Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q3 2019 Earnings Presentation
19 slides from Texas Capital Bancshares's earnings presentation, Oct 16, 2019
Slide 1: TCBI Q3 2019 Earnings
TCBI Q3 2019 Earnings October 16, 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 $24.7 billion $27.4 billion $88.1 million $1.70 13.22% 1.06% • Net interest income increased 4% from Q2-2019 and increased 9% from Q3-2018 Net Interest Income • Net interest margin decrease
Slide 4: Energy and Leveraged Lending Update
Energy and Leveraged Lending Update Energy Outstandings 9/30/19 Energy • Outstanding energy loans represented 6% of total loans, or $1.5 billion, at Q3-2019 compared to 6%, or $1.6 billion, at Q2-2019 and 6%, or $1.5 billion, at Q3-2018 8% • Non-accruals totaled $63.2 million at Q3-2019 compared to
Slide 5: Mortgage Finance, LHI
Mortgage Finance, LHI Core Strengths • Technology investments have allowed for scalability • Historically low credit risk • Strong funding opportunities • Other product offerings developed to serve the industry • Commitment to clients in the industry allow for increased market share Efficiency Earni
Slide 6: Net Interest Income & Margin
Net Interest Income & Margin Average Earning Assets & Net Quarterly Change Q1 2018 Interest Q2 2018 Income Q3 2018 Q4 2018 Q1 2019 NII ($MM) NIM (%) $450.0 $243.6 Q2 2019 3.41% $30.0 11.5 Increase in loan balances - $4.5 $400.0 7.0 Contribution from free funds .09 $2.8 $27.4 6.5 Decrease in funding
Slide 7: Loan Growth
Loan Growth Average Loans & Yield Loan Composition ($27.4Billion outstanding balance 9/30/19) $28.0 9.00% 8.80% $26.0 8.60% Business Assets $9.5 $10.7 8.40% 26% $24.0 8.20% $22.0 $6.9 $7.1 $7.1 8.00% Energy 7.80% 5% $20.0 7.60% 7.40% 7.20% Average Balances ($B) $18.0 7.00% Highly Liquid Unsecured As
Slide 8: Deposit Growth
Deposit Growth Average Deposits Funding Costs 2.00% $26.0 $10.0 $24.0 $22.0 $7.9 1.50% 1.38% 1.40% $20.0 $7.9 $7.5 $7.0 1.25% 1.23% $18.0 1.33% Average Balances ($B) $16.0 1.07% 1.29% $16.6 1.17% 1.21% $14.0 1.00% $14.0 $14.6 $12.0 $13.5 0.99% $12.9 $10.0 $8.0 0.50% $6.0 $4.0 $2.0 $- 0.00% Q3 2018 Q
Slide 9: Non-interest Expense
Non-interest Expense Quarterly Change NIE Increase/ • Changes in Salaries & Benefits components Non-interest expense ($MM) (Decrease) • Annual incentive accrual ramps Q2 2019 $141.6 throughout the year and generally higher Salaries and employee benefits – salaries only 1.1 in Q3 than Q2 based on imp
Slide 10: Asset Quality
Asset Quality Allowance for Credit Losses NCO/Average Total LHI $240.0 3.5x 3.5x 3.4x 0.80% 3.4x $220.0 3.3x 3.3x $225.4 3.2x 3.2x $218.4 3.1x 3.1x $200.0 3.x 0.70% $200.6 $203.0 $199.5 3.x 2.9x $180.0 2.9x 2.8x 2.8x 2.7x 0.60% $160.0 2.4x 2.7x 2.6x 2.6x Ending Balance ($M) 2.5x 2.5x 2.4x $140.0 2.4
Slide 11: Performance Summary - Quarterly
Performance Summary - Quarterly (in thousands except per share data) Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 Net interest income $ 252,168 $ 243,553 $ 235,614 $ 240,673 $ 232,175 Non-interest income 20,301 24,364 30,014 15,280 25,518 Net revenue 272,469 267,917 265,628 255,953 257,693 Provision for
Slide 12: 2019 Outlook
2019 Outlook Business 2019 Outlook v. 2018 Results Comments & Changes since July 17, Driver 2019 Average LHI Mid-single digit percent growth - Average LHI – Increased from low to mid-twenties percent Mortgage Mid to high-thirties percent growth growth Finance Loans held for $2.5 billion average - sa
Slide 13: Long-term Outlook
Long-term Outlook Financial Goals ROA > 1.3% ROCE > 15% Efficiency Ratio < 50% Key Assumptions • Remain committed to the financial goals, which include investing over the short term in initiatives needed to achieve them, but timeline will be more challenging in existing rate environment • Risk-appro
Slide 14: Closing Comments
Closing Comments • Commitment to delivering premier client experience to our clients and other new specialized industries offering opportunities for increased growth • Slight decrease in linked quarter LHI, primarily from expected runoff in leveraged lending portfolio • Continued strength in mortgag
Slide 15: Q&A
O&A 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) Q3 2019 Q2 2019 Q3 2018 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 239,834 4.69% $ 231,002 4.83% $ 115,519 4.87% Liquidity assets 4,284,874 2.17% 2,520,263 2.36% 1,901,759 1.96% Loans held for sale 2,
Slide 18: Average Balance Sheet - Quarterly
Average Balance Sheet - Quarterly (in thousands) QTD Average Q3/Q2 % YOY % Q3 2019 Q2 2019 Q3 2018 Change Change Total assets $32,886,612 $29,794,983 $25,975,915 10% 27% Loans held for sale 2,555,269 2,494,883 1,484,459 2% 72% Loans held for investment 16,901,391 16,781,733 16,331,622 1% 3% Loans he
Slide 19: Period End Balance Sheet
Period End Balance Sheet (in thousands) Period End Q3/Q2 % YOY % Q3 2019 Q2 2019 Q3 2018 Change Change Total assets $33,526,437 $29,970,384 $27,127,107 12% 24% Loans held for sale 2,674,225 1,057,586 1,651,930 153% 62% Loans held for investment 16,772,824 16,924,535 16,569,538 (1)% 1% Loans held for
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