Texas Capital Bancshares, Inc. (NASDAQ:TCBI) Financial Performance Analysis

• TCBI's ROIC to WACC ratio of 0.11 indicates inefficiencies in capital utilization compared to its peers.
• Wintrust Financial Corporation (WTFC), First Financial Bankshares (FFIN), United Community Banks (UCBI), UMB Financial Corporation (UMBF), and CVB Financial Corp. (CVBF) all demonstrate more effective capital utilization than TCBI.
• CVBF stands out with a ROIC to WACC ratio of 1.37, indicating highly efficient capital utilization and better financial health compared to TCBI and other competitors.

Texas Capital Bancshares, Inc. (NASDAQ:TCBI) is a financial services company that provides various banking products and services. It operates primarily in Texas, offering commercial banking, wealth management, and other financial services. In the competitive banking sector, TCBI faces competition from other financial institutions like Wintrust Financial Corporation, First Financial Bankshares, United Community Banks, UMB Financial Corporation, and CVB Financial Corp.

In evaluating TCBI's financial performance, the Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are crucial metrics. TCBI's ROIC is 1.63%, while its WACC is 14.49%, resulting in a ROIC to WACC ratio of 0.11. This indicates that TCBI is not generating returns that exceed its cost of capital, suggesting inefficiencies in capital utilization.

Comparatively, Wintrust Financial Corporation (WTFC) has a ROIC of 5.02% and a WACC of 13.25%, leading to a ROIC to WACC ratio of 0.38. This shows WTFC is more effective in using its capital than TCBI. Similarly, First Financial Bankshares (FFIN) boasts a ROIC of 12.96% against a WACC of 9.99%, with a ROIC to WACC ratio of 1.30, indicating strong capital efficiency.

United Community Banks (UCBI) and UMB Financial Corporation (UMBF) also outperform TCBI in capital utilization. UCBI's ROIC is 3.37% with a WACC of 7.92%, resulting in a ratio of 0.43. UMBF has a ROIC of 8.45% and a WACC of 16.81%, with a ratio of 0.50. Both companies generate returns closer to or above their cost of capital, unlike TCBI.

CVB Financial Corp. (CVBF) stands out with a ROIC of 7.46% and a WACC of 5.45%, achieving a ROIC to WACC ratio of 1.37. This indicates CVBF is highly efficient in capital utilization, generating returns well above its cost of capital. This efficiency suggests better financial health compared to TCBI and its other peers.