Texas Capital Bancshares Inc/Tx (NASDAQ: TCBI)

Sector: Financial Services Industry: Banks - Regional CIK: 0001077428
Market Cap 4.23 Bn
P/B 1.16
P/E 14.92
P/S 3.68
ROIC (Qtr) 6.07
Div Yield % 0.00
Rev 1y % (Qtr) 184.71
Total Debt (Qtr) 895.42 Mn
Debt/Equity (Qtr) 0.25

About

Price action

Investment thesis

Bull case

  • Strong tangible asset base of 32.54B provides 36.34x coverage of total debt 895.42M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 227.75M exceeds capital expenditure of 20.32M by 11.21x, indicating strong organic growth funding capability.
  • Operating cash flow of 248.07M provides strong 3.40x coverage of operating expenses 73M, showing operational efficiency.
  • Retained earnings of 2.71B provide strong 1813.03x coverage of intangibles 1.50M, indicating quality earnings retention.
  • Strong tangible asset base of 32.54B provides 21748.32x coverage of intangibles 1.50M, indicating robust asset quality.

Bear case

  • Operating cash flow of 248.07M barely covers its investment activities of (2.13B), with a coverage ratio of -0.12, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Free cash flow of 227.75M represents just -0.28x of debt issuance (800.43M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 248.07M is outpaced by equity issuance of (66.64M) (-3.72 ratio), indicating concerning reliance on equity markets for funding operations.
  • Retained earnings of 2.71B provide limited buffer against comprehensive income items of (84.22M), which is -32.20x, indicating elevated exposure to market risks.
  • R&D investment of 0 represents just 0x of SG&A expenses of 683.03M, indicating potential underinvestment in innovation relative to administrative overhead.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.10 0.14
EV to Cash from Ops. EV/CFO 13.74 7.21
EV to Debt EV to Debt 3.81 5.20
EV to EBIT EV/EBIT 8.65 14.98
EV to EBITDA EV/EBITDA 7.65 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 14.97 8.87
EV to Market Cap EV to Market Cap 0.81 1.04
EV to Revenue EV/Rev 2.96 -3.76
Price to Book Value [P/B] P/B 1.16 1.17
Price to Earnings [P/E] P/E 14.92 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 16.43 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 35.28
Dividend per Basic Share Div per Share (Qtr) 0.00 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 66.79 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -26.88 15.78
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 1,028.62 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 409.06 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) 910.02 61.46
EBT Growth (1y) % EBT 1y % (Qtr) 910.02 61.37
EPS Growth (1y) % EPS 1y % (Qtr) 3,322.22 76.34
FCF Growth (1y) % FCF 1y % (Qtr) -61.29 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 39.14 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.04 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.25 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 38.70 147.97
EBIT Margin % EBIT Margin % (Qtr) 34.26 155.41
EBT Margin % EBT Margin % (Qtr) 34.26 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 24.60 115.63