Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q2 2019 Earnings Presentation
19 slides from Texas Capital Bancshares's earnings presentation, Jul 17, 2019
Slide 1: TCBI Q2 2019 Earnings
TCBI Q2 2019 Earnings July 17, 2019
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
Opening Remarks & Financial Highlights Total Loans Total Deposits Net Income EPS ROE ROA Operating HFI Results $24.3 billion $23.0 billion $78.0 million $1.50 12.20% 1.05% • Net interest income decreased 3% from Q1-2019 and increased 5% from Q2-2018 Net Interest Income • Net interest margin decrease
Slide 4: Energy and Leveraged Lending Update
Energy and Leveraged Lending Update Energy Outstandings 6/30/19 Energy • Outstanding energy loans represented 6% of total loans, or $1.6 billion, at Q2-2019 compared to 7%, or $1.7 billion, at Q1-2019 and 7%, or $1.6 billion, at Q2-2018 5% • Non-accruals totaled $61.1 million at Q2-2019 compared to
Slide 5: Mortgage Finance, LHI
Mortgage Finance, LHI Core Strengths • Technology investments have allowed for scalability • Historically low credit risk • Strong funding opportunities • Other product offerings developed to serve the industry • Commitment to clients in the industry allow for increased market share Efficiency Earni
Slide 6: Net Interest Income & Margin
Net Interest Income & Margin Earning Asset & Margin Trends Quarterly Change $30.0 NII ($MM) NIM (%) 4.60% $2.8 $235.6 Q1 2019 3.73% 2.6 Increase in day count .00 $26.1 $25.0 $2.0 4.40% $2.0 $1.9 (3.8) Decrease in LHI loan yields (.05) $1.7 $23.7 $23.1 $23.6 (3.3) Decrease in MF loan yields (.05) $22
Slide 7: Loan Growth
Loan Growth Average Balance Trends ($B) Total Loan Composition ($25.4Billion Q2-2019 period-end balance) $28.0 9.00% 8.80% $26.0 8.60% Business Assets 8.40% 29% $24.0 $9.5 8.20% $7.1 8.00% $22.0 $6.9 $7.1 Energy $6.4 7.80% 5% $20.0 7.60% 7.40% $18.0 7.20% Highly Liquid 7.00% Unsecured $16.0 6.80% As
Slide 8: Deposit Growth
Deposit Growth Average Balance Trends ($B) Funding Costs 2.00% $24.0 $22.0 $7.9 $20.0 $7.9 $7.5 $7.0 1.50% 1.38% 1.40% $18.0 $8.0 1.23% $16.0 1.07% 1.33% 1.29% $14.0 $14.6 1.17% $14.0 1.00% 0.90% $12.0 $12.9 $13.5 0.99% $10.0 $11.7 Deposit Balances Deposit($B) Balances 0.81% $8.0 $6.0 0.50% $4.0 $2.
Slide 9: Non-interest Expense
Non-interest Expense Quarterly Change NIE - Efficiency Increase/ • Changes in Salaries & Benefits components Non-interest expense ($MM) (Decrease) • Slowing of hiring positively impacting NIE Q1 2019 $140.4 growth Salaries and employee benefits – salaries only 1.1 • Annual incentive accrual ramps th
Slide 10: Asset Quality
Asset Quality Allowance for Credit Losses NCO/Average Total LHI $240.0 3.5x 3.5x 3.4x 3.4x 3.3x 0.80% $220.0 3.3x 3.2x $225.4 3.2x $218.4 3.1x 3.1x $200.0 3.x 0.70% 3.x $200.6 $203.0 2.9x 2.9x $180.0 2.8x $189.6 2.8x 2.7x 2.7x 0.60% 2.6x $160.0 2.4x 2.6x 2.5x 2.5x 2.2x 2.4x $140.0 2.4x 2.3x 0.50% 2.
Slide 11: Performance Summary - Quarterly
Performance Summary - Quarterly (in thousands) Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018 Net interest income $ 243,553 $ 235,614 $ 240,673 $ 232,175 $ 231,712 Non-interest income 24,364 30,014 15,280 25,518 17,279 Net revenue 267,917 265,628 255,953 257,693 248,991 Provision for credit losses 27,000 2
Slide 12: 2019 Outlook
2019 Outlook Business 2019 Outlook v. 2018 Results Comments & Changes since April 17, Driver 2019 Decreased from mid to high-single digit Average LHI Mid-single digit percent growth percent growth Average LHI – Mortgage Low to mid-twenties percent growth Increased from high-teens percent growth Fina
Slide 13: Long-term Outlook
Long-term Outlook Financial Goals ROA > 1.3% ROCE > 15% Efficiency Ratio < 50% Key Assumptions • Continuation of current economic conditions, allowing the Bank to capitalize on Inflection Point initiatives of growing higher return businesses and deepening client relationships • Despite more potentia
Slide 14: Closing Comments
Closing Comments • Focus on delivering premier client experience to our clients and being deliberate in our prospecting of new client relationships • Slight decrease in LHI in Q2-2019, primarily from expected runoff in leveraged lending portfolio • Taking advantage of outsized growth in mortgage fin
Slide 15: © Texas CAPITAL BANCSHARES, INC:
15 © Texas CAPITAL BANCSHARES, INC:
Slide 16: Appendix
Appendix © TEXAS CAPITAL BANCSHARES, INC:
Slide 17: Average Balances, Yields & Rates - Quarterly
Average Balances, Yields & Rates - Quarterly (in thousands) Q2 2019 Q1 2019 Q2 2018 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 231,002 4.83% $ 144,966 4.97% $ 24,514 3.15% Liquidity assets 2,520,263 2.36% 1,886,758 2.45% 1,665,087 1.74% Loans held for sale 2,4
Slide 18: Average Balance Sheet - Quarterly
Average Balance Sheet - Quarterly (in thousands) QTD Average Q2/Q1 % YOY % Q2 2019 Q1 2019 Q2 2018 Change Change Total assets $29,794,983 $26,655,036 $24,606,237 12% 21% Loans held for sale 2,494,883 2,122,302 1,516,047 18% 65% Loans held for investment 16,781,733 16,866,456 15,883,317 (1)% 6% Loans
Slide 19: Period End Balance Sheet
Period End Balance Sheet (in thousands) Period End Q2/Q1 % YOY % Q2 2019 Q1 2019 Q2 2018 Change Change Total assets $29,970,384 $28,383,111 $27,781,910 6% 8% Loans held for sale 1,057,586 1,901,637 1,276,768 (44)% (17)% Loans held for investment 16,924,535 17,061,590 16,536,721 (1)% 2% Loans held fo
Texas Capital Bancshares — Q2 2019 Earnings Presentation on 6ix