Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q3 2017 Earnings Presentation
18 slides from Texas Capital Bancshares's earnings presentation, Oct 18, 2017
Slide 1: TCBI Q3 2017 Earnings
TCBI Q3 2017 Earnings October 18, 2017
Slide 2: Forward-looking statements
Certain matters discussed within or in connection with these materials may contain “forward-looking statements” as defined in federal securities laws, which are subject to risks and uncertainties and are based on Texas Capital’s current estimates or expectations of future events or future results. T
Slide 3: Opening Remarks & Financial Highlights
3 Opening Remarks & Financial Highlights Core Earnings Power Strong Balanced Growth Credit Quality • Strong traditional LHI growth in Q3-2017 • Continued seasonally strong Mortgage Finance balances and ramp in MCA • Improvement in deposits from Q2-2017 with current levels indicative of more efficien
Slide 4: Hurricane, Energy and Retail Update
4 Hurricane, Energy and Retail Update Hurricane Exposure • Provision of $4.5 million and incremental expenses of approximately $700,000 included in Q3-2017 • Traditional LHI client impact has been minimal, but continuing to monitor as some grade migrations could occur • Mortgage Finance exposure min
Slide 5: Update on Geographic Diversification
9 ,4 7 9 1 1 ,9 4 7 6 ,6 3 5 1 2 ,4 4 7 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Texas Regions National Businesses $ M il li on s Loans Deposits 5 Update on Geographic Diversification Note: (1) Texas Regions loan balances include balances from the Energy business (2) Unemployment data through
Slide 6: Net Interest Income & Margin
Net Interest Income & Margin 6 • Net interest income increase of 12% from Q2-2017 • Increase in traditional LHI yield of 20 bps, despite impact of significant growth • Growth in total MFLs decreased NIM with an increase in NII • Less than $850 million in loans subject to floors, down over $120 milli
Slide 7: Loan Growth
Loan Growth 7 • Broad-based growth in average traditional LHI – Growth of $709.2 million (5%) from Q2-2017 and $1.8 billion (15%) from Q3-2016 • Strong growth at end of the quarter; period-end balance $400.4 million higher than Q3-2017 average balance • Increase in average MFL balances of $1.0 billi
Slide 8: Deposit Growth
Deposit Growth 8 Average Balance Trends ($B) Funding Costs • Core funding costs – deposit costs increased 9 bps from .38% at Q2-2017 to .47% at Q3-2017 • Borrowing costs increased in line with short-term rates and dedicated to funding of MFLs • Deposit focus on cost-effective growth and better utili
Slide 9: Non-interest Expense
Non-interest Expense 9 Quarterly Change NIE - Efficiency Non-interest expense ($MM) Increase/ (Decrease) Q2 2017 $111.8 Salaries and employee benefits – FAS 123R (includes stock price changes) 1.7 Salaries and employee benefits – non-LTI incentives and annual incentive pool 1.3 Salaries and employee
Slide 10: Asset Quality
Asset Quality 10 • Total credit cost of $20.0 million for Q3-2017, compared to $13.0 million in Q2-2017 and $22.0 million in Q3-2016 • NCOs $10.7 million, or 30 bps, in Q3-2017 compared to $ 12.4 million, or 36 bps, in Q2-2017 and 24 bps in Q3-2016 • NPL ratio reduced to .58% of total LHI • $6.3 mil
Slide 11: Performance Summary - Quarterly
Performance Summary - Quarterly 11 (in thousands) Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Net interest income $ 204,361 $ 182,959 $ 163,359 $ 171,223 $ 166,739 Non-interest income 19,003 18,769 17,110 18,835 16,716 Net revenue 223,364 201,728 180,469 190,058 183,455 Provision for credit losses 20,00
Slide 12: 2017 Outlook
2017 Outlook 12 Business Driver 2017 Outlook v. 2016 Results Comments & Changes since September 18, 2017 Average LHI Low double-digit percent growth – Average LHI – Mortgage Finance $3.6 to $4.0 billion average for Q4-2017 Increased from $3.6 to $3.8 billion average for final 6 months of 2017, with
Slide 13: Closing Comments
Closing Comments • Exceptional earnings and improved profitability metrics • Positive start for Q4-2017 loan growth and in line with full year guidance • Deposit growth improving and more balanced with loan growth; more effective utilization of liquidity and capital • Strong asset sensitivity even w
Slide 14: Q&A
Q&A 14
Slide 15: Appendix
Appendix 15
Slide 16: Average Balances, Yields & Rates - Quarterly
Average Balances, Yields & Rates - Quarterly 16 (in thousands) Q3 2017 Q2 2017 Q3 2016 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 86,087 1.57% $ 65,049 1.77% $ 26,615 3.52% Liquidity assets 2,588,998 1.25% 2,424,594 1.04% 3,561,356 .51% Loans held for sale 1,0
Slide 17: Average Balance Sheet - Quarterly
Average Balance Sheet - Quarterly 17 (in thousands) QTD Average Q3/Q2 % Change YOY % Change Q3 2017 Q2 2017 Q3 2016 Total assets $23,501,302 $21,320,976 $21,689,559 10% 8% Loans held for sale 1,009,703 845,623 430,869 19% 134% Loans held for investment 14,427,980 13,718,739 12,591,561 5% 15% Loans h
Slide 18: Period End Balance Sheet
Period End Balance Sheet 18 (in thousands) Period End Q3/Q2 % Change YOY % Change Q3 2017 Q2 2017 Q3 2016 Total assets $24,400,998 $23,119,713 $22,216,388 6% 10% Loans held for sale 955,983 846,017 648,684 13% 47% Loans held for investment 14,828,406 14,280,353 12,662,394 4% 17% Loans held for inves
Texas Capital Bancshares — Q3 2017 Earnings Presentation on 6ix