and cash equivalents at beginning of period 3,188,808 3,242,850

18 unchanged sentences

The Company was incorporated as a Delaware corporation in 1996 and commenced banking operations in 1998.

Effective September 19, 2025, the Bank became a member of the Federal Reserve System.

As a result, the Board of Governors of the Federal Reserve System assumed the role as the Bank’s primary federal regulator, succeeding the Federal Deposit Insurance Corporation.

The Texas Department of Banking will continue to serve as the Bank’s primary state regulator.

Basis of Presentation

12 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

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

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

Net income/(loss) $ 105,210 $ ( 61,319 ) $ 229,585 $ 6,485

Preferred stock dividends 4,313 4,313 12,938 12,938

Net income available to common stockholders

$ 73,016 $ 37,350 $ 115,750 $ 59,179

Net income/(loss) available to common stockholders $ 100,897 $ ( 65,632 ) $ 216,647 $ ( 6,453 )

Basic earnings per common share—weighted average common shares 45,708,185 46,201,518 45,873,276 46,674,034

1 unchanged sentence

Dilutive earnings per common share—weighted average diluted common shares 46,233,167 46,608,742 46,348,236 47,053,717

Basic earnings per common share

$ 1.59 $ 0.80 $ 2.52 $ 1.26

Diluted earnings per common share

$ 1.58 $ 0.80 $ 2.49 $ 1.25

Basic earnings/(loss) per common share $ 2.21 $ ( 1.42 ) $ 4.72 $ ( 0.14 )

Diluted earnings/(loss) per common share $ 2.18 $ ( 1.41 ) $ 4.67 $ ( 0.14 )

Anti-dilutive outstanding stock-settled awards — 622 207 62,560

4 unchanged sentences

Losses Estimated

June 30, 2025

September 30, 2025

Available-for-sale debt securities:

2 unchanged sentences

243,360 2,899 ( 6 ) 246,253

CRT securities 11,829 — ( 462 ) 11,367

Credit risk transfer securities

11,447 — ( 454 ) 10,993

Total available-for-sale debt securities 3,870,870 30,998 ( 100,607 ) 3,801,261

11 unchanged sentences

206,830 — ( 5,398 ) 201,432

CRT securities 12,466 — ( 540 ) 11,926

Credit risk transfer securities

12,466 — ( 540 ) 11,926

Total available-for-sale debt securities 3,694,578 7,200 ( 177,092 ) 3,524,686

4 unchanged sentences

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

(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.

(1) Excludes accrued interest receivable of $ 15.6 million and $ 13.8 million at September 30, 2025 and December 31, 2024, respectively, related to available-for-sale debt securities and $ 1.2 million and $ 1.3 million at September 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.

1 unchanged sentence

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.

In the third quarter of 2024, the Company sold available-for-sale debt securities with an amortized cost basis of $1.2 billion and realized a loss of $179.6 million.

The amortized cost and estimated fair value as of September 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 $ 3,870,870 $ 3,801,261 $ 743,120 $ 661,923

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

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

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

Residential mortgage-backed securities Commercial mortgage-backed securities

CRT securities

Credit risk transfer securities

Due within one year — % — % — %

6 unchanged sentences

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

June 30, 2025

September 30, 2025

Residential mortgage-backed securities $ 23 $ — $ 1,014,549 $ ( 100,147 ) $ 1,014,572 $ ( 100,147 )

1 unchanged sentence

33,327 ( 6 ) — — 33,327 ( 6 )

CRT securities — — 11,367 ( 462 ) 11,367 ( 462 )

Credit risk transfer securities

— — 10,993 ( 454 ) 10,993 ( 454 )

Total $ 33,350 $ ( 6 ) $ 1,025,542 $ ( 100,601 ) $ 1,058,892 $ ( 100,607 )

4 unchanged sentences

201,432 ( 5,398 ) — — 201,432 ( 5,398 )

CRT securities — — 11,926 ( 540 ) 11,926 ( 540 )

Credit risk transfer securities

— — 11,926 ( 540 ) 11,926 ( 540 )

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

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.

At September 30, 2025, the Company had 32 available-for-sale debt securities in an unrealized loss position, comprised of 29 residential mortgage-backed securities, one commercial mortgage-backed securities and two credit risk transfer 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 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.

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

At September 30, 2025 and December 31, 2024, debt securities with carrying values of approximately $ 951,000 and $ 940,000 , respectively, were pledged to secure certain customer deposits.

Equi ty Securities

Equity securities consist of investments that qualify for consideration under the regulations implementing the Community Reinvestment Act and investments in exchange traded funds.

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

4 unchanged sentences

Loans are summarized by portfolio segment as follows:

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

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

Loans held for investment(1):

8 unchanged sentences

Total loans held for investment, net $ 23,917,837 $ 22,178,357

(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.

(1) Excludes accrued interest receivable of $ 107.6 million and $ 107.3 million at September 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

June 30, 2025

September 30, 2025

(1-7) Pass $ 1,515,522 $ 1,304,446 $ 786,716 $ 905,138 $ 205,979 $ 158,114 $ 6,708,635 $ 30,271 $ 11,614,821

53 unchanged sentences

Finance Commercial Real Estate Consumer Total

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

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

4 unchanged sentences

Ending balance $ 197,537 $ 8,699 $ 66,001 $ 1,789 $ 274,026

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

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

Allowance established for acquired PCD loans 2,579 — — — 2,579

Provision for credit losses on loans 54,529 1,290 ( 6,840 ) 414 49,393

3 unchanged sentences

Ending balance $ 205,471 $ 5,463 $ 59,291 $ 2,918 $ 273,143

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.

The Company recorded a $ 38.8 million provision for credit losses on loans for the nine months ended September 30, 2025, compared to $ 49.4 million for the same period of 2024.

The $ 38.8 million provision for credit losses on loans resulted primarily from an increase in total loans held for investment and $ 36.5 million in net charge-offs recorded during the nine months ended September 30, 2025, partially offset by decreases in criticized loans and non-accrual loans.

Criticized loans totaled $ 529.7 million at September 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 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.

At September 30, 2025, the Company had $ 13.2 million in collateral-dependent commercial loans, collateralized by business assets, and $ 24.1 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

June 30, 2025

September 30, 2025

Commercial $ 5,202 $ 1,340 $ 126 $ 6,668 $ 71,966 $ 11,920,391 $ 11,999,025 $ 3,073

3 unchanged sentences

Total $ 5,498 $ 3,436 $ 126 $ 9,060 $ 96,084 $ 24,188,531 $ 24,293,675 $ 7,641

(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.

(1) As of September 30, 2025, $ 556,000 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 nine months ended September 30, 2025 compared to $ 272,000 for the same period in 2024.

Accrued interest of $ 1.5 million and $ 917,000 was reversed during the nine months ended September 30, 2025 and September 30, 2024, respectively.

Modifications to Borrowers Experiencing Financial Difficulty

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:

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

Financial Statement Impact

3 unchanged sentences

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

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

Three Months Ended September 30, 2025

Commercial $ 791 $ 8,948 $ 758 $ 10,497 0.04 % — % 3 to 6

1 unchanged sentence

Total $ 791 $ 8,948 $ 18,263 $ 28,002 0.12 %

Six Months Ended June 30, 2025

Three Months Ended September 30, 2024

Commercial $ 360 $ — $ — $ 360 — % — % 0

Total $ 360 $ — $ — $ 360 — %

Nine Months Ended September 30, 2025

Commercial $ 12,100 $ 19,950 $ 23,126 $ 55,176 0.23 % — % 3 to 26

1 unchanged sentence

Total $ 30,263 $ 19,950 $ 40,631 $ 90,844 0.37 %

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Commercial $ 28,082 $ 553 $ 7,439 $ 36,074 0.16 % — % 3 to 13

7 unchanged sentences

and Term Extension

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Commercial $ 179 $ 3,000 $ 14,613 $ 17,792

Commercial real estate — — — —

Total $ 179 $ 3,000 $ 14,613 $ 17,792

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Commercial $ 2,902 $ — $ — $ 2,902

$ 2,902 $ — $ — $ 2,902

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Commercial $ 25,675 $ 9,537 $ 14,613 $ 49,825

1 unchanged sentence

Total $ 25,675 $ 9,537 $ 28,113 $ 63,325

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Commercial $ 6,031 $ — $ 1,756 $ 7,787

Total $ 6,031 $ — $ 1,756 $ 7,787

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:

The table below provides an age analysis of gross loans held for investment as of September 30, 2025 and September 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

June 30, 2025

September 30, 2025

Commercial $ 758 $ — $ 47,849 $ 18,157 $ 66,764

2 unchanged sentences

Total $ 758 $ — $ 65,355 $ 18,157 $ 84,270

June 30, 2024

September 30, 2024

Commercial $ — $ — $ 10,191 $ 4,474 $ 14,665

4 unchanged sentences

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

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

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

Federal funds purchased $ 275,000 $ —

Federal Home Loan Bank borrowings

$ 1,250,000 $ 885,000

Total short-term borrowings $ 275,000 $ 885,000

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

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

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

Bank-issued 5.25 % fixed rate subordinated notes due 2026

10 unchanged sentences

Real Estate Consumer Total

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

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

1 unchanged sentence

Ending balance $ 53,624 $ 25 $ 4,829 $ 35 $ 58,513

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

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

1 unchanged sentence

Ending balance $ 41,741 $ 32 $ 4,047 $ 149 $ 45,969

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

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

Commitments to extend credit - period end balance $ 11,063,858 $ 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 six months ended June 30, 2025 or during 2024.

No dividends were declared or paid on the Company’s common stock during the nine months ended September 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 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.

During the nine months ended September 30, 2025, the Company repurchased 801,053 shares of its common stock for an aggregate price, including excise tax expense, of $ 59.2 million, at a weighted average price of $ 73.44 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 June 30, 2025 and December 31, 2024.

June 30, 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 September 30, 2025 and December 31, 2024.

September 30, 2025 December 31, 2024

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

7 unchanged sentences

Tier 1 capital (to average assets)(1) 4.00 % 5.00 % 3,509,504 10.99 % 3,611,714 11.27 %

(1) The Tier 1 capital ratio (to average assets) is not impacted by the Basel III Capital Rules;

however, the Federal Reserve Board and the FDIC may require the Company and the Bank, respectively, to maintain a Tier 1 capital ratio (to average assets) above the required minimum.

(1) The Tier 1 capital (to average assets) ratio is not impacted by the Basel III Capital Rules;

however, the Federal Reserve Board and the FDIC may require the Company and the Bank, respectively, to maintain a Tier 1 capital (to average assets) ratio above the required minimum.

(2) Percentages represent the minimum capital ratios plus, as applicable, the fully phased-in 2.5% CET1 capital buffer under the Basel III Capital Rules.

5 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

3 unchanged sentences

Total $ 8,237 $ 6,453 $ 28,614 $ 21,208

(in thousands except period data) June 30, 2025

(in thousands except period data) September 30, 2025

Unrecognized compensation expense related to unvested stock-settled awards $ 22,406

8 unchanged sentences

(in thousands) Level 1 Level 2 Level 3

June 30, 2025

September 30, 2025

Available-for-sale debt securities:(1)

1 unchanged sentence

Commercial mortgage-backed securities

CRT securities — — 11,367

Credit risk transfer securities

Equity securities(1)

45,054 10,000 —

Trading securities(1) — 2,219 —

9 unchanged sentences

Commercial mortgage-backed securities

CRT securities — — 11,926

Credit risk transfer securities

Equity securities(1)

59,235 16,026 —

Loans held for investment(2)

4 unchanged sentences

(1) Available-for-sale debt securities, equity securities and trading securities are measured at fair value on a recurring basis, generally monthly.

(2) Equity securities consist of investments that qualify for consideration under the regulations implementing the Community Reinvestment Act and investments in exchange traded funds.

(2) Includes certain collateral-dependent loans held for investment for which a specific allocation of the allowance for credit losses is based upon the fair value of the loan’s underlying collateral.

These loans held for investment are measured on a nonrecurring basis, generally annually or more often as warranted by market and economic conditions.

(4) Derivative assets and liabilities are measured at fair value on a recurring basis, generally quarterly.

(3) Derivative assets and liabilities are measured at fair value on a recurring basis, generally monthly.

(4) Securities sold not yet purchased are measured at fair value on a recurring basis, generally monthly.

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

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Available-for-sale debt securities:(1)

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

Three Months Ended June 30, 2024

Credit risk transfer securities

$ 11,367 $ — $ ( 382 ) $ — $ 8 $ 10,993

Three Months Ended September 30, 2024

Available-for-sale debt securities:(1)

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

Six Months Ended June 30, 2025

Credit risk transfer securities

$ 12,328 $ — $ ( 346 ) $ — $ 20 $ 12,002

Nine Months Ended September 30, 2025

Available-for-sale debt securities:(1)

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

Six Months Ended June 30, 2024

Credit risk transfer securities

$ 11,926 $ — $ ( 1,019 ) $ — $ 86 $ 10,993

Nine Months Ended September 30, 2024

Available-for-sale debt securities:(1)

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

Credit risk transfer securities

$ 11,995 $ — $ ( 846 ) $ — $ 853 $ 12,002

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

Realized gains/(losses) are recorded in other non-interest income on the consolidated statements of income and other comprehensive income/(loss).

CRT securities

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 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.

Credit risk transfer securities

The fair value of credit risk transfer 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 September 30, 2025, the discount rates utilized ranged from 4.65 % to 5.68 % and the weighted-average life ranged from 3.88 years to 5.90 years.

On a combined amortized cost weighted-average basis a discount rate of 5.09 % and a weighted-average life of 4.74 years were utilized to determine the fair value of these securities at September 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.

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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 $ 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 $ 21.1 million fair value of loans held for investment at September 30, 2025 reported above includes impaired loans with a carrying value of $ 35.8 million that were reduced by specific allowance allocations totaling $ 14.7 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.

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(in thousands) Total Level 1 Level 2 Level 3

June 30, 2025

September 30, 2025

Financial assets:

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Estimated Fair Value Estimated Fair Value

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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 $ 50.1 million at June 30, 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 $ 37.3 million at September 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 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.

At September 30, 2025, the Company had $ 30.0 million in cash collateral pledged to counterparties included in interest bearing cash and cash equivalents on the consolidated balance sheet and $ 10.6 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.

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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 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.

The Company is party to 19 risk participation agreements where it acts as a participant bank with a notional amount of $ 228.9 million at September 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 $ 627,000 at September 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 September 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 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.

The Company is party to 46 risk participation agreements where the Company acts as the lead bank having a notional amount of $ 587.9 million at September 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 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.

During the nine months ended September 30, 2025, the Company recorded $ 943,000 in unrealized gains to adjust its cash flow hedges to fair value, which was recorded net of tax to AOCI, and reclassified $ 21.6 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 $ 25,000 will be reclassified from AOCI as an increase to interest income.

As of September 30, 2025, the maximum length of time over which forecasted transactions are hedged is 2.09 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 June 30, 2025

Three Months Ended September 30, 2025

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

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Ending balance $ 2,191 $ ( 53,892 ) $ ( 32,523 ) $ ( 84,224 )

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

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

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Amounts reclassified into net income 18,251 179,581 1,767 199,599

Total other comprehensive income/(loss) 9,376 ( 5,201 ) 1,711 5,886

Income tax expense/(benefit) 1,047 ( 6,880 ) ( 435 ) ( 6,268 )

Total other comprehensive income/(loss), net of tax 8,329 1,679 2,146 12,154

Total other comprehensive income

37,100 270,581 1,767 309,448

Income tax expense

8,377 61,097 399 69,873

Total other comprehensive income, net of tax

28,723 209,484 1,368 239,575

Ending balance $ ( 16,492 ) $ ( 74,075 ) $ ( 37,590 ) $ ( 128,157 )

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

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

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Ending balance $ 2,191 $ ( 53,892 ) $ ( 32,523 ) $ ( 84,224 )

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

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

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Amounts reclassified into net income 54,371 179,581 5,180 239,132

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 )

Total other comprehensive income

36,609 250,910 5,180 292,699

Income tax expense

7,352 51,179 321 58,852

Total other comprehensive income, net of tax

29,257 199,731 4,859 233,847

Ending balance $ ( 16,492 ) $ ( 74,075 ) $ ( 37,590 ) $ ( 128,157 )

(12) New Accounting Standards

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.

Accounting Standards Update 2025-05 “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”) provides certain entities with an additional practical expedient and an accounting policy election for estimating expected credit losses on current accounts receivable and current contract assets arising from revenue transactions accounted for under Topic 606, Revenue from Contracts with Customers .

ASU 2025-05 will be effective for the Company beginning January 1, 2026 for the Company’s interim and annual financial statements on Forms 10-Q and 10-K, respectively, with early adoption permitted and is not expected to have a significant impact on the Company’s financial statements.

Accounting Standards Update 2025-06 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

(“ASU 2025-06”) removes all references to prescriptive and sequential software development stages and clarifies that the threshold for when an entity is required to start capitalizing software costs is when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

ASU 2025-06 will be effective for the Company beginning January 1, 2028 for the Company’s interim and annual financial statements on Forms 10Q and 10-K, respectively, with early adoption permitted and is not expected to have a significant impact on the Company’s financial statements.

Accounting Standards Update 2025-07 “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606):

Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract” (“ASU 2025-07”) refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting.

ASU 2025-07 also clarifies the guidance on share-based payments from a customer in a revenue contract under Topic 606.

ASU 2025-07 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, with early adoption permitted 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 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.

The following discussion and analysis of the Company’s financial condition and results of operations for the three and nine months ended September 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 the Company’s 2024 Form 10-K.

Operating results for the three and nine months ended September 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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TCBI’s ability to use technology to provide products and services to its customers;

risks related to the development and use of AI;

risks related to the development and use of artificial intelligence;

changes in interest rates, including the impact of interest rates on TCBI’s securities portfolio and funding costs, as well as related balance sheet implications stemming from the fair value of our assets and liabilities;

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

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

Three Months Ended September 30, Nine Months Ended September 30,

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

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Non-interest expense 190,575 195,324 583,871 586,126

Income before income taxes

102,188 58,597 162,646 93,532

Income tax expense

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

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

Income/(loss) before income taxes 137,779 (79,993) 300,425 13,539

Income tax expense/(benefit) 32,569 (18,674) 70,840 7,054

Net income/(loss) 105,210 (61,319) 229,585 6,485

Preferred stock dividends 4,313 4,313 12,938 12,938

Net income available to common stockholders

$ 73,016 $ 37,350 $ 115,750 $ 59,179

Basic earnings per common share

$ 1.59 $ 0.80 $ 2.52 $ 1.26

Diluted earnings per common share

$ 1.58 $ 0.80 $ 2.49 $ 1.25

Net income/(loss) available to common stockholders $ 100,897 $ (65,632) $ 216,647 $ (6,453)

Basic earnings/(loss) per common share $ 2.21 $ (1.42) $ 4.72 $ (0.14)

Diluted earnings/(loss) per common share $ 2.18 $ (1.41) $ 4.67 $ (0.14)

Net interest margin 3.47 % 3.16 % 3.34 % 3.07 %

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

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

The Company reported net income of $105.2 million and net income available to common stockholders of $100.9 million for the third quarter of 2025, compared to net loss of $61.3 million and net loss available to common stockholders of $65.6 million for the third quarter of 2024.

On a fully diluted basis, earnings per common share was $2.18 for the third quarter of 2025, compared to net loss per common share of $1.41 for the same period in 2024.

ROE was 12.04% and ROA was 1.30% for the third quarter of 2025, compared to (8.87)% and (0.78)%, respectively, for the same period in 2024.

The increase in net income for the third quarter of 2025 compared to the third quarter of 2024 resulted primarily from increases in net interest income and non-interest income.

Nine months ended September 30, 2025 compared to nine months ended September 30, 2024

The Company reported net income of $229.6 million and net income available to common stockholders of $216.6 million for the nine months ended September 30, 2025, compared to net income of $6.5 million and net loss available to common stockholders of $6.5 million for the same period in 2024.

On a fully diluted basis, earnings per common share was $4.67 for the nine months ended September 30, 2025, compared to loss per common share of $0.14 for the same period in 2024.

ROE was 9.02% and ROA was 0.97% for the nine months ended September 30, 2025, compared to (0.30)% and 0.03%, respectively, for the same period in 2024.

The increase in net income for the nine months ended September 30, 2025 compared to the same period in 2024 resulted primarily from increases in net interest income and non-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

Three Months Ended September 30, 2025 Three Months Ended September 30, 2024

(dollars in thousands) Average

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

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

Nine Months Ended September 30, 2025 Nine Months Ended September 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025/2024 2025/2024

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Net Interest Income

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.

Net interest income was $271.8 million for the three months ended September 30, 2025, compared to $240.1 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 a decrease in earning asset yields and an increase in average interest bearing liabilities.

Average earning assets for the three months ended September 30, 2025 increased $1.0 billion compared to the same period in 2024, which included increases of $1.8 billion in average total loans held for investment and $320.2 million in average investment securities, partially offset by a $1.0 billion decrease in average interest bearing cash and cash equivalents.

Average interest bearing liabilities increased $1.8 billion for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to a $2.8 billion increase in average interest bearing deposits, partially offset by decreases of $968.6 million in average short-term borrowings and $39.8 million in average long-term debt.

Average non-interest bearing deposits for the three months ended September 30, 2025 decreased to $8.4 billion from $9.4 billion for the same period in 2024.

Net interest margin for the three months ended September 30, 2025 was 3.47%, compared to 3.16% 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 yield on total loans held for investment decreased to 6.42% for the three months ended September 30, 2025, compared to 6.62% for the same period in 2024, and the yield on earning assets decreased to 5.88% for the three months ended September 30, 2025, compared to 5.96% for the same period in 2024.

Total cost of deposits decreased to 2.62% for the three months ended September 30, 2025 from 2.94% for the same period in 2024, and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.36% for the three months ended September 30, 2025, compared to 2.76% for the same period in 2024.

Net interest income was $761.2 million for the nine months ended September 30, 2025, compared to $671.7 million for the same period in 2024.

Average earning assets increased $1.5 billion for the nine months ended September 30, 2025, compared to the same period in 2024, which included increases of $1.8 billion in average total loans held for investment and $211.0 million in average investment securities, partially offset by a $487.8 million decrease in average interest bearing cash and cash equivalents.

Average interest bearing liabilities increased $2.0 billion for the nine months ended September 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 $586.2 million in average short-term borrowings and $122.3 million in average long-term debt.

Average non-interest bearing deposits for the nine months ended September 30, 2025 decreased to $8.1 billion from $8.9 billion for the same period in 2024.

Net interest margin for the nine months ended September 30, 2025 was 3.34%, compared to 3.07% 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.

The yield on total loans held for investment decreased to 6.39% for the nine months ended September 30, 2025, compared to 6.66% for the same period in 2024, and the yield on earning assets decreased to 5.82% for the nine months ended September 30, 2025, compared to 5.90% for the same period in 2024.

Total cost of deposits decreased to 2.67% for the nine months ended September 30, 2025 from 2.97% for the same period in 2024 and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.44% for the nine months ended September 30, 2025, compared to 2.80% for the same period in 2024.

Non-interest Income

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

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

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Total non-interest income $ 68,583 $ (114,771) $ 167,096 $ (23,028)

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 income increased $183.4 million during the three months ended September 30, 2025, compared to the same period in 2024, primarily due to the inclusion of a $179.6 million loss on sale of available-for-sale debt securities recognized during the third quarter of 2024, as well as increases in service charges on deposit accounts, trading income and other non-interest income.

Non-interest income was $167.1 million for the nine months September 30, 2025, a $190.1 million increase as compared to the same period in 2024, primarily due to the inclusion of the $179.6 million loss on sale of available-for-sale debt securities recognized during the third quarter of 2024 mentioned above, as well as 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 Expense

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

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

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Total non-interest expense $ 190,575 $ 195,324 $ 583,871 $ 586,126

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.

Non-interest expense decreased $4.7 million during the three months ended September 30, 2025, compared to the same period in 2024.

The increase was primarily due to decreases in salaries and benefits, occupancy expense and communications and technology expense, resulting from restructuring expenses recognized in the third quarter of 2024, as well as a decrease in marketing expense, partially offset by an increase in legal and professional expense.

Non-interest expense was $583.9 million for the nine months September 30, 2025, an increase of $2.3 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 $2.8 million FDIC special assessment expense recorded in the first nine months of 2024.

Analysis of Financial Condition

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The following table summarizes the Company’s loans held for investment by portfolio segment.

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

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

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

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

Commercial $ 11,999,025 $ 11,145,591

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Total loans held for investment $ 24,191,863 $ 22,450,066

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.

Total loans held for investment were $24.2 billion at September 30, 2025, an increase of $1.7 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.

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

As of September 30, 2025, the Company had $5.9 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.

As of September 30, 2025, approximately $32.1 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 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.

As of September 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) June 30, 2025 December 31, 2024

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

Non-accrual loans held for investment

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22,584 20,637

Commercial buildings

Office buildings

Single family residences 304 —

Total commercial real estate 24,118 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 $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 Company recorded a provision for credit losses of $44.0 million for the nine months ended September 30, 2025, compared to a provision of $49.0 million for the nine months ended September 30, 2024.

The provision for credit losses for the nine months ended September 30, 2025 reflects an increase in total loans held for investment and $36.5 million in net charge-offs recorded during the nine months ended September 30, 2025, partially offset by decreases in criticized loans and non-accrual loans.

Criticized loans totaled $529.7 million at September 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:

June 30, 2025 June 30, 2024

September 30, 2025 September 30, 2024

Allowance for credit losses on loans to total loans held for investment 1.13 % 1.23 %

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Total provision for credit losses to average total loans held for investment(1)(2) 0.26 % 0.31 %

(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.

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

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

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

Six Months Ended June 30,

Nine Months Ended September 30,

(dollars in thousands) Net

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Total $ 36,502 0.21 % $ 28,802 0.18 %

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

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

Liquidity and Capital Resources

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

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

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

Interest bearing cash and cash equivalents $ 2,852,387 $ 3,012,307

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The following table summarizes period-end total deposits:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

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

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Total deposits $ 27,505,398 100.0 % $ 25,238,599 100.0 %

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

Estimated uninsured deposits, including accrued interest, were 42% of total deposits at September 30, 2025 and 41% at December 31, 2024.

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

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

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

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

Federal funds purchased $ 275,000 $ —

FHLB borrowings — 885,000

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

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

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

FHLB borrowing capacity relating to loans and pledged securities $ 2,841,660 $ 4,664,703

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The loan agreement contains customary financial covenants and restrictions.

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.

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

The Company has long-term debt outstanding of $620.4 million as of September 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.

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See Note 7 - Regulatory Ratios and Capital in the accompanying notes to the consolidated financial statements included elsewhere in this report for additional information regarding dividend restrictions and “ Liquidity Risks ” included in Part I, Item 1A.

Risk Factors of the 2024 Form 10-K.

Risk Factors of the Company’s 2024 Form 10-K.

Periodically, based on market conditions and other factors, and subject to compliance with applicable laws and regulations and the terms of its existing indebtedness, the Company may repay, repurchase, exchange or redeem outstanding indebtedness, or otherwise enter into transactions regarding debt or capital structure.

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Capital Resources

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’s equity capital averaged $3.5 billion for the nine months ended September 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.

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

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.

During the nine months ended September 30, 2025, the Company repurchased 801,053 shares of its common stock for an aggregate purchase price, including excise tax expense, of $59.2 million, at a weighted average price of $73.44 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.

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

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.

Within the various economic scenarios considered as of September 30, 2025, the quantitative estimate of the allowance for credit loss would increase by approximately $134.7 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