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Texas Capital Bancshares (TCBI)
NASDAQ:TCBI
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Texas Capital Bancshares
(NASDAQ:TCBI)
67Neutral
Positive Factors
Fee Income
Fee income for 2025 was guided to $240 mn, which is above the prior estimate of $209 mn.
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.
Negative Factors
Profitability Concerns
There is skepticism about Texas Capital's ability to achieve its profitability target without significant actions to enhance its balance sheet.
Revenue Growth
Total revenue growth guidance was lowered to low single digits versus the prior guidance from July of up low to mid-single-digits.
Texas Capital Bancshares (TCBI) vs. S&P 500 (SPY)
Market Cap
$3.06B
Dividend YieldN/A
Average Volume (3M)567.48K
Price to Earnings (P/E)48.1
Beta (1Y)1.18
Revenue Growth8.15%
EPS Growth-64.06%
CountryUS
Employees1,818
SectorFinancial
Sector Strength79
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.27
Shares Outstanding46,124,744
10 Day Avg. Volume670,256
30 Day Avg. Volume567,481
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.03
Price to Cash Flow (P/CF)47.40
P/FCF Ratio1.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$85.83Price Target Upside40.15% Upside
Rating ConsensusHold
Number of Analyst Covering7
Texas Capital Bancshares Business Overview & Revenue Model
Company DescriptionTexas 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 MoneyTexas 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 demonstrated strong revenue growth and improved leverage, indicating robust expansion and financial stability. However, declining profitability and significant investment outflows present potential risks.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.65
Positive
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.70
Positive
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.80
Positive
| 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
Negative
61.24
Price Trends
75.94
Negative
78.93
Negative
74.04
Negative
Market Momentum
-0.70
Negative
43.98
Neutral
33.82
Neutral
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 61.24 is below the 20-day moving average (MA) of 72.04, below the 50-day MA of 75.94, and below the 200-day MA of 74.04, indicating a bearish trend. The MACD of -0.70 indicates Negative momentum. The RSI at 43.98 is Neutral, neither overbought nor oversold. The STOCH value of 33.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TCBI.
Texas Capital Bancshares Risk Analysis
Texas Capital Bancshares disclosed 39 risk factors in its most recent earnings report. Texas Capital Bancshares reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Texas Capital Bancshares Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $3.05B | 12.51 | 7.50% | 4.00% | 12.52% | 31.97% | |
69 Neutral | $2.85B | 9.19 | 7.86% | 2.93% | 16.70% | 27.09% | |
67 Neutral | $3.01B | 10.17 | 18.87% | 3.59% | 6.32% | 5.67% | |
67 Neutral | $3.06B | 48.13 | 2.36% | ― | 8.15% | -64.06% | |
64 Neutral | $13.46B | 9.44 | 9.34% | 4.72% | 16.14% | -8.80% | |
62 Neutral | $2.96B | 10.35 | 9.69% | 4.24% | 21.10% | -4.20% | |
58 Neutral | $3.25B | 23.16 | 3.63% | 3.03% | 73.24% | -53.04% |
* Financial Sector Average
Performance Comparison
TCBI
Texas Capital Bancshares
61.24
4.72
8.35%
FBP
First Bancorp Puerto Rico
17.74
1.64
10.19%
FULT
Fulton Financial
15.19
0.93
6.52%
RNST
Renasant
27.68
-0.36
-1.28%
UCB
United Community Banks
23.70
-0.26
-1.09%
EBC
Eastern Bankshares
14.27
2.01
16.39%
Texas Capital Bancshares Earnings Call Summary
Earnings Call Date: Jan 23, 2025 | % Change Since: -23.98% | Next Earnings Date: Apr 17, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance with record fee revenue growth, significant client acquisition, and a strong capital position. However, there were challenges with net interest income decline and managing credit risk, although these were offset by the overall positive trends in fee income and deposits.Highlights
Record Fee Revenue Growth
Fee revenue grew 30% year-over-year, contributing to record levels of earnings per share ($4.43) and tangible book value.
Significant Client Acquisition
The company onboarded nearly 40% more new significant clients in 2024 compared to 2023, showing strong client growth.
Investment Banking and Trading Income Surge
Investment banking and trading income increased by 47% year-over-year, driven by syndications, capital markets, and sales and trading.
Strong Capital Position
Year-end tangible common equity to tangible assets of 10%, ranking first among the largest banks in the country.
Deposit Growth
Total deposits expanded by $2.9 billion or 13% for the year, with noninterest-bearing deposits increasing 4%.
Lowlights
Decline in Net Interest Income
There was a modest rate-driven decline in net interest income, which impacted total adjusted revenue despite overall increases.
Criticized Loans
Criticized loans as a percentage of LHI were 3.18%, indicating ongoing challenges in managing credit risk.
Seasonal Deposit and Loan Fluctuations
Total deposits decreased by $627 million or 2% during the quarter due to known seasonality from annual tax payments.
Company Guidance
During the Texas Capital Bancshares, Inc. Q4 2024 earnings call, the company provided detailed guidance and performance metrics, showcasing significant progress in their strategic transformation. The firm reported a 30% growth in adjusted fee revenue and a 15% increase in earnings per share, reaching $4.43. Tangible book value grew by 8%, with return on average assets at 0.74% and return on average common equity at 7%. Additionally, the company saw a 36% increase in fee income from investment banking, treasury solutions, and private wealth, while total deposits expanded by 13% for the year. Looking forward, TCBI anticipates high single to low double-digit revenue growth in 2025, with targeted noninterest revenue of $270 million. The call emphasized the firm's industry-leading capital position, with tangible common equity to tangible assets at 10%, and a commitment to maintaining a financially resilient posture.Texas Capital Bancshares Corporate Events
Executive/Board ChangesShareholder MeetingsBusiness Operations and StrategyFinancial Disclosures
Texas Capital Bancshares CEO to Become Chairman
Positive
Jan 23, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.