Sunday, July 22, 2018

Texas Capital's Strong Loan Growth And Spread Leverage Is A Potent Growth Cocktail

With some exceptions, bank stock investors have to choose between companies with strong leverage to higher rates (like M&T Bank (MTB) and Comerica (CMA)) and those with stronger loan growth. In many cases, “both” is not an option, which makes Texas Capital Bancshares (TCBI) a pretty exceptional growth story right now.

Deposit costs are rising and Texas Capital’s lending portfolio isn’t exactly low-risk, but I expect above-average growth from this lender to continue, particularly as it expands its national lending opportunities. Valuation is a difficult call; more traditional valuation approaches would say that these shares are quite expensive but traditional valuation approaches don’t necessarily fit a non-traditional growth story.

Read the full article here:
Texas Capital's Strong Loan Growth And Spread Leverage Is A Potent Growth Cocktail

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