Texas Capital Bancshares (TCBI) AI Stock Analysis

• Market Cap: $3.27B
• Dividend Yield: N/A
• Average Volume (3M): 456.25K
• Price to Earnings (P/E): 55.7
• Beta (1Y): 1.06
• Revenue Growth: 8.15%
• EPS Growth: -64.06%
• Country: US
• Employees: 1,818
• Sector: Financial
• Sector Strength: 77
• Industry: Banking
• EPS (TTM): 1.27
• Shares Outstanding: 46,124,744
• 10 Day Avg. Volume: 533,724
• 30 Day Avg. Volume: 456,248
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.82
• Price to Cash Flow (P/CF): 44.80
• P/FCF Ratio: 1.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $85.86
• Price Target Upside: 21.17% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

Texas Capital Bancshares' strong revenue growth and improved leverage bolster its financial stability. The stock shows upward momentum technically but faces valuation concerns with a high P/E ratio. The positive earnings call emphasizes strong fee revenue growth and client acquisition, but challenges with net interest income and credit risk remain. Overall, the company's strategic direction and robust capital position support a positive outlook, but careful monitoring of profitability and investment outflows is advised.

Positive Factors

Financial Performance

TCBI reported a strong quarter highlighted by its securities repositioning actions which is expected to add $35-$40 mm in annual net interest income.

Investment Offerings

The investment bank offers additional products like FX and rates, comparable to money center banks, supporting future growth.

Negative Factors

Profitability Challenges

There is skepticism about Texas Capital's ability to achieve its profitability target without significant actions to enhance its balance sheet.

Texas Capital Bancshares Business Overview & Revenue Model

Company Description

Texas Capital Bancshares, Inc. (TCBI) is a financial holding company headquartered in Dallas, Texas. It operates primarily through its wholly-owned subsidiary, Texas Capital Bank, which offers a full range of banking and financial services. The company primarily focuses on serving commercial businesses, entrepreneurs, and high-net-worth individuals across various sectors including real estate, energy, and technology.

How the Company Makes Money

Texas Capital Bancshares generates revenue through multiple streams, primarily driven by interest income from loans and leases. The company offers a variety of lending products such as commercial loans, real estate loans, and personal loans, where the interest charged on these loans forms a significant portion of its income. Additionally, TCBI earns non-interest income through fees and service charges related to deposit accounts, treasury and cash management services, and investment banking activities. Furthermore, its wealth management and trust services contribute to its revenue model. The bank's financial performance is also supported by strategic partnerships and a focus on maintaining strong client relationships within its key markets.

Texas Capital Bancshares Financial Statement Overview

Summary

Texas Capital Bancshares showed strong revenue growth and improved leverage in 2024, indicating robust expansion and financial stability. However, the declining net profit margin and significant investment outflows are potential risks. The company needs to focus on improving profit margins and efficient capital management to sustain long-term growth.

Income Statement

The gross profit margin remained strong at 100%, typical for banks due to the nature of their revenue structures. However, the net profit margin has seen a decline from 17.58% in 2023 to 4.48% in 2024, indicating pressure on profitability. Revenue growth was strong at 60.77% from 2023 to 2024, showcasing robust business expansion, but the declining net income suggests increasing costs or margin pressures.

Balance Sheet

The debt-to-equity ratio improved from 0.74 in 2023 to 0.15 in 2024, indicating a significant reduction in leverage and enhanced financial stability. The equity ratio increased to 86.19%, suggesting a solid capital foundation. However, the return on equity dropped to 2.32% in 2024 from 5.91% in 2023, reflecting reduced profitability relative to shareholder equity.

Cash Flow

Operating cash flow increased significantly from $373.74 million in 2023 to $481.12 million in 2024, indicating improved cash generation capabilities. The free cash flow to net income ratio was strong, highlighting effective cash management. However, the cash flow from investing activities was negative, primarily due to significant investments, which could be a concern if not managed properly.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.73B	1.08B	976.76M	879.30M	989.72M
	Gross Profit
1.73B	1.08B	976.76M	879.30M	989.72M
	EBIT
1.71B	246.59M	682.98M	338.06M	91.95M
	EBITDA
0.00	0.00	477.04M	431.46M	166.87M
	Net Income Common Stockholders
77.51M	189.14M	332.48M	253.94M	66.29M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
244.06M	3.43B	9.49B	11.53B	12.40B
	Total Assets
3.88B	28.36B	28.41B	34.73B	37.73B
	Total Debt
485.63M	2.36B	2.13B	3.13B	3.40B
	Net Debt
280.25M	-883.70M	-2.88B	-4.82B	-5.81B
	Total Liabilities
535.68M	25.16B	25.36B	31.52B	34.85B
	Stockholders Equity
3.37B	3.20B	3.06B	3.21B	2.87B
Cash Flow		Free Cash Flow
481.12M	357.36M	136.70M	653.19M	2.64B
	Operating Cash Flow
481.12M	373.74M	147.97M	657.32M	2.64B
	Investing Cash Flow
-2.48B	-1.76B	3.31B	1.23B	-2.94B
	Financing Cash Flow
1.94B	-387.67M	-6.39B	-3.15B	5.08B

Texas Capital Bancshares Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 70.86
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TCBI, the sentiment is Negative. The current price of 70.86 is below the 20-day moving average (MA) of 78.30, below the 50-day MA of 78.48, and below the 200-day MA of 72.56, indicating a bearish trend. The MACD of -2.05 indicates Positive momentum. The RSI at 27.79 is Positive, neither overbought nor oversold. The STOCH value of 11.87 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TCBI.

Texas Capital Bancshares Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TCBI	74 Outperform	$3.27B	55.69	2.36%	―	8.15%	-64.06%
PB	70 Outperform	$6.82B	14.43	6.60%	3.10%	11.96%	11.66%
ZION	69 Neutral	$6.98B	10.13	13.15%	3.35%	7.91%	13.79%
BOKF	68 Neutral	$6.37B	12.59	9.70%	2.19%	11.17%	1.47%
Sector *	64 Neutral	$13.80B	10.64	9.23%	4.22%	17.66%	-7.66%
CMA	63 Neutral	$7.37B	11.64	10.72%	4.87%	-6.54%	-21.90%
FHN	61 Neutral	$9.24B	13.92	8.70%	3.18%	4.56%	-13.90%

Texas Capital Bancshares Corporate Events

Texas Capital Bancshares CEO to Become Chairman

On January 23, 2025, Texas Capital Bancshares announced that Rob C. Holmes, President and CEO, will also serve as Chairman of the Board following the 2025 Annual Meeting of Stockholders. This transition reflects Holmes’ successful leadership in Texas Capital’s multi-year transformation strategy, positioning the company for future growth. Bob Stallings, the outgoing Chairman, will continue as Lead Independent Director, receiving a one-year retirement policy waiver to facilitate a smooth transition. Holmes acknowledged the dedication of the company’s employees and expressed gratitude for Stallings’ mentorship. Texas Capital also reported strong financial results for 2024, maintaining industry-leading capital and liquidity.