Texas Capital Bankshares' (TCBI) second-quarter 2012 operating earnings surpassed the Zacks Consensus Estimate by $0.05 per share. Quarterly results benefited from an increase in the top line aided by an augmentation in both net interest income as well as non-interest income.
The company's business model remains a chief growth driver. In addition, the gain in market share from its competitors and organic growth is impressive. Its efforts to hire experienced bankers and expand its presence are encouraging.
We believe that with an eventual improvement in Texas' economy, the company would be poised to experience a further increase in earnings. Our six-month target price of $62.00 equates to 20.5x our earnings estimate for 2012. This price target implies an expected total return of 20.1% over that period, which is consistent with our Outperform recommendation on the shares.
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