Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q4 2021 Earnings Presentation
19 slides from Texas Capital Bancshares's earnings presentation, Jan 20, 2022
Slide 1: Q4-2021 Earnings
Q4-2021 Earnings January 20, 2022 © 2022 Texas Capital Bank Member FDIC
Slide 2: Forward-looking Statements
Forward-looking Statements This communication contains “forward-looking statements” within the meaning of and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, our financial condition, results of operations, business plans and future performance. These s
Slide 3: Our Distinct Opportunity
Our Distinct Opportunity Serving strong core Texas markets with expanded coverage and a complete set of capabilities Improving client relevance and diversifying our revenue base Attracting high-quality talent with significant experience Operating from a de-risked position of financial strength 3
Slide 4: Strategic Performance Drivers Announced September 1st
Strategic Performance Drivers Announced September 1st Where We Where We Where We Where We Income Statement Where We Started Are1 Are Going Balance Sheet Where We Started Are1 Are Going Investment Banking and Trading FY Average Liquidity Assets5 2020 2.5% 2.9% ~10% 2020 28% 36% >20% Income (% of Tota
Slide 5: Our Path Forward
Our Path Forward Operating Model Aligned to our Clear Strategic Direction and Committed to Financial Resilience Vision, Grounded in our Values Fortitude to Deliver Organized Around Client Delivery Expanding Coverage Risk Management Product & Industry Specialization Business Banking Granular Ri
Slide 6: New Products and Services
New Products and Services Recent Progress Upcoming Milestones v New healthcare-specific Revenue Cycle Management capability now Continue scaling newly launched commercial card program and capitalize on Treasury launched and recognizing revenue with new clients strong pipeline built over the past
Slide 7: Expanding Coverage
Expanding Coverage Recent Progress Upcoming Milestones v Rolled out new Business Banking line of business with frontline, treasury, End-to-end integration with loan operating system to enhance internal Business and risk leaders in place and engaged in four of five major markets process efficienc
Slide 8: Focused on the Future
Focused on the Future Current Investment // Re-aligning the Revenue Growth // Growing top- Building Tangible Book Value // expense base to directly support the line revenue as a result of expanded Reinvesting organically generated Financial business and investing aggressively banking capabilities fo
Slide 9: Financial Performance
Financial Performance Financial Highlights ($M) Q4 2020 Q3 2021 Q4 2021 Net income to common of $60.8 million, or $1.19 per diluted share Focused investments in C&I lines of business continue to drive broad-based Net Interest Income $213.2 $190.5 $194.0 loan growth and firming commitment pipelin
Slide 10: Noteworthy Items // Loan Fees and PPP
Noteworthy Items // Loan Fees and PPP Loan Fees (excl. PPP) and Loan Syndication Fees12 PPP Loans PPP Fees Yield on PPP Loans (excl. Fees) LHI Yield NIM Loan Fees (excl. PPP) Loan Syndication Fees12 Contribution Contribution $5.1M Q4 2020 $8.1M 0.21% 0.08% $9.8M $3.4M $3.4M $2.8M Q1 2021 $7.6M 0.20%
Slide 11: Loan Portfolio
Loan Portfolio Period End Loan Trends (excl. PPP) Quarterly Trend in Yields and Spreads 3.81% 3.65% 3.67% 3.61% 3.61% $9.9B $10.5B 3.49% 3.52% $9.0B $8.9B $9.3B $5.8B $5.8B $5.6B $5.2B 3.38% 3.29% 3.37% 3.36% 3.41% 3.30% 3.34% $4.8B Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q4 2020 Q1 2021 Q2 2021 Q3
Slide 12: Deposits and Fundings
Deposits and Fundings Average Deposit Trends Average non-interest bearing DDA growth Q4 2021 EOP continues to outpace interest-bearing deposits, stabilizing deposit costs, and providing valuable liquidity for anticipated growth $10.9B $12.2B $13.2B $14.4B $15.1B $15.4B $15.8B $13.4B A $4.9 billion Y
Slide 13: Q4-2021 Earnings Overview
Q4-2021 Earnings Overview Net Interest Income & Margin NII Shock Sensitivity | 12-month Standard Model Summary Balance Assumptions Sheet Positioning $213.2M +100bp Shock +200bp Shock Net Interest Income 100bp & 200bp $190.5M $194.0M Parallel Shocks 17.4% 14.4% Fixed Loans (excl. 11.1% Loan Balan
Slide 14: Non-interest Expense Risk-Capital Balance
Q4-2021 Earnings Overview Non-interest Expense Salary & Employee Benefits Successful deployment of identified savings into frontline talent and new Non-interest Expense $153.0M Correspondent Lending16 capabilities continues at our desired pace $150.9M $146.6M $89.1M $0.3M $17.0M $1.2M Sustained and
Slide 15: Self-funding Investment
Self-funding Investment ~$100-110M ~$70M ~$10-15M ~$50-60M ~$130-145M in Expense ~$100-110M in Expense Saves to Date Reinvestment to Date 2020 Run 2021 CL Rationalizing Realized 2021 Run Strategic Future YE 2022 Rate Wind-down Deposit Internal Rate After Investments Investment Run Rate Verticals Opp
Slide 16: Appendix // Footnotes
Appendix // Footnotes 1. Results for Q4 2021 2. Total Revenue in 2020 excludes Correspondent Lending; See slide: Appendix // Correspondent Lending Historical Contribution 3. Includes service charges on deposit accounts, as well as fees related to our commercial card program, merchant transactions, w
Slide 17: Appendix // Return on Average Tangible Common Equity (ROTCE)
Appendix // Return on Average Tangible Common Equity (ROTCE) ROTCE is a non-GAAP financial measure. ROTCE represents the measure of net income available to common shareholders as a percentage of average tangible common equity. ROTCE is used by management in assessing financial performance and use of
Slide 18: Appendix // Loan Syndication Fees Historical Reclassification
Appendix // Loan Syndication Fees Historical Reclassification Q3 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 Q3 2021 ($000s) YTD As Reported Interest & Fees on Loans $283,625 $247,595 $237,179 $242,776 $1,011,175 $215,592 $210,611 $206,307 $632,510 Interest Income 306,008 252,010 24
Slide 19: Appendix // Correspondent Lending Historical Contribution
Appendix // Correspondent Lending Historical Contribution Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 ($M) Net Interest Income 24.5 1.5 2.8 1.4 30.2 0.9 0.3 0.0 0.0 1.2 Non-interest Income Brokered Loan Fees 2.6 2.8 5.8 3.9 15.1 2.2 0.7 0.0 0.0 2.9 Servicing Fee I
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