Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q2 2008 Earnings Presentation
18 slides from Texas Capital Bancshares's earnings presentation, Jul 18, 2008
Slide 1: Earnings Release July 16, 2008
Earnings Release July 16, 2008
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: Opening Comments
Opening Comments Another good quarter of growth Margin stabilized during quarter; no further deterioration from Q1-2008 Modestly adjusting guidance for net income to a range of $30 million to $33 million Confident about the remainder of 2008 Texas not immune from pressures affecting other banks, but
Slide 4: Texas Economy
Texas Economy Texas economy continues to show resilience TCBI markets continue to outperform national averages Source: FRB Dallas for May 2008 & Metrostudy DFW Houston Austin San Antonio Texas Average National Average Unemployment Rate 4.40% 4.40% 3.90% 4.20% 4.50% 5.50% Payroll Employment Growth 2.
Slide 5: Financial Highlights
Financial Highlights Net income and EPS Net income of $5.8 million decreased 28% compared to Q1-2008; 31% decrease compared to Q2-2007 EPS of $.22 decreased 27% compared to Q1-2008; 29% decrease compared to Q2-2007 Growth in loans Held for investment -3% increase over Q1-2008; 21% increase compared
Slide 6: Financial Review
FINANCIAL REVIEW
Slide 7: Performance Evaluation
Performance Evaluation Performance Drivers Net income of $5.8 million, a decrease of 28% from Q1-2008; 31% decrease compared to Q2-2007 Improved operating leverage Net interest income increase of 4.3% from Q1-2008; increase of 11.7% from Q2-2007 Non-interest income increase of 4.7% from Q1-2008; 6.5
Slide 8: Income Statement
Income Statement (in thousands) Q2-08 Q1-08 Q4-07 Q3-07 Q2-07 Net interest income $ 38,160 $ 36,599 $ 37,531 $ 36,531 $ 34,170 Provision for loan losses 8,000 3,750 9,300 2,000 1,500 Net interest income after provision for loan losses 30,160 32,849 28,231 34,531 32,670 Non-interest income 5,952 5,68
Slide 9: 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 10: 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 11: QTD Average Balances, Yields and Rates
QTD Average Balances, Yields and Rates (in thousands) Q2 2008 Q2 2008 Q1 2008 Q1 2008 Q2 2007 Q2 2007 Avg. Bal. Yield / Rate Avg. Bal. Yield / Rate Avg. Bal. Yield / Rate Assets Securities $ 404,574 4.76% $ 428,401 4.78% $ 483,834 4.81% Fed funds sold & liquidity investments 12,230 2.27% 5,965 3.51%
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 Non-Pass Grade Loans June 30, 2008 By Type June 30, 2008 Highly Liuid Assis, 12% RIE, 10%
Slide 15: Credit Quality
Credit Quality Credit experience remains good Net charge-offs of $3.6 million in Q2-2008; $6.1 million YTD 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 Increase in non-pe
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: Closing Comments
Closing Comments Another good quarter of growth Continued cautious economic outlook Guidance changed to range of $30 million to $33 million Intense focus on maintaining credit quality Exploit market opportunity for people and customers
Slide 18: Q & A
Q & A
Texas Capital Bancshares — Q2 2008 Earnings Presentation on 6ix