Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q3 2018 Earnings Presentation
16 slides from Texas Capital Bancshares's earnings presentation, Oct 17, 2018
Slide 1: TCBI Q3 2018 Earnings
TCBI Q3 2018 Earnings October 17, 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
Opening Remarks & Financial Highlights • Modest traditional LHI growth linked quarter; up 12% from Q3-2017 • Continued seasonally strong mortgage finance average balances Balanced Growth • Expected increase in total deposits concentrated in interest-bearing • 3% growth in net revenue from Q2-2018; 1
Slide 4: Net Interest Income & Margin
Net Interest Income & Margin Earning Asset & Margin Trends Quarterly Change NII ($MM) NIM (%) 4.40% $231.7 Q2 2018 3.93% $25.0 $2.0 .4 Increase in LHI yields .01 $3.2 $1.7 .4 Increase in LHS yields .01 $2.7 $2.6 $23.1 4.20% $22.1 (1.6) Mix shift from LHI to MF (.03) $20.0 $21.1 $20.1 $20.5 (3.2) Dec
Slide 5: Loan Growth
Loan Growth Average Balance Trends ($B) Total Loan Composition ($23.7Billion at 9/30/18) $24.0 7.00% $22.0 6.80% Business Assets 29% $6.4 $6.9 6.60% $20.0 $6.2 $5.3 $5.9 6.40% Energy $18.0 5% 6.20% $16.0 6.00% $16.3 Highly Liquid $15.9 Unsecured $14.0 $15.0 $15.4 5.80% Assets $14.4 4% 1% $12.0 5.47%
Slide 6: Deposit Growth
Deposit Growth Average Balance Trends ($B) Funding Costs 1.20% $22.0 1.07% $20.0 $7.9 $9.1 1.00% $8.1 $8.0 0.90% $18.0 $8.8 0.99% $16.0 0.80% 0.74% $14.0 0.81% 0.62% $12.0 0.60% 0.56% $12.9 0.66% $11.7 $10.0 $11.4 $11.3 $10.3 0.53% Deposit Balances ($B) Balances Deposit $8.0 0.40% 0.47% $6.0 $4.0 0.
Slide 7: Non-interest Expense
Non-interest Expense Quarterly Change NIE - Efficiency Increase/ • Changes in Salaries & Benefits components of change Non-interest expense ($MM) (Decrease) • Decrease in 123R expense mainly due to stock Q2 2018 $132.1 price Salaries and employee benefits – FAS 123R • Annual incentive accrual ramps
Slide 8: Asset Quality
Asset Quality NCO / Average Traditional LHI Non-accrual loans Q3 2018 1.40% Commercial $ 104,957 Construction – 1.20% Real estate 2,515 1.00% Consumer 60 0.80% Equipment leases – 0.60% Total non-accrual loans $ 107,532 0.38% 0.40% 0.29% 0.21% 0.20% 0.07% 0.10% Non-accrual loans as % of LHI .65% 0.00
Slide 9: Performance Summary - Quarterly
Performance Summary - Quarterly (in thousands) Q3 2018 Q2 2018 Q1 2018 Q4 2017 Q3 2017 Net interest income $ 232,175 $ 231,712 $ 210,300 $ 210,649 $ 204,361 Non-interest income 25,518 17,279 19,947 19,374 19,003 Net revenue 257,693 248,991 230,247 230,023 223,364 Provision for credit losses 13,000 2
Slide 10: 2018 Outlook
2018 Outlook Business 2018 Outlook v. 2017 Results Comments & Changes since July 18, Driver 2018 Average LHI Low to mid-teens percent growth - Average LHI – Low to mid-teens percent growth Increased from mid-single digit percent growth Mortgage Finance Loans held for sale $1.4 billion average Increa
Slide 11: Closing Comments
Closing Comments • Continued strong earnings for 2018 with improvements in year to date operating leverage • Solid traditional LHI growth, up 8% year to date, with slower level in Q3-2018 as we are selective about growth areas in positioning our portfolio for through-the-cycle credit quality • Conti
Slide 12: Q&A
2 Q&A © Texas CAPITAL BANCSHARES, INC:
Slide 13: Appendix
Appendix © Texas CAPITAL BANCSHARES, INC:
Slide 14: Average Balances, Yields & Rates - Quarterly
Average Balances, Yields & Rates - Quarterly (in thousands) Q3 2018 Q2 2018 Q3 2017 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 115,519 4.87% $ 24,514 3.15% $ 86,087 1.57% Liquidity assets 1,901,759 1.96% 1,665,087 1.74% 2,588,998 1.25% Loans held for sale 1,48
Slide 15: Average Balance Sheet - Quarterly
Average Balance Sheet - Quarterly (in thousands) QTD Average Q3/Q2 % YOY % Q3 2018 Q2 2018 Q3 2017 Change Change Total assets $25,975,915 $24,606,237 $23,501,302 6% 11% Loans held for sale 1,484,459 1,516,047 1,009,703 (2)% 47% Loans held for investment 16,331,622 15,883,317 14,427,980 3% 13% Loans
Slide 16: Period End Balance Sheet
Period End Balance Sheet (in thousands) Period End Q3/Q2 % YOY % Q3 2018 Q2 2018 Q3 2017 Change Change Total assets $27,127,107 $27,781,910 $24,400,998 (2)% 11% Loans held for sale 1,651,930 1,276,768 955,983 29% 73% Loans held for investment 16,569,538 16,536,721 14,828,406 0% 12% Loans held for in
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