Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q2 2006 Earnings Presentation
17 slides from Texas Capital Bancshares's earnings presentation, Jul 21, 2006
Slide 1: Earnings Release July 19, 2006
Earnings Release July 19, 2006
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 Financial highlights Net income for Q2-2006 of $6.3 million EPS for Q2-2006 of $0.24 Growth of 34% in total loans and 48% in total deposits over Q2-2005 Business dynamics Exceptionally strong loan growth in competitive environment Increasing market share without sacrificing loan qua
Slide 4: Performance Summary
Performance Summary Net income for Q2-2006 at $6.3 million Decrease of 5% from Q1-2006 and 4% Q2-2005 EPS decline of 4% to $0.24 from Q1-2006 and Q2-2005 EPS unchanged versus Q2-2005 as adjusted for FAS 123R, with increase in 123R expense to $0.02 in Q2-2006 compared to $0.01 in Q1-2006 and Q2-2005
Slide 5: Financial Review
FINANCIAL REVIEW
Slide 6: Income Statement
Income Statement (in thousands) Q2-06 Q1-06 Q4-05 Q3-05 Q2-05 Net interest income $ 31,126 $ 28,721 $ 28,461 $ 26,958 $ 24,484 Provision for loan losses 2,250 - - - - Net interest income after provision for loan losses 28,876 28,721 28,461 26,958 24,484 Non-interest income 6,859 6,072 5,986 5,790 4,
Slide 7: Performance Evaluation
Performance Evaluation Performance Drivers Net revenue growth of 9.2% from Q1-2006 Net interest income growth driven by exceptional growth in loan portfolio NIM improvement, but constrained by: Impact of rapid loan growth on funding composition Competitive pricing pressures, loan spreads to prime ra
Slide 8: Financial Summary (Period End)
Financial Summary (in thousands) Period End Period End Period End Q2 2006 Q1 2006 Q2 2005 Q2/Q1 % Change YOY % Change Loans held for investment $2,417,814 $2,263,007 $1,805,630 7% 34% Loans held for sale 164,493 130,285 120,708 26% 36% Total loans 2,582,307 2,393,292 1,926,338 8% 34% Securities 573,
Slide 9: Financial Summary (Averages)
Financial Summary (in thousands) Averages Averages Averages Averages Q2 2006 Q1 2006 Q1 2006 Q2 2005 Q2/Q1 % Change YOY % Change Loans held for investment $2,360,189 $2,360,189 $2,168,410 $1,755,311 9% 34% Loans held for sale 137,289 137,289 102,030 84,497 35% 62% Total loans 2,497,478 2,497,478 2,2
Slide 10: QTD Average Balances, Yields and Rates
QTD Average Balances, Yields and Rates (in thousands) Q2 2006 Q2 2006 Q1 2006 Q1 2006 Q2 2005 Q2 2005 Avg. Bal. Yield / Rate Avg. Bal. Yield / Rate Avg. Bal. Yield / Rate Assets Securities $ 586,548 4.76% $ 616,288 4.65% $ 733,752 4.44% Fed funds sold & liquidity investments 1,108 5.79% 3,312 4.29%
Slide 11: Deposit and Loan Growth
Deposit and Loan Growth Loans HFI* Interest Bearing Deposits Demand Deposits * Excludes loans held for sale. Demand Deposit CAGR: 45% Total Deposit CAGR: 30% Loans Held for Investment CAGR: 26% 2001 2002 2003 2004 2005 Q2-2006 Loans Held for Investment 855 1003 1230 1565 2076 2418 2001 2002 2003 200
Slide 12: Revenue and Expense Growth
Revenue and Expense Growth Operating Revenue CAGR: 32% Net Interest Income CAGR: 31% Non-interest Income CAGR: 38% Non-interest Expense CAGR: 32% Net Interest Income Non-interest Income Non-interest Expense 2001 2002 2003 2004 2005 Q2-2006 Non Interest Expense 29432 35370 48430 57340 81030 101650 20
Slide 13: Credit Quality
Credit Quality Credit quality remains strong Net charge-offs of $1.5 million in Q2-2006 Loss not inconsistent with full-year guidance Nature of business that losses can be variable on quarterly basis Losses relate to two specific credits - not indicative of general weakness in portfolio NCO ratio -
Slide 14: Credit Quality
Credit Quality Reserve / Loans .81% .91% 1.20% 1.44% 1.45% NPL to Loans .32% .41% .39% .83% .29% Reserve to NPL 2.5x 2.2x 3.1x 1.7x 5.0x Reserve to non-accruals 3.9x 3.3x 3.2x 1.7x 5.2x Non-accrual loans to loans .21% .27% .37% .83% .28% Net Charge-offs / Average Loans YTD Q2-2006 2005 2004 2003 200
Slide 15: Earnings Guidance
Earnings Guidance Revision in Earnings Guidance for 2006 Revising guidance to $29 million to $31 million from $30.5 million to $33 million Assumptions Growth in loans and deposits with increases > 20% Margin essentially flat without improvement in DDA funding mix Provision and NCOs consistent with p
Slide 16: Closing Comments
Closing Comments Closing comments Strong growth continues Economic outlook positive Confident of continued growth in 2006
Slide 17: Q & A
Q & A
Texas Capital Bancshares — Q2 2006 Earnings Presentation on 6ix