Texas Capital Bancshares, Inc.

Hello and welcome to the Texas Capital Bank Shares Inc. Q4 2023 earnings call. My name is Elliot and I'll be coordinating your call today. If you would like to register a question during today's event, please press star followed by one on your telephone keypad. And I'd like to hand over to Jocelyn Kukulka, Head of Investor Relations. The floor is yours. Please go ahead.

Good morning and thank you for joining us for TCBI's fourth quarter 2023 earnings conference call. I'm Jocelyn Kukulka, Head of Investor Relations. Before we begin, please be aware this call will include forward-looking statements that are based on our current expectations of future results or events. Forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from these statements. Our forward-looking statements are as of the date of this call, and we do not assume any obligation to update or revise them. Statements made on this call should be considered together with the cautionary statements and other information contained in today's earnings release and our most recent annual report on Form 10-K and subsequent filings with the SEC. We will refer to slides during today's presentation, which can be found along with the press release in the investor relations section of our website at TexasCapitalBank.com. Our speakers for the call today are Rob Holmes, President and CEO, and Matt Scurlock, CFO. At the conclusion of our prepared remarks, our operator will open up a Q&A session. I'll now turn the call over to Rob for opening remarks.

Thank you for joining us today. Our firm materially progressed its transformation in 2023, increasingly translating a now sustained track record of strategic success into financial outcomes consistent with long-term value creation. We are now operating a unique Texas-based platform, providing our clients with the widest possible range of differentiated products and services on parity with the largest money center banks. And we are positioned to serve as a relevant, trusted partner for the best clients in all of our markets. We know that the success of our clients will define our firm. A core element of our strategy is maintaining balance sheet positioning sufficient to support our clients through any circumstance. Our industry-leading liquidity and capital afford us a competitive advantage through market and rate cycles. Year-end CET1 at 12.6% ranked fourth amongst the largest banks in the country. Tangible common equity to tangible assets of 10.2% ranked first among the largest banks in the country and an all-time high for the firm. And liquid assets of 26% allows for a consistent and proactive market-facing posture as we are distinctly capable of supporting the diverse and broad needs of our clients in what continues to be a dynamic and challenging operating environment for all industries. We have, over the last three years, clearly prioritized enhancing the resiliency of both our balance sheet and business model over near-term growth and earnings. The extensive investments made to deliver a higher-quality operating model supporting a defined set of scalable businesses is resulting in the intended outcomes. The entire platform contributed to our full year adjusted financial results with fee revenue growth of 60%, PPR growth of 14% and EPS growth of 23%. The foundation of our transformation is a deliberate evolution of our treasury solutions platform from a series of disparate deposit gathering verticals into a best in class payments offering able to successfully compete for, win, and serve as the primary operating relationship for the best clients in our markets. The volumes flow through our payment system have increased 23% in the last two years, contributing to an 11% improvement in gross payment revenues in 2023, as treasury business awarded in prior quarters continues to ramp. Our firm now provides faster, more seamless, client onboarding than the major money center banks and ongoing frictionless client journeys that match or exceed theirs with high touch, local service, and decisioning. This theme extends to our investment bank as a capability set on par with the top Wall Street banks ensures clients will never outgrow the services we can provide for them. Market affirmation was evident this year as investment banking and trading income increased 146 percent with the largest product offerings syndications capital markets capital solutions m a and sales and trading each contributing over 10 million dollars in fee-based revenue a significant milestone for a still maturing offerings When we launched the strategy, we acknowledged that results generated by the newly formed investment bank would not be linear, and that it would take several years to mature the business with a solid base of consistent and repeatable revenues. Despite broad-based early success, we expect revenue trends to be inconsistent in the near term, the same as all firms, as we work to translate early momentum into a sustainable contributor to future earnings. The firm has been and remains committed to banking the mortgage finance industry as it weathers the most challenging operating environment in the last 15 years. Over the previous 18 to 24 months, we have refocused client selection and improved the service model as we look not to expand market share, but to instead deepen relationships through improved relevance with the right clients. Of those that started with just a warehouse line, 100% now do some form of treasury business with Texas Capital. And nearly 50% are open with a broker-dealer, paving the way for improved utilization of our sales and trading platform and accelerated return on capital. While the rate environment at 23 did disproportionately impact this client set, as evidenced in our financial results for the quarter, which Matt will walk you through, our commitment to effectively serving these clients will, over time, deliver risk-adjusted returns consistent with firm-wide objectives. A foundational tenor of the financial resiliency we have established and will preserve is continued focus on tangible book value, which finished the year up nearly 9%, ending at $61.34 per share, an all-time high for our firm. While we continue to bias capital use towards supporting franchise and creative client segments where we are delivering our entire platform, we do recognize that at times of market dislocation, It can be prudent to selectively utilize share repurchases as a tool for creating longer-term shareholder value. During 2023, we repurchased 3.7% of total shares outstanding at a weighted average price equal to the prior month tangible book value and at 86% of tangible book value when adjusting for AOCI impacts. We entered 2024 from a position of unprecedented strength. fully committed to improving financial performance over time. Intentional decisions made over the last three years have positioned us to deliver attractive through-cycle shareholder returns with both higher quality earnings and a lower cost of capital as we continue to scale high-value businesses through increased client adoption, improved client journeys, and realized operational efficiencies, all objectives that we made significant headway on this year. Thank you for your continued interest in and support of our firm. I'll turn it over to Matt to discuss the financial results.