Texas Capital Announces New Buyback Plan: Sustainable or Not?

Core Viewpoint - Texas Capital Bancshares, Inc. (TCBI) has approved a new $200 million share repurchase program effective from December 12, 2025, through December 31, 2026, replacing the previous authorization [1][9]. Financial Position - As of September 30, 2025, TCBI reported a total capital ratio of 16.1% and a CET1 ratio of 13.6%, both above regulatory minimums, indicating solid capital levels that support the sustainability of the repurchase program [3][4]. - TCBI's liquidity position is strong, with $3.06 billion in liquid assets compared to $895.4 million in total debt, which includes long-term and short-term borrowings [4]. Share Repurchase Details - The new repurchase program will allow for buybacks through open-market purchases or privately negotiated transactions, depending on stock price, market conditions, and TCBI's liquidity [2]. - Under the previous $200 million authorization announced in January 2025, TCBI had repurchased 2 million shares for $164 million as of December 1, 2025 [3][9]. Peer Comparison - Other banks like BOK Financial Corporation (BOKF) and Cullen/Frost Bankers, Inc. (CFR) also engage in shareholder rewards through dividends and share repurchase programs, indicating a trend in the industry [5]. - BOK Financial increased its quarterly dividend by 3.6% and has a new repurchase authorization of up to 5 million shares, while Cullen/Frost raised its dividend by 5.3% and has a $150 million stock repurchase plan [6][7]. Market Performance - TCBI shares have increased by 29.1% over the past six months, outperforming the industry growth of 7.3% [8].