Safe and Sound

Texas Capital Bank, National Association

Dallas, TX
4
Star Rating
Started in 1997, Texas Capital Bank, National Association is an FDIC-insured bank headquartered in Dallas, TX. Regulatory filings show the bank having equity of $2.01 billion on assets of $23.11 billion, as of June 30, 2017.

With 1,501 full-time employees in 13 offices in TX, the bank currently holds loans and leases worth $20.14 billion, including real estate loans of $6.61 billion. U.S. bank customers currently have $17.51 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Texas Capital Bank, National Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three important criteria Bankrate used to evaluate American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of an institution's financial fortitude. It works as a bulwark against losses and as protection for depositors when a bank is experiencing financial trouble. From a safety and soundness perspective, the more capital, the better.
Texas Capital Bank, National Association finished below the national average of 13.38 on our test to measure capital adequacy, achieving a score of 8 out of a possible 30 points.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Texas Capital Bank, National Association's Tier 1 capital ratio was 8.16 percent, higher than the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, Texas Capital Bank, National Association held equity amounting to 8.70 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test is intended to estimate how the bank's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as past-due mortgages.

Having lots of these types of assets may eventually require a bank to use capital to cover losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, resulting in diminished earnings and potentially more risk of a future failure.

Texas Capital Bank, National Association came in below the national average of 37.62 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.66 percent of Texas Capital Bank, National Association's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.04 percent.

Banks maintain a reserve to handle troubled assets known as an "allowance for loan and lease losses." That reserve's size can be a handy indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on Texas Capital Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the bank better prepared to withstand economic shocks. Losses, on the other hand, reduce a bank's ability to do those things.

On Bankrate's earnings test, Texas Capital Bank, National Association scored 18 out of a possible 30, better than the national average of 16.52.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Texas Capital Bank, National Association's most recent annualized quarterly return on equity was 9.93 percent, above the national average of 9.28 percent.

The bank earned net income of $97.4 million on total equity of $2.01 billion for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.89 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.








WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.