TEXAS CAPITAL BANCSHARES INC/TXTCBI
TEXAS CAPITAL BANCSHARES INC/TX Stock Compensation Disclosure
Stock-Based Compensation
The Company has a qualified retirement plan with a salary deferral feature designed to qualify under Section 401 of the Internal Revenue Code (the “401(k) Plan”). The 401(k) Plan permits employees to defer a portion of their compensation. Matching contributions may be made in amounts and at times determined by the Company. These contributions were approximately $12.9 million, $13.8 million and $15.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. Employees are eligible to participate in the 401(k) Plan when they meet certain requirements concerning minimum age and period of credited service. All contributions to the 401(k) Plan are invested in accordance with participant elections among certain investment options.
The Company also offers a non-qualified deferred compensation plan for executives and key members of management in order to assist in attracting and retaining these individuals. Participants in the plan may elect to defer up to 75% of their annual salary and/or short-term incentive payout into deferral accounts that mirror the gains or losses of investments selected by the participants. The plan allows the Company to make discretionary contributions on behalf of a participant as well as matching contributions. The Company did not make any matching contributions in 2025, 2024, or 2023. All participant contributions to the plan and any related earnings are immediately vested and may be withdrawn upon the participant's separation from service, death or disability or upon a date specified by the participant. Salary deferrals are recorded as salaries and employee benefits expense on the consolidated statements of income with an offsetting payable to participants in other liabilities on the consolidated balance sheets.
The Company has an Employee Stock Purchase Plan (“ESPP”). Employees are eligible for the ESPP when they meet certain requirements concerning period of credited service and minimum hours worked. Eligible employees may contribute between 1% and 10% of eligible compensation up to the Section 423 of the Internal Revenue Code limit of $25,000. In 2006, stockholders approved the ESPP, which allocated 400,000 shares for purchase. As of December 31, 2025, 2024 and 2023, 246,976, 231,505 and 210,558 shares, respectively, had been purchased on behalf of employees under the ESPP.
The Company has stock-based compensation plans under which equity-based compensation grants are made by the board of directors, or its designated committee. Grants are subject to vesting requirements and may be settled in shares of common stock or paid in cash. Under the plans, the Company may grant, among other things, non-qualified stock options, incentive stock options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights, performance awards or any combination thereof to employees and non-employee directors. The Company has historically issued new shares to satisfy share unit conversions. A total of 2,500,000 shares are authorized for grant under the current plan. Total shares remaining available for grant under the current plan at December 31, 2025 were 1,050,055.
A summary of the Company’s stock-settled RSU activity and related information is as follows. Grants of stock-settled RSUs include time-based vesting conditions that generally vest ratably over a period of three years. Also included are grants of stock-settled RSUs with both time-based and performance-based or market-based vesting conditions that generally vest at the end of a three-year period.
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||
| RSUs | Weighted Average Grant Date Fair Value | RSUs | Weighted Average Grant Date Fair Value | RSUs | Weighted Average Grant Date Fair Value | ||||||||||||||||||||||||||||||
| Outstanding at beginning of year | 854,651 | $ | 67.48 | 1,081,679 | $ | 66.91 | 1,155,652 | $ | 61.12 | ||||||||||||||||||||||||||
| Granted | 317,974 | 77.52 | 421,642 | 63.98 | 405,434 | 68.63 | |||||||||||||||||||||||||||||
| Vested | (355,708) | 71.18 | (528,208) | 63.56 | (355,046) | 50.79 | |||||||||||||||||||||||||||||
| Forfeited | (30,614) | 70.82 | (120,462) | 67.14 | (124,361) | 66.98 | |||||||||||||||||||||||||||||
| Outstanding at year-end | 786,303 | $ | 70.27 | 854,651 | $ | 67.48 | 1,081,679 | $ | 66.91 | ||||||||||||||||||||||||||
| Compensation expense | $ | 25,144,000 | $ | 20,212,000 | $ | 24,200,000 | |||||||||||||||||||||||||||||
| Unrecognized compensation expense | $ | 17,836,000 | $ | 24,014,000 | $ | 28,585,000 | |||||||||||||||||||||||||||||
| Weighted average years over which unrecognized compensation expense is expected to be recognized | 1.70 | 1.76 | 1.89 | ||||||||||||||||||||||||||||||||
| Fair value of shares vested during the year | $ | 25,319,000 | $ | 33,572,000 | $ | 18,117,000 | |||||||||||||||||||||||||||||
Intrinsic value of shares vested during the year | $ | 28,922,000 | $ | 32,049,000 | $ | 20,125,000 | |||||||||||||||||||||||||||||
The grant date fair value of stock-settled RSUs and performance-based awards that do not contain market-based conditions is equal to the market price of common stock on the grant date. The value of performance awards that include a market-based condition is estimated on the date of grant using a Monte Carlo simulation model with the following weighted average assumptions:
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
Risk-free interest rate | 4.20 | % | 4.41 | % | 4.14 | % | |||||||||||
Expected stock price volatility | 37.1 | % | 38.3 | % | 50.2 | % | |||||||||||
Simulation period | 2.92 years | 2.87 years | 2.89 years | ||||||||||||||
A summary of the Company’s cash-settled RSU activity and related information is as follows. Grants of cash-settled RSUs include time-based vesting conditions that generally vest ratably over a period of three years. Since these units have a cash payout feature, they are accounted for under the liability method with related expense based on the stock price at period end.
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
RSUs outstanding at beginning of year | 194,811 | — | — | ||||||||||||||
| Granted | 261,921 | 226,864 | — | ||||||||||||||
| Vested | (67,955) | (55) | — | ||||||||||||||
| Forfeited | (56,183) | (31,998) | — | ||||||||||||||
RSUs outstanding at year-end | 332,594 | 194,811 | — | ||||||||||||||
| Compensation expense | $ | 11,615,000 | $ | 4,481,000 | $ | — | |||||||||||
| Weighted average years over which unrecognized compensation expense is expected to be recognized | 1.88 | 2.19 | 0.00 | ||||||||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 10, 2026 | Showing above |
| 2022 | Feb 9, 2023 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.