Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q1 2018 Earnings Presentation
18 slides from Texas Capital Bancshares's earnings presentation, Apr 18, 2018
Slide 1: TCBI Q1 2018 Earnings
TCBI Q1 2018 Earnings April 18, 2018
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 Balanced Growth Credit Quality • Solid traditional LHI growth in Q1-2018 • Expected seasonal contraction in Mortgage Finance balances • Seasonal impact on deposits, driving lower liquidity levels in Q1-2018 • Benefit from improving yields
Slide 4: Energy and Retail Update
4 Energy and Retail Update Energy Exposure • Outstanding energy loans represented 7% of total loans, or $1.4 billion, at Q1-2018 compared to $1.3 billion at Q4-2017 • Addition of new loans improves composition and quality of total portfolio as problem assets are resolved • Strong reserve position re
Slide 5: Update on Geographic Diversification
9 ,8 6 6 1 1 ,6 5 4 6 ,5 4 7 1 2 ,2 1 8 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Texas Regions National Businesses $ M il li o n 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 consistent with Q4-2017 despite seasonal impact and increased 29% from Q1-2017 • Increase in traditional LHI yield of 25 bps • Less than $170 million in loans subject to floors, down over $392 million compared to Q4-2017 • Average Liquidity Assets
Slide 7: Loan Growth
Loan Growth 7 • Broad-based growth in average traditional LHI – Growth of $415.3 million (3%) from Q4-2017 and $2.4 billion (19%) from Q1-2017 • Strong growth at end of the quarter; period-end balance $316.4 million higher than Q1-2018 average balance • Expected impact from seasonality resulting in
Slide 8: Deposit Growth
Deposit Growth 8 Average Balance Trends ($B) Funding Costs • Deposit costs increased 13 bps from .53% at Q4-2017 to .66% at Q1-2018, and total funding costs increased 12 bps • Continued focus on cost-effective deposit growth ‐ Seasonal decrease in linked quarter deposits resulting in more efficient
Slide 9: Non-interest Expense
Non-interest Expense 9 Quarterly Change Non-interest expense ($MM) Increase/ (Decrease) Q4 2017 $133.1 Salaries and employee benefits – FAS 123R (includes stock price changes) (1.4) Salaries and employee benefits – non-LTI incentives and annual incentive pool (2.2) Salaries and employee benefits – F
Slide 10: Asset Quality
Asset Quality 10 • Total credit cost of $14.0 million for Q1-2018 (includes $2.0 million OREO valuation allowance), compared to $ 8.1 million in Q4-2017 (includes $6.1 million OREO permanent write-down) and $9.0 million in Q1-2017 • NCOs $5.2 million, or 14 bps of LHI excluding MF loans, in Q1-2018
Slide 11: Performance Summary - Quarterly
Performance Summary - Quarterly 11 (in thousands) Q1 2018 Q4 2017 Q3 2017 Q2 2017 Q1 2017 Net interest income $ 210,300 $ 210,649 $ 204,361 $ 182,959 $ 163,359 Non-interest income 19,947 19,374 19,003 18,769 17,110 Net revenue 230,247 230,023 223,364 201,728 180,469 Provision for credit losses 12,00
Slide 12: 2018 Outlook
2018 Outlook 12 Business Driver 2018 Outlook v. 2017 Results Comments & Changes since March 5, 2018 Average LHI Low to mid-teens percent growth - Average LHI – Mortgage Finance Low- to mid-single digit percent growth Increased from flat to low single digit percent growth Loans held for sale (MCA) $1
Slide 13: Closing Comments
Closing Comments • Strong earnings in Q1-2018 despite impact of seasonality • Continued traditional LHI growth in Q1-2018 • Expected seasonal declines in Mortgage Finance asset balances • Q1-2018 deposit levels impacted by seasonality resulting in more effective utilization of liquidity • High asset
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) Q1 2018 Q4 2017 Q1 2017 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 23,854 3.50% $ 23,678 3.57% $ 32,129 2.86% Liquidity assets 2,564,579 1.55% 3,217,486 1.28% 3,589,166 .80% Loans held for sale 1,1
Slide 17: Average Balance Sheet - Quarterly
Average Balance Sheet - Quarterly 17 (in thousands) QTD Average Q1/Q4 % Change YOY % Change Q1 2018 Q4 2017 Q1 2017 Total assets $23,912,613 $25,080,825 $20,861,171 (5)% 15% Loans held for sale 1,187,594 1,144,124 1,064,322 4% 12% Loans held for investment 15,425,323 15,010,041 12,980,544 3% 19% Loa
Slide 18: Period End Balance Sheet
Period End Balance Sheet 18 (in thousands) Period End Q1/Q4 % Change YOY % Change Q1 2018 Q4 2017 Q1 2017 Total assets $24,449,147 $25,075,645 $20,864,874 (2)% 17% Loans held for sale 1,088,565 1,011,004 884,647 8% 23% Loans held for investment 15,741,772 15,366,252 13,298,918 2% 18% Loans held for
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