Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Investor Presentation (September 2008)
20 slides from Texas Capital Bancshares's investor presentation, Sep 8, 2008
Slide 1: Private Placement Investor Presentation
Private Placement Investor Presentation
Slide 2: Forward-looking statements
Certain matters discussed on this call may contain forward-looking statements, which are subject to risks and uncertainties. A number of factors, many of which are beyond Texas Capital Bancshares' control, could cause actual results to differ materially from future results expressed or implied by su
Slide 3: Capital Transaction
Capital Transaction Sale of common stock Private sale in "PIPE" transaction Sale to leading institutional investors Total of 5 institutions led by T Rowe Price Completed with current and new investors in 3 business days Terms 4 million shares at $14.50 per share Net proceeds of $55 million Closing o
Slide 4: Capital Ratios
Capital Ratios Assumes capital raise completed at June 30, 2008; net proceeds of $55 million. Proceeds of offering invested into Bank as equity. Additional $20 million of subordinated debt invested into Bank from Parent cash Actual at Q2 2008 Adjustments Pro forma Texas Capital Bancshares, Inc. Tang
Slide 5: Key Strategies
Key Strategies Key Strategies Dallas Fort Worth San Antonio Austin Houston Texas-based business bank Market focus - Commercial businesses - Affluent individuals Five largest MSAs Recruit premier local bankers Organic growth Strong credit culture
Slide 6: General Comments
General Comments Q2-2008 another good quarter of growth Margin stabilized during Q2-2008 at 3.65% Confident about the remainder of 2008 Texas not immune from pressures affecting other banks Management believes issues will be manageable Do not expect material increase in our credit weakness Capital w
Slide 7: Texas Economy
Texas Economy Texas economy continues to show resilience TCBI markets continue to outperform national averages DFW Houston Austin San Antonio Texas National Average Unemployment Rate 4.40% 4.40% 3.90% 4.20% 4.50% 5.50% Payroll Employment Growth 2.10% 0.70% 2.80% -0.30% 1.30% -0.54% New Home Inventor
Slide 8: Financial Summary (QTD Averages)
Financial Summary (in thousands) QTD Averages QTD Averages QTD Averages Q2 2008 Q1 2008 Q2 2007 Q2/Q1 % Change YOY % Change Loans held for investment $3,597,342 $3,483,840 $2,964,863 3% 21% Loans held for sale 246,026 171,672 191,979 43% 28% Total loans 3,843,368 3,655,512 3,156,842 5% 22% Securitie
Slide 9: Financial Summary (Period End)
Financial Summary (in thousands) Period End Period End Period End Q2 2008 Q1 2008 Q2 2007 Q2/Q1 % Change YOY % Change Loans held for investment $3,704,262 $3,493,631 $3,091,657 6% 20% Loans held for sale 328,838 239,860 176,022 37% 87% Total loans 4,033,100 3,733,491 3,267,679 8% 23% Securities 390,
Slide 10: Net Interest Margin
Net Interest Margin 2001 2002 2003 2004 2005 2006 2007 2008 Q1 2008 Q2 Net Interest Margin 0.0362 0.0328 0.0287 0.0325 0.0366 0.0385 0.0383 0.0365 0.0365 2006, 2007 & 2008 based on continuing operations
Slide 11: Yearly Earnings
Yearly Earnings 2001 2002 2003 2004 2005 2006 2007 2008 YTD Net Income 5844 7343 13834 19560 26776 28981 31353 27660 EPS 0.3 0.32 0.6 0.75 0.96 1.1 1.18 1.04 2008E 5340 2008E 1.18 1.2 Based on continuing operations. 2008 YTD Q1 & Q2 Annualized. Yellow represents range of management estimates of $30-
Slide 12: Revenue and Expense Growth
2003 2004 2005 2006 2007 Q2-2008 Non Interest Expense 48430 57340 65344 86913 98606 107066 2003 2004 2005 2006 2007 Q2-2008 Net Interest Income 53155 74742 94130 117813 140667 149518 Non Interest Income 10892 13632 12001 17042 19712 23270 Revenue and Expense Growth Operating Revenue CAGR: 25% Net In
Slide 13: Deposit and Loan Growth
2003 2004 2005 2006 2007 Q2-2008 Demand Deposits 302 398 512 514 529 611 Interest Bearing Deposits 1103 1392 1983 2555 2537 2782 Deposit and Loan Growth Loans HFI* Interest Bearing Deposits Demand Deposits * Excludes loans held for sale. Demand Deposit CAGR: 17% Total Deposit CAGR: 22% Loans Held fo
Slide 14: Loan Portfolio Statistics
Loan Portfolio Statistics Loan Collateral by Type June 30, 2008 Residential R/E Mkt Risk Com. R/E Mkt Risk Owner Occupied R/E Business Assets Highly Liquid Assets Energy Other Assets Unsecured East 0.07 0.2 0.1 0.31 0.12 0.09 0.05 0.06 Non-Pass Grade Loans By Type June 30, 2008 C&I Residential RE Re
Slide 15: Credit Quality
Credit Quality Credit experience remains good Net charge-offs of $3.6 million in Q2-2008; $6.1 million YTD through June Net charge-offs represent 40 bps for the quarter; 35 bps for YTD and 25 bps for LTM NCO's related to identified problems substantially covered with allocated reserves in 2007 Modes
Slide 16: Credit Quality
Credit Quality Reserve / Loans 1.04% .95% .77% .91% 1.20% Non-accrual loans + ORE to loans + ORE ..60 ..69% ..37% ..27% ..37% Reserve to non-accruals 2.3x 1.5x 2.3x 3.3x 3.2x Reserve to NPL 1.0x 1.3x 1.9x 2.2x 3.1x Net Charge-offs / Average Loans YTD 2008 2007 2006 2005 2004
Slide 17: Business Dynamics
Business Dynamics Texas market will provide significant opportunities to extend TCBI's growth strategy Great opportunity for banks in strong position Small market share in each major market No interest in expansion by acquisition - very poor use of capital Weakened competitors highly vulnerable Recr
Slide 18: Reaffirming 2008 Guidance
Reaffirming 2008 Guidance 2008 remains on track to meet previously announced earnings guidance of $30 million to $33 million in net income Credit quality remains strong Limited exposure to actual loss in NPAs, with minor increase after Q2-2008 Provision driven by methodology, not expectation of actu
Slide 19: Closing Comments
Closing Comments Texas remains bright spot in national economy Exploit market opportunity for people and customers Capital provides flexibility to continue expansion in a more uncertain economic environment Continued cautious economic outlook Intense focus on maintaining credit quality
Slide 20: Q & A
Q & A
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