Texas Capital Bancshares (TCBI) Q4 2024 earnings summary

Executive summary

• Achieved record financial results in 2024, with adjusted non-interest income up 30% year-over-year and significant progress in strategic transformation and client acquisition.

• Fee income in focus areas rose 38% year-over-year, with record book value and tangible book value per share, both up 8% year-over-year.

• Tangible book value per share reached an all-time high of $66.32, up 8% year-over-year.

• Asset quality remained strong, with net charge-offs at 0.19% of average loans for 2024 and allowance coverage among the top of peers.

• Maintained industry-leading capital and liquidity, with tangible common equity to tangible assets at 10% and cash/securities at 25% of assets.

Financial highlights

• Q4 revenue increased 15% year-over-year to $283.7 million; full-year adjusted revenue up 3%.

• Full-year adjusted net income to common was $208.3 million, with adjusted EPS of $4.43.

• Total deposits grew 13% and total loans increased 10% year-over-year; total assets reached $30.7 billion, up 8%.

• Adjusted quarterly non-interest expense declined 9% sequentially; full-year adjusted non-interest expense up less than 1%.

• Allowance for credit loss increased to $325 million, 1.87% of LHI (excluding mortgage finance), a high since CECL adoption.

Outlook and guidance

• 2025 guidance calls for high single- to low double-digit adjusted revenue growth and $270 million in adjusted non-interest revenue.

• Non-interest expense growth guided to high single digits, mainly due to increased hiring in investment banking and treasury solutions.

• Provision outlook for 2025 set at 30-35 basis points of average LHI (excluding mortgage finance).

• Targeting quarterly ROAA of 1.1% in the second half of 2025.

• CET1 ratio expected to remain above 11%.