Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q2 2016 Earnings Presentation
19 slides from Texas Capital Bancshares's earnings presentation, Jul 20, 2016
Slide 1: TCBI Q2 2016 Earnings
TCBI Q2 2016 Earnings July 20, 2016
Slide 2: Forward-looking statements
Certain matters discussed within or in connection with these materials may contain “forward-looking statements” as defined in federal securities laws, which are subject to risks and uncertainties and are based on Texas Capital’s current estimates or expectations of future events or future results. T
Slide 3: Opening Remarks & Financial Highlights
Opening Remarks & Financial Highlights • Solid Q2-2016 growth in traditional LHI balances in continuing highly competitive C&I market Strong • Significant growth in average balances in MFLs consistent with seasonally strong quarter Balanced • MCA balances increasing at pace consistent with guidance
Slide 4: Energy Update
Energy Update • Outstanding energy loans represented 6% of total loans, or $1.1 billion, at Q2-2016 compared to $1.1 billion at Q1-2016 • Allocated reserve of $58.6 million represents 5% of energy loans • E&P portfolio concentrated in long-lived production with low lifting costs, 60% oil and 40% gas
Slide 5: Houston Market Risk Real Estate
Houston Market Risk Real Estate % of Total % of Total Houston Houston (in thousands except % data) Market Risk Market Risk Q2 2016 CRE Q1 2016 CRE Apartment buildings $230,378 28% $241,189 32% Commercial buildings(1) 150,554 18% 144,359 18% Shopping center/mall buildings 103,094 13% 103,764 13% Hote
Slide 6: Update on Geographic Diversification
Update on Geographic Diversification 12,000 Unemployment Major Texas Metro Areas Rate(2) 11,063 10,000 Austin-Round Rock 2.9% DFW-Arlington 3.5% 9,254 8,730 8,000 Houston metro 4.8% San Antonio 3.4% $ Millions 6,000 While cities directly involved in the oil/gas industry 5,641 • are more exposed to t
Slide 7: Net Interest Income & Margin
Net Interest Income & Margin Earning Asset & Margin Trends Quarterly Change $20.0 9.00% $3.2 NII ($MM) NIM (%) $18.0 $3.5 $3.0 8.00% $2.9 $144.8 Q1 2016 3.13% $2.3 $16.0 $16.7 4.4 Increase in loan fees .09 7.00% $15.4 $15.6 9.6 Increase in LHI & LHS balances - $15.2 $15.3 $14.0 6.00% (.4) Decrease i
Slide 8: Loan Growth
Loan Growth Average Balance Trends ($B) Total Loan Composition ($17.8 Billion at 6/30/16) $18.0 4.32% 4.26% 4.21% 4.25% 4.35% 5.00% $16.0 $4.4 $14.0 $4.6 $4.0 $3.7 $3.7 3.00% $12.0 Portfolio Balances ($B) $11.9 $12.3 $10.0 $11.3 $11.7 1.00% $10.9 $8.0 -1.00% $6.0 $4.0 -3.00% $2.0 $- -5.00% Q2 2015 Q
Slide 9: Deposit Growth
Deposit Growth Average Balance Trends ($B) Funding Costs 0.50% $16.0 $7.8 $6.8 $6.7 $14.0 0.40% $6.8 $6.6 0.32% $12.0 0.30% 0.26% Deposit Balances ($B) 0.25% 0.30% $10.0 0.24% $8.0 $9.0 $8.9 $9.1 $8.3 0.20% 0.23% $7.8 0.21% $6.0 0.17% 0.18% $4.0 0.16% 0.10% $2.0 $- 0.00% Q2 2015 Q3 2015 Q4 2015 Q1 2
Slide 10: Non-interest Expense
Non-interest Expense Quarterly Change Efficiency Ratio Increase/ • 55.1% for Q2-2016 compared to 55.6% for Q1- Non-interest expense ($MM) (Decrease) 2016 Q1 2016 $86.8 • Linked quarter increase in salaries expense Salaries and employee benefits – related to stock primarily related to effect of chang
Slide 11: Performance Summary - Quarterly
Performance Summary - Quarterly (in thousands) Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Net interest income $ 157,069 $ 144,783 $ 142,188 $ 142,048 $ 142,285 Non-interest income 13,932 11,297 11,320 11,380 12,771 Net revenue 171,001 156,080 153,508 153,428 155,056 Provision for credit losses 16,000 3
Slide 12: 2016 Outlook
2016 Outlook Business 2016 Outlook v. 2015 Results Comments & Changes since April 20, Driver 2016 Average LHI High single to low double-digit percent growth – Average LHI – Increased from flat to low single-digit percent Low single-digit percent growth Mortgage Finance growth Loans held for sale Gre
Slide 13: Asset Quality
Asset Quality Non-accrual loans Q2 2016 NCO / Average Traditional LHI Commercial $ 162,625 1.40% Construction – 1.20% Real estate 2,804 1.00% Consumer – 0.80% Equipment leases – 0.60% 0.40% 0.32% Total non-accrual loans 165,429 0.20% 0.10% 0.07% 0.07% 0.10% 0.00% Non-accrual loans as % of LHI 1.32%
Slide 14: Closing Comments
Closing Comments • Strong traditional LHI growth in Q2-2016 and in line with full-year guidance • Continue to proactively manage energy portfolio as well as overall credit; remain confident in underwriting standards, portfolio composition and current reserve level; pleased with minor change in level
Slide 15: Q&A
O&A 5 © TEXAS CAPITAL BANCSHARES, INC:
Slide 16: Appendix
Appendix © TEXAS CAPITAL BANCSHARES, INC:
Slide 17: Average Balances, Yields & Rates - Quarterly
Average Balances, Yields & Rates - Quarterly (in thousands) Q2 2016 Q1 2016 Q2 2015 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 27,661 3.61% $ 29,102 3.66% $ 36,508 3.62% Liquidity assets 3,184,127 .52% 2,953,589 .50% 2,304,422 .25% Loans held for sale 157,898
Slide 18: Average Balance Sheet - Quarterly
Average Balance Sheet - Quarterly (in thousands) QTD Average Q2/Q1 % YOY % Q2 2016 Q1 2016 Q2 2015 Change Change Total assets $20,438,470 $19,108,976 $18,233,826 7% 12% Loans held for sale 157,898 126,084 − 25% 100% Loans held for investment 12,276,272 11,910,788 10,941,029 3% 12% Loans held for inv
Slide 19: Period End Balance Sheet
Period End Balance Sheet (in thousands) Period End Q2/Q1 % YOY % Q2 2016 Q1 2016 Q2 2015 Change Change Total assets $21,080,994 $20,210,893 $17,818,030 4% 18% Loans held for sale 221,347 94,702 − 134% 100% Loans held for investment 12,502,513 12,059,849 11,123,325 4% 12% Loans held for investment, m
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