Analyzing Texas Capital Bancshares (TCBI) & First Hawaiian (FHB)

Texas Capital Bancshares (NASDAQ: TCBI) and First Hawaiian (NASDAQ:FHB) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, dividends, risk and profitability.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Texas Capital Bancshares and First Hawaiian, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Texas Capital Bancshares 0 8 6 0 2.43
First Hawaiian 1 3 1 0 2.00

Texas Capital Bancshares presently has a consensus target price of $94.36, indicating a potential upside of 1.51%. First Hawaiian has a consensus target price of $33.60, indicating a potential upside of 10.71%. Given First Hawaiian’s higher possible upside, analysts plainly believe First Hawaiian is more favorable than Texas Capital Bancshares.

Earnings and Valuation

This table compares Texas Capital Bancshares and First Hawaiian’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Texas Capital Bancshares $764.19 million 6.04 $155.11 million $3.85 24.14
First Hawaiian $736.12 million 5.76 $230.17 million $1.64 18.51

First Hawaiian has lower revenue, but higher earnings than Texas Capital Bancshares. First Hawaiian is trading at a lower price-to-earnings ratio than Texas Capital Bancshares, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Texas Capital Bancshares and First Hawaiian’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Texas Capital Bancshares 22.50% 10.40% 0.89%
First Hawaiian 30.22% 9.02% 1.14%

Dividends

First Hawaiian pays an annual dividend of $0.88 per share and has a dividend yield of 2.9%. Texas Capital Bancshares does not pay a dividend. First Hawaiian pays out 53.7% of its earnings in the form of a dividend.

Insider & Institutional Ownership

35.7% of First Hawaiian shares are owned by institutional investors. 0.5% of Texas Capital Bancshares shares are owned by company insiders. Comparatively, 0.1% of First Hawaiian shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Texas Capital Bancshares beats First Hawaiian on 9 of the 15 factors compared between the two stocks.

About Texas Capital Bancshares

Texas Capital Bancshares, Inc. is a bank holding and a financial holding company. The Company is the parent of Texas Capital Bank, National Association (the Bank). It offers a range of loan, deposit account and other financial products and services to its customers. It offers a range of products and services for its business customers, including commercial loans for general corporate purposes, including financing for working capital, internal growth, acquisitions and financing for business insurance premiums; medium- and long-term tax-exempt loans for municipalities and other governmental and tax-exempt entities; wealth management and trust services, and letters of credit. It also provides banking services for its individual customers, including personal wealth management and trust services; certificates of deposit; interest-bearing and non-interest-bearing checking accounts; traditional money market and savings accounts; loans, both secured and unsecured, and Internet banking.

About First Hawaiian

First Hawaiian, Inc., formerly BancWest Corporation, is a bank holding company. The Company owns First Hawaiian Bank. It operates through three segments: Retail Banking, which includes the financial products and services it provides to consumers, small businesses and certain commercial customers; Commercial Banking, which includes its corporate banking, residential and commercial real estate loans, commercial lease financing, auto dealer financing, deposit products and credit cards, and Treasury and Other, which includes its treasury business, which consists of corporate asset and liability management activities, including interest rate risk management. It provides a range of deposit accounts and lending services to commercial and consumer customers, as well as credit card products, wealth management services and merchant processing services. It provides a range of banking services to consumer and commercial customers, including deposit products, lending services and wealth management.

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