Texas Capital Bancshares Inc.: A look inside the Mortgage Finance vertical

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Texas Capital Bancshares Inc.: A look inside the Mortgage Finance vertical

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Texas Capital Bancshares Inc.

A look inside the Mortgage Finance vertical

Maintain Rating: BUY | PO: 111.00 USD | Price: 99.39 USD

Benefitting from structural advantages under new set up 25 May 2026

We hosted Rob Holmes, Chairman, President and CEO, Matt Scurlock, CFO, and Dan Equity

Hoverman, Head of Corporate & Investment Banking for a virtual meeting to discuss

Brandon Berman

TCBI’s mortgage finance (MF) business. Management provided a detailed walkthrough of Research Analyst

the strategy to transition a loan-only business into an industry vertical, including its BofAS +1 646 855 3933

complement to the bank’s broader capital markets offering. The new set up should allow brandon.berman@bofa.com

TCBI to benefit from the same structural advantages as money center banks (over

regional banks). We see any weakness in the share price as a particularly attractive

buying opportunity (-330bp vs. KRX since 4/22). Maintain our Buy rating and $111 PO. Stock Data

ECTs provide more than just capital relief… Price 99.39 USD

TCBI redesigned its traditional warehouse facilities into repo-based, SPE structures that Price Objective 111.00 USD

qualify as securitization exposures, enabling a look-through to the underlying collateral Date Established 4-May-2026

and a materially lower risk weight. Each incremental dollar of MF volume is significantly Investment Opinion B-1-7

more capital efficient. Over LTM, TCBI grew loans 13% and repurchased 5% of market 52-Week Range 70.11 USD -108.92 USD

cap while the CET1 ratio increased 36bp. As of 1Q26, 67% of balances were in ECTs, Mrkt Val / Shares Out (mn) 4,398 USD / 44.3

and an additional ~5% could migrate over the next several quarters.