Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q3 2014 Earnings Presentation
17 slides from Texas Capital Bancshares's earnings presentation, Oct 23, 2014
Slide 1: TCBI Q3 2014 Earnings
October 22, 2014 TCBI Q3 2014 Earnings
Slide 2: Forward-looking statements
Certain matters discussed on this call may contain forward-looking statements, which are subject to risks and uncertainties and are based on Texas Capital’s current estimates or expectations of future events or future results. Texas Capital is under no obligation, and expressly disclaims such obliga
Slide 3: Opening Remarks & Financial Highlights
Opening Remarks & Financial Highlights 3 Core Earnings Power Strong Balanced Growth Credit Quality • Exceptional growth in traditional LHI balances despite highly competitive C&I market • Growth in mortgage finance loans (MFLs) as seasonality returns • Continued strong growth in deposits, improving
Slide 4: Revenue & Expense
Revenue & Expense 4 • High returns maintained with effective deployment of additional capital • Significant improvement in operating leverage and Efficiency Ratio • Strong capacity for Net Revenue growth • Total loans spreads remained above 4.00% • Net Revenue increased 8% from Q2-2014 • Reduction i
Slide 5: Net Interest Income & Margin
Net Interest Income & Margin 5 • Net interest income growth of 9% from Q2-2014 and 16% from Q3- 2013 • Yields on traditional LHI stable with 6% growth from Q2-2014 • MFL growth benefits NII • Yield reduction based on profile of customers • Composition resulted in 5 bps reduction in NIM • Favorable d
Slide 6: Analysis of Net Interest Income & Expenses
Analysis of Net Interest Income & Expenses 6 NII ($MM) NIM (%) $115.4 Q2 2014 3.87% − Increase in liquidity (.05) (1.6) Mix shift with MFL growth (.05) (1.5) Decrease in MF loan yields (.04) .2 Increase in LHI loan yields .01 − Increase in contribution from free funds .02 1.4 Impact of increase in d
Slide 7: Performance Summary
Performance Summary 7 (in thousands) Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Net interest income $ 125,661 $ 115,407 $ 108,315 $ 111,475 $ 108,776 Non-interest income 10,396 10,533 10,356 11,184 10,431 Net revenue 136,057 125,940 118,671 122,659 119,207 Provision for credit losses 6,500 4,000 5,000
Slide 8: 2014 Outlook
2014 Outlook 8 Business Driver 2014 Outlook v. 2013 Results Changes since July 23, 2014 Average LHI Low 20’s percent growth, pace declining − Average LHI – Mortgage Finance Low to mid teens percent growth, with expected decreases in Q4-2014 Increased from flat to slight increase Average Deposits Upp
Slide 9: Loan & Deposit Growth
Loan & Deposit Growth 9 • Broad-based growth in average traditional LHI – Growth of $439.0 million (5%) from Q2-2014 and $1.7 billion (22%) from Q3-2013 • Period-end balance $262.9 million higher than Q3-2014 average balance and 20% above Q3-2013 period-end balance. Quarter-end balance is 30% above
Slide 10: Asset Quality
Asset Quality 10 • Total credit cost of $6.5 million for Q3-2014, compared to $4.0 million in Q2-2014 and $5.0 million in Q3-2013 • NCOs $595,000, or 3 bps, in Q3-2014 compared to 11 bps in Q2-2014 and less than 1 bp in Q3-2013 • No OREO valuation charge in Q3-2014, Q2-2014 or Q3- 2013 • Reduction i
Slide 11: EPS Growth
EPS Growth 11 2009^ 2010 2011 2012 2013 YTD 9/30/2014 $0.71 $1.00 $1.99 $3.01 $2.72 $2.09 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 ^Excludes $.15 effect of preferred TARP dividend during 2009. Reported EPS was $0.56. EPS Growth (5-yr CAGR of 40%)
Slide 12: Closing Comments
Closing Comments • Proven organic growth business model continues to produce in key lines of business with improvements in operating leverage • Solid core earnings power and strong asset growth expected to continue in 2014 and beyond • Continue to have critical focus on maintaining excellent credit
Slide 13: Q&A
Q&A © ‘TEXAS CAPITAL BANCSHARES, INC:
Slide 14: Appendix
Appendix © ‘TEXAS CAPITAL BANCSHARES, INC:
Slide 15: Average Balances, Yields & Rates - Quarterly
Average Balances, Yields & Rates - Quarterly 15 (in thousands) Q3 2014 Q2 2014 Q3 2013 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 46,413 3.86% $ 50,487 4.00% $ 71,717 4.25% Fed funds sold & liquidity investments 388,855 .25% 198,058 .22% 167,613 .19% Loans hel
Slide 16: Average Balance Sheet - Quarterly
Average Balance Sheet - Quarterly 16 (in thousands) QTD Average Q3/Q2 % Change YOY % Change Q3 2014 Q2 2014 Q3 2013 Total assets $13,629,609 $12,362,168 $10,637,766 10% 28% Loans held for investment 9,423,259 8,984,230 7,731,901 5% 22% Loans held for investment, mortgage finance 3,452,782 2,822,560
Slide 17: Ending Balance Sheet - Quarterly
Ending Balance Sheet - Quarterly 17 (in thousands) Period End Q3/Q2 % Change YOY % Change Q3 2014 Q2 2014 Q3 2013 Total assets $14,266,214 $13,532,536 $10,797,448 5% 32% Loans held for investment 9,686,134 9,152,715 8,051,328 6% 20% Loans held for investment, mortgage finance 3,774,467 3,700,253 2,2
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