SCHEDULE 14A

TEXAS CAPITAL BANCSHARES, INC.

Payment of Filing Fee (Check the appropriate box):

April 20, 2004

Dear TCBI Shareholder:

I am pleased to present your company’s first annual report as a publicly-traded company. I encourage you to review it and complete the enclosed card, if you wish to receive future information via email. Additionally, earnings releases, performance information and corporate governance may be found in the investor section of our website at www.TexasCapitalBank.com.

I would also like to invite you to attend the Annual Meeting of Shareholders of Texas Capital Bancshares, Inc., a Delaware corporation, and the holding company for Texas Capital Bank, National Association:

Tuesday, May 18, 2004
10:00 a.m.
2100 McKinney Avenue, 9th Floor
Dallas, Texas 75201
214.932.6600

The attached Notice of Annual Shareholders’ Meeting describes the formal business to be transacted at the Annual Meeting. Certain directors and officers will be present at the meeting and will be available to answer any questions you may have.

We encourage you to review carefully the accompanying materials and sign, date, and return the enclosed proxy card promptly. If you attend the Annual Meeting, you may vote in person, even if you have previously mailed a proxy.

On behalf of the board of directors and all the employees of Texas Capital Bancshares, Inc., and its operating entities, thank you for your continued support.

Sincerely,

Joseph M. Grant
Chairman and Chief Executive Officer

TEXAS CAPITAL BANCSHARES, INC.
2100 McKinney Avenue
9^th Floor
Dallas, Texas 75201

NOTICE OF ANNUAL STOCKHOLDERS’ MEETING
To be held May 18, 2004

     NOTICE IS HEREBY GIVEN that the annual stockholders’ meeting (the “Annual Meeting”) of Texas Capital Bancshares, Inc. (the “Company”), a Delaware corporation, and the holding company for Texas Capital Bank, National Association, will be on Tuesday, May 18, 2004, at 10:00 a.m. at the offices of the Company located at 2100 McKinney Avenue, 9th Floor, Dallas, Texas 75201.

A proxy statement and proxy card for this Annual Meeting are enclosed. The Annual Meeting is for the purpose of considering and voting upon the following matters:

Information about the matters to be acted upon at the Annual Meeting is set forth in the accompanying proxy statement.

Stockholders of record at the close of business on March 29, 2004 are the only stockholders entitled to notice of and to vote at the Annual Meeting.

All stockholders are cordially invited to attend the Annual Meeting in person. Whether you expect to attend the Annual Meeting or not, please vote, sign, date and return the enclosed proxy in the enclosed self-addressed envelope as promptly as possible. If you attend the Annual Meeting, you may vote your shares in person, even though you have previously signed and returned your proxy.

April 20, 2004
Dallas, Texas

PROXY STATEMENT

TEXAS CAPITAL BANCSHARES, INC.
2100 McKinney Avenue
9^th Floor
Dallas, Texas 75201

PROXY STATEMENT
FOR THE ANNUAL STOCKHOLDERS’ MEETING
ON MAY 18, 2004

MEETING INFORMATION

     This proxy statement is being furnished to Texas Capital Bancshares, Inc. (the “Company”) stockholders on April 20, 2004, in connection with the solicitation of proxies by the board of directors to be voted at the annual stockholders’ meeting (the “Annual Meeting”). The Annual Meeting will be on May 18, 2004, at 10:00 a.m. at the offices of the Company located at 2100 McKinney, 9th Floor, Dallas, Texas 75201. The Company is the parent corporation of Texas Capital Bank, National Association (the “Bank”).

The purpose of the Annual Meeting is to consider and vote upon:

RECORD DATE AND VOTING SECURITIES

You are entitled to one vote for each share of voting common stock you own. However, you will not be entitled to vote any shares of Series A-1 Non-voting Common Stock you own.

Your proxy will be voted in accordance with the directions you specify in the proxy. If you do not provide directions in the proxy but sign the proxy and return it, your proxy will be voted (a) FOR each of the nominees for director named in the proxy statement and (b) in the discretion of the proxy holders, for any other proposals that properly come before the Annual Meeting.

Only those stockholders that owned shares of our voting common stock on March 29, 2004, the record date established by the board of directors, will be entitled to vote at the Annual Meeting. At the close of business on the record date, there were 24,858,283 shares of voting common stock outstanding held by 656 identified holders.

QUORUM AND VOTING

In order to have a quorum to transact business at the Annual Meeting, at least a majority of the total number of issued and outstanding shares of common stock must be present at the Annual Meeting, in person or by proxy. If there are not sufficient votes for a quorum or to approve any proposal at the time of the Annual Meeting, the board of directors may postpone or adjourn the Annual Meeting in order to permit the further solicitation of proxies. Abstentions and broker non-votes will be counted toward a quorum but will not be counted in the votes for each of the proposals presented at the Annual Meeting.

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SOLICITATION AND VOTING OF PROXIES

It is important that you are represented by proxy or are present in person at the Annual Meeting. We request that you vote by completing the enclosed proxy card and returning it signed and dated in the enclosed postage paid envelope. Your proxy will be voted in accordance with the directions you provide. If you sign, date and return your proxy but do not provide any instructions, your proxy will be voted FOR each of the nominees as directors.

Other than the election of fifteen (15) directors, we are not aware of any additional matters that will be presented for consideration at the Annual Meeting. However, if any additional matters are properly brought before the Annual Meeting, your proxy will be voted in the discretion of the proxy holder.

You may revoke your proxy at any time prior to its exercise by:

A plurality of the votes cast in person or by proxy by the holders of voting common stock is required to elect a director. The 15 nominees receiving the highest number of votes cast by the holders of voting common stock will be elected as directors. There will be no cumulative voting in the election of directors.

Abstentions and broker non-votes will have no effect on the outcome of the election of directors, assuming a quorum is present or represented by proxy at the Annual Meeting. With respect to all other matters, abstentions will have the same legal effect as a vote against such matters, and broker non-votes will have no effect on such matters. A broker non-vote occurs if a broker or other nominee holder of shares does not have discretionary authority and has not received voting instructions with respect to a particular matter.

Our board of directors is making this solicitation and the Company will pay the costs of this proxy solicitation. The directors, officers and regular employees of the Company and the Bank may also solicit proxies by telephone or in person but will not be paid additional compensation to do so.

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PROPOSALS FOR STOCKHOLDER ACTION

Election of Directors

We currently have fifteen (15) directors on the board of directors. Directors serve a one-year term or until their successors are elected and qualified. All of the nominees below currently serve as a director and have indicated their willingness to continue to serve as a director if elected. However, if any of the nominees is unable or declines to serve for any reason, your proxy will be voted for the election of a substitute nominee selected by the proxy holders.

Nominees

At the Annual Meeting, the stockholders will elect fifteen (15) directors. The board of directors recommends a vote FOR each of the nominees set forth below:

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Joseph M. (Jody) Grant has been our Chairman of the Board and Chief Executive Officer since we commenced operations in 1998. In addition, he currently serves as the Chairman of the Board of our Bank. Prior to co-founding our company, Mr. Grant served as Executive Vice President, Chief Financial Officer and a member of the board of directors of Electronic Data Systems Corporation from 1990 to March 1998. From 1986 to 1989, Mr. Grant had served as the Chairman and Chief Executive Officer of Texas American Bancshares, Inc.

George F. Jones, Jr. has served as the Chief Executive Officer and President of our Bank since its inception in December 1998. Mr. Jones was also a founder of Resource Bank, our predecessor bank. From 1993 until 1995, Mr. Jones served as an Executive Vice President of Comerica Bank, which acquired NorthPark National Bank in 1993. From 1986 until Comerica’s acquisition of NorthPark in 1993, Mr. Jones served as either NorthPark’s President or President and Chief Executive Officer.

Peter B. Bartholow has served as our Chief Financial Officer since October 6, 2003. Mr. Bartholow had served as a Managing Partner with Hat Creek Partners, a Dallas, Texas private equity firm from January 1999 to October 2003. Prior to joining Hat Creek Partners, he was Vice President of Corporate Finance of EDS and also served on A.T. Kearney’s board of directors during that time.

Leo Corrigan III has been a director since September 2001. He has served as President of Corrigan Securities, Inc., a real estate investment company since 1972.

James R. Erwin has served as Managing Director and Partner of Erwin, Graves & Associates, LP since June 2001. In May 2000, he retired as Vice Chairman, Texas of Bank of America, a position he had held since 1997. In this position, Mr. Erwin was responsible for corporate banking, corporate finance, and investment banking in the western half of the U.S. Prior to serving as Vice Chairman, Texas, he held several executive positions with Bank of America and its predecessors. Mr. Erwin also serves on the board of directors of Carreker Corporation and Trammell Crow Company. He has been a director since May 2001.

Frederick B. Hegi, Jr. has been a director since June 1999. He has been a partner of Wingate Partners, an investment company, since he co-founded it in 1987. Mr. Hegi currently serves as Chairman of the board of directors of United Stationers, Inc. and as a director of Drew Industries Incorporated and Lone Star Technologies, Inc.

James R. Holland, Jr. has been a director since June 1999. He has served as the President and Chief Executive Officer of Unity Hunt, Inc., a diversified holding company, since 1991. He has also served as Chief Executive Officer of Hunt Capital Group, LLC, an investment management company, since 1993. Mr. Holland currently serves on the board of directors of Cinemark, Inc. and International Surface Preparation Corporation.

Larry A. Makel has been our Corporate Secretary since our formation in 1998 and a director since September 2001. He is a partner and member of the Executive Committee of Patton Boggs LLP, a national law firm, a position he has held since June 1997.

Walter W. (Bo) McAllister III has been a director since June 1999. He served as Chairman of the Texas Insurance Agency Group of Companies, a group of affiliated property and casualty insurance agencies, from 1992 until his retirement in March 2002.

Lee Roy Mitchell has served as a director since June 1999. He has served as Chairman of the board of directors and Chief Executive Officer of Cinemark USA, Inc., a movie theater operations company, since 1985.

Steve Rosenberg has served as a director since September 2001. He has also served as President and Chief Executive Officer of Fuel Partners, LP, a gasoline marketing service company since 1999.

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John C. Snyder has served as a director since June 1999. He has also served as Chairman of Snyder Operating Company LLC, an investment company, since June 2000. From 1977 to 1999, Mr. Snyder served as Chairman of the board of directors and Chief Executive Officer of Snyder Oil Corporation, an energy exploration and production company. In 1999, Snyder Oil Corporation was acquired by Santa Fe Snyder Corporation, an energy exploration and production company, where Mr. Snyder served as Chairman of the board of directors through June 2000. He also currently serves as a director of SOCO International plc, a UK oil and gas exploration company.

Robert W. Stallings has served as a director since August 2001. He has also served as Chairman of the board of directors and Chief Executive Officer of Stallings Capital Group, an investment company, since March 2001. From 1991 to 2001, Mr. Stallings served as Chief Executive Officer of Pilgrim Capital Group, an investment company. He also currently serves as a director of Gainsco, Inc. and Crescent Real Estate Equities Co.

James Cleo Thompson, Jr. has been a director since September 2001. He has served as Chairman of the board of directors and President of Thompson Petroleum Corporation, an energy exploration and production company since 1978.

Ian J. Turpin has been a director since May 2001. Since 1992, he has served as President and director of The LBJ Holding Company and various companies affiliated with the family of the late President of the United States, Lyndon B. Johnson, which are involved in radio, real estate, private equity investments and managing diversified investment portfolios.

Required Vote, Recommendation

To elect a nominee, a plurality of the holders of the votes represented by shares of common stock present or represented at the Annual Meeting must be voted FOR that nominee with respect to each director position.

The board of directors recommends a vote FOR the election of each of the nominees.

Other Matters

We do not currently know of any other matters that may come before the Annual Meeting. However, if any other matters are properly presented at the Annual Meeting, the proxy holders will vote your proxy in their discretion on such matters.

BOARD AND COMMITTEE MATTERS

Board of Directors

The business affairs of the Company are managed under the direction of the board of directors. The board of directors meets on a regularly scheduled basis during the fiscal year of the Company to review significant developments affecting the Company and to act on matters requiring approval by the board of directors. It also holds special meetings as required from time to time when important matters arise requiring action between scheduled meetings. The board of directors met ten times during the 2003 fiscal year. With the exception of Fred B. Hegi, Jr., Lee Roy Mitchell, James C. Thompson, Jr. and Ian J. Turpin, each director participated in at least 75% or more of the total number of meetings of the board of directors.

Director Independence

The board of directors has determined, most recently at its meeting on March 16, 2004, that each director other than Joseph M. Grant, George F. Jones, Jr., Peter B. Bartholow and Larry A. Makel qualifies as an

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“Independent Director” as defined in Rule 4200(a)(15) of the NASDAQ Stock Market listing standards and as further defined by recent statutory and rule changes.

Committees of the Board of Directors and Meeting Attendance

The board of directors had three standing committees during 2003.

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Directors’ Compensation

Directors do not receive any cash fees for attending meetings. During 2001, each director was awarded options to purchase 4,000 shares of the Company’s common stock. Upon each re-election to the board of directors after 2001, directors were awarded options to purchase 4,000 shares of the Company’s common stock. The options are exercisable at the market price on the date of grant. Directors are reimbursed for their travel and reasonable out-of-pocket expenses incurred by them in performing their duties.

Communications With the Board

Stockholders may communicate with the board of directors, including the non-management directors, by sending an e-mail to bod@texascapitalbank.com or by sending a letter to the board of directors, c/o Corporate Secretary, 2100 McKinney Avenue, 9^th Floor, Dallas, Texas 75201. The Corporate Secretary has the authority to disregard any inappropriate communications or to take other appropriate actions with respect to any such inappropriate communications. If deemed an appropriate communication, the Corporate Secretary will submit your correspondence to the Chairman of the board or to any specific director to whom the correspondence is directed.

Report of the Audit Committee

The Audit Committee’s general role as an audit committee is to assist the board of directors in overseeing the Company’s financial reporting process and related matters. The board of directors has adopted a written Amended and Restated Charter of the Audit Committee dated March 16, 2004, a copy of which is included as Exhibit A hereto. Each member of the Audit Committee is “Independent” as defined in Rule 4200(a)(15) of the listing standards of the NASDAQ Stock Market, Inc.

The Audit Committee has reviewed and discussed with the Company’s management and the Company’s independent auditors, the audited financial statements of the Company contained in the Company’s Annual Report to Stockholders for the year ended December 31, 2003.

The Audit Committee has also discussed with the Company’s independent auditors the matters required to be discussed pursuant to SAS 61 (Communication with Audit Committees). The Audit Committee has received and reviewed the written disclosures and the letter from Ernst & Young LLP required by Independence Standards Standard No. 1 (titled, “Independence Discussions with Audit Committees”), and has discussed with Ernst & Young LLP such independent auditors’ independence. The Audit Committee has also considered whether the provision of non-audit services to the Company by Ernst & Young LLP is compatible with maintaining their independence.

Based on the review and discussion referred to above, the Audit Committee recommended to the board of directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003, filed with the Securities and Exchange Commission.

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This report is submitted on behalf of the Audit Committee.

Code of Ethics

The Company has adopted a code of ethics that applies to all its employees, including its chief executive officer, chief financial officer and controller. The Company has made the code of ethics available on its website at http://www.texascapitalbank.com.

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COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of March 31, 2004 concerning the beneficial ownership of the Company’s voting common stock: (a) each director, director nominee and executive officer, (b) each person we know to beneficially own more than 5% of the issued and outstanding shares of a class of common stock, and (c) all of our executive officers and directors as a group. The persons named in the table have sole voting and investment power with respect to all shares they owned, unless otherwise noted.

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             In addition to the voting common stock, we have also issued a class of nonvoting common stock titled “Series A-1 Non-voting Common Stock”. As of March 29, 2004, there were 286,934 shares of Series A-1 Non-voting Common Stock issued and outstanding, all of which were held by Goff Moore Strategic Partners, L.P.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table shows, for the years ending December 31, 2003, 2002 and 2001, the cash compensation paid and other compensation paid or accrued to the Chief Executive Officer and each of the Company’s four other most highly compensated executive officers and the Company’s former President, who resigned in April 2003 (the “Named Executives”).

Fiscal Year-End Option/SAR Values

The Named Executives did not exercise any of their options during 2003. The following table sets forth the number and value of options that the Named Executives owned as of March 31, 2004:

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Non-director Management Biography

Set forth below is the biography of our executive officer who is not a member of our board of directors, and his age and positions as of the date of this Proxy Statement.

C. Keith Cargill (51) has served as an Executive Vice President and Chief Lending Officer of our Bank since its inception in December 1998. Mr. Cargill has more than 20 years of banking experience. He began his banking career at Texas American Bank in 1977, where he was the manager of the national corporate lending division of the flagship bank in Fort Worth. In 1985, Mr. Cargill became President and Chief Executive Officer of Texas American Bank/Riverside, Ft. Worth. In 1989, Mr. Cargill joined NorthPark National Bank as an Executive Vice President and Chief Lending Officer. When NorthPark was acquired by Comerica Bank in 1993, Mr. Cargill joined Comerica as Senior Vice President and middle market banking manager.

Human Resources Committee Report on Executive Compensation

During 2003, the Human Resources Committee of the board of directors consisted of the four directors whose names appear below. Each member of the Human Resources Committee is an “Independent director” as defined in Rule 4200(a)(15) of the NASDAQ Stock Market, Inc. listing standards and as further defined by recent statutory and rule changes. This report describes the elements of the Company’s executive officer compensation programs and the basis on which 2003 compensation determinations were made by the Human Resources Committee with respect to the executive officers of the Company, including the Named Executives.

The Human Resources Committee has the following goals for compensation programs impacting the executive officers of the Company and the Bank:

The executive compensation package available to executive officers is composed of (a) base salary, (b) annual bonus awards, and (c) long-term incentive compensation, including options and stock awards. In order to more effectively retain our senior executive officers, we determined it was in the best interest of the Company to enter into employment agreements with these officers. In October 2002, we entered into Employment Agreements with Joseph M. Grant, George F. Jones, Jr. and C. Keith Cargill and in October 2003 we entered into an Employment Agreement with Peter B. Bartholow. All are members of our executive management team. The Employment Agreements have a term of two years, subject to renewal, and have a compensation package that includes a base salary, bonus and a grant of restricted stock under our 1999 Omnibus Stock Plan. Also, as part of the compensation paid, each executive will be

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eligible to participate in the employee benefit programs and receive other perquisites generally available to our other employees holding positions similar to that of the executives.

The Human Resources Committee regularly reviews the Company’s compensation programs to ensure that remuneration levels and incentive opportunities are competitive and reflect performance. Factors taken into account in assessing the compensation of individual officers include the officer’s performance and contribution to the Company, experience, strategic impact, external equity or market value, internal equity or fairness, and retention priority. The various components of the compensation programs for executive officers are discussed below.

Base Salary. In determining salary levels, the Human Resources Committee considers the entire compensation package for executive officers, including the equity compensation provided under stock plans. We intend for the salary levels to be consistent with competitive practices of comparable institutions and each executive’s level of responsibility. The Human Resources Committee determines the level of any salary increase to take effect at the beginning of each fiscal year after reviewing (a) the qualifications, experience and performance of the executive officers, (b) the compensation paid to persons having similar duties and responsibilities in other institutions, and (c) the size of the bank and the complexity of its operations. The Human Resources Committee consulted a survey of compensation paid to executive officers performing similar duties for depository institutions and their holding companies, with particular focus on the level of compensation paid by comparable institutions. The Human Resources Committee reviews, and if deemed appropriate, adjusts the base salaries of the Company’s executive officers on a yearly basis.

Annual Bonus Awards. In determining bonus awards, the Human Resources Committee considers the entire compensation package of the executive officers. The bonus awards are intended to be consistent with each executive officer’s level of responsibility and with the competitive practices of comparable financial institutions. The Human Resources Committee met during the year to determine bonus compensation paid to our executive officers during 2003 for 2002 performance. The overall bonus pool is determined based on the Company’s profitability and achievement of planned profitability. In 2003, Mr. Grant received a bonus of $55,000, Mr. Jones received a bonus of $50,000, Mr. Cargill received a bonus of $37,250 and Mr. Hultgren received a bonus of $30,000 for their performances in 2002.

Long-term Incentive Compensation. We maintain the Texas Capital Bancshares, Inc. 1999 Omnibus Stock Plan under which employees may receive discretionary grants and awards as determined and awarded solely in the discretion of the Human Resources Committee and approved by the full board. The Human Resources Committee believes that stock ownership is a significant incentive in aligning the interests of employees and stockholders and building stockholder value. In September 2002, the Company granted restricted stock awards to the following officers: 90,000 shares to Joseph M. Grant, 80,000 shares to George Jones and 50,000 shares to C. Keith Cargill. In October 2003, the Company granted a restricted stock award to Peter B. Bartholow of 53,750 shares. Thirty percent of the shares of restricted stock have vested as of March 31, 2004. However, as a result of certain deferral agreements, delivery of some shares has been deferred beyond the vesting date. Pursuant to Mr. Grant’s deferral agreement, he will receive 27,000 shares on August 2, 2008. Pursuant to Mr. Bartholow’s deferral agreement, he will receive 15,000 shares on April 15, 2004. Mr. Jones received 12,000 shares in December 2003 and will receive 12,000 shares in April 2004. Mr. Cargill received 7,500 shares in December 2003 and will receive 7,500 shares in April 2004. In accordance with APB 25, compensation expense is recognized for the performance-based awards of restricted stock granted under the 1999 Omnibus Stock Plan. The Company recognized approximately $430,000 of compensation expense in connection with such awards in 2003.

Compensation of the Chief Executive Officer. After taking into consideration the factors discussed above, the Human Resources Committee entered into an Employment Agreement with Mr. Grant in October of 2002 which set his base salary at $275,000. Mr. Grant’s base salary remained $275,000 until November 1, 2003, when his base salary increased to $300,000. Mr. Grant’s salary was increased on November 1, 2003 due to the Company’s performance in 2003 and the Company’s successful initial public offering of its common stock in August 2003. His base salary is considered to be reasonable and

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competitive based on published compensation surveys and other publicly available compensation information. The Company also granted Mr. Grant 90,000 shares of restricted stock in September 2002. Thirty percent of the shares of restricted stock have vested. Pursuant to a deferral agreement, 27,000 of the shares granted to Mr. Grant will be delivered on August 2, 2008.

The Human Resources Committee does not currently intend to award compensation that would result in a limitation on the deductibility of a portion of such compensation pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended, other than awards that may be made under the 1999 Omnibus Stock Plan; however, the Human Resources Committee may in the future decide to authorize other compensation in excess of the limits of Section 162(m) if it determines that such compensation is in the best interest of the Company.

This report is submitted on April 1, 2004 by the members of the Human Resources Committee:

Human Resources Committee Interlocks and Insider Participation

None of the executive officers of the Company or the Bank serves on the Human Resources Committee of the board of directors of the Company or any Human Resources Committee of any other company.

Indebtedness of Management and Transactions With Certain Related Persons

In the ordinary course of business, the Bank has made loans, and may continue to make loans in the future, to the Bank’s and the Company’s officers, directors and employees. The Bank makes all loans to executive officers and directors in the ordinary course of business, on substantially the same terms as those with other customers.

James R. Erwin, a member of our board of directors, is a partner of the consulting firm Erwin, Graves & Associates, LP. We engaged Erwin, Graves & Associates, LP to provide consulting services to us in connection with our stock offering, for which Erwin, Graves & Associates, LP received a consulting fee equal to $85,000 ($30,000 of which was paid in 2002), plus reimbursement of out-of-pocket expenses.

In June 2003, we committed to invest up to $500,000 in Blue Sage Investments, LP, a limited partnership approved as a Small Business Investment Company by the U.S. Small Business Administration. Blue Sage Investments may be considered to be an affiliate of Ian J. Turpin, a member of our board of directors.

In June 2003, we relocated our Austin office to a building owned by a company that may be considered to be an affiliate of Ian J. Turpin, a member of our board of directors. The lease expense is approximately $155,000 annually.

Larry A. Makel, a member of our board of directors and our Corporate Secretary, is a partner in the law firm Patton Boggs LLP. We retain Patton Boggs LLP on a regular basis to perform legal services.

We have entered into indemnification agreements with each of our directors and officers, which may be broader than the specific indemnification provisions contained in our certificate of incorporation, bylaws or under Delaware law. These indemnification agreements may require us, among other things, to indemnify our officers and directors against liabilities that may arise by reason of their status or service as directors or officers. These indemnification agreements also may require us to advance any expenses incurred by our directors or officers as a result of any proceeding against them as to which they could be indemnified. As of the date of this filing, there is no pending litigation or proceeding involving any of our directors,

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officers, employees or agents in which indemnification by us is sought, nor are we aware of any threatened litigation or proceeding that may result in a claim for indemnification. We have purchased a policy of directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment in certain circumstances.

Stock Performance Graph

The following table and graph sets forth the cumulative total stockholder return for the Company’s common stock beginning on August 12, 2003, the date of the Company’s initial public offering compared to an overall stock market index (NASDAQ Bank Index) and the Company’s peer group index (Russell 2000 Index). The Russell 2000 Index represents a universe of U.S. publicly owned small capitalization companies that represent the Company’s industry specific peer group. The Russell 2000 Index and NASDAQ Bank Index are based on total returns assuming reinvestment of dividends.

The stock performance graph assumes $100.00 was invested on August 12, 2003.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities and Exchange Act of 1934 requires our officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file initial reports of ownership and reports of changes in ownership with the SEC. During 2003, all Section 16(a) reports were filed timely.

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AUDITOR FEES AND SERVICES

A representative of Ernst & Young LLP is expected to be present at the Annual Meeting and will be available to respond to appropriate questions.

Fees for professional services provided by our independent auditors in each of the last two fiscal years, in each of the following categories (in thousands) are:

Fees for audit services include fees associated with the audit of our annual consolidated financial statements, the reviews of the consolidated financial statements included in our Forms 10-Q and the review of our Form S-3 filed during 2002 and amended during 2003, accounting consultations and management’s assertions regarding effective internal controls in compliance with the requirements of the FDICIA. Audit-related fees included but are not limited to procedures required by the FHLB in 2003 and internal audit services in 2002. Tax fees included various federal, state and local tax services.

Pre-approval Policies and Procedures

The Audit Committee has adopted a policy that requires advance approval of all audit, audit-related and tax services performed by the independent auditor. The policy provides for pre-approval by the Audit Committee of specifically defined audit and non-audit services. Unless the specific service has been previously pre-approved with respect to that year, the Audit Committee must approve the permitted service before the independent auditor is engaged to perform it. The Audit Committee has delegated to the Chairman of the Audit Committee authority to approve permitted services provided that the Chairman reports any decisions to the Committee at its next scheduled meeting.

ADDITIONAL INFORMATION

Stockholder Nominees for Director for the 2005 Annual Meeting

You may submit nominees for our board of directors in accordance with Article II, Section 9 of our bylaws. If you would like to submit a nomination for director to be considered at the 2005 Annual Meeting, you must deliver notice of any director nominations to us no later than 180 days nor more than 270 days prior to the Annual Meeting. Director nominations should be directed to:

Texas Capital Bancshares, Inc.
2100 McKinney Avenue, 9^th Floor
Dallas, Texas 75201
Attn: Secretary

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Stockholder Proposals for the 2005 Annual Meeting

In accordance with Article II, Section 10 of our bylaws, stockholder proposals for the 2005 Annual Stockholders’ Meeting must be received by no later than 180 days nor more than 270 days prior to the meeting to be considered for inclusion in the proxy statement and proxy for the 2005 Annual Meeting. Proposals should be directed to:

Texas Capital Bancshares, Inc.
2100 McKinney Avenue, 9^th Floor
Dallas, Texas 75201
Attn: Secretary

Annual Report

Our Annual Report on Form 10-K accompanies this proxy statement.

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EXHIBIT A

TEXAS CAPITAL BANCSHARES, INC.

AMENDED AND RESTATED CHARTER
OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS

as of March 16, 2004

Purpose

The board of directors is charged with establishing and monitoring adherence to policies and procedures required by regulatory statutes and principles of safety and soundness. Consistent with this function, the board of directors hereby establishes an Audit Committee (the “Committee”). The Committee also functions as the Audit Committee of the board of directors of the Company’s subsidiary, Texas Capital Bank, National Association (the “Bank”). References to the Company herein also include the Bank and all other direct and indirect subsidiaries of the Company. The purpose of the Committee is to oversee the processes of accounting and financial reporting of the Company, the audits and financial statements of the Company and the performance, independence and qualifications of the independent auditor and internal auditors of the Company. The Committee shall assist the board of directors in monitoring:

Membership

The Committee shall be comprised of:

The board of directors may, at any time, and in its complete discretion, replace any member of the Committee.

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Authority

The board of directors authorizes the Committee within the scope of its responsibilities to:

Meetings

The Committee shall meet four times per year or more frequently as circumstances require; provided, that the Committee must meet at least twice per year in executive session, and that the Committee will periodically hold private meetings with management, the internal auditor and the independent auditor. The Committee may ask members of management or others to attend meetings and provide pertinent information as necessary. The proceedings of all meetings will be documented in minutes, which will be approved by the Committee and presented at meetings of the board of directors.

Responsibilities

The Committee shall, in the course of its operation:

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The Committee has the powers and responsibilities delineated in this Charter. It is not, however, the Committee’s responsibility to prepare and certify the Company’s financial statements, to guaranty the independent auditor’s report, or to guaranty other disclosures by the Company. These are the fundamental responsibilities of management and the independent auditor. Committee members are not full-time Company employees and are not performing the functions of auditors or accountants.

Internal Audit Manager

The Company shall retain a full-time Internal Audit Manager whose primary duty shall be to plan and manage the internal audits of the Company’s operations. The Internal Audit Manager shall review the status and results of internal audits and assess the effectiveness of service providers performing the internal audits. The Internal Audit Manager shall have the responsibility to report directly to the Committee the status of planned and ongoing internal audits and the results of completed audits, as well as the Internal Audit Manager’s assessment of the results of internal audits and the service professionals providing the internal audit services. The Job Description of the Internal Audit Manager, which sets forth the duties of the Internal Audit Manager, is attached hereto as Exhibit A.

The management of the Company may recommend the employment, dismissal or change of duties of the Internal Audit Manager; however, the Committee must provide prior approval of any such employment, dismissal or change of duties.

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ATTACHMENT TO AMENDED AND RESTATED CHARTER OF THE AUDIT
COMMITTEE OF THE BOARD OF DIRECTORS OMITTED

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EXHIBIT B

TEXAS CAPITAL BANCSHARES, INC.
CHARTER OF THE NOMINATING COMMITTEE
OF THE BOARD OF DIRECTORS

The following shall constitute the Nominating Committee Charter (the “Charter”) of the board of directors of Texas Capital Bancshares, Inc. (“the Corporation”):

Organization

There shall be constituted a standing committee of the board of directors of the Corporation (the “Board”) to be known as the nominating committee (the “Nominating Committee”).

Composition and Selection

The Nominating Committee shall be comprised of the members of the Executive Committee of the Board that meet the requirements of an “Independent Director” under the rules of the NASDAQ Stock Market, Inc. The Chairman of the Executive Committee, if such Chairman qualifies as an Independent Director, shall be the Chairman of the Nominating Committee. If the Chairman of the Executive Committee does not qualify as an Independent Director, then the members of the Nominating Committee shall elect the Chairman of the Nominating Committee by majority vote. The duties and responsibilities of Nominating Committee members contained herein shall be in addition to those duties otherwise required for members of the Board.

Statement of Purpose

The Nominating Committee is appointed by the Board (a) to assist the Board by identifying individuals qualified to become Board members and to recommend to the Board the director nominees for the next Annual Meeting of stockholders; and (b) to recommend to the Board director nominees for each committee.

Committee Objectives

The Nominating Committee’s objectives shall include serving as an independent and objective party to identify and nominate qualified candidates for director and Board committee placement, and nominating members for each of the Board’s committees.

Committee Authority and Responsibilities

The Nominating Committee shall:

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The Nominating Committee shall have the sole authority to retain and terminate any search firm to be used to identify director candidates and shall have sole authority to approve the search firm’s fees and other retention terms. The Nominating Committee also shall have authority to obtain advice and assistance from internal or external legal, accounting or other advisors.

The Nominating Committee may form and delegate authority to subcommittees when appropriate.

Meetings

The Nominating Committee shall meet as often as may be deemed necessary or appropriate in its judgment and that of the Board. The Chairman or a majority of the members of the Nominating Committee may call meetings of the Committee upon reasonable notice to all members of the Committee. Following each meeting, the Nominating Committee shall report to the Board at the next regularly scheduled Board meeting, or sooner, as circumstances may dictate.

Consistency with Articles of Incorporation

To the extent that any provision or section of this Charter may be inconsistent with any article, provision or section of the Articles of Incorporation or the Bylaws of the Corporation, the Articles of Incorporation or the Bylaws, as appropriate, shall fully control.

Amendments

This Charter may be amended or altered at any meeting of the Board of directors by affirmative vote of the Board.

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REVOCABLE PROXY

The undersigned hereby appoints Joseph M. Grant and Peter B. Bartholow, each with full power of substitution, to act as proxies for the undersigned, and to vote all shares of preferred stock and common stock of Texas Capital Bancshares, Inc. that the undersigned is entitled to vote at the Annual Meeting of Stockholders, on Tuesday May 18, 2004 at 10:00 AM at the offices of Texas Capital Bank, National Association at 2100 McKinney Avenue, 9th Floor, Dallas, Texas 75201, and at any and all adjournments thereof, as set forth below.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES FOR DIRECTOR
x Please mark your votes as indicated

Election as Directors of all Nominees (except as marked by striking through the Nominee’s name below):

Please complete, date, sign, and promptly mail this proxy in the enclosed postage-paid envelope. Please sign exactly as your name appears on the label on the reverse side of this card. When signing as attorney, executor, administrator, trustee, or guardian, please give your full title. If shares are held jointly, each holder may sign but only one signature is required.