Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q1 2023 Earnings Presentation
18 slides from Texas Capital Bancshares's earnings presentation, Apr 20, 2023
Slide 1: Q1-2023 Earnings
Q1-2023 Earnings April 20, 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 Total Shareholder’s Equity / Unrealized Losses5 On-hand cash liquidity is $3.6 billion, or Peer Medians 8.0 x 13% of total assets TCBI 6.7 x Cash & Securities of $8.0 billion G-SIBs1 Cat II – IV2 Peers3 Q1 2023 7.0 x constitutes 28
Slide 5: Financially Resilient Balance Sheet
Financially Resilient Balance Sheet CET1 Ratio & Total Capital Ratio Tangible Common Equity / Tangible Assets8 Peer leading capital levels: CET1 Ratio Total Capital Ratio CET1 of 12.4%, ranked 2nd relative to 12.0% 9.7% all large U.S. financial services firms7 18.0% 16.9% 10.0% 16.0% 15.1% Tan
Slide 6: 2021 Strategic Update Performance Drivers
2021 Strategic Update Performance Drivers Where We Where We Where We Where We Started Are Going Started Are Going FY FY FY YTD FY FY FY YTD Income Statement 2020 2021 2022 2023 2025 Performance Metrics 2020 2021 2022 2023 2025 Investment Banking and Trading Income 2.2% 2.7% 2.9% 6.9% ~10% Return on
Slide 7: Financial Performance // Income Statement
Financial Performance // Income Statement Adjusted Adjusted Non-GAAP Adjustments12 ($M) 2022 Financial Highlights ($M) (Non-GAAP)12 (Non-GAAP)12 Non-interest Revenue 349.5 2022 2022 Q1 2022 Q4 2022 Q4 2022 Q1 2023 Gain on Sale of BDCF 248.5 Net Interest Income $875.8 $875.8 $183.5 $247.6 $247.6 $235
Slide 8: Financial Performance // Balance Sheet Highlights
Financial Performance // Balance Sheet Highlights Balance Sheet Highlights ($M) Ending Balances Q1 2022 Q4 2022 Q1 2023 QoQ Q1 2022 Q4 2022 Q1 2023 QoQ Assets Liabilities Cash and Equivalents 5,372 5,012 3,650 (27%) Non-interest Bearing Deposits 13,435 9,618 9,501 (1%) Total Securities 3,642 3,585 4
Slide 9: Loan Portfolio Composition
Loan Portfolio Composition Period End Loan Trends (excl. PPP) ($B) Utilization Rates15 59% $3.1 52% $3.1 57% LTM Average $2.9 55% 53% $10.0 $10.1 $10.8 $9.4 51% $8.1 51% $4.9 $5.1 $5.0 $5.2 $5.3 49% 47% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 C&I Loans6 Real E
Slide 10: Deposit and Funding Composition
Deposit and Funding Composition Average Deposit Trends ($B) Funding base continuing multi-year $28.1 Q1 2023 EOP transition to target state composition $25.0 $25.6 $24.9 $5.7 $23.7 Indexed deposits reduced by $842 $3.6 $2.9 $22.2 $4.3 $2.2 million or 34% QoQ and now $1.6 comprise 7% of the total
Slide 11: Net Interest Income Sensitivity
Net Interest Income Sensitivity TCBI NII Sensitivity ($M) Standard Model Assumptions18 $140 Earnings at risk from changes in interest 100bp & 200bp Parallel Shocks 15.0% rates declined this quarter 10.0% $77 $67 $850 million of securities purchased Loan Balances: Static 14.5% during the quarte
Slide 12: Q1-2023 Earnings Overview
Q1-2023 Earnings Overview Net Interest Income ($M) Net Interest Margin ($M) $11.8 $22.8 $2.6 3.26% 3.33% 3.05% $(23.9) $(2.2) 2.68% $(23.4) 2.23% $247.6 $235.3 $239.1 $247.6 $235.3 $183.5 $205.5 Q4 2022 Loan Volume Loan Yield Loan Fees Investment Deposits Borrowings Q1 2023 Q1 2022 Q2 2022 Q3 2022 Q
Slide 13: Q1-2023 Earnings Overview
Q1-2023 Earnings Overview Allowance for Credit Loss Reserve Ratios Asset Quality Ratios Reserves to loans coverage ratio as a 2.79% percent of LHI in the top 20 percent 2.66% 5.2x 2.51% 2.45% among Peers3 1.60% 1.58% 2.20% ACL on Loans, excl. Mortgage Finance 1.27% NPAs/Total Assets 3.6x increas
Slide 14: Q1-2023 Earnings Overview
Q1-2023 Earnings Overview Regulatory Capital Levels 2023 Target Total Regulatory Capital remains near all 17.70% 16.86% time highs 15.68% 15.25% 14.42% 3.03% 2.83% Total Capital Ratio of 16.86%, in the 2.65% 2.66% top decile of the peer group3, and 2.51% 1.67% 1.61% CET1 Ratio of 12.42% in Q1 20
Slide 15: Full Year 2023 Guidance
Full Year 2023 Guidance FY 2022 Full Year 2023 Guidance Commentary Adjusted (Non-GAAP)12 Guidance Forward curve21 assumes a peak Fed Total Revenue, Adjusted 12 $976.8 Low double-digit % growth Funds of 5.00% and a 2023 exit rate of 4.25% Assumes tax rate of 25% in 2023 12 Non-Interest Expense, A
Slide 16: 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 Q4 2022 2. As defined by the Federal Reserve; Category II – U.S. commercial banks with ≥ $700
Slide 17: Non-GAAP Reconciliation // Return on Average Tangible Common Equity (ROATCE)
Non-GAAP Reconciliation // Return on Average Tangible Common Equity (ROATCE) ROATCE is a non-GAAP financial measure. ROATCE represents the measure of net income available to common shareholders as a percentage of average tangible common equity. ROATCE is used by management in assessing financial per
Slide 18: Non-GAAP Reconciliation // Adjusted Earnings & Ratios
Non-GAAP Reconciliation // Adjusted Earnings & Ratios Adjusted line items are non-GAAP financial measures that management ($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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