Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q3 2022 Earnings Presentation
17 slides from Texas Capital Bancshares's earnings presentation, Oct 19, 2022
Slide 1: Q3-2022 Earnings
Q3-2022 Earnings October 19, 2022 © 2022 Texas Capital Bank Member FDIC
Slide 2: Forward-Looking Statements
Forward-Looking Statements This communication contains “forward-looking statements” within the meaning of and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, TCBI’s financial condition, results of operations, business plans and future performance. Thes
Slide 3: Our Distinct Opportunity
Our Distinct Opportunity Serving strong core Texas markets with expanded coverage and a complete set of capabilities Improving client relevance and diversifying our revenue base Attracting high-quality talent with significant experience Operating from a de-risked position of financial strength 3
Slide 4: Strategic Performance Drivers Announced September 1st
Strategic Performance Drivers Announced September 1st Where We Where We Where We Where We Started Are Going Started Are Going Income Statement 2020 2021 YTD 2022 2025 Balance Sheet 2020 2021 YTD 2022 2025 Investment Banking and Trading FY Average Liquidity Assets4 2.5% 2.8% 3.3% ~10% 28% 37% 27% >20
Slide 5: Our Path Forward
Our Path Forward Operating Model Aligned to our Clear Strategic Direction and Committed to Financial Resilience Vision, Grounded in our Values Fortitude to Deliver Organized Around Client Delivery Expanding Coverage Risk Management Product & Industry Specialization Business Banking Granular Ri
Slide 6: Expanding Coverage and Enhanced Product and Services
Expanding Coverage and Enhanced Product and Services Poised for improved contribution with average frontline Business tenure of less than 6 months Banking Targeted investments in providing financial services to Financial Performance (Period End) Q3’ 21 Q4’ 21 Q1’ 22 Q2’ 22 Q3’ 22 YoY Texas commu
Slide 7: Focused on the Future
Focused on the Future Current Investment // Re-aligning the Revenue Growth // Growing top- Building Tangible Book Value // expense base to directly support the line revenue as a result of expanded Reinvesting organically generated Financial business and investing aggressively banking capabilities fo
Slide 8: Financial Performance
Financial Performance Net income to common of $37.1 million, $0.74 per diluted share, or Financial Highlights ($M) Q3 2021 Q2 2022 Q3 2022 $0.98 per diluted share excluding divestiture transaction expenses Net Interest Income $190.5 $205.5 $239.1 Deliberate balance sheet positioning coupled with
Slide 9: Loan Portfolio
Loan Portfolio Period End Loan Trends (excl. PPP) Utilization Rates10 $3.1B $3.1B 61% 51% $2.7B $2.9B 59% $2.7B LTM Average 57% 55% $10.0B 52% $9.4B 53% $7.8B $8.1B $7.2B 51% $5.2B $4.8B $4.9B $5.1B $5.0B 49% 47% Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 C&I Loa
Slide 10: Deposits and Fundings
Deposits and Fundings Average Deposit Trends Funding base continuing multi-year transition Q3 2022 EOP $33.5B to target state composition $32.0B $30.1B $30.6B NIB balances of 47% $28.1B $25.0B $25.6B $24.5B Mortgage Finance deposit volumes remain $14.4B $15.1B pressured in current market envir
Slide 11: Net Interest Income Sensitivity
Net Interest Income Sensitivity TCBI NII Sensitivity Standard Model Assumptions The asset sensitivity profile of the bank 100bp & 200bp Parallel Shocks $163M $105M decreased QoQ primarily driven by $2.25 $135M $91M billion in swaps executed during the quarter Loan Balances: Static $77M which red
Slide 12: Q3-2022 Earnings Overview
Q3-2022 Earnings Overview Net Interest Income Net Interest Margin 3.05% $15.5M 2.68% $58.3M -$1.9M 2.23% 2.22% -$39.8M 2.11% 2.12% $7.9M -$6.4M 2.04% 2.02% $239.1M $205.5M Q2 2022 Loan Volume Loan Yield Loan Fees Investment Deposits Borrowings Q3 2022 Q4 2020 Q2 2021 Q4 2021 Q2 2022 Securities & Cas
Slide 13: Q3-2022 Earnings Overview
Q3-2022 Earnings Overview Non-interest Expense Regulatory Capital Levels Expense base continues repositioning for $197.0M enhanced client experience and future scale Medium-term $16.7M 8% CET1 Target Capital remains above historical averages with $164.3M 14.95% 15.25% $153.0M 14.42% Total Capita
Slide 14: Full Year 2022 Guidance
Full Year 2022 Guidance Full Year 2022 Guidance Guidance Commentary Forward curve15 assumes 2022 terminal rate Average Mortgage Finance Loans11 Mid-30% Decline of 4.50% Fed Funds Non-interest expense growth guidance excludes insurance premium finance loan portfolio divestiture transaction expens
Slide 15: Appendix // Footnotes
Appendix // Footnotes 1. Total Revenue in 2020 and 2021 excludes Correspondent Lending; See slide: Appendix // Correspondent Lending Historical Contribution 2. Includes service charges on deposit accounts, as well as fees related to our commercial card program, merchant transactions, wire fees, and
Slide 16: Appendix // Correspondent Lending Historical Contribution
Appendix // Correspondent Lending Historical Contribution Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 ($M) Net Interest Income 24.5 1.5 2.8 1.4 30.2 0.9 0.3 0.0 0.0 1.2 Non-interest Income Brokered Loan Fees 2.6 2.8 5.8 3.9 15.1 2.2 0.7 0.0 0.0 2.9 Servicing Incom
Slide 17: Appendix // Return on Average Tangible Common Equity (ROTCE)
Appendix // Return on Average Tangible Common Equity (ROTCE) ROTCE is a non-GAAP financial measure. ROTCE represents the measure of net income available to common shareholders as a percentage of average tangible common equity. ROTCE is used by management in assessing financial performance and use of
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