Regional banking firm Texas Capital Bancshares (NASDAQ: TCBI) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 11.6% year on year to $340.4 million. Its non-GAAP profit of $2.18 per share was 22.9% above analysts’ consensus estimates.

Is now the time to buy Texas Capital Bank? Find out by accessing our full research report, it’s free for active Edge members.

“Texas Capital delivered both the strategic and financial outcomes we set in our Strategic Update on September 1, 2021, resulting in the most successful bank transformation in the last 20 years, structurally elevating our earnings power and achieving industry-leading growth in fee income, return on assets and balance sheet resilience,” said Rob C. Holmes, Chairman, President & CEO.

Company Overview

Founded during the Texas banking renaissance of the 1990s with an entrepreneurial spirit, Texas Capital Bancshares (NASDAQ: TCBI) is a financial services firm that provides banking, wealth management, and investment banking services to businesses and individuals across Texas and beyond.

Sales Growth

Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities. Unfortunately, Texas Capital Bank’s 2.8% annualized revenue growth over the last five years was tepid. This fell short of our benchmarks and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Texas Capital Bank’s annualized revenue growth of 4.7% over the last two years is above its five-year trend, but we were still disappointed by the results. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Texas Capital Bank reported year-on-year revenue growth of 11.6%, and its $340.4 million of revenue exceeded Wall Street’s estimates by 4.1%.

Net interest income made up 84.4% of the company’s total revenue during the last five years, meaning Texas Capital Bank barely relies on non-interest income to drive its overall growth.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

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Tangible Book Value Per Share (TBVPS)

Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.

When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to M&A or accounting rules allowing for loan losses to be spread out.

Texas Capital Bank’s TBVPS grew at a solid 7% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 12.4% annually over the last two years from $57.82 to $73.02 per share.

Over the next 12 months, Consensus estimates call for Texas Capital Bank’s TBVPS to grow by 7.5% to $78.48, mediocre growth rate.

Key Takeaways from Texas Capital Bank’s Q3 Results

It was good to see Texas Capital Bank beat analysts’ revenue and EPS expectations this quarter on better-than-expected net interest income and efficiency ratio. Zooming out, we think this was a very solid print. The stock remained flat at $82.05 immediately after reporting.

Big picture, is Texas Capital Bank a buy here and now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.