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Why the Stock of Texas Capital Bancshares Took a Hit Today

By Bram Berkowitz - Updated Mar 29, 2021 at 5:22PM

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The exact reason is unclear, but there are some potential possibilities lurking.

What happened

The stock of Texas Capital Bancshares (TCBI -1.44%) dropped nearly 11% today in an unusual day of trading in which volume far surpassed the norm for the $37-billion asset regional bank.

So what

It's hard to know exactly what drove the decline. Recently, analysts at the investment firm Wedbush Securities lowered the bank's earnings estimates for the first quarter, but that is unlikely to have moved the stock so significantly days later.

Analysts at Bank of America reportedly wrote in a research note today that a major shareholder may have significantly lowered their position, also noting that the potential investor's stake in the bank "remains unclear."

Line with arrow moving downward.

Image source: Getty Images.

There is also the possibility the stock's decline had something to do with the mess surrounding Archegos Capital, after the firm got hammered by a $20 billion margin call on Friday.

The firm Nomura, which reportedly did some business with Archegos and is owed about $2 billion from the firm, owns nearly 2.2 million shares in Texas Capital Bancshares.

Now what

All of this is mere speculation, and there is no definitive driver behind the sell-off today.

Ultimately, while Texas Capital had a very tough year in 2020, setting aside large provisions for potential loan losses, the bank did generate much better earnings in the second half of the year.

The bank also recently traded much higher than it did prior to the pandemic and hit its highest share price since September of 2018, so I'm guessing this is more of an isolated incident and has less to do with the bank's performance.


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