Texas Capital Bancshares, Inc.

Good morning all. I would like to welcome you all to the Texas Capital Bank Shares Inc Q2 2024 earnings call. My name is Brika and I will be your moderator for today. All lines are on mute for the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, you'd press star followed by one on your telephone keypad. If you change your mind and would like to remove that request to speak, please press star then two. And for operator assistance at any point, please press star zero. Thank you. I would now like to pass the conference over to your host, Jocelyn Kukula, at TCBI to begin. So, Jocelyn, please go ahead.

Good morning, and thank you for joining us for TCBI's second quarter 2024 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 a 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. We continue to make material progress, translating our now clearly differentiated strategy and operating model into outcomes consistent with our targeted results. The firm's industry-leading liquidity and capital continue to be a competitive advantage, as current and prospective clients seek a financial partner with both a product suite and balance sheet capable of supporting them through market and rate cycles. We finished the quarter with tangible common equity to tangible assets of 9.6%, ranked first amongst the largest banks in the country, a reserve ratio of 1.84% when excluding mortgage finance loans, which is top decile amongst our peer group, and liquid assets of 24%. We continue to experience sustained momentum in our fee income areas of focus, which collectively increased 21% linked quarter and 11% year-over-year, with Treasury, Wealth, and Investment Banking delivering results consistent with expectations. Non-interest income comprised 19% of total revenue for the quarter, which is the second consecutive quarter inside our target range for fee income as a percentage of total revenue by full year 2025. The Investment Bank, now just two years from its launch, has an increasingly granular and diverse pipeline, which is contributing to more sustainable fee growth in this developing business. Investment banking and trading income increased 33% quarter over quarter to a record of $30.7 million. Syndications, capital markets, and capital solutions all delivered quarter over quarter revenue growth. with capital markets delivering records in both fees and transaction volumes. We continue to hit milestones and a still maturing investment banking offering every quarter and are building a base of consistent and repeatable revenues that will be both a differentiator in the marketplace and a meaningful contributor to future earnings. At Treasury Solutions Platform, after nearly three years of deliberate and material investment, now provides both payment products and services in parity with the major money center banks and a client onboarding process that is faster and more efficient. Client and product onboarding continues on pace with expectations as year-over-year treasury product fees increased 14%, led by an 11% increase in gross payment revenue year-to-date. This is now five consecutive quarters with growth three times the industry, as our sustained focus increasingly earns us the right to become our client's primary operating bank. The private wealth business is undergoing a full rebuild, which I have detailed in prior quarters, and we anticipate that it will become complete by year end. The expanded product suite and materially enhanced client journey should enable improved connectivity to the rest of our platform allowing for significant future scale. Total AUM was flat quarter-over-quarter. However, managed investment assets were up 5%, an early sign of anticipated increase in client adoption and associated revenue growth resulting from initial components of our new offering coming online. Distinctive cash management capabilities enable the firm to retain and grow client funds during 2023. With those trends continuing through the first half of this year, non-interest-bearing deposit accounts outside of mortgage finance remain flat at $3.3 billion for the quarter, while non-brokered interest-bearing deposits grew again this quarter and are now up 23% or $2.9 billion year over year. A foundational tenet of the financial resiliency we have established and will preserve is continued focused on tangible book value, which is up over 7% year over year, ending at $62.23 per share. This is an all-time high for our firm. While we continue to bias capital towards supporting franchise accretive client segments, where we are delivering our entire platform, we do recognize that at times of market dislocation, It can be prudent to utilize share repurchases as a tool for creating longer-term shareholder value. During the quarter, we repurchased $50 million or 1.8% of total shares outstanding at a weighted average price equal to 95% of the prior month tangible book value and 84% of tangible book value when adjusting for AOCI impacts. The firm remains fully committed to improving financial performance and believes that our position of unprecedented street is enabling us to serve the best clients in our markets. We will drive attractive through cycle shareholder returns with both higher quality earnings and a lower cost of capital as we scale high value businesses through increased client adoption, improved client journeys, and realized operational efficiencies. All objectives that we made significant headway on year to date. Now I'll turn it over to Matt to discuss the details of the financial results.