This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

10 Community Bank Takeover Targets

5. Texas Capital Bancshares

Company Profile

Texas Capital Bancshares (TCBI) of Dallas has seen its stock rise 44% over the past year, to close at $22.11 Monday.

Out of the four targets Olney discussed with TheStreet, he said "TCBI will probably get the most attention," as the "franchise is very good and it is in a fantastic position to be acquired by any out of state bank looking to get into the state." Not only does Texas have a growing market for residential real estate, "it has a friendly tax structure." Olney listed BB&T as possibly having interest in Texas Capital Bancshares following Comerica's deal to acquire Sterling. He also said that "Canadian banks might be interested like TD (TD)," and that " BBVA (BBVA) might also be interested because it has a significant presence in Texas. "

Income Statement

The company reported fourth-quarter net income of $12.1 million, or 32 cents a share, increasing from $9.5 million, or 25 cents a share, the previous quarter and $6.4 million, or 18 cents a share, a year earlier. The provision for credit losses in the fourth quarter was $12 million, declining from $13.5 million in the third quarter but up from $6.4 million in the fourth quarter of 2009.

Net interest income increased 16% year-over-year to $66 million in the fourth quarter, as the company grew its deposit base by 32% and its demand deposits (most of which are non-interest-bearing) increased 61%. The fourth-quarter net interest margin was a healthy 4.12%, although it declined from 4.27% the previous quarter and 4.21% a year earlier.

The fourth-quarter return on average assets was 0.72%.

Balance Sheet

Total assets were $6.5 billion as of December 31 and the NPA ratio was 2.39%. The fourth-quarter net charge-off ratio was 1.14% and loan loss reserves covered 1.58% of total loans as of December 31.

Texas Capital Bancshares exited TARP in May 2009. The company's regulatory Tier 1 leverage ratio was 9.4% and its total risk-based capital ratio was 11.8% as of December 31. The tangible common equity ratio was 8.0%.

Stock Ratios

The shares trade for 13 times the consensus 2012 earnings estimate of $1.68 a share.

Analyst Ratings

Five of the 14 analysts covering Texas Capital rate the shares a buy, while the remaining analysts all recommend holding the shares.

Olney estimates the company has "a potential takeout price of $24.09," which would be a 9% premium to Monday's close.

7 of 11

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs