Texas Capital Bancshares beats Q3 expectations, shares rise

DALLAS – Texas Capital Bancshares, Inc. (NASDAQ:TCBI) reported better-than-expected third quarter results on Thursday, sending shares up 1.5% in after-hours trading.

The Dallas-based bank posted adjusted earnings per share of $1.60, significantly beating analyst estimates of a $1.97 loss per share. Revenue came in at $125.33 million, below the consensus estimate of $279.69 million but up from $46.87 million in the same quarter last year.

Texas Capital’s net interest income rose to $240.1 million in Q3, compared to $232.1 million in the year-ago period. This increase was primarily driven by higher average total loans held for investment and improved yields on average earning assets.

The bank’s provision for credit losses was $10 million for the quarter, down from $18 million in Q3 2023. Net charge-offs totaled $6.1 million, compared to $8.9 million in the prior year quarter.

“We achieved significant financial milestones this quarter as our multi-year transformation is increasingly delivering financial outcomes consistent with realized success delivering our proven and differentiated strategy,” said Rob C. Holmes, President and CEO.

Total deposits increased 8% YoY to $25.87 billion. The bank’s CET1 ratio stood at 11.2% at quarter-end, down from 12.7% a year ago but still well above regulatory requirements.

While beating earnings expectations, Texas Capital recorded a $179.6 million loss on the sale of available-for-sale debt securities during the quarter. The company said its current business momentum and strong capital position set it up well for continued execution through 2025.

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