Texas Capital Bancshares (NASDAQ:TCBI – Get Free Report) posted its quarterly earnings data on Wednesday. The bank reported $2.35 EPS for the quarter, beating analysts’ consensus estimates of $1.96 by $0.39, FiscalAI reports. Texas Capital Bancshares had a return on equity of 10.92% and a net margin of 17.74%. The company had revenue of $356.60 million during the quarter, compared to analysts’ expectations of $339.89 million.
Here are the key takeaways from Texas Capital Bancshares’ conference call:
- Positive Sentiment: Texas Capital reported record third-quarter adjusted EPS of $2.35, up 8% year over year and 25% sequentially, supported by record net interest income, total revenue of $356.6 million, and adjusted PPNR growth for the ninth consecutive quarter.
- Positive Sentiment: Fee income continued to diversify the business, with non-interest income up 19% year over year to $81.6 million. Investment banking and trading, treasury product fees, and wealth management all posted strong growth, while full-year non-interest income guidance increased to $295 million-$300 million.
- Positive Sentiment: Commercial loans rose 13% year over year and 13% annualized sequentially, marking the 11th consecutive quarter of average commercial loan growth. Management also authorized a new $200 million share-repurchase program after buying back approximately $103 million of shares during the quarter.
- Negative Sentiment: Mortgage finance loans declined sharply as higher mortgage rates reduced industry volumes, while commercial real estate balances fell 7% sequentially and are expected to reach approximately $4.4 billion by year-end. Management expects these balance-sheet headwinds to persist, although commercial and fee-generating businesses are offsetting some of the impact.
- Negative Sentiment: The bank expects fourth-quarter non-interest expense of $205 million-$210 million as it accelerates hiring across frontline businesses and invests in technology and AI infrastructure. Credit costs remain elevated relative to peers, with net charge-offs of $14.5 million and criticized loans increasing sequentially amid pressure on select C&I and multifamily credits.
Texas Capital Bancshares Price Performance
Shares of Texas Capital Bancshares stock opened at $98.78 on Friday. The stock has a market cap of $4.29 billion, a price-to-earnings ratio of 12.85, a price-to-earnings-growth ratio of 0.99 and a beta of 0.63. The company has a debt-to-equity ratio of 0.15, a quick ratio of 1.00 and a current ratio of 1.00. The stock has a 50 day moving average price of $95.47 and a 200-day moving average price of $98.96. Texas Capital Bancshares has a one year low of $81.26 and a one year high of $108.92.
Texas Capital Bancshares Announces Dividend
The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 15th. Stockholders of record on Tuesday, December 1st will be paid a $0.20 dividend. This represents a $0.80 annualized dividend and a dividend yield of 0.8%. The ex-dividend date of this dividend is Tuesday, December 1st. Texas Capital Bancshares’s dividend payout ratio (DPR) is presently 10.40%.
Analyst Upgrades and Downgrades
A number of equities research analysts recently commented on TCBI shares. Raymond James Financial decreased their target price on Texas Capital Bancshares from $115.00 to $108.00 and set an “outperform” rating on the stock in a research report on Tuesday, October 6th. JPMorgan Chase & Co. decreased their price objective on Texas Capital Bancshares from $110.00 to $100.00 and set an “underweight” rating on the stock in a report on Thursday, October 1st. Barclays upgraded Texas Capital Bancshares from an “underweight” rating to an “equal weight” rating and set a $100.00 target price for the company in a research report on Monday, August 3rd. Fundamental Research set a $110.00 target price on Texas Capital Bancshares in a research report on Wednesday, July 1st. Finally, Piper Sandler raised their target price on shares of Texas Capital Bancshares from $100.00 to $101.00 and gave the company a “neutral” rating in a report on Thursday. Four equities research analysts have rated the stock with a Buy rating, eight have given a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the stock currently has an average rating of “Hold” and a consensus price target of $104.33.
View Our Latest Analysis on Texas Capital Bancshares
About Texas Capital Bancshares
Texas Capital Bancshares, Inc is the parent company of Texas Capital Bank, a full-service financial institution headquartered in Dallas, Texas. The bank primarily serves commercial and middle-market businesses, entrepreneurs, professionals, high-net-worth individuals and institutions.
Texas Capital Bank offers commercial and private banking services, including business and personal deposit accounts, commercial and real estate lending, treasury management, wealth management and related financial solutions.
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