Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q1 2016 Earnings Presentation
20 slides from Texas Capital Bancshares's earnings presentation, Apr 20, 2016
Slide 1: TCBI Q1 2016 Earnings
TCBI Q1 2016 Earnings April 20, 2016
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 • Solid Q1-2016 growth in traditional LHI balances in continuing highly competitive C&I market • Flat average balances in MFLs with significant quarter-end surge following market-share improvement thro
Slide 4: Energy Update
4 Energy Update • Outstanding energy loans represented 6% of total loans, or $1.1 billion, at March 31, 2016 compared to $1.2 million at Q4- 2015 • Allocated reserve of $51.5 million represents 5% of loans subject to direct commodity price exposure • TCBI’s energy loans primarily consist of engineer
Slide 5: Energy Update continued
5 Energy Update continued • SNC review ‐ SNC review included over 80% of our energy SNC loans, resulting in downgrade of only 4 credits representing $70.9 million or 16% of energy SNC book and 6% of total energy loans ‐ Increase in NPAs of $38.3 million ‐ No charge-offs in SNC portfolio • Borrowing
Slide 6: Houston Market Risk Real Estate
Houston Market Risk Real Estate 6 (in thousands except % data) Q1 2016 % of Total Houston Market Risk CRE Q4 2015 % of Total Houston Market Risk CRE Apartment buildings $241,189 32% $214,863 32% Commercial buildings(1) 96,112 14% 90,766 14% Shopping center/mall buildings 103,764 15% 102,179 15% Hote
Slide 7: Update on Geographic Diversification
7 Update on Geographic Diversification Note: (1) Texas Regions loan balances include balances from the Energy business. National Business balances include Mortgage Finance, Builder Finance, Premium Finance, Lender Finance, and our national depository businesses. Our national LOBs include Texas clien
Slide 8: Net Interest Income & Margin
Net Interest Income & Margin 8 • Net interest income growth of 2% from Q4-2015 and 11% from Q4-2014 • Adjusted NIM net of effect of liquidity is 3.63% • MFL balances continue to benefit NII with small negative to NIM • Traditional LHI spreads showed increase from Fed rate increase, offset by new gro
Slide 9: Loan Growth
Loan Growth 9 • Broad-based growth in average traditional LHI – Growth of $217.3 million (2%) from Q4-2015 and $1.4 billion (13%) from Q1-2015 • Period-end balance $149.1 million higher than Q1-2016 average balance and 12% above Q1-2015 period-end balance • MF performance continues to be strong with
Slide 10: Deposit Growth
Deposit Growth 10 Average Balance Trends ($B) Funding Costs • Core funding costs – deposits and borrowed funds increased by 6 bps compared to LHI yields of 6 bps • Deposit growth consistent with strategic opportunity to build deposit base ‐ Slight decrease in linked-quarter deposits, with liquidity
Slide 11: Non-interest Expense
Non-interest Expense 11 • Efficiency Ratio consistent with guidance ‐ Linked quarter increase in salaries expense related to seasonal payroll offset by effect of change in stock price ‐ MCA-related expenses and Wealth Management build out ‐ Impact of net MCA expenses for Q1-2016 was $.03 compared to
Slide 12: Performance Summary - Quarterly
Performance Summary - Quarterly 12 (in thousands) Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Net interest income $ 144,783 $ 142,188 $ 142,048 $ 142,285 $ 130,009 Non-interest income 11,297 11,320 11,380 12,771 12,267 Net revenue 156,080 153,508 153,428 155,056 142,276 Provision for credit losses 30,00
Slide 13: 2016 Outlook
2016 Outlook 13 Business Driver 2016 Outlook v. 2015 Results Comments & Changes since January 20, 2016 Average LHI High single to low double-digit percent growth – Average LHI – Mortgage Finance Flat to low single-digit percent growth – Loans held for sale (MCA) Greater than $300 million average out
Slide 14: Asset Quality
Asset Quality 14 • Total credit cost of $30.0 million for Q1-2016, compared to $14.0 million in Q4-2015 and $11.0 million in Q1-2015 • NCOs $7.4 million, or 25 bps, in Q1-2016 compared to 7 bps in Q4- 2015 and 12 bps in Q1-2015 • Increase in non-accruals primarily energy; NPL ratio slightly over 1%
Slide 15: Closing Comments
Closing Comments • Traditional LHI growth experienced in Q1-2016 was strong and in line with guidance • Aggressively managing energy portfolio; remain confident in underwriting standards, portfolio composition and current reserve level • No change in full-year guidance for provision or NCOs despite
Slide 16: Q&A
Q&A 16
Slide 17: Appendix
Appendix 17
Slide 18: Average Balances, Yields & Rates - Quarterly
Average Balances, Yields & Rates - Quarterly 18 (in thousands) Q1 2016 Q4 2015 Q1 2015 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 29,102 3.66% $ 30,802 3.59% $ 39,930 3.78% Liquidity assets 2,953,589 .50% 3,457,063 .27% 2,210,864 .25% Loans held for sale 126,0
Slide 19: Average Balance Sheet - Quarterly
Average Balance Sheet - Quarterly 19 (in thousands) QTD Average Q1/Q4 % Change YOY % Change Q1 2016 Q4 2015 Q1 2015 Total assets $19,108,976 $19,249,277 $16,852,243 (1)% 13% Loans held for sale 126,084 24,658 − 411% 100% Loans held for investment 11,910,788 11,693,464 10,502,172 2% 13% Loans held fo
Slide 20: Period End Balance Sheet
Period End Balance Sheet 20 (in thousands) Period End Q1/Q4 % Change YOY % Change Q1 2016 Q4 2015 Q1 2015 Total assets $20,210,893 $18,909,139 $17,326,260 7% 17% Loans held for sale 94,702 86,075 − 10% 100% Loans held for investment 12,059,849 11,745,674 10,760,978 3% 12% Loans held for investment,
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