Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q3 2016 Earnings Presentation
19 slides from Texas Capital Bancshares's earnings presentation, Oct 20, 2016
Slide 1: TCBI Q3 2016 Earnings
TCBI Q3 2016 Earnings October 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
3 Opening Remarks & Financial Highlights Core Earnings Power Strong Balanced Growth Credit Quality • Solid Q3-2016 growth in average traditional LHI balances coming from strong Q2-2016 growth • Significant growth in average balances in MFLs consistent with seasonally strong quarter • MCA balances in
Slide 4: Energy Update
4 Energy Update • Outstanding energy loans represented 6% of total loans, or $1.1 billion, at Q3-2016 compared to $1.1 billion at Q2-2016 • E&P portfolio concentrated in long-lived production with low lifting costs, approximately 60% oil and 40% gas • TCBI’s energy loans other than reserve-based E&P
Slide 5: Houston Market Risk Real Estate
Houston Market Risk Real Estate 5 (in thousands except % data) Q3 2016 % of Total Houston Market Risk CRE Q2 2016 % of Total Houston Market Risk CRE Apartment buildings $206,407 24% $230,378 32% Commercial buildings(1) 171,914 20% 150,554 18% Shopping center/mall buildings 124,593 14% 103,094 13% Ho
Slide 6: Update on Geographic Diversification
8 , 7 7 6 9 , 4 9 6 5 , 9 6 3 1 2 , 1 8 2 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Texas Regions National Businesses $ M i l l i o n s Loans Deposits 6 Update on Geographic Diversification Note: (1) Texas Regions loan balances include balances from the Energy business (2) Unemployment data thr
Slide 7: Net Interest Income & Margin
Net Interest Income & Margin 7 • Net interest income growth of 6% from Q2-2016 and 17% from Q3-2015 • Adjusted NIM net of effect of liquidity is 3.68% • Strong MFL balances continue to benefit NII with small negative to NIM • Loan fees, including syndication fees, continued at a normalized level • T
Slide 8: Loan Growth
Loan Growth 8 • Broad-based growth in average traditional LHI – Growth of $315.3 million (3%) from Q2-2016 and $1.3 billion (11%) from Q3-2015 • Consistent with expectations, moderated growth with period-end balance $70.8 million higher than Q3-2016 average balance • Increase in MCA balances of $273
Slide 9: Deposit Growth
Deposit Growth 9 Average Balance Trends ($B) Funding Costs • Core funding costs – deposits and borrowed funds decreased by 1 bp compared to decrease in LHI yields of 1 bp • Continued deposit growth consistent with strategic opportunity to build deposit base ‐ Increase in linked quarter deposits, wit
Slide 10: Non-interest Expense
Non-interest Expense 10 • 51.7% for Q3-2016 compared to 55.1% for Q2- 2016 • Q3-2016 efficiency ratio of 51.7% is not new run rate; seasonally Q3 and Q4 have more favorable ratios • Continued build out expenses with new LOB’s, as well as other critical areas supporting regulatory compliance Quarterl
Slide 11: Performance Summary - Quarterly
Performance Summary - Quarterly 11 (in thousands) Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Net interest income $ 166,739 $ 157,069 $ 144,783 $ 142,188 $ 142,048 Non-interest income 16,716 13,932 11,297 11,320 11,380 Net revenue 183,455 171,001 156,080 153,508 153,428 Provision for credit losses 22,00
Slide 12: 2016 Outlook
2016 Outlook 12 Business Driver 2016 Outlook v. 2015 Results Comments & Changes since July 20, 2016 Average LHI High single to low double-digit percent growth – Average LHI – Mortgage Finance Low single-digit percent growth – Loans held for sale (MCA) Greater than $300 million average outstandings –
Slide 13: Asset Quality
Asset Quality 13 • Total credit cost of $22.0 million for Q3-2016, compared to $16.0 million in Q2-2016 and $13.8 million in Q3-2015 • NCOs $7.4 million, or 24 bps, in Q3-2016 compared to $12.0 million, or 39 bps, in Q2-2016 and 8 bps in Q3-2015 • NPL ratio at .96% and at manageable level • $1.8 mil
Slide 14: Closing Comments
Closing Comments • Strong core earnings in Q3-2016 • Continue to proactively manage energy portfolio as well as overall credit; remain confident in underwriting standards, portfolio composition and reserve level • Change in provision guidance includes Q3-2016 and expected level in Q4-2016 • Seasonal
Slide 15: Q&A
Q&A 15
Slide 16: Appendix
Appendix 16
Slide 17: Average Balances, Yields & Rates - Quarterly
Average Balances, Yields & Rates - Quarterly 17 (in thousands) Q3 2016 Q2 2016 Q3 2015 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 26,615 3.52% $ 27,661 3.61% $ 33,520 3.60% Liquidity assets 3,561,356 .51% 3,184,127 .52% 2,845,855 .25% Loans held for sale 430,8
Slide 18: Average Balance Sheet - Quarterly
Average Balance Sheet - Quarterly 18 (in thousands) QTD Average Q3/Q2 % Change YOY % ChangeQ3 2016 Q2 2016 Q3 2015 Total assets $21,689,559 $20,438,470 $18,526,759 6% 17% Loans held for sale 430,869 157,898 570 173% N/M Loans held for investment 12,591,561 12,276,272 11,302,248 3% 11% Loans held for
Slide 19: Period End Balance Sheet
Period End Balance Sheet 19 (in thousands) Period End Q3/Q2 % Change YOY % ChangeQ3 2016 Q2 2016 Q3 2015 Total assets $22,216,388 $21,080,994 $18,666,705 5% 19% Loans held for sale 648,684 221,347 1,062 193% N/M Loans held for investment 12,662,394 12,502,513 11,562,828 1% 10% Loans held for investm
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