Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q4 2015 Earnings Presentation
24 slides from Texas Capital Bancshares's earnings presentation, Jan 20, 2016
Slide 1: TCBI Q4 2015 Earnings
TCBI Q4 2015 Earnings January 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 Q4-2015 growth in traditional LHI balances in continuing highly competitive C&I market Strong • Expected lower average balances in mortgage finance loans (“MFLs”) with significant quarter-end surge Balanced in balances as a result of backlog from new co
Slide 4: Energy Update
Energy Update • Outstanding energy loans represented 7% of total loans, or $1.2 billion at December 31, 2015 • TCBI’s energy loans primarily consist of engineered reserve-based loans to upstream E&P operators, which represented 5% of total loans at December 31, 2015 ‐ E&P - 5% with 61% oil and 39% g
Slide 5: Energy Update continued
Energy Update continued • Energy non-accruals ‐ 12/31/2015 - $120.4 million ‐ 9/30/2015 - $36.9 million • Risk grade migration occurring in Q4-2015; will likely continue to occur and have an impact on provisions that reflects the duration and depth of the cycle ‐ Beginning in Q4-2014 and through 201
Slide 6: Houston Market Risk Real Estate
Houston Market Risk Real Estate % of Total % of Total Houston Houston (in thousands except % data) Market Risk Market Risk Q4 2015 CRE Q3 2015 CRE Apartment buildings $214,863 32% $144,235 23% Commercial buildings 90,766 14% 130,891 22% Shopping center/mall buildings 102,179 15% 96,490 16% Hotel/mot
Slide 7: Expansion of Mortgage Finance Services
Expansion of Mortgage Finance Services • Launched Mortgage Correspondent Aggregation (“MCA”) business in our Mortgage Finance (“MF”) group in late Q3- 2015 ‐ Balance of loans held for sale (“LHS”) was $86.1 million at quarter-end, with average balance of $24.7 million and yield over 3.8% ‐ On-boardi
Slide 8: Net Interest Income & Margin
Net Interest Income & Margin Quarterly Change Annual Change NII ($MM) NIM (%) NII ($MM) NIM (%) $477.0 YTD 2015 3.78% $142.0 Q3 2015 3.12% 1.7 Increase in liquidity (.45) .1 Increase in liquidity (.10) (25.6) Decrease in LHI loan yields (.14) (1.2) Decrease in LHI loan yields (.02) (7.6) Decrease in
Slide 9: Loan Growth
Loan Growth Average Balance Trends ($B) Total Loan Composition ($16.7 Billion at 12/31/15) $18.0 4.40% 4.31% 4.32% 4.26% 4.21% 5.00% $16.0 $14.0 $4.6 $4.0 $3.7 3.00% $3.7 $12.0 $3.5 Portfolio Balances ($B) $10.0 $11.3 $11.7 1.00% $10.5 $10.9 $9.9 $8.0 -1.00% $6.0 $4.0 -3.00% $2.0 $- -5.00% Q4 2014 Q
Slide 10: Deposit Growth
Deposit Growth Average Balance Trends ($B) Funding Costs 0.50% $16.0 $6.8 $14.0 0.40% $6.8 $6.6 $12.0 $5.6 $5.0 0.28% 0.26% 0.26% Deposit Balances ($B) 0.25% 0.30% $10.0 0.24% $8.0 $9.0 $8.0 $8.3 0.20% $7.4 $7.8 $6.0 0.17% 0.17% 0.17% 0.18% $4.0 0.16% 0.10% $2.0 $- 0.00% Q4 2014 Q1 2015 Q2 2015 Q3 2
Slide 11: Non-interest Expense
Non-interest Expense Quarterly Change Annual Change Increase/ Increase/ Non-interest expense ($MM) (Decrease) Non-interest expense ($MM) (Decrease) Q3 2015 $81.7 YTD 2014 $285.1 Salaries and employee benefits – related to stock price changes 0.4 Salaries and employee benefits – related to stock Sala
Slide 12: Performance Summary - Quarterly
Performance Summary - Quarterly (in thousands) Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Net interest income $ 142,188 $ 142,048 $ 142,285 $ 130,009 $ 127,582 Non-interest income 11,320 11,380 12,771 12,267 11,226 Net revenue 153,508 153,428 155,056 142,276 138,808 Provision for credit losses 14,000 1
Slide 13: Performance Summary - Annual
Performance Summary - Annual (in thousands) 2015 2014 2013 2012 2011 Net interest income $ 556,530 $ 476,965 $ 419,513 $ 376,879 $ 302,937 Non-interest income 47,738 42,511 44,024 43,040 32,232 Net revenue 604,268 519,476 463,537 419,919 335,169 Provision for credit losses 53,250 22,000 19,000 11,50
Slide 14: 2016 Outlook
2016 Outlook Business Driver 2016 Outlook v. 2015 Results Average LHI High single to low double-digit percent growth Average LHI – Mortgage Flat to low single-digit percent growth Finance Average Deposits High single to low double-digit percent growth Net Revenue Mid to high-teens percent growth Net
Slide 15: Asset Quality
Asset Quality Non-accrual loans Q4 2015 NCO / Average Traditional LHI Commercial $ 138,658 1.40% Construction 16,667 1.20% Real estate 19,312 1.00% Consumer – 0.80% 0.58% Equipment leases 5,151 0.60% Total non-accrual loans 179,788 0.40% 0.20% 0.10% 0.07% 0.07% 0.10% 0.00% Non-accrual loans as % of
Slide 16: EPS Growth
EPS Growth EPS Growth (5-yr CAGR of 24%) $3.50 $3.00 $3.00 $0.78 $0.70 $2.50 $2.72 $2.00 $0.75 $0.78 $1.98 $1.50 $0.76 $0.71 $1.00 $1.00 $0.50 $0.70 $0.60 $- 2010 2011 2012 2013 2014 2015 2,300,000 $150 million 1,875,000 January Stock common shares preferred shares 2,523,128 November Offerings Augus
Slide 17: Closing Comments
Closing Comments • Traditional LHI growth experienced in 2015 was in line with guidance; despite continued discipline related to CRE and energy, still planning for solid growth in 2016 • Aggressively managing energy portfolio; remain confident in underwriting standards, portfolio composition and cur
Slide 18: Q&A
Q&A 18 © TEXAS CAPITAL BANCSHARES, INC:
Slide 19: Appendix
Appendix © TEXAS CAPITAL BANCSHARES, INC:
Slide 20: Average Balances, Yields & Rates - Quarterly
Average Balances, Yields & Rates - Quarterly (in thousands) Q4 2015 Q3 2015 Q4 2014 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 30,802 3.59% $ 33,520 3.60% $ 42,515 3.80% Liquidity assets 3,457,063 .27% 2,845,855 .25% 882,001 .25% Loans held for sale 24,658 3.8
Slide 21: Average Balances, Yields & Rates - Annual
Average Balances, Yields & Rates - Annual (in thousands) 2015 2014 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 35,160 3.65% $ 49,200 3.98% Liquidity assets 2,708,352 .26% 444,673 .25% Loans held for sale 6,359 3.82% – – Loans held for investment, mortgage finance 3,992,548 3.00% 2,
Slide 22: Average Balance Sheet - Quarterly
Average Balance Sheet - Quarterly (in thousands) QTD Average Q4/Q3 % YOY % Q4 2015 Q3 2015 Q4 2014 Change Change Total assets $19,249,277 $18,532,227 $14,631,360 4% 32% Loans held for sale 24,658 570 − N/M 100% Loans held for investment 11,693,464 11,302,248 9,921,611 3% 18% Loans held for investmen
Slide 23: Average Balance Sheet - Annual
Average Balance Sheet - Annual (in thousands) YTD Average 2015 2014 YOY % Change Total assets $18,227,103 $13,016,901 40% Loans held for sale 6.359 − 100% Loans held for investment 11,113,520 9,265,725 20% Loans held for investment, mortgage finance 3,992,548 2,948,938 35% Total loans held for inves
Slide 24: Period End Balance Sheet
Period End Balance Sheet (in thousands) Period End Q4/Q3 % YOY % Q4 2015 Q3 2015 Q4 2014 Change Change Total assets $18,909,139 $18,665,995 $15,905,713 1% 19% Loans held for sale 86,075 1,062 − N/M 100% Loans held for investment 11,745,674 11,562,828 10,154,887 2% 16% Loans held for investment, mort
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