- Texas Capital posted a rare spread-driven beat for the fourth quarter, with a double-digit pre-provision profit beat offset by higher than expected credit costs.
- TCBI isn't out of the woods yet with respect to bad loans, but I believe management has been proactive in risk management/containment, and I like the progress so far.
- Investors are waiting to hear what the CEO has in mind for the business; I believe TCBI needs to pivot away from its past overweighting toward lower-return business lines.
- Valuation is tricky; there's still meaningful upside on the basis of what a much better-run TCBI could be worth, but the details of how TCBI will transform still matter.
For further details see:
Texas Capital Bancshares Showing Progress On Credit