Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q1 2019 Earnings Presentation
19 slides from Texas Capital Bancshares's earnings presentation, Apr 17, 2019
Slide 1: TCBI Q1 2019 Earnings
TCBI Q1 2019 Earnings April 17, 2019
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 Total Loans Total Deposits Net Income EPS ROE ROA Operating HFI Results $23.4 billion $20.7 billion $82.8 million $1.60 13.58% 1.26% • Net interest income decreased 2% from Q4-2018 and increased 12% from Q1-2018 Net Interest Income • Net interest margin decreas
Slide 4: Energy and Leveraged Lending Update
Energy and Leveraged Lending Update Energy Outstandings 3/31/19 Energy • Outstanding energy loans represented 7% of total loans, or $1.7 billion, 1% at Q1-2019 compared to 8%, or $1.8 billion, at Q4-2018 and 7%, or $1.4 billion, at Q1-2018 2% 10% • Non-accruals totaled $76.7 million at Q1-2019 compa
Slide 5: Mortgage Finance, LHI
Mortgage Finance, LHI Core Strengths • Technology investments have allowed for scalability • Historically low credit risk • Strong funding opportunities • Other product offerings developed to serve the industry • Commitment to clients in the industry allow for increased market share Efficiency Earni
Slide 6: Net Interest Income & Margin
Net Interest Income & Margin Earning Asset & Margin Trends Quarterly Change NII ($MM) NIM (%) 4.40% $25.0 $240.7 Q4 2018 3.78% $1.9 $2.0 $2.0 (5.4) Decrease in day count .00 $1.7 $23.6 $23.7 $23.1 4.20% $2.6 8.6 Increase in LHI loan yields .14 $22.1 (4.4) Decrease in LHI fees (.07) $20.0 $20.5 3.93%
Slide 7: Loan Growth
Loan Growth Average Balance Trends ($B) Total Loan Composition ($25.3Billion at 3/31/19) $24.0 8.00% $7.1 $7.1 7.80% $22.0 $6.9 7.60% Business Assets 29% $6.4 7.40% $20.0 7.20% $5.3 Energy $18.0 7.00% 5% 6.80% $16.0 $16.9 6.60% $16.3 $16.6 6.40% Highly Liquid $15.9 Unsecured $14.0 $15.4 6.20% Assets
Slide 8: Deposit Growth
Deposit Growth Average Balance Trends ($B) Funding Costs 1.40% 1.38% $22.0 1.23% $20.0 1.33% $7.9 $7.5 $7.0 1.20% $8.0 1.07% $18.0 $8.1 1.17% 1.00% $16.0 0.90% 0.99% $14.0 0.80% 0.74% $13.5 $14.0 $12.0 $12.9 0.81% $11.7 $10.0 $11.3 0.60% 0.66% Deposit Balances ($B) Balances Deposit $8.0 0.40% $6.0 $
Slide 9: Non-interest Expense
Non-interest Expense Quarterly Change NIE - Efficiency Increase/ • Changes in Salaries & Benefits components Non-interest expense ($MM) (Decrease) • Slowing of hiring positively impacting NIE Q4 2018 $129.9 growth Salaries and employee benefits – salaries only 1.2 • Annual incentive accrual ramps th
Slide 10: Asset Quality
Asset Quality Allowance for Credit Losses NCO/Average Total LHI $220.0 3.5x 3.4x3.5x $218.4 3.3x3.4x 1.40% $200.0 3.2x3.3x $200.5 $200.6 $203.0 3.2x 3.1x $180.0 $189.6 3.x 1.20% 2.9x3.x 2.8x2.9x $160.0 2.8x 2.7x 1.00% 2.6x $140.0 2.4x 2.5x 2.2x 2.5x2.4x 2.3x2.4x $120.0 2.3x 0.80% 2.2x 2.1x2.2x 1.8x
Slide 11: Performance Summary - Quarterly
Performance Summary - Quarterly (in thousands) Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Net interest income $ 235,614 $ 240,673 $ 232,175 $ 231,712 $ 210,300 Non-interest income 30,014 15,280 25,518 17,279 19,947 Net revenue 265,628 255,953 257,693 248,991 230,247 Provision for credit losses 20,000 3
Slide 12: 2019 Outlook
2019 Outlook Business 2019 Outlook v. 2018 Results Comments & Changes since January Driver 23, 2019 Average LHI Mid to high single digit percent growth Decreased from high single digit percent growth Average LHI – High-teens percent growth Increased from low single digit percent growth Mortgage Fina
Slide 13: Long-term Outlook
Long-term Outlook Rising-Rate Financial Goals Benefit ~ 10 bps ROA > 1.3% ~1.5% ROCE > 15% (~1.5%) Efficiency Ratio < 50% Fed Fund Target Max Reaches 3.50% Key Assumptions • Continuation of current economic conditions, allowing the Bank to capitalize on Inflection Point initiatives of growing higher
Slide 14: Closing Comments
Closing Comments • Delivering premier client experience embedded in our strategic priorities for 2019 • Solid traditional LHI growth in Q1-2019, with further risk appropriate growth levels the remainder of the year net of targeted runoff in leveraged lending portfolio • Better than expected growth f
Slide 15: Q&A
15 Q&A © Texas CAPITAL BANCSHARES, INC:
Slide 16: © Texas CAPITAL BANCSHARES, INC:
© Texas CAPITAL BANCSHARES, INC:
Slide 17: Average Balances, Yields & Rates - Quarterly
Average Balances, Yields & Rates - Quarterly (in thousands) Q1 2019 Q4 2018 Q1 2018 Avg. Bal. Yield Rate Avg. Bal. Yield Rate Avg. Bal. Yield Rate Assets Securities $ 144,966 4.97% $ 117,371 5.22% $ 23,854 3.50% Liquidity assets 1,886,758 2.45% 1,759,417 2.25% 2,564,579 1.55% Loans held for sale 2,1
Slide 18: Average Balance Sheet - Quarterly
Average Balance Sheet - Quarterly (in thousands) QTD Average Q1/Q4 % YOY % Q1 2019 Q4 2018 Q1 2018 Change Change Total assets $26,655,036 $26,261,624 $23,912,613 1% 11% Loans held for sale 2,122,302 2,049,395 1,187,594 4% 79% Loans held for investment 16,866,456 16,643,559 15,425,323 1% 9% Loans hel
Slide 19: Period End Balance Sheet
Period End Balance Sheet (in thousands) Period End Q1/Q4 % YOY % Q1 2019 Q4 2018 Q1 2018 Change Change Total assets $28,383,111 $28,257,767 $24,449,147 0% 16% Loans held for sale 1,901,637 1,969,474 1,088,565 (3)% 75% Loans held for investment 17,061,590 16,690,550 15,741,772 2% 8% Loans held for in
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