Back to top

Analyst Blog

On Apr 9, 2013, we downgraded our recommendation on Texas Capital BancShares Inc. (TCBI - Analyst Report) to Neutral from Outperform. Our decision is based on the company’s inability to control costs in 2012.

Why the Downgrade?

Texas Capital is scheduled to announce its first-quarter 2013 results on Apr 24. Activities of this bank during the quarter were not enough to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the quarter has moved down by 1.2% to 82 cents over the last 30 days.

A tendency for a downward estimate revision was more obvious for 2013 and 2014. The Zacks Consensus Estimate went down 3.8% to $3.33 per share for 2013 and 3.5% to $3.56 per share for 2014 over the same time frame. Hence, the company currently carries a Zacks Rank #4 (Sell).

Moreover, Texas Capital’s fourth-quarter 2012 earnings lagged the Zacks Consensus Estimate by 8.4%. The earnings miss primarily came on the back of higher expenses and decreased net interest margin.

While management expects continued growth in non-interest income, the future rate of growth could be affected by increased competition from nationwide and regional financial institutions as well as declining demand in mortgage warehouse lending volume. Moreover, though the economy is recovering, the pace is tepid. Hence, a robust improvement in the overall profitability might be limited in the near term.

Other Major Banks to Consider

Other major banks that are performing better than Texas Capital and are worth a look include BOK Financial Corporation (BOKF - Analyst Report), First Financial Bankshares Inc. (FFIN - Snapshot Report) and Southside Bancshares Inc. (SBSI - Snapshot Report). All of these carry a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%