Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Investor Day (September 2021)
38 slides from Texas Capital Bancshares's investor day presentation, Sep 1, 2021
Slide 1: 2021 Strategic Update
2021 Strategic Update September 1, 2021 © 2021 Texas Capital Bank, N.A. Member FDIC
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains “forward-looking statements” within the meaning of and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, our strategy, our future performance, financial condition and business models, new products and
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 Full-
Slide 4: We have embarked on an enterprise-wide transformation
We have embarked on an enterprise-wide transformation. Actions to- date, coupled with delivering on the defined workstreams ahead, will establish the foundation necessary for earning the right to capitalize on the significant opportunities in each of our markets 4
Slide 5: Our Aspiration: Building the Flagship Financial Services Firm in Texas
Our Aspiration Building the Flagship Financial Services Firm in Texas Our Vision and Goals Our Values Defined Challenges to be Addressed Our Competitive Advantages Our Path Forward Our Deliverables 5
Slide 6: Our Vision and Goals
Our Aspiration Our Vision and Goals Our Vision… Our Values Our Competitive… Goals Employer of choice in Texas for people interested in growing their career in financial To be the flagship services financial services firm in Texas serving the best Strong execution on the core set of financial product
Slide 7: Our Values
Our Aspiration Our Values Our Vision… Our Values Our Competitive… Transparency Accountability Excellence Trust Act with transparency, Be accountable to one Commit to excellence every Foster a culture of trust candor, and discipline in all another, clients, day through collaboration, we do communitie
Slide 8: Our Competitive Advantages
Our Aspiration Our Competitive Advantages Our Vision… Our Values Our Competitive… Best Markets in the Country Commercial Focus Since Inception Top Talent Motivated to Deliver Headquartered in Texas with 15+ year Foothold in higher-value segments supported Highly experienced, well-known managem
Slide 9: Best Markets in the Country
Our Aspiration Best Markets in the Country Our Vision… Our Values Our Competitive… Texas Economic Growth continues to outperform …driven by a favorable climate for Business … and large companies continuing to Move Headquarters that of the broader US1… Formation2… and / or Significant Operations to t
Slide 10: Commercial Focus Since Inception
Our Aspiration Commercial Focus Since Inception Our Vision… Our Values Our Competitive… Component Key Stats A Base to Build from Today Clients the Bank was founded to serve – established lines of 79 88% Sustained high levels of client satisfaction business balanced between national and core market
Slide 11: Top Talent Motivated to Deliver
Our Aspiration Top Talent Motivated to Deliver Our Vision… Our Values Our Competitive… New Executive Leadership (8 of 16 Operating Committee Members) “Employer of Choice” is a direct reflection of our Rob Holmes Shannon Jurecka Tim Storms desire to compete based on talent President and Chief Chief
Slide 12: Defined Challenges to be Addressed
Our Aspiration Defined Challenges to be Addressed Our Path Forward Our Deliverables 12
Slide 13: Defined Challenges to be Addressed (1 of 2)
Defined Challenges… Defined Challenges to be Addressed (1 of 2) Our Vision… Our Values Our Competitive… Challenges to Overcome Actions to Date Limited Fee Income and Unfocused Loan Growth Relatively low client relevance resulting from narrow product offerings led to an Initiated a detailed action
Slide 14: Defined Challenges to be Addressed (2 of 2)
Defined Challenges… Defined Challenges to be Addressed (2 of 2) Our Vision… Our Values Our Competitive… Challenges to Overcome Actions to Date Misallocated Expenses Legacy investment agenda not tied to strategy focused little on core banking Developed well-defined and disciplined operating routine
Slide 15: Organic Growth-focused, Full-service, Texas-based Business Bank
Our Aspiration Defined Challenges to be Addressed Our Path Forward Organic Growth-focused, Full-service, Texas-based Business Bank An Operating Model Aligned to Our Vision, Grounded in Our Values Our Deliverables Clear Strategic Direction and Fortitude to Deliver Committed to Financial Resilience 15
Slide 16: An Operating Model Aligned to Our Vision, Grounded in Our Values
Our Path Forward An Operating Model Aligned to Our Vision, Grounded in Our Values An Operating… Clear Strategic… Committed to… Organized Around Client Delivery Expanding Products and Services Consistent Communication, Enhanced Accountability, and a Bias for Action Industry specialization combined
Slide 17: Organized Around Client Delivery // Adapting the Coverage Model (1 of 2)
Our Path Forward Organized Around Client Delivery // Adapting the Coverage Model (1 of 2) An Operating… Clear Strategic… Committed to… We will be defined by our clients. Expanded industry specialization is being positioned alongside local market coverage with the necessary incentives to do what is r
Slide 18: Organized Around Client Delivery // Adapting the Coverage Model (2 of 2)
Our Path Forward Organized Around Client Delivery // Adapting the Coverage Model (2 of 2) An Operating… Clear Strategic… Committed to… Significantly enhancing our ability to support the market and our clients—in each of our major metros, our Specialized Industry teams will cover ~40% of the market a
Slide 19: Organized Around Client Delivery // Focused Technology Spend
Our Path Forward Organized Around Client Delivery // Focused Technology Spend An Operating… Clear Strategic… Committed to… Banker-led and technology-enabled, we are making our investment decisions focused squarely on two goals: Earning the right to be there for our clients and ensuring the experienc
Slide 20: Expanding Products and Services // Treasury Solutions
Our Path Forward Expanding Products and Services // Treasury Solutions An Operating… Clear Strategic… Committed to… Leadership: Nancy McDonnell Executive Vice President, Head of Treasury Solutions Near-term Medium-term Joined Texas Capital Bank in January 2021 Improving Scalability Expanding Distr
Slide 21: Expanding Products and Services // Private Wealth
Our Path Forward Expanding Products and Services // Private Wealth An Operating… Clear Strategic… Committed to… Leadership: Alan Miller Full Suite of Product Offerings Available Today President, Private Wealth Advisors Estate & Wealth Planning Strategies Concierge Private Banking Joined Texas Capi
Slide 22: Expanding Products and Services // Investment Banking
Our Path Forward Expanding Products and Services // Investment Banking An Operating… Clear Strategic… Committed to… Leadership: Daniel Hoverman Purpose Executive Vice President, Head of Investment Banking Establish competitive offering of advisory-based products and services to help our clients acce
Slide 23: Consistent Communication, Enhanced Accountability, and a Bias for Action
Consistent Communication, Enhanced Accountability, and a Bias for Action Quarterly Business Reviews Line of Business Roadmaps Strategic Project Meetings Balance Sheet Committee and Internal Forecasting Balancing client-focused strategy Enterprise-wide and formally Joining risk appetite and strategic
Slide 24: Clear Strategic Direction and Fortitude to Deliver
Our Path Forward Clear Strategic Direction and Fortitude to Deliver An Operating… Clear Strategic… Committed to… Expanding Offerings and Coverage Evaluating Opportunities for Structurally Higher, More in Core C&I Markets Growth Sustainable Earnings Extend coverage to support our commercial A dis
Slide 25: Expanding Offerings and Coverage in Core C&I Markets
Our Path Forward Expanding Offerings and Coverage in Core C&I Markets An Operating… Clear Strategic… Committed to… Expanding our focus driven by both products and segments will allow us to become a more relevant partner to our clients throughout their full life-cycles, from inception to maturity and
Slide 26: Evaluating Opportunities For Growth
Our Path Forward Evaluating Opportunities For Growth An Operating… Clear Strategic… Committed to… Medium-term focus on building tangible book value by redeploying internally generated capital in pursuit of capability build and market- share takeaway Capital Use Alternatives 1 Invest Internally 2 Acq
Slide 27: Structurally Higher, More Sustainable Earnings (1 of 2)
Our Path Forward Structurally Higher, More Sustainable Earnings (1 of 2) An Operating… Clear Strategic… Committed to… Serving strong core Texas markets with expanded …will improve client relevance and diversify our earnings base by increasing coverage and a complete set of capabilities… non-interest
Slide 28: Structurally Higher, More Sustainable Earnings (2 of 2)
Our Path Forward Structurally Higher, More Sustainable Earnings (2 of 2) An Operating… Clear Strategic… Committed to… Asset Sensitivity12 Improved Funding Quality and Lower Betas 23.0% Indexed Deposits Interest-bearing Deposit Betas 20.4% +200bp Shock +100bp Shock ~75% 11.5% ~15% 10.3% 30% 11.1% 10.
Slide 29: Committed to Financial Resilience
Our Path Forward Committed to Financial Resilience An Operating… Clear Strategic… Committed to… Credit Risk Management Enterprise Risk Management Capital and Liquidity Management changes, organization Expertise engaged in processes and controls Philosophy grounded in desire to be both realignm
Slide 30: Credit Risk Management
Our Path Forward Credit Risk Management An Operating… Clear Strategic… Committed to… Refreshed Approach to Credit Multi-year portfolio de-risking largely complete; newly originated credits consistent with enterprise strategy, go-forward culture, and redesigned credit coverage model Values-driven
Slide 31: Enterprise Risk Management
Our Path Forward Enterprise Risk Management An Operating… Clear Strategic… Committed to… Our risk framework will continue to evolve at the pace of the business; staying agile in the face of a dynamic landscape Building on established momentum to create more sustainable Strengthening effective challe
Slide 32: Capital and Liquidity
Our Path Forward Capital and Liquidity An Operating… Clear Strategic… Committed to… Operating with structurally higher capital levels and the appropriate amount of liquidity enables us to proactively manage the balance sheet through all economic cycles while supporting profitability Risk-based Capit
Slide 33: Our Deliverables: Building a Valuable Franchise
Our Aspiration Defined Challenges to be Addressed Our Path Forward Our Deliverables Building a Valuable Franchise Financial Roadmap 33
Slide 34: Financial Roadmap
Our Deliverables Financial Roadmap An Operating… Clear Strategic… Committed to… Strategic Priorities >12.5% 12.0% Employer of Choice Earning the Right Financial Resiliency ROTCE1 9.8%2 Being the First Call Current Financial Priorities 2019 2Q21 Coverage and Products and Balance Sheet 2025 Investment
Slide 35: Today's Speakers
Today’s Speakers Rob Holmes Julie Anderson Tim Storms Don Goin Madison Simm President and Chief Executive Officer Chief Financial Officer Chief Risk Officer Chief Information Officer Head of Mortgage Finance Joined TCBI in 2021 Joined TCBI in 1999 Joined TCBI in 2021 Joined TCBI in 2021 Joined TCBI
Slide 36: Our Aspiration – Footnotes
Our Aspiration – Footnotes 1. Source: U.S. Bureau of Economic Analysis (BEA); Moody’s Analytics Forecasted Baseline Scenario (July 2021): Gross State / Domestic Product: Total 2. Source: QCEW Data, High-level Industries, One Area; change in quarterly establishments 3. Source: U.S. Census Bureau (BOC
Slide 37: Our Path Forward – Footnotes
Our Path Forward – Footnotes 1. Source: U.S. Census Bureau (BOC); Moody’s Analytics Estimated and Forecasted Baseline Scenario (July 2021): Resident Population: Total; 2Q2016 to 2Q2021 2. Dun and Bradstreet estimated number of potential clients in TCBI-defined markets 3. Accounts from core clients u
Slide 38: Our Deliverables – Footnotes
Our Deliverables – Footnotes 1. 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 equity. A reconcilement of R
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