TEXAS CAPITAL BANCSHARES INC/TXTCBI

TEXAS CAPITAL BANCSHARES INC/TX Income Taxes Disclosure

10-KFiled Feb 10, 20263 min read
Income Taxes
Income tax expense/(benefit) consists of the following:
 Year ended December 31,
(in thousands)202520242023
Current:
Federal$75,535 $37,878 $69,350 
State11,044 7,761 5,888 
Total86,579 45,639 75,238 
Deferred:
Federal14,506 (14,960)(16,540)
State1,381 (1,126)(1,244)
Total15,887 (16,086)(17,784)
Total expense:
Federal90,041 22,918 52,810 
State12,425 6,635 4,644 
Total$102,466 $29,553 $57,454 
The reconciliation of income tax at the U.S. federal statutory tax rate to income tax expense and effective tax rate is as follows:
 Year ended December 31,
  202520242023
(dollars in thousands)AmountRateAmountRateAmountRate
U.S. statutory rate$90,869 21 %$22,483 21 %$51,785 21 %
State and local taxes, net of federal income tax effect(1)
9,607 2 %2,539 2 %2,938 1 %
Tax credits
Research & development(1,338)— %(1,815)(2)%(855)— %
Other(378)— %(18)— %— — %
Nontaxable or nondeductible items
Tax-exempt income(1,885)(1)%(1,471)(1)%(350)— %
Disallowed compensation4,212 1 %2,022 2 %1,176 — %
Disallowed FDIC2,311 1 %2,257 2 %1,863 1 %
Other(223)— %868 1 %742 — %
Uncertain tax positions recognized(709)— %2,688 3 %155 — %
Effective tax rate$102,466 24 %$29,553 28 %$57,454 23 %
(1)For the years presented, California, Illinois, New York and New York City make up the majority (greater than 50%) of the tax effect in this category.
Cash paid for income taxes consists of the following:
Year ended December 31,
(dollars in thousands)202520242023
Federal$57,000 81 %$45,000 85 %$67,000 93 %
State13,178 19 %7,815 15 %4,941 7 %
Total$70,178 100 %$52,815 100 %$71,941 100 %
At December 31, 2025, 2024 and 2023, the Company had unrecognized tax benefits of $3.4 million, $4.3 million and $1.0 million, respectively. If the income tax impacts from these tax positions are ultimately realized, such realization would not have a material impact on the income tax provision or effective tax rate.
The Company is no longer subject to U.S. federal income tax examinations for years before 2022 or state and local income tax examinations for years before 2021.
The table below summarizes significant components of deferred tax assets and liabilities utilizing the federal corporate income tax rate of 21% and state tax rate of 3% for 2025 and 2% for 2024. Management believes it is more likely than not that all of the deferred tax assets will be realized.
 December 31,
(in thousands)20252024
Deferred tax assets:
Allowance for credit losses$76,543 $73,394 
Lease liabilities53,144 50,852 
Loan origination fees, net
17,979 14,765 
Stock compensation6,942 6,518 
Non-accrual interest2,718 2,707 
Deferred compensation
5,442 5,336 
Net unrealized losses in AOCI19,292 53,404 
Other2,441 6,108 
Total deferred tax assets184,501 213,084 
Deferred tax liabilities:
Lease financing transactions
(17,125)(15,262)
Lease ROU assets(37,692)(37,527)
Depreciation(21,301)(1,513)
Other(60)(460)
Total deferred tax liabilities(76,178)(54,762)
Net deferred tax asset$108,323 $158,322 

Historical Timeline

Fiscal YearFiled
2025Feb 10, 2026Showing above
2024Feb 11, 2025
2023Feb 13, 2024
2022Feb 9, 2023
2021Feb 9, 2022
2020Feb 9, 2021
2019Feb 12, 2020
2018Feb 14, 2019
2017Feb 14, 2018
2016Feb 17, 2017
2015Feb 18, 2016

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

Other Available Disclosures

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