Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q2 2020 Earnings Presentation
16 slides from Texas Capital Bancshares's earnings presentation, Jul 22, 2020
Slide 1: Q2-2020 Earnings
Q2-2020 Earnings July 22, 2020
Slide 2: Forward Looking Statements
Forward Looking Statements This communication may be deemed to include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding our financial condition, results of operations, business plans and future performance. These statements are not his
Slide 3: Positioned for Growth
Positioned for Growth TCBI Overview Financial Positioning Unique branch-lite, commercially-focused, organic growth model built Capital 2007–2019 Annual Avg. Q1 2020 Q2 2020 over 20 years by hand-selecting top banking talent 12.0% 11.6% During a period (’16-’19) of favorable economic conditions a
Slide 4: Second Quarter Actions and Impact
Second Quarter Actions and Impact Resetting the Cost Base Decisions in late Q2-2020 signify an acceleration of actions started pre- MOE to narrow the strategic focus and realize efficiencies in the operating $387.8M $39.4M model. Reduction to annual non-interest expense of ~$30 million, with $17.8
Slide 5: Q2-2020 Financial Results
Q2-2020 Financial Results © Texas CAPITAL BANCSHARES, INC.
Slide 6: Loan Portfolio
Loan Portfolio Growth Outlook Average LHI (excluding MFLs) increased $416 million (3%) from Q1-2020, while ending LHI (excluding MFLs) decreasing $305 million (2%) from Q1- 2020 due to the following factors: Continuation of deliberate multi-quarter reductions in Energy and Leverage Lending; down
Slide 7: Deposits and Fundings
Deposits and Fundings Highlights Funding Costs Ending deposits increased $3.1 billion as clients built on-balance sheet cash amidst economic uncertainty, keeping low-earning liquidity balances at historical highs 1.40% Continued focus on cost-effective deposit growth within 1.25% verticals and c
Slide 8: Q2-2020 Earnings Overview: Net Interest Income and Credit Expense
Q2-2020 Earnings Overview Net Interest Income & Margin Commentary Net Interest Margin Detail (bps) A mix shift towards lower yielding Net Interest Income assets weighed on NIM, but a $243.6M decline in funding costs and stable $228.3M Warehouse yields offset impacts $209.9M Average liquidity ass
Slide 9: Non-interest Income and Non-interest Expense
Q2-2020 Earnings Overview Non-interest Income Commentary Fee Income Details Market continues to exhibit favorable Non-interest income economics for LHS sales. Continue to $8.5M $70.5M optimize portfolio between GOS and interest income $2.8M $6.3M Seasonal increase in already high $5.6M Warehouse
Slide 10: LOB Detail
LOB Detail © Texas CAPITAL BANCSHARES, INC.
Slide 11: Loan Portfolio Detail – Mortgage Finance
Loan Portfolio Detail – Mortgage Finance Commentary MWH + MCA Annualized Revenue Q2-2020 average MFLs (excluding MCA LHS) increased 23% Y-o-Y as the Bank optimized business mix to take advantage of industry volumes and GOS opportunities in MCA $174M When combined with MCA, annualized quarterly r
Slide 12: Loan Portfolio Detail – CRE
Loan Portfolio Detail – CRE Commentary Moderating Late Cycle Growth Thru-cycle Credit Performance Track record of proactive portfolio management evidenced by % Loan Growth * 4.5% NCO Rate * 40% changes in growth rates thru-cycle and strong credit performance TCBI 4.0% TCBI 35% 1 1 during periods o
Slide 13: Loan Portfolio Detail – Energy
Loan Portfolio Detail – Energy Commentary Portfolio Management Continued loan balance contraction driven by resolution of ~70% of E&P production hedged in 2020, ~60% in 2021 1 previously disclosed outsized problem credits resulting in a more This compares favorably to the 2015-2016 downturn gr
Slide 14: Loan Portfolio Detail – Leveraged Lending
Loan Portfolio Detail – Leveraged Lending Commentary Portfolio Management Diversified portfolio with some exposure to industries believed to be Senior leverage typically in the 3.0x-4.0x range; leverage trends most impacted by COVID-19; others may be affected depending on continue to be in line
Slide 15: Conclusion
Conclusion © Texas CAPITAL BANCSHARES, INC.
Slide 16: Summary & Outlook
Summary & Outlook Diverse, well-established lines of business balanced between differentiated national verticals and core market offerings reflective of the relationship banking approach synonymous with TCBI since inception Organic growth model developed by hand selecting top talent fosters uniq
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