TCBI Surges to 52-Week High on Strong Earnings, $200M Buyback
Texas Capital Bancshares beat Q4 profit estimates by 17% and guided for strong revenue growth, overshadowing a quarterly uptick in criticized loans.
Shares of Texas Capital Bancshares Inc. (NASDAQ: TCBI) surged more than 5% on Wednesday, hitting a new 52-week high after the company delivered fourth-quarter earnings that significantly outpaced analyst expectations and announced a substantial new share repurchase program.
The Dallas-based bank's stock climbed to over $102 in morning trading, reflecting investor confidence after it reported Q4 adjusted earnings per share of $2.08, a 17.3% beat over the consensus estimate of $1.77. The bank posted a 44% year-over-year increase in net income to $96.3 million, underscoring a period of strong profitability.
Fueling the bullish sentiment, the company’s board authorized a new $200 million share repurchase program, effective through the end of 2026. The buyback plan, representing approximately 4.5% of the company's $4.45 billion market capitalization, signals management's confidence in the bank's financial strength and its stock's value. The move was announced alongside forward-looking guidance that projects mid-to-high single-digit revenue growth for the full year 2026.
“Our fourth quarter results are a strong finish to a successful year, reflecting the strength of our balance sheet and the earnings power of our strategy,” the company stated in its official earnings release.
While revenue for the quarter was largely in line with expectations at $327.5 million, the robust profit growth captured the market's attention. The performance was driven by a healthy net interest income of $267.4 million and an improved return on average assets of 1.22% for the quarter.
However, the report also prompted a closer look at the bank’s credit metrics. According to its filings, criticized loans rose to $634.9 million as of December 31, an increase from the $529.7 million reported in the prior quarter. This uptick in loans requiring special management attention is a key metric for bank investors gauging potential risk.
Despite the quarterly increase, the figure for criticized loans remains below the $714.0 million reported in the same period a year ago. Furthermore, the bank’s net charge-offs for the quarter were $10.7 million, a sequential decline from $13.7 million in Q3 2025 and below the $12.1 million from Q4 2024, suggesting management is actively managing credit quality. The provision for credit losses was a relatively modest $11.0 million.
Wednesday’s stock surge pushed TCBI’s share price above the average analyst 12-month price target of approximately $97.57, which was established before the latest earnings release. The strong beat and confident outlook could prompt analysts to revise their ratings and price targets upward in the coming days. The consensus rating on the stock was a "Hold" entering the earnings announcement, with institutional ownership notably high at over 100% of the float.
Investors appear to be weighing the bank's powerful earnings momentum and commitment to capital returns against the nuanced credit quality indicators. The positive forward guidance suggests that Texas Capital Bancshares is poised to navigate the evolving economic landscape, though market watchers will continue to monitor credit trends closely in the quarters ahead.