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Texas Capital Bancshares (TCBI)
NASDAQ:TCBI
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Texas Capital Bancshares
(NASDAQ:TCBI)
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Rating:73Outperform
Price Target:
$98.00
▲(14.67% Upside)
Texas Capital Bancshares demonstrates strong earnings growth and positive technical indicators, contributing significantly to its stock score. The robust earnings call performance and strategic focus on growth further enhance its attractiveness. However, the high P/E ratio and absence of a dividend yield present valuation concerns, while financial performance indicates areas for improvement in profitability and cost management.
Positive Factors
Revenue Growth
The 16% increase in adjusted total revenue indicates strong market demand and effective business strategies, supporting long-term growth.
Treasury Product Fees
The surge in treasury product fees reflects the company's strong positioning in payments services, enhancing recurring revenue streams.
Capital Ratios
Strong capital ratios indicate financial stability and capacity to support future growth and absorb potential economic shocks.
Negative Factors
Provision Expense
Increased provision expenses suggest potential credit risk concerns, which could impact profitability if economic conditions worsen.
Non-Performing Loans
Rising non-performing loans indicate potential asset quality issues, which could strain future earnings and require additional reserves.
Real Estate Loans Decline
The decline in real estate loans may reflect reduced demand or strategic shifts, potentially impacting revenue from this segment.
Texas Capital Bancshares (TCBI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.96B
Dividend YieldN/A
Average Volume (3M)438.78K
Price to Earnings (P/E)34.4
Beta (1Y)0.88
Revenue Growth6.86%
EPS Growth-8.81%
CountryUS
Employees1,818
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.58
Shares Outstanding45,755,146
10 Day Avg. Volume448,638
30 Day Avg. Volume438,780
Financial Highlights & Ratios
PEG Ratio-0.73
Price to Book (P/B)1.08
Price to Sales (P/S)2.07
P/FCF Ratio8.75
Enterprise Value/Market Cap0.80
Enterprise Value/Revenue1.75
Enterprise Value/Gross Profit3.36
Enterprise Value/Ebitda13.74
Forecast
1Y Price Target
$93.00Price Target Upside8.82% Upside
Rating ConsensusHold
Number of Analyst Covering11
Texas Capital Bancshares Business Overview & Revenue Model
Company DescriptionTexas Capital Bancshares, Inc. operates as the bank holding company for Texas Capital Bank, is a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs, and individual customers. The company offers commercial banking, consumer banking, investment banking, and wealth management services. It offers business deposit products and services, including commercial checking accounts, lockbox accounts, and cash concentration accounts, as well as information, wire transfer initiation, ACH initiation, account transfer, and service integration services; and consumer deposit products, such as checking accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides commercial loans for general corporate purposes comprising financing working capital, internal growth, acquisitions, and business insurance premiums, as well as consumer loans; loans to exploration and production companies; mortgage finance loans; commercial real estate and residential homebuilder finance loans; first and second lien loans for the purpose of purchasing or constructing 1-4 family residential dwellings, as well as home equity revolving lines of credit and loans to purchase lots for future construction of 1-4 family residential dwellings; and real estate loans originated through a small business administration program, as well as equipment finance and leasing services, and letters of credit. In addition, it offers online and mobile banking, and debit and credit card services; escrow services; personal wealth management and trust services; and depositors American Airlines AAdvantage miles. It operates in Austin, Fort Worth, Dallas, Houston, and San Antonio metropolitan areas of Texas. Texas Capital Bancshares, Inc. was incorporated in 1996 and is headquartered in Dallas, Texas.
How the Company Makes MoneyTexas Capital Bancshares generates revenue primarily through interest income earned on loans and securities, as well as non-interest income from various banking services. The main revenue streams include interest from commercial loans, real estate loans, and consumer loans. Additionally, the bank earns fees from deposit accounts, treasury management services, and wealth management offerings. Key partnerships with local businesses and real estate developers enhance its loan portfolio, while a focus on customer service helps maintain strong relationships and customer retention. Overall, TCBI's financial performance is closely tied to the economic conditions in Texas and its ability to effectively manage its interest rate risk and operational expenses.
Texas Capital Bancshares Earnings Call Summary
Earnings Call Date:Jul 17, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 15, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance with significant revenue growth, improved net interest margin, and record-high tangible book value. However, challenges remain with increased provision expenses and higher non-performing loans. Despite these challenges, the overall outlook is positive with continued client acquisition and investment in growth areas.Q2-2025 Updates
Positive Updates
Significant Revenue and Earnings Growth
Year-over-year quarterly earnings growth accelerated, with adjusted total revenue increasing 16%, adjusted net income to common up 100%, and adjusted earnings per share expanding 104%.
Record-High Tangible Book Value
Tangible book value per share reached an all-time high of $70.14.
Treasury Product Fees Surge
Treasury product fees increased 37% year-over-year to a record high, demonstrating sustainability and commitment to being a premier payments bank.
Improvement in Net Interest Margin
Net interest margin increased by 16 basis points linked quarter, supported by a 17% growth in net interest income.
Investment Banking and Trading Income Growth
Investment banking and trading income increased 43% quarter-over-quarter and 4% year-over-year, led by a rebound in capital markets activity.
Strong Capital Ratios and Client Acquisition
Tangible common equity to tangible assets finished the quarter at 10.04%, with commercial loans growing 5% linked quarter and 13% year-over-year.
Negative Updates
Increased Provision Expense
Provision expense for the quarter was $15 million due to continued growth in gross LHI, $13 million of net charge-offs, and a conservative view of the macroeconomic environment.
Higher Non-Performing Loans (NPLs)
NPLs experienced a modest increase of $20 million, consistent with levels over the last 12 months.
Decline in Real Estate Loans
Real estate loans declined by $159 million during the quarter, with a $53 million reduction in criticized assets.
Company Guidance
During the Texas Capital Bancshares Q2 2025 earnings call, the company reported robust growth, underscored by a 16% increase in adjusted total revenue year-over-year and a 100% rise in adjusted net income to common. Adjusted earnings per share expanded by 104%, while adjusted return on average assets reached 1.02%, nearing the 2025 target of 1.1%. The firm saw a 13% annual increase in commercial loans and a 37% rise in treasury product fees year-over-year. Tangible common equity to tangible assets stood at 10.04%, with a tangible book value per share at an all-time high of $70.14. In the investment banking sector, trading income surged 43% quarter-over-quarter, with a 34% rise in average mortgage finance loans linked quarter. The firm's allowance for credit loss increased to $334 million, and the CET1 ratio finished at 11.45%. Texas Capital Bancshares reaffirmed its revenue guidance for low double-digit percent growth while decreasing its noninterest expense outlook to mid- to high single-digit percent growth, emphasizing its strong financial position and strategic focus on client-centric growth.Texas Capital Bancshares Financial Statement Overview
Summary
Texas Capital Bancshares shows solid cash flow management and a stable balance sheet. Revenue growth and profitability margins indicate moderate performance, with room for improvement in cost efficiency and return on equity. The company should leverage its strong cash flow position to optimize financial outcomes and mitigate potential risks associated with its leverage.Income Statement
The company shows moderate growth in revenue with a TTM revenue growth rate of approximately 1.9% and a noticeable increase from the previous year. Gross and net profit margins are slightly declining, with TTM figures of 52.2% and 7.5%, respectively. The EBIT and EBITDA margins are stable but show room for improvement, with TTM EBIT at 9.8% and EBITDA at 12.8%. Overall, the company demonstrates moderate profitability with potential for improvement in cost management.62
Positive
Balance Sheet
The balance sheet is relatively strong, with a debt-to-equity ratio of 0.53, indicating a manageable level of debt. The equity ratio stands at 11.0%, suggesting a moderate level of financial stability. Return on equity is modest at 3.8%, reflecting a need for improved profitability. The balance sheet is stable, but there is potential risk due to moderate leverage and a need to enhance shareholder returns.68
Positive
Cash Flow
Cash flow metrics are robust, with a strong operating cash flow to net income ratio of 3.1 and a free cash flow to net income ratio of 2.9, indicating efficient cash generation. The free cash flow growth rate shows a decrease, but overall cash flow management remains strong, supporting the company's liquidity and investment capabilities. The cash flow position is healthy, with opportunities to sustain operational improvements.75
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.79B | 1.76B | 1.79B | 1.25B | 987.05M | 1.18B |
| Gross Profit | 936.95M | 865.35M | 1.00B | 910.76M | 909.30M | 731.72M |
| EBITDA | 229.24M | 161.29M | 287.07M | 477.04M | 431.46M | 166.87M |
| Net Income | 134.08M | 77.51M | 189.14M | 332.48M | 253.94M | 66.29M |
Balance Sheet | ||||||
| Total Assets | 31.94B | 30.79B | 28.36B | 28.41B | 34.73B | 37.73B |
| Cash, Cash Equivalents and Short-Term Investments | 2.69B | 3.37B | 6.47B | 7.63B | 11.53B | 12.40B |
| Total Debt | 1.87B | 1.55B | 2.36B | 2.13B | 3.13B | 3.51B |
| Total Liabilities | 28.43B | 27.42B | 25.16B | 25.36B | 31.52B | 34.85B |
| Stockholders Equity | 3.51B | 3.37B | 3.20B | 3.06B | 3.21B | 2.87B |
Cash Flow | ||||||
| Free Cash Flow | 384.47M | 416.28M | 357.36M | 136.70M | 653.19M | 2.64B |
| Operating Cash Flow | 415.02M | 481.12M | 373.74M | 147.97M | 657.32M | 2.64B |
| Investing Cash Flow | -2.34B | -2.48B | -1.76B | 3.31B | 1.23B | -2.94B |
| Financing Cash Flow | 1.70B | 1.94B | -387.67M | -6.39B | -3.15B | 5.08B |
Texas Capital Bancshares Technical Analysis
Neutral
85.46
Price Trends
85.24
Positive
81.56
Positive
78.51
Positive
Market Momentum
0.23
Positive
48.30
Neutral
60.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TCBI, the sentiment is Neutral. The current price of 85.46 is below the 20-day moving average (MA) of 86.33, above the 50-day MA of 85.24, and above the 200-day MA of 78.51, indicating a neutral trend. The MACD of 0.23 indicates Positive momentum. The RSI at 48.30 is Neutral, neither overbought nor oversold. The STOCH value of 60.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $3.54B | 16.03 | 6.13% | 3.30% | 3.67% | -10.83% | |
77 Outperform | $3.87B | 14.45 | 7.56% | 3.05% | 3.00% | 42.78% | |
76 Outperform | $3.55B | 14.76 | 4.23% | 2.35% | 21.87% | -3.27% | |
73 Outperform | $3.41B | 14.66 | 6.71% | 5.78% | -2.11% | -8.95% | |
73 Outperform | $3.96B | 34.40 | 4.01% | ― | 6.86% | -8.81% | |
71 Outperform | $3.44B | 11.07 | 9.73% | 3.76% | 17.61% | 1.89% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
TCBI
Texas Capital Bancshares
85.46
14.00
19.59%
FIBK
First Interstate Bancsystem
32.55
3.76
13.06%
FULT
Fulton Financial
18.73
1.29
7.40%
INDB
Independent Bank
69.44
12.39
21.72%
RNST
Renasant
36.88
5.17
16.30%
UCB
United Community Banks
31.44
3.27
11.61%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.