Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q2 2018 Earnings Presentation
18 slides from Texas Capital Bancshares's earnings presentation, Jul 18, 2018
Slide 1: TCBI Q2 2018 Earnings
TCBI Q2 2018 Earnings July 18, 2018
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
Opening Remarks & Financial Highlights • Solid traditional LHI growth in Q2-2018 • Expected growth in Mortgage Finance balances during seasonally strong Q2-2018 Balanced Growth • Increase in total deposits concentrated in interest-bearing • Benefit from improving yields on strong base of traditional
Slide 4: Energy and Health Care Update
Energy and Health Care Update Energy Exposure • Outstanding energy loans represented 7% of total loans, or $1.6 billion, at Q2-2018 compared to $1.4 billion at Q1-2018 • Addition of new loans improves composition and quality of total portfolio as problem assets are resolved • Decrease in energy non-
Slide 5: Update on Geographic Diversification
5 Update Update on Geographic Diversification Note: Note: (1) Texas Regions loan balances include balances from the Energy business (2) Unemployment data through May 30, 2018 $ Millions 10,000 12,000 14,000 16,000 2,000 4,000 6,000 8,000 0 Texas Regions Loans 10,225 (1) 6,665 Deposits National Busin
Slide 6: Net Interest Income & Margin
Net Interest Income & Margin Earning Asset & Margin Trends Quarterly Change $25.0 NII ($MM) NIM (%) $3.2 4.40% $1.7 $210.3 Q1 2018 3.71% $2.7 $2.6 $22.1 13.5 Increase in LHI yields .23 $21.1 $20.0 $2.5 $20.5 4.20% (2.4) Mix shift from LHI to MF (.04) $20.1 2.0 Increase in MF loan yields .03 $18.2 -
Slide 7: Loan Growth
Loan Growth Average Balance Trends ($B) Total Loan Composition ($23.7Billion at 6/30/18) $24.0 7.00% $22.0 6.80% Business Assets 29% 6.60% $20.0 $6.2 $5.3 $6.4 $5.9 6.40% Energy $18.0 5% $4.7 6.20% $16.0 6.00% Highly Liquid $15.9 Unsecured $14.0 $15.0 $15.4 5.80% Assets $14.4 4% 2% $12.0 $13.7 5.47%
Slide 8: Deposit Growth
Deposit Growth Average Balance Trends ($B) Funding Costs 1.00% $22.0 0.90% $20.0 $9.1 $8.0 0.80% $18.0 $8.8 $8.1 0.74% 0.81% $16.0 $7.9 0.62% $14.0 0.60% 0.56% 0.66% $12.0 0.48% $11.7 0.53% $10.0 $11.4 $11.3 $10.3 0.40% 0.47% $9.4 Deposit Balances ($B) Balances Deposit $8.0 0.38% $6.0 0.20% $4.0 $2.
Slide 9: Non-interest Expense
Non-interest Expense Quarterly Change NIE - Efficiency Increase/ • Changes in Salaries & Benefits components of change Non-interest expense ($MM) (Decrease) • Annual incentive accrual ramps generally Q1 2018 $127.0 higher in Q2 than Q1 Salaries and employee benefits – FAS 123R • FICA and other payro
Slide 10: Asset Quality
Asset Quality NCO / Average Traditional LHI Non-accrual loans Q2 2018 1.40% Commercial $ 79,586 Construction – 1.20% Real estate 2,543 1.00% Consumer 66 0.80% Equipment leases 1,100 0.60% 0.56% 0.38% Total non-accrual loans $ 83,295 0.40% 0.21% 0.20% 0.07% 0.10% Non-accrual loans as % of LHI .50% 0.
Slide 11: Performance Summary - Quarterly
Performance Summary - Quarterly (in thousands) Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 Net interest income $ 231,712 $ 210,300 $ 210,649 $ 204,361 $ 182,959 Non-interest income 17,279 19,947 19,374 19,003 18,769 Net revenue 248,991 230,247 230,023 223,364 201,728 Provision for credit losses 27,000 1
Slide 12: 2018 Outlook
2018 Outlook Business 2018 Outlook v. 2017 Results Comments & Changes since June 18, Driver 2018 Average LHI Low to mid-teens percent growth - Increased from low- to mid-single digit percent Average LHI – Mid-single digit percent growth growth and removed range for QTD average Mortgage Finance balan
Slide 13: Closing Comments
Closing Comments • Continued strong earnings in Q2-2018 • Solid traditional LHI growth in Q2-2018, and year to date which is positive to earnings for the remainder of 2018 • Benefit from seasonal strength in Mortgage Finance asset balances • Deposit levels increased, but also used more of liquidity
Slide 14: Q&A
Q&A @© Texas CAPITAL BANCSHARES, INC?
Slide 15: Appendix
Appendix @© Texas CAPITAL BANCSHARES, INC?
Slide 16: Average Balances, Yields & Rates - Quarterly
Average Balances, Yields & Rates - Quarterly (in thousands) Q2 2018 Q1 2018 Q2 2017 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 24,514 3.15% $ 23,854 3.50% $ 65,049 1.77% Liquidity assets 1,665,087 1.74% 2,564,579 1.55% 2,424,594 1.04% Loans held for sale 1,516
Slide 17: Average Balance Sheet - Quarterly
Average Balance Sheet - Quarterly (in thousands) QTD Average Q2/Q1 % YOY % Q2 2018 Q1 2018 Q2 2017 Change Change Total assets $24,606,237 $23,912,613 $21,320,976 3% 15% Loans held for sale 1,516,047 1,187,594 845,623 28% 79% Loans held for investment 15,883,317 15,425,323 13,718,739 3% 16% Loans hel
Slide 18: Period End Balance Sheet
Period End Balance Sheet (in thousands) Period End Q2/Q1 % YOY % Q2 2018 Q1 2018 Q2 2017 Change Change Total assets $27,781,910 $24,449,147 $23,119,713 14% 20% Loans held for sale 1,276,768 1,088,565 846,017 17% 51% Loans held for investment 16,536,721 15,741,772 14,280,353 5% 16% Loans held for inv
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