Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q3 2023 Earnings Presentation
17 slides from Texas Capital Bancshares's earnings presentation, Oct 19, 2023
Slide 1: Q3-2023 Earnings
Q3-2023 Earnings October 19, 2023 © 2023 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, TCBI’s financial condition, results of operations, business plans and future performance. Thes
Slide 3: Foundational Tenants of Value Creation in Place
Foundational Tenants of Value Creation in Place Financial 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 Priorities business and investing aggress
Slide 4: Financially Resilient Balance Sheet
Financially Resilient Balance Sheet Composition of Liquid Assets Cash & Contingent Liquidity % of Deposits On-hand cash liquidity is $4.2 billion, or Peer Medians ($M) 2Q23 3Q23 14% of total assets TCBI FHLB Borrowing Capacity 7,492 6,937 Cash & Securities of $8.3 billion G-SIBs1 Cat II – IV2 Pe
Slide 5: 2021 Strategic Performance Drivers
2021 Strategic Performance Drivers Where We Where We Where We Where We Started Are Going Started Are Going FY FY FY YTD FY FY FY YTD Income Statement 2020 2021 2022 2023 2025 Performance Metrics 2020 2021 2022 2023 2025 Investment Banking and Trading Income 2.2% 2.7% 2.9% 9.1% ~10% Return on Average
Slide 6: Financial Performance // Income Statement
Financial Performance // Income Statement Adjusted Adjusted Non-GAAP Adjustments11 ($M) 2022 (Non-GAAP)11 (Non-GAAP)11 Financial Highlights ($M) Non-Interest Revenue 349.5 2022 2022 YTD-2023 Q3 2022 Q3 2022 Q2 2023 Q3 2023 Gain on Sale of BDCF 248.5 Net Interest Income $875.8 $875.8 $699.4 $239.1 $2
Slide 7: Financial Performance // Balance Sheet Highlights
Financial Performance // Balance Sheet Highlights Balance Sheet Highlights ($M) Ending Balances Q3 2022 Q2 2023 Q3 2023 QoQ Q3 2022 Q2 2023 Q3 2023 QoQ Assets Liabilities Cash and Equivalents 3,640 2,847 4,193 47% Non-Interest Bearing Deposits 11,495 9,429 9,353 (1%) Total Securities 3,370 4,227 4,0
Slide 8: Loan Portfolio Composition
Loan Portfolio Composition Period End Loan Trends ($B) Utilization Rates15 70% 52% 65% LTM Average $3.1 60% 55% $9.7 $9.8 $10.6 $10.5 $10.4 50% 50% $4.7 $4.9 $5.0 $5.3 $5.4 45% 40% Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Commercial Loans CRE Loans Insurance Pr
Slide 9: Deposit and Funding Composition
Deposit and Funding Composition Average Deposit Trends ($B) Funding base continuing multi-year Q3 2023 EOP $25.6 transition to target state composition $24.9 $24.2 $23.7 $23.2 $23.9 $3.6 $2.9 Total deposit balances increased $2.2 $1.6 $1.6 $1.5 $561 million or 2% QoQ $1.8 $1.5 $1.5 $1.4 $1.4 Bro
Slide 10: Net Interest Income Sensitivity
Net Interest Income Sensitivity TCBI NII Sensitivity ($M) Standard Model Assumptions18 $3.6 billion, or 22%, of LHI excl. Mortgage Finance have contractual floors 15.0% 100bp & 200bp Parallel Shocks 10.0% All loans with floors are acting as variable Loan Balances: Static $58 rate loans $53 5.0
Slide 11: Q3-2023 Earnings Overview
Q3-2023 Earnings Overview Net Interest Income ($M) Net Interest Margin ($M) $2.1 $11.6 $14.2 $1.2 3.33% $1.9 3.26% 3.29% ($8.4) 3.05% 3.13% ($7.1) ($14.4) ($1.0) $232.0 $232.1 $239.1 $247.6 $235.3 $232.0 $232.1 Q2 2023 Loans Excl Loans Excl MF Loan MF Loan Loan Fees Investment Interest Interest Borr
Slide 12: Q3-2023 Earnings Overview
Q3-2023 Earnings Overview Allowance for Credit Loss Reserve Ratios Asset Quality Ratios ACL on Loans increased $10 million YoY 10.0 x to $245 million 9.0 x NPAs / Total Assets NCOs / Avg. LHI Criticized / LHI 8.0 x 7.1x 1.76% Total ACL, excl. MF16 increased to $285 3.29% 2.00% 1.69% 7.0 x 1.65%
Slide 13: Q3-2023 Earnings Overview
Q3-2023 Earnings Overview Regulatory Capital Levels 2023 Target Regulatory capital ratios remain 17.70% 16.86% 17.09% exceptionally strong 16.43% 15.25% 3.03% 2.83% 2.81% Total capital ratio of 17.09%, in the 2.71% 2.66% top decile of the peer group3, and 1.67% 1.61% 1.54% 1.58% CET1 ratio of 12
Slide 14: Full Year 2023 Guidance
Full Year 2023 Guidance FY 2022 Full Year 2023 Guidance Commentary Adjusted (Non-GAAP11) Guidance Forward curve20 assumes a 2023 exit rate of 5.50% Total Revenue, Adjusted11 $976.8 Low double-digit % growth Assumes tax rate of 25% in 2023 Revenue and non-interest expense growth guidance exclud
Slide 15: Appendix // Footnotes
Appendix // Footnotes 1. U.S. globally systematically important banks; includes JPMorgan Chase & Co. (JPM), Bank of American Corporation (BAC), Citigroup Inc. (C) and Wells Fargo & Company (WFC); Data as of Q2 2023 2. As defined by the Federal Reserve; Category II – U.S. commercial banks with ≥ $700
Slide 16: Non-GAAP Reconciliation // Return on Average Tangible Common Equity (ROATCE)
Non-GAAP Reconciliation // Return on Average Tangible Common Equity (ROATCE) ROATCE is a non-GAAP financial measure. ROATCE represents the measure of net income available to common shareholders as a percentage of average tangible common equity. ROATCE is used by management in assessing financial per
Slide 17: Non-GAAP Reconciliation // Adjusted Earnings & Ratios
Non-GAAP Reconciliation // Adjusted Earnings & Ratios Adjusted line items are non-GAAP financial measures that management ($M, Except per Share) Q3 2022 Q4 2022 2020 2021 2022 believes aids in the discussion of results. A reconcilement of these adjusted Net Interest Income $239.1 $247.6 $851.3 $768.
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