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Contact:
Tricia Linderman, 214.932.6798
tricia.linderman@texascapitalbank.com

OVERVIEW
Texas Capital Bancshares (Nasdaq: TCBI), the parent company of Texas Capital Bank, continued its strong growth in the third quarter of 2003 as compared to the third quarter of 2002:

• EPS increased 56%
• Net income increased 59%
• Loans grew 16%
• Deposits grew 27%

On August 13, 2003 the Company completed its initial public offering (IPO) of 6,900,000 shares of common stock. The Texas Capital IPO was the first completed by a company in Texas during 2003. The offering totaled $76 million with the Company and selling stockholders realizing $34.5 and $36.1 million respectively, in proceeds from the sale. The public offering was consistent with the Company's emphasis on creating value for stockholders.

During the third quarter, the Bank also successfully:

• Opened its first Houston office in the One Riverway complex with a team of local bankers led by veterans Joe Bailey and Jon Clarkson
• Created a mortgage origination division to generate additional fee income and satisfy private client needs
• Developed a sophisticated new asset allocation advisory relationship with DiMeo Schneider for the benefit of its wealth management clients
• Launched a co-branded 401(k) product with Principal Financial as part of the Bank's growing insurance line of business
• Acquired the deposits of Bluebonnet Savings Bank

"We are pleased with our third quarter performance - our first as a public company - and are also encouraged by an improving economic outlook," said Jody Grant, Chairman and CEO.

DETAILED FINANCIALS
Texas Capital Bancshares, Inc. reported net income of $3.3 million for the third quarter of 2003 compared to $2.1 million for the third quarter of 2002. On a fully diluted basis, earnings per share were $.14 for the three months ended September 30, 2003 compared to $.09 for the same period last year, representing an increase of 56 percent. Net income for the nine months ended September 30, 2003 was $10.2 million compared to $5.5 million for the same period in 2002. Earnings per share on a fully diluted basis for the nine months ended September 30, 2003 were $.45 versus $.24 for the same period in 2002, an increase of 88%.

Return on average equity was 9.05 percent and return on average assets was .64 percent for the third quarter of 2003 compared to 6.95 percent and .61 percent, respectively, for the third quarter of 2002. The increase in net income and continued improvement in returns on equity and assets in 2003 are attributed to growth in net interest income and improved efficiency. Capital adequacy was further enhanced with the IPO proceeds.

Net interest income was $13.4 million for the third quarter of 2003, compared to $10.9 million for the third quarter of 2002. The increase was due to an increase in average earning assets of $620.3 million as compared to the third quarter of 2002, which offset a 56 basis point decrease in net interest margin. The increase in average earning assets included a $270.3 million increase in average net loans and a $347.4 million increase in average securities. For the quarter ended September 30, 2003, average net loans and securities represented 66 percent and 34 percent, respectively, of average earning assets compared to 76 percent and 23 percent in the same quarter of 2002. The decrease in loan percentage reflects management's decision to tighten lending standards beginning in 2001 and continuing during 2002 pending clearer signs of improvement in the U.S. economy. While we continue to apply prudent lending standards, loan growth in the third quarter of 2003 in our core loan portfolio (excluding loans held for sale) totaled $35 million. Our securities percentage has increased as we have continued to use additional securities to increase our earnings and improve our return on equity by taking advantage of market spreads. Average interest-bearing liabilities increased $553.6 million from the third quarter of 2002, which included a $233.4 million increase in interest-bearing deposits and a $300.2 million increase in other borrowings. The increase in interest bearing deposits includes the purchase of deposit accounts from Bluebonnet Savings Bank, FSB in August 2003. The increase in average borrowings was primarily related to an increase in federal funds purchased and securities sold under repurchase agreements, and was used to supplement deposits in funding loan growth and securities purchases. The average cost of interest-bearing liabilities decreased from 2.63 percent for the quarter ended September 30, 2002 to 1.85 percent for the same period of 2003, reflecting the reduction in market interest rates and a $112.9 million increase in non-interest bearing deposits.

In management's opinion, overall portfolio quality remained at an acceptable level at this stage of the economic cycle and in comparison to regional peers. At September 30, 2003, our reserve for loan losses totaled $17.3 million, which is 1.41 percent of total loans, compared to $13.8 million or 1.31 percent at September 30, 2002. The company's ratio of reserve for loan losses to non-performing loans was 142.53 percent at September 30, 2003, compared to 169.66 percent at September 30, 2002. Texas Capital had net charge-offs of loans and leases of $473,000 (.15 percent of average loans) in the quarter versus net losses of $632,000 (.25 percent of average loans) in the third quarter of 2002. Net chargeoffs for the nine months ended September 30, 2003 were $587,000 (.07 percent of average loans) compared to $3.1 million (.45 percent of average loans) in the same period in 2002. The provision for possible loan losses reflects management's assessment of the risks in Texas Capital Bank's loan portfolio. The provision was $475,000 for the third quarter of 2003 compared to $2.4 million for the third quarter of 2002. Our non-performing loans and leases increased to $12.1 million or .99 percent of total loans from $8.2 million or .77 percent of total loans at September 30, 2003. Our non-performing assets include $1.1 million of loans past due for more than 90 days, which are fully guaranteed by the U.S. Government and still accruing interest, and $11.0 million of non-accrual loans.

Non-interest income increased $1.0 million, or 69 percent, during the third quarter of 2003 compared to the same quarter of 2002. The Company benefited from growth in fees related to cash management, wealth management, insurance, and mortgage warehousing.

Non-interest expense for the third quarter of 2003 increased $1.9 million or 22 percent, compared to the third quarter of 2002. The increase is primarily related to a $1.6 million increase in salaries and employee benefits to $5.8 million from $4.2 million. This increase resulted from an increase in the total number of employees from 214 at September 30, 2002 to 271 at September 30, 2003; the increase related primarily to staffing for the new Houston office and the start-up of the residential mortgage origination group.

During the third quarter, management modestly increased asset sensitivity, positioning the Company to benefit from an improving economy and rising interest rates. The interest sensitivity is largely due to the concentration of assets in variable rate loans.

About Texas Capital Bancshares

Texas Capital Bancshares, Inc. is a privately owned and operated bank holding company, the principal subsidiary of which is Texas Capital Bank, N.A., headquartered in Dallas, Texas. Texas Capital Bank targets middle market businesses, the executives of those businesses and affluent individuals. The Bank has full-service locations in Austin, Dallas, Fort Worth, Plano and San Antonio.

This release contains forward-looking statements, which are subject to risks and uncertainties. A number of factors, many of which are beyond Texas Capital Bancshares' control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include the risk of adverse impacts from general economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. These and other factors that could cause results to differ materially from those described in the forward-looking statements can be found in the registration statement on Form S-3 as amended relating to the initial public offering and other filings made by Texas Capital Bancshares with the Securities and Exchange Commission.

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