Texas Capital Bancshares, Inc. · NASDAQ:TCBI

Texas Capital Bancshares — Q4 2013 Earnings Presentation

21 slides from Texas Capital Bancshares's earnings presentation, Jan 23, 2014

  1. Slide 1: TCBI Q4 2013 Earnings

    Exhibit 99.2 TCBI Q4 2013 Earnings January 22, 2014

  2. Slide 2: Forward-looking statements

    Certain matters discussed on this call may contain forward-looking statements, which are subject to risks and uncertainties and are based on Texas Capital’s current estimates or expectations of future events or future results. Texas Capital is under no obligation, and expressly disclaims such obliga

  3. Slide 3: Opening Remarks

    Opening Remarks • Exceptional growth in loans and deposits for 2013 • Capital raising consistent with market opportunity for growth • Continued improvement in NPAs with low level of charge-offs for the year • 2013 non-interest expense includes hiring foundation of market leading talent supporting 20

  4. Slide 4: Financial Review

    Financial Review Net Income – Decrease in net income of 9% compared to Q3-2013; full year net income consistent with 2012 – Profitability – ROA and ROE remained strong, despite decrease in net income Operating Leverage, Core Earnings Power & NIM – Net Revenue • 3% increase from Q3-2013 • 8% growth f

  5. Slide 5: Financial Review

    Financial Review Loan Growth – Broad-based growth in traditional LHI (excluding Mortgage Finance) • Growth of $435.1 million from Q3-2013 and $1.7 billion from Q4-2012 • Period end balance $343.7 million over average balance for the quarter • Averages increased 5% from Q3-2013 and 22% from Q4-2012 –

  6. Slide 6: Financial Review

    Financial Review Funding – Funding profile optimal with exceptional DDA and total deposit growth • Average DDA increased 5% from Q3-2013 and 40% from Q4-2012 • Total average deposits increased 5% from Q3-2013 and 31% from Q4-2012 – Total deposit cost stable at 17 bps Credit Costs – Total credit cost

  7. Slide 7: Income Statement - Quarterly

    Income Statement - Quarterly Q4-13 Q3-13 Q2-13 Q1-13 Q4-12 Net interest income $ 111,475 $ 108,776 $ 101,220 $ 98,042 $ 101,155 Non-interest income 11,184 10,431 11,128 11,281 12,836 Net revenue 122,659 119,207 112,348 109,323 113,991 Provision for credit losses 5,000 5,000 7,000 2,000 4,500 OREO va

  8. Slide 8: Income Statement - Annual

    Income Statement - Annual 2013 2012 2011 2010 2009 Net interest income $ 419,513 $ 376,879 $ 302,937 $ 241,674 $ 196,691 Non-interest income 44,024 43,040 32,232 32,263 29,260 Net revenue 463,537 419,919 335,169 273,937 225,951 Provision for credit losses 19,000 11,500 28,500 53,500 43,500 OREO valu

  9. Slide 9: QTD Average Balances, Yields and Rates

    QTD Average Balances, Yields and Rates (in thousands) Q4 2013 Q3 2013 Q4 2012 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 65,067 4.25% $ 71,717 4.25% $103,483 4.55% Fed funds sold & liquidity investments 158,594 .21% 167,613 .19% 91,503 .27% Loans held for inve

  10. Slide 10: YTD Average Balances, Yields and Rates

    YTD Average Balances, Yields and Rates (in thousands) 2013 2012 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 77,178 4.39% $117,375 4.46% Fed funds sold & liquidity investments 144,050 .21% 72,689 .30% Loans held for investment, mortgage finance 2,342,149 3.75% 2,298,651 4.06% Loans

  11. Slide 11: Financial Summary

    Financial Summary (in thousands) QTD Averages Q4/Q3 % YOY % Q4 2013 Q3 2013 Q4 2012 Change Change Total assets $10,899,266 $10,637,766 $9,869,282 2% 10% Loans held for investment 8,142,569 7,731,901 6,662,817 5% 22% Loans held for investment, mortgage finance 2,238,730 2,362,118 2,658,092 (5)% (16)%

  12. Slide 12: Financial Summary

    Financial Summary (in thousands) YTD Averages 2013 2012 YOY % Change Total assets $10,348,404 $8,965,961 15% Loans held for investment 7,471,676 6,148,860 22% Loans held for investment, mortgage finance 2,342,149 2,298,651 2% Total loans 9,813,825 8,447,511 16% Securities 77,178 117,375 (34)% Demand

  13. Slide 13: Financial Summary

    Financial Summary (in thousands) Period End Q4/Q3 % YOY % Q4 2013 Q3 2013 Q4 2012 Change Change Total assets $11,714,397 $10,797,448 $10,540,542 8% 11% Loans held for investment 8,486,309 8,051,328 6,785,535 5% 25% Loans held for investment, mortgage finance 2,784,265 2,262,085 3,175,272 23% (12)% T

  14. Slide 14: Revenue and Income Growth

    Revenue and Income Growth Operating Revenue CAGR: 22% ($ in thousands) Net Interest Income CAGR: 23% Non-interest Income CAGR: 14% Non-interest Expense CAGR: 18% Net Income CAGR: 37% Note: Excludes OREO valuation charge for YTD 2013, 2012, 2011 and 2010. 14

  15. Slide 15: EPS Growth

    EPS Growth 5 Year EPS CAGR: 27% ^Excludes $.15 effect of preferred TARP dividend during 2009. Reported EPS was $0.56. 15

  16. Slide 16: Deposit and Loan Growth

    Deposit and Loan Growth ($ in millions) Demand Deposit CAGR: 42% Total Deposit CAGR: 23% Loans Held for Investment* CAGR: 16% 16 * Excludes MF loans.

  17. Slide 17: Loan Portfolio Statistics

    Loan Portfolio Statistics Loan Collateral by Type 12/31/13 Non-accrual loans Commercial $ 12,896 Construction 705 Real estate 18,670 Consumer 54 Equipment leases 50 Total non-accrual loans 32,375 Non-accrual loans as % of loans excluding MF .38% Non-accrual loans as % of total loans .29% OREO 5,110

  18. Slide 18: Credit Quality

    Credit Quality Improved Credit Trends – Total credit cost of $5.4 million for Q4-2013, compared to $ 5.0 million in Q3-2013 and $5.5 million in Q4-2012 • Provision of $5.0 million for Q4-2013 compared to $5.0 million for Q3-2013 and $4.5 million in Q4-2012 • NCOs $1.3 million (6 bps) in Q4-2013 comp

  19. Slide 19: Credit Quality

    Credit Quality Net Charge-offs / Average Loans* Combined reserve / 1.09% 1.15% 1.31% 1.56% 1.59% Loans* Non-accrual loans + OREO to loans* + .44% 1.06% 1.58% 3.25% 2.74% OREO Combined reserve to 2.7x 1.3x 1.3x .6x .7x non-accruals * Excludes MF loans. 19

  20. Slide 20: Closing Comments

    Closing Comments • Strong core earnings power, profitability and growth to continue in 2014 • Credit continues positive trend • Strong LHI pipeline and new commitments present opportunity for growth potential • Producers in place for 2014 growth • Building more liquidity in 2014 which will impact NI

  21. Slide 21: Q&A

    Q&A 21 ©) TEXAS CAPITAL BANCSHARES, INC:

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