Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q2 2022 Earnings Presentation
17 slides from Texas Capital Bancshares's earnings presentation, Jul 21, 2022
Slide 1: Q2-2022 Earnings
Q2-2022 Earnings July 21, 2022 © 2022 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, our financial condition, results of operations, business plans and future performance. These s
Slide 3: Our Distinct Opportunity
Our Distinct Opportunity Serving strong core Texas markets with expanded coverage and a complete set of capabilities Improving client relevance and diversifying our revenue base Attracting high-quality talent with significant experience Operating from a de-risked position of financial strength 3
Slide 4: Strategic Performance Drivers Announced September 1st
Strategic Performance Drivers Announced September 1st Where We Where We Where We Where We Started Are Going Started Are Going Income Statement 2020 2021 YTD 2022 2025 Balance Sheet 2020 2021 YTD 2022 2025 Investment Banking and Trading FY Average Liquidity Assets4 2.5% 2.8% 3.5% ~10% 28% 37% 29% >20
Slide 5: Our Path Forward
Our Path Forward Operating Model Aligned to our Clear Strategic Direction and Committed to Financial Resilience Vision, Grounded in our Values Fortitude to Deliver Organized Around Client Delivery Expanding Coverage Risk Management Product & Industry Specialization Business Banking Granular Ri
Slide 6: Expanding Coverage and Enhanced Product and Services
Expanding Coverage and Enhanced Product and Services Defined risk appetite, efficient underwriting, and Business focused client selection process Banking Leadership in place across each market; 80% of Financial Performance (Period End) Q2’ 21 Q3’ 21 Q4’ 21 Q1’ 22 Q2’ 22 YoY targeted front-line p
Slide 7: Focused on the Future
Focused on the Future Current 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 Financial business and investing aggressively banking capabilities fo
Slide 8: Financial Performance
Financial Performance Continued execution on defined growth initiatives coupled with rising Financial Highlights ($M) Q2 2021 Q1 2022 Q2 2022 market rates drove an increase in total revenue of 14% QoQ Net Interest Income $189.5 $183.5 $205.5 Strategic focus on expanding products and services pro
Slide 9: Loan Portfolio
Loan Portfolio Period End Loan Trends (excl. PPP) Utilization Rates10 61% 50% 59% LTM Average 57% $12.5B 55% $10.5B $11.0B 52% $9.3B $9.9B 53% $5.6B 51% $5.2B $4.8B $4.9B $5.1B 49% 47% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 C&I Loans7 Real Estate Loans Averag
Slide 10: Deposits and Fundings
Deposits and Fundings Average Deposit Trends Funding base continuing multi-year transition Q2 2022 EOP $33.5B to target state composition $32.9B $32.0B $30.1B $30.6B $28.1B NIB balances began gradual repositioning $25.0B $25.4B into interest-bearing accounts $13.2B $14.4B $15.1B Mortgage Finan
Slide 11: Net Interest Income Sensitivity
Net Interest Income Sensitivity TCBI NII Sensitivity Standard Model Assumptions $149M The asset sensitivity profile of the bank has 100bp & 200bp Parallel Shocks $163M increased QoQ as a majority of loans rose off their floors during the quarter Loan Balances: Static $79M $750 million in fixed
Slide 12: Q2-2022 Earnings Overview
Q2-2022 Earnings Overview Net Interest Income Net Interest Margin $3.2M $20.8M $0.1M $9.7M -$6.9M -$4.9M 2.68% $205.5M 2.22% 2.12% $183.5M 2.02% 2.19% 2.23% 2.04% 2.11% Q1 2022 Loan Volume Loan Yield Loan Fees Investment Deposits Borrowings Q2 2022 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Securities & 2020 2020 2021
Slide 13: Q2-2022 Earnings Overview
Q2-2022 Earnings Overview Non-interest Expense Regulatory Capital Levels Expense base continues to be repositioned into front, middle, and back-office structure consistent $164.3M Medium-term $153.1M CET1 Target with future scale $149.1M 12% $17.3M 15.68% Capital remains above historical average
Slide 14: Full Year Guidance
Full Year Guidance Full Year 2022 Guidance Forward curve assuming 2022 terminal rate of 3.75% Fed Funds Average MFLs11 Decline Low 30s Decline The expected realization of financial targets ahead of prior guidance is due to: The balance sheet transformation weighted toward C&I clients Revenue G
Slide 15: Appendix // Footnotes
Appendix // Footnotes 1. Total Revenue in 2020 and 2021 excludes Correspondent Lending; See slide: Appendix // Correspondent Lending Historical Contribution 2. Includes service charges on deposit accounts, as well as fees related to our commercial card program, merchant transactions, wire fees, and
Slide 16: Appendix // Correspondent Lending Historical Contribution
Appendix // Correspondent Lending Historical Contribution Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 ($M) Net Interest Income 24.5 1.5 2.8 1.4 30.2 0.9 0.3 0.0 0.0 1.2 Non-interest Income Brokered Loan Fees 2.6 2.8 5.8 3.9 15.1 2.2 0.7 0.0 0.0 2.9 Servicing Incom
Slide 17: Appendix // Return on Average Tangible Common Equity (ROTCE)
Appendix // Return on Average Tangible Common Equity (ROTCE) ROTCE is a non-GAAP financial measure. ROTCE represents the measure of net income available to common shareholders as a percentage of average tangible common equity. ROTCE is used by management in assessing financial performance and use of
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