Zacks Investment Research downgraded shares of Texas Capital Bancshares Inc. (TCBI) from OUTPERFORM to NEUTRAL on April 09, 2013, with a target price of $44.50.
We have downgraded Texas Capital from Outperform to Neutral based on the company's inability to control expenses which led to higher expenses in 2012. Moreover, the company's fourth-quarter 2012 operating earnings lagged the Zacks Consensus Estimate. Quarterly results were adversely affected by increased expenses and decreased net interest margin, partially mitigated by better top-line results. We believe the company's business model remains a primary 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. Though the resultant expenses that continue to mount remain a concern, we believe that with an eventual improvement in the Texan economy, the company would be poised to experience a further increase in earnings.
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